##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

|                                              |  |                                                                                          
|--------------------------------------------- |  | -----------------------------------------------------------------------------------------
|(Mark One)                                    |  |                                                                                          
|[x]                                           |  | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    
|                                             
|For the fiscal year ended December 31, 2002or
|                                             
|[  ]                                          |  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.

Commission File Number: 000-24799

|                                                      
|------------------------------------------------------
|THE CORPORATE EXECUTIVE BOARD COMPANY                 
|(Exact name of registrant as specified in its charter)

|                                                                                        |  |                                                  
|--------------------------------------------------------------------------------------- |  | -------------------------------------------------
|Delaware(State or other
jurisdiction
of incorporation or organization                   |  | 52-2056410(I.R.S. Employer
Identification Number)
|                                                                                       
|2000 Pennsylvania Avenue,
N.W.
Washington, D.C.(Address of principal executive offices) |  | 20006(Zip Code)                                  

|                                                    
|----------------------------------------------------
|(202) 777-5000                                      
|(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: Not applicable

Securities registered pursuant to
Section 12(g) of the Act:

|                                       
|---------------------------------------
|Common Stock, par value $0.01 per share
|(Title of class)                       

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [x] No [ ]

Based upon the closing price of the registrants common stock as of June
28, 2002, the aggregate market value of the common stock held by non-affiliates
of the registrant was $1,077,222,095*.





---



##### 



As of February 21, 2003, The Corporate Executive Board Company had
outstanding 37,189,630 shares of Common Stock, par value $0.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference and the
Part of the Form 10-K/A into which the document is incorporated:

None.



---

|* |  | Solely for purposes of this calculation, all executive officers and
directors of the registrant and all shareholders reporting beneficial
ownership of more than 5% of the registrants common stock are considered
to be affiliates.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (this Amendment)
is being filed to amend the Registrants Annual Report on
Form 10-K for the year ended December 31, 2002, as filed on February
28, 2003 (the Original Report on Form 10-K).
The purpose of this Amendment is to correct Note 13 to the Companys financial statements.
The correction is in the calculation of total stock-based employee
compensation determined under the fair value method for all awards, net of
related tax effects, pro forma net income and pro forma basic and diluted
earnings per share for the year ended December 31, 2002. Pursuant to Rule
12b-15 under the Securities Exchange Act of 1934, this Amendment contains the complete
text of Item 8. Financial Statements and Supplementary Data, as amended.

This Amendment does not reflect events
occurring after the filing of the
Original Report on Form 10-K, and does not modify or update the disclosures
therein in any way other than as required to reflect the correction to Note 13 described
above.

2



---



##### 



PART II

Item 8.      Financial Statements and Supplementary Data

Report of Independent Auditors

The Board of Directors and Stockholders of

The Corporate Executive Board Company:

We have audited the balance sheet of The Corporate Executive Board Company as
of December 31, 2002, and the related statements of income, changes in
stockholders equity and cash flows for the year then ended. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of The Corporate Executive Board Company
for the years ended December 31, 2000 and 2001, were audited by other auditors
who have ceased operations and whose report dated January 31, 2002 expressed an
unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the 2002 financial statements referred to above present fairly,
in all material respects, the financial position of The Corporate Executive
Board Company at December 31, 2002, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States.

| |  |                      
| |  | ---------------------
| |  | /s/ Ernst & Young LLP

Washington, D.C.

January 31, 2003

3



---



##### 



The following report is a copy of a report previously issued by Arthur
Andersen LLP (Andersen), which report has not been reissued by Andersen.
Certain financial information for each of the two years in the period ended
December 31, 2001 was not reviewed by Andersen and includes additional
disclosures to conform to new accounting pronouncements and SEC rules and
regulations issued during such fiscal year.

Report of Independent Auditors

To the Stockholders of The Corporate Executive Board Company:

We have audited the accompanying balance sheets of The Corporate Executive
Board Company as of December 31, 2000 and 2001, and the related statements of
income, stockholders equity (deficit) and cash flows for each of the three
years in the period ended December 31, 2001. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Corporate Executive
Board Company as of December 31, 2000 and 2001, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

| |  |                        
| |  | -----------------------
| |  | /s/ Arthur Andersen LLP

Washington, D.C.
January 31, 2002

4



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

BALANCE SHEETS
(In thousands, except share amounts)

|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |         |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------- | ------------------------------------------ | ------ | ------------ | ------- | ------- | ------- | ------- | ------- | 
|                                                                                                                                                                        |                                           |                           |                                            |        | December 31,
|                                                                                                                                                                        |                                           |                           |                                            |        |             
|                                                                                                                                                                        |                                           |                           |                                            |        | 2001         |         | 2002   
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |        
|                                                                                                                                                                        | ASSETS                                    |                           |                                            |        |              |         |         |         |        
|CURRENT ASSETS:                                                                                                                                                         |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        | Cash and cash equivalents                 |                           | $                                          | 48,271 |              |         | $       | 71,346  |        
|                                                                                                                                                                        | Marketable securities                     |                           |                                            | 35,735 |              |         |         | 17,030  |        
|                                                                                                                                                                        | Membership fees receivable, net           |                           |                                            | 42,011 |              |         |         | 50,356  |        
|                                                                                                                                                                        | Deferred income taxes                     |                           |                                            | 19,881 |              |         |         | 28,806  |        
|                                                                                                                                                                        | Deferred incentive compensation           |                           |                                            | 4,216  |              |         |         | 4,974   |        
|                                                                                                                                                                        | Prepaid expenses and other current assets |                           |                                            | 3,042  |              |         |         | 3,668   |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           | Total current assets      |                                            |        | 153,156      |         |         |         | 176,180 |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|DEFERRED INCOME TAXES                                                                                                                                                   |                                           |                           | 38,639                                     |        |              |         | 30,920  |        
|MARKETABLE SECURITIES                                                                                                                                                   |                                           |                           | 48,463                                     |        |              |         | 137,565 |        
|PROPERTY AND EQUIPMENT, NET                                                                                                                                             |                                           |                           | 17,260                                     |        |              |         | 14,916  |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           | Total assets              |                                            | $      | 257,518      |         |         | $       | 359,581 |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        | LIABILITIES
AND STOCKHOLDERS EQUITY      |                           |                                            |        |              |         |         |         |        
|CURRENT LIABILITIES:                                                                                                                                                    |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        | Accounts payable and accrued liabilities  |                           | $                                          | 10,683 |              |         | $       | 12,549  |        
|                                                                                                                                                                        | Accrued incentive compensation            |                           |                                            | 6,387  |              |         |         | 9,660   |        
|                                                                                                                                                                        | Deferred revenues                         |                           |                                            | 94,683 |              |         |         | 121,415 |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           | Total current liabilities |                                            |        | 111,753      |         |         |         | 143,624 |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|OTHER LIABILITIES                                                                                                                                                       |                                           |                           | 1,781                                      |        |              |         | 2,600   |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           | Total liabilities         |                                            |        | 113,534      |         |         |         | 146,224 |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|STOCKHOLDERS EQUITY:                                                                                                                                                   |                                           |                           |                                            |        |              |         |         |        
|Preferred stock, par value $0.01; 5,000,000 shares authorized, no
shares issued and outstanding                                                                         |                                           |                           |                                           |        |              |         |        |        
|Common stock, par value $0.01; 100,000,000 shares authorized and
34,898,060 and 37,182,846 shares issued and outstanding as of
December 31, 2001 and 2002, respectively |                                           |                           | 349                                        |        |              |         | 372     |        
|Additional paid-in-capital                                                                                                                                              |                                           |                           | 94,221                                     |        |              |         | 129,846 |        
|Retained earnings                                                                                                                                                       |                                           |                           | 48,243                                     |        |              |         | 77,844  |        
|Accumulated elements of comprehensive income                                                                                                                            |                                           |                           | 1,171                                      |        |              |         | 5,295   |        
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           |                           | Total stockholders equity                 |        |              | 143,984 |         |         |         | 213,357 | 
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        
|                                                                                                                                                                        |                                           |                           | Total liabilities and stockholders equity |        | $            | 257,518 |         |         | $       | 359,581 | 
|                                                                                                                                                                        |                                           |                           |                                            |        |              |         |         |        

See accompanying notes to financial statements.

5



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF INCOME
(In thousands, except per share amounts)

|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |        |        | 
|---------------------------------------------------------------------- | --------------------------------- | ------------------------ | ------ | ----------------------- | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                                       |                                   |                          |        | Year ended December 31,
|                                                                       |                                   |                          |        |                        
|                                                                       |                                   |                          |        | 2000                    |        | 2001 |         | 2002  
|                                                                       |                                   |                          |        |                         |        |      |         |       
|REVENUES                                                               |                                   | $                        | 95,491 |                         |        | $    | 128,112 |        |        | $ | 162,357 |       
|                                                                       | Cost of services                  |                          |        | 36,094                  |        |      |         | 45,738 |        |   |         | 56,147 |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|GROSS PROFIT                                                           |                                   |                          | 59,397 |                         |        |      | 82,374  |        |        |   | 106,210 |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|COSTS AND EXPENSES:                                                    |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|                                                                       | Member relations and marketing    |                          |        | 21,236                  |        |      |         | 30,219 |        |   |         | 40,768 |       
|                                                                       | General and administrative        |                          |        | 12,021                  |        |      |         | 15,877 |        |   |         | 17,493 |       
|                                                                       | Depreciation                      |                          |        | 2,573                   |        |      |         | 4,412  |        |   |         | 5,456  |       
|                                                                       | Stock option and related expenses |                          |        | 1,371                   |        |      |         | 1,260  |        |   |         | 668    |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|                                                                       |                                   | Total costs and expenses |        |                         | 37,201 |      |         |        | 51,768 |   |         |        | 64,385 | 
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|INCOME FROM OPERATIONS                                                 |                                   |                          | 22,196 |                         |        |      | 30,606  |        |        |   | 41,825  |       
|OTHER INCOME, NET                                                      |                                   |                          | 2,263  |                         |        |      | 4,283   |        |        |   | 6,346   |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|INCOME BEFORE PROVISION FOR INCOME TAXES                               |                                   |                          | 24,459 |                         |        |      | 34,889  |        |        |   | 48,171  |       
|PROVISION FOR INCOME TAXES                                             |                                   |                          | 9,539  |                         |        |      | 13,257  |        |        |   | 18,570  |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|NET INCOME                                                             |                                   | $                        | 14,920 |                         |        | $    | 21,632  |        |        | $ | 29,601  |       
|                                                                       |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|EARNINGS PER SHARE:                                                    |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|                                                                       | Basic                             |                          | $      | 0.49                    |        |      | $       | 0.64   |        |   | $       | 0.81   |       
|                                                                       | Diluted                           |                          | $      | 0.43                    |        |      | $       | 0.59   |        |   | $       | 0.79   |       
|WEIGHTED AVERAGE SHARES USED IN THE CALCULATION OF
EARNINGS PER SHARE: |                                   |                          |        |                         |        |      |         |        |        |   |         |       
|                                                                       | Basic                             |                          |        | 30,321                  |        |      |         | 34,003 |        |   |         | 36,722 |       
|                                                                       | Diluted                           |                          |        | 34,638                  |        |      |         | 36,465 |        |   |         | 37,671 |       

See accompanying notes to financial statements.

6



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF CASH FLOWS
(In thousands)

|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |        |        |         |  
|---------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ----------------------------------------- | ----------------------------------------------- | ------ | ----------------------- | ------- | ------- | ------ | ------- | ------- | -------- | ------ | ------ | ------- | -
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        | Year ended December 31,
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                        
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        | 2000                    |         | 2001    |        | 2002   
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |         
|                                                     | Net income                                                                       |                                                                                            | $                                         | 14,920                                          |        |                         | $       | 21,632  |        |         | $       | 29,601   |       
|                                                     | Adjustments to reconcile net income to net cash flows from
operating activities: |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|                                                     |                                                                                  | Depreciation                                                                               |                                           |                                                 | 2,573  |                         |         |         | 4,166  |         |         |          | 5,456  |       
|                                                     |                                                                                  | Loss on disposition of property and equipment                                              |                                           |                                                 | 223    |                         |         |         | 246    |         |         |          |       |       
|                                                     |                                                                                  | Deferred income taxes and tax benefits resulting from the exercise of common stock options |                                           |                                                 | 9,065  |                         |         |         | 13,440 |         |         |          | 18,349 |       
|                                                     |                                                                                  | Stock option repurchases                                                                   |                                           |                                                 | (1,570 | )                       |         |         | (3,140 | )       |         |          |       |       
|                                                     |                                                                                  | Stock option and related expenses                                                          |                                           |                                                 | 384    |                         |         |         | 186    |         |         |          |       |       
|                                                     |                                                                                  | Amortization of marketable securities premiums, net                                        |                                           |                                                 | 196    |                         |         |         | 478    |         |         |          | 1,506  |       
|                                                     |                                                                                  | Changes in operating assets and liabilities:                                               |                                           |                                                 |        |                         |         |         |        |         |         |          |        |       
|                                                     |                                                                                  |                                                                                            | Membership fees receivable, net           |                                                 |        | (2,916                  | )       |         |        | (12,492 | )       |          |        | (8,345 | )      
|                                                     |                                                                                  |                                                                                            | Deferred incentive compensation           |                                                 |        | (26                     | )       |         |        | (1,389  | )       |          |        | (758   | )      
|                                                     |                                                                                  |                                                                                            | Prepaid expenses and other current assets |                                                 |        | (1,697                  | )       |         |        | (27     | )       |          |        | (626   | )      
|                                                     |                                                                                  |                                                                                            | Accounts payable and accrued liabilities  |                                                 |        | 2,023                   |         |         |        | 2,581   |         |          |        | 1,866  |        
|                                                     |                                                                                  |                                                                                            | Accrued incentive compensation            |                                                 |        | (864                    | )       |         |        | 3,374   |         |          |        | 3,273  |        
|                                                     |                                                                                  |                                                                                            | Deferred revenues                         |                                                 |        | 15,845                  |         |         |        | 23,402  |         |          |        | 26,732 |        
|                                                     |                                                                                  |                                                                                            | Other liabilities                         |                                                 |        | 584                     |         |         |        | 384     |         |          |        | 819    |        
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |         
|                                                     |                                                                                  |                                                                                            |                                           | Net cash flows provided by operating activities |        |                         | 38,740  |         |        |         | 52,841  |          |        |        | 77,873  |  
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |         
|                                                     | Purchase of property and equipment                                               |                                                                                            |                                           | (9,287                                          | )      |                         |         | (5,260  | )      |         |         | (3,112   | )     
|                                                     | Purchase of marketable securities                                                |                                                                                            |                                           | (89,569                                         | )      |                         |         | (61,022 | )      |         |         | (116,738 | )     
|                                                     | Sales and maturities of marketable securities                                    |                                                                                            |                                           | 54,378                                          |        |                         |         | 27,717  |        |         |         | 51,564   |       
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|                                                     |                                                                                  |                                                                                            |                                           | Net cash flows used in investing activities     |        |                         | (44,478 | )       |        |         | (38,565 | )        |        |        | (68,286 | )
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |         
|                                                     | Proceeds from the exercise of common stock options                               |                                                                                            |                                           | 5,355                                           |        |                         |         | 13,798  |        |         |         | 12,835   |       
|                                                     | Proceeds from issuance of common stock under the employee stock purchase plan    |                                                                                            |                                           | 150                                             |        |                         |         | 704     |        |         |         | 653      |       
|                                                     | Reimbursement of common stock offering costs                                     |                                                                                            |                                           | 650                                             |        |                         |         | 375     |        |         |         | 300      |       
|                                                     | Payment of common stock offering costs                                           |                                                                                            |                                           | (650                                            | )      |                         |         | (375    | )      |         |         | (300     | )     
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|                                                     |                                                                                  |                                                                                            |                                           | Net cash flows provided by financing activities |        |                         | 5,505   |         |        |         | 14,502  |          |        |        | 13,488  |  
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                  |                                                                                            | (233                                      | )                                               |        |                         | 28,778  |         |        |         | 23,075  |         
|Cash and cash equivalents, beginning of period       |                                                                                  |                                                                                            | 19,726                                    |                                                 |        |                         | 19,493  |         |        |         | 48,271  |         
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       
|Cash and cash equivalents, end of period             |                                                                                  | $                                                                                          | 19,493                                    |                                                 |        | $                       | 48,271  |         |        | $       | 71,346  |         
|                                                     |                                                                                  |                                                                                            |                                           |                                                 |        |                         |         |         |        |         |         |          |       

See accompanying notes to financial statements.

7



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

For the years ended December 31, 2000, 2001, and 2002
(In thousands, except share amounts)

|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |        | 
|---------------------------- | ------------------------------------------------------------------------ |  | --------------- | - | ------------ | - | ---------- | - | -------- |  | ---------- | --------- | ------- | - | -------- | -- | ------ | - | ------- | ------ | ------- | - | ---- | --- |  | - | ------ | ------ |  | - | ----------- | ----- |  | - | ------- | ------ | ------ | - | ------ | ------ | 
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   | Accumu-     |       |  |   |         |        |        |   |       
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   | lated       |       |  |   |         |        |        |   |       
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   | elements of |       |  |   |         |        | Annual
|                             |                                                                          |  | Preferred stock |   | Common stock |   | Additional |   | Deferred |  |            |           |         |   | compre-  |    |        |   |         |        | compre-
|                             |                                                                          |  |                 |   |              |   | paid-in-   |   | compen-  |  | Retained   |           | hensive |   |          |    |        |   | hensive
|                             |                                                                          |  | Shares          |   | Amount       |   | Shares     |   | Amount   |  | capital    |           | sation  |   | earnings |    | income |   | Total   |        | income 
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |        
|Balance at December 31, 1999 |                                                                          |  |                |   |              | $ |           |   |          |  | 27,139,920 |           |         | $ | 271      |    |        | $ | 134     |        |         | $ | (570 | )   |  | $ | 11,691 |        |  | $ | (680        | )     |  | $ | 10,846  |        |        |   |        |       
|                             | Issuance of common stock
upon the exercise of
common stock options       |  |                 |  |              |   |            |  |          |  |            | 3,998,470 |         |   |          | 40 |        |   |         | 5,315  |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 5,355  |        |   |        |       | 
|                             | Issuance of common stock
under the employee stock
purchase plan          |  |                 |  |              |   |            |  |          |  |            | 5,679     |         |   |          |   |        |   |         | 150    |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 150    |        |   |        |       | 
|                             | Tax benefits related to the
exercise of stock options                    |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         | 32,980 |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 32,980 |        |   |        |       | 
|                             | Amortization of deferred
compensation                                    |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      | 384 |  |   |        |       |  |   |             |      |  |   |         | 384    |        |   |        |       | 
|                             | Unrealized gains on
available-for-sale
marketable securities,
net of tax |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        |       |  |   |             | 926   |  |   |         | 926    |        |   |        | 926    | 
|                             | Net income                                                               |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        | 14,920 |  |   |             |      |  |   |         | 14,920 |        |   |        | 14,920 | 
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       
|Balance at December 31, 2000 |                                                                          |  |                |   |              | $ |           |   |          |  | 31,144,069 |           |         | $ | 311      |    |        | $ | 38,579  |        |         | $ | (186 | )   |  | $ | 26,611 |        |  | $ | 246         |       |  | $ | 65,561  |        |        | $ | 15,846 |       
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       
|                             | Issuance of common stock
upon the exercise of
common stock options       |  |                 |  |              |   |            |  |          |  |            | 3,727,682 |         |   |          | 38 |        |   |         | 13,760 |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 13,798 |        |   |        |       | 
|                             | Issuance of common stock
under the employee stock
purchase plan          |  |                 |  |              |   |            |  |          |  |            | 26,309    |         |   |          |   |        |   |         | 704    |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 704    |        |   |        |       | 
|                             | Tax benefits related to
the exercise of stock
options                    |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         | 41,178 |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 41,178 |        |   |        |       | 
|                             | Amortization of deferred
compensation                                    |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      | 186 |  |   |        |       |  |   |             |      |  |   |         | 186    |        |   |        |       | 
|                             | Unrealized gains on
available-for-sale
marketable securities,
net of tax |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        |       |  |   |             | 925   |  |   |         | 925    |        |   |        | 925    | 
|                             | Net income                                                               |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        | 21,632 |  |   |             |      |  |   |         | 21,632 |        |   |        | 21,632 | 
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       
|Balance at December 31, 2001 |                                                                          |  |                |   |              | $ |           |   |          |  | 34,898,060 |           |         | $ | 349      |    |        | $ | 94,221  |        |         | $ |     |     |  | $ | 48,243 |        |  | $ | 1,171       |       |  | $ | 143,984 |        |        | $ | 22,557 |       
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       
|                             | Issuance of common stock
upon the exercise of
common stock options       |  |                 |  |              |   |            |  |          |  |            | 2,259,653 |         |   |          | 23 |        |   |         | 12,812 |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 12,835 |        |   |        |       | 
|                             | Issuance of common stock
under the employee stock
purchase plan          |  |                 |  |              |   |            |  |          |  |            | 25,133    |         |   |          |   |        |   |         | 653    |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 653    |        |   |        |       | 
|                             | Tax benefits related to
the exercise of stock
options                    |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         | 22,160 |         |   |      |    |  |   |        |       |  |   |             |      |  |   |         | 22,160 |        |   |        |       | 
|                             | Unrealized gains on
available-for-sale
marketable securities,
net of tax |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        |       |  |   |             | 4,124 |  |   |         | 4,124  |        |   |        | 4,124  | 
|                             | Net income                                                               |  |                 |  |              |   |            |  |          |  |            |          |         |   |          |   |        |   |         |       |         |   |      |    |  |   |        | 29,601 |  |   |             |      |  |   |         | 29,601 |        |   |        | 29,601 | 
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       
|Balance at December 31, 2002 |                                                                          |  |                |   |              | $ |           |   |          |  | 37,182,846 |           |         | $ | 372      |    |        | $ | 129,846 |        |         | $ |     |     |  | $ | 77,844 |        |  | $ | 5,295       |       |  | $ | 213,357 |        |        | $ | 33,725 |       
|                             |                                                                          |  |                 |   |              |   |            |   |          |  |            |           |         |   |          |    |        |   |         |        |         |   |      |     |  |   |        |        |  |   |             |       |  |   |         |        |        |   |        |       

See accompanying notes to financial
statements.



8



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS

1.      Description of operations

The Corporate Executive Board Company (the Company) provides best
practices research and quantitative analysis focusing on corporate strategy,
operations and general management issues. Best practices research supports
senior executive decision making by identifying and analyzing specific
management initiatives, processes and strategies that have been determined to
produce the best results in solving common business problems or challenges. For
a fixed annual fee, members of each of its research programs have access to an
integrated set of services, including best practices research studies,
executive education seminars, customized research briefs and Web-based access
to the programs content database and decision support tools.

2.      Spin-off

The Company was incorporated on September 11, 1997, under the laws of the
State of Delaware. The Companys business was operated as a division of The
Advisory Board Company, a Maryland corporation, until October 31, 1997, when
the business was contributed to the Company and spun-off to The Advisory Board
Companys sole stockholder (the Spin-off). Subsequent to February 2000, the
former sole stockholder owns no shares of the Companys common stock.

3.      Summary of significant accounting policies

Cash equivalents and marketable securities

Short-term investments and marketable securities that mature within three
months of purchase are classified as cash equivalents. Short-term investments
and marketable securities with maturities of more than three months are
classified as marketable securities. As of December 31, 2001 and 2002, the
Companys marketable securities consisted primarily of United States Treasury
notes and bonds and Washington, D.C. tax exempt notes and bonds. The Company
classifies its marketable securities as available-for-sale, which are carried
at fair value based on quoted market prices. The net unrealized gains and
losses on available-for-sale marketable securities are excluded from net income
and are included within accumulated elements of comprehensive income. The
specific identification method is used to compute the realized gains and losses
on the sale of marketable securities. The Company may elect not to hold these
marketable securities to maturity and may elect to sell these securities at any
time.

Property and equipment

Property and equipment consists of furniture, fixtures and equipment,
capitalized software and Web site development costs, and leasehold
improvements. Property and equipment are stated at cost, less accumulated
depreciation expense. Furniture, fixtures and equipment are depreciated using
the straight-line method over the estimated useful lives of the assets, which
range from three to seven years. Capitalized software and Web site development
costs are depreciated using the straight-line method over the estimated useful
lives of the assets, which range from three to five years. Leasehold
improvements are depreciated using the straight-line method over the shorter of
the estimated useful lives of the assets or the lease term. Replacements and
major improvements are capitalized. Maintenance and repairs are charged to
expense as incurred.

Recovery of long-lived assets

Long-lived assets and identifiable assets to be held and used are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company recognizes an
impairment loss when the sum of the expected undiscounted future cash flows is
less than the carrying amount of the asset. The Company believes that no such
impairment existed as of December 31, 2001 and 2002.

9



---



##### 



Revenue recognition

Revenues from membership subscriptions are recognized ratably over the
term of the related subscription, which is generally 12 months. Revenues from
implementation support memberships are recognized as services are performed,
limited by the Companys pro rata refund policy. Membership fees are generally
billable, and revenue recognition begins, when the member agrees to the terms
of the membership. Certain membership fees are billed on an installment basis.
Members may request a refund of their membership fees, which is provided on a
pro rata basis relative to the length of the remaining membership term. The
Companys policy is to record the full amount of membership fees receivable as
an asset and related deferred revenue as a liability when a member agrees to
the terms of a membership. Revenues from membership subscriptions were greater
than 95% of total revenues for each of the years ending December 31, 2000,
2001, and 2002. In addition, as of December 31, 2001 and 2002, approximately
$2.5 million and $1.7 million, respectively, of deferred revenues were to be
recognized beyond the following 12 months.

Commission expense recognition

Commission expenses related to the negotiation of new memberships and the
renewal of existing memberships are deferred and amortized over the term of the
related memberships.

Earnings per share

Basic earnings per share was computed by dividing net income by the number
of weighted average common shares outstanding during the period. Diluted
earnings per share was computed by dividing net income by the number of diluted
weighted average common shares outstanding during the period. The number of
weighted average common share equivalents outstanding has been determined in
accordance with the treasury-stock method. Common share equivalents consist of
common shares issuable upon the exercise of outstanding common stock options. A
reconciliation of basic to diluted weighted average common shares outstanding
is as follows (in thousands):

|                                                      |  |                         |        |      |  |      |        |  |  |  |        | 
|----------------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                      |  | Year Ended December 31,
|                                                      |  |                        
|                                                      |  | 2000                    |        | 2001 |  | 2002
|                                                      |  |                         |        |      |  |     
|Basic weighted average common shares outstanding      |  |                         | 30,321 |      |  |      | 34,003 |  |  |  | 36,722 | 
|Weighted average common share equivalents outstanding |  |                         | 4,317  |      |  |      | 2,462  |  |  |  | 949    | 
|                                                      |  |                         |        |      |  |      |        |  | 
|Diluted weighted average common shares outstanding    |  |                         | 34,638 |      |  |      | 36,465 |  |  |  | 37,671 | 
|                                                      |  |                         |        |      |  |      |        |  | 

Financial instruments, which potentially expose the Company to
concentration of credit risk, consist primarily of membership fees receivable
and cash, cash equivalents and marketable securities. Concentrations of credit
risk with respect to membership fees receivable are limited due to the large
number of members and their dispersion across many different industries and
countries worldwide. However, the Company may be exposed to a declining
membership base in periods of unforeseen market downturns, severe competition
or international developments. The Company performs periodic evaluations of the
membership base and related membership fees receivable and establishes
allowances for potential credit losses.

The Company generates revenues from members located outside of the United
States. For the years ended December 31, 2000, 2001 and 2002, approximately
29%, 30% and 27% of revenues, respectively, were generated from members located
outside of the United States. Revenues from customers in European countries
were approximately 15%, 16% and 15% for the years ended December 31, 2000, 2001
and 2002, respectively, with no other geographic area representing more than
10% of revenues in any period. No individual member accounted for more than 2%
of revenues for any period presented.

10



---



##### 



The Company maintains a portfolio of cash, cash equivalents and marketable
securities, which is designed for safety of principal and liquidity, with
financial institutions. Cash and cash equivalents consist of highly liquid U.S.
government and U.S. Treasury obligations with original maturities of less than
three months. Marketable securities consist primarily of U.S. Treasury notes
and bonds and Washington, D.C. tax exempt notes and bonds. The Company performs
periodic evaluations of the relative credit ratings related to the cash, cash
equivalents and marketable securities.

Fair value of financial instruments

The fair value of current assets and current liabilities approximates
their carrying value due to their short maturity.

Income taxes

Deferred income taxes are determined on the asset and liability method.
Under this method, temporary differences arise as a result of the difference
between the reported amounts of assets and liabilities and their tax basis.
Deferred tax assets are reduced by a valuation allowance when, in the
managements opinion, it is more likely than not that some or all of the
deferred tax asset will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax law and tax rates on the date of
the enactment of the change. The Company believes that its future taxable
income will be sufficient for the full realization of the deferred income tax
assets.

Research and development costs

Costs related to the research and development of new company programs are
expensed in the year incurred.

Stock-based compensation

At December 31, 2002, the Company had several stock-based employee
compensation plans, which are described more fully in Note 13. The Company
accounts for those plans using the intrinsic value method of expense
recognition and measurement prescribed by APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations (collectively, APB No.
25). In accordance with FASB Statement No. 123, Accounting for Stock-Based
Compensation(SFAS No. 123), as amended by FASB Statement No. 148, Accounting
for Stock-Based Compensation-Transition and Disclosure, see Note 13 for a
tabular presentation of the pro-forma stock-based employee compensation cost,
net income and basic and diluted earnings per share as if the fair value based
method of expense recognition and measurement prescribed by SFAS No. 123 had
been applied to all options.

Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and costs and
expenses during the reporting period. Actual results could differ from those
estimates.

11



---



##### 



4.      Marketable securities

The aggregate market value, amortized cost, gross unrealized gains and
gross unrealized losses on available-for-sale marketable securities are as
follows (in thousands):

|                                            |  |                         |        |           |  |            |        |            |  |       |       |       |  |   |    | 
|------------------------------------------- |  | ----------------------- | ------ | --------- |  | ---------- | ------ | ---------- |  | ----- | ----- | ----- |  | - | -- | 
|                                            |  | As of December 31, 2001
|                                            |  |                        
|                                            |  |                         |        |           |  |            |        |            |  | Gross |       | Gross
|                                            |  | Market                  |        | Amortized |  | Unrealized |        | Unrealized
|                                            |  | Value                   |        | Cost      |  | Gains      |        | Losses    
|                                            |  |                         |        |           |  |            |        |           
|U.S. Treasury notes and bonds               |  | $                       | 70,567 |           |  | $          | 69,067 |            |  | $     | 1,500 |       |  | $ |   | 
|Washington, D.C. tax exempt notes and bonds |  |                         | 13,631 |           |  |            | 13,243 |            |  |       | 398   |       |  |   | 10 | 
|                                            |  |                         |        |           |  |            |        |            |  |       |       |       |  |   |    | 
|                                            |  | $                       | 84,198 |           |  | $          | 82,310 |            |  | $     | 1,898 |       |  | $ | 10 | 
|                                            |  |                         |        |           |  |            |        |            |  |       |       |       |  |   |    | 

|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |   | 
|------------------------------------------- |  | ----------------------- | ------- | --------- |  | ---------- | ------- | ---------- |  | ----- | ----- | ----- |  | - | - | 
|                                            |  | As of December 31, 2002
|                                            |  |                        
|                                            |  |                         |         |           |  |            |         |            |  | Gross |       | Gross
|                                            |  | Market                  |         | Amortized |  | Unrealized |         | Unrealized
|                                            |  | Value                   |         | Cost      |  | Gains      |         | Losses    
|                                            |  |                         |         |           |  |            |         |           
|U.S. Treasury notes and bonds               |  | $                       | 75,307  |           |  | $          | 70,654  |            |  | $     | 4,653 |       |  | $ |  | 
|Washington, D.C. tax exempt
notes and bonds |  |                         | 79,288  |           |  |            | 75,324  |            |  |       | 3,964 |       |  |   |  | 
|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |   | 
|                                            |  | $                       | 154,595 |           |  | $          | 145,978 |            |  | $     | 8,617 |       |  | $ |  | 
|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |   | 

The following table summarizes marketable securities maturities (in
thousands):

|                         |  |                         |         |           |  |   |         | 
|------------------------ |  | ----------------------- | ------- | --------- |  | - | ------- | 
|                         |  | As of December 31, 2002
|                         |  |                        
|                         |  | Fair Market             |         | Amortized
|                         |  | Value                   |         | Cost     
|                         |  |                         |         |          
|Less than one year       |  | $                       | 17,030  |           |  | $ | 16,734  | 
|Matures in 1 to 5 years  |  |                         | 83,509  |           |  |   | 78,049  | 
|Matures in 6 to 10 years |  |                         | 44,022  |           |  |   | 41,683  | 
|Matures after 10 years   |  |                         | 10,034  |           |  |   | 9,512   | 
|                         |  |                         |         |           |  |   |         | 
|                         |  | $                       | 154,595 |           |  | $ | 145,978 | 
|                         |  |                         |         |           |  |   |         | 

The Company may elect not to hold these marketable securities to maturity
and may elect to sell these securities at any time.

5.      Membership fees receivable

Membership fees receivable consist of the following (in thousands):

|                                    |  |                    |        |      |  |   |        |  
|----------------------------------- |  | ------------------ | ------ | ---- |  | - | ------ | -
|                                    |  | As of December 31,
|                                    |  |                   
|                                    |  | 2001               |        | 2002
|                                    |  |                    |        |     
|Billed membership fees receivable   |  | $                  | 36,431 |      |  | $ | 41,900 |  
|Unbilled membership fees receivable |  |                    | 7,513  |      |  |   | 11,256 |  
|                                    |  |                    |        |      |  |   |        |  
|                                    |  |                    | 43,944 |      |  |   | 53,156 |  
|Reserve for uncollectible revenue   |  |                    | (1,933 | )    |  |   | (2,800 | )
|                                    |  |                    |        |      |  |   |        |  
|Membership fees receivable, net     |  | $                  | 42,011 |      |  | $ | 50,356 |  
|                                    |  |                    |        |      |  |   |        |  

12



---



##### 



6.      Property and equipment

Property and equipment consist of the following (in thousands):

|                                        |  |                    |        |      |  |   |         |  
|--------------------------------------- |  | ------------------ | ------ | ---- |  | - | ------- | -
|                                        |  | As of December 31,
|                                        |  |                   
|                                        |  | 2001               |        | 2002
|                                        |  |                    |        |     
|Furniture, fixtures, and equipment      |  | $                  | 10,399 |      |  | $ | 10,763  |  
|Software and Web site development costs |  |                    | 7,839  |      |  |   | 8,783   |  
|Leasehold improvements                  |  |                    | 7,554  |      |  |   | 8,189   |  
|                                        |  |                    |        |      |  |   |         |  
|                                        |  |                    | 25,792 |      |  |   | 27,735  |  
|Accumulated depreciation                |  |                    | (8,532 | )    |  |   | (12,819 | )
|                                        |  |                    |        |      |  |   |         |  
|Property and equipment, net             |  | $                  | 17,260 |      |  | $ | 14,916  |  
|                                        |  |                    |        |      |  |   |         |  

7.      Income taxes

The provision for income taxes consists of the following (in thousands):

|                           |  |                         |       |      |  |      |        |   |  |   |        | 
|-------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------ | - |  | - | ------ | 
|                           |  | Year Ended December 31,
|                           |  |                        
|                           |  | 2000                    |       | 2001 |  | 2002
|                           |  |                         |       |      |  |     
|Current                    |  | $                       | 8,582 |      |  | $    | 18,621 |   |  | $ | 18,418 | 
|Deferred                   |  |                         | 957   |      |  |      | (5,364 | ) |  |   | 152    | 
|                           |  |                         |       |      |  |      |        |   |  |   |        | 
|Provision for income taxes |  | $                       | 9,539 |      |  | $    | 13,257 |   |  | $ | 18,570 | 
|                           |  |                         |       |      |  |      |        |   |  |   |        | 

The provision for income taxes differs from the amount of income taxes
determined by applying the U.S. Federal income tax statutory rates to income
before provision for income taxes as follows:

|                                                         |                    |  |                         |      |      |  |      |      |   |  |      |      |  
|-------------------------------------------------------- | ------------------ |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  | ---- | ---- | -
|                                                         |                    |  | Year Ended December 31,
|                                                         |                    |  |                        
|                                                         |                    |  | 2000                    |      | 2001 |  | 2002
|                                                         |                    |  |                         |      |      |  |     
|Statutory U.S. Federal income tax rate                   |                    |  | 35.0                    | %    |      |  | 35.0 | %    |   |  | 35.0 | %   
|State income tax, net of U.S. Federal
income tax benefit |                    |  | 6.5                     |      |      |  | 6.5  |      |   |  | 6.5  |     
|Permanent differences, net                               |                    |  | (2.5                    | )    |      |  | (3.5 | )    |   |  | (2.9 | )   
|                                                         |                    |  |                         |      |      |  |      |      |   |  |      |     
|                                                         | Effective tax rate |  |                         | 39.0 | %    |  |      | 38.0 | % |  |      | 38.6 | %
|                                                         |                    |  |                         |      |      |  |      |      |   |  |      |     

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities consist of the
following (in thousands):

13



---



##### 



|                          |                                                   |                           |                                |        |                    |        |      |        |        |        | 
|------------------------- | ------------------------------------------------- | ------------------------- | ------------------------------ | ------ | ------------------ | ------ | ---- | ------ | ------ | ------ | 
|                          |                                                   |                           |                                |        | As of December 31,
|                          |                                                   |                           |                                |        |                   
|                          |                                                   |                           |                                |        | 2001               |        | 2002
|                          |                                                   |                           |                                |        |                    |        |     
|Deferred tax assets:      |                                                   |                           |                                |        |                    |        |      |       
|                          | Deferred compensation agreements                  |                           | $                              | 2,649  |                    |        | $    | 4,007  |       
|                          | Net operating loss carryforward                   |                           |                                | 52,431 |                    |        |      | 56,169 |       
|                          | Deferred revenue                                  |                           |                                | 4,445  |                    |        |      | 2,603  |       
|                          | Financial reporting reserves                      |                           |                                | 802    |                    |        |      | 1,161  |       
|                          | Employee benefits                                 |                           |                                |       |                    |        |      | 79     |       
|                          | Operating leases                                  |                           |                                | 737    |                    |        |      | 1,092  |       
|                          |                                                   |                           |                                |        |                    |        |      |       
|                          |                                                   | Total deferred tax assets |                                |        | 61,064             |        |      |        | 65,111 |       
|                          |                                                   |                           |                                |        |                    |        |      |       
|Deferred tax liabilities: |                                                   |                           |                                |        |                    |        |      |       
|                          | Unrealized gains on available-for-sale securities |                           |                                | 717    |                    |        |      | 3,322  |       
|                          | Employee benefits                                 |                           |                                | 78     |                    |        |      |       |       
|                          | Deferred incentive compensation                   |                           |                                | 1,749  |                    |        |      | 2,063  |       
|                          |                                                   |                           |                                |        |                    |        |      |       
|                          |                                                   |                           | Total deferred tax liabilities |        |                    | 2,544  |      |        |        | 5,385  | 
|                          |                                                   |                           |                                |        |                    |        |      |       
|                          |                                                   |                           | Deferred tax assets, net       |        | $                  | 58,520 |      |        | $      | 59,726 | 
|                          |                                                   |                           |                                |        |                    |        |      |       

The Company has deferred income tax assets, consisting primarily of net
operating loss (NOL) carry forwards for regular Federal and state income tax
purposes generated from the exercise of common stock options. In estimating
future tax consequences, Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes(SFAS 109) generally considers all expected
future events in the determination and evaluation of deferred tax assets and
liabilities. The Company believes that its future taxable income will be
sufficient for the full realization of the deferred income tax assets. However,
SFAS 109 does not consider the effect of future changes in existing tax laws or
rates in the determination and evaluation of deferred tax assets and
liabilities until the new tax laws or rates are enacted. We have established
our deferred income tax assets and liabilities using currently enacted tax law
and rates. We will recognize into income an adjustment for the impact of new
tax laws or rates on the existing deferred tax assets and liabilities when new
tax laws or rates are enacted.

The Company has net operating losses which resulted in a deferred tax
asset of $52.4 million and $56.2 million at December 31, 2001 and 2002,
respectively. The net operating losses expire in the years 2019 through 2022.
The Company has realized current tax benefits (reductions of taxes payable)
resulting from the exercise of common stock options of $8.1 million, $18.6
million and $18.4 million in the years ended December 31, 2000, 2001 and 2002,
respectively.

Washington, D.C. income tax incentives

The Office of Tax and Revenue of the Government of the District of
Columbia (the Office of Tax and Revenue) has adopted regulations in
accordance with the New E-Conomy Transformation Act of 2000 (the Act) that
modify the income and franchise tax, sales and use tax, and personal property
tax regulations, effective April 2001. Specifically, the regulations provide
certain credits, exemptions and other benefits to a Qualified High Technology
Company (QHTC). The Company has performed an analysis to support its position
that it meets the definition of a QHTC under the provisions of the Act. See
further discussion of the Washington, D.C. income tax incentives and the
possible impact on the Companys financial statements in Note 16, Commitments
and Contingencies.

14



---



##### 



8.      Comprehensive income (loss)

Comprehensive income (loss) is defined as net income (loss) plus the
net-of-tax impact of foreign currency items, minimum pension liability
adjustments, and unrealized gains and losses on certain investments in debt and
equity securities. Comprehensive income for the years ended December 31, 2000,
2001 and 2002, was $15.8 million, $22.6 million and $33.7 million,
respectively. The accumulated elements of comprehensive income, net of tax,
included within stockholders equity on the balance sheets are comprised solely
of the net change in unrealized gains on available-for-sale marketable
securities. Unrealized gains, net of tax, on available-for-sale marketable
securities amounted to $0.9 million, $0.9 million and $4.1 million during the
years ended December 31, 2000, 2001 and 2002, respectively.

9.      Transactions with affiliates

The Company has received services under certain vendor contracts entered
into by The Advisory Board Company for the provision of certain services, such
as telecommunications, travel, mailing and general office services. A Vendor
Contracts Agreement specified that we will pay the vendor directly if costs can
be segregated and billed separately, or we will reimburse The Advisory Board
Company for our reasonably allocated share of commonly billed costs. The Vendor
Contracts Agreement expired on December 31, 2000. However, we continue to
participate in limited vendor contracts entered into by the Advisory Board
Company for the provision of certain services and continue to pay for such
services on a basis consistent with that followed under the Vendor Contracts
Agreement. Payments, net, to (from) affiliates were approximately $(152,000),
$184,000 and $(32,000) for the years ending December 31, 2000, 2001 and 2002,
respectively.

10.      Employee benefit plans

Defined contribution 401(k) plan

The Company sponsors a defined contribution 401(k) Plan (the Plan) in
which the Companys employees participate. Pursuant to the Plan, all employees
who have reached the age of twenty-one are eligible to participate. The
employer provides contributions equal to 25% of an employees contribution up
to a maximum of 4% of base salary. Contributions to the Plan for the
participants were $0.2 million, $0.3 million and $0.4 million during the years
ended December 31, 2000, 2001 and 2002, respectively.

Employee stock purchase plan

In June 2000, the Company established an employee stock purchase plan (the
ESPP). Under the ESPP, employees authorize payroll deductions from 1% to 10%
of their eligible compensation to purchase shares of the Companys common
stock. The ESPP is authorized to issue up to 1,050,000 shares of the Companys
common stock. During the years ended December 31, 2000, 2001 and 2002, 5,679,
26,309 and 25,133 shares of common stock, respectively, were issued under the
ESPP.

11.      Public offerings of common stock

In February 2000, March and April 2001 and March 2002, 11,023,030 shares,
3,035,000 shares and 2,100,000 shares, respectively, of the Companys common
stock were sold in registered public offerings. The Company did not directly
receive any proceeds from the sale of its common stock. All of the shares sold
in the foregoing offerings were sold by stockholders and option holders.
However, the Company did receive cash from the exercise of common stock options
in conjunction with the sale of its common stock.

15



---



##### 



12.      Stock split

In August 2000, the Companys Board of Directors declared a two-for-one
stock split in the form of a common stock dividend on the Companys common
stock, payable September 15, 2000, to stockholders of record September 1, 2000.
The effect of the stock split is presented retroactively within the statements
of changes in stockholders equity at December 31, 1999 and for the period
ended December 31, 2000, by transferring the par value for the additional
common shares issued from the additional paid-in-capital account to the common
stock account. All references to share and per share amounts in the
accompanying financial statements included herein have been adjusted
retroactively to reflect the two-for-one stock split.

13.      Stock option plans

Liquid Markets Agreements

In January 2000 and 2001, the Company paid $1.6 million and $3.1 million,
respectively, in accordance with the Liquid Markets Agreements, which were
employee stock option agreements created prior to the Spin-off. The Liquid
Markets Agreements were amended by the Company in December 1998. The January
2001 payment represented the final cash commitment related to the amended
Liquid Markets Agreements. In addition, there are no stock options available to
issue or stock options outstanding under the Liquid Markets Agreements.

Stock-Based Incentive Compensation
Plan

In October 1997, the Company adopted the Stock-Based Incentive
Compensation Plan (the 1997 Plan). The 1997 Plan provides for the issuance of
options to purchase up to 11,008,000 shares of common stock. Any shares of
common stock which, for any reason, are not issued under the 1997 Plan are
reserved for issuance pursuant to the 1999 Stock Option Plan (the 1999 Plan).
As of December 31, 2002, 10,569,400 options, net of cancellations, to purchase
common stock had been granted under the 1997 Plan and 231,940 options, net of
cancellations, to purchase common stock had been granted under the 1999 Plan.
The Options granted under the 1997 Plan are currently exercisable and expire
April 2003.

In the years ending December 31, 2000 and 2001, the Company recognized
compensation expense of $0.4 million and $0.2 million, respectively, in
accordance with the Substitution Agreements, which were employee stock option
agreements created in conjunction with the Spin-off. The Substitution
Agreements provided for the exchange of The Advisory Board Company stock
options for Company stock options issued under the 1997 Plan. The Substitution
Agreements resulted in compensation expense being recognized by the Company
over the vesting period. There are no earnings charges subsequent to December
31, 2001, related to the Substitution Agreements. In addition, there are no
stock options available to issue or stock options outstanding under the
Substitution Agreements.

1999 Stock Option Plan

In February 1999, the Company adopted the 1999 Plan, which provides for
the issuance of options to purchase up to 3,784,000 shares of common stock plus
any options to purchase shares of common stock which, for any reason, are not
issued under the 1997 Plan. During 2000, the Company granted 1,613,000 options
to purchase common stock under the 1999 Plan at a weighted average exercise
price of $21.78 per share. During 2001, the Company granted 1,358,000 options
to purchase common stock under the 1999 Plan at a weighted average exercise
price of $31.05 per share. During 2002, the Company granted 16,000 options to
purchase common stock under the 1999 Plan at a weighted average exercise price
of $32.86 per share. As of December 31, 2002, 4,015,940 options, net of
cancellations and including 231,940 shares of common stock carried over from
the 1997 Plan, had been granted under the 1999 Plan. The common stock options
granted under the 1999 Plan generally become exercisable 25% per year beginning
one year from the date of grant and expire between February 2009 and March
2012.

16



---



##### 



2001 Stock Option Plan

In June 2001, the Company adopted the 2001 Stock Option Plan (the 2001
Plan), which provides for the issuance of options to purchase up to 2,700,000
shares of common stock. During 2001, the Company granted no options to purchase
common stock under the 2001 Plan. During 2002, the Company granted 940,000
options to purchase common stock under the 2001 Plan at a weighted average
exercise price of $32.37 per share. As of December 31, 2002, 890,000 options,
net of cancellations, had been granted under the 2001 Plan. The common stock
options granted under the 2001 Plan generally become exercisable 25% per year
beginning one year from the date of grant and expire between August 2011 and
July 2012.

2002 Non-Executive Stock Incentive Plan

In March 2002, the Company adopted the 2002 Non-Executive Stock Incentive
Plan, as amended (the 2002 Plan), which provides for the issuance up to
7,300,000 shares of common stock under stock options or restricted stock
grants. The 2002 Plan is administered by the Compensation Committee of the
Companys Board of Directors. Any person who is an employee or prospective
employee of the Company is eligible for the grant of awards under the 2002
Plan, unless such person is an officer or director of the Company. The terms of
awards granted under the 2002 Plan, including vesting, forfeiture and
post-termination exerciseability are set by the plan administrator, subject to
certain restrictions set forth in the 2002 Plan. During 2002, the Company
granted 1,115,000 options to purchase common stock under the 2002 Plan at a
weighted average exercise price of $32.31 per share. As of December 31, 2002,
1,080,000 options, net of cancellations, had been granted under the 2002 Plan.
The common stock options granted under the 2002 Plan generally become
exercisable 25% per year beginning one year from the date of grant and expire
between March 2012 and November 2012.

Directors Stock Option Plan

In December 1998, the Company adopted the Directors Stock Plan (the
Directors Plan), which provides for the issuance of options to purchase up
to 860,000 shares of common stock. During 2000, the Company granted 70,000
options to purchase common stock under the Directors Plan at a weighted
average exercise price of $21.19 per share. During 2001, the Company granted
142,240 options to purchase common stock under the Directors Plan at a
weighted average exercise price of $31.46 per share. During 2002, the Company
granted 40,000 options to purchase common stock under the Directors Plan at a
weighted average exercise price of $32.41 per share. As of December 31, 2002,
573,440 options, net of cancellations, to purchase common stock had been
granted under the Directors Plan. The common stock options granted under the
Directors Plan generally become 100% exercisable one year from the date of
grant and expire between December 2008 and March 2012.

Transactions

The following table summarizes the changes in common stock options for the
common stock option plans described above:

|                                 |                   |  |            |            |                |   |                |             |  |   |          |       | 
|-------------------------------- | ----------------- |  | ---------- | ---------- | -------------- | - | -------------- | ----------- |  | - | -------- | ----- | 
|                                 |                   |  |            |            |                |   |                |             |  |   | Weighted
|                                 |                   |  | Number     |            | Exercise
Price |   | Average       
|                                 |                   |  | of
Options |            | per
Share      |   | Exercise
Price
|                                 |                   |  |            |            |                |   |               
|Outstanding at December 31, 1999 |                   |  | 10,384,840 |            |                | $ | 0.03-19.07     |             |  | $ | 2.64     |      
|                                 | Options granted   |  |            | 1,683,000  |                |   |                | 21.19-33.11 |  |   |          | 21.75 | 
|                                 | Options cancelled |  |            | (228,234   | )              |   |                | 0.29-21.19  |  |   |          | 8.05  | 
|                                 | Options exercised |  |            | (3,998,470 | )              |   |                | 0.03-13.52  |  |   |          | 1.34  | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2000 |                   |  | 7,841,136  |            |                |   | 0.03-33.11     |             |  |   | 7.25     |      
|                                 | Options granted   |  |            | 1,514,214  |                |   |                | 26.01-43.10 |  |   |          | 31.09 | 
|                                 | Options cancelled |  |            | (159,500   | )              |   |                | 9.50-41.38  |  |   |          | 22.16 | 
|                                 | Options exercised |  |            | (3,727,882 | )              |   |                | 0.03-30.19  |  |   |          | 3.71  | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2001 |                   |  | 5,467,968  |            |                |   | 0.03-43.10     |             |  |   | 15.78    |      
|                                 | Options granted   |  |            | 2,111,000  |                |   |                | 27.62-36.81 |  |   |          | 32.34 | 
|                                 | Options cancelled |  |            | (293,474   | )              |   |                | 9.50-33.63  |  |   |          | 27.31 | 
|                                 | Options exercised |  |            | (2,266,091 | )              |   |                | 0.03-31.00  |  |   |          | 5.76  | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2002 |                   |  | 5,019,403  |            |                | $ | 0.21-43.10     |             |  | $ | 26.61    |      
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      

17



---



##### 



Information with respect to the common stock option plans outstanding at
December 31, 2002, is as follows:

|                         |  |                   |             |       |                    |            |          |   |             |      |         |  |      |      | 
|------------------------ |  | ----------------- | ----------- | ----- | ------------------ | ---------- | -------- | - | ----------- | ---- | ------- |  | ---- | ---- | 
|                         |  |                   |             |       |                    |            |          |   | Weighted    |      | Average
|                         |  |                   |             |       | Number Outstanding |            | Average  |   | Remaining  
|                         |  |                   |             |       | as of              |            | Exercise |   | Contractual
|Range of Exercise Prices |  | December 31, 2002 |             | Price |                    | Life-Years
|                         |  |                   |             |       |                    |           
|                         |  |                   | $0.21-$7.12 |       |                    | 141,320    |          |   | $           | 2.94 |         |  |      | 2.22 | 
|                         |  | 9.50 - 13.52      |             |       | 579,586            |            |          |   | 9.56        |      |         |  | 6.15 |     
|                         |  | 19.07 - 21.19     |             |       | 856,508            |            |          |   | 21.18       |      |         |  | 7.15 |     
|                         |  | 26.01 - 32.23     |             |       | 1,465,989          |            |          |   | 30.71       |      |         |  | 8.31 |     
|                         |  | 32.41 - 43.10     |             |       | 1,976,000          |            |          |   | 32.61       |      |         |  | 9.16 |     
|                         |  |                   |             |       |                    |            |          |   |             |      |         |  |      |     
|                         |  | $0.21-$43.10      |             |       | 5,019,403          |            |          | $ | 26.61       |      |         |  | 8.02 |     
|                         |  |                   |             |       |                    |            |          |   |             |      |         |  |      |     

As of December 31, 2002, 1,084,903 common stock options with a weighted
average exercise price of $20.15 are exercisable.

Accounting for stock-based compensation

The Company has elected to account for the plans described above under the
recognition and measurement principles of APB No. 25. No stock-based employee
compensation cost is reflected in net income, as all options granted under
those plans had an exercise price equal to the market value of the underlying
common stock on the date of grant. The following table illustrates the effect
on net income and earnings per share if the Company had applied the fair value
recognition provisions of SFAS No. 123 to stock-based employee compensation.

|                                                                                                                                            |                       |   |                         |      |      |   |        |      |  |   |        |      | 
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ----------------------- | ---- | ---- | - | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                            |                       |   | Year Ended December 31,
|                                                                                                                                            |                       |   |                        
|                                                                                                                                            |                       |   | 2000                    |      | 2001 |   | 2002  
|                                                                                                                                            |                       |   |                         |      |      |   |       
|Net income, as reported                                                                                                                     |                       | $ | 14,920                  |      |      | $ | 21,632 |      |  | $ | 29,601 |     
|Deduct: Total stock-based employee
compensation expense
determined
under fair value based methods for
all awards,net of related tax
effects |                       |   | 6,586                   |      |      |   | 8,842  |      |  |   | 16,538 |     
|                                                                                                                                            |                       |   |                         |      |      |   |        |      |  |   |        |     
|Pro forma net income                                                                                                                        |                       | $ | 8,334                   |      |      | $ | 12,790 |      |  | $ | 13,063 |     
|                                                                                                                                            |                       |   |                         |      |      |   |        |      |  |   |        |     
|Earnings per share:                                                                                                                         |                       |   |                         |      |      |   |        |      |  |   |        |     
|                                                                                                                                            | Basic  as reported   |   | $                       | 0.49 |      |   | $      | 0.64 |  |   | $      | 0.81 | 
|                                                                                                                                            | Basic  pro forma     |   | $                       | 0.27 |      |   | $      | 0.38 |  |   | $      | 0.36 | 
|                                                                                                                                            | Diluted  as reported |   | $                       | 0.43 |      |   | $      | 0.59 |  |   | $      | 0.79 | 
|                                                                                                                                            | Diluted  pro forma   |   | $                       | 0.24 |      |   | $      | 0.35 |  |   | $      | 0.35 | 

18



---



##### 



Under the SFAS No. 123 pro forma disclosure provisions, the fair value of
options granted subsequent to December 15, 1995, has been estimated using the
Black-Scholes option valuation model. The Black-Scholes option valuation model
was developed for use in estimating the fair value of traded options that have
no vesting restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective assumptions, including
the expected stock price characteristics that are significantly different from
those of traded options. Because changes in the subjective input assumptions
can materially affect the fair value estimate, in managements opinion, the
existing models do not necessarily provide a reliable single measure of the
fair value of the Companys stock rights.

The fair value of options granted during the years ended December 31,
2000, 2001 and 2002 was estimated using the Black-Scholes option valuation
model with the following weighted-average assumptions: risk-free interest rate
of 5.0%, 4.4% and 3.1%, respectively; no dividend yield for any year; expected
lives of the option of four years, five years and five years, respectively; and
expected volatility of 92%, 69% and 63%, respectively.

The weighted-average fair value of Company options granted during the
years ended December 31, 2000, 2001 and 2002 was $14.73 per share, $18.85 per
share and $17.88 per share, respectively. For purposes of pro forma
disclosures, the estimated fair value of options is amortized to expense over
the estimated service period. The provisions of SFAS No. 123 may not
necessarily be indicative of future results.

14.      Supplemental cash flows disclosures

The Company paid no income taxes during the years ended December 31, 2000,
2001 and 2002. For the years ended December 31, 2000, 2001 and 2002, the
Company recognized $33.0 million, $41.2 million and $22.2 million,
respectively, in stockholders equity for tax deductions associated with the
exercise of non-qualified stock options.

15.      Loan agreement

In May 2000, the Company entered into a $10.0 million unsecured loan
agreement with a commercial bank that provides for a revolving line of credit
facility under which the Company could have from time to time borrowed, repaid
and reborrowed funds. The interest rate on any outstanding borrowings under the
loan agreement was the Eurodollar Daily Floating Rate plus 0.75% per annum.
There were no borrowings under the revolving line of credit facility while it
was in effect. The revolving line of credit facility expired May 25, 2002, and
we elected not to renew the revolving line of credit facility.

16.      Commitments and contingencies

Operating Leases

The Company leases office facilities in the United States and the United
Kingdom expiring on various dates over the next 17 years. Certain lease
agreements include provisions for rental escalations and require the Company to
pay for executory costs such as taxes and insurance. Future minimum rental
payments under noncancellable operating leases, excluding executory costs, are
as follows (in thousands):

|                         |       |   |        |        | 
|------------------------ | ----- | - | ------ | ------ | 
|Year Ending December 31, |       |   |        |       
|2003                     |       | $ | 6,908  |       
|2004                     |       |   | 7,900  |       
|2005                     |       |   | 9,381  |       
|2006                     |       |   | 9,503  |       
|2007                     |       |   | 9,773  |       
|Thereafter               |       |   | 50,342 |       
|                         |       |   |        |       
|                         | Total |   | $      | 93,807 | 
|                         |       |   |        |       

Rent expense charged to operations during the fiscal years ended December
31, 2000, 2001 and 2002, was $3.8 million, $5.7 million and $7.9 million,
respectively. The Company obtained a $1.3 million letter of credit with a
commercial bank, expiring June 2003, to provide a security deposit for its
headquarters office lease. The Companys cash, accounts receivable and property
and equipment collateralize the letter of credit agreement.

19



---



##### 



Washington, D.C. income tax incentives

The Office of Tax and Revenue of the Government of the District of
Columbia (the Office of Tax and Revenue) has adopted regulations in
accordance with the New E-Conomy Transformation Act of 2000 (the Act) that
modify the income and franchise tax, sales and use tax, and personal property
tax regulations, effective April 2001. Specifically, the regulations provide
certain credits, exemptions and other benefits to a Qualified High Technology
Company (QHTC).

The Company has performed an analysis to support its position that it
meets the definition of a QHTC under the provisions of the Act. Accordingly,
the Company will amend its 2001 Washington, D.C. income tax return and certain
sales and use tax returns, to file as a QHTC. As a QHTC, the Companys
Washington, D.C. income tax rate will be 0.0% and the Company will be eligible
for certain Washington, D.C. income tax credits. In addition the Company will
be entitled to relief from certain sales and use taxes. While the Company
believes it qualifies as a QHTC, the Company has elected not to recognize the
impact of this election within the financial statements for the year ended
December 31, 2002, because of uncertainties inherent in the regulations, as
adopted.

For financial reporting purposes, the Company has valued its deferred
income tax assets and liabilities using Washington, D.C.s currently enacted
income tax rate of 9.975%. Additionally, the Company has continued to provide
for income, sales and use taxes as if the Company were not a QHTC. However, if
the Company had received a determination that it qualified for QHTC status, it
would have recorded a charge to earnings of approximately $9.5 million,
representing the impact on its existing deferred tax asset of lowering the
Washington, D.C. income tax rate to 0.0%, net of any income tax credits
discussed above. When the Company believes it is more likely than not that the
Office of Tax and Revenue will accept the Companys election as a QHTC, the
Company will record the applicable charge. Additionally, the Company would
recognize the refund of any previously paid or provided sales and use taxes at
that time. See further discussion of income taxes in Note 7.

17.      Quarterly financial data (unaudited)

Unaudited summarized financial data by quarter for the years ended
December 31, 2001 and 2002 is as follows (in thousands, except per share
amounts):

|                                         |         |   |          |      |         |              |                    |      |  |   |        |      |  |   |        |      | 
|---------------------------------------- | ------- | - | -------- | ---- | ------- | ------------ | ------------------ | ---- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                                         |         |   |          |      |         |              | 2001 Quarter Ended |      |  |   |       
|                                         |         |   |         
|                                         |         |   | March 31 |      | June 30 | September 30 | December 31       
|                                         |         |   |          |      |         |              |                    |      | 
|Revenues                                 |         | $ | 29,215   |      |         | $            | 31,124             |      |  | $ | 32,625 |      |  | $ | 35,148 |     
|Gross profit                             |         |   | 17,972   |      |         |              | 20,215             |      |  |   | 21,613 |      |  |   | 22,574 |     
|Income before provision for income taxes |         |   | 6,560    |      |         |              | 8,730              |      |  |   | 9,395  |      |  |   | 10,204 |     
|Net income                               |         | $ | 4,067    |      |         | $            | 5,413              |      |  | $ | 5,825  |      |  | $ | 6,327  |     
|Earnings per share:                      |         |   |          |      |         |              |                    |      |  |   |        |      |  |   |        |     
|                                         | Basic   |   | $        | 0.13 |         |              | $                  | 0.16 |  |   | $      | 0.17 |  |   | $      | 0.18 | 
|                                         | Diluted |   | $        | 0.11 |         |              | $                  | 0.15 |  |   | $      | 0.16 |  |   | $      | 0.17 | 

|                                         |         |   |          |      |         |   |                    |      |             |   |        |      |  |   |        |      | 
|---------------------------------------- | ------- | - | -------- | ---- | ------- | - | ------------------ | ---- | ----------- | - | ------ | ---- |  | - | ------ | ---- | 
|                                         |         |   |          |      |         |   | 2002 Quarter Ended |      |             |   |       
|                                         |         |   |         
|                                         |         |   | March 31 |      | June 30 |   | September 30       |      | December 31
|                                         |         |   |          |      |         |   |                    |      |            
|Revenues                                 |         | $ | 37,023   |      |         | $ | 39,547             |      |             | $ | 41,275 |      |  | $ | 44,512 |     
|Gross profit                             |         |   | 23,506   |      |         |   | 26,531             |      |             |   | 27,149 |      |  |   | 29,024 |     
|Income before provision for income taxes |         |   | 9,567    |      |         |   | 12,241             |      |             |   | 12,848 |      |  |   | 13,515 |     
|Net income                               |         | $ | 5,931    |      |         | $ | 7,589              |      |             | $ | 7,837  |      |  | $ | 8,244  |     
|Earnings per share:                      |         |   |          |      |         |   |                    |      |             |   |        |      |  |   |        |     
|                                         | Basic   |   | $        | 0.17 |         |   | $                  | 0.20 |             |   | $      | 0.21 |  |   | $      | 0.22 | 
|                                         | Diluted |   | $        | 0.16 |         |   | $                  | 0.20 |             |   | $      | 0.21 |  |   | $      | 0.22 | 

18.      Subsequent event

In February 2003, the Company announced that its Board of Directors
authorized a share repurchase of up to $75 million of the Companys common
stock. Repurchases will be made from time to time in open market and privately
negotiated transactions subject to market conditions. No minimum number of
shares has been fixed. The Company will fund its share repurchases with cash on
hand and cash generated from operations.

20



---



##### 



PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | The following financial statements of the registrant and report of
Independent Auditors are included in Item 8 hereof: Report of
Independent Auditors Balance Sheets as of December 31, 2001 and 2002,
Statements of Income for the years ended December 31, 2000, 2001 and
2002, Statements of Cash Flows for the years ended December 31, 2000,
2001 and 2002, Statements of Changes in Stockholders Equity for the
years ended December 31, 2000, 2001 and 2002, and Notes to Financial
Statements.
|(a)(2) |  | Except as provided below, all schedules for which provision is made in
the applicable accounting regulations of the Securities and Exchange
Commission either have been included in the Financial Statements or
are not required under the related instructions, or are not applicable
and therefore have been omitted.                                                                                                                                                                                
|(a)(3) |  | The following exhibits are either provided with this Form 10-K/A or
are incorporated herein by reference:                                                                                                                                                                                                                                                                                                                                                                                              

|        |  |                                                                                                                                                                                                                                 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                 
|No.     |  | Description of Exhibit                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                 
|1.1     |  | [Omitted]                                                                                                                                                                                                                       
|3.1     |  | Second Amended and Restated Certificate of Incorporation.*                                                                                                                                                                      
|3.2     |  | Amended and Restated Bylaws.*                                                                                                                                                                                                   
|4.1     |  | Specimen Common Stock Certificate.*                                                                                                                                                                                             
|5.1     |  | [Omitted]                                                                                                                                                                                                                       
|10.1    |  | Employment Agreement, dated January 21, 1999, between the Company and
James J. McGonigle.*                                                                                                                                     
|10.2    |  | Employment Agreement, dated November 1, 1998, between the Company and
Clay M. Whitson.*                                                                                                                                        
|10.3    |  | Stock Option Agreement Pursuant to The Corporate Advisory Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and James J. McGonigle, as
amended on January 21, 1999.*
|10.4    |  | Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of April
15, 1998, between the Company and Harold L. Siebert.*                                  
|10.5    |  | Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, dated as of November
1, 1998, between the Company and Clay M. Whitson.*                                      
|10.11   |  | Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Derek C. van Bever, as
amended on July 21, 1998.*  
|10.12   |  | Form of Stock Option Agreement Pursuant to The Corporate Advisory
Board Company Stock-Based Incentive Compensation Plan, including form
of amendment.*                                                                          
|10.13   |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated January 21, 1999, between the Company and James J.
McGonigle.*             
|10.14   |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, effective as of April 15, 1998, between the Company and
Harold L. Siebert.*      
|10.15   |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated November 1, 1998, between the Company and Clay M.
Whitson.*                
|10.16   |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated October 30, 1997, between the Company and Michael A.
DAmato.*             
|10.17   |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated October 30, 1997, between the Company and Jeffrey D.
Zients.*              
|10.18   |  | Form of Agreement Concerning Exclusive Services, Confidential
Information, Business Opportunities, Non-Competition, Non-Solicitation
and Work Product.*                                                                         
|10.19   |  | The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan, adopted on October 31, 1997, as amended and
restated in February 1999.*                                                                          
|10.20   |  | Amended Directors Stock Plan and Standard Terms and Conditions for
Director Non-Qualified Stock Options.*                                                                                                                      
|10.21   |  | [omitted]                                                                                                                                                                                                                       
|10.22   |  | 1999 Stock Option Plan and Standard Terms and Conditions for 1999
Stock Option Plan Incentive Stock Options.*                                                                                                                   
|10.23   |  | 2001 Stock Option Plan. ##                                                                                                                                                                                                      
|10.24   |  | 2002 Non-Executive Stock Incentive Plan.                                                                                                                                                                                      
|10.25   |  | [omitted]                                                                                                                                                                                                                       

21



---



##### 



|      |  |                                                                                                                                                                                                                                                                                              
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.   |  | Description of Exhibit                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                              
|10.26 |  | Cross-Indemnification Agreement, dated as of January 21, 1999, between
David G. Bradley and The Corporate Executive Board Company.*                                                                                                                                                          
|10.27 |  | Administrative Services Agreement, dated as of October 31, 1997, as
amended and restated on July 21, 1998, between The Advisory Board
Company and The Corporate Executive Board Company.*                                                                                                    
|10.28 |  | Member Contracts Agreement, dated as of October 31, 1997, between The
Advisory Board Company and The Corporate Executive Board Company.*                                                                                                                                                     
|10.29 |  | Vendor Contracts Agreement, dated as of October 31, 1997, as amended
and restated on July 21, 1998, between The Advisory Board Company and
The Corporate Executive Board Company.*                                                                                                           
|10.30 |  | Non-Competition Agreement, effective as of January 1, 1999, as amended
effective October 25, 2001, among The Advisory Board Company, The
Corporate Executive Board Company and David G. Bradley. * #                                                                                         
|10.31 |  | Distribution Agreement, dated as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*                                                                                                                                                         
|10.32 |  | Agreement of Lease, dated June 25, 1998, between The Corporate
Executive Board Company and The George Washington University.*                                                                                                                                                                
|10.33 |  | License Agreement, effective as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*                                                                                                                                                          
|10.34 |  | Letter agreement regarding the special bonus plan.*                                                                                                                                                                                                                                         
|10.35 |  | Amended and Restated Liquid Markets Agreement, dated August 20,
1997, between The Corporate Executive Board Company and Derek C. van
Bever, as amended on December 28, 1998.*                                                                                                             
|10.36 |  | Form of term sheet for director non-qualified stock options.                                                                                                                                                                                                                               
|10.37 |  | Employee Stock Purchase Plan dated June 23, 2000.**                                                                                                                                                                                                                                         
|10.38 |  | Loan Agreement by and between Bank of America, N.A. and the Corporate
Executive Board dated May 25, 2000.***                                                                                                                                                                                 
|10.39 |  | Employment Agreement, dated March 20, 2002, between the Company and
Michael A. Archer.ä                                                                                                                                                                                                     
|21.1  |  | List of the Subsidiaries of The Corporate Executive Board Company: None.                                                                                                                                                                                                                     
|23.1  |  | Consent of Ernst and Young LLP.                                                                                                                                                                                                                                                              
|99.1  |  | Chief Executive Officer and Chief Financial Officer certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.                                                                                                                  
|     
|*     |  | Incorporated by reference to the registrants registration statement on
Form S-1, declared effective by the Securities and Exchange Commission on
February 22, 1999 (Registration No. 333-5983).                                                                                             
|**    |  | Incorporated by reference to exhibit 10.1 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended June 30, 2000.                                                                                                     
|***   |  | Incorporated by reference to exhibit 10.2 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended June 30, 2000.                                                                                                     
|#     |  | Amendments incorporated by reference to exhibit 10.1 and 10.2 from the
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2001.                                                                            
|##    |  | Incorporated by reference to Exhibit 10.1 to the registrants registration
statement on Form S-8 filed with the Securities and Exchange Commission on
August 10, 2001 (Registration No. 333-67238).                                                                                          
|     |  | Compensation arrangement.                                                                                                                                                                                                                                                                    
|ä     |  | Incorporated by reference to exhibit 10.1 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended September 30, 2002.                                                                                                
|    |  | Incorporated by reference to exhibit of the same number from the
registrants Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the annual period ended December 31,
2002.                                                                            
|     
|(b)   |  | Reports on Form 8-K.                                                                                                                                                                                                                                                                         
|     
|      |  | None.                                                                                                                                                                                                                                                                                        
|     
|(c)   |  | Exhibits: The exhibits listed in the accompanying index to exhibits are
filed or incorporated by reference as part of this annual report.                                                                                                                                                    
|     
|(d)   |  | Financial statements schedules: The financial statement schedules for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission are either not required under the
related instructions or are inapplicable, and therefore have been omitted.

22



---



##### 



Signatures

Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized dated as of July
3, 2003.

| |  |                                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------
| |  | The Corporate Executive Board Company
By: /s/ James J. McGonigleJames J. McGonigle
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacity and on the dates indicated.

|                                               |  |                                                                                          |  |             
|---------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------
|Signature                                      |  | Title                                                                                    |  | Date        
|                                               |  |                                                                                          |  |             
|                                              
|/s/ James J. McGonigleJames J. McGonigle       |  | Chief Executive Officer and Director, Chairmanof the Board
(Principal Executive Officer) |  | July 3,
2003
|                                              
|/s/ Timothy R. YostTimothy R. Yost             |  | Chief Financial Officer (Principal Financial
Officer and Principal Accounting Officer)   |  | July 3, 2003
|                                              
|/s/ Robert C. HallRobert C. Hall               |  | Director                                                                                 |  | July 3, 2003
|                                              
|/s/ Nancy J. KarchNancy J. Karch               |  | Director                                                                                 |  | July 3, 2003
|                                              
|/s/ David W. KennyDavid W. Kenny               |  | Director                                                                                 |  | July 3, 2003
|                                              
|/s/ Thomas L. Monahan IIIThomas L. Monahan III |  | Director                                                                                 |  | July 3, 2003
|                                              
|/s/ Harold L. SiebertHarold L. Siebert         |  | Director                                                                                 |  | July 3, 2003

23



---



##### 



CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James J. McGonigle, certify that:



|1. |  | I have reviewed this annual report on Form 10-K/A of The Corporate
Executive Board Company;                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                   



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: July 3, 2003

|                                                                                                       
|-------------------------------------------------------------------------------------------------------
|/s/ James J. McGonigleJames J. McGonigle
Chairman of the Board of Directors and Chief
Executive Officer

24



---



##### 



CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy R. Yost, certify that:



|1. |  | I have reviewed this annual report on Form 10-K/A of The Corporate
Executive Board Company;                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                   



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: July 3, 2003

|                                                          
|----------------------------------------------------------
|/s/ Timothy R. YostTimothy R. Yost
Chief Financial Officer

25



---



##### 



Exhibit Index

|               |  |                                                                                                                                                                         
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
Number |  | Description                                                                                                                                                             
|               |  |                                                                                                                                                                         
|23.1           |  | Consent of Ernst & Young LLP.                                                                                                                                           
|              
|99.1           |  | Chief Executive Officer and Chief Financial
Officer certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act 2002.

26