##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended December 31, 2005.
 or
 o
    
    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.
Suite 6000
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)
  Yes þ No o
  Yes o No þ
 þ o
 þ
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
 o þ




---



##### 



DOCUMENTS INCORPORATED BY REFERENCE
   
 *
    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. A NOTE ABOUT FORWARD-LOOKING STATEMENTS
  
 2




---



##### 



PART I
 Item 1. Business.
     
    
    best practices research studies,
    
    executive education seminars,
    
    customized research briefs,
    
    Web-based access to the programs digital content database, and
    
    decision support tools.
   
    
    human resources,
    
    strategy and research and development,
    
    information technology,
    
    sales and marketing,
    
    corporate finance,
    
    legal and compliance,
    
    operations and procurement,
    
    financial services,
    
    communications, and
    
    general management.
 3




---



##### 



Available Information
 http://www.executiveboard.com
 Industry Background
    Business Strategy
  
    
    Maintain Membership-Based Model.We believe that our
membership-based model is key to our success. We
continually strive to increase our ties to our members. We
encourage members to view us as their proprietary off-site
research facility. Our fixed-fee economic model promotes
frequent use of our products and services. We believe that
member satisfaction grows as members access more of our
services, and that the growing roster of satisfied members
validates our business model and induces new members to
join The Corporate Executive Board research programs.
 4




---



##### 




    
    Focus on Best Practices Research.The focus of our work is
on researching best demonstrated business and management
practices. Many large corporations believe that there are
research economies and other benefits that can be realized
by learning from the experiences of similar entities facing
shared business challenges. We believe that there will be a
continuing desire on the part of large corporations to
access ever-evolving solutions to these common business
problems. We believe that our success to date has uniquely
positioned us as a leading source for identifying,
studying, evaluating and communicating these evolving
solutions and that our library of best practices and
network of member companies serve as a formidable barrier
to entry for potential competitors.
    
    Continue Research and Analysis Excellence.We believe that
the quality of our research and analysis has driven our
success. We regularly interact with senior executives at
member institutions to identify the most important
strategic and operational issues for research and analysis.
Program directors are responsible for assuring that our
research methodology is applied to all studies and that
research quality is maintained across all research
programs. We are highly selective in our hiring, recruiting
only the top graduates of the leading universities and
graduate schools. We emphasize continual training of all
employees in key areas, including industry analysis,
economics, quantitative modeling, root-cause analysis and
presentation skills.
    
    Build Membership Network.As our research programs grow in
size and influence, we are constantly expanding our network
of executive contacts at member companies. We believe that
the growth of this network benefits members by increasing
the number of executives they can contact for information
and by providing them with access to a broader range of
companies. We believe that these positive network effects
further strengthen our membership-based business model.
    
    Leverage Economic Model.We derive most of our revenues
from fixed annual fees for our research programs. A
substantial portion of our costs of delivering our products
and services in each research program are fixed and do not
vary directly with the number of members. The leverage in
our economic model is further evidenced by the increasing
utilization via the Internet of each research programs
digital research library and decision support tools. Each
research programs proprietary database, including digital
content and on-line tools, assists our member executives in
solving their own challenges on a real-time basis. We
expect to increase revenues and improve program operating
margins as we add new members to our research programs.
 Growth Strategy
  
    
    Cross-Sell Additional Subscriptions to Existing Members.On
average, individual members currently participate in 3.82
research programs. We actively cross-sell additional
membership subscriptions and believe that most members are
potential participants in up to 18 of the research programs
we currently offer, which are directed at corporate staff
positions maintained by most major companies. We believe that
membership subscription cross-selling opportunities will
continue to increase as we develop new research programs.
    
    Add New Members.We have targeted approximately 11,400
additional institutions globally, excluding Asia, as
potential new members, including companies with revenues
greater than $100 million and financial institutions with
assets in excess of $1 billion. Our Middle Market program
initiatives will be focused on companies with annual revenue
between $100 million and $750 million.
    
    Develop New Research Programs.We currently offer research
programs covering 38 executive constituencies. We have added
eleven new research programs during the past two years. We
also have identified more than 50 additional program
offerings. This list includes opportunities to serve
executive functions beyond the 38 we serve today. We believe
that each of these opportunities has the potential to support
a tailored research agenda and a suite of educational and
other services.
 The Membership Network
  5




---



##### 



December 31,2001
    
    2002
    
    2003
    
    2004
    
    2005Membership programs(1)
    
    
    18
    
    
    
    22
    
    
    
    26
    
    
    
    31
    
    
    
    37Member institutions
    
    
    1,802
    
    
    
    1,930
    
    
    
    2,143
    
    
    
    2,368
    
    
    
    2,831Total membership subscriptions
    
    
    4,364
    
    
    
    5,257
    
    
    
    6,414
    
    
    
    8,202
    
    
    
    10,825Average subscriptions per member institution
    
    
    2.42
    
    
    
    2.72
    
    
    
    2.99
    
    
    
    3.46
    
    
    
    3.82Client renewal rate(2)
    
    
    90
    %
    
    
    90
    %
    
    
    90
    %
    
    
    91
    %
    
    
    92
    %Contract value (in thousands)(3)
    
    $
    138,474
    
    
    $
    176,533
    
    
    $
    227,913
    
    
    $
    294,949
    
    
    $
    381,366
 
 (1)
    
    In February 2006, we launched the Project Management
Office Executive Council, bringing the current number
of membership programs to 38.(2)
    
    For the year then ended. Client renewal rate is defined
as the percentage of member institutions renewed,
adjusted to reflect reductions in member institutions
resulting from mergers and acquisitions of members.(3)
    
    For the year then ended. Contract value is defined as
the aggregate annualized revenue attributed to all
agreements in effect at a given date without regard to
the remaining duration of any such agreement. Products and Services
 General
     Best Practices Research Studies
  6




---



##### 



Executive Education
  Research Briefs
    Web-Based Proprietary Databases
   Pricing
  7




---



##### 



Sales and Marketing
   Competition
    Employees
   Item 1A. Risk Factors.
  We depend on renewals of our membership-based services.
  8




---



##### 



We cannot know in advance whether new products will be successful.
  We may experience difficulties in anticipating market trends.
  We must attract and retain a significant number of highly skilled employees.
  We are
restricted from selling our products and services to health-care
provider companies.
  Continued consolidation in the financial institution industry may adversely impact our business.
  We may experience fluctuations in operating results.
  9




---



##### 



We may be unable to protect our intellectual property rights.
  We may be exposed to litigation related to content.
  We may be exposed to loss of revenue resulting from our unconditional service guarantee.
  Item 1B. Unresolved Staff Comments.
  Item 2. Properties.
   Item 3. Legal Proceedings.
  Item 4. Submission of Matters to a Vote of Security Holders.
  10




---



##### 



PART II
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
  High
    
    Low
    
Dividends2004:First quarter
    
    $
    53.23
    
    
    $
    44.31
    
    
 $
 0.075Second quarter
    
    
    58.27
    
    
    
    46.72
    
 
 
 0.075Third quarter
    
    
    62.33
    
    
    
    51.65
    

 
 0.075Fourth quarter
    
    
    69.48
    
    
    
    57.26
    

 
 0.0752005:First quarter
    
    $
    68.83
    
    
    $
    61.55
    

 $
 0.10Second quarter
    
    
    79.45
    
    
    
    62.72
    

 
 0.10Third quarter
    
    
    82.42
    
    
    
    75.00
    

 
 0.10Fourth quarter
    
    
    91.84
    
    
    
    75.14
    

 
 0.10
 Issuer Purchases of Equity Securities
 TotalNumber ofSharesPurchased as
    
    
    Approximate $Total
    
    
    Average
    
    
    Part of a
    
    
    Value of SharesNumber of
    
    
    Price
    
    
    Publicly
    
    
    That May Yet BeShares
    
    
    Paid per
    
    
    Announced
    
    
    PurchasedPurchased
    
    
    Share
    
    
    Plan
    
    
    Under the PlansOctober 1, 2005 to October 31, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    72,302,882November 1, 2005 to November 30, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    72,302,882December 1, 2005 to December 31, 2005
    
    
    45,535
    
    
    $
    90.03
    
    
    
    45,535
    
    
    $
    68,203,250Total
    
    
    45,535
    
    
    $
    90.03
    
    
    
    45,535
   Item 6. Selected Financial Data.
  11




---



##### 



Year Ended December 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005(In thousands, except per-share amounts)Consolidated Statements of Income Data:Revenues
    
    $
    128,112
    
    
    $
    162,357
    
    
    $
    210,211
    
    
    $
    280,724
    
    
    $
    362,226Costs and expenses:Cost of services
    
    
    45,738
    
    
    
    56,147
    
    
    
    70,974
    
    
    
    91,285
    
    
    
    120,607Member relations and marketing
    
    
    30,219
    
    
    
    40,768
    
    
    
    55,301
    
    
    
    75,460
    
    
    
    93,528General and administrative
    
    
    15,877
    
    
    
    17,493
    
    
    
    21,632
    
    
    
    31,130
    
    
    
    40,250Depreciation and amortization
    
    
    4,412
    
    
    
    5,456
    
    
    
    5,764
    
    
    
    6,782
    
    
    
    7,308Non-cash lease restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,210
    
    
    
    Stock option and related expenses (1) (2)
    
    
    1,260
    
    
    
    668
    
    
    
    114
    
    
    
    408
    
    
    
    511Total costs and expenses
    
    
    97,506
    
    
    
    120,532
    
    
    
    153,785
    
    
    
    210,275
    
    
    
    262,204Income from operations
    
    
    30,606
    
    
    
    41,825
    
    
    
    56,426
    
    
    
    70,449
    
    
    
    100,022Other income, net
    
    
    4,283
    
    
    
    6,346
    
    
    
    7,569
    
    
    
    9,936
    
    
    
    13,588Income before provision for income taxes
    
    
    34,889
    
    
    
    48,171
    
    
    
    63,995
    
    
    
    80,385
    
    
    
    113,610Provision for income taxes
    
    
    13,257
    
    
    
    18,570
    
    
    
    28,307
    
    
    
    26,729
    
    
    
    38,550Net income
    
    $
    21,632
    
    
    $
    29,601
    
    
    $
    35,688
    
    
    $
    53,656
    
    
    $
    75,060Earnings per sharebasic
    
    $
    0.64
    
    
    $
    0.81
    
    
    $
    0.96
    
    
    $
    1.40
    
    
    $
    1.90Weighted average shares outstandingbasic
    
    
    34,003
    
    
    
    36,722
    
    
    
    37,296
    
    
    
    38,344
    
    
    
    39,572Earnings per sharediluted
    
    $
    0.59
    
    
    $
    0.79
    
    
    $
    0.93
    
    
    $
    1.34
    
    
    $
    1.83Weighted average shares outstandingdiluted
    
    
    36,465
    
    
    
    37,671
    
    
    
    38,577
    
    
    
    39,925
    
    
    
    41,092Cash dividends declared per common share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.30
    
    
    $
    0.40
 December 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and marketable securities
    
    $
    132,469
    
    
    $
    225,941
    
    
    $
    293,919
    
    
    $
    416,977
    
    
    $
    544,636Deferred income taxes
    
    
    58,520
    
    
    
    59,726
    
    
    
    37,673
    
    
    
    29,587
    
    
    
    14,838Total assets
    
    
    257,518
    
    
    
    359,581
    
    
    
    423,482
    
    
    
    578,451
    
    
    
    726,995Deferred revenues
    
    
    94,683
    
    
    
    121,415
    
    
    
    154,844
    
    
    
    205,494
    
    
    
    261,300Total stockholders equity
    
    
    143,984
    
    
    
    213,357
    
    
    
    241,993
    
    
    
    327,461
    
    
    
    385,414
 December 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005Other Operating Data (Unaudited):Membership
programs (3)
    
    
    18
    
    
    
    22
    
    
    
    26
    
    
    
    31
    
    
    
    37Member institutions
    
    
    1,802
    
    
    
    1,930
    
    
    
    2,143
    
    
    
    2,368
    
    
    
    2,831Total membership subscriptions
    
    
    4,364
    
    
    
    5,257
    
    
    
    6,414
    
    
    
    8,202
    
    
    
    10,825Average subscriptions per member institution
    
    
    2.42
    
    
    
    2.72
    
    
    
    2.99
    
    
    
    3.46
    
    
    
    3.82Client
renewal rate (4)
    
    
    90
    %
    
    
    90
    %
    
    
    90
    %
    
    
    91
    %
    
    
    92
    %Contract
value (in thousands of dollars) (5)
    
    $
    138,474
    
    
    $
    176,533
    
    
    $
    227,913
    
    
    $
    294,949
    
    
    $
    381,366
 12




---



##### 



(1)
    
    In connection with our spin-off from The Advisory Board
Company in October 1997, we substituted our stock
options for The Advisory Board Company stock options.
The terms of the stock option substitution resulted in
compensation expense being charged for the intrinsic
value of certain stock options. We reflect these charges
as stock option expenses over the vesting period of the
options. After calendar year 2001, we recognized no
additional compensation expense related to these
substitution agreements.(2)
    
    For the years ended December 31, 2001, 2002, 2003, 2004
and 2005, we recognized $1.1 million, $668,000,
$114,000, $408,000 and $511,000, respectively, in
compensation expense reflecting additional Federal
Insurance Corporation Act (FICA) taxes as a result of
the taxable income that the employees recognized upon
the exercise of nonqualified common stock options,
primarily in conjunction with the registered public
offerings in March and April 2001, March 2002 and 2003,
and May 2004, and the sale in March 2005 that was exempt
from registration. See Managements Discussion and
Analysis of Financial Condition and Results of
OperationsYears Ended December 31, 2003, 2004 and
2005Stock option and related expenses.(3)
    
    In February 2006, we launched the Project Management
Office Executive Council, bringing the current number
of membership programs to 38.(4)
    
    For the year then ended. Client renewal rate is defined
as the percentage of member institutions renewed,
adjusted to reflect reductions in member institutions
resulting from mergers and acquisitions of members.(5)
    
    For the year then ended. Contract value is defined as
the aggregate annualized revenue attributed to all
agreements in effect at a given date without regard to
the remaining duration of any such agreement.
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Business Overview
      13




---



##### 



Share-Based Payment
 Results of Operations
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    33.8
    
    
    
    32.5
    
    
    
    33.3Gross profit
    
    
    66.2
    
    
    
    67.5
    
    
    
    66.7Costs and expenses:Member relations and marketing
    
    
    26.3
    
    
    
    26.9
    
    
    
    25.8General and administrative
    
    
    10.3
    
    
    
    11.1
    
    
    
    11.1Depreciation and amortization
    
    
    2.7
    
    
    
    2.4
    
    
    
    2.0Non-cash lease restructuring costs
    
    
    
    
    
    
    1.9
    
    
    
    Stock option and related expenses
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Total costs and expenses
    
    
    39.4
    
    
    
    42.4
    
    
    
    39.1Income from operations
    
    
    26.8
    
    
    
    25.1
    
    
    
    27.6Other income, net
    
    
    3.6
    
    
    
    3.5
    
    
    
    3.8Income before provision for income taxes
    
    
    30.4
    
    
    
    28.6
    
    
    
    31.4Provision for income taxes
    
    
    13.5
    
    
    
    9.5
    
    
    
    10.6Net income
    
    
    17.0
    %
    
    
    19.1
    %
    
    
    20.7
    %
 14




---



##### 



Years Ended December 31, 2003, 2004 and 2005
 Revenues.
 Cost of services.
 Gross profit.
 Member relations and marketing.
 General and administrative.
 15




---



##### 



Depreciation and amortization.
 Non-cash lease restructuring costs.
 Stock option and related expenses.
 Other income, net.
 Provision for income taxes.
 Impact of acquisition.
 Liquidity and Capital Resources
 Cash flows from operating activities.
 16




---



##### 



Cash flows from investing activities.
 Cash flows from financing activities.
    Payments Due by Period (in thousands)Total
    
    
    <1 Year
    
    
    13 Years
    
    
    45 Years
    
    
    >5 YearsOperating leases
    
    $
    570,331
    
    
    $
    14,988
    
    
    $
    37,676
    
    
    $
    56,183
    
    
    $
    461,484
  Off-Balance Sheet Arrangements
  Critical Accounting Policies
  17




---



##### 



Deferred tax asset
 Accounting for Income Taxes
 Goodwill
 Goodwill and Other Intangible Assets
 Revenue recognition
  Reserve for uncollectible revenue
  Commission expense recognition
  18




---



##### 



Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
  Item 8. Financial Statements and Supplementary Data.
 Report of Managements Assessment of Internal Control Over Financial Reporting
     Internal Control  Integrated Framework
   /s/ Thomas L. Monahan IIIThomas L. Monahan IIIChief Executive OfficerFebruary
27, 2006/s/ Timothy R. YostTimothy R. YostChief Financial OfficerFebruary
27, 2006
 19




---



##### 



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated Framework
    .
   
 20




---



##### 



Report of Independent Registered Public Accounting Firm
 
    Internal Control  Integrated Framework
  
 21




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 December 31,2004
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    113,996
    
    
    $
    424,276Marketable securities
    
    
    50,292
    
    
    
    2,264Membership fees receivable, net
    
    
    97,106
    
    
    
    120,242Deferred income taxes, net
    
    
    26,121
    
    
    
    11,880Deferred incentive compensation
    
    
    9,277
    
    
    
    11,489Prepaid expenses and other current assets
    
    
    8,107
    
    
    
    8,944Total current assets
    
    
    304,899
    
    
    
    579,095Deferred income taxes, net
    
    
    3,466
    
    
    
    2,958Marketable securities
    
    
    252,689
    
    
    
    118,096Goodwill and other intangibles
    
    
    
    
    
    
    8,445Property and equipment, net
    
    
    17,397
    
    
    
    18,401Total assets
    
    $
    578,451
    
    
    $
    726,995LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    17,450
    
    
    $
    43,667Accrued incentive compensation
    
    
    18,213
    
    
    
    27,045Deferred revenues
    
    
    205,494
    
    
    
    261,300Total current liabilities
    
    
    241,157
    
    
    
    332,012Other liabilities
    
    
    9,833
    
    
    
    9,569Total liabilities
    
    
    250,990
    
    
    
    341,581Commitments and contingencies (Note 17)Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized and 39,991,749 and 41,399,533 shares issued
as of December 31, 2004 and 2005, respectively, and
38,930,648 and 39,482,727 outstanding as of December 31,
2004 and 2005, respectively
    
    
    399
    
    
    
    414Additional paid-in-capital
    
    
    214,987
    
    
    
    277,028Retained earnings
    
    
    155,619
    
    
    
    214,892Accumulated elements of other comprehensive income (loss)
    
    
    1,763
    
    
    
    (124
    )Treasury stock, at cost, 1,061,101 and 1,916,806 shares,
at December 31, 2004 and 2005, respectively
    
    
    (45,307
    )
    
    
    (106,796
    )Total stockholders equity
    
    
    327,461
    
    
    
    385,414Total liabilities and stockholders equity
    
    $
    578,451
    
    
    $
    726,995
  22




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share amounts)
 Year ended December 31,2003
    
    
    2004
    
    
    2005Revenues
    
    $
    210,211
    
    
    $
    280,724
    
    
    $
    362,226Cost of services
    
    
    70,974
    
    
    
    91,285
    
    
    
    120,607Gross profit
    
    
    139,237
    
    
    
    189,439
    
    
    
    241,619Costs and expenses:Member relations and marketing
    
    
    55,301
    
    
    
    75,460
    
    
    
    93,528General and administrative
    
    
    21,632
    
    
    
    31,130
    
    
    
    40,250Depreciation and amortization
    
    
    5,764
    
    
    
    6,782
    
    
    
    7,308Non-cash lease restructuring costs
    
    
    
    
    
    
    5,210
    
    
    
    Stock option and related expenses (1)
    
    
    114
    
    
    
    408
    
    
    
    511Total costs and expenses
    
    
    82,811
    
    
    
    118,990
    
    
    
    141,597Income from operations
    
    
    56,426
    
    
    
    70,449
    
    
    
    100,022Other income, net
    
    
    7,569
    
    
    
    9,936
    
    
    
    13,588Income before provision for income taxes
    
    
    63,995
    
    
    
    80,385
    
    
    
    113,610Provision for income taxes
    
    
    28,307
    
    
    
    26,729
    
    
    
    38,550Net income
    
    $
    35,688
    
    
    $
    53,656
    
    
    $
    75,060Earnings per share:Basic
    
    $
    0.96
    
    
    $
    1.40
    
    
    $
    1.90Diluted
    
    $
    0.93
    
    
    $
    1.34
    
    
    $
    1.83Dividends per share
    
    $
    
    
    
    $
    0.30
    
    
    $
    0.40Weighted average shares used in the calculation of earnings per share:Basic
    
    
    37,296
    
    
    
    38,344
    
    
    
    39,572Diluted
    
    
    38,577
    
    
    
    39,925
    
    
    
    41,092(1) Composition of stock option and related expenses:Cost of services
    
    $
    75
    
    
    $
    184
    
    
    $
    337Member relations and marketing
    
    
    5
    
    
    
    100
    
    
    
    129General and administrative
    
    
    34
    
    
    
    124
    
    
    
    45Total
    
    $
    114
    
    
    $
    408
    
    
    $
    511
  23




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year ended December 31,2003
    
    
    2004
    
    
    2005Cash flows from operating activities:Net income
    
    $
    35,688
    
    
    $
    53,656
    
    
    $
    75,060Adjustments to reconcile net income to net cash flows provided by operating
activities:Depreciation and amortization
    
    
    5,764
    
    
    
    6,182
    
    
    
    7,305Loss on disposition of property and equipment
    
    
    
    
    
    
    1,162
    
    
    
    (Gain)/loss on sale of investments
    
    
    (750
    )
    
    
    (746
    )
    
    
    2,320Deferred income taxes and tax benefits resulting from the exercise of
common stock options
    
    
    27,171
    
    
    
    24,373
    
    
    
    30,801Non-cash lease restructuring costs
    
    
    
    
    
    
    5,210
    
    
    
    Amortization of marketable securities premiums, net
    
    
    2,185
    
    
    
    2,777
    
    
    
    1,865Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    (12,804
    )
    
    
    (33,946
    )
    
    
    (23,055
    )Deferred incentive compensation
    
    
    (2,358
    )
    
    
    (1,945
    )
    
    
    (2,212
    )Prepaid expenses and other current assets
    
    
    (2,265
    )
    
    
    (1,865
    )
    
    
    (1,179
    )Accounts payable and accrued liabilities
    
    
    730
    
    
    
    4,896
    
    
    
    26,305Accrued incentive compensation
    
    
    1,412
    
    
    
    7,116
    
    
    
    8,894Deferred revenues
    
    
    33,429
    
    
    
    50,650
    
    
    
    55,252Other liabilities
    
    
    493
    
    
    
    1,178
    
    
    
    113Net cash flows provided by operating activities
    
    
    88,695
    
    
    
    118,698
    
    
    
    181,469Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (6,313
    )
    
    
    (9,002
    )
    
    
    (8,703
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (8,136
    )Purchases of marketable securities
    
    
    (71,440
    )
    
    
    (197,049
    )
    
    
    Sales and maturities of marketable securities
    
    
    46,854
    
    
    
    63,611
    
    
    
    176,384Net cash flows (used in) provided by investing activities
    
    
    (30,899
    )
    
    
    (142,440
    )
    
    
    159,545Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    8,292
    
    
    
    55,495
    
    
    
    45,135Proceeds from issuance of common stock under the employee stock purchase plan
    
    
    754
    
    
    
    931
    
    
    
    1,407Purchase of treasury shares
    
    
    (19,620
    )
    
    
    (25,687
    )
    
    
    (61,489
    )Payment of dividends
    
    
    
    
    
    
    (11,569
    )
    
    
    (15,787
    )Reimbursement of common stock offering costs
    
    
    175
    
    
    
    225
    
    
    
    35Payment of common stock offering costs
    
    
    (175
    )
    
    
    (225
    )
    
    
    (35
    )Net cash flows (used in) provided by financing activities
    
    
    (10,574
    )
    
    
    19,170
    
    
    
    (30,734
    )Net increase (decrease) in cash and cash equivalents
    
    
    47,222
    
    
    
    (4,572
    )
    
    
    310,280Cash and cash equivalents, beginning of year
    
    
    71,346
    
    
    
    118,568
    
    
    
    113,996Cash and cash equivalents, end of year
    
    $
    118,568
    
    
    $
    113,996
    
    
    $
    424,276
  24




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
For the years ended December 31, 2003, 2004, and 2005
(In thousands, except share amounts)
 Accumulatedelements of other
    
    
    
    
    
    
    
    
    
    
    AnnualCommon stock
    
    
    Additional
    
    
    Retained
    
    
    comprehensive
    
    
    Treasury
    
    
    
    
    
    
    comprehensiveShares
    
    
    Amount
    
    
    paid-in-capital
    
    
    earnings
    
    
    income
    
    
    stock
    
    
    Total
    
    
    incomeBalance at December 31, 2002
    
    
    37,182,846
    
    
    $
    372
    
    
    $
    129,846
    
    
    $
    77,844
    
    
    $
    5,295
    
    
    $
    
    
    
    $
    213,357
    
    
    
    Issuance of common stock upon the
exercise of common stock options
    
    
    626,663
    
    
    
    6
    
    
    
    8,286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,292
    
    
    
    Issuance of common stock under
the employee stock purchase plan
    
    
    25,566
    
    
    
    
    
    
    
    754
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    754
    
    
    
    Tax benefits related to the
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    4,540
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,540
    
    
    
    Purchase of treasury stock at cost
    
    
    (552,007
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,620
    )
    
    
    (19,620
    )
    
    
    Unrealized losses on
available-for-sale marketable
securities, net of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,018
    )
    
    
    
    
    
    
    (1,018
    )
    
    
    (1,018
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,688
    
    
    
    
    
    
    
    
    
    
    
    35,688
    
    
    
    35,688Balance at December 31, 2003
    
    
    37,283,068
    
    
    $
    378
    
    
    $
    143,426
    
    
    $
    113,532
    
    
    $
    4,277
    
    
    $
    (19,620
    )
    
    $
    241,993
    
    
    $
    34,670Issuance of common stock upon the
exercise of common stock options
    
    
    2,134,530
    
    
    
    21
    
    
    
    55,474
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,495
    
    
    
    Issuance of common stock under
the employee stock purchase plan
    
    
    22,144
    
    
    
    
    
    
    
    931
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    931
    
    
    
    Tax benefits related to the
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    15,156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,156
    
    
    
    Purchase of treasury stock at cost
    
    
    (509,094
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,687
    )
    
    
    (25,687
    )
    
    
    Unrealized losses on
available-for-sale marketable
securities, net of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,645
    )
    
    
    
    
    
    
    (2,645
    )
    
    
    (2,645
    )Foreign currency translation, net
of tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    131
    
    
    
    131Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,569
    )
    
    
    
    
    
    
    
    
    
    
    (11,569
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,656
    
    
    
    
    
    
    
    
    
    
    
    53,656
    
    
    
    53,656Balance at December 31, 2004
    
    
    38,930,648
    
    
    $
    399
    
    
    $
    214,987
    
    
    $
    155,619
    
    
    $
    1,763
    
    
    $
    (45,307
    )
    
    $
    327,461
    
    
    $
    51,142Issuance of common stock upon the
exercise of common stock options
    
    
    1,382,828
    
    
    
    15
    
    
    
    45,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,135
    
    
    
    Issuance of common stock under
the employee stock purchase plan
    
    
    24,956
    
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,407
    
    
    
    Tax benefits related to the
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    15,514
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,514
    
    
    
    Purchase of treasury stock at cost
    
    
    (855,705
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (61,489
    )
    
    
    (61,489
    )
    
    
    Unrealized losses on
available-for-sale marketable
securities, net of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,349
    )
    
    
    
    
    
    
    (1,349
    )
    
    
    (1,349
    )Foreign currency translation, net
of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (538
    )
    
    
    
    
    
    
    (538
    )
    
    
    (538
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,787
    )
    
    
    
    
    
    
    
    
    
    
    (15,787
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,060
    
    
    
    
    
    
    
    
    
    
    
    75,060
    
    
    
    75,060Balance at December 31, 2005
    
    
    39,482,727
    
    
    $
    414
    
    
    $
    277,028
    
    
    $
    214,892
    
    
    $
    (124
    )
    
    $
    (106,796
    )
    
    $
    385,414
    
    
    $
    73,173
  25




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Description of operations
  2. Principles of consolidation
  3. Summary of significant accounting policies
 Cash equivalents and marketable securities
  Allowance for doubtful accounts
  Goodwill and other intangible assets
  Property and equipment
  26




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Recovery of long-lived assets
  Revenue recognition
  Commission expense recognition
  Earnings per share
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Basic weighted average common shares outstanding
    
    
    37,296
    
    
    
    38,344
    
    
    
    39,572Dilutive common shares outstanding
    
    
    1,281
    
    
    
    1,581
    
    
    
    1,520Diluted weighted average common shares outstanding
    
    
    38,577
    
    
    
    39,925
    
    
    
    41,092
 Concentration
of credit risk and sources of revenue
   27




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Foreign currency
  Fair value of financial instruments
  Income taxes
  Research and development costs
  Stock-based compensation
 Accounting for Stock Issued to
Employees,
 Accounting for Stock-Based Compensation Accounting for Stock-Based Compensation Transition and Disclosure
 28




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Net income, as reported
    
    $
    35,688
    
    
    $
    53,656
    
    
    $
    75,060Deduct: Total stock-based employee compensation
expense determined under fair value based
methods for all awards, net of related tax
effects
    
    
    (17,659
    )
    
    
    (16,773
    )
    
    
    (16,759
    )Pro forma net income
    
    $
    18,029
    
    
    $
    36,883
    
    
    $
    58,301Earnings per share:Basic  as reported
    
    $
    0.96
    
    
    $
    1.40
    
    
    $
    1.90Basic  pro forma
    
    $
    0.48
    
    
    $
    0.96
    
    
    $
    1.47Diluted  as reported
    
    $
    0.93
    
    
    $
    1.34
    
    
    $
    1.83Diluted  pro forma
    
    $
    0.47
    
    
    $
    0.93
    
    
    $
    1.43Assumptions:Dividend yield
    
    
    
    
    
    
    0.6
    %
    
    
    0.6
    %Expected life of option (in years)
    
    
    5
    
    
    
    5
    
    
    
    4.4Expected volatility
    
    
    55
    %
    
    
    40
    %
    
    
    30
    %Risk-free interest rate
    
    
    2.9
    %
    
    
    3.05
    %
    
    
    4.29
    %Weighted-average fair value of options granted
    
    $
    16.49
    
    
    $
    18.19
    
    
    $
    19.80
  Use of estimates in preparation of financial statements
   29




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 4. New accounting pronouncements
 Share-Based Payment Statement of Cash Flows
  
    
    Modified prospective method: Compensation cost is recognized
beginning with the effective date of adoption (a) based on the
requirements of SFAS No. 123-R for all share-based payments granted
after the effective date of adoption and (b) based on the
requirements of Statement No. 123-R for all awards granted to
employees prior to the effective date of adoption that remain
unvested on the date of adoption.
    
    Modified retrospective method: Includes the
requirements of the modified prospective method
described above, but also permits restatement using
amounts previously disclosed under the pro forma
provisions of SFAS No. 123 either for (a) all prior
periods presented or (b) prior interim periods of the
year of adoption.
     5. Acquisitions
  30




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 6. Marketable securities
  As of December 31, 2004Gross
    
    
    GrossMarket
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes and bonds
    
    $
    254,910
    
    
    $
    254,974
    
    
    $
    1,149
    
    
    $
    1,213Washington, D.C. tax exempt notes and bonds
    
    
    48,071
    
    
    
    45,562
    
    
    
    2,509
    
    
    
    $
    302,981
    
    
    $
    300,536
    
    
    $
    3,658
    
    
    $
    1,213
 As of December 31, 2005Gross
    
    
    GrossMarket
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes and bonds
    
    $
    75,106
    
    
    $
    76,107
    
    
    $
    146
    
    
    $
    1,147Washington, D.C. tax exempt notes and bonds
    
    
    45,254
    
    
    
    43,860
    
    
    
    1,394
    
    
    
    $
    120,360
    
    
    $
    119,967
    
    
    $
    1,540
    
    
    $
    1,147
  As of December 31, 2005Fair Market
    
    
    AmortizedValue
    
    
    CostLess than one year
    
    $
    2,264
    
    
    $
    2,260Matures in 1 to 5 years
    
    
    90,402
    
    
    
    91,008Matures in 6 to 10 years
    
    
    25,225
    
    
    
    24,310Matures after 10 years
    
    
    2,469
    
    
    
    2,389$
    120,360
    
    
    $
    119,967
  31




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 7. Membership fees receivable
  As of December 31,2004
    
    
    2005Billed membership fees receivable
    
    $
    70,128
    
    
    $
    81,316Unbilled membership fees receivable
    
    
    28,943
    
    
    
    39,96199,071
    
    
    
    121,277Reserve for uncollectible revenue
    
    
    (1,965
    )
    
    
    (1,035
    )Membership fees receivable, net
    
    $
    97,106
    
    
    $
    120,242
 8. Property and equipment
  As of December 31,2004
    
    
    2005Furniture, fixtures, and equipment
    
    $
    14,263
    
    
    $
    13,349Software and Web site development costs
    
    
    8,994
    
    
    
    5,471Leasehold improvements
    
    
    8,710
    
    
    
    12,44231,967
    
    
    
    31,262Accumulated depreciation
    
    
    (14,570
    )
    
    
    (12,861
    )Property and equipment, net
    
    $
    17,397
    
    
    $
    18,401
  9. Lease restructuring costs
  32




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   10. Income taxes
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Current tax expense
    
    $
    19,523
    
    
    $
    18,643
    
    
    $
    23,801Deferred tax expense
    
    
    8,784
    
    
    
    8,086
    
    
    
    14,749Provision for income taxes
    
    $
    28,307
    
    
    $
    26,729
    
    
    $
    38,550
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income tax, net of U.S. federal income tax benefit
    
    
    
    
    
    
    0.4
    
    
    
    Foreign income tax
    
    
    
    
    
    
    0.3
    
    
    
    (0.1
    )Write down of deferred tax assets, net, related to a change in tax status
    
    
    12.8
    
    
    
    
    
    
    
    Permanent differences and credits, net
    
    
    (3.6
    )
    
    
    (2.4
    )
    
    
    (1.0
    )Effective tax rate
    
    
    44.2
    %
    
    
    33.3
    %
    
    
    33.9
    %
 Washington, D.C. income tax incentives
 33




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  As of December 31,2004
    
    
    2005Deferred tax assets:Tax credit carry forwards
    
    $
    10,380
    
    
    $
    8,455Accrued incentive compensation agreements
    
    
    2,710
    
    
    
    4,451Deferred revenue
    
    
    2,226
    
    
    
    2,652Non-cash lease incentive
    
    
    2,164
    
    
    
    2,465Operating leases
    
    
    1,303
    
    
    
    1,489Depreciation
    
    
    169
    
    
    
    1,407Loss on sale of investments
    
    
    
    
    
    
    903Deferred compensation plan
    
    
    
    
    
    
    534Financial reporting reserves
    
    
    688
    
    
    
    481Net operating loss carry forwards
    
    
    13,323
    
    
    
    Total deferred tax assets
    
    
    32,963
    
    
    
    22,837Deferred tax liabilities:Deferred incentive compensation
    
    
    2,407
    
    
    
    4,469Depreciation
    
    
    
    
    
    
    192Unrealized gains on available-for-sale securities, net
    
    
    813
    
    
    
    153Goodwill
    
    
    
    
    
    
    41Employee benefits
    
    
    156
    
    
    
    Total deferred tax liabilities
    
    
    3,376
    
    
    
    4,855Valuation allowance
    
    
    
    
    
    
    (3,144
    )Deferred tax assets, net
    
    $
    29,587
    
    
    $
    14,838
 Accounting for Income Taxes
  34




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Washington, D.C. income tax incentives
   11. Comprehensive income (loss)
  12. Employee benefit plans
 Defined contribution 401(k) Plan
  Employee Stock Purchase Plan
  35




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 13. Public offerings and sales of common stock
  14. Stock option plans
 Stock-Based Incentive Compensation Plan
  1999 Stock Option Plan
  2001 Stock Option Plan
  2002 Non-Executive Stock Incentive Plan
  36




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  2004 Stock Incentive Plan
   Directors Stock Option Plan
  37




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Transactions
  WeightedNumber
    
    
    Averageof Options
    
    
    Exercise Price2003Options outstanding, beginning of year
    
    
    5,019,403
    
    
    $
    26.61Options granted
    
    
    1,920,240
    
    
    
    32.97Options cancelled
    
    
    (135,641
    )
    
    
    29.23Options exercised
    
    
    (626,663
    )
    
    
    13.44Options outstanding, end of year
    
    
    6,177,339
    
    
    
    29.89Options exercisable, end of year
    
    
    1,974,974
    
    
    
    26.302004Options outstanding, beginning of year
    
    
    6,177,339
    
    
    $
    29.89Options granted
    
    
    1,585,500
    
    
    
    46.26Options cancelled
    
    
    (216,603
    )
    
    
    31.44Options exercised
    
    
    (2,134,530
    )
    
    
    26.01Options outstanding, end of year
    
    
    5,411,706
    
    
    
    36.20Options exercisable, end of year
    
    
    1,413,331
    
    
    
    31.852005Options outstanding, beginning of year
    
    
    5,411,706
    
    
    $
    36.20Options granted
    
    
    1,417,500
    
    
    
    66.85Options cancelled
    
    
    (171,625
    )
    
    
    49.03Options exercised
    
    
    (1,386,398
    )
    
    
    32.70Options outstanding, end of year
    
    
    5,271,183
    
    
    
    44.96Options exercisable, end of year
    
    
    1,557,684
    
    
    
    35.05
 38




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Options Outstanding
    
    Options ExercisableWeightedWeighted
    
    Average
    
    
    
    
    
    WeightedNumber Outstanding
    
    Average
    
    Remaining
    
    Number Exercisable
    
    Averageas of
    
    Exercise
    
    Contractual
    
    as of
    
    ExerciseRange of Exercise Prices
    
    December 31, 2005
    
    Price
    
    Life-Years
    
    December 31, 2005
    
    Price$
  7.12  $32.23
    
    
    423,743
    
    
    $
    29.22
    
    
    
    5.45
    
    
    
    348,993
    
    
    $
    29.1732.30
   32.30
    
    
    1,072,500
    
    
    
    32.30
    
    
    
    7.19
    
    
    
    284,000
    
    
    
    32.3032.41
   32.41
    
    
    886,340
    
    
    
    32.41
    
    
    
    6.18
    
    
    
    531,590
    
    
    
    32.4132.54
   44.28
    
    
    98,000
    
    
    
    35.51
    
    
    
    6.46
    
    
    
    53,125
    
    
    
    35.5245.10
   45.10
    
    
    1,221,860
    
    
    
    45.10
    
    
    
    5.21
    
    
    
    236,736
    
    
    
    45.1046.45
   64.88
    
    
    1,396,240
    
    
    
    63.43
    
    
    
    6.24
    
    
    
    95,740
    
    
    
    51.7165.26
   89.70
    
    
    172,500
    
    
    
    81.55
    
    
    
    6.68
    
    
    
    7,500
    
    
    
    67.68$
  7.12  $89.70
    
    
    5,271,183
    
    
    $
    44.96
    
    
    
    6.14
    
    
    
    1,557,684
    
    
    $
    35.05
 15. Deferred Compensation Plan
  16. Supplemental cash flows disclosures
  17. Commitments and contingencies
 Operating leases
  Year Ending December 31,2006
    
    $
    14,9882007
    
    
    14,8762008
    
    
    22,8002009
    
    
    28,0922010
    
    
    28,091Thereafter
    
    
    461,484Total
    
    $
    570,331
 39




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    18. Quarterly Financial Data (Unaudited)
  2004 Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31Revenues
    
    $
    63,979
    
    
    $
    67,198
    
    
    $
    72,424
    
    
    $
    77,123Gross profit
    
    
    42,579
    
    
    
    44,966
    
    
    
    50,572
    
    
    
    51,322Income before provision for income taxes
    
    
    17,880
    
    
    
    19,005
    
    
    
    18,047
    
    
    
    25,453Net income
    
    $
    11,980
    
    
    $
    12,733
    
    
    $
    11,954
    
    
    $
    16,989Earnings per share:Basic
    
    $
    0.32
    
    
    $
    0.33
    
    
    $
    0.31
    
    
    $
    0.44Diluted
    
    $
    0.31
    
    
    $
    0.32
    
    
    $
    0.30
    
    
    $
    0.42
 2005 Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31Revenues
    
    $
    81,608
    
    
    $
    87,351
    
    
    $
    93,432
    
    
    $
    99,835Gross profit
    
    
    55,551
    
    
    
    57,263
    
    
    
    62,357
    
    
    
    66,448Income before provision for income taxes
    
    
    25,777
    
    
    
    25,633
    
    
    
    29,469
    
    
    
    32,731Net income
    
    $
    17,142
    
    
    $
    17,046
    
    
    $
    19,597
    
    
    $
    21,275Earnings per share:Basic
    
    $
    0.44
    
    
    $
    0.43
    
    
    $
    0.49
    
    
    $
    0.54Diluted
    
    $
    0.42
    
    
    $
    0.41
    
    
    $
    0.47
    
    
    $
    0.52
 19. Subsequent events
  Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  Item 9A. Controls and Procedures.
  40




---



##### 



Item 9B. Other Information.
  PART III
 Item 10. Directors and Executive Officers of the Registrant.
  Directors andExecutive Officers
    
    Age
    
    PositionJames J. McGonigle
    
    
    42
    
    
    Executive Chairman of the Board of DirectorsThomas L. Monahan III
    
    
    39
    
    
    Chief Executive Officer and DirectorRussell P. Fradin
    
    
    50
    
    
    DirectorRobert C. Hall
    
    
    74
    
    
    DirectorNancy J. Karch
    
    
    58
    
    
    DirectorDavid W. Kenny
    
    
    44
    
    
    DirectorDaniel O. Leemon
    
    
    52
    
    
    DirectorMichael A. Archer
    
    
    42
    
    
    President, Marketing and InternationalDerek C. M. van Bever
    
    
    48
    
    
    Chief Research OfficerTimothy R. Yost
    
    
    34
    
    
    Chief Financial Officer
 James J. McGonigle
 Thomas L. Monahan III
 Russell P. Fradin
 41




---



##### 



Robert C. Hall
 Nancy J. Karch
 David W. Kenny
 Daniel O. Leemon
 Michael A. Archer
 Derek C. M. van Bever
 Timothy R. Yost
 Section 16(a) Beneficial Ownership Reporting Compliance
  Audit Committee Financial Expert
  42




---



##### 



Audit Committee
  Code of Ethics
 http://www.executiveboard.com
 Item 11. Executive Compensation.
  Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
 Equity Compensation Plan Information
 (A)
    
    
    (B)
    
    
    (C)Number OfSecurities To Be
    
    
    
    
    
    
    Number of SecuritiesIssued Upon
    
    
    
    
    
    
    Remaining AvailableExercise Of
    
    
    Weighted-Average
    
    
    For Future Issuances underOutstanding
    
    
    Exercise Price Of
    
    
    Equity Compensation PlansOptions, Warrants
    
    
    Outstanding Options,
    
    
    (Excluding SecuritiesPlan Category
    
    And Rights
    
    
    Warrants And Rights
    
    
    Reflected In Column (A))Equity compensation plans approved by stockholders
    
    
    3,619,733
    
    
    $
    47.42
    
    
    
    2,770,942Equity compensation plans not approved by stockholders (1)
    
    
    1,651,450
    
    
    
    37.49
    
    
    
    Total
    
    
    5,271,183
    
    
    $
    44.96
    
    
    
    2,770,942
 
 (1)
    
    See Note 14 to our audited financial statements for the year ended
December 31, 2005 for a narrative description of the 2002
Non-Executive Stock Incentive Plan, which was not approved by our
stockholders. Item 13. Certain Relationships and Related Transactions.
 43




---



##### 



Item 14. Principal Accounting Fees and Services.
 Fees Incurred
  Year Ended December 31,2004
    
    
    2005Ernst & Young LLP
    
    
    Ernst & Young LLPAudit fees
    
    $
    368,906
    
    
    $
    314,600Audit-related fees
    
    
    16,000
    
    
    
    17,000Tax fees
    
    
    133,385
    
    
    
    42,000All other fees
    
    
    
    
    
    
    Total
    
    $
    518,291
    
    
    $
    373,600
 Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  Audit and Non-Audit Service Pre-Approval Policy
  Audit Services.
 Audit-Related Services.
 Tax Services.
 44




---



##### 



All Other Services.
 Delegation and Fee Levels.
 Pre-Approved Fee Levels.
 Procedures
 PART IV
 Item 15. Exhibits, Financial Statement Schedules.
 (1)
    
    The following financial statements of the registrant and
reports of Independent Registered Public Accounting Firm are included inItem 8 hereof:Report of Managements Assessment of Internal Control over Financial Reporting,Reports of Independent Registered Public Accounting Firm,Consolidated Balance Sheets as of December 31, 2004 and 2005,Consolidated Statements of Income for the years ended December 31, 2003, 2004 and 2005,Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2004 and 2005,Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2003, 2004 and 2005, andNotes to Consolidated Financial Statements.(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 consolidated financial statements or are not
required under the related instructions, or are not applicable and therefore have been omitted.Schedule IIValuation and Qualifying Accounts.(3)
    
    The exhibits listed below are filed or incorporated by reference as part of this Form 10-K.
 ExhibitNo.
    
    Description of Exhibit3.1
    
    Second Amended and Restated Certificate of Incorporation.*3.2
    
    Amended and Restated Bylaws.*4.1
    
    Specimen Common Stock Certificate.*10.1
    
    Employment Agreement, dated January 21, 1999, between The Corporate Executive Board Company and James J.
McGonigle.*10.2
    
    Stock Option Agreement Pursuant to The Corporate Advisory Board Company Stock-Based Incentive Compensation Plan,
 45




---



##### 



ExhibitNo.
    
    Description of Exhibiteffective as of October 31, 1997, between The Corporate Executive Board Company and James J. McGonigle, as
amended on January 21, 1999.*10.3
    
    Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities, Non-Competition,
Non-Solicitation and Work Product, dated January 21, 1999, between The Corporate Executive Board Company and
James J. McGonigle.*10.4
    
    Form of Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities,
Non-Competition, Non-Solicitation and Work Product.*10.5
    
    The Corporate Executive Board Company Stock-Based Incentive Compensation Plan, adopted on October 31, 1997, as
amended and restated in February 1999.*** 10.6
    
    Amended Directors Stock Plan and Standard Terms and Conditions for Director Non-qualified Stock Options.*** 10.7
    
    1999 Stock Option Plan and Standard Terms and Conditions for 1999 Stock Option Plan Incentive Stock Options.*** 10.8
    
    Employee Stock Purchase Plan dated June 23, 2000.**10.9
    
    2001 Stock Option Plan. ## 10.10
    
    2002 Non-Executive Stock Incentive Plan.ä 10.11
    
    2004 Stock Incentive Plan as
amended July 18, 2005. *****10.12
    
    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. * #10.13
    
    Agreement of Lease, dated June 25, 1998, between The Corporate Executive Board Company and The George Washington
University.*10.14
    
    License Agreement, effective as of October 31, 1997, between The Corporate Executive Board Company and The
Advisory Board Company.*10.15
    
    Form of term sheet for director non-qualified stock options.### 10.16
    
    Employment Agreement, dated March 20, 2002, between The Corporate Executive Board Company and Michael A.
Archer.±10.17
    
    Deferred Compensation Plan. ****14.1
    
    Code of Ethics For Directors, Executives and Employees.21.1
    
    List of the Subsidiaries of The Corporate Executive Board Company.23.1
    
    Consent of Ernst and Young LLP, Independent Registered Public Accounting Firm.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 USC Section 1350.
 46




---



##### 



ExhibitNo.
    
    Description of Exhibit
 
 *
    
    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 the registrants
registration statement on Form S-8, filed with the
Securities and Exchange Commission on March 9, 1999
(Registration No. 333-74145).****
    
    Incorporated by reference to Exhibit 10.1 from the Current
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 filed with the Securities and Exchange Commission on July 6,
2005.*****
    
    Incorporated by reference to Exhibit 10.1 from the Current
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on August 24, 2005.#
    
    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).###
    
    Incorporated by reference to Exhibit 10.43 from the
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the year ended
December 31, 2001.
    
    Compensation arrangement.±
    
    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.ä
    
    Incorporated by reference to Exhibit 10.21.3 from
the Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the year ended December 31, 2002.
 47




---



##### 



Report of Independent Registered Public Accounting Firm
   
 
 48




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
 Schedule IIValuation and Qualifying Accounts
(In thousands)
 AdditionsCharged toBalance at
    
    
    Additions
    
    
    Provision
    
    
    DeductionsBeginning
    
    
    Charged to
    
    
    for Income
    
    
    from
    
    
    Balance atof Year
    
    
    Revenue
    
    
    Taxes
    
    
    Reserve
    
    
    End of YearYear ended December 31, 2003Reserve for uncollectible revenue
    
    $
    2,800
    
    
    $
    4,957
    
    
    $
    
    
    
    $
    4,882
    
    
    $
    2,875$
    2,800
    
    
    $
    4,957
    
    
    $
    
    
    
    $
    4,882
    
    
    $
    2,875Year ended December 31, 2004Reserve for uncollectible revenue
    
    $
    2,875
    
    
    $
    3,439
    
    
    $
    
    
    
    $
    4,349
    
    
    $
    1,965$
    2,875
    
    
    $
    3,439
    
    
    $
    
    
    
    $
    4,349
    
    
    $
    1,965Year ended December 31, 2005Reserve for uncollectible revenue
    
    $
    1,965
    
    
    $
    2,960
    
    
    $
    
    
    
    $
    3,890
    
    
    $
    1,035Valuation
allowance on deferred tax assets
    
    
    
    
    
    
    
    
    
    
    3,144
    
    
    
    
    
    
    
    3,144$
    1,965
    
    
    $
    2,960
    
    
    $
    3,144
    
    
    $
    3,890
    
    
    $
    4,179
 49




---



##### 



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 February 27, 2006.
 The Corporate Executive Board CompanyBy: /s/ Thomas L. Monahan IIIThomas L. Monahan IIIChief Executive Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below on February 27, 2006 by the following persons on behalf of the registrant and in the
capacity indicated.
 Signature
    
    Title/s/ James J. McGonigle

James J. McGonigle
    
    Executive Chairman of the Board of Directors/s/ Thomas L. Monahan III

Thomas L. Monahan III
    
    Chief Executive Officer and Director (Principal Executive Officer)/s/ Timothy R. Yost

Timothy R. Yost
    
    Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)/s/ Russell P. Fradin

Russell P. Fradin
    
    Director/s/ Robert C. Hall

Robert C. Hall
    
    Director/s/ Nancy J. Karch

Nancy J. Karch
    
    Director/s/ David W. Kenny

David W. Kenny
    
    Director/s/ Daniel O. Leemon

Daniel O. Leemon
    
    Director
 50




---



##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description of Exhibit21.1
    
    List of the Subsidiaries of The Corporate Executive Board Company.23.1
    
    Consent of Ernst and Young LLP, Independent Registered Public Accounting Firm.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 USC Section 1350.
 51