##### 



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, 2007.
 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
  Delaware
    
    52-2056410(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)1919 North Lynn Street 
Arlington, Virginia
(Address of principal executive offices)
    
    22209
(Zip Code)
 (571) 303-3000
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $0.01 per share
    
    The Nasdaq Stock Market LLC
 Not applicable
 þ o
 o þ
 þ o
 þ
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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Disclosure regarding forward-looking statementsItem 1.
    
    Business
    
    
    4Item 1A.
    
    Risk Factors
    
    
    10Item 1B.
    
    Unresolved Staff Comments
    
    
    13Item 2.
    
    Properties
    
    
    13Item 3.
    
    Legal Proceedings
    
    
    13Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    14PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
    
    
    14Issuer Purchases of Equity SecuritiesItem 6.
    
    Selected Financial Data
    
    
    15Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results
    
    
    16of OperationsItem 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 8.
    
    Financial Statements and Supplementary Data
    
    
    25Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
    
    
    49Financial DisclosureItem 9A.
    
    Controls and Procedures
    
    
    49Item 9B.
    
    Other Information
    
    
    50PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    50Item 11.
    
    Executive Compensation
    
    
    50Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
    
    
    50Related Stockholder MattersItem 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    50Item 14.
    
    Principal Accountant Fees and Services
    
    
    50PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    51Index to Consolidated Financial Tables
    
    
    58EX 10.11 2004 Stock Incentive Plan, as amended June 14, 2007
    
    
    59EX 10.30 Form of Indemnity Agreement between The Corporate Executive
    
    
    71Board Company and its Directors and OfficersEX 21.1 List of Subsidiaries of The Corporate Executive Board Company
    
    
    81EX 23.1 Consent of Ernst & Young LLP
    
    
    82EX 31.1 Section 302 Certification of CEO
    
    
    83EX 31.2 Section 302 Certification of CFO
    
    
    84EX 32.1 Section 906 Certification of CEO and CFO
    
    
    85
 2




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##### 



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
   3




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##### 



PART I
 Item 1. Business.
     
    
    Best practices research studies and supplementary briefings, benchmarking data and decision
support tools
    
    Executive education and online communities
    
    On demand team and project support
   
    
    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.
  4




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Available Information
 http://www.executiveboard.com
 Industry Background
    Business Strategy
  5




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
    
    Maintain a Subscription Based Membership Model.We believe that our membership-based
model is integral 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.
    
    Focus on Cost Savings Through Best Practices Research and Analysis.The focus of our work
is on researching best demonstrated business and management practices that drive corporate
performance and address the areas that most directly impact the bottom line of our members.
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 positioned us as a leading and unique source for identifying,
studying, evaluating and communicating these evolving solutions. We also believe that our
existing library of best practices research and established 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 members senior executives
to identify pertinent, 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 from 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 the 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 online tools, assists member executives in solving their own challenges on a
real-time basis. We expect that adding new members to our research programs will increase
revenues and should improve program operating margins.
 Growth Strategy
  
    
    Cross-Sell Additional Subscriptions to Existing Members.On average, individual members
participate in 3.47 research programs at December 31, 2007. We actively cross-sell
additional membership subscriptions and believe that most members are potential participants
in up to 18 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 18,000 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 initiative is focused on companies with annual revenue between $100 million
and $750 million.
 6




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
    
    Develop New Products that Target New Roles, Budgets and Workflow.We currently offer
research programs covering 49 executive constituencies. We have added 11 net new research
programs during the past two years. We also have identified more than 50 additional
potential program offerings. This list includes opportunities to serve executive functions
beyond the 49 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.
    
    Acquisitions.The Companys internal growth strategy may be supplemented from time to
time by acquisitions, partnerships or alliances involving businesses that complement the
Companys existing lines of business or that otherwise are deemed to fit into the Companys
business model. For example, in August 2007, we completed the acquisition of ITtoolbox, an
online community of information technology and other professionals who share practical, job
related information. This community provides free access to a new, worldwide audience of
potential customers of Company programs, and generates advertising and content-related
revenues.
 The Membership Network
   December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Membership programs (1)
    
    
    48
    
    
    
    42
    
    
    
    37
    
    
    
    31
    
    
    
    26Member institutions
    
    
    4,711
    
    
    
    3,739
    
    
    
    2,831
    
    
    
    2,368
    
    
    
    2,143Total membership subscriptions
    
    
    16,349
    
    
    
    14,190
    
    
    
    10,825
    
    
    
    8,202
    
    
    
    6,414Average subscriptions per member
institution (cross-sell ratio)
(2)
    
    
    3.47
    
    
    
    3.80
    
    
    
    3.82
    
    
    
    3.46
    
    
    
    2.99Client renewal rate (3)
    
    
    90
    %
    
    
    92
    %
    
    
    92
    %
    
    
    91
    %
    
    
    90
    %Contract value (in thousands) (4)
    
    $
    526,386
    
    
    $
    475,653
    
    
    $
    381,366
    
    
    $
    294,949
    
    
    $
    227,913
 
 (1)
    
    In January 2008, we launched the HR Leadership Academy, bringing the current number of
membership programs to 49.(2)
    
    Excluding the impact of the middle market cross-sell ratio of 1.44, 1.1 and 1.0 in 2007, 2006
and 2005, respectively, the traditional large company market cross-sell ratio was 4.03, 4.15
and 3.91 in 2007, 2006 and 2005, respectively.(3)
    
    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. In 2007, the overall client renewal rate includes a
client renewal rate of 92% for the traditional large company market and 80% for the middle
market.(4)
    
    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
  7




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Best Practices Research Studies and Supplementary Briefings, Benchmarking Data and Decision Support
Tools
  Executive Education and Online Communities
  On Demand Team and Project Support
  Pricing
  8




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Sales and Marketing
   Competition
    Employees
   9




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Item 1A. Risk Factors.
  Our financial results and growth prospects depend on renewals of our membership-based services, the
sale of additional programs to existing members and our ability to attract new members.
   If new products are not successful or are delayed, our business will be adversely affected.
  Failure to adapt to member needs and demands and to anticipate or adapt to market trends could have
a material adverse effect on our business.
  Inability to attract and retain a significant number of highly skilled employees would have an
adverse effect on our business.
  10




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Continued consolidation of the financial services industry or
sustained ecenomic distress may adversely impact our business.
  We may experience fluctuations in operating results.
  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.
  Failure to manage our global product expansion could adversely impact our operating results.
  We could be subject to additional income tax liabilities.
  11




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Our exposure to interest rate fluctuations may have a negative impact on our results of operations.
  Changes in foreign currency and marketplace conditions may have a negative impact on our results of
operations.
  Changes in estimates or interpretations under financial accounting standards related to share-based
payments could have a material adverse impact on our reported results of operations.
   Our business could suffer if we are unsuccessful in making, integrating and maintaining
acquisitions and investments.
  
    
    disruption of our ongoing business, including loss of management focus on existing businesses;
    
    problems retaining key personnel;
 12




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
    
    additional operating losses and expenses of the companies we acquired or in which we invested;
    
    the potential impairment of amounts capitalized as intangible assets as part of the acquisition;
    
    the potential impairment of customer and other relationships of the companies we acquired or in
which we invested or our own customers as a result of any integration of operations;
    
    the difficulty of incorporating acquired technology and rights into our offerings and
unanticipated expenses related to such integration;
    
    the difficulty of integrating an acquired companys accounting, financial reporting,
management, information, human resource and other administrative systems to permit effective
management, and the lack of control if such integration is delayed or not implemented;
    
    the difficulty of implementing at companies we acquire the controls, procedures and policies
appropriate for a larger public company;
    
    potential unknown liabilities associated with a company we acquire or in which we invest; and
    
    for foreign transactions, additional risks related to the integration of operations across
different cultures and languages, and the economic, political, and regulatory risks associated
with specific countries.
  Item 1B. Unresolved Staff Comments.
  Item 2. Properties.
    Item 3. Legal Proceedings.
  13




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Item 4. Submission of Matters to a Vote of Security Holders.
  PART II
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
  High
    
    Low
    
    Dividends2007:First quarter
    
    $
    96.33
    
    
    $
    73.15
    
    
    $
    0.40Second quarter
    
    
    77.39
    
    
    
    58.54
    
    
    
    0.40Third quarter
    
    
    74.37
    
    
    
    62.94
    
    
    
    0.40Fourth quarter
    
    
    76.99
    
    
    
    58.63
    
    
    
    0.402006:First quarter
    
    $
    103.18
    
    
    $
    80.77
    
    
    $
    0.30Second quarter
    
    
    112.97
    
    
    
    97.58
    
    
    
    0.30Third quarter
    
    
    101.25
    
    
    
    83.62
    
    
    
    0.30Fourth quarter
    
    
    97.10
    
    
    
    86.25
    
    
    
    0.30
  Recent Sales of Unregistered Securities
  Issuer Purchases of Equity Securities
 Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of a
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plan
    
    
    Under the PlansOctober 1, 2007 to October 31, 2007
    
    
    181
    
    
    $
    69.34
    
    
    
    181
    
    
    $
    96,444,125November 1, 2007 to November 30, 2007
    
    
    200,000
    
    
    $
    67.80
    
    
    
    200,000
    
    
    $
    82,884,553December 1, 2007 to December 31, 2007
    
    
    275,458
    
    
    $
    67.67
    
    
    
    275,458
    
    
    $
    64,245,659Total
    
    
    475,639
    
    
    $
    67.72
    
    
    
    475,639
  14




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Item 6. Selected Financial Data.
  Year ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Consolidated Statements of Income DataRevenues
    
    $
    532,716
    
    
    $
    460,623
    
    
    $
    362,226
    
    
    $
    280,724
    
    
    $
    210,211Costs and expenses:Cost of services
    
    
    183,088
    
    
    
    164,022
    
    
    
    120,944
    
    
    
    91,469
    
    
    
    71,049Member relations and marketing
    
    
    150,032
    
    
    
    122,177
    
    
    
    93,657
    
    
    
    75,560
    
    
    
    55,306General and administrative
    
    
    71,984
    
    
    
    59,629
    
    
    
    40,295
    
    
    
    31,254
    
    
    
    21,666Depreciation and amortization
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,308
    
    
    
    6,782
    
    
    
    5,764Non-cash lease restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,210
    
    
    
    Total costs and expenses
    
    
    420,677
    
    
    
    356,209
    
    
    
    262,204
    
    
    
    210,275
    
    
    
    153,785Income from operations
    
    
    112,039
    
    
    
    104,414
    
    
    
    100,022
    
    
    
    70,449
    
    
    
    56,426Other income, net
    
    
    16,049
    
    
    
    24,318
    
    
    
    13,588
    
    
    
    9,936
    
    
    
    7,569Income before provision for income taxes
    
    
    128,088
    
    
    
    128,732
    
    
    
    113,610
    
    
    
    80,385
    
    
    
    63,995Provision for income taxes
    
    
    47,501
    
    
    
    49,561
    
    
    
    38,550
    
    
    
    26,729
    
    
    
    28,307Net income
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060
    
    
    $
    53,656
    
    
    $
    35,688Earnings per sharebasic
    
    $
    2.20
    
    
    $
    1.99
    
    
    $
    1.90
    
    
    $
    1.40
    
    
    $
    0.96Weighted average shares outstandingbasic
    
    
    36,666
    
    
    
    39,712
    
    
    
    39,572
    
    
    
    38,344
    
    
    
    37,296Earnings per sharediluted
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.83
    
    
    $
    1.34
    
    
    $
    0.93Weighted average shares outstandingdiluted
    
    
    37,159
    
    
    
    40,721
    
    
    
    41,092
    
    
    
    39,925
    
    
    
    38,577Cash dividends declared per common share
    
    $
    1.60
    
    
    $
    1.20
    
    
    $
    0.40
    
    
    $
    0.30
    
    
    $
    
 December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(In thousands)Consolidated Balance Sheet DataCash, cash equivalents and marketable securities
    
    $
    144,356
    
    
    $
    487,287
    
    
    $
    544,636
    
    
    $
    416,977
    
    
    $
    293,919Deferred income taxes
    
    
    37,017
    
    
    
    28,005
    
    
    
    14,838
    
    
    
    29,587
    
    
    
    37,673Total assets
    
    
    544,772
    
    
    
    736,055
    
    
    
    726,995
    
    
    
    578,451
    
    
    
    423,482Deferred revenues
    
    
    323,395
    
    
    
    308,671
    
    
    
    261,300
    
    
    
    205,494
    
    
    
    154,844Total stockholders equity
    
    
    67,547
    
    
    
    317,865
    
    
    
    385,414
    
    
    
    327,461
    
    
    
    241,993
 December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Other Operating Data (Unaudited)Membership programs (1)
    
    
    48
    
    
    
    42
    
    
    
    37
    
    
    
    31
    
    
    
    26Member institutions
    
    
    4,711
    
    
    
    3,739
    
    
    
    2,831
    
    
    
    2,368
    
    
    
    2,143Total membership subscriptions
    
    
    16,349
    
    
    
    14,190
    
    
    
    10,825
    
    
    
    8,202
    
    
    
    6,414Average subscriptions per member
institution (cross-sell
ratio)(2)
    
    
    3.47
    
    
    
    3.80
    
    
    
    3.82
    
    
    
    3.46
    
    
    
    2.99Client renewal rate (3)
    
    
    90
    %
    
    
    92
    %
    
    
    92
    %
    
    
    91
    %
    
    
    90
    %Contract value (in thousands) (4)
    
    $
    526,386
    
    
    $
    475,653
    
    
    $
    381,366
    
    
    $
    294,949
    
    
    $
    227,913
 
 (1)
    
    In January 2008, we launched the HR Leadership Academy, bringing the current number of
membership programs to 49.(2)
    
    Excluding the impact of the middle market cross-sell ratio of 1.44, 1.1, and 1.0 in 2007,
2006 and 2005, respectively, the traditional large company cross-sell ratio was 4.03, 4.15 and
3.91 in 2007, 2006 and 2005, respectively.(3)
    
    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.(4)
    
    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. 15




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Business Overview
       16




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Critical Accounting Policies
  Revenue recognition
   Reserve for uncollectible revenue
  Income taxes
    17




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Goodwill and intangible assets, net
   Incentive compensation
  Share-based compensation
    18




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##### 



Results of Operations
  Year ended December 31,2007
    
    2006
    
    2005Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    34.4
    
    
    
    35.6
    
    
    
    33.4Gross profit
    
    
    65.6
    
    
    
    64.4
    
    
    
    66.6Costs and expenses:Member relations and marketing
    
    
    28.2
    
    
    
    26.5
    
    
    
    25.9General and administrative
    
    
    13.5
    
    
    
    12.9
    
    
    
    11.1Depreciation and amortization
    
    
    2.9
    
    
    
    2.3
    
    
    
    2.0Total costs and expenses
    
    
    44.6
    
    
    
    41.7
    
    
    
    39.0Income from operations
    
    
    21.0
    
    
    
    22.7
    
    
    
    27.6Other income, net
    
    
    3.0
    
    
    
    5.3
    
    
    
    3.8Income before provision for income taxes
    
    
    24.0
    
    
    
    27.9
    
    
    
    31.4Provision for income taxes
    
    
    8.9
    
    
    
    10.8
    
    
    
    10.6Net income
    
    
    15.1
    %
    
    
    17.2
    %
    
    
    20.7
    %
 Years ended December 31, 2005, 2006 and 2007
 Revenues.
 Cost of services.
 19




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##### 



Gross profit.
 Member relations and marketing.
 General and administrative.
 Depreciation and amortization.
 20




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##### 



Other income, net.
 Provision for income taxes.
 Impact of acquisitions.
  Liquidity and Capital Resources
   Cash flows from operating activities.
 21




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##### 



Cash flows from investing activities.
 Cash flows from financing activities.
  Contractual obligations
  22




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##### 



Payments Due by Period (in thousands)Total
    
    <1 Year
    
    1 - 3 Years
    
    4 - 5 Years
    
    >5 YearsOperating lease obligations
    
    $
    589,354
    
    
    $
    34,904
    
    
    $
    67,165
    
    
    $
    65,614
    
    
    $
    421,671General construction of Arlington, Virginia office
    
    $
    12,246
    
    
    $
    12,246Other liabilities (1)
    
    $
    11,925
    
    
    $
    683
    
    
    $
    1,159
    
    
    $
    460
    
    
    $
    9,623
 
 (1)
    
    Other liabilities include elective deferrals and earnings under the deferred compensation
plan.  Off-Balance Sheet Arrangements
  23




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##### 



Recent Accounting Pronouncements
  Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
   FairValue2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    12/31/07Marketable securities
    
    $
    24,040
    
    
    $
    26,605
    
    
    $
    18,545
    
    
    $
    9,845
    
    
    $
    3,700
    
    
    $
    10,550
    
    
    $
    93,285
    
    
    $
    96,771Average effective interest rate
    
    
    3.88
    %
    
    
    3.67
    %
    
    
    3.94
    %
    
    
    4.24
    %
    
    
    4.25
    %
    
    
    4.66
    %
 Foreign currency exchange rate risk
  24




---



##### 



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 29, 2008/s/ Timothy R. YostTimothy R. YostChief Financial OfficerFebruary 29, 2008
 25




---



##### 



Report of Independent Registered Public Accounting Firm
 
     .
   
 26




---



##### 



Report of Independent Registered Public Accounting Firm
 
       
 27




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    47,585
    
    
    $
    171,367Marketable securities
    
    
    24,153
    
    
    
    119,534Membership fees receivable, net
    
    
    161,336
    
    
    
    153,107Deferred income taxes, net
    
    
    12,710
    
    
    
    15,109Deferred incentive compensation
    
    
    15,544
    
    
    
    13,160Prepaid expenses and other current assets
    
    
    10,638
    
    
    
    9,881Total current assets
    
    
    271,966
    
    
    
    482,158Deferred income taxes, net
    
    
    24,307
    
    
    
    12,896Marketable securities
    
    
    72,618
    
    
    
    196,386Property and equipment, net
    
    
    91,904
    
    
    
    26,988Goodwill
    
    
    42,626
    
    
    
    6,364Intangible assets, net
    
    
    22,143
    
    
    
    1,462Other non-current assets
    
    
    19,208
    
    
    
    9,801Total assets
    
    $
    544,772
    
    
    $
    736,055LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    62,681
    
    
    $
    66,773Accrued incentive compensation
    
    
    31,355
    
    
    
    25,062Deferred revenues
    
    
    323,395
    
    
    
    308,671Total current liabilities
    
    
    417,431
    
    
    
    400,506Other liabilities
    
    
    59,794
    
    
    
    17,684Total liabilities
    
    
    477,225
    
    
    
    418,190Commitments and contingenciesStockholders equity:Common stock, par value $0.01; 100,000,000 shares authorized; 43,119,512 and 42,805,325 shares
issued at December 31, 2007 and 2006, respectively; 34,993,581 and 38,947,908 shares outstanding
at December 31, 2007 and 2006, respectively
    
    
    431
    
    
    
    428Additional paid-in-capital
    
    
    383,636
    
    
    
    353,990Retained earnings
    
    
    269,429
    
    
    
    246,668Accumulated elements of other comprehensive (loss) income
    
    
    (194
    )
    
    
    (440
    )Treasury stock, at cost, 8,125,931 and 3,857,417 shares at December 31, 2007 and 2006, respectively
    
    
    (585,755
    )
    
    
    (282,781
    )Total stockholders equity
    
    
    67,547
    
    
    
    317,865Total liabilities and stockholders equity
    
    $
    544,772
    
    
    $
    736,055
  28




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share amounts)
 Year ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    532,716
    
    
    $
    460,623
    
    
    $
    362,226Cost of services (1)
    
    
    183,088
    
    
    
    164,022
    
    
    
    120,944Gross profit
    
    
    349,628
    
    
    
    296,601
    
    
    
    241,282Costs and expenses:Member relations and marketing (1)
    
    
    150,032
    
    
    
    122,177
    
    
    
    93,657General and administrative (1)
    
    
    71,984
    
    
    
    59,629
    
    
    
    40,295Depreciation and amortization
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,308Total costs and expenses
    
    
    237,589
    
    
    
    192,187
    
    
    
    141,260Income from operations
    
    
    112,039
    
    
    
    104,414
    
    
    
    100,022Other income, net
    
    
    16,049
    
    
    
    24,318
    
    
    
    13,588Income before provision for income taxes
    
    
    128,088
    
    
    
    128,732
    
    
    
    113,610Provision for income taxes
    
    
    47,501
    
    
    
    49,561
    
    
    
    38,550Net income
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060Earnings per share:Basic
    
    $
    2.20
    
    
    $
    1.99
    
    
    $
    1.90Diluted
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.83Dividends per share
    
    $
    1.60
    
    
    $
    1.20
    
    
    $
    0.40Weighted average shares used in the calculation
of earnings per share:Basic
    
    
    36,666
    
    
    
    39,712
    
    
    
    39,572Diluted
    
    
    37,159
    
    
    
    40,721
    
    
    
    41,092
 
 (1)
    
    The following table summarizes the share-based compensation recognized in accordance with
Statement of Financial Accounting Standards 123(R) included in the consolidated statements of
income above: Cost of services
    
    $
    10,852
    
    
    $
    12,236
    
    
    $
    Member relations and marketing
    
    
    4,782
    
    
    
    5,644
    
    
    
    General and administrative
    
    
    7,130
    
    
    
    7,426
    
    
    
    
  29




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year ended December 31,2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,305(Gain) loss on sale of investments
    
    
    (142
    )
    
    
    
    
    
    
    2,320Deferred income taxes
    
    
    (10,781
    )
    
    
    34,139
    
    
    
    30,801Share-based compensation
    
    
    22,764
    
    
    
    25,306
    
    
    
    Excess tax benefits from share-based compensation arrangements
    
    
    (2,398
    )
    
    
    (41,225
    )
    
    
    Amortization
of marketable securities (discounts) premiums, net
    
    
    (449
    )
    
    
    (2,389
    )
    
    
    1,865Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    (6,688
    )
    
    
    (32,865
    )
    
    
    (23,055
    )Deferred incentive compensation
    
    
    (2,384
    )
    
    
    (1,671
    )
    
    
    (2,212
    )Prepaid expenses and other current assets
    
    
    (645
    )
    
    
    (2,210
    )
    
    
    327Other non-current assets
    
    
    (5,578
    )
    
    
    (8,564
    )
    
    
    (1,238
    )Accounts payable and accrued liabilities
    
    
    (11,739
    )
    
    
    23,933
    
    
    
    25,041Accrued incentive compensation
    
    
    6,293
    
    
    
    (1,983
    )
    
    
    8,894Deferred revenues
    
    
    14,724
    
    
    
    47,371
    
    
    
    55,252Other liabilities
    
    
    10,904
    
    
    
    6,877
    
    
    
    1,109Net cash flows provided by operating activities
    
    
    110,041
    
    
    
    136,271
    
    
    
    181,469Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (34,532
    )
    
    
    (17,743
    )
    
    
    (8,703
    )Cost method investment
    
    
    (3,829
    )
    
    
    
    
    
    
    Acquisition of businesses, net of cash acquired
    
    
    (61,593
    )
    
    
    
    
    
    
    (8,136
    )Purchases of marketable securities
    
    
    (108,801
    )
    
    
    (196,920
    )
    
    
    Sales and maturities of marketable securities
    
    
    330,556
    
    
    
    2,635
    
    
    
    176,384Net cash flows provided by (used in) investing activities
    
    
    121,801
    
    
    
    (212,028
    )
    
    
    159,545Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    691
    
    
    
    2,979
    
    
    
    45,135Proceeds from issuance of common stock under the employee stock purchase plan
    
    
    2,087
    
    
    
    2,024
    
    
    
    1,407Excess tax benefits from share-based compensation arrangements
    
    
    2,398
    
    
    
    41,225
    
    
    
    Purchase of treasury shares
    
    
    (302,974
    )
    
    
    (175,985
    )
    
    
    (61,489
    )Payment of dividends
    
    
    (57,826
    )
    
    
    (47,395
    )
    
    
    (15,787
    )Net cash flows used in financing activities
    
    
    (355,624
    )
    
    
    (177,152
    )
    
    
    (30,734
    )Net
(decrease) increase in cash and cash equivalents
    
    
    (123,782
    )
    
    
    (252,909
    )
    
    
    310,280Cash and cash equivalents, beginning of year
    
    
    171,367
    
    
    
    424,276
    
    
    
    113,996Cash and cash equivalents, end of year
    
    $
    47,585
    
    
    $
    171,367
    
    
    $
    424,276
  30




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Years ended December 31, 2005, 2006, and 2007
(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, 2004
    
    
    38,930,648
    
    
    $
    399
    
    
    $
    214,987
    
    
    $
    155,619
    
    
    $
    1,763
    
    
    $
    (45,307
    )
    
    $
    327,461
    
    
    $
    Issuance 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 common
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
    
    
    $
    73,173Issuance of common stock
upon the exercise of
common stock options
    
    
    1,378,917
    
    
    
    14
    
    
    
    2,965
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,979
    
    
    
    Issuance of common stock
under the employee stock
purchase plan
    
    
    26,875
    
    
    
    
    
    
    
    2,024
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    25,465
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,465
    
    
    
    Tax benefits related to
the exercise of common
stock options
    
    
    
    
    
    
    
    
    
    
    46,508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,508
    
    
    
    Purchase of treasury
stock at cost
    
    
    (1,940,611
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (175,985
    )
    
    
    (175,985
    )
    
    
    Unrealized losses on
available-for-sale
marketable securities,
net of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (316
    )
    
    
    
    
    
    
    (316
    )
    
    
    (316
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,395
    )
    
    
    
    
    
    
    
    
    
    
    (47,395
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,171
    
    
    
    
    
    
    
    
    
    
    
    79,171
    
    
    
    79,171Balance at December 31, 2006
    
    
    38,947,908
    
    
    $
    428
    
    
    $
    353,990
    
    
    $
    246,668
    
    
    $
    (440
    )
    
    $
    (282,781
    )
    
    $
    317,865
    
    
    $
    78,855Issuance of common stock
upon the exercise of
common stock options and
release of restricted
stock units
    
    
    280,510
    
    
    
    3
    
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    688
    
    
    
    Issuance of common stock
under the employee stock
purchase plan
    
    
    33,677
    
    
    
    
    
    
    
    2,087
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,087
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    22,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,764
    
    
    
    Tax benefits related to
the exercise of common
stock options
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    Purchase of treasury
stock at cost
    
    
    (4,268,514
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (302,974
    )
    
    
    (302,974
    )
    
    
    Unrealized gains on
available-for-sale
marketable securities,
net of tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,312
    
    
    
    
    
    
    
    1,312
    
    
    
    1,312Foreign currency hedge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,066
    )
    
    
    
    
    
    
    (1,066
    )
    
    
    (1,066
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,826
    )
    
    
    
    
    
    
    
    
    
    
    (57,826
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,587
    
    
    
    
    
    
    
    
    
    
    
    80,587
    
    
    
    80,587Balance at December 31, 2007
    
    
    34,993,581
    
    
    $
    431
    
    
    $
    383,636
    
    
    $
    269,429
    
    
    $
    (194
    )
    
    $
    (585,755
    )
    
    $
    67,547
    
    
    $
    80,833
  31




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Description of operations
   2. Summary of significant accounting policies
 Basis of presentation
  Use of estimates in preparation of financial statements
   Foreign currency
  Cash equivalents and marketable securities
  32




---



##### 



Allowance for doubtful accounts
  Property and equipment
  Goodwill
  Intangible assets, net
   Recovery of long-lived assets
  Fair value of financial instruments
  Revenue recognition
  33




---



##### 



Incentive Compensation
  Share-based compensation
    Research and development costs
  Income taxes
   34




---



##### 



Concentration of credit risk and sources of revenues
     Comprehensive income
  Earnings per share
  35




---



##### 



Year ended December 31,2007
    
    
    2006
    
    
    2005Basic weighted average common shares outstanding
    
    
    36,666
    
    
    
    39,712
    
    
    
    39,572Effect of dilutive common shares outstanding
    
    
    493
    
    
    
    1,009
    
    
    
    1,520Diluted weighted average common shares outstanding
    
    
    37,159
    
    
    
    40,721
    
    
    
    41,092
  3. Recent accounting pronouncements
     4. Acquisitions
  36




---



##### 



Net working capital
    
    $
    1,547Property and equipment
    
    
    600Intangible assets
    
    
    20,294Goodwill
    
    
    35,916Allocated purchase price
    
    $
    58,357
   5. Marketable securities
  December 31, 2007Gross
    
    
    GrossMarket
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes and bonds
    
    $
    57,033
    
    
    $
    56,641
    
    
    $
    392
    
    
    $
    Washington, D.C. tax exempt notes and bonds
    
    
    39,738
    
    
    
    38,694
    
    
    
    1,044
    
    
    
    Total marketable securities
    
    $
    96,771
    
    
    $
    95,335
    
    
    $
    1,436
    
    
    $
    
 December 31, 2006Gross
    
    
    GrossMarket
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes and bonds
    
    $
    272,160
    
    
    $
    273,853
    
    
    $
    1
    
    
    $
    1,694Washington, D.C. tax exempt notes and bonds
    
    
    43,760
    
    
    
    42,788
    
    
    
    973
    
    
    
    1Total marketable securities
    
    $
    315,920
    
    
    $
    316,641
    
    
    $
    974
    
    
    $
    1,695
  December 31, 2007Fair Market
    
    
    AmortizedValue
    
    
    CostLess than one year
    
    $
    24,153
    
    
    $
    24,093Matures in 1 to 5 years
    
    
    61,382
    
    
    
    60,333Matures in 6 to 10 years
    
    
    11,236
    
    
    
    10,909Matures after 10 years
    
    
    
    
    
    
    Total marketable securities
    
    $
    96,771
    
    
    $
    95,335
 37




---



##### 



6. Membership fees receivable
  December 31,2007
    
    
    2006Billed
    
    $
    117,738
    
    
    $
    119,022Unbilled
    
    
    45,346
    
    
    
    35,240163,084
    
    
    
    154,262Reserve for uncollectible revenue
    
    
    (1,748
    )
    
    
    (1,155
    )Membership fees receivable, net
    
    $
    161,336
    
    
    $
    153,107
 7. Property and equipment
  December 31,2007
    
    
    2006Furniture, fixtures, and equipment
    
    $
    31,815
    
    
    $
    14,574Software and Web site development costs
    
    
    14,752
    
    
    
    13,710Leasehold improvements
    
    
    72,741
    
    
    
    16,459119,308
    
    
    
    44,743Accumulated depreciation
    
    
    (27,404
    )
    
    
    (17,755
    )Property and equipment, net
    
    $
    91,904
    
    
    $
    26,988
  8. Accounts payable and accrued liabilities
  December 31,2007
    
    
    2006Accounts payable
    
    $
    11,319
    
    
    $
    8,021Advanced membership payments received
    
    
    14,197
    
    
    
    21,976Other accrued liabilities
    
    
    37,165
    
    
    
    36,776Accounts payable and accrued liabilities
    
    $
    62,681
    
    
    $
    66,773
 9. Other liabilities
  December 31,2007
    
    
    2006Deferred compensation
    
    $
    12,242
    
    
    $
    7,882Lease incentives
    
    
    31,201
    
    
    
    Deferred rent benefit  long term
    
    
    8,081
    
    
    
    4,592Accrued lease restructuring charges
    
    
    5,165
    
    
    
    5,210Deferred revenues  long term
    
    
    3,105
    
    
    
    Total other liabilities
    
    $
    59,794
    
    
    $
    17,684
 38




---



##### 



10.
Stockholders equity and share-based compensation
 Share-based compensation
      Equity incentive plans
  39




---



##### 



Valuation assumptions
   Year ended December 31,2007
    
    2006
    
    2005Risk-free interest rate
    
    
    4.47
    %
    
    
    4.80
    %
    
    
    4.29
    %Dividend yield
    
    
    2.01
    %
    
    
    1.29
    %
    
    
    0.6
    %Expected life of option (in years)
    
    
    4.8
    
    
    
    4.5
    
    
    
    4.4Expected volatility
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %Weighted-average fair value of share-based compensation awards granted
    
    $
    17.85
    
    
    $
    26.14
    
    
    $
    19.80
  Pro-forma information for periods prior to the adoption of FAS 123(R)
  Year endedDecember 31, 2005(In thousands, exceptper share amounts)Net income, as reported
    
    $
    75,060Deduct: Total share-based compensation expense
determined under fair value based methods for all
awards, net of related tax effects
    
    
    (16,759
    )Pro forma net income
    
    $
    58,301Earnings per share:Basic  as reported
    
    $
    1.90Basic  pro forma
    
    $
    1.47Diluted  as reported
    
    $
    1.83Diluted  pro forma
    
    $
    1.43
 40




---



##### 



Common stock options
  WeightedWeighted
    
    Average
    
    AggregateNumber
    
    Average
    
    Remaining
    
    Intrinsic Value2007
    
    of Options
    
    Exercise Price
    
    Contractual Term
    
    (in millions)Options outstanding, beginning of year
    
    
    2,942,132
    
    
    $
    50.63
    
    
    
    5.13
    
    
    $
    109.1Options granted
    
    
    
    
    
    
    Options cancelled
    
    
    (149,250
    )
    
    
    56.92Options exercised
    
    
    (593,929
    )
    
    
    39.20Options outstanding, end of year
    
    
    2,198,953
    
    
    $
    53.28
    
    
    
    4.10
    
    
    $
    15.0Options vested and expected to vest at end of year
    
    
    2,151,328
    
    
    $
    53.13
    
    
    
    4.10
    
    
    $
    15.0Options exercisable, end of year
    
    
    1,338,954
    
    
    $
    48.66
    
    
    
    4.20
    
    
    $
    15.3
 WeightedWeighted
    
    Average
    
    AggregateNumber
    
    Average
    
    Remaining
    
    Intrinsic Value2006
    
    of Options
    
    Exercise Price
    
    Contractual Term
    
    (in millions)Options outstanding, beginning of year
    
    
    5,271,183
    
    
    $
    44.96
    
    
    
    6.14Options granted
    
    
    
    
    
    
    Options cancelled
    
    
    (152,262
    )
    
    
    54.62Options exercised
    
    
    (2,176,789
    )
    
    
    36.71Options outstanding, end of year
    
    
    2,942,132
    
    
    $
    50.63
    
    
    
    5.13
    
    
    $
    109.1Options vested and expected to vest at end of year
    
    
    2,849,979
    
    
    $
    50.39
    
    
    
    5.13
    
    
    $
    106.3Options exercisable, end of year
    
    
    881,508
    
    
    $
    44.15
    
    
    
    5.17
    
    
    $
    38.4
  2005WeightedNumber of
    
    
    AverageOptions
    
    
    Exercise PriceOptions 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
 41




---



##### 



Options Outstanding
    
    
    Options ExercisableWeightedWeighted
    
    
    Average
    
    
    
    
    
    
    WeightedNumber Outstanding
    
    
    Average
    
    
    Remaining
    
    
    Number Exercisable
    
    
    Averageat
    
    
    Exercise
    
    
    Contractual
    
    
    at
    
    
    ExerciseRange of Exercise Prices
    
    December 31, 2007
    
    
    Price
    
    
    Life-Years
    
    
    December 31, 2007
    
    
    Price$  7.12  $32.30
    
    
    365,217
    
    
    $
    31.11
    
    
    
    4.82
    
    
    
    362,217
    
    
    $
    31.1032.41    45.10
    
    
    678,870
    
    
    
    43.98
    
    
    
    3.31
    
    
    
    420,496
    
    
    
    43.3646.45    64.88
    
    
    1,022,241
    
    
    
    63.20
    
    
    
    4.27
    
    
    
    502,616
    
    
    
    61.9365.68    89.70
    
    
    132,625
    
    
    
    85.42
    
    
    
    4.88
    
    
    
    53,625
    
    
    
    84.49$  7.12  $89.70
    
    
    2,198,953
    
    
    $
    53.28
    
    
    
    4.10
    
    
    
    1,338,954
    
    
    $
    48.66
 Stock appreciation rights
  Number ofStock
    
    
    Weighted
    
    
    Weighted Average
    
    
    AggregateAppreciation
    
    
    Average
    
    
    Remaining
    
    
    Intrinsic Value2007
    
    Rights
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (in millions)Stock appreciation rights outstanding, beginning of year
    
    
    614,145
    
    
    $
    97.36
    
    
    
    6.20
    
    
    $
    Stock appreciation rights granted
    
    
    840,486
    
    
    
    74.48
    
    
    
    6.28Stock appreciation rights cancelled
    
    
    (161,312
    )
    
    
    86.67Stock appreciation rights exercised
    
    
    
    
    
    
    Stock appreciation rights outstanding, end of year
    
    
    1,293,319
    
    
    $
    83.82
    
    
    
    5.85
    
    
    $
    Stock appreciation rights vested and expected to vest
at end of year
    
    
    1,171,169
    
    
    $
    84.13
    
    
    
    5.83
    
    
    $
    Stock appreciation rights exercisable, end of year
    
    
    134,292
    
    
    $
    97.52
    
    
    
    5.20
    
    
    $
    
 42




---



##### 



Number ofStock
    
    
    Weighted
    
    
    Weighted Average
    
    
    AggregateAppreciation
    
    
    Average
    
    
    Remaining
    
    
    Intrinsic Value2006
    
    Rights
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (in millions)Stock appreciation rights outstanding, beginning of year
    
    
    
    
    
    $
    Stock appreciation rights granted
    
    
    628,150
    
    
    
    97.36
    
    
    
    6.20Stock appreciation rights cancelled
    
    
    (14,005
    )
    
    
    97.56Stock appreciation rights exercised
    
    
    
    
    
    
    Stock appreciation rights outstanding, end of year
    
    
    614,145
    
    
    $
    97.36
    
    
    
    6.20
    
    
    $
    Stock appreciation rights vested and expected to vest
at end of year
    
    
    579,386
    
    
    $
    97.36
    
    
    
    6.20
    
    
    $
    Stock appreciation rights exercisable, end of year
    
    
    
    
    
    $
    
   WeightedWeighted
    
    
    Average
    
    
    
    
    
    
    WeightedNumber Outstanding
    
    
    Average
    
    
    Remaining
    
    
    Number Exercisable
    
    
    Averageat
    
    
    Exercise
    
    
    Contractual
    
    
    at
    
    
    ExerciseRange of Exercise Prices
    
    December 31, 2007
    
    
    Price
    
    
    Life-Years
    
    
    December 31, 2007
    
    
    Price$66.60  $  76.00
    
    
    753,361
    
    
    $
    74.13
    
    
    
    6.29
    
    
    
    
    
    
    $
    86.49    103.97
    
    
    539,958
    
    
    
    97.34
    
    
    
    5.22
    
    
    
    134,292
    
    
    
    97.52$66.60  $103.97
    
    
    1,293,319
    
    
    $
    83.82
    
    
    
    5.85
    
    
    
    134,292
    
    
    $
    97.52
 Restricted stock units
  Number
    
    
    Weighted Averageof Restricted
    
    
    Remaining2007
    
    Stock Units
    
    
    TermRestricted stock units outstanding, beginning of year
    
    
    60,123
    
    
    
    3.20Restricted stock units granted
    
    
    73,529
    
    
    
    3.18Restricted stock units cancelled
    
    
    (17,499
    )Restricted stock units vested
    
    
    (14,885
    )Restricted stock units outstanding, end of year
    
    
    101,268
    
    
    
    2.79Restricted stock units vested and expected to vest at end of year
    
    
    90,128
    
    
    
    2.79
 Number
    
    
    Weighted Averageof Restricted
    
    
    Remaining2006
    
    Stock Units
    
    
    TermRestricted stock units outstanding, beginning of year
    
    
    Restricted stock units granted
    
    
    60,661
    
    
    
    3.20Restricted stock units cancelled
    
    
    (538
    )Restricted stock units vested
    
    
    Restricted stock units outstanding, end of year
    
    
    60,123
    
    
    
    3.20Restricted stock units vested and expected to vest at end of year
    
    
    55,952
    
    
    
    3.20
 43




---



##### 



Share Repurchases
  Dividends
  Preferred stock
  11. Lease restructuring costs
  12. Income taxes
  Year ended December 31,2007
    
    
    2006
    
    
    2005Current tax expense
    
    $
    57,351
    
    
    $
    62,728
    
    
    $
    23,801Deferred tax (benefit) expense
    
    
    (9,850
    )
    
    
    (13,167
    )
    
    
    14,749Provision for income taxes
    
    $
    47,501
    
    
    $
    49,561
    
    
    $
    38,550
 44




---



##### 



Year ended December 31,2007
    
    
    2006
    
    
    2005Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    3.3
    
    
    
    3.9
    
    
    
    Foreign income tax
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Permanent differences and credits, net
    
    
    (1.1
    )
    
    
    (0.4
    )
    
    
    (1.0
    )Effective tax rate
    
    
    37.1
    %
    
    
    38.5
    %
    
    
    33.9
    %
  December 31,2007
    
    
    2006Deferred tax assets:Share-based compensation
    
    $
    14,075
    
    
    $
    8,493Accrued incentive compensation
    
    
    9,196
    
    
    
    7,533Tax credit carry forwards
    
    
    8,529
    
    
    
    9,317Depreciation
    
    
    5,542
    
    
    
    3,178Deferred compensation plan
    
    
    4,739
    
    
    
    3,066Deferred revenue
    
    
    3,906
    
    
    
    3,514Non-cash lease incentive
    
    
    2,469
    
    
    
    2,417Operating leases
    
    
    2,036
    
    
    
    650Other
    
    
    2,095
    
    
    
    1,382Total deferred tax assets
    
    
    52,587
    
    
    
    39,550Valuation allowance
    
    
    (7,878
    )
    
    
    (5,821
    )Total deferred tax assets, net of valuation allowance
    
    
    44,709
    
    
    
    33,729Deferred tax liabilities:Deferred incentive compensation
    
    
    6,177
    
    
    
    5,119Other
    
    
    1,515
    
    
    
    605Total deferred tax liabilities
    
    
    7,692
    
    
    
    5,724Deferred tax assets, net
    
    $
    37,017
    
    
    $
    28,005
 45




---



##### 



Balance at January 1, 2007
    
    $
    900Additions based on tax positions related to the current year
    
    
    Additions for tax positions of prior years
    
    
    Reductions for tax positions of prior years
    
    
    Reductions for lapse of statute of limitations
    
    
    Settlements
    
    
    Balance at December 31, 2007
    
    $
    900
  46




---



##### 



13. Employee benefit plans
 Defined contribution 401(k) plan
  Employee stock purchase plan
  Deferred compensation plan
  14. Sales of common stock
  15. Commitments and contingencies
 Operating leases
  47




---



##### 



Year ended December 31,2008
    
    $
    34,9042009
    
    
    33,7522010
    
    
    33,4132011
    
    
    32,9702012
    
    
    32,644Thereafter
    
    
    421,671Total
    
    $
    589,354
      48




---



##### 



16. Quarterly financial data (unaudited)
  2007 Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31Revenues
    
    $
    124,525
    
    
    $
    129,697
    
    
    $
    136,288
    
    
    $
    142,206Gross profit
    
    
    79,849
    
    
    
    82,433
    
    
    
    90,688
    
    
    
    96,658Income before provision for income taxes
    
    
    31,495
    
    
    
    28,167
    
    
    
    34,784
    
    
    
    33,642Net income
    
    $
    19,370
    
    
    $
    17,323
    
    
    $
    21,392
    
    
    $
    22,502Earnings per share:Basic
    
    $
    0.50
    
    
    $
    0.47
    
    
    $
    0.60
    
    
    $
    0.64Diluted
    
    $
    0.50
    
    
    $
    0.46
    
    
    $
    0.59
    
    
    $
    0.63
 2006 Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31Revenues
    
    $
    105,069
    
    
    $
    111,662
    
    
    $
    118,390
    
    
    $
    125,502Gross profit
    
    
    67,609
    
    
    
    72,603
    
    
    
    75,633
    
    
    
    80,756Income before provision for income taxes
    
    
    27,835
    
    
    
    28,883
    
    
    
    34,328
    
    
    
    37,686Net income
    
    $
    17,119
    
    
    $
    17,763
    
    
    $
    21,112
    
    
    $
    23,177Earnings per share:Basic
    
    $
    0.43
    
    
    $
    0.44
    
    
    $
    0.53
    
    
    $
    0.59Diluted
    
    $
    0.42
    
    
    $
    0.43
    
    
    $
    0.52
    
    
    $
    0.58
 17. Subsequent events
 Dividends
  Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  Item 9A. Controls and Procedures.
    49




---



##### 



Item 9B. Other Information.
  PART III
 Item 10. Directors, Executive Officers and Corporate Governance.
  Item 11. Executive Compensation.
  Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  Item 13. Certain Relationships and Related Transactions, and Director Independence.
  Item 14. Principal Accounting Fees and Services.
  50




---



##### 



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 in Item 8 hereof:Report of Managements Assessment of Internal Control over Financial Reporting,Reports of Independent Registered Public Accounting Firm,Consolidated Balance Sheets at December 31, 2007 and 2006,Consolidated Statements of Income for the years ended December 31, 2007, 2006 and 2005,Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005,Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2007,
2006 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.
 51




---



##### 



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, effective 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. ì 10.11
    
    2004 Stock Incentive Plan, as amended June 14, 2007. 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
    
    The Corporate Executive Board Deferred Compensation Plan, as amended January 1, 2006.****10.18
    
    Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan and form of Term
Sheet for Restricted Stock Units. ####10.19
    
    Standard Terms and Conditions for Non-Qualified Stock Options and Stock Appreciation Rights under the 1999
Stock Option Plan, 2001 Stock Option Plan, 2002 Non-Executive Stock Incentive Plan and the 2004 Stock
Incentive Plan and form of Term Sheet for Stock Appreciation Rights. #####
 52




---



##### 



ExhibitNo.
    
    Description of Exhibit10.20
    
    Employment Agreement, dated May 19, 2006, between The Corporate Executive Board Company and Thomas L.
Monahan III. +10.21
    
    Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities,
Non-Competition, Non-Solicitation and Work Product, dated August 20, 1997, between the Companys
predecessor and Thomas L. Monahan III. ++10.22
    
    Employment Agreement, dated July 25, 2006, between The Corporate Executive Board Company and James J.
McGonigle relating to employment, board service, non-competition and related matters. +++10.23
    
    Amendments to the 2004 Stock Incentive Plan, 2002 Non-Executive Stock Incentive Plan, 2001 Stock Option
Plan, 1999 Stock Option Plan, Employee Stock Purchase Plan and Directors Stock Plan, adopted December
22, 2006. ++++10.24
    
    2007 Chief Executive Officer Incentive Plan Summary. +++++10.25
    
    Executive Committee Incentive Plan Summary. 10.26
    
    Collaboration Agreement, dated February 6, 2007, with The Advisory Board Company (Confidential treatment
has been requested for portions of this agreement.) 10.27
    
    Severance Agreement, dated July 30, 2004, between The Corporate Executive Board and Glenn Tobin. 10.28
    
    Form of Employer Protection Agreement. 10.29
    
    Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan. 10.30
    
    Form of Indemnity Agreement between The Corporate Executive Board Company and its directors and officers.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.
 
 *
    
    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 10.3 from the Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2006.#
    
    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). 53




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##### 



###
    
    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.####
    
    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 March 31, 2006.#####
    
    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 March 31, 2006.+
    
    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 26,
2006.++
    
    Incorporated by reference to Exhibit 10.2 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 26,
2006.+++
    
    Incorporated by reference to Exhibit 10.3 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 26,
2006.++++
    
    Incorporated by reference to Exhibit 10.23 from the Annual Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended December 31, 2006.+++++
    
    Incorporated by reference to Exhibit 10.24 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.25 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.26 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.27 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.28 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.29 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.±
    
    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.ì
    
    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.
    
    Compensation arrangement. 54




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##### 



Report of Independent Registered Public Accounting Firm
    
 55




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##### 



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, 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
    
    
    $
    4,179Year ended December 31, 2006Reserve for uncollectible revenue
    
    $
    1,035
    
    
    $
    5,695
    
    
    $
    
    
    
    $
    5,575
    
    
    $
    1,155Valuation allowance on deferred tax assets
    
    
    3,144
    
    
    
    
    
    
    
    2,677
    
    
    
    
    
    
    
    5,821$
    4,179
    
    
    $
    5,695
    
    
    $
    2,677
    
    
    $
    5,575
    
    
    $
    6,976Year ended December 31, 2007Reserve for uncollectible revenue
    
    $
    1,155
    
    
    $
    8,560
    
    
    $
    
    
    
    $
    7,967
    
    
    $
    1,748Valuation allowance on deferred tax assets
    
    
    5,821
    
    
    
    
    
    
    
    2,057
    
    
    
    
    
    
    
    7,878$
    6,976
    
    
    $
    8,560
    
    
    $
    2,057
    
    
    $
    7,967
    
    
    $
    9,626
 56




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##### 



Signatures
  The Corporate Executive Board CompanyBy:
    
    /s/ Thomas L. Monahan IIIThomas L. Monahan IIIChairman of the Board of Directors and Chief Executive Officer
  Signature
    
    Title/s/ Thomas L. Monahan III

Thomas L. Monahan III
    
    Chairman of the Board of Directors and Chief Executive Officer (Principal
Executive Officer)/s/ Timothy R. Yost
Timothy R. Yost
    
    Chief Financial Officer (Principal Financial Officer and Principal Accounting
Officer)/s/ Gregor S. Bailar
Gregor S. Bailar
    
    Director/s/ Stephen M. Carter
    
    DirectorStephen M. Carter/s/ Gordon J. Coburn
    
    DirectorGordon J. Coburn/s/ Robert C. Hall
    
    DirectorRobert C. Hall/s/ Nancy J. Karch
    
    DirectorNancy J. Karch/s/ David W. Kenny
    
    DirectorDavid W. Kenny/s/ Daniel O. Leemon
    
    DirectorDaniel O. Leemon
 57




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##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description of Exhibit10.11
    
    2004 Stock Incentive Plan, as amended June 14, 2007.10.30
    
    Form of Indemnity Agreement between The Corporate Executive Board Company and its directors and officers.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.
 58