##### Table of Contents



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, 2009
 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
(State or other jurisdiction of 
incorporation or organization)
    
    52-2056410
(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
 Yes þ No o
 Yes o No þ
 þ o
 o o
 o
  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
   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.




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    8Item 1B. Unresolved Staff Comments
    
    
    13Item 2. Properties
    
    
    13Item 3. Legal Proceedings
    
    
    14Item 4. Submission of Matters to a Vote of Security Holders
    
    
    14PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    14Item 6. Selected Financial Data
    
    
    15Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 8. Financial Statements and Supplementary Data
    
    
    29Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    54Item 9A. Controls and Procedures
    
    
    54Item 9B. Other Information
    
    
    54PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    54Item 11. Executive Compensation
    
    
    55Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    55Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    55Item 14. Principal Accounting Fees and Services
    
    
    55PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    56Signatures
    
    
    61Exhibit IndexExhibit 10.20Exhibit 10.21Exhibit 10.22Exhibit 10.23Exhibit 10.24Exhibit 10.25Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




---



##### Table of Contents



Forward-looking Statements
   
 Item 1.
    
    Business.
 Our Company
   Our Products and Services
  
    
    Finance, Strategy, and Operations;
 
    
    Human Resources;
  3




---



##### Table of Contents




    
    Information Technology;
 
    
    Legal and Compliance; and
 
    
    Sales, Marketing, and Communications
   
    
    Best Practices Research and Solutions. We analyze and document corporate best practices
for significant and pressing issues that members confront. Through our proprietary research,
we identify key economic leverage points and isolate high return-on-investment solutions for
members to implement. We deliver this research through various channels, including
web-based resources, interactive workshops, live meetings, and published studies.
 
    
    Active Executive Network. We connect members to networks of peer executives and
professionals across industries and geographies. These networks operate through in-person
meetings and web- and email-based platforms. In 2009, these networks supported approximately
1,000 virtual events for more than 67,000 participants and 500 live meetings for more than 9,500 attendees worldwide.
 
    
    Proprietary Data Assets and Analytic Tools. We provide members with tools and analysis
that enable decision-making and improve performance. For example, our World Class
Performance diagnostic tool allows a member executive to understand how other executives
assess the performance of their own department. In 2009, we created more than 100 analytical
tools and more than 400 benchmarking data sets that helped business leaders save time and
deliver improved results in their daily workflows.
 
    
    Decision Support on Urgent Issues.We deliver decision support and advice to members on
time-sensitive issues. For example, in the fourth quarter of 2009, we conducted four global
teleconferences that addressed six enemies of post-recession performance in conjunction with
our second annual Executive Guidance publication. More than 2,000 global executives and
professionals participated in these teleconferences.
 
    
    Advisory Support.We deliver a proprietary on site executive education curriculum to
executives and their teams, supported through e-learning resources. In certain corporate
functions, such as HR, Finance, IT, and Legal, the curriculum is accredited to meet
professional continuing education requirements. In 2009, to provide a deeper and more
robust layer of support to business leaders, we invested in additional executive advisor
capacity to advise members on pressing business concerns.
 Our Business Strategy
  1.
    
    High Value Personal Engagement to Drive Large Company Member Loyalty.We are deepening
our relationships with executives and professionals who need solutions to challenging
business issues, especially during unusual market conditions. We have restructured our
North America sales and service model to establish integrated account teams focusing on
serving our large company members. We also added executive advisor capacity to deliver
more direct member impact. We believe
these service-oriented enhancements will further develop relationships with executives and
professionals, particularly at our large company members, and increase the value of the
member network. In 2010, while we continue to move toward full productivity in North
America, we will begin the roll out of the new sales and service model in Europe.
  4




---



##### Table of Contents



2.
    
    Global Investment in Our Strongest Brands.In 2009, we restructured our product
portfolio to focus on our strongest brands. As part of this effort, we reduced our product
portfolio by approximately 20%. We then redirected our resources toward strengthening the
remaining products and selling those with the greatest member impact and long-term value.
Through this resource allocation, we expanded our product offerings for government
agencies, we continued our investment in the middle market platform by expanding sales and
service capacities, and we established a foundation for expansion in Asia by growing our
Australia-based operations. In 2010, we will continue to invest globally in our strongest
brands with targeted investments and selective marketing efforts.
 3.
    
    Improve Member Experience Through Enhanced Technology and Analytics Platforms.Our
experience tells us that the quality and number of member interactions correlates strongly
with renewals and cross sales. Accordingly, we continue to invest in technology, including
Web enhancements, to more effectively match our key analytical tools to our members
pressing issues and routine workflow. In 2009, we implemented a new customer relationship
management information system, consolidated our employee analytics business onto an
improved platform, upgraded the Toolbox.com platform, and enhanced our news and data feed
platforms. These improvements have increased per institution user penetration and downloads over the prior year.
 In 2010, we intend to further enhance
our technology assets to provide a more personalized, interactive, and productive member
experience.
 4.
    
    Elevate Member Performance Through Product Innovation.We are launching renewable and
scalable products and services to support executive and business leader needs and further
enhance the support we provide to members. Execution of our business strategy also may
include the acquisition of companies that bring us capabilities and intellectual property
assets that target additional member needs and have the potential to extend our existing
core end markets and product offerings. In 2009, we launched two new offerings, SEC
Solutions and Government Finance Roundtable, and we acquired The Tower Group, Inc. (Tower
Group). We used our data assets to identify, evaluate, and communicate emerging insights
and solutions to over 200,000 business leaders through more than 40 programs. In 2010, we
plan to increase new product launch activity to leverage existing relationships, extend
current and develop new best-in-class data and analytics, and target high dollar problems
and recurring roles and work.
     5




---



##### Table of Contents



Our Pricing
    
    
    Performance Analytics delivers data and analytics to support improved performance of
executives and their teams. Some elements of the product set are available on a customized
fee basis.
 
    
    Leadership Academies provide access, for an annual per participant fee, to training and
development services that include skills diagnostic reports, learning portal access,
classroom-based development sessions, webinars, and virtual office hours with faculty.
 
    
    Toolbox.com provides knowledge on information technology, human resources, and finance
topics free of charge to users. Toolbox.com revenues principally are generated through
advertisements and lead generation campaigns posted to the online community portals.
 Our Competition
     6




---



##### Table of Contents



Our Employees
    Our Sales & Marketing Efforts
    Financial Information on Geographic Areas
  Corporate Information
    7




---



##### Table of Contents



Available Information
  
 Item 1A.
    
    Risk Factors.
 All of the following risks could materially and adversely affect our business, financial condition,
and results of operations. In addition to the risks discussed below and elsewhere in this Annual
Report on Form 10-K, other risks and uncertainties not currently known to us or that we currently
consider immaterial could, in the future, materially and adversely affect our business, financial
condition, and financial results.
 The ongoing uncertainty in the global economy and the financial markets could adversely impact our
business, results of operations, financial condition, and liquidity.
  We anticipate downward pressure on our operating margins in 2010.
  We may fail to attract new members to our programs, obtain renewals from existing members, or sell
additional programs to existing members.
   8




---



##### Table of Contents



We may experience difficulty collecting membership fees as a result of deteriorating operating
conditions at our member institutions resulting from current market conditions.
  If we do not retain members for the duration of their membership terms, we would suffer a loss of
future revenues due to our service guarantee.
  The ongoing uncertainty in the global economy and the financial markets could make it more
difficult for us to anticipate member needs and demands and provide relevant support and advice.
  Our restructuring plans may be unsuccessful or may have unanticipated negative results.
   9




---



##### Table of Contents



We may not compete successfully and, as a result, may experience reduced demand for our products
and services.
  Continued uncertainty, consolidation, business failures, and increased regulation in the financial
services industry may cause us to lose additional members.
  Our international operations involve financial, regulatory, and business risks that differ from or
are in addition to those faced by our U.S. operations.
  We are subject to foreign currency risk.
   10




---



##### Table of Contents



Our transition to an integrated account management model may be unsuccessful or may have
unanticipated negative results.
  Our acquisitions involve financial, operational, and human resources risks that differ from or are
in addition to those faced by our existing operations.
   We make estimates and assumptions in connection with the preparation of our consolidated financial
statements, and any changes to those estimates and assumptions could have a material adverse effect
on our results of operations.
  We may be subject to additional impairment losses due to potential declines in the fair value of
our assets.
    11




---



##### Table of Contents



We may be unable to attract and retain highly skilled management and employees.
  We may fail to implement, maintain, and upgrade our technology and information infrastructure
quickly enough to meet member needs and changing legal requirements.
  We may be unable to protect our intellectual property.
  We may be exposed to litigation related to the content we publish.
   12




---



##### Table of Contents



Unanticipated changes in our tax provision, the adoption of new U.S. tax legislation or exposure to
additional income and other tax liabilities could affect our profitability.
  We are exposed to interest rate fluctuations that could have a negative impact on our financial
results or condition.
  
 Item 1B.
    
    Unresolved Staff Comments.
  
 Item 2.
    
    Properties.
  Location
    
    Square feet
    
    
    Lease ExpirationArlington, Virginia
    
    
    625,000
    
    
    
    2028London, England
    
    
    79,000
    
    
    
    2018Chicago, Illinois
    
    
    52,000
    
    
    
    2018Gurgaon, India
    
    
    48,000
    
    
    
    2013San Francisco, California
    
    
    28,000
    
    
    
    2012Needham, Massachusetts
    
    
    20,000
    
    
    
    2010Rochester, New York
    
    
    13,000
    
    
    
    2013Scottsdale, Arizona
    
    
    9,000
    
    
    
    2014West Chester, Pennsylvania
    
    
    6,000
    
    
    
    2011Sydney, Australia
    
    
    7,600
    
    
    
    2013Toronto, Canada
    
    
    4,000
    
    
    
    2011
   13




---



##### Table of Contents



Item 3.
    
    Legal Proceedings.
  
 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.
 Market Information, Holders and Dividends
  High
    
    
    Low
    
    
    Dividends2009First quarter
    
    $
    23.59
    
    
    $
    12.35
    
    
    $
    0.44Second quarter
    
    
    21.69
    
    
    
    13.84
    
    
    
    0.10Third quarter
    
    
    27.18
    
    
    
    16.50
    
    
    
    0.10Fourth quarter
    
    
    26.83
    
    
    
    20.81
    
    
    
    0.102008First quarter
    
    $
    60.37
    
    
    $
    37.50
    
    
    $
    0.44Second quarter
    
    
    47.50
    
    
    
    38.15
    
    
    
    0.44Third quarter
    
    
    42.79
    
    
    
    30.06
    
    
    
    0.44Fourth quarter
    
    
    31.68
    
    
    
    18.79
    
    
    
    0.44
  Recent Sales of Unregistered Securities
  Issuer Purchases of Equity Securities
  Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plans
    
    
    Under the PlansOctober 1, 2009 to October 31, 2009 (1)
    
    
    236
    
    
    $
    24.72
    
    
    
    236
    
    
    $
    22,316,404November 1, 2009 to November 30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,316,404December 1, 2009 to December 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,316,404Total
    
    
    236
    
    
    
    
    
    
    
    236
    
    
    $
    22,316,404
 
 (1)
    
    Amounts relate to the effect of employees using common stock received from the exercise of
share-based awards to satisfy the statutory minimum federal and state withholding requirements
generated from the exercise of such awards. In effect, the Company repurchased, at fair market
value, a portion of the common stock received by employees upon exercise of their awards.  14




---



##### Table of Contents



Item 6.
    
    Selected Financial Data.
  Year ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per-share amounts)Consolidated Statements of Income DataRevenues
    
    $
    442,906
    
    
    $
    558,352
    
    
    $
    532,716
    
    
    $
    460,623
    
    
    $
    362,226Costs and expenses:Cost of services
    
    
    147,019
    
    
    
    179,950
    
    
    
    183,088
    
    
    
    164,022
    
    
    
    120,944Member relations and marketing
    
    
    126,023
    
    
    
    161,670
    
    
    
    150,032
    
    
    
    122,177
    
    
    
    93,657General and administrative
    
    
    59,415
    
    
    
    76,120
    
    
    
    71,984
    
    
    
    59,629
    
    
    
    40,295Depreciation and amortization
    
    
    22,991
    
    
    
    21,631
    
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,308Impairment loss
    
    
    
    
    
    
    27,449
    
    
    
    
    
    
    
    
    
    
    
    Costs associated with exit activities
    
    
    11,518
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    8,568
    
    
    
    8,006
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    375,534
    
    
    
    474,826
    
    
    
    420,677
    
    
    
    356,209
    
    
    
    262,204Income from operations
    
    
    67,372
    
    
    
    83,526
    
    
    
    112,039
    
    
    
    104,414
    
    
    
    100,022Other income (expense), net
    
    
    6,246
    
    
    
    (5,438
    )
    
    
    16,049
    
    
    
    24,318
    
    
    
    13,588Income before provision for income taxes
    
    
    73,618
    
    
    
    78,088
    
    
    
    128,088
    
    
    
    128,732
    
    
    
    113,610Provision for income taxes
    
    
    27,989
    
    
    
    33,291
    
    
    
    47,501
    
    
    
    49,561
    
    
    
    38,550Net income
    
    $
    45,629
    
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060Earnings per share-basic
    
    $
    1.34
    
    
    $
    1.31
    
    
    $
    2.20
    
    
    $
    1.99
    
    
    $
    1.90Weighted average shares outstanding-basic
    
    
    34,111
    
    
    
    34,205
    
    
    
    36,666
    
    
    
    39,712
    
    
    
    39,572Earnings per share-diluted
    
    $
    1.33
    
    
    $
    1.30
    
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.83Weighted average shares outstanding-diluted
    
    
    34,293
    
    
    
    34,329
    
    
    
    37,159
    
    
    
    40,721
    
    
    
    41,092Cash dividends declared per common share
    
    $
    0.74
    
    
    $
    1.76
    
    
    $
    1.60
    
    
    $
    1.20
    
    
    $
    0.40
 December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands)Consolidated Balance Sheet DataCash and cash equivalents and marketable securities
    
    $
    76,210
    
    
    $
    76,103
    
    
    $
    144,356
    
    
    $
    487,287
    
    
    $
    544,636Total assets
    
    
    423,195
    
    
    
    446,192
    
    
    
    544,772
    
    
    
    736,055
    
    
    
    726,995Deferred revenues
    
    
    222,053
    
    
    
    264,253
    
    
    
    323,395
    
    
    
    308,671
    
    
    
    261,300Total stockholders equity
    
    
    50,277
    
    
    
    22,609
    
    
    
    67,547
    
    
    
    317,865
    
    
    
    385,414
 December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Other Operating Data (Unaudited)Membership programs
    
    
    44
    
    
    
    52
    
    
    
    48
    
    
    
    42
    
    
    
    37Member institutions
    
    
    4,812
    
    
    
    5,114
    
    
    
    4,711
    
    
    
    3,739
    
    
    
    2,831Total membership subscriptions
    
    
    13,790
    
    
    
    15,747
    
    
    
    16,349
    
    
    
    14,190
    
    
    
    10,825Average subscriptions per member institution (1)
    
    
    2.87
    
    
    
    3.08
    
    
    
    3.47
    
    
    
    3.80
    
    
    
    3.82Client renewal rate (2)
    
    
    78
    %
    
    
    84
    %
    
    
    90
    %
    
    
    92
    %
    
    
    92
    %Contract value (in thousands) (3)
    
    $
    393,737
    
    
    $
    487,107
    
    
    $
    526,386
    
    
    $
    475,653
    
    
    $
    381,366Average subscription price
    
    $
    28,552
    
    
    $
    30,714
    
    
    $
    32,196
    
    
    $
    33,519
    
    
    $
    35,229
 
 (1)
    
    Also known as cross-sell ratio, represents the average across all subscription memberships,
including the traditional large company market average of 3.30, 3.63, 4.03, 4.15 and 3.91 and
the middle market average of 1.79, 1.58, 1.44, 1.1 and 1.0 in 2009, 2008, 2007, 2006 and 2005,
respectively.(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. The client renewal rate was 83% and 88% for our
traditional large company market and 70% and 71% for the middle market in 2009 and 2008,
respectively.(3)
    
    For the year then ended. Contract value (Contract Value) is defined as the aggregate
annualized revenues attributed to all agreements in effect at a given date without regard to
the remaining duration of any such agreement.  15




---



##### Table of Contents



Non-GAAP Financial Measures
    Year ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per-share amounts)EBITDA and Adjusted EBITDANet income
    
    $
    45,629
    
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060Interest income, net
    
    
    (1,787
    )
    
    
    (4,268
    )
    
    
    (14,937
    )
    
    
    (23,566
    )
    
    
    (13,588
    )Depreciation and amortization
    
    
    22,991
    
    
    
    21,631
    
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,308Provision for income taxes
    
    
    27,989
    
    
    
    33,291
    
    
    
    47,501
    
    
    
    49,561
    
    
    
    38,550EBITDA
    
    
    94,822
    
    
    
    95,451
    
    
    
    128,724
    
    
    
    115,547
    
    
    
    107,330Impairment loss
    
    
    
    
    
    
    27,449
    
    
    
    
    
    
    
    
    
    
    
    Costs associated with exit activities
    
    
    11,518
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    8,568
    
    
    
    8,006
    
    
    
    
    
    
    
    
    
    
    
    Shared-based compensation (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,370
    )Gain on acquisition
    
    
    (680
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjusted EBITDA
    
    $
    114,228
    
    
    $
    130,906
    
    
    $
    128,724
    
    
    $
    115,547
    
    
    $
    80,960Adjusted EBITDA margin
    
    
    25.8
    %
    
    
    23.4
    %
    
    
    24.2
    %
    
    
    25.1
    %
    
    
    22.4
    %Adjusted net incomeNet income
    
    $
    45,629
    
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060Adjustments, net of taxImpairment loss
    
    
    
    
    
    
    17,073
    
    
    
    
    
    
    
    
    
    
    
    Costs associated with exit activities
    
    
    7,141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    5,312
    
    
    
    4,804
    
    
    
    
    
    
    
    
    
    
    
    Shared-based compensation (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,422
    )Gain on acquisition
    
    
    (422
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjusted net income
    
    $
    57,660
    
    
    $
    66,674
    
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    57,638Non-GAAP earnings per diluted shareGAAP earnings per diluted share
    
    $
    1.33
    
    
    $
    1.30
    
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.83Adjustments, net of taxImpairment loss
    
    
    
    
    
    
    0.50
    
    
    
    
    
    
    
    
    
    
    
    Costs associated with exit activities
    
    
    0.20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    0.16
    
    
    
    0.14
    
    
    
    
    
    
    
    
    
    
    
    Shared-based compensation (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.42
    )Gain on acquisition
    
    
    (0.01
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-GAAP earnings per diluted share
    
    $
    1.68
    
    
    $
    1.94
    
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.41
 
 (1)
    
    We began recording share-based compensation expense beginning January 1, 2006 under the
appropriate accounting guidance. Accordingly, the effect of share-based compensation has been
reported above for comparative purposes.  16




---



##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
   Executive Overview
     17




---



##### Table of Contents



Critical Accounting Policies
  Revenue recognition
   Allowance for uncollectible revenue
   18




---



##### Table of Contents



Income taxes
   Goodwill and intangible assets
      19




---



##### Table of Contents



Long-lived assets, including intangibles
  Deferred incentive compensation
  Operating Leases
  Share-based compensation
  Results of Operations
   
    
    Cost of services, which represents the costs associated with the production and delivery
of our products and services, consisting of compensation, including share-based
compensation, for research personnel, in-house faculty, and product advisors; the
organization and delivery of membership meetings, seminars, and other events; ongoing
product development costs; production of published materials, costs of developing and
supporting our membership web platform and digital delivery of products and services; and
associated support services.
 
    
    Member relations and marketing, which represents the costs of acquiring new members and
the costs of account management, consisting of compensation, including sales incentives and
share-based compensation; travel; recruiting and training of personnel; sales and marketing
materials; and associated support services, as well as the costs of maintaining our customer
relationship management software (CRM).
  20




---



##### Table of Contents




    
    General and administrative, which represents the costs associated with the corporate and
administrative functions, including human resources and recruiting, finance and accounting,
legal, management information systems, facilities management, business development and
other. Costs include compensation, including share-based compensation; third-party
consulting and compliance expenses; and associated support services.
 
    
    Depreciation and amortization, consisting of depreciation of our property and equipment,
including leasehold improvements, furniture, fixtures and equipment, capitalized software
and Web site development costs and the amortization of intangible assets.
  Years ended December 31, 2009, 2008, and 2007
 Contract Value
    Revenues
     21




---



##### Table of Contents



Costs and expenses
  
    
    Share-based compensation decreased $1.8 million from 2008 to 2009 and $10.2 million from
2007 to 2008. The decrease in 2009 is primarily a result of a decrease in the fair value of
new share-based awards granted mainly as a result of declines in the trading price of our
common stock. The decrease in 2008 relates to the decrease in the fair value of new
share-based awards granted and an increase in our anticipated forfeiture rate. In 2008, we
increased our estimated forfeiture rate from 3% to 14%. The cumulative effect of the
change in estimate was a reduction in compensation expense of $2.9 million.
 
    
    Facilities expense decreased $9.6 million from 2008 to 2009. The decrease in 2009 is
primarily due to subleases of a portion of our headquarters and the consolidation of the
Washington, D.C. office locations into our new headquarters in the first quarter of 2008.
In 2008, we also recorded $6.0 million of moving-related costs, including $3.0 million
associated with overlapping office leases in conjunction with the move to our new
headquarters.
 
    
    We also benefited from the strength of the U.S. dollar compared to the British Pound in
2009 versus 2008 and from 2007 to 2008. The value of the British Pound versus the U.S.
dollar decreased approximately $0.30, on average across 2009, and decreased approximately
$0.15, on average across 2008. Costs incurred for foreign subsidiaries will fluctuate
based upon changes in foreign currency rates in addition to other operational factors. We
enter into cash flow hedges for our UK subsidiary to mitigate foreign currency risk, which
offsets a large portion of the impact foreign currency fluctuations have on costs and
expenses.
 Cost of services
    Member relations and marketing
    22




---



##### Table of Contents



General and administrative
    Depreciation and amortization
    Impairment loss
  Costs associated with exit activities
   23




---



##### Table of Contents



Restructuring Costs
     Other income (expense), net
     24




---



##### Table of Contents



Provision for income taxes.
       Liquidity and Capital Resources
    Cash flows from operating activities.
    25




---



##### Table of Contents



Cash flows from investing activities.
         Cash flows from financing activities.
   26




---



##### Table of Contents



Contractual obligations
  Payments due by period (in thousands) at December 31, 2009Total
    
    
    YE 2010
    
    
    YE 2011
    
    
    YE 2012
    
    
    YE 2013
    
    
    YE 2014
    
    
    ThereafterOperating lease obligations
    
    $
    630,014
    
    
    $
    34,674
    
    
    $
    34,468
    
    
    $
    34,509
    
    
    $
    34,385
    
    
    $
    34,126
    
    
    $
    457,852Deferred compensation liability
    
    
    16,537
    
    
    
    1,407
    
    
    
    914
    
    
    
    1,144
    
    
    
    1,149
    
    
    
    779
    
    
    
    11,144Purchase commitments
    
    
    13,918
    
    
    
    8,346
    
    
    
    4,341
    
    
    
    1,231
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    660,469
    
    
    $
    44,427
    
    
    $
    39,723
    
    
    $
    36,884
    
    
    $
    35,534
    
    
    $
    34,905
    
    
    $
    468,996
 Sublease receipts by period (in thousands) at December 31, 2009Total
    
    
    YE 2010
    
    
    YE 2011
    
    
    YE 2012
    
    
    YE 2013
    
    
    YE 2014
    
    
    ThereafterSubleases receipts
    
    $
    104,422
    
    
    $
    9,218
    
    
    $
    9,146
    
    
    $
    9,157
    
    
    $
    9,394
    
    
    $
    8,005
    
    
    $
    59,502
   Off-Balance Sheet Arrangements
   27




---



##### Table of Contents



Recent Accounting Pronouncements
  
 Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
   FairValue2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total
    
    
    12/31/09Marketable securities
    
    $
    18,440
    
    
    $
    9,845
    
    
    $
    3,700
    
    
    $
    7,355
    
    
    $
    1,000
    
    
    $
    2,000
    
    
    $
    42,340
    
    
    $
    44,450Average effective interest rate
    
    
    3.94
    %
    
    
    4.24
    %
    
    
    4.25
    %
    
    
    4.60
    %
    
    
    4.31
    %
    
    
    5.00
    %
 Foreign currency risk
    28




---



##### Table of Contents



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 OfficerMarch 1, 2010/s/ Richard S. LindahlRichard S. LindahlChief Financial OfficerMarch 1, 2010
  29




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
 
        
  30




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements
 
      
  31




---



##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    31,760
    
    
    $
    16,214Marketable securities
    
    
    18,666
    
    
    
    13,545Membership fees receivable, net
    
    
    125,716
    
    
    
    127,007Deferred income taxes, net
    
    
    7,989
    
    
    
    12,459Deferred incentive compensation
    
    
    9,721
    
    
    
    12,621Prepaid expenses and other current assets
    
    
    9,584
    
    
    
    9,140Total current assets
    
    
    203,436
    
    
    
    190,986Deferred income taxes, net
    
    
    39,744
    
    
    
    41,427Marketable securities
    
    
    25,784
    
    
    
    46,344Property and equipment, net
    
    
    89,462
    
    
    
    109,133Goodwill
    
    
    27,129
    
    
    
    26,392Intangible assets, net
    
    
    12,246
    
    
    
    17,266Other non-current assets
    
    
    25,394
    
    
    
    14,644Total assets
    
    $
    423,195
    
    
    $
    446,192LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    48,764
    
    
    $
    66,178Accrued incentive compensation
    
    
    27,975
    
    
    
    25,145Deferred revenues
    
    
    222,053
    
    
    
    264,253Total current liabilities
    
    
    298,792
    
    
    
    355,576Deferred tax liabilities
    
    
    867
    
    
    
    Other liabilities
    
    
    73,259
    
    
    
    68,007Total liabilities
    
    
    372,918
    
    
    
    423,583Commitments and contingenciesStockholders equity:Common stock, par value $0.01; 100,000,000 shares authorized; 43,313,597 and 43,205,367 shares
issued and 34,147,008 and 34,043,752 shares outstanding at December 31, 2009 and 2008,
respectively
    
    
    433
    
    
    
    432Additional paid-in-capital
    
    
    401,629
    
    
    
    395,434Retained earnings
    
    
    274,718
    
    
    
    254,285Accumulated elements of other comprehensive income
    
    
    1,181
    
    
    
    55Treasury stock, at cost, 9,166,589 and 9,161,615 shares at December 31, 2009 and 2008, respectively
    
    
    (627,684
    )
    
    
    (627,597
    )Total stockholders equity
    
    
    50,277
    
    
    
    22,609Total liabilities and stockholders equity
    
    $
    423,195
    
    
    $
    446,192
   32




---



##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 Year ended December 31,2009
    
    
    2008
    
    
    2007Revenues
    
    $
    442,906
    
    
    $
    558,352
    
    
    $
    532,716Costs and expenses:Cost of services
    
    
    147,019
    
    
    
    179,950
    
    
    
    183,088Member relations and marketing
    
    
    126,023
    
    
    
    161,670
    
    
    
    150,032General and administrative
    
    
    59,415
    
    
    
    76,120
    
    
    
    71,984Depreciation and amortization
    
    
    22,991
    
    
    
    21,631
    
    
    
    15,573Impairment loss
    
    
    
    
    
    
    27,449
    
    
    
    Costs associated with exit activities
    
    
    11,518
    
    
    
    
    
    
    
    Restructuring costs
    
    
    8,568
    
    
    
    8,006
    
    
    
    Total costs and expenses
    
    
    375,534
    
    
    
    474,826
    
    
    
    420,677Income from operations
    
    
    67,372
    
    
    
    83,526
    
    
    
    112,039Other income (expense), net
    
    
    6,246
    
    
    
    (5,438
    )
    
    
    16,049Income before provision for income taxes
    
    
    73,618
    
    
    
    78,088
    
    
    
    128,088Provision for income taxes
    
    
    27,989
    
    
    
    33,291
    
    
    
    47,501Net income
    
    $
    45,629
    
    
    $
    44,797
    
    
    $
    80,587Earnings per share:Basic
    
    $
    1.34
    
    
    $
    1.31
    
    
    $
    2.20Diluted
    
    $
    1.33
    
    
    $
    1.30
    
    
    $
    2.17Dividends per share
    
    $
    0.74
    
    
    $
    1.76
    
    
    $
    1.60Weighted average shares outstanding:Basic
    
    
    34,111
    
    
    
    34,205
    
    
    
    36,666Diluted
    
    
    34,293
    
    
    
    34,329
    
    
    
    37,159
   33




---



##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    45,629
    
    
    $
    44,797
    
    
    $
    80,587Adjustments to reconcile net income to net cash flows provided by operating
activities:Deferred income taxes
    
    
    (255
    )
    
    
    (22,064
    )
    
    
    (10,923
    )Amortization of marketable securities premiums (discounts), net
    
    
    691
    
    
    
    695
    
    
    
    (449
    )Share-based compensation
    
    
    10,751
    
    
    
    12,525
    
    
    
    22,764Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    
    
    
    
    (2,398
    )Depreciation and amortization
    
    
    22,991
    
    
    
    21,631
    
    
    
    15,573Impairment loss
    
    
    
    
    
    
    27,449
    
    
    
    Costs associated with exit activities
    
    
    11,518
    
    
    
    
    
    
    
    Gain on acquisition
    
    
    (680
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    3,622
    
    
    
    36,112
    
    
    
    (6,688
    )Deferred incentive compensation
    
    
    2,900
    
    
    
    2,923
    
    
    
    (2,384
    )Prepaid expenses and other current assets
    
    
    (91
    )
    
    
    2,283
    
    
    
    (645
    )Other non-current assets
    
    
    (9,525
    )
    
    
    6,375
    
    
    
    (5,578
    )Accounts payable and accrued liabilities
    
    
    (18,533
    )
    
    
    11,053
    
    
    
    (11,739
    )Accrued incentive compensation
    
    
    2,387
    
    
    
    (6,210
    )
    
    
    6,293Deferred revenues
    
    
    (47,512
    )
    
    
    (60,548
    )
    
    
    14,724Other liabilities
    
    
    4,681
    
    
    
    8,211
    
    
    
    10,904Net cash flows provided by operating activities
    
    
    28,574
    
    
    
    85,232
    
    
    
    110,041Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (7,052
    )
    
    
    (42,483
    )
    
    
    (34,532
    )Cost method investment
    
    
    (1,000
    )
    
    
    (386
    )
    
    
    (3,829
    )Acquisition of businesses, net of cash acquired
    
    
    5,173
    
    
    
    (10,005
    )
    
    
    (61,593
    )Purchases of marketable securities
    
    
    
    
    
    
    (12,489
    )
    
    
    (108,801
    )Sales and maturities of marketable securities
    
    
    14,409
    
    
    
    49,024
    
    
    
    330,556Net cash flows provided by (used in) investing activities
    
    
    11,530
    
    
    
    (16,339
    )
    
    
    121,801Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    
    
    
    
    100
    
    
    
    691Proceeds from issuance of common stock under the employee stock purchase plan
    
    
    725
    
    
    
    1,419
    
    
    
    2,087Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    
    
    
    
    2,398Purchase of treasury shares
    
    
    (87
    )
    
    
    (41,842
    )
    
    
    (302,974
    )Payment of dividends
    
    
    (25,196
    )
    
    
    (59,941
    )
    
    
    (57,826
    )Net cash flows used in financing activities
    
    
    (24,558
    )
    
    
    (100,264
    )
    
    
    (355,624
    )Net increase (decrease) in cash and cash equivalents
    
    
    15,546
    
    
    
    (31,371
    )
    
    
    (123,782
    )Cash and cash equivalents, beginning of year
    
    
    16,214
    
    
    
    47,585
    
    
    
    171,367Cash and cash equivalents, end of year
    
    $
    31,760
    
    
    $
    16,214
    
    
    $
    47,585
   34




---



##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Years ended December 31, 2007, 2008, and 2009
 (In thousands, except share amounts)
 Accumulatedelements of other
    
    
    
    
    
    
    
    
    
    
    AnnualCommon stock
    
    
    Additional
    
    
    Retained
    
    
    comprehensive
    
    
    Treasury
    
    
    
    
    
    
    comprehensiveShares
    
    
    Amount
    
    
    paid-in-capital
    
    
    earnings
    
    
    income (loss)
    
    
    stock
    
    
    Total
    
    
    incomeBalance 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 effect of share-based compensation
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    Purchase of treasury shares
    
    
    (4,268,514
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (302,974
    )
    
    
    (302,974
    )
    
    
    Change in unrealized gain on available-for-sale marketable securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    $
    80,833Issuance of common stock upon the exercise of common stock options and release of restricted stock units
    
    
    46,125
    
    
    
    1
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    Issuance of common stock under the employee stock purchase plan
    
    
    39,730
    
    
    
    
    
    
    
    1,419
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,419
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    12,525
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,525
    
    
    
    Tax effect of share-based compensation
    
    
    
    
    
    
    
    
    
    
    (2,246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,246
    )Purchase of treasury shares
    
    
    (1,035,684
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,842
    )
    
    
    (41,842
    )
    
    
    Change in unrealized gain on available-for-sale marketable securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    208
    
    
    
    
    
    
    
    208
    
    
    
    208Foreign currency hedge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (333
    )
    
    
    
    
    
    
    (333
    )
    
    
    (333
    )Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    374
    
    
    
    
    
    
    
    374
    
    
    
    374Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59,941
    )
    
    
    
    
    
    
    
    
    
    
    (59,941
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,797
    
    
    
    
    
    
    
    
    
    
    
    44,797
    
    
    
    44,797Balance at December 31, 2008
    
    
    34,043,752
    
    
    $
    432
    
    
    $
    395,434
    
    
    $
    254,285
    
    
    $
    55
    
    
    $
    (627,597
    )
    
    $
    22,609
    
    
    $
    45,046Issuance of common stock upon release of restricted stock units
    
    
    59,782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock under the employee stock purchase plan
    
    
    48,448
    
    
    
    1
    
    
    
    724
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    725
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    10,751
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,751
    
    
    
    Tax effect of share-based compensation
    
    
    
    
    
    
    
    
    
    
    (5,280
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,280
    )Purchase of treasury shares
    
    
    (4,974
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    (87
    )
    
    
    Change in unrealized gains on available-for-sale marketable securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (195
    )
    
    
    
    
    
    
    (195
    )
    
    
    (195
    )Foreign currency hedge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,341
    
    
    
    
    
    
    
    1,341
    
    
    
    1,341Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    (20
    )
    
    
    (20
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,196
    )
    
    
    
    
    
    
    
    
    
    
    (25,196
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,629
    
    
    
    
    
    
    
    
    
    
    
    45,629
    
    
    
    45,629Balance at December 31, 2009
    
    
    34,147,008
    
    
    $
    433
    
    
    $
    401,629
    
    
    $
    274,718
    
    
    $
    1,181
    
    
    $
    (627,684
    )
    
    $
    50,277
    
    
    $
    46,755
  35




---



##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
  Note 2. Summary of significant accounting policies
 Basis of presentation
  Use of estimates in preparation of financial statements
  Foreign currency
    36




---



##### Table of Contents



Cash and cash equivalents and marketable securities
  Allowance for uncollectible revenue
  Property and equipment
  Goodwill
    Intangible assets, net
   37




---



##### Table of Contents



Recovery of long-lived assets
   Fair value of financial instruments
  Revenue recognition
   Deferred incentive compensation
  Operating leases
  Share-based compensation
   38




---



##### Table of Contents



Income taxes
  Concentration of credit risk and sources of revenues
    Accumulated elements of other comprehensive income
  December 31,2009
    
    
    2008Unrealized gains, net of tax, for available-for-sale marketable securities
    
    $
    876
    
    
    $
    1,071Unrealized losses, net of tax, for forward currency exchange contracts
    
    
    (49
    )
    
    
    (1,390
    )Cumulative translation adjustment
    
    
    354
    
    
    
    374Accumulated elements of other comprehensive income
    
    $
    1,181
    
    
    $
    55
  39




---



##### Table of Contents



Earnings per share
  Year ended December 31,2009
    
    
    2008
    
    
    2007Basic weighted average shares outstanding
    
    
    34,111
    
    
    
    34,205
    
    
    
    36,666Effect of dilutive shares outstanding
    
    
    182
    
    
    
    124
    
    
    
    493Diluted weighted average shares outstanding
    
    
    34,293
    
    
    
    34,329
    
    
    
    37,159
  Note 3. Recent accounting pronouncements
 Recently adopted
      40




---



##### Table of Contents



Not yet adopted
  Note 4. Acquisitions
 2009 Acquisition
  2008 Acquisitions
  2007 Acquisitions
   41




---



##### Table of Contents



Net working capital
    
    $
    1,547Property and equipment
    
    
    600Intangible assets
    
    
    20,294Goodwill (deductible for tax purposes)
    
    
    35,916Allocated purchase price
    
    $
    58,357
   Note 5. Fair value measurements
 Measurements
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
 
    
    Level 2  Observable inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or
similar assets and liabilities in markets that are not active, or other inputs that are
observable or can be corroborated by observable market data.
 
    
    Level 3  Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities. This includes certain
pricing models, discounted cash flow methodologies and similar techniques that use
significant unobservable inputs.
  Fair Valueas of
    
    
    Fair Value Measurements UsingDecember 31,
    
    
    Fair Value Hierarchy2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Financial assetsCash and cash equivalents
    
    $
    31,760
    
    
    $
    31,760
    
    
    $
    
    
    
    $
    Available-for-sale marketable securities
    
    
    44,450
    
    
    
    44,450
    
    
    
    
    
    
    
    Variable insurance products held in a Rabbi Trust
    
    
    13,612
    
    
    
    
    
    
    
    13,612
    
    
    
    Financial liabilitiesForward currency exchange contracts
    
    $
    173
    
    
    $
    
    
    
    $
    173
    
    
    $
    
   42




---



##### Table of Contents



Note 6. Marketable securities
  December 31, 2009Gross
    
    
    GrossFair
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes
    
    $
    12,591
    
    
    $
    12,542
    
    
    $
    49
    
    
    $
    Washington D.C. tax exempt bonds
    
    
    31,859
    
    
    
    30,462
    
    
    
    1,397
    
    
    
    Total marketable securities
    
    $
    44,450
    
    
    $
    43,004
    
    
    $
    1,446
    
    
    $
    
 December 31, 2008Gross
    
    
    GrossFair
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes
    
    $
    25,845
    
    
    $
    25,365
    
    
    $
    480
    
    
    $
    Washington D.C. tax exempt bonds
    
    
    34,044
    
    
    
    32,739
    
    
    
    1,383
    
    
    
    78Total marketable securities
    
    $
    59,889
    
    
    $
    58,104
    
    
    $
    1,863
    
    
    $
    78
  December 31, 2009Fair
    
    
    AmortizedValue
    
    
    CostLess than one year
    
    $
    18,666
    
    
    $
    18,521Matures in 1 to 5 years
    
    
    23,779
    
    
    
    22,483Matures in 6 to 10 years
    
    
    2,005
    
    
    
    2,000Total marketable securities
    
    $
    44,450
    
    
    $
    43,004
  Note 7. Membership fees receivable
  December 31,2009
    
    
    2008Billed
    
    $
    99,273
    
    
    $
    103,478Unbilled
    
    
    28,929
    
    
    
    28,460128,202
    
    
    
    131,938Allowance for uncollectible revenue
    
    
    (2,486
    )
    
    
    (4,931
    )Membership fees receivable, net
    
    $
    125,716
    
    
    $
    127,007
 Note 8. Property and equipment
  December 31,2009
    
    
    2008Furniture, fixtures, and equipment
    
    $
    42,671
    
    
    $
    41,651Leasehold improvements
    
    
    77,120
    
    
    
    83,250Computer software and Web site development costs
    
    
    20,289
    
    
    
    17,185140,080
    
    
    
    142,086Accumulated depreciation
    
    
    (50,618
    )
    
    
    (32,953
    )Property and equipment, net
    
    $
    89,462
    
    
    $
    109,133
  43




---



##### Table of Contents



Note 9. Goodwill and intangible assets
  December 31,2009
    
    
    2008Beginning of year
    
    $
    26,392
    
    
    $
    42,626Goodwill acquired
    
    
    737
    
    
    
    6,712Impairment loss
    
    
    
    
    
    
    (22,946
    )Goodwill
    
    $
    27,129
    
    
    $
    26,392
  Note 10. Accounts payable and accrued liabilities
  December 31,2009
    
    
    2008Accounts payable
    
    $
    7,411
    
    
    $
    6,658Advanced membership payments received
    
    
    10,995
    
    
    
    15,402Other accrued liabilities
    
    
    30,358
    
    
    
    44,118Accounts payable and accrued liabilities
    
    $
    48,764
    
    
    $
    66,178
 Note 11. Other liabilities
  December 31,2009
    
    
    2008Deferred compensation
    
    $
    9,890
    
    
    $
    7,256Lease incentives
    
    
    33,588
    
    
    
    35,558Deferred rent benefit  long term
    
    
    19,459
    
    
    
    17,148Other
    
    
    10,322
    
    
    
    8,045Total other liabilities
    
    $
    73,259
    
    
    $
    68,007
 Note 12. Derivative instruments and hedging
   44




---



##### Table of Contents



December 31,Balance Sheet Location
    
    2009
    
    
    2008LiabilityAccounts payable and accrued liabilities
    
    $
    173
    
    
    $
    4,057
  Amount of Gain (Loss)Location of Loss Reclassified from
    
    Amount of Gain (Loss) Reclassified
    
    
    
    
    
    
    Recognized in OCI onAccumulated OCI into Income
    
    from Accumulated OCI into Income
    
    
    Derivatives in cash flow
    
    
    Derivative(Effective portion)
    
    (Effective portion)
    
    
    hedging relationships
    
    
    (Effective portion)Year ended December 31, 2009
    
    
    
    
    
    
    Year ended December 31, 2009Cost of services
    
    $
    (1,052
    )
    
    Forward currency
    
    $
    168Member relations and marketing
    
    
    (780
    )
    
    contractsGeneral & Administrative
    
    
    (401
    )Total
    
    $
    (2,233
    )
  Note 13. Stockholders equity and share-based compensation
 Share-based compensation
     45




---



##### Table of Contents



Equity incentive plans
  Restricted stock units
  2009
    
    
    2008
    
    
    2007Number
    
    
    Weighted Average
    
    
    Number
    
    
    Weighted Average
    
    
    Number
    
    
    Weighted Averageof Restricted
    
    
    Grant Date Fair
    
    
    of Restricted
    
    
    Grant Date Fair
    
    
    of Restricted
    
    
    Grant Date FairStock Units
    
    
    Value
    
    
    Stock Units
    
    
    Value
    
    
    Stock Units
    
    
    ValueNonvested,
beginning of year
    
    
    133,196
    
    
    $
    60.18
    
    
    
    101,268
    
    
    $
    84.03
    
    
    
    60,123
    
    
    $
    94.78Granted
    
    
    665,059
    
    
    
    10.72
    
    
    
    70,235
    
    
    
    36.37
    
    
    
    73,529
    
    
    
    74.07Forfeited
    
    
    (81,940
    )
    
    
    19.42
    
    
    
    (13,045
    )
    
    
    68.56
    
    
    
    (17,499
    )
    
    
    83.21Vested
    
    
    (60,523
    )
    
    
    59.60
    
    
    
    (25,262
    )
    
    
    85.26
    
    
    
    (14,885
    )
    
    
    94.78Nonvested, end of year
    
    
    655,792
    
    
    $
    15.17
    
    
    
    133,196
    
    
    $
    60.18
    
    
    
    101,268
    
    
    $
    84.03
 Stock appreciation rights
  Year ended December 31,2008
    
    
    2007Risk-free interest rate
    
    
    4.31
    %
    
    
    4.47
    %Dividend yield
    
    
    3.86
    %
    
    
    2.01
    %Expected life of option (in years)
    
    
    5.1
    
    
    
    4.8Expected volatility (calculated historically)
    
    
    35
    %
    
    
    30
    %Weighted-average fair value of share-based compensation awards granted
    
    $
    7.37
    
    
    $
    17.85
  2009
    
    
    2008
    
    
    2007Number of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Number ofStock
    
    
    Weighted
    
    
    Stock
    
    
    Weighted
    
    
    Stock
    
    
    WeightedAppreciation
    
    
    Average
    
    
    Appreciation
    
    
    Average
    
    
    Appreciation
    
    
    AverageRights
    
    
    Exercise Price
    
    
    Rights
    
    
    Exercise Price
    
    
    Rights
    
    
    Exercise PriceOutstanding, beginning of year
    
    
    1,848,263
    
    
    $
    66.16
    
    
    
    1,293,319
    
    
    $
    83.82
    
    
    
    614,145
    
    
    $
    97.36Granted
    
    
    
    
    
    
    
    
    
    
    816,507
    
    
    
    40.95
    
    
    
    840,486
    
    
    
    74.48Forfeited
    
    
    (496,565
    )
    
    
    70.81
    
    
    
    (261,563
    )
    
    
    74.80
    
    
    
    (161,312
    )
    
    
    86.67Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, end of year
    
    
    1,351,698
    
    
    $
    64.51
    
    
    
    1,848,263
    
    
    $
    66.16
    
    
    
    1,293,319
    
    
    $
    83.82Vested or expected to vest, end of year
    
    
    1,089,856
    
    
    $
    65.39
    
    
    
    1,270,404
    
    
    $
    69.22
    
    
    
    1,171,169
    
    
    $
    84.13Exercisable, end of year
    
    
    604,176
    
    
    $
    74.04
    
    
    
    383,237
    
    
    $
    87.38
    
    
    
    134,292
    
    
    $
    97.52
  46




---



##### Table of Contents



Stock Appreciation Rights Outstanding
    
    
    Stock Appreciation Rights ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    
    Average
    
    
    
    
    
    
    Weighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    
    
    
    
    Average
    
    
    RemainingRange of Exercise
    
    
    
    
    
    Exercise
    
    
    Contractual
    
    
    
    
    
    
    Exercise
    
    
    ContractualPrices
    
    Shares
    
    
    Price
    
    
    Life-Years
    
    
    Shares
    
    
    Price
    
    
    Life-Years$25.99  $45.74
    
    
    587,381
    
    
    $
    41.06
    
    
    
    5.17
    
    
    
    149,381
    
    
    $
    41.00
    
    
    
    5.0966.60  76.00
    
    
    476,302
    
    
    
    73.43
    
    
    
    4.31
    
    
    
    238,780
    
    
    
    73.44
    
    
    
    4.3097.56  97.56
    
    
    288,015
    
    
    
    97.56
    
    
    
    3.20
    
    
    
    216,015
    
    
    
    97.56
    
    
    
    3.20$25.99  $97.56
    
    
    1,351,698
    
    
    $
    64.51
    
    
    
    4.45
    
    
    
    604,176
    
    
    $
    74.04
    
    
    
    4.10
  Common stock options
  2009
    
    
    2008
    
    
    2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Average
    
    
    Number
    
    
    Average
    
    
    Number
    
    
    Averageof Options
    
    
    Exercise Price
    
    
    of Options
    
    
    Exercise Price
    
    
    of Options
    
    
    Exercise PriceOutstanding, beginning of year
    
    
    1,803,027
    
    
    $
    52.75
    
    
    
    2,198,953
    
    
    $
    53.28
    
    
    
    2,942,132
    
    
    $
    50.63Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (600,310
    )
    
    
    52.19
    
    
    
    (326,869
    )
    
    
    61.14
    
    
    
    (149,250
    )
    
    
    56.92Exercised
    
    
    
    
    
    
    
    
    
    
    (69,057
    )
    
    
    29.74
    
    
    
    (593,929
    )
    
    
    39.20Outstanding, end of year
    
    
    1,202,717
    
    
    $
    53.03
    
    
    
    1,803,027
    
    
    $
    52.75
    
    
    
    2,198,953
    
    
    $
    53.28Vested or expected to vest, end of year
    
    
    1,202,717
    
    
    $
    53.03
    
    
    
    1,701,917
    
    
    $
    51.97
    
    
    
    2,151,328
    
    
    $
    53.13Exercisable, end of year
    
    
    1,202,717
    
    
    $
    53.03
    
    
    
    1,580,902
    
    
    $
    50.89
    
    
    
    1,338,954
    
    
    $
    48.66
   Options Outstanding and ExercisableWeightedWeighted
    
    
    AverageAverage
    
    
    RemainingRange of Exercise
    
    
    
    
    
    Exercise
    
    
    ContractualPrices
    
    Shares
    
    
    Price
    
    
    Life-Years$21.19  $36.81
    
    
    226,976
    
    
    $
    31.76
    
    
    
    2.6945.10    64.30
    
    
    415,865
    
    
    
    46.30
    
    
    
    1.6764.88    89.70
    
    
    559,876
    
    
    
    66.66
    
    
    
    2.24$21.19  $89.70
    
    
    1,202,717
    
    
    $
    53.03
    
    
    
    2.13
 Share Repurchases
   47




---



##### Table of Contents



Dividends
  Preferred stock
  Note 14. Costs associated with exit activities
  Note 15. Restructuring costs
      Tower2008
    
    
    2009
    
    
    GroupPlan
    
    
    Plan
    
    
    PlanBalance at December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    Costs incurred
    
    
    8,006
    
    
    
    
    
    
    
    Cash payments
    
    
    (399
    )
    
    
    
    
    
    
    Balance at December 31, 2008
    
    
    7,607
    
    
    
    
    
    
    
    Costs incurred
    
    
    1,253
    
    
    
    7,808
    
    
    
    1,162Cash payments
    
    
    (7,089
    )
    
    
    (5,292
    )
    
    
    (53
    )Change in estimate
    
    
    (1,239
    )
    
    
    (44
    )
    
    
    Balance at December 31, 2009
    
    $
    532
    
    
    $
    2,472
    
    
    $
    1,109
  48




---



##### Table of Contents



Note 16. Income taxes
  Year ended December 31,2009
    
    
    2008
    
    
    2007Current tax expenseFederal
    
    $
    20,914
    
    
    $
    42,607
    
    
    $
    54,328State and local
    
    
    6,035
    
    
    
    9,639
    
    
    
    1,547Foreign
    
    
    1,295
    
    
    
    1,865
    
    
    
    1,47628,244
    
    
    
    54,111
    
    
    
    57,351Deferred tax (benefit) expenseFederal
    
    
    1,077
    
    
    
    (19,535
    )
    
    
    (10,552
    )State and local
    
    
    (949
    )
    
    
    (841
    )
    
    
    919Foreign
    
    
    (383
    )
    
    
    (444
    )
    
    
    (217
    )(255
    )
    
    
    (20,820
    )
    
    
    (9,850
    )Provision for income taxes
    
    $
    27,989
    
    
    $
    33,291
    
    
    $
    47,501
   Year ended December 31,2009
    
    
    2008
    
    
    2007U.S. sources
    
    $
    69,600
    
    
    $
    74,002
    
    
    $
    124,288Non-U.S. sources
    
    
    4,018
    
    
    
    4,086
    
    
    
    3,800Total
    
    $
    73,618
    
    
    $
    78,088
    
    
    $
    128,088
  Year ended December 31,2009
    
    
    2008
    
    
    2007Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    4.9
    
    
    
    5.3
    
    
    
    3.3Foreign income tax
    
    
    (0.3
    )
    
    
    (0.4
    )
    
    
    (0.1
    )Foreign currency loss
    
    
    (0.6
    )
    
    
    1.7
    
    
    
    Permanent differences and credits, net
    
    
    (1.0
    )
    
    
    1.0
    
    
    
    (1.1
    )Effective tax rate
    
    
    38.0
    %
    
    
    42.6
    %
    
    
    37.1
    %
  49




---



##### Table of Contents



December 31,2009
    
    
    2008Deferred tax assetsShare-based compensation
    
    $
    14,529
    
    
    $
    16,551Goodwill and intangibles
    
    
    11,498
    
    
    
    11,305Accrued incentive compensation
    
    
    10,070
    
    
    
    9,250Accruals and reserves
    
    
    1,729
    
    
    
    5,273Net operating loss and tax credit carry forwards
    
    
    8,189
    
    
    
    7,612Depreciation
    
    
    
    
    
    
    2,480Deferred compensation plan
    
    
    3,893
    
    
    
    4,244Deferred revenues
    
    
    525
    
    
    
    2,411Operating leases and lease incentives
    
    
    13,671
    
    
    
    9,639Other
    
    
    1,614
    
    
    
    2,256Total deferred tax assets
    
    
    65,718
    
    
    
    71,021Valuation allowance
    
    
    (9,091
    )
    
    
    (8,211
    )Total deferred tax assets, net of valuation allowance
    
    
    56,627
    
    
    
    62,810Deferred tax liabilitiesDeferred incentive compensation
    
    
    3,882
    
    
    
    5,016Depreciation
    
    
    2,846
    
    
    
    Other
    
    
    3,033
    
    
    
    3,908Total deferred tax liabilities
    
    
    9,761
    
    
    
    8,924Deferred tax assets, net
    
    $
    46,866
    
    
    $
    53,886
       50




---



##### Table of Contents



December 31,2009
    
    
    2008Balance at beginning of the year
    
    $
    427
    
    
    $
    900Additions based on tax positions related to the
current year
    
    
    32
    
    
    
    Additions for tax positions of prior years
    
    
    177
    
    
    
    Reductions for tax positions of prior years
    
    
    
    
    
    
    (288
    )Reductions for lapse of statute of limitations
    
    
    (44
    )
    
    
    (185
    )Settlements
    
    
    
    
    
    
    Balance at end of the year
    
    $
    592
    
    
    $
    427
  Note 17. Employee benefit plans
 Defined contribution 401(k) plan
  Employee stock purchase plan
  Deferred compensation plan
   51




---



##### Table of Contents



Note 18. Commitments and contingencies
 Operating leases
  Payments due and sublease receipts by period (in thousands) at December 31, 2009Total
    
    
    YE 2010
    
    
    YE 2011
    
    
    YE 2012
    
    
    YE 2013
    
    
    YE 2014
    
    
    ThereafterOperating lease obligations
    
    $
    630,014
    
    
    $
    34,674
    
    
    $
    34,468
    
    
    $
    34,509
    
    
    $
    34,385
    
    
    $
    34,126
    
    
    $
    457,852Subleases receipts
    
    
    104,422
    
    
    
    9,218
    
    
    
    9,146
    
    
    
    9,157
    
    
    
    9,394
    
    
    
    8,005
    
    
    
    59,502Total net lease obligations
    
    
    525,592
    
    
    
    25,456
    
    
    
    25,322
    
    
    
    25,352
    
    
    
    24,991
    
    
    
    26,121
    
    
    
    398,350
  Other
    Note 19. Segments and geographic areas
   52




---



##### Table of Contents



United States
    
    
    Europe
    
    
    Other countries
    
    
    Total2009Revenues
    
    $
    293,994
    
    
    $
    77,573
    
    
    $
    71,339
    
    
    $
    442,906Long-lived assets
    
    
    112,932
    
    
    
    5,843
    
    
    
    10,062
    
    
    
    128,8372008Revenues
    
    
    382,705
    
    
    
    98,828
    
    
    
    76,819
    
    
    
    558,352Long-lived assets
    
    
    136,280
    
    
    
    14,730
    
    
    
    1,781
    
    
    
    152,7912007Revenues
    
    
    380,544
    
    
    
    86,595
    
    
    
    65,577
    
    
    
    532,716Long-lived assets
    
    
    149,969
    
    
    
    6,272
    
    
    
    432
    
    
    
    156,673
 Note 20. Quarterly financial data (unaudited)
  2009 Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Revenues
    
    $
    117,440
    
    
    $
    110,695
    
    
    $
    106,819
    
    
    $
    107,952Costs associated with exit activities
    
    
    
    
    
    
    11,518
    
    
    
    
    
    
    
    Restructuring costs
    
    
    944
    
    
    
    4,244
    
    
    
    2,327
    
    
    
    1,053Total costs and expenses
    
    
    95,740
    
    
    
    106,596
    
    
    
    84,900
    
    
    
    88,298Income from operations
    
    
    21,700
    
    
    
    4,099
    
    
    
    21,919
    
    
    
    19,654Income before provision for income taxes
    
    
    21,790
    
    
    
    8,243
    
    
    
    22,746
    
    
    
    20,839Net income
    
    $
    13,072
    
    
    $
    4,946
    
    
    $
    14,177
    
    
    $
    13,434Earnings per share:Basic
    
    $
    0.38
    
    
    $
    0.15
    
    
    $
    0.42
    
    
    $
    0.39Diluted
    
    $
    0.38
    
    
    $
    0.14
    
    
    $
    0.41
    
    
    $
    0.39
 2008 Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Revenues
    
    $
    138,023
    
    
    $
    141,173
    
    
    $
    142,409
    
    
    $
    136,747Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,449Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,006Total costs and expenses
    
    
    114,004
    
    
    
    115,763
    
    
    
    106,618
    
    
    
    138,441Income (loss) from operations
    
    
    24,019
    
    
    
    25,410
    
    
    
    35,791
    
    
    
    (1,694
    )Income (loss) before
provision for income taxes
    
    
    24,717
    
    
    
    26,351
    
    
    
    31,902
    
    
    
    (4,882
    )Net income (loss)
    
    $
    14,830
    
    
    $
    15,811
    
    
    $
    20,002
    
    
    $
    (5,846
    )Earnings (loss) per share:Basic
    
    $
    0.43
    
    
    $
    0.46
    
    
    $
    0.59
    
    
    $
    (0.17
    )Diluted
    
    $
    0.42
    
    
    $
    0.46
    
    
    $
    0.59
    
    
    $
    (0.17
    )
 Note 21. Subsequent events
 Dividends
   53




---



##### Table of Contents



Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A.
    
    Controls and Procedures.
 Controls and Procedures
    
 Item 9B.
    
    Other Information.
  
 PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance.
  
    
    Information regarding directors of the Company who are standing for reelection and any
persons nominated to become directors of the Company is set forth under Election of
Directors.
 
    
    Information regarding executive officers of the Company is set forth under Directors
and Executive Officers.
 
    
    Information regarding the Companys Audit Committee and designated audit committee
financial expert is set forth under Board of Directors Meeting
and Committees.
 
    
    Information regarding the
recommendation of nominees to the Board of Directors is set forth
under Corporate Governance Matters.
 
    
    Information on the Companys code of business conduct and ethics for directors, officers
and employees, also known as the Code of Conduct for Officers, Directors and Employees,
and on the Companys corporate governance guidelines is set forth under Corporate
Governance Matters.
 
    
    Information regarding Section 16(a) beneficial ownership reporting compliance is set
forth under Section 16(a) Beneficial Ownership Reporting Compliance.
  54




---



##### Table of Contents



Item 11.
    
    Executive Compensation.
  
    
    Information regarding the Companys compensation of its named executive officers is set
forth under Executive Compensation.
 
    
    Information regarding the Companys compensation of its directors is set forth under
Compensation of the Board.
 
    
    The report of the Companys Compensation Committee is set forth under Compensation
Committee Report.
 
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
    
    Information regarding security ownership of certain beneficial owners, directors and
executive officers is set forth under Security Ownership of Certain Beneficial Owners and
Management.
 Securities Authorized for Issuance Under Equity Compensation Plans
  (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
    
    
    2,960,857
    
    
    $
    61.10
    
    
    
    2,998,838Equity compensation plans not approved by stockholders
(1)
    
    
    249,350
    
    
    
    40.69
    
    
    
    Total
    
    
    3,210,207
    
    
    $
    59.10
    
    
    
    2,998,838
 
 (1)
    
    In March 2002, the Company adopted the 2002 Non-Executive Stock Incentive Plan, as amended
(the 2002 Plan), which was not approved by stockholders. In December 2006, the Company
further amended the 2002 Plan to address new guidance regarding equity restructurings under
FAS 123(R). The 2002 Plan provided for the issuance of up to 7,300,000 shares of common stock
under stock options or restricted stock grants. Any person who is an employee or prospective
employee of the Company was eligible for the grant of awards under the 2002 Plan, unless such
person is an officer or director of the Company. The terms of awards granted under the 2002
Plan, including vesting, forfeiture and post termination exercisability are set by the plan
administrator, subject to certain restrictions set forth in the 2002 Plan. The common stock
options granted under the 2002 Plan generally become exercisable 25% per year beginning one
year from the date of grant and expire between March 2011 and March 2013. With stockholder
approval of the Companys 2004 Stock Incentive Plan in July 2004, the 2002 Plan was suspended
and no new grants will be made under the 2002 Plan. Stockholder approval of the 2004 Plan
terminated the Companys ability to issue awards for 4,497,625 shares that at that time
remained available under the 2002 Plan. 
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14.
    
    Principal Accounting Fees and Services.
   55




---



##### Table of Contents



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, 2009 and 2008,
 Consolidated Statements of Income for the years ended December 31, 2009, 2008, and 2007,
 Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007,
 Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2009,
2008, and 2007, and
 Notes 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. (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).)3.2
    
    
    Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 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 March 10, 2009.)4.1
    
    
    Specimen Common Stock Certificate. (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).)10.1
    
    
    The Corporate Executive Board Company Stock-Based Incentive Compensation Plan, adopted on October 31,
1997, as amended and restated in February 1999. (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).) *10.2
    
    
    Amended Directors Stock Plan and Standard Terms and Conditions for Director Non-qualified Stock Options.
(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).) *10.3
    
    
    1999 Stock Option Plan and Standard Terms and Conditions for 1999 Stock Option Plan Incentive Stock
Options. (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).) *10.4
    
    
    Employee Stock Purchase Plan dated June 23, 2000. (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.)
  56




---



##### Table of Contents



ExhibitNo.
    
    Description of Exhibit10.5
    
    
    2001 Stock Option Plan. (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).) *10.6
    
    
    2002 Non-Executive Stock Incentive Plan. (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.) *10.7
    
    
    2004 Stock Incentive Plan, as amended June 14, 2007. (Incorporated by reference to Exhibit 10.11 from the
Annual Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the year ended December
31, 2007.) *10.8
    
    
    Form of term sheet for director non-qualified stock options. (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.) *10.9
    
    
    The Corporate Executive Board Deferred Compensation Plan, as amended, effective January 1, 2008.
(Incorporated by reference to Exhibit 10.17 from the Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the year ended December 31, 2008)*10.10
    
    
    Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan and form of
Term Sheet for Restricted Stock Units. (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.) *10.11
    
    
    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. (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.) *10.12
    
    
    Employment Agreement, dated May 19, 2006, between The Corporate Executive Board Company and Thomas L.
Monahan III. (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.) *10.13
    
    
    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. (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.)10.14
    
    
    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. (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.) *10.15
    
    
    Collaboration Agreement, dated February 6, 2007, with The Advisory Board Company, as extended on February
4, 2010 (Confidential treatment has been requested for portions of this agreement.) (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.)10.16
    
    
    Form of Employer Protection Agreement, revised February 12, 2010. (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.)10.17
    
    
    Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan. (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.) *
  57




---



##### Table of Contents



ExhibitNo.
    
    Description of Exhibit10.18
    
    
    Form of Indemnity Agreement between The Corporate Executive Board Company and its directors and officers.
(Incorporated by reference to Exhibit 10.30 from the Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the year ended December 31, 2007.)10.19
    
    
    Form of Change in Control Agreement. (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 October 23, 2008.) *10.20
    
    
    Revised Form of Employer Protection Agreement, adopted February 12, 2010. 10.21
    
    
    Revised Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan. * 10.22
    
    
    Revised Standard Terms and Conditions for Non-Qualified Stock Options and Stock Appreciation Rights under
2004 Stock Incentive Plan. * 10.23
    
    
    Extension letter, dated February 4, 2010, to the Collaboration Agreement with The Advisory Board Company. 10.24
    
    
    Glenn Tobin Agreement and Release, dated February 4, 2009. *10.25
    
    
    Severance Program  Corporate Leadership Team, adopted January 8, 2010. *10.26
    
    
    Separation Agreement  Richard S. Lindahl, dated April 29, 2009. (Incorporated by reference to Exhibit
10.1 to 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 May 1, 2009.) *14.1
    
    

Code
of Conduct For Directors, Executives and Employees (Restated as of May 1, 2008). (Incorporated by reference to Exhibit
14.1 to 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 May 7, 2008.)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.
 
 *
    
    Management contract or compensatory plan or arrangement.
    
    Filed herewith.  58




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    
  59




---



##### Table of Contents



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
    
    
    Revenues
    
    
    Taxes
    
    
    Reserve
    
    
    End of YearYear ended December 31, 2009Allowance for uncollectible revenue
    
    $
    4,931
    
    
    $
    5,820
    
    
    $
    
    
    
    $
    8,265
    
    
    $
    2,486Valuation allowance on deferred tax assets
    
    
    8,211
    
    
    
    
    
    
    
    888
    
    
    
    8
    
    
    
    9,091Year ended December 31, 2008Allowance for uncollectible revenue
    
    $
    1,748
    
    
    $
    15,629
    
    
    $
    
    
    
    $
    12,446
    
    
    $
    4,931Valuation allowance on deferred tax assets
    
    
    7,878
    
    
    
    
    
    
    
    800
    
    
    
    467
    
    
    
    8,211Year ended December 31, 2007Allowance for uncollectible revenue
    
    $
    1,155
    
    
    $
    8,560
    
    
    $
    
    
    
    $
    7,967
    
    
    $
    1,748Valuation allowance on deferred tax assets
    
    
    5,821
    
    
    
    
    
    
    
    2,057
    
    
    
    
    
    
    
    7,878
  60




---



##### Table of Contents



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/ Richard S. Lindahl

Richard S. Lindahl
    
    Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer)/s/ Gregor S. BailarGregor S. Bailar
    
    Director/s/ Stephen M. CarterStephen M. Carter
    
    Director/s/
Gordon J. CoburnGordon J. Coburn
    
    Director/s/ Nancy J. KarchNancy J. Karch
    
    Director/s/ David W. KennyDavid W. Kenny
    
    Director/s/ Daniel O. LeemonDaniel O. Leemon
    
    Director
  61