UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
 (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, 2008.
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
    
    52-2056410(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)1919 North Lynn StreetArlington, Virginia
    
    22209(Address of principal executive offices)
    
    (Zip Code)
 (571) 303-3000
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $0.01 per share
    
    The Nasdaq Stock Market LLC
 Not applicable
 þ o
 o þ
 þ o
 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.




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THE CORPORATE EXECUTIVE BOARD COMPANY
TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    5Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    13Item 2. Properties
    
    
    13Item 3. Legal Proceedings
    
    
    13Item 4. Submission of Matters to a Vote of Security Holders
    
    
    13PART 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
    
    
    16Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 8. Financial Statements and Supplementary Data
    
    
    27Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    53Item 9A. Controls and Procedures
    
    
    53Item 9B. Other Information
    
    
    54PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    54Item 11. Executive Compensation
    
    
    54Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    54Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    55Item 14. Principal Accountant Fees and Services
    
    
    55PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    55Signatures
    
    
    61Exhibit Index
    
    
    62
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Explanatory Note
     December 31, 2008OriginallyReported
    
    RestatedConsolidated Balance SheetDeferred income taxes, net  long term
    
    $
    37,761
    
    
    $
    41,427Intangible assets, net
    
    
    21,205
    
    
    
    17,266Other liabilities
    
    
    62,097
    
    
    
    68,007Total stockholders equity
    
    $
    28,603
    
    
    $
    22,609
 3




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Year ended December 31, 2008OriginallyReported
    
    RestatedConsolidated Statements of IncomeCost of services
    
    $
    176,552
    
    
    $
    179,950Member relations and marketing
    
    
    160,259
    
    
    
    161,670General and administrative
    
    
    75,208
    
    
    
    76,120Depreciation and amortization
    
    
    21,895
    
    
    
    21,631Impairment loss
    
    
    23,246
    
    
    
    27,449Provision for income taxes
    
    
    36,957
    
    
    
    33,291Net income
    
    $
    50,791
    
    
    $
    44,797Earnings per share:Basic
    
    $
    1.48
    
    
    $
    1.31Diluted
    
    $
    1.48
    
    
    $
    1.30
   
    
    Part I  Item 1A. Risk Factors (to reflect restated financial information).
    
    Part II  Item 6. Selected Financial Data (2008 only).
    
    Part II  Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    Part II  Item 8. Financial Statements and Supplementary Data
 o
    
    Managements Report on Internal Control Over Financial Reportingo
    
    Reports of Independent Registered Public Accounting Firmo
    
    Consolidated Balance Sheetso
    
    Consolidated Statements of Incomeo
    
    Consolidated Statements of Stockholders Equityo
    
    Notes to Consolidated Financial Statements (Notes 2, 9, 10, 11, 14, 16, 17 and 18 only)
 
    
    Part II  Item 9A. Controls and Procedures.
   
 PART I
 Forward-looking Statements
  4




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Item 1. Business.
 Our Company
   Our Products and Services
  
    
    Human Resources
    
    Information Technology
    
    Finance
    
    Legal and Compliance
    
    Sales and Marketing
  
    
    Corporate Best Practices. 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 practices for
members to implement. We deliver best practices to members through various channels,
including published studies, interactive workshops, web-based resources, and in-person
meetings.
    
    Peer Information Sharing. We connect members to a network of peer executives and
professionals across industries and geographies. These networks operate in person and
through our web- and email-based platforms. In 2008, our network supported approximately 200
executive discussion groups, and we held more than 800 in-person meetings for attendees
worldwide. We also held approximately 1,400 virtual events for close to 100,000
participants.
 5




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
    
    Performance Benchmarking. We provide executives with quantitative benchmarks, based on
member data, to manage performance and inform decisions. In 2008, we provided 150 new
benchmarking datasets for functional headcount, budget, and staff compensation, and other
metrics that members used to cut costs and right-size their departments.
    
    Diagnostics and Other Workflow-Enhancement Tools.We give members access to tools that
support decision making and streamline workflow. For example, our World Class Performance
diagnostic tool allows a member executive to understand how peer executives assess the
performance of the member executives function. We provided more than 100 new analytical
tools in 2008 that helped functional executives save time in their daily workflows.
    
    Decision Support on Urgent Issues.Increasingly during 2008, we delivered decision
support and advice to members on time-sensitive issues, as well as on best practices. For
example, in the fourth quarter of 2008, we conducted two global teleconferences, one on the
impact of the financial crisis, and the other on executive response to recessionary
conditions in 2009. These were attended by more than 3,000 and 5,500 executives and
professionals, respectively, from around the world.
    
    Executive Education. We deliver a proprietary executive education curriculum, on site and
through e-learning platforms, to executives and their teams. In certain functions, such as
Legal, the curriculum is accredited to meet continuing education requirements.
  Our Business Strategy
  
    
    Add New Members and Version Products For Key New Markets.We will continue to expand our
footprint within our core domains, to new institutions, and across geographies. Less than
25% of the 22,000 companies we target on a global basis have initiated their first
relationship with us. We continue to have substantial opportunities in the North American
large corporate market, as well as in international markets and the global middle market; we
plan to continue our investments in those platforms. This network expansion strengthens the
power of our network and, we believe, the desirability of our products and services.
    
    Launch Products That Target New Decisions and Decision Makers.We will continue to launch
renewable and scalable products and services to support unmet needs within the functions we
target. Our current data assets of more than 300,000 corporate practices position us to
identify, evaluate, and communicate emerging insights and solutions to the more than 5,100
member institutions of our more than 40 programs. We believe that additional products and
services will increase the value we provide to members.
    
    Continue To Forge and Leverage Strong Executive Relationships.We continue to invest in
relationship management to deepen our relationships with executives and professionals.
Executives and professionals need solutions to common business issues and to the problems
they face during unusual market conditions. In addition to our more than 40 programs, we
provide data and education-based offerings. We will increase our efforts to match network
generated insights to executives professional outcomes by more fully integrating our sales
and service operations, and by upgrading technology-driven solutions that better connect our
resources to our members needs. We believe these efforts will grow member relationships
while increasing the value of the member network.
 6




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Our Pricing
      Our Competition
   7




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Our Employees
   Our Sales & Marketing Efforts
    Financial Information on Geographic Areas
  Corporate Information
   8




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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 recent turmoil in the global economy and the financial markets, and the related economic
downturn, could adversely impact our business, results of operations, financial condition, and
liquidity.
  We may fail to attract new members to our programs, obtain renewals from existing members, and sell
additional programs to existing members.
  We may experience difficulty collecting membership fees as a result of deteriorating operating
conditions at our member institutions, resulting from current market conditions.
  9




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If we do not retain members for the duration of their membership terms we could suffer a loss of
revenue due to our service guarantee.
  The current conditions in the global economy and the financial market could make it more difficult
for us to anticipate member needs and demands and provide relevant support.
  Our announced business restructuring plan may be unsuccessful or may have unanticipated negative
results.
  We may not compete successfully and, as a result, may experience reduced demand for our products
and services.
  Continued turmoil, consolidation, and business failures in the global financial services industry
may cause us to lose additional members.
  10




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Our international operations involve financial, regulatory, and business risks that differ from or
are in addition to those faced by our U.S. operations.
  Our transition to an integrated account management model may be unsuccessful or may have
unanticipated negative results.
  Our acquisitions involve financial and business risks that differ from or are in addition to those
faced by our existing operations.
   We may be subject to additional impairment losses due to potential declines in the fair value of
our assets.
  11




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We may be unable to attract and retain highly skilled management and employees.
  We may fail to implement, maintain, and upgrade the technology and information infrastructure that
supports our products and services.
  We may be unable to protect our intellectual property rights.
  12




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We may be exposed to litigation related to the content we publish.
  We could be subject to additional income and other tax liabilities.
  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
    
    
    78,000
    
    
    
    2018Gurgaon, India
    
    
    68,000
    
    
    
    2013Chicago, Illinois
    
    
    52,000
    
    
    
    2013San Francisco, California
    
    
    28,000
    
    
    
    2012Rochester, New York
    
    
    13,000
    
    
    
    2011Scottsdale, Arizona
    
    
    9,000
    
    
    
    2009West Chester, Pennsylvania
    
    
    6,000
    
    
    
    2010Sydney, Australia
    
    
    7,600
    
    
    
    2013Toronto, Canada
    
    
    4,000
    
    
    
    2011
  
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  13




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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
    
    Dividends2008First 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
    
    
    
    0.442007First quarter
    
    $
    96.33
    
    
    $
    73.15
    
    
    $
    0.40Second quarter
    
    
    77.39
    
    
    
    58.54
    
    
    
    0.40Third quarter
    
    
    74.37
    
    
    
    62.94
    
    
    
    0.40Fourth quarter
    
    
    76.99
    
    
    
    58.63
    
    
    
    0.40
  Recent Sales of Unregistered Securities
  Issuer Purchases of Equity Securities
  Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of a
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plan
    
    
    Under the PlansOctober 1, 2008 to October 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    22,404,907November 1, 2008 to November 30, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    22,404,907December 1, 2008 to December 31, 2008 (1)
    
    
    87
    
    
    $
    21.89
    
    
    
    87
    
    
    $
    22,403,003Total
    
    
    87
    
    
    $
    21.89
    
    
    
    87
 
 (1)
    
    Amounts include 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




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Item 6. Selected Financial Data.
  Year ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per-share amounts)(Restated)Consolidated Statements of Income DataRevenues
    
    $
    558,352
    
    
    $
    532,716
    
    
    $
    460,623
    
    
    $
    362,226
    
    
    $
    280,724Costs and expenses:Cost of services
    
    
    179,950
    
    
    
    183,088
    
    
    
    164,022
    
    
    
    120,944
    
    
    
    91,469Member relations and marketing
    
    
    161,670
    
    
    
    150,032
    
    
    
    122,177
    
    
    
    93,657
    
    
    
    75,560General and administrative
    
    
    76,120
    
    
    
    71,984
    
    
    
    59,629
    
    
    
    40,295
    
    
    
    31,254Depreciation and amortization
    
    
    21,631
    
    
    
    15,573
    
    
    
    10,381
    
    
    
    7,308
    
    
    
    6,782Impairment loss
    
    
    27,449
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    8,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-cash lease restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,210Total costs and expenses
    
    
    474,826
    
    
    
    420,677
    
    
    
    356,209
    
    
    
    262,204
    
    
    
    210,275Income from operations
    
    
    83,526
    
    
    
    112,039
    
    
    
    104,414
    
    
    
    100,022
    
    
    
    70,449Other (expense) income, net
    
    
    (5,438
    )
    
    
    16,049
    
    
    
    24,318
    
    
    
    13,588
    
    
    
    9,936Income before provision for income taxes
    
    
    78,088
    
    
    
    128,088
    
    
    
    128,732
    
    
    
    113,610
    
    
    
    80,385Provision for income taxes
    
    
    33,291
    
    
    
    47,501
    
    
    
    49,561
    
    
    
    38,550
    
    
    
    26,729Net income
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171
    
    
    $
    75,060
    
    
    $
    53,656Earnings per share-basic
    
    $
    1.31
    
    
    $
    2.20
    
    
    $
    1.99
    
    
    $
    1.90
    
    
    $
    1.40Weighted average shares outstanding-basic
    
    
    34,205
    
    
    
    36,666
    
    
    
    39,712
    
    
    
    39,572
    
    
    
    38,344Earnings per share-diluted
    
    $
    1.30
    
    
    $
    2.17
    
    
    $
    1.94
    
    
    $
    1.83
    
    
    $
    1.34Weighted average shares outstanding-diluted
    
    
    34,329
    
    
    
    37,159
    
    
    
    40,721
    
    
    
    41,092
    
    
    
    39,925Cash dividends declared per common share
    
    $
    1.76
    
    
    $
    1.60
    
    
    $
    1.20
    
    
    $
    0.40
    
    
    $
    0.30
 December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands)(Restated)Consolidated Balance Sheet DataCash, cash equivalents and marketable securities
    
    $
    76,103
    
    
    $
    144,356
    
    
    $
    487,287
    
    
    $
    544,636
    
    
    $
    416,977Deferred income taxes
    
    
    53,886
    
    
    
    37,017
    
    
    
    28,005
    
    
    
    14,838
    
    
    
    29,587Total assets
    
    
    446,192
    
    
    
    544,772
    
    
    
    736,055
    
    
    
    726,995
    
    
    
    578,451Deferred revenues
    
    
    264,253
    
    
    
    323,395
    
    
    
    308,671
    
    
    
    261,300
    
    
    
    205,494Total stockholders equity
    
    
    22,609
    
    
    
    67,547
    
    
    
    317,865
    
    
    
    385,414
    
    
    
    327,461
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December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004Other Operating Data (Unaudited)Membership programs
    
    
    52
    
    
    
    48
    
    
    
    42
    
    
    
    37
    
    
    
    31Member institutions
    
    
    5,114
    
    
    
    4,711
    
    
    
    3,739
    
    
    
    2,831
    
    
    
    2,368Total membership subscriptions
    
    
    15,747
    
    
    
    16,349
    
    
    
    14,190
    
    
    
    10,825
    
    
    
    8,202Average subscriptions per member
institution (cross-sell
ratio)(1)
    
    
    3.08
    
    
    
    3.47
    
    
    
    3.80
    
    
    
    3.82
    
    
    
    3.46Client renewal rate (2)
    
    
    84
    %
    
    
    90
    %
    
    
    92
    %
    
    
    92
    %
    
    
    91
    %Contract value (in thousands) (3)
    
    $
    487,107
    
    
    $
    526,386
    
    
    $
    475,653
    
    
    $
    381,366
    
    
    $
    294,949
 
 (1)
    
    Excluding the impact of the middle market cross-sell ratio of 1.58, 1.44, 1.1 and 1.0 in
2008, 2007, 2006 and 2005, respectively, the traditional large company market cross-sell ratio
was 3.63, 4.03, 4.15 and 3.91 in 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. Our client renewal rate for 2008 and 2007 was
comprised of renewal rates of 88% and 92%, respectively, for our large company market
and 71% and 80%, respectively, for our middle market.(3)
    
    For the year then ended. Contract value is defined as the aggregate annualized revenue
attributed to all agreements in effect at a given date without regard to the remaining
duration of any such agreement. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
      16




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Executive Overview
    General
   
    
    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 and in-house faculty; the production of published
materials; the organization of executive education seminars; and associated support
services.
    
    Member relations and marketing, which represents the costs of acquiring new members
and the costs of maintaining and renewing existing members, consisting of compensation
(including sales commissions and share-based compensation), travel and associated support
services.
    
    General and administrative, consisting of compensation, including share-based
compensation, and other costs associated with human resources and recruiting, finance and
accounting, legal, management information systems, facilities management, new product
development and other administrative functions.
    
    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.
  Critical Accounting Policies
  17




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Revenue recognition
 Revenue Recognition
  Allowance for uncollectible revenue
  Income taxes
   Goodwill
  Goodwill and Other Intangible Assets
  18




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Long-lived assets, including intangibles
  Deferred incentive compensation
  Share-based compensation
  Results of Operations
  Year ended December 31,2008
    
    2007
    
    2006(Restated)Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs and expenses:Cost of services
    
    
    32.2
    
    
    
    34.4
    
    
    
    35.6Member relations and marketing
    
    
    29.0
    
    
    
    28.2
    
    
    
    26.5General and administrative
    
    
    13.6
    
    
    
    13.5
    
    
    
    12.9Depreciation and amortization
    
    
    3.9
    
    
    
    2.9
    
    
    
    2.3Impairment loss
    
    
    4.9
    
    
    
    
    
    
    
    Restructuring costs
    
    
    1.4
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    85.0
    
    
    
    79.0
    
    
    
    77.3Income from operations
    
    
    15.0
    
    
    
    21.0
    
    
    
    22.7Other (expense) income, net
    
    
    (1.0
    )
    
    
    3.0
    
    
    
    5.3Income before provision for income taxes
    
    
    14.0
    
    
    
    24.0
    
    
    
    27.9Provision for income taxes
    
    
    6.0
    
    
    
    8.9
    
    
    
    10.8Net income
    
    
    8.0
    %
    
    
    15.1
    %
    
    
    17.2
    %
 19




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Years ended December 31, 2008, 2007 and 2006
 Contract Value
    Revenues
     Costs and expenses
  20




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Cost of services.
        Member relations and marketing.
      21




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General and administrative.
       Depreciation and amortization.
     Impairment loss.
  22




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Restructuring Costs.
   Other (expense) income, net.
    Provision for income taxes.
    Liquidity and Capital Resources
  23




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Cash flows from operating activities.
   Cash flows from investing activities.
       Cash flows from financing activities.
  24




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Contractual obligations
  Payments Due by Period (in thousands)Total
    
    <1 Year
    
    1 - 3 Years
    
    3 - 5 Years
    
    >5 YearsOperating lease obligations
    
    $
    651,862
    
    
    $
    32,838
    
    
    $
    66,708
    
    
    $
    67,232
    
    
    $
    485,084Other liabilities
    
    $
    12,141
    
    
    $
    1,292
    
    
    $
    1,438
    
    
    $
    1,161
    
    
    $
    8,250
  Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
  25




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Cost of services.
   FairValue2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    Total
    
    12/31/08Marketable securities
    
    $
    13,500
    
    
    $
    18,545
    
    
    $
    9,845
    
    
    $
    3,700
    
    
    $
    7,655
    
    
    $
    3,500
    
    
    $
    56,745
    
    
    $
    59,889Average effective interest rate
    
    
    3.60
    %
    
    
    3.94
    %
    
    
    4.24
    %
    
    
    4.25
    %
    
    
    4.63
    %
    
    
    4.85
    %
 Foreign currency risk
   26




---



##### 



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 III

Thomas L. Monahan IIIChief Executive OfficerApril 22, 2009
 /s/ Chao Liu

Chao LiuChief Financial OfficerApril 22, 2009
 27




---



##### 



Report of Independent Registered Public Accounting Firm
 
        
 28




---



##### 



Report of Independent Registered Public Accounting Firm
 
       
 29




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 December 31,2008
    
    
    2007(Restated)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    16,214
    
    
    $
    47,585Marketable securities
    
    
    13,545
    
    
    
    24,153Membership fees receivable, net
    
    
    127,007
    
    
    
    161,336Deferred income taxes, net
    
    
    12,459
    
    
    
    12,710Deferred incentive compensation
    
    
    12,621
    
    
    
    15,544Prepaid expenses and other current assets
    
    
    9,140
    
    
    
    10,638Total current assets
    
    
    190,986
    
    
    
    271,966Deferred income taxes, net
    
    
    41,427
    
    
    
    24,307Marketable securities
    
    
    46,344
    
    
    
    72,618Property and equipment, net
    
    
    109,133
    
    
    
    91,904Goodwill
    
    
    26,392
    
    
    
    42,626Intangible assets, net
    
    
    17,266
    
    
    
    22,143Other non-current assets
    
    
    14,644
    
    
    
    19,208Total assets
    
    $
    446,192
    
    
    $
    544,772LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    66,178
    
    
    $
    62,681Accrued incentive compensation
    
    
    25,145
    
    
    
    31,355Deferred revenues
    
    
    264,253
    
    
    
    323,395Total current liabilities
    
    
    355,576
    
    
    
    417,431Other liabilities
    
    
    68,007
    
    
    
    59,794Total liabilities
    
    
    423,583
    
    
    
    477,225Commitments and contingenciesStockholders equity:Common stock, par value $0.01; 100,000,000 shares authorized; 43,205,367 and 43,119,512 shares
issued and 34,043,752 and 34,993,581 shares outstanding at December 31, 2008 and 2007,
respectively
    
    
    432
    
    
    
    431Additional paid-in-capital
    
    
    395,434
    
    
    
    383,636Retained earnings
    
    
    254,285
    
    
    
    269,429Accumulated elements of other comprehensive income (loss)
    
    
    55
    
    
    
    (194
    )Treasury stock, at cost, 9,161,615 and 8,125,931 shares at December 31, 2008 and 2007, respectively
    
    
    (627,597
    )
    
    
    (585,755
    )Total stockholders equity
    
    
    22,609
    
    
    
    67,547Total liabilities and stockholders equity
    
    $
    446,192
    
    
    $
    544,772
  30




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 Year ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Revenues
    
    $
    558,352
    
    
    $
    532,716
    
    
    $
    460,623Costs and expenses:Cost of services
    
    
    179,950
    
    
    
    183,088
    
    
    
    164,022Member relations and marketing
    
    
    161,670
    
    
    
    150,032
    
    
    
    122,177General and administrative
    
    
    76,120
    
    
    
    71,984
    
    
    
    59,629Depreciation and amortization
    
    
    21,631
    
    
    
    15,573
    
    
    
    10,381Impairment loss
    
    
    27,449
    
    
    
    
    
    
    
    Restructuring costs
    
    
    8,006
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    474,826
    
    
    
    420,677
    
    
    
    356,209Income from operations
    
    
    83,526
    
    
    
    112,039
    
    
    
    104,414Other (expense) income, net
    
    
    (5,438
    )
    
    
    16,049
    
    
    
    24,318Income before provision for income taxes
    
    
    78,088
    
    
    
    128,088
    
    
    
    128,732Provision for income taxes
    
    
    33,291
    
    
    
    47,501
    
    
    
    49,561Net income
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171Earnings per share:Basic
    
    $
    1.31
    
    
    $
    2.20
    
    
    $
    1.99Diluted
    
    $
    1.30
    
    
    $
    2.17
    
    
    $
    1.94Dividends per share
    
    $
    1.76
    
    
    $
    1.60
    
    
    $
    1.20Weighted average shares outstanding:Basic
    
    
    34,205
    
    
    
    36,666
    
    
    
    39,712Diluted
    
    
    34,329
    
    
    
    37,159
    
    
    
    40,721
  31




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Cash flows from operating activities:Net income
    
    $
    44,797
    
    
    $
    80,587
    
    
    $
    79,171Adjustments to reconcile net income to net cash flows provided by operating activities:Deferred income taxes
    
    
    (22,064
    )
    
    
    (10,923
    )
    
    
    34,139Amortization of marketable securities premiums (discounts), net
    
    
    695
    
    
    
    (449
    )
    
    
    (2,389
    )Share-based compensation
    
    
    12,525
    
    
    
    22,764
    
    
    
    25,306Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (2,398
    )
    
    
    (41,225
    )Depreciation and amortization
    
    
    21,631
    
    
    
    15,573
    
    
    
    10,381Impairment loss
    
    
    27,449
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    36,112
    
    
    
    (6,688
    )
    
    
    (32,865
    )Deferred incentive compensation
    
    
    2,923
    
    
    
    (2,384
    )
    
    
    (1,671
    )Prepaid expenses and other current assets
    
    
    2,283
    
    
    
    (645
    )
    
    
    (2,210
    )Other non-current assets
    
    
    6,375
    
    
    
    (5,578
    )
    
    
    (8,564
    )Accounts payable and accrued liabilities
    
    
    11,053
    
    
    
    (11,739
    )
    
    
    23,933Accrued incentive compensation
    
    
    (6,210
    )
    
    
    6,293
    
    
    
    (1,983
    )Deferred revenues
    
    
    (60,548
    )
    
    
    14,724
    
    
    
    47,371Other liabilities
    
    
    8,211
    
    
    
    10,904
    
    
    
    6,877Net cash flows provided by operating activities
    
    
    85,232
    
    
    
    110,041
    
    
    
    136,271Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (42,483
    )
    
    
    (34,532
    )
    
    
    (17,743
    )Cost method investment
    
    
    (386
    )
    
    
    (3,829
    )
    
    
    Acquisition of businesses, net of cash acquired
    
    
    (10,005
    )
    
    
    (61,593
    )
    
    
    Purchases of marketable securities
    
    
    (12,489
    )
    
    
    (108,801
    )
    
    
    (196,920
    )Sales and maturities of marketable securities
    
    
    49,024
    
    
    
    330,556
    
    
    
    2,635Net cash flows (used in) provided by investing activities
    
    
    (16,339
    )
    
    
    121,801
    
    
    
    (212,028
    )Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    100
    
    
    
    691
    
    
    
    2,979Proceeds from issuance of common stock under the employee stock purchase plan
    
    
    1,419
    
    
    
    2,087
    
    
    
    2,024Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    2,398
    
    
    
    41,225Purchase of treasury shares
    
    
    (41,842
    )
    
    
    (302,974
    )
    
    
    (175,985
    )Payment of dividends
    
    
    (59,941
    )
    
    
    (57,826
    )
    
    
    (47,395
    )Net cash flows used in financing activities
    
    
    (100,264
    )
    
    
    (355,624
    )
    
    
    (177,152
    )Net decrease in cash and cash equivalents
    
    
    (31,371
    )
    
    
    (123,782
    )
    
    
    (252,909
    )Cash and cash equivalents, beginning of year
    
    
    47,585
    
    
    
    171,367
    
    
    
    424,276Cash and cash equivalents, end of year
    
    $
    16,214
    
    
    $
    47,585
    
    
    $
    171,367
  32




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Years ended December 31, 2006, 2007, and 2008
(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, 2005
    
    
    39,482,727
    
    
    $
    414
    
    
    $
    277,028
    
    
    $
    214,892
    
    
    $
    (124
    )
    
    $
    (106,796
    )
    
    $
    385,414
    
    
    $
    Issuance of common stock upon the
exercise of common stock options
    
    
    1,378,917
    
    
    
    14
    
    
    
    2,965
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,979
    
    
    
    Issuance of common stock under the
employee stock purchase plan
    
    
    26,875
    
    
    
    
    
    
    
    2,024
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    25,465
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,465
    
    
    
    Tax effect of share-based
compensation
    
    
    
    
    
    
    
    
    
    
    46,508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,508
    
    
    
    Purchase of treasury shares
    
    
    (1,940,611
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (175,985
    )
    
    
    (175,985
    )
    
    
    Unrealized losses on
available-for-sale marketable
securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (316
    )
    
    
    
    
    
    
    (316
    )
    
    
    (316
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,395
    )
    
    
    
    
    
    
    
    
    
    
    (47,395
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,171
    
    
    
    
    
    
    
    
    
    
    
    79,171
    
    
    
    79,171Balance at December 31, 2006
    
    
    38,947,908
    
    
    $
    428
    
    
    $
    353,990
    
    
    $
    246,668
    
    
    $
    (440
    )
    
    $
    (282,781
    )
    
    $
    317,865
    
    
    $
    78,855Issuance of common stock upon the
exercise of common stock options
and release of restricted stock
units
    
    
    280,510
    
    
    
    3
    
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    688
    
    
    
    Issuance of common stock under the
employee stock purchase plan
    
    
    33,677
    
    
    
    
    
    
    
    2,087
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,087
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    22,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,764
    
    
    
    Tax effect of share-based
compensation
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,110
    
    
    
    Purchase of treasury shares
    
    
    (4,268,514
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (302,974
    )
    
    
    (302,974
    )
    
    
    Unrealized gains 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
    )
    
    
    Unrealized gains 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 (Restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,797
    
    
    
    
    
    
    
    
    
    
    
    44,797
    
    
    
    44,797Balance at December 31, 2008 (Restated)
    
    
    34,043,752
    
    
    $
    432
    
    
    $
    395,434
    
    
    $
    254,285
    
    
    $
    55
    
    
    $
    (627,597
    )
    
    $
    22,609
    
    
    $
    45,046
  33




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
  Note 2. Restatement and Summary of significant accounting policies
 Restatement
    34




---



##### 



RESTATED CONSOLIDATED BALANCE SHEET
December 31, 2008
(In thousands, except share amounts)
 Originallyreported
    
    
    Adjustments
    
    
    Restated
    
    
    NotesASSETSCurrent assets:Cash and cash equivalents
    
    $
    16,214
    
    
    $
    
    
    
    $
    16,214Marketable securities
    
    
    13,545
    
    
    
    
    
    
    
    13,545Membership fees receivable, net
    
    
    127,007
    
    
    
    
    
    
    
    127,007Deferred income taxes, net
    
    
    12,459
    
    
    
    
    
    
    
    12,459Deferred incentive compensation
    
    
    12,621
    
    
    
    
    
    
    
    12,621Prepaid expenses and other current assets
    
    
    9,140
    
    
    
    
    
    
    
    9,140Total current assets
    
    
    190,986
    
    
    
    
    
    
    
    190,986Deferred income taxes, net
    
    
    37,761
    
    
    
    3,666
    
    
    
    41,427
    
    
    CMarketable securities
    
    
    46,344
    
    
    
    
    
    
    
    46,344Property and equipment, net
    
    
    109,133
    
    
    
    
    
    
    
    109,133Goodwill
    
    
    26,392
    
    
    
    
    
    
    
    26,392Intangible assets, net
    
    
    21,205
    
    
    
    (3,939
    )
    
    
    17,266
    
    
    BOther non-current assets
    
    
    14,644
    
    
    
    
    
    
    
    14,644Total assets
    
    $
    446,465
    
    
    $
    (273
    )
    
    $
    446,192LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    66,367
    
    
    $
    (189
    )
    
    $
    66,178
    
    
    AAccrued incentive compensation
    
    
    25,145
    
    
    
    
    
    
    
    25,145Deferred revenues
    
    
    264,253
    
    
    
    
    
    
    
    264,253Total current liabilities
    
    
    355,765
    
    
    
    (189
    )
    
    
    355,576Other liabilities
    
    
    62,097
    
    
    
    5,910
    
    
    
    68,007
    
    
    ATotal liabilities
    
    
    417,862
    
    
    
    5,721
    
    
    
    423,583Commitments and contingenciesStockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized; 43,205,367 and 43,119,512 shares issued and
34,043,752 and 34,993,581 shares outstanding at December
31, 2008 and 2007, respectively
    
    
    432
    
    
    
    
    
    
    
    432Additional paid-in-capital
    
    
    395,434
    
    
    
    
    
    
    
    395,434Retained earnings
    
    
    260,279
    
    
    
    (5,994
    )
    
    
    254,285Accumulated elements of other comprehensive income (loss)
    
    
    55
    
    
    
    
    
    
    
    55Treasury stock, at cost, 9,161,615 and 8,125,931 shares
at December 31, 2008 and 2007, respectively
    
    
    (627,597
    )
    
    
    
    
    
    
    (627,597
    )Total stockholders equity
    
    
    28,603
    
    
    
    (5,994
    )
    
    
    22,609Total liabilities and stockholders equity
    
    $
    446,465
    
    
    $
    (273
    )
    
    $
    446,192
 35




---



##### 



RESTATED CONSOLIDATED STATEMENT OF INCOME
Year ended December 31, 2008
(In thousands, except per share amounts)
 OriginallyReported
    
    
    Adjustments
    
    
    Restated
    
    
    NotesRevenues
    
    $
    558,352
    
    
    $
    
    
    
    $
    558,352Costs and expenses:Cost of services
    
    
    176,552
    
    
    
    3,398
    
    
    
    179,950
    
    
    AMember relations and marketing
    
    
    160,259
    
    
    
    1,411
    
    
    
    161,670
    
    
    AGeneral and administrative
    
    
    75,208
    
    
    
    912
    
    
    
    76,120
    
    
    ADepreciation and amortization
    
    
    21,895
    
    
    
    (264
    )
    
    
    21,631
    
    
    BImpairment loss
    
    
    23,246
    
    
    
    4,203
    
    
    
    27,449
    
    
    BRestructuring costs
    
    
    8,006
    
    
    
    
    
    
    
    8,006Total costs and expenses
    
    
    465,166
    
    
    
    9,660
    
    
    
    474,826Income from operations
    
    
    93,186
    
    
    
    (9,660
    )
    
    
    83,526Other (expense) income, net
    
    
    (5,438
    )
    
    
    
    
    
    
    (5,438
    )Income before provision for income taxes
    
    
    87,748
    
    
    
    (9,660
    )
    
    
    78,088Provision for income taxes
    
    
    36,957
    
    
    
    (3,666
    )
    
    
    33,291
    
    
    CNet income
    
    $
    50,791
    
    
    $
    (5,994
    )
    
    $
    44,797Earnings per share:Basic
    
    $
    1.48
    
    
    $
    (0.17
    )
    
    $
    1.31Diluted
    
    $
    1.48
    
    
    $
    (0.18
    )
    
    $
    1.30Weighted average shares outstanding:Basic
    
    
    34,205
    
    
    
    
    
    
    
    34,205Diluted
    
    
    34,329
    
    
    
    
    
    
    
    34,329
  (A)
    
    Rent expense The adjustment to rent expense results from scheduled rent increases in
the Companys headquarters lease. The scheduled rent increases, which are calculated
pursuant to a formula, not to exceed 1.85% per year through 2017, and 2% per year
thereafter, previously had been evaluated as contingent increases that would not be
reflected in the Companys financial statements until actually incurred. In connection with
the March 2009 rent payment, management re-evaluated the lease terms and concluded that the
rent increases should have been accounted for as fixed increases, which are required to be
accrued on a straight-line basis over the twenty-year life of the lease. The adjustment
resulted in the accrual of additional rent expense of $5.7 million in 2008.(B)
    
    Impairment loss As of October 1, 2008, the Company completed impairment tests of
goodwill, intangible assets, and other long-lived assets and identified and recorded an
impairment loss of $23.2 million related to the goodwill and intangible assets recorded upon
the acquisition of Information Technology Toolbox, Inc. (now doing business as Toolbox.com).
The impairment charge recorded for certain amortizable intangible assets, consisting
principally of customer relationships and trade name, was understated by $4.2 million. In
conjunction with the lease expense restatement, the Company recorded this additional
adjustment, thereby increasing the impairment loss to $27.4 million, and decreased
amortization expense recorded in the fourth quarter by $0.3 million based upon the restated
cost basis of the previous gross intangible asset balances.(C)
    
    Provision for income taxes The entry in the income tax accounts reflect the appropriate
income tax impact of the restatement adjustments in (A) and (B) above.
  36




---



##### 



Basis of presentation
  Use of estimates in preparation of financial statements
  Foreign currency
   Cash equivalents and marketable securities
  Allowance for uncollectible revenue
  Property and equipment
  37




---



##### 



Goodwill
     Intangible assets, net
  Recovery of long-lived assets
  Fair value of financial instruments
  Revenue recognition
 Revenue Recognition
  38




---



##### 



Deferred incentive compensation
  Share-based compensation
 Share-Based
Payment ®
  Income taxes
  Accounting for Uncertainty
in Income Taxes-an interpretation of FASB Statement 109 Accounting for Income Taxes
 Concentration of credit risk and sources of revenues
  39




---



##### 



Accumulated
elements of other comprehensive income (loss)
  December 31,2008
    
    
    2007Unrealized gains, net of tax, for available-for-sale marketable securities
    
    $
    1,071
    
    
    $
    877Unrealized losses, net of tax, for forward currency exchange contracts
    
    
    (1,390
    )
    
    
    (1,071
    )Cumulative translation adjustment
    
    
    374
    
    
    
    Accumulated elements of other comprehensive income (loss)
    
    $
    55
    
    
    $
    (194
    )
 Earnings per share
  Year ended December 31,2008
    
    
    2007
    
    
    2006Basic weighted average shares outstanding
    
    
    34,205
    
    
    
    36,666
    
    
    
    39,712Effect of dilutive shares outstanding
    
    
    124
    
    
    
    493
    
    
    
    1,009Diluted weighted average shares outstanding
    
    
    34,329
    
    
    
    37,159
    
    
    
    40,721
  Note 3. Recent accounting pronouncements
 Recently adopted
 Fair
Value Measurements
 40




---



##### 



The
Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB
Statement No. 115
 Not yet adopted
 Business Combinations
 Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement
No. 133 Accounting for Derivative Instruments and Hedging
Activities
 Note 4. Acquisitions
 2008 Acquisitions
  2007 Acquisitions
   Net working capital
    
    $
    1,547Property and equipment
    
    
    600Intangible assets
    
    
    20,294Goodwill (deductible for tax purposes)
    
    
    35,916Allocated purchase price
    
    $
    58,357
 41




---



##### 



Note 5. Fair value measurements
  
 
 
  Fair Valueas ofDecember 31,
    
    Fair Value Measurements Using Fair Value Hierarchy2008
    
    Level 1
    
    Level 2
    
    Level 3Financial assetsCash and cash equivalents
    
    $
    16,214
    
    
    $
    16,214
    
    
    $
    
    
    
    $
    Available-for-sale marketable securities
    
    
    59,889
    
    
    
    59,889
    
    
    
    
    
    
    
    Variable insurance products held in a Rabbi Trust
    
    
    10,948
    
    
    
    
    
    
    
    10,948
    
    
    
    Financial liabilitiesForward currency exchange contracts
    
    $
    4,057
    
    
    $
    
    
    
    $
    4,057
    
    
    $
    
 42




---



##### 



Note 6. Marketable securities
  December 31, 2008Gross
    
    
    GrossMarket
    
    
    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, 2007Gross
    
    
    GrossMarket
    
    
    Amortized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Cost
    
    
    Gains
    
    
    LossesU.S. Treasury notes
    
    $
    57,033
    
    
    $
    56,641
    
    
    $
    392
    
    
    $
    Washington D.C. tax exempt bonds
    
    
    39,738
    
    
    
    38,694
    
    
    
    1,044
    
    
    
    Total marketable securities
    
    $
    96,771
    
    
    $
    95,335
    
    
    $
    1,436
    
    
    $
    
  December 31, 2008Fair Market
    
    
    AmortizedValue
    
    
    CostLess than one year
    
    $
    13,545
    
    
    $
    13,502Matures in 1 to 5 years
    
    
    42,804
    
    
    
    41,081Matures in 6 to 10 years
    
    
    3,540
    
    
    
    3,521Total marketable securities
    
    $
    59,889
    
    
    $
    58,104
  Note 7. Membership fees receivable
  December 31,2008
    
    
    2007Billed
    
    $
    103,478
    
    
    $
    117,738Unbilled
    
    
    28,460
    
    
    
    45,346131,938
    
    
    
    163,084Allowance for uncollectible revenue
    
    
    (4,931
    )
    
    
    (1,748
    )Membership fees receivable, net
    
    $
    127,007
    
    
    $
    161,336
 Note 8. Property and equipment
  December 31,2008
    
    
    2007Furniture, fixtures, and equipment
    
    $
    41,651
    
    
    $
    31,815Leasehold improvements
    
    
    83,250
    
    
    
    72,741Computer software and Web site development costs
    
    
    17,185
    
    
    
    14,752142,086
    
    
    
    119,308Accumulated depreciation
    
    
    (32,953
    )
    
    
    (27,404
    )Property and equipment, net
    
    $
    109,133
    
    
    $
    91,904
  43




---



##### 



Note 9. Goodwill and intangible assets
  December 31,2008
    
    
    2007Beginning of year
    
    $
    42,626
    
    
    $
    6,364Goodwill acquired
    
    
    6,712
    
    
    
    36,262Impairment loss
    
    
    (22,946
    )
    
    
    Goodwill
    
    $
    26,392
    
    
    $
    42,626
  Note 10. Accounts payable and accrued liabilities
  December 31,2008
    
    
    2007(Restated)Accounts payable
    
    $
    6,658
    
    
    $
    11,319Advanced membership payments received
    
    
    15,402
    
    
    
    14,197Other accrued liabilities
    
    
    44,118
    
    
    
    37,165Accounts payable and accrued liabilities
    
    $
    66,178
    
    
    $
    62,681
 Note 11. Other liabilities
  December 31,2008
    
    
    2007(Restated)Deferred compensation
    
    $
    7,256
    
    
    $
    12,242Lease incentives
    
    
    35,558
    
    
    
    31,201Deferred rent benefit  long term
    
    
    17,148
    
    
    
    8,081Other
    
    
    8,045
    
    
    
    8,270Total other liabilities
    
    $
    68,007
    
    
    $
    59,794
 Note 12. Stockholders equity and share-based compensation
 Share-based compensation
  44




---



##### 



Equity incentive plans
  Valuation assumptions
  Year ended December 31,2008
    
    2007
    
    2006Risk-free interest rate
    
    
    4.31
    %
    
    
    4.47
    %
    
    
    4.80
    %Dividend yield
    
    
    3.86
    %
    
    
    2.01
    %
    
    
    1.29
    %Expected life of option (in years)
    
    
    5.1
    
    
    
    4.8
    
    
    
    4.5Expected volatility
    
    
    35
    %
    
    
    30
    %
    
    
    30
    %Weighted-average fair value of share-based compensation awards granted
    
    $
    7.37
    
    
    $
    17.85
    
    
    $
    26.14
 45




---



##### 



Common stock options
  2008
    
    
    2007
    
    
    2006Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Average
    
    
    Number
    
    
    Average
    
    
    Number
    
    
    Averageof Options
    
    
    Exercise Price
    
    
    of Options
    
    
    Exercise Price
    
    
    of Options
    
    
    Exercise PriceOutstanding, beginning of year
    
    
    2,198,953
    
    
    $
    53.28
    
    
    
    2,942,132
    
    
    $
    50.63
    
    
    
    5,271,183
    
    
    $
    44.96Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (326,869
    )
    
    
    61.14
    
    
    
    (149,250
    )
    
    
    56.92
    
    
    
    (152,262
    )
    
    
    54.62Exercised
    
    
    (69,057
    )
    
    
    29.74
    
    
    
    (593,929
    )
    
    
    39.20
    
    
    
    (2,176,789
    )
    
    
    36.71Outstanding, end of year
    
    
    1,803,027
    
    
    $
    52.75
    
    
    
    2,198,953
    
    
    $
    53.28
    
    
    
    2,942,132
    
    
    $
    50.63Vested or expected to vest, end of year
    
    
    1,701,917
    
    
    $
    51.97
    
    
    
    2,151,328
    
    
    $
    53.13
    
    
    
    2,849.979
    
    
    $
    50.39Exercisable, end of year
    
    
    1,580,902
    
    
    $
    50.89
    
    
    
    1,338,954
    
    
    $
    48.66
    
    
    
    881,508
    
    
    $
    44.15
   Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    
    Average
    
    
    
    
    
    
    Weighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    
    
    
    
    Average
    
    
    RemainingExercise
    
    
    Contractual
    
    
    
    
    
    
    Exercise
    
    
    ContractualRange of Exercise Prices
    
    Shares
    
    
    Price
    
    
    Life-Years
    
    
    Shares
    
    
    Price
    
    
    Life-Years$21.19 - $45.10
    
    
    849,786
    
    
    $
    39.78
    
    
    
    2.86
    
    
    
    848,536
    
    
    $
    39.79
    
    
    
    2.8646.45    -   64.30
    
    
    142,740
    
    
    
    52.95
    
    
    
    3.72
    
    
    
    142,115
    
    
    
    52.90
    
    
    
    3.7264.88   -   89.70
    
    
    810,501
    
    
    
    66.31
    
    
    
    3.24
    
    
    
    590,251
    
    
    
    66.36
    
    
    
    3.24$21.19 - $89.70
    
    
    1,803,027
    
    
    $
    52.75
    
    
    
    3.10
    
    
    
    1,580,902
    
    
    $
    50.89
    
    
    
    3.08
 Stock appreciation rights
  2008
    
    
    2007
    
    
    2006Number 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
    
    
    1,293,319
    
    
    $
    83.82
    
    
    
    614,145
    
    
    $
    97.36
    
    
    
    
    
    
    $
    Granted
    
    
    816,507
    
    
    
    40.95
    
    
    
    840,486
    
    
    
    74.48
    
    
    
    628,150
    
    
    
    97.36Forfeited
    
    
    (261,563
    )
    
    
    74.80
    
    
    
    (161,312
    )
    
    
    86.67
    
    
    
    (14,005
    )
    
    
    97.56Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, end of year
    
    
    1,848,263
    
    
    $
    66.16
    
    
    
    1,293,319
    
    
    $
    83.82
    
    
    
    614,145
    
    
    $
    97.36Vested or expected to vest, end of year
    
    
    1,270,404
    
    
    $
    69.22
    
    
    
    1,171,169
    
    
    $
    84.13
    
    
    
    579,386
    
    
    $
    97.36Exercisable, end of year
    
    
    383,237
    
    
    $
    87.38
    
    
    
    134,292
    
    
    $
    97.52
    
    
    
    
    
    
    
    
  46




---



##### 



Stock Appreciation Rights Outstanding
    
    
    Stock Appreciation Rights ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    
    Average
    
    
    
    
    
    
    Weighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    
    
    
    
    Average
    
    
    RemainingExercise
    
    
    Contractual
    
    
    
    
    
    
    Exercise
    
    
    ContractualRange
of Exercise Prices
    
    Shares
    
    
    Price
    
    
    Life-Years
    
    
    Shares
    
    
    Price
    
    
    Life-Years$25.99 - $40.36
    
    
    29,000
    
    
    $
    35.31
    
    
    
    6.47
    
    
    
    
    
    
    $
    
    
    
    
    40.78   -   40.78
    
    
    654,007
    
    
    
    40.78
    
    
    
    6.18
    
    
    
    
    
    
    
    
    
    
    
    45.74   -   97.56
    
    
    1,165,256
    
    
    
    81.17
    
    
    
    4.93
    
    
    
    383,237
    
    
    
    87.38
    
    
    
    4.68$25.99 - $97.56
    
    
    1,848,263
    
    
    $
    66.16
    
    
    
    5.40
    
    
    
    383,237
    
    
    $
    87.38
    
    
    
    4.68
 Restricted stock units
  2008
    
    
    2007
    
    
    2006Number
    
    
    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
    
    
    ValueOutstanding,
beginning of year
    
    
    101,268
    
    
    $
    84.03
    
    
    
    60,123
    
    
    $
    94.78
    
    
    
    
    
    
    $
    Granted
    
    
    70,235
    
    
    
    36.37
    
    
    
    73,529
    
    
    
    74.07
    
    
    
    60,661
    
    
    
    94.78Forfeited
    
    
    (13,045
    )
    
    
    68.56
    
    
    
    (17,499
    )
    
    
    83.21
    
    
    
    (538
    )
    
    
    94.78Vested
    
    
    (25,262
    )
    
    
    85.26
    
    
    
    (14,885
    )
    
    
    94.78
    
    
    
    
    
    
    
    Outstanding, end of
year
    
    
    133,196
    
    
    $
    60.18
    
    
    
    101,268
    
    
    $
    84.03
    
    
    
    60,123
    
    
    $
    94.78
 Share Repurchases
  Dividends
  Preferred stock
  Note
13. Restructuring costs
  Employers Accounting
for Postemployment Benefits
 47




---



##### 



Note 14. Income taxes
  Year ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Current tax expenseFederal
    
    $
    42,607
    
    
    $
    54,328
    
    
    $
    61,584State and local
    
    
    9,639
    
    
    
    1,547
    
    
    
    Foreign
    
    
    1,865
    
    
    
    1,476
    
    
    
    1,14454,111
    
    
    
    57,351
    
    
    
    62,728Deferred tax (benefit) expenseFederal
    
    
    (19,535
    )
    
    
    (10,552
    )
    
    
    (12,493
    )State and local
    
    
    (841
    )
    
    
    919
    
    
    
    (484
    )Foreign
    
    
    (444
    )
    
    
    (217
    )
    
    
    (190
    )(20,820
    )
    
    
    (9,850
    )
    
    
    (13,167
    )Provision for income taxes
    
    $
    33,291
    
    
    $
    47,501
    
    
    $
    49,561
   Year ended December 31,2008
    
    
    2007
    
    
    2006(Restated)Statutory U.S. federal income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    5.3
    
    
    
    3.3
    
    
    
    3.9Foreign income tax
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    Foreign currency loss
    
    
    1.7
    
    
    
    
    
    
    
    Permanent differences and credits, net
    
    
    1.0
    
    
    
    (1.1
    )
    
    
    (0.4
    )Effective tax rate
    
    
    42.6
    %
    
    
    37.1
    %
    
    
    38.5
    %
 48




---



##### 



December 31,2008
    
    
    2007(Restated)Deferred tax assetsShare-based compensation
    
    $
    16,551
    
    
    $
    14,492Goodwill and intangibles
    
    
    11,305
    
    
    
    946Accrued incentive compensation
    
    
    9,250
    
    
    
    9,196Accruals and reserves
    
    
    5,273
    
    
    
    958Net operating loss and tax credit carry forwards
    
    
    7,612
    
    
    
    8,529Depreciation
    
    
    2,480
    
    
    
    5,086Deferred compensation plan
    
    
    4,244
    
    
    
    4,739Deferred revenue
    
    
    2,411
    
    
    
    3,906Operating leases and lease incentives
    
    
    9,639
    
    
    
    4,505Other
    
    
    2,256
    
    
    
    230Total deferred tax assets
    
    
    71,021
    
    
    
    52,587Valuation allowance
    
    
    (8,211
    )
    
    
    (7,878
    )Total deferred tax assets, net of valuation allowance
    
    
    62,810
    
    
    
    44,709Deferred tax liabilitiesDeferred incentive compensation
    
    
    5,016
    
    
    
    6,177Other
    
    
    3,908
    
    
    
    1,515Total deferred tax liabilities
    
    
    8,924
    
    
    
    7,692Deferred tax assets, net
    
    $
    53,886
    
    
    $
    37,017
     49




---



##### 



December 31,2008
    
    
    2007Balance at beginning of the year
    
    $
    900
    
    
    $
    900Additions based on tax positions related to the current year
    
    
    
    
    
    
    Additions for tax positions of prior years
    
    
    
    
    
    
    Reductions for tax positions of prior years
    
    
    (288
    )
    
    
    Reductions for lapse of statute of limitations
    
    
    (185
    )
    
    
    Settlements
    
    
    
    
    
    
    Balance at end of the year
    
    $
    427
    
    
    $
    900
  Note 15. Employee benefit plans
 Defined contribution 401(k) plan
  Employee stock purchase plan
  Deferred compensation plan
  50




---



##### 



Note 16. Commitments and contingencies
 Operating leases
   Year ended December 31,
    
    (Restated)2009
    
    $
    32,8382010
    
    
    33,2632011
    
    
    33,4452012
    
    
    33,5522013
    
    
    33,680Thereafter
    
    
    485,084Total
    
    $
    651,862
  Other
    51




---



##### 



Note
17. Segments and geographic areas
 Disclosures about Segments of an
Enterprise and Related Information
  United States
    
    
    Europe
    
    
    Other countries
    
    
    Total2008Revenues
    
    $
    382,705
    
    
    $
    98,828
    
    
    $
    76,819
    
    
    $
    558,352Long-lived assets (restated)
    
    
    136,280
    
    
    
    14,730
    
    
    
    1,781
    
    
    
    152,7912007Revenues
    
    
    380,544
    
    
    
    86,595
    
    
    
    65,577
    
    
    
    532,716Long-lived assets
    
    
    149,969
    
    
    
    6,272
    
    
    
    432
    
    
    
    156,6732006Revenues
    
    
    341,740
    
    
    
    66,798
    
    
    
    52,085
    
    
    
    460,623Long-lived assets
    
    
    27,755
    
    
    
    6,765
    
    
    
    294
    
    
    
    34,814
 Note 18. Quarterly financial data (unaudited)
  Quarter Ended March 31, 2008
    
    
    Quarter Ended June 30, 2008Originally
    
    
    
    
    
    
    
    
    
    
    OriginallyReported
    
    
    Adjustments
    
    
    Restated
    
    
    Reported
    
    
    Adjustments
    
    
    RestatedRevenues
    
    $
    138,023
    
    
    $
    
    
    
    $
    138,023
    
    
    $
    141,173
    
    
    $
    
    
    
    $
    141,173Costs and expenses:Cost of services
    
    
    45,055
    
    
    
    1,038
    
    
    
    46,093
    
    
    
    45,612
    
    
    
    779
    
    
    
    46,391Member relations and marketing
    
    
    41,900
    
    
    
    440
    
    
    
    42,340
    
    
    
    40,776
    
    
    
    330
    
    
    
    41,106General and administrative
    
    
    19,727
    
    
    
    282
    
    
    
    20,009
    
    
    
    22,872
    
    
    
    211
    
    
    
    23,083Depreciation and amortization
    
    
    5,562
    
    
    
    
    
    
    
    5,562
    
    
    
    5,183
    
    
    
    
    
    
    
    5,183Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    112,244
    
    
    
    1,760
    
    
    
    114,004
    
    
    
    114,443
    
    
    
    1,320
    
    
    
    115,763Income from operations
    
    
    25,779
    
    
    
    (1,760
    )
    
    
    24,019
    
    
    
    26,730
    
    
    
    (1,320
    )
    
    
    25,410Other (expense) income, net
    
    
    698
    
    
    
    
    
    
    
    698
    
    
    
    941
    
    
    
    
    
    
    
    941Income before provision for income taxes
    
    
    26,477
    
    
    
    (1,760
    )
    
    
    24,717
    
    
    
    27,671
    
    
    
    (1,320
    )
    
    
    26,351Provision for income taxes
    
    
    10,591
    
    
    
    (704
    )
    
    
    9,887
    
    
    
    11,068
    
    
    
    (528
    )
    
    
    10,540Net income
    
    $
    15,886
    
    
    $
    (1,056
    )
    
    $
    14,830
    
    
    $
    16,603
    
    
    $
    (792
    )
    
    $
    15,811Earnings per share:Basic
    
    $
    0.46
    
    
    $
    (0.03
    )
    
    $
    0.43
    
    
    $
    0.49
    
    
    $
    (0.03
    )
    
    $
    0.46Diluted
    
    $
    0.45
    
    
    $
    (0.03
    )
    
    $
    0.42
    
    
    $
    0.49
    
    
    $
    (0.03
    )
    
    $
    0.46Weighted average shares outstanding:Basic
    
    
    34,728
    
    
    
    
    
    
    
    34,728
    
    
    
    34,046
    
    
    
    
    
    
    
    34,046Diluted
    
    
    34,962
    
    
    
    
    
    
    
    34,962
    
    
    
    34,170
    
    
    
    
    
    
    
    34,170
 52




---



##### 



Quarter Ended September 30, 2008
    
    
    Quarter Ended December 31, 2008Originally
    
    
    
    
    
    
    
    
    
    
    Originallyreported
    
    
    Adjustments
    
    
    Restated
    
    
    reported
    
    
    Adjustments
    
    
    RestatedRevenues
    
    $
    142,409
    
    
    $
    
    
    
    $
    142,409
    
    
    $
    136,747
    
    
    $
    
    
    
    $
    136,747Costs and expenses:Cost of services
    
    
    44,051
    
    
    
    779
    
    
    
    44,830
    
    
    
    41,834
    
    
    
    802
    
    
    
    42,636Member relations and marketing
    
    
    39,642
    
    
    
    330
    
    
    
    39,972
    
    
    
    37,941
    
    
    
    311
    
    
    
    38,252General and administrative
    
    
    16,584
    
    
    
    211
    
    
    
    16,795
    
    
    
    16,025
    
    
    
    208
    
    
    
    16,233Depreciation and amortization
    
    
    5,021
    
    
    
    
    
    
    
    5,021
    
    
    
    6,129
    
    
    
    (264
    )
    
    
    5,865Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,246
    
    
    
    4,203
    
    
    
    27,449Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,006
    
    
    
    
    
    
    
    8,006Total costs and expenses
    
    
    105,298
    
    
    
    1,320
    
    
    
    106,618
    
    
    
    133,181
    
    
    
    5,260
    
    
    
    138,441Income (loss) from operations
    
    
    37,111
    
    
    
    (1,320
    )
    
    
    35,791
    
    
    
    3,566
    
    
    
    (5,260
    )
    
    
    (1,694
    )Other (expense) income, net
    
    
    (3,889
    )
    
    
    
    
    
    
    (3,889
    )
    
    
    (3,188
    )
    
    
    
    
    
    
    (3,188
    )Income (loss) before provision for
income taxes
    
    
    33,222
    
    
    
    (1,320
    )
    
    
    31,902
    
    
    
    378
    
    
    
    (5,260
    )
    
    
    (4,882
    )Provision for income taxes
    
    
    12,389
    
    
    
    (489
    )
    
    
    11,900
    
    
    
    2,909
    
    
    
    (1,945
    )
    
    
    964Net income (loss)
    
    $
    20,833
    
    
    $
    (831
    )
    
    $
    20,002
    
    
    $
    (2,531
    )
    
    $
    (3,315
    )
    
    $
    (5,846
    )Earnings (loss) per share:Basic
    
    $
    0.61
    
    
    $
    (0.02
    )
    
    $
    0.59
    
    
    $
    (0.07
    )
    
    $
    (0.10
    )
    
    $
    (0.17
    )Diluted
    
    $
    0.61
    
    
    $
    (0.02
    )
    
    $
    0.59
    
    
    $
    (0.07
    )
    
    $
    (0.10
    )
    
    $
    (0.17
    )Weighted average shares outstanding:Basic
    
    
    34,022
    
    
    
    
    
    
    
    34,022
    
    
    
    34,037
    
    
    
    
    
    
    
    34,037Diluted
    
    
    34,117
    
    
    
    
    
    
    
    34,117
    
    
    
    34,037
    
    
    
    
    
    
    
    34,037
   2007 Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31Revenues
    
    $
    124,525
    
    
    $
    129,697
    
    
    $
    136,288
    
    
    $
    142,206Income from operations
    
    
    25,580
    
    
    
    22,878
    
    
    
    31,551
    
    
    
    32,030Income before provision for income taxes
    
    
    31,495
    
    
    
    28,167
    
    
    
    34,784
    
    
    
    33,642Net income
    
    $
    19,370
    
    
    $
    17,323
    
    
    $
    21,392
    
    
    $
    22,502Earnings per share:Basic
    
    $
    0.50
    
    
    $
    0.47
    
    
    $
    0.60
    
    
    $
    0.64Diluted
    
    $
    0.50
    
    
    $
    0.46
    
    
    $
    0.59
    
    
    $
    0.63
 Note 19. Subsequent events
 Dividends
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A. Controls and Procedures.
 
 53




---



##### 



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  54




---



##### 



Equity Compensation Plan Information
  (A)
    
    
    (B)
    
    
    (C)Number OfSecurities To Be
    
    
    
    
    
    
    Number of SecuritiesIssued Upon
    
    
    
    
    
    
    Remaining AvailableExercise Of
    
    
    Weighted-Average
    
    
    For Future Issuances underOutstanding
    
    
    Exercise Price Of
    
    
    Equity Compensation PlansOptions, Warrants
    
    
    Outstanding Options,
    
    
    (Excluding SecuritiesPlan Category
    
    And Rights
    
    
    Warrants And Rights
    
    
    Reflected In Column (A))Equity compensation plans approved by stockholders
    
    
    3,413,261
    
    
    $
    59.30
    
    
    
    3,434,581Equity compensation plans not approved by
stockholders (1)
    
    
    371,225
    
    
    
    40.37
    
    
    
    Total
    
    
    3,784,486
    
    
    $
    57.44
    
    
    
    3,434,581
 
 (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.
  
 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, 2008 and 2007,Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006,Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006,Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2008,
2007 and 2006, andNotes to Consolidated Financial Statements.
 55




---



##### 



(2)
    
    Except as provided below, all schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission either have been included in
the consolidated financial statements or are not required under the related instructions, or
are not applicable and therefore have been omitted.Schedule II-Valuation and Qualifying Accounts.
 (3)
    
    The exhibits listed below are filed or incorporated by reference as part of this Form 10-K.
 ExhibitNo.
    
    Description of Exhibit3.1
    
    Second Amended and Restated Certificate of Incorporation.*3.2
    
    Amended and Restated Bylaws.*****4.1
    
    Specimen Common Stock Certificate.*10.1
    
    Employment Agreement, dated January 21, 1999, between The Corporate Executive Board Company and James J.
McGonigle.*10.2
    
    Stock Option Agreement Pursuant to The Corporate Advisory Board Company Stock-Based Incentive Compensation Plan,
effective as of October 31, 1997, between The Corporate Executive Board Company and James J. McGonigle, as
amended on January 21, 1999.*10.3
    
    Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities, Non-Competition,
Non-Solicitation and Work Product, dated January 21, 1999, between The Corporate Executive Board Company and
James J. McGonigle.*10.4
    
    Form of Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities,
Non-Competition, Non-Solicitation and Work Product.*10.5
    
    The Corporate Executive Board Company Stock-Based Incentive Compensation Plan, adopted on October 31, 1997, as
amended and restated in February 1999.*** 10.6
    
    Amended Directors Stock Plan and Standard Terms and Conditions for Director Non-qualified Stock Options.*** 10.7
    
    1999 Stock Option Plan and Standard Terms and Conditions for 1999 Stock Option Plan Incentive Stock Options.*** 10.8
    
    Employee Stock Purchase Plan dated June 23, 2000.**10.9
    
    2001 Stock Option Plan. ## 10.10
    
    2002 Non-Executive Stock Incentive Plan. Þ 10.11
    
    2004 Stock Incentive Plan, as amended June 14, 2007. **** 10.12
    
    Non-Competition Agreement, effective as of January 1, 1999, as amended effective October 25, 2001, among The
Advisory Board Company, The Corporate Executive Board Company and David G. Bradley.* #10.13
    
    Agreement of Lease, dated June 25, 1998, between The Corporate Executive Board Company and The George Washington
University.*10.14
    
    License Agreement, effective as of October 31, 1997, between The Corporate Executive Board Company and The
Advisory Board Company.*10.15
    
    Form of term sheet for director non-qualified stock options. ### 10.16
    
    Employment Agreement, dated March 20, 2002, between The Corporate Executive Board Company and Michael A. Archer. ±10.17
    
    The Corporate Executive Board Deferred Compensation Plan, as amended, effective January 1, 2008.10.18
    
    Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan and form of Term
Sheet for Restricted Stock Units. ####10.19
    
    Standard Terms and Conditions for Non-Qualified Stock Options and Stock Appreciation Rights under the 1999 Stock
Option Plan, 2001 Stock Option Plan, 2002 Non-Executive Stock Incentive Plan and the 2004 Stock Incentive Plan
and form of Term Sheet for Stock Appreciation Rights. #####
 56




---



##### 



ExhibitNo.
    
    Description of Exhibit10.20
    
    Employment Agreement, dated May 19, 2006, between The Corporate Executive Board Company and Thomas L. Monahan III. +10.21
    
    Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities, Non-Competition,
Non-Solicitation and Work Product, dated August 20, 1997, between the Companys predecessor and Thomas L.
Monahan III. ++10.22
    
    Employment Agreement, dated July 25, 2006, between The Corporate Executive Board Company and James J. McGonigle
relating to employment, board service, non-competition and related matters. +++10.23
    
    Amendments to the 2004 Stock Incentive Plan, 2002 Non-Executive Stock Incentive Plan, 2001 Stock Option Plan,
1999 Stock Option Plan, Employee Stock Purchase Plan and Directors Stock Plan, adopted December 22, 2006. ++++10.24
    
    2007 Chief Executive Officer Incentive Plan Summary. +++++10.25
    
    Executive Committee Incentive Plan Summary. 10.26
    
    Collaboration Agreement, dated February 6, 2007, with The Advisory Board Company (Confidential treatment has
been requested for portions of this agreement.) 10.27
    
    Severance Agreement, dated July 30, 2004, between The Corporate Executive Board and Glenn Tobin. 10.28
    
    Form of Employer Protection Agreement. 10.29
    
    Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan. 10.30
    
    Form of Indemnity Agreement between The Corporate Executive Board Company and its directors and officers. ±±10.31
    
    Form of Change in Control Agreement between The Corporate Executive Board Company and Melody Jones and Chao Liu. ±±± 14.1
    
    Code of Ethics For Directors, Executives and Employees.21.1
    
    List of the Subsidiaries of The Corporate Executive Board Company.23.1
    
    Consent of Ernst and Young LLP, Independent Registered Public Accounting Firm.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 USC Section 1350.
 
 *
    
    Incorporated by reference to the registrants registration statement on Form S-1, declared
effective by the Securities and Exchange Commission on February 22, 1999 (Registration No.
333-5983).**
    
    Incorporated by reference to Exhibit 10.1 from the Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2000.***
    
    Incorporated by reference to the registrants registration statement on Form S-8, filed with
the Securities and Exchange Commission on March 9, 1999 (Registration No. 333-74145).****
    
    Incorporated by reference to Exhibit 10.11 from the Annual Report Pursuant to Section 13 or
15(d) of the Securities Act of 1934 for the year ended December 31, 2007.*****
    
    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.#
    
    Amendments incorporated by reference to Exhibit 10.1 and 10.2 from
the Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
September 30, 2001.##
    
    Incorporated by reference to Exhibit 10.1 to the registrants
registration statement on Form S-8 filed with the Securities and
Exchange Commission on August 10, 2001 (Registration No. 333-67238). 57




---



##### 



###
    
    Incorporated by reference to Exhibit 10.43 from the Annual Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended December 31, 2001.####
    
    Incorporated by reference to Exhibit 10.1 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2006.#####
    
    Incorporated by reference to Exhibit 10.2 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2006.+
    
    Incorporated by reference to Exhibit 10.1 from the Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 filed with the Securities and Exchange Commission on July 26,
2006.++
    
    Incorporated by reference to Exhibit 10.2 from the Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 filed with the Securities and Exchange Commission on July 26,
2006.+++
    
    Incorporated by reference to Exhibit 10.3 from the Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 filed with the Securities and Exchange Commission on July 26,
2006.++++
    
    Incorporated by reference to Exhibit 10.23 from the Annual Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended December 31, 2006.+++++
    
    Incorporated by reference to Exhibit 10.24 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.25 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.26 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.27 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.28 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.
    
    Incorporated by reference to Exhibit 10.29 from the Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2007.±
    
    Incorporated by reference to Exhibit 10.1 from the Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 2002.±±
    
    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.±±±
    
    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.à
    
    Incorporated by reference to Exhibit 10.21.3 from the Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the year ended December 31, 2002.
    
    Compensation arrangement. 58




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##### 



Report of Independent Registered Public Accounting Firm
 
    
 59




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##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
Schedule II-Valuation and Qualifying Accounts
(In thousands)
 AdditionsCharged toBalance at
    
    Additions
    
    Provision
    
    DeductionsBeginning
    
    Charged to
    
    for Income
    
    from
    
    Balance atof Year
    
    Revenue
    
    Taxes
    
    Reserve
    
    End of YearYear ended December 31, 2008Allowance for uncollectible revenue
    
    $
    1,748
    
    
    $
    15,629
    
    
    $
    
    
    
    $
    12,446
    
    
    $
    4,931Valuation allowance on deferred tax assets (Restated)
    
    
    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
    
    
    
    
    
    
    
    7,878Year ended December 31, 2006Allowance for uncollectible revenue
    
    $
    1,035
    
    
    $
    5,695
    
    
    $
    
    
    
    $
    5,575
    
    
    $
    1,155Valuation allowance on deferred tax assets
    
    
    3,144
    
    
    
    
    
    
    
    2,677
    
    
    
    
    
    
    
    5,821
 60




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##### 



Signatures
  The Corporate Executive Board Company
 By:
    
    /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/ Chao Liu

Chao Liu
    
    Chief Financial Officer
(Principal Financial
Officer and Principal Accounting Officer)/s/ Gregor S. Bailar

Gregor S. Bailar
    
    Director/s/ Stephen M. Carter

Stephen M. Carter
    
    Director/s/ Gordon J. Coburn

Gordon J. Coburn
    
    Director/s/ Robert C. Hall

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

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

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

Daniel O. Leemon
    
    Director
 61




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##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description of Exhibit10.17
    
    
    The Corporate Executive Board Deferred Compensation Plan, as
amended, effective January 1, 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.
 62