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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

(Mark One)

|    |  |                                                                                      
|--- |  | -------------------------------------------------------------------------------------
|[x] |  | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the fiscal year ended
December 31, 2003.or

|      |  |                                                                                          
|----- |  | -----------------------------------------------------------------------------------------
|[   ] |  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Commission File Number: 000-24799



|THE CORPORATE EXECUTIVE BOARD COMPANY
|-------------------------------------

(Exact name of registrant as specified in its charter)


|                                                                                                    |  |                                                   
|--------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware
(State or other jurisdiction
of incorporation or organization)                             |  | 52-2056410
(I.R.S. Employer
Identification Number)
|                                                                                                    |  |                                                   
|2000 Pennsylvania Avenue, N.W.
Suite 6000
Washington, D.C.
(Address of principal executive offices) |  | 20006
(Zip Code)                                  

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

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

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

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

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

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

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

Based upon the closing price of the registrants common stock as of June
30, 2003, the aggregate market value of the common stock held by non-affiliates
of the registrant was $1,371,283,192*.

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As of February 6, 2004, The Corporate Executive Board Company had
outstanding 37,289,851 shares of Common Stock, par value $0.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

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

None.



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

A NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including information incorporated into
this document by reference, contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Statements that are not historical facts,
including statements about our beliefs or expectations, are forward-looking
statements, and are contained throughout this Annual Report on Form 10-K,
including under the sections entitled Business and Managements Discussion
and Analysis of Financial Condition and Results of Operations. These
statements are based on our managements beliefs and assumptions and on
information currently available to our management. Forward-looking statements
include the information concerning our possible or assumed results of
operations, business strategies, financing plans, competitive position and
potential growth opportunities. Forward-looking statements include all
statements that are not historical facts and can be identified by the use of
forward-looking terminology such as the words believes, expects,
anticipates, intends, plans or estimates or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. You should not put undue reliance on any
forward-looking statements. All forward-looking statements contained in this
Annual Report on Form 10-K are qualified by these cautionary statements and are
made only as of the date this Annual Report on Form 10-K is filed. We
undertake no obligation, other than as required by law, to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

PART I

Item 1. Business.

Overview

We provide best practices research, decision support tools and executive education focusing on
corporate strategy, operations and general management issues. Best practices
research supports senior executive decision making by identifying and analyzing
specific management initiatives, processes and strategies that have been
determined to produce the best results in solving common business problems or
challenges. We are a Delaware corporation formed in October 1997. We maintain
our executive offices in Washington, D.C., at 2000 Pennsylvania
Avenue, N.W., Suite 6000,
Washington, D.C. 20006.

We provide research and analysis to a membership of over 2,100 of the
worlds largest and most prestigious corporations. For a fixed annual fee,
members of each research program have access to an integrated set of services,
typically including:



| |  |  | best practices research studies,
| | - |  | --------------------------------
|
| |  |  | executive education seminars,   

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| |  |  | customized research briefs,                                   
| | - |  | --------------------------------------------------------------
|
| |  |  | Web-based access to the
programs digital content database and
|
| |  |  | decision support tools.                                       

For each of the last three years, our client renewal rate (defined as the
percentage of member institutions renewed, adjusted to reflect reductions in
member institutions resulting from mergers and acquisitions of
members) has equaled 90%. More than 75% of the Fortune 500 companies are members
of The Corporate Executive Board.

Our membership-based model, in which all customers (or members)
participate in our research and analysis, is central to our business strategy.
This model gives us access to the best business practices of our members and
enables us to provide comprehensive analysis on current business issues,
assessing the collective experiences and knowledge of our members on
leading-edge topics. By participating in The Corporate Executive Board, members
can learn about the best practices of the most progressive corporations in the
world at a fraction of the cost of a customized analysis performed by any of
the major consulting firms. We do not believe that in-house research and
analysis departments at individual corporations could obtain, at any price,
similar information from other corporations about their management practices.
In addition, we do not know of any other entity that enables corporations to
study a broad range of the best business practices of hundreds of other
business enterprises for fixed annual fees.

We offer
27 research programs, each focusing on separate business
constituencies within the following practice areas:



| |  |  | human resources,                      
| | - |  | --------------------------------------
|
| |  |  | strategy and research and development,
|
| |  |  | information technology,               
|
| |  |  | sales and marketing,                  
|
| |  |  | finance,                              
|
| |  |  | legal and real estate,                
|
| |  |  | operations and procurement and        
|
| |  |  | financial services.                   

We have added eight new research programs during the past two years and
anticipate adding four to five new research programs per year for the next two
to three years. Each research program charges a separate fixed annual fee and
is served by a dedicated staff of analysts and researchers. Memberships
generally are renewable on a 12-month basis. The average price per research
program at December 31, 2003, was approximately $35,500.

Our
revenues and costs have grown at compound annual rates of 30.1% and
28.0%, respectively, from December 31, 2000 through
December 31, 2003. Because
each research program provides our membership with standardized best practices
research studies and executive education seminars, new members immediately add
to our revenues while only incrementally increasing our operating costs. Our
growth strategy is to cross-sell additional research programs to existing
members, to add new members and to develop new research programs and decision
support tools.

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Available Information

The Corporate Executive Boards Internet address is
http://www.executiveboard.com. We have made available free of charge through
our Internet Web site (follow Investor Relations tab to link to SEC Filings)
our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), as soon as reasonably practicable
after such material was electronically filed with, or furnished to, the
Securities and Exchange Commission (SEC).

Industry Background

Corporations today are experiencing greater competitive demands and facing
increasingly complex strategic and operational issues. In response to these
challenges, companies are exploring new business strategies as well as
reevaluating the performance of individual departments within their
organizations in order to maintain their competitive edge. The pace of change
is driving a greater interest in gaining access to leading management practices
and solutions to common business problems on a cross-industry basis.

Participants in the professional information services industry have
approached the market for business-focused information by offering a variety of
products and services, including market research, strategic planning,
implementation services and educational programs. Services differ by the level
of engagement, with some offering project-driven or long-term consulting
contracts, and others providing continuous research publishing. Other entities,
such as trade associations, nonprofit think tanks and research and database
companies, also offer research, consulting and education services.

We offer a distinctive approach that combines many of the benefits of
general management consulting and training and development firms. Our research
and analysis covers the same major business issues generally addressed by
management consulting firms, such as managing growth, reducing costs,
streamlining operations and developing strategy. What makes our approach
distinctive is that we provide the same, standardized product to each member of
a research program at a fraction of the cost of consulting services. In common
with training and development firms, we offer educational services both on-site
at member institutions and in large multicompany settings. Unlike training and
development firms, which typically invest only periodically in new curriculum
development, our curriculum is updated constantly by our best practices
research organization and the research agenda is set by the membership. Another
distinguishing characteristic is the seniority and breadth of our audiencewe
brief executive and senior management staff drawn from a broad range of
industry sectors, business units and departments. Because of our high-quality
research product, unique approach to the market and network of leading
companies, we believe that we offer our customers a superior value proposition.

Business Strategy

Our goal is to research and analyze the most pertinent and timely
strategic and operational issues facing our membership, and to distribute the
results of this analysis to our membership in the most efficient, effective and
helpful manner. Our membership model allows us to draw upon a large and growing
universe of issues and solutions of relevance to todays leading corporations.
We actively engage our membership to help focus our research on the most urgent
challenges in the current business environment and to maintain and enhance our
position as the leading provider of best practices research and analysis.



| |  |  | Maintain Membership-Based Model.We believe that our membership-based
model is key to our success. We continually strive to increase our
ties to our members. We encourage members to view us as their
proprietary off-site research facility. Our fixed-fee economic model
promotes frequent use of our products and services. We believe that
member satisfaction grows as members access more of our services, and
that the growing roster of satisfied members validates our business
model and induces new members to join The Corporate Executive Board.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Focus on Best Practices Research.The focus of our work is on
researching best demonstrated business and management practices. Many
large corporations believe that there are research economies and other
benefits that can be realized by learning from the experiences of
similar entities facing common business problems. We believe that
there will be a continuing desire on the                                                                                                                                                                       

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| |   |  | part of progressive
corporations to access ever-evolving solutions to these common
business problems. We believe that our success to date has uniquely
positioned us as a leading source for identifying, studying,
evaluating and communicating these evolving solutions and that our
library of best practices serves as a formidable barrier to entry for
potential competitors.                                                                                                                                                                                                                                                                                                                                                                                         
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Continue Research and Analysis Excellence.We believe that the quality
of our research and analysis has driven our success. We regularly
interact with senior executives at member institutions to identify the
most important strategic and operational issues for research and
analysis. Program directors are responsible for assuring
that our research methodology is applied to all studies and that
research quality is maintained across all research programs. We are
highly selective in our hiring, recruiting only the top graduates of
the leading universities and graduate schools. We emphasize continual
training of all employees in key areas, including industry analysis,
economics, quantitative modeling, root-cause analysis and presentation
skills.
|
| |  |  | Build Membership Network.As our research programs grow in size and
influence, we constantly are expanding our network of executive
contacts at
our member companies. We believe that the growth of this network
benefits members by increasing the number of executives they can
contact for information and by providing them with access to a broader
range of companies. We believe that these positive network
effects further strengthen our membership-based business model.                                                                                                                                                                                                                                                                                        
|
| |  |  | Leverage Economic Model.We derive most of our revenues from fixed
annual fees for our research programs. A substantial portion of our
costs of delivering our products and services in each research program
are fixed and do not vary directly with the number of members. The
leverage in our economic model is further evidenced by the increasing
utilization via the Internet of each research programs digital research library
and decision support tools. Each research
programs proprietary database, including digital content and
on-line tools, assists our member executives in solving their own
challenges on a real-time basis. We
expect to increase revenues and improve program-operating margins as
we add new members to our research programs.      

Growth Strategy

We believe that demand for our services will continue to grow as
corporations recognize the need to improve their performance and seek access to
other companies solutions to common business problems. Our growth strategy
centers on leveraging the formula that we have developed across the past decade
by cross-selling additional subscriptions to existing members, adding new
members and developing new research programs and decision support tools.



| |  |  | Cross-Sell Additional Subscriptions to Existing Members.On average,
individual members currently participate in 2.99 research programs. We actively
cross-sell additional membership subscriptions and believe that
most members are potential participants in up to 18 of the research
programs we currently offer, which are directed at corporate staff
positions maintained by most major companies. We believe that
membership subscription cross-selling opportunities will continue to
increase as we develop new research programs.                      
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Add New Members.We have targeted approximately 2,100 additional
institutions globally, excluding Asia, as potential new members, including
companies with revenues greater than $750 million and financial
institutions with assets in excess of $1 billion.                                                                                                                                                                                                                                                                                                     
|
| |  |  | Develop New Research Programs.We currently offer research programs
covering 27 business constituencies. We have added eight new research
programs during the past two years. We also have identified more than
50 additional corporate constituencies that we might target as we
develop new research programs. This list includes opportunities to
serve corporate functions beyond the 27 we serve today. We believe
that each is a unique constituency with the potential to support a
tailored research agenda and a suite of educational and other
services.

The Membership Network

Our membership-based model, in which all members participate in our
research and analysis, is central to our business strategy. This model gives us
access to the best business practices of our members and

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enables us to provide comprehensive analysis on current business issues,
assessing the collective experience and knowledge of our members on
leading-edge topics. By participating in The Corporate Executive Board, members
can learn about the best practices and access tools and frameworks of the most
progressive corporations in the world at a fraction of the cost of a customized
analysis performed by any of the major consulting firms. We do not believe that
in-house research and analysis departments at individual corporations could
obtain, at any price, similar information from other corporations about their
business practices. We believe that there is no other entity that enables
corporations to study a broad range of business practices from thousands of
other business enterprises for fixed annual fees.

We regularly interact with senior executives at member institutions to
identify the most important strategic and operational issues for research and
analysis and continually strive to increase our ties to our members. Our
products and services are available exclusively to members. Our fixed-fee
economic model promotes frequent use of our products and services. We encourage
members to view us as their proprietary off-site research facility. We believe
that member satisfaction grows as members access more of our services, and that
the growing roster of satisfied members validates our business model and
induces new members to join The Corporate Executive Board.

The following table sets forth information with respect to members,
subscriptions and renewals as of the dates shown:

|                                             |  |              |        |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |         |  
|-------------------------------------------- |  | ------------ | ------ | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                             |  | December 31,
|                                             |  |             
|                                             |  | 1999         |        | 2000 |  | 2001 |         | 2002 |  | 2003
|                                             |  |              |        |      |  |      |         |      |  |     
|Membership programs(1)                       |  |              | 12     |      |  |      | 15      |      |  |      | 18      |   |  |   | 22      |   |  |   | 26      |  
|Member institutions                          |  |              | 1,480  |      |  |      | 1,745   |      |  |      | 1,802   |   |  |   | 1,930   |   |  |   | 2,143   |  
|Total membership
subscriptions               |  |              | 2,790  |      |  |      | 3,543   |      |  |      | 4,364   |   |  |   | 5,257   |   |  |   | 6,414   |  
|Average subscriptions per
member institution |  |              | 1.89   |      |  |      | 2.03    |      |  |      | 2.42    |   |  |   | 2.72    |   |  |   | 2.99    |  
|Client renewal rate(2)                       |  |              | 90     | %    |  |      | 90      | %    |  |      | 90      | % |  |   | 90      | % |  |   | 90      | %
|Contract value (in
thousands)(3)             |  | $            | 80,633 |      |  | $    | 108,542 |      |  | $    | 138,474 |   |  | $ | 176,533 |   |  | $ | 227,913 |  



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|(1) |  | In January 2004, we launched the Controllers Leadership Roundtable, an extension of
our model into the Finance Practice, bringing the current number of membership
programs to 27.                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | For the year then ended. Client renewal rate is defined as the percentage of member
institutions renewed, adjusted to reflect reductions in member institutions
resulting from mergers and acquisitions of members.
|   
|(3) |  | For the year then ended. Contract value is defined as the aggregate annualized
revenue attributed to all agreements in effect at a given date without regard to the
remaining duration of any such agreement.      

Products and Services

General

Our research products and services focus on identifying, analyzing and
describing best demonstrated management practices. In general, our research
focuses primarily on identifying best demonstrated management practices, and
secondarily, on critiquing widely followed but ineffective practices. We
believe that we add value by enabling member companies to enhance revenues and
reduce costs by objectively identifying best corporate practices that solve
urgent corporate problems, and developing tools to help
members implement these practices. In addition, we provide members with support
implementing best practices profiled in our research studies within their own
organizations. These implementation support memberships include both management
tools and associated on-site sessions and are delivered over a 12-month period.

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Our research programs offer a cost-effective, time-efficient opportunity
for senior executives to learn from the practices and experiences of other
corporations from around the world. Member institutions can participate in one
of our research programs for a fraction of the cost of proceeding independently
either through an internal research effort or through engaging a management
consulting firm.

Our best
practice research programs are guided by a rolling 12- to 18-month agenda.
These research programs have a research director who is responsible for
applying our research methodology to produce best practices studies and for
maintaining research quality across all program services. Using Web
and fax polls, steering sessions, teleconferences and one-on-one interviews,
the research programs director works closely with the membership of that
program to identify agenda topics of shared interest and to set the
programs priorities. Each program is staffed by a dedicated team of
researchers, analysts and instructors who collectively research and write the
best practices studies, complete the customized research briefs and present the
findings to the programs membership through a variety of formats.

For a fixed annual fee, members of each research program have access to an
integrated set of services, which typically include best practices research
studies, executive education seminars, customized research briefs and Web-based
access to the programs content database and decision support tools. A
description of each service follows.

Best Practices Research Studies

Our research programs generally publish several best practices research
studies annually, each addressing a specific corporate issue or problem
identified in the research agenda. We design each best practices study to
present the conclusions and supporting best practices in a graphical format,
enabling the intended audience to quickly assimilate the 20 to 200 pages of
research content. We create each report using our structured research
methodology: topic selection; root-cause analysis; secondary research; primary
interviewing; analysis of findings; and report writing. Each program director
can call upon the support of the Chief Research Officer to provide assistance
in framing arguments, screening best practices, developing Web-based
deliverables and editing studies and their derivative executive education
curriculum content.

In the course of researching a best practices study topic, the research
team typically will review thousands of pages of business and academic
literature to ground their understanding of the issues. The teams often will
create and analyze primary data about members operations and performance to
understand key economic leverage points and direct the research to areas that
offer the highest return on member investments. They then will initiate the
research process to identify and evaluate specific business processes,
strategies and management practices, typically conducting hundreds of in-depth
interviews with corporations, industry experts, management consultants and
academic leaders. During the course of its research, a team generally analyzes
and evaluates dozens of specific management practices in an attempt to isolate
the five to 15 most important practices worthy of potential implementation by
members, separating out demonstrated and proven business practices and
disposing of those concepts, whether popular or conventional, that largely have
failed.

Executive Education

We provide our executive education curriculum, which is based on our
proprietary best practices research, to member companies worldwide. We deliver
executive education services through two primary channelsgeneral membership
meetings and, in some programs, tailored on-site seminars. Our executive
education curriculum provides lively, interactive forums for reinforcing our
published best practices research studies.

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Research Briefs

Members of most research programs may assign short-answer, customized
research requests. Individual briefs may take the form of a literature search,
vendor profile, data retrieval or original primary and secondary research,
depending upon the need of the requesting member. Once initiated, each
customized research effort takes from one to 20 business days to complete,
depending on the depth of the information request, the type of research product
desired and the time requirements of the member. Researchers typically begin
their inquiry with a review of our proprietary research archives and then
conduct a broad literature search to identify relevant background material and
practices.

Written research briefs generally contain case studies or profiles of
interviewed institutions, highlighting significant trends, successful practices
and comparative responses to a range of questions. After we have completed and
delivered the written brief to the requesting member, we make the best of these
briefs accessible to other members through proprietary databases. Members are
able to search, select, view and print these research briefs directly from the
research program Web site at no additional charge.

We
believe that the short-answer service of our research programs builds our
proprietary databases, serves as an excellent marketing tool for attracting new
members and encourages members to view us as a reliable and effective resource
for primary research.

Web-Based Proprietary Databases

Each
research program maintains a proprietary electronic database of best practices
and, in most cases, on-line quantitative benchmarking and survey data accessible only
to members of the research program. We continually update our growing
proprietary electronic databases with new corporate practices, quantitative performance
data and related information supplied by other members and derived by our
researchers. We include all information and graphics generated in best
practices research studies and customized research briefs in the databases and
make them accessible to member executives and our staff.

Since 1996, we have been offering our members Internet access to research
content and other services through password-protected Web sites. The Internet
has become an efficient and effective means for us to interact with
our members and to deliver our products and
services to our members and currently is our largest distribution channel.
Through password-protected Web sites, members of each
program may commission customized research briefs, search and access the
electronic library of research studies and graphics, review executive education
modules, access our proprietary decision support tools and meeting schedules and communicate with our staff and other members.

Pricing

Memberships in The Corporate Executive Board research programs are
principally one-year, renewable agreements. Research memberships are generally
payable by members at the beginning of the contract term. At December 31, 2003,
the average price for a program membership was approximately $35,500. The
actual price varies by size of member and by research program, and may be lower
for charter memberships of new research programs. By spreading our
costs over a broad membership and offering a largely standardized research product, we are
able to charge fees that are a small fraction of the typical engagement fees of
specialized research or consulting firms.

We offer an unconditional service guarantee to our members. At any time, a
member may request a refund of their membership fee for a research program,
which is provided on a pro rata basis relative to the remaining term of the
membership. In 2003, members requested refunds for 19 memberships out of more
than 5,200.

Sales and Marketing

We market an integrated set of services, typically consisting of best
practices research studies, executive education, customized research briefs and
Web-based access to our content database and decision support tools, for a
fixed fee per research program. We believe that this marketing strategy
highlights the value to members of our range of services and emphasizes the
membership nature of our business model, actively engaging the membership and
reinforcing members commitment to The Corporate Executive Board.

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The separation of responsibility for new membership sales and membership
renewals reflects the varying difficulty and cost of the respective functions.
New business development representatives are compensated with a base salary and
variable, goal-based incentive bonuses and travel on average 60% of the time,
conducting face-to-face meetings with senior executives at prospective member
institutions. Member services representatives assume more of an in-house
coordinating role, bringing the resources of programs to bear on pressing
member needs.

Competition

We currently have few direct competitors, and those that do exist
generally compete against us only in a single practice area. We compete indirectly
against other professional information services providers, including management
consulting firms, training and development companies, nonprofit think tanks
and research and database companies. We are not aware of any other entity that
enables corporations to study as broad a range of the best corporate management
practices for fixed annual fees.

We believe that the principal competitive factors in our market include
quality and timeliness of research and analysis, reliable delivery, depth and
quality of the membership network, ability to meet changing customer needs,
superior service and affordably priced products. We believe we compete
favorably with respect to each of these factors.

The
Advisory Board Company provides products and services to the health-care industry that are similar to the types of products and services that we
generally provide. We have entered into a noncompetition agreement with The
Advisory Board Company and David Bradley, its former sole stockholder. The
noncompetition agreement generally prohibits us from competing with The
Advisory Board Company with respect to health-care clients and issues and
prohibits The Advisory Board Company and Mr. Bradley from competing with us
with respect to non-health-care clients and issues, other than products and
services relating to advertising, magazines and newspapers, and government
relations and lobbying activities. The agreement was amended in 2001 to extend
through January 1, 2007.

Employees

At
December 31, 2003, we employed 1,222 persons. Of these
employees, 1,129
were located in Washington, D.C. and 93 were located at our facilities in
London, England. None of our employees are represented by a collective
bargaining arrangement. We believe that our relations with our employees are
favorable.

We believe strongly in a culture of meritocracy, rewarding key
contributors with opportunities for rapid professional growth and advancement
as well as competitive compensation. Training is a critical job component for
all of our employees, including industry analysis, economics, quantitative
modeling, root-cause analysis and presentation skills.

Risk Factors

In addition to the other information contained in this Annual report on
Form 10-K, you should carefully consider the following risk factors in
evaluating us and our business.

We depend on renewals of our membership-based services.

We derive most of our revenues from annual memberships for our products
and services. Our prospects therefore depend on our ability to achieve and
sustain high renewal rates on existing research programs and to enter into new
membership arrangements. Failure to achieve high membership renewal rate levels
would have a material adverse effect on our operating results. Our ability to
secure membership renewals depends upon our ability to deliver
consistent, high-quality and timely research and analysis with respect to issues, developments
and trends that members view as important. We cannot assure you that we will be
able to sustain the necessary level of performance to achieve a high rate of
membership renewals. Although we actively market our research programs
throughout the year, historically, more than 40% of all renewals
have taken place in the fourth quarter of the year. See Managements
Discussion and Analysis of Financial Condition and Results of Operations and
Business.

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We cannot know in advance if new products will be successful.

Our future success will depend on our ability to develop new research
programs that address specific industry and business constituencies and the
changing needs of our current and prospective members for information, analysis
and advice. We cannot assure you that our efforts to introduce new research
programs will be successful. The process of internally researching, developing,
launching and gaining client acceptance of new research programs is
time consuming, expensive and inherently risky. Delays or failures during
development or implementation, or lack of market acceptance of new research
programs could have a material adverse effect on our business, financial
condition and results of operations. Our business, financial condition and
results of operations would be materially adversely affected if we were unable
to develop and introduce successful new research programs or other new
products, or to make enhancements to existing research programs in a timely
manner in response to member requirements. See BusinessProducts and
Services.

We may experience difficulties in anticipating market trends.

Our future success will also depend upon our ability to anticipate rapidly
changing market trends and to adapt our research and analysis to meet the
changing information needs of our members. We may fail to continue to provide
helpful and timely research and analysis of developments and trends in a manner
that meets market needs. Any such failure would have a material adverse effect
on our business, financial condition and results of operations. The industry
and business sectors that we analyze undergo frequent and often dramatic
changes, including the introduction of new and the obsolescence of old
products, shifting strategies and market positions of major industry
participants and changing objectives and expectations of users of members
products and services. This environment of rapid and continuous change presents
significant challenges to our ability to provide our members with current and
timely research and analysis on issues of importance. Meeting these challenges
requires the commitment of substantial resources.

We must attract and retain a significant number of highly skilled employees.

Our future success also will depend upon our ability to hire, train,
motivate and retain a significant number of highly skilled employees,
particularly research analysts and sales and marketing staff. Our inability to
do so would have a material adverse effect on our business. We have
experienced, and expect to continue to experience, intense competition for
professional personnel from management consulting firms and other producers of
research and analysis products and services. Many of these firms have
substantially greater financial resources than we have to attract and
compensate qualified personnel. We cannot assure you that we will be successful
in attracting a sufficient number of highly skilled employees in the future, or
that we will be successful in training, motivating and retaining the employees
we are able to hire. See BusinessEmployees.

We are restricted from selling our products and services to the health-care
industry.

At the time of our initial public offering, we entered into an agreement
with The Advisory Board Company that restricts us from selling our
membership-based products and services to companies principally engaged in the
health-care business, although we may sell such products and services to
non-health-care divisions or subsidiaries of health care companies. The
agreement has been extended through January 1, 2007. This restriction may limit
our future growth opportunities.

Continued consolidation in the financial institution industry may adversely
impact our business.

A number of our research programs are oriented toward companies in the
financial services industry. The financial services industry is continuing to
experience substantial consolidation. This consolidation has resulted, and is
expected to continue to result, in a reduction in the number of our financial
institution members. We cannot assure you that this consolidation will not
materially and adversely affect our results of operations. At December 31,
2003, less than 30% of our contract value was attributable to financial

10



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institution members, which include commercial banks, thrifts, credit unions,
credit card issuers, mutual fund companies, consumer credit lenders, brokerage
houses, private and trust banks and insurance companies.

We may experience fluctuations in operating results.

Our operating results may fluctuate significantly due to various factors,
including the growth in and timing of new programs, the timing of the
development, introduction and marketing of new products and services, the
timing of executive education seminars, the timing of the hiring of research
analysts and sales and marketing staff, changes in the spending patterns of our
members, our accounts receivable collection experience, changes in market
demand for research and analysis, foreign currency exchange rate fluctuations,
competitive conditions in the industry and general economic conditions. See
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

We may be unable to protect our intellectual property rights.

We rely on copyright laws, as well as nondisclosure and confidentiality
arrangements, to protect our proprietary rights in our products and services.
We cannot assure you that the steps we have taken to protect our intellectual
property rights will be adequate to deter misappropriation of our rights or
that we will be able to detect unauthorized uses and take timely and effective
steps to enforce our rights. If substantial and material unauthorized uses of
our proprietary products and services were to occur, we would be required to
engage in costly and time-consuming litigation to enforce our rights. We cannot
assure you that we would prevail in such litigation. If others were able to use
our intellectual property, our ability to charge our fees for our products and
services would be adversely affected.

We may be exposed to litigation related to content.

As a publisher and distributor of original research and analysis and user
of third-party content, we face potential liability for defamation, negligence
and copyright and trademark infringement. Any such litigation, whether or not
resulting in a judgment against us, could have a material adverse effect on our
financial condition and results of operations. Third-party content includes
information created or provided by information services organizations and
consultants whom we retain and may be delivered to clients in writing, over the
Internet or orally.

We may be exposed to loss of revenue resulting from our unconditional service
guarantee.

We offer an unconditional service guarantee to our members. At any time, a
member may request a refund of their membership fee for a research program,
which is provided on a pro rata basis relative to the remaining term of the
membership. Requests for refunds of membership fees by a significant number of
our members could have a material adverse effect on our financial condition and
results of operations. See BusinessPricing.

There may be risks related to our status as
  a Qualified High Technology Company.

The Office of Tax
  and Revenue of the Government of the District of Columbia (the Office
  of Tax and Revenue) has adopted regulations in accordance with the New
  E-Conomy Transformation Act of 2000 (the Act) that modify the income
  and franchise tax, sales and use tax and personal property tax regulations,
  effective April 2001. Specifically, the regulations provide certain credits,
  exemptions and other benefits to a Qualified High Technology Company (QHTC).
  In October 2003, we received notification from the Office of Tax and Revenue
  that our certification as a QHTC under the Act had been accepted.
As a QHTC, our Washington, D.C. statutory income tax rate will be 0.0% through 2005 and
  6.0% thereafter, versus 9.975% prior to this qualification, and we are
  eligible for certain Washington, D.C. income tax credits and other benefits.
  We subsequently filed a claim for refund for sales and use taxes previously
  paid to the Office of Tax and Revenue and received a notice of refund denial.
  We cannot assure you that the Office of Tax and Revenue will not deny our appeal
  of this determination and/or reverse its determination of our status as a QHTC under the Act, or
  that our business activities and operations will continue to qualify as QHTC
  activities under the Act in the future.

11



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There may be risks related to our use of Arthur Andersen as our independent
auditors.

Arthur Andersen LLP (Andersen), our former independent public
accountants that audited our financial statements for the fiscal years ended
December 31, 2001, was found guilty by a jury on June 15, 2002 of federal
obstruction of justice in connection with the governments investigation of
Enron Corporation. Andersen ceased practicing before the SEC effective August
31, 2002. It is possible that events arising out of the indictment may
adversely affect the ability of Andersen to satisfy any claims arising from its
provision of auditing and other services to us, including claims that may arise
out of Andersens audit of our financial statements. The SEC has said that it
will continue accepting financial statements audited or reviewed by Andersen
provided that we comply with the applicable rules and orders issued by the SEC
in March 2002 for such purpose.

In the future, should we seek to access the public capital markets, the
SECs current rules require the inclusion or incorporation by reference of
three years of audited financial statements in any prospectus. These rules
would require us to present audited financial statements for one year audited by Andersen until our audited financial statements for the fiscal
year ending December 31, 2004 become available in the first quarter of our
fiscal year 2005. The SEC adopted rules exempting certain issuers filing
Securities Act registration statements containing financial statements audited
by Andersen from having to comply with rules that would also require such
issuers to present manually signed reissued accountants reports and written
consents issued by Andersen. Although we believe that we currently meet the
requirements for such exemptions, if the SEC ceases accepting financial
statements audited by Andersen pursuant to such exemptions, it is possible that
our financial statements for the year ended December 31, 2001 audited by
Andersen might not satisfy the SECs requirements. If this occurs, we would not
be able to access the public capital markets unless Ernst & Young LLP (Ernst &
Young), our current independent auditors, or another independent accounting
firm were able to audit the financial statements originally audited by
Andersen. Any delay or inability to access the public capital markets caused by
those circumstances could have a material adverse effect on us.

Item 2. Properties.

Our headquarters are located in approximately 102,000 square feet of
office space in Washington, D.C., which we lease under an agreement that
expires in 2009. We also lease approximately 103,000 square feet in nearby
buildings in Washington, D.C., under agreements with terms expiring in 2004
through 2019. We lease space in London, England, which is used primarily for
our international marketing efforts. Our facilities accommodate research,
marketing and sales, information technology, administration, graphic and editorial services
and operations personnel. We believe that our existing and planned facilities
will be adequate for our current needs and that additional facilities are
available for lease to meet future needs.

Item 3. Legal Proceedings.

From time to time, we are subject to ordinary routine litigation
incidental to our normal business operations. We are not currently a party to,
and our property is not subject to, any material legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5. Market for Registrants Common Equity and Related Stockholder Matters.

Our common stock has been quoted on the Nasdaq National Market under the
symbol EXBD since our initial public offering on February 23, 1999. As of
February 6, 2004, there were 43 stockholders of record of the common stock. The
following table sets forth, for the periods indicated, the high and low sales
prices per share of our common stock as reported on the Nasdaq National Market.

12



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| |       |  |  |                |  |   |       |  |     |   |       |  | 
| | ----- |  |  | -------------- |  | - | ----- |  | --- | - | ----- |  | 
| |       |  |  |                |  |   | High  |  | Low
| |       |  |  |                |  |   |       |  |    
| | 2002: |  |  |                |  |   |       |  |     |   |       |  | 
| |       |  |  | First quarter  |  | $ | 38.10 |  |     | $ | 28.57 | 
| |       |  |  | Second quarter |  |   | 40.20 |  |     |   | 32.60 | 
| |       |  |  | Third quarter  |  |   | 34.68 |  |     |   | 23.60 | 
| |       |  |  | Fourth quarter |  |   | 35.73 |  |     |   | 26.70 | 
| | 2003: | 
| |       |  |  | First quarter  |  | $ | 36.05 |  |     | $ | 27.95 | 
| |       |  |  | Second quarter |  |   | 43.41 |  |     |   | 34.85 | 
| |       |  |  | Third quarter  |  |   | 48.20 |  |     |   | 37.60 | 
| |       |  |  | Fourth quarter |  |   | 51.70 |  |     |   | 44.29 | 

In February 2003, we announced that our Board of Directors authorized a
share repurchase of up to $75 million of our common stock. Repurchases will be
made from time to time in open market and privately negotiated transactions
subject to market conditions. No minimum number of shares has been fixed. We
have funded, and expect to continue to fund, our share repurchases with cash on
hand and cash generated from operations. During the year ended December 31,
2003, we repurchased 552,007 shares of our common stock at a total
cost of approximately $19,620,000.

In
February 2004, we announced that our Board of Directors declared a
quarterly dividend of $0.075 per share. The dividend is payable on March 31,
2004 to stockholders of record at the close of business on March 10, 2004.
We will fund our dividend payment
with cash on hand and cash generated from operations.

Item 6. Selected Financial Data.

The following table sets forth selected financial and operating data. The
selected financial data presented below as of December 31, 1999, 2000 and 2001,
and for each of the years in the three-year period ended December 31, 2001,
have been derived from our financial statements that have been audited by
Andersen. See BusinessRisk Factors. The selected financial data presented
below as of December 31, 2002 and 2003 and for the years then ended, have been
derived from our financial statements that have been audited by Ernst & Young.
You should read the selected financial data presented below in conjunction with
our financial statements, the notes to our financial statements and
Managements Discussion and Analysis of Financial Condition and Results of
Operations appearing elsewhere in this Annual Report on Form 10-K.

|                                        |                                           |                          |        |                                          |        |      |        |        |        |      |         |        |        |   |         |        |         |   |         |        |         | 
|--------------------------------------- | ----------------------------------------- | ------------------------ | ------ | ---------------------------------------- | ------ | ---- | ------ | ------ | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                        |                                           |                          |        | Year Ended December 31,                 
|                                        |                                           |                          |        |                                         
|                                        |                                           |                          |        | 1999                                     |        | 2000 |        | 2001   |        | 2002 |         | 2003  
|                                        |                                           |                          |        |                                          |        |      |        |        |        |      |         |       
|                                        |                                           |                          |        | (In thousands, except per-share amounts)
|Consolidated Statements of Income Data: |                                           |                          |        |                                          |        |      |        |        |        |      |         |        |        |   |         |        |         |   |         |       
|Revenues                                |                                           | $                        | 70,767 |                                          |        | $    | 95,491 |        |        | $    | 128,112 |        |        | $ | 162,357 |        |         | $ | 210,211 |       
|Costs and expenses:                     |                                           |                          |        |                                          |        |      |        |        |        |      |         |        |        |   |         |        |         |   |         |       
|                                        | Cost of services                          |                          |        | 28,602                                   |        |      |        | 36,094 |        |      |         | 45,738 |        |   |         | 56,147 |         |   |         | 70,974 |        
|                                        | Member relations and marketing            |                          |        | 15,525                                   |        |      |        | 21,236 |        |      |         | 30,219 |        |   |         | 40,768 |         |   |         | 55,301 |        
|                                        | General and administrative                |                          |        | 8,485                                    |        |      |        | 12,021 |        |      |         | 15,877 |        |   |         | 17,493 |         |   |         | 21,632 |        
|                                        | Depreciation                              |                          |        | 1,318                                    |        |      |        | 2,573  |        |      |         | 4,412  |        |   |         | 5,456  |         |   |         | 5,764  |        
|                                        | Stock option and related expenses (1) (2) |                          |        | 383                                      |        |      |        | 1,371  |        |      |         | 1,260  |        |   |         | 668    |         |   |         | 114    |        
|                                        |                                           |                          |        |                                          |        |      |        |        |        |      |         |        |        |   |         |        |         |   |         |       
|                                        |                                           | Total costs and expenses |        |                                          | 54,313 |      |        |        | 73,295 |      |         |        | 97,506 |   |         |        | 120,532 |   |         |        | 153,785 | 
|                                        |                                           |                          |        |                                          |        |      |        |        |        |      |         |        |        |   |         |        |         |   |         |       

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|                                            |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|------------------------------------------- |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|Income from operations                      |  |   | 16,454 |  |  |   | 22,196 |  |  |   | 30,606 |  |  |   | 41,825 |  |  |   | 56,426 | 
|Other income, net                           |  |   | 1,114  |  |  |   | 2,263  |  |  |   | 4,283  |  |  |   | 6,346  |  |  |   | 7,569  | 
|                                            |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Income before provision for income taxes    |  |   | 17,568 |  |  |   | 24,459 |  |  |   | 34,889 |  |  |   | 48,171 |  |  |   | 63,995 | 
|Provision for income taxes                  |  |   | 4,322  |  |  |   | 9,539  |  |  |   | 13,257 |  |  |   | 18,570 |  |  |   | 28,307 | 
|                                            |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Net income                                  |  | $ | 13,246 |  |  | $ | 14,920 |  |  | $ | 21,632 |  |  | $ | 29,601 |  |  | $ | 35,688 | 
|                                            |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Earnings per sharebasic                    |  | $ | 0.50   |  |  | $ | 0.49   |  |  | $ | 0.64   |  |  | $ | 0.81   |  |  | $ | 0.96   | 
|Weighted average shares outstandingbasic   |  |   | 26,446 |  |  |   | 30,321 |  |  |   | 34,003 |  |  |   | 36,722 |  |  |   | 37,296 | 
|Earnings per sharediluted                  |  | $ | 0.41   |  |  | $ | 0.43   |  |  | $ | 0.59   |  |  | $ | 0.79   |  |  | $ | 0.93   | 
|Weighted average shares outstandingdiluted |  |   | 32,054 |  |  |   | 34,638 |  |  |   | 36,465 |  |  |   | 37,671 |  |  |   | 38,577 | 

|                                                 |  |                |        |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|------------------------------------------------ |  | -------------- | ------ | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                                 |  | December 31,  
|                                                 |  |               
|                                                 |  | 1999           |        | 2000 |  | 2001 |         | 2002 |  | 2003
|                                                 |  |                |        |      |  |      |         |      |  |     
|                                                 |  | (In thousands)
|Consolidated Balance Sheet Data:                 |  |                |        |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Cash, cash equivalents and marketable securities |  | $              | 33,074 |      |  | $    | 69,373  |      |  | $    | 132,469 |  |  | $ | 225,941 |  |  | $ | 293,919 | 
|Deferred income taxes                            |  |                | 8,047  |      |  |      | 31,348  |      |  |      | 58,520  |  |  |   | 59,726  |  |  |   | 37,673  | 
|Total assets                                     |  |                | 81,764 |      |  |      | 152,494 |      |  |      | 257,518 |  |  |   | 359,581 |  |  |   | 423,482 | 
|Deferred revenues                                |  |                | 55,436 |      |  |      | 71,281  |      |  |      | 94,683  |  |  |   | 121,415 |  |  |   | 154,844 | 
|Total stockholders equity                       |  |                | 10,846 |      |  |      | 65,561  |      |  |      | 143,984 |  |  |   | 213,357 |  |  |   | 241,993 | 

|                                             |  |              |        |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |         |  
|-------------------------------------------- |  | ------------ | ------ | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                             |  | December 31,
|                                             |  |             
|                                             |  | 1999         |        | 2000 |  | 2001 |         | 2002 |  | 2003
|                                             |  |              |        |      |  |      |         |      |  |     
|Other Operating Data:                        |  |              |        |      |  |      |         |      |  |      |         |   |  |   |         |   |  |   |         |  
|Membership programs (3)                      |  |              | 12     |      |  |      | 15      |      |  |      | 18      |   |  |   | 22      |   |  |   | 26      |  
|Member institutions                          |  |              | 1,480  |      |  |      | 1,745   |      |  |      | 1,802   |   |  |   | 1,930   |   |  |   | 2,143   |  
|Total membership subscriptions               |  |              | 2,790  |      |  |      | 3,543   |      |  |      | 4,364   |   |  |   | 5,257   |   |  |   | 6,414   |  
|Average subscriptions per member
institution |  |              | 1.89   |      |  |      | 2.03    |      |  |      | 2.42    |   |  |   | 2.72    |   |  |   | 2.99    |  
|Client renewal rate (4)                      |  |              | 90     | %    |  |      | 90      | %    |  |      | 90      | % |  |   | 90      | % |  |   | 90      | %
|Contract value (in thousands of
dollars) (5) |  | $            | 80,633 |      |  | $    | 108,542 |      |  | $    | 138,474 |   |  | $ | 176,533 |   |  | $ | 227,913 |  



|(1) |  | In connection with our spin-off from The Advisory Board Company in
October 1997, we substituted our stock options for The Advisory Board Company stock options.
The terms of the stock option substitution resulted in compensation expense being charged for the intrinsic
value of certain stock options. We reflect these charges as stock option expenses over the vesting period of
the options. After calendar year 2001, we recognized no additional compensation expense related to these
substitution agreements. See Managements Discussion and Analysis of Financial Condition and
Results of OperationYears Ended December 31, 2001, 2002 and 2003Stock option and related
expenses.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | For the years ended December 31, 2001, 2002 and 2003, we recognized $1.1 million, $668,000 and $114,000, respectively, in compensation expense reflecting additional Federal Insurance Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|    |  | Act (FICA) taxes as a result of the taxable income that the employees recognized upon the
exercise of nonqualified common stock options, primarily in conjunction with the registered public offerings in March and April 2001 and March 2002 and 2003, respectively.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | In January 2004, we launched the Controllers Leadership Roundtable, an extension of our model into the Finance Practice, bringing the current number of membership programs to 27.                                                                                    
|   
|(4) |  | For the year then ended. Client renewal rate is defined as the percentage of membership institutions renewed, adjusted to reflect reductions in membership institutions resulting from mergers and acquisitions of members.                                            
|   
|(5) |  | For the year then ended. Contract value is defined as the aggregate annualized revenue attributed to all agreements in effect at a given date without regard to the remaining duration of any such agreement.                                                          

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

Overview

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

Memberships, which are principally annually renewable agreements, are
generally payable by members at the beginning of the contract term. Billings
attributable to memberships in our research programs initially are recorded as
deferred revenues and then recognized pro rata over the membership contract
term, which is typically 12 months. At any time, a member may request a refund
of their membership fee for a research program, which is provided on a pro rata
basis relative to the remaining term of the membership.

Our growth strategy is to cross-sell additional research programs to
existing members, to add new members and to develop new research programs and
decision support tools. The implementation of our growth strategy can be seen
in our operating results. Over the last three years, our revenues have grown at
a compound annual growth rate of 30.1% from $95.5 million in 2000 to $210.2
million in 2003, while costs have grown at a compound annual growth rate of
28.0% from $73.3 million in 2000 to $153.8 million in 2003. In addition, our
Contract Value has grown at a compound annual growth rate of 28.1% over the
past three years and was $227.9 million at December 31, 2003. We calculate
Contract Value as the aggregate annualized revenue attributed to all agreements
in effect at a given point in time, without regard to the remaining duration of
any such agreement. Our experience has been that a substantial portion of
members renew subscriptions for an equal or higher level each year. See the
table titled Other Operating Data (unaudited) in Item 6Selected Financial
Data, for additional information with respect to members, subscriptions and
renewals.

Our operating costs and expenses consist of cost of services, member
relations and marketing, general and administrative expenses, depreciation and
stock option and related expenses. Cost of services represents the costs
associated with the production and delivery of our products and services,
including compensation of research personnel and in-house faculty, the
production of published materials, the organization of executive education
seminars and all associated support services. Member relations and
marketing expenses include the costs of acquiring new members, the costs of
maintaining and renewing existing members, compensation expense (including
sales commissions), travel and all associated support services. General and
administrative expenses include the costs of human resources and recruiting,
finance and accounting, management information systems, facilities management,
new product development and other administrative functions. Depreciation
expense includes the cost of depreciation of our property and

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equipment which
consists of furniture, fixtures and equipment, capitalized software and Web
site development costs and leasehold improvements. Stock option and related
expenses includes additional payroll taxes for compensation expense
relating to the taxable income recognized by employees upon the exercise of
nonqualified common stock options.

Results of Operations

The following table sets forth certain financial data as a percentage of
total revenues for the periods indicated:

|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |      |      | 
|---------------------------------------- | --------------------------------- | ------------------------ | ----- | ----------------------- | ---- | ---- | ----- | ---- | ---- |  | ----- | ---- | ---- | 
|                                         |                                   |                          |       | Year Ended December 31,
|                                         |                                   |                          |       |                        
|                                         |                                   |                          |       | 2001                    |      | 2002 |       | 2003
|                                         |                                   |                          |       |                         |      |      |       |     
|Revenues                                 |                                   |                          | 100.0 | %                       |      |      | 100.0 | %    |      |  | 100.0 | %   
|                                         | Cost of services                  |                          |       | 35.7                    |      |      |       | 34.6 |      |  |       | 33.8 |     
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|Gross profit                             |                                   |                          | 64.3  |                         |      |      | 65.4  |      |      |  | 66.2  |     
|Costs and expenses:                      |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|                                         | Member relations and marketing    |                          |       | 23.6                    |      |      |       | 25.1 |      |  |       | 26.3 |     
|                                         | General and administrative        |                          |       | 12.4                    |      |      |       | 10.8 |      |  |       | 10.3 |     
|                                         | Depreciation                      |                          |       | 3.4                     |      |      |       | 3.4  |      |  |       | 2.7  |     
|                                         | Stock option and related expenses |                          |       | 1.0                     |      |      |       | 0.4  |      |  |       | 0.1  |     
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|                                         |                                   | Total costs and expenses |       |                         | 40.4 |      |       |      | 39.7 |  |       |      | 39.4 | 
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|Income from operations                   |                                   |                          | 23.9  |                         |      |      | 25.8  |      |      |  | 26.8  |     
|Other income, net                        |                                   |                          | 3.3   |                         |      |      | 3.9   |      |      |  | 3.6   |     
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|Income before provision for income taxes |                                   |                          | 27.2  |                         |      |      | 29.7  |      |      |  | 30.4  |     
|Provision for income taxes               |                                   |                          | 10.3  |                         |      |      | 11.4  |      |      |  | 13.5  |     
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     
|Net income                               |                                   |                          | 16.9  | %                       |      |      | 18.2  | %    |      |  | 17.0  | %   
|                                         |                                   |                          |       |                         |      |      |       |      |      |  |       |     

Years Ended December 31, 2001, 2002 and 2003

Revenues.Revenues increased 26.7% from $128.1 million for 2001 to $162.4
million for 2002, and 29.5% to $210.2 million for 2003. The largest driver of
the increase in revenues during 2001, 2002 and 2003 was the cross-selling of
additional subscriptions to existing members. Other drivers contributing to the
increase in revenues during 2001, 2002 and 2003 included the introduction of
new research programs, price increases and the addition of new members. The
average membership subscription price increased 3.6% in 2001, 5.8% in 2002 and
5.8% in 2003. We introduced three new research programs during 2001 and four
new research programs during each of 2002 and 2003.

Cost of services.Cost of services increased 22.8% from $45.7 million for
2001 to $56.1 million for 2002 and 26.4% to $71.0 million for 2003. The
increase in cost of services was principally due to increased
compensation costs for new research and executive education staff and an
increase in external consulting expenses to support the growth of our existing
programs and new program launches. Cost of services as a percentage of revenues
decreased from 35.7% for 2001 to 34.6% for 2002 and to 33.8% for 2003. The
decrease in costs of services as a percentage of revenues over the three-year
period ending December 31, 2003 is due to the leverage inherent in our
membership-based model. Because each research program

16



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provides our membership
with standardized best practices research studies and executive education
seminars, new members immediately add to our revenues while only incrementally
increasing our operating costs. Cost of services as a percentage of revenues
may fluctuate due to the timing of the completion and delivery of best
practices research studies, the timing of executive education seminars, and the
fixed nature of a portion of the production costs of best practices research
studies, as these costs are not significantly affected by growth in the number
of membership subscriptions.

Gross profit.Historically, the gross profit as a percentage of revenues,
or gross profit margin, has fluctuated based upon the growth in revenues offset
by the costs of delivering best practices research studies, the timing of
executive education seminars, the hiring of personnel and the introduction of
new membership programs. Accordingly, the gross profit margin for the year
ended December 31, 2003, may not be indicative of future results. A number of
the factors that impact gross profit margin are discussed in the costs of
services description above.

Member relations and marketing.Member relations and marketing costs
increased 34.9% from $30.2 million for 2001 to $40.8 million for 2002, and
35.6% to $55.3 million for 2003. The year-over-year increases in member
relations and marketing costs is principally due to the increase in sales staff
and related costs, the increase in travel expenses associated with new sales
staff, the increase in commission expense associated with increased revenues
and the increase in member relations personnel and related
costs to support our expanding membership base. The increase in member
relations and marketing costs as a percentage of revenues over the three-year
period ended December 31, 2003 is due primarily to the addition of sales
staff and related costs to support our expanding membership base.

General and administrative.General and administrative expenses increased
10.2% from $15.9 million for 2001 to $17.5 million for 2002, and 23.7% to $21.6
million for 2003. The year-over-year increases in general and administrative
expenses is principally due to the increase in staff and related costs
across all functional areas to support our growth. During 2001, we experienced
an increase in consulting and training expenses associated with the investments
in management information systems software. During 2002, we experienced a
decrease in consulting and training expenses as compared to 2001 associated
with prior year investments in management information systems software along
with a decrease in costs associated with our reduced use of external personnel
search firms. During 2003, we experienced an increase in management
information system consulting services and other external consultants to
support organizational growth. Although general and administrative expenses
increased during the period 2001 through 2003, general and administrative
expenses as a percentage of revenues decreased over the three-year period
ended December 31, 2003 due to the fixed nature of a portion of these costs, which are not
significantly affected by growth in revenues.

Depreciation.Depreciation expense increased 23.7% from $4.4 million for
2001 to $5.5 million for 2002, and 5.6% to $5.8 million for 2003. The
year-over-year increases in depreciation expense were principally due to the
additional investment in leasehold improvements for additional office space in
Washington, D.C. and the purchase of computer equipment and management
information systems software to support organizational growth.

Stock option and related expenses.We recognized $1.1 million, $668,000
and $114,000 in compensation expense during the years ended December 31, 2001,
2002 and 2003, respectively, reflecting additional Federal Insurance
Corporation Act (FICA) taxes as a result of the taxable income that our
employees recognized upon the exercise of non-qualified common stock options,
primarily in conjunction with the sale of our common stock in the registered
public offerings of common stock in March and April 2001 and March 2002 and
2003. Further discussion of the sale of our common stock in the registered
public offerings of common stock appears in the liquidity and capital resources
section below.

Other income, net.Other income, net, consists primarily of interest
income earned on a portfolio of cash and cash equivalents and marketable
securities and the realized gain on the sale of marketable securities. Other
income, net increased 48.2% from $4.3 million for 2001 to $6.3 million for
2002, and 19.3% to $7.6 million for 2003. The growth in other income, net, was
due primarily to the increase in interest income associated with the increased
level of cash and cash equivalents and marketable securities. However, the

17



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lower relative growth in other income, net, as a percentage of revenues for
2002 and 2003 reflects lower investment returns due to the lower interest rate
environment. Cash and cash equivalents and marketable securities increased as a
result of cash flows from operating activities and cash flows from financing
activities further discussed in the liquidity and capital resources section
below.

Provision for income taxes.We recorded a provision for income taxes of
$13.3 million, $18.6 million and $28.3 million for 2001, 2002 and 2003,
respectively. The increase in the effective income tax rate from 38.0% for 2001
to 38.6% for 2002 primarily reflects the decreased benefit from federal income
tax incentives associated with the location of our office facilities. The
increase in the effective income tax rate to 44.2% for 2003 is due primarily to
a non-cash income tax charge to earnings to write down the value of our
deferred tax assets in connection with the recognition of our new status as a
QHTC under the Act.

In October 2003, we received notification from the Office of Tax and Revenue
that our certification as a QHTC had been accepted. As a QHTC, our
Washington, D.C. statutory income tax rate will be 0.0% through 2005 and 6.0%
thereafter, versus 9.975% prior to this qualification, and we are
eligible for certain Washington, D.C. income tax credits and other benefits.
Accordingly, we recorded a non-cash income tax charge to earnings of $8.2
million during the year ended December 31, 2003 for the impact on our deferred
tax assets of lowering the Washington, D.C. income tax rate to 0.0%, partially
offset by the recognition of certain Washington, D.C. income tax credits.

We filed a claim for refund for sales and use taxes previously paid to the
Office of Tax and Revenue on qualifying QHTC purchases under the Act. We
subsequently received a notice of refund denial for the claim. This notice of
refund denial is inconsistent with the position taken by the QHTC Activity
Review Committee of the Office of Tax and Revenue, which approved our QHTC
status in October 2003. We plan to appeal the denial for refund of sales and
use taxes. At December 31, 2003, we valued our deferred income tax
assets and liabilities using the currently enacted federal income tax rate of
35.0% and the QHTC Washington, D.C. income tax rate of 0.0%. In addition, we
have continued to provide for income, sales and use taxes as if we were
a QHTC. If the Office of Tax and Revenue rescinds its acceptance of our QHTC certification, or we otherwise determine that such
action is likely, we will record a benefit to earnings representing the impact
on our existing deferred tax assets of increasing the Washington, D.C. income tax
rate to 9.975%, offset by the elimination of certain Washington, D.C. income
tax credits which, as of December 31, 2003, would have been
$2.1 million.

Liquidity and Capital Resources

Cash flows from operating activities.We have financed our operations to
date through funds generated from operating activities. Membership
subscriptions, which are principally annually renewable agreements, are
generally payable by members at the beginning of the contract term. The
combination of revenue growth and advance payment of membership subscriptions
has historically resulted in net positive cash flows provided by operating
activities. We generated net cash flows from operating activities of $52.8
million, $77.9 million, and $89.4 million for 2001, 2002 and 2003,
respectively. For 2001, 2002 and 2003, operating cash flows were generated
during the period principally by net income, the utilization of tax benefits
created by the exercise of common stock options, and the growth in deferred
revenues, partially offset by the growth in membership fees receivable. As of
December 31, 2002 and 2003, we had cash, cash equivalents and marketable
securities of $225.9 million and $293.9 million, respectively. We expect that
our current cash, cash equivalents and marketable securities balances and
anticipated net positive cash flows from operations will satisfy working
capital, financing, and capital expenditure requirements for the next 12
months.

Cash flows from investing activities.We used net cash flows in investing
activities of $38.6 million, $68.3 million and $31.6 million during the years
ended December 31, 2001, 2002, and 2003, respectively. During 2001, 2002 and
2003, investing cash flows were used within the period to purchase
available-for-sale marketable securities, net, of $33.3 million, $65.2 million
and $25.3 million, respectively, and to purchase leasehold improvements for
additional office space in Washington, D.C. and computer software and equipment
of $5.3 million, $3.1 million and $6.3 million, respectively.

Cash flows from financing activities.We generated net cash flows from
financing activities of $14.5 million and $13.5 million during the years ended
December 31, 2001 and 2002, respectively. We used net cash flows in financing
activities of $10.6 million during the year ended December 31, 2003. Net cash
provided by financing activities during the years ended December 31, 2001 and
2002, was primarily attributed to the receipt of cash for the exercise of stock
options in conjunction with the sale of our common stock by our employees and
directors in registered public offerings. In March and April 2001 and March
2002 and 2003, 3,035,000 shares, 2,100,000 shares and 588,000 shares,
respectively, of our common stock
were sold by selling stockholders in registered public offerings. We did not
directly receive any proceeds from the sale of our common stock. However, we
did receive cash from the exercise of common stock options in conjunction with
the sale of our common stock. Cash flows used in financing activities during
the year ended December 31, 2003, were attributed to the repurchase of our
common stock. During 2003, we purchased 552,007 shares of our common stock at a
total cost of approximately $19.6 million.

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We have entered into $0.7 million, $4.0 million, and $2.3 million letter of credit
agreements with commercial banks, which expire December 2004, August 2004 and
January 2015, respectively, to provide security deposits for certain of our
office leases. We pledged certain assets as collateral under the letter of
credit agreements. To date, no amounts have been drawn on these agreements.

We lease office facilities in the United States and the United Kingdom
expiring on various dates over the next 16 years. Certain lease agreements
include provisions for rental escalations and require us to pay for executory
costs such as taxes and insurance. Future minimum rental payments under
noncancellable operating leases, excluding executory costs, are $114.3 million.

The following summarizes certain of our operating lease obligations at
December 31, 2003:

|                 |  |                                       |         |         |  |           |       |           |  |          |        |  |  |   |        |  |  |   |        | 
|---------------- |  | ------------------------------------- | ------- | ------- |  | --------- | ----- | --------- |  | -------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                 |  | Payments Due by Period (in thousands)
|                 |  |                                      
|                 |  | Total                                 |         | <1 Year |  | 13 Years |       | 45 Years |  | >5 Years
|                 |  |                                       |         |         |  |           |       |           |  |         
|Operating leases |  | $                                     | 117,028 |         |  | $         | 8,994 |           |  | $        | 23,110 |  |  | $ | 24,373 |  |  | $ | 60,551 | 

We had no other non-cancellable contractual financial obligations at
December 31, 2003.

Off-Balance Sheet Arrangements

At December 31, 2002 and 2003, we had no off-balance sheet financing or
other arrangements with unconsolidated entities or financial partnerships (such
as entities often referred to as structured finance or special purpose
entities) established for purposes of facilitating off-balance sheet financing
or other debt arrangements or for other contractually narrow or limited
purposes.

Critical Accounting Policies

We have identified the following policies as critical to our business
operations and the understanding of our results of operations. This listing is
not a comprehensive list of all of our accounting policies. In many cases, the
accounting treatment of a particular transaction is specifically dictated by
accounting principles generally accepted in the United States, with no need for
managements judgment in their application. There are also areas in which
managements judgment in selecting any available alternative would not produce
a materially different result. However, certain of our accounting policies are
particularly important to the portrayal of our financial position and results
of operations and may require the application of significant judgment by our
management; as a result, they are subject to an inherent degree of uncertainty.
In applying those policies, our management uses its judgment to determine the
appropriate assumptions to be used in the determination of certain estimates.
Those estimates are based on our historical experience, our observance of
trends in the industry, information provided by our members and information
available from other outside sources, as appropriate. For a more detailed
discussion on the application of these and other accounting policies, see Note
3  Summary of significant account policies in our financial statements and
related notes. Our critical accounting policies include:

Deferred tax asset

We have deferred income tax assets consisting primarily of net operating
loss (NOL) carryforwards for regular federal income tax purposes generated
from the exercise of common stock options. In estimating future tax
consequences, Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes(SFAS 109), generally considers all expected future events
in the determination and valuation of deferred tax assets and liabilities. We
believe that our future taxable income will be sufficient for the full
realization of the deferred income tax assets. However, SFAS 109 does not
consider the effect of future changes in existing tax laws or rates in the
determination and evaluation of deferred tax assets and

19



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liabilities until the
new tax laws or rates are enacted. We have established our deferred income tax
assets and liabilities using currently enacted tax law and rates. We will
recognize in income an adjustment for the impact of new tax laws or rates or
from changes in our tax status on the existing deferred tax assets and
liabilities when new tax laws or rates are enacted or the change in our status
occurs.

Revenue recognition

Revenues from membership subscriptions are recognized over the term of the
related subscription, which generally is 12 months. Membership fees generally
are billable, and revenue recognition begins, when the member agrees to the
terms of the membership. Certain membership fees are billed on an installment
basis. Members may request a refund of their membership fees, which is provided
on a pro rata basis relative to the length of the remaining membership term.
Our policy is to record the full amount of membership fees receivable as an
asset and related deferred revenue as a liability when a member agrees to the
terms of a membership. Revenues from membership subscriptions were greater than
95% of total revenues for each of the years ended December 31, 2001, 2002 and
2003.

Reserve for uncollectible revenue

We record a reserve for uncollectible revenue based upon managements
analyses and estimates as to the collectability of our accounts receivable. As
part of our analysis, we examine our collections history, the age of the
receivables in question, any specific customer collection issues that we have
identified, general market conditions, customer concentrations and current
economic trends.

Commission expense recognition

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to interest rate risk primarily through our portfolio of
cash, cash equivalents and marketable securities, which is designed for safety
of principal and liquidity. Cash and cash equivalents include highly liquid
U.S. Treasury obligations with maturities of less than three months. Marketable
securities consist primarily of U.S. Treasury notes and bonds and insured
Washington, D.C. tax exempt notes and bonds. We perform periodic evaluations of
the relative credit ratings related to the cash, cash equivalents and
marketable securities. This portfolio is subject to inherent interest rate risk
as investments mature and are reinvested at current market interest rates. We
currently do not use derivative financial instruments to adjust our portfolio
risk or income profile.

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PART II

Item 8. Financial Statements
and Supplementary Data

Report of Independent Auditors

The Board of Directors and Stockholders of
The Corporate Executive Board Company:

We have audited the accompanying consolidated balance sheets of The Corporate
Executive Board Company as of December 31, 2002 and 2003, and the related
consolidated statements of income, changes in stockholders equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Corporate Executive Board Company at December 31, 2002 and 2003, and the
consolidated results of its operations and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States.

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

Baltimore, Maryland
February 2, 2004, except for Note 7, as to which the date is 
February 27, 2004

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The following report is a copy of a report previously issued by Andersen,
which report has not been reissued by Andersen.

Report of Independent Auditors

To the Stockholders of The Corporate Executive Board Company:

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

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

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

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

Washington, D.C.
January 31, 2002

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THE CORPORATE EXECUTIVE BOARD COMPANY

CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |         |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------- | ------------------------------------------ | ------- | ------------ | ------- | ------- | ------- | ------- | ------- | 
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         | December 31,
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |             
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         | 2002         |         | 2003   
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |        
|ASSETS                                                                                                                                                                                                                                            |                                           |                           |                                            |         |              |         |         |        
|CURRENT ASSETS:                                                                                                                                                                                                                                   |                                           |                           |                                            |         |              |         |         |        
|                                                                                                                                                                                                                                                  | Cash and cash equivalents                 |                           | $                                          | 71,346  |              |         | $       | 118,568 |        
|                                                                                                                                                                                                                                                  | Marketable securities                     |                           |                                            | 17,030  |              |         |         | 11,859  |        
|                                                                                                                                                                                                                                                  | Membership fees receivable, net           |                           |                                            | 50,356  |              |         |         | 63,160  |        
|                                                                                                                                                                                                                                                  | Deferred income taxes                     |                           |                                            | 28,806  |              |         |         | 30,972  |        
|                                                                                                                                                                                                                                                  | Deferred incentive compensation           |                           |                                            | 4,974   |              |         |         | 7,332   |        
|                                                                                                                                                                                                                                                  | Prepaid expenses and other current assets |                           |                                            | 3,668   |              |         |         | 5,933   |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           | Total current assets      |                                            |         | 176,180      |         |         |         | 237,824 |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|DEFERRED INCOME TAXES                                                                                                                                                                                                                             |                                           |                           | 30,920                                     |         |              |         | 6,701   |        
|MARKETABLE SECURITIES                                                                                                                                                                                                                             |                                           |                           | 137,565                                    |         |              |         | 163,492 |        
|PROPERTY AND EQUIPMENT, NET                                                                                                                                                                                                                       |                                           |                           | 14,916                                     |         |              |         | 15,465  |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           | Total assets              |                                            | $       | 359,581      |         |         | $       | 423,482 |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                              |                                           |                           |                                            |         |              |         |         |        
|CURRENT LIABILITIES:                                                                                                                                                                                                                              |                                           |                           |                                            |         |              |         |         |        
|                                                                                                                                                                                                                                                  | Accounts payable and accrued liabilities  |                           | $                                          | 12,549  |              |         | $       | 12,480  |        
|                                                                                                                                                                                                                                                  | Accrued incentive compensation            |                           |                                            | 9,660   |              |         |         | 11,072  |        
|                                                                                                                                                                                                                                                  | Deferred revenues                         |                           |                                            | 121,415 |              |         |         | 154,844 |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           | Total current liabilities |                                            |         | 143,624      |         |         |         | 178,396 |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|OTHER LIABILITIES                                                                                                                                                                                                                                 |                                           |                           | 2,600                                      |         |              |         | 3,093   |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           | Total liabilities         |                                            |         | 146,224      |         |         |         | 181,489 |        
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|STOCKHOLDERS EQUITY:                                                                                                                                                                                                                             |                                           |                           |                                            |         |              |         |         |        
|Preferred stock, par value $0.01; 5,000,000 shares authorized, no shares issued and outstanding                                                                                                                                                   |                                           |                           |                                           |         |              |         |        |        
|Common stock, par value $0.01; 100,000,000 shares authorized and 37,182,846 and 37,835,075 shares
issued as of December 31, 2002 and 2003, respectively, and 37,182,846 and 37,283,068 outstanding
as of December 31, 2002 and 2003, respectively |                                           |                           | 372                                        |         |              |         | 378     |        
|Additional paid-in-capital                                                                                                                                                                                                                        |                                           |                           | 129,846                                    |         |              |         | 143,426 |        
|Retained earnings                                                                                                                                                                                                                                 |                                           |                           | 77,844                                     |         |              |         | 113,532 |        
|Accumulated elements of comprehensive income                                                                                                                                                                                                      |                                           |                           | 5,295                                      |         |              |         | 4,277   |        
|Treasury stock, 552,007 and zero shares, at December 31, 2002 and 2003, respectively                                                                                                                                                              |                                           |                           |                                           |         |              |         | (19,620 | )      
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           |                           | Total stockholders equity                 |         |              | 213,357 |         |         |         | 241,993 | 
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        
|                                                                                                                                                                                                                                                  |                                           |                           | Total liabilities and stockholders equity |         | $            | 359,581 |         |         | $       | 423,482 | 
|                                                                                                                                                                                                                                                  |                                           |                           |                                            |         |              |         |         |         |        

See accompanying notes to consolidated financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

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

|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |        |        |    |     | 
|---------------------------------------------------------------------- | --------------------------------- | ------------------------ | ------------------------------ | ------ | ------ | ----------------------- | ------- | ------ | ------ | ---- | ------- | ------ | ------ | -- | --- | 
|                                                                       |                                   |                          |                                |        |        | Year ended December 31,
|                                                                       |                                   |                          |                                |        |        |                        
|                                                                       |                                   |                          |                                |        |        | 2001                    |         | 2002   |        | 2003
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |     
|REVENUES                                                               |                                   | $                        | 128,112                        |        |        | $                       | 162,357 |        |        | $    | 210,211 |       
|COST OF SERVICES                                                       |                                   |                          | 45,738                         |        |        |                         | 56,147  |        |        |      | 70,974  |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|GROSS PROFIT                                                           |                                   |                          | 82,374                         |        |        |                         | 106,210 |        |        |      | 139,237 |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|COSTS AND EXPENSES:                                                    |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       | Member relations and marketing    |                          |                                | 30,219 |        |                         |         | 40,768 |        |      |         | 55,301 |       
|                                                                       | General and administrative        |                          |                                | 15,877 |        |                         |         | 17,493 |        |      |         | 21,632 |       
|                                                                       | Depreciation                      |                          |                                | 4,412  |        |                         |         | 5,456  |        |      |         | 5,764  |       
|                                                                       | Stock option and related expenses |                          |                                | 1,260  |        |                         |         | 668    |        |      |         | 114    |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       |                                   | Total costs and expenses |                                |        | 51,768 |                         |         |        | 64,385 |      |         |        | 82,811 |   
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|INCOME FROM OPERATIONS                                                 |                                   |                          | 30,606                         |        |        |                         | 41,825  |        |        |      | 56,426  |       
|OTHER INCOME, NET                                                      |                                   |                          | 4,283                          |        |        |                         | 6,346   |        |        |      | 7,569   |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|INCOME BEFORE PROVISION FOR INCOME TAXES                               |                                   |                          | 34,889                         |        |        |                         | 48,171  |        |        |      | 63,995  |       
|PROVISION FOR INCOME TAXES                                             |                                   |                          | 13,257                         |        |        |                         | 18,570  |        |        |      | 28,307  |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|NET INCOME                                                             |                                   | $                        | 21,632                         |        |        | $                       | 29,601  |        |        | $    | 35,688  |       
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|EARNINGS PER SHARE:                                                    |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       | Basic                             |                          | $                              | 0.64   |        |                         | $       | 0.81   |        |      | $       | 0.96   |       
|                                                                       | Diluted                           |                          | $                              | 0.59   |        |                         | $       | 0.79   |        |      | $       | 0.93   |       
|                                                                       |                                   |                         
|WEIGHTED AVERAGE SHARES USED IN THE CALCULATION OF EARNINGS PER SHARE: |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       | Basic                             |                          |                                | 34,003 |        |                         |         | 36,722 |        |      |         | 37,296 |       
|                                                                       | Diluted                           |                          |                                | 36,465 |        |                         |         | 37,671 |        |      |         | 38,577 |       
|                                                                       |                                   |                         
|                                                                       |                                   |                         
|                                                                       |                                   |                         
|(1) Composition of stock option and related expenses:                  |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       |                                   |                          | Cost of services               |        | $      | 509                     |         |        | $      | 343  |         |        | $      | 75 |    
|                                                                       |                                   |                          | Member relations and marketing |        |        | 283                     |         |        |        | 148  |         |        |        | 5  |    
|                                                                       |                                   |                          | General and administrative     |        |        | 468                     |         |        |        | 177  |         |        |        | 34 |    
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       
|                                                                       |                                   |                          |                                | Total  |        | $                       | 1,260   |        |        | $    | 668     |        |        | $  | 114 | 
|                                                                       |                                   |                          |                                |        |        |                         |         |        |        |      |         |       

See accompanying notes to consolidated financial statements.

24



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##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |        |         |         |  
|-------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ----------------------------------------- | --------------------------------------------------------- | ------ | ----------------------- | ------- | -------- | ------ | ------ | ------- | ------- | ------ | ------- | ------- | -
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        | Year ended December 31,
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                        
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        | 2001                    |         | 2002     |        | 2003  
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |       
|CASH FLOWS FROM OPERATING ACTIVITIES:        |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |        
|                                             | Net income                                                                       |                                                                                            | $                                         | 21,632                                                    |        |                         | $       | 29,601   |        |        | $       | 35,688  |       
|                                             | Adjustments to reconcile net income to net cash flows from operating activities: |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|                                             |                                                                                  | Depreciation                                                                               |                                           |                                                           | 4,166  |                         |         |          | 5,456  |        |         |         | 5,764  |        
|                                             |                                                                                  | Loss on disposition of property and equipment                                              |                                           |                                                           | 246    |                         |         |          |       |        |         |         |       |        
|                                             |                                                                                  | Deferred income taxes and tax benefits resulting from the exercise of common stock options |                                           |                                                           | 13,440 |                         |         |          | 18,349 |        |         |         | 27,171 |        
|                                             |                                                                                  | Stock option repurchases                                                                   |                                           |                                                           | (3,140 | )                       |         |          |       |        |         |         |       |        
|                                             |                                                                                  | Stock option and related expenses                                                          |                                           |                                                           | 186    |                         |         |          |       |        |         |         |       |        
|                                             |                                                                                  | Amortization of marketable securities premiums, net                                        |                                           |                                                           | 478    |                         |         |          | 1,506  |        |         |         | 2,185  |        
|                                             |                                                                                  | Changes in operating assets and liabilities:                                               |                                           |                                                           |        |                         |         |          |        |        |         |         |        |        
|                                             |                                                                                  |                                                                                            | Membership fees receivable, net           |                                                           |        | (12,492                 | )       |          |        | (8,345 | )       |         |        | (12,804 | )      
|                                             |                                                                                  |                                                                                            | Deferred incentive compensation           |                                                           |        | (1,389                  | )       |          |        | (758   | )       |         |        | (2,358  | )      
|                                             |                                                                                  |                                                                                            | Prepaid expenses and other current assets |                                                           |        | (27                     | )       |          |        | (626   | )       |         |        | (2,265  | )      
|                                             |                                                                                  |                                                                                            | Accounts payable and accrued liabilities  |                                                           |        | 2,581                   |         |          |        | 1,866  |         |         |        | 730     |        
|                                             |                                                                                  |                                                                                            | Accrued incentive compensation            |                                                           |        | 3,374                   |         |          |        | 3,273  |         |         |        | 1,412   |        
|                                             |                                                                                  |                                                                                            | Deferred revenues                         |                                                           |        | 23,402                  |         |          |        | 26,732 |         |         |        | 33,429  |        
|                                             |                                                                                  |                                                                                            | Other liabilities                         |                                                           |        | 384                     |         |          |        | 819    |         |         |        | 493     |        
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|                                             |                                                                                  |                                                                                            |                                           | Net cash flows provided by operating activities           |        |                         | 52,841  |          |        |        | 77,873  |         |        |         | 89,445  |  
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES:        |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |        
|                                             | Purchase of property and equipment                                               |                                                                                            |                                           | (5,260                                                    | )      |                         |         | (3,112   | )      |        |         | (6,313  | )     
|                                             | Purchase of marketable securities                                                |                                                                                            |                                           | (61,022                                                   | )      |                         |         | (116,738 | )      |        |         | (71,440 | )     
|                                             | Sales and maturities of marketable securities                                    |                                                                                            |                                           | 27,717                                                    |        |                         |         | 51,564   |        |        |         | 46,104  |       
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|                                             |                                                                                  |                                                                                            |                                           | Net cash flows used in investing activities               |        |                         | (38,565 | )        |        |        | (68,286 | )       |        |         | (31,649 | )
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|CASH FLOWS FROM FINANCING ACTIVITIES:        |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |        
|                                             | Proceeds from the exercise of common stock options                               |                                                                                            |                                           | 13,798                                                    |        |                         |         | 12,835   |        |        |         | 8,292   |       
|                                             | Proceeds from issuance of common stock under the employee stock purchase plan    |                                                                                            |                                           | 704                                                       |        |                         |         | 653      |        |        |         | 754     |       
|                                             | Purchase of treasury shares                                                      |                                                                                            |                                           |                                                          |        |                         |         |         |        |        |         | (19,620 | )     
|                                             | Reimbursement of common stock offering costs                                     |                                                                                            |                                           | 375                                                       |        |                         |         | 300      |        |        |         | 175     |       
|                                             | Payment of common stock offering costs                                           |                                                                                            |                                           | (375                                                      | )      |                         |         | (300     | )      |        |         | (175    | )     
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|                                             |                                                                                  |                                                                                            |                                           | Net cash flows provided by (used in) financing activities |        |                         | 14,502  |          |        |        | 13,488  |         |        |         | (10,574 | )
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|NET INCREASE IN CASH AND CASH EQUIVALENTS    |                                                                                  |                                                                                            | 28,778                                    |                                                           |        |                         | 23,075  |          |        |        | 47,222  |        
|Cash and cash equivalents, beginning of year |                                                                                  |                                                                                            | 19,493                                    |                                                           |        |                         | 48,271  |          |        |        | 71,346  |        
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       
|Cash and cash equivalents, end of year       |                                                                                  | $                                                                                          | 48,271                                    |                                                           |        | $                       | 71,346  |          |        | $      | 118,568 |        
|                                             |                                                                                  |                                                                                            |                                           |                                                           |        |                         |         |          |        |        |         |         |       

See accompanying notes to consolidated financial statements.

25



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##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

For the years ended
December 31, 2001, 2002, and 2003
(In thousands, except share amounts)

|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  | ------------ | --------- | ---------- | - | --------------- | -- | ------------ | - | ------------- | ------ | -------- | - | ----------- | --- | ----- | - | ------------- | ------ |  | - | ----------- | ----- | ------ | - | ------- | - |  | - | ------- | ------ |  |  | - | ------ | ------ | 
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   | Accumulated |      
|                                                                          |                                                                          |  | Common stock |           |            |   |                 |    |              |   |               |        |          |   | elements of |     |       |   |               |        |  |   |             |       | Annual |  
|                                                                          |                                                                          |  |              |           | Additional |   | Deferred        |    | Retained     |   | comprehensive |        | Treasury |   |             |     |       |   | comprehensive |       
|                                                                          |                                                                          |  | Shares       |           | Amount     |   | paid-in-capital |    | compensation |   | earnings      |        | income   |   | stock       |     | Total |   | income        |       
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |       
|Balance at December 31, 2000                                              |                                                                          |  | 31,144,069   |           |            | $ | 311             |    |              | $ | 38,579        |        |          | $ | (186        | )   |       | $ | 26,611        |        |  | $ | 246         |       |        | $ |        |   |  | $ | 65,561  |        |  |  |   |        |       
|                                                                          | Issuance of common
stock upon the
exercise of common
stock options       |  |              | 3,727,682 |            |   |                 | 38 |              |   |               | 13,760 |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 13,798 |  |  |   |        |       | 
|                                                                          | Issuance of common
stock under the
employee stock
purchase plan          |  |              | 26,309    |            |   |                 |   |              |   |               | 704    |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 704    |  |  |   |        |       | 
|                                                                          | Tax benefits
related to the
exercise of stock
options                    |  |              |          |            |   |                 |   |              |   |               | 41,178 |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 41,178 |  |  |   |        |       | 
|                                                                          | Amortization of
deferred
compensation                                    |  |              |          |            |   |                 |   |              |   |               |       |          |   |             | 186 |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 186    |  |  |   |        |       | 
|                                                                          | Unrealized gains on
available-for-sale
marketable
securities, net of
tax |  |              |          |            |   |                 |   |              |   |               |       |          |   |             |    |       |   |               |       |  |   |             | 925   |        |   |         |  |  |   |         | 925    |  |  |   |        | 925    | 
|                                                                          | Net income                                                               |  |              |          |            |   |                 |   |              |   |               |       |          |   |             |    |       |   |               | 21,632 |  |   |             |      |        |   |         |  |  |   | $       | 21,632 |  |  |   |        | 21,632 | 
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|Balance at December 31, 2001                                              |                                                                          |  | 34,898,060   |           |            | $ | 349             |    |              | $ | 94,221        |        |          | $ |            |     |       | $ | 48,243        |        |  | $ | 1,171       |       |        | $ |        |   |  | $ | 143,984 |        |  |  | $ | 22,557 |       
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|                                                                          | Issuance of common
stock upon the
exercise of common
stock options       |  |              | 2,259,653 |            |   |                 | 23 |              |   |               | 12,812 |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 12,835 |  |  |   |        |       | 
|                                                                          | Issuance of common
stock under the
employee stock
purchase plan          |  |              | 25,133    |            |   |                 |   |              |   |               | 653    |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 653    |  |  |   |        |       | 
|                                                                          | Tax benefits
related to the
exercise of stock
options                    |  |              |          |            |   |                 |   |              |   |               | 22,160 |          |   |             |    |       |   |               |       |  |   |             |      |        |   |         |  |  |   |         | 22,160 |  |  |   |        |       | 
|                                                                          | Unrealized gains on
available-for-sale
marketable
securities, net of
tax |  |              |          |            |   |                 |   |              |   |               |       |          |   |             |    |       |   |               |       |  |   |             | 4,124 |        |   |         |  |  |   |         | 4,124  |  |  |   |        | 4,124  | 
|                                                                          | Net income                                                               |  |              |          |            |   |                 |   |              |   |               |       |          |   |             |    |       |   |               | 29,601 |  |   |             |      |        |   |         |  |  |   |         | 29,601 |  |  |   |        | 29,601 | 
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|Balance at December 31, 2002                                              |                                                                          |  | 37,182,846   |           |            | $ | 372             |    |              | $ | 129,846       |        |          | $ |            |     |       | $ | 77,844        |        |  | $ | 5,295       |       |        | $ |        |   |  | $ | 213,357 |        |  |  | $ | 33,725 |       
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|Issuance of common stock upon the
exercise of common stock options        |                                                                          |  | 626,663      |           |            |   | 6               |    |              |   | 8,286         |        |          |   |            |     |       |   |              |        |  |   |            |       |        |   |        |   |  |   | 8,292   |        |  |  |   |       |       
|Issuance of common stock under the
employee stock purchase plan           |                                                                          |  | 25,566       |           |            |   |                |    |              |   | 754           |        |          |   |            |     |       |   |              |        |  |   |            |       |        |   |        |   |  |   | 754     |        |  |  |   |       |       
|Tax benefits related to the
exercise of stock options                     |                                                                          |  |             |           |            |   |                |    |              |   | 4,540         |        |          |   |            |     |       |   |              |        |  |   |            |       |        |   |        |   |  |   | 4,540   |        |  |  |   |       |       
|Purchase of treasury stock at cost                                        |                                                                          |  | (552,007     | )         |            |   |                |    |              |   |              |        |          |   |            |     |       |   |              |        |  |   |            |       |        |   | (19,620 | ) |  |   | (19,620 | )      |  |  |   |       |       
|Unrealized losses on
available-for-sale marketable
securities, net of tax |                                                                          |  |             |           |            |   |                |    |              |   |              |        |          |   |            |     |       |   |              |        |  |   | (1,018      | )     |        |   |        |   |  |   | (1,018  | )      |  |  |   | (1,018 | )     
|Net income                                                                |                                                                          |  |             |           |            |   |                |    |              |   |              |        |          |   |            |     |       |   | 35,688        |        |  |   |            |       |        |   |        |   |  |   | 35,688  |        |  |  |   | 35,688 |       
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 
|Balance at December 31, 2003                                              |                                                                          |  | 37,283,068   |           |            | $ | 378             |    |              | $ | 143,426       |        |          | $ |            |     |       | $ | 113,532       |        |  | $ | 4,277       |       |        | $ | (19,620 | ) |  | $ | 241,993 |        |  |  | $ | 34,670 |       
|                                                                          |                                                                          |  |              |           |            |   |                 |    |              |   |               |        |          |   |             |     |       |   |               |        |  |   |             |       |        |   |         |   |  |   |         |        |  |  |   |        |        | 

See accompanying notes to consolidated financial statements.

26



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##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS



|1. |  | Description of operations
|-- |  | -------------------------

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



|2. |  | Spin-off
|-- |  | --------

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



|3. |  | Summary of significant accounting policies
|-- |  | ------------------------------------------

Cash equivalents and marketable securities

Short-term investments and marketable securities that mature within three
months of purchase are classified as cash equivalents. Short-term investments
and marketable securities with maturities of more than three months are
classified as marketable securities. Marketable securities with maturity dates of less than one year are
classified as current assets. As of December 31, 2002 and 2003, the
Companys marketable securities consisted primarily of United States Treasury
notes and bonds and Washington, D.C. tax exempt notes and bonds. The Company
classifies its marketable securities as available-for-sale, which are carried
at fair value based on quoted market prices. The net unrealized gains and
losses on available-for-sale marketable securities are excluded from net income
and are included within accumulated elements of comprehensive income. The
specific identification method is used to compute the realized gains and losses
on the sale of marketable securities. The Company may elect not to hold these
marketable securities to maturity and may elect to sell these securities at any
time.

Allowance for doubtful accounts

The Company uses estimates to determine the amount of the allowance for
doubtful accounts necessary to reduce membership fees receivable to their
expected net realizable value. The Company estimates the amount of the
required allowance by reviewing the status of past-due receivables and
analyzing historical bad debt trends. The
Company charges-off receivables deemed to be uncollectible to the allowance for
doubtful accounts. Accounts receivable balances are not collaterized.

Property and equipment

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

27



---



##### 



using the straight-line method over the shorter of the estimated useful lives
of the assets or the lease term. Replacements and major improvements are
capitalized. Maintenance and repairs are charged to expense as incurred.

Recovery of long-lived assets

Long-lived assets are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company recognizes an
impairment loss when the sum of the expected undiscounted future cash flows is
less than the carrying amount of the asset. The Company believes that no such
impairment existed as of December 31, 2002 and 2003.

Revenue recognition

Revenues from membership subscriptions are recognized ratably over the
term of the related subscription, which is generally 12 months. Revenues from
implementation support memberships are recognized as services are performed,
limited by the Companys pro rata refund policy. Membership fees are generally
billable, and revenue recognition begins, when the member agrees to the terms
of the membership. Certain membership fees are billed on an installment basis.
Members may request a refund of their membership fees, which is provided on a
pro rata basis relative to the length of the remaining membership term. The
Companys policy is to record the full amount of membership fees receivable as
an asset and related deferred revenue as a liability when a member agrees to
the terms of a membership. Revenues from membership subscriptions were greater
than 95% of total revenues for each of the years ended December 31, 2001, 2002,
and 2003. In addition, as of December 31, 2002 and 2003, approximately $1.7
million and $2.8 million, respectively, of deferred revenues were to be
recognized beyond the following 12 months.

Commission expense recognition

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

Earnings per share

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

|                                                      |  |                         |        |      |  |      |        |  |  |  |        | 
|----------------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                      |  | Year Ended December 31,
|                                                      |  |                        
|                                                      |  | 2001                    |        | 2002 |  | 2003
|                                                      |  |                         |        |      |  |     
|Basic weighted
average common
shares outstanding      |  |                         | 34,003 |      |  |      | 36,722 |  |  |  | 37,296 | 
|Weighted average
common share
equivalents
outstanding |  |                         | 2,462  |      |  |      | 949    |  |  |  | 1,281  | 
|                                                      |  |                         |        |      |  |      |        |  |  |  |        | 
|Diluted weighted
average common
shares outstanding    |  |                         | 36,465 |      |  |      | 37,671 |  |  |  | 38,577 | 
|                                                      |  |                         |        |      |  |      |        |  |  |  |        | 

28



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##### 



Consolidation and basis of presentation

The consolidated financial statements include accounts of The Corporate
Executive Board Company and The Corporate Executive Board Company (UK), Ltd.
All significant intercompany transactions and balances have been eliminated in
consolidation.

Concentration of credit risk

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

The Company generates revenues from members located outside of the United
States. For the years ended December 31, 2001, 2002 and 2003, approximately
30%, 27% and 25% of revenues, respectively, were generated from members located
outside of the United States. Revenues from customers in European countries
were approximately 16%, 15% and 14% for the years ended December 31, 2001, 2002
and 2003, respectively, with no other geographic area representing more than
10% of revenues in any period. No individual member accounted for more than 2%
of revenues for any period presented.

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

Foreign currency

The functional currency of the Companys wholly owned subsidiary is its local currency. The financial statements of the subsidiary are
translated to United States dollars using period-end exchange rates for assets
and liabilities and average exchange rates during the corresponding period for
revenues, expenses and cash flows. Translation gains and losses as a result of
this translation are accumulated as a component of accumulated other
comprehensive (loss) income.

Fair value of financial instruments

The fair value of the Companys financial instruments approximates
their carrying value due to their short maturity.

Income taxes

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

29



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##### 



Research and development costs

Costs related to the research and development of new company programs are
expensed in the period incurred. Research and development costs were
immaterial for the years ended December 31, 2001, 2002 and 2003.

Stock-based compensation

At December 31, 2003, the Company had several stock-based employee
compensation plans, which are described more fully in Note 11. These plans
provide for the granting of stock options and restricted stock to employees and
non-employee members of our Board of Directors. The Company accounts for those
plans using the intrinsic value method of expense recognition and measurement
prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations (collectively, APB No. 25).
Accordingly, no stock-based compensation cost is reflected in net
income, as reported, as all stock options granted under the
Companys stock-based employee compensation plans have an
exercise price equal to the market value of the underlying common
stock on the date of grant.

FASB
Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS
No. 123), as amended by FASB Statement No. 148,
Accounting for Stock-Based Compensation Transition and
Disclosure, established an alternative method of expense
recognition for stock-based compensation awards to employees based on
fair values. Pro forma information regarding net income is required
by SFAS No. 123, as amended, and has been determined as if the
Company had accounted for its employee stock options under the fair
value method as prescribed by SFAS No. 123, as amended.

The following table illustrates the effect
on net income and earnings per share if the Company had applied the fair value
recognition provisions of SFAS No. 123 to stock-based employee
compensation. For purposes of pro forma disclosures,
the estimated fair value of options is amortized to expense over the vesting
period. The provisions of SFAS No. 123 may not necessarily be
indicative of future results.

|                                                                                                                                             |                                                |   |                         |       |      |   |         |       |   |   |         |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | - | ----------------------- | ----- | ---- | - | ------- | ----- | - | - | ------- | ----- | -
|                                                                                                                                             |                                                |   | Year Ended December 31,
|                                                                                                                                             |                                                |   |                        
|                                                                                                                                             |                                                |   | 2001                    |       | 2002 |   | 2003   
|                                                                                                                                             |                                                |   |                         |       |      |   |        
|Net income, as reported                                                                                                                      |                                                | $ | 21,632                  |       |      | $ | 29,601  |       |   | $ | 35,688  |      
|Deduct: Total stock-based employee
compensation expense
determined under fair value based
methods for all awards,
net of related tax effects |                                                |   | (8,842                  | )     |      |   | (16,538 | )     |   |   | (17,659 | )    
|                                                                                                                                             |                                                |   |                         |       |      |   |         |       |   |   |         |      
|Pro forma net income                                                                                                                         |                                                | $ | 12,790                  |       |      | $ | 13,063  |       |   | $ | 18,029  |      
|                                                                                                                                             |                                                |   |                         |       |      |   |         |       |   |   |         |      
|Earnings per share:                                                                                                                          |                                                |   |                         |       |      |   |         |       |   |   |         |      
|                                                                                                                                             | Basic  as reported                            |   | $                       | 0.64  |      |   | $       | 0.81  |   |   | $       | 0.96  |  
|                                                                                                                                             | Basic  pro forma                              |   | $                       | 0.38  |      |   | $       | 0.36  |   |   | $       | 0.48  |  
|                                                                                                                                             | Diluted  as reported                          |   | $                       | 0.59  |      |   | $       | 0.79  |   |   | $       | 0.93  |  
|                                                                                                                                             | Diluted  pro forma                            |   | $                       | 0.35  |      |   | $       | 0.35  |   |   | $       | 0.47  |  
|                                                                                                                                             |                                                |   |                         |       |      |   |         |       |   |   |         |      
|Assumptions:                                                                                                                                 |                                                |   |                         |       |      |   |         |       |   |   |         |      
|                                                                                                                                             | Dividend
yield                                 |   |                         |      |      |   |         |      |   |   |         |      |  
|                                                                                                                                             | Expected
life of option (in years)             |   |                         | 5     |      |   |         | 5     |   |   |         | 5     |  
|                                                                                                                                             | Expected
volatility                            |   |                         | 69    | %    |   |         | 63    | % |   |         | 55    | %
|                                                                                                                                             | Risk-free
interest rate                        |   |                         | 4.4   | %    |   |         | 3.1   | % |   |         | 2.9   | %
|                                                                                                                                             | Weighted-average
fair value of options granted |   | $                       | 18.85 |      |   | $       | 17.88 |   |   | $       | 16.49 |  

30



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##### 



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

Use of estimates in preparation of financial statements

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



|4. |  | Marketable securities
|-- |  | ---------------------

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

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

|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |     | 
|------------------------------------------- |  | ----------------------- | ------- | --------- |  | ---------- | ------- | ---------- |  | ----- | ----- | ----- |  | - | --- | 
|                                            |  | As of December 31, 2003
|                                            |  |                        
|                                            |  |                         |         |           |  |            |         |            |  | Gross |       | Gross
|                                            |  | Market                  |         | Amortized |  | Unrealized |         | Unrealized
|                                            |  | Value                   |         | Cost      |  | Gains      |         | Losses    
|                                            |  |                         |         |           |  |            |         |           
|U.S. Treasury notes and bonds               |  | $                       | 108,598 |           |  | $          | 106,276 |            |  | $     | 2,756 |       |  | $ | 434 | 
|Washington, D.C. tax exempt notes and bonds |  |                         | 66,753  |           |  |            | 62,853  |            |  |       | 3,900 |       |  |   |    | 
|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |     | 
|                                            |  | $                       | 175,351 |           |  | $          | 169,129 |            |  | $     | 6,656 |       |  | $ | 434 | 
|                                            |  |                         |         |           |  |            |         |            |  |       |       |       |  |   |     | 

31



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##### 



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

|                         |  |                         |         |           |  |   |         | 
|------------------------ |  | ----------------------- | ------- | --------- |  | - | ------- | 
|                         |  | As of December 31, 2003
|                         |  |                        
|                         |  | Fair Market             |         | Amortized
|                         |  | Value                   |         | Cost     
|                         |  |                         |         |          
|Less than one year       |  | $                       | 11,859  |           |  | $ | 11,610  | 
|Matures in 1 to 5 years  |  |                         | 109,369 |           |  |   | 106,711 | 
|Matures in 6 to 10 years |  |                         | 46,156  |           |  |   | 43,368  | 
|Matures after 10 years   |  |                         | 7,967   |           |  |   | 7,440   | 
|                         |  |                         |         |           |  |   |         | 
|                         |  | $                       | 175,351 |           |  | $ | 169,129 | 
|                         |  |                         |         |           |  |   |         | 

The Company may elect not to hold these marketable securities to maturity
and may elect to sell these securities at any time. Gross realized investment gains
on the sale of marketable securities were
$0.8 million in 2003. There were no gross realized investment gains (losses) on the
sale of marketable securities in 2002.



|5. |  | Membership fees receivable
|-- |  | --------------------------

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

|                                    |  |                    |        |      |  |   |        |  
|----------------------------------- |  | ------------------ | ------ | ---- |  | - | ------ | -
|                                    |  | As of December 31,
|                                    |  |                   
|                                    |  | 2002               |        | 2003
|                                    |  |                    |        |     
|Billed membership fees receivable   |  | $                  | 41,900 |      |  | $ | 45,345 |  
|Unbilled membership fees receivable |  |                    | 11,256 |      |  |   | 20,690 |  
|                                    |  |                    |        |      |  |   |        |  
|                                    |  |                    | 53,156 |      |  |   | 66,035 |  
|Reserve for uncollectible revenue   |  |                    | (2,800 | )    |  |   | (2,875 | )
|                                    |  |                    |        |      |  |   |        |  
|Membership fees receivable, net     |  | $                  | 50,356 |      |  | $ | 63,160 |  
|                                    |  |                    |        |      |  |   |        |  



|6. |  | Property and equipment
|-- |  | ----------------------

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

|                                        |  |                    |         |      |  |   |         |  
|--------------------------------------- |  | ------------------ | ------- | ---- |  | - | ------- | -
|                                        |  | As of December 31,
|                                        |  |                   
|                                        |  | 2002               |         | 2003
|                                        |  |                    |         |     
|Furniture, fixtures, and equipment      |  | $                  | 10,763  |      |  | $ | 14,358  |  
|Software and Web site development costs |  |                    | 8,783   |      |  |   | 9,546   |  
|Leasehold improvements                  |  |                    | 8,189   |      |  |   | 10,144  |  
|                                        |  |                    |         |      |  |   |         |  
|                                        |  |                    | 27,735  |      |  |   | 34,048  |  
|Accumulated depreciation                |  |                    | (12,819 | )    |  |   | (18,583 | )
|                                        |  |                    |         |      |  |   |         |  
|Property and equipment, net             |  | $                  | 14,916  |      |  | $ | 15,465  |  
|                                        |  |                    |         |      |  |   |         |  

32



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##### 





|7. |  | Income taxes
|-- |  | ------------

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

|                               |  |                         |        |      |  |      |        |  |  |   |        | 
|------------------------------ |  | ----------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                               |  | Year Ended December 31,
|                               |  |                        
|                               |  | 2001                    |        | 2002 |  | 2003
|                               |  |                         |        |      |  |     
|Current
tax expense            |  | $                       | 18,621 |      |  | $    | 18,418 |  |  | $ | 19,523
|Deferred
tax (benefit) expense |  |                         | (5,364 | )    |  |      | 152    |  |  |   | 8,784 
|                               |  |                         |        |      |  |      |        |  |  |  
|Provision for income taxes     |  | $                       | 13,257 |      |  | $    | 18,570 |  |  | $ | 28,307
|                               |  |                         |        |      |  |      |        |  |  |  

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

|                                                                                    |                    |  |                         |      |      |  |      |      |   |  |      |      |  
|----------------------------------------------------------------------------------- | ------------------ |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  | ---- | ---- | -
|                                                                                    |                    |  | Year Ended December 31,
|                                                                                    |                    |  |                        
|                                                                                    |                    |  | 2001                    |      | 2002 |  | 2003
|                                                                                    |                    |  |                         |      |      |  |     
|Statutory U.S. Federal income tax rate                                              |                    |  | 35.0                    | %    |      |  | 35.0 | %    |   |  | 35.0 | %   
|State income tax, net of U.S. Federal
income tax benefit                            |                    |  | 6.5                     |      |      |  | 6.5  |      |   |  |     |     
|Write
          down of deferred tax assets, net, related to a change in tax status |                    |  |                        |      |      |  |     |      |   |  | 12.8 |     
|Permanent differences, net                                                          |                    |  | (3.5                    | )    |      |  | (2.9 | )    |   |  | (3.6 | )   
|                                                                                    |                    |  |                         |      |      |  |      |      |   |  |      |     
|                                                                                    | Effective tax rate |  |                         | 38.0 | %    |  |      | 38.6 | % |  |      | 44.2 | %
|                                                                                    |                    |  |                         |      |      |  |      |      |   |  |      |     

See
Washington, D.C. income tax incentives below for a discussion of an $8.2 million non-cash charge to earnings during the year ended
December 31, 2003 for the impact on the Companys deferred
tax assets of lowering the Washington D.C. income tax rate to 0.0%
associated with a change in the Companys tax status.

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

|                          |                                                   |                                |   |                    |        |      |   |        |        | 
|------------------------- | ------------------------------------------------- | ------------------------------ | - | ------------------ | ------ | ---- | - | ------ | ------ | 
|                          |                                                   |                                |   | As of December 31,
|                          |                                                   |                                |   |                   
|                          |                                                   |                                |   | 2002               |        | 2003
|                          |                                                   |                                |   |                    |        |     
|Deferred tax assets:      |                                                   |                                |   |                    |        |      |   |       
|                          | Accrued
incentive compensation agreements         |                                | $ | 4,007              |        |      | $ | 3,175  |       
|                          | Net operating loss carry forwards                 |                                |   | 54,655             |        |      |   | 26,615 |       
|                          | Deferred revenue                                  |                                |   | 2,603              |        |      |   | 2,646  |       
|                          | Financial reporting reserves                      |                                |   | 1,161              |        |      |   | 1,007  |       
|                          | Tax credit carry forwards                         |                                |   | 1,940              |        |      |   | 8,252  |       
|                          | Employee benefits                                 |                                |   | 79                 |        |      |   | 65     |       
|                          | Operating leases                                  |                                |   | 1,092              |        |      |   | 1,083  |       
|                          |                                                   |                                |   |                    |        |      |   |        |       
|                          |                                                   | Total deferred tax assets      |   |                    | 65,537 |      |   |        | 42,843 | 
|                          |                                                   |                                |   |                    |        |      |   |        |       
|Deferred tax liabilities: |                                                   |                                |   |                    |        |      |   |       
|                          | Unrealized gains on available-for-sale securities |                                |   | 3,322              |        |      |   | 2,178  |       
|                          | Depreciation                                      |                                |   | 426                |        |      |   | 426    |       
|                          | Deferred incentive compensation                   |                                |   | 2,063              |        |      |   | 2,566  |       
|                          |                                                   |                                |   |                    |        |      |   |        |       
|                          |                                                   | Total deferred tax liabilities |   |                    | 5,811  |      |   |        | 5,170  | 
|                          |                                                   |                                |   |                    |        |      |   |        |       
|                          |                                                   | Deferred tax assets, net       |   | $                  | 59,726 |      |   | $      | 37,673 | 
|                          |                                                   |                                |   |                    |        |      |   |        |       

33



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##### 



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

The Company has net operating losses which resulted in a deferred tax
asset of $54.7 million and $26.6 million at December 31, 2002 and 2003,
respectively. The net operating losses expire in the years 2019 through 2023.
The Company has realized current tax benefits (reductions of taxes payable)
resulting from the use of net operating loss carry forwards of $18.6 million, $18.4
million and $19.5 million in the years ended December 31, 2001, 2002 and 2003,
respectively.

Washington, D.C. income tax incentives

The Office of Tax and Revenue of the Government of the District of
Columbia (the Office of Tax and Revenue) has adopted regulations in
accordance with the New E-Conomy Transformation Act of 2000 (the Act) that
modify the income and franchise tax, sales and use tax and personal property
tax regulations, effective April 2001. Specifically, the regulations provide
certain credits, exemptions and other
benefits to a Qualified High Technology Company (QHTC). In October 2003, the
Company received notification from the Office of Tax and Revenue that its
certification as a QHTC under the Act had been accepted. As a QHTC, the
Companys Washington, D.C. statutory income tax rate will be 0.0% through 2005
and 6.0% thereafter, versus 9.975% prior to this qualification, and the Company is also eligible for certain Washington, D.C. income tax credits
and other benefits.

The Company recorded a non-cash income tax charge to earnings of $8.2 million
during the year ended December 31, 2003 for the impact on its deferred tax
assets of lowering the Washington, D.C. income tax rate to 0.0%, partially
offset by the recognition of certain Washington, D.C. income tax credits.

The Company filed a claim for refund of sales and use taxes previously
paid to the Office of Tax and Revenue on qualifying QHTC purchases under the
Act. In February 2004, the Company received a notice of refund denial for the
claim, which the Company believes is inconsistent with the position taken by
the QHTC Activity Review Committee of the Office of Tax and Revenue, which
accepted the Companys QHTC status in October 2003. The Company is appealing
the denial for refund of sales and use taxes. At December 31, 2003, the Company valued its deferred income tax assets
and liabilities using the currently enacted federal income tax rate of 35.0%
and the QHTC Washington, D.C. income tax rate of 0.0%. In addition, the Company
has continued to provide for income, sales and use taxes as if it were a QHTC.
If the Office of Tax and Revenue rescinds its acceptance of the Companys QHTC
certification, or the Company otherwise determines that such action is likely,
it will record a benefit to earnings representing the impact on its existing
deferred tax assets of increasing the Washington, D.C. income tax rate to 9.975%,
offset by the elimination of certain Washington, D.C. income tax credits which,
as of December 31, 2003, would have been $2.1 million.




|8. |  | Comprehensive income (loss)
|-- |  | ---------------------------

Comprehensive income (loss) is defined as net income (loss) plus the
net-of-tax impact of foreign currency items, minimum pension liability
adjustments, and unrealized gains and losses on certain investments in debt and
equity securities. Comprehensive income for the years ended December 31, 2001,

34



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##### 



2002 and 2003, was $22.6 million, $33.7 million and $34.7 million,
respectively. The accumulated elements of comprehensive income, net of tax,
included within stockholders equity on the consolidated balance sheets are comprised solely
of the net change in unrealized gains on available-for-sale marketable
securities and translation adjustment of foreign subsidiary. Unrealized gains
(loss), net of tax, on available-for-sale marketable securities amounted to
$0.9 million, $4.1 million and $(1.0) million during the years ended December
31, 2001, 2002 and 2003, respectively.



|9. |  | Employee benefit plans
|-- |  | ----------------------

Defined contribution 401(k) plan

The Company sponsors a defined contribution 401(k) Plan (the Plan) in
which the Companys employees participate. Pursuant to the Plan, all employees
who have reached the age of twenty-one are eligible to participate. The
employer provides contributions equal to 25% of an employees contribution up
to a maximum of 4% of base salary. Contributions to the Plan for the
participants were $0.3 million, $0.4 million and $0.5 million during the years
ended December 31, 2001, 2002 and 2003, respectively.

Employee stock purchase plan

In June 2000, the Company established an employee stock purchase plan (the
ESPP). Under the ESPP, employees authorize payroll deductions from 1% to 10%
of their eligible compensation to purchase shares of the Companys common
stock. The ESPP is authorized to issue up to 1,050,000 shares of the Companys
common stock. During the years ended December 31, 2001, 2002 and 2003, the
Company issued 26,309 shares, 25,133 shares and 25,566 shares of common stock,
respectively, under the ESPP.



|10. |  | Public offerings of common stock
|--- |  | --------------------------------

In March and April 2001, March 2002 and March 2003, 3,035,000 shares,
2,100,000 shares and 588,000 shares, respectively, of the Companys common
stock were sold in registered public offerings. The Company did not directly
receive any proceeds from the sale of its common stock. All of the shares sold
in the foregoing offerings were sold by stockholders and option holders.
However, the Company did receive cash from the exercise of common stock options
in conjunction with the sale of its common stock.



|11. |  | Stock option plans
|--- |  | ------------------

Liquid Markets Agreements

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

Stock-Based Incentive Compensation Plan

In October 1997, the Company adopted the Stock-Based Incentive
Compensation Plan (the 1997 Plan). The 1997 Plan provides for the issuance of
options to purchase up to 11,008,000 shares of common stock. Any shares of
common stock which, for any reason, are not issued under the 1997 Plan are
reserved for issuance pursuant to the 1999 Stock Option Plan (the 1999 Plan).
As of December 31, 2003, 10,569,400 options, net of cancellations, to purchase
common stock had been granted under the 1997 Plan and 438,600 options, net of
cancellations, to purchase common stock had been granted under the 1999 Plan.
The Options granted under the 1997 Plan expired in April 2003.

35



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In the year ended December 31, 2001, the Company recognized compensation
expense of $0.2 million in accordance with the Substitution Agreements, which
were employee stock option agreements created in
conjunction with the Spin-off.

The Substitution Agreements provided for the exchange of The Advisory Board
Company stock options for Company stock options issued under the 1997 Plan. The
Substitution Agreements resulted in compensation expense being recognized by
the Company over the vesting period. There are no earnings charges subsequent
to December 31, 2001, related to the Substitution Agreements. In addition,
there are no stock options available to issue or stock options outstanding
under the Substitution Agreements.

1999 Stock Option Plan

In February 1999, the Company adopted the 1999 Plan, which provides for
the issuance of options to purchase up to 3,784,000 shares of common stock plus
any options to purchase shares of common stock which, for any reason, are not
issued under the 1997 Plan. During 2001, the Company granted 1,358,000 options
to purchase common stock under the 1999 Plan at a weighted average exercise
price of $31.05 per share. During 2002, the Company granted 16,000 options to
purchase common stock under the 1999 Plan at a weighted average exercise price
of $32.86 per share. During 2003, the Company granted 225,000 options to
purchase common stock under the 1999 Plan at a weighted average exercise price
of $31.65 per share. As of December 31, 2003, 4,176,153 options, net of
cancellations and including 438,600 shares of common stock carried over from
the 1997 Plan, had been granted under the 1999 Plan. The common stock options
granted under the 1999 Plan generally become exercisable 25% per year beginning
one year from the date of grant and expire between February 2009 and March
2013.

2001 Stock Option Plan

In June 2001, the Company adopted the 2001 Stock Option Plan (the 2001
Plan), which provides for the issuance of options to purchase up to 2,700,000
shares of common stock. During 2001, the Company granted no options to purchase
common stock under the 2001 Plan. During 2002, the Company granted 940,000
options to purchase common stock under the 2001 Plan at a weighted average
exercise price of $32.37 per share. During 2003, the Company granted 525,000
options to purchase common stock under the 2001 Plan at a weighted average
exercise price of $32.30 per share. As of December 31, 2003, 1,420,000 options,
net of cancellations, had been granted under the 2001 Plan. The common stock
options granted under the 2001 Plan generally become exercisable 25% per year
beginning one year from the date of grant and expire between August 2011 and
March 2013.

2002 Non-Executive Stock Incentive Plan

In March 2002, the Company adopted the 2002 Non-Executive Stock Incentive
Plan, as amended (the 2002 Plan), which provides for the issuance up to
7,300,000 shares of common stock under stock options or restricted stock
grants. The 2002 Plan is administered by the Compensation Committee of the
Companys Board of Directors. Any person who is an employee or prospective
employee of the Company is eligible for the grant of awards under the 2002
Plan, unless such person is an officer or director of the Company. The terms of
awards granted under the 2002 Plan, including vesting, forfeiture and
post termination exerciseability are set by the plan administrator, subject to
certain restrictions set forth in the 2002 Plan. During 2002, the Company granted 1,115,000 options to purchase
common stock under the 2002 Plan at a weighted average exercise price of $32.31
per share. During 2003, the Company granted 1,058,000 options to purchase
common stock under the 2002 Plan at a weighted average exercise price of $32.40
per share. As of December 31, 2003, 2,082,625 options, net of cancellations,
had been granted under the 2002 Plan. The common stock options granted under
the 2002 Plan generally become exercisable 25% per year beginning one year from
the date of grant and expire between March 2012 and July 2013.

Directors Stock Option Plan

In December 1998, the Company adopted the Directors Stock Plan (the
Directors Plan), which provides for the issuance of options to purchase up
to 860,000 shares of common stock. Pursuant to FASB Interpretation 44, stock
incentives granted to non-employee members of our Board of Directors are
accounted for under the provisions of APB Opinion 25. During 2001, the Company
granted 142,240 options to purchase common stock under the Directors Plan at a
weighted average exercise price of $31.46

36



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##### 



per share. During 2002, the Company
granted 40,000 options to purchase common stock under the Directors Plan at a
weighted average exercise price of $32.41 per share. During 2003, the Company
granted 112,240 options to purchase common stock under the Directors Plan at a
weighted average exercise price of $44.05 per share. As of December 31, 2003,
685,680 options, net of cancellations, to purchase common stock had been
granted under the Directors Plan. The common stock options granted under the
Directors Plan generally become 100% exercisable one year from the date of
grant and expire between December 2008 and October 2013.

Transactions

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

|                                 |                   |  |            |            |                |   |                |             |  |   |          |       | 
|-------------------------------- | ----------------- |  | ---------- | ---------- | -------------- | - | -------------- | ----------- |  | - | -------- | ----- | 
|                                 |                   |  |            |            |                |   |                |             |  |   | Weighted
|                                 |                   |  | Number     |            | Exercise Price |   | Average       
|                                 |                   |  | of Options |            | per Share      |   | Exercise Price
|                                 |                   |  |            |            |                |   |               
|Outstanding at December 31, 2000 |                   |  | 7,841,136  |            |                |   | $0.03-$33.11   |             |  | $ | 7.25     |      
|                                 | Options granted   |  |            | 1,514,214  |                |   |                | 26.01-43.10 |  |   |          | 31.09 | 
|                                 | Options cancelled |  |            | (159,500   | )              |   |                | 9.50-41.38  |  |   |          | 22.16 | 
|                                 | Options exercised |  |            | (3,727,882 | )              |   |                | 0.03-30.19  |  |   |          | 3.71  | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2001 |                   |  | 5,467,968  |            |                |   | 0.03-43.10     |             |  |   | 15.78    |      
|                                 | Options granted   |  |            | 2,111,000  |                |   |                | 27.62-36.81 |  |   |          | 32.34 | 
|                                 | Options cancelled |  |            | (293,474   | )              |   |                | 9.50-33.63  |  |   |          | 27.31 | 
|                                 | Options exercised |  |            | (2,266,091 | )              |   |                | 0.03-31.00  |  |   |          | 5.76  | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2002 |                   |  | 5,019,403  |            |                |   | 0.21-43.10     |             |  |   | 26.61    |      
|                                 | Options granted   |  |            | 1,920,240  |                |   |                | 30.35-50.55 |  |   |          | 32.97 | 
|                                 | Options cancelled |  |            | (129,348   | )              |   |                | 9.50-40.50  |  |   |          | 29.23 | 
|                                 | Options exercised |  |            | (632,956   | )              |   |                | 0.21-32.41  |  |   |          | 13.44 | 
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      
|Outstanding at December 31, 2003 |                   |  | 6,177,339  |            |                | $ | 7.12-$50.55    |             |  | $ | 29.89    |      
|                                 |                   |  |            |            |                |   |                |             |  |   |          |      

Information with respect to the common stock option plans outstanding at
December 31, 2003, is as follows:

|                         |   |                   |  |       |                    |            |          |  |             |       |         |  |  |      | 
|------------------------ | - | ----------------- |  | ----- | ------------------ | ---------- | -------- |  | ----------- | ----- | ------- |  |  | ---- | 
|                         |   |                   |  |       |                    |            |          |  | Weighted    |       | Average
|                         |   |                   |  |       | Number Outstanding |            | Average  |  | Remaining  
|                         |   |                   |  |       | as of              |            | Exercise |  | Contractual
|Range of Exercise Prices |   | December 31, 2003 |  | Price |                    | Life-Years
|                         |   |                   |  |       |                    |           
|                         | $ | 7.12-$21.19       |  |       |                    | 947,111    |          |  | $           | 16.89 |         |  |  | 5.78 | 
|                         |   | 26.44-31.00       |  |       |                    | 1,377,748  |          |  |             | 30.64 |         |  |  | 7.38 | 
|                         |   | 31.33-32.30       |  |       |                    | 1,821,740  |          |  |             | 32.28 |         |  |  | 9.11 | 
|                         |   | 32.41-50.55       |  |       |                    | 2,030,740  |          |  |             | 33.29 |         |  |  | 8.23 | 
|                         |   |                   |  |       |                    |            |          |  |             |       |         |  |  |      | 
|                         | $ | 7.12-$50.55       |  |       |                    | 6,177,339  |          |  | $           | 29.89 |         |  |  | 7.93 | 
|                         |   |                   |  |       |                    |            |          |  |             |       |         |  |  |      | 

As of
December 31, 2002 and 2003, 1,084,903 and 2,004,974,
respectively, common stock options with a weighted
average exercise price of $20.15 and $26.34, respectively, were exercisable.

37



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|12. |  | Supplemental cash flows
disclosures
|--- |  | -----------------------------------

The Company paid no income taxes during the years ended December 31, 2001
and 2002. During 2003, the Company made estimated income tax payments of
approximately $1.0 million. For the years ended December 31, 2001, 2002 and 2003,
the Company recognized $41.2 million, $22.2 million and $4.5 million,
respectively, in stockholders equity for tax deductions associated with the
exercise of non-qualified stock options.



|13. |  | Commitments and contingencies
|--- |  | -----------------------------

Operating leases

The Company leases office facilities in the United States and the United
Kingdom expiring on various dates over the next 16 years. Certain lease
agreements include provisions for rental escalations and require the Company to
pay for executory costs such as taxes and insurance. Future minimum rental
payments under noncancellable operating leases, excluding executory costs, are
as follows (in thousands):

|                         |       |   |        |         | 
|------------------------ | ----- | - | ------ | ------- | 
|Year Ending December 31, |       |   |        |        
|                         |       |   |        |        
|2004                     |       | $ | 8,994  |        
|2005                     |       |   | 10,595 |        
|2006                     |       |   | 12,515 |        
|2007                     |       |   | 12,806 |        
|2008                     |       |   | 11,566 |        
|Thereafter               |       |   | 60,552 |        
|                         |       |   |        |        
|                         | Total |   | $      | 117,028 | 
|                         |       |   |        |        

Rent expense charged to operations during the fiscal years ended December
31, 2001, 2002 and 2003, was $5.7 million, $7.9 million and $9.6 million,
respectively. The Company entered into $1.3 million,
$4.0 million and $2.3 million letter of credit agreements
with commercial banks, which expire June 2004, August 2004 and
January 2005, respectively, to provide security deposits for certain
of our office leases. The Company pledged certain assets as
collateral under the  letter of credit agreements. To date, no
amounts have been drawn on these agreements.

From time to time, the Company is subject to ordinary routine litigation incidental to its normal business
operation. The Company is not currently a party to, and the Companys property is not subject to, any material legal
proceedings.



|14. |  | Quarterly financial data (unaudited)
|--- |  | ------------------------------------

Unaudited summarized financial data by quarter for the years ended
December 31, 2002 and 2003 is as follows (in thousands, except per-share
amounts):

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

38



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|                                         |         |   |                    |      |         |   |              |      |             |   |        |      |  |   |        |      | 
|---------------------------------------- | ------- | - | ------------------ | ---- | ------- | - | ------------ | ---- | ----------- | - | ------ | ---- |  | - | ------ | ---- | 
|                                         |         |   | 2003 Quarter Ended
|                                         |         |   |                   
|                                         |         |   | March 31           |      | June 30 |   | September 30 |      | December 31
|                                         |         |   |                    |      |         |   |              |      |            
|Revenues                                 |         | $ | 47,283             |      |         | $ | 50,339       |      |             | $ | 53,758 |      |  | $ | 58,831 |     
|Gross profit                             |         |   | 31,165             |      |         |   | 33,302       |      |             |   | 35,533 |      |  |   | 39,237 |     
|Income before provision for income taxes |         |   | 13,756             |      |         |   | 15,656       |      |             |   | 16,447 |      |  |   | 18,136 |     
|Net income                               |         | $ | 8,336              |      |         | $ | 9,487        |      |             | $ | 5,513  |      |  | $ | 12,352 |     
|Earnings per share:                      |         |   |                    |      |         |   |              |      |             |   |        |      |  |   |        |     
|                                         | Basic   |   | $                  | 0.22 |         |   | $            | 0.25 |             |   | $      | 0.15 |  |   | $      | 0.33 | 
|                                         | Diluted |   | $                  | 0.22 |         |   | $            | 0.25 |             |   | $      | 0.14 |  |   | $      | 0.32 | 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

On July 8, 2002, upon the recommendation of our Audit Committee, the Board
of Directors dismissed Andersen as the Companys independent auditors and
appointed Ernst & Young to serve as its independent auditors for the year
ending December 31, 2002. The Company filed a current report on Form 8-K with
the SEC on July 10, 2002, which included a notification that the change was
effective on July 8, 2002.

Andersens reports on the Companys financial statements for the fiscal
year ended December 31, 2001 did not contain an adverse opinion or disclaimer
of opinion, nor were such reports qualified or modified as to uncertainty,
audit scope or accounting principles.

During the Companys fiscal year ended December 31, 2001, there were: (i)
no disagreements with Andersen on any matter of accounting principle or
practice, financial statement disclosure or auditing scope or procedure which,
if not resolved to Andersens satisfaction, would have caused them to make
reference to the subject matter in connection with their report on the
Companys financial statements for such year; and (ii) there were no reportable
events as defined in Item 304(a)(1)(v) of Regulation S-K.

During the Companys fiscal year ended December 31, 2001 and through the
date of their appointment, the Company did not consult Ernst & Young with
respect to the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on
its financial statements, or any other matters or reportable events as set
forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

Item 9A. Controls and Procedures.

We carried out an evaluation, under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14 as of December
31, 2003. Management necessarily applied
its judgment in assessing the costs and benefits of such controls and
procedures ,which, by their nature, can provide only reasonable assurance
regarding managements control objectives. It should be noted that the design
of any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely alerting
them to material information relating to the company required to be included in
our periodic SEC reports. There have been no significant changes in our
internal controls or in other factors that could significantly affect those
controls subsequent to the date of this evaluation.

No changes in
our internal controls over financial reporting occurred during the most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal controls over financial
reporting.

39



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PART III

Item 10. Directors and Executive Officers of the Registrant.

The following table sets forth the names, ages and positions with The
Corporate Executive Board Company of the persons who serve as our directors and
executive officers as of December 31, 2003:

|                      |  |     |    |          |  |                                                               
|--------------------- |  | --- | -- | -------- |  | --------------------------------------------------------------
|Directors and         |  |     |    |          |  |                                                               
|Executive Officers    |  | Age |    | Position
|                      |  |     |    |         
|James J. McGonigle    |  |     | 40 |          |  | Chairman of the Board of Directors
and Chief Executive Officer
|Robert C. Hall        |  |     | 72 |          |  | Director                                                      
|Nancy J. Karch        |  |     | 56 |          |  | Director                                                      
|David W. Kenny        |  |     | 42 |          |  | Director                                                      
|Daniel O. Leemon      |  |     | 50 |          |  | Director                                                      
|Thomas L. Monahan III |  |     | 37 |          |  | General Manager, Corporate Practice and Director              
|Harold L. Siebert     |  |     | 58 |          |  | Director                                                      
|Michael A. Archer     |  |     | 40 |          |  | Chief Marketing Officer                                       
|Derek C. M. van Bever |  |     | 46 |          |  | Chief Research Officer                                        
|Timothy R. Yost       |  |     | 32 |          |  | Chief Financial Officer                                       

James J. McGoniglehas been our Chairman of the Board since March 2001 and
our Chief Executive Officer and a director since July 1998. From the spin-off
until July 1998, Mr. McGonigle was our General Manager, and from 1995 until the
spin-off, he was the General Manager of the corporate division of The Advisory
Board Company with responsibility for managing the business assumed by us in
the spin-off. From 1990 to 1995, Mr. McGonigle was a consultant in the
Financial Institutions Group at McKinsey & Company. Mr. McGonigle serves as a
Director of FactSet, an on-line investment research service. Mr. McGonigle
received a B.A. from the Woodrow Wilson School at Princeton University and a
J.D. from Harvard Law School.

Robert C. Hallhas been a director since February 1999. Mr. Hall has been
the President and Chief Executive Officer of Harborside Plus, Inc., a
financial services company, since
March 2001. From 1995 until his retirement in January 1999, Mr. Hall served as the Vice
President of The Thomson Corporation, a publicly held information publishing
company. From 1990 to 1995, Mr. Hall was the Chief Executive Officer of Thomson
Information and Publishing Group, a division of The Thomson Corporation
involved in professional information and publishing. From 1985 to 1990, Mr.
Hall was the President of Thomson Financial Services Group, another publishing
division of The Thomson Corporation. Mr. Hall received a B.S. from Iowa State
University.

Nancy J. Karchhas been a director since October 2001. Ms. Karch was a
senior partner of McKinsey & Co., an independent consulting firm, from 1988
until her retirement in 2000. She had served in various executive capacities at
McKinsey since 1974. Ms. Karch is a member of The McKinsey Advisory Council,
and serves as a director of Toys R Us, Inc., retail merchants, Liz Claiborne,
Inc., apparel marketers, The Gillette Company, a manufacturer of consumer
products and the Westchester Land Trust, a not-for-profit environmental
conservation organization. Ms. Karch received a B.A. from Cornell University,
an M.S. from Northeastern University and an M.B.A. from Harvard Business
School.

David W. Kennyhas been a director since February 1999. Mr. Kenny is the
Chairman and Chief Executive Officer of Digitas, Inc., a relationship marketing
services firm. Mr. Kenny has been the Chairman of Digitas since December 1998
and Chief Executive Officer since September 1997. Prior to Digitas, Mr. Kenny
held a number of executive positions with Bain & Company, an independent
consulting firm, from 1988 through 1997. Mr. Kenny received a B.S. from the
General Motors Institute and an M.B.A. from Harvard Business School.

Daniel O. Leemonhas been a director since October 2003. Mr. Leemon is the
Executive Vice President and Chief Strategy Officer for the Charles Schwab
Corporation (Schwab), a financial holding company, and is a member of its Executive Committee.

40



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Mr. Leemon has been with
Schwab since September 1995. Prior to Schwab, Mr. Leemon held numerous
executive positions with the Boston Consulting Group, an independent
consulting firm. Prior to the Boston Consulting Group, Mr. Leemon held senior
management positions with several consumer goods and retail start ups. Mr.
Leemon received a B.S. from the Massachusetts Institute of Technology and an
M.B.A. from Stanford University.

Thomas L. Monahan IIIhas been a director since June 2001 and our General
Manager, Corporate Practice, since January 2001. From November 1998 until
January 2001, Mr. Monahan served as one of our Executive Directors, Research,
and from the spin-off until November 1998, he served as our Managing Director,
Research. Prior to the spin-off, Mr. Monahan served in similar capacities with
The Advisory Board Company, which he joined in January 1996. Prior to January
1996, Mr. Monahan served as a senior consultant for the Deloitte & Touche
Consulting Group, a Director at the Committee for Economic Development and a
staff consultant at Andersen Consulting. Mr. Monahan received a B.A. from
Harvard University and an M.B.A. from New York University.

Harold L. Sieberthas been a director since July 1998, and served as the
Chairman of the Board from July 1998 until January 2000. From 1996 through July
1998, Mr. Siebert served as Chief Executive Officer and Chairman of Inforum
Inc., a company providing marketing and planning systems for health-care
clients, and as Executive Vice President of Medstat/Thomson, a healthcare
information company. From 1995 until 1996, Mr. Siebert served as Bureau Chief
of TennCare, the State of Tennessees Medicaid managed care program. From 1993
until 1995, Mr. Siebert was a consultant to Medstat/Thomson. In 1988, Mr.
Siebert founded Inforum, Inc. and served as its President and Chief Executive
Officer from 1988 through 1993. Prior to 1988, he held various senior-level
positions at HBO & Co. and Baxter International. Mr. Siebert received his B.S.
from Miami University in Oxford, Ohio.

Michael A. Archerhas been our Chief Marketing Officer since November
2002. Mr. Archer joined the Company in March 2002 as our General Manager, Sales
and Marketing. From 1989 through March 2002, Mr. Archer held various positions
of increasing responsibility at Dun & Bradstreet, Inc., including Senior Vice
President  Major Markets. Prior to 1989, Mr. Archer served as a sales manager
with Inter-Tel, Inc. Mr. Archer received a B.A. and an M.B.A. from the
University of California at Los Angeles.

Derek C. M. van Beverhas been our Chief Research Officer since the
spin-off. From 1995 through the date of the spin-off, he served as the Chief
Research Officer of the business assumed by us in the spin-off. Prior to that,
he served in various management capacities with The Advisory Board Company,
which he joined in 1981. Mr. van Bever received a B.A. and an M.A. from the
University of Delaware and an M.B.A. from Harvard Business School.

Timothy R. Yosthas been our Chief Financial Officer since September 2002.
Mr. Yost joined the Company in January 1997, and has held a variety of
financial positions of increasing responsibility, including senior director,
finance. Prior to 1997, Mr. Yost served as an equity analyst with Chapin,
Davis. Mr. Yost received a B.B.A. from Loyola College and an M.S. from the
George Washington University.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the
Companys directors, executive officers, and 10% stockholders to file forms
with the SEC to report their ownership of the Companys stock and any changes
in ownership. Anyone required to file forms with the SEC must also send copies
of the forms to the Company. We have reviewed all forms provided to us. Based
on that review and on written information given to us by our executive officers
and directors, we acknowledge that the following Section 16(s) filings were not
filed within two business days following the underlying transaction:

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|                      |  |      |   |             |  |                |  |                |  |  |  | 
|--------------------- |  | ---- | - | ----------- |  | -------------- |  | -------------- |  |  |  | 
|                      |  |      |   |             |  | Date of        |  |                |  | 
|Name of Filer         |  | Form |   | Transaction |  | Date of Filing
|                      |  |      |   |             |  |               
|James J. McGonigle    |  |      | 4 |             |  | March 14, 2003 |  | March 17, 2003
|James J. McGonigle    |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Thomas L. Monahan III |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Robert C. Hall        |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Nancy J. Karch        |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|David W. Kenny        |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Harold L. Siebert     |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Timothy R. Yost       |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Derek C.M. van Bever  |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003
|Michael A. Archer     |  |      | 4 |             |  | March 11, 2003 |  | March 17, 2003

Audit Committee Financial Expert

The Board of
Directors has determined that Mr. Robert C. Hall, Chairman of
the Audit Committee, is an audit committee financial expert as defined by Item
401(h) of Regulation S-K under the Exchange Act and is independent within the meaning of Item 7(d)(3)(iv)
of Schedule 14A under the Exchange Act.

Audit Committee

We have a separately designated standing Audit Committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the
Audit Committee are Mr. Hall, Ms. Karch and Mr. Kenny.

Code of Ethics

We
have adopted a code of ethics that applies to our Chief Executive
 Officer, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer known
 as The Corporate
Executive Board Company Code of Ethics for Senior Financial Officers.

42



---



##### 



Item 11. Executive Compensation.

The following table presents certain information concerning compensation
earned for services rendered for 2001, 2002, and 2003 by the Chief Executive
Officer and the four other most highly paid persons who served as executive
officers during 2003 (the Named Officers):

|                                    |  |      |      |        |  |              |         |                   |  |                 |         |     |  |  |         |     |  |           |           | 
|----------------------------------- |  | ---- | ---- | ------ |  | ------------ | ------- | ----------------- |  | --------------- | ------- | --- |  |  | ------- | --- |  | --------- | --------- | 
|                                    |  |      |      |        |  | Annual       |         | Long-Term         |  |                 |         |    
|                                    |  |      |      |        |  | Compensation |         | Compensation      |  |                 |         |    
|                                    |  |      |      |        |  |              |         |                   |  |                 |         |    
|                                    |  |      |      |        |  |              |         |                   |  |                 |         |     |  |  |         |     |  | All Other
|Name and Principal Positions        |  | Year |      | Salary |  | Bonus        |         | Number of Options |  | Compensation(1)
|                                    |  |      |      |        |  |              |         |                   |  |                
|James J. McGonigle                  |  |      | 2003 |        |  | $            | 591,667 |                   |  | $               | 400,000 |     |  |  | 200,000 |     |  |           |          | 
|Chief Executive Officer             |  |      | 2002 |        |  |              | 541,700 |                   |  |                 | 325,000 |     |  |  | 350,000 | (2) |  |           |          | 
|                                    |  |      | 2001 |        |  |              | 500,000 |                   |  |                 | 225,000 |     |  |  | 100,000 |     |  |           |          | 
|                                    |  |     
|Michael A. Archer                   |  |      | 2003 |        |  | $            | 375,000 |                   |  |                 |        | (3) |  |  | 150,000 |     |  |           |          | 
|Chief Marketing Officer             |  |      | 2002 |        |  |              | 251,300 |                   |  | $               | 450,000 | (4) |  |  | 100,000 |     |  |           |          | 
|                                    |  |      | 2001 |        |  |              |        |                   |  |                 |        |     |  |  |        |     |  |           |          | 
|                                    |  |     
|Thomas L. Monahan III               |  |      | 2003 |        |  | $            | 416,671 |                   |  |                 |        | (3) |  |  | 50,000  |     |  |           |          | 
|General Manager, Corporate
Practice |  |      | 2002 |        |  | $            | 400,000 |                   |  | $               | 80,000  |     |  |  | 70,000  |     |  |           |          | 
|                                    |  |      | 2001 |        |  |              | 385,000 |                   |  |                 |        |     |  |  | 75,000  |     |  |           |          | 
|                                    |  |     
|Derek C. M. van Bever               |  |      | 2003 |        |  | $            | 426,667 |                   |  |                 |        | (3) |  |  | 50,000  |     |  |           |          | 
|Chief Research Officer              |  |      | 2002 |        |  |              | 410,000 |                   |  | $               | 102,000 |     |  |  | 70,000  |     |  |           |          | 
|                                    |  |      | 2001 |        |  |              | 410,000 |                   |  |                 |        |     |  |  | 35,000  |     |  | $         | 1,700,000 | 
|                                    |  |     
|Timothy R. Yost                     |  |      | 2003 |        |  | $            | 267,500 |                   |  |                 |        | (3) |  |  | 50,000  |     |  |           |          | 
|Chief Financial Officer             |  |      | 2002 |        |  |              | 191,700 |                   |  | $               | 64,000  | (5) |  |  | 65,000  |     |  |           |          | 
|                                    |  |      | 2001 |        |  |              |        |                   |  |                 |        |     |  |  |        |     |  |           |          | 



|(1) |  | Reflects amounts paid to Mr. van Bever in 2001 in connection with the repurchase of certain options of The Advisory Board
Company prior to the time of the spin-off.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes options to purchase 150,000 shares of
our common stock granted to Mr. McGonigle for his election to Chairman
of the Board of Directors.                    
|   
|(3) |  | Bonus compensation for the year ended December 31, 2003 had not
been finalized at the time of the filing of this Annual Report on Form
 10-K.                       
|   
|(4) |  | Includes a signing bonus of
$50,000 paid to Mr. Archer upon the commencement of his employment.                                                                     
|   
|(5) |  | Mr. Yost became our Chief Financial Officer effective September 1, 2002.                                                                                            

Option Grants in Fiscal 2003

The following table shows information about stock option grants to the
Named Officers during fiscal 2003. These options are included in the Summary
Compensation Table above. All options were granted at fair market value under
the 2001 Stock Option Plan (the 2001 Plan). The options have 10-year terms.
The rules of the SEC require us to show hypothetical gains that the Named
Officers would have for these
options at the end of their 10-year terms. These gains are calculated assuming
annual compound stock price appreciation of 5% and 10% from the date the option
was originally granted to the end of the option term. The 5% and 10% assumed
annual compound rates of stock price appreciation are required by SEC rules.
They are not our estimate or projection of future stock prices.

43



---



##### 



The following table sets forth certain information concerning grants of
stock options to each of the Named Officers during 2003:

Stock Option Grants in 2003

|                      |  |                      |         |                      |  |             |      |          |  |            |       |    |  |             |       |                  |  |                |  |                 |           |  |  |   |            |  |  | 
|--------------------- |  | -------------------- | ------- | -------------------- |  | ----------- | ---- | -------- |  | ---------- | ----- | -- |  | ----------- | ----- | ---------------- |  | -------------- |  | --------------- | --------- |  |  | - | ---------- |  |  | 
|                      |  | Individual Grants(1) |         | Potential Realizable
|                      |  |                      |         | Value at Assumed    
|                      |  |                      |         |                      |  | % of Total  |      |          |  |            |       |    |  |             |       |                  |  |                |  | Annual Rates of
|                      |  | Number of            |         | Options              |  |             |      |          |  |            |       |    |  |             |       |                  |  | Stock Price   
|                      |  | Shares               |         | Granted to           |  |             |      |          |  | Market     |       |    |  |             |       | Appreciation for
|                      |  | Underlying           |         | Employees            |  | Exercise    |      | Price on |  |            |       |    |  | Option Term
|                      |  | Option               |         | in                   |  | Price       |      | Date of  |  | Expiration |       |   
|Name                  |  | Grants               |         | Fiscal Year          |  | (per share) |      | Grant    |  | Date       |       | 5% |  | 10%        
|                      |  |                      |         |                      |  |             |      |          |  |            |       |    |  |            
|James J. McGonigle    |  |                      | 200,000 |                      |  |             | 10.4 | %        |  | $          | 32.30 |    |  | $           | 32.30 |                  |  | March 11, 2013 |  | $               | 4,062,659 |  |  | $ | 10,295,576 | 
|Michael A. Archer     |  |                      | 150,000 |                      |  |             | 7.8  |          |  |            | 32.30 |    |  |             | 32.30 |                  |  | March 11, 2013 |  |                 | 3,046,994 |  |  |   | 7,721,682  | 
|Thomas L. Monahan III |  |                      | 50,000  |                      |  |             | 2.6  |          |  |            | 32.30 |    |  |             | 32.30 |                  |  | March 11, 2013 |  |                 | 1,015,665 |  |  |   | 2,573,894  | 
|Derek C. M. van Bever |  |                      | 50,000  |                      |  |             | 2.6  |          |  |            | 32.30 |    |  |             | 32.30 |                  |  | March 11, 2013 |  |                 | 1,015,665 |  |  |   | 2,573,894  | 
|Timothy R. Yost       |  |                      | 50,000  |                      |  |             | 2.6  |          |  |            | 32.30 |    |  |             | 32.30 |                  |  | March 11, 2013 |  |                 | 1,015,665 |  |  |   | 2,573,894  | 



|(1) |  | Options granted under the 2001 Plan become exercisable 25% per year beginning one year after the date of grant.
|--- |  | ---------------------------------------------------------------------------------------------------------------

Option Exercises in 2003 and Year-End Option Values

The following table shows information about the value realized on option
exercises for each of the Named Officers during fiscal 2003, and the value of
their unexercised options at the end of fiscal 2003. Value realized, or gain,
is measured as the difference between the exercise price and market value or
the price at which the shares were sold on the date of exercise.

44



---



##### 



Aggregated Option Exercises in 2003
and Year-End Option Values

|                      |  |             |        |          |  |             |         |                            |  |                        |         |                         |  |  |         |  |  |   |           |  |  |   |           | 
|--------------------- |  | ----------- | ------ | -------- |  | ----------- | ------- | -------------------------- |  | ---------------------- | ------- | ----------------------- |  |  | ------- |  |  | - | --------- |  |  | - | --------- | 
|                      |  |             |        |          |  |             |         |                            |  | Number of Securities   |         | Value of Unexercised   
|                      |  |             |        |          |  |             |         |                            |  | Underlying Unexercised |         | In-the-Money Options at
|                      |  | Shares      |        |          |  |             |         | Options at Fiscal Year-End |  | Fiscal Year-End (1)   
|                      |  | Acquired    |        | Value    |  |             |         |                           
|Name                  |  | On Exercise |        | Realized |  | Exercisable |         | Unexercisable              |  | Exercisable            |         | Unexercisable          
|                      |  |             |        |          |  |             |         |                            |  |                        |         |                        
|James J. McGonigle    |  |             | 10,526 |          |  | $           | 262,518 |                            |  |                        | 377,796 |                         |  |  | 430,000 |  |  | $ | 7,333,577 |  |  | $ | 6,560,900 | 
|Michael A. Archer     |  |             |       |          |  |             |        |                            |  |                        | 25,000  |                         |  |  | 225,000 |  |  |   | 320,500   |  |  |   | 3,117,000 | 
|Thomas L. Monahan III |  |             | 35,000 |          |  |             | 796,250 |                            |  |                        | 80,110  |                         |  |  | 152,500 |  |  |   | 1,476,978 |  |  |   | 2,373,275 | 
|Derek C. M. van Bever |  |             | 11,250 |          |  |             | 226,713 |                            |  |                        | 48,408  |                         |  |  | 130,000 |  |  |   | 865,411   |  |  |   | 1,996,175 | 
|Timothy R. Yost       |  |             |       |          |  |             |        |                            |  |                        | 35,750  |                         |  |  | 110,250 |  |  |   | 676,135   |  |  |   | 1,759,495 | 

(1)  Based on the closing price of our common stock on December 31, 2003 of $46.67 per share.

Board of Directors Compensation

The Board of Directors or, to the extent authorized by the Board, the
Compensation Committee, sets directors compensation under The Corporate
Executive Board Company Directors Stock Plan and such other arrangements as
the Compensation Committee determines to be appropriate. Each director who is
not an employee, upon election as a non-employee director, received a one-time
grant of options to purchase 72,240 shares of common stock. For 2003,
non-employee directors also received a grant of options to purchase 10,000
shares of common stock and a $20,000 annual retainer. Directors who are
employees of the Company did not receive additional cash compensation for their
service on the Board. Compensation paid to Messrs. McGonigle and Monahan for
2003 is described above in Item 11 of this Annual Report on Form 10-K.

Employment Contracts, Termination of Employment and Change of Control Arrangements

Option Plans

The Corporate Executive Board Company 1999 Stock Option Plan, The Corporate
Executive Board Company 2001 Stock Option Plan and The Corporate Executive
Board Company 2002 Non-Executive Stock Incentive Plan

In the event that there is any change in the number or kind of the
outstanding shares of our common stock, whether by reason of merger,
consolidation or otherwise, then the plan administrator of the 1999 Plan, the
2001 Plan and the 2002 Plan (the Plans) shall, in its sole discretion,
determine the appropriate adjustment, if any. In addition, in the event of such
a change, the plan administrator may accelerate the time or times at which any
option may be exercised and may provide for cancellation of accelerated options
that are not exercised within a time prescribed by the plan administrator in
its sole discretion. Options granted under the Plans generally provide that, if
an optionee remains employed by us for one year following a change of
control, or if during such time the optionees employment is terminated for any
reason other than for cause or voluntary resignation, all options granted under
the Plans become immediately exercisable. For this purpose, a change of control
includes acquisition by any person of more than 50% of our stock, a
change in a majority of the Board of Directors to include directors not
nominated by us and stockholder approval of certain mergers, asset
sales or plans of liquidation.

The Corporate Executive Board Stock-Based Incentive Compensation Plan

In the event of a merger or other form of corporate reorganization, any
unexercised options shall be subject to the terms of the agreement or plan of
merger or reorganization effecting such merger or
reorganization and shall be converted, redeemed, exchanged, cancelled or
otherwise treated as provided in

45



---



##### 



such agreement or plan of merger or
reorganization. Subject to the foregoing, if the shares of our stock are
changed into or exchanged for a different number or kind of shares or
securities, as the result of any one or more reorganizations,
recapitalizations, mergers, acquisitions, or similar events, an appropriate
adjustment shall be made (1) in the number and kind of shares or other
securities subject to outstanding options, and (2) to the price for each share
or other unit of any securities subject to the options, in accordance with this
Plan.

Employment Arrangements

Mr. McGonigle is employed by us pursuant to the terms of an
employment agreement, which continues in effect until Mr. McGonigles
termination or separation from us. Under the terms of the employment
agreement, Mr. McGonigle received an annual salary of $591,667 in 2003, which
is subject to periodic increases at our sole discretion. The
employment agreement requires Mr. McGonigle to devote his efforts and abilities
to us on a full-time basis. The employment agreement also provides
that Mr. McGonigle will receive an amount equal to 125% of one years base
salary and that all the options granted to him will vest and become exercisable
immediately if he is terminated without cause.

Mr. Archer is employed by us pursuant to the terms of an
employment agreement, which continues in effect until Mr. Archers termination
or separation from the Company. Under the terms of the employment agreement,
Mr. Archer received an annual salary of $375,000 in 2003, which is subject to
periodic increases at our sole discretion. The employment agreement
requires Mr. Archer to devote his efforts and abilities to us on a
full-time basis. The employment agreement also provides that Mr. Archer will
receive an amount equal to 100% of one years base salary plus $100,000 and
that all the options granted to him will vest and become exercisable
immediately if he is terminated without cause.

Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the
beneficial ownership of The Corporate Executive Board Companys common stock as
of February 16, 2004, by (i) each stockholder owning 5% or more of the common
stock, (ii) each Named Officer, (iii) each director and (iv) all current
directors and executive officers as a group.

|                                                                    |  |               |           |                       |  |        |     |         |  |  |           |  |  |  |     |  
|------------------------------------------------------------------- |  | ------------- | --------- | --------------------- |  | ------ | --- | ------- |  |  | --------- |  |  |  | --- | -
|                                                                    |  | Amount        |           |                       |  |        |     |         |  | 
|                                                                    |  | and Nature    |           |                       |  |        |     |         |  | 
|                                                                    |  | of Beneficial |           |                       |  |        |     |         |  | 
|                                                                    |  | Ownership(1)  |           | Total Equity Stake(2)
|                                                                    |  |               |           |                      
|Name of Beneficial Owner                                            |  | Number        |           | Percent               |  | Number |     | Percent
|                                                                    |  |               |           |                       |  |        |     |        
|James J. McGonigle(3)                                               |  |               | 581,028   |                       |  |        | 1.5 | %       |  |  | 856,028   |  |  |  | 2.1 | %
|Robert C. Hall(4)                                                   |  |               | 52,240    |                       |  |        | *   |         |  |  | 52,240    |  |  |  | *   |  
|Nancy J. Karch (5)                                                  |  |               | 93,240    |                       |  |        | *   |         |  |  | 93,240    |  |  |  | *   |  
|David W. Kenny(6)                                                   |  |               | 75,240    |                       |  |        | *   |         |  |  | 75,240    |  |  |  | *   |  
|Daniel O. Leemon(7)                                                 |  |               |          |                       |  |        | *   |         |  |  | 72,240    |  |  |  | *   |  
|Thomas L. Monahan III(8)                                            |  |               | 141,676   |                       |  |        | *   |         |  |  | 232,926   |  |  |  | *   |  
|Harold L. Siebert(9)                                                |  |               | 223,432   |                       |  |        | *   |         |  |  | 223,432   |  |  |  | *   |  
|Michael A. Archer (10)                                              |  |               | 87,500    |                       |  |        | *   |         |  |  | 250,000   |  |  |  | *   |  
|Derek C. M. van Bever(11)                                           |  |               | 104,259   |                       |  |        | *   |         |  |  | 185,509   |  |  |  | *   |  
|Timothy R. Yost(12)                                                 |  |               | 58,250    |                       |  |        | *   |         |  |  | 146,000   |  |  |  | *   |  
|Massachusetts Financial Services Company(13)                        |  |               | 2,100,190 |                       |  |        | 5.6 | %       |  |  | 2,100,190 |  |  |  | 5.3 | %
|All current directors and
executive officers as a group
(10 people) |  |               | 1,416,865 |                       |  |        | 3.6 | %       |  |  | 2,186,855 |  |  |  | 5.5 | %



|* |  | Indicates ownership of less than 1%.
|- |  | ------------------------------------

46



---



##### 





|(1)  |  | Unless indicated in the notes, each stockholder has sole voting and investment power for all shares shown, subject to
community property laws that may apply to create shared voting and investment power. We have included in shares owned
by each stockholder all options held by the stockholder that are currently exercisable or exercisable within 60 days
of February 16, 2004 (which would be April 16, 2004).                                          
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  |  | The number column indicates the number of shares owned assuming the exercise of all options, whether vested or
unvested, without regard to whether or not the options are exercisable within 60 days. Percentages in the percent
column are calculated on a diluted basis, assuming that all shares subject to options are deemed to be outstanding,
whether vested or unvested and without regard to whether or not the options are exercisable within 60 days.
|    
|(3)  |  | Beneficial ownership includes 532,796 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                   
|    
|(4)  |  | Beneficial ownership consists of 52,240 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                 
|    
|(5)  |  | Beneficial ownership includes 92,240 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                    
|    
|(6)  |  | Beneficial ownership includes 75,240 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                    
|    
|(7)  |  | Beneficial ownership includes 0 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                         
|    
|(8)  |  | Beneficial ownership includes 141,360 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                   
|    
|(9)  |  | Beneficial ownership includes 204,318 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                   
|    
|(10) |  | Beneficial ownership includes 87,500 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                    
|    
|(11) |  | Beneficial ownership includes 97,158 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                    
|    
|(12) |  | Beneficial ownership includes 58,250 shares issuable upon the exercise of options held by the stockholder that are
currently exercisable or exercisable within 60 days of February 16, 2004 (which would be April 16, 2004).                                                                                                                                                                                                                                    



|(13) |  | As reported in a Schedule 13G
filed on February 12, 2004. The address of Massachusetts
Financial Services Company is 500 Boylston Street, Boston, MA, 02116.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

47



---



##### 



The following table sets forth information about our
compensation plans at December 31, 2003.

Equity Compensation Plan Information

|                                                           |  |                   |           |                      |  |                          |       |                     |  |           |           | 
|---------------------------------------------------------- |  | ----------------- | --------- | -------------------- |  | ------------------------ | ----- | ------------------- |  | --------- | --------- | 
|                                                           |  | (A)               |           | (B)                  |  | (C)                     
|                                                           |  |                   |           |                      |  |                         
|                                                           |  |                   |           |                      |  |                          |       |                     |  | Number Of
|                                                           |  | Number Of         |           |                      |  |                          |       | Securities         
|                                                           |  | Securities To Be  |           |                      |  |                          |       | Remaining Available
|                                                           |  | Issued Upon       |           |                      |  |                          |       | For Equity         
|                                                           |  | Exercise Of       |           | Weighted-Average     |  | Compensation Plans      
|                                                           |  | Outstanding       |           | Exercise Price Of    |  | (Excluding              
|                                                           |  | Options, Warrants |           | Outstanding Options, |  | Securities              
|Plan Category                                              |  | And Rights        |           | Warrants And Rights  |  | Reflected In Column (A))
|                                                           |  |                   |           |                      |  |                         
|Equity compensation plans
approved by stockholders         |  |                   | 4,101,839 |                      |  | $                        | 28.64 |                     |  |           | 1,500,767 | 
|Equity compensation plans
not approved by
stockholders (1) |  |                   | 2,075,500 |                      |  |                          | 32.35 |                     |  |           | 5,217,375 | 
|                                                           |  |                   |           |                      |  |                          |       |                     |  |           |           | 
|Total                                                      |  |                   | 6,177,339 |                      |  | $                        | 29.89 |                     |  |           | 6,718,142 | 
|                                                           |  |                   |           |                      |  |                          |       |                     |  |           |           | 



|(1) |  | See Note 11 to our audited financial statements for the year ended December 31, 2003
for a narrative description of the 2002 Non-Executive Stock Incentive Plan, which was not
approved by our stockholders.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 13. Certain Relationships and Related Transactions.

None.

48



---



##### 



Item 14. Principal Accounting Fees and Services.

Fees Paid

Fees paid to our independent auditors for each of the past two years are set
forth below:

|                   |  |                         |        |                   |  |                   |         |  |  |   |         | 
|------------------ |  | ----------------------- | ------ | ----------------- |  | ----------------- | ------- |  |  | - | ------- | 
|                   |  | Year Ended December 31,
|                   |  |                        
|                   |  | 2002                    |        | 2003             
|                   |  |                         |        |                  
|                   |  | Arthur Andersen LLP     |        | Ernst & Young LLP |  | Ernst & Young LLP
|                   |  |                         |        |                   |  |                  
|Audit fees         |  | $                       | 7,000  |                   |  | $                 | 101,749 |  |  | $ | 196,940 | 
|Audit-related fees |  |                         | 39,391 |                   |  |                   | 12,000  |  |  |   | 12,237  | 
|Tax fees           |  |                         | 48,546 |                   |  |                   | 16,050  |  |  |   | 122,994 | 
|All other fees     |  |                         |       |                   |  |                   |        |  |  |   |        | 
|                   |  |                         |        |                   |  |                   |         |  |  |   |         | 
|Total              |  | $                       | 94,937 |                   |  | $                 | 129,799 |  |  | $ | 332,171 | 
|                   |  |                         |        |                   |  |                   |         |  |  |   |         | 

Audit Fees

Audit fees were for professional services rendered for the audit of
our annual financial statements for the years ended December 31, 2002 and
2003, the reviews of the financial statements included in our
quarterly reports on Form 10-Q for the years ended December 31, 2002 and 2003
and services in connection with our statutory and regulatory filings
for the years ended December 31, 2002 and 2003.

Audit-Related Fees

Audit related fees were for assurance and related services rendered that
are reasonably related to the audit and reviews of our financial
statements for the years ended December 31, 2002 and 2003, exclusive of the
fees disclosed as Audit Fees above. These fees include benefit plan audits,
assistance with registration statements and comfort letters and consents not
performed directly in connection with audits.

Tax Fees

Tax fees were for services related to tax compliance, consulting and
planning services rendered during the years ended December 31,
2002 and 2003. In 2003, these services related principally to the
preparation of our QHTC application to the Office of Tax and Revenue.

All Other Fees

We did not incur fees for any services, other than the fees
disclosed above relating to audit, audit-related and tax services, rendered
during the years ended December 31, 2002 and 2003.

49



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##### 



Audit and Non-Audit Service Pre-Approval Policy The Audit Committee has adopted an Audit and Non-Audit Service
Pre-Approval Policy that it believes will result in an effective and efficient
procedure to pre-approve services performed by the independent auditor. Audit Services.Audit services include the annual financial statement audit
(including quarterly reviews) and other procedures required to be performed by
the independent auditor to be able to form an opinion on our financial
statements and the attestation engagement for the independent auditors report
on managements report on internal controls for financial reporting. The Audit
Committee may pre-approve specified annual audit services engagement terms and
fees and other specified audit fees. All other audit services must be
specifically pre-approved by the Audit Committee. The Audit Committee monitors
the audit services engagement and may approve, if necessary, any changes in
terms, conditions and fees resulting from changes in audit scope or other
items. Audit-Related Services.Audit-related services are assurance and related
services that are reasonably related to the performance of the audit or review
of our financial statements, historically have been provided to us by the
independent auditor and are consistent with the SECs rules on auditor
independence. The Audit Committee may pre-approve specified audit-related
services within pre-approved fee levels. All other audit-related services must
be pre-approved by the Audit Committee. Tax Services.The Audit Committee may pre-approve specified tax services that
the Audit Committee believes would not impair the independence of the auditor
and that are consistent with SEC rules and guidance. All other tax services
must be specifically approved by the Audit Committee. All Other Services.Other services are services provided by the independent
auditor that do not fall within the established audit, audit-related and tax
services categories. The Audit Committee may pre-approve specified other
services that do not fall within any of the specified prohibited categories of
services. Delegation and Fee Levels.The Audit Committee has authorized the chair of the
Audit Committee or any of its other members to pre-approve audit, permissible
non-audit services and tax services that have not been previously pre-approved,
if the services are consistent with the SECs rules on auditor independence and
are not specified prohibited services, up to $50,000 per engagement.
Engagements that exceed $50,000 must be approved by the full Audit Committee.
The Audit Committee chair or other member(s), as applicable, are required to
report any pre-approval decisions under these procedures to the full Audit
Committee at its first scheduled meeting following any such pre-approval. Pre-Approved Fee Levels.The Audit Committee reviews the established
pre-approved fee levels annually and makes adjustments to those levels as it
deems necessary or appropriate. Any proposed service that would exceed the
applicable pre-approved fee level after taking into account fees incurred for
services in the same category requires pre-approval by the Audit Committee. Procedures. All requests for services to be provided by the independent
auditor, which must include a detailed description of the services to be
rendered and the amount of corresponding fees, are submitted to the Chief
Financial Officer. The Chief Financial Officer authorizes services that have
been pre-approved by the Audit Committee. If there is any question as to
whether a proposed service fits within a pre-approved service, the Audit
Committee chair is consulted for a determination. The Chief Financial Officer
submits requests or applications to provide services that have not been
pre-approved by the Audit Committee, which must include an affirmation by the
Chief Financial Officer and the independent auditor that the request or
application is consistent with the SECs rules on auditor independence, to the
Audit Committee (or its chair or any of its other members pursuant to delegated
authority) for approval. 50




---



##### 



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

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) |  | The following financial statements of the registrant and report of
Independent Auditors are included in Item 8 hereof:                                                                                                                                                                                                                                                                                                                                    
|       |  | Report of Ernst & Young LLP, Independent Auditors
Report of Arthur Andersen LLP, Independent Auditors

Balance Sheets as of December 31, 2002 and 2003,
Statements of Income for the years ended December 31, 2001, 2002
and 2003,

Statements of Cash Flows for the years ended December 31, 2001,
2002 and 2003,

Statements of Changes in Stockholders Equity for the years ended December
31, 2001, 2002 and 2003, and Notes to Financial Statements.
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(a)(2) |  | Except as provided below, all schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission
either have been included in the Financial Statements or are not required
under the related instructions, or are not applicable and therefore have been
omitted. Schedule IIValuation and Qualifying Accounts.                                                                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(a)(3) |  | The following exhibits are either provided with this Annual report Form 10-K
or are incorporated herein by reference:                                                                                                                                                                                                                                                                                                                                     

|        |  |                                                                                                                                                                                                                                                           
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                           
|No.     |  | Description of Exhibit                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                           
|3.1     |  | 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    |  | Stock Option Agreement Pursuant to The Corporate Executive Board Company
Stock-Based Incentive Compensation Plan, effective as of April 15, 1998,
between The Corporate Executive Board Company and Harold L. Siebert.*                                  
|        |  |                                                                                                                                                                                                                                                           
|10.4    |  | Stock Option Agreement Pursuant to The Corporate Executive Board Company
Stock-Based Incentive Compensation Plan, effective as of October 31, 1997,
between The Corporate Executive Board Company and Derek C. van Bever, as
amended on July 21, 1998.*  
|        |  |                                                                                                                                                                                                                                                           
|10.5    |  | Form of Stock Option Agreement Pursuant to The Corporate Advisory Board
Company Stock-Based Incentive Compensation Plan, including form of
amendment.*                                                                                                    
|        |  |                                                                                                                                                                                                                                                           
|10.6    |  | 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.*             
|        |  |                                                                                                                                                                                                                                                           
|10.7    |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities,                                                                                                                                                                

51



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##### 



|        |  |                                                                                                                                                                                                     
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                     
|No.     |  | Description of Exhibit                                                                                                                                                                              
|        |  |                                                                                                                                                                                                     
|        |  | Non-Competition, Non-Solicitation and Work Product, effective
as of April 15, 1998, between The Corporate Executive Board Company and
Harold L. Siebert.*                                           
|        |  |                                                                                                                                                                                                     
|10.8    |  | Form of Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work Product.*                                             
|        |  |                                                                                                                                                                                                     
|10.9    |  | The Corporate Executive Board Company Stock-Based Incentive Compensation
Plan, adopted on October 31, 1997, as amended and restated in
February 1999.***                                            
|        |  |                                                                                                                                                                                                     
|10.10   |  | Amended Directors Stock Plan and Standard Terms and Conditions for Director
Non-qualified Stock Options.***                                                                                        
|        |  |                                                                                                                                                                                                     
|10.11   |  | 1999 Stock Option Plan and Standard Terms and Conditions for 1999
Stock Option Plan Incentive Stock Options.***                                                                                     
|        |  |                                                                                                                                                                                                     
|10.12   |  | Employee Stock Purchase Plan dated June 23, 2000.**                                                                                                                                                
|        |  |                                                                                                                                                                                                     
|10.13   |  | 2001 Stock Option Plan. ##                                                                                                                                                                          
|        |  |                                                                                                                                                                                                     
|10.14   |  | 2002 Non-Executive Stock Incentive
Plan.ä                                                                                                                                                           
|        |  |                                                                                                                                                                                                     
|10.15   |  | 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. * #
|        |  |                                                                                                                                                                                                     
|10.16   |  | Agreement of Lease, dated June 25, 1998, between The Corporate Executive Board Company and The George Washington
University.*                                                                       
|        |  |                                                                                                                                                                                                     
|10.17   |  | License Agreement, effective as of October 31, 1997, between The Corporate Executive Board Company and The Advisory
Board Company.*                                                                 
|        |  |                                                                                                                                                                                                     
|10.18   |  | Letter agreement regarding the special bonus plan.*                                                                                                                                                
|        |  |                                                                                                                                                                                                     
|10.19   |  | Amended and Restated Liquid Markets Agreement, dated August 20, 1997, between The Corporate Executive Board Company
and Derek C. van Bever, as amended on December 28, 1998.*                   
|        |  |                                                                                                                                                                                                     
|10.20   |  | Form of term sheet for director non-qualified stock options.###                                                                                                                                     
|        |  |                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                     

52



---



##### 



|        |  |                                                                                                                                  
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                  
|No.     |  | Description of Exhibit                                                                                                           
|        |  |                                                                                                                                  
|10.21   |  | Loan Agreement by and between Bank of America, N.A. and the Corporate
Executive Board Company dated May 25, 2000.@               
|        |  |                                                                                                                                  
|10.22   |  | Employment Agreement, dated March 20, 2002, between The Corporate Executive
Board Company and Michael A. Archer.±               
|        |  |                                                                                                                                  
|14.1    |  | Code of Ethics For Senior Financial Officers                                                                                     
|        |  |                                                                                                                                  
|21.1    |  | List of the Subsidiaries of The Corporate Executive Board Company.                                                               
|        |  |                                                                                                                                  
|23.1    |  | Consent of Ernst and Young LLP.                                                                                                  
|        |  |                                                                                                                                  
|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 10.2 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended June 30, 2000.                         
|    |  |                                                                                                                                                                                                                  
|#   |  | Amendments incorporated by reference to Exhibit 10.1 and 10.2 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2001.
|    |  |                                                                                                                                                                                                                  
|##  |  | Incorporated by reference to Exhibit 10.1 to the registrants registration statement on Form S-8 filed with the Securities and Exchange
Commission on August 10, 2001 (Registration No. 333-67238).              
|    |  |                                                                                                                                                                                                                  
|### |  | Incorporated by reference to Exhibit 10.43 from the Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934 for the year ended December 31, 2001.                                  
|    |  |                                                                                                                                                                                                                  
|   |  | Compensation arrangement.                                                                                                                                                                                        
|    |  |                                                                                                                                                                                                                  
|±   |  | Incorporated by reference to Exhibit 10.1 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended September 30, 2002.                    
|    |  |                                                                                                                                                                                                                  
|ä   |  | Incorporated by reference to Exhibit 10.21.3 from the Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended December 31, 2002.                                 

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Reports on Form 8-K: 

On October 23, 2003, The Corporate Executive Board Company filed a report on Form 8-K relating its financial results for the third
quarter of 2003 and furnished the press release dated October 22, 2003 entitled  The Corporate Executive Board Reports Third
Quarter Pro Forma Earnings of $0.29 Per Diluted Share relating
to its third quarter 2003. 

On October 31, 2003, The Corporate Executive Board Company filed a report on Form 8-K announcing the appointment of Daniel O. Leemon
to the Board of Directors and filed the press release dated October 30, 2003 entitled The Corporate Executive Board Names Daniel O.
Leemon to Board of Directors.
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(c) |  | Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this annual
report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) |  | Financial statements schedules: The financial statement schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are either not required under the related instructions or are inapplicable,
and therefore have been omitted, except for Schedule IIValuation and Qualifying Accounts which is provided below.                                                                                                                                                                                                                                                                                                              

53



---



##### 



REPORT OF INDEPENDENT AUDITORS

We have audited the consolidated financial
statements of The Corporate Executive Board Company as of December 31, 2002 and 2003, and
for the years then ended and have issued our report thereon dated
February 2, 2004, except for Note 7, as to which the date is
February 27, 2004.
Our audits also
included the financial statement schedule listed in Item 15 of this Form 10-K.
This schedule is the responsibility of the Companys management. Our
responsibility is to express an opinion based on our audits. The financial
statements of The Corporate Executive Board Company and the financial statement
schedule referred to above for the year ended December 31, 2001, were audited
by other auditors who have ceased operations and whose report dated January 31,
2002 expressed an unqualified opinion.

In our opinion, the 2002 and 2003 financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

/s/ Ernst & Young

Baltimore, Maryland
February 2, 2004, except for Note 7, as to which the date is 
February 27, 2004

54



---



##### 



The following report is a copy of a report previously issued by Andersen,
which report has not been reissued by Andersen.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of The Corporate Executive Board Company:

We have audited in accordance with auditing standards generally accepted
in the United States, the financial statements of The Corporate Executive Board
Company included in this Form 10-K and have issued our report thereon dated
January 31, 2002. Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The Schedule IIValuation and
Qualifying Accounts is the responsibility of the Companys management and is
presented for purposes of complying with the Securities and Exchange
Commissions rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

/s/ Arthur Andersen LLP

Washington, D.C.
January 31, 2002

55



---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY

Schedule IIValuation and Qualifying Accounts
(In thousands)

|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|---------------------------- | --------------------------------- | - | ---------- | ----- | ---------- | - | ---------- | ----- | ---------- | - | ----------- | - |  | - | ----- | ----- |  | - | ----- | ----- | 
|                             |                                   |   |            |       |            |   |            |       |            |   | Additions   |   |  |   |       |       |  |   |      
|                             |                                   |   | Balance at |       | Additions  |   | Charged to |       | Deductions |   |             |   | 
|                             |                                   |   | Beginning  |       | Charged to |   | Other      |       | from       |   | Balance at 
|                             |                                   |   | of Year    |       | Revenue    |   | Accounts   |       | Reserve    |   | End of Year
|                             |                                   |   |            |       |            |   |            |       |            |   |            
|Year ended December 31, 2001 |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |      
|                             | Reserve for uncollectible revenue |   | $          | 1,628 |            |   | $          | 4,725 |            |   | $           |  |  |   | $     | 4,420 |  |   | $     | 1,933 | 
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|                             |                                   | $ | 1,628      |       |            | $ | 4,725      |       |            | $ |            |   |  | $ | 4,420 |       |  | $ | 1,933 |      
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|Year ended December 31, 2002 |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |      
|                             | Reserve for uncollectible revenue |   | $          | 1,933 |            |   | $          | 3,798 |            |   | $           |  |  |   | $     | 2,931 |  |   | $     | 2,800 | 
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|                             |                                   | $ | 1,933      |       |            | $ | 3,798      |       |            | $ |            |   |  | $ | 2,931 |       |  | $ | 2,800 |      
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|Year ended December 31, 2003 |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |      
|                             | Reserve for uncollectible revenue |   | $          | 2,800 |            |   | $          | 4,957 |            |   | $           |  |  |   | $     | 4,882 |  |   | $     | 2,875 | 
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 
|                             |                                   | $ | 2,800      |       |            | $ | 4,957      |       |            | $ |            |   |  | $ | 4,882 |       |  | $ | 2,875 |      
|                             |                                   |   |            |       |            |   |            |       |            |   |             |   |  |   |       |       |  |   |       |       | 

56



---



##### 



Signatures

Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized dated as of
March 2, 2004.

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

Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below on March 2, 2004 by the following persons on behalf
of the registrant and in the capacity indicated.

|                                                |  |                                                                                          
|----------------------------------------------- |  | -----------------------------------------------------------------------------------------
|Signature                                       |  | Title                                                                                    
|                                                |  |                                                                                          
|/s/ James J. McGonigle
James J. McGonigle       |  | Chief Executive Officer and Director, Chairman of
the Board (Principal Executive Officer)
|                                                |  |                                                                                          
|/s/ Timothy R. Yost
Timothy R. Yost             |  | Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer)   
|                                                |  |                                                                                          
|/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                                                                                 
|                                                |  |                                                                                          
|/s/ Thomas L. Monahan III
Thomas L. Monahan III |  | Director                                                                                 
|                                                |  |                                                                                          
|/s/ Harold L. Siebert
Harold L. Siebert         |  | Director                                                                                 

57



---



##### 



EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                           
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                           
|No.     |  | Description of Exhibit                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                           
|3.1     |  | 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    |  | Stock Option Agreement Pursuant to The Corporate Executive Board Company
Stock-Based Incentive Compensation Plan, effective as of April 15, 1998,
between The Corporate Executive Board Company and Harold L. Siebert.*                                  
|        |  |                                                                                                                                                                                                                                                           
|10.4    |  | Stock Option Agreement Pursuant to The Corporate Executive Board Company
Stock-Based Incentive Compensation Plan, effective as of October 31, 1997,
between The Corporate Executive Board Company and Derek C. van Bever, as
amended on July 21, 1998.*  
|        |  |                                                                                                                                                                                                                                                           
|10.5    |  | Form of Stock Option Agreement Pursuant to The Corporate Advisory Board
Company Stock-Based Incentive Compensation Plan, including form of
amendment.*                                                                                                    
|        |  |                                                                                                                                                                                                                                                           
|10.6    |  | 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.*             
|        |  |                                                                                                                                                                                                                                                           
|10.7    |  | Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work Product, effective
as of April 15, 1998, between The Corporate Executive Board Company and
Harold L. Siebert.*      
|        |  |                                                                                                                                                                                                                                                           
|10.8    |  | Form of Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work Product.*                                                                                                   
|        |  |                                                                                                                                                                                                                                                           
|10.9    |  | The Corporate Executive Board Company Stock-Based Incentive Compensation
Plan, adopted on October 31, 1997, as amended and restated in
February 1999.***                                                                                                  
|        |  |                                                                                                                                                                                                                                                           
|10.10   |  | Amended Directors Stock Plan and Standard Terms and Conditions for Director
Non-qualified Stock Options.***                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                           
|10.11   |  | 1999 Stock Option Plan and Standard Terms and Conditions for 1999
Stock Option Plan Incentive Stock Options.***                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                           
|10.12   |  | Employee Stock Purchase Plan dated June 23, 2000.**                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                           
|10.13   |  | 2001 Stock Option Plan. ##                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                           
|10.14   |  | 2002 Non-Executive Stock Incentive
Plan.ä                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                           
|10.15   |  | 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. * #                                                      
|        |  |                                                                                                                                                                                                                                                           
|10.16   |  | Agreement of Lease, dated June 25, 1998, between The Corporate Executive Board Company and The George Washington
University.*                                                                                                                             
|        |  |                                                                                                                                                                                                                                                           
|10.17   |  | License Agreement, effective as of October 31, 1997, between The Corporate Executive Board Company and The Advisory
Board Company.*                                                                                                                       
|        |  |                                                                                                                                                                                                                                                           
|10.18   |  | Letter agreement regarding the special bonus plan.*                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                           
|10.19   |  | Amended and Restated Liquid Markets Agreement, dated August 20, 1997, between The Corporate Executive Board Company
and Derek C. van Bever, as amended on December 28, 1998.*                                                                         
|        |  |                                                                                                                                                                                                                                                           
|10.20   |  | Form of term sheet for director non-qualified stock options.###                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                           
|10.21   |  | Loan Agreement by and between Bank of America, N.A. and the Corporate
Executive Board Company dated May 25, 2000.@                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                           
|10.22   |  | Employment Agreement, dated March 20, 2002, between The Corporate Executive
Board Company and Michael A. Archer.±                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                           
|14.1    |  | Code of Ethics For Senior Financial Officers.                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                           
|21.1    |  | List of the Subsidiaries of The Corporate Executive Board Company.                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                           
|23.1    |  | Consent of Ernst and Young LLP.                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                           
|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 10.2 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended June 30, 2000.                         
| |     |  |                                                                                                                                                                                                                  
| | #   |  | Amendments incorporated by reference to Exhibit 10.1 and 10.2 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2001.
| |     |  |                                                                                                                                                                                                                  
| | ##  |  | Incorporated by reference to Exhibit 10.1 to the registrants registration statement on Form S-8 filed with the Securities and Exchange
Commission on August 10, 2001 (Registration No. 333-67238).              
| |     |  |                                                                                                                                                                                                                  
| | ### |  | Incorporated by reference to Exhibit 10.43 from the Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934 for the year ended December 31, 2001.                                  
| |     |  |                                                                                                                                                                                                                  
| |    |  | Compensation arrangement.                                                                                                                                                                                        
| |     |  |                                                                                                                                                                                                                  
| | ±   |  | Incorporated by reference to Exhibit 10.1 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the quarterly period ended September 30, 2002.                    
| |     |  |                                                                                                                                                                                                                  
| | ä   |  | Incorporated by reference to Exhibit 10.21.3 from the Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended December 31, 2002.                                 

58