UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    52-2056410
(I.R.S. Employer
Identification Number)1919 North Lynn Street 
Arlington, Virginia
(Address of principal executive offices)
    
    22209
(Zip Code)
 (571) 303-3000
 Not applicable
 þ o
 o o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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THE CORPORATE EXECUTIVE BOARD COMPANY
INDEX TO FORM 10-Q
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets at March 31, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    17Item 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    18
 2




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PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements.
 THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    56,241
    
    
    $
    16,214Marketable securities
    
    
    14,163
    
    
    
    13,545Membership fees receivable, net
    
    
    76,639
    
    
    
    127,007Deferred income taxes, net
    
    
    12,816
    
    
    
    12,459Deferred incentive compensation
    
    
    11,782
    
    
    
    12,621Prepaid expenses and other current assets
    
    
    9,595
    
    
    
    9,140Total current assets
    
    
    181,236
    
    
    
    190,986Deferred income taxes, net
    
    
    41,427
    
    
    
    41,427Marketable securities
    
    
    32,941
    
    
    
    46,344Property and equipment, net
    
    
    106,065
    
    
    
    109,133Goodwill
    
    
    26,511
    
    
    
    26,392Intangible assets, net
    
    
    15,906
    
    
    
    17,266Other non-current assets
    
    
    14,305
    
    
    
    14,644Total assets
    
    $
    418,391
    
    
    $
    446,192Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    42,951
    
    
    $
    66,178Accrued incentive compensation
    
    
    27,677
    
    
    
    25,145Deferred revenues
    
    
    257,082
    
    
    
    264,253Total current liabilities
    
    
    327,710
    
    
    
    355,576Other liabilities
    
    
    65,003
    
    
    
    68,007Total liabilities
    
    
    392,713
    
    
    
    423,583Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized, 43,247,094 and 43,205,367 shares
issued, and 34,083,214 and 34,043,752 shares
outstanding at March 31, 2009 and December 31,
2008, respectively
    
    
    432
    
    
    
    432Additional paid-in capital
    
    
    399,570
    
    
    
    395,434Retained earnings
    
    
    252,390
    
    
    
    254,285Accumulated elements of other comprehensive income
    
    
    924
    
    
    
    55Treasury stock, at cost, 9,163,880 and 9,161,615
shares at March 31, 2009 and December 31, 2008,
respectively
    
    
    (627,638
    )
    
    
    (627,597
    )Total stockholders equity
    
    
    25,678
    
    
    
    22,609Total liabilities and stockholders equity
    
    $
    418,391
    
    
    $
    446,192
  3




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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three months endedMarch 31,2009
    
    
    2008Revenues
    
    $
    117,440
    
    
    $
    138,023Costs and expenses:Cost of services
    
    
    38,277
    
    
    
    46,093Member relations and marketing
    
    
    34,810
    
    
    
    42,340General and administrative
    
    
    15,736
    
    
    
    20,009Depreciation and amortization
    
    
    5,973
    
    
    
    5,562Restructuring costs
    
    
    944
    
    
    
    Total costs and expenses
    
    
    95,740
    
    
    
    114,004Income from operations
    
    
    21,700
    
    
    
    24,019Other income, net
    
    
    90
    
    
    
    698Income before provision for income taxes
    
    
    21,790
    
    
    
    24,717Provision for income taxes
    
    
    8,718
    
    
    
    9,887Net income
    
    $
    13,072
    
    
    $
    14,830Earnings per share:Basic
    
    $
    0.38
    
    
    $
    0.43Diluted
    
    $
    0.38
    
    
    $
    0.42Dividends per share
    
    $
    0.44
    
    
    $
    0.44Weighted average shares used in the calculation of earnings per share:Basic
    
    
    34,050
    
    
    
    34,728Diluted
    
    
    34,088
    
    
    
    34,962
  4




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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three months endedMarch 31,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    13,072
    
    
    $
    14,830Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    5,973
    
    
    
    5,562Deferred income taxes
    
    
    (965
    )
    
    
    (491
    )Share-based compensation
    
    
    3,868
    
    
    
    2,583Amortization of marketable securities premiums, net
    
    
    164
    
    
    
    188Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    50,368
    
    
    
    49,487Deferred incentive compensation
    
    
    839
    
    
    
    1,713Prepaid expenses and other current assets
    
    
    (455
    )
    
    
    1,269Other non-current assets
    
    
    339
    
    
    
    831Accounts payable and accrued liabilities
    
    
    (21,930
    )
    
    
    (8,850
    )Accrued incentive compensation
    
    
    2,532
    
    
    
    751Deferred revenues
    
    
    (7,171
    )
    
    
    12,127Other liabilities
    
    
    (3,004
    )
    
    
    3,929Net cash flows provided by operating activities
    
    
    43,630
    
    
    
    83,929Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (1,545
    )
    
    
    (24,702
    )Acquisition of businesses
    
    
    (119
    )
    
    
    Maturities of marketable securities
    
    
    12,805
    
    
    
    815Net cash flows provided by (used in) investing activities
    
    
    11,141
    
    
    
    (23,887
    )Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    
    
    
    
    100Proceeds from the issuance of common stock under the employee stock purchase plan
    
    
    266
    
    
    
    403Purchase of treasury shares
    
    
    (41
    )
    
    
    (37,614
    )Payment of dividends
    
    
    (14,969
    )
    
    
    (15,046
    )Net cash flows used in financing activities
    
    
    (14,744
    )
    
    
    (52,157
    )Net increase in cash and cash equivalents
    
    
    40,027
    
    
    
    7,885Cash and cash equivalents, beginning of period
    
    
    16,214
    
    
    
    47,585Cash and cash equivalents, end of period
    
    $
    56,241
    
    
    $
    55,470
  5




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THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
  Note 2. Condensed consolidated financial statements
   Note 3. Recent accounting pronouncements
 Recently adopted
 Fair Value Measurements
 Business Combinations
 Disclosures about
Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
 6




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Note 4. Fair value measurements
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Observable inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar
assets and liabilities in markets that are not active, or other inputs that are observable or can
be corroborated by observable market data.
    
    Level 3  Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities. This includes certain pricing
models, discounted cash flow methodologies and similar techniques that use significant unobservable
inputs.
  Fair Valueas ofMarch 31,
    
    Fair Value Measurements at Reporting Date Using2009
    
    Level 1
    
    Level 2
    
    Level 3Financial assetsCash and cash equivalents
    
    $
    56,241
    
    
    $
    56,241
    
    
    $
    
    
    
    $
    Available-for-sale marketable securities
    
    
    47,104
    
    
    
    47,104
    
    
    
    
    
    
    
    Variable insurance products held in a Rabbi Trust
    
    
    10,501
    
    
    
    
    
    
    
    10,501
    
    
    
    Financial liabilitiesForward currency contracts
    
    $
    1,631
    
    
    $
    
    
    
    $
    1,631
    
    
    $
    
 Non-financial assets and liabilities
  Note 5. Other liabilities
  March 31,
    
    
    December 31,2009
    
    
    2008Deferred compensation
    
    $
    4,998
    
    
    $
    7,256Lease incentives
    
    
    35,065
    
    
    
    35,558Deferred rent benefit  long term
    
    
    16,982
    
    
    
    17,148Other
    
    
    7,958
    
    
    
    8,045Total other liabilities
    
    $
    65,003
    
    
    $
    68,007
 7




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Note 6. Stockholders equity and share-based compensation
 Share-based compensation
  Share-Based Payment
 Share repurchases
  Dividends
   Note 7. Derivative instruments and hedging activities
   8




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LiabilityBalance Sheet Location
    
    March 31, 2009
    
    December 31, 2008Accounts payable and accrued liabilities
    
    $
    1,631
    
    
    $
    4,057
  Location of Loss
    
    Amount of LossAmount of Gain
    
    
    Reclassified from
    
    Reclassified from
    
    
    Amount of Gain or (Loss)Recognized in OCI
    
    
    Accumulated OCI into
    
    Accumulated OCI
    
    
    Recognized in Income onDerivatives in FAS No. 133 cash flow
    
    
    on Derivative
    
    
    Income (Effective
    
    into Income (Effective
    
    
    Derivativehedging relationships
    
    
    (Effective portion)
    
    
    portion)
    
    portion)
    
    
    (Ineffective portion)Forward currency contracts:
    
    $
    68
    
    
    Cost of services
    
    $
    (593
    )
    
    $
    Member relations
and marketing
    
    
    (537
    )
    
    
    General &
Administrative
    
    
    (248
    )
    
    
    $
    (1,378
    )
    
    $
    
 Note 8. Restructuring costs
  Employers Accounting for Postemployment Benefits
 Balance at December 31, 2008
    
    $
    7,607Costs incurred
    
    
    944Cash payments
    
    
    (3,062
    )Balance at March 31, 2009
    
    $
    5,489
  Note 9. Income taxes
  Note 10. Earnings per share
  9




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Three months ended March 31,2009
    
    2008Basic weighted average common shares outstanding
    
    
    34,050
    
    
    
    34,728Effect of dilutive common shares outstanding
    
    
    38
    
    
    
    234Diluted weighted average common shares outstanding
    
    
    34,088
    
    
    
    34,962
  Note 11. Comprehensive income
  Three months ended March 31,2009
    
    2008Net income
    
    $
    13,072
    
    
    $
    14,830Change in unrealized gains, net of tax, for available-for-sale marketable securities
    
    
    110
    
    
    
    664Change in
unrealized loss, net of tax, for forward currency exchange contracts
    
    
    762
    
    
    
    46Total comprehensive income
    
    $
    13,944
    
    
    $
    15,540
  Note 12. Commitments and contingencies
 Operating leases
  Other
   10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Executive Overview
     General
   
    
    Cost of services, which represents the costs associated with the production and
delivery of our products and services, consisting of compensation, including share-based
compensation, for research personnel and in-house faculty; the production of published
materials; the organization of executive education seminars; and associated support
services.
    
    Member relations and marketing, which represents the costs of acquiring new members
and the costs of maintaining and renewing existing members,
consisting of compensation, including sales commissions and share-based compensation, travel and associated support
services.
 11




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
    
    General and administrative, consisting of compensation, including share-based
compensation, and other costs associated with human resources and recruiting, finance and
accounting, legal, management information systems, facilities management, new product
development and other administrative functions.
    
    Depreciation and amortization, consisting of depreciation of our property and
equipment, including leasehold improvements, furniture, fixtures and equipment,
capitalized software and Web site development costs and the amortization of intangible
assets.
  Critical Accounting Policies
  Recent Accounting Pronouncements
  Results of Operations
  Three months ended March 31,2009
    
    
    2008Revenues
    
    
    100.0
    %
    
    
    100.0
    %Costs and expenses:Cost of services
    
    
    32.6
    
    
    
    33.4Member relations and marketing
    
    
    29.6
    
    
    
    30.7General and administrative
    
    
    13.4
    
    
    
    14.5Depreciation and amortization
    
    
    5.1
    
    
    
    4.0Restructuring costs
    
    
    0.8
    
    
    
    Total costs and expenses
    
    
    81.5
    
    
    
    82.6Income from operations
    
    
    18.5
    
    
    
    17.4Other income, net
    
    
    0.1
    
    
    
    0.5Income before provision for income taxes
    
    
    18.6
    
    
    
    17.9Provision for income taxes
    
    
    7.4
    
    
    
    7.2Net income
    
    
    11.1
    %
    
    
    10.7
    %
 Three Months Ended March 31, 2009 and 2008
 Contract Value
  12




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Revenues
  Costs and expenses
      Cost of services
    13




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Member relations and marketing
   General and administrative
   Depreciation and amortization
   Restructuring costs
  Other income, net
   Provision for income taxes
  14




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Liquidity and Capital Resources
  Cash flows from operating activities
    Cash flows from investing activities
    Cash flows from financing activities
   Commitments and contingencies
   15




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Contractual obligations
  Off-Balance Sheet Arrangements
  Forward-looking statements
   Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  16




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Changes in Internal Control over Financial Reporting
  PART II. OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 1A. Risk Factors.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
 Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of a
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plan
    
    
    Under the PlansJanuary 1, 2009 to January 31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    22,403,003February 1, 2009 to February 28, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    22,403,003March 1, 2009 to March 31, 2009 (1)
    
    
    2,265
    
    
    $
    17.95
    
    
    
    2,265
    
    
    $
    22,362,341Total
    
    
    2,265
    
    
    $
    17.95
    
    
    
    2,265
 
 (1)
    
    Amounts include the effect of employees using common stock received from the exercise
of share-based awards to satisfy the statutory minimum federal and state withholding
requirements generated from the exercise of such awards. In effect, the Company
repurchased, at fair market value, a portion of the common stock received by employees upon
exercise of their awards.  Item 3. Defaults Upon Senior Securities.
  Item 4. Submission of Matters to a Vote of Security Holders.
  Item 5. Other Information.
  17




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Item 6. Exhibits.
  Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 18




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SIGNATURES
  THE CORPORATE EXECUTIVE BOARD COMPANY
(Registrant)Date: May 11, 2009
    By:
    /s/ Chao LiuChao LiuChief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer) 19




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Exhibit Index
 Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 20