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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the quarterly period ended March 31, 2007
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
    
    52-2056410(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 2000 Pennsylvania Avenue, NWSuite 6000Washington, D.C.
    
    20006(Address of principal executive offices)
    
    (Zip Code)
 (202) 777-5000
 Not applicable.
 þ o
  þ o 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, 2007 and December 31, 2006
3Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2007 and 2006
4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006
5Notes to Condensed Consolidated Financial Statements
6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
10Item 3. Quantitative and Qualitative Disclosures about Market Risk
14Item 4. Controls and Procedures
14PART II. OTHER INFORMATIONItem 1. Legal Proceedings
15Item 1A. Risk Factors
15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
15Item 3. Defaults Upon Senior Securities
15Item 4. Submission of Matters to a Vote of Security Holders
15Item 5. Other Information
15Item 6. Exhibits
16
 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 31,2007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    111,613
    
    
    $
    171,367Marketable securities
    
    
    219,242
    
    
    
    119,534Membership fees receivable, net
    
    
    84,094
    
    
    
    153,107Deferred income taxes, net
    
    
    16,762
    
    
    
    15,109Deferred incentive compensation
    
    
    12,048
    
    
    
    13,160Prepaid expenses and other current assets
    
    
    10,901
    
    
    
    9,881Total current assets
    
    
    454,660
    
    
    
    482,158Deferred income taxes, net
    
    
    12,896
    
    
    
    12,896Marketable securities
    
    
    97,739
    
    
    
    196,386Goodwill and other intangibles
    
    
    7,662
    
    
    
    7,826Other non-current assets
    
    
    11,084
    
    
    
    9,801Property and equipment, net
    
    
    29,356
    
    
    
    26,988Total assets
    
    $
    613,397
    
    
    $
    736,055Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    46,184
    
    
    $
    66,773Accrued incentive compensation
    
    
    27,604
    
    
    
    25,062Deferred revenues
    
    
    315,175
    
    
    
    308,671Total current liabilities
    
    
    388,963
    
    
    
    400,506Other liabilities
    
    
    19,717
    
    
    
    17,684Total liabilities
    
    
    408,680
    
    
    
    418,190Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized, 42,877,607 and 42,805,325 shares issued, and
37,401,694 and 38,947,908 shares outstanding at March
31, 2007 and December 31, 2006, respectively
    
    
    428
    
    
    
    428Additional paid-in capital
    
    
    362,018
    
    
    
    353,990Retained earnings
    
    
    250,994
    
    
    
    246,668Accumulated elements of other comprehensive income (loss)
    
    
    459
    
    
    
    (440
    )Treasury stock, at cost, 5,475,913 and 3,857,417 shares
at March 31, 2007 and December 31, 2006, respectively
    
    
    (409,182
    )
    
    
    (282,781
    )Total stockholders equity
    
    
    204,717
    
    
    
    317,865Total liabilities and stockholders equity
    
    $
    613,397
    
    
    $
    736,055
  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 31,2007
    
    
    2006Revenues
    
    $
    124,525
    
    
    $
    105,069Cost of services
    
    
    44,676
    
    
    
    37,460Gross profit
    
    
    79,849
    
    
    
    67,609Costs and expenses:Member relations and marketing
    
    
    34,246
    
    
    
    28,850General and administrative
    
    
    17,117
    
    
    
    15,027Depreciation and amortization
    
    
    2,906
    
    
    
    1,997Total costs and expenses
    
    
    54,269
    
    
    
    45,874Income from operations
    
    
    25,580
    
    
    
    21,735Other income, net
    
    
    5,915
    
    
    
    6,100Income before provision for income taxes
    
    
    31,495
    
    
    
    27,835Provision for income taxes
    
    
    12,125
    
    
    
    10,716Net income
    
    $
    19,370
    
    
    $
    17,119Earnings per share:Basic
    
    $
    0.50
    
    
    $
    0.43Diluted
    
    $
    0.50
    
    
    $
    0.42Dividends per share
    
    $
    0.40
    
    
    $
    0.30Weighted average shares used in the calculation of
earnings per share:Basic
    
    
    38,412
    
    
    
    39,579Diluted
    
    
    39,117
    
    
    
    41,065
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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three months endedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    19,370
    
    
    $
    17,119Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    2,906
    
    
    
    2,023Deferred income taxes
    
    
    (1,097
    )
    
    
    10,716Share-based compensation
    
    
    6,578
    
    
    
    6,535Excess tax benefits from share-based compensation arrangements
    
    
    (733
    )
    
    
    (12,797
    )Amortization of marketable securities discounts, net
    
    
    (431
    )
    
    
    (216
    )Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    69,013
    
    
    
    46,065Deferred incentive compensation
    
    
    1,112
    
    
    
    672Prepaid expenses and other current assets
    
    
    (377
    )
    
    
    1,722Other non-current assets
    
    
    (1,283
    )
    
    
    (617
    )Accounts payable and accrued liabilities
    
    
    (21,970
    )
    
    
    (14,562
    )Accrued incentive compensation
    
    
    2,542
    
    
    
    (14,186
    )Deferred revenues
    
    
    6,504
    
    
    
    5,610Other liabilities
    
    
    2,033
    
    
    
    2,112Net cash flows provided by operating activities
    
    
    84,167
    
    
    
    50,196Cash flows from investing activities:Purchases of property and equipment
    
    
    (3,726
    )
    
    
    (4,945
    )Purchases of marketable securities, net
    
    
    (201
    )
    
    
    (194,920
    )Net cash flows used in investing activities
    
    
    (3,927
    )
    
    
    (199,865
    )Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    158
    
    
    
    1,555Proceeds from the issuance of common stock under the employee stock purchase plan
    
    
    559
    
    
    
    416Excess tax benefits from share-based compensation arrangements
    
    
    733
    
    
    
    12,797Purchase of treasury shares
    
    
    (126,401
    )
    
    
    (38,960
    )Payment of dividends
    
    
    (15,043
    )
    
    
    (11,851
    )Reimbursement of common stock offering costs
    
    
    
    
    
    
    70Net cash flows used in financing activities
    
    
    (139,994
    )
    
    
    (35,973
    )Net decrease in cash and cash equivalents
    
    
    (59,754
    )
    
    
    (185,642
    )Cash and cash equivalents, beginning of period
    
    
    171,367
    
    
    
    424,276Cash and cash equivalents, end of period
    
    $
    111,613
    
    
    $
    238,634
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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
 Form 10-K.
  Note 3. Recent accounting pronouncements
    6




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Note 4. Stockholders equity
 Share-based compensation
  Three months ended March 31,2007
    
    
    2006Cost of services
    
    $
    3,276
    
    
    $
    3,086Member relations and marketing
    
    
    1,331
    
    
    
    1,507General and administrative
    
    
    1,971
    
    
    
    1,9426,578
    
    
    
    6,535Income tax benefit
    
    
    (2,533
    )
    
    
    (2,516
    )Total share-based compensation, net of tax benefit
    
    $
    4,045
    
    
    $
    4,019
     Share Repurchases
  Dividends
  Note 5. Income taxes
  7




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Note 6. Sale of common stock
    Note 7. Earnings per share
  Three months ended March 31,2007
    
    2006Basic weighted average common shares outstanding
    
    
    38,412
    
    
    
    39,579Effect of dilutive common shares outstanding
    
    
    705
    
    
    
    1,486Diluted weighted average common shares outstanding
    
    
    39,117
    
    
    
    41,065
 Note 8. Comprehensive income
  8




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Note 9. Commitments and contingencies
    Note 10. Collaboration agreement
  Note 11. Subsequent events
  9




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Business Overview
      10




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Critical Accounting Policies
  Results of Operations
  Three months ended March 31,2007
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    35.9
    
    
    
    35.7Gross profit
    
    
    64.1
    
    
    
    64.3Costs and expenses:Member relations and marketing
    
    
    27.5
    
    
    
    27.5General and administrative
    
    
    13.7
    
    
    
    14.3Depreciation and amortization
    
    
    2.3
    
    
    
    1.9Total costs and expenses
    
    
    43.6
    
    
    
    43.7Income from operations
    
    
    20.5
    
    
    
    20.7Other income, net
    
    
    4.8
    
    
    
    5.8Income before provision for income taxes
    
    
    25.3
    
    
    
    26.5Provision for income taxes
    
    
    9.7
    
    
    
    10.2Net income
    
    
    15.6
    %
    
    
    16.3
    %
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Three Months Ended March 31, 2007 and 2006
 Revenues.
 Cost of services.
 Gross profit.
 Member relations and marketing.
 General and administrative.
 Depreciation and amortization.
 12




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Other income, net.
 Provision for income taxes.
 Liquidity and Capital Resources
  Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
  13




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Contractual obligations
  Off-Balance Sheet Arrangements
  Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
  Foreign currency exchange rate risk
  Item 4. Controls and Procedures.
  14




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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, 2007 to January 31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    42,217,779February 1, 2007 to February 28, 2007
    
    
    752,800
    
    
    $
    79.45
    
    
    
    752,800
    
    
    $
    182,407,906March 1,
2007 to March 31, 2007(1)
    
    
    865,696
    
    
    $
    76.92
    
    
    
    865,696
    
    
    $
    115,817,251Total
    
    
    1,618,496
    
    
    $
    78.10
    
    
    
    1,618,496
 
   Item 3. Defaults Upon Senior Securities.
  Item 4. Submission of Matters to a Vote of Security Holders.
  Item 5. Other Information.
  15




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Item 6. Exhibits.
  Exhibit No.
    
    Description10.24
    
    2007 Chief Executive Officer Incentive Plan10.25
    
    Executive Committee Incentive Plan10.26
    
    Collaboration Agreement with The Advisory Board Company (Confidential treatment has been requested for portions of this agreement.)10.27
    
    Severance Agreement, dated July 30, 2004, between The Corporate Executive Board and Glenn Tobin10.28
    
    Form of Employer Protection Agreement10.29
    
    Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan31.1
    
    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
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SIGNATURES
  THE CORPORATE EXECUTIVE BOARD COMPANY
                                   (Registrant)Date: May 10, 2007
    By:
    /s/ Timothy R. YostTimothy R. YostChief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer) 17




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Exhibit Index
 Exhibit No.
    
    Description10.24
    
    2007 Chief Executive Officer Incentive Plan Summary10.25
    
    Executive Committee Incentive Plan Summary10.26
    
    Collaboration Agreement with The Advisory Board Company (Confidential treatment has been requested for portions of this agreement.)10.27
    
    Severance Agreement, dated July 30, 2004, between The Corporate Executive Board and Glenn Tobin10.28
    
    Form of Employer Protection Agreement10.29
    
    Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan31.1
    
    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