##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)

|    |  |                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|[X] |  | Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 2001.

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

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

Not applicable.
(Former name, former address and former fiscal year, if changed, since last report.)

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 [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

As of November 9, 2001, we had outstanding
34,814,740 shares of Common Stock, par
value $0.01 per share and had outstanding no shares of Preferred Stock, par
value $0.01 per share.





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TABLE OF CONTENTS



|                                  |                                                                                                |  |  |  |  |  |  | 
|--------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION    
|                                  | ITEM 1. Financial Statements                                                                  
|                                  | ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                  | ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|PART II. OTHER INFORMATION       
|                                  | ITEM 1. Legal Proceedings.                                                                    
|                                  | ITEM 2. Change in Securities.                                                                 
|                                  | ITEM 3. Defaults Upon Senior Securities and Use of Proceeds.                                  
|                                  | ITEM 4. Submission of Matters to a Vote of Security Holders.                                  
|                                  | ITEM 5. Other Information.                                                                    
|                                  | ITEM 6. Exhibits and Reports on Form 8-K.                                                     
|SIGNATURES                       
|INDEX TO EXHIBITS                
|EX-10.1 Non-Competition Agreement
|EX-10.2 Non-Competition Agreement



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##### Table of Contents



THE CORPORATE EXECUTIVE BOARD COMPANY
INDEX TO FORM 10-Q

---

| |  |                               |                                                                                                |                                                                                                |  |    |   | 
| |  | ----------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  | -- | - | 
| |  | PART
I. FINANCIAL INFORMATION |                                                                                                |                                                                                                |  |   
| |  |                               | ITEM
1. Financial Statements                                                                   |                                                                                                |  | 3  |  
| |  |                               |                                                                                                | Condensed Balance Sheets at September 30, 2001 and
December 31, 2000                           |  |    | 3 | 
| |  |                               |                                                                                                | Condensed Statements of Income for the Three
and Nine Months Ended September 30, 2001 and 2000 |  |    | 4 | 
| |  |                               |                                                                                                | Condensed Statements of Cash Flows for the Nine
Months Ended September 30, 2001 and 2000       |  |    | 5 | 
| |  |                               |                                                                                                | Notes to Condensed Financial Statements                                                        |  |    | 6 | 
| |  |                               | ITEM 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations. |                                                                                                |  | 8  |  
| |  |                               | ITEM 3. Quantitative and Qualitative Disclosures About
Market Risk.                            |                                                                                                |  | 12 |  
| |  | PART II. OTHER INFORMATION    |                                                                                                |                                                                                                |  |   
| |  |                               | ITEM 1. Legal Proceedings.                                                                     |                                                                                                |  | 13 |  
| |  |                               | ITEM 2. Changes in Securities.                                                                 |                                                                                                |  | 13 |  
| |  |                               | ITEM 3. Defaults Upon Senior Securities and Use of Proceeds.                                   |                                                                                                |  | 13 |  
| |  |                               | ITEM 4. Submission of Matters to a Vote of Security Holders.                                   |                                                                                                |  | 13 |  
| |  |                               | ITEM 5. Other Information.                                                                     |                                                                                                |  | 13 |  
| |  |                               | ITEM 6. Exhibits and Reports on Form 8-K.                                                      |                                                                                                |  | 13 |  

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##### Table of Contents









PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements

THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED BALANCE SHEETS
(In thousands, except share amounts)

|                                           |                                                                                                                                                                                       |                                      |         |        |                    |   |         |                   |         |  | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ------ | ------------------ | - | ------- | ----------------- | ------- |  | 
|                                           |                                                                                                                                                                                       |                                      |         |        | September 30, 2001 |   |         | December 31, 2000 |        
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |   |         |                   |        
|                                           |                                                                                                                                                                                       |                                      |         |        | (Unaudited)        |   |         |                   |         | 
|                                           |                                                                                                                                                                                       |                                      | Assets  |        |                    |   |         |                   |         |  | 
|Current assets:                            |                                                                                                                                                                                       |                                      |         |        |                    |   |         |                  
|                                           | Cash and cash equivalents                                                                                                                                                             |                                      | $       | 20,157 |                    |   | $       | 19,493            |        
|                                           | Marketable securities                                                                                                                                                                 |                                      |         | 36,766 |                    |   |         | 5,765             |        
|                                           | Membership fees receivable, net                                                                                                                                                       |                                      |         | 19,971 |                    |   |         | 29,519            |        
|                                           | Deferred income taxes, net                                                                                                                                                            |                                      |         | 15,518 |                    |   |         | 14,742            |        
|                                           | Deferred incentive compensation                                                                                                                                                       |                                      |         | 2,413  |                    |   |         | 2,827             |        
|                                           | Prepaid expenses and other current assets                                                                                                                                             |                                      |         | 3,592  |                    |   |         | 3,015             |        
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Total current assets                 |         |        | 98,417             |   |         |                   | 75,361  | 
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|Deferred income taxes, net                 |                                                                                                                                                                                       |                                      | 45,722  |        |                    |   | 16,606  |                  
|Marketable securities                      |                                                                                                                                                                                       |                                      | 51,193  |        |                    |   | 44,115  |                  
|Property and equipment, net                |                                                                                                                                                                                       |                                      | 17,301  |        |                    |   | 16,412  |                  
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Total assets                         |         | $      | 212,633            |   |         | $                 | 152,494 | 
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Liabilities and Stockholders Equity |         |        |                    |   |         |                   |         | 
|Current liabilities:                       |                                                                                                                                                                                       |                                      |         |        |                    |   |         |                  
|                                           | Accounts payable and accrued liabilities                                                                                                                                              |                                      | $       | 7,916  |                    |   | $       | 8,102             |        
|                                           | Accrued incentive compensation                                                                                                                                                        |                                      |         | 2,820  |                    |   |         | 3,013             |        
|                                           | Stock option repurchase liability                                                                                                                                                     |                                      |         |       |                    |   |         | 3,140             |        
|                                           | Deferred revenues                                                                                                                                                                     |                                      |         | 64,857 |                    |   |         | 71,281            |        
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Total current liabilities            |         |        | 75,593             |   |         |                   | 85,536  | 
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|Other liabilities                          |                                                                                                                                                                                       |                                      | 1,715   |        |                    |   | 1,397   |                  
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Total liabilities                    |         |        | 77,308             |   |         |                   | 86,933  | 
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|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 34,755,509 and 31,144,069 shares
issued and outstanding as of September 30, 2001 and
December 31, 2000, respectively |                                      |         | 348    |                    |   |         | 311               |        
|                                           | Additional paid-in capital                                                                                                                                                            |                                      |         | 91,570 |                    |   |         | 38,579            |        
|                                           | Deferred compensation                                                                                                                                                                 |                                      |         |       |                    |   |         | (186              | )      
|                                           | Retained earnings                                                                                                                                                                     |                                      |         | 41,916 |                    |   |         | 26,611            |        
|                                           | Accumulated elements of comprehensive income                                                                                                                                          |                                      |         | 1,491  |                    |   |         | 246               |        
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|                                           |                                                                                                                                                                                       | Total stockholders equity           |         |        | 135,325            |   |         |                   | 65,561  | 
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  
|Total liabilities and stockholders equity |                                                                                                                                                                                       | $                                    | 212,633 |        |                    | $ | 152,494 |                  
|                                           |                                                                                                                                                                                       |                                      |         |        |                    |  

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |        |  |   |        |        | 
|---------------------------------------------------------------------- | --------------------------------- | - | ------------------ | ------ |  | ----------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                       |                                   |   | Three months ended |        |  | Nine months ended |       
|                                                                       |                                   |   | September 30,      |        |  | September 30,     |       
|                                                                       |                                   |   | 2001               |        |  | 2000              |        |        | 2001 |   |        | 2000   | 
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |        | 
|Revenues                                                               |                                   | $ | 32,625             |        |  | $                 | 25,084 |        |      | $ | 92,964 |        |  | $ | 68,480 |       
|                                                                       | Cost of services                  |   |                    | 11,012 |  |                   |        | 9,049  |      |   |        | 33,164 |  |   |        | 25,898 | 
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Gross profit                                                           |                                   |   | 21,613             |        |  |                   | 16,035 |        |      |   | 59,800 |        |  |   | 42,582 |       
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Costs and expenses:                                                    |                                   |   |                    |        |  |                   |        |        |      |   |        |        |  |   |        |       
|                                                                       | Member relations and marketing    |   |                    | 7,915  |  |                   |        | 5,611  |      |   |        | 21,837 |  |   |        | 15,120 | 
|                                                                       | General and administrative        |   |                    | 4,215  |  |                   |        | 3,465  |      |   |        | 12,111 |  |   |        | 9,113  | 
|                                                                       | Depreciation                      |   |                    | 1,198  |  |                   |        | 742    |      |   |        | 3,121  |  |   |        | 1,657  | 
|                                                                       | Stock option and related expenses |   |                    |       |  |                   |        | 107    |      |   |        | 1,258  |  |   |        | 1,275  | 
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|                                                                       |                                   |   | 13,328             |        |  |                   | 9,925  |        |      |   | 38,327 |        |  |   | 27,165 |       
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Income from operations                                                 |                                   |   | 8,285              |        |  |                   | 6,110  |        |      |   | 21,473 |        |  |   | 15,417 |       
|Other income, net                                                      |                                   |   | 1,110              |        |  |                   | 595    |        |      |   | 3,212  |        |  |   | 1,630  |       
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Income before provision for income taxes                               |                                   |   | 9,395              |        |  |                   | 6,705  |        |      |   | 24,685 |        |  |   | 17,047 |       
|Provision for income taxes                                             |                                   |   | 3,570              |        |  |                   | 2,615  |        |      |   | 9,380  |        |  |   | 6,649  |       
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Net income                                                             |                                   | $ | 5,825              |        |  | $                 | 4,090  |        |      | $ | 15,305 |        |  | $ | 10,398 |       
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Earnings per share:                                                    |                                   |   |                    |        |  |                   |        |        |      |   |        |        |  |   |        |       
|                                                                       | Basic                             |   | $                  | 0.17   |  |                   | $      | 0.13   |      |   | $      | 0.45   |  |   | $      | 0.35   | 
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|                                                                       | Diluted                           |   | $                  | 0.16   |  |                   | $      | 0.12   |      |   | $      | 0.42   |  |   | $      | 0.30   | 
|                                                                       |                                   |   |                    |        |  |                   |        |        |      |   |        |       
|Weighted average shares used in the calculation of
earnings per share: |                                   |   |                    |        |  |                   |        |        |      |   |        |        |  |   |        |       
|                                                                       | Basic                             |   |                    | 34,750 |  |                   |        | 30,937 |      |   |        | 33,725 |  |   |        | 30,082 | 
|                                                                       | Diluted                           |   |                    | 36,908 |  |                   |        | 35,072 |      |   |        | 36,361 |  |   |        | 34,418 | 

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |         |       |         |        | 
|-------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----- | ------------------------------- | ------ | ------- | ----- | ------- | ------ | 
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       | Nine months ended September 30, |       
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       | 2001                            |        |         | 2000  |        
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |         |       |        
|Cash flows from operating activities:                                            |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |        
|Net income                                                                       |                                                                                   | $                                            | 15,305                                          |                                                 |       | $                               | 10,398 |        
|Adjustments to reconcile net income to net cash
flows from operating activities: |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |        
|                                                                                 |                                                                                   | Depreciation                                 |                                                 |                                                 | 3,121 |                                 |        |         | 1,657 |        
|                                                                                 |                                                                                   | Deferred income taxes                        |                                                 |                                                 | 9,380 |                                 |        |         | 6,649 |        
|                                                                                 |                                                                                   | Stock option and related expenses            |                                                 |                                                 | 186   |                                 |        |         | 288   |        
|                                                                                 |                                                                                   | Changes in operating assets and liabilities: |                                                 |                                                 |       |                                 |        |         |       |        
|                                                                                 |                                                                                   |                                              | Membership fees receivable, net                 |                                                 |       | 9,548                           |        |         |       | 17,829  |       
|                                                                                 |                                                                                   |                                              | Deferred incentive compensation                 |                                                 |       | 414                             |        |         |       | 592     |       
|                                                                                 |                                                                                   |                                              | Prepaid expenses and other current assets       |                                                 |       | (577                            | )      |         |       | (1,926  | )     
|                                                                                 |                                                                                   |                                              | Accounts payable and accrued liabilities        |                                                 |       | (186                            | )      |         |       | (52     | )     
|                                                                                 |                                                                                   |                                              | Accrued incentive compensation                  |                                                 |       | (193                            | )      |         |       | (2,308  | )     
|                                                                                 |                                                                                   |                                              | Deferred revenues                               |                                                 |       | (6,424                          | )      |         |       | (8,595  | )     
|                                                                                 |                                                                                   |                                              | Other liabilities                               |                                                 |       | 318                             |        |         |       | 558     |       
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|                                                                                 |                                                                                   |                                              |                                                 | Net cash flows provided by operating
activities |       |                                 | 30,892 |         |       |         | 25,090 | 
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|Cash flows from investing activities:                                            |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |        
|                                                                                 | Purchases of property and equipment, net                                          |                                              |                                                 | (4,010                                          | )     |                                 |        | (6,999  | )    
|                                                                                 | Purchases of marketable securities, net                                           |                                              |                                                 | (36,091                                         | )     |                                 |        | (18,782 | )    
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|                                                                                 |                                                                                   |                                              | Net cash flows used in investing activities     |                                                 |       | (40,101                         | )      |         |       | (25,781 | )     
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|Cash flows from financing activities:                                            |                                                                                   |                                              |                                                 |                                                 |       |                                 |        |        
|                                                                                 | Proceeds from the exercise of common
stock options                                |                                              |                                                 | 12,471                                          |       |                                 |        | 5,163   |      
|                                                                                 | Proceeds from the purchase of common stock
under the employee stock purchase plan |                                              |                                                 | 542                                             |       |                                 |        |        |      
|                                                                                 | Reimbursement for offering costs                                                  |                                              |                                                 | 375                                             |       |                                 |        | 650     |      
|                                                                                 | Payment of offering costs                                                         |                                              |                                                 | (375                                            | )     |                                 |        | (650    | )    
|                                                                                 | Stock option repurchases                                                          |                                              |                                                 | (3,140                                          | )     |                                 |        | (1,570  | )    
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|                                                                                 |                                                                                   |                                              | Net cash flows provided by
financing activities |                                                 |       | 9,873                           |        |         |       | 3,593   |       
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|Net increase in cash and cash equivalents                                        |                                                                                   |                                              | 664                                             |                                                 |       |                                 | 2,902  |        
|Cash and cash equivalents, beginning of period                                   |                                                                                   |                                              | 19,493                                          |                                                 |       |                                 | 19,726 |        
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                
|Cash and cash equivalents, end of period                                         |                                                                                   | $                                            | 20,157                                          |                                                 |       | $                               | 22,628 |        
|                                                                                 |                                                                                   |                                              |                                                 |                                                 |       |                                

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1  Description of operations

We provide best practices research and analysis focusing on corporate
strategy, operations and general management issues. Best practice research
identifies and analyzes 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
subscription program 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.

Note 2  Condensed financial statements

The accompanying condensed unaudited financial statements included herein
have been prepared by us in accordance with accounting principles generally
accepted in the United States for interim financial information and pursuant to
the rules and regulations of the Securities and Exchange Commission (SEC) for
reporting on Form 10-Q. Accordingly, certain information and footnote
disclosures required for complete financial statements are not included herein.
It is recommended that these condensed unaudited financial statements be read
in conjunction with the financial statements and related notes as reported on
our Form 10-K filed with the SEC in March 2001.

In the opinion of management, all adjustments, consisting of normal
recurring adjustments, considered necessary for a fair presentation of the
condensed financial position, results of operations, and cash flows at the
dates and for the periods presented have been included. The condensed balance
sheet presented as of December 31, 2000, has been derived from the financial
statements that have been audited by our independent public accountants. The
results of operations for the three and nine months ended September 30, 2001,
may not be indicative of the results that may be expected for the year ending
December 31, 2001, or any other period within calendar year 2001.

Note 3  Public offerings of common stock

In March and April 2001, certain of our shareholders sold 3,035,000 shares
of our common stock in a registered public offering (the Registered
Offering). In February 2000, certain of our shareholders sold 11,023,030
shares of our common stock in a secondary public offering (the Secondary
Offering). We did not directly receive any proceeds from the sale of common
stock pursuant to the Registered Offering or Secondary Offering. However, we
did receive cash from the exercise of common stock options in conjunction with
the Registered Offering and Secondary Offering. In addition, we recognized $1.0
million and $940,000 in compensation expense reflecting additional Federal
Insurance Corporation Act (FICA) taxes as a result of the taxable income that
the employees recognized upon the exercise of common stock options in
conjunction with the Registered Offering and Secondary Offering, respectively.
The additional FICA taxes are included within the financial statement item on
the condensed statement of income entitled Stock option and related expenses.

Note 4  Earnings per share

Basic earnings per share was computed by dividing net income by the number of
basic 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

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exercise of outstanding common stock options. A reconciliation of basic to
diluted weighted average common shares outstanding is as follows:

|                                                      |  |                    |            |  |                   |  |            |      |  |  |            |  |  |  |            | 
|----------------------------------------------------- |  | ------------------ | ---------- |  | ----------------- |  | ---------- | ---- |  |  | ---------- |  |  |  | ---------- | 
|                                                      |  | Three months ended |            |  | Nine months ended | 
|                                                      |  | September 30,      |            |  | September 30,     | 
|                                                      |  | 2001               |            |  | 2000              |  |            | 2001 |  |  | 2000       | 
|                                                      |  |                    |            |  |                   |  |            |      |  |  |            | 
|Basic weighted average common
shares outstanding      |  |                    | 34,750,221 |  |                   |  | 30,936,902 |      |  |  | 33,725,395 |  |  |  | 30,081,862 | 
|Weighted average common share
equivalents outstanding |  |                    | 2,158,122  |  |                   |  | 4,135,212  |      |  |  | 2,635,119  |  |  |  | 4,336,536  | 
|                                                      |  |                    |            |  |                   |  |            |      |  |  |            | 
|Diluted weighted average common
shares outstanding    |  |                    | 36,908,343 |  |                   |  | 35,072,114 |      |  |  | 36,360,514 |  |  |  | 34,418,398 | 
|                                                      |  |                    |            |  |                   |  |            |      |  |  |            | 

Note 5  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 three months ended September
30, 2001 and 2000, is $6.7 million and $4.3 million, respectively.
Comprehensive income for the nine months ended September 30, 2001 and 2000, is
$16.6 million and $10.9 million, respectively. The accumulated elements of
comprehensive income, net of tax, included within stockholders equity on the
balance sheets are comprised solely of the change in unrealized gains (losses)
on available-for-sale marketable securities.

Note 6  Supplemental cash flow disclosures

For
the nine months ended September 30, 2001 and 2000, we recognized
$40.0 million and $29.9 million, respectively, in stockholders equity for tax
deductions associated with the exercise of non-qualified stock options.
Estimated current income tax payments for the nine months ended September 30,
2001 and 2000, have been reduced by the consideration of the tax deductions
associated with the exercise of non-qualified stock options.

Note 7  Condensed financial statement reclassifications

Certain amounts in the condensed unaudited financial statements as of and
for the three and nine month periods ended September 30, 2000, have been
reclassified to conform to the presentation in the condensed financial
statements as of and for the three and nine month periods ended September 30,
2001.

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ITEM 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations.

This Quarterly Report on Form 10-Q of The Corporate Executive Board
Company contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on our
current plans and expectations and involve risks and uncertainties that could
cause actual future activities and results of operations to be materially
different from those set forth in the forward-looking statements. Factors that
could cause actual results to differ materially from those indicated by
forward-looking statements include, among others, our dependence on renewals of
our membership-based services, our inability to know in advance if new products
will be successful, difficulties we may experience in anticipating market
trends, our need to attract and retain a significant number of highly skilled
employees, restrictions on selling our products and services to the health care
industry, continued consolidation in the financial institution industry which
may adversely impact our business, fluctuations in operating results, our
potential inability to protect our intellectual property rights, our potential
exposure to litigation related to content, our potential exposure to loss of
revenue resulting from our unconditional service guarantee, various factors
that could affect the estimated income tax rate, our ability to use our
existing deferred tax assets, and possible volatility of stock price. We
undertake no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or otherwise.

Overview

We provide best practices research and analysis focusing on corporate
strategy, operations and general management issues. Best practice research
identifies and analyzes 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
subscription program 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.

Subscription memberships, which are annually renewable contracts, are
generally payable by members at the beginning of the contract term. Billings
attributable to our subscription programs initially are recorded as deferred
revenues and then recognized as revenues pro rata over the subscription
contract term.

One measure of our business is the annualized Contract Value, which we
calculate as the aggregate annualized subscription membership revenue
attributed to all subscription membership 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. Contract Value has increased 30.2% to
$128.5 million at September 30, 2001, from $98.7 million at September 30, 2000.

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 member meetings and all
associated support services. Member relations and marketing expenses include
the costs of acquiring new members 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. Stock option and related expenses include non-cash
compensation expense related to certain stock option agreements in existence at
the time we were spun-off from the Advisory Board Company (the Spin-off) and
additional payroll taxes for compensation expense relating to the taxable
income recognized by employees upon the exercise of non-qualified common stock
options.

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Other income, net consists primarily of interest
income earned on a portfolio of cash, cash equivalents and marketable securities, which consists of highly liquid U.S. government
obligations, U.S. Treasury notes and bonds, and Washington, D.C. tax-exempt
notes and bonds.

Results of operations

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

|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |      |  |  |       |      | 
|---------------------------------------- | --------------------------------- |  | ------------------ | ---- |  | ----------------- | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- | 
|                                         |                                   |  | Three months ended |      |  | Nine months ended |      
|                                         |                                   |  | September 30,      |      |  | September 30,     |      
|                                         |                                   |  | 2001               |      |  | 2000              |       |      | 2001 |  |       | 2000 | 
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |      | 
|Revenues                                 |                                   |  | 100.0              | %    |  |                   | 100.0 | %    |      |  | 100.0 | %    |  |  | 100.0 | %   
|                                         | Cost of services                  |  |                    | 33.8 |  |                   |       | 36.1 |      |  |       | 35.7 |  |  |       | 37.8 | 
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|Gross profit                             |                                   |  | 66.2               |      |  |                   | 63.9  |      |      |  | 64.3  |      |  |  | 62.2  |     
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|Costs and expenses:                      |                                   |  |                    |      |  |                   |       |      |      |  |       |      |  |  |       |     
|                                         | Member relations and marketing    |  |                    | 24.3 |  |                   |       | 22.4 |      |  |       | 23.5 |  |  |       | 22.1 | 
|                                         | General and administrative        |  |                    | 12.9 |  |                   |       | 13.8 |      |  |       | 13.0 |  |  |       | 13.3 | 
|                                         | Depreciation                      |  |                    | 3.7  |  |                   |       | 3.0  |      |  |       | 3.4  |  |  |       | 2.4  | 
|                                         | Stock option and related expenses |  |                    |     |  |                   |       | 0.4  |      |  |       | 1.4  |  |  |       | 1.9  | 
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|                                         |                                   |  | 40.9               |      |  |                   | 39.6  |      |      |  | 41.2  |      |  |  | 39.7  |     
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|Income from operations                   |                                   |  | 25.4               |      |  |                   | 24.4  |      |      |  | 23.1  |      |  |  | 22.5  |     
|Other income, net                        |                                   |  | 3.4                |      |  |                   | 2.4   |      |      |  | 3.5   |      |  |  | 2.4   |     
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|Income before provision for income taxes |                                   |  | 28.8               |      |  |                   | 26.7  |      |      |  | 26.6  |      |  |  | 24.9  |     
|Provision for income taxes               |                                   |  | 10.9               |      |  |                   | 10.4  |      |      |  | 10.1  |      |  |  | 9.7   |     
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     
|Net income                               |                                   |  | 17.9               | %    |  |                   | 16.3  | %    |      |  | 16.5  | %    |  |  | 15.2  | %   
|                                         |                                   |  |                    |      |  |                   |       |      |      |  |       |     

Three months and nine months ended September 30, 2001 and September 30, 2000

Revenues.Total revenues increased 30.1% to $32.6 million for the three
months ended September 30, 2001, from $25.1 million for the three months ended
September 30, 2000. Total revenues increased 35.8% to $93.0 million for the
nine months ended September 30, 2001, from $68.5 million for the nine months
ended September 30, 2000. The increase in revenues is attributable primarily to
cross-selling additional subscriptions to existing members, adding new members,
price increases, and the introduction of three new subscription programs over
the past twelve months.

Cost of services.Cost of services increased 21.7% to $11.0 million for
the three months ended September 30, 2001, from $9.0 million for the three
months ended September 30, 2000. Cost of services increased 28.1% to $33.2
million for the nine months ended September 30, 2001, from $25.9 million for
the nine months ended September 30, 2000. The increase in cost of services was
principally due to increased research staffing and related compensation costs
to support the introduction of new subscription programs and an increase in
short answer research and executive education services staffing to serve the
growing membership base. Cost of services as a percentage of revenues decreased
to 33.8% for the three months ended September 30, 2001, from 36.1% for the
three months ended September 30, 2000. Cost of services as a percentage of
revenues decreased to 35.7% for the nine months ended September 30, 2001, from
37.8% for the nine months ended September 30, 2000. This decrease is
attributable to 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 subscription memberships.

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Gross
profit trend.   Historically, the gross profit
margin (gross profit as a percentage of total revenues) has fluctuated based upon the growth in revenues offset by the cost of
delivering best practices research studies, the timing of executive education
seminars, the volume of customized research briefs and the hiring of personnel.
Accordingly, the gross margin for the three and nine months ended September
30, 2001, may not be indicative of future results.

Member relations and marketing.   Member relations and marketing costs
increased 41.1% to $7.9 million for the three months ended September 30, 2001,
from $5.6 million for the three months ended September 30, 2000. Member
relations and marketing costs increased 44.4% to $21.8 million for the nine
months ended September 30, 2001, from $15.1 million for the nine months ended
September 30, 2000. The increase in member relations and marketing costs is
primarily due to the increase in sales staff and related costs, the increase in
commission expense associated with increased revenues, and the increase in
member relations personnel and related costs to serve the expanding membership
base.

General and administrative.General and administrative expenses increased
21.6% to $4.2 million for the three months ended September 30, 2001, from $3.5
million for the three months ended September 30, 2000. General and
administrative expenses increased 32.9% to $12.1 million for the nine months
ended September 30, 2001, from $9.1 million for the nine months ended September
30, 2000. The increase in general and administrative expenses resulted
primarily from staffing increases in general management, human resources and
recruiting, and management information systems to support our growth.

Depreciation.Depreciation expense increased 61.5% to $1.2 million for the
three months ended September 30, 2001, from $742,000 for the three months ended
September 30, 2000. Depreciation expense increased 88.4% to $3.1 million for
the nine months ended September 30, 2001, from $1.7 million for the nine months
ended September 30, 2000. The increase in depreciation expense was principally
due to the additional investment in leasehold improvements for additional
office space in Washington, D.C., and the purchase of computer equipment and
software to support organizational growth.

Stock option and related expenses.We recognized $96,000 within the three
months ended September 30, 2000, representing non-cash compensation expense
related to stock option agreements in existence at the time of the
Spin-off. We did not recognize any non-cash compensation expense within the three months ended
September 30, 2001, related to these stock option agreements. We recognized
$186,000 and $288,000 within the nine months ended September 30, 2001 and 2000,
respectively, representing non-cash compensation expense related to stock
option agreements in existence at the time of the Spin-off. In connection with
the Spin-off, The Advisory Board Company executed substitution agreements with
each of our employees participating in The Advisory Board Company stock option
plan. The terms of the substitution agreements resulted in compensation expense
being recognized over the vesting period. We will recognize no additional
compensation expense related to the substitution agreements. In addition, we
recognized $11,000 in compensation expense within the three months ended
September 30, 2000, reflecting additional Federal Insurance Corporation Act
(FICA) taxes as a result of the taxable income that the employees recognized
upon the exercise of options to purchase shares of common stock. We
did not recognize
any compensation expense in the three months ended September 30, 2001, for FICA
taxes upon the exercise by employees of options to purchase shares of common
stock. We recognized $1.1 million and $987,000 in compensation expense within
the nine months ended September 30, 2001 and 2000, respectively, reflecting
additional FICA taxes primarily as a result of the taxable income that the
employees recognized upon the exercise of options to purchase shares of common
stock, which were sold in the Registered Offering and Secondary Offering.

Other income, net.Other income, net increased 86.6% to $1.1 million for
the three months ended September 30, 2001, from $595,000 for the three months
ended September 30, 2000. Other income increased 97.1% to $3.2 million for the
nine months ended September 30, 2001, from $1.6 million for the nine months
ended September 30, 2000. The growth in other income, net was due primarily to
the increase in interest income associated with the increased level of cash,
cash equivalents and marketable securities.

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Cash, cash equivalents and marketable securities increased as a result of
net cash flows from operating activities and 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
$3.6 million and $2.6 million for the three months ended September 30, 2001 and
2000, respectively. We recorded a provision for income taxes of $9.4 million
and $6.6 million for the nine months ended September 30, 2001 and 2000,
respectively. The decrease in the effective income tax rate for the three and
nine month periods ended September 30, 2001, as compared to September 30, 2000,
primarily reflects an increase in the amount of tax-exempt interest income
earned on the portfolio of cash, cash equivalents and marketable securities and
in the benefit from Federal income tax incentives associated with the location
of our office facilities.

Liquidity and capital resources

Cash flows from operating activities.We have financed our operations to
date through funds generated from operating activities. Subscription
memberships, which are primarily annually renewable contracts, are generally
payable by members at the beginning of the contract term. The combination of
revenues growth and advance payment of subscription memberships has
historically resulted in net positive cash flows provided by operating
activities. We generated net cash flows from operating activities of $30.9
million and $25.1 million for the nine months ended September 30, 2001 and
2000, respectively. For the nine months ended September 30, 2001 and 2000,
operating cash flows were generated within the period principally by net
income, the collection of membership fees receivable, and the utilization of
tax benefits created by the exercise of common stock options. For the nine
months ended September 30, 2001 and 2000, operating cash flows were partially
offset by decreases within the periods in deferred revenues. As of September 30, 2001, we had cash, cash
equivalents and marketable securities of $108.1 million. 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
twelve months.

Cash flows from investing activities.We used net cash flows in investing
activities of $40.1 million and $25.8 million during the nine months ended
September 30, 2001 and 2000, respectively. For the nine months ended September
30, 2001 and 2000, investing cash flows were used within the period to purchase
available-for-sale marketable securities and to purchase leasehold improvements
for additional office space in Washington, D.C., computer equipment and
software.

Cash flows from financing activities.We generated net cash flows from
financing activities of $9.9 million and $3.6 million during the nine months
ended September 30, 2001 and 2000, respectively. For the nine months ended
September 30, 2001 and 2000, financing cash flows were generated within the
period principally by the receipt of cash from the exercise of stock options in
association with the Registered Offering and Secondary Offering. In addition,
we entered into agreements with certain employees prior to the Spin-off
relating to the repurchase of stock options at fixed amounts. We paid $3.1
million and $1.6 million related to these agreements in the nine months ended
September 30, 2001 and 2000, respectively. We do not have any remaining cash
obligations related to the agreements with any employees prior to the Spin-off
to repurchase stock options at fixed amounts as of September 30, 2001.

We have entered into a $10.0 million, unsecured loan agreement, expiring
May 2002, with a commercial bank that provides for a revolving line of credit
facility under which we may from time to time borrow, repay, and re-borrow
funds. There have been no borrowings under the loan agreement.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to interest rate risk through our 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 with maturities of less than
three months. Marketable securities consist primarily of United States Treasury
notes and bonds and 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 within the portfolio mature and are
re-invested 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. OTHER INFORMATION




ITEM 1. Legal Proceedings.

We are not currently a party to any material legal proceedings.




ITEM 2. Change in Securities.

Not applicable.




ITEM 3. Defaults Upon Senior Securities and Use of Proceeds.

Not applicable.




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

Not applicable.




ITEM 5. Other Information.

Effective November 12, 2001, Michael A. DAmato resigned from our Board of Directors to spend more time on other activities.




ITEM 6. Exhibits and Reports on Form 8-K.

(a)  Exhibits:

|             |  |   |  |                                                                                                                               
|------------ |  | - |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.1 |  |  |  | NonCompetition Agreement by and among The Corporate Executive Board Company, The Advisory Board Company and David G. Bradley.
|            
|Exhibit 10.2 |  |  |  | NonCompetition Agreement by and among The Corporate Executive Board Company, The Advisory Board Company and David G. Bradley.

(b)  Reports on Form 8-K: Not applicable.

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SIGNATURES

Pursuant to the requirements 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.

The Corporate Executive Board Company

By: /s/ Clay M. Whitson
Clay M. Whitson
Chief Financial Officer

Date: November 13, 2001

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INDEX TO EXHIBITS

|              |  |   |  |                                                                                                                               
|------------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  |   |  | Description                                                                                                                   
|              |  |   |  |                                                                                                                               
|             
|Exhibit 10.1  |  |  |  | NonCompetition Agreement by and among The Corporate Executive Board Company, The Advisory Board Company and David G. Bradley.
|             
|Exhibit 10.2  |  |  |  | NonCompetition Agreement by and among The Corporate Executive Board Company, The Advisory Board Company and David G. Bradley.