UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2008
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
    
    52-2056410(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)1919 North Lynn StreetArlington, Virginia
    
    22209(Address of principal executive offices)
    
    (Zip Code)
 (571) 303-3000
 Not applicable.
 þ o
  Large accelerated filer
þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company
o(Do not check if a smaller reporting company)
 o þ




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
INDEX TO FORM 10-Q
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets at June 30, 2008 and December 31, 2007
    
    
    3Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007
    
    
    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
    
    
    16Item 4. Controls and Procedures
    
    
    16PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    16Item 1A. Risk Factors
    
    
    16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18
  2




---



##### 



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    24,068
    
    
    $
    47,585Marketable securities
    
    
    28,861
    
    
    
    24,153Membership fees receivable, net
    
    
    93,213
    
    
    
    161,336Deferred income taxes, net
    
    
    13,024
    
    
    
    12,710Deferred incentive compensation
    
    
    13,434
    
    
    
    15,544Prepaid expenses and other current assets
    
    
    10,441
    
    
    
    10,638Total current assets
    
    
    183,041
    
    
    
    271,966Deferred income taxes, net
    
    
    24,915
    
    
    
    24,307Marketable securities
    
    
    59,821
    
    
    
    72,618Property and equipment, net
    
    
    109,229
    
    
    
    91,904Goodwill
    
    
    42,626
    
    
    
    42,626Intangible assets, net
    
    
    19,239
    
    
    
    22,143Other non-current assets
    
    
    19,021
    
    
    
    19,208Total assets
    
    $
    457,892
    
    
    $
    544,772Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    40,776
    
    
    $
    62,681Accrued incentive compensation
    
    
    23,657
    
    
    
    31,355Deferred revenues
    
    
    295,594
    
    
    
    323,395Total current liabilities
    
    
    360,027
    
    
    
    417,431Other liabilities
    
    
    61,748
    
    
    
    59,794Total liabilities
    
    
    421,775
    
    
    
    477,225Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized, 43,181,666 and 43,119,512 shares issued, and
34,021,148 and 34,993,581 shares outstanding at June 30,
2008 and December 31, 2007, respectively
    
    
    432
    
    
    
    431Additional paid-in capital
    
    
    390,654
    
    
    
    383,636Retained earnings
    
    
    271,913
    
    
    
    269,429Accumulated elements of other comprehensive income (loss)
    
    
    677
    
    
    
    (194
    )Treasury stock, at cost, 9,160,518 and 8,125,931 shares
at June 30, 2008 and December 31, 2007, respectively
    
    
    (627,559
    )
    
    
    (585,755
    )Total stockholders equity
    
    
    36,117
    
    
    
    67,547Total liabilities and stockholders equity
    
    $
    457,892
    
    
    $
    544,772
  3




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    141,173
    
    
    $
    129,697
    
    
    $
    279,196
    
    
    $
    254,222Cost of services
    
    
    45,612
    
    
    
    47,264
    
    
    
    90,667
    
    
    
    91,940Gross profit
    
    
    95,561
    
    
    
    82,433
    
    
    
    188,529
    
    
    
    162,282Costs and expenses:Member relations and marketing
    
    
    40,776
    
    
    
    37,482
    
    
    
    82,676
    
    
    
    71,728General and administrative
    
    
    22,872
    
    
    
    18,908
    
    
    
    42,599
    
    
    
    36,025Depreciation and amortization
    
    
    5,183
    
    
    
    3,165
    
    
    
    10,745
    
    
    
    6,071Total costs and expenses
    
    
    68,831
    
    
    
    59,555
    
    
    
    136,020
    
    
    
    113,824Income from operations
    
    
    26,730
    
    
    
    22,878
    
    
    
    52,509
    
    
    
    48,458Other income, net
    
    
    941
    
    
    
    5,289
    
    
    
    1,639
    
    
    
    11,204Income before provision for income taxes
    
    
    27,671
    
    
    
    28,167
    
    
    
    54,148
    
    
    
    59,662Provision for income taxes
    
    
    11,068
    
    
    
    10,844
    
    
    
    21,659
    
    
    
    22,969Net income
    
    $
    16,603
    
    
    $
    17,323
    
    
    $
    32,489
    
    
    $
    36,693Earnings per share:Basic
    
    $
    0.49
    
    
    $
    0.47
    
    
    $
    0.94
    
    
    $
    0.97Diluted
    
    $
    0.49
    
    
    $
    0.46
    
    
    $
    0.94
    
    
    $
    0.96Dividends per share
    
    $
    0.44
    
    
    $
    0.40
    
    
    $
    0.88
    
    
    $
    0.80Weighted average shares used in the
calculation of earnings per share:Basic
    
    
    34,046
    
    
    
    37,051
    
    
    
    34,383
    
    
    
    37,732Diluted
    
    
    34,170
    
    
    
    37,517
    
    
    
    34,516
    
    
    
    38,311
  4




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six months endedJune 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    32,489
    
    
    $
    36,693Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    10,745
    
    
    
    6,071Deferred income taxes
    
    
    (134
    )
    
    
    709Share-based compensation
    
    
    6,141
    
    
    
    12,102Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (1,966
    )Amortization of marketable securities premiums (discounts), net
    
    
    363
    
    
    
    (657
    )Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    68,123
    
    
    
    64,074Deferred incentive compensation
    
    
    2,110
    
    
    
    (10
    )Prepaid expenses and other current assets
    
    
    197
    
    
    
    152Other non-current assets
    
    
    185
    
    
    
    (4,895
    )Accounts payable and accrued liabilities
    
    
    (15,572
    )
    
    
    (34,130
    )Accrued incentive compensation
    
    
    (7,698
    )
    
    
    (4,557
    )Deferred revenues
    
    
    (27,801
    )
    
    
    (13,395
    )Other liabilities
    
    
    1,953
    
    
    
    3,449Net cash flows provided by operating activities
    
    
    71,101
    
    
    
    63,640Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (31,498
    )
    
    
    (9,183
    )Cost method investment
    
    
    
    
    
    
    (3,829
    )Sales and maturities of marketable securities, net
    
    
    7,810
    
    
    
    108,141Net cash flows (used in) provided by investing activities
    
    
    (23,688
    )
    
    
    95,129Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    100
    
    
    
    529Proceeds from the issuance of common stock under the employee stock purchase plan
    
    
    778
    
    
    
    1,125Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    1,966Purchase of treasury shares
    
    
    (41,804
    )
    
    
    (218,009
    )Payment of dividends
    
    
    (30,004
    )
    
    
    (29,623
    )Net cash flows used in financing activities
    
    
    (70,930
    )
    
    
    (244,012
    )Net decrease in cash and cash equivalents
    
    
    (23,517
    )
    
    
    (85,243
    )Cash and cash equivalents, beginning of period
    
    
    47,585
    
    
    
    171,367Cash and cash equivalents, end of period
    
    $
    24,068
    
    
    $
    86,124
  5




---



##### 



THE CORPORATE EXECUTIVE BOARD COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
   Note 2. Condensed consolidated financial statements
   Note 3. Accounting pronouncements
 Recently adopted
   6




---



##### 



Not yet adopted
    Note 4. Fair value measurement
  
 
 
 7




---



##### 



Fair Value Measurements at Reporting Date UsingFair Valueas ofJune 30,2008
    
    Level 1
    
    Level 2
    
    Level 3Financial assetsCash and cash equivalents
    
    $
    24,068
    
    
    $
    24,068
    
    
    $
    
    
    
    $
    Available-for-sale marketable securities
    
    
    88,682
    
    
    
    88,682
    
    
    
    
    
    
    
    Variable insurance products held in a Rabbi Trust
    
    
    14,758
    
    
    
    
    
    
    
    14,758
    
    
    
    Financial liabilitiesForward exchange contracts
    
    $
    321
    
    
    $
    
    
    
    $
    321
    
    
    $
    
 Note 5. Other liabilities
  June 30,
    
    
    December 31,2008
    
    
    2007Deferred compensation
    
    $
    11,752
    
    
    $
    12,242Lease incentives
    
    
    30,217
    
    
    
    31,201Deferred rent benefit  long term
    
    
    11,553
    
    
    
    8,081Accrued lease restructuring charges
    
    
    5,031
    
    
    
    5,165Deferred revenues  long term
    
    
    3,195
    
    
    
    3,105Total other liabilities
    
    $
    61,748
    
    
    $
    59,794
 Note 6. Stockholders equity and share-based compensation
 Share-based compensation
  Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Cost of services
    
    $
    1,763
    
    
    $
    2,587
    
    
    $
    2,677
    
    
    $
    5,863Member relations and marketing
    
    
    475
    
    
    
    1,194
    
    
    
    166
    
    
    
    2,525General and administrative
    
    
    1,320
    
    
    
    1,738
    
    
    
    3,298
    
    
    
    3,7143,558
    
    
    
    5,519
    
    
    
    6,141
    
    
    
    12,102Income tax benefit
    
    
    (1,423
    )
    
    
    (2,125
    )
    
    
    (2,456
    )
    
    
    (4,657
    )Total share-based compensation, net of tax benefit
    
    $
    2,135
    
    
    $
    3,394
    
    
    $
    3,685
    
    
    $
    7,445
   8




---



##### 



Share Repurchases
  Dividends
  Note 7. Earnings per share
  Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic weighted average common shares outstanding
    
    
    34,046
    
    
    
    37,051
    
    
    
    34,383
    
    
    
    37,732Effect of dilutive common shares outstanding
    
    
    124
    
    
    
    466
    
    
    
    133
    
    
    
    579Diluted weighted average common shares outstanding
    
    
    34,170
    
    
    
    37,517
    
    
    
    34,516
    
    
    
    38,311
  Note 8. Comprehensive income
  Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    16,603
    
    
    $
    17,323
    
    
    $
    32,489
    
    
    $
    36,693Unrealized gains and (losses) of marketable
securities, net of tax
    
    
    (614
    )
    
    
    (307
    )
    
    
    50
    
    
    
    (43
    )Unrealized gains on forward contracts, net of tax
    
    
    446
    
    
    
    167
    
    
    
    492
    
    
    
    563Total comprehensive income
    
    $
    16,435
    
    
    $
    17,183
    
    
    $
    33,031
    
    
    $
    37,213
 9




---



##### 



Note 9. Commitments and contingencies
     Note 10. Subsequent events
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  10




---



##### 



Business Overview
        11




---



##### 



Critical Accounting Policies
  Results of Operations
  Three months ended June 30,
    
    Six months ended June 30,2008
    
    2007
    
    2008
    
    2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    32.3
    
    
    
    36.4
    
    
    
    32.5
    
    
    
    36.2Gross profit
    
    
    67.7
    
    
    
    63.6
    
    
    
    67.5
    
    
    
    63.8Costs and expenses:Member relations and marketing
    
    
    28.9
    
    
    
    28.9
    
    
    
    29.6
    
    
    
    28.2General and administrative
    
    
    16.2
    
    
    
    14.6
    
    
    
    15.3
    
    
    
    14.2Depreciation and amortization
    
    
    3.7
    
    
    
    2.4
    
    
    
    3.8
    
    
    
    2.4Total costs and expenses
    
    
    48.8
    
    
    
    45.9
    
    
    
    48.7
    
    
    
    44.8Income from operations
    
    
    18.9
    
    
    
    17.6
    
    
    
    18.8
    
    
    
    19.1Other income, net
    
    
    0.7
    
    
    
    4.1
    
    
    
    0.6
    
    
    
    4.4Income before provision for income taxes
    
    
    19.6
    
    
    
    21.7
    
    
    
    19.4
    
    
    
    23.5Provision for income taxes
    
    
    7.8
    
    
    
    8.4
    
    
    
    7.8
    
    
    
    9.0Net income
    
    
    11.8
    %
    
    
    13.4
    %
    
    
    11.6
    %
    
    
    14.4
    %
  Three and Six Months Ended June 30, 2008 and 2007
 Revenues.
  Cost of services.
   12




---



##### 



Gross profit.
  Member relations and marketing.
   General and administrative.
   13




---



##### 



Depreciation and amortization.
  Other income, net.
  Provision for income taxes.
  Liquidity and Capital Resources
  Cash flows from operating activities.
  14




---



##### 



Cash flows from investing activities.
  Cash flows from financing activities.
    Contractual obligations
  Off-Balance Sheet Arrangements
  15




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
  Foreign currency exchange rate risk
  
 Item 4. Controls and Procedures.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  16




---



##### 



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 PlansApril 1, 2008 to April 30, 2008 (1)
    
    
    2,344
    
    
    $
    39.92
    
    
    
    2,344
    
    
    $
    26,537,299May 1, 2008 to May 31, 2008 (1)
    
    
    91,019
    
    
    $
    44.39
    
    
    
    91,019
    
    
    $
    22,496,834June 1, 2008 to June 30, 2008 (1)
    
    
    1,224
    
    
    $
    45.55
    
    
    
    1,224
    
    
    $
    22,441,080Total
    
    
    94,587
    
    
    $
    44.30
    
    
    
    94,587
 
 (1)
    
    Amounts include the effect of employees using common stock received from the exercise of
share-based awards to satisfy the statutory minimum federal and state withholding requirements
generated from the exercise of such awards. In effect, the Company repurchased, at fair market
value, a portion of the common stock received by employees upon exercise of their awards. The
Company repurchased approximately 4,587 shares for $0.2 million.  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  Proposal Number 1  Election of directors.
 SHARES
    
    SHARESVOTED FOR
    
    WITHHELDThomas L. Monahan III
    
    
    33,040,407
    
    
    
    209,176Gregor S. Bailar
    
    
    33,042,318
    
    
    
    207,265Stephen M. Carter
    
    
    33,039,147
    
    
    
    210,436Gordon J. Coburn
    
    
    33,042,347
    
    
    
    207,236Robert C. Hall
    
    
    33,042,347
    
    
    
    207,236Nancy J. Karch
    
    
    33,042,247
    
    
    
    207,336David W. Kenny
    
    
    33,042,347
    
    
    
    207,236Daniel O. Leemon
    
    
    33,042,247
    
    
    
    207,336
 17




---



##### 



Proposal Number 2  Ratification of the appointment of Ernst & Young LLP as independent
registered public accounting firm for the year ended December 31, 2008.
  SHARES VOTED FOR
    
    
    33,106,150SHARES VOTED AGAINST
    
    
    125,469SHARES VOTED TO ABSTAIN
    
    
    17,964
 
 Item 5. Other Information.
  
 Item 6. Exhibits.
  Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 18




---



##### 



SIGNATURES
  THE CORPORATE EXECUTIVE BOARD COMPANY(Registrant)Date: August 8, 2008
    By:
    /s/ Timothy R. YostTimothy R. YostChief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer) 19




---



##### 



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