##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT of 1934
  For the fiscal year ended December 31, 2009
  Commission file
    number:  000-50784
      Blackboard Inc.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

52-2081178(I.R.S. Employer
    Identification No.)650 Massachusetts Ave, N.W.
    Washington D.C.(Address of Principal
    Executive Offices)

20001(Zip
    Code)   Registrants telephone number, including area code:
 (202) 463-4860
  Securities registered pursuant to Section 12(g) of the
    Act:
 None
  Securities registered pursuant to Section 12(b) of the
    Act:
 Common Stock, $0.01 par value per share
  þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting company o(Do not check if a smaller reporting
    company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





BLACKBOARD
    INC.
  Form 10-K
  TABLE OF
    CONTENTS
   
 PageNumberPART IItem 1.


Business


1Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


21Item 2.


Properties


21Item 3.


Legal Proceedings


22Item 4.


Submission of Matters to a Vote of Security
    Holders


22PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


23Item 6.


Selected Financial Data


25Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


27Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


46Item 8.


Financial Statements and Supplementary Data


47Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


80Item 9A.


Controls and Procedures


80Item 9B.


Other Information


83PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


83Item 11.


Executive Compensation


83Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


83Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


83Item 14.


Principal Accounting Fees and Services


83PART IVItem 15.


Exhibits, Financial Statement Schedules


84EX-10.6EX-10.7EX-10.10EX-10.11EX-10.15EX-10.16EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   ii




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##### Table of Contents



This report contains forward-looking statements that involve
    risks and uncertainties that could cause our actual results to
    differ materially from those expressed or implied by such
    statements. Factors that might cause or contribute to such
    differences include, but are not limited to, those discussed in
    the section entitled Risk Factors under
    Item 1A. When used in this report, the words
    expects, anticipates,
    intends, plans, believes,
    seeks, estimates and similar expressions
    are generally intended to identify forward-looking statements
    within the meaning of The Private Securities Litigation Reform
    Act of 1995. You should not place undue reliance on these
    forward-looking statements, which reflect our opinions only as
    of the date of this report. Blackboard assumes no obligation and
    does not intend to update these forward-looking statements.
 PART I  Item 1.
    Business.  General
    Blackboard
    Learntm Blackboard
    Transacttm Blackboard
    Connecttm Blackboard
    Mobiletm
      Blackboard Connect
  e-learning
 1




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##### Table of Contents



e-learning.
  Blackboard Mobile. Blackboard Mobile
  Customer
    Overview
    Products
    and Services
  Blackboard
    Learntm Blackboard Transact
    tm Blackboard
    Connecttm Blackboard
    Mobiletm
  Blackboard
    Learntm Blackboard Academic
    Suitetm Blackboard
    Learntm Release 9.0 Blackboard Learn Course Delivery Community Engagement Content
    Management Portfolio Management Outcomes
    Assessment Blackboard Academic Suite
  Offered
inBlackboard Academic
Suitetm

Offered in Blackboard
LearntmThe
Blackboard Learning
Systemtm

Course DeliverymoduleThe
Blackboard Community
Systemtm

Community EngagementmoduleThe
Blackboard Content
Systemtm

Content ManagementmoduleThe
Blackboard Portfolio
Systemtm

Portfolio ManagementmoduleThe
Blackboard Outcomes
Systemtm

Outcomes Assessmentmodule   Blackboard Commerce
    Suitetm Blackboard
    Transacttm.Blackboard
    Connecttm Blackboard
    Mobiletm
  Blackboard Learn Blackboard Transact Blackboard Connect Blackboard Mobile Blackboard
    Learn
 2




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##### Table of Contents



Blackboard
    Learn
  Blackboard Learn
  
    Increase faculty adoption of technology for teaching,
    Drive student engagement through personalized experiences and
    active learning tools,
    Securely share and collaborate around content across the
    institution, and
    Meet diverse assessment needs of institutions.  Blackboard Learn Blackboard Learn Course Delivery Community Engagement Content Management Portfolio Management Outcomes Assessment Blackboard Learn WebCT Campus
    Editiontm WebCT
    Vistatm ANGEL Learning Management Suite
  Blackboard
    Learn  Course Delivery Module
  Course Delivery Blackboard Learn Blackboard Learning
    System Course Delivery
  
    Teaching and Learning.  Instructors can post
    syllabi and course materials, including documents, graphics,
    audio, video and multimedia; create, deliver and automatically
    score online assignments and tests; and report grades and
    grading analysis along with other information to students.
    Advanced features.  The Course Deliverymodule also provides integrated email, discussion forums and
    live virtual classrooms. It also provides tools to facilitate
    group collaboration, communication, file-sharing,
    self-evaluation and peer review. Additionally, we offer
    Scholartm

    by Blackboard,a service which allows users to build a
    network of peers who share similar educational interests, and
    SafeAssigntm,

    a plagiarism prevention service.
    Extending the learning environment.  Our
    products can be integrated with existing campus student
    information systems and campus registrar systems to access user,
    course and enrollment information stored throughout the
    institution. Additional capabilities are available through the
    integration of third-party Blackboard Building
    Blocks®or Blackboard
    PowerLinkstm

    tools developed by our clients or independent parties. These
    extensions of the core software applications allow institutions
    to download, install and manage third-party enhancements. These
    third-party applications add functionality to our products, and
    several client-managed online communities exist to foster open
    source development of enhancements to our products as well.
    System administration.  Our products allow
    clients to configure our applications to the specific needs of
    their institutions. The appearance and configuration of our
    products are customizable by each client for multiple
    independent user populations within the institution on the same
    system hardware and database. In addition, clients have the
    ability to define multiple user roles and set access policies
    for guest accounts and observers, such as parents, advisors,
    mentors and supervisors.  Course Delivery Blackboard
    Learn Course Delivery
 3




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##### Table of Contents



Blackboard
    Learn  Community Engagement Module
  Community Engagement Blackboard
    Learn Blackboard
    Community System Course Delivery Community Engagement Community Engagement Blackboard
    Learn Community Engagement
  
    Configurable portal environment enabling one-stop access to
    services.  Through a customizable Web portal, the
    Community Engagementmodule enables institutions to
    provide their users access to multiple content sources, campus
    services, administrative systems and personal information
    management tools, such as email and calendar. The Community
    Engagement module can provide single sign-on access to a
    variety of campus systems, eliminating the need for multiple
    access points and identification verifications. Institutions and
    independent software vendors can create custom portal
    applications that provide views into content and data from other
    systems or integrate other applications.
    Facilitating academic and co-curricular collaboration using
    community and communication tools.  The
    Community Engagementmodule facilitates the creation of
    meaningful campus connections by allowing institutions to define
    dedicated online environments for departments, clubs and other
    groups. Members of organizations can manage their own
    operations, as well as upload and share documents, and use their
    own communication tools, conserving the resources of campus
    information technology departments.
    Maintaining distinct campus identities.  An
    institution can configure the Community Engagementmodule
    to support multiple identities or brands within the institution,
    such as multiple campuses, a law school, medical school or
    continuing education program, and deliver content to targeted,
    institution-defined roles. In addition, users can customize the
    Community Engagementinterface according to their needs
    and preferences.
    e-Commerce
    capabilities.  This functionality enables campus
    business units and student organizations to sell products, which
    may be paid for with a students credit card or debit
    account using the Blackboard Transactplatform. Examples
    include campus bookstore online purchases, athletics and event
    tickets, library fees and parking fees.  Blackboard
    Learn  Content Management Module
  Content Management Blackboard Learn Blackboard Content
    System Course Delivery Community Engagement Content
    Management Content
    Management Learning Content
  
    Storing and accessing learning
    materials.  Institutions can make secure,
    web-based,
    drag-and-drop
    file storage space available to all users, who can then use a
    configurable permissions structure to share files with
    individuals or groups, track versions and add comments. To
    assure appropriate usage of the file space, administrators can
    manage disk space quotas and set bandwidth controls. 4




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
    Learning content management.  Instructors can
    manage versions of documents and other course material and can
    re-use content across multiple courses or sections. Institutions
    can create content repositories administered at the
    departmental, school or institutional levels to facilitate the
    sharing and searching of digital content.
    Integrating library resources into the learning
    environment.  Librarians can create and manage
    collections of digital assets for use by specific courses,
    disciplines or the entire institution.
    Collecting and sharing materials within electronic
    portfolios.  Users can collect and organize their
    academic work as electronic portfolios to showcase their
    accomplishments, which can be shared with other users on the
    system, as well as published externally. These portfolios can be
    used for personal reflection, academic assignments, program
    completion, alignment with educational standards, or for
    professional development, such as résumés and job
    applications.  Content Management Portfolio Management Blackboard Learn Portfolio Management Blackboard Learn Blackboard
    Learning System 
  Blackboard
    Learn  Outcomes Assessment Module
  Outcomes Assessment Blackboard Learn Course
    Delivery Community Engagement Academic
    Collaboration Blackboard Outcomes
    Systemtm Blackboard Learning System Outcomes Assessment Outcomes Assessment Outcomes
    Assessment
  
    Planning outcomes.  The Standards, Goals
    and Student Learning Objectives feature enables
    institutions to document intended outcomes of courses, programs,
    departments, colleges, universities and standards bodies.
    Rubrics, or standard evaluation criteria, facilitate shared and
    consistent evaluation of outcomes, while curriculum maps
    highlight the connection between program goals and courses and
    co-curricular educational experiences.
    Measuring learning and administrative
    outcomes.  Various assessment tools simplify the
    collection of student work and its evaluation against shared
    rubrics. Surveys and course evaluations enable users to collect
    useful indirect assessment data, soliciting attitudes and
    opinions from on-campus and off-campus constituents.
    Improving learning and institutional
    effectiveness.  Operational and analytic reports
    provide insight into assessment plans, activities, data,
    follow-up
    actions and correlations to all levels of an institution.  Blackboard
    Transact
  Blackboard Transact Blackboard
    Commerce Suite e-commerce
 5




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Blackboard
    Transact, Release 3 and Blackboard Transact, Release
    3.5.
  Blackboard Transact Blackboard Transaction System. Blackboard Transact point-of-sale Blackboard Transact, Release 3 Blackboard Transact, Release 3.5
  
    Commerce.  Transaction processing capabilities
    of Blackboard Transact, Release 3 support the creation
    and management of student closed-loop debit accounts, as well as
    the processing of payments against those accounts using student
    ID cards on and around campus, such as in dining facilities,
    bookstores, and a variety of off-campus and online transactions.
    Micro-payment applications are served as well including vending,
    copy/print machines, and laundry machines. In addition, the
    latest release of the Blackboard Transact platform,
    Release 3.5, offers data and application security
    capabilities that comply with the Payment Application Data
    Security Standard (PA-DSS), allowing clients to host the
    application in a manner which is in line with the Payment Card
    Industry Data Security Standard (PCI-DSS). Our clients use the
    Blackboard Transactcommerce management solution to
    manage
    point-of-sale
    transactions, such as prepaid closed-loop debit cards, meal plan
    administration, cash equivalency, privilege verification and
    discounts, and self-service or unattended transactions, such as
    vending, laundry, printing, copying and parking.
    Activities management and security.  The
    access-rights capabilities of the Blackboard Transactsecurity management solution enable a variety of
    applications using the clients investment in a single-card
    environment for commerce. These include event admission, student
    government voting, wireless eligibility verification on buses,
    library authorization and computer lab access and tracking. In
    addition, the system interfaces directly with door access points
    to manage identification and secure access control to facilities
    using the same student ID card. With Release 3.5, the
    Blackboard Transact security management solution offers
    improved operational and security features, including a user
    interface with web-like search capability and access control
    that integrates completely with Blackboard Video
    Surveillancetm.  Blackboard
    Transact  Community Engagement
  Blackboard Learn Community Engagement Blackboard Transact
  
    eMarketplace.  The Community Engagementmodule enables campus business units and student
    organizations to sell products which may be paid for with the
    student debit account. Users can activate template-driven tools
    that allow them to describe, price, display and charge for an
    item, all within the campus portal environment. Examples include
    campus bookstore online purchases, athletics and event tickets,
    library fees and parking fees.
    Web account management.  Through an online
    account, end users can manage a variety of activities, including
    online deposits, guest and parent deposits, balance inquiries,
    transaction history statements and lost and stolen card reports.  Blackboard
    Transact  BbOne
  Bb Blackboard Transact
 6




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Blackboard Transact Bb
  Blackboard
    Connect
  Blackboard Connect Blackboard Connect Blackboard
    Connect e-mail, Blackboard Connect
  Blackboard
    Mobile
  Blackboard Mobile Mobile Central MobilEdutm Mobile Central
  Mobile Central Mobile
    Central ® ® ® ® Mobile Central
  Professional
    Services
    
    project management;
    integration of our applications with existing campus systems;
    user interface customization;
    installation and configuration;
    training and instructional design;
    course and content migration;
    custom Blackboard Building Blocksand Blackboard
    PowerLinksapplication development; and
    functional consulting relating to on-line learning and
    associated business processes.  Competition
  Blackboard Learn
 7




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Blackboard Transact Blackboard Connect
      
    base of reference clients;
    functional breadth and depth of solution offered;
    ease of use;
    complexity of installation and upgrade;
    scalability of solution to meet growing needs;
    client service;
    availability of third-party application and content add-ons;
    total cost of ownership;
    financial stability; and
    company reputation.    Our
    Growth Strategy
    
    Growing annual license revenues.  We intend to
    increase annual license revenues with existing clients through
    upgrades to current products, cross-selling of complementary
    applications and increased total license value commensurate with
    the value of our offerings.
    Increasing penetration with U.S. postsecondary and K-12
    clients.  We intend to capitalize on our
    experience in U.S. postsecondary and K-12 education to
    further enhance our leadership position.
    Offering new products to our target
    markets.  Using feedback gathered from our clients
    and our sales and technical support groups, we intend to
    continue to develop and offer new upgrades, applications and
    application suites to increase our presence on campuses and
    expand the value provided to our clients. 8




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
    Increasing sales in our emerging markets.  We
    intend to continue to expand sales and marketing efforts to
    increase sales of our various offerings within the less mature
    domestic and international markets we serve.
    Pursuing strategic relationships and acquisition
    opportunities.  We intend to continue to pursue
    strategic relationships with, acquisitions of, and investments
    in, companies that would enhance the technological features of
    our products, offer complementary products, services and
    technologies, or broaden the scope of our product offerings into
    other areas.  Research
    and Development
    Marketing
    and Sales
  Marketing
  ® tm
  Sales
     9




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Intellectual
    Property
    Executive
    Officers
    Name

Age

PositionMichael L. Chasen


38


Chief executive officer, president, directorMichael J. Beach


39


Chief financial officerMatthew H. Small


37


Chief business officer, chief legal officer and secretaryJudy Verses


52


Chief client officer, president of sales and marketingJonathan R. Walsh


37


Vice president for finance and accounting   Michael Chasen
  Michael Beach
  Matthew Small
  Judy Verses
  Jonathan Walsh
 10




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Employees
    International
    Operations
    Website
    Access to U.S. Securities and Exchange Commission
    Reports
  http://www.blackboard.com. Form 10-K, Form 10-Q, Form 8-K http://www.sec.gov 1-800-SEC-0330.
  Item 1A.
    Risk
    Factors.  Challenging
    economic conditions may adversely affect our
    business.
    We
    could lose revenues if there are changes in the spending
    policies or budget priorities for government funding of
    colleges, universities, schools and other education
    providers.
   11




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Our
    investments in product development and product acquisition may
    not be successful; if our products do not gain market
    acceptance, our revenues may decrease and we may not realize a
    return on such investments.
  Blackboard Learn Blackboard Learn
  Blackboard Connect Blackboard Mobile Blackboard Connect Blackboard Mobile
  We
    face intense and growing competition, which could result in
    price reductions, reduced operating margins and loss of market
    share.
    Blackboard Learn Blackboard Transact Blackboard Connect
 12




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If
    potential clients or competitors use open source software to
    develop products that are competitive with our products and
    services, we may face decreased demand and pressure to reduce
    the prices for our products.
    Our
    recent acquisition transactions present many risks, and we may
    not realize the financial and strategic goals that were
    contemplated at the time of the transactions.
    
    we may not realize the anticipated financial benefits if we are
    unable to sell the acquired products to our current or future
    customers, if a larger than predicted number of customers
    decline to renew their contracts, or if the acquired contracts
    do not allow us to recognize revenues on a timely basis;
    we may have difficulty incorporating the acquired technologies
    or products with our existing product lines and maintaining
    uniform standards, controls, procedures and policies;
    we may face contingencies related to product liability,
    intellectual property, financial disclosures, and accounting
    practices or internal controls;
    we may have higher than anticipated costs in supporting and
    continuing development of the acquired company products and in
    servicing new and existing clients of a company we acquire;
    we may not be able to retain key employees from the companies we
    acquire;
    the increased size and complexity of the combined company after
    our acquisitions may present operational challenges; and
    we may lose anticipated tax benefits or have additional legal or
    tax exposures. 13




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Our
    business strategy contemplates future business combinations and
    acquisitions which may be difficult to integrate, disrupt our
    business, dilute stockholder value or divert management
    attention.
          Our
    existing indebtedness could adversely affect our financial
    condition and we may not be able to fulfill our debt
    obligations, including the Notes.
    
    upon conversion or redemption of the Notes, we will be required
    to repay the principal amount of $165.0 million in cash;
    we will use a significant portion of our cash flow to pay
    interest on our outstanding debt, limiting the amount available
    for working capital, capital expenditures and other general
    corporate purposes;
    lenders may be unwilling to lend additional amounts to us for
    future working capital needs, additional acquisitions or other
    purposes or may only be willing to provide funding on terms we
    would consider unacceptable;
    if our cash flow were inadequate to make interest and principal
    payments on our debt, we might have to refinance our
    indebtedness or issue additional equity or other securities and
    may not be successful in those efforts or may not obtain terms
    favorable to us; and
    our ability to finance working capital needs and general
    corporate purposes for the public and private markets, as well
    as the associated cost of funding, is dependent, in part, on our
    credit ratings, which may be adversely affected if we experience
    declining revenues.   14




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We may
    not be able to repurchase the Notes when required by the
    holders, including upon a defined fundamental change or other
    specified dates at the option of the holder, or pay cash upon
    conversion of the Notes.
    Conversion
    of the Notes may affect the market price of our common stock and
    may dilute the ownership of existing stockholders.
    Our
    reported earnings per share may be more volatile because of the
    contingent conversion provision of the Notes.
    Because
    most of our licenses are renewable on an annual basis, a
    reduction in our license renewal rate could significantly reduce
    our revenues.
     15




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Because
    we generally recognize revenues ratably over the term of our
    contract with a client, downturns or upturns in sales will not
    be fully reflected in our operating results until future
    periods.
    Our
    operating margins may suffer if our professional services
    revenues increase in proportion to total revenues because our
    professional services revenues have lower gross
    margins.
    If our
    products contain errors, new product releases are delayed or our
    services are disrupted, we could lose new sales and be subject
    to significant liability claims.
    
    delays in or loss of market acceptance of our products;
    diversion of our resources;
    a lower rate of license renewals or upgrades;
    injury to our reputation; and
    increased service expenses or payment of damages.   16




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The
    length and unpredictability of the sales cycle for our software
    could delay new sales and cause our revenues and cash flows for
    any given quarter to fail to meet our projections or market
    expectations.
    
    clients budgetary constraints and priorities;
    the timing of our clients budget cycles;
    the need by some clients for lengthy evaluations that often
    include both their administrators and faculties; and
    the length and timing of clients approval processes.    Our
    sales cycle with international postsecondary education providers
    and U.S. K-12 schools may be longer than our historical U.S.
    postsecondary sales cycle, which could cause us to incur greater
    costs and could reduce our operating margins.
    We may
    have exposure to greater than anticipated tax
    liabilities.
    Our
    ability to utilize our net operating loss carryforwards may be
    limited.
   17




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The
    investment of our cash balances are subject to risks which may
    cause losses and affect the liquidity of these
    investments.
  other-than-temporary,
  Our
    future success depends on our ability to continue to retain and
    attract qualified employees.
    If we
    do not maintain the compatibility of our products with
    third-party applications that our clients use in conjunction
    with our products, demand for our products could
    decline.
    If we
    are unable to obtain sufficient quantities of the hardware
    products we sell in a timely manner, our sales could
    decline.
  Blackboard Transact
  If we
    are unable to protect our proprietary technology and other
    rights, it will reduce our ability to compete for
    business.
   18




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If we
    are found to have infringed the proprietary rights of others, we
    could be required to redesign our products, pay significant
    royalties or enter into license agreements with third
    parties.
    
    be expensive and time consuming to defend;
    force us to stop licensing our products that incorporate the
    challenged intellectual property;
    require us to redesign our products and reimburse certain costs
    to our clients;
    divert managements attention and other company
    resources; and
    require us to enter into royalty or licensing agreements in
    order to obtain the right to use necessary technologies, which
    may not be available on terms acceptable to us, or at all.  The
    nature of our business and our reliance on intellectual property
    and other proprietary information subjects us to the risks of
    litigation.
    Expansion
    of our business internationally will subject our business to
    additional economic and operational risks that could increase
    our costs and make it difficult for us to operate
    profitably.
    
    foreign currency fluctuations, which could result in reduced
    revenues and increased operating expenses;
    potentially longer payment and sales cycles;
    difficulty in collecting accounts receivable; 19




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
    the effect of applicable foreign tax structures, including tax
    rates that may be higher than tax rates in the United States or
    taxes that may be duplicative of those imposed in the United
    States;
    tariffs and trade barriers;
    general economic and political conditions in each country;
    inadequate intellectual property protection in foreign countries;
    uncertainty regarding liability for information retrieved and
    replicated in foreign countries;
    the difficulties and increased expenses of complying with a
    variety of foreign laws, regulations and trade
    standards; and
    unexpected changes in regulatory requirements.  Unauthorized
    disclosure of data, whether through breach of our computer
    systems or otherwise, could expose us to protracted and costly
    litigation or cause us to lose clients.
    Operational
    failures in our network infrastructure could disrupt our remote
    hosting services, could cause us to lose clients and sales to
    potential clients and could result in increased expenses and
    reduced revenues.
   20




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U.S.
    and foreign government regulation of our products and services
    could cause us to incur significant expenses, and failure to
    comply with applicable regulations could make our business less
    efficient or even impossible.
    We may
    be subject to state and federal financial services regulation,
    and any violation of any present or future regulation could
    expose us to liability, force us to change our business
    practices or force us to stop selling or modify our products and
    services.
  Blackboard Transact
  
    disclosure of consumer rights and our business policies and
    practices;
    restrictions on uses and disclosures of customer information;
    error resolution procedures;
    limitations on consumers liability for unauthorized
    account activity;
    data security requirements;
    government registration; and
    reporting and documentation requirements.    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.   21




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Item 3.
    Legal
    Proceedings.        Item 4.
    Submission
    of Matters to a Vote of Security Holders.   22




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    High


LowYear Ended December 31, 2008:First Quarter

$
39.16


$
27.12Second Quarter


39.69



31.86Third Quarter


43.62



34.81Fourth Quarter


39.60



19.76Year Ended December 31, 2009:First Quarter

$
32.70


$
23.00Second Quarter


34.03



27.45Third Quarter


37.92



27.55Fourth Quarter


46.30



35.47          23




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##### Table of Contents



STOCK
    PERFORMANCE GRAPH
    COMPARISON
    OF CUMULATIVE TOTAL RETURN
    AMONG BLACKBOARD INC.,
    NASDAQ MARKET INDEX AND SIC CODE INDEX
  
 Assumes $100 invested on Dec. 31, 2004
 Assumes dividend reinvested
 Fiscal year ending Dec. 31, 2009
  12/31/2004


12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009Blackboard Inc.


$
100.00



$
195.68



$
202.84



$
271.78



$
177.11



$
306.48NASDAQ Market Index



100.00




102.20




112.68




124.57




74.71




108.56SIC Code Index



100.00




98.45




113.00




132.72




79.50




119.46   (1)
    
    This graph is not soliciting material, is not deemed
    filed with the SEC and is not to be incorporated by reference in
    any filing by us under the Securities Act of 1933, as amended
    (the Securities Act), or the Exchange Act, whether
    made before or after the date hereof and irrespective of any
    general incorporation language in any such filing.(2)
    
    The stock price performance shown on the graph is not
    necessarily indicative of future price performance. Information
    used in the graph was obtained from Morningstar Inc., a source
    we believe to be reliable, but we do not assume responsibility
    for any errors or omissions in such information. 24




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    Year Ended December 31,2005


2006


2007


2008


2009(As adjusted(1))


(As adjusted(1))(In thousands, except per share amounts)Statement of operations data:Revenues:Product

$
120,389


$
160,392


$
213,631


$
283,258


$
342,144Professional services


15,275



22,671



25,817



28,876



34,856Total revenues


135,664



183,063



239,448



312,134



377,000Operating expenses:Cost of product revenues, excludes $0, $9,333, $11,654, $17,803
    and $10,649 respectively, of amortization of acquired technology
    included in amortization of intangibles resulting from
    acquisitions shown below(2)


29,607



39,594



47,444



75,237



90,968Cost of professional services revenues(2)


10,220



16,001



16,941



19,555



20,024Research and development(2)


13,945



27,162



28,278



40,580



45,967Sales and marketing(2)


37,873



58,340



66,033



91,076



98,751General and administrative(2)


19,306



35,823



38,667



50,757



56,387Patent (proceeds) impairment and other costs














(3,313
)


10,984Amortization of intangibles resulting from acquisitions


266



17,969



22,122



37,866



34,994Total operating expenses


111,217



194,889



219,485



311,758



358,075Income (loss) from operations


24,447



(11,826
)


19,963



376



18,925Interest income (expense), net


3,097



(2,974
)


(2,479
)


(10,168
)


(11,769
)Other (expense) income






(519
)


575



4,124



1,453Income (loss) before (benefit) provision for income taxes


27,544



(15,319
)


18,059



(5,668
)


8,609(Benefit) provision for income taxes


(14,309
)


(4,582
)


7,580



(3,732
)


697Net income (loss)

$
41,853


$
(10,737
)

$
10,479


$
(1,936
)

$
7,912(1) On January 1, 2009, we adopted new accounting
    guidance for convertible debt instruments which required
    adjustment of prior periods. See Note 7 of notes to the
    consolidated financial statements. 25




---



##### Table of Contents



Year Ended December 31,2005


2006


2007


2008


2009(As adjusted(1))


(As adjusted(1))(In thousands, except per share amounts)Net income (loss) per common share:Basic

$
1.57


$
(0.39
)

$
0.36


$
(0.06
)

$
0.25Diluted

$
1.47


$
(0.39
)

$
0.35


$
(0.06
)

$
0.24Weighted average number of common shares:Basic


26,715



27,858



28,789



30,886



32,066Diluted


28,510



27,858



30,114



30,886



33,101(2) Includes the following amounts related to stock-based
    compensation:Cost of product revenues

$



$
386


$
672


$
949


$
1,225Cost of professional services revenues






524



631



321



524Research and development






733



467



777



1,018Sales and marketing






2,951



4,359



5,984



6,101General and administrative


75



3,462



5,914



7,096



7,091     December 31,2005


2006


2007


2008


2009(As adjusted (1))


(As adjusted (1))(In thousands)Balance sheet data:Cash and cash equivalents

$
75,895


$
30,776


$
206,558


$
141,746


$
167,353Short-term investments


62,602















Working capital (deficit)


93,388



(36,976
)


125,286



43,300



44,820Total assets


224,188



307,299



496,912



637,441



724,934Deferred revenues, current portion


74,975



117,972



126,600



166,727



186,702Total debt






23,623



143,556



149,923



156,177Total stockholders equity


130,325



140,121



194,273



273,475



331,472     (1)
    
    On January 1, 2009, we adopted new accounting guidance for
    convertible debt instruments which required adjustment of prior
    periods. See Note 7 of notes to the consolidated financial
    statements. 26




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  You should read the following discussion together with our
    consolidated financial statements and the related notes included
    elsewhere in this annual report. This discussion contains
    forward-looking statements that are based on our current
    expectations, estimates and projections about our business and
    operations. Our actual results may differ materially from those
    currently anticipated and expressed in such forward-looking
    statements as a result of a number of factors, including those
    we discuss under Item 1A Risk Factors and
    elsewhere in this annual report.
  General
      time-and-materials
  Blackboard Connect e-learning Blackboard Mobile. Blackboard Mobile
  Blackboard
    Learntm Blackboard
    Transacttm Blackboard
    Connecttm Blackboard
    Mobile tm
  Blackboard Learn Blackboard Transact Blackboard Connect Blackboard Mobile Blackboard
    Learn
 27




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##### Table of Contents



Blackboard
    Connect
           28




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
      Revenue recognition.
      Blackboard
    Transact
  set-up
   29




---



##### Table of Contents



time-and-materials
  when-and-if-available
  Allowance for doubtful accounts.
  Fair Value Measurements.
              Business combinations.
 30




---



##### Table of Contents



Long-lived assets.
  Goodwill and intangible assets.
    Notes payable.
   31




---



##### Table of Contents



Year Ended December 31, 2007IncrementalAs Previously


ImpactReported


of Adoption


As AdjustedInterest expense

$
(5,766
)

$
(2,386
)

$
(8,152
)Provision (benefit) for income taxes


7,580







7,580Net income (loss)


12,865



(2,386
)


10,479Net income (loss) per common share:Basic

$
0.45


$
(0.09
)

$
0.36Diluted

$
0.43


$
(0.08
)

$
0.35   Year Ended December 31, 2008IncrementalAs Previously


ImpactReported


of Adoption


As AdjustedInterest expense

$
(7,305
)

$
(4,756
)

$
(12,061
)Provision (benefit) for income taxes


(3,732
)






(3,732
)Net income (loss)


2,820



(4,756
)


(1,936
)Net income (loss) per common share:Basic

$
0.09


$
(0.15
)

$
(0.06
)Diluted

$
0.09


$
(0.15
)

$
(0.06
)   32




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##### Table of Contents



Year Ended December 31, 2009Balance Before


IncrementalIncremental Impact


Impactof New Standard


of Adoption


As ReportedInterest expense

$
(6,908
)

$
(5,091
)

$
(11,999
)Provision (benefit) for income taxes


697







697Net income (loss)


13,003



(5,091
)


7,912Net income (loss) per common share:Basic

$
0.41


$
(0.16
)

$
0.25Diluted

$
0.39


$
(0.15
)

$
0.24     December 31, 2008


December 31, 2009Balance BeforeIncremental





Incremental


IncrementalAs Previously


Impact





Impact of New


ImpactReported


of Adoption


As Adjusted


Standard


of Adoption


As ReportedPrepaid expenses and other current assets

$
8,518


$
(157
)

$
8,361


$
14,945


$
(142
)

$
14,803Deferred tax assets


28,942



(8,249
)


20,693



29,129



(8,249
)


20,880Notes payable, net of debt discount


163,172



(13,249
)


149,923



164,335



(8,158
)


156,177Additional paid-in capital


344,698



11,985



356,683



394,766



11,985



406,751Accumulated deficit


(76,380
)


(7,142
)


(83,522
)


(63,377
)


(12,233
)


(75,610
)     Income Taxes.
      Stock-Based Compensation.
 33




---



##### Table of Contents



Recent Accounting Pronouncements.
    Blackboard
    Transact
  Important
    Factors Considered by Management
        
    Recurring ratable revenues include those product revenues that
    are recognized ratably over the contract term, which is
    typically one year, and that recur each year assuming clients
    renew their contracts. These revenues include revenues from the
    licensing of all of our software products, hosting arrangements,
    subscription fees from customers accessing our on-demand
    application services and enhanced support and maintenance
    contracts related to our software products, including some
    professional services performed by our professional services
    groups.
    Non-recurring ratable revenues include those product revenues
    that are recognized ratably over the term of the contract, which
    is typically one year, but that do not contractually recur.
    These revenues include some hardware components of our
    Blackboard Transactproducts and some third-party
    hardware and software we sell to our clients in conjunction with
    our software licenses. 34




---



##### Table of Contents




    Other revenues include those revenues that are recognized as
    earned and are not deferred to future periods. These revenues
    include professional services, the sales of BbOne, sales
    of licenses, as well as the supplies and commissions we earn
    from publishers related to digital course supplement downloads.    Blackboard
    Transact
           35




---



##### Table of Contents



Results
    of Operations
    Year EndedDecember 31,2007


2008


2009Revenues:Product


89
%


91
%


91
%Professional services


11



9



9Total revenues


100



100



100Operating expenses:Cost of product revenues


20



24



24Cost of professional services revenues


7



6



6Research and development


12



13



12Sales and marketing


28



29



26General and administrative


16



17



15Patent (proceeds) impairment and other costs






(1
)


3Amortization of intangibles resulting from acquisitions


9



12



9Total operating expenses


92



100



95Operating margin


8
%


0
%


5
%     Year EndedDecember 31,2007


2008


2009Cost of product revenues


22
%


27
%


27
%Cost of professional services revenues


66
%


68
%


57
%   Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
      Year Ended December 31,2008


2009Product


Professional





Product


ProfessionalRevenues


Services Revenues


Total


Revenues


Services Revenues


Total(In millions)(Unaudited)Recurring ratable revenues

$
244.5


$
3.7


$
248.2


$
299.7


$
7.4


$
307.1Non-recurring ratable revenues


25.6







25.6



24.4



1.4



25.8Other revenues


13.1



25.2



38.3



18.0



26.1



44.1Total revenues

$
283.3


$
28.9


$
312.1


$
342.1


$
34.9


$
377.0   Product revenues.
 36




---



##### Table of Contents



Blackboard Connect Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn Blackboard Learn
    Blackboard Connect Blackboard Learn
  Professional services revenues. Blackboard Connect
  Cost of product revenues. Blackboard Connect
   37




---



##### Table of Contents



Cost of professional services revenues.
  Research and development expenses.
  Sales and marketing expenses.
  General and administrative expenses.
  Patent (proceeds) impairment and other
    costs.
  Amortization of intangibles resulting from
    acquisitions.
 38




---



##### Table of Contents



Net interest expense.
  Other income.
      Provision (benefit) for income taxes.
  Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
      2007


2008Product


Professional





Product


ProfessionalRevenues


Services Revenues


Total


Revenues


Services Revenues


Total(In millions)(Unaudited)Recurring ratable revenues

$
179.6


$
3.3


$
182.9


$
244.5


$
3.7


$
248.2Non-recurring ratable revenues


21.7







21.7



25.6







25.6Other revenues


12.3



22.5



34.8



13.1



25.2



38.3Total revenues

$
213.6


$
25.8


$
239.4


$
283.3


$
28.9


$
312.1  39




---



##### Table of Contents



Product revenues. Blackboard
    Connect Blackboard Learning System Blackboard Learning System Blackboard Learning System Blackboard
    Learning System Blackboard
    Learning System Blackboard Learning System Blackboard Learning System Blackboard Learning
    System Blackboard Learning System
  Blackboard Commerce Suite
    Blackboard Academic Suite
  Professional services revenues.
  Cost of product revenues. Blackboard Connect
 40




---



##### Table of Contents



Cost of professional services revenues.
  Research and development expenses.
  Sales and marketing expenses.
  General and administrative expenses.
  Patent (proceeds) impairment and other
    costs.
  Net interest expense.
  Other income.
 41




---



##### Table of Contents



Provision (benefit) for income taxes.
  Quarterly
    Results
      Quarter EndedMarch 31,


June 30,


September 30,


December 31,2008


2008


2008


2008(In thousands)Total revenues

$
68,475


$
75,547


$
83,090


$
85,022Total operating expenses


72,942



74,718



81,658



82,440(Loss) income from operations


(4,467
)


829



1,432



2,582Net (loss) income


(4,444
)


(134
)


885



1,757Net cash (used in) provided by operating activities


(6,055
)


1,209



60,264



24,417   42




---



##### Table of Contents



Quarter EndedMarch 31,


June 30,


September 30,


December 31,2009


2009


2009


2009(In thousands)Total revenues

$
86,448


$
92,110


$
98,408


$
100,034Total operating expenses


83,166



96,538



89,415



88,956Income (loss) from operations


3,282



(4,428
)


8,993



11,078Net (loss) income


(37
)


(4,072
)


4,307



7,714Net cash provided by operating activities


4,386



9,468



75,956



20,041     Liquidity
    and Capital Resources
  Changes
    in Cash and Cash Equivalents
         43




---



##### Table of Contents



Notes
    Payable
      in-the-money
       44




---



##### Table of Contents



Working
    Capital Needs
    Off-Balance
    Sheet Arrangements
    Obligations
    and Commitments
    Interest onNotes


Notes


OperatingPayable


Payable


Leases(In thousands)2010

$



$
2,659


$
11,0502011


165,000



5,201



10,1042012










10,4952013










10,6822014










9,4022015 and beyond










29,399Total

$
165,000


$
7,860


$
81,132       Seasonality
   45




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk     46




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


48Consolidated Balance Sheets as of
    December 31, 2008 and 2009


49Consolidated Statements of Operations for the
    years ended December 31, 2007, 2008 and 2009


50Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2007, 2008 and
    2009


51Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2008 and 2009


52Notes to Consolidated Financial Statements


53   47




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           14-1,
  Internal Control-Integrated Framework
      48




---



##### Table of Contents



BLACKBOARD
    INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2008


2009(As adjusted(1))(In thousands, except share and per share data)Current assets:Cash and cash equivalents

$
141,746


$
167,353Accounts receivable, net of allowance for doubtful accounts of
    $926 and $1,184, respectively


80,018



69,098Inventories


1,783



1,557Prepaid expenses and other current assets


8,361



14,803Deferred tax asset, current portion


1,796



2,692Deferred cost of revenues


7,126



7,664Total current assets


240,830



263,167Deferred tax asset, noncurrent portion


18,897



18,188Investment in common stock warrant


1,990



3,124Restricted cash


4,249



3,923Property and equipment, net


31,950



34,483Other assets


549



1,453Goodwill


263,850



329,287Intangible assets, net


75,126



71,309Total assets

$
637,441


$
724,934Current liabilities:Accounts payable

$
2,579


$
2,360Accrued expenses


27,879



28,264Deferred rent, current portion


345



1,021Deferred revenues, current portion


166,727



186,702Total current liabilities


197,530



218,347Convertible senior notes, net of debt discount of $15,077 and
    $8,823, respectively


149,923



156,177Deferred rent, noncurrent portion


10,959



11,507Deferred tax liability






1,474Deferred revenues, noncurrent portion


5,554



5,957Total liabilities


363,966



393,462Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value; 5,000,000 shares
    authorized, and no shares issued or outstanding






Common stock, $0.01 par value; 200,000,000 shares
    authorized; 31,359,738 and 33,100,139 shares issued and
    outstanding, respectively


314



331Additional paid-in capital


356,683



406,751Accumulated deficit


(83,522
)


(75,610
)Total stockholders equity


273,475



331,472Total liabilities and stockholders equity

$
637,441


$
724,934     (1)
    
    On January 1, 2009, the Company adopted new accounting
    guidance for convertible debt instruments which required
    adjustment of prior periods. See Note 7 of notes to the
    consolidated financial statements.   49




---



##### Table of Contents



BLACKBOARD
    INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2008


2009(As adjusted(1))


(As adjusted(1))(In thousands, except share and per share data)Revenues:Product

$
213,631


$
283,258


$
342,144Professional services


25,817



28,876



34,856Total revenues


239,448



312,134



377,000Operating expenses:Cost of product revenues, excludes $11,654, $17,803 and $10,649,
    respectively, in amortization of acquired technology included in
    amortization of intangibles resulting from acquisitions shown
    below(2)


47,444



75,237



90,968Cost of professional services revenues(2)


16,941



19,555



20,024Research and development(2)


28,278



40,580



45,967Sales and marketing(2)


66,033



91,076



98,751General and administrative(2)


38,667



50,757



56,387Patent (proceeds) impairment and other costs






(3,313
)


10,984Amortization of intangibles resulting from acquisitions


22,122



37,866



34,994Total operating expenses


219,485



311,758



358,075Income from operations


19,963



376



18,925Other (expense) income, net:Interest expense


(8,152
)


(12,061
)


(11,999
)Interest income


5,673



1,893



230Other income


575



4,124



1,453Income (loss) before provision (benefit) for income taxes


18,059



(5,668
)


8,609Provision (benefit) for income taxes


7,580



(3,732
)


697Net income (loss)

$
10,479


$
(1,936
)

$
7,912Net income (loss) per common share:Basic

$
0.36


$
(0.06
)

$
0.25Diluted

$
0.35


$
(0.06
)

$
0.24Weighted average number of common shares:Basic


28,789,083



30,885,908



32,065,700Diluted


30,113,621



30,885,908



33,100,858(2) Includes the following amounts related to stock-based
    compensation:Cost of product revenues

$
672


$
949


$
1,225Cost of professional services revenues


631



321



524Research and development


467



777



1,018Sales and marketing


4,359



5,984



6,101General and administrative


5,914



7,096



7,091     (1)
    
    On January 1, 2009, the Company adopted new accounting
    guidance for convertible debt instruments which required
    adjustment of prior periods. See Note 7 of notes to the
    consolidated financial statements.   50




---



##### Table of Contents



BLACKBOARD
    INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
   Additional





TotalCommon Stock


Paid-In


Accumulated


StockholdersShares


Amount


Capital


Deficit


Equity(As adjusted(1))


(As adjusted(1))


(As adjusted(1))(In thousands, except share and per share data)Balance at December 31, 2006


28,248,214


$
282


$
231,331


$
(91,492
)

$
140,121Impact of adoption of ASC 740 (formerly FIN 48)














(573
)


(573
)Issuance of convertible debt instruments










11,985







11,985Issuance of common stock upon exercise of options


948,593



10



13,363







13,373Excess tax benefits from exercise of stock options










6,845







6,845Stock-based compensation expense










12,043







12,043Net income














10,479



10,479Balance at December 31, 2007


29,196,807


$
292


$
275,567


$
(81,586
)

$
194,273Issuance of common stock upon exercise of options


584,593



6



11,147







11,153Issuance of common stock upon NTI merger


1,508,338



15



52,736







52,751Issuance of restricted stock


70,000



1



(1
)






Excess tax benefits from exercise of stock options










2,107







2,107Stock-based compensation expense










15,127







15,127Net loss














(1,936
)


(1,936
)Balance at December 31, 2008


31,359,738


$
314


$
356,683


$
(83,522
)

$
273,475Issuance of common stock upon exercise of options


1,167,951



11



24,484







24,495Issuance of common stock upon ANGEL merger


469,028



5



13,886







13,891Issuance of restricted stock


324,000



3



(3
)






Treasury shares retired


(220,578
)


(2
)


(7,987
)






(7,989
)Excess tax benefits from exercise of stock options










3,729







3,729Stock-based compensation expense










15,959







15,959Net income














7,912



7,912Balance at December 31, 2009


33,100,139


$
331


$
406,751


$
(75,610
)

$
331,472     (1)
    
    On January 1, 2009, the Company adopted new accounting
    guidance for convertible debt instruments which required
    adjustment of prior periods. See Note 7 of notes to the
    consolidated financial statements.   51




---



##### Table of Contents



BLACKBOARD
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
   Year Ended December 31,2007


2008


2009(As adjusted(1))


(As adjusted(1))(In thousands)Cash flows from operating activitiesNet income (loss)

$
10,479


$
(1,936
)

$
7,912Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Deferred tax benefit


(2,830
)


(8,113
)


(5,889
)Excess tax benefits from exercise of stock options


(6,845
)


(2,107
)


(3,729
)Amortization of debt discount


4,110



6,366



6,254Depreciation and amortization


10,681



15,703



18,887Amortization of intangibles resulting from acquisitions


22,122



37,866



34,994Change in allowance for doubtful accounts


(2
)


161



258Stock-based compensation


12,043



15,127



15,959Patent impairment










7,447Gain on investment in common stock warrant






(3,980
)


(1,134
)Changes in operating assets and liabilities, net of effect of
    acquisitions:Accounts receivable


(225
)


(19,210
)


13,371Inventories


288



306



226Prepaid expenses and other current assets


(1,117
)


(2,696
)


(6,404
)Deferred cost of revenues


372



(249
)


(538
)Accounts payable


952



(4,018
)


(277
)Accrued expenses


9,394



4,227



4,127Deferred rent


1,101



9,675



1,224Deferred revenues


8,834



32,713



17,163Net cash provided by operating activities


69,357



79,835



109,851Cash flows from investing activitiesPurchases of property and equipment


(16,023
)


(24,007
)


(18,946
)Payments for capitalized patent enforcement costs


(4,186
)


(3,552
)


(414
)Proceeds from sale of investment in common stock warrant






1,990



Purchases of
    available-for-sale
    securities


(94,250
)






(6,586
)Sales of
    available-for-sale
    securities


94,250







6,586Acquisitions, net of cash acquired


(27,664
)


(132,992
)


(93,434
)Net cash used in investing activities


(47,873
)


(158,561
)


(112,794
)Cash flows from financing activitiesPayments on term loan


(24,400
)






Proceeds from convertible senior notes


160,456







Releases of letters of credit






1,184



3,800Payments on letters of credit


(1,976
)


(530
)


(3,474
)Excess tax benefits from exercise of stock options


6,845



2,107



3,729Proceeds from exercise of stock options


13,373



11,153



24,495Net cash provided by financing activities


154,298



13,914



28,550Net increase (decrease) in cash and cash equivalents


175,782



(64,812
)


25,607Cash and cash equivalents at beginning of year


30,776



206,558



141,746Cash and cash equivalents at end of year

$
206,558


$
141,746


$
167,353Supplemental cash flow informationCash paid for interest

$
3,824


$
5,652


$
5,745Cash paid for income taxes


415



6,243



3,263     (1)
    
    On January 1, 2009, the Company adopted new accounting
    guidance for convertible debt instruments which required
    adjustment of prior periods. See Note 7 of notes to the
    consolidated financial statements.   52




---



##### Table of Contents



BLACKBOARD
    INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2009 1.
    Nature of
    Business and Organization  Blackboard
    Learntm Blackboard
    Transacttm Blackboard
    Connecttm Blackboard
    Mobile tm
  2.
    Significant
    Accounting Policies  Basis
    of Presentation and Consolidation
      Reclassifications
    Use of
    Estimates
    Fair
    Value Measurements
   53




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Quoted Prices in





SignificantActive Markets for


Significant Other


UnobservableDecember 31,


Identical Assets


Observable Inputs


Inputs2009


(Level 1)


(Level 2)


(Level 3)Assets:Cash equivalents(1)

$
137,748


$
137,748


$



$
Investment in common stock warrant


3,124











3,124Total assets

$
140,872


$
137,748


$



$
3,124Liabilities:Convertible senior notes(2)

$
169,125


$
169,125


$



$
     (1)
    
    Cash equivalents consist of money market funds with original
    maturity dates of less than three months for which the fair
    value is based on quoted market prices.(2)
    
    The fair value of the Companys convertible senior notes is
    based on the quoted market price.      Investment inCommon StockWarrantBalance on December 31, 2008

$
Transfers in and/or (out) of Level 3


1,990Total gains (losses) realized / unrealized included in earnings


1,134Purchases, sales, issuances and settlements, net


Balance on December 31, 2009

$
3,124    54




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Restricted
    Cash
    Investment
    in Common Stock Warrant
    Foreign
    Currency Translation
    Concentration
    of Credit Risk
     55




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allowance
    for Doubtful Accounts
      2007


2008


2009(In thousands)Beginning balance

$
767


$
765


$
926Additions


554



531



1,313Reductions


(556
)


(370
)


(1,055
)Ending balance

$
765


$
926


$
1,184   Income
    Taxes
        Inventories
  first-in,
 56




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property
    and Equipment
    Computer and office equipment

3 yearsSoftware

2 to 5 yearsFurniture and fixtures

3 to 5 yearsLeasehold improvements

Shorter of lease term or useful life   Business
    combinations
    Goodwill
    and Intangible Assets
        Useful Lives

MethodAcquired technology

3 years

Straight-lineContracts and customer lists

3 to 5 years

VariousNon-compete agreements

Term of agreement

Straight-lineTrademarks and domain names

3 years

Straight-linePatents and related costs

Life of patent

Straight-line  57




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Impairment
    of Long-Lived Assets
    Revenue
    Recognition and Deferred Revenue
        Blackboard Transact
  set-up
   58




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  time-and-materials
  when-and-if-available
  Cost
    of Revenues and Deferred Cost of Revenues
  Blackboard Connect
    Software
    Development Costs
    Advertising
    Stock
    Options
   59




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2007


2008


2009Dividend yield


0
%


0
%


0
%Expected volatility


44.0
%


40.0
%


47.3
%Average risk-free interest rate


4.53
%


2.78
%


1.88
%Expected term


5.1 years



4.9 years



4.9 yearsForfeiture rate


15.0
%


11.5
%


15.1
%   Dividend yield
  Expected volatility
  Risk-free interest rate
  Expected life of the options
  Forfeiture rate
   60




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restricted
    Stock and Restricted Stock Units
      Basic
    and Diluted Net Income (Loss) per Common Share
      Year Ended December 31,2007


2008


2009(In thousands, except share and per share amounts)Basic net income (loss) per common share:Net income (loss)

$
10,479


$
(1,936
)

$
7,912Weighted average shares outstanding


28,789,083



30,885,908



32,065,700Basic net income (loss) per common share

$
0.36


$
(0.06
)

$
0.25Diluted net income (loss) per common share:Net income (loss)

$
10,479


$
(1,936
)

$
7,912Weighted average basic shares outstanding


28,789,083



30,885,908



32,065,700Dilutive effect of:Stock options related to the purchase of common stock


1,324,538







1,035,158Weighted average diluted shares outstanding


30,113,621



30,885,908



33,100,858Diluted net income (loss) per common share

$
0.35


$
(0.06
)

$
0.24  61




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive
    Net Income (loss)
    Segment
    Information
      Recent
    Accounting Pronouncements
      Blackboard Transact
 62




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Mergers
    and Acquisitions  Terriblyclever
    Design, LLC Asset Purchase
  MobilEdutm, Blackboard Mobile Blackboard
    Mobile
      ANGEL
    Learning, Inc. Merger
    e-learning e-learning.
    Preliminary
    Purchase Price Allocation
   63




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash and cash equivalents

$
6,579Accounts receivable


2,629Prepaid expenses and other current assets


897Property and equipment


2,133Other assets


43Accounts payable


(59
)Other accrued liabilities


(941
)Deferred tax liabilities, net


(8,911
)Deferred revenue


(3,213
)Net tangible liabilities acquired


(843
)Definite-lived intangible assets acquired


36,760Goodwill


65,388Total estimated purchase price

$
101,305          64




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Deferred
    Revenue
  build-up build-up
  Pro
    Forma Financial Information
   65




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008

2009(In thousands, exceptper share amounts) (Unaudited)Total revenues

$
336,193


$
385,163Net (loss) income

$
(9,219
)

$
3,387Basic net (loss) income per common share

$
(0.29
)

$
0.11Diluted net (loss) income per common share

$
(0.29
)

$
0.10   NTI
    Group, Inc. Merger
         66




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Xythos
    Software, Inc. Merger
  Blackboard Content System.
    4.
    Inventories  Inventories
    consist of the following:
  December 31,2008


2009(In thousands)Raw materials

$
678


$
611Work-in-process


547



261Finished goods


558



685Total inventories

$
1,783


$
1,557  67




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Property
    and Equipment  Property
    and equipment consists of the following:
  December 31,2008


2009(In thousands)Computer and office equipment

$
53,052


$
68,060Software


28,479



33,958Furniture and fixtures


1,860



2,322Leasehold improvements


11,425



11,56794,816



115,907Less accumulated depreciation and amortization


(62,866
)


(81,424
)Total property and equipment, net

$
31,950


$
34,483     6.
    Goodwill
    and Intangible Assets    December 31,


Weighted-Average2008


2009


Amortization Period(In thousands)


(In years)Goodwill

$
263,850


$
329,287Acquired technology

$
65,255


$
68,955



2.9Accumulated amortization


(49,199
)


(59,849
)Acquired technology, net


16,056



9,106Contracts and customer lists


94,732



130,675



5.0Accumulated amortization


(43,704
)


(69,388
)Contracts and customer lists, net


51,028



61,287Trademarks and domain names


1,016



1,976



2.3Accumulated amortization


(443
)


(1,105
)Trademarks and domain names, net


573



871Patents and related costs


8,198



101



2.0Accumulated amortization


(729
)


(56
)Patents and related costs, net


7,469



45Intangible assets, net

$
75,126


$
71,309    68




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      7.
    Credit
    Facilities and Notes Payable      in-the-money
   69




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Adoption
    of Accounting Standards
           70




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31, 2007IncrementalAs Previously


Impact ofReported


Adoption


As AdjustedInterest expense

$
(5,766
)

$
(2,386
)

$
(8,152
)Provision (benefit) for income taxes


7,580







7,580Net income (loss)


12,865



(2,386
)


10,479Net income (loss) per common share:Basic

$
0.45


$
(0.09
)

$
0.36Diluted

$
0.43


$
(0.08
)

$
0.35   Year Ended December 31,  2008IncrementalAs Previously


Impact ofReported


Adoption


As AdjustedInterest expense

$
(7,305
)

$
(4,756
)

$
(12,061
)Provision (benefit) for income taxes


(3,732
)






(3,732
)Net income (loss)


2,820



(4,756
)


(1,936
)Net income (loss) per common share:Basic

$
0.09


$
(0.15
)

$
(0.06
)Diluted

$
0.09


$
(0.15
)

$
(0.06
)   Year Ended December 31,  2009Balance Before


IncrementalIncremental Impact


Impact ofof New Standard


Adoption


As ReportedInterest expense

$
(6,908
)

$
(5,091
)

$
(11,999
)Provision (benefit) for income taxes


697







697Net income (loss)


13,003



(5,091
)


7,912Net income (loss) per common share:Basic

$
0.41


$
(0.16
)

$
0.25Diluted

$
0.39


$
(0.15
)

$
0.24  71




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2008


December 31, 2009Balance BeforeIncremental





Incremental


IncrementalAs Previously


Impact of





Impact of New


Impact ofReported


Adoption


As Adjusted


Standard


Adoption


As ReportedPrepaid expenses and other current assets

$
8,518


$
(157
)

$
8,361


$
14,945


$
(142
)

$
14,803Deferred tax assets


28,942



(8,249
)


20,693



29,129



(8,249
)


20,880Notes payable, net of debt discount


163,172



(13,249
)


149,923



164,335



(8,158
)


156,177Additional paid-in capital


344,698



11,985



356,683



394,766



11,985



406,751Accumulated deficit


(76,380
)


(7,142
)


(83,522
)


(63,377
)


(12,233
)


(75,610
)     8.
    Stock
    Incentive Plan     72




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Options
    Number of


Weighted Average


Aggregate


Weighted AverageShares


Price/Share


Intrinsic Value


Remaining Life(In years)Outstanding at December 31, 2006


3,922,045


$
18.76Granted


1,527,750



35.02Exercised


(948,593
)


14.07Canceled


(255,465
)


26.27Outstanding at December 31, 2007


4,245,737



25.21Granted


1,545,250



32.25Exercised


(576,593
)


19.11Canceled


(350,134
)


30.32Outstanding at December 31, 2008


4,864,260



27.80Granted


1,232,050



30.05Exercised


(1,169,951
)


20.97


$
19,650Canceled


(318,577
)


32.15Outstanding at December 31, 2009


4,607,782



29.83



71,713



5.6Exercisable at December 31, 2009


2,141,431



28.01



37,244



4.7Unvested at December 31, 2009


2,466,351



31.42



34,469



6.4Vested and expected to vest at December 31, 2009


4,384,397



29.73



68,696



5.6     Outstanding Options


Exercisable OptionsWeighted Average


Weighted





WeightedRemaining Life


Average





AverageRange of Exercise Prices

Shares


(Years)


Price


Shares


Price$ 0.02-$ 9.66


205,924



2.20


$
9.42



205,924


$
9.42$ 9.67-$16.99


96,088



4.12



13.43



96,088



13.43$17.00-$26.84


552,376



5.20



22.60



328,667



22.03$26.85-$28.41


638,254



4.25



28.00



365,862



28.03$28.41-$32.13


1,238,077



6.72



29.34



215,235



29.32$32.14-$46.89


1,877,063



5.93



35.99



929,655



35.434,607,782



5.62



29.83



2,141,431



28.01  73




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock and Restricted Stock Units
    Number of


Weighted Average


Aggregate


Weighted AverageShares


Price/Share


Intrinsic Value


Remaining Life(In years)Unvested at December 31, 2008


70,000Granted


449,000


$
35.29Vested and issued


(1,250
)Cancelled


(17,500
)


29.07Unvested at December 31, 2009


500,250



34.67


$
22,706



2.4Expected to vest at December 31, 2009


402,312



34.03



18,261



2.2     9.
    Income
    Taxes  paid-in-capital
    Year Ended December 31,2007


2008


2009(In thousands)Current expense

$
2,660


$
2,273


$
3,065Deferred expense (benefit)


4,920



(6,005
)


(2,368
)Provision (benefit) for income taxes

$
7,580


$
(3,732
)

$
697  74




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2009(In thousands)Deferred tax assets:Stock-based compensation expense

$
10,091


$
13,141Domestic net operating loss carry forwards


24,107



13,606International net operating loss carry forwards


684



625Alternative minimum tax and other federal tax credits


5,370



6,131State tax credits


5,241



5,589Depreciation


680



1,163Bad debts


289



310Deferred rent


4,488



4,957Deferred revenues


618



1,061Accrued expenses and other






2,496Total deferred tax assets

$
51,568


$
49,079Valuation allowance


(1,673
)


(2,844
)Net deferred tax assets

$
49,895


$
46,235Deferred tax liabilities:Amortization

$
(16,519
)

$
(17,664
)Deferred cost of revenues


(2,937
)


(3,012
)Unrealized gain on investment in common stock warrant






(1,249
)Interest expense


(8,249
)


(3,294
)Prepaid expenses


(770
)


(1,610
)Accrued expenses and other


(727
)


Total deferred tax liabilities

$
(29,202
)

$
(26,829
)Total net deferred tax assets

$
20,693


$
19,406As reported:Deferred tax asset, current portion

$
1,796


$
2,692Deferred tax asset, noncurrent portion


18,897



18,188Deferred tax liability, noncurrent portion






(1,474
)Total net deferred tax assets

$
20,693


$
19,406  75




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2008


2009(In thousands)Beginning balance

$
5,147


$
1,744


$
1,673Additions


67



1,592



1,251Reductions


(3,470
)


(1,663
)


(80
)Ending balance

$
1,744


$
1,673


$
2,844              76




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2008


2009Federal tax at statutory rates


35.0
%


(35.0
)%


35.0
%State taxes, net of federal benefit


4.8



(4.5
)


4.5Change in valuation allowance


(1.2
)


174.6



13.6Permanent difference  meals and entertainment


3.3



53.0



4.8Permanent difference  executive compensation






4.8



3.9Permanent difference  stock compensation


0 .4



(15.7
)


(4.0
)Permanent difference  other


(0.1
)


10.1



5.7Difference in tax rate  international


(8.3
)


(41.9
)


(33.7
)Difference in tax rate  states


0.3



59.0



1.0Credits not offset by current liability  Research
    credits


(1.6
)


(59.3
)


(22.8
)Credits not offset by current liability  Jobs credits






(590.4
)


(4.8
)Other


4.5



36.2



4.9Provision (benefit) for income taxes


37.1
%


(409.1
)%


8.1
%           December 31,2008


2009(In thousands)Beginning balance

$
573


$
573Increases related to current year tax positions






Expiration of the statute of limitations for the assessment of
    taxes






Ending balance

$
573


$
573  77




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      10.
    Commitments
    and Contingencies      Interest onNotes


Notes


OperatingPayable


Payable


Leases(In thousands)2010

$



$
2,659


$
11,0502011


165,000



5,201



10,1042012










10,4952013










10,6822014










9,4022015 and beyond










29,399Total

$
165,000


$
7,860


$
81,132          78




---



##### Table of Contents



BLACKBOARD
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Employee
    Benefit Plans      12.
    Quarterly
    Financial Information (Unaudited)    Quarter EndedMarch 31,

June 30,

September 30,

December 31,2008

2008

2008

2008(In thousands)Total revenues

$
68,475


$
75,547


$
83,090


$
85,022Total operating expenses


72,942



74,718



81,658



82,440(Loss) income from operations


(4,467
)


829



1,432



2,582Net (loss) income


(4,444
)


(134
)


885



1,757Net cash (used in) provided by operating activities


(6,055
)


1,209



60,264



24,417   Quarter EndedMarch 31,


June 30,


September 30,


December 31,2009


2009


2009


2009(In thousands)Total revenues

$
86,448


$
92,110


$
98,408


$
100,034Total operating expenses


83,166



96,538



89,415



88,956Income (loss) from operations


3,282



(4,428
)


8,993



11,078Net (loss) income


(37
)


(4,072
)


4,307



7,714Net cash provided by operating activities


4,386



9,468



75,956



20,041    79




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  (a)
    Evaluation
    of Disclosure Controls and Procedures.  Rules 13a-15(e) 15d-15(e)
  (b)
    Changes
    in Internal Control over Financial Reporting.  Rules 13a-15(f) 15d-15(f)
 80




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##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rule 13a-15(f).
  Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
    Signature

Title

Date/s/  Michael
    L. ChasenMichael
    L. Chasen

Chief Executive Officer and Director (Principal Executive
    Officer)

February 17, 2010/s/  Michael
    J. BeachMichael
    J. Beach

Chief Financial Officer
    (Principal Financial Officer)

February 17, 2010  81




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
                  82




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##### Table of Contents



Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.      
    Information regarding our directors required by this Item is set
    forth under the heading Election of Directors
    Information regarding our audit committee and designated
    audit committee financial experts is set forth under
    the heading Corporate Governance  The Board of
    Directors and Its Committees  Audit Committee
    Information regarding Section 16(a) beneficial ownership
    reporting compliance is set forth under the heading
    Section 16(a) Beneficial Ownership Reporting
    Compliance
    Information regarding procedures by which security holders may
    recommend nominees to our board of directors set forth under the
    heading Corporate Governance  The Board of
    Directors and Its Committees  Nominating and
    Corporate Governance Committee  Code of
    Ethics
  http://investor.blackboard.com.
  Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accounting Fees and Services.   83




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##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules.    2.
    Financial Statement Schedules.    3.
    Exhibits. The Exhibits filed as part of this Annual Report on
    Form 10-K
    are listed on the Exhibit Index immediately preceding such
    Exhibits, which Exhibit Index is incorporated herein by
    reference.  (b)
    Exhibits  see Item 15(a)(3) above.  (c)
    Financial Statement Schedules  see Item 15(a)(2)
    above. 84




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##### Table of Contents



SIGNATURES
      By:
    /s/  Michael
    J. Beach   Chief Financial Officer
  POWER OF
    ATTORNEY
  Form 10-K
    Signature

Title

Date/s/  Michael
    L. ChasenMichael
    L. Chasen

Chief Executive Officer and Director (Principal Executive
    Officer)

February 17, 2010/s/  Michael
    J. BeachMichael
    J. Beach

Chief Financial Officer
    (Principal Financial Officer)

February 17, 2010/s/  Jonathan
    R. WalshJonathan
    R. Walsh

Vice President, Finance and Accounting (Principal Accounting
    Officer)

February 17, 2010/s/  Matthew
    PittinskyMatthew
    Pittinsky

Chairman of the Board of Directors

February 17, 2010/s/  Joseph
    L. CowanJoseph
    L. Cowan

Director

February 17, 2010/s/  Frank
    R. GattiFrank
    R. Gatti

Director

February 17, 2010/s/  Beth
    KaplanBeth
    Kaplan

Director

February 17, 2010 85




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##### Table of Contents



Signature

Title

Date/s/  Thomas
    KalinskeThomas
    Kalinske

Director

February 17, 2010/s/  E.
    Rogers Novak, Jr.E.
    Rogers Novak, Jr.

Director

February 17, 2010/s/  William
    RaduchelWilliam
    Raduchel

Director

February 17, 2010  86




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber2
.1

Agreement and Plan of Merger, dated as of May 1, 2009, by
    and among Blackboard Inc., Football Merger Sub, Inc., ANGEL
    Learning, Inc. and Christopher D. Clapp in his capacity as the
    Shareholder Representative(5)3
.1

Fourth Restated Certificate of Incorporation of the Registrant(3)3
.2

Amended and Restated By-Laws of the Registrant(3)4
.1

Form of certificate representing the shares of the
    Registrants common stock(2)4
.2

Indenture, dated as of June 20, 2007, between Blackboard
    Inc. and U.S. Bank National Association, as trustee(7)10
.1

Amended and Restated Stock Incentive Plan, as amended(1)10
.2

Amended and Restated 2004 Stock Incentive Plan(11)10
.3*

Employment Agreement between the Registrant and Michael Chasen
    dated September 25, 2009(12)10
.4*

Employment Agreement between the Registrant and Michael Beach,
    dated September 1, 2006(6)10
.5*

Employment Agreement between the Registrant and Matthew H.
    Small, dated January 26, 2004(4)10
.6*

Employment Agreement between the Registrant and Judy Verses,
    dated July 2, 2008 10
.7*

Restricted Stock Unit Agreement between the Registrant and
    Michael Chasen dated October 15, 2009 10
.8*

Amendment to Employment Agreement  Michael J. Beach(9)10
.9*

Amendment to Employment Agreement  Matthew H. Small(9)10
.10*

Amendment to Employment Agreement  Judy Verses 10
.11*

Outside Director Compensation Plan 10
.12

Office Lease Agreement between the Registrant and Washington
    Television Center, dated December 15, 2006(8)10
.13

First Amendment to Office Lease Agreement between the Registrant
    and Washington Television Center, dated June 5, 2007(10)10
.14

Second Amendment to Office Lease Agreement between the
    Registrant and Washington Television Center, dated
    December 2, 2008(10)10
.15

Form of Nonstatutory Stock Option Agreement 10
.16

Form of Restricted Stock Agreement 21
.1

Subsidiaries of the Company 23
.1

Consent of Ernst & Young LLP, independent registered
    public accounting firm 24
.1

Power of Attorney (included on signature page) 31
.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 31
.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 32
.1

Section 906 Principal Executive Officer Certification32
.2

Section 906 Principal Financial Officer Certification      
    
    Filed herewith.
    
    Furnished herewith.*
    
    Indicates a management contract or compensatory plan or
    arrangement.(1)
    
    Previously filed on March 5, 2004 as an exhibit to the
    Registrants Registration Statement on
    Form S-1
    (File
    No. 333-113332),
    and incorporated by reference herein.(2)
    
    Previously filed on May 4, 2004 as an exhibit to Amendment
    No. 2 to the Registrants Registration Statement on
    Form S-1
    (File No.
    333-113332),
    and incorporated by reference herein. 87




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##### Table of Contents



(3)
    
    Previously filed on August 8, 2004 as an exhibit to the
    Registrants Report on
    Form 10-Q,
    and incorporated by reference herein.(4)
    
    Previously filed on May 13, 2005 as an exhibit to the
    Registrants Report on
    Form 10-Q,
    and incorporated by reference herein.(5)
    
    Previously filed on May 6, 2009 as an exhibit to the
    Registrants Report on
    Form 8-K,
    and incorporated by reference herein.(6)
    
    Previously filed on November 9, 2006 as an exhibit to the
    Registrants Report on
    Form 10-Q,
    and incorporated by reference herein.(7)
    
    Previously filed on June 15, 2007 as an exhibit to the
    Registrants Report on
    Form 8-K,
    and incorporated by reference herein.(8)
    
    Previously filed on February 23, 2007 as an exhibit to the
    Registrants Report on
    Form 10-K,
    and incorporated by reference herein.(9)
    
    Previously filed on November 6, 2008 as an exhibit to the
    Registrants Report on
    Form 10-Q,
    and incorporated by reference herein.(10)
    
    Previously filed on February 26, 2009 as an exhibit to the
    Registrants Report on
    Form 10-K,
    and incorporated by reference herein.(11)
    
    Previously filed on April 21, 2009 as part of the
    Registrants Proxy Statement on Schedule DEF 14A, and
    incorporated by reference herein.(12)
    
    Previously filed on September 25, 2009 as an exhibit to the
    Registrants Report on
    Form 8-K,
    and incorporated by reference herein. 88