CEB (CEB) 10-Q 2008 Q3 Quarterly report

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 September 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

(Exact name of registrant as specified in its charter)

Delaware	52-2056410
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
1919 North Lynn Street
Arlington, Virginia	22209
(Address of principal executive offices)	(Zip Code)

(571) 303-3000
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ     No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  o       No  þ

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

The Company had outstanding 34,033,117 shares of common stock, par value $0.01 per share at November 3, 2008.

THE CORPORATE EXECUTIVE BOARD COMPANY
INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2008 and December 31, 2007	3
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2008 and 2007	4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3. Quantitative and Qualitative Disclosures about Market Risk	16
Item 4. Controls and Procedures	17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	17
Item 1A. Risk Factors	17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3. Defaults Upon Senior Securities	18
Item 4. Submission of Matters to a Vote of Security Holders	18
Item 5. Other Information	18
Item 6. Exhibits	18

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

THE CORPORATE EXECUTIVE BOARD COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	September 30,			December 31,
	2008			2007
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	11,432		$	47,585
Marketable securities		28,491			24,153
Membership fees receivable, net		86,220			161,336
Deferred income taxes, net		14,541			12,710
Deferred incentive compensation		11,491			15,544
Prepaid expenses and other current assets		8,253			10,638
Total current assets		160,428			271,966
Deferred income taxes, net		24,945			24,307
Marketable securities		47,005			72,618
Property and equipment, net		107,546			91,904
Goodwill		42,626			42,626
Intangible assets, net		17,787			22,143
Other non-current assets		15,549			19,208
Total assets	$	415,886		$	544,772
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	37,833		$	62,681
Accrued incentive compensation		21,738			31,355
Deferred revenues		246,277			323,395
Total current liabilities		305,848			417,431
Other liabilities		65,407			59,794
Total liabilities		371,255			477,225
Stockholders’ equity:
Common stock, par value $0.01; 100,000,000 shares authorized, 43,194,645 and 43,119,512 shares issued, and 34,033,117 and 34,993,581 shares outstanding at September 30, 2008 and December 31, 2007, respectively		432			431
Additional paid-in capital		394,549			383,636
Retained earnings		277,779			269,429
Accumulated elements of other comprehensive loss		(534	)		(194	)
Treasury stock, at cost, 9,161,528 and 8,125,931 shares at September 30, 2008 and December 31, 2007, respectively		(627,595	)		(585,755	)
Total stockholders’ equity		44,631			67,547
Total liabilities and stockholders’ equity	$	415,886		$	544,772

See accompanying notes to condensed consolidated financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2008			2007		2008			2007
Revenues	$	142,409		$	136,288	$	421,605		$	390,510
Cost of services		44,051			45,600		134,718			137,540
Gross profit		98,358			90,688		286,887			252,970
Costs and expenses:
Member relations and marketing		39,642			38,063		122,318			109,791
General and administrative		16,584			16,898		59,183			52,923
Depreciation and amortization		5,021			4,176		15,766			10,247
Total costs and expenses		61,247			59,137		197,267			172,961
Income from operations		37,111			31,551		89,620			80,009
Other (expense) income, net		(3,889	)		3,233		(2,250	)		14,437
Income before provision for income taxes		33,222			34,784		87,370			94,446
Provision for income taxes		12,389			13,392		34,048			36,361
Net income	$	20,833		$	21,392	$	53,322		$	58,085
Earnings per share:
Basic	$	0.61		$	0.60	$	1.56		$	1.57
Diluted	$	0.61		$	0.59	$	1.55		$	1.54
Dividends per share	$	0.44		$	0.40	$	1.32		$	1.20
Weighted average shares used in the calculation of earnings per share:
Basic		34,022			35,932		34,253			37,106
Diluted		34,117			36,346		34,374			37,626

See accompanying notes to condensed consolidated financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Nine months ended
	September 30,
	2008			2007
Cash flows from operating activities:
Net income	$	53,322		$	58,085
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization		15,766			10,247
Deferred income taxes		(877	)		(2,759	)
Share-based compensation		9,681			18,103
Excess tax benefits from share-based compensation arrangements		—			(2,409	)
Amortization of marketable securities premiums (discounts), net		533			(633	)
Changes in operating assets and liabilities:
Membership fees receivable, net		75,116			70,159
Deferred incentive compensation		4,053			2,100
Prepaid expenses and other current assets		2,385			734
Other non-current assets		4,659			(5,291	)
Accounts payable and accrued liabilities		(16,760	)		(20,244	)
Accrued incentive compensation		(9,617	)		(2,229	)
Deferred revenues		(77,118	)		(56,356	)
Other liabilities		5,614			2,400
Net cash flows provided by operating activities		66,757			71,907
Cash flows from investing activities:
Purchases of property and equipment, net		(38,141	)		(16,482	)
Cost method investment		—			(3,829	)
Acquisition of business, net of cash acquired		—			(58,288	)
Sales and maturities of marketable securities, net		20,810			219,098
Net cash flows (used in) provided by investing activities		(17,331	)		140,499
Cash flows from financing activities:
Proceeds from the exercise of common stock options		100			691
Proceeds from the issuance of common stock under the employee stock purchase plan		1,133			1,630
Excess tax benefits from share-based compensation arrangements		—			2,409
Purchase of treasury shares		(41,840	)		(270,764	)
Payment of dividends		(44,972	)		(43,833	)
Net cash flows used in financing activities		(85,579	)		(309,867	)
Net decrease in cash and cash equivalents		(36,153	)		(97,461	)
Cash and cash equivalents, beginning of period		47,585			171,367
Cash and cash equivalents, end of period	$	11,432		$	73,906

See accompanying notes to condensed consolidated financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of operations

     The Corporate Executive Board Company (the “Company”) provides “best practices” research, decision support tools and executive education focusing on corporate strategy, operations and general management issues. Best practices research supports senior executive decision-making by identifying and analyzing specific management initiatives, processes and strategies that have been determined to produce the best results in solving common business problems or challenges. For a fixed annual fee, members of each research program have access to an integrated set of services, including best practices research studies, executive education seminars, customized research briefs and Web-based access to the program’s content database and decision support tools.

     Additionally, the Company maintains an online community of professionals who share practical, job-related information through a wholly-owned subsidiary, Toolbox, Inc. This community provides free access to a worldwide audience of experienced, knowledgeable professionals and generates advertising and content related revenues that are recognizable as the services are provided.

Note 2. Condensed consolidated financial statements

     The accompanying condensed consolidated financial statements included herein have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete consolidated financial statements are not included herein. It is recommended that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and related notes as reported in the Company’s 2007 Annual Report on Form 10-K.

     In management’s opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The condensed consolidated balance sheet presented at December 31, 2007 has been derived from the financial statements that have been audited by the Company’s independent registered public accounting firm. The results of operations for the three and nine months ended September 30, 2008 may not be indicative of the results that may be expected for the year ended December 31, 2008, or any other period within calendar year 2008.

Note 3. Accounting pronouncements

Recently adopted

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies how to measure fair value as permitted under other accounting pronouncements but does not require any new fair value measurements. In February 2008, the FASB agreed to delay the effective date of FAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, to fiscal years beginning after November 15, 2008. The Company adopted the provisions of FAS 157 for financial assets and financial liabilities on January 1, 2008 and it did not have a material impact on the consolidated financial statements. The Company will adopt the application of FAS 157 for all non-financial assets and liabilities in the first quarter of 2009. The Company is currently evaluating the impact of this portion of the pronouncement and has not yet determined the effect it will have on the Company’s financial position or results of operations.

     In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115” (“FAS 159”). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value (the “fair value option”) that are not currently required to be measured at fair value. The Company adopted the provisions of FAS 159 on January 1, 2008 and did not elect the fair value option to measure certain financial instruments.

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Not yet adopted

     In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (“FAS 141(R)”). This statement broadens the scope of acquisition accounting as prescribed in FAS 141, which applied only to business combinations in which control was obtained by transferring consideration, to all transactions and other events in which an entity obtains control of a business. FAS 141(R) establishes principles for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree by requiring recognition at the acquisition date, and measurement at their fair values as of that date, with limited exceptions specified in the statement. FAS 141(R) also establishes requirements for how the acquirer recognizes and measures goodwill acquired in the business combination or a gain from a bargain purchase as defined in the statement. In addition, FAS 141(R) establishes guidance for how the acquirer determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The Company will be required to adopt FAS 141(R) for acquisitions completed after December 31, 2008. The Company is currently evaluating the impact of FAS 141(R); however, the implementation may have a material impact on our consolidated financial statements for businesses we acquire post adoption.

     In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“FAS 161”). This statement is intended to improve the current disclosure framework in Statement 133 by requiring entities to provide enhanced disclosures about how and why the entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and how derivative instruments and hedged items affect the entity’s financial position, financial performance, and cash flows. The Company will be required to adopt FAS 161 as of January 1, 2009. The Company is currently evaluating the impact of FAS 161 but does not expect it to have a material impact.

Note 4. Fair value measurement

     FAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FAS 157 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

     The Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below (in thousands):

			Fair Value Measurements at Reporting Date Using
	Fair Value
	as of
	September 30,
	2008		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	11,432	$	11,432	$	—	$	—
Available-for-sale marketable securities		75,496		75,496		—		—
Variable insurance products held in a Rabbi Trust		13,166		—		13,166		—
Financial liabilities
Forward currency exchange contracts	$	2,931	$	—	$	2,931	$	—

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Note 5. Other liabilities

     Other liabilities consist of the following (in thousands):

	September 30,		December 31,
	2008		2007
Deferred compensation	$	10,285	$	12,242
Lease incentives		36,050		31,201
Deferred rent benefit — long term		11,307		8,081
Accrued lease restructuring charges		4,963		5,165
Deferred revenues — long term		2,802		3,105
Total other liabilities	$	65,407	$	59,794

Note 6. Stockholders’ equity and share-based compensation

Share-based compensation

     The Company allocated share-based compensation expense under FAS No. 123 (revised 2004), “Share-Based Payment” (“FAS 123(R)”) in the condensed consolidated statements of income as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2008			2007			2008			2007
Cost of services	$	1,724		$	2,760		$	4,402		$	8,624
Member relations and marketing		632			1,248			798			3,772
General and administrative		1,183			1,997			4,481			5,707
		3,539			6,005			9,681			18,103
Income tax benefit		(1,416	)		(2,312	)		(3,872	)		(6,970	)
Total share-based compensation, net of tax benefit	$	2,123		$	3,693		$	5,809		$	11,133

     FAS 123(R) requires forfeitures to be estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate is based on historical experience. Share-based compensation expense is recognized on a straight line basis, net of an estimated forfeiture rate, for only those shares expected to vest over the requisite service period of the award, which is generally the option vesting term of four years. The Company increased its estimated forfeiture rate from 3% to 6% in the first quarter of 2008, to 10% in the second quarter of 2008 and to 12% in the third quarter of 2008. The cumulative effect on the current periods relating to the change in estimate is a reduction in compensation expense of approximately $0.5 million and $2.3 million for the three and nine months ended September 30, 2008, respectively.

     For the nine months ended September 30, 2008 and 2007, the Company granted a total of 807,507 and 807,986 stock appreciation rights at a weighted average fair value of $7.37 and $18.03, respectively.

     For the nine months ended September 30, 2008 and 2007, the Company granted a total of 70,235 and 73,529 restricted stock units at a weighted average fair value of $36.37 and $74.07, respectively.

     At September 30, 2008, $24.1 million of total unrecognized share-based compensation cost is expected to be recognized over a weighted-average period of approximately 3 years.

Share Repurchases

     In July 2007, the Company’s Board of Directors authorized a share repurchase of up to an additional $125 million of the Company’s common stock. When combined with the remaining balance of the then-existing share repurchase authorizations, this provided the Company the opportunity to repurchase up to approximately $149.2 million of the Company’s shares as of the July 2007 date of the additional share repurchase authorization. Repurchases may continue to be made from time to time in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. The Company is funding its share repurchases with cash on hand and cash generated from operations. For the nine months ended September 30, 2008 and 2007, the Company repurchased approximately 1.0 million and 3.8 million shares at a total cost of $41.8 million and $270.8 million, respectively. The remaining share repurchase authorization was approximately $22.4 million at September 30, 2008.

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Dividends

     During the nine months ended September 30, 2008, the Company’s Board of Directors declared quarterly cash dividends of $0.44 per share. The Company funds its dividend payments with cash on hand and cash generated from operations.

Note 7. Earnings per share

     Basic earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period increased by the dilutive effect of potential common shares outstanding during the period. The number of potential common shares outstanding has been determined in accordance with the treasury-stock method to the extent they are dilutive. Common share equivalents consist of common shares issuable upon the exercise of outstanding share-based compensation awards. A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Basic weighted average common shares outstanding		34,022		35,932		34,253		37,106
Effect of dilutive common shares outstanding		95		414		121		520
Diluted weighted average common shares outstanding		34,117		36,346		34,374		37,626

     Approximately 3.5 million shares and 1.7 million shares related to share-based compensation awards have been excluded from the dilutive effect shown above for the three month period ended September 30, 2008 and 2007, respectively, because their impact would be anti-dilutive. Approximately 3.5 million shares and 1.3 million shares related to share-based compensation awards have been excluded from the dilutive effect shown above for the nine month period ended September 30, 2008 and 2007, respectively, because their impact would be anti-dilutive.

Note 8. Comprehensive income

     The following table summarizes total comprehensive income for the applicable periods (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2008			2007			2008			2007
Net income	$	20,833		$	21,392		$	53,322		$	58,085
Unrealized gains and (losses) of marketable securities, net of tax		(9	)		861			41			818
Unrealized gains and (losses) on forward currency contracts, net of tax		(1,295	)		(67	)		(803	)		496
Total comprehensive income	$	19,529		$	22,186		$	52,560		$	59,399

     Accumulated other comprehensive income at September 30, 2008 consists of a $1.4 million unrealized loss, net of tax, on forward currency contracts and $0.9 million unrealized gain on marketable securities.

Note 9. Commitments and contingencies

     The Company leases office facilities in the United States, United Kingdom, India, and Australia that expire on various dates through 2028. The expiration dates of the Washington, D.C. office leases approximated the Company’s move to the Arlington, Virginia headquarters in early 2008. Certain lease agreements include provisions for rental escalations and require the Company to pay for executory costs such as taxes and insurance. During the third quarter of 2008, the Company entered into a sublease agreement with a third party for one floor of the Arlington, Virginia headquarters. The sublessor had access to the space beginning on November 1, 2008 and will begin making rent payments on January 1, 2009. The total of the subrental payments is approximately $7.5 million over a term of five years. The Company’s future minimum rental payments under non-cancelable operating leases, excluding executory costs and net of sublease payments, total $554.8 million at September 30, 2008 and are scheduled to be paid out as follows: $8.3 million for the three months ended December 31, 2008, $32.1 million for the year ended December 31, 2009, $31.8 million for the year ended December 31, 2010, $31.3 million for the year ended December 31, 2011, $31.0 million for the year ended December 31, 2012 and $420.3 million thereafter.

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     The Company has substantially completed the tenant build-out of the Arlington, Virginia headquarters. The total cost of the build-out was approximately $100 million, of which approximately $40 million was paid by the landlord through lease incentives. Approximately $32 million of the lease incentives was paid directly to vendors and has been excluded from the statement of cash flows as a non-cash investing activity. The remaining $8 million of lease incentives was received by the Company from the landlord in September 2008 and is included in cash flows from operations. The lease incentives are being amortized over the term of the lease as a reduction of rent expense.

     At September 30, 2008, the Company had outstanding letter of credit agreements totaling $6.7 million to provide security deposits for certain office space leases. The letters of credit expire in the period from January 2009 through September 2009, but will automatically extend for another year from their expiration dates unless the Company terminates them. To date, no amounts have been drawn on these agreements.

     Under the terms of the Arlington, Virginia lease agreement, the Company committed to providing the landlord a security deposit totaling $50 million and pledged $50 million of long-term marketable securities as collateral for this obligation. During the three months ended September 30, 2008, the Company replaced the $50 million pledge of long-term marketable securities with a letter of credit for approximately $4.5 million.

     The Company continues to evaluate potential tax exposures relating to sales and use, payroll, income and property tax laws and regulations for various states in which the Company sells or supports its goods and services. Accruals for potential contingencies are recorded by the Company when it is probable that a liability has been incurred and the liability can be reasonably estimated. As additional information becomes available, changes in the estimates of the liability are reported in the period that those changes occur. The Company paid $3.3 million in January 2007 to resolve sales and use tax obligations in various states. The Company had an accrued liability of approximately $3.3 million and $2.0 million at September 30, 2008 and December 31, 2007, respectively, relating to certain sales and use tax regulations for states in which the Company sells or supports its goods and services.

Note 10. Subsequent events

     In November 2008, the Board of Directors declared a quarterly cash dividend of $0.44 per share. The dividend is payable on December 29, 2008 to stockholders of record at the close of business on December 15, 2008. The Company will fund its dividend payments with cash on hand and cash generated from operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Overview

     We provide “best practices” research, decision support tools and executive education focusing on corporate strategy, operations and general management issues. Best practices research supports senior executive decision-making by identifying and analyzing specific management initiatives, processes and strategies that have been determined to produce the best results in solving common business problems or challenges. For a fixed annual fee, members of each of our research programs have access to an integrated set of services, including best practices research studies, executive education seminars, customized research briefs and Web-based access to the program’s content database and decision support tools.

     Our growth strategy is to cross-sell additional research programs to existing members, to add new members and to develop new research programs and decision support tools. One measure of our business is Contract Value, which we calculate as the aggregate annualized revenue attributed to all agreements in effect at a given point in time, without regard to the remaining duration of any such agreement. Contract Value increased 2.8% to $538.0 million at September 30, 2008 from $523.1 million at September 30, 2007. Contract Value growth was driven primarily by new products and growth from new members with strength from the middle market portions of our membership base offset by signs of hesitancy relating to challenging budgetary situations. The Cross-Sell ratio in our large company market was an average of 3.81 member programs per membership institution.

     Additionally, beginning on August 1, 2007, we began generating advertising and content related revenues through our wholly-owned subsidiary, Toolbox, Inc. (formerly known as Information Technology Toolbox, Inc.), an online community of professionals who share practical, job-related information. Advertising and content related revenues are recognized as the services are provided.

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     Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected.

     Memberships, which are principally annually renewable agreements, are generally payable by members at the beginning of the contract term. Billings attributable to memberships in our research programs initially are recorded as deferred revenues and then are generally recognized on a pro-rata basis over the membership contract term, which is typically 12 months. At any time, a member may request a refund of its membership fee for a research program. Refunds are generally provided on a pro-rata basis relative to the remaining term of the membership.

     Our operating costs and expenses consist of Cost of services, Member relations and marketing, General and administrative expenses, and Depreciation and amortization. Cost of services represents the costs associated with the production and delivery of our products and services, which are composed of compensation, including share-based compensation, of research personnel and in-house faculty, the production of published materials, the organization of executive education seminars and all associated support services. Cost of services is exclusive of Depreciation and amortization, which is shown separately on the condensed consolidated statements of income. Member relations and marketing expenses include the costs of acquiring new members, the costs of maintaining and renewing existing members, compensation expense (including sales commissions and share-based compensation), travel and all associated support services. General and administrative expenses consist of compensation, including share-based compensation, and other costs associated with human resources and recruiting, finance and accounting, legal, management information systems, facilities management, new product development and other administrative functions. Depreciation and amortization expense includes the cost of depreciation of our property and equipment, which consists of furniture, fixtures and equipment, capitalized software and Web site development costs and leasehold improvements, and the amortization of our intangible assets.

Critical Accounting Policies

     Our accounting policies, which are in compliance with GAAP, require us to apply methodologies, estimates and judgments that have a significant impact on the results we report in our financial statements. In our 2007 Annual Report on Form 10-K, we have discussed those material policies that we believe are critical and require the use of complex judgment in their application.

Recent Accounting Pronouncements

     During the nine months ended September 30, 2008, there were no recent accounting pronouncements that had a material effect on our condensed consolidated financial statements. Refer to Note 3 of Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of other recent accounting pronouncements.

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Results of Operations

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

	Three months ended September 30,						Nine months ended September 30,
	2008			2007			2008			2007
Revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of services		30.9			33.5			32.0			35.2
Gross profit		69.1			66.5			68.0			64.8
Costs and expenses:
Member relations and marketing		27.8			27.9			29.0			28.1
General and administrative		11.6			12.4			14.0			13.6
Depreciation and amortization		3.5			3.1			3.7			2.6
Total costs and expenses		43.0			43.4			46.8			44.3
Income from operations		26.1			23.2			21.3			20.5
Other (expense) income, net		(2.7	)		2.4			(0.5	)		3.7
Income before provision for income taxes		23.3			25.5			20.7			24.2
Provision for income taxes		8.7			9.8			8.1			9.3
Net income		14.6	%		15.7	%		12.6	%		14.9	%

Three and Nine Months Ended September 30, 2008 and 2007

     Included in the results of operations and the discussion and analysis of changes below are amounts related to decreases in share-based compensation expense. The decreases in share-based expense for the three and nine months ended September 30, 2008 relate to a change to our estimated forfeiture rate and a decrease in the intrinsic value and number of new share-based awards granted. Please refer to Note 6 for the effect of the change in the forfeiture rate. During the three months ended March 31, 2008, we recorded approximately $6.0 million in moving-related costs, including expenses associated with overlapping office leases associated with our move to our Arlington, Virginia headquarters. The moving-related expenses are allocated to Cost of services, Member relations and marketing and General and administrative expenses.

Revenues.

     Revenues increased $6.1 million, 4.5%, to $142.4 million for the three months ended September 30, 2008 from $136.3 million for the three months ended September 30, 2007. Revenues increased $31.1 million, 8.0%, to $421.6 million for the nine months ended September 30, 2008 from $390.5 million for the nine months ended September 30, 2007. The largest driver of the increase in revenues for the three and nine months ended September 30, 2008 was the addition of new members, and to a lesser extent, the introduction of new research programs, and the inclusion of our subsidiary, Toolbox, Inc., for the entire year-to-date period in 2008, compared to only a portion of the third quarter in 2007.

Cost of services.

     Cost of services decreased $1.5 million to $44.1 million for the three months ended September 30, 2008 from $45.6 million for the three months ended September 30, 2007. This decrease principally relates to a reduction in compensation and related costs including salaries, payroll taxes, deferred compensation and incentives and a decrease in share-based compensation expense of $1.1 million. These decreases were partially offset by an increase in facilities and related expense.

     Cost of services decreased $2.8 million to $134.7 million for the nine months ended September 30, 2008 from $137.5 million for the nine months ended September 30, 2007. This decrease is principally due to a reduction in compensation and related costs, including salaries, payroll taxes, deferred compensation and incentives, and a decrease in share-based compensation expense of approximately $4.2 million. Offsetting the decreases, in part, was an increase in facilities expense due to overlapping lease periods related to our move from Washington, D.C. to our Arlington, Virginia headquarters. Additional increases included external consulting, executive education seminar costs and expenses related to the inclusion of our subsidiary, Toolbox, Inc., for the entire year-to-date period in 2008. We also recorded a reduction of approximately $1.0 million during the first quarter of 2008 for incentives recorded in 2007 that were not paid.

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     Cost of services as a percentage of revenues may also fluctuate from quarter to quarter due to the timing of the completion and delivery of best practices research studies, the timing of executive education seminars, the introduction of new membership programs and the fixed nature of a portion of the production costs of best practices research studies, as these costs are not significantly affected by growth in the number of membership subscriptions. Accordingly, Cost of services as a percentage of revenues may not be indicative of future quarterly or annual results. However, because Cost of services includes both fixed and variable components, in terms of both amount and timing of expenses incurred, we have some flexibility to manage a portion of these expenses in light of changing market conditions.

Gross profit.

     Historically, Gross profit as a percentage of revenues, or gross profit margin, has fluctuated based upon the growth in revenues offset by the costs of delivering best practices research studies, the timing of executive education seminars, the volume of customized research briefs, the hiring of personnel and the introduction of new membership programs. Accordingly, the gross profit margin may vary over future quarterly or annual periods. A number of factors that impact gross profit margin are discussed in the “Cost of services” description above.

Member relations and marketing.

     Member relations and marketing expense increased $1.5 million to $39.6 million for the three months ended September 30, 2008 from $38.1 million for the three months ended September 30, 2007. This increase is primarily due to an increase in facilities costs and expenses related to the inclusion of our subsidiary, Toolbox, Inc., for the full quarter in 2008. To a lesser extent, the increase is due to compensation and related costs including salaries, incentives and training related to the acceleration of our sales efforts. These increases were offset, in part, by a decrease in share-based compensation of approximately $0.6 million and a decrease in deferred compensation. As a percentage of revenues, Member relations and marketing expense was essentially flat on a year-over-year basis.

     Member relations and marketing expense increased $12.5 million to $122.3 million for the nine months ended September 30, 2008 from $109.8 million for the nine months ended September 30, 2007. The increase was principally due to compensation and related costs including salaries, payroll taxes and incentives, and facilities costs noted above. To a lesser extent, the increase was due to the inclusion of Toolbox, Inc. expenses for the entire year-to-date period in 2008. These increases were offset by a decrease in stock compensation expense of approximately $3.0 million and a decrease in deferred compensation. The 0.9% increase as a percentage of revenue is primarily attributable to the inclusion of Toolbox, Inc. and the increase in facilities costs. We also recorded a reduction of approximately $1.4 million during the first quarter of 2008 for sales incentives recorded in 2007 that were not paid.

General and administrative.

     General and administrative expense decreased $0.3 million to $16.6 million for the three months ended September 30, 2008 from $16.9 million for the three months ended September 30, 2007. The decrease is principally due to a decrease in incentives, a $0.8 million decrease in share-based compensation, and a decrease in deferred compensation. These decreases were partially offset by the inclusion of Toolbox, Inc., facilities costs as noted above and an increase in compensation and related expenses.

     General and administrative expense increased $6.3 million to $59.2 million for the nine months ended September 30, 2008, from $52.9 million for the nine months ended September 30, 2007. The increase is principally due to an increase in external consulting fees relating to infrastructure investments and, to a lesser extent, facilities costs, compensation and related costs, including salaries and payroll taxes, and an increase of $1.6 million relating to the probable exposure of sales and use tax regulations for states in which we sell or support our goods and services. These increases were partially offset by a decrease in incentives and severance expense and a $1.2 million decrease in share-based compensation expense. We also recorded a reduction of approximately $0.5 million during the first quarter of 2008 for incentives recorded in 2007 that were not paid.

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Depreciation and amortization.

     Depreciation and amortization expense increased $0.8 million to $5.0 million for the three months ended September 30, 2008 from $4.2 million for the three months ended September 30, 2007. Depreciation and amortization expense increased $5.6 million to $15.8 million for the nine months ended September 30, 2008, from $10.2 million for the nine months ended September 30, 2007. The increase in Depreciation and amortization expense was principally due to amortization of intangible assets relating to the purchase of Information Technology Toolbox, Inc. in the third quarter of 2007, depreciation related to tenant improvements primarily from the construction of our Arlington, Virginia office location and the purchase of computer equipment and management information systems software to support organizational growth. Leasehold improvements are depreciated using the straight-line method over the shorter of the expected useful life or the lease term, which ranges from 3 to 20 years. As a percentage of revenue, Depreciation and amortization increased 0.4% and 1.1% for the three and nine months ended September 30, 2008, respectively, compared with the same periods in 2007. The percentage increases are due to the factors discussed above.

Other (expense) income, net.

     Other (expense) income, net decreased $7.1 million to $(3.9) million for the three months ended September 30, 2008 from $3.2 million for the three months ended September 30, 2007. Other (expense) income, net for the three months ended September 30, 2008 was comprised of a $1.8 million other than temporary impairment charge for a cost method investment, a $1.6 million foreign currency loss, and the impact of the change in fair value of participant accounts relating to our deferred compensation plan of approximately $1.4 million partially offset by interest income of $0.9 million. Other (expense) income, net for the three months ended September 30, 2007 was comprised solely of interest income. The period-over-period decrease in interest income was the result of the decreased levels of cash, cash equivalents and marketable securities and lower investment returns in a lower interest rate environment.

     Other (expense) income, net decreased $16.7 million to $(2.3) million for the nine months ended September 30, 2008, from $14.4 million for the nine months ended September 30, 2007. Other (expense) income, net for the nine months ended September 30, 2008 was comprised of interest income of $3.6 million offset by a $1.8 million other than temporary impairment charge for a cost method investment, a $1.6 million foreign currency loss, and the impact of the change in fair value of participant accounts relating to our deferred compensation plan of approximately $2.5 million. Other (expense) income, net for the nine months ended September 30, 2007 was comprised primarily of interest income. The period-over-period decrease in interest income was the result of the decreased levels of cash, cash equivalents and marketable securities and lower investment returns in a lower interest rate environment.

     As a percentage of revenue, Other (expense) income, net decreased 5.1% and 4.2% for the three and nine months ended September 30, 2008, respectively, compared with the same periods in 2007. The percentage decreases are due to the factors discussed above. See further discussion in the Liquidity and Capital Resources section below.

Provision for income taxes.

     Our effective income tax rate increased to 40.0% for the three and nine months ended September 30, 2008, from 38.5% for the three and nine months ended September 30, 2007, principally reflecting the impact of lost Washington, D.C. tax incentives as a result of our move from Washington, D.C. to Arlington, Virginia in the first quarter of 2008. During the three months ended September 30, 2008, we recorded a $0.9 million reduction of income tax expense upon the finalization of our 2007 tax returns.

Liquidity and Capital Resources

     Cash generated by operations is our primary source of liquidity and we believe that existing cash and marketable securities balances and operating cash flows will be sufficient to support operations, capital expenditures, and the payment of dividends, as well as potential share repurchases during the next 12 months. We had cash, cash equivalents and marketable securities of $86.9 million and $172.8 million at September 30, 2008 and 2007, respectively. We made income tax payments of $40.6 million during the nine months ended September 30, 2008 and expect to continue making tax payments in future periods. We have substantially completed the build-out of the office space for our headquarters in Arlington, Virginia with payments, net of lease incentives received, of approximately $59.7 million. In addition, we estimate that we will spend approximately $12 million to $14 million during 2008 to support growth of our headcount and infrastructure.

Cash flows from operating activities.

     Membership subscriptions, which are principally annually renewable agreements, are generally payable by members at the beginning of the contract term. The combination of revenue growth, profitable operations and advance payments of membership subscriptions has historically resulted in net cash flows provided by operating activities. We generated net cash flows from operating activities of $66.8 million and $71.9 million for the nine months ended September 30, 2008 and 2007, respectively.

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     For the nine months ended September 30, 2008, operating cash flows were generated principally by the collection of membership fees receivable and net income, partially offset by the decrease in deferred revenues as some new and existing customers deferred decisions on new memberships and renewals at the end of the third quarter, the decrease in accounts payable and accrued liabilities, and the decrease in accrued incentive compensation.

     For the nine months ended September 30, 2007, operating cash flows were generated primarily by the collection of membership fees receivable and net income, partially offset by the decrease in deferred revenues, the decrease in accounts payable and accrued liabilities, mostly related to income tax payments of approximately $47.1 million, $13.2 million of which related to 2006, and incentive payments, and the increase in other non-current assets and deferred income taxes.

Cash flows from investing activities.

     We used net cash flows in investing activities of $17.3 million for the nine months ended September 30, 2008, and we generated net cash flows from investing activities of $140.5 million for the nine months ended September 30, 2007. For the nine months ended September 30, 2008, net cash flows from investing activities were used to purchase property and equipment of $38.1 million, consisting of furniture, fixtures and equipment, leasehold improvements and computer equipment, and were partially offset by maturities of available-for-sale marketable securities, net of purchases, of $20.8 million. The purchases of property and equipment relate primarily to the build-out of our Arlington, Virginia headquarters which was substantially completed at September 30, 2008.

     For the nine months ended September 30, 2007, net cash flows from investing activities were generated primarily by sales and maturities of available-for-sale marketable securities, net of purchases, of $219.1 million, partially offset by business acquisition costs, net of cash acquired, of $58.3 million, the purchase of property and equipment of $16.5 million, consisting of leasehold improvements and computer equipment and software, and a cost method investment of $3.8 million.

Cash flows from financing activities.

     We used net cash flows in financing activities of $85.6 million and $309.9 million for the nine months ended September 30, 2008 and 2007, respectively. For the nine months ended September 30, 2008, net cash flows from financing activities were used principally for the payment of dividends, which totaled $45.0 million, the repurchase of our common stock, which totaled $41.8 million, partially offset by proceeds from the issuance of common stock under the employee stock purchase plan, which totaled $1.1 million, and the receipt of proceeds of $0.1 million from the exercise of common stock options.

     For the nine months ended September 30, 2007, net cash flows from financing activities were used primarily for the repurchase of our common stock, which totaled $270.8 million, and the payment of dividends, which totaled $43.8 million, partially offset by the recognition of excess tax benefits of $2.4 million resulting from share-based compensation arrangements, proceeds of $1.6 million from the issuance of common stock under the employee stock purchase plan, and proceeds of $0.7 million from the exercise of common stock options.

     The Company has outstanding letter of credit agreements totaling $6.7 million to provide security deposits for certain office space leases. The letters of credit expire in the period from January 2009 through September 2009, but will automatically extend for another year from their expiration dates unless we terminate them. To date, no amounts have been drawn on these agreements.

     The Board of Directors declared a quarterly cash dividend of $0.44 per share in November 2008 which will be payable in December 2008.

Contractual obligations

     We have substantially completed the tenant build-out of the Arlington, Virginia headquarters. The total cost of the build-out was approximately $100 million, of which approximately $40 million was paid by the landlord through lease incentives. Approximately $32 million of the lease incentive was paid directly to vendors and has been excluded from the cash flow statement as a non-cash investing activity. The remaining $8 million of lease incentives were received by us from the landlord in September 2008 and is included in cash flows from operations. The lease incentives are being amortized over the term of the lease as a reduction of rent expense.

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Off-Balance Sheet Arrangements

     At September 30, 2008 and December 31, 2007, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing or other debt arrangements or for other contractually narrow or limited purposes.

Forward looking statements

     This Quarterly Report on Form 10-Q contains “ forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties which may cause actual results to differ materially from those set forth in the statements. Forward-looking statements frequently contain words such as “expects,” “plans,” “will,” “estimates,” “forecasts,” “projects” and other words of similar meaning. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts, financial results or financial condition. One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements. Factors that could cause actual results to differ materially from those indicated by forward-looking statements include, among others, our dependence on renewals of our membership-based services, the sale of additional programs to existing members and our ability to attract new members, the potential that our new products will not be successful or are delayed, our potential failure to adapt to member needs and demands and to anticipate or adapt to market trends, our potential inability to attract and retain a significant number of highly skilled employees, continued consolidation in the financial services industry or sustained economic distress, which may limit our business with such companies, fluctuations in operating results, our potential inability to protect our intellectual property rights, our potential exposure to litigation related to the content of our products, our potential exposure to loss of revenue resulting from our service guarantee, various factors that could affect our estimated income tax rate or our ability to use our existing deferred tax assets, changes in estimates or assumptions relating to share-based compensation expense under FAS 123(R), the potential effects of changes in foreign currency and marketplace conditions and possible volatility of our stock price.

     The Company does not assume the obligation to update any forward-looking statement. One should carefully evaluate such statements in light of factors, including risk factors, described in the Company’s filings with the Securities and Exchange Commission, especially on Forms 10-K, 10-Q and 8-K. In Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed on February 29, 2008, the Company discusses in detail various important factors that could cause actual results to differ from expected or historic results. Please also see the discussion below in Item 1A of Part II for an additional risk consideration. One should understand that it is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest rate risk

     We are exposed to interest rate risk primarily through our portfolio of cash, cash equivalents and marketable securities, which is designed for safety of principal and liquidity. Cash and cash equivalents consist of highly liquid U.S. Treasury obligations with maturities of less than three months. Marketable securities consist primarily of U.S. Treasury notes and bonds and insured Washington, D.C. tax exempt notes and bonds. We perform periodic evaluations of the relative credit ratings related to the cash, cash equivalents and marketable securities. This portfolio is subject to inherent interest rate risk as investments mature and are reinvested at current market interest rates. We currently do not use derivative financial instruments to adjust our portfolio risk or income profile.

Foreign currency exchange rate risk

     Our international operations subject us to risks related to currency exchange fluctuations. Prices for our products are denominated predominately in U.S. dollars, even when sold to customers that are located outside the United States. Many of the costs associated with our operations located outside the United States are denominated in local currencies. As a consequence, increases in local currencies against the U.S. dollar in countries where we have foreign operations would result in higher effective operating costs and, potentially, reduced earnings. We use forward contracts to protect against foreign currency exchange rate risks inherent with our cost reimbursement agreement with our UK and India subsidiaries. A forward contract obligates us to exchange a predetermined amount of U.S. dollars to make equivalent Pound Sterling (“GBP”) and Indian Rupee (“INR”) payments equal to the value of such exchanges. A hypothetical 10% adverse movement in foreign currency exchange rates would not have a material adverse impact to our results of operations.

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Item 4. Controls and Procedures.

     Evaluation of Disclosure Controls and Procedures: The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report based on the evaluation of these controls and procedures required by Rules 13a-15(b) or 15d-15(b) of the Exchange Act. The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Based on their evaluation, such officers have concluded that, as of the end of the period covered by this quarterly report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. During the period covered by this quarterly report, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

     From time to time, we are subject to certain legal proceedings and claims in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors.

     In addition to the other information contained in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2007 Annual Report on Form 10-K.

Recent turmoil in the credit markets, the financial services industry, and the related economic downturn may negatively impact our business, results of operations, financial condition or liquidity.

     Current global economic and financial markets conditions, including severe disruptions in the credit markets and the potential for a significant and prolonged global economic recession, may materially and adversely affect our results of operations and financial condition. These conditions may also materially impact our members, suppliers and other parties with which we do business. Economic and financial market conditions that adversely affect our members may cause them to terminate existing agreements or to reduce the volume of memberships they purchase from us in the future. Adverse economic and financial markets conditions may also cause our suppliers to be unable to meet their commitments to us or may cause suppliers to make changes in the credit terms they extend to us, such as shortening the required payment period for outstanding accounts receivable or reducing the maximum amount of trade credit available to us. Changes of this type could significantly affect our liquidity and could have a material adverse effect on our results of operations and financial condition. If we are unable to successfully anticipate changing economic and financial markets conditions, we may be unable to effectively plan for and respond to those changes, and our business could be negatively affected.

     Although we maintain allowances for doubtful accounts for estimated losses resulting from the inability of our members to make required payments and such losses have historically been within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same loss rates that we have in the past, especially given the current turmoil of the worldwide economy. We cannot predict the timing, strength or duration of any economic slowdown or subsequent economic recovery. If the economy or markets in which we operate do not continue at their present levels, our business, financial condition and results of operations will likely be materially and adversely affected.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

					Total Number of
					Shares		Approximate $
			Average		Purchased as		Value of Shares
	Total		Price		Part of a		That May Yet Be
	Number of		Paid Per		Publicly		Purchased
	Shares Purchased		Share		Announced Plan		Under the Plans
July 1, 2008 to July 31, 2008		—	$	—		—	$	22,441,080
August 1, 2008 to August 31, 2008		—	$	—		—	$	22,441,080
September 1, 2008 to September 30, 2008 (1)		1,010	$	35.81		1,010	$	22,404,907
Total		1,010	$	35.81		1,010

(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 1,010 shares for approximately $36,200.

     In July 2007, our Board of Directors authorized a share repurchase of up to an additional $125 million of our common stock, which, when combined with the remaining balance of the then-existing share repurchase authorizations, provided us the opportunity to repurchase up to approximately $149.2 million of our shares as of the date of the additional share repurchase authorization in July 2007. Repurchases may continue to be made from time to time in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. We have funded, and expect to continue to fund, our share repurchases with cash on hand and cash generated from operations. At September 30, 2008 and December 31, 2007, we had repurchased 9,161,528 and 8,125,931 shares of our common stock at a total cost of $627.6 million and $585.8 million, respectively.

Item 3. Defaults Upon Senior Securities.

     None.

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

     None.

Item 5. Other Information.

     None.

Item 6. Exhibits.

     (a) Exhibits:

Exhibit No.	Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certifications pursuant to 18 U.S.C. Section 1350

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE CORPORATE EXECUTIVE BOARD COMPANY
	(Registrant)
Date: November 10, 2008	By:	/s/ Chao Liu
		Chao Liu
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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Exhibit Index

Exhibit No.	Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certifications pursuant to 18 U.S.C. Section 1350

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