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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

Commission File Number: 000-24799

THE CORPORATE EXECUTIVE BOARD COMPANY
(Exact name of registrant as specified in its charter)

(202) 777-5000

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [_]

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

As of August 9, 2002, we had outstanding 37,115,672 shares of Common Stock, par value $0.01 per share and had outstanding no shares of Preferred Stock, par value $0.01 per share.

THE CORPORATE EXECUTIVE BOARD COMPANY
INDEX TO FORM 10-Q

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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements

THE CORPORATE EXECUTIVE BOARD COMPANY

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY

See accompanying notes to condensed financial statements.

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THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of operations

     We provide “best practices” research and quantitative analysis 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.

Note 2 — Condensed financial statements

     The accompanying condensed unaudited financial statements included herein have been prepared by us in accordance with accounting principles generally accepted in the United States for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these condensed financial statements be read in conjunction with the financial statements and related notes as reported on our Form 10-K filed with the SEC in February 2002.

     In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The condensed balance sheet presented as of December 31, 2001 has been derived from the financial statements that have been audited by our former independent public accountants. The results of operations for the three and six months ended June 30, 2002, may not be indicative of the results that may be expected for the year ending December 31, 2002, or any other period within calendar year 2002.

Note 3 — Public offerings of common stock

     In March 2002 and March and April 2001, certain of our shareholders sold 2,100,000 and 3,035,000 shares of our common stock in registered public offerings. We did not directly receive any proceeds from the sale of our common stock pursuant to these registered public offerings. However, we did receive cash from the exercise of common stock options in conjunction with the registered public offerings. In addition, we recognized $623,000 and $1.0 million in compensation expense reflecting additional Federal Insurance Corporation Act (FICA) taxes as a result of the taxable income that the employees recognized upon the exercise of non-qualified common stock options in conjunction with the registered public offerings in March 2002 and March and April 2001, respectively. The additional FICA taxes are included within “Stock option and related expenses” on the condensed statements of income for the six months ended June 30, 2002.

Note 4 — Earnings per share

     Basic earnings per share was computed by dividing net income by the number of basic weighted average common shares outstanding during the period. Diluted earnings per share was computed by dividing net income by the number of diluted weighted average common shares outstanding during the period. The number of weighted average common share equivalents outstanding has been determined in accordance with the treasury-stock method. Common share equivalents consist of common shares issuable upon the exercise of outstanding common stock options. A reconciliation of basic to diluted weighted average common shares outstanding is as follows:

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Note 5- Comprehensive income (loss)

     Comprehensive income (loss) is defined as net income (loss) plus the net-of-tax impact of foreign currency items, minimum pension liability adjustments, and unrealized gains and losses on certain investments in debt and equity securities. Comprehensive income for the three months ended June 30, 2002 and 2001, was $9.5 million and $5.3 million, respectively. Comprehensive income for the six months ended June 30, 2002 and 2001, was $14.7 million and $9.9 million, respectively. The accumulated elements of comprehensive income, net of tax, included within stockholders’ equity on the condensed balance sheets are comprised solely of the change in unrealized gains (losses) on available-for-sale marketable securities.

Note 6 — Deferred income taxes, net

     For tax purposes, we have deferred income taxes, net, consisting primarily of net operating loss (NOL) carry forwards for regular Federal and state income tax purposes generated from the exercise of common stock options. In estimating future tax consequences, Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109) generally considers all expected future events in the determination and evaluation of deferred tax assets and liabilities. The Company believes that its future taxable income will be sufficient for the full realization of the deferred income taxes, net. However, SFAS No. 109 does not consider the effect of future changes in existing tax laws or rates in the determination and evaluation of deferred tax assets and liabilities until the new tax laws or rates are enacted. We have established our deferred income tax assets and liabilities using currently enacted tax law and rates. We will recognize into income an adjustment for the impact of new tax laws or rates on the existing deferred tax assets and liabilities when new tax laws or rates are enacted.

Note 7 — Supplemental cash flows disclosures

     For the six months ended June 30, 2002 and 2001, we recognized $21.8 million and $40.0 million, respectively, in stockholders’ equity for tax deductions associated with the exercise of non-qualified common stock options. Estimated current income tax payments for the six months ended June 30, 2002 and 2001, have been reduced by the consideration of the tax deductions associated with the exercise of non-qualified common stock options.

Note 8 – Condensed financial statement reclassifications

     Certain amounts in the condensed financial statements as of and for the three and six month periods ended June 30, 2001, have been reclassified to conform to the presentation in the condensed financial statements as of and for the three and six month periods ended June 30, 2002.

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

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

Overview

     We provide “best practices” research and quantitative analysis 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.

     Membership subscriptions, 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 recognized pro rata over the membership contract term. At any time, a member may request a refund of their membership fee for a research program, which is provided on a pro rata basis relative to the remaining term of the membership.

     One measure of our business is its annualized “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. Our experience has been that a substantial portion of members renew subscriptions for an equal or higher level each year. Contract value has increased 27.7% to $152.2 million at June 30, 2002, from $119.2 million at June 30, 2001.

     Our operating costs and expenses consist of cost of services, member relations and marketing, general and administrative expenses, depreciation, and stock option and related expenses. Cost of services represents the costs associated with the production and delivery of our products and services, including compensation of research personnel and in-house faculty, the production of published materials, the organization of member meetings and all associated support services. Member relations and marketing expenses include the costs of acquiring new members, the costs of maintaining and renewing existing members, compensation expense (including sales commissions), travel and all associated support services. General and administrative expenses include the costs of human resources and recruiting, finance and accounting, management information systems, facilities management, new product development and other administrative functions. Stock option and related expenses includes non-cash compensation expense related to certain stock option agreements in existence at the time of the spin-off from The Advisory Board Company and includes additional cash payroll taxes for compensation expense relating to the taxable income recognized by employees upon the exercise of non-qualified common stock options.

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Results of operations

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

Three months and six months ended June 30, 2002 and June 30, 2001

     Revenues. Total revenues increased 27.1% to $39.5 million for the three months ended June 30, 2002, from $31.1 million for the three months ended June 30, 2001. Total revenues increased 26.9% to $76.6 million for the six months ended June 30, 2002, from $60.3 million for the six months ended June 30, 2001. The increase in revenues was attributable primarily to cross-selling additional subscriptions to existing members, adding new members, price increases, and the introduction of new research programs.

     Cost of services. Cost of services increased 19.3% to $13.0 million for the three months ended June 30, 2002, from $10.9 million for the three months ended June 30, 2001. Cost of services increased 19.8% to $26.5 million for the six months ended June 30, 2002, from $22.2 million for the six months ended June 30, 2001. The increase in cost of services was principally due to increased research staffing and related compensation costs to support new subscription programs and an increase in short answer research and executive education services staffing to serve the growing membership base. Cost of services as a percentage of revenues decreased to 32.9% for the three months ended June 30, 2002, from 35.1% for the three months ended June 30, 2001. Cost of services as a percentage of revenues decreased to 34.7% for the six months ended June 30, 2002, from 36.7% for the six months ended June 30, 2001. The decrease in cost of services as a percentage of total revenues is attributable to the timing of executive education seminars, the timing of the completion and delivery of best practices research studies 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 subscription memberships.

     Gross profit trend. Historically, the gross profit margin (gross profit as a percentage of total revenues) has fluctuated based upon the growth in revenues offset by the costs of delivering best practices research studies, the timing of executive education seminars, the volume of customized research briefs and the hiring of personnel. Accordingly, the gross profit margin for the three and six months ended June 30, 2002, may not be indicative of future results.

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     Member relations and marketing. Member relations and marketing costs increased 32.8% to $9.9 million for the three months ended June 30, 2002 from $7.4 million for the three months ended June 30, 2001. Member relations and marketing costs increased 36.3% to $19.0 million for the six months ended June 30, 2002 from $13.9 million for the six months ended June 30, 2001. The increase in member relations and marketing costs is primarily due to the increase in sales staff and related costs, the increase in commission expense associated with increased revenues, and the increase in member relations personnel and related costs to support our expanding membership base. Member relations and marketing costs as a percentage of total revenues has increased to 24.9% for the three months ended June 30, 2002, from 23.9% for the three months ended June 30, 2001. Member relations and marketing costs as a percentage of total revenues has increased to 24.8% for the six months ended June 30, 2002, from 23.1% for the six months ended June 30, 2001. The increase in member relations and marketing costs as a percentage of total revenues is due to the addition of member relations and marketing personnel and related costs to support our expanding membership base.

     General and administrative. General and administrative expenses increased 14.7% to $4.6 million for the three months ended June 30, 2002, from $4.0 million for the three months ended June 30, 2001. General and administrative expenses increased 11.8% to $8.8 million for the six months ended June 30, 2002, from $7.9 million for the six months ended June 30, 2001. The increase in general and administrative expenses resulted principally from staffing increases in general management, human resources and recruiting, finance and accounting, management information systems, new business development and facilities management to support our growth. These increases were offset by a decrease in consulting and training expenses associated with prior year investments in management information software and a decrease in costs associated with our reduced use of external personnel search firms. Although general and administrative expenses increased during the three and six months ended June 30, 2002, as compared to 2001, general and administrative expenses decreased as a percentage of total revenues in 2002 due to the fixed nature of a portion of these costs, which are not significantly affected by growth in revenues.

     Depreciation. Depreciation expense increased 38.2% to $1.4 million for the three months ended June 30, 2002, from $1.0 million for the three months ended June 30, 2001. Depreciation expense increased 34.6% to $2.6 million for the six months ended June 30, 2002, from $1.9 million for the six months ended June 30, 2001. The increase in depreciation expense was principally due to the additional investment in leasehold improvements for additional office space in Washington, D.C., and the purchase of computer equipment and software to support organizational growth.

     Stock option and related expenses. We recognized $45,000 and $160,000 in compensation expense for the three months ended June 30, 2002 and 2001, respectively, reflecting additional FICA taxes as a result of the taxable income that the employees recognized upon the exercise of options to purchase shares of common stock. We recognized $668,000 and $1.1 million in compensation expense for the six months ended June 30, 2002 and 2001, respectively, reflecting additional FICA taxes as a result of the taxable income that the employees recognized upon the exercise of non-qualified common stock options, primarily in conjunction with the sale of our common stock in the registered public offerings in March 2002 and March and April 2001.

     In addition, we recognized $93,000 and $186,000 for the three and six months ended June 30, 2001, respectively, related to stock option agreements in existence at the time of the spin-off from The Advisory Board Company’s sole stockholder. In connection with the spin-off, we executed substitution agreements with each of our employees participating in The Advisory Board Company stock option plan. These substitution agreements resulted in compensation expense being recognized by us over the vesting period. After 2001, we will recognize no additional compensation expense related to these substitution agreements.

     Other income, net. Other income, net increased 43.4% to $1.6 million for the three months ended June 30, 2002, from $1.1 million for the three months ended June 30, 2001. Other income increased 34.6% to $2.8 million for the six months ended June 30, 2002, from $2.1 million for the six months ended June 30, 2001. The growth in other income, net was due primarily to the increase in interest income associated with the increased level of cash, cash equivalents and marketable securities. Cash, cash equivalents and marketable securities increased as a result of cash flows from operating activities and cash flows from financing activities further discussed in the liquidity and capital resources section below.

     Provision for income taxes. We recorded a provision for income taxes of $4.7 million and $3.3 million for the three months ended June 30, 2002 and 2001, respectively. We recorded a provision for income taxes of $8.3 million and $5.8 million for the six months ended June 30, 2002 and 2001, respectively. Although our effective income tax rate has remained at 38% for each of the three and six months ended June 30, 2002 and 2001, our provision for

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income taxes increased due to the continued growth in income before provision for income taxes.

Liquidity and Capital Resources

     Cash flows from operating activities. We have financed our operations to date through funds generated 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 and advance payment of membership subscriptions has historically resulted in net positive cash flows provided by operating activities. We generated net cash flows from operating activities of $32.1 million and $24.9 million for the six months ended June 30, 2002 and 2001, respectively. For the six months ended June 30, 2002 and 2001, operating cash flows were generated within the period principally by net income, the utilization of tax benefits created by the exercise of common stock options, and the collection of membership fees receivable, offset by the decrease in deferred revenues. As of June 30, 2002, we had cash, cash equivalents and marketable securities of $176.4 million. We expect that our current cash, cash equivalents and marketable securities balances and anticipated net positive cash flows from operations will satisfy working capital, financing, and capital expenditure requirements for the next twelve months.

     Cash flows from investing activities. We used net cash flows in investing activities of $68.7 million and $40.7 million during the six months ended June 30, 2002 and 2001, respectively. During the six months ended June 30, 2002 and 2001, investing cash flows were used within the period to purchase available-for-sale marketable securities and to purchase leasehold improvements for additional office space in Washington, D.C., computer equipment and software.

     Cash flows from financing activities. We generated net cash flows from financing activities of $12.4 million and $12.7 million during the six months ended June 30, 2002 and 2001, respectively. Net cash provided by financing activities during the six months ended June 30, 2002 and 2001, was primarily attributed to the receipt of cash from the exercise of common stock options in conjunction with the sale of 2,100,000 and 3,035,000 shares of our common stock in March 2002 and March and April 2001, respectively.

     We previously entered into a $10.0 million, unsecured loan agreement with a commercial bank that provided for a revolving line of credit facility under which we could have from time to time borrowed, repaid, and re-borrowed funds. There were no borrowings under the revolving line of credit facility while it was in effect. The revolving line of credit facility expired in May 2002 and we elected not to renew the revolving line of credit facility.

     At June 30, 2002 and December 31, 2001, we have 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.

Critical Accounting Policies

     We have identified the following policies as critical to our business operations and the understanding of our results of operations. This listing is not a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. However, certain of our accounting policies are particularly important to the portrayal of our financial position and results of operations and may require the application of significant judgment by our management; as a result they are subject to an inherent degree of uncertainty. In applying those policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical experience, our observance of trends in the industry, information provided by our members and information available from other outside sources, as appropriate. For a more detailed discussion on the application of these and other accounting policies, see “Note 4 — Summary of significant account policies” to our financial statements and related notes as reported on our Form 10-K filed with the Securities and Exchange Commission in February 2002. Our critical accounting policies include:

     Deferred Tax Asset Recoverability. For tax purposes, we have deferred income taxes, net, consisting primarily of net operating loss (NOL) carry forwards for regular Federal and state income tax purposes generated from the exercise of common stock options. In estimating future tax consequences, Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109) generally considers all expected future events in the determination and evaluation of deferred tax assets and liabilities. The Company believes that its future taxable income will be sufficient for the full realization of the deferred income taxes, net. However, SFAS No. 109 does not consider the

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effect of future changes in existing tax laws or rates in the determination and evaluation of deferred tax assets and liabilities until the new tax laws or rates are enacted. We have established our deferred income tax assets and liabilities using currently enacted tax law and rates. We will recognize into income an adjustment for the impact of new tax laws or rates on the existing deferred tax assets and liabilities when new tax laws or rates are enacted.

     Revenue recognition. Membership fees are recognized ratably over the term of the related membership, which is generally twelve months. Members may request a refund of their membership fee, which is provided on a pro rata basis relative to the remaining term of the membership. Membership fees are generally billable when the member agrees to the terms of the membership, although certain membership fees are billed on an installment basis. In all cases, the Company’s policy is to record the full amount of membership fees receivable as an asset and related deferred revenue as a liability when a member agrees to the terms of the membership.

     Reserve for Uncollectible Revenue. We record a reserve for uncollectible revenue based upon management’s analyses and estimates as to the collectability of its accounts receivable. As part of our analysis, we examine our collections history, the age of the receivables in question, any specific customer collection issues that we have identified, general market conditions, customer concentrations and current economic trends.

     Commission expense recognition. Commission expenses related to the negotiation of new memberships and the renewal of existing memberships are deferred and amortized over the term of the related memberships.

     Property and equipment. Property and equipment consists of furniture, fixtures and equipment, capitalized software and web site development costs, and leasehold improvements. Property and equipment are stated at cost, less accumulated depreciation expense. Furniture, fixtures and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Capitalized software and web site development costs are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. Replacements and major improvements are capitalized. Maintenance and repairs are charged to expense as incurred.

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Item 7A. Quantitative and Qualitative Disclosures About Market 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 re-invested at current market interest rates. We currently do not use derivative financial instruments to adjust our portfolio risk or income profile.

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