The Corporate Executive Board Company : CEB Reports Third Quarter Results and Updates 2013 Guidance

The Corporate Executive Board Company ("CEB" or the "Company") (NYSE: CEB) today announces financial results for the third quarter and nine months ended September 30, 2013. Revenue increased 22.4% to $201.7 million in the third quarter of 2013 from $164.7 million in the third quarter of 2012. Net loss in the third quarter of 2013 was $5.4 million, or $0.16 per diluted share, compared to a net loss of $0.5 million, or $0.01 per diluted share, in the same period of 2012. Included in the net loss for the third quarter of 2013 is a $22.6 million goodwill impairment loss for Personnel Decision Research Institutes, Inc. ("PDRI") and $6.7 million of pre-tax debt extinguishment costs associated with the refinancing of the Company's senior secured credit facilities in August 2013. Adjusted net income was $29.1 million and Non-GAAP diluted earnings per share were $0.86 in the third quarter of 2013 compared to $26.4 million and $0.78 in the same period of 2012, respectively.

In the first nine months of 2013, revenue was $596.6 million, a 39.1% increase from $428.9 million in the first nine months of 2012. Net income in the first nine months of 2013 was $19.4 million, or $0.57 per diluted share, compared to $29.9 million, or $0.88 per diluted share, in the same period of 2012. Adjusted net income was $76.6 million and Non-GAAP diluted earnings per share were $2.26 in the first nine months of 2013 compared to $62.6 million and $1.85 in the same period of 2012, respectively.

"We were pleased to see continued solid growth across the majority of our business during the third quarter," said Tom Monahan, Chairman and CEO. "This progress has been offset by persistent headwinds in certain places - most notably the US Federal government. While we don't expect trends in this sector to reverse in the near term, sustained strength in other areas of the company - including 10.2% CEB segment Contract Value growth, and double digit constant currency Adjusted revenue growth in the SHL Talent Measurement Solutions segment - give us great confidence that we are setting up for a solid close to 2013 and strong start to 2014."

OUTLOOK FOR 2013

The Company updates its 2013 annual guidance as follows: Adjusted revenue of $817 to $827 million, revenue of $807 to $817 million, capital expenditures of $29 to $31 million, Non-GAAP diluted earnings per share of $3.00 to $3.15, an Adjusted EBITDA margin between 25.0% and 25.5%, and depreciation and amortization expense of $61 to $62 million. Adjusted revenue refers to revenue before the impact of the reduction of SHL revenue recognized in the post-acquisition period to reflect the adjustment of deferred revenue at the SHL acquisition date to fair value. The estimated reduction in 2013 revenue to reflect the impact of the deferred revenue fair value adjustment is approximately $10 million.

SEGMENT HIGHLIGHTS

Since the August 2012 acquisition of SHL Group Holdings I Limited and its subsidiaries ("SHL"), the Company has had two operating segments, CEB and SHL. The CEB segment includes the historical CEB products and services provided to senior executives and their teams to drive corporate performance. The SHL segment, now referred to as the "SHL Talent Measurement Solutions" segment includes the SHL products and services of cloud-based solutions for talent assessment and talent mobility as well as professional services that support those solutions. PDRI, a subsidiary acquired as part of the SHL acquisition, is included in the CEB segment. PDRI provides customized personnel assessment tools and services to various agencies of the US government. Our 2012 financial results only include the results of operations of SHL and PDRI from August 2, 2012.

CEB Segment

Revenue increased 10.1% in the third quarter of 2013 to $158.7 million from $144.2 million in the same period of 2012. There was $6.0 million of PDRI revenue included in CEB segment revenue in the third quarter of 2013 and $5.1 million in the same period of 2012. Adjusted EBITDA in the third quarter of 2013 was $45.0 million compared to $42.5 million in the same period of 2012. Adjusted EBITDA margin in the third quarter of 2013 was 28.4% of segment Adjusted revenue compared to 29.4% in the third quarter of 2012.

Revenue increased 13.5% in the first nine months of 2013 to $463.7 million from $408.4 million in the same period of 2012. There was $19.1 million of PDRI revenue included in CEB segment revenue in the first nine months of 2013 and $5.1 million in the same period of 2012. Adjusted EBITDA was $124.9 million in the first nine months of 2013 compared to $111.6 million in the same period of 2012. Adjusted EBITDA margin in the first nine months of 2013 was 26.9% of segment Adjusted revenue compared to 27.3% in the first nine months of 2012.

Contract Value at September 30, 2013 increased 10.2% to $575.9 million compared to $522.4 million at September 30, 2012. Wallet retention rate at September 30, 2013 was 98% compared to 99% at September 30, 2012. Contract Value per member institution increased 3.5% at September 30, 2013 to $90,896 from $87,844 at September 30, 2012.

In the third quarter of 2013, the Company performed impairment testing of its PDRI reporting unit as a result of insights into the impact of US government sequestration and spending cuts. As a result, the Company recorded an after-tax goodwill impairment loss of $22.6 million. This loss had no impact on cash flows.

SHL Talent Measurement Solutions Segment

Revenue increased in the third quarter of 2013 to $43.0 million from $20.5 million in the same period of 2012. Adjusted EBITDA in the third quarter of 2013 was $5.1 million, which includes a foreign currency remeasurement loss of $1.6 million, compared to $8.0 million in the same period of 2012. Adjusted EBITDA margin in the third quarter of 2013 was 11.5% of segment Adjusted revenue compared to 27.6% in the third quarter of 2012.

Revenue was $133.0 million in the first nine months of 2013. Adjusted EBITDA was $23.5 million and Adjusted EBITDA margin was 16.6% of segment Adjusted revenue in the first nine months of 2013. Segment results for the first nine months of 2012 were the same as the third quarter of 2012.

Wallet retention rate at September 30, 2013 was 97% compared to 101% at September 30, 2012. Unlike CEB members, a majority of SHL customers do not typically enter into contracts for fixed periods, so Contract Value is not a relevant operating statistic for the segment.

NON-GAAP FINANCIAL MEASURES

This press release and the accompanying tables, as well as earnings discussions, include a discussion of Adjusted revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, and Non-GAAP diluted earnings per share, all of which are non-GAAP financial measures provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The term "Adjusted revenue" refers to revenue before the impact of the reduction of SHL revenue recognized in the post-acquisition period to reflect the adjustment of deferred revenue at the SHL acquisition date to fair value (the "deferred revenue fair value adjustment").

The term "Adjusted EBITDA" refers to net income before loss from discontinued operations, net of provision for income taxes; interest expense, net; depreciation and amortization; provision for income taxes; the impact of the deferred revenue fair value adjustment; acquisition related costs; impairment loss; debt extinguishment costs; share-based compensation; costs associated with exit activities; restructuring costs; and gain on acquisition.

The term "Adjusted EBITDA margin" refers to Adjusted EBITDA as a percentage of Adjusted revenue.

The term "Adjusted net income" refers to net income before loss from discontinued operations, net of provision for income taxes and excludes the after tax effects of the impact of the deferred revenue fair value adjustment; acquisition related costs; share-based compensation; impairment loss; debt extinguishment costs; amortization of acquisition related intangibles; costs associated with exit activities; restructuring costs; and gain on acquisition.

"Non-GAAP diluted earnings per share" refers to diluted earnings per share before the per share effect of loss from discontinued operations, net of provision for income taxes and excludes the after tax per share effects of the impact of the deferred revenue fair value adjustment; acquisition related costs; share-based compensation; impairment loss; debt extinguishment costs; amortization of acquisition related intangibles; costs associated with exit activities; restructuring costs; and gain on acquisition.

We believe that these non-GAAP financial measures are relevant and useful supplemental information for evaluating our results of operations as compared from period to period and as compared to our competitors. We use these non-GAAP financial measures for internal budgeting and other managerial purposes, including comparison against our competitors, when publicly providing our business outlook, and as a measurement for potential acquisitions. These non-GAAP financial measures are not defined in the same manner by all companies and therefore may not be comparable to other similarly titled measures used by other companies.

In connection with the SHL acquisition, we changed the definitions of our non-GAAP measures to adjust for the impact of the deferred revenue fair value adjustment to the opening balance sheet resulting from purchase accounting, amortization of related intangibles, acquisition related costs, and share-based compensation. This change was made to provide a more comprehensive understanding of our core operating results by eliminating the effect of acquisition related items from our GAAP operating results. The SHL acquisition was the first acquisition of sufficient size to cause these items to be significant. We believe that excluding these items is important in illustrating what our core operating results would have been had we not incurred these acquisition related items since the nature, size, and number of acquisitions can vary from period to period.

Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

• Certain business combination accounting entries and expenses related to acquisitions: We have adjusted for the impact of the deferred revenue fair value adjustment, amortization of acquisition related intangibles, and acquisition related costs. We incurred significant expenses primarily in connection with our SHL acquisition and also incurred certain other operating expenses, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. We believe that excluding these acquisition related items from our non-GAAP financial measures provides useful supplemental information to our investors and is important in illustrating what our core operating results would have been had we not incurred these acquisition related items since the nature, size, and number of acquisitions can vary from period to period.
• Share-based compensation: Although share-based compensation is a key incentive offered to our employees, we evaluate our operating results excluding such expense. Accordingly, we exclude share-based compensation from our non-GAAP financial measures because we believe it provides valuable supplemental information that helps investors have a more complete understanding of our operating results. In addition, we believe the exclusion of this expense facilitates the ability of our investors to compare our operating results with those of other peer companies, many of which also exclude such expense in determining their non-GAAP measures, given varying valuation methodologies, subjective assumptions, and the variety and amount of award types that may be utilized.
• Impairment loss and debt extinguishment costs: We believe that excluding these items from our non-GAAP financial measures provides useful supplemental information to our investors and is important in illustrating what our core operating results would have been had we not incurred these items. The Company excludes these items because management does not believe they correlate to the ongoing operating results of the business.

These non-GAAP measures may be considered in addition to results prepared in accordance with GAAP, but they should not be considered a substitute for, or superior to, GAAP results. We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.

A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in the accompanying tables.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements using words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," and variations of such words or similar expressions are intended to identify forward-looking statements. In addition, all statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to our 2013 annual guidance. You are hereby cautioned that these statements are based upon our expectations at the time we make them and may be affected by important factors including, among others, the factors set forth below and in our filings with the U.S. Securities and Exchange Commission ("SEC"), and consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. 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, our potential failure to adapt to changing member needs and demands, our potential failure to develop and sell, or expand sales markets for our SHL tools and services, our potential inability to attract and retain a significant number of highly skilled employees or successfully manage succession planning issues, fluctuations in operating results, our potential inability to protect our intellectual property rights, our potential inability to adequately maintain and protect our information technology infrastructure and our member and client data, potential confusion about our rebranding, including our integration of the SHL brand, our potential exposure to loss of revenue resulting from our unconditional service guarantee, exposure to litigation related to our content, various factors that could affect our estimated income tax rate or our ability to use our existing deferred tax assets, changes in estimates, assumptions or revenue recognition policies used to prepare our consolidated financial statements, our potential inability to make, integrate and maintain acquisitions and investments, the amount and timing of the benefits expected from acquisitions and investments including our acquisition of SHL, the risk that we will be required to recognize additional impairments to the carrying value of the significant goodwill and amortizable intangible asset amounts included in our balance sheet as a result of our acquisitions, which would require us to record charges that would reduce our reported results, our potential inability to effectively manage the risks associated with the indebtedness we incurred and the senior secured credit facilities we entered into in connection with our acquisition of SHL or any additional indebtedness we may incur in the future, our potential inability to effectively manage the risks associated with our international operations, including the risk of foreign currency exchange fluctuations, our potential inability to effectively anticipate, plan for and respond to changing economic and financial markets conditions, especially in light of ongoing uncertainty in the worldwide economy, the US economy (including sequestration under the Budget Control Act of 2011), and possible volatility of our stock price. Various important factors that could cause our actual results to differ from our expected or historical results are discussed more fully in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of our filings with the SEC, including, but not limited to, our 2012 Annual Report on Form 10-K filed on March 1, 2013. The forward-looking statements in this presentation are made as of October 28, 2013, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

ABOUT CEB

CEB, the leading member-based advisory company, equips more than 10,000 organizations around the globe with insights, tools and actionable solutions to transform enterprise performance. By combining advanced research and analytics with best practices from member companies, CEB helps leaders realize outsized returns by more effectively managing talent, information, customers and risk. Member companies include approximately 85% of the Fortune 500, half the Dow Jones Asian Titans, and nearly 85% of the FTSE 100. More at cebglobal.com.

With respect to the Company's 2013 annual guidance, reconciliations of net income to Adjusted EBITDA, net income to Adjusted net income, and GAAP diluted earnings per share to Non-GAAP diluted earnings per share as projected for 2013 are not provided because the Company cannot, without unreasonable effort, determine the components of net income and GAAP diluted earnings per share to provide reconciliations for 2013 with certainty at this time.

Corporate Executive Board Company
Richard S. Lindahl, 571-303-6956
Chief Financial Officer
jconnor@executiveboard.com
www.cebglobal.com