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The Corporate Executive Board Reports Fourth-Quarter Results, Provides 2011 Guidance and Increases Quarterly Cash Dividend

ARLINGTON, Va., Feb. 9, 2011 /PRNewswire via COMTEX/ --

The Corporate Executive Board Company ("CEB" or the "Company") (NYSE: EXBD) today announces financial results for the fourth quarter and year ended December 31, 2010. Revenues increased 8.4% to $117.0 million for the fourth quarter of 2010 from $108.0million for the fourth quarter of 2009. Net income and Adjusted net income for the fourth quarter of 2010 was $10.8 million, or $0.31 per diluted share, compared to net income of $13.4 million, or $0.39 per diluted share, for the same period of 2009. Adjusted net income was $13.7 million and Non-GAAP diluted earnings per share was $0.40 for the fourth quarter of 2009, which excludes the after-tax effects of restructuring costs and gain on acquisition (see Non-GAAP Financial Measures below).

For 2010, revenues were $438.9million, a 0.9% decrease from $442.9million for 2009. Net income for 2010 decreased to $40.4 million from $45.6 million for 2009. Diluted earnings per share for 2010 was $1.17, a decrease from $1.33 for 2009. Adjusted net income was $48.2 million and Non-GAAP diluted earnings per share was $1.40 for 2010, compared to Adjusted net income of $57.7 million and Non-GAAP diluted earnings per share of $1.68 for 2009 (see Non-GAAP Financial Measures below).

Contract Value at December 31, 2010 increased 13.5% to $447.1 million compared to December 31, 2009 as a result of improved cross-sales of large corporate memberships, the acquisition of Iconoculture, and an increase in the purchase of memberships by middle market clients. As previously discussed, growth from these factors was offset to some degree by reductions in Contract Value as a result of discontinued programs. The average crosssell ratio was 2.96, reflecting cross-sell ratios of 3.41 for the traditional large corporate market and 1.88 for middle market customers.

"We are pleased with the progress we made against our core priorities in 2010," said Thomas Monahan, Chairman and Chief Executive Officer. "Through their energy and focus, our teams around the world delivered on our financial commitments, maintained our relentless dedication to serving critical member needs, and laid the foundation for continued, sustainable growth.

For 2011 and beyond, we'll help member companies drive higher levels of performance with our uniquely valuable insights and data, actionable tools, and engaging service. Our 2011 plan calls for us to balance continued growth and strong profitability with select investments in new products and markets."

OUTLOOK FOR 2011

The Company announces 2011 annual guidance as follows: Revenues of $475 to $495 million; Non-GAAP diluted earnings per share of $1.45 to $1.65; Depreciation and amortization expense of $17.0 to $18.0 million; capital expenditures of approximately $8.0 to $10.0 million; and an Adjusted EBITDA margin of between 22.0% and 23.5%.

QUARTERLY DIVIDEND

CEB is increasing its quarterly dividend 36% to $0.15 from $0.11 per share. The Company will fund its dividendpayments with cash on hand and cash generated from operations. The dividend is payable onMarch31, 2011 to stockholders of record at the close of business on March 15, 2011.

NON-GAAP FINANCIAL MEASURES

This press release and the accompanying tables include a discussion of EBITDA, Adjusted EBITDA, Adjusted net income, and Non-GAAP diluted earnings per share, 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 "EBITDA" refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, and provision for income taxes. The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, provision for income taxes, impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. The term "Adjusted net income" refers to net income excluding the after tax effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. "Non-GAAP diluted earnings per share" refers to diluted earnings per share excluding the after tax per share effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition.

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 GAAP results is provided below.

                                   Three Months Ended       Year Ended
                                     December 31,          December 31,
                                     ------------          ------------
                                    2010        2009     2010        2009
                                    ----        ----     ----        ----
    Net income                   $10,761     $13,434  $40,363     $45,629
      Interest income, net          (410)       (389)  (1,526)     (1,787)
      Depreciation and
       amortization                5,172       5,642   20,462      22,991
      Provision for income taxes   7,479       7,405   28,047      27,989
                                   -----       -----   ------      ------
    EBITDA                       $23,002     $26,092  $87,346     $94,822
      Impairment loss                 --          --   12,645          --
      Costs associated with exit
       activities                     --          --       --      11,518
      Restructuring costs             --       1,053       --       8,568
      Gain on acquisition             --        (680)      --        (680)
                                      --       -----       --       -----
    Adjusted EBITDA              $23,002     $26,465  $99,991    $114,228
                                 =======     =======  =======    ========

                                   Three Months Ended       Year Ended
                                     December 31,          December 31,
                                     ------------          ------------
                                    2010        2009     2010        2009
                                    ----        ----     ----        ----
    Net income                   $10,761     $13,434  $40,363     $45,629
    Adjustments, net of tax:
      Impairment loss                 --          --    7,789          --
      Costs associated with exit
       activities                     --          --       --       7,141
      Restructuring costs             --         653       --       5,312
      Gain on acquisition             --        (422)      --        (422)
                                      --       -----       --       -----
    Adjusted net income          $10,761     $13,665  $48,152     $57,660
                                 =======     =======  =======     =======

                                   Three Months Ended       Year Ended
                                     December 31,          December 31,
                                     ------------          ------------
                                    2010        2009     2010        2009
                                    ----        ----     ----        ----
    GAAP diluted earnings per
     share                         $0.31       $0.39    $1.17       $1.33
    Adjustments, net of tax:
      Impairment loss                 --          --     0.23          --
      Costs associated with exit
       activities                     --          --       --        0.20
      Restructuring costs             --        0.02       --        0.16
      Gain on acquisition             --       (0.01)      --       (0.01)
                                      --      ------       --      ------
    Non-GAAP diluted earnings per
     share                         $0.31       $0.40    $1.40       $1.68
                                   =====       =====    =====       =====

With respect to the Company's 2011 annual guidance, reconciliations of Non-GAAP diluted earnings per share to GAAP diluted earnings per share, Adjusted net income to net income and Adjusted EBITDA to net income as projected for 2011 are not provided because CEB cannot, without unreasonable effort, determine the components of GAAP diluted earnings per share and net income to provide reconciliations to Non-GAAP diluted earnings per share and Adjusted EBITDA for its 2011 fiscal year with certainty at this time.

We believe that EBITDA, Adjusted EBITDA, Adjusted net income, and Non-GAAP diluted earnings per share are relevant and useful supplemental information for our investors. We use these non-GAAP financial measures for internal budgeting and other managerial purposes, when publicly providing the Company's business outlook and as a measurement for potential acquisitions. A limitation associated with EBITDA and Adjusted EBITDA is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management compensates for these limitations by also relying on the comparable GAAP financial measure of income from operations, which includes depreciation and amortization.

FORWARD-LOOKING STATEMENTS

This news 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, statements about anticipated future financial results, such as our 2011 guidance, are forward-looking statements. 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, 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 inability to attract and retain a significant number of highly skilled employees, risks associated with the results of restructuring plans, fluctuations in operating results, our potential inability to protect our intellectual property rights, 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 or assumptions used to prepare our 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, and 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 and possible volatility of our stock price. These and other factors 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 U.S. Securities and Exchange Commission, including, but not limited to, our 2009 Annual Report on Form 10-K. The forward-looking statements in this press release are made as of February 9, 2011, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

ABOUT THE CORPORATE EXECUTIVE BOARD COMPANY

The Corporate Executive Board drives faster, more effective decision making among the world's leading executives and business professionals. As the premier, network-based knowledge resource, The Corporate Executive Board provides customers with the authoritative and timely guidance needed to excel in their roles, take decisive action and improve company performance. Powered by an executive network that spans more than 50 countries and represents approximately 85% of the world's Fortune 500 companies, The Corporate Executive Board offers unique research insights along with an integrated suite of exclusive tools and resources that enable the world's most successful organizations to deliver superior business outcomes. For more information, visit http://www.exbd.com/.

                        THE CORPORATE EXECUTIVE BOARD COMPANY
                Financial Highlights and Other Operating Statistics
               (In thousands, except percentages and per share data)
                                    Three Months
                         Selected      Ended       Selected     Year Ended
                        Percentage  December 31,  Percentage   December 31,
                                   --------------             -------------
                          Changes   2010     2009   Changes    2010    2009
                        ---------- ------   ----- ----------  -----   -----
                                     (Unaudited)           (Unaudited)
    Financial Highlights
     (GAAP, as reported):
    Revenues               8.4% $117,042 $107,952  (0.9)% $438,907 $442,906
    Net income                   $10,761  $13,434          $40,363  $45,629
    Basic earnings per share       $0.31    $0.39            $1.18    $1.34
    Diluted earnings per share     $0.31    $0.39            $1.17    $1.33
    Weighted average shares
     outstanding:
      Basic                       34,310   34,145           34,256   34,111
      Diluted                     34,666   34,398           34,553   34,293

    Other Operating Statistics:
    Contract value (In thousands)                         $447,051 $393,737
    Average subscription price                             $28,685  $28,552
    Member institutions                                      5,271    4,812
    Total membership subscriptions                          15,585   13,790
    Average subscriptions per member institution*             2.96     2.87
    Client renewal rate**                                       83%      78%

*Also known as "cross-sell ratio," represents the average across all subscription memberships, including the traditional large company market average of 3.41 and 3.30 and the middle market average of 1.88 and 1.79 in 2010 and 2009, respectively.

**Represents a client renewal rate of 88% and 83% for our traditional large company market and 74% and 70% for the middle market in 2010 and 2009, respectively.

                          THE CORPORATE EXECUTIVE BOARD COMPANY
                    Operating Statistic and Statements of Operations
                  (In thousands, except percentages and per share data)
                                    Three Months
                         Selected      Ended        Selected    Year Ended
                        Percentage   December 31,  Percentage  December 31,
                                   --------------              -------------
                          Changes   2010     2009   Changes    2010     2009
                        ---------- ------   -----  ----------  -----   -----
                                    (Unaudited)             (Unaudited)
    Operating Statistic
    Contract Value (1)
     (at period end)      13.5% $447,051 $393,737
    Statements of
     Operations
    Revenues               8.4% $117,042  $107,952  (0.9)% $438,907  $442,906
    Cost and expenses:
       Cost of services           42,903    36,407          155,769   147,019
       Member relations and
        marketing                 35,733    30,095          123,890   126,023
       General and
        administrative            16,256    15,101           60,871    59,415
       Depreciation and
        amortization               5,172     5,642           20,462    22,991
       Impairment loss                --        --           12,645        --
       Costs associated with exit
        activities                    --        --               --    11,518
       Restructuring costs            --     1,053               --     8,568
                                      --     -----               --     -----
         Total costs and
          expenses               100,064    88,298          373,637   375,534
    Income from operations        16,978    19,654           65,270    67,372
    Other income, net (2)          1,262     1,185            3,140     6,246
                                   -----     -----            -----     -----
    Income before provision for
     income taxes                 18,240    20,839           68,410    73,618
    Provision for income taxes     7,479     7,405           28,047    27,989
                                   -----     -----           ------    ------
       Net income                $10,761   $13,434          $40,363   $45,629
                                 =======   =======          =======   =======
    Basic earnings per share       $0.31     $0.39            $1.18     $1.34
    Diluted earnings per share     $0.31     $0.39            $1.17     $1.33
    Weighted average shares
     outstanding
      Basic                       34,310    34,145           34,256    34,111
      Diluted                     34,666    34,398           34,553    34,293
    Percentages of Revenues
    Cost of services                36.7%     33.7%            35.5%     33.2%
    Member relations and marketing  30.5%     27.9%            28.2%     28.5%
    General and administrative      13.9%     14.0%            13.9%     13.4%
    Depreciation and amortization    4.4%      5.2%             4.7%      5.2%
    Income from operations          14.5%     18.2%            14.9%     15.2%
    EBITDA (3)                      19.7%     24.2%            19.9%     21.4%
    Adjusted EBITDA (3)             19.7%     24.5%            22.8%     25.8%

(1)We define "Contract Value" as of the quarter-end as the aggregate annualized revenue attributed to all agreements in effect on such date, without regard to the remaining duration of any such agreement.

(2)Other income, net for the three months ended December 31, 2010 includes $0.4 million of interest income, a $0.9 million increase in the fair value of deferred compensation plan assets, and a $0.1 million foreign currency gain offset by other expense of $0.1 million. Other income, net for the three months ended December 31, 2009 includes $0.4 million of interest income, a $0.5 million increase in the fair value of deferred compensation plan assets, a $0.7 million gain on acquisition and a $0.1 million foreign currency gain offset by other expenses of $0.5 million. Other income, net for the year ended December 31, 2010 includes $1.5 million of interest income, a $1.7 million increase in the fair value of deferred compensation plan assets, and a $0.1 million foreign currency gain offset by $0.2 million of other expense.
Other income, net for the year ended December 31, 2009 includes $1.8 million of interest income, a $2.7 million increase in the fair value of deferred compensation plan assets, a $1.1 million foreign currency gain and a $0.7 million gain on acquisition offset by $0.1 million of other expense.

(3)See "NON-GAAP FINANCIAL MEASURES" for further explanation.

                     THE CORPORATE EXECUTIVE BOARD COMPANY
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                        December 31,
                                                        ------------
                                                   2010              2009
                                                   ----              ----
                                               (Unaudited)
    Assets
    Current assets:
      Cash and cash equivalents                $102,498           $31,760
      Marketable securities                      10,114            18,666
      Membership fees receivable, net           141,322           125,716
      Deferred income taxes, net                 18,727             7,989
      Deferred incentive compensation            15,710             9,721
      Prepaid expenses and other current assets  10,388             9,584
                                                 ------             -----
         Total current assets                   298,759           203,436
    Deferred income taxes, net                   43,524            39,744
    Marketable securities                        10,850            25,784
    Property and equipment, net                  83,140            89,462
    Goodwill                                     29,266            27,129
    Intangible assets, net                       13,828            12,246
    Other non-current assets                     30,782            25,394
                                                 ------            ------
         Total assets                          $510,149          $423,195
                                               ========          ========

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable and accrued liabilities  $52,439           $48,764
      Accrued incentive compensation             40,719            27,975
      Deferred revenues                         251,200           222,053
                                                -------           -------
          Total current liabilities             344,358           298,792

    Deferred income taxes                           679               867
    Other liabilities                            82,296            73,259
                                                 ------            ------
          Total liabilities                     427,333           372,918
    Total stockholders' equity                   82,816            50,277
                                                 ------            ------
          Total liabilities and
           stockholders' equity                $510,149          $423,195
                                               ========          ========
                        THE CORPORATE EXECUTIVE BOARD COMPANY
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (In thousands)
                                                             Year Ended
                                                             December 31,
                                                             ------------
                                                          2010          2009
                                                          ----          ----
                                                      (Unaudited)
    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                       $40,363       $45,629
      Adjustments to reconcile net income to net cash
       flows provided by operating activities:
        Depreciation and amortization                   20,462        22,991
        Deferred income taxes                          (11,628)         (255)
        Share-based compensation                         7,490        10,751
        Excess tax benefits from share-based
         compensation arrangements                        (942)           --
        Gain on acquisition                                 --          (680)
        Amortization of marketable securities premiums,
         net                                               357           691
        Impairment loss                                 12,645            --
        Costs associated with exit activities               --        11,518
        Changes in operating assets and liabilities:
         Membership fees receivable, net               (13,231)        3,622
         Deferred incentive compensation                (5,989)        2,900
         Prepaid expenses and other current assets        (446)          (91)
         Other non-current assets                       (5,387)       (9,525)
         Accounts payable and accrued liabilities       (2,792)      (18,533)
         Accrued incentive compensation                 12,744         2,387
         Deferred revenues                              22,413       (47,512)
         Other liabilities                               9,036         4,681
                                                         -----         -----
           Net cash flows provided by operating
            activities                                  85,095        28,574
                                                        ------        ------
    CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment               (8,322)       (7,052)
      Cost method investment                                --        (1,000)
      Acquisition of businesses, net of cash acquired  (13,957)        5,173
      Maturities of marketable securities, net          22,381        14,409
                                                        ------        ------
           Net cash flows provided by investing
            activities                                     102        11,530
                                                           ---        ------
    CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from the exercise of common stock options   436            --
      Proceeds from the issuance of common stock under the
       employee stock purchase plan                        451           725
      Excess tax benefits from share-based compensation
       arrangements                                        942            --
      Purchase of treasury shares                       (1,237)          (87)
      Payment of dividends                             (15,051)      (25,196)
                                                       -------       -------
           Net cash flows used in financing activities (14,459)      (24,558)
                                                       -------       -------
    NET INCREASE IN CASH AND CASH EQUIVALENTS           70,738        15,546
    Cash and cash equivalents, beginning of period      31,760        16,214
                                                        ------        ------
    Cash and cash equivalents, end of period          $102,498       $31,760
                                                      ========       =======

SOURCE Corporate Executive Board Company