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The Corporate Executive Board Reports Second-Quarter Earnings of $0.25 Per Diluted Share

WASHINGTON, Jul 23, 2003 (BUSINESS WIRE) -- The Corporate Executive Board Company (CEB) (Nasdaq:EXBD) today announced financial results for the second quarter and six months ended June 30, 2003. Revenues for the second quarter increased 27.3% to $50,339,000 from $39,547,000 for the second quarter of 2002. Net income rose 25.0% to $9,487,000 from $7,589,000. Earnings per diluted share for the latest quarter were $0.25, up 25.0% from $0.20 for the comparable period in 2002.

For the first six months of 2003, revenues were $97,622,000, a 27.5% increase from $76,570,000 for the first half of 2002. Net income grew 31.8% to $17,823,000 from $13,520,000. Earnings per diluted share for the first half of 2003 increased 30.6% to $0.47 from $0.36 for the same prior-year period.

Jay McGonigle, Chairman and CEO of The Corporate Executive Board, commented, "We are very pleased with our second-quarter performance. Despite the continued challenging economic environment, we made good progress towards our stated annual objective for a minimum of 25% revenue growth and continued modest operating margin expansion. All of our key growth metrics remain on track: the cross-sell ratio climbed to 2.76 at quarter end from 2.51 at the same time last year, price increases were in-line with expectations, and new customers continued to run a little ahead of plan. We are particularly excited to welcome companies like Costco Wholesale, DHL Worldwide Express, Home Box Office, PETCO Animal Supplies, Premcor Inc., PSA Peugeot Citroen, and May Department Stores to our membership ranks. Our network of over 1,900 large companies around the world, our focus on the most urgent needs of senior executives across multiple functions, and our position as the low cost provider of critical decision support tools and information all work together to underpin this success.

"Today, we are also delighted to announce the launch of our two newest research programs: the Audit Director's Roundtable and the Real Estate Executive Board. The Audit Director's Roundtable (ADR) is a further extension of our strong Finance franchise, serving a constituency very much in the spotlight of Sarbanes-Oxley implementation. The Real Estate Executive Board (REEB) serves senior executives who steward the second or third largest spend category at most large companies. As always, each program's design and inaugural research agenda reflects the guidance of a stellar group of charter advisors, including senior executives from Boeing, British Telecom, Duke Energy, Intel, Lockheed Martin, and United Technologies. The launch of ADR and REEB brings our number of new program launches in 2003 to three, and our total number of membership programs to twenty-five."

Share Repurchase

During the six months ended June 30, 2003, the Company repurchased 439,652 shares of its common stock at a total cost of approximately $14,800,000. Repurchases will continue to be made 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. At June 30, 2003, the Company had $252,417,000 in cash and marketable securities and no debt.

Outlook for 2003

The following statements summarize the Company's guidance for 2003.

The Company reiterated comfort with its target for annual growth in revenues of a minimum of 25% and continued modest expansion in the operating margin within its target annual range of 25% - 30%. As in the past, the operating margin may fluctuate on a quarterly basis. The Company expects quarterly revenues of approximately $51.4 million for the third quarter and $55.2 million for the fourth quarter of 2003.

For 2003, the Company expects other income of approximately $7.5 million to $7.9 million, an effective income tax rate of approximately 39.4% and diluted weighted shares outstanding of approximately 38.3 million to 38.8 million.

The Company remains comfortable with earnings per diluted share of $0.25 for the third quarter and $0.28 for the fourth quarter, which, combined with the earnings per diluted share of $0.47 for the six months ended June 30, 2003, will bring full-year earnings per diluted share guidance to $1.00.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth below and in CEB's filings with the Securities and Exchange Commission, and consequently, actual operations and results may differ materially from the results discussed 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 institutions industry, 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 our content, our potential exposure to loss of revenue resulting from our unconditional service guarantee, various factors that could affect our estimated income tax rate or our ability to use our existing deferred tax assets, and possible volatility of our stock price. These factors are discussed more fully in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of CEB's filings with the Securities and Exchange Commission, including, but not limited to, its 2002 annual report on Form 10-K, as amended, and quarterly report on Form 10-Q for the quarter ended March 31, 2003. The forward-looking statements in this press release are made as of July 23, 2003, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

The Corporate Executive Board Company is a leading provider of best practices research and analysis focusing on corporate strategy, operations and general management issues. CEB provides its integrated set of services currently to more than 1,900 of the world's largest and most prestigious corporations, including over 70% of the Fortune 500. These services are provided primarily on an annual subscription basis and include best practices research studies, executive education seminars, customized research briefs and Web-based access to a library of over 225,000 corporate best practices.

                THE CORPORATE EXECUTIVE BOARD COMPANY
                         Financial Highlights
                (in thousands, except per share data)

                                 Three Months Ended  Six Months Ended
                                      June 30,            June 30,
                                 ------------------- -----------------
                                    2003      2002     2003     2002
                                 ---------  -------- -------  --------
Revenues                           $50,339  $39,547  $97,622  $76,570
Net income                          $9,487   $7,589  $17,823  $13,520
Basic earnings per share             $0.25    $0.20    $0.48    $0.37
Diluted earnings per share           $0.25    $0.20    $0.47    $0.36
Weighted average shares outstanding:
  Basic                             37,372   37,042   37,298   36,292
  Diluted                           38,415   38,104   38,146   37,611


                 THE CORPORATE EXECUTIVE BOARD COMPANY
             Operating Statistics and Financial Highlights
                 (in thousands, except per share data)

                        Three Months Ended           Six Months Ended
               Selected      June 30,       Selected     June 30,
                Growth  -------------------  Growth  -----------------
                 Rates    2003      2002      Rates   2003     2002
               -------- --------- --------- -------- -------- --------

Operating Statistic

Contract value
 (1) (at period
 end)             27.1% $193,429  $152,204

Financial Highlights

Revenues          27.3%  $50,339   $39,547     27.5% $97,622  $76,570
Cost of
 services                 17,037    13,016            33,155   26,533
                         -------- --------           -------  -------
  Gross profit            33,302    26,531            64,467   50,037

Member
 relations and
 marketing                12,965     9,866            25,352   18,974
General and
 administrative            5,166     4,606            10,496    8,827
Depreciation               1,393     1,385             2,749    2,589
Stock option
 and related
 expenses                      2        45               113      668
                         -------- --------           -------  -------
  Income from
   operations     29.6%   13,776    10,629     35.7%  25,757   18,979

Other income,
 net                       1,880     1,612             3,655    2,829
                         -------- --------           -------  -------
Income before
 provision for
 income taxes             15,656    12,241            29,412   21,808

Provision for
 income taxes              6,169     4,652            11,589    8,288
                         -------- --------           -------  -------
  Net income      25.0%   $9,487    $7,589     31.8% $17,823  $13,520
                         ======== ========           =======  =======

EPS-basic                  $0.25     $0.20             $0.48    $0.37
EPS-diluted       25.0%    $0.25     $0.20     30.6%   $0.47    $0.36


Weighted average shares outstanding
  Basic                   37,372    37,042            37,298   36,292
  Diluted                 38,415    38,104            38,146   37,611

Percentages of Revenues
Gross profit                66.2%     67.1%             66.0%    65.3%
Member
 relations and
 marketing                  25.8%     24.9%             26.0%    24.8%
General and
 administrative             10.3%     11.6%             10.8%    11.5%

(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.


                 THE CORPORATE EXECUTIVE BOARD COMPANY
                       CONDENSED BALANCE SHEETS
                            (in thousands)

                                                  June 30,    Dec. 31,
                                                    2003        2002
                                               ------------- ---------
                                                 (Unaudited)
Assets

Current assets:
   Cash and cash equivalents                        $41,680   $71,346
   Marketable securities                             24,528    17,030
   Membership fees receivable, net                   28,030    50,356
   Deferred income taxes, net                        29,876    28,806
   Deferred incentive compensation                    4,718     4,974
   Prepaid expenses and other current assets          6,365     3,668
                                               ------------- ---------
     Total current assets                           135,197   176,180

Deferred income taxes, net                           22,477    30,920
Marketable securities                               186,209   137,565
Property and equipment, net                          15,339    14,916
                                               ------------- ---------
     Total assets                                  $359,222  $359,581
                                               ============= =========

Liabilities and stockholders' equity

Current liabilities:
   Accounts payable and accrued liabilities          $9,559   $12,549
   Accrued incentive compensation                     5,985     9,660
   Deferred revenues                                111,363   121,415
                                               ------------- ---------
     Total current liabilities                      126,907   143,624

Other liabilities                                     2,845     2,600
                                               ------------- ---------
     Total liabilities                              129,752   146,224

Stockholders' equity                                229,470   213,357
                                               ------------- ---------
     Total liabilities and stockholders'
      equity                                       $359,222  $359,581
                                               ============= =========


                THE CORPORATE EXECUTIVE BOARD COMPANY
                       STATEMENTS OF CASH FLOWS
                            (in thousands)

                                                     Six Months Ended
                                                         June 30,
                                                     -----------------
                                                      2003     2002
                                                     -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                      $17,823  $13,520
     Adjustments to reconcile net income to net cash
        flows from operating activities:
        Depreciation                                   2,749    2,589
        Deferred income taxes                         11,468    8,288
        Amortization of marketable securities
         premiums, net                                   870      638
        Changes in operating assets and liabilities:
            Membership fees receivable, net           22,326   17,318
            Deferred incentive compensation              256      837
            Prepaid expenses and other current
             assets                                   (2,697)    (389)
            Accounts payable and accrued liabilities  (3,006)    (956)
            Accrued incentive compensation            (3,675)    (483)
            Deferred revenues                        (10,052)  (9,882)
            Other liabilities                            245      598
                                                     -------- --------
                 Net cash flows provided by
                  operating activities                36,307   32,078
                                                     -------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment, net          (3,172)  (1,875)
     Maturity (purchase) of marketable securities,
      net                                            (56,200) (66,864)
                                                     -------- --------
                 Net cash flows used in investing
                  activities                         (59,372) (68,739)
                                                     -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from the exercise of common
        stock options                                  7,842   11,960
     Proceeds from the issuance of common stock
      under the
        employee stock purchase plan                     338      325
     Purchase of treasury shares                     (14,797)      --
     Reimbursement of common stock offering costs        175      300
     Payment of common stock offering costs             (159)    (172)
                                                     -------- --------
                 Net cash flows provided by
                  (used in) financing activities      (6,601)  12,413
                                                     -------- --------

NET DECREASE IN CASH AND CASH EQUIVALENTS            (29,666) (24,248)

Cash and cash equivalents, beginning of period        71,346   48,271
                                                     -------- --------

Cash and cash equivalents, end of period             $41,680  $24,023
                                                     ======== ========

SOURCE: The Corporate Executive Board Company

The Corporate Executive Board Company, Washington
Timothy R. Yost, 202-777-5455
heroldl@executiveboard.com
www.executiveboard.com
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