The Company’s 2013 annual guidance is as follows: Adjusted revenue of $825 to $845 million, revenue of $812 to $832 million, capital expenditures of $29 to $31 million, Non-GAAP diluted earnings per share of $2.85 to $3.15, an Adjusted EBITDA margin between 25.0% and 26.5%, and depreciation and amortization expense of $62 to $64 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.


Since the August 2012 acquisition of SHL, the Company has had two operating segments, CEB and SHL. The CEB segment includes the legacy CEB products and services provided to senior executives and their teams to drive corporate performance. SHL provides cloud-based solutions for talent assessment and talent mobility as well as professional services that support those solutions. Beginning with the fourth quarter of 2012, Personnel Decisions Research Institutes, Inc. (“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 U.S. Government. The Company’s segment disclosures for the year ended December 31, 2012 have been recast for comparative purposes to include PDRI in the CEB segment. The SHL segment represents the acquired SHL business except for PDRI.

CEB Segment

CEB segment revenue increased 18.0% in the fourth quarter of 2012 to $155.7 million from $132.0 million in the same period of 2011. There was $7.5 million of PDRI revenue included in CEB segment revenue in the fourth quarter of 2012. CEB segment Adjusted EBITDA in the fourth quarter of 2012 was $43.0 million compared to $40.6 million in the same period of 2011. CEB segment Adjusted EBITDA margin in the fourth quarter of 2012 was 27.6% of segment revenue compared to 30.8% in the fourth quarter of 2011.

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