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 Career Education Corporation Reports Results for Fourth Quarter 2015
   Monday, February 29, 2016 4:24:01 PM ET

Career Education Corporation (CECO ) today reported operating and financial results for the fourth quarter and full year of 2015.

Fourth Quarter Business Highlights:

-- University Group revenue increased by 8.2 percent year-over-year (or 4.2 percent when adjusted for prior year accounting change), primarily driven by a 4.4 percent increase in total enrollments at CTU

-- University Group operating income increased 36.8 percent year-over-year to $31.5 million (or 29.6 percent when adjusted for prior year accounting change), primarily driven by increased revenues and our transformation initiatives

-- Achieved positive total company adjusted EBITDA for the second quarter in a row, and adjusted EBITDA for University and Corporate was the highest it has been in the past eight quarters



-- Fourth quarter cash usage from operations was negative $0.7 million, compared to cash usage of negative $17.5 million in the fourth quarter of 2014

Full Year Business Highlights:

-- Full year 2015 operating expenses for continuing and discontinued operations were roughly $152 million lower year-over-year, which was primarily driven by the impact of the Company’s transformation efforts

-- Full year adjusted EBITDA from University and Corporate was $84.4 million, representing an improvement of $25.0 million or 42.2 percent compared to 2014, driven by 2.7 percent revenue growth at University and execution of the Company’s transformation strategy

-- Full year 2015 cash usage from operations was negative $21.7 million, compared to cash usage of negative $118.6 million for full year 2014

-- Ended 2015 with $201.0 million of cash, cash equivalents, restricted cash and available-for-sale short-term and long-term investments, net of borrowings

University and Academic Highlights:

-- Introduced four new degree programs in 2015 in the areas of Education (AIU), Business Administration (AIU), Nursing (CTU) and Healthcare Management (CTU)

-- Continued to invest in technology with mobile capabilities now launched at both University institutions

-- CTU received the "Distance Education Innovation Award" in September 2015 from the National University Technology Network, which recognized CTU’s adaptive learning platform (intellipath(TM)) as providing an innovative, personalized learning plan for its Master of Business Administration (MBA) students

-- AIU was listed in the U.S. News & World Report "Best Online Programs" rankings in January 2016, placing in the top 10 percent of programs evaluated for students enrolling in distance education programs to earn their degrees

"Our University Group closed out the year with a solid fourth quarter, as stable total enrollments and moderate revenue growth resulted in improved financial performance," said Todd Nelson, President and Chief Executive Officer. "Our University Group and Corporate’s adjusted EBITDA was approximately $84 million for 2015, which provides a foundation for investments in technology and resources to help improve student retention and outcomes. Our transformation continues to generally track along the framework we offered when we announced the decision to prioritize and focus our resources on our University platform. We are encouraged by what we accomplished in 2015, both financially and operationally. The AIU and CTU brands continue to gain recognition for their competitive academic offerings, as both institutions won multiple awards during 2015."

Nelson concluded, "As we look to 2016 and beyond, we will continue to invest in our University platform to position it for long-term success and growth. We are focused on strengthening the breadth of our program offerings, faculty and technological capabilities, with the goal of continuously improving our students’ experiences and academic outcomes. We will evaluate new programs to address the workforce skills gaps for our corporate partners. We will continue to develop our corporate partner network, and work closely with them about ways they can routinely engage and articulate the value of our educational services to their key employees. At the same time, we are honoring our commitment to the students at our campuses in teach-out to provide them with academic resources and education. Lastly, we will remain financially disciplined, with an eye on improving operating efficiencies and our cash flow generation capabilities."

REVENUE

For the fourth quarter of 2015, total revenue was $199.9 million, an 8.1 percent decrease from $217.5 million for the fourth quarter of 2014. Total revenue for the University Group was $137.4 million for the fourth quarter of 2015 compared to $127.0 million for the fourth quarter of 2014, an increase of 8.2 percent. Adjusting for changes related to accounting for withdrawn students, revenue increased 4.2 percent for the current quarter as compared to the prior year quarter for the University Group.

Revenue ($ in thousands)                 Q4 2015                          Q3 2015                          Q2 2015                          Q1 2015                                 Q4 2014
(1)
---------------------------                      ---------------------------                                            ---------------------------                                            ---------------------------                                            ---------------------------                                            ----------------------------------------
  CTU                                                               $  91,481                                                              $  85,433                                                              $  86,174                                                              $  85,127                                                              $               82,202
  AIU                                               45,871                                              50,688                                              52,024                                              53,066                                                           44,749
                                                 -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- --------------------
     Total University Group                                           137,352                                                                136,121                                                                138,198                                                                138,193                                                                             126,951
  Corporate and Other                                   40                                                  39                                                  39                                                  39                                                               40
                                                 -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- --------------------
     Subtotal                                                         137,392                                                                136,160                                                                138,237                                                                138,232                                                                             126,991
  Culinary Arts (2)                                                    42,020                                                                 41,410                                                                 42,048                                                                 44,712                                                                              43,294
  Transitional Group (2)                            20,535                                              25,914                                              36,543                                              44,070                                                           47,216
                                                 -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- -------                                           -------------------- --------------------
     Total (3)                                                      $ 199,947                                                              $ 203,484                                                              $ 216,828                                                              $ 227,014                                                              $              217,501
                                                 ==================== =======                                           ==================== =======                                           ==================== =======                                           ==================== =======                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                   
(1)   Fourth quarter of 2014 total revenue was negatively impacted by
                         approximately $12.3 million due to the change in how the Company
                         accounts for revenue for students who withdrew from one of its
                         institutions prior to completion of their programs. This cumulative
                         adjustment was recorded during the fourth quarter of 2014. First
                         quarter through fourth quarter of 2015 were negatively impacted by
                         approximately $2.7 million, $2.9 million, $3.1 million and $3.4
                         million, respectively, related to this change in accounting.
                          
(2)                      Teach-out campuses included in the Transitional Group no longer
                         enroll new students. The Culinary Arts campuses were announced for
                         teach-out during December 2015. Additionally, campuses which have
                         ceased operations subsequent to December 31, 2014 and no longer
                         qualify for discontinued operations treatment under Financial
                         Accounting Standards Board ("FASB") Accounting Standards
                         Codification ("ASC") Topic 360 - Property, Plant & Equipment,
                         or campuses that were announced for sale subsequent to December
                         31, 2014, are also included in the Transitional Group.
                          
(3)                      Excludes discontinued operations which consist of the results of
                         operations for campuses that have ceased operations prior to
                         December 31, 2014.
                          

TOTAL AND NEW STUDENT ENROLLMENTS

For the fourth quarter of 2015, total student enrollments for the University Group were 31,900, which remained relatively flat to the prior year quarter. New student enrollments for the University Group were 8,760, a decrease of 3.1 percent as compared to the prior year quarter.

Total Student Enrollment                 Q4 2015                         Q3 2015                         Q2 2015                         Q1 2015                                Q4 2014
---------------------------                      --------------------------                                            --------------------------                                            --------------------------                                            --------------------------                                            ----------------------------------------
  CTU                                              21,300                                             20,600                                             20,600                                             20,300                                                           20,400
  AIU                                              10,600                                             10,800                                             10,700                                             13,500                                                           11,600
                                                 -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
     Total University Group                        31,900                                             31,400                                             31,300                                             33,800                                                           32,000
                                                 -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
  Culinary Arts                                                        7,800                                                                 9,200                                                                 7,800                                                                 8,800                                                                               8,800
  Transitional Group                                3,500                                              5,200                                              7,000                                              9,500                                                            9,400
                                                 -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
     Total                                         43,200                                             45,800                                             46,100                                             52,100                                                           50,200
                                                 ==================== ======                                           ==================== ======                                           ==================== ======                                           ==================== ======                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                               
New Student Enrollments                 Q4 2015                         Q3 2015                         Q2 2015                         Q1 2015                                Q4 2014
---------------------------                      -------------------------                                            --------------------------                                            --------------------------                                            --------------------------                                            ----------------------------------------
  CTU                                              5,710                                              5,470                                              5,670                                              5,040                                                            5,670
  AIU                                              3,050                                              2,980                                              2,280                                              5,090                                                            3,370
                                                 -------------------- -----                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
     Total University Group                        8,760                                              8,450                                              7,950                                             10,130                                                            9,040
                                                 -------------------- -----                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
  Culinary Arts (1)                                                     690                                                                 3,290                                                                 1,450                                                                 2,040                                                                                 980
  Transitional Group (1)                              90                                                510                                                830                                              1,830                                                            1,150
                                                 -------------------- -----                                           -------------------- ------                                           -------------------- ------                                           -------------------- ------                                           -------------------- --------------------
     Total                                         9,540                                             12,250                                             10,230                                             14,000                                                           11,170
                                                 ==================== =====                                           ==================== ======                                           ==================== ======                                           ==================== ======                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                              
(1)   Teach-out campuses within the Transitional Group and Culinary Arts
                         no longer enroll new students, effective upon their teach-out
                         announcement; students who re-enter after 365 days are reported as
                         new student enrollments. For Culinary Arts, teach-outs announced in
                         December 2015 were effective beginning after the January 2016 new
                         enrollment.
                          

OPERATING (LOSS) INCOME

For the fourth quarter of 2015, operating loss of $3.9 million improved 83.6 percent compared to an operating loss of $23.9 million in the prior year quarter. Total University Group operating income increased to $31.5 million from $23.1 million in the prior year quarter, an increase of 36.8 percent, or 29.6 percent when adjusted for the prior year accounting change. This increase in operating income was primarily driven by increased revenues and ongoing efficiencies.

Operating Loss ($ in thousands)              Q4 2015                          Q3 2015                          Q2 2015                          Q1 2015                          Q4 2014
-------------------------------                      ---------------------------                         ---------------------------                         ---------------------------                         ---------------------------                         ---------------------------
  CTU                                                                   $  30,001                                           $  18,616                                           $  24,263                                           $  14,616                                           $  23,356
  AIU                                                    1,538                            1,695                            5,174                           (2,887 )                           (304 )
                                                     -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------
     Total University Group                                                31,539                                              20,311                                              29,437                                              11,729                                              23,052
  Corporate and Other                                   (6,331 )                         (8,040 )                         (7,036 )                         (5,860 )                         (7,048 )
                                                     -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------
     Subtotal                                                              25,208                                              12,271                                              22,401                                               5,869                                              16,004
  Culinary Arts (1)                                                       (14,065 )                                           (33,195 )                                           (10,560 )                                               243                                             (16,136 )
  Transitional Group (2)                               (15,072 )                        (23,065 )                        (31,733 )                        (30,470 )                        (23,788 )
                                                     -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------                        -------------------- -------
     Total (3)                                                          $  (3,929 )                                         $ (43,989 )                                         $ (19,892 )                                         $ (24,358 )                                         $ (23,920 )
                                                     ==================== =======                        ==================== =======                        ==================== =======                        ==================== =======                        ==================== =======
                                                                                                                                                                                                                                                                                                   
(1)   Asset impairment charges of $9.0 million, $33.4 million, $9.7
                         million and $10.3 million were recorded during the fourth quarter of
                         2015, third quarter of 2015, second quarter of 2015 and fourth
                         quarter of 2014, respectively.
                          
(2)                      Asset impairment charges of $0.2 million, $1.7 million, $6.0 million
                         and $3.9 million were recorded during the fourth quarter of 2015,
                         second quarter of 2015, first quarter of 2015 and fourth quarter of
                         2014, respectively.
                          
(3)                      Excludes discontinued operations, which consists of the results of
                         operations for campuses that have ceased operations prior to
                         December 31, 2014.
                          

ADJUSTED EBITDA

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its operations. (See tables below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

For the fourth quarter of 2015, adjusted EBITDA for the University Group and Corporate was $29.7 million representing an improvement of 28.4 percent, or $6.6 million, compared to fourth quarter of 2014, primarily driven by increased revenue and ongoing transformation initiatives. Adjusted EBITDA for the Transitional Group, Culinary Arts and discontinued operations remained relatively flat for the current quarter versus the prior year quarter primarily due to increased severance and related charges recorded in the current quarter for the newly announced teach-outs offset with improvements for campuses which completed their teach-out.

                                                                                                                                                                                                                                    
Adjusted EBITDA ($ in thousands)                                                                       Q4 2015                                                    Q3 2015                                                    Q2 2015                                                    Q1 2015                                                    Q4 2014
------------------------------------------------------------------                      ----------------------------------                         ----------------------------------                         ----------------------------------                         ----------------------------------                         ----------------------------------
  University Group and Corporate:
------------------------------------------------------------------
  Pre-tax loss from continuing operations                                                                  $         (4,292 )                                         $        (44,656 )                                         $        (20,750 )                                         $        (24,740 )                                         $        (23,674 )
  Transitional Group pre-tax loss                                                                                    15,182                                                     23,724                                                     32,624                                                     30,470                                                     23,788
  Culinary Arts pre-tax loss (gain)                                                                                  14,065                                                     33,171                                                     10,532                                                       (250 )                                                   15,927
  Interest expense (income), net                                                                                         87                                                          7                                                        (52 )                                                        2                                                        (38 )
  Depreciation and amortization (1)                                                                                   3,318                                                      3,454                                                      3,956                                                      4,361                                                      5,170
  Legal settlements (1)                                                                                                 200                                             --                                             --                                             --                                             --
  Stock-based compensation (1)                                                                                          404                                                        983                                                        530                                                        940                                                        966
  Asset impairments (1)                                                                                                 507                                             --                                             --                                             --                                             --
  Unused space charges (1) (2)                                                                                          114                                                       (385 )                                                     (348 )                                                      556                                                       (373 )
  Adjustment related to revenue recognition (1) (3)                                                  101                                     348                                      94                                      93                                   1,354
                                                                                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------
                                                                                                           $         29,686                                           $         16,646                                           $         26,586                                           $         11,432                                           $         23,120
     Adjusted EBITDA--University Group and Corporate
                                                                                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                         
  Memo: Advertising Expenses (1)                                                                           $         33,431                                           $         46,194                                           $         34,258                                           $         50,587                                           $         36,731
                                                                                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                         
  Transitional Group, Culinary Arts and
  Discontinued Operations:
------------------------------------------------------------------
  Pre-tax loss from discontinued operations                                                                $           (512 )                                         $           (544 )                                         $           (720 )                                         $           (352 )                                         $         (1,268 )
  Transitional Group pre-tax loss                                                                                   (15,182 )                                                  (23,724 )                                                  (32,624 )                                                  (30,470 )                                                  (23,788 )
  Culinary Arts pre-tax (loss) gain                                                                                 (14,065 )                                                  (33,171 )                                                  (10,532 )                                                      250                                                    (15,927 )
  Loss on sale of business (4)                                                                                          161                                                        715                                                        917                                             --                                             --
  Depreciation and amortization (4)                                                                                   1,759                                                      2,508                                                      3,231                                                      2,351                                                      7,319
  Legal settlements (4)                                                                                      --                                             --                                                       (166 )                                                    1,485                                             --
  Asset impairments (4)                                                                                               9,171                                                     33,446                                                     11,372                                                      6,019                                                     14,203
  Unused space charges (2) (4)                                                                                       (2,002 )                                                    7,174                                                     (2,305 )                                                   (2,424 )                                                   (2,063 )
  Adjustment related to revenue recognition (3) (4)                                                 (188 )                                   173                                      13                                     (67 )                                 1,029
                                                                                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------
     Adjusted EBITDA--Transitional, Culinary Arts and Discontinued                                         $        (20,858 )                                         $        (13,423 )                                         $        (30,814 )                                         $        (23,208 )                                         $        (20,495 )
     Operations
                                                                                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============
  Consolidated Adjusted EBITDA                                                                             $          8,828                                           $          3,223                                           $         (4,228 )                                         $        (11,776 )                                         $          2,625
                                                                                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                         
(1)   Quarterly amounts relate to the University Group and Corporate
                          
(2)                      Unused space charges represent the net present value of remaining
                         lease obligations less an estimated amount for sublease income as
                         well as the subsequent accretion of these charges
                          
(3)                      Q4 2014 amounts are cumulative for the full year 2014 recorded
                         during the fourth quarter of 2014
                          
(4)                      Quarterly amounts relate to Transitional Group, Culinary Arts and
                         discontinued operations
                          

BALANCE SHEET AND CASH FLOW

Net cash used in operating activities was negative $0.7 million for the fourth quarter of 2015, compared to a net cash usage of negative $17.5 million in the prior year quarter. The Company’s continued focus on its transformation efforts and the completion of teach-outs drove the improvement in cash usage for the current year quarter as compared to the prior year quarter.

As of December 31, 2015 and December 31, 2014, cash, cash equivalents, restricted cash and available-for-sale short-term and long-term investments, net of borrowings totaled $201.0 million and $237.0 million, respectively.

Cash and Cash Flow from Operations ($ in                    Q4 2015         Q3 2015         Q2 2015         Q1 2015         Q4 2014
thousands)
------------------------------------------------------                      ----------                         ----------                                            ----------                         ----------                         ----------
  Consolidated Cash, Cash Equivalents, Restricted Cash
   and Available-For-Sale Short-Term and Long-Term
                                                                              $ 239,015                          $ 206,792                                             $ 204,104                          $ 213,739                          $ 247,002
   Investments (1)
  Borrowings (2)                                                              $  38,000                          $       -                                             $       -                          $       -                          $  10,000
                                                                            --- -------                        --- -------                                           --- -------                        --- -------                        --- -------
  Consolidated Cash, Cash Equivalents, Restricted Cash
   and Available-For-Sale Short-Term and Long-Term
                                                                              $ 201,015                          $ 206,792                                             $ 204,104                          $ 213,739                          $ 237,002
   Investments, net of Borrowings (1)
                                                                            === =======                        === =======                                           === =======                        === =======                        === =======
  Cash Flow from Operations (3)                                               $    (683 )                        $   5,592                                             $  (6,419 )                        $ (20,176 )                        $ (17,479 )
                                                                            === =======                        === =======                                           === =======                        === =======                        === =======
                                                                                                                                                                                                                                                        
(1)   Consolidated cash, cash equivalents, restricted cash and
                         available-for-sale short-term and long-term investment balances are
                         quarter end balances and include both continuing and discontinued
                         operations. Available-for-sale long-term investment balances of $7.4
                         million for each of the periods disclosed are reflected within other
                         non-current assets on our consolidated balance sheets.
                          
(2)                      The fourth quarter of 2015 and 2014 ending cash, cash equivalents,
                         restricted cash and available-for-sale short-term and long-term
                         investment balances include $38.0 million and $10.0 million,
                         respectively, of restricted cash related to cash-collateralized
                         borrowings under the Credit Agreement. The $10.0 million of
                         outstanding borrowings as of December 31, 2014 was repaid during the
                         first quarter of 2015.
                          
(3)                      Cash flow from operations includes payments of legal settlements of
                         $2.4 million and $1.3 million during the first quarter of 2015 and
                         fourth quarter of 2014, respectively.
                          

OUTLOOK

We expect the following results from our transformation efforts, subject to the key assumptions identified below:

-- Adjusted EBITDA from University Group and Corporate is expected to stay relatively flat in 2016 as compared to 2015 and then increase modestly in 2017 and 2018

-- As compared to 2015, we expect negative adjusted EBITDA from Transitional Group, Culinary Arts and discontinued operations to improve slightly in 2016, then to worsen in 2017 due to the completion of the LCB teach-outs and then to start improving in 2018

-- End of year cash, cash equivalents, restricted cash and available-for-sale short-term and long-term investments, net of any borrowings, as reported on the consolidated balance sheets of approximately $150 million to $160 million for the year ending December 31, 2016 and approximately $140 million to $150 million for the year ending December 31, 2017 and to generate cash during 2018

The estimates provided above for 2016 and beyond are based on the following key assumptions and factors, among others: (i) flat-to-modest total enrollment growth within the University Group while achieving the intended University Group efficiencies, (ii) teach-outs to occur as planned and performance consistent with historical experience, (iii) achievement of recovery rates for our real estate obligations and timing of any associated lease termination payments consistent with our historical experiences, (iv) right-sizing of our Corporate expense structure to serve primarily online institutions, (v) no material changes in the legal or regulatory environment and excludes legal or regulatory settlements, and (vi) consistent working capital movements in line with historical operating trends and potential impacts of teach-out campuses on working capital in line with expectations. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current events and actions that we may undertake in the future, actual results could differ materially from these estimates.

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Monday, February 29, 2016 at 5:30 p.m. Eastern time to discuss its fourth quarter and full year 2015 results and outlook. Interested parties can access the live webcast of the conference call and the related presentation materials at www.careered.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 844-378-6484 (domestic) or 412-542-4179 (international). Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.careered.com in the Investor Relations section of the website.

ABOUT CAREER EDUCATION CORPORATION

Career Education’s academic institutions offer a quality education to a diverse student population in a variety of disciplines through online, campus-based and hybrid learning programs. Our two universities - American InterContinental University ("AIU") and Colorado Technical University ("CTU") - provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Both universities predominantly serve students online with career-focused degree programs that are designed to meet the educational demands of today’s busy adults. AIU and CTU continue to show innovation in higher education, advancing new personalized learning technologies like their intellipath(TM) adaptive learning platform that allow students to more efficiently pursue earning a degree by receiving course credit for knowledge they can already demonstrate. Career Education is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

A listing of individual campus locations and web links to Career Education’s institutions can be found at www.careered.com.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as "expect," "believe," "will," "anticipate," "continue," and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment; increased competition; negative trends in the real estate market which could impact the costs related to teaching out campuses and the success of our initiatives to reduce our real estate obligations; our ability to achieve anticipated cost savings and business efficiencies; rulemaking by the U.S. Department of Education or any state and increased focus by Congress, the President and governmental agencies on, or increased negative publicity about, for-profit education institutions; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the gainful employment, 90-10 and financial responsibility standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of management changes; our ability to successfully defend litigation and other claims brought against us; and changes in the overall U.S. or global economy. Further information about these and other relevant risks and uncertainties may be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and its subsequent filings with the Securities and Exchange Commission.

 
                                                                                          CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                   CONSOLIDATED BALANCE SHEETS
                                                                                                         (In thousands)
 
                                                                                   December 31,                                               December 31,
                                                                                                          2015                                                       2014
                                                                                          ------------------------------------                     -------------------- ------------------------------------
                                                                                                                                   
                               ASSETS                                                                                                               
CURRENT ASSETS:
  Cash and cash equivalents, unrestricted                                                                    $         66,919                                                              $         93,832
  Restricted cash                                                                                                      49,821                                                                        22,938
  Short-term investments                                                                           114,901                                                    122,858
                                                                                          -------------------- --------------                                           -------------------- --------------
     Total cash and cash equivalents, restricted cash and short-term                                                  231,641                                                                       239,628
     investments
                                                                                                                                                                                                             
  Student receivables, net                                                                                             31,618                                                                        31,401
  Receivables, other, net                                                                                               5,194                                                                        19,401
  Prepaid expenses                                                                                                     14,380                                                                        17,453
  Inventories                                                                                                           3,353                                                                         5,022
  Other current assets                                                                                                  2,523                                                                         4,729
  Assets of discontinued operations                                                                    254                                                        473
                                                                                          -------------------- --------------                                           -------------------- --------------
     Total current assets                                                                          288,963                                                    318,107
                                                                                          -------------------- --------------                                           -------------------- --------------
                                                                                                                                                                                                             
NON-CURRENT ASSETS:
  Property and equipment, net                                                                                          58,249                                                                       115,604
  Goodwill                                                                                                             87,356                                                                        87,356
  Intangible assets, net                                                                                                9,300                                                                        28,219
  Student receivables, net                                                                                              3,958                                                                         3,916
  Deferred income tax assets, net                                                                                     137,716                                                                --
  Other assets                                                                                                         16,562                                                                        19,357
  Assets of discontinued operations                                                                  8,811                                                        975
                                                                                          -------------------- --------------                                           -------------------- --------------
TOTAL ASSETS                                                                                                 $        610,915                                                              $        573,534
                                                                                          ==================== ==============                                           ==================== ==============
                                                                                                                                                                                                             
                LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
  Short-term borrowings                                                                                      $         38,000                                                              $         10,000
  Accounts payable                                                                                                     25,906                                                                        23,808
  Accrued expenses:
     Payroll and related benefits                                                                                      38,789                                                                        30,481
     Advertising and production costs                                                                                  11,788                                                                        15,379
     Income taxes                                                                                                       1,061                                                                         1,633
     Other                                                                                                             24,082                                                                        28,857
  Deferred tuition revenue                                                                                             40,112                                                                        54,573
  Liabilities of discontinued operations                                                            13,067                                                     15,506
                                                                                          -------------------- --------------                                           -------------------- --------------
     Total current liabilities                                                                     192,805                                                    180,237
                                                                                          -------------------- --------------                                           -------------------- --------------
                                                                                                                                                                                                             
NON-CURRENT LIABILITIES:
  Deferred rent obligations                                                                                            45,927                                                                        67,433
  Other liabilities                                                                                                    25,197                                                                        21,072
  Liabilities of discontinued operations                                                             9,376                                                     22,859
                                                                                          -------------------- --------------                                           -------------------- --------------
     Total non-current liabilities                                                                  80,500                                                    111,364
                                                                                          -------------------- --------------                                           -------------------- --------------
STOCKHOLDERS’ EQUITY:
  Preferred stock                                                                                              --                                                                --
  Common stock                                                                                                            830                                                                           823
  Additional paid-in capital                                                                                          610,784                                                                       606,531
  Accumulated other comprehensive loss                                                                                   (880 )                                                                        (853 )
  Accumulated deficit                                                                                                 (57,518 )                                                                    (109,403 )
  Cost of shares in treasury                                                                      (215,606 )                                                 (215,165 )
                                                                                          -------------------- --------------                                           -------------------- --------------
     Total stockholders’ equity                                                                    337,610                                                    281,933
                                                                                          -------------------- --------------                                           -------------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                   $        610,915                                                              $        573,534
                                                                                          ==================== ==============                                           ==================== ==============
                                                                                                                                                                                                             
                                                                                                                               CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                                          UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
                                                                                                                                        COMPREHENSIVE INCOME (LOSS)
                                                                                                                         (In thousands, except per share amounts and percentages)
 
                                                                                                                                            For the Quarter Ended December 31,
                                                                            ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 % of                                                                       % of
                                                                                                                                                    Total                                                                                                            Total
                                                                                            2015                                                   Revenue                                                   2014                                                   Revenue
                                                                            ------------------------------------                         ---------------------------                         ------------------------------------                         ---------------------------
REVENUE:                                                                                                                                                                                                                                
  Tuition and registration fees                                                                $        198,445                                                99.2 %                                           $        215,818                                                99.2 %
  Other                                                                                1,502                                                 0.8 %                                   1,683                                                 0.8 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
     Total revenue                                                                   199,947                                                                                       217,501
                                                                            -------------------- --------------                                                                              -------------------- --------------
OPERATING EXPENSES:
  Educational services and facilities                                                                    66,931                                                33.5 %                                                     80,774                                                37.1 %
  General and administrative                                                                            122,190                                                61.1 %                                                    133,974                                                61.6 %
  Depreciation and amortization                                                                           5,077                                                 2.5 %                                                     12,470                                                 5.7 %
  Asset impairment                                                                     9,678                                                 4.8 %                                  14,203                                                 6.5 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
     Total operating expenses                                                        203,876                                               102.0 %                                 241,421                                               111.0 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
Operating loss                                                                        (3,929 )                                              -2.0 %                                 (23,920 )                                             -11.0 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
OTHER (EXPENSE) INCOME:
  Interest income                                                                                           246                                                 0.1 %                                                        237                                                 0.1 %
  Interest expense                                                                                         (333 )                                              -0.2 %                                                       (199 )                                              -0.1 %
  Loss on sale of business                                                                                 (161 )                                              -0.1 %                                             --                                                 0.0 %
  Miscellaneous (expense) income                                                        (115 )                                              -0.1 %                                     208                                                 0.1 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
     Total other (expense) income                                                       (363 )                                              -0.2 %                                     246                                                 0.1 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
PRETAX LOSS                                                                                              (4,292 )                                              -2.1 %                                                    (23,674 )                                             -10.9 %
(Benefit from) provision for income taxes                                           (146,531 )                                             -73.3 %                                     546                                                 0.3 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
                                                                                                                                                                                                                                                                                      
INCOME (LOSS) FROM CONTINUING OPERATIONS                                                                142,239                                                71.1 %                                                    (24,220 )                                             -11.1 %
Income (loss) from discontinued operations, net of tax                                   485                                                 0.2 %                                  (1,268 )                                              -0.6 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
NET INCOME (LOSS)                                                                    142,724                                                71.4 %                                 (25,488 )                                             -11.7 %
                                                                            -------------------- --------------                                                                              -------------------- --------------
                                                                                                                                                                                                                                                                                      
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
  Unrealized loss on investments                                                        (260 )                                                                                        (107 )
                                                                            -------------------- --------------                                                                              -------------------- --------------
COMPREHENSIVE INCOME (LOSS)                                                                    $        142,464                                                                                                 $        (25,595 )
                                                                            ==================== ==============                                                                              ==================== ==============
                                                                                                                                                                                                                                                                                      
NET INCOME (LOSS) PER SHARE - BASIC:
  Income (loss) from continuing operations                                                     $           2.09                                                                                                 $          (0.36 )
  Income (loss) from discontinued operations                                            0.01                                                                                         (0.02 )
                                                                            -------------------- --------------                                                                              -------------------- --------------
  Net income (loss) per share                                                                  $           2.10                                                                                                 $          (0.38 )
                                                                            ==================== ==============                                                                              ==================== ==============
NET INCOME (LOSS) PER SHARE - DILUTED:
  Income (loss) from continuing operations                                                     $           2.08                                                                                                 $          (0.36 )
  Income (loss) from discontinued operations                                  --                                                                                         (0.02 )
                                                                            -------------------- --------------                                                                              -------------------- --------------
  Net income (loss) per share                                                                  $           2.08                                                                                                 $          (0.38 )
                                                                            ==================== ==============                                                                              ==================== ==============
                                                                                                                                                                                                                                                                                      
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                                                               68,046                                                                                        67,330
                                                                            ==================== ==============                                                                              ==================== ==============
  Diluted                                                                             68,506                                                                                        67,330
                                                                            ==================== ==============                                                                              ==================== ==============
                                                                                                                                                                                                                                                                                      
                                                                                                                     CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                           CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME
                                                                                                                                        (LOSS)
                                                                                                               (In thousands, except per share amounts and percentages)
 
                                                                                                                                 For the Year Ended December 31,
                                                                    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   % of                                                                  % of
                                                                                                                                      Total                                                                                                       Total
                                                                                 2015                                                Revenue                                                2014                                                 Revenue
                                                                    ------------------------------                         ---------------------------                         -------------------------------                         ---------------------------
REVENUE:                                                                                                                                                                                                             
  Tuition and registration fees                                                        $  842,062                                                99.4 %                                           $   905,482                                                99.1 %
  Other                                                                  5,211                                                 0.6 %                              8,482                                                 0.9 %
                                                                    -------------------- --------                                                                              -------------------- ---------
     Total revenue                                                     847,273                                                                                  913,964
                                                                    -------------------- --------                                                                              -------------------- ---------
OPERATING EXPENSES:
  Educational services and facilities                                                     289,777                                                34.2 %                                               323,259                                                35.4 %
  General and administrative                                                              564,211                                                66.6 %                                               640,454                                                70.1 %
  Depreciation and amortization                                                            24,938                                                 2.9 %                                                53,382                                                 5.8 %
  Asset impairment                                                      60,515                                                 7.1 %                             36,141                                                 4.0 %
                                                                    -------------------- --------                                                                              -------------------- ---------
     Total operating expenses                                          939,441                                               110.9 %                          1,053,236                                               115.2 %
                                                                    -------------------- --------                                                                              -------------------- ---------
Operating loss                                                         (92,168 )                                             -10.9 %                           (139,272 )                                             -15.2 %
                                                                    -------------------- --------                                                                              -------------------- ---------
OTHER (EXPENSE) INCOME:
  Interest income                                                                             794                                                 0.1 %                                                   851                                                 0.1 %
  Interest expense                                                                           (835 )                                              -0.1 %                                                  (491 )                                              -0.1 %
  Loss on sale of business                                                                 (1,793 )                                              -0.2 %                                                     -                                                 0.0 %
  Miscellaneous (expense) income                                          (436 )                                              -0.1 %                                 86                                                 0.0 %
                                                                    -------------------- --------                                                                              -------------------- ---------
     Total other (expense) income                                       (2,270 )                                              -0.3 %                                446                                                 0.0 %
                                                                    -------------------- --------                                                                              -------------------- ---------
PRETAX LOSS                                                                               (94,438 )                                             -11.1 %                                              (138,826 )                                             -15.2 %
(Benefit from) provision for income taxes                             (147,454 )                                             -17.4 %                              3,736                                                 0.4 %
                                                                    -------------------- --------                                                                              -------------------- ---------
                                                                                                                                                                                                                                                                   
INCOME (LOSS) FROM CONTINUING OPERATIONS                                                   53,016                                                 6.3 %                                              (142,562 )                                             -15.6 %
Loss from discontinued operations, net of tax                           (1,131 )                                              -0.1 %                            (35,601 )                                              -3.9 %
                                                                    -------------------- --------                                                                              -------------------- ---------
NET INCOME (LOSS)                                                       51,885                                                 6.1 %                           (178,163 )                                             -19.5 %
                                                                    -------------------- --------                                                                              -------------------- ---------
                                                                                                                                                                                                                                                                   
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
  Unrealized loss on investments                                           (27 )                                                                                   (350 )
                                                                    -------------------- --------                                                                              -------------------- ---------
     Total other comprehensive loss                                        (27 )                                                                                   (350 )
                                                                    -------------------- --------                                                                              -------------------- ---------
COMPREHENSIVE INCOME (LOSS)                                                            $   51,858                                                                                                 $  (178,513 )
                                                                    ==================== ========                                                                              ==================== =========
                                                                                                                                                                                                                                                                   
NET INCOME (LOSS) PER SHARE - BASIC:
  Income (loss) from continuing operations                                             $     0.78                                                                                                 $     (2.12 )
  Loss from discontinued operations                                      (0.02 )                                                                                  (0.53 )
                                                                    -------------------- --------                                                                              -------------------- ---------
  Net income (loss) per share                                                          $     0.76                                                                                                 $     (2.65 )
                                                                    ==================== ========                                                                              ==================== =========
NET INCOME (LOSS) PER SHARE - DILUTED:
  Income (loss) from continuing operations                                             $     0.78                                                                                                 $     (2.12 )
  Loss from discontinued operations                                      (0.02 )                                                                                  (0.53 )
                                                                    -------------------- --------                                                                              -------------------- ---------
  Net income (loss) per share                                                          $     0.76                                                                                                 $     (2.65 )
                                                                    ==================== ========                                                                              ==================== =========
                                                                                                                                                                                                                                                                   
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                                                 67,860                                                                                   67,173
                                                                    ==================== ========                                                                              ==================== =========
  Diluted                                                               68,328                                                                                   67,173
                                                                    ==================== ========                                                                              ==================== =========
                                                                                                                                                                                                                                                                   
                                                                                  CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                 (In thousands)
 
                                                                                                                   For the Year
                                                                                                                                   Ended December 31,
                                                                                             -----------------------------------------------------------------------------------------------
                                                                                                             2015                                    2014
                                                                                             ------------------------------------                       ------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                                             $         51,885                                           $       (178,163 )
  Adjustments to reconcile net income (loss) to net cash used in
  operating activities:
     Asset impairment                                                                                                     60,515                                                     36,209
     Depreciation and amortization expense                                                                                24,938                                                     55,455
     Bad debt expense                                                                                                     21,980                                                     14,841
     Compensation expense related to share-based awards                                                                    2,857                                                      4,277
     Loss on sale of businesses, net                                                                                       1,793                                                        311
     Loss on disposition of property and equipment                                                                           663                                                         32
     Deferred income taxes                                                                                              (145,807 )                                                   14,250
     Changes in operating assets and liabilities:
         Accrued expenses and deferred rent obligations                                                                  (31,104 )                                                  (52,972 )
         Deferred tuition revenue                                                                                        (12,650 )                                                   (6,314 )
         Student receivables, net of allowance for doubtful accounts                                                     (22,477 )                                                  (10,531 )
         Other operating assets and liabilities                                                        25,721                                   3,981
                                                                                             -------------------- --------------                        -------------------- --------------
Net cash used in operating activities                                                                 (21,686 )                              (118,624 )
                                                                                             -------------------- --------------                        -------------------- --------------
                                                                                                                                                                                             
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of available-for-sale investments                                                                            (93,360 )                                                 (157,425 )
  Sales of available-for-sale investments                                                                                100,173                                                     64,920
  Purchases of property and equipment                                                                                    (11,695 )                                                  (13,156 )
  Proceeds on the sale of assets                                                                                           2,272                                             --
  Payments of cash upon sale of businesses, net of cash divested                                                          (4,013 )                                                     (387 )
  Purchase of equity method investment                                                                 (1,368 )                                (1,575 )
                                                                                             -------------------- --------------                        -------------------- --------------
Net cash used in investing activities                                                                  (7,991 )                              (107,623 )
                                                                                             -------------------- --------------                        -------------------- --------------
                                                                                                                                                                                             
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock                                                                                                 1,401                                                      1,354
  Borrowings from credit facility                                                                                         38,000                                                     10,000
  Payment on borrowings                                                                                                  (10,000 )                                           --
  Change in restricted cash                                                                           (26,883 )                               (10,374 )
                                                                                             -------------------- --------------                        -------------------- --------------
Net cash provided by financing activities                                                               2,518                                     980
                                                                                             -------------------- --------------                        -------------------- --------------
                                                                                                                                                                                             
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH
 AND CASH EQUIVALENTS:                                                                                    246                                     156
                                                                                             -------------------- --------------                        -------------------- --------------
                                                                                                                                                                                             
NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                                (26,913 )                                                 (225,111 )
DISCONTINUED OPERATIONS CASH ACTIVITY INCLUDED ABOVE:
  Add: Cash balance of discontinued operations, beginning of the period                                           --                                                        475
  Less: Cash balance of discontinued operations, end of the period                                                --                                             --
CASH AND CASH EQUIVALENTS, beginning of the period                                                     93,832                                 318,468
                                                                                             -------------------- --------------                        -------------------- --------------
CASH AND CASH EQUIVALENTS, end of the period                                                                    $         66,919                                           $         93,832
                                                                                             ==================== ==============                        ==================== ==============
                                                                                                                                                                                             
                                                     CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                        UNAUDITED SELECTED SEGMENT INFORMATION
                                                          (In thousands, except percentages)
 
                                                     For the Quarter Ended December 31,
                                                 ---------------------------------------------------------------------------------
                                                             2015                             2014
                                                 -----------------------------  -------------------- -----------------------------
REVENUE:                                                                         
   CTU                                                              $  91,481                                           $  82,202
   AIU                                              45,871                           44,749
                                                 -------------------- -------                        -------------------- -------
     Total University Group                                           137,352                                             126,951
   Corporate and Other                                  40                               40
                                                 -------------------- -------                        -------------------- -------
       Subtotal                                                       137,392                                             126,991
   Culinary Arts                                                       42,020                                              43,294
   Transitional Group                               20,535                           47,216
                                                 -------------------- -------                        -------------------- -------
     Total                                                          $ 199,947                                           $ 217,501
                                                 ==================== =======                        ==================== =======
                                                                                                                                   
OPERATING (LOSS) INCOME:
   CTU                                                              $  30,001                                           $  23,356
   AIU                                               1,538                             (304 )
                                                 -------------------- -------                        -------------------- -------
     Total University Group                                            31,539                                              23,052
   Corporate and Other                              (6,331 )                         (7,048 )
                                                 -------------------- -------                        -------------------- -------
       Subtotal                                                        25,208                                              16,004
   Culinary Arts                                                      (14,065 )                                           (16,136 )
   Transitional Group                              (15,072 )                        (23,788 )
                                                 -------------------- -------                        -------------------- -------
     Total                                                          $  (3,929 )                                         $ (23,920 )
                                                 ==================== =======                        ==================== =======
                                                                                                                                   
OPERATING (LOSS) MARGIN:
   CTU                                                                   32.8 %                                              28.4 %
   AIU                                                 3.4 %                           -0.7 %
                                                 -------------------- -------                        -------------------- -------
     Total University Group                                              23.0 %                                              18.2 %
   Corporate and Other                                                     NM                                                  NM
                                                 -----------------------------                       -----------------------------
       Subtotal                                                          18.3 %                                              12.6 %
   Culinary Arts                                                        -33.5 %                                             -37.3 %
   Transitional Group                                -73.4 %                          -50.4 %
                                                 -------------------- -------                        -------------------- -------
     Total                                            -2.0 %                          -11.0 %
                                                 ==================== =======                        ==================== =======
                                                                                                                                   
                                                      CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                         UNAUDITED SELECTED SEGMENT INFORMATION
                                                           (In thousands, except percentages)
 
                                                        For the Year Ended December 31,
                                                 -----------------------------------------------------------------------------------
                                                              2015                              2014
                                                 ------------------------------  -------------------- ------------------------------
REVENUE:                                                                          
   CTU                                                              $  348,215                                           $  336,573
   AIU                                              201,649                           198,896
                                                 -------------------- --------                        -------------------- --------
     Total University Group                                            549,864                                              535,469
   Corporate and Other                                  157                               230
                                                 -------------------- --------                        -------------------- --------
       Subtotal                                                        550,021                                              535,699
   Culinary Arts                                                       170,190                                              172,606
   Transitional Group                               127,062                           205,659
                                                 -------------------- --------                        -------------------- --------
     Total                                                          $  847,273                                           $  913,964
                                                 ==================== ========                        ==================== ========
                                                                                                                                     
OPERATING (LOSS) INCOME:
   CTU                                                              $   87,496                                           $   69,492
   AIU                                                5,520                            (9,412 )
                                                 -------------------- --------                        -------------------- --------
     Total University Group                                             93,016                                               60,080
   Corporate and Other                              (27,267 )                         (21,169 )
                                                 -------------------- --------                        -------------------- --------
       Subtotal                                                         65,749                                               38,911
   Culinary Arts                                                       (57,577 )                                            (66,556 )
   Transitional Group                              (100,340 )                        (111,627 )
                                                 -------------------- --------                        -------------------- --------
     Total                                                          $  (92,168 )                                         $ (139,272 )
                                                 ==================== ========                        ==================== ========
                                                                                                                                     
OPERATING (LOSS) MARGIN:
   CTU                                                                    25.1 %                                               20.6 %
   AIU                                                  2.7 %                            -4.7 %
                                                 -------------------- --------                        -------------------- --------
     Total University Group                                               16.9 %                                               11.2 %
   Corporate and Other                                                      NM                                                   NM
                                                 ------------------------------                       ------------------------------
       Subtotal                                                           12.0 %                                                7.3 %
   Culinary Arts                                                         -33.8 %                                              -38.6 %
   Transitional Group                                 -79.0 %                           -54.3 %
                                                 -------------------- --------                        -------------------- --------
     Total                                            -10.9 %                           -15.2 %
                                                 ==================== ========                        ==================== ========
                                                                                                                                     
                                                                                                                                                                          CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                                                                                     UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)
                                                                                                                                                                                         (In thousands)
 
Adjusted EBITDA                                                                     Q4 2015                                  Q3 2015                                  Q2 2015                                  Q1 2015                                  Q4 2014
------------------------------------------------------------------                      ----------------------------------                          ----------------------------------                          ----------------------------------                          ----------------------------------                          ----------------------------------
University Group and Corporate:
------------------------------------------------------------------
  Pre-tax loss from continuing operations                                                                  $         (4,292 )                                          $        (44,656 )                                          $        (20,750 )                                          $        (24,740 )                                          $        (23,674 )
  Transitional Group pre-tax loss                                                                                    15,182                                                      23,724                                                      32,624                                                      30,470                                                      23,788
  Culinary Arts pre-tax loss (gain)                                                                                  14,065                                                      33,171                                                      10,532                                                        (250 )                                                    15,927
  Interest expense (income), net                                                                                         87                                                           7                                                         (52 )                                                         2                                                         (38 )
  Depreciation and amortization (2)                                                                                   3,318                                                       3,454                                                       3,956                                                       4,361                                                       5,170
  Legal settlements (2) (3)                                                                                             200                                              --                                              --                                              --                                              --
  Stock-based compensation (2)                                                                                          404                                                         983                                                         530                                                         940                                                         966
  Asset impairments (2)                                                                                                 507                                              --                                              --                                              --                                              --
  Unused space charges (2) (4)                                                                                          114                                                        (385 )                                                      (348 )                                                       556                                                        (373 )
  Adjustment related to revenue
                                                                                                     101                                      348                                       94                                       93                                    1,354
   recognition (2) (5)
                                                                                        -------------------- --------------                         -------------------- --------------                         -------------------- --------------                         -------------------- --------------                         -------------------- --------------
     Adjusted EBITDA--University Group and
                                                                                                           $         29,686                                            $         16,646                                            $         26,586                                            $         11,432                                            $         23,120
      Corporate (6)
                                                                                        ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                             
     Memo: Advertising Expenses (2)                                                                        $         33,431                                            $         46,194                                            $         34,258                                            $         50,587                                            $         36,731
                                                                                        ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                             
Transitional Group, Culinary Arts and
Discontinued Operations:
------------------------------------------------------------------
  Pre-tax loss from discontinued operations                                                                $           (512 )                                          $           (544 )                                          $           (720 )                                          $           (352 )                                          $         (1,268 )
  Transitional Group pre-tax loss                                                                                   (15,182 )                                                   (23,724 )                                                   (32,624 )                                                   (30,470 )                                                   (23,788 )
  Culinary Arts pre-tax (loss) gain                                                                                 (14,065 )                                                   (33,171 )                                                   (10,532 )                                                       250                                                     (15,927 )
  Loss on sale of business (7)                                                                                          161                                                         715                                                         917                                              --                                              --
  Depreciation and amortization (7)                                                                                   1,759                                                       2,508                                                       3,231                                                       2,351                                                       7,319
  Legal settlements (3) (7)                                                                                  --                                              --                                                        (166 )                                                     1,485                                              --
  Asset impairments (7)                                                                                               9,171                                                      33,446                                                      11,372                                                       6,019                                                      14,203
  Unused space charges (4) (7)                                                                                       (2,002 )                                                     7,174                                                      (2,305 )                                                    (2,424 )                                                    (2,063 )
  Adjustment related to revenue
                                                                                                    (188  )                                   173                                       13                                      (67  )                                 1,029
   recognition (5) (7)
                                                                                        -------------------- --------------                         -------------------- --------------                         -------------------- --------------                         -------------------- --------------                         -------------------- --------------
     Adjusted EBITDA--Transitional, Culinary Arts and Discontinued                                         $        (20,858 )                                          $        (13,423 )                                          $        (30,814 )                                          $        (23,208 )                                          $        (20,495 )
     Operations (6) (8)
                                                                                        ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============
     Consolidated Adjusted EBITDA                                                                          $          8,828                                            $          3,223                                            $         (4,228 )                                          $        (11,776 )                                          $          2,625
                                                                                        ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============                         ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                             
(1)   The Company believes it is useful to present non-GAAP financial
                         measures which exclude certain significant items as a means to
                         understand the performance of its operations. As a general matter,
                         the Company uses non-GAAP financial measures in conjunction with
                         results presented in accordance with GAAP to help analyze the
                         performance of its operations, assist with preparing the annual
                         operating plan, and measure performance for some forms of
                         compensation. In addition, the Company believes that non-GAAP
                         financial information is used by analysts and others in the
                         investment community to analyze the Company’s historical results and
                         to provide estimates of future performance and that failure to
                         report non-GAAP measures could result in a misplaced perception that
                         the Company’s results have underperformed or exceeded expectations.
                          
                         We believe adjusted EBITDA allows us to compare our current
                         operating results with corresponding historical periods and with the
                         operational performance of other companies in our industry because
                         it does not give effect to potential differences caused by items we
                         do not consider reflective of underlying operating performance. We
                         also present adjusted EBITDA because we believe it is frequently
                         used by securities analysts, investors and other interested parties
                         as a measure of performance. In evaluating adjusted EBITDA,
                         investors should be aware that in the future we may incur expenses
                         similar to the adjustments presented above. Our presentation of
                         adjusted EBITDA should not be construed as an inference that our
                         future results will be unaffected by expenses that are unusual,
                         non-routine or non-recurring. Adjusted EBITDA has limitations as an
                         analytical tool, and you should not consider it in isolation, or as
                         a substitute for net income (loss), operating income (loss), or any
                         other performance measure derived in accordance and reported under
                         GAAP or as an alternative to cash flow from operating activities or
                         as a measure of our liquidity.
                          
                         Non-GAAP financial measures, when viewed in a reconciliation to
                         corresponding GAAP financial measures, provide an additional way of
                         viewing the company’s results of operations and the factors and
                         trends affecting the company’s business. Non-GAAP financial measures
                         should be considered as a supplement to, and not as a substitute
                         for, or superior to, the corresponding financial results presented
                         in accordance with GAAP.
                          
(2)                      Quarterly amounts relate to the University Group and Corporate.
                          
(3)                      Legal settlement amounts are net of insurance recoveries.
                          
(4)                      Unused space charges represent the net present value of remaining
                         lease obligations less an estimated amount for sublease income as
                         well as the subsequent accretion of these charges.
                          
(5)                      Revenue recognition adjustment relates to the accounting for
                         students who withdraw from one of our institutions prior to
                         completion of their program. This adjustment now reflects revenue
                         earned on a cash-basis of accounting beginning in the fourth quarter
                         of 2014 for these students. Q4 2014 amounts are cumulative for the
                         full year 2014 recorded during the fourth quarter of 2014.
                          
(6)                      Management assesses results of operations for the University Group
                         and Corporate separately from the Transitional Group and Culinary
                         Arts. As a result, management views adjusted EBITDA from the
                         University Group and Corporate separately from the remainder of the
                         organization, to assess results and make decisions. Accordingly, the
                         Transitional Group and Culinary Arts pre-tax losses are added back
                         to pre-tax loss from continuing operations and subtracted from
                         pre-tax loss from discontinued operations.
                          
(7)                      Quarterly amounts relate to the Transitional Group, Culinary Arts
                         and discontinued operations.
                          
(8)                      Quarterly adjusted EBITDA amounts for Culinary Arts separate from
                         the Transitional Group and discontinued operations include:
                          
                                                                      Q4 2015                                 Q3 2015                                 Q2 2015                                 Q1 2015                                 Q4 2014
                                                                          ------------------------------------                       ------------------------------------                       ------------------------------------                       ------------------------------------                       ------------------------------------
Pre-tax (loss) income                                                                        $        (14,065 )                                         $        (33,171 )                                         $        (10,532 )                                         $            250                                           $        (15,927 )
Depreciation and amortization                                                                  --                                             --                                             --                                             --                                                      4,504
Legal settlements                                                                              --                                             --                                             --                                                        775                                             --
Asset impairments                                                                                       9,005                                                     33,446                                                      9,687                                             --                                                     10,320
Unused space charges                                                                                      191                                                        209                                                       (982 )                                                     (377 )                                                       65
Cumulative adjustment related to revenue recognition                                   (97 )                                   150                                       5                                      54                                     514
                                                                          -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------                        -------------------- --------------
Total                                                                                        $         (4,966 )                                         $            634                                           $         (1,822 )                                         $            702                                           $           (524 )
                                                                          ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                                                                           

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160229006876r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160229006876/en/

SOURCE: Career Education Corporation

Investors: 
Alpha IR Group 
Sam Gibbons or Chris Hodges 
(312) 445-2870 
CECO@alpha-ir.com 
or 
Media: 
Career Education Corporation 
(847) 585-2600 
media@careered.com


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