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 Career Education Corporation Reports Results for Fourth Quarter and Full Year 2017
   Wednesday, February 21, 2018 4:18:21 PM ET

Career Education Corporation (CECO ) today reported operating and financial results for the fourth quarter and year ended December 31, 2017.

     
-------------------- -------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       FOURTH QUARTER 2017 RESULTS
                          
--------------------
    Total Company                            ?                                                                         Revenue of $143.1 million as compared to $155.3 million for the
                                                                                                                                    prior year quarter, with the decline primarily driven by substantial
                                                                                                                                    completion of the teach-out of our All Other Campuses segment
                        ?                         Operating income of $10.7 million as compared to an operating loss
                                                               of $55.9 million in the prior year
                        ?                         Ended the quarter with $180.1 million in cash, cash equivalents,
                                                               restricted cash and available-for-sale short-term investments
                                                                            
-------------------- -------------------- --------------------                                                                      --------------------------------------------------------------------
 
--------------------
  University Group                           ?                                                                         Revenue of $142.4 million as compared to $135.6 million in the prior
         and                                                                                                                        year quarter
      Corporate
 
                        ?                         Operating income of $25.5 million as compared to an operating loss
                                                               of $17.9 million in the prior year quarter
                        ?                         Adjusted operating income of $28.1 million as compared to $16.9
                                                               million in the prior year quarter (See GAAP to non-GAAP
                                                               reconciliation attached to this press release for further details)
                                                                            
-------------------- -------------------- --------------------                                                                      --------------------------------------------------------------------
                                                                                                                                     
  University Group                           ?                                                                         New student enrollments grew 15.4 percent as compared to the prior
     Key Metrics                                                                                                                    year quarter primarily driven by our investments in student serving
                                                                                                                                    processes and operations that support growth
                        ?                         Total student enrollments grew 3.3 percent driven by growth in new
                                                               student enrollments as well as improving retention trends
                                                                            
-------------------- -------------------- --------------------                                                                      --------------------------------------------------------------------
 
--------------------
     Teach-Outs                              ?                                                                         Operating loss of $14.8 million as compared to $38.1 million in the
                                                                                                                                    prior year quarter, with the improvement primarily driven by
                                                                                                                                    substantial completion of the teach-out of our All Other Campuses
                                                                                                                                    segment
                        ?                         Approximately 100 students remain as of December 31, 2017 within our
                                                               teach-out campuses, who are expected to complete their programs of
                                                               study by the end of 2018
                     --------------------                      --------------------------------------------------------------------
                                                                                                                                     


FULL YEAR 2017 HIGHLIGHTS - UNIVERSITY GROUP AND CORPORATE

-- Revenue increased 1.3 percent to $569.6 million as compared to the prior year

-- Operating income increased by 113.6 percent to $95.5 million as compared to the prior year

-- Adjusted operating income increased by 18.6 percent to $105.9 million as compared to the prior year

"We finished the year with strong momentum in our key operating metrics, as investments continued to improve student onboarding and learning experiences," said Todd Nelson, President and Chief Executive Officer. "Total enrollments at our University Group reached the highest level in the last four years and new student enrollments grew for the second consecutive quarter. Much of this momentum is a result of our focus on and execution within our student-serving processes and initiatives. Our cash balances are expected to grow in 2018 and allow us to continue investing in our students and employees. Overall, we remain committed to improving student experiences, retention and academic outcomes and are executing well against our objective of sustainable and responsible growth."

REVENUE

For the quarter and year ended December 31, 2017, total revenue was $143.1 million and $596.4 million, respectively, representing a decrease of 7.8 percent and 15.3 percent, respectively, compared to total revenue of $155.3 million and $704.4 million for the quarter and year ended December 31, 2016, respectively. The decrease was primarily driven by declining revenues within our teach-out campuses. There are seven campuses remaining to complete their teach-outs during 2018.

Total revenue for the University Group was $142.4 million and $569.6 million representing an increase of 5.0 percent and 1.3 percent, respectively, for the quarter and year ended December 31, 2017 as compared to the respective prior year periods.

                                                                                                                                                                                                                                      
                                                                                                                                                                                               For the Quarter Ended December 31,                                                                                                                                                                                                               For the Year Ended December 31,
                                                                                                                     ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                              Increase                                                                                                                                                           Increase
Revenue ($ in thousands)                                                                                                             2017                                                                          2016                                                                  (Decrease)                                                                      2017                                                                          2016                                                                             (Decrease)
-----------------------------------------------------------------------                                              ----------------------------------                                            ----------------------------------                                            -------------------------                                               ----------------------------------                                            ----------------------------------                                            ---------------------------------------------
                                                 CTU                                                                                    $         94,767                                                              $         94,696                                               0.1 %                                                               $        371,325                                                              $        369,319                                               0.5 %
                                                 AIU                                                                           47,633                                                     40,909                                                                 16.4 %                                                     198,251                                                    193,032                                                                  2.7 %
                                                                                                                     -------------------- --------------                                           -------------------- --------------                                                                                                                   -------------------- --------------                                           -------------------- --------------
                                                                                                                                                 142,400                                                                       135,605                                                                  5.0 %                                                                        569,576                                                                       562,351                                                                  1.3 %
                                                    Total University Group
                                                 Corporate and Other                                                   --                                             --                                                                   NM                                                --                                             --                                                                   NM
                                                                                                                     -------------------- --------------                                           -------------------- --------------                                                                                                                   -------------------- --------------                                           -------------------- --------------
                                                    Subtotal                                                                                     142,400                                                                       135,605                                                                  5.0 %                                                                        569,576                                                                       562,351                                                                  1.3 %
                                                 All Other Campuses (1)                                                           718                                                     19,650                                                                -96.3 %                                                      26,859                                                    142,041                                                                -81.1 %
                                                                                                                     -------------------- --------------                                           -------------------- --------------                                                                                                                   -------------------- --------------                                           -------------------- --------------
                                                    Total                                                                               $        143,118                                                              $        155,255                                                                 -7.8 %                                                               $        596,435                                                              $        704,392                                                                -15.3 %
                                                                                                                     ==================== ==============                                           ==================== ==============                                                                                                                   ==================== ==============                                           ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
(1)                                              Campuses included in All Other Campuses are in the process of
                                                 being taught out or have completed their teach-out as of December
                                                 31, 2017. Previously, these campuses were reported within two
                                                 segments, the former Transitional Group and Culinary Arts segments.
                                                  

TOTAL AND NEW STUDENT ENROLLMENTS

As of the end of 2017, total student enrollments for the University Group were 34,700 compared to 33,600 as of the prior year end representing a 3.3 percent increase. The increase in new and total student enrollments is primarily driven by our investments in student serving processes and operations that support growth.

                                
                                                                                                                                                 As of December 31,
                                                                       -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                Increase
Total Student Enrollments                                                          2017                                                                  2016                                                              (Decrease)
----------------------------                                           ----------------------------                                          ----------------------------                                          ---------------------------
   CTU                                                                   22,100                                             21,900                                               0.9 %
   AIU                                                                   12,600                                             11,700                                                                  7.7 %
                                                                       -------------------- ------                                           -------------------- ------
      Total University Group                                             34,700                                             33,600                                                                  3.3 %
                                                                       -------------------- ------                                           -------------------- ------
   All Other Campuses (1)                                                   100                                              3,000                                                                   NM
                                                                       -------------------- ------                                           -------------------- ------
      Total                                                              34,800                                             36,600                                                                 -4.9 %
                                                                       ==================== ======                                           ==================== ======
                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                       
                                                                                                                                                                                                  For the Quarter Ended December 31,                                                                                                                                                                           For the Year Ended December 31,
                                                                                                                        ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                        -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                 Increase                                                                                                                   Increase
New Student Enrollments                                                                                                                 2017                                                                          2016                                                                  (Decrease)                                                 2017                                                                      2016                                                              (Decrease)
--------------------------------------------------------------------------                                              ----------------------------------                                            ----------------------------------                                            -------------------------                          ----------------------------------                                            --------------------------                                            -------------------------
                                                CTU (2)                                                                            5,940                                                      5,530                                               7.4 %                                 22,110                                             20,770                                               6.5 %
                                                AIU (2)                                                                            4,770                                                      3,750                                                                 27.2 %                                 15,790                                             14,350                                                                 10.0 %
                                                                                                                        -------------------- --------------                                           -------------------- --------------                                                                                              -------------------- --------------                                           -------------------- ------
                                                   Total University Group (2)                                                     10,710                                                      9,280                                                                 15.4 %                                 37,900                                             35,120                                                                  7.9 %
                                                                                                                        -------------------- --------------                                           -------------------- --------------                                                                                              -------------------- --------------                                           -------------------- ------
                                                All Other Campuses (1)                                                    --                                             --                                                                   NM                           --                                              1,080                                                                   NM
                                                                                                                        -------------------- --------------                                           -------------------- --------------                                                                                              -------------------- --------------                                           -------------------- ------
                                                   Total                                                                          10,710                                                      9,280                                                                 15.4 %                                 37,900                                             36,200                                                                  4.7 %
                                                                                                                        ==================== ==============                                           ==================== ==============                                                                                              ==================== ==============                                           ==================== ======
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
(1)                                             All Other Campuses no longer enroll new students; students who
                                                re-enter after 365 days are reported as new student enrollments.
(2)                                             For the first half of 2017, new student enrollments were
                                                positively impacted by a change to how the Company records certain
                                                cancelled students. Excluding the impact of this change new
                                                student enrollments would have increased 6.2% for CTU, increased
                                                8.3% for AIU and increased 7.1% for the University Group for the
                                                year ended December 31, 2017 as compared to the prior year.
                                                 

OPERATING INCOME (LOSS)

For the quarter and year ended December 31, 2017, the Company recorded operating income of $10.7 million and $34.1 million, respectively, compared to operating loss of $55.9 million and $32.3 million for the quarter and year ended December 31, 2016, respectively. Total University Group and Corporate recorded operating income of $25.5 million and $95.5 million for the quarter and year ended December 31, 2017, respectively, compared to operating loss of $17.9 million and operating income of $44.7 million for the quarter and year ended December 31, 2016, respectively.

The operating income reported for the current year improved by $66.5 million primarily driven by reduced operating expenses associated with the substantial completion of the teach-out of our All Other Campuses segment, as well as continued optimization of our marketing and advertising spend. Additionally, the prior year included legal settlement charges of $32.0 million as compared to $6.5 million in the current year.

                                                                                                                                                                                                                          
                                                                                                                                                  For the Quarter Ended December 31,                                                                                                                                                                                           For the Year Ended December 31,
                                                                            -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                            -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                             Increase                                                                                                                                       Increase
Operating Income ($ in thousands)                                                       2017                                                                      2016                                                                  (Decrease)                                                                 2017                                                                      2016                                                                  (Decrease)
---------------------------------                                           ---------------------------                                               ---------------------------                                               -------------------------                                              ---------------------------                                               ---------------------------                                               -------------------------
   CTU                                                                                         $  30,553                                                                 $  28,719                                                  6.4 %                                                              $ 109,202                                                                 $  99,412                                                  9.8 %
   AIU                                                                            414                                                (38,634 )                                                                 101.1 %                                               8,401                                                (29,598 )                                                                 128.4 %
                                                                            -------------------- -------                                              -------------------- -------                                                                                                                     -------------------- -------                                              -------------------- -------
      Total University Group                                                                      30,967                                                                    (9,915 )                                                                 412.3 %                                                                117,603                                                                    69,814                                                                    68.5 %
   Corporate and Other                                                         (5,472 )                                               (7,937 )                                                                  31.1 %                                             (22,067 )                                              (25,097 )                                                                  12.1 %
                                                                            -------------------- -------                                              -------------------- -------                                                                                                                     -------------------- -------                                              -------------------- -------
      Subtotal                                                                                    25,495                                                                   (17,852 )                                                                 242.8 %                                                                 95,536                                                                    44,717                                                                   113.6 %
   All Other Campuses                                                         (14,783 )                                              (38,055 )                                                                  61.2 %                                             (61,400 )                                              (77,061 )                                                                  20.3 %
                                                                            -------------------- -------                                              -------------------- -------                                                                                                                     -------------------- -------                                              -------------------- -------
      Total                                                                                    $  10,712                                                                 $ (55,907 )                                                                 119.2 %                                                              $  34,136                                                                 $ (32,344 )                                                                 205.5 %
                                                                            ==================== =======                                              ==================== =======                                                                                                                     ==================== =======                                              ==================== =======
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

NET LOSS

For the quarter and year ended December 31, 2017, the Company recorded net loss of $44.4 million and $31.9 million, respectively, as compared to $32.9 million and $18.7 million in the respective prior year periods. The net loss for the current quarter and year were driven by a $52.7 million charge recorded as a result of the enactment of the Tax Cuts and Jobs Act in the fourth quarter of 2017, which resulted in a revaluation of our deferred tax assets and net state unrecognized tax positions at the new corporate federal income tax rate of 21%. The prior year quarter and year net loss was driven by $32.0 million of legal settlement charges.

ADJUSTED OPERATING INCOME (LOSS)

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash 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.)

As shown in the table below, adjusted operating income for the University Group and Corporate was $28.1 million and $105.9 million for the quarter and year ended December 31, 2017, respectively. Adjusted operating loss for All Other Campuses was $7.2 million and $39.0 million for the quarter and year ended December 31, 2017, respectively.

                                                                                                                                                                                                                                                           
                                                                                                                                   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                             For the Quarter Ended December 31,                                                                                               For the Year Ended December 31,
                                                                                                                                   -----------------------------------------------------------------------------------------------------------------------                                              -----------------------------------------------------------------------------------------------------------------------
Adjusted Operating Income (Loss)                                                                                                                   2017                                         2016                                                                              2017                                         2016
-------------------------------------------------------------------------------------                                              ----------------------------------                                                 ----------------------------------                                                ----------------------------------                                                 ----------------------------------
                                                   University Group and Corporate:
                                                   -------------------------------------
                                                   Operating income (loss) (1)                                                                        $         25,495                                                                   $        (17,852 )                                                                $         95,536                                                                   $         44,717
                                                   Depreciation and amortization (1)                                                                             2,631                                                                              2,690                                                                            10,326                                                                             11,164
                                                   Asset impairments (1)                                                                                --                                                                     --                                                                    --                                                                                237
                                                   Unused space charges (1) (2)                                                                                     (7 )                                                                               16                                                                                (7 )                                                                            1,134
                                                   Significant legal settlements (1)                                                 --                                                          32,000                                                 --                                                          32,000
                                                                                                                                   -------------------- --------------                                                -------------------- --------------                                               -------------------- --------------                                                -------------------- --------------
                                                      Adjusted Operating Income --
                                                                                                                                                      $         28,119                                                                   $         16,854                                                                  $        105,855                                                                   $         89,252
                                                      University Group and Corporate (1)
                                                                                                                                   ==================== ==============                                                ==================== ==============                                               ==================== ==============                                                ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                   Increase (Decrease)                                                                                            66.8 %                                                                                                                                                               18.6 %
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                   All Other Campuses
                                                   -------------------------------------
                                                   Operating loss (3)                                                                                 $        (14,783 )                                                                 $        (38,055 )                                                                $        (61,400 )                                                                 $        (77,061 )
                                                   Depreciation and amortization (3)                                                                                (9 )                                                                            3,071                                                                             3,664                                                                             11,583
                                                   Asset impairments (3)                                                                                --                                                                                927                                                                    --                                                                                927
                                                   Unused space charges (2) (3)                                                                                  1,016                                                                             20,596                                                                            12,174                                                                             34,719
                                                   Significant legal settlements (3)                                                          6,543                                                  --                                                          6,543                                                  --
                                                                                                                                   -------------------- --------------                                                -------------------- --------------                                               -------------------- --------------                                                -------------------- --------------
                                                      Adjusted Operating Loss --
                                                                                                                                                      $         (7,233    )                                                              $        (13,461   )                                                              $        (39,019    )                                                              $        (29,832                    )
                                                      All Other Campuses (3)
                                                                                                                                   ==================== ==============                                                ==================== ==============                                               ==================== ==============                                                ==================== ==============
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                   Increase (Decrease)                                                                                            46.3 %                                                                                                                                                              -30.8 %
                                                                                                                                                                                                                                                                                                                                                                                                                                
(1)                                                Amounts relate to the University Group and Corporate.
(2)                                                Unused space charges represent the net present value of remaining
                                                   lease obligations for vacated space less an estimated amount for
                                                   sublease income.
(3)                                                Amounts relate to All Other Campuses.

BALANCE SHEET AND CASH FLOW

Net cash provided by operating activities was $7.3 million compared to net cash used in operating activities of $9.8 million for the quarters ended December 31, 2017 and 2016, respectively. For the year ended December 31, 2017, net cash used in operations was $21.8 million as compared to net cash provided of $6.5 million for the year ended December 31, 2016. The increase in cash usage for the current year was primarily driven by $32.0 million of legal settlement payments made during the first quarter of 2017.

                                                                                                                                                                                                                          
                                                                                                                                                             For the Quarter Ended December 31,                                                                                                                                                                                For the Year Ended December 31,
                                                                                                 ----------------------------------------------------------------------------------------------------------------------------------------------------------                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          Increase                                                                                                                   Increase
Selected Cash Flow Items                                                                           2017                                                  2016                                                        (Decrease)                                                        2017                                                  2016                                                                           (Decrease)
------------------------------------------------------                                           -------  --------------------                                           --------                                               -------------------------                                              ---------  --------------------                                           -------                                                                 --------------------------
   Net cash provided by (used in) operating activities                                            $ 7,308                                                                 $ (9,789 )                                              174.7 %                                            $ (21,789 )                                                               $ 6,475                                                                  -436.5 %
   Capital expenditures                                                                           $ 2,906                                                                 $    777                                                                   274.0 %                                            $   6,332                                                                 $ 4,129                                                                                       53.4 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

As of December 31, 2017 and December 31, 2016, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $180.1 million and $207.2 million, respectively.

OUTLOOK

The Company is executing well against its objective of sustainable and responsible growth with student initiatives and investments in our University Group showing positive results and the teach-out of our All Other Campuses segment substantially complete. As a result, consistent with the objective of sustainable and responsible growth the Company is providing an outlook to its adjusted operating income and ending cash balance for 2018 and 2019. The Company currently expects the following results, subject to the key assumptions identified below (see the GAAP to non-GAAP reconciliation for adjusted operating income (loss) attached to this press release for further details):

Financial Outlook:

                                                                                                              
                                                                                            For the 1st Quarter Ending March 31,                                                                                                  For the Year Ending December 31,
                                                                             ------------------------------------------------------------------                                                               ------------------------------------------------------------------------
                                                                                2017            2018                                                                      2017               2018
                                                                             ---------                                           -------------                                                                --------                                           --------------------
Adjusted Operating Income
----------------------------------
   Total Company                                                                $15.8M                                             $22M - $24M                                                                  $66.8M                                                   $99M - $106M
                                                                                                                                                                                                                                                                  
   University Group and Corporate                                               $25.7M                                             $26M - $27M                                                                 $105.9M                                                  $110M - $115M
                                                                                                                                                                                                                                                                  
   All Other Campuses                                                          ($9.8M)                                           ($3M) - ($4M)                                                                ($39.0M)                                                 ($9M) - ($11M)
                                                                                                                                                                                                                                                                  
Cash, cash equivalents, restricted                                                                                                                                                                             $180.1M                                                  $220M - $225M
cash and short term investments
----------------------------------
                                                                                                                                                                                                                                                                  

We expect adjusted operating income for the total company to grow in 2019 as compared to 2018 and our ending cash balance for 2019 to increase as compared to 2018.

University Group Enrollment Outlook:

-- CTU -- New student enrollments for the first quarter of 2018 are expected to increase as compared to the prior year quarter.

-- AIU: -- The academic calendar redesign has caused significant variability in quarterly new enrollment trends due to the varying number of enrollment days in any given quarter.

-- As a result, we expect new student enrollments to decrease approximately 40 percent in the first quarter of 2018 as compared to the prior year quarter.

-- However, we expect this decrease to be more than offset by growth in new student enrollments in the second and third quarters of 2018, such that on a rolling three quarter basis we expect new student enrollments to reflect growth.

Operating income (loss), which is the most directly comparable GAAP measure to adjusted operating income (loss), may not follow the same trends as discussed in the outlook above because of adjustments made for unused space charges that represent the present value of future remaining lease obligations for vacated space less an estimated amount for sublease income as well as depreciation, amortization, asset impairment charges and significant legal settlements. The operating income (loss) and adjusted operating income (loss) and cash outlook provided above for 2018 and 2019 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs continues to trend in line with recent experiences, (ii) initiatives and investments in student-serving processes and operations continue to positively impact enrollment trends within the University Group, (iii) achievement of anticipated recovery rates for the Company’s real estate obligations and timing of any associated lease termination payments in line with our current expectations, (iv) no material changes in the legal or regulatory environment, and excludes legal and regulatory liabilities and other related impacts which are not probable and estimable at this time, and any impact of new or proposed regulations, including the "borrower defense to repayment" and gainful employment regulations and any modifications thereto, and (v) no material changes in the estimated amount of compensation expense that could be impacted by changes in the Company’s stock price. Although these estimates and assumptions are based upon management’s good faith beliefs regarding current events and actions that may be undertaken in the future, actual results could differ materially from these estimates.

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Wednesday, February 21, 2018 at 5:30 p.m. Eastern time to discuss its fourth quarter and full year 2017 results. 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 blended learning programs. The Company’s 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) learning platform. 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 "believe," "will," "expect," "estimate," "continue," "on track," "outlook," "remain" 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 or interest in our programs; 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, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of recently issued "defense to repayment" regulations and any modifications thereto; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; our ability to successfully defend litigation and other claims brought against us; the success of our initiatives to improve student experiences, retention and academic outcomes; the ability of our new student admissions and advising centers in Phoenix, Arizona, to achieve anticipated operating performance; 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; increased competition; the impact of management changes; and changes in the overall U.S. 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 year ended December 31, 2017 and its subsequent filings with the Securities and Exchange Commission.

                                                                                                 CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                          CONSOLIDATED BALANCE SHEETS
                                                                                                                (In thousands)
                                                                                                               
                                                                                                                        December 31,                                                                 December 31,
                                                                                                                            2017                                                      2016
                                                                                                               ------------------------------                          -------------------- ------------------------------
                                                                                                                                                                                                                           
                               ASSETS
CURRENT ASSETS:
  Cash and cash equivalents, unrestricted                                                                                         $   18,110                                                                   $   49,507
  Restricted cash                                                                                                                        789                                                                        1,375
  Restricted short-term investments                                                                                                    5,070                                                                        8,597
  Short-term investments                                                                                          156,178                                                   147,681
                                                                                                               -------------------- --------                                                -------------------- --------
     Total cash and cash equivalents, restricted cash and short-term                                                                 180,147                                                                      207,160
     investments
                                                                                                                                                                                                                           
  Student receivables, net                                                                                                            18,875                                                                       22,825
  Receivables, other, net                                                                                                              1,163                                                                          929
  Prepaid expenses                                                                                                                     7,722                                                                       14,446
  Inventories                                                                                                                          1,112                                                                        1,868
  Other current assets                                                                                                                 1,319                                                                          817
  Assets of discontinued operations                                                                                   382                                                       148
                                                                                                               -------------------- --------                                                -------------------- --------
     Total current assets                                                                                         210,720                                                   248,193
                                                                                                               -------------------- --------                                                -------------------- --------
                                                                                                                                                                                                                           
NON-CURRENT ASSETS:
  Property and equipment, net                                                                                                         33,230                                                                       40,512
  Goodwill                                                                                                                            87,356                                                                       87,356
  Intangible assets, net                                                                                                               7,900                                                                        8,500
  Student receivables, net                                                                                                             2,548                                                                        3,055
  Deferred income tax assets, net                                                                                                     98,084                                                                      158,272
  Other assets                                                                                                                         5,673                                                                        7,608
  Assets of discontinued operations                                                                                 1,585                                                     6,105
                                                                                                               -------------------- --------                                                -------------------- --------
TOTAL ASSETS                                                                                                                      $  447,096                                                                   $  559,601
                                                                                                               ==================== ========                                                ==================== ========
                                                                                                                                                                                                                           
                LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                                                                                $    8,515                                                                   $   10,099
  Accrued expenses:
     Payroll and related benefits                                                                                                     32,910                                                                       41,203
     Advertising and production costs                                                                                                  9,245                                                                       10,253
     Income taxes                                                                                                                      2,185                                                                        1,830
     Other                                                                                                                            31,233                                                                       69,244
  Deferred tuition revenue                                                                                                            22,897                                                                       28,364
  Liabilities of discontinued operations                                                                            5,701                                                     8,219
                                                                                                               -------------------- --------                                                -------------------- --------
     Total current liabilities                                                                                    112,686                                                   169,212
                                                                                                               -------------------- --------                                                -------------------- --------
                                                                                                                                                                                                                           
NON-CURRENT LIABILITIES:
  Deferred rent obligations                                                                                                           15,277                                                                       30,713
  Other liabilities                                                                                                                   22,143                                                                       31,751
  Liabilities of discontinued operations                                                                              785                                                     6,422
                                                                                                               -------------------- --------                                                -------------------- --------
     Total non-current liabilities                                                                                 38,205                                                    68,886
                                                                                                               -------------------- --------                                                -------------------- --------
                                                                                                                                                                                                                           
STOCKHOLDERS’ EQUITY:
  Preferred stock                                                                                                                          -                                                                            -
  Common stock                                                                                                                           843                                                                          835
  Additional paid-in capital                                                                                                         621,008                                                                      613,325
  Accumulated other comprehensive loss                                                                                                  (164 )                                                                       (258 )
  Accumulated deficit                                                                                                               (108,127 )                                                                    (76,230 )
  Cost of shares in treasury                                                                                     (217,355 )                                                (216,169 )
                                                                                                               -------------------- --------                                                -------------------- --------
     Total stockholders’ equity                                                                                   296,205                                                   321,503
                                                                                                               -------------------- --------                                                -------------------- --------
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                        $  447,096                                                                   $  559,601
                                                                                                               ==================== ========                                                ==================== ========
 
                                                                                                                           CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                                           UNAUDITED CONSOLIDATED STATEMENTS OF LOSS AND
                                                                                                                                        COMPREHENSIVE LOSS
                                                                                                                     (In thousands, except per share amounts and percentages)
                                                        
                                                                                                                                                            For the Quarter Ended December 31,
                                                                            --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 % of                                                                % of
                                                                                                                                                    Total                                                                                                     Total
                                                                                            2017                                                   Revenue                                               2016                                                Revenue
                                                                            ------------------------------------                         ---------------------------                         -----------------------------                         ---------------------------
REVENUE:                                                                                                                                                                                                                         
  Tuition and fees                                                                             $        142,557                                                99.6 %                                           $ 154,489                                                99.5 %
  Other                                                                                  561                                                 0.4 %                              766                                                 0.5 %
                                                                            -------------------- --------------                                                                              -------------------- -------
     Total revenue                                                                   143,118                                                                                155,255
                                                                            -------------------- --------------                                                                              -------------------- -------
OPERATING EXPENSES:
  Educational services and facilities                                                                    28,977                                                20.2 %                                              64,107                                                41.3 %
  General and administrative                                                                            100,807                                                70.4 %                                             140,367                                                90.4 %
  Depreciation and amortization                                                                           2,622                                                 1.8 %                                               5,761                                                 3.7 %
  Asset impairment                                                            --                                                 0.0 %                              927                                                 0.6 %
                                                                            -------------------- --------------                                                                              -------------------- -------
     Total operating expenses                                                        132,406                                                92.5 %                          211,162                                               136.0 %
                                                                            -------------------- --------------                                                                              -------------------- -------
Operating income (loss)                                                               10,712                                                 7.5 %                          (55,907 )                                             -36.0 %
                                                                            -------------------- --------------                                                                              -------------------- -------
OTHER INCOME (EXPENSE):
  Interest income                                                                                           572                                                 0.4 %                                                 362                                                 0.2 %
  Interest expense                                                                                         (111 )                                              -0.1 %                                                (115 )                                              -0.1 %
  Miscellaneous income                                                                   176                                                 0.1 %                              304                                                 0.2 %
                                                                            -------------------- --------------                                                                              -------------------- -------
     Total other income                                                                  637                                                 0.4 %                              551                                                 0.4 %
                                                                            -------------------- --------------                                                                              -------------------- -------
PRETAX INCOME (LOSS)                                                                                     11,349                                                 7.9 %                                             (55,356 )                                             -35.7 %
Provision for (benefit from) income taxes                                             55,982                                                39.1 %                          (25,326 )                                             -16.3 %
                                                                            -------------------- --------------                                                                              -------------------- -------
                                                                                                                                                                                                                                                                               
LOSS FROM CONTINUING OPERATIONS                                                                         (44,633 )                                             -31.2 %                                             (30,030 )                                             -19.3 %
Income (loss) from discontinued operations, net of tax                                   251                                                 0.2 %                           (2,846 )                                              -1.8 %
                                                                            -------------------- --------------                                                                              -------------------- -------
NET LOSS                                                                             (44,382 )                                             -31.0 %                          (32,876 )                                             -21.2 %
                                                                            -------------------- --------------                                                                              -------------------- -------
                                                                                                                                                                                                                                                                               
OTHER COMPREHENSIVE LOSS, net of tax:
  Foreign currency translation adjustments                                                                  (80 )                                                                                                    (220 )
  Unrealized loss on investments                                                        (228 )                                                                                 (125 )
                                                                            -------------------- --------------                                                                              -------------------- -------
    Total other comprehensive loss                                                      (308 )                                                                                 (345 )
                                                                            -------------------- --------------                                                                              -------------------- -------
COMPREHENSIVE LOSS                                                                             $        (44,690 )                                                                                               $ (33,221 )
                                                                            ==================== ==============                                                                              ==================== =======
                                                                                                                                                                                                                                                                               
NET LOSS PER SHARE - BASIC and DILUTED:
  Loss from continuing operations                                                              $          (0.64 )                                                                                               $   (0.44 )
  Income (loss) from discontinued operations                                            0.00                                                                                  (0.04 )
                                                                            -------------------- --------------                                                                              -------------------- -------
    Net loss per share                                                                         $          (0.64 )                                                                                               $   (0.48 )
                                                                            ==================== ==============                                                                              ==================== =======
                                                                                                                                                                                                                                                                               
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic and Diluted                                                                   69,105                                                                                 68,505
                                                                            ==================== ==============                                                                              ==================== =======
                                                                                                                                                                                                                                                                               
 
                                                                                                                      CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                                           CONSOLIDATED STATEMENTS OF LOSS AND
                                                                                                                                   COMPREHENSIVE LOSS
                                                                                                                (In thousands, except per share amounts and percentages)
 
                                                                                                                                 For the Year Ended December 31,
                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                        % of                                                               % of
                                                                                                                                           Total                                                                                                    Total
                                                                                   2017                                                   Revenue                                              2016                                                Revenue
                                                                   ------------------------------------                         --------------------------                         -----------------------------                         ---------------------------
REVENUE:                                                                                                                                                                                                               
  Tuition and fees                                                                    $        593,849                                               99.6 %                                           $ 700,525                                                99.5 %
  Other                                                                       2,586                                                0.4 %                            3,867                                                 0.5 %
                                                                   -------------------- --------------                                                                             -------------------- -------
     Total revenue                                                          596,435                                                                               704,392
                                                                   -------------------- --------------                                                                             -------------------- -------
OPERATING EXPENSES:
  Educational services and facilities                                                          143,344                                               24.0 %                                             235,100                                                33.4 %
  General and administrative                                                                   404,965                                               67.9 %                                             477,725                                                67.8 %
  Depreciation and amortization                                                                 13,990                                                2.3 %                                              22,747                                                 3.2 %
  Asset impairment                                                   --                                                0.0 %                            1,164                                                 0.2 %
                                                                   -------------------- --------------                                                                             -------------------- -------
     Total operating expenses                                               562,299                                               94.3 %                          736,736                                               104.6 %
                                                                   -------------------- --------------                                                                             -------------------- -------
Operating income (loss)                                                      34,136                                                5.7 %                          (32,344 )                                              -4.6 %
                                                                   -------------------- --------------                                                                             -------------------- -------
OTHER INCOME:
  Interest income                                                                                1,900                                                0.3 %                                               1,262                                                 0.2 %
  Interest expense                                                                                (451 )                                             -0.1 %                                                (584 )                                              -0.1 %
  Miscellaneous income                                                          665                                                0.1 %                              300                                                 0.0 %
                                                                   -------------------- --------------                                                                             -------------------- -------
     Total other income                                                       2,114                                                0.4 %                              978                                                 0.1 %
                                                                   -------------------- --------------                                                                             -------------------- -------
PRETAX INCOME (LOSS)                                                                            36,250                                                6.1 %                                             (31,366 )                                              -4.5 %
Provision for (benefit from) income taxes                                    67,125                                               11.3 %                          (16,550 )                                              -2.3 %
                                                                   -------------------- --------------                                                                             -------------------- -------
                                                                                                                                                                                                                                                                     
LOSS FROM CONTINUING OPERATIONS                                                                (30,875 )                                             -5.2 %                                             (14,816 )                                              -2.1 %
Loss from discontinued operations, net of tax                                (1,022 )                                             -0.2 %                           (3,896 )                                              -0.6 %
                                                                   -------------------- --------------                                                                             -------------------- -------
NET LOSS                                                                    (31,897 )                                             -5.3 %                          (18,712 )                                              -2.7 %
                                                                   -------------------- --------------                                                                             -------------------- -------
                                                                                                                                                                                                                                                                     
OTHER COMPREHENSIVE INCOME, net of tax:
  Foreign currency translation adjustments                                                         288                                                                                                      (77 )
  Unrealized (loss) gain on investments                                        (194 )                                                                                 699
                                                                   -------------------- --------------                                                                             -------------------- -------
     Total other comprehensive income                                            94                                                                                   622
                                                                   -------------------- --------------                                                                             -------------------- -------
COMPREHENSIVE LOSS                                                                    $        (31,803 )                                                                                              $ (18,090 )
                                                                   ==================== ==============                                                                             ==================== =======
                                                                                                                                                                                                                                                                     
NET LOSS PER SHARE - BASIC and DILUTED:
  Loss from continuing operations                                                     $          (0.45 )                                                                                              $   (0.22 )
  Loss from discontinued operations                                           (0.01 )                                                                               (0.05 )
                                                                   -------------------- --------------                                                                             -------------------- -------
    Net loss per share                                                                $          (0.46 )                                                                                              $   (0.27 )
                                                                   ==================== ==============                                                                             ==================== =======
                                                                                                                                                                                                                                                                     
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic and Diluted                                                          68,949                                                                                68,373
                                                                   ==================== ==============                                                                             ==================== =======
                                                                                                                                                                                                                                                                     
 
                                                                              CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                             (In thousands)
                                                                       
                                                                                                                        For the Year Ended December 31,
                                                                                           -----------------------------------------------------------------------------------------
                                                                                                           2017                                 2016
                                                                                           ------------------------------------                       ------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                                                    $        (31,897 )                                         $  (18,712 )
  Adjustments to reconcile net loss to net cash (used in) provided by
  operating activities:
     Asset impairment                                                                                           --                                                1,164
     Depreciation and amortization expense                                                                              13,990                                               22,747
     Bad debt expense                                                                                                   27,436                                               31,885
     Compensation expense related to share-based awards                                                                  4,970                                                3,237
     Deferred income taxes                                                                                              64,225                                              (18,087 )
     Gain on disposition of property and equipment                                                              --                                                 (438 )
     Changes in operating assets and liabilities:
         Student receivables, gross                                                                                      5,129                                                6,925
         Allowance for doubtful accounts                                                                               (28,075 )                                            (29,033 )
         Other receivables, net                                                                                           (257 )                                              1,127
         Inventories, prepaid expenses, and other current assets                                                         8,742                                                2,783
         Deposits and other non-current assets                                                                           1,706                                                1,634
         Accounts payable                                                                                               (1,588 )                                            (16,264 )
         Accrued expenses and deferred rent obligations                                                                (80,703 )                                             29,254
         Deferred tuition revenue                                                                    (5,467 )                         (11,747 )
                                                                                           -------------------- --------------                        -------------------- --------
Net cash (used in) provided by operating activities                                                 (21,789 )                           6,475
                                                                                           -------------------- --------------                        -------------------- --------
                                                                                                                                                                                     
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of available-for-sale investments                                                                         (256,243 )                                           (160,590 )
  Sales of available-for-sale investments                                                                              250,928                                              126,830
  Purchases of property and equipment                                                                                   (6,332 )                                             (4,129 )
  Proceeds on the sale of assets                                                                                --                                                3,600
  Payments of cash upon sale of businesses                                                   --                               (62 )
                                                                                           -------------------- --------------                        -------------------- --------
Net cash used in investing activities                                                               (11,647 )                         (34,351 )
                                                                                           -------------------- --------------                        -------------------- --------
                                                                                                                                                                                     
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock                                                                                               2,722                                                  773
  Payment on borrowings                                                                                         --                                              (38,000 )
  Payments of employee tax associated with stock compensation                                        (1,187 )                            (563 )
                                                                                           -------------------- --------------                        -------------------- --------
Net cash provided by (used in) financing activities                                                   1,535                           (37,790 )
                                                                                           -------------------- --------------                        -------------------- --------
                                                                                                                                                                                     
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH
   AND CASH EQUIVALENTS:                                                                                (82 )                            (192                    )
                                                                                           -------------------- --------------                        -------------------- --------
                                                                                                                                                                                     
NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                              (31,983 )                                            (65,858 )
CASH AND CASH EQUIVALENTS, beginning of the period                                                   50,882                           116,740
                                                                                           -------------------- --------------                        -------------------- --------
CASH AND CASH EQUIVALENTS, end of the period                                                                  $         18,899                                           $   50,882
                                                                                           ==================== ==============                        ==================== ========
                                                                                                                                                                                     
                                                                     
                                                            CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                               UNAUDITED SELECTED SEGMENT INFORMATION
                                                                 (In thousands, except percentages)
                                                                                                                                                 
                                                                               For the Quarter Ended December 31,
                                                 -----------------------------------------------------------------------------------------
                                                                 2017                                    2016
                                                 ------------------------------------  -------------------- ------------------------------------
REVENUE:
   CTU                                                              $         94,767                                           $         94,696
   AIU                                                     47,633                                  40,909
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                  142,400                                                    135,605
   Corporate and Other                             --                          --
                                                 -------------------- --------------                        -------------------- --------------
       Subtotal                                                              142,400                                                    135,605
   All Other Campuses                                         718                                  19,650
                                                 -------------------- --------------                        -------------------- --------------
     Total                                                          $        143,118                                           $        155,255
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
OPERATING INCOME (LOSS):
   CTU                                                              $         30,553                                           $         28,719
   AIU                                                        414                                 (38,634 )
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                   30,967                                                     (9,915 )
   Corporate and Other                                     (5,472 )                                (7,937 )
                                                 -------------------- --------------                        -------------------- --------------
       Subtotal                                                               25,495                                                    (17,852 )
   All Other Campuses                                     (14,783 )                               (38,055 )
                                                 -------------------- --------------                        -------------------- --------------
     Total                                                          $         10,712                                           $        (55,907 )
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
OPERATING MARGIN (LOSS):
   CTU                                                                          32.2 %                                                     30.3 %
   AIU                                                        0.9 %                                 -94.4 %
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                     21.7 %                                                     -7.3 %
   Corporate and Other                                                            NM                                                         NM
                                                 ------------------------------------                       ------------------------------------
       Subtotal                                                                 17.9 %                                                    -13.2 %
   All Other Campuses                                                             NM                                                         NM
                                                 ------------------------------------                       ------------------------------------
     Total                                                    7.5 %                                 -36.0 %
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
 
                                                            CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                               UNAUDITED SELECTED SEGMENT INFORMATION
                                                                 (In thousands, except percentages)
                             
                                                                                 For the Year Ended December 31,
                                                 -----------------------------------------------------------------------------------------------
                                                                 2017                                    2016
                                                 ------------------------------------  -------------------- ------------------------------------
REVENUE:                                                                                
   CTU                                                              $        371,325                                           $        369,319
   AIU                                                    198,251                                 193,032
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                  569,576                                                    562,351
   Corporate and Other                             --                          --
                                                 -------------------- --------------                        -------------------- --------------
       Subtotal                                                              569,576                                                    562,351
   All Other Campuses                                      26,859                                 142,041
                                                 -------------------- --------------                        -------------------- --------------
     Total                                                          $        596,435                                           $        704,392
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
OPERATING INCOME (LOSS):
   CTU                                                              $        109,202                                           $         99,412
   AIU                                                      8,401                                 (29,598 )
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                  117,603                                                     69,814
   Corporate and Other                                    (22,067 )                               (25,097 )
                                                 -------------------- --------------                        -------------------- --------------
       Subtotal                                                               95,536                                                     44,717
   All Other Campuses                                     (61,400 )                               (77,061 )
                                                 -------------------- --------------                        -------------------- --------------
     Total                                                          $         34,136                                           $        (32,344 )
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
OPERATING MARGIN (LOSS):
   CTU                                                                          29.4 %                                                     26.9 %
   AIU                                                        4.2 %                                 -15.3 %
                                                 -------------------- --------------                        -------------------- --------------
     Total University Group                                                     20.6 %                                                     12.4 %
   Corporate and Other                                                            NM                                                         NM
                                                 ------------------------------------                       ------------------------------------
       Subtotal                                                                 16.8 %                                                      8.0 %
   All Other Campuses                                      -228.6 %                                 -54.3 %
                                                 -------------------- --------------                        -------------------- --------------
     Total                                                    5.7 %                                  -4.6 %
                                                 ==================== ==============                        ==================== ==============
                                                                                                                                                 
 
                                                                                                                                         CAREER EDUCATION CORPORATION AND SUBSIDIARIES
                                                                                                                                    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1)
                                                                                                                                            (In thousands, unless otherwise noted)
                                                                                                                                                
                                                                                           For the Quarter Ended December 31,                                                                                                             For the Year Ended December 31,
                                                             -----------------------------------------------------------------------------------------------                                              -----------------------------------------------------------------------------------------------
                                                                                                         ACTUAL                                                                                                                                       ACTUAL
                                                             -----------------------------------------------------------------------------------------------                                              -----------------------------------------------------------------------------------------------
Adjusted Operating Income (Loss)                                             2017                                    2016                                                                              2017                                    2016
---------------------------------------                      ----------------------------------                         ----------------------------------                                                ----------------------------------                         ----------------------------------
  University Group and Corporate:
---------------------------------------
  Operating income (loss) (2) (3)                                               $         25,495                                           $        (17,852 )                                                                $         95,536                                           $         44,717
  Depreciation and amortization (3)                                                        2,631                                                      2,690                                                                            10,326                                                     11,164
  Asset impairments (3)                                                           --                                             --                                                                    --                                                        237
  Unused space charges (3) (4)                                                                (7 )                                                       16                                                                                (7 )                                                    1,134
  Significant legal settlements (3)                            --                                  32,000                                                 --                                  32,000
                                                             -------------------- --------------                        -------------------- --------------                                               -------------------- --------------                        -------------------- --------------
     Adjusted Operating Income --
                                                                                $         28,119                                           $         16,854                                                                  $        105,855                                           $         89,252
     University Group and Corporate (5)
                                                             ==================== ==============                        ==================== ==============                                               ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                          
  All Other Campuses:
---------------------------------------
  Operating loss (2) (6)                                                        $        (14,783 )                                         $        (38,055 )                                                                $        (61,400 )                                         $        (77,061 )
  Depreciation and amortization (6)                                                           (9 )                                                    3,071                                                                             3,664                                                     11,583
  Asset impairments (6)                                                           --                                                        927                                                                    --                                                        927
  Unused space charges (4) (6)                                                             1,016                                                     20,596                                                                            12,174                                                     34,719
  Significant legal settlements (6)                                     6,543                          --                                                          6,543                          --
                                                             -------------------- --------------                        -------------------- --------------                                               -------------------- --------------                        -------------------- --------------
     Adjusted Operating Loss --
                                                                                $         (7,233 )                                         $        (13,461   )                                                              $        (39,019 )                                         $        (29,832                    )
     All Other Campuses (5)
                                                             ==================== ==============                        ==================== ==============                                               ==================== ==============                        ==================== ==============
                                                                                                                                                                                                                                                                                                          
                                                                                                                                          
                                                         ------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------
                                                                                                For the 1st Quarter Ending March 31,                                                                                                                             For the Year Ending December 31,
                                                         ------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------
                                                                        ACTUAL                                  OUTLOOK                                                    ACTUAL                                     OUTLOOK
                                                         ------------------------------------                     -------------------- ------------------------------------                     -------------------- ------------------------------------                     -------------------- ------------------------------------------
                                                                         2017                                                       2018                                                                          2017                                                          2018
                                                         ------------------------------------                                          ------------------------------------                                          ------------------------------------                                          ------------------------------------------
Total Company                                                                                                                                                                                                                              
-----------------------------------
  Operating income (2)                                                                 $9.8M                                                                   $20M - $22M                                                                        $34.1M                                                                         $84M - $91M
  Depreciation and amortization                                                         3.9M                                                                             2                                                                         14.0M                                                                                  10
  Asset impairments                                                           --                                                                --                                                                --                                                                      --
  Unused space charges (4)                                                              2.1M                                                                --                                                                         12.2M                                                                                   5
  Significant legal settlements                            --                                             --                                                                          6.5M                                                   --
                                                         -------------------- --------------                                           -------------------- --------------                                           ------------------------------------                                          -------------------- --------------------
  Adjusted Operating Income                                                           $15.8M                                                                   $22M - $24M                                                                        $66.8M                                                                        $99M - $106M
                                                         ====================================                                          ====================================                                          ====================================                                          ==========================================
                                                                                                                                                                                                                                                                                                                         
University Group and Corporate
-----------------------------------
  Operating income (2) (3)                                                            $23.1M                                                                   $24M - $25M                                                                        $95.5M                                                                       $100M - $105M
  Depreciation and amortization (3)                                                     2.6M                                                                             2                                                                         10.4M                                                                                  10
  Asset impairments (3)                                                       --                                                                --                                                                --                                                                      --
  Unused space charges (3) (4)                                                --                                                                --                                                                --                                                                      --
  Significant legal settlements (3)                        --                                             --                                             --                                                   --
                                                         -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
  Adjusted Operating Income (5)                                                       $25.7M                                                                   $26M - $27M                                                                       $105.9M                                                                       $110M - $115M
                                                         ====================================                                          ====================================                                          ====================================                                          ==========================================
                                                                                                                                                                                                                                                                                                                         
All Other Campuses
-----------------------------------
  Operating loss (2) (6)                                                            ($13.3M)                                                                 ($3M) - ($4M)                                                                      ($61.4M)                                                                     ($14M) - ($16M)
  Depreciation and amortization (6)                                                     1.4M                                                                --                                                                          3.7M                                                                      --
  Asset impairments (6)                                                       --                                                                --                                                                --                                                                      --
  Unused space charges (4) (6)                                                          2.1M                                                                --                                                                         12.2M                                                                                   5
  Significant legal settlements (6)                        --                                             --                                                                          6.5M                                                   --
                                                         -------------------- --------------                                           -------------------- --------------                                           ------------------------------------                                          -------------------- --------------------
  Adjusted Operating Loss (5)                                                        ($9.8M)                                                                 ($3M) - ($4M)                                                                      ($39.0M)                                                                      ($9M) - ($11M)
                                                         ====================================                                          ====================================                                          ====================================                                          ==========================================
                                                                                                                                                                                                                                                                                                    
(1)   The Company believes it is useful to present non-GAAP financial
                         measures which exclude certain significant and non-cash 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.
                                                                                                                          
                         The Company believes adjusted operating income (loss) allows it to                              ity.
                         analyze and assess its ongoing operations and compare current
                         operating results with the operational performance of other
                         companies in its industry because it does not give effect to
                         potential differences caused by items it does not consider
                         reflective of underlying operating performance, such as unused space
                         charges and significant legal reserves. In evaluating adjusted
                         operating income (loss), investors should be aware that in the
                         future the Company may incur expenses similar to the adjustments
                         presented above. The presentation of adjusted operating income
                         (loss) should not be construed as an inference that the Company’s
                         future results will be unaffected by expenses that are unusual,
                         non-routine or non-recurring. Adjusted operating income (loss) has
                         limitations as an analytical tool, and it should not be considered
                         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 liquid
                                                                                                                          
                         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)                      Operating income (loss) for the University Group and Corporate and
                         operating loss for All Other Campuses make up the components of
                         operating income (loss). A reconciliation of these components for
                         the quarters and years ended December 31, 2017 and 2016 is presented
                         below:
                                                                                                                                                   
                                                                                                       For the Quarter Ended December 31,                                                                                             For the Year Ended December 31,
                                                                                ---------------------------------------------------------------------------------                                            ---------------------------------------------------------------------------------
                                                                                                                     ACTUAL                                                                                                                       ACTUAL
                                                                                ---------------------------------------------------------------------------------                                            ---------------------------------------------------------------------------------
                                                                                            2017                             2016                                                                     2017                             2016
                                                                                -----------------------------                       -----------------------------                                            -----------------------------                       -----------------------------
Operating income (loss) for University Group and Corporate                                         $  25,495                                           $ (17,852 )                                                              $  95,536                                           $  44,717
Operating loss for All Other Campuses                                             (14,783 )                        (38,055 )                                             (61,400 )                        (77,061 )
                                                                                -------------------- -------                        -------------------- -------                                             -------------------- -------                        -------------------- -------
Operating income (loss)                                                                            $  10,712                                           $ (55,907 )                                                              $  34,136                                           $ (32,344 )
                                                                                ==================== =======                        ==================== =======                                             ==================== =======                        ==================== =======
                                                                                                                                                                                                                                                                                               
(3)   Amounts relate to the University Group and Corporate.
                          
(4)                      Unused space charges represent the net present value of remaining
                         lease obligations for vacated space less an estimated amount for
                         sublease income. These charges relate to exiting leased space as the
                         Company continues to right-size the organization and therefore are
                         not considered representative of ongoing operations.
                          
(5)                      Management assesses results of operations for the University Group
                         and Corporate separately from All Other Campuses. As All Other
                         Campuses have been announced for teach-out or have been taught out,
                         management views these operations as not reflective of the ongoing
                         business. As a result, management views adjusted operating income
                         from the University Group and Corporate separately from the
                         remainder of the organization, to assess results and make decisions.
                          
(6)                      Amounts relate to All Other Campuses.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180221006353r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180221006353/en/

SOURCE: Career Education Corporation

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