-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JYpzjmKmLN4T0znnysBQSiDZnrHqTvNmQTkMkcNUSFffUBhPjMKyfOu+fNE1Z0o4 rvRWC/rjVD0O4GdFiOuduw== 0001157523-05-009560.txt : 20051102 0001157523-05-009560.hdr.sgml : 20051102 20051102164530 ACCESSION NUMBER: 0001157523-05-009560 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051102 DATE AS OF CHANGE: 20051102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAREER EDUCATION CORP CENTRAL INDEX KEY: 0001046568 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 363932190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23245 FILM NUMBER: 051173749 BUSINESS ADDRESS: STREET 1: 2895 GREENSPOINT STREET 2: SUITE 600 CITY: HOFFMAN ESTATES STATE: IL ZIP: 60195 BUSINESS PHONE: 8477813600 MAIL ADDRESS: STREET 1: 2800 WEST HIGGINS ROAD STREET 2: SUITE 790 CITY: HOFFMAN ESTATES STATE: IL ZIP: 60195 8-K 1 a5011294.txt CAREER EDUCATION CORPORATION 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): November 2, 2005 ------------------- Career Education Corporation -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-23245 36-3932190 -------- -------- ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 2895 Greenspoint Parkway, Suite 600, Hoffman Estates, IL 60195 -------------------------------------------------------- ------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (847) 781-3600 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On November 2, 2005, Career Education Corporation (the "Registrant") issued a press release to report the Registrant's financial results for the third quarter ended September 30, 2005. A copy of the Registrant's release is attached hereto as Exhibit 99.1, and the information contained therein is incorporated herein by reference. The information contained in Item 2.02 to this Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and the information shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits. (a) None. (b) None. (c) Exhibits Exhibit Number Description of Exhibits ------ ----------------------- 99.1 Press Release of Registrant dated November 2, 2005, reporting the Registrant's financial results for the third quarter ended September 30, 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CAREER EDUCATION CORPORATION By: /s/ Janice L. Block ------------------------------ Senior Vice President, General Counsel, and Corporate Secretary Dated: November 2, 2005 Exhibit Index ------------- Exhibit Number Description of Exhibits - ------ ----------------------- 99.1 Press Release of Registrant dated November 2, 2005, reporting the Registrant's financial results for the third quarter ended September 30, 2005. EX-99.1 2 a5011294ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Career Education Corporation Reports Results for the Third Quarter 2005 and Announces Third Online Brand; Third Quarter Revenue Increased 14%; Third Quarter Net Income Increased 32% HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--Nov. 2, 2005--Career Education Corporation (Nasdaq:CECO) today reported financial results for its third quarter ended September 30, 2005. RESULTS OF OPERATIONS Three Months Ended September 30, 2005 -- Third quarter 2005 consolidated revenue increased 14% to $497.5 million, from $436.0 million during the third quarter 2004. The increase is primarily attributable to an approximate 12% increase in student population from July 31, 2004, to July 31, 2005, as well as price increases and student enrollment mix changes. -- Third quarter 2005 consolidated income from operations increased 21%, to $83.7 million, from $69.4 million during the third quarter 2004. Operating profit margin percentage was 16.8%, an increase of 90 basis points from 15.9% during the third quarter 2004. -- Third quarter 2005 consolidated net income was $54.9 million, or $0.53 per diluted share, an increase of 32% from third quarter 2004 net income of $41.5 million, or $0.40 per diluted share. Nine Months Ended September 30, 2005 -- During the nine months ended September 30, 2005, consolidated revenue was $1.505 billion, a 22% increase from $1.237 billion during the nine months ended September 30, 2004. -- Income from operations during the nine months ended September 30, 2005, increased 37% to $264.4 million, from $193.3 million during the nine months ended September 30, 2004. Operating profit margin percentage was 17.6%, an increase of 200 basis points from 15.6% during the nine months ended September 30, 2004. -- For the nine months ended September 30, 2005, we reduced our effective income tax rate from 39.25% to 38.25%. The change was affected during the third quarter 2005. The reduction of our effective income tax rate increased third quarter net income per share by approximately $0.02. -- During the nine months ended September 30, 2005, net income was $163.6 million, or $1.57 per diluted share, a 40% increase from $116.8 million, or $1.11 per diluted share, during the nine months ended September 30, 2004. CASH FLOWS AND FINANCIAL POSITION Cash Flows -- Third quarter 2005 net cash provided by operating activities was $106.7 million, a 15% decrease from $125.6 million during the third quarter 2004. The decrease is primarily attributable to a decline in cash provided from changes in net operating assets and liabilities, offset, in part, by increases in net income and depreciation and amortization expense during the third quarter 2005 relative to the third quarter 2004. -- Capital expenditures decreased 30% to $28.3 million, from $40.5 million during the third quarter 2004. Capital expenditures during the third quarter 2005 represented approximately 5.7% of total third quarter 2005 revenue. Financial Position -- As of September 30, 2005 and 2004, respectively, cash, cash equivalents, and available-for-sale investments totaled $343.9 million and $274.5 million. -- Net student receivables as of September 30, 2005, was $84.3 million, a 28% decrease from $116.8 million as of September 30, 2004. Our allowance for doubtful accounts as a percentage of gross student receivables as of September 30, 2005, increased to 37.5%, from 28.0% as of September 30, 2004. -- Quarterly days sales outstanding ("DSO") were 17 days as of September 30, 2005, representing a nine-day decrease from DSO as of September 31, 2004, of 26 days. We calculate DSO by dividing the sum of net student receivables and net other receivables by average daily revenue for the quarter. Average daily revenue for the quarter is computed by dividing total revenue by the total number of days in the quarter. STOCK REPURCHASE PROGRAM In August 2005, our Board of Directors authorized the use of up to $300.0 million for the repurchase of shares of our outstanding common stock. Pursuant to this stock repurchase program, we may repurchase shares of our outstanding common stock on the open market or in private transactions from time to time, depending on factors including market conditions and corporate and regulatory requirements. The stock repurchase program does not have an expiration date and may be suspended or discontinued at any time. During the third quarter 2005, we repurchased approximately 5.3 million shares of our common stock for approximately $200.2 million at an average price of approximately $37.97 per share. In accordance with the stock repurchase program, we are authorized to use up to an additional $99.8 million to repurchase additional shares of our outstanding common stock. Our stock repurchases during the third quarter 2005 decreased third quarter 2005 diluted weighted average shares outstanding by approximately 2.5 million shares and increased third quarter 2005 diluted net income per share by approximately $0.01. POPULATION AND NEW STUDENT START DATA CEC total student population and new student start data includes the results of both the Online Educational Group ("OEG") segment and the Colleges, Schools and University ("CSU") segment. Student Population -- CEC total student population as of October 31, 2005, was approximately 107,300, representing a 8% increase from total student population as of October 31, 2004, of approximately 99,500. -- OEG student population as of October 31, 2005, was approximately 32,000, representing a 53% increase from OEG student population as of October 31, 2004, of approximately 20,900. -- As previously disclosed, the Gibbs division schools, which are included in the CSU segment, have experienced a significant decline in student population relative to student population in prior periods. Excluding the student population of the Gibbs division schools, CEC student population increased 12% from October 31, 2004, to October 31, 2005. We have devoted increased attention to our schools within the Gibbs division to improve the division's performance. New Student Starts -- New student starts during the third quarter 2005, including results of both our OEG and CSU segments, were approximately 33,750, compared to new student starts during the third quarter 2004 of approximately 33,500. NEW STUDENT OFFERING "We are pleased with the progress we are making on many fronts of our business" said John Larson, Chairman and Chief Executive Officer and President of Career Education Corporation. "In addition, we have instituted a variety of exciting corporate and student focused initiatives this quarter." Among the new initiatives this quarter is the announcement of a third online brand called StoneCliffe College Online, a division of Colorado Technical University. StoneCliffe is a new online offering targeted at students who are looking for a part-time, slower paced education. BUSINESS OUTLOOK Please note that the following is an update from previously issued guidance. While we may make further acquisitions, none are contemplated by these forward-looking statements. Fourth Quarter -- We expect CEC consolidated fourth quarter 2005 revenue to be approximately $522 to $532 million and CEC consolidated fourth quarter 2005 diluted net income per share to be approximately $0.66 to $0.69. This guidance represents an increase of 6% to 8% from CEC consolidated fourth quarter 2004 revenue of $491 million and an increase of 10% to 15% from CEC consolidated fourth quarter 2004 diluted net income per share of $0.60. -- We expect OEG segment fourth quarter 2005 revenue, included in the preceding amounts, to be approximately $170 million. -- We expect our CEC consolidated fourth quarter 2005 effective income tax rate to be approximately 38.25%. -- We expect diluted weighted average shares outstanding to be approximately 101.0 million during the fourth quarter 2005. CONFERENCE CALL INFORMATION Career Education Corporation will host a conference call today, November 2nd, at 5:00 PM (Eastern Time). Interested parties can access the live webcast of the conference call at www.careered.com. Participants can also listen to the conference call by dialing (617) 614-3946 (international) or (800) 638-5495 (domestic) and citing code 16492278. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. After 7:00 PM (Eastern Time) the same day, an archived version of the webcast will be accessible for 90 days at www.careered.com. A replay of the call will also be available for seven days by calling (617) 801-6888 (international) or (888) 286-8010 and citing code 61247115. Career Education Corporation (www.careered.com) is one of the largest providers of private, for-profit, post secondary education and has a presence in both on-campus and online education. CEC's Colleges, Schools and Universities segment operates more than 80 campuses in the U.S., Canada, France, the United Kingdom, and the United Arab Emirates and offers doctoral degree, master's degree, bachelor's degree, associate degree, and diploma programs in the career-oriented disciplines of business studies, visual communication and design technologies, health education, information technology, and culinary arts. The Online Education Group operates American InterContinental University Online and Colorado Technical University Online and offers a variety of degrees in information technology, business, visual communication, and education. CEC's total student population as of October 31, 2005, was approximately 107,300 students. Except for the historical and present factual information contained herein, the matters set forth in this release, including statements under "Business Outlook" and statements identified by words such as "anticipate," "believe," "plan," "expect," "intend," "project," "will," and similar expressions, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, that could cause our actual growth, results of operations, performance and business prospects, and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of 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 outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: risks related to our ability to comply with, and the impact of changes in, legislation and regulations that affect our ability to participate in student financial aid programs; costs, risks and effects of legal and administrative proceedings and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and, class action, derivative, and other lawsuits; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; costs and difficulties related to the integration of acquired businesses; risks related to our ability to manage and continue growth; future financial and operational results; risks related to competition, general economic conditions, and other risk factors relating to our industry and business, and the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2004, and from time to time in our other reports filed with the Securities and Exchange Commission. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended September 30, 2005 and 2004 (In thousands, except per share data and percentages) % of % of 2005 Revenue 2004 Revenue ------------------ ------------------ (Restated) Revenue: Tuition and registration fees $472,231 94.9% $404,083 92.7% Other 25,251 5.1% 31,951 7.3% ----------- ----------- Total revenue 497,482 100.0% 436,034 100.0% ----------- ----------- Operating expenses: Educational services and facilities 154,797 31.1% 145,433 33.4% General and administrative 238,075 47.9% 206,374 47.3% Depreciation and amortization 20,899 4.2% 14,855 3.4% ----------- ----------- Total operating expenses 413,771 83.2% 366,662 84.1% ----------- ----------- Income from operations 83,711 16.8% 69,372 15.9% Other income (expense): Interest income 1,890 0.5% 651 0.1% Interest expense (343) -0.1% (525) -0.1% Share of affiliate earnings 428 0.1% 209 0.0% Miscellaneous income (expense) 228 0.0% (181) 0.0% ----------- ----------- Total other income 2,203 0.5% 154 0.0% ----------- ----------- Income before provision for income taxes 85,914 17.3% 69,526 15.9% Provision for income taxes 30,979 6.3% 27,985 6.4% ----------- ----------- Income from continuing operations 54,935 11.0% 41,541 9.5% Loss on disposition of discontinued operations - 0.0% - 0.0% Write-off of goodwill of discontinued operations - 0.0% - 0.0% ----------- ----------- Loss from discontinued operations - 0.0% - 0.0% ----------- ----------- Net Income $54,935 11.0% $41,541 9.5% =========== =========== ====================================================================== Income per share - Diluted Income from continuing operations $0.533 $0.396 Loss from discontinued operations - - ----------- ----------- Net income $0.533 $0.396 =========== =========== Diluted weighted average shares outstanding 103,125 104,893 CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME For the Nine Months Ended September 30, 2005 and 2004 (In thousands, except per share data and percentages) % of % of 2005 Revenue 2004 Revenue ------------------ ------------------ (Restated) Revenue: Tuition and registration fees $1,433,044 95.2% $1,146,613 92.7% Other 72,337 4.8% 90,848 7.3% ----------- ----------- Total revenue 1,505,381 100.0% 1,237,461 100.0% ----------- ----------- Operating expenses: Educational services and facilities 464,596 30.9% 410,502 33.2% General and administrative 718,468 47.7% 592,781 47.9% Depreciation and amortization 57,933 3.8% 40,842 3.3% ----------- ----------- Total operating expenses 1,240,997 82.4% 1,044,125 84.4% ----------- ----------- Income from operations 264,384 17.6% 193,336 15.6% Other income (expense): Interest income 7,877 0.5% 1,541 0.1% Interest expense (1,199) -0.1% (2,067) -0.2% Share of affiliate earnings 3,670 0.2% 2,799 0.3% Miscellaneous expense (530) 0.0% (196) 0.0% ----------- ----------- Total other income 9,818 0.6% 2,077 0.2% ----------- ----------- Income before provision for income taxes 274,202 18.2% 195,413 15.8% Provision for income taxes 104,882 7.0% 78,655 6.4% ----------- ----------- Income from continuing operations 169,320 11.2% 116,758 9.4% Loss on disposition of discontinued operations (2,179) -0.1% - 0.0% Write-off of goodwill of discontinued operations (3,521) -0.2% - 0.0% ----------- ----------- Loss from discontinued operations (5,700) -0.3% - 0.0% ----------- ----------- Net Income $163,620 10.9% $116,758 9.4% =========== =========== ====================================================================== Income per share - Diluted Income from continuing operations $1.620 $1.112 Loss from discontinued operations $(0.054) - ----------- ----------- Net income $1.566 $1.112 =========== =========== Diluted weighted average shares outstanding 104,489 105,022 CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, September 30, 2005 2004 2004 ------------- ------------- ------------- (Restated) ASSETS CURRENT ASSETS: Cash and cash equivalents $90,241 $349,458 $274,545 Available-for-sale investments 253,613 - - ------------- ------------- ------------- Total cash, cash equivalents, and available-for-sale investments $343,854 $349,458 $274,545 Receivables: Students, net of allowance for doubtful accounts of $50,626, $61,136, and $45,466 as of September 30, 2005, December 31, 2004, and September 30, 2004, respectively 84,251 85,982 116,827 Other, net 5,327 5,378 5,181 Inventories 17,265 17,347 16,560 Prepaid expenses 37,284 29,649 36,717 Other current assets 34,744 5,980 7,827 Deferred income tax assets 18,807 18,806 5,032 ------------- ------------- ------------- Total current assets 541,532 512,600 462,689 ------------- ------------- ------------- PROPERTY AND EQUIPMENT, net 394,858 351,140 317,780 GOODWILL 444,137 448,896 446,989 INTANGIBLE ASSETS, net 35,589 35,881 35,841 OTHER ASSETS 34,650 38,495 37,831 ------------- ------------- ------------- TOTAL ASSETS $1,450,766 $1,387,012 $1,301,130 ------------- ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $1,629 $2,274 $1,909 Accounts payable 24,440 38,263 27,576 Accrued expenses: Payroll and related benefits 42,338 38,193 41,393 Income taxes 13,336 4,663 - Other 75,798 70,520 69,280 Deferred tuition revenue 184,972 166,743 177,430 ------------- ------------- ------------- Total current liabilities 342,513 320,656 317,588 ------------- ------------- ------------- LONG-TERM LIABILITIES: Long-term debt, net of current maturities 18,377 21,591 21,104 Long-term contratual obligation - - 9,679 Deferred rent obligations 83,718 15,293 12,627 Deferred income tax liabilities 39,884 39,972 18,366 Other 4,874 4,669 4,297 ------------- ------------- ------------- Total long-term liabilities 146,853 81,525 66,073 ------------- ------------- ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock $- $- $- Common stock 1,032 1,025 1,024 Additional paid-in capital 588,015 571,192 568,524 Accumulated other comprehensive income 673 4,396 2,564 Retained earnings 571,838 408,218 345,357 Cost of shares in treasury (200,158) - - ------------- ------------- ------------- Total stockholders' equity 961,400 984,831 917,469 ------------- ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,450,766 $1,387,012 $1,301,130 ------------- ------------- ------------- CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- (Restated) (Restated) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $54,935 $41,541 $163,620 $116,758 Adjustments to reconcile net income to income from continuing operations: Loss from disposition of discontinued operations - - 2,179 - Write-down of goodwill of discontinued operations - - 3,521 - ----------- ----------- ----------- ----------- Income from continuing operations 54,935 41,541 169,320 116,758 ----------- ----------- ----------- ----------- Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 20,899 14,855 57,933 40,842 Loss on disposition of property and equipment 22 408 572 416 Other 193 143 593 607 Changes in operating assets and liabilities, net of acquisitions Tax benefit associated with option exercises 2,410 577 4,826 42,716 Other 28,202 68,026 55,886 58,804 ----------- ----------- ----------- ----------- Net cash provided by operating activities 106,661 125,550 289,130 260,143 ----------- ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Business dispositions/ acquisitions, net of cash 26 (42) (908) (518) Acquisition transaction costs - (47) - (368) Purchases of property and equipment (28,336) (40,499) (99,232) (94,002) Purchases of available-for-sale investments (284,012) - (700,636) - Sales and maturities of available-for- sale investments 272,629 - 447,024 - Change in investment in affiliate (382) 109 (306) (65) ----------- ----------- ----------- ----------- Net cash used in investing activities (40,075) (40,479) (354,058) (94,953) ----------- ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (200,158) - (200,158) - Issuance of common stock 5,051 2,257 12,003 29,268 Net proceeds from (payments of) revolving loans (181) - (2,060) (76,119) Payments of capital lease obligations and other long- term debt 2,183 (817) 678 (5,346) ----------- ----------- ----------- ----------- Net cash provided by (used in) financing activities (193,105) 1,440 (189,537) (52,197) ----------- ----------- ----------- ----------- EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (284) 630 (4,752) 317 ----------- ----------- ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS (126,803) 87,141 (259,217) 113,310 CASH AND CASH EQUIVALENTS, beginning of period 217,044 187,404 349,458 161,235 ----------- ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $90,241 $274,545 $90,241 $274,545 =========== =========== =========== =========== CAREER EDUCATION CORPORATION SELECTED SEGMENT INFORMATION (Dollars in thousands) Three Months Nine Months Ended September 30, Ended September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- (Restated) (Restated) Revenue CSU (1) $328,430 $331,628 $1,008,425 $964,203 OEG (2) 169,052 104,406 496,956 273,258 Segment profit (3) CSU $36,470 $37,592 $116,345 $111,460 OEG 62,425 41,106 201,218 117,190 Corporate and other (14,756) (9,117) (49,509) (32,515) Segment profit percentage CSU 11.1% 11.3% 11.5% 11.6% OEG 36.9% 39.4% 40.5% 42.9% (1) The Colleges, Schools, and Universities ("CSU") segment represents an aggregation of our campus-based operating divisions. (2) The Online Education Group ("OEG") segment represents an aggregation of our online operating divisions. (3) Segment profit equals the sum of income from operations and share of affiliate earnings. CAREER EDUCATION CORPORATION SELECTED ACCOUNTS RECEIVABLE AND ALLOWANCE INFORMATION (Dollars in thousands) DAYS SALES OUTSTANDING September 30, ----------------------- 2005 2004 ----------- ----------- (Restated) Total revenue during the quarter ended $497,482 $436,034 Number of days in the quarter ended 92 92 Total revenue per day $5,407 $4,740 Accounts receivable, net $89,578 $122,008 Days sales outstanding 17 26 ALLOWANCE AS A PERCENTAGE OF STUDENT RECEIVABLES September 30, December 31, September 30, 2005 2004 2004 ------------- ------------ ------------- (Restated) Allowance for doubtful accounts $50,626 $61,136 $45,466 Gross student receivables $134,877 $147,118 $162,293 Allowance as a percentage of XXXX student receivables 37.5% 41.6% 28.0% STUDENT RECEIVABLES VALUATION ALLOWANCE Balance, Amounts Balance, Beginning Charges Written- End of of Period to Expense Off Period ----------- ----------- ----------- ----------- For the three months ended September 30, 2005 $50,726 $22,685 $(22,785) $50,626 For the three months ended September 30, 2004 44,855 24,014 (23,403) 45,466 For the nine months ended September 30, 2005 61,136 61,719 (72,229) 50,626 For the nine months ended September 30, 2004 47,467 64,626 (66,627) 45,466 CONTACT: Career Education Corporation Karen M. King (Investor Inquiries), 847-585-3899 www.careered.com -----END PRIVACY-ENHANCED MESSAGE-----