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): May 5, 2008

Career Education Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware	0-23245	36-3932190
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2895 Greenspoint Parkway, Suite 600, Hoffman Estates, IL	60169
(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 May 5, 2008, Career Education Corporation (the “Registrant”) issued a press release to report the Registrant’s financial results for the three months ended March 31, 2008. A copy of the press 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.

(d) Exhibits

Exhibit Number	Description of Exhibits
99.1	Press release of Registrant dated May 5, 2008, reporting the Registrant’s financial results for the three months ended March 31, 2008.

2

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/ Michael J. Graham
	Michael J. Graham
	Executive Vice President and Chief Financial Officer

Dated: May 5, 2008

3

Exhibit Index

Exhibit Number	Description of Exhibits
99.1	Press release of Registrant dated May 5, 2008, reporting the Registrant’s financial results for the three months ended March 31, 2008.

4

EX-99.1

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS

RESULTS FOR FIRST QUARTER 2008

Hoffman Estates, Ill. (May 5, 2008) – Career Education Corporation (NASDAQ: CECO) today reported total revenue of $460.2 million and net income of $16.4 million, or $0.18 per diluted share, during the first quarter of 2008.

“Our first quarter 2008 results were in-line with our expectations. During the first quarter, we finalized and communicated our three year plan. Our results reflect progress in executing on the opportunities and challenges outlined in that plan,” said Gary E. McCullough, president and chief executive officer. “We restructured our organization to streamline our operations, we put in place a transitional schools division to focus on the successful execution of our schools in teach-out, and we are actively addressing alternatives to help our students finance their education where needed.”

Three Months Ended March 31, 2008

• Total revenue was $460.2 million during the first quarter of 2008, relatively unchanged from $460.4 million during the first quarter of 2007.

• Operating income of $17.5 million includes the following non-comparable items in the first quarter of 2008:

• goodwill and asset impairment charges of $6.6 million related to the Transitional Schools division,

• severance and stay bonus expenses of $11.4 million associated with the Company’s decision to teach-out certain campuses and its efforts to reduce redundancies within the organization, and

CEC ANNOUNCES 1Q08 RESULTS …PG 2

• higher depreciation and amortization expense within our Transitional Schools division due to the shortening of remaining useful lives for long-lived assets.

Operating income for the first quarter of 2007 was $41.1 million. Operating profit margin percentage was 3.8 percent during the first quarter of 2008, a 5.1 percentage point decrease relative to an operating profit margin percentage of 8.9 percent during the first quarter of 2007. The decrease in the first quarter 2008 operating profit margin percentage was offset, in part, by a reduction in admissions representative headcount and improved representative productivity.

• Net income of $16.4 million or $0.18 per diluted share during the first quarter of 2008 includes the impact of these non-comparable items, compared to net income of $30.0 million, or $0.31 per diluted share, during the first quarter of 2007. Net income during the first quarter of 2008 includes $4.7 million of income related to the termination of the Company’s agreement to share profits relating to AU Dubai.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Net cash flow provided by operating activities was $35.5 million during the first quarter of 2008, compared to net cash flow provided by operating activities of $89.1 million during the first quarter of 2007. The decrease is primarily due to the lower net income during the first quarter of 2008, primarily attributable to charges recorded for severance and stay bonuses, and the payments of previously settled legal matters.

• Capital expenditures increased to $18.8 million during the first quarter of 2008, from $16.8 million during the first quarter of 2007. Capital expenditures represented 4.1 percent of total consolidated revenue during the first quarter of 2008.

Financial Position

• As of March 31, 2008 and December 31, 2007, cash and cash equivalents and investments totaled $417.5 million and $404.3 million, respectively.

CEC ANNOUNCES 1Q08 RESULTS …PG 3

• Days sales outstanding (DSO) were 14 days as of March 31, 2008, consistent with DSO of 14 days as of December 31, 2007.

Stock Repurchase Program

Since July 2005, CEC’s Board of Directors has authorized the use of a total of $800.2 million to repurchase outstanding shares of the company’s common stock. Stock repurchases under this program may be made on the open market or in privately negotiated 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 first quarter of 2008, the company repurchased 1.0 million shares of its common stock for approximately $13.8 million at an average price of $13.84 per share. Since the inception of the program, the company has repurchased 19.2 million shares of its common stock for approximately $604.4 million.

As of March 31, 2008, approximately $195.8 million was available under the stock repurchase program to repurchase outstanding shares of the company’s common stock.

POPULATION AND NEW STUDENT START DATA

Student Population

Total student population by reportable segment as of April 30, 2008 and 2007, were as follows:

	Population April 30, 2008	Population April 30, 2007	Percentage Difference
Art & Design (1)	12,800	12,700	1	%
Culinary Arts	10,200	10,500	(3	%)
Health Education	15,200	13,300	14	%
International	7,000	6,200	13	%
University (2)	43,500	40,700	7	%
Subtotal	88,700	83,400	6	%
Transitional Schools	6,400	9,900	(35	%)
CEC Consolidated	95,100	93,300	2	%

CEC ANNOUNCES 1Q08 RESULTS …PG 4

(1) As of April 30, 2008, the Art & Design population included approximately 550 students who were taking classes in fully-online academic programs offered by Art & Design schools. There were no Art & Design fully-online students as of April 30, 2007.

(2) As of April 30, 2008 and 2007, the University population included approximately 33,900 students and 30,600 students, respectively, who were taking classes in fully-online academic programs offered by University schools.

New Student Starts

New student starts by reportable segment during the first quarter of 2008 and 2007, were as follows:

	First quarter 2008	First quarter 2007	Percentage Difference
Art & Design (1)	2,070	1,630	27	%
Culinary Arts	2,520	2,730	(8	%)
Health Education	5,000	4,290	17	%
International	560	400	40	%
University (2)	15,830	14,610	8	%
Subtotal	25,980	23,670	10	%
Transitional Schools	1,480	1,840	(20	%)
CEC Consolidated	27,460	25,500	8	%

(1) Art & Design new student starts include approximately 300 students who began taking classes in fully-online academic programs offered by Art & Design schools during the first quarter of 2008. There were no Art & Design fully-online student starts during the first quarter of 2007.

(2) University new student starts includes approximately 13,460 students and 12,570 students, respectively, who began taking classes in fully-online academic programs offered by University schools during the first quarter of 2008 and 2007.

NEW CAMPUS OPENINGS

During the first quarter, the company announced the opening of its 14^th affiliate school of Le Cordon Bleu Schools North America in Boston. Le Cordon Bleu College of Culinary Arts Boston commenced classes on April 7, 2008.

2008 ANNUAL MEETING OF STOCKHOLDERS

CEC ANNOUNCES 1Q08 RESULTS …PG 5

During the first quarter, the company announced that its Annual Meeting of Stockholders will be held at 9:00 a.m., Central Time, on Tuesday, May 13, 2008, at the Chicago Marriott Northwest, 4800 Columbine Boulevard, Hoffman Estates, Illinois.

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on May 6, 2008 at 10:00 AM (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 866-578-5801 (domestic) or 617-213-8058 (international) and citing code 31861698. Please log-in or dial-in at least ten minutes prior to the conference call start time to ensure a connection. An archived version of the conference call webcast will be accessible for 90 days at www.careered.com. A replay of the conference call will also be available for seven days by calling 888-286-8010 (domestic) or 617-801-6888 (international) and citing code 42402283.

About Career Education Corporation

The colleges, schools, and universities that are part of the Career Education Corporation (CEC) family offer high quality education to a diverse population approximately 90,000 students across the world in a variety of career-oriented disciplines. The more than 75 campuses that serve these students are located throughout the U.S. and in France, Italy, and the United Kingdom, and offer doctoral, master’s, bachelor’s, and associate degrees and diploma and certificate programs. Approximately one-third of its students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online.

CEC is an industry leader whose gold-standard brands are recognized globally. Those brands include, among others, the Le Cordon Bleu Schools North America; Harrington College of Design; Brooks Institute; International Academy of Design; American InterContinental University; Colorado Technical University and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing quality education, enabling students to graduate and pursue rewarding careers.

For more information, see the company’s website at www.careered.com. The company’s website includes a detailed listing of individual campus locations and web links to its more than 75 colleges, schools, and universities.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “anticipate,” “believe,” “plan,” “expect,” “intend,” “project,” “will,” 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 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 the 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 associated with

CEC ANNOUNCES 1Q08 RESULTS …PG 6

unfavorable changes in the cost or availability of financing, including alternative loans, for our students; potential higher bad debt expense or reduced revenue associated with requiring students to pay more of their educational expenses while in school; increased competition; the effectiveness of our regulatory compliance efforts; future financial and operational results, including the impact of the impairment of goodwill and other intangible assets; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; 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, and class action and other lawsuits; costs, risks and uncertainties associated with our company-wide restructuring, including risks and uncertainties associated with changes in management and reporting responsibilities; costs and difficulties related to the integration of acquired businesses; risks related to our ability to manage and continue growth; risks related to the sale or teach-out of any campuses; risks related to general economic conditions including credit market 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, 2007, and from time to time in our other reports filed with the Securities and Exchange Commission.

###

Investors: Karen M. King

847/585-3899

www.careered.com

Media: Lynne Baker

847/851-7006

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2008			December 31, 2007 (1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	214,909		$	237,705
Investments		202,550			166,618
Total cash and cash equivalents and investments		417,459			404,323
Receivables:
Students, net of allowance for doubtful accounts of $36,818 and $36,227 as of March 31, 2008, and December 31, 2007, respectively		56,042			61,396
Other, net		12,842			8,876
Prepaid expenses		57,638			50,532
Inventories		13,920			15,468
Deferred income tax assets		19,631			19,598
Other current assets		9,636			16,474
Total current assets		587,168			576,667
PROPERTY AND EQUIPMENT, net		329,062			339,066
GOODWILL		382,771			383,932
INTANGIBLE ASSETS, net		44,954			44,395
OTHER ASSETS, net		21,747			22,406
TOTAL ASSETS	$	1,365,702		$	1,366,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	13,597		$	11,843
Accounts payable		26,736			28,145
Accrued expenses:
Payroll and related benefits		33,247			28,554
Income taxes		28,640			19,571
Other		93,804			111,298
Deferred tuition revenue		145,248			161,578
Total current liabilities		341,272			360,989
LONG-TERM LIABILITIES:
Long-term debt, net of current maturities		2,414			2,179
Deferred rent obligations		98,609			100,478
Deferred income tax liabilities		941			624
Other		10,762			4,473
Total long-term liabilities		112,726			107,754
SHARE-BASED AWARDS SUBJECT TO REDEMPTION		11,507			11,615
STOCKHOLDERS’ EQUITY:
Common stock		930			930
Additional paid-in capital		211,142			207,294
Accumulated other comprehensive income		24,043			16,304
Retained earnings		753,095			736,603
Cost of shares in treasury		(89,013	)		(75,023	)
Total stockholders’ equity		900,197			886,108
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,365,702		$	1,366,466

(1) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. For further information regarding our reclassification of reportable segments, please refer to our Form 8-K filings dated March 28, 2008 and April 11, 2008.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

	For the Three Months Ended March 31,
	2008			% of Revenue		2007 (1)			% of Revenue
REVENUE:
Tuition and registration fees	$	440,000		95.6	%	$	439,500		95.5	%
Other		20,242		4.4	%		20,917		4.5	%
Total revenue		460,242		100.0	%		460,417		100.0	%
OPERATING EXPENSES:
Educational services and facilities		173,773		37.8	%		162,541		35.3	%
General and administrative		240,949		52.3	%		237,980		51.7	%
Depreciation and amortization		21,403		4.7	%		18,781		4.1	%
Goodwill and asset impairment		6,613		1.4	%		—		0.0	%
Total operating expenses		442,738		96.2	%		419,302		91.1	%
Operating income		17,504		3.8	%		41,115		8.9	%
OTHER INCOME (EXPENSE):
Interest income		3,469		0.7	%		4,706		1.0	%
Interest expense		(228	)	0.0	%		(360	)	-0.1	%
Share of affiliate earnings		4,665		1.0	%		1,712		0.4	%
Miscellaneous (expense) income		(204	)	0.0	%		237		0.1	%
Total other income, net		7,702		1.7	%		6,295		1.4	%
Pretax income		25,206		5.5	%		47,410		10.3	%
Provision for income taxes		8,822		1.9	%		17,374		3.8	%
NET INCOME	$	16,384		3.6	%	$	30,036		6.5	%
NET INCOME PER SHARE	$	0.18				$	0.31
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING		90,289					96,798

(1) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. For further information regarding our reclassification of reportable segments, please refer to our Form 8-K filings dated March 28, 2008 and April 11, 2008.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Three Months Ended March 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS:
Net income	$	16,384		$	30,036
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill and asset impairment		6,613			—
Depreciation and amortization expense		21,403			18,781
Bad debt expense		11,765			8,449
Compensation expense related to share-based awards		3,029			3,101
(Loss) gain on disposition of property and equipment		(134	)		1
Share of affiliate earnings, net of cash received		939			230
Changes in operating assets and liabilities		(24,484	)		28,549
Net cash provided by operating activities		35,515			89,147
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions, net of acquired cash		—			(30,324	)
Acquisition transaction costs		—			(1,106	)
Purchases of property and equipment		(18,814	)		(16,812	)
Purchases of available-for-sale investments		(213,501	)		(209,454	)
Sales of available-for-sale investments		177,569			186,955
Other		433			6
Net cash used in investing activities		(54,313	)		(70,735	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock		(13,990	)		(49,967	)
Issuance of common stock		793			7,144
Tax benefit associated with stock option exercises		26			1,925
Borrowings on revolving loans		999			—
Payments of capital lease obligations and other long-term debt		(118	)		(29	)
Net cash used in financing activities		(12,290	)		(40,927	)
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS:		8,292			706
NET DECREASE IN CASH AND CASH EQUIVALENTS		(22,796	)		(21,809	)
CASH AND CASH EQUIVALENTS, beginning of the period		237,705			189,816
CASH AND CASH EQUIVALENTS, end of the period	$	214,909		$	168,007

CAREER EDUCATION CORPORATION

SELECTED SEGMENT INFORMATION

(Dollars in thousands)

	For the Three Months Ended March 31,
	2008			2007 (1)
REVENUE:
University	$	177,151		$	185,845
Culinary Arts		87,189			88,697
Health Education		56,241			49,365
Arts & Design		70,929			69,633
International		34,467			21,900
Transitional Schools		34,265			44,852
Corporate and other		—			125
	$	460,242		$	460,417
SEGMENT OPERATING INCOME (LOSS):
University	$	24,991		$	34,089
Culinary Arts		5,379			11,424
Health Education		5,126			3,628
Arts & Design		10,685			9,711
International		12,789			6,207
Transitional Schools (2)		(22,984	)		(7,754	)
Corporate and other		(18,482	)		(16,190	)
	$	17,504		$	41,115
SEGMENT OPERATING INCOME (LOSS) PERCENTAGE:
University		14.1	%		18.3	%
Culinary Arts		6.2	%		12.9	%
Health Education		9.1	%		7.3	%
Arts & Design		15.1	%		13.9	%
International		37.1	%		28.3	%
Transitional Schools		-67.1	%		-17.3	%

(1) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. For further information regarding our reclassification of reportable segments, please refer to our Form 8-K filings dated March 28, 2008 and April 11, 2008.

(2) For the three months ended March 31, 2008, the Transitional Schools segment included a $6.6 million goodwill and asset impairment charge and $8.6 million of severance and stay bonus expense.

CAREER EDUCATION CORPORATION

SELECTED SEGMENT START-UP INFORMATION

(Dollars in thousands)

	For the Three Months Ended March 31,
	2008			2007 (1)
REVENUE:
Culinary Arts (2)		2,371			—
Arts & Design (3)		4,805			—
	$	7,176		$	—
SEGMENT OPERATING (LOSS) INCOME:
Culinary Arts (2)		(2,348	)		(1,070	)
Arts & Design (3)		(551	)		(1,848	)
	$	(2,899	)	$	(2,918	)

(1) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. For further information regarding our reclassification of reportable segments, please refer to our Form 8-K filings dated March 28, 2008 and April 11, 2008.

(2) For the three months ended March 31, 2008 and 2007, Culinary Arts start-up campuses include LCB, Boston, MA and Dallas, TX and Kitchen Academy, St. Peters, MO and Seattle, WA.

(3) For the three months ended March 31, 2008 and 2007, Art & Design start-up campuses include IADT Sacramento, CA, San Antonio, TX and IADT Online, Tampa, FL.

CAREER EDUCATION CORPORATION

SELECTED UNIVERSITY SEGMENT INFORMATION

(Dollars in thousands)

	For the Three Months Ended March 31,
	2008			2007 (1)
UNIVERSITY REVENUE:
AIU
Online	$	71,972		$	87,770
Onground		22,982			25,382
CTU
Online		59,198			49,667
Onground		13,538			12,929
Briarcliffe		9,461			10,097
University	$	177,151		$	185,845
UNIVERSITY SEGMENT OPERATING INCOME (LOSS):
AIU
Online	$	8,531		$	26,899
Onground		(1,535	)		(1,102	)
CTU
Online		16,165			7,523
Onground		828			(166	)
Briarcliffe		1,002			935
University	$	24,991		$	34,089
UNIVERSITY SEGMENT OPERATING INCOME (LOSS) PERCENTAGE:
AIU
Online		11.9	%		30.6	%
Onground		-6.7	%		-4.3	%
CTU
Online		27.3	%		15.1	%
Onground		6.1	%		-1.3	%
Briarcliffe		10.6	%		9.3	%
University		14.1	%		18.3	%
	Student Population as of April 30,
	2008			2007
AIU
Online		16,900			16,800
Onground		3,500			4,100
CTU
Online		17,000			13,800
Onground		4,300			4,000
Briarcliffe		1,800			2,000
University		43,500			40,700
	Student Starts for the three months ended March 31,
	2008			2007
AIU
Online		8,160			7,620
Onground		1,140			850
CTU
Online		5,300			4,950
Onground		860			830
Briarcliffe		370			360
University		15,830			14,610

(1) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. For further information regarding our reclassification of reportable segments, please refer to our Form 8-K filings dated March 28, 2008 and April 11, 2008.

UPDATED STUDENT FINANCING PROJECTIONS

(Dollars in millions)

	Projected Balance as of December 31,
	2008			2009
Previously Communicated Student Financing Through Company Balance Sheet	$	25–$35		$	25–$35
Reduction of Previously Available Private Lending Sources	$	30–$50		$	35–$55
Subtotal	$	55–$85		$	60–$90
Increased Stafford Loan Levels Reducing Company Balance Sheet Needs	$	(10–$20	)	$	(15–$25	)
Total	$	45–$65		$	45–$65

Note: The company has provided this schedule as further clarification to comments that will be made on the first quarter 2008 earnings call.