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 4, 2011

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.)
231 N. Martingale Rd., Schaumburg, IL		60173
(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 4, 2011, Career Education Corporation (the “Registrant”) issued a press release to report the Registrant’s financial results for the quarter ended March 31, 2011.

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 4, 2011, reporting the Registrant’s financial results for the quarter ended March 31, 2011.

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 4, 2011

3

Exhibit Index

Exhibit Number	Description of Exhibits
99.1	Press release of Registrant dated May 4, 2011, reporting the Registrant’s financial results for the quarter ended March 31, 2011.

4

EX-99.1

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS

RESULTS FOR FIRST QUARTER 2011

Operating income increased 27%

First quarter earnings per share increased 44% to $0.95

Schaumburg, Ill. (May 4, 2011) – Career Education Corporation (NASDAQ: CECO) today reported total revenue of $543.4 million, and net income of $73.0 million, or $0.95 per diluted share, for the first quarter of 2011 compared to total revenue of $529.4 million and net income of $55.2 million, or $0.66 per diluted share, for the first quarter of 2010.

“Our performance continues to be in line with our expectations as we take steps to improve our programs, processes and systems to comply with new federal regulations,” said Gary E. McCullough, President and Chief Executive Officer. “We intend to emerge from this period of change among the leading providers of private sector education, serving our students better than ever before.”

CONSOLIDATED RESULTS

Quarter Ended March 31, 2011

• Total revenue was $543.4 million for the first quarter of 2011, a 2.6 percent increase from $529.4 million for the first quarter of 2010.

• Operating income was $113.2 million for the first quarter of 2011, versus operating income of $89.4 million for the first quarter of 2010, an increase of 26.6 percent. The operating margin was 20.8 percent for the first quarter of 2011, compared to an operating margin of 16.9 percent for the first quarter of 2010.

• Operating income for the first quarter of 2011 included a $7.0 million ($0.06 per diluted share) pretax insurance recovery related to previously settled legal matters. Operating income for the first quarter 2010 included pretax expense of $8.1 million ($0.06 per diluted share) related to the increase in the allowance for doubtful accounts associated with certain extended payment plan programs as well as $3.7 million ($0.03 per diluted share) in pretax lease termination charges incurred in connection with the move to the Company’s new campus support center.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Net cash flows provided by operating activities totaled $59.7 million for the quarter ended March 31, 2011, compared to $53.5 million for the quarter ended March 31, 2010.

• Capital expenditures increased to $23.8 million during the quarter ended March 31, 2011, from $19.8 million during the quarter ended March 31, 2010. Capital expenditures represented 4.4 percent of total revenue during the quarter ended March 31, 2011 and 3.7 percent during the quarter ended March 31, 2010.

Financial Position

• As of March 31, 2011 and December 31, 2010, cash and cash equivalents and short-term investments totaled $399.1 million and $449.2 million, respectively.

CEC ANNOUNCES 1Q11 RESULTS ....PG 2

Stock Repurchase Program

During the quarter ended March 31, 2011, the Company repurchased approximately 4.1 million shares of its common stock for approximately $89.9 million at an average price of $21.69 per share.

As of March 31, 2011, approximately $200.5 million was available under the Company’s authorized stock repurchase program to repurchase outstanding shares of its 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 various factors, including market conditions and corporate and regulatory requirements.

STUDENT POPULATION AND NEW STUDENT STARTS

Student Population

Total student population by reportable segment as of March 31, 2011 and 2010, was as follows:

	As of March 31,				% Change 2011 vs. 2010
	2011		2010
Student Population
CTU		29,100		28,900		1%
AIU		22,500		25,000		-10%
Health Education		31,300		28,200		11%
Culinary Arts		13,500		12,200		11%
Art & Design		11,900		12,800		-7%
International		10,800		9,500		14%
Total Student Population		119,100		116,600		2%

New Student Starts

New student starts by reportable segment for the quarters ended March 31, 2011 and 2010, were as follows:

	For the Quarters Ended March 31,				% Change 2011 vs. 2010
	2011		2010
New Student Starts
CTU		7,440		8,840		-16%
AIU		8,660		11,260		-23%
Health Education		9,140		9,380		-3%
Culinary Arts		3,560		3,860		-8%
Art & Design		2,240		2,770		-19%
International		790		710		11%
Total New Student Starts		31,830		36,820		-14%

CEC ANNOUNCES 1Q11 RESULTS ....PG 3

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Thursday, May 5, 2011 at 10:00 a.m. Eastern time. Interested parties can access the live webcast of the conference call at www.careered.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 800-580-9478 (domestic) or 630-691-2769 (international) and citing code 29440682. 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. A replay of the call will also be available for seven days by calling 888-843-7419 (domestic) or 630-652-3042 (international) and citing code 29440682.

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 student population of more than 119,000 students across the world in a variety of career-oriented disciplines through online, on-ground and hybrid learning program offerings. The more than 90 campuses that serve these students are located throughout the United States and in France, Italy, the United Kingdom and Monaco, and offer doctoral, master’s, bachelor’s and associate degrees and diploma and certificate programs.

CEC is an industry leader whose institutions are recognized globally. Those institutions include, among others, American InterContinental University (“AIU”); Brooks Institute; Colorado Technical University (“CTU”); Harrington College of Design; INSEEC Group (“INSEEC”) Schools; International University of Monaco (“IUM”); International Academy of Design & Technology (“IADT”); Istituto Marangoni; Le Cordon Bleu North America (“LCB”); and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing high-quality education, enabling students to graduate and pursue rewarding career opportunities.

For more information, see CEC’s website at www.careered.com. The website includes a detailed listing of individual campus locations and web links to CEC’s 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,” “potential” 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, 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 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: availability of Title IV and other student financial aid or loans for our students; Congress’ willingness or ability to maintain or increase funding for Title IV Programs; our ability to maintain continued eligibility to participate in Title IV Programs, including under the “90-10 Rule” under the Higher Education Act of 1965, as amended; the impacts of the U.S. Department of Education’s new and pending regulations addressing certain aspects of administration of Title IV federal financial aid programs (including among other matters, gainful employment, certain compensation related to recruiting and admission of students, more stringent state approval criteria that may affect current state approval and licensing processes applicable to postsecondary education institutions and distance learning programs, and misrepresentation liability) on our business practices, costs of compliance and of developing and implementing changes in operations, student recruitment or enrollment, program offerings that may have significant or material effects on our operations, business and profitability; potential higher bad debt expense or reduced revenue associated with requiring students to pay more of their educational expenses while in school or with directly providing extended payment plans to our students; increased competition; the effectiveness of our regulatory compliance efforts; impairment of goodwill and other intangible assets as we continue to redefine the company and manage our brands and marketing to improve effectiveness and reduce costs; charges and expenses associated with exiting excess facility space; our ability to comply with accrediting agency requirements or obtain accrediting agency approvals for existing or new programs; the outcome of any reviews and

CEC ANNOUNCES 1Q11 RESULTS ....PG 4

audits conducted by accrediting, state and federal agencies; our dependence on information technology systems; our ownership or use of intellectual property; costs and impacts of regulatory, legal and administrative actions, proceedings and investigations, governmental regulations, and class action and other lawsuits; our ability to manage and continue growth; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2010, and from time to time in our current reports filed with the Securities and Exchange Commission.

###

CONTACT

Investors:	Jason Friesen Senior Vice President of Finance, Investor Relations and Treasurer (847) 585-3899
Media:	Mark Spencer Senior Director, Corporate Communications (847) 585-3802

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2011			December 31, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	239,261		$	289,482
Short-term investments		159,831			159,671
Total cash and cash equivalents and short-term investments		399,092			449,153
Student receivables, net		64,147			62,287
Receivables, other, net		3,352			4,132
Prepaid expenses		34,768			52,077
Inventories		11,502			13,142
Deferred income tax assets, net		31,665			31,665
Other current assets		21,905			6,246
Assets of discontinued operations		4,865			6,742
Total current assets		571,296			625,444
NON-CURRENT ASSETS:
Property and equipment, net		359,678			366,775
Goodwill		384,397			381,476
Intangible assets, net		118,499			118,763
Student receivables, net		9,667			12,522
Deferred income tax assets, net		4,208			5,092
Other assets, net		32,479			42,752
Assets of discontinued operations		18,975			19,055
TOTAL ASSETS	$	1,499,199		$	1,571,879
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of capital lease obligations	$	862		$	783
Accounts payable		41,469			56,013
Accrued expenses:
Payroll and related benefits		47,665			73,608
Advertising and production costs		27,855			18,846
Income taxes		17,254			—
Earnout payments		17,643			17,439
Other		52,563			98,113
Deferred tuition revenue		171,205			176,102
Liabilities of discontinued operations		14,908			15,100
Total current liabilities		391,424			456,004
NON-CURRENT LIABILITIES:
Capital lease obligations, net of current maturities		561			1,223
Deferred rent obligations		104,224			103,996
Earnout payments		3,251			7,690
Other liabilities		40,570			30,853
Liabilities of discontinued operations		32,839			37,576
Total non-current liabilities		181,445			181,338
SHARE-BASED AWARDS SUBJECT TO REDEMPTION		137			153
STOCKHOLDERS’ EQUITY:
Preferred stock		—			—
Common stock		821			812
Additional paid-in capital		582,497			576,853
Accumulated other comprehensive income (loss)		8,247			(81	)
Retained earnings		430,042			356,991
Cost of shares in treasury		(95,414	)		(191	)
Total stockholders’ equity		926,193			934,384
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,499,199		$	1,571,879

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts and percentages)

	For the Quarters Ended March 31,
	2011			% of Total Revenue		2010(1)			% of Total Revenue
REVENUE:
Tuition and registration fees	$	521,094			95.9%	$	509,508			96.2%
Other		22,267			4.1%		19,918			3.8%
Total revenue		543,361					529,426
OPERATING EXPENSES:
Educational services and facilities		168,901			31.1%		159,162			30.1%
General and administrative		240,859			44.3%		264,140			49.9%
Depreciation and amortization		20,366			3.7%		16,678			3.2%
Total operating expenses		430,126			79.2%		439,980			83.1%
Operating income		113,235			20.8%		89,446			16.9%
OTHER INCOME (EXPENSE):
Interest income		237			0.0%		247			0.0%
Interest expense		(26	)		0.0%		(13	)		0.0%
Miscellaneous income (expense)		2,000			0.4%		(277	)		-0.1%
Total other income (expense)		2,211			0.4%		(43	)		0.0%
PRETAX INCOME		115,446			21.2%		89,403			16.9%
Provision for income taxes		41,861			7.7%		32,257			6.1%
INCOME FROM CONTINUING OPERATIONS		73,585			13.5%		57,146			10.8%
Loss from discontinued operations, net of tax		(550	)		-0.1%		(1,924	)		-0.4%
NET INCOME	$	73,035			13.4%	$	55,222			10.4%
NET INCOME (LOSS) PER SHARE—DILUTED:
Income from continuing operations	$	0.96				$	0.69
Loss from discontinued operations		(0.01	)				(0.03	)
Net income per share	$	0.95				$	0.66
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING		76,753					83,116

(1) In December 2010, the Transitional Schools segment ceased to exist as the Company completed the teach out of its last remaining Transitional School, AIU-Los Angeles, CA, whose results for all periods presented are now reflected as a component of discontinued operations.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Quarters Ended March 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	73,035		$	55,222
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		20,366			16,753
Bad debt expense		17,151			26,217
Compensation expense related to share-based awards		4,200			4,995
(Gain)/loss on disposition of property and equipment		(1,801	)		337
Changes in operating assets and liabilities		(53,295	)		(50,056	)
Net cash provided by operating activities		59,656			53,468
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(60,934	)		(117,628	)
Sales of available-for-sale investments		60,774			111,782
Purchases of property and equipment		(23,792	)		(19,757	)
Earnout payments		(4,235	)		(4,382	)
Proceeds on the sale of assets		6,259			—
Other		85			(309	)
Net cash used in investing activities		(21,843	)		(30,294	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock		(89,915	)		(89,637	)
Issuance of common stock		1,292			883
Tax benefit associated with stock option exercises		159			64
Payments of capital lease obligations		(641	)		(749	)
Net cash used in financing activities		(89,105	)		(89,439	)
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS:		1,071			(2,857	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(50,221	)		(69,122	)
DISCONTINUED OPERATIONS CASH ACTIVITY INCLUDED ABOVE:
Add: Cash balance of discontinued operations, beginning of the period		—			738
Less: Cash balance of discontinued operations, end of the period		—			169
CASH AND CASH EQUIVALENTS, beginning of the period		289,482			284,334
CASH AND CASH EQUIVALENTS, end of the period	$	239,261		$	215,781

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Quarters Ended March 31,
	2011			2010(1)
REVENUE:
CTU (2)	$	118,065		$	110,999
AIU (2)		104,274			116,778
Health Education		116,309			103,864
Culinary Arts		91,773			92,754
Art & Design (2)		64,600			62,887
International		48,476			42,338
Corporate and Other		(136	)		(194	)
Total	$	543,361		$	529,426
OPERATING INCOME (LOSS):
CTU (2)	$	36,288		$	29,406
AIU (2)		27,617			32,798
Health Education		11,630			11,008
Culinary Arts (4)		13,767			8,205
Art & Design (2)		10,395			6,504
International		14,115			13,432
Corporate and Other (3)(5)		(577	)		(11,907	)
Total	$	113,235		$	89,446
OPERATING MARGIN:
CTU		30.7%			26.5%
AIU		26.5%			28.1%
Health Education		10.0%			10.6%
Culinary Arts		15.0%			8.8%
Art & Design		16.1%			10.3%
International		29.1%			31.7%
Total		20.8%			16.9%

(1) In December 2010, the Transitional Schools segment ceased to exist as the Company completed the teach out of its last remaining Transitional School, AIU-Los Angeles, CA, whose results for all periods presented are now reflected as a component of discontinued operations.

(2) Prior period financial results have been reclassified to report CTU, AIU and Art & Design as individual segments due to a change in organizational structure beginning in January, 2011. Previously, these results were reported on a combined basis as the University segment.

(3) First quarter 2011 included a $7.0 million pretax insurance recovery related to previously settled legal matters.

(4) First quarter 2010 included a $3.2 million pretax charge for additional bad debt expense for increases in reserve rates applied to outstanding student receivable balances attributed to the Company’s student extended payment plans.

(5) First quarter 2010 included a $2.4 million pretax lease termination charge incurred in connection with the Company’s move to its new campus support center and a $4.1 million pretax charge for an increase in the allowance for doubtful accounts related to the Company’s previously terminated recourse loan program.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION FOR CTU, AIU and Art & Design ⁽¹⁾

(Dollars in thousands)

	For the 2010 Quarters Ended,								Full Year
	March 31		June 30		September 30		December 31
REVENUE:
CTU	$	110,999	$	114,769	$	116,311	$	123,236	$	465,315
AIU		116,778		120,037		113,119		98,647		448,581
Art & Design		62,887		62,301		61,082		59,125		245,395
Total	$	290,664	$	297,107	$	290,512	$	281,008	$	1,159,291
OPERATING INCOME:
CTU	$	29,406	$	32,458	$	32,414	$	39,603	$	133,881
AIU		32,798		40,004		23,252		22,905		118,959
Art & Design		6,504		7,001		9,158		6,510		29,173
Total	$	68,708	$	79,463	$	64,824	$	69,018	$	282,013
OPERATING MARGIN:
CTU		26.5%		28.3%		27.9%		32.1%		28.8%
AIU		28.1%		33.3%		20.6%		23.2%		26.5%
Art & Design		10.3%		11.2%		15.0%		11.0%		11.9%
Total		23.6%		26.7%		22.3%		24.6%		24.3%
NEW STUDENT STARTS:
CTU		8,840		9,480		9,180		8,740
AIU		11,260		5,670		6,760		6,230
Art & Design		2,770		1,690		3,130		1,540
Total		22,870		16,840		19,070		16,510
	As of the 2010 Quarters Ended,
	March 31		June 30		September 30		December 31
STUDENT POPULATION:
CTU		28,900		29,000		29,900		30,900
AIU		25,000		20,400		21,000		20,000
Art & Design		12,800		11,600		12,600		11,500
Total		66,700		61,000		63,500		62,400
	For the 2009 Quarters Ended,								Full Year
	March 31		June 30		September 30		December 31
REVENUE:
CTU	$	83,132	$	87,121	$	92,848	$	105,520	$	368,621
AIU		97,893		104,199		107,184		99,767		409,043
Art & Design		57,914		58,759		60,135		63,722		240,530
Total	$	238,939	$	250,079	$	260,167	$	269,009	$	1,018,194
OPERATING INCOME:
CTU	$	16,437	$	16,544	$	15,556	$	31,352	$	79,889
AIU		20,611		25,196		23,716		20,604		90,127
Art & Design		5,440		4,140		6,149		9,336		25,065
Total	$	42,488	$	45,880	$	45,421	$	61,292	$	195,081
OPERATING MARGIN:
CTU		19.8%		19.0%		16.8%		29.7%		21.7%
AIU		21.1%		24.2%		22.1%		20.7%		22.0%
Art & Design		9.4%		7.0%		10.2%		14.7%		10.4%
Total		17.8%		18.3%		17.5%		22.8%		19.2%
NEW STUDENT STARTS:
CTU		6,530		7,550		8,760		9,800
AIU		9,270		4,990		6,530		7,210
Art & Design		1,810		2,660		3,060		1,540
Total		17,610		15,200		18,350		18,550
	As of the 2009 Quarters Ended,
	March 31		June 30		September 30		December 31
STUDENT POPULATION:
CTU		22,300		22,900		24,500		27,300
AIU		21,700		17,900		19,500		20,300
Art & Design		10,900		11,000		12,400		11,700
Total		54,900		51,800		56,400		59,300

(1) Prior period financial results have been reclassified to report CTU, AIU and Art & Design as individual segments due to a change in organizational structure beginning in January, 2011. Previously, these results were reported on a combined basis as the University segment. The above information is provided for the 2010 and 2009 quarter and fiscal year ends to facilitate analysis of these segments.