8-K

Pnovemb

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): February 23, 2017

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

Not applicable

(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 February 23, 2017, Career Education Corporation (the “Company”) issued a press release describing the Company’s financial results for the quarter and year ended December 31, 2016. A copy of the press release is being furnished as Exhibit 99.1, and the information contained therein is incorporated herein by reference. Following the issuance of the press release, the Company will host a conference call and webcast on which its financial results for the quarter and year ended December 31, 2016 will be discussed. The presentation materials that will be used for the call and webcast have been posted on the Company’s website and are attached as Exhibit 99.2.

The information contained in Item 2.02 of this Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the information be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description of Exhibits
99.1	Press release of the Company dated February 23, 2017 reporting the Company’s financial results for the quarter and year ended December 31, 2016
99.2	Presentation materials used by the Company in connection with its February 23, 2017 earnings conference call and webcast

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/ Andrew J. Cederoth
	Andrew J. Cederoth
	Senior Vice President and Chief Financial Officer

Date: February 23, 2017

3

Exhibit Index

Exhibit Number	Description of Exhibits
99.1	Press release of the Company dated February 23, 2017 reporting the Company’s financial results for the quarter and year ended December 31, 2016
99.2	Presentation materials used by the Company in connection with its February 23, 2017 earnings conference call and webcast

4

EX-99.1

CEC ANNOUNCES 4Q16 RESULTS …PG 1

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2016

University Group full year 2016 revenue increased 2.3% versus prior year

with total enrollment growth of 5.3%

Schaumburg, Ill. (February 23, 2017) – Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the fourth quarter and year ended December 31, 2016.

University Group Full Year Highlights:

• Total student enrollment growth of 5.3 percent as compared to the prior year

• Revenue increase of 2.3 percent for 2016 as compared to the prior year

• Student retention continues to improve as investments in various student-serving functions help enhance overall student retention and outcomes

Fourth Quarter Consolidated Results:

• Revenue of $155.3 million for the quarter as compared to $199.9 million in the prior year quarter, with the decline primarily driven by teach-out campuses

• Operating loss of $55.9 million compared to prior year quarter operating loss of $3.9 million; fourth quarter 2016 includes charges recorded for:

o $18.4 million related to remaining lease obligations for vacated space at teach-out campuses

o $10.0 million legal settlement

o $22.0 million of third party legal fees

Full Year Consolidated Results:

• Revenue of $704.4 million for 2016 as compared to $847.3 million in the prior year, with the decline primarily driven by  teach-out campuses

• Operating expenses decreased by $202.7 million as compared to the prior year driven by continued execution on strategic initiatives

• As of December 31, 2016, cash, cash equivalents, restricted cash and available-for-sale short-term investments was $207.2 million, with cash flow provided by operations of $5.9 million compared to cash usage in the prior year of $21.7 million

“I am pleased with our 2016 results and with the progress our teams have made against our strategic initiatives,” said Todd Nelson, President and Chief Executive Officer. “Our commitment to improving student retention and outcomes while investing in technology and resources resulted in total enrollment growth at our University Group, with year-end total enrollments at the highest level since 2012. The results of our teach-out operations were ahead of our expectations, and our overall operating costs decreased by more than $200 million compared to last year, resulting in a year end cash balance that was higher than our outlook. For 2017, we will continue to invest in technology and resources which we believe will further enhance student retention and outcomes and pursue sustainable and responsible growth opportunities within our University Group.”

CEC ANNOUNCES 4Q16 RESULTS …PG 2

REVENUE

For the quarter and year ended December 31, 2016, total revenue was $155.3 million and $704.4 million, respectively, representing a decrease of 22.4 percent and 16.9 percent, respectively, compared to total revenue of $199.9 million and $847.3 million for the quarter and year ended December 31, 2015, respectively. The decrease was driven by declining revenues within the teach-out segments. Total revenue for the University Group was $135.6 million and $562.4 million for the quarter and year ended December 31, 2016, respectively, representing a decrease of 1.3 percent and an increase of 2.3 percent, respectively.

	For the Quarter Ended December 31,							For the Year Ended December 31,
Revenue ($ in thousands)	2016		2015		Increase (Decrease)			2016		2015		Increase (Decrease)
CTU	$	94,696	$	91,481		3.5	%	$	369,319	$	348,215		6.1	%
AIU		40,909		45,871		-10.8	%		193,032		201,649		-4.3	%
Total University Group		135,605		137,352		-1.3	%		562,351		549,864		2.3	%
Corporate and Other		—		40	NM				—		157	NM
Subtotal		135,605		137,392		-1.3	%		562,351		550,021		2.2	%
Culinary Arts (1)		14,462		42,020		-65.6	%		104,452		170,190		-38.6	%
Transitional Group (1)		5,188		20,535		-74.7	%		37,589		127,062		-70.4	%
Total	$	155,255	$	199,947		-22.4	%	$	704,392	$	847,273		-16.9	%

(1) Teach-out campuses included in the Transitional Group no longer enroll new students. The Culinary Arts campuses were announced for teach-out during December 2015 and ceased enrolling new students in January 2016.

CEC ANNOUNCES 4Q16 RESULTS …PG 3

TOTAL AND NEW STUDENT ENROLLMENTS

As of the end of 2016, total student enrollments for the University Group were 33,600, compared to 31,900 as of the prior year, primarily driven by improved student retention at CTU and new enrollment growth at AIU. New student enrollments for the University Group were 9,280 and 35,120 for the quarter and year ended December 31, 2016, respectively, compared to new student enrollments of 8,760 and 35,290 for the quarter and year ended December 31, 2015, respectively.  

	As of December 31,
Total Student Enrollments	2016		2015		Increase (Decrease)
CTU		21,900		21,300		2.8	%
AIU		11,700		10,600		10.4	%
Total University Group		33,600		31,900		5.3	%
Culinary Arts		2,300		7,800		-70.5	%
Transitional Group		700		3,500		-80.0	%
Total		36,600		43,200		-15.3	%

	For the Quarter Ended December 31,							For the Year Ended December 31,
New Student Enrollments	2016		2015		Increase (Decrease)			2016		2015		Increase (Decrease)
CTU (1)		5,530		5,710		-3.2	%		20,770		21,890		-5.1	%
AIU (1)		3,750		3,050		23.0	%		14,350		13,400		7.1	%
Total University Group (1)		9,280		8,760		5.9	%		35,120		35,290		-0.5	%
Culinary Arts (2)		—		690	NM				990		7,470	NM
Transitional Group (2)		—		90	NM				90		3,260	NM
Total		9,280		9,540		-2.7	%		36,200		46,020		-21.3	%

(1) 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 decreased 7.7 percent for CTU, increased 15.4 percent for AIU and increased 0.3 percent for the University Group for the quarter ended December 31, 2016 as compared to the prior year quarter. For the full year 2016, new student enrollments would have decreased 7.1 percent for CTU, increased 4.3 percent for AIU and decreased 2.8 percent for the University Group, as compared to the prior year.

(2) Teach-out campuses within the Transitional Group and Culinary Arts no longer enroll new students, effective upon their teach-out announcement; students who re-enter after 365 days are reported as new student enrollments. For Culinary Arts, teach-outs announced in December 2015 were effective beginning after the January 2016 new enrollment.

CEC ANNOUNCES 4Q16 RESULTS …PG 4

OPERATING INCOME (LOSS)

For the quarter and year ended December 31, 2016, the Company recorded an operating loss of $55.9 million and $32.3 million, respectively, compared to operating losses of $3.9 million and $92.2 million for the quarter and year ended December 31, 2015, respectively. Total University Group operating loss of $9.9 million and operating income of $69.8 million for the quarter and year ended December 31, 2016, respectively, included charges of $32.0 million recorded for a legal settlement and associated third party legal fees within AIU as well as increased compensation expenses for the current year related to performance-driven metrics.

The fourth quarter operating loss for the teach-out segments included $18.4 million of unused space charges as compared to $2.5 million in the prior year quarter. Additionally, asset impairment charges for the teach-out segments of $0.9 million were recorded in the current year as compared to $60.0 million recorded in the prior year with $0.9 million and $9.2 million recorded in the current year quarter and prior year quarter, respectively.

	For the Quarter Ended December 31,									For the Year Ended December 31,
Operating Income (Loss) ($ in thousands)	2016			2015			Increase (Decrease)			2016			2015			Increase (Decrease)
CTU	$	28,719		$	30,001			-4.3	%	$	99,412		$	87,496			13.6	%
AIU (1)		(38,634	)		1,538		NM				(29,598	)		5,520		NM
Total University Group		(9,915	)		31,539			-131.4	%		69,814			93,016			-24.9	%
Corporate and Other		(7,937	)		(6,331	)		-25.4	%		(25,097	)		(27,267	)		8.0	%
Subtotal		(17,852	)		25,208			-170.8	%		44,717			65,749			-32.0	%
Culinary Arts (2)		(22,274	)		(14,065	)		-58.4	%		(20,608	)		(57,577	)		64.2	%
Transitional Group (3)		(15,781	)		(15,072	)		-4.7	%		(56,453	)		(100,340	)		43.7	%
Total	$	(55,907	)	$	(3,929	)	NM			$	(32,344	)	$	(92,168	)		64.9	%

(1) Charges of $10.0 million and $22.0 million were recorded during the quarter ended December 31, 2016 for a legal settlement and associated third party legal fees, respectively.

(2) Asset impairment charges of $0.4 million were recorded during the quarter and year ended December 31, 2016. Asset impairment charges of $52.1 million were recorded during the year ended 2015, $9.0 million of which was recorded during the fourth quarter of 2015.

(3) Asset impairment charges of $0.5 million and $7.9 million were recorded during the year ended December 31, 2016 and December 31, 2015, respectively.

NET INCOME (LOSS)

Net loss of $32.9 million was recorded for the quarter ended December 31, 2016 as compared to net income of $142.7 million in the prior year quarter. For the year ended December 31, 2016, net loss was $18.7 million as compared to net income of $51.9 million for the prior year. The prior year quarter and year ended included a tax benefit of $146.5 million and $147.5 million, respectively, driven by the partial reversal of tax valuation allowances.

CEC ANNOUNCES 4Q16 RESULTS …PG 5

ADJUSTED EBITDA

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

As shown in the table below, adjusted EBITDA for the University Group and Corporate was $17.9 million and $91.7 million for the quarter and year ended December 31, 2016, respectively, representing a decrease of 39.4 percent and an increase of 9.6 percent, respectively, as compared to the prior year periods. The current quarter variance is driven by increased compensation expenses related to performance-driven metrics recorded in the current quarter. Adjusted EBITDA for the Transitional Group, Culinary Arts and discontinued operations improved to negative $19.6 million and a negative $49.8 million for the quarter and year ended December 31, 2016, respectively, representing improvement of 5.1 percent and 43.5 percent, respectively, as compared to the prior year periods.

	For the Quarter Ended December 31,						For the Year Ended December 31,
Adjusted EBITDA ($ in thousands)	2016			2015			2016			2015
University Group and Corporate:
(Loss) income from continuing operations (1)	$	(30,030	)	$	142,239		$	(14,816	)	$	53,016
Benefit from income taxes		(25,326	)		(146,531	)		(16,550	)		(147,454	)
Transitional Group pre-tax loss		15,657			15,182			55,856			102,000
Culinary Arts pre-tax loss		22,211			14,065			20,451			57,518
Interest (income) expense, net (2)		(247	)		87			(674	)		44
Depreciation and amortization (2)		2,690			3,318			11,164			15,089
Legal settlements (2)		32,000			200			32,000			200
Stock-based compensation (2)		986			404			3,237			2,857
Asset impairments (2)		—			507			237			507
Unused space charges (2) (3)		—			114			839			(63	)
Adjusted EBITDA--University Group and    Corporate	$	17,941		$	29,585		$	91,744		$	83,714
Memo: Advertising Expenses (2)	$	32,841		$	33,431		$	154,693		$	164,470
Transitional Group, Culinary Arts and Discontinued Operations:
(Loss) income from discontinued operations (1)	$	(2,846	)	$	485		$	(3,896	)	$	(1,131	)
Benefit from income taxes from discontinued operations		(2,064	)		(997	)		(2,690	)		(997	)
Transitional Group pre-tax loss		(15,657	)		(15,182	)		(55,856	)		(102,000	)
Culinary Arts pre-tax loss		(22,211	)		(14,065	)		(20,451	)		(57,518	)
Interest income, net (4)		—			—			(4	)		—
Loss on sale of business (4)		—			161			—			1,793
Depreciation and amortization (4)		3,071			1,759			11,583			9,849
Legal settlements (4)		—			—			—			1,319
Asset impairments (4)		927			9,171			927			60,008
Unused space charges (3) (4)		19,164			(2,002	)		20,550			443
Adjusted EBITDA--Transitional, Culinary Arts and Discontinued Operations	$	(19,616	)	$	(20,670	)	$	(49,837	)	$	(88,234	)
Consolidated Adjusted EBITDA	$	(1,675	)	$	8,915		$	41,907		$	(4,520	)

(1) (Loss) income from continuing operations and (loss) income from discontinued operations make up the components of net (loss) income as reflected on the Company’s consolidated statements of (loss) income and comprehensive (loss) income.

(2) Amounts relate to the University Group and Corporate.

(3) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income as well as the subsequent accretion of these charges.

(4) Amounts relate to Transitional Group, Culinary Arts and discontinued operations.

CEC ANNOUNCES 4Q16 RESULTS …PG 6

BALANCE SHEET AND CASH FLOW

Net cash used in operating activities was negative $9.8 million and net cash flows provided by operating activities was $5.9 million for the quarter and year ended December 31, 2016, respectively, as compared to net cash used in operating activities of $0.7 million and $21.7 million for the prior year periods, respectively. The cash usage in the fourth quarter of 2016 includes increased payments related to exiting and reducing long-term lease obligations as compared to the prior year. The Company’s continued focus on improving marketing efficiencies within the University Group and the reduction in operating losses related to our teach-outs contributed to the improvement in cash flow from operations for the full year.

	For the Quarter Ended December 31,									For the Year Ended December 31,
Selected Cash Flow Items	2016			2015			Increase (Decrease)			2016		2015			Increase (Decrease)
Net cash (used in) provided by operating activities	$	(9,802	)	$	(683	)	NM			$	5,912	$	(21,686	)		-127.3	%
Capital expenditures	$	777		$	3,769			-79.4	%	$	4,129	$	11,695			-64.7	%

As of December 31, 2016 and December 31, 2015, cash, cash equivalents, restricted cash and available-for-sale short-term and long-term investments, net of borrowings, totaled $207.2 million and $201.0 million, respectively.

Consolidated Cash ($ in thousands)	As of December 31, 2016		As of December 31, 2015		Increase (Decrease)
Consolidated cash, cash equivalents,  restricted cash and    available-for-sale short-term investments	$	207,160	$	231,641		-10.6	%
Available-for-sale long-term investments (1)		—		7,374	NM
Short-term borrowings (2)		—		38,000	NM
Consolidated cash, cash equivalents,  restricted cash    and available-for-sale short-term and long-term    investments, net of borrowings (1)	$	207,160	$	201,015		3.1	%

(1) Available-for-sale long-term investment balances are included within non-current other assets on the Company’s consolidated balance sheets.

(2) Cash, cash equivalents, restricted cash and available-for-sale short-term investment balances as of December 31, 2015 include $38.0 million of restricted cash related to cash-collateralized borrowings under the Credit Agreement.

OUTLOOK

With the substantial completion of the teach-outs occurring in 2017, Career Education Corporation will begin disclosing its outlook based on an operating income (loss) and adjusted operating income (loss) measure as well as providing an outlook for year-end cash, cash equivalents, restricted cash and short-term investments, net of borrowings. The Company believes that an adjusted operating income (loss) measure will better reflect the ongoing operations of the business now that the teach-outs will be substantially complete. The Company will no longer provide updates under the previous measure of adjusted EBITDA. The Company 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):

• University Group and Corporate operating income and adjusted operating income to grow in 2017 and 2018 as compared to each respective prior year period.

• Adjusted operating loss for our teach-out segments, comprised of the Transitional Group and Culinary Arts, to be in the range of $50 million to $60 million in 2017 and to improve to a range of $10 million to $20 million in 2018 as we wind-down the remainder of our teach-out campuses.

• End of year cash, cash equivalents, restricted cash and available-for-sale short-term investments, net of any borrowings, as reported on the consolidated balance sheets (i) of approximately $150 million to $160 million for the year ending December 31, 2017, which includes payments related to a legal settlement of $10.0 million and $22.0 million of associated third party legal fees (which amounts were recorded during the fourth quarter of 2016); and (ii) to grow in 2018 as compared to 2017.

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 our outlook above because of adjustments made for unused space charges that represent the present

CEC ANNOUNCES 4Q16 RESULTS …PG 7

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. Theoperating income (loss) and adjusted operating income (loss) and cash outlook provided above for 2017 and 2018 are based on the following key assumptions and factors, among others: (i) modest total enrollment growth within the University Group while achieving the intended University Group efficiencies, (ii) teach-outs to progress as expected and performance consistent with current trends, (iii) achievement of recovery rates for the Company’s real estate obligations and timing of any associated lease termination payments consistent with the Company’s historical experiences, (iv) continued right-sizing of the Company’s corporate expense structure to serve primarily online institutions, (v) no material changes in the legal or regulatory environment and excludes legal and regulatory liabilitieswhich are not probable and estimable at this timeand any impact of new or proposed regulations, including the “borrower defense to repayment” regulations issued in November 2016 and the gainful employment regulation, and (vi) consistent working capital movements in line with historical operating trends and potential impacts of teach-out campuses on working capital in line with expectations.Although these estimates and assumptions are based upon management’s good faith beliefs regarding current events and actions that 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 Thursday, February 23, 2017 at 5:30 p.m. Eastern time to discuss its fourth quarter and full year 2016 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™ adaptive 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,” “intend,” “trend” 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; 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; 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 outcomes; 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, 2016 and its subsequent filings with the Securities and Exchange Commission.

CEC ANNOUNCES 4Q16 RESULTS …PG 8

###

CONTACT

Investors:

Alpha IR Group

Sam Gibbons or Chris Hodges

(312) 445-2870

CECO@alpha-ir.com

Or

Media:

Career Education Corporation

(847) 585-2600

media@careered.com

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2016			December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	49,507		$	66,919
Restricted cash		1,375			49,821
Restricted short-term investments		8,597			-
Short-term investments		147,681			114,901
Total cash and cash equivalents, restricted cash and short-term investments		207,160			231,641
Student receivables, net		22,825			31,618
Receivables, other, net		929			5,194
Prepaid expenses		14,446			14,380
Inventories		1,868			3,353
Other current assets		817			2,523
Assets of discontinued operations		148			254
Total current assets		248,193			288,963
NON-CURRENT ASSETS:
Property and equipment, net		40,512			58,249
Goodwill		87,356			87,356
Intangible assets, net		8,500			9,300
Student receivables, net		3,055			3,958
Deferred income tax assets, net		158,272			137,716
Other assets		7,608			16,562
Assets of discontinued operations		6,105			8,811
TOTAL ASSETS	$	559,601		$	610,915
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings	$	-		$	38,000
Accounts payable		10,099			25,906
Accrued expenses:
Payroll and related benefits		41,203			38,789
Advertising and production costs		10,253			11,788
Income taxes		1,830			1,061
Other		69,244			24,082
Deferred tuition revenue		28,364			40,112
Liabilities of discontinued operations		8,219			13,067
Total current liabilities		169,212			192,805
NON-CURRENT  LIABILITIES:
Deferred rent obligations		30,713			45,927
Other liabilities		31,751			25,197
Liabilities of discontinued operations		6,422			9,376
Total non-current liabilities		68,886			80,500
STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		835			830
Additional paid-in capital		613,325			610,784
Accumulated other comprehensive loss		(258	)		(880	)
Accumulated deficit		(76,230	)		(57,518	)
Cost of shares in treasury		(216,169	)		(215,606	)
Total stockholders' equity		321,503			337,610
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	559,601		$	610,915

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND

COMPREHENSIVE (LOSS) INCOME

(In thousands, except per share amounts and percentages)

	For the Quarter Ended December 31,
	2016			% of Total Revenue			2015			% of Total Revenue
REVENUE:
Tuition and fees	$	154,489			99.5	%	$	198,445			99.2	%
Other		766			0.5	%		1,502			0.8	%
Total revenue		155,255						199,947
OPERATING EXPENSES:
Educational services and facilities		64,107			41.3	%		66,931			33.5	%
General and administrative		140,367			90.4	%		122,190			61.1	%
Depreciation and amortization		5,761			3.7	%		5,077			2.5	%
Asset impairment		927			0.6	%		9,678			4.8	%
Total operating expenses		211,162			136.0	%		203,876			102.0	%
Operating loss		(55,907	)		-36.0	%		(3,929	)		-2.0	%
OTHER INCOME (EXPENSE):
Interest income		362			0.2	%		246			0.1	%
Interest expense		(115	)		-0.1	%		(333	)		-0.2	%
Loss on sale of business		—			0.0	%		(161	)		-0.1	%
Miscellaneous income (expense)		304			0.2	%		(115	)		-0.1	%
Total other income (expense)		551			0.4	%		(363	)		-0.2	%
PRETAX LOSS		(55,356	)		-35.7	%		(4,292	)		-2.1	%
Benefit from income taxes		(25,326	)		-16.3	%		(146,531	)		-73.3	%
(LOSS) INCOME FROM CONTINUING OPERATIONS		(30,030	)		-19.3	%		142,239			71.1	%
(Loss) income from discontinued operations, net of tax		(2,846	)		-1.8	%		485			0.2	%
NET (LOSS) INCOME		(32,876	)		-21.2	%		142,724			71.4	%
OTHER COMPREHENSIVE LOSS, net of tax:
Foreign currency translation adjustments		(220	)					—
Unrealized loss on investments		(125	)					(260	)
Total other comprehensive loss		(345	)					(260	)
COMPREHENSIVE (LOSS) INCOME	$	(33,221	)				$	142,464
NET (LOSS) INCOME PER SHARE - BASIC:
(Loss) income from continuing operations	$	(0.44	)				$	2.09
(Loss) income from discontinued operations		(0.04	)					0.01
Net (loss) income per share	$	(0.48	)				$	2.10
NET (LOSS) INCOME PER SHARE - DILUTED:
(Loss) income from continuing operations	$	(0.44	)				$	2.08
Loss from discontinued operations		(0.04	)					—
Net (loss) income per share	$	(0.48	)				$	2.08
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		68,505						68,046
Diluted		68,505						68,506

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND

COMPREHENSIVE (LOSS) INCOME

(In thousands, except per share amounts and percentages)

	For the Year Ended December 31,
	2016			%of Total Revenue			2015			% of Total Revenue
REVENUE:
Tuition and fees	$	700,525			99.5	%	$	842,062			99.4	%
Other		3,867			0.5	%		5,211			0.6	%
Total revenue		704,392						847,273
OPERATING EXPENSES:
Educational services and facilities		235,100			33.4	%		289,777			34.2	%
General and administrative		477,725			67.8	%		564,211			66.6	%
Depreciation and amortization		22,747			3.2	%		24,938			2.9	%
Asset impairment		1,164			0.2	%		60,515			7.1	%
Total operating expenses		736,736			104.6	%		939,441			110.9	%
Operating loss		(32,344	)		-4.6	%		(92,168	)		-10.9	%
OTHER INCOME (EXPENSE):
Interest income		1,262			0.2	%		794			0.1	%
Interest expense		(584	)		-0.1	%		(835	)		-0.1	%
Loss on sale of business		—			0.0	%		(1,793	)		-0.2	%
Miscellaneous income (expense)		300			0.0	%		(436	)		-0.1	%
Total other income (expense)		978			0.1	%		(2,270	)		-0.3	%
PRETAX LOSS		(31,366	)		-4.5	%		(94,438	)		-11.1	%
Benefit from income taxes		(16,550	)		-2.3	%		(147,454	)		-17.4	%
(LOSS) INCOME FROM CONTINUING OPERATIONS		(14,816	)		-2.1	%		53,016			6.3	%
Loss from discontinued operations, net of tax		(3,896	)		-0.6	%		(1,131	)		-0.1	%
NET (LOSS) INCOME		(18,712	)		-2.7	%		51,885			6.1	%
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Foreign currency translation adjustments		(77	)					—
Unrealized gain (loss) on investments		699						(27	)
Total other comprehensive income (loss)		622						(27	)
COMPREHENSIVE (LOSS) INCOME	$	(18,090	)				$	51,858
NET (LOSS) INCOME PER SHARE - BASIC and DILUTED:
(Loss) income from continuing operations	$	(0.22	)				$	0.78
Loss from discontinued operations		(0.05	)					(0.02	)
Net (loss) income per share	$	(0.27	)				$	0.76
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		68,373						67,860
Diluted		68,373						68,328

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Year Ended December 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(18,712	)	$	51,885
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Asset impairment		1,164			60,515
Depreciation and amortization expense		22,747			24,938
Bad debt expense		31,885			21,980
Compensation expense related to share-based awards		3,237			2,857
Loss on sale of business, net		—			1,793
(Gain) loss on disposition of property and equipment		(438	)		663
Deferred income taxes		(18,087	)		(145,807	)
Changes in operating assets and liabilities:
Student receivables, gross		6,925			(1,517	)
Allowance for doubtful accounts		(29,033	)		(20,960	)
Other receivables, net		1,127			14,311
Inventories, prepaid expenses, and other current assets		2,783			6,160
Deposits and other non-current assets		1,634			2,711
Accounts payable		(16,264	)		2,539
Accrued expenses and deferred rent obligations		28,691			(31,104	)
Deferred tuition revenue		(11,747	)		(12,650	)
Net cash provided by (used in) operating activities		5,912			(21,686	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(160,590	)		(93,360	)
Sales of available-for-sale investments		126,830			100,173
Purchases of property and equipment		(4,129	)		(11,695	)
Proceeds on the sale of assets		3,600			2,272
Payments of cash upon sale of businesses		(62	)		(4,013	)
Purchase of equity method investment		—			(1,368	)
Net cash used in investing activities		(34,351	)		(7,991	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		773			1,401
Borrowings from credit facility		—			38,000
Payment on borrowings		(38,000	)		(10,000	)
Change in restricted cash		48,446			(26,883	)
Net cash provided by financing activities		11,219			2,518
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH    AND CASH EQUIVALENTS:		(192	)		246
NET DECREASE IN CASH AND CASH EQUIVALENTS		(17,412	)		(26,913	)
CASH AND CASH EQUIVALENTS, beginning of the period		66,919			93,832
CASH AND CASH EQUIVALENTS, end of the period	$	49,507		$	66,919

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Quarter Ended December 31,
	2016			2015
REVENUE:
CTU	$	94,696		$	91,481
AIU		40,909			45,871
Total University Group		135,605			137,352
Corporate and Other		—			40
Subtotal		135,605			137,392
Culinary Arts		14,462			42,020
Transitional Group		5,188			20,535
Total	$	155,255		$	199,947
OPERATING INCOME (LOSS):
CTU	$	28,719		$	30,001
AIU		(38,634	)		1,538
Total University Group		(9,915	)		31,539
Corporate and Other		(7,937	)		(6,331	)
Subtotal		(17,852	)		25,208
Culinary Arts		(22,274	)		(14,065	)
Transitional Group		(15,781	)		(15,072	)
Total	$	(55,907	)	$	(3,929	)
OPERATING MARGIN (LOSS):
CTU		30.3	%		32.8	%
AIU		-94.4	%		3.4	%
Total University Group		-7.3	%		23.0	%
Corporate and Other	NM			NM
Subtotal		-13.2	%		18.3	%
Culinary Arts		-154.0	%		-33.5	%
Transitional Group		-304.2	%		-73.4	%
Total		-36.0	%		-2.0	%

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Year Ended December 31,
	2016			2015
REVENUE:
CTU	$	369,319		$	348,215
AIU		193,032			201,649
Total University Group		562,351			549,864
Corporate and Other		—			157
Subtotal		562,351			550,021
Culinary Arts		104,452			170,190
Transitional Group		37,589			127,062
Total	$	704,392		$	847,273
OPERATING INCOME (LOSS):
CTU	$	99,412		$	87,496
AIU		(29,598	)		5,520
Total University Group		69,814			93,016
Corporate and Other		(25,097	)		(27,267	)
Subtotal		44,717			65,749
Culinary Arts		(20,608	)		(57,577	)
Transitional Group		(56,453	)		(100,340	)
Total	$	(32,344	)	$	(92,168	)
OPERATING MARGIN (LOSS):
CTU		26.9	%		25.1	%
AIU		-15.3	%		2.7	%
Total University Group		12.4	%		16.9	%
Corporate and Other	NM			NM
Subtotal		8.0	%		12.0	%
Culinary Arts		-19.7	%		-33.8	%
Transitional Group		-150.2	%		-79.0	%
Total		-4.6	%		-10.9	%

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS ⁽¹⁾

(In thousands)

	For the Quarter Ended December 31,						For the Year Ended December 31,
Adjusted EBITDA	2016			2015			2016			2015
University Group and Corporate:
(Loss) income from continuing operations (2)	$	(30,030	)	$	142,239		$	(14,816	)	$	53,016
Benefit from income taxes		(25,326	)		(146,531	)		(16,550	)		(147,454	)
Transitional Group pre-tax loss		15,657			15,182			55,856			102,000
Culinary Arts pre-tax loss		22,211			14,065			20,451			57,518
Interest (income) expense, net (3)		(247	)		87			(674	)		44
Depreciation and amortization (3)		2,690			3,318			11,164			15,089
Legal settlements (3) (4)		32,000			200			32,000			200
Stock-based compensation (3)		986			404			3,237			2,857
Asset impairments (3)		—			507			237			507
Unused space charges (3) (5)		—			114			839			(63	)
Adjusted EBITDA--University Group and    Corporate (6)	$	17,941		$	29,585		$	91,744		$	83,714
Memo: Advertising Expenses (3)	$	32,841		$	33,431		$	154,693		$	164,470
Transitional Group, Culinary Arts and Discontinued Operations:
(Loss) income from discontinued operations (2)	$	(2,846	)	$	485		$	(3,896	)	$	(1,131	)
Benefit from income taxes from discontinued operations		(2,064	)		(997	)		(2,690	)		(997	)
Transitional Group pre-tax loss		(15,657	)		(15,182	)		(55,856	)		(102,000	)
Culinary Arts pre-tax loss		(22,211	)		(14,065	)		(20,451	)		(57,518	)
Interest income, net (7)		—			—			(4	)		—
Loss on sale of business (7)		—			161			—			1,793
Depreciation and amortization (7)		3,071			1,759			11,583			9,849
Legal settlements (4) (7)		—			—			—			1,319
Asset impairments (7)		927			9,171			927			60,008
Unused space charges (5) (7)		19,164			(2,002	)		20,550			443
Adjusted EBITDA--Transitional, Culinary Arts and Discontinued Operations (6) (8)	$	(19,616	)	$	(20,670	)	$	(49,837	)	$	(88,234	)
Consolidated Adjusted EBITDA	$	(1,675	)	$	8,915		$	41,907		$	(4,520	)

(1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance.
During 2016, the Company believed adjusted EBITDA to be a useful measure as it allowed the Company to compare current operating results with corresponding historical periods and with the operational performance of other companies in its industry because it did not give effect to potential differences caused by items not considered reflective of underlying operating performance. In evaluating adjusted EBITDA for 2016 and earlier, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted EBITDA 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 EBITDA has limitations as an analytical tool, and it should not be considered in isolation, or as a substitute for net (loss) income, operating (loss) income, 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 liquidity.
Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an

additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.

(2) (Loss) income from continuing operations and (loss) income from discontinued operations make up the components of net (loss) income. A reconciliation of these components for the quarters and years ended December 31, 2016 and December 31, 2015 is presented below:

	For the Quarter Ended December 31,					For the Year Ended December 31,
	2016			2015		2016			2015
(Loss) income from continuing operations	$	(30,030	)	$	142,239	$	(14,816	)	$	53,016
(Loss) income from discontinued operations		(2,846	)		485		(3,896	)		(1,131	)
Net (loss) income	$	(32,876	)	$	142,724	$	(18,712	)	$	51,885

(3) Amounts relate to the University Group and Corporate.

(4) Legal settlement amounts are net of insurance recoveries.

(5) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income as well as the subsequent accretion of these charges. These charges relate to vacated leased space as the Company continues to right-size the organization and therefore are not considered representative of ongoing operations.

(6) Management assesses results of operations for the University Group and Corporate separately from the Transitional Group and Culinary Arts. As the Transitional Group and Culinary Arts have been announced for teach-out, management views these operations as not reflective of the ongoing business. As a result, management views adjusted EBITDA from the University Group and Corporate separately from the remainder of the organization, to assess results and make decisions. Accordingly, the Transitional Group and Culinary Arts pre-tax losses are added back to (loss) income from continuing operations and subtracted from (loss) income from discontinued operations.

(7) Amounts relate to the Transitional Group, Culinary Arts and discontinued operations.

(8) Adjusted EBITDA amounts for Culinary Arts separate from the Transitional Group and discontinued operations include:

	For the Quarter Ended December 31,						For the Year Ended December 31,
	2016			2015			2016			2015
Pre-tax loss	$	(22,211	)	$	(14,065	)	$	(20,451	)	$	(57,518	)
Depreciation and amortization		1,776			—			6,234			—
Legal settlements		—			—			—			775
Asset impairments		383			9,005			383			52,138
Unused space charges		13,684			191			17,394			(959	)
Adjusted EBITDA for Culinary Arts	$	(6,368	)	$	(4,869	)	$	3,560		$	(5,564	)

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS ⁽¹⁾

(In thousands)

	ACTUAL RESULTS						OUTLOOK
	For the Year Ended December 31,						For the Year Ended December 31,
Adjusted Operating Income (Loss)	2015			2016			2017	2018
University Group and Corporate:
Operating income (2) (3)	$	65,749		$	44,717		Growth vs 2016	Growth vs 2017
Depreciation and amortization (3)		15,089			11,164		2016 Levels
Asset impairments (3)		507			237		None Assumed
Unused space charges (3) (4)		1,556			1,134		None Assumed
Significant legal settlements (3)		—			32,000		None Assumed
Adjusted Operating Income -- University Group and Corporate (5)	$	82,901		$	89,252		Growth vs 2016	Growth vs 2017
Transitional Group and Culinary Arts:
Operating loss (2) (6)	$	(157,917	)	$	(77,061	)	$(80) -- $(90) million	$(18) -- $(28) million
Depreciation and amortization (6)		9,849			11,583		~$5 million	—
Asset impairments (6)		60,008			927		None Assumed
Unused space charges (4) (6)		17,940			34,719		~$25 million	~$8 million
Adjusted Operating Loss -- Transitional and Culinary Arts (5)	$	(70,120	)	$	(29,832	)	$(50) -- $(60) million	$(10) -- $(20) million

(1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance.

The Company believes adjusted operating income (loss) allows it to 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 (loss) income, operating (loss) income, 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 liquidity.

Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business.  Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.

(2) Operating income for University Group and Corporate and operating loss for the Transitional Group and Culinary Arts make up the components of operating (loss) income. A reconciliation of these components for the years ended December 31, 2016 and December 31, 2015 is presented below:

	For the Year Ended December 31,
	2015			2016
Operating income for University Group and Corporate	$	65,749		$	44,717
Operating loss for Culinary Arts and Transitional		(157,917	)		(77,061	)
Operating loss	$	(92,168	)	$	(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 the Transitional Group and Culinary Arts. As the Transitional Group and Culinary Arts have been announced for teach-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 the Transitional Group and Culinary Arts.

EX-99.2

CAREER EDUCATION CORPORATION FOURTH quarter 2016 investor conference call FEBRUARY 23, 2017 A.J. Cederoth Chief Financial Officer Ashish Ghia Vice President, Finance Todd Nelson President & Chief Executive Officer Exhibit 99.2

This presentation contains “forward-looking statements,” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business prospects and opportunities, as well as assumptions made by (see, for example, slide 10), and information currently available to, our management. We have tried to identify forward-looking statements by using words such as “believe,” “should,” “will,” “expect,” “estimate,” “continue to,” “outlook,” “trend” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Item 1A,“Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2016 and our subsequent filings with the Securities and Exchange Commission that could cause our actual growth, results of operations, financial condition, cash flows, 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 any of the forward-looking statements to reflect future events, developments, or changed circumstances or for any other reason. Certain financial information is presented on a non-GAAP basis. The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations.  As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its core business, 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 most directly comparable GAAP information and a reconciliation between the non-GAAP and GAAP figures are provided at the end of this presentation, and this presentation (including the reconciliation) has been posted to our website. Cautionary Statements & Disclosures

Agenda The Year in Review Fourth Quarter Highlights Detailed Financial Results Balance Sheet and Liquidity Review Outlook CEO Closing Remarks

Financial Results – Consolidated CEC Charges of $10.0 million and $22.0 million were recorded within AIU during the fourth quarter of 2016 related to a legal settlement and associated third party legal fees, respectively. Please refer to slides 11 - 13 at the end of this presentation for a GAAP to non-GAAP reconciliation of adjusted EBITDA. Cash includes cash, cash equivalents, restricted cash and available-for-sale short-term and long-term investments, net of borrowings. Q4 Financial Results - Consolidated CEC Consolidated CEC ($M) Q42016 Q42015 $Change %Change YTD2016 YTD2015 $Change %Change Revenue $155.30000000000001 $199.9 $-44.7 -0.224 $704.4 $847.3 $-,142.9 -0.16900000000000001 Operating loss(1) $-55.9 $-3.9 $-52 NM $-32.299999999999997 $-92.2 $59.8 0.64900000000000002 Net (loss) income(1) $-32.9 $142.69999999999999 $-,175.6 -1.23 $-18.7 $51.9 $-70.599999999999994 -1.361 Consolidated adjusted EBITDA(2) $-1.7 $8.9 $-10.6 -1.1879999999999999 $41.9 $-4.5 $46.4 NM University Group & Corporate adjusted EBITDA(2) $17.899999999999999 $29.6 $-11.6 -0.39400000000000002 $91.7 $83.7 $8 9.6% Cash (3) $207.2 $201 $6.1 3.1% $207.2 $201 $6.1 3.1% Cash flow from operations $-9.8000000000000007 $-0.7 $-9.1 NM $5.9 $-21.7 $27.6 1.2729999999999999 *Consolidated CEC excludes Discontinued Operations

Financial Results – University Group Charges of $10.0 million and $22.0 million were recorded within AIU during the fourth quarter of 2016 related to a legal settlement and associated third party legal fees, respectively. New student enrollments were positively impacted by a change to how the Company records certain cancelled students. Excluding the impact of this change new student enrollments for the University Group would have increased 0.3% and decreased 2.8% for the quarter and year ended December 31, 2016, respectively, as compared to the prior year periods. Total enrollments are disclosed as of the end of each period presented. Q4 Financial Results - University University ($M) Q42016 Q42015 Change %Change YTD2016 YTD2015 Change %Change Revenue $135.6 $137.4 $-1.7 -1.3% $562.4 $549.9 $12.5 2.3% Operating (loss) income(1) $-9.9 $31.5 $-41.5 -1.3140000000000001 $69.8 $93 $-23.2 -0.249 New enrollments(2) 9,280 8,760 520 5.9% 35,120 35,290 -,170 -0.5% Total enrollments(3) 33,600 31,900 1,700 5.3% 33,600 31,900 1,700 5.3%

Financial Results - Culinary Arts & Transitional PHASE DOWN OF CAMPUSES IN TEACH-OUT Total enrollments are disclosed as of the end of each period presented. Teach-out dates are estimated based on current student enrollment and are subject to change. Campuses at Beginning of each Quarter(2) Q4 2015 Q4 2016 Q1 2017 Q1 2018 Q1 2019 44 34 30 6 0 - Q4 2016 includes 17 Transitional and 17 Culinary Arts campuses - All Culinary Arts campuses expected to teach-out by end of Q4 2017 Q4 Financial Results - Culinary & Transitional Culinary Arts ($M) Q42016 Q42015 Change %Change YTD2016 YTD2015 Change %Change Revenue $14.5 $42 $-27.6 -0.65600000000000003 $104.5 $170.2 $-65.7 -0.38600000000000001 Operating loss $-22.3 $-14.1 $-8.1999999999999993 -0.58399999999999996 $-20.6 $-57.6 $37 0.64200000000000002 Total enrollments (1) 2,300 7,800 -5,500 -0.70499999999999996 2,300 7,800 -5,500 -0.70499999999999996 Transitional ($M) Q42016 Q42015 Change %Change YTD2016 YTD2015 Change %Change Revenue $5.2 $20.5 $-15.3 -0.747 $37.6 $127.1 $-89.5 -0.70399999999999996 Operating loss $-15.8 $-15.1 $-0.7 -4.7% $-56.5 $-,100.3 $43.9 0.437 Total enrollments (1) 700 3,500 -2,800 -0.8 700 3,500 -2,800 -0.8 *Consolidated Briarcliffe counted as a single institution

2017 Outlook – Operating Income and Adjusted Operating Income 2017 Outlook will transition from adjusted EBITDA to operating income and adjusted operating income Adjusted EBITDA was a useful measure while we still had significant teach-out operations, as it eliminates certain items that we do not consider reflective of underlying operating performance With the substantial completion of our teach-outs by the end of 2017, we believe it is the right time to transition to a more conventional measure of performance 2016 Actual Results vs Previous Outlook 2016 consolidated adjusted EBITDA of $41.9 million is in line with our previously provided outlook of significant improvement versus 2015 Better than estimated total enrollments and improved retention trends across most of our institutions Operating efficiencies at our teach-out campuses Year-end cash of $207 million increased versus 2015 Improved EBITDA performance, including within our teach-out campuses Earlier than expected realization of operating efficiencies and slightly better working capital trends 2016 Actual Results Please refer to slides 11 - 13 at the end of this presentation for a GAAP to non-GAAP reconciliation of adjusted EBITDA. ACTUAL RESULTS COMPARED TO OUTLOOK Description 2015Results 2016 Results Previous Outlook* Consolidated adjusted EBITDA(1) $-4,520,116.2489999998 $41,907,915.820009522 SignificantlyImprove vs 2015 Year-end cash, cash equivalents, restricted cash, and available-for-sale short-term and long-term investments, net of borrowings $201M $207M $180M -$190M *provided November 2016

Outlook Update – Analysis of Adjusted Operating Income Estimated outlook is based on assumptions listed on slide 10 See slides 14 -15 for a GAAP to non-GAAP reconciliation of adjusted operating income (loss) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income 2017 cash outlook includes payments related to charges recorded for a $10.0 million legal settlement and associated third party legal fees of $22.0 million. University Group and Corporate Culinary Arts and Transitional Ending Cash ACTUAL CEC OUTLOOK(1) 2015 2016 2017 2018 UniversityCorporate Adjusted Operating Income(2) $82,900,000 $89,300,000 Growth vs 2016 Growth vs 2017 Adjustments: 44.7 Depreciation and amortization 15.1 11,164,501.84 2016 Levels 11.2 Asset impairment 0.5 ,257,025.98 None Assumed 0.3 Unused space charges(3) 1.6 1,133,634.28 None Assumed 1.1000000000000001 Significant legal settlements - 32,000,000 None Assumed 32 Operating Income $65,700,000 $44,700,000 Growth vs 2016 Growth vs 2017 89.300000000000011 TransCulinary Adjusted Operating Loss(2) $,-70,100,000 $,-29,800,000 ($50 - $60M) ($10 - $20M) -157.9 -77.099999999999994 Adjustments: 9.8000000000000007 11.6 Depreciation and amortization 9.9 11.6 ~5 0 60 0.9 Asset impairment 60 1 None Assumed 17.899999999999999 34.700000000000003 Unused space charges(3) 17.899999999999999 34.700000000000003 ~25 ~8 -70.199999999999989 -29.899999999999991 Operating Loss $-,157,900,000 $,-77,100,000 ($80 - $90M) ($18 - $28M) Year-end cash, cash equivalents, restricted cash, and available-for-sale short-term and long-term investments, net of borrowings $201M $207M $150M - $160M(4) Increase vs 2017

2017 outlook of $150M-$160M includes payments for a settlement and third party legal fees recorded during 2016, excluding which, the 2017 cash outlook would be ahead of our previously provided outlook Cash balances are expected to increase in 2018 as lease obligations start to ramp down and working capital trends improve due to completion of teach-outs Outlook Update – Analysis of Adjusted Operating Income Estimated outlook is based on assumptions listed on slide 10 See slides 14 – 15 for a GAAP to non-GAAP reconciliation of adjusted operating income (loss). Adjusted operating income expected to show growth in 2017 primarily driven by: Total enrollment growth across both Universities Improved operating leverage as revenue continues to grow while overall operating costs remain optimized Leveraging technology to promote faculty and student engagement which will positively impact retention Improved operating processes in areas of student onboarding, advising and academics Adjusted operating losses are expected to increase in 2017 primarily driven by costs associated with completion of LCB teachouts 2018 adjusted operating losses are expected to improve due to completion of all teach-outs University Group & Corporate Outlook(1) (2) Culinary Arts and Transitional Outlook(1) (2) Management evaluates operating income (loss) by adjusting for depreciation, amortization, asset impairments, significant legal settlements and unused space charges We believe adjusted operating income (loss) is useful when analyzing operations and business trends Overview of Outlook Metrics(1) (2) Cash Outlook(1)

Outlook Assumptions Achievement of the outlook included within these slides are based on the following key assumptions and factors, among others: Modest total enrollment growth within the University Group while achieving the intended University Group efficiencies Teach-outs to progress as expected and performance consistent with current trends Achievement of recovery rates for our real estate obligations and timing of any associated lease termination payments consistent with our historical experiences Continued right-sizing of our Corporate expense structure to serve primarily online institutions No material changes in the current legal or regulatory environment and excludes legal and regulatory liabilities which are not probable and estimable at this time, and any impact of new or proposed regulations, including the new “borrower defense to repayment” regulations and the gainful employment regulation Consistent working capital movements in line with historical operating trends and potential impact of teach-out campuses on working capital in line with expectations Although these estimates and assumptions are based upon management’s good faith beliefs regarding current events and actions that we may undertake in the future, actual results could differ materially from estimates.

Reconciliation of GAAP to Non-GAAP Items – Adjusted EBITDA CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands) For the Quarter Ended December 31, For the Year Ended December 31, Adjusted EBITDA 2016 2015 2016 2015 University Group and Corporate: (Loss) income from continuing operations (2) $,-30,030 $,142,239 $,-14,816 $53,016 Benefit from income taxes ,-25,326 -,146,531 ,-16,550 -,147,454 Transitional Group pre-tax loss 15,657 15,182 55,856 ,102,000 Culinary Arts pre-tax loss 22,211 14,065 20,451 57,518 Interest (income) expense, net (3) -,247 87 -,674 44 Depreciation and amortization (3) 2,690 3,318 11,164 15,089 Legal settlements (3) (4) 32,000 200 32,000 200 Stock-based compensation (3) 986 404 3,237 2,857 Asset impairments (3) 0 507 237 507 Unused space charges (3) (5) 0 114 839 -63 Adjusted EBITDA--University Group and Corporate (6) $17,941 $29,585 $91,744 $83,714 Memo: Advertising Expenses (3) $32,841 $33,431 $,154,693 $,164,470 Transitional Group, Culinary Arts and Discontinued Operations: (Loss) income from discontinued operations (2) $-2,846 $485 $-3,896 $-1,131 Benefit from income taxes from discontinued operations -2,064 -,997 -2,690 -,997 Transitional Group pre-tax loss ,-15,657 ,-15,182 ,-55,856 -,102,000 Culinary Arts pre-tax loss ,-22,211 ,-14,065 ,-20,451 ,-57,518 Interest income, net (7) 0 0 -4 0 Loss on sale of business (7) 0 161 0 1,793 Depreciation and amortization (7) 3,071 1,759 11,583 9,849 Legal settlements (4) (7) 0 0 0 1,319 Asset impairments (7) 927 9,171 927 60,008 Unused space charges (5) (7) 19,164 -2,002 20,550 443 Adjusted EBITDA--Transitional, Culinary Arts and Discontinued Operations (6) (8) $,-19,616 $,-20,670 $,-49,837 $,-88,234 Consolidated Adjusted EBITDA $-1,675 $8,915 $41,907 $-4,520

Reconciliation of GAAP to Non-GAAP Items – Adjusted EBITDA cont’d (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. During 2016, the Company believed adjusted EBITDA to be a useful measure as it allowed the Company to compare current operating results with corresponding historical periods and with the operational performance of other companies in its industry because it did not give effect to potential differences caused by items not considered reflective of underlying operating performance. In evaluating adjusted EBITDA for 2016 and earlier, investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted EBITDA 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 EBITDA has limitations as an analytical tool, and it should not be considered in isolation, or as a substitute for net (loss) income, operating (loss) income, 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 liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Items – Adjusted EBITDA cont’d (2) (Loss) income from continuing operations and (loss) income from discontinued operations make up the components of net (loss) income. A reconciliation of these components for the quarters and years ended December 31, 2016 and December 31, 2015 is presented below: For the Quarter Ended December 31, For the Year Ended December 31, 2016 2015 2016 2015 (Loss) income from continuing operations $,-30,030 $,142,239 $,-14,816 $53,016 (Loss) income from discontinued operations -2,846 485 -3,896 -1,131 Net (loss) income $,-32,876 $,142,724 $,-18,712 $51,885 (3) Amounts relate to the University Group and Corporate. (4) Legal settlement amounts are net of insurance recoveries. (5) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income as well as the subsequent accretion of these charges. These charges relate to vacated leased space as the Company continues to right-size the organization and therefore are not considered representative of ongoing operations. (6) Management assesses results of operations for the University Group and Corporate separately from the Transitional Group and Culinary Arts. As the Transitional Group and Culinary Arts have been announced for teach-out, management views these operations as not reflective of the ongoing business. As a result, management views adjusted EBITDA from the University Group and Corporate separately from the remainder of the organization, to assess results and make decisions. Accordingly, the Transitional Group and Culinary Arts pre-tax losses are added back to (loss) income from continuing operations and subtracted from (loss) income from discontinued operations. (7) Amounts relate to the Transitional Group, Culinary Arts and discontinued operations. (8) Adjusted EBITDA amounts for Culinary Arts separate from the Transitional Group and discontinued operations include: For the Quarter Ended December 31, For the Year Ended December 31, 2016 2015 2016 2015 Pre-tax loss $,-22,211 $,-14,065 $,-20,451 $,-57,518 Depreciation and amortization 1,776 0 6,234 0 Legal settlements 0 0 0 775 Asset impairments 383 9,005 383 52,138 Unused space charges 13,684 191 17,394 -,959 Adjusted EBITDA for Culinary Arts $-6,368 $-4,869 $3,560 $-5,564

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands) ACTUAL RESULTS OUTLOOK For the Year Ended December 31, For the Year Ended December 31, Adjusted Operating Income (Loss) 2015 2016 2017 2018 University Group and Corporate: Operating income (2) (3) $65,749 $44,717 Growth vs 2016 Growth vs 2017 Depreciation and amortization (3) 15,089 11,164 2016 Levels Asset impairments (3) 507 237 None Assumed Unused space charges (3) (4) 1,556 1,134 None Assumed Significant legal settlements (3) 0 32,000 None Assumed Adjusted Operating Income --University Group and Corporate (5) $82,901 $89,252 Growth vs 2016 Growth vs 2017 Transitional Group and Culinary Arts: Operating loss (2) (6) $-,157,917 $,-77,061 $(80) -- $(90) million $(18) -- $(28) million Depreciation and amortization (6) 9,849 11,583 ~$5 million — Asset impairments (6) 60,008 927 None Assumed Unused space charges (4) (6) 17,940 34,719 ~$25 million ~$8 million Adjusted Operating Loss --Transitional and Culinary Arts (5) $,-70,120 $,-29,832 $(50) -- $(60) million $(10) -- $(20) million Tab 14 Tab 13 (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income (loss) allows it to 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 (loss) income, operating (loss) income, 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 liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP. (2) Operating income for University Group and Corporate and operating loss for the Transitional Group and Culinary Arts make up the components of operating (loss) income. A reconciliation of these components for the years ended December 31, 2016 and December 31, 2015 is presented below: For the Year Ended December 31, 2015 2016 Operating income for University Group and Corporate $65,749 $44,717 Operating loss for Culinary Arts and Transitional -,157,917 ,-77,061 Operating loss $,-92,168 $,-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 the Transitional Group and Culinary Arts. As the Transitional Group and Culinary Arts have been announced for teach-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 the Transitional Group and Culinary Arts.

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) cont’d CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands) ACTUAL RESULTS OUTLOOK For the Year Ended December 31, For the Year Ended December 31, Adjusted Operating Income (Loss) 2015 2016 2017 2018 University Group and Corporate: Operating income (2) (3) $65,749 $44,717 Growth vs 2016 Growth vs 2017 Depreciation and amortization (3) 15,089 11,164 2016 Levels Asset impairments (3) 507 237 None Assumed Unused space charges (3) (4) 1,556 1,134 None Assumed Significant legal reserves (3) 0 32,000 None Assumed Adjusted Operating Income --University Group and Corporate (5) $82,901 $89,252 Growth vs 2016 Growth vs 2017 Transitional Group and Culinary Arts: Operating loss (2) (6) $-,157,917 $,-77,061 $(75) -- $(85) million $(20) -- $(30) million Depreciation and amortization (6) 9,849 11,583 $4 -- $6 million — Asset impairments (6) 60,008 927 None Assumed Unused space charges (4) (6) 17,940 34,728 $18 -- $24 million $2 -- $6 million Adjusted Operating Loss --Transitional and Culinary Arts (5) $,-70,120 $,-29,823 $(45) -- $(63) million $(14) -- $(28) million Tab 14 Tab 13 (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income (loss) allows it to 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 (loss) income, operating (loss) income, 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 liquidity. Non-GAAP financial measures, when viewed in a reconciliation to corresponding GAAP financial measures, provide an additional way of viewing the Company’s results of operations and the factors and trends affecting the Company’s business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding financial results presented in accordance with GAAP. (2) Operating income for University Group and Corporate and operating loss for the Transitional Group and Culinary Arts make up the components of operating (loss) income. A reconciliation of these components for the years ended December 31, 2016 and December 31, 2015 is presented below: For the Year Ended December 31, 2015 2016 Operating income for University Group and Corporate $65,749 $44,717 Operating loss for Culinary Arts and Transitional -,157,917 ,-77,061 Operating loss $,-92,168 $,-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 the Transitional Group and Culinary Arts. As the Transitional Group and Culinary Arts have been announced for teach-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 the Transitional Group and Culinary Arts.