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): November 2, 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On November 2, 2017, Career Education Corporation (the “Company”) issued a press release describing the Company’s financial results for the quarter and year to date ended September 30, 2017. 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 to date ended September 30, 2017 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.

The exhibits required by Item 601 of Regulation S-K are listed in the “Exhibit Index” which is contained in this Current Report on Form 8-K and are incorporated by reference herein.

2

Exhibit Index

Exhibit Number	Description of Exhibits
99.1	Press release of the Company dated November 2, 2017 reporting the Company’s financial results for the quarter and year to date ended September 30, 2017
99.2	Presentation materials used by the Company in connection with its November 2, 2017 earnings conference call and webcast

3

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/ Ashish R. Ghia
	Ashish R. Ghia
	Interim Chief Financial Officer

Date: November 2, 2017

4

EX-99.1

CEC ANNOUNCES 3Q17 RESULTS …PG 1

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS RESULTS FOR THIRD QUARTER ENDED SEPTEMBER 30, 2017

University Group total enrollments, revenue and operating income show growth versus the prior year quarter

Schaumburg, Ill. (November 2, 2017) – Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the third quarter and year to date ended September 30, 2017.

University Group and Corporate (Ongoing Operations) Third Quarter Highlights:

• Total enrollments increased 2.5 percent as compared to the prior year partially driven by an increase in new enrollments of 5.8 percent for the current quarter as compared to the prior year quarter

• Operating income of $23.6 million for the current quarter as compared to the prior year quarter operating income of $16.2 million, a 45.9 percent increase primarily driven by operating efficiencies within the University Group as well as improving enrollment trends

• Revenue of $141.5 million for the current quarter as compared to revenue of  $139.5 million in the prior year quarter, with the increase partially driven by growth in total and new enrollments

3^rd Quarter Consolidated Results:

• Operating income of $4.5 million for the current quarter as compared to an operating loss of $0.7 million for the prior year quarter

• Revenue of $145.0 million for the current quarter as compared to revenue of $167.6 million for the prior year quarter, with the decline expected and driven by the continued progress toward teach-out completion of the Transitional Group and Culinary Arts campuses

• Ended the quarter with $175.9 million in cash, cash equivalents, restricted cash and available-for-sale short-term investments, which represents a $3.9 million increase as compared to the second quarter of 2017

“We continued to experience better than expected enrollment trends and operating efficiencies during the third quarter, and are on track to close 2017 ahead of our initial expectations for the year,” said Todd Nelson, President and Chief Executive Officer. “Much of the momentum we are experiencing in the quarter is related to the success of initiatives we implemented throughout the year to pursue sustainable and responsible growth, including investments in technology and student support processes. We remain encouraged by the level of student engagement, retention and outcomes we are experiencing, and we expect to see continued enrollment growth in the fourth quarter of 2017.”

CEC ANNOUNCES 3Q17 RESULTS …PG 2

REVENUE

For the quarter and year to date ended September 30, 2017, total revenue was $145.0 million and $453.3 million representing a decrease of 13.5 percent and 17.4 percent, respectively, compared to total revenue of $167.6 million and $549.1 million for the quarter and year to date ended September 30, 2016, respectively. The decrease was primarily driven by declining revenues within the Transitional Group and Culinary Arts segments. The Culinary Arts segment completed its teach-out as of September 30, 2017 and the remaining eight Transitional Group campuses will complete their teach-outs through 2018.

Total revenue for the University Group was $141.5 million and $427.2 million representing an increase of 1.4 percent and 0.1 percent, respectively, for the quarter and year to date ended September 30, 2017 as compared to the respective prior year periods.

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
Revenue ($ in thousands)	2017		2016		Increase (Decrease)			2017		2016		Increase (Decrease)
CTU	$	91,319	$	90,921		0.4	%	$	276,558	$	274,623		0.7	%
AIU		50,150		48,542		3.3	%		150,618		152,123		-1.0	%
Total University Group		141,469		139,463		1.4	%		427,176		426,746		0.1	%
Corporate and Other		—		—	NM				—		—	NM
Subtotal		141,469		139,463		1.4	%		427,176		426,746		0.1	%
Culinary Arts (1)		2,367		21,369		-88.9	%		19,302		89,990		-78.6	%
Transitional Group (1)		1,150		6,793		-83.1	%		6,839		32,401		-78.9	%
Total	$	144,986	$	167,625		-13.5	%	$	453,317	$	549,137		-17.4	%

(1) Teach-out campuses included in the Transitional Group no longer enroll new students. The Culinary Arts campuses completed their teach-outs as of September 30, 2017.

CEC ANNOUNCES 3Q17 RESULTS …PG 3

TOTAL AND NEW STUDENT ENROLLMENTS

As of the end of the third quarter of 2017, total student enrollments for the University Group were 32,700, compared to 31,900 as of the prior year quarter end representing a 2.5 percent increase.

	As of September 30,
Total Student Enrollments	2017		2016		Increase (Decrease)
CTU		21,600		21,400		0.9	%
AIU		11,100		10,500		5.7	%
Total University Group		32,700		31,900		2.5	%
Culinary Arts (1)		—		3,500	NM
Transitional Group		200		1,100	NM
Total		32,900		36,500		-9.9	%

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
New Student Enrollments	2017		2016		Increase (Decrease)			2017		2016		Increase (Decrease)
CTU (2)		5,980		5,390		10.9	%		16,170		15,240		6.1	%
AIU (2)		3,100		3,190		-2.8	%		11,020		10,600		4.0	%
Total University Group (2)		9,080		8,580		5.8	%		27,190		25,840		5.2	%
Culinary Arts (1)		—		—	NM				—		990	NM
Transitional Group (3)		—		10	NM				—		90	NM
Total		9,080		8,590		5.7	%		27,190		26,920		1.0	%

(1) Culinary Arts campuses completed their teach-outs as of September 30, 2017.

(2) New student enrollments were impacted by a change to how the Company records certain cancelled students which began in the third quarter of 2016. There is no impact to the third quarter of 2017 as both the current year quarter and the prior year quarter are calculated on the same basis. However, excluding the impact of this change, new student enrollments for the year to date ended September 30, 2017 as compared to the prior year to date would have increased 4.0 percent for CTU, decreased 0.9 percent for AIU and increased 2.0 percent for the University Group.

(3) Teach-out campuses within the Transitional Group no longer enroll new students; students who re-enter after 365 days are reported as new student enrollments.

CEC ANNOUNCES 3Q17 RESULTS …PG 4

OPERATING INCOME (LOSS)

For the quarter and year to date ended September 30, 2017, the Company recorded operating income of $4.5 million and $23.4 million, respectively, compared to operating loss of $0.7 million and operating income of $23.6 million for the quarter and year to date ended September 30, 2016, respectively. Total University Group and Corporate operating income of $23.6 million and $70.0 million for the quarter and year to date ended September 30, 2017, respectively, increased 45.9 percent and 11.9 percent as compared to the respective prior year periods.

	For the Quarter Ended September 30,									For the Year to Date Ended September 30,
Operating Income ($ in thousands)	2017			2016			Increase (Decrease)			2017			2016			Increase (Decrease)
CTU	$	27,565		$	21,486			28.3	%	$	78,649		$	70,693			11.3	%
AIU		2,256			291			675.3	%		7,987			9,036			-11.6	%
Total University Group		29,821			21,777			36.9	%		86,636			79,729			8.7	%
Corporate and Other		(6,199	)		(5,587	)		-11.0	%		(16,595	)		(17,160	)		3.3	%
Subtotal		23,622			16,190			45.9	%		70,041			62,569			11.9	%
Culinary Arts		(14,027	)		(1,801	)	NM				(25,039	)		1,666		NM
Transitional Group		(5,056	)		(15,095	)		66.5	%		(21,578	)		(40,672	)		46.9	%
Total	$	4,539		$	(706	)		742.9	%	$	23,424		$	23,563			-0.6	%

CEC ANNOUNCES 3Q17 RESULTS …PG 5

ADJUSTED OPERATING INCOME (LOSS)

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

As shown in the table below, adjusted operating income for the University Group and Corporate was $26.2 million and $77.7 million for the quarter and year to date ended September 30, 2017, respectively. Adjusted operating loss for the Transitional Group and Culinary Arts was $10.8 million and $31.8 million for the quarter and year to date ended September 30, 2017, respectively.

	For the Quarter Ended September 30,						For the Year to Date Ended September 30,
Adjusted Operating Income (Loss)	2017			2016			2017			2016
University Group and Corporate:
Operating income (1)	$	23,622		$	16,190		$	70,041		$	62,569
Depreciation and amortization (1)		2,605			2,594			7,695			8,474
Asset impairments (1)		—			—			—			237
Unused space charges (1) (2)		—			—			—			1,118
Adjusted Operating Income -- University Group and Corporate (1)	$	26,227		$	18,784		$	77,736		$	72,398
Increase (Decrease)		39.6	%					7.4	%
Transitional Group and Culinary Arts:
Operating loss (3)	$	(19,083	)	$	(16,896	)	$	(46,617	)	$	(39,006	)
Depreciation and amortization (3)		977			2,621			3,673			8,512
Unused space charges (2) (3)		7,347			4,983			11,158			14,123
Adjusted Operating Loss -- Transitional and Culinary Arts (3)	$	(10,759	)	$	(9,292	)	$	(31,786	)	$	(16,371	)
Increase (Decrease)		-15.8	%					-94.2	%

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

(2) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income.

(3) Amounts relate to the Transitional Group and Culinary Arts.

CEC ANNOUNCES 3Q17 RESULTS …PG 6

BALANCE SHEET AND CASH FLOW

Net cash provided by operating activities was $5.1 million compared to net cash provided by operating activities of $9.7 million for the quarters ended September 30, 2017 and 2016, respectively. For the year to date ended September 30, 2017, net cash flows used in operations was $29.1 million as compared to net cash provided of $16.3 million for the year to date ended 2016.  

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
Selected Cash Flow Items	2017		2016		Increase (Decrease)			2017			2016		Increase (Decrease)
Net cash provided by (used in) operating activities	$	5,139	$	9,697		-47.0	%	$	(29,107	)	$	16,264		-279.0	%
Capital expenditures	$	1,280	$	1,382		-7.4	%	$	3,426		$	3,352		2.2	%

As of September 30, 2017 and December 31, 2016, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $175.9 million and $207.2 million, respectively.

OUTLOOK

The substantial completion of the teach-outs and continued execution against its strategy has provided the Company further visibility related to its 2017 operating results. As a result, the Company is providing an update to its previous outlook for adjusted operating losses related to its teach-out operations and for ending cash balances for 2017. The Company currently expects the following results, subject to the updated 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 adjusted operating income in the range of $100 to $105 million for the full year 2017, compared to $89 million in 2016.

• New and total student enrollment growth at both Universities in the fourth quarter of 2017, primarily driven by our ongoing initiatives and investments in student support operations, including our Phoenix admissions and advising centers as well as the academic calendar redesign at AIU.

• Adjusted operating loss for the Transitional Group and Culinary Arts segments in the range of $40 million to $45 million in 2017, compared to adjusted operating loss of $30 million in 2016, and in the range of $10 million to $15 million in 2018 as the Company winds down the remaining eight 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 of approximately $160 million to $165 million for the year ending December 31, 2017, and expected to increase in 2018.

Operating income (loss), which is the most directly comparable GAAP measure to adjusted operating income (loss), may not follow the same trends as discussed in the outlook above because of adjustments made for unused space charges that represent the present value of future remaining lease obligations for vacated space less an estimated amount for sublease income as well as depreciation, amortization, asset impairment charges and significant legal settlements. The operating income (loss) and adjusted operating income (loss) and cash outlook provided above for 2017 and 2018 are based on the following updated key assumptions and factors, among others: (i) prospective student interest in the Company’s programs continues to trend in line with recent experiences, (ii) modest total enrollment growth within the University Group, (iii) availability and retention of qualified personnel for ongoing investments in our student support operations, (iv) 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, (v) no material changes in the 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 “borrower defense to repayment” regulations and the gainful employment regulation and any modifications thereto, 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.

CEC ANNOUNCES 3Q17 RESULTS …PG 7

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Thursday, November 2, 2017 at 5:30 p.m. Eastern time to discuss its third quarter and year to date 2017 results. Interested parties can access the live webcast of the conference call and the related presentation materials at www.careered.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 844-378-6484 (domestic) or 412-542-4179 (international). Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.careered.com in the Investor Relations section of the website.

ABOUT CAREER EDUCATION CORPORATION

Career Education’s academic institutions offer a quality education to a diverse student population in a variety of disciplines through online, campus-based and blended learning programs. The Company’s two universities – American InterContinental University (“AIU”) and Colorado Technical University (“CTU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Both universities predominantly serve students online with career-focused degree programs that are designed to meet the educational demands of today’s busy adults. AIU and CTU continue to show innovation in higher education, advancing new personalized learning technologies like their intellipath™ 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,” “on track,” “outlook,” “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 or interest in our programs; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the gainful employment, 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education), as well as applicable accreditation standards and state regulatory requirements; the impact of recently issued “defense to repayment” regulations and any modifications thereto; rulemaking by the U.S. Department of Education or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; our ability to successfully defend litigation and other claims brought against us; the success of our initiatives to improve student experiences, retention and outcomes; the ability of our new student admissions and advising centers in Phoenix, Arizona, to achieve anticipated operating performance; negative trends in the real estate market which could impact the costs related to teaching out campuses and the success of our initiatives to reduce our real estate obligations; our ability to achieve anticipated cost savings and business efficiencies; increased competition; the impact of management changes; and changes in the overall U.S. economy. Further information about these and other relevant risks and uncertainties may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and its subsequent filings with the Securities and Exchange Commission.

###

CEC ANNOUNCES 3Q17 RESULTS …PG 8

CONTACT

Investors:

Alpha IR Group

Chris Hodges or Sam Gibbons

(312) 445-2870

CECO@alpha-ir.com

Or

Media:

Career Education Corporation

(847) 585-2600

media@careered.com

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30,			December 31,
	2017			2016
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	16,276		$	49,507
Restricted cash		789			1,375
Restricted short-term investments		7,070			8,597
Short-term investments		151,803			147,681
Total cash and cash equivalents, restricted cash and short-term investments		175,938			207,160
Student receivables, net		21,134			22,825
Receivables, other, net		996			929
Prepaid expenses		8,769			14,446
Inventories		991			1,868
Other current assets		1,112			817
Assets of discontinued operations		171			148
Total current assets		209,111			248,193
NON-CURRENT ASSETS:
Property and equipment, net		33,278			40,512
Goodwill		87,356			87,356
Intangible assets, net		7,900			8,500
Student receivables, net		2,622			3,055
Deferred income tax assets, net		147,990			158,272
Other assets		7,018			7,608
Assets of discontinued operations		5,922			6,105
TOTAL ASSETS	$	501,197		$	559,601
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,780		$	10,099
Accrued expenses:
Payroll and related benefits		31,646			41,203
Advertising and production costs		10,732			10,253
Income taxes		1,898			1,830
Other		35,127			69,244
Deferred tuition revenue		22,401			28,364
Liabilities of discontinued operations		6,434			8,219
Total current liabilities		120,018			169,212
NON-CURRENT  LIABILITIES:
Deferred rent obligations		16,253			30,713
Other liabilities		23,384			31,751
Liabilities of discontinued operations		2,156			6,422
Total non-current liabilities		41,793			68,886
STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		843			835
Additional paid-in capital		619,483			613,325
Accumulated other comprehensive income (loss)		144			(258	)
Accumulated deficit		(63,745	)		(76,230	)
Cost of shares in treasury		(217,339	)		(216,169	)
Total stockholders' equity		339,386			321,503
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	501,197		$	559,601

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts and percentages)

	For the Quarter Ended September 30,
	2017			% of Total Revenue			2016			% of Total Revenue
REVENUE:
Tuition and fees	$	144,408			99.6	%	$	166,819			99.5	%
Other		578			0.4	%		806			0.5	%
Total revenue		144,986						167,625
OPERATING EXPENSES:
Educational services and facilities		37,788			26.1	%		51,393			30.7	%
General and administrative		99,077			68.3	%		111,723			66.7	%
Depreciation and amortization		3,582			2.5	%		5,215			3.1	%
Total operating expenses		140,447			96.9	%		168,331			100.4	%
Operating income (loss)		4,539			3.1	%		(706	)		-0.4	%
OTHER INCOME (EXPENSE):
Interest income		474			0.3	%		334			0.2	%
Interest expense		(114	)		-0.1	%		(117	)		-0.1	%
Miscellaneous income		196			0.1	%		10			0.0	%
Total other income		556			0.4	%		227			0.1	%
PRETAX INCOME (LOSS)		5,095			3.5	%		(479	)		-0.3	%
Provision for income taxes		1,597			1.1	%		21			0.0	%
INCOME (LOSS) FROM CONTINUING OPERATIONS		3,498			2.4	%		(500	)		-0.3	%
Loss from discontinued operations, net of tax		(476	)		-0.3	%		(186	)		-0.1	%
NET INCOME (LOSS)		3,022			2.1	%		(686	)		-0.4	%
OTHER COMPREHENSIVE INCOME, net of tax:
Foreign currency translation adjustments		105						47
Unrealized gain on investments		—						370
Total other comprehensive income		105						417
COMPREHENSIVE INCOME (LOSS)	$	3,127					$	(269	)
NET INCOME (LOSS) PER SHARE - BASIC and DILUTED:
Income (loss) from continuing operations	$	0.05					$	(0.01	)
Loss from discontinued operations		(0.01	)					—
Net income (loss) per share	$	0.04					$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		69,082						68,460
Diluted		70,865						68,460

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(In thousands, except per share amounts and percentages)

	For the Year to Date Ended September 30,
	2017			%of Total Revenue			2016			% of Total Revenue
REVENUE:
Tuition and fees	$	451,292			99.6	%	$	546,036			99.4	%
Other		2,025			0.4	%		3,101			0.6	%
Total revenue		453,317						549,137
OPERATING EXPENSES:
Educational services and facilities		114,367			25.2	%		170,993			31.1	%
General and administrative		304,158			67.1	%		337,358			61.4	%
Depreciation and amortization		11,368			2.5	%		16,986			3.1	%
Asset impairment		—			0.0	%		237			0.0	%
Total operating expenses		429,893			94.8	%		525,574			95.7	%
Operating income		23,424			5.2	%		23,563			4.3	%
OTHER INCOME:
Interest income		1,328			0.3	%		900			0.2	%
Interest expense		(340	)		-0.1	%		(469	)		-0.1	%
Miscellaneous income (expense)		489			0.1	%		(4	)		0.0	%
Total other income		1,477			0.3	%		427			0.1	%
PRETAX INCOME		24,901			5.5	%		23,990			4.4	%
Provision for income taxes		11,143			2.5	%		8,776			1.6	%
INCOME FROM CONTINUING OPERATIONS		13,758			3.0	%		15,214			2.8	%
Loss from discontinued operations, net of tax		(1,273	)		-0.3	%		(1,050	)		-0.2	%
NET INCOME		12,485			2.8	%		14,164			2.6	%
OTHER COMPREHENSIVE INCOME, net of tax:
Foreign currency translation adjustments		368						143
Unrealized gain on investments		34						824
Total other comprehensive income		402						967
COMPREHENSIVE INCOME	$	12,887					$	15,131
NET INCOME PER SHARE - BASIC and DILUTED:
Income from continuing operations	$	0.20					$	0.22
Loss from discontinued operations		(0.02	)					(0.01	)
Net income per share	$	0.18					$	0.21
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		68,897						68,328
Diluted		70,660						68,889

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Year to Date Ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,485		$	14,164
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Asset impairment		—			237
Depreciation and amortization expense		11,368			16,986
Bad debt expense		21,516			23,201
Compensation expense related to share-based awards		3,616			2,251
Deferred income taxes		10,282			7,373
Gain on disposition of property and equipment		—			(438	)
Changes in operating assets and liabilities:		(88,374	)		(47,510	)
Net cash (used in) provided by operating activities		(29,107	)		16,264
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(202,050	)		(137,755	)
Sales of available-for-sale investments		199,340			99,718
Purchases of property and equipment		(3,426	)		(3,352	)
Proceeds on the sale of assets		—			3,600
Payments of cash upon sale of businesses		—			(62	)
Net cash used in investing activities		(6,136	)		(37,851	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		2,548			581
Payment on borrowings		—			(38,000	)
Payments of employee tax associated with stock compensation		(1,170	)		(550	)
Net cash provided by (used in) financing activities		1,378			(37,969	)
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH    AND CASH EQUIVALENTS:		48			(150	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(33,817	)		(59,706	)
CASH AND CASH EQUIVALENTS, beginning of the period		50,882			116,740
CASH AND CASH EQUIVALENTS, end of the period	$	17,065		$	57,034

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Quarter Ended September 30,
	2017			2016
REVENUE:
CTU	$	91,319		$	90,921
AIU		50,150			48,542
Total University Group		141,469			139,463
Corporate and Other		—			—
Subtotal		141,469			139,463
Culinary Arts		2,367			21,369
Transitional Group		1,150			6,793
Total	$	144,986		$	167,625
OPERATING INCOME (LOSS):
CTU	$	27,565		$	21,486
AIU		2,256			291
Total University Group		29,821			21,777
Corporate and Other		(6,199	)		(5,587	)
Subtotal		23,622			16,190
Culinary Arts		(14,027	)		(1,801	)
Transitional Group		(5,056	)		(15,095	)
Total	$	4,539		$	(706	)
OPERATING MARGIN (LOSS):
CTU		30.2	%		23.6	%
AIU		4.5	%		0.6	%
Total University Group		21.1	%		15.6	%
Corporate and Other	NM			NM
Subtotal		16.7	%		11.6	%
Culinary Arts	NM				-8.4	%
Transitional Group	NM			NM
Total		3.1	%		-0.4	%

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Year to Date Ended September 30,
	2017			2016
REVENUE:
CTU	$	276,558		$	274,623
AIU		150,618			152,123
Total University Group		427,176			426,746
Corporate and Other		—			—
Subtotal		427,176			426,746
Culinary Arts		19,302			89,990
Transitional Group		6,839			32,401
Total	$	453,317		$	549,137
OPERATING INCOME (LOSS):
CTU	$	78,649		$	70,693
AIU		7,987			9,036
Total University Group		86,636			79,729
Corporate and Other		(16,595	)		(17,160	)
Subtotal		70,041			62,569
Culinary Arts		(25,039	)		1,666
Transitional Group		(21,578	)		(40,672	)
Total	$	23,424		$	23,563
OPERATING MARGIN (LOSS):
CTU		28.4	%		25.7	%
AIU		5.3	%		5.9	%
Total University Group		20.3	%		18.7	%
Corporate and Other	NM			NM
Subtotal		16.4	%		14.7	%
Culinary Arts	NM				1.9	%
Transitional Group	NM			NM
Total		5.2	%		4.3	%

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

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

(In thousands, unless otherwise noted)

	For the Quarter Ended September 30,						For the Year to Date Ended September 30,
	ACTUAL						ACTUAL
Adjusted Operating Income (Loss)	2017			2016			2017			2016
University Group and Corporate:
Operating income (2) (3)	$	23,622		$	16,190		$	70,041		$	62,569
Depreciation and amortization (3)		2,605			2,594			7,695			8,474
Asset impairments (3)		—			—			—			237
Unused space charges (3) (4)		—			—			—			1,118
Adjusted Operating Income -- University Group and Corporate (5)	$	26,227		$	18,784		$	77,736		$	72,398
Transitional Group and Culinary Arts:
Operating loss (2) (6)	$	(19,083	)	$	(16,896	)	$	(46,617	)	$	(39,006	)
Depreciation and amortization (6)		977			2,621			3,673			8,512
Unused space charges (4) (6)		7,347			4,983			11,158			14,123
Adjusted Operating Loss -- Transitional and Culinary Arts (5)	$	(10,759	)	$	(9,292	)	$	(31,786	)	$	(16,371	)

	For the Second Half July-December 31,				For the Year Ended December 31,
	ACTUAL			OUTLOOK	ACTUAL			OUTLOOK
Adjusted Operating Income (Loss)	2016			2017	2016			2017	2018
University Group and Corporate:
Operating income (2) (3)	$	(1,662	)	$43 - $48M	$	44,717		$90 - $95M	Growth vs 2017
Depreciation and amortization (3)		5,284		~5M		11,164		~10M	2017 levels
Asset impairments (3)		—		None Assumed		237		None Assumed
Unused space charges (3) (4)		16		None Assumed		1,134		None Assumed
Significant legal settlements (3)		32,000		None Assumed		32,000		None Assumed
Adjusted Operating Income -- University Group and Corporate (5)	$	35,638		$48 - $53M	$	89,252		$100 - $105M	Growth vs 2017
Transitional Group and Culinary Arts:
Operating loss (2) (6)	$	(54,951	)	($31 - $36M)	$	(77,061	)	($59 - $64M)	($15 - $20M)
Depreciation and amortization (6)		5,692		~1M		11,583		~4M	-
Asset impairments (6)		927		None Assumed		927		None Assumed
Unused space charges (4) (6)		25,579		~11M		34,719		~15M	~5M
Adjusted Operating Loss -- Transitional and Culinary Arts (5)	$	(22,753	)	($19 - $24M)	$	(29,832	)	($40 - $45M)	($10 - $15M)

(1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial

measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance.

The Company believes adjusted operating income (loss) allows it to analyze and assess its ongoing operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as unused space charges and significant legal reserves. In evaluating adjusted operating income (loss), investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income (loss) should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income (loss) has limitations as an analytical tool, and it should not be considered in isolation, or as a substitute for net income (loss), operating income (loss), or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of 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 the University Group and Corporate and operating loss for the Transitional Group and Culinary Arts make up the components of operating income (loss). A reconciliation of these components for the quarters and years to date ended September 30, 2017 and 2016 is presented below:

	For the Quarter Ended September 30,						For the Year to Date Ended September 30,
	ACTUAL						ACTUAL
	2017			2016			2017			2016
Operating income for University Group and Corporate	$	23,622		$	16,190		$	70,041		$	62,569
Operating loss for Culinary Arts and Transitional		(19,083	)		(16,896	)		(46,617	)		(39,006	)
Operating income (loss)	$	4,539		$	(706	)	$	23,424		$	23,563

(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 campuses have been announced for teach-out or have been taught out, management views these operations as not reflective of the ongoing business. As a result, management views adjusted operating income from the University Group and Corporate separately from the remainder of the organization, to assess results and make decisions.

(6) Amounts relate to the Transitional Group and Culinary Arts.

EX-99.2

CAREER EDUCATION CORPORATION THIRD quarter 2017 investor conference call November 2, 2017 Ashish Ghia Vice President & Interim Chief Financial Officer 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 updated assumptions made by (see, for example, slide 5), 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 and non-cash items as a means to understand the performance of its operations.  As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its 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

Outlook Update Estimated outlook is based on assumptions listed on slide 5 See slides 6-8 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 Ending cash balance is stated net of short-term borrowings University Group and Corporate Culinary Arts and Transitional Group Ending Cash ACTUALS CEC OUTLOOK (1) 2015 2016 2017 2018 Adjusted Operating Income(2) $82,900,000 $89,300,000 $100 - $105M Growth vs 2017 Adjustments: Depreciation and amortization 15.1 11.2 ~10 2017 Levels Asset impairment 0.5 0.3 None Assumed Unused space charges(3) 1.6 1.1000000000000001 None Assumed Significant legal settlements 0 32 None Assumed Operating Income $65,700,000 $44,700,000 $90 - $95M Growth vs 2017 Adjusted Operating Loss(2) ($70.1M) ($29.8M) ($40 - $45M) ($10 - $15M) Adjustments: Depreciation and amortization 9.9 11.6 ~4 0 Asset impairment 60 1 None Assumed Unused space charges(3) 17.899999999999999 34.700000000000003 ~15 ~5 Operating Loss ($157.9M) ($77.1M) ($59 - $64M) ($15 - $20M) Year-end cash, cash equivalents, restricted cash, and available-for-sale short-term and long-term investments $201M (4) $207M $160M- $165M Increase vs 2017

2017 Outlook – University Group & Corporate Estimated 2017 amounts are based on assumptions listed on slide 5 See slides 6-8 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 University Group and Corporate 3rd Quarter 2nd Half Full Year 2016 2017 2016 2017 Outlook 2016 2017 Outlook Adjusted Operating Income(1)(2) $18,784,738.659000002 $26.2M $35.7M $48 -$53M $89,300,000 $100 - $105M Adjustments: Depreciation and amortization 2.6 2.6 5.3 ~5 11.2 ~10 Asset impairment 0 0 0.1 None Assumed 0.3 None Assumed Unused space charges (3) 0 0 0 None Assumed 1.1000000000000001 None Assumed Significant legal settlements 0 0 32 None Assumed 32 None Assumed Operating Income(1) $16,190,390.299000001 $23.6M ($1.7M) $43 - $48M $44,700,000 $90 - $95M

Updated Outlook Assumptions Achievement of the outlook included within these slides is based on the following updated key assumptions and factors, among others: Prospective student interest in our programs continues to trend in line with recent experiences Modest total enrollment growth within the University Group Availability and retention of qualified personnel for ongoing investments in our student support operations Achievement of recovery rates for our real estate obligations and timing of any associated lease termination payments consistent with our historical experiences 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 and any modifications thereto 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 we may undertake in the future, actual results could differ materially from estimates.

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) CAREER EDUCATION CORPORATION AND SUBSIDIARIES **should match the exhibits table UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) (In thousands) For the Quarter Ended September 30, For the Year to Date Ended September 30, ACTUAL ACTUAL Adjusted Operating Income (Loss) 2017 2016 2017 2016 University Group and Corporate: Operating income (2) (3) $23,622 $16,190.390300000001 $70,041 $62,568.883249999999 Depreciation and amortization (3) 2,605 2,594.34836 7,695 8,474.1754299999993 Asset impairments (3) 0 0 0 237.02598 Unused space charges (3) (4) 0 0 0 1,117.81078 Adjusted Operating Income --University Group and Corporate (5) $26,227 $18,783.738660000003 $77,736 $72,397.895440000008 Transitional Group and Culinary Arts: Operating loss (2) (6) $,-19,083 $,-16,896.110479999999 $,-46,617 $,-39,006.234389999998 Depreciation and amortization (6) 977 2,621.3128500000003 3,673 8,511.7276199999997 Unused space charges (4) (6) 7,347 4,983.4372999999996 11,158 14,123.17117 Adjusted Operating Loss --Transitional and Culinary Arts (5) $,-10,759 $-9,292.3603299999995 $,-31,786 $,-16,371.3356

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, unless otherwise noted) For the Second Half July-December 31, For the Year Ended December 31, ACTUAL OUTLOOK ACTUAL ACTUAL OUTLOOK Adjusted Operating Income (Loss) 2016 2017 2015 2016 2017 2018 University Group and Corporate: Operating income (2) (3) $-1,662 $43 - $48M $65,749 $44,717 $90 - $95M Growth vs 2017 Depreciation and amortization (3) 5,284 ~5M 15,089 11,164 ~10M 2017 levels Asset impairments (3) 0 None Assumed 507 237 None Assumed Unused space charges (3) (4) 16 None Assumed 1,556 1,134 None Assumed Significant legal settlements (3) 32,000 None Assumed 0 32,000 None Assumed Adjusted Operating Income --University Group and Corporate (5) $35,638 $48 - $53M $82,901 $89,252 $100 - $105M Growth vs 2017 Transitional Group and Culinary Arts: Operating loss (2) (6) $,-54,951 ($31 - $36M) $-,157,917 $,-77,061 ($59 - $64M) ($15 - $20M) Depreciation and amortization (6) 5,692 ~1M 9,849 11,583 ~4M - Asset impairments (6) 927 None Assumed 60,008 927 None Assumed Unused space charges (4) (6) 25,579 ~11M 17,940 34,719 ~15M ~5M Adjusted Operating Loss --Transitional and Culinary Arts (5) $,-22,753 ($19 - $24M) $,-70,120 $,-29,832 ($40 - $45M) ($10 - $15M)

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) cont’d (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of its operations. As a general matter, the Company uses non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of its operations, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, the Company believes that non-GAAP financial information is used by analysts and others in the investment community to analyze the Company’s historical results and to provide estimates of future performance. The Company believes adjusted operating income (loss) allows it to analyze and assess its ongoing operations and compare current operating results with the operational performance of other companies in its industry because it does not give effect to potential differences caused by items it does not consider reflective of underlying operating performance, such as unused space charges and significant legal reserves. In evaluating adjusted operating income (loss), investors should be aware that in the future the Company may incur expenses similar to the adjustments presented above. The presentation of adjusted operating income (loss) should not be construed as an inference that the Company's future results will be unaffected by expenses that are unusual, non-routine or non-recurring. Adjusted operating income (loss) has limitations as an analytical tool, and it should not be considered in isolation, or as a substitute for net income (loss), operating income (loss), or any other performance measure derived in accordance and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of 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 income (loss). A reconciliation of these components for the quarters and years to date ended September 30, 2017 and 2016 is presented below: For the Quarter Ended September 30, For the Year to Date Ended September 30, ACTUAL ACTUAL 2017 2016 2017 2016 Operating income for University Group and Corporate $23,622 $16,190.390300000001 $70,041 $62,568.883249999999 Operating loss for Culinary Arts and Transitional ,-19,083 ,-16,896.110479999999 ,-46,617 ,-39,006.234389999998 Operating income (loss) $4,539 $-,705.72017999999844 $23,424 $23,562.648860000001 (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 campuses have been announced for teach-out or have been taught out, management views these operations as not reflective of the ongoing business. As a result, management views adjusted operating income from the University Group and Corporate separately from the remainder of the organization, to assess results and make decisions. (6) Amounts relate to the Transitional Group and Culinary Arts.