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 1, 2018

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 1, 2018, 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, 2018. 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, 2018 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 1, 2018 reporting the Company’s financial results for the quarter and year to date ended September 30, 2018
99.2	Presentation materials used by the Company in connection with its November 1, 2018 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
	Senior Vice President and Chief Financial Officer

Date: November 1, 2018

4

EX-99.1

CEC ANNOUNCES 3Q18 RESULTS …PG 1

Exhibit 99.1

CAREER EDUCATION CORPORATION REPORTS RESULTS FOR THIRD QUARTER AND YEAR TO DATE 2018

University Group total enrollments grew 5.8% primarily driven by new enrollment growth of 39.0% for the quarter

Schaumburg, Ill. (November 1, 2018) – Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the third quarter and year to date ended September 30, 2018.

THIRD QUARTER 2018 RESULTS

Total Company	•	Operating income of $19.3 million as compared to $4.5 million in the prior year quarter
	•	Net income of $14.9 million or $0.21 per diluted share
	•	Adjusted diluted earnings per share of $0.25
		(see GAAP to non-GAAP reconciliation attached to this press release for further details)
	•	Ended the quarter with $193.0 million in cash, cash equivalents, restricted cash and available-for-sale short-term investments
University Group and Corporate	•	Revenue of $145.6 million as compared to $141.5 million in the prior year quarter
	•	Operating income of $23.0 million as compared to $23.6 million in the prior year quarter
	•	Excluding severance charges of $1.9 million recorded in the current quarter, operating income increased compared to the prior year quarter
University Group Key Metrics	•	CTU’s new student enrollments increased 9.0 percent versus the prior year quarter
	•	AIU’s new student enrollments increased 96.8 percent primarily driven by the academic calendar redesign as well as solid execution at our admissions and advising centers
	•	On an aggregate basis, total student enrollments increased 5.8 percent versus the prior year quarter end
Teach-Outs	•	Operating loss of $3.7 million as compared to $19.1 million in the prior year quarter, with the improvement primarily driven by the substantial completion of teach-outs
	•	Two campuses with approximately ten students remain as of September 30, 2018, and these campus teach-outs are expected to be complete by the end of 2018

YEAR TO DATE 2018 HIGHLIGHTS

• Total company operating income of  $51.1 million as compared to $23.4 million in the prior year to date, with the improvement primarily driven by the substantial completion of teach-outs

• University Group revenue increased 1.9 percent or $8.0 million as compared to the prior year to date, driven by total enrollment growth at both AIU and CTU

• University Group new student enrollments increased 6.6 percent as compared to the prior year to date

“University Group student enrollments continue to experience growth that we believe is primarily driven by organic investments aimed at improving student onboarding and learning experiences and improved execution within our operating processes,” said Todd Nelson, President and Chief Executive Officer. “Momentum within the student inquiry and application process remains encouraging and our ongoing investments in technology and student-serving operations are working well to serve the demand we are experiencing.”

CEC ANNOUNCES 3Q18 RESULTS …PG 2

REVENUE

For the quarter and year to date ended September 30, 2018, total revenue was $145.7 million and $435.8 million representing an increase of 0.5 percent and a decrease of 3.9 percent, respectively, compared to total revenue of $145.0 million and $453.3 million for the prior year quarter and year to date ended September 30, 2017, respectively. The decrease for the current year to date was driven by declining revenues within our teach-out campuses. As of September 30, 2018, there are two campuses remaining which are expected to complete their teach-outs during the fourth quarter of 2018.

Total revenue for the University Group was $145.6 million and $435.2 million representing an increase of 2.9 percent and 1.9 percent, respectively, for the quarter and year to date ended September 30, 2018 as compared to the prior year periods.

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
Revenue ($ in thousands)	2018		2017		Increase (Decrease)			2018		2017		Increase (Decrease)
CTU	$	93,115	$	91,319		2.0	%	$	280,988	$	276,558		1.6	%
AIU		52,504		50,150		4.7	%		154,204		150,618		2.4	%
Total University Group		145,619		141,469		2.9	%		435,192		427,176		1.9	%
Corporate and Other		—		—	NM				—		—	NM
Subtotal		145,619		141,469		2.9	%		435,192		427,176		1.9	%
All Other Campuses (1)		71		3,517	NM				599		26,141	NM
Total	$	145,690	$	144,986		0.5	%	$	435,791	$	453,317		-3.9	%

(1) Campuses included in All Other Campuses are in the process of being taught out or have completed their teach-out as of September 30, 2018. Previously, these campuses were reported within two segments, the former Transitional Group and Culinary Arts segments.

CEC ANNOUNCES 3Q18 RESULTS …PG 3

TOTAL AND NEW STUDENT ENROLLMENTS

Total student enrollments grew 5.8 percent for the University Group, on an aggregate basis, as of September 30, 2018 as compared to the prior year driven by new student enrollment growth. For the third quarter and year to date 2018, new student enrollments for the University Group increased 39.0 percent and 6.6 percent, respectively, as compared to the prior year periods.

CTU’s new student enrollments increased 9.0 percent and 6.6 percent for the current quarter and year to date, respectively, as compared to the prior year periods. AIU’s new student enrollments increased 96.8 percent and 6.6 percent for the current quarter and year to date, respectively, as compared to the prior year periods. The increase in AIU’s new student enrollments for the current quarter was primarily driven by the timing impacts of the academic calendar redesign.  Both AIU and CTU’s student enrollment increases were positively impacted by improved execution within our operating processes and investments at our admissions and advising centers in Arizona and Illinois.

	As of September 30,
Total Student Enrollments	2018		2017		Increase (Decrease)
CTU		22,200		21,600		2.8	%
AIU		12,400		11,100		11.7	%
Total University Group		34,600		32,700		5.8	%
All Other Campuses (1)		10		200	NM
Total		34,610		32,900		5.2	%

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
New Student Enrollments	2018		2017		Increase (Decrease)			2018		2017		Increase (Decrease)
CTU		6,520		5,980		9.0	%		17,240		16,170		6.6	%
AIU		6,100		3,100		96.8	%		11,750		11,020		6.6	%
Total University Group		12,620		9,080		39.0	%		28,990		27,190		6.6	%

(1) All Other Campuses no longer enroll new students.

CEC ANNOUNCES 3Q18 RESULTS …PG 4

OPERATING INCOME (LOSS)

For the quarter and year to date ended September 30, 2018, the Company recorded operating income of $19.3 million and $51.1 million, respectively, compared to operating income of $4.5 million and $23.4 million for the quarter and year to date ended September 30, 2017, respectively. The improvement in operating income performance is primarily driven by substantial completion of the campus teach-outs.

	For the Quarter Ended September 30,									For the Year to Date Ended September 30,
Operating Income ($ in thousands)	2018			2017			Increase (Decrease)			2018			2017			Increase (Decrease)
CTU	$	26,261		$	27,565			-4.7	%	$	80,562		$	78,649			2.4	%
AIU		1,070			2,256			-52.6	%		3,621			7,987			-54.7	%
Total University Group		27,331			29,821			-8.3	%		84,183			86,636			-2.8	%
Corporate and Other		(4,362	)		(6,199	)		29.6	%		(10,904	)		(16,595	)		34.3	%
Subtotal		22,969			23,622			-2.8	%		73,279			70,041			4.6	%
All Other Campuses		(3,686	)		(19,083	)	NM				(22,164	)		(46,617	)	NM
Total	$	19,283		$	4,539			324.8	%	$	51,115		$	23,424			118.2	%

CEC ANNOUNCES 3Q18 RESULTS …PG 5

ADJUSTED OPERATING INCOME

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 total company was $25.8 million and $75.4 million for the quarter and year to date ended September 30, 2018, respectively, as compared to $15.5 million and $46.0 million in the respective prior year periods.

	For the Quarter Ended September 30,					For the Year to Date Ended September 30,
Adjusted Operating Income	2018			2017		2018			2017
Total Company:
Operating income	$	19,283		$	4,539	$	51,115		$	23,424
Depreciation and amortization		2,364			3,582		7,049			11,368
Unused space charges (1)		2,114			7,347		5,774			11,158
Severance and related costs (2)		1,898			-		1,898			-
Significant legal settlements		134			-		9,595			-
Adjusted Operating Income -- Total Company	$	25,793		$	15,468	$	75,431		$	45,950
Increase (Decrease)		66.8	%				64.2	%

(1) Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income. As early lease terminations or subleases occur, or as assumptions are otherwise adjusted, these unused space charges are increased or decreased. These adjustments are also included in the amounts presented.

(2) Severance and related costs include charges related to significant restructuring actions. These restructuring actions are non-recurring charges and are not considered part of ongoing operating results.

CEC ANNOUNCES 3Q18 RESULTS …PG 6

NET INCOME AND EARNINGS PER SHARE

For the quarter and year to date ended September 30, 2018, the Company recorded net income of $14.9 million and $41.1 million, respectively, compared to net income of $3.0 million and $12.5 million for the quarter and year to date ended September 30, 2017, respectively.

The Company recorded diluted earnings per share (“EPS”) of $0.21 and $0.58 for the quarter and year to date ended September 30, 2018, respectively, as compared to $0.04 and $0.18 for the prior year quarter and year to date, respectively. Adjusted diluted earnings per share was $0.25 and $0.76 for the quarter and year to date ended September 30, 2018, respectively, as compared to $0.10 and $0.28 for the prior year quarter and year to date, respectively.

	For the Quarter Ended September 30,				For the Year to Date Ended September 30,
Adjusted Earnings Per Share	2018		2017		2018		2017
Earnings Per Share- Diluted	$	0.21	$	0.04	$	0.58	$	0.18
NON-GAAP DILUTED EPS ADJUSTMENTS
Unused space charges (1)		0.02		0.06		0.06		0.10
Severance and related costs (1)		0.02		-		0.02		-
Significant legal settlements (1)		0.00		-		0.10		-
Total Adjustments (1)	$	0.04	$	0.06	$	0.18	$	0.10
Adjusted Diluted Earnings Per Share (NON-GAAP)	$	0.25	$	0.10	$	0.76	$	0.28

(1) Adjustments include a tax effect of 25% and 39% for each of the periods ending in 2018 and 2017, respectively, based on a normalized federal and state income tax rate.

BALANCE SHEET AND CASH FLOW

Net cash provided by operating activities was $3.5 million and $5.1 million for the quarters ended September 30, 2018 and 2017, respectively. For the year to date ended September 30, 2018, net cash flows provided by operating activities was $18.3 million as compared to net cash used of $29.1 million for the year to date ended September 30, 2017.  The current quarter and year to date cash flow includes significant legal settlement payments of $13.1 million and $17.1 million, respectively, as compared to $32.0 million in the prior year to date.

	For the Quarter Ended September 30,							For the Year to Date Ended September 30,
Selected Cash Flow Items	2018		2017		Increase (Decrease)			2018		2017			Increase (Decrease)
Net cash provided by (used in) operating activities	$	3,541	$	5,139		-31.1	%	$	18,295	$	(29,107	)		162.9	%
Capital expenditures	$	1,215	$	1,280		-5.1	%	$	3,952	$	3,426			15.4	%

As of September 30, 2018 and December 31, 2017, cash, cash equivalents, restricted cash and available-for-sale short-term investments totaled $193.0 million and $180.1 million, respectively.

CEC ANNOUNCES 3Q18 RESULTS …PG 7

OUTLOOK                                                                                                   

The Company currently 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):

Financial Outlook:

• Full year 2018 - total company:

o Operating income in the range of $71.0 million to $76.0 million

o Adjusted operating income in the range of $101.0 million to $106.0 million

• Fourth quarter 2018 - total company:

o Operating income in the range of $19.9 million to $24.9 million

o Adjusted operating income in the range of $25.6 million to $30.6 million

• Year end 2018 cash, cash equivalents, restricted cash and short-term investments (“cash balances”) to be in the range of $215 million to $220 million.

• Operating income and adjusted operating income and ending cash balances for the total company to grow in 2019 as compared to 2018.

University Group Outlook:

• CTU:

o New student enrollments for the fourth quarter of 2018 are expected to grow as compared to the prior year quarter. 

• AIU:

o Primarily driven by the academic calendar redesign, new student enrollments at AIU are expected to significantly decline in the fourth quarter of 2018 followed by significant growth in the first quarter of 2019, which will more than offset the decline in the fourth quarter of 2018.

o Fourth quarter and full year revenue growth for 2018.

Operating income, which is the most directly comparable GAAP measure to adjusted operating income, may not follow the same trends stated 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 and subsequent adjustments as well as depreciation, amortization, asset impairment charges, severance and related costs as a result of significant restructuring actions and significant legal settlements. The operating income and adjusted operating income, enrollment, revenue and cash outlook provided above for 2018 and 2019 are based on the following key assumptions and factors, among others: (i) prospective student interest in the Company’s programs continues to trend in line with recent experiences, (ii) initiatives and investments in student-serving operations continue to positively impact enrollment trends within the University Group, (iii) achievement of anticipated recovery rates for our real estate obligations in line with our current expectations, (iv) no material changes in the current legal or regulatory environment, and excludes legal and regulatory liabilities and other related impacts which are not probable and estimable at this time, and any impact of new or proposed regulations, including the “borrower defense to repayment” and gainful employment regulations and any modifications thereto, and (v) no material changes in the estimated amount of compensation expense that could be impacted by changes in the Company’s stock price.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 3Q18 RESULTS …PG 8

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Thursday, November 1, 2018 at 5:30 p.m. Eastern time to discuss its third quarter and year to date 2018 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^® 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 University Group campus locations and web links to these 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,” “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 “borrower 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 academic outcomes; the ability of our student admissions and advising centers to achieve anticipated operating performance; 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, 2017 and its subsequent filings with the Securities and Exchange Commission.

###

CEC ANNOUNCES 3Q18 RESULTS …PG 9

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,
	2018			2017
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	32,029		$	18,110
Restricted cash		337			789
Restricted short-term investments		4,320			5,070
Short-term investments		156,336			156,178
Total cash and cash equivalents, restricted cash and short-term investments		193,022			180,147
Student receivables, net		34,043			18,875
Receivables, other, net		2,445			1,163
Prepaid expenses		8,515			7,722
Inventories		894			1,112
Other current assets		1,122			1,319
Assets of discontinued operations		66			382
Total current assets		240,107			210,720
NON-CURRENT ASSETS:
Property and equipment, net		29,977			33,230
Goodwill		87,356			87,356
Intangible assets, net		7,900			7,900
Student receivables, net		2,230			2,548
Deferred income tax assets, net		86,910			98,084
Other assets		5,277			5,673
Assets of discontinued operations		1,596			1,585
TOTAL ASSETS	$	461,353		$	447,096
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	12,646		$	8,515
Accrued expenses:
Payroll and related benefits		23,953			32,910
Advertising and production costs		11,733			9,245
Income taxes		2,062			2,185
Other		16,222			31,233
Deferred revenue		22,988			22,897
Liabilities of discontinued operations		2,013			5,701
Total current liabilities		91,617			112,686
NON-CURRENT  LIABILITIES:
Deferred rent obligations		14,205			15,277
Other liabilities		15,884			22,143
Liabilities of discontinued operations		-			785
Total non-current liabilities		30,089			38,205
STOCKHOLDERS' EQUITY:
Preferred stock		-			-
Common stock		852			843
Additional paid-in capital		626,751			621,008
Accumulated other comprehensive loss		(271	)		(164	)
Accumulated deficit		(67,017	)		(108,127	)
Treasury stock		(220,668	)		(217,355	)
Total stockholders' equity		339,647			296,205
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	461,353		$	447,096

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(In thousands, except per share amounts and percentages)

	For the Quarter Ended September 30,
	2018			% of Total Revenue			2017			% of Total Revenue
REVENUE:
Tuition and fees	$	144,882			99.4	%	$	144,408			99.6	%
Other		808			0.6	%		578			0.4	%
Total revenue		145,690						144,986
OPERATING EXPENSES:
Educational services and facilities		27,201			18.7	%		37,788			26.1	%
General and administrative		96,842			66.5	%		99,077			68.3	%
Depreciation and amortization		2,364			1.6	%		3,582			2.5	%
Total operating expenses		126,407			86.8	%		140,447			96.9	%
Operating income		19,283			13.2	%		4,539			3.1	%
OTHER INCOME:
Interest income		950			0.7	%		474			0.3	%
Interest expense		(108	)		-0.1	%		(114	)		-0.1	%
Miscellaneous income		32			0.0	%		196			0.1	%
Total other income		874			0.6	%		556			0.4	%
PRETAX INCOME		20,157			13.8	%		5,095			3.5	%
Provision for income taxes		5,089			3.5	%		1,597			1.1	%
INCOME FROM CONTINUING OPERATIONS		15,068			10.3	%		3,498			2.4	%
Loss from discontinued operations, net of tax		(211	)		-0.1	%		(476	)		-0.3	%
NET INCOME		14,857			10.2	%		3,022			2.1	%
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments		(21	)					105
Unrealized gain on investments		106						-
Total other comprehensive income		85						105
COMPREHENSIVE INCOME	$	14,942					$	3,127
NET INCOME (LOSS) PER SHARE - BASIC:
Income from continuing operations	$	0.21					$	0.05
Loss from discontinued operations		-						(0.01	)
Net income per share	$	0.21					$	0.04
NET INCOME (LOSS) PER SHARE - DILUTED:
Income from continuing operations	$	0.21					$	0.05
Loss from discontinued operations		-						(0.01	)
Net income per share	$	0.21					$	0.04
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		69,737						69,082
Diluted		71,790						70,865

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,
	2018			%of Total Revenue			2017			% of Total Revenue
REVENUE:
Tuition and fees	$	433,736			99.5	%	$	451,292			99.6	%
Other		2,055			0.5	%		2,025			0.4	%
Total revenue		435,791						453,317
OPERATING EXPENSES:
Educational services and facilities		84,437			19.4	%		114,367			25.2	%
General and administrative		293,190			67.3	%		304,158			67.1	%
Depreciation and amortization		7,049			1.6	%		11,368			2.5	%
Total operating expenses		384,676			88.3	%		429,893			94.8	%
Operating income		51,115			11.7	%		23,424			5.2	%
OTHER INCOME:
Interest income		2,326			0.5	%		1,328			0.3	%
Interest expense		(323	)		-0.1	%		(340	)		-0.1	%
Miscellaneous income		225			0.1	%		489			0.1	%
Total other income		2,228			0.5	%		1,477			0.3	%
PRETAX INCOME		53,343			12.2	%		24,901			5.5	%
Provision for income taxes		11,527			2.6	%		11,143			2.5	%
INCOME FROM CONTINUING OPERATIONS		41,816			9.6	%		13,758			3.0	%
Loss from discontinued operations, net of tax		(706	)		-0.2	%		(1,273	)		-0.3	%
NET INCOME		41,110			9.4	%		12,485			2.8	%
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments		(103	)					368
Unrealized (loss) gain on investments		(4	)					34
Total other comprehensive (loss) income		(107	)					402
COMPREHENSIVE INCOME	$	41,003					$	12,887
NET INCOME (LOSS) PER SHARE - BASIC:
Income from continuing operations	$	0.60					$	0.20
Loss from discontinued operations		(0.01	)					(0.02	)
Net income per share	$	0.59					$	0.18
NET INCOME (LOSS) PER SHARE - DILUTED:
Income from continuing operations	$	0.59					$	0.20
Loss from discontinued operations		(0.01	)					(0.02	)
Net income per share	$	0.58					$	0.18
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		69,542						68,897
Diluted		71,425						70,660

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For The Year to Date Ended September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	41,110		$	12,485
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense		7,049			11,368
Bad debt expense		21,579			21,516
Compensation expense related to share-based awards		4,143			3,616
Deferred income taxes		11,174			10,282
Changes in operating assets and liabilities:		(66,760	)		(88,374	)
Net cash provided by (used in) operating activities		18,295			(29,107	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(190,726	)		(202,050	)
Sales of available-for-sale investments		191,555			199,340
Purchases of property and equipment		(3,952	)		(3,426	)
Net cash used in investing activities		(3,123	)		(6,136	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		1,608			2,548
Payments of employee tax associated with stock compensation		(3,313	)		(1,170	)
Net cash (used in) provided by financing activities		(1,705	)		1,378
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH    AND CASH EQUIVALENTS:		-			48
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		13,467			(33,817	)
CASH AND CASH EQUIVALENTS, beginning of the period		18,899			50,882
CASH AND CASH EQUIVALENTS, end of the period	$	32,366		$	17,065

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Quarter Ended September 30,
	2018			2017
REVENUE:
CTU	$	93,115		$	91,319
AIU		52,504			50,150
Total University Group		145,619			141,469
Corporate and Other		-			-
Subtotal		145,619			141,469
All Other Campuses		71			3,517
Total	$	145,690		$	144,986
OPERATING INCOME (LOSS):
CTU	$	26,261		$	27,565
AIU		1,070			2,256
Total University Group		27,331			29,821
Corporate and Other		(4,362	)		(6,199	)
Subtotal		22,969			23,622
All Other Campuses		(3,686	)		(19,083	)
Total	$	19,283		$	4,539
OPERATING MARGIN (LOSS):
CTU		28.2	%		30.2	%
AIU		2.0	%		4.5	%
Total University Group		18.8	%		21.1	%
Corporate and Other	NM			NM
Subtotal		15.8	%		16.7	%
All Other Campuses	NM			NM
Total		13.2	%		3.1	%

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

UNAUDITED SELECTED SEGMENT INFORMATION

(In thousands, except percentages)

	For the Year to Date Ended September 30,
	2018			2017
REVENUE:
CTU	$	280,988		$	276,558
AIU		154,204			150,618
Total University Group		435,192			427,176
Corporate and Other		-			-
Subtotal		435,192			427,176
All Other Campuses		599			26,141
Total	$	435,791		$	453,317
OPERATING INCOME (LOSS):
CTU	$	80,562		$	78,649
AIU		3,621			7,987
Total University Group		84,183			86,636
Corporate and Other		(10,904	)		(16,595	)
Subtotal		73,279			70,041
All Other Campuses		(22,164	)		(46,617	)
Total	$	51,115		$	23,424
OPERATING MARGIN (LOSS):
CTU		28.7	%		28.4	%
AIU		2.3	%		5.3	%
Total University Group		19.3	%		20.3	%
Corporate and Other	NM			NM
Subtotal		16.8	%		16.4	%
All Other Campuses	NM			NM
Total		11.7	%		5.2	%

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)	2018			2017			2018			2017
University Group and Corporate:
Operating income (2) (3)	$	22,969		$	23,622		$	73,279		$	70,041
Depreciation and amortization (3)		2,364			2,605			6,916			7,695
Unused space charges (3)(4)		16			-			1,229			-
Severance and related costs (3)(5)		1,898			-			1,898			-
Adjusted Operating Income -- University Group and Corporate (6)	$	27,247		$	26,227		$	83,322		$	77,736
All Other Campuses:
Operating loss (2) (7)	$	(3,686	)	$	(19,083	)	$	(22,164	)	$	(46,617	)
Depreciation and amortization (7)		-			977			133			3,673
Unused space charges (4) (7)		2,098			7,347			4,545			11,158
Significant legal settlements (7)		134			-			9,595			-
Adjusted Operating Loss -- All Other Campuses (6)	$	(1,454	)	$	(10,759	)	$	(7,891	)	$	(31,786	)
Total Company
Operating income	$	19,283		$	4,539		$	51,115		$	23,424
Depreciation and amortization		2,364			3,582			7,049			11,368
Unused space charges (4)		2,114			7,347			5,774			11,158
Severance and related costs (5)		1,898			-			1,898			-
Significant legal settlements		134			-			9,595			-
Adjusted Operating Income-- Total Company	$	25,793		$	15,468		$	75,431		$	45,950

	For the Quarter Ended December 31,				For the Year to Date Ended December 31,
	OUTLOOK		ACTUAL		OUTLOOK		ACTUAL
	2018		2017		2018		2017
Total Company
Operating income	$19.9M - $24.9M		$10.7M		$71.0M - $76.0M		$34.1M
Depreciation and amortization	~2.5			2.6	~9.5			14.0
Unused space charges (4)	~3.2			1.1	~9.0			12.2
Severance and related costs (5)		-		-		1.9		-
Significant legal settlements		-		6.5		9.6		6.5
Adjusted Operating Income -- Total Company	$25.6M - $30.6M		$20.9M		$101M - $106M		$66.8M

CAREER EDUCATION CORPORATION AND SUBSIDIARIES

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

	For the Quarter Ended September 30,				For the Year to Date Ended September 30,
Adjusted Earnings Per Share	2018		2017		2018		2017
Earnings Per Share- Diluted	$	0.21	$	0.04	$	0.58	$	0.18
NON-GAAP DILUTED EPS ADJUSTMENTS
Unused space charges (8)		0.02		0.06		0.06		0.10
Severance and related costs (8)		0.02		-		0.02		-
Significant legal settlements (8)		0.00		-		0.10		-
Total Adjustments (8)	$	0.04	$	0.06	$	0.18	$	0.10
Adjusted Diluted Earnings Per Share (NON-GAAP)	$	0.25	$	0.10	$	0.76	$	0.28

(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) and adjusted diluted earnings per share 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 restructuring charges and significant legal reserves. In evaluating adjusted operating income (loss) and adjusted diluted earnings per share, 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) and adjusted diluted earnings per share 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) and adjusted diluted earnings per share 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), diluted earnings per share, 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 All Other Campuses make up the components of operating income. A reconciliation of these components for the quarters and years to date ended September 30, 2018 and 2017 is presented below:

	For The Quarter Ended September 30,						For the Year to Date Ended September 30,
	ACTUAL						ACTUAL
	2018			2017			2018			2017
Operating income for University Group and Corporate	$	22,969		$	23,622		$	73,279		$	70,041
Operating loss for All Other Campuses		(3,686	)		(19,083	)		(22,164	)		(46,617	)
Operating income	$	19,283		$	4,539		$	51,115		$	23,424

(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 exited leased space and therefore are not considered representative of ongoing operations. As early lease terminations or subleases occur, or as assumptions are otherwise adjusted, these unused space charges are increased or decreased. These adjustments are also included in the amounts presented.

(5) Severance and related costs includes charges related to significant restructuring actions. These restructuring actions are non-recurring charges and are not considered part of ongoing operating results.

(6) Management assesses results of operations for the University Group and Corporate separately from All Other Campuses. Because All Other 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.

(7) Amounts relate to All Other Campuses.

(8) Adjustments include a tax effect of 25% and 39% for each of the periods ending in 2018 and 2017, respectively, based on a normalized federal and state income tax rate.

EX-99.2

CAREER EDUCATION CORPORATION THIRD quarter 2018 investor conference call NOVEMBER 1, 2018 Ashish Ghia Senior Vice President & 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 assumptions made by (see, for example, slide 4), 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, 2017 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

2018 Outlook - Total Company Estimated outlook is based on assumptions listed on slide 4 Unused space charges represent the net present value of remaining lease obligations for vacated space less an estimated amount for sublease income. As early lease terminations or subleases occur, or as assumptions are otherwise adjusted, these unused space charges are increased or decreased. These adjustments are also included in the amounts presented. Severance and related costs includes charges related to significant restructuring actions. These restructuring actions are non-recurring charges and are not considered part of ongoing operating results. See slides 5 - 8 for a GAAP to non-GAAP reconciliation of adjusted operating income (loss) Total Company Ending Cash 3rd Quarter 4th Quarter Full Year Actual Actual Actual Outlook Actual Outlook Outlook 2017 2018 (1) 2017 2018 (1) 2017 2018 2019 (1) Operating Income $4,500,000 $19,300,000 $10,700,000 $19.9M - $24.9M $34,100,000 $71.0M - $76.0M Adjustments: Depreciation and amortization 3.6 2,400,000 2.6 ~2.5 14 ~9.5 Growth vs 2018 Unused space charges (2) 7,400,000 2,100,000 1,100,000 ~3.2 12.2 ~9.0 Severance and related costs (3) 0 1,900,000 0 0 0 1,900,000 Significant legal settlements 0 ,100,000 6,500,000 0 6.5 9,600,000 Adjusted Operating Income(4) $15,500,000 $25,800,000 $20,900,000 $25.6M - $30.6M $66,800,000 $101M - $106M As of December 31, 2017 2018(1) 2019 (1) Year-end cash, cash equivalents, restricted cash, and available-for-sale short-term investments $180.1M $215M - $220M Increase vs 2018 42979 Total company 4,539 3,582 7,347 15,468 3rd Quarter 4th Quarter Full Year Actual Actual Actual Outlook Actual Outlook Outlook 2017 2018 2017 2018 (1) 2017 2018 (1) 2019 (1) Operating Income $4,500,000 $19,300,000 $10,700,000 $19.9M - $24.9M $34,100,000 $71.0M - $76.0M Adjustments: Depreciation and amortization 3.6 2,400,000 2.6 ~2.5 14 ~9.5 Growth vs 2018 Unused space charges (2) 7,400,000 2,100,000 1,100,000 ~3.2 12.2 ~9.0 Severance and related costs (3) 0 1,900,000 0 0 0 1,900,000 Significant legal settlements 0 ,100,000 6,500,000 0 6.5 9,600,000 Adjusted Operating Income(4) $15,500,000 $25,800,000 $20,900,000 $25.6M - $30.6M $66,800,000 $101M - $106M As of December 31, 2017 2018(1) 2019 (1) Year-end cash, cash equivalents, restricted cash, and available-for-sale short-term investments $180.1M $215M - $220M Increase vs 2018 42979 Total company 4,539 3,582 7,347 15,468

Outlook Assumptions Achievement of the outlook included within these slides is based on the following key assumptions and factors, among others: Prospective student interest in our programs continues to trend in line with recent experiences Initiatives and investments in student-serving operations continue to positively impact enrollment trends within the University Group Achievement of anticipated recovery rates for our real estate obligations in line with our current expectations No material changes in the current legal or regulatory environment, and excludes legal and regulatory liabilities and other related impacts which are not probable and estimable at this time, and any impact of new or proposed regulations, including the “borrower defense to repayment” and gainful employment regulations and any modifications thereto No material changes in the estimated amount of compensation expense that could be impacted by changes in the Company’s stock price 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) and Adjusted Diluted EPS CAREER EDUCATION CORPORATION AND SUBSIDIARIES 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, Adjusted Operating Income (Loss) 2017 2018 2017 2018 University Group and Corporate: Operating income (2)(3) $23,622 $22,969 $70,041 $73,279 Depreciation and amortization (3) 2,605 2,364 7,695 6,916 Unused space charges (3)(4) 0 16 0 1,229 Severance and related costs (3)(5) 0 1,898 0 1,898 Adjusted Operating Income --University Group and Corporate (6) $26,227 $27,247 $77,736 $83,322 All Other Campuses Operating loss (2)(7) $,-19,083 $-3,686 $,-46,617 $,-22,164 Depreciation and amortization (7) 977 0 3,673 133 Unused space charges (4)(7) 7,347 2,098 11,158 4,545 Significant legal settlements (7) 0 134 0 9,595 Adjusted Operating Loss --All Other Campuses (6) $,-10,759 $-1,454 $,-31,786 $-7,891 Total Company Operating income $4,539 $19,283 $23,424 $51,115 Depreciation and amortization 3,582 2,364 11,368 7,049 Unused space charges (4) 7,347 2,114 11,158 5,774 Severance and related costs (5) 0 1,898 0 1,898 Significant legal settlements 0 134 0 9,595 Adjusted Operating Income --Total Company $15,468 $25,793 $45,950 $75,431 $0 $0 $0 $0

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) and Adjusted Diluted EPS cont’d CAREER EDUCATION CORPORATION AND SUBSIDIARIES 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 2017 2018 2017 2018 Total Company Operating income $4,539 $19,283 $23,424 $51,115 Depreciation and amortization 3,582 2,364 11,368 7,049 Unused space charges (4) 7,347 2,114 11,158 5,774 Severance and related costs (5) 0 1,898 0 1,898 Significant legal settlements 0 134 0 9,595 Adjusted Operating Income --Total Company $15,468 $25,793 $45,950 $75,431 For the Quarter Ended December 31, For the Year to Date Ended December 31, ACTUAL OUTLOOK ACTUAL OUTLOOK 2017 2018 2017 2018 Total Company Operating income $10,712 $19.9M - $24.9M $34,136 $71.0M - $76.0M Depreciation and amortization 2,622 ~2.5 13,990 ~9.5 Unused space charges (4) 1,009 ~3.2 12,167 ~9.0 Severance and related costs (5) 0 0 0 1.9 Significant legal settlements 6,543 0 6,543 9.6 Adjusted Operating Income --Total Company $20,886 $25.6M - $30.6M $66,836 $101M - $106M 20886 66836

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) and Adjusted Diluted EPS cont’d CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (1) For the Quarter Ended September 30, For the Year to Date Ended September 30, Adjusted Earnings Per Share 2017 2018 2017 2018 Earnings Per Share- Diluted $4.4126155365836452E-2 $0.20695082880624041 $0.17669119728276253 $0.57556877843892196 NON-GAAP DILUTED EPS ADJUSTMENTS Unused space charges (8) 6.3242362238058278E-2 2.2085248641872127E-2 9.6325785451457688E-2 6.0630031501575081E-2 Severance and related costs (8) 0 1.9828666945256999E-2 0 1.9929996499824992E-2 Significant legal settlements (8) 0 1.3999164229001255E-3 0 0.10075253762688134 Total Adjustments (8) $6.3242362238058278E-2 $4.3313832010029252E-2 $9.6325785451457688E-2 $0.18131256562828141 Adjusted Diluted Earnings Per Share (NON-GAAP) $9.7368517603894741E-2 $0.25026466081626964 $0.28301698273422021 $0.75688134406720331 0.25 0.76 0.75 Tax effect benefit 0.25 1

Reconciliation of GAAP to Non-GAAP Items – Adjusted Operating Income (Loss) and Adjusted Diluted EPS 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. The Company believes adjusted operating income (loss) and adjusted diluted earnings per share 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 restructuring charges and significant legal reserves. In evaluating adjusted operating income (loss) and adjusted diluted earnings per share, 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) and adjusted diluted earnings per share 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) and adjusted diluted earnings per share 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), diluted earnings per share, or any other performance measure derived in accordance with 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 All Other Campuses make up the components of operating income. A reconciliation of these components for the quarters and years to date ended September 30, 2018 and 2017 is presented below: For the Quarter Ended September 30, For the Year to Date Ended September 30, ACTUAL ACTUAL 2017 2018 2017 2018 Operating income for University Group and Corporate $23,622 $22,969 $70,041 $73,279 Operating loss for All Other Campuses ,-19,083 -3,686 ,-46,617 ,-22,164 Operating income $4,539 $19,283 $23,424 $51,115 (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 exited leased space and therefore are not considered representative of ongoing operations. As early lease terminations or subleases, or as assumptions are otherwise adjusted, these unused space charges are increased or decreased. These adjustments are also included in the amounts presented. (5) Severance and related costs includes charges related to significant restructuring actions. These restructuring actions are non-recurring charges and are not considered part of ongoing operating results. (6) Management assesses results of operations for the University Group and Corporate separately from All Other Campuses. Because All Other 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. (7) Amounts relate to the All Other Campuses Group. (8) Adjustments include a tax effect of 25% and 39% for each of the periods ending in 2018 and 2017, respectively, based on a normalized federal and state income tax rate.