6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2010

Commission File Number: 001-33858

CHINAEDU CORPORATION

(Translation of registrant’s name into English)

ChinaEdu Corporation

4th Floor-A, GeHua Building,

QinglongHutong No 1, Dongcheng District

Beijing 100007, People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ               Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note:  Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note:Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o               No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

CHINAEDU CORPORATION

Form 6-K

CONTENTS

Signatures

Exhibit 99.1 – Earnings Press Release for the Quarter Ended March 31, 2010

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, thereunto duly authorized.

CHINAEDU CORPORATION
By:	/s/ Julia Huang
	Name:	Julia Huang
	Title:	Chairman and Chief Executive Officer

Date: May 26, 2010

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release for the Quarter Ended March 31, 2010

EX-99.1

CHINAEDU REPORTS FIRST QUARTER 2010 RESULTS

First Quarter Net Revenue in Line with Guidance with 7.5% Growth Year-Over-Year;

Net income per diluted ADS is $0.061, Exceeding Analyst Consensus

Live Conference Call to be held on Tuesday, May 25, 2010

at 8 a.m. (Eastern) / 5 a.m. (Pacific) / 8 p.m. (Beijing/Hong Kong)

BEIJING, CHINA – May 24, 2010 – ChinaEdu Corporation (NASDAQ: CEDU) (“ChinaEdu” or the “Company”), an educational services provider in China, today announced its unaudited financial results for the first quarter ended March 31, 2010.1

(in thousands, unaudited)	Three Months Ended
Period ended	March 31, 2009		March 31, 2010		Period over Period %
Currency	USD		USD
Financial Data:
Net revenue		11,892		12,786		7.5%
Gross profit		7,120		8,193		15.1%
Income from operations		2,569		2,856		11.2%
Net income attributable to ChinaEdu		1,401		1,059		-24.4%
Adjusted EBITDA (2) (non-GAAP)		3,749		4,036		7.7%
Net income attributable to ChinaEdu per diluted ADS (3)		0.079		0.061		-22.8%
Adjusted net income per diluted ADS (4) (non-GAAP)		0.111		0.087		-21.6%
Operating Data:
Revenue students (5) for online degree program		118,000		140,000		18.6%

First Quarter 2010 Highlights

·   Total net revenue for the first quarter of 2010 grew by 7.5% to $12.8 million from $11.9 million for the corresponding period in 2009, in line with our guidance for the first quarter of 2010 of $12.7 million to $13.2 million.

·   Net revenue from online degree programs increased by 4.2% to $10.0 million for the first quarter of 2010 from $9.6 million for the corresponding period in 2009.

1 The reporting currency of the Company is RMB, but for the convenience of the reader, the amounts for the three months ended March 31, 2010 are presented in U.S. dollars. Unless otherwise stated, all translations from RMB to U.S. dollars were made at the rate of RMB6.8258 to $1.00, the noon buying rate in effect on March 31, 2010 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release. An explanation of the Company’s non-GAAP financial measures is included in the section entitled “Non-GAAP Financial Measures” below, and the related reconciliations to GAAP financial measures are presented in the accompanying financial statements.

 

2 “Adjusted EBITDA” is a non-GAAP measure defined as net income before interest income, taxes, depreciation, amortization of intangible assets and land use rights and share-based compensation.

 

3 “ADS” is American Depositary Share. Each ADS represents three ordinary shares.

 

4 “Adjusted net income per diluted ADS” is a non-GAAP measure which is computed using adjusted net income attributable to ChinaEdu over number of ADSs used in net income per diluted ADS calculation.

5 “Revenue students” refer to students of university online degree programs who have paid tuitions in the applicable period.

·   The number of revenue students in online degree programs during 2009 fall semester increased by approximately 18.6% to over 140,000 from approximately 118,000 for the corresponding period in 2008.

·   Adjusted EBITDA increased by 7.7% to $4.0 million in the first quarter of 2010 from $3.7 million for the corresponding period in 2009.

·   Net income attributable to ChinaEdu decreased to $1.1 million in the first quarter of 2010 from $1.4 million for the corresponding period in 2009.

·   Net income per diluted ADS was $0.061 for the first quarter of 2010 as compared to $0.079 for the corresponding period in 2009.

·   Adjusted net income per diluted ADS was $0.087 for the first quarter of 2010 as compared to $0.111 for the corresponding period in 2009.

“We are pleased to report a solid first quarter of 2010, with strong revenue growth particularly in our learning centers network and 101 online tutoring programs as we set out to do in 2009,” said Ms. Julia Huang, ChinaEdu’s Chairman and Chief Executive Officer. “For our online degree programs, we will continue to build strategic partnerships in 2010. We are pleased to announce two new strategic partnerships signed in the first quarter of this year. One of which, Huazhong Normal University is within the 67 universities approved to offer online degree programs. In addition, we will continue to push ahead with the various non-degree programs at our subsidiaries, including English language proficiency program with McGraw-Hill and teachers training program. We are committed to continue research and development efforts of our technology platform, internet and mobile applications for the online degree and non-degree programs including interactive online learning community for both K-12 students and adult learners, while we continue to maintain a tight control over our expenses. Overall, we believe our company is positioned strongly to capture the immense potential that online education can offer in the future.”

Financial Results for the First Quarter Ended March 31, 2010

Net Revenue

Total net revenue for the first quarter of 2010 was $12.8 million, representing a 7.5% increase from the corresponding period in 2009. Net revenue from online degree programsfor the first quarter of 2010 was $10.0 million, representing a 4.2% increase from $9.6 million for the corresponding period in 2009. Enrollment for the 2009 fall semester online degree programs registered over 140,000 revenue students, which represented an increase of 18.6% as compared to 118,000 revenue students for the 2008 fall semester.

Learning centers network continued to expand with respect to both geographic coverage and universities served. By the end of the first quarter of 2010, we had 62 operational learning centers of which 24 were proprietary and 38 were contracted locations, as compared to 49 operational learning centers as of the end of the first quarter of 2009, of which 20 were proprietary and 29 were contracted locations. Our learning centers network is now serving a total of 17 universities’ online degree programs.

Net revenue from the Company’s non-online degree programs (online tutoring programs, private primary and secondary schools and international curriculum programs) for the first quarter of 2010 was $2.7 million, representing a 21.8% increase from $2.3 million for the corresponding period in 2009. This increase was attributable to a 50.4% increase in net revenue for the 101 online tutoring programs from increased sales and a 48.9% increase in net revenue at Anqing School due to an increase in student enrollment as a result of the increased enrollment at the new campus, but offset by an expected 26.9% decrease in net revenue for the international curriculum programs.

2

Cost of Revenue

Total cost of revenue for the first quarter of 2010 was $4.6 million, representing a decrease of 3.8% as compared to $4.8 million for the corresponding period of 2009. Cost of revenue for online degree programs for the first quarter of 2010 was $3.1 million, representing a decrease of 7.2% as compared to $3.3 million for the first quarter of 2009. The decrease in online degree programs’ cost of revenue was primarily due to a decrease in special courseware development for selected university partners at our collaborative alliances in the first quarter of 2010, as compared to the first quarter of 2009.

Cost of revenue for non-online degree programs for the first quarter of 2010 was $1.5 million, representing a 4.2% increase for the corresponding period in 2009. This increase was attributable primarily to an increase in cost of revenue due to increased staff, depreciation charges, transportation costs related to Anqing School’s new campus, which was partially offset by a decrease in cost of revenue for our 101 online tutoring programs and the international curriculum programs. The minor decrease in cost of revenue for 101 online tutoring programs was primarily due to lower cost of revenue related to third-party distribution channels, as compared to the corresponding period in 2009. The minor decrease in cost of revenue for the international curriculum programs was primarily due to a small decrease in staff.

Gross Profit and Gross Margin

Gross profit for the first quarter of 2010 was $8.2 million, representing a 15.1% increase from $7.1 million for the corresponding period of 2009. Total gross margin for the first quarter of 2010 increased to 64.1%, as compared to 59.9% for the corresponding period of 2009. Gross margin for the online degree programs increased to 69.3% for the first quarter of 2010, as compared to 65.5% for the corresponding period of 2009, primarily due to a decrease in special courseware development for selected university partners at our collaborate alliances as discussed above. Gross margin for 101 online tutoring programs improved significantly to 78.4% for the first quarter of 2010, as compared to 59.9% for the first quarter of 2009, due to more efficient management of our distribution channels. Gross margin for Anqing School improved significantly, as compared to the corresponding period in 2009, due to increased enrollment at the new campus, despite additional depreciation and staff expenses resulting from the new campus. Gross margin for the international curriculum programs declined to 40.9% for the first quarter of 2010, as compared to 47.2% in the corresponding period of 2009, primarily due to a decline in revenue.

Operating Expenses

Total operating expenses were $5.3 million for the first quarter of 2010, representing a 17.3% increase from $4.6 million for the corresponding period in 2009. This increase was attributable primarily to the factors discussed below:

·   General and administrative expensesfor the first quarter of 2010were $2.9 million, which remained relatively flat comparing to the corresponding period of 2009.

·   Selling and marketing expenses were $1.1 million for the first quarter of 2010, which represented a 57.6% increase from $0.7 million for the corresponding period in 2009. This increase was attributable primarily to an increase in sales conferences and other sales activities and increase in expense associated with more sales and marketing staff at our online degree programs and 101 online tutoring programs in the first quarter of 2010.

3

·   Research and development expenses,mainly contributing to technology platform upgrade as well as internet and mobile applications development, for the first quarter of 2010were $1.3 million, representing a 33.5% increase from $1.0 million for the corresponding period in 2009, primarily due to increased staff for the new research and development initiatives.

·   Share-based compensation for the first quarter of 2010,which was allocated to the related cost and operating expense line items, remained flat at $0.3 million, as compared to $0.3 million for the corresponding period in 2009.

Income from Operations

As a result of the factors discussed above, income from operations for the first quarter of 2010 was $2.9 million, representing an 11.2% increase as compared to $2.6 million for the corresponding period of 2009. Operating margin expanded by 0.7% to 22.3% for the first quarter of 2010, as compared to 21.6% in the corresponding period of 2009.

Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, and amortization of intangible assets and land use rights was $3.3 million for the first quarter of 2010, which increased by 5.6% as compared to $3.2 million in the corresponding period of 2009. Adjusted operating margin, which is a non-GAAP measure defined as a ratio of adjusted operating income from operations (non-GAAP) over net revenue, for the first quarter of 2010 remained relatively flat at 26.2% as compared to 26.7% for the corresponding period of 2009.

Interest Income

Interest income for the first quarter of 2010 decreased slightly to $0.16 million, as compared to $0.25 million in the corresponding quarter of 2009.

Income Tax Expense

Income tax expense for the first quarter of 2010 was $1.2 million, representing a 201.7% increase from income tax expense of $0.4 million for the corresponding period in 2009. The increase is mainly due to an increase in deferred tax rate at our collaborative alliance with Chongqing University. Its current preferential tax rate of 12.5% resulting from its status as a “software enterprise” will expire in 2011. We are in the process of applying for the “high and new technology enterprises” status, however, until we receive official approval of this status, we must use 25% statutory tax rate on its deferred tax liabilities. As a result, the effective income tax rate increased significantly for the first quarter of 2010, as compared to the corresponding period in 2009.

Noncontrolling Interest

Noncontrolling interest was $0.8 million in the first quarter of 2010, representing a decrease from $1.1 million in the corresponding period in 2009, which was attributable primarily to the noncontrolling interest impact related to the increased income tax expense for the first quarter of 2010, as compared to the first quarter of 2009.

Net Income attributable to ChinaEdu

Net income attributable to ChinaEdu, which is net income excluding net income attributable to noncontrolling interest,was $1.1 million for the first quarter of 2010, representing a decrease of 24.4% from $1.4 million for the corresponding period in 2009. The decrease was primarily due to the increased income tax expense at one of our collaborative alliance. We have begun the process of applying for the “high and new technology enterprise” status for the collaborative alliance. When we receive the official approval of the “high and new technology enterprise” status, a one-time reversal of the deferred tax expenses will be recorded in that quarter. Net margin was 8.3% in the first quarter of 2010 as compared to 11.8% in the first quarter of 2009.

4

Net income attributable to ChinaEdu per basic and diluted ADS were $0.066 and $0.061, respectively, for the first quarter of 2010, as compared to $0.084 and $0.079, respectively, for the corresponding period in 2009.

Adjusted net income attributable to ChinaEdu(6) (non-GAAP) decreased to $1.5 million for the first quarter of 2010, as compared to $2.0 million in the corresponding period of 2009. Adjusted net margin, which is a non-GAAP measure defined as a ratio of adjusted net income attributable to ChinaEdu (non-GAAP) over net revenue, was 11.9% in the first quarter of 2010, as compared to 16.5% in the corresponding period of 2009. The decrease in adjusted net income attributable to ChinaEdu (non-GAAP) was primarily due to the increased income tax expenses at one of our collaborative alliances as discussed above.

Adjusted net income per basic and diluted ADS(7) were $0.095 and $0.087, respectively, for the first quarter of 2010.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA (non-GAAP) was $4.0 million for the first quarter of 2010, which increased by 7.7%, as compared to $3.7 million for the corresponding period in 2009. Adjusted EBITDA margin was 31.6% in the first quarter of 2010 as compared to 31.5% in the first quarter of 2009. This increase was attributable primarily to improved operating results from our learning centers network, 101 online tutoring programs and Anqing School.

Deferred Revenue

Deferred revenue at the end of the first quarter of 2010 was $6.6 million, with current deferred revenue of $5.4 million and non-current deferred revenue of $1.2 million. Deferred revenue at the end of the first quarter of 2010 decreased as compared to deferred revenue of $15.5 million at the end of the fourth quarter 2009 due to seasonality of enrollments. Tuition is received generally during the second quarter (spring semester) and the fourth quarter (fall semester) of each year.

Cash and Cash Equivalents and Term Deposits

As of March 31, 2010, ChinaEdu reported cash and cash equivalents and term deposits of $48.9 million, which primarily consisted of cash, demand deposits with original maturities of three months or less, and term deposits with original maturity terms of greater than three months but less than one year.

Amounts Due from Related Parties

Amounts due from related parties (which represents cash owed to us by our collaborative alliance partners) were $20.8 million as of March 31, 2010, as compared to amounts due from related parties of $25.9 million as of December 31, 2009.

6 “Adjusted net income attributable to ChinaEdu” is a non-GAAP measure defined as net income attributable to ChinaEdu excluding share-based compensation, noncontrolling interest for share-based compensation, and amortization of intangible assets and land use rights.

 

7 “Adjusted net income per ADS” is a non-GAAP measure which is computed using adjusted net income attributable to ChinaEdu over number of ADSs used in net income attributable to ChinaEdu per ADS calculation.

5

Second Quarter 2010 Total Net Revenue Guidance

For the second quarter of 2010, ChinaEdu expects its total net revenue to be in the range of RMB91 million to RMB97 million or $13.3 million to $14.2 million. This forecast reflects ChinaEdu’s current and preliminary view, which is subject to change.

Conference Call

ChinaEdu senior management will host a conference call on Tuesday, May 25, 2010 at 8:00 a.m. U.S. Eastern time / 5:00 a.m. U.S. Pacific time / 8:00 p.m. Beijing/Hong Kong time.

The conference call may be accessed by calling (US) 800 573 4752/ (International) +1 617 224 4324/ (HK) +852 3002 1672/ (China) +86 10 800 152 1490, and entering the passcode: 95741166. A telephone replay of the conference call will be available shortly after the call until June 1, 2010 at (US) 888 286 8010/ (International) +1 617 801 6888 and entering passcode: 64679582. A live and archived webcast may be accessed via ChinaEdu’s investor relations website at http://ir.chinaedu.net.

6

 

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”), the Company uses non-GAAP measures of income from operations and net income attributable to ChinaEdu, which are adjusted from results based on GAAP to exclude certain non-cash items of share-based compensation and amortization of intangible assets and land use rights. The Company also uses adjusted EBITDA, which is also a non-GAAP measure and is adjusted from GAAP results of net income to exclude interest income, taxes, depreciation, amortization of intangible assets and land use rights, and share-based compensation. These non-GAAP financial measures are provided to enhance the investors’ overall understanding of the Company’s current and past financial performance in on-going core operations as well as prospects for the future. These measures should be considered in addition to results prepared and presented in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Management considers the non-GAAP information as important measures internally and therefore deems it important to provide all of this information to investors.

About ChinaEdu

ChinaEdu Corporation is an educational services provider in China, incorporated as an exempted limited liability company in the Cayman Islands. Established in 1999, the Company’s primary business is to provide comprehensive services to the online degree programs of leading Chinese universities. These services include academic program development, technology services, enrollment marketing, student support services and finance operations. The Company’s other lines of businesses include the operation of private primary and secondary schools, online interactive tutoring services and providing marketing and support for international curriculum programs.

The Company believes it is the largest service provider to online degree programs in China in terms of the number of higher education institutions that are served and the number of student enrollments supported. The Company currently has 16 long-term, exclusive contracts that generally vary from 10 to 50 years in length. ChinaEdu also performs recruiting services for 17 universities through its nationwide learning centers network.

Forward-Looking Statement

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and contingencies, many of which are beyond our control which may cause actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company’s actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including those described under the heading “Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2008, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to (and expressly disclaim any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

7

Company Contacts:

Lily Liu, CFO

ChinaEdu Corporation

Phone: +86 10 8418 6655 ext.1002

E-mail: ir@chinaedu.net

S. Jimmy Xia, IR Manager

ChinaEdu Corporation

Phone: +86 10 8418 6655 ext.1150

E-mail: ir@chinaedu.net

8

ChinaEdu Corporation
Unaudited Condensed Consolidated Balance Sheets
(in thousands, unaudited)	December 31, 2009		March 31, 2010		March 31, 2010
	RMB		RMB		US$
Current assets:
Cash and cash equivalents		203,143		209,684		30,719
Term deposits		122,304		124,326		18,214
Restricted cash		365		365		53
Accounts receivable, net		28,334		15,454		2,264
Inventory		1,852		1,452		213
Prepaid expenses and other current assets		25,315		15,814		2,317
Amounts due from related parties		176,802		141,971		20,799
Deferred tax assets		3,309		1,389		203
Investments		17,706		20,704		3,034
Total current assets		579,130		531,159		77,816
Cost method investment		1,210		1,210		177
Investment		3,000		-		-
Land use rights, net		27,874		27,722		4,061
Property and equipment, net		203,995		204,916		30,021
Deposits paid for acquisition of property and equipment		13,898		13,898		2,036
Intangible assets, net		66,621		66,516		9,745
Deferred tax assets		1,541		2,815		412
Rental deposits		868		879		129
Goodwill		38,155		38,155		5,590
Total assets		936,292		887,270		129,987
Liabilities and equity
Current liabilities:
Accounts payable		6,467		4,633		679
Deferred revenues		97,853		36,662		5,371
Accrued expenses and other current liabilities		68,917		63,468		9,298
Amounts due to related parties		25,668		34,927		5,117
Income taxes payable		33,389		31,078		4,553
Other taxes payable		15,900		11,066		1,621
Total current liabilities		248,194		181,834		26,639
Deferred revenues		8,075		8,344		1,222
Deferred tax liabilities		10,143		9,982		1,462
Unrecognized tax benefit		7,727		8,089		1,185
Total liabilities		274,139		208,249		30,508
ChinaEdu shareholders’ equity		559,973		570,565		83,590
Noncontrolling interest		102,180		108,456		15,889
Total  equity		662,153		679,021		99,479
Total liabilities and equity		936,292		887,270		129,987

9

ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Operations
	Three Months Ended
(in thousands, except for percentage, share, and per share information)	March 31, 2009			December 31, 2009			March 31, 2010			March 31, 2010
	RMB			RMB			RMB			US$
Gross Revenue *		85,479			95,871			91,089			13,345
Business Tax and Surcharge		4,309			354			3,812			559
Net Revenue:
Online degree programs		65,764			76,457			68,515			10,037
Online tutoring programs		3,592			5,510			5,401			791
Private primary and secondary schools		6,231			9,816			9,280			1,360
International curriculum programs		5,583			3,734			4,081			598
Total net revenue		81,170			95,517			87,277			12,786
Cost of revenue:
Online degree programs		22,683			26,575			21,048			3,084
Online tutoring programs		1,441			1,222			1,165			171
Private primary and secondary schools		5,498			7,298			6,724			985
International curriculum programs		2,948			2,531			2,411			353
Total cost of revenue		32,570			37,626			31,348			4,593
Gross profit:
Online degree programs		43,081			49,882			47,467			6,953
Online tutoring programs		2,151			4,288			4,236			620
Private primary and secondary schools		733			2,518			2,556			375
International curriculum programs		2,635			1,203			1,670			245
Total gross profit		48,600			57,891			55,929			8,193
Online degree programs		65.5	%		65.2	%		69.3	%		69.3	%
Online tutoring programs		59.9	%		77.8	%		78.4	%		78.4	%
Private primary and secondary schools		11.8	%		25.7	%		27.5	%		27.5	%
International curriculum programs		47.2	%		32.2	%		40.9	%		40.9	%
Gross margin		59.9	%		60.6	%		64.1	%		64.1	%
Operating expenses:
General and administrative		19,583			23,014			19,920			2,918
Selling and marketing		4,910			6,578			7,740			1,134
Research and development		6,571			8,410			8,771			1,285
Total operating expenses		31,064			38,002			36,431			5,337
Income from operations		17,536			19,889			19,498			2,856
Operating margin		21.6	%		20.8	%		22.3	%		22.3	%
Other income (expense)		626			761			144			21
Interest income		1,672			1,085			1,057			155
Interest expense		-			(1	)		-			-
Income before income tax provisions		19,834			21,734			20,699			3,032
Income tax expense		(2,708	)		(5,487	)		(8,171	)		(1,197	)
Net income		17,126			16,247			12,528			1,835
Net income attributable to the noncontrolling interest		(7,562	)		(7,191	)		(5,296	)		(776	)
Net income attributable to ChinaEdu		9,564			9,056			7,232			1,059
Net margin		11.8	%		9.5	%		8.3	%		8.3	%
Net income attributable to ChinaEdu per ADS:
Basic		0.57			0.56			0.45			0.066
Diluted		0.54			0.51			0.42			0.061
Weighted average aggregate number of ADSs outstanding:
Basic		16,661,225			16,148,719			15,954,875			15,954,875
Diluted		17,639,683			17,589,699			17,396,275			17,396,275
* Gross revenue are detailed as follows
Online degree programs		69,665			76,441			72,458			10,615
Online tutoring programs		3,675			5,658			5,033			737
Private primary and secondary schools		6,231			9,821			9,280			1,360
International curriculum programs		5,908			3,951			4,318			633

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ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Cash Flow
	Three Months Ended
(in thousands)	March 31, 2009			December 31, 2009			March 31, 2010			March 31, 2010
	RMB			RMB			RMB			US$
Operating activities:
Net income		17,126			16,247			12,528			1,835
Share-based compensation		2,262			1,611			2,138			313
Depreciation		3,941			4,560			4,690			687
Amortization of land use rights		163			152			152			22
Amortization of intangible assets		1,686			1,129			1,080			158
Accounts receivable write-off		62			(61	)		-			-
Loss from disposal of property and equipment		78			310			4			1
Deferred income taxes		1,795			(51	)		485			71
Accounts receivable		10,378			(15,121	)		12,880			1,887
Inventory		-			(53	)		400			59
Prepaid expenses and other current assets		(1,881	)		(2,800	)		9,500			1,392
Amounts due from related parties		46,384			11,511			34,831			5,103
Rental deposits		47			62			(11	)		(2	)
Land use right		(949	)		-			-			-
Accounts payable		1,084			(1,373	)		(808	)		(118	)
Deferred revenues		(65,617	)		64,517			(60,921	)		(8,925	)
Accrued expenses and other current liabilities		(2,046	)		10,043			(5,446	)		(798	)
Amounts due to related parties		1,005			(37,523	)		10,730			1,572
Unrecognized tax benefit		348			184			362			53
Other taxes payable		(4,533	)		2,054			(4,834	)		(708	)
Income tax payable		(9,229	)		5,131			(2,311	)		(339	)
Net cash provided by operating activities		2,104			60,529			15,449			2,263
Investing activities:
Purchase of property and equipment		(10,605	)		(6,277	)		(6,690	)		(980	)
Deposits paid for acquisition of property and equipment		-			(13,987	)		-			-
Purchase of term deposits		(31,008	)		(33,825	)		(2,019	)		(296	)
Purchase of investments		-			(6,495	)		-			-
Purchase of contractual right		(500	)		(735	)		-			-
Change in restricted cash		-			(365	)		-			-
Proceeds from disposal of property and equipment		-			-			49			7
Net cash used in investing activities		(42,113	)		(61,684	)		(8,660	)		(1,269	)
Financing activities:
Repurchase of ordinary shares		(61,647	)		(14,740	)		-			-
Cancellation fee of repurchased ordinary shares		-			-			(113	)		(17	)
Short term loan		-			(2,117	)		-			-
Cash dividends paid to noncontrolling shareholders		(10,600	)		(4,098	)		(1,470	)		(215	)
Capital contributions by noncontrolling shareholders		980			735			-			-
Proceeds from exercise of options		713			274			1,339			196
Net cash used in financing activities		(70,554	)		(19,946	)		(244	)		(36	)
Effect of foreign exchange rate changes		340			4			(4	)		-
CASH AND CASH EQUIVALENTS, beginning of period		353,933			224,240			203,143			29,761
CASH AND CASH EQUIVALENTS, end of period		243,710			203,143			209,684			30,719
Net  increase (decrease) in cash		(110,223	)		(21,097	)		6,541			958

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ChinaEdu Corporation
Reconciliations from income from operations to adjusted income from operations (non-GAAP) and adjusted operating margin (non-GAAP)
(in thousands, unaudited)	March 31, 2009			December 31, 2009			March 31, 2010			March 31, 2010
	RMB			RMB			RMB			US$
Net revenue		81,170			95,517			87,277			12,786
Income from operations		17,536			19,889			19,498			2,856
Adjustments:
Share-based compensation		2,262			1,611			2,138			313
Amortization		1,849			1,281			1,232			180
Adjusted income from operations (non-GAAP)		21,647			22,781			22,868			3,349
Adjusted operating margin (non-GAAP)		26.7	%		23.9	%		26.2	%		26.2	%

ChinaEdu Corporation
Reconciliation from net income to adjusted EBITDA (non-GAAP) and adjusted EBITDA margin (non-GAAP)
	Three Months Ended
(in thousands, unaudited)	March 31, 2009			December 31, 2009			March 31, 2010			March 31, 2010
	RMB			RMB			RMB			US$
Net revenue		81,170			95,517			87,277			12,786
Net income		17,126			16,247			12,528			1,835
Adjustments:
Income tax expense		2,708			5,487			8,171			1,197
Share-based compensation		2,262			1,611			2,138			313
Amortization		1,849			1,281			1,232			180
Depreciation		3,941			4,560			4,690			687
Interest income and other, net		(2,298	)		(1,845	)		(1,201	)		(176	)
Adjusted EBITDA (non-GAAP)		25,588			27,341			27,558			4,036
Adjusted EBITDA margin (non-GAAP)		31.5	%		28.6	%		31.6	%		31.6	%

ChinaEdu Corporation
Reconciliations from net income attributable to ChinaEdu to adjusted net income attributable to ChinaEdu (non-GAAP), adjusted net margin (non-GAAP) and adjusted net income per ADS (non-GAAP)
(in thousands, unaudited)	March 31, 2009			December 31, 2009			March 31, 2010			March 31, 2010
	RMB			RMB			RMB			US$
Net revenue		81,170			95,517			87,277			12,786
Net income attributable to ChinaEdu		9,564			9,056			7,232			1,059
Adjustments:
Share-based compensation		2,262			1,611			2,138			313
Share-based compensation attributable to the noncontrolling interest		(296	)		(183	)		(243	)		(36	)
Amortization		1,849			1,281			1,232			180
Adjusted net income attributable to ChinaEdu (non-GAAP)		13,379			11,765			10,359			1,516
Adjusted net margin (non-GAAP)		16.5	%		12.3	%		11.9	%		11.9	%
Adjusted net income per ADS (non-GAAP)
Basic		0.80			0.73			0.65			0.095
Diluted		0.76			0.67			0.60			0.087
Weighted average aggregate number of ordinary shares outstanding:
Basic		16,661,225			16,148,719			15,954,875			15,954,875
Diluted		17,639,683			17,589,699			17,396,275			17,396,275

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