CECO CECO Environmental Corporation

Career Education Corporation (NASDAQ:CECO) today reported fourth quarter 2008 consolidated revenue from continuing operations of $431.8 million and consolidated income from continuing operations of $34.3 million, or $0.38 per diluted share. For the full year of 2008, consolidated revenue from continuing operations was $1.705 billion and consolidated income from continuing operations was $69.6 million, or $0.77 per diluted share.

�2008 was a year of progress for our organization and I am proud of our results,� said Gary E. McCullough, president and chief executive officer. �We exceeded our 2008 earnings and cash flow objectives while executing on our fundamental strategy of positioning the company to deliver our previously communicated 2010 milestones. We entered 2009 in a very strong financial position and will continue to invest in and improve our operating model with a heightened emphasis on generating greater revenue growth."

RESULTS OF CONTINUING OPERATIONS

During the fourth quarter, we ceased operations for Brooks College � Long Beach, CA, International Academy of Design and Technology (IADT) � Pittsburgh, PA and Gibbs College � Piscataway, NJ. As a result, the results of operations for these three campuses are now included within discontinued operations. Except as otherwise noted, financial data and non-financial metrics reflected in this release exclude discontinued operations. Quarterly income statements for 2007 and 2008 reflecting this change have been provided in the exhibits section of this release.

Three Months Ended December 31, 2008

• Total revenue from continuing operations was $431.8 million during the fourth quarter of 2008, a 5.2 percent decrease from $455.3 million during the fourth quarter of 2007.
• Included in operating income for the three months ended December 31, 2008 and the three months ended December 31, 2007 are the following significant items:

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Pre-TaxExpense

(In Millions)

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DilutedEarnings perShare Impact

Income (Loss)

Three Months Ended December 31, 2008 Severance $1.6 ($0.01) Lease Exit Charges $1.9 ($0.01) Legal Settlement $3.6 ($0.03) TOTAL $7.1 ($0.05) � Three Months Ended December 31, 2007 Legal Settlements $6.5 ($0.05) Impairment Charges $28.2 ($0.19) TOTAL $34.7 ($0.24)

• Operating income was $43.5 million during the fourth quarter of 2008, an increase from $16.1 million of operating income during the fourth quarter of 2007. Operating margin percentage was 10.1 percent during the fourth quarter of 2008, a 6.6 percentage point increase relative to an operating profit margin percentage of 3.5 percent during the fourth quarter of 2007.
• Income from continuing operations was $34.3 million, or $0.38 per diluted share, during the fourth quarter of 2008, compared to income from continuing operations of $19.1 million, or $0.21 per diluted share, during the fourth quarter of 2007. The fourth quarter of 2008 results from continuing operations include a $3.0 million, or $0.02 per diluted share, foreign currency transaction gain.

Twelve Months Ended December 31, 2008

• Total revenue from continuing operations was $1.705 billion during the twelve months ended December 31, 2008, relative to $1.747 billion during the twelve months ended December 31, 2007.
• Included in operating income for the twelve months ended December 31, 2008 and the twelve months ended December 31, 2007 are the following significant items:

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Pre-TaxExpense

(In Millions)

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DilutedEarnings perShare Impact

Income (Loss)

Twelve Months Ended December 31, 2008 Severance/Stay Bonuses $14.1 ($0.10) Lease Exit Charges $12.8 ($0.09) Impairment Charges $9.0 ($0.06) Legal Settlements, net $6.3 ($0.04) TOTAL $42.2 ($0.29) � Twelve Months Ended December 31, 2007 Severance $1.7 ($0.01) Legal Settlements $15.4 ($0.10) Impairment Charges $28.2 ($0.19) TOTAL $45.3 ($0.30)

• Operating income declined to $77.7 million during the twelve months ended December 31, 2008, from $89.4 million during the twelve months ended December 31, 2007. Operating margin percentage decreased to 4.6 percent during the twelve months ended December 31, 2008, from 5.1 percent during the twelve months ended December 31, 2007.
• Income from continuing operations during the twelve months ended December 31, 2008, was $69.6 million, or $0.77 per diluted share, relative to $77.5 million, or $0.82 per diluted share, during the twelve months ended December 31, 2007. The 2008 results from continuing operations include a $3.0 million, or $0.02 per diluted share, foreign currency transaction gain.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Cash provided by operating activities was $186.7 million during 2008, compared to cash provided by operating activities of $222.1 million during 2007.
• Capital expenditures decreased to $53.9 million during 2008, from $57.6 million during 2007. Current year capital expenditures represented 3.2 percent of total consolidated revenue.

Financial Position

• As of December 31, 2008 and December 31, 2007, cash and cash equivalents and investments totaled $508.7 million and $388.6 million, respectively.
• Days sales outstanding (DSO) were 15 days as of December 31, 2008, relatively consistent with DSO of 14 days as of December 31, 2007.

POPULATION AND NEW STUDENT START DATA

Student Population

Total student population by reportable segment as of January 31, 2009 and 2008, were as follows:

� As of January 31, � % Change 2009 � 2008 2009 vs. 2008 STUDENT POPULATION Art & Design 13,500 14,200 (5 %) Culinary Arts 9,600 10,900 (12 %) Health Education 17,600 14,700 20 % International 9,700 8,600 13 % University 45,700 41,500 10 % Subtotal 96,100 89,900 7 % Transitional Schools 1,900 7,200 (74 %) Total Student Population 98,000 97,100 1 %

ONLINE POPULATION

Art & Design 900 400 125 % University 35,400 31,500 12 % Total Online Population 36,300 31,900 14 %

New Student Starts

New student starts by reportable segment during the fourth quarter of 2008 and 2007, were as follows:

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For the three months ended December 31,

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% Change

2008 � 2007 2008 vs. 2007 NEW STUDENT STARTS Art & Design 2,410 2,640 (9 %) Culinary Arts (1) 1,050 2,430 (57 %) Health Education 4,110 3,400 21 % International 2,530 2,340 8 % University 13,940 12,410 12 % Subtotal 24,040 23,220 4 % Transitional Schools 0 1,920 NM Total New Student Starts 24,040 25,140 (4 %)

ONLINE STARTS

Art & Design 310 240 29 % University 11,920 10,500 14 % Total Online Starts 12,230 10,740 14 %

(1) In the fourth quarter 2008, Culinary had one less start period than the fourth quarter of 2007.

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on February 20, 2009 at 10:00 AM (Eastern Time). Interested parties can access the live webcast of the conference call at www.careered.com. Participants can also listen to the conference call by dialing 866-713-8563 (domestic) or 617-597-5311 (international) and citing code 11731813. 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. A replay of the call will also be available for seven days by calling 888-286-8010 (domestic) or 617-801-6888 (international) and citing code 11900406.

About Career Education Corporation

The colleges, schools, and universities that are part of the Career Education Corporation (CEC) family offer high quality education to a diverse population of approximately 90,000 students across the world in a variety of career-oriented disciplines. The more than 75 campuses that serve these students are located throughout the U.S. and in France, Italy, and the United Kingdom, and offer doctoral, master's, bachelor's, and associate degrees and diploma and certificate programs. Approximately one-third of its students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online.

CEC is an industry leader whose gold-standard brands are recognized globally. Those brands include, among others, the Le Cordon Bleu Schools North America; Harrington College of Design; Brooks Institute; International Academy of Design & Technology; American InterContinental University; Colorado Technical University and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing quality education, enabling students to graduate and pursue rewarding careers.

For more information, see the company�s website at www.careered.com. The company's website includes a detailed listing of individual campus locations and web links to its more than 75 colleges, schools, and universities.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as "anticipate," "believe," "plan," "expect," "intend," "project," "will," and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, 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 to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: the adverse impact and potential impacts on the availability of Title IV and private student loans for our students of (1) the willingness or ability of private lenders to make private student loans in the current U.S. credit markets, (2) new student lending related reporting and disclosure obligations on institutions that participate in Title IV federal student financial aid programs under The Higher Education Opportunity Act (�HEOA�), signed into law on August 14, 2008, in the first full reauthorization of the Higher Education Act of 1965, as amended, and (3) pending regulations under HEOA and Congress� willingness or ability to maintain or increase funding for Title IV programs; potential higher bad debt expense or reduced revenue associated with requiring students to pay more of their educational expenses while in school or with directly making student loans to our students; increased competition; the effectiveness of our regulatory compliance efforts; impairment of goodwill and other intangible assets as we continue to redefine the company and manage our brands and marketing to improve effectiveness and reduce costs; charges and expenses associated with exiting excess facility space, centralizing various functional areas, such as human resources and financial aid, and continuing to align the SBUs and corporate staff to remove layers, overlaps and redundancies; the impact on our revenues and profitability of our transitional segment; our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; our dependence on information technology system; our ownership or use of intellectual property ; costs and impacts of legal and administrative proceedings and investigations, governmental regulations, and class action and other lawsuits; costs and difficulties related to the integration of acquired businesses; our ability to manage and continue growth; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2007 and December 31, 2008, and from time to time in our quarterly and current reports filed with the Securities and Exchange Commission.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands) � As of December 31, 2008

2007(1)

� ASSETS CURRENT ASSETS: Cash and cash equivalents $ 244,743 $ 221,970 Investments 263,953 � 166,618 � Total cash and cash equivalents and investments 508,696 388,588 Receivables: Students, net of allowance for doubtful accounts of $35,226 and $35,151 as of December 31, 2008, and December 31, 2007, respectively 59,119 59,072 Other, net 9,191 8,942 Prepaid expenses 46,416 49,732 Inventories 12,352 15,309 Deferred income tax assets 17,472 17,419 Other current assets 9,223 14,456 Assets of discontinued operations 5,003 � 31,170 � Total current assets 667,472 � 584,688 � NON-CURRENT ASSETS: Property and equipment, net 304,970 335,949 Goodwill 376,072 379,363 Intangible assets, net 39,904 44,395 Deferred income tax assets 11,440 12,832 Other assets, net 17,465 � 20,555 � TOTAL ASSETS $ 1,417,323 � $ 1,377,782 � � LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt and capital lease obligations $ 354 $ 11,843 Accounts payable 28,450 27,601 Accrued expenses: Payroll and related benefits 63,757 33,119 Advertising and production costs 21,504 21,738 Income taxes 29,224 31,497 Other 49,526 75,788 Deferred tuition revenue 153,727 158,845 Liabilities of discontinued operations 8,753 � 15,472 � Total current liabilities 355,295 � 375,903 � � NON-CURRENT LIABILITIES: Long-term debt and capital lease obligations, net of current maturities 1,889 2,179 Deferred rent obligations 97,644 97,504 Other liabilities 13,983 � 4,473 � Total non-current liabilities 113,516 � 104,156 � � SHARE-BASED AWARDS SUBJECT TO REDEMPTION 860 11,615 � STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 933 930 Additional paid-in capital 222,523 207,294 Accumulated other comprehensive income 5,774 16,304 Retained earnings 807,500 736,603 Cost of shares in treasury (89,078 ) (75,023 ) Total stockholders' equity 947,652 � 886,108 � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,417,323 � $ 1,377,782 � � � � � � � (1 ) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations. � CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts and percentages) � � � � � For the Three Months Ended December 31, % of % of 2008 Revenue

2007(1)

Revenue � REVENUE: Tuition and registration fees $ 416,904 96.6 % $ 435,263 95.6 % Other 14,863 � 3.4 % 20,021 � 4.4 % Total revenue 431,767 � 455,284 � � OPERATING EXPENSES: Educational services and facilities 158,673 36.7 % 166,525 36.6 % General and administrative 212,145 49.1 % 226,021 49.6 % Depreciation and amortization 17,483 4.0 % 18,405 4.0 % Goodwill and asset impairment - � 0.0 % 28,226 � 6.2 % Total operating expenses 388,301 � 89.9 % 439,177 � 96.5 % Operating income 43,466 � 10.1 % 16,107 � 3.5 % � OTHER INCOME (EXPENSE): Interest income 4,448 1.0 % 5,702 1.3 % Interest expense (167 ) 0.0 % (285 ) -0.1 % Share of affiliate earnings - 0.0 % 1,865 0.4 % Miscellaneous income (expense) 2,404 � 0.6 % (35 ) 0.0 % Total other income 6,685 � 1.5 % 7,247 � 1.6 % � Pretax income 50,151 11.6 % 23,354 5.1 % � Provision for income taxes 15,820 � 3.7 % 4,238 � 0.9 % � Income from continuing operations 34,331 8.0 % 19,116 4.2 % � Loss from discontinued operations, net of tax (3,117 ) $ (10,287 ) � NET INCOME $ 31,214 � $ 8,829 � � NET INCOME (LOSS) PER SHARE - DILUTED Income from continuing operations $ 0.38 $ 0.21 Loss from discontinued operations (0.03 ) (0.11 ) Net income $ 0.35 � $ 0.10 � � DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 89,918 � 92,412 � � (1 ) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts and percentages) � � � � � For the Twelve Months Ended December 31, % of % of 2008 Revenue

2007(1)

Revenue � REVENUE: Tuition and registration fees $ 1,636,750 96.0 % $ 1,666,828 95.4 % Other 68,601 � 4.0 % 80,602 � 4.6 % Total revenue 1,705,351 � 1,747,430 � � OPERATING EXPENSES: Educational services and facilities 654,288 38.4 % 636,469 36.4 % General and administrative 889,250 52.1 % 919,786 52.6 % Depreciation and amortization 75,132 4.4 % 73,595 4.2 % Goodwill and asset impairment 9,013 � 0.5 % 28,226 � 1.6 % Total operating expenses 1,627,683 � 95.4 % 1,658,076 � 94.9 % Operating income 77,668 � 4.6 % 89,354 � 5.1 % � OTHER INCOME (EXPENSE): Interest income 13,774 0.8 % 18,489 1.1 % Interest expense (870 ) -0.1 % (1,163 ) -0.1 % Share of affiliate earnings 4,665 0.3 % 4,735 0.3 % Miscellaneous income 1,909 � 0.1 % 750 � 0.0 % Total other income 19,478 � 1.1 % 22,811 � 1.3 % � Pretax income 97,146 5.7 % 112,165 6.4 % � Provision for income taxes 27,570 � 1.6 % 34,681 � 2.0 % � Income from continuing operations 69,576 4.1 % 77,484 4.4 % � Loss from discontinued operations, net of tax (9,434 ) (17,931 ) � NET INCOME $ 60,142 � $ 59,553 � � NET INCOME (LOSS) PER SHARE - DILUTED Income from continuing operations $ 0.77 $ 0.82 Loss from discontinued operations (0.10 ) (0.19 ) Net income $ 0.67 � $ 0.63 � � DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 90,089 � 94,407 � � � (1 ) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) � � � � � � For the Twelve Months Ended December 31, 2008 2007 � CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 60,142 $ 59,553 Adjustments to reconcile net income to net cash provided by operating activities: Goodwill and asset impairment 13,600 36,765 Depreciation and amortization expense 77,688 78,183 Bad debt expense 44,278 46,619 Compensation expense related to share-based awards 11,522 15,504 Gain on sale of business (1,555 ) - Loss (gain) on disposition of property and equipment 573 (124 ) Share of affiliate earnings, net of cash received 939 (2,791 ) Deferred income taxes (749 ) (14,981 ) Other - 301 Changes in operating assets and liabilities (19,718 ) 3,046 � Net cash provided by operating activities 186,720 � 222,075 � � CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (580,970 ) (644,977 ) Sales of available-for-sale investments 483,635 740,108 Purchases of property and equipment (53,854 ) (57,586 ) Business acquisitions, net of acquired cash - (32,308 ) Other 402 � (424 ) Net cash (used in) provided by investing activities (150,787 ) 4,813 � � CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (14,055 ) (224,264 ) Issuance of common stock 3,239 34,486 Tax benefit associated with stock option exercises 471 5,945 Payments on revolving loans (10,113 ) (1,297 ) Payments of capital lease obligations and other long-term debt (590 ) (588 ) Net cash used in financing activities (21,048 ) (185,718 ) � � EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: (7,732 ) 6,717 � � NET INCREASE IN CASH AND CASH EQUIVALENTS 7,153 47,887 Add: Cash balance of discontinued operations, beginning of the year 15,735 14,216 Less: Cash balance of discontinued operations, end of the year 115 15,735 CASH AND CASH EQUIVALENTS, beginning of the year 221,970 � 175,602 � CASH AND CASH EQUIVALENTS, end of the year $ 244,743 � $ 221,970 � CAREER EDUCATION CORPORATION SELECTED SEGMENT INFORMATION (Dollars in thousands) � � � � For the Three Months Ended December 31,

2008

2007(1)

� REVENUE: University $ 176,982 $ 172,893 Culinary Arts 77,287 94,046 Health Education 64,426 54,331 Art & Design 67,501 73,064 International 35,686 � 32,585 � Subtotal $ 421,882 $ 426,919 Transitional Schools 9,884 28,357 Corporate and other 1 � 8 � Total revenue $ 431,767 � $ 455,284 � � SEGMENT OPERATING INCOME (LOSS): University $ 42,949 $ 26,468 Culinary Arts (588 ) 15,012 Health Education 10,368 (2,637 ) Art & Design 9,052 13,942 International 8,106 � 9,447 � Subtotal $ 69,887 $ 62,232 Transitional Schools (7,485 ) (33,114 ) Corporate and other (18,936 ) (13,011 ) Total operating income $ 43,466 � $ 16,107 � � SEGMENT OPERATING INCOME (LOSS) PERCENTAGE: University 24.3 % 15.3 % Culinary Arts -0.8 % 16.0 % Health Education 16.1 % -4.9 % Art & Design 13.4 % 19.1 % International 22.7 % 29.0 % Transitional Schools -75.7 % -116.8 % � � � � � � � � � (1 )

Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations.

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CAREER EDUCATION CORPORATION SELECTED SEGMENT INFORMATION (Dollars in thousands) � � � � For the Twelve Months Ended December 31, 2008

2007(1)

� REVENUE: University $ 702,347 $ 703,639 Culinary Arts 328,313 365,789 Health Education 235,546 206,700 Art & Design 263,715 275,392 International 107,558 � 81,907 � Subtotal $ 1,637,479 $ 1,633,427 Transitional Schools 67,863 113,856 Corporate and other 9 � 147 � Total revenue $ 1,705,351 � $ 1,747,430 � � SEGMENT OPERATING INCOME (LOSS): University $ 122,757 $ 102,371 Culinary Arts (2) (5,908 ) 49,133 Health Education 22,559 6,425 Art & Design 28,057 32,499 International 18,860 � 13,024 � Subtotal $ 186,325 $ 203,452 Transitional Schools (38,837 ) (61,646 ) Corporate and other (69,820 ) (52,452 ) Total operating income $ 77,668 � $ 89,354 � � SEGMENT OPERATING INCOME (LOSS) PERCENTAGE: University 17.5 % 14.5 % Culinary Arts (2) -1.8 % 13.4 % Health Education 9.6 % 3.1 % Art & Design 10.6 % 11.8 % International 17.5 % 15.9 % Transitional Schools -57.2 % -54.1 % � � � � � � � � � (1 ) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations. � (2 ) Culinary Arts 2008 operating loss includes pretax charges of $22.8 million. Pretax charges related to the following: $15.2 million in lease exit charges and related asset impairment charges associated with the exit of a dormitory and other facility and a $7.6 million charge associated with the settlement of a legal matter. CAREER EDUCATION CORPORATION SELECTED SEGMENT START-UP INFORMATION (In thousands) � � � � � �

For the Three Months Ended December 31,

For the Twelve Months Ended December 31, 2008 2007 2008 2007 � REVENUE: Culinary Arts (1) $ 2,294 $ - $ 4,400 $ - Health Education (2) - � - � - � - � $ 2,294 � $ - � $ 4,400 � $ - � � SEGMENT OPERATING LOSS: Culinary Arts (1) $ (2,335 ) $ (1,317 ) $ (9,001 ) $ (3,845 ) Health Education (2) (211 ) - � (806 ) - � $ (2,546 ) $ (1,317 ) $ (9,807 ) $ (3,845 ) � � � � � � � � � � � � �

(1

)

For the three and twelve months ended December 31, 2008 and 2007, Culinary Arts start-up campuses include LCB-Boston, MA, St. Louis, MO and Kitchen Academy-Seattle, WA. �

(2

)

For the three and twelve months ended December 31, 2008, Health Education start-up campuses include SBI-San Antonio, TX. CAREER EDUCATION CORPORATION SELECTED UNIVERSITY SEGMENT INFORMATION (Dollars in thousands) � � � � � � For the Three Months Ended December 31, For the Twelve Months Ended December 31, 2008

2007(1)

2008

2007(1)

� UNIVERSITY REVENUE: AIU Online $ 68,936 $ 65,715 $ 298,279 $ 311,321 Onground 18,500 21,931 76,418 88,398 CTU Online 65,068 59,572 240,652 216,432 Onground 14,509 13,448 53,758 50,533 Briarcliffe 9,969 � 12,227 � 33,240 � 36,955 � University $ 176,982 � $ 172,893 � $ 702,347 � $ 703,639 � � UNIVERSITY SEGMENT OPERATING INCOME (LOSS): AIU Online $ 20,999 $ 9,752 $ 73,041 $ 74,361 Onground (2,470 ) (3,133 ) (14,124 ) (16,262 ) CTU Online 22,378 17,269 63,419 44,006 Onground 593 1,087 (365 ) 161 Briarcliffe 1,449 � 1,493 � 786 � 105 � University $ 42,949 � $ 26,468 � $ 122,757 � $ 102,371 � � UNIVERSITY SEGMENT OPERATING INCOME (LOSS) PERCENTAGE: AIU Online 30.5 % 14.8 % 24.5 % 23.9 % Onground -13.4 % -14.3 % -18.5 % -18.4 % CTU Online 34.4 % 29.0 % 26.4 % 20.3 % Onground 4.1 % 8.1 % -0.7 % 0.3 % Briarcliffe 14.5 % 12.2 % 2.4 % 0.3 % University 24.3 % 15.3 % 17.5 % 14.5 % � � Student Population as of January 31, 2009 2008 AIU Online 16,800 15,500 Onground 3,800 3,800 CTU Online 18,600 16,000 Onground 4,900 4,300 Briarcliffe 1,600 � 1,900 � University 45,700 � 41,500 � � � Student Starts for the year ended December 31, 2008 2007 AIU Online 23,400 22,500 Onground 3,100 3,300 CTU Online 24,100 21,800 Onground 3,700 3,300 Briarcliffe 1,200 � 1,300 � University 55,500 � 52,200 � � � � � � � � � � � � � (1 ) Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR 2008 (In thousands, except per share amounts) � � � � � �

For the Three Months Ended (1)

� March 31 June 30 September 30 December 31 Total 2008 � REVENUE: Tuition and registration fees $ 432,051 $ 402,905 $ 384,890 $ 416,904 $ 1,636,750 Other 19,833 � 14,144 � 19,761 � 14,863 � 68,601 � Total revenue 451,884 � 417,049 � 404,651 � 431,767 � 1,705,351 � � OPERATING EXPENSES: Educational services and facilities 166,648 160,420 168,547 158,673 654,288 General and administrative 238,625 220,982 217,498 212,145 889,250 Depreciation and amortization 20,215 18,727 18,707 17,483 75,132 Goodwill and asset impairment 2,170 � - � 6,843 � - � 9,013 � Total operating expenses 427,658 � 400,129 � 411,595 � 388,301 � 1,627,683 � Operating income (loss) 24,226 � 16,920 � (6,944 ) 43,466 � 77,668 � � OTHER INCOME (EXPENSE): Interest income 3,433 3,018 2,875 4,448 13,774 Interest expense (227 ) (265 ) (211 ) (167 ) (870 ) Share of affiliate earnings 4,665 - - - 4,665 Miscellaneous (expense) income (191 ) (84 ) (220 ) 2,404 � 1,909 � Total other income, net 7,680 � 2,669 � 2,444 � 6,685 � 19,478 � �

Pretax income (loss)

31,906 19,589 (4,500 ) 50,151 97,146 � Provision (benefit) for income taxes 10,535 � 6,752 � (5,537 ) 15,820 � 27,570 � � Income from continuing operations 21,371 12,837 1,037 34,331 69,576 � Loss from discontinued operations, net of tax (4,987 ) $ (146 ) (1,184 ) (3,117 ) (9,434 ) � NET INCOME (LOSS) $ 16,384 � $ 12,691 � $ (147 ) $ 31,214 � $ 60,142 � � NET INCOME (LOSS) PER SHARE - DILUTED Income from continuing operations $ 0.24 $ 0.14 $ 0.01 $ 0.38 $ 0.77 Loss from discontinued operations (0.06 ) (0.00 ) (0.01 ) $ (0.03 ) $ (0.10 ) Net income $ 0.18 � $ 0.14 � $ - � $ 0.35 � $ 0.67 � � DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 90,289 � 89,905 � 89,675 � 89,918 � 90,089 � � (1 ) Financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR 2007 (In thousands, except per share amounts) � � � � � � For the Three Months Ended (1) � March 31 June 30 September 30 December 31 Total 2007 � REVENUE: Tuition and registration fees $ 426,883 $ 406,576 $ 398,106 $ 435,263 $ 1,666,828 Other 19,874 � 16,190 � 24,517 � 20,021 � 80,602 � Total revenue 446,757 � 422,766 � 422,623 � 455,284 � 1,747,430 � � OPERATING EXPENSES: Educational services and facilities 155,487 154,747 159,710 166,525 636,469 General and administrative 230,248 238,720 224,797 226,021 919,786 Depreciation and amortization 18,180 18,837 18,173 18,405 73,595 Goodwill and asset impairment - � - � - � 28,226 � 28,226 � Total operating expenses 403,915 � 412,304 � 402,680 � 439,177 � 1,658,076 � Operating income 42,842 � 10,462 � 19,943 � 16,107 � 89,354 � � OTHER INCOME (EXPENSE): Interest income 4,616 4,019 4,152 5,702 18,489 Interest expense (358 ) (178 ) (342 ) (285 ) (1,163 ) Share of affiliate earnings 1,712 949 209 1,865 4,735 Miscellaneous income (expense) 236 � 484 � 65 � (35 ) 750 � Total other income, net 6,206 � 5,274 � 4,084 � 7,247 � 22,811 � �

Pretax income

49,048 15,736 24,027 23,354 112,165 � Provision for income taxes 17,808 � 5,674 � 6,961 � 4,238 � 34,681 � � Income from continuing operations 31,240 10,062 17,066 19,116 77,484 � Loss from discontinued operations, net of tax (1,202 ) $ (4,937 ) (1,505 ) (10,287 ) (17,931 ) � NET INCOME $ 30,038 � $ 5,125 � $ 15,561 � $ 8,829 � $ 59,553 � � NET INCOME (LOSS) PER SHARE - DILUTED Income from continuing operations $ 0.32 $ 0.11 $ 0.18 $ 0.21 $ 0.82 Loss from discontinued operations $ (0.01 ) $ (0.06 ) $ (0.01 ) $ (0.11 ) $ (0.19 ) Net income $ 0.31 � $ 0.05 � $ 0.17 � $ 0.10 � $ 0.63 � � DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 96,798 � 94,659 � 93,455 � 92,412 � 94,407 � � (1 ) Financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Gibbs College - Piscataway, NJ as discontinued operations.