Career Education Corporation (NASDAQ: CECO) today reported total revenue of $439.5 million, and a net loss of $120.4 million, or ($1.64) per diluted share, for the fourth quarter of 2011 compared to total revenue of $531.6 million and net income of $12.1 million, or $0.15 per diluted share, for the fourth quarter of 2010. For the full year 2011, total revenue of $1.88 billion, and net income of $18.6 million, or $0.25 per diluted share decreased from total revenue of $2.09 billion and net income of $157.8 million, or $1.95 per diluted share, for the full year 2010.

“In the past four months, we have taken steps to help move the company forward,” President, Chairman and CEO Steven H. Lesnik said. “The company-wide independent review into our placement rate practices, ordered by our Board of Directors, has been completed. We have reported to accreditors what we should; implemented extensive corrective measures to address any issues found; and have now closed the door on the review.”

“While we expect a challenging business and reputational year ahead, we have put a new strategy in place to deal with our current challenges and position ourselves for success beyond 2012. It’s time for Career Education to reinvent itself for the future and resume a leadership position in higher education,” Lesnik said.

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 core business. On a non-GAAP basis, earnings per diluted share from continuing operations were $0.31 in the fourth quarter 2011 as compared to $0.74 in the fourth quarter of 2010. For the years ended December 31, 2011 and 2010, earnings per diluted share from continuing operations (non-GAAP basis) were $2.16 and $2.89, respectively. (See tables below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

CONSOLIDATED RESULTS

Quarter Ended December 31, 2011

• Total revenue was $439.5 million for the fourth quarter of 2011, a 17.3 percent decrease from $531.6 million for the fourth quarter of 2010.
• An operating loss of $168.9 million was recorded for the fourth quarter of 2011, compared to operating income of $18.2 million for the fourth quarter of 2010.
• The loss from continuing operations for the quarter ended December 31, 2011 was $142.3 million, or ($1.94) per diluted share, compared to income from continuing operations of $14.1 million, or $0.18 per diluted share, for the quarter ended December 31, 2010.
• During the fourth quarter of 2011, the Company recorded a $27.1 million pretax gain in connection with the sale of its ownership interest in Istituto Marangoni. All current and prior period results have been recast to include the results of operations for Istituto Marangoni as a component of discontinued operations.

• The operating results for the quarters ended December 31, 2011 and 2010 include the following significant items:

• During the fourth quarter 2011, the Company recorded goodwill impairment charges of $94.7 million and $73.7 million in its Health Education and Culinary Arts segments, respectively. In addition, the Company recorded $20.4 million and $67.8 million of trade name impairment charges in 2011 and 2010, respectively. Both trade name impairment charges relate to the Le Cordon Bleu trade name. These impairments were a result of the fair value calculation for each declining below their respective carrying values.
• Excluding the significant items in the table above, operating income was $19.9 million in the fourth quarter 2011 compared to $86.8 million in the fourth quarter of 2010. The operating margin was 4.5 percent during the fourth quarter 2011 as compared to 16.3 percent during the fourth quarter 2010.

Year Ended December 31, 2011

• Total revenue was $1.88 billion for the year ended December 31, 2011, compared to $2.09 billion for the year ended December 31, 2010.
• Operating income decreased to $39.2 million for the year ended December 31, 2011, from $240.9 million for the year ended December 31, 2010. The operating margin decreased to 2.1 percent for the year ended December 31, 2011, from 11.5 percent for the year ended December 31, 2010.
• The loss from continuing operations for the year ended December 31, 2011, was $4.2 million, or ($0.06) per diluted share, compared to income from continuing operations of $162.8 million, or $2.01 per diluted share, for the year ended December 31, 2010.

• The operating results for the years ended December 31, 2011 and 2010 include the following significant items:

• During 2010, Culinary Arts recorded a $40.8 million charge related to the settlement of a legal matter.
• Excluding the significant items in the table above, operating income was $228.0 million for the year ended December 31, 2011 and $349.5 million for the year ended December 31, 2010. Operating margin was 12.1 percent and 16.7 percent for the years ended December 31, 2011 and 2010, respectively.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Net cash flows provided by operating activities totaled $230.5 million for the year ended December 31, 2011, compared to $272.3 million for the year ended December 31, 2010.
• Capital expenditures decreased to $78.3 million during the year ended December 31, 2011, from $127.3 million for the year ended December 31, 2010. Capital expenditures decreased to 4.1 percent of total revenue during the year ended December 31, 2011 as compared to 6.0 percent for the year ended December 31, 2010 due to the investments made in the Company’s campus support center in 2010.

Financial Position

• As of December 31, 2011 and December 31, 2010, cash and cash equivalents and short-term investments totaled $441.2 million and $420.3 million, respectively.

Stock Repurchase Program

During the quarter ended December 31, 2011, the Company repurchased 1.8 million shares of its common stock for approximately $13.4 million at an average price of $7.41 per share. During 2011, the Company repurchased approximately 8.1 million shares of its common stock for approximately $150.4 million at an average price of $18.67 per share. Under the Company’s previously authorized stock repurchase program, stock repurchases may be made on the open market or in privately negotiated transactions from time to time, depending on factors including market conditions and corporate and regulatory requirements. As of December 31, 2011, approximately $239.8 million was available under the Company’s stock repurchase program.

During January 2012, the Company repurchased an additional 6.1 million shares of its common stock for $56.4 million at an average price of $9.29 per share through the Company’s 10b5-1 repurchase program announced by the Company on November 21, 2011. As a result, approximately $183.3 million was available under our previously authorized stock repurchase program to repurchase outstanding shares of our common stock as of January 31, 2012.

STUDENT POPULATION AND NEW STUDENT STARTS

Student Population

Total student population by reportable segment as of December 31, 2011 and 2010, was as follows:

New Student Starts

New student starts by reportable segment for the quarters ended December 31, 2011 and 2010, were as follows:

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Tuesday, February 28, 2012 at 10:00 a.m. Eastern time. In addition to discussing the results of operations for the fourth quarter and year-to-date, the Company will address the status of the independent review of student placement rates and other regulatory matters, including the 90-10 Rule, on its conference call.

Interested parties can access the live webcast of the conference call at www.careered.com in the Investor Relations section of the website. Participants can also listen to the conference call by dialing 800-580-9478 (domestic) or 630-691-2769 (international) and citing code 31668922. 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. A replay of the call will also be available for seven days by calling 888-843-7419 (domestic) or 630-652-3042 (international) and citing code 31668922.

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 student population of approximately 100,000 students across the world in a variety of career-oriented disciplines through online, on-ground and hybrid learning program offerings. The more than 90 campuses that serve these students are located throughout the United States and in France, the United Kingdom and Monaco, and offer doctoral, master’s, bachelor’s and associate degrees and diploma and certificate programs.

CEC is an industry leader whose institutions are recognized globally. Those institutions include, among others, American InterContinental University (“AIU”); Brooks Institute; Colorado Technical University (“CTU”); Harrington College of Design; INSEEC Group (“INSEEC”) Schools; International University of Monaco (“IUM”); International Academy of Design & Technology (“IADT”); Le Cordon Bleu North America (“LCB”); and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing high-quality education, enabling students to graduate and pursue rewarding career opportunities.

For more information, see CEC’s website at www.careered.com. The website includes a detailed listing of individual campus locations and web links to CEC’s 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,” “potential” 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, 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 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 outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: availability of Title IV and other student financial aid or loans for our students; Congress’ willingness or ability to maintain or increase funding for Title IV Programs; our ability to maintain continued eligibility to participate in Title IV Programs, including under the “90-10 Rule” under the Higher Education Act of 1965, as amended; the impacts of the U.S. Department of Education’s regulations addressing certain aspects of administration ofTitle IV federal financial aid programs, (including among other matters, gainful employment, the 90-10 Rule and limits on cohort default rates, certain compensation related to recruiting and admission of students, more stringent state approval criteria that may affect current state approval and licensing processes applicable to postsecondary education institutions and distance learning programs, and misrepresentation liability) on our business model, marketing strategies and practices, costs of compliance, costs of developing and implementing changes in operations, student recruitment or enrollments, student and program mix and program offerings; increased competition; other regulatory developments; the effectiveness of our regulatory compliance efforts; the outcome of any state attorney general investigations, including those under way in Florida, Illinois and New York; any claims, sanctions, operational limitations or adverse accreditation or regulatory action initiated as a result of any adverse findings from our investigation into the determination and reporting of placement rates at our domestic schools; our ability to successfully attract and retain qualified personnel to fill key senior management positions, including the positions of president and chief executive officer; changes in the overall U.S. or global economy; any further 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; our ability to comply with accrediting agency requirements or obtain accrediting agency approvals for existing or new programs; the outcome of any reviews and audits conducted by accrediting, state and federal agencies; our dependence on information technology systems; our ownership or use of intellectual property; costs and impacts of regulatory, legal and administrative actions, proceedings and investigations, governmental regulation, and class action and other lawsuits; our ability to manage growth; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2011, and from time to time in our current reports filed with the Securities and Exchange Commission.