Career Education Corporation Reports Results for 2004 Fourth Quarter a

Career Education Corporation Reports Results for 2004 Fourth Quarter and Year-End

    Business Editors

    HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--Feb. 15, 2005--Career Education Corporation (Nasdaq:CECO) today reported financial results for the fourth quarter and year ended December 31, 2004. The company noted that its results include an adjustment related to an increase in the estimate for its allowance for doubtful accounts and a restatement for a change in revenue recognition method for its Culinary and Healthcare externships. Additionally, the company provided updated information concerning the ongoing independent investigation being conducted by the special committee of its Board of Directors.

    Significant Items

    In connection with reporting its results for the fourth quarter of 2004, the company increased its estimate for its allowance for doubtful accounts. The company periodically evaluates its receivables and establishes the allowance for doubtful accounts based on methodologies and assumptions, which the company reviews and modifies based on emerging information. The company recently analyzed its receivables collection rates together with changes in financial aid funding sources and improved analytical tools, and determined it should increase its estimate for its allowance for doubtful accounts.
    As a result, the company recorded a non-cash, pre-tax charge for the change in accounting estimate of its allowance for doubtful accounts of approximately $18.9 million in the fourth quarter of 2004. This change in estimate does not affect prior period financial statements. This additional charge, included in General and Administrative expense, less the related tax benefit of $7.6 million, represented $0.11 per diluted share in the quarter. The bad debt expense, excluding the charge related to the change in accounting estimate, was 4.5% of total revenue for the quarter ended December 31, 2004.
    In addition, the company changed its method of revenue recognition related to its Culinary and Health Education externships. These student externships are required to be taken at the end of certain academic programs, following the conclusion of in-school instruction, in order to satisfy graduation requirements. The new revenue recognition method recognizes tuition revenue through the end of the student's externship period, while the prior practice recognized revenue only over the period of in-school academic instruction. This change, as shown in the attached financial tables, results in a restatement of the company's financial statements for 2000 through 2004. The full-year and fourth quarter 2004 restatement resulted in a non-cash reduction of $11.5 million and $3.4 million in revenue and $0.06 and $0.02 per diluted share after taxes, respectively. This revenue will be earned and recognized in subsequent periods net of student refunds. The company noted that the restatement does not materially affect year-over-year growth percentages or trends for revenue and earnings per share as prior-period results have been restated to reflect this change.

    Three Months Ended December 31

--	Fourth quarter 2004 total revenue increased 33% to $485.9 million from a restated $366.7 million for the same period last year. The increase in revenue is primarily attributable to a 30% increase in same-school revenue driven by an increase in same-school population (21.5% increase at October 31st) and an approximate 8% increase in average revenue per student during the fourth quarter.
--	Net income was $59.8 million, or $0.57 per diluted share, up 18% from last year's fourth quarter restated net income of $50.7 million, or $0.49 per diluted share. Fourth quarter 2004 net income includes the following items:

(In millions, except per Quarterly Quarterly Quarterly Quarterly share data) Earnings Income Net Diluted Before Taxes Income Earnings Income Per Share Taxes ---------------------------------------------------------------------- Allowance for Doubtful Accounts Change in Estimate ($18.9) $7.6 ($11.3) ($0.11) ---------------------------------------------------------------------- Externship Revenue Recognition Restatement ($3.4) $1.4 ($2.0) ($0.02) ---------------------------------------------------------------------- Certain Legal Fees ($4.9) $2.0 ($2.9) ($0.03) ---------------------------------------------------------------------- Self-funded Employee Benefits Plan Charge ($2.2) $0.9 ($1.3) ($0.01) ---------------------------------------------------------------------- Lower Effective Tax Rate n/a $3.0 $3.0 $0.03 ---------------------------------------------------------------------- Total ($29.4) $14.9 ($14.5) ($0.14) ----------------------------------------------------------------------

--	Approximately $18.9 million of pre-tax General and Administrative expense is related to the aforementioned increase in the allowance for doubtful accounts.
--	Approximately $3.4 million of pre-tax revenue reduction is related to the aforementioned restatement for the externship revenue.
--	Approximately $4.9 million of pre-tax legal and other expenses related to the SEC investigation, investigation being conducted by the special committee of the Board of Directors, and shareholder class action and derivative lawsuits.
--	Approximately $2.2 million of pre-tax expense is related to CEC's self-funded medical and dental plan. The company adjusted its year-end accrual as actual costs were higher than previously anticipated for 2004, the first year these plans were self-funded.
--	Approximately $3.0 million of income is related to a reduction on our effective tax rate from 40.25% to 39.25%. The lower tax rate was driven by a reduction in the company's state income taxes and tax free investment earnings. The effective state income tax rate was reduced by the mix of earnings and various state tax credits generated.

    Twelve Months Ended December 31

    -- Full year 2004 revenues increased 47% to $1.73 billion from
    $1.18 billion for the same period last year, after reflecting
    the externship revenue recognition restatement. The increase
    in revenue is primarily attributable to a 33% increase in
    same-school revenue driven by an approximate average 25%
    increase in same-school population for the period and an
    approximate 4% increase in average revenue per student during
    the year.

    -- Net income was $179.6 million, or $1.71 per diluted share, up
    61% from $111.9 million, or $1.11 per diluted share, after
    adjusting for the 2-for-1 stock split effected in August 2003
    and the externship revenue recognition restatement. Full year
    2004 net income includes the following items:

(In millions, except per Annual Annual Annual Annual share data) Earnings Income Net Diluted Before Taxes Income Earnings Income Per Share Taxes ---------------------------------------------------------------------- Allowance for Doubtful Accounts Change in Estimate ($18.9) $7.6 ($11.3) ($0.11) ---------------------------------------------------------------------- Externship Revenue Recognition Restatement ($11.2) $4.5 ($6.7) ($0.06) ---------------------------------------------------------------------- Certain Legal Fees ($11.4) $4.6 ($6.8) ($0.07) ---------------------------------------------------------------------- Lower Effective Tax Rate n/a $3.0 $3.0 $0.03 ---------------------------------------------------------------------- Total ($41.5) $19.7 ($21.8) ($0.21) ----------------------------------------------------------------------

    Balance Sheet and Cash Flow

--	At December 31, 2004, we had cash and cash equivalents of $348.1 million, compared with $161.2 million on September 30, 2004. Short-term and long-term debt as of December 31, 2004 was $23.9 million.
--	Net cash provided by operating activities for the fourth quarter of 2004 was $114.5 million compared to $113.3 million for the same period of 2003.
--	Purchases of property and equipment for the quarter were $48.8 million and for the year were $142.8 million. Purchases of property and equipment for 2004 represented approximately 8.3% of total revenues.
--	Quarterly days sales outstanding (DSOs) for total net receivables were 17 days at December 31, 2004. This represents a 9-day decrease from the quarterly DSOs at December 31, 2003 of 26 days, reflecting the revenue recognition restatement. Before the increase in the allowance of doubtful accounts, quarterly days sales outstanding (DSOs) for total net receivables were 20 days at December 31, 2004. We calculate DSOs by dividing the sum of net student receivables and net other receivables by average daily revenue. Average daily revenue is computed by dividing quarterly "total revenue" by the total number of days in the quarter.

    Population Data

    -- Total CEC student population on January 31, 2005 was
    approximately 101,500, up 21% compared with approximately
    84,100 on January 31, 2004. On a same school basis, total CEC
    student population was up approximately 19.5%.

    -- The aforementioned student population data excludes previously
    disclosed teach-outs related to the Academy division, but
    includes the effect of the restatement of the Culinary and
    Healthcare externship revenue recognition. Students
    participating in externship programs are now included in our
    student population as we are recognizing revenue through the
    end of the externship period. These externships were
    previously excluded from the company's population statistics
    as the company was not earning revenue over the student
    externship period.

    -- Total student population of CEC's Online Education Group on
    January 31, 2005 was approximately 24,900, up from
    approximately 12,200 students on January 31, 2004.

    -- Fourth quarter 2004 new student starts were approximately
    28,600.

    Information Concerning Special Committee Investigation

    -- As previously reported, our Board of Directors formed a
    special committee to conduct an independent investigation of
    allegations of securities laws violations against the company,
    including allegations relating to the company's accounting
    practices and reported statistics relating to starts, student
    population and placement. At that time, we announced that the
    special committee had retained the law firm of McDermott, Will
    & Emery LLP to represent and assist it in its review.
    Additionally, it was previously reported that by the special
    committee's direction, McDermott, Will & Emery retained
    Navigant Consulting, Inc. to assist in the investigation.
    Navigant Consulting is providing independent forensic
    accounting services in connection with the special committee's
    review of allegations relating to previously reported
    financial information and related matters. At the request of
    the special committee, Navigant reviewed the company's new
    methodology for estimating its allowance for doubtful accounts
    and found it to be reasonable. The special committee
    investigation has not yet been completed.

    Business Outlook

    While we may make further acquisitions, none are contemplated by these forward-looking statements.

    -- We expect full year 2005 revenues to be approximately $2.1
    billion and full year 2005 earnings per share to be
    approximately $2.27. Our full year earnings expectations
    include an approximate $0.05 per share impact for the effect
    of the externship revenue recognition change. Additionally,
    the earnings expectations include higher costs for legal and
    regulatory matters.

    -- We expect the Online Education Group's full year 2005
    revenues, included in the preceding amounts, to be
    approximately $600 million.

    -- We expect full year 2005 operating profit margin improvement
    to be approximately 150 basis points.

    -- We expect first quarter 2005 revenues to be approximately $500
    million and first quarter 2005 earnings per share to be
    approximately $0.51. We expect diluted weighted average shares
    outstanding to be approximately 105 million for first quarter
    2005.

    -- We expect bad debt levels to be approximately 5% of total
    revenue for 2005.

    -- We expect our 2005 effective income tax rate will be
    approximately 39.25%.

    -- We expect that 2005 capital expenditures will be approximately
    7.5% of total revenue.

    Conference Call Information

    -- Career Education Corporation will host a conference call today
    at 5:30 PM (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
    (617) 614-3673 (international) or (800) 261-3417 (domestic)
    and citing code 84473011. Please log-in or dial-in at least 10
    minutes prior to the start time to ensure a connection. After
    7:30 PM (Eastern Time) the same day, 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 (617) 801-6888 and citing code
    75236285.

    Career Education Corporation (www.careered.com) is the world's largest on-campus provider of private, for-profit, postsecondary education and has a rapidly-growing presence in online education. CEC's Colleges, Schools and Universities Group operates 82 campuses in the U.S., Canada, France, the United Kingdom and the United Arab Emirates and offers doctoral degree, master's degree, bachelor's degree, associate degree and diploma programs in the career-oriented disciplines of visual communication and design technologies, information technology, business studies, culinary arts and health education. The Online Education Group operates American InterContinental University Online and Colorado Technical University Online and offers a variety of degrees in information technology, business, visual communication and education. CEC's total student population on January 31, 2005 was approximately 101,500 students.

    Except for the historical and present factual information contained herein, the matters set forth in this release, including statements under "Business Outlook" and statements identified by words such as "anticipates," "expects," "projects," "plans," "will," and similar expressions, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on information currently available to us and involve risks and uncertainties that could cause our actual growth, results, performance and business prospects and opportunities to differ materially from those expressed in, or implied by these statements. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to: risks related to our ability to comply with, and the impact of changes in, legislation and regulations that affect our ability to participate in student financial aid programs; costs, risks and effects of legal and administrative proceedings and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and, class action, derivative, Qui Tam, and other lawsuits; cost and potential impact of findings by the special committee of our Board of Directors that is investigating allegations of securities laws violations against CEC; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; costs and difficulties related to the integration of acquired businesses; future financial and operational results; competition; general economic conditions; ability to manage and continue growth; and other risk factors relating to our industry and business, as detailed in our Annual Report on Form 10-K for the year ended December 31, 2003, and from time to time in our other reports filed with the SEC. We disclaim any responsibility to update these forward-looking statements.

Career Education Corporation and Subsidiaries UNAUDITED CONSOLIDATED STATEMENTS OF INCOME For the Twelve Months Ended December 31, 2004 and 2003 (Amounts in thousands, except per share data and percentages)

% of 2004 Revenue ----------- --------- Revenue: Tuition and registration fees $1,608,433 93.0% Other 120,082 7.0% ----------- Total revenue 1,728,515 100.0% -----------

Operating expenses: Educational services and facilities 557,134 32.1% General and administration 822,358 47.6% Depreciation and amortization 57,469 3.4% ----------- Total operating expenses 1,436,961 83.1% -----------

Income from operations 291,554 16.9%

Other income (expense): Interest income 2,952 0.2% Interest expense (2,802) -0.2% Share of affiliate earnings 4,248 0.2% Miscellaneous (290) 0.0% ----------- Total other income 4,108 0.2% -----------

Income before provision for income taxes 295,662 17.1%

Provision for income taxes 116,047 6.7% -----------

Net income $179,615 10.4% ===========

======================================================================

Diluted net income per share $1.71

Diluted weighted average shares outstanding 105,004

2003 ------------------------------------------------------ As % of As % of Reported Revenue Adjustment Restated Revenue ------------ -------- ----------- ---------- --------- Revenue: Tuition and registration fees $1,089,192 91.6% $(12,364) $1,076,828 91.5% Other 99,417 8.4% - 99,417 8.5% ------------ --------- ----------- Total revenue 1,188,609 100.0% (12,364) 1,176,245 100.0% ------------ --------- -----------

Operating expenses: Educational services and facilities 413,806 34.8% (291) 413,515 35.2% General and administration 533,964 44.9% - 533,964 45.4% Depreciation and amortization 43,908 3.7% - 43,908 3.7% ------------ --------- ----------- Total operating expenses 991,678 83.4% (291) 991,387 84.3% ------------ --------- -----------

Income from operations 196,931 16.6% (12,073) 184,858 15.7%

Other income (expense): Interest income 1,004 0.1% - 1,004 0.1% Interest expense (1,845) -0.2% - (1,845) -0.2% Share of affiliate earnings 3,354 0.3% - 3,354 0.3% Miscellaneous - 0.0% - - 0.0% ------------ --------- ----------- Total other income 2,513 0.2% - 2,513 0.2% ------------ --------- -----------

Income before provision for income taxes 199,444 16.8% (12,073) 187,371 15.9%

Provision for income taxes 80,276 6.8% (4,771) 75,505 6.4% ------------ --------- -----------

Net income $119,168 10.0% $(7,302) $111,866 9.5% ============ ========= ===========

======================================================================

Diluted net income per share $1.19 $(0.07) $1.11

Diluted weighted average shares outstanding 100,522 100,522 100,522

Career Education Corporation and Subsidiaries UNAUDITED CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended December 31, 2004 and 2003 (Amounts in thousands, except per share data and percentages)

% of 2004 Revenue ---------- --------- Revenue: Tuition and registration fees $456,670 93.9% Other 29,234 6.0% ---------- Total revenue 485,904 100.0% ----------

Operating expenses: Educational services and facilities 146,537 30.1% General and administration 229,577 47.3% Depreciation and amortization 16,627 3.4% ---------- Total operating expenses 392,741 80.8% ----------

Income from operations 93,163 19.2%

Other income (expense): Interest income 1,412 0.3% Interest expense (734) -0.2% Share of affiliate earnings 1,448 0.3% Miscellaneous (94) 0.0% ---------- Total other income 2,032 0.4% ----------

Income before provision for income taxes 95,195 19.6%

Provision for income taxes 35,359 7.3% ----------

Net income $59,836 12.3% ==========

======================================================================

Diluted net income per share $0.57

Diluted weighted average shares outstanding 104,946

2003 ---------------------------------------------------- As % of As % of Reported Revenue Adjustment Restated Revenue ----------- --------- ---------- --------- --------- Revenue: Tuition and registration fees $343,000 92.4% $(4,557) $338,443 92.3% Other 28,296 7.6% - 28,296 7.7% ----------- ---------- --------- Total revenue 371,296 100.0% (4,557) 366,739 100.0% ----------- ---------- ---------

Operating expenses: Educational services and facilities 117,031 31.5% (124) 116,907 31.9% General and administration 153,030 41.2% - 153,030 41.7% Depreciation and amortization 13,144 3.6% - 13,144 3.6% ----------- ---------- --------- Total operating expenses 283,205 76.3% (124) 283,081 77.2% ----------- ---------- ---------

Income from operations 88,091 23.7% (4,433) 83,658 22.8%

Other income (expense): Interest income 130 0.1% - 130 0.0% Interest expense (471) -0.1% - (471) -0.1% Share of affiliate earnings 1,187 0.3% - 1,187 0.3% Miscellaneous - 0.0% - - 0.0% ----------- ---------- --------- Total other income 846 0.3% - 846 0.2% ----------- ---------- ---------

Income before provision for income taxes 88,937 24.0% (4,433) 84,504 23.0%

Provision for income taxes 35,521 9.6% (1,693) 33,828 9.2% ----------- ---------- ---------

Net income $53,416 14.4% $(2,740) $50,676 13.8% =========== ========== =========

======================================================================

Diluted net income per share $0.51 $(0.03) $0.49

Diluted weighted average shares outstanding 104,288 104,288 104,288

CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands)

December 31, 2003 ---------------------------------- December 31, As As 2004 Reported Adjustment Restated ----------- ----------- ---------- -----------

ASSETS

CURRENT ASSETS: Cash and cash equivalents $348,099 $161,235 $- $161,235 Receivables: Students, net of allowance for doubtful accounts of $63,903 and $47,467 as of December 31, 2004 and 2003 87,503 110,445 (6,485) 103,960 Other, net 5,378 6,915 - 6,915 Inventories 17,522 11,652 - 11,652 Prepaid expenses 44,702 35,441 - 35,441 Other current assets 5,980 5,464 - 5,464 Deferred income tax assets 18,341 4,639 - 4,639 ----------- ----------- ---------- ----------- Total current assets 527,525 335,791 (6,485) 329,306 ----------- ----------- ---------- ----------- Property and equipment, net 351,146 263,925 - 263,925 Goodwill, net 449,136 440,709 1,525 442,234 Intangible assets, net 35,881 36,326 - 36,326 Other assets 38,495 42,399 - 42,399 ----------- ----------- ---------- ----------- TOTAL ASSETS $1,402,183 $1,119,150 $(4,960) $1,114,190 ----------- ----------- ---------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES: Current maturities of long-term debt $2,274 $79,822 $- $79,822 Accounts payable 38,263 30,627 - 30,627 Accrued expenses: Payroll and related benefits 38,193 25,671 - 25,671 Income taxes - 14,472 (13,278) 1,194 Other 70,510 42,419 (568) 41,851 Deferred tuition revenue 169,031 113,610 28,374 141,984 ----------- ----------- ---------- ----------- Total current liabilities 318,271 306,621 14,528 321,149 ----------- ----------- ---------- -----------

LONG-TEM LIABILITIES: Long-term debt, net of current maturities 21,591 25,453 - 25,453 Long-term contractual obligations - 9,679 - 9,679 Deferred income tax liabilities 39,374 18,366 - 18,366 Other 38,957 11,211 - 11,211 ----------- ----------- ---------- ----------- Total long-tem liabilities 99,922 64,709 - 64,709 ----------- ----------- ---------- -----------

COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock - - - - Common stock 1,025 1,002 - 1,002 Additional paid-in capital 571,192 496,582 - 496,582 Accumulated other comprehensive income 4,396 2,986 - 2,986 Retained earnings 407,377 247,250 (19,488) 227,762 ----------- ----------- ---------- ----------- Total stockholders' equity 983,990 747,820 (19,488) 728,332 ----------- ----------- ---------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,402,183 $1,119,150 $(4,960) $1,114,190 ----------- ----------- ---------- -----------

CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED SELECTED SEGMENT INFORMATION (Dollars in thousands)

For the Three Months Ended December 31, ----------------------------------------------

2003 ---------------------------------- As As 2004 Reported Adjustment Restated ----------- ----------- ---------- ----------- Revenue CSU (1) $367,698 $320,251 $(4,557) $315,694 OEG (2) 118,206 51,045 - 51,045

Segment profit CSU $59,338 $70,429 $(4,433) $65,996 OEG 41,622 23,354 - 23,354 Corporate and other (6,349) (4,505) - (4,505)

Segment profit percentage CSU 16.1% 22.0% 20.9% OEG 35.2% 45.8% 45.8%

For the Twelve Months Ended December 31, ----------------------------------------------

2003 ---------------------------------- As As 2004 Reported Adjustment Restated ----------- ----------- ---------- ----------- Revenue CSU (1) $1,337,051 $1,039,798 $(12,364) $1,027,434 OEG (2) 391,464 148,811 - 148,811

Segment profit CSU $176,055 $163,494 $(12,073) $151,421 OEG 158,815 66,659 - 66,659 Corporate and other (39,068) (29,868) - (29,868)

Segment profit percentage CSU 13.2% 15.7% 14.7% OEG 40.6% 44.8% 44.8%

(1) The Colleges, Schools, and Universities ("CSU") segment represents an aggregation of our campus-based operating divisions.

(2) The Online Education Group ("OEG") segment represents an aggregation of our online operating divisions.

(3) Segment profit equals the sume of income from operations and share of affiliate earnings.

Career Education Corporation and Subsidiaries Unaudited Consolidated Statements of Income For the Years Ended December 31, 2002, 2001 and 2000

For the Year Ended December 31, 2002 ----------------------------------------- As Reported Adjustment As Restated ------------- ------------- -------------

Total revenue $780,059 $(9,112) $770,947 Total operating expenses 666,761 (164) 666,597 Total other income 1,062 - 1,062 Income before provision for income taxes 114,360 (8,948) 105,412 Provision for income taxes 46,888 (3,170) 43,718 ------------- ------------- ------------- Net income $67,472 $(5,778) $61,694 ============= ============= ============= Diluted net income per share $0.71 $0.06 $0.65 ============= ============= =============

For the Year Ended December 31, 2001 ----------------------------------------- As Reported Adjustment As Restated ------------- ------------- -------------

Total revenue $547,059 $(5,000) $542,059 Total operating expenses 478,237 (45) 478,192 Total other income 915 - 915 Income before provision for income taxes 69,737 (4,955) 64,782 Provision for income taxes 31,382 (1,908) 29,474 ------------- ------------- ------------- Net income $38,355 $(3,047) $35,308 ============= ============= ============= Diluted net income per share $0.42 $0.03 $0.39 ============= ============= =============

For the Year Ended December 31, 2000 ----------------------------------------- As Reported Adjustment As Restated ------------- ------------- -------------

Total revenue $334,528 $(3,649) $330,879 Total operating expenses 295,148 (60) 295,088 Total other income (expense) 126 - 126 Income before provision for income taxes and cumulative change in accounting principle 39,506 (3,589) 35,917 Provision for income taxes 17,322 (1,515) 15,807 Cumulative effect of change in accounting principle, net of income tax benefit (778) - (778) ------------- ------------- ------------- Net income $21,406 $(2,074) $19,332 ============= ============= ============= Diluted net income per share $0.28 $0.03 $0.25 ============= ============= =============

Note: The effect of the restatement on the previously reported full year periods is set forth in the accompanying exhibits. The company will file restated financial statements reflecting this change in connection with filing its Form 10-K for 2004.

Career Education Corporation and Subsidiaries SELECTED BALANCE SHEET & FINANCIAL DATA As of December 31, 2004 (Dollars in thousands)

Purchases of Net Cash Property and Provided by Equipment, net Operating Activities -------------------- --------------------

For the three months ended December 31, 2004 $48,779 $114,451

For the year ended December 31, 2004 $142,781 $374,594

Career Education Corporation and Subsidiaries Adjusted Student Population

Culinary & Restated Academy Population Healthcare with Division without Population as As Externships Externships Teach- Teach-outs of: Reported outs (1) ---------------- --------- ----------- ----------- -------- ---------- January 31, 2003 51,100 1,050 52,150 n/a n/a April 30, 2003 54,400 1,100 55,500 n/a n/a July 31, 2003 62,000 2,000 64,000 n/a n/a October 31, 2003 79,500 2,400 81,900 n/a n/a January 31, 2004 83,200 1,800 85,000 (900) 84,100 April 30, 2004 85,300 2,100 87,400 (750) 86,650 July 31, 2004 81,000 2,150 83,150 (700) 82,450 October 31, 2004 97,300 3,050 100,350 (850) 99,500

(1) We are providing this information as we will be reporting population for 2005 and 2004 net of our previously disclosed teach-outs for our Academy division.

--30--YM/cg*

CONTACT: Career Education Corporation Karen King (Investor Relations), 847-585-3899 Tracy Lorenz (Investor Relations), 847-585-3899 Sallie Gaines (Media Relations), 312-485-0103 www.careered.com

KEYWORD: ILLINOIS INDUSTRY KEYWORD: EDUCATION EARNINGS CONFERENCE CALLS SOURCE: Career Education Corporation

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