Career Education Corporation Reports Results for Third Quarter 2010

HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--Career Education Corporation (NASDAQ: CECO) today reported total revenue of $524.2 million, and net income of $26.1 million, or $0.33 per diluted share, for the third quarter of 2010 compared to total revenue of $458.3 million and net income of $20.8 million, or $0.25 per diluted share, for the third quarter of 2009.

“While the third quarter brought intensified government and media scrutiny of our sector, I am particularly proud of the way that our company remained focused on enhancing the quality of education and student services in order to prepare students for success in their chosen careers.”

The operating results for the third quarter 2010 included a $40.0 million pretax charge related to the settlement of a legal matter. The operating results for the third quarter 2009 included $18.8 million of pretax performance-based compensation expense related to incentive plan outperformance.

“Our performance in the third quarter was in line with our expectations and marked a continuation of our year-over-year improvement,” said Gary E. McCullough, President and Chief Executive Officer. “While the third quarter brought intensified government and media scrutiny of our sector, I am particularly proud of the way that our company remained focused on enhancing the quality of education and student services in order to prepare students for success in their chosen careers.”

CONSOLIDATED RESULTS

Three Months Ended September 30, 2010

• Total revenue was $524.2 million for the third quarter of 2010, a 14.4 percent increase from $458.3 million for the third quarter of 2009.

• Operating income was $38.3 million for the third quarter of 2010, versus operating income of $38.1 million for the third quarter of 2009. The operating margin was 7.3 percent for the third quarter of 2010, compared to an operating margin of 8.3 percent for the third quarter of 2009. Excluding the impact of the significant items above, operating income for the third quarter of 2010 was $78.3 million versus operating income of $56.9 million for the third quarter of 2009; a 37.5 percent increase over the prior year quarter.

• Bad debt expense for the three months ended September 30, 2010 and 2009 was $31.9 million and $14.2 million, respectively. The higher level of bad debt expense is a result of increases made to the reserve rates associated with the Company’s student extended payment plans.

• Income from continuing operations for each three–month period ended September 30, 2010 and 2009 was $26.9 million, or $0.34 and $0.32 per diluted share for the three months ended September 30, 2010 and 2009, respectively. Excluding the impact of the significant items above, income from continuing operations for the three months ended September 30, 2010 was $52.9 million, or $0.66 per diluted share versus $39.1 million, or $0.47 per diluted share for the three months ended September 30, 2009.

Nine Months Ended September 30, 2010

• Total revenue was $1,581.8 million for the nine months ended September 30, 2010, compared to $1,328.8 million for the nine months ended September 30, 2009.

• Operating income increased to $221.8 million for the nine months ended September 30, 2010, from $126.5 million for the nine months ended September 30, 2009. The operating margin increased to 14.0 percent for the nine months ended September 30, 2010, from 9.5 percent for the nine months ended September 30, 2009. Operating income for the nine months ended September 30, 2010 included a $40.0 million pretax charge related to the settlement of a legal matter. In addition, increases made to the reserve rates associated with the Company’s student extended payment plans contributed to a $38.7 million increase in bad debt expense for the nine months ended September 30, 2010 as compared to the prior year. Operating income for the nine months ended September 30, 2009 included an additional $25.3 million pretax charge for performance-based compensation expense related to incentive plan outperformance.

• Income from continuing operations for the nine months ended September 30, 2010, was $148.0 million, or $1.82 per diluted share, compared to $84.3 million, or $0.97 per diluted share, for the nine months ended September 30, 2009.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Cash provided by operating activities was $217.5 million for the nine months ended September 30, 2010, compared to cash provided by operating activities of $217.4 million for the nine months ended September 30, 2009. Operating cash flows remained relatively constant as compared to the prior year as strong cash flow driven by increased net income was offset by payment of prior year annual incentive compensation, lease payments attributable to our discontinued operations and the impact of student receivables growth and related payment performance.

• Capital expenditures increased to $81.9 million for the nine months ended September 30, 2010, from $50.3 million for the nine months ended September 30, 2009. Capital expenditures increased to 5.2 percent of total revenue for the nine months ended September 30, 2010 as compared to 3.8 percent for the nine months ended September 30, 2009 as a result of investments made in start-up campuses and the Company’s campus support center.

Financial Position

• As of September 30, 2010 and December 31, 2009, cash and cash equivalents and short-term investments totaled $442.5 million and $484.9 million, respectively.

• Days sales outstanding (DSO) were 15 days as of September 30, 2010, compared to 16 days as of September 30, 2009.

Stock Repurchase Program

During the nine months ended September 30, 2010, the Company repurchased approximately 5.4 million shares of its common stock for approximately $154.9 million at an average price of $28.56 per share. The Company did not repurchase shares of its common stock during the third quarter 2010.

As of September 30, 2010, approximately $290.5 million was available under the Company’s authorized stock repurchase program to repurchase outstanding shares of its common stock. Stock repurchases under this program may be made on the open market or in privately negotiated transactions from time to time, depending on various factors, including market conditions and corporate and regulatory requirements.

STUDENT POPULATION AND NEW STUDENT STARTS
Student Population
Total student population by reportable segment as of September 30, 2010 and 2009, was as follows:
		As of September 30,				% Change 2010 vs. 2009
		2010		2009
Student Population
University		63,500		56,400		13%
Health Education		31,100		25,000		24%
Culinary Arts		16,300		13,600		20%
International		7,300		7,000		4%
Transitional Schools		5		100		NM
Total Student Population		118,205		102,100		16%
New Student Starts
New student starts by reportable segment during the third quarter of 2010 and 2009, were as follows:
		For the Three Months Ended September 30,				% Change 2010 vs. 2009
		2010		2009
New Student Starts
University		19,070		18,350		4%
Health Education		9,440		8,000		18%
Culinary Arts		7,360		7,100		4%
International		4,130		4,200		-2%
Transitional Schools		—		—		N/A
Total New Student Starts		40,000		37,650		6%

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on Wednesday, November 3, 2010 at 10:00 a.m. Eastern time. 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 27994422. 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 27994422.

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 more than 118,000 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, Italy, 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”); Istituto Marangoni; 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, 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 outcome 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; the impacts of the U.S. Department of Education’s new and pending regulations addressing certain aspects of administration of Title IV federal financial aid programs (including among other matters, gainful employment, 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) on our business practices, costs of compliance and of developing and implementing changes in operations, student recruitment or enrollment, and program offerings that may have significant or material effects on our operations, business and profitability; 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 providing extended payment plans 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; 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 regulations, and class action and other lawsuits; 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, 2009, our Quarterly Reports on Form 10-Q for the most recent fiscal quarters, and from time to time in our current reports filed with the Securities and Exchange Commission.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
		September 30,				December 31,
		2010				2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	283,515			$	284,473
Short-term investments			158,988				200,379
Total cash and cash equivalents and short-term investments			442,503				484,852
Student receivables, net			64,366				57,823
Receivables, other, net			5,514				5,256
Prepaid expenses			43,561				41,090
Inventories			11,078				11,271
Deferred income tax assets, net			12,983				12,983
Other current assets			7,810				9,442
Assets of discontinued operations			5,297				6,118
Total current assets			593,112				628,835
NON-CURRENT ASSETS:
Property and equipment, net			335,836				306,279
Goodwill			383,821				377,515
Intangible assets, net			182,351				178,520
Student receivables, net			14,426				21,455
Deferred income tax assets, net			3,984				3,659
Other assets, net			36,099				23,178
Assets of discontinued operations			23,491				24,401
TOTAL ASSETS		$	1,573,120			$	1,563,842
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of capital lease obligations		$	784			$	880
Accounts payable			47,613				51,108
Accrued expenses:
Payroll and related benefits			62,571				88,439
Advertising and production costs			25,186				21,436
Income taxes			1,206				17,849
Earnout payments			17,061				18,009
Other			92,391				46,182
Deferred tuition revenue			210,618				184,411
Liabilities of discontinued operations			19,371				13,695
Total current liabilities			476,801				442,009
NON-CURRENT LIABILITIES:
Capital lease obligations, net of current maturities			1,336				2,262
Deferred rent obligations			105,011				91,725
Earnout payments			11,898				23,680
Other liabilities			13,140				19,124
Liabilities of discontinued operations			43,464				62,997
Total non-current liabilities			174,849				199,788
SHARE-BASED AWARDS SUBJECT TO REDEMPTION			160				521
STOCKHOLDERS’ EQUITY:
Preferred stock			—				—
Common stock			964				954
Additional paid-in capital			262,040				244,992
Accumulated other comprehensive income			2,356				8,408
Retained earnings			1,035,090				889,057
Cost of shares in treasury			(379,140	)			(221,887	)
Total stockholders’ equity			921,310				921,524
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	1,573,120			$	1,563,842

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and percentages)
		For the Three Months Ended September 30, (1)
						% of							% of
		2010				Revenue			2009				Revenue
REVENUE:
Tuition and registration fees		$	497,172			94.8	%		$	434,932			94.9	%
Other			27,034			5.2	%			23,359			5.1	%
Total revenue			524,206							458,291
OPERATING EXPENSES:
Educational services and facilities			159,104			30.4	%			149,822			32.7	%
General and administrative			308,627			58.9	%			251,935			55.0	%
Depreciation and amortization			17,843			3.4	%			15,908			3.5	%
Goodwill and asset impairment			354			0.1	%			2,500			0.5	%
Total operating expenses			485,928			92.7	%			420,165			91.7	%
Operating income			38,278			7.3	%			38,126			8.3	%
OTHER INCOME:
Interest income			189			0.0	%			326			0.1	%
Interest expense			(30	)		0.0	%			(10	)		0.0	%
Miscellaneous income			760			0.1	%			62			0.0	%
Total other income			919			0.2	%			378			0.1	%
PRETAX INCOME			39,197			7.5	%			38,504			8.4	%
Provision for income taxes			12,304			2.3	%			11,626			2.5	%
INCOME FROM CONTINUING OPERATIONS			26,893			5.1	%			26,878			5.9	%
Loss from discontinued operations, net of tax			(762	)		-0.1	%			(6,086	)		-1.3	%
NET INCOME		$	26,131			5.0	%		$	20,792			4.5	%
NET INCOME (LOSS) PER SHARE – DILUTED:
Income from continuing operations		$	0.34						$	0.32
Loss from discontinued operations			(0.01	)						(0.07	)
Net income per share		$	0.33						$	0.25
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING			79,819							83,669

(1)		Prior period financial results have been reclassified for those campuses previously taught out or sold. They are now reflected as a component of Discontinued Operations.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and percentages)
		For the Nine Months Ended September 30, (1)
						% of							% of
		2010				Revenue			2009				Revenue
REVENUE:
Tuition and registration fees		$	1,516,181			95.9	%		$	1,271,207			95.7	%
Other			65,579			4.1	%			57,620			4.3	%
Total revenue			1,581,760							1,328,827
OPERATING EXPENSES:
Educational services and facilities			477,419			30.2	%			444,899			33.5	%
General and administrative			830,421			52.5	%			706,566			53.2	%
Depreciation and amortization			51,813			3.3	%			48,399			3.6	%
Goodwill and asset impairment			354			0.0	%			2,500			0.2	%
Total operating expenses			1,360,007			86.0	%			1,202,364			90.5	%
Operating income			221,753			14.0	%			126,463			9.5	%
OTHER INCOME:
Interest income			689			0.0	%			1,968			0.2	%
Interest expense			(75	)		0.0	%			(32	)		0.0	%
Miscellaneous expense			(506	)		0.0	%			(704	)		-0.1	%
Total other income			108			0.0	%			1,232			0.1	%
PRETAX INCOME			221,861			14.0	%			127,695			9.6	%
Provision for income taxes			73,842			4.7	%			43,351			3.3	%
INCOME FROM CONTINUING OPERATIONS			148,019			9.4	%			84,344			6.3	%
Loss from discontinued operations, net of tax			(2,348	)		-0.1	%			(33,805	)		-2.5	%
NET INCOME		$	145,671			9.2	%		$	50,539			3.8	%
NET INCOME (LOSS) PER SHARE – DILUTED:
Income from continuing operations		$	1.82						$	0.97
Loss from discontinued operations			(0.03	)						(0.39	)
Net income per share		$	1.79						$	0.58
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING			81,195							87,071

(1)		Prior period financial results have been reclassified for those campuses previously taught out or sold. They are now reflected as a component of Discontinued Operations.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		For the Nine Months Ended
		September 30,
		2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	145,671			$	50,539
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill and asset impairment			354				2,500
Depreciation and amortization expense			51,813				50,038
Bad debt expense			77,374				38,927
Compensation expense related to share-based awards			14,390				12,313
Loss on disposition of property and equipment			546				1,196
Changes in operating assets and liabilities			(72,633	)			61,883
Net cash provided by operating activities			217,515				217,396
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments			(229,771	)			(464,163	)
Sales of available-for-sale investments			271,035				502,383
Purchases of property and equipment			(81,944	)			(50,329	)
Acquisition of the rights to the Le Cordon Bleu brand			(12,729	)			(25,000	)
Business acquisition, net of acquired cash			(6,194	)			—
Other			81				(370	)
Net cash used in investing activities			(59,522	)			(37,479	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock			(154,913	)			(181,126	)
Issuance of common stock			2,453				2,166
Tax benefit associated with stock option exercises			216				194
Payment of assumed loans upon business acquisition			(4,279	)			—
(Payments)/borrowings of capital lease obligations & other long term debt			(2,085	)			1,214
Net cash used in financing activities			(158,608	)			(177,552	)
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS:			(942	)			888
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS			(1,557	)			3,253
DISCONTINUED OPERATIONS CASH ACTIVITY INCLUDED ABOVE:
Add: Cash balance of discontinued operations, beginning of the period			599				2,004
Less: Cash balance of discontinued operations, end of the period			—				987
CASH AND CASH EQUIVALENTS, beginning of the period			284,473				242,854
CASH AND CASH EQUIVALENTS, end of the period		$	283,515			$	247,124

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollars in thousands)
		For the Three Months Ended September 30, (1)
		2010				2009
REVENUE:
University (2)		$	290,512			$	260,167
Health Education (2)			110,421				90,718
Culinary Arts			108,305				91,654
International			15,061				15,333
Transitional Schools			63				565
Subtotal			524,362				458,437
Corporate and Other			(156	)			(146	)
Total revenue		$	524,206			$	458,291
OPERATING INCOME (LOSS): (3)
University (2) (4)		$	64,824			$	45,421
Health Education (2)			12,820				9,030
Culinary Arts (5)			(23,867	)			6,793
International			(6,740	)			(4,498	)
Transitional Schools			(1,287	)			(1,187	)
Subtotal			45,750				55,559
Corporate and Other (6)			(7,472	)			(17,433	)
Total operating income		$	38,278			$	38,126
OPERATING MARGIN (LOSS):
University			22.3	%			17.5	%
Health Education			11.6	%			10.0	%
Culinary Arts			-22.0	%			7.4	%
International			-44.8	%			-29.3	%
Transitional Schools			NM				NM

(1)		Prior period financial results have been reclassified for those campuses previously taught out or sold. They are now reflected as a component of Discontinued Operations.
(2)		Prior period financial results have been reclassified to account for the realignment of our International Academy of Design and Technology (IADT) schools, Harrington College of Design, Collins College and Brooks Institute into the University SBU. Briarcliffe College and Brown College shifted into the Health Education SBU.
(3)		Prior period financial results have been revised to account for a change in the allocation of shared service costs. Previously, shared service costs were allocated to our SBUs as a percentage of revenue. Improved data and analytical capabilities have allowed us to now allocate shared service costs based upon usage and consumption factors.
(4)		During the third quarter 2010, University recorded $7.3 million of legal expense related to the settlements of legal matters.
(5)		During the third quarter 2010, Culinary Arts recorded a $40.0 million charge related to the settlement of a legal matter, and $7.3 million of additional bad debt expense for increases in reserve rates related to our student extended payment plans.
(6)		Corporate and Other costs decreased primarily due to the prior year including additional performance-based compensation expense related to incentive plan outperformance of $7.3 million for the prior year quarter.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollars in thousands)
		For the Nine Months Ended
		September 30, (1)
		2010				2009
REVENUE:
University (2)		$	878,283			$	749,185
Health Education (2)			322,256				260,205
Culinary Arts			293,881				241,178
International			87,378				76,119
Transitional Schools			452				2,485
Subtotal			1,582,250				1,329,172
Corporate and Other			(490	)			(345	)
Total revenue		$	1,581,760			$	1,328,827
OPERATING INCOME (LOSS): (3)
University (2) (4)		$	212,995			$	133,789
Health Education (2)			35,434				26,052
Culinary Arts (5)			(3,267	)			2,545
International			9,689				9,950
Transitional Schools			(4,135	)			(3,853	)
Subtotal			250,716				168,483
Corporate and Other (6)			(28,963	)			(42,020	)
Total operating income		$	221,753			$	126,463
OPERATING MARGIN (LOSS):
University			24.3	%			17.9	%
Health Education			11.0	%			10.0	%
Culinary Arts			-1.1	%			1.1	%
International			11.1	%			13.1	%
Transitional Schools			NM				NM

(1)		Prior period financial results have been reclassified for those campuses previously taught out or sold. They are now reflected as a component of Discontinued Operations.
(2)		Prior period financial results have been reclassified to account for the realignment of our International Academy of Design and Technology (IADT) schools, Harrington College of Design, Collins College and Brooks Institute into the University SBU. Briarcliffe College and Brown College shifted into the Health Education SBU.
(3)		Prior period financial results have been revised to account for a change in the allocation of shared service costs. Previously, shared service costs were allocated to our SBUs as a percentage of revenue. Improved data and analytical capabilities have allowed us to now allocate shared service costs based upon usage and consumption factors.
(4)		During the third quarter 2010, University recorded $7.3 million of legal expense related to the settlements of legal matters.
(5)		During the third quarter 2010, Culinary Arts recorded a $40.0 million charge related to the settlement of a legal matter. For the first and third quarters 2010, Culinary Arts recorded $3.2 million and $7.3 million, respectively, of additional bad debt expense for increases in reserve rates related to our student extended payment plans.
(6)		Corporate and Other costs decreased primarily due to the prior year including additional performance-based compensation expense related to incentive plan outperformance of $9.7 million for the prior year to date.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES
SELECTED UNIVERSITY SEGMENT INFORMATION
(Dollars in thousands)
		For the Three Months Ended September 30, (1)								For the Nine Months Ended September 30, (1)
		2010				2009				2010				2009
REVENUE:
AIU		$	113,119			$	107,184			$	349,934			$	309,276
CTU			116,311				92,848				342,079				263,100
Art & Design			61,082				60,135				186,270				176,809
Total University		$	290,512			$	260,167			$	878,283			$	749,185
OPERATING INCOME: (2)
AIU		$	23,252			$	23,716			$	96,054			$	69,525
CTU			32,414				15,556				94,278				48,536
Art & Design			9,158				6,149				22,663				15,728
Total University		$	64,824			$	45,421			$	212,995			$	133,789
OPERATING MARGIN:
AIU			20.6	%			22.1	%			27.4	%			22.5	%
CTU			27.9	%			16.8	%			27.6	%			18.4	%
Art & Design			15.0	%			10.2	%			12.2	%			8.9	%
Total University			22.3	%			17.5	%			24.3	%			17.9	%
		As of September 30,
STUDENT POPULATION:		2010				2009
AIU			21,000				19,500
CTU			29,900				24,500
Art & Design			12,600				12,400
Total University			63,500				56,400
		For the Three Months Ended September 30,
NEW STUDENT STARTS:		2010				2009
AIU			6,760				6,530
CTU			9,180				8,760
Art & Design			3,130				3,060
Total University			19,070				18,350

(1)		Prior period results have been reclassified to account for the realignment of our International Academy of Design and Technology (IADT) schools, Harrington College of Design, Collins College and Brooks Institute into the University SBU. Briarcliffe College and Brown College shifted into the Health Education SBU.
(2)		During the third quarter 2010, University recorded $7.3 million of legal expense related to the settlements of legal matters.