ceco-10q_20180630.htm

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

Number of shares of registrant’s common stock, par value $0.01, outstanding as of July 25, 2018: 69,723,488

	June 30,			December 31,
	2018			2017
ASSETS	(unaudited)
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	33,175		$	18,110
Restricted cash		789			789
Restricted short-term investments		4,570			5,070
Short-term investments		151,571			156,178
Total cash and cash equivalents, restricted cash and short-term investments		190,105			180,147
Student receivables, net of allowance for doubtful accounts of $22,098 and $20,533 as of June 30, 2018 and December 31, 2017, respectively		24,992			18,875
Receivables, other, net		1,948			1,163
Prepaid expenses		10,957			7,722
Inventories		914			1,112
Other current assets		1,607			1,319
Assets of discontinued operations		171			382
Total current assets		230,694			210,720

NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $196,487 and $213,825 as of June 30, 2018 and December 31, 2017, respectively		30,829			33,230
Goodwill		87,356			87,356
Intangible assets, net of amortization of $1,400 as of both June 30, 2018 and December 31, 2017		7,900			7,900
Student receivables, net of allowance for doubtful accounts of $2,170 and $2,001 as of June 30, 2018 and December 31, 2017, respectively		2,334			2,548
Deferred income tax assets, net		91,443			98,084
Other assets		6,649			5,673
Assets of discontinued operations		1,585			1,585
TOTAL ASSETS	$	458,790		$	447,096
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,297		$	8,515
Accrued expenses:
Payroll and related benefits		22,895			32,910
Advertising and marketing costs		9,945			9,245
Income taxes		1,762			2,185
Other		33,834			31,233
Deferred revenue		23,050			22,897
Liabilities of discontinued operations		3,125			5,701
Total current liabilities		105,908			112,686

NON-CURRENT LIABILITIES:
Deferred rent obligations		14,827			15,277
Other liabilities		15,138			22,143
Liabilities of discontinued operations		-			785
Total non-current liabilities		29,965			38,205

STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.01 par value; 300,000,000 shares authorized; 85,115,123 and 84,279,533 shares issued, 69,723,487 and 69,117,803 shares outstanding as of June 30, 2018 and December 31, 2017, respectively		851			843
Additional paid-in capital		624,869			621,008
Accumulated other comprehensive loss		(356	)		(164	)
Accumulated deficit		(81,874	)		(108,127	)
Treasury stock, at cost; 15,391,636 and 15,161,730 shares as of June 30, 2018 and December 31, 2017, respectively		(220,573	)		(217,355	)
Total stockholders' equity		322,917			296,205
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	458,790		$	447,096

The accompanying notes are an integral part of these condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except per share amounts)

	For the Quarter Ended June 30,						For the Year to Date Ended June 30,
	2018			2017			2018			2017
REVENUE:
Tuition and fees	$	141,344		$	145,507		$	288,854		$	306,884
Other		692			715			1,247			1,447
Total revenue		142,036			146,222			290,101			308,331

OPERATING EXPENSES:
Educational services and facilities		30,290			36,406			57,236			76,579
General and administrative		98,340			96,836			196,348			205,081
Depreciation and amortization		2,103			3,876			4,685			7,786
Total operating expenses		130,733			137,118			258,269			289,446
Operating income		11,303			9,104			31,832			18,885

OTHER INCOME:
Interest income		742			464			1,376			854
Interest expense		(106	)		(113	)		(215	)		(226	)
Miscellaneous (expense) income		(135	)		253			193			293
Total other income		501			604			1,354			921

PRETAX INCOME		11,804			9,708			33,186			19,806
Provision for income taxes		2,940			5,045			6,438			9,546
INCOME FROM CONTINUING OPERATIONS		8,864			4,663			26,748			10,260

LOSS FROM DISCONTINUED OPERATIONS, net of tax		(113	)		(377	)		(495	)		(797	)

NET INCOME		8,751			4,286			26,253			9,463

OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments		(168	)		222			(82	)		263
Unrealized gain (loss) on investments		108			11			(110	)		34
Total other comprehensive (loss) income		(60	)		233			(192	)		297
COMPREHENSIVE INCOME	$	8,691		$	4,519		$	26,061		$	9,760

NET INCOME (LOSS) PER SHARE - BASIC:
Income from continuing operations	$	0.13		$	0.07		$	0.39		$	0.15
Loss from discontinued operations		-			(0.01	)		(0.01	)		(0.01	)
Net income per share	$	0.13		$	0.06		$	0.38		$	0.14

NET INCOME (LOSS) PER SHARE - DILUTED:
Income from continuing operations	$	0.12		$	0.07		$	0.38		$	0.14
Loss from discontinued operations		-			(0.01	)		(0.01	)		(0.01	)
Net income per share	$	0.12		$	0.06		$	0.37		$	0.13

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		69,668			69,025			69,443			68,803
Diluted		71,562			70,884			71,239			70,590

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	For the Year to Date Ended June 30,
	2018			2017

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	26,253		$	9,463
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization expense		4,685			7,786
Bad debt expense		13,679			15,112
Compensation expense related to share-based awards		2,698			2,326
Deferred income taxes		6,641			8,744
Changes in operating assets and liabilities		(39,202	)		(77,677	)
Net cash provided by (used in) operating activities		14,754			(34,246	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(101,043	)		(145,088	)
Sales of available-for-sale investments		106,139			169,480
Purchases of property and equipment		(2,737	)		(2,146	)
Net cash provided by investing activities		2,359			22,246

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		1,170			2,459
Payments of employee tax associated with stock compensation		(3,218	)		(1,101	)
Net cash (used in) provided by financing activities		(2,048	)		1,358

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS:		-			33

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		15,065			(10,609	)
CASH AND CASH EQUIVALENTS, beginning of the period		18,899			50,882
CASH AND CASH EQUIVALENTS, end of the period	$	33,964		$	40,273

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Career Education’s academic institutions offer a quality education to a diverse student population in a variety of disciplines through online, campus-based and blended learning programs. Our two universities – American InterContinental University (“AIU”) and Colorado Technical University (“CTU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Both universities predominantly serve students online with career-focused degree programs that are designed to meet the educational demands of today’s busy adults. AIU and CTU continue to show innovation in higher education, advancing new personalized learning technologies like their intellipath^® learning platform. Career Education is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

Additionally, CEC is in the process of teaching out campuses within our All Other Campuses segment. Students enrolled at these campuses have been afforded the reasonable opportunity to complete their program of study prior to the final teach-out date.

A listing of our University Group locations and web links to these institutions can be found at www.careered.com.

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company” and “CEC” refer to Career Education Corporation and our wholly-owned subsidiaries. The terms “college,” “institution” and “university” refer to an individual, branded, for-profit educational institution, owned by us and includes its campus locations. The term “campus” refers to an individual main or branch campus operated by one of our colleges, institutions or universities.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the quarter and year to date ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018.

The unaudited condensed consolidated financial statements presented herein include the accounts of Career Education Corporation and our wholly-owned subsidiaries (collectively “CEC”). All intercompany transactions and balances have been eliminated.

Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a group of postsecondary education providers that offer a variety of academic programs. We organize our business across three reporting segments: CTU, AIU (comprises University Group) and All Other Campuses (formerly separately reported as Culinary Arts and Transitional Group). Campuses included in our All Other Campuses segment are currently being taught out and no longer enroll new students or have completed their teach-out. These campuses employ a gradual teach-out process, enabling them to continue to operate while current students have a reasonable opportunity to complete their program of study.

During the second quarter of 2018, the Company completed the teach-out of three campuses: Briarcliffe Bethpage, Sanford-Brown Seattle and Sanford-Brown Online, which continue to be reported within the All Other Campuses segment as of June 30, 2018 in accordance with ASC Topic 360 – Property, Plant and Equipment, which limits discontinued operations reporting.

Effective January 1, 2018, we have implemented FASB ASC Topic 606 – Revenue from Contracts with Customers. This guidance supersedes all previously issued revenue recognition guidance. As a result of this change in accounting guidance, we have updated our revenue recognition policies and disclosures. The guidance under Topic 606 did not impact the amount of revenue we recognized in previous periods, and also does not impact the amount of revenue recognized prospectively as our revenue recognition methodology remained relatively the same under the new guidance. The guidance under Topic 606 did impact our presentation of financial condition and disclosures. Previously, a student’s entire accounts receivable balance along with their deferred revenue balance was evaluated to determine the net position of the two and the proper reporting of that balance within student receivables, net, or within deferred revenue, net, on our condensed consolidated balance sheets. Under Topic 606, we now separate the contract asset balance from the student receivable balance to determine the amount reported as deferred revenue on the condensed consolidated balance sheets for each student. See Note 5 “Revenue Recognition” for more information.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting. This amendment in this ASU expanded the accounting scope to include share-based payments issued to non-employees for goods or services to substantially align with share-based payments issue to employees. For public entities, ASU 2018-07 is effective for annual reporting periods and interim periods beginning after December 15, 2018; early adoption is permitted. We have evaluated and early adopted this guidance effective 2018. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendments in this ASU allows public companies to record provisional amounts in their annual and interim financial statements using an approach similar to the “measurement period” that US GAAP permits in connection with the accounting for a recently acquired business. During the measurement period, management records provisional amounts for the effects of the tax law changes that can be reasonably estimated. If the finalization of the effect results in a different number, the adjustment to the provisional amount that was initially recorded does not represent the correction of an error. Instead, the adjustment is recorded to income tax expense in the period it is identified. For all entities, ASU 2018-05 is effective for annual periods and interim periods upon discovery. We have evaluated and adopted this guidance beginning 2018. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In February 2017, the FASB issued ASU No. 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The amendments in this ASU clarify and provide guidance for partial sales of nonfinancial assets and recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. For all public entities, ASU 2017-05 is effective for annual reporting periods and interim periods beginning after December 15, 2017. We have evaluated and adopted this guidance beginning 2018. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The amendments in this ASU improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory by reducing complexity in accounting standards. The amendments eliminate the exception prohibiting the recognition of current and deferred income taxes for an intra-entity transfer of an asset other than inventory until the asset has been sold to an outside party. For all public entities, ASU 2016-16 is effective for annual periods and interim periods beginning after December 15, 2017. We have evaluated and adopted this guidance beginning 2018. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this ASU address eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230. The eight topics include debt prepayment or extinguishments costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from settlement of insurance claims, proceeds from settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. For all public business entities, ASU 2016-15 is effective for annual periods and interim periods beginning after December 15, 2017. We have evaluated and adopted this guidance beginning 2018. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), a new accounting standard intended to improve and converge the financial reporting requirements between U.S. GAAP and International Financial Reporting Standards, which supersedes virtually all existing revenue recognition guidance under GAAP. The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The new guidance establishes a five step approach for the recognition of revenue. For all public business entities, ASU No. 2014-09 is effective for annual periods and interim periods beginning after December 15, 2017. We completed the assessment of our evaluation of the new standard on our accounting policies, processes and system requirements and adopted this guidance beginning 2018. We have adopted this guidance using the modified retrospective approach which applies to contracts that have remaining obligations as of January 1, 2018 and new contracts entered into subsequent to January 1, 2018. Under the modified retrospective approach, we do not restate comparative periods on our condensed consolidated financial statements. The adoption impacted the presentation of our financial condition and disclosures but did not impact our results of operations. See Note 5 “Revenue Recognition” for more information.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU provide financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income

(“AOCI”) to retained earnings in each period when the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recorded. For all entities, ASU 2018-02 is effective for annual periods and interim periods beginning after December 15, 2018; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosure.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected and credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. For all public business entities, ASU 2016-13 is effective for annual periods and interim periods beginning after December 15, 2019; early adoption is permitted for all organizations for annual periods and interim periods beginning after December 15, 2018. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The objective of Topic 842 is to establish transparency and comparability that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The core principle of Topic 842 is that lessees should recognize the assets and liabilities that arise from leases. All leases create an asset and liability for the lessee in accordance with FASB Concept Statements No. 6 Elements of Financial Statements, and, therefore, recognition of those lease assets and liabilities represents an improvement over previous GAAP. The accounting applied for lessors largely remained unchanged. The amendment in this ASU requires recognition of a lease liability and a right of use asset at the lease inception date. For all public business entities, ASU 2016-02 is effective for annual periods and interim periods beginning after December 15, 2018; early adoption is permitted. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact primarily relates to our accounting for real estate leases and real estate subleases. We expect to have a material amount now reported as a right of use asset and lease liability related to these leases as well as expect to separate lease components from the non-lease components for recognition. Based on the current ASU, we will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach beginning with January 1, 2017. We are currently evaluating this guidance and believe the adoption will significantly impact the presentation of our financial condition and disclosures, but will not significantly impact our results of operations.

Investments consist of the following as of June 30, 2018 and December 31, 2017 (dollars in thousands):

	December 31, 2017
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	830	$	-	$	-		$	830
Non-governmental debt securities		125,485		7		(222	)		125,270
Treasury and federal agencies		30,211		-		(133	)		30,078
Total short-term investments		156,526		7		(355	)		156,178
Restricted short-term investments (available for sale):
Non-governmental debt securities		5,070		-		-			5,070
Total investments (available for sale)	$	161,596	$	7	$	(355	)	$	161,248

In the table above, unrealized holding gains (losses) as of June 30, 2018 relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.

Our unrestricted non-governmental debt securities primarily consist of commercial paper and certificates of deposit. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell

our investments in these securities prior to maturity and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis. Our restricted short-term investments are comprised entirely of certificates of deposit, which secure our letters of credit.

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of June 30, 2018, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of non-governmental debt securities, and treasury and federal agencies securities. Available for sale securities included in Level 1 are valued at quoted prices in active markets for identical assets and liabilities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Investments measured at fair value on a recurring basis subject to the disclosure requirements of FASB ASC Topic 820 – Fair Value Measurements at June 30, 2018 and December 31, 2017 were as follows (dollars in thousands):

	As of June 30, 2018
	Level 1		Level 2		Level 3		Total
Non-governmental debt securities	$	15,000	$	117,762	$	-	$	132,762
Treasury and federal agencies		-		23,379		-		23,379
Totals	$	15,000	$	141,141	$	-	$	156,141

	As of December 31, 2017
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	-	$	830	$	-	$	830
Non-governmental debt securities		31,500		98,840		-		130,340
Treasury and federal agencies		-		30,078		-		30,078
Totals	$	31,500	$	129,748	$	-	$	161,248

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of June 30, 2018, our investment in an equity affiliate equated to a 30.7%, or $3.0 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent systems to power the delivery of individualized and personalized learning.

During the quarters ended June 30, 2018 and 2017, we recorded approximately $0.2 million of loss and $0.1 million of gain, respectively, and during the years to date ended June 30, 2018 and June 30, 2017, we recorded $0.1 million of loss for each of the respective periods, related to our proportionate investment in CCKF within miscellaneous (expense) income on our unaudited condensed consolidated statements of income and comprehensive income.

We make periodic operating maintenance payments related to proprietary rights that we use in our intellipath^® personalized learning technology. The total fees paid to CCKF for the quarters and years to date ended June 30, 2018 and 2017 were as follows (dollars in thousands):

During the fourth quarter of 2015, the Company; its wholly-owned subsidiary, CEC Educational Services, LLC (“CEC-ES”); and the subsidiary guarantors thereunder entered into a Fourth Amendment to its Amended and Restated Credit Agreement dated as of December 30, 2013 (as amended, the “Credit Agreement”) with BMO Harris Bank N.A., in its capacities as the initial lender and letter

of credit issuer thereunder and the administrative agent for the lenders which from time to time may be parties to the Credit Agreement, to among other things, decrease the revolving credit facility to $95.0 million and require pre-approval by the lenders for each credit extension (other than letter of credit extensions) occurring after December 31, 2015. The revolving credit facility under the Credit Agreement is scheduled to mature on December 31, 2018. The loans and letter of credit obligations under the Credit Agreement are required to be secured by 100% cash collateral. As of June 30, 2018 and December 31, 2017, there were no outstanding borrowings under the revolving credit facility.

The following tables disaggregate our revenue by major source (dollars in thousands):

	For the Quarter Ended June 30, 2018								For the Year to Date Ended June 30, 2018
	CTU		AIU		All Other Campuses		Total		CTU		AIU		All Other Campuses		Total
Tuition	$	89,291	$	46,654	$	160	$	136,105	$	180,025	$	97,785	$	491	$	278,301
Technology fees		2,857		1,784		-		4,641		5,731		3,624		-		9,355
Other miscellaneous fees⁽¹⁾		489		90		19		598		989		190		19		1,198
Total tuition and fees		92,637		48,528		179		141,344		186,745		101,599		510		288,854
Other revenue⁽²⁾		629		51		12		692		1,128		101		18		1,247
Total revenue	$	93,266	$	48,579	$	191	$	142,036	$	187,873	$	101,700	$	528	$	290,101


	For the Quarter Ended June 30, 2017								For the Year to Date Ended June 30, 2017
	CTU		AIU		All Other Campuses		Total		CTU		AIU		All Other Campuses		Total
Tuition	$	87,355	$	44,436	$	8,697	$	140,488	$	177,560	$	96,655	$	22,406	$	296,621
Technology fees		2,769		1,597

Delaware	36-3932190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

231 N. Martingale Road Schaumburg, Illinois	60173
(Address of principal executive offices)	(Zip Code)

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐



		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets	1

	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income	2

	Unaudited Condensed Consolidated Statements of Cash Flows	3

	Notes to Unaudited Condensed Consolidated Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4.	Controls and Procedures	33

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	34

SIGNATURES		36

	Maintenance Fee Payments
For the quarter ended June 30, 2018	$	377
For the quarter ended June 30, 2017	$	332
For the year to date ended June 30, 2018	$	753
For the year to date ended June 30, 2017	$	657

	June 30, 2018
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Non-governmental debt securities	$	128,511	$	17	$	(336	)	$	128,192
Treasury and federal agencies		23,518		1		(140	)		23,379
Total short-term investments		152,029		18		(476	)		151,571
Restricted short-term investments (available for sale):
Non-governmental debt securities		4,570		-		-			4,570
Total investments (available for sale)	$	156,599	$	18	$	(476	)	$	156,141