1046568--3/1/2007--CAREER_EDUCATION

related topics

{regulation, government, change}

{personnel, key, retain}

{acquisition, growth, future}

{financial, litigation, operation}

{stock, price, operating}

{product, market, service}

{tax, income, asset}

{debt, indebtedness, cash}

{regulation, change, law}

{competitive, industry, competition}

{stock, price, share}

Risks Related to the Highly-Regulated Industry in Which We Operate Failure of our U.S. schools to comply with the extensive regulatory requirements for school operations could result in financial penalties, restrictions on our operations, loss of federal and state financial aid funding for our students, or loss of our authorization to operate our U.S. schools. The accreditation review of our American InterContinental University school has adversely affected and may continue to adversely affect our business, financial condition, results of operations, and growth prospects. Investigations, claims, and actions against us and other companies in our industry could adversely affect our business and stock price. Risks Related to Our Business If we are unable to successfully conclude the litigation, governmental investigations, and inquiries pending against us, our business, financial condition, results of operations, and growth prospects could be adversely affected. The turnover in our management team could negatively impact our business. Our recent headcount reductions may place additional strain on our resources, may impair our operations, and may adversely impact our ability to attract and retain qualified personnel. The loss of our key personnel could harm our business. Our future operating results and the market price of the common stock could be materially adversely affected if we are required to write-down the carrying value of goodwill associated with any of our operating divisions in the future. We may be unable to successfully divest those schools and campuses included in the Sales Plan or to realize the anticipated benefits from such divestitures, which may adversely affect our business and results of operations. Risks specific to our schools online campuses could have a material adverse effect on our business. Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could adversely affect our student population. Alternatively, improved state financing may result in increased support for lower-priced public institutions, which may increase competition for students. High interest rates could adversely affect our ability to attract and retain students. If we fail to effectively identify, pursue, and integrate acquired schools, both in the U.S. and outside of the U.S., our growth could be slowed and our profitability may be adversely affected. If we fail to effectively identify, establish, and operate new schools and new branch campuses of our existing schools, our growth may be slowed and our profitability may be adversely affected. Our financial performance depends, in part, on our ability to keep pace with changing market needs and technology. Our financial performance depends, in part, on our ability to continue to develop awareness and acceptance of our schools and programs among high school graduates and working adults. We compete with a variety of educational institutions, and if we are unable to compete effectively, our student population and revenue could be adversely impacted. Our credit agreements limit our ability to take various actions. Our future operating results and financial conditions would be materially adversely affected if a change in control is deemed to occur under our share-based compensation plans. Risk Related to Our Common Stock The trading price of our common stock may fluctuate substantially in the future.

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1046568--3/1/2007--CAREER_EDUCATION_CORP