Slide 1: Career Education Corporation
CAREER EDUCATION CORPORATION
Slide 2: Allegations versus Facts
Allegations versus Facts Dissident’s Allegations The Facts * “Troubled” company = Industry leader with a strong track record and a plan for the future Distinct competitive advantages Gold standard brands Continuing achievement across all business and operating metrics Coven 2
Slide 3: Attractive Shareholder Returns
Attractive Shareholder Returns Comparison of Cumulative Total Return Since January 1, 2001 Career Education Corporation, S&P 500 Index and Peer Group Peer Group: + Apollo Group + Connthian Colleges + Deviy + Education Management Corporation + ITT Educational Services + Strayer Education Coven
Slide 4: Allegations versus Facts: Corporate Governance
Coven Allegations versus Facts Di lent’s Allegations Unmet corporate governance demands The Facts Ten new corporate governance initiatives, considered best practices, either instituted or proposed; three new independent and experienced directors added
Slide 5: Corporate Governance Leadership
Corporate Governance Leadership Since May 2005: = Increased Board size from 7 to 9 directors, with 7 independent = Appointed 3 new independent Board directors = Terminated shareholder rights plan = Established minimum stock ownership guidelines for senior management = Established minimum stock owner
Slide 6: Corporate Governance Leadership
ate Governance Leadership Care er Education Corporation Corporate Governance Quotient (coq) 0 _ _— 83.1 64 — 501 364 10 Index Rating 4 [= nausty Rang April 2005 April 2006 NOTE: Doesnotinclude any beneft associated with the potential approvals by shareholders ® of the Company's proposals at the Comp
Slide 7: EduTrek's Weak Corporate Governance
EduTrek’s Weak Corporate Governance = Under Mr. Bostic’s leadership at EduTrek, the company had a dual class voting structure = The structure gave holders of Class B stock (most significantly, Mr. Bostic) ten votes per share compared to one vote per share for the Class A holders = This gave Mr. Bost
Slide 8: Highly Qualified Board Nominees
Coven Highly Qualified Board Nominees = Patrick W. Gross has been a director of CEC since December 2005. Mr. Gross has served as, Chairman of The Lovell Group, a private business and technology advisory and investment firm, since 2002. Mr. Gross is a founder and served as principal executive officer
Slide 9: Allegations versus Facts
Allegations versus Facts Di lent’s Allegations The Facts
Slide 10: Legal / Regulatory Evolution
Legal / Regulatory Evolution 2 dune 2004 EC Midwest Regional Secures Class fF Inlends to d ‘Acton Lawsuit June 2004 duly 2004 Termination SEC Formal Board Formed Special Investigation Commitee eeUlnes September 2004 . G CECO Affirmed DOJ August2004 Investigation Robert MeNemera Hired ©0Minuies Episo
Slide 11: Allegations versus Facts: High drop-out rate
Allegations versus Facts lent’s Allegations The Facts * High drop-out rate a "
Slide 12: Strong Student Outcomes
Strong Student Outcomes CECO has one of the strongest graduation rates amongst its peers in the proprietary education sector GRADUATION RATES 80.0% hae | —e— Career Education 60.0% - —» INTE 50.0% — 3 Strayer ————— ———— | 40.0% DeVry ener a os —%— Education Management 10.0% = = coal 0.0% Corinthian
Slide 13: Allegations versus Facts: SACS probation
Allegations versus Facts Di lent’s Allegations The Facts = Inadequate response to Intensive and detailed plan for addres: probation by SACS SACS recommendations, including strat. change management a ny
Slide 14: AIU Problems Under Bostic's Leadership
AIU Problems Under Bostic’s Leadership = 1997: SACS* placed AIU “on sanction” for 6 months for failing to resolve 8 recommendations = 2000: AIU failed to meet the Department of Education’s financial responsibility standards = 2001: AIU failed to resolve13 SACS recommendations by the time of the CEC
Slide 15: AIU / SACS Update
AlU / SACS Update = Dr. George Miller was appointed as Chief Executive Officer of American InterContinental University (AIU) in March 2005 = Prior to joining AIU, Dr. Miller served as president of two traditional colleges, one accredited by SACS and the other accredited by the Middle States Associat
Slide 16: AIU / SACS Timetable
AIU / SACS Timetable 2006 Timetable for Addressing SACS’ Recommendations Feb - March Completed third-party assessment April - June Implementing recommended changes July Third-party reassessment September Submit monitoring report to the Commission on Colleges (COC) of SACS October Special Committee v
Slide 17: Bostic Recommendations versus Reality
Bostic Recommendations versus Reality Bostic Recommendations = Present a plan to SACS for review and comment + Implement the plan at main campus in Atlanta * Appoint Bostic’s slate to AIU Board = Appoint an AIU President & CEO (based in Atlanta) = Request more time to complete SACS review Reality AI
Slide 18: Allegations versus Facts: Operating costs
Allegations versus Facts Dissident’s Allegations The Facts Operating costs Strong financial performance, including 5 year exceeding those of compounded annual growth rate strongest peers. Operating among its peers, and solid operating margins margins require improvement. a "
Slide 19: 2005 Company Financial Highlights
2005 Company Financial Highlights = 18% increase in revenue to $2.0 billion = 32% increase in earnings per share (EPS) = Substantial cash flow generation; over $400 million cash on hand at 12-31-05 = Stock repurchase of $200 million (approximately 5.3 million shares)
Slide 20: Solid Operating Margins
Solid Operating Margins CECO has consistently improved operating income margins and has climbed among its peer group tee 2% Cran 5 Dey 58% Edastae Management 6% ir 2% Soyer 30% Gewitenm Source: NASDAQ pocetng
Slide 21: Strong Track Record of Financial Growth
Strong Track Record of Financial Growth Five Year Compounded Annual Growth R: COMPANY Career Education Apollo Group Education Management Corinthian Colleges wT DeVry Strayer Education Yo. Source: Publicly avaiable company press releases: based on calendar year calculations Coven
Slide 22: Allegations versus Facts: Stockholder confidence
Coven Allegations versus Facts lent’s Allegations Stockholders have no confidence in management The Facts Our largest stockholder, Ariel Capital Management, continues to increase its position and has pledged its support to management by voting for CEC’s director nominees and proxy
Slide 23: Support from Largest Stockholder
Support from Largest Stockholder &) ARIEL (Million Shares) 140 not 100+ sot sot aot 204 oot JUN 30,2005 SEP 30,2005 DEC 31, 2005 ® ‘Source: Schedule 136 and Amendment No, 1 to Schedule 136 fled with the SEC ‘0n 10-11-05 and 2-14.05, respectively by viel Capital Management LLC a
Slide 24: Allegations versus Facts: Dissident slate
Allegations versus Facts Di lent’s Allegations The Facts Dissident slate better Experienced, knowledgeable management qualified than current team; experienced and committed, well board and management qualified, independent Board Coven
Slide 25: An Experienced, Independent Board
An Experienced, Independent Board ® = ——— =
Slide 26: EduTrek Performance Under Bostic
EduTrek Performance Under Bostic Performance and Regulatory Problems of EduTrek* under Bostic’s Leadership 8498 EduTrok ‘announces fiscal ‘earnings gam ki ie Pees ovvono 2 Going Concam DOES fnancl Opinion roppnsiiy stendade oT eo, Ga $1000 12/2099 Fails to meet DOE Merges Dalated ton \ suandardeovon
Slide 27: Bostic's Financial Engineering
Coven Bostic’s Financial Engineering * Opportunistic purchases of EduTrek common stock * December 2, 1999 + Bostic gave notice of conversion of a convertible note the very day CEC first called to express interest in EduTrek, enabling Bostic to receive over 1 million shares at 93¢ per share + Bostic
Slide 28: Allegations versus Facts: Transformation
Allegations versus Facts Dissident’s Allegations The Facts Enterprise-wide Current improvement already apparent in transformation necessary community reputation and other growth drivers, to improve long-term and foundation for long-term growth already performance laid
Slide 29: Centralized services
Centralized services: Financial Accounting & Reporting ‘Treasury Fun —S———T | Dz—Suce—H> Com; Information Technology Student Financing
Slide 30: An Evolving Business Model
An Evolving Business Model High-quality, sustainable growth company 2006-Beyond »
Slide 31: 2006 Initiatives
2006 Initiatives Sharpened Customer Focus Culture of Compliance = Employer of Choice = Market Expansion = Return on Investment Focus = Operational and Educational Excellence = Business Model Discipline a
Slide 32: Strategies for Future Growth
Strategies for Future Growth = New programs and initiatives = Program expansions = Enhanced partnerships with corporations and the military = Expansion of online, 4-year and hybrid offerings = Satellite campuses = International expansion = Acquisitions = Start-ups ® = New enthusiasts and digital med
Slide 33: CEC's Future is Bright
CEC’s Future is Bright = We have the right, student-focused business strategy = We are focused on the entire student lifecycle = We have significant growth potential and strong competitive advantages in all of our divisions = Weare building a compliance culture and are dealing effectively with pendi
Slide 34: Forward-looking statements
This presentation contains certain “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 risks and uncertainties that could cause our actual growth, results of
Slide 35: Addendum
| ADDENDUM ie)
Slide 36: Our Management Team
Our Management Team ie)
Slide 37: Career Education Corp. Management Team
Career Education Corp. Management Team John M. Larson, Chairman of the Board, President and Chief Executive Officer Patrick K. Pesch, Executive Vico President and Chief Financial Officer Janice L. Block, Senior Vice President, General Counsel and Corporate Secretary ‘Steven M, Calbi, Senior Vice Pre
Slide 38: Our Brands
Our Brands Coven
Slide 39: Our Brands
Coven "American InterContinental University Provides varying educational nseds ofa culturally diverse and geographically dispersed student body with tho goal of. proparing students acadomicaly, personaly and professionally for successful caters. Includes 7 campuses and AU Online. | Colorado Technica
Slide 40: International Academy of Design & Technology; College Division; Gibbs
International Academy of Design & Technology Provides postcecondary degree program: visual ans professions, including fashion design, intenor Aesign, information technology, retail merchandising, ‘advertising design, and mutimadia & Web design. Includes 11 campuses, ‘College Division Encompasses al
Slide 41: Searchable text section of graphics
Searchable text section of graphics shown above [GRAPHIC] CAREER EDUCATION CORPORATION the year of the graduate Investor Presentation May 1, 2006 Allegations versus Facts Dissident’s Allegations The Facts • “Troubled” company • Industry leader with a strong track record and a plan for the future • D