Good day, everyone, and welcome to the Q4 2016 Career Education Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instruction] And please note that this event is being recorded. I would now like to turn the conference over to Sam Gibbons of Investor Relations. Please go ahead.

Thank you, William. Good afternoon, everyone, and thank you for joining us. With me on the call today is Todd Nelson, President and Chief Executive Officer; A.J. Cederoth, Chief Financial Officer; and Ashish Ghia, Vice President of Finance. This conference call is being webcast live within the Investor Relations section at careered.com. A webcast replay will also be available on our site and you can always contact the Alpha IR Group for investor relations support. Let me remind you that this afternoon’s earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act. These statements are based on assumptions made by and information currently available to Career Education and involve risks and uncertainties that could cause actual future results, performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to, those factors identified in Career Education’s Annual Report on Form 10-K for the year ended December 31, 2016, and other filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments or change circumstances, or for any other reason. In addition, today’s remarks refer to non-GAAP financial measures which are intended to supplement, but not substitute for the most directly comparable GAAP measures. The earnings release and slide presentation which accompany today’s call and which contain financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures are available within the Investor Relations section at careered.com. So with that, I’d like to turn the call over to Todd Nelson. Todd?

Thank you, Sam. Good afternoon, and thanks to everyone who’s joining us on the call today. Today, I am going to cover a few key items including overall academic and operational progress at our university group; major initiatives and achievements and some key highlights including our financial results which showed continued improvement and came in ahead of our expectations. Now let me begin with the call by reviewing some of the academic and operating progress that we achieved during 2016. The past year at CEC was marked with a strong focus on across the board improvements and operating processes and efficiencies that we believe has enhanced our position as a long-term leader in post-secondary education. Our teams have been focused on refining and executing operational changes while undertaking several new initiatives and investments. With the overall goal of improving student experiences both before and after they enrolled in our programs. A new management team was put in place in 2015 with a streamline reporting structure that has been more effective and efficient. We also continue to maintain and build upon a compensation structure that emphasizes and promotes a culture of ownership which further align with shareholder interest. I truly believe that we have some of the best talent in our industry and are maintaining an excellent employee base. You can see that quality through this year's results. We are motivated and focused with a clear vision to serve and educate our students and the progress we have achieved has allowed us to invest more time, intellectual capital and dollar in various student serving areas of our university platforms. During the year, we continue to focus on improving student outcomes and retention by leveraging technology and making progressive updates to our curriculum, and of course sequencing. We have further enhanced our…

Thank you, Todd. As we review the financial performance, I want to start with results for the consolidated company. On Slide 4, we have summarized the consolidated results for Q4 and the full year, as well as provided a comparison to 2015. For the quarter, revenue was $155.3 million, which was down 22.4% year-over-year. And for the full year revenue was $704.4 million, a 16.9% decline year-over-year. The decline in revenue is primarily attributed to the teach-out strategy in our Culinary Arts and Transitional Group segments. Excluding the impact of the settlement charges that Todd discussed earlier, the consolidated operating loss was $23.9 million for the quarter and $0.3 million for the full year. This compares to operating losses of $3.9 million for the fourth quarter and $92.2 million for the full year in 2015. Please note that these figures include $34.7 million in 2016 and $17.9 million in 2015 for charges related to the remaining lease obligations for the vacated space within our teach-out operations. On a consolidated basis without adjustments for legal reserves, we posted a net loss for the quarter of $32.9 million as compared to net income of $142.7 million in the prior year quarter. As a remainder, last year's fourth quarter net income included a reversal of a tax valuation allowance of approximately $147 million. Full year consolidated adjusted EBITDA was $41.9 million which was a $46.4 million improvement versus 2015. We ended the quarter with $207.2 million of cash, cash equivalents, restricted cash and available for sale short term investments which will be referred to as yearend cash balances for the remainder of today's discussion. Cash flow generated from operations for the year was $5.9 million which compares favorably to cash used from operations of $21.7 million for the prior year. This improvement in…

Thanks, A.J. In closing, 2016 was an excellent year of execution and operational improvement for the company during which we met and exceeded our operational and financial targets. We developed a strong track record of performance against our goals and 2017 will be a year in which we transition from a period of teach-outs to what we believe will be a period of sustainable and responsible growth and further we expect an inflection point in our overall operating performance in 2018. We have a solid cash position of $207 million in yearend cash balances which was considerably greater than our initial 2016 outlook, and will enable us to continue making smart investments in student facing services, faculty and technology that we believe will continue to enhance overall retention and outcomes for students. As we entered 2017, we remain focused on improving the market position of the universities by strengthening the breadth of program offering and leveraging faculty and technology improvements. As the operating performance of the company improves we'll continue to analyze and evaluate incremental growth investments for the benefit of our students. We are focused on improving the strength of our overall university group as we seek to improve retention and outcomes that ultimately benefit all of our students and shareholders. I remain excited about the talent we have throughout our company as well as the opportunity we have long term to grow responsibly, through focus on student outcomes, quality and retention. Lastly, I want to thank all of our students, employees and shareholders for their continued support. Thank you again for joining us this afternoon. And we will now open the call for analyst questions.

Thank you. We will now begin the question-and-answer session. [Operator Instruction] And the first question of today is Peter Appert with Piper Jaffray. Please go ahead.

Todd, congratulations on the momentum and the turnaround efforts, they defiantly are impressive in terms of what you guys [Multiple Speakers]. You mentioned -- I think you mentioned positive momentum in the first quarter from a start perspective, any more color or specifics on that?

Yes, I mean there are two things that are happening as we said, we've really focused '16 more on retention, we will continue that focus, but also on improving the process, the front-end process including as I said AIU, and what we are starting to see as we come out of '17 is a positive new student enrollment and we are seeing an improvement in the CTU enrollment as well, new student enrollment as well. So our view as going forward, again, if -- obviously CTU being a larger scope, it takes a little more time to build that momentum. But, yes we are seeing, again, positive improvement at CTU and a positive trend at AIU and again we are very hopeful that that will continue through the year.

So positive trend that CTU, do you think you can be in positive territory in terms of year-to-year gains and starts in the first quarter?

Well, again if you look at where we have come from, it will be improvement. But to say at this point exactly, when that goes positive, certainly we are going to work towards that, but this is one of those things that you don’t want to get ahead of yourself.

Thanks, fair enough. And then the AUI numbers, obviously really standout in terms of the percentage gains you are seeing there, anything in particular you would call out in terms of drivers or maybe even any granularity in terms of program areas where you are seeing particular strength?

Well I think again, we have pretty good strength across most of our programs at both CTU and AIU, but I think in particular at AIU what's happened is, we changed the management structure there, we added a person that overseas all enrollments there, as well as looking at the entire admission process, reducing the amount of hand off that occurred. And that along with several other things that really improved the process. We are very encouraged by the fact that we continue to see good demand across both institutions and we hope to see that continue. As we mentioned about opening of the Phoenix advising and the admission center, the main driver behind that is, again, we see strong demand and so that’s, as you know a very good labor pool there. And so that’s again one of those things that we are hoping. Again we don’t want to get ahead of ourselves, but as we prepare to open that during the second half of '17. We are hoping to also see a little bit of lift from that as well.

Todd, you also mentioned changes in marketing channels and I think you talked about this for last couple of quarters, how far longer you're in that process?

What we've done, I think we've -- although CEC has done a good job. We provide a higher level of sophistication there and really looking carefully at where not only the leads are been generated, but obviously the quality in the context of the cost, and our view is that we can continue to bring down our cost of acquisition, partially due to the fact that, again, a better admissions model. But frankly our ability to continue to generate good quality leads at a reasonable cost and, so I guess that's a long way of saying, we see that there is still opportunity to lower our acquisition cost. But again our ability to generate the higher quality lead at a more reasonable cost, I would say we're well along in a process, but there is still, we believe some benefits to be gained from that.

And then maybe lastly just, post the settlement this week, can you just remind us sort of the most significant things that might still be outstanding from your perspective, and I know you can quantify potential future charges you might have to take, but what's left?

Well I would say, I don’t know if this is necessarily a positive, but one of the nice things that I think that any of us can do as shareholders is make sure you refer to both the 10-K and the prior 10-Q's, everything that we're aware of, we're very careful to include it in there. And so that's really is the best source to look, certainly if I'm aware of anything it will be in there. That's number one. Number two, I think if we look at in the context of the one that was settled, that was filed in 2008, so again by looking at what's -- the potential that's maybe out there that we don't know about, let's hope there's not, but the timeline associated with those things, I think because again sometimes the frivolous nature of them, it even takes years to get them where they are. But again the 10-K and the 10-Q's that we've filed in the past, I think that gives you a pretty good comfort level of what's out there.

Actually, one more last thing, and that is, you're seeing much improved momentum from -- starting enrollment perspective at AIU and I know you've got a balancing act here in terms of incremental spending to sustain that versus driving increased profitability. So, I guess the trick question here is, how do you balance those two things and is it possible that we could see some measurable improvement in profitability and margins at AIU in '17?

Well I think really the philosophy here is responsible and sustainable growth and we're going to continue to focus on that. And I think this year we're excited about the potential prospects of that Peter. I think always you're balancing that with the financial performance, but our view of it is, there is no reason why, as an organization we don't have the potential to have a competitive margin [ph] for our industry. We have two great universities, we have a very good management team in place and we're encouraged by the demand that we're seeing. And so, again you've known me for a while, and the ability to balance the two is something that I think we have a pretty good feel for what we should be doing. And so again I think it comes back to that responsible and sustainable growth that can be achieved by still expanding your margins, but again, you want to do it in a prudent and careful way to make sure that the most important thing is, you're providing a quality education for the students that'll show up through the retention and the outcomes. And that really is the guiding principle, and we're not going to grow beyond our ability to make sure that the quality education is there.

Got it. Understood, thanks very much and congratulations again.

Showing no further questions so this will conclude our question-and-answer session. I’ll now like to turn the conference back over to Todd Nelson for any closing remarks.

Well, again we appreciate you joining us this evening and we look forward to speaking with you again next quarter. Thank you.

The conference is now concluded. Thank you all for attending today’s presentation. You may now disconnect your lines.