ChinaEdu Reports Fourth Quarter and Fiscal Year 2012 Results

         ChinaEdu Reports Fourth Quarter and Fiscal Year 2012 Results

Fourth Quarter Net Revenue Exceeds Company Guidance, Increasing 12.4 Percent
Year-Over-Year

Full Year 2012 Net Revenue Increases 12.0 Percent Year-Over-Year

PR Newswire

BEIJING, March 27, 2013

BEIJING, March 27, 2013 /PRNewswire/ -- ChinaEdu Corporation (NASDAQ: CEDU)
("ChinaEdu" or the "Company"), a leading online educational services provider
in China, today announced its unaudited financial results for the fourth
quarter and fiscal year ended December 31, 2012.[1]

Fourth Quarter 2012 Highlights

  oTotal net revenue for the fourth quarter of 2012 was $21.8 million, a 12.4
    percent increase from $19.4 million in the corresponding period in 2011.
    Total net revenue exceeded Company guidance for the quarter.
  oNet revenue from online degree programs was $17.7 million, an increase of
    13.9 percent from $15.5 million in the corresponding period of 2011.
  oNet income attributable to ChinaEdu was $2.4 million, an increase of 552.8
    percent from $0.4 million in the corresponding period of 2011.
  oAdjusted net income attributable to ChinaEdu[2] was $2.9 million, an
    increase of 257.9 percent from $0.8 million in the corresponding period of
    2011.
  oNet income attributable to ChinaEdu per diluted ADS[3] was $0.144, an
    increase of 542.9 percent from $0.022 in the corresponding period of 2011.
  oAdjusted net income attributable to ChinaEdu per diluted ADS[4] was
    $0.173, an increase of 248.4 percent from $0.050 in the corresponding
    period of 2011.
  oThe number of revenue students[5] enrolled in online degree programs
    during the Fall 2012 semester increased 5.1 percent year-over-year to
    approximately 207,000 students.

Full Year 2012 Highlights

  oTotal net revenue for 2012 was $78.4 million, a 12.0 percent increase from
    $70.0 million in 2011.
  oNet revenue from online degree programs was $63.1 million, an increase of
    13.3 percent from $55.7 million in 2011.
  oNet income attributable to ChinaEdu was $6.1 million, an increase of 125.7
    percent from $2.7 million in the corresponding period of 2011.
  oAdjusted net income attributable to ChinaEdu was $9.0 million, an increase
    of 102.4 percent from $4.4 million in 2011.
  oNet income attributable to ChinaEdu per diluted ADS was $0.362, an
    increase of 126.0 percent from $0.161 in 2011.
  oAdjusted net income attributable to ChinaEdu per diluted ADS was $0.535,
    an increase of 103.0 percent from $0.263 in 2011.
  oThe number of revenue students in online degree programs during 2012
    increased roughly 12.4 percent over 2011 to approximately 400,000
    students.

Julia Huang, executive chairman of ChinaEdu commented, "2012 was another
successful year for ChinaEdu. Remaining focused on growth in our online degree
programs, we expanded enrollment during the year to 400,000 revenue students.
There were exciting developments in other areas of our business in 2012 as
well. Particularly, several non-degree continued education programs for
teachers were launched in 2012 and our recently expanded K-12 online
interactive tutoring and Q&A programs have already gained traction and are
showing encouraging results. Furthermore, enrollments at our private schools
grew beyond expectations during the year as our brand name continues to draw
in talented students." She continued, "As we look to 2013, we will continue to
grow our core business and explore opportunities that leverage our
online-learning enabling capabilities. We remain committed to technological
innovation in education and will continue to develop next generation
technology platforms and interactive and mobile learning applications. Online
learning has become more acceptable to users and mobile devices have become
more readily available. We plan to penetrate the market further, applying our
technological advantage across all areas of our business platform."

Mr. Simon Mei, chief financial officer commented, "Recognizing our success in
2012 and the opportunities that lay ahead, the Company recently decided to
make a major reinvestment in our business by negotiating a repurchase of
shares. The repurchase program was completed at the end of February 2013. The
Company repurchased 19,695,552 ordinary shares or the equivalent 6,565,184
ADSs. This is equal to 36.9% of the total issued ordinary shares of 53,428,219
prior to the transaction. The completion of the stock repurchase reflects the
board of directors' and management's continued commitment to enhancing
stockholder value, as well as confidence for the company's future business
perspectives. Other factors being equal, the stock repurchase will increase
the Company's earnings per share."

Financial Results for the Fourth Quarter Ended December 31, 2012

Net Revenue

Total net revenue for the fourth quarter of 2012 was $21.8 million, a 12.4
percent increase from $19.4 million in the corresponding period in 2011.

Net revenue from online degree programs for the fourth quarter of 2012 was
$17.7 million, a 13.9 percent increase over $15.5 million in the corresponding
period in 2011. The increase in net revenue from online degree programs was
primarily related to continued expansion and optimization of the Company's
learning centers network, as well as organic growth in revenue students
enrolled in online degree programs. Enrollment for the 2012 Fall semester
online degree programs was approximately 207,000 revenue students, a 5.1
percent increase from approximately 197,000 revenue students enrolled in the
Fall semester in 2011.

As of December 31 2012, ChinaEdu's learning centers network was providing
recruiting services for 22 universities with 118 operational learning centers,
of which 57 were proprietary centers[6] and 61 were contracted centers[7].
This compares to 105 operational learning centers as of December 31, 2011, of
which 61 were proprietary and 44 were contracted centers.

Net revenue from non-degree programs, including online tutoring programs,
private primary and secondary schools and international and elite curriculum
programs in the fourth quarter of 2012 was $4.1 million, a 6.4 percent
increase from $3.8 million in the fourth quarter of 2011. Of that,
approximately $0.4 million was attributable to increased enrollment at our
private school in the city of Anqing.

Cost of Revenue

Total cost of revenue for the fourth quarter of 2012 was $9.8 million, an
increase of 13.3 percent, from $8.7 million in the corresponding period of
2011.

Cost of revenue for online degree programs in the fourth quarter of 2012 was
$6.8 million, an increase of 16.2 percent compared to $5.8 million in the
corresponding period of 2011. The increase in cost of revenue is mainly
attributable to increased staff related costs.

Cost of revenue for non-degree programs in the fourth quarter of 2012 was $3.0
million, an increase of 7.4 percent from $2.8 million in the fourth quarter of
2011. The increase is attributable to increases in staff related costs and
service fees for the private school in Anqing as well as the online tutoring
program.

Gross Profit and Gross Margin

Gross profit for the fourth quarter of 2012 was $11.9 million, compared to
$10.7 million in the corresponding period of 2011. Gross margin decreased
slightly to 54.8 percent, compared to 55.1 percent for the corresponding
period in 2011.

Gross margin for online degree programs decreased slightly to 61.6 percent,
from 62.3 percent in the fourth quarter of 2011. The decrease was primarily
due to an overall increase in the percentage of total net revenue contributed
by the Company's learning centers network. The learning centers network's
sales and service based model results in a higher cost of sales, whereas the
joint venture model is more operationally driven. In general, more revenue
generated from learning centers results in lower gross margin for our overall
online degree programs.

Gross margin for online tutoring programs decreased to 37.7 percent, from 55.7
percent in fourth quarter of 2011, mainly due to the increased service fees
associated with the expansion of the Company's interactive course offerings.

Gross margin for private schools in the fourth quarter of 2012 decreased to
20.4 percent, compared to 24.8 percent in the corresponding period in 2011.
The decrease of gross margin was primarily due to increased labor costs at our
private school in Anqing.

Operating Expenses

Total operating expenses were $7.6 million in the fourth quarter of 2012, a
decrease of 3.6 percent, from $7.9 million in the corresponding period in
2011. As a percentage of net revenue, total operating expenses decreased to
34.8 percent, compared to 40.6 percent in the corresponding period in 2011.
The decrease in total operating expense was the result of the following:

  oGeneral and administrative expenses for the fourth quarter of 2012 were
    $3.7 million, a decrease of 4.8 percent from $3.9 million in the
    corresponding period in 2011. As a percentage of net revenue, general and
    administrative expenses decreased to 16.9 percent from 20.0 percent in the
    same period in 2011.
  oSelling and marketing expenses were $2.3 million in the fourth quarter of
    2012, a decrease of 6.8 percent compared to $2.5 million in the
    corresponding period in 2011. As a percentage of net revenue, selling and
    marketing expenses decreased to 10.6 percent from 12.7 percent in the same
    period in 2011. The decrease in selling and marketing expenses was
    primarily due to a reduction in barter transactions related to online
    tutoring programs.
  oResearch and development expenses for the fourth quarter of 2012 were $1.6
    million, an increase of 4.6 percent compared to $1.5 million in the
    corresponding period in 2011. As a percentage of net revenue, the research
    and development expense was 7.3 percent in the fourth quarter of 2012,
    decreasing from 7.9 percent in the same period of 2011. The slight
    increase in research and development expenses was primarily attributable
    to increased staff costs.

Income from Operations

Income from operations in the fourth quarter of 2012 was $4.3 million, an
increase of 54.5 percent compared to $2.8 million in the corresponding period
of 2011. Operating margin increased to 19.9 percent in the fourth quarter of
2012, compared to 14.5 percent in the corresponding period of 2011.

Adjusted income from operations, a non-GAAP measure defined as income from
operations excluding share-based compensation, amortization of intangible
assets, land use rights and intangible assets impairment, was $4.9 million for
the fourth quarter of 2012, an increase of 48.6 percent compared to $3.3
million in the corresponding period of 2011.

Adjusted operating margin, a non-GAAP measure defined as the ratio of adjusted
income from operations (non-GAAP) over net revenue, for the fourth quarter of
2012 increased to 22.3 percent, compared to 16.9 percent for the corresponding
period of 2011.

Interest and Investment Income

Interest and investment income for the fourth quarter of 2012 remained stable
at $0.5 million, compared to the corresponding quarter of 2011.

Income Tax Expense

In the fourth quarter of 2012, income tax expense was $0.9 million and the
effective income tax rate was 17.5 percent.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests remained stable at $1.8
million in the fourth quarter of 2012, compared to $1.7 million in the
corresponding period in 2011.

Net Income Attributable to ChinaEdu

Net income attributable to ChinaEdu, which is net income, excluding net income
attributable to non-controlling interests, was $2.4 million in the fourth
quarter of 2012, representing a significant increase of 552.8 percent from
$0.4 million in the corresponding period of 2011. The increase was primarily
due to an increase in gross profit across online degree programs, as well as
effective expenses control.

Net income attributable to ChinaEdu per basic and diluted ADS was $0.154 and
$0.144, respectively, for the fourth quarter of 2012, compared to $0.024 and
$0.022, respectively, for the corresponding period in 2011.

Adjusted net income attributable to ChinaEdu (non-GAAP) was $2.9 million in
the fourth quarter of 2012, compared to $0.8 million in the corresponding
period of 2011. Adjusted net margin, a non-GAAP measure defined as the ratio
of adjusted net income attributable to ChinaEdu (non-GAAP) over net revenue,
was 13.5 percent in the fourth quarter of 2012, compared to 4.2 percent in the
corresponding period of 2011.

Adjusted net income attributable to ChinaEdu per basic and diluted ADS
(non-GAAP) was $0.185 and $0.173 respectively, for the fourth quarter of 2012,
compared to $0.051 and $0.050, respectively, for the corresponding period of
2011.

Deferred Revenue

As of December 31, 2012, deferred revenue was $23.2 million, consisting of
current deferred revenue in the amount of $21.5 million and non-current
deferred revenue in the amount of $1.7 million.

In general, Fall semester tuition for online degree programs is received
during the fourth quarter but is recognized both in the fourth quarter of the
current year and the first quarter of the following year.

Private school revenue is received in September, but amortized over 6 or 12
months while online tutoring program revenue can be received at program
enrollment and is mostly amortized within 12 months.

Cash and Cash Equivalents and Term Deposits

As of December 31, 2012, the Company reported cash and cash equivalents and
term deposits of $76.7 million, which primarily consisted of cash and cash
equivalents, and term deposits with original maturity terms of greater than
three months but less than one year.

Amounts Due from Related Parties

Amounts due from related parties, which represents cash owed to the Company by
collaborative alliance partners, were $48.5 million as of December 31, 2012
compared to $38.2 million as of December 31, 2011.

Fiscal Year 2012 Results

Net Revenue

Total net revenue in 2012 was $78.4 million, an increase of 12.0 percent from
$70.0 million in 2011.

Net revenue from online degree programs in 2012 was $63.1 million, a 13.3
percent increase from $55.7 million in 2011. This increase was primarily
attributable to strong enrollment growth in online degree programs in 2012,
particularly through our learning centers network. In aggregate, the number of
revenue students enrolled in online degree programs was approximately 400,000
in 2012, a 12.4 percent increase from approximately 356,000 revenue students
enrolled in online degree programs in 2011.

Net revenue from non-degree programs in 2012 was $15.2 million, compared to
$14.2 million in 2011. The 7.0 percent increase was primarily attributable to
increased student enrollments and increased tuition fees at our Anqing private
school.

Cost of Revenue

Total cost of revenue in 2012 was $32.4 million, an increase of 8.9 percent
from $29.8 million in 2011.

Cost of revenue for online degree programs in 2012 was $22.1 million, an
increase of 10.8 percent compared to $19.9 million in 2011. The increase in
cost of revenue was primarily due to an increase in staff costs resulting from
headcount increases across the Company, as well as an increase in courseware
costs related to new training courses and the growth of student body.
Additionally, the learning centers network's sales and service based model
results in a higher cost of sales. The more revenue generated from learning
centers, the higher the cost of revenue incurred.

Cost of revenue for non-degree programs in 2012 was $10.3 million, an increase
of 5.0 percent compared to $9.8 million in 2011. The increase was primarily
attributable to increased staff and transportation costs at the Anqing School,
as well as an increase in service costs and leasing costs related to our
online tutoring business.

Gross Profit

Gross profit for 2012 was $45.9 million, an increase of 14.4 percent compared
with $40.2 million in 2011.

Gross margin in 2012 was 58.6 percent, compared with gross margin of 57.4
percent in 2011. The increase was primarily due to an increase in net revenue
coupled with stringent cost controls over the year.

Operating Expenses

Total operating expenses in 2012 were $31.3 million, a 4.1 percent increase
from $30.1 million in 2011. The increase was primarily attributable to the
following:

  oGeneral and administrative expenses in 2012 were $16.1 million, a 6.7
    percent increase from $15.1 million in 2011. The increase was mainly the
    result of an early termination of a lease agreement, an increase in stock
    related expenses due to the granting of restricted shares for staff, as
    well as an increase in conference attendance and travel costs.
  oSelling and marketing expenses in 2012 were $7.8 million, an 8.3 percent
    decrease from $8.5 million in 2011. The decrease in selling and marketing
    expenses was primarily attributable to a significant decrease in marketing
    activities surrounding international and elite curriculum programs.
  oResearch and development expenses in 2012 were $6.5 million, flat with
    2011.
  oThe Company incurred an intangible asset impairment charge in relation to
    the BCIT (British Columbia Institute of Technology) and FEC (Friendly
    Experimental Class) programs in the international and elite curriculum
    division in the third quarter of 2012, resulting in an aggregate non-cash
    charge of $0.9 million (RMB5.9 million).
  oShare-based compensation in 2012, which was allocated to the related cost
    of revenue and operating expense line items, was $1.3 million, increased
    27.4% percent from $1.0 million in 2011.

Income from Operations

Income from operations was $14.6 million in 2012, an increase of 44.9 percent
from $10.1 million in 2011. Operating margin was 18.7 percent in 2012,
compared to 14.4 percent in 2011.

Adjusted income from operations (non-GAAP) in 2012 was $17.6 million, an
increase of 48.1 percent compared to $11.9 million in 2011. Adjusted operating
margin (non-GAAP) was 22.5 percent in 2012, compared to 17.0 percent in 2011.

Interest Income and Investment Income

Interest income and investment income increased 52.1 percent to $2.4 million
in 2012, compared to $1.6 million in 2011. Interest income increased $0.7
million while investment income increased $0.1 million in 2012.

Income Tax Expense

Income tax expense in 2012 was $4.2 million, compared with $2.7 million in
2011. The 2012 effective tax rate was 24.1 percent, compared with 23.2 percent
of 2011.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests was $7.3 million in 2012,
an increase of 14.1 percent compared to $6.4 million in 2011. The increase was
primarily due to the non-controlling interest impact related to the increase
in net income from online degree programs.

Net Income attributable to ChinaEdu

Net income attributable to ChinaEdu was $6.1 million in 2012, representing an
increase of 125.7 percent from $2.7 million in 2011. Net margin was 7.8
percent in 2012, compared to 3.9 percent in 2011.

Adjusted net margin was 11.5 percent in 2012, compared to 6.4 percent in
2011.

First Quarter 2013 Guidance

ChinaEdu management expects total net revenue in the first quarter of 2013 to
range from RMB116 million to RMB120 million or $18.6 million to $19.3 million,
representing a 1.8 percent to 5.3 percent increase from RMB114 million or
$18.3 million compared to the corresponding period in 2012.

Conference Call

ChinaEdu's management will hold an earnings conference call at 8:00 a.m. U.S.
Eastern Time on March 28, 2013 (8:00 p.m. Beijing/Hong Kong Time on March 28,
2013).

Dial-in details for the earnings conference call are as follows:

International: +65 67239382
Hong Kong:   +852 25214709
United States:  +1 (718) 354-1231

Toll-free China, Mobile:        4006208038
Toll-free China: 8008190121
Toll-free United States:       1 (866) 519-4004
Conference ID:   21948711
Conference Password:           ChinaEdu

A live and archived webcast of the conference call will be available on the
investor relations page of ChinaEdu's website at http://ir.chinaedu.net and a
replay of the conference call may be accessed by phone until April 5, 2013.

Dial-in numbers for the replay are as follows:

Toll Free United States        +1 (855) 452-5696
International +61 2 8199 0299
Conference ID:    21948711
Conference Password:           ChinaEdu

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information
presented in accordance with Generally Accepted Accounting Principles in the
United States of America ("GAAP"), the Company uses non-GAAP measures of
income from operations and net income attributable to ChinaEdu, which are
adjusted from results based on GAAP to exclude certain non-cash items of
share-based compensation, amortization of intangible assets and land use
rights and intangible assets impairment. Adjusted operating margin is defined
as the ratio of adjusted operating income from operation over net revenue.
Adjusted net income attributable to ChinaEdu per basic and diluted ADS are
non-GAAP measures which are computed using adjusted net income attributable to
ChinaEdu over the number of ADSs used in net income attributable to ChinaEdu
per basic and diluted ADS calculation.

These non-GAAP financial measures are provided to enhance the investors'
overall understanding of the Company's current and past financial performance
in on-going core operations as well as prospects for the future. These
measures should be considered in addition to results prepared and presented in
accordance with GAAP, but should not be considered a substitute for or
superior to GAAP results. Management considers the non-GAAP information as
important measures internally and therefore deems it important to provide all
of this information to investors.

About ChinaEdu

ChinaEdu Corporation is an educational services provider in China,
incorporated as an exempted limited liability company in the Cayman Islands.
Established in 1999, the Company's primary business is to provide
comprehensive services to the online degree programs of leading Chinese
universities. These services include academic program development, technology
services, enrollment marketing, student support services and finance
operations. The Company's other lines of businesses include the operation of
private primary and secondary schools, online interactive tutoring services
and providing marketing, support for international and elite curriculum
programs and online learning community for adult students.

The Company believes it is the largest service provider to online degree
programs in China in terms of the number of higher education institutions that
are served and the number of student enrollments supported. The Company
currently has entered into collaborative alliances with 12 universities,
ranging from 10 to 50 years in length. The Company has also entered into
technology agreements with 6 universities. Besides, ChinaEdu performs
recruiting services for 22 universities through nationwide learning center
network.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including certain plans,
expectations, goals, and projections, which are subject to numerous
assumptions, risks, and uncertainties. Forward-looking statements involve
known and unknown risks, uncertainties and contingencies, many of which are
beyond our control which may cause actual results, levels of activity,
performance or achievements to differ materially from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. The Company's actual results could differ
materially from those contained in the forward-looking statements due to a
number of factors, including those described under the heading "Risk Factors"
in the Company's Annual Report on Form20-F for the year ended December31,
2011, and in documents subsequently filed by the Company from time to time
with the Securities and Exchange Commission. Unless required by law, the
Company undertakes no obligation to (and expressly disclaim any such
obligation to) update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

    The reporting currency of the Company is RMB, but for the convenience of
    the reader, the amounts for the three months and the years ended on
    December 31, 2012 and 2011 are presented in U.S. dollars. Unless otherwise
    stated, all translations from RMB to U.S. dollars were made at the rate of
    RMB6.2301 to $1.00, the noon buying rate in effect on December 31, 2012 in
    the H.10 statistical release of the Federal Reserve Board. The Company
[1] makes no representation that the RMB or U.S.dollar amounts referred could
    be converted into U.S.dollars or RMB, as the case may be, at any
    particular rate or at all. For analytical presentation, all percentages
    are calculated using the numbers presented in the financial statements
    contained in this earnings release. An explanation of the Company's
    non-GAAP financial measures is included in the section entitled "Non-GAAP
    Financial Measures" below, and the related reconciliations to GAAP
    financial measures are presented in the accompanying financial statements.
    "Adjusted net income attributable to ChinaEdu" is a non-GAAP measure
[2] defined as net income attributable to ChinaEdu excluding share-based
    compensation net of non-controlling interests' portion, amortization of
    intangible assets and land use rights, and intangible assets impairment.
[3] "ADS" is American Depositary Share. Each ADS represents three ordinary
    shares.
    "Adjusted net income attributable to ChinaEdu per diluted ADS" is a
[4] non-GAAP measure which is computed using adjusted net income attributable
    to ChinaEdu over the number of ADSs used in net income attributable to
    ChinaEdu per diluted ADS calculation.
    "Revenue students" refers to students of university online degree programs
    who have paid tuitions. The numbers for the three months ended December
[5] 31, 2012 and 2011 are revenue students in fall 2012 and fall 2011,
    respectively. The numbers for the years ended December 31, 2012 and 2011
    are total revenue students in spring 2012 and fall 2012, in spring 2011
    and fall 2011 respectively.
    Proprietary centers refer to self-owned learning centers operated either
[6] under the Company's own brand name or the brand name of a university
    pursuant to a licensing arrangement with that university.
    Contracted centers refer to agreement with third party learning centers
    pursuant to which the Company only provides assistance applying for
[7] approval from provincial level education authorities as well as securing
    additional university online degree programs. In return, the Company
    receives a percentage of the tuition earned by these third party learning
    centers.

For investor and media inquiries, please contact:

Helen Plummer
Senior Investor Relations Coordinator
ChinaEdu Corporation
Phone: +1 908-442-9395
E-mail: helen@chinaedu.net

Simon Mei
Chief Financial Officer
ChinaEdu Corporation
Phone: +86 13810568391
E-mail: simon@chinaedu.net



ChinaEdu Corporation
Unaudited Condensed Consolidated Balance Sheets
(inthousands,unaudited)
                                                                                                         December31, December31, December31,
                                                                                                         2011         2012         2012
                                                                                                         RMB          RMB          US$
Current assets:
 Cash and cash equivalents                                                                               273,746      385,922      61,945
 Term deposits                                                                                          98,163       92,028       14,772
 Short-term investments                                                                                  34,648       23,575       3,784
 Accounts receivable, net                                                                               31,478       34,917       5,605
 Prepaid expenses and other current assets                                                              22,725       23,455       3,763
 Amounts due from related parties-current                                                                238,016      260,184      41,762
 Deferred tax assets-current                                                                             5,697        9,571        1,536
Total current assets                                                                                    704,473      829,652      133,167
 Property and equipment, net                                                                            239,210      238,563      38,292
 Amounts due from related party-non-current                                                              -            41,979       6,739
 Land use rights                                                                                         26,657       26,049       4,181
 Deposits paid for acquisition of property and equipment                                                 17,902       3,873        622
 Deferred tax assets-non-current                                                                         8,217        2,085        335
 Long-term investments                                                                                   -            801          129
 Rental deposits                                                                                         2,213        1,497        240
 Acquired intangible assets, net                                                                        63,638       54,499       8,748
 Goodwill                                                                                               43,255       43,255       6,943
Total assets                                                                                            1,105,565    1,242,253    199,396
Liabilities and equity
Current liabilities:
 Accountspayable(includingaccountspayableoftheconsolidatedVIEwithoutrecoursetothe           2,239        2,401        385
  Group of 1,975 and 2,007 as of December 31, 2011 and December 31, 2012, respectively)
 Deferredrevenues-current(includingdeferredrevenuesoftheconsolidatedVIEwithoutrecourseto     125,332      134,175      21,537
  the Group of 20,525 and 23,518 as of December 31, 2011 and December 31, 2012, respectively)
 Accrued expenses and other current liabilities (including accrued expenses and other current
  liabilities of the consolidated VIE without recourse to the Group of 18,644 and 22,113                91,980       113,558      18,228
  as of December 31, 2011 and December 31, 2012, respectively)
 Amounts due to related parties-current(includingamountsduetorelatedpartiesoftheconsolidated
 VIE without recourse to the Group of 1,953 and 1,926 as of December 31, 2011 and December 31, 2012,     13,146       35,507       5,699
 respectively)
 Income taxes payable (including income taxes payable of the consolidated VIE without recourseto the   51,448       49,294       7,912
  Group of 8,893 and 10,004 as of December 31, 2011 and December 31, 2012, respectively)
 Other taxes payable (including other taxes payable of the consolidated VIE without recourse to the      21,970       27,294       4,381
  Group of 3,047 and 4,442 as of December 31, 2011 and December 31, 2012, respectively)
Total current liabilities                                                                               306,115      362,229      58,142
 Deferred revenues-non-current (including deferred revenues of the consolidated VIE without recourse    12,059       10,654       1,710
  to the Group of 33 and 29 as of December 31, 2011 and December 31, 2012, respectively)
 Deferred tax liabilities-non-current (including deferred tax liabilities of the consolidated VIE
 without                                                                                                9,243        13,473       2,163
 recoursetotheGroupof1,017and978asofDecember31,2011andDecember31,2012,respectively)
 Unrecognized tax benefit (including unrecognized tax benefit of the consolidated VIE without           6,089        8,795        1,412
 recoursetotheGroupof2,364and3,555asofDecember31,2011andDecember31,2012,respectively)
Total liabilities                                                                                       333,506      395,151      63,427
 ChinaEdu shareholders' equity                                                                        604,806      650,191      104,363
 Noncontrolling interests                                                                                167,253      196,911      31,606
Total equity                                                                                           772,059      847,102      135,969
Total liabilities and equity                                                                            1,105,565    1,242,253    199,396



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Operations
(inthousands,exceptforpercentage,share,andpershareinformation)
                Three Months Ended                       Twelve Months Ended
                December31,  December31,  December31,  December31,  December31,  December31,
                2011          2012          2012          2011          2012          2012
                RMB           RMB           US$           RMB           RMB           US$
Gross Revenue   123,127       135,889       21,812        453,116       504,052       80,904
^*
Business Tax    2,569         347           55            17,257        15,730        2,525
Net Revenue:
Online degree   96,760        110,230       17,693        347,107       393,343       63,135
programs
Online
tutoring        6,057         6,843         1,099         25,755        25,266        4,055
programs
Private
primary and     14,088        16,275        2,613         49,653        59,937        9,620
secondary
schools
International
and elite       3,653         2,194         352           13,344        9,776         1,569
curriculum
programs
Total net       120,558       135,542       21,757        435,859       488,322       78,379
revenue
Cost of
revenue:
Online degree   36,433        42,353        6,798         124,242       137,689       22,101
programs
Online
tutoring        2,683         4,262         684           9,107         11,861        1,904
programs
Private
primary and     10,589        12,962        2,081         36,127        42,713        6,856
secondary
schools
International
and elite       4,393         1,741         279           16,128        9,846         1,580
curriculum
programs
Total cost of   54,098        61,318        9,842         185,604       202,109       32,441
revenue
Gross profit:
Online degree   60,327        67,877        10,895        222,865       255,654       41,034
programs
Online
tutoring        3,374         2,581         415           16,648        13,405        2,151
programs
Private
primary and     3,499         3,313         532           13,526        17,224        2,764
secondary
schools
International
and elite       (740)         453           73            (2,784)       (70)          (11)
curriculum
programs
Total gross     66,460        74,224        11,915        250,255       286,213       45,938
profit
Online degree   62.3%         61.6%         61.6%         64.2%         65.0%         65.0%
programs
Online
tutoring        55.7%         37.7%         37.7%         64.6%         53.1%         53.1%
programs
Private
primary and     24.8%         20.4%         20.4%         27.2%         28.7%         28.7%
secondary
schools
International
and elite       (20.3%)       20.6%         20.6%         (20.9%)       (0.7%)        (0.7%)
curriculum
programs
Gross margin    55.1%         54.8%         54.8%         57.4%         58.6%         58.6%
Operating
expenses:
General and     24,121        22,961        3,685         93,950        100,204       16,084
administrative
Selling and     15,362        14,313        2,297         52,777        48,407        7,770
marketing
Research and    9,487         9,927         1,593         40,589        40,512        6,503
development
Intangible
assets          -             -             -             -             5,901         947
impairment
Total
operating       48,970        47,201        7,575         187,316       195,024       31,304
expenses
Income from     17,490        27,023        4,340         62,939        91,189        14,634
operations
Operating       14.5%         19.9%         19.9%         14.4%         18.7%         18.7%
margin
Interest        2,641         3,330         536           8,843         13,253        2,127
income
Gain on
disposal of     -             894           143           -             2,197         353
assets
Investment      166           -             -             832           1,460         234
income
Other income    284           459           74            1,003         1,376         221
Income before
income tax and  20,581        31,706        5,093         73,617        109,475       17,569
equity method
investments
Income tax      (7,691)       (5,603)       (899)         (17,044)      (26,427)      (4,242)
expense
Net income
before income
from equity     12,890        26,103        4,194         56,573        83,048        13,327
method
investments
Income from
equity method   -             261           42            -             261           42
investments,
net of taxes
Net income      12,890        26,364        4,236         56,573        83,309        13,369
Net income
attributable
to the          (10,557)      (11,134)      (1,787)       (39,752)      (45,338)      (7,277)
noncontrolling
interests
Net income
attributable    2,333         15,230        2,449         16,821        37,971        6,092
to ChinaEdu
Net margin      1.9%          11.2%         11.2%         3.9%          7.8%          7.8%
Net income
attributable
to ChinaEdu
per ADS:
 Basic    0.15          0.96          0.154         1.06          2.40          0.385
 Diluted  0.14          0.90          0.144         1.00          2.26          0.362
Weighted
average
aggregate
number of ADSs
outstanding:
 Basic    15,756,432    15,880,826    15,880,826    15,817,977    15,841,125    15,841,125
 Diluted  16,569,830    17,001,590    17,001,590    16,889,743    16,829,078    16,829,078
* Gross
revenueis
detailed as
follows:
Online degree   98,978        110,363       17,714        362,888       407,869       65,466
programs
Online
tutoring        6,177         7,025         1,128         26,381        25,874        4,153
programs
Private
primary and     14,106        16,289        2,615         49,726        60,066        9,641
secondary
schools
International
and elite       3,866         2,212         355           14,121        10,243        1,644
curriculum
programs



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
(inthousands,unaudited)
                                                                        Three Months Ended                        Twelve Months Ended
                                                                        December31,  December31,  December31,  December31,  December31,  December31,
                                                                        2011          2012          2012          2011          2012          2012
                                                                        RMB           RMB           US$           RMB           RMB           US$
Net income                                                              12,890        26,364        4,236         56,573        83,309        13,369
Othercomprehensiveincome,netoftaxes
 Foreign currency translation adjustments                              1,143         (94)          (15)          (751)         (87)          (14)
 Change in fair value of available for sale investments                (539)         290           47            187           1,247         200
Comprehensive income                                                    13,494        26,560        4,268         56,009        84,469        13,555
Less:comprehensiveincomeattributabletothenoncontrollinginterests 11,627        12,694        2,038         46,020        47,836        7,678
Comprehensive income attributable to Chinaedu                          1,867         13,866        2,230         9,989         36,633        5,877



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Cash Flow
(inthousands,unaudited)
                                                                              Three Months Ended                        Twelve Months Ended
                                                                               December31,  December31,  December31,  December31,  December31,  December31,
                                                                               2011          2012          2012          2011          2012          2012
                                                                               RMB           RMB           US$           RMB           RMB           US$
Operating activities:
 Net income                                                             12,890        26,364        4,236         56,573        83,309        13,369
Adjustmentstoreconcilenetincometonetcashprovidedbyoperating
 activities:
 Share-based compensation                                           1,660         2,262         363           6,483         8,258         1,326
 Depreciation and amortization of property and equipment            6,637         6,414         1,030         23,900        25,377        4,073
 Amortization of land use rights                                    152           152           24            608           608           98
 Amortization of acquired intangible assets                         1,078         847           136           4,171         3,903         626
 Accounts receivable write-off                                    -             -             -             -             340           55
 Intangible assets impairment                                       -             -             -             -             5,901         947
 Investment income                                                  (166)         -             -             201           (1,460)       (234)
 Gain on disposal of assets                                         -             (894)         (143)         -             (2,197)       (353)
 Income from equity method investments                              -             219           35            -             219           35
 Loss from disposal of property and equipment                      81            197           32            234           1,611         259
 Changes in assets and liabilities
 Accounts receivable                                                (8,033)       4,072         654           3,613         (3,779)       (607)
 Inventory                                                           -             -             -             358           -             -
 Prepaid expenses and other current assets                          4,436         2,565         411           7,458         532           86
 Amounts due from related parties                                   (8,708)       (44,974)      (7,221)       8,646         (64,325)      (10,324)
 Rental deposits                                                    409           (17)          (3)           (1,277)       716           115
 Accounts payable                                                   (8,449)       (7,627)       (1,224)       (2,013)       162           26
 Deferred revenues                                                  81,115        81,946        13,153        21,858        7,438         1,195
 Accrued expenses and other current liabilities                     (9,464)       (5,958)       (956)         8,700         20,851        3,348
 Amounts due to related parties                                     (10,136)      14,847        2,381         (19,717)      22,468        3,606
 Income tax payable                                                9,319         965           155           6,836         (2,154)       (346)
 Other taxes payable                                                 3,480         3,167         508           1,462         5,324         855
 Deferred income taxes                                              (2,894)       615           99            (6,034)       6,488         1,041
 Unrecognized tax benefit                                           667           844           135           2,398         2,706         434
Net cash provided by operating activities                                      74,074        86,006        13,805        124,458       122,296       19,630
Investing activities:
 Purchase of property and equipment                                 (2,702)       (3,538)       (568)         (20,788)      (12,407)      (1,991)
 Proceeds from disposal of assets                                   -             1,335         214           -             5,430         872
 Deposits paid for acquisition of property and equipment            (3,873)       -             -             (18,863)      -             -
 (Purchase) maturity of term deposits                               (11,000)      107,000       17,175        22,337        6,135         985
 Purchase of investments                                            (2,556)       -             -             (19,556)      (13,591)      (2,182)
 Proceeds from the sale of short term investments                   4,119         -             -             16,306        26,187        4,203
 Purchase of exclusive partnership with universities                -             -             -             (1,960)       (980)         (157)
 Proceeds from disposal of property and equipment                   20            -             -             275           -             -
Net cash (used in) provided by investing activities                            (15,992)      104,797       16,821        (22,249)      10,774        1,730
Financing activities:
 Deferred payment of purchase of property and equipment             (1,479)       -             -             (1,479)       -             -
 Cash dividends paid to noncontrolling shareholders                 (49)          -             -             (13,510)      (21,441)      (3,442)
 Capital contributions by noncontrolling shareholders               -             -             -             2,960         -             -
 Proceeds from exercise of share options                            20            1,330         213           598           5,068         813
 Prepayment for shares repurchase                                   (38)          -             -             (168)         -             -
 Repurchase and cancellation of ordinary shares                     (688)         (1,846)       (296)         (7,437)       (4,574)       (734)
 Repayment of loan from related party                               (14,500)      -             -             -             -             -
 Loan from related party                                            10,000        -             -             -             -             -
Net cash used in financing activities                                          (6,734)       (516)         (83)          (19,036)      (20,947)      (3,363)
Effect of foreign exchange rate changes                                        (23)          57            10            80            53            9
CASH AND CASH EQUIVALENTS, beginning of period                                 222,421       195,578       31,392        190,493       273,746       43,939
CASH AND CASH EQUIVALENTS, end of period                                       273,746       385,922       61,945        273,746       385,922       61,945
Net increase in cash and cash equivalents                                     51,325        190,344       30,553        83,253        112,176       18,006



ChinaEdu Corporation
Unaudited reconciliations from income from operations to adjusted income from operations (non-GAAP)andadjustedoperatingmargin (non-GAAP)
(in thousands, unaudited)
                                                         Three Months Ended                       Twelve Months Ended
                                                         December31,  December31,  December31,  December31,  December31,  December31,
                                                         2011          2012          2012          2011          2012          2012
                                                         RMB           RMB           US$           RMB           RMB           US$
Net revenue                                              120,558       135,542       21,757        435,859       488,322       78,379
Income from operations                                  17,490        27,023        4,340         62,939        91,189        14,634
Adjustments:
 Share-based compensation                               1,660         2,262         363           6,483         8,258         1,326
Amortizationofintangibleassetsandlanduserights  1,230         999           160           4,779         4,511         724
 Intangible assets impairment                           -             -             -             -             5,901         947
Adjusted income from operations (non-GAAP)               20,380        30,284        4,863         74,201        109,859       17,631
Adjusted operating margin (non-GAAP)                     16.9%         22.3%         22.3%         17.0%         22.5%         22.5%
ChinaEdu Corporation
Unaudited reconciliations from net income attributable to ChinaEdu to adjusted net income attributable to ChinaEdu (non-GAAP), adjusted net
margin
(non-GAAP) and adjusted net income per ADS (non-GAAP)
(in thousands, unaudited)
                                                         Three Months Ended                       Twelve Months Ended
                                                         December 31,  December 31,  December 31,  December 31,  December 31,  December 31,
                                                         2011          2012          2012          2011          2012          2012
                                                         RMB           RMB           US$           RMB           RMB           US$
Net revenue                                              120,558       135,542       21,757        435,859       488,322       78,379
Net income attributable to ChinaEdu                      2,333         15,230        2,449         16,821        37,971        6,092
Adjustments:
 Share-based compensation                               1,660         2,262         363           6,483         8,258         1,326
 Share-based compensation attributable to the           (110)         (193)         (31)          (376)         (562)         (90)
noncontrolling interest
 Amortization of intangible assets and land use rights  1,230         999           160           4,779         4,511         724
 Intangible assets impairment                           -             -             -             -             5,901         947
Adjusted net income attributable to ChinaEdu (non-GAAP)  5,113         18,298        2,941         27,707        56,079        8,999
Adjusted net margin (non-GAAP)                           4.2%          13.5%         13.5%         6.4%          11.5%         11.5%
Adjusted net income attributable to ChinaEdu per ADS
(non-GAAP):
 Basic                                             0.32          1.15          0.185         1.75          3.54          0.568
 Diluted                                           0.31          1.08          0.173         1.64          3.33          0.535
Weighted average aggregate number of ADSs outstanding:
 Basic                                             15,756,432    15,880,826    15,880,826    15,817,977    15,841,125    15,841,125
 Diluted                                           16,569,830    17,001,590    17,001,590    16,889,743    16,829,078    16,829,078

SOURCE ChinaEdu Corporation

Website: http://ir.chinaedu.net/index.html
Website: http://ir.chinaedu.net