Education Management Corporation Reports Fiscal 2013 Fourth Quarter Results

 Education Management Corporation Reports Fiscal 2013 Fourth Quarter Results

- Growth in new student enrollment slightly positive compared to prior year
excluding South University's fully-online programs -

- Improving trend in 180-day new student retention -

- EBITDA of $68.1 million excluding certain expenses on reported net loss of
$2.0 million -

- Diluted EPS of $(0.02), or $0.01 excluding certain expenses -

PR Newswire

PITTSBURGH, Aug. 7, 2013

PITTSBURGH, Aug. 7, 2013 /PRNewswire/ -- Education Management Corporation (the
"Company") (NASDAQ:EDMC), one of the largest providers of post-secondary
education in North America, today reported its financial results for the three
months ended June30, 2013. Net revenues during the quarter were $595.2
million and the Company reported a net loss of $2.0 million, or $(0.02) per
diluted share. Excluding restructuring and other charges detailed further in
this release, net income would have been $1.1 million, or $0.01 per diluted
share.

"We are encouraged by the underlying trends that we are seeing in both new
student enrollment and 180-day new student retention. Student achievement and
providing an affordable educational experience that prepares our students for
employment opportunities in the marketplace is our top priority," said Edward
H. West, Education Management's President and Chief Executive Officer. "We
continue with initiatives to better align our organization with the needs of
our students, by providing the right course offerings and a stronger value
proposition. We believe these efforts will ultimately lead to rising
enrollments and improved financial performance."

Financial and Operational Highlights

Financial and operational highlights for the fourth quarter of fiscal 2013
included the following:

  oTotal new students were approximately 20,060, a decrease of 6.3% from
    approximately 21,400 new students in the fourth quarter of fiscal 2012.
    When excluding South University's fully-online programs, which were
    impacted by the marketing strategy and operational changes made last
    summer, the Company's total new student enrollment increased 0.3% compared
    to the prior year quarter.
  oFor the three months ended June30, 2013, average enrolled student body
    was approximately 120,920, a 9.4% decline from 133,500 in the prior year
    quarter. Net revenues were $595.2 million, a decrease of 6.9% from $639.2
    million recorded in the fourth quarter of fiscal 2012 due primarily to the
    decline in average enrolled student body.
  oThe Company recorded a net loss of $2.0 million, or $(0.02) per diluted
    share, compared to a net loss of $1,188.7 million, or $(9.51) per diluted
    share, for the prior year quarter. The Company incurred $4.8 million
    ($2.9 million net of tax) and $1.6 million ($0.9 million net of tax) of
    restructuring and other charges in the current quarter and the prior year
    quarter, respectively, as well as a loss on an asset disposal of $0.4
    million ($0.3 million net of tax) in the current quarter. Excluding these
    expenses and non-cash long-lived asset impairment charges of $1,251.4
    million ($1,200.5 million net of tax) incurred in the prior year quarter,
    net income would have been $1.1 million, or $0.01 per diluted share, in
    the current quarter compared to $12.7 million, or $0.10 per diluted share,
    in the prior year quarter.
  oEarnings before interest, taxes and depreciation and amortization
    ("EBITDA") was $63.3 million in the current quarter compared to a loss of
    $1,163.4 million in the prior year quarter. After adjusting for
    restructuring and other charges incurred in each quarter and non-cash
    long-lived asset impairment charges incurred in the prior year quarter as
    noted above, EBITDA would have been $68.1 million in the current quarter
    compared to $89.6 million in the prior year quarter.

Financial highlights for the fiscal year ended June 30, 2013 included the
following:

  oNet revenues were $2,498.6 million, a decrease of 9.5% from $2,761.0
    million recorded in the fiscal year ended June 30, 2013, primarily due to
    a 11.3% decline in average enrolled student body for the fiscal year ended
    June30, 2013 compared to the prior fiscal year.
  oThe Company recorded a net loss of $268.0 million, or $(2.15) per diluted
    share, compared to a net loss of $1,515.7 million, or $(11.97) per diluted
    share, for the prior fiscal year. The Company incurred non-cash
    long-lived asset impairment charges of $323.7 million ($312.0 million net
    of tax) and $1,746.8 million ($1,650.5 million net of tax) in fiscal 2013
    and 2012, respectively. Additionally, the Company incurred $24.2 million
    ($14.5 million net of tax) and $23.6 million ($14.3 million net of tax) of
    expenses in fiscal 2013 and 2012, respectively, related to restructuring
    and other charges, losses on the refinancing of debt and an asset
    disposal. Excluding these expenses and the reversal of an uncertain tax
    position liability of $0.7 million in each of the fiscal years ended June
    30, 2013 and 2012, net income would have been $57.8 million, or $0.46 per
    diluted share, in the current fiscal year compared to $148.4 million, or
    $1.17 per diluted share, in the prior fiscal year.
  oEBITDA was $33.4 million in the current fiscal year compared to a loss of
    $1,260.5 million in the prior fiscal year. After adjusting for the
    non-cash long-lived asset impairments, restructuring and other charges and
    losses on the refinancing of debt as noted above, EBITDA would have been
    $376.3 million in the current year compared to $509.9 million in the prior
    year.
  oDespite lower operating performance, cash flows provided by operating
    activities for the fiscal year ended June30, 2013 were $191.3 million
    compared to a use of $10.9 million in the fiscal year ended June30,
    2012. Current year operating cash flows were comparatively higher
    primarily due to a transfer of $210.0 million to restricted cash in the
    prior year in connection with the issuance of letters of credit under the
    Company's cash secured letter of credit facilities, which reduced the
    prior year period's cash flow from operating activities. The cash secured
    letter of credit facilities are being used to help satisfy the Company's
    previously disclosed letter of credit requirement with the U.S. Department
    of Education.
  oAt June30, 2013, cash and cash equivalents were $130.7 million, compared
    to $191.0 million at June30, 2012.
  oBorrowings under the revolving credit facility at June 30, 2013 were $75.0
    million compared to $111.3 million at June 30, 2012. The revolving credit
    facility was repaid in full on the first business day of the subsequent
    fiscal year.
  oOn a cash basis, capital expenditures were $83.2 million, or 3.3% of net
    revenues, for the fiscal year ended June30, 2013 compared to $93.5
    million, or 3.4% of net revenues, in the same period in the prior year.

Fiscal 2014 Outlook

For the fiscal year ending June 30, 2014, capital expenditures are projected
to be between $80 million and $90 million, compared to $83.2 million in the
fiscal year ended June 30, 2013. Based on current assumptions regarding
market conditions and excluding restructuring and other special charges that
may be incurred, the Company provided the following outlook for fiscal 2014.



Reconciliation of Fiscal Year 2014 First Quarter and Annual Outlook of Net
Income (Loss) to EBITDA

(Dollars in millions, except earnings per share) (Unaudited)
Fiscal 2014 Outlook – 1st         For the Three Months Ending
Quarter:
                                  September 30, 2013
                                  Low                       High
Loss per diluted share            $      (0.10)             $    (0.09)
Net loss                          $      (12)               $    (11)
Income tax benefit                (12)                      (11)
Net interest expense              32                        32
Depreciation and amortization     38                        38
EBITDA                            $      46                 $    48
Fiscal Year 2014 Outlook –        For the Twelve Months Ending
Annual:
                                  June 30, 2014
                                  Low                       High
Earnings per diluted share        $      0.21               $    0.28
Net income                        $      27                 $    36
Income tax expense                18                        24
 Net interest expense            127                       127
Depreciation and amortization     153                       153
EBITDA                            $      325                $    340



The above discussion of the Company's fiscal 2014 outlook includes information
that could constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. As more fully described
below under the heading "Cautionary Statement," these and other
forward-looking statements are based on information currently available to
management and involve estimates, assumptions, risks, uncertainties and other
factors that may cause actual results, performance or achievements to differ
materially and unpredictably from any future results, performance or
achievements expressed or implied by such forward-looking statements.

The Company's quarterly revenues and income fluctuate primarily as a result of
the pattern of student enrollments, and its first fiscal quarter is typically
the lowest revenue quarter of the fiscal year due to student vacations.
However, the seasonality of the Company's business has decreased over the last
several years, primarily due to the percentage of students enrolling in online
programs, which generally experience less seasonal fluctuation than
campus-based programs.

The presentation of EBITDA, as well as the presentations excluding certain
expenses, do not comply with U.S. generally accepted accounting principles
("GAAP"). For an explanation of EBITDA and EBITDA and net income excluding
certain expenses, together with a reconciliation to net income, which is the
most directly comparable GAAP financial measure, see the Non-GAAP Financial
Measures disclosure in the financial tables section below.

Conference Call and Webcast

Education Management Corporation will host a conference call to discuss its
fiscal 2013 fourth quarter results on Thursday, August8, 2013 at 9:00 a.m.
(Eastern Time). Those wishing to participate in this call should dial
412-317-6789 approximately 10 minutes prior to the start of the call. A
listen-only audio of the conference call will also be broadcast live over the
Internet at www.edmc.edu. A replay of the conference call will be available at
www.edmc.edu for up to one year.



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)
               For the Three Months Ended           For the Fiscal Year Ended

               June 30,                             June 30,
                                           %                                      %
               2013        2012                     2013          2012
                                           Change                                 Change
Net revenues   $ 595,236   $ 639,184       (6.9) %  $ 2,498,599   $ 2,760,967     (9.5)  %
Costs and
expenses:
Educational
services ^(1)  355,133     369,935         (4.0) %  1,447,097     1,502,356       (3.7)  %
(2)
General and
administrative 176,805     181,256         (2.5) %  689,143       762,863         (9.7)  %
^(1) (3)
Depreciation
and            41,046      39,968          2.7   %  164,712       158,663         3.8    %
amortization
^(4)
Long-lived
asset          —           1,251,385       N/M      323,690       1,746,765       N/M
impairments
 Total
costs and      572,984     1,842,544       N/M      2,624,642     4,170,647       N/M
expenses
Loss before
interest, loss
on debt        22,252      (1,203,360)     N/M      (126,043)     (1,409,680)     N/M
refinancing
and income
taxes
Interest       31,739      31,190          1.8   %  124,663       110,330         13.0   %
expense, net
Loss on debt   —           —               N/M      5,232         9,474           (44.8) %
refinancing
Loss before    (9,487)     (1,234,550)     N/M      (255,938)     (1,529,484)     N/M
income taxes
Income tax
expense        (7,452)     (45,843)        N/M      12,038        (13,743)        N/M
(benefit)
Net loss       $ (2,035)   $ (1,188,707)   N/M      $ (267,976)   $ (1,515,741)   N/M
Loss per
share:
Basic          $ (0.02)    $ (9.51)                 $ (2.15)      $ (11.97)
Diluted        $ (0.02)    $ (9.51)                 $ (2.15)      $ (11.97)
Weighted
average number
of shares
outstanding:
Basic          124,602     124,963                  124,560       126,659
Diluted        124,602     124,963                  124,560       126,659
(1) Certain reclassifications of fiscal 2012 data have been made to conform to the fiscal
2013 presentation. These reclassifications did not materially change any of the previously
reported amounts.
(2) Includes restructuring charges of $1.6 million and $0.8 million in the three months
ended June 30, 2013 and 2012 and $9.8 million and $5.2 million in the fiscal year ended
June 30, 2013 and 2012, respectively.
(3) Includes restructuring and other charges of $3.2 million and $0.8 million in the three
months ended June 30, 2013 and 2012 and $4.1 million and $8.9 million in the fiscal year
ended June 30, 2013 and 2012, respectively.
(4) Includes charges of $0.4 million and $5.0 million in the three and twelve months ended
June 30, 2013, respectively related to assets that no longer had a useful life.



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)
                                                  June30, 2013  June30, 2012
Assets
Current assets:
Cash and cash equivalents                         $  130,695     $  191,008
Restricted cash                                   271,340        267,880
 Total cash, cash equivalents and          402,035        458,888
restricted cash
Student receivables, net of allowances of         206,406        203,341
$174,760 and $225,657
Notes, advances and other receivables             32,547         22,174
Inventories                                       5,873          8,382
Deferred income taxes                             76,927         102,668
Prepaid income taxes                              20,854         6,796
Other current assets                              26,977         40,399
 Total current assets                      771,619        842,648
Property and equipment, net                       525,625        651,797
Other long-term assets                            48,524         51,071
Intangible assets, net                            300,435        330,029
Goodwill                                          669,090        963,550
 Total assets                              $  2,315,293   $  2,839,095
Liabilities and shareholders' equity
Current liabilities:
Current portion of long-term debt                 $  12,076      $  12,076
Revolving credit facility                         75,000         111,300
Accounts payable                                  32,559         54,834
Accrued liabilities                               157,417        137,348
Unearned tuition                                  113,371        116,277
Advance payments                                  95,675         102,170
 Total current liabilities                 486,098        534,005
Long-term debt, less current portion              1,273,164      1,453,468
Deferred income taxes                             70,316         111,767
Deferred rent                                     201,202        197,758
Other long-term liabilities                       34,414         45,533
Shareholders' equity:
Common stock, at par                              1,435          1,434
Additional paid-in capital                        1,794,846      1,777,732
Treasury stock, at cost                           (328,605)      (328,605)
(Accumulated deficit) Retained earnings           (1,203,936)    (935,960)
Accumulated other comprehensive loss              (13,641)       (18,037)
 Total shareholders' equity                250,099        496,564
 Total liabilities and shareholders'       $  2,315,293   $  2,839,095
equity



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)
                                            For the Fiscal Year Ended June 30,
Cash flows from operating activities:       2013              2012
Net loss                                    $  (267,976)      $  (1,515,741)
Adjustments to reconcile net loss to net
cash flows from

operating activities:
Depreciation and amortization of property   157,871           151,023
and equipment
Amortization of intangible assets           6,841             7,640
Bad debt expense                            171,850           163,926
Long-lived asset impairments                323,690           1,746,765
Amortization of debt issuance costs         8,460             1,071
Loss on debt refinancing                    5,232             9,474
Share-based compensation                    17,112            13,290
Non cash adjustments related to deferred    (17,477)          (12,956)
rent
Amortization of deferred gains on           (1,575)           —
sale-leaseback transactions
Deferred income taxes                       (18,836)          (132,500)
Changes in assets and liabilities:
 Restricted cash                     (3,460)           (220,367)
 Receivables                         (194,437)         (220,319)
 Reimbursements for tenant           10,054            15,307
improvements
 Inventory                           2,505             1,203
 Other assets                        15,151            (3,856)
 Purchase of loans                   (899)             —
 Accounts payable                    (19,596)          (1,637)
 Accrued liabilities                 6,092             20,454
 Unearned tuition                    (2,906)           (23,873)
 Advance payments                    (6,385)           (9,754)
 Total adjustments           459,283           1,504,891
Net cash flows provided by (used in)        191,307           (10,850)
operating activities
Cash flows from investing activities:
Expenditures for long-lived assets          (83,241)          (93,546)
Proceeds from sales of fixed assets         65,065            —
Reimbursements for tenant improvements      (10,054)          (15,307)
Other                                       2,418             —
Net cash flows used in investing activities (25,812)          (108,853)
Cash flows from financing activities:
Borrowings under revolving credit facility  75,000            111,300
Payments under revolving credit facility    (111,300)         (79,000)
Principal payments on senior notes          (171,953)         —
Issuance of common stock                    3                 2,618
Common stock repurchased for treasury       —                 (104,073)
Principal payments on long-term debt        (12,155)          (11,025)
Debt issuance costs                         (5,232)           (11,928)
Net cash flows used in financing activities (225,637)         (92,108)
Effect of exchange rate changes on cash and (171)             (405)
cash equivalents
Net change in cash and cash equivalents     (60,313)          (212,216)
Cash and cash equivalents, beginning of     191,008           403,224
period
Cash and cash equivalents, end of period    $  130,695        $  191,008
Cash paid during the period for:
Interest (including swap settlement)        $  111,396        $  116,014
Income taxes, net of refunds                46,699            114,629
                                            As of June 30,
Noncash investing activities:               2013              2012
Capital expenditures in current liabilities $  9,022          $  13,201



EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

The Company reports results in four segments - The Art Institutes, Argosy
University, Brown Mackie Colleges and South University. The Company evaluates
segment performance based on EBITDA excluding certain expenses. Adjustments
to reconcile segment results to consolidated results are included under the
caption "Corporate and Other," which primarily includes unallocated corporate
activity.

EBITDA, a measure used by management to measure operating performance, is
defined as net income before net interest expense, provision for income taxes
and depreciation and amortization. EBITDA is not a recognized term under GAAP
and does not purport to be an alternative to net income as a measure of
operating performance or to cash flows from operating activities as a measure
of liquidity. Additionally, EBITDA is not intended to be a measure of free
cash flow available for management's discretionary use, as it does not
consider certain cash requirements such as interest payments, tax payments and
debt service requirements. Management believes EBITDA is helpful in
highlighting trends because EBITDA excludes the results of decisions that are
outside the control of operating management and can differ significantly from
company to company depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which companies operate and
capital investments. Management also presents diluted earnings per share,
weighted average number of diluted shares outstanding, net income and EBITDA
after adjusting for certain expenses, which also are non-GAAP financial
measures. Management believes this presentation is also helpful in
highlighting trends in our business because it excludes certain expenses
management believes are not indicative of ongoing operations. Management
compensates for the limitations of using non-GAAP financial measures by using
them to supplement GAAP results to provide a more complete understanding of
the factors and trends affecting the business than GAAP results alone. Because
not all companies use identical calculations, this presentation of EBITDA may
not be comparable to similarly titled measures of other companies. A
reconciliation of EBITDA excluding certain expenses by segment to consolidated
net loss to consolidated net income, excluding certain expenses is detailed
below:

Segment Information and Reconciliation of EBITDA to Net Loss to

Net Income Excluding Certain Expenses

(In thousands, except per share amounts) (Unaudited)
               For the Three Months Ended June       For the Fiscal Year Ended June 30,
               30,
               2013        2012            % Change  2013          2012            % Change
Net revenues:
The Art        $ 358,153   $ 397,223       (9.8)  %  $ 1,543,385   $ 1,738,542     (11.2) %
Institutes
Argosy         87,881      88,448          (0.6)  %  356,544       397,458         (10.3) %
University
Brown Mackie   72,053      74,175          (2.9)  %  298,175       314,801         (5.3)  %
Colleges
South          77,149      79,338          (2.8)  %  300,495       310,166         (3.1)  %
University
Total EDMC     595,236     639,184         (6.9)  %  2,498,599     2,760,967       (9.5)  %
EBITDA
excluding
certain
expenses:
The Art        63,188      92,023          (31.3) %  343,903       478,693         (28.2) %
Institutes
Argosy         7,699       6,955           10.7   %  41,062        57,535          (28.6) %
University
Brown Mackie   7,609       11,340          (32.9) %  36,407        62,073          (41.3) %
Colleges
South          13,891      4,558           204.8  %  44,560        5,878           658.1  %
University
Corporate and  (24,313)    (25,324)        4.0    %  (89,653)      (94,298)        4.9    %
other
Total EDMC     68,074      89,552          (24.0) %  376,279       509,881         (26.2) %
Reconciliation
to EBITDA:
Long-lived
asset          —           1,251,385       N/M       323,690       1,746,765       N/M
impairments
Loss on debt   —           —               N/M       5,232         9,474           (44.8) %
refinancing
Restructuring  4,776       1,559           206.4  %  13,920        14,133          (1.5)  %
and other
EBITDA         63,298      (1,163,392)     N/M       33,437        (1,260,491)     N/M
Reconciliation
to net loss:
Depreciation
and            41,046      39,968          2.7    %  164,712       158,663         3.8    %
amortization
Net interest   31,739      31,190          1.8    %  124,663       110,330         13.0   %
expense
Income tax
expense        (7,452)     (45,843)        N/M       12,038        (13,743)        N/M
(benefit)
Net loss       $ (2,035)   $ (1,188,707)   N/M       $ (267,976)   $ (1,515,741)   N/M
Long-lived
asset          $ —         $ 1,200,480     N/M       $ 311,998     $ 1,650,461     N/M
impairments,
net of tax
Loss on debt
refinancing,   —           —               N/M       3,139         5,779           (45.7) %
net of tax
Restructuring
and other, net 2,867       945             203.4  %  8,352         8,637           (3.3)  %
of tax
Loss on
disposal of    262         —               N/M       3,015         —               N/M
asset, net of
tax
Reversal of
uncertain tax  —           —               N/M       (691)         (749)           N/M
position
liability
Net income,
excluding      $ 1,094     $ 12,718        (91.4) %  $ 57,837      $ 148,387       (61.0) %
certain
expenses
Diluted loss   $ (0.02)    $ (9.51)                  $ (2.15)      $ (11.97)
per share
Diluted
earnings per
share,         $ 0.01      $ 0.10                    $ 0.46        $ 1.17
excluding
certain
expenses
Weighted
average number
of diluted
shares         127,067     124,963                   125,368       126,659
outstanding,
excluding
certain
expenses



New Student Enrollment



                       For the Three Months Ended June 30,
(rounded to nearest    2013                   2012               % Change
tenth)
The Art Institutes     8,620                  8,920              (3.4)     %
Argosy University      3,410                  3,320              2.7       %
Brown Mackie Colleges  3,540                  3,560              (0.6)     %
South University ^ (1) 4,490                  5,600              (19.8)    %
Total EDMC ^(1)        20,060                 21,400             (6.3)     %
The new student enrollment data shown above includes the number of new
students who enrolled in fully-online programs at The Art Institute of
Pittsburgh, Argosy University and South University. Total new students who
enrolled in fully-online programs for the three months ended June 30, 2013
were approximately 8,230 as compared to 9,250 in the three months ended June
30, 2012.
(1) The reduction in new student enrollment reflects the marketing strategy
and operational changes made last summer related to South University's
fully-online programs. When excluding South University's fully-online
programs, "total EDMC" new student enrollment increased 0.3%.



Average Enrolled Student Body



                      For the Three Months Ended June 30,
(rounded to nearest   2013                    2012               % Change
tenth)
The Art Institutes    62,430                  68,690             (9.1)     %
Argosy University     24,240                  25,690             (5.6)     %
Brown Mackie Colleges 16,310                  17,700             (7.9)     %
South University      17,940                  21,430             (16.3)    %
Total EDMC            120,920                 133,500            (9.4)     %
Average enrolled student body is the three month average of the unique
students who met attendance requirements within a month of the quarter. The
data above includes the number of students enrolled in fully-online programs
at The Art Institute of Pittsburgh, Argosy University and South University.
The average enrolled student body in fully-online programs was approximately
30,680 for the three months ended June 30, 2013 as compared to 36,220 in the
three months ended June 30, 2012.
For July 2013, starting student body enrollment for Total EDMC was
approximately 117,020, a decrease of 8.8% from the year ago period. Starting
student body reflects the campus-based student census after the add/drop
period for the first month of the fiscal quarter plus the average of
fully-online students who met attendance requirements in the third month of
the prior fiscal quarter.



About Education Management Corporation

Education Management Corporation (www.edmc.edu), with approximately 132,000
students as of October 2012, is among the largest providers of post-secondary
education in North America, based on student enrollment and revenue, with a
total of 110 locations in 32 U.S. states and Canada. The Company offers
academic programs to students through campus-based and online instruction, or
through a combination of both. The Company is committed to offering quality
academic programs and strive to improve the learning experience for our
students. Its educational institutions offer students the opportunity to earn
undergraduate and graduate degrees and certain specialized non-degree diplomas
in a broad range of disciplines, including media arts, health sciences,
design, psychology and behavioral sciences, culinary, business, fashion,
legal, education and information technology.

Cautionary Statement

This press release includes information that could constitute forward-looking
statements with the meaning of the Private Securities Litigation Reform Act of
1995. These statements, which are based on information currently available to
management, concern the Company's strategy, plans, intentions or expectations
and typically contain words such as "anticipates," "believes," "estimates,"
"expects," "intends," "may," "will," "should," "seeks," "approximately," or
"plans" or similar words, although the absence of such words does not mean
that any particular statement is not forward-looking. All of the statements
included in this press release that relate to estimated and projected
earnings, margins, costs, expenditures, cash flows, growth rates and financial
results, including the first quarter and annual outlook for fiscal 2014, and
including statements regarding expected enrollment, revenue, expense levels,
capital expenditures and earnings, are forward-looking statements, as are any
statements concerning the Company's expected future operations and performance
and other future developments. These and other forward-looking statements
involve estimates, assumptions, known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements to
differ materially and unpredictably from any future results, performance or
achievements expressed or implied by such forward-looking statements. The
Company derives many of its forward-looking statements from its operating
budgets and forecasts, which are based upon many detailed assumptions, and the
Company cautions that it is very difficult to predict the impact of unknown
factors, and impossible to anticipate all factors, that could affect its
actual results. Some of the factors that the Company believes could affect
its results and that could cause actual results to differ materially from
expectations include, but are not limited to: the timing and magnitude of
student enrollment and changes in student mix, including the relative
proportions of campus-based and online students enrolled in its programs;
changes in average registered credits taken by students; the Company's ability
to maintain eligibility to participate in Title IV programs; other changes in
its students' ability to access federal and state financial aid, as well as
obtain loans from third-party lenders; difficulties the Company may face in
opening new schools, growing its academic programs and otherwise implementing
its growth strategy; increased or unanticipated legal and regulatory costs;
the results of program reviews and audits; changes in accreditation standards;
the implementation of new operating procedures for the Company's fully online
programs; the implementation of program initiatives in response to the U.S.
Department of Education's new gainful employment regulations; adjustments to
the Company's programmatic offerings to comply with the 90/10 rule; its high
degree of leverage and ability to generate sufficient cash to service all of
its debt obligations and other liquidity needs; market and credit risks
associated with the post-secondary education industry, adverse media coverage
of the industry and the overall condition of the industry; changes in the
overall U.S. or global economies and access to credit and capital markets; the
effects of war, terrorism, natural disasters or other catastrophic events and
other risks affecting the Company, including but not limited to those
described in its periodic reports filed with the Securities Exchange
Commission pursuant to the Securities Exchange Act of 1934. 

Education Management Corporation
COMPANY CONTACT:
John Iannone
Director of Investor Relations
(412) 995-7727



SOURCE Education Management LLC

Website: http://www.edmc.com
 
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