EX-99 3 exhibit99_2.htm

Exhibit 99.2

ITT EDUCATIONAL SERVICES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

 

 

 

RESTATED
(UNAUDITED)

 

AS PREVIOUSLY PRESENTED IN 2005 SEC FILINGS

 

For the Three Months Ended

 

For the Six Months Ended

 

For the Nine Months Ended

 

For the Three Months Ended

 

For the Six Months Ended

 

For the Nine Months Ended

 

March 31, 2005

 

June 30, 2005

 

September 30, 2005

 

March 31, 2005

 

June 30, 2005

 

September 30, 2005

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$15,028

 

$37,429

 

$71,842

 

$15,028

 

$37,429

 

$71,842

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

4,296

 

8,738

 

12,781

 

4,296

 

8,738

 

12,781

Provision for doubtful accounts

2,871

 

5,899

 

8,830

 

2,871

 

5,899

 

8,830

Deferred income taxes

(3,604)

 

(2,420)

 

(1,404)

 

(3,604)

 

(2,420)

 

(1,404)

Tax benefit of stock options exercised

2,005

 

2,969

 

3,821

 

-

 

-

 

-

Changes in operating assets and liabilities:

 

 

-

 

-

 

 

 

-

 

-

Restricted cash

8,194

 

8,194

 

8,194

 

-

 

-

 

-

Short-term investments

-

 

-

 

-

 

-

 

-

 

-

Accounts receivable

(5,226)

 

(9,191)

 

(16,280)

 

(5,226)

 

(9,191)

 

(16,280)

Prepaids and other assets

(9,482)

 

(9,130)

 

(6,279)

 

(9,482)

 

(9,130)

 

(6,279)

Direct marketing costs, net

(896)

 

(1,784)

 

(2,139)

 

(896)

 

(1,784)

 

(2,139)

Accounts payable and accrued liabilities

5,666

 

5,724

 

5,365

 

5,666

 

5,724

 

5,365

Deferred revenue

(6,129)

 

(16,446)

 

(4,461)

 

(6,129)

 

(16,446)

 

(4,461)

Net cash flows from operating activities

12,723

 

29,982

 

80,270

 

2,524

 

18,819

 

68,255

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Facility expenditures and land purchases

(9,584)

 

(19,816)

 

(23,534)

 

(9,584)

 

(19,816)

 

(23,534)

Capital expenditures, net

(3,146)

 

(10,005)

 

(14,117)

 

(3,146)

 

(10,005)

 

(14,117)

Proceeds from sales and maturities of investments

193,747

 

310,078

 

429,519

 

193,747

 

310,078

 

429,519

Purchase of investments

(180,559)

 

(286,934)

 

(467,059)

 

(180,559)

 

(286,934)

 

(467,059)

Net cash flows from investing activities

458

 

(6,677)

 

(75,191)

 

458

 

(6,677)

 

(75,191)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

-

 

-

 

-

 

-

 

-

 

-

Exercise of stock options

3,005

 

4,589

 

5,598

 

5,010

 

7,558

 

9,419

Net cash flows from financing activities

3,005

 

4,589

 

5,598

 

5,010

 

7,558

 

9,419

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

16,186

 

27,894

 

10,677

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

 

 

 

 

7,992

 

19,700

 

2,483

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

9,389

 

9,389

 

9,389

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

 

 

 

17,583

 

17,583

 

17,583

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$25,575

 

$37,283

 

$20,066

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

 

 

 

 

 

 

$25,575

 

$37,283

 

$20,066

 

-25-

 


 

 

 

ITT EDUCATIONAL SERVICES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

 

 

 

RESTATED
(UNAUDITED)

 

AS PREVIOUSLY PRESENTED IN 2005 SEC FILINGS

 

For the Three Months Ended

 

For the Three Months Ended

 

March 31, 2005

 

June 30, 2005

 

September 30, 2005

 

March 31, 2005

 

June 30, 2005

 

September 30, 2005

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$15,028

 

$22,401

 

$34,413

 

$15,028

 

$22,401

 

$34,413

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

4,296

 

4,442

 

4,043

 

4,296

 

4,442

 

4,043

Provision for doubtful accounts

2,871

 

3,028

 

2,931

 

2,871

 

3,028

 

2,931

Deferred income taxes

(3,604)

 

1,184

 

1,016

 

(3,604)

 

1,184

 

1,016

Tax benefit of stock options exercised

2,005

 

964

 

852

 

-

 

-

 

-

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

8,194

 

-

 

-

 

-

 

-

 

-

Short-term investments

-

 

-

 

-

 

-

 

-

 

-

Accounts receivable

(5,226)

 

(3,965)

 

(7,089)

 

(5,226)

 

(3,965)

 

(7,089)

Prepaids and other assets

(9,482)

 

352

 

2,851

 

(9,482)

 

352

 

2,851

Direct marketing costs, net

(896)

 

(888)

 

(355)

 

(896)

 

(888)

 

(355)

Accounts payable and accrued liabilities

5,666

 

58

 

(359)

 

5,666

 

58

 

(359)

Deferred revenue

(6,129)

 

(10,317)

 

11,985

 

(6,129)

 

(10,317)

 

11,985

Net cash flows from operating activities

12,723

 

17,259

 

50,288

 

2,524

 

16,295

 

49,436

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Facility expenditures and land purchases

(9,584)

 

(10,232)

 

(3,718)

 

(9,584)

 

(10,232)

 

(3,718)

Capital expenditures, net

(3,146)

 

(6,859)

 

(4,112)

 

(3,146)

 

(6,859)

 

(4,112)

Proceeds from sales and maturities of investments

193,747

 

116,331

 

119,441

 

193,747

 

116,331

 

119,441

Purchase of investments

(180,559)

 

(106,375)

 

(180,125)

 

(180,559)

 

(106,375)

 

(180,125)

Net cash flows from investing activities

458

 

(7,135)

 

(68,514)

 

458

 

(7,135)

 

(68,514)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

-

 

-

 

-

 

-

 

-

 

-

Exercise of stock options

3,005

 

1,584

 

1,009

 

5,010

 

2,548

 

1,861

Net cash flows from financing activities

3,005

 

1,584

 

1,009

 

5,010

 

2,548

 

1,861

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

16,186

 

11,708

 

(17,217)

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

 

 

 

 

7,992

 

11,708

 

(17,217)

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

9,389

 

25,575

 

37,283

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

 

 

 

 

17,583

 

25,575

 

37,283

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$25,575

 

$37,283

 

$20,066

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

 

 

 

 

 

 

$25,575

 

$37,283

 

$20,066

 

-26-

 


 

 

 


ITT EDUCATIONAL SERVICES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

 

 

 

RESTATED
(UNAUDITED)

 

AS PREVIOUSLY PRESENTED IN 2005 SEC FILINGS

 

For the Three Months Ended

 

For the Six Months Ended

 

For the Nine Months Ended

 

For the Three Months Ended

 

For the Six Months Ended

 

For the Nine Months Ended

 

March 31, 2004

 

June 30, 2004

 

September 30, 2004

 

March 31, 2004

 

June 30, 2004

 

September 30, 2004

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$9,026

 

$23,006

 

$41,466

 

$9,026

 

$23,006

 

$41,466

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

4,867

 

9,788

 

13,708

 

4,867

 

9,788

 

13,708

Provision for doubtful accounts

2,501

 

4,901

 

7,704

 

2,501

 

4,901

 

7,704

Deferred income taxes

(3,922)

 

(1,753)

 

(1,812)

 

(3,922)

 

(1,753)

 

(1,812)

Tax benefit of stock options exercised

4,259

 

4,466

 

5,743

 

-

 

-

 

-

Changes in operating assets and liabilities:

 

 

-

 

-

 

 

 

-

 

-

Restricted cash

8,496

 

8,496

 

8,496

 

-

 

-

 

-

Short-term investments

(2,074)

 

11,343

 

4,448

 

(2,074)

 

11,343

 

4,448

Accounts receivable

(1,622)

 

(6,823)

 

(12,347)

 

(1,622)

 

(6,823)

 

(12,347)

Prepaids and other assets

(3,488)

 

(3,424)

 

(2,116)

 

(3,488)

 

(3,424)

 

(2,116)

Direct marketing costs, net

(1,135)

 

(2,082)

 

(2,969)

 

(1,135)

 

(2,082)

 

(2,969)

Accounts payable and accrued liabilities

2,765

 

22,714

 

23,453

 

2,765

 

22,714

 

23,453

Deferred revenue

(2,679)

 

(7,843)

 

5,730

 

(2,679)

 

(7,843)

 

5,730

Net cash flows from operating activities

16,994

 

62,789

 

91,504

 

4,239

 

49,827

 

77,265

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Facility expenditures and land purchases

-

 

(6,798)

 

(8,635)

 

-

 

(6,798)

 

(8,635)

Capital expenditures, net

(3,024)

 

(9,951)

 

(16,085)

 

(3,024)

 

(9,951)

 

(16,085)

Proceeds from sales and maturities of investments

240,986

 

626,433

 

921,513

 

240,986

 

626,433

 

921,513

Purchase of investments

(279,177)

 

(702,131)

 

(1,017,030)

 

(279,177)

 

(702,131)

 

(1,017,030)

Net cash flows from investing activities

(41,215)

 

(92,447)

 

(120,237)

 

(41,215)

 

(92,447)

 

(120,237)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

-

 

-

 

-

 

-

 

-

 

-

Exercise of stock options

4,235

 

4,583

 

7,682

 

8,494

 

9,049

 

13,425

Net cash flows from financing activities

4,235

 

4,583

 

7,682

 

8,494

 

9,049

 

13,425

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

(19,986)

 

(25,075)

 

(21,051)

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

 

 

 

 

(28,482)

 

(33,571)

 

(29,547)

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

43,042

 

43,042

 

43,042

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

 

 

 

51,538

 

51,538

 

51,538

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$23,056

 

$17,967

 

$21,991

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

 

 

 

 

 

 

$23,056

 

$17,967

 

$21,991

 

-27-

 


 

 

 

ITT EDUCATIONAL SERVICES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

 

 

 

RESTATED
(UNAUDITED)

 

AS PREVIOUSLY PRESENTED IN 2005 SEC FILINGS

 

For the Three Months Ended

 

For the Three Months Ended

 

March 31, 2004

 

June 30, 2004

 

September 30, 2004

 

March 31, 2004

 

June 30, 2004

 

September 30, 2004

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$9,026

 

$13,980

 

$18,460

 

$9,026

 

$13,980

 

$18,460

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

4,867

 

4,921

 

3,920

 

4,867

 

4,921

 

3,920

Provision for doubtful accounts

2,501

 

2,400

 

2,803

 

2,501

 

2,400

 

2,803

Deferred income taxes

(3,922)

 

2,169

 

(52)

 

(3,922)

 

2,169

 

(52)

Tax benefit of stock options exercised

4,259

 

207

 

1,277

 

-

 

-

 

-

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

8,496

 

-

 

-

 

-

 

-

 

-

Short-term investments

(2,074)

 

13,161

 

(6,895)

 

(2,074)

 

13,161

 

(6,895)

Accounts receivable

(1,622)

 

(5,201)

 

(5,524)

 

(1,622)

 

(5,201)

 

(5,524)

Prepaids and other assets

(3,488)

 

64

 

1,308

 

(3,488)

 

64

 

1,308

Direct marketing costs, net

(1,135)

 

(947)

 

(887)

 

(1,135)

 

(947)

 

(887)

Accounts payable and accrued liabilities

2,765

 

19,949

 

732

 

2,765

 

19,949

 

732

Deferred revenue

(2,679)

 

(5,164)

 

13,573

 

(2,679)

 

(5,164)

 

13,573

Net cash flows from operating activities

16,994

 

45,539

 

28,715

 

4,239

 

45,332

 

27,438

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Facility expenditures and land purchases

-

 

(6,798)

 

(1,837)

 

-

 

(6,798)

 

(1,837)

Capital expenditures, net

(3,024)

 

(6,927)

 

(6,134)

 

(3,024)

 

(6,927)

 

(6,134)

Proceeds from sales and maturities of investments

240,986

 

385,447

 

295,080

 

240,986

 

385,447

 

295,080

Purchase of investments

(279,177)

 

(422,698)

 

(314,899)

 

(279,177)

 

(422,698)

 

(314,899)

Net cash flows from investing activities

(41,215)

 

(50,976)

 

(27,790)

 

(41,215)

 

(50,976)

 

(27,790)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

-

 

-

 

-

 

-

 

-

 

-

Exercise of stock options

4,235

 

348

 

3,099

 

8,494

 

555

 

4,376

Net cash flows from financing activities

4,235

 

348

 

3,099

 

8,494

 

555

 

4,376

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

(19,986)

 

(5,089)

 

4,024

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

 

 

 

 

(28,482)

 

(5,089)

 

4,024

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

43,042

 

23,056

 

17,967

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

 

 

 

51,538

 

23,056

 

17,967

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$23,056

 

$17,967

 

$21,991

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

 

 

 

 

 

 

$23,056

 

$17,967

 

$21,991

 

-28-

 


 

 

 

ITT EDUCATIONAL SERVICES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Dollar amounts in thousands)

 

 

 

 

RESTATED
(UNAUDITED)

 

AS PREVIOUSLY PRESENTED IN 2004 10-K FILING

 

Year Ended December 31,

 

Year Ended December 31,

 

2004

 

2003

 

2002

 

2004

 

2003

 

2002

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income

$75,263

 

$58,858

 

$43,854

 

$75,263

 

$58,858

 

$43,854

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

18,249

 

21,190

 

21,117

 

18,249

 

21,190

 

21,117

Provision for doubtful accounts

11,996

 

6,134

 

6,872

 

11,996

 

6,134

 

6,872

Deferred income taxes

5,290

 

(2,835)

 

2,156

 

5,290

 

(2,835)

 

2,156

Tax benefit of stock options exercised

6,355

 

12,295

 

3,308

 

-

 

-

 

-

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

302

 

(1,393)

 

(1,641)

 

-

 

-

 

-

Short-term investments

13,347

 

12,197

 

15,397

 

13,347

 

12,197

 

15,397

Accounts receivable

(13,028)

 

(6,559)

 

(3,166)

 

(13,028)

 

(6,559)

 

(3,166)

Prepaids and other assets

(1,952)

 

2,400

 

1,541

 

(1,952)

 

2,400

 

1,541

Direct marketing costs, net

(3,869)

 

(235)

 

(89)

 

(3,869)

 

(235)

 

(89)

Accounts payable and accrued liabilities

4,501

 

33,647

 

13,304

 

4,501

 

33,647

 

13,304

Deferred revenue

26,428

 

27,367

 

25,845

 

26,428

 

27,367

 

25,845

Net cash flows from operating activities

142,882

 

163,066

 

128,498

 

136,225

 

152,164

 

126,831

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Facility expenditures and land purchases

(16,376)

 

(25,718)

 

(19,843)

 

(16,376)

 

(25,718)

 

(19,843)

Capital expenditures, net

(19,116)

 

(14,391)

 

(14,265)

 

(19,116)

 

(14,391)

 

(14,265)

Proceeds from sales and maturities of investments

1,128,172

 

179,230

 

-

 

1,128,172

 

179,230

 

-

Purchase of investments

(1,277,816)

 

(368,392)

 

-

 

(1,277,816)

 

(368,392)

 

-

Net cash flows from investing activities

(185,136)

 

(229,271)

 

(34,108)

 

(185,136)

 

(229,271)

 

(34,108)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

-

 

(28,726)

 

(44,451)

 

-

 

(28,726)

 

(44,451)

Exercise of stock options

8,601

 

14,039

 

10,293

 

14,956

 

26,334

 

13,601

Net cash flows from financing activities

8,601

 

(14,687)

 

(34,158)

 

14,956

 

(2,392)

 

(30,850)

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

(33,653)

 

(80,892)

 

60,232

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

 

 

 

 

(33,955)

 

(79,499)

 

61,873

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

43,042

 

123,934

 

63,702

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

 

 

 

51,538

 

131,037

 

69,164

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$9,389

 

$43,042

 

$123,934

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of period

 

 

 

 

 

 

$17,583

 

$51,538

 

$131,037

 

 

-29-