exhibit99

exhibit99_1.htm

Exhibit 99.1

ITT EDUCATIONAL SERVICES, INC. REPORTS 2010 SECOND QUARTER RESULTS

CARMEL, IN, July 22, 2010—ITT Educational Services, Inc. (NYSE: ESI), a leading provider of technology-oriented postsecondary degree programs, today reported that new student enrollment in the second quarter of 2010 increased 10.1% to 21,673 compared to 19,692 in the same period in 2009. Total student enrollment increased 21.2% to 84,695 as of June 30, 2010 compared to 69,889 as of June 30, 2009.

The company provided the following information for the three and six months ended June 30, 2010 and 2009:

Financial and Operating Data for the Three Months Ended June 30th, Unless Otherwise Indicated
(Dollars in millions, except per share and per student data)


							Increase/
	2010				2009	(A)	(Decrease)

Revenue	$	401.8		$	317.1			26.7	%
Operating Income	$	157.1		$	115.9			35.5	%
Operating Margin		39.1	%		36.6	%	250 basis points
Net Income	$	96.0		$	71.1			35.1	%
Earnings Per Share (diluted)	$	2.78		$	1.85			50.3	%
New Student Enrollment		21,673			19,692			10.1	%
Continuing Students		63,022			50,197			25.5	%
Total Student Enrollment as of June 30th		84,695			69,889			21.2	%
Persistence Rate as of June 30th (B)		74.5	%		75.3	%	(80) basis points
Revenue Per Student	$	4,753		$	4,833			(1.7	)%
Cash and Cash Equivalents, Restricted Cash and
Investments as of June 30th	$	280.1		$	284.8			(1.6	)%
Bad Debt Expense as a Percentage of Revenue		5.7	%		5.9	%	(20) basis points
Days Sales Outstanding as of June 30th	22.3 days			20.0 days			2.3 days
Deferred Revenue as of June 30th	$	197.1		$	126.9			55.4	%
Debt as of June 30th	$	150.0		$	150.0
Weighted Average Diluted Shares of Common Stock Outstanding		34,525,000			38,425,000
Shares of Common Stock Repurchased		1,000,000	(C)		622,200	(D)
Land and Building Purchases and Renovations	$	1.8	(E)	$	0.8	(F)		125.4	%
Number of New Colleges in Operation		2			1	(G)
Capital Expenditures, Net	$	7.2		$	7.4			(2.1	)%

Financial and Operating Data for the Six Months Ended June 30th
(Dollars in millions, except per share and per student data)
	2010				2009	(A)	Increase/ (Decrease)

Revenue	$	785.8		$	605.2			29.8	%
Operating Income	$	299.7		$	214.4			39.8	%
Operating Margin		38.1	%		35.4	%	270 basis points
Net Income	$	183.5		$	132.0			39.0	%
Earnings Per Share (diluted)	$	5.24		$	3.41			53.7	%
Bad Debt Expense as a Percentage of Revenue		5.8	%		5.4	%	40 basis points
Revenue Per Student	$	9,507		$	9,480			0.3	%
Weighted Average Diluted Shares of Common Stock Outstanding		35,010,000			38,742,000
Shares of Common Stock Repurchased		1,952,500	(H)		1,150,033	(I)
Land and Building Purchases and Renovations	$	2.6	(J)	$	1.9	(F)		40.0	%
Number of New Colleges in Operation		4			2	(G)
Capital Expenditures, Net	$	12.5		$	12.0			4.4	%

_____________

(A)	Financial data is adjusted from amounts reported in prior periods for the change in accounting for direct costs related to the enrollment of new students (“Direct Marketing Costs”).

(B)	Represents the number of Continuing Students in the academic term, divided by the Total Student Enrollment in the immediately preceding academic term.

(C)	For approximately $105.0 million or at an average price of $105.03 per share.

(D)	For approximately $60.0 million or at an average price of $96.39 per share.

(E)	Represents costs associated with renovating, expanding or constructing buildings at 13 of the company’s locations.

(F)	Represents costs associated with renovating, expanding or constructing buildings at 10 of the company’s locations, excluding all land and buildings of Daniel Webster College that the company acquired.

(G)	Excludes Daniel Webster College.

(H)	For approximately $200.1 million or at an average price of $102.46 per share.

(I)	For approximately $124.3 million or at an average price of $108.11 per share.

(J)	Represents costs associated with renovating, expanding or constructing buildings at 17 of the company’s locations.

Kevin M. Modany, Chairman and Chief Executive Officer of ITT/ESI, said, "We are very pleased with the solid financial and operating results in the second quarter of 2010 and congratulate our faculty, campus management and staff for their contributions to our institutions and unwavering commitment to our students’ success. As a result of our performance in the first half of 2010, we are raising our 2010 internal goal for EPS from the range of $10.50 to $11.25 to a revised range of $11.00 to $11.35.”

Modany added, “The period for measuring the employment success of our 2009 graduates ended in the second quarter. Approximately 73% of our 2009 employable graduates obtained employment in positions using skills taught in their programs of study by April 30, 2010 compared to 77% of our 2008 employable graduates by April 30, 2009. The average annual salary reported by our 2009 employed graduates was approximately $31,600 compared to approximately $32,800 reported by our 2008 employed graduates.”

ITT Educational Services, Inc. will conduct a conference call with financial analysts to discuss its 2010 second quarter earnings at 11:00 am (ET) this morning. The public is invited to listen to a live webcast of the conference call. The webcast may be accessed by following the “Live Webcast” directions on ITT/ESI’s website at www.ittesi.com.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are made based on the current expectations and beliefs of the company's management concerning future developments and their potential effect on the company. The company cannot assure you that future developments affecting the company will be those anticipated by its management. These forward-looking statements involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the postsecondary education industry and in the general economy; changes in federal and state governmental laws and regulations with respect to education and accreditation standards, or the interpretation or enforcement thereof, including, but not limited to, the level of government funding for, and the company's eligibility to participate in, student financial aid programs utilized by the company's students; the company's failure to comply with the extensive education laws and regulations and accreditation standards that it is subject to; effects of any change in ownership of the company resulting in a change in control of the company, including, but not limited to, the consequences of such changes on the accreditation and federal and state regulation of its campuses; the company's ability to implement its growth strategies; the company's failure to maintain or renew required regulatory authorizations or accreditation of its campuses; receptivity of students and employers to the company's existing program offerings and new curricula; loss of access by the company's students to lenders for education loans; the company's ability to collect internal student financing from its students; the company’s exposure under its guarantees related to private student loan programs; the company's ability to successfully defend litigation and other claims brought against it; and other risks and uncertainties detailed from time to time in the company's filings with the U.S. Securities and Exchange Commission. The company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

FOR FURTHER INFORMATION:

COMPANY: WEB SITE:

Lauren Littlefield, Manager of Communications www.ittesi.com

(317) 706-9200

ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)


	As of
	June 30, 2010			December 31, 2009			June 30, 2009 (a)
	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	140,524		$	128,788		$	140,204
Short-term investments		139,486			143,407			144,500
Restricted cash		70			1,891			72
Accounts receivable, net		98,390			85,426			69,747
Deferred income taxes		17,141			13,799			14,132
Prepaid expenses and other current assets		16,671			17,651			15,978
Total current assets		412,282			390,962			384,633

Property and equipment, net		193,717			195,449			194,046
Deferred income taxes		12,237			6,416			9,976
Other assets		28,008			23,878			20,235
Total assets	$	646,244		$	616,705		$	608,890

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	76,116		$	61,275		$	62,420
Accrued compensation and benefits		26,049			26,323			21,016
Other current liabilities		14,491			25,261			27,206
Deferred revenue		197,107			171,933			126,878
Total current liabilities		313,763			284,792			237,520

Long-term debt		150,000			150,000			150,000
Other liabilities		29,049			25,328			21,948
Total liabilities		492,812			460,120			409,468

Shareholders' equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized, none issued		--			--			--
Common stock, $.01 par value,
300,000,000 shares authorized, 54,068,904 issued		541			541			541
Capital surplus		165,678			154,495			147,369
Retained earnings		1,182,204			1,006,903			842,488
Accumulated other comprehensive (loss)		(9,555	)		(10,093	)		(12,868	)
Treasury stock, 20,478,818, 18,622,809 and 16,361,095
shares, at cost		(1,185,436	)		(995,261	)		(778,108	)
Total shareholders' equity		153,432			156,585			199,422
Total liabilities and shareholders' equity	$	646,244		$	616,705		$	608,890

_______________

(a)	Amounts as of June 30, 2009 have been retrospectively adjusted from amounts reported in prior periods for the change in accounting for Direct Marketing Costs that was made in the fourth quarter of 2009.

ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)


	Three Months						Six Months
	Ended June 30,						Ended June 30,
	(unaudited)						(unaudited)
	2010			2009 (a)			2010			2009 (a)

Revenue	$	401,849		$	317,140		$	785,806		$	605,173

Costs and expenses:
Cost of educational services		133,763			110,792			268,145			211,879
Student services and administrative expenses		110,954			90,413			217,914			178,872
Total costs and expenses		244,717			201,205			486,059			390,751

Operating income		157,132			115,935			299,747			214,422
Interest income		533			878			1,242			2,111
Interest (expense)		(514	)		(208	)		(934	)		(402	)
Income before provision for income taxes		157,151			116,605			300,055			216,131
Provision for income taxes		61,111			45,509			116,564			84,117

Net income	$	96,040		$	71,096		$	183,491		$	132,014

Earnings per share:
Basic	$	2.82		$	1.87		$	5.31		$	3.45
Diluted	$	2.78		$	1.85		$	5.24		$	3.41

Supplemental Data:
Cost of educational services		33.3	%		34.9	%		34.1	%		35.0	%
Student services and administrative expenses		27.6	%		28.5	%		27.7	%		29.6	%
Operating margin		39.1	%		36.6	%		38.1	%		35.4	%
Student enrollment at end of period		84,695			69,889			84,695			69,889
Campuses at end of period		125			108			125			108
Shares for earnings per share calculation:
Basic		34,081,000			37,981,000			34,552,000			38,268,000
Diluted		34,525,000			38,425,000			35,010,000			38,742,000


Effective tax rate		38.9	%		39.0	%		38.8	%		38.9	%

________________

(a)	Amounts for the three and six months ended June 30, 2009 have been retrospectively adjusted from amounts reported in prior periods for the change in accounting for Direct Marketing Costs that was made in the fourth quarter of 2009.

ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)


	Three Months						Six Months
	Ended June 30,						Ended June 30,
	(unaudited)						(unaudited)
	2010			2009 (a)			2010			2009 (a)
Cash flows from operating activities:
Net income	$	96,040		$	71,096		$	183,491		$	132,014
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization		6,724			6,156			13,482			11,928
Provision for doubtful accounts		23,034			18,620			45,799			32,829
Deferred income taxes		(6,485	)		(3,303	)		(9,463	)		(4,992	)
Excess tax benefit from stock option exercises		(1,019	)		(94	)		(1,940	)		(3,887	)
Stock-based compensation expense		4,186			3,173			8,999			7,356
Other		334			(557	)		490			(422	)
Changes in operating assets and liabilities, net of acquisition:
Restricted cash		5,228			(1,808	)		1,821			8,324
Accounts receivable		(33,134	)		(36,057	)		(58,763	)		(72,000	)
Accounts payable		7,642			(2,787	)		14,841			6,056
Other operating assets and liabilities		(20,711	)		(25,122	)		22,340			2,508
Deferred revenue		5,312			(7,887	)		25,174			(36,956	)
Net cash flows from operating activities		87,151			21,430			246,271			82,758

Cash flows from investing activities:
Facility expenditures and land purchases		(1,754	)		(778	)		(2,593	)		(1,852	)
Capital expenditures, net		(7,241	)		(7,398	)		(12,539	)		(12,006	)
Acquisition of college, net of cash acquired		--			(20,792	)		--			(20,792	)
Proceeds from sales and maturities of investments and notes		115,128			36,791			199,826			85,389
Purchase of investments and notes		(115,602	)		(48,969	)		(222,774	)		(104,739	)
Net cash flows from investing activities		(9,469	)		(41,146	)		(38,080	)		(54,000	)

Cash flows from financing activities:
Excess tax benefit from stock option exercises		1,019			94			1,940			3,887
Proceeds from exercise of stock options		1,594			171			2,620			5,994
Repurchase of common stock and shares tendered for taxes		(105,315	)		(59,987	)		(201,015	)		(124,690	)
Net cash flows from financing activities		(102,702	)		(59,722	)		(196,455	)		(114,809	)

Net change in cash and cash equivalents		(25,020	)		(79,438	)		11,736			(86,051	)

Cash and cash equivalents at beginning of period		165,544			219,642			128,788			226,255

Cash and cash equivalents at end of period	$	140,524		$	140,204		$	140,524		$	140,204
_________________

(a)	Amounts for the three and six months ended June 30, 2009 have been retrospectively adjusted from amounts reported in prior periods for the change in accounting for Direct Marketing Costs that was made in the fourth quarter of 2009.