8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

DATE OF REPORT (Date of earliest event reported):  April 26, 2012

ITT EDUCATIONAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-13144	36-2061311
(State or other	(Commission	(IRS Employer
jurisdiction of	File Number)	Identification No.)
incorporation)

13000 North Meridian Street

Carmel, Indiana 46032-1404

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (317) 706-9200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The Press Release issued by the Registrant dated April 26, 2012 reporting the Registrant’s results of operations and financial condition for the Registrant’s fiscal quarter ended March 31, 2012, is incorporated herein by reference and furnished to the Securities and Exchange Commission with this report as Exhibit 99.1.

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Item 9.01.                   Financial Statements and Exhibits.

(d)   Exhibits:

The following exhibit is being furnished herewith:

Exhibit No.                                    Description

99.1 Text of Press Release issued by the Registrant dated April 26, 2012.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 26, 2012

ITT Educational Services, Inc.

By:  /s/ Christine G. Long

       Name: Christine G. Long

       Title: Senior Vice President, General

Counsel and Secretary

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INDEX TO EXHIBITS

Exhibit No.                                           Description

     99.1                                           Text of Press Release issued by the Registrant dated April 26, 2012

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EX-99.1

Exhibit 99.1

ITT EDUCATIONAL SERVICES, INC. REPORTS 2012 FIRST QUARTER RESULTS

CARMEL, IN, April 26, 2012—ITT Educational Services, Inc. (NYSE:  ESI), a leading proprietary provider of postsecondary degree programs in the United States, today reported that new student enrollment in the first quarter of 2012 decreased 17.0% to 18,067 compared to 21,761 in the same period in 2011.  Total student enrollment decreased 15.4% to 71,123 as of March 31, 2012 compared to 84,030 as of March 31, 2011.

The company provided the following information for the three months ended March 31, 2012 and 2011:

Financial and Operating Data for the Three Months Ended March 31st,Unless Otherwise Indicated
(Dollars in millions, except per share and per student data)
	2012			2011			Increase/ (Decrease)
Revenue	$	341.8		$	383.2			(10.8	)%
Operating Income	$	100.6		$	140.7			(28.5	)%
Operating Margin		29.4	%		36.7	%	(730) basis points
Net Income	$	61.1		$	85.4			(28.5	)%
Earnings Per Share (diluted)	$	2.38		$	2.91			(18.2	)%
New Student Enrollment		18,067			21,761			(17.0	)%
Continuing Students		53,056			62,269			(14.8	)%
Total Student Enrollment as of  March 31st		71,123			84,030			(15.4	)%
Persistence Rate as of  March 31st (A)		72.4	%		73.5	%	(110) basis points
Revenue Per Student	$	4,666		$	4,525			3.1	%
Cash and Cash Equivalents, Restricted Cash and Investments as of  March 31st	$	294.4		$	342.4			(14.0	)%
Bad Debt Expense as a Percentage of Revenue		4.6	%		3.3	%	130 basis points
Days Sales Outstanding as of  March 31st	14.5 days			14.0 days			0.5 days
Deferred Revenue as of  March 31st	$	180.1		$	265.5			(32.2	)%
Debt as of March 31st	$	175.0		$	150.0
Weighted Average Diluted Shares of Common Stock Outstanding		25,636,000			29,312,000
Shares of Common Stock Repurchased		2,097,200	(B)		2,000,000	(C)
Land and Building Purchases and Renovations	$	0.1	(D)	$	0.5	(E)		(73.7	)%
Number of New Colleges in Operation		4			0
Capital Expenditures, Net	$	4.5		$	4.7			(3.9	)%

____________

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

(B) For approximately $146.7 million or at an average price of $69.93 per share.

(C) For approximately $139.1 million or at an average price of $69.55 per share.

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

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

The Company adjusted its 2012 internal goal for earnings per share from the range of $7.50 to $8.50 to an adjusted range of $8.00 to $9.00.

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ITT Educational Services, Inc. will conduct a conference call with financial analysts to discuss its 2012 first 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: changes in federal and state governmental laws and regulations with respect to education and accreditation standards, or the interpretation or enforcement of those laws and regulations, 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; business conditions and growth in the postsecondary education industry and in the general economy; 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 federal or state authorizations or accreditations of its campuses or programs of study; 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 internally funded 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, Director of Communications                                          www.ittesi.com

(317) 706-9200

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ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
	As of
	March 31, 2012			December 31, 2011			March 31, 2011
	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	178,476		$	228,993		$	187,922
Short-term investments		114,806			148,488			152,612
Restricted cash		1,123			2,128			1,820
Accounts receivable, net		54,411			48,106			59,798
Deferred income taxes		12,566			9,759			5,402
Prepaid expenses and other current assets		17,832			18,814			24,388
Total current assets		379,214			456,288			431,942
Property and equipment, net		198,493			201,257			196,579
Deferred income taxes		34,081			33,267			28,125
Other assets		49,516			38,006			44,869
Total assets	$	661,304		$	728,818		$	701,515
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	77,664		$	78,876		$	72,689
Accrued compensation and benefits		13,323			21,438			19,345
Other current liabilities		50,920			18,190			61,321
Deferred revenue		180,147			226,543			265,540
Total current liabilities		322,054			345,047			418,895
Long-term debt		175,000			150,000			150,000
Other liabilities		72,629			64,972			52,151
Total liabilities		569,683			560,019			621,046
Shareholders' equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized, none issued		0			0			0
Common stock, $.01 par value, 300,000,000 shares authorized, 37,068,904 issued		371			371			371
Capital surplus		194,027			189,573			177,594
Retained earnings		884,230			827,675			607,765
Accumulated other comprehensive (loss)		(9,316	)		(9,479	)		(4,563	)
Treasury stock, 12,934,377, 10,969,425 and 8,999,196 shares, at cost		(977,691	)		(839,341	)		(700,698	)
Total shareholders' equity		91,621			168,799			80,469
Total liabilities and shareholders' equity	$	661,304		$	728,818		$	701,515

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ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
	Three Months
	Ended March 31,
	(unaudited)
	2012			2011
Revenue	$	341,794		$	383,171
Costs and expenses:
Cost of educational services		134,941			137,926
Student services and administrative expenses		106,266			104,583
Total costs and expenses		241,207			242,509
Operating income		100,587			140,662
Interest income		681			835
Interest (expense)		(547	)		(557	)
Income before provision for income taxes		100,721			140,940
Provision for income taxes		39,650			55,554
Net income	$	61,071		$	85,386
Earnings per share:
Basic	$	2.40		$	2.94
Diluted	$	2.38		$	2.91
Supplemental Data:
Cost of educational services		39.5	%		36.0	%
Student services and administrative expenses		31.1	%		27.3	%
Operating margin		29.4	%		36.7	%
Student enrollment at end of period		71,123			84,030
Campuses at end of period		145			130
Shares for earnings per share calculation:
Basic		25,420,000			29,085,000
Diluted		25,636,000			29,312,000
Effective tax rate		39.4	%		39.4	%

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ITT EDUCATIONAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
	Three Months
	Ended March 31,
	(unaudited)
	2012			2011
Cash flows from operating activities:
Net income	$	61,071		$	85,386
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization		7,420			6,842
Provision for doubtful accounts		15,601			12,667
Deferred income taxes		(3,742	)		(2,685	)
Excess tax benefit from stock option exercises		(805	)		(351	)
Stock-based compensation expense		4,483			3,914
Other		(339	)		(1,430	)
Changes in operating assets and liabilities:
Restricted cash		1,005			(1,565	)
Accounts receivable		(21,906	)		(3,528	)
Accounts payable		(1,212	)		4,769
Other operating assets and liabilities		22,166			56,922
Deferred revenue		(46,396	)		21,178
Net cash flows from operating activities		37,346			182,119
Cash flows from investing activities:
Facility expenditures and land purchases		(132	)		(502	)
Capital expenditures, net		(4,518	)		(4,699	)
Proceeds from sales and maturities of investments and repayment of notes		98,955			142,085
Purchase of investments and note advances		(63,545	)		(158,589	)
Net cash flows from investing activities		30,760			(21,705	)
Cash flows from financing activities:
Excess tax benefit from stock option exercises		805			351
Proceeds from exercise of stock options		4,668			3,028
Debt issue costs		(1,525	)		0
Proceeds from revolving borrowings		175,000			0
Repayments of revolving borrowings		(150,000	)		0
Repurchase of common stock and shares tendered for taxes		(147,571	)		(139,650	)
Net cash flows from financing activities		(118,623	)		(136,271	)
Net change in cash and cash equivalents		(50,517	)		24,143
Cash and cash equivalents at beginning of period		228,993			163,779
Cash and cash equivalents at end of period	$	178,476		$	187,922

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