QUARTERLY FINANCIAL RESULTS

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY FINANCIAL RESULTS

ITT EDUCATIONAL SERVICES, INC.

QUARTERLY FINANCIAL RESULTS

FOR 2013 AND 2012

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31			June 30			Sept. 30			Dec. 31 (3)			Year
2013 (1)
Revenue	$	285,062		$	260,459		$	259,617		$	267,173		$	1,072,311
Cost of educational services		124,176			123,541			120,204			118,432			486,353
Student services and administrative expenses		101,721			98,335			96,182			101,303			397,541
Legal and other investigation costs		1,500			213			2,089			3,121			6,923
Loss related to loan program guarantees		3,803			0			4,826			82,335			90,964
Provision for PEAKS Trust student loan losses		0			4,319			16,382			8,648			29,349
Operating income (loss)		53,862			34,051			19,934			(46,666	)		61,181
(Loss) on consolidation of PEAKS Trust		(73,248	)		0			0			0			(73,248	)
Interest income		34			25			16			33			108
Interest (expense)		(3,574	)		(7,369	)		(7,190	)		(7,144	)		(25,277	)
Income (loss) before provision for income taxes		(22,926	)		26,707			12,760			(53,777	)		(37,236	)
Provision (benefit) for income taxes		(5,655	)		6,503			3,336			(14,396	)		(10,212	)
Net income (loss)	$	(17,271	)	$	20,204		$	9,424		$	(39,381	)	$	(27,024	)
Earnings (loss) per share:
Basic	($	0.74	)	$	0.86		$	0.40		($	1.68	)	($	1.15	)
Diluted	($	0.74	)	$	0.86		$	0.40		($	1.68	)	($	1.15	)
2012 (2)
Revenue	$	339,209		$	328,061		$	313,791		$	305,572		$	1,286,633
Cost of educational services		134,941			140,067			133,948			129,394			538,350
Student services and administrative expenses		101,319			105,895			104,647			88,995			400,856
Asset impairment		0			0			0			15,166			15,166
Legal and other investigation costs		0			873			0			0			873
Loss related to loan program guarantees		3,054			3,906			5,095			88,970			101,025
Operating income (loss)		99,895			77,320			70,101			(16,953	)		230,363
Interest income		681			502			125			40			1,348
Interest (expense)		(547	)		(1,254	)		(1,021	)		(901	)		(3,723	)
Income (loss) before provision for income taxes		100,029			76,568			69,205			(17,814	)		227,988
Provision (benefit) for income taxes		39,384			30,627			26,747			(7,740	)		89,018
Net income (loss)	$	60,645		$	45,941		$	42,458		($	10,074	)	$	138,970
Earnings (loss) per share:
Basic	$	2.39		$	1.96		$	1.82		($	0.44	)	$	5.82
Diluted	$	2.37		$	1.95		$	1.81		($	0.44	)	$	5.79

(1) The amounts shown for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 are the restated amounts, as reported in the amended Quarterly Reports on Form 10-Q (i.e., Form 10Q/As) for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, as filed with the SEC.

(2) The amounts shown for the fiscal quarters ended March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012 are the revised amounts, as reported in the amended Quarterly Reports on Form 10-Q (i.e., Form 10Q/As) for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, as filed with the SEC.

(3) We revised our Consolidated Statement of Income for the three months ended December 31, 2012 to reflect immaterial corrections for: (i) the recognition of revenue with respect to students who withdrew from a program of study, which reduced revenue by $5,471 and student services and administrative expenses by $5,571; (ii) losses related to the 2009 RSA, which increased both revenue and loss related to loan program guarantees by $10,200; and (iii) a contingent loss related to the 2009 RSA, which increased loss related to loan program guarantees by $1,084.