Exhibit 99.2
ITT EDUCATIONAL SERVICES, INC. |
| ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| ||||||||||
(Dollar amounts in thousands) |
| ||||||||||
|
| ||||||||||
| RESTATED |
| 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 |
| 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 |
| 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 |
| 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 |
| 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-