<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended DECEMBER 31, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-13144
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ESI 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ITT EDUCATIONAL SERVICES, INC.
5975 CASTLE CREEK PARKWAY N. DRIVE
P.O. BOX 50466
INDIANAPOLIS, INDIANA 46250-0466
(317) 594-9499
<PAGE>
ESI 401(k) PLAN
Annual Report to the Securities and Exchange Commission
December 31, 1998
ITEM 4. The ESI 401(k) Plan (the "Plan") is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and the Plan's
financial statements and schedules have been prepared in accordance
with the financial reporting requirements of ERISA. Such financial
statements and schedules are included in this Report in lieu of the
information required by Items 1-3 of Form 11-K.
FINANCIAL STATEMENTS AND EXHIBIT.
<TABLE>
<CAPTION>
INDEX
Page
----
<S> <C>
Report of Independent Accountants................................................................................3
Statement of Net Assets Available for Plan Benefits, with Fund Information, at December 31, 1998.................4
Statement of Changes in Net Assets Available for Plan Benefits, with Fund
Information, for the year ended December 31,
1998............................................................................................................6
Notes to Financial Statements....................................................................................8
Supplemental Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 (Schedule I)................................................................13
Item 27(d) - Schedule of Reportable Transactions for the year ended
December 31, 1998 (Schedule V)......................................................................14
Signatures......................................................................................................S-1
Index to Exhibit................................................................................................S-2
</TABLE>
- 2 -
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of the ESI 401(k) Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for
plan benefits present fairly, in all material respects, the net assets
available for plan benefits of the ESI 401(k) Plan at December 31, 1998, and
the changes in net assets available for plan benefits for the period ended
December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the plan's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes as of December 31, 1998 and reportable
transactions for the period ended December 31, 1998 are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of net assets available for plan benefits and
the statement of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for
plan benefits of each fund. These supplemental schedules and fund information
are the responsibility of the plan's management. The supplemental schedules
and fund information have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
PRICEWATERHOUSECOOPERS LLP
Indianapolis, Indiana
June 28, 1999
- 3 -
<PAGE>
<TABLE>
<CAPTION>
ESI 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------------------------------------------
AMERICAN AMERICAN AMERICAN
AMERICAN CENTURY CENTURY CENTURY AMERICAN CENTURY STRATEGIC ALLOCATION FUND:
CENTURY REAL ESTATE VALUE INTERNATIONAL --------------------------------------------
ULTRA FUND FUND FUND GROWTH FUND CONSERVATIVE MODERATE AGGRESSIVE
----------- ----------- ---------- ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Registered investment
company $ 4,076,269 $ 5,998 $161,005 $ 1,282,943 $ 135,250 $ 5,856,365 $ 60,684
Common/collective fund - - - - - - -
Employer securities - - - - - - -
Interest-bearing cash - - - - - - -
Contributions
receivable:
Employer - - - - - - -
Participant 17,647 138 1,109 6,787 500 34,091 2,018
Participant loans - - - - - - -
------------- ---------- ---------- ------------- ------------ ------------ -------------
Net assets available
for plan benefits $ 4,093,916 $ 6,136 $162,114 $ 1,289,730 $ 135,750 $ 5,890,456 $ 62,702
------------- ---------- ---------- ------------- ------------- ------------ -------------
------------- ---------- ---------- ------------- ------------- ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- 4 -
<PAGE>
<TABLE>
<CAPTION>
ESI 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION, CONTINUED
DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------------------------------------------------
AMERICAN
CENTURY JPM PIERPONT JPM PIERPONT SEI TRUST ESI
INCOME AND U.S. SMALL BOND STABLE STOCK LOAN
GROWTH FUND COMPANY FUND FUND ASSET FUND FUND FUND TOTAL
-------------- ----------------------------- ------------ ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Registered investment
company $ 11,897,746 $ 252,509 $ 923,227 $ - $ - $ - $ 24,651,996
Common/collective fund - - - 5,554,066 - 5,554,066
Employer securities - - - - 13,915,928 - 13,915,928
Interest-bearing cash - - - - 145,023 - 145,023
Contributions receivable:
Employer - - - - 88,198 - 88,198
Participant 40,330 1,074 3,050 20,151 43,462 - 170,357
Participant loans - - - - - 2,236,484 2,236,484
-------------- -------------- ------------- ------------ ----------- ----------- ------------
Net assets available for
plan benefits $ 11,938,076 $ 253,583 $ 926,277 $ 5,574,217 $ 14,192,611 $2,236,484 $46,762,052
-------------- -------------- ------------- ------------ ------------- ----------- -------------
-------------- -------------- ------------- ------------ ------------- ----------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- 5 -
<PAGE>
<TABLE>
<CAPTION>
ESI 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION FOR THE PERIOD ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------------------------------------------
AMERICAN AMERICAN AMERICAN
AMERICAN CENTURY CENTURY CENTURY AMERICAN CENTURY STRATEGIC ALLOCATION FUND:
CENTURY REAL ESTATE VALUE INTERNATIONAL --------------------------------------------
ULTRA FUND FUND FUND GROWTH FUND CONSERVATIVE MODERATE AGGRESSIVE
----------- ----------- ---------- ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets:
Transfer in from
ITT Plan $ 3,269,267 $ - $ - $ 1,235,142 $ - $ 6,144,190 $ -
Contributions:
Employer 7,346 50 119 3,584 119 7,876 56
Participant 252,191 1,534 11,423 104,933 3,753 479,875 18,762
Rollover 22,434 517 36,624 16,570 2,806 12,780 6,292
Investment income:
Net appreciation
(depreciation) in
fair value of
investments 230,586 (657) (18,627) (81,080) (1,821) (117,364) (14,596)
Interest and dividends 345,036 157 25,201 21,197 5,013 318,351 1,985
Deductions from net
assets:
Disbursements to
participants (76,523) - (119) (11,622) - (392,411) (116)
Administrative
expenses (587) (17) (76) (265) - (840) (37)
Transfers (to) from
other funds 46,243 3,071 123,853 49,815 125,005 (540,203) 47,229
------------- ---------- ---------- ----------- ------------ -------------- --------------
Net increase 4,095,993 4,655 178,398 1,338,274 134,875 5,912,254 59,575
Net assets available
for plan benefits,
beginning of period - - - - - - -
------------- ----------- ---------- ----------- ------------ -------------- --------------
Net assets available
for plan benefits,
end of period $ 4,095,993 $ 4,655 $ 178,398 $ 1,338,274 $ 134,875 $ 5,912,254 $ 59,575
------------- ----------- ---------- ----------- ------------- -------------- --------------
------------- ----------- ---------- ----------- ------------- -------------- --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- 6 -
<PAGE>
<TABLE>
<CAPTION>
ESI 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION, CONTINUED
FOR THE PERIOD ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
--------------------------------------------------------------------------------------------------------
AMERICAN
CENTURY JPM PIERPONT JPM PIERPONT SEI TRUST ESI
INCOME AND U.S. SMALL BOND STABLE STOCK LOAN
GROWTH FUND COMPANY FUND FUND ASSET FUND FUND FUND TOTAL
-------------- -------------- ------------- ------------ ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets:
Transfer in from
ITT Plan $ 10,859,028 $ - $ 669,748 $ 4,648,590 $ 9,247,887 $ 2,172,419 $38,246,271
Contributions:
Employer 11,127 50 798 8,875 1,254,141 - 1,294,141
Participant 617,989 9,874 33,881 300,434 700,873 - 2,535,522
Rollover 31,459 6,624 26,496 233,103 2,462 - 398,167
Investment income:
Net appreciation
(depreciation)
in fair value
of investments 774,902 18,016 (9,090) - 3,773,081 - 4,553,350
Interest and
dividends 515,132 5,212 38,404 204,888 16 105,863 1,586,455
Deductions from net
assets:
Disbursements to
participants (336,737) (117) (4,097) (486,422) (494,087) (44,360) (1,846,611)
Administrative
expenses (813) - (30) (1,107) (1,471) - (5,243)
Transfers (to) from
other funds (377,656) 210,942 162,668 700,409 (548,818) (2,558) -
-------------- -------------- -------------- ------------ ----------- ------------ -------------
Net increase 12,094,431 250,601 918,778 5,608,770 13,934,084 2,231,364 46,762,052
Net assets available
for plan benefits,
beginning of period - - - - - - -
-------------- -------------- -------------- ------------ ------------ ------------ -------------
Net assets available
for plan benefits,
end of period $ 12,094,431 $ 250,601 $ 918,778 $ 5,608,770 $ 13,934,084 $ 2,231,364 $46,762,052
-------------- ------------- -------------- ------------ ------------- ------------ -------------
-------------- ------------- -------------- ------------ ------------- ------------ -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- 7 -
<PAGE>
ESI 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
1. SUMMARY OF PLAN PROVISIONS
The following description of the ESI 401(k) Plan (the "Plan") provides
only general information. Participants should refer to the Summary Plan
Description and the Plan document for more complete descriptions of the
Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all salaried employees
of ITT Educational Services, Inc. ("ESI") (or an affiliate of ESI that
adopts the Plan) who have completed one year of service. It is subject to
Section 401(a) of the Internal Revenue Code (the "IRC") and the
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The ESI Employee Benefit Plan Administration and
Investment Committee (the "Committee") is the plan administrator of the
Plan for purposes of ERISA. J.P. Morgan/American Century Retirement Plan
Services provides administrative services under a written agreement with
the Committee. UMB Bank, N.A. is trustee of the trust for the Plan.
The Plan became effective in June 1998. Prior to June 1998, ESI employees
participated in The ITT 401(k) Retirement Savings Plan (the "ITT Plan")
of ITT Corporation, ESI's former parent corporation. In June 1998, the
portion of the ITT Plan assets attributable to ESI employees began being
transferred to the ESI employees' Plan accounts, which is reflected in
the statement of changes in net assets available for plan benefits as
"Transfer in from ITT Plan." As of December 31, 1998, not all of the
assets attributable to ESI employees in the ITT Plan had been
transferred to the ESI employees' Plan accounts. All assets
attributable to ESI employees that remain in the ITT Plan on December
31, 1999, will be transferred to the ESI employees' Plan accounts.
CONTRIBUTIONS
Each year, a participant may contribute up to 16% of pretax annual base
compensation, as defined in the Plan. ESI makes a matching contribution
equal to 50% of the first 5% of base compensation that a participant
contributes to the Plan during each payroll processing period. In
addition, ESI makes a retirement contribution of 1% of a participant's
base compensation for each payroll processing period. ESI contributions
are made in or invested in ESI common stock. Participant contributions
are invested among a number of available investment funds as directed by
each participant. Contributions are subject to certain limitations.
PARTICIPANT PLAN ACCOUNTS
Each participant's Plan account is credited with the participant's
contribution and allocations of (a) the ESI contribution and (b) Plan
earnings, and is charged with an allocation of administrative expenses.
Earnings and administrative expenses are allocated based on account
balances. Contributions are allocated based on the contribution formula
described in the preceding paragraph. The benefit to which a participant
is entitled is the benefit that can be provided from the vested portion
of participant's Plan account. Forfeitures from terminated participants'
nonvested accounts are used to reduce future ESI contributions.
- 8 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
1. SUMMARY OF PLAN PROVISIONS, CONTINUED
VESTING
Participants are 100% vested in their contributions and ESI retirement
contributions, plus any actual earnings on those contributions. Vesting
in the ESI matching contributions and the earnings on those contributions
is based on the participant's years of continuous service with ESI in
accordance with the following table:
<TABLE>
<CAPTION>
VESTED
YEARS OF SERVICE PERCENT
----------------------------- -----------
<S> <C>
Less than 1 0%
At least 1 but less than 2 20%
At least 2 but less than 3 40%
At least 3 but less than 4 60%
At least 4 but less than 5 80%
At least 5 100%
</TABLE>
LOANS
A participant may borrow from his or her Plan account, while employed by
ESI, up to the lesser of $50,000 or 50% of the vested portion of the Plan
account balance. Loan terms cannot exceed five years, unless the loan is
to be used in conjunction with the purchase of a participant's primary
residence. The loans are secured by the amounts transferred to the Loan
Fund (as defined in the Plan) from the participant's Plan account and
bear interest at a rate determined by the Committee. Loan principal and
interest are paid ratably by monthly payroll deductions, or as otherwise
agreed to by the participant and the Committee.
INVESTMENT OPTIONS
The Plan trustee has established and maintains 12 separate investment
funds into which participants may direct their contributions. Those 12
separate funds are as follows:
- AMERICAN CENTURY ULTRA FUND--Invests in a diversified portfolio of
medium- and large-size companies that fund management considers to
have above-average potential for appreciation.
- AMERICAN CENTURY REAL ESTATE FUND--Invests primarily in securities
issued by real estate investment trusts with potential for long-term
capital appreciation.
- AMERICAN CENTURY VALUE FUND--Invests in equity securities of
well-established companies that fund management believes to be
undervalued at the time of purchase.
- AMERICAN CENTURY INTERNATIONAL GROWTH FUND--Invests in a diversified
range of foreign companies with above-average potential for
appreciation.
- AMERICAN CENTURY STRATEGIC ALLOCATION FUND: CONSERVATIVE--Invests in
bond and money market securities and equity securities with the
objective of moderate long-term growth.
- AMERICAN CENTURY STRATEGIC ALLOCATION FUND: MODERATE--Invests in
equity securities and maintains a sizable stake in bonds and money
market securities to provide long-term growth and some regular
income.
- 9 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- ------------------------------------------------------------------------------
1. SUMMARY OF PLAN PROVISIONS, CONTINUED
- AMERICAN CENTURY STRATEGIC ALLOCATION FUND: AGGRESSIVE--Invests in
equity securities and some bonds and money market securities to
provide long-term growth and a small amount of income.
- AMERICAN CENTURY INCOME & GROWTH FUND--Invests in stocks of companies
with strong dividend growth potential and large U.S. companies whose
stocks appear under-valued.
- JPM PIERPONT U.S. SMALL COMPANY FUND--Invests in equity securities of
small companies considered to be likely to provide a high total
return.
- JPM PIERPONT BOND FUND--Invests in a diversified portfolio of fixed
income securities, including, but not limited to, U.S. government and
agency securities, corporate securities, private placements and
asset-backed mortgage-related securities.
- SEI TRUST STABLE ASSET FUND--Invests exclusively in a diversified
pool of high-quality fixed income securities.
- ESI STOCK FUND--Invests in shares of ESI common stock.
FUND TRANSFERS
Transfers between funds result from participants redirecting their
contributions between the funds listed above.
DISTRIBUTIONS
A participant is eligible to receive a distribution from the Plan upon
the participant's termination of service, death, disability, retirement
or demonstration of financial hardship. Payments are normally made in the
form of a single lump sum. If the value of the participant's vested Plan
account balance exceeds $5,000, however, the participant may elect
instead to receive payment in one of the following forms: (a) annual
installments; (b) monthly installments; or (c) a nonforfeitable annuity,
which will be purchased from an insurance company by the Plan on the
participant's behalf.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
- 10 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- ------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INVESTMENTS AND INVESTMENT INCOME
Investments, which are exposed to various risks, such as interest rate,
market and credit risks, are stated at fair value as determined by the
Plan trustee as the quoted market value or unit values based upon
quoted market values as of the last business day of the plan year.
Participant loans are valued at cost, which approximates fair value.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of realized gains and losses and the
unrealized appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
Disbursements to participants are recorded when paid.
3. INVESTMENTS
The following is a summary of investments at December 31, 1998 that
represent 5% or more of net assets available for Plan benefits:
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-------------------------------
CURRENT
SHARES VALUE
------------- ----------------
<S> <C> <C>
SEI Trust Stable Asset Fund 5,554,066 $5,554,066
American Century Strategic Allocation Fund: Moderate 943,054 5,856,365
American Century Income & Growth Fund 406,761 11,897,747
American Century Ultra Fund 122,007 4,076,269
ESI Stock Fund 409,292 14,060,951
</TABLE>
4. ADMINISTRATIVE FEES
Participant accounts were charged $5,243 for administrative fees related
to the Plan for the period ended December 31, 1998. ESI paid
administrative fees of $38,707 for the period ended December 31, 1998.
5. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by J.P.
Morgan/American Century or its affiliates and, therefore, these
investments qualify as party-in-interest transactions, which are exempt
from the ERISA prohibited transaction rules. In addition, participants in
the Plan may invest their contributions in the ESI Stock Fund, which
primarily holds shares of ESI common stock. At December 31, 1998, the ESI
Stock Fund held 409,292 shares with a historical cost of $10,224,846 and
a market value of $13,915,928.
- 11 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -----------------------------------------------------------------------------
6. PLAN TERMINATION
Although it has not expressed any intent to do so, ESI has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100% vested in their Plan
accounts.
7. INCOME TAX STATUS
The Internal Revenue Service issued a determination letter on April 13,
1999 stating that the Plan qualifies for tax-exempt status under the
applicable provisions of the IRC.
- 12 -
<PAGE>
ESI 401(k) PLAN
LINE 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF PARTY OF ASSET COST VALUE
- --------------------------------------- ------------------------------------- -------------- --------------
<S> <C> <C> <C>
Participant loans* Rates range from 8.75%-9.5% $2,236,484 $2,236,484
SEI Trust Stable Asset Fund* Common/collective fund 5,554,066 5,554,066
American Century Ultra Fund* Registered investment company 3,852,251 4,076,269
American Century Real Estate Fund* Registered investment company 6,625 5,998
American Century Value Fund* Registered investment company 180,159 161,005
American Century International
Growth Fund* Registered investment company 1,348,325 1,282,943
American Century Strategic Allocation
Fund: Conservative* Registered investment company 137,075 135,250
American Century Strategic Allocation
Fund: Moderate* Registered investment company 5,931,496 5,856,365
American Century Strategic Allocation
Fund: Aggressive* Registered investment company 59,556 60,684
American Century Income & Growth Fund* Registered investment company 11,077,650 11,897,746
J.P. Morgan Pierpont Small Company Fund* Registered investment company 246,598 252,509
J.P. Morgan Pierpont Bond Fund* Registered investment company 932,646 923,227
ESI Stock Fund* Common stock 10,224,846 13,915,928
ESI Stock Fund* Cash 145,023 145,023
------------ ------------
$41,932,800 $46,503,497
------------ ------------
------------ ------------
</TABLE>
*Denotes party-in-interest
- 13 -
<PAGE>
ESI 401(k) PLAN
LINE 27d--SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
FOR THE PERIOD ENDED DECEMBER 31, 1998
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT VALUE NET
OF ASSET ON GAIN
DESCRIPTION PURCHASE PRICE (P) COST OF TRANSACTION OR
IDENTITY OF PARTY OF ASSET SALES PRICE (S) ASSET DATE (LOSS)
- ---------------------------------- ----------------------------- ------------------- ----------- ------------- --------
<S> <C> <C> <C> <C> <C>
American Century Ultra Fund* Registered investment company $ 4,338,874 (P) $ 4,338,874 $ 4,338,874 $ -
American Century Ultra Fund* Registered investment company 493,192 (S) 486,623 493,192 6,569
American Century Strategic
Asset Allocation Fund: Moderate* Registered investment company 7,286,007 (P) 7,286,007 7,286,007 -
American Century Strategic Asset
Allocation Fund: Moderate* Registered investment company 1,312,278 (S) 1,354,511 1,312,278 (42,233)
American Century Income and
Growth Fund* Registered investment company 12,677,769 (P) 12,677,769 12,677,769 -
American Century Income and
Growth Fund* Registered investment company 1,554,924 (S) 1,600,120 1,554,924 (45,196)
ESI Stock Fund* Common stock 13,211,721 (P) 13,211,721 13,211,721 -
ESI Stock Fund* Common stock 2,923,852 (S) 2,696,830 2,923,852 227,022
SEI Trust Stable Asset Fund* Common/collective fund 7,911,472 (P) 7,911,472 7,911,472 -
SEI Trust Stable Asset Fund* Common/collective fund 2,357,406 (S) 2,357,406 2,357,406 -
</TABLE>
*Denotes party-in-interest
- 14 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the ESI Employee Benefit Plan Administration and Investment Committee of
the ESI 401(k) Plan have duly caused this annual report to be signed on its
behalf by the undersigned, hereunto duly authorized.
ESI 401(k) PLAN
By: /s/ Gene A. Baugh Date: June 29, 1999
-------------------------
GENE A. BAUGH
MEMBER
By: /s/ G. Elaine Johnson Date: June 29, 1999
--------------------------
G. ELAINE JOHNSON
MEMBER
By: /s/ Sharon L. Murley Date: June 29, 1999
--------------------------
SHARON L. MURLEY
MEMBER
By: /s/ Joseph B. Rainier Date: June 29, 1999
--------------------------
JOSEPH B. RAINIER
MEMBER
By: /s/ Jennifer E. Yonce Date: June 29, 1999
---------------------------
JENNIFER E. YONCE
MEMBER
S-1
<PAGE>
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
Exhibit
No. Description
- -----------------------------------------------------------------------------
<S> <C>
23 Consent of Independent Accountants.........................
</TABLE>
S-2
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-55903) of ITT Educational Services, Inc. of our
report dated June 28, 1999 relating to the financial statements, which appears
in this Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Indianapolis, Indiana
June 29, 1999
