UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
ITT EDUCATIONAL SERVICES, INC.
------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 par value
-------------------------------------
(Title of Class of Securities)
4506B109
---------
(CUSIP Number)
Gregory D. Hitchan
Blum Capital Partners, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133
(415) 434-1111
-------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 21, 2004
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 10
CUSIP NO. 4506B109 SCHEDULE 13D Page 2 of 10
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON BLUM CAPITAL PARTNERS, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 94-3205364
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [x]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS* See Item 3
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION California
-----------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 4,114,000**
BENEFICIALLY
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 4,114,000**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,114,000**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0%**
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN, IA
-----------------------------------------------------------------------------
** See Item 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 4506B109 SCHEDULE 13D Page 3 of 10
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON RICHARD C. BLUM & ASSOCIATES, INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 94-2967812
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [x]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS* See Item 3
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION California
-----------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 4,114,000**
BENEFICIALLY
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 4,114,000**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,114,000**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0%**
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
-----------------------------------------------------------------------------
** See Item 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 4506B109 SCHEDULE 13D Page 4 of 10
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON BLUM STRATEGIC GP II, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 94-3395150
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [x]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS* See Item 3
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
-----------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 4,114,000**
BENEFICIALLY
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 4,114,000**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,114,000**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0%**
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO (Limited Liability Company)
-----------------------------------------------------------------------------
** See Item 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 4506B109 SCHEDULE 13D Page 5 of 10
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON RICHARD C. BLUM
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [x]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS* See Item 3
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A.
-----------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 4,114,000**
BENEFICIALLY
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 4,114,000**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,114,000**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0%**
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
-----------------------------------------------------------------------------
** See Item 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 4506B109 SCHEDULE 13D Page 6 of 10
Item 1. Security and Issuer
----------------------------
This Amendment No. 2 amends the Statement on Schedule 13D (the "Schedule
13D") filed with the Securities and Exchange Commission (the "Commission") on
May 17, 2004 by Blum Capital Partners, L.P., a California limited
partnership, ("Blum L.P."); Richard C. Blum & Associates, Inc., a California
corporation ("RCBA Inc."); Blum Strategic GP II, L.L.C., a Delaware limited
liability company ("Blum GP II"); and Richard C. Blum, the Chairman and a
substantial shareholder of RCBA Inc. and a managing member of Blum GP II
(collectively, the "Reporting Persons"). This amendment relates to shares of
Common Stock, $.01 par value (the "Common Stock") of ITT Educational
Services, Inc., a Delaware corporation (the "Issuer"). The principal
executive office and mailing address of the Issuer is 13000 North Meridian
Street, Carmel, Indiana 46032-1404. The following amendments to the Schedule
13D are hereby made. Unless otherwise defined herein, all capitalized terms
shall have the meanings ascribed to them in the Schedule 13D.
Item 2. Identity and Background
--------------------------------
Item 2 of the Schedule 13D is hereby amended as follows:
Since the filing of Amendment No. 1 to Schedule 13D, there have been changes
to the members of Blum GP II.
The principal business office address of Blum GP II is 909 Montgomery Street,
Suite 400, San Francisco, CA 94133. The names of the managing members and
members of Blum GP II, their addresses, citizenship and principal occupations
are as follows:
Name and Business Citizen- Principal Occupation
Office Held Address ship or Employment
-------------------- ----------------------- --------- -------------------
Richard C. Blum 909 Montgomery St. USA President & Chairman,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
Nils Colin Lind 909 Montgomery St. Norway Managing Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
John C. Walker 909 Montgomery St. USA Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
Jose S. Medeiros 909 Montgomery St. Brazil Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
CUSIP NO. 4506B109 SCHEDULE 13D Page 7 of 10
Name and Business Citizen- Principal Occupation
Office Held Address ship or Employment
-------------------- ----------------------- --------- -------------------
John H. Park 909 Montgomery St. USA Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
Gregory L. Jackson 909 Montgomery St. USA Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
Jeffrey A. Cozad 909 Montgomery St. USA Partner,
Managing Member Suite 400 Blum L.P.
San Francisco, CA 94133
Marc T. Scholvinck 909 Montgomery St. USA Partner & Chief
Managing Member Suite 400 Financial Officer,
San Francisco, CA 94133 Blum L.P.
Gregory D. Hitchan 909 Montgomery St. USA General Counsel
Member and General Suite 400 & Secretary,
Counsel San Francisco, CA 94133 Blum L.P.
To the best knowledge of the Reporting Persons, none of the entities or
persons identified in this Item 2 has, during the past five years, been
convicted of any criminal proceeding (excluding traffic violations or similar
misdemeanors), nor been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
Item 5. Interest in Securities of the Issuer
---------------------------------------------
(a),(b) According to the Issuer's most recent Form 10-Q, there were
45,715,429 shares of Common Stock issued and outstanding as of March 31,
2004. Based on such information, after taking into account the transactions
described in Item 5(c) below, the Reporting Persons report beneficial
ownership of the following shares of Common Stock: (i) 1,890,500 shares of
Common Stock held by Blum L.P. and RCBA Inc. on behalf of the limited
partnerships for which Blum L.P. serves as the general partner, or on behalf
of an entity for which Blum L.P. serves as investment advisor, which
represents 4.1% of the outstanding shares of the Common Stock; (ii) 2,115,900
shares of the Common Stock held by Blum GP II on behalf of the limited
partnership for which it serves as the general partner and on behalf of the
limited partnership for which it serves as the managing limited partner,
which represents 4.6% of the outstanding shares of the Common Stock; and
(iii) 53,800 shares of the Common Stock that are legally owned by The Nuclear
Decommissioning Trust of Dominion Nuclear Connecticut, Inc. ("Dominion
CUSIP NO. 4506B109 SCHEDULE 13D Page 8 of 10
Connecticut") and 53,800 shares of the Common Stock that are legally owned by
Virginia Electric and Power Company Qualified Nuclear Decommissioning Trust
("Virginia Electric")(collectively, the "Investment Advisory Clients"), with
respect to which Blum L.P. has voting and investment power. Each Investment
Advisory Client has entered into an investment management agreement with Blum
L.P., but neither Investment Advisory Client has any contract, arrangement or
understanding with the other Investment Advisory Client, or any other
Reporting Person, with respect to the acquisition, ownership, disposition or
voting of any shares of the Common Stock. Each Investment Advisory Client
disclaims membership in a group with any Reporting Person or with the other
Investment Advisory Client, and each disclaims beneficial ownership of any
shares beneficially owned by the Reporting Persons other than for their own
account.
Voting and investment power concerning the above shares are held solely by
Blum L.P. and Blum GP II. The Reporting Persons therefore may be deemed to
be members in a group, in which case the group would be deemed to have
beneficial ownership of an aggregate of 4,114,000 shares of the Common Stock,
which is 9.0% of the outstanding Common Stock. As the sole general partner of
Blum L.P., RCBA Inc. is deemed the beneficial owner of the securities over
which Blum L.P. has voting and investment power. As Chairman, director and a
substantial shareholder of RCBA Inc., Richard C. Blum might be deemed to be
the beneficial owner of the securities beneficially owned by RCBA Inc.
Additionally, Mr. Blum may be deemed to be the beneficial owner of the
securities over which Blum GP II has voting and investment power. Although
Mr. Blum is joining in this Schedule as a Reporting Person, the filing of
this Schedule shall not be construed as an admission that he, or any of the
other shareholders, directors or executive officers of RCBA Inc., managing
members and members of Blum GP II, is, for any purpose, the beneficial owner
of any of the securities that are beneficially owned by RCBA Inc. or Blum GP
II.
c) Since the most recent filing of Schedule 13D, the Reporting Persons
purchased the following shares of Common Stock in the open market:
Entity Trade Date Shares Price/Share
------ ---------- ------ ------------
Investment partnerships for 05-17-04 46,200 39.0092
which Blum L.P. serves as the 05-18-04 73,000 38.8101
general partner and on behalf 05-20-04 200,000 38.3462
of an entity for which Blum L.P. 05-21-04 18,500 37.9575
serves as investment advisor. 06-21-04 5,000 39.6846
Entity Trade Date Shares Price/Share
------ ---------- ------- ----------
The limited partnerships for 05-21-04 31,500 37.9575
which Blum GP II serves as the 06-03-04 25,000 40.6258
general partner and the managing 06-21-04 95,000 39.6846
limited partner. 06-22-04 16,600 39.9735
06-23-04 300,000 37.5726
06-24-04 50,000 35.2499
CUSIP NO. 4506B109 SCHEDULE 13D Page 9 of 10
Entity Trade Date Shares Price/Share
------ ---------- ------ ------------
The Investment Advisory 05-17-04 3,800 39.0092
Clients for which Blum L.P. 05-18-04 7,000 38.8101
serves as investment advisor.
(d) and (e) Not applicable.
Item 7. Material to be Filed as Exhibits
-----------------------------------------
Exhibit A Joint Filing Undertaking.
CUSIP NO. 4506B109 SCHEDULE 13D Page 10 of 10
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: July 1, 2004
RICHARD C. BLUM & ASSOCIATES, INC. BLUM CAPITAL PARTNERS, L.P.
By: Richard C. Blum & Associates, Inc.
its general partner
By: /s/ Gregory D. Hitchan By: /s/ Gregory D. Hitchan
------------------------------- -----------------------------------
Gregory D. Hitchan Gregory D. Hitchan
General Counsel and Secretary General Counsel and Secretary
BLUM STRATEGIC GP II, L.L.C. RICHARD C. BLUM
By: /s/ Gregory D. Hitchan By: /s/ Gregory D. Hitchan
------------------------------- ------------------------------------
Gregory D. Hitchan Gregory D. Hitchan, Attorney-in-Fact
Member and General Counsel
CUSIP NO. 4506B109 SCHEDULE 13D Page 1 of 1
Exhibit A
JOINT FILING UNDERTAKING
The undersigned, being duly authorized thereunto, hereby execute this
agreement as an exhibit to this Schedule 13D to evidence the agreement of the
below-named parties, in accordance with the rules promulgated pursuant to the
Securities Exchange Act of 1934, to file this Schedule jointly on behalf of
each such party.
Dated: July 1, 2004
RICHARD C. BLUM & ASSOCIATES, INC. BLUM CAPITAL PARTNERS, L.P.
By: Richard C. Blum & Associates, Inc.
its general partner
By: /s/ Gregory D. Hitchan By: /s/ Gregory D. Hitchan
------------------------------- ---------------------------------
Gregory D. Hitchan Gregory D. Hitchan
General Counsel and Secretary General Counsel and Secretary
BLUM STRATEGIC GP II, L.L.C. RICHARD C. BLUM
By: /s/ Gregory D. Hitchan By: /s/ Gregory D. Hitchan
------------------------------- -------------------------------------
Gregory D. Hitchan Gregory D. Hitchan, Attorney-in-Fact
Member and General Counsel