8-K

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): December 18, 2003

APOLLO GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Arizona	0-25232	86-0419443
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4615 East Elwood Street, Phoenix, Arizona	85040
(Address of Principal Executive Offices)	(Zip Code)

(480) 966-5394

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
	Item 9. Regulation FD Disclosure. (Information furnished pursuant to Item 12. Results of Operations and Financial Condition)
SIGNATURES
EXHIBIT INDEX
EX-99.1

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

   (c) Exhibits.

     99.1 Press Release dated December 18, 2003

Item 9. Regulation FD Disclosure. (Information furnished pursuant to Item 12. Results of Operations and Financial Condition)

     On December 18, 2003, Apollo Group, Inc. reported via press release its results of operations for its first quarter ended November 30, 2003. A copy of this press release is attached hereto as Exhibit 99.1. This press release is being furnished, but not filed, under Item 12 of this Report on Form 8-K.

SIGNATURES

     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 thereunto duly authorized.

Date: December 18, 2003	APOLLO GROUP, INC.
	By:	/s/ Kenda B. Gonzales
	Kenda B. Gonzales Chief Financial Officer, Secretary, and Treasurer
	By:	/s/ Daniel E. Bachus
	Daniel E. Bachus Chief Accounting Officer and Controller
	By:	/s/ Todd S. Nelson
	Todd S. Nelson President and Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated December 18, 2003

EX-99.1 3 p68582exv99w1.htm EX-99.1

EXHIBIT 99.1

Apollo Group, Inc.
4615 E. Elwood St.
Phoenix, AZ 85040
(800) 990-APOL
(480) 379-3503 fax
Internet:
www.apollogrp.edu
www.phoenix.edu
www.uopxonline.com
www.ipd.org
www.fp.edu
www.wintu.edu Company Contact:
Kenda B. Gonzales
Chief Financial Officer
(800) 990-APOL
Email:
kenda.gonzales@apollogrp.edu

Investor Relations Contact:
Janess Pasinski
Apollo Group, Inc.
(800) 990-APOL, option 7
Email:
janess.pasinski@apollogrp.edu

Press Contact:
Ayla Dickey
Apollo Group, Inc
(480) 557-2952
Email:
ayla.dickey@apollogrp.edu

News Release

APOLLO GROUP, INC. REPORTS FISCAL 2004
FIRST QUARTER RESULTS

     Phoenix, Arizona, December 18, 2003 — Apollo Group, Inc. today reported fiscal 2004 financial results for Apollo Education Group (Nasdaq:APOL) and University of Phoenix Online (Nasdaq:UOPX) for the first quarter ended November 30, 2003.

     Net income attributed to Apollo Education Group for the three months ended November 30, 2003 was $78.4 million, or $.44 per diluted share, compared to $53.8 million, or $.30 per diluted share, reported for the same period last year. Net income attributed to University of Phoenix Online for the three months ended November 30, 2003, was $5.9 million, or $.34 per diluted share, compared to $2.9 million or $.18 per diluted share, reported for the same period last year.

     Todd S. Nelson, President and CEO, said, “We are very pleased with the strong financial performance this quarter. We are also extremely pleased to see continued strong growth in enrollments, both online and on-ground. We continue to be encouraged by the strength of our on-ground and online leads. During the first quarter of fiscal 2004 the University of Phoenix entered the state of Arkansas, with a campus in Little Rock. In addition, we opened new campuses in Columbus, Ohio and Spokane, Washington.”

     Total consolidated revenues for Apollo Group, Inc. for the three months ended November 30, 2003 rose 33.3% to $411.8 million, compared with $308.9 million in the first quarter of fiscal 2003. The University of Phoenix accounted for 95.0% of the $387.6 million in net tuition revenues from students enrolled in degree programs for the three months ended November 30, 2003. Total revenues for University of Phoenix Online for the three months ended November 30, 2003 rose 61.3% to $177.8 million, compared with $110.2 million in the first quarter of fiscal 2003.

     Consolidated net income for Apollo Group, Inc. for the three months ended November 30, 2003 increased 48.7% to $84.3 million, compared to $56.7 million for the same period last year. Net income for University of Phoenix Online for the three months ended November 30, 2003 increased 87.5% to $41.2 million, compared to $22.0 million for the same period last year.

     Net cash provided by operating activities for Apollo Group, Inc. for the three months ended November 30, 2003 was $134.2 million, compared to $77.9 million for the three months ended November 30, 2002. Net additions to property and equipment for Apollo Group, Inc. for the three months ended November 30, 2003 were $26.0 million, compared to $14.1 million for the three months ended November 30, 2002.

~continued~

     Consolidated degree enrollments for all of the Apollo Group, Inc. institutions at November 30, 2003 increased by 28% to 211,300 students compared to 164,700 students at November 30, 2002. Degree enrollments at The University of Phoenix (excluding University of Phoenix Online) were 95,200 students at November 30, 2003 compared to 84,300 students at November 30, 2002 representing a 13% increase. Degree enrollments for University of Phoenix Online at November 30, 2003 increased by 60% to 91,000 students compared to 57,000 students at November 30, 2002.

Business Outlook

     Apollo Group, Inc.

• We expect revenue for the quarter ending February 29, 2004 to be between $379 million and $382 million and to be between $1.750 billion and $1.753 billion for fiscal 2004.

• Operating margin is expected to be between 25.0% and 25.5% for the quarter ending February 29, 2004 and to be between 30.0% and 30.5% for fiscal 2004.

     University of Phoenix Online

• We expect revenue for the quarter ending February 29, 2004 to be between $174 million and $175 million and to be between $806 million and $807 million for fiscal 2004.

• Operating margin is expected to be between 31.5% and 32.0% for the quarter ending February 29, 2004 and to be between 35.0% and 35.5% for fiscal 2004.

For the quarter ending February 29, 2004, diluted earnings per share attributed to Apollo Education Group are expected to be $.31 and diluted earnings per share attributed to University of Phoenix Online are expected to be $.28. We are increasing our fiscal 2004 guidance related to expected diluted earnings per share attributed to Apollo Education Group from $1.64 to $1.71. Expected diluted earnings per share guidance attributed to University of Phoenix Online is increasing from $1.30 to $1.40 for fiscal 2004.

Based on lead flow, we expect degree enrollments at The University of Phoenix (excluding University of Phoenix Online) to continue to grow between 12% and 14% over the prior year at the end of the second quarter of fiscal 2004. We expect University of Phoenix Online degree enrollments to continue to grow 50% over the prior year at the end of the second quarter of fiscal 2004.

     The company will hold a conference call to discuss these earnings results at 11:00 AM Eastern time, 9:00 AM Phoenix time, on Thursday, December 18, 2003. The call may be accessed by dialing (877) 292-6888 (domestic) or (706) 634-1393 (internationally). The conference ID number is 4312985. A live webcast of this event may be accessed by visiting the company web site at: http://www.apollogrp.edu/Company_News. A replay of the call will be available on our website or at (706) 645-9291 (conf. ID #4312985) until December 31, 2003.

     Apollo Group, Inc. has been providing higher education programs to working adults for over 25 years. Apollo Group, Inc., operates through its subsidiaries The University of Phoenix, Inc., Institute for Professional Development, The College for Financial Planning Institutes Corporation, and Western International University, Inc. The consolidated enrollment in its educational programs makes it the largest private institution of higher education in the United States. It offers educational programs and services at 74 campuses and 122 learning centers in 38 states, Puerto Rico and Vancouver, British Columbia. Combined degree enrollment was 211,300 students as of November 30, 2003.

     For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990-APOL or visit Apollo on the World Wide Web at http://www.apollogrp.edu.

~continued~

     This press release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Apollo Group, Inc. claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Specific forward-looking statements contained in this press release relate, among other matters, to the business outlook of Apollo Group, Inc. and University of Phoenix Online.

     Forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Apollo Group, Inc. and University of Phoenix Online to be materially different from those expressed or implied by such forward-looking statements. Factors that could affect Apollo Group, Inc.’s or University of Phoenix Online’s results and cause them to materially differ from those contained in the forward-looking statements include:

• the failure to maintain or renew required regulatory approvals, accreditation or state authorizations;

• the failure to obtain authorizations from states in which University of Phoenix does not currently provide degree programs;

• the failure to obtain the Higher Learning Commission’s approval for University of Phoenix to operate in new states;

• any adverse changes in student enrollment;

• risk factors and cautionary statements made in Apollo Group, Inc.’s Annual Report on Form 10-K for the period ended August 31, 2003; and

• other factors that Apollo Group is currently unable to identify or quantify, but may arise or become known in the future.

     These forward-looking statements are based on estimates, projections, beliefs, and assumptions of Apollo Group, Inc. and its management and speak only as of the date made and are not guarantees of future performance. Apollo Group, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. You are advised, however, to consult any further disclosures Apollo Group, Inc. makes in its reports filed with the Securities and Exchange Commission.

-Table to Follow-

APOLLO GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL AND OPERATING DATA
(Dollars in thousands, except per share amounts)

		For the Three Months Ended
		November 30,
		2003		2002
Revenues:
	Tuition and other, net	$	411,809	$	308,897
Costs and expenses:
	Instructional costs and services		174,887		142,103
	Selling and promotional		81,639		60,326
	General and administrative		20,608		16,147
			277,134		218,576
Income from operations			134,675		90,321
Interest income, net			4,157		3,534
Income before income taxes			138,832		93,855
Provision for income taxes			54,561		37,166
Net income		$	84,271	$	56,689
Net income attributed to:
Apollo Education Group common stock		$	78,355	$	53,770
University of Phoenix Online common stock		$	5,916	$	2,919
Earnings per share attributed to:
Apollo Education Group Common Stock:
Diluted net income per share		$	0.44	$	0.30
Diluted weighted average shares outstanding			178,726		176,884
University of Phoenix Online Common Stock:
Diluted net income per share		$	0.34	$	0.18
Diluted weighted average shares outstanding			17,186		15,985

	At November 30,
	2003		2002
OPERATING DATA
Students enrolled in degree programs		211,300		164,700
Number of locations:
Campuses		74		64
Learning Centers		122		116
		196		180

APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)

		November 30,			August 31,
		2003			2003
		(Unaudited)
Assets:
Current assets
	Cash and cash equivalents	$	449,644		$	416,452
	Restricted cash		157,231			147,616
	Marketable securities		287,068			235,962
	Receivables, net		129,355			123,728
	Deferred tax assets, net		9,842			9,098
	Income taxes receivable					842
	Other current assets		18,604			16,545
Total current assets			1,051,744			950,243
Property and equipment, net			134,054			119,057
Marketable securities			291,190			245,772
Cost in excess of fair value of assets purchased, net			37,096			37,096
Deferred tax assets, net			2,466			1,155
Other assets			25,661			24,881
Total assets		$	1,542,211		$	1,378,204
Liabilities and Shareholders’ Equity:
Current liabilities
	Current portion of long-term liabilities	$	3,231		$	3,231
	Accounts payable		22,775			29,314
	Accrued liabilities		46,556			49,525
	Income taxes payable		35,026
	Student deposits and current portion of deferred tuition revenue		265,921			253,153
Total current liabilities			373,509			335,223
Deferred tuition revenue, less current portion			775			942
Long-term liabilities, less current portion			15,514			15,114
Total liabilities			389,798			351,279
Commitments and contingencies
Shareholders’ equity
Preferred stock, no par value, 1,000,000 shares authorized; none issued
Apollo Education Group Class A nonvoting common stock, no par value, 400,000,000 shares authorized; 175,907,000 and 175,286,000 issued and outstanding at November 30, 2003 and August 31, 2003, respectively			103			103
Apollo Education Group Class B voting common stock, no par value, 3,000,000 shares authorized; 477,000 issued and outstanding at November 30, 2003 and August 31, 2003			1			1
University of Phoenix Online nonvoting common stock, no par value, 400,000,000 shares authorized; 16,064,000 and 15,659,000 issued and outstanding at November 30, 2003 and August 31, 2003, respectively
Additional paid-in capital			322,575			293,650
Apollo Education Group Class A treasury stock, at cost, 1,482,000 and 2,103,000 shares at November 30, 2003 and August 31, 2003, respectively			(19,096	)		(27,100	)
University of Phoenix Online treasury stock, at cost, 86,000 shares at August 31, 2003						(4,601	)
Retained earnings			849,467			765,196
Accumulated other comprehensive income (loss)			(637	)		(324	)
Total shareholders’ equity			1,152,413			1,026,925
Total liabilities and shareholders’ equity		$	1,542,211		$	1,378,204

~continued~

APOLLO GROUP, INC. AND SUBSIDIARIES
DEGREE ENROLLMENTS

		November 30,
		2003		2002
University of Phoenix:
	Campuses established prior to November 1998		167,185		129,110
	Campuses established after November 1998		18,984		12,136
Total University of Phoenix			186,169		141,246
Institute for Professional Development			22,256		21,078
Western International University			2,072		1,777
College for Financial Planning			768		598
Total Degree Enrollment			211,265		164,699

~continued~

UNIVERSITY OF PHOENIX ONLINE
SELECTED FINANCIAL DATA
(In thousands)

		For the Three Months Ended
		November 30,
		2003		2002
Revenues:
	Tuition and other, net	$	177,754	$	110,191
Costs and expenses:
	Instructional costs and services		65,731		42,951
	Selling and promotional		36,487		26,225
	General and administrative		8,472		5,507
			110,690		74,683
Income from operations			67,064		35,508
Interest income, net			1,429		1,022
Income before income taxes			68,493		36,530
Provision for income taxes			27,260		14,539
Net income		$	41,233	$	21,991

     This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements.

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EX-99.1

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