8-K

UNITED STATES 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): February 6, 2007

APOLLO GROUP, INC.

(Exact name of registrant as specified in charter)

Arizona	0-25232	86-0419443
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation)	File Number)	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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1

EX-99.2

Item 2.02. Results of Operations and Financial Condition.

On February 7, 2007, Apollo Group, Inc. reported via press release its unaudited first quarter financial results ended November 30, 2006. A copy of this press release is attached hereto as Exhibit 99.1.

The financial information included in this press release for the current and prior periods presented are unaudited and subject to change. The financial information does not include any adjustments for non-cash equity based compensation charges required by the recently completed stock option investigation by the special committee of the Company’s Board of Directors and further excludes any potential adjustments related to finalizing our bad debt reserves, any accruals that may be necessary as a result of our current discussions with the Department of Education concerning Title IV lender refund reimbursements, finalizing our annual goodwill impairment review as of August 31, 2006, any other accounting policy changes or refinements that might be required as a result of the on-going due diligence being completed by the Company’s new Chief Financial Officer and Chief Accounting Officer, and finally any tax effects of the items mentioned above, including tax liability relating to any misapplied Internal Revenue Code Section 162(m) deductions for stock option grants. The impact of the above adjustments has not been quantified; however, these adjustments are expected to have a material adverse impact on the previously reported financial results. The Company is preparing a restatement of its financial statements and there can be no assurance that the potential matters discussed above would not also affect the unaudited financial statements and information contained herein.

The information furnished pursuant to this Item 2.02 and the exhibit hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On February 6, 2007, the Company announced via press release the appointment of Brian L. Swartz as the Company’s Vice President, Corporate Controller and Chief Accounting Officer.

Mr. Swartz, 34, was with EaglePicher Incorporated from 2002 to 2006, most recently as its Vice-President and Corporate Controller. At EaglePicher, Mr. Swartz was an integral member of their senior management team and successfully guided the company through a bankruptcy restructuring. From 1994 to 2002, Mr. Swartz was at Arthur Andersen LLP where he had primary responsibilities in international audit and due diligence projects. Mr. Swartz has a strong background in SEC and external financial reporting (including SOX 404 compliance) and technical accounting issues. He graduated magna cum laude from the University of Arizona with a Bachelor of Science degree in Accounting and was a member of the Warren Berger Entrepreneurship Program. Mr. Swartz is a Certified Public Accountant.

A copy of the press release issued by the Company announcing the foregoing is attached as Exhibit 99.2.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(d) Exhibits.

The following exhibits are furnished herewith:

99.1	Press Release dated February 7, 2007
99.2	Press Release dated February 6, 2007

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 hereunto duly authorized.

February 7, 2007	Apollo Group, Inc.
	(Registrant)
	By:	/s/ Joseph L. D’Amico
	Name: Joseph L. D’Amico
	Title: Chief Financial Officer
February 7, 2007	Apollo Group, Inc.
	(Registrant)
	By:	/s/ Brian L. Swartz
	Name: Brian L. Swartz
	Title: Vice President, Corporate Controller and Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated February 7, 2007
99.2	Press Release dated February 6, 2007

EX-99.1

Exhibit 99.1

	Apollo Group, Inc.
	News Release

APOLLO GROUP, INC. REPORTS FISCAL 2007
FIRST QUARTER UNAUDITED FINANCIAL RESULTS

     Phoenix, Arizona, February 7, 2007 — Apollo Group, Inc. (Nasdaq:APOL) (“Apollo Group”) today reported unaudited fiscal 2007 financial results for the first quarter ended November 30, 2006.

     Limitation of Financial Information Included Herein

     The financial information included in this press release for the current and prior periods presented are unaudited and subject to change. The financial information does not include any adjustments for non-cash equity based compensation charges required by the recently completed stock option investigation by the special committee of the Company’s Board of Directors and further excludes any potential adjustments related to finalizing our bad debt reserves, any accruals that may be necessary as a result of our current discussions with the Department of Education concerning Title IV lender refund reimbursements, finalizing our annual goodwill impairment review as of August 31, 2006, any other accounting policy changes or refinements that might be required as a result of the on-going due diligence being completed by the Company’s new Chief Financial Officer and Chief Accounting Officer, and finally any tax effects of the items mentioned above, including tax liability relating to any misapplied Internal Revenue Code Section 162(m) deductions for stock option grants. The impact of the above adjustments has not been quantified; however, these adjustments are expected to have a material adverse impact on the previously reported financial results. The Company is preparing a restatement of its financial statements and there can be no assurance that the potential matters discussed above would not also affect the unaudited financial statements and information contained herein.

     Results of Operations

     Net income attributed to Apollo Group common stock for the three months ended November 30, 2006, was $115.6 million, or $0.66 per diluted share on 174.5 million weighted average shares outstanding, compared to $130.8 million, or $0.73 per diluted share on 180.3 million weighted average shares outstanding for the same period last year.

     Total consolidated revenues for Apollo Group for the first quarter of fiscal year 2007 were $668.2 million, a 6.3% increase over the first quarter 2006, and total student growth was 8.6% versus a year ago. The University of Phoenix, Inc. (“UOP”) accounted for 91.2% of the $619.8 million in net tuition revenues from students enrolled in degree programs for the quarter ended November 30, 2006.

     Instructional costs and services increased by $35.3 million in the three months ended November 30, 2006, from the three months ended November 30, 2005 primarily resulting from increases in employee-related expenses due to the higher enrollment numbers and increases in bad debt expense.

     Selling and promotional expenses increased by $26.9 million in the three months ended November 30, 2006, from the three months ended November 30, 2005 primarily resulting from increases in the number of enrollment counselors and a significant increase in advertising expenditures.

     General and administrative expenses increased by $4.2 million in the three months ended November 30, 2006, from the three months ended November 30, 2005 primarily due to higher professional fees associated

with our stock option investigation and increased employee compensation costs for information technology (IT) projects.

     Commenting on the quarter, Brian Mueller, President, said, “We are pleased with our first quarter as we’ve made meaningful progress in our operating results as compared to the fiscal fourth quarter of 2006. When I took over as President in January of 2006, we laid out a clear turnaround plan and we have been executing well against that plan. The first quarter was further validation that our strategy is working and we are making operational improvements. We have a strong and stable management team that has never worked better as a unit and a lot of hard-working students and staff who are very committed to our goals. Apollo Group and UOP have received many awards historically for innovative practices in higher education, and over the last year we began making the necessary strategic investments to build on this innovation. We’re confident that this will result in sustainable growth over the long term.”

     Enrollment

     Consistent with the data released in connection with the fourth quarter of 2006, the following table presents Degree Enrollment information for UOP and Axia College:

	November 30,				August 31,
	2006		2005 (1)		2006 (1)
Associates		83,000		49,000		74,000
Bachelors		140,000		149,000		141,000
Masters		64,000		68,000		63,000
Doctoral		5,000		3,000		4,000
		292,000		269,000		282,000

⁽¹⁾ Adjusted to be consistent with calculations as of November 30, 2006.

     Degree Enrollments represent individual students enrolled in our degree programs that attended a course during the quarter and did not graduate as of the end of the quarter.

     Conference Call Information

     The company will hold a conference call to discuss these earnings results at 10:00 AM Eastern time, 8:00 AM Phoenix time, on Wednesday, February 7, 2007. The call may be accessed by dialing (877) 292-6888 (domestic) or (706) 634-1393 (international). The conference ID number is 8072490. A live webcast of this event may be accessed by visiting the company website at: www.apollogrp.edu. A replay of the call will be available on our website or at (706) 645-9291 (conf. ID # 8072490) until February 21, 2007.

     Forward-Looking Safe Harbor

     Statements in this press release regarding Apollo Group’s business outlook, future financial and operating results, and overall future prospects, as well as statements regarding Apollo Group’s pending restatement of historical financial statements, the anticipated amount of additional expenses and related matters, are forward-looking statements, and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors. For a discussion of the various factors that may cause actual results to differ materially from those projected, please refer to the risk factors and other disclosures contained in Apollo Group’s previously filed Form 10-K, Forms 10-Q, and other filings with the Securities and Exchange Commission.

     Apollo Group, Inc. has been providing higher education programs to working adults for more than 30 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 100 campuses and 162 learning centers in 39 states, Puerto Rico, Washington DC, Alberta, British Columbia, Netherlands, and Mexico.

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

-Tables to Follow-

APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the Three Months Ended
	November 30,
(In thousands, except per share amounts)	2006		2005
Revenues:
Tuition and other, net	$	668,249	$	628,884
Costs and expenses:
Instructional costs and services		296,966		261,618
Selling and promotional		155,037		128,119
General and administrative		32,541		28,347
		484,544		418,084
Income from operations		183,705		210,800
Interest income and other, net		6,466		4,502
Income before income taxes		190,171		215,302
Provision for income taxes		74,530		84,528
Net income	$	115,641	$	130,774
Earnings per share attributed to Apollo Group common stock:
Basic income per share	$	0.67	$	0.73
Diluted income per share	$	0.66	$	0.73
Basic weighted average shares outstanding		173,119		178,104
Diluted weighted average shares outstanding		174,455		180,331

See “Limitation of Financial Information Included Herein” in the second paragraph of this press release

APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	November 30,			August 31,
(Dollars in thousands)	2006			2006 (1)
Assets:
Current assets
Cash and cash equivalents	$	426,159		$	309,058
Restricted cash		252,361			238,267
Marketable securities		37,946			45,978
Receivables, net		186,550			163,910
Income taxes receivable		—			3,105
Deferred tax assets, net		17,708			15,095
Other current assets		21,718			18,611
		942,442			794,024
Property and equipment, net		338,601			327,364
Marketable securities		48,652			53,692
Cost in excess of fair value of assets purchased, net		51,234			37,096
Deferred tax assets, net		38,313			32,441
Other assets (includes receivable from related party of $15,996 and $15,758 at November 30, 2006 and August 31, 2006, respectively)		30,914			30,202
	$	1,450,156		$	1,274,819
Liabilities and Shareholders’ Equity:
Current liabilities
Current portion of long-term liabilities	$	21,710		$	22,449
Accounts payable		38,625			61,290
Accrued liabilities		85,840			69,813
Income taxes payable		60,729			—
Student deposits and current portion of deferred revenue		389,742			389,950
		596,646			543,502
Deferred tuition revenue, less current portion		327			384
Long-term liabilities, less current portion		76,952			80,106
Total liabilities		673,925			623,992
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; 188,004,000 issued at November 30, 2006 and August 31, 2006, and 172,702,000 and 172,555,000 outstanding at November 30, 2006 and August 31, 2006, respectively		103			103
Apollo Education Group Class B voting common stock, no par value, 3,000,000 shares authorized; 475,000 issued and outstanding at November 30, 2006 and August 31, 2006		1			1
Additional paid-in capital		—			—
Apollo Education Group Class A treasury stock, at cost, 15,449,000 and 15,302,000 shares at November 30, 2006 and August 31, 2006, respectively		(1,044,010	)		(1,054,046	)
Retained earnings		1,821,573			1,706,426
Accumulated other comprehensive loss		(1,436	)		(1,657	)
		776,231			650,827
Total liabilities and shareholders’ equity	$	1,450,156		$	1,274,819

⁽¹⁾ Adjusted from the December 14, 2006 press release to reflect (a) an increase of $34M in the bad debt reserves, and (b) to conform certain reclassifications to the November 30, 2006 presentation.

See “Limitation of Financial Information Included Herein” in the second paragraph of this press release

APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Three Months Ended
	November 30,
(In thousands)	2006			2005
Cash flows provided by operating activities:
Net income	$	115,641		$	130,774
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense		4,944			5,813
Depreciation and amortization		16,997			16,647
Amortization of investment premiums		57			403
Provision for uncollectible accounts		25,115			20,093
Deferred income taxes		(8,485	)		(6,379	)
Excess tax benefits from stock-based compensation		—			(7,874	)
Cash received for tenant improvements		10			1,546
Non-cash early occupancy expense		—			85
Changes in certain assets and liabilities:
Receivables		(47,754	)		(19,546	)
Other assets		(3,604	)		1,716
Accounts payable and accrued liabilities		(11,681	)		4,089
Income taxes		64,082			79,888
Student deposits and deferred revenue		(265	)		(12,994	)
Other liabilities		(836	)		1,350
Net cash provided by operating activities		154,221			215,611
Cash flows provided by (used for) investing activities:
Purchase of marketable securities		(212,900	)		(187,120	)
Maturities of marketable securities		225,915			279,075
Purchase of restricted securities		(143,375	)		(341,691	)
Maturities of restricted securities		145,346			342,081
Other change in restricted securities		(16,065	)		—
Net additions to property and equipment		(25,190	)		(20,837	)
Purchase of other assets		(342	)		(939	)
Purchase of Insight Schools, net of cash acquired		(15,079	)		—
Net cash provided by (used for) investing activities		(41,690	)		70,569
Cash flows provided by (used for) financing activities:
Purchase of Apollo Education Group Class A common stock		—			(285,915	)
Issuance of Apollo Eduation Group Class A common stock		4,349			11,705
Excess tax benefits from stock-based compensation		—			7,874
Net cash provided by (used for) financing activities		4,349			(266,336	)
Currency translation gain (loss)		221			(121	)
Net increase in cash and cash equivalents		117,101			19,723
Cash and cash equivalents at beginning of period		309,058			145,607
Cash and cash equivalents at end of period	$	426,159		$	165,330
Supplemental disclosure of non-cash investing activities
Tenant improvement allowances	$	458		$	4,610
Purchases of property and equipment included in accounts payable	$	4,608		$	7,458

See “Limitation of Financial Information Included Herein” in the second paragraph of this press release

APOLLO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTAL OPERATING EXPENSE DETAIL
(Unaudited)

     Instructional Costs and Services Detail

						Percent of Revenues
	For the Three Months Ended					For the Three Months Ended
	November 30,					November 30,
(In millions)	2006		2005			2006			2005
Employee compensation and related expenses	$	106.5	$	89.2	(1)		15.9	%		14.2	%
Stock-based compensation		2.9		2.8			0.4	%		0.4	%
Faculty compensation		57.5		53.3			8.6	%		8.5	%
Classroom lease expenses and depreciation		49.8		46.9			7.5	%		7.5	%
Financial aid processing costs		14.7		12.8			2.2	%		2.0	%
Bad debt expense		25.1		20.1			3.8	%		3.2	%
Other instructional costs and services		40.5		36.5	(1)		6.1	%		5.8	%
Instructional costs and services	$	297.0	$	261.6			44.5	%		41.6	%

⁽¹⁾ A portion of the prior period employee compensation expense was reclassed to other instructional costs and services for consistency and comparability between periods.

Selling and Promotion Expense Detail

					Percent of Revenues
	For the Three Months Ended				For the Three Months Ended
	November 30,				November 30,
(In millions)	2006		2005		2006			2005
Enrollment advisors’ compensation and related expenses	$	75.7	$	56.8		11.3	%		9.0	%
Stock-based compensation		0.7		0.5		0.1	%		0.1	%
Advertising		65.3		56.5		9.8	%		9.0	%
Other selling and promotional expenses		13.3		14.3		2.0	%		2.3	%
Selling and promotional expenses	$	155.0	$	128.1		23.2	%		20.4	%

General and Administrative Expense Detail

					Percent of Revenues
	For the Three Months Ended				For the Three Months Ended
	November 30,				November 30,
(In millions)	2006		2005		2006			2005
Employee compensation and related expenses	$	12.8	$	11.3		1.9	%		1.8	%
Stock-based compensation		1.4		2.5		0.2	%		0.4	%
Legal, audit, and corporate insurance		4.4		2.4		0.7	%		0.4	%
Administrative space and depreciation		6.4		5.5		1.0	%		0.9	%
Other general and administrative expenses		7.5		6.6		1.1	%		1.0	%
General and administrative expenses	$	32.5	$	28.3		4.9	%		4.5	%

See “Limitation of Financial Information Included Herein” in the second paragraph of this press release

Investor Relations Contact: Janess Pasinski ~ Apollo Group, Inc. ~ (480) 557-1719 ~ janess@apollogrp.edu

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

EX-99.2

Exhibit 99.2

Apollo Group, Inc.
News Release

APOLLO GROUP, INC. APPOINTS BRIAN L. SWARTZ AS VICE PRESIDENT, CORPORATE
CONTROLLER AND CHIEF ACCOUNTING OFFICER

     Phoenix, Arizona, February 6, 2007 — Apollo Group, Inc. (Nasdaq:APOL) (“Apollo Group”) announced today that it has appointed effective today Brian L. Swartz as Vice President, Corporate Controller and Chief Accounting Officer.

     “We are pleased to welcome Brian to the Apollo team,” said Brian Mueller, President of Apollo Group. “Brian brings a wealth of finance, accounting and strategic planning experience which will prove invaluable as we continue on our turnaround plan. Brian has already made significant contributions working with Joe D’Amico, our Chief Financial Officer, as we are working through our stock option investigation restatement.”

     Mr. Swartz, 34, was with EaglePicher Incorporated from 2002 to 2006, most recently as its Vice-President and Corporate Controller. At EaglePicher, Mr. Swartz was an integral member of their senior management team and successfully guided the company through a bankruptcy restructuring. From 1994 to 2002, Mr. Swartz was at Arthur Andersen LLP where he had primary responsibilities in international audit and due diligence projects. Mr. Swartz has a strong background in SEC and external financial reporting (including SOX 404 compliance) and technical accounting issues. He graduated magna cum laude from the University of Arizona with a Bachelor of Science degree in Accounting and was a member of the Warren Berger Entrepreneurship Program. Mr. Swartz is a Certified Public Accountant.

     Apollo Group, Inc. has been providing higher education programs to working adults for more than 30 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 100 campuses and 162 learning centers in 39 states, Puerto Rico, Washington DC, Alberta, British Columbia, Netherlands, and Mexico.

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

Investor Relations Contact:
Janess Pasinski ~Apollo Group, Inc. ~ (480) 557-1719 ~ janess.pasinski@apollogrp.edu
Press Contact:
Ayla Dickey ~ Apollo Group, Inc. ~ (480) 557-2952 ~ ayla.dickey@apollogrp.edu