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Apollo Group, Inc.
News Release

APOLLO GROUP, INC. REPORTS FISCAL 2007 FOURTH QUARTER AND YEAR-END
FINANCIAL RESULTS

	•		Fourth quarter revenue increases 14.2% year-over-year

	•		Fourth quarter degreed enrollments increase 11.1% year-over-year

	•		Board of directors authorizes additional share repurchases of up to $500 million

Phoenix, Arizona, October 22, 2007 — Apollo Group, Inc. (Nasdaq: APOL) (“Apollo Group” or the “Company”) today reported fiscal 2007 unaudited financial results for the fourth quarter and fiscal year ended August 31, 2007.

Unaudited Fourth Quarter Fiscal 2007 Results of Operations

Net income for the three months ended August 31, 2007 was $103.2 million, or $0.60 per diluted share (171.3 million weighted average shares outstanding), compared to $75.7 million, or $0.43 per diluted share (174.5 million weighted average shares outstanding) for three months ended August 31, 2006. Before giving effect to share-based compensation expense and special items of $19.7 million in the fourth quarter of 2007 and $31.5 million in the fourth quarter of 2006, earnings per diluted share were $0.67 in the fourth quarter of 2007, as compared to $0.54 in the fourth quarter 2006. (See the reconciliation of Generally Accepted Accounting Principles (“GAAP”) financial information to non-GAAP financial information in the tables section of this press release.) During the 2007 fourth fiscal quarter, the Company repurchased approximately 7 million shares of its common stock at a weighted average purchase price of approximately $61 for a total expenditure of $438 million. The repurchases are part of the $500 million authorization for the Company’s stock repurchase program approved by the Apollo Group board of directors in June 2007. On October 5, 2007, the Board of Directors authorized an increase of the share repurchase program to an aggregate of $500 million in share repurchases.

Consolidated revenues for the three months ended August 31, 2007, totaled $713.9 million, which represents a 14.2% increase over the fourth quarter of fiscal 2006. Total degreed enrollments grew by 11.1% year-over-year to 313,700.

Commenting on fiscal 2007, Brian Mueller, president of Apollo Group, Inc., said, “This was a rewarding year for Apollo Group and its stakeholders. We began seeing the benefits of the significant investments we made over the last couple of years and are very pleased with the progress we made both in our operations as well as from a corporate perspective. During the fiscal year we strengthened our management team, particularly in the finance and legal areas, and added additional talent and expertise to our board of directors. We also fortified our financial controls and corporate governance, and as a result, Apollo Group is a stronger company today.”

Mr. Mueller continued, “We are pleased with our fourth quarter results as we again achieved double-digit revenue and enrollment growth, while continuing to produce significant cash flow and earnings growth. We have made productivity gains in our enrollment counselor effectiveness, advertising, student persistence, academic excellence and program expansion. As a result, we ended the fiscal year with approximately 313,700 students enrolled in our degree programs. During the fourth quarter alone we started a record 69,800 students.”

Mueller added, “We enter fiscal 2008 with positive momentum and will continue to execute against our strategic plan to best position Apollo Group for long-term sustainable growth.”

Instructional costs and services in the three months ended August 31, 2007, increased by $27.0 million to $327.2 million, a 9.0% increase, from $300.2 million in the three months ended August 31, 2006, primarily resulting from increases in employee-related expenses due to the higher enrollment numbers as well as an increase in bad debt expense. As a percentage of revenue instructional costs and services declined to 45.8% versus 48.0% a year ago.

Selling and promotional expenses increased by $19.5 million to $173.8 million, a 12.6% increase in the three months ended August 31, 2007, from the three months ended August 31, 2006. During the fourth quarter, the Company experienced a slight decrease in its cost per New Degreed Enrollment (or Starts) which is calculated by dividing total selling and promotional expenses by the amount of new Starts for the quarter. This slight decrease is attributed to improved conversion rates and a lower advertising expense per Start, which was partially offset by higher enrollment counselor costs per Start.

General and administrative (“G&A”) expenses increased by $28.1 million to $62.3 million, an 82.2% increase, in the three months ended August 31, 2007, from the three months ended August 31, 2006. As a percentage of revenues, G&A was 8.7% as compared to 5.5% in the prior year quarter. Before giving effect to special items primarily related to the stock option investigation and restatement costs of $6.4 million in 2007 and $1.6 million in 2006, G&A expenses were $55.9 million in the three months ended August 31, 2007, or 7.8% of revenues, compared to $32.6 million in the three months ended August 31, 2006, or 5.2% of revenues. The remaining increase is primarily attributable to higher share-based compensation expense and increased employee headcount to support the Company’s future growth.

Financial and Operating Metrics (unaudited)

Apollo Group reported the following unaudited financial data and operating metrics on a quarterly basis for the last eight quarters.

Included in the table below is a correction of Apollo Group’s historical New Degreed Enrollments to adjust for errors and inconsistencies in the calculation with our previously reported definition, which has not changed. To reiterate and clarify, New Degreed Enrollments include any student who graduated from one degree program and started a new degree program (for example, a graduate of the Associates Degree program returns for a Bachelors Degree or a graduate of a Bachelors Degree program returns for a Masters Degree), as well as students who have been out of attendance for greater than 12 months and return to a program. Degreed Enrollments were not affected by this correction since a student completing one program and entering a new program is only counted as one enrollment (in the new program) and returning students out of attendance for greater than 12 months were already included in degreed enrollments.


	Q1 2006			Q2 2006			Q3 2006			Q4 2006
Revenues (in thousands)
Degree Seeking Gross Revenues ⁽¹⁾	$	620,373		$	559,824		$	634,288		$	613,329
Less: Discounts		(29,409	)		(25,854	)		(22,201	)		(27,917	)

Degree Seeking Net Revenues ⁽¹⁾		590,964			533,970			612,087			585,412
Single Course/ Continuing Ed Revenues ⁽¹⁾		3,684			3,993			6,826			7,660
Other ⁽²⁾		34,025			32,587			34,484			31,841

	$	628,673		$	570,550		$	653,397		$	624,913


Revenue by Degree Type (in thousands) ⁽¹⁾
Associates	$	73,226		$	84,498		$	99,050		$	108,694
Bachelors		366,926			315,330			357,111			336,720
Masters		171,720			151,312			167,675			156,312
Doctoral		8,501			8,684			10,452			11,603
Less: Discounts		(29,409	)		(25,854	)		(22,201	)		(27,917	)

	$	590,964		$	533,970		$	612,087		$	585,412


Degreed Enrollment ^{(1) (3)}
Associates		49,000			54,900			63,600			74,000
Bachelors		149,200			145,500			145,200			140,700
Masters		68,000			66,700			64,500			63,400
Doctoral		3,200			3,700			3,900			4,200

		269,400			270,800			277,200			282,300


Degree Seeking Gross Revenues per Degreed Enrollment
Associates	$	1,494		$	1,539		$	1,557		$	1,469
Bachelors		2,459			2,167			2,459			2,393
Masters		2,525			2,269			2,600			2,465
Doctoral		2,657			2,347			2,680			2,763
All degrees (after discounts)		2,194			1,972			2,208			2,074

New Degreed Enrollments ^{(1) (4)}
Associates		18,100			18,900			21,300			24,300
Bachelors		20,300			20,900			22,200			23,200
Masters		11,000			10,700			10,900			12,300
Doctoral		500			700			600			700

		49,900			51,200			55,000			60,500


⁽¹⁾		Represents information for UPX and Axia College only.

⁽²⁾		Represents revenues from IPD, CFP, WIU (excluding Axia college which is included in ⁽¹⁾), Insight Schools and other.

⁽³⁾		Represents individual students enrolled in the Company’s degree seeking programs that attended a course during the quarter and did not graduate as of the end of the quarter (includes Axia students enrolled in WIU or UPX) (rounded to hundreds). Degreed Enrollments include any student who graduated from one degree program and started a new degree program (for example, a graduate of the Associates Degree program returns for a Bachelors Degree or a graduate of a Bachelors Degree program returns for a Masters Degree), as well as students who have been out of attendance for greater than 12 months and return to a program.

⁽⁴⁾		Represents individual students enrolled in the Company’s degree seeking programs that attended a course at least once during the quarter but did not attend a course in the last 12 months (includes Axia students enrolled in WIU or UPX) (rounded to hundreds). New Degreed Enrollments include any student who graduated from one degree program and started a new degree program (for example, a graduate of the Associates Degree program returns for a Bachelors Degree or a graduate of a Bachelors Degree program returns for a Masters Degree), as well as students who have been out of attendance for greater than 12 months and return to a program.


	Q1 2007			Q2 2007			Q3 2007			Q4 2007
Revenues (in thousands)
Degree Seeking Gross Revenues ⁽¹⁾	$	655,018		$	602,256		$	717,142		$	706,069
Less: Discounts		(25,108	)		(28,325	)		(24,693	)		(34,322	)

Degree Seeking Net Revenues ⁽¹⁾		629,910			573,931			692,449			671,747
Single Course/ Continuing Ed Revenues ⁽¹⁾		5,010			5,352			6,680			8,004
Other ⁽²⁾		32,866			29,410			34,263			34,171

	$	667,786		$	608,693		$	733,392		$	713,922


Revenue by Degree Type (in thousands) ⁽¹⁾
Associates	$	124,527		$	130,016		$	164,807		$	185,604
Bachelors		347,086			311,301			367,331			345,889
Masters		171,524			149,139			171,715			160,737
Doctoral		11,881			11,800			13,289			13,839
Less: Discounts		(25,108	)		(28,325	)		(24,693	)		(34,322	)

	$	629,910		$	573,931		$	692,449		$	671,747


Degreed Enrollment ^{(1) (3)}
Associates		83,000			88,300			98,600			104,500
Bachelors		139,900			139,300			141,400			138,700
Masters		64,400			66,100			66,200			65,300
Doctoral		4,500			4,700			4,900			5,200

		291,800			298,400			311,100			313,700


Degree Seeking Gross Revenues per Degreed Enrollment
Associates	$	1,500		$	1,472		$	1,671		$	1,776
Bachelors		2,481			2,235			2,598			2,494
Masters		2,663			2,256			2,594			2,462
Doctoral		2,640			2,511			2,712			2,661
All degrees (after discounts)		2,159			1,923			2,226			2,141

New Degreed Enrollments ^{(1) (4)}
Associates		27,400			26,300			31,000			31,300
Bachelors		22,600			22,700			21,800			23,800
Masters		11,800			11,500			11,600			13,900
Doctoral		700			700			600			800

		62,500			61,200			65,000			69,800


⁽¹⁾		Represents information for UPX and Axia College only.

⁽²⁾		Represents revenues from IPD, CFP, WIU (excluding Axia college which is included in ⁽¹⁾), Insight Schools and other.

⁽³⁾		Represents individual students enrolled in the Company’s degree seeking programs that attended a course during the quarter and did not graduate as of the end of the quarter (includes Axia students enrolled in WIU or UPX) (rounded to hundreds). Degreed Enrollments include any student who graduated from one degree program and started a new degree program (for example, a graduate of the Associates Degree program returns for a Bachelors Degree or a graduate of a Bachelors Degree program returns for a Masters Degree), as well as students who have been out of attendance for g reater than 12 months and return to a program.

⁽⁴⁾		Represents individual students enrolled in the Company’s degree seeking programs that attended a course at least once during the quarter but did not attend a course in the last 12 months (includes Axia students enrolled in WIU or UPX) (rounded to hundreds). New Degreed Enroll ments include any student who graduated from one degree program and started a new degree program (for example, a graduate of the Associates Degree program returns for a Bachelors Degree or a graduate of a Bachelors Degree program returns for a Masters Degree), as well as students who have been out of attendance for greater than 12 months and return to a program.

Unaudited Fiscal 2007 Results of Operations

Net income for the twelve months ended August 31, 2007 was $408.8 million, or $2.35 per diluted share, (173.6 million weighted average shares outstanding), compared to $414.8 million, or $2.35 per diluted share, (176.2 million weighted average shares outstanding) for the twelve months ended August 31, 2006. Before giving effect to share-based compensation expense and special items of $75.7 million in fiscal 2007 and $75.5 million in fiscal 2006, earnings per diluted share were $2.62 in fiscal 2007, as compared to $2.61 in fiscal 2006. (See the reconciliation of Generally Accepted Accounting Principles (“GAAP”) financial

information to non-GAAP financial information in the tables section of this press release.)

Consolidated revenues for Apollo Group for the twelve months ended August 31, 2007 were $2.7 billion, a 9.9% increase over the twelve months of fiscal 2006. Average quarterly degree enrollments grew by 10.5%.

Instructional costs and services as a percentage of tuition and other net revenues increased in 2007 versus 2006 due primarily to an increase in bad debt expense and higher employee compensation and related expenses. Bad debt expense increased as a result of higher days sales outstanding (“DSOs”), longer receivable collection periods, and higher write-offs primarily from the Company’s associate’s degree program students. Employee compensation and related expenses increased primarily to support the 10.5% increase in average quarterly Degreed Enrollments.

Selling and promotional expenses increased as a percentage of revenue in 2007 versus 2006 due primarily to an increase in the number of enrollment counselors to support leads for the Company’s Internet advertising campaign. During 2007, the Company experienced a slight increase in its cost per New Degreed Enrollment (or Starts) which is calculated by dividing total selling and promotional expenses by the amount of new Starts for the year. The hiring of an additional 600 enrollment counselors in the fourth quarter of 2006 increased the Company’s enrollment counselor compensation and related expenses. The productivity of these counselors improved during 2007, and as a result, the Company has experienced increased conversion rates. Also, in 2007 selling and promotional expenses increased as a result of the Company’s continued investment in Internet-based advertising campaigns and the launch of a nationally televised branding campaign.

General and administrative expenses increased by 31.7% in 2007 versus 2006. Excluding special items, primarily related to the stock option investigation and restatement costs, general and administrative expense was $167.7 million and $125.4 million in 2007 and 2006, or 6.2% and 5.1% of revenue, respectively. The remaining increase in 2007 compared to 2006 is primarily related to higher employee headcount to support the Company’s growth and higher share-based compensation expense.

Unaudited Balance Sheet

As of August 31, 2007, the Company’s cash and marketable securities, excluding restricted cash, was $392.7 million as compared to $408.7 million as of August 31, 2006. DSOs increased from 31 days at August 31, 2006 to 38 days as of August 31, 2007. Deferred tuition revenue increased 22.7% to $167.3 million between August 31, 2007 and 2006.

Conference Call Information

The Company will hold a conference call to discuss these earnings results at 5:00 PM Eastern, 2:00 PM Phoenix time, today, Monday, October 22, 2007. The call may be accessed by dialing (877) 292-6888 (domestic) or (706) 634-1393 (international). The conference ID number is 19824133. A live webcast of this event may be accessed by visiting the Company’s website at: www.apollogrp.edu . A replay of the call will be available on the website or at (706) 645-9291 (conf. ID # 19824133 until October 31, 2007).

About Apollo Group, Inc.

Apollo Group, Inc. has been an education provider for more than 30 years, operating the University of Phoenix, the Institute for Professional Development, the College for Financial Planning, Western International University and Insight Schools. The Company offers innovative and distinctive educational programs and services at high school, college and graduate levels at 259 locations in 40 states and the District of Columbia; Puerto Rico; Alberta and British Columbia, Canada; Mexico and The Netherlands; as well as online throughout the world.

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.

Forward-Looking Safe Harbor

Statements in this press release regarding Apollo Group’s business outlook, future financial and operating results, Degreed Enrollments and New Degreed Enrollments, and overall future prospects 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 most recently filed Form 10-K, Forms 10-Q, and other filings with the Securities and Exchange Commission.

-Tables to Follow-

Apollo Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Income


	Three Months
	Ended August 31,				Year Ended August 31,
	2007		2006		2007		2006
($ in thousands, except per share amounts)	(unaudited)				(unaudited)
Revenues:
Tuition and other, net	$	713,922	$	624,913	$	2,723,793	$	2,477,533

Costs and expenses:
Instructional costs and services		327,247		300,235		1,237,491		1,109,584
Selling and promotional		173,783		154,293		659,059		544,706
General and administrative		62,348		34,188		201,546		153,004
Goodwill impairment		—		20,205		—		20,205

Total costs and expenses		563,378		508,921		2,098,096		1,827,499

Income from operations		150,544		115,992		625,697		650,034
Interest income and other, net		9,660		5,633		31,600		18,054

Income before income taxes		160,204		121,625		657,297		668,088
Provision for income taxes		57,044		45,914		248,487		253,255

Net income	$	103,160	$	75,711	$	408,810	$	414,833


Earnings per share:

Basic income per share	$	0.61	$	0.44	$	2.37	$	2.38

Diluted income per share	$	0.60	$	0.43	$	2.35	$	2.35

Basic weighted average shares outstanding		169,770		172,981		172,309		174,351

Diluted weighted average shares outstanding		171,347		174,514		173,603		176,205

Apollo Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)


	As of
	August 31,			August 31,
($ in thousands)	2007			2006
Assets:
Current assets
Cash and cash equivalents	$	339,319		$	309,058
Restricted cash		296,469			238,267
Marketable securities, current portion		31,278			45,978
Accounts receivable, net		190,912			160,583
Deferred tax assets, net, current portion		50,885			32,622
Other current assets		16,515			16,424

Total current assets		925,378			802,932
Property and equipment, net		364,207			328,440
Marketable securities, less current portion		22,084			53,692
Goodwill		29,633			16,891
Deferred tax assets, net, less current portion		80,077			53,131
Other assets		28,484			27,919

Total assets	$	1,449,863		$	1,283,005


Liabilities and Shareholders’ Equity:
Current liabilities
Accounts payable	$	80,729		$	61,289
Accrued liabilities		103,651			73,513
Current portion of long-term liabilities		21,093			23,101
Income taxes payable		43,351			47,812
Student deposits		328,008			254,130
Current portion of deferred revenue		167,003			135,911

Total current liabilities		743,835			595,756
Deferred revenue, less current portion		295			384
Long-term liabilities, less current portion		71,893			82,492

Total liabilities		816,023			678,632


Commitments and contingencies

Shareholders’ equity
Preferred stock, no par value		—			—
Apollo Group Class A nonvoting common stock, no par value		103			103
Apollo Group Class B voting common stock, no par value		1			1
Additional paid-in capital		—			—
Apollo Group Class A treasury stock, at cost		(1,461,368	)		(1,054,046	)
Retained earnings		2,096,385			1,659,349
Accumulated other comprehensive loss		(1,281	)		(1,034	)

Total shareholders’ equity		633,840			604,373

Total liabilities and shareholders’ equity	$	1,449,863		$	1,283,005

Apollo Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(Unaudited )


	Year Ended August 31,
($ in thousands)	2007			2006

Cash flows provided by (used in) operating activities:
Net income	$	408,810		$	414,833
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		54,027			27,735
Share-based compensation — conversion of UPX Online stock options		—			—
Tax benefits from stock options exercised		—			—
Excess tax benefits from share-based compensation		(2,095	)		(17,476	)
Depreciation and amortization		71,115			67,290
Amortization of marketable securities discount and premium, net		268			929
Provision for uncollectible accounts receivable		120,614			101,038
Goodwill impairment		—			20,205
Deferred income taxes		(46,040	)		(19,705	)
Changes in assets and liabilities, excluding the impact of acquisitions:
Accounts receivable		(150,943	)		(89,019	)
Other assets		(1,912	)		5,609
Accounts payable and accrued liabilities		31,174			20,424
Income taxes payable		(2,440	)		(1,579	)
Student deposits		73,878			11,455
Deferred revenue		31,003			1,947
Other liabilities		3,090			7,322

Net cash provided by operating activities		590,549			551,008

Cash flows provided by (used in) investing activities:
Additions to property and equipment		(61,185	)		(44,629	)
Purchase of land and buildings related to new headquarters		(43,366	)		(66,611	)
Purchase of Insight Schools, net of cash acquired		(15,079	)		—
Purchase of marketable securities including auction-rate securities		(1,575,635	)		(1,420,055	)
Maturities of marketable securities including auction-rate securities		1,621,636			1,636,283
(Increase) decrease in restricted cash		(58,163	)		(6,530	)
Purchase of other assets		(143	)		(2,881	)

Net cash provided by (used in) investing activities		(131,935	)		95,577

Cash flows provided by (used in) financing activities:
Repurchase of Apollo Group Class A common stock		(437,735	)		(514,931	)
Issuance of Apollo Group Class A common stock		7,738			28,971
Cash paid for cancellation of vested options		—			(6,331	)
Excess tax benefits from share-based compensation		2,095			17,476

Net cash used in financing activities		(427,902	)		(474,815	)

Currency translation gain (loss)		(451	)		104

Net increase (decrease) in cash and cash equivalents		30,261			171,874
Cash and cash equivalents, beginning of year		309,058			137,184

Cash and cash equivalents, end of year	$	339,319		$	309,058

Supplemental disclosure of cash flow information
Cash paid during the year for income taxes	$	293,089		$	273,915
Supplemental disclosure of non-cash investing activities
Credits received for tenant improvements	$	5,378		$	11,709
Purchases of property and equipment included in accounts payable	$	6,169		$	12,934
Settlement of liability-classified awards through the issuance of treasury stock	$	7,011		$	—
Fair value adjustments for liability-classified awards	$	6,963		$	—

Apollo Group, Inc. and Subsidiaries
Detailed Expense Tables
(Unaudited)

Instructional costs and services


						% of Revenues
	Three Months					Three Months
	Ended August 31,					Ended August 31,						% Change
($ in millions)	2007		2006			2007			2006			2007 vs. 2006
Employee compensation and related expenses	$	109.2	$	102.4	⁽¹⁾		15.3	%		16.4	%		6.6	%
Faculty compensation		63.1		55.0			8.8	%		8.8	%		14.7	%
Classroom lease expenses and depreciation		52.4		51.6	⁽¹⁾		7.3	%		8.3	%		1.6	%
Other instructional costs and services		46.9		45.2	⁽¹⁾		6.6	%		7.1	%		3.8	%
Bad debt expense		37.3		28.8	⁽¹⁾		5.2	%		4.6	%		29.5	%
Financial aid processing costs		17.9		13.5			2.5	%		2.2	%		32.6	%
Share-based compensation		0.4		3.7			0.1	%		0.6	%		-89.2	%

Instructional costs and services	$	327.2	$	300.2			45.8	%		48.0	%		9.0	%

Selling and promotional expenses


					% of Revenues
	Three Months				Three Months
	Ended August 31,				Ended August 31,						% Change
($ in millions)	2007		2006		2007			2006			2007 vs. 2006
Enrollment advisors’ compensation and related expenses	$	85.2	$	71.2		11.9	%		11.4	%		19.7	%
Advertising		73.5		68.8		10.3	%		11.0	%		6.8	%
Other selling and promotional expenses		15.0		13.3		2.1	%		2.1	%		12.8	%
Share-based compensation		0.1		1.0		0.0	%		0.2	%		-90.0	%

Selling and promotional expenses	$	173.8	$	154.3		24.3	%		24.7	%		12.6	%

General and administrative expenses


						% of Revenues
	Three Months					Three Months
	Ended August 31,					Ended August 31,						% Change
($ in millions)	2007		2006			2007			2006			2007 vs. 2006
Employee compensation and related expenses	$	21.6	$	13.1	⁽¹⁾		3.0	%		2.1	%		64.9	%
Share-based compensation		12.7		4.9			1.8	%		0.8	%		159.2	%
Legal, audit, and corporate insurance		6.4		3.3			0.9	%		0.5	%		93.9	%
Administrative space and depreciation		5.5		5.8	⁽¹⁾		0.8	%		0.9	%		-5.2	%
Other general and administrative expenses		16.1		7.1			2.2	%		1.2	%		126.8	%

General and administrative expenses	$	62.3	$	34.2			8.7	%		5.5	%		82.2	%

The following special items are included in general and administrative expenses:


	Three Months
	Ended August 31,
	2007		2006		Line item included in above
Stock option investigation/ financial statement restatement	$	2.1	$	1.6	Other general and administrative expenses
Fair value adjustment for former employee stock options		4.3		—	Other general and administrative expenses

Subtotal	$	6.4	$	1.6


⁽¹⁾		Prior year amounts have been reclassified to conform with 2007 presentation.

Apollo Group, Inc. and Subsidiaries
Detailed Expense Tables
(Unaudited)

Instructional costs and services


						% of Revenues
	Year					Year
	Ended August 31,					Ended August 31,						% Change
($ in millions)	2007		2006			2007			2006			2007 vs. 2006
Employee compensation and related expenses	$	424.4	$	378.3	⁽¹⁾		15.6	%		15.3	%		12.2	%
Faculty compensation		236.9		212.3			8.7	%		8.6	%		11.6	%
Classroom lease expenses and depreciation		205.2		194.3	⁽¹⁾		7.5	%		7.8	%		5.6	%
Other instructional costs and services		173.3		158.8	⁽¹⁾		6.4	%		6.4	%		9.1	%
Bad debt expense		120.6		101.0	⁽¹⁾		4.4	%		4.1	%		19.4	%
Financial aid processing costs		63.8		52.5			2.3	%		2.1	%		21.5	%
Share-based compensation		13.3		12.4			0.5	%		0.5	%		7.3	%

Instructional costs and services	$	1,237.5	$	1,109.6			45.4	%		44.8	%		11.5	%

Selling and promotional expenses


					% of Revenues
	Year				Year
	Ended August 31,				Ended August 31,						% Change
($ in millions)	2007		2006		2007			2006			2007 vs. 2006
Enrollment advisors’ compensation and related expenses	$	320.3	$	254.3		11.8	%		10.3	%		26.0	%
Advertising		277.7		231.6		10.2	%		9.3	%		19.9	%
Other selling and promotional expenses		58.0		56.5		2.1	%		2.3	%		2.7	%
Share-based compensation		3.1		2.3		0.1	%		0.1	%		34.8	%

Selling and promotional expenses	$	659.1	$	544.7		24.2	%		22.0	%		21.0	%

General and administrative expenses


						% of Revenues
	Year					Year
	Ended August 31,					Ended August 31,						% Change
($ in millions)	2007		2006			2007			2006			2007 vs. 2006
Employee compensation and related expenses	$	71.9	$	77.7	⁽¹⁾		2.6	%		3.1	%		-7.5	%
Share-based compensation		37.6		13.0			1.4	%		0.5	%		189.2	%
Legal, audit, and corporate insurance		15.5		13.3			0.6	%		0.5	%		16.5	%
Administrative space and depreciation		21.1		21.8	⁽¹⁾		0.8	%		0.9	%		-3.2	%
Other general and administrative expenses		55.4		27.2			2.0	%		1.2	%		103.7	%

General and administrative expenses	$	201.5	$	153.0			7.4	%		6.2	%		31.7	%

The following special items are included in general and administrative expenses:


	Year
	Ended August 31,
	2007		2006		Line item included in above
Former CEO severance	$	—	$	26.0	Employee compensation and related expenses
Stock option investigation/ financial statement restatement		14.7		1.6	Other general and administrative expenses
Stock option modifications		12.1		—	Share-based compensation
Fair value adjustment for former employee stock options		7.0		—	Other general and administrative expenses

Subtotal	$	33.8	$	27.6


⁽¹⁾		Prior year amounts have been reclassified to conform with 2007 presentation.

Reconciliation of GAAP financial information to non-GAAP financial information (Unaudited)


	Three Months
	Ended August 31,						Year Ended August 31,
(in millions, except per share amounts)	2007			2006			2007			2006
Net income as reported	$	103.2		$	75.7		$	408.8		$	414.8


Reconciling items:
Share-based compensation		13.3			9.7			54.0			27.7
Special items		6.4	⁽¹⁾		21.8	⁽²⁾		21.7	⁽³⁾		47.8	⁽⁴⁾

		19.7			31.5			75.7			75.5
Less: tax effects		(7.7	)		(12.5	)		(29.7	)		(29.9	)

		12.0			19.0			46.0			45.6


Net income adjusted to exclude share-based compensation expense and special items	$	115.2		$	94.7		$	454.8		$	460.4


Diluted weighted average shares outstanding		171.3			174.5			173.6			176.2


Diluted income per share adjusted to exclude share-based compensation expense and special items	$	0.67		$	0.54		$	2.62		$	2.61


⁽¹⁾		The $6.4 million charge for the three months ended August 31, 2007, represents costs related to the stock option investigation and restatement ($2.1 million), as well as a non-cash fair value adjustment for stock options modified for former employees ($4.3 million).

⁽²⁾		The $21.8 million charge for the three months ended August 31, 2006, represents costs related to the stock option investigation and restatement ($1.6 million) as well as a charge for goodwill impairment ($20.2 million).

⁽³⁾		The $21.7 million charge for the year ended August 31, 2007, represents costs related to the stock option investigation and restatement ($14.7 million) as well as a non-cash fair value adjustment for stock options modified for former employees ($7.0 million).

⁽⁴⁾		The $47.8 million charge for the year ended August 31, 2006, represents severance charged in connection with the resignation of the Company’s former CEO ($26.0 million), costs related to the stock option investigation and restatement ($1.6 million), and a charge for goodwill impairment ($20.2 million).

Investor Relations Contact: Allyson Pooley ~ ICR ~ 310-954-1100 ~ apooley@icrinc.com

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

Press Contact: Christie Lowey ~ CKPR ~ (602) 417-0672 ~ clowey@ckpr.biz