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Apollo Group Profits Up

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Apollo Group reported fiscal 2005 financial results for the second quarter ended February 28, 2005.

Net income attributed to Apollo Education Group common stock for the three months ended February 28, 2005, was $87.1 million, or $.47 per diluted share, compared to $63.0 million, or $.35 per diluted share reported for the same period last year.

Net income attributed to Apollo Education Group common stock for the six months ended February 28, 2005, was $196.6 million, or $1.04 per diluted share, compared to $141.4 million, or $.79 per diluted share reported for the same period last year.

Todd S. Nelson, Chairman and CEO, said, “We are pleased with our financial performance and overall enrollment growth this quarter. While we continue to invest in lead generation, the rate of increase in selling and promotional expenses declined from 48% in the first quarter of fiscal 2005 to 38% in the second quarter of fiscal 2005. During the quarter, we experienced a positive migration from our onground campuses of students with limited previous college experience to our online program designed for these students. Results to date indicate that retention of students in this academic program, which includes more faculty contact hours, is positive. We plan to implement this program at our onground University of Phoenix campuses during the fourth quarter of fiscal 2005. We believe that this migration of students to our online program is why our online enrollment is slightly ahead of our expectations and our onground enrollment is slightly below our expectations. The second quarter proved to be a strong quarter for campus openings. The University of Phoenix entered into a new state with a campus in Des Moines, Iowa and opened three new campuses in existing states; Richmond, VA; Raleigh, NC; and Austin, TX.”

Mr. Nelson continued, “The board of directors authorized a program allocating an additional $250 million in company funds to repurchase shares of Apollo Education Group Class A common stock.”

Total consolidated revenues for Apollo Group, Inc. for the three months ended February 28, 2005, rose 27.4% to $505.7 million, compared with $396.9 million in the second quarter of fiscal 2004. The University of Phoenix accounted for 90.8% of the $467.6 million in net tuition revenues from students enrolled in degree programs for the quarter ended February 28, 2005.

Total consolidated revenues for Apollo Group, Inc. for the six months ended February 28, 2005, rose 28.7% to $1.041 billion, compared with $808.7 million in the same period last year. The University of Phoenix accounted for 92.5% of the $961.1 million in net tuition revenues from students enrolled in degree programs for the six months ended February 28, 2005.

Consolidated net income for Apollo Group, Inc. for the three months ended February 28, 2005, increased 27.2% to $87.1 million, compared to $68.5 million for the same period last year.

Consolidated net income for Apollo Group, Inc. for the six months ended February 28, 2005, increased 28.7% to $196.6 million, compared to $152.8 million for the same period last year.

Consolidated degree enrollments for all of the Apollo Group, Inc. institutions at February 28, 2005, increased by 25% to 283,800 students compared to 227,800 students at February 29, 2004. Online degree enrollments at February 28, 2005, increased by 45% to 143,900 students compared to 99,500 students at February 29, 2004. Enrollments at onground campuses at February 28, 2005, increased by 9% to 140,000 students compared to 128,400 students at February 29, 2004.

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Apollo Group Profits Up
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