UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-25232
APOLLO GROUP, INC.
------------------
(Exact name of registrant as specified in its charter)
ARIZONA 86-0419443
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4615 EAST ELWOOD STREET, PHOENIX, ARIZONA 85040
(Address of principal executive offices, including zip code)
(480) 966-5394
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to
such filing requirements for the past 90 days.
[X] Yes [ ] No
SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK
AS OF JANUARY 5, 2000
Class A Common Stock, no par 75,321,573 Shares
Class B Common Stock, no par 511,484 Shares
1 <PAGE>
APOLLO GROUP, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
PAGE
PART I -- FINANCIAL INFORMATION ----
Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . .11
Item 3. Quantitative and Qualitative Disclosures about
Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .15
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .16
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . .16
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . .16
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . .16
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . .16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . .16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
2 <PAGE>
PART I -- FINANCIAL INFORMATION
Item 1 -- Financial Statements
<TABLE>
Apollo Group, Inc. and Subsidiaries
Consolidated Balance Sheet
(Dollars in thousands)
<CAPTION>
November 30, August 31,
1999 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Assets:
Current assets --
Cash and cash equivalents $ 46,445 $ 51,534
Restricted cash 26,653 25,798
Marketable securities 38,890 31,064
Receivables, net 77,476 75,664
Deferred tax assets, net 7,917 7,346
Other current assets 5,623 6,807
--------- ---------
Total current assets 203,004 198,213
Property and equipment, net 77,824 74,826
Marketable securities 7,429 8,507
Investment in joint venture 10,701 10,701
Cost in excess of fair value of assets purchased, net 39,575 39,917
Other assets 14,505 16,178
--------- ---------
Total assets $353,038 $348,342
========= =========
Liabilities and Shareholders' Equity:
Current liabilities --
Current portion of long-term liabilities $ 300 $ 300
Accounts payable 11,634 12,105
Accrued liabilities 19,222 14,340
Income taxes payable 9,504 535
Student deposits and current portion of deferred revenue 75,462 81,507
--------- ---------
Total current liabilities 116,122 108,787
--------- ---------
Deferred tuition revenue, less current portion 1,495 2,139
--------- ---------
Long-term liabilities, less current portion 4,579 4,222
--------- ---------
Deferred tax liabilities, net 3,206 2,074
--------- ---------
Commitments and contingencies -- --
--------- ---------
Shareholders' equity --
Preferred stock, no par value, 1,000,000 shares authorized, none issued -- --
Class A nonvoting common stock, no par value, 400,000,000 shares authorized;
75,809,873 and 77,112,000 issued and outstanding at November 30, 1999 and
August 31, 1999, respectively 103 102
Class B voting common stock, no par value, 3,000,000 shares authorized;
512,000 issued and outstanding at November 30, 1999 and August 31, 1999 1 1
Additional paid-in capital 98,266 99,190
Treasury stock, at cost, 2,901,000 and 1,876,000 shares at November 30, 1999
and August 31, 1999, respectively (65,569) (46,197)
Retained earnings 194,855 178,028
Accumulated other comprehensive loss (20) (4)
--------- ---------
Total shareholders' equity 227,636 231,120
--------- ---------
Total liabilities and shareholders' equity $353,038 $348,342
========= =========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
3 <PAGE>
<TABLE>
Apollo Group, Inc. and Subsidiaries
Consolidated Statement of Operations
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended
November 30,
------------------
1999 1998
-------- --------
(Unaudited)
<S> <C> <C>
Revenues:
Tuition and other, net $143,418 $115,698
-------- --------
Costs and expenses:
Instructional costs and services 82,979 67,668
Selling and promotional 21,759 17,932
General and administrative 12,051 9,125
-------- --------
116,789 94,725
-------- --------
Operating income 26,629 20,973
Interest income, net 1,317 1,312
-------- --------
Income before income taxes 27,946 22,285
Provision for income taxes 11,119 8,747
-------- --------
Net income $ 16,827 $ 13,538
======== ========
Basic net income per share $ .22 $ .17
======== ========
Diluted net income per share $ .22 $ .17
======== ========
Basic weighted average shares
outstanding 76,758 77,502
Diluted weighted average shares
outstanding 77,495 79,159
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
4 <PAGE>
APOLLO GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Comprehensive Income
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
November 30,
------------------
1999 1998
------- -------
(Unaudited)
<S> <C> <C>
Net income $16,827 $13,538
Other comprehensive income:
Currency translation gain (loss) (16) 1
------- -------
Comprehensive income $16,811 $13,539
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5<PAGE>
<TABLE>
Apollo Group, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
(In thousands)
<CAPTION>
Three Months Ended
November 30,
---------------------
1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Cash flows provided by (used for) operating
activities:
Net income $ 16,827 $ 13,538
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,330 4,398
Provision for uncollectible accounts 3,510 3,044
Deferred income taxes 561 549
Tax benefits of stock options exercised 1,050 1,335
Decrease (increase) in assets:
Restricted cash (855) (3,427)
Receivables, net (5,322) (10,864)
Other assets 2,728 1,318
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 13,380 3,624
Student deposits and deferred revenue (6,689) 3,395
Other liabilities 457 82
-------- --------
Net cash provided by operating activities 31,977 16,992
-------- --------
Cash flows provided by (used for) investing
activities:
Net additions to property and equipment (8,468) (12,297)
Purchase of marketable securities (10,749) (1,591)
Maturities of marketable securities 3,868 3,896
Purchase of other assets (256) (832)
-------- --------
Net cash used for investing activities (15,605) (10,824)
-------- --------
Cash flows provided by (used for) financing
activities:
Purchase of common stock (23,386) (8,418)
Payments on long-term debt (100) (200)
Issuance of common stock 2,041 1,962
-------- --------
Net cash used for financing activities (21,445) (6,656)
-------- --------
Currency translation gain (loss) (16) 1
-------- --------
Net decrease in cash and cash equivalents (5,089) (487)
Cash and cash equivalents at beginning of period 51,534 52,326
-------- --------
Cash and cash equivalents at end of period $ 46,445 $ 51,839
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
6 <PAGE>
Apollo Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. The interim consolidated financial statements include the accounts of
Apollo Group, Inc. ("Apollo" or the "Company") and its wholly-owned
subsidiaries, which include the University of Phoenix, Inc. ("UOP"), the
Institute for Professional Development ("IPD"), Western International
University, Inc. ("WIU"), the College for Financial Planning Institutes
Corporation (the "College"), and Apollo Learning Group ("ALG"). This
financial information reflects all adjustments, consisting only of normal
recurring adjustments, that are, in the opinion of management, necessary for
a fair statement of the results for the interim periods presented. Unless
otherwise noted, references to 2000 and 1999 refer to the periods ended
November 30, 1999 and 1998, respectively.
2. The interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto for
the fiscal year ended August 31, 1999 included in the Company's Form 10-K as
filed with the Securities and Exchange Commission. The interim financial
information for the three months ended November 30, 1999 and 1998 was
reviewed by PricewaterhouseCoopers LLP (see "Review by Independent
Accountants").
3. The results of operations for the three-month period ended November 30,
1999 are not necessarily indicative of the results to be expected for the
entire fiscal year or any future period.
4. The Company's operations are aggregated into a single reportable segment
based upon their similar economic and operating characteristics. The
Company's educational operations are conducted in similar markets and produce
similar economic results. These operations provide higher education programs
for working adults. The Company's operations are also subject to a similar
regulatory environment, which includes licensing and accreditation.
7 <PAGE>
5. A reconciliation of the basic and diluted per share computations is as
follows:
<TABLE>
<CAPTION>
For the Three Months Ended November 30,
(In thousands, except per share amounts)
(Unaudited)
----------------------------------------------------------
1999 1998
--------------------------- ----------------------------
Weighted Weighted
Avg. Per Share Avg. Per Share
Income Shares Amount Income Shares Amount
-------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Basic net income
per share $16,827 76,758 $ .22 $13,538 77,502 $ .17
===== =====
Effect of dilutive
securities:
Stock options 737 1,657
------- ------ ------- ------
Diluted net income
per share $16,827 77,495 $ .22 $13,538 79,159 $ .17
======= ====== ===== ======= ====== =====
</TABLE>
6. Certain amounts reported for the three months ended November 30, 1998,
have been reclassified to conform to the November 30, 1999 presentation,
having no effect on net income.
8<PAGE>
Review by Independent Accountants
The financial information as of November 30, 1999, and for the three-
month period then ended, included in Part I pursuant to Rule 10-01 of
Regulation S-X, has been reviewed by PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), the Company's independent accountants, in
accordance with standards established by the American Institute of Certified
Public Accountants. PricewaterhouseCoopers' report is included in this
quarterly report.
PricewaterhouseCoopers does not carry out any significant or additional
audit tests beyond those that would have been necessary if its report had not
been included in this quarterly report. Accordingly, such report is not a
"report" or "part of a registration statement" within the meaning of Sections
7 and 11 of the Securities Act of 1933 and the liability provisions of
Section 11 of such Act do not apply.
9<PAGE>
Report of Independent Accountants
To the Board of Directors and
Shareholders of Apollo Group, Inc.:
We have reviewed the accompanying consolidated balance sheet of Apollo Group,
Inc. and its subsidiaries as of November 30, 1999, and the related
consolidated statements of operations, of comprehensive income and of cash
flows for the three-month periods ended November 30, 1999 and 1998. These
financial statements are the responsibility of Apollo Group, Inc.'s
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated interim financial statements
for them to be in conformity with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing
standards, the consolidated balance sheet as of August 31, 1999, and the
related consolidated statements of operations, of comprehensive income, of
changes in shareholders' equity and of cash flows for the year then ended
(not presented herein), and in our report dated September 30, 1999 we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
balance sheet information as of August 31, 1999, is fairly stated in all
material respects in relation to the consolidated balance sheet from which it
has been derived.
/s/ PricewaterhouseCoopers LLP
Phoenix, Arizona
December 15, 1999
10<PAGE
PART I -- FINANCIAL INFORMATION
Item 2 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following information should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the consolidated financial statements and notes thereto for
the fiscal year ended August 31, 1999 included in the Company's Form 10-K as
filed with the Securities and Exchange Commission, as well as in conjunction
with the consolidated financial statements and notes thereto for the three-
month period ended November 30, 1999 included in Item 1.
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements
relating to future plans, expectations, events, or performances that involve
risks and uncertainties. The Company's actual results of operations could
differ materially from those anticipated in these forward-looking statements
as a result of certain factors. The following discussion should be read in
conjunction with the Company's Consolidated Financial Statements and notes
thereto.
RESULTS OF OPERATIONS
<TABLE>
The following table sets forth consolidated statement of operations data
of the Company expressed as a percentage of net revenues for the periods
indicated:
<CAPTION>
Three Months
Ended November 30,
-----------------
1999 1998
------ ------
(Unaudited)
<S> <C> <C>
Revenues:
Tuition and other, net 100.0% 100.0%
------ ------
Costs and expenses:
Instructional costs and services 57.8 58.5
Selling and promotional 15.2 15.5
General and administrative 8.4 7.9
------ ------
81.4 81.9
------ ------
Operating income 18.6 18.1
------ ------
Interest income, net 0.9 1.2
------ ------
Income before income taxes 19.5 19.3
Provision for income taxes 7.8 7.6
------ ------
Net income 11.7% 11.7%
====== ======
</TABLE>
11<PAGE>
THREE MONTHS ENDED NOVEMBER 30, 1999 (FIRST QUARTER OF 2000) COMPARED
WITH THREE MONTHS ENDED NOVEMBER 30, 1998 (FIRST QUARTER OF 1999)
Tuition and other net revenues increased by 24.0% to $143.4 million in
the three months ended November 30, 1999 from $115.7 million in the three
months ended November 30, 1998 due primarily to a 15.6% increase in average
degree student enrollments and tuition price increases averaging four to five
percent (depending on the geographic area and program) and a higher
concentration of enrollments at locations that charge a higher rate per
credit hour. Most of the Company's campuses, which include their respective
learning centers, had increases in tuition and other net revenues and average
degree student enrollments from the three months ended November 30, 1998 to
1999.
Tuition and other net revenues for the three months ended November 30,
1999 and 1998 consists primarily of $126.2 million and $102.7 million,
respectively, of net tuition revenues from students enrolled in degree
programs and $7.2 million and $5.7 million, respectively, of net tuition
revenues from students enrolled in non-degree programs. Average degree
student enrollments increased to 86,008 in the three months ended November
30, 1999 from 74,397 in the three months ended November 30, 1998.
Instructional costs and services increased by 22.6% to $83.0 million in
the three months ended November 30, 1999 from $67.7 million in the three
months ended November 30, 1998 due primarily to the direct costs necessary to
support the increase in degree student enrollments. Direct costs consist
primarily of faculty compensation, related staff salaries at each respective
location, classroom lease expenses, and financial aid processing costs.
These costs as a percentage of tuition and other net revenues decreased to
57.8% in the three months ended November 30, 1999 from 58.5% in the three
months ended November 30, 1998 due primarily to greater tuition and other net
revenues being spread over the fixed costs related to centralized student
services. As the Company expands into new markets, it may not be able to
leverage its existing instructional costs and services to the same extent.
Selling and promotional expenses increased by 21.3% to $21.8 million in
the three months ended November 30, 1999 from $17.9 million in the three
months ended November 30, 1998 due primarily to additional advertising and
marketing. These expenses as a percentage of tuition and other net revenues
decreased to 15.2% in the three months ended November 30, 1999 from 15.5% in
the three months ended November 30, 1998 due to greater tuition and other net
revenues and a proportionally lower increase in selling and promotional
expenses.
General and administrative expenses increased by 32.1% to $12.1 million
in the three months ended November 30, 1999 from $9.1 million in the three
months ended November 30, 1998 due primarily to increased employee expenses
related primarily to information services and depreciation related to the
implementation of information support systems. General and administrative
expenses as a percentage of tuition and other net revenues increased to 8.4%
in the three months ended November 30, 1999 from 7.9% in the three months
ended November 30, 1998 due primarily to increased employee expenses related
primarily to information services and depreciation related to the
implementation of information support systems.
Costs related to the start-up of new campuses and learning centers are
expensed as incurred. These start-up costs are primarily included in
instructional costs and services and selling and promotional expenses.
Start-up losses totaled approximately $2.5 million and $2.1 million in the
three months ended November 30, 1999 and 1998, respectively.
12<PAGE>
Net interest income was $1.3 million in the three months ended November
30, 1999 and 1998. Interest expense was less than $50,000 for the three
months ended November 30, 1999 and 1998.
The Company's effective tax rate increased to 39.8% in the three months
ended November 30, 1999 from 39.3% in the three months ended November 30,
1998. The increase is due primarily to the relative impact of tax-exempt
interest income and of expenses that are non-deductible for tax purposes.
Net income increased to $16.8 million in the three months ended November
30, 1999 from $13.5 million in the three months ended November 30, 1998 due
primarily to increased enrollments, increased tuition rates, and improved
utilization of instructional costs and services and selling and promotional
costs.
SEASONALITY IN RESULTS OF OPERATIONS
The Company experiences seasonality in its results of operations
primarily as a result of changes in the level of student enrollments. While
the Company enrolls students throughout the year, second quarter (December to
February) average enrollments and related revenues generally are lower than
other quarters due to seasonal breaks in December and January. Second quarter
costs and expenses historically increase as a percentage of tuition and other
net revenues as a result of certain fixed costs not significantly affected by
the seasonal second quarter declines in net revenues.
The Company typically experiences an increase in new enrollments in
August of each year when most other colleges and universities begin their
fall semesters. As a result, instructional costs and services and selling and
promotional expenses historically increase as a percentage of tuition and
other net revenues in the fourth quarter due to increased costs in
preparation for the August peak enrollments.
The Company anticipates that these seasonal trends in the second and
fourth quarters will continue in the future.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased to $32.0 million in
the three months ended November 30, 1999 from $17.0 million in the three
months ended November 30, 1998. The increase resulted primarily from
increased net income and increased non-cash charges for depreciation and
amortization and a larger increase in accounts payable and accrued
liabilities.
Capital expenditures decreased to $8.5 million in the three months ended
November 30, 1999 from $12.3 million in the three months ended November 30,
1998 primarily due to a decrease in expenditures related to software
development and leasehold improvements. Total purchases of property and
equipment for the year ended August 31, 2000 are expected to range from $38.0
to $42.0 million. These expenditures will primarily be related to new
campuses and learning centers, the continued expansion of computer labs
designed to support the Information Technology programs, and increases in
normal recurring capital expenditures due to the overall increase in student
and employee levels resulting from the growth in the business.
Start-up losses for new campuses and learning centers are expected to
range from $11.0 to $13.0 million in fiscal year 2000, as compared to $9.0
million in fiscal year 1999, due to recent and planned expansion into new
geographic markets.
13<PAGE>
At November 30, 1999, the Company had no outstanding borrowings on its
$10.0 million line of credit. Borrowings under the line of credit bear
interest at LIBOR plus .75% or prime at the Company's selection. At November
30, 1999, availability under the line of credit was reduced by outstanding
letters of credit of $2.7 million. The line of credit is renewable annually,
and any amounts borrowed under the line are payable upon its termination in
February 2001.
The Company's Board of Directors has authorized a program allocating up
to $100 million in Company funds to repurchase shares of its Class A Common
Stock. As of November 30, 1999, the Company had repurchased approximately
2,901,000 shares at a total cost of approximately $69.6 million.
The Department of Education ("ED") requires that Title IV Program funds
collected by an institution for unbilled tuition be kept in a separate cash
or cash equivalent account until the students are billed for the portion of
their program related to these Title IV Program funds. In addition, all
funds transferred to the Company through electronic funds transfer are held
in a separate cash account until certain conditions are satisfied. As of
November 30, 1999, the Company had approximately $26.7 million in these
separate accounts, which are reflected in the Consolidated Balance Sheet as
restricted cash, to comply with these requirements. These funds generally
remain in these separate accounts for an average of 60 to 75 days from the
date of collection. These restrictions on cash have not affected the
Company's ability to fund daily operations.
In January 1998, the Department of Education Office of the Inspector
General ("OIG") began performing an audit of UOP's administration of the
Title IV Programs. The team previously presented questions regarding UOP's
interpretation of the "12-hour rule," UOP's distance education programs, and
UOP's institutional refund obligations. UOP has received a draft report
addressing these issues and is currently in discussions with the OIG and ED.
Although the Company believes that the OIG audit will be resolved without any
negative impact on UOP's teaching/learning model, as with any program review
or audit, no assurance can be given as to the final outcome since the matters
are not yet resolved. Depending on the interpretation of the various
regulatory requirements, any resulting liability to the Company from the
final audit results will be recorded as an expense.
YEAR 2000 COMPLIANCE
The Year 2000 computer issue refers to a condition in computer software
where a two digit field rather than a four digit field is used to distinguish
a calendar year. Unless corrected, some computer programs, hardware ("IT")
and non-information technology systems ("non-IT") could be unable to process
information containing dates subsequent to December 31, 1999. As a result,
such programs and systems could experience miscalculations, malfunctions or
disruptions.
The Company completed all testing and remediation of its IT and non-IT
systems and all contingency plans by November 30, 1999. As of the date of
this filing, there have been no disruptions to the Company's operations since
the 2000 calendar year began. The Company will continue to monitor its
significant suppliers, the general economy and financial markets to evaluate
any potential disruption to its operations. Costs incurred in connection
with the Company's Year 2000 efforts have not been material.
14<PAGE>
IMPACT OF INFLATION
Inflation has not had a significant impact on the Company's historical
operations.
Item 3 -- Quantitative and Qualitative Disclosures about Market Risk
The Company's portfolio of marketable securities includes numerous
issuers, varying types of securities and maturities. The Company intends to
hold these securities to maturity. The fair value of the Company's portfolio
of marketable securities would not be significantly impacted by either a 100
basis point increase or decrease in interest rates due primarily to the
short-term nature of the portfolio. The Company does not hold or issue
derivative financial instruments.
15<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . .Not Applicable
Item 2. Changes in Securities . . . . . . . . . . . . . . . .Not Applicable
Item 3. Defaults Upon Senior Securities . . . . . . . . . . .Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders .Not Applicable
Item 5. Other Information . . . . . . . . . . . . . . . . . .Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 15.1 Letter on Unaudited Interim Financial Information
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended November
30, 1999.
16 <PAGE>
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.
APOLLO GROUP, INC.
(Registrant)
Date: January 14, 2000 By: /s/ Junette C. West
---------------------------------
Junette C. West
Chief Accounting Officer
By: /s/ Kenda B. Gonzales
----------------------------------
Kenda B. Gonzales
Chief Financial Officer
By: /s/ Todd S. Nelson
----------------------------------
Todd S. Nelson
President
17 <PAGE>
APOLLO GROUP, INC. AND SUBSIDIARIES
EXHIBIT INDEX
PAGE
15.1 Letter on Unaudited Interim Financial Information Filed herewith
27 Financial Data Schedule Filed herewith
18 <PAGE>
Exhibit 15.1
Letter on Unaudited Interim Financial Information
January 14, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that our report dated December 15, 1999 on our
review of interim financial information of Apollo Group,
Inc. (the "Company") as of and for the period ended November
30, 1999 and included in the Company's quarterly report on
Form 10-Q for the quarter then ended is incorporated by
reference in its Registration Statements on Form S-8 (Nos.
33-87844, 33-88982, 33-88984 and 33-63429).
Yours very truly,
/s/ PricewaterhouseCoopers LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Operations and the Consolidated Balance Sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000929887
<NAME> APOLLO GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-END> NOV-30-1999
<CASH> 73,098
<SECURITIES> 38,890
<RECEIVABLES> 88,396
<ALLOWANCES> 10,920
<INVENTORY> 0
<CURRENT-ASSETS> 203,004
<PP&E> 123,870
<DEPRECIATION> 46,046
<TOTAL-ASSETS> 353,038
<CURRENT-LIABILITIES> 116,122
<BONDS> 0
0
0
<COMMON> 104
<OTHER-SE> 227,532
<TOTAL-LIABILITY-AND-EQUITY> 353,038
<SALES> 0
<TOTAL-REVENUES> 143,418
<CGS> 0
<TOTAL-COSTS> 104,738
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,510
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<INCOME-TAX> 11,119
<INCOME-CONTINUING> 16,827
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<EPS-BASIC> .22
<EPS-DILUTED> .22
</TABLE>
