Apollo Group Inc. Reports Revenues and Earnings for Second Quarter Fiscal 2001.

Business Editors

PHOENIX--(BUSINESS WIRE)--March 27, 2001

Apollo Group Inc. Tuesday reported financial results for Apollo Education Group (Nasdaq:APOL) and University of Phoenix Online (Nasdaq:UOPX) for the second quarter of fiscal 2001 ended Feb. 28, 2001.

Net income attributed to Apollo Education Group for the three months ended Feb. 28, 2001 was $15.7 million, or $.14 per share, compared to $11.9 million, or $.10 per share, reported for the same period last year. Net income attributed to University of Phoenix Online was $654,000, or $.10 per share for the three months ended Feb. 28, 2001.

Net income attributed to Apollo Education Group for the six months ended Feb. 28, 2001 was $40.1 million, or $.35 per share, compared to $28.7 million, or $.25 per share, reported for the same period last year. Net income attributed to University of Phoenix Online was $1.0 million, or $.16 per share for the six months ended Feb. 28, 2001.

"We are pleased that both our online and core businesses again exceeded our expectations this quarter resulting in another strong financial and enrollment performance for Apollo Education Group and University of Phoenix Online," said Dr. John G. Sperling, chairman and chief executive officer.

"In today's business and economic environment, as knowledge becomes increasingly important, people are inclined to review their need for education and training. We plan to continue our focus on providing accessible, accredited programs for the educational needs of working adults."

Total consolidated revenues for Apollo Group Inc. for the three months ended Feb. 28, 2001 rose 21.6 percent to $163.0 million, compared with $134.0 million in the second quarter of fiscal 2000. The University of Phoenix accounted for 92 percent of the $149.8 million in net tuition revenues from students enrolled in degree programs for the quarter ended Feb. 28, 2001.

Total revenues for University of Phoenix Online for the three months ended Feb. 28, 2001 rose 65.2 percent to $36.1 million, compared with $21.9 million in the second quarter of fiscal 2000.

Total consolidated revenues for Apollo Group Inc. for the six months ended Feb. 28, 2001 rose 22.6 percent to $340.1 million, compared with $277.4 million for the same period last year. The University of Phoenix accounted for 92 percent of the $310.6 million in net tuition revenues from students enrolled in degree programs for the six months ended Feb. 28, 2001.

Total revenues for University of Phoenix Online for the six months ended Feb. 28, 2001 rose 64.9 percent to $70.2 million, compared with $42.6 million for the same period last year.

Consolidated net income for Apollo Group Inc. for the three months ended Feb. 28, 2001 increased 37.2 percent to $16.3 million, compared to $11.9 million for the same period last year. Net income for University of Phoenix Online for the three months ended Feb. 28, 2001 increased 75.2 percent to $6.0 million, compared to $3.4 million for the same period last year.

Consolidated net income for Apollo Group Inc. for the six months ended Feb. 28, 2001 increased 43.3 percent to $41.2 million, compared to $28.7 million for the same period last year. Net income for University of Phoenix Online for the six months ended Feb. 28, 2001 increased 71.6 percent to $11.6 million, compared to $6.8 million for the same period last year.

Consolidated degree enrollments for all of the Apollo Group Inc. institutions at Feb. 28, 2001 increased by 18 percent to 111,300 students compared to 94,000 students at Feb. 29, 2000. Degree enrollments at the University of Phoenix were 89,900 students at Feb. 28, 2001 compared to 74,400 students at Feb. 29, 2000 representing a 21 percent increase.

Degree enrollments for University of Phoenix Online at Feb. 28, 2001 increased by 67 percent to 20,400 students compared to 12,200 students at Feb. 29, 2000.

During the second quarter of fiscal year 2001, the University of Phoenix opened a new campus in Boston. University of Phoenix anticipates opening campuses in the Dallas and Houston areas during the third quarter of fiscal 2001.

Business Outlook

Apollo Group Inc.

-- We expect revenue for the quarter ending May 31, 2001 to be between $204
million and $206 million and to be between $752 million and $754 million for
fiscal 2001.

-- Operating margin is expected to be between 20 percent and 20.5 percent for
the quarter ended May 31, 2001 and to be between 19 percent and 19.5 percent
for fiscal 2001.

University of Phoenix Online

-- We expect revenue for the quarter ending May 31, 2001 to be

between $49 million and $50 million and to be between

$171 million and $172 million for fiscal 2001.

-- Operating margin is expected to be between 16.5 percent and

17 percent for the quarter ended May 31, 2001 and to be

between 20 percent and 21 percent for fiscal 2001.

Diluted earnings per share attributed to Apollo Education Group are expected to be $0.23 for the quarter ending May 31, 2001 and to be between $0.78 and $0.79 for fiscal 2001. Diluted earnings per share attributed to University of Phoenix Online are expected to be $0.08 for the quarter ending May 31, 2001 and to be between $0.32 and $0.33 for fiscal 2001.

Based on the increasing lead flow, we expect degree enrollments at The University of Phoenix (excluding University of Phoenix Online) to continue to grow between 12 percent and 14 percent over the prior year at the end of both the third and fourth quarters of fiscal 2001.

We expect University of Phoenix Online degree enrollments to continue to grow in excess of 50 percent over the prior year at the end of both the third and fourth quarters of fiscal 2001.

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 Corp., Western International University Inc. and Apollo Learning Group 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 56 campuses and 101 learning centers in 35 states, Puerto Rico and Vancouver, British Columbia. Combined degree enrollment was 111,300 students as of Feb. 28, 2001.

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.

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 the anticipated opening of more University of Phoenix campuses.

Forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Apollo Group Inc. to be materially different from those expressed or implied by such forward-looking statements. Factors that could affect Apollo Group Inc.'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 North Central Association of

Colleges and Schools' 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

Aug. 31, 2000; 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 us and our management and speak only as of the date made and are not guarantees of future performance. We undertake 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 we make in our reports filed with the Securities and Exchange Commission.

                  Apollo Group Inc. and Subsidiaries
                 Selected Financial and Operating Data
           (Dollars in thousands, except per share amounts)

                               For the Three          For the Six
                               Three Months           Months Ended
                               Feb. 28 and 29,       Feb. 28 and 29,
                               2001      2000        2001      2000

Revenues:
 Tuition and other, net      $162,980  $133,980    $340,053  $277,398

Costs and expenses:
  Instructional
   costs and services          94,237    81,849     189,472   164,583
  Selling and
   promotional                 32,991    22,293      63,999    44,852
  General and
   administrative              11,723    10,828      23,709    22,324
                             --------  --------    --------  ---------
                              138,951   114,970     277,180   231,759

Income from operations         24,029    19,010      62,873    45,639
Interest income, net            3,661     1,279       6,829     2,596
Income before
 income taxes                  27,690    20,289      69,702    48,235
Provision for
 income taxes                  11,341     8,376      28,524    19,495
Net income                   $ 16,349  $ 11,913    $ 41,178  $ 28,740

Net income attributed to:
Apollo Education
 Group Common Stock          $ 15,695  $ 11,913    $ 40,134  $ 28,740
University of Phoenix
 Online Common Stock         $    654  $      -    $  1,044  $      -

Earnings per share
 attributed to:

Apollo Education
 Group Common Stock:
Diluted net income
 per share                   $   0.14  $   0.10    $   0.35  $   0.25
Diluted weighted
 average shares
 outstanding                  116,008   114,778     115,608   115,512

University of Phoenix
 Online Common
 Stock:
Diluted net
 income per share            $   0.10              $   0.16
Diluted weighted
 average shares
 outstanding                    6,769                 6,624



                                            At Feb. 28 and 29,
                                           2001            2000

Operating Data
Students enrolled in degree programs      111,303          94,046
Number of locations:
Campuses                                       56              52
Learning Centers                              101              89
                                         ---------       ---------
                                              157             141



                  Apollo Group Inc. and Subsidiaries
                          Degree Enrollments

                                                  Quarter Ended
                                                  Feb. 28 and 29,
                                                  2001        2000

University of Phoenix:
   Campuses established prior to February 1996    76,492      64,689
   Campuses established after February 1996       13,386       9,732
Total University of Phoenix                       89,878      74,421

Institute for Professional Development            19,669      17,803
Western International University                   1,574       1,501
College for Financial Planning                       182         321
Total Degree Enrollment                          111,303      94,046




                     University of Phoenix Online
                        Selected Financial Data
                            (in thousands)

                               For the Three           For the Six
                                Months Ended           Months Ended
                               Feb. 28 and 29,        Feb. 28 and 29,
                               2001      2000        2001       2000

Revenues:
  Tuition and other, net    $ 36,125   $ 21,868   $ 70,212   $ 42,585

Costs and expenses:
 Instructional costs
  and services                15,687     11,269     31,333     21,811
 Selling and promotional       8,719      3,220     16,321      6,306
 General and administrative    2,574      1,585      4,673      3,088
                            --------- ----------  --------- ----------
                              26,980     16,074     52,327     31,205

Income from operations         9,145      5,794     17,885     11,380
Interest income, net           1,010          -      1,704          -
Income before income taxes    10,155      5,794     19,589     11,380
Provision for income taxes     4,115      2,346      7,973      4,610
Net income                  $  6,040   $  3,448   $ 11,616   $  6,770

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.