Apollo Group Inc. Reports Revenues and Earnings for Third Quarter Fiscal 2000.

Business Editors

PHOENIX--(BUSINESS WIRE)--June 27, 2000

Apollo Group Inc. (Nasdaq: APOL) Tuesday reported financial results for the third quarter of fiscal 2000 ended May 31, 2000.

Tuition and other net revenues for the third quarter of fiscal 2000 rose 21% to $167.6 million, compared with $138.1 million in the third quarter of fiscal 1999. Net income for the three months increased 12% to $21.1 million from $19.0 million for the same period last year, or to $.28 per share from $.24 per share.

During the quarter we recorded a non-recurring charge of $6.0 million ($3.5 million net of income taxes) related to an agreement reached with the Department of Education Office of Student Financial Assistance Programs. Excluding this charge, net income would have increased 30% to $24.6 million, or to $.32 per share.

Tuition and other net revenues for the nine months ended May 31, 2000 rose 23% to $445.0 million, compared with $363.2 million for the same period last year.

Net income for the nine months increased 17% to $49.9 million, or $.65 per share, as compared to $42.7 million, or $.54 per share, reported for the same period last year. Excluding the charge described above, net income would have increased 25% to $53.4 million, or to $.70 per share.

Dr. John G. Sperling, chairman of the board and chief executive officer, said, "During the third quarter of fiscal year 2000, the University of Phoenix opened new learning centers in California, Florida, and Washington."

Sperling continued, "We are pleased with our revenue growth of 21% during the third quarter. Additionally, we are extremely pleased with our operating margin of 24% (excluding the non-recurring charge) for the quarter in light of the geographic expansion of the University of Phoenix."

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., the 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 52 campuses and 92 learning centers in 35 states, Puerto Rico and Vancouver, British Columbia. Combined degree enrollment was 94,255 students as of May 31, 2000.

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.

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

                              Three Months Ended    Nine Months Ended

                               May 31,   May 31,    May 31,   May 31,
                                2000      1999       2000      1999
                                 (unaudited)           (unaudited)

Revenues:
  Tuition and other, net     $167,591   $138,017   $444,989  $363,161

Costs and expenses:
Instruction costs
  and services                 97,441     78,873    263,092   212,160
Selling and promotional        23,009     18,783     66,417    55,232
General and administrative     12,572     10,063     35,272    28,695
                              --------    -------   -------   --------
                              133,022    107,719    364,781   296,087

Income from operations         34,569     30,388     80,208    67,074
Interest income, net            1,590      1,352      4,186     3,939

Income before income taxes     36,159     31,740     84,394    71,013
Less provision
  for income taxes             15,016     12,780     34,511    28,360

Net income                    $21,143    $18,960    $49,883   $42,653

Diluted net income per share  $   .28    $   .24    $   .65   $   .54

Diluted weighted average
  shares outstanding           76,126     78,914     76,700    79,089


Operating Data:                May 31,   May 31,
                                2000      1999
Students enrolled in
  degree programs              94,255     79,097(a)
Number of locations:
Campuses                           52         48
Learning Centers                   92         84
                               ------     ------
                     144              132
                                  144        132

(a) Excludes 1,632 degree enrollments at LeTourneau University.

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.