8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 5, 2012

Apollo Group, Inc.

(Exact name of registrant as specified in its charter)

Arizona	0-25232	86-0419443
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
4025 S. Riverpoint Parkway, Phoenix, Arizona		85040
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (480) 966-5394

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition

On January 5, 2012, Apollo Group, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended November 30, 2011. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 2.02 by this reference.

The information in Item 2.02 of this Form 8-K and Exhibit 99.1 furnished herewith shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Section 5 – Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Charles B. Edelstein will retire as Co-Chief Executive Officer and a member of the Board of Directors of Apollo Group, Inc. (the “Company”), upon the expiration of his existing employment agreement on August 26, 2012. On January 5, 2012, Mr. Edelstein and the Company entered into a transition agreement (the “Transition Agreement”), pursuant to which Mr. Edelstein will resign as an officer and director of the Company on August 26, 2012. Until that time, Mr. Edelstein will continue to serve the Company in his current capacity under the terms of his existing employment agreement, and will remain eligible for a fiscal year 2012 incentive cash bonus on the same terms as currently in effect.

Following Mr. Edelstein’s cessation of service as the Company’s Co-Chief Executive Officer on August 26, 2012, he will enter into a limited part-time employment arrangement pursuant to the Transition Agreement. The principal features of that agreement may be summarized as follows:

• The part-time employment period will start on August 27, 2012 and continue through February 28, 2013 unless earlier terminated in accordance with the provisions of the Transition Agreement.

• Mr. Edelstein’s title during such period will be Senior Advisor and Former Co-Chief Executive Officer.

• During such period, Mr. Edelstein will work directly with the Company’s remaining Chief Executive Officer in transitioning his duties and responsibilities and carrying out such projects as the Chief Executive Officer may assign in advancement of one or more of the Company’s strategic objectives.

• As a part-time employee, Mr. Edelstein will work 30 hours per calendar month and will receive a salary of $10,500 per calendar month. His hours and salary will be pro-rated for any period less than a full calendar month.

• During his period of part-time of employment, Mr. Edelstein will not participate in any employee benefit plans or cash incentive plans and will not be eligible for any new equity awards.

In connection with his cessation of service as the Company’s Co-Chief Executive Officer on August 26, 2012, Mr. Edelstein will become entitled to receive the severance benefits that are provided under his existing employment agreement with the Company dated July 7, 2008, as amended on December 12, 2008, February 23, 2009 and April 24, 2009 and further clarified on September 29, 2010. The payment of those severance benefits will commence on March 1, 2013 upon the expiration of the required six month

delay period under applicable federal tax law. As set forth in his existing employment agreement with the Company, the payment of these severance benefits will be subject to Mr. Edelstein’s delivery of a general release of all claims against the Company and its affiliates and his compliance with the non-competition and non-solicitation covenants.

Should Mr. Edelstein’s employment be terminated by the Company without cause prior to August 26, 2012 or should he resign for good reason before that date, his vested outstanding options will remain exercisable until May 27, 2013.

A copy of Mr. Edelstein’s current employment agreement has been filed as Exhibit 10.1 to the Company’s Form 8-K filed on July 8, 2008, and amendments to that agreement have been filed as Exhibit 10.8 to the Company’s Form 10-Q filed on January 8, 2009, Exhibit 10.2 to the Company’s Form 10-Q filed on March 31, 2009, and Exhibit 10.2 to the Company’s Form 8-K filed on April 27, 2009. In addition, a clarification letter was filed as Exhibit 10.3 to the Company’s Form 10-Q filed on January 10, 2011. Except as modified by the Transition Agreement, Mr. Edelstein’s current employment agreement, as so amended, will continue in effect in accordance with its terms. The Transition Agreement is filed as Exhibit 10.1 to this Form 8-K.

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

On January 5, 2012, Apollo Group, Inc. issued a press release announcing the retirement of Charles B. Edelstein as Co-Chief Executive Officer and a member of the Board of Directors as of August 26, 2012. A copy of the press release is furnished as Exhibit 99.2 to this Form 8-K.

The information in Item 7.01 of this Form 8-K and Exhibit 99.2 furnished herewith shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in any such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed or furnished herewith:

Exhibit Number	Description
10.1*	Transition Agreement between Apollo Group, Inc. and Charles B. Edelstein, dated January 5, 2012
99.1**	Text of press release of Apollo Group, Inc. dated January 5, 2012, relating to fiscal 2012 first quarter results
99.2**	Text of press release of Apollo Group, Inc. dated January 5, 2012, relating to the retirement of Charles B. Edelstein

* Filed

** Furnished

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 hereunto duly authorized.

	Apollo Group, Inc.
January 5, 2012	By:	/s/ Brian L. Swartz
		Name: Brian L. Swartz
		Title: Senior Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
10.1	Transition Agreement between Apollo Group, Inc. and Charles B. Edelstein, dated January 5, 2012.
99.1	Text of press release issued by Apollo Group, Inc. dated January 5, 2012, relating to fiscal 2012 first quarter results.
99.2	Text of press release issued by Apollo Group, Inc. dated January 5, 2012, relating to the retirement of Charles B. Edelstein.

EX-10.1

Exhibit 10.1

APOLLO GROUP, INC.

4025 South Riverpoint Parkway

Phoenix, AZ 85040

January 5, 2012

Mr. Charles B. Edelstein

Apollo Group, Inc.

4025 South Riverpoint Parkway

Phoenix, AZ 85040

Dear Chas:

The purpose of this letter is to document the understanding we have reached concerning the termination of your full-time employment and transition to part-time employment with Apollo Group, Inc. (the “Company”). The terms and conditions governing your current full-time employment relationship with the Company are set forth in your existing employment agreement with the Company dated July 7, 2008, and subsequently amended on December 12, 2008, February 23, 2009 and April 24, 2009 and further clarified on September 29, 2010 (collectively the “Employment Agreement”). The terms of the Employment Agreement (or any other agreement between you and the Company, including any outstanding equity award agreements) that are not expressly modified or superseded by the terms of this letter agreement (the “Transition Agreement”) will remain unmodified and continue in full force and effect until their designated termination or expiration dates. The capitalized terms used in this Transition Agreement, to the extent not defined herein, will have the meanings assigned to them in the Employment Agreement.

1. Continued Full-Time Employment. You will remain in full-time employment with the Company until the earlier of (a) August 26, 2012 or (b) the date on which your employment is sooner terminated under Section 2 below. Unless your full-time employment with the Company is otherwise sooner terminated under Section 2 below, you will continue as the Company’s Co-Chief Executive Officer and a member of the Company’s Board of Directors until the close of business on August 26, 2012.

For purposes of the current cash incentive plan in effect for the Company’s executive officers for the 2012 fiscal year (the “FY 2012 Annual Incentive Plan”), you will be deemed to satisfy the one-year service requirement upon your continuation in the Company’s employ through the close of the 2012 fiscal year, whether as a full-time employee under your Employment Agreement through August 26, 2012 or pursuant to your part-time employment arrangement commencing August 27, 2012 under this Transition Agreement. The actual bonus amount payable to you under the FY 2012 Annual Incentive Plan upon such satisfaction of the service requirement will be dependent upon (i) the level at which the applicable performance goals are attained and (ii) the degree to which the Compensation Committee of the Company’s Board of Directors exercises the negative discretion it has reserved under the FY 2012 Annual Incentive Plan. Any such exercise of negative discretion will be applied on a uniform basis to you and the other executive officers of the Company participating in the FY 2012 Annual Incentive Plan.

2. Termination of Full-Time Employment. Your full-time employment with the Company will continue through August 26, 2012, unless prior to such date: (a) the Company terminates your employment for Cause, (b) your employment terminates by reason of your death or Disability, (c) the Company terminates your employment for any reason other than for Cause or (d) you terminate your employment with or without Good Reason. Should your employment terminate for any of the foregoing reasons prior to August 26, 2012, the provisions of your Employment Agreement will govern any rights or entitlement you may have with respect to your outstanding equity awards and any other additional severance benefits, including any potential severance benefits under Section 8 of your Employment Agreement.

This Transition Agreement shall constitute the “Notice of Non-Renewal” required by Section 1 of the Employment Agreement, and no further notice of non-renewal shall be required. Accordingly, unless sooner terminated, your employment pursuant to the terms of the Employment Agreement will be deemed to have been terminated by the Company, by reason of the foregoing non-renewal notice, effective as of the close of business on August 26, 2012, and you will therefore become entitled to receive the severance compensation described in Section 8(b) of the Employment Agreement, subject to the conditions described therein and in Section 5 of this Transition Agreement.

Upon the termination of your Employment Agreement on August 26, 2012, you will immediately resign as the Company’s Co-Chief Executive Officer and will not hold any other officer positions with the Company, and you will also as of such date immediately resign from the Company’s Board of Directors.

Following the date of such resignations, you will no longer be subject to the insider reporting and trading restrictions under Section 16 of the Securities Exchange Act of 1934, as amended, except to the extent that you engage in a non-exempt transaction in the Company’s Class A common stock following your resignation date that is matchable against an opposite-way non-exempt transaction in such stock in which you engaged within the preceding six (6) months while still in executive officer status.

You will, during your period of part-time employment with the Company pursuant to this Transition Agreement, continue to be a restricted person subject to the Company’s insider trader policy.

3. Conversion to Part-Time Employment. Unless your employment with the Company terminates earlier pursuant to Section 2 above, effective August 27, 2012 you will become a part-time employee of the Company, and your commitment will be permanently reduced to a level less than 20% of the average level of services provided by you during the three (3)-year period preceding your conversion to such part-time status. Accordingly, you will only be required to work, and you will only work, thirty (30) hours per month during the term of your part-time employment arrangement hereunder. Your part-time employment with the Company as described below will continue through February 28, 2013, unless sooner terminated by reason of (i) your election to terminate such arrangement upon three (3) business days prior written notice to the Company, (ii) your death or Disability or (iii) the Company’s immediate termination of your part-time employment for Cause (except that for purposes of this Section 3, the definition of “Cause” in Section 7(b)(i) of the Employment Agreement shall be revised to delete clauses (F), (G) and (H) from such definition since those terms are only applicable to you in your former position as Co-Chief Executive Officer). Upon the termination of your part-time employment with the Company, you will no longer render any services in any capacity to the Company or any of its affiliates.

The following provisions will govern your period of part–time employment:

(a) You will hold the title of Senior Advisor and Former Co-Chief Executive Officer and will report directly to the Company’s Chief Executive Officer. The Company’s Chief Executive Officer will, from time to time, delineate the specific duties and responsibilities you will have during your period of part-time employment and such duties shall be appropriate given your prior position with and service to the Company.

(b) Your services as a part-time employee may be performed in person at the Company’s offices in Chicago, Illinois, by telecommuting and/or while traveling on Company business. You and the Company will take reasonable steps to ensure you maintain connectivity via VPN and Blackberry or similar personal digital assistant device, and you will retain possession of your Company-provided laptop computer and I-Pad until your period of part-time employment ends, at which time you shall return those devices to the Company. You will be provided with an appropriate office at the Company’s offices in Chicago, Illinois and with administrative support at such location as is adequate for the performance of your duties hereunder.

(c) You will at all times during the part-time employment period remain subject to the control and direction of the Company as to both the work to be performed and the manner and method of performance. Your part-time work schedule will be set by the Company from time to time on the basis of the normal work schedule in effect for the Company’s other salaried employees. You will also remain subject to all employee workplace rules and standards. You will keep an accurate record of the hours you work each week and submit your recorded time for each week to the Company within three (3) business days after the conclusion of that week.

(d) You will be compensated as a salaried employee at the monthly rate of $10,500 based on the rate of $350 per hour for the thirty (30) hours of part-time employment you are committed to render per calendar month. For any partial calendar month during your period of part-time employment, both your rate of monthly salary and work hour requirement will be appropriately pro-rated. You will be paid your monthly salary in one or more increments each month in accordance with the regular pay periods for the Company’s other salaried employees. Each payment will be subject to the Company’s collection of all applicable withholding taxes. In no event will any compensation you earn for service in any calendar year within your part-time employment period be paid later than March 15 of the succeeding calendar year.

(e) You will not be eligible to participate in any of the Company’s employee benefit plans, including the group health plans, the term insurance and disability plans, the non-qualified deferred compensation and profit-sharing plans and the employee stock purchase plan, and you will not accrue any vacation pay during you period of part-time employment. However, you may continue to make pre-tax contributions to the Company’s 401(k) plan.

(f) You will not be eligible to receive any new equity awards, including (without limitation) any awards for the 2013 fiscal year (which will be made in June or July 2012) or for any subsequent fiscal year, or to participate in any cash incentive plans for fiscal years beginning after August 31, 2012.

(g) Subject to applicable Company policies, including (without limitation) the timely submission of appropriate documentation and expense reports, you will be entitled to receive prompt reimbursement of all expenses reasonably incurred by you in connection with the performance of your part-time duties hereunder or for promoting, pursuing or otherwise furthering the business or interests of the Company; provided, however, that any expenses in excess of $1,000 individually or $10,000 in the aggregate, shall be submitted for approval and authorization by the Company’s Chief Executive Officer prior to the incurrence of such expenses. To obtain reimbursement for your expenses hereunder, you

must submit appropriate evidence of each such expense within thirty (30) days after the later of (i) your incurrence of that expense or (ii) your receipt of the invoice or billing statement for such expense, and the Company shall provide you with the requisite reimbursement within ten (10) business days thereafter; provided, however, that no expense will be reimbursed later than the close of the calendar year following the calendar year in which that expense is incurred. The amount eligible for reimbursement hereunder in any calendar year during your period of part-time employment will not affect the amount eligible for reimbursement hereunder during any other calendar year, and you may not exchange or liquidate your right to reimbursements hereunder for any other payment or benefit.

(h) For the avoidance of doubt, the Company agrees that pursuant to Section 16 of the Employment Agreement you will be indemnified, defended, and held harmless from and against any and all claims and/or liability arising from, as a result of, or in connection with your service as a part-time employee to the same extent as you were indemnified, defended, and held harmless in connection with your service as Co-Chief Executive Officer.

4. COBRA Coverage. Assuming your service under the Employment Agreement continues until August 26, 2012, your coverage under the Company’s health care plans will terminate on August 31, 2012 as a result of your conversion to limited part-time employee status on August 27, 2012. Pursuant to the provisions of Section 8(b)(iii) of the Employment Agreement, you will be entitled to reimbursement of your COBRA coverage costs for the period of coverage commencing September 1, 2012 and continuing until the earliest to occur of (i) eighteen (18) months of such reimbursed COBRA coverage costs, (ii) the date you are no longer eligible for COBRA coverage or (iii) the date you become eligible for COBRA coverage under a successor employer health care plan (as to which event you shall provide the Company with written notice within ten (10) calendar days). The reimbursement of your COBRA coverage costs will be governed by the express terms and conditions of Section 8(b)(iii) of the Employment Agreement, and nothing in this Transition Agreement shall modify, alter or supersede those terms and conditions.

5. Severance Package. Should (i) your employment with the Company terminate prior to August 26, 2012 by reason of a unilateral termination effected by the Company for any reason other than Cause, death or Disability or by reason of your resignation for Good Reason or (ii) your employment pursuant to the terms of the Employment Agreement terminates at the close of business on August 26, 2012 by reason of the Notice of Non-Renewal provided in Section 2 of this Transition Agreement, then you will be entitled to receive the Accrued Obligations and the severance compensation described in Section 8(b) of the Employment Agreement, subject to the conditions described therein and in this Section 5 and payable in accordance with the terms of the Employment Agreement. For avoidance of doubt, you and the Company agree that such severance compensation under Section 8(b) of the Employment Agreement consists of the following:

• a cash severance amount (the “Cash Severance Benefit”) equal to (A) two times the rate of Base Salary in effect for you on your termination date plus (B) two times the average of your actual Annual Bonuses for the 2009, 2010 and 2011 fiscal years, with such amounts to be paid as follows: on March 1, 2013 (or upon your death, if earlier), you will receive in a lump sum the installments of your Cash Severance Benefit that would have otherwise been paid to you during the period from August 27, 2012 through February 28, 2013 in the absence of the delayed payment provisions of Section 14(b) of your Employment Agreement, and the balance will be paid in successive equal installments over the Company’s regular pay periods for salaried employees during the period from March 1, 2013 to August 31, 2013, with the first such installment to be paid on the first such regularly-scheduled pay day for the Company’s salaried employees after March 1, 2013 and the last such installment to be paid on the regularly-scheduled pay day for salaried employee coincident with or closest to August 31, 2013, and

• the accelerated vesting of the remaining unvested balance (if any) of your Initial Option Grant.

Although Section 8(b)(ii) of the Employment Agreement also provides for one hundred percent accelerated vesting of both your Initial RSU Award and Supplemental Award, you hereby acknowledge that those two awards have already vested in full, and the vesting acceleration provisions of your Employment Agreement are no longer applicable to those two awards.

The reimbursement of COBRA coverage costs to which you are entitled under Section 8(b)(iii) of the Employment Agreement will be satisfied through the reimbursement arrangement set forth in Section 4 of this Transition Agreement.

As a condition to your right to receive the Cash Severance Benefit, you must execute and deliver to the Company a general release in the form of attached Exhibit A to this Transition Agreement, with such release to be dated February 21, 2013, and such release must become effective and enforceable by you not revoking it within the seven (7)-day period in which you have to revoke it after signing. You must also continue to comply with the restrictive covenants set forth in Section 10 of the Employment Agreement.

Each payment of your Cash Severance Benefit will be subject to the Company’s collection of all applicable withholding taxes, and you will only receive the net amount remaining after such taxes have been withheld.

The fact that for the avoidance of doubt certain severance terms have been explicitly set forth above shall not affect any rights you may have in the event the Employment Agreement terminates prior to August 26, 2012 because of your death or Disability.

6. Exercise Period Following Termination of Employment. Your Initial Option Grant covering 1,000,000 shares of the Company’s Class A common stock will remain outstanding during the period of your part-time employment. Pursuant to the terms of the grant agreement for your Initial Option Grant, you will have a three (3)-month period measured from the date on which your employment with the Company terminates in which to exercise your Initial Option Grant (or twelve (12)-month in the event your employment terminates by reason of death or Disability), but in no event may your Initial Option Grant be exercised after the expiration date of the maximum six (6)-year option term. Accordingly, if your period of part-time employment pursuant to this Transition Agreement continues until the scheduled February 28, 2013 termination date, you will have a three-month period measured from that date (i.e., until May 27, 2013) in which to exercise the outstanding balance of your Initial Option Grant. Should (i) the Company terminate your employment under the Employment Agreement for any reason other than Cause, death or Disability prior to August 26, 2012 or (ii) you resign for Good Reason under the Employment Agreement before August 26, 2012, then the period for exercising your Initial Option Grant will automatically be extended until the close of business on May 27, 2013.

7. Partial Waiver of Section 409A Gross-Up. You will continue to be entitled to the 409A Tax Goss-Up Payment protection provided pursuant to Section 14(c) of the Employment Agreement to the extent you incur a penalty tax under Code Section 409A with respect to the compensation arrangements in effect for you under the Employment Agreement or otherwise implemented in connection with your service as a full-time employee through the August 26, 2012 termination date of the Employment Agreement. Such 409A Tax Gross-Up Payment protection provided

by Section 14(c) of the Employment Agreement will survive the termination of that agreement. However, you hereby waive (and release the Company from) any right or entitlement you may have to any further 409A Tax Gross-Up Payment protection with respect to any penalty tax or other liability you incur under Code Section 409A that is attributable to any services you render as a part-time employee that do not strictly comply with the terms of this Transition Agreement, including (without limitation) any Code Section 409A penalty tax or liability that may arise in the event your separation from service date for Code Section 409A purposes is deemed to have been extended beyond August 26, 2012 because you performed services during your part-time employment period at a level in excess of the thirty (30) hours per month required of you under this Transition Agreement without the Company’s written consent. Accordingly, you shall assume full responsibility for any Code Section 409A penalty taxes or liabilities that may be triggered as a result of any services you render as a part-time employee that do not strictly comply with the terms of this Transition Agreement, and you hereby acknowledge and agree that you will not be entitled to any additional payments from the Company pursuant to Section 14(c) of the Employment Agreement or otherwise in the event you incur any penalty tax or other liability under Code Section 409A arising out of such unauthorized services.

8. Legal Fees. The Company will pay or reimburse you for the reasonable legal fees you incur in connection with the preparation and negotiation of this Transition Agreement. Such payment or reimbursement will be made within thirty (30) days after submission by you of documentation of such legal fees, but not later than March 15, 2012.

9. Non-Renewal of Employment Agreement. Your Employment Agreement will not be renewed upon the expiration of its initial four (4)-year term on August 26, 2012, and your Employment Agreement will accordingly terminate and cease to have any force or effect at the close of business on that date, except that (a) the restrictive covenants set forth in Section 10 of your Employment Agreement will continue to be binding upon you during your period of part-time employment pursuant to this Transition Agreement and for the one (1)-year period measured from the date you cease your-part employment with the Company and (b) Sections 8, 9, 13, 14, 16, 17, 19, 21, 22, 25 and 26 of your Employment Agreement will also survive the termination of your Employment Agreement, subject to the modification to Section 14(c) of the Employment Agreement set forth in Section 7 of this Transition Agreement. In addition, you will remain subject to the applicable provisions of your Proprietary Information Agreement with the Company.

10. Public Announcement. The Company will provide you with a reasonable opportunity to review and provide input into the 8-K filing that will be made by the Company in connection with the parties entering into this Transition Agreement, and with respect to any other public announcement made in connection with your transition and departure from the Company.

Sincerely
/s/ Gregory W. Cappelli
Title:	Co-Chief Executive Officer

ACCEPTANCE

I hereby accept the foregoing terms and conditions of this Transition Agreement governing my resignation as the Company’s Co-Chief Executive Officer and a member of the Company’s Board of Directors effective as of the close of business on August 26, 2012, and my conversion to part-time employment with Apollo Group, Inc. as Senior Advisor and Former Co-Chief Executive Officer, effective August 27, 2012, and agree that my existing Employment Agreement will not be renewed and will accordingly terminate on August 26, 2012. I also agree that (i) the restrictive covenants set forth in Section 10 of my Employment Agreement shall continue to be binding upon me during my period of part-time employment pursuant to this Transition Agreement and for the one (1)-year period measured from the date I cease such part-time employment with the Company, (ii) Sections 8, 9, 13, 14, 16, 17, 19, 21, 22, 25 and 26 of my Employment Agreement will also survive the termination of my Employment Agreement, subject to the modification to Section 14(c) of the Employment Agreement set forth in Section 7 of this Transition Agreement, (iii) I shall also remain subject to the applicable provisions of my Proprietary Information Agreement with the Company, and (iv) I will assume full responsibility for any Code 409A penalty taxes or liabilities that may be triggered as a result of any services I render as a part-time employee that do not strictly comply with the terms of this Transition Agreement.

/s/ Charles B. Edelstein

Charles B. Edelstein

Dated: January 5, 2012

EXHIBIT A

GENERAL RELEASE AGREEMENT

This AGREEMENT is made as of February 21, 2013, by and between Charles B. Edelstein (“Executive”), and Apollo Group, Inc. (the “Company”).

In consideration for the severance benefits offered by the Company to Executive pursuant to Section 8 of his Employment Agreement with the Company dated July 7, 2008 and subsequently amended on December 12, 2008, February 23, 2009 and April 24, 2009 and further clarified on September 29, 2010 (collectively, the “Employment Agreement”), Executive agrees as follows:

1. Termination of Employment. Executive acknowledges that his full-time employment with the Company terminated on August 26, 2012 and he currently remains in part-time employment with the Company pursuant to the terms of his Transition Agreement with the Company dated January 5, 2012 (the “Transition Agreement”). Executive agrees that he has received all wages and accrued but unpaid vacation pay earned by him through the date of this Agreement, other than any unpaid wages attributable to his part-time employment during the payroll period in which this Agreement is executed.

2. Waiver and Release.

(a) Except as set forth in Section 2(b), which identifies claims expressly excluded from this release, Executive hereby releases the Company, all affiliated companies, and their respective officers, directors, agents, employees, stockholders, successors and assigns from any and all claims, liabilities, demands, causes of action, costs, expenses, attorney fees, damages, indemnities and obligations of every kind and nature, in law, equity or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising from or relating to Executive’s employment with the Company through the date of this Agreement and the termination of his full-time employment with the Company and his executive officer positions on August 26, 2012, including (without limitation): claims of wrongful discharge, emotional distress, defamation, fraud, breach of contract, breach of the covenant of good faith and fair dealing, discrimination claims based on sex, age, race, national origin, disability or any other basis under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Americans with Disability Act, the Employee Retirement Income Security Act, as amended, the Equal Pay Act of 1963, as amended, and any similar law of any state or governmental entity, any contract claims, tort claims and wage or benefit claims, including (without limitation) claims for salary, bonuses, commissions, equity awards (including stock grants, stock options and restricted stock units), vesting acceleration, vacation pay, fringe benefits, severance pay or any other form of compensation.

(b) The only claims that Executive is not waiving and releasing under this Agreement are claims he may have for (1) unemployment, state disability, worker’s compensation, and/or paid family leave insurance benefits pursuant to the terms of applicable state law; (2) continued coverage under the Company-sponsored group health benefit plans pursuant to his rights under the federal law known as “COBRA” and/or under an applicable state law counterpart(s); (3) any benefits entitlements that are vested and unpaid as of his termination date pursuant to the terms of a Company-sponsored benefit plan; (4) any benefits or rights to which he is entitled pursuant to Section 8 of the Employment Agreement or pursuant to the terms of his presently-outstanding equity awards from the Company, including the post-employment exercise rights set forth in Section 6 of the Transition Agreement, or his rights to indemnification pursuant to Section 16 of the Employment Agreement or his rights to certain tax gross-up payments pursuant to Section 14(c) of the Employment Agreement, subject to the modification set forth in Section 7 of the Transition Agreement, (5) violation of any federal state or local statutory

and/or public policy right or entitlement that, by applicable law, is not waivable; and (6) any wrongful act or omission occurring after the date he executes this Agreement. In addition, nothing in this Agreement prevents or prohibits Executive from filing a claim with the Equal Employment Opportunity Commission (EEOC) or any other government agency that is responsible for enforcing a law on behalf of the government and deems such claims not waivable. However, because Executive is hereby waiving and releasing all claims “for monetary damages and any other form of personal relief” (per Section 2(a) above), he may only seek and receive non-personal forms of relief from the EEOC and similar government agencies.

(c) Executive represents that he has not filed any complaints, charges, claims, grievances, or lawsuits against the Company and/or any related persons with any local, state or federal agency or court, or with any other forum.

(d) Executive acknowledges that he may discover facts different from or in addition to those he now knows or believes to be true with respect to the claims, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever that are the subject of this Agreement, and he expressly agrees to assume the risk of the possible discovery of additional or different facts, and agrees that this Agreement shall be and remain in effect in all respects regardless of such additional or different facts. Executive expressly acknowledges that this Agreement is intended to include, and does include in its effect, without limitation, all claims which Executive does not know or suspect to exist in his favor against the Company and/or any related persons at the moment of execution thereof, and that this Agreement expressly contemplates extinguishing all such claims.

(e) Executive understands and agrees that the Company has no obligation to provide him with any severance benefits under the Employment Agreement unless he executes this Agreement. Executive also understands that he has received or will receive, regardless of the execution of this Agreement, all wages and reimbursements owed to him, together with any accrued but unpaid vacation pay, less applicable withholdings and deductions, earned through the date of this Agreement. Nothing in this Agreement shall affect, impair or waive the Executive’s right to receive any wages that become due and payable to him after the date of this Agreement by reason of his continued part-time employment pursuant to the Transition Agreement.

(f) This Agreement is binding on Executive, his heirs, legal representatives and assigns.

3. Entire Agreement. This Agreement, the Employment Agreement and the Transition Agreement constitute the entire understanding and agreement between Executive and the Company in connection with the matters described, and replaces and cancels all previous agreements and commitments, whether spoken or written, with respect to such matters. Nothing in this Agreement supersedes or replaces any of Executive’s obligations under his Employment Agreement or Transition Agreement that survive his termination of employment, including, but not limited to (i) his (and the Company’s) agreement to arbitrate disputes, (ii) his restrictive covenants under Section 10 of the Employment Agreement and (iii) his obligations under Section 9 of the Employment Agreement, his existing Proprietary Information Inventions Agreement with the Company and any other obligations not to use or disclose Company confidential and/or proprietary information.

4. Modification in Writing. No oral agreement, statement, promise, commitment or representation shall alter or terminate the provisions of this Agreement. This Agreement cannot be changed or modified except by written agreement signed by Executive and authorized representatives of the Company.

5. Governing Law; Jurisdiction. This Agreement shall be governed by and enforced in accordance with the laws of the State of Arizona.

6. Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

7. No Admission of Liability. This Agreement does not constitute an admission of any unlawful discriminatory acts or liability of any kind by the Company or anyone acting under its supervision or on its behalf. This Agreement may not be used or introduced as evidence in any legal proceeding, except to enforce or challenge its terms.

8. Acknowledgements. Executive is advised to consult with an attorney of his choice prior to executing this Agreement. By signing below, Executive acknowledges and certifies that he:

(a) has read and understands all of the terms of this Agreement and is not relying on any representations or statements, written or oral, not set forth in this Agreement;

(b) has been provided a consideration period of twenty-one calendar days within which to decide whether he will execute this Agreement and that no one hurried him into executing this Agreement;

(c) is signing this Agreement knowingly and voluntarily; and

(d) has the right to revoke this Agreement within seven (7) days after signing it, by delivering written notice of revocation, by FAX, personal delivery or certified mail, to the Company’s Senior Vice President, Human Resources, at the Company’s principal offices at 4025 South Riverpoint Parkway, Phoenix, Arizona 85040. Unless the Executive revokes this Agreement upon such written notice delivered to the Company’s Senior Vice President, Human Resources, prior to the expiration of the seven (7)-day revocation period, this Agreement and the general release hereunder shall become effective and enforceable at 12:01 AM on the eighth (8th) calendar day after the calendar day on which Executive has timely signed this Agreement (the “Effective Date”). Such Effective Date will be extended to the next business day should it fall on a Saturday, Sunday or holiday recognized by the U.S. Postal Service.

Because of the revocation period, the Company’s obligations to provide the Executive with any of the severance benefits set forth in Section 8 of the Employment Agreement shall not become effective or enforceable until this Agreement becomes effective and enforceable on the Effective Date.

I HAVE READ, UNDERSTAND AND VOLUNTARILY ACCEPT AND AGREE TO THE ABOVE TERMS

CHARLES B. EDELSTEIN
	Date: February 21, 2013
Signature

EX-99.1

Exhibit 99.1

Apollo Group, Inc.   News Release

APOLLO GROUP, INC. REPORTS FISCAL 2012 FIRST QUARTER RESULTS

Phoenix, January 5, 2012 — Apollo Group, Inc. (NASDAQ: APOL) (“Apollo Group,” “Apollo” or the “Company”) today reported financial results for the three months ended November 30, 2011.

“Our strategic initiatives to further enhance the student experience and provide world-class student protections remain our focus,” said Apollo Group Co-Chief Executive Officer and Apollo Global Chairman Greg Cappelli. “We are also pleased to report positive new enrollment growth during the first quarter and improving trends in admissions advisor effectiveness, while reaching students who we believe can be successful in our degree programs.”

Apollo Group Co-Chief Executive Officer Chas Edelstein added, “During the first quarter, we continued to invest in areas that will further differentiate University of Phoenix and enhance the student experience. We believe the acquisition of Carnegie Learning will accelerate our efforts to incorporate adaptive learning technologies into our academic platform, which support our students’ success in the classroom.”

Unaudited First Quarter of Fiscal 2012 Results of Operations

Consolidated net revenue for the first quarter of fiscal 2012 totaled $1,178.7 million, which represents an 11.1% decrease from the first quarter of fiscal 2011. This decrease was principally due to lower enrollments at University of Phoenix, which was partially offset by selective tuition price and other fee changes. For the quarter, University of Phoenix Degreed Enrollment decreased 14.8% to 373,100 compared with the prior year first quarter, primarily due to decreases in New Degreed Enrollment during fiscal 2011, which the Company believes were primarily the result of the operational changes and initiatives it implemented to more effectively support students and improve educational outcomes, as well as the broader competitive environment. University of Phoenix New Degreed Enrollment increased 12.7% in the first quarter of fiscal 2012 compared with the prior year period.

The Company reported income from continuing operations attributable to Apollo Group for the three months ended November 30, 2011, of $149.3 million, or $1.14 per share (130.9 million weighted average diluted shares outstanding), compared to income from continuing operations attributable to Apollo Group of $236.0 million, or $1.61 per share (146.7 million weighted average diluted shares outstanding) for the three months ended November 30, 2010. Results for the first quarters of fiscal 2012 and 2011 included a number of special items that are detailed below.

Results for the first quarter of fiscal 2012 included the following:

• Goodwill and other intangible asset impairment charges of $16.8 million for the UNIACC subsidiary of Apollo Global ($14.4 million net of the portion attributable to noncontrolling interests). The Company did not record a tax benefit associated with the goodwill impairment as it is not deductible for tax purposes.

• Restructuring and other charges of $5.6 million associated with the Company’s real estate rationalization plan.

Results for the first quarter of fiscal 2011 included the following:

• Restructuring and other charges of $3.8 million associated with a strategic reduction in force, primarily at University of Phoenix.

• A $0.9 million charge representing an accrual for incremental post-judgment interest related to the Policeman’s Annuity and Benefit Fund of Chicago securities class action lawsuit.

Excluding the items noted above, income from continuing operations attributable to Apollo Group for the three months ended November 30, 2011, was $167.2 million, or $1.28 per share, compared to income from continuing operations attributable to Apollo Group of $238.9 million, or $1.63 per share for the three months ended November 30, 2010. (See the reconciliation of GAAP financial information to non-GAAP financial information in the tables section of this press release.)

Operating Expenses

Instructional and student advisory expenses increased by $1.0 million, or 0.2%, to $456.8 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010, which represents a 450 basis point increase as a percentage of net revenue. The increase in expense was primarily related to the Company’s various initiatives, including technology, to more effectively support students and their educational outcomes. The expense associated with these initiatives includes costs incurred by Carnegie Learning and integration costs following this acquisition. Additionally, although the Company expects to realize future savings from its real estate rationalization plan, rent expense increased primarily due to the sale-leaseback of its principal office buildings in fiscal 2011.

Marketing expenses decreased by $0.3 million, or 0.2%, to $165.8 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010, which represents a 160 basis point increase as a percentage of net revenue. The increase as a percentage of net revenue was primarily the result of the decline in revenue, as well as an increase in costs principally attributable to efforts to establish relationships with select employers.

Admissions advisory expenses decreased by $12.4 million, or 10.9%, to $101.4 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010. As a percentage of net revenue, admissions advisory was consistent. The decrease in expense was a result of lower admissions advisory headcount which was partially attributable to a strategic reduction in force near the end of the first quarter of fiscal 2011. The decrease was partially offset by higher average employee compensation costs.

General and administrative expenses decreased by $4.9 million, or 5.8%, to $79.9 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010, which represents a 40 basis point increase as a percentage of net revenue. The increase as a percentage of net revenue was primarily due to an increase in share-based compensation expense.

Depreciation and amortization increased by $9.2 million, or 24.8%, to $46.3 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010, which represents a 110 basis point increase as a percentage of net revenue. The increase was principally attributable to increased capital expenditures in recent years related to information technology and $2.7 million of intangible asset amortization in the first quarter of fiscal 2012 as a result of the Carnegie Learning acquisition. The increase was partially offset by a decrease in amortization of BPP intangible assets and the absence of depreciation of the Company’s principal office buildings for which the Company entered into a sale-leaseback arrangement in fiscal 2011.

The provision for uncollectible accounts receivable (“bad debt expense”) decreased by $15.3 million, or 26.9%, to $41.6 million for the three months ended November 30, 2011, compared to the three months ended November 30, 2010, which represents an 80 basis point decrease as a percentage of net revenue. The decrease was primarily attributable to reductions in gross accounts receivable principally resulting from decreases in University of Phoenix Degreed Enrollment, a shift in the mix of students from Associates to Bachelors degree level programs, and the full implementation of University Orientation, which the Company believes has improved the student retention rate. Improved collection rates at University of Phoenix, which were favorably impacted by an initiative to address the Company’s oldest receivables in fiscal 2011, also contributed to the decrease.

Financial and Operating Metrics

Below are Apollo Group’s unaudited financial data and operating metrics for the first quarter of fiscal 2012 versus the prior year period.

	Q1 2012			Q1 2011
Revenues (in thousands)
Degree Seeking Gross Revenues(1)	$	1,108,616		$	1,251,810
Less: Discounts and other		(62,734	)		(64,154	)
Degree Seeking Net Revenues(1)		1,045,882			1,187,656
Non-degree Seeking Revenues(2)		8,577			9,493
Other, net of discounts(3)		124,231			129,286
	$	1,178,690		$	1,326,435
Revenue by Degree Type (in thousands)(1)
Associates	$	313,598		$	432,894
Bachelors		592,910			582,371
Masters		178,445			212,316
Doctoral		23,663			24,229
Less: Discounts and other		(62,734	)		(64,154	)
	$	1,045,882		$	1,187,656
Degreed Enrollment (rounded to hundreds)(4)
Associates		130,300			177,200
Bachelors		182,500			187,300
Masters		52,900			66,000
Doctoral		7,400			7,600
		373,100			438,100
Degree Seeking Gross Revenues per Degreed Enrollment(1), (4)
Associates	$	2,407		$	2,443
Bachelors		3,249			3,109
Masters		3,373			3,217
Doctoral		3,198			3,188
All degrees (after discounts)	$	2,803		$	2,711
New Degreed Enrollment (rounded to hundreds)(5)
Associates		27,800			24,000
Bachelors		26,100			22,800
Masters		8,900			8,900
Doctoral		900			800
		63,700			56,500

⁽¹⁾  Represents revenue from tuition and other fees for students enrolled in University of Phoenix degree programs. Also includes revenue from tuition and other fees for students participating in University of Phoenix certificate programs of at least 18 credits in length with some course applicability into a related degree program.

⁽²⁾  Represents revenue from tuition and other fees for students participating in University of Phoenix certificate programs less than 18 credits in length, certificate programs with no applicability into a related degree program, single course and continuing education courses.

⁽³⁾  Represents revenues from IPD, CFFP, Apollo Global - BPP, Apollo Global - Other and Other.

⁽⁴⁾  Represents:

- students enrolled in a University of Phoenix degree program who attended a credit bearing course during the quarter and had not graduated as of the end of the quarter;

- students who previously graduated from one degree program and started a new degree program in the quarter (for example, a graduate of the associate’s degree program returns for a bachelor’s degree or a bachelor’s degree graduate returns for a master’s degree); and

- students participating in certain certificate programs of at least 18 credits with some course applicability into a related degree program.

⁽⁵⁾  Represents:

- new students and students who have been out of attendance for more than 12 months who enroll in a University of Phoenix degree program and start a credit bearing course in the quarter;

- students who have previously graduated from a degree program and start a new degree program in the quarter; and

- students who commence participation in certain certificate programs of at least 18 credits with some course applicability into a related degree program.

Unaudited Balance Sheet

As of November 30, 2011, the Company’s cash and cash equivalents, excluding restricted cash, totaled $1,201.0 million, compared to $1,571.7 million as of August 31, 2011. The decrease was primarily attributable to repayments on borrowings, share repurchases, the purchase of Carnegie Learning and capital expenditures, partially offset by cash generated from operations.

At November 30, 2011, accounts receivable increased to $250.9 million from $215.6 million at August 31, 2011. Excluding accounts receivable and the associated net revenue for Apollo Global, the Company’s days sales outstanding (“DSO”) was 24 days at November 30, 2011, compared to 23 days at August 31, 2011, and 26 days at November 30, 2010. The decrease in DSO versus a year ago was primarily attributable to reductions in gross accounts receivable principally resulting from decreases in University of Phoenix Degreed Enrollment, a shift in the mix of students from Associates to Bachelors degree level programs and the full implementation of University Orientation, which the Company believes has improved the student retention rate. Improved collection rates at University of Phoenix, which were favorably impacted by an initiative to address the Company’s oldest receivables in fiscal 2011, also contributed to the decrease.

Total debt outstanding (including short-term borrowings and the current portion of long-term debt) decreased by $484.7 million to $114.3 million at November 30, 2011, from $599.0 million at August 31, 2011. The decrease is due to the repayment of the borrowings on the Company’s $500 million credit facility.

Share Repurchases

The Company repurchased approximately 1.7 million shares of its Class A common stock at a weighted average purchase price of $45.84 per share for a total expenditure of $78.2 million during the three months ended November 30, 2011. Subsequent to quarter-end and through December 31, 2011, the Company repurchased an additional 2.6 million shares of Class A common stock at a weighted average purchase price of $49.71 per share for a total expenditure of $128.3 million. As of December 31, 2011, approximately $293.5 million remained available under the Company’s current share repurchase authorization.

Business Outlook

The Company offers the following commentary regarding the outlook for fiscal 2012 based on the business trends observed during the first quarter of fiscal 2012, as well as management’s current expectations of future trends.

• Consolidated net revenue of $4.1-$4.3 billion; and

• Operating income, excluding the impact of special items, of $655-$750 million.

Conference Call Information

The Company will hold a conference call to discuss these earnings results at 5:00 p.m. Eastern, 3:00 p.m. Phoenix time, today, Thursday, January 5, 2012. The call may be accessed by dialing (877) 292-6888 (domestic) or (973) 200-3381 (international) and entering the conference ID number 35168260. 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 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering the conference ID number 35168260 until January 19, 2012.

About Apollo Group, Inc.

Apollo Group, Inc. is one of the world’s largest private education providers and has been in the education business for more than 35 years. The Company offers innovative and distinctive educational programs and services both online and on-campus at the undergraduate, master’s and doctoral levels through its subsidiaries: University of Phoenix, Apollo Global, Institute for Professional Development and College for Financial Planning. The Company’s programs and services are provided in 40 states and the District of Columbia; Puerto Rico; Latin America; and Europe, as well as online throughout the world.

For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990-APOL or visit the Company’s website at www.apollogrp.edu.

Forward-Looking Statements Safe Harbor

Statements about Apollo Group and its business in this release which are not statements of historical fact, including statements regarding Apollo Group’s future strategy and plans and commentary regarding future results of operations and 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 plans implemented and actual results achieved may differ materially from those set forth in or implied by such statements due to various factors, including without limitation (i) changes in the overall U.S. or global economy, (ii) changes in enrollment or student mix, (iii) the impact of the Company’s initiatives to improve the student experience, (iv) changes in law or regulation affecting the Company’s eligibility to participate in or the manner in which it participates in U.S. federal student financial aid programs, (v) changes in the Company’s business necessary to remain in compliance with existing, new, or amended U.S. federal student financial aid program regulations, including the so-called 90/10 Rule and the limitations on cohort default rates, and to remain in compliance with the accrediting criteria of the relevant accrediting bodies, and (vi) the impact of increased competition from traditional public universities and proprietary educational institutions. For a discussion of the various factors that may cause actual plans implemented and actual results achieved to differ materially from those set forth in the forward-looking statements, please refer to the risk factors and other disclosures contained in Apollo Group’s Form 10-K for fiscal year 2011 and subsequent Forms 10-Q, and other filings with the Securities and Exchange Commission, all of which are available on the Company’s website at www.apollogrp.edu.

Use of Non-GAAP Financial Information

This press release and the related conference call contain non-GAAP financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management uses, and chooses to disclose to investors, these non-GAAP financial measures because (i) such measures provide an additional analytical tool to clarify the Company’s results from operations and help to identify underlying trends in its results of operations; (ii) as to the non-GAAP earnings measures, such measures help compare the Company’s performance on a

consistent basis across time periods; and (iii) these non-GAAP measures are employed by the Company’s management in its own evaluation of performance and are utilized in financial and operational decision-making processes, such as budgeting and forecasting. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently, limiting their usefulness as a comparative measure across companies.

Apollo Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

	As of
($ in thousands)	November 30, 2011			August 31, 2011
ASSETS:
Current assets
Cash and cash equivalents	$	1,201,037		$	1,571,664
Restricted cash and cash equivalents		377,092			379,407
Accounts receivable, net		250,895			215,567
Deferred tax assets, current portion		116,499			124,137
Prepaid taxes		—			35,629
Other current assets		41,208			44,382
Total current assets		1,986,731			2,370,786
Property and equipment, net		549,364			553,027
Marketable securities		5,946			5,946
Goodwill		149,639			133,297
Intangible assets, net		169,568			121,117
Deferred tax assets, less current portion		68,100			70,949
Other assets		24,303			14,584
Total assets	$	2,953,651		$	3,269,706
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities
Short-term borrowings and current portion of long-term debt	$	27,598		$	419,318
Accounts payable		65,963			69,551
Accrued liabilities		379,771			398,806
Income taxes payable		79,888			—
Student deposits		399,803			424,045
Deferred revenue		314,919			293,436
Other current liabilities		50,420			50,131
Total current liabilities		1,318,362			1,655,287
Long-term debt		86,739			179,691
Deferred tax liabilities		25,055			26,400
Other long-term liabilities		199,178			164,339
Total liabilities		1,629,334			2,025,717
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		79,356			68,724
Apollo Group Class A treasury stock, at cost		(3,194,406	)		(3,125,175	)
Retained earnings		4,469,786			4,320,472
Accumulated other comprehensive loss		(31,124	)		(23,761	)
Total Apollo shareholders’ equity		1,323,716			1,240,364
Noncontrolling interests		601			3,625
Total equity		1,324,317			1,243,989
Total liabilities and shareholders’ equity	$	2,953,651		$	3,269,706

Apollo Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

	Three Months Ended November 30,						% of Revenue
	2011			2010			2011			2010
(In thousands, except per share data)
Net revenue	$	1,178,690		$	1,326,435			100.0	%		100.0	%
Costs and expenses:
Instructional and student advisory		456,797			455,812			38.8	%		34.3	%
Marketing		165,845			166,143			14.1	%		12.5	%
Admissions advisory		101,388			113,752			8.6	%		8.6	%
General and administrative		79,944			84,874			6.8	%		6.4	%
Depreciation and amortization		46,298			37,102			3.9	%		2.8	%
Provision for uncollectible accounts receivable		41,583			56,909			3.5	%		4.3	%
Goodwill and other intangibles impairment		16,788			—			1.4	%		—	%
Restructuring and other charges		5,562			3,846			0.5	%		0.3	%
Litigation charge		—			881			—	%		0.1	%
Total costs and expenses		914,205			919,319			77.6	%		69.3	%
Operating income		264,485			407,116			22.4	%		30.7	%
Interest income		589			983			0.1	%		0.1	%
Interest expense		(1,999	)		(2,170	)		(0.2	)%		(0.2	)%
Other, net		141			(54	)		—	%		—	%
Income from continuing operations before income taxes		263,216			405,875			22.3	%		30.6	%
Provision for income taxes		(115,932	)		(169,579	)		(9.8	)%		(12.8	)%
Income from continuing operations		147,284			236,296			12.5	%		17.8	%
Loss from discontinued operations, net of tax		—			(628	)		—	%		—	%
Net income		147,284			235,668			12.5	%		17.8	%
Net loss (income) attributable to noncontrolling interests		2,030			(255	)		0.2	%		(0.1	)%
Net income attributable to Apollo	$	149,314		$	235,413			12.7	%		17.7	%
Earnings per share — Basic:
Continuing operations attributable to Apollo	$	1.15		$	1.61
Discontinued operations attributable to Apollo		—			—
Basic income per share attributable to Apollo	$	1.15		$	1.61
Earnings per share — Diluted:
Continuing operations attributable to Apollo	$	1.14		$	1.61
Discontinued operations attributable to Apollo		—			—
Diluted income per share attributable to Apollo	$	1.14		$	1.61
Basic weighted average shares outstanding		130,318			146,352
Diluted weighted average shares outstanding		130,874			146,663

Apollo Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows From Continuing and Discontinued Operations

(Unaudited)

	Three Months Ended November 30,
	2011			2010
($ in thousands)
Cash flows provided by (used in) operating activities:
Net income	$	147,284		$	235,668
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		20,892			15,032
Excess tax benefits from share-based compensation		(372	)		(69	)
Depreciation and amortization		46,298			37,102
Amortization of lease incentives		(3,789	)		(3,531	)
Amortization of deferred gains on sale-leasebacks		(700	)		(411	)
Goodwill and other intangibles impairment		16,788			—
Non-cash foreign currency gain, net		(397	)		(5	)
Provision for uncollectible accounts receivable		41,583			56,909
Litigation charge		—			881
Restructuring and other charges		5,562			3,846
Deferred income taxes		(1,747	)		(2,379	)
Changes in assets and liabilities, excluding the impact of acquisition:
Restricted cash and cash equivalents		2,315			(28,275	)
Accounts receivable		(75,698	)		(40,333	)
Other assets		(6,105	)		(12,788	)
Accounts payable and accrued liabilities		(20,160	)		(24,500	)
Income taxes payable		115,412			142,219
Student deposits		(22,272	)		(6,301	)
Deferred revenue		22,340			(3,116	)
Other liabilities		14,008			15,727
Net cash provided by operating activities		301,242			385,676
Cash flows provided by (used in) investing activities:
Additions to property and equipment		(23,585	)		(50,640	)
Acquisition, net of cash acquired		(73,736	)		—
Net cash used in investing activities		(97,321	)		(50,640	)
Cash flows provided by (used in) financing activities:
Payments on borrowings		(496,322	)		(406,283	)
Proceeds from borrowings		—			1,799
Apollo Group Class A common stock purchased for treasury		(80,682	)		(176,931	)
Issuance of Apollo Group Class A common stock		2,575			1,847
Excess tax benefits from share-based compensation		372			69
Net cash used in financing activities		(574,057	)		(579,499	)
Exchange rate effect on cash and cash equivalents		(491	)		184
Net decrease in cash and cash equivalents		(370,627	)		(244,279	)
Cash and cash equivalents, beginning of year		1,571,664			1,284,769
Cash and cash equivalents, end of year	$	1,201,037		$	1,040,490
Supplemental disclosure of cash flow and non-cash information
Cash paid for income taxes, net of refunds	$	1,316		$	17,080
Cash paid for interest	$	2,344		$	3,179
Credits received for tenant improvements	$	19,941		$	5,012
Acquired technology	$	14,389		$	—
Restricted stock units vested and released	$	7,125		$	1,409
Capital lease additions	$	6,668		$	—

Apollo Group, Inc. and Subsidiaries

Reconciliation of GAAP financial information to non-GAAP financial information

(Unaudited)

	Three Months Ended November 30,
	2011			2010
(In thousands, except per share data)
Net income attributable to Apollo, as reported	$	149,314		$	235,413
Loss from discontinued operations, net of tax		—			(628	)
Income from continuing operations attributable to Apollo		149,314			236,041
Reconciling items:
Goodwill and other intangibles impairment, net of noncontrolling interest(1)		14,370			—
Restructuring and other charges(2)		5,562			3,846
Litigation charge(3)		—			881
		19,932			4,727
Less: tax effects		(2,091	)		(1,871	)
Income from continuing operations attributable to Apollo, adjusted to exclude special items	$	167,155		$	238,897
Diluted income per share from continuing operations attributable to Apollo, as reported	$	1.14		$	1.61
Diluted income per share from continuing operations attributable to Apollo, adjusted to exclude special items	$	1.28		$	1.63
Diluted weighted average shares outstanding		130,874			146,663

⁽¹⁾  The charges for the three months ended November 30, 2011, represent impairments of UNIACC’s goodwill and other intangibles, net of noncontrolling interest, with no income tax benefit as UNIACC’s goodwill and other intangibles are not deductible for tax purposes.

⁽²⁾ Restructuring and other charges for the three months ended November 30, 2011, represents charges associated with the Company’s real estate rationalization plan. The charges for the three months ended November 30, 2010, represent charges associated with a strategic reduction in force at University of Phoenix.

⁽³⁾  The charges for the three months ended November 30, 2010, represent estimated losses associated with the Securities Class Action (Policeman’s Annuity and Benefit Fund of Chicago).

Investor Relations Contacts:

Beth Coronelli ~ (312) 660-2059 ~ beth.coronelli@apollogrp.edu

Jeremy Davis ~ (312) 660-2071 ~ jeremy.davis@apollogrp.edu

Media Contact:

Media Relations Hotline ~ (602) 254-0086 ~ media@apollogrp.edu

EX-99.2

Exhibit 99.2

Apollo Group, Inc. Announces Retirement Timetable of Co-CEO Charles B. Edelstein

PHOENIX—January 5, 2012—Apollo Group, Inc. (Nasdaq: APOL) today announced that Charles B. “Chas” Edelstein will retire as co-Chief Executive Officer and director of the company on August 26, 2012. Following his retirement as co-CEO, Mr. Edelstein will serve the company in a part-time advisory capacity through February 2013.

Gregory W. Cappelli will assume all duties and responsibilities as Chief Executive Officer of Apollo Group, upon Mr. Edelstein’s retirement later this year. Mr. Edelstein and Mr. Cappelli have served together as co-CEOs of Apollo Group since 2009, jointly managing the company’s business and leading the firm’s executive management team.

“Helping to lead Apollo Group through a critical chapter in the company’s history has been my most rewarding professional accomplishment,” said Edelstein. “I am immensely proud of the world-class leadership team Greg and I have built over the past three years. Together we launched a cutting-edge technology learning platform, rolled out industry-leading student protection measures and implemented an aggressive corporate diversification and development strategy. I’m gratified to know that these efforts have made such a positive impact on the company.”

“Chas has made a series of tremendously valuable contributions during his tenure as co-CEO,” said Cappelli. “Chas and I have worked together with our team to help build a clear strategic roadmap for the company, to differentiate and diversify our educational portfolio, and to make significant improvements to the student experience. I personally thank Chas for his leadership, dedication, and most importantly his friendship to so many of us at Apollo Group.”

About Apollo Group, Inc.

Apollo Group, Inc. is one of the world’s largest private education providers and has been in the education business for more than 35 years. The Company offers innovative and distinctive educational programs and services both online and on-campus at the undergraduate, master’s and doctoral levels through its subsidiaries: University of Phoenix, Apollo Global, Institute for Professional Development and College for Financial Planning. The Company’s programs and services are provided in 40 states and the District of Columbia; Puerto Rico; Latin America; and Europe, as well as online throughout the world.

For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990-APOL or visit the Company’s website at http://www.apollogrp.edu.

Source: Apollo Group, Inc.

Media Contact:

Apollo Group Media Hotline, 602-254-0086 // media@apollogrp.edu

Investor Contacts:

Beth Coronelli, 312-660-2059 // beth.coronelli@apollogrp.edu

Jeremy Davis, 312-660-2071 // jeremy.davis@apollogrp.edu