• Revenue increases approximately 14% year-over-year
• Total Degreed Enrollment increases 11% year-over-year
• Bad Debt, as a percentage of net revenue, declines versus a year ago
• Board of Directors authorizes share repurchases of up to $500 million

Apollo Group, Inc. (Nasdaq: APOL) (“Apollo Group,” “Apollo” or “the Company”) today reported unaudited financial results for the three and nine months ended May 31, 2008.

Unaudited Third Quarter of Fiscal 2008 Results of Operations

Consolidated revenues for the three months ended May 31, 2008, totaled $835.2 million, which represents a 13.9% increase over the third quarter of fiscal 2007. Total Degreed Enrollment grew by 11.0% year-over-year to 345,300. The Company reported net income for the three months ended May 31, 2008, of $139.1 million, or $0.85 per share (163.8 million weighted average diluted shares outstanding), compared to net income of $131.4 million, or $0.75 per share (174.6 million weighted average diluted shares outstanding) for the three months ended May 31, 2007. During the third quarter of fiscal 2008, the Company repurchased approximately 9.8 million shares of its common stock at a weighted average purchase price of approximately $46 for a total expenditure of $454 million. On June 27, 2008, the Board of Directors authorized an increase of the share repurchase program to an aggregate of $500 million.

Before giving effect to a special item of $1.6 million due to the securities class action verdict in the third quarter of fiscal 2008, and to special items related to the stock option investigation and restatement costs of $7.6 million in the third quarter of fiscal 2007, net income was $140.1 million, or $0.85 per share in the third quarter of fiscal 2008, as compared to net income of $136.0 million, or $0.78 per share in the third quarter of fiscal 2007.

Excluding share-based compensation expense of $14.4 million and the special item related to the securities class action verdict of $1.6 million in the third quarter of fiscal 2008, and share-based compensation expense of $8.9 million and stock option investigation and restatement costs of $7.6 million in the third quarter of fiscal 2007, net income would have been $148.8 million, or $0.91 per share in the third quarter of fiscal 2008, as compared to net income of $141.4 million, or $0.81 per share in the third quarter of fiscal 2007.

(See the reconciliation of Generally Accepted Accounting Principles (“GAAP”) financial information to non-GAAP financial information in the tables section of this press release.)

“We reported another quarter of solid revenue and enrollment growth, and importantly, we experienced improvement in the growth rate of New Degreed Enrollments as compared to last quarter,” said Joe D’Amico, President, Chief Financial Officer and Treasurer of Apollo Group. “While the overall cost to acquire a student has increased versus a year ago, we still believe that we are on the right track by bringing our marketing intelligence in-house with Aptimus and that the investments we’re making today will lower our student acquisition costs over time and help us to better communicate our brands.”

Greg Cappelli, Executive Vice President, Global Strategy and Assistant to the Executive Chairman added, “We continue to invest in new and existing areas including retention, new programs, resource centers and marketing, where we can leverage Apollo’s infrastructure and experience. We are also pleased to announce that Insight Schools will start the 2008 school year with 11 schools in 10 states. The virtual high school market is strong and we are excited about their prospects. We recently announced the formation of Meritus University, a new Canadian degree-granting institution which will begin enrolling students this Fall. Lastly, during the quarter we closed Apollo Global’s first transaction, the acquisition of Chilean-based UNIACC. Apollo Global has many solid opportunities to pursue abroad and their talented team is working diligently on these efforts.”

Instructional costs and services increased by $26.6 million, or 8.3% to $347.6 million for the three months ended May 31, 2008, from $321.0 million in the three months ended May 31, 2007. As a percentage of net revenue, instructional costs and services declined to 41.6% versus 43.8% in the prior year quarter, primarily as a result of decreases as a percentage of net revenue, in bad debt expense and classroom lease expenses and depreciation. These decreases were partially offset by an increase, as a percentage of net revenue, in employee compensation and related expenses which is due, in part, to investments in Insight Schools and increases to the Company’s compensation rates for academic and financial counselors.

As previously reported, during the first quarter of fiscal 2008, the Company reviewed the components of bad debt expense and identified certain items that should have been classified as discounts or refunds (reduction of tuition revenue) rather than bad debt expense. No reclassification was made for prior periods as the amounts were not material to prior period financial statements and had no effect on reported net income. Had the Company reclassified these items in the third quarter of fiscal 2007, the amounts reported for net revenue and bad debt expense would have been $5.0 million lower. On a comparable basis, bad debt expense, as a percentage of net revenue, decreased approximately 160 basis points from 4.0% in the third quarter of fiscal 2007 to 2.4% in the third quarter of fiscal 2008. This decrease is primarily due to the continued focus on front-end collections as well as improvements in student retention rates. Retention and bad debt expense can vary seasonally, and as a result, bad debt expense as a percentage of net revenue may fluctuate from quarter-to-quarter.

Selling and promotional expenses increased by $40.7 million, or 25.0%, to $203.6 million for the three months ended May 31, 2008, from $162.9 million in the three months ended May 31, 2007. As a percentage of net revenue, selling and promotional expenses increased to 24.4%, from 22.2% in the prior year’s third quarter. This was a result of an increase, as a percentage of net revenue, in enrollment counselors’ compensation and related expenses, advertising and other selling and promotional expenses. Included in other selling and promotional costs are expenses related to Aptimus which the Company acquired in the first quarter of 2008. The increase represents investments made to drive and support future growth of New Degreed Enrollments. Selling and promotional expenses per New Degreed Enrollment increased versus a year ago, and this trend may continue into the near future; however, the Company believes its efforts and investments will help it reduce these costs over the long-term.

General and administrative (“G&A”) expenses for the three months ended May 31, 2008, increased by $14.8 million, or 32.1%, to $60.9 million, from $46.1 million in the three months ended May 31, 2007. As reported, G&A, as a percentage of net revenue, increased to 7.3% in the third quarter of 2008, versus 6.3% in the comparable period a year ago. Excluding special items in the third quarter of fiscal 2007, primarily related to the stock option investigation and restatement costs of $7.6 million, G&A expenses were $38.5 million, or 5.2% of net revenue, for the three months ended May 31, 2007. The increase to 7.3%, as a percentage of net revenue, in the third quarter of 2008, is mainly attributable to increases, as a percentage of net revenue, in salary and related payroll costs due to higher employee headcount, increased share-based compensation expense and higher legal fees.

Financial and Operating Metrics

Below are Apollo Group’s unaudited financial data and operating metrics for fiscal 2008.

Unaudited First Nine Months of Fiscal 2008 Results of Operations

Consolidated revenues for the nine months ended May 31, 2008, were $2.3 billion, a 14.9% increase over the first nine months of fiscal 2007. Average Degreed Enrollment grew by 11.0% for the nine months ended May 31, 2008 as compared to the nine months ended May 31, 2007.

The Company reported net income of $246.9 million, or $1.47 per share (167.7 million weighted average diluted shares outstanding), and $305.7 million, or $1.75 per share (174.6 million weighted average diluted shares outstanding), for the nine months ended May 31, 2008, and May 31, 2007, respectively.

Before giving effect to the securities class action litigation charge and interest of $170.0 million in the nine months ended May 31, 2008, and to special items related to the stock option investigation and restatement costs of $27.8 million in the nine months ended May 31, 2007, net income was $350.2 million, or $2.09 per share in the first nine months of fiscal 2008, as compared to net income of $322.5 million, or $1.85 per share in the first nine months of fiscal 2007.

Excluding total share-based compensation of $49.5 million as well as the securities litigation charges in the first nine months of fiscal 2008, and share-based compensation expense of $40.8 million and stock option investigation and restatement costs of $15.7 million (net of the $12.1 million stock option modification included in share-based compensation) in the first nine months of fiscal 2007, net income would have been $380.3 million, or $2.27 per share in the first nine months of fiscal 2008, as compared to net income of $339.8 million, or $1.95 per share in the first nine months of fiscal 2007.

(See the reconciliation of GAAP financial information to non-GAAP financial information in the tables section of this press release.)

Unaudited Balance Sheet

As of May 31, 2008, the Company’s cash, cash equivalents, and marketable securities, excluding restricted cash, totaled $302.5 million as compared to $392.7 million as of August 31, 2007. Also excluded from this balance at May 31, 2008, is $95.0 million of cash pledged as collateral for a bond posted by the Company in connection with the securities class action verdict announced during the fiscal second quarter.

Restricted cash and student deposits increased approximately $64.5 million and $58.7 million since August 31, 2008, respectively. These increases were primarily due to increased student enrollment.

At May 31, 2008, accounts receivable declined to $184.2 million from $190.9 million at August 31, 2007, resulting in days sales outstanding (“DSO”) declining to 26 days for the third quarter as compared to 36 days in the third quarter of 2007, and from 38 days at August 31, 2007. The decrease in DSO is primarily due to improvements in processing time for the receipt of student financial aid, the write-off of approximately $28.4 million in previously reserved uncollectible accounts receivable during the quarter and seasonality. As a result of seasonality, DSO may fluctuate from quarter-to-quarter.

Goodwill increased by $36.4 million to $66.0 million at May 31, 2008, from $29.6 million at August 31, 2007, primarily due to the acquisition of Aptimus, Inc. in the first quarter of 2008.

Intangible assets, net, increased by $19.5 million to $21.7 million at May 31, 2008, from $2.2 million at August 31, 2007, primarily due to the acquisition of Aptimus, Inc. in the first quarter of fiscal 2008 and Apollo Global’s acquisition of UNIACC in the third quarter of fiscal 2008.

Deferred tax assets increased by $77.4 million to $208.4 million at May 31, 2008, from $131.0 million at August 31, 2007, mainly due to the accounting for the tax effects of the securities litigation charge.

Long-term liabilities (including current portion) increased by $240.8 million to $333.8 million at May 31, 2008, from $93.0 million at August 31, 2007, primarily due to the securities litigation charge and the reclassification from income taxes payable of approximately $53.0 million related to the adoption of FIN 48, Accounting for Uncertain Tax Positions.

Deferred revenue at May 31, 2008, increased to $206.0 million from $167.3 million at August 31, 2007, and increased from $150.0 million at May 31, 2007. The increase from the prior year quarter is principally due to increased student enrollment.

Conference Call Information

The Company will hold a conference call to discuss these earnings results at 5:00 PM Eastern, 2:00 PM Phoenix time, today, Tuesday, July 1, 2008. The call may be accessed by dialing (877) 292-6888 (domestic) or (706) 634-1393 (international). The conference ID number is 46892453. 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 at (706) 645-9291 (conf. ID # 46892453) until July 11, 2008.

About Apollo Group, Inc.

Apollo Group, Inc. has been an education provider for more than 30 years, providing academic access and opportunity to students through its subsidiaries, University of Phoenix, Institute for Professional Development, College for Financial Planning, Western International University, Meritus University, Insight Schools and Apollo Global. It also owns Aptimus, a provider of innovative digital media solutions. The Company's distinctive educational programs and services are provided at the high school, college and graduate levels in 40 states (as of May 31, 2008) and the District of Columbia; Puerto Rico; Alberta and British Columbia, Canada; Mexico; Chile; and the Netherlands, 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 Safe Harbor

Statements in this press release regarding Apollo Group’s business outlook, future financial and operating results, Degreed Enrollment and New Degreed Enrollments, and overall future 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 results may differ materially from those projected in such statements due to various factors. For a discussion of the various factors that may cause actual results to differ materially from those projected, please refer to the risk factors and other disclosures contained in Apollo Group’s previously filed Form 10-K, Forms 10-Q, and other filings with the Securities and Exchange Commission.