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Apollo Group, Inc. Reports Fiscal 2012 Fourth Quarter And Year-End Results

Marketing increased $9.7 million, or 5.7%, to $180.3 million in the fourth quarter of fiscal year 2012 compared to the fourth quarter of fiscal year 2011. The increase was principally attributable to higher employee compensation and other costs, including expense related to building employer relationships, partially offset by lower advertising costs.

Admissions advisory decreased $13.6 million, or 13.7%, to $85.9 million in the fourth quarter of fiscal year 2012 compared to the fourth quarter of fiscal year 2011. The decrease was principally attributable to lower admissions advisory headcount, partially offset by higher average employee compensation costs.

General and administrative decreased $6.2 million, or 6.2%, to $92.3 million in the fourth quarter of fiscal year 2012 compared to the fourth quarter of fiscal year 2011.

Depreciation and amortization increased $3.2 million, or 7.7%, to $44.7 million in the fourth quarter of fiscal year 2012 compared to the fourth quarter of fiscal year 2011. The increase was principally attributable to higher intangible asset amortization as a result of acquiring Carnegie Learning in the first quarter of fiscal year 2012 and increased capital expenditures and capital leases in recent years primarily related to information technology.

Provision for uncollectible accounts receivable (“bad debt expense”) decreased $0.9 million, or 2.3%, to $38.7 million in the fourth quarter of fiscal year 2012 compared to the fourth quarter of fiscal year 2011. The expense decrease was primarily attributable to reductions in gross accounts receivable principally resulting from decreases in University of Phoenix Degreed Enrollment.

Financial and Operating Metrics

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

      Q4 2012     Q4 2011
Revenues (in thousands)
Degree Seeking Gross Revenues (1) $ 972,079 $ 1,099,572
Less: Discounts and other (62,613 ) (63,486 )
Degree Seeking Net Revenues (1) 909,466 1,036,086
Non-degree Seeking Revenues (2) 12,563 12,730
Other, net of discounts (3) 74,468   71,404  
$ 996,497   $ 1,120,220  
 
Revenue by Degree Type (in thousands) (1)
Associate’s $ 237,737 $ 320,985
Bachelor’s 560,406 580,588
Master’s 152,205 174,451
Doctoral 21,731 23,548
Less: Discounts and other (62,613 ) (63,486 )
$ 909,466   $ 1,036,086  
 
Degreed Enrollment (rounded to hundreds) (4)
Associate’s 102,600 136,300
Bachelor’s 172,600 183,100
Master’s 46,400 54,000
Doctoral 6,800   7,400  
328,400   380,800  
 
Degree Seeking Gross Revenues per Degreed Enrollment (1), (4)
Associate’s $ 2,317 $ 2,355
Bachelor’s 3,247 3,171
Master’s 3,280 3,231
Doctoral 3,196 3,182
All degrees (after discounts) $ 2,769 $ 2,721
 
New Degreed Enrollment (rounded to hundreds) (5)
Associate’s 20,400 24,200
Bachelor’s 23,500 27,200
Master’s 8,200 9,000
Doctoral 700   800  
52,800   61,200  
 
(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 Apollo Global 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 2012 Fiscal Year Results of Operations

Net revenue for fiscal year 2012 totaled $4.3 billion, which represents a 9.7% decrease compared to fiscal year 2011. The decrease was primarily attributable to University of Phoenix’s 10.2% decrease in net revenue principally due to lower University of Phoenix enrollment, partially offset by selective tuition price and other fee changes. In fiscal year 2012, University of Phoenix's Average Degreed Enrollment decreased 14.8% as compared to fiscal year 2011.

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