Apollo Group

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Apollo Group, Inc.
TypePublic
Traded asNASDAQAPOL
S&P 400 Component
IndustryFor-profit education
Founded1973
Founder(s)John Sperling
HeadquartersPhoenix, Arizona, U.S.
Key peoplePeter Sperling
(Chairman)
Gregory Cappelli
(CEO)
Joseph D’Amico
(President)
RevenueDecrease $ 3.6 billion (FY 2013)[1]
Operating incomeDecrease $ 427 million (FY 2013)[1]
Net incomeDecrease $ 249 million (FY 2013)[1]
Total assetsDecrease $ 3.0 billion (FY 2013)[1]
Total equityIncrease $ 1.1 billion (FY 2013)[1]
Employees44,000 (part and full time) (August 2013)[1]
Websiteapollo.edu
 
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Apollo Group, Inc.
TypePublic
Traded asNASDAQAPOL
S&P 400 Component
IndustryFor-profit education
Founded1973
Founder(s)John Sperling
HeadquartersPhoenix, Arizona, U.S.
Key peoplePeter Sperling
(Chairman)
Gregory Cappelli
(CEO)
Joseph D’Amico
(President)
RevenueDecrease $ 3.6 billion (FY 2013)[1]
Operating incomeDecrease $ 427 million (FY 2013)[1]
Net incomeDecrease $ 249 million (FY 2013)[1]
Total assetsDecrease $ 3.0 billion (FY 2013)[1]
Total equityIncrease $ 1.1 billion (FY 2013)[1]
Employees44,000 (part and full time) (August 2013)[1]
Websiteapollo.edu

Apollo Group, Inc. is an S&P 400 corporation based in the South Phoenix area of Phoenix, Arizona. Apollo Group, Inc., through its subsidiaries, owns several for-profit educational institutions.

The company owns and operates four higher-learning institutions: the University of Phoenix, Western International University, Axia College, the College for Financial Planning, the Institute for Professional Development. It also owns Insight Schools (Online Public High Schools for Washington, Wisconsin, and other locations), and Olympus High School. As of November 2013, the combined enrollment of the all the universities was approximately 269,000 students.[1] Of these, nearly 90% attend the University of Phoenix, which Apollo describes as "the nation’s largest regionally accredited private university".[2]

Additionally, Apollo Group, Inc. is the owner of BPP Holdings in the United Kingdom. It joined forces with Carlyle Group for tactical investments in education to expand student base. Apollo also purchased UNIACC college in Santiago, Chile and ULA college in Mexico.[3]

Apollo Group stock has declined approximately 60% since its peak in May 2004, amid issues with its subsidiary University of Phoenix.

In October 2013, it was announced that Apollo Group would be laying off over 500 employees in addition to over a 1000 employees who had steadily been laid-off previously to deal with declining enrolment rates in its institutions.[4]

Founding[edit]

Apollo Education Group, Inc. was founded in 1973 by John Sperling.[5]

Financial performance[edit]

Corporate revenues for the year ending August 31, 2005 were $2.251 billion.[6]

As of 5 October 2011 Apollo Group had a market capitalization of $5.36 billion and a price-to-earnings ratio of 13.22.[7]

The Apollo Group announced quarterly results on 30 June 2011. The company reported $1.45 in earnings per share for the previous quarter, exceeding the Thomson Reuters estimate of $1.33 by $0.12. Apollo Group's quarterly revenue was down 7.6% on a year-over-year basis.[8]

In March 2011 the Apollo Group sold its corporate headquarters in Arizona and leased it back in order to raise $170 million in cash. The deal with Cole Real Estate Investments included a 20-year lease requiring Apollo to remain in the complex.[9]"In our view, it does not change the view of the company. Apollo isn't hungry for cash: It carries little debt but generates $4 billion in revenue and has $650 million in net income and $1.5 billion in cash on its balance sheet," commented Peter Wahlstrom of Morningstar, an investment-research company.[10]

However, the revenue of the company continued to fall: in the fiscal year ending in August 31, 2011, the net revenue was $4.7 billion; in 2012, $4.2 billion; in 2013, $3.6 billion.[1] The operating income during this period fell from $956 million in 2011, to $676 million in 2012, to $427 million in 2013. the company attributed this to a decline in enrollment, with degreed enrollment declining from 380,000 in 2011, to 328,000 in 2012, to 269,000 in 2013.[11] The company reported on Oct 23, 2013, that it would lay off 500 of its 15,000 non-faculty employees, the third of three successive annual layoffs.[11]

University of Phoenix[edit]

The University of Phoenix is a wholly owned subsidiary of the Apollo Group. The University of Phoenix is one of the largest higher education providers in North America.[12] The university has more than 200 campuses worldwide and confers degrees in over 100 degree programs at the associate, bachelor's, master's and doctoral levels.[13] The University of Phoenix has an open enrollment admission policy only requiring a high-school diploma, GED, or an equivalent qualification.[14] The school also provides associate or bachelor's degree applicants opportunity for advanced placement through its prior learning assessment, through which, aside from previous coursework, college credit can come from experiential learning essays, corporate training, and certificates or licenses.[15]

According to USA Today, the University of Phoenix's Detroit campus has a graduation rate of only 10%, but a student loan default rate of 26.4%.[16] In October 2013, Phoenix Business Journal reported that University of Phoenix would be laying off another round of employees including some management positions in academic affairs, after previously having laid off several employees in June.[17]

Apollo Global[edit]

Apollo Group has formed Apollo Global to manage and form subsidiaries, assets, and holdings overseas. As part of their first acquisitions, Apollo Global acquired Universidad de Artes, Ciencias y Comunicacion 'UNIACC' in Chile as well as the now defunct Meritus University in Canada.[18][19]

Apollo Global is a joint venture between the Apollo Group and the Carlyle Group. The two partners invested $1 billion in Apollo Global. The Apollo Group invested roughly $801 million and owns 80.1% of the new company. Carlyle invested $199 million and controls the remaining shares. Apollo Global replaced Apollo International.[20][21]

Apollo Global acquired BPP Holdings (which includes BPP University) in the United Kingdom for $607 million in July 2009.[22]

Western International University, formerly a direct subsidiary of the Apollo Group was transferred to Apollo Global in April 2010. The Apollo Group says that the transfer of Western International University to Apollo Global would allow it to offer its degrees internationally on a more successful basis. The transfer included a capital contribution from Apollo Global's minority shareholder, the Carlyle Group. Dr. Alan Drimmer, president of Western International University said, "We are looking forward to joining the global education network and leveraging the international expertise of both Apollo Global and Carlyle. We also look forward to the many collaboration opportunities with our sister-schools, all of which will help us achieve our mission of developing globally minded students."[23]

Other subsidiaries[edit]

BPP Holdings[edit]

BPP Holdings is a holding company of the United Kingdom-based provider of professional and academic education. The Company is divided into BPP Learning Media, BPP Professional Education and BPP University. BPP University is a United Kingdom degree-awarding body with four schools: BPP Business School, BPP Law School, BPP School of Health and BPP School of Foundation and English Language Studies.

Carnegie Learning[edit]

Carnegie Learning Logo

Carnegie Learning is a publisher of math curricula for middle school, high school, and post-secondary students. The company uses a blended approach, with a textbook and software (called Cognitive Tutor) for each subject. The company also produces products for the homeschool and tutoring markets. Based in Pittsburgh, PA, Carnegie Learning was founded by cognitive science researchers from Carnegie Mellon University in conjunction with veteran mathematics teachers.

All of the Cognitive Tutor curricula are based on extensive scientific research from Carnegie Mellon University, along with field tests in schools throughout the United States. The Cognitive Tutors are based on the ACT-R theory of learning, memory and performance, which has been validated by hundreds of lab and field studies. The Tutors themselves were developed using a rigorous empirical testing process resulting in over 50 publications validating the effectiveness of cognitive modeling.[24]

Apollo Group announced in August 2011 a $75 million deal to buy Carnegie Learning along with a separate agreement to acquire related technology from CMU for $21.5 million, to be paid over 10 years.[25]

Western International University[edit]

Western International University (WIU) is a college for adult learners and allows students to remain responsible for their careers and family life by offering online and evening programs. Founded in 1978 in Phoenix, Arizona, WIU offers associate, bachelor and master degree programs to approximately 3,200 students. WIU provides a broad educational foundation, with a focus on business and technology, designed to prepare students for leadership positions in business. WIU has four campuses locations in the Phoenix area and offers online education through its virtual campus, WIU Interactive OnlineSM.[23]

Institute for Professional Development[edit]

Insight Schools[edit]

[26]

Orange Lutheran Online[edit]

Apollo Group has been contracted by Lutheran High School of Orange County (LHSOC) to manage its online delivery of high school classes. Established in 1973, LHSOC is a comprehensive, college preparatory high school with a reputation for academic rigor.

Meritus University[edit]

Apollo Group owned and operated Meritus University in Canada.[27] On January 24, 2011, citing how "enrollment will continue to be insufficient to sustain the required quality academic and student service infrastructure we and our students demand," Meritus University announced its closure, with their last classes taking place on March 14, 2011.[28]

Universidad de Artes, Ciencias y Comunicacion[edit]

University for the Arts, Sciences, and Communication, Chile.[29]

Universidad Latinoamericana, Mexico[edit]

The Universidad Latinoamericana in Mexico was acquired by the Apollo Group in 2007.[30]

Aptimus Marketing[edit]

Aptimus is a full-service, in-house marketing agency for Apollo Group education institutions, including the University of Phoenix, Axia College, the Institute for Professional Development, Olympus High School, and Insight School.[31]

Open Colleges, Australia[edit]

Open Colleges in Australia was acquired for a 70% share agreement by the Apollo Group in 2013.[32]

Controversy[edit]

In January 2008, Apollo was found liable for misleading investors by not disclosing a Department of Education report critical of the University of Phoenix's recruitment practices. The jury awarded the plaintiffs $280 million.[33]

References[edit]

  1. ^ a b c d e f g h Apollo Group 2013 form 10-K
  2. ^ Apollo Group Annual Report 2004
  3. ^ "Apollo Group Buys University in Chile". February 20, 2008. Retrieved 10 June 2013. 
  4. ^ http://www.bizjournals.com/phoenix/morning_call/2013/10/apollo-group-announces-major-layoff.html
  5. ^ [1]
  6. ^ Apollo Group 2005 annual report
  7. ^ Staff (5 October 2011). "Apollo Group (APOL) Shares Upgraded to a "Outperform" Rating by Credit Suisse (CS) Analysts". American Banking and Market News. 
  8. ^ Staff (8 July 2011). "Analysts Weekly Ratings Changes for Apollo Group, Inc. (NASDAQ: APOL)". American Banking and Market News. 
  9. ^ Jahna Berry and Ginger Rough (15 April 2011). "Apollo threatens to move workers". The Arizona Republic (Phoenix). 
  10. ^ Jahna Berry and J. Craig Anderson (31 March 2011). "Apollo sells its corporate HQ, signs leaseback deal". Arizona Business Gazette. Retrieved 10 June 2013. 
  11. ^ a b Goldie Blumenstyk, "Apollo Group Plans to Lay Off 500, as Does Education Management Corp." Chronicle of Higher Education Oct 23, 2013 [2].
  12. ^ "Apollo Group 4Q Net Soars On Fewer Charges; Enrollment Falls". The Wall Street Journal. October 19, 2011. 
  13. ^ University of Phoenix provides growth opportunities for working adults Lee Allen. Retrieved 18 September 2008.
  14. ^ "University of Phoenix Admissions Profiles". Eduers.com. Retrieved 2010-09-11. 
  15. ^ http://beta.phoenix.edu/admissions/prior_learning_assessment.html[dead link]
  16. ^ http://www.usatoday.com/story/news/nation/2013/07/02/college-default-rates-higher-than-grad-rates/2480295/
  17. ^ http://www.bizjournals.com/phoenix/news/2013/10/22/more-job-cuts-hit-university-of-phoenix.html
  18. ^ Apollo Group, Inc. Launches New University, May 13, 2008
  19. ^ Apollo Global Completes Acquisition of Universidad de Artes, Ciencias y Comunicacion 'UNIACC', April 1, 2008
  20. ^ Apollo Group and the Carlyle Group Form $1 Billion Joint Venture to Make Investments in the International Education Services Sector, Apollo website, October 27, 2007
  21. ^ Apollo Goes Global, Inside Higher Education, October 22, 2007, Doug Lederman
  22. ^ Ross Sorkin, Andrew (31 July 2009). "Apollo Pays $607 Million for BPP of London". The New York Times. Retrieved 2009-08-06. 
  23. ^ a b "Apollo Global Expands University Network with Addition of Western International University" (Press release). Apollo Group. 19 April 2010. 
  24. ^ Koedinger, Kenneth R.; Corbett, Albert T.; Ritter, Steven; Shapiro, Lora J. (2000-06-22). "In this paper, we describe various evaluations that demonstrate the power of the Cognitive Tutor solution.". Carnegie Learning's Cognitive Tutor: Summary Research Results. Carnegie Mellon University. 
  25. ^ Kim Leonard (3 August 2011). "CMU software spinout acquired". Pittsburgh Tribune Review. 
  26. ^ Apollo Group, Inc. Announces Acquisition of Insight Schools
  27. ^ Apollo Group News - The New York Times
  28. ^ Apollo Group, Inc. Launches New University
  29. ^ Apollo Global Completes Acquisition of Universidad de Artes, Ciencias y Coumnicacion 'UNIACC' [3]
  30. ^ Apollo Group Enters Mexican Education Market
  31. ^ Apollo Group Completes Acquisition of Aptimus
  32. ^ Apollo Global Agrees to Acquire Majority Interest in Open Colleges Australia
  33. ^ Jury Finds U of Phoenix Parent Company Liable for $280 Million Chronicle of Higher Education January 16, 2008

External links[edit]