Apollo Group

Founding

Apollo Education Group, Inc. was founded in 1973 by John Sperling and John D. Murphy.

Apollo Group as a Publicly Traded Corporation (1994–2016)

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

In 2008, Apollo Group formed a joint venture with Carlyle Group, called Apollo Global, to make international acquisitions. Apollo also purchased schools in Mexico and Chile

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

Declining revenues

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.

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. "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.

Revenue of the company continued to fall: in the fiscal year ending on August 31, 2011, the net revenue was $4.7 billion; in 2012, $4.2 billion; in 2013, $3.6 billion. 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.

In 2015, co-founder John D. Murphy argued that Apollo Group "lost its direction when it abandoned its roots, which were serving working adults, not recent high school graduates."

Schools and subsidiaries

University of Phoenix

The University of Phoenix was a wholly owned subsidiary of the Apollo Education Group. The University of Phoenix is one of the largest higher education providers in North America. The university has approximately 40 campuses and confers degrees in over 100 degree programs at the associate, bachelor's, master's and doctoral levels. The University of Phoenix has an open enrollment admission policy only requiring a high-school diploma, GED, or an equivalent qualification. 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.

University of Phoenix students owe more than $35 billion in student loan debt, the most of any US college. In 2014, University of Phoenix was highlighted in a Time.com article titled "The 5 Colleges That Leave the Most Students Crippled By Debt".

Apollo Global (later known as Vanta Education)

Apollo Group formed Apollo Global to manage and form subsidiaries, assets, and holdings overseas. As part of their first acquisitions, Apollo Global acquired University for the Arts, Sciences, and Communication (UNIACC) in Chile as well as the now defunct Meritus University in Canada.

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.

Lawsuits and financial reporting

After a separate investigation in 2004, the Apollo Group paid about $10 million in fines to the U.S. Department of Education, which had criticised UoP's admissions practices: for example, recruiters were paid bonuses depending on the numbers they signed up. "In 2004, a scathing report issued by the US Department of Education concluded that Phoenix, as The Chronicle of Higher Education put it, had a 'high-pressure sales culture' that intimidated recruiters who failed to meet targets and encouraged the enrollment of unqualified students—in short that it rewarded 'the recruiters who put the most "asses in classes"'. Apollo illegally withheld the report, but it was leaked and the group's value on the stock market crashed. A suit was brought alleging that its management had 'disseminated materially false and misleading financial statements in an effort to inflate its stock price and attract investors'."

"In 2006, the company's controller and chief accounting officer resigned amid allegations that the books had been cooked; in 2007, the Nasdaq Listing and Hearing Review Council threatened to withdraw Apollo's listing from the stock exchange."

In January 2008, the above stock-price suit was decided. Apollo was found liable for misleading investors by failing to disclose the Department of Education report that criticized the University of Phoenix's recruiting practices. The jury awarded the shareholders $280 million in damages. The trial judge vacated the verdict and found for the defendants, but the Ninth Circuit reinstated the verdict. The U.S. Supreme Court declined to hear Apollo's appeal of the verdict. The case ultimately resolved with Apollo being liable for $145 million; the reported $280 million figure may have been an error because the jury's award was for $5.55 per share.

In November 2008, Apollo paid $1.89 million to settle a religious discrimination class action without admitting wrongdoing. The Equal Employment Opportunity Commission had brought the claim on behalf of non-Mormon employees of University of Phoenix Online. Under the settlement, University of Phoenix Online agreed to prohibit favoritism toward the Church of Jesus Christ of Latter-day Saints.

In July 2015, Apollo announced the Federal Trade Commission (FTC) was investigating UoP for unfair business practices; "The company must hand over documents regarding matters that include its marketing, tuition, billing, accreditation, and military recruitment practices going back as far as 2011." In January 2016, the FTC filed suit against Apollo and University of Phoenix. The court ordered Apollo and UoP to comply with the FTC's civil investigative demands.