FORM 8 K APOLLO GROUP INC APOL. Filed: November 03, 2006 (period: November 01, 2006) Report of unscheduled material events or corporate changes.

Transcription

1 FORM 8 K APOLLO GROUP INC APOL Filed: November 03, 2006 (period: November 01, 2006) Report of unscheduled material events or corporate changes.

2 Item 4.02 Item 5.02 Item 9.01 Table of Contents Non Reliance on Previously Issued Financial Statements or a Related Audit Report or Comple Departure of Directors or Principal Officers; Election of Directors; Appointment of Princi Financial Statements and Exhibits. SIGNATURES Exhibit Index EX 99.1 (EX 99.1)

3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C 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): November 1, 2006 Apollo Group, Inc. (Exact name of registrant as specified in its charter) Arizona (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 4615 East Elwood Street, Phoenix, Arizona (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code: (480) Not Applicable 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 ) [ ] Soliciting material pursuant to Rule 14a 12 under the Exchange Act (17 CFR a 12) [ ] Pre commencement communications pursuant to Rule 14d 2(b) under the Exchange Act (17 CFR d 2(b)) [ ] Pre commencement communications pursuant to Rule 13e 4(c) under the Exchange Act (17 CFR e 4(c))

4 Top of the Form Item 4.02 Non Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. (a) As previously announced, a committee of independent members of the Board of Directors (the "Special Committee") of Apollo Group, Inc. (the "Company") has been conducting a review of the Companys historic stock option granting practices. The Special Committees review is being conducted with the assistance of independent counsel and accounting advisors. Although the review is continuing and a final conclusion has not been reached, the review has identified various deficiencies in the process of granting and documenting stock options. As a result of the deficiencies, certain measurement dates related to stock option grants will need to be revised and adjustments to historical financial statements will be required. These deficiencies include the following: " In the accounting of certain stock option grants, the Company did not correctly apply the requirements of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. In certain instances, the Company used a measurement date for option awards that corresponded with the reported grant date even though the approvals for those grants as set forth in the operative plans were not obtained until after the reported grant date and the final list of grantees and award amounts was incomplete at the time of the reported grant date. " The Company misapplied Internal Revenue Code Section 162(m) with respect to the contemporaneous tax treatment of certain stock option grants and may face significant tax liability for prior years. " The Company prepared and maintained inaccurate documentation concerning the date that grant award lists were completed and approved. The Company is still conducting its accounting analysis and has not yet determined definitively the impact of these deficiencies on the Companys historical financial statements. However, the Company expects that it will restate certain of its previously filed financial statements, including for the years 2001 to 2005 and the first two quarters of Accordingly, on November 2, 2006, based on the work of the review to date, the Companys Board of Directors has concluded that the Companys previously issued financial statements and other historical financial information and related disclosures relating to periods discussed above (as well as earnings releases for the last two quarters of 2006) contained in the Companys filings with the Securities and Exchange Commission (the "SEC"), including applicable reports of its independent registered public accounting firm and press releases, should no longer be relied upon. Upon completion of the Special Committees investigation, the Company will prepare and file with the SEC amendments to certain of the Companys previous filings with the SEC reflecting the restatement of its consolidated financial statements. The Company is working expeditiously to complete its review and at that time will complete and file these amendments as soon as possible. The Companys audit committee chairman has discussed the matters in this filing under Item 4.02(a) with Deloitte & Touche LLP, the Companys independent registered public accounting firm. Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. On November 1, 2006, Kenda B. Gonzales resigned as the Companys Chief Financial Officer and Treasurer, effective immediately. The Company will hire an interim CFO as soon as reasonably possible. On November 2, 2006, Daniel E. Bachus, the Companys Chief Accounting Officer and Controller, was placed on administrative leave. A copy of the press release issued by the Company announcing the foregoing is attached as Exhibit 99.1, and is incorporated herein by reference. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Press Release dated November 3, 2006

5 Top of the Form 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. November 3, 2006 By: Brian Mueller Name: Brian Mueller Title: President

6 Top of the Form Exhibit Index Exhibit No. Description 99.1 Press Release dated November 3, 2006

7 Apollo Group, Inc. News Release APOLLO GROUP ANNOUNCES UPDATE REGARDING STOCK OPTION GRANTS CFO RESIGNS, CONTROLLER ON ADMINISTRATIVE LEAVE Phoenix, Arizona, November 3, 2006 Apollo Group, Inc. (Nasdaq:APOL) today announced that its ongoing internal investigation into the issuance of certain stock option grants has discovered various deficiencies. While not yet complete, the investigation to date has identified various deficiencies in the Company s process of granting and documenting stock options, which are described in greater detail in the Company s Form 8 K filed today. Apollo Group therefore will need to restate its historical financial statements to record additional charges for compensation expenses relating to past stock option grants. The Company has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement. Accordingly, Apollo Group today filed a Form 8 K and plans to file any required restated financial statements following completion of the investigation. The Company continues to cooperate with the SEC. We are committed to resolving these issues as quickly as possible, and we are in the process of putting the appropriate processes in place to ensure this does not happen again, said Brian Mueller, who was appointed president of Apollo Group in January. Apollo Group also announced that Chief Financial Officer and Treasurer Kenda B. Gonzales resigned on November 1st, citing personal reasons. In addition, Chief Accounting Officer Dan Bachus is currently on administrative leave. Transition is always challenging for an organization, commented Mueller. However, we have a talented and tenured executive team in place and I feel confident in our abilities to move the organization forward. Our focus remains on doing what s right for our students, our faculty and our employees. I remain committed to the turnaround plan I outlined for shareholders earlier this year and I believe we have made significant progress towards building the infrastructure for our future growth. ~continued~ As previously announced, Apollo Group s Board of Directors has appointed a special committee of outside directors (the Special Committee ) to conduct an independent investigation relating to the Company s historic stock option grant practices. The Special Committee consists of two independent members of Apollo s Board of Directors Hedy F. Govenar, who chairs the Nominating and Governance Committee and the meetings of the independent directors, and Daniel D. Diethelm. The Special Committee s investigation is being conducted with the assistance of outside legal counsel, Mayer, Brown, Rowe & Maw LLP, and forensic accountants from FTI Consulting, Inc., in conjunction with the Company s independent registered public accounting firm Deloitte & Touche LLP. Apollo Group will delay the filing of its Form 10 Q for the quarter ended May 31, 2006 until the Special Committee has completed the investigation. In lieu of taking individual calls on the matter, the company will hold a conference call to review this update at 11:00 AM Eastern time, 9:00 AM Phoenix time, on Friday, November 3, The call may be accessed by dialing (877) (domestic) or (706) (internationally). The conference ID number is A live webcast of this event may be accessed by visiting the company website at: A replay of the call will be available on our website or at (706) (conf. ID # ) until November 22, 2006.

8 Apollo Group, Inc. has been providing higher education programs to working adults for almost 30 years. Apollo Group, Inc., operates through its subsidiaries: The University of Phoenix, Inc., Institute for Professional Development, The College for Financial Planning Institutes Corporation, and Western International University, Inc. The consolidated enrollment in its educational programs makes it the largest private institution of higher education in the United States. It offers educational programs and services at 100 campuses and 159 learning centers in 39 states, Puerto Rico, Washington DC, Alberta, British Columbia, Netherlands, and Mexico. For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990 APOL or visit Apollo on the company website at: Investor Relations Contact: Janess Pasinski ~Apollo Group, Inc. ~ (800) 990 APOL, option 6 ~ janess.pasinski@apollogrp.edu Press Contacts: Marie Yarroll ~ (602) ~ myarroll@ckpr.biz; Lisa Noble ~ ~ lnoble@ckpr.biz Created by 10KWizard