PDF Academic Report - K12

2017 K12

ACADEMIC REPORT

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TABLE OF CONTENTS

A Letter from Nate Davis, Executive Chairman; and Stuart Udell, Chief Executive Officer

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CAO Foreword: Changes in State Testing and

School Accountability

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K12 Public School Programs: Performance Analysis and Innovation

The "State" of State Testing in 2015?2016 Market Demand for Online Learning K12 Driving Innovation: Accountability Dashboards

Appendices

Appendix A: School Comparisons to the States (2015?2016) Appendix B: F ree and Reduced Price Lunch and Special Education

Eligibility by School Compared to State Appendix C: K12 Private School Profiles (2015?2016) Appendix D: A lphabetical Guide to Schools Included in 2017

K12 Academic Report

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8 28 40

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99 102 103

This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "continues," "likely," "may," "opportunity," "potential," "projects," "will," "expects," "plans," "intends," and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual academic performance to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors, and contingencies include, but are not limited to: test result presentations and data interpretations; descriptions of testing and academic outcomes; individual school, grade, and subject performance reporting; educational achievements; the potential inability to further develop, maintain, and enhance our curriculum products, instructional services, and teacher training; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor academic performance in the managed schools with whom we contract; challenges from online public school or hybrid school opponents; failure of the schools we serve to comply with applicable education requirements, student privacy, and other applicable regulations; inability to recruit, train, and retain quality teachers and employees; and other risks and uncertainties associated with our business described in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material.

A Letter from Nate Davis, Executive Chairman; and Stuart Udell, Chief Executive Officer

The fifth annual K12 Academic Report continues our commitment to accountability and transparency. It includes all K12 online and blended public school programs with publicly available state test results for 2015?2016 in grades 3?8 English Language Arts and/ or Reading and Mathematics as well as in high school for assessments in English and Mathematics/Algebra 1.

This report provides test results for 2015?2016 comparing school performance to state performance and shows the difference between school and state performance for representative schools. We are encouraged to see certain exams and grades in some schools that have exceeded the state proficiency percentages, and we have instituted programs to improve academic performance across all the schools we serve.

The focus on improving instruction in 2015?2016 was (1) reporting critical data to schools in a timely manner so that midyear adjustments could be made, and (2) expanding and refining the Instructional Coaching program to strengthen teacher effectiveness in English Language Arts/Reading and in Mathematics. Teachers routinely received coaching support from experienced teachers in the online and blended environment. Although this transformation across all the schools we serve will likely take more than one year, we know that this investment in teachers is an investment in helping students learn and achieve.

Our analyses indicates that many K12 school1 programs continue to underperform their states in Mathematics, which is not uncommon in public schools with high proportions of economically disadvantaged students.2, 3 We are still seeing the impact of poverty as students who are eligible for free and reduced price lunch continue to underperform students

who are not eligible for subsidized meals. Again, this is a common reality in brick and mortar public schools as well. All schools need to meet the nonacademic needs of students who suffer from the broader impact of poverty. K12 has taken and continues to take this challenge seriously. We expanded our Family Academic Support Team (FAST) initiative to mitigate many of the nonacademic challenges facing students. While supporting the individual needs of students, in 2015?2016, we also initiated a national instructional coaching program for both new and returning teachers to increase their abilities to support every student. And we sustained our ongoing research initiatives to determine the efficacy of instructional programs.

Leveraging the research findings and best practices within our schools and in the industry, we developed a new Academic Excellence Framework as a guide and a set of criteria to improve instructional effectiveness in the online learning environment. This new plan was launched in 2016? 2017 across all our managed public school programs and we will be reporting on its efficacy in future academic reports.

We have extended our view of persistence--students who remain continuously enrolled for three or more years continue to outperform students who are enrolled one year or less. Again, this is a reminder that the impact of mobility occurs in brick and mortar schools as well as in

1 This report sometimes refers to "K12 schools" or "our schools" or "K12 students" as a shorthand way to describe the online and blended public schools we serve pursuant to a contract with an independent not-for-profit board or school district governing board. We do not mean to suggest or imply that K12 Inc. has any ownership or control over those schools. Because the independent boards seek a managed contractual arrangement, the references to "K12 schools" and similar language are simply for ease and do not describe a legal relationship. We are honored to be selected as a vendor to the public boards we serve. 2 J. Isaacs, & K. Magnuson, Income and Education as Predictors of Children's School Readiness, (Washington, DC: Center on Children and Families, Brookings Institute, 2011). 3 The Impact of Poverty on Student Outcomes (Hanover Institute, 2015, January).

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online and blended schools. Students need stability in their educational environment through graduation to be able to succeed. Our Students First initiative this year also included the introduction of a customizable graduation planning tool to keep students on-track for commencement. The tool features a centralized repository with complete course credit history to help schools thoughtfully manage each student's personalized graduation roadmap. Characterized by a handy dashboard and data analytics capabilities, the tool identifies credit gaps so that educators can step in and provide assistance exactly when it is needed, as opposed to after it is too late.

One of the distinct advantages of online and blended learning environments is that many more data points are readily available to heads of school than in traditional brick and mortar schools. While we protect individual student data consistent with state and federal privacy laws, aggregated student engagement information in the online and blended environment helps us to understand learning patterns and how students choose to use their instructional time. Our goal is to identify the different ways we can motivate students to learn rigorous content while stimulating their engagement.

The K12 Academic Report is part of our broad research efforts at K12. We are committed to continuing to research the relationship between student achievement and variables such as school structure, teacher effectiveness, learner preferences for synchronous or asynchronous instructional sessions, as well as any other engagement behaviors that will help us better meet the needs of every student. We regularly collect and examine data at the classroom, school, regional, and national levels to ensure that we are doing everything possible to support student learning. These data hold promise for enhancing the learning outcomes of many

students who struggle in traditional school environments and will enhance the learning for the many advanced learners in online and blended schools.

In 2015?2016, K12 served more than 100,000 students in grades kindergarten through grade 12 and graduated more than 5,800 high school seniors. We are proud of the families who choose K12 managed public schools as well as those who use our course offerings at their local traditional brick and mortar districts/schools. These families are searching for the best solutions for their students, and our goal is to meet and exceed their expectations.

Online and blended schools and programs face many of the same challenges of brick and mortar schools. We continue to share what we have learned through blogs, white papers published throughout each year, and presentations at educator and policy meetings. We look for partnerships across the online and blended learning environment.

We will extend our research to cover new initiatives in future reports as well as in research briefs, white papers, and blogs. All of us at K12 are committed and dedicated to supporting the academic success of students and families who choose the online learning environment. We know that we can only succeed when our students succeed--so we begin and end each day with "Students First."

Nate Davis Executive Chairman

Stuart Udell Chief Executive Officer

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CAO FOREWORD: Changes in State Testing and School Accountability

The 2017 K12 Academic Report continues our commitment to effective practices and innovation designed to improve the learning experience for students. The main body of this Academic Report is structured to focus on three areas of interest. First, we present a description of the continuing changes in state testing programs with examples of results for grades 3?8 and high school. Second, we provide an update on market demand for new approaches to online learning. Third, we preview an innovative approach to school accountability that focuses on students. In the Appendices, we report the 2015?2016 assessment results and demographics for the online and blended public school programs that K12 managed during that year.

The "State" of State Testing in 2015?2016

States have historically wanted autonomy in establishing curricula and testing programs. While the consortia, established through grants from the federal government in 2010, appeared to have caused states to agree on common assessments (PARCC and SBAC),4 states began withdrawing from these collaborative ventures in 2014?2015. The state testing environment continued to change in the 2015?2016 school year. More states chose to depart from the consortia, leading to more and more states having their own state assessment programs.

The number of states using PARCC shrank from 11 states plus the District of Columbia in 2014?2015 to eight states plus the District of Columbia in 2015?2016 and in SBAC from 18 in 2014?2015 to 15 in 2015?2016. These shifts resulted in six states moving to their own new state assessment systems in 2015?2016. Only 23 states used the same assessments in 2015?2016 that they had administered in prior years. Of the 33 states plus the District of Columbia in which K12 managed public school programs, the number of states with new state testing programs was 11 in 2014?2015 and 11 in 2015?

2016.5 This continued the challenges in interpreting school performance year over year.

K12 works diligently to improve the learning experience and the learning outcomes for students who choose to participate in online and blended schools. In order to ensure that we are making the right decisions about teacher and administrator training, curriculum structure, interim assessments, etc., we have developed several different ways to support credible and valid interpretation of academic performance year-over-year in such a changing testing environment. In this report, the reader will see examples of one approach--that is comparing school performance to state performance by subject and grade to understand the extent to which schools are performing on par with the state aggregate percentage of students at or above proficiency. In other documents produced through our rigorous research program, we also report out on school comparisons using a methodology which normalizes scores around proficiency cut-scores. All of our research is focused on improving teaching, the curriculum, and learning in the environment for students who choose to attend an online or blended school managed by K12.

4 Partnership for Assessment of Readiness for College and Career (PARCC) and the Smarter Balanced Assessment Consortium (SBAC). 5 Calculated from data found in the following articles representing grades 3?8 and high school: L. Jurkowitz & S. Decker, "The National Testing Landscape," Education Week (2015),

, and S. Bannerjee, "State Testing: An Interactive Breakdown of 2015-16 Plans. (2016),

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Due to the discontinuity of 11 states withdrawing from the testing consortia, establishing their own state-specific testing programs in 2015?2016, it becomes challenging to fully understand whether schools are becoming more or less effective--since the measures are changing. At the same time, we continue to see school and state results reported between the end of the school year and the beginning of the second quarter of the next school year. This lag between testing and reporting makes it impossible to intervene in a timely manner so that students who need additional academic support can be ready for the following school year. Stability of state testing programs and more timely delivery of results back to the schools are important to helping each student learn at grade level.

K12 continues to report school results from 2015?2016 in terms of the percent proficient by grade for English Language Arts or Reading, and Mathematics in grades 3?8, and their equivalent content areas in high school. And, because some of the managed public schools are still part of PARCC, some are part of SBAC, some have used the same state-specific testing programs for several years, and others have launched a new testing program in 2015?2016, we compare school results with either the consortium aggregate or with the state aggregate.

Market Demand for Online Learning

K12 continues to innovate in response to market demands. Our partnership with urban school districts provides opportunities for delivering a blended learning model for students. The Chicago Virtual Charter School, founded in 2006, was one of the earliest comprehensive blended models in the country. Public districts and schools want to incorporate technology into teaching and learning and K12 is eager to support them to best meet and exceed their needs. Additionally, K12 understands the necessity of preparing students both academically and technically for college and career opportunities in their future. Over the course of the 2016?2017 school year, K12 expanded career technical education (CTE) programs across six schools and up to eight different CTE areas of focus.

K12 Driving Innovation: Accountability Dashboards

We continue to study the relationship between student mobility and poverty on academic performance. Because both mobility (movement from school-to-school) and poverty have long been recognized as having a negative effect on student learning, it makes sense to recognize that "success" in a school with high mobility and high levels of family poverty may not be the same as "success" in a school without those external pressures. It is time to use these findings to innovate school accountability systems to recognize that all students are not the same and that measures of success should reflect the student and family populations that each school serves along with the unique mission of each school. We believe that measures of school effectiveness need to take these differences into account through a student-centered accountability model.

The Every Student Succeeds Act (ESSA) gives individual states more flexibility in shaping their accountability systems and assessments. We anticipate that states will make varying use of summative and interim assessments to measure within-year growth along with movement toward standards mastery. We hope that many states may revise their growth models to incorporate interim results as well as factoring in both mobility and poverty. Finally, we anticipate that schools and states will choose to report information that their stakeholders (families) are interested in, such as teacher turnover, student attendance, etc. In the section on K12 Driving Innovation: Accountability Dashboards, we offer a dashboard approach that supports a new and more transparent reporting approach in order to recognize additional measures that contribute to student success.

Everything we examine and research in our online and blended school programs is focused on improving the learning experience and outcomes for the students and families who choose this option for public education. We remain committed to this goal.

Margaret Jorgensen, Chief Academic Officer

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