Stride (LRN) 10-Q 29 Apr 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Mar. 31, 2014	Apr. 24, 2014
Document and Entity Information	'	'
Entity Registrant Name	'K12 INC	'
Entity Central Index Key	'0001157408	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--06-30	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	39,553,049
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q3	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Current assets	'	'
Cash and cash equivalents	$185,332	$181,480
Accounts receivable, net of allowance of $3,310 and $2,560 at March 31, 2014 and June 30, 2013, respectively	236,445	186,459
Inventories, net	21,294	44,395
Current portion of deferred tax asset	6,165	11,368
Prepaid expenses	10,396	10,331
Other current assets	27,823	23,916
Total current assets	487,455	457,949
Property and equipment, net	50,010	56,142
Capitalized software, net	46,660	43,504
Capitalized curriculum development costs, net	61,219	64,599
Intangible assets, net	24,783	32,139
Goodwill	61,581	61,413
Deposits and other assets	5,547	3,150
Total assets	737,255	718,896
Current liabilities	'	'
Current portion of capital lease obligations	20,954	19,395
Current portion of note payable	'	390
Accounts payable	24,614	21,838
Accrued liabilities	14,910	17,027
Accrued compensation and benefits	19,436	21,970
Deferred revenue	52,468	28,567
Total current liabilities	132,382	109,187
Capital lease obligations, net of current portion	16,651	16,107
Deferred rent, net of current portion	8,595	8,833
Deferred tax liability	28,690	33,299
Other long-term liabilities	2,297	2,512
Total liabilities	188,615	169,938
Commitments and contingencies	'	'
Redeemable noncontrolling interest	15,200	15,200
K12 Inc. stockholders' equity	'	'
Common stock, par value $0.0001; 100,000,000 shares authorized; 41,138,238 and 37,440,662 shares issued and 39,895,938 and 37,440,662 outstanding at March 31, 2014 and June 30, 2013, respectively	4	4
Additional paid-in capital	630,533	548,390
Accumulated other comprehensive loss	-54	-294
Accumulated deficit	-73,806	-81,050
Treasury stock of 1,242,300 and zero shares at cost at March 31, 2014 and June 30, 2013, respectively	-26,624	'
Total K12 Inc. stockholders' equity	530,053	530,162
Noncontrolling interest	3,387	3,596
Total equity	533,440	533,758
Total liabilities, redeemable noncontrolling interest and equity	737,255	718,896
Series A Special Stock	'	'
K12 Inc. stockholders' equity	'	'
Series A Special Stock, par value $0.0001; 2,750,000 shares authorized, zero and 2,750,000 issued and outstanding at March 31, 2014 and June 30, 2013, respectively	'	63,112
Total equity	'	$63,112

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Jun. 30, 2013
In Thousands, except Share data, unless otherwise specified
Accounts receivable, allowance (in dollars)	$3,310	$2,560
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,138,238	37,440,662
Common stock, shares outstanding	39,895,938	37,440,662
Treasury stock, shares	1,242,300	0
Series A Special Stock	'	'
Series A Special Stock, par value (in dollars per share)	$0.00	$0.00
Series A Special Stock, shares authorized	2,750,000	2,750,000
Series A Special Stock, shares issued	0	2,750,000
Series A Special Stock, shares outstanding	0	2,750,000

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	'	'	'	'
Revenues	$235,222	$218,009	$687,507	$645,133
Cost and expenses	'	'	'	'
Instructional costs and services	140,592	127,759	427,165	369,205
Selling, administrative, and other operating expenses	64,414	65,828	238,411	216,826
Product development expenses	2,831	5,070	11,916	14,817
Total costs and expenses	207,837	198,657	677,492	600,848
Income from operations	27,385	19,352	10,015	44,285
Interest expense, net	-12	-306	-125	-807
Income before income tax expense and noncontrolling interest	27,373	19,046	9,890	43,478
Income tax expense	-11,861	-7,626	-3,726	-18,195
Net income	15,512	11,420	6,164	25,283
Adjust net loss attributable to noncontrolling interest	437	555	1,080	559
Net income attributable to common stockholders, including Series A stockholders	$15,949	$11,975	$7,244	$25,842
Net income attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:	'	'	'	'
Basic and Diluted (in dollars per share)	$0.40	$0.31	$0.19	$0.66
Weighted average shares used in computing per share amounts:	'	'	'	'
Basic and Diluted (in shares)	39,596,798	36,283,353	39,136,667	36,142,689

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	'	'	'	'
Net income	$15,512	$11,420	$6,164	$25,283
Other comprehensive income (loss), net of tax	'	'	'	'
Foreign currency translation adjustment	47	-276	240	-426
Total other comprehensive income, net of tax	15,559	11,144	6,404	24,857
Comprehensive loss attributable to noncontrolling interest	437	555	1,080	559
Comprehensive income attributable to common stockholders, including Series A stockholders	$15,996	$11,699	$7,484	$25,416

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) (USD $)		Total	Common Stock - Series A	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Treasury Stock	Noncontrolling Interest
In Thousands, except Share data, unless otherwise specified
Balance at Jun. 30, 2013		$533,758	$63,112	$4	$548,390	($294)	($81,050)	'	$3,596
Balance (in shares) at Jun. 30, 2013		'	2,750,000	37,440,662	'	'	'	'	'
Increase (Decrease) in Stockholders' Equity		'	'	'	'	'	'	'	'
Net income	[1]	7,035	'	'	'	'	7,244	'	-209
Foreign currency translation adjustment		240	'	'	'	240	'	'	'
Conversion of Series A Special Stock to common stock		'	-63,112	'	63,112	'	'	'	'
Conversion of Series A Special Stock to common stock (in shares)		'	-2,750,000	2,750,000	'	'	'	'	'
Purchase of treasury stock		-26,624	'	'	'	'	'	-26,624	'
Purchase of treasury stock (in shares)		-1,242,300	'	'	'	'	'	-1,242,300	'
Stock-based compensation expense		16,199	'	'	16,199	'	'	'	'
Exercise of stock options		8,444	'	'	8,444	'	'	'	'
Exercise of stock options (in shares)		'	'	481,497	'	'	'	'	'
Excess tax benefit from stock-based compensation		-472	'	'	-472	'	'	'	'
Issuance of restricted stock awards (in shares)		'	'	693,354	'	'	'	'	'
Forfeiture of restricted stock awards (in shares)		'	'	-51,820	'	'	'	'	'
Accretion of redeemable noncontrolling interests to estimated redemption value		-870	'	'	-870	'	'	'	'
Retirement of restricted stock for tax withholding		-4,270	'	'	-4,270	'	'	'	'
Retirement of restricted stock for tax withholding (in shares)		'	'	-175,455	'	'	'	'	'
Balance at Mar. 31, 2014		$533,440	'	$4	$630,533	($54)	($73,806)	($26,624)	$3,387
Balance (in shares) at Mar. 31, 2014		'	'	41,138,238	'	'	'	-1,242,300	'
[1]	Net income (loss) attributable to noncontrolling interests excludes $0.9 million due to the redeemable noncontrolling interest related to Middlebury Interactive Languages (bMILb), which is reported outside of permanent equity in the accompanying unaudited condensed consolidated balance sheets.

CONDENSED_CONSOLIDATED_STATEME3

CONDENSED CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) (Parenthetical) (USD $)	9 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)	'
Redeemable noncontrolling interest related to Middlebury Interactive Languages	$0.90

CONDENSED_CONSOLIDATED_STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities	'	'
Net income	$6,164	$25,283
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depreciation and amortization expense	69,491	48,176
Stock-based compensation expense	16,199	9,833
Excess tax benefit from stock-based compensation	472	-4,413
Deferred income taxes	122	16,348
Provision for doubtful accounts	1,206	1,814
Provision for excess and obsolete inventory	4,161	272
Provision (benefit) for student computer shrinkage and obsolescence	-555	439
Changes in assets and liabilities:	'	'
Accounts receivable	-51,547	-75,549
Inventories	18,941	8,237
Prepaid expenses	-39	-9,919
Other current assets	-3,906	992
Deposits and other assets	-351	-142
Accounts payable	2,759	-3,976
Accrued liabilities	-2,165	12,229
Accrued compensation and benefits	-2,535	2,333
Deferred revenue	23,543	24,092
Release of restricted cash	'	1,501
Deferred rent and other liabilities	-454	1,666
Net cash provided by operating activities	81,506	59,216
Cash flows from investing activities	'	'
Purchase of property and equipment	-6,323	-5,265
Capitalized software development costs	-18,486	-17,867
Capitalized curriculum development costs	-11,324	-13,597
Mortgage note to managed school partner	-2,100	'
Net cash used in investing activities	-38,233	-36,729
Cash flows from financing activities	'	'
Repayments on capital lease obligations	-16,988	-14,674
Repayments on note payable	-390	-1,177
Proceeds from exercise of stock options	8,444	3,027
Excess tax benefit from stock-based compensation	-472	4,413
Purchase of treasury stock	-26,624	'
Retirement of restricted stock for tax withholding	-4,270	-1,817
Net cash used in financing activities	-40,300	-10,228
Effect of foreign exchange rate changes on cash and cash equivalents	879	57
Net change in cash and cash equivalents	3,852	12,316
Cash and cash equivalents, beginning of period	181,480	144,652
Cash and cash equivalents, end of period	$185,332	$156,968

Description_of_the_Business

Description of the Business	9 Months Ended
	Mar. 31, 2014
Description of the Business	'
Description of the Business	'
	1.  Description of the Business
	K12 Inc. and its subsidiaries (“K12” or the “Company”) is a technology-based education company. The Company offers proprietary curriculum, software systems and educational services designed to facilitate individualized learning for students primarily in kindergarten through 12th grade, (“K-12”). The Company’s mission is to maximize a child’s potential by providing access to an engaging and effective education, regardless of geographic location or socio-economic background. Since its inception, the Company has made significant investments to develop and, to a lesser extent, acquire curriculum and online learning platforms that promote mastery of core concepts and skills for students of all abilities. This learning system combines the Company’s curriculum and offerings with an individualized learning approach well-suited for virtual and blended public schools, school district online programs, public charter schools and private schools that utilize varying degrees of online and traditional classroom instruction, and other educational applications. In contracting with a virtual and blended public school, the Company typically provides students with access to the K12 online curriculum, offline learning kits and the use of a personal computer in certain cases, in addition to providing management services. The Company manages virtual public schools in 33 states and the District of Columbia.
	In addition, the Company works closely as partners with a growing number of public schools, school districts, private schools and charter schools enabling them to offer their students an array of solutions, including full-time virtual programs, semester course and supplemental solutions. In addition to curriculum, systems and programs, the Company provides teacher training, teaching services and other support services.

Basis_of_Presentation

Basis of Presentation	9 Months Ended
	Mar. 31, 2014
Basis of Presentation	'
Basis of Presentation	'
	2.  Basis of Presentation
	The accompanying condensed consolidated balance sheet as of March 31, 2014, the condensed consolidated statements of operations for the three and nine months ended March 31, 2014 and March 31, 2013, the condensed consolidated statements of comprehensive income for the three and nine months ended March 31, 2014 and March 31, 2013, the condensed consolidated statement of equity (deficit) for nine months ended March 31, 2014 and the condensed consolidated statements of cash flows for the nine months ended March 31, 2014 and March 31, 2013 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations for the periods presented. The results of the three and nine month periods ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending June 30, 2014 or for any other interim period or for any other future fiscal year. The condensed consolidated balance sheet as of June 30, 2013 has been derived from the audited consolidated financial statements at that date.
	The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, the Company does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s condensed consolidated results of operations, financial position and cash flows. Preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and footnotes. Actual results could differ from those estimates. This quarterly report on Form 10-Q should be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 29, 2013, which contains the Company’s audited financial statements for the fiscal year ended June 30, 2013.
	The Company operates in one operating and reportable business segment as a technology—based education company providing proprietary curriculum, software systems and educational services designed to facilitate individualized learning for students primarily in kindergarten through 12th grade. The Chief Operating Decision Maker evaluates profitability based only on consolidated results.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	9 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Summary of Significant Accounting Policies	'
	3.  Summary of Significant Accounting Policies
	Revenue Recognition
	Revenues are principally earned from long-term contractual agreements to provide online curriculum, books, materials, computers and management services to virtual and blended public schools, traditional schools, school districts, public charter schools, and private schools. In addition to providing the curriculum, books and materials, under most contracts, the Company manages virtual and blended public schools, including monitoring academic achievement, teacher hiring and training, compensation of school personnel, financial management, enrollment processing and procurement of curriculum, equipment and required services. The schools receive funding on a per student basis from the state in which the public school or school district is located. Shipments of materials for schools that occur in the fourth fiscal quarter and for the upcoming school year are recorded in deferred revenues.
	Where the Company provides turn-key management service and it has determined that it is the primary obligor for substantially all expenses under these contracts, the Company records the associated per student revenue received by the school from its state funding school district up to the expenses incurred in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition. For contracts where the Company is not the primary obligor, the Company records revenue based on its net fees earned under the contractual agreement. As a result of being the primary obligor, amounts recorded as revenues and school operating expenses for the three months ended March 31, 2014 and March 31, 2013 were $71.3 million and $66.8 million, respectively, and for the nine months ended March 31, 2014 and March 31, 2013 were $190.8 million and $178.3 million, respectively.
	The Company generates revenues under contracts with virtual and blended public schools which include multiple elements. These elements include providing each of a school’s students with access to the Company’s online curriculum; offline learning kits, which include books and materials to supplement the online lessons; the use of a personal computer and associated reclamation services; internet access and technology support services; the services of a state-certified teacher; and management and technology services required to operate a virtual public or blended school. In certain managed school contracts, revenue is determined directly by per enrollment funding.
	The Company has determined that the elements of its contracts are valuable to schools in combination, but do not have standalone value. As a result, the elements within the Company’s multiple-element contracts do not qualify for separate units of accounting. Accordingly, the Company accounts for revenues under multiple element arrangements as a single unit of accounting and recognizes the entire arrangement based upon the approximate rate at which it incurs the costs associated with each element. Revenue from certain managed schools is recognized ratably over the period services are performed.
	Under the contracts where the Company provides turn-key management services to schools, the Company has generally agreed to absorb any cumulative operating losses of the schools over the respective contract period. These school operating losses represent the excess of costs incurred over revenues earned by the virtual or blended public school as reflected on its respective financial statements, including Company charges to the schools. A school operating loss in one year does not necessarily mean the Company anticipates losing money on the entire contract with the school. However, a school operating loss may reduce the Company’s ability to collect its management fees in full and recognized revenues are reduced accordingly to reflect the expected cash collections from such schools. The Company amortizes the estimated school operating loss against revenues based upon the percentage of actual revenues in the period to total estimated revenues for the fiscal year. Management periodically reviews its estimates of full year school revenues and operating expenses and amortizes the net impact of any changes to these estimates proportionately over the fiscal year. Actual school operating losses may vary from these estimates or revisions, and the impact of these differences could have a material impact on results of operations. Since the end of the school year coincides with the end of the Company’s fiscal year, annual revenues are generally based on actual school revenues and actual costs incurred in the calculation of school operating losses.
	The Company provides certain online curriculum and services to schools and school districts under subscription and perpetual license agreements. Revenue under these agreements is recognized in accordance with ASC 605 when all of the following conditions are met: there is persuasive evidence of an arrangement; delivery has occurred or services have been rendered; the amount of fees to be paid by the customer is fixed and determinable; and the collectability of the fee is probable. Revenue from the licensing of curriculum under subscription arrangements is recognized on a ratable basis over the subscription period. Revenue from the licensing of curriculum under non-cancelable perpetual arrangements is recognized when all revenue recognition criteria have been met. Revenue from professional consulting, training and support services are deferred and recognized ratably over the service period.
	Other revenues are generated from individual customers who prepay and have access for 12 to 24 months to Company-provided online curriculum. The Company recognizes these revenues pro rata over the maximum term of the customer contract. Revenues from associated offline learning kits are recognized upon shipment.
	During the three months ended March 31, 2014 and March 31, 2013, the Company had contracts with two schools that represented approximately 14% and 10% of revenues. The percentage of revenues for these two schools is not indicative of the percentage of revenues for the full year. Approximately 7% of accounts receivable was attributable to a contract with one school as of March 31, 2014 and June 30, 2013. During the nine months ended March 31, 2014, the Company had contracts with two managed public schools that represented approximately 13% and 10% of revenues. During the nine months ended March 31, 2013, the Company had contracts with two managed public schools that represented approximately 14% and 10% of revenues.
	Consolidation
	The condensed consolidated financial statements include the accounts of the Company, its wholly-owned and affiliated companies owned, directly or indirectly, and all controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
	Inventories
	Inventories consist primarily of textbooks and curriculum materials, a majority of which are supplied to managed public schools and blended public schools and utilized directly by students. Inventories represent items that are purchased and held for sale and are recorded at the lower of cost (first-in, first-out method) or market value. The Company records a provision for excess and obsolete inventory when impairment has been identified. The Company writes down its inventory for estimated excess or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions. During the nine months ended March 31, 2014, the Company increased the provision for excess and obsolete inventory by $6.1 million primarily related to the decision to discontinue certain products and excess inventory relative to anticipated demand. The excess and obsolete inventory reserve was $9.0 million and $4.9 million at March 31, 2014 and June 30, 2013, respectively.
	Other Current Assets
	Other current assets consist primarily of textbooks, curriculum materials and other supplies which are expected to be returned upon the completion of the school year. Materials not returned are expensed as part of instructional costs and services.
	Property and Equipment
	Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation expense is calculated using the straight-line method over the estimated useful life of the asset (or the lesser of the term of the lease and the estimated useful life of the asset under capital lease). Amortization of assets capitalized under capital lease arrangements is included in depreciation expense. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful life of the asset. The Company determines the lease term in accordance with ASC 840, Leases, as the fixed non-cancelable term of the lease plus all periods for which failure to renew the lease imposes a penalty on the lessee in an amount such that renewal appears, at the inception of the lease, to be reasonably assured. Depreciation expense for the three months ended March 31, 2014 and March 31, 2013 was $9.2 million and $8.0 million, respectively. Depreciation expense for the nine months ended March 31, 2014 and March 31, 2013 was $32.1 million and $23.8 million, respectively, which, for the nine months ended March 31, 2014, includes accelerated expenses described below.
	Property and equipment are depreciated over the following useful lives:
		Useful Life
	Student computers	3 years
	Computer hardware	3 years
	Computer software	3-5 years
	Web site development costs	3 years
	Office equipment	5 years
	Furniture and fixtures	7 years
	Leasehold improvements	3-12 years
	During the nine months ended March 31, 2014, the Company updated the estimate of unreturned computers based on an analysis of recent trends of returns and utilization rates, as well as information obtained from the student computer processing systems. As a result, the Company recorded accelerated depreciation of $6.3 million for computers that we estimate will not be returned by our students.
	Capitalized Software
	The Company develops software for internal use. Software development costs incurred during the application development stage are capitalized in accordance with ASC 350, Intangibles — Goodwill and Other. The Company amortizes these costs over the estimated useful life of the software, which is generally three years. Capitalized software development costs are stated at cost less accumulated amortization.
	Capitalized software development additions totaled $18.5 million and $17.9 million for the nine months ended March 31, 2014 and March 31, 2013, respectively. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $3.9 million and $3.6 million, respectively. During the nine months ended March 31, 2014, the Company wrote down approximately $3.8 million of capitalized software projects after determining the assets either have no future use or are being sunset. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $15.3 million and $10.3 million, respectively. The amortization expense for the nine months ended March 31, 2014 included the write down.
	Capitalized Curriculum Development Costs
	The Company internally develops curriculum, which is primarily provided as online content and accessed via the Internet. The Company also creates textbooks and other materials that are complementary to online content.
	The Company capitalizes curriculum development costs incurred during the application development stage in accordance with ASC 350. The Company capitalizes curriculum development costs during the design and deployment phases of the project. Many of the Company’s new courses leverage off of proven delivery platforms and are primarily content, which has no technological hurdles. As a result, a significant portion of the Company’s courseware development costs qualify for capitalization due to the concentration of its development efforts on the content of the courseware. Capitalization ends when a course is available for general release to its customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs will be amortized is generally five years.
	Capitalized curriculum development additions were $11.3 million and $13.6 million for the nine months ended March 31, 2014 and March 31, 2013, respectively. These amounts are recorded on the accompanying condensed consolidated balance sheets net of amortization charges. In addition, the Company wrote down approximately $2.2 million of capitalized curriculum development costs due to its decision to discontinue certain curriculum during the nine months ended March 31, 2014. Amortization is recorded in product development expenses on the accompanying condensed consolidated statements of operations. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $4.3 million and $3.6 million, respectively. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $14.7 million and $10.7 million, respectively. The amortization expense for the nine months ended March 31, 2014 included the write down.
	Income Taxes
	The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are computed based on the difference between the financial reporting and income tax bases of assets and liabilities using the enacted marginal tax rate. ASC 740 requires that the net deferred tax asset be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the net deferred tax asset will not be realized.
	Series A Special Stock
	The Company issued 2,750,000 shares of Series A Special stock in July 2010 in connection with an acquisition. The holders of the Series A Special stock had the right to convert those shares into common stock on a one-for-one basis and the right to vote on all matters presented to K12 stockholders, other than for the election and removal of directors, for which holders of the Series A Special stock had no voting rights. These shares were converted into common stock on September 3, 2013 and no Series A Special stock remains outstanding as of March 31, 2014.
	Noncontrolling Interest
	Earnings or losses attributable to other stockholders of a consolidated affiliated company are classified separately as “noncontrolling interest” in the Company’s condensed consolidated statements of operations. Net (income) loss attributable to noncontrolling interest reflects only the Company’s share of the after-tax earnings or losses of an affiliated company. Income taxes attributable to noncontrolling interest are determined using the applicable statutory tax rates in the jurisdictions where such operations are conducted. These rates vary from country to country. The Company’s condensed consolidated balance sheets reflect the noncontrolling interest within the equity section of the condensed consolidated balance sheets rather than in the mezzanine section of the condensed consolidated balance sheets, except for redeemable noncontrolling interest. Noncontrolling interest is classified separately in the Company’s condensed consolidated statements of equity (deficit).
	Redeemable Noncontrolling Interests
	Noncontrolling interests in subsidiaries that are redeemable outside of the Company’s control for cash or other assets are classified outside of permanent equity at redeemable value which approximates fair value. The redeemable noncontrolling interests are adjusted to their fair value at each balance sheet date. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.
	Goodwill and Intangible Assets
	The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired. Finite-lived intangible assets acquired in business combinations subject to amortization are recorded at their fair value. Finite-lived intangible assets include trade names, customer and distributor relationships and developed technology. Such intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $0.7 million and $1.1 million, respectively. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $7.4 million and $3.4 million, respectively. Future amortization of intangible assets is $0.7 million, $2.6 million, $2.5 million, $2.0 million and $2.0 million in the fiscal years ending June 30, 2014 through June 30, 2018, respectively, and $15.0 million thereafter.
	The Company reviews its recorded finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.
	ASC 350 prescribes a process for impairment testing of goodwill and intangible assets with indefinite lives, which is performed annually, as well as when an event triggering impairment may have occurred. Goodwill and intangible assets deemed to have an indefinite life are tested for impairment on an annual basis, or earlier when events or changes in circumstances suggest the carrying amount may not be fully recoverable. The Company has elected to perform its annual assessment on May 31 of each year.
	The following table represents goodwill activity for the nine months ended March 31, 2014:
		Amount
	Rollforward of Goodwill	$(in thousands)
	Balance as of June 30, 2013	$	61,413
	Adjustments due to other foreign exchange translations	168
	Balance as of March 31, 2014	$	61,581
	The following table represents the balance of intangible assets as of March 31, 2014 and June 30, 2013:
		March 31, 2014							June 30, 2013
	($ in millions)	Gross		Accumulated			Net		Gross			Accumulated			Net
		Carrying		Amortization			Carrying		Carrying			Amortization			Carrying
		Amount					Value		Amount						Value
	Trade names	$	17.4	$	(4.2	)	$	13.2	$	24		$	(5.1	)	$	18.9
	Customer and distributor relationships	18.9		(7.7		)	11.2		18.9			(6.5		)	12.4
	Developed technology	1.5		(1.4		)	0.1		1.5			(1.0		)	0.5
	Other	0.5		(0.2		)	0.3		0.5			(0.2		)	0.3
		$	38.3	$	(13.5	)	$	24.8	$	44.9		$	(12.8	)	$	32.1
During the second quarter of fiscal year 2014, the Company determined that based on rebranding of the Institutional business, the Company fully amortized certain trade names that are no longer going to be used and recorded a $5.2 million impairment charge for the nine months ended March 31, 2014. There was no impairment charge for the three months ended March 31, 2014 or the three and nine months ended March 31, 2013.
Impairment of Long-Lived Assets
Long-lived assets include property, equipment, capitalized curriculum and software developed or obtained for internal use. In accordance with ASC 360, the Company reviews its recorded long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.
Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1:  Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date.
Level 2:  Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3:  Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
The carrying values reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, receivable and debt approximate their fair values.
The redeemable noncontrolling interest is a result of the Company’s joint venture with Middlebury College to form Middlebury Interactive Languages. Under the agreement, Middlebury College has an irrevocable election to sell all (but not less than all) of its membership interest to the Company (put right). The fair value of the redeemable noncontrolling interest reflects management’s best estimate of the redemption of the put right.
The following table summarizes certain information at March 31, 2014 and June 30, 2013 for assets and liabilities measured at fair value on a recurring basis:
	Fair Value Measurements Using:
			Quoted Prices
			in Active			Significant
			Markets for			Other		Significant
			Identical			Observable		Unobservable
			Assets			Input		Inputs
Description	Fair Value		(Level 1)			(Level 2)		(Level 3)
	(In thousands)
Redeemable Noncontrolling Interest in Middlebury Joint Venture	$	15,200	$	—		$	—	$	15,200
Total	$	15,200	$	—		$	—	$	15,200
The fair value of the redeemable noncontrolling interest in Middlebury Joint Venture was measured in accordance with ASC 480, Distinguishing Liabilities from Equity, and was based upon a valuation from a third-party valuation firm as of June 30, 2013. As of March 31, 2014, the Company performed an internal analysis and determined there was no underlying change in the estimated fair market value. This analysis incorporated a number of assumptions and estimates including the financial results of the joint venture to date.
Earnings Per Common Share
The Company calculates net income per share in accordance with ASC 260, Earnings Per Share. Under ASC 260, basic net income per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted earnings per share (“EPS”) reflect the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options. The dilutive effect of stock options and restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted earnings per share when they are antidilutive. Common stock outstanding reflected in the Company’s consolidated balance sheets include restricted stock awards outstanding. Securities that may participate in undistributed earnings with common stock are considered participating securities. The Series A Special stock was considered participating until all shares were converted into common stock on September 3, 2013. Participating securities are included in the computation of both basic and diluted EPS (as a reduction of the numerator) using the two-class method. Under the two-class method, all undistributed earnings in a period are allocated to common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. EPS is presented using the two-class method in the three and nine months ended March 31, 2013 only, since the Series A Special stock was outstanding.
The following schedule presents the calculation of basic and diluted net income per share:
	Three Months Ended					Nine Months Ended March
	March 31,					31,
	2014		2013			2014		2013
	(In thousands except shares and per share data)
Basic and dilutive earnings (loss) per share computation:
Net income — K12	$	15,949	$	11,975		$	7,244	$	25,842
Amount allocated to participating Series A stockholders	—		(844		)	—		(1,827		)
Income available to common stockholders — basic and diluted	$	15,949	$	11,131		$	7,244	$	24,015
Weighted average common shares — basic and diluted	39,596,798		36,283,353			39,136,667		36,142,689
Basic and diluted net income per share	$	0.4	$	0.31		$	0.19	$	0.66
The basic and diluted weighted average common shares were the same for the three and nine months ended March 31, 2014 and March 31, 2013, as the inclusion of dilutive securities were out of the money based on a lower average stock price during the period and Series A special stock prior to the conversion date would have been anti-dilutive. At March 31, 2014, we had 41,138,238 shares issued and 39,895,938 shares outstanding, which included the 2,750,000 common shares associated with the Series A special stock conversion which occurred on September 3, 2013.
Recent Accounting Pronouncements
Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future financial statements.

Income_Taxes

Income Taxes	9 Months Ended
	Mar. 31, 2014
Income Taxes	'
Income Taxes	'
	4.  Income Taxes
	The benefit (expense) for income taxes is based on income (loss) reported in the condensed consolidated financial statements. A deferred income tax asset or liability is determined by applying currently enacted tax laws and rates to the expected reversal of the cumulative temporary differences between the carrying value of assets and liabilities for financial statement and income tax purposes. Deferred income tax expense or benefit is measured by the change in the deferred income tax asset or liability during the period. For the three months ended March 31, 2014 and March 31, 2013, the Company’s effective income tax rate was 43.3% and 40.0%, respectively. For the nine months ended March 31, 2014 and March 31, 2013, the Company’s effective tax rate was 37.7% and 41.9%, respectively. The effective income tax rate differs from the statutory federal income tax rate of 35% primarily due to the impact of foreign operations, state taxes, noncontrolling interests and permanent differences between book and tax deductions.

Longterm_Obligations

Long-term Obligations	9 Months Ended
	Mar. 31, 2014
Long-term Obligations	'
Long-term Obligations	'
	5.  Long-term Obligations
	Capital Leases
	The Company incurs capital lease obligations for student computers under a lease line of credit with PNC Equipment Finance, LLC with annual lease availability limits. The current annual availability of $35.0 million expires in June 2014. As of March 31, 2014 and June 30, 2013, the aggregate outstanding balance under the lease line of credit, including balances from prior years, was $37.6 million and $35.5 million, respectively, with lease interest rates ranging from 2.52% to 3.08%. Individual leases under the lease line of credit include 36-month payment terms with a $1 purchase option at the end of each lease term. The interest rates on the new borrowings are based upon an initial rate of 2.40% modified by changes in the three year interest rate swaps rate as published in the Federal Reserve Statistical Release H.15, “Selected Interest Rates,” between May 29, 2013 and the Lease Commencement Date (as defined in the lease line of credit). The Company has pledged the assets financed to secure the outstanding leases. The net carrying value of leased student computers as of March 31, 2014 and June 30, 2013 was $27.3 million and $31.2 million, respectively.
	The following is a summary as of March 31, 2014 of the present value of the net minimum payments due on outstanding capital leases and the note payable under the Company’s commitments:
		Capital
	June 30,	Leases
		($ in thousands)
	2014	6,296
	2015	19,352
	2016	10,266
	2017	2,760
	Total minimum payments	38,674
	Less amount representing interest (imputed weighted average capital lease interest rate of 2.8%)	(1,069		)
	Net minimum payments	37,605
	Less current portion	(20,954		)
	Present value of minimum payments, less current portion	$	16,651
	Note Payable
	The Company purchased computer software licenses and maintenance services through an unsecured note payable arrangement with a vendor at 3.4% interest rate and a payment term of three years. There are no covenants associated with this note payable arrangement. The balance of the note payable at March 31, 2014 and June 30, 2013 was zero and $0.4 million, respectively.

Line_of_Credit

Line of Credit	9 Months Ended
	Mar. 31, 2014
Line of Credit	'
Line of Credit	'
	6.  Line of Credit
	On January 31, 2014, we executed a $100 million unsecured line of credit with the Bank of America, N.A. (“Bank”) to be used for general corporate operating purposes. The line has a five year term, bears interest at the higher of the Bank’s prime rate plus 0.25% or the Federal Funds Rates plus 0.75%, or the LIBOR rate plus 1.25% and incorporates customary financial and other covenants, including but not limited to a maximum debt leverage and a minimum fixed charge coverage ratio. As of March 31, 2014, the Company was in compliance with these covenants and there were no borrowings outstanding on the line of credit during the period ended March 31, 2014.

Stock_Option_Plan

Stock Option Plan	9 Months Ended
	Mar. 31, 2014
Stock Option Plan	'
Stock Option Plan	'
	7.  Stock Option Plan
	Stock Options
	Stock option activity during nine months ended March 31, 2014 was as follows:
				Weighted-		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
		Shares		Price		Life (Years)	Value
	Outstanding, June 30, 2013	2,893,188		$	20.17	4.98	$	50,038
	Granted	269,220		27.47
	Exercised	(481,497	)	17.54
	Forfeited or canceled	(51,993	)	23.34
	Outstanding, March 31, 2014	2,628,918		$	21.37	4.74	$	7,244
	Stock options exercisable at March 31, 2014	1,815,535		$	20.12	2.88	$	12,609
	The aggregate intrinsic value of options exercised during nine months ended March 31, 2014 was $6.1 million. The weighted-average grant date fair value of options granted was $12.69 during the nine months ended March 31, 2014.
	As March 31, 2014, there was $7.3 million of total unrecognized compensation expense related to unvested stock options granted. The cost is expected to be recognized over a weighted average period of 2.3 years. During the nine months ended March 31, 2014, the Company recorded additional stock-based compensation of $1.5 million associated with accelerated vesting of option awards to our former Chief Executive Officer and other employees upon termination of employment. During the three months ended March 31, 2014 and March 31, 2013, the Company recognized $0.9 million and $1.1 million, respectively, of stock-based compensation expense related to stock options. During nine months ended March 31, 2014 and March 31, 2013, the Company recognized $4.6 million and $3.2 million, respectively, of stock-based compensation expense related to stock options.
	Restricted Stock Awards
	Restricted stock award activity during nine months ended March 31, 2014 was as follows:
				Weighted-
				Average
		Shares		Fair Value
	Outstanding, June 30, 2013	928,137		$	22.97
	Granted	693,354		31.53
	Vested	(457,390	)	25.13
	Forfeited or canceled	(51,820	)	27.36
	Outstanding, March 31, 2014	1,112,281		$	27.4
	As of March 31, 2014, there was $21.5 million of total unrecognized compensation expense related to unvested restricted stock awards granted. The cost is expected to be recognized over a weighted average period of 2.3 years. The total fair value of shares vested during nine months ended March 31, 2014 was $11.5 million. During the nine months ended March 31, 2014, the Company recorded additional stock-based compensation of $2.5 million associated with accelerated vesting of equity awards to our former Chief Executive Officer and other employees upon termination of employment. During the three months ended March 31, 2014 and March 31, 2013, the Company recognized $3.1 million and $2.9 million, respectively, of stock-based compensation expense related to restricted stock awards. During nine months ended March 31, 2014 and March 31, 2013, the Company recognized $11.6 million and $6.6 million, respectively, of stock-based compensation expense related to restricted stock awards.

Related_Party_Transactions

Related Party Transactions	9 Months Ended
	Mar. 31, 2014
Related Party Transactions	'
Related Party Transactions	'
	8.  Related PartyTransactions
	For the three months ended March 31, 2014 and March 31, 2013, the Company purchased services in the amount of zero and $0.1 million, respectively from Knowledge Universe Technologies (“KUT”) pursuant to a Transition Services Agreement related to the Company’s acquisition of KCDL, as well as other administrative services. KUT is an affiliate of Learning Group, LLC, which was a related party until September 2013. For the nine months ended March 31, 2014 and March 31, 2013, the Company purchased services in the amount of zero and $0.3 million, respectively.
	During the nine months ended March 31, 2014, in accordance with the original terms of the joint venture agreement, the Company loaned $1.0 million to its 60% owned joint venture, MIL. At March 31, 2014 and June 30, 2013, the loan totaled $4.0 million and $3.0 million, respectively, and was repayable under terms and conditions specified in the loan agreement. The loan balance and related interest are eliminated since MIL is consolidated in the Company’s financial statements; however, repayment of the loan is dependent on the continued liquidity of MIL.

Commitments_and_Contingencies

Commitments and Contingencies	9 Months Ended
	Mar. 31, 2014
Commitments and Contingencies	'
Commitments and Contingencies	'
	9.  Commitments and Contingencies
	Litigation
	In the ordinary conduct of business, the Company is subject to lawsuits, arbitrations and administrative proceedings from time to time. The Company expenses legal costs as incurred.
	IpLearn
	On October 26, 2011, IpLearn, LLC (“IpLearn”) filed a complaint for patent infringement against the Company in the United States District Court for the District of Delaware, IpLearn, LLC v. K12 Inc., Case No. 1:11-1026-LPS, which it subsequently amended on November 18, 2011. IpLearn is a privately-held technology development and licensing company for web and computer-based learning technologies. In its complaint, IpLearn alleges that the Company has infringed three of its patents for various computer-aided learning methods and systems and it is primarily seeking an injunction enjoining K12 from any continued infringement as well as an award of unspecified monetary damages. On July 2, 2012, the court granted the Company’s motion to dismiss IpLearn’s allegations of indirect patent infringement and allowed IpLearn’s allegations of direct patent infringement to proceed. On January 15, 2013, the court approved a stay of IpLearn’s claims alleging infringement of one of the three patents in the case involving technology licensed to K12 by a third party. The discovery process is currently in progress and the claims construction hearings were held on September 30, 2013. At March 31, 2014 and June 30, 2013, the Company had not recorded a liability as a loss was neither probable nor estimable.
	Oklahoma Firefighters Complaint
	On January 30, 2014, a securities class-action lawsuit captioned Oklahoma Firefighters Pension & Retirement System v. K12 Inc., et al., was filed against the Company, four of its officers and directors, and a former officer, in the United States District Court for the Eastern District of Virginia, Oklahoma Firefighters Pension & Retirement System v. K12, Inc., Case No. 1:14-CV-108-AJT-JFA (the “Oklahoma Firefighters Complaint”). The plaintiff purports to represent a class of persons who purchased or otherwise acquired K12 common stock between March 11, 2013 and October 9, 2013, inclusive, and alleges violations by the defendants of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder. The Oklahoma Firefighters Complaint alleges, among other things, that the defendants made false or misleading statements of material fact, or failed to disclose material facts, about (i) the Company’s enrollment and revenue growth prospects for fiscal 2014, and (ii) the Company’s compliance with state regulations governing enrollment. The plaintiff seeks unspecified monetary damages and other relief. The Company intends to defend vigorously against the claims asserted in the Oklahoma Firefighters Complaint.

Investments

Investments	9 Months Ended
	Mar. 31, 2014
Investments	'
Investments	'
	10.  Investments
	Investment in Web International Education Group Ltd. (Web)
	In January 2011, the Company invested $10.0 million to obtain a 20% minority interest in Web International Group, Ltd. (“Web”), a provider of English language learning centers in cities throughout China. From January 2011 through May 2013, the Company recorded its investment in Web as an available for sale debt security because of the ability to put the investment to other Web shareholders in return for the original $10.0 million investment plus interest. The Company’s option to purchase no less than 51% of Web expired on March 31, 2013 and on May 6, 2013, the Company exercised its right to put its investment back to Web for return of its original $10.0 million investment plus interest of 8%, which Web is contractually required to pay by May 6, 2014. The Company reclassified this $10.0 million investment plus accrued interest of $2.4 million to a receivable, which is included in other current assets. During the three months ended March 31, 2014 and March 31, 2013, the Company recorded interest income of $0.2 million and zero, respectively, associated with Web. During the nine months ended March 31, 2014 and March 31, 2013, the Company recorded interest income of $0.6 million and zero, respectively, associated with Web.
	Investment in School Mortgage
	On September 11, 2013, the Company issued a mortgage note (“Mortgage”) lending $2.1 million to a managed school partner. The note bears interest at a fixed rate of 5.25% per year and has a term of five years. Monthly principal and interest payments will be made beginning October 2013 with a final balloon payment of $1.8 million at the term of the loan. The Mortgage is primarily secured by the underlying property.
	The Mortgage and ancillary documents include customary affirmative and financial covenants for secured transactions of this type. The Company has recorded this as a held to maturity investment and the current amounts are included in other current assets while the non-current amounts are included in deposits and other assets on the balance sheet.

Supplemental_Disclosure_of_Cas

Supplemental Disclosure of Cash Flow Information	9 Months Ended
	Mar. 31, 2014
Supplemental Disclosure of Cash Flow Information	'
Supplemental Disclosure of Cash Flow Information	'
	11.  Supplemental Disclosure of Cash Flow Information
		Nine Months Ended
		March 31,
		2014		2013
		(In thousands)
	Cash paid for interest	$	879	$	895
	Cash paid for taxes, net of refunds	$	4,865	$	510
	Supplemental disclosure of non-cash investing and financing activities:
	New capital lease obligations	$	19,090	$	24,671

Common_Stock_Repurchases

Common Stock Repurchases	9 Months Ended
	Mar. 31, 2014
Common Stock Repurchases	'
Common Stock Repurchases	'
	12.  Common Stock Repurchases
	On November 4, 2013, the Board of Directors authorized the repurchase of up to $75.0 million of the Company’s outstanding common stock over a two year period. Any purchases under the buyback are dependent upon business and market conditions and other factors. The stock purchases are made from time to time and may be made through a variety of methods including open market purchases and in accordance with the SEC’s Rule 10b5-1. For the three months ended March 31, 2014, the Company paid approximately $20.7 million for the repurchase of 958,100 shares. For the nine months ended March 31, 3014, the Company paid approximately $26.6 million under the plan for the repurchase of 1,242,300 shares. As of March 31, 2014, the approximate dollar amount of shares yet to be repurchased under the plan was $48.4 million.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2014

Summary of Significant Accounting Policies

'

Revenue Recognition

'

Revenue Recognition

Revenues are principally earned from long-term contractual agreements to provide online curriculum, books, materials, computers and management services to virtual and blended public schools, traditional schools, school districts, public charter schools, and private schools. In addition to providing the curriculum, books and materials, under most contracts, the Company manages virtual and blended public schools, including monitoring academic achievement, teacher hiring and training, compensation of school personnel, financial management, enrollment processing and procurement of curriculum, equipment and required services. The schools receive funding on a per student basis from the state in which the public school or school district is located. Shipments of materials for schools that occur in the fourth fiscal quarter and for the upcoming school year are recorded in deferred revenues.

Where the Company provides turn-key management service and it has determined that it is the primary obligor for substantially all expenses under these contracts, the Company records the associated per student revenue received by the school from its state funding school district up to the expenses incurred in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition. For contracts where the Company is not the primary obligor, the Company records revenue based on its net fees earned under the contractual agreement. As a result of being the primary obligor, amounts recorded as revenues and school operating expenses for the three months ended March 31, 2014 and March 31, 2013 were $71.3 million and $66.8 million, respectively, and for the nine months ended March 31, 2014 and March 31, 2013 were $190.8 million and $178.3 million, respectively.

The Company generates revenues under contracts with virtual and blended public schools which include multiple elements. These elements include providing each of a school’s students with access to the Company’s online curriculum; offline learning kits, which include books and materials to supplement the online lessons; the use of a personal computer and associated reclamation services; internet access and technology support services; the services of a state-certified teacher; and management and technology services required to operate a virtual public or blended school. In certain managed school contracts, revenue is determined directly by per enrollment funding.

The Company has determined that the elements of its contracts are valuable to schools in combination, but do not have standalone value. As a result, the elements within the Company’s multiple-element contracts do not qualify for separate units of accounting. Accordingly, the Company accounts for revenues under multiple element arrangements as a single unit of accounting and recognizes the entire arrangement based upon the approximate rate at which it incurs the costs associated with each element. Revenue from certain managed schools is recognized ratably over the period services are performed.

Under the contracts where the Company provides turn-key management services to schools, the Company has generally agreed to absorb any cumulative operating losses of the schools over the respective contract period. These school operating losses represent the excess of costs incurred over revenues earned by the virtual or blended public school as reflected on its respective financial statements, including Company charges to the schools. A school operating loss in one year does not necessarily mean the Company anticipates losing money on the entire contract with the school. However, a school operating loss may reduce the Company’s ability to collect its management fees in full and recognized revenues are reduced accordingly to reflect the expected cash collections from such schools. The Company amortizes the estimated school operating loss against revenues based upon the percentage of actual revenues in the period to total estimated revenues for the fiscal year. Management periodically reviews its estimates of full year school revenues and operating expenses and amortizes the net impact of any changes to these estimates proportionately over the fiscal year. Actual school operating losses may vary from these estimates or revisions, and the impact of these differences could have a material impact on results of operations. Since the end of the school year coincides with the end of the Company’s fiscal year, annual revenues are generally based on actual school revenues and actual costs incurred in the calculation of school operating losses.

The Company provides certain online curriculum and services to schools and school districts under subscription and perpetual license agreements. Revenue under these agreements is recognized in accordance with ASC 605 when all of the following conditions are met: there is persuasive evidence of an arrangement; delivery has occurred or services have been rendered; the amount of fees to be paid by the customer is fixed and determinable; and the collectability of the fee is probable. Revenue from the licensing of curriculum under subscription arrangements is recognized on a ratable basis over the subscription period. Revenue from the licensing of curriculum under non-cancelable perpetual arrangements is recognized when all revenue recognition criteria have been met. Revenue from professional consulting, training and support services are deferred and recognized ratably over the service period.

Other revenues are generated from individual customers who prepay and have access for 12 to 24 months to Company-provided online curriculum. The Company recognizes these revenues pro rata over the maximum term of the customer contract. Revenues from associated offline learning kits are recognized upon shipment.

During the three months ended March 31, 2014 and March 31, 2013, the Company had contracts with two schools that represented approximately 14% and 10% of revenues. The percentage of revenues for these two schools is not indicative of the percentage of revenues for the full year. Approximately 7% of accounts receivable was attributable to a contract with one school as of March 31, 2014 and June 30, 2013. During the nine months ended March 31, 2014, the Company had contracts with two managed public schools that represented approximately 13% and 10% of revenues. During the nine months ended March 31, 2013, the Company had contracts with two managed public schools that represented approximately 14% and 10% of revenues.

Consolidation

'

Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned and affiliated companies owned, directly or indirectly, and all controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Inventories

'

Inventories

Inventories consist primarily of textbooks and curriculum materials, a majority of which are supplied to managed public schools and blended public schools and utilized directly by students. Inventories represent items that are purchased and held for sale and are recorded at the lower of cost (first-in, first-out method) or market value. The Company records a provision for excess and obsolete inventory when impairment has been identified. The Company writes down its inventory for estimated excess or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions. During the nine months ended March 31, 2014, the Company increased the provision for excess and obsolete inventory by $6.1 million primarily related to the decision to discontinue certain products and excess inventory relative to anticipated demand. The excess and obsolete inventory reserve was $9.0 million and $4.9 million at March 31, 2014 and June 30, 2013, respectively.

Other Current Assets

'

Other Current Assets

Other current assets consist primarily of textbooks, curriculum materials and other supplies which are expected to be returned upon the completion of the school year. Materials not returned are expensed as part of instructional costs and services.

Property and Equipment

'

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation expense is calculated using the straight-line method over the estimated useful life of the asset (or the lesser of the term of the lease and the estimated useful life of the asset under capital lease). Amortization of assets capitalized under capital lease arrangements is included in depreciation expense. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful life of the asset. The Company determines the lease term in accordance with ASC 840, Leases, as the fixed non-cancelable term of the lease plus all periods for which failure to renew the lease imposes a penalty on the lessee in an amount such that renewal appears, at the inception of the lease, to be reasonably assured. Depreciation expense for the three months ended March 31, 2014 and March 31, 2013 was $9.2 million and $8.0 million, respectively. Depreciation expense for the nine months ended March 31, 2014 and March 31, 2013 was $32.1 million and $23.8 million, respectively, which, for the nine months ended March 31, 2014, includes accelerated expenses described below.

Property and equipment are depreciated over the following useful lives:

Useful Life

Student computers

3 years

Computer hardware

3 years

Computer software

3-5 years

Web site development costs

3 years

Office equipment

5 years

Furniture and fixtures

7 years

Leasehold improvements

3-12 years

During the nine months ended March 31, 2014, the Company updated the estimate of unreturned computers based on an analysis of recent trends of returns and utilization rates, as well as information obtained from the student computer processing systems. As a result, the Company recorded accelerated depreciation of $6.3 million for computers that we estimate will not be returned by our students.

Capitalized Software

'

Capitalized Software

The Company develops software for internal use. Software development costs incurred during the application development stage are capitalized in accordance with ASC 350, Intangibles — Goodwill and Other. The Company amortizes these costs over the estimated useful life of the software, which is generally three years. Capitalized software development costs are stated at cost less accumulated amortization.

Capitalized software development additions totaled $18.5 million and $17.9 million for the nine months ended March 31, 2014 and March 31, 2013, respectively. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $3.9 million and $3.6 million, respectively. During the nine months ended March 31, 2014, the Company wrote down approximately $3.8 million of capitalized software projects after determining the assets either have no future use or are being sunset. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $15.3 million and $10.3 million, respectively. The amortization expense for the nine months ended March 31, 2014 included the write down.

Capitalized Curriculum Development Costs

'

Capitalized Curriculum Development Costs

The Company internally develops curriculum, which is primarily provided as online content and accessed via the Internet. The Company also creates textbooks and other materials that are complementary to online content.

The Company capitalizes curriculum development costs incurred during the application development stage in accordance with ASC 350. The Company capitalizes curriculum development costs during the design and deployment phases of the project. Many of the Company’s new courses leverage off of proven delivery platforms and are primarily content, which has no technological hurdles. As a result, a significant portion of the Company’s courseware development costs qualify for capitalization due to the concentration of its development efforts on the content of the courseware. Capitalization ends when a course is available for general release to its customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs will be amortized is generally five years.

Capitalized curriculum development additions were $11.3 million and $13.6 million for the nine months ended March 31, 2014 and March 31, 2013, respectively. These amounts are recorded on the accompanying condensed consolidated balance sheets net of amortization charges. In addition, the Company wrote down approximately $2.2 million of capitalized curriculum development costs due to its decision to discontinue certain curriculum during the nine months ended March 31, 2014. Amortization is recorded in product development expenses on the accompanying condensed consolidated statements of operations. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $4.3 million and $3.6 million, respectively. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $14.7 million and $10.7 million, respectively. The amortization expense for the nine months ended March 31, 2014 included the write down.

Income Taxes

'

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are computed based on the difference between the financial reporting and income tax bases of assets and liabilities using the enacted marginal tax rate. ASC 740 requires that the net deferred tax asset be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the net deferred tax asset will not be realized.

Series A Special Stock

'

Series A Special Stock

The Company issued 2,750,000 shares of Series A Special stock in July 2010 in connection with an acquisition. The holders of the Series A Special stock had the right to convert those shares into common stock on a one-for-one basis and the right to vote on all matters presented to K12 stockholders, other than for the election and removal of directors, for which holders of the Series A Special stock had no voting rights. These shares were converted into common stock on September 3, 2013 and no Series A Special stock remains outstanding as of March 31, 2014.

Noncontrolling Interest

'

Noncontrolling Interest

Earnings or losses attributable to other stockholders of a consolidated affiliated company are classified separately as “noncontrolling interest” in the Company’s condensed consolidated statements of operations. Net (income) loss attributable to noncontrolling interest reflects only the Company’s share of the after-tax earnings or losses of an affiliated company. Income taxes attributable to noncontrolling interest are determined using the applicable statutory tax rates in the jurisdictions where such operations are conducted. These rates vary from country to country. The Company’s condensed consolidated balance sheets reflect the noncontrolling interest within the equity section of the condensed consolidated balance sheets rather than in the mezzanine section of the condensed consolidated balance sheets, except for redeemable noncontrolling interest. Noncontrolling interest is classified separately in the Company’s condensed consolidated statements of equity (deficit).

Redeemable Noncontrolling Interests

'

Redeemable Noncontrolling Interests

Noncontrolling interests in subsidiaries that are redeemable outside of the Company’s control for cash or other assets are classified outside of permanent equity at redeemable value which approximates fair value. The redeemable noncontrolling interests are adjusted to their fair value at each balance sheet date. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.

Goodwill and Intangible Assets

'

Goodwill and Intangible Assets

The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired. Finite-lived intangible assets acquired in business combinations subject to amortization are recorded at their fair value. Finite-lived intangible assets include trade names, customer and distributor relationships and developed technology. Such intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the three months ended March 31, 2014 and March 31, 2013 was $0.7 million and $1.1 million, respectively. Amortization expense for the nine months ended March 31, 2014 and March 31, 2013 was $7.4 million and $3.4 million, respectively. Future amortization of intangible assets is $0.7 million, $2.6 million, $2.5 million, $2.0 million and $2.0 million in the fiscal years ending June 30, 2014 through June 30, 2018, respectively, and $15.0 million thereafter.

The Company reviews its recorded finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.

ASC 350 prescribes a process for impairment testing of goodwill and intangible assets with indefinite lives, which is performed annually, as well as when an event triggering impairment may have occurred. Goodwill and intangible assets deemed to have an indefinite life are tested for impairment on an annual basis, or earlier when events or changes in circumstances suggest the carrying amount may not be fully recoverable. The Company has elected to perform its annual assessment on May 31 of each year.

The following table represents goodwill activity for the nine months ended March 31, 2014:

Amount

Rollforward of Goodwill

$(in thousands)

Balance as of June 30, 2013

$

61,413

Adjustments due to other foreign exchange translations

168

Balance as of March 31, 2014

$

61,581

The following table represents the balance of intangible assets as of March 31, 2014 and June 30, 2013:

March 31, 2014

June 30, 2013

($ in millions)

Gross

Accumulated

Net

Gross

Accumulated

Net

Carrying

Amortization

Carrying

Carrying

Amortization

Carrying

Amount

Value

Amount

Value

Trade names

$

17.4

$

(4.2

)

$

13.2

$

24

$

(5.1

)

$

18.9

Customer and distributor relationships

18.9

(7.7

)

11.2

18.9

(6.5

)

12.4

Developed technology

1.5

(1.4

)

0.1

1.5

(1.0

)

0.5

Other

0.5

(0.2

)

0.3

0.5

(0.2

)

0.3

$

38.3

$

(13.5

)

$

24.8

$

44.9

$

(12.8

)

$

32.1

During the second quarter of fiscal year 2014, the Company determined that based on rebranding of the Institutional business, the Company fully amortized certain trade names that are no longer going to be used and recorded a $5.2 million impairment charge for the nine months ended March 31, 2014. There was no impairment charge for the three months ended March 31, 2014 or the three and nine months ended March 31, 2013.

Impairment of Long-Lived Assets

'

Impairment of Long-Lived Assets

Long-lived assets include property, equipment, capitalized curriculum and software developed or obtained for internal use. In accordance with ASC 360, the Company reviews its recorded long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.

Fair Value Measurements

'

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1:  Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

Level 2:  Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3:  Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

The carrying values reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, receivable and debt approximate their fair values.

The redeemable noncontrolling interest is a result of the Company’s joint venture with Middlebury College to form Middlebury Interactive Languages. Under the agreement, Middlebury College has an irrevocable election to sell all (but not less than all) of its membership interest to the Company (put right). The fair value of the redeemable noncontrolling interest reflects management’s best estimate of the redemption of the put right.

The following table summarizes certain information at March 31, 2014 and June 30, 2013 for assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements Using:

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

Assets

Input

Inputs

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

(In thousands)

Redeemable Noncontrolling Interest in Middlebury Joint Venture

$

15,200

$

—

$

—

$

15,200

Total

$

15,200

$

—

$

—

$

15,200

The fair value of the redeemable noncontrolling interest in Middlebury Joint Venture was measured in accordance with ASC 480, Distinguishing Liabilities from Equity, and was based upon a valuation from a third-party valuation firm as of June 30, 2013. As of March 31, 2014, the Company performed an internal analysis and determined there was no underlying change in the estimated fair market value. This analysis incorporated a number of assumptions and estimates including the financial results of the joint venture to date.

Earnings Per Common Share

'

Earnings Per Common Share

The Company calculates net income per share in accordance with ASC 260, Earnings Per Share. Under ASC 260, basic net income per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted earnings per share (“EPS”) reflect the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options. The dilutive effect of stock options and restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted earnings per share when they are antidilutive. Common stock outstanding reflected in the Company’s consolidated balance sheets include restricted stock awards outstanding. Securities that may participate in undistributed earnings with common stock are considered participating securities. The Series A Special stock was considered participating until all shares were converted into common stock on September 3, 2013. Participating securities are included in the computation of both basic and diluted EPS (as a reduction of the numerator) using the two-class method. Under the two-class method, all undistributed earnings in a period are allocated to common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. EPS is presented using the two-class method in the three and nine months ended March 31, 2013 only, since the Series A Special stock was outstanding.

The following schedule presents the calculation of basic and diluted net income per share:

Three Months Ended

Nine Months Ended March

March 31,

31,

2014

2013

2014

2013

(In thousands except shares and per share data)

Basic and dilutive earnings (loss) per share computation:

Net income — K12

$

15,949

$

11,975

$

7,244

$

25,842

Amount allocated to participating Series A stockholders

—

(844

)

—

(1,827

)

Income available to common stockholders — basic and diluted

$

15,949

$

11,131

$

7,244

$

24,015

Weighted average common shares — basic and diluted

39,596,798

36,283,353

39,136,667

36,142,689

Basic and diluted net income per share

$

0.4

$

0.31

$

0.19

$

0.66

The basic and diluted weighted average common shares were the same for the three and nine months ended March 31, 2014 and March 31, 2013, as the inclusion of dilutive securities were out of the money based on a lower average stock price during the period and Series A special stock prior to the conversion date would have been anti-dilutive. At March 31, 2014, we had 41,138,238 shares issued and 39,895,938 shares outstanding, which included the 2,750,000 common shares associated with the Series A special stock conversion which occurred on September 3, 2013.

Recent Accounting Pronouncements

'

Recent Accounting Pronouncements

Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future financial statements.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Schedule of useful lives of property and equipment	'
		Useful Life
	Student computers	3 years
	Computer hardware	3 years
	Computer software	3-5 years
	Web site development costs	3 years
	Office equipment	5 years
	Furniture and fixtures	7 years
	Leasehold improvements	3-12 years
Schedule of goodwill activity	'
		Amount
	Rollforward of Goodwill	$(in thousands)
	Balance as of June 30, 2013	$	61,413
	Adjustments due to other foreign exchange translations	168
	Balance as of March 31, 2014	$	61,581
Schedule of intangible assets	'
		March 31, 2014							June 30, 2013
	($ in millions)	Gross		Accumulated			Net		Gross			Accumulated			Net
		Carrying		Amortization			Carrying		Carrying			Amortization			Carrying
		Amount					Value		Amount						Value
	Trade names	$	17.4	$	(4.2	)	$	13.2	$	24		$	(5.1	)	$	18.9
	Customer and distributor relationships	18.9		(7.7		)	11.2		18.9			(6.5		)	12.4
	Developed technology	1.5		(1.4		)	0.1		1.5			(1.0		)	0.5
	Other	0.5		(0.2		)	0.3		0.5			(0.2		)	0.3
		$	38.3	$	(13.5	)	$	24.8	$	44.9		$	(12.8	)	$	32.1
Schedule of assets and liabilities measured at fair value on a recurring basis	'
	The following table summarizes certain information at March 31, 2014 and June 30, 2013 for assets and liabilities measured at fair value on a recurring basis:
		Fair Value Measurements Using:
				Quoted Prices
				in Active			Significant
				Markets for			Other		Significant
				Identical			Observable		Unobservable
				Assets			Input		Inputs
	Description	Fair Value		(Level 1)			(Level 2)		(Level 3)
		(In thousands)
	Redeemable Noncontrolling Interest in Middlebury Joint Venture	$	15,200	$	—		$	—	$	15,200
	Total	$	15,200	$	—		$	—	$	15,200
Schedule of calculation of basic and diluted net income per share	'
		Three Months Ended					Nine Months Ended March
		March 31,					31,
		2014		2013			2014		2013
		(In thousands except shares and per share data)
	Basic and dilutive earnings (loss) per share computation:
	Net income — K12	$	15,949	$	11,975		$	7,244	$	25,842
	Amount allocated to participating Series A stockholders	—		(844		)	—		(1,827		)
	Income available to common stockholders — basic and diluted	$	15,949	$	11,131		$	7,244	$	24,015
	Weighted average common shares — basic and diluted	39,596,798		36,283,353			39,136,667		36,142,689
	Basic and diluted net income per share	$	0.4	$	0.31		$	0.19	$	0.66

Longterm_Obligations_Tables

Long-term Obligations (Tables)	9 Months Ended
	Mar. 31, 2014
Long-term Obligations	'
Summary of present value of the net minimum payments due on outstanding capital leases	'
	The following is a summary as of March 31, 2014 of the present value of the net minimum payments due on outstanding capital leases and the note payable under the Company’s commitments:
		Capital
	June 30,	Leases
		($ in thousands)
	2014	6,296
	2015	19,352
	2016	10,266
	2017	2,760
	Total minimum payments	38,674
	Less amount representing interest (imputed weighted average capital lease interest rate of 2.8%)	(1,069		)
	Net minimum payments	37,605
	Less current portion	(20,954		)
	Present value of minimum payments, less current portion	$	16,651

Stock_Option_Plan_Tables

Stock Option Plan (Tables)	9 Months Ended
	Mar. 31, 2014
Stock Option Plan	'
Schedule of stock option activity	'
				Weighted-		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
		Shares		Price		Life (Years)	Value
	Outstanding, June 30, 2013	2,893,188		$	20.17	4.98	$	50,038
	Granted	269,220		27.47
	Exercised	(481,497	)	17.54
	Forfeited or canceled	(51,993	)	23.34
	Outstanding, March 31, 2014	2,628,918		$	21.37	4.74	$	7,244
	Stock options exercisable at March 31, 2014	1,815,535		$	20.12	2.88	$	12,609
Schedule of restricted stock award activity	'
				Weighted-
				Average
		Shares		Fair Value
	Outstanding, June 30, 2013	928,137		$	22.97
	Granted	693,354		31.53
	Vested	(457,390	)	25.13
	Forfeited or canceled	(51,820	)	27.36
	Outstanding, March 31, 2014	1,112,281		$	27.4

Supplemental_Disclosure_of_Cas1

Supplemental Disclosure of Cash Flow Information (Tables)	9 Months Ended
	Mar. 31, 2014
Supplemental Disclosure of Cash Flow Information	'
Schedule of supplemental disclosure of cash flow information	'
		Nine Months Ended
		March 31,
		2014		2013
		(In thousands)
	Cash paid for interest	$	879	$	895
	Cash paid for taxes, net of refunds	$	4,865	$	510
	Supplemental disclosure of non-cash investing and financing activities:
	New capital lease obligations	$	19,090	$	24,671

Description_of_the_Business_De

Description of the Business (Details)	9 Months Ended
	Mar. 31, 2014
	item
Description of the Business	'
Number of states in which Company provides management services to public schools	33

Basis_of_Presentation_Details

Basis of Presentation (Details)	9 Months Ended
	Mar. 31, 2014
	item
Basis of Presentation	'
Number of operating segments	1
Number of reportable business segments	1

Summary_of_Significant_Account3

Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Revenue recognition	'	'	'	'
Amounts recorded as revenues and school operating expenses	$71.30	$66.80	$190.80	$178.30
Minimum	'	'	'	'
Revenue recognition	'	'	'	'
Duration of contracts providing access to curriculum via the entity's Web site	'	'	'12 months	'
Maximum	'	'	'	'
Revenue recognition	'	'	'	'
Duration of contracts providing access to curriculum via the entity's Web site	'	'	'24 months	'

Summary_of_Significant_Account4

Summary of Significant Accounting Policies (Details 2) (USD $)

9 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

3 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

In Millions, unless otherwise specified

Mar. 31, 2014

Jun. 30, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Jun. 30, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Revenue

Revenue

Revenue

Revenue

Accounts receivable

Accounts receivable

Customer A

Customer A

Customer A

Customer A

Customer B

Customer B

Customer B

Customer B

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

customer

customer

Revenue

Revenue

Revenue

Revenue

Revenue

Revenue

Revenue

Revenue

customer

customer

customer

customer

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Customer concentration risk

Concentration of revenues

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Concentration risk (as a percent)

'

'

'

'

'

'

7.00%

7.00%

14.00%

14.00%

13.00%

14.00%

10.00%

10.00%

10.00%

10.00%

Number of customers with concentration

'

'

2

2

2

2

1

1

'

'

'

'

'

'

'

'

Inventories

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Increase in provision for excess and obsolete inventory

$6.10

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Excess and obsolete inventory reserve

$9

$4.90

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Summary_of_Significant_Account5

Summary of Significant Accounting Policies (Details 3) (USD $)	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Property and equipment	'	'	'	'
Depreciation expense	$9,200,000	$8,000,000	$32,100,000	$23,800,000
Accelerated depreciation	'	'	6,300,000	'
Capitalized Curriculum Development Costs	'	'	'	'
Estimated useful life of the software	'	'	'5 years	'
Capitalized curriculum development costs	'	'	11,324,000	13,597,000
Capitalized curriculum development costs write down	'	'	2,200,000	'
Amortization expense	4,300,000	3,600,000	14,700,000	10,700,000
Student computers	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Computer hardware	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Computer software | Minimum	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Computer software | Maximum	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'5 years	'
Web site development costs	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Office equipment	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'5 years	'
Furniture and fixtures	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'7 years	'
Leasehold improvements | Minimum	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Leasehold improvements | Maximum	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'12 years	'
Capitalized software	'	'	'	'
Property and equipment	'	'	'	'
Useful Life	'	'	'3 years	'
Capitalized software development additions	'	'	18,500,000	17,900,000
Capitalized software write down	'	'	3,800,000	'
Amortization expense	$3,900,000	$3,600,000	$15,300,000	$10,300,000

Summary_of_Significant_Account6

Summary of Significant Accounting Policies (Details 4) (Series A Special Stock)	1 Months Ended	9 Months Ended
	Jul. 31, 2010	Mar. 31, 2014	Jun. 30, 2013
Series A Special Stock	'	'	'
Series A Special Stock	'	'	'
Issuance of Special A Stock in connection with acquisition (in shares)	2,750,000	'	'
Conversion into common stock ratio	'	1	'
Number of Series A Special stock outstanding (in shares)	'	0	2,750,000

Summary_of_Significant_Account7

Summary of Significant Accounting Policies (Details 5) (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014
Rollforward of Goodwill	'
Balance at the beginning of the period	$61,413
Adjustments due to other foreign exchange translations	168
Balance at the end of the period	$61,581

Summary_of_Significant_Account8

Summary of Significant Accounting Policies (Details 6) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Jun. 30, 2013
Intangible Assets:	'	'	'	'	'
Amortization expense	$0.70	$1.10	$7.40	$3.40	'
Gross Carrying Amount	38.3	'	38.3	'	44.9
Accumulated Amortization	-13.5	'	-13.5	'	-12.8
Net Carrying Value	24.8	'	24.8	'	32.1
Impairment	0	0	5.2	0	'
Future amortization of intangible assets	'	'	'	'	'
2014	0.7	'	0.7	'	'
2015	2.6	'	2.6	'	'
2016	2.5	'	2.5	'	'
2017	2	'	2	'	'
2018	2	'	2	'	'
Thereafter	15	'	15	'	'
Trade names	'	'	'	'	'
Intangible Assets:	'	'	'	'	'
Gross Carrying Amount	17.4	'	17.4	'	24
Accumulated Amortization	-4.2	'	-4.2	'	-5.1
Net Carrying Value	13.2	'	13.2	'	18.9
Customer and distributor relationships	'	'	'	'	'
Intangible Assets:	'	'	'	'	'
Gross Carrying Amount	18.9	'	18.9	'	18.9
Accumulated Amortization	-7.7	'	-7.7	'	-6.5
Net Carrying Value	11.2	'	11.2	'	12.4
Developed technology	'	'	'	'	'
Intangible Assets:	'	'	'	'	'
Gross Carrying Amount	1.5	'	1.5	'	1.5
Accumulated Amortization	-1.4	'	-1.4	'	-1
Net Carrying Value	0.1	'	0.1	'	0.5
Other	'	'	'	'	'
Intangible Assets:	'	'	'	'	'
Gross Carrying Amount	0.5	'	0.5	'	0.5
Accumulated Amortization	-0.2	'	-0.2	'	-0.2
Net Carrying Value	$0.30	'	$0.30	'	$0.30

Summary_of_Significant_Account9

Summary of Significant Accounting Policies (Details 7) (USD $)	Mar. 31, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Assets and liabilities measured at fair value on a recurring basis	'	'
Redeemable Noncontrolling Interest In Middlebury Joint Venture	$15,200	$15,200
Measured on a recurring basis | Fair value	'	'
Assets and liabilities measured at fair value on a recurring basis	'	'
Redeemable Noncontrolling Interest In Middlebury Joint Venture	15,200	15,200
Total	15,200	15,200
Measured on a recurring basis | Significant Unobservable Inputs (Level 3)	'	'
Assets and liabilities measured at fair value on a recurring basis	'	'
Redeemable Noncontrolling Interest In Middlebury Joint Venture	15,200	15,200
Total	$15,200	$15,200

Recovered_Sheet1

Summary of Significant Accounting Policies (Details 8) (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Jun. 30, 2013
Basic and dilutive earning (loss) per share computation:	'	'	'	'	'
Net income - K12	$15,949	$11,975	$7,244	$25,842	'
Amount allocated to participating Series A stockholders	'	-844	'	-1,827	'
Income available to common stockholders - basic	15,949	11,131	7,244	24,015	'
Income available to common stockholders - diluted	$15,949	$11,131	$7,244	$24,015	'
Weighted average common shares - basic and diluted (in shares)	39,596,798	36,283,353	39,136,667	36,142,689	'
Basic and diluted net income per share (in dollars per share)	$0.40	$0.31	$0.19	$0.66	'
Additional disclosures	'	'	'	'	'
Common stock, shares issued	41,138,238	'	41,138,238	'	37,440,662
Common stock, shares outstanding	39,895,938	'	39,895,938	'	37,440,662
Common Stock	'	'	'	'	'
Additional disclosures	'	'	'	'	'
Conversion of Series A Special Stock to common stock (in shares)	'	'	2,750,000	'	'

Income_Taxes_Details

Income Taxes (Details)	3 Months Ended		9 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Reconciliation to income tax at the statutory rate:	'	'	'	'
Effective income tax rate (as a percent)	43.30%	40.00%	37.70%	41.90%
Federal tax at statutory rates (as a percent)	'	'	35.00%	'

Longterm_Obligations_Details

Long-term Obligations (Details) (USD $)	9 Months Ended
	Mar. 31, 2014	Jun. 30, 2013
New lease line of credit	'	'
Long-term obligations	'	'
Interest rate (as a percent)	2.40%	'
Computer equipment	'	'
Long-term obligations	'	'
Net carrying value of leased student computers	$27,300,000	$31,200,000
Computer equipment | Lease line of credit	'	'
Long-term obligations	'	'
Maximum borrowing capacity	35,000,000	'
Aggregate outstanding balance under the lease line of credit	37,600,000	35,500,000
Interest rate, minimum (as a percent)	2.52%	'
Interest rate, maximum (as a percent)	3.08%	'
Payment terms of equipment lease line of credit	'36 months	'
Purchase option at the end of payment terms	$1	'

Longterm_Obligations_Details_2

Long-term Obligations (Details 2) (USD $)	9 Months Ended
	Mar. 31, 2014	Jun. 30, 2013
Minimum lease payments on capital leases	'	'
Less current portion	($20,954,000)	($19,395,000)
Present value of minimum payments, less current portion	16,651,000	16,107,000
Lease line of credit with PNC Equipment Finance, LLC	'	'
Minimum lease payments on capital leases	'	'
2014	6,296,000	'
2015	19,352,000	'
2016	10,266,000	'
2017	2,760,000	'
Total minimum payments	38,674,000	'
Less amount representing interest (imputed weighted average capital lease interest rate of 2.8%)	-1,069,000	'
Net minimum payments	37,605,000	'
Less current portion	-20,954,000	'
Present value of minimum payments, less current portion	16,651,000	'
Weighted average interest rate (as a percent)	2.80%	'
Note payable for computer software licenses and maintenance services	'	'
Minimum lease payments on capital leases	'	'
Interest rate (as a percent)	3.40%	'
Note payable, payment terms	'3 years	'
Notes payable	$0	$400,000

Line_of_Credit_Details

Line of Credit (Details) (Line of credit with the Bank of America, USD $)	0 Months Ended
In Millions, unless otherwise specified	Jan. 31, 2014	Mar. 31, 2014
Line of credit	'	'
Maximum borrowing capacity	$100	'
Borrowings outstanding under line of credit facility	'	$0
Term of debt	'5 years	'
Prime rate	'	'
Line of credit	'	'
Interest rate base	'Prime rate	'
Interest rate spread added to base rate (as a percent)	0.25%	'
Federal Funds Rate	'	'
Line of credit	'	'
Interest rate base	'Federal Funds rate	'
Interest rate spread added to base rate (as a percent)	0.75%	'
LIBOR	'	'
Line of credit	'	'
Interest rate base	'LIBOR	'
Interest rate spread added to base rate (as a percent)	1.25%	'

Stock_Option_Plan_Details

Stock Option Plan (Details) (Stock options, USD $)	9 Months Ended	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Jun. 30, 2013
Stock options	'	'
Shares	'	'
Outstanding at the beginning of the period (in shares)	2,893,188	'
Granted (in shares)	269,220	'
Exercised (in shares)	-481,497	'
Forfeited or canceled (in shares)	-51,993	'
Outstanding at the end of the period (in shares)	2,628,918	2,893,188
Weighted Average Exercise Price	'	'
Outstanding at the beginning of the period (in dollars per share)	$20.17	'
Granted (in dollars per share)	$27.47	'
Exercised (in dollars per share)	$17.54	'
Forfeited or canceled (in dollars per share)	$23.34	'
Outstanding at the end of the period (in dollars per share)	$21.37	$20.17
Additional information	'	'
Average Remaining Contractual Life	'4 years 8 months 26 days	'4 years 11 months 23 days
Aggregate Intrinsic Value	$7,244	$50,038
Stock options exercisable, Shares	1,815,535	'
Stock options exercisable, Weighted Average Exercise Price (in dollars per share)	$20.12	'
Stock options exercisable, Average Remaining Contractual Life	'2 years 10 months 17 days	'
Stock options exercisable, Aggregate Intrinsic Value	$12,609	'

Stock_Option_Plan_Details_2

Stock Option Plan (Details 2) (Stock options, USD $)	3 Months Ended		9 Months Ended
In Millions, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Stock option plan	'	'	'	'
Intrinsic value of options exercised	'	'	$6.10	'
Weighted-average grant date fair value of options granted (in dollars per share)	'	'	$12.69	'
Unrecognized compensation	7.3	'	7.3	'
Weighted average period of total unrecognized compensation expense related to unvested stock options granted	'	'	'2 years 3 months 18 days	'
Stock based compensation expense	0.9	1.1	4.6	3.2
Chief Executive Officer	'	'	'	'
Stock option plan	'	'	'	'
Stock based compensation expense	'	'	$1.50	'

Stock_Option_Plan_Details_3

Stock Option Plan (Details 3) (Restricted stock, USD $)	9 Months Ended
	Mar. 31, 2014
Restricted stock	'
Shares	'
Outstanding at the beginning of the period (in shares)	928,137
Granted (in shares)	693,354
Vested (in shares)	-457,390
Forfeited or canceled (in shares)	-51,820
Outstanding at the end of the period (in shares)	1,112,281
Weighted-Average Fair Value	'
Outstanding at the beginning of the period (in dollars per share)	$22.97
Granted (in dollars per share)	$31.53
Vested (in dollars per share)	$25.13
Forfeited or canceled (in dollars per share)	$27.36
Outstanding at the end of the period (in dollars per share)	$27.40

Stock_Option_Plan_Details_4

Stock Option Plan (Details 4) (Restricted stock, USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Stock option plan	'	'	'	'
Unrecognized compensation	$21.50	'	$21.50	'
Weighted average period of total unrecognized compensation expense related to unvested stock options granted	'	'	'2 years 3 months 18 days	'
Fair value of share-based compensation awards vested in period	'	'	11.5	'
Stock based compensation expense	3.1	2.9	11.6	6.6
Chief Executive Officer	'	'	'	'
Stock option plan	'	'	'	'
Stock based compensation expense	'	'	$2.50	'

Related_Party_Transactions_Det

Related Party Transactions (Details) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Jun. 30, 2013
	Knowledge Universe Technologies (KUT)	Knowledge Universe Technologies (KUT)	Knowledge Universe Technologies (KUT)	Knowledge Universe Technologies (KUT)	Middlebury Interactive Languages LLC (MIL)	Middlebury Interactive Languages LLC (MIL)
Related Party Transactions	'	'	'	'	'	'
Purchases of services and assets	$0	$0.10	$0	$0.30	'	'
Amount of loan advanced	'	'	'	'	1	'
Ownership interest in joint venture (as a percent)	'	'	'	'	60.00%	'
Amount due from joint venture	'	'	'	'	$4	$3

Commitments_and_Contingencies_

Commitments and Contingencies (Details)	0 Months Ended	9 Months Ended
	Jan. 15, 2013	Mar. 31, 2014	Jan. 31, 2014
	IpLearn	IpLearn	Oklahoma Firefighters Pension & Retirement System v. K12 Inc
	item	item	item
Commitments and contingencies	'	'	'
Number of patents allegedly infringed	'	3	'
Number of patents for which the court approved a stay of claims alleging infringement of patents	1	'	'
Number of Employees	'	'	4

Investments_Details

Investments (Details) (USD $)	9 Months Ended	1 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended		0 Months Ended
	Mar. 31, 2014	Jan. 31, 2011	6-May-13	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 11, 2013
		Web International Education Group, Ltd.(Web)	Web International Education Group, Ltd.(Web)	Web International Education Group, Ltd.(Web)	Web International Education Group, Ltd.(Web)	Web International Education Group, Ltd.(Web)	Web International Education Group, Ltd.(Web)	School mortgage
			Other current assets	Other current assets	Other current assets	Other current assets	Other current assets
Investments	'	'	'	'	'	'	'	'
Investment in Web	'	$10,000,000	'	'	'	'	'	'
Ownership percentage	'	20.00%	'	'	'	'	'	'
Option to purchase investment interest in investee (as a percent)	'	51.00%	'	'	'	'	'	'
Interest on investment (as a percent)	'	8.00%	'	'	'	'	'	5.25%
Investment reclassified	'	'	10,000,000	'	'	'	'	'
Accrued interest reclassified	'	'	2,400,000	'	'	'	'	'
Interest income on investment	'	'	'	200,000	0	600,000	0	'
Issuance of a mortgage note	2,100,000	'	'	'	'	'	'	2,100,000
Note receivable term	'	'	'	'	'	'	'	'5 years
Final payment due at term of loan	'	'	'	'	'	'	'	$1,800,000

Supplemental_Disclosure_of_Cas2

Supplemental Disclosure of Cash Flow Information (Details) (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Supplemental Disclosure of Cash Flow Information	'	'
Cash paid for interest	$879	$895
Cash paid for taxes, net of refunds	4,865	510
Supplemental disclosure of non-cash investing and financing activities:	'	'
New capital lease obligations	$19,090	$24,671

Common_Stock_Repurchases_Detai

Common Stock Repurchases (Details) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended
	Nov. 04, 2013	Mar. 31, 2014	Mar. 31, 2014
Authorized share repurchased amount	'	'	'
Share repurchase term	'2 years	'	'
Amount paid to repurchase common stock	'	$20,700,000	$26,624,000
Common stock repurchase (in shares)	'	958,100	1,242,300
Common stock amount yet to be repurchased under the plan	'	'	48,400,000
Maximum	'	'	'
Authorized share repurchased amount	'	'	'
Authorized share repurchased amount	75,000,000	'	'