Other Long-Term Liabilities

9 Months Ended

Sep. 30, 2013

Other Long-Term Liabilities [Abstract]

6.	Other Long-Term Liabilities

Other long-term liabilities consist of the following as of December 31, 2012 and September 30, 2013 (in thousands):

	2012		2013
Deferred rent and other facility costs	$	11,650	$	12,261
Deferred payments related to acquisition		4,919		4,916
Lease incentives		3,150		2,755
Fair value of interest rate swap (see Note 3)		1,211		31
Deferred gain on sale of campus building		975		765
Unearned tuition, net of current portion		—		678
	$	21,905	$	21,406

Deferred Rent and Other Facility Costs

In accordance with the Operating Leases Subtopic, ASC 840-20 (“ASC 840-20”), the Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as a liability. Other facility costs include lease costs of non-campus facilities that are not currently in use.

Lease Incentives

In conjunction with the opening of new campuses, the Company, in some instances, was reimbursed by the lessors for improvements made to the leased properties. In accordance with ASC 840-20, these improvements were capitalized as leasehold improvements and a long-term liability was established for the reimbursements. The leasehold improvements and the liability are amortized on a straight-line basis over the corresponding lease terms, which generally range from five to 10 years.

Deferred Gain on Sale of Campus Building

In June 2007, the Company sold one of its campus buildings for $5.8 million. The Company is leasing back most of the campus building over a 10-year period. In conjunction with this sale and lease back transaction, the Company realized a gain of $2.8 million before tax, which is deferred and recognized over the 10-year lease term.

Unearned Tuition

Undergraduate students may be eligible for certain Company-sponsored scholarships. Scholarship programs generally are designed to attract new students and encourage their advancement toward a degree. Under the Strayer Graduation Fund, qualifying students are eligible to participate in one course free of charge for every three courses successfully completed by that student. The free courses typically are redeemable in the student’s final academic year of attendance. The Company’s estimate of the value of the award earned through September 30, 2013 is included in other long-term liabilities in the consolidated balance sheet.