Other Long-Term Liabilities

3 Months Ended

Mar. 31, 2014

Other Long-Term Liabilities [Abstract]

7.	Other Long-Term Liabilities

Other long-term liabilities consist of the following as of December 31, 2013 and March 31, 2014 (in thousands):

	2013		2014
Loss on facilities not in use	$	34,339	$	30,670
Deferred rent and other facility costs		8,258		8,925
Deferred payments related to acquisition		4,915		4,916
Deferred revenue, net of current portion		1,897		4,305
Lease incentives		1,353		1,245
Deferred gain on sale of campus building		694		624
	$	51,456	$	50,685

Loss on Facilities Not in Use and Deferred Rent and Other Facility Costs

The Company records lease costs of campuses and non-campus facilities that are not currently in use (see Note 3). For facilities still in use, 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.

Deferred payments related to acquisition

The Company acquired certain assets and entered into deferred payment arrangements with one of the sellers. In addition, one of the sellers contributed $2.8 million to the Company representing the seller’s continuing interest in the assets acquired.

Deferred Revenue

The Company offers certain scholarship and awards programs to students who earn the awards while they successfully complete course requirements. The Company also has licensed certain of its non-credit bearing course content to a third party. The long-term liability for deferred revenue represents the estimated value of these awards and license revenue which the Company expects will be satisfied beyond one year.

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 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.