In June 2009, the Company was awarded a $20.0 million cash grant from the State of Florida's Executive Office of the Governor's Office of Tourism, Trade and Economic Development ("OTTED") ("State Cash Grant"). In November 2009 and amended on February 22, 2010, the Company entered into a Grant Agreement and a Lease Agreement with the City of Port St. Lucie, Florida ("the City") calling for the City to provide a $10.0 million cash grant ("City Cash Grant") and approximately $50.0 million in the form of a land donation and construction financing assistance (the "Building and Land Grant"). These awards were granted as an incentive to locate operations in the State of Florida and specifically in Port St. Lucie, and to incent hiring activities, among other things, both of which will provide economic advantages to the general community. These cash awards will directly support the operations of the Company.

In November 2010, the Company entered into a Grant Agreement and Development Agreement with West Palm Beach Community Redevelopment Agency ("WPBCRA") to provide $10.0 million in the form of cash ("WPB Cash Grant"), a land donation and $15.0 million in partial take-out financing (the "WPB Building and Land Grant"). These awards were granted as an incentive to locate certain operations in the City of West Palm Beach, Florida, including the Company's educational business, to incent hiring activities and provide economic advantages to the general community.

Each grant is evaluated to determine the propriety of classification on the statement of operations and balance sheet. Those grants that are substantively reimbursements of specific costs are matched with those costs and recorded as a reduction in expenses. Those benefits that are more general in nature or driven by business performance measures are classified as revenue. As of December 31, 2011, all grants recognized in the consolidated statement of operations have been general support-type grants and are being classified as revenue.

As of December 31, 2011, a total of $27.5 million had been disbursed to the Company under the grant agreements in the form of cash grants, comprised of $20.0 million from the State Cash Grant, $5.5 million from the City Cash Grant and $2.0 million from the WPB Building and Land Grant (collectively, the "Cash Grants"). At December 31, 2011, $12.5 million of the $27.5 million received was recorded as Deferred grant revenue from governmental agencies as the conditions for recognition into the consolidated results of operations had not been met as of that date.

As of December 31, 2010, a total of $21.5 million had been disbursed to the Company under the grant agreements in the form of cash grants, comprised of $16.0 million from the State Cash Grant, and $5.5 million from the City Cash Grant. At December 31, 2010, $11.4 million of the $21.5 million received was recorded as Deferred grant revenue from governmental agencies as the conditions for recognition into the consolidated results of operations had not been met as of that date.

The Cash Grants from both the State of Florida and the City of Port St. Lucie were originally structured to be funded over a 3 to 5 year period as target thresholds of business initiation, capital investment and job creation are met, as discussed in further detail below. The cash grants are not earmarked for any particular purpose, nor restricted in use, and may be used for normal business operations.

In connection with the Building and Land Grant discussed above, the City issued bonds of $39.9 million on April 27, 2010 for the purpose of financing the construction of a building and installation of related equipment and certain associated expenses. The funds received under the bond issuance were deposited in a construction fund, which is used to fund construction expenses and equipment purchases. Of these bonds, $21.9 million are issued as Recovery Zone Facility Bonds under the Federal American Recovery and Reinvestment Act of 2009. The interest rates on the bonds range from 2.0% to 6.2%. $30.8 million of the bonds was provided for building construction and for general equipment purchases, of which $23.9 million is for building construction and $6.9 million is for general equipment purchases.

In addition to funding construction costs and equipment purchases, the bond proceeds are being used to (i) fund a deposit to the reserve fund, (ii) pay capitalized interest on the Series 2010 Bonds until March 1, 2012, and (iii) pay costs of issuance associated with the bonds. The bonds were issued with an original issue discount ("OID") of $0.7 million and mature in September 2031.

Certain grants contain covenants the Company is required to comply with regarding business initiation, capital investment, student enrollment, minimum employment levels, and maintaining headquarter facilities in certain locations. For these grants the Company recognizes grant revenue as the milestones associated with the grant are met. For years ended 2011, 2010 and 2009, the Company remains in compliance with the requirements under these grants.

Bond Maturities, Amounts, Interest Rates and Yields
(In Thousands except Percentage Amounts)

$18,040 Lease Revenue Bonds, Taxable Series 2010A										$21,860 Lease Revenue Bonds, Series 2010A (Recovery Zone Facility Bonds)

Maturity (September 1)		Amount		Interest Rate			Yield			Maturity (September 1)	Amount		Interest Rate			Yield
	2012	$	1,470		2.818	%		2.818	%	2012	$	30		2.000	%		2.270	%
	2013		1,515		3.724	%		3.724	%	2013		30		2.250	%		2.590	%
	2014		1,570		4.457	%		4.457	%	2014		35		2.750	%		2.960	%
	2015		1,640		4.757	%		4.757	%	2015		35		3.000	%		3.300	%
	2016		1,720		5.073	%		5.073	%	2016		35		3.500	%		3.750	%
	2017		1,805		5.423	%		5.423	%	2017		35		3.750	%		4.040	%
	2018		1,905		5.840	%		5.840	%	2018		35		4.000	%		4.250	%
	2019		2,015		5.990	%		5.990	%	2019		40		4.125	%		4.440	%
	2020		2,135		6.090	%		6.090	%	2020		40		4.250	%		4.600	%
	2021		2,265		6.190	%		6.190	%	2021		40		4.250	%		4.630	%

		$	18,040							2022		1,740		4.250	%		4.630	%

										2023		1,815		4.375	%		4.700	%
										2024		1,895		4.500	%		4.780	%
										2025		1,980		4.625	%		4.850	%
										2031		14,075		5.000	%		5.250	%

											$	21,860

FASB ASC Subparagraph 840-40-15-2 provides that for the construction of government-owned properties subject to a future lease of completed improvements, the Company was considered the owner of the asset under construction per FASB ASC Subparagraph 840-40-55-2 through 55-16. Therefore, in any instance where the Company effectively guarantees the City's debt, the Company is considered the owner of the construction project during the construction period. Accordingly, the Company has recorded the associated construction in progress.

The proceeds from the Bonds at the inception of the project were recorded in Cash, held in trust, and the obligation as Government bond obligation. The funds received under the bond issuance were deposited in the construction fund. Net interest was capitalized in accordance with the terms of FASB ASC Paragraph 835-20-30, which requires that net interest be recorded in relation to the construction-in-process during the construction period. Accordingly, through December 31, 2011 and 2010, the following activities have been recognized (in thousands):

	Cash Held in Trust			Property & Equipment, Net		Government Bond Obligation, Net			Accrued Interest on Bonds to be paid in Cash			Interest Expense		Accrued Construction Expenses to be funded by Cash, Held in Trust

Bond offering	$	39,900		$	—	$	(39,900	)	$	—		$	—	$	—
Issuance costs and bond discount		(1,650	)		—		1,650			—			—		—
Construction in progress		(3,408	)		3,408		—			—			—		—
Recognition of interest expense		—			—		—			(57	)		57		—
Capitalized interest, net		—			1,273		—			(1,273	)		—		—
Purchase of property and equipment place into service		(2,954	)		2,954		—			—			—		—
Amortization of OID and issuance costs		—			51		(51	)		—			—		—
Payment of accrued interest, net		(669	)		—		—			669			—		—

Balance at December 31, 2010		31,219			7,686		(38,301	)		(661	)		57		—
Construction in progress—paid by December 31, 2011		(18,644	)		18,644		—			—			—		—
Construction costs—held in retainer		—			1,789		—			—			—		(1,789	)
Recognition of interest expense, capitalized and expensed, net		—			1,859		(413	)		(1,973	)		527		—
Purchase of property and equipment place into service		(3,920	)		3,920		—			—			—		—
Amortization of OID and issuance costs		—			117		(117	)		—			—		—
Issuance cost made available for construction uses		—			63		(63	)		—			—		—
Payment of accrued interest, net		(1,973	)		—		—			1,973			—		—

Balance at December 31, 2011	$	6,682		$	34,078	$	(38,894	)	$	(661	)	$	584	$	(1,789	)

In addition to the amounts disclosed above, the Company incurred $0.7 million of primarily internal costs associated with the building project that are capitalized in accordance with ASC 310-20, and will pay approximately $0.4 million of costs over-runs accrued in the Company's Consolidated Balance Sheet as of December 31, 2011. The Company also incurred $3.0 million for leasehold improvements related to the building project.

Upon completion of the project in December 2011, the Company evaluated the transaction under FASB ASC Subtopic 360-20 to determine whether a sale transaction had occurred such that the Company would record a sales-leaseback under FASB ASC 840-40. As the Company has retained substantially all the benefits and risks incident to ownership of the property sold and the Company has the option to purchase the building and equipment at the end of the lease term ASC 360-20-40-38 dictates that the transaction must be accounted for as a financing transaction.

In accordance with being considered the owner of the asset under construction during the construction phase of the project and continues to be deemed the owner upon occupancy of the building, the Company accounts for the building and equipment, related depreciation, bond obligations, accrued interest, and cash held in trust, on its consolidated balance sheets and in its statements of operations. Interest expense associated with the bonds is being recognized using an effective rate of 7.6% based on the Company's cash flows to service the bonds requirements pursuant to the lease agreement described below. In accordance with FASB ASC 310-20, the Company considered the initial amounts held to service interest during the construction phase and the debt service reserve, as fees paid at the inception of the loan.

In January 2010, the Company entered into a lease agreement with the City of Port St. Lucie (the "Lease Agreement"), amended in April 2010, providing for the lease of the aforementioned building and related equipment. The initial lease term begins upon execution of the Lease Agreement and relates to the vacant land during the construction phase of the permanent facilities. Upon completion and occupancy of the permanent facilities, the Company began making lease payments to the City in an amount equal to the debt service of the bond/municipal financing. The building and the related land, with a fair value of $10.5 million, will be conveyed to the Company at the end of the lease term for $1 as long as the Company is not in default of its obligations under the Grant Agreement and the Lease Agreement. Pursuant to Florida Statutes, the Company's obligation to pay rent shall not be subject to cancellation, termination, or abatement until such payment of the bonds, or provision for such payment is made. Expected annual payments will range from $2.8 million to $3.8 million. As of December 31, 2011 and 2010, $2.7 million and $0.5 million are recorded as a current liability under government bond obligation, short-term, respectively. The land was recorded at fair value as a long-term asset in April 2010, concurrent with the bonds. A deferred land grant was included in Deferred grant revenue from governmental agencies in the consolidated balance sheet in 2010 and was recorded in the same amount, which will be amortized into earnings over the life of the lease.

On November 1, 2010, the Company acquired a 4.102 acre parcel of land adjacent to the above mentioned land donated by the City of Port St. Lucie. The purchase price was $1.0 million, which was reduced by the cost of certain constructed infrastructure, including road and other improvements. The estimated costs associated with these improvements were paid directly by the City of Port St. Lucie through the Grant Agreement, total $0.7 million. The remaining $0.3 million was funded through short-term borrowings. The land is recorded at cost as a long-term asset, and is included in Property and Equipment—net on the accompanying consolidated balance sheets at December 31, 2011 and 2010.

In November 2010, the Company entered into the WPB Cash Grant with WPBCRA to provide $10.0 million in the form of cash, a land donation and $15.0 million in partial take-out financing under the WPB Building and Land Grant. The cash grants from WPBCRA have been structured to be funded through December 2014 as certain targets are met for thresholds of business initiation, capital investment and student enrollment. These awards were granted as an incentive to locate certain operations in the City of West Palm Beach, Florida, including the Company's educational business, to incent hiring activities and provide economic advantages to the general community.

The agreement includes the conveyance of 2.4 acres of land in West Palm Beach, Florida with a fair market value of approximately $9.8 million. The agreement provides for the reversion of this land in the event certain requirements are not complied with relating to the construction of a building for the educational business, among other uses. In addition, in the event that the Company elects not to construct certain additional buildings on the land, the Company has the option of either returning a portion of the land to the City of West Palm Beach, or paying $3.0 million. The land was conveyed in December 2010 and recorded at fair value at that time.

In addition, in April 2011 the Company entered into a Bachelor of Fine Arts Agreement and related agreements (the "BFA Agreements") with The Florida State University ("FSU") calling for FSU to provide a Bachelor of Fine Arts degree to students in the Company's recently founded Digital Domain Institute ("DDI"), a for-profit post-secondary educational institution. The BFA Agreements call for the Company to contribute $3.2 million to FSU to fund certain start-up and other costs and for FSU to provide ongoing consulting services to the Company. The Company recently executed a lease for 8,000 square feet of temporary space adjacent to the DDI property.

In accordance with the WPB Building and Land Grant, the Company received $2.0 million in cash in May 2011, and in connection with the BFA Agreements, the Company paid $2.0 million to FSU.

The Company has received notice from the Florida Governor's Office of Film and Entertainment that five of its projects have been certified under the State of Florida's Entertainment Industry Financial Incentive Program, representing a potential total tax credit of $20.0 million. These tax credits are transferable and range from 20% to 30%. As of December 31, 2011 and 2010, no credits related to this notice have been recognized.

In February 2011, the Company received a grant from WorkForce Florida. This grant provides for a maximum of $0.4 million to be paid to the Company to train new employees over the two years ending February 2013. For the year ended December 31, 2011, the Company recognized $0.1 million of revenues from this grant. The Company does not expect to receive any additional amounts under this grant.