THQ 2010 Annual Report Download - page 74

66
paid to B of A. We will be required to pay other customary fees, including an unused line fee based on
usage under the Credit Facility. The borrowing capacity under the Credit Facility fluctuates based upon our
levels of U.S. accounts receivable, subject to standard deductions and reserves. At March 31, 2010, we had
no borrowings under the Credit Facility and $35.0 million of available borrowing capacity. In fiscal 2010, we
incurred unused line fees amounting to less than $0.1 million; these fees are classified as general and
administrative expenses in the consolidated statements of operations.
The Credit Facility is guaranteed by most of our domestic subsidiaries (each, an “Obligor”) and secured by
substantially all of our assets.
The Credit Facility contains customary affirmative and negative covenants, including, among other terms and
conditions, limitations on our and each Obligor’s ability to: create, incur, guarantee or be liable for
indebtedness (other than certain types of permitted indebtedness); dispose of assets outside the ordinary
course (subject to certain exceptions); acquire, merge or consolidate with or into another person or entity
(other than certain types of permitted acquisitions); create, incur or allow any lien on any of their respective
properties (except for certain permitted liens); make investments or capital expenditures (other than certain
types of investments or capital expenditures); or pay dividends or make distributions (each subject to certain
limitations). In addition, the Credit Agreement provides for certain events of default such as nonpayment of
principal and interest when due there under, breaches of representations and warranties, noncompliance
with covenants, acts of insolvency and default on certain material contracts (subject to certain limitations and
cure periods). At March 31, 2010 we were in compliance with all covenants related to the Credit Facility.
13. Capital S tock Transactions
On July 31, 2007 and October 30, 2007, our board authorized the repurchase of up to $25.0 million of our
common stock from time to time on the open market or in private transactions, for an aggregate of
$50.0 million. As of March 31, 2010 and 2009 we had $28.6 million, authorized and available for common
stock repurchases. During fiscal 2010 we did not repurchase any shares of our common stock. There is no
expiration date for the authorized repurchases.
14. A ccumulated Other Comprehensive Income (Los s)
The components of accumulated other comprehensive income (loss) were as follows (in thousands):
Foreign
Currency
Tran slation
Gains
(Los ses)
Net
Unrealized
Gains
(Los ses)
on Se curities
Net A ccumulated
Other
Comprehensive
Income (Loss)
Balance at March 31, 2007............................................................ $16,107 $1,496 $17,603
Other comprehensive income ........................................................ 9,372 219 9,591
Balance at March 31, 2008............................................................ 25,479 1,715 27,194
Other comprehensive loss .............................................................. (28,019) (1,567) (29,586)
Balance at March 31, 2009............................................................ (2,540) 148 (2,392)
Other comprehensive income ........................................................ 8,978 1,281 10,259
Balance at March 31, 2010............................................................ $6,438 $1,429 $7,867
The foreign currency translation adjustments relate to indefinite investments in non-U.S. subsidiaries and
thus are not adjusted for income taxes.
15. Earnings (Loss) Per Share
Basic earnings (loss) per share is computed as net income (loss) attributable to THQ Inc. divided by the
weighted-average number of shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur from common shares issuable through stock-based compensation plans
including stock options, stock-based awards, purchase opportunities under our ESPP, and the conversion of
the Notes (see “Note 11—Convertible Senior Notes”). Under the provisions of the if-converted method, the
Notes are assumed to have been converted at the beginning of the respective period, or at the time of
issuance if later, and are included in the denominator of the diluted calculation and the after-tax interest
expense and amortization of debt issuance costs in connection with the Notes are added back to the
numerator of the diluted calculation. However, the if-converted amounts are only included in the numerator
and denominator of the diluted calculation if the result of the if-converted calculation is dilutive.