THQ 2010 Annual Report Download - page 71

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7. O ther Intangible Assets
Intangible assets include licenses, software development and other intangible assets. Intangible assets are
included in other long-term assets, net, except licenses and software development, which are reported
separately in the consolidated balance sheets. Other intangible assets at March 31, 2010 and 2009
consisted of the following (in thousands):
March 31, 2010
March 31, 2009
Useful
Lives
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Amount
Software technology ............................
.
2-5 years $4,009 $(4,009) $— $3,955 $(930) $3,025
Trade names .........................................
.
3-
10 years 1,102 (1,102) — 1,282 (624) 658
Non-compete / Employment
contracts.............................................
.
1.5-
6.5 years 633 (633) — 633 (615) 18
Total........................................................
.
$5,744 $(5,744) $— $5,870 $(2,169) $3,701
Finite-lived other intangible assets were amortized using the straight-line method over the lesser of their
estimated useful lives or the agreement terms, typically from one and one-half to ten years and are assessed
for impairment whenever events or changes in circumstances indicate that their carrying amount may not be
recoverable. Amortization of other intangible assets for fiscal 2010, 2009 and 2008 was $0.8 million,
$1.8 million and $1.3 million, respectively. Additionally, in fiscal 2010 we recognized $2.9 million of
restructuring charges related to the write-off of intangible assets related to our fiscal 2009 realignment plan.
8. O ther Long-Term Assets
In addition to other intangible assets, other long-term assets include our investment in Yuke’s, a Japanese
video game developer. We own approximately 15% of Yuke’s, which is publicly traded on the Nippon New
Market in Japan. This investment is classified as available-for-sale and reported at fair value with unrealized
holding gains and losses excluded from earnings and reported as a component of other comprehensive
income (loss) until realized. In fiscal 2010 the pre-tax unrealized holding gain related to our investment in
Yuke’s was $1.7 million, and in fiscal 2009 the pre-tax unrealized holding loss was $3.2 million. As of
March 31, 2010, the inception-to-date net unrealized holding gain on our investment in Yuke’s was
$2.4 million. Due to the long-term nature of this relationship, this investment is included in other long-term
assets in the consolidated balance sheets.
Other long-term assets as of March 31, 2010 and 2009 consisted of the following (in thousands):
March 31,
2010
March 31,
2009
Investment in Yuke’s................................................................. $5,564 $3,847
Other intangible assets (see Note 7) ...................................... — 3,701
Deferred financing costs........................................................... 2,781 —
Other ........................................................................................... 2,255 2,931
Total other long-term assets................................................. $10,600 $10,479
9. Restruc turing
During fiscal 2009, we updated our strategic plan in an effort to increase our profitability and cash flow
generation. We significantly realigned our business to focus on fewer, higher quality games, and have
established an operating structure that supports our more focused product strategy. The realignment
included the cancellation of several titles in development, the closure or spin-off of several of our
development studios, and the streamlining of our corporate organization in order to support the new product
strategy, including reductions in worldwide personnel.
As a result of these initiatives, we recorded $5.7 million and $12.3 million in restructuring charges for fiscal
2010 and 2009, respectively, resulting in restructuring charges of $18.0 million incurred to date. Restructuring
charges are recorded as restructuring expenses in our consolidated statement of operations and include the
costs associated with lease abandonments less estimates of sublease income, write-off of related long-lived
assets due to the studio closures, as well as costs of other non-cancellable contracts. We do not expect any