THQ 2010 Annual Report Download - page 72

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future charges under the fiscal 2009 realignment, other than additional facility related charges in the event
actual and estimated sublease income changes.
The following table summarizes the significant components and activity under the restructuring plan for fiscal
2010 and 2009 and the accrual balances as of March 31, 2010 and 2009 (in thousands):
Lease and
Contrac t
Terminations
Asset
Impairments
Total
Balance as of March 31, 2008 ....................... $— $— $—
Charges to operations ................................. 5,617 6,649 12,266
Non-cash write-offs ....................................... — (6,649) (6,649)
Cash payments ............................................. (1,447) — (1,447)
Foreign currency and other adjustments... 886 — 886
Balance as of March 31, 2009 ....................... $5,056 $— $5,056
Charges to operations ................................. 1,936 3,735 5,671
Non-cash write-offs ....................................... — (3,735) (3,735)
Cash payments ............................................. (4,828) — (4,828)
Foreign currency and other adjustments... 228 — 228
Balance as of March 31, 2010 ....................... $2,392 $— $2,392
As of March 31, 2010, $1.6 million of the restructuring accrual is included in accrued short-term liabilities and
$0.8 million is included in other long-term liabilities. As of March 31, 2009, $2.2 million of the restructuring
accrual was included in accrued short-term liabilities and $2.8 million was included in other long-term liabilities.
The accrual balance as of March 31, 2010 relates to future lease payments for facilities vacated under our
2009 restructuring plan, offset by estimates of future sublease income. We expect the final settlement of this
accrual to occur by August 1, 2015, which is the last payment date under our longest lease agreement that
was abandoned under our restructuring.
In fiscal 2010, related to the 2009 realignment plan, we also incurred:
• non-cash charges of $7.9 million, recorded in cost of sales—software amortization and royalties,
related to the write-off of capitalized software for games that were cancelled in connection with
the realignment plan; and
• cash charges of $1.3 million related to severance and other employee benefits. Employee related
severance costs are classified in product development, selling and marketing, and general and
administrative expenses in the accompanying consolidated statements of operations based upon
the employee’s classification.
In fiscal 2009, related to the realignment plan, we also incurred:
• non-cash charges of $63.3 million, recorded in cost of sales—software amortization and royalties,
related to the write-off of capitalized software for games that were cancelled in connection with
the realignment plan;
• non-cash charges of $1.0 million, recorded in cost of sales—license amortization and royalties,
related to impairment of licenses in connection with the cancelled games; and
• cash charges of $12.7 million related to severance and other employee benefits. Employee
related severance costs are classified in product development, selling and marketing, and
general and administrative expenses in the accompanying consolidated statements of operations
based upon the employee’s classification.
10. Secured Credit Lines
In October 2008, we obtained a line of credit with UBS in conjunction with the ARS settlement agreement
(see “Note 3—Investment Securities”), which allows for borrowings of up to 75% of the market value of the
ARS, as determined by UBS. Borrowings under the line of credit are due on demand and are secured by
certain of our ARS held with UBS, which have a par value of $23.0 million and a fair value of $21.0 million at