THQ 2011 Annual Report Download - page 39

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 restructuring charges of $5.7 million in fiscal 2010, and
$12.3 million in fiscal 2009. For further information related to our restructuring charges, see "Note 10 — Restructuring and Other
Charges" in the notes to the consolidated financial statements included in Item 8.
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Interest and other income (expense), net consists of interest earned on our investments, gains and losses resulting from exchange
rate changes for transactions denominated in currencies other than the functional currency, and interest expense and amortization
of debt issuance costs on the Notes. For further discussion of the Notes, see "Note 12 — Convertible Senior Notes" in the notes
to the consolidated financial statements included in Item 8. Interest and other income (expense), net decreased $2.5 million in
fiscal 2010 compared to fiscal 2009. Excluding the recognition of a $6.3 million other-than-temporary impairment loss on our
investments in fiscal 2009, interest and other income (expense), net, decreased $8.8 million due to:
• lower average yields and investment balances compared to fiscal 2009;
• interest expense on the Notes in fiscal 2010; and
• foreign currency transaction losses.
There were no other-than-temporary impairment losses in fiscal 2010.
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Income tax expense for fiscal 2010 was $0.2 million, which primarily represented foreign and U.S. state taxes offset by a
$3.6 million valuation allowance release related to the recognition of a net operating loss benefit claimed pursuant to a change in
tax law, compared to income tax expense of $46.2 million in fiscal 2009. The change in income taxes is primarily attributable to
the recording of a valuation allowance for deferred tax assets in fiscal 2009 and income taxes incurred in foreign jurisdictions,
which are not reduced by losses in the United States. The effective tax rate differs significantly from the federal statutory rate
primarily due to losses in the United States that are fully offset by a valuation allowance to the extent that such losses were not
subject to the new five year loss carry-back provisions.
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The noncontrolling interest of $2.9 million in fiscal 2010 reflected the loss allocable to equity interests in THQ*ICE LLC (a joint
venture with ICE Entertainment). The loss allocable to equity interests in THQ*ICE LLC was $0.3 million in fiscal 2009. This
noncontrolling interest reflects the loss allocable to equity interests that are not owned by THQ. We sold our interest in
THQ*ICE LLC on April 30, 2010 and thus after this date, we will not have income or loss attributable to noncontrolling interest.
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In December 2006, we sold our 50% interest in Minick Holding AG ("Minick"). As of December 31, 2008 we received $20.6 million
in cash from the sale of Minick, and we recognized a gain of $2.1 million in the nine months ended December 31, 2008. The gain
is presented as "Gain on sale of discontinued operations, net of tax" in our fiscal 2009 consolidated statements of operations.
Pursuant to the Minick sale agreement, no additional consideration was outstanding as of June 30, 2008.
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Cash and cash equivalents
Short-term investments
Cash, cash equivalents and short-term investments
Percentage of total assets
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$ 85,603
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$ 85,603
11%
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$ 188,378
82,941
$ 271,319
38%
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$ (102,775)
(82,941)
$ (185,716)
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