THQ 2011 Annual Report Download - page 83

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(a) Includes business realignment charges and adjustments related to severance and cancellation of games which are not classified as restructuring, as
follows (income/(expense)):
(Amounts in thousands)
Fiscal 2011
Fiscal 2010
Quarter Ended
June 30
$—
(824)
September 30
$—
518
December 31
$ (10,766)
67
March 31
$ (1,777)
(7,852)
Full Fiscal
Year
$ (12,543)
(8,091)
(b) Includes license impairment charges of $30.3 million on unreleased kids movie-based licensed titles (for additional information see "Note 7 —
Licenses and Software Development").
(c) During the fourth quarter of fiscal 2011, we determined that interest expense related to our convertible debt offering in August 2009 had not been
properly capitalized to software development in accordance with ASC Topic 835 — Interest, during fiscal 2010 and the first three quarters of fiscal
2011. As a result, we recorded an out-of-period adjustment to capitalize interest expense as of December 31, 2010 during the fourth quarter of fiscal
2011. The adjustment included an increase in capitalized software development of $4.1 million, a decrease in interest expense of $3.8 million, and
a decrease in "Cost of sales — Software development amortization and royalties" of $0.3 million. The effect of this adjustment decreased our basic
and diluted net loss per share for the fourth quarter of fiscal 2011 by $0.06. If we had capitalized interest expense in fiscal 2010, our fiscal 2010
net loss and our basic and diluted net loss per share would have been smaller by $1.3 million and $0.02, respectively. We evaluated the impact of
this accounting error and concluded the effect of this adjustment was immaterial to our trend of earnings, and the interim and annual consolidated
financial statements of fiscal 2010 and fiscal 2011.
(d) Includes one-time reduction of $24.2 million, classified as venture partner expense, related to a reduction in accrued venture partner expense (for
additional information see "Note 18 — Joint Venture and Settlement Agreements").
(e) Includes $29.5 million in settlement charges, classified as venture partner expense, related to the Agreements described in "Note 18 — Joint Venture
and Settlement Agreements." Also includes a benefit to income tax expense of $3.6 million related to the recognition of a net operating loss benefit
claimed pursuant to a change in tax law.
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In December 2006, we sold our 50% interest in Minick Holding AG ("Minick"). As of June 30, 2008 we received $20.6 million
in cash from the sale of Minick, and we recognized a gain of $2.1 million in the three months ended June 30, 2008. The gain is
presented as "Gain on sale of discontinued operations, net of tax" in our consolidated statements of operations for fiscal 2009.
Pursuant to the Minick sale agreement, no additional consideration was outstanding as of June 30, 2008.
74