THQ 2012 Annual Report Download - page 64

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2010. 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.
7. Other Long-Term 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
accumulated other comprehensive income until realized. In fiscal 2012 the pre-tax unrealized holding loss related to our
investment in Yuke's was $45,000 and in fiscal 2011 the pre-tax unrealized holding loss was $0.9 million. As of March 31,
2012, the inception-to-date unrealized holding gain on our investment in Yuke's was $1.5 million. Due to the long-term nature
of this relationship, this investment is included in "Other long-term assets, net" in our consolidated balance sheets.
Other long-term assets as of March 31, 2012 and 2011 consisted of the following (amounts in thousands):
March 31,
2012
March 31,
2011
Investment in Yuke's $4,641 $ 4,686
Deferred financin
g
costs 1,510 2,146
Othe
r
6,536 3,182
Total other lon
g
-ter
m
assets $12,687 $ 10,014
8. Restructuring and Other Charges
Restructuring charges and adjustments are recorded as "Restructuring" expenses in our consolidated statements of operations
and generally include costs such as, severance and other employee-based charges in excess of standard business practices, costs
associated with lease abandonments (less estimates of sublease income), charges related to long-lived assets, and costs of other
non-cancellable contracts.
Fiscal 2012 Fourth Quarter Realignment and other associated charges. On January 26, 2012, we initiated a plan of
restructuring in connection with our updated business strategy in order to better align our operating expenses with the lower
expected future revenue. The following table summarizes the components and activity under the fiscal 2012 fourth quarter
realignment, classified as "Restructuring" in our consolidated statements of operations, for fiscal 2012, and the related
restructuring reserve balances (amounts in thousands):
Fiscal Year Ended March 31, 2012
Lease and
Contract
Terminations
Net Asset
Im
p
airments Total
Be
g
innin
g
balance $
—
$
—
$
—
Char
g
es to o
p
erations 561 589 1,150
Non-cash write-offs
—
(
589
)
(
589
)
Cash payments, net of sublease
income
(
77
)
—
(
77
)
Foreign currency and other
ad
j
ustments 52
—
52
Endin
g
balance $ 536 $
—
$ 536
In connection with these actions, in fiscal 2012, we incurred charges of $6.3 million related to cash severance and other
employee-based charges (recorded within operating expenses in our consolidated statements of operations).
During the fourth quarter of fiscal 2012, the revised strategy led to a re-evaluation of our future product line-up. This re-
evaluation resulted in various decisions which impacted our financial results. Our decision to cancel one title in development
and a change in development direction of another resulted in non-cash charges of $52.6 million related to the abandonment of
capitalized software development (recorded within "Cost of sales — Software development amortization" in our consolidated
statements of operations). This led to additional cash severance and employee related charges of $2.1 million due to
corresponding staff reductions (recorded within operating expenses in our consolidated statements of operations). In addition,