Balance Sheet Details

Inventory. Inventory at December 31, 2011 and March 31, 2011 consisted of the following (amounts in thousands):



	December 31, 2011		March 31, 2011
Finished goods	$	23,501	$	28,515
Components	3,531		3,390
Inventory	$	27,032	$	31,905

Inventory balances at December 31, 2011 and March 31, 2011 are net of reserves of $26.7 million and $1.9 million, respectively. The inventory reserve balance at December 31, 2011 consists primarily of reserves related to our uDraw GameTablet ("uDraw").

Prepaid expenses and other current assets. Prepaid expenses and other current assets at December 31, 2011 and March 31, 2011 primarily consisted of product costs totaling $34.7 million and $32.0 million, respectively, that were deferred in connection with the deferral of related net revenue. Also included in prepaid expenses and other current assets at December 31, 2011 and March 31, 2011 were product prepayments of $7.2 million and $4.5 million, respectively.

Property and equipment, net. Property and equipment, net at December 31, 2011 and March 31, 2011 consisted of the following (amounts in thousands):



	Useful lives	December 31, 2011			March 31, 2011
Building	30 yrs	$	730		$	730
Land	—	401			401
Computer equipment and software	3-10 yrs	57,659			60,254
Furniture, fixtures and equipment	5 yrs	7,804			8,880
Leasehold improvements	3-6 yrs	13,419			15,999
Automobiles	2-5 yrs	86			88
		80,099			86,352
Less: accumulated depreciation		(55,086		)	(57,392		)
Property and equipment, net		$	25,013		$	28,960

Depreciation expense associated with property and equipment amounted to $2.4 million and $8.0 million for the three and nine months ended December 31, 2011, respectively, and $3.0 million and $8.6 million for the three and nine months ended December 31, 2010, respectively.

Accrued and other current liabilities. Accrued and other current liabilities at December 31, 2011 and March 31, 2011 consisted of the following (amounts in thousands):



	December 31, 2011		March 31, 2011
Accrued liabilities	$	30,002	$	33,175
Settlement payment	4,000		6,000
Accrued compensation	12,040		20,093
Accrued third-party software developer milestones	24,412		22,951
Accrued royalties	70,392		55,703
Accrued and other current liabilities	$	140,846	$	137,922

Subsequent to December 31, 2011, we entered into agreements with two of our licensors that resulted in a reduction of our minimum license guarantees classified as accrued royalties (see "Note 15 — Subsequent Events" for further details).

Other long-term liabilities. Other long-term liabilities at December 31, 2011 and March 31, 2011 consisted of the following (amounts in thousands):



	December 31, 2011		March 31, 2011
Minimum license guarantees	$	61,559	$	69,209
Deferred rent	6,891		7,517
Accrued liabilities	6,440		4,215
Settlement payment	3,522		7,101
Other long-term liabilities	$	78,412	$	88,042

Settlement payments included in the tables above are payable to JAKKS Pacific, Inc. ("Jakks"). A portion of the settlement payment due to Jakks is reflected in "Accrued and other current liabilities" and a portion is reflected in "Other long-term liabilities" in our condensed consolidated balance sheets at the present value of the consideration payable under the agreement between THQ and Jakks. See "Note 18 — Joint Venture and Settlement Agreements" in the notes to the consolidated financial statements in our 2011 10-K for a discussion of the Jakks settlement payments.