Note 6 – Royalty Revenue and Related Expenses

The Corporation has agreements for licensing the Care Bears and Strawberry Shortcake characters and other intellectual property. These license agreements provide for royalty revenue to the Corporation, which is recorded in “Other revenue” on the Consolidated Statement of Operations. These license agreements may include the receipt of upfront advances, which are recorded as deferred revenue and earned during the period of the agreement. Revenues and expenses associated with the servicing of these agreements, primarily relating to the licensing activities included in non-reportable segments, are summarized as follows:


	Three Months Ended				Six Months Ended
(In thousands)	August 30, 2013		August 24, 2012		August 30, 2013		August 24, 2012
Royalty revenue	$	6,412	$	7,133	$	12,918	$	10,862

Royalty expenses
Material, labor and other production costs	$	1,551	$	2,673	$	3,498	$	5,001
Selling, distribution and marketing expenses		1,936		2,723		3,184		3,379
Administrative and general expenses		441		441		901		863

	$	3,928	$	5,837	$	7,583	$	9,243

In addition to the expenses disclosed above, during the prior year first quarter, the Corporation incurred charges of $2.1 million associated with its licensing business. See Note 7 for further information.