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 Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Third Quarter 2017
   Tuesday, February 07, 2017 4:05:01 PM ET

--Net loss narrowed to $0.33 per diluted share

--Net cash provided by operating activities grew 72% to $291.0 million

--Bookings grew 51% to $719.0 million

Take-Two Interactive Software, Inc. (TTWO ) today reported strong results for its fiscal third quarter 2017, ended December 31, 2016. In addition, the Company provided its initial financial outlook for its fiscal fourth quarter ending March 31, 2017, and updated its financial outlook for its fiscal year ending March 31, 2017.

Fiscal Third Quarter 2017 GAAP Financial Highlights

Net revenue grew 15% to $476.5 million, as compared to $414.2 million in last year’s fiscal third quarter. The largest contributors to net revenue in fiscal third quarter 2017 were Grand Theft Auto V(R) and Grand Theft Auto Online, WWE(R) 2K17, NBA(R) 2K17, and Sid Meier’s Civilization(R) VI.



Digitally-delivered net revenue grew 64% to $240.2 million, as compared to $146.4 million in last year’s fiscal third quarter. Recurrent consumer spending (virtual currency, microtransactions and downloadable add-on content) accounted for 39% of digitally-delivered net revenue, or 20% of total net revenue. The largest contributors to digitally-delivered net revenue in fiscal third quarter 2017 were Grand Theft Auto V and Grand Theft Auto Online, Sid Meier’s Civilization VI, and NBA 2K17.

Net loss narrowed to $29.8 million, or $0.33 per diluted share, as compared to $42.4 million, or $0.51 per diluted share, for the year-ago period.

Net cash provided by operating activities grew 72% to $291.0 million. As of December 31, 2016, the Company had cash and short-term investments of $1.444 billion.

As previously announced, starting with this quarter’s results, Take-Two will no longer report Non-GAAP Cost of Goods Sold, Non-GAAP Gross Profit, Non-GAAP Income from Operations, Non-GAAP Net Income, and Non-GAAP Net Income Per Share on either a historical basis or in its financial outlook. The Company will continue to disclose data, as set forth below, together with its management reporting tax rate of 22%, that are used internally by its management and Board of Directors to adjust its GAAP financial results in order to facilitate comparison of the Company’s operating performance between periods and to better understand its core business and future outlook:

                                                                                                                                             Three Months Ended December 31, 2016
                                                                 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                 
                                                                                                                                                                                                                                                               Financial Data
                                                                                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Statement of                             Change in               Stock-based               Non-cash                Acquisition
                                                                                     Operations                                                                  deferred net                                                   compensation                                                   amortization                                                      related
                                                                                                                                                                  revenue and                                                                                                                   of discount                                                     expenses
                                                                                                                                                                    related                                                                                                                         on
                                                                                                                                                                    cost of                                                                                                                     Convertible
                                                                                                                                                                  goods sold                                                                                                                       Notes
                                                                 -----------------------------------------------   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------  -------------------- -------------------- -------------------- -------------------- -------------------- -------------------
                                                                                                                                                                                                                                                                                                                                                           
Net revenue                                                                         $ 476,473                                                                             268,350
          Cost of goods sold                                       311,074                                                          118,126                                               (6,022 )                                                                                                
                                                                 -------------------- ------- --------------------                                           --------------------                                           ---------- ---------                                           --------------------                                           ---------------------
                                                                                                                                                                                                                                                                                                                                                           
Gross profit                                                                          165,399                                                                             150,224                                                6,022
                                                                                                                                                                                                                                                                                                                                                           
          Total operating expenses                                 193,808                                                                                            (16,067 )                                                                                                     (317 )
                                                                 -------------------- ------- --------------------                                           --------------------                                           ---------- ---------                                           --------------------                                           ---------- ---------
                                                                                                                                                                                                                                                                                                                                                           
Loss from operations                                                                  (28,409 )                                                                           150,224                                               22,089                                                                                                                           317
          Interest and other, net                                   (3,715 )                                                                                                                                                                     4,922                                            
                                                                 -------------------- ------- --------------------                                           --------------------                                           ---------------------                                          --------------------                                           ---------------------
Loss before income taxes                                                              (32,124 )                                                                           150,224                                               22,089                                                                    4,922                                                  317
                                                                                                                                                                                                                                                                                                                                                           
Loss per share
          Basic and diluted                                                         $   (0.33 )
                                                                                                                                                                                                                                                                                                                                                           

Take-Two’s basic and diluted net loss per share for fiscal third quarter 2017 was calculated using the Company’s basic share count of 90.4 million. For management reporting purposes, the Company calculates diluted net income per share using its fully diluted share count of 115.3 million and adds back to net income interest expense, net of tax, on the convertible notes of $1.2 million.

Operational Metric - Bookings

Total bookings grew 51% to $719.0 million, as compared to $475.5 million during last year’s fiscal third quarter. The largest contributors to bookings were Grand Theft Auto V and Grand Theft Auto Online, Mafia III, NBA 2K17, WWE 2K17 and Sid Meier’s Civilization VI. Catalog accounted for $261.6 million of bookings led by Grand Theft Auto. Digitally-delivered bookings grew 66% to $336.3 million, as compared to $203.0 million in last year’s fiscal third quarter, led by Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17, Sid Meier’s Civilization VI and Mafia III. Bookings from recurrent consumer spending (virtual currency, microtransactions and downloadable add-on content) grew 55% year-over-year and accounted for 50% of digitally-delivered bookings, or 23% of total bookings.

Management Comments

"Take-Two had a highly-successful holiday quarter," said Strauss Zelnick, Chairman and CEO of Take-Two. "Consumer demand for our new releases and catalog titles was strong throughout the period, and players continued to engage significantly with our games after purchase. As a result, we delivered better-than-expected bookings, including our best-ever quarter for recurrent consumer spending, along with double-digit growth in both net revenue and net cash provided by operating activities.

"Last week, we deployed a portion of our Company’s cash on hand to acquire Social Point, a highly-successful free-to-play mobile game developer that has a proven track record of growing revenues and delivering multiple hits. We are incredibly excited about this acquisition, which reflects our strategy to deploy our capital resources prudently and to take measured risks that provide immediately accretive opportunities for our business and the potential for long-term growth.

"Looking ahead, our Company has a robust long-term development pipeline and is better positioned for success than at any time in its history. We expect to grow both bookings and net cash provided by operating activities in fiscal 2018, driven by our release slate led by Rockstar Games’ highly anticipated launch of Red Dead Redemption 2."

Business and Product Highlights

Since October 1, 2016:

Take-Two:

-- Acquired privately-held Social Point S.L. for $250 million, comprised of $175 million in cash and 1,480,168 unregistered shares of Take-Two common stock (calculated by dividing $75 million by the average closing price per share on the Nasdaq Global Select Market during the thirty trading day period ending on January 26, 2017), plus potential earn-out consideration of up to an aggregate of $25.9 million in cash and shares of Take-Two common stock. The cash portion was funded from Take-Two’s cash on hand. Founded in 2008 and headquartered in Barcelona, Spain, Social Point is a highly-successful free-to-play mobile game developer that focuses on delivering high-quality, deeply-engaging entertainment experiences. The transaction is expected to be immediately accretive to net revenue and net cash provided by operating activities, and to be accretive to net income per share, excluding transaction costs and amortization of intangible assets, in fiscal year 2018.

Rockstar Games:

-- Released new free content updates for Grand Theft Auto Online, including: -- Bikers, which allows players to form underground Motorcycle Clubs and run illicit business alongside a range of all new competitive and co-operative gameplay, as well as new modes, vehicles, weapons, clothing and much more.

-- Deadline, which allows players to turn the streets of Los Santos into a stylish electronic video game battle to the death with futuristic Nagasaki Shotaro motorcycles.

-- Import/Export, which introduces a whole new series of criminal pursuits as CEOs and their organizations steal, modify and resell the most wanted vehicles in the city for big profits.

-- Festive Surprise 2016, which featured holiday-themed items in stores across Los Santos, as well as the return of favorite items from past holiday seasons and more.

-- Released Bully: Anniversary Edition for iOS and Android devices. Bully: Anniversary Edition comes complete with everything from the original release and from Bully: Scholarship Edition. The game features enhanced high resolution graphics, improved lighting, textures and character models, controls redesigned for touch gameplay, physical controller support and more.

-- Announced that the highly-anticipated Red Dead Redemption 2(R) is planned for release worldwide in Fall 2017 for PlayStation4 and Xbox One. Developed by the creators of Grand Theft Auto V and Red Dead Redemption, Red Dead Redemption 2 is an epic tale of life in America’s unforgiving heartland. The game’s vast and atmospheric open world will also provide the foundation for a brand new online multiplayer experience.

2K:

-- Launched Sid Meier’s Civilization VI for PC. Developed by Firaxis Games, Sid Meier’s Civilization VI is the next entry in the award-winning turn-based strategy franchise that has sold-in nearly 40 million units. Sid Meier’s Civilization VI received stellar reviews and is fastest-selling release in the history of the series, with sell-in already surpassing 1.5 million units. Sid Meier’s Civilization VI is being supported with free and paid downloadable add-on content.

-- Launched WWE 2K17 for PlayStation 4, PlayStation 3, Xbox One and Xbox 360. In addition, WWE 2K17 was released today for PC. Developed collaboratively by Yuke’s and Visual Concepts, WWE 2K17 is being supported with downloadable add-on content, including a Season Pass.

-- Launched Mafia III, the next installment in 2K’s successful organized crime series, for Xbox One, PlayStation 4 and PC. Developed by Hangar 13, Mafia III had the highest first week sell-in of any title in 2K’s history, and to date has sold-in approximately 5 million units. Mafia III is being supported with downloadable add-on content, including a Season Pass, as well as a free-to-play mobile battle RPG game, Mafia III Rivals, for iOS and Android devices.

-- Released NBA2KVR Experience for HTC Vive(TM), PlayStation(R)VR and Oculus Rift. NBA2KVR Experience is the first virtual reality basketball game immersing players in a new, entertaining NBA environment filled with the sights and sounds of fun mini-games and challenges.

-- Released WWE SuperCard - Season 3 for iOS and Android devices. Developed by Cat Daddy Games, WWE SuperCard Season 3 is a free update to the popular WWE collectible card-battling game that has been downloaded more than 13 million times, featuring new modes of play, Superstars and more. WWE SuperCard is the highest grossing and most downloaded mobile game in 2K history.

-- Released Carnival Games(R) VR for HTC Vive, PlayStationVR and Oculus Rift. Developed by Cat Daddy Games, Carnival Games VR is 2K’s first virtual reality offering and was named one of the top VR titles of 2016 by the Official PlayStation Blog.

-- Released NHL SuperCard 2K17 for iOS and Android devices. Developed by Cat Daddy Games, NHL SuperCard 2K17 is a free-to-play NHL collectible card-battling game.

-- Announced that NBA 2K18 will be available for the Nintendo Switch in Fall 2017 when the title also launches for the PlayStation 4, PlayStation 3, Xbox One, Xbox 360, PC, and iOS and Android devices.

Financial Outlook for Fiscal 2017

Take-Two is providing its initial financial outlook for its fiscal fourth quarter ending March 31, 2017 and is updating its financial outlook for its fiscal year ending March 31, 2017:

Fourth Quarter Ending March 31, 2017

-- GAAP net revenue is expected to range from $542 to $592 million

-- GAAP net income is expected to range from $139 to $148 million

-- GAAP diluted net income per share is expected to range from $1.23 to $1.31

-- Share count used to calculate GAAP diluted net income per share is expected to be 116.4 million (1)

-- Bookings (operational metric) are expected to range from $295 to $345 million

The Company is also providing selected data and its management reporting tax rate of 22% that are used internally by its management and Board of Directors to adjust its GAAP financial outlook in order to facilitate comparison of the Company’s operating performance between periods and to better understand its core business and future outlook:

                                                                                                                       Three Months Ending March 31, 2017
                                                                            -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             
$ in millions                                                                   GAAP         Change in       Stock-based       Non-cash      Amortization        Acquisition
                                                                             Outlook (2)                      deferred net                      compensation (3)                      amortization                       of Intangible                            related
                                                                                                                 revenue                                                               of discount                          Assets                               expenses
                                                                                                                   and                                                                     on
                                                                                                                 related                                                               Convertible
                                                                                                                 cost of                                                                  Notes
                                                                                                               goods sold
                                                                            ------------ -------------------- ------------ -------------------- ---------------- -------------------- ------------ -------------------- ------------- -------------------- --------------------
                                                                                                                                                           
Net revenue                                                                 $542 to $592                         ($225)
                                                                                                                                                                                                                                                            
Cost of goods sold                                                          $248 to $278                         ($120)                               ($1)                                                                   ($3)
                                                                                                                                                                                                                                                            
Operating Expenses                                                          $140 to $150                                                              ($17)                                                                  ($2)                                  ($1)
                                                                                                                                                                                                                                                            
Interest and other, net                                                          $3                                                                                                       ($3)
                                                                                                                                                                                                                                                            
Income (loss) before income taxes                                           $151 to $161                         ($105)                                $18                                 $3                                 $5                                    $1
                                                                                                                                                                                                                                                            

Fiscal Year Ending March 31, 2017

-- GAAP net revenue is expected to range from $1.75 to $1.80 billion

-- GAAP net income is expected to range from $108 to $117 million

-- GAAP diluted net income per share is expected to range from $1.15 to $1.25

-- Share count used to calculate GAAP diluted net income per share is expected to be 93.6 million (4)

-- Net cash provided by operating activities is expected to be approximately $350 million

-- Capital expenditures are expected to be approximately $35 million

-- Bookings (operational metric) are expected to range from $1.72 to $1.77 billion

The Company is also providing selected data and its management reporting tax rate of 22% that are used internally by its management and Board of Directors to adjust its GAAP financial outlook in order to facilitate comparison of the Company’s operating performance between periods and to better understand its core business and future outlook:

                                                                                                                                         Twelve Months Ending March 31, 2017
                                                                            ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             
$ in millions                                                                     GAAP           Change in       Stock-based       Non-cash       Gain on     Amortization        Acquisition
                                                                               Outlook (2)                        deferred net                      compensation (3)                      amortization                       Long-Term                       of Intangible                            related
                                                                                                                     revenue                                                               of discount                      Investment                          Assets                               expenses
                                                                                                                       and                                                                     on
                                                                                                                     related                                                               Convertible
                                                                                                                     cost of                                                                  Notes
                                                                                                                   goods sold
                                                                            ---------------- -------------------- ------------ -------------------- ---------------- -------------------- ------------ -------------------- ---------- -------------------- ------------- -------------------- --------------------
                                                                                                                                                                            
Net revenue                                                                 $1,750 to $1,800                           $65
                                                                                                                                                                                                                                                                                                
Cost of goods sold                                                            $956 to $986                             $0                                 ($17)                                                                                                  ($3)
                                                                                                                                                                                                                                                                                                
Operating Expenses                                                            $660 to $670                                                                ($57)                                                                                                  ($2)                                 ($1.5)
                                                                                                                                                                                                                                                                                                
Interest and other, net                                                            $17                                                                                                        ($21)                             $2
                                                                                                                                                                                                                                                                                                
Income (loss) before income taxes                                             $117 to $127                             $65                                 $74                                 $21                             ($2)                               $5                                   $1.5
                                                                                                                                                                                                                                                                                                
        1)   Includes 102.0 million basic shares, 1.4 million participating
                                                                                                            shares and 13.0 million shares representing the potential dilution
                                                                                                            from convertible notes. The interest expense, net of tax, on the
                                                                                                            convertible notes, which is added back to net income to calculate
                                                                                                            diluted net income per share for management reporting purposes is
                                                                                                            $0.6 million.
                                                                                    2)                      The individual components of the financial outlook may not foot to
                                                                                                            the totals as the Company does not expect actual results for every
                                                                                                            component to be at the low end or high end of the outlook range
                                                                                                            simultaneously.
                                                                                    3)                      The Company’s stock-based compensation expense for the periods above
                                                                                                            includes the cost of approximately 0.9 million restricted stock
                                                                                                            units previously granted to ZelnickMedia that are subject to
                                                                                                            variable accounting. Actual expense to be recorded in connection
                                                                                                            with these shares is dependent upon several factors, including
                                                                                                            future changes in Take-Two’s stock price.
                                                                                    4)                      For the fiscal year ending March 31, 2017, the Company’s fully
                                                                                                            diluted share count used for management reporting purposes is
                                                                                                            expected to be 115.5 million, which includes 92.0 million basic
                                                                                                            shares, 1.6 million participating shares and 21.9 million shares
                                                                                                            representing the potential dilution from convertible notes. The
                                                                                                            interest expense, net of tax, on the convertible notes, which is
                                                                                                            added back to net income to calculate diluted net income per share
                                                                                                            for management reporting purposes is $4.8 million. Take-Two’s GAAP
                                                                                                            net income per diluted share outlook is calculated using a diluted
                                                                                                            share count of 93.6 million (basic shares plus participating
                                                                                                            shares), because using the "if-converted" method and the Company’s
                                                                                                            fully diluted share count of 115.5 million would have been
                                                                                                            anti-dilutive.
                                                                                                             

Key assumptions and dependencies underlying the Company’s financial outlook include: the timely delivery of the titles included in this financial outlook; continued consumer acceptance of the Xbox One and PlayStation 4; the ability to develop and publish products that capture market share for these new-generation systems while continuing to leverage opportunities on the Xbox 360, PlayStation 3 and PC; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements" below.

Product Releases

The following titles were released since October 1, 2016:

Label              Title                                                                                           Platforms                                 Release Date
-------------- -------------------- -------------------- ------------------------------------------------------------------------------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- --------------------
2K                 Mafia III                                                                                       PS4, Xbox One, PC                         October 7, 2016
2K                                                       Mafia III Rivals                                                                                                                      iOS, Android                                                                    October 7, 2016
2K                                                       WWE 2K17                                                                                                                              PS4, PS3, Xbox One, Xbox 360                                                    October 11, 2016
2K                                                       WWE 2K17: Accelerator (DLC)                                                                                                           PS4, PS3, Xbox One, Xbox 360                                                    October 11, 2016
2K                                                       WWE 2K17: MyPlayer Kickstart (DLC)                                                                                                    PS4, Xbox One                                                                   October 11, 2016
2K                                                       WWE 2K17: NXT Legacy Pack (DLC)                                                                                                       PS3, Xbox 360                                                                   October 11, 2016
2K                                                       NHL SuperCard 2017                                                                                                                    iOS, Android                                                                    October 13, 2016
2K                                                       Sid Meier’s Civilization VI                                                                                PC                                                                              October 21, 2016
2K                                                       Carnival Games VR                                                                                                                     HTC Vive, PlayStation VR                                                        October 28, 2016
2K                                                       WWE 2K17: NXT Enhancement Pack (DLC)                                                                                                  PS4, Xbox One                                                                   November 15, 2016
2K                                                       WWE SuperCard - Season 3                                                                                                              iOS, Android                                                                    November 17, 2016
2K                                                       WWE 2K17: Legends Pack (DLC)                                                                                                          PS4, PS3, Xbox One, Xbox 360                                                    November 22, 2016
2K                                                       NBA 2K VR Experience                                                                                                                  HTC Vive, PlayStation VR, Oculus Rift                                           November 22, 2016
2K                                                       Carnival Games VR                                                                                                                     Oculus Rift                                                                     December 6, 2016
Rockstar Games                                           Bully: Anniversary Edition                                                                                                            iOS, Android                                                                    December 8, 2016
2K                                                       WWE 2K17: New Moves Pack (DLC)                                                                                                        PS4, PS3, Xbox One, Xbox 360                                                    December 13, 2016
2K                                                       Sid Meier’s Civilization VI: Viking Scenario Pack (DLC)                                                    PC                                                                              December 20, 2016
2K                                                       Sid Meier’s Civilization VI: Poland Civilization & Scenario Pack                                           PC                                                                              December 20, 2016
                                                         (DLC)
2K                                                       WWE 2K17: Future Stars Pack (DLC)                                                                                                     PS4, PS3, Xbox One, Xbox 360                                                    January 17, 2017
                                                                                                                                                                                                                                                                                

Take-Two’s lineup of future titles announced to date includes:

Label              Title                     Platforms                                                  Release Date
-------------- -------------------- -------------------- --------------------- -------------------- -------------------- ------------------------------------------------------ -------------------- -------------------- --------------------
2K                 NBA 2K18                  PS4, PS3, Xbox One, Xbox 360, Switch, PC, iOS, Android     Fall 2017
Rockstar Games                                           Red Dead Redemption 2                                           PS4, Xbox One                                                                                    Fall 2017
                                                                                                                                                                                                                           

Conference Call

Take-Two will host a conference call today at 4:30 p.m. Eastern Time to review these results and discuss other topics. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.

Final Results

The financial results discussed herein are presented on a preliminary basis; final data will be included in Take-Two’s Quarterly Report on Form 10-Q for the period ended December 31, 2016.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a leading developer, publisher and marketer of interactive entertainment for consumers around the globe. The Company develops and publishes products through its two wholly-owned labels Rockstar Games and 2K. Our products are designed for console systems and personal computers, including smartphones and tablets, and are delivered through physical retail, digital download, online platforms and cloud streaming services. The Company’s common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at http://www.take2games.com .

All trademarks and copyrights contained herein are the property of their respective holders.

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects," "seeks," "should," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company’s future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including: our dependence on key management and product development personnel, our dependence on our Grand Theft Auto products and our ability to develop other hit titles, the timely release and significant market acceptance of our games, the ability to maintain acceptable pricing levels on our games, and risks associated with international operations. Other important factors and information are contained in the Company’s most recent Annual Report on Form 10-K, including the risks summarized in the section entitled "Risk Factors," the Company’s most recent Quarterly Report on Form 10-Q, and the Company’s other periodic filings with the SEC, which can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

 
                                                                                                                                                      TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
                                                                                                                                                        CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                                                                                                                                                            (in thousands, except per share amounts)
 
                                                                                                               Three months ended December 31,                                                                                              Nine months ended December 31,
                                                                                     -------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------
                                                                                         2016          2015                              2016            2015    
                                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                             
Net revenue                                                                                             $ 476,473                                           $ 414,221                                           $ 1,208,192                                           $ 1,036,492  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                             
Cost of goods sold:
   Internal royalties                                                                                     103,613                                                                 95,311                                                                  240,711                                                                  256,058
   Software development costs and royalties                                                               109,900                                                                 61,653                                                                  218,753                                                                  152,160
   Product costs                                                                                           70,089                                                                 74,934                                                                  170,127                                                                  153,652
   Licenses                                                                             27,472                           25,963                             78,468                             42,546  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Total cost of goods sold                                                               311,074                          257,861                            708,059                            604,416  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                             
Gross profit                                                                                              165,399                                                                156,360                                                                  500,133                                                                  432,076
                                                                                                                                                                                                                                                                                                             
   Selling and marketing                                                                                   95,820                                                                 59,846                                                                  247,141                                                                  160,289
   General and administrative                                                                              52,939                                                                 49,061                                                                  149,367                                                                  148,057
   Research and development                                                                                37,589                                                                 27,944                                                                  101,494                                                                   86,499
   Business reorganization                                                                                      -                                                                 71,172                                                                        -                                                                   71,172
   Depreciation and amortization                                                         7,460                            7,534                             22,329                             21,462  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Total operating expenses                                                               193,808                          215,557                            520,331                            487,479  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
 Loss from operations                                                                                     (28,409 )                                                              (59,197 )                                                                (20,198 )                                                                (55,403 )
Interest and other, net                                                                                    (3,715 )                                                               (8,018 )                                                                (15,298 )                                                                (23,948 )
Gain on long-term investment                                                                 -                                -                              1,350                                  -  
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Loss before income taxes                                                                                  (32,124 )                                                              (67,215 )                                                                (34,146 )                                                                (79,351 )
Benefit from income taxes                                                               (2,282 )                                           (24,802 )                                              (2,169 )                                             (24,650 )
---------------------------------------------------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Net loss                                                                                                $ (29,842 )                                                            $ (42,413 )                                                            $   (31,977 )                                                            $   (54,701 )
===============================================================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                             
Loss per share:                                                                                                                                                                                                                                     
                                                                                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
Basic and diluted loss per share                                                                        $   (0.33 )                                                            $   (0.51 )                                                            $     (0.37 )                                                            $     (0.66 )
                                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
Weighted average shares outstanding:
Basic and Diluted                                                                       90,428                           83,426                             86,796                             83,338  
                                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Computation of Basic and Diluted EPS:                                                                                                                                                                                                               
                                                                                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
Net loss for basic and diluted EPS calculation                                                          $ (29,842 )                                                            $ (42,413 )                                                            $   (31,977 )                                                            $   (54,701 )
                                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                    
                                                                                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
 Weighted average common shares outstanding - basic and diluted                         90,428                           83,426                             86,796                             83,338  
                                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                                                    
                                                                                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
   Basic and diluted loss per share                                                                     $   (0.33 )                                                            $   (0.51 )                                                            $     (0.37 )                                                            $     (0.66 )
                                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                            
 
                                                                                  TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
                                                                                               CONSOLIDATED BALANCE SHEETS
                                                                                        (in thousands, except per share amounts)
                                                                                                                              
                                                                                                                December 31,                                                               March 31,
                                                                                                 2016                               2016    
                                                                                            -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                      
                                ASSETS                                                                           (Unaudited)
Current assets:
  Cash and cash equivalents                                                                                    $ 1,039,430                                                              $   798,742
  Short-term investments                                                                                           404,523                                                                  470,820
  Restricted cash                                                                                                  278,541                                                                  261,169
                                                                                                                   327,430                                                                  168,527
  Accounts receivable, net of allowances of $107,347 and $45,552 at
  December 31, 2016 and March 31, 2016, respectively
  Inventory                                                                                                         26,665                                                                   15,888
  Software development costs and licenses                                                                          126,185                                                                  178,387
  Deferred cost of goods sold                                                                                      177,946                                                                   98,474
  Prepaid expenses and other                                                                     70,456                             53,269  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total current assets                                                                    2,451,176                          2,045,276  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                      
  Fixed assets, net                                                                                                 65,799                                                                   77,127
  Software development costs and licenses, net of current portion                                                  327,117                                                                  214,831
  Deferred cost of goods sold, net of current portion                                                                    -                                                                   17,915
  Goodwill                                                                                                         213,522                                                                  217,080
  Other intangibles, net                                                                                             3,211                                                                    4,609
  Other assets                                                                                   28,274                             13,439  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total assets                                                                                             $ 3,089,099                                           $ 2,590,277  
======================================================================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                      
                 LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                                                                             $    54,248                                                              $    30,448
  Accrued expenses and other current liabilities                                                                   736,176                                                                  607,479
  Deferred revenue                                                                            1,073,393                            582,484  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total current liabilities                                                               1,863,817                          1,220,411  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                      
Long-term debt                                                                                                     258,876                                                                  497,935
Non-current deferred revenue                                                                                        11,255                                                                  216,319
Other long-term liabilities                                                                     134,230                             74,227  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total liabilities                                                                       2,268,178                          2,008,892  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                                                                      
                                                                                                                                                                      
Stockholders’ equity:
  Preferred stock, $.01 par value, 5,000 shares authorized                                                               -                                                                        -
  Common stock, $.01 par value, 200,000 shares authorized; 117,990 and
  103,765 shares
   issued and 100,798 and 86,573 outstanding at December 31, 2016 and                                                1,180                                                                    1,038
   March 31, 2016, respectively
  Additional paid-in capital                                                                                     1,370,278                                                                1,088,628
  Treasury stock, at cost; 17,192 common shares at December 31, 2016                                              (303,388 )                                                               (303,388 )
  and March 31, 2016, respectively
  Accumulated deficit                                                                                             (198,974 )                                                               (166,997 )
  Accumulated other comprehensive loss                                                          (48,175 )                                             (37,896 )
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total stockholders’ equity                                                                820,921                            581,385  
----------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Total liabilities and stockholders’ equity                                                               $ 3,089,099                                           $ 2,590,277  
======================================================================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                     
 
                                                                                           TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
                                                                                             CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                                                                              (in thousands)
                                                                                                                       Nine months ended December 31,
                                                                                                              ----------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2016           2015    
                                                                                                              -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                        
Operating activities:
                     Net loss                                                                                                    $   (31,977 )                                                            $  (54,701 )
                                                                                                                                                                                        
                     Adjustments to reconcile net loss to net cash provided by operating
                     activities:
                        Amortization and impairment of software development costs and                                                130,019                                                                  83,056
                        licenses
                        Depreciation and amortization                                                                                 22,329                                                                  21,462
                        Amortization and impairment of intellectual property                                                           1,398                                                                     160
                        Stock-based compensation                                                                                      55,421                                                                  54,144
                        Amortization of discount on Convertible Notes                                                                 17,870                                                                  17,454
                        Amortization of debt issuance costs                                                                            1,078                                                                   1,181
                        Other, net                                                                                                    (3,604 )                                                                 2,573
                     Changes in assets and liabilities:
                        Restricted cash                                                                                              (17,372 )                                                               (34,411 )
                        Accounts receivable                                                                                         (160,095 )                                                               (46,227 )
                        Inventory                                                                                                    (15,876 )                                                                  (374 )
                        Software development costs and licenses                                                                     (194,422 )                                                              (170,074 )
                        Prepaid expenses, other current and other non-current assets                                                 (31,460 )                                                                (6,514 )
                        Deferred revenue                                                                                             302,728                                                                 184,955
                        Deferred cost of goods sold                                                                                  (66,502 )                                                               (54,418 )
                        Accounts payable, accrued expenses and other liabilities                                  230,067                           190,557  
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                     Net cash provided by operating activities                                                    239,602                           188,823  
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                        
Investing activities:
                     Change in bank time deposits                                                                                     66,841                                                                (189,564 )
                     Proceeds from available-for-sale securities                                                                     101,357                                                                  19,014
                     Purchases of available-for-sale securities                                                                     (104,357 )                                                               (25,768 )
                     Purchases of fixed assets                                                                                       (14,369 )                                                               (28,579 )
                     Proceeds from sale of long-term investments                                                                       1,350                                                                       -
                     Purchase of long-term investments                                                                                (1,885 )                                                                     -
                     Business acquisitions, net of cash acquired                                                     (750 )                                                  -  
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                     Net cash provided by (used in) investing activities                                           48,187                          (224,897 )
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                        
Financing activities:
                     Excess tax benefit from stock-based compensation                                                                  1,499                                                                   1,509
                     Tax payment related to net share settlements on restricted stock                                                (36,734 )                                                               (14,506 )
                     awards
                     Repurchase of common stock                                                                         -                           (26,552 )
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                     Net cash used in financing activities                                                        (35,235 )                                            (39,549 )
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                        
                     Effects of foreign exchange rates on cash and cash equivalents                               (11,866 )                                               (256 )
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                        
                     Net increase (decrease) in cash and cash equivalents                                                            240,688                                                                 (75,879 )
                     Cash and cash equivalents, beginning of year                                                 798,742                           911,120  
                     -------------------------------------------------------------------                      -------------------- --------- --------------------                      -------------------- -------- --------------------
                     Cash and cash equivalents, end of period                                                                    $ 1,039,430                                           $  835,241  
                     ===================================================================                      ==================== ========= ====================                      ==================== ======== ====================
                                                                                                                                                                                                                      
 
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue by Geographic Region, Distribution Channel, and
Platform Mix
(in thousands)
                                                                                                                             
                                                                                                                                      Three Months Ended                                                                                                               Three Months Ended
                                                                                                                                       December 31, 2016                                                                                                                December 31, 2015
                                                                                                      -----------------------------------------------------------------------------                                               ---------------------------------------------------------------------------------------
                                                                                                                 Amount                                                      % of Total                                                      Amount                                                           % of Total
                                                                                                      -----------------------------                                          ----------                                           -----------------------------                                          --------------------
                                                                                                                                                                                                                                                                                                          
  Net Revenues by Geographic Region
    United States                                                                                                        $ 257,504                                                  54%                                                              $ 218,386                                                            53%
    International                                                                                       218,969                                                  46%                                             195,835                                                            47%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
Total net revenues                                                                                      476,473                                                 100%                                             414,221                                                           100%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
                                                                                                                                                                                                                                                                                                          
Change in Deferred Net Revenues
    United States                                                                                                        $ 139,410                                                                                                                   $  63,314
    International                                                                                       128,940                                                                                                    9,256
                                                                                                      -------------------- -------                                                                                                -------------------- -------
Total changes in deferred net revenues                                                                  268,350                                                                                                   72,570
                                                                                                      -------------------- -------                                                                                                -------------------- -------
                                                                                                                                                                                                                                                                                                          
                                                                                                                                      Three Months Ended                                                                                                               Three Months Ended
                                                                                                                                       December 31, 2016                                                                                                                December 31, 2015
                                                                                                      -----------------------------------------------------------------------------                                               ---------------------------------------------------------------------------------------
                                                                                                                 Amount                                                      % of Total                                                      Amount                                                           % of Total
                                                                                                      -----------------------------                                          ----------                                           -----------------------------                                          --------------------
                                                                                                                                                                                                                                                                                                          
Net Revenues by Distribution Channel
    Digital online                                                                                                       $ 240,213                                                  50%                                                              $ 146,449                                                            35%
    Physical retail and other                                                                           236,260                                                  50%                                             267,772                                                            65%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
Total net revenues                                                                                      476,473                                                 100%                                             414,221                                                           100%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
                                                                                                                                                                                                                                                                                                          
Change in Deferred Net Revenues
    Digital online                                                                                                       $ 117,222                                                                                                                   $  67,170
    Physical retail and other                                                                           151,128                                                                                                    5,400
                                                                                                      -------------------- -------                                                                                                -------------------- -------
Total changes in deferred net revenues                                                                  268,349                                                                                                   72,570
                                                                                                      -------------------- -------                                                                                                -------------------- -------
                                                                                                                                                                                                                                                                                                          
                                                                                                                                      Three Months Ended                                                                                                               Three Months Ended
                                                                                                                                       December 31, 2016                                                                                                                December 31, 2015
                                                                                                      -----------------------------------------------------------------------------                                               ---------------------------------------------------------------------------------------
                                                                                                                 Amount                                                      % of Total                                                      Amount                                                           % of Total
                                                                                                      -----------------------------                                          ----------                                           -----------------------------                                          --------------------
Net Revenues by Platform Mix
    Console                                                                                                              $ 354,220                                                  74%                                                              $ 355,235                                                            86%
    PC and other                                                                                        122,253                                                  26%                                              58,986                                                            14%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
Total net revenues                                                                                      476,473                                                 100%                                             414,221                                                           100%
                                                                                                      -------------------- -------                                           ----------                                           -------------------- -------                                           --------------------
                                                                                                                                                                                                                                                                                                          
Change in Deferred Net Revenues
    Console                                                                                                              $ 246,223                                                                                                                   $  64,623
    PC and other                                                                                         22,127                                                                                                    7,947
                                                                                                      -------------------- -------                                                                                                -------------------- -------
Total changes in deferred net revenues                                                                  268,350                                                                                                   72,570
                                                                                                      -------------------- -------                                                                                                -------------------- -------
                                                                                                                                                                                                                                                                                                          
 
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Net Revenue by Geographic Region, Distribution Channel, and
Platform Mix
(in thousands)
                                                                                                                                 
                                                                                                                                        Nine Months Ended                                                                                                                  Nine Months Ended
                                                                                                                                        December 31, 2016                                                                                                                  December 31, 2015
                                                                                                      -------------------------------------------------------------------------------                                               -----------------------------------------------------------------------------------------
                                                                                                                  Amount                                                       % of Total                                                       Amount                                                            % of Total
                                                                                                      -------------------------------                                          ----------                                           -------------------------------                                          --------------------
                                                                                                                                                                                                                                                                                                              
  Net Revenues by Geographic Region
    United States                                                                                                        $   703,088                                                  58%                                                              $   546,926                                                            53%
    International                                                                                         505,104                                                  42%                                               489,566                                                            47%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
Total net revenues                                                                                      1,208,192                                                 100%                                             1,036,492                                                           100%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
                                                                                                                                                                                                                                                                                                              
Change in Deferred Net Revenues
    United States                                                                                                        $   135,035                                                                                                                   $   101,929
    International                                                                                         153,592                                                                                                     79,693
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
Total changes in deferred net revenues                                                                    288,627                                                                                                    181,622
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
                                                                                                                                                                                                                                                                                                              
                                                                                                                                        Nine Months Ended                                                                                                                  Nine Months Ended
                                                                                                                                        December 31, 2016                                                                                                                  December 31, 2015
                                                                                                      -------------------------------------------------------------------------------                                               -----------------------------------------------------------------------------------------
                                                                                                                  Amount                                                       % of Total                                                       Amount                                                            % of Total
                                                                                                      -------------------------------                                          ----------                                           -------------------------------                                          --------------------
                                                                                                                                                                                                                                                                                                              
Net Revenues by Distribution Channel
    Digital online                                                                                                       $   643,051                                                  53%                                                              $   502,860                                                            49%
    Physical retail and other                                                                             565,141                                                  47%                                               533,632                                                            51%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
Total net revenues                                                                                      1,208,192                                                 100%                                             1,036,492                                                           100%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
                                                                                                                                                                                                                                                                                                              
Change in Deferred Net Revenues
    Digital online                                                                                                       $   139,726                                                                                                                   $   105,734
    Physical retail and other                                                                             148,901                                                                                                     75,888
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
Total changes in deferred net revenues                                                                    288,627                                                                                                    181,622
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
                                                                                                                                                                                                                                                                                                              
                                                                                                                                        Nine Months Ended                                                                                                                  Nine Months Ended
                                                                                                                                        December 31, 2016                                                                                                                  December 31, 2015
                                                                                                      -------------------------------------------------------------------------------                                               -----------------------------------------------------------------------------------------
                                                                                                                  Amount                                                       % of Total                                                       Amount                                                            % of Total
                                                                                                      -------------------------------                                          ----------                                           -------------------------------                                          --------------------
Net Revenues by Platform Mix
    Console                                                                                                              $   961,285                                                  80%                                                              $   878,838                                                            85%
    PC and other                                                                                          246,907                                                  20%                                               157,654                                                            15%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
Total net revenues                                                                                      1,208,192                                                 100%                                             1,036,492                                                           100%
                                                                                                      -------------------- ---------                                           ----------                                           -------------------- ---------                                           --------------------
                                                                                                                                                                                                                                                                                                              
Change in Deferred Net Revenues
    Console                                                                                                              $   274,386                                                                                                                   $    42,940
    PC and other                                                                                           14,241                                                                                                    138,682
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
Total changes in deferred net revenues                                                                    288,627                                                                                                    181,622
                                                                                                      -------------------- ---------                                                                                                -------------------- ---------
                                                                                                                                                                                                                                                                                                              
 
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
SELECTED DATA                                                                                                                                                                               
(in thousands)
     
                     Three Months Ended December 31, 2016                            Net Revenues       Cost of Goods Sold-     Cost of Goods       Cost of Goods Sold-      Cost of Goods    
                                                                                                                                              Internal Royalties                        Sold- Software                             Product Costs                           Sold- Licenses
                                                                                                                                                                                          Development
                                                                                                                                                                                           Costs and
                                                                                                                                                                                           Royalties
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $   476,473                                $ 103,613                              $ 109,900                                 $  70,089                                  $  27,472
                       Net effect from deferral and related cost of goods sold                             268,350                                        -                                 58,902                                    47,271                                     11,953
                       Stock-based compensation                                                                                                                                             (6,022 )
                                                                                                                                                                                                                                                                                                                
                     Three Months Ended December 31, 2016                             Selling and           General and         Research and         Depreciation and        Interest and     
                                                                                                          Marketing                             Administrative                            Development                              Amortization                              Other, net
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $    95,820                                $  52,939                              $  37,589                                 $   7,460                                  $  (3,715 )
                       Stock-based compensation                                                             (2,441 )                                (10,382 )                               (3,244 )
                       Non-cash amortization of discount on Convertible Notes                                                                                                                                                                                                     4,922
                       Acquisition related expenses                                                                                                    (317 )
                                                                                                                                                                                                                                                                                                                
                     Three Months Ended December 31, 2015                            Net Revenues       Cost of Goods Sold-     Cost of Goods       Cost of Goods Sold-      Cost of Goods    
                                                                                                                                              Internal Royalties                        Sold- Software                             Product Costs                           Sold- Licenses
                                                                                                                                                                                          Development
                                                                                                                                                                                           Costs and
                                                                                                                                                                                           Royalties
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $   414,221                                $  95,311                              $  61,653                                 $  74,934                                  $  25,963
                       Net effect from deferral and related cost of goods sold                              72,570                                                                          (1,864 )                                   6,186                                     10,564
                       Stock-based compensation                                                                                                                                             (4,131 )
                                                                                                                                                                                                                                                                                                                
                     Three Months Ended December 31, 2015                             Selling and           General and         Research and      Business Reorganization  Depreciation and      Interest and
                                                                                                          Marketing                             Administrative                            Development                                                                       Amortization                            Other, net
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $    59,846                                $  49,061                              $  27,944                                 $  71,172                                  $   7,534                             $    (8,018 )
                       Stock-based compensation                                                             (2,363 )                                (11,761 )                                 (482 )
                       Non-cash amortization of discount on Convertible Notes                                                                                                                                                                                                                                             5,910
                       Impact of business reorganization                                                                                                                                                                             (71,172 )
                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
SELECTED DATA
(in thousands)
                                                                                                                                                                                                                                                                                                                
                     Nine Months Ended December 31, 2016                             Net Revenues       Cost of Goods Sold-     Cost of Goods       Cost of Goods Sold-      Cost of Goods    
                                                                                                                                              Internal Royalties                        Sold- Software                             Product Costs                           Sold- Licenses
                                                                                                                                                                                          Development
                                                                                                                                                                                           Costs and
                                                                                                                                                                                           Royalties
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $ 1,208,192                                $ 240,711                              $ 218,753                                 $ 170,127                                  $  78,468
                      Net effect from deferral and related cost of goods sold                              288,627                                        -                                 60,971                                    50,071                                     11,239
                      Stock-based compensation                                                                                                                                             (15,974 )
                                                                                                                                                                                                                                                                                                                
                     Nine Months Ended December 31, 2016                                                 Selling and           General and         Research and         Depreciation and        Interest and     
                                                                                                          Marketing                             Administrative                            Development                              Amortization                              Other, net
                     -------------------------------------------------------                        -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $   247,141                                $ 149,367                              $ 101,494                                 $  22,329                                  $ (15,298 )
                       Stock-based compensation                                                             (7,269 )                                (26,851 )                               (5,317 )
                       Non-cash amortization of discount on Convertible Notes                                                                                                                                                                                                    17,903
                       Acquisition related expenses                                                                                                    (317 )
                                                                                                                                                                                                                                                                                                                
                     Nine Months Ended December 31, 2015                             Net Revenues       Cost of Goods Sold-     Cost of Goods       Cost of Goods Sold-      Cost of Goods    
                                                                                                                                              Internal Royalties                        Sold- Software                             Product Costs                           Sold- Licenses
                                                                                                                                                                                          Development
                                                                                                                                                                                           Costs and
                                                                                                                                                                                           Royalties
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $ 1,036,492                                $ 256,058                              $ 152,160                                 $ 153,652                                  $  42,546
                       Net effect from deferral and related cost of goods sold                             181,622                                                                           8,364                                    22,302                                     33,382
                       Stock-based compensation                                                                                                                                            (12,935 )
                                                                                                                                                                                                                                                                                                                
                     Nine Months Ended December 31, 2015                              Selling and           General and         Research and      Business Reorganization  Depreciation and      Interest and
                                                                                                          Marketing                             Administrative                            Development                                                                       Amortization                            Other, net
                     -------------------------------------------------------   -------------------- -----------------   -------------------- -----------------   -------------------- ---------------   -------------------- ---------------------   -------------------- -------------   -------------------- ------------------
                                                                                                                                                                                                                                                                                                                
As reported                                                                                            $   160,289                                $ 148,057                              $  86,499                                 $  71,172                                  $  21,462                               ($ 23,948 )
                       Stock-based compensation                                                             (6,859 )                                (31,324 )                               (3,026 )
                       Non-cash amortization of discount on Convertible Notes                                                                                                                                                                                                                                            17,454
                       Impact of business reorganization                                                                                             (1,228 )                                                                        (71,172 )

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170207006273r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170207006273/en/

SOURCE: Take-Two Interactive

Take-Two Interactive Software, Inc. 
Investor Relations: 
Henry A. Diamond, 646-536-3005 
Senior Vice President 
Investor Relations & Corporate Communications 
Henry.Diamond@take2games.com 
or 
Corporate Press: 
Alan Lewis, 646-536-2983 
Vice President 
Corporate Communications & Public Affairs 
Alan.Lewis@take2games.com


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