Take-Two Interactive Software, Inc. Reports Strong Results for Third Quarter Fiscal 2013

  Take-Two Interactive Software, Inc. Reports Strong Results for Third Quarter
  Fiscal 2013

               Non-GAAP Net Revenue Grew 71% to $405.0 Million

        Non-GAAP Net Income Increased 148% to $0.67 Per Diluted Share

      Increases Low-End of Financial Outlook Range for Fiscal Year 2013

                   Announces Share Repurchase Authorization

Business Wire

NEW YORK -- February 5, 2013

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported financial
results for its third quarter fiscal 2013, ended December 31, 2012, and
increased the low-end of its financial outlook range for its fiscal year 2013,
ending March 31, 2013. In addition, the Company announced that its Board of
Directors has authorized the repurchase of up to 7.5 million shares of the
Company’s common stock.

For its third quarter fiscal 2013, GAAP net revenue was $415.8 million, as
compared to $236.3 million for its third quarter fiscal 2012. Non-GAAP net
revenue was $405.0 million, as compared to $236.3 million for the year-ago
period. GAAP net income from continuing operations was $70.9 million, or $0.66
per diluted share, as compared to $14.2 million, or $0.16 per diluted share,
for the year-ago period. Non-GAAP net income was $78.8 million, or $0.67 per
diluted share, as compared to $29.0 million, or $0.27 per diluted share, for
the year-ago period. As of December 31, 2012, the Company had cash and cash
equivalents of $448.7 million.

The strongest contributors to net revenue in the third quarter were the
release of NBA 2K13, continuing sales of Borderlands 2, the release of XCOM:
Enemy Unknown, and catalog sales led by Grand Theft Auto IV and Red Dead
Redemption. Catalog sales accounted for 22% of Non-GAAP net revenue. Revenue
from digitally delivered content grew 244% year-over-year and accounted for
23% of Non-GAAP net revenue, driven by offerings for the Borderlands franchise
– particularly digital sales of Borderlands 2 and its add-on content, XCOM:
Enemy Unknown, the Grand Theft Auto franchise, and NBA 2K13.

Management Comments

“Take-Two’s positive business momentum continued in the third quarter,
enabling us to deliver growth and profits that exceeded our outlook,” said
Strauss Zelnick, Chairman and CEO of Take-Two. “Our results benefited from the
record-breaking launch of NBA 2K13, along with continued strong demand for
Borderlands 2, the successful launch of XCOM: Enemy Unknown, and robust
holiday sales of our catalog and growing portfolio of digitally delivered
offerings. With consumer anticipation building for the launches of BioShock
Infinite and Grand Theft Auto V, we are well positioned for a solid finish to
fiscal year 2013 and substantial revenue and earnings growth in fiscal year
2014.

“I am also pleased to report that our Board of Directors has authorized the
Company to return capital to shareholders through the repurchase of its common
stock. Given our strong balance sheet and favorable business outlook in both
the short and long-term, we have ample capital to pursue a variety of
investment opportunities.”

Business and Product Highlights

Since October 1, 2012:

Rockstar Games:

  *Released Rockstar Games Collection: Edition 1. This box set features four
    of the most critically acclaimed titles of the current console generation,
    including Red Dead Redemption, L.A. Noire, Grand Theft Auto: Episodes from
    Liberty City and Midnight Club: Los Angeles Complete Edition.
  *Released Grand Theft Auto: Vice City for a wide range of iOS and Android
    devices to celebrate the 10^th anniversary of one of the highest-rated and
    top-selling games of all time for the PlayStation 2.*
  *Announced that it plans to launch Grand Theft Auto V worldwide on
    September 17, 2013.

2K:

  *Released NBA 2K13, the next installment in its top-rated and top-selling
    basketball franchise,* which has sold-in more than 15 million units since
    the release of NBA 2K11 in October 2010. NBA 2K13 received critical
    acclaim, achieved franchise record-setting first week sales, and has
    sold-in nearly 4.5 million units to date. The title is being supported by
    the new NBA 2K Everywhere offerings, which gives fans the opportunity to
    experience NBA 2K virtually anywhere via an all-new mobile companion app,
    a social game on Facebook, and a full-featured mobile version of NBA 2K13.
  *Launched XCOM: Enemy Unknown, reintroducing one of the greatest video game
    franchises of all time. The title is a critical and commercial success,
    with strong digital sales and a near 90 average review score on
    Metacritic. 2K has released two downloadable add-on content packs for
    XCOM: Enemy Unknown and has additional content planned for later this
    year.
  *Launched its holiday lineup of family-oriented titles, including
    Nickelodeon Dance 2 for consoles and Bubble Guppies and Team Umizoomi &
    Dora’s Fantastic Flight for the Nintendo DS.
  *Launched Borderlands Legends, an all-new action packed Borderlands
    experience designed specifically for mobile devices.
  *NBA 2K Online launched commercially on the Tencent Games portal in China.
    Co-developed by Visual Concepts and Tencent, this free-to-play game builds
    on 2K’s award-winning basketball simulation franchise in an exciting
    massively multiplayer online game (MMOG) format.
  *Pro Baseball 2K, an online baseball simulation game created by 2K in
    partnership with Nexon, entered closed beta in Korea in November. Pro
    Baseball 2K features authentic and true-to-life representations of the
    professional players of the Korean Baseball Organization (KBO), and is
    planned for open beta release in spring 2013.
  *Announced that Major League Baseball 2K13 is planned for release on March
    5, 2013. The title will feature Tampa Bay Rays’ Cy Young Award winning
    pitcher David Price as cover athlete and will once again be supported with
    the Perfect Game Challenge, 2K Sports’ groundbreaking $1 million
    competition.
  *Announced that the MMOG which 2K has been developing in partnership with
    South Korean-based studio XLGAMES is based on 2K’s successful Civilization
    franchise. Under the leadership of XLGAMES’ CEO and MMOG design luminary,
    Jake Song, Civilization Online (working title) is being designed from the
    ground up as an entirely new online entertainment experience, which will
    initially launch in Asian markets.

* According to 2008-2012 Metacritic.com and The NPD Group estimates of U.S.
retail video game sales through December 2012.

Share Repurchase Authorization

Take-Two also announced that its Board of Directors has authorized the
repurchase of up to 7.5 million shares of its common stock. The authorization
permits the Company to purchase shares from time to time through a variety of
methods, including in the open market or through privately negotiated
transactions, in accordance with applicable securities laws. It does not
obligate the Company to make any purchases at any specific time or situation.
Repurchases are subject to the availability of stock, prevailing market
conditions, the trading price of the stock, the Company's financial
performance and other conditions. The program may be suspended or discontinued
at any time for any reason. As of February 1, 2013, the Company had
approximately 91.64 million common shares outstanding.

Financial Outlook for Fiscal 2013

Take-Two is increasing the low-end of its outlook range for fiscal year 2013
to reflect its strong recent business trends. In addition, the Company is
providing its financial outlook for the fourth quarter ending March 31, 2013
as follows:

                                       Fourth Quarter     Fiscal Year
                                         Ending 3/31/2013   Ending 3/31/2013
Non-GAAP Net Revenue                     $235 to $285         $1.15 to $1.20
                                         Million              Billion
                                                              
Non-GAAP net income per diluted          $0.10 to $0.25       $0.05 to $0.20
share (1)
                                                              
Net reduction (increase) to income
per share from deferral in net           ($0.01)              $0.02
revenues
                                                              
Stock-based compensation expense per     $0.08                $0.33
share (2)
                                                              
Non-cash amortization of discount on     $0.04                $0.19
convertible notes per share
                                                              
Expenses related to reorganization       $0.01                $0.02
and unusual legal matters per share
                                                              
Non-cash tax expense per share           $0.00                $0.02


           The Company’s Non-GAAP net income per diluted share outlook for the
   1)  fiscal year ending March 31, 2013 includes the negative impact from
           a one-time contractual obligation of $15 million, or $0.16 per
           diluted share.
           The Company's stock-based compensation expense for the periods
           above includes the cost of approximately 2.2 million shares issued
      2)   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.

Key assumptions and dependencies underlying the Company’s financial outlook
include: the timely delivery of the titles included in this financial outlook;
the ability to develop and publish products that capture market share for the
current generation video game and computer entertainment systems; and stable
foreign exchange rates. See also “Cautionary Note Regarding Forward Looking
Statements” below.

Product Releases

The following
titles were                                                 
released since
October 1, 2012:
                                                                   
Label              Title                    Platforms        Release
                                                                   Date
2K Sports            NBA 2K13                   Xbox 360, PS3,     October 2,
                                                Wii, PSP, PC       2012*
2K Sports            NBA 2K13                   iOS, Android       October 2,
                                                                   2012*
2K Sports            MyNBA2K                    iOS, Android       October 2,
                                                                   2012
2K Sports            NBA 2KMyLIFE               Facebook           October 2,
                                                                   2012
2K Games             XCOM: Enemy Unknown        Xbox 360, PS3,     October 9,
                                                PC                 2012*
                     Borderlands 2: Captain     Xbox 360, PS3,     October 16,
2K Games             Scarlett and her           PC                 2012
                     Pirates Booty (DLC)
                     XCOM: Enemy Unknown:       Xbox 360, PS3,     October 23,
2K Games             Elite Soldier Pack         PC                 2012
                     (DLC)
2K Sports            NBA 2K Online              Tencent (China     October 24,
                                                only)              2012
                     Max Payne 3: Hostage       Xbox 360, PS3,     October 30,
Rockstar Games       Negotiation Map Pack       PC                 2012
                     (DLC)
2K Games             Borderlands Legends        iOS                October 31,
                                                                   2012
Rockstar Games       Rockstar Games             Xbox 360, PS3      November 6,
                     Collection: Edition 1                         2012
2K Play              Nickelodeon Dance 2        Xbox 360, Wii      November
                                                                   12, 2012
2K Play              Bubble Guppies             DS                 November
                                                                   12, 2012
2K Play              Team Umizoomi & Dora’s     DS                 November
                     Fantastic Flight                              12, 2012
2K Sports            NBA 2K13                   WiiU               November
                                                                   19, 2012
                     Borderlands 2: Mr.         Xbox 360, PS3,     November
2K Games             Torgue’s Campaign of       PC                 20, 2012
                     Carnage (DLC)
                     Max Payne 3: Painful       Xbox 360, PS3,     December 4,
Rockstar Games       Memories Map Pack          PC                 2012
                     (DLC)
                     XCOM: Enemy Unknown:       Xbox 360, PS3,     December 4,
2K Games             Slingshot Content Pack     PC                 2012
                     (DLC)
2K Play              Herd, Herd, Herd           iOS                December 6,
                                                                   2012
Rockstar Games       Grand Theft Auto: Vice     iOS                December 6,
                     City                                          2012
Rockstar Games       Grand Theft Auto: Vice     Android            December
                     City                                          12, 2012
2K Play              Herd, Herd, Herd           Android            January 9,
                                                                   2013
                     NBA 2K13 All-Star                             January 9,
2K Sports            presented by Sprite        Xbox 360, PS3      2013
                     (DLC)
2K Games             BioShock: Ultimate         Xbox 360, PS3      January 15,
                     Rapture Edition                               2013
                     Borderlands 2: Sir         Xbox 360, PS3,     January 15,
2K Games             Hammerlock’s Big Game      PC                 2013
                     Hunt (DLC)
                     Max Payne 3:               Xbox 360, PS3,     January 22,
Rockstar Games       Deathmatch Made In         PC                 2013
                     Heaven Mode Pack (DLC)
                                                                   
*North American release date; international release date typically follows
three days after.


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

Label            Title                   Platforms        Planned
                                                                Release
2K Games         Borderlands 2: Add-On   Xbox 360, PS3    February 26,
                   Content Pack                                 2013
2K Sports          Major League Baseball     Xbox 360, PS3      March 5, 2013
                   2K13
2K Games           BioShock Infinite         Xbox 360, PS3,     March 26, 2013
                                             PC
Rockstar Games     Grand Theft Auto V        Xbox 360, PS3      September 17,
                                                                2013
2K Games           XCOM                      Xbox 360, PS3,     Fiscal Year
                                             PC                 2014
                                                                

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.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally
accepted accounting principles (GAAP), the Company uses Non-GAAP measures of
financial performance. The Company believes that these Non-GAAP financial
measures, when taken into consideration with the corresponding GAAP financial
measures, are important in gaining an understanding of the Company’s ongoing
business. These Non-GAAP financial measures also provide for comparative
results from period to period. Therefore, the Company believes it is
appropriate to exclude the impact of certain items as follows:

  *Net effect from deferral in net revenues - the Company defers revenue and
    related costs from the sale of certain titles that have undelivered
    elements upon the sale of the game and recognizes that revenue upon the
    delivery of the undelivered elements. As there is no impact to the
    Company’s operating cash flow, management excludes the impact of deferred
    net revenue and related costs from its Non-GAAP financial measures when
    evaluating the Company's operating performance, when planning, forecasting
    and analyzing future periods, and when assessing the performance of its
    management team. In addition, we believe that these Non-GAAP financial
    measures provide a more timely indication of trends in our business,
    provide comparability with the way our business is measured by analysts,
    and consistency with industry data sources.
  *Stock-based compensation – the Company does not consider stock-based
    compensation charges when evaluating business performance and management
    does not contemplate stock-based compensation expense in its short- and
    long-term operating plans. As a result, the Company has excluded such
    expenses from its Non-GAAP financial measures.
  *Business reorganization, restructuring and related expenses – although the
    Company has incurred business reorganization expenses in the past, each
    charge relates to a discrete event based on a unique set of business
    objectives. Management does not believe these charges reflect the
    Company's primary business, ongoing operating results or future outlook.
    As such, the Company believes it is appropriate to exclude these expenses
    and related charges from its Non-GAAP financial measures.
  *Income (loss) from discontinued operations – the Company does not engage
    in sales of subsidiaries on a regular basis and therefore believes it is
    appropriate to exclude such gains (losses) from its Non-GAAP financial
    measures. As the Company is no longer active in its discontinued
    operations, it believes it is appropriate to exclude income (losses)
    thereon from its Non-GAAP financial measures.
  *Professional fees and expenses associated with unusual legal and other
    matters – the Company has incurred expenses for legal professional fees
    that are outside its ordinary course of business. As a result, the Company
    has excluded such expenses from its Non-GAAP financial measures.
  *Non-cash amortization of discount on convertible notes – the Company
    records non-cash amortization of discount on convertible notes as interest
    expense in addition to the interest expense already recorded for coupon
    payments. The Company excludes the non-cash portion of the interest
    expense from its Non-GAAP financial measures because these amounts are
    unrelated to its ongoing business operations.
  *Non-cash tax expense for the impact of deferred tax liabilities associated
    with tax deductible amortization of goodwill – due to the nature of the
    adjustment as well as the expectation that it will not have any cash
    impact in the foreseeable future, the Company believes it is appropriate
    to exclude this expense from its Non-GAAP financial measures.

These Non-GAAP financial measures are not intended to be considered in
isolation from, as a substitute for, or superior to, GAAP results. These
Non-GAAP financial measures may be different from similarly titled measures
used by other companies.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a
leading developer, marketer and publisher of interactive entertainment for
consumers around the globe. The Company develops and publishes products
through its two wholly-owned labels Rockstar Games and 2K, which publishes its
titles under the 2K Games, 2K Sports and 2K Play brands. Our products are
designed for console systems, handheld gaming 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," "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 for current generation platforms,
the timely release and significant market acceptance of our games, the ability
to maintain acceptable pricing levels on our games, our ability to raise
capital if needed and risks associated with international operations. Other
important factors and information are contained in the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 2012, in the section entitled
"Risk Factors," 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share amounts)
                                
                   Three months ended December     Nine months ended December
                   31,                             31,
                    2012          2011          2012          2011    
                                                                   
                                                                   
Net revenue        $ 415,773      $ 236,325      $ 914,996      $ 677,739 
                                                                   
Cost of goods
sold:
Software
development          77,641          27,236          260,180         129,086
costs and
royalties
Product costs        99,020          68,803          244,593         207,391
Licenses             31,735          20,521          47,483          42,914
Internal            7,903         9,907         9,261         32,998  
royalties
Total cost of       216,299       126,467       561,517       412,389 
goods sold
                                                                   
Gross profit         199,474         109,858         353,479         265,350
                                                                   
Selling and          60,724          40,228          205,582         143,684
marketing
General and          32,880          29,705          106,891         86,067
administrative
Research and         22,369          16,823          57,001          49,340
development
Depreciation
and                 2,509         2,854         7,828         9,383   
amortization
Total
operating           118,482       89,610        377,302       288,474 
expenses
Income (loss)
from                 80,992          20,248          (23,823 )       (23,124 )
operations
Interest and        (8,094  )      (6,190  )      (23,562 )      (14,203 )
other, net
Income (loss)
from
continuing           72,898          14,058          (47,385 )       (37,327 )
operations
before income
taxes
Provision
(benefit) for       2,021         (127    )      4,947         4,368   
income taxes
Income (loss)
from                 70,877          14,185          (52,332 )       (41,695 )
continuing
operations
Income (loss)
from
discontinued        488           (81     )      368           (285    )
operations,
net of taxes
Net income         $ 71,365       $ 14,104       $ (51,964 )     $ (41,980 )
(loss)
                                                                   
Earnings
(loss) per
share:
Continuing         $ 0.76          $ 0.16          $ (0.61   )     $ (0.50   )
operations
Discontinued        -             -             -             (0.01   )
operations
Basic earnings
(loss) per         $ 0.76         $ 0.16         $ (0.61   )     $ (0.51   )
share
                                                                   
Continuing         $ 0.66          $ 0.16          $ (0.61   )     $ (0.50   )
operations
Discontinued        -             -             -             (0.01   )
operations
Diluted
earnings           $ 0.66         $ 0.16         $ (0.61   )     $ (0.51   )
(loss) per
share ^ (1)
                                                                   
Weighted
average shares                                                  
outstanding:
^(2)
Basic                93,338          89,523          85,382          83,003
Diluted             119,359       89,523        85,382        83,003  
                                                                             

       For the three months ended December 31, 2012, diluted EPS has been
       calculated using the “if-converted” method as a result of the issuances
       of the 4.375% Convertible Notes in June 2009 (the "4.375% Convertible
       Notes") and the 1.75% Convertible Notes in November 2011 (the "1.75%
^(1)  Convertible Notes" and together with the 4.375% Convertible Notes, the
       "Convertible Notes") for which diluted net income has been adjusted by
       $7,834 related to interest and debt issuance costs, net of tax. The
       shares used for computing the three months ended December 31, 2012
       diluted EPS include 26,021 shares related to the potential dilution
       from the Convertible Notes.
       
       The “if-converted” method was not used for the other periods presented
       as the assumed conversion would have been anti-dilutive.
       
^(2)   Basic and diluted include participating shares of 7,596 and 5,958 for
       the three months ended December 31, 2012 and 2011, respectively.
       

                                                  
                        Three months ended             Nine months ended
                        December 31,                   December 31,
OTHER INFORMATION       2012             2011        2012          2011
                                                                       
Geographic revenue
mix
United States           65%                65%         58%             52%
International           35%                35%         42%             48%
                                                                       
Platform revenue
mix
Microsoft Xbox 360      43%                39%         44%             44%
Sony PlayStation 3      34%                38%         34%             38%
PC and other            18%                11%         18%             10%
Nintendo Wii            2%                 4%          1%              2%
Sony PSP                1%                 3%          1%              2%
Nintendo DS             1%                 3%          1%              2%
Sony PlayStation 2      1%                 2%          1%              2%
                                                                       


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
                                                             
                                                December 31,     March 31,
                                                 2012           2012      
                                                                 
ASSETS                                          (Unaudited)
Current assets:
Cash and cash equivalents                       $ 448,723        $ 420,279
Accounts receivable, net of allowances of
$62,746 and $51,002 at December 31, 2012
and March 31, 2012, respectively                  94,241           45,035
Inventory                                         29,687           22,477
Software development costs and licenses           199,813          211,224
Prepaid expenses and other                       45,426         44,602    
Total current assets                             817,890        743,617   
                                                                 
Fixed assets, net                                 23,701           18,949
Software development costs and licenses, net      74,327           104,755
of current portion
Goodwill                                          228,786          228,169
Other intangibles, net                            9,301            16,266
Other assets                                     35,776         37,671    
Total assets                                    $ 1,189,781     $ 1,149,427 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                $ 42,263         $ 46,681
Accrued expenses and other current                211,425          156,768
liabilities
Deferred revenue                                  26,348           13,864
Liabilities of discontinued operations           1,181          1,412     
Total current liabilities                        281,217        218,725   
                                                                 
Long-term debt                                    330,311          316,340
Other long-term liabilities                       12,480           16,316
Liabilities of discontinued operations, net      959            2,319     
of current portion
Total liabilities                                624,967        553,700   
Commitments and contingencies
                                                                 
Stockholders' equity:
Preferred stock, $.01 par value, 5,000            -                -
shares authorized
Common stock, $.01 par value, 200,000 and
150,000 shares authorized at
December 31, 2012 and March 31, 2012,
respectively; 93,659 and 90,215 shares
issued and outstanding at December 31, 2012 and   937              902
March 31, 2012, respectively
Additional paid-in capital                        819,871          799,431
Accumulated deficit                               (263,303  )      (211,339  )
Accumulated other comprehensive income           7,309          6,733     
Total stockholders' equity                       564,814        595,727   
Total liabilities and stockholders' equity      $ 1,189,781     $ 1,149,427 
                                                                             

                                                            
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
                                                                
                                                Nine months ended December 31,
                                                  2012          2011     
                                                                  
Operating activities:
Net loss                                        $  (51,964  )     $ (41,980  )
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization and impairment of software            189,319          117,158
development costs and licenses
Depreciation and amortization                      7,828            9,383
(Income) loss from discontinued operations         (368     )       285
Amortization and impairment of intellectual        6,678            979
property
Stock-based compensation                           22,778           23,463
Amortization of discount on Convertible            13,971           7,294
Notes
Amortization of debt issuance costs                1,521            1,014
Other, net                                         735              778
Changes in assets and liabilities, net of
effect from purchases of businesses:
Accounts receivable                                (49,206  )       30,943
Inventory                                          (7,210   )       2,062
Software development costs and licenses            (150,479 )       (147,315 )
Prepaid expenses, other current and other          (474     )       4,125
non-current assets
Deferred revenue                                   12,484           (1,640   )
Accounts payable, accrued expenses and             47,072           (59,574  )
other liabilities
Net cash used in discontinued operations          (1,223   )      (1,580   )
Net cash provided by (used in) operating          41,462         (54,605  )
activities
                                                                  
Investing activities:
Purchase of fixed assets                           (12,317  )       (7,984   )
Net cash used in discontinued operations          -              (1,475   )
Net cash used in investing activities             (12,317  )      (9,459   )
                                                                  
Financing activities:
Proceeds from exercise of employee stock           -                238
options
Proceeds from issuance of Convertible Notes        -                250,000
Payment of debt issuance costs                    -              (6,875   )
Net cash provided by financing activities         -              243,363  
                                                                  
Effects of foreign exchange rates on cash         (701     )      (6,342   )
and cash equivalents
                                                                  
Net increase in cash and cash equivalents          28,444           172,957
Cash and cash equivalents, beginning of           420,279        280,359  
period
Cash and cash equivalents, end of period        $  448,723       $ 453,316  
                                                                             


TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
RECONCILIATION OF GAAP TO Non-GAAP MEASURES (Unaudited)
(in thousands, except per share amounts)
                                                         
                                                                   
                     Three months ended           Nine months ended December
                     December 31,                  31,
                      2012          2011         2012          2011    
Net Revenues
GAAP Net             $ 415,773       $ 236,325     $ 914,996       $ 677,739
Revenues
Net effect from
deferral in net       (10,766 )      -            4,183         -       
revenues
Non-GAAP Net         $ 405,007      $ 236,325     $ 919,179      $ 677,739 
Revenues
                                                                   
Gross Profit
GAAP Gross           $ 199,474       $ 109,858     $ 353,479       $ 265,350
Profit
Net effect from
deferral in net        (6,421  )       -             3,611           -
revenues
Stock-based           1,790         794          8,034         4,379   
compensation
Non-GAAP Gross       $ 194,843      $ 110,652     $ 365,124      $ 269,729 
Profit
                                                                   
Income (Loss)
from Operations
GAAP Income
(Loss) from          $ 80,992        $ 20,248      $ (23,823 )     $ (23,124 )
Operations
Net effect from
deferral in net        (6,421  )       -             3,611           -
revenues
Stock-based            8,681           10,803        22,778          23,463
compensation
Business
reorganization         384             247           758             1,015
and related
Professional
fees and legal        -             20           -             196     
matters
Non-GAAP Income      $ 83,636       $ 31,318      $ 3,324        $ 1,550   
from Operations
                                                                   
Net Income
(Loss)
GAAP Net Income      $ 71,365        $ 14,104      $ (51,964 )     $ (41,980 )
(Loss)
Net effect from
deferral in net        (6,421  )       -             3,611           -
revenues
Stock-based            8,681           10,803        22,778          23,463
compensation
Business
reorganization         384             247           758             1,015
and related
Professional
fees and legal         -               20            -               196
matters
Non-cash
amortization of
discount on            4,772           3,234         13,971          7,294
Convertible
Notes
Non-cash tax           482             465           1,438           1,286
expense
Discontinued          (488    )      81           (368    )      285     
operations
Non-GAAP Net         $ 78,775       $ 28,954      $ (9,776  )     $ (8,441  )
Income (Loss)
                                                                   
Diluted Earnings
(Loss) Per Share
GAAP earnings        $ 0.66          $ 0.16        $ (0.61   )     $ (0.51   )
(loss) per share
Non-GAAP
earnings (loss)      $ 0.67          $ 0.27        $ (0.11   )     $ (0.10   )
per share ^(1)
                                                                   
Number of
diluted shares
used in
computation
GAAP                   119,359         89,523        85,382          83,003
Non-GAAP ^(2)          119,359         115,544       85,382          83,003
                                                                   

       For the three months ended December 31, 2012 and 2011, Non-GAAP diluted
       EPS has been calculated using the “if-converted” method as a result of
       the issuances of the 4.375% Convertible Notes in June 2009 (the "4.375%
       Convertible Notes") and the 1.75% Convertible Notes in November 2011
       (the "1.75% Convertible Notes" and together with the 4.375% Convertible
^(1)  Notes, the "Convertible Notes") for which diluted net income has been
       adjusted by $3,062 and $2,378, respectively, related to interest and
       debt issuance costs, net of tax. The shares used for computing the
       three months ended December 31, 2012 and 2011 Non-GAAP diluted EPS
       include 26,021 shares related to the potential dilution from the
       Convertible Notes.
       
       The “if-converted” method was not used for the nine months ended
       December 31, 2012 and 2011 as the assumed conversion would have been
       anti-dilutive.
       
       For the three months ended December 31, 2012 and 2011, the diluted
^(2)   shares used in the computation of Non-GAAP EPS include participating
       shares of 7,596 and 5,958, respectively.
       

Contact:

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