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Take-Two Interactive Software, Inc. Reports Strong Results for Fourth Quarter and Fiscal Year 2013



  Take-Two Interactive Software, Inc. Reports Strong Results for Fourth
  Quarter and Fiscal Year 2013

     Non-GAAP Net Revenue for Fiscal Year 2013 Grew 48% to $1.222 Billion

Non-GAAP Net Income for Fiscal Year 2013 Increased to $0.36 Per Diluted Share

 Company Expects Non-GAAP Net Income Per Diluted Share of $2.05 to $2.30 for
                               Fiscal Year 2014

Business Wire

NEW YORK -- May 13, 2013

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong
financial results for its fourth quarter and fiscal year 2013, ended March 31,
2013. In addition, the Company provided its initial financial outlook for its
first quarter and fiscal year 2014.

Fiscal Fourth Quarter 2013

For fiscal fourth quarter 2013, GAAP net revenue was $299.5 million, as
compared to $148.1 million for fiscal fourth quarter 2012. Non-GAAP net
revenue was $303.1 million, as compared to $148.1 million for the year-ago
period. GAAP net income from continuing operations was $21.2 million, or $0.23
per diluted share, as compared to a net loss of $66.0 million, or $0.78 per
diluted share, for the year-ago period. Non-GAAP net income was $42.9 million,
or $0.38 per diluted share, as compared to a Non-GAAP net loss of $50.9
million, or $0.60 per diluted share, for the year-ago period. As of March 31,
2013, the Company had cash and cash equivalents of $402.5 million.

The largest contributors to net revenue in fiscal fourth quarter 2013 were the
release of BioShock® Infinite; catalog sales led by Grand Theft Auto® IV, Red
Dead Redemption® and Sid Meier’s Civilization® V; continuing sales of NBA®
2K13 and Borderlands® 2; and the release of Major League Baseball® 2K13.
Catalog sales accounted for 25% of Non-GAAP net revenue. Revenue from
digitally delivered content grew 192% year-over-year and accounted for 27% of
Non-GAAP net revenue, driven by offerings for Borderlands 2, BioShock
Infinite, the Grand Theft Auto franchise and NBA 2K13.

Fiscal Year 2013

For fiscal year 2013, GAAP net revenue was $1.214 billion, as compared to
$825.8 million for fiscal year 2012. Non-GAAP net revenue was $1.222 billion,
as compared to $825.8 million for the prior fiscal year. GAAP net loss from
continuing operations was $31.2 million, or $0.36 per diluted share, as
compared to $107.7 million, or $1.30 per diluted share, for the prior fiscal
year. Non-GAAP net income was $33.1 million, or $0.36 per diluted share, as
compared to a Non-GAAP net loss of $59.4 million, or $0.71 per diluted share,
for the prior fiscal year. Both GAAP loss from continuing operations and
Non-GAAP net income for fiscal year 2013 include the $15 million negative
impact from a one-time contractual obligation, which was recorded in fiscal
first quarter 2013.

The largest contributors to net revenue in fiscal year 2013 were Borderlands
2, NBA 2K13, BioShock Infinite, Max Payne® 3, Grand Theft Auto IV, XCOM®:
Enemy Unknown and Red Dead Redemption. Revenue from digitally delivered
content grew 148% year-over-year and accounted for 22% of Non-GAAP net
revenue, driven by offerings for Borderlands 2, the Grand Theft Auto
franchise, NBA 2K13, Sid Meier’s Civilization V and XCOM: Enemy Unknown.

Management Comments

“Take-Two delivered strong revenue growth and solid non-GAAP earnings for
fiscal year 2013, driven by robust demand for our groundbreaking new releases,
iconic catalog titles and expanding portfolio of digitally delivered
offerings,” said Strauss Zelnick, Chairman and CEO of Take-Two. “With BioShock
Infinite, Borderlands 2, NBA 2K13 and XCOM: Enemy Unknown, our 2K label
released four of the past year’s most critically acclaimed titles. Our
commitment to delight consumers with the highest-quality interactive
entertainment experiences enabled Take-Two to have an outstanding year,
despite a challenging environment for many in our industry.

“2013 is the 20^th anniversary of Take-Two’s founding and, today, our Company
is better positioned for success than at any other time in its history. With
Rockstar Games launching Grand Theft Auto V in September, fiscal 2014 is
poised to be one of our best years ever. Looking ahead, we have an extensive
pipeline of next-generation and emerging platform titles in development,
including both new intellectual property and releases from our proven
franchises. As a result, our current outlook is to be profitable on a non-GAAP
basis in fiscal 2015 and for the foreseeable future.”

Business and Product Highlights

Since January 1, 2013:

Rockstar Games:

  * Announced that it plans to launch Grand Theft Auto V worldwide on
    September 17, 2013.

2K:

  * Launched BioShock Infinite on March 26, 2013. Developed by Irrational
    Games, the title was called “a masterpiece” by NBC News and is the highest
    rated game of 2013 to date with perfect review scores from Game Informer,
    Eurogamer, USA Today, Associated Press, Entertainment Weekly and many
    more. BioShock Infinite was the top-selling console title in March,*
    enjoyed significantly higher first month sell-through than any other
    BioShock release, and has sold-in more than 3.7 million units to date. The
    title has experienced solid demand for the BioShock Infinite Season Pass,
    which offers all three upcoming downloadable add-on content packs at a
    discounted price.
  * Released Major League Baseball 2K13 on March 5, 2013, pursuant to a new
    license with Major League Baseball and related entities. The title
    features Tampa Bay Rays’ Cy Young Award winning pitcher David Price as
    cover athlete and is again being supported with the Perfect Game
    Challenge, 2K’s groundbreaking $1 million competition.
  * Released the Borderlands 2: Add-On Content Pack at retail on February 26,
    2013. The pack includes Borderlands 2’s first two add-on campaigns, as
    well as  a fifth playable character packaged together on a single disc.
  * Released two new free-to-play mobile titles designed exclusively for iOS
    by its award winning Firaxis Games studio, Haunted Hollow™ and Sid Meier’s
    Ace Patrol™.
  * Pro Baseball® 2K, our online baseball simulation game created in
    partnership with Nexon, launched commercially in Korea on May 2, 2013.
  * Entered into an exclusive multi-year agreement with WWE granting 2K the
    exclusive worldwide rights to publish the popular WWE video game franchise
    across all major platforms and distribution channels. The series, which
    will continue to be developed by Yukes in Japan, will combine the studio’s
    signature gameplay with 2K’s commitment to authenticity in WWE® 2K14,
    which is planned for release on October 29, 2013.
  * Announced that The Bureau: XCOM® Declassified™, 2K Marin’s third-person
    squad-based tactical shooter, is planned for release on August 20, 2013 in
    North America and August 23, 2013 internationally for the Xbox 360, PS3
    and PC. The Bureau will deliver a new experience within the XCOM universe,
    telling the origin story of the clandestine XCOM organization and
    mankind’s first encounter with the mysterious alien threat.
  * Announced that Sid Meier's Civilization V: Brave New World, the second
    expansion pack for the award-winning Civilization V, is currently in
    development and is planned for release on July 9, 2013 for the PC and
    Mac®.
  * Announced that XCOM: Enemy Unknown will be available for iOS-equipped
    mobile devices this summer. Developed by Firaxis Games, XCOM: Enemy
    Unknown was one of the most critically acclaimed console and PC releases
    of 2012.

* According to The NPD Group estimates of U.S. retail video game sales for
March 2013.

Financial Outlook for Fiscal 2014

Take-Two is providing its financial outlook for its fiscal first quarter
ending June 30, 2013 and fiscal year ending March 31, 2014 as follows:

                                      First Quarter          Fiscal Year
                                      Ending 6/30/2013       Ending 3/31/2014
                                                            
Non-GAAP Net Revenue                  $100 to $125 Million   $1.75 to $1.85
                                                             Billion
                                                              
Non-GAAP net income (loss) per        ($0.70) to ($0.55)     $2.05 to $2.30
diluted share
                                                              
Stock-based compensation expense      $0.09                  $0.37
per share (1)
                                                              
Non-cash amortization of discount     $0.06                  $0.17
on convertible notes per share
                                                              
Non-cash tax expense per share        $0.00                  $0.02

         The Company's stock-based compensation expense for the periods above
         includes the cost of approximately 1.9 million shares issued to
    1)   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
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 January 1, 2013:
                                                              
Label            Title                        Platforms        Release Date
2K               Herd, Herd, Herd™            Android          January 9, 2013
2K               NBA 2K13 All-Star            Xbox 360, PS3    January 9, 2013
                 presented by Sprite (DLC)
2K               BioShock: Ultimate Rapture   Xbox 360, PS3    January 15,
                 Edition                                       2013
                 Borderlands 2: Sir           Xbox 360, PS3,   January 15,
2K               Hammerlock’s Big Game Hunt   PC               2013
                 (DLC)
                 Max Payne 3: Deathmatch      Xbox 360, PS3,   January 22,
Rockstar Games   Made In Heaven Mode Pack     PC               2013
                 (DLC)
2K               Sid Meier’s Civilization     PC               February 19,
                 V: Gold Edition                               2013
2K               Borderlands 2: Add-On        Xbox 360, PS3    February 26,
                 Content Pack                                  2013
2K               Major League Baseball 2K13   Xbox 360, PS3    March 5, 2013*
2K               MLB 2K13/NBA 2K13 Combo      Xbox 360, PS3    March 5, 2013
                 Pack
2K               WWE ’13                      Xbox 360. PS3    March 15, 2013
2K               BioShock Infinite            Xbox 360, PS3,   March 26, 2013
                                              PC
                 Borderlands 2: Ultimate      Xbox 360, PS3,
2K               Vault Hunters Upgrade Pack   PC               April 2, 2013
                 (DLC)
2K               Haunted Hollow               iOS              May 2, 2013
2K               Sid Meier’s Ace Patrol       iOS              May 9, 2013
                                                                
*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               Borderlands 2: Psycho Pack   Xbox 360, PS3,   May 14, 2013
                 (DLC)                        PC
                 Borderlands 2: Tiny Tina’s   Xbox 360, PS3,
2K               Assault on Dragon Keep       PC               June 25, 2013
                 (DLC)
2K               Sid Meier's Civilization     PC, Mac          July 9, 2013
                 V: Brave New World
2K               The Bureau: XCOM             Xbox 360, PS3,   August 20,
                 Declassified                 PC               2013*
2K               XCOM: Enemy Unknown          iOS              Summer 2013
Rockstar Games   Grand Theft Auto V           Xbox 360, PS3    September 17,
                                                               2013
2K               NBA 2K14                     TBA              October 1, 2013
2K               WWE 2K14                     Xbox 360, PS3    October 29,
                                                               2013
 
*North American release date; international release date typically follows
three days after.

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 provide 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. 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 and next-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
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
                                                                 
                   Three months ended March 31,   Twelve months ended March
                                                  31,
                   2013             2012          2013            2012
                                                                   
                                                                   
Net revenue        $  299,487       $ 148,084     $ 1,214,483     $ 825,823   
                                                                   
Cost of goods
sold:
Software
development           57,576          35,401        317,756         164,487
costs and
royalties
Product costs         71,479          47,845        316,072         255,236
Licenses              9,802           32,062        57,285          74,976
Internal              15,463          1,158         24,724          34,156    
royalties
Total cost of         154,320         116,466       715,837         528,855   
goods sold
                                                                   
Gross profit          145,167         31,618        498,646         296,968
                                                                   
Selling and           51,747          40,065        257,329         183,749
marketing
General and           40,369          35,133        147,260         121,200
administrative
Research and          21,183          14,822        78,184          64,162
development
Depreciation and      2,806           2,740         10,634          12,123    
amortization
Total operating       116,105         92,760        493,407         381,234   
expenses
Income (loss)         29,062          (61,142 )     5,239           (84,266  )
from operations
Interest and          (7,789   )      (5,368  )     (31,351   )     (19,571  )
other, net
Income (loss)
from continuing
operations            21,273          (66,510 )     (26,112   )     (103,837 )
before income
taxes
Provision
(benefit) for         103             (505    )     5,050           3,863     
income taxes
Income (loss)
from continuing       21,170          (66,005 )     (31,162   )     (107,700 )
operations
Income (loss)
from
discontinued          1,303           (831    )     1,671           (1,116   )
operations, net
of taxes
Net income         $  22,473        $ (66,836 )   $ (29,491   )   $ (108,816 )
(loss)
                                                                   
Earnings (loss)
per share:
Continuing         $  0.23          $ (0.78   )   $ (0.36     )   $ (1.30    )
operations
Discontinued          0.01            (0.01   )     0.02            (0.01    )
operations
Basic earnings     $  0.24          $ (0.79   )   $ (0.34     )   $ (1.31    )
(loss) per share
                                                                   
Continuing         $  0.23          $ (0.78   )   $ (0.36     )   $ (1.30    )
operations
Discontinued          0.01            (0.01   )     0.02            (0.01    )
operations
Diluted earnings   $  0.24          $ (0.79   )   $ (0.34     )   $ (1.31    )
(loss) per share
                                                                   
Weighted average
shares                                                             
outstanding:
^(1)
Basic                 93,698          84,415        85,581          83,356
Diluted               93,698          84,415        85,581          83,356    
 
 
^(1) Basic and diluted include participating shares of 7,521 for the three
months ended March 31, 2013.
 

                                                                 
                         Three months ended March     Twelve months ended
                         31,                          March 31,
OTHER INFORMATION        2013             2012        2013            2012
                                                                       
Geographic revenue mix
United States            60%              64%         59%             54%
International            40%              36%         41%             46%
                                                                       
Platform revenue mix
Console                  80%              83%         80%             85%
PC and other             19%              12%         18%             11%
Handheld                 1%               5%          2%              4%
                                                                       

 
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
                                                                
                                                 March 31,       March 31,
                                                 2013            2012
                                                                  
ASSETS
Current assets:
Cash and cash equivalents                        $ 402,502       $ 420,279
Accounts receivable, net of allowances of
$64,081 and $51,002 at March 31, 2013 and          189,596         45,035
2012, respectively
Inventory                                          30,218          22,477
Software development costs and licenses            198,955         211,224
Prepaid expenses and other                         44,881          44,602     
Total current assets                               866,152         743,617    
                                                                  
Fixed assets, net                                  25,362          18,949
Software development costs and licenses, net       95,241          104,755
of current portion
Goodwill                                           225,992         228,169
Other intangibles, net                             8,827           16,266
Other assets                                       56,265          37,671     
Total assets                                     $ 1,277,839     $ 1,149,427  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $ 79,932        $ 46,681
Accrued expenses and other current liabilities     228,916         156,768
Deferred revenue                                   26,919          13,864
Liabilities of discontinued operations             1,232           1,412      
Total current liabilities                          336,999         218,725    
                                                                  
Long-term debt                                     335,202         316,340
Other long-term liabilities                        17,087          16,316
Liabilities of discontinued operations, net of     556             2,319      
current portion
Total liabilities                                  689,844         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 March 31, 2013
and 2012, respectively; 93,743 and 90,215          937             902
shares issued and outstanding at March 31,
2013 and 2012, respectively
Additional paid-in capital                         832,460         799,431
Accumulated deficit                                (240,830  )     (211,339  )
Accumulated other comprehensive (loss) income      (4,572    )     6,733      
Total stockholders' equity                         587,995         595,727    
Total liabilities and stockholders' equity       $ 1,277,839     $ 1,149,427  
                                                                  

                                                
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                 Twelve months ended March 31,
                                                 2013             2012
                                                                   
Operating activities:
Net loss                                         $  (29,491   )   $ (108,816 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and impairment of software             230,748         150,700
development costs and licenses
Depreciation and amortization                       10,634          12,123
(Income) loss from discontinued operations          (1,671    )     1,116
Amortization and impairment of intellectual         7,000           983
property
Stock-based compensation                            35,765          33,494
Gain on sale of intellectual property               -               (2,200   )
Deferred income taxes                               (841      )     1,878
Amortization of discount on Convertible Notes       18,862          11,728
Amortization of debt issuance costs                 2,021           1,527
Other, net                                          778             1,231
Changes in assets and liabilities, net of
effect from purchases of businesses:
Accounts receivable                                 (144,561  )     39,182
Inventory                                           (7,741    )     2,101
Software development costs and licenses             (216,893  )     (191,223 )
Prepaid expenses, other current and other           (5,694    )     2,537
non-current assets
Deferred revenue                                    13,055          430
Accounts payable, accrued expenses and other        83,734          (39,748  )
liabilities
Net cash used in discontinued operations            (272      )     (2,007   )
Net cash used in operating activities               (4,567    )     (84,964  )
                                                                   
Investing activities:
Purchase of fixed assets                            (16,820   )     (10,786  )
Net cash used in discontinued operations            -               (1,475   )
Cash received from sale of intellectual             -               2,200
property
Payments in connection with business                -               (4,101   )
combinations, net of cash acquired
Net cash used in investing activities               (16,820   )     (14,162  )
                                                                   
Financing activities:
Proceeds from exercise of employee stock            -               239
options
Proceeds from issuance of Convertible Notes         -               250,000
Payment of debt issuance costs                      -               (6,875   )
Net cash provided by financing activities           -               243,364   
                                                                   
Effects of foreign exchange rates on cash and       3,610           (4,318   )
cash equivalents
                                                                   
Net (decrease) increase in cash and cash            (17,777   )     139,920
equivalents
Cash and cash equivalents, beginning of period      420,279         280,359   
Cash and cash equivalents, end of period         $  402,502       $ 420,279   
                                                                   

 
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
RECONCILIATION OF GAAP TO Non-GAAP MEASURES (Unaudited)
(in thousands, except per share amounts)
 
 
                   Three months ended March 31,   Twelve months ended March
                                                  31,
                   2013             2012          2013            2012
Net Revenues
GAAP Net           $  299,487       $ 148,084     $ 1,214,483     $ 825,823
Revenues
Net effect from
deferral in net       3,641           -             7,824           -         
revenues
Non-GAAP Net       $  303,128       $ 148,084     $ 1,222,307     $ 825,823   
Revenues
                                                                   
Gross Profit
GAAP Gross         $  145,167       $ 31,618      $ 498,646       $ 296,968
Profit
Net effect from
deferral in net       3,109           -             6,720           -
revenues
Stock-based           2,026           765           10,060          5,144     
compensation
Non-GAAP Gross     $  150,302       $ 32,383      $ 515,426       $ 302,112   
Profit
                                                                   
Income (Loss)
from Operations
GAAP Income
(Loss) from        $  29,062        $ (61,142 )   $ 5,239         $ (84,266  )
Operations
Net effect from
deferral in net       3,109           -             6,720           -
revenues
Stock-based           12,987          10,031        35,765          33,494
compensation
Business
reorganization        116             -             874             1,015
and related
Professional
fees and legal        -               -             -               196       
matters
Non-GAAP Income    $  45,274        $ (51,111 )   $ 48,598        $ (49,561  )
from Operations
                                                                   
Net Income
(Loss)
GAAP Net Income    $  22,473        $ (66,836 )   $ (29,491   )   $ (108,816 )
(Loss)
Net effect from
deferral in net       3,109           -             6,720           -
revenues
Stock-based           12,987          10,031        35,765          33,494
compensation
Business
reorganization        116             -             874             1,015
and related
Professional
fees and legal        -               -             -               196
matters
Non-cash
amortization of
discount on           4,891           4,434         18,862          11,728
Convertible
Notes
Non-cash tax          582             603           2,020           1,889
expense
Discontinued          (1,303   )      831           (1,671    )     1,116     
operations
Non-GAAP Net       $  42,855        $ (50,937 )   $ 33,079        $ (59,378  )
Income (Loss)
                                                                   
Diluted Earnings
(Loss) Per Share
GAAP earnings      $  0.24          $ (0.79   )   $ (0.34     )   $ (1.31    )
(loss) per share
Non-GAAP
earnings (loss)    $  0.38          $ (0.60   )   $ 0.36          $ (0.71    )
per share ^(1)
                                                                   
Number of
diluted shares
used in
computation
GAAP                  93,698          84,415        85,581          83,356
Non-GAAP ^(2)         119,719         84,415        92,292          83,356

      
       For the three months ended March 31, 2013, 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
^(1)   (the "1.75% Convertible Notes" and together with the 4.375% Convertible
       Notes, the "Convertible Notes") for which diluted net income has been
       adjusted by $3,058 related to interest and debt issuance costs, net of
       tax. The shares used for computing the three months ended March 31,
       2013 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 other periods presented
       as the assumed conversion would have been anti-dilutive.
        
       For the three and twelve months ended March 31, 2013, the diluted
^(2)   shares used in the computation of Non-GAAP EPS include participating
       shares of 7,521 and 6,711, 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
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