Take-Two Interactive Software, Inc. Reports Record Results for Fiscal Year 2014

  Take-Two Interactive Software, Inc. Reports Record Results for Fiscal Year
  2014

               Non-GAAP Net Revenue Grew 97% to $2.414 Billion

           Non-GAAP Net Income Increased to $4.26 Per Diluted Share

        Company Provides Strong Financial Outlook for Fiscal Year 2015

Business Wire

NEW YORK -- May 13, 2014

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong
financial results for its fourth quarter and record results for its fiscal
year 2014, ended March 31, 2014. In addition, the Company provided its initial
financial outlook for its first quarter and fiscal year 2015.

Fiscal Fourth Quarter 2014

GAAP Financial Results

For fiscal fourth quarter 2014, GAAP net revenue was $195.2 million, as
compared to $299.5 million for fiscal fourth quarter 2013, which had benefited
from the release of BioShock® Infinite. GAAP net loss from continuing
operations was $30.8 million, or $0.40 per diluted share, as compared to net
income from continuing operations of $21.2 million, or $0.23 per diluted
share, for the year-ago period. As of March 31, 2014, the Company had cash and
cash equivalents of $935.4 million.

Non-GAAP Financial Results

For fiscal fourth quarter 2014, Non-GAAP net revenue was $233.2 million, as
compared to $303.1 million for fiscal fourth quarter 2013. Non-GAAP net income
was $21.5 million, or $0.21 per diluted share, as compared to $42.9 million,
or $0.38 per diluted share, for the year-ago period.

The largest contributors to net revenue in fiscal fourth quarter 2014 were
NBA® 2K14, Grand Theft Auto V®, Grand Theft Auto Online, Borderlands® 2 and
BioShock Infinite. Non-GAAP net revenue from digitally-delivered content grew
51% year-over-year to $122.3 million, led by the Grand Theft Auto series, the
NBA 2K franchise and offerings for Borderlands 2. Catalog sales accounted for
$75.7 million of Non-GAAP net revenue led by offerings for Borderlands 2,
BioShock Infinite, the Grand Theft Auto series and Sid Meier’s Civilization®
V.

Fiscal Year 2014

GAAP Financial Results

For fiscal year 2014, GAAP net revenue grew 94% to a record $2.351 billion, as
compared to $1.214 billion for fiscal year 2013. GAAP net income from
continuing operations increased to a record $361.7 million, or $3.20 per
diluted share, as compared to a net loss from continuing operations of $31.2
million, or $0.36 per diluted share, for the prior fiscal year.

Non-GAAP Financial Results

For fiscal year 2014, Non-GAAP net revenue grew 97% to a record $2.414
billion, as compared to $1.222 billion for fiscal year 2013. Non-GAAP net
income increased to a record $510.7 million, or $4.26 per diluted share, as
compared to $33.1 million, or $0.36 per diluted share, for the prior fiscal
year.

The largest contributors to net revenue in fiscal year 2014 were Grand Theft
Auto V, NBA 2K14, Borderlands 2, WWE® 2K14, Grand Theft Auto IV, Grand Theft
Auto Online, BioShock Infinite and offerings for Sid Meier’s Civilization V.
Non-GAAP net revenue from digitally-delivered content grew 65% year-over-year
to a record $435.1 million, led by offerings for the Grand Theft Auto series,
Borderlands 2, the NBA 2K franchise, Sid Meier’s Civilization V and BioShock
Infinite.

Management Comments

“During fiscal 2014, Take-Two set new records for both our Company and the
entertainment industry,” said Strauss Zelnick, Chairman and CEO of Take-Two.
“Rockstar Games’ Grand Theft Auto V reached $1 billion in sales faster than
any entertainment release in history, NBA 2K14 enjoyed the franchise’s
strongest launch, Borderlands 2 became 2K’s top-selling title, and our
digitally-delivered revenue grew to its highest level ever. As a result, we
delivered record revenue, earnings and cash flow for our shareholders.

“Over the past several years, Take-Two has been transformed into a financially
strong, global interactive entertainment company with numerous successful
franchises across a variety of genres. We also have complemented the Company’s
core business with growing profits from recurrent consumer spending, including
add-on content, virtual currency and online gaming. The evolution of Take-Two
is reflected in our strong profit outlook for fiscal 2015 and expectation for
continued Non-GAAP profitability every year for the foreseeable future.”

Business and Product Highlights

Since January 1, 2014:

  *Take-Two was the top console and handheld video game publisher of 2013 in
    North America and Latin America.*

Rockstar Games:

  *Grand Theft Auto V was the best-selling console video game of 2013 in
    North America, Latin America and Europe combined.** To date, Grand Theft
    Auto V has sold-in more than 33 million units.
  *Released several updates for Grand Theft Auto Online, including The
    Business Update, which provided a suite of new vehicles, weapons and
    character customizations; The High Life Update, featuring high-end
    properties, more new vehicles and an array of new Jobs; and The
    Valentine’s Day Massacre Special, which offered limited-edition 1920’s
    gangster-themed content.
  *Released Grand Theft Auto: San Andreas for select Android, Kindle and
    Windows Phone devices.

2K:

  *Released XCOM®: Enemy Unknown – The Complete Edition for PC and Mac, which
    includes the original 2012 Game of the Year award-winning title plus the
    critically acclaimed expansion, XCOM: Enemy Within, along with all of the
    released add-on content in one package.
  *Released Sid Meier’s Civilization V: The Complete Edition for PC, which
    includes the original 2010 Game of the Year award-winning strategy title
    plus the two critically-acclaimed expansion packs, Gods & Kings and Brave
    New World, and all of the released add-on content in one package.
  *Announced that Oklahoma City Thunder superstar, four-time NBA scoring
    champion, and recently crowned 2014 NBA Most Valuable Player, Kevin
    Durant, will make his solo cover debut on NBA 2K15, the next installment
    of the top-selling and top-rated NBA video game simulation franchise.***
    NBA 2K15 is planned for launch on October 7, 2014 in North America and
    October 10, 2014 internationally on the PS3, PS4, Xbox 360, Xbox One and
    PC.
  *Announced that Sid Meier’s Civilization: Beyond Earth™, a new science
    fiction-themed entry in the award-winning Civilization franchise, is
    currently in development by Firaxis Games and is planned for release this
    fall for PC, Mac and Linux.
  *Announced that Borderlands: The Pre-Sequel™, an all-new standalone
    Borderlands game set in between the award-winning Borderlands and
    Borderlands 2, is currently in co-development by Gearbox Software and 2K
    Australia and is planned for launch this fall on the Xbox 360, PS3 and PC.
  *Announced that Evolve™ is planned for launch on the Xbox One, PS4 and PC
    in fall 2014. Developed by Turtle Rock Studios, the renowned creators of
    Left 4 Dead, Evolve is an all-new shooter that blends cooperative and
    competitive multiplayer experiences.

* Based on dollar-value of retail sales, according to data from The NPD
Group’s Retail Tracking Service and International Development Group.

** According to data from The NPD Group’s Retail Tracking Service,
International Development Group, and GfK Chart-Track.

*** According to 2008 - 2014Metacritic.com and TheNPD Group estimates of
U.S. retail video game sales through March 2014.

Financial Outlook for Fiscal 2015

Take-Two is providing its initial financial outlook for its fiscal first
quarter ending June 30, 2014 and fiscal year ending March 31, 2015 as follows:

                                       First Quarter      Fiscal Year
                                         Ending 6/30/2014   Ending 3/31/2015
                                                              
Non-GAAP Net Revenue                     $120 to $135         $1.35 to $1.45
                                         Million              Billion
                                                              
Non-GAAP net income (loss) per           ($0.35) to           $0.80 to $1.05
diluted share                            ($0.25)
                                                              
Net effect from deferral in net
revenues and related cost of goods       $0.10                $0.00
sold
                                                              
Stock-based compensation expense per     $0.09                $0.29
share ^(1)
                                                              
Business reorganization,                 $0.01                $0.01
restructuring and related expenses
                                                              
Non-cash amortization of discount on     $0.05                $0.13
convertible notes per share
                                                              
Non-cash tax expense per share           $0.01                $0.02
                                                             

     The Company's stock-based compensation expense for the periods above
     includes the cost of approximately 1.8 million restricted shares
1)  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.
     

Key assumptions and dependencies underlying the Company’s financial outlook
include: the timely delivery of the titles included in this financial outlook,
which includes both announced and unannounced releases; continued consumer
acceptance of the Xbox One and PS4; the ability to develop and publish
products that capture market share for these next-generation systems while
continuing to leverage opportunities on the Xbox 360, PS3 and PC; and stable
foreign exchange rates. See also “Cautionary Note Regarding Forward Looking
Statements” below.

Product Releases
                                                          
The following titles were released since January 1, 2014:
                                                                  
Label         Title                       Platforms        Release Date
2K               WWE 2K14: WWE Legends and     Xbox 360, PS3      January 7,
                 Creations Pack (DLC)                             2014
Rockstar         Grand Theft Auto: San         Android,           January 7,
Games            Andreas                       Kindle             2014
Rockstar         Grand Theft Auto: San         Windows Phone      January 27,
Games            Andreas                                          2014
2K               Sid Meier’s Civilization      PC                 February 4,
                 V: The Complete Edition                          2014
2K               Borderlands 2 &               Xbox 360, PS3      February 11,
                 Dishonored™ Bundle                               2014
                 The Elder Scrolls® V:                            February 11,
2K               Skyrim & BioShock             Xbox 360, PS3      2014
                 Infinite Bundle
                 Borderlands 2 Headhunter      Xbox 360, PS3,     February 11,
2K               4: Mad Moxxi Wedding Day      Windows PC,        2014
                 Massacre (DLC)                Mac
2K               XCOM: Enemy Unknown: The      PC, Mac            March 4,
                 Complete Edition                                 2014*
2K               BioShock Infinite: Burial     Xbox 360, PS3,     March 25,
                 at Sea – Episode 2 (DLC)      PC                 2014
                 Borderlands 2 Headhunter      Xbox 360, PS3,
2K               5: Sir Hamerlock Versus       Windows PC,        April 15,
                 the Son of Crawmermax         Mac                2014
                 (DLC)
2K               XCOM: Enemy Unknown           Android            April 24,
                                               Devices            2014
                                                                  
*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             Release Date
2K           NBA 2K15                     Xbox 360, Xbox One,     October 7,
                                          PS3, PS4, PC            2014*
2K           Borderlands: The             Xbox 360, PS3,          Fall 2014
             Pre-Sequel                   Windows PC
             Sid Meier’s                  Windows PC, Mac,
2K           Civilization: Beyond         Linux                   Fall 2014
             Earth
2K           Evolve                       Xbox One, PS4, PC       Fall 2014
2K           WWE 2K15                     TBA                     Fiscal 2015
                                                                  
*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 and related cost of goods sold -
    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.

  *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.
  *Loss on extinguishment of debt – the Company recorded a loss on
    extinguishment of debt as a result of settling its 4.375% Convertible
    Notes in August 2013. The Company excludes the impact of such transactions
    when evaluating the Company’s operating performance. Management does not
    believe this loss reflects the Company's primary business, ongoing
    operating results or future outlook. As such, the Company believes it is
    appropriate to exclude this loss from its Non-GAAP financial measures.
  *Gain on convertible note hedge and warrants, net – the Company entered
    into unwind agreements with respect to its convertible note hedge and
    warrant transactions. As a result of the unwind agreements, these
    transactions were accounted for as derivatives whereby gains and losses
    resulting from changes in the fair value were reported in gain on
    convertible note hedge and warrants, net. The Company excludes the impact
    of such transactions when evaluating the Company’s operating performance.
    Management does not believe these gains and losses reflect the Company's
    primary business, ongoing operating results or future outlook. As such,
    the Company believes it is appropriate to exclude these gains and losses
    from its Non-GAAP financial measures.
  *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.
  *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.

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, 2013, in the section
entitled "Risk Factors," the Company’s Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 2013, 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        Twelve months ended March 31,
                   31,
                    2014          2013          2014            2013      
                                                                     
                                                                     
Net revenue        $ 195,208      $ 299,487      $ 2,350,568      $ 1,214,483 
                                                                     
Cost of goods
sold:
Internal             28,233          15,463          538,604           24,724
royalties
Product costs        39,022          71,479          477,861           316,072
Software
development          28,299          57,576          333,450           317,756
costs and
royalties
Licenses            12,734        9,802         64,412          57,285    
Total cost of       108,288       154,320       1,414,327       715,837   
goods sold
                                                                     
Gross profit         86,920          145,167         936,241           498,646
                                                                     
Selling and          27,577          51,747          240,996           257,329
marketing
General and          50,773          40,369          161,374           147,260
administrative
Research and         28,632          21,183          105,256           78,184
development
Depreciation
and                 3,522         2,806         13,359          10,634    
amortization
Total
operating           110,504       116,105       520,985         493,407   
expenses
(Loss) income
from                 (23,584 )       29,062          415,256           5,239
operations
Interest and         (7,535  )       (7,789  )       (33,553   )       (31,351   )
other, net
Loss on
extinguishment       -               -               (9,014    )       -
of debt
Gain on
convertible        -             -             3,461           -         
note hedge and
warrants, net
(Loss) income
from
continuing           (31,119 )       21,273          376,150           (26,112   )
operations
before income
taxes
(Benefit)
provision for       (345    )      103           14,459          5,050     
income taxes
(Loss) income
from                 (30,774 )       21,170          361,691           (31,162   )
continuing
operations
(Loss) income
from
discontinued        (13     )      1,303         (86       )      1,671     
operations,
net of taxes
Net (loss)         $ (30,787 )     $ 22,473       $ 361,605        $ (29,491   )
income
                                                                     
Earnings
(loss) per
share:
Continuing         $ (0.40   )     $ 0.23          $ 3.79            $ (0.36     )
operations
Discontinued        -             0.01          -               0.02      
operations
Basic earnings
(loss) per         $ (0.40   )     $ 0.24         $ 3.79           $ (0.34     )
share
                                                                     
Continuing         $ (0.40   )     $ 0.23          $ 3.20            $ (0.36     )
operations
Discontinued        -             0.01          -               0.02      
operations
Diluted
earnings           $ (0.40   )     $ 0.24         $ 3.20           $ (0.34     )
(loss) per
share
                                                                     
Weighted
average shares                                                    
outstanding:
Basic                77,000          93,698          95,347            85,581
Diluted             77,000        93,698        124,710         85,581    
                                                                     
Computation of
Basic EPS:
Net (loss)         $ (30,787 )     $ 22,473       $ 361,605        $ (29,491   )
income
Less: net
income
allocated to        -             (1,804  )      (41,065   )      -         
participating
securities
Net (loss)
income for         $ (30,787 )     $ 20,669       $ 320,540        $ (29,491   )
basic EPS
calculation
                                                                     
Total weighted
average shares       77,000          93,698          95,347            85,581
outstanding -
basic
Less: weighted
average
participating       -             (7,521  )      (10,828   )      -         
shares
outstanding
Weighted
average common
shares              77,000        86,177        84,519          85,581    
outstanding -
basic
                                                                  
Basic EPS          $ (0.40   )     $ 0.24         $ 3.79           $ (0.34     )
                                                                     
Computation of
Diluted EPS:
Net (loss)         $ (30,787 )     $ 22,473        $ 361,605         $ (29,491   )
income
Less: net
income
allocated to         -               (1,804  )       (31,397   )       -
participating
securities
Add: interest
expense, net
of tax, on          -             -             33,718          -         
Convertible
Notes
Net (loss)
income for         $ (30,787 )     $ 20,669       $ 363,926        $ (29,491   )
diluted EPS
calculation
                                                                     
Weighted
average shares       77,000          86,177          84,519            85,581
outstanding -
basic
Add: dilutive
effect of           -             -             29,363          -         
common stock
equivalents
Weighted
average common
shares              77,000        86,177        113,882         85,581    
outstanding -
diluted
                                                                  
Diluted EPS        $ (0.40   )     $ 0.24         $ 3.20           $ (0.34     )
                                                                     
                                                                     
                                                                     
                   Three months ended March        Twelve months ended March 31,
                   31,
OTHER               2014          2013          2014            2013      
INFORMATION
                                                                     
Geographic
revenue mix
United States        57      %       60      %       47        %       59        %
International        43      %       40      %       53        %       41        %
                                                                     
Platform
revenue mix
Console              79      %       80      %       92        %       80        %
PC and other         21      %       19      %       8         %       18        %
Handheld             0       %       1       %       0         %       2         %
                                                                     
Net revenue by
distribution
channel:
Physical
retail and           57      %       74      %       84        %       79        %
other
Digital online       43      %       26      %       16        %       21        %
                                                                                 

                                            
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
                                                              
                                               March 31,         March 31,
                                                2014            2013      
                                                                 
ASSETS
Current assets:
Cash and cash equivalents                      $ 935,400         $ 402,502
Restricted cash                                  193,839           7,489
Accounts receivable, net of allowances of
$75,518 and $64,081 at March 31, 2014 and        53,143            189,596
2013, respectively
Inventory                                        29,780            30,218
Software development costs and licenses          116,203           198,955
Prepaid expenses and other                      71,075          37,392    
Total current assets                            1,399,440       866,152   
                                                                 
Fixed assets, net                                42,572            25,362
Software development costs and licenses,         109,506           95,241
net of current portion
Goodwill                                         226,705           225,992
Other intangibles, net                           5,113             8,827
Other assets                                    16,294          56,265    
Total assets                                   $ 1,799,630      $ 1,277,839 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                               $ 16,452          $ 79,932
Accrued expenses and other current               396,617           228,916
liabilities
Deferred revenue                                 61,195            26,919
Liabilities of discontinued operations          556             1,232     
Total current liabilities                       474,820         336,999   
                                                                 
Long-term debt                                   454,031           335,202
Other long-term liabilities                      68,973            17,087
Liabilities of discontinued operations,         -               556       
net of current portion
Total liabilities                               997,824         689,844   
Commitments and contingencies
                                                                 
Stockholders' equity:
Preferred stock, $.01 par value, 5,000           -                 -
shares authorized
Common stock, $.01 par value, 200,000
shares authorized; 105,156 and 93,743
shares
issued and 88,918 and 93,743 outstanding
at March 31, 2014 and March 31, 2013,            1,052             937
respectively
Additional paid-in capital                       954,699           832,460
Treasury stock, at cost (16,238 common           (276,836  )       -
shares at March 31, 2014)
Retained earnings (accumulated deficit)          120,775           (240,830  )
Accumulated other comprehensive income          2,116           (4,572    )
(loss)
Total stockholders' equity                      801,806         587,995   
Total liabilities and stockholders' equity     $ 1,799,630      $ 1,277,839 
                                                                             

                                              
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                 
                                                 Twelve months ended March 31,
                                                  2014         2013     
                                                                  
Operating activities:
Net income (loss)                                $ 361,605        $ (29,491  )
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Amortization and impairment of software            265,533          230,748
development costs and licenses
Depreciation and amortization                      13,359           10,634
Loss (income) from discontinued operations         86               (1,671   )
Amortization and impairment of intellectual        3,558            7,000
property
Stock-based compensation                           78,118           35,765
Deferred income taxes                              (19,036  )       (841     )
Amortization of discount on Convertible            22,801           18,862
Notes
Amortization of debt issuance costs                1,947            2,021
Loss on extinguishment of debt                     9,014            -
Gain on convertible note hedge and warrants,       (3,461   )       -
net
Other, net                                         (208     )       778
Changes in assets and liabilities, net of
effect from purchases of businesses:
Restricted cash                                    (186,350 )       8,975
Accounts receivable                                136,453          (144,561 )
Inventory                                          438              (7,741   )
Software development costs and licenses            (192,357 )       (216,893 )
Prepaid expenses, other current and other          (18,424  )       (14,669  )
non-current assets
Deferred revenue                                   34,276           13,055
Accounts payable, accrued expenses and other       194,228          83,734
liabilities
Net cash used in discontinued operations          (1,318   )      (272     )
Net cash provided by (used in) operating          700,262        (4,567   )
activities
                                                                  
Investing activities:
Purchase of fixed assets                           (29,813  )       (16,820  )
Payments in connection with business              (1,000   )      -        
combinations, net of cash acquired
Net cash used in investing activities             (30,813  )      (16,820  )
                                                                  
Financing activities:
Repurchase of common stock                         (276,836 )       -
Proceeds from issuance of 1.00% Convertible        283,188          -
Notes
Payment for extinguishment of 4.375%               (165,999 )       -
Convertible Notes
Proceeds from termination of convertible           84,429           -
note hedge transactions
Payment for termination of convertible note        (55,651  )       -
warrant transactions
Payment of debt issuance costs                    (2,815   )      -        
Net cash used in financing activities             (133,684 )      -        
                                                                  
Effects of foreign exchange rates on cash         (2,867   )      3,610    
and cash equivalents
                                                                  
Net increase (decrease) in cash and cash           532,898          (17,777  )
equivalents
Cash and cash equivalents, beginning of           402,502        420,279  
period
Cash and cash equivalents, end of period         $ 935,400       $ 402,502  
                                                                             

                                                               
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        Twelve months ended March 31,
                    31,
                     2014          2013          2014            2013      
Net Revenues
GAAP Net            $ 195,208       $ 299,487       $ 2,350,568       $ 1,214,483
Revenues
Net effect from
deferral in net      37,947        3,641         63,152          7,824     
revenues
Non-GAAP Net        $ 233,155      $ 303,128      $ 2,413,720      $ 1,222,307 
Revenues
                                                                      
Digital Online
Revenues
(included in
Net Revenues
above)
GAAP Digital        $ 84,391        $ 77,138        $ 371,970         $ 256,128
Online Revenues
Net effect from
deferral in          37,947        3,641         63,152          7,824     
digital online
revenues
Non-GAAP
Digital Online      $ 122,338      $ 80,779       $ 435,122        $ 263,952   
Revenues
                                                                      
Gross Profit
GAAP Gross          $ 86,920        $ 145,167       $ 936,241         $ 498,646
Profit
Net effect from
deferral in net
revenues and          23,442          3,109           36,179            6,720
related cost of
goods sold
Stock-based          948           2,026         30,124          10,060    
compensation
Non-GAAP Gross      $ 111,310      $ 150,302      $ 1,002,544      $ 515,426   
Profit
                                                                      
Income from
Operations
GAAP (Loss)
Income from         $ (23,584 )     $ 29,062        $ 415,256         $ 5,239
Operations
Net effect from
deferral in net
revenues and          23,442          3,109           36,179            6,720
related cost of
goods sold
Stock-based           20,524          12,987          78,118            35,765
compensation
Business
reorganization,      2,560         116           4,490           874       
restructuring
and related
Non-GAAP Income     $ 22,942       $ 45,274       $ 534,043        $ 48,598    
from Operations
                                                                      
Net Income
(Loss)
GAAP Net (Loss)     $ (30,787 )     $ 22,473        $ 361,605         $ (29,491   )
Income
Net effect from
deferral in net
revenues and          23,442          3,109           36,179            6,720
related cost of
goods sold
Stock-based           20,524          12,987          78,118            35,765
compensation
Business
reorganization,       2,560           116             4,490             874
restructuring
and related
Non-cash
amortization of
discount on           5,294           4,891           22,801            18,862
Convertible
Notes
Loss on
extinguishment        -               -               9,014             -
of debt
Gain on
convertible           -               -               (3,461    )       -
note hedge and
warrants, net
Non-cash tax          447             582             1,890             2,020
expense
Discontinued         13            (1,303  )      86              (1,671    )
operations
Non-GAAP Net        $ 21,493       $ 42,855       $ 510,722        $ 33,079    
Income
                                                                      
Diluted
Earnings (Loss)
Per Share
GAAP earnings
(loss) per          $ (0.40   )     $ 0.24          $ 3.20            $ (0.34     )
share
Non-GAAP
earnings per        $ 0.21          $ 0.38          $ 4.26            $ 0.36
share
                                                                      
Number of
diluted shares
used in
computation
GAAP                  77,000          93,698          124,710           85,581
Non-GAAP              115,627         119,719         122,608           92,292
                                                                      
                                                                      
Computation of
Diluted GAAP
EPS:
Net (loss)          $ (30,787 )     $ 22,473        $ 361,605         $ (29,491   )
income
Less: net
income
allocated to          -               (1,804  )       (31,397   )       -
participating
securities
Add: interest
expense, net of
tax, on              -             -             33,718          -         
Convertible
Notes
Net (loss)
income for          $ (30,787 )     $ 20,669       $ 363,926        $ (29,491   )
diluted EPS
calculation
                                                                      
Total weighted
average shares        77,000          93,698          95,347            85,581
outstanding -
basic
Add: dilutive
effect of            -             -             29,363          -         
common stock
equivalents
Total weighted
average shares        77,000          93,698          124,710           85,581
outstanding -
diluted
Less: weighted
average
participating        -             (7,521  )      (10,828   )      -         
shares
outstanding
Weighted
average common
shares                77,000          86,177          113,882           85,581
outstanding -
diluted
                                                                   
Diluted EPS         $ (0.40   )     $ 0.24         $ 3.20           $ (0.34     )
                                                                      
                                                                      
Computation of
Diluted
Non-GAAP EPS:
Net income          $ 21,493        $ 42,855        $ 510,722         $ 33,079
Less: net
income
allocated to          (2,224  )       (3,440  )       (45,104   )       (2,405    )
participating
securities
Add: interest
expense, net of
tax, on              2,204         3,058         10,917          -         
Convertible
Notes
Net income for
diluted EPS         $ 21,473       $ 42,473       $ 476,535        $ 30,674    
calculation
                                                                      
Total weighted
average shares        88,964          93,698          96,043            92,292
outstanding -
basic
Add: dilutive
effect of            26,663        26,021        26,565          -         
common stock
equivalents
Total weighted
average shares        115,627         119,719         122,608           92,292
outstanding -
diluted
Less: weighted
average
participating        (11,964 )      (7,521  )      (10,828   )      (6,711    )
shares
outstanding
Weighted
average common
shares                103,663         112,198         111,780           85,581
outstanding -
diluted
                                                                   
Diluted EPS         $ 0.21         $ 0.38         $ 4.26           $ 0.36      

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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