Take-Two Interactive Software (TTWO) 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

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

Take-Two Interactive Software, Inc. Reports Strong Results for Fiscal Year 2017

GAAP Net revenue grew 26% to $1.780 billion

GAAP Net income increased to $0.72 per diluted share

Net cash provided by operating activities grew 27% to $331.4 million

Bookings grew 19% to $1.796 billion

New York, NY — May 23, 2017 — Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong results for its fourth quarter and fiscal year 2017, ended March 31, 2017, and provided its initial financial outlook for its first quarter and fiscal year 2018.

Fiscal Fourth Quarter 2017 GAAP Financial Highlights

Net revenue grew 52% to $571.6 million, as compared to $377.2 million in last year’s fiscal fourth quarter.  The largest contributors to net revenue in fiscal fourth quarter 2017 were Mafia III, Grand Theft Auto V® and Grand Theft Auto Online, NBA® 2K17, WWE® 2K17, and Sid Meier’s Civilization® VI.

Digitally-delivered net revenue grew 43% to $278.7 million, as compared to $194.8 million in last year’s fiscal fourth quarter.  Recurrent consumer spending (virtual currency, downloadable add-on content and microtransactions) accounted for 50% of digitally-delivered net revenue, or 24% of total net revenue.  The largest contributors to digitally-delivered net revenue in fiscal fourth quarter 2017 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17, Mafia III, Sid Meier’s Civilization VI and XCOM® 2.

Net income increased to $99.3 million, or $0.89 per diluted share, as compared to $46.4 million, or $0.48 per diluted share, for the year-ago period.

The following data, together with a management reporting tax rate of 22%, are used internally by the Company’s management and Board of Directors to adjust the Company’s GAAP financial results in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:

	Three Months Ended March 31, 2017
				Financial Data
	Statement of Operations			Change in deferred net revenue and related cost of goods sold		Stock-based compensation		Non-cash amortization of discount on Convertible Notes	Acquisition- related expenses		Amortization of intangible assets
Net revenue	$	571,556		(164,429	)
Cost of goods sold	314,900			(118,285	)	(5,083	)				(2,630	)
Gross profit	256,656			(46,144	)	5,083					2,630
Total operating expenses	145,153					(21,375	)		(1,598	)	(2,564	)
Income from operations	111,503			(46,144	)	26,458			1,598		5,194
Interest and other, net	(392		)					3,351
Income before income taxes	111,111			(46,144	)	26,458		3,351	1,598		5,194
Earnings per share
Diluted	0.89

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 117.2 million and adds back to net income interest expense, net of tax, on the convertible notes of $0.5 million.

Fiscal Fourth Quarter Operational Metric - Bookings

Total Bookings grew 14% to $370.6 million, as compared to $324.4 million during last year’s fiscal fourth quarter.  The largest contributors to Bookings were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17, WWE 2K17, and Sid Meier’s Civilization VI.  Catalog accounted for $216.8 million of Bookings led by Grand Theft Auto.  Digitally-delivered Bookings grew 28% to $267.4 million, as compared to $209.5 million in last year’s fiscal fourth quarter, led by Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17, WWE SuperCard and WWE 2K17, and Sid Meier’s Civilization VI.  Bookings from recurrent consumer spending grew 64% year-over-year and accounted for 70% of digitally-delivered Bookings, or 50% of total Bookings.

Fiscal Year 2017 GAAP Financial Highlights

Net revenue grew 26% to $1.780 billion, as compared to $1.414 billion in fiscal year 2016.  The largest contributors to net revenue in fiscal year 2017 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K16 and NBA 2K17, Mafia III, WWE 2K17, and Sid Meier’s Civilization VI.

Digitally-delivered net revenue grew 32% to $921.7 million, as compared to $697.7 million in fiscal year 2016.  Recurrent consumer spending accounted for 50% of digitally-delivered net revenue, or 26% of total net revenue.  The largest contributors to digitally-delivered net revenue in fiscal year 2017 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K16 and NBA 2K17, Sid Meier’s Civilization VI, WWE SuperCard and WWE 2K17, and Mafia III.

Net income increased to $67.3 million, or $0.72 per diluted share, as compared to net loss of $8.3 million, or $0.10 per diluted share, in fiscal year 2016.

Net cash provided by operating activities grew 27% to $331.4 million.  As of March 31, 2017, the Company had cash and short-term investments of $1.392 billion.

The following data, together with a management reporting tax rate of 22%, are used internally by the Company’s management and Board of Directors to adjust the Company’s GAAP financial results in order to facilitate comparison of its operating performance between periods and to better understand its core business and future outlook:

	Twelve Months Ended March 31, 2017
				Financial Data
	Statement of Operations			Change in deferred net revenue and related cost of goods sold	Stock-based compensation		Non-cash amortization of discount on Convertible Notes	Acquisition- related expenses		Amortization of intangible assets		Gain on long-term investments
Net revenue	$	1,779,748		124,198
Cost of goods sold	1,022,959			3,994	(21,056	)				(2,630	)
Gross profit	756,789			120,204	21,056					2,630
Total operating expenses	665,484				(60,823	)		(1,916	)	(2,564	)
Income from operations	91,305			120,204	81,879			1,916		5,194
Interest and other, net	(15,690		)				21,254
Gain on long-term investments, net	1,350											(1,350	)
Income before income taxes	76,965			120,204	81,879		21,254	1,916		5,194		(1,350	)
Earnings per share
Diluted	$	0.72

In order to calculate net income per diluted share for management reporting purposes, the Company uses its fully diluted share count of 115.9 million and adds back to net income interest expense, net of tax, on the convertible notes of $4.7 million.

Fiscal Year 2017 Operational Metric - Bookings

Total Bookings grew 19% to $1.796 billion, as compared to $1.507 billion in fiscal year 2016.  The largest contributors to Bookings were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17 and NBA 2K16, Mafia III, WWE 2K17, and Sid Meier’s Civilization VI.  Digitally-delivered Bookings grew 25% to $987.2 million, as compared to $790.1 million in fiscal year 2016, led by Grand Theft Auto V and Grand Theft Auto Online, NBA 2K17, Sid Meier’s Civilization VI, WWE SuperCard and WWE 2K17, and Mafia III.  Bookings from recurrent consumer spending grew 52% year-over-year and accounted for 57% of digitally-delivered Bookings, or 32% of total Bookings.

New Operational Metric — Net Sales

Starting with its financial outlook for the first quarter ending June 30, 2017, Take-Two will replace Bookings with Net Sales as an operational metric.  The Company is making this change in order to increase transparency and to be consistent with operational metrics provided by peers.  Net Sales is defined as the net amount of products and services sold digitally or sold-in physically during the period.  Unlike Bookings, Net Sales includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives.

Management Comments

“Consumer demand for our entertainment offerings remained exceedingly strong in the fourth quarter, finishing-off another outstanding year for our organization,” said Strauss Zelnick, Chairman and CEO of Take-Two.  “During fiscal 2017, we delivered Bookings and cash provided by operating activities that significantly exceeded our original expectations, along with revenue growth and margin expansion.  These results were driven by the continued extraordinary performance of Grand Theft Auto V and Grand Theft Auto Online, a diverse array of exciting titles from 2K, and record digitally-delivered revenue and Bookings, including our highest-ever from recurrent consumer spending.  We invested our capital to grow and diversify our business further, including by acquiring Social Point, a leading free-to-play mobile game developer.

“As announced yesterday, Rockstar Games has decided to move the release of Red Dead Redemption 2 to Spring 2018.  As Rockstar stated, Red Dead Redemption 2 will be their first game created from the ground up for the latest generation of console hardware, and some extra time is necessary to ensure that they deliver the best experience possible.  Such decisions are not made lightly, and are driven by our team’s unwavering commitment to unparalleled quality.

“That said, we still expect fiscal 2018 to be a year of strong earnings and cash provided by operating activities for Take-Two, despite an unusually light release slate, driven by new releases of NBA 2K and WWE 2K, our robust catalog led by Grand Theft Auto, and innovative offerings designed to drive engagement and recurrent consumer spending.  Looking ahead to fiscal 2019, we expect to deliver both record Net Sales and record net cash provided by operating activities, in excess of $2.5 billion and $700 million, respectively, led by the launches of Rockstar Games’ Red Dead Redemption 2 and a highly anticipated new title from one of 2K’s biggest franchises.”

Business and Product Highlights

Since January 1, 2017:

Take-Two:

·Expanded its relationship with the NBA through the creation of the NBA 2K eSports League, a new, professional competitive gaming league.  Set to debut in 2018, this groundbreaking competitive gaming league is jointly owned by Take-Two and the NBA, and will consist of teams operated by actual NBA franchises.  The NBA 2K eSports League will follow a professional sports league format: competing head-to-head throughout a regular season, participating in a bracketed playoff system, and concluding with a championship matchup.

·Broadened the skills of its Board of Directors through the appointment of LaVerne Srinivasan to the Board and to its Corporate Governance Committee.  Ms. Srinivasan is Vice President of the National Program and Program Director for Education at the Carnegie Corporation of New York.  Prior to her current position, she worked at various educational technology, urban district change, and non-profit education reform companies.  From 1993 through 2003, she served in various roles at BMG Entertainment, including Senior Vice President and General Counsel.  Ms. Srinivasan holds an A.B. in sociology from Harvard College and a J.D. from Harvard Law School.

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

Rockstar Games:

·Released new free content updates for Grand Theft Auto Online, including:

·Cunning Stunts Special Vehicle Circuit Update, which features new vehicles and race types, as well as adding Props and psychedelic Stunt Tubes to the Stunt Race Creator;

·Land Grab, which allows teams to battle across seven new maps to control territory in an unforgiving cyberspace;

·Tiny Racers, an all-new retro-styled Adversary Mode, which pits players against each other on special tracks made for vehicular combat with a shifting bird’s eye perspective in the spirit of classic Grand Theft Auto titles.

·Made Grand Theft Auto IV and Grand Theft Auto: Episodes from Liberty City available as part of Microsoft’s Xbox One Backwards Compatibility program, enabling owners of the Xbox 360 versions of Grand Theft Auto IV (including The Complete Edition), Grand Theft Auto: Episodes from Liberty City, Grand Theft Auto: The Lost and Damned and Grand Theft Auto: The Ballad of Gay Tony to play these games on Xbox One. In addition, Grand Theft Auto IV and Grand Theft Auto: Episodes from Liberty City are now available for purchase through digital download from the Games Store on Xbox One.

·Announced that Red Dead Redemption 2® is now planned for release worldwide in Spring 2018 (fiscal year 2019) for PlayStation4 and Xbox One.

2K:

·Launched WWE 2K17 for the PC, and released the title’s supporting Future Stars Pack and Hall of Fame Showcase downloadable add-on content.  Developed collaboratively by Yuke’s and Visual Concepts, WWE 2K17 has sold-in approximately 3 million units to date.

·Announced that NBA 2K will feature Hall of Famer Shaquille O’Neal on the cover of the NBA 2K18 Legend Edition. This special edition will place a spotlight on “The Big Aristotle” with special Shaq-

themed memorabilia and content, extending his legacy as the most dominant center in NBA history. NBA 2K18 will be available for PlayStation®4 system and PlayStation®3 computer entertainment system, Xbox One and Xbox 360, Nintendo Switch, and Windows PC platforms on September 19, 2017.

·Released the Australia Civilization & Scenario Pack and the Persia & Macedon Civilization & Scenario Pack for Sid Meier’s Civilization VI.  Developed by Firaxis Games, Sid Meier’s Civilization VI received stellar reviews and is the fastest-selling release in the history of the series, with sell-in of nearly 2 million units to date.  The title will be supported with additional free and paid downloadable add-on content.

·Released the Faster Baby! downloadable add-on pack for Mafia III. Developed by Hangar 13, Mafia III will also be supported with the Stones Unturned and Sign of the Times add-on packs that are planned for release during summer 2017.

·Released WWE SuperCard - Season 3 Update #3 for iOS and Android devices.  Developed by Cat Daddy Games, Update #3 is a free update to WWE SuperCard, the popular WWE collectible card-battling game, which has now been downloaded more than 14 million times.

Financial Outlook for Fiscal 2018

Take-Two is providing its initial financial outlook for its fiscal first quarter ending June 30, 2017 and its fiscal year ending March 31, 2018.

First Quarter Ending June 30, 2017

·GAAP net revenue is expected to range from $390 to $440 million

·GAAP net income is expected to range from $74 to $85 million

·GAAP diluted net income per share is expected to range from $0.65 to $0.75

·Share count used to calculate diluted net income per share is expected to be 119.0 million (1)

·Net Sales (operational metric) are expected to range from $240 to $290 million

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

	Three Months Ended June 30, 2017
		Financial Data
$ in millions	GAAP Outlook (2)	Change in deferred net revenue and related cost of goods sold			Stock-based compensation (3)			Non-cash amortization of discount on Convertible Notes			Amortization of Intangible Assets			Reorganization
Net revenue	$390 to $440	$	(150	)
Cost of goods sold	$147 to $175	$	(45	)	$	(3	)				$	(4	)	$	(3	)
Operating Expenses	$160 to $170				$	(23	)				$	(4	)	$	(4	)
Interest and other, net	$3							$	(3	)
Income (loss) before income taxes	$80 to $93	$	(105	)	$	26		$	3		$	8		$	7

Fiscal Year Ending March 31, 2018

·GAAP net revenue is expected to range from $1.95 to $2.05 billion

·GAAP net income is expected to range from $504 to $540 million

·GAAP diluted net income per share is expected to range from $4.35 to $4.65

·Share count used to calculate diluted net income per share is expected to be 119.7 million (4)

·Net cash provided by operating activities is expected to be approximately $150 million

·Capital expenditures are expected to be approximately $60 million

·Net Sales (operational metric) are expected to range from $1.42 to $1.52 billion

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

	Twelve Months Ended March 31, 2018
		Financial Data
$ in millions	GAAP Outlook (2)	Change in deferred net revenue and related cost of goods sold			Stock-based compensation (3)			Non-cash amortization of discount on Convertible Notes			Amortization of Intangible Assets			Reorganization
Net revenue	$1,950 to $2,050	$	(533	)
Cost of goods sold	$671 to $712	$	(60	)	$	(13	)				$	(17	)	$	(3	)
Operating Expenses	$720 to $740				$	(70	)				$	(15	)	$	(4	)
Interest and other, net	$10							$	(14	)
Income (loss) before income taxes	$549 to $588	$	(473	)	$	83		$	14		$	32		$	7

(1)Includes 105.8 million basic shares, 1.2 million participating shares and 12.0 million shares representing the potential dilution from convertible notes.  The interest expense, net of tax, on the convertible notes, which is added back to net income to calculate diluted net income per share for management reporting purposes is $0.6 million.

(2)The individual components of the financial outlook may not foot to the totals as the Company does not expect actual results for every component to be at the low end or high end of the outlook range simultaneously.

(3)The Company’s stock-based compensation expense for the periods above includes the cost of approximately 0.9 million restricted stock units previously granted to ZelnickMedia that are subject to variable accounting.  Actual expense to be recorded in connection with these shares is dependent upon several factors, including future changes in Take-Two’s stock price.

(4)Includes 106.8 million basic shares, 0.9 million participating shares and 12.0 million shares representing the potential dilution from convertible notes.  The interest expense, net of tax, on the convertible notes, which is added back to net income to calculate diluted net income per share for management reporting purposes is $2.2 million.

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

Product Releases

The following titles were released since January 1, 2017:

Label	Title	Platforms	Release Date
2K	WWE 2K17: Future Stars Pack (DLC)	PS4, PS3, Xbox One, Xbox 360	January 17, 2017
2K	WWE 2K17	PC	February 7, 2017
2K	WWE 2K17: Hall of Fame Showcase (DLC)	PS4, PS3, Xbox One, Xbox 360	February 21, 2017
2K	Sid Meier’s Civilization VI: Australia Civilization & Scenario Pack (DLC)	PC	February 23, 2017
2K	Sid Meier’s Civilization VI: Persia & Macedon Civilization & Scenario Pack (DLC)	PC	March 23, 2017
2K	Mafia III: Faster Baby! (DLC)	PS4, Xbox One, PC	March 28, 2017

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

Label	Title	Platforms	Release Date
2K	Mafia III: Stones Unturned (DLC)	PS4, Xbox One, PC	May 30, 2017
2K	Mafia III: Sign of the Times (DLC)	PS4, Xbox One, PC	Summer 2017
2K	NBA 2K18	PS4, PS3, Xbox One, Xbox 360, Switch, PC	September 19, 2017
2K	WWE 2K18	TBA	Fall 2017
Rockstar Games	Red Dead Redemption 2	PS4, Xbox One	Spring 2018

Conference Call

Take-Two will host a conference call today at 8:00 a.m. Eastern Time to review these results and discuss other topics.  The call can be accessed by dialing (877) 407-0984 or (201) 689-8577.  A live listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.

Final Results

The financial results discussed herein are presented on a preliminary basis; final data will be included in Take-Two’s Annual Report on Form 10-K for the period ended March 31, 2017.

About Take-Two Interactive Software

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

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

Cautionary Note Regarding Forward-Looking Statements

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

#  #  #

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three months ended March 31,						Twelve months ended March 31,
	2017			2016			2017			2016
Net revenue	$	571,556		$	377,206		$	1,779,748		$	1,413,698
Cost of goods sold:
Internal royalties	90,071			72,552			330,782			328,610
Software development costs and royalties	116,922			71,352			335,675			223,512
Product costs	85,787			46,554			255,914			200,206
Licenses	22,120			18,999			100,588			61,545
Total cost of goods sold	314,900			209,457			1,022,959			813,873
Gross profit	256,656			167,749			756,789			599,825
Selling and marketing	38,312			38,020			285,453			198,309
General and administrative	62,042			44,395			211,409			192,452
Research and development	36,421			33,308			137,915			119,807
Business reorganization	—			113			—			71,285
Depreciation and amortization	8,378			7,338			30,707			28,800
Total operating expenses	145,153			123,174			665,484			610,653
Income (loss) from operations	111,503			44,575			91,305			(10,828		)
Interest and other, net	(392		)	(6,257		)	(15,690		)	(30,205		)
Gain on long-term investments, net	—			2,683			1,350			2,683
Income (loss) before income taxes	111,111			41,001			76,965			(38,350		)
Provision for (benefit from) income taxes	11,831			(5,398		)	9,662			(30,048		)
Net income (loss)	$	99,280		$	46,399		$	67,303		$	(8,302	)
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.97		$	0.54		$	0.73		$	(0.10	)
Diluted earnings (loss) per share	$	0.89		$	0.48		0.72			$	(0.10	)
Weighted average shares outstanding:
Basic	100,490			86,375			90,180			83,417
Diluted	117,245			114,496			94,073			83,417
Computation of Basic and Diluted EPS:
Net income (loss)	$	99,280		$	46,399		$	67,303		$	(8,302	)
Less: net income allocated to participating securities	(1,370		)	(1,447		)	(1,275		)	—
Net loss for basic and diluted EPS calculation	$	97,910		$	44,952		$	66,028		$	(8,302	)
Weighted average shares outstanding - basic	101,896			86,375			$	91,921		83,417
Less: weighted average participating shares outstanding	(1,406		)	(2,694		)	(1,741		)	—
Weighted average common shares outstanding - basic	100,490			83,681			90,180			83,417
Basic earnings (loss) per share	$	0.97		$	0.54		$	0.73		$	(0.10	)
Computation of Diluted EPS:
Net income (loss)	$	99,280		$	46,399		$	67,303		$	(8,302	)
Less: net income allocated to participating securities	(1,191		)	(1,092		)	(1,246		)	—
Add: interest expense, net of tax, on Convertible Notes	4,980			8,172			—			—
Net income (loss) for diluted EPS calculation	$	103,069		$	53,479		$	66,057		$	(8,302	)
Weighted average common shares outstanding - basic	101,896			86,375			91,921			83,417
Add: dilutive effect of common stock equivalents	15,349			28,121			2,152			—
Total weighted average shares outstanding - diluted	117,245			114,496			94,073			83,417
Less: weighted average participating shares outstanding	(1,406		)	(2,694		)	(1,741		)	—
Weighted average common shares outstanding - diluted	115,839			111,802			92,332			83,417
Diluted earnings (loss) per share	$	0.89		$	0.48		$	0.72		$	(0.10	)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	March 31,			March 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	943,396		$	798,742
Short-term investments	448,932			470,820
Restricted cash	337,818			261,169
Accounts receivable, net of allowances of $66,483 and $45,552 at March 31, 2017 and 2016,
respectively	219,558			168,527
Inventory	16,323			15,888
Software development costs and licenses	41,721			178,387
Deferred cost of goods sold	127,901			98,474
Prepaid expenses and other	59,593			53,269
Total current assets	2,195,242			2,045,276
Fixed assets, net	67,300			77,127
Software development costs and licenses, net of current portion	381,910			214,831
Deferred cost of goods sold, net of current portion	—			17,915
Goodwill	359,115			217,080
Other intangibles, net	110,262			4,609
Other assets	35,325			13,439
Total assets	$	3,149,154		$	2,590,277
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	31,892		$	30,448
Accrued expenses and other current liabilities	750,875			607,479
Deferred revenue	903,125			582,484
Total current liabilities	1,685,892			1,220,411
Long-term debt	251,929			497,935
Non-current deferred revenue	10,406			216,319
Other long-term liabilities	197,199			74,227
Total liabilities	2,145,426			2,008,892
Stockholders’ equity:
Preferred stock, $.01 par value, 5,000 shares authorized	—			—
Common stock, $.01 par value, 200,000 shares authorized; 119,813 and 103,765 shares
issued and 102,621 and 86,573 outstanding at March 31, 2017 and 2016, respectively	1,198			1,038
Additional paid-in capital	1,452,754			1,088,628
Treasury stock, at cost; 17,192 common shares at March 31, 2017 and 2016, respectively	(303,388		)	(303,388		)
Accumulated deficit	(99,694		)	(166,997		)
Accumulated other comprehensive loss	(47,142		)	(37,896		)
Total stockholders’ equity	1,003,728			581,385
Total liabilities and stockholders’ equity	$	3,149,154		$	2,590,277

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Twelve months ended March 31,
	2017			2016
Operating activities:
Net income (loss)	$	67,303		$	(8,302	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses	221,911			134,472
Depreciation and amortization	30,707			28,800
Amortization and impairment of intellectual property	6,738			160
Stock-based compensation	81,879			69,996
Deferred income taxes	3,020			(270		)
Amortization of discount on Convertible Notes	21,222			23,457
Amortization of debt issuance costs	1,227			1,567
Gain on of long-term investments, net	(1,350		)	(2,683		)
Other, net	(3,410		)	2,588
Changes in assets and liabilities:
Restricted cash	(76,474		)	(91,491		)
Accounts receivable	(41,956		)	49,348
Inventory	(4,942		)	3,809
Software development costs and licenses	(252,951		)	(219,217		)
Prepaid expenses, other current and other non-current assets	(22,155		)	(12,272		)
Deferred revenue	126,285			152,325
Deferred cost of goods sold	(14,969		)	(41,144		)
Accounts payable, accrued expenses and other liabilities	189,344			170,162
Net cash provided by operating activities	331,429			261,305
Investing activities:
Change in bank time deposits	89,076			(182,383		)
Proceeds from available-for-sale securities	155,936			43,314
Purchases of available-for-sale securities	(195,733		)	(150,501		)
Purchases of commercial paper	(25,938		)	—
Business acquisitions, net of cash acquired	(130,669		)	—
Purchases of fixed assets	(21,167		)	(37,280		)
Proceeds from sale of long-term investments	1,350			2,683
Purchase of long-term investments	(1,885		)	—
Other	—			(349		)
Net cash used in investing activities	(129,030		)	(324,516		)
Financing activities:
Excess tax benefit from stock-based compensation	1,990			1,421
Tax payment related to net share settlements on restricted stock awards	(51,762		)	(22,916		)
Repurchase of common stock	—			(26,552		)
Net cash used in financing activities	(49,772		)	(48,047		)
Effects of foreign exchange rates on cash and cash equivalents	(7,973		)	(1,120		)
Net increase (decrease) in cash and cash equivalents	144,654			(112,378		)
Cash and cash equivalents, beginning of year	798,742			911,120
Cash and cash equivalents, end of period	$	943,396		$	798,742

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

Net Revenue by Geographic Region, Distribution Channel, and Platform Mix

(in thousands)

	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Amount			% of Total		Amount			% of Total
Net Revenues by Geographic Region
United States	$	296,040		52	%	$	196,037		52	%
International	275,516			48	%	181,169			48	%
Total net revenues	571,556			100	%	377,206			100	%
Change in Deferred Net Revenues
United States	$	(56,680	)			$	(4,159	)
International	(107,749		)			(30,535		)
Total changes in deferred net revenues	(164,429		)			(34,694		)

	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Amount			% of Total		Amount			% of Total
Net Revenues by Distribution Channel
Digital online	$	278,683		49	%	$	194,798		52	%
Physical retail and other	292,873			51	%	182,408			48	%
Total net revenues	571,556			100	%	377,206			100	%
Change in Deferred Net Revenues
Digital online	$	19,802				$	31,829
Physical retail and other	(184,231		)			(66,523		)
Total changes in deferred net revenues	(164,429		)			(34,694		)

	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Amount			% of Total		Amount			% of Total
Net Revenues by Platform Mix
Console	$	479,958		84	%	$	288,785		77	%
PC and other	91,598			16	%	88,421			23	%
Total net revenues	571,556			100	%	377,206			100	%
Change in Deferred Net Revenues
Console	$	(161,310	)			$	(30,253	)
PC and other	(3,119		)			(4,441		)
Total changes in deferred net revenues	(164,429		)			(34,694		)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

Net Revenue by Geographic Region, Distribution Channel, and Platform Mix

(in thousands)

	Twelve Months Ended March 31, 2017				Twelve Months Ended March 31, 2016
	Amount		% of Total		Amount		% of Total
Net Revenues by Geographic Region
United States	$	999,128	56	%	$	742,963	53	%
International	780,620		44	%	670,735		47	%
Total net revenues	1,779,748		100	%	1,413,698		100	%
Change in Deferred Net Revenues
United States	$	78,356			$	97,770
International	45,842				49,158
Total changes in deferred net revenues	124,198				146,928

	Twelve Months Ended March 31, 2017					Twelve Months Ended March 31, 2016
	Amount			% of Total		Amount		% of Total
Net Revenues by Distribution Channel
Digital online	$	921,734		52	%	$	697,658	49	%
Physical retail and other	858,014			48	%	716,040		51	%
Total net revenues	1,779,748			100	%	1,413,698		100	%
Change in Deferred Net Revenues
Digital online	$	159,528				$	137,563
Physical retail and other	(35,330		)			9,365
Total changes in deferred net revenues	124,198					146,928

	Twelve Months Ended March 31, 2017				Twelve Months Ended March 31, 2016
	Amount		% of Total		Amount		% of Total
Net Revenues by Platform Mix
Console	$	1,440,724	81	%	$	1,167,623	83	%
PC and other	339,024		19	%	246,075		17	%
Total net revenues	1,779,748		100	%	1,413,698		100	%
Change in Deferred Net Revenues
Console	$	113,595			$	12,687
PC and other	10,603				134,241
Total changes in deferred net revenues	124,198				146,928

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

ADDITIONAL DATA

(in thousands)

Three Months Ended March 31, 2017	Net Revenues			Cost of Goods Sold- Internal Royalties		Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing
As reported	$	571,556		$	90,071	$	116,922		$	85,787		$	22,120		$	38,312
Net effect from deferral and related cost of goods sold	(164,429		)			(67,678		)	(47,535		)	(3,072		)
Stock-based compensation						(5,083		)							(2,694		)
Amortization of intangibles						(2,630		)							(1,497		)

Three Months Ended March 31, 2017	General and Administrative			Research and Development			Depreciation and Amortization			Interest and Other, net			Gain on long- term investments
As reported	$	62,042		$	36,421		$	8,378		$	(392	)	$	—
Stock-based compensation	(16,047		)	(2,634		)
Non-cash amortization of discount on Convertible Notes										3,351
Acquisition related expenses	(1,598		)
Amortization of intangibles				(989		)	(78		)
Proceeds from sale of long-term investments

Three Months Ended March 31, 2016	Net Revenues			Cost of Goods Sold-  Internal Royalties		Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold-  Product Costs			Cost of Goods Sold- Licenses			Selling and Marketing
As reported	$	377,206		$	72,552	$	71,352		$	46,554		$	18,999		$	38,020
Net effect from deferral and related cost of goods sold	(34,694		)			(9,601		)	(10,682		)	(3,370		)	(2,566		)
Stock-based compensation						(2,388		)

Three Months Ended March 31, 2016	General and Administrative			Research and Development			Business Reorganization			Depreciation and Amortization		Interest and Other,net			Gain on long- term investments
As reported	$	44,395		$	33,308		$	113		$	7,338	$	(6,257	)	$	2,683
Stock-based compensation	(8,998		)	(1,900		)
Non-cash amortization of discount on Convertible Notes												6,003
Impact of business reorganization							(113		)
Proceeds from sale of long-term investments															(2,683		)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

ADDITIONAL DATA

(in thousands)

Twelve Months Ended March 31, 2017	Net Revenues		Cost of Goods Sold-  Internal Royalties		Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold- Product Costs		Cost of Goods Sold-  Licenses		Selling and Marketing
As reported	$	1,779,748	$	330,782	$	335,675		$	255,914	$	100,588	$	285,453
Net effect from deferral and related cost of goods sold	124,198		—		(6,709		)	2,536		8,167
Stock-based compensation					(21,056		)					(9,963		)
Amortization of intangibles					(2,630		)					(1,497		)

Twelve Months Ended March 31, 2017	General and Administrative			Research and Development			Depreciation and Amortization			Interest and Other, net			Gain on long- term investments
As reported	$	211,409		$	137,915		$	30,707		$	(15,690	)	$	1,350
Stock-based compensation	(42,908		)	(7,952		)
Non-cash amortization of discount on Convertible Notes										21,254
Acquisition related expenses	(1,916		)
Amortization of intangibles				(989		)	(78		)
Proceeds from sale of long-term investments													(1,350		)

Twelve Months Ended March 31, 2016	Net Revenues		Cost of Goods Sold- Internal Royalties		Cost of Goods Sold- Software Development Costs and Royalties			Cost of Goods Sold-  Product Costs		Cost of Goods Sold-  Licenses		Selling and Marketing
As reported	$	1,413,698	$	328,610	$	223,512		$	200,206	$	61,545	$	198,309
Net effect from deferral and related cost of goods sold	146,928				(1,237		)	11,622		30,012		(9,425		)
Stock-based compensation					(15,323		)

Twelve Months Ended March 31, 2016	General and Administrative			Research and Development			Business Reorganization			Depreciation and Amortization		Interest and Other, net			Gain on long- term investments
As reported	$	192,452		$	119,807		$	71,285		$	28,800	$	(30,205	)	$	2,683
Stock-based compensation	(40,323		)	(4,926		)
Non-cash amortization of discount on Convertible Notes												23,457
Impact of business reorganization	(1,228		)				(71,285		)
Proceeds from sale of long-term investments															(2,683		)