Take-Two Interactive Software, Inc. Reports Financial Results for Fourth Quarter and Fiscal Year 2011

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for the fourth quarter and fiscal year ended March 31, 2011, and provided its preliminary financial outlook for fiscal year 2012. In addition, the Company announced that it has extended its long-term employment agreements with key members of the creative team of Rockstar Games, its wholly-owned publishing label, and has entered into a new Management Agreement with ZelnickMedia. As previously announced, the Company has changed its fiscal year-end from October 31 to March 31 and all results are now reported in accordance with this change. Included in the attached financial tables are GAAP to Non-GAAP reconciliations for each quarter of the fiscal year ended March 31, 2011.

For the twelve months ended March 31, 2011, net revenue grew 49% year-over-year to $1.14 billion. GAAP income from continuing operations increased to $53.8 million, or $0.62 per diluted share, as compared to a GAAP loss from continuing operations of $108.1 million, or $1.39 per share, for the year-ago period. Non-GAAP net income increased to $94.3 million, or $1.02 per diluted share, as compared to a Non-GAAP net loss of $65.9 million, or $0.85 per share, for the year-ago period. Non-GAAP net income excludes certain non-cash and non-operational gains and losses identified on the attached reconciliation of GAAP and Non-GAAP measures.

For the fourth quarter ended March 31, 2011, net revenue was $182.3 million, as compared to $233.2 million for the year-ago period. GAAP loss from continuing operations was $22.4 million, or $0.27 per share, as compared to a GAAP loss from continuing operations of $9.7 million, or $0.13 per share, for the year-ago period. Non-GAAP net loss was $14.4 million, or $0.18 per share, as compared to Non-GAAP net income of $3.0 million, or $0.04 per share, for the year-ago period.

The strongest contributors to net revenue in the fourth quarter this year included NBA® 2K11, Top Spin 4, Major League Baseball® 2K11, Grand Theft Auto IV: Complete and Red Dead Redemption: Undead Nightmare (standalone disc). Catalog titles that contributed to the Company’s performance in the recent period were led by Red Dead Redemption, the Grand Theft Auto franchise and Borderlands. Digitally delivered content accounted for 15% of the Company’s net revenue in the fourth quarter, driven by strong sales of offerings for Red Dead Redemption, the Grand Theft Auto franchise, Borderlands and the Sid Meier’s Civilization franchise.

Business and Product Highlights

Since January 1, 2011:

• 2K Sports released Major League Baseball 2K11, featuring pitcher Roy Halladay of the Philadelphia Phillies as the cover athlete.
• 2K Sports released Top Spin 4, the most realistic tennis simulation game to date.
• 2K Play released the Company’s first offering for Kinect for Xbox 360®, Carnival Games®: Monkey See, Monkey Do™.
• Rockstar Games released L.A. Noire on May 17, 2011 in North America and May 20, 2011 internationally. Major news outlets and video game critics across the world have applauded its ambition with great review scores stating that L.A. Noire is "a breakthrough for games as a whole” and a "stunning accomplishment” that "sets a new standard for storytelling”. This title has also been widely recognized as a technological triumph and became the first video game ever chosen as an official selection of the Tribeca Film Festival.
• 2K Games announced that it plans to release The Darkness™ II on October 4, 2011 in North America and October 7, 2011 internationally.
• 2K Play announced that it plans to release Nicktoons MLB in the summer of 2011. The game will feature characters from Nickelodeon’s popular Nicktoons series and all 30 Major League Baseball teams.
• 2K Sports extended its long-term partnership with the National Basketball Association to develop and publish the best-selling NBA 2K basketball franchise for an additional multi-year period. The latest iteration, NBA 2K11, has sold-in over 5 million units worldwide and received the highest scores in the history of the franchise (89 – Metacritic.com).
• 2K Sports announced a new partnership with Nexon Corporation to develop and publish an online baseball simulation game for the South Korean market.
• 2K Games announced a partnership with XLGAMES, Inc. to develop a massively multiplayer online game for the Asian market based on one of 2K’s top-selling franchises.
• 2K Games announced that Duke Nukem Forever has "gone gold” and is expected to launch on June 10, 2011 internationally and on June 14, 2011 in North America.

Company Extends Rockstar Games Employment Agreements and ZelnickMedia Management Agreement

Sam Houser, Dan Houser and Leslie Benzies, key members of the creative team of Rockstar Games, have agreed to renew their long-term employment agreements with the Company on substantially similar economic terms. This team has been instrumental in the development and success of Take-Two's extensive portfolio of multi-million unit internally-owned franchises.

In addition, Take-Two has entered into a new Management Agreement with ZelnickMedia pursuant to which ZelnickMedia will continue to provide financial and management consulting services to the Company through May 31, 2015. As part of the Management Agreement, Strauss Zelnick will continue to serve as Chairman and CEO and Karl Slatoff will continue to serve as COO of Take-Two. The Management Agreement is subject to approval by the Company’s stockholders at the Company’s 2011 Annual Meeting. The terms of the new Management Agreement are described in the Company's Current Report on Form 8-K which was filed with the SEC on May 24, 2011.

Management Comments

Strauss Zelnick, Chairman and CEO of Take-Two, commented, "Fiscal 2011 was a very strong year for Take-Two. We generated revenue growth and margin expansion that consistently exceeded expectations, and also took action to position the Company for even greater success over the long-term. Recent achievements include extending the employment agreements with Rockstar’s key creative talent, renewing our multi-year partnership with the NBA, and entering into two new partnerships to develop online games for Asian markets. These initiatives and others will enable us to continue to execute our core strategy of developing groundbreaking triple-A titles for traditional platforms, while at the same time prudently investing in triple-A entertainment experiences for emerging gaming platforms, both domestically and abroad.

"For fiscal 2012, we again expect to deliver Non-GAAP profits due to our diverse and balanced portfolio of new and catalog titles. Our exciting lineup of releases includes unique, cutting-edge titles such as L.A. Noire, the return of long-awaited industry icons like Duke Nukem, and a broad array of other offerings that promise to delight audiences around the world.

"While it is still very early to discuss fiscal 2013, we have a very strong pipeline of titles in development and currently expect to achieve substantial earnings growth, including Non-GAAP earnings per share in excess of $2.00.”

Financial Outlook for Fiscal 2012

The Company is providing its initial financial outlook for the first quarter ending June 30, 2011, and for the fiscal year ending March 31, 2012 as follows:

			First Quarter				Fiscal Year
			Ending 6/30/2011				Ending 3/31/2012
Revenue			$325 to $375 Million				$1.0 to $1.1 Billion
Non-GAAP earnings per share			$0.00 to $0.10				$0.10 to $0.35
Stock-based compensation			$0.09				$0.28
expense per share (a)
Non-cash interest expense			$0.02				$0.09
related to convertible debt
Non-cash tax expense			$0.00				$0.02

(a)		The Company's stock-based compensation expense for the periods above includes the cost of approximately 1.1 million shares previously issued 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 guidance include continued consumer acceptance of the Xbox 360® video game and entertainment system from Microsoft, PlayStation®3 computer entertainment system, and Wii™ system; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; the timely delivery of the titles detailed in this release; and stable foreign exchange rates. See also "Cautionary Note Regarding Forward Looking Statements” below.

Product Releases

The following titles were released since January 2011:
Title			Platforms				Release Date
Carnival Games® Volume 2			iPhone				February 9, 2011
NHL® 2K11			iPad				February 10, 2011
Sid Meier’s Civilization V: Map Pack (DLC)			PC				March 3, 2011
Sid Meier’s Civilization V: Polynesia (DLC)			PC				March 3, 2011
Major League Baseball 2K11			Xbox 360, PS3, PS2, PSP, Wii, DS,PC				March 8, 2011
Top Spin 4			Xbox 360, PS3, Wii				March 15, 2011
Carnival Games®: Monkey See, Monkey Do™			Kinect for Xbox 360				April 5, 2011
Sid Meier’s Civilization V: Denmark (DLC)			PC				May 3, 2011
Sid Meier’s Civilization V: The Explorers (DLC)			PC				May 3, 2011
L.A. Noire			Xbox 360, PS3				May 17, 2011*
*North American release date; international release followed three days after.

Take-Two's lineup of future titles announced to date includes:
Title		Platforms					Planned For Release
Duke Nukem Forever		Xbox 360, PS3, PC					June 10, 2011**
Nicktoons MLB		Xbox 360, Wii, DS					Summer 2011
The Darkness II		Xbox 360, PS3, PC					October 4, 2011
XCOM		Xbox 360, PC					Fiscal Year 2012
BioShock® Infinite		Xbox 360, PS3, PC					Calendar Year 2012
Spec Ops: The Line		Xbox 360, PS3, PC					First Half Fiscal 2013
**International release date; North American release follows four 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 that exclude certain non-recurring or non-cash items. Non-GAAP gross profit, income (loss) and earnings (loss) per share are measures that exclude certain non-recurring or non-cash items and should be considered in addition to results prepared in accordance with GAAP. They 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.

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 certain items as follows:

• 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 – the Company does not engage in reorganization activities on a regular basis and therefore believes it is appropriate to exclude business reorganization, restructuring and related expenses from its Non-GAAP financial measures.
• Gain (loss) on sale of subsidiaries and 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 professional fees and has accrued for legal settlements 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 interest expense related to convertible debt – The Company records non-cash interest expense on its convertible notes 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 and the impact of the cancellation of stock options – 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.

EBITDA and Adjusted EBITDA

Earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA”) is a financial measure not calculated and presented in accordance with U.S. GAAP. Management uses EBITDA adjusted for business reorganization and related expenses ("Adjusted EBITDA”), among other measures, in evaluating the performance of the Company’s business units. Adjusted EBITDA is also a significant component of the Company’s incentive compensation plans. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net income/(loss) prepared in accordance with GAAP.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a global developer, marketer and publisher of interactive entertainment software games for the PC, PlayStation®3 and PlayStation®2 computer entertainment systems, PSP® (PlayStation®Portable) system, Xbox 360® video game and entertainment system from Microsoft, Wii™, Nintendo DS™, iPhone®, iPod® touch and iPad™. The Company publishes and develops products through its wholly owned labels Rockstar Games and 2K, which publishes its titles under 2K Games, 2K Sports and 2K Play. 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 www.take2games.com.

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

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "potential," "predicts," "projects," "seeks," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company's future business and financial performance. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially from these forward-looking statements based on a variety of risks and uncertainties including: our dependence on key management and product development personnel, our dependence on our Grand Theft Auto products and our ability to develop other hit titles for current generation platforms, the timely release and significant market acceptance of our games, the ability to maintain acceptable pricing levels on our games, our ability to raise capital if needed and risks associated with international operations. Other important factors and information are contained in the Company's Transition Report on Form 10-KT for the five month transition period ended March 31, 2010, 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,
			2011					2010					2011					2010
Net revenue			$	182,255				$	233,217				$	1,136,876				$	762,941
Cost of goods sold:
Product costs				60,766					79,114					326,936					253,369
Software development costs and royalties				23,491					45,201					172,397					140,397
Internal royalties				9,766					4,278					115,032					35,195
Licenses				26,020					21,494					75,016					65,618
Total cost of goods sold				120,043					150,087					689,381					494,579
Gross profit				62,212					83,130					447,495					268,362
Selling and marketing				32,026					40,070					176,294					154,519
General and administrative				29,170					24,216					109,484					115,673
Research and development				17,248					14,329					69,576					57,888
Depreciation and amortization				3,728					3,812					14,999					16,403
Total operating expenses				82,172					82,427					370,353					344,483
Income (loss) from operations				(19,960	)				703					77,142					(76,121	)
Interest and other, net				(3,124	)				(8,551	)				(13,519	)				(18,794	)
Income (loss) from continuing operations before income taxes				(23,084	)				(7,848	)				63,623					(94,915	)
Provision (benefit) for income taxes				(668	)				1,836					9,819					13,145
Income (loss) from continuing operations				(22,416	)				(9,684	)				53,804					(108,060	)
Income (loss) from discontinued operations, net of taxes				362					(160	)				(5,346	)				(14,935	)
Net income (loss)			$	(22,054	)			$	(9,844	)			$	48,458				$	(122,995	)
Earnings (loss) per share:
Continuing operations			$	(0.27	)			$	(0.13	)			$	0.62				$	(1.39	)
Discontinued operations				-					-					(0.06	)				(0.19	)
Basic earnings (loss) per share			$	(0.27	)			$	(0.13	)			$	0.56				$	(1.58	)
Continuing operations			$	(0.27	)			$	(0.13	)			$	0.62				$	(1.39	)
Discontinued operations				-					-					(0.06	)				(0.19	)
Diluted earnings (loss) per share			$	(0.27	)			$	(0.13	)			$	0.56				$	(1.58	)
Weighted average shares outstanding: (1)
Basic				81,960					78,747					86,127					77,858
Diluted				81,960					78,747					86,139					77,858
(1) Basic and diluted include participating shares of 5,615 for the twelve months ended March 31, 2011.
			Three months ended March 31,										Twelve months ended March 31,
OTHER INFORMATION			2011					2010					2011					2010
Geographic revenue mix
North America				71	%				72	%				61	%				67	%
International				29	%				28	%				39	%				33	%
Platform revenue mix
Microsoft Xbox 360				46	%				45	%				40	%				47	%
Sony PlayStation 3				32	%				25	%				39	%				21	%
PC				7	%				10	%				9	%				9	%
Nintendo Wii				7	%				9	%				5	%				8	%
Sony PSP				3	%				4	%				2	%				6	%
Sony PlayStation 2				2	%				3	%				2	%				5	%
Nintendo DS				3	%				4	%				3	%				4	%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
				March 31,					March 31,
				2011					2010
ASSETS
Current assets:
Cash and cash equivalents				$	280,359				$	145,838
Accounts receivable, net of allowances of $42,900 and $72,535 at March 31, 2011
and March 31, 2010, respectively					84,217					74,135
Inventory					24,578					24,479
Software development costs and licenses					131,676					114,608
Prepaid taxes and taxes receivable					8,280					8,654
Prepaid expenses and other					37,493					51,704
Assets of discontinued operations					-					7,182
Total current assets					566,603					426,600
Fixed assets, net					19,632					23,571
Software development costs and licenses, net of current portion					138,320					139,340
Goodwill					225,170					216,289
Other intangibles, net					17,833					22,729
Other assets					4,101					10,747
Total assets				$	971,659				$	839,276
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable				$	56,153				$	45,913
Accrued expenses and other current liabilities					158,459					134,449
Deferred revenue					13,434					11,944
Liabilities of discontinued operations					2,842					17,561
Total current liabilities					230,888					209,867
Long-term debt					107,239					99,865
Income taxes payable					12,037					7,980
Deferred income taxes, net					2,961					941
Liabilities of discontinued operations, net of current portion					3,255					-
Total liabilities					356,380					318,653
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized					-					-
Common stock, $.01 par value, 150,000 shares authorized; 86,119 and 83,977
shares issued and outstanding at March 31, 2011 and March 31, 2010, respectively					861					840
Additional paid-in capital					706,482					674,477
Accumulated deficit					(102,523	)				(150,981	)
Accumulated other comprehensive income (loss)					10,459					(3,713	)
Total stockholders' equity					615,279					520,623
Total liabilities and stockholders' equity				$	971,659				$	839,276

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
				Twelve months ended March 31,
				2011					2010
Operating activities:
	Net income (loss)			$	48,458				$	(122,995	)
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Amortization and impairment of software development costs and licenses				143,811					112,742
	Depreciation and amortization				14,999					16,403
	Loss from discontinued operations				5,346					14,935
	Amortization and impairment of intellectual property				3,927					109
	Stock-based compensation				28,765					26,503
	Loss on sale of subsidiary				-					3,831
	Deferred income taxes				(1,095	)				4,550
	Amortization of discount on Convertible Notes				7,374					5,457
	Amortization of debt issuance costs				1,251					1,136
	Other, net				(1,097	)				788
	Changes in assets and liabilities, net of effect from purchases of businesses:
	Accounts receivable				(10,082	)				(3,332	)
	Inventory				(99	)				5,581
	Software development costs and licenses				(156,782	)				(171,855	)
	Prepaid expenses, other current and other non-current assets				16,943					(14,091	)
	Deferred revenue				1,490					(12,371	)
	Accounts payable, accrued expenses, income taxes payable and other liabilities				41,217					(5,314	)
	Net cash used in discontinued operations				(9,628	)				2,221
	Net cash provided by (used in) operating activities				134,798					(135,702	)
Investing activities:
	Purchase of fixed assets				(9,653	)				(9,933	)
	Cash received from sale of business				3,075					2,512
	Net cash provided by sale of discontinued operations				-					37,250
	Payments in connection with business combinations, net of cash acquired				(1,000	)				(6,804	)
	Net cash (used in) provided by investing activities				(7,578	)				23,025
Financing activities:
	Proceeds from exercise of employee stock options				734					18
	Net payments on line of credit				-					(70,000	)
	Proceeds from issuance of Convertible Notes				-					138,000
	Purchase of convertible note hedges				-					(43,592	)
	Issuance of warrants to purchase common stock				-					26,342
	Payment of debt issuance costs				-					(4,984	)
	Net cash provided by financing activities				734					45,784
	Effects of exchange rates on cash and cash equivalents				6,567					8,593
	Net increase (decrease) in cash and cash equivalents				134,521					(58,300	)
	Cash and cash equivalents, beginning of year				145,838					204,138
	Cash and cash equivalents, end of period			$	280,359				$	145,838

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Three months										Professional																			Non-GAAP three
			ended March 31,					Discontinued					fees and					Stock-based					Non-cash				Non-cash					months ended March 31,
			2011					operations					legal matters					compensation					interest expense				tax expense					2011
Net revenue			$	182,255				$	-				$	-				$	-				$	-			$	-				$	182,255
Cost of goods sold:
Product costs				60,766					-					-					-					-				-					60,766
Software development costs and royalties				23,491					-					-					(894	)				-				-					22,597
Internal royalties				9,766					-					-					-					-				-					9,766
Licenses				26,020					-					-					-					-				-					26,020
Total cost of goods sold				120,043					-					-					(894	)				-				-					119,149
Gross profit				62,212					-					-					894					-				-					63,106
Selling and marketing				32,026					-					-					(1,214	)				-				-					30,812
General and administrative				29,170					-					(455	)				(2,370	)				-				-					26,345
Research and development				17,248					-					-					(657	)				-				-					16,591
Depreciation and amortization				3,728					-					-					-					-				-					3,728
Total operating expenses				82,172					-					(455	)				(4,241	)				-				-					77,476
Income (loss) from operations				(19,960	)				-					455					5,135					-				-					(14,370	)
Interest and other, net				(3,124	)				-					-					-					1,934				-					(1,190	)
Income (loss) from continuing operations before income taxes				(23,084	)				-					455					5,135					1,934				-					(15,560	)
Provision (benefit) for income taxes				(668	)				-					-					-					-				(473	)				(1,141	)
Income (loss) from continuing operations				(22,416	)				-					455					5,135					1,934				473					(14,419	)
Income (loss) from discontinued operations, net of taxes				362					(362	)				-					-					-				-					-
Net income (loss)			$	(22,054	)			$	(362	)			$	455				$	5,135				$	1,934			$	473				$	(14,419	)
Earnings (loss) per share:*
Basic earnings (loss) per share			$	(0.27	)			$	0.00				$	0.01				$	0.06				$	0.02			$	0.01				$	(0.18	)
Diluted earnings (loss) per share			$	(0.27	)			$	0.00				$	0.01				$	0.06				$	0.02			$	0.01				$	(0.18	)
Weighted average shares outstanding
Basic				81,960					81,960					81,960					81,960					81,960				81,960					81,960
Diluted				81,960					81,960					81,960					81,960					81,960				81,960					81,960
EBITDA:
Income (loss) from continuing operations before income taxes			$	(23,084	)																											$	(15,560	)
Interest				3,780																													1,846
Depreciation and amortization				3,728																													3,728
EBITDA			$	(15,576	)																											$	(9,986	)
*Earnings (loss) per share ("EPS") may not add due to rounding

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Three months					Sale of subsidiary				Professional																			Business					Non-GAAP three
			ended March 31,					and discontinued				fees and					Stock-based					Non-cash				Non-cash					reorganization					months ended March 31,
			2010					operations				legal matters					compensation					interest expense				tax expense					and related					2010
Net revenue			$	233,217				$	-			$	-				$	-				$	-			$	-				$	-				$	233,217
Cost of goods sold:
Product costs				79,114					-				-					-					-				-					-					79,114
Software development costs and royalties				45,201					-				-					(1,604	)				-				-					-					43,597
Internal royalties				4,278					-				-					-					-				-					-					4,278
Licenses				21,494					-				-					-					-				-					-					21,494
Total cost of goods sold				150,087					-				-					(1,604	)				-				-					-					148,483
Gross profit				83,130					-				-					1,604					-				-					-					84,734
Selling and marketing				40,070					-				-					(1,117	)				-				-					(93	)				38,860
General and administrative				24,216					-				1,328					(3,535	)				-				-					(1,000	)				21,009
Research and development				14,329					-				-					(946	)				-				-					-					13,383
Depreciation and amortization				3,812					-				-					-					-				-					-					3,812
Total operating expenses				82,427					-				1,328					(5,598	)				-				-					(1,093	)				77,064
Income (loss) from operations				703					-				(1,328	)				7,202					-				-					1,093					7,670
Interest and other, net				(8,551	)				3,831				-					-					1,568				-					-					(3,152	)
Income (loss) from continuing operations before income taxes				(7,848	)				3,831				(1,328	)				7,202					1,568				-					1,093					4,518
Provision (benefit) for income taxes				1,836					-				-					-					-				(340	)				-					1,496
Income (loss) from continuing operations				(9,684	)				3,831				(1,328	)				7,202					1,568				340					1,093					3,022
Income (loss) from discontinued operations, net of taxes				(160	)				160				-					-					-				-					-					-
Net income (loss)			$	(9,844	)			$	3,991			$	(1,328	)			$	7,202				$	1,568			$	340				$	1,093				$	3,022
Earnings (loss) per share:*
Basic earnings (loss) per share			$	(0.13	)			$	0.05			$	(0.02	)			$	0.08				$	0.02			$	0.00				$	0.01				$	0.04
Diluted earnings (loss) per share			$	(0.13	)			$	0.05			$	(0.02	)			$	0.08				$	0.02			$	0.00				$	0.01				$	0.04
Weighted average shares outstanding (1)
Basic				78,747					85,218				85,218					85,218					85,218				85,218					85,218					85,218
Diluted				78,747					85,218				85,218					85,218					85,218				85,218					85,218					85,218
EBITDA:
Income (loss) from continuing operations before income taxes			$	(7,848	)																															$	4,518
Interest				3,844																																	2,276
Depreciation and amortization				3,812																																	3,812
EBITDA			$	(192	)																															$	10,606
Add: Business reorganization and related				1,093																																	-
Adjusted EBITDA			$	901																																$	10,606
*Earnings (loss) per share may not add due to rounding
(1) Non-Gaap basic and diluted include participating shares of 6,471.

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Twelve months									Professional																			Business					Non-GAAP twelve months
			ended March 31,					Discontinued				fees and					Stock-based					Non-cash				Non-cash					reorganization					ended March 31,
			2011					operations				legal matters					compensation					interest expense				tax expense					and related					2011
Net revenue			$	1,136,876				$	-			$	-				$	-				$	-			$	-				$	-				$	1,136,876
Cost of goods sold:
Product costs				326,936					-				-					-					-				-					-					326,936
Software development costs and royalties				172,397					-				-					(10,695	)				-				-					-					161,702
Internal royalties				115,032					-				-					-					-				-					-					115,032
Licenses				75,016					-				-					-					-				-					-					75,016
Total cost of goods sold				689,381					-				-					(10,695	)				-				-					-					678,686
Gross profit				447,495					-				-					10,695					-				-					-					458,190
Selling and marketing				176,294					-				-					(4,659	)				-				-					(18	)				171,617
General and administrative				109,484					-				(826	)				(9,781	)				-				-					(115	)				98,762
Research and development				69,576					-				-					(3,630	)				-				-					(1,580	)				64,366
Depreciation and amortization				14,999					-				-					-					-				-					-					14,999
Total operating expenses				370,353					-				(826	)				(18,070	)				-				-					(1,713	)				349,744
Income (loss) from operations				77,142					-				826					28,765					-				-					1,713					108,446
Interest and other, net				(13,519	)				-				-					-					7,374				-					-					(6,145	)
Income (loss) from continuing operations before income taxes				63,623					-				826					28,765					7,374				-					1,713					102,301
Provision (benefit) for income taxes				9,819					-				-					-					-				(1,866	)				-					7,953
Income (loss) from continuing operations				53,804					-				826					28,765					7,374				1,866					1,713					94,348
Income (loss) from discontinued operations, net of taxes				(5,346	)				5,346				-					-					-				-					-					-
Net income (loss)			$	48,458				$	5,346			$	826				$	28,765				$	7,374			$	1,866				$	1,713				$	94,348
Earnings (loss) per share:*
Basic earnings (loss) per share			$	0.56				$	0.06			$	0.01				$	0.33				$	0.09			$	0.02				$	0.02				$	1.10
Diluted earnings (loss) per share (1)			$	0.56				$	0.05			$	0.01				$	0.29				$	0.07			$	0.02				$	0.02				$	1.02
Weighted average shares outstanding (2)
Basic				86,127					86,127				86,127					86,127					86,127				86,127					86,127					86,127
Diluted				86,139					99,066				99,066					99,066					99,066				99,066					99,066					99,066
EBITDA:
Income (loss) from continuing operations before income taxes			$	63,623																																$	102,301
Interest				15,248																																	7,874
Depreciation and amortization				14,999																																	14,999
EBITDA			$	93,870																																$	125,174
Add: Business reorganization and related				1,713																																	-
Adjusted EBITDA			$	95,583																																$	125,174

*Earnings (loss) per share ("EPS") may not add due to rounding
(1) For the twelve months ended March 31, 2011, non-GAAP EPS — diluted EPS has been calculated using the "if-converted” method as a result of the Convertible Senior Notes ("Convertible Notes") issued in June 2009. Non-GAAP net income used for computing non-GAAP diluted EPS has been adjusted by $6,686 related to interest and debt issuance costs, net of tax. The shares used for computing includes 12,927 shares related to the potential dilution from the Convertible Notes. The "if-converted” method was not used for GAAP EPS presented as the assumed conversion would have been anti-dilutive.
(2) Basic and diluted include participating shares of 5,615.

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Twelve months					Sale of subsidiary				Professional																			Business					Non-GAAP twelve months
			ended March 31,					and discontinued				fees and					Stock-based					Non-cash				Non-cash					reorganization					ended March 31,
			2010					operations				legal matters					compensation					interest expense				tax expense					and related					2010
Net revenue			$	762,941				$	-			$	-				$	-				$	-			$	-				$	-				$	762,941
Cost of goods sold:
Product costs				253,369					-				-					-					-				-					-					253,369
Software development costs and royalties				140,397					-				-					(5,213	)				-				-					-					135,184
Internal royalties				35,195					-				-					-					-				-					-					35,195
Licenses				65,618					-				-					-					-				-					-					65,618
Total cost of goods sold				494,579					-				-					(5,213	)				-				-					-					489,366
Gross profit				268,362					-				-					5,213					-				-					-					273,575
Selling and marketing				154,519					-				-					(3,321	)				-				-					(93	)				151,105
General and administrative				115,673					-				(103	)				(14,319	)				-				-					(1,000	)				100,251
Research and development				57,888					-				-					(3,650	)				-				-					-					54,238
Depreciation and amortization				16,403					-				-					-					-				-					-					16,403
Total operating expenses				344,483					-				(103	)				(21,290	)				-				-					(1,093	)				321,997
Income (loss) from operations				(76,121	)				-				103					26,503					-				-					1,093					(48,422	)
Interest and other, net				(18,794	)				3,831				-					-					5,457				-					-					(9,506	)
Income (loss) from continuing operations before income taxes				(94,915	)				3,831				103					26,503					5,457				-					1,093					(57,928	)
Provision (benefit) for income taxes				13,145					-				-					-					-				(5,145	)				-					8,000
Income (loss) from continuing operations				(108,060	)				3,831				103					26,503					5,457				5,145					1,093					(65,928	)
Income (loss) from discontinued operations, net of taxes				(14,935	)				14,935				-					-					-				-					-					-
Net income (loss)			$	(122,995	)			$	18,766			$	103				$	26,503				$	5,457			$	5,145				$	1,093				$	(65,928	)
Earnings (loss) per share:*
Basic earnings (loss) per share			$	(1.58	)			$	0.24			$	0.00				$	0.34				$	0.07			$	0.07				$	0.01				$	(0.85	)
Diluted earnings (loss) per share			$	(1.58	)			$	0.24			$	0.00				$	0.34				$	0.07			$	0.07				$	0.01				$	(0.85	)
Weighted average shares outstanding
Basic				77,858					77,858				77,858					77,858					77,858				77,858					77,858					77,858
Diluted				77,858					77,858				77,858					77,858					77,858				77,858					77,858					77,858
EBITDA:
Income (loss) from continuing operations before income taxes			$	(94,915	)																															$	(57,928	)
Interest				13,584																																	8,127
Depreciation and amortization				16,403																																	16,403
EBITDA			$	(64,928	)																															$	(33,398	)
Add: Business reorganization and related				1,093																																	-
Adjusted EBITDA			$	(63,835	)																															$	(33,398	)
*Earnings (loss) per share may not add due to rounding

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Three months									Professional																			Non-GAAP three
			ended June 30,					Discontinued				fees and					Stock-based					Non-cash				Non-cash					months ended June 30,
			2010					operations				legal matters					compensation					interest expense				tax expense					2010
Net revenue			$	375,390				$	-			$	-				$	-				$	-			$	-				$	375,390
Cost of goods sold:
Product costs				101,077					-				-					-					-				-					101,077
Software development costs and royalties				64,038					-				-					(6,220	)				-				-					57,818
Internal royalties				67,462					-				-					-					-				-					67,462
Licenses				11,469					-				-					-					-				-					11,469
Total cost of goods sold				244,046					-				-					(6,220	)				-				-					237,826
Gross profit				131,344					-				-					6,220					-				-					137,564
Selling and marketing				49,805					-				-					(1,228	)				-				-					48,577
General and administrative				26,202					-				(61	)				(2,932	)				-				-					23,209
Research and development				16,181					-				-					(841	)				-				-					15,340
Depreciation and amortization				3,765					-				-					-					-				-					3,765
Total operating expenses				95,953					-				(61	)				(5,001	)				-				-					90,891
Income (loss) from operations				35,391					-				61					11,221					-				-					46,673
Interest and other, net				(4,738	)				-				-					-					1,755				-					(2,983	)
Income (loss) from continuing operations before income taxes				30,653					-				61					11,221					1,755				-					43,690
Provision (benefit) for income taxes				3,291					-				-					-					-				(454	)				2,837
Income (loss) from continuing operations				27,362					-				61					11,221					1,755				454					40,853
Income (loss) from discontinued operations, net of taxes				(1,048	)				1,048				-					-					-				-					-
Net income (loss)			$	26,314				$	1,048			$	61				$	11,221				$	1,755			$	454				$	40,853
Earnings (loss) per share:*
Basic earnings (loss) per share			$	0.31				$	0.01			$	0.00				$	0.13				$	0.02			$	0.01				$	0.48
Diluted earnings (loss) per share (1)			$	0.30				$	0.01			$	0.00				$	0.11				$	0.02			$	0.00				$	0.43
Weighted average shares outstanding (2)
Basic				85,506					85,506				85,506					85,506					85,506				85,506					85,506
Diluted				98,433					98,433				98,433					98,433					98,433				98,433					98,433
EBITDA:
Income (loss) from continuing operations before income taxes			$	30,653																											$	43,690
Interest				3,656																												1,901
Depreciation and amortization				3,765																												3,765
EBITDA			$	38,074																											$	49,356

*Earnings (loss) per share ("EPS") may not add due to rounding
(1) For the three months ended June 30, 2010, diluted EPS has been calculated using the "if-converted” method as a result of the Convertible Senior Notes ("Convertible Notes") issued in June 2009. Non-GAAP net income used for computing non-GAAP diluted EPS has been adjusted by $1,647 and GAAP net income used for computing GAAP diluted EPS has been adjusted by $3,402 related to interest and debt issuance costs, net of tax. The shares used for computing includes 12,927 shares related to the potential dilution from the Convertible Notes.
(2) Basic and diluted include participating shares of 6,153.

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Three months									Professional																			Business					Non-GAAP three
			ended September 30,					Discontinued				fees and					Stock-based					Non-cash				Non-cash					reorganization					ended September 30,
			2010					operations				legal matters					compensation					interest expense				tax expense					and related					2010
Net revenue			$	244,972				$	-			$	-				$	-				$	-			$	-				$	-				$	244,972
Cost of goods sold:
Product costs				67,026					-				-					-					-				-					-					67,026
Software development costs and royalties				44,592					-				-					(1,788	)				-				-					-					42,804
Internal royalties				15,803					-				-					-					-				-					-					15,803
Licenses				9,221					-				-					-					-				-					-					9,221
Total cost of goods sold				136,642					-				-					(1,788	)				-				-					-					134,854
Gross profit				108,330					-				-					1,788					-				-					-					110,118
Selling and marketing				46,602					-				-					(1,076	)				-				-					(18	)				45,508
General and administrative				26,620					-				113					(2,497	)				-				-					(115	)				24,121
Research and development				18,074					-				-					(1,132	)				-				-					(1,580	)				15,362
Depreciation and amortization				4,005					-				-					-					-				-					-					4,005
Total operating expenses				95,301					-				113					(4,705	)				-				-					(1,713	)				88,996
Income (loss) from operations				13,029					-				(113	)				6,493					-				-					1,713					21,122
Interest and other, net				(1,644	)				-				-					-					1,813				-					-					169
Income (loss) from continuing operations before income taxes				11,385					-				(113	)				6,493					1,813				-					1,713					21,291
Provision (benefit) for income taxes				3,347					-				-					-					-				(467	)				-					2,880
Income (loss) from continuing operations				8,038					-				(113	)				6,493					1,813				467					1,713					18,411
Income (loss) from discontinued operations, net of taxes				(4,699	)				4,699				-					-					-				-					-					-
Net income (loss)			$	3,339				$	4,699			$	(113	)			$	6,493				$	1,813			$	467				$	1,713				$	18,411
Earnings (loss) per share:*
Basic earnings (loss) per share			$	0.04				$	0.05			$	0.00				$	0.08				$	0.02			$	0.01				$	0.02				$	0.22
Diluted earnings (loss) per share (1)			$	0.04				$	0.05			$	0.00				$	0.07				$	0.02			$	0.00				$	0.02				$	0.20
Weighted average shares outstanding (2)
Basic				85,580					85,580				85,580					85,580					85,580				85,580					85,580					85,580
Diluted				85,580					98,507				98,507					98,507					98,507				98,507					98,507					98,507
EBITDA:
Income (loss) from continuing operations before income taxes			$	11,385																																$	21,291
Interest				4,101																																	2,288
Depreciation and amortization				4,005																																	4,005
EBITDA			$	19,491																																$	27,584
Add: Business reorganization and related				1,713																																	-
Adjusted EBITDA			$	21,204																																$	27,584

*Earnings (loss) per share may not add due to rounding
(1) For the three months ended September 30, 2010, non-GAAP EPS — diluted EPS has been calculated using the "if-converted” method as a result of the Convertible Senior Notes ("Convertible Notes") issued in June 2009. Non-GAAP net income used for computing non-GAAP diluted EPS has been adjusted by $1,680 related to interest and debt issuance costs, net of tax. The shares used for computing includes 12,927 shares related to the potential dilution from the Convertible Notes. The "if-converted” method was not used for GAAP EPS presented as the assumed conversion would have been anti-dilutive.
(2) Basic and diluted include participating shares of 5,786.

	TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
	Non-GAAP CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
	(in thousands, except per share amounts)
								Non-GAAP Reconciling Items
			Three months										Professional																			Non-GAAP three
			ended December 31,					Discontinued					fees and					Stock-based					Non-cash				Non-cash					months ended December 31,
			2010					operations					legal matters					compensation					interest expense				tax expense					2010
Net revenue			$	334,259				$	-				$	-				$	-				$	-			$	-				$	334,259
Cost of goods sold:
Product costs				98,067					-					-					-					-				-					98,067
Software development costs and royalties				40,276					-					-					(1,793	)				-				-					38,483
Internal royalties				22,001					-					-					-					-				-					22,001
Licenses				28,306					-					-					-					-				-					28,306
Total cost of goods sold				188,650					-					-					(1,793	)				-				-					186,857
Gross profit				145,609					-					-					1,793					-				-					147,402
Selling and marketing				47,861					-					-					(1,141	)				-				-					46,720
General and administrative				27,492					-					(423	)				(1,982	)				-				-					25,087
Research and development				18,073					-					-					(1,000	)				-				-					17,073
Depreciation and amortization				3,501					-					-					-					-				-					3,501
Total operating expenses				96,927					-					(423	)				(4,123	)				-				-					92,381
Income (loss) from operations				48,682					-					423					5,916					-				-					55,021
Interest and other, net				(4,013	)				-					-					-					1,872				-					(2,141	)
Income (loss) from continuing operations before income taxes				44,669					-					423					5,916					1,872				-					52,880
Provision for income taxes				3,849					-					-					-					-				(472	)				3,377
Income (loss) from continuing operations				40,820					-					423					5,916					1,872				472					49,503
Income (loss) from discontinued operations, net of taxes				39					(39	)				-					-					-				-					-
Net income (loss)			$	40,859				$	(39	)			$	423				$	5,916				$	1,872			$	472				$	49,503
Earnings (loss) per share:*
Basic earnings (loss) per share			$	0.47				$	0.00				$	0.00				$	0.07				$	0.02			$	0.01				$	0.57
Diluted earnings (loss) per share (1)			$	0.45				$	0.00				$	0.00				$	0.06				$	0.02			$	0.00				$	0.52
Weighted average shares outstanding (2)
Basic				86,321					86,321					86,321					86,321					86,321				86,321					86,321
Diluted				99,260					99,260					99,260					99,260					99,260				99,260					99,260
EBITDA:
Income (loss) from continuing operations before income taxes			$	44,669																												$	52,880
Interest				3,711																													1,839
Depreciation and amortization				3,501																													3,501
EBITDA			$	51,881																												$	58,220

*Earnings (loss) per share ("EPS") may not add due to rounding
(1) For the three months ended December 31, 2010, diluted EPS has been calculated using the "if-converted” method as a result of the Convertible Senior Notes ("Convertible Notes") issued in June 2009. Non-GAAP net income used for computing non-GAAP diluted EPS has been adjusted by $1,680 and GAAP net income used for computing GAAP diluted EPS has been adjusted by $3,552 related to interest and debt issuance costs, net of tax. The shares used for computing includes 12,927 shares related to the potential dilution from the Convertible Notes.
(2) Basic and diluted include participating shares of 5,578.