Take-Two Interactive (TTWO) 10-K risk factor changes: FY2016 vs FY2015

[removed: Sales of] _Grand Theft Auto_ products [removed: generated approximately 28.0%] [added: contributed 54.5%] of the Company's net revenue for the fiscal year ended March 31, [removed: 2015] [added: 2016] and the [removed: ten] [added: five] best-selling franchises (including _Grand Theft [removed: Auto_) that significantly contributed to] [added: Auto_), which may change year over year, in] the [added: aggregate accounted for 93.7% of the] Company's net revenue for the fiscal year ended March 31, [removed: 2015 in the aggregate accounted for approximately 97.1% of the Company's net revenue.][added: 2016.]

The development cycle for new titles generally ranges from 12 [added: months for annual sports releases,] to [removed: more than 24 months, and] [added: multiple years for certain of] our top-selling [removed: titles could take more than 4 years to develop.][added: titles.]

Because [removed: revenue] [added: sales] associated with an initial product launch generally [removed: constitutes] [added: constitute] a high percentage of the total [removed: revenue] [added: sales] associated with the life of a product, delays in product releases or disruptions following the commercial release of one or more new products could have a material adverse effect on our business, financial condition and operating results and cause our operating results to be materially different from our expectations.

_Our business is subject to our ability to develop commercially successful products for the current [removed: generation] video game platforms._

We derive most of our revenue from the sale of products made for video game platforms manufactured by third parties, such as Sony's [removed: PS3 and] PS4 and [added: PS3 and] Microsoft's Xbox [removed: 360] [added: One] and Xbox [removed: One,] [added: 360,] which comprised [removed: approximately 81.4%] [added: 82.6%] of the Company's net revenue by product platform for the fiscal year ended March 31, [removed: 2015.][added: 2016.]

We rely upon third-party digital delivery platforms, such as [removed: Steam,] Microsoft's Xbox [removed: Live and] [added: Live,] Sony Entertainment Network, [added: Steam] and other third-party service providers, to provide connectivity from the consumer to our digital products and our online services.

[removed: These third] party networks, as well as our own internal systems and websites, and the security measures related thereto may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' data or our data, including our intellectual property and other confidential business information, or our information technology systems.

_Security breaches involving the source code for our products [added: or other sensitive and proprietary information] could adversely affect our business._

We are also highly dependent on the expertise, skills and knowledge of certain of our Rockstar employees and other key creative personnel responsible for [added: content creation and development of our _Grand Theft Auto_ titles and titles based on other brands.]

Further, our tax determinations are regularly subject to audit by tax authorities and developments [added: in those audits could adversely affect our income tax provision.]

Demand for and sales of [removed: our sports] titles [added: in our _NBA 2K_ series] are also seasonal in that they are typically released just prior to the start of the [removed: sport season which they depict.][added: NBA season.]

[removed: _Returns] [added: _Price protection granted to our customers and returns] of our published titles by our customers [removed: and price concessions granted to our customers] may adversely affect our operating results._

We are exposed to the risk of [added: price protection and] product returns [removed: and price concessions] with respect to our customers.

We [removed: accept returns and] grant price [removed: concessions] [added: protection and accept returns] in connection with our publishing arrangements and revenue is recognized after deducting estimated [added: price protection and] reserves for [removed: returns and price concessions.][added: returns.]

While we believe that we can reliably estimate future [removed: returns and] price [removed: concessions,] [added: protection and returns,] if [added: price protection and] return rates [removed: and price concessions] for our products exceed our reserves, our revenue could decline, which could have a material adverse effect on our business, financial condition and operating results.

Sales to our five largest customers during the fiscal year ended March 31, [removed: 2015] [added: 2016] accounted for [removed: approximately 64.6%] [added: 58.9%] of our net revenue, with [removed: GameStop] [added: Sony and Microsoft each] accounting for [removed: 21.0%.][added: more than 10.0% of our net revenue during the fiscal year ended March 31, 2016.]

Our products are marketed worldwide through a diverse spectrum of advertising and promotional programs such as television and online advertising, [added: social media advertising,] print advertising, retail merchandising, website development and event sponsorship.

[removed: If the marketing for our products and services fails to resonate with consumers, particularly during the holiday season or other key selling periods, or if] advertising rates or other media placement costs increase, these factors could have a material adverse influence on our business, financial condition and operating results.

[added: We also compete with game publishers, such as Activision Blizzard, Inc. and Electronic Arts Inc. and Ubisoft Entertainment S.A.] As our business is dependent upon our ability to develop hit titles, which require increasing budgets for development and marketing, the availability of significant financial resources has become a major competitive factor in developing and marketing software games.

Future sales of our titles may not be sufficient to recover development payments and advances to software developers and licensors, and we may not have adequate financial and other [removed: resources to satisfy our contractual commitments to such developers.]

We rely on a limited number of channel partners, some of whom have retained the right to change the fee structures for online distribution of both paid content and free content (including patches and corrections) [added: that we license to them for distribution on their platforms.]

[removed: This will also require us to dedicate capital to] developing and implementing alternative marketing strategies, which we may not do successfully.

The ESRB may impose significant penalties on game publishers for violations of its rules related to rating or marketing games, including revocation of a rating or monetary [removed: fines up to $1 million.][added: fines.]

If retailers decline to sell our products based upon their opinion that they contain objectionable themes, graphic violence or sexually explicit material or other generally objectionable content, or if any of our previously "M" rated series products are rated "AO," we might be required to significantly change or discontinue particular titles or series, which in the case of our best-selling _Grand Theft Auto_ titles could [added: seriously affect our business.]

For the fiscal year ended March 31, [removed: 2015, approximately 42.5%] [added: 2016, 47.4%] of our net revenue was earned outside the United States.

We attempt to protect our software and production techniques under [added: patent,] copyright, trademark and trade secret laws as well as through contractual restrictions on disclosure, copying and distribution.

[removed: Unauthorized third-parties] may be able to copy or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary.

Future acquisitions and investments could also involve the issuance of our equity and equity-linked securities (potentially diluting our existing stockholders), the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill, intangibles, or acquired in-process technology, or other increased cash and non-cash expenses such as [removed: stock- based] [added: stock-based] compensation.

[removed: Our Credit Agreement] [added: Notes")] and [removed: the indentures governing our] [added: 1.00%] Convertible Notes [added: due 2018 in June 2013 (the "1.00% Convertible Notes" and together with the 1.75% Convertible Notes, the "Convertible Notes")] may limit our ability to take various actions, including incurring additional debt, paying dividends, repurchasing shares and acquiring or disposing of assets or businesses.

For example, standards regarding [removed: software] revenue recognition have and could further significantly affect the way we account for revenue related to our products and services.

[removed: As we enhance, expand and diversify our business and product offerings, the application of existing or future financial accounting standards, particularly those] relating to the way we account for revenue, could have a significant adverse effect on our reported results although not necessarily on our cash flows.

[removed: _Risks] [added: Risks] relating to our common [removed: stock_][added: stock]

_Additional issuances [added: or sales] of equity securities by us would dilute the ownership of our existing [removed: stockholders._][added: stockholders and could adversely affect the market price of our common stock._]

To the extent we issue additional equity securities, [added: including upon conversion of our outstanding Convertible Notes,] the percentage ownership of our existing stockholders would be reduced.

The share repurchase program authorized by the Board of Directors, which authorized the repurchase of up to [removed: 7,500,000] [added: 14,217,683] shares of our common stock and had [removed: 3,283,000] [added: 9,046,353] shares available for repurchase as of March 31, [removed: 2015,] [added: 2016,] does not obligate the Company to make any purchases at any specific time or situation.

[added: These broad] market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance.

In addition, we may under certain circumstances involving a change of control, be obligated to repurchase all or a portion of our Convertible Notes and any [removed: potential acquirer would be required to assume our obligations related to any outstanding Convertible Notes.]

These third

_The laws and regulations concerning data privacy and certain other aspects of our business are continually evolving.

Failure to comply with these laws and regulations could harm our business._

We are subject to certain privacy and data protection laws, including those in the United States.

Certain aspects of our activities are subject to the E.U.-U.S. Privacy Shield and certain activities related to E.U. customers are registered with our U.K. data controller.

The U.S. Children's Online Privacy Protection Act also regulates the collection, use, and disclosure of personal information from children under 13 years of age.

Failure to comply with privacy laws, data protection laws, or age restrictions may increase our costs, subject us to expensive and distracting government investigations, and result in substantial fines.

Privacy and data protection laws are rapidly changing and likely will continue to do so for the foreseeable future, which could impact our approach to operating and marketing our games.

For example, the Court of Justice of the European Union's recent decision to invalidate the E.U.-U.S. Safe Harbor regime that legitimized the transfer of certain personal data from the E.U. to the U.S. was a material change to laws on data privacy applicable to our business.

The European Commission and the U.S. government have recently agreed to a new framework for transatlantic data flows known as the "E.U.-U.S. Privacy Shield," which is intended to replace the Safe Harbor regime, but the details of how this will operate in practice and the compliance implications for our business are not yet clear.

The U.S. government, including the Federal Trade Commission and the Department of Commerce, is continuing to review the need for greater regulation over the collection of personal information and information about consumer behavior on the Internet and on mobile devices, and the E.U. has proposed reforms to its existing data protection legal framework.

Various government and consumer agencies worldwide have also called for new regulation and changes in industry practices.

Player use of our games is subject to our privacy policy, end user license agreements, and terms of service.

If we fail to comply with our posted privacy policy, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and harm our business.

If regulators, the media, or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, negatively impact our financial condition, and damage our business.

It is possible that a number of laws and regulations may be adopted or construed to apply to us in the United States and elsewhere that could restrict the interactive entertainment industry, including player privacy, advertising, taxation, content suitability, copyright, distribution and antitrust.

Furthermore, the growth and development of electronic commerce and virtual goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours conducting business through digital sales.

Any such changes would require us to devote legal and other resources to address such regulation.

For example, existing laws or new laws regarding the regulation of currency, banking institutions and unclaimed property may be interpreted to cover virtual currency or virtual goods.

If that were to occur we may be required to seek licenses, authorizations or approvals from relevant

regulators, the granting of which may be dependent on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs.

Changes in current laws or regulations or the imposition of new laws and regulations in the United States or elsewhere regarding these activities may lessen the growth of the interactive entertainment industry and impair our business, financial condition, and operating results.

In addition, certain parties with whom we do business are given access to our sensitive and proprietary information in order to provide services and support our team.

These third parties may misappropriate our information and engage in unauthorized use of it.

_We rely on complex information technology systems and networks to operate our business.

Any significant system or network disruption could negatively impact our business._

We rely on the efficient and uninterrupted operation of complex information technology systems and networks, some of which are within Take-Two and some of which are managed and/or hosted by third-party providers.

All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyber-attacks, malicious software, security breach, energy blackouts, natural disasters, terrorism, war and telecommunication failures.

We may also face sophisticated attacks, referred to as advanced persistent threats, which are cyber-attacks aimed at compromising our intellectual property and other commercially-sensitive information, such as the source code and game assets for our software or confidential customer or employee information, which remain undetected for prolonged periods of time.

Information technology system or network failure or security breach could negatively impact our business continuity, operations and financial results.

These risks extend to the networks and e-commerce sites of console platform providers and other partners who sell and host our content online.

We may incur additional costs to remedy the damages caused by these disruptions or security breaches.

_Unclaimed property audits by governmental authorities could adversely impact our operating results._

We are subject to unclaimed property (escheat) laws which require us to turn over to certain government authorities the property of others held by us that has been unclaimed for a specified period of time.

We are subject to audit by individual U.S. states with regard to our escheatment practices.

The legislation and regulations related to unclaimed property matters tend to be complex and subject to varying interpretations by both government authorities and taxpayers.

Although management believes that the positions we have taken are reasonable, various taxing authorities may challenge certain of the positions we have taken, which may also potentially result in additional liabilities for unclaimed property and interest in excess of accrued liabilities.

Our positions are reviewed as events occur such as the availability of new information, the lapsing of applicable statutes of limitations, the measurement of additional estimated liability based on current calculations or the rendering of relevant court decisions.

An unfavorable resolution of assessments by a governmental authority could have a material adverse effect on our financial condition, results of operations and cash flows in future periods.

In addition, if our customers are subject to pricing pressures due to deteriorating demand for our products, competitive pressure, or otherwise, such customers may pass those pricing pressures through to us, which could materially adversely affect our business, financial condition and operating results.

The interpretation and application of consumer and data protection laws in the U.S., Europe and elsewhere are often uncertain, contradictory and in flux.

It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices.

If so, this could result in government

imposed fines or orders requiring that we change our data practices, which could have an adverse effect on our business.

Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business, financial condition and operating results.

content creation and development of our _Grand Theft Auto_ titles and titles based on other brands.

in those audits could adversely affect our income tax provision.

We also compete with domestic game publishers, such as Activision Blizzard and Electronic Arts and international publishers, such as Capcom, SEGA, Square Enix and Ubisoft.

that we license to them for distribution on their platforms.

seriously affect our business.

We have also expanded our Asian operations in an effort to increase our geographical scope and diversify our revenue base.

_We may need additional capital if we incur losses._

If we incur losses in the future, we may be required to raise additional capital in order to fund our operations.

We could seek to raise capital in a number of ways, including through the issuance of debt or equity, or through other financing arrangements.

In August 2014, we entered into a Third Amendment to the Second Amended and Restated Credit Agreement (as amended, the "Credit Agreement"), which requires us to make periodic interest or other debt service payments.

In addition, we issued 1.75% Convertible Notes due 2016 in November 2011 and 1.00% Convertible Notes due 2018 in June 2013 (the "1.75% Convertible Notes" and together with the 1.00% Convertible Notes, the "Convertible Notes"), which require us to make periodic interest payments to the holders of the Convertible Notes.

If we borrow additional funds, further debt service payments would probably be necessary.

In addition, the terms of

additional debt may impose significant restrictions on our ability to operate our business.

If we seek financing through the sale of equity or equity-based securities (such as our Convertible Notes), our current stockholders will suffer dilution in their percentage ownership of common stock.

We cannot be certain as to our ability to raise additional capital in the future or under what terms capital would be available.

If we need to raise capital and are not successful in doing so, we will have to consider other options that may include, but are not limited to, a reduction in our expenditures for internal and external new product development, reductions in overhead expenses, and sales of intellectual property and other assets.

These actions, should they become necessary, will likely result in a reduction in the size of our operations and could materially affect the prospects of our business.

On May 13, 2015, our Board of Directors approved an increase to the share repurchase authorization, increasing the total number of shares that the Company is permitted to repurchase to up to 10,000,000 shares of our common stock.

_Future sales or other issuances of our common stock could adversely affect its market price._

These broad

Our products are currently designed for console gaming systems such as Sony's [removed: PlayStation®3 ("PS3")] [added: PS4] and [removed: PlayStation®4 ("PS4")] [added: PS3] and Microsoft's Xbox [removed: 360® ("Xbox 360")] [added: One] and Xbox [removed: One® ("Xbox One");] [added: 360;] and [removed: personal computers ("PC"),] [added: PC,] including smartphones and tablets.

Another cornerstone of our strategy is to support the success of our products in the marketplace through innovative marketing programs and global distribution on [removed: all] platforms and through [removed: all] channels that are relevant to our target audience.

Our revenue is primarily derived from the sale of internally developed software titles and software titles developed by [removed: third-parties for our benefit.][added: third-parties.]

We have internal development studios located in Canada, China, Czech Republic, the United [removed: Kingdom,] [added: Kingdom] and the United States.

We believe that Rockstar has established a uniquely original, popular cultural phenomenon with its _Grand Theft Auto_ series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over [removed: 210] [added: 240] million units.

The latest installment, _Grand Theft Auto V_, was released on Sony's PS3 and Microsoft's Xbox 360 in September 2013, on [removed: ony's] [added: Sony's] PS4 and Microsoft's Xbox One in November 2014, and on PC in April 2015.

Rockstar [added: Games] is also well known for developing brands in other genres, including the _L.A.

Rockstar [added: Games] continues to expand on our established franchises by developing sequels, offering downloadable episodes, content and virtual currency, and releasing titles for smartphones and tablets.

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling [added: _BioShock_, _Mafia_, _Sid Meier's Civilization_ and _XCOM_ series.]

2K's realistic sports simulation titles include our flagship _NBA 2K_ series, which [removed: has been] [added: continues to be] the top-ranked NBA basketball video [removed: game for 14 years running,] [added: game,] and the _WWE 2K_ [added: professional wrestling] series.

We are continuing [added: to execute on] our [removed: expansion] [added: growth] initiatives in [removed: the Asia markets,] [added: Asia,] where our strategy is to broaden the distribution of our existing products and [removed: establish an] [added: expand our] online gaming presence, especially in China and South Korea.

2K has secured a multi-year license from the NBA to develop an online version of the [removed: _NBA 2K_] [added: NBA] simulation game in China, Taiwan, South Korea and Southeast Asia.

In October 2012, _NBA 2K Online_, our free-to-play NBA simulation [removed: game] [added: game, which was] co-developed by 2K and Tencent, launched commercially on the Tencent Games portal in China.

Our _Grand Theft Auto_ products in particular have historically accounted for a [removed: substantial] [added: significant] portion of our revenue.

Sales of _Grand Theft Auto_ products generated [removed: approximately 28.0%] [added: 54.5%] of [removed: the Company's] [added: our] net revenue for the fiscal year ended March 31, [removed: 2015.][added: 2016.]

The timing of our _Grand Theft Auto_ [added: product] releases [removed: varies significantly, which in turn] may affect our financial performance on a quarterly and annual basis.

Our business is dependent upon a limited number of customers [removed: who] [added: that] account for a significant portion of our revenue.

Our five largest customers accounted for [removed: 64.6%, 39.4%] [added: 58.9%, 64.6%] and [removed: 52.5%] [added: 39.4%] of net revenue during the fiscal years ended March 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

As of March 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] our five largest customers comprised [removed: approximately 63.9%] [added: 73.9%] and [removed: 68.3%] [added: 63.9%] of our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of our gross accounts receivable balance) accounting for [removed: approximately 54.5%] [added: 64.1%] and [removed: 59.8%] [added: 54.5%] of such balance at March 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

We had three customers who accounted for [removed: approximately 18.5%, 18.4%] [added: 35.2%, 16.8%] and [removed: 17.6%] [added: 12.1%] of our gross accounts receivable as of March 31, [removed: 2015] [added: 2016] and three customers who accounted for [removed: 22.6%, 22.3%] [added: 18.5%, 18.4%] and [removed: 14.9%] [added: 17.6%] of our gross accounts receivable as of March 31, [removed: 2014.][added: 2015.]

We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, [removed: 2015] [added: 2016] and [removed: 2014.][added: 2015.]

_Hardware Platforms._ We derive most of our revenue from the sale of products made for video game [removed: platforms] [added: consoles] manufactured by third-parties, such as Sony's [removed: PS3 and] PS4 and [added: PS3 and] Microsoft's Xbox [removed: 360] [added: One] and Xbox [removed: One,] [added: 360,] which comprised [removed: approximately 81.4%] [added: 82.6%] of [removed: the Company's] [added: our] net revenue by product platform for the fiscal year ended March 31, [removed: 2015.][added: 2016.]

The success of our business is dependent upon the consumer acceptance of these [removed: platforms] [added: consoles] and [removed: the] continued growth in [removed: the] [added: their] installed [removed: base of these platforms.][added: base.]

When new hardware platforms are introduced, demand for software [removed: based] [added: used] on older platforms typically declines, which may negatively affect our business during the market transition to the new consoles.

[removed: Accordingly, our strategy is to focus our development efforts on a select number of the] highest quality titles for these platforms, while also expanding our offerings for emerging platforms such as [removed: mobile] [added: tablets, smartphones] and online games.

[removed: Virtually all] [added: Most] of our titles that are available through retailers as packaged goods products are also available through direct digital download [removed: via the Internet] (from websites we own and others owned by third-parties).

In addition, we aim to drive ongoing engagement and [added: incremental revenue from] recurrent consumer spending on our titles after their initial [removed: purchase, by generating incremental revenues] [added: purchase] through downloadable offerings, including add-on content, microtransactions and online play.

Note [removed: 14] [added: 17] to [removed: our] [added: the] Consolidated Financial Statements, "Segment and Geographic Information," discloses that net revenue from digital online channels comprised [removed: approximately 42.0%] [added: 49.3%] of [removed: the Company's] [added: our] net revenue by distribution channel for the fiscal year ended March 31, [removed: 2015.][added: 2016.]

We expect online delivery of games and game offerings to [added: continue to grow and to] become an increasing part of our business over the long-term.

We released the following key titles in fiscal year [removed: 2015:][added: 2016:]

| _NBA [removed: 2K15_] [added: 2K16_] | | 2K | | Internal | | [removed: PS3, PS4,] Xbox 360, Xbox One, [added: PS3, PS4,] PC | | [removed: October 7, 2014] [added: September 29, 2015] |

| _Sid Meier's [removed: Civilization: Beyond Earth_] [added: Civilization VI_] | | 2K | | Internal | | PC | | October [removed: 24, 2014] [added: 21, 2016] |

| _WWE [removed: 2K15_] [added: 2K16_] | | 2K | | Internal/External | | [removed: PS3,] Xbox [removed: 360] [added: 360, Xbox One, PS3, PS4] | | October [removed: 28, 2014] [added: 27, 2015] |

| _Grand Theft Auto V_ | | Rockstar Games | | Internal | | [removed: Xbox One, PS4] [added: PC] | | [removed: November 18, 2014] [added: April 14, 2015] |

| _WWE [removed: 2K16_] [added: 2K17_] | | 2K | | Internal/External | | TBA | | [removed: Fiscal Year] [added: October] 2016 |

| _Battleborn_ | | 2K | | External | | Xbox One, PS4, PC | | [removed: Fiscal Year] [added: May 3,] 2016 [added: (released)] |

_Fiscal [removed: 2015] [added: 2016] Financial Summary_

Our net revenue for fiscal year ended March 31, [removed: 2015] [added: 2016] was led by titles from a variety of our top franchises, [removed: mainly] [added: primarily] _Grand Theft Auto_, _NBA [removed: 2K, Borderlands_] [added: 2K_] and _WWE [removed: 2K_.][added: 2K._ Our net revenue increased to $1,413.7 million, an increase of $330.8 million or 30.5% compared to the fiscal year ended March 31, 2015.]

For the fiscal year ended March 31, [removed: 2015,] [added: 2016,] our net loss was [removed: $279.5] [added: $8.3] million, as compared to [removed: net income of $361.6] [added: $279.5] million in the prior year.

Diluted loss per share for the fiscal year ended March 31, [removed: 2015] [added: 2016] was [removed: $3.48,] [added: $0.10,] as compared to [removed: diluted income per share of $3.20] [added: $3.48] for the fiscal year ended March 31, [removed: 2014.][added: 2015.]

In May 2016, 2K launched _Battleborn_, a new

brand created by Gearbox Software, the makers of _Borderlands_.

In addition, in December 2015, _Civilization Online_, our free-to-play massively multiplayer online game developed by South Korean-based studio XLGAMES, launched in South Korea.

Accordingly, our strategy is to focus our development efforts on a select number of the

| _WWE 2K15_ | | 2K | | Internal/External | | PC | | April 28, 2015 |

| _XCOM 2_ | | 2K | | Internal | | PC, Mac, Linux | | February 5, 2016 |

| _NBA 2K17_ | | 2K | | Internal | | Xbox 360, Xbox One, PS3, PS4, PC | | September 2016 |

| _Mafia III_ | | 2K | | Internal | | Xbox One, PS4, PC | | October 7, 2016 |

Our operating loss for the fiscal year ended March 31, 2016 decreased compared to the fiscal year ended March 31, 2015, due primarily to higher revenues from our _Grand Theft Auto_ franchise and higher gross profit, due primarily to lower internal royalties as a percentage of revenue due to the timing of when internal royalties are earned.

The increase in gross profit was partially offset by $71.3 million in business reorganization expenses.

customer support ("PCS") which generally includes additional free unspecified add-on content updates, maintenance, and online support services.

For these arrangements, we evaluate the significance of the PCS at the time each game is released based on the guidance in Accounting Standards Codification 985-605, "Software—Revenue Recognition" ("ASC 985-605") to determine if the PCS rises to the level of a separate deliverable.

We monitor our initial assessments on an ongoing basis and consider any changes that may arise.

When a software arrangement includes multiple elements, the arrangement consideration is allocated to each revenue element based on its relative fair value, based on the vendor specific objective evidence ("VSOE") of fair value for each element.

We do not have VSOE for our PCS obligations and in those arrangements where PCS obligations have been determined to be significant we recognize revenue from the sale of software products over the period we expect to offer the PCS to the consumer ("estimated service period").

We also do not have VSOE for our online multi-player functionality; however it is generally delivered at the same time with the full game software.

Determining the estimated service period is subjective and requires management's judgment, therefore, the estimated service period may change in the future.

The estimated service periods of our current games, with online functionality and related PCS, are generally twelve to thirty-six months.

When our software products provide insignificant PCS at no additional cost to the consumer, we recognize revenue when the four primary revenue recognition criteria described above have been met for all other deliverables in the arrangement and, in those situations, we estimate and accrue the future costs of providing those services.

As part of our on-going assessment of estimated service periods during the three months ended March 31, 2016, we changed _Grand Theft Auto V's_ estimated service period from 24 to 36 months.

The change in estimate resulted in a decrease in net revenues of $40.2 million and income from operations of $35.8 million to our fiscal 2016 financial results.

We expect this change in estimated service period to have a material impact to our fiscal 2017 and fiscal 2018 financial results.

Licenses consist of payments and guarantees made to holders of intellectual property rights for use of their trademarks, copyrights or other intellectual property rights in the development of our products.

Agreements with license holders generally provide for guaranteed minimum payments for use of their intellectual property.

Certain licenses, especially those related to our sports products, extend over multi-year periods and encompass multiple game titles.

In addition to guaranteed minimum payments, these licenses frequently contain provisions that could require us to pay royalties to the license holder based on pre-agreed unit sales thresholds.

Using the income approach requires the use of financial models, which require us to make various estimates including, but

The fair value of all stock-based compensation is either capitalized and amortized in accordance with our software development cost accounting policy or recognized as expense on a straight-line basis over the full vesting period of the awards.

We estimate the fair value of time-based awards to employees using our closing stock price on the date of grant.

We estimate the fair value of market-based awards using a Monte Carlo Simulation method which takes into account assumptions such as the expected volatility of our common stock, the risk-free interest rate based on the contractual term of the award, expected dividend yield, vesting schedule and the probability that the market conditions of the awards will be achieved.

We apply variable accounting to our non-employee stock-based awards, whereby we remeasure the value of such awards at each balance sheet date and adjust the value of the awards based on its fair value at the end of the reporting period.

For non-employee market-based awards fair value is determined using a Monte Carlo Simulation method which takes into account assumptions such as the expected volatility of our common stock, the risk-free interest rate based on the contractual term of the award, expected dividend yield, vesting schedule and the probability that the market conditions of the awards will be achieved.

For non-employee performance-based awards we do not record an expense until a performance target(s) have been achieved and once achieved fair value is determined by the closing price of our common stock at the end of the reporting period.

We issue time and performance based restricted stock units to certain employees, which currently can only be settled in cash.

These awards are accounted for as liability awards and we apply variable accounting to these awards, whereby we remeasure the value of such awards at each balance sheet date and adjust the value of the awards based on the closing price of our common stock at the end of the reporting period.

_Accounting for Stock Compensation_

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation—Stock Compensation.

This new guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows.

Early adoption is not permitted.

We are currently evaluating the impact of adopting this update on our Consolidated Financial Statements.

_BioShock_, _Mafia_, _Sid Meier's Civilization_ and _XCOM Enemy Unknown_ series.

In addition, South Korean-based studio XLGAMES is presently developing _Civilization Online_, a new online game for the Asian market, which is planned for commercial launch in Korea during our fiscal year 2016.

Additionally, our development costs are generally higher for

titles during platform transition periods, and we have a limited ability to predict the consumer acceptance of the future platforms, which may affect our sales and profitability.

| _Borderlands: The Pre-Sequel_ | | 2K | | Internal/External | | Xbox 360, PS3, PC | | October 14, 2014 |

| _WWE 2K15_ | | 2K | | Internal/External | | PS4, Xbox One | | November 18, 2014 |

| _Grand Theft Auto Online_ | | Rockstar Games | | Internal | | Xbox One, PS4 | | November 18, 2014 |

| _Evolve_ | | 2K | | External | | Xbox One, PS4, PC | | February 10, 2015 |

| _Sid Meier's Starships_ | | 2K | | Internal | | PC Mac, iOS | | March 12, 2015 |

| _Borderlands: The Handsome Collection_ | | 2K | | Internal/External | | Xbox One, PS4 | | March 24, 2015 |

| _Grand Theft Auto V_ | | Rockstar Games | | Internal | | PC | | April 14, 2015 (Released) |

| _Grand Theft Auto Online_ | | Rockstar Games | | Internal | | PC | | April 14, 2015 (Released) |

| _NBA 2K16_ | | 2K | | Internal | | TBA | | Fiscal Year 2016 |

Our net revenue decreased to $1,082.9 million, a decrease of $1,267.6 million or 53.9% from the fiscal year ended March 31, 2014, which

had benefitted from the release of Grand Theft Auto V on Sony's PS3 and Microsoft's Xbox 360 console gaming systems.

_Discontinued operations_

The financial results of our former distribution business, which was sold in February 2010, have been classified as discontinued operations in our Consolidated Statements of Operations for all periods presented.

We earn our revenue from the sale of internally developed interactive software titles and from the sale of titles developed by and/or licensed from third-party developers.

When all other revenue recognition criteria are met, we determine the fair value of each delivered and undelivered element using vendor-specific objective evidence ("VSOE") of fair value and allocate the total price among the various elements.

We determine VSOE for each element based on historical stand-alone sales to third parties.

In determining VSOE, we require that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range.

Changes in assumptions or judgments or changes to the elements in a software arrangement could cause a material increase or decrease in the amount of revenue that we report in a particular period.

When our software products provide limited online functionality at no additional cost to the consumer, we generally consider such features to be incidental to the overall product offering and an inconsequential deliverable, and we recognize revenue when the four primary criteria described above have been met.

During the fiscal year ended March 31, 2015, the Company concluded that the updates being provided with _Grand Theft Auto V_ were no longer considered an inconsequential deliverable because add-on content updates were expected to be provided beyond 12 months.

As a result, the net revenue and cost of goods sold that have been deferred will be recognized ratably over the expected service period, which is equal to the estimated remaining life of the game which, for _Grand Theft Auto V,_ we have projected to be 24 months from the time of release.

Certain of our software products include in-game advertising for third-party products.

Advance payments received for in-game advertising are reported on our Consolidated Balance Sheet as deferred revenue until we meet our performance obligations, at which point we recognize the revenue, which is generally at the time of the initial release of the product.

level of judgment in the assumptions underlying the approach used to determine the value of our reporting units.

Determining the fair value of stock-based awards at the grant date requires judgment in estimating expected stock volatility and the amount of stock-based awards that are expected to be forfeited.

If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected.

We have also granted time, performance-based and market-based restricted stock and restricted stock unit awards, to employees and non-employees.

Time-based and market-based awards to non-employees are subject to variable accounting.

Market-based restricted stock awards vest based on the relative performance of our common stock to a composite index.

using a Monte Carlo Simulation method, which requires a substantial number of inputs and estimates of future market conditions and considers the range of various vesting probabilities.

As a result, expense recorded for our non-employee awards can fluctuate substantially from period to period.

We recognize and measure uncertain tax positions and record tax benefits when it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

At each period end, it is necessary for us to make certain estimates and assumptions to compute the provision for income taxes including allocations of certain transactions to different tax jurisdictions, amounts of permanent and temporary differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax risks.

These estimates and assumptions are revised as new events occur, more experience is acquired and additional information is obtained.

Under our Credit Agreement, outstanding balances bear interest at our election of (a) [removed: 0.50%] [added: 0.25%] to [removed: 1.00%] [added: 0.75%] above a certain base rate (3.75% at March 31, [removed: 2015),] [added: 2016),] or (b) [removed: 1.50%] [added: 1.25%] to [removed: 2.00%] [added: 1.75%] above the LIBOR rate (approximately [removed: 1.76%] [added: 1.68%] at March 31, [removed: 2015),] [added: 2016),] with the margin rate subject to the achievement of certain average liquidity levels.

For additional details on our Convertible Notes see Note [removed: 10] [added: 11] to [removed: our] [added: the] Consolidated Financial Statements.

For the fiscal year ended March 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] our foreign currency translation adjustment [added: loss] was [removed: approximately $32.7] [added: $7.4] million [removed: loss] and [removed: $6.4 million gain,] [added: $32.7 million,] respectively.

We recognized a foreign currency exchange transaction loss of [added: $1.4 million and] $2.1 million for the fiscal [removed: year] [added: years] ended March 31, [added: 2016 and] 2015, [added: respectively, and] a foreign currency [added: exchange transaction] gain of $0.2 million for the fiscal year ended March 31, 2014, [removed: and a foreign currency exchange transaction loss for the fiscal year ended March 31, 2013 of $0.8 million,] in interest and other, net in our Consolidated Statements of Operations.

The [removed: effective portion of] [added: available-for-sale securities were recorded at fair market value with unrealized] gains or losses resulting from changes in [removed: the] fair value [removed: of these hedges is initially reported, net of tax,] [added: reported] as a [added: separate] component of accumulated other comprehensive income [removed: (loss)] [added: (loss), net of tax,] in stockholders' equity.

At March 31, [removed: 2015] [added: 2016,] we [removed: did not have cash flow hedging] [added: had $2.4 million of forward] contracts outstanding [added: to buy foreign currencies in exchange for U.S. dollars] and [removed: at March 31, 2014, we had $0.9 million,] [added: $54.5 million] of forward contracts outstanding to [removed: buy] [added: sell] foreign currencies in exchange for U.S. dollars all of which [removed: had] [added: have] maturities of less than one year.

As of March 31, [removed: 2014,] [added: 2015] the fair value of these outstanding forward contracts was [removed: immaterial] [added: $0.6 million] and is [added: included in prepaid expenses and]

For the fiscal years ended March 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] we recorded [removed: a gain] [added: gains] of [added: $0.1 million and] $18.5 [removed: million, a loss of $18.4] million and a [removed: gain] [added: loss] of [removed: $2.2] [added: $18.4] million, respectively, related to foreign currency forward contracts in interest and other, net on the Consolidated Statements of Operations.

As of March 31, [removed: 2015] [added: 2016] the fair value of these outstanding forward contracts was a loss of [removed: $0.6] [added: $0.1] million and [removed: as of March 31, 2014 was immaterial and] is included in [removed: prepaid expenses] [added: accrued] and [removed: other.][added: other current liabilities.]

For the fiscal year ended March 31, [removed: 2015, 42.5%] [added: 2016, 47.4%] of [removed: the Company's] [added: our] revenue was generated outside the United States.

Using sensitivity analysis, a hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenues by [removed: 4.3%,] [added: 4.7%,] while a hypothetical 10% decrease in the value of the U.S. dollar against all currencies would increase revenues by [removed: 4.3%.][added: 4.7%.]

Our exposure to fluctuations in interest rates relates primarily to our short-term investment portfolio and variable rate debt under the Credit Agreement.

We seek to manage our interest rate risk by maintaining a short-term investment portfolio that includes corporate bonds with high credit quality and maturities less than two years.

Since short-term investments mature relatively quickly and can be reinvested at the then-current market rates, interest income on a portfolio consisting of short-term securities is more subject to market fluctuations than a portfolio of longer term maturities.

However, the fair value of a short-term portfolio is less sensitive to market fluctuations than a portfolio of longer term securities.

We do not currently use derivative financial instruments in our short-term investment portfolio.

Our investments are held for purposes other than trading.

As of March 31, 2016, we had $470.8 million of short-term investments which included $205.3 million of available-for-sale securities.

We also had $798.7 million of cash and cash equivalents that are comprised primarily of money market funds and bank-time deposits.

We determined that, based on the composition of our investment portfolio, there was no material interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, 2016.

At March 31, 2016, there were no outstanding borrowings under our Credit Agreement.

other.

_Cash Flow Hedging Activities_

We use foreign currency forward contracts to mitigate foreign currency exchange rate risk associated with forecasted transactions involving non-functional currency denominated expenditures.

These contracts, which are designated and qualify as cash flow hedges, are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or liabilities on our Consolidated Balance Sheets.

The gross amount of the effective portion of gains or losses resulting from changes in the fair value of these hedges is subsequently reclassified into cost of goods sold or research and development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Consolidated Statements of Operations.

In the event that the gains or losses in accumulated other comprehensive income (loss) are deemed to be ineffective, the ineffective portion of gains or losses resulting from changes in fair value, if any, is reclassified to interest and other, net, in our Consolidated Statements of Operations.

In the event that the underlying forecasted transactions do not occur, or it becomes probable that they will not occur, within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from accumulated other comprehensive income (loss) to interest and other, net, in our Consolidated Statements of Operations.

During the reporting periods presented, all forecasted transactions occurred, and therefore, there were no such gains or losses reclassified into interest and other, net.

We do not enter into derivative financial contracts for speculative or trading purposes.

included in prepaid expenses and other.

The fair value of these outstanding forward contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end of the period.

At March 31, 2014, we had $68.5 million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.

Our products are currently designed for console gaming systems such as [removed: Sony's PlayStation®3 ("PS3") and] [added: the Sony Computer Entertainment, Inc. ("Sony")] PlayStation®4 [removed: ("PS4"), Microsoft's] [added: ("PS4") and PlayStation®3 ("PS3"), Microsoft Corporation ("Microsoft")] Xbox [removed: 360®] [added: One®] ("Xbox [removed: 360")] [added: One")] and Xbox [removed: One®] [added: 360®] ("Xbox [removed: One");] [added: 360");] and personal computers ("PC"), including smartphones and tablets.

[removed: We] [added: Another cornerstone of our strategy is to] support the success of our products in the marketplace through innovative marketing programs and global distribution on [removed: all] platforms and through [removed: all] channels that are relevant to our target audience.

We were incorporated under the laws of the State of Delaware in 1993 and are headquartered in New York, New York with approximately [removed: 2,840] [added: 2,933] employees globally.

Our telephone number is (646) 536-2842 [added: and our website address is www.take2games.com.]

2K is the publisher of a number of critically acclaimed, multi-million unit selling franchises including _BioShock_, _Borderlands_, _Carnival Games_, _Evolve, Mafia_, _NBA 2K_, _Sid Meier's Civilization_, _WWE 2K_ and [removed: _XCOM Enemy Unknown_.][added: _XCOM_.]

_Focus on Core Strength of Producing Select, High Quality Titles._ We focus on publishing a select number of high-quality titles based on [removed: internally- owned] [added: internally-owned] and developed intellectual [removed: properties, which typically provide higher margins than licensed products.][added: properties.]

_Leverage Emerging Technologies, Platforms and Distribution Channels, Including Digitally Delivered Content._ Interactive entertainment played [added: online and] on mobile platforms, including tablets and smartphones, [removed: and online platforms, including social networks, represent] [added: represents] exciting opportunities to enhance our growth and profitability.

We also aim to drive ongoing engagement and incremental revenues from recurrent consumer spending on our titles after their initial [removed: purchase,] [added: purchase] through downloadable offerings including add-on content, microtransactions and online play.

We are continuing [added: to execute on] our [removed: expansion] [added: growth] initiatives in [removed: the Asian markets,] [added: Asia,] where our strategy is to broaden the distribution of our existing products and establish an online gaming presence, especially in China and South Korea.

Our revenue is primarily derived from the sale of internally developed software titles and software titles developed by [removed: third-parties for our benefit.][added: third-parties.]

Operating margins are dependent in part upon our ability to continually release new, commercially successful [added: software] products and to manage [removed: software product] [added: effectively their] development [added: and marketing costs.]

As of March 31, [removed: 2015,] [added: 2016,] we had a research and development staff of [removed: approximately 2,120] [added: 2,179] employees with the technical capabilities to develop software titles for all major [removed: current and prior generation] consoles, handheld hardware platforms and PCs in multiple languages and territories.

We continue to [removed: explore] [added: engage in] evolving business models such as downloadable content, online gaming and microtransactions.

[removed: We believe that Rockstar has established a uniquely original, popular cultural] phenomenon with its _Grand Theft Auto_ series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over [removed: 210] [added: 240] million units.

The latest installment, _Grand Theft Auto V_, was released on Sony's [removed: PlayStation 3] [added: PS3] and Microsoft's Xbox 360 in September 2013, on Sony's [removed: PlayStation 4] [added: PS4] and Microsoft's Xbox One in November 2014, and on [removed: the] PC in April 2015.

Rockstar Games is also well known for developing brands in other genres, including the _LA Noire_, [removed: Bully] [added: _Bully_] and _Manhunt_ franchises.

Rockstar Games continues to expand on our established franchises by developing sequels, offering downloadable [removed: add-on] episodes, content and virtual currency, and releasing titles for smartphones and tablets.

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling _BioShock_, _Mafia_, _Sid Meier's Civilization_ and [removed: _XCOM Enemy Unknown_] [added: _XCOM_] series.

2K's realistic sports simulation [removed: titles, including] [added: titles include] our flagship _NBA 2K_ [removed: series] [added: series,] which [removed: has been] [added: continues to be] the top-ranked NBA basketball video [removed: game for 14 years running] [added: game,] and the _WWE 2K_ [added: professional wrestling] series.

We are continuing [added: to execute on] our [removed: expansion] [added: growth] initiatives in [removed: the Asia markets,] [added: Asia,] where our strategy is to broaden the distribution of our existing products and [removed: establish an] [added: expand our] online gaming presence, especially in China and South Korea.

2K has secured a multi-year license from the NBA to develop an online version of [removed: the _NBA 2K_] [added: our NBA] simulation game in China, Taiwan, South Korea and Southeast Asia.

In October 2012, _NBA 2K Online_, our free-to-play NBA simulation [removed: game] [added: game, which was] co-developed by 2K and Tencent, launched commercially on the Tencent Games portal in China.

[removed: Some of the] [added: The] intellectual property rights we have created or acquired for our internally-owned portfolio of brands [removed: are:] [added: include:] _BioShock_, _Bully_, _Carnival Games_, _Evolve_, _Grand Theft Auto_, _L.A.

Noire_, _Mafia_, [removed: _Manhunt_, _Max] [added: _Manhunt, Max] Payne_, _Midnight Club_, _Red Dead_, [removed: _Rockstar Games Presents Table Tennis_,] _Sid Meier's Civilization_, [removed: _Sid Meier's Pirates!_,] _Spec [removed: Ops_, _Top Spin_] [added: Ops_] and _XCOM_.

Sony and Microsoft either manufacture or control [added: the] selection of approved manufacturers of software products sold for use on their respective hardware platforms.

Production of PC software is performed by third-party vendors in accordance with our specifications and includes [removed: CD-ROM /] DVD-ROM pressing, assembly of components, printing of packaging and user manuals and [removed: shipping of finished goods.]

Our [added: top] customers [removed: in the United States] include, among others, [removed: GameStop,] [added: GameStop Corporation,] Microsoft, Sony, Steam and Wal-Mart.

We have sales operations in Australia, Canada, France, Germany, Japan, the Netherlands, New Zealand, Singapore, South Korea, Spain, [removed: Switzerland,] Taiwan, the United Kingdom and the United States.

Sales to our five largest customers during the fiscal year ended March 31, [removed: 2015] [added: 2016] accounted for [removed: approximately 64.6%] [added: 58.9%] of our net revenue, with [removed: GameStop, Sony, Microsoft] [added: Sony] and [removed: Steam] [added: Microsoft] each [removed: accounted] [added: accounting] for more than 10.0% of our net revenue during the fiscal year ended March 31, [removed: 2015.][added: 2016.]

We also [removed: digitally] distribute our titles, add-on content and microtransactions [added: through] direct [added: digital download via the Internet] to consoles and PCs, including smartphones and tablets.

We view digital distribution as an important growth opportunity for our industry and Company; however, we [removed: continue to] expect that packaged goods and traditional retailers will [added: continue to] be a significant channel for the sale of our products for the foreseeable future.

Price [removed: concessions] [added: protection] may occur at any time in a product's life cycle, but typically [removed: occur] [added: occurs] three to nine months after a product's initial launch.

[removed: Sales returns, price protection] [added: Price protection, sales returns] and other allowances amounted to [removed: $51.5] [added: $64.5] million, [added: $50.1 million and] $138.1 [removed: million, $109.1] million during the fiscal years ended March 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

Employing various other marketing methods designed to promote consumer awareness, including social media, in-store promotions and [removed: point-of- purchase] [added: point-of-purchase] displays, direct mail, co-operative advertising, attendance at trade shows as well as product sampling through demonstration software distributed via the Internet or the digital online services.

As of March 31, [removed: 2015,] [added: 2016,] we had a sales and marketing staff of [removed: approximately 345] [added: 355] people.

Companies that range in size and cost structure from very small with limited resources to very large with greater financial, marketing and technical personnel and other resources than ours, including Activision Blizzard, [added: Inc.,] Electronic [removed: Arts, and international companies, such as Capcom, SEGA, Square Enix,] [added: Arts Inc.] and [removed: Ubisoft.][added: Ubisoft Entertainment S.A.]

The competition is intense among an increasing number of newly introduced [added: entertainment software titles and hardware for adequate levels of shelf space and promotional support.]

Other forms of entertainment such as motion pictures, television and audio, social networking, online computer programs, mobile games and other forms of [removed: entertainment] [added: entertainment,] which may be less expensive or provide other advantages to consumers.

[removed: Sales of] _Grand Theft Auto_ products [removed: generated approximately 28.0%] [added: contributed 54.5%] of [removed: the Company's] [added: our] net revenue for the fiscal year ended March 31, [removed: 2015.][added: 2016.]

Our five largest customers accounted for [removed: 64.6%, 39.4%] [added: 58.9%, 64.6%] and [removed: 52.5%] [added: 39.4%] of net revenue during the fiscal years ended March 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

In May 2016, 2K launched a new brand, _Battleborn_, which was created by Gearbox Software, the makers of _Borderlands_.

We provide a variety of digitally delivered products and offerings, which typically have a higher gross margin than physically delivered products.

We believe that Rockstar has established a uniquely original, popular cultural

In May 2016, 2K launched _Battleborn_, a new brand created by Gearbox Software, the makers of _Borderlands_.

In addition, in December 2015, _Civilization Online_, our free-to-play massively multiplayer online game developed by South Korean-based studio XLGAMES, launched in South Korea.

shipping of finished goods.

We had three customers who accounted for 35.2%, 16.8% and 12.1% of our gross accounts receivable as of March 31, 2016 and three customers who

We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online gaming presence, especially in China and South Korea.

As a result of the widening popularity of interactive entertainment, the video game market is expected to continue to grow in coming years.

Growth is expected to be driven by continuing increases in the installed base of traditional consoles, along with the growing popularity of games played on emerging platforms such as tablets and smartphones, and online including through social networks.

According to the "_Global Video Game Market_" published by _International Development Group_ ("IDG") in April 2015, the installed base of console systems that we support grew to 158.8 million units as of December 2014, an increase of 24.2 million units or 18% from December 2013, and forecasts that the number will increase to an estimated 233.6 million units in calendar 2019.

In addition, according to IDG, global sales from the console, handheld, PC software and digital gaming segments that we support, inclusive of mobile gaming platforms and online, surpassed $65.0 billion in calendar 2014 and forecasts that their annual sales will increase to an estimated $87.3 billion in calendar 2019.

The demographics of the interactive entertainment industry audience have broadened significantly in recent years, with video games becoming an increasingly popular form of mainstream entertainment.

According to the "2015 _Essential Facts about the Computer and Video Game Industry_" published by Entertainment Software Association ("ESA"), 51% of U.S. households own at least one dedicated game console.

The average game player is 35 years old and has been actively playing for 13 years.

Our core strategy is to capitalize on the popularity of video games by developing and publishing high-quality interactive entertainment experiences across a range of genres.

We focus on building compelling franchises by publishing a select number of titles for which we can create sequels and incremental revenue opportunities through add-on content, microtransactions and online play.

and our website address is www.take2games.com.

Another cornerstone of our strategy is to support the success of our products in the marketplace through innovative marketing programs and global distribution on all platforms and through all channels that are relevant to our target audience.

We provide a variety of online delivered products and offerings.

costs.

In addition, South Korean-based studio XLGAMES is presently developing _Civilization Online_, a new online game for the Asian market, which is planned for commercial launch in Korea during our fiscal year 2016.

Our international customers include, among others, Amazon EU SARL, Exertis, Game, GameStop, and Media Markt.

entertainment software titles and hardware for adequate levels of shelf space and promotional support.

Additionally, we have limited ability to predict the consumer acceptance of the new platforms, which may affect our sales and profitability.

Accordingly, our strategy is to focus our development efforts on a select number of the

We also have expanded our Asian operations in an effort to increase our geographical scope and diversify our revenue base.

On April 11, 2016, we filed a declaratory judgment action in the United States District Court for the Southern District of New York seeking, among other things, a judicial declaration that Leslie Benzies, the former president of one of our subsidiaries with whom we had been in ongoing discussions regarding his separation of employment, is not entitled to any minimum allocation or financial parity with any other person under the applicable royalty plan.

We believe we will prevail in this matter, although there can be no assurance of the outcome.

On April 12, 2016, Mr. Benzies filed a complaint in the Supreme Court of the State of New York, New York County against us, and certain of our subsidiaries and employees.

We removed this case to the United States District Court for the Southern District of New York, where our declaratory judgment action is pending.

Mr. Benzies' complaint claims damages of at least $150.0 million and contains allegations of breach of fiduciary duty; fraudulent inducement and fraudulent concealment; aiding and abetting breach of fiduciary duty; breach of various contracts; breach of implied duty of good faith and fair dealing; tortious interference with contract; unjust enrichment; reformation; constructive trust; declaration of rights; constructive discharge; defamation and fraud.

We believe that we have meritorious defenses to these claims, and we intend to vigorously defend against them and to pursue any counterclaims.

[removed: [INDEX TO FINANCIAL STATEMENTS](#fa70301_index_to_financial_statements)][added: | | | [Index to Financial Statements](#A1) | | [66](#A1) |]

| For the fiscal year ended March 31, [removed: 2015] [added: 2016] | | |

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant's most recently completed second fiscal quarter was approximately [removed: $1,864,553,000.][added: $2,352,143,000.]

As of May [removed: 15, 2015,] [added: 13, 2016,] there were [removed: 84,609,452] [added: 84,834,119] shares of the Registrant's Common Stock outstanding, net of treasury stock.

Portions of the registrant's definitive proxy statement for the [removed: 2015] [added: 2016] Annual Meeting of Stockholders

[removed: INDEX][added: INDEX]

| [removed: [ Item 1.](#da70301_item_1._business)] [added: [Item 1.](#da18001_item_1._business)] | | [removed: [](#da70301_item_1._business) [ Business](#da70301_item_1._business)] [added: [Business](#da18001_item_1._business)] | | [removed: [ 1](#da70301_item_1._business)] [added: [1](#da18001_item_1._business)] |

| [removed: [ Item 1A.](#dc70301_item_1a._risk_factors)] [added: [Item 1A.](#dc18001_item_1a._risk_factors)] | | [removed: [](#dc70301_item_1a._risk_factors) [ Risk Factors](#dc70301_item_1a._risk_factors)] [added: [Risk Factors](#dc18001_item_1a._risk_factors)] | | [removed: [ 9](#dc70301_item_1a._risk_factors)] [added: [8](#dc18001_item_1a._risk_factors)] |

| [removed: [ Item 1B.](#de70301_item_1b._unresolved_staff_comments)] [added: [Item 1B.](#de18001_item_1b._unresolved_staff_comments)] | | [removed: [](#de70301_item_1b._unresolved_staff_comments) [ Unresolved] [added: [Unresolved] Staff [removed: Comments](#de70301_item_1b._unresolved_staff_comments)] [added: Comments](#de18001_item_1b._unresolved_staff_comments)] | | [removed: [ 23](#de70301_item_1b._unresolved_staff_comments)] [added: [24](#de18001_item_1b._unresolved_staff_comments)] |

| [removed: [ Item 2.](#de70301_item_2._properties)] [added: [Item 2.](#de18001_item_2._properties)] | | [removed: [](#de70301_item_2._properties) [ Properties](#de70301_item_2._properties)] [added: [Properties](#de18001_item_2._properties)] | | [removed: [ 23](#de70301_item_2._properties)] [added: [24](#de18001_item_2._properties)] |

| [removed: [ Item 3.](#de70301_item_3._legal_proceedings)] [added: [Item 3.](#de18001_item_3._legal_proceedings)] | | [removed: [](#de70301_item_3._legal_proceedings) [ Legal Proceedings](#de70301_item_3._legal_proceedings)] [added: [Legal Proceedings](#de18001_item_3._legal_proceedings)] | | [removed: [ 24](#de70301_item_3._legal_proceedings)] [added: [25](#de18001_item_3._legal_proceedings)] |

| [removed: [ Item 4.](#de70301_item_4._mine_safety_disclosures)] [added: [Item 4.](#de18001_item_4._mine_safety_disclosures)] | | [removed: [](#de70301_item_4._mine_safety_disclosures) [ Mine] [added: [Mine] Safety [removed: Disclosures](#de70301_item_4._mine_safety_disclosures)] [added: Disclosures](#de18001_item_4._mine_safety_disclosures)] | | [removed: [ 24](#de70301_item_4._mine_safety_disclosures)] [added: [25](#de18001_item_4._mine_safety_disclosures)] |

| [removed: [ Item 5.](#dg70301_item_5._market_for_registrant___ite04666)] [added: [Item 5.](#dg18001_item_5._market_for_registrant___ite04666)] | | [removed: [](#dg70301_item_5._market_for_registrant___ite04666) [ Market] [added: [Market] for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#dg70301_item_5._market_for_registrant___ite04666)] [added: Securities](#dg18001_item_5._market_for_registrant___ite04666)] | | [removed: [ 25](#dg70301_item_5._market_for_registrant___ite04666)] [added: [26](#dg18001_item_5._market_for_registrant___ite04666)] |

| [removed: [ Item 6.](#di70301_item_6._selected_financial_data)] [added: [Item 6.](#di18001_item_6._selected_financial_data)] | | [removed: [](#di70301_item_6._selected_financial_data) [ Selected] [added: [Selected] Financial [removed: Data](#di70301_item_6._selected_financial_data)] [added: Data](#di18001_item_6._selected_financial_data)] | | [removed: [ 28](#di70301_item_6._selected_financial_data)] [added: [29](#di18001_item_6._selected_financial_data)] |

| [removed: [ Item 7.](#dk70301_item_7._management_s_discussio__ite03668)] [added: [Item 7.](#dk18001_item_7._management_s_discussio__ite03668)] | | [removed: [](#dk70301_item_7._management_s_discussio__ite03668) [ Management's] [added: [Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations](#dk70301_item_7._management_s_discussio__ite03668)] [added: Operations](#dk18001_item_7._management_s_discussio__ite03668)] | | [removed: [ 29](#dk70301_item_7._management_s_discussio__ite03668)] [added: [30](#dk18001_item_7._management_s_discussio__ite03668)] |

| [removed: [ Item 7A.](#dq70301_item_7a._quantitative_and_qual__ite02669)] [added: [Item 7A.](#dq18001_item_7a._quantitative_and_qual__ite02669)] | | [removed: [](#dq70301_item_7a._quantitative_and_qual__ite02669) [ Quantitative] [added: [Quantitative] and Qualitative Disclosures About Market [removed: Risk](#dq70301_item_7a._quantitative_and_qual__ite02669)] [added: Risk](#dq18001_item_7a._quantitative_and_qual__ite02669)] | | [removed: [ 54](#dq70301_item_7a._quantitative_and_qual__ite02669)] [added: [54](#dq18001_item_7a._quantitative_and_qual__ite02669)] |

| [removed: [ Item 8.](#dq70301_item_8._financial_statements_and_supplementary_data)] [added: [Item 8.](#dq18001_item_8._financial_statements_and_supplementary_data)] | | [removed: [](#dq70301_item_8._financial_statements_and_supplementary_data) [ Financial] [added: [Financial] Statements and Supplementary [removed: Data](#dq70301_item_8._financial_statements_and_supplementary_data)] [added: Data](#dq18001_item_8._financial_statements_and_supplementary_data)] | | [removed: [ 55](#dq70301_item_8._financial_statements_and_supplementary_data)] [added: [56](#dq18001_item_8._financial_statements_and_supplementary_data)] |

| [removed: [ Item 9.](#dq70301_item_9._changes_in_and_disagre__ite03576)] [added: [Item 9.](#dq18001_item_9._changes_in_and_disagre__ite03576)] | | [removed: [](#dq70301_item_9._changes_in_and_disagre__ite03576) [ Changes] [added: [Changes] in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#dq70301_item_9._changes_in_and_disagre__ite03576)] [added: Disclosure](#dq18001_item_9._changes_in_and_disagre__ite03576)] | | [removed: [ 55](#dq70301_item_9._changes_in_and_disagre__ite03576)] [added: [56](#dq18001_item_9._changes_in_and_disagre__ite03576)] |

| [removed: [ Item 9A.](#dq70301_item_9a._controls_and_procedures)] [added: [Item 9A.](#dq18001_item_9a._controls_and_procedures)] | | [removed: [](#dq70301_item_9a._controls_and_procedures) [ Controls] [added: [Controls] and [removed: Procedures](#dq70301_item_9a._controls_and_procedures)] [added: Procedures](#dq18001_item_9a._controls_and_procedures)] | | [removed: [ 56](#dq70301_item_9a._controls_and_procedures)] [added: [56](#dq18001_item_9a._controls_and_procedures)] |

| [removed: [ Item 9B.](#dq70301_item_9b._other_information)] [added: [Item 9B.](#dq18001_item_9b._other_information)] | | [removed: [](#dq70301_item_9b._other_information) [ Other Information](#dq70301_item_9b._other_information)] [added: [Other Information](#dq18001_item_9b._other_information)] | | [removed: [ 56](#dq70301_item_9b._other_information)] [added: [57](#dq18001_item_9b._other_information)] |

| [removed: [ PART III](#dq70301_part_iii)] [added: [PART III](#dq18001_part_iii)] | | | | |

| [removed: [ Item 10.](#dq70301_item_10._directors,_executive___ite02336)] [added: [Item 10.](#dq18001_item_10._directors,_executive___ite02336)] | | [removed: [](#dq70301_item_10._directors,_executive___ite02336) [ Directors,] [added: [Directors,] Executive Officers and Corporate [removed: Governance](#dq70301_item_10._directors,_executive___ite02336)] [added: Governance](#dq18001_item_10._directors,_executive___ite02336)] | | [removed: [ 57](#dq70301_item_10._directors,_executive___ite02336)] [added: [58](#dq18001_item_10._directors,_executive___ite02336)] |

| [removed: [ Item 11.](#dq70301_item_11._executive_compensation)] [added: [Item 11.](#dq18001_item_11._executive_compensation)] | | [removed: [](#dq70301_item_11._executive_compensation) [ Executive Compensation](#dq70301_item_11._executive_compensation)] [added: [Executive Compensation](#dq18001_item_11._executive_compensation)] | | [removed: [ 57](#dq70301_item_11._executive_compensation)] [added: [58](#dq18001_item_11._executive_compensation)] |

| [removed: [ Item 12.](#dq70301_item_12._security_ownership_of__ite04004)] [added: [Item 12.](#dq18001_item_12._security_ownership_of__ite04004)] | | [removed: [](#dq70301_item_12._security_ownership_of__ite04004) [ Security] [added: [Security] Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#dq70301_item_12._security_ownership_of__ite04004)] [added: Matters](#dq18001_item_12._security_ownership_of__ite04004)] | | [removed: [ 57](#dq70301_item_12._security_ownership_of__ite04004)] [added: [58](#dq18001_item_12._security_ownership_of__ite04004)] |

| [removed: [ Item 13.](#dq70301_item_13._certain_relationships__ite03067)] [added: [Item 13.](#dq18001_item_13._certain_relationships__ite03067)] | | [removed: [](#dq70301_item_13._certain_relationships__ite03067) [ Certain] [added: [Certain] Relationships and Related Transactions, and Director [removed: Independence](#dq70301_item_13._certain_relationships__ite03067)] [added: Independence](#dq18001_item_13._certain_relationships__ite03067)] | | [removed: [ 57](#dq70301_item_13._certain_relationships__ite03067)] [added: [58](#dq18001_item_13._certain_relationships__ite03067)] |

| [removed: [ Item 14.](#dq70301_item_14._principal_accounting_fees_and_services)] [added: [Item 14.](#dq18001_item_14._principal_accounting_fees_and_services)] | | [removed: [](#dq70301_item_14._principal_accounting_fees_and_services) [ Principal] [added: [Principal] Accounting Fees and [removed: Services](#dq70301_item_14._principal_accounting_fees_and_services)] [added: Services](#dq18001_item_14._principal_accounting_fees_and_services)] | | [removed: [ 57](#dq70301_item_14._principal_accounting_fees_and_services)] [added: [58](#dq18001_item_14._principal_accounting_fees_and_services)] |

| [removed: [ Item 15.](#ds70301_item_15._exhibits,_financial_statement_schedules)] [added: [Item 15.](#ds18001_item_15._exhibits,_financial_statement_schedules)] | | [removed: [](#ds70301_item_15._exhibits,_financial_statement_schedules) [ Exhibits,] [added: [Exhibits,] Financial Statement [removed: Schedules](#ds70301_item_15._exhibits,_financial_statement_schedules)] [added: Schedules](#ds18001_item_15._exhibits,_financial_statement_schedules)] | | [removed: [ 58](#ds70301_item_15._exhibits,_financial_statement_schedules)] [added: [59](#ds18001_item_15._exhibits,_financial_statement_schedules)] |

10-K 1 a2228643z10-k.htm 10-K

[TABLE OF CONTENTS 2](#a1)

| [PART I](#da18001_part_i) | | | | |

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| [PART II](#dg18001_part_ii) | | | | |

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| [PART IV](#ds18001_part_iv) | | | | |

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| | | [Signatures](#A2) | | [107](#A2) |

10-K 1 a2224758z10-k.htm 10-K

| [PART I](#da70301_part_i) | | | | |

| [ PART II](#dg70301_part_ii) | | | | |

| [ PART IV](#ds70301_part_iv) | | | | |

| | | [](#indextofin) [ Index to Financial Statements](#indextofin) | | [ 65](#indextofin) |

| | | [](#signa) [ Signatures](#signa) | | [ 109](#signa) |

In addition, our other subsidiaries lease office space in Sydney, Australia; Toronto, Canada; Chengdu, [removed: Hanghzhou and Shanghai,] China; Brno, Czech Republic; Paris, France; Munich, Germany; Tokyo, Japan; Seoul, South Korea; Breda, Netherlands; Auckland, New Zealand; Singapore; Madrid, Spain; [added: Lucerne, Switzerland;] Taipei, Taiwan; London, Lincoln, and Leeds, United [removed: Kingdom] [added: Kingdom;] and, in the United States, [added: Petaluma and] San Diego, [removed: and Northridge,] California; Sparks, Maryland; Andover and [removed: Quincy,] [added: Westwood,] Massachusetts; Las Vegas, Nevada; Glen [removed: Cove,] [added: Cove and] New [added: York, New] York; [added: and] Kirkland, Washington.

For information regarding our lease commitments, see Note [removed: 11 of the Notes] [added: 13] to [added: the] Consolidated Financial Statements.

| Fiscal Year Ended March 31, [removed: 2014] [added: 2016] | | | | | | | |

| First Quarter ended June 30, [removed: 2013] [added: 2015] | | $ | [removed: 17.54] [added: 28.98] | | $ | [removed: 14.08] [added: 23.30] | |

| Second Quarter ended September 30, [removed: 2013] [added: 2015] | | | [removed: 19.25] [added: 32.71] | | | [removed: 15.05] [added: 25.01] | |

| Third Quarter ended December 31, [removed: 2013] [added: 2015] | | | [removed: 18.59] [added: 37.00] | | | [removed: 16.00] [added: 27.89] | |

| Fourth Quarter ended March 31, [removed: 2014] [added: 2016] | | | [removed: 22.41] [added: 37.95] | | | [removed: 16.40] [added: 31.36] | |

The number of record holders of our common stock was [removed: 65] [added: 63] as of May [removed: 15, 2015.][added: 13, 2016.]

The following line graph compares, from March 31, [removed: 2010] [added: 2011] through March 31, [removed: 2015,] [added: 2016,] the cumulative total stockholder return on our common stock with the cumulative total return on the stocks comprising the NASDAQ Composite Index and the stocks comprising a peer group index consisting of Activision [removed: Blizzard] [added: Blizzard, Inc.] and Electronic [removed: Arts.][added: Arts Inc. The comparison assumes $100 was invested on March 31, 2011 in our common stock and in each of the following indices and assumes reinvestment of all cash dividends, if any, paid on such securities.]

Comparison of [removed: 65 Month] [added: 5 Year] Cumulative Total Return*

[removed: ][added: ]

$100 invested on March 31, [removed: 2010] [added: 2011] in stock or index- including reinvestment of dividends.

| | | [removed: 2010 | | |] 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | [added: 2016 | | |]

[removed: In] [added: _Share Repurchase Program_—In] January 2013, our Board of Directors authorized the repurchase of up to 7,500,000 shares of our common stock.

[removed: The authorization permits the Company] [added: We are authorized] to purchase shares from time to time through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws.

Repurchases are subject to the availability of stock, prevailing market conditions, the trading price of the stock, [removed: the Company's] [added: our] financial performance and other conditions.

The program [added: does not require us to repurchase shares and] may be suspended or discontinued at any time for any reason.

During the fiscal year ended March 31, 2014, [removed: the Company] [added: we] repurchased [removed: approximately 4,217,000] [added: 4,217,683] shares of [removed: its] [added: our] common stock in the open market for [removed: approximately] $73.3 [removed: million, including commissions of $0.04 million,] [added: million] as part of the program.

As of March 31, [removed: 2015, up to approximately 3,283,000] [added: 2016, we have repurchased a total of 5,171,330] shares of our common stock [added: and have 9,046,353 shares of our common stock that] remain available for repurchase under [removed: the Company's] [added: our] share repurchase authorization.

March 2016

| Take-Two Interactive Software, Inc. | | $ | 100.00 | | $ | 100.13 | | $ | 105.07 | | $ | 142.68 | | $ | 165.65 | | $ | 245.09 | |

| NASDAQ Composite Index | | | 100.00 | | | 112.31 | | | 120.33 | | | 156.65 | | | 185.03 | | | 186.06 | |

| Peer Group | | | 100.00 | | | 107.10 | | | 121.01 | | | 178.05 | | | 261.39 | | | 340.56 | |

In May 2015, our Board of Directors authorized the repurchase of an additional 6,717,683 shares of our common stock pursuant to the share repurchase program.

During the fiscal year ended March 31, 2016 we repurchased 953,647 shares of our common stock in the open market for $26.6 million as part of the program.

During the fiscal year ended March 31, 2016, we repurchased 238,981 shares of our common stock for $7.9 million, in connection with our obligation to holders of restricted stock awards to withhold the number

of shares required to satisfy the holders' tax liabilities in connection with the vesting of such shares.

These 238,981 shares were not part of the publicly announced share repurchase program.

_Summary Table_—The table below details the share repurchases that were made by us during the three months ended March 31, 2016:

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | Shares purchased* | | | Average price per share | | | Total number of shares purchased as part of publicly announced plans or programs | | | Maximum number of shares that may yet be purchased under the repurchase program | | |

| January 1 - 31, 2016 | | | 3,454 | | $ | 34.11 | | | — | | | 9,046,353 | |

| February 1 - 29, 2016 | | | 9,125 | | $ | 34.31 | | | — | | | 9,046,353 | |

| March 1 - 31, 2016 | | | 115,085 | | $ | 37.67 | | | — | | | 9,046,353 | |

All of the shares purchased during this period were purchased in connection with our obligation to holders of restricted stock awards to withhold the number of shares required to satisfy the holders' tax liabilities in connection with the vesting of such shares.

None of the shares repurchased during the three months ended March 31, 2016 were part of the publicly announced share repurchase program.

The comparison assumes $100 was invested on March 31, 2010 in our common stock and in each of the following indices and assumes reinvestment of all cash dividends, if any, paid on such securities.

March 2015

| Take-Two Interactive Software Inc | | $ | 100.00 | | $ | 155.72 | | $ | 155.93 | | $ | 163.63 | | $ | 222.19 | | $ | 257.95 | |

| NASDAQ Composite Index | | | 100.00 | | | 117.06 | | | 131.47 | | | 140.86 | | | 183.38 | | | 216.60 | |

| Peer Group | | | 100.00 | | | 95.97 | | | 102.78 | | | 116.13 | | | 170.87 | | | 250.85 | |

It does not obligate the Company to make any purchases at any specific time or situation.

During the fiscal year ended March 31, 2015, the Company did not repurchase any shares of its common stock as part of the program.

On May 13, 2015, our Board of Directors approved an increase to the share repurchase authorization, increasing the total number of shares that the Company is permitted to repurchase to up to 10,000,000 shares of our common stock.

_Repurchase from Icahn Group_

In November 2013, the Company entered into a Purchase Agreement with High River Limited Partnership, Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP and Icahn Partners Master Fund III LP (collectively, the "Icahn Group"), pursuant to which the Company repurchased approximately 12,021,000 shares of the Company's common stock owned by the Icahn Group, at a price per share of $16.93, resulting in an aggregate purchase price of approximately $203.5 million (the "Repurchase Transaction").

The closing of the Repurchase Transaction occurred on November 26, 2013.

The Repurchase Transaction was conducted outside the Company's share repurchase program described above.

| STATEMENT OF OPERATIONS [removed: DATA (in thousands, except per share data):] [added: DATA:] | | [added: 2016 | | |] 2015 | | | 2014 | | | 2013 | | | 2012 | | | [removed: 2011 | | |]

| Net revenue | | $ | [removed: 1,082,938] [added: 1,413,698] | | $ | [removed: 2,350,568] [added: 1,082,938] | | $ | [removed: 1,214,483] [added: 2,350,568] | | $ | [removed: 825,823] [added: 1,214,483] | | $ | [removed: 1,136,876] [added: 825,823] | |

| Gross profit | | | [removed: 288,071] [added: 599,825] | | | [removed: 936,241] [added: 288,071] | | | [removed: 498,646] [added: 936,241] | | | [removed: 296,968] [added: 498,646] | | | [removed: 447,495] [added: 296,968] | |

| [removed: Income (loss)] [added: (Loss) income] from operations | | | [removed: (258,463] [added: (10,828] | ) | | [added: (258,463 | ) | |] 415,256 | | | 5,239 | | | (84,266 | ) | [removed: | 77,142 | |]

| [removed: Income (loss)] [added: (Loss) income] from continuing operations | | | [removed: (279,470] [added: (8,302] | ) | | [added: (279,470 | ) | |] 361,691 | | | (31,162 | ) | | (107,700 | ) | [removed: | 53,804 | |]

| Net [removed: income] (loss) [added: income] | | [removed: $] | [removed: (279,470] [added: (8,302] | ) | [removed: $] | [added: (279,470 | ) | |] 361,605 | | [removed: $] | (29,491 | ) | [removed: $] | (108,816 | ) | [removed: $ | 48,458 | |]

| [removed: Earnings (loss)] [added: (Loss) earnings] per share: | | | | | | | | | | | | | | | | |

| Continuing operations | | $ | [removed: (3.48] [added: (0.10] | ) | $ | [removed: 3.79] [added: (3.48] | [added: )] | $ | [removed: (0.36] [added: 3.79] | [removed: )] | $ | [removed: (1.30] [added: (0.36] | ) | $ | [removed: 0.62] [added: (1.30] | [added: )] |

| [removed: Basic] [added: (Loss)] earnings [removed: (loss)] per share | | [removed: $] | [removed: (3.48] [added: (0.10] | ) | [removed: $] | [added: (3.48 | ) | |] 3.79 | | [removed: $] | (0.34 | ) | [removed: $] | (1.31 | ) | [removed: $ | 0.56 | |]

| Continuing operations | | [removed: $] | [removed: (3.48] [added: (0.10] | ) | [removed: $] | [added: (3.48 | ) | |] 3.20 | | [removed: $] | (0.36 | ) | [removed: $] | (1.30 | ) | [removed: $ | 0.62 | |]

| [removed: Diluted] [added: (Loss)] earnings [removed: (loss)] per share | | [removed: $] | [removed: (3.48] [added: (0.10] | ) | [removed: $] | [added: (3.48 | ) | |] 3.20 | | [removed: $] | (0.34 | ) | [removed: $] | (1.31 | ) | [removed: $ | 0.56 | |]

| BALANCE SHEET DATA: | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015(1)] | | | [removed: 2013] [added: 2014(1)] | | | [removed: 2012] [added: 2013(1)] | | | [removed: 2011] [added: 2012(1)] | | |

| Basic: | | | | | | | | | | | | | | | | |

| Diluted: | | | | | | | | | | | | | | | | |

| Total assets | | $ | 2,590,277 | | $ | 2,228,073 | | $ | 1,795,083 | | $ | 1,273,221 | | $ | 1,142,969 | |

| Long-term debt | | | 497,935 | | | 473,030 | | | 449,484 | | | 330,584 | | | 309,882 | |

(1)

We retrospectively adopted Accounting Standards Update 2015-03, "Simplifying the Presentation of Debt Issuance Costs," and as a result previously reported Total assets and Long-term debt have both decreased from previously reported amounts by $3,027, $4,547, $4,618 and $6,458 as of March 31, 2015, 2014, 2013 and 2012, respectively.

See Note 1 to the Consolidated Financial Statements.

| Cost of goods sold | | | 794,867 | | | 1,414,327 | | | 715,837 | | | 528,855 | | | 689,381 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Selling and marketing | | | 235,341 | | | 240,996 | | | 257,329 | | | 183,749 | | | 176,294 | |

| General and administrative | | | 175,093 | | | 161,374 | | | 147,260 | | | 121,200 | | | 109,484 | |

| Research and development | | | 115,043 | | | 105,256 | | | 78,184 | | | 64,162 | | | 69,576 | |

| Depreciation and amortization | | | 21,057 | | | 13,359 | | | 10,634 | | | 12,123 | | | 14,999 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Total operating expenses | | | 546,534 | | | 520,985 | | | 493,407 | | | 381,234 | | | 370,353 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Interest and other, net | | | (31,893 | ) | | (33,553 | ) | | (31,351 | ) | | (19,571 | ) | | (13,519 | ) |

| Gain on long-term investments, net | | | 17,476 | | | — | | | — | | | — | | | — | |

| Loss on extinguishment of debt | | | — | | | (9,014 | ) | | — | | | — | | | — | |

| Gain on convertible note hedge and warrants, net | | | — | | | 3,461 | | | — | | | — | | | — | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Income (loss) from continuing operations before income taxes | | | (272,880 | ) | | 376,150 | | | (26,112 | ) | | (103,837 | ) | | 63,623 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Provision for income taxes | | | 6,590 | | | 14,459 | | | 5,050 | | | 3,863 | | | 9,819 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Income (loss) from discontinued operations, net of taxes | | | — | | | (86 | ) | | 1,671 | | | (1,116 | ) | | (5,346 | ) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

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| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Discontinued operations | | | — | | | — | | | 0.02 | | | (0.01 | ) | | (0.06 | ) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

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| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Discontinued operations | | | — | | | — | | | 0.02 | | | (0.01 | ) | | (0.06 | ) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

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| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |

| Basic | | | 80,367 | | | 84,519 | | | 85,581 | | | 83,356 | | | 86,127 | |

| Diluted | | | 80,367 | | | 113,882 | | | 85,581 | | | 83,356 | | | 86,139 | |

| Cash and cash equivalents | | $ | 911,120 | | | 935,400 | | | 402,502 | | $ | 420,279 | | $ | 280,359 | |

| Working capital | | | 815,048 | | | 924,620 | | | 529,153 | | | 524,892 | | | 335,715 | |

| Total assets | | | 2,231,100 | | | 1,799,630 | | | 1,277,839 | | | 1,149,427 | | | 971,659 | |

We provide details of our valuation and qualifying accounts in "Note [removed: 17—Supplementary] [added: 21—Supplementary] Financial Information" to the Consolidated Financial Statements.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures at March 31, [removed: 2015,] [added: 2016,] the end of the period covered by this report.

[removed: Based on this evaluation, the principal executive officer and principal financial officer concluded that, at March 31, 2015, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files] or [removed: submits] [added: submit] under the Exchange Act is (i) recorded, processed, summarized, and reported on a timely basis, and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, [removed: 2015.][added: 2016.]

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, [removed: 2015,] [added: 2016,] which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on this evaluation, the principal executive officer and principal financial officer concluded that, at March 31, 2016, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file

The information required by this Item is incorporated herein by reference to the sections entitled "Proposal 1—Election of Directors" and "Executive Compensation—Section 16(a) Beneficial Ownership Reporting Compliance" in [removed: the Company's] [added: our] definitive Proxy Statement (the "Proxy Statement") for the Annual Meeting of Stockholders to be held in [removed: 2015.][added: 2016.]

[removed: The Company intends] [added: We intend] to file the Proxy Statement within 120 days after the end of the fiscal year (i.e. on or before July 29, [removed: 2015).][added: 2016).]

[removed: The Company's] [added: Our] Code of Business Conduct and Ethics applicable to its directors and all employees, including senior financial officers, is available on [removed: the Company's] [added: our] website at _www.take2games.com_.

If [removed: the Company makes] [added: we make] any amendment to [removed: its] [added: our] Code of Business Conduct and Ethics that is required to be disclosed pursuant to the Exchange Act, [removed: the Company] [added: we] will make such disclosures on its website.

The information required by this Item is incorporated herein by reference to the section entitled "Executive Compensation" in [removed: the Company's] [added: our] Proxy Statement.

The information required by this Item is incorporated herein by reference to the sections entitled "Voting Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in [removed: the Company's] [added: our] Proxy Statement.

The information required by this Item is incorporated herein by reference to the section entitled "Certain Relationships and Related Transactions" in [removed: the Company's] [added: our] Proxy Statement.

The information required by this Item is incorporated herein by reference to the section entitled "Independent Auditor Fee Information" in [removed: the Company's] [added: our] Proxy Statement.

See Index to Financial Statements on page [removed: 65] [added: 66] of this Report.

See Note [removed: 17] [added: 21] to the Consolidated Financial Statements.

| | 3.1.4 | | Certificate of Amendment of Restated Certificate of Incorporation, dated September 21, 2012 | | | 8-K | | | [removed: 8/24/2012] [added: 9/24/2012] | | 3.1 | | | |

| | 3.3 | | Certificate of Designation of Series B Preferred Stock, dated March [removed: 24,] [added: 26,] 2008 | | | [removed: 8-K] [added: 8-A12B] | | | 3/26/2008 | | [removed: 3.2] [added: 4.2] | | | |

| | [removed: 3.6] [added: 3.4] | | Amended and Restated Bylaws of Take-Two Interactive Software, Inc., effective as of December 2, 2014. | | | 8-K | | | 12/5/2014 | | 3.1 | | | |

| | 4.3 | | Indenture, dated as of June 18, 2013, by and between the Company and The Bank of New York Mellon, as [removed: Trustee] [added: Trustee, relating to 1.00% Convertible Notes] | | | 8-K | | | 6/18/2013 | | 4.1 | | | |

| | 4.5 | | Form of [removed: Global] [added: 1.00% Convertible] Note (included in Exhibit 4.4) | | | 8-K | | | 6/18/2013 | | 4.2 | | | |

| | [removed: 10.2] [added: 10.35] | | Amended and Restated Take-Two Interactive Software, Inc. 2009 Stock Incentive [removed: Plan+] [added: Plan, effective as of July 23, 2014] | | | 14A | | | [removed: 7/29/2013] [added: 7/28/2014] | | Annex A | | | |

| | [removed: 10.3] [added: 10.2] | | Form of Employee Restricted Stock Agreement+ | | | 10-Q | | | 6/5/2009 | | 10.2 | | | |

| | [removed: 10.4] [added: 10.3] | | Form of Non-Employee Director Restricted Stock Agreement+ | | | 10-Q | | | 6/5/2009 | | 10.3 | | | |

| | 10.5 | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | [removed: 8/1/2012] [added: 10/30/2013] | | 10.1 | | | |

| | 10.6 | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | 10/30/2013 | | [removed: 10.1] [added: 10.2] | | | |

| | 10.7 | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | 10/30/2013 | | [removed: 10.2] [added: 10.3] | | | |

| | 10.8 | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | 10/30/2013 | | [removed: 10.3] [added: 10.4] | | | |

| | 10.9 | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | 10/30/2013 | | [removed: 10.4] [added: 10.5] | | | |

| | [removed: 10.10] [added: 10.4] | | Form of Employee Restricted Unit Agreement+ | | | 10-Q | | | [removed: 10/30/2013] [added: 8/1/2012] | | [removed: 10.5] [added: 10.1] | | | |

| | 10.11 | | [added: First Amendment to] Employment Agreement, dated [removed: June 4,] [added: October 25,] 2010, between the Company and [removed: Seth Krauss+] [added: Lainie Goldstein+] | | | [removed: 10-Q] [added: 8-K] | | | [removed: 6/9/2010] [added: 10/25/2010] | | [removed: 10.2] [added: 10.1] | | | |

| | 10.12 | | [added: Second] Amendment to Employment Agreement, dated [removed: October 25, 2010,] [added: August 27, 2012,] between the Company and [removed: Seth Krauss+] [added: Lainie Goldstein+] | | | [removed: 8-K] [added: 10-Q] | | | [removed: 10/25/2010] [added: 10/31/2012] | | [removed: 10.2] [added: 10.6] | | | |

| | 10.13 | | [removed: Second Amendment to] Employment Agreement, dated [removed: September] [added: February] 14, [removed: 2012,] [added: 2008, by and] between the Company and [removed: Seth Krauss+] [added: Karl Slatoff+] | | | [removed: 10-Q] [added: 8-K] | | | [removed: 10/31/2012] [added: 2/15/2008] | | 10.3 | | | |

| | [removed: 10.14] [added: 10.10] | | Employment Agreement, dated May 12, 2010, between the Company and Lainie Goldstein+ | | | 8-K | | | 5/14/2010 | | 10.1 | | | |

| | [removed: 10.15] [added: 10.37] | | [removed: Amendment to] Employment [removed: Agreement,] [added: Agreement] dated [removed: October 25, 2010,] [added: January 28, 2015] between the Company and [removed: Lainie Goldstein+] [added: Daniel Emerson] | | | [removed: 8-K] [added: 10-Q] | | | [removed: 10/25/2010] [added: 2/6/2015] | | 10.1 | | | |

| | [removed: 10.18] [added: 10.16] | | Management [removed: Agreement] [added: Agreement, dated as of March 10, 2014, by and] between the Company and ZelnickMedia [removed: Corporation dated March 30, 2007+] [added: Corporation+] | | | 8-K | | | [removed: 4/4/2007] [added: 3/10/2014] | | [removed: 99.1] [added: 10.1] | | | |

| | [removed: 10.21] [added: 10.14] | | Management Agreement, dated as of May 20, 2011, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation+ | | | 8-K | | | 5/24/2011 | | 10.1 | | | |

| | [removed: 10.22] [added: 10.15] | | Amendment to Non-Qualified Stock Option Agreement with ZelnickMedia Corporation, dated as of November 18, 2013+ | | | 8-K | | | 11/18/2013 | | 10.1 | | | |

| | [removed: 10.24] [added: 10.17] | | Security Agreement dated as of July 3, 2007, made by each of the Grantors listed on the signature pages thereof and Wells Fargo Foothill, Inc. in its capacity as administrative agent for the Lender Group and the Bank Product Providers | | | 8-K | | | 7/9/2007 | | 10.2 | | | |

| | [removed: 10.25] [added: 10.18] | | Supplement to Security Agreement dated as of November 16, 2007, made by each of the grantors listed on the signature pages thereof and Wells Fargo Foothill, Inc. in its capacity as administrative agent for the Lender Group and the Bank Product Providers | | | 8-K | | | 11/20/2007 | | 99.2 | | | |

| | [removed: 10.26] [added: 10.19] | | Second Amended and Restated Credit Agreement, dated as of October 17, 2011, by and among the Company, each of its Subsidiaries identified on the signature pages thereto as Borrowers, each of its Subsidiaries identified on the signature pages thereto as Guarantors, the lender parties thereto, and Wells Fargo Capital Finance, Inc., as administrative agent | | | 8-K | | | 10/17/2011 | | 10.1 | | | |

| | [removed: 10.27] [added: 10.20] | | First Amendment to Second Amended and Restated Credit Agreement, dated June 12, 2013 | | | 10-K | | | 5/14/2014 | | 10.27 | | | |

| | [removed: 10.28] [added: 10.21] | | Second Amendment to Second Amended and Restated Credit Agreement, dated April 28, 2014 | | | 10-K | | | 5/14/2014 | | 10.28 | | | |

| | [removed: 10.29] [added: 10.22] | | Xbox 360 Publisher License Agreement dated November 17, [removed: 2006,] [added: 2005,] between Microsoft Licensing, GP and the Company* | | | 10-Q | | | 11/8/2011 | | 10.3 | | | |

| | [removed: 10.30] [added: 10.23] | | Amendment to Xbox 360 Publisher License Agreement, dated December 4, 2008, between Microsoft Licensing, GP and the Company* | | | 10-Q | | | 6/5/2009 | | 10.1 | | | |

| | [removed: 10.31] [added: 10.24] | | Amendment to the Xbox 360 Publisher License Agreement, dated November 22, 2011, between the Company and Microsoft Licensing, GP* | | | 10-Q | | | 2/3/2012 | | 10.1 | | | |

| | [removed: 10.32] [added: 10.25] | | Amendment to the Xbox 360 Publisher License Agreement, dated December 11, 2012, between the Company and Microsoft Licensing, GP* | | | 10-Q | | | 2/6/2013 | | 10.2 | | | |

| | [removed: 10.33] [added: 10.26] | | Amendment to the Xbox 360 Publisher License Agreement, dated November 13, 2013, between the Company and Microsoft Licensing, GP.* | | | 10-Q | | | 2/4/2014 | | 10.2 | | | |

| | [removed: 10.34] [added: 10.27] | | Xbox One Publisher License Agreement dated October 31, 2013, between Microsoft Licensing, GP and the Company* | | | 10-Q | | | 2/4/2014 | | 10.1 | | | |

| | [removed: 10.35] [added: 10.28] | | Global Playstation 3 Format Licensed Publisher Agreement, dated May 18, 2010, between Take-Two International S.A. and Sony Computer Entertainment Europe Limited* | | | 10-Q | | | 11/8/2011 | | 10.2 | | | |

| | [removed: 10.36] [added: 10.29] | | Global Playstation 3 Format Licensed Publisher Agreement, dated May 20, 2010, between the Company and Sony Computer Entertainment America LLC* | | | 10-Q | | | 11/8/2011 | | 10.1 | | | |

| | [removed: 10.37] [added: 10.30] | | Lease Agreement between the Company and Moklam Enterprises, Inc. dated July 1, 2002 | | | 10-Q | | | 9/16/2002 | | 10.2 | | | |

| | [removed: 10.38] [added: 10.31] | | Sixth Lease Modification Agreement, dated January 18, 2012, between the Company and Moklam Enterprises, Inc. | | | 10-K | | | 5/23/2012 | | 10.45 | | | |

| | [removed: 10.39] [added: 10.32] | | Seventh Lease Modification Agreement, dated April 8, 2014, between the Company and Moklam Enterprises, Inc. | | | 10-K | | | 5/14/2014 | | 10.39 | | | |

| | 10.36 | | Third Amendment to Second Amended and Restated Credit Agreement, dated August 18, 2014 | | | 8-K | | | 8/21/2014 | | 10.1 | | | |

| | 10.44 | | Ninth Lease Modification Agreement, dated as of December 15, 2015, by and between Take-Two Interactive Software, Inc. and Moklam Enterprises, Inc. | | | 10-Q | | | 2/4/2016 | | 10.1 | | | |

| | 10.45 | | Fourth Amendment to Second Amended and Restated Credit Agreement, May 21, 2015 | | | | | | | | | | X | |

| | 10.46 | | Fifth Amendment to Second Amended and Restated Credit Agreement, dated February 11, 2016 | | | 8-K | | | 2/12/2016 | | 10.1 | | | |

| | 10.47 | | Eighth Lease Modification Agreement, dated as of January 5, 2015, by and between Take-Two Interactive Software, Inc. and Moklam Enterprises, Inc. | | | | | | | | | | X | |

| | 10.48 | | Amendment to the Xbox One Publisher License Agreement, dated January 30, 2015, between Microsoft Corporation and the Company | | | | | | | | | | X | |

| | 10.49 | | Amendment No. 3 to the Xbox One Publisher License Agreement, dated August 13, 2015, between Microsoft Corporation and the Company | | | | | | | | | | X | |

| | 10.50 | | Amendment to the Restricted Stock Unit Agreement, dated as of March 30, 2016, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation | | | | | | | | | | X | |

Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Exchange Act Rule 24b-2

May 18, 2016

May 18, 2016

| | | 2016 | | | 2015 | | |

| Cash and cash equivalents | | $ | 798,742 | | $ | 911,120 | |

| Prepaid expenses and other | | | 53,269 | | | 54,057 | |

| Total current assets | | | 2,045,276 | | | 1,779,859 | |

| Other assets | | | 13,439 | | | 12,167 | |

| Total assets | | $ | 2,590,277 | | $ | 2,228,073 | |

| Long-term debt | | | 497,935 | | | 473,030 | |

| Total liabilities | | | 2,008,892 | | | 1,664,985 | |

| Accumulated other comprehensive loss | | | (37,896 | ) | | (30,624 | ) |

| Total liabilities and stockholders' equity | | $ | 2,590,277 | | $ | 2,228,073 | |

| Business reorganization | | | 71,285 | | | — | | | — | |

| Reclassification to earnings, net of taxes | | | (17 | ) | | — | | | — | |

| Change in fair value of effective cash flow hedges | | | (17 | ) | | 32 | | | 241 | |

| Available-for-sale securities: | | | | | | | | | | |

| Net unrealized gain (loss), net of taxes | | | 73 | | | (25 | ) | | — | |

| Reclassification to earnings for realized net loss, net of taxes | | | 36 | | | — | | | — | |

| Change in fair value of available-for-sale securities | | | 109 | | | (25 | ) | | — | |

| Change in bank time deposits | | | (182,383 | ) | | (87,500 | ) | | — | |

| Proceeds from available-for-sale securities | | | 43,314 | | | — | | | — | |

| Purchases of available-for-sale securities | | | (150,501 | ) | | (100,116 | ) | | — | |

| Other | | | (349 | ) | | — | | | (1,000 | ) |

| Tax payment related to net share settlements on restricted stock awards | | | (22,916 | ) | | — | | | — | |

| Tax benefit associated with stock awards | | | — | | | — | | | 1,421 | | | — | | | — | | | — | | | — | | | 1,421 | |

| Repurchased common stock | | | — | | | — | | | — | | | (954 | ) | | (26,552 | ) | | | | | — | | | (26,552 | ) |

| Net share settlement of restricted stock awards | | | (745 | ) | | (7 | ) | | (24,128 | ) | | — | | | — | | | — | | | — | | | (24,135 | ) |

| Balance, March 31, 2016 | | | 103,765 | | $ | 1,038 | | $ | 1,088,628 | | | (17,192 | ) | $ | (303,388 | ) | $ | (166,997 | ) | $ | (37,896 | ) | $ | 581,385 | |

One customer accounted for 20.7% and 13.3% of net revenues during the fiscal years ended March 31, 2016 and 2015, respectively.

Cash and Cash Equivalents

We write down inventory based on excess or obsolete

| | 3.4 | | Amended and Restated Bylaws of the Company | | | 8-K | | | 2/24/2010 | | 3.1 | | | |

| | 3.5 | | Amendment to Amended and Restated Bylaws of the Company | | | 8-K | | | 11/18/2010 | | 3(ii) | | | |

| | 10.16 | | Second Amendment to Employment Agreement, dated August 27, 2012, between the Company and Lainie Goldstein+ | | | 10-Q | | | 10/31/2012 | | 10.6 | | | |

| | 10.17 | | Employment Agreement, dated February 14, 2008, by and between the Company and Karl Slatoff+ | | | 8-K | | | 2/15/2008 | | 10.3 | | | |

| | 10.19 | | Amendment dated July 26, 2007 to the Management Agreement dated March 30, 2007 between the Company and ZelnickMedia Corporation+ | | | 8-K | | | 7/27/2007 | | 99.1 | | | |

| | 10.20 | | Second Amendment, dated February 14, 2008, to the Management Agreement dated March 30, 2007 between the Company and ZelnickMedia Corporation+ | | | 8-K | | | 2/15/2008 | | 10.1 | | | |

| | 10.23 | | Management Agreement, dated as of March 10, 2014, by and between the Company and ZelnickMedia Corporation.+ | | | 8-K | | | 3/10/2014 | | 10.1 | | | |

| | 10.40 | | Purchase Agreement, dated November 26, 2013, by and among the Company and the Icahn Group. | | | 8-K | | | 11/27/2014 | | 10.1 | | | |

| | 10.44 | | Third Amendment to Second Amended and Restated Credit Agreement, dated August 18, 2014, by and among the Company, each of its Subsidiaries identified on the signature pages thereto as Borrowers, each of its Subsidiaries identified on the signature pages thereto as Guarantors, the lender parties thereto, and Wells Fargo Capital Finance, llc, as arranger and administrative agent | | | 8-K | | | 8/21/2014 | | 10.1 | | | |

| | 10.45 | | Employment Agreement dated January 28, 2015 between the Company and Daniel Emerson | | | 10-Q | | | 2/6/2015 | | 10.1 | | | |

May 21, 2015

May 21, 2015

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Total current assets | | | 1,781,308 | | | 1,399,440 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Total assets | | $ | 2,231,100 | | $ | 1,799,630 | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Total liabilities | | | 1,668,012 | | | 997,824 | |

| Total liabilities and stockholders' equity | | $ | 2,231,100 | | $ | 1,799,630 | |

| | | Twelve Months Ended March 31, | | | | | | | | |

| Payments in connection with business combinations, net of cash acquired | | | — | | | (1,000 | ) | | — | |

| Cash and cash equivalents, beginning of year | | | 935,400 | | | 402,502 | | | 420,279 | |

| Balance, March 31, 2012 | | | 90,215 | | $ | 902 | | $ | 799,431 | | | — | | $ | — | | $ | (211,339 | ) | $ | 6,733 | | $ | 595,727 | |

| Issuance of common stock in connection with acquisition | | | 31 | | | — | | | 400 | | | — | | | — | | | — | | | — | | | 400 | |

Financial Instruments

Convertible Notes and its embedded option feature.

From time to time, we use hedging programs in an effort to mitigate the effect of currency exchange rate movements.

We use foreign currency forward contracts to mitigate foreign currency exchange rate risk associated with forecasted transactions involving non-functional currency denominated expenditures.

These contracts, which are designated and qualify as cash flow hedges, are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or liabilities on our Consolidated Balance Sheets.

The effective portion of gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of accumulated other comprehensive income (loss) in stockholders' equity.

The gross amount of the effective portion of gains or losses resulting from changes in the fair value of these hedges is subsequently reclassified into cost of goods sold or research and development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Consolidated Statements of Operations.

In the event that the underlying forecasted transactions do not occur, or it becomes probable that they will not occur, within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from accumulated other comprehensive income (loss) to interest and other, net, in our Consolidated Statements of Operations.

During the reporting periods presented, all forecasted transactions occurred, and therefore, there were no such gains or losses reclassified into interest and other, net.

We do not enter into derivative financial contracts for speculative or trading purposes.