Item 15. Exhibits, Financial Statement Schedules

**

(a)

The following documents are filed as part of this Report:

(i)

Financial Statements. See Index to Financial Statements on page 66 of this Report.

(ii)

Financial Statement Schedule. See Note 21 to the Consolidated Financial Statements.

(iii)

Index to Exhibits:

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	3.1		Restated Certificate of Incorporation			10-K			2/12/2004		3.1
	3.1.1		Certificate of Amendment of Restated Certificate of Incorporation, dated April 30, 1998			10-K			2/12/2004		3.1.2
	3.1.2		Certificate of Amendment of Restated Certificate of Incorporation, dated November 17, 2003			10-K			2/12/2004		3.1.3
	3.1.3		Certificate of Amendment of Restated Certificate of Incorporation, dated April 23, 2009.			8-K			4/23/2009		3.1
	3.1.4		Certificate of Amendment of Restated Certificate of Incorporation, dated September 21, 2012			8-K			9/24/2012		3.1
	3.2		Certificate of Designation of Series A Preferred Stock, dated March 11, 1998			10-K			2/12/2004		3.1.1
	3.3		Certificate of Designation of Series B Preferred Stock, dated March 26, 2008			8-A12B			3/26/2008		4.2
	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
	4.1		Indenture, dated as of November 16, 2011, by and between the Company and The Bank of New York Mellon, as Trustee, relating to 1.75% Convertible Notes			8-K			11/18/2011		4.1
	4.2		Form of 1.75% Convertible Note (included in Exhibit 4.1)			8-K			11/18/2011		4.1
	4.3		Indenture, dated as of June 18, 2013, by and between the Company and The Bank of New York Mellon, as Trustee, relating to 1.00% Convertible Notes			8-K			6/18/2013		4.1

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	4.4		Supplemental Indenture, dated as of June 18, 2013, between the Company and The Bank of New York Mellon, as Trustee, to Indenture, dated as of June 18, 2013, between the Company and The Bank of New York Mellon, as Trustee			8-K			6/18/2013		4.2
	4.5		Form of 1.00% Convertible Note (included in Exhibit 4.4)			8-K			6/18/2013		4.2
	10.1		Take-Two Interactive Software, Inc. Change in Control Employee Severance Plan+			8-K			3/7/2008		10.1
	10.2		Form of Employee Restricted Stock Agreement+			10-Q			6/5/2009		10.2
	10.3		Form of Non-Employee Director Restricted Stock Agreement+			10-Q			6/5/2009		10.3
	10.4		Form of Employee Restricted Unit Agreement+			10-Q			8/1/2012		10.1
	10.5		Form of Employee Restricted Unit Agreement+			10-Q			10/30/2013		10.1
	10.6		Form of Employee Restricted Unit Agreement+			10-Q			10/30/2013		10.2
	10.7		Form of Employee Restricted Unit Agreement+			10-Q			10/30/2013		10.3
	10.8		Form of Employee Restricted Unit Agreement+			10-Q			10/30/2013		10.4
	10.9		Form of Employee Restricted Unit Agreement+			10-Q			10/30/2013		10.5
	10.10		Employment Agreement, dated May 12, 2010, between the Company and Lainie Goldstein+			8-K			5/14/2010		10.1
	10.11		First Amendment to Employment Agreement, dated October 25, 2010, between the Company and Lainie Goldstein+			8-K			10/25/2010		10.1
	10.12		Second Amendment to Employment Agreement, dated August 27, 2012, between the Company and Lainie Goldstein+			10-Q			10/31/2012		10.6
	10.13		Employment Agreement, dated February 14, 2008, by and between the Company and Karl Slatoff+			8-K			2/15/2008		10.3
	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

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	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
	10.16		Management Agreement, dated as of March 10, 2014, by and between the Company and ZelnickMedia Corporation+			8-K			3/10/2014		10.1
	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
	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
	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
	10.20		First Amendment to Second Amended and Restated Credit Agreement, dated June 12, 2013			10-K			5/14/2014		10.27
	10.21		Second Amendment to Second Amended and Restated Credit Agreement, dated April 28, 2014			10-K			5/14/2014		10.28
	10.22		Xbox 360 Publisher License Agreement dated November 17, 2005, between Microsoft Licensing, GP and the Company*			10-Q			11/8/2011		10.3
	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
	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

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	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
	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
	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
	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
	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
	10.30		Lease Agreement between the Company and Moklam Enterprises, Inc. dated July 1, 2002			10-Q			9/16/2002		10.2
	10.31		Sixth Lease Modification Agreement, dated January 18, 2012, between the Company and Moklam Enterprises, Inc.			10-K			5/23/2012		10.45
	10.32		Seventh Lease Modification Agreement, dated April 8, 2014, between the Company and Moklam Enterprises, Inc.			10-K			5/14/2014		10.39
	10.33		Amendment to the Xbox One Publisher License Agreement, dated May 7, 2014, between Microsoft Licensing, GP and the Company*			10-Q			8/6/2014		10.1
	10.34		Amendment to the Xbox 360 Publisher License Agreement, dated September 30, 2014, between Microsoft Corporation and the Company*			10-Q			10/30/2014		10.1
	10.35		Amended and Restated Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan, effective as of July 23, 2014			14A			7/28/2014		Annex A
	10.36		Third Amendment to Second Amended and Restated Credit Agreement, dated August 18, 2014			8-K			8/21/2014		10.1

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	10.37		Employment Agreement dated January 28, 2015 between the Company and Daniel Emerson			10-Q			2/6/2015		10.1
	10.38		Amendment to the Restricted Stock Agreement dated as of May 20, 2011 between the Company and ZelnickMedia Corporation, effective as of December 2, 2014			10-Q			2/6/2015		10.2
	10.39		Amendment to the Performance Based Restricted Stock Agreement dated as of May 20, 2011 between the Company and ZelnickMedia Corporation, effective as of December 2, 2014			10-Q			2/6/2015		10.3
	10.40		Second Amendment to the Restricted Stock Agreement dated as of May 20, 2011 between the Company and ZelnickMedia Corporation, effective as of April 24, 2015			S-3ASR			5/20/2015		10.5
	10.41		Second Amendment to the Performance Based Restricted Stock Agreement dated as of May 20, 2011 between the Company and ZelnickMedia Corporation, effective as of April 24, 2015			S-3ASR			5/20/2015		10.6
	10.42		Restricted Unit Agreement, dated as of May 20, 2015, by and between the Company and ZelnickMedia Corporation			S-3ASR			5/20/2015		10.2
	10.43		Amended and Restated Restricted Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2009 Incentive Stock Plan, dated as of June 30, 2015			10-Q			8/10/2015		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

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	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
	21.1		Subsidiaries of the Company										X
	23.1		Consent of Ernst & Young LLP										X
	31.1		Chief Executive Officer Certification Pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002										X
	31.2		Chief Financial Officer Certification Pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002										X
	32.1		Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002										X
	32.2		Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002										X
	101.INS		XBRL Instance Document.										X
	101.SCH		XBRL Taxonomy Extension Schema Document.										X
	101.CAL		XBRL Taxonomy Calculation Linkbase Document.										X
	101.LAB		XBRL Taxonomy Label Linkbase Document.										X
	101.PRE		XBRL Taxonomy Presentation Linkbase Document.										X

					Incorporated by Reference
	Exhibit Number		Exhibit Description		Form			Filing Date			Exhibit		Filed Herewith
	101.DEF		XBRL Taxonomy Extension Definition Document.										X

Represents a management contract or compensatory plan or arrangement.

Portions thereof were omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment that was granted in accordance with Exchange Act Rule 24b-2.

**

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

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2016 and 2015, (ii) Consolidated Statements of Operations for the fiscal years ended March 31, 2016, 2015 and 2014, (iii) Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended March 31, 2016, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2016, 2015 and 2014, (v) Consolidated Statements of Stockholders' Equity for the fiscal years ended March 31, 2016, 2015 and 2014; and (vi) Notes to the Consolidated Financial Statements.

** TAKE-TWO INTERACTIVE SOFTWARE, INC. FISCAL YEAR ENDED MARCH 31, 2016**

INDEX TO FINANCIAL STATEMENTS

		Page
Reports of Independent Registered Public Accounting Firm		67
Consolidated Balance Sheets—At March 31, 2016 and 2015		69
Consolidated Statements of Operations—For the fiscal years ended March 31, 2016, 2015 and 2014		70
Consolidated Statements of Comprehensive (Loss) Income—For the fiscal years ended March 31, 2016, 2015 and 2014		71
Consolidated Statements of Cash Flows—For the fiscal years ended March 31, 2016, 2015 and 2014		72
Consolidated Statements of Stockholders' Equity—For the fiscal years ended March 31, 2016, 2015 and 2014		73
Notes to the Consolidated Financial Statements		74

(All other items in this report are inapplicable)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Take-Two Interactive Software, Inc.

We have audited the accompanying consolidated balance sheets of Take-Two Interactive Software, Inc. as of March 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders' equity for each of the three years in the period ended March 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Take-Two Interactive Software, Inc. at March 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended March 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Take-Two Interactive Software, Inc.'s internal control over financial reporting as of March 31, 2016, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 18, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

May 18, 2016

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM **

The Board of Directors and Stockholders of Take-Two Interactive Software, Inc.

We have audited Take-Two Interactive Software, Inc.'s internal control over financial reporting as of March 31, 2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Take-Two Interactive Software, Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Take-Two Interactive Software, Inc. maintained, in all material respects, effective internal control over financial reporting as of March 31, 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Take-Two Interactive Software, Inc. as of March 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders' equity for each of the three years in the period ended March 31, 2016 of Take-Two Interactive Software, Inc. and our report dated May 18, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

May 18, 2016

** TAKE-TWO INTERACTIVE SOFTWARE, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)**

		March 31,
		2016			2015
ASSETS
Current assets:
Cash and cash equivalents		$	798,742		$	911,120
Short-term investments			470,820			186,929
Restricted cash			261,169			169,678
Accounts receivable, net of allowances of $45,552 and $70,471 at March 31, 2016 and 2015, respectively			168,527			217,860
Inventory			15,888			20,051
Software development costs and licenses			178,387			163,385
Deferred cost of goods sold			98,474			56,779
Prepaid expenses and other			53,269			54,057
​	​	​	​	​	​	​	​
Total current assets			2,045,276			1,779,859
​	​	​	​	​	​	​	​
Fixed assets, net			77,127			69,792
Software development costs and licenses, net of current portion			214,831			124,329
Deferred cost of goods sold, net of current portion			17,915			19,869
Goodwill			217,080			217,288
Other intangibles, net			4,609			4,769
Other assets			13,439			12,167
​	​	​	​	​	​	​	​
Total assets		$	2,590,277		$	2,228,073
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	30,448		$	38,789
Accrued expenses and other current liabilities			607,479			444,738
Deferred revenue			582,484			482,733
​	​	​	​	​	​	​	​
Total current liabilities			1,220,411			966,260
​	​	​	​	​	​	​	​
Long-term debt			497,935			473,030
Non-current deferred revenue			216,319			164,618
Other long-term liabilities			74,227			61,077
​	​	​	​	​	​	​	​
Total liabilities			2,008,892			1,664,985
​	​	​	​	​	​	​	​
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized: no shares issued and outstanding at March 31, 2016 and 2015			—			—
Common stock, $.01 par value, 200,000 shares authorized; 103,765 and 104,594 shares issued and 86,573 and 88,356 outstanding at March 31, 2016 and 2015, respectively			1,038			1,046
Additional paid-in capital			1,088,628			1,028,197
Treasury stock, at cost; 17,192 and 16,238 common shares at March 31, 2016 and 2015, respectively			(303,388	)		(276,836	)
Accumulated deficit			(166,997	)		(158,695	)
Accumulated other comprehensive loss			(37,896	)		(30,624	)
​	​	​	​	​	​	​	​
Total stockholders' equity			581,385			563,088
​	​	​	​	​	​	​	​
Total liabilities and stockholders' equity		$	2,590,277		$	2,228,073
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

See accompanying Notes.

** TAKE-TWO INTERACTIVE SOFTWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)**

		Fiscal Year Ended March 31,
		2016			2015			2014
Net revenue		$	1,413,698		$	1,082,938		$	2,350,568
Cost of goods sold			813,873			794,867			1,414,327
​	​	​	​	​	​	​	​	​	​	​
Gross profit			599,825			288,071			936,241
Selling and marketing			198,309			235,341			240,996
General and administrative			192,452			175,093			161,374
Research and development			119,807			115,043			105,256
Business reorganization			71,285			—			—
Depreciation and amortization			28,800			21,057			13,359
​	​	​	​	​	​	​	​	​	​	​
Total operating expenses			610,653			546,534			520,985
​	​	​	​	​	​	​	​	​	​	​
(Loss) income from operations			(10,828	)		(258,463	)		415,256
Interest and other, net			(30,205	)		(31,893	)		(33,553	)
Gain on long-term investments, net			2,683			17,476			—
Loss on extinguishment of debt			—			—			(9,014	)
Gain on convertible note hedge and warrants, net			—			—			3,461
​	​	​	​	​	​	​	​	​	​	​
(Loss) income from continuing operations before income taxes			(38,350	)		(272,880	)		376,150
(Benefit from) provision for income taxes			(30,048	)		6,590			14,459
​	​	​	​	​	​	​	​	​	​	​
(Loss) income from continuing operations			(8,302	)		(279,470	)		361,691
Loss from discontinued operations, net of taxes			—			—			(86	)
​	​	​	​	​	​	​	​	​	​	​
Net (loss) income		$	(8,302	)	$	(279,470	)	$	361,605
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
(Loss) earnings per share:
Continuing operations		$	(0.10	)	$	(3.48	)	$	3.79
Discontinued operations			—			—			—
​	​	​	​	​	​	​	​	​	​	​
Basic (loss) earnings per share		$	(0.10	)	$	(3.48	)	$	3.79
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Continuing operations		$	(0.10	)	$	(3.48	)	$	3.20
Discontinued operations			—			—			—
​	​	​	​	​	​	​	​	​	​	​
Diluted (loss) earnings per share		$	(0.10	)	$	(3.48	)	$	3.20
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

See accompanying Notes.

** TAKE-TWO INTERACTIVE SOFTWARE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands)**

		Fiscal Year Ended March 31,
		2016			2015			2014
Net (loss) income		$	(8,302	)	$	(279,470	)	$	361,605
Other comprehensive (loss) income:
Foreign currency translation adjustment			(7,364	)		(32,747	)		6,447
Cash flow hedges:
Change in unrealized gains, net of taxes			—			32			241
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	)		—
​	​	​	​	​	​	​	​	​	​	​
Other comprehensive (loss) income			(7,272	)		(32,740	)		6,688
​	​	​	​	​	​	​	​	​	​	​
Comprehensive (loss) income		$	(15,574	)	$	(312,210	)	$	368,293
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

See accompanying Notes.

** TAKE-TWO INTERACTIVE SOFTWARE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)**

		Fiscal Year Ended March 31,
		2016			2015			2014
Operating activities:
Net (loss) income		$	(8,302	)	$	(279,470	)	$	361,605
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses			134,472			133,453			265,533
Depreciation and amortization			28,800			21,057			13,359
Loss from discontinued operations			—			—			86
Stock-based compensation			69,996			65,246			78,118
Deferred income taxes			(270	)		2,279			(19,036	)
Amortization of discount on Convertible Notes			23,457			22,026			22,801
Amortization of debt issuance costs			1,567			1,663			1,947
Gain on long-term investments, net			(2,683	)		(17,476	)		—
Loss on extinguishment of debt			—			—			9,014
Gain on convertible note hedge and warrants, net			—			—			(3,461	)
Amortization and impairment of intellectual property			160			344			3,558
Other, net			2,588			2,068			(208	)
Changes in assets and liabilities:
Restricted cash			(91,491	)		24,161			(186,350	)
Accounts receivable			49,348			(164,717	)		136,453
Inventory			3,809			9,729			438
Software development costs and licenses			(219,217	)		(188,772	)		(192,357	)
Prepaid expenses, other current and other non-current assets			(12,272	)		5,398			(18,424	)
Deferred revenue			152,325			568,028			34,276
Deferred cost of goods sold			(41,144	)		(70,788	)		—
Accounts payable, accrued expenses and other liabilities			170,162			78,585			194,228
Net cash used in discontinued operations			—			—			(1,318	)
​	​	​	​	​	​	​	​	​	​	​
Net cash provided by operating activities			261,305			212,814			700,262
​	​	​	​	​	​	​	​	​	​	​
Investing activities:
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	)		—
Purchases of fixed assets			(37,280	)		(49,501	)		(29,813	)
Purchase of long-term investments			—			(5,000	)		—
Proceeds from sale of long-term investment			2,683			21,976			—
Other			(349	)		—			(1,000	)
​	​	​	​	​	​	​	​	​	​	​
Net cash used in investing activities			(324,516	)		(220,141	)		(30,813	)
​	​	​	​	​	​	​	​	​	​	​
Financing activities:
Tax payment related to net share settlements on restricted stock awards			(22,916	)		—			—
Repurchase of common stock			(26,552	)		—			(276,836	)
Excess tax benefit from stock-based compensation			1,421			928			—
Proceeds from issuance of 1.00% Convertible Notes			—			—			283,188
Payment for extinguishment of 4.375% Convertible Notes			—			—			(165,999	)
Proceeds from termination of convertible note hedge transactions			—			—			84,429
Payment for termination of convertible note warrant transactions			—			—			(55,651	)
Payment of debt issuance costs for the issuance of 1.00% Convertible Notes			—			—			(2,815	)
​	​	​	​	​	​	​	​	​	​	​
Net cash (used in) provided by financing activities			(48,047	)		928			(133,684	)
​	​	​	​	​	​	​	​	​	​	​
Effects of foreign currency exchange rates on cash and cash equivalents			(1,120	)		(17,881	)		(2,867	)
​	​	​	​	​	​	​	​	​	​	​
Net (decrease) increase in cash and cash equivalents			(112,378	)		(24,280	)		532,898
Cash and cash equivalents, beginning of year			911,120			935,400			402,502
​	​	​	​	​	​	​	​	​	​	​
Cash and cash equivalents, end of year		$	798,742		$	911,120		$	935,400
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Supplemental data:
Interest paid		$	7,626		$	7,657		$	9,095
Income taxes (refunded) paid		$	(26,223	)	$	9,749		$	10,025

See accompanying Notes.

** TAKE-TWO INTERACTIVE SOFTWARE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands)**

																				Accumulated Other Comprehensive (Loss) Income
		Common Stock									Treasury Stock						(Accumulated Deficit) / Retained Earnings
		Additional Paid-in Capital			Total Stockholders' Equity
		Shares			Amount			Shares			Amount
Balance, March 31, 2013			93,743		$	937		$	832,460			—		$	—		$	(240,830	)	$	(4,572	)	$	587,995
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net income			—			—			—			—			—			361,605			—			361,605
Change in cumulative foreign currency translation adjustment			—			—			—			—			—			—			6,447			6,447
Change in unrealized gains on derivative instruments, net			—			—			—			—			—			—			241			241
Exercise of stock options			557			6			(6	)		—			—			—			—			—
Stock-based compensation			—			—			80,285			—			—			—			—			80,285
Tax benefit associated with stock awards			—			—			7,416			—			—			—			—			7,416
Issuance of 1.00% Convertible Notes			—			—			35,784			—			—			—			—			35,784
Extinguishment of 4.375% Convertible Notes			3,217			32			(26,480	)		—			—			—			—			(26,448	)
Termination of convertible note hedge transactions			—			—			67,170			—			—			—			—			67,170
Termination of convertible note warrant transactions			—			—			(41,853	)		—			—			—			—			(41,853	)
Issuance of restricted stock, net of forfeitures and cancellations			7,639			77			(77	)		—			—			—			—			—
Repurchased common stock			—			—			—			(16,238	)		(276,836	)		—			—			(276,836	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance, March 31, 2014			105,156			1,052			954,699			(16,238	)		(276,836	)		120,775			2,116			801,806
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net loss			—			—			—			—			—			(279,470	)		—			(279,470	)
Change in cumulative foreign currency translation adjustment			—			—			—			—			—			—			(32,747	)		(32,747	)
Change in unrealized gains on derivative instruments, net			—			—			—			—			—			—			32			32
Net unrealized loss on available-for-sale securities, net of taxes			—			—			—			—			—			—			(25	)		(25	)
Stock-based compensation			—			—			72,579			—			—			—			—			72,579
Tax benefit associated with stock awards			—			—			928			—			—			—			—			928
Issuance of restricted stock, net of forfeitures and cancellations			(570	)		(6	)		(108	)		—			—			—			—			(114	)
Issuance of common stock in connection with acquisition			8			—			99			—			—			—			—			99
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance, March 31, 2015			104,594			1,046			1,028,197			(16,238	)		(276,836	)		(158,695	)		(30,624	)		563,088
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net loss			—			—			—			—			—			(8,302	)		—			(8,302	)
Change in cumulative foreign currency translation adjustment			—			—			—			—			—			—			(7,364	)		(7,364	)
Change in unrealized gains on derivative instruments, net			—			—			—			—			—			—			(17	)		(17	)
Net unrealized gain on available-for-sale securities, net of taxes			—			—			—			—			—			—			109			109
Stock-based compensation			—			—			83,137			—			—			—			—			83,137
Tax benefit associated with stock awards			—			—			1,421			—			—			—			—			1,421
Issuance of restricted stock, net of forfeitures and cancellations			(84	)		(1	)		1			—			—			—			—			—
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
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Take-Two Interactive Software, Inc. (the "Company," "we," "us," or similar pronouns) was incorporated in the state of Delaware in 1993. We are a leading developer, publisher and marketer of interactive entertainment for consumers around the globe. The Company develops and publishes products through its two wholly-owned labels Rockstar Games and 2K. Our products are designed for console systems and personal computers, including smart phones and tablets, and are delivered through physical retail, digital download, online platforms and cloud streaming services.

**Principles of Consolidation **

The Consolidated Financial Statements include the financial statements of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

**Reclassifications **

Certain immaterial amounts in the financial statements of the prior years have been reclassified to conform to the current year presentation for comparative purposes.

**Use of Estimates **

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses during the reporting periods. Our most significant estimates and assumptions relate to the recoverability of software development costs and prepaid royalties, licenses and intangibles, valuation of inventories, realization of deferred income taxes, the adequacy of price protection, allowances for sales returns and doubtful accounts, accrued liabilities, the service period for deferred net revenue and related cost of goods sold, fair value estimates, the valuation of stock-based compensation, and assumptions used in our goodwill and short-term investments impairment tests. These estimates generally involve complex issues and require us to make judgments, involve analysis of historical and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ significantly from these estimates. The Company considers transactions or events that occur after the balance sheet date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.

**Concentration of Credit Risk and Accounts Receivable **

We maintain cash balances at several major financial institutions. While we attempt to limit credit exposure with any single institution, balances often exceed insurable amounts.

If the financial condition and operations of our customers deteriorate, our risk of collection could increase substantially. A majority of our trade receivables are derived from sales to major retailers and distributors. Our five largest customers accounted for 58.9%, 64.6% and 39.4% of net revenue during the fiscal years ended March 31, 2016, 2015 and 2014, respectively. One customer accounted for 20.7% and 13.3% of net revenues during the fiscal years ended March 31, 2016 and 2015, respectively. A second customer accounted for 15.5% and 11.7% of net revenue during the fiscal years ended March 31, 2016 and 2015, respectively. A third customer accounted for 21.0% and 18.4% of net revenue during the fiscal years ended March 31, 2015 and 2014, respectively, and a fourth customer accounted for 10.4% of net revenue during

the fiscal year ended March 31, 2015. As of March 31, 2016 and 2015, five customers accounted for 73.9% and 63.9% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 64.1% and 54.5% of such balances at March 31, 2016 and 2015, respectively. 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 accounted for 18.5%, 18.4% and 17.6% of our gross accounts receivable as of March 31, 2015. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2016 and 2015. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers and our past collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit risk.

**Cash and Cash Equivalents **

We consider all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Our restricted cash balance is primarily related to a dedicated account limited to the payment of certain royalty obligations.

**Short-term Investments **

Short-term investments designated as available-for-sale securities are carried at fair value, which is based on quoted market prices for such securities, if available, or is estimated on the basis of quoted market prices of financial instruments with similar characteristics. Investments with original maturities greater than 90 days and remaining maturities of less than one year are normally classified within short-term investments. In addition, investments with maturities beyond one year at the time of purchase that are highly liquid in nature and represent the investment of cash that is available for current operations are classified as short-term investments.

Unrealized gains and losses of the Company's available-for-sale securities are excluded from earnings and are reported as a component of other comprehensive (loss) income, net of tax, until the security is sold, the security has matured, or the Company determines that the fair value of the security has declined below its adjusted cost basis and the decline is other-than-temporary. Realized gains and losses on short-term investments are calculated based on the specific identification method and would be reclassified from accumulated other comprehensive loss to interest and other, net.

Short-term investments are evaluated for impairment quarterly. The Company considers various factors in determining whether it should recognize an impairment charge, including the credit quality of the issuer, the duration that the fair value has been less than the adjusted cost basis, the severity of the impairment, the reason for the decline in value, and our intent to sell and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. If the Company concludes that an investment is other-than-temporarily impaired, it recognizes an impairment charge at that time in the Consolidated Statements of Operations. In determining whether the decline in fair value is other-than-temporary requires management judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is subject to market price volatility until they are sold.

**Inventory **

Inventory consists of materials, including manufacturing royalties paid to console manufacturers, and is stated at the lower of weighted average cost or net realizable value. Estimated product returns are included in the inventory balance at their cost. We regularly review inventory quantities on-hand and in the retail channels and record an inventory provision for excess or obsolete inventory based on the future expected demand for our products. Significant changes in demand for our products would affect management's estimates in establishing our inventory provision. We write down inventory based on excess or obsolete

inventories determined primarily by future anticipated demand for our products. Inventory write-downs are measured as the difference between the cost of the inventory and market value, based upon assumptions about future demand that are inherently difficult to assess.

**Sale of Long-Term Investment **

We held an investment in Twitch Interactive, Inc.'s ("Twitch") Class C Preferred stock, which was accounted for under the cost method of accounting. In connection with the sale of Twitch, we recognized a pretax gain of $2,683 and $18,976, during the fiscal years ended March 31, 2016 and 2015, respectively. The pretax gain is presented within "Gain on long-term investments, net" in our Consolidated Statements of Operations.

**Software Development Costs and Licenses **

Capitalized software development costs include direct costs incurred for internally developed titles and payments made to third-party software developers under development agreements.

We capitalize internal software development costs (including stock-based compensation, specifically identifiable employee payroll expense and incentive compensation costs related to the completion and release of titles), third-party production and other content costs, subsequent to establishing technological feasibility of a software title. Technological feasibility of a product includes the completion of both technical design documentation and game design documentation. Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established. For products where proven technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a product by product basis.

We enter into agreements with third-party developers that require us to make payments for game development and production services. In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished game title as well as, in some cases, the underlying intellectual property rights. Such agreements typically allow us to fully recover these payments to the developers at an agreed upon royalty rate earned on the subsequent sales of such software, net of any agreed upon costs. Prior to establishing technological feasibility of a product we record any costs incurred by third-party developers as research and development expenses. Subsequent to establishing technological feasibility of a product we capitalize all development and production service payments to third-party developers as software development costs and licenses. We typically enter into agreements with third-party developers after completing the technical design documentation for our products and therefore record the design costs leading up to a signed development contract as research and development expense. When we contract with third-party developers, we generally select those that have proven technology and experience in the genre of the software being developed, which often allows for the establishment of technological feasibility early in the development cycle. In instances where the documentation of the design and technology are not in place prior to an executed contract, we monitor the software development process and require our third-party developers to adhere to the same technological feasibility standards that apply to our internally developed products.

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.

Amortization of capitalized software development costs and licenses commences when a product is released and is recorded on a title-by-title basis in cost of goods sold. For capitalized software development

costs, amortization is calculated using (1) the proportion of current year revenues to the total revenues expected to be recorded over the life of the title or (2) the straight-line method over the remaining estimated useful life of the title, whichever is greater. For capitalized licenses, amortization is calculated as a ratio of (1) current period revenues to the total revenues expected to be recorded over the remaining life of the title or (2) the contractual royalty rate based on actual net product sales as defined in the licensing agreement, whichever is greater.

We evaluate the future recoverability of capitalized software development costs and licenses on a quarterly basis. Recoverability is primarily assessed based on the actual title's performance. For products that are scheduled to be released in the future, recoverability is evaluated based on the expected performance of the specific products to which the cost or license relates. We utilize a number of criteria in evaluating expected product performance, including: historical performance of comparable products developed with comparable technology; market performance of comparable titles; orders for the product prior to its release; general market conditions; and, past performance of the franchise. When we determine that the value of the title is unlikely to be recovered by product sales, capitalized costs are charged to cost of goods sold in the period in which such determination is made.

We have profit and unit sales based internal royalty programs that allow selected employees to each participate in the success of software titles that they assist in developing. Royalties earned under this program are recorded as a component of cost of goods sold in the period earned.

**Fixed Assets, net **

Office equipment, furniture and fixtures are depreciated using the straight-line method over their estimated useful life of five years. Computer equipment and software are generally depreciated using the straight-line method over three to five years. Leasehold improvements are amortized over the lesser of the term of the related lease or seven years. The cost of additions and betterments are capitalized, and repairs and maintenance costs are charged to operations, in the periods incurred. When depreciable assets are retired or sold, the cost and related allowances for depreciation are removed from the accounts and the gain or loss is recognized. The carrying amounts of these assets are recorded at historical cost.

**Goodwill and Intangible Assets **

Goodwill is the excess of purchase price paid over identified intangible and tangible net assets of acquired companies. Intangible assets consist of trademarks, intellectual property, non-compete agreements, customer lists and acquired technology. Certain intangible assets acquired in a business combination are recognized as assets apart from goodwill.

We use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information.

We test our goodwill for impairment annually, at the beginning of August, or more frequently, if events and circumstances indicate the fair value of a reporting unit may be below its carrying amount. A reporting unit is defined as an operating segment or one level below an operating segment. We have determined that we operate in one reporting unit which is our operating segment. In the evaluation of goodwill for impairment, we have the option to first perform a qualitative assessment to determine if the fair value of its reporting unit is more likely than not (i.e., a likelihood of more than 50%) less than the carrying value before performing the two-step impairment test. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. If the two-step impairment test is utilized to test

goodwill for impairment, step one compares the fair value of the reporting unit to its carrying value. In performing the quantitative assessment in step-one, we measure the fair value of the reporting unit using a combination of the income approach, which uses discounted cash flows, and the market approach, which uses market capitalization and comparable companies' data. Each step requires us to make judgments and involves the use of significant estimates and assumptions. These estimates and assumptions include long-term growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates based on our weighted average cost of capital, future economic and market conditions and the determination of appropriate market comparables. Our estimates for market growth are based on historical data, various internal estimates and observable external sources when available, and are based on assumptions that are consistent with the plans and estimates we use to manage the underlying business. If the carrying value of the reporting unit exceeds its fair value, the goodwill of that reporting unit is potentially impaired and step two must be performed. Step two compares the carrying value of the reporting unit's goodwill to its implied fair value (i.e., fair value of reporting unit less the fair value of the unit's assets and liabilities, including identifiable intangible assets). If the implied fair value of goodwill is less than the carrying amount of goodwill, an impairment is recognized. Based on our annual impairment assessment process for goodwill, no impairments were recorded during the fiscal years ended March 31, 2016, 2015 or 2014.

**Long-lived Assets **

We review all long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amount of an asset or asset group may not be recoverable. We compare the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, we record an impairment charge for the difference between the carrying amount of the asset and its fair value. The estimated fair value is generally measured by discounting expected future cash flows using our incremental borrowing rate or fair value, if available. As of March 31, 2016 no indicators of impairment existed.

**Derivatives and Hedging **

We transact business in various foreign currencies and have significant sales and purchase transactions denominated in foreign currencies, subjecting us to foreign currency exchange rate risk. From time to time, we carry out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge our exposure in currency exchange rate movements. We recognize derivative instruments as either assets or liabilities on our Consolidated Balance Sheets and we measure those instruments at fair value. The changes in fair value of derivatives that are not designated as hedges are recognized currently in earnings as interest and other, net in our Consolidated Statements of Operations. If a derivative meets the definition of a cash flow hedge and is so designated, the effective portion of changes in the fair value of the derivative are recognized, as a component of other comprehensive (loss) income while the ineffective portion of the changes in fair value is recorded currently in earnings as interest and other, net in our Consolidated Statements of Operations. Amounts included in Accumulated other comprehensive (loss) income for cash flow hedges are reclassified into earnings in the same period that the hedged item is recognized in into cost of goods sold or research and development expenses, as appropriate.

**Income Taxes **

We record a tax provision for the anticipated tax consequences of the reported results of operations. Our provision for income taxes is computed using the asset and liability method, under which deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. The

effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment.

Valuation allowances are established when we determine that it is more likely than not that such deferred tax assets will not be realized. We do not record income tax expense related to foreign withholding taxes or United States income taxes which may become payable upon the repatriation of undistributed earnings of foreign subsidiaries, as such earnings are expected to be reinvested indefinitely outside of the United States.

We use 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. The effect of these revisions is recorded in income tax expense or benefit in the period in which they become known.

**Revenue Recognition **

We recognize revenue on the sales of software products upon the transfer of title and risk of loss to our customers. Accordingly, we recognize revenue for software titles when there is (1) persuasive evidence that an arrangement with the customer exists, which is generally based on a customer purchase order, (2) the product is delivered, (3) the selling price is fixed or determinable and (4) collection of the customer receivable is deemed probable. Certain products are sold to customers with a street date (i.e., the earliest date these products may be sold by retailers). For these products we recognize revenue on the later of the street date or the sale date. In addition, some of our software products are sold as full game digital downloads and digital add-on content for which the consumer takes possession of the digital content for a fee. Revenue from product downloads is generally recognized when the download is made available (assuming all other recognition criteria are met).

In providing credit terms to our customers, our payment arrangements typically provide net 30 and 60 day terms. Advances received for licensing and exclusivity arrangements are reported on our Consolidated Balance Sheets as deferred revenue until we meet our performance obligations, at which point we recognize the revenue.

For some of our software products, we enter into multiple element revenue arrangements in which we may provide a combination of full game software, online multi-player functionality, and related post-contract 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. In conjunction with our evaluation, we consider such factors as the significance of the development effort, the nature of online features, the extent of anticipated marketing focus on online features, the significance of the online features to the consumers' anticipated overall gameplay experience, and the significance and length of time of our post sale obligations to consumers. Determining whether PCS is significant for a particular game is subjective and requires management's judgment.

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. When VSOE of fair value does not exist for all of the elements in the arrangement, ASC 985-605 requires either the use of the residual method or the deferral of revenue until the earlier point at which VSOE of fair value exists for any undelivered element or until only one undelivered element remains. For arrangements that require the deferral of revenue, the cost of goods sold is deferred and recognized as the related net revenue is recognized. Deferred cost of goods sold includes

product costs and licenses. 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. When software products provide PCS determined to be significant and as we are unable to establish VSOE for that deliverable, we defer all of the software-related revenues and the related cost of goods sold and recognize the software-related revenues and the related cost of goods sold ratably over the estimated service period of the title (assuming all other recognition criteria are met).

Certain of our games provide consumers with the option to purchase virtual currency to use in the game to acquire virtual goods. We currently recognize revenue from the sale of virtual currency, using the game-based model, ratably over the estimated remaining life of the game.

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 $40,176 and income from operations of $35,767 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.

Revenue is recognized after deducting estimated price protection, reserves for returns and other allowances. In circumstances when we do not have a reliable basis to estimate price protection, returns and other allowances or are unable to determine that collection of a receivable is probable, we defer the revenue until such time as we can reliably estimate any related returns and allowances and determine that collection of the receivable is probable.

**Price protection and Allowances for Returns **

We grant price protection and accept returns in connection with our distribution arrangements with customers. Following reductions in the price of our products, we grant price protection to permit customers to take credits against amounts they owe us with respect to merchandise unsold by them. Our customers must satisfy certain conditions to entitle them to receive price protection or return products, including compliance with applicable payment terms and confirmation of field inventory levels.

Generally, our distribution arrangements with customers do not give them the right to return titles or to cancel firm orders. However, we occasionally accept returns from our customers for stock balancing and make accommodations to customers, which include credits and returns, when demand for specific titles falls below expectations.

We make estimates of future price protection and product returns related to current period product revenue. We estimate the amount of future price protection and returns for published titles based upon, among other factors, historical experience and performance of the titles in similar genres, historical performance of the hardware platform, customer inventory levels, analysis of sell-through rates, sales force and retail customer feedback, industry pricing, market conditions and changes in demand and acceptance of our products by consumers.

Significant management judgments and estimates must be made and used in connection with establishing price protection and the allowance for returns in any accounting period. We believe we can make reliable

estimates of price protection and returns. However, actual results may differ from initial estimates as a result of changes in circumstances, market conditions and assumptions. Adjustments to estimates are recorded in the period in which they become known.

**Consideration Given to Customers and Received from Vendors **

We have various marketing arrangements with retailers and distributors of our products that provide for cooperative advertising and market development funds, among others, which are generally based on single exchange transactions. Such amounts are accrued as a reduction to revenue at the later of: (1) the date at which the related revenue is recognized by us, or (2) the date at which the sales incentive is offered, except for cooperative advertising which is included in selling and marketing expense if there is a separate identifiable benefit and the benefit's fair value can be established.

We receive various incentives from our manufacturers, including up-front cash payments as well as rebates based on a cumulative level of purchases. Such amounts are generally accounted for as a reduction in the price of the manufacturer's product and included as a reduction of inventory or cost of goods sold, based on an agreed upon per unit rebate.

**Advertising **

We expense advertising costs as incurred. Advertising expense for the fiscal years ended March 31, 2016, 2015 and 2014 amounted to $94,743, $132,990 and $153,732, respectively, and are included in "Selling and marketing expense" in our Consolidated Statements of Operations.

**(Loss) Earnings per Share ("EPS") **

Basic EPS is computed by dividing the net income (loss) applicable to common stockholders for the period by the weighted average number of shares of common stock outstanding during the same period. Diluted EPS is computed by dividing the net income (loss) applicable to common stockholders for the period by the weighted average number of shares of common stock and common stock equivalents outstanding.

Certain of our unvested restricted stock awards (including restricted stock units, time-based and market-based restricted stock awards) are considered participating securities since these securities have non-forfeitable rights to dividends or dividend equivalents during the contractual period of the award, and thus require the two-class method of computing EPS. The calculation of EPS for common stock under the two-class method excludes the income attributable to the participating securities from the numerator and excludes the dilutive effect of those awards from the denominator.

We define common stock equivalents as unexercised stock options, unvested restricted stock awards, common stock equivalents underlying the Convertible Notes (see Note 11) and warrants outstanding during the period. Common stock equivalents are measured using the treasury stock method, except for the Convertible Notes, which are assessed for their effect on diluted EPS using the more dilutive of the treasury stock method or the if-converted method. Under the provisions of the if-converted method, the Convertible Notes are assumed to be converted and included in the denominator of the EPS calculation and the interest expense, net of tax, recorded in connection with the Convertible Notes is added back to the numerator. However, potential common shares are not included in the denominator of the diluted earnings (loss) per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

**Stock-based Compensation **

We account for stock-based awards under the fair value method of accounting. 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 for time-based stock awards and on an accelerated attribution method for market-based and performance-based stock 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 time-based awards fair value is determined by the closing price of our common stock 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. Changes in the value of the awards from period to period are recorded as stock-based compensation expense over the vesting period or capitalized as software development costs.

See Note 15 for a full discussion of our stock-based compensation arrangements.

**Foreign Currency **

The functional currency for our foreign operations is primarily the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from translation are included in accumulated other comprehensive income (loss). Realized and unrealized transaction gains and losses are included in our Consolidated Statements of Operations in the period in which they occur.

**Comprehensive (Loss) Income **

Comprehensive (loss) income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Accumulated other comprehensive (loss) income includes foreign currency translation adjustments, which relate to investments that are permanent in nature and therefore do not require tax adjustments, and the net of tax amounts for unrealized gains (losses), net on derivative instruments designated as cash flow hedges and available for sale securities.

**Recently Issued Accounting Pronouncements **

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. This update is effective for annual periods beginning after December 15, 2016 (April 1, 2017 for the Company) and interim periods within those annual periods. Early adoption is not permitted. We are currently evaluating the impact of adopting this update on our Consolidated Financial Statements.

Accounting for Leases

In February 2016, the FASB issued ASU 2016-02, "Leases." This new guidance requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. This update is effective for annual periods, and interim periods within those years, beginning after December 15, 2018 (April 1, 2019 for the Company). This new guidance must be adopted using a modified retrospective approach whereby, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact of adopting this update on our Consolidated Financial Statements.

Classification of Deferred Taxes

In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17") This new guidance simplifies the balance sheet classification of deferred taxes by requiring all deferred taxes to be presented as noncurrent assets or liabilities. This update can be applied either retrospectively or prospectively and is effective for annual periods, and interim periods within those years, beginning after December 15, 2016 (April 1, 2017 for the Company). Early adoption is permitted. We adopted ASU 2015-17 prospectively during the fourth quarter of fiscal 2016, therefore, prior periods have not been restated to conform to current presentation. The adoption of ASU 2015-17 resulted in a reclassification of net current deferred tax assets of $32,537 from prepaid expenses and other to other long-term liabilities.

Presentation of Debt Issuance Costs

In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This new guidance requires the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability. This update will be applied retrospectively and is effective for annual periods, and interim periods within those years, beginning after December 15, 2015 (April 1, 2016 for the Company). Early adoption is permitted.

We adopted ASU 2015-03 during the third quarter of fiscal 2016. The adoption of ASU 2015-03 had no impact on our Consolidated Statement of Operations and Consolidated Statement of Cash Flows, and had the following impact to our previously reported March 31, 2015 Consolidated Balance Sheet:

		March 31, 2015
		Originally Reported			As Adjusted			Effect of Change
Prepaid expenses and other		$	55,506		$	54,057		$	(1,449	)
Other assets			13,745			12,167			(1,578	)
Long-term debt			476,057			473,030			(3,027	)

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the FASB amended ASU 2014-09 by issuing ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) which clarifies the implementation guidance on principal versus agent considerations included in ASU 2014-09. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing which clarifies the implementation guidance on licensing and identifying performance obligations. This guidance can be adopted retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB voted to defer the effective date by one year to annual and interim years beginning after December 15, 2017 (April 1, 2018 for the Company). Early adoption is permitted, but no earlier than the original effective date of annual and interim periods beginning after December 15, 2016 (April 1, 2017 for the Company). We are currently determining the implementation approach and evaluating the impact of adopting these updates on our Consolidated Financial Statements.

2. MANAGEMENT AGREEMENT

In May 2011, we entered into an amended management services agreement, (the "2011 Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia") pursuant to which ZelnickMedia provided us with certain management, consulting and executive level services. In March 2014, we entered into a new management agreement, (the "2014 Management Agreement"), with ZelnickMedia pursuant to which ZelnickMedia continues to provide financial and management consulting services to the Company through March 31, 2019. The 2014 Management Agreement became effective April 1, 2014 and supersedes and replaces the 2011 Management Agreement, except as otherwise contemplated by the 2014 Management Agreement. As part of the 2014 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continues to serve as Executive Chairman and Chief Executive Officer and Karl Slatoff, a partner of ZelnickMedia, continues to serve as President of the Company. The 2014 Management Agreement provides for an annual management fee of $2,970 over the term of the agreement and a maximum annual bonus opportunity of $4,752 over the term of the agreement, based on the Company achieving certain performance thresholds. In consideration for ZelnickMedia's services, we recorded consulting expense (a component of general and administrative expenses) of $7,722, $7,737 and $6,365 for the fiscal years ended March 31, 2016, 2015 and 2014, respectively.

Pursuant to the 2011 Management Agreement and the 2014 Management Agreement, we also issued stock-based awards to ZelnickMedia. During the fiscal years ended March 31, 2016, 2015 and 2014, we

recorded $26,652, $24,449 and $16,807, respectively, of stock-based compensation expense for non-employee awards, which is included in general and administrative expenses. See Note 15 for a discussion of such awards.

3. FAIR VALUE MEASUREMENTS

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their short maturities.

We follow a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of "observable inputs" and minimize the use of "unobservable inputs." The three levels of inputs used to measure fair value are as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The table below segregates all assets that are measured at fair value on a recurring basis (which is measured at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

		March 31, 2016			Quoted prices in active markets for identical assets (level 1)			Significant other observable inputs (level 2)			Significant unobservable inputs (level 3)			Balance Sheet Classification
Money market funds		$	562,726		$	562,726		$	—		$	—		Cash and cash equivalents
Corporate bonds			205,250			—			205,250			—		Short-term investments
Bank-time deposits			265,570			265,570			—			—		Short-term investments
Foreign currency forward contracts			(137	)		—			(137	)		—		Accrued and other current liabilities
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total recurring fair value measurements, net		$	1,033,409		$	828,296		$	205,113		$	—
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		March 31, 2015			Quoted prices in active markets for identical assets (level 1)			Significant other observable inputs (level 2)			Significant unobservable inputs (level 3)			Balance Sheet Classification
Money market funds		$	544,334		$	544,334		$	—		$	—		Cash and cash equivalents
Bank-time deposits			79,852			79,852			—			—		Cash and cash equivalents
Corporate bonds			99,429			—			99,429			—		Short-term investments
Bank-time deposits			87,500			87,500			—			—		Short-term investments
Foreign currency forward contracts			587			—			587			—		Prepaid expenses and other
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total recurring fair value measurements, net		$	811,702		$	711,686		$	100,016		$	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
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We did not have any transfers between Level 1 and Level 2 fair value measurements during the fiscal year ended March 31, 2016.

**Debt **

As of March 31, 2016, the estimated fair value of our 1.75% Convertible Notes due 2016 (the "1.75% Convertible Notes") and our 1.00% Convertible Notes due 2018 (the "1.00% Convertible Notes" and together with the 1.75% Convertible Notes, the "Convertible Notes") was $493,750 and $515,286, respectively. The fair value was determined using Level 2 inputs, observable market data for the Convertible Notes and its embedded option feature. See Note 11 for additional information regarding our Convertible Notes.

4. SHORT-TERM INVESTMENTS

Our short-term investments consisted of the following as of March 31, 2016:

		March 31, 2016
					Gross Unrealized
		Cost or Amortized Cost
		Gains			Losses			Fair Value
Short-term investments
Bank time deposits		$	265,570		$	—		$	—		$	265,570
Available-for-sale securities:
Corporate bonds			205,166			131			(47	)		205,250
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Total short-term investments		$	470,736		$	131		$	(47	)	$	470,820
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		March 31, 2015
					Gross Unrealized
		Cost or Amortized Cost
		Gains			Losses			Fair Value
Short-term investments
Bank time deposits		$	87,500		$	—		$	—		$	87,500
Available-for-sale securities:
Corporate bonds			99,454			39			(64	)		99,429
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Total short-term investments		$	186,954		$	39		$	(64	)	$	186,929
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Unrealized gains and losses of our available-for-sale securities are reported as a component of other comprehensive income (loss), net of tax, until the security is sold, the security has matured, or we determine that the fair value of the security has declined below its adjusted cost basis and the decline is other-than-temporary. We evaluate our investments for impairment quarterly. We consider various factors in the review of investments with an unrealized loss, including the credit quality of the issuer, the duration that the fair value has been less than the adjusted cost basis, the severity of the impairment, the reason for the decline in value and our intent to sell and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Based on our review, we did not consider any of these investments to be other-than-temporarily impaired as of March 31, 2016 or 2015.

The following table summarizes the contracted maturities of our short-term investments at March 31, 2016:

		March 31, 2016
		Amortized Cost			Fair Value
Short-term investments
Due in 1 year or less		$	390,386		$	390,384
Due in 1-2 years			80,350			80,436
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Total short-term investments		$	470,736		$	470,820
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5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Our risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. We do not enter into derivative financial contracts for speculative or trading purposes. We classify cash flows from its derivative transactions as cash flows from operating activities in the consolidated statements of cash flow.

The following table shows the gross notional amounts of foreign currency forward contracts:

		March 31,
		2016			2015
Forward contracts to sell foreign currencies		$	54,529		$	72,488
Forward contracts to purchase foreign currencies		$	2,409			4,097

For the fiscal years ended March 31, 2016, 2015 and 2014, we recorded gains of $144 and $18,548, and a loss of $18,425, respectively, related to foreign currency forward contracts in interest and other, net on the Consolidated Statements of Operations. Our derivative contracts are foreign currency exchange forward contracts that are not designated as hedging instruments under hedge accounting and are used to reduce the impact of foreign currency on certain balance sheet exposures and certain revenue and expense. These instruments are generally short term in nature, with typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates. As of March 31, 2016, amounts related to derivatives designated as cash flow hedges and recorded in accumulated other comprehensive (loss) income are immaterial.

6. INVENTORY

Inventory balances by category are as follows:

		March 31,
		2016			2015
Finished products		$	14,321		$	17,229
Parts and supplies			1,567			2,822
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Inventory		$	15,888		$	20,051
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Estimated product returns included in inventory at March 31, 2016 and 2015 were $527 and $921, respectively.

7. SOFTWARE DEVELOPMENT COSTS AND LICENSES

Details of our capitalized software development costs and licenses are as follows:

		March 31,
		2016						2015
		Current			Non-current			Current			Non-current
Software development costs, internally developed		$	131,378		$	162,261		$	54,225		$	116,026
Software development costs, externally developed			46,888			45,703			102,713			8,303
Licenses			121			6,867			6,447			—
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Software development costs and licenses		$	178,387		$	214,831		$	163,385		$	124,329
​	​	​	​	​	​	​	​	​	​	​	​	​	​
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Software development costs and licenses as of March 31, 2016 and 2015 included $343,450 and $211,248, respectively, related to titles that have not been released.

Amortization and impairment of software development costs and licenses are as follows:

		Fiscal Year Ended March 31,
		2016			2015			2014
Amortization of software development costs and licenses		$	117,506		$	119,488		$	236,759
Impairment of software development costs and licenses			22,671			23,947			52,863
Less: Portion representing stock-based compensation			(5,705	)		(9,982	)		(24,089	)
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Amortization and impairment, net of stock-based compensation		$	134,472		$	133,453		$	265,533
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8. FIXED ASSETS, NET

Fixed asset balances by category are as follows:

		March 31,
		2016			2015
Computer equipment		$	74,684		$	73,675
Computer software			39,277			59,575
Leasehold improvements			47,773			35,535
Office equipment			6,344			7,002
Furniture and fixtures			8,051			7,073
​	​	​	​	​	​	​	​
			176,129			182,860
Less: accumulated depreciation			99,002			113,068
​	​	​	​	​	​	​	​
Fixed assets, net		$	77,127		$	69,792
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Depreciation expense related to fixed assets for the fiscal years ended March 31, 2016, 2015 and 2014 was $28,800, $21,057 and $13,203, respectively.

9. GOODWILL AND INTANGIBLE ASSETS, NET

The change in our goodwill balance is as follows:

		Total
Balance at March 31, 2014		$	226,705
Currency translation adjustment			(9,417	)
​	​	​	​	​
Balance at March 31, 2015		$	217,288
Currency translation adjustment			(208	)
​	​	​	​	​
Balance at March 31, 2016		$	217,080
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The following table sets forth the intangible assets for Intellectual property, which is subject to amortization:

		March 31,
		2016									2015
		Gross Carrying Amount			Accumulated Amortization			Net Book Value			Gross Carrying Amount			Accumulated Amortization			Net Book Value
Intellectual property		$	26,859		$	(22,250	)	$	4,609		$	26,859		$	(22,090	)	$	4,769

Amortization of intangible assets is included in our Consolidated Statements of Operations as follows:

		Fiscal Year Ended March 31,
		2016			2015			2014
Cost of goods sold		$	160		$	344		$	3,558
Depreciation and amortization			—			—			156
​	​	​	​	​	​	​	​	​	​	​
Total amortization of intangible assets		$	160		$	344		$	3,714
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

Estimated future amortization of intangible assets that will be recorded in cost of goods sold and operating expenses for the years ending March 31, are as follows:

​	​	​	​	​
2017		$	4,036
2018			548
2019			25
​	​	​	​	​
Total		$	4,609
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:

		March 31,
		2016			2015
Software development royalties		$	414,492		$	307,953
Business reorganization (see Note 20)			66,323			—
Compensation and benefits			39,919			47,763
Licenses			31,825			23,974
Marketing and promotions			14,938			21,708
Other			39,982			43,340
​	​	​	​	​	​	​	​
Accrued expenses and other current liabilities		$	607,479		$	444,738
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

11. LONG-TERM DEBT

Credit Agreement

In February 2016, we entered into a Fifth Amendment to our Credit Agreement. The Credit Agreement provides for borrowings of up to $100,000 which may be increased by up to $100,000 pursuant to the terms of the Credit Agreement, and is secured by substantially all of our assets and the equity of our subsidiaries. The Credit Agreement expires on August 18, 2019. Revolving loans under the Credit Agreement bear interest at our election of (a) 0.25% to 0.75% above a certain base rate (3.75% at March 31, 2016), or (b) 1.25% to 1.75% above the LIBOR Rate (approximately 1.68% at March 31, 2016), with the margin rate subject to the achievement of certain average liquidity levels. We are also required to pay a monthly fee on the unused available balance, ranging from 0.25% to 0.375% based on availability. We had no outstanding borrowings at March 31, 2016 and 2015.

Availability under the Credit Agreement is unrestricted when liquidity, as defined in the Credit Agreement, is at least $300,000. When liquidity is below $300,000 availability under the Credit Agreement is restricted by our United States and United Kingdom based accounts receivable and inventory balances. The Credit Agreement also allows for the issuance of letters of credit in an aggregate amount of up to $5,000.

Information related to availability on our Credit Agreement is as follows:

		March 31,
		2016			2015
Available borrowings		$	98,335		$	98,335
Outstanding letters of credit			1,664			1,664

We recorded interest expense and fees related to the Credit Agreement of $438, $518 and $637, for the fiscal years ended March 31, 2016, 2015 and 2014, respectively. The Credit Agreement contains covenants that substantially limit us and our subsidiaries' ability to: create, incur, assume or be liable for indebtedness; dispose of assets outside the ordinary course of business; acquire, merge or consolidate with or into another person or entity; create, incur or allow any lien on any of their respective properties; make investments; or pay dividends or make distributions (each subject to certain limitations); or optionally prepay any indebtedness (subject to certain exceptions, including an exception permitting the redemption of the Company's unsecured convertible senior notes upon the meeting of certain minimum liquidity requirements). In addition, the Credit Agreement provides for certain events of default such as nonpayment of principal and interest, breaches of representations and warranties, noncompliance with covenants, acts of insolvency, default on indebtedness held by third parties and default on certain material contracts (subject to certain limitations and cure periods). The Credit Agreement also contains a requirement that we maintain an interest coverage ratio of more than one to one for the trailing twelve month period, if certain average liquidity levels fall below $30,000. As of March 31, 2016, we were in compliance with all covenants and requirements outlined in the Credit Agreement.

1.75% Convertible Notes Due 2016

On November 16, 2011, we issued $250,000 aggregate principal amount of 1.75% Convertible Notes due 2016. The issuance of the 1.75% Convertible Notes included $30,000 related to the exercise of an over-allotment option by the underwriters. Interest on the 1.75% Convertible Notes is payable semi-annually in arrears on June 1st and December 1st of each year, commencing on June 1, 2012. The 1.75% Convertible Notes mature on December 1, 2016, unless earlier repurchased by the Company or converted. The Company does not have the right to redeem the 1.75% Convertible Notes prior to maturity.

The 1.75% Convertible Notes are convertible at an initial conversion rate of 52.3745 shares of our common stock per $1 principal amount of 1.75% Convertible Notes (representing an initial conversion price of approximately $19.093 per share of common stock for a total of approximately 13,094,000 underlying conversion shares) subject to adjustment in certain circumstances. Holders may convert the 1.75% Convertible Notes at their option prior to the close of business on the business day immediately preceding June 1, 2016 only under the following circumstances: (1) during any fiscal quarter commencing after March 31, 2012, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the "measurement period") in which the trading price per $1 principal amount of 1.75% Convertible Notes for each day of that measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such day; or (3) upon the occurrence of specified corporate events. On and after June 1, 2016 until the close of business on the business day immediately preceding the maturity date, holders may convert their 1.75% Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 1.75% Convertible Notes may be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of the Company's common stock. Our common stock price exceeded 130% of the applicable conversion price per share for at least 20 trading days during the 30 consecutive trading days ended March 31, 2016. As of

April 1, 2016, the 1.75% Convertible Notes may be converted at the holder's option through the maturity date. Our current intent and ability, given our option, would be to settle the 1.75% Convertible Notes conversion in shares of our common stock. As such, we have continued to classify these 1.75% Convertible Notes as long-term debt.

Upon the occurrence of certain fundamental changes involving the Company, holders of the 1.75% Convertible Notes may require us to purchase all or a portion of their 1.75% Convertible Notes for cash at a price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest (including additional interest, if any) to, but excluding, the fundamental change purchase date.

The indenture governing the 1.75% Convertible Notes contains customary terms and covenants and events of default. If an event of default (as defined therein) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the 1.75% Convertible Notes then outstanding by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest (including additional interest, if any) on all the 1.75% Convertible Notes to be due and payable. In the case of an event of default arising out of certain bankruptcy events, 100% of the principal of and accrued and unpaid interest (including additional interest, if any), on the 1.75% Convertible Notes will automatically become due and payable immediately. As of March 31, 2016, we were in compliance with all covenants and requirements outlined in the indenture governing the 1.75% Convertible Notes.

The 1.75% Convertible Notes are senior unsecured obligations and rank senior in right of payment to our existing and future indebtedness that is expressly subordinated in right of payment to the 1.75% Convertible Notes; equal in right of payment to our existing and future indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness incurred by our subsidiaries.

We separately account for the liability and equity components of the 1.75% Convertible Notes in a manner that reflects the Company's nonconvertible debt borrowing rate when interest expense is recognized in subsequent periods. We estimated the fair value of the 1.75% Convertible Notes to be $197,373, as of the date of issuance of our 1.75% Convertible Notes, assuming a 6.9% non-convertible borrowing rate. The carrying amount of the equity component was determined to be $52,627 by deducting the fair value of the liability component from the par value of the 1.75% Convertible Notes. The excess of the principal amount of the liability component over its carrying amount is amortized to interest and other, net over the term of the 1.75% Convertible Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the $6,875 of banking, legal and accounting fees related to the issuance of the 1.75% Convertible Notes, we allocated $5,428 to the liability component and $1,447 to the equity component. Debt issuance costs attributable to the liability component are being amortized to interest and other, net over the term of the 1.75% Convertible Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital.

As of March 31, 2016 and 2015, the if-converted value of our 1.75% Convertible Notes exceeded the principal amount of $250,000 by $243,251 and $83,373, respectively.

The following table provides additional information related to our 1.75% Convertible Notes:

		March 31,
		2016			2015
Additional paid-in capital		$	51,180		$	51,180
​	​	​	​	​	​	​	​
Principal amount of 1.75% Convertible Notes		$	250,000		$	250,000
Unamortized discount of the liability component			8,014			19,386
Carrying amount of debt issuance costs			657			1,662
​	​	​	​	​	​	​	​
Net carrying amount of 1.75% Convertible Notes		$	241,329		$	228,952
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

The following table provides the components of interest expense related to our 1.75% Convertible Notes:

		Fiscal Year Ended March 31,
		2016			2015			2014
Cash interest expense (coupon interest expense)		$	4,375		$	4,375		$	4,375
Non-cash amortization of discount on 1.75% Convertible Notes			11,372			10,639			9,954
Amortization of debt issuance costs			1,005			1,054			1,105
​	​	​	​	​	​	​	​	​	​	​
Total interest expense related to 1.75% Convertible Notes		$	16,752		$	16,068		$	15,434
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

1.00% Convertible Notes Due 2018

On June 18, 2013, we issued $250,000 aggregate principal amount of 1.00% Convertible Notes due 2018. The 1.00% Convertible Notes were issued at 98.5% of par value for proceeds of $246,250. Interest on the 1.00% Convertible Notes is payable semi-annually in arrears on July 1st and January 1st of each year, commencing on January 1, 2014. The 1.00% Convertible Notes mature on July 1, 2018, unless earlier repurchased by the Company or converted. The Company does not have the right to redeem the 1.00% Convertible Notes prior to maturity. The Company also granted the underwriters a 30-day option to purchase up to an additional $37,500 principal amount of 1.00% Convertible Notes to cover overallotments, if any. On July 17, 2013, the Company closed its public offering of $37,500 principal amount of the Company's 1.00% Convertible Notes as a result of the underwriters exercising their overallotment option in full on July 12, 2013, bringing the total proceeds to $283,188.

The 1.00% Convertible Notes are convertible at an initial conversion rate of 46.4727 shares of our common stock per $1 principal amount of 1.00% Convertible Notes (representing an initial conversion price of approximately $21.52 per share of common stock for a total of approximately 13,361,000 underlying conversion shares) subject to adjustment in certain circumstances. Holders may convert the 1.00% Convertible Notes at their option prior to the close of business on the business day immediately preceding January 1, 2018 only under the following circumstances: (1) during any fiscal quarter commencing after September 30, 2013, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the "measurement period") in which the trading price per $1 principal amount of 1.00% Convertible Notes for each day of that measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such day; or (3) upon the occurrence of specified corporate events. On and after January 1, 2018 until the close of business on the business day immediately preceding the maturity date, holders may convert their 1.00% Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 1.00% Convertible Notes may be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of the Company's common stock. Our common stock price exceeded 130% of the applicable conversion price per

share for at least 20 trading days during the 30 consecutive trading days ended March 31, 2016. Accordingly, as of April 1, 2016, the 1.00% Convertible Notes may be converted at the holder's option through June 30, 2016. Our current intent and ability, given our option, would be to settle the 1.00% Convertible Notes conversion in shares of our common stock. As such, we have continued to classify these 1.00% Convertible Notes as long-term debt.

Upon the occurrence of certain fundamental changes involving the Company, holders of the 1.00% Convertible Notes may require us to purchase all or a portion of their 1.00% Convertible Notes for cash at a price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest (including additional interest, if any) to, but excluding, the fundamental change purchase date.

The indenture governing the 1.00% Convertible Notes contains customary terms and covenants and events of default. If an event of default (as defined therein) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the 1.00% Convertible Notes then outstanding by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest (including additional interest, if any) on all the 1.00% Convertible Notes to be due and payable. In the case of an event of default arising out of certain bankruptcy events, 100% of the principal of and accrued and unpaid interest (including additional interest, if any), on the 1.00% Convertible Notes will automatically become due and payable immediately. As of March 31, 2016, we were in compliance with all covenants and requirements outlined in the indenture governing the 1.00% Convertible Notes.

The 1.00% Convertible Notes are senior unsecured obligations and rank senior in right of payment to our existing and future indebtedness that is expressly subordinated in right of payment to the 1.00% Convertible Notes; equal in right of payment to our existing and future indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness incurred by our subsidiaries.

We separately account for the liability and equity components of the 1.00% Convertible Notes in a manner that reflects the Company's nonconvertible debt borrowing rate. We estimated the fair value of the 1.00% Convertible Notes to be $225,567 upon issuance of our 1.00% Convertible Notes, assuming a 6.15% non-convertible borrowing rate. The carrying amount of the equity component was determined to be approximately $57,621 by deducting the fair value of the liability component from the net proceeds of the 1.00% Convertible Notes. The excess of the principal amount of the liability component over its carrying amount is amortized to interest and other, net over the term of the 1.00% Convertible Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the $2,815 of banking, legal and accounting fees related to the issuance of the 1.00% Convertible Notes, we allocated $2,209 to the liability component and $606 to the equity component. Debt issuance costs attributable to the liability component are being amortized to interest and other, net over the term of the 1.00% Convertible Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital.

As of March 31, 2016 and 2015, the if-converted value of our 1.00% Convertible Notes exceeded the principal amount of $287,500 by $215,809 and $52,671, respectively.

The following table provides additional information related to our 1.00% Convertible Notes:

		March 31,
		2016			2015
Additional paid-in capital		$	35,784		$	35,784
​	​	​	​	​	​	​	​
Principal amount of 1.00% Convertible Notes		$	287,500		$	287,500
Unamortized discount of the liability component			29,972			42,057
Carrying amount of debt issuance costs			922			1,365
​	​	​	​	​	​	​	​
Net carrying amount of 1.00% Convertible Notes		$	256,606		$	244,078
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

The following table provides the components of interest expense related to our 1.00% Convertible Notes:

		Fiscal Year Ended March 31,
		2016			2015			2014
Cash interest expense (coupon interest expense)		$	2,875		$	2,875		$	2,259
Non-cash amortization of discount on 1.00% Convertible Notes			12,085			11,387			8,489
Amortization of debt issuance costs			443			466			378
​	​	​	​	​	​	​	​	​	​	​
Total interest expense related to 1.00% Convertible Notes		$	15,403		$	14,728		$	11,126
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

12. (LOSS) EARNINGS PER SHARE ("EPS")

The following table sets forth the computation of basic and diluted EPS (shares in thousands):

		Fiscal Year Ended March 31,
		2016			2015			2014
Computation of Basic (loss) earnings per share:
Net (loss) income		$	(8,302	)	$	(279,470	)	$	361,605
Less: net income allocated to participating securities			—			—			(41,065	)
​	​	​	​	​	​	​	​	​	​	​
Net (loss) income for basic (loss) earnings per share calculation		$	(8,302	)	$	(279,470	)	$	320,540
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Total weighted average shares outstanding—basic			83,417			80,367			95,347
Less: weighted average participating shares outstanding			—			—			(10,828	)
​	​	​	​	​	​	​	​	​	​	​
Weighted average common shares outstanding—basic			83,417			80,367			84,519
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Basic (loss) earnings per share		$	(0.10	)	$	(3.48	)	$	3.79
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Computation of Diluted (loss) earnings per share:
Net (loss) income		$	(8,302	)	$	(279,470	)	$	361,605
Less: net income allocated to participating securities			—			—			(31,397	)
Add: interest expense, net of tax, on Convertible Notes			—			—			33,718
​	​	​	​	​	​	​	​	​	​	​
Net (loss) income for diluted (loss) earnings per share calculation		$	(8,302	)	$	(279,470	)	$	363,926
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Weighted average common shares outstanding—basic			83,417			80,367			84,519
Add: dilutive effect of common stock equivalents			—			—			29,363
​	​	​	​	​	​	​	​	​	​	​
Weighted average common shares outstanding—diluted			83,417			80,367			113,882
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Diluted (loss) earnings per share		$	(0.10	)	$	(3.48	)	$	3.20
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

The calculation of EPS for common stock under the two-class method shown above for the fiscal year ended March 31, 2014 excludes income attributable to the participating securities from the numerator and excludes the dilutive effect of those awards from the denominator.

We incurred a net loss for the fiscal year ended March 31, 2016 and 2015; therefore, the basic and diluted weighted average shares outstanding exclude the effect of unvested share-based awards that are considered participating securities and all common stock equivalents because their effect would be antidilutive. For the fiscal year ended March 31, 2016 and 2015 we had 6,405,000 and 6,061,000, respectively, of unvested share-based awards which are excluded due to the net loss for the periods.

13. COMMITMENTS AND CONTINGENCIES

A summary of annual minimum contractual obligations and commitments as of March 31, 2016 is as follows:

Fiscal Year Ending March 31,		Software Development and Licensing			Marketing			Operating Leases			Purchase Obligations			Convertible Notes Interest			Convertible Notes			Total
2017		$	106,340		$	9,490		$	20,272		$	18,631		$	7,250		$	250,000		$	411,983
2018			67,278			6,520			19,719			7,584			2,875			—			103,976
2019			57,893			46,460			20,006			1,681			1,438			287,500			414,978
2020			22,387			12,650			15,751			—			—			—			50,788
2021			14,982			3,250			14,192			—			—			—			32,424
Thereafter			15,000			6,500			38,698			—			—			—			60,198
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total		$	283,880		$	84,870		$	128,638		$	27,896		$	11,563		$	537,500		$	1,074,347
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

Software Development and Licensing Agreements: We make payments to third-party software developers that include contractual payments to developers under several software development agreements that expire at various times through January 2022. Our aggregate outstanding software development commitments assume satisfactory performance by third-party software developers. We also have licensing commitments that primarily consist of obligations to holders of intellectual property rights for use of their trademarks, copyrights, technology or other intellectual property rights in the development of our products.

Marketing Agreements: We have certain minimum marketing support commitments where we commit to spend specified amounts related to marketing our products. Marketing commitments expire at various times through December 2022 and primarily reflect our agreements with major sports leagues and players' associations.

Operating Leases: Our offices are occupied under non-cancelable operating leases expiring at various times through June 2024. We also lease certain furniture, equipment and automobiles under non-cancelable leases expiring through March 2020. Some of the leases have fixed rent increases and also include inducements to enter into the lease. The effect of such amounts are deferred and recognized on a straight-line basis over the related lease term. Rent expense amounted to $18,032, $18,120 and $15,574 for the fiscal years ended March 31, 2016, 2015 and 2014, respectively.

Purchase obligations: These obligations are primarily related to agreements to purchase services that are enforceable and legally binding on the Company that specifies all significant terms, including fixed, minimum or variable pricing provisions; and the approximate timing of the transactions, expiring at various times through January 2019.

Employee Savings Plans: For our United States employees we maintain a 401(k) retirement savings plan and trust. Our 401(k) plan is offered to all eligible employees and participants may make voluntary contributions. We also have various pension plans for our non-U.S. employees, some of which are required by local laws, and allow or require Company contributions. Employer contributions under all defined contribution and pension plans during the fiscal years ended March 31, 2016, 2015 and 2014 were $8,348, $8,554 and $7,476, respectively.

Legal and Other Proceedings: We are, or may become, subject to demands and claims (including intellectual property claims) and are involved in routine litigation in the ordinary course of business which we do not believe to be material to our business or financial statements. We have appropriately accrued amounts related to certain of these claims and legal and other proceedings. While it is reasonably possible that a loss may be incurred in excess of the amounts accrued in our financial statements, we believe that such losses, unless otherwise disclosed, would not be material.

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 $150,000 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. While we believe that we have meritorious defenses to these claims, and we intend to vigorously defend against them and to pursue any counterclaims, we have accrued what we believe is an adequate reserve for this matter, which amounts are included in Business reorganization in our Consolidated Statement of Operations (see Note 20) and we do not believe that the ultimate outcome of such litigation, even if in excess of our current reserve, will have a material adverse effect on our business, financial condition or results of operations.

14. INCOME TAXES

Components of (loss) income from continuing operations before income taxes are as follows:

		Fiscal Year Ended March 31,
		2016			2015			2014
Domestic		$	(94,174	)	$	(126,582	)	$	197,992
Foreign			55,824			(146,298	)		178,158
​	​	​	​	​	​	​	​	​	​	​
(Loss) income from continuing operations before income taxes		$	(38,350	)	$	(272,880	)	$	376,150
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

(Benefit from) provision for current and deferred income taxes consists of the following:

		Fiscal Year Ended March 31,
		2016			2015			2014
Current:
U.S. federal		$	792		$	2,773		$	16,340
U.S. state and local			938			(1,406	)		4,527
Foreign			(31,508	)		2,944			12,628
​	​	​	​	​	​	​	​	​	​	​
Total current income taxes			(29,778	)		4,311			33,495
Deferred:
U.S. federal			1,211			1,575			(14,216	)
U.S. state and local			(231	)		72			(3,462	)
Foreign			(1,250	)		632			(1,358	)
​	​	​	​	​	​	​	​	​	​	​
Total deferred income taxes			(270	)		2,279			(19,036	)
​	​	​	​	​	​	​	​	​	​	​
(Benefit from) provision for income taxes		$	(30,048	)	$	6,590		$	14,459
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

A reconciliation of our effective tax rate to the U.S. statutory federal income tax rate is as follows:

		Fiscal Year Ended March 31,
		2016			2015			2014
U.S. federal statutory rate			35.0	%		35.0	%		35.0	%
Foreign tax rate differential			25.8	%		(12.1	)%		(10.4	)%
Tax amortization of goodwill			(3.2	)%		(0.6	)%		0.5	%
Foreign earnings			(3.3	)%		(1.5	)%		2.0	%
State and local taxes, net of U.S. federal benefit			0.9	%		0.9	%		0.3	%
Tax credit(1)			98.7	%		—			—
Valuation allowance—domestic			(77.8	)%		(16.8	)%		(19.8	)%
Valuation allowance—foreign			10.4	%		(5.1	)%		(5.1	)%
Change in reserves			(7.0	)%		(1.6	)%		(0.7	)%
Other			(1.1	)%		(0.6	)%		2.0	%
​	​	​	​	​	​	​	​	​	​	​
Effective tax rate			78.4	%		(2.4	)%		3.8	%
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

(1)

Income tax benefit of $37,838 was recorded for the fiscal year ended March 31, 2016 attributable to the Company becoming eligible to claim certain tax deductions on applicable video games in the United Kingdom, relating to a prior period, which was recognized during fiscal 2016.

The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:

		March 31,
		2016			2015
Deferred tax assets:
Accrued compensation expense		$	101,337		$	52,051
Deferred revenue			33,254			5,011
Domestic net operating loss carryforward			28,811			70,159
Tax credit carryforward			76,565			60,278
Foreign net operating loss carryforwards			16,910			22,390
Business reorganization			24,143			72
Sales returns and allowances (including bad debt)			2,257			8,670
Deferred rent			5,359			4,692
Other			2,443			830
​	​	​	​	​	​	​	​
Total deferred tax assets			291,079			224,153
Less: Valuation allowance			(170,574	)		(133,468	)
​	​	​	​	​	​	​	​
Net deferred tax assets			120,505			90,685
​	​	​	​	​	​	​	​
Deferred tax liabilities:
Capitalized software and depreciation			(104,294	)		(69,298	)
Convertible debt			(12,716	)		(21,391	)
Intangible amortization			(8,306	)		(4,356	)
Other			—			(703	)
​	​	​	​	​	​	​	​
Total deferred tax liabilities			(125,316	)		(95,748	)
​	​	​	​	​	​	​	​
Net deferred tax liability(a)			(4,811	)		(5,063	)
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

(a)

As of March 31, 2016 and 2015, $4,811 and $18,125, respectively, is included in other long-term liabilities and as of March 31, 2015, $13,062 is included in prepaid expenses and other current assets.

The valuation allowance is primarily attributable to deferred tax assets for which no benefit is provided due to uncertainty with respect to their realization. The net deferred tax liability is primarily the result of deferred tax liabilities related to goodwill, which cannot be used to offset deferred tax assets.

At March 31, 2016, we had domestic net operating loss carryforwards totaling $28,811 of which $14 will expire in 2019, $1,195 will expire in 2020, $2,332 will expire from 2021 to 2027 and $25,270 will expire from 2029 to 2036. In addition, we had foreign net operating loss carryforwards of $16,910, of which $2,999 will expire in 2020, $11,854 will expire in 2022 and the remainder may be carried forward indefinitely.

The total amount of undistributed earnings of foreign subsidiaries was approximately $197,300 at March 31, 2016 and $156,000 at March 31, 2015. It is our intention to reinvest undistributed earnings of our foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes which may become payable if undistributed earnings of foreign subsidiaries are repatriated. It is not practicable to estimate the tax liability that would arise if these earnings were remitted.

We are regularly audited by domestic and foreign taxing authorities. Audits may result in tax assessments in excess of amounts claimed and the payment of additional taxes. We believe that our tax return positions comply with applicable tax law and that we have adequately provided for reasonably foreseeable assessments of additional taxes. Additionally, we believe that any assessments in excess of the amounts provided for will not have a material adverse effect on the Consolidated Financial Statements.

As of March 31, 2016 and March 31, 2015, we had gross unrecognized tax benefits, including interest and penalties, of $56,012 and $42,706, of which $41,285 and $29,153, respectively, would affect our effective tax rate if realized.

The aggregate changes to the liability for gross uncertain tax positions, excluding interest and penalties, were as follows:

		Fiscal Year Ended March 31,
		2016			2015			2014
Balance, beginning of period		$	40,591		$	23,536		$	20,400
Additions:
Current year tax positions			12,208			8,297			5,069
Prior year tax positions			—			9,040			2,008
Reduction of prior year tax positions			—			(256	)		(3,219	)
Lapse of statute of limitations			—			(26	)		(667	)
Other, net			—			—			(55	)
​	​	​	​	​	​	​	​	​	​	​
Balance, end of period		$	52,799		$	40,591		$	23,536
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

We recognize interest and penalties related to uncertain tax positions in the provision for income taxes in our Consolidated Statements of Operations. For the fiscal years ended March 31, 2016, 2015 and 2014, we recognized an increase in interest and penalties of $1,098, $771 and $32, respectively. The gross amount of interest and penalties accrued as of March 31, 2016 and March 31, 2015 was $ 3,213 and $2,115, respectively.

We are generally no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended March 31, 2012 and state income tax returns for periods prior to the fiscal year ended March 31, 2011. With few exceptions, we are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to our fiscal year ended March 31, 2011. The statute relating to the fiscal year ended October 31, 2010 has expired. Certain U.S. state taxing authorities are currently examining our income tax returns for fiscal years ended March 31, 2011 through March 31, 2013. The determination as to further adjustments to our gross unrecognized tax benefits during the next 12 months is not practicable.

We believe that we have provided for any reasonably foreseeable outcomes related to our tax audits and that any settlement will not have a material adverse effect on our consolidated financial statements. However, there can be no assurances as to the possible outcomes.

15. STOCK-BASED COMPENSATION

Our stock-based compensation plans are broad-based long-term retention programs intended to attract and retain talented employees and align stockholder and employee interests. For similar reasons, we also granted non-employee equity awards, which are subject to variable accounting, to ZelnickMedia in connection with their contract to provide executive management services to us. In April 2009, our stockholders approved our 2009 Stock Incentive Plan (the "2009 Plan"). The aggregate number of shares issuable under the 2009 Plan is 27,209,000 and as of March 31, 2016, there were approximately 1,722,000 shares available for issuance. The 2009 Plan is administered by the Compensation Committee of the Board of Directors and allows for awards of restricted stock and other stock-based awards of our common stock to employees and non-employees. Subject to the provisions of the plans, the Board of Directors or any Committee appointed by the Board of Directors, has the authority to determine the individuals to whom the equity awards are to be granted, the number of shares to be covered by each equity award, the vesting period, restrictions, if any, on the equity award and the terms and conditions of the equity award.

Under our unvested restricted stock awards we issue shares to employees on the date the restricted stock awards are granted and therefore shares granted have voting rights, participate in dividends and are

considered issued and outstanding. Shares issued for any restricted stock awards that are forfeited prior to vesting are canceled and no longer outstanding. Upon the vesting of certain restricted stock awards employees have the option to have the Company withhold shares to satisfy the employee's federal and state tax withholding requirements.

The following table summarizes stock-based compensation expense included in our Consolidated Statements of Operations:

		Fiscal Year Ended March 31,
		2016			2015			2014
Cost of goods sold		$	15,323		$	17,121		$	30,124
Selling and marketing			9,425			8,798			10,136
General and administrative			40,322			33,636			28,991
Research and development			4,926			5,691			8,867
​	​	​	​	​	​	​	​	​	​	​
Stock-based compensation expense		$	69,996		$	65,246		$	78,118
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Capitalized stock-based compensation expense		$	30,367		$	17,423		$	26,156
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

**Restricted Stock Awards **

Restricted stock awards granted to employees under our stock-based compensation plans generally vest annually over 3 years from the date of grant. Certain restricted stock awards granted to key officers, senior-level employees, and key employees vest based on market conditions, primarily related to the performance of the price of our common stock.

Pursuant to the 2011 Management Agreement, we granted 1,100,000 shares of restricted stock to ZelnickMedia that vested annually through May 15, 2015 and 1,650,000 shares of market-based restricted stock that were eligible to vest through May 15, 2015, based on the Company's Total Shareholder Return (as defined in the relevant grant agreements) relative to the Total Shareholder Return of the companies that constitute the NASDAQ Composite Index measured annually on a cumulative basis. To earn all of the shares of market-based restricted stock, the Company must perform at the 75th percentile, or top quartile, of the NASDAQ Composite Index. None of the shares of restricted stock grant pursuant to the 2011 Management Agreement remained unvested as of March 31, 2016 and 1,133,000 shares of restricted stock remained unvested as of March 31, 2015. During the fiscal year ended March 31, 2016, 1,108,250 shares of restricted stock vested and 24,750 shares of rested stock were forfeited related to the 2011 Management Agreement.

In connection with the 2014 Management Agreement, we granted 525,591 and 619,490 restricted stock units to ZelnickMedia on May 20, 2015 and April 1, 2014, respectively, as follows:

		Fiscal Year Ended March 31,
		2016			2015
Time-based			151,575			178,654
Market-based(1)			280,512			330,628
Performance-based(1)
New IP			46,752			55,104
Major IP			46,752			55,104
​	​	​	​	​	​	​	​
Total-Performance-based			93,504			110,208
​	​	​	​	​	​	​	​
Total Restricted Stock Units			525,591			619,490
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

(1)

Represents the maximum number of shares eligible to vest.

Time-based restricted stock units granted on April 1, 2014 will vest on May 20, 2016 and those granted on May 20, 2015 will vest on April 1, 2017, in each case provided that the 2014 Management Agreement has not been terminated prior to such vesting date.

Market-based restricted stock units granted on April 1, 2014 are eligible to vest on May 20, 2016 and those granted on May 20, 2015 are eligible to vest on April 1, 2017, in each case provided that the 2014 Management Agreement has not been terminated prior to such vesting date. Market-based restricted stock units are eligible to vest based on the Company's Total Shareholder Return (as defined in the relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies that constitute the NASDAQ Composite Index as of the grant date measured over a two-year period. To earn the target number of market-based restricted stock units (which represents 50% of the number of the market-based restricted stock units set forth in the table above), the Company must perform at the 50th percentile, with the maximum number of market-based restricted stock units earned if the Company performs at the 75th percentile. Each reporting period, we re-measure the fair value of the unvested shares of market-based restricted stock units granted to ZelnickMedia.

Performance-based restricted stock units granted on April 1, 2014 are eligible to vest on May 20, 2016 and those granted on May 20, 2015 are eligible to vest on April 1, 2017, in each case provided that the 2014 Management Agreement has not been terminated prior to such vesting date. Performance-based restricted stock units, of which 50% are tied to "New IP" and 50% to "Major IP" (as defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of individual product releases of "New IP" or "Major IP" measured over a two-year period. The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal to 50% of the grant amounts set forth in the above table (which represents the maximum number of performance-based restricted stock units that may be earned). Each reporting period, we assess the performance metric and upon achievement of certain thresholds record an expense for the unvested portion of the shares of performance-based restricted stock units. Certain performance metrics, based on unit sales, have been achieved as of March 31, 2016 and 2015 for the "New IP" and "Major IP" performance-based restricted stock units granted on April 1, 2014 and May 20, 2015.

The unvested portion of time-based, market-based and performance-based restricted units granted pursuant to the 2014 Management Agreement as of March 31, 2016 and 2015 was 1,145,081 and 619,490, respectively.

The following table summarizes the weighted-average assumptions used in the Monte Carlo Simulation method:

		Fiscal Year Ended March 31,
		2016						2015						2014
		Employee Market-Based			Non-Employee Market-Based			Employee Market-Based			Non-Employee Market-Based			Employee Market-Based			Non-Employee Market-Based
Risk-free interest rate			0.6	%		0.4	%		0.4	%		0.1	%		0.6	%		0.2	%
Expected stock price volatility			33.9	%		32.2	%		31.9	%		33.7	%		39.1	%		36.5	%
Expected service period (years)			1.9			1.1			2.0			3.7			2.0			3.4
Dividends			None			None			None			None			None			None

The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended March 31, 2016, 2015 and 2014 was $43.66, $36.56 and $15.73 per share, respectively. For the fiscal years ended March 31, 2016, 2015 and 2014, the estimated value of the market-based restricted stock awards granted to ZelnickMedia was $58.45, $24.21 and $11.83 per share, respectively.

The following table summarizes the activity in non-vested restricted stock awards to employees and ZelnickMedia under our stock-based compensation plans with performance and market based restricted stock awards presented at 100% of target number of shares that may potentially vest:

		Shares (in thousands)			Weighted Average Fair Value on Grant Date
Non-vested restricted stock at March 31, 2015			8,995		$	17.52
Granted			2,313			33.47
Vested			(4,191	)		15.30
Forfeited			(712	)		19.44
​	​	​	​	​	​	​	​
Non-vested restricted stock at March 31, 2016			6,405		$	24.74
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

The maximum number of common shares that could vest is 293,521 for performance-based and market-based restricted stock awards granted during the current year. As of March 31, 2016, the maximum number of shares that could vest is 657,773 for performance-based and market-based restricted stock units outstanding.

As of March 31, 2016, the total future unrecognized compensation cost, net of estimated forfeitures, related to outstanding unvested restricted stock was $101,124 and will be recognized as compensation expense on a straight-line basis over a weighted-average period of approximately 1 year, or capitalized as software development costs.

**Liability Awards **

During the fiscal year ended March 31, 2016, we issued 5,500,000 of time and performance based restricted stock units, to certain employees, which currently can only be settled in cash and are therefore treated as liability awards. The awards are expected to vest between September 2018 and June 2021. As of March 31, 2016, the total future unrecognized compensation cost, based on the March 31, 2016 closing stock price, is estimated to be $199,759 and will be recognized as compensation expense on a straight-line basis over a weighted-average period of approximately 4.9 years, or capitalized as software development costs.

16. SHARE REPURCHASE PROGRAM

In January 2013, our Board of Directors authorized the repurchase of up to 7,500,000 shares of our common stock. 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 $26,552, including commissions of $10, as part of the program. We did not repurchase any shares of our common stock during the fiscal year ended March 31, 2015. During the fiscal year ended March 31, 2014, we repurchased 4,217,683 shares of our common stock in the open market for $73,325, including commissions of $42, as part of the program. As of March 31, 2016, we have repurchased a total of 5,171,330 shares of our common stock and have 9,046,353 shares of our common stock that remain available for repurchase under our share repurchase authorization. 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, our financial performance and other conditions. The program may be suspended or discontinued at any time for any reason.

All of the repurchased shares are classified as treasury stock in our Consolidated Balance Sheets.

17. SEGMENT AND GEOGRAPHIC INFORMATION

We are a publisher of interactive software games designed for console systems and personal computers, including smart phones and tablets, which are delivered through physical retail, digital download, online platforms and cloud streaming services. Our business consists of our Rockstar Games and 2K labels, which represent a single operating segment, the "publishing segment". Our operations involve similar products and customers worldwide. Revenue earned from our publishing segment is primarily derived from the sale of internally developed software titles and software titles developed by third-parties. Our publishing segment is based upon our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker ("CODM"), to evaluate performance and allocate resources. We are centrally managed and the CODM primarily uses segment operating income supplemented by sales information by product category, major product title and platform to make operational decisions and assess financial performance. We include the change in deferred revenue to GAAP revenue to arrive at Segment Revenue. Segment Revenue is a key metric that we use to manage our business as it reflects the sales activity in a given period and provides a more timely indication of trends in our business, provides comparability with the way our business is measured by analysts, and provides consistency with industry data sources. Furthermore, Segment Revenue incorporates the change in deferred revenue that is reflected in the calculation of Segment operating income. Segment operating income differs from consolidated operating income due to the exclusion of the deferral of net revenues and associated costs related to sales generated from certain titles for which we have or expect to provide PCS deemed to be significant (see Note 1) and virtual currency transactions, stock-based compensation expenses, and business reorganization and other expenses that may not be indicative of the Company's core business, operating results or future outlook. Our CODM reviews assets on a consolidated basis and not on a segment basis. The following table summarizes the financial performance of our operating segment revenue and operating income (loss) and provides reconciliations to our consolidated net revenue and operating (loss) income:

		Fiscal Year Ended March 31,
		2016			2015			2014			2016			2015			2014
		Net Revenue									Operating (loss) income
Operating Segment		$	1,560,626		$	1,668,765		$	2,413,720		$	238,212		$	309,543		$	534,043
Reconciliation to consolidated net revenue / operating (loss) income:
Net effect of deferral of net revenues and related cost of sales			(146,928	)		(585,827	)		(63,152	)		(106,531	)		(502,565	)		(36,179	)
Stock based compensation expense			—			—			—			(69,996	)		(65,246	)		(78,118	)
Business reorganization and other expenses			—			—			—			(72,513	)		(195	)		(4,490	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Consolidated net revenue / operating (loss) income		$	1,413,698		$	1,082,938		$	2,350,568		$	(10,828	)	$	(258,463	)	$	415,256
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

We attribute net revenue to geographic regions based on product destination. Net revenue by geographic region was as follows:

		Fiscal Year Ended March 31,
Net revenue by geographic region:		2016			2015			2014
United States		$	742,963		$	623,080		$	1,093,918
Europe			449,577			322,645			903,610
Asia Pacific			120,629			69,923			178,816
Canada and Latin America			100,529			67,290			174,224
​	​	​	​	​	​	​	​	​	​	​
Total net revenue		$	1,413,698		$	1,082,938		$	2,350,568
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

Net revenue by product platform was as follows:

		Fiscal Year Ended March 31,
Net revenue by product platform:		2016			2015			2014
Console		$	1,167,623		$	881,516		$	2,148,494
PC and other			246,075			201,422			202,074
​	​	​	​	​	​	​	​	​	​	​
Total net revenue		$	1,413,698		$	1,082,938		$	2,350,568
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

Our products are delivered through physical retail and digital online services (digital download, online platforms and cloud streaming). Net revenue by distribution channel was as follows:

		Fiscal Year Ended March 31,
Net revenue by distribution channel:		2016			2015			2014
Physical retail and other		$	716,040		$	627,639		$	1,978,598
Digital online			697,658			455,299			371,970
​	​	​	​	​	​	​	​	​	​	​
Total net revenue		$	1,413,698		$	1,082,938		$	2,350,568
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

18. INTEREST AND OTHER, NET

		Fiscal Year Ended March 31,
		2016			2015			2014
Interest expense, net		$	(29,239	)	$	(29,901	)	$	(33,961	)
Foreign currency exchange gain (loss)			(1,407	)		(2,068	)		209
Other			441			76			199
​	​	​	​	​	​	​	​	​	​	​
Interest and other, net		$	(30,205	)	$	(31,893	)	$	(33,553	)
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

19. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table provides the components of accumulated other comprehensive (loss) income:

		Foreign currency translation adjustments			Unrealized gain (loss) on derivative instruments			Unrealized gain (loss) on available- for-sales securities			Total
Balance at March 31, 2014		$	1,531		$	585		$	—		$	2,116
Other comprehensive (loss) income before reclassifications			(32,747	)		32			(25	)		(32,740	)
Amounts reclassified from accumulated other comprehensive income (loss)			—			—			—			—
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance at March 31, 2015		$	(31,216	)	$	617		$	(25	)	$	(30,624	)
Other comprehensive (loss) income before reclassifications			(7,364	)		—			73			(7,291	)
Amounts reclassified from accumulated other comprehensive income (loss)			—			(17	)		36			19
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance at March 31, 2016		$	(38,580	)	$	600		$	84		$	(37,896	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​

20. BUSINESS REORGANIZATION

During the fiscal year ended March 31, 2016, the Company incurred business reorganization expenses of $71,285 due primarily to employee separation costs in connection with reorganizing one development studio and closing two development studios. Through March 31, 2016, the Company has paid $4,962 related to these reorganization activities and $66,323 remains accrued for in Accrued expenses and other current liabilities. See Note 13 for additional information.

21. SUPPLEMENTARY FINANCIAL INFORMATION

The following table provides details of our valuation and qualifying accounts:

		Beginning Balance			Additions(1)			Deductions			Other			Ending Balance
Fiscal Year Ended March 31, 2016
Valuation allowance for deferred income taxes		$	** 133,468**		** $**	** 37,106**		** $**	** —**		** $**	** —**		** $**	** 170,574**
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Price protection, sales returns and other allowances		$	69,305		$	64,498		$	(86,622	)	$	(2,028	)	$	45,153
Allowance for doubtful accounts			1,166			—			(767	)		—			399
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total accounts receivable allowances		$	70,471		$	64,498		$	(87,389	)	$	(2,028	)	$	45,552
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Fiscal Year Ended March 31, 2015
Valuation allowance for deferred income taxes		$	40,774		$	92,694		$	—		$	—		$	133,468
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Price protection, sales returns and other allowances		$	74,078		$	50,114		$	(57,982	)	$	3,095		$	69,305
Allowance for doubtful accounts			1,440			—			(274	)		—			1,166
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total accounts receivable allowances		$	75,518		$	50,114		$	(58,256	)	$	3,095		$	70,471
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Fiscal Year Ended March 31, 2014
Valuation allowance for deferred income taxes		$	132,912		$	—		$	(92,138	)	$	—		$	40,774
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Price protection, sales returns and other allowances		$	62,880		$	138,050		$	(127,458	)	$	606		$	74,078
Allowance for doubtful accounts			1,201			736			(497	)		—			1,440
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total accounts receivable allowances		$	64,081		$	138,786		$	(127,955	)	$	606		$	75,518
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

(1)

Includes price protection of $36,546, $16,669 and $65,996; other allowances including rebates, discounts and cooperative advertising of $23,073, $24,402 and $48,755; and sales returns of $4,879, $9,043 and $23,299 for the fiscal years ended March 31, 2016, 2015 and 2014, respectively.

22. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following tables set forth quarterly supplementary data for each of the years in the two-year period ended March 31, 2016:

		Quarter
Fiscal Year Ended March 31, 2016		First			Second			Third			Fourth
Net revenue		$	275,297		$	346,974		$	414,221		$	377,206
Gross profit			72,682			203,034			156,360			167,749
(Loss) income from operations			(62,637	)		66,431			(59,197	)		44,575
Net (loss) income		$	(67,023	)	$	54,735		$	(42,413	)	$	46,399
(Loss) earnings per share:
Basic (loss) earnings per share		$	(0.81	)	$	0.63		$	(0.51	)	$	0.54
Diluted (loss) earnings per share		$	(0.81	)	$	0.55		$	(0.51	)	$	0.48

		Quarter
Fiscal Year Ended March 31, 2015		First			Second			Third			Fourth
Net revenue		$	125,425		$	126,277		$	531,147		$	300,089
Gross profit (loss)			71,269			74,261			253,134			(110,593	)
(Loss) income from operations			(33,209	)		(48,513	)		65,612			(242,353	)
Net (loss) income		$	(35,403	)	$	(41,369	)	$	40,093		$	(242,791	)
(Loss) earnings per share:
Basic (loss) earnings per share		$	(0.45	)	$	(0.51	)	$	0.46		$	(2.99	)
Diluted (loss) earnings per share		$	(0.45	)	$	(0.51	)	$	0.42		$	(2.99	)

Basic and diluted (loss) earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted (loss) earnings per share information may not equal annual basic and diluted earnings per share.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		TAKE-TWO INTERACTIVE SOFTWARE, INC.
		By:		/s/ STRAUSS ZELNICK Strauss Zelnick Chairman and Chief Executive Officer
May 18, 2016

**POWER OF ATTORNEY **

Each individual whose signature appears below constitutes and appoints Strauss Zelnick and Lainie Goldstein and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.

Signature		Title		Date
/s/ STRAUSS ZELNICK Strauss Zelnick		Chairman and Chief Executive Officer (Principal Executive Officer)		May 18, 2016
/s/ LAINIE GOLDSTEIN Lainie Goldstein		Chief Financial Officer (Principal Financial and Accounting Officer)		May 18, 2016
/s/ MICHAEL DORNEMANN Michael Dornemann		Lead Independent Director		May 18, 2016
/s/ ROBERT A. BOWMAN Robert A. Bowman		Director		May 18, 2016
/s/ J MOSES J Moses		Director		May 18, 2016

Signature		Title		Date
/s/ MICHAEL SHERESKY Michael Sheresky		Director		May 18, 2016
/s/ SUSAN TOLSON Susan Tolson		Director		May 18, 2016