“With Grand Theft Auto V launching on September 17th, followed by the releases of NBA 2K14 and WWE® 2K14, fiscal 2014 is poised to be one of our best years ever. Looking ahead, we are well-positioned to capitalize on the opportunities presented by the upcoming launches of the next-generation consoles. We have an extensive development pipeline, highlighted by proven franchises and groundbreaking new intellectual property. As a result, we expect to continue to deliver Non-GAAP profits in fiscal 2015 and for the foreseeable future.”Business and Product Highlights Since April 1, 2013:
- Take-Two completed a $287.5 million principal amount offering of 1% convertible senior notes due 2018. This offering enables the Company to refinance its 4.375% convertible senior notes due 2014 on substantially improved terms. It also provides Take-Two with additional capital to take advantage of potential opportunities for acquisitions, strategic investments, share repurchases and other initiatives to grow its business and create shareholder value.
- Released Max Payne 3, the critically acclaimed, gritty action title, for Mac®.
- Announced full details of the Special Edition and Collector’s Edition of Grand Theft Auto V, which are now available for pre-order from participating retailers. Grand Theft Auto V is scheduled to launch worldwide on September 17, 2013 for Xbox 360 and PS3.
- Released Sid Meier's Civilization® V: Brave New World, the second expansion pack for the award-winning Civilization V, for the PC and Mac.
- Launched XCOM®: Enemy Unknown for iOS. Developed by Firaxis Games, this mobile version of one of 2012’s most critically acclaimed console/PC releases received an average Metacritic score of 92 and became one of the highest user-rated games to hit the App Store during the quarter.
- Released several new free-to-play titles designed exclusively for smartphones and tablets, including Haunted Hollow™, Sid Meier’s Ace Patrol™, Beejumbled™ and Turd Birds™.
- Pro Baseball® 2K, our online baseball simulation game created in partnership with Nexon, launched commercially in Korea .
- Revealed that the cover art for WWE 2K14 will feature WWE superstar Dwayne “The Rock®” Johnson. Developed by Yukes, WWE 2K14 will be the next title from the renowned WWE video game franchise and is scheduled for release for the Xbox 360 and PS3 on October 29, 2013 in North America and November 1, 2013 internationally.
- Announced that 2013 NBA MVP, LeBron James, will make his video game cover debut on NBA 2K14, the next installment of the top-selling and top-rated NBA video game simulation franchise*. James will lead 2K’s groundbreaking NBA 2K franchise into the future of sports video games with two dynamic and unique experiences for current and next generation consoles. NBA 2K14 is planned for launch on October 1, 2013 in North America and October 4, 2013 internationally for the Xbox 360, PS3 and PC. The title will also be Take-Two’s first offering for the next-generation consoles coming later this year.
- Announced that The Bureau: XCOM Declassified™, 2K Marin’s third-person squad-based tactical shooter, is planned for release on August 20, 2013 in North America and August 23, 2013 internationally for the Xbox 360, PS3 and PC. The Bureau will deliver a new experience within the XCOM universe, telling the origin story of the clandestine XCOM organization and mankind’s first encounter with the mysterious alien threat.
|Second Quarter||Fiscal Year|
|Ending 9/30/2013||Ending 3/31/2014|
|Non-GAAP Net Revenue||$750 to $800 Million||$1.775 to $1.875 Billion|
|Non-GAAP net income per diluted share (1)||$1.20 to $1.35||$2.25 to $2.50|
|Stock-based compensation expense per share (2)||$0.12||$0.30|
|Non-cash amortization of discount on convertible notes per share||$0.05||$0.18|
|Non-cash tax expense per share||$0.00||$0.01|
|Note:||All Non-GAAP per share amounts are calculated based on a fully diluted share count that includes an estimate of the weighted average shares expected to be issued from the conversion for cash and shares in connection with the previously announced redemption of the Company’s 4.375% Convertible Senior Notes due 2014 (the “4.375% Notes”) (approximately 1.0 million shares in the second quarter ending 9/30/2013 and 1.5 million shares in the fiscal year ending 3/31/2014), and excludes the 12.93 million shares underlying the 4.375% Notes.|
|1)||Non-GAAP net income per diluted share for the second quarter ending 9/30/2013 and fiscal year ending 3/31/2014 exclude the impact of any debt extinguishment loss or gain which will be recorded upon the redemption of all of the 4.375% Notes.|
|2)||The Company's stock-based compensation expense for the periods above includes the cost of approximately 1.9 million shares issued to ZelnickMedia that are subject to variable accounting. Actual expense to be recorded in connection with these shares is dependent upon several factors, including future changes in Take-Two's stock price.|
|The following titles were released since April 1, 2013:|
|2K||Borderlands 2: Ultimate Vault Hunter Upgrade Pack (DLC)||Xbox 360, PS3, PC||April 2, 2013|
|2K||Haunted Hollow||iOS||May 2, 2013|
|2K||Pro Baseball 2K||Nexon (Korea only)||May 2, 2013|
|2K||Sid Meier’s Ace Patrol||iOS||May 9, 2013|
|2K||Borderlands 2: Psycho Pack (DLC)||Xbox 360, PS3, PC||May 14, 2013|
|2K||Beejumbled||iOS, Android||June 13, 2013|
|2K||XCOM: Enemy Unknown for iOS||iOS||June 20, 2013|
|Rockstar Games||Max Payne 3||Mac||June 20, 2013|
|2K||Borderlands 2: Tiny Tina’s Assault on Dragon Keep (DLC)||Xbox 360, PS3, PC||June 25, 2013|
|2K||Sid Meier's Civilization V: Brave New World||PC, Mac||July 9, 2013*|
|2K||Turd Birds||iOS, Android||July 11, 2013|
|2K||BioShock Infinite: Clash in the Clouds (DLC)||Xbox 360, PS3, PC||July 30, 2013|
|2K||The Bureau: XCOM Declassified||Xbox 360, PS3, PC||August 20, 2013*|
|Rockstar Games||Grand Theft Auto V||Xbox 360, PS3||September 17, 2013|
|2K||NBA 2K14||Xbox 360, PS3, PC||October 1, 2013*|
|2K||WWE 2K14||Xbox 360, PS3||October 29, 2013*|
|2K||Borderlands 2: Ultimate Vault Hunter Upgrade Pack 2: Digistruct Peak Challenge (DLC)||Xbox 360, PS3, PC||Fall 2013|
|2K||NBA 2K14||Xbox One, PS4||Late 2013|
|2K||BioShock Infinite: Burial at Sea (DLC)||Xbox 360, PS3, PC||TBA|
- Net effect from deferral in net revenues - the Company defers revenue and related costs from the sale of certain titles that have undelivered elements upon the sale of the game and recognizes that revenue upon the delivery of the undelivered elements. As there is no impact to the Company’s operating cash flow, management excludes the impact of deferred net revenue and related costs from its Non-GAAP financial measures when evaluating the Company's operating performance, when planning, forecasting and analyzing future periods, and when assessing the performance of its management team. In addition, we believe that these Non-GAAP financial measures provide a more timely indication of trends in our business, provide comparability with the way our business is measured by analysts, and provide consistency with industry data sources.
- Stock-based compensation – the Company does not consider stock-based compensation charges when evaluating business performance and management does not contemplate stock-based compensation expense in its short- and long-term operating plans. As a result, the Company has excluded such expenses from its Non-GAAP financial measures.
- Income (loss) from discontinued operations – the Company does not engage in sales of subsidiaries on a regular basis and therefore believes it is appropriate to exclude such gains (losses) from its Non-GAAP financial measures. As the Company is no longer active in its discontinued operations, it believes it is appropriate to exclude income (losses) thereon from its Non-GAAP financial measures.
- Non-cash amortization of discount on convertible notes – the Company records non-cash amortization of discount on convertible notes as interest expense in addition to the interest expense already recorded for coupon payments. The Company excludes the non-cash portion of the interest expense from its Non-GAAP financial measures because these amounts are unrelated to its ongoing business operations.
- Gain (loss) on change in fair value of convertible note hedge and warrant transactions – the Company entered into unwind agreements with respect to its convertible note hedge and warrant transactions. These transactions are now accounted for as derivatives whereby gains and losses resulting from changes in the fair value are reported in interest and other, net. The Company excludes the impact of such transactions when evaluating the Company’s operating performance. Management does not believe these gains and losses reflect the Company's primary business, ongoing operating results or future outlook. As such, the Company believes it is appropriate to exclude these gains and losses from its Non-GAAP financial measures.
- Non-cash tax expense for the impact of deferred tax liabilities associated with tax deductible amortization of goodwill – due to the nature of the adjustment as well as the expectation that it will not have any cash impact in the foreseeable future, the Company believes it is appropriate to exclude this expense from its Non-GAAP financial measures .