Unaudited Pro Forma Condensed Combined Financial Information

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

On January 9, 2022, Take-Two, Merger Sub 1, Merger Sub 2, and Zynga entered into the merger agreement. Pursuant to the merger agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub 1 will be merged with and into Zynga with Zynga continuing as the surviving corporation and a wholly-owned subsidiary of Take-Two, and immediately following the merger, the surviving corporation in the merger will merge with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation.

The unaudited pro forma condensed combined balance sheet as of December 31, 2021 gives effect to the combination as if this transaction had been completed on December 31, 2021 and combines the unaudited condensed consolidated balance sheet of Take-Two as of December 31, 2021 with Zynga’s audited consolidated balance sheet as of December 31, 2021.

The unaudited pro forma condensed combined statements of operations for the fiscal year ended March 31, 2021 and the nine months ended December 31, 2021 give effect to the combination as if it had occurred on April 1, 2020, the beginning of the earliest period presented, and combines the historical results of Take-Two and Zynga. The unaudited pro forma condensed combined statement of operations for the fiscal year ended March 31, 2021 combines the audited consolidated statement of operations of Take-Two for the fiscal year ended March 31, 2021, and Zynga’s derived unaudited consolidated statement of operations for the twelve months ended March 31, 2021. The unaudited pro forma condensed combined statement of operations for the nine months ended December 31, 2021 combines the unaudited condensed consolidated statement of operations of Take-Two for the nine months ended December 31, 2021 with Zynga’s derived unaudited consolidated statement of operations for the nine months ended December 31, 2021. The unaudited pro forma condensed combined financial information have been prepared pursuant to Article 11 of Regulation S-X.

The historical condensed consolidated financial statements of Take-Two and the historical consolidated financial statements of Zynga have been adjusted in the accompanying unaudited pro forma condensed combined financial information to give effect to pro forma events that are transaction accounting adjustments which are necessary to account for the combination, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited pro forma adjustments are based upon available information and certain assumptions that our management believes are reasonable.

The unaudited pro forma condensed combined financial information should be read in conjunction with:

•

The accompanying notes to the unaudited pro forma condensed combined financial information

•

The separate audited condensed consolidated financial statements of Take-Two as of and for the fiscal year ended March 31, 2021 and the related notes, included in Take-Two’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, incorporated by reference into this joint proxy statement/prospectus;

•

The separate unaudited condensed consolidated financial statements of Take-Two as of and for the nine months ended December 31, 2021 and the related notes, included in Take-Two’s Quarterly Report on Form 10-Q for the period ended December 31, 2021, incorporated by reference into this joint proxy statement/prospectus;

•

The separate audited consolidated financial statements of Zynga as of and for the fiscal year ended December 31, 2021 and the related notes, included in Zynga’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, incorporated by reference into this joint proxy statement/prospectus;

•

The separate unaudited consolidated financial statements of Zynga as of and for the three months ended March 31, 2021 and the related notes, included in Zynga’s Quarterly Report on Form 10-Q for the period ended March 31, 2021.

Description of the Combination

Pursuant to the merger agreement, Merger Sub 1 will be merged with and into Zynga with Zynga continuing as the surviving corporation and a wholly-owned subsidiary of Take-Two, and immediately following the merger, Zynga, the surviving corporation in the merger will merge with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation. As a result, each issued and outstanding share of Zynga common stock will be converted into a number of shares of the Take-Two’s common stock equal to the exchange ratio (defined below) and the right to receive $3.50 in cash.

The transaction includes a collar mechanism on the equity consideration based on the volume-weighted average price (“VWAP”) of Take-Two common stock (the “exchange ratio”). If Take-Two stock’s 20-day VWAP ending on the third trading day prior to closing is in a range from $156.50 to $181.88, the exchange ratio would be adjusted to deliver $6.36 of equity value based on that VWAP, plus $3.50 in cash. If the VWAP exceeds the higher end of that range, the Exchange Ratio would be 0.0350 per share and if the VWAP falls below the lower end of that range, the Exchange Ratio would be 0.0406 per share.

At the effective time, (i) the outstanding and unexercised options to purchase Zynga common stock will be assumed by Take-Two and automatically converted into options exercisable for shares of Take-Two Common stock (the “converted options”) and (ii) the issued and outstanding restricted stock unit awards with respect to Zynga common stock will be assumed by Take-Two and automatically converted into a Take-Two restricted stock unit award with respect to shares of Take-Two common stock (the “converted RSUs” and together with the converted options, the “converted awards”), in each case pursuant to the equity award exchange ratio. Following the effective time, the converted awards will vest based on continued service and will continue to be governed by substantially the same terms and conditions as were applicable to the corresponding Zynga equity awards prior to the effective time.

The merger agreement provided for a “go-shop” provision under which Zynga and its board of directors could actively solicit, receive, evaluate, and potentially enter negotiations with parties that offer Zynga alternative acquisition proposals during a 45-day period following the execution date of the definitive agreement, which expired on February 24, 2022. Upon expiration of the go-shop period, there is a no-shop provision where Zynga cannot solicit any new proposals, and, if it does so, it will have to pay a termination fee of $550,000,000 which is higher than the $400,000,000 that it would be required to pay for entering into Zynga alternative acquisition proposals under the go-shop provision.

Description of the Financing

As part of the transaction, Take-Two is in negotiations with J.P. Morgan, Wells Fargo, Bank of America, BNP Paribas, and HSBC (the “Commitment Parties”) and intends to secure additional financing in the form of a new term loan in an aggregate principal amount of $1,000,000,000 (“term loan A”) and certain bonds for an aggregate principal amount of $1,700,000,000 (“bonds”), although the allocation of the total $2,700,000,000 principal amount between the term loan A and the bonds is subject to change. Take-Two has received committed financing in the form of a new unsecured bridge loan facility of $2,700,000,000 from J.P. Morgan which it will use as a backstop and which will only be drawn upon in the event Take-Two cannot secure new financing with the Commitment Parties. Take-Two intends to fund the cash component of the transaction and the costs and expenses related to the transactions through a combination of cash and maturing short-term investments from its condensed consolidated balance sheet as well as the proceeds from this additional financing.

Convertible Senior Notes

In June 2019, Zynga issued $690,000,000 aggregate principal amount of 0.25% convertible senior notes due 2024 (the “2024 notes”). The conversion rate (without giving effect to any adjustment resulting from the

combination that may be required by the applicable indenture) is 120.3695 shares of Zynga common stock per $1,000 principal amount of 2024 notes, which is equal to a conversion price of approximately $8.31 per share of Zynga common stock. The principal amount for the 2024 notes as of December 31, 2021 was $690,000,000.

In December 2020, Zynga issued $874,500,000 aggregate principal amount of 0% convertible senior notes due 2026 (the “2026 notes”). The conversion rate (without giving effect to any adjustment resulting from the combination that may be required by the applicable indenture) is 76.5404 shares of Zynga common stock per $1,000 principal amount of 2026 notes, which is equal to a conversion price of approximately $13.07 per share of Zynga common stock. The principal amount for the 2026 notes as of December 31, 2021 was $874,500,000.

In connection with the issuances of the 2024 notes and 2026 notes, Zynga entered into privately negotiated capped call options with certain counterparties (the “2024 capped calls” and “2026 capped calls,” respectively). The 2024 capped calls had an initial strike price of approximately $8.31 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2024 notes and an initial cap price of $12.54 per share, subject to certain adjustments. The 2026 capped calls had an initial strike price of approximately $13.07 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 notes and an initial cap price of $17.42 per share, subject to certain adjustments. The 2024 capped calls and 2026 capped calls were intended to reduce the potential economic dilution to Zynga common stock upon any conversion of the 2024 notes or 2026 notes, respectively, and/or offset any cash payments made in excess of the principal amount of converted notes with such reduction and/or offset, as the case may be, subject to a maximum based on the cap price.

Upon completion of the combination, holders of the 2024 notes and 2026 notes will be entitled to elect to convert the convertible notes at a special make-whole conversion rate and, upon any such conversion, Take-Two will be entitled to settle such conversion for (i) cash, (ii) the cash and stock components of the merger consideration or (iii) a combination thereof. The holders of the 2024 notes and 2026 notes are expected to convert during the make-whole fundamental change period (as defined in the applicable indentures) subsequent to the effective time as the terms of the indentures provide an economic incentive for holders to convert their notes, and as such, the related capped calls are also expected to be settled. Take-Two is also expected to settle any conversions of the convertible notes in the form of the merger consideration (i.e., the same mix of cash and Take-Two stock). The pro forma condensed combined financial information includes convertible notes and capped call adjustments to reflect the probable conversion of all of the convertible notes (and the settlement thereof by Take-Two in the merger consideration) and settlement of the associated capped calls.

Accounting for the Combination

The combination is being accounted for as a business combination using the acquisition method with Take-Two as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, the aggregate merger consideration will be allocated to Zynga’s assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the combination. The process of valuing the net assets of Zynga immediately prior to the combination, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the aggregate merger consideration allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to revision based on a final determination of fair value. Refer to Note 1—Basis of Presentation below for more information.

The unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the combination occurred as of the dates indicated. The unaudited pro forma condensed combined financial information also should not be considered indicative of the future results of operations or financial position of Take-Two.

The combination is subject to closing adjustments that have not yet been finalized. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information as required by SEC rules. Differences between these preliminary estimates and the final combination accounting may be material.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2021

(in thousands)

		Historical								Transaction Accounting Adjustments				Notes				Pro Forma Combined
		TAKE-TWO INTERACTIVE SOFTWARE, INC.				Zynga Inc. Reclassified (Note 2)
Assets
Current assets:
Cash and cash equivalents		$	986,741			$	983,989			$	(1,360,816	)			4	(A)		$	609,914
Short-term investments			1,479,013				168,961				(621,468	)			4	(A)			1,026,506
Restricted cash and cash equivalents			267,010				161,006				—								428,016
Accounts receivable, net of allowances			647,907				242,456				—								890,363
Inventory			11,678				—				—								11,678
Software development costs and licenses			47,576				—				—								47,576
Deferred cost of goods sold			15,369				—				—								15,369
Prepaid expenses and other			249,719				92,074				—								341,793
Total current assets			3,705,013				1,648,486				(1,982,284	)							3,371,215
Fixed assets, net			235,957				30,322				—								266,279
Right-of-use assets			212,491				86,366				—								298,857
Software development costs and licenses, net of current portion			737,935				—				—								737,935
Goodwill			679,997				3,601,096				5,681,969				4	(B)			9,963,062
Other intangibles, net			274,297				900,504				3,799,496				4	(C)			4,974,297
Deferred tax assets			77,721				2,410				104,986				4	(D)			185,117
Long-term restricted cash and cash equivalents			103,445				40,200				—								143,645
Other assets			331,097				49,331				—								380,428
Total assets		$	6,357,953			$	6,358,715			$	7,604,167							$	20,320,835
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	100,720			$	95,279			$	—							$	195,999
Accrued expenses and other current liabilities			1,026,246				702,599				—								1,728,845
Deferred revenue			910,899				748,127				—								1,659,026
Current portion of Term loan A, net			—				—				50,000				4	(E)			50,000
Lease liabilities			34,480				17,083				—								51,563
Total current liabilities			2,072,345				1,563,088				50,000								3,685,433
Convertible senior notes, net			—				1,343,831				(1,343,831	)			4	(E)			—
Term loan A, net			—				—				941,250				4	(E)			941,250
Bonds, net			—				—				1,685,120				4	(E)			1,685,120
Non-current deferred revenue			68,218				299				—								68,517
Non-current lease liabilities			209,646				133,430				—								343,076
Non-current software development royalties			113,991				—				—								113,991
Deferred tax liabilities, net			29,343				93,796				991,765				4	(D)			1,114,904
Other long-term liabilities			198,673				112,329				—								311,002
Total liabilities			2,692,216				3,246,773				2,324,304								8,263,293
Stockholders’ equity:
Common stock			1,391				7				529				4	(F)			1,927
Additional paid-in capital			2,541,492				5,624,994				2,924,156				4	(F)			11,090,642
Treasury Stock			(1,020,584	)			—				—								(1,020,584	)
Retained earnings (accumulated deficit)			2,178,021				(2,405,960	)			2,248,079				4	(F)			2,020,140
Accumulated other comprehensive loss			(34,583	)			(107,099	)			107,099				4	(F)			(34,583	)
Total stockholders’ equity			3,665,737				3,111,942				5,279,863								12,057,542
Total liabilities and stockholders’ equity		$	6,357,953			$	6,358,715			$	7,604,167							$	20,320,835

See the accompanying notes to Unaudited Pro Forma Condensed Combined Financial Information.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2021

(in thousands, except per share amounts)

		Historical
		TAKE-TWO INTERACTIVE SOFTWARE, INC.				Zynga Inc. Reclassified (Note 2)				Transaction Accounting Adjustments				Notes				Pro Forma Combined
Net revenue		$	2,574,796			$	2,120,251			$	—							$	4,695,047
Cost of goods sold			1,136,776				753,032				263,987				5	(A)			2,153,795
Gross profit			1,438,020				1,367,219				(263,987	)							2,541,252
Selling and marketing			375,159				700,273				(1,261	)			5	(B)			1,074,171
General and administrative			362,484				197,180				(2,502	)			5	(C)			557,162
Research and development			310,458				331,737				(7,833	)			5	(D)			634,362
Depreciation and amortization			44,642				9,830				14,063				5	(E)			68,535
Business reorganization			546				—				—								546
Impairment related to real estate assets			—				66,757				—								66,757
Total operating expenses			1,093,289				1,305,777				(2,467	)							2,401,533
Income (loss) from operations			344,731				61,442				(266,454	)							139,719
Interest and other, net			(7,228	)			(60,062	)			(25,455	)			5	(F)			(92,745	)
Gain (loss) on long-term investments, net			6,054				—				—								6,054
Income (loss) before income taxes			343,557				1,380				(291,909	)							53,028
Provision for (benefit from) income taxes			36,507				82,598				(107,101	)			5	(G)			12,004
Net income (loss)		$	307,050			$	(81,218	)		$	(184,808	)						$	41,024
Earnings per share:
Basic earnings per share		$	2.66															$	0.24
Diluted earnings per share		$	2.63															$	0.24
Weighted average shares outstanding:
Weighted average shares—basic			115,572												5	(H)			170,972
Weighted average shares—diluted			116,810												5	(H)			173,059

TAKE-TWO INTERACTIVE SOFTWARE, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED MARCH 31, 2021

(in thousands, except per share amounts)

		Historical
		TAKE-TWO INTERACTIVE SOFTWARE, INC.				Zynga Inc. Reclassified (Note 2)				Transaction Accounting Adjustments				Notes				Pro Forma Combined
Net revenue		$	3,372,772			$	2,251,333			$	—							$	5,624,105
Cost of goods sold			1,535,085				923,770				416,676				5	(A)			2,875,531
Gross profit			1,837,687				1,327,563				(416,676	)							2,748,574
Selling and marketing			444,985				798,612				236,877				5	(B)			1,480,474
General and administrative			390,683				450,682				218,852				5	(C)			1,060,217
Research and development			317,311				348,924				35,522				5	(D)			701,757
Depreciation and amortization			55,596				13,391				18,750				5	(E)			87,737
Business reorganization			(272	)			—				—								(272	)
Total operating expenses			1,208,303				1,611,609				510,001								3,329,913
Income (loss) from operations			629,384				(284,046	)			(926,677	)							(581,339	)
Interest and other, net			8,796				(35,540	)			(56,237	)			5	(F)			(82,981	)
Gain (loss) on long-term investments, net			39,636				—				—								39,636
Income (loss) before income taxes			677,816				(319,586	)			(982,914	)							(624,684	)
Provision for (benefit from) income taxes			88,930				28,889				(223,885	)			5	(G)			(106,066	)
Net income (loss)		$	588,886			$	(348,475	)		$	(759,029	)						$	(518,618	)
Earnings (loss) per share:
Basic earnings (loss) per share		$	5.14															$	(3.07	)
Diluted earnings (loss) per share		$	5.09															$	(3.07	)
Weighted average shares outstanding:
Weighted average shares—basic			114,602												5	(H)			169,038
Weighted average shares—diluted			115,744												5	(H)			169,038

TAKE-TWO INTERACTIVE SOFTWARE, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1.

Basis of Presentation

The pro forma condensed combined financial information has been prepared by Take-Two in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined financial information presented is for illustrative purposes only and is not necessarily indicative of what Take-Two’s condensed consolidated statements of operations or condensed consolidated balance sheet would have been had the combination been completed as of the dates indicated or will be for any future periods. The pro forma condensed combined financial information do not purport to project the future financial position or results of operations of Take-Two following the completion of the combination. The pro forma condensed combined financial information reflects transaction accounting adjustments management believes are necessary to present fairly Take-Two’s pro forma financial position and results of operations following the closing of the combination as of and for the periods indicated. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, or revenue enhancements that the combined company may achieve as a result of the combination, nor does it reflect the costs to integrate the operations of Take-Two and Zynga or the costs necessary to achieve any cost savings, operating synergies, and revenue enhancements.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, with Take-Two as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the historical condensed consolidated financial statements of Take-Two and the historical consolidated financial statements of Zynga. Under ASC Topic 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of merger consideration over the fair value of assets acquired and liabilities assumed is allocated to goodwill.

The allocation of the purchase consideration for the merger depends upon certain estimates and assumptions, all of which are preliminary. The allocation of the purchase consideration has been made for the purpose of developing the unaudited pro forma condensed combined financial information. A final determination of fair values of assets acquired and liabilities assumed relating to the acquisition could differ materially from that used for the preliminary allocation of purchase consideration. The final valuation will be based on the actual assets acquired and liabilities assumed of Zynga existing at the closing date of the combination and could result in a material difference to the unaudited pro forma condensed combined financial information.

The transaction accounting adjustments represent Take-Two management’s best estimates and are based upon currently available information and certain assumptions that Take-Two believes are reasonable under the circumstances. Take-Two is not aware of any material transactions between Take-Two and Zynga (prior to the announcement of the combination) during the periods presented; hence, adjustments to eliminate transactions between Take-Two and Zynga have not been reflected in the unaudited pro forma condensed combined financial information.

Upon completion of the combination, Take-Two will perform a comprehensive review of Zynga’s accounting policies and reclassifications. As a result of the review, Take-Two may identify differences between the accounting policies and reclassifications of the two companies, which when conformed, could have a material impact on the unaudited pro forma condensed combined financial information. With the information currently available, Take-Two has determined that no significant adjustments are necessary to conform Zynga’s consolidated financial statements to the accounting policies used by Take-Two. As a result, the unaudited pro forma condensed combined financial information presented assumes there are no differences in accounting policies. However, certain reclassification adjustments have been made to conform Zynga’s historical financial statement presentation to Take-Two’s financial statement presentation.

The unaudited pro forma condensed combined financial information presented reflects the early adoption of ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under this new standard, deferred revenue acquired in a business combination is measured pursuant to ASC Topic 606, Revenue from Contracts with Customers, rather than its assumed acquisition date fair value. Take-Two expects to early adopt this standard in fiscal year 2023 (as of April 1, 2022), prior to the completion of the combination and therefore expects to account for the combination under the new standard. The adoption of the standard will have no retrospective impact to Take-Two’s historical condensed combined financial statements or Zynga’s historical consolidated financial statements.

The pro forma condensed combined balance sheet, as of December 31, 2021, the pro forma condensed combined statements of operations for the fiscal year ended March 31, 2021, and the pro forma condensed combined statements of operations for the nine months ended December 31, 2021 presented herein, are based on the historical condensed combined financial statements of Take-Two and the historical consolidated financial statements of Zynga. The adjustments presented on the unaudited pro forma condensed combined financial information has been identified and presented to provide relevant information necessary to assist in understanding the post-combination company upon consummation of the proposed transactions.

The unaudited pro forma condensed combined statement of operations for the nine months ended December 31, 2021 has been derived from the following:

•

The unaudited condensed consolidated statement of operations of Take-Two for the nine months ended December 31, 2021

•

The derived unaudited consolidated statement of operations of Zynga for the nine months ended December 31, 2021

Zynga’s results for the nine months ended December 31, 2021 were derived by subtracting the results for the unaudited three months ended March 31, 2021 from its audited statement of operations for the fiscal year ended December 31, 2021.

The unaudited pro forma condensed combined statement of operations for the fiscal year ended March 31, 2021 has been derived from the following:

•

The audited condensed consolidated statement of operations of Take-Two for the fiscal year ended March 31, 2021

•

The derived unaudited consolidated statement of operations of Zynga for the twelve months ended March 31, 2021

Zynga’s results for the twelve months ended March 31, 2021 were derived by adding the results of the unaudited three months ended March 31, 2021 to its audited statement of operations for the fiscal year ended December 31, 2020 and subtracting the results of the unaudited three months ended March 31, 2020.

The unaudited pro forma condensed combined balance sheet has been derived from the following:

•

The unaudited condensed consolidated balance sheet of Take-Two as of December 31, 2021

•

The audited consolidated balance sheet of Zynga as of December 31, 2021

2.

Reclassification Adjustments

The accounting policies used in the preparation of this unaudited pro forma condensed combined financial information are those set out in Take-Two’s audited condensed consolidated financial statements as of and for the fiscal year ended March 31, 2021 and unaudited condensed consolidated financial statements as of and for the nine months ended December 31, 2021. With the information currently available, Take-Two has determined that

no significant adjustments are necessary to conform Zynga’s consolidated financial statements to the accounting policies used by Take-Two in the preparation of the unaudited pro forma condensed combined financial information.

The reclassification adjustments are based on currently available information and assumptions management believes are, under the circumstances and given the information available at this time, reasonable, and reflective of adjustments necessary to report Take-Two’s financial condition and results of operations as if the combination were completed.

The combined company will finalize the review of accounting policies and reclassifications after the transaction closes, which could be materially different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein. The reclassification adjustments currently identified are as follows:

A) Refer to the table below for a summary of reclassification adjustments made to present Zynga’s consolidated balance sheet as of December 31, 2021 to conform with that of Take-Two’s (amounts in 000’s):

Zynga Historical Consolidated Balance Sheet Line Items		Take-Two Historical Consolidated Balance Sheet Line Items		Zynga Historical Consolidated Balances as of December 31, 2021				Reclassifications				Notes		Zynga Reclassified as of December 31, 2021
Cash and cash equivalents		Cash and cash equivalents		$	983,989			$	—					$	983,989
Short-term investments		Short-term investments			168,961				—						168,961
Accounts receivable, net of allowance		Accounts receivable, net of allowances			242,456				—						242,456
Restricted cash		Restricted cash and cash equivalents			161,006				—						161,006
		Inventory			—				—						—
Prepaid expenses		Prepaid expenses and other			56,667				35,407			(a)			92,074
Other current assets					35,407				(35,407	)		(a)			—
		Software development costs and licenses			—				—						—
		Deferred cost of goods sold			—				—						—
Goodwill		Goodwill			3,601,096				—						3,601,096
Intangible assets, net		Other intangibles, net			900,504				—						900,504
Property and equipment, net		Fixed assets, net			30,322				—						30,322
Right-of-use assets		Right-of-use assets			86,366				—						86,366
		Software development costs and licenses, net of current portion			—				—						—
		Deferred tax assets			—				2,410			(c)			2,410
Restricted cash		Long-term restricted cash and cash equivalents			40,200										40,200
Prepaid expenses					24,958				(24,958	)		(b)			—
Other non-current assets		Other assets			26,783				22,548			(b) (c)			49,331
Accounts payable		Accounts payable			95,279				—						95,279
Income tax payable					52,213				(52,213	)		(d)			—

Zynga Historical Consolidated Balance Sheet Line Items		Take-Two Historical Consolidated Balance Sheet Line Items		Zynga Historical Consolidated Balances as of December 31, 2021				Reclassifications				Notes		Zynga Reclassified as of December 31, 2021
Deferred revenue		Deferred revenue			748,127				—						748,127
Operating lease liabilities		Lease liabilities			17,083				—						17,083
Other current liabilities		Accrued expenses and other current liabilities			650,386				52,213			(d)			702,599
Convertible senior notes, net					1,343,831				—						1,343,831
Deferred revenue		Non-current deferred revenue			299				—						299
Deferred tax liabilities, net		Deferred tax liabilities			93,796				—						93,796
Non-current operating lease liabilities		Non-current lease liabilities			133,430				—						133,430
		Non-current software development royalties			—				—						—
Other non-current liabilities		Other long-term liabilities			112,329										112,329
Common stock and additional paid in capital		Common stock			5,625,001				(5,624,994	)		(e)			7
		Additional paid-in capital			—				5,624,994			(e)			5,624,994
		Treasury stock			—				—						—
Accumulated other comprehensive income (loss)		Accumulated other comprehensive loss			(107,099	)			—						(107,099	)
Accumulated deficit		Retained earnings (accumulated deficit)			(2,405,960	)			—						(2,405,960	)

Balance Sheet Reclassification items of Zynga:

(a)	Represents a reclassification of $35,407 thousand of Other current assets to Prepaid expenses and other.

(b)	Represents a reclassification of $24,958 thousand of Prepaid expenses to Other assets.

(c)	Represents a reclassification of $2,410 thousand of Other non-current assets to Deferred tax assets.

(d)	Represents a reclassification of $52,213 thousand of Income tax payable to Accrued expenses and other current liabilities.

(e)	Represents a reclassification of $5,624,994 thousand of Common stock and additional paid in capital to Additional paid-in capital.

B) Refer to the table below for a summary of reclassification adjustments made to present Zynga’s derived statement of operations for the nine months ended December 31, 2021 to conform with that of Take-Two’s (amounts in 000’s):

Zynga Historical Consolidated Statement of Operations Line Items		Take-Two Historical Statement of Operations Line Items		Zynga Derived Historical (Unaudited) Statement of Operations for nine months ended December 31, 2021				Reclassifications				Notes		Zynga Reclassified for the nine months ended December 31, 2021
Revenue:
Online game				$	1,692,219			$	(1,692,219	)		(a)		$	—
Advertising and other					428,032				(428,032	)		(b)			—
		Net revenue							2,120,251			(a) (b)			2,120,251
Cost of revenue		Cost of goods sold			754,194				(1,162	)		(c) (d)			753,032
Research and development		Research and development			405,167				(73,430	)		(c) (d) (e)			331,737
Sales and marketing		Selling and marketing			706,423				(6,150	)		(c) (d)			700,273
General and administrative		General and administrative			126,268				70,912			(c) (d) (e)			197,180
		Depreciation and amortization			—				9,830			(c)			9,830
		Business reorganization			—				—						—
Impairment related to real estate assets					66,757				—						66,757
Interest income					4,669				(4,669	)		(f)			—
Interest expense					(44,512	)			44,512			(g)			—
Other income (expense), net					(20,219	)			20,219			(h)			—
		Interest and other, net			—				(60,062	)		(f) (g) (h)			(60,062	)
		Gain (loss) on long-term investments, net			—				—						—
Provision for (benefit from) income taxes		Provision for (benefit from) income taxes			82,598				—						82,598

Income Statement of Operations Reclassification notes of Zynga:

(a)	Represents a reclassification of $1,692,219 thousand of Online game revenue to Net revenue.

(b)	Represents a reclassification of $428,032 thousand of Advertising and other revenue to Net revenue.

(c)	Represents a reclassification of deprecation of $(377) thousand from Cost of revenue, $8,049 thousand from General and administrative, $2,159 thousand from Research and development, and $(1) thousand from Sales and marketing to Depreciation and amortization.

(d)	Represents a reclassification of overhead expenses of $1,539 thousand from Cost of revenue, $24,685 thousand from Research and development, and $6,151 thousand from Sales and marketing to General and administrative.

(e)	Represents a reclassification of $46,586 thousand of contingent consideration for prior acquisitions from Research and development to General and administrative.

(f)	Represents a reclassification of $4,669 thousand of Interest income to Interest and other, net.

(g)	Represents a reclassification of $44,512 thousand of Interest expense to Interest and other, net.

(h)	Represents a reclassification of $(20,219) thousand of Other income (expense), net to Interest and other, net.

C) Refer to the table below for a summary of reclassification adjustments made to present Zynga’s derived statement of operations for the twelve months ended March 31, 2021 to conform with that of Take-Two’s (amounts in 000’s):

Zynga Historical Statement of Operations Line Items		Take-Two Historical Statement of Operations Line Items		Zynga Derived Historical (Unaudited) Statement of Operations for year ended March 31, 2021				Reclassifications				Notes		Zynga Reclassified for the year ended March 31, 2021
Revenue:
Online game				$	1,879,840			$	(1,879,840	)		(a)		$	—
Advertising and other					371,493				(371,493	)		(b)			—
		Net revenue							2,251,333			(a) (b)			2,251,333
Cost of revenue		Cost of goods sold			926,298				(2,528	)		(c) (d)			923,770
Research and development		Research and development			656,555				(307,631	)		(c) (d) (e)			348,924
Sales and marketing		Selling and marketing			809,029				(10,417	)		(c) (d)			798,612
General and administrative		General and administrative			143,497				307,185			(c) (d) (e)			450,682
		Depreciation and amortization			—				13,391			(c)			13,391
		Business reorganization			—				—						—
Interest income					7,775				(7,775	)		(f)			—
Interest expense					(38,045	)			38,045			(g)			—
Other income (expense), net					(5,270	)			5,270			(h)			—
		Interest and other net			—				(35,540	)		(f)(g)(h)			(35,540	)
		Gain (loss) on long-term investments, net													—
Provision for (benefit from) income taxes		Provision for (benefit from) income taxes			28,889										28,889

Statement of Operations Reclassification notes of Zynga:

(a)	Represents a reclassification of $1,879,840 thousand of Online game revenue to Net revenue.

(b)	Represents a reclassification of $371,493 thousand of Advertising and other revenue to Net revenue.

(c)	Represents a reclassification depreciation expense of $211 thousand from Cost of revenue, $11,111 thousand from General and administrative, $2,063 thousand from Research and development, and $6 thousand from Sales and marketing to Depreciation and amortization.

(d)	Represents a reclassification of overhead expenses of $2,317 thousand from Cost of revenue, $32,933 thousand from Research and development, and $10,411 thousand from Sales and marketing to General and administrative.

(e)	Represents a reclassification of $272,635 thousand of contingent consideration from prior acquisitions from Research and development to General and administrative.

(f)	Represents a reclassification of $7,775 thousand of Interest income to Interest and other, net.

(g)	Represents a reclassification of $38,045 thousand of Interest expense to Interest and other, net.

(h)	Represents a reclassification of $(5,270) thousand of Other income (expense), net to Interest and other, net.

3.

Calculation of Estimated Merger Consideration and Preliminary Purchase Price Allocation

A. Estimated Merger Consideration

The estimated merger consideration for the purpose of this unaudited pro forma condensed combined financial information is approximately $11,254,593 thousand. The actual stock consideration will change based on fluctuations in the share price of Take-Two’s common stock price and the number of common shares of Zynga outstanding on the closing date. The following table summarizes the preliminary estimate of the merger consideration to be transferred as a result of the combination:

Preliminary calculation of estimated merger consideration (in 000’s, except share price, exchange ratio, and cash received per share)						Amount
Share consideration
Shares of Zynga as of December 31, 2021			1,130,523
Exchange ratio(i)			0.04060
Take-Two common stock to be issued			45,899
Share price on March 28, 2022		$	156.50
Estimated value of Take-Two common stock to be issued to Zynga stockholders pursuant to the Merger Agreement(ii)						$	7,183,194
Cash consideration
Cash received per share of Zynga		$	3.50
Estimated value of cash consideration received by Zynga stockholders						$	3,956,831
Estimated replacement equity awards for Zynga Equity Awards(iii)							114,568
Preliminary fair value of estimated total merger consideration						$	11,254,593

(i)

The transaction includes a collar mechanism on the equity consideration, so that if Take-Two’s 20-day VWAP ending on the third trading day prior to closing is in a range from $156.50 to $181.88, the exchange ratio would be adjusted to deliver $6.36 of equity value based on that VWAP, plus $3.50 in cash. If the VWAP exceeds the higher end of that range, the exchange ratio would be 0.0350 per share, and if the VWAP falls below the lower end of that range, the exchange ratio would be 0.0406 per share.

(ii)

The stock consideration component of the estimated merger consideration is computed based on the total outstanding shares of Zynga common stock as of December 31, 2021, multiplied by the 0.04060 exchange ratio and the closing price of Take-Two common stock on the NASDAQ on March 28, 2022 of $156.50.

(iii)

Estimated consideration for replacement of Zynga’s outstanding equity awards, including partial acceleration of certain equity awards based on pre-existing terms of the awards. All other outstanding Zynga

equity awards for continuing employees will be replaced by Take-Two’s equity awards with similar terms. A portion of the fair value of Take-Two’s equity awards issued represents consideration transferred, while the remaining portion represents compensation expense based on the vesting terms of the Converted Awards. The final value will be impacted by changes in the price of Take-Two common stock and the number of Zynga awards outstanding at the actual date of the closing of the combination.

The final purchase consideration could significantly differ from the amounts presented in the unaudited pro forma condensed combined financial information due to movements in Take-Two’s common stock price up to the closing date of the combination. A sensitivity analysis related to the fluctuation in the Take-Two common stock price was performed to assess the impact of a hypothetical change of 10% on the Take-Two share closing price on the estimated purchase consideration and goodwill as of the closing date.

The following table shows the estimated purchase consideration and goodwill resulting from a change in Take-Two share price:

Change in Share Price (in 000’s, except share price)		Take-Two Share Price				Estimated Purchase Consideration				Estimated Goodwill
Increase of 10%		$	172.15			$	11,972,952			$	10,001,424
Decrease of 10%			140.85				10,536,306				8,564,778

B. Preliminary Purchase Price Allocation

Under the acquisition method of accounting, the identifiable assets acquired, and liabilities assumed of Zynga will be recognized and measured at fair value as of the closing date of the combination and added to those of Take-Two. The determination of fair value used in the transaction-related adjustments presented herein are preliminary and based on management estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared to illustrate the estimated effect of the combination. The costs of finite-lived intangible assets are amortized through expense over their estimated lives. The final determination of the purchase price allocation, upon the completion of the combination, will be based on Zynga’s assets acquired and liabilities assumed as of that date and will depend on a number of factors that cannot be predicted with certainty at this time. Therefore, the actual allocations will differ from the transaction accounting adjustments presented. The allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly, the pro forma purchase price allocation will be subject to further adjustments as additional information becomes available and as additional analyses and final valuations are completed. There can be no assurances that these additional analyses and final valuations will not result in significant changes to the estimates of fair value set forth below.

The following table sets forth a preliminary allocation of the estimated merger consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Zynga based on Zynga’s audited consolidated balance sheet as of December 31, 2021, with the excess recorded to goodwill:

Description (in 000’s)		Preliminary Purchase Price Allocation
Preliminary fair value of estimated total merger consideration		$	11,254,593
Assets
Cash and cash equivalents(i)			906,612
Accounts receivable, net			242,456
Other current assets			585,366
Fixed assets, net			30,322
Right-of-use assets			86,366
Other intangibles, net			4,700,000
Other assets(ii)			196,927
Total assets			6,748,049
Liabilities
Accounts payable			95,279
Accrued expenses and other current liabilities			702,599
Deferred revenue			748,127
Lease liabilities			17,083
Convertible senior notes, net			1,859,336
Non-current deferred revenue			299
Non-current lease liabilities			133,430
Deferred tax liabilities, net(iii)			1,108,039
Other long-term liabilities			112,329
Total liabilities			4,776,521
Less: Net assets			1,971,528
Goodwill		$	9,283,065

(i)	Adjusted for an estimated $77,377 thousand of transaction costs to be incurred by Zynga through the closing date.

(ii)	As a result of the merger, Take-Two expects to realize the benefit of certain deferred tax assets where Zynga previously recorded a valuation allowance, therefore the valuation allowance will be reduced in purchase accounting.

(iii)

Deferred tax liabilities were derived based on fair value of identified intangible assets.

C. Intangible Assets

Preliminary identifiable intangible assets in the unaudited pro forma condensed combined financial information consist of the following:

		Preliminary Fair Value (in 000’s)				Estimated Useful Life (in years)
Game IP		$	3,900,000				7
IPR&D			350,000				Indefinite
Corporate trademark			150,000				8
Users			200,000				1
Hyper-casual developer relationships			100,000				4
Total		$	4,700,000

The estimated fair values and useful lives of identifiable intangible assets are preliminary and have been performed based on publicly available benchmarking information, as there are limitations on the type of information that can be exchanged between Take-Two and Zynga prior to the effective time. As discussed above, the amount that will ultimately be allocated to identifiable intangible assets and the related amount of amortization, may differ materially from this preliminary allocation. Any change in the valuation of intangible assets would cause a corresponding increase or decrease in the balance of goodwill. A hypothetical 10% change in the valuation of intangible assets would result in a change to annual amortization expense of approximately $80,089 thousand, assuming a weighted average useful life of 7 years.

4.	Transaction Accounting Adjustments for Condensed Combined Balance Sheet

(A) Reflects the adjustments to the Cash and cash equivalents:

Description (in 000’s)		Amount
Sources:
Proceeds from Term loan A		$	1,000,000
Proceeds from Bonds			1,700,000
Settlement of capped call asset(i)			163,325
Sale of short-term investments(ii)			621,468
Less: Capitalized debt issuance costs			(23,630	)
			3,461,163
Uses:
Estimated value of cash consideration received by Zynga shareholders(iii)			(3,956,831	)
Estimated transaction costs(iv)			(204,732	)
Conversion of 2024 Notes and 2026 Notes(v)			(660,416	)
			(4,821,979	)
Pro forma net adjustment to Cash and cash equivalents		$	(1,360,816	)

(i)

Represents the estimated cash proceeds expected to be received from the settlement of the capped call options, which were entered into by Zynga in connection with the 2024 notes and 2026 notes. Upon completion of the combination, the holders of the 2024 notes and 2026 notes are expected to convert during the make-whole fundamental change period (as defined in the applicable indentures) subsequent to the effective time as the terms of the indentures provide an economic incentive for holders to convert all of their notes, and as such the related capped call options are expected to be terminated in connection with the conversion of the convertible notes. To the extent that the actual settlement proceeds are more or less than the assumed proceeds, cash and cash equivalents would increase or decrease by a corresponding amount. A sensitivity analysis related to the volatility of the cash settlement amount was performed to assess the impact of a hypothetical change of 10% in the volatility on the estimated cash proceeds as of the closing date.

The following table shows the estimated increase/decrease of cash proceeds from the settlement of the capped call resulting from a change in the expected volatility:

Change in Volatility (in 000’s)		Estimated change in Cash and cash equivalents
Increase of 10%		$	(11,162	)
Decrease of 10%			10,078

(ii)	Reflects the liquidation of Take-Two short-term investments to partially fund the combination.

(iii)

Cash paid to Zynga shareholders as part of the merger consideration. Refer to Note 3(A) for further details regarding the estimated merger consideration.

(iv)	These costs consist of legal advisory, financial advisory, accounting, and consulting costs of Take-Two and Zynga.

(v)

Reflects the cash payment to settle the 2024 notes and 2026 notes. Upon completion of the combination, holders of the notes will be entitled to elect to convert the convertible notes at a special make-whole conversion rate and, upon any such conversion, Take-Two will be entitled to settle such conversion for (i) cash, (ii) the cash and stock components of the merger consideration or (iii) a combination thereof. The holders of the 2024 notes and 2026 notes are expected to convert during the make-whole fundamental change period (as defined in the applicable indenture) subsequent to the effective time and as such are reflected as an adjustment. Take-Two is also expected to settle any conversions of the convertible notes in the form of the merger consideration (i.e., the same mix of cash and Take-Two stock). The conversions are assumed to be probable as the terms of the indentures provide an economic incentive for holders to convert all of their notes during the make-whole fundamental change period.

(B) Reflects the elimination of Zynga’s historical goodwill and the capitalization of the preliminary goodwill for the estimated merger consideration in excess of the fair value of the net assets acquired in connection with the combination:

Description (in 000’s)		Amount
Fair value of consideration transferred in excess of the preliminary fair value of assets acquired and liabilities assumed(i)		$	9,283,065
Elimination of Zynga’s historical goodwill			(3,601,096	)
Pro forma net adjustment to goodwill		$	5,681,969

(i)

Refer to the table in Note 3(B), above, for the calculation of the fair value of consideration transferred in excess of the preliminary fair value of assets acquired and liabilities assumed based on the preliminary allocation of the estimated merger consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Zynga based on Zynga’s audited consolidated balance sheet as of December 31, 2021.

(C) Reflects the preliminary purchase accounting adjustments for estimated intangible assets based on the acquisition method of accounting:

Description (in 000’s)		Amount
Fair value of intangible assets acquired		$	4,700,000
Elimination of Zynga’s historical intangible assets			(900,504	)
Pro forma net adjustment to intangible assets, net		$	3,799,496

(D) Reflects the deferred tax impact resulting from pro forma fair value adjustments of identified intangible assets of $1,014,243 thousand, and the release of the valuation allowance of $104,986 thousand based on the applicable statutory tax rate with the respective estimated purchase price allocation. In addition, Zynga’s historical deferred tax liability of $22,478 thousand related to the 2024 notes and 2026 notes was released as a result of the conversion (refer to Note 5(F), below). The effective tax rate of the combined company could be significantly different (either higher or lower) depending on post-combination activities, including cash needs, the geographical mix of income and changes in tax law. Because the tax rates used for the pro forma condensed combined financial information are estimated, the blended rate will likely vary from the actual effective rate in

periods subsequent to completion of the combination. This determination is preliminary and subject to change based upon the final determination of the fair value of the acquired assets and assumed liabilities.

(E) Reflects adjustments to current and long-term debt for borrowings to fund the combination net of aggregate reductions in long-term debt. The adjustments to current and long-term debt are summarized as follows:

Description (in 000’s)		Amount
Short term debt
Record current portion of Term loan A(i)		$	50,000
Pro forma net adjustment to short-term debt		$	50,000
Long term debt
Record noncurrent portion of Term loan A(i)		$	950,000
Record Bonds(i)			1,700,000
Incremental fair value of 2024 Notes and 2026 Notes acquired(ii)			515,505
Conversion of 2024 Notes and 2026 Notes(ii)			(1,859,336	)
Less: Capitalized debt issuance costs			(23,630	)
Pro forma net adjustment to long-term debt			1,282,539
Pro forma net adjustment to total debt		$	1,332,539

(i)	Reflects expected borrowings needed to consummate the combination. Actual future borrowings may vary based on working capital needs to operate the business following the combination.

(ii)

Upon completion of the combination, holders of the notes will be entitled to elect to convert the convertible notes at a special make-whole conversion rate and, upon any such conversion, Take-Two will be entitled to settle such conversion for (i) cash, (ii) the cash and stock components of the merger consideration or (iii) a combination thereof. The carrying value of the 2024 notes and 2026 notes have been adjusted to fair value. Fair value was determined by applying the cash and stock components of the merger consideration to the number of shares derived by converting the ending principal balance as of December 31, 2021 of the 2024 notes and 2026 notes utilizing their respective conversion ratios and make-whole fundamental change adjustments. The pro forma condensed combined financial information also includes convertible notes adjustments to reflect the probable conversion of the convertible notes. The holders of the 2024 notes and 2026 notes are expected to convert during the make-whole fundamental change period (as defined in the applicable indenture) subsequent to the effective time and as such are reflected as an adjustment. The conversions are assumed to be probable as the terms of the indentures provide an economic incentive for holders to convert all of their notes during the make-whole fundamental change period.

(F) Reflects adjustments to Stockholders’ equity:

Description (in 000’s)		Common stock				Additional paid-in capital				Retained earnings (accumulated deficit)				Accumulated other comprehensive loss
Value of estimated shares of Take-Two common stock issued to Zynga stockholders		$	459			$	7,182,735			$	—			$	—
Estimated replacement equity awards for Zynga Equity Awards attributable to pre-combination service			—				114,568				—				—
One time stock-based compensation expense for accelerated awards(i)			—				30,526				(30,526	)			—
Estimated transaction costs(ii)			—				—				(204,732	)			—
Conversion of the 2024 Notes and 2026 Notes, net of tax			77				1,221,321				—				—
Elimination of Zynga’s estimated transaction costs			—				—				77,377				—
Elimination of Zynga’s historical stockholders’ equity			(7	)			(5,624,994	)			2,405,960				107,099
Pro forma net adjustment to total equity		$	529			$	2,924,156			$	2,248,079			$	107,099

(i)	Take-Two expects to record a one-time post-combination stock compensation expense of $30,526 thousand related to the decision to accelerate certain unvested share-based awards in contemplation of the combination.

(ii)	Reflects legal advisory, financial advisory, accounting, and consulting costs for Take-Two and Zynga resulting in an adjustment to Retained earnings (accumulated deficit).

5. Transaction Accounting Adjustments for Condensed Combined Statements of Operations

Adjustments included in the Transaction Accounting Adjustments column in the accompanying unaudited pro forma condensed combined statements of operations the nine months ended December 31, 2021 and for the fiscal year ended March 31, 2021 are as follows:

(A) Reflects the adjustments to Cost of goods sold, including the amortization of the estimated fair value of intangibles recognized through cost of goods sold and the preliminary incremental stock-based compensation expense for Take-Two replacement equity awards:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Amortization expense for acquired intangible assets(i)		$	436,608			$	582,143
Elimination of Zynga’s historical intangible asset amortization			(172,416	)			(166,354	)
Elimination of Zynga’s historical stock-based compensation expense			(2,255	)			(2,171	)
Stock-based compensation expense after equity award replacement and fair value remeasurement(ii)			2,050				3,058
Pro forma net adjustment to Cost of goods sold		$	263,987			$	416,676

(i)

The amortization of intangible assets is calculated on a straight-line basis. The amortization is based on the periods over which the economic benefits of the intangible assets are expected to be realized, which are subject to adjustment as additional information becomes available. Amortization expense is allocated to Cost of goods sold, Selling and marketing, and Depreciation and amortization based on the nature of the activities associated with the intangible assets acquired. Refer to Note 3(C) for additional information on the useful lives of the acquired intangible assets expected to be recognized.

(ii)	Subject to the terms of the merger agreement, certain outstanding Zynga equity awards will be replaced and converted into Take-Two equity awards.

(B) Reflects the adjustments to Selling and marketing expense (“S&M”) including the amortization of the estimated fair value of intangibles recognized through S&M, and the preliminary incremental stock-based compensation expense for Take-Two replacement equity awards:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Amortization expense for acquired intangible assets(i)		$	—			$	200,000
Elimination of Zynga’s historical stock-based compensation expense			(13,903	)			(15,555	)
Stock-based compensation expense after equity award replacement and fair value remeasurement(ii)			12,642				52,432
Pro forma net adjustment to Selling and marketing		$	1,261			$	236,877

(i)

The amortization of intangible assets is calculated on a straight-line basis. The amortization is based on the periods over which the economic benefits of the intangible assets are expected to be realized, which are subject to adjustment as additional information becomes available. Amortization expense is allocated to Cost of goods sold, Selling and marketing, and Depreciation and amortization based on the nature of the activities associated with the intangible assets acquired. An estimated average useful life of one year was used to reflect the amortization of Users intangible asset recorded to S&M. Refer to Note 3C for additional information on the useful lives of the acquired intangible assets expected to be recognized.

(ii)	Subject to the terms of the merger agreement, certain outstanding Zynga equity awards will be replaced and converted into Take-Two equity awards.

(C) Reflects the adjustments to General and administrative expense (“G&A”) including the estimated transaction costs expensed and the preliminary incremental stock-based compensation expense for Take-Two replacement equity awards:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Estimated transaction costs(i)		$	—			$	204,732
Elimination of Zynga’s historical stock-based compensation expense			(27,585	)			(34,586	)
Stock-based compensation expense after equity award replacement and fair value remeasurement(ii)			25,083				48,706
Pro forma net adjustment to General and administrative		$	2,502			$	218,852

(i)	These costs consist of legal advisory, financial advisory, accounting, and consulting costs for Take-Two and Zynga.

(ii)	Subject to the terms of the merger agreement, certain outstanding Zynga equity awards will be replaced and converted into Take-Two equity awards.

(D) Reflects the adjustment to Research and development expense (“R&D”) for the preliminary incremental stock-based compensation expense for Take-Two replacement equity awards:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Elimination of Zynga’s historical stock-based compensation expense		$	(86,348	)		$	(87,016	)
Stock-based compensation expense after equity award replacement and fair value remeasurement(i)			78,515				122,538
Pro forma net adjustment to Research and development		$	7,833			$	35,522

(i)	Subject to the terms of the merger agreement, certain outstanding Zynga equity awards will be replaced and converted into Take-Two equity awards.

(E) Reflects the adjustments to Depreciation and amortization (“D&A”) including the amortization of the estimated fair value of intangibles recognized through D&A:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Amortization expense for acquired intangible assets(i)		$	14,063			$	18,750
Pro forma net adjustment to Depreciation and amortization		$	14,063			$	18,750

(i)

The amortization of intangible assets is calculated on a straight-line basis. The amortization is based on the periods over which the economic benefits of the intangible assets are expected to be realized, which are subject to adjustment as additional information becomes available. Amortization expense is allocated to Cost of goods sold, Selling and marketing, and Depreciation and amortization based on the nature of the activities associated with the intangible assets acquired. Refer to Note 3(C) for additional information on the useful lives of the acquired intangible assets expected to be recognized.

(F) Reflects the adjustments to Interest and other, net related to the interest from the 2024 notes and 2026 notes, as well as the additional interest and amortization of debt issuance costs from the transaction financing:

Description (in 000’s, except interest rates)		Principal balance				Assumed weighted- average interest rate				For the nine months ended December 31, 2021				For the year ended March 31, 2021
New interest expense on transaction financing(i):
Term loan A		$	1,000,000				3.09	%		$	21,437			$	30,128
Bonds		$	1,700,000				3.37	%			42,968				57,290
Amortization of capitalized debt issuance costs											2,987				3,982
											67,392				91,400
Decreases to interest expense:
Elimination of historical Zynga interest expense on the 2024 Notes and 2026 Notes											41,937				35,163
											41,937				35,163
Pro forma net adjustment to Interest and other, net(ii)										$	25,455			$	56,237

(i)

The new interest expense on transaction financing adjustments included in the unaudited pro forma condensed combined statements of operations reflect the interest expense and amortization of debt issuance costs associated with new debt from the commitment parties. Interest was recognized for the Term loan A and the bonds, using the effective interest rate method with the weighted-average interest rate equal to 3.09% and 3.37%, respectively. A sensitivity analysis on interest expense for the nine months ended December 31, 2021 and the fiscal year ended March 31, 2021 has been performed to assess the effect of a 12.5 basis point change of the hypothetical interest on the debt financing. The following table shows the change in the interest expense for the debt financing transaction described above:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Interest expense assuming:
Increase of 0.125%		$	2,461			$	3,344
Decrease of 0.125%			(2,461	)			(3,344	)

(ii)

If Take-Two is not able to consummate all or any portion of the transaction financing, Take-Two may utilize a bridge loan as an alternate source of financing; however, incremental interest expense would be payable. The aggregate interest expense on the bridge loan financing would be approximately $443,259 thousand and $419,634 thousand for the nine months ended December 31, 2021 and the fiscal year ended March 31, 2021, respectively. Interest expense was computed using a weighted average interest rate of approximately 16.42% and 15.54% for the nine months ended December 31, 2021 and the fiscal year ended March 31, 2021, respectively, computed on an aggregate outstanding balance of the bridge loan of $2,700,000 thousand. If the bridge loan is required to be utilized, the unaudited pro forma condensed combined statements of operations would reflect an adjustment for the bridge loan financing and include an incremental interest expense of approximately $378,854 thousand and $332,216 thousand for the nine months ended December 31, 2021 and the fiscal year ended March 31, 2021, respectively.

(G) The pro forma adjustments for the tax provision utilize a blended statutory income tax rate of 22% for the fiscal year ended March 31, 2021 and for the nine months ended December 31, 2021. Although not reflected in this unaudited pro forma condensed combined financial information, the effective tax rate of the combined

company could be significantly different depending on post-combination activities, including repatriation decisions, cash needs and the geographical mix of income. Further, the pro forma adjustments for the tax provision reflect the benefit of U.S. deferred taxes generated by Zynga during the pro forma statement of operations periods presented. Historically, Zynga had not recorded the benefit of these U.S. deferred taxes within its consolidated tax provision as Zynga had concluded that realization of these deferred taxes was not more-likely-than-not.

(H) The pro forma basic and diluted weighted average shares outstanding are a combination of historic weighted average shares of Take-Two common stock and the issuance of shares in connection with the combination. In connection with the combination, Take-Two agreed to replace certain equity awards held by Zynga employees with Take-Two equity awards. At this time, Take-Two has completed a preliminary analysis related to eligible employees and vesting schedules in order to determine the impact to the basic and diluted weighted average shares from the converted awards. The pro forma basic and diluted weighted average shares outstanding are as follows:

Description (in 000’s)		For the nine months ended December 31, 2021				For the year ended March 31, 2021
Pro forma basic weighted average shares:
Historical Take-Two weighted average shares outstanding—basic			115,572				114,602
Issuance of Take-Two shares to Zynga stockholders pursuant to the combination			45,899				45,899
Issuance of shares for the conversion of the 2024 Notes			3,709				3,709
Issuance of shares for the conversion of the 2026 Notes			3,952				3,952
Vested Take-Two replacement awards to Zynga equity awards			1,840				876
Pro forma weighted average shares—basic			170,972				169,038
Pro forma diluted weighted average shares:
Historical Take-Two dilutive common stock equivalents			1,238				—
Take-Two replacement awards to Zynga equity awards common stock equivalents			849				—
Pro forma weighted average shares—diluted(i)			173,059				169,038

(i)

1,439 thousand historical Take-Two dilutive common stock equivalents and 760 thousand Take-Two replacement awards to Zynga equity award holders were excluded from the computation of pro forma diluted weighted average shares for the fiscal year ended March 31, 2021 as their effect would be anti-dilutive.