Take-Two Interactive Software, Inc. Files Restated Financial Statements

Take-Two Interactive Software, Inc. Files Restated Financial Statements

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced that it has completed the restatement of its financial statements to reflect the recognition of stock-based compensation expense and tax effects resulting from the previously announced investigation of past stock-based compensation awards. Take-Two’s restated financial statements are included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2006, filed today with the Securities and Exchange Commission.

As previously disclosed, in June 2006 a Special Committee of Take-Two’s Board of Directors, working with independent legal and accounting advisors, commenced a comprehensive review of Take-Two’s historical stock option granting process. The Company cooperated fully with the investigation. As a result of the investigation, management of the Company concluded, and the Audit Committee of its Board of Directors agreed, that incorrect measurement dates were used for financial accounting purposes for certain stock-based compensation awards made in prior periods. The report by the Special Committee found no pattern or practice of backdating or other improper accounting for option grants subsequent to August 2003 and that none of the Company’s current executive officers engaged in any misconduct.

Based on the results of the investigation, the Company has recorded additional non-cash stock-based compensation expense and tax effects with regard to past stock-based compensation awards. The cumulative adjustments amounted to non-cash charges of $42.1 million, net of tax, for the period from April 1997 through October 31, 2005.

Today’s filing of the Company’s Form 10-K for the fiscal year ended October 31, 2006 satisfies certain key conditions specified by the NASDAQ Listing Qualifications Panel for Take-Two to maintain continued listing on The NASDAQ Stock Market, as specified in a written notification by the NASDAQ Panel previously disclosed by the Company. Take-Two expects to satisfy the remaining NASDAQ listing requirements by filing its Form 10-Q for the third quarter ended July 31, 2006 on or before March 19, 2007 and holding its combined 2005 and 2006 annual meeting of stockholders on or before March 27, 2007. The Company has no update regarding the previously disclosed informal non-public Securities and Exchange Commission investigation into stock option grants or the subpoenas from the New York County District Attorney.