ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2017 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to . |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 51-0350842 (I.R.S. Employer Identification No.) | |
622 Broadway New York, New York (Address of principal executive offices) | 10012 (Zip Code) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o |
June 30, 2017 | March 31, 2017 | ||||
(Unaudited) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 828,112 | 943,396 | |||
Short-term investments | 452,949 | 448,932 | |||
Restricted cash | 406,336 | 337,818 | |||
Accounts receivable, net of allowances of $52,262 and $66,483 at June 30, 2017 and March 31, 2017, respectively | 229,197 | 219,558 | |||
Inventory | 11,636 | 16,323 | |||
Software development costs and licenses | 20,181 | 41,721 | |||
Deferred cost of goods sold | 79,902 | 127,901 | |||
Prepaid expenses and other | 84,823 | 59,593 | |||
Total current assets | 2,113,136 | 2,195,242 | |||
Fixed assets, net | 76,613 | 67,300 | |||
Software development costs and licenses, net of current portion | 462,877 | 381,910 | |||
Deferred cost of goods sold, net of current portion | 17,021 | — | |||
Goodwill | 369,622 | 359,115 | |||
Other intangibles, net | 133,330 | 110,262 | |||
Other assets | 46,971 | 35,325 | |||
Total assets | 3,219,570 | 3,149,154 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | 36,934 | 31,892 | |||
Accrued expenses and other current liabilities | 809,685 | 750,875 | |||
Deferred revenue | 619,439 | 903,125 | |||
Total current liabilities | 1,466,058 | 1,685,892 | |||
Long-term debt | 212,864 | 251,929 | |||
Non-current deferred revenue | 231,526 | 10,406 | |||
Other long-term liabilities | 209,367 | 197,199 | |||
Total liabilities | 2,119,815 | 2,145,426 | |||
Commitments and Contingencies (See Note 12) | |||||
Stockholders' equity: | |||||
Preferred stock, $.01 par value, 5,000 shares authorized; no shares issued and outstanding at June 30, 2017 and March 31, 2017 | — | — | |||
Common stock, $.01 par value, 200,000 shares authorized; 123,027 and 119,813 shares issued and 105,835 and 102,621 outstanding at June 30, 2017 and March 31, 2017, respectively | 1,230 | 1,198 | |||
Additional paid-in capital | 1,479,143 | 1,452,754 | |||
Treasury stock, at cost; 17,192 common shares at June 30, 2017 and March 31, 2017 | (303,388 | ) | (303,388 | ) | |
Accumulated deficit | (39,648 | ) | (99,694 | ) | |
Accumulated other comprehensive loss | (37,582 | ) | (47,142 | ) | |
Total stockholders' equity | 1,099,755 | 1,003,728 | |||
Total liabilities and stockholders' equity | 3,219,570 | 3,149,154 |
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Net revenue | 418,216 | 311,552 | |||||
Cost of goods sold | 194,569 | 191,380 | |||||
Gross profit | 223,647 | 120,172 | |||||
General and administrative | 60,603 | 46,743 | |||||
Selling and marketing | 52,214 | 71,134 | |||||
Research and development | 42,269 | 33,900 | |||||
Business reorganization | 10,599 | — | |||||
Depreciation and amortization | 7,743 | 7,378 | |||||
Total operating expenses | 173,428 | 159,155 | |||||
Income (loss) from operations | 50,219 | (38,983 | ) | ||||
Interest and other, net | (2,808 | ) | (4,506 | ) | |||
Gain on long-term investments, net | — | 1,350 | |||||
Income (loss) before income taxes | 47,411 | (42,139 | ) | ||||
Benefit from income taxes | 12,865 | 3,572 | |||||
Net income (loss) | 60,276 | (38,567 | ) | ||||
Earnings (loss) per share: | |||||||
Basic earnings (loss) per share | $ | 0.57 | $ | (0.46 | ) | ||
Diluted earnings (loss) per share | $ | 0.56 | $ | (0.46 | ) |
Three Months Ended June 30, | |||||
2017 | 2016 | ||||
Net income (loss) | 60,276 | (38,567 | ) | ||
Other comprehensive income (loss): | |||||
Foreign currency translation adjustment | 9,476 | (3,633 | ) | ||
Available-for-sale securities: | |||||
Unrealized gain, net on available-for-sale securities, net of taxes | 84 | 206 | |||
Reclassification to earnings for realized gains, net on available for sale securities, net of taxes | — | 4 | |||
Change in fair value of available for sale securities | 84 | 210 | |||
Other comprehensive income (loss) | 9,560 | (3,423 | ) | ||
Comprehensive income (loss) | 69,836 | (41,990 | ) |
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 60,276 | $ | (38,567 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Amortization and impairment of software development costs and licenses | 18,206 | 41,034 | |||||
Depreciation and amortization | 7,743 | 7,378 | |||||
Amortization and impairment of intellectual property | 8,181 | — | |||||
Stock-based compensation | 24,071 | 15,100 | |||||
Amortization of discount on Convertible Notes | 5,237 | 6,098 | |||||
Gain on conversions of Convertible Notes | (1,103 | ) | — | ||||
Amortization of debt issuance costs | 188 | 381 | |||||
Other, net | (9,669 | ) | (3,171 | ) | |||
Changes in assets and liabilities: | |||||||
Restricted cash | (68,518 | ) | (57,335 | ) | |||
Accounts receivable | (9,294 | ) | 28,226 | ||||
Inventory | 5,451 | 2,696 | |||||
Software development costs and licenses | (71,829 | ) | (62,392 | ) | |||
Prepaid expenses and other assets | (23,199 | ) | (3,867 | ) | |||
Deferred revenue | (67,883 | ) | (36,446 | ) | |||
Deferred cost of goods sold | 32,233 | 17,223 | |||||
Accounts payable, accrued expenses and other liabilities | 71,281 | 36,394 | |||||
Net cash used in operating activities | (18,628 | ) | (47,248 | ) | |||
Investing activities: | |||||||
Change in bank time deposits | (24,999 | ) | 78,691 | ||||
Proceeds from available-for-sale securities | 45,705 | 29,795 | |||||
Purchases of available-for-sale securities | (33,159 | ) | (30,836 | ) | |||
Purchases of commercial paper | (7,989 | ) | — | ||||
Proceeds from commercial paper | 16,500 | — | |||||
Purchases of fixed assets | (16,092 | ) | (4,230 | ) | |||
Asset acquisition | (25,381 | ) | — | ||||
Proceeds from sale of long-term investment | — | 1,350 | |||||
Purchase of long-term investments | — | (1,885 | ) | ||||
Net cash (used in) provided by investing activities | (45,415 | ) | 72,885 | ||||
Financing activities: | |||||||
Excess tax benefit from stock-based compensation | — | 887 | |||||
Tax payment related to net share settlements on restricted stock awards | (57,689 | ) | (25,166 | ) | |||
Net cash used in financing activities | (57,689 | ) | (24,279 | ) | |||
Effects of foreign currency exchange rates on cash and cash equivalents | 6,448 | (3,772 | ) | ||||
Net change in cash and cash equivalents | (115,284 | ) | (2,414 | ) | |||
Cash and cash equivalents, beginning of year | 943,396 | 798,742 | |||||
Cash and cash equivalents, end of period | $ | 828,112 | $ | 796,328 |
Three Months Ended June 30, | |||||
2017 | 2016 | ||||
Time-based | 66,122 | 107,551 | |||
Market-based(1) | 122,370 | 199,038 | |||
Performance-based(1) | |||||
New IP | 20,396 | 33,174 | |||
Major IP | 20,394 | 33,172 | |||
Total—Performance-based | 40,790 | 66,346 | |||
Total Restricted Stock Units | 229,282 | 372,935 |
(1) | Represents the maximum number of shares eligible to vest. |
• | 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. |
June 30, 2017 | 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 | $ | 522,035 | $ | 522,035 | $ | — | $ | — | Cash and cash equivalents | ||||||||
Bank-time deposits | 35,368 | 35,368 | — | — | Cash and cash equivalents | ||||||||||||
Commercial paper | 7,692 | — | 7,692 | — | Cash and cash equivalents | ||||||||||||
Corporate bonds | 230,015 | — | 230,015 | — | Short-term investments | ||||||||||||
Bank-time deposits | 200,945 | 200,945 | — | — | Short-term investments | ||||||||||||
Commercial paper | 17,519 | — | 17,519 | — | Short-term investments | ||||||||||||
Mutual funds | 4,470 | — | 4,470 | — | Short-term investments | ||||||||||||
Foreign currency forward contracts | 17 | — | 17 | — | Prepaid expenses and other | ||||||||||||
Foreign currency forward contracts | (7,345 | ) | — | (7,345 | ) | — | Accrued and other current liabilities | ||||||||||
Private equity | 720 | — | — | 720 | Other assets | ||||||||||||
Contingent consideration | 6,808 | — | — | 6,808 | Other long-term liabilities | ||||||||||||
Total recurring fair value measurements, net | $ | 1,018,244 | $ | 758,348 | $ | 252,368 | $ | 7,528 |
March 31, 2017 | 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 | $ | 646,386 | $ | 646,386 | $ | — | $ | — | Cash and cash equivalents | ||||||||
Bank-time deposits | 46,605 | 46,605 | — | — | Cash and cash equivalents | ||||||||||||
Commercial paper | 38,268 | — | 38,268 | — | Cash and cash equivalents | ||||||||||||
Corporate bonds | 243,019 | — | 243,019 | — | Short-term investments | ||||||||||||
Bank-time deposits | 175,745 | 175,745 | — | — | Short-term investments | ||||||||||||
Commercial paper | 25,936 | — | 25,936 | — | Short-term investments | ||||||||||||
Mutual funds | 4,232 | — | 4,232 | — | Short-term investments | ||||||||||||
Foreign currency forward contracts | 2 | — | 2 | — | Prepaid expenses and other | ||||||||||||
Foreign currency forward contracts | (352 | ) | — | (352 | ) | — | Accrued and other current liabilities | ||||||||||
Private equity | 570 | — | — | 570 | Other assets | ||||||||||||
Contingent consideration | 6,465 | — | — | 6,465 | Other long-term liabilities | ||||||||||||
Total recurring fair value measurements, net | $ | 1,186,876 | $ | 868,736 | $ | 311,105 | $ | 7,035 |
June 30, 2017 | |||||||||||||||
Gross Unrealized | |||||||||||||||
Cost or Amortized Cost | Gains | Losses | Fair Value | ||||||||||||
Short-term investments | |||||||||||||||
Bank time deposits | $ | 200,945 | $ | — | $ | — | $ | 200,945 | |||||||
Available-for-sale securities: | |||||||||||||||
Corporate bonds | 230,070 | 110 | (165 | ) | 230,015 | ||||||||||
Commercial paper | 17,517 | 2 | — | 17,519 | |||||||||||
Mutual funds | 4,337 | 147 | (14 | ) | 4,470 | ||||||||||
Total short-term investments | $ | 452,869 | $ | 259 | $ | (179 | ) | $ | 452,949 |
March 31, 2017 | |||||||||||||||
Gross Unrealized | |||||||||||||||
Cost or Amortized Cost | Gains | Losses | Fair Value | ||||||||||||
Short-term investments | |||||||||||||||
Bank time deposits | $ | 175,745 | $ | — | $ | — | $ | 175,745 | |||||||
Available-for-sale securities: | |||||||||||||||
Corporate bonds | 243,140 | 98 | (219 | ) | 243,019 | ||||||||||
Commercial paper | 25,938 | 5 | (7 | ) | 25,936 | ||||||||||
Mutual funds | 4,118 | 123 | (9 | ) | 4,232 | ||||||||||
Total short-term investments | $ | 448,941 | $ | 226 | $ | (235 | ) | $ | 448,932 |
June 30, 2017 | |||||||
Amortized Cost | Fair Value | ||||||
Short-term investments | |||||||
Due in 1 year or less | $ | 358,780 | $ | 358,881 | |||
Due in 1 - 2 years | 94,085 | 94,068 | |||||
Total short-term investments | $ | 452,865 | $ | 452,949 |
June 30, 2017 | March 31, 2017 | ||||||
Forward contracts to sell foreign currencies | $ | 180,714 | $ | 177,549 | |||
Forward contracts to purchase foreign currencies | 7,757 | 9,170 |
June 30, 2017 | March 31, 2017 | ||||||
Finished products | $ | 10,819 | $ | 15,530 | |||
Parts and supplies | 817 | 793 | |||||
Inventory | $ | 11,636 | $ | 16,323 |
June 30, 2017 | March 31, 2017 | ||||||||||||||
Current | Non-current | Current | Non-current | ||||||||||||
Software development costs, internally developed | $ | 13,716 | $ | 377,790 | $ | 28,959 | $ | 310,229 | |||||||
Software development costs, externally developed | 1,601 | 83,556 | 5,455 | 71,407 | |||||||||||
Licenses | 4,864 | 1,531 | 7,307 | 274 | |||||||||||
Software development costs and licenses | $ | 20,181 | $ | 462,877 | $ | 41,721 | $ | 381,910 |
June 30, 2017 | March 31, 2017 | ||||||
Software development royalties | $ | 551,646 | $ | 492,133 | |||
Business reorganization | 70,959 | 65,935 | |||||
Compensation and benefits | 41,837 | 44,843 | |||||
Licenses | 33,190 | 37,019 | |||||
Deferred acquisition payments | 25,000 | 25,000 | |||||
Marketing and promotions | 21,978 | 21,030 | |||||
Other | 65,075 | 64,915 | |||||
Accrued expenses and other current liabilities | $ | 809,685 | $ | 750,875 |
June 30, 2017 | March 31, 2017 | ||||||
Available borrowings | $ | 98,336 | $ | 98,320 | |||
Outstanding letters of credit | 1,664 | 1,664 |
June 30, 2017 | March 31, 2017 | ||||||
Additional paid-in capital | $ | 35,784 | $ | 35,784 | |||
Principal amount of 1.00% Convertible Notes | $ | 223,687 | $ | 268,149 | |||
Unamortized discount of the liability component | 10,514 | 15,751 | |||||
Carrying amount of debt issuance costs | 309 | 469 | |||||
Net carrying amount of 1.00% Convertible Notes | $ | 212,864 | $ | 251,929 |
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Cash interest expense (coupon interest expense) | $ | 448 | $ | 719 | |||
Non-cash amortization of discount on 1.00% Convertible Notes | 5,237 | 3,135 | |||||
Amortization of debt issuance costs | 160 | 107 | |||||
Total interest expense related to 1.00% Convertible Notes | $ | 5,845 | $ | 3,961 |
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Computation of Basic earnings (loss) per share: | |||||||
Net income (loss) | $ | 60,276 | $ | (38,567 | ) | ||
Less: net income allocated to participating securities | $ | (588 | ) | — | |||
Net income (loss) for basic earnings (loss) per share calculation | $ | 59,688 | $ | (38,567 | ) | ||
Total weighted average shares outstanding—basic | 105,494 | 84,588 | |||||
Less: weighted average participating shares outstanding | (1,029 | ) | — | ||||
Weighted average common shares outstanding—basic | 104,465 | 84,588 | |||||
Basic earnings (loss) per share | $ | 0.57 | $ | (0.46 | ) | ||
Computation of Diluted earnings (loss) per share: | |||||||
Net income (loss) | $ | 60,276 | $ | (38,567 | ) | ||
Less: net income allocated to participating securities | $ | (522 | ) | — | |||
Add: interest expense, net of tax, on Convertible Notes | $ | 5,750 | — | ||||
Net income (loss) for diluted earnings (loss) per share calculation | $ | 65,504 | $ | (38,567 | ) | ||
Weighted average common shares outstanding—basic | 105,494 | 84,588 | |||||
Add: dilutive effect of common stock equivalents | 13,288 | — | |||||
Weighted average common shares outstanding—diluted | 118,782 | 84,588 | |||||
Less: weighted average participating shares outstanding | (1,029 | ) | — | ||||
Weighted average common shares outstanding- diluted | 117,753 | 84,588 | |||||
Diluted earnings (loss) per share | $ | 0.56 | $ | (0.46 | ) |
Three Months Ended June 30, 2017 | |||||||||||||||
Foreign currency translation adjustments | Unrealized gain (loss) on derivative instruments | Unrealized gain (loss) on available-for- sales securities(1) | Total | ||||||||||||
Balance at March 31, 2017 | $ | (47,666 | ) | $ | 600 | $ | (76 | ) | $ | (47,142 | ) | ||||
Other comprehensive income before reclassifications | 9,476 | — | 84 | 9,560 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | — | — | |||||||||||
Balance at June 30, 2017 | $ | (38,190 | ) | $ | 600 | $ | 8 | $ | (37,582 | ) |
Three Months Ended June 30, 2016 | |||||||||||||||
Foreign currency translation adjustments | Unrealized gain (loss) on derivative instruments | Unrealized gain (loss) on available-for- sales securities | Total | ||||||||||||
Balance at March 31, 2016 | $ | (38,580 | ) | $ | 600 | $ | 84 | $ | (37,896 | ) | |||||
Other comprehensive income (loss) before reclassifications | (3,633 | ) | — | 206 | (3,427 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | 4 | 4 | |||||||||||
Balance at June 30, 2016 | $ | (42,213 | ) | $ | 600 | $ | 294 | $ | (41,319 | ) |
Title | Publishing Label | Internal or External Development | Platform(s) | Expected Release Date | |||
Red Dead Redemption 2 | Rockstar Games | Internal | PS4, Xbox One | Spring 2018 | |||
NBA 2K18 | 2K | Internal | Xbox One, Xbox 360, PS3, PS4, Switch, PC | September 19, 2017 | |||
WWE 2K18 | 2K | Internal/External | PS4, Xbox One | October 17, 2017 | |||
WWE 2K18 | 2K | Internal/External | Switch | Fall 2017 |
Three Months Ended June 30, | |||||||||||||
(thousands of dollars) | 2017 | 2016 | |||||||||||
Net revenue | $ | 418,216 | 100.0 | % | $ | 311,552 | 100.0 | % | |||||
Cost of goods sold | 194,569 | 46.5 | % | 191,380 | 61.4 | % | |||||||
Gross profit | 223,647 | 53.5 | % | 120,172 | 38.6 | % | |||||||
General and administrative | 60,603 | 14.5 | % | 46,743 | 15.0 | % | |||||||
Selling and marketing | 52,214 | 12.5 | % | 71,134 | 22.8 | % | |||||||
Research and development | 42,269 | 10.1 | % | 33,900 | 10.9 | % | |||||||
Business reorganization | 10,599 | 2.5 | % | — | — | % | |||||||
Depreciation and amortization | 7,743 | 1.9 | % | 7,378 | 2.4 | % | |||||||
Total operating expenses | 173,428 | 41.5 | % | 159,155 | 51.1 | % | |||||||
Income (loss) from operations | 50,219 | 12.0 | % | (38,983 | ) | (12.5 | )% | ||||||
Interest and other, net | (2,808 | ) | (0.7 | )% | (4,506 | ) | (1.4 | )% | |||||
Gain on long-term investments, net | — | — | 1,350 | 0.4 | % | ||||||||
Income (loss) before income taxes | 47,411 | 11.3 | % | (42,139 | ) | (13.5 | )% | ||||||
Benefit from income taxes | 12,865 | 3.1 | % | 3,572 | 1.1 | % | |||||||
Net income (loss) | 60,276 | 14.4 | % | $ | (38,567 | ) | (12.4 | )% |
Three Months Ended June 30, | |||||||||||||
2017 | 2016 | ||||||||||||
Net revenue by geographic region: | |||||||||||||
United States | $ | 258,260 | 61.8 | % | $ | 193,101 | 62.0 | % | |||||
International | 159,956 | 38.2 | % | 118,451 | 38.0 | % | |||||||
Net revenue by product platform: | |||||||||||||
Console | $ | 344,917 | 82.5 | % | $ | 254,026 | 81.5 | % | |||||
PC and other | 73,299 | 17.5 | % | 57,526 | 18.5 | % | |||||||
Net revenue by distribution channel: | |||||||||||||
Digital online | $ | 268,235 | 64.1 | % | $ | 172,078 | 55.2 | % | |||||
Physical retail and other | 149,981 | 35.9 | % | 139,474 | 44.8 | % |
(thousands of dollars) | 2017 | % of net revenue | 2016 | % | Increase/ (decrease) | % Increase/ (decrease) | ||||||||||||||
Net revenue | $ | 418,216 | 100.0 | % | $ | 311,552 | 100.0 | % | $ | 106,664 | 34.2 | % | ||||||||
Internal royalties | 77,704 | 18.6 | % | 59,673 | 19.2 | % | 18,031 | 30.2 | % | |||||||||||
Product costs | 44,069 | 10.5 | % | 44,979 | 14.4 | % | (910 | ) | (2.0 | )% | ||||||||||
Software development costs and royalties(1) | 43,629 | 10.4 | % | 63,659 | 20.4 | % | (20,030 | ) | (31.5 | )% | ||||||||||
Licenses | 29,167 | 7.0 | % | 23,069 | 7.4 | % | 6,098 | 26.4 | % | |||||||||||
Cost of goods sold | 194,569 | 46.5 | % | 191,380 | 61.4 | % | 3,189 | 1.7 | % | |||||||||||
Gross profit | $ | 223,647 | 53.5 | % | $ | 120,172 | 38.6 | % | $ | 103,475 | 86.1 | % |
(1) | Includes $3,481 and $4,386 of stock-based compensation expense in 2017 and 2016, respectively, in software development costs and royalties. |
(thousands of dollars) | 2017 | % of net revenue | 2016 | % of net revenue | Increase/ (decrease) | % Increase/ (decrease) | ||||||||||||||
General and administrative | $ | 60,603 | 14.5 | % | $ | 46,743 | 15.0 | % | $ | 13,860 | 29.7 | % | ||||||||
Selling and marketing | 52,214 | 12.5 | % | 71,134 | 22.8 | % | (18,920 | ) | (26.6 | )% | ||||||||||
Research and development | 42,269 | 10.1 | % | 33,900 | 10.9 | % | 8,369 | 24.7 | % | |||||||||||
Business reorganization | 10,599 | 2.5 | % | — | — | % | 10,599 | 100.0 | % | |||||||||||
Depreciation and amortization | 7,743 | 1.9 | % | 7,378 | 2.4 | % | 365 | 4.9 | % | |||||||||||
Total operating expenses(1) | $ | 173,428 | 41.5 | % | $ | 159,155 | 51.1 | % | $ | 14,273 | 9.0 | % |
(1) | Includes stock-based compensation expense, which was allocated as follows (in thousands): |
2017 | 2016 | ||||||
General and administrative | $ | 13,120 | $ | 6,705 | |||
Selling and marketing | $ | 2,585 | $ | 2,549 | |||
Research and development | $ | 2,464 | $ | 1,460 | |||
Business reorganization | $ | 2,421 | $ | — |
Three Months Ended June 30, | |||||||
(thousands of dollars) | 2017 | 2016 | |||||
Net cash used in operating activities | (18,628 | ) | (47,248 | ) | |||
Net cash (used in) provided by investing activities | (45,415 | ) | 72,885 | ||||
Net cash used in financing activities | (57,689 | ) | (24,279 | ) | |||
Effects of foreign currency exchange rates on cash and cash equivalents | 6,448 | (3,772 | ) | ||||
Net change in cash and cash equivalents | $ | (115,284 | ) | $ | (2,414 | ) |
Period | Shares purchased(1) | Average price per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the repurchase program | |||||||||
April 1 - 30, 2017 | — | $ | — | — | 9,046,353 | ||||||||
May 1 - 31, 2017 | 37,778 | $ | 63.98 | — | 9,046,353 | ||||||||
June 1 - 30, 2017 | — | $ | — | — | 9,046,353 |
(1) | All of the shares purchased during this period were purchased in connection with our obligation to holders of restricted stock awards to withhold the number of shares required to satisfy the holders' tax liabilities in connection with the vesting of such shares. None of the shares repurchased during the three months ended June 30, 2017 were part of the publicly announced share repurchase program. |
Exhibits: | ||
31.1 | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
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. | |
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. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document. | |
101.LAB | XBRL Taxonomy Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Document. |
TAKE-TWO INTERACTIVE SOFTWARE, INC. (Registrant) | ||
Date: August 2, 2017 | By: | /s/ STRAUSS ZELNICK |
Strauss Zelnick Chairman and Chief Executive Officer (Principal Executive Officer) | ||
Date: August 2, 2017 | By: | /s/ LAINIE GOLDSTEIN |
Lainie Goldstein Chief Financial Officer (Principal Financial Officer) |
August 2, 2017 | /s/ STRAUSS ZELNICK |
Strauss Zelnick Chairman and Chief Executive Officer |
August 2, 2017 | /s/ LAINIE GOLDSTEIN |
Lainie Goldstein Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 2, 2017 | /s/ STRAUSS ZELNICK |
Strauss Zelnick Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 2, 2017 | /s/ LAINIE GOLDSTEIN |
Lainie Goldstein Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
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Jun. 30, 2017 |
Jul. 31, 2017 |
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Document and Entity Information | ||
Entity Registrant Name | TAKE TWO INTERACTIVE SOFTWARE INC | |
Entity Central Index Key | 0000946581 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 106,527,814 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Mar. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances (in dollars) | $ 52,262 | $ 66,483 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 123,027,000 | 119,813,000 |
Common stock, shares outstanding | 105,835,000 | 102,621,000 |
Treasury stock, shares | 17,192,000 | 17,192,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | |
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Jun. 30, 2017 |
Jun. 30, 2016 |
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Income Statement [Abstract] | ||
Net revenue | $ 418,216 | $ 311,552 |
Cost of goods sold | 194,569 | 191,380 |
Gross profit | 223,647 | 120,172 |
General and administrative | 60,603 | 46,743 |
Selling and marketing | 52,214 | 71,134 |
Research and development | 42,269 | 33,900 |
Business reorganization | 10,599 | 0 |
Depreciation and amortization | 7,743 | 7,378 |
Total operating expenses | 173,428 | 159,155 |
Income (loss) from operations | 50,219 | (38,983) |
Interest and other, net | (2,808) | (4,506) |
Gain on long-term investments, net | 0 | 1,350 |
Income (loss) before income taxes | 47,411 | (42,139) |
Benefit from income taxes | 12,865 | 3,572 |
Net income (loss) | $ 60,276 | $ (38,567) |
Earnings (loss) per share: | ||
Basic earnings (loss) per share (in dollars per share) | $ 0.57 | $ (0.46) |
Diluted earnings (loss) per share (in dollars per share) | $ 0.56 | $ (0.46) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
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Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 60,276 | $ (38,567) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 9,476 | (3,633) |
Unrealized gain, net on available-for-sale securities, net of taxes | 84 | 206 |
Reclassification to earnings for realized gains, net on available for sale securities, net of taxes | 0 | 4 |
Change in fair value of available for sale securities | 84 | 210 |
Other comprehensive income (loss) | 9,560 | (3,423) |
Comprehensive income (loss) | $ 69,836 | $ (41,990) |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 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. We develop and publish products principally through our 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. Basis of Presentation The accompanying Condensed Consolidated Financial Statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries and, in the opinion of management, reflect all normal and recurring adjustments necessary for the fair presentation of our financial position, results of operations and cash flows. Interim results may not be indicative of the results that may be expected for the full fiscal year. All inter-company accounts and transactions have been eliminated in consolidation. The preparation of these Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes. As permitted under generally accepted accounting principles in the United States, interim accounting for certain expenses, including income taxes, are based on full year assumptions when appropriate. Actual results could differ materially from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although we believe that the disclosures are adequate to make the information presented not misleading. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017. Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation. Revenue Recognition As part of our on-going assessment of estimated service periods, during the three months ended June 30, 2017, we extended Grand Theft Auto V's estimated service period from 41 to 50 months. The change in estimate resulted in a decrease in net revenues of $25,683 and income from operations of $23,731 for the three months ended June 30, 2017. We expect this change in estimated service period to have a material impact on our Consolidated Financial Statements for fiscal 2018. Recently Adopted 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 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. We adopted this update effective April 1, 2017. Upon adoption, using the modified retrospective transition method, we recognized previously unrecognized excess tax benefits as a deferred tax asset, which was fully offset by a valuation allowance, resulting in no net impact to retained earnings. Without the valuation allowance, our deferred tax asset would have increased by $24,594. We elected to apply the change in presentation of excess tax benefits as an operating activity in the statement of cash flow prospectively and thus no prior periods were adjusted. We also elected to account for forfeitures as they occur using the modified retrospective transition method, which resulted in a cumulative effect adjustment of $323 to retained earnings (an increase in the accumulated deficit). The other aspects of the new guidance did not have a material effect on the Company’s consolidated financial statements. Accounting for Acquisitions or Disposals In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2017-01, Clarifying the Definition of a Business, with the objective of providing additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update provide new guidance to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The new guidance requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new guidance is expected to reduce the number of transactions that need to be further evaluated. The new standard, as amended, will be effective prospectively for interim and annual reporting periods beginning on January 1, 2018 (April 1, 2018 for the Company), with early adoption permitted. We adopted this update as of April 1, 2017 and relied on the clarified definition to account for our acquisition of intellectual property related to Kerbal Space Program as an asset acquisition. Recently Issued Accounting Pronouncements Accounting for Goodwill In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, this ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 (April 1, 2020 for the Company), including interim periods within those fiscal years, and is applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. While we are currently evaluating the impact of the adoption of this ASU, we do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. Accounting for Restricted Cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU amends the presentation of restricted cash within the statement of cash flows. The new guidance requires that changes in restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2017 (April 1, 2018 for the Company), including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU. 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, which will consist primarily of a balance sheet gross up of our operating leases, mostly for office space. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration, which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017 (April 1, 2018 for the Company), with early adoption permitted for annual reporting periods beginning after December 15, 2016 (April 1, 2017 for the Company). The Company will adopt the new standard effective April 1, 2018 using the cumulative catch-up transition method. We anticipate this standard will have a material impact on our Consolidated Financial Statements. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for on-line enabled games that benefit from meaningful post-contract customer support ("PCS") such as unspecified content updates for which we do not have vendor specific objective evidence of fair value ("VSOE"). Under the current accounting standards, for titles that do not have VSOE, we recognize the entire sales price ratably over the title's estimated service period. The VSOE requirement will be eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. It is possible that our evaluation of the expected impact of the new standard on certain transactions could change if there are additional interpretations of the new revenue guidance that are different from our preliminary conclusions. |
MANAGEMENT AGREEMENT |
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MANAGEMENT AGREEMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MANAGEMENT AGREEMENT | 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 $1,337 during each of the three months ended June 30, 2017 and 2016. We recorded stock-based compensation expense for non-employee restricted stock units granted to ZelnickMedia, which is included in general and administrative expenses of $6,014 and $3,889 during the three months ended June 30, 2017 and 2016 respectively. In connection with the 2014 Management Agreement, we granted restricted stock units as follows:
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Time-based restricted stock units granted in 2017 will vest on April 4, 2019, and those granted in 2016 will vest on April 1, 2018, in each case provided that the 2014 Management Agreement has not been terminated prior to such vesting date. Market-based restricted stock units granted in 2017 are eligible to vest on April 4, 2019, and those granted in 2016 are eligible to vest on April 1, 2018, 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 in 2017 are eligible to vest on April 4, 2019, and those granted in 2016 are eligible to vest on April 1, 2018, 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 (the numbers in the table represent 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 June 30, 2017 for the "Major IP" performance-based restricted stock units granted in 2017 and 2016. The unvested portion of time-based, market-based and performance-based restricted stock units held by ZelnickMedia were 602,217 and 898,526 as of June 30, 2017 and March 31, 2017, respectively. In addition to the restricted stock units granted to ZelnickMedia, 478,839 restricted stock units vested and 46,752 restricted stock units were forfeited during the three months ended June 30, 2017. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other current 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:
The table below segregates all assets and liabilities 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.
The fair value of contingent consideration was estimated using a Monte-Carlo simulation model, which included significant unobservable Level 3 inputs, such as projected financial performance over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts. We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers into or out of Level 3 during the three months ended June 30, 2017. Debt As of June 30, 2017, the estimated fair value of our 1.00% Convertible Notes due 2018 (the "1.00% Convertible Notes") was $762,348. The fair value was determined using Level 2 inputs, observable market data, for the 1.00% Convertible Notes and their embedded option feature. See Note 9 for additional information regarding our 1.00% Convertible Notes. |
SHORT-TERM INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS Our short-term investments consisted of the following:
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 these investments to be other-than-temporarily impaired as of June 30, 2017 or March 31, 2017. The following table summarizes the contracted maturities of our short-term investments at June 30, 2017:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 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 recognize derivative instruments as either assets or liabilities on our Condensed Consolidated Balance Sheets, and we measure those instruments at fair value. We classify cash flows from derivative transactions as cash flows from operating activities in our Condensed Consolidated Statements of Cash Flows. The following table shows the gross notional amounts of foreign currency forward contracts:
For the three months ended June 30, 2017 and 2016, we recorded a loss of $8,603 and a gain of $798, respectively, related to foreign currency forward contracts in interest and other, net in our Condensed 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. |
INVENTORY |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY Inventory balances by category are as follows:
Estimated product returns included in inventory at June 30, 2017 and March 31, 2017 were $401 and $529, respectively. |
SOFTWARE DEVELOPMENT COSTS AND LICENSES |
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SOFTWARE DEVELOPMENT COSTS AND LICENSES | SOFTWARE DEVELOPMENT COSTS AND LICENSES Details of our capitalized software development costs and licenses are as follows:
During the three months ended June 30, 2017 and 2016, we recorded $684 and $9,068, respectively, of software development impairment charges (a component of cost of goods sold). |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following:
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Credit Agreement In April 2016, we entered into a Sixth Amendment to our Second Amended and Restated Credit Agreement (as amended, the "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 which 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 (4.25% at June 30, 2017) or (b) 1.25% to 1.75% above the LIBOR Rate (approximately 2.48% at June 30, 2017), 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 June 30, 2017 and March 31, 2017. 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:
We recorded interest expense and fees related to the Credit Agreement of $110 for the three months ended June 30, 2017 and 2016. 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 our 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. 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. We do not have the right to redeem the 1.00% Convertible Notes prior to maturity. We 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, we closed our public offering of $37,500 principal amount of our 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 our 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 June 30, 2017. Accordingly, as of July 1, 2017, the 1.00% Convertible Notes may be converted at the holder's option through September 30, 2017. During the three months ended June 30, 2017, 1.00% Convertible Notes with an aggregate principal amount of $44,369 were settled, which we elected to settle in shares of our common stock. Our intent and ability, given our option, would be to settle future conversions 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. 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 our 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 June 30, 2017 and March 31, 2017, the if-converted value of our 1.00% Convertible Notes exceeded the principal amount of $223,687 and $268,149, respectively by $538,661 and $470,456, respectively. The following table provides additional information related to our 1.00% Convertible Notes:
The following table provides the components of interest expense related to our 1.00% Convertible Notes:
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EARNINGS (LOSS) PER SHARE ("EPS") |
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EARNINGS (LOSS) PER SHARE (EPS) | (LOSS) PER SHARE ("EPS") The following table sets forth the computation of basic and diluted earnings (loss) per share (shares in thousands):
Certain of our unvested restricted stock awards (including restricted stock units and 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 shown above for the three months ended June 30, 2017 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 three months ended June 30, 2016; therefore, the basic and diluted weighted average shares outstanding exclude the effect of the unvested share-based awards that are considered participating securities and all common stock equivalents because their effect would be antidilutive. For the three months ended June 30, 2016, we had 5,428 of unvested share-based awards that are excluded from the EPS calculation due to the net loss for those periods. We define common stock equivalents as restricted stock awards and common stock related to the Convertible Notes (see Note 9) 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. During the three months ended June 30, 2017, 1,868 restricted stock awards vested, and we issued 443 of unvested restricted stock awards and canceled 3 of unvested restricted stock awards. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
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ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table provides the components of accumulated other comprehensive loss:
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COMMITMENTS AND CONTINGENCIES |
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Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We have entered into various agreements in the ordinary course of business that require substantial cash commitments over the next several years. Other than agreements entered into in the ordinary course of business and in addition to the agreements requiring known cash commitments as reported in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2017, we did not have any significant changes to our commitments since March 31, 2017. 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, but the case was subsequently remanded to state court. The 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. Motion practice in both the federal and state actions is ongoing. 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 to be an adequate amount for this matter, which amounts are classified as Business reorganization within Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheet (see Note 8). We do not believe that the ultimate outcome of such litigation, even if in excess of our current accrual, will have a material adverse effect on our business, financial condition or results of operations. |
BUSINESS REORGANIZATION |
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Restructuring and Related Activities [Abstract] | |
BUSINESS REORGANIZATION | BUSINESS REORGANIZATION Fiscal 2018 Plan In the first quarter of fiscal 2018, we announced and initiated actions to implement a strategic reorganization at one of our labels (the "2018 Plan"). In connection with this initiative, we incurred business reorganization expenses of $10,599 due primarily to employee separation costs. Through June 30, 2017, we paid $2,378 related to these reorganization activities. As of June 30, 2017, $5,024 remained accrued for in accrued expenses and other current liabilities and $3,197 in other non-current liabilities. Although we may record additional expense or benefit in future periods to true-up estimates, we do not expect to incur additional reorganization costs in connection with the 2018 Plan. Fiscal 2016 Plan As of both June 30, 2017, and March 31, 2017, $65,935 remained accrued for in accrued expenses and other current liabilities for employee separation costs in connection with reorganizing one development studio and closing two development studios. See Note 12 for additional information. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries and, in the opinion of management, reflect all normal and recurring adjustments necessary for the fair presentation of our financial position, results of operations and cash flows. Interim results may not be indicative of the results that may be expected for the full fiscal year. All inter-company accounts and transactions have been eliminated in consolidation. The preparation of these Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these Condensed Consolidated Financial Statements and accompanying notes. As permitted under generally accepted accounting principles in the United States, interim accounting for certain expenses, including income taxes, are based on full year assumptions when appropriate. Actual results could differ materially from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although we believe that the disclosures are adequate to make the information presented not misleading. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017. Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation. |
Revenue Recognition | Revenue Recognition As part of our on-going assessment of estimated service periods, during the three months ended June 30, 2017, we extended Grand Theft Auto V's estimated service period from 41 to 50 months. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting for Goodwill In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, this ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 (April 1, 2020 for the Company), including interim periods within those fiscal years, and is applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. While we are currently evaluating the impact of the adoption of this ASU, we do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. Accounting for Restricted Cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU amends the presentation of restricted cash within the statement of cash flows. The new guidance requires that changes in restricted cash and cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2017 (April 1, 2018 for the Company), including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU. 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, which will consist primarily of a balance sheet gross up of our operating leases, mostly for office space. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration, which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The new standard is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017 (April 1, 2018 for the Company), with early adoption permitted for annual reporting periods beginning after December 15, 2016 (April 1, 2017 for the Company). The Company will adopt the new standard effective April 1, 2018 using the cumulative catch-up transition method. We anticipate this standard will have a material impact on our Consolidated Financial Statements. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for on-line enabled games that benefit from meaningful post-contract customer support ("PCS") such as unspecified content updates for which we do not have vendor specific objective evidence of fair value ("VSOE"). Under the current accounting standards, for titles that do not have VSOE, we recognize the entire sales price ratably over the title's estimated service period. The VSOE requirement will be eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. It is possible that our evaluation of the expected impact of the new standard on certain transactions could change if there are additional interpretations of the new revenue guidance that are different from our preliminary conclusions. |
MANAGEMENT AGREEMENT (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MANAGEMENT AGREEMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted stock units granted | In connection with the 2014 Management Agreement, we granted restricted stock units as follows:
_______________________________________________________________________________
|
FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segregation of all assets and liabilities measured at fair value on a recurring basis | The table below segregates all assets and liabilities 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.
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SHORT-TERM INVESTMENTS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term investments | Our short-term investments consisted of the following:
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Summary of the contracted maturities of short-term investments | The following table summarizes the contracted maturities of our short-term investments at June 30, 2017:
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of gross notional amounts of foreign currency forward contracts | The following table shows the gross notional amounts of foreign currency forward contracts:
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INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory balances by category | Inventory balances by category are as follows:
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SOFTWARE DEVELOPMENT COSTS AND LICENSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SOFTWARE DEVELOPMENT COSTS AND LICENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capitalized software development costs and licenses | Details of our capitalized software development costs and licenses are as follows:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following:
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DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information related to availability on Credit Agreement | Information related to availability on our Credit Agreement is as follows:
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Schedule of additional information related to convertible notes | The following table provides additional information related to our 1.00% Convertible Notes:
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Schedule of components of interest expense related to convertible notes | The following table provides the components of interest expense related to our 1.00% Convertible Notes:
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EARNINGS (LOSS) PER SHARE ("EPS") (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted loss per share | The following table sets forth the computation of basic and diluted earnings (loss) per share (shares in thousands):
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of accumulated other comprehensive loss | The following table provides the components of accumulated other comprehensive loss:
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FAIR VALUE MEASUREMENTS - NARRATIVE (Details) - 1.00% Convertible Notes due 2018 $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Interest rate | 1.00% |
Estimated fair value of convertible notes | $ 762,348 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Mar. 31, 2017 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Forward contracts to sell foreign currencies | $ 180,714 | $ 177,549 | |
Forward contracts to purchase foreign currencies | 7,757 | $ 9,170 | |
Derivative instrument not designated as hedging instruments, gain (loss), net | $ (8,603) | $ 798 |
INVENTORY (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished products | $ 10,819 | $ 15,530 |
Parts and supplies | 817 | 793 |
Inventory | 11,636 | 16,323 |
Estimated product returns included in inventory | $ 401 | $ 529 |
SOFTWARE DEVELOPMENT COSTS AND LICENSES (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Mar. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Software development costs and licenses, Current | $ 20,181 | $ 41,721 | |
Software development costs and licenses, Non-current | 462,877 | 381,910 | |
Software development impairment charges | 684 | $ 9,068 | |
Software development costs, internally developed | |||
Finite-Lived Intangible Assets [Line Items] | |||
Software development costs and licenses, Current | 13,716 | 28,959 | |
Software development costs and licenses, Non-current | 377,790 | 310,229 | |
Software development costs, externally developed | |||
Finite-Lived Intangible Assets [Line Items] | |||
Software development costs and licenses, Current | 1,601 | 5,455 | |
Software development costs and licenses, Non-current | 83,556 | 71,407 | |
Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Software development costs and licenses, Current | 4,864 | 7,307 | |
Software development costs and licenses, Non-current | $ 1,531 | $ 274 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Mar. 31, 2017 |
---|---|---|
Liabilities, Current [Abstract] | ||
Software development royalties | $ 551,646 | $ 492,133 |
Business reorganization | 70,959 | 65,935 |
Compensation and benefits | 41,837 | 44,843 |
Licenses | 33,190 | 37,019 |
Deferred acquisition payments | 25,000 | 25,000 |
Marketing and promotions | 21,978 | 21,030 |
Other | 65,075 | 64,915 |
Accrued expenses and other current liabilities | $ 809,685 | $ 750,875 |
DEBT - CONVERTIBLE DEBT INFORMATION (Details) - 1.00% Convertible Notes due 2018 - USD ($) $ in Thousands |
Jun. 30, 2017 |
Mar. 31, 2017 |
Jun. 18, 2013 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
Additional paid-in capital | $ 35,784 | $ 35,784 | |
Principal amount of Convertible Notes | 223,687 | 268,149 | |
Unamortized discount of the liability component | 10,514 | 15,751 | |
Carrying amount of debt issuance costs | 309 | 469 | |
Net carrying amount of Convertible Notes | $ 212,864 | $ 251,929 |
DEBT - INTEREST EXPENSE COMPONENTS (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 18, 2013 |
|
Debt Instrument [Line Items] | |||
Non-cash amortization of discount on Convertible Notes | $ 5,237 | $ 6,098 | |
Amortization of debt issuance costs | $ 188 | 381 | |
1.00% Convertible Notes due 2018 | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
Convertible Debt | 1.00% Convertible Notes due 2018 | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.00% | ||
Cash interest expense (coupon interest expense) | $ 448 | 719 | |
Non-cash amortization of discount on Convertible Notes | 5,237 | 3,135 | |
Amortization of debt issuance costs | 160 | 107 | |
Total interest expense related to Convertible Notes | $ 5,845 | $ 3,961 |
EARNINGS (LOSS) PER SHARE ("EPS") (Narrative) (Details) - shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from calculation of EPS (in shares) | 5,428,000 | |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Restricted stock awards, vested (in shares) | 1,867,707 | |
Restricted stock awards, issued (in shares) | 442,537 | |
Restricted stock awards, canceled (in shares) | 3,452 |
COMMITMENTS AND CONTINGENCIES - LEGAL AND OTHER PROCEEDINGS (Details) $ in Thousands |
Apr. 12, 2016
USD ($)
|
---|---|
Legal and Other Proceedings | |
Damages claimed (at least) | $ 150,000 |
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