TTWO

Business Context and Reporting Period

Company: Take-Two Interactive Software, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 8, 2019
Event: Entry into a new Material Definitive Agreement (Credit Agreement) and termination of the prior agreement dated October 17, 2011.

Key Financial Metrics and Debt Structure

This filing details the restructuring of the Company's credit facilities rather than reporting operational financial results (revenue, profit, or cash flow). Key debt metrics include:

• Facility Type: Unsecured five-year revolving credit facility.
• Total Commitments: $200,000,000.
• Sublimits:
  • Letters of credit: Up to $25,000,000.
  • Foreign currency borrowings (GBP, EUR, CAD): Up to $25,000,000.
• Incremental Capacity: Uncommitted option to incur up to an additional $250,000,000 in term loans or revolving credit.
• Interest Margins:
  • Base Rate: 0.125% to 0.750% above base rate.
  • LIBOR Rate: 1.125% to 1.750% above LIBOR.
• Pricing Determinant: Margins are based on the Company's consolidated total net leverage ratio.

Material Changes Versus Prior Period

The primary material change is the replacement of the existing Second Amended and Restated Credit Agreement (dated October 17, 2011) with the new Credit Agreement. The prior agreement was terminated effective February 8, 2019. The new agreement introduces updated financial covenants and borrowing terms.

Guidance, Covenants, and Risks

Financial Covenants: The agreement includes maximum leverage ratio, minimum cash reserves, and, in certain circumstances, minimum interest coverage ratio requirements.
Restrictive Covenants: The agreement limits the Company's ability to:

• Incur additional indebtedness.
• Dispose of assets outside the ordinary course of business.
• Acquire, merge, or consolidate with other entities.
• Create liens on property.
• Make investments or pay dividends/distributions (subject to exceptions).

Events of Default: Include nonpayment of principal/interest, breach of representations, noncompliance with covenants, acts of insolvency, and default on third-party indebtedness.
Guarantees: Obligations are guaranteed by certain direct and indirect domestic subsidiaries.
Outlook/Guidance: The filing text does not provide specific revenue guidance, profit outlook, or management commentary on future business performance.

Important Facts for Investor Verification

• Verify the Company's current consolidated total net leverage ratio to determine the applicable interest margin.
• Confirm compliance with the new minimum cash reserves and maximum leverage ratio covenants.
• Review the full text of the Credit Agreement (to be filed as an exhibit to the Form 10-K for the period ending March 31, 2019) for detailed covenant exceptions.
• Monitor the utilization of the $200 million facility and any exercise of the $250 million incremental capacity.