Take-Two Interactive – Zynga Acquisition Presentation

JANUARY 2022
TA K E-TWO INTERACTIVE
SOFTWARE, INC. TO COMBINE
WITH
ZYNGA, INC.
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CautionaryNote: Forward -Looking Statements
Statements contained herein which are not historical facts may be considered forward- looking statements under federal securitieslaws and may be identified by words such as
“anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should, ” “will,” or words of similar meaning and include, but are not
limited to, statements regarding the proposed business combination of Take- Two and Zynga and the outlook for Take-Two’s or Zynga’s future business and financial performance.
Such forward -looking statements are based on the current beliefs of Take- Two’s and Zynga’s respective management as well as assumptions made by and information currently
available to them, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict . Actual outcomes and results may vary materially from
these forward- looking statements based on a variety of risks and uncertainties including: the occurrence of any event, change or other circumstances that could give rise to the
termination of the merger agreement; the inability to obtain Take- Two’s or Zynga’s respective stockholder approval or the failure to satisfy other conditions to completion of the
proposed combination, including receipt of regulatory approvals, on a timely basis or at all; risks that the proposed combina tion disrupts each company’s current plans and operations;
the diversion of the attention of the respective management teams of Take- Two and Zynga from their respective ongoing business operations; the ability of either Take-Two, Zynga or
the combined company to retain key personnel; the ability to realize the benefits of the proposed combination, including net bookings opportunities and cost synergies; the ability to
successfully integrate Zynga’s business with Take- Two’s business or to integrate the businesses within the anticipated timeframe; the outcome of any legal proceedings that may be
instituted against Take- Two, Zynga or others following announcement of the proposed combination; the amount of the costs, fees, expenses and charges related to the proposed
combination; the uncertainty of the impact of the COVID -19 pandemic and measures taken in response thereto; the effect of econom ic, market or business conditions, including
competition, consumer demand and the discretionary spending patterns of customers, or changes in such conditions, have on Tak e-T wo’s, Zynga’s and the combined company’s
operations, revenue, cash flow, operating expenses, employee hiring and retention, relationships with business partners, the dev elopment, launch or monetization of games and other
products, and customer engagement, retention and growth; the risks of conducting Take- Two’s and Zynga’s business internationally; the impact of changes in interest rates by the
Federal Reserve and other central banks; the impact of potential inflation, volatility in foreign currency exchange rates and supply chain disruptions; the ability to maintain acceptable
pricing levels and monetization rates for Take- Two’s and Zynga’s games; and risks relating to the market value of Take- Two’s common stock to be issued in the proposed combination.
Other important factors and information are contained in Take- Two’s and Zynga’s most recent Annual Reports on Form 10-K, includi ng the risks summarized in the section entitled
“Risk Factors,” Take -Two’s and Zynga’s most recent Quarterly Reports on Form 10 -Q, and each company’s other periodic filings wit h the SEC, which can be accessed at
www.take2games.com in the case of Take- Two, http://investor.zynga.com in the case of Zynga, or www.sec.gov. All forward- looking statements are qualified by these cautionary
statements and apply only as of the date they are made. Neither Take- Two nor Zynga undertakes any obligation to update any forward-looking statement, whether as a result of new
information, future events or otherwise.
Additional Information About the Proposed Acquisition and Where to Find It
This communication relates to a proposed business combination of Take- Two and Zynga that will become the subject of a registration statement on Form S-4 to be filed by Take- Two
with the U.S. Securities and Exchange Commission (the “SEC”), which will include a joint proxy statement/prospectus. The regi stration statement on Form S -4, including the joint proxy
statement/prospectus, will provide full details of the proposed combination and the attendant benefits and risks. This communic ation is not a substitute for the registration statement
on Form S -4, including the joint proxy statement/prospectus, or any other document that Take- Two or Zynga may file with the SEC or send to their respective stockholders in
connection with the proposed combination. Investors and security holders are urged to read the registration statement on For m S-4, including the definitive joint proxy
statement/prospectus, and all other relevant documents filed with the SEC or sent to Take- Two’s or Zynga’s stockholders as they become available because they will contain
important information about the proposed combination. All documents, when filed, will be available free of charge at the SEC ’s website (www.sec.gov). You may also obtain these
documents by contacting Take- Two’s Investor Relations department at contact@take2games.com; or by contacting Zynga’s Investor Relations department at investors@zynga.com.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitati on of any vote or approval.
Participants in the Solicitation
Take -Two, Zynga and their respective directors and executive officers may be deemed to be participants in any solicitation of pr oxies in connection with the proposed business
combination. Information about Take- Two’s directors and executive officers is available in Take- Two’s proxy statement dated July 27, 2021 for its 2021 Annual Meeting of
Stockholders. Information about Zynga’s directors and executive officers is available in Zynga’s proxy statement dated April 5,2021 for its 2021 Annual Meeting of Stockholders.
Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interes ts,by security holdings or otherwise, will be contained in the
registration statement on Form S -4, including the joint proxy statement/prospectus, and all other relevant materials to be filed with the SEC regarding the proposed combination when
they become available. Investors should read the registration statement on Form S- 4, including the joint proxy statement/prospectus carefully when it becomes available before
making any voting or investment decisions.
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STRAUSS ZELNICK
CHAIRMAN AND CEO, TAKE -TWO
SPEAKER:
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Take – Two and Zynga Combine to Enhance Positioning as a
Global Leader in Interactive Entertainment
Establishes Take-Two as one of the largest publicly traded interactive
entertainment companies in the world with a leadership position in mobile
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Diverse Portfolio of Industry-Leading Intellectual Property
A leading developer, publisher and marketer of interactive entertainment,
the strongest growth segment of the entertainment industry
X X X
X X X
X X X
CON SOLE
PC
MO BILE
Dragon City Monster Legends
Top Eleven
Two Dots
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Take-Two Overview
Company Overview
• Founded in 1993 and headquartered in NYC
• A leading de veloper, publisher and marketer of
interactive entertainment
• Culture of creativity, innovation and efficiency
• Industry -leading talent, including approximately
7,200 employees (~5,600 developers)
• Diverse portfolio of the highest- quality intellectual
properties in the business
• Investing in the Company’s development pipeline,
which is the strongest in its history
MASSIVE PORTFOLIO OF INDUSTRY -LEADING INETELLECTUAL PROPERTIES
$1,904 $1,991
$2,929 $2,990
$3,553
FY 2017 FY 2018FY 2019FY 2020 FY 2021
NET BOOKINGS
($ in millions)
TOP FRANCHISES (SERIES THAT HAVE SOLD 5+ MILLION UNITS) INCLUDE:
Ta k e-Two’s fiscal year -end is March 31

Transaction will create an exciting and diverse portfolio of industry-leading
titles that span key platforms and genres across interactive entertainment
Product Portfolios are Highly Complementary
Opportunity
to bring
Ta k e -Tw o ’ s
console/ PC
properties
to mobile &
add new game
modes
Drive free-
to -play
synchronous cross –
platform
ambitions
Portfolio of Iconic Console/PC Gaming IP Experienced Studios with Industry -Leading
Development and Publishing Capabilities
Portfolio of Iconic Mobile Gaming IP Track Record of Successfully Executing
Mobile Gaming Development
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
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 


Take-Two + Zynga Form a Leader in Interactive Entertainment
Ta k e -Two possesses some
of the most successful
franchises in interactive
entertainment
Expertise in console/PC
can be applied to Zynga’s
cross -play ambitions,
helping cross -sell users
across the combined
ecosystem
Ta k e -Two’s extensive
player database can
enhance mobile initiatives
Zynga’s free -to -play
mobile development talent
& expertise can be
leveraged across Take –
Two’s blockbuster original
IPs
Zynga’s leading publishing
and analytics platform can
drive synergies across the
combined mobile portfolio
Zynga’s renowned
portfolio of diverse mobile
titles significantly increase
Ta k e -Two’s sources of
Recurrent Consumer
Spending
• Combined entity will feature an industry -defining portfolio of IP
• Diversified Net Bookings base, with over half of the combined business coming from
mobile in FY23
• Zynga’s highly skilled and proven management team, led by CEO Frank Gibeauand
Zynga’s President of Publishing, Bernard Kim, will drive the strategic direction for
Ta k e -Two’s mobile efforts
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Benefits of the Transaction
PRO-FORMA NET BOOKINGS OF
$6.1 BILLION
FOR THE TRAILING TWELVE –
MONTH PERIOD ENDED 9/30/21
8%
EXPECTED THREE- YEAR CAGR FOR
THE MOBILE GAME INDUSTRY G L O B A L LY
50+%
OF COMBINED FY23 NET
BOOKINGS EXPECTED TO COME FROM MOBILE INTERACTIVE ENTERTAINMENT IS
THE
#1
ENTERTAINMENT VERTICAL EXPECTED ANNUAL COST
SYNERGIES OF
$100 MILLION
WITHIN TWO YEARS AFTER CLOSING
Source: Industry metrics per IDG Consulting.
Both groups of stockholders will benefit from the combined company’s greater
scale, enhanced financial profile, and synergies created through the transaction
$500+
MILLION
IN ANNUAL NET BOOKINGS
OPPORTUNITIES OVER TIME
MOBILE GAMING MARKET E S T I M AT E D AT
$136 BILLION
IN GROSS BOOKINGS IN 2021
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Estimated $500+ million of Annual Net Bookings Opportunities
Use Zynga’s scale and Chartboost ad platform to acquire new users
more efficiently & optimize mobile ad inventory
Clear path to bring Take -Two’s console/PC games to mobile
Enhancement of existing titles via LiveOps/crossover IP events
Cross -promote content to a broader & more diversified audience
New geographies
Cross -play integration
Further focus on innovation and emerging business models
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FRANK GIBEAU
CEO AND DIRECTOR, ZYNGASPEAKER:
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Zynga Company Overview
• Pioneer in social gaming and a leading mobile
game publisher
• Highly creative and deeply experienced
management team
• Approximately 2,200 of the industry’s top
creative talent in free-to -play mobile games
• Diverse portfolio of highly -engaging, top-
grossing games
• Approximately 183 million mobile MAU
• Successful execution of M&A
Empires & Puzzles
Toy Blast
Merge Dragons!
Words with Friends Toon Blast
CSR Racing Harry Potter: Puzzles
& Spells
Zynga Poker
ESTABLISHED PORTFOLIO ON A GROWING PLATFORM
$755
$854
$970
$1,564
$2,270
FY 2016 FY 2017FY 2018FY 2019FY 2020
REPORTED BOOKINGS
($ in millions)
Zynga’s fiscal year -end is December 31
Hair Challenge
High Heels!
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Golf Rival
Tangle Masters!

Zynga’s Publishing Platform
P L AY E R S DIVERSIFIED GAMES PORTFOLIO GLOBAL STUDIOS
183M Mobile MAUs Top 5 Mobile Game Publisher in the World
BUILD SCALE ENGAGE, RETAIN & MONETIZE
• Product
Management
Data Science
Chartboost
Demand Side
Platform
Zynga Identity
Service
Nearly 3,000 employees worldwide
Chartboost Supply
Side Platform
VIP & Partnership
Te a m s
Analytics &
Publishing Tools
Consumer
Insights
TALENT, TOOLS & TECHNOLOGY
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Zynga by the Numbers
4B
INSTALLS ACROSS Z Y N G A’ S
GAMES TO DATE
26%
BOOKINGS ON TRACK TO DELIVER A
183mm
MOBILE MONTHLY AVERAGE USERS MONTHLY AD
IMPRESSIONS
10B
AV E R A G E
TRIPLED
SINCE 2016, MONTHLY ACTIVE USERS MORE THAN
175+
COUNTRIES
CAGR SINCE 2015
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Transaction is Highly Attractive for Zynga Stockholders
64% stock premium as
compared to Zynga’s closing price on 1/7/22 Zynga stockholders to own
approximately one -third of
combined company post –
close
What we can achieve together:
• Operate at significantly larger scale in a fast- growing sector
• Manage an unparalleled and diversified portfolio of content and
capabilities
• Deliver on multi- year growth strategy and long -term profitability goals
• Achieve Net Bookings opportunities and cost synergies
• Drive cutting -edge innovation as a leader in the next era of gaming
• Continue to foster a positive working environment, with a common
culture of growth and success
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LAINIE GOLDSTEIN
CFO, TAKE-TWO
SPEAKER:
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Terms of the Acquisition
•Ta k e -Two to acquire all outstanding shares of Zynga in a cash and stock
transaction valued at $9.86 per Zynga share
1
• Implied total enterprise value of approximately $12.7 billion
• Zynga stockholders will receive $3.50 in cash and $6.36
1in shares of Take –
Two common stock for each share of Zynga common stock outstanding at
the closing of the transaction
• The purchase price represents a premium of 64% to Zynga’s closing share
price on January 7th
•Ta k e -Two has received committed financing of $2.7 billion
• Company intends to fund cash component of transaction with cash from its
balance sheet and proceeds from new debt issuance FINANCING
•Zynga’s leadership team, including Frank Gibeau, CEO and Bernard Kim,
President of Publishing will lead the combined company’s mobile studios
• Ta k e -Two agreed to expand its Board of Directors to 10 members upon closing
of the transaction and will add two members from Zynga’s Board of Directors
• Expected to be completed in Take -Two’s 1QFY2023, ending 6/30/22
• Subject to the approval of both Take -Two and Zynga shareholders and the
satisfaction of customary closing conditions
• Terms of the agreement include a 45 -day “go -shop” provision
TERMS
TERMS
MANAGEMENT &
BOARD
CLOSING/
APPROVALS
1Within a 7.5% symmetrical collar based on a Take -Two share price of $169.19 as the midpoint. 17

Pro Forma Financials and Expected Growth Rates
NET BOOKINGS
• Adjusted Unrestricted Operating Cash Flow is defined as GAAP net cash from operating activities, adjusted for changes in restricted cash
• Take -Two’s fiscal year 2021 refers to the twelve -month period ended 3/31/2021; Take -Two’s fiscal year 2024 refers to the twelve -month period ending 3/31/2024
$3.6 $3.3
$2.6 $2.8
TTM 3/31/21 TTM 9/30/21
$ 6.1B
ADJUSTED UNRESTRICTED OPERATING CASH FLOW*
$0.9
$0.5
$0.3
$0.3
TTM 3/31/21 TTM 9/30/21
$1.2B
$0.8B
$ 6.2B COMBINED COMPANY EXPECTED
GROWTH CAGR*
+13%
FY21A FY24E
(excluding any Net Bookings
opportunities and any future
acquisitions; including cost
synergies)
+14%
FY21A FY24E
(excluding any Net Bookings
opportunities and any future
acquisitions)
18

Illustrative Sources & Uses and Pro-Forma Net Debt
Ta k e -Two will maintain its strong balance sheet, with significant flexibility
and annual cash generation
Illustrative sources & uses as of 09/30/21
Sources ($B) Uses ($B)
Ta k e -Two cash and short -term investments $2.3 Cash to Zynga shareholders 2 $4.6
Zynga cash and short -term investments 1 1.0 Estimated fees and expenses 0.2
New debt financing 2.7 Cash to balance sheet 1.2
Total sources $6.0 Total uses $6.0
Note: Preliminary, subject to change upon closing1Pro forma for $316mm payment in October 2021 for upfront cash consideration for acquisition of StarLark; 2Assumes convert holders settle in merger consideration; for illustrative purposes assumes 6/30/22 closing date and $9.86 tran saction price
$1.5
$2.7
($1.2)
PF gross debt Less: PF cash PF net debt
Pro forma net debt bridge as of 09/30/21 ($B)
19

Transaction Unifies Two of the Leading Interactive
Entertainment Businesses in the World
Ta k e-Two possesses some of the most
successful franchises in interactive
entertainment while bringing expertise in console/PC that can be applied to cross- promote content to users in Zynga’s ecosystem.
Zynga is a market -leading, diversified mobile
platform. Its leadership team has a proven track record of execution and the ability to drive further scale through M&A, cross -platform
gameplay, increased advertising revenue through hyper -casual titles, blockchain
integration, and direct payments.
Combination to form one of the largest and most compelling
portfolios of intellectual properties in the sector, while also benefiting
from scale, diversification, synergies and new revenue opportunities.
Combination Overview
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APPENDIX
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Non-GAAP Financial Measure and Operational Metric
Adjusted Unrestricted Operating Cash Flow
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles
(GAAP), the Company uses a Non -GAAP measure of financial performance: Adjusted Unrestricted
Operating Cash Flow, which is defined as GAAP net cash from operating activities, adjusted for changes in
restricted cash. The Company’s management believes it is important to consider Adjusted Unrestricted
Operating Cash Flow, in addition to net cash from operating activities, as it provides more transparency into
current business trends without regard to the timing of payments from restricted cash, which is primarily
related to a dedicated account limited to the payment of certain internal royalty obligations.
This Non -GAAP financial measure is not intended to be considered in isolation from, as a substitute for, or
superior to, GAAP results. This Non -GAAP financial measure may be different from similarly titled measures
used by other companies. In the future, Take -Two may also consider whether other items should also be
excluded in calculating this Non- GAAP financial measure used by the Company. Management believes that
the presentation of this Non -GAAP financial measure provides investors with additional useful information
to measure Take- Two’s financial and operating performance. In particular, this measure facilitates
comparison of our operating performance between periods and may help investors to understand better the
operating results of Take- Two. Internally, management uses this Non- GAAP financial measure in assessing
the Company’s operating results and in planning and forecasting.
Net Bookings
Net Bookings is defined as the net amount of products and services sold digitally or sold -in physically
during the period, and includes licensing fees, merchandise, in- game advertising, strategy guides and
publisher incentives.
22

Reconciliation of GAAP to Non-GAAP Measure
1Adjusted Unrestricted Operating Cash Flow is defined as GAAP net cash from operating activities, adjusted for changes in rest ricted cash 23

THANK YOU
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