Good morning. Thank you for joining us today for our annual meeting. My name is Hank Diamond, and I'm Senior Vice President of Investor Relations And Corporate Communications for Take 2. Please note that today's shareholder meeting is being broadcast via listen only webcast that is available on our website at www.take games.com. A replay of the webcast will also be available on our website later today.
Before we begin, I'd like to securities laws. These forward looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. Statements based on a variety of factors. Other important factors and information are contained in the company's annual report on Form 10 K, for the fiscal year ended March 31, 2017, including any risks summarized in the section entitled Risk Factors. The company's quarterly report on Form 10 Q for the fiscal quarter ended June 30, 2017.
And the company's other periodic filings with the SEC, which can be accessed at www.take2games.com. I'd now like to introduce Strauss Zelnick, Chairman and CEO of Take 2.
Thanks, Hank. Good morning, and welcome. The annual meeting with stockholders of Take 2 Interactive Software will please come to order Today's agenda includes a review of the procedures for today's meeting and the proposals to be voted on and a question and answer session. I'd like to introduce our officers. Carl Sledoff, who is apparently stuck in traffic.
So he'll be the gentleman walking in a few minutes late. He will be here, Lainie Goldstein, our Chief Financial Officer Dan Emerson, our Executive Vice President And General Counsel Matt Breitman, Deputy General Counsel And Corporate Secretary of the Company. I'd also like to introduce our other board members who are present today, as Mr. Bowman here. So he's also on his way Jay Moses, Michael Dornaman, our lead independent director, Michael Shuresky, of Ernst Renovation, and Susan Tolleson.
I'll now turn the floor over to Dan Emerson.
Good morning. I will act as chair of this portion of the meeting with Mr. Brightman will act as secretary of the meeting. The meeting will be conducted in accordance with the agenda that was distributed at the start of the meeting. The 7 proposals to be considered and voted upon at this annual meeting are set forth and Take 2's proxy filing and will be described in detail shortly.
Only stockholders of record at the close of business on July 21, 2017 are entitled to vote on the proposals this annual meeting or any adjournment thereof. This meeting will be conducted in accordance with the procedural rules that have been established in attributed today to ensure that stockholders have an opportunity to properly consider and vote upon the business to become before this meeting. I would like to take a moment to review several of the key rules. Anyone wishing to address the meeting must be a stockholder of record as of the July 21st 2017 record date or a person holding a valid proxy from a stockholder of record. Stockholders of record should have a yellow coded name tag, and a yellow index card stating stockholder of record, which was provided at the registration area before the meeting.
Following the presentation of the proposals on the agenda and while the polls are deemed open for voting purposes, we will entertain questions direct related to the matters being voted upon. By your presence at this meeting, you acknowledge your understanding of and willingness to abide by the procedural worlds that were provided to you today. Now let us continue with the business of the meeting. Mr. Brightman, will you please present proof of notice of the meeting?
Let the record reflect that I've been presented with a copy of the notice of annual meeting of stockholders dated July 27, 2017, the proxy materials dated July 27, 2017, together with an affidavit of an authorized representative Broadridge, the company responsible for mailing said materials, affirming us to the mailing on August 1, 2017, with a notice of annual meeting and proxy materials to stockholders of record at the close of business on July 21, 2017. I order the affidavit of mailing be filed with the minutes of this meeting. Mr. Brightman, will you please present a list stockholders as of the close of business on July 21, 2017. The record date fixed by the Board of Directors for purposes of determining the stockholders entitled to vote at this meeting.
Let the record reflect that I have been presented with a list of stockholders of record as of the close of business on July 21, 2017, furnished by an authorized representative of the company's transfer agent. There are 105,877,198 shares common stock entitled to vote at this meeting. The list of stockholders will be open for inspection by any stockholder of record, for the duration of this meeting. To determine, 1, the number of shares outstanding and entitled to vote 2, the number of shares represented at this meeting, the existence of a quorum, the validity and effect of proxies, and finally, to receive and tabulate the votes on the matters to be acted upon at the meeting. Mr.
Thai has executed an affidavit to faithfully execute his duties as the inspector. The secretary will attach the affidavit to the minutes of this meeting. It is anticipated that the results will be reported as soon as practicable. Is there any stockholder present who has not filled out an the attendance sheet showing the name of the stockholder and the number of shares he or she owns. All stockholders of record who have not submitted proxy should do so now unless they wish to vote in person.
If you have previously executed a proxy and now wish to vote in person, the proxy will be turned upon your request. Mr. Thai, please state the number of shares of common stock present in person or represented by proxy. They are present in person or represented by proxy, a majority of the outstanding shares entitled to vote at this meeting. Legal notice of the meeting haven't been given in a quorum being present, the meeting is lawfully convened and ready to transact business.
The first order of business on the agenda is to elect 7 directors to serve until the annual meeting of stockholders of the company. Be held in 2018 and until their successors have been duly elected and qualified.
Corporate governance committee has nominated the following persons who are named in the company's proxy statement to serve as directors of the company in the annual meeting of stockholders to be held in 2018 and until their successors have been duly elected and qualified. Stroud Zelnick, Robert A. Bowman, Michael Dorneman, Jay Moses, Michael Sharretsky, the Vernon Swinevassen, and Susan Tolfson. I hereby present to this meeting the proposal set forth in the proxy statement that these nominees be elected as directors of the company for such annual term.
I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. Okay. The next order of business and the agenda is to cast an advisory vote to approve the compensation of the company's named executive officers.
I hereby present to this meeting the proposal set forth in the proxy statement that the stockholders approve on a non binding advisory basis, the company's the company's named executive officers.
Hold of a record who does not yet have a ballot and who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. Okay. The next order of business on the agenda is to cast an advisory vote to approve frequency of the advisory vote on the compensation of the companies named executive officers.
SEC statement that the stockholders approve on a non binding advisory basis and annual vote on the compensation of the company's named executive to serve. I'd second the proposal.
If there is a stockholder of record who does not yet have the ballot, who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. The next order of business and the agenda is to cast a vote to through the adoption of the TIG2 Interactive Software 20 17 Stock incentive plan.
I hereby present the proposal set forth in the proxy statement that the stockholders approve the adoption of the Take 2 Interactive Software, Inc. 2017 Stock incentive plan.
I second the proposal.
If there is a stockholder who does not yet have a ballot and wishes to vote in person, please raise your hand so that the sector of elections can deliver a ballot to you. The Take 2 interactive software 2017 Stock incentive plan qualified RSU sub plan for France.
I hereby present the proposal set forth in the proxy statement that the stockholders approve the adoption of the take to a direct Software, Inc. 2017 stock incentive plan qualified RSU sub plan for France. I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. The next order of business on the agenda is to cast a vote to approve the adoption of the Take 2 interactive software 2017 global employee stock purchase plan.
I hereby present the proposal set forth in the proxy statement that the stockholders approved the adoption of the Take 2 Interactive Software Inc. 2017 global employee stock purchase plan. I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you The next order of business on the agenda is to vote upon the proposal to ratify the appointment of Ernst And Young LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2018. I would like to introduce Mark Moran, and Christopher England, who are here today, representing Ernst And Young will be available to answer questions after the meeting.
I hereby present the proposal set forth in the proxy statement that the stockholders approved the ratification of the appointment of Ernst And Young LLP, the company's independent registered public accounting firm for the fiscal year ending March 31, 2018. I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the inspect elections can deliver a ballot to Do any stockholders have any questions relating to the business of the meeting? Please make sure that you've completed all in this necessary information on your ballots and cast your votes as you have intended to for the 4 agenda items. Will the Inspector of Elections, please collect the ballots. If any. The ballots, there being no ballots, I now declare the polls closed.
As I mentioned previously, the Inspector of Elections will tabulate the results of the voting, which will be reported to me as soon as practicable. There being no additional business to be conducted at the meeting. The business at the annual meeting is hereby concluded and the meeting is adjourned. We will now open the floor to a question and answer period. Representative of a stockholder, in which case, such stockholder must also be identified.
At this point, I will turn the floor back over Strauss Zelnick, Chairman and CEO of Take 2.
Thanks, Dan. I'm here to answer any questions you may have.
Yes. Good morning. My name is Howard Turnbaum, shareholder. First of all, I'd like to commend you and rest of the company for the stock performance. Based on my fidelity statement, as of yesterday, I understand within the last 52 weeks, the stock price is up about 125% So my portfolio thanks you as well in that regard.
We appreciate your kind words. Thanks.
We're really pleased for the performance of the company.
Okay. And my related questions is related to our $1,400,000,000 cash position as well as, as well as, well, before I ask specifically about that, what was our did we have any, did we pay any taxes last or was it basically alleviated because of the tax losses from the previous years? And if so, what was the overall rate if we paid any from what?
We do pay taxes and, Lainie knows our overall tax rate.
It's 22% this year, but, I'd have to look
at that.
So roughly 22% this year. Okay. So it's related to that. We can address that. Investor Relations can give you the exact numbers, separately, if you like, we can get back to you after the meeting.
Okay. Because it's related to my final questions based on, I mentioned the $1,400,000,000 in the cash position. Now I understand based on page 10 of the annexed on 10 K report that within the last three years, roughly about 45%, give or take a percentage or 2 from other years is from our international operations. Now what I would safely presume that that's approximately about the same percentage of our cash position is also overseas.
No. I think roughly 10% of our 23% is overseas.
So we don't
have a huge amount of trapped cash.
Okay. Because my related question is this, if President Trump's proposed tax repatriation rate takes into effect down 15% hypothetically, would the company consider putting some of our overseas money back here in the U. S, affect our operations anyway?
It won't affect our operations. And if we had a cash use, we'd consider it.
Okay. Thank you very much at this point.
Yes, sir. Can you come to the microphone please, sir? We can bring you
on. To
Sir, can you state your name and if you're a shareholder, please?
You. Are you planning to pay dividend? Sorry, David. Your name, please? Arthur Ulrich, shareholder.
Thank you.
I want to stock for 4 years. I'm very impressed with the price, but I'm surprised you don't pay a dividend.
And do you have a question, sir?
Yes. I wanted to ask if you're going to plan to pay a dividend
don't have any plans to pay a dividend right now. We think we have good solid use of our cash balance. So for example, in January, we acquired Social Point for a total consideration of $250,000,000, $175,000,000 of which was in cash. And we've said is that we intend to deploy our cash in 3 possible ways. First, to support our organic growth, which has really been story of this company.
In the last 10 years, our net revenue is nearly triple depending on the year. And that's been almost entirely driven by organic growth. Then we think we have a lot of great opportunities to invest. And when we invest, for example, in creating a new console title, we can invest a great of money and then over a number of years and invest a good deal in marketing. The second use of our cash is to support inorganic growth.
So additional strategic acquisitions, for example, like the Social Point acquisition. And the third is, we have a willingness to return cash to shareholders. So we've done 2 buybacks in the past years, totaling roughly $300,000,000. And that's something we'd consider on an ongoing basis as well. Because our earnings are variable year to year and because there is a risk profile associated with being a pure play entertainment company, We don't think it's appropriate to pay a dividend at this time.
Thanks again. My name is Howard. I'm again. I just have a quick question to ask you. Is this a big problem for our company in terms of stealing our any of our copyrights from any of our licensees, etcetera, like from, especially from overseas, like China, which is well known to steal you know, patents and copyrights from American companies.
Has that been a problem? And if so, how much would we be willing to spend in our future fiscal years as a result of that
Well, we haven't had any issues with regard to patent or copyright theft. We do have some piracy, of our product occasionally, although in the interactive entertainment business, it's not anywhere near as bad as it is, for example, in music, because our file sizes are big. Also, Since many of our products are connected online, it becomes very difficult to pirate. You could pirate a physical good. You can pirate a a standalone digital game, but it's much more difficult to really enjoy the full experience of a connected game because it's exceedingly difficult to pirate that experience.
You have to connect to our servers. So historically in the entertainment business, and I've been in pretty much every form of the entertainment business, you lose 5% to 10% of your revenue to piracy that you can't control. I think in the interactive entertainment business, it's quite a bit less than that. It's hard to know, because by definition, if we haven't shut it down, we're really not aware of what it is. The last time we had a really big piracy problem, it was with a handheld title in Germany, And that, that nearly was entirely pirated.
And as a result, we didn't do any more titles for that platform. But those, that was relatively unique to with a specific chip that was you could crack. So, we don't see it as a huge problem. We're very vigilant. Security is of utmost importance to us across the board, but specific pirating of intellectual property isn't doesn't appear to be a primary risk.
Any more questions? Thank you. Thank you all for joining us today.