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-Two. Please note that today's shareholder meeting is being broadcast by a listen-only webcast that is available on our website at www.taketwogames.com. A replay of the webcast will also be available on our website later today. Before we begin, I'd like to remind everyone that the statements made during this meeting that are not historical facts are considered forward-looking statements under federal 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. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking 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 31st, 2016, 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 30th, 2016, and the company's other periodic filings with the SEC, which can be accessed at www.taketwogames.com. I'd now like to introduce Strauss Zelnick, Chairman and CEO of Take-Two.
Thank you, Hank. Good morning. Welcome. The annual meeting of stockholders of Take-Two 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. Before we start, I'd like to introduce our officers, Karl Slatoff, our President, Lainie Goldstein, our Chief Financial Officer, Dan Emerson, our Executive Vice President and General Counsel, and Matt Breitman, Deputy General Counsel and Corporate Secretary of the company. You guys just raise your hands for a sec. I'd also like to introduce our other board members who are present today, Jon Moses, Michael Dornemann, Michael Sheresky, and Susan Tolson. I'll now turn the floor over to Dan Emerson. Good morning. I will act as chair of this portion of the meeting. Mr. Breitman will act as secretary of the meeting.
This meeting will be conducted in accordance with the agenda that was distributed at the start of the meeting. As detailed in Take-Two's proxy filing, the proposals to be considered and voted upon at this annual meeting are as follows: The election of six directors to hold office until the next annual stockholder meeting and until their successors have been duly elected and qualified. The approval on a non-binding advisory basis of the compensation of the company's named executive officers. The approval of certain amendments to the Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ended March 31, 2017, and such other business as may properly come before the annual shareholder meeting or any adjournment thereof.
I will note that only stockholders of record at the close of business on July 26th, 2016, are entitled to vote on these proposals at this annual meeting or any adjournment thereof. This meeting will be conducted in accordance with the procedural rules that have been established and distributed today to ensure that stockholders have an opportunity to properly consider and vote upon the business to come before the meeting. I would like to take a moment to review several of these key rules. Anyone wishing to address the meeting must be a stockholder of record as of the July 26th, 2016, record date, or a person holding a valid proxy from a stockholder of record. Stockholders of record should have the 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, while the polls are deemed open for voting on the proposals, we will entertain questions directly related to the matters being voted upon. After we have concluded the business of the meeting, the meeting will be adjourned. We will open the floor to general questions. By your presence at this meeting, you acknowledge your understanding of and willingness to abide by the procedural rules that were provided to you today. Let us continue with the business of the meeting. Mr. Breitman, will you please present proof of notice of this meeting?
Let the record reflect that I have been presented with a copy of the Notice of Annual Meeting of Stockholders dated July 28th, 2016, and the proxy materials dated July 28th, 2016, together with an affidavit of an authorized representative of Broadridge, the company responsible for mailing said materials, affirming as to the mailing on August 5th, 2016, of the notice of annual meeting and proxy materials to stockholders of record at the close of business on July 26th, 2016. I order the affidavit of mailing be filed with the minutes of this meeting. Mr. Breitman, will you please present a list of stockholders as of the close of business on July 26th, 2016, the record date fixed by the board of directors for the purpose of determining the stockholders entitled to vote at this meeting?
Let the record reflect that I've been presented with a list of stockholders of record as of the close of business on July 26th, 2016, furnished by an authorized representative of the company's transfer agent. There are 86,015,312 shares of 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. I hereby appoint Tom Tighe of Broadridge to act as the Inspector of Elections to determine the number of shares outstanding and entitled to vote, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, to receive and tabulate the votes on the matters to be acted upon at this meeting. Mr. Tighe has executed an affidavit to faithfully execute his duties as the Inspector.
The secretary will attach the affidavit to the minutes of the meeting. It is anticipated that the results will be reported to me as soon as practical. Is there any stockholder present who has not filled out the attendance sheet showing the name of the stockholder and the number of share 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 returned upon your request. Mr. Tighe, please state the number of shares of common stock present in person or represented by proxy.
There 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 having been given and 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 six directors to serve until the annual meeting of stockholders of the company to be held in 2017 and until their successors have been duly elected and qualified.
The Board of Directors, acting upon the recommendation of the Corporate Governance Committee, has nominated the following persons who are named in the company's proxy statement to serve as directors of the company until the annual meeting of stockholders to be held in 2017 and until their successors have been duly elected and qualified. Strauss Zelnick, Robert A. Bowman, Michael Dornemann, Jon Moses, Michael Sheresky, and Susan Tolson. 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 terms.
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 on 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 compensation of the company's named executive officers as set forth in the proxy statement.
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 certain amendments to the Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan.
I hereby present the proposal set forth in the proxy statement that the stockholders approve certain amendments to the Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan as set forth in the proxy statement.
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 & Young LLP as the company's independent registered public accounting firm for the fiscal year ending March 31st, 2017. I would like to introduce Mark Moran and Christopher England, who are here today representing Ernst & Young and will be available to answer questions after the meeting.
I hereby present the proposal set forth in the proxy statement that the stockholders approve the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2017, as set forth in the proxy statement.
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. Do any stockholders have questions relating to the business of this meeting? Please make sure that you have completed all necessary information in your ballots and cast your votes as you have intended for the four agenda items. Will the Inspector of Elections please collect the ballots? The ballots having been collected, 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 practical. As I noted earlier, once the business of the meeting has concluded, we will officially conclude this meeting.
There being no additional business to be conducted at the meeting, the business of the annual meeting is hereby concluded, and the meeting is adjourned. We will now open the floor to a question and answer period. As a reminder, any stockholder who wants to ask a question must state their name, whether they are a personal stockholder or an authorized representative of a stockholder, in which case such stockholder must also be identified. I turn the floor over to Strauss Zelnick, Chairman and CEO of Take-Two.
Thank you, Dan. Yes, sir.
One mic. Please, if you'd like.
Yes, good morning. My name is Howard Tenenbaum, stockholder. First of all I noticed on my Fidelity account that compared to as of last night's close, the stock's appreciation from one year ago is up over 53%. No complaints from me in that department, and my portfolio thanks you there. Secondly, before I ask some questions, I read on the internet, I believe it was the Daily Caller website, they specifically mentioned that the "Grand Theft Auto," in a research done by some German researchers, claimed that by listening to "Grand Theft Auto" while driving reduced car accidents by 25%, because they claimed that it distracted people from instead of utilizing emails as well as sexual activity, which I have no idea what that meant. Anyway, I want to ask you to comment on that one. Anyway, let me start with my questions.
Please.
I understand in the annual, I think it was page 19, that it mentioned that the company has, from the last fiscal year, about over 47% of the revenues are coming internationally. Because of the strength of the dollar, do you know offhand how much that has affected earnings per share?
That's a great question. We're pretty naturally hedged.
Okay.
The strength of the dollar shouldn't affect us that much. If we are disproportionately, if revenues do come in from Europe on a title, then it could hurt us a little bit in translation. Lainie, is there anything that you want to add to that? Okay. It shouldn't be a meaningful number.
Okay
in aggregate because we do have some hedging activities and as I said, we're pretty naturally hedged.
Okay. Also the second question, also going on the international vein itself. How is the Brexit vote, since we have operations in Great Britain, going to affect us in the future? If there's also some other additional disruption as a domino effect from the rest of the countries from the EU separating, how would that might affect our company in terms of not only revenues, but operations, et cetera?
It's a good question, and it's hard to say. I think the way that most companies who are doing business around the world and Europe feel is that it probably won't be particularly relevant, not to the good or not to the bad. It's definitely going to make it harder to move employees cross-border in Europe. That could hurt us a little bit because we do have studios in numerous places. I think we'll be able to work around it. I think in the next couple of years as the U.K. sorts out the execution of Brexit, they're going to have to enter into something like 23 new treaties. I think it'll be complicated and I think it's great news for the lawyers. I don't think it'll really matter to us. I don't think it'll really matter at all.
It's an annoyance and we would've preferred it didn't happen, but I don't think it's going to be significant for our operations, and it certainly wouldn't change our consumers' behavior.
Okay, my last question, I guarantee, is shortly the U.S. is going to be surrendering our control on the internet, and I'm just wondering how that might affect our company in terms of our outreach, our distributions, both here in the U.S. and worldwide.
We don't really think what's going on with ICANN should affect us at all, although I don't think it's a good move on the part of the U.S., frankly. It is a poor decision, but I don't think it'll affect us. I do think it puts a fine point on security. We don't really tend to talk about that loudly because we don't want to become a target.
I think after the Sony hack in general, we and companies like us who have strong brand and strong consumer-facing presence have really tuned up our attention to security. I do think that the U.S. government's loss of control over domain names just probably puts a finer point on our need to focus on security. We're already very interested in that. I don't think it'll change anything, but I do think it just continues to cause us to focus more on security, and that is a greater area of focus and a greater area of expense for us.
Okay. Thank you very much.
Thanks for your questions. Do we have any other questions? Okay. Thanks so much for joining us today. We are adjourned. Appreciate it.