Third Quarter 2019
Highlights
- Revenues were $186.3 million as compared to $188.4 million in
the prior year quarter
- Operating income was $6.4 million; Adjusted OIBDA1 was $25.4
million, which exceeded the Company’s guidance
- SmackDown debuted on Fox (Friday, Oct. 4) and averaged 3.9
million viewers during the premier telecast, up 221% versus the
same time slot over the prior four weeks on Fox (9/6-9/27)2
- Announced content distribution deal with USA Network to air
NXT, expanding the reach of the new live, 2-hour show to further
build WWE’s third global brand alongside Raw and SmackDown
- WWE Network averaged 1.51 million paid subscribers3, consistent
with the Company’s guidance
- Through the first nine months of 2019, digital video views
increased 12% on a year-over-year basis to 25.6 billion and hours
consumed increased 14% to 957 million hours across digital and
social platforms4
Business Outlook
- The Company has modified its full year 2019 guidance to an
Adjusted OIBDA range of $180 million to $190 million5, which would
be an all-time record. The change is attributable to the delay in
completing a previously contemplated agreement in the MENA region
and the impact of accelerated investment to support content
creation. While the Company continues to work toward the completion
of a MENA agreement, no assurances can be given in this regard. The
Company expects to have clarity on this point in advance of
providing guidance for 20205
- The Company expects to provide in-depth perspective on its 2020
performance, long-term strategy and business model in mid-to-late
February following the announcement of its 2019 results
WWE (NYSE: WWE) today announced financial results for its third
quarter ended September 30, 2019.
“During the quarter, we remained focused on expanding the reach
of WWE’s brand with the successful debut of Friday Night SmackDown
on Fox Broadcast and NXT on USA Network,” stated Vince McMahon,
Chairman and Chief Executive Officer. “With our flagship
programming now spanning both broadcast and cable throughout the
week in the U.S. and our expanding roster of international
distribution partners, we remain excited about our ability to
deepen the engagement with our fans around the world.”
George Barrios, Co-President, added “In the quarter, we
accelerated strategic investments to support our content creation.
Although we have modified our 2019 guidance of Adjusted OIBDA to a
range of $180 million to $190 million, performance in this range
would still be an all-time record. We continue to believe in WWE’s
global growth potential and remain focused on maximizing future
opportunities and shareholder value.”
Third-Quarter Consolidated
Results
Revenues were $186.3 million as compared to $188.4
million from the prior year quarter as increased revenue in the
Media segment, driven by the monetization of core content, was more
than offset by decreased sales of live event tickets and
merchandise.
Operating Income decreased to $6.4 million from $18.1
million in the prior year quarter, reflecting the decline in
revenue and increases in fixed costs, including the impact of
certain strategic investments, which were partially offset by a
year-over-year reduction in accrued management incentive
compensation. The Company’s Operating income margin declined to 3%
from 10% in the prior year quarter.
Adjusted OIBDA (which excludes stock compensation) was
$25.4 million as compared to $35.8 million in the prior year
quarter. The Company’s Adjusted OIBDA margin was 14% as compared to
19% in the prior year quarter.
Net Income declined to $5.8 million, or $0.06 per diluted
share, from $33.6 million, or $0.37 per diluted share, in the third
quarter of 2018, primarily reflecting a reduction in excess tax
benefits related to the Company’s share-based compensation awards
at vesting, lower operating performance and the impact of the
finance lease related to the Company’s new headquarters.6
Effective Tax Rate increased in the current year quarter
relative to that in the third quarter of 2018, primarily driven by
the recognition of $8.0 million of excess tax benefits related to
the Company's share-based compensation awards at vesting, as
compared to $20.7 million in the prior year quarter. The decline in
excess tax benefits was driven by the change in the Company’s stock
price between the original grant date of the awards and their
subsequent vesting date during the third quarter. Excluding
discrete items (including the above mentioned excess tax benefits),
the Company’s effective tax rate was 27% in the current year
quarter as compared to 28% in the prior year quarter.
Cash flows generated by operating activities were $3.2
million as compared to $44.7 million in the prior year quarter
driven by unfavorable timing of working capital and lower operating
performance.
Free Cash Flow was a $16.4 million use of cash as
compared to a $35.5 million source of cash in the third quarter of
2018 primarily driven by the change in operating cash flow and, to
a lesser extent, a $10.4 million increase in capital expenditures
primarily associated with the Company’s workspace plan.7
Cash, cash equivalents and short-term investments were
$231 million as of September 30, 2019, and the Company estimates
debt capacity under its revolving line of credit of
approximately $200 million.
The schedule below reflects WWE’s performance by operating
segment (in millions):1
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net Revenues:
Media
$
146.1
$
142.1
$
478.5
$
478.1
Live Events
23.2
26.7
98.2
109.8
Consumer Products
17.0
19.6
60.9
69.8
Total Net Revenues
$
186.3
$
188.4
$
637.6
$
657.7
Operating Income:
Media
$
33.0
$
39.3
$
76.2
$
107.2
Live Events
(3.5)
(1.1)
8.7
15.2
Consumer Products
3.4
2.8
13.6
13.4
Corporate
(26.5)
(22.9)
(81.8)
(74.7)
Total Operating
Income
$
6.4
$
18.1
$
16.7
$
61.1
Adjusted OIBDA:
Media
$
41.5
$
50.4
$
107.5
$
138.5
Live Events
(2.9)
0.2
11.2
18.5
Consumer Products
4.0
4.0
16.2
17.8
Corporate
(17.2)
(18.8)
(62.5)
(60.3)
Total Adjusted OIBDA
$
25.4
$
35.8
$
72.4
$
114.5
Results by Operating
Segment
Media
Revenues increased to $146.1 million from $142.1 million
in the prior year quarter, primarily due to the contractual
escalation of core content rights fees, including license fees from
the distribution of the Company’s flagship programs Raw and
SmackDown, as well as the timing and performance of WWE Studios’
portfolio of releases, as reflected in “Other.” The growth was
partially offset by the decline in WWE Network subscription
revenues.
WWE Network’s average paid subscribers decreased 9% to
approximately 1.51 million, primarily driven by the impact of lower
subscriber additions earlier in the year. For the fourth quarter
2019, the Company projects average paid subscribers of
approximately 1.43 million, representing a year-over-year decline
of 10%.3,5
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Revenues:
Network (including
pay-per-view)
$
44.2
$
49.5
$
143.0
$
152.5
Core content rights fees 8
72.2
65.9
209.3
197.6
Advertising and sponsorship
15.0
15.0
44.8
46.8
Other 9
14.7
11.7
81.4
81.2
Total Revenues
$
146.1
$
142.1
$
478.5
$
478.1
Operating income declined to $33.0 million as compared to
$39.3 million in the prior year quarter primarily due to the impact
of increased content-related expenses, which were partially offset
by a reduction in accrued management incentive compensation.
Adjusted OIBDA was $41.5 million as compared to $50.4
million in the prior year quarter.
Key Highlights: During the quarter, WWE made important
progress on strategic initiatives that extend the reach of its
brands and superstar talent. Specifically, the Company prepared for
the transition of SmackDown to Fox Broadcast. To promote the
program’s success, and with WWE’s support, Fox launched a new
advertising campaign with the tagline, “We’re All Superstars,”
which has been highly visible across Fox’s array of marquis sports
programming. SmackDown successfully transitioned to Fox, with the
program’s debut on October 4th - which celebrated SmackDown’s 20th
anniversary on TV – attracting 3.9 million average viewers, making
it one of Fox’s highest-rated Friday night programs over the past 3
years. While advancing SmackDown’s position, the Company also
expanded its Wednesday night show, NXT, from one to two hours, and
began to air the program live on USA Network, further building the
brand as a complement to WWE’s flagship programs. Including the
newly licensed NXT show, WWE now airs seven hours of live, in-ring
content that span Monday, Wednesday and Friday every week, creating
a lineup that broadens its reach and deepens its engagement with
fans. In addition to producing the two highest rated programs on
USA Network, Monday Night Raw and SmackDown Live, WWE continued to
produce, develop and partner on new original content across
programs. On television, Fox developed WWE Backstage, a weekly
studio show to premier November 5th on FS1. On WWE Network, the
Company planned Crown Jewel, an event featuring top boxing and UFC
talent, Tyson Fury and Cain Velasquez (October 31). For its social
and digital platforms, WWE developed After the Bell, the Company’s
first weekly podcast series (beginning October 30). The Company has
also partnered with Paramount on the animated feature film, Rumble,
with WWE Superstars Becky Lynch and Roman Reigns together with the
main cast providing the voices for the movie’s characters (release
expected in July 2020).
Live Events
Revenues declined $3.5 million to $23.2 million due to
lower ticket sales at the Company’s North America events, primarily
due to weaker performance and the staging of fewer events in North
America.
- There were 74 total events (excluding NXT) in the current
quarter, consisting of 67 events in North America and 7 events in
international markets, as compared to 90 events in the prior year
quarter, including 86 events in North America and 4 in
international markets.
- North American ticket sales declined $4.1 million during the
quarter, primarily due to lower attendance and the staging of 19
fewer events. Partially offsetting these declines, the average
ticket price increased 6% to $56.64.
- International live event revenue of $2.3 million was
essentially unchanged from the prior year quarter as the staging of
three additional events was offset by reductions in the average
ticket price and average attendance.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Revenues:
North American ticket sales
$
18.3
$
22.4
$
76.0
$
85.7
International ticket sales
2.3
2.3
12.0
15.8
Advertising and sponsorship
0.5
0.4
1.7
1.5
Other 10
2.1
1.6
8.5
6.8
Total Revenues
$
23.2
$
26.7
$
98.2
$
109.8
Operating income reflected a loss of $3.5 million as
compared to a loss of $1.1 million, primarily due to lower
attendance at the Company’s North American events. Although the
Company held 19 fewer North American events, this change had a
limited impact on operating income.
Adjusted OIBDA reflected a loss of $2.9 million as
compared to $0.2 million in the prior year quarter.
Key Highlights: WWE continued to stage large-scale,
action-packed events for engaging with its global fanbase. During
the quarter, SummerSlam was performed in front of a sold-out crowd
of nearly 17,000 fans to the ScotiaBank Arena in Toronto. Further
demonstrating the importance of its global fanbase, WWE returned to
China for the fourth-straight year with WWE LIVE Shanghai at the
Mercedes Benz Arena and will hold Crown Jewel at King Fahd
International Stadium in Riyadh, its second 2019 event in Saudi
Arabia, later today. Over the coming months, the Company plans to
hold international, live-event tours across Europe, Asia Pacific
and Latin America.
Consumer Products
Revenues decreased 13% to $17.0 million from $19.6
million in the prior year quarter reflecting lower product sales
across distribution platforms, including the Company’s e-commerce
site, WWE Shop, live event venues and licensing agreements. Lower
sales of merchandise at the Company’s live event venues can be
attributed, at least in part, to the staging of fewer events (as
described above).
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Revenues:
Consumer product licensing
$
7.8
$
8.5
$
26.6
$
28.6
eCommerce
5.7
6.8
18.9
23.3
Venue merchandise
3.5
4.3
15.4
17.9
Total Revenues
$
17.0
$
19.6
$
60.9
$
69.8
Operating income increased 21% to $3.4 million from $2.8
million in the prior year quarter as the decline in revenue was
more than offset by lower operating expenses, including a reduction
in accrued management incentive compensation.
Adjusted OIBDA of $4.0 million was essentially unchanged
from the prior year quarter.
Key Highlights: During the quarter, WWE continued to
innovate new products that build engagement with its Superstar
talent. To celebrate the 35th anniversary of both WrestleMania and
the Ghostbusters franchise, WWE, in collaboration with Mattel,
created a WWE Ghostbuster action-figure collection, which quickly
became a top-selling product line at Walmart. Continuing the
evolution of WWE’s franchise video game, the Company launched WWE
2K20 on October 22nd, which was developed by Take-Two
Interactive.
Financial Outlook 2019
The Company’s previous full year guidance, which targeted
Adjusted OIBDA of at least $200 million, assumed continued
improvement in WWE’s engagement metrics, a second large scale event
in the MENA region, and the completion of a media rights deal in
the MENA region. Although the Company is holding a second
large-scale event today in Riyadh, Saudi Arabia, its previously
contemplated agreement for the region has not yet been completed.
Additionally, the Company has accelerated strategic investments to
support the creation of its content while reducing or delaying
other expenses to lessen the impact of that investment. Given the
delay in completing a MENA agreement and the impact of these
strategic investments, the Company has modified its full year
guidance to an Adjusted OIBDA range of $180 million to $190
million5, which would be an all-time record.
The Company’s full year guidance includes estimated fourth
quarter 2019 Adjusted OIBDA of approximately $108 to $118 million.5
The fourth quarter results reflect substantial revenue growth from
the Company’s new content distribution agreements in the U.S.,
which become effective at the start of the quarter.
WWE is unable to provide a reconciliation of fourth quarter or
full year guidance to GAAP measures as, at this time, WWE cannot
accurately determine all of the adjustments that would be
required.
Strategy and Financial Perspective:
2020 and Beyond
The Company expects to provide in-depth perspective on its 2020
performance, long-term strategy and business model in mid-to-late
February following the announcement of its 2019 results. Management
plans to discuss the evolving media landscape, the potential range
of the Company’s revenue and Adjusted OIBDA growth based on its key
growth pillars, including its approach to evaluating and managing
anticipated investments, as well as the Company’s capital
allocation. The timing of this communication balances three
objectives: to communicate as soon as possible, minimize the range
of outcomes for the Company’s 2020 guidance and adhere to best
practices for the communication of important strategic matters
close to year-end. The Company anticipates that its core content
rights will drive significant growth in revenue and Adjusted OIBDA
in 2020. Management believes that the Company is well positioned to
continue to drive growth thereafter, leveraging its focus on
content, digitization and globalization.
Notes
- The definition of Adjusted OIBDA can be found in the Non-GAAP
Measures section of the release on pages 7-8. A reconciliation of
three and nine months ended September 30, 2019 and 2018 Operating
Income to Adjusted OIBDA can be found in the Supplemental
Information in this release on pages 13-14
- Data based on average viewers per live episode/ game measured
on a Live+SD basis across broadcast and cable networks. Source:
Nielsen Media Research, NPOWER
- Average paid subscribers are calculated based on the arithmetic
daily mean over the relevant period, and may differ substantially
from paid subscribers at the end of any period due to the timing of
paid subscriber additions and losses
- Consumption includes videos viewed on third party (Facebook,
YouTube, Twitter, Instagram, Snapchat, etc.) and WWE platforms
(WWE.com and WWE App). Social media followers represent the number
of followers for each individual platform as sourced from each
platform; as such, total followers shown have not been adjusted for
duplication among or within platforms and do not represent the
number of “unique” followers
- The Company’s business model and expected results (including
our outlook for the fourth quarter and full year 2019) will
continue to be subject to significant execution and other risks,
including risks relating to entering into, maintaining and/ or
renewing key agreements, uncertainties associated with
international markets and risks inherent in large live events, and
the other risks outlined in the Company’s Form 10-K filing with the
SEC
- As previously announced on March 18, 2019, the Company entered
into a lease for its new Company headquarters. The lease commenced
on July 1, 2019 at which time the Company gained control of the
leased premises. The lease is accounted for as a finance lease
pursuant to the new lease accounting standard, and the Company
recorded a lease obligation of $325,453 and right-of-use asset of
$285,762, net of tenant improvement allowances of $39,838 which are
expected to be received from the landlord. For more information
please refer to the Company’s Q3 2019 10-Q filing
- A reconciliation of three and nine months ended September 30,
2019 and 2018 Free Cash Flow to Net cash provided by operating
activities can be found in the Supplemental Information in this
release on page 15
- Core content rights fees consist primarily of licensing
revenues earned from the distribution of our flagship programs, Raw
and SmackDown, as well as our NXT programming, through global
broadcast, pay television and digital platforms
- Other forms of media monetization reflect revenues earned from
the distribution of other WWE content, including, but not limited
to, certain live in-ring programming content in international
markets, scripted, reality and other programming, as well as
theatrical and direct-to-home video releases
- Other Live Events includes revenue from the sale of travel
packages associated with the Company’s global live events, and
commissions earned through secondary ticketing as well as revenue
from events for which the Company receives a fixed fee
Non-GAAP Measures
The Company defines Adjusted OIBDA as operating income
excluding depreciation and amortization, stock-based compensation
expense, certain impairment charges and other non-recurring
material items that otherwise would impact the comparability of
results between periods. Adjusted OIBDA includes amortization
expenses directly related to the Company's revenue generating
activities, including feature film and television production asset
amortization, amortization of costs related to content delivery and
technology assets utilized for the WWE Network, as well as
amortization of right-of-use assets related to finance leases of
equipment used to produce and broadcast our live events. The
Company believes the presentation of Adjusted OIBDA is relevant and
useful for investors because it allows them to view the Company’s
segment performance in the same manner as the primary method used
by management to evaluate segment performance and to make decisions
regarding the allocation of resources. Additionally,
the Company believes that Adjusted OIBDA is a primary measure
used by media investors, analysts and peers for comparative
purposes.
Adjusted OIBDA is a non-GAAP financial measure and may be
different than similarly-titled non-GAAP financial measures used by
other companies. WWE views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA (and other non-GAAP
measures such as Adjusted Operating Income, Adjusted Net Income and
Adjusted EPS presented to exclude certain material items that
impact the comparability between periods) should not be considered
in isolation from, or as a substitute for, operating income or
other GAAP measures, such as net income or operating cash flow, as
an indicator of operating performance or liquidity.
The Company defines Free Cash Flow as net cash provided
by operating activities less cash used for capital expenditures.
WWE views net cash provided by operating activities as the most
directly comparable GAAP measure. Although it is not a recognized
measure of liquidity under U.S. GAAP, Free Cash Flow provides
useful information regarding the amount of cash WWE’s continuing
business generates after capital expenditures and is available for
reinvesting in the business, debt service, payment of dividends,
and the repurchase of stock.
Additional Information
Additional business metrics are made available to investors on
the corporate website - corporate.wwe.com/investors. Note: As previously
announced WWE will host a conference call at 11:00 a.m. ET on
October 31st to discuss the Company's earnings results for the
third quarter of 2019. All interested parties are welcome to listen
to a live web cast that will be hosted through the Company’s web
site at corporate.wwe.com/investors.
Participants can access the conference call by dialing
1-855-200-4993 (toll free) or 1-323-794-2092 from outside the U.S.
(conference ID for both lines: 9871358). Please reserve a line 5-10
minutes prior to the start time of the conference call.
The earnings presentation referenced during the call will be
made available on October 31, 2019 at corporate.wwe.com/investors. A replay of the call
will be available approximately two hours after the conference call
concludes, and can be accessed on the Company’s web site.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated
media organization and recognized leader in global entertainment.
The Company consists of a portfolio of businesses that create and
deliver original content 52 weeks a year to a global audience. WWE
is committed to family friendly entertainment on its television
programming, pay-per-view, digital media and publishing platforms.
WWE’s TV-PG, family-friendly programming can be seen in more than
800 million homes worldwide in 25 languages. WWE Network, the
first-ever 24/7 over-the-top premium network that includes all live
pay-per-views, scheduled programming and a massive video-on-demand
library, is currently available in more than 180 countries. The
Company is headquartered in Stamford, Conn., with offices in New
York, Los Angeles, London, Mexico City, Mumbai, Shanghai,
Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at
wwe.com and corporate.wwe.com. For information on our global
activities, go to http://www.wwe.com/worldwide/.
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains forward-looking statements pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of
1995, which are subject to various risks and uncertainties. These
risks and uncertainties include, without limitation, risks relating
to: entering, maintaining and renewing major distribution and event
agreements; WWE Network (including the risk that we are unable to
attract, retain and renew subscribers); our need to continue to
develop creative and entertaining programs and events; the
possibility of a decline in the popularity of our brand of sports
entertainment; the continued importance of key performers and the
services of Vincent K. McMahon; possible adverse changes in the
regulatory atmosphere and related private sector initiatives; the
highly competitive, rapidly changing and increasingly fragmented
nature of the markets in which we operate and greater financial
resources or marketplace presence of many of our competitors;
uncertainties associated with international markets including
possible disruptions and reputational risks; our difficulty or
inability to promote and conduct our live events and/or other
businesses if we do not comply with applicable regulations; our
dependence on our intellectual property rights, our need to protect
those rights, and the risks of our infringement of others’
intellectual property rights; the complexity of our rights
agreements across distribution mechanisms and geographical areas;
potential substantial liability in the event of accidents or
injuries occurring during our physically demanding events
including, without limitation, claims alleging traumatic brain
injury; large public events as well as travel to and from such
events; our feature film business; our expansion into new or
complementary businesses and/or strategic investments; our computer
systems and online operations; privacy norms and regulations; a
possible decline in general economic conditions and disruption in
financial markets; our accounts receivable; our indebtedness
including our convertible notes; litigation; our potential failure
to meet market expectations for our financial performance, which
could adversely affect our stock; Vincent K. McMahon exercises
control over our affairs, and his interests may conflict with the
holders of our Class A common stock; a substantial number of shares
are eligible for sale by the McMahons and the sale, or the
perception of possible sales, of those shares could lower our stock
price; and the volatility of our Class A common stock. In addition,
our dividend is dependent on a number of factors, including, among
other things, our liquidity and historical and projected cash flow,
strategic plan (including alternative uses of capital), our
financial results and condition, contractual and legal restrictions
on the payment of dividends (including under our revolving credit
facility), general economic and competitive conditions and such
other factors as our Board of Directors may consider relevant.
Forward-looking statements made by the Company speak only as of the
date made and are subject to change without any obligation on the
part of the Company to update or revise them. Undue reliance should
not be placed on these statements. For more information about risks
and uncertainties associated with the Company’s business, please
refer to the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors” sections of
the Company’s SEC filings, including, but not limited to, our
annual report on Form 10-K and quarterly reports on Form 10-Q.
World Wrestling Entertainment,
Inc.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net revenues
$
186.3
$
188.4
$
637.6
$
657.7
Operating expenses
133.8
120.8
466.6
439.7
Marketing and selling expenses
16.4
23.5
64.4
73.1
General and administrative expenses
18.5
20.1
66.4
64.7
Depreciation and amortization
11.2
5.9
23.5
19.1
Operating income
6.4
18.1
16.7
61.1
Interest expense
7.9
3.6
18.2
11.8
Other income, net
0.2
3.5
2.8
3.3
(Loss) income before income taxes
(1.3)
18.0
1.3
52.6
Benefit from income taxes
(7.1)
(15.6)
(6.5)
(5.8)
Net income
$
5.8
$
33.6
$
7.8
$
58.4
Earnings per share:
Basic
$
0.07
$
0.43
$
0.10
$
0.75
Diluted
$
0.06
$
0.37
$
0.09
$
0.66
Weighted average common shares
outstanding:
Basic
78.5
77.8
78.2
77.4
Diluted
89.9
90.8
90.8
87.9
Dividends declared per common share (Class
A and B)
$
0.12
$
0.12
$
0.36
$
0.36
World Wrestling Entertainment,
Inc.
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
September 30,
December 31,
2019
2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
76.5
$
167.5
Short-term investments, net
154.9
191.7
Accounts receivable, net
142.9
78.9
Inventory
8.5
7.7
Prepaid expenses and other
current assets
36.7
28.2
Total current assets
419.5
474.0
PROPERTY AND EQUIPMENT, NET
175.6
148.1
FINANCE LEASE RIGHT-OF-USE ASSETS, NET
294.4
—
OPERATING LEASE RIGHT-OF-USE ASSETS,
NET
21.7
—
FEATURE FILM PRODUCTION ASSETS, NET
15.4
13.6
TELEVISION PRODUCTION ASSETS, NET
4.7
7.5
INVESTMENT SECURITIES
27.9
30.2
NON-CURRENT DEFERRED INCOME TAX ASSETS
16.7
17.1
OTHER ASSETS, NET
46.2
9.8
TOTAL ASSETS
$
1,022.1
$
700.3
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Current portion of long-term
debt
$
4.8
$
5.1
Finance lease liabilities
8.7
—
Operating lease liabilities
6.5
—
Convertible debt
187.2
183.1
Accounts payable and accrued
expenses
82.9
120.1
Deferred income
68.0
49.2
Total current liabilities
358.1
357.5
LONG-TERM DEBT
22.2
25.7
FINANCE LEASE LIABILITIES
332.8
—
OPERATING LEASE LIABILITIES
15.6
—
OTHER NON-CURRENT LIABILITIES
0.4
0.9
Total liabilities
729.1
384.1
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Class A common stock
0.5
0.4
Class B convertible common
stock
0.3
0.3
Additional paid-in capital
419.5
415.3
Accumulated other comprehensive
income
2.6
1.5
Accumulated deficit
(129.9)
(101.3)
Total stockholders’ equity
293.0
316.2
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,022.1
$
700.3
World Wrestling Entertainment,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Nine Months Ended
September 30,
2019
2018
OPERATING ACTIVITIES:
Net income
$
7.8
$
58.4
Adjustments to reconcile net
income to net cash provided by operating activities:
Amortization and impairments of
feature film production assets
4.8
5.9
Amortization of television
production assets
22.8
20.5
Depreciation and
amortization
27.8
24.1
Other amortization
10.3
4.7
Loss on equity investments,
net
3.2
0.8
Services provided in exchange
for equity instruments
(1.5)
(2.3)
Stock-based compensation
32.2
34.3
Provision for (benefit from)
deferred income taxes
0.5
(2.7)
Other non-cash adjustments
6.2
1.9
Cash (used in) provided by
changes in operating assets and liabilities:
Accounts receivable
(64.2)
(8.2)
Inventory
(0.8)
(0.6)
Prepaid expenses and other
assets
(8.8)
(20.4)
Feature film production
assets
(6.6)
(0.9)
Television production
assets
(20.0)
(20.3)
Accounts payable, accrued
expenses and other liabilities
(31.6)
9.1
Deferred income
20.2
17.2
Net cash provided by operating
activities
2.3
121.5
INVESTING ACTIVITIES:
Purchases of property and
equipment and other assets
(56.3)
(21.4)
Purchases of short-term
investments
(74.9)
(82.1)
Proceeds from sales and
maturities of investments
113.3
50.8
Purchase of investment
securities
(1.0)
(1.0)
Other
0.8
1.0
Net cash used in investing
activities
(18.1)
(52.7)
FINANCING ACTIVITIES:
Repayment of debt
(3.8)
(3.5)
Repayment of finance leases
(6.2)
—
Dividends paid
(28.2)
(27.9)
Debt issuance costs
(0.7)
—
Taxes paid related to net
settlement upon vesting of equity awards
(30.1)
(50.7)
Proceeds from issuance of
stock
2.3
1.7
Repurchase and retirement of
common stock
(8.5)
—
Net cash used in financing
activities
(75.2)
(80.4)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(91.0)
(11.6)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
167.5
137.7
CASH AND CASH EQUIVALENTS, END
OF PERIOD
$
76.5
$
126.1
NON-CASH INVESTING TRANSACTIONS:
Purchases of property and equipment
recorded in accounts payable and accrued expenses
$
7.2
$
5.6
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted OIBDA
(In millions, except per share
data)
(Unaudited)
Three Months Ended September
30, 2019
Operating Income
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
33.0
$
3.2
$
5.3
$
—
$
41.5
Live Events
(3.5)
—
0.6
—
(2.9)
Consumer Products
3.4
—
0.6
—
4.0
Corporate
(26.5)
8.0
1.3
—
(17.2)
Total
$
6.4
$
11.2
$
7.8
$
—
$
25.4
Three Months Ended September
30, 2018
Operating Income
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
39.3
$
3.1
$
8.0
$
—
$
50.4
Live Events
(1.1)
—
1.3
—
0.2
Consumer Products
2.8
—
1.2
—
4.0
Corporate
(22.9)
2.8
1.3
—
(18.8)
Total
$
18.1
$
5.9
$
11.8
$
—
$
35.8
Nine Months Ended September
30, 2019
Operating Income
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
76.2
$
8.1
$
23.2
$
—
$
107.5
Live Events
8.7
—
2.5
—
11.2
Consumer Products
13.6
—
2.6
—
16.2
Corporate
(81.8)
15.4
3.9
—
(62.5)
Total
$
16.7
$
23.5
$
32.2
$
—
$
72.4
Nine Months Ended September
30, 2018
Operating Income
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
107.2
$
9.1
$
22.2
$
—
$
138.5
Live Events
15.2
—
3.3
—
18.5
Consumer Products
13.4
—
4.4
—
17.8
Corporate
(74.7)
10.0
4.4
—
(60.3)
Total
$
61.1
$
19.1
$
34.3
$
—
$
114.5
World Wrestling Entertainment,
Inc.
Supplemental Information -
Reconciliation of Business Outlook
(In millions, except per share
data)
(Unaudited)
Reconciliation of Adjusted OIBDA to
Operating Income
Q3 2019
Q3 2019 YTD
Q4 2019
FY 2019
Adjusted OIBDA
$
25.4
$
72.4
$108 - $118
$180 - $190
Depreciation & amortization (1)
(11.2)
(23.5)
—
—
Stock-based compensation (1)
(7.8)
(32.2)
—
—
Film impairments (1)
—
—
—
—
Asset impairments (1)
—
—
—
—
Gain (losses) on operating assets (1)
—
—
—
—
Restructuring charges (1)
—
—
—
—
Other operating income items (1)
—
—
—
—
Operating income (U.S. GAAP
Basis)
$
6.4
$
16.7
Not estimable
Not estimable
- Because of the nature of these items, WWE is unable to estimate
the amounts of any adjustments for these items for periods after
September 30, 2019 due to its inability to forecast if or when such
items will occur. These items are inherently unpredictable and may
not be reliably quantified.
World Wrestling Entertainment,
Inc.
Supplemental Information -
Free Cash Flow
(In millions)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net cash provided by operating
activities
$
3.2
$
44.7
$
2.3
$
121.5
Less cash used for capital
expenditures:
Purchase of property and
equipment and other assets
(19.6)
(9.2)
(56.3)
(21.4)
Free Cash Flow
$
(16.4)
$
35.5
$
(54.0)
$
100.1
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191031005347/en/
Investors: Michael Weitz 203-352-8642 Michael Guido, CFA
203-352-8779 Media: Matthew Altman 203-352-1177
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