Fourth Quarter 2022
Highlights
- Revenue was $325.3 million, an increase of 5%; Operating income
was $62.7 million, a decrease of 22%; and Adjusted OIBDA1 was $90.2
million, a decrease of 4%
- Returned $8.9 million of capital to shareholders through
dividend payments
- Crown Jewel was the most viewed international event in WWE’s
history. Domestic unique viewership on Peacock increased 70% over
the prior year event
- Each WWE domestic premium live event (Extreme Rules and
Survivor Series) was the most viewed event in its history with
year-over-year increases of 36% and 46%, respectively, in domestic
unique viewership
- WWE announced a multi-year extension of its partnership with
MultiChoice to expand the distribution of the Company’s content in
Sub-Saharan Africa
- In January 2023, WWE held Royal Rumble at the Alamodome in San
Antonio, TX. The event was the most viewed Royal Rumble in WWE’s
history, with a 52% year-over-year increase in domestic unique
viewership, and generated the highest gate in the event’s
history
Full Year 2022
Highlights
- Revenue increased 18% to $1.3 billion, the highest in the
Company’s history
- Operating income increased 11% to a record $283.3 million
- Adjusted OIBDA increased 19% to a record $384.6 million
- Returned $75.7 million of capital to shareholders, including
share repurchases and dividends paid
2023 Business Outlook2
- The Company is targeting Adjusted OIBDA of $395 to $410 million
for the full year 2023, which would be an all-time record. The
Company also expects to generate an all-time record for revenue in
2023.
WWE (NYSE: WWE) today announced financial results for its fourth
quarter and year ended December 31, 2022.
“2022 was another strong year for WWE. We generated record
financial results and our business continued to perform well due to
the strength of our content and brand, which drove audience
engagement and monetization across multiple platforms,” said Nick
Khan, WWE Chief Executive Officer. “In 2023, we’re focused on
continuing to execute on our key operational initiatives, such as
the domestic licensing of our flagship programs, Raw and SmackDown,
as well as the international licensing of our content in key
markets. At the same time, we’re focused on the review of strategic
alternatives that we announced earlier this year, with the goal of
maximizing value for all shareholders.”
Frank Riddick, WWE President & Chief Financial Officer,
added, “For the year, we achieved record revenue and Adjusted
OIBDA, which was at the very high end of our upwardly revised
guidance range. In 2022, Adjusted OIBDA increased 19% reflecting
18% revenue growth. Our financial performance was primarily driven
by the return to a full year of ticketed live events, including the
staging of two large-scale international events, as well as the
contractual escalation of rights fees for our flagship weekly
programming and premium live events. In 2023, we anticipate
Adjusted OIBDA of $395 to $410 million, reflecting continued
revenue growth and relatively flat operating expenses.”
Fourth-Quarter Consolidated
Results
Revenue increased 5% to $325.3 million, primarily due to
an increase in network revenues related to the timing of premium
live events as well as higher monetization of third-party original
programming. These increases were partially offset by a decline in
consumer products licensing and eCommerce revenue. Results also
included the staging of a large-scale international event in both
the current and prior year periods.
Operating Income decreased 22%, or $17.9 million, to
$62.7 million, as the increase in revenue was offset by an increase
in operating expenses. The increase in operating expenses was
primarily driven by higher costs to support the creation of
content. To a lesser extent, costs associated with the Special
Committee investigation and related matters as well as higher stock
compensation expense also contributed to the increase in operating
expenses. (See the “Special Committee Investigation and Related
Matters” discussion for further details.) The Company’s operating
income margin decreased to 19% from 26%.
Adjusted OIBDA decreased 4% to $90.2 million. The
Company’s Adjusted OIBDA margin decreased to 28% from 30%.
Net Income was $38.8 million, or $0.45 per diluted share,
a decrease from $60.9 million, or $0.73 per diluted share,
primarily reflecting the decrease in operating performance.
Cash flows generated by operating activities were $120.3
million, an increase from $46.6 million, as lower net income was
more than offset by the favorable timing of collections associated
with the Company’s large-scale international events.
Free Cash Flow3 was $43.0 million, an increase from $31.8
million, as the increase in cash flow generated by operating
activities was partially offset by an increase in capital
expenditures. For the three months ended December 31, 2022, the
Company incurred $71.7 million of capital expenditures related to
its new headquarter facility. Excluding the capital expenditures
related to the new headquarter facility, Free Cash Flow for the
three months ended December 31, 2022 was $114.7 million.
Return of Capital to
Shareholders
The Company returned $8.9 million of capital to shareholders in
dividends in the fourth quarter of 2022. There were no share
repurchases under the Company’s existing stock repurchase
program.
Full Year 2022 Consolidated
Results
Revenue increased 18%, or $196.3 million, to $1.3
billion, primarily due to the increased monetization of content,
the return to a full year of ticketed live events and the staging
of an additional large-scale international event in 2022.
Operating Income increased 11%, or $27.3 million, to
$283.3 million, as the increase in revenue was partially offset by
an increase in operating expenses. The increase in operating
expenses was primarily driven by higher costs to support the
creation of content as well as the impact of certain costs
associated with the Special Committee investigation and related
matters. (See the “Special Committee Investigation and Related
Matters” discussion for further details.) The Company’s operating
income margin decreased to 22% from 23%.
Adjusted OIBDA increased 19%, or $60.5 million, to $384.6
million. The Company’s Adjusted OIBDA margin remained flat at
30%.
Net Income increased to $195.6 million, or $2.29 per
diluted share, from $177.4 million, or $2.09 per diluted share,
primarily reflecting the increase in operating performance. The
results for 2022 also reflected a decrease in interest expense
partially offset by an increase in income taxes.
Cash flows generated by operating activities were $325.6
million, an increase from $182.9 million, primarily due to the
timing of collections associated with the Company’s large-scale
international events and WWE Network, as well as improved operating
performance.
Free Cash Flow was $125.7 million, a decrease from $143.7
million, as the increase in cash flows generated by operating
activities was offset by an increase in capital expenditures. For
the twelve months ended December 31, 2022, the Company incurred
$170.6 million of capital expenditures related to its new
headquarter facility. Excluding the capital expenditures related to
the new headquarter facility, Free Cash Flow for the twelve months
ended December 31, 2022 was $296.3 million.
Cash, cash equivalents and short-term investments were
$478.7 million as of December 31, 2022. The Company currently
estimates debt capacity under its revolving line of credit
of $200 million.
Return of Capital to
Shareholders
The Company returned $75.7 million to shareholders in 2022,
including $40.0 million in share repurchases and $35.7
million in dividends paid. Under the Company’s existing
stock repurchase program, approximately 5.3 million shares have
been repurchased to-date at an average price of $54.09 per share.
As of December 31, 2022, the Company had $211 million available
under its existing $500 million stock repurchase authorization.
Results by Operating
Segment
The schedule below reflects WWE’s performance by operating
segment (in million):
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net Revenue:
Media
$
279.7
$
257.6
$
1,033.9
$
936.2
Live Events
23.8
20.1
123.1
57.8
Consumer Products
21.8
32.6
134.5
101.2
Total Net Revenue
$
325.3
$
310.3
$
1,291.5
$
1,095.2
Operating Income (Loss):
Media
$
105.6
$
106.3
$
387.5
$
363.4
Live Events
0.2
1.4
25.0
6.9
Consumer Products
8.8
12.5
54.4
33.8
Corporate
(51.9
)
(39.6
)
(183.6
)
(148.1
)
Total Operating Income
$
62.7
$
80.6
$
283.3
$
256.0
Adjusted OIBDA:
Media
$
115.9
$
112.1
$
428.7
$
390.5
Live Events
0.8
1.6
27.2
7.7
Consumer Products
9.4
12.9
56.6
35.5
Corporate
(35.9
)
(32.4
)
(127.9
)
(109.6
)
Total Adjusted OIBDA
$
90.2
$
94.2
$
384.6
$
324.1
Media
Fourth-Quarter 2022
Revenue increased 9%, or $22.1 million, to $279.7
million, primarily due to an increase in network revenues related
to the timing of premium live events, which resulted in an
additional event in the current year period. The increase was also
related to the delivery of third-party original programming.
Results included the staging of a large-scale international event
in both the current and prior year periods.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Media Revenue:
Network (a)
$
47.1
$
33.9
$
222.0
$
225.0
Core content rights fees (b)
155.2
150.5
596.8
566.2
Advertising and sponsorship (c)
15.7
21.1
66.6
71.5
Other (d)
61.7
52.1
148.5
73.5
Total Revenue
$
279.7
$
257.6
$
1,033.9
$
936.2
(a)
Network revenue consists primarily of
license fees associated with the distribution of WWE Network
content on the Peacock service in the U.S. (effective March 18,
2021), as well as subscription fees from customers of WWE Network
and license fees associated with the Company’s international
licensed partner agreements. Network revenue for the twelve-month
period ended December 31, 2021, includes the upfront revenue
recognition related to the delivery of certain WWE Network
intellectual property rights to Peacock in the first quarter.
(b)
Core content rights fees consist primarily
of licensing revenue from the distribution of the Company’s
flagship programs, Raw and SmackDown, as well as its NXT
programming, through global broadcast, pay television and digital
platforms.
(c)
Advertising and sponsorship revenue within
the Media segment consists primarily of advertising revenue from
the Company’s content on third-party social media platforms and
sponsorship fees from sponsors who promote products utilizing the
Company’s media platforms, including promotion on the Company’s
digital websites and on-air promotional media spots.
(d)
Other revenue within the Media segment
reflects revenue 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.
Operating income decreased 1%, or $0.7 million, to $105.6
million, as the increase in revenue (as described above) was
partially offset by an increase in operating expenses. The increase
in operating expenses was primarily driven by higher costs to
support the creation of content.
Adjusted OIBDA increased 3%, or $3.8 million, to $115.9
million.
Full Year 2022
Revenue increased 10%, or $97.7 million, to $1,033.9
million, primarily due to the staging of two large-scale
international events in 2022, compared to one in 2021. The Company
was unable to stage a second event in 2021 due to public health
concerns related to the Covid-19 pandemic. The increase was also
related to an increase in core content rights fees for the
Company’s flagship programs, Raw and SmackDown, and the
monetization of third-party original programming. These increases
were partially offset by a decline in network revenue due to the
impact of upfront revenue recognition related to the delivery of
certain WWE Network intellectual property rights to Peacock in
2021.
Operating income increased 7%, or $24.1 million, to
$387.5 million, as the increase in revenue (as described above) was
partially offset by an increase in operating expenses. The increase
in operating expenses was primarily driven by higher costs to
support the creation of content.
Adjusted OIBDA increased 10%, or $38.2 million, to $428.7
million.
Live Events
Fourth-Quarter 2022
Revenue increased 18%, or $3.7 million, to $23.8 million,
primarily due to an increase in North American ticket sales as a
result of an increase in the number of live events. There were 61
total ticketed live events in the current quarter, consisting of 54
events in North America and 7 events in international markets.
Average attendance at the Company’s North American events was
approximately 5,500. In the prior year period, the Company staged
57 total ticketed live events, consisting of 48 events in North
America and 9 events in international markets. Average attendance
at the Company’s North American events was approximately 5,200 in
the prior year period.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Live Events Revenue:
North American ticket sales
$
19.0
$
15.8
$
97.9
$
46.3
International ticket sales
1.9
2.2
12.1
4.6
Advertising and sponsorship (e)
0.8
0.2
4.8
0.9
Other (f)
2.1
1.9
8.3
6.0
Total Revenue
$
23.8
$
20.1
$
123.1
$
57.8
(e)
Advertising and sponsorship revenue
consists primarily of fees from advertisers and sponsors that
promote products utilizing the Company’s live events (i.e.,
presenting sponsor of fan engagement events and advertising signage
at events).
(f)
Other Live Events includes revenue from
the sale of travel packages associated with the Company’s global
live events, commissions earned through secondary ticketing, and
revenue from events for which the Company receives a fixed fee
Operating income decreased to $0.2 million as compared to
$1.4 million, as the increase in ticket sales (as described above)
was offset by an increase in operating costs, including
event-related expenses.
Adjusted OIBDA decreased to $0.8 million as compared to
$1.6 million.
Full Year 2022
Revenue increased 113%, or $65.3 million, to $123.1
million, primarily due to an increase in North American ticket
sales as a result of a return to full year ticketed live events.
International ticket sales increased primarily due to the staging
of a major stadium event, Clash at the Castle. There were 231 total
ticketed live events in 2022, consisting of 218 events in North
America and 13 events in international markets. Average attendance
at the Company’s North American events was approximately 6,100. In
2021, the Company staged 101 total ticketed live events, consisting
of 88 events in North America and 13 events in international
markets. Average attendance at the Company’s North American events
was approximately 6,900 in 2021.
Operating income increased 262%, or $18.1 million, to
$25.0 million, as the increase in revenue (as described above) was
partially offset by an increase in operating expenses. The increase
in operating expenses was primarily driven by an increase in
event-related expenses, largely due to the increase in the number
of events.
Adjusted OIBDA increased 253%, or $19.5 million, to $27.2
million.
Consumer Products
Fourth-Quarter 2022
Revenue decreased 33%, or $10.8 million, to $21.8
million, primarily due to a decrease in licensing and eCommerce
revenue. Licensing revenue reflected an increase in collectibles
more than offset by a decline in video games, due primarily to
timing. As previously disclosed, during the third quarter of 2022,
the Company revised its estimates related to revenue recognition
for certain licensing agreements with minimum guarantees. This
change in estimates negatively impacted licensing revenue in the
fourth quarter of 2022. The decrease in eCommerce revenue primarily
related to the previously disclosed transition of our digital
retail platform to Fanatics. The structure of the Fanatics
partnership resulted in a reduction of revenue as the activity is
now recorded on a “net”, as opposed to “gross”, basis.
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Consumer Products Revenue:
Consumer product licensing
$
12.3
$
18.1
$
77.5
$
52.0
eCommerce
5.0
11.0
33.2
39.1
Venue merchandise
4.5
3.5
23.8
10.1
Total Revenue
$
21.8
$
32.6
$
134.5
$
101.2
Operating income decreased 30%, or $3.7 million, to $8.8
million reflecting the decrease in revenue (as described above)
partially offset by a decrease in operating expenses. The decrease
in operating expenses was primarily driven by lower eCommerce
expenses in connection with the transition of our digital retail
platform to Fanatics (as described above).
Adjusted OIBDA decreased 27%, or $3.5 million, to $9.4
million.
Full Year 2022
Revenue increased 33%, or $33.3 million, to $134.5
million, primarily due to an increase in licensing and venue
merchandise revenue. The increase in licensing revenue primarily
related to growth in collectibles revenue as well as higher sales
of licensed video games, including our franchise game WWE 2K22. The
increase in venue merchandise revenue was primarily due to the
return to a full year of ticketed live events. eCommerce revenue
decreased due to difficult comparisons to elevated Covid-related
sales in 2021 as well as the accounting treatment related to the
transition of our digital retail platform to Fanatics (as discussed
above).
Operating income increased 61%, or $20.6 million, to
$54.4 million, as the increase in revenue (as described above) was
partially offset by an increase in operating expenses. The increase
in operating expenses was primarily driven by an increase in
variable costs associated with the sales activity.
Adjusted OIBDA increased 59%, or $21.1 million, to $56.6
million.
2023 Business Outlook2
The Company is targeting Adjusted OIBDA of $395 - $410 million
for the full year 2023, which would be another all-time record
result. The Company also expects to generate another year of
all-time record revenue in 2023. This anticipated performance
reflects an expected increase in media rights fees for the
Company’s flagship weekly programming and premium live events, as
well as a full live events touring schedule, including two
large-scale international events, and an increase in advertising
and sponsorship revenues. The Company anticipates that 2023
operating expenses will be relatively flat as an increase in costs
to support the creation of content are offset by a decline in
third-party original programming expenses, due to the timing of the
production of premium WWE-themed series and specials, as well as a
decline in eCommerce expenses as a result of the transition of the
Company’s digital retail platform to Fanatics.
Management believes WWE is well positioned to capitalize on
significant future opportunities. In 2023, key initiatives that
could have meaningful implications on the Company’s performance
include the renewal of the domestic licensing agreement for NXT,
the renewal of licensing agreements for WWE content in certain
international markets, the monetization of new third-party original
programming, growth in advertising and sponsorship sales, and the
performance of the latest installment of the Company’s flagship
video game franchise, WWE 2K23.
Providing perspective on WWE’s targeted revenue growth and
Adjusted OIBDA outlook, Mr. Riddick commented, “We continue to
believe that WWE has significant long-term growth opportunities and
is well positioned, particularly given our substantial cash and
capital resources, to deliver on its strategic initiatives. In
2023, we will continue to evaluate our financial performance,
balancing Adjusted OIBDA growth with increased investment that will
support our ability to deliver appealing content, strengthen our
engagement with a broadening audience, and drive long-term
shareholder value.”
2023 Capital Expenditures
Outlook2
For 2023, the Company estimates total capital expenditures of
$150 - $170 million, including $105 - $120 million related to its
previously disclosed new headquarter facility, with the remainder
primarily related to the maintenance and enhancement of existing
production and enterprise technology infrastructure. In 2023, the
Company expects to complete the build out of its new headquarter
facility. The Company expects total capital expenditures to be
approximately 4% - 5% of revenue once the build out of the new
headquarters has been completed.
First Quarter 2023 Business
Outlook2
The Company estimates first quarter 2023 Adjusted OIBDA of $65 -
$75 million. The estimate primarily reflects a shift in the timing
of the staging of a large-scale international event, which occurred
in the first quarter of 2022 but is expected to occur in the second
quarter of 2023. Revenue is expected to decline year-over-year as
increases related to the contractual escalation of media rights
fees for the Company’s flagship weekly programming, Raw and
SmackDown, are offset by the absence of the large-scale
international event.
Strategic Alternatives Review
Process
As previously disclosed, Vincent K. McMahon, the Company’s
Executive Chairman and shareholder with a controlling interest, in
cooperation with WWE’s management team and Board of Directors,
announced the intent to undertake a review of strategic
alternatives with the goal of maximizing value for all WWE
shareholders. There can be no assurances given regarding the
outcome or timing of this strategic alternatives review
process.
Special Committee Investigation and
Related Matters
As previously announced, a Special Committee of independent
members of the Board of Directors was formed to investigate alleged
misconduct by Vincent K. McMahon and another executive, who is no
longer with the Company. In November 2022, the Company disclosed
that the Special Committee investigation had been completed and the
Special Committee had been disbanded. For the three and
twelve-month periods ended December 31, 2022, the Company’s
consolidated pre-tax results included the impact of $2.3 million
and $21.7 million, respectively, of expenses related to the Special
Committee investigation. Mr. McMahon has agreed to reimburse the
Company for reasonable expenses related to the Special Committee
investigation, net of any insurance proceeds. For the three and
twelve-month periods ended December 31, 2022, the Company’s
consolidated pre-tax results also included the impact of $7.4
million of expenses reflecting certain payments that Mr. McMahon
has agreed to make (including amounts paid and payable in the
future). The $7.4 million of payments were or will be paid by Mr.
McMahon personally. Please see the Company’s SEC filings,
including, but not limited to, its annual report on Form 10-K/A and
Form 10-K and quarterly reports on Form 10-Q/A and Form 10-Q for
further details and ongoing risks regarding this matter.
Other Matters
For the three-month period ended December 31, 2021, the
Company’s consolidated pre-tax results included the impact of a
$6.7 million gain from the reduction of leased space as part of an
amendment to its new Stamford headquarters lease. For the
twelve-month period ended December 31, 2021, the Company’s
consolidated pre-tax results included $8.1 million in severance
expense recorded in the second quarter of 2021 associated with the
combination of WWE’s television, digital and studios teams into one
organization. A reconciliation of Net Income to Adjusted Net Income
for the three and twelve-month periods ended December 31, 2022 and
2021 can be found in the supplemental schedule on page 16 of this
release.
Notes
(1)
The definition of Adjusted OIBDA can be
found in the Non-GAAP Measures section of the release on page 10. A
reconciliation of three and twelve-month periods ended December 31,
2022 and 2021 Operating Income to Adjusted OIBDA can be found in
the Supplemental Information in this release on page 17.
(2)
The Company’s business model and expected
results will continue to be subject to significant execution and
other risks, including, without limitation, risks relating to the
Special Committee investigation and related matters noted above;
the impact of COVID-19 on WWE’s business, results of operations and
financial condition; entering, maintaining and renewing major
distribution agreements; WWE Network; uncertainties associated with
international markets and risks inherent in large live events, and
other risk factors disclosed in our annual report on Form 10-K for
the year ended December 31, 2022. In addition, WWE is unable to
provide a reconciliation of first quarter or full year 2023
guidance to GAAP measures as, at this time, WWE cannot accurately
determine all of the adjustments that would be required. See
Supplemental Information in this release on page 18.
(3)
A reconciliation of three and twelve-month
periods ended December 31, 2022 and 2021 Free Cash Flow to Net cash
provided by operating activities can be found in the Supplemental
Information in this release on page 19.
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 items
that management deems would impact the comparability of results
between periods. Adjusted OIBDA includes amortization and
depreciation expenses directly related to supporting the operations
of our segments, including content production asset amortization,
depreciation and 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 from 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 which are defined as the GAAP
measures excluding certain nonrecurring, material items that impact
the comparability between periods) should not be considered in
isolation from, or as a substitute for, operating income, net
income, EPS or other GAAP measures, such as 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, share repurchases and
payment of dividends.
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 5:00 p.m.
ET on February 2, 2023, to discuss the Company's earnings results
for the fourth quarter and full year ended 2022. All interested
parties are welcome to listen to a live web cast that will be
hosted through the Company’s website 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: 3707267). 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 February 2, 2023, 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 website.
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, premium live events, digital media, and publishing
platforms. WWE’s TV-PG programming can be seen in more than 1
billion homes worldwide in 25 languages through world-class
distribution partners including NBCUniversal, FOX Sports, BT Sport,
Sony India and Rogers. The award-winning WWE Network includes all
premium live events, scheduled programming and a massive
video-on-demand library and is currently available in more than 180
countries. In the United States, NBCUniversal’s streaming service,
Peacock, is the exclusive home to WWE Network.
Additional information on WWE can be found at wwe.com and
corporate.wwe.com.
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, and oral statements made from time to time
by our representatives may contain, forward-looking statements
pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Forward looking statements include statements
regarding our outlook regarding future financial results, the
impact of recent changes to management and our board of directors
(the “Board”); the timing and outcome of the Company’s media and
other rights negotiations including major domestic programming
licenses expected to be negotiated in 2023; the Company’s review of
strategic alternatives; our plans to remediate identified material
weaknesses in our disclosure control and procedures and our
internal control over financial reporting; and regulatory,
investigative or enforcement inquiries, subpoenas or demands
arising from, related to, or in connection with these matters. The
words “may,” “will,” “could,” “anticipate,” “plan,” “continue,”
“project,” “intend,” “estimate,” “believe,” “expect,” “outlook,”
“target,” “goal,” “guidance” and similar expressions are intended
to identify forward-looking statements, although not all
forward-looking statements contain such words. These statements
relate to future possible events, as well as our plans, objectives,
expectations and intentions and are not historical facts and
accordingly involve known and unknown risks and uncertainties and
other factors that may cause the actual results or the performance
by us to be materially different from expected future results or
performance expressed or implied by any forward-looking
statements.
These forward-looking statements are subject to uncertainties
relating to, without limitation, the impact of actions by Mr.
McMahon (who has a controlling interest in the Company due to his
ownership of a substantial majority of our Class B common stock and
whose interests could conflict with those of our Class A common
stockholders) which could have adverse financial and operational
impacts.
The following additional factors, among others, could cause
actual results to differ materially from those contained in
forward-looking statements: COVID-19, which may continue to affect
negatively world economies as well as our industry, business and
results of operations; a rapidly evolving and highly competitive
media landscape; WWE Network; computer systems, content delivery
and online operations of our Company and our business partners;
privacy norms and regulations; our need to continue to develop
creative and entertaining programs and events; our need to retain
and continue to recruit key performers; the possibility of a
decline in the popularity of our brand of sports entertainment;
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/or our inability to compete effectively, especially
against competitors with greater financial resources or marketplace
presence; 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; potential substantial
liability in the event of accidents or injuries occurring during
our physically demanding events; large public events as well as
travel to and from such events; our expansion into new or
complementary businesses, strategic investments and/or
acquisitions; our accounts receivable; the construction and move to
our new leased corporate and media production headquarters;
litigation and other actions, investigations or proceedings; a
change in the tax laws of key jurisdictions; inflationary pressures
and interest rate changes; our indebtedness including our
convertible notes; our potential failure to meet market
expectations for our financial performance; our share repurchase
program; 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 cause our stock price to decline; and the
volatility in trading prices of our Class A common stock. In
addition, our dividend and share repurchases are 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, general economic and
competitive conditions and such other factors as our Board 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 any documents filed, or to be filed, by
the Company with the SEC, including, but not limited to, the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of our annual
reports on Form 10-K and 10-K/A and quarterly reports on Form
10-Q/A and Form 10-Q.
World Wrestling Entertainment,
Inc.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net revenues
$
325.3
$
310.3
$
1,291.5
$
1,095.2
Operating expenses
186.4
171.0
730.6
608.2
Marketing and selling expenses
20.4
16.6
78.9
69.3
General and administrative expenses
46.9
33.0
161.4
120.8
Depreciation and amortization
8.9
9.1
37.3
40.9
Operating income
62.7
80.6
283.3
256.0
Interest expense
4.8
8.1
21.2
33.6
Other income, net
2.3
6.8
2.3
7.5
Income before income taxes
60.2
79.3
264.4
229.9
Provision for income taxes
21.4
18.4
68.8
52.5
Net income
$
38.8
$
60.9
$
195.6
$
177.4
Earnings per share:
Basic
$
0.52
$
0.78
$
2.63
$
2.33
Diluted
$
0.45
$
0.73
$
2.29
$
2.09
Weighted average common shares
outstanding:
Basic
74.4
77.8
74.5
76.3
Diluted
88.7
83.7
88.2
84.9
Dividends declared per common share (Class
A and B)
$
0.12
$
0.12
$
0.48
$
0.48
World Wrestling Entertainment,
Inc.
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
220.2
$
134.8
Short-term investments, net
258.5
281.0
Accounts receivable, net
112.4
171.2
Inventory
2.9
8.0
Prepaid expenses and other current
assets
33.2
32.2
Total current assets
627.2
627.2
Property and equipment, net
329.1
172.7
Finance lease right-of-use assets, net
296.6
313.4
Operating lease right-of-use assets,
net
16.3
9.0
Content production assets, net
16.5
13.8
Investment securities
11.8
11.6
Deferred income tax assets, net
45.6
13.1
Other assets, net
12.5
43.3
Total assets
$
1,355.6
$
1,204.1
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt
$
0.4
$
0.4
Finance lease liabilities
11.7
12.2
Operating lease liabilities
3.6
4.8
Convertible debt
214.1
201.1
Accounts payable and accrued expenses
122.9
122.7
Deferred income
79.8
74.6
Total current liabilities
432.5
415.8
Long-term debt
20.8
21.3
Finance lease liabilities
364.9
374.7
Operating lease liabilities
13.2
5.1
Other non-current liabilities
7.0
12.6
Total liabilities
838.4
829.5
Commitments and contingencies
Stockholders' equity:
Class A common stock
0.4
0.4
Class B convertible common stock
0.3
0.3
Additional paid-in capital
424.0
422.9
Accumulated other comprehensive income
0.2
2.4
Retained earnings (accumulated
deficit)
92.3
(51.4)
Total stockholders’ equity
517.2
374.6
Total liabilities and stockholders'
equity
$
1,355.6
$
1,204.1
World Wrestling Entertainment,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Year Ended
December 31,
2022
2021
OPERATING ACTIVITIES:
Net income
$
195.6
$
177.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization and impairments of content
production assets
33.0
19.7
Depreciation and amortization
46.4
48.8
Other amortization
13.0
18.8
Loss on equity investments, net
—
0.8
Stock-based compensation
34.9
19.1
Benefit from deferred income taxes
(28.6)
(3.0)
Other non-cash adjustments
11.2
(3.3)
Cash provided by (used in) changes in
operating assets and liabilities:
Accounts receivable
54.0
(116.3)
Inventory
5.6
1.2
Prepaid expenses and other assets
(3.7)
3.0
Content production assets
(35.8)
(17.7)
Accounts payable, accrued expenses and
other liabilities
(5.1)
22.7
Deferred income
5.1
11.7
Net cash provided by operating
activities
325.6
182.9
INVESTING ACTIVITIES:
Purchases of property and equipment and
other assets
(199.9)
(39.2)
Purchases of short-term investments
(245.9)
(374.5)
Proceeds from sales and maturities of
short-term investments
263.8
222.1
Purchase of equity investments
(0.2)
(1.5)
Proceeds from sale of investment
securities
—
—
Proceeds from infrastructure improvement
incentives
4.3
—
Net cash used in investing activities
(177.9)
(193.1)
FINANCING ACTIVITIES:
Repayment of debt
(0.4)
(100.4)
Repayment of finance leases
(14.0)
(12.0)
Dividends paid
(35.7)
(36.4)
Proceeds from tenant improvement
allowances
34.2
—
Taxes paid related to net settlement upon
vesting of equity awards
(8.9)
(5.6)
Proceeds from issuance of stock
2.5
2.9
Repurchase and retirement of common
stock
(40.0)
(165.6)
Net cash used in financing activities
(62.3)
(317.1)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
85.4
(327.3)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
134.8
462.1
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
220.2
$
134.8
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of
refunds
$
90.0
$
55.5
Cash paid for interest
$
9.6
$
9.9
NON-CASH INVESTING TRANSACTIONS:
Purchases of property and equipment
recorded in accounts payable and accrued expenses
$
18.6
$
22.2
Principal shareholder contributions
$
2.7
$
1.2
Infrastructure improvement incentives
$
—
$
4.3
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted Net Income
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31,
2022
2021
As Reported
Other Adjustments (1)
Adjusted
As Reported
Gain on Partial Lease
Termination (2)
Adjusted
Operating income
$
62.7
$
9.7
$
72.4
$
80.6
$
—
$
80.6
Interest expense
4.8
—
4.8
8.1
—
8.1
Other income, net
2.3
2.3
6.8
(6.7)
0.1
Income before taxes
60.2
9.7
69.9
79.3
(6.7)
72.6
Provision for income taxes
21.4
3.4
24.8
18.4
(1.5)
16.9
Net income
$
38.8
$
6.3
$
45.1
$
60.9
$
(5.2)
$
55.7
Earnings per share - diluted
$
0.45
$
0.07
$
0.52
$
0.73
$
(0.06)
$
0.67
Year Ended December
31,
2022
2021
As Reported
Other Adjustments (1)
Adjusted
As Reported
Gain on Partial Lease
Termination (2)
Other Adjustments (1)
Adjusted
Operating income
$
283.3
$
29.1
$
312.4
$
256.0
$
—
$
8.1
$
264.1
Interest expense
21.2
—
21.2
33.6
—
—
33.6
Other income, net
2.3
—
2.3
7.5
(6.7)
—
0.8
Income before taxes
264.4
29.1
293.5
229.9
(6.7)
8.1
231.3
Provision for income taxes
68.8
7.6
76.4
52.5
(1.5)
1.8
52.8
Net income
$
195.6
$
21.5
$
217.1
$
177.4
$
(5.2)
$
6.3
$
178.5
Earnings per share - diluted
$
2.29
$
0.24
$
2.53
$
2.09
$
(0.06)
$
0.07
$
2.10
(1)
During the three and twelve months ended
December 31, 2022, the Company’s consolidated pre-tax results
included $2.3 million and $21.7 million, respectively, associated
with certain costs related to the investigation by the Special
Committee of independent members of the Board of Directors, as well
as $7.4 million of expenses related to certain payments to be made
by the Company’s controlling stockholder. During the twelve months
ended December 31, 2021, the Company’s consolidated pre-tax results
included the impact of $8.1 million in severance expense primarily
related to the combination of WWE’s television, digital and studios
teams into one organization for a more unified content strategy and
more streamlined content production.
(2)
During the three and twelve months ended
December 31, 2021, the Company’s consolidated pre-tax results
included a gain of $6.7 million on the reduction of approximately
33,000 rentable square feet as part of an amendment to its new
Stamford headquarters lease.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted OIBDA
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31, 2022
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
105.6
$
3.8
$
6.5
$
—
$
115.9
Live Events
0.2
—
0.6
—
0.8
Consumer Products
8.8
—
0.6
—
9.4
Corporate
(51.9)
5.1
1.2
9.7
(35.9)
Total
$
62.7
$
8.9
$
8.9
$
9.7
$
90.2
Three Months Ended December
31, 2021
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
106.3
$
2.4
$
3.4
$
—
$
112.1
Live Events
1.4
—
0.2
—
1.6
Consumer Products
12.5
0.1
0.3
—
12.9
Corporate
(39.6)
6.6
0.6
—
(32.4)
Total
$
80.6
$
9.1
$
4.5
$
—
$
94.2
Year Ended December 31,
2022
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
387.5
$
14.8
$
26.4
$
—
$
428.7
Live Events
25.0
0.1
2.1
—
27.2
Consumer Products
54.4
0.2
2.0
—
56.6
Corporate
(183.6)
22.2
4.4
29.1
(127.9)
Total
$
283.3
$
37.3
$
34.9
$
29.1
$
384.6
Year Ended December 31,
2021
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
363.4
$
13.4
$
13.7
$
—
$
390.5
Live Events
6.9
—
0.8
—
7.7
Consumer Products
33.8
0.2
1.5
—
35.5
Corporate
(148.1)
27.3
3.1
8.1
(109.6)
Total
$
256.0
$
40.9
$
19.1
$
8.1
$
324.1
(1)
During the three and twelve months ended
December 31, 2022, the Company recorded certain costs of $2.3
million and $21.7 million, respectively, related to the
investigation by the Special Committee of independent members of
the Board of Directors, as well as $7.4 million of expenses related
to certain payments to be made by the Company’s controlling
stockholder. During the twelve months ended December 31, 2021, the
Company recorded severance expense of $8.1 million primarily
related to the combination of WWE’s television, digital and studios
teams into one organization for a more unified content strategy and
more streamlined content production.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Business Outlook
(In millions, except per share
data)
(Unaudited)
Reconciliation of Adjusted
OIBDA to Operating Income
Q4 2022
FY 2022
Q1 2023
FY 2023
Adjusted OIBDA
$
90.2
$
384.6
$65 - $75
$395 - $410
Depreciation & amortization (1)
(8.9
)
(37.3
)
—
—
Stock-based compensation (1)
(8.9
)
(34.9
)
—
—
Other operating income items (1)
(9.7
)
(29.1
)
—
—
Operating income (U.S. GAAP
Basis)
$
62.7
$
283.3
Not estimable
Not estimable
(1)
Because of the nature of these items, WWE is unable to estimate
the amounts of any adjustments for these items for periods after
December 31, 2022 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
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net cash provided by operating
activities
$
120.3
$
46.6
$
325.6
$
182.9
Less cash used for capital
expenditures:
Purchase of property and equipment and
other assets (1)
(77.3
)
(14.8
)
(199.9
)
(39.2
)
Free Cash Flow (1)
$
43.0
$
31.8
$
125.7
$
143.7
(1)
Purchases of property and equipment and other assets includes
$71.7 million and $8.8 million of capital expenditures related to
the Company’s new headquarter facility for the three months ended
December 31, 2022 and 2021, respectively. Excluding the capital
expenditures related to the Company’s new headquarter facility,
Free Cash Flow was $114.7 million and $40.6 million for the three
months ended December 31, 2022 and 2021, respectively. Purchases of
property and equipment and other assets includes $170.6 million and
$17.3 million of capital expenditures related to the Company’s new
headquarter facility for the twelve months ended December 31, 2022
and 2021, respectively. Excluding the capital expenditures related
to the Company’s new headquarter facility, Free Cash Flow was
$296.3 million and $161.0 million for the twelve months ended
December 31, 2022 and 2021, respectively. The Company received $7.0
million and $34.2 million related to tenant improvement allowances
associated with construction of its new headquarter facility for
the three and twelve months ended December 31, 2022, respectively.
These tenant improvement allowances are included as a component of
Net Cash Used in Financing Activities within our Consolidated
Statements of Cash Flows and therefore excluded from Free Cash
Flow.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230202005758/en/
Investors: Seth Zaslow 203-352-1026
Media: Chris Legentil 203-352-8793
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