Endeavor Group Holdings, Inc. (NYSE: EDR) (“Endeavor” or the
“Company”), a global sports and entertainment company, today
released its financial results for the quarterly period ended
September 30, 2021.
Highlights
- Delivered best nine-month, year-to-date period in UFC
history
- Representation revenue up significantly in Q3 as productions
and touring events resume and brands increase spending
- Announced intent to acquire sports betting content and
technology provider OpenBet to integrate with the Company’s IMG
ARENA business; transaction expected to close H1 2022
- Increased 2021 revenue guidance from prior $4.8 to $4.85
billion range to between $4.89 and $4.95 billion
- Increased 2021 adjusted EBITDA guidance from prior $765 to $775
million range to between $835 and $845 million
Q3 2021 Consolidated Financial Results
- Revenue: $1.4 billion
- Net income: $63.6 million
- Adjusted EBITDA: $283.3 million
“We continue to capitalize on the elevated demand for premium
content and live events coming out of the pandemic,” remarked Ariel
Emanuel, CEO, Endeavor. “Given our unique positioning within the
sports and entertainment industry and our ability to leverage
powerful secular content trends, we see no signs of this momentum
waning through the end of the year.”
Q3 2021 Segment Operating Results
- Owned Sports Properties segment revenue was $288.5
million, down $10.6 million compared to Q3 2020, attributable to a
$25 million contract termination fee recognized in Q3 2020 that did
not recur in 2021, as well as more events being held in Q3 2020
(caused by the shifting of events from Q2 due to COVID-19). This
was partially offset by UFC’s continued strong growth across live
events, residential and commercial Pay-Per-View, consumer products,
licensing, and sponsorship, as well as additional PBR events held
in the quarter. The segment’s adjusted EBITDA was $134.7
million.
- Events, Experiences & Rights segment revenue
increased $62.1 million, to $446.3 million, compared to Q3 2020.
The increase was primarily driven by an increase in event and
sports media production revenue related to the return of live
events with audiences, as well as the addition of the recently
acquired NCSA within our IMG Academy business. This was partially
offset by a decrease in media rights revenues, primarily due to the
return to a normal schedule of European soccer matches in 2021,
which was inflated in the prior year due to matches being pushed to
Q3 as a result of COVID-19 – in addition to the expiration of two
European soccer contracts in Q2 2021. The segment’s adjusted EBITDA
improved $94.6 million, to $85 million, compared to Q3 2020. This
was primarily driven by the growth in revenue and a decrease in
direct operating costs.
- Representation segment revenue increased $481.1 million,
to $664.7 million, compared to Q3 2020, during which most
television and film productions and touring events came to a halt
due to COVID-19. Growth in this segment was primarily attributable
to a significant increase in Endeavor Content project deliveries,
agency client commissions, and marketing and experiential
activations. The segment’s adjusted EBITDA for the quarter
increased $100.1 million, to $141.8 million, compared to Q3
2020.
2021 Annual Guidance
- Revenue is expected to be between $4.89 and $4.95 billion
- Adjusted EBITDA is expected to be between $835 and $845
million
Balance Sheet and Liquidity
At September 30, 2021, cash and cash equivalents totaled $1.029
billion, compared to $869.8 million at June 30, 2021. Total debt
was $5.108 billion at September 30, 2021, compared to $5.351
billion at June 30, 2021. At September 30, 2021, cash and cash
equivalents of $58.5 million and production related debt of $223
million were included in assets and liabilities held for sale,
respectively.
For further information regarding the Company's financial
results, as well as certain non-GAAP financial measures, and the
reconciliations thereof, please refer to the following pages of
this release or visit the Company’s Investor Relation site at
investor.endeavorco.com.
Webcast Details
Endeavor will host an audio webcast to discuss its results and
provide a business update at 1:30 p.m. PT / 4:30 p.m. ET today. The
event can be accessed at:
https://events.q4inc.com/attendee/264118062
The link to the webcast, as well as a recording, will also be
available within the News/Events section of
investor.endeavorco.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements that do not relate to matters of historical fact
should be considered forward-looking statements, including the
Company’s guidance for full year 2021 , the expected timing of the
closing of the acquisition of the OpenBet business, and the
expected benefit resulting from the Company’s acquired businesses.
These forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees
and involve known and unknown risks, uncertainties and other
important factors that may cause actual results, performance or
achievements to be materially different from what is expressed or
implied by the forward-looking statements, including, but not
limited to: the impact of the COVID-19 global pandemic on
Endeavor’s business, financial condition, liquidity and results of
operations; changes in public and consumer tastes and preferences
and industry trends; Endeavor’s ability to adapt to or manage new
content distribution platforms or changes in consumer behavior;
Endeavor’s dependence on the relationships of its management,
agents, and other key personnel with clients; Endeavor’s dependence
on key relationships with television and cable networks, satellite
providers, digital streaming partners, corporate sponsors, and
other distribution partners; risks related to Endeavor’s
organization and structure; and other important factors discussed
in Part II, Item 1A “Risk Factors” in Endeavor’s Quarterly Report
on Form 10-Q for the periods ended March 31, 2021 and in Amendment
No. 1 to our Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2021, as any such factors may be updated from time
to time in its other filings with the SEC, accessible on the SEC’s
website at www.sec.gov and Endeavor’s Investor Relations site at
investor.endeavorco.com. Forward-looking statements speak only as
of the date they are made and, except as may be required under
applicable law, Endeavor undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized
under United States generally accepted accounting principles
(“GAAP”). Please see “Note Regarding Non-GAAP Financial Measures"
and the reconciliation tables below for additional information and
a reconciliation of the Non-GAAP financial measures to the most
comparable GAAP financial measures.
About Endeavor
Endeavor is a global sports and entertainment company, home to
many of the world’s most dynamic and engaging storytellers, brands,
live events and experiences. The company is comprised of industry
leaders including entertainment agency WME; sports, fashion, events
and media company IMG; and premier mixed martial arts organization
UFC. The Endeavor network specializes in talent representation,
sports operations & advisory, event & experiences
management, media production & distribution, experiential
marketing and brand licensing.
Website Disclosure
Investors and others should note that we announce material
financial and operational information to our investors using press
releases, SEC filings and public conference calls webcasts, as well
as our Investor Relations site at investor.endeavorco.com. In
addition, you may automatically receive email alerts and other
information about Endeavor when you enroll your email address by
visiting the “Investor Email Alerts” option under the Resources tab
on investor.endeavorco.com.
Consolidated Statements of
Operations
(Unaudited)
(In thousands, except share and
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenue
$
1,391,303
$
864,492
$
3,572,157
$
2,517,803
Operating expenses: Direct operating costs
673,215
422,070
1,790,562
1,275,997
Selling, general and administrative expenses
520,626
318,933
1,686,840
1,009,951
Insurance recoveries
(12,233
)
(19,563
)
(42,100
)
(53,523
)
Depreciation and amortization
71,661
76,471
208,058
241,669
Impairment charges
754
-
4,524
175,282
Total operating expenses
1,254,023
797,911
3,647,884
2,649,376
Operating income (loss)
137,280
66,581
(75,727
)
(131,573
)
Other (expense) income: Interest expense, net
(55,783
)
(71,277
)
(207,970
)
(212,954
)
Loss on extinguishment of debt
-
-
(28,628
)
-
Other (expense) income, net
(7,719
)
16,409
(3,001
)
63,576
Income (loss) before income taxes and equity losses of affiliates
73,778
11,713
(315,326
)
(280,951
)
(Benefit from) provision for income taxes
(7,718
)
(941
)
58,285
43,614
Income (loss) before equity losses of affiliates
81,496
12,654
(373,611
)
(324,565
)
Equity losses of affiliates, net of tax
(17,883
)
(34,473
)
(77,167
)
(244,280
)
Net income (loss)
63,613
(21,819
)
(450,778
)
(568,845
)
Less: Net income (loss) attributable to non-controlling interests
21,128
58,430
(141,980
)
32,914
Less: Net loss attributable to Endeavor Operating Company, LLC
prior to the reorganization transactions
—
(80,249
)
(31,686
)
(601,759
)
Net income (loss) attributable to Endeavor Group Holdings, Inc.
$
42,485
$
—
$
(277,112
)
$
—
Income (loss) per share of Class A common stock(1): Basic
$
0.16
N/A
$
(1.07
)
N/A
Diluted
$
0.16
N/A
$
(1.07
)
N/A
Weighted average number of shares used in computing income (loss)
per share: Basic
262,891,070
N/A
261,048,116
N/A
Diluted(2)
435,922,511
N/A
261,048,116
N/A
(1) Basic and diluted income (loss) per share of Class A
common stock is applicable only for the period from May 1, 2021
through September 30, 2021, which is the period following the
initial public offering and the related reorganization
transactions. (2) The diluted weighted average number of shares of
435,922,511 for the three months ended September 30, 2021 includes
weighted average Class A common shares outstanding plus an assumed
exchange of Endeavor Manager Units and Endeavor Operating Units
into 169,259,312 shares and an assumed exchange of Endeavor Profits
Units into 3,569,639 shares of the Company’s Class A common stock,
as noted in the table below: Weighted average Class A Common
Shares outstanding - Basic
262,891,070
Additional shares assuming exchange of all Endeavor Profits Units
3,569,639
Additional shares from stock options and RSUs, as calculated using
the treasury stock method
202,490
Additional shares assuming exchange of all Endeavor Operating Units
and Endeavor Manager Units
169,259,312
Weighted average number of shares used in computing diluted income
per share
435,922,511
Segment Results
(Unaudited)
(In thousands)
Three Months Ended September 30, Nine Months Ended
September 30,
2021
2020
2021
2020
Revenue: Owned Sports Properties
$
288,521
$
299,130
$
830,867
$
683,536
Events, Experiences & Rights
446,333
384,257
1,514,615
1,172,867
Representation
664,723
183,583
1,241,864
669,157
Eliminations
(8,274
)
(2,478
)
(15,189
)
(7,757
)
Total Revenue
$
1,391,303
$
864,492
$
3,572,157
$
2,517,803
Adjusted EBITDA: Owned Sports Properties
$
134,679
$
166,678
$
412,495
$
334,474
Events, Experiences & Rights
84,993
(9,595
)
160,843
16,873
Representation
141,801
41,666
264,969
162,315
Corporate
(78,156
)
(22,802
)
(187,476
)
(106,340
)
Consolidated Balance
Sheets
(Unaudited)
(In thousands, except share
data)
September 30, December 31,
2021
2020
ASSETS Current Assets: Cash and cash equivalents
$
1,028,709
$
1,008,485
Restricted cash
250,021
181,848
Accounts receivable (net of allowance for doubtful accounts of
$60,278 and $67,975, respectively)
639,429
445,778
Deferred costs
230,305
234,634
Assets held for sale
960,677
-
Other current assets
200,959
194,463
Total current assets
3,310,100
2,065,208
Property and equipment, net
598,433
613,139
Operating lease right-of-use assets
363,040
386,911
Intangible assets, net
1,554,108
1,595,468
Goodwill
4,415,891
4,181,179
Investments
285,842
251,078
Other assets
203,444
540,651
Total assets
$
10,730,858
$
9,633,634
LIABILITIES, REDEEMABLE INTERESTS AND
SHAREHOLDERS'/MEMBERS' EQUITY Current Liabilities: Accounts
payable
$
556,179
$
554,260
Accrued liabilities
503,953
322,749
Current portion of long-term debt
75,858
212,971
Current portion of operating lease liabilities
60,643
58,971
Deferred revenue
636,531
606,530
Deposits received on behalf of clients
235,308
176,572
Liabilities held for sale
548,846
-
Other current liabilities
89,805
65,025
Total current liabilities
2,707,123
1,997,078
Long-term debt
5,032,543
5,712,834
Long-term operating lease liabilities
364,608
395,331
Other long-term liabilities
371,902
373,642
Total liabilities
8,476,176
8,478,885
Commitments and contingencies Redeemable
non-controlling interests
208,890
168,254
Redeemable equity
-
22,519
Shareholders'/Members' Equity: Class A common stock, $.00001
par value; 5,000,000,000 shares authorized; 261,970,674 shares
issued and outstanding as of September 30, 2021
2
-
Class B common stock, $.00001 par value; 5,000,000,000 shares
authorized; none issued and outstanding as of September 30, 2021
-
-
Class C common stock, $.00001 par value; 5,000,000,000 shares
authorized; none issued and outstanding as of September 30, 2021
-
-
Class X common stock, $.00001 par value; 5,000,000,000 shares
authorized; 187,515,124 shares issued and outstanding as of
September 30, 2021
1
-
Class Y common stock, $.00001 par value; 1,000,000,000 shares
authorized; 238,154,296 shares issued and outstanding as of
September 30, 2021
2
-
Additional paid-in capital
1,580,638
-
Accumulated deficit
(277,112
)
-
Members' capital
-
468,633
Accumulated other comprehensive loss
(95,811
)
(190,786
)
Total Endeavor Group Holdings, Inc./Endeavor Operating Company, LLC
shareholders'/members' equity
1,207,720
277,847
Nonredeemable non-controlling interests
838,072
686,129
Total shareholders'/members' equity
2,045,792
963,976
Total liabilities, redeemable interests and shareholders'/members'
equity
$
10,730,858
$
9,633,634
Note Regarding Non-GAAP Financial Measures
This press release includes financial measures that are not
calculated in accordance with United States generally accepted
accounting principles (“GAAP”), including Adjusted EBITDA, Adjusted
EBITDA Margin and Adjusted Net Income.
Adjusted EBITDA is a non-GAAP financial measure and is defined
as net income (loss), excluding income taxes, net interest expense,
depreciation and amortization, equity-based compensation, merger,
acquisition and earn-out costs, certain legal costs, restructuring,
severance and impairment charges, certain non-cash fair value
adjustments, certain equity earnings, COVID-19 related expenses,
and certain other items when applicable. Adjusted EBITDA margin is
a non-GAAP financial measure defined as Adjusted EBITDA divided by
Revenue.
Management believes that Adjusted EBITDA is useful to investors
as it eliminates the significant level of non-cash depreciation and
amortization expense that results from our capital investments and
intangible assets recognized in business combinations, and improves
comparability by eliminating the significant level of interest
expense associated with our debt facilities, as well as income
taxes, which may not be comparable with other companies based on
our tax structure.
Adjusted EBITDA and Adjusted EBITDA margin are used as the
primary bases to evaluate our consolidated operating
performance.
Adjusted Net Income is a non-GAAP financial measure and is
defined as net income (loss) attributable to Endeavor Operating
Company adjusted to exclude our share (excluding those relating to
certain non-controlling interests) of the adjustments used to
calculate Adjusted EBITDA, other than income taxes, net interest
expense and depreciation, on an after-tax basis, the release of tax
valuation allowances and other tax items.
Adjusted Net Income adjusts income or loss attributable to the
Company for items that are not considered to be reflective of our
operating performance. Management believes that such non-GAAP
information is useful to investors and analysts as it provides a
better understanding of the performance of our operations for the
periods presented and, accordingly, facilitates the development of
future projections and earnings growth prospects.
Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net Income
have limitations as analytical tools, and you should not consider
them in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements
for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest
expense or the cash requirements necessary to service interest or
principal payments on our debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced or require improvements in the future, and Adjusted
EBITDA, Adjusted EBITDA margin, and Adjusted Net Income do not
reflect any cash requirement for such replacements or improvements;
and they are not adjusted for all non-cash income or expense items
that are reflected in our statements of cash flows.
We compensate for these limitations by using Adjusted EBITDA,
Adjusted EBITDA margin and Adjusted Net Income along with other
comparative tools, together with GAAP measurements, to assist in
the evaluation of operating performance.
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income
should not be considered substitutes for the reported results
prepared in accordance with GAAP and should not be considered in
isolation or as alternatives to net income (loss), as indicators of
our financial performance, as measures of discretionary cash
available to us to invest in the growth of our business or as
measures of cash that will be available to us to meet our
obligations. Although we use Adjusted EBITDA, Adjusted EBITDA
margin and Adjusted Net Income as financial measures to assess the
performance of our business, such use is limited because it does
not include certain material costs necessary to operate our
business. Our presentation of Adjusted EBITDA, Adjusted EBITDA
Margin and Adjusted Net Income should not be construed as
indications that our future results will be unaffected by unusual
or nonrecurring items. These non-GAAP financial measures, as
determined and presented by us, may not be comparable to related or
similarly titled measures reported by other companies.
Set forth below are reconciliations of our most directly
comparable financial measures calculated in accordance with GAAP to
these non-GAAP financial measures on a consolidated basis.
A reconciliation of the Company’s Adjusted EBITDA guidance to
the most directly comparable GAAP financial measure cannot be
provided without unreasonable efforts and is not provided herein
because of the inherent difficulty in forecasting and quantifying
certain amounts that are necessary for such reconciliations,
including adjustments that are made for equity-based compensation
expense, restructuring charges, gains, losses and impairments
related to acquisitions and divestitures of businesses, non-cash
fair value adjustments of embedded foreign currency derivatives,
equity method earnings or losses and fair value adjustments for
investments, certain tax items and other adjustments reflected in
our reconciliation of historical Adjusted EBITDA, the amounts of
which, could be material.
Adjusted EBITDA and Adjusted
Net Income
(Unaudited)
(In thousands)
Adjusted EBITDA Three Months Ended September 30,
Nine Months Ended September 30,
2021
2020
2021
2020
Net income (loss)
$
63,613
$
(21,819
)
$
(450,778
)
$
(568,845
)
(Benefit from) provision for income taxes
(7,718
)
(941
)
58,285
43,614
Interest expense, net
55,783
71,277
207,970
212,954
Depreciation and amortization
71,661
76,471
208,058
241,669
Equity-based compensation expense (1)
60,885
20,602
464,393
37,577
Merger, acquisition and earn-out costs (2)
13,107
6,682
38,291
15,985
Certain legal costs (3)
(266
)
1,646
4,260
7,805
Restructuring, severance and impairment (4)
2,179
952
6,612
213,199
Fair value adjustment - Droga5 (5)
-
-
-
473
Fair value adjustment - equity investments (5)
90
(1,547
)
(13,614
)
4,212
Equity method losses - Learfield IMG College (6)
14,831
31,354
76,291
238,891
COVID-19 related costs (7)
-
426
-
2,829
Other (8)
9,152
(6,772
)
51,063
(50,367
)
Adjusted EBITDA
$
283,317
$
178,331
$
650,831
$
399,996
Net income (loss) margin
4.6
%
(2.5
%)
(12.6
%)
(22.6
%)
Adjusted EBITDA margin
20.4
%
20.6
%
18.2
%
15.9
%
Adjusted Net Income Three Months Ended
September 30, Nine Months Ended September 30,
2021
2020
2021
2020
Net income (loss)
$
63,613
$
(21,819
)
$
(450,778
)
$
(568,845
)
Net loss (income) attributable to non-controlling interests
(21,128
)
(58,430
)
141,980
(32,914
)
Net loss attributable to Endeavor Operating Company, LLC prior to
reorganiztion transactions
-
-
31,686
-
Net income (loss) attributable to Endeavor Group Holdings, Inc.
42,485
-
(277,112
)
-
Net loss attributable to Endeavor Operating Company, LLC prior to
the reorganization transactions
-
(80,249
)
-
(601,759
)
Amortization
48,646
55,315
141,023
178,773
Equity-based compensation expense (1)
60,885
20,602
464,393
37,577
Merger, acquisition and earn-out costs (2)
13,107
6,682
38,291
15,985
Certain legal costs (3)
(266
)
1,646
4,260
7,805
Restructuring, severance and impairment (4)
2,179
952
6,612
213,199
Fair value adjustment - Droga5 (5)
-
-
-
473
Fair value adjustment - equity investments (5)
90
(1,547
)
(13,614
)
4,212
Equity method losses - Learfield IMG College (6)
14,831
31,354
76,291
238,891
COVID-19 related costs (7)
-
426
-
2,829
Other (8)
9,152
(6,772
)
51,063
(50,367
)
Tax effects of adjustments (9)
19,176
(6,960
)
90,407
(11,948
)
Valuation allowance and other tax items (10)
-
-
17,608
32,338
Adjustments allocated to non-controlling interests (11)
(66,566
)
(13,051
)
(404,028
)
(52,744
)
Adjusted Net Income
$
143,719
$
8,398
$
195,194
$
15,264
(1)
Equity-based compensation represents
primarily non-cash compensation expense associated with our
equity-based compensation plans.
The increase for the three and nine months
ended September 30, 2021 as compared to the three and nine months
ended September 30, 2020 was primarily due to modification of
certain pre-IPO equity-based awards primarily to remove certain
forfeiture and discretionary call terms as well as grants under the
2021 Incentive Award Plan that were issued in connection with the
IPO. Equity-based compensation was recognized in all segments and
Corporate for the three and nine months ended September 30, 2021
and 2020.
(2)
Includes (i) certain costs of
professional advisors related to mergers, acquisitions,
dispositions or joint ventures and (ii) fair value adjustments for
contingent consideration liabilities related to acquired businesses
and compensation expense for deferred consideration associated with
selling shareholders that are required to remain our employees.
Such costs for the three months
ended September 30, 2021 primarily related to professional advisor
costs, which were approximately $9 million and primarily related to
Corporate. Fair value adjustments for contingent consideration
liabilities related to acquired businesses and acquisition earn-out
adjustments of approximately $4 million, which primarily related to
our Representation and Events, Experiences & Rights
segments.
Such costs for the three months ended
September 30, 2020 primarily related to acquisition earn-out
adjustments of approximately $6 million, primarily related to our
Representation segment. Professional advisor costs were
approximately $1 million primarily related to our Events,
Experiences & Rights and Owned Sports Properties segments.
Such costs for the nine months ended
September 30, 2021 primarily related to fair value adjustments for
contingent consideration liabilities related to acquired businesses
and acquisition earn-out adjustments of approximately $24 million,
which primarily related to our Events, Experiences & Rights and
Representation segments. Professional advisor costs were
approximately $14 million and primarily related to our Events,
Experiences & Rights segment and Corporate.
Such costs for the nine months ended
September 30, 2020 primarily related to professional advisor costs
of approximately $10 million primarily related to our Events,
Experiences & Rights and Representation segments. Fair value
adjustments for contingent consideration liabilities related to
acquired businesses and acquisition earn-out adjustments of
approximately $6 million, which primarily related to our
Representation segment.
(3)
Includes costs related to certain
litigation or regulatory matters in each of our segments and
Corporate.
(4)
Includes certain costs related to
our restructuring activities and non-cash impairment charges.
Such costs for the three months ended
September 30, 2021 primarily relates to the impairment of goodwill
in our Representation segment.
Such costs for the three months ended
September 30, 2020 included approximately $1 million for severance
and restructuring expenses primarily related to COVID-19 and in our
Events, Experiences & Rights segment.
Such costs for the nine months ended
September 30, 2021 primarily related to the impairment of goodwill
in our Representation and Events, Experiences & Rights
segments.
Such costs for the nine months ended
September 30, 2020 included approximately $11 million related to
the impairment of certain other assets and investments,
approximately $175 million related to the impairment of intangible
assets and approximately $27 million for severance and
restructuring expenses, in each case primarily related to COVID-19,
and primarily related to our Representation and Events, Experiences
& Rights segments.
(5)
Includes the net change in fair
value for certain equity investments with and without readily
determinable fair values, based on observable price changes.
(6)
Relates to equity method losses,
including impairment charges, from our investment in Learfield IMG
College following the merger of our IMG College business with
Learfield in December 2018.
(7)
Includes COVID-19 related costs that are
non-recurring and incremental costs that would have otherwise not
been incurred. Such adjustment for the three months ended September
30, 2020 does not include the write-off of $2 million of deferred
event costs, net of insurance recoveries, which is adjusted in our
Events, Experiences & Rights segment profitability measure.
Such adjustment for the nine months ended September 30, 2020 does
not include the write-off of $7 million of deferred event costs,
net of insurance recoveries, which is adjusted in our Events,
Experiences & Rights segment profitability measure.
(8)
For the three months ended September 30,
2021, other costs were comprised primarily of losses of
approximately $13 million on foreign exchange transactions, which
related to all of our segments and Corporate, approximately a $2
million gain from an earnout related to the sale of an investment
related to our Representation segment and a $2 million fee received
from our Learfield IMG College investment in our Events,
Experiences & Rights segment.
For the three months ended September 30,
2020, other costs were comprised primarily of a gain of
approximately $17 million related to sales of investments related
to our Representation segment, a loss of approximately $2 million
related to non-cash fair value adjustments of embedded foreign
currency derivatives, which related primarily to our Events,
Experiences & Rights segment, and losses of approximately $7
million on foreign exchange transactions, which related to all of
our segments and Corporate.
For the nine months ended September 30,
2021, other costs were comprised primarily of approximately $29
million related to a loss on debt extinguishment, which related
primarily to Corporate, losses of approximately $15 million on
foreign exchange transactions, which related to all of our segments
and Corporate, a loss of approximately $10 million related to
non-cash fair value adjustments of embedded foreign currency
derivatives and a $2 million fee received from our Learfield IMG
College investment, both of which related primarily to our Events,
Experiences & Rights segment, approximately $2 million related
to transaction costs associated with the repricing of the UFC
Credit Facilities in our Owned Sports Properties segment and
approximately a $2 million gain from an earnout related to the sale
of an investment related to our Representation segment.
For the nine months ended September 30,
2020, other costs were comprised primarily of a gain of
approximately $27 million related to the consolidation of a
previously held equity interest in FC Diez Media, a gain of
approximately $15 million related to the sale of an investment, a
gain of approximately $8 million associated with the
deconsolidation of Asian Tour Media Pte. Ltd., a gain of
approximately $11 million related to non-cash fair value
adjustments of embedded foreign currency derivatives and an
approximately $4 million increase related to purchase price
adjustments to deferred revenue and ticket inventory at On
Location, all of which related primarily to our Events, Experiences
& Rights segment.
(9)
Reflects the tax impacts with
respect to each adjustment noted above by applying the annual
effective tax rate, as applicable with the exception of the equity
method losses recorded from our investment in Learfield IMG
College, which is calculated on a discrete basis.
(10)
Such items for the nine months
ended September 30, 2021 includes $7.4 million of deferred tax
liabilities, recorded as a result of the IPO, associated with
indefinite lived intangibles and tax expense of $10.2 million
related to a change in tax rate in the United Kingdom. Such items
for the nine months ended September 30, 2020 relate to a $32.3
million tax expense recorded as a result of acquisitions and
subsequent tax restructurings.
(11)
Prior to the IPO and associated reorganization transactions,
reflects the share of adjustments attributable to the
non-controlling interests in UFC. Subsequent to the IPO and
associated reorganization transactions, reflects the share of
adjustments attributable to the non-controlling interests of
certain former members of Endeavor Operating Company who retain
ownership interests in Endeavor Manager and Endeavor Operating
Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211115006199/en/
Investors: investor@endeavorco.com
Press: Christian Muirhead press@endeavorco.com
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