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, 2022.
Highlights
- $1.221 billion in Q3 2022 revenue
- Given continued strength across the business and good line of
sight through the end of the year, increased Adjusted EBITDA
guidance for full year 2022 (new range between $1.145 billion to
$1.175 billion; up $10 million from the midpoint of prior range,
representing year-over-year Adjusted EBITDA growth of 32%)
- Continued focus on achieving long-term leverage target, having
repaid $250 million of debt in the third quarter with the intent to
repay an additional $250 million of debt by year’s end
- OpenBet acquisition closed during the quarter
Q3 2022 Consolidated Financial Results
- Revenue: $1.221 billion
- Net loss: $12.5 million; net loss margin of 1%
- Adjusted EBITDA: $303.1 million; Adjusted EBITDA margin of
24.8%
“Our business performed well in the quarter despite a turbulent
macroeconomic environment,” remarked Ariel Emanuel, CEO, Endeavor.
“Given our unique positioning relative to a set of highly resilient
secular industry trends across premium sports and entertainment
content and live events, we remain confident in our ability to
continue delivering on our long-term growth strategy while also
being good stewards of capital.”
Segment Operating Results
- Owned Sports Properties segment revenue was $402.3
million for the quarter, up $113.8 million, or 39% compared to the
third quarter of 2021. Growth was driven by an increase in media
rights fees and live event, partnership, consumer product and
licensing revenues at UFC, as well as an additional pay-per-view
event and more events with live audiences versus the prior year.
PBR and Diamond Baseball Holdings also contributed to growth in the
quarter. The segment’s Adjusted EBITDA was $195.7 million for the
quarter, up $61.1 million, or 45%, year-over-year.
- Events, Experiences & Rights segment revenue was
$440.6 million for the quarter, down $5.7 million, or 1% compared
to the third quarter of 2021. The decrease was primarily due to
certain media rights deals for events that do not occur annually,
including the Ryder Cup, the UEFA Euro Championship and the
CONCACAF World Cup qualifying games, as well as the timing of
certain events that took place earlier in 2022 than the prior year.
These decreases were partially offset by revenue growth from events
including Wimbledon, Frieze Seoul, the Aer Lingus Classic, and
various music events, as well as increased enrollment at IMG
Academy. The segment’s Adjusted EBITDA was $49.7 million for the
quarter, down $35.3 million, or 42%, year-over-year. Adjusted
EBITDA was impacted by the timing of events, insurance recoveries
recognized in the prior year, as well as increased cost of
personnel, including the continued investment in the Olympics
business at On Location.
- Representation segment revenue was $388.3 million for
the quarter, down $276.4 million, or 42% compared to the third
quarter of 2021. The decrease was primarily due to $334 million of
revenue in the prior year from the restricted Endeavor Content
business, which was sold in January 2022. The decrease was
partially offset by continued strong demand for talent including
the recovery of music and comedy touring, as well as increased
corporate brand spending at 160over90. Excluding revenue
attributable to the restricted Endeavor Content business, revenue
increased 17%. The segment’s Adjusted EBITDA was $132.9 million for
the quarter, down $8.9 million, or 6%, year-over-year. The prior
year’s quarter included $26.5 million of Adjusted EBITDA from the
restricted Endeavor Content business.
2022 Annual Guidance
- Revenue is expected to be between $5.235 billion and $5.325
billion
- Adjusted EBITDA is expected to be between $1.145 billion and
$1.175 billion
Balance Sheet and Liquidity
At September 30, 2022, cash and cash equivalents totaled $970.8
million, compared to $1.824 billion at June 30, 2022. Total debt
was $5.427 billion at September 30, 2022, compared to $5.684
billion at June 30, 2022.
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 2 p.m. PT / 5 p.m. ET today. The event
can be accessed at: https://events.q4inc.com/attendee/518939942
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. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements in this press release that do not relate to matters of
historical fact should be considered forward- looking statements,
including the Company’s guidance for full year 2022 and its
deleveraging efforts and debt repayment, and timing thereof. The
words “believe,” “may,” “will,” “estimate,” “potential,”
“continue,” “anticipate,” “intend,” “expect,” “could,” “would,”
“project,” “plan,” “target,” and similar expressions are intended
to identify forward-looking statements, though not all
forward-looking statements use these words or expressions. 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 COVID-19 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 I, Item 1A “Risk
Factors” in Endeavor’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2021, as updated by Part II, Item 1A “Risk
Factors” in Endeavor’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2022, as any such factors may be
updated from time to time in its other filings with the Securities
and Exchange Commission (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,
2022
2021
2022
2021
Revenue
$
1,221,416
$
1,391,303
$
4,007,694
$
3,572,157
Operating expenses: Direct operating costs
398,518
673,215
1,601,544
1,790,562
Selling, general and administrative expenses
601,469
520,626
1,729,174
1,686,840
Insurance recoveries
—
(12,233
)
(993
)
(42,100
)
Depreciation and amortization
63,571
71,661
195,177
208,058
Impairment charges
689
754
689
4,524
Total operating expenses
1,064,247
1,254,023
3,525,591
3,647,884
Operating income (loss)
157,169
137,280
482,103
(75,727
)
Other (expense) income: Interest expense, net
(75,608
)
(55,783
)
(197,385
)
(207,970
)
Loss on extinguishment of debt
—
—
—
(28,628
)
Tax receivable agreements liability adjustment
(10,405
)
—
(61,497
)
—
Other income (expense), net
9,325
(7,719
)
463,133
(3,001
)
Income (loss) before income taxes and equity losses of affiliates
80,481
73,778
686,354
(315,326
)
Provision for (benefit from) income taxes
8,515
(7,718
)
(6,020
)
58,285
Income (loss) before equity losses of affiliates
71,966
81,496
692,374
(373,611
)
Equity losses of affiliates, net of tax
(84,504
)
(17,883
)
(145,026
)
(77,167
)
Net (loss) income
(12,538
)
63,613
547,348
(450,778
)
Less: Net (loss) income attributable to non-controlling interests
(2,499
)
21,128
212,035
(141,980
)
Less: Net loss attributable to Endeavor Operating Company, LLC
prior to the reorganization transactions
—
—
—
(31,686
)
Net (loss) income attributable to Endeavor Group Holdings, Inc.
$
(10,039
)
$
42,485
$
335,313
$
(277,112
)
(Loss) earnings per share of Class A common stock(1):
Basic
$
(0.04
)
$
0.16
$
1.22
$
(1.07
)
Diluted
$
(0.04
)
$
0.16
$
1.19
$
(1.07
)
Weighted average number of shares used in computing (loss)
earnings per share: Basic
285,870,317
262,891,070
278,724,574
261,048,116
Diluted(2)
289,806,633
435,922,511
450,758,061
261,048,116
(1) Basic and diluted loss per share of Class A common stock
presented for 2021 is applicable only for the period from May 1,
2021 through September 30, 2021, which is the period following the
initial public offering ("IPO") and the related Reorganization
Transactions
(2) The diluted weighted average number of shares of 450,758,061
for the nine months ended September 30, 2022 includes weighted
average Class A common shares outstanding, plus an assumed exchange
of Endeavor Manager Units and Endeavor Operating Units into
167,046,923 shares, an assumed exchange of Endeavor Profits Units
into 1,884,386 shares of the Company’s Class A common stock and
additional shares from Stock Options, RSUs, Phantom Units and
redeemable non-controlling interests, as noted in the table
below:
Weighted average Class A Common Shares outstanding - Basic
278,724,574
Additional shares assuming exchange of all Endeavor Profits Units
1,884,386
Additional shares from RSUs, stock options and Phantom Units, as
calculated using the treasury stock method
1,875,609
Additional shares assuming exchange of all Endeavor Operating Units
and Endeavor Manager Units
167,046,923
Additional shares assuming redemption of redeemable non-controlling
interests
1,226,569
Weighted average Class A Common Shares outstanding - Diluted
450,758,061
Segment Results
(Unaudited)
(In thousands)
Three Months Ended September 30, Nine
Months Ended September 30,
2022
2021
2022
2021
Revenue: Owned Sports Properties
$
402,272
$
288,521
$
1,030,891
$
830,867
Events, Experiences & Rights
440,605
446,333
1,894,290
1,514,615
Representation
388,335
664,723
1,103,611
1,241,864
Eliminations
(9,796
)
(8,274
)
(21,098
)
(15,189
)
Total Revenue
$
1,221,416
$
1,391,303
$
4,007,694
$
3,572,157
Adjusted EBITDA: Owned Sports Properties
$
195,749
$
134,679
$
505,760
$
412,495
Events, Experiences & Rights
49,668
84,993
290,268
160,843
Representation
132,923
141,801
345,849
264,969
Corporate
(75,258
)
(78,156
)
(217,991
)
(187,476
)
Consolidated Balance
Sheets
(Unaudited)
(In thousands, except share
data)
September 30,
December 31,
2022
2021
ASSETS Current Assets: Cash and cash equivalents
$
970,782
$
1,560,995
Restricted cash
294,203
232,041
Accounts receivable (net of allowance for doubtful accounts of
$65,695 and $57,102, respectively)
893,369
615,010
Deferred costs
247,864
255,371
Assets held for sale
27,301
885,633
Other current assets
253,620
204,697
Total current assets
2,687,139
3,753,747
Property and equipment, net
642,891
629,807
Operating lease right-of-use assets
324,340
373,652
Intangible assets, net
2,199,670
1,611,684
Goodwill
5,237,971
4,506,554
Investments
407,435
298,212
Other assets
416,469
260,861
Total assets
$
11,915,915
$
11,434,517
LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS'
EQUITY Current Liabilities: Accounts payable
$
540,142
$
558,863
Accrued liabilities
580,001
524,061
Current portion of long-term debt
89,039
82,022
Current portion of operating lease liabilities
59,355
59,743
Deferred revenue
609,715
651,760
Deposits received on behalf of clients
279,402
216,632
Liabilities held for sale
4,866
507,303
Other current liabilities
186,289
105,053
Total current liabilities
2,348,809
2,705,437
Long-term debt
5,338,364
5,631,714
Long-term operating lease liabilities
308,828
363,568
Other long-term liabilities
496,378
402,472
Total liabilities
8,492,379
9,103,191
Commitments and contingencies Redeemable
non-controlling interests
254,699
209,863
Shareholders' Equity: Class A common stock, $0.00001 par
value; 5,000,000,000 shares authorized; 289,330,904 and 265,553,327
shares issued and outstanding as of September 30, 2022 and December
31, 2021, respectively
2
2
Class B common stock, $0.00001 par value; 5,000,000,000 shares
authorized; none issued and outstanding as of September 30, 2022
and December 31, 2021
—
—
Class C common stock, $0.00001 par value; 5,000,000,000 shares
authorized; none issued and outstanding as of September 30, 2022
and December 31, 2021
—
—
Class X common stock, $0.00001 par value; 4,987,036,068 and
5,000,000,000 shares authorized; 183,173,428 and 186,222,061 shares
issued and outstanding as of September 30, 2022 and December 31,
2021, respectively
1
1
Class Y common stock, $0.00001 par value; 997,261,325 and
1,000,000,000 shares authorized; 229,875,648 and 238,154,296 shares
issued and outstanding as of September 30, 2022 and December 31,
2021, respectively
2
2
Additional paid-in capital
2,061,760
1,624,201
Accumulated deficit
(10,039
)
(296,625
)
Accumulated other comprehensive loss
(61,223
)
(80,535
)
Total Endeavor Group Holdings, Inc. shareholders' equity
1,990,503
1,247,046
Nonredeemable non-controlling interests
1,178,334
874,417
Total shareholders' equity
3,168,837
2,121,463
Total liabilities, redeemable interests and shareholders' equity
$
11,915,915
$
11,434,517
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, tax receivable agreements
liability adjustment and certain other items, including
gains/losses on business divestitures, 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 Group
Holdings 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)
Three Months Ended September 30, Nine Months Ended
September 30,
2022
2021
2022
2021
Net (loss) income
$
(12,538
)
$
63,613
$
547,348
$
(450,778
)
Provision for (benefit from) income taxes
8,515
(7,718
)
(6,020
)
58,285
Interest expense, net
75,608
55,783
197,385
207,970
Depreciation and amortization
63,571
71,661
195,177
208,058
Equity-based compensation expense (1)
48,388
60,885
159,851
464,393
Merger, acquisition and earn-out costs (2)
30,529
13,107
57,891
38,291
Certain legal costs (3)
1,604
(266
)
11,204
4,260
Restructuring, severance and impairment (4)
869
2,179
2,829
6,612
Fair value adjustment - equity investments (5)
(291
)
90
(13,635
)
(13,614
)
Equity method losses - Learfield IMG College and Endeavor Content
(6)
83,171
14,831
149,086
76,291
Gain on sale of the restricted Endeavor Content business(7)
—
—
(463,641
)
—
Tax receivable agreements liability adjustment (8)
10,405
—
61,497
—
Other (9)
(6,749
)
9,152
24,914
51,063
Adjusted EBITDA
$
303,082
$
283,317
$
923,886
$
650,831
Net (loss) income margin
(1.0
%)
4.6
%
13.7
%
(12.6
%)
Adjusted EBITDA margin
24.8
%
20.4
%
23.1
%
18.2
%
Adjusted Net Income Three Months Ended
September 30, Nine Months Ended September 30,
2022
2021
2022
2021
Net (loss) income
$
(12,538
)
$
63,613
$
547,348
$
(450,778
)
Net (income) loss attributable to non-controlling interests
2,499
(21,128
)
(212,035
)
141,980
Net loss attributable to Endeavor Operating Company, LLC prior to
the reorganization transactions
—
—
—
31,686
Net (loss) income attributable to Endeavor Group Holdings, Inc.
(10,039
)
42,485
335,313
(277,112
)
Amortization
39,153
48,646
123,449
141,023
Equity-based compensation expense (1)
48,388
60,885
159,851
464,393
Merger, acquisition and earn-out costs (2)
30,529
13,107
57,891
38,291
Certain legal costs (3)
1,604
(266
)
11,204
4,260
Restructuring, severance and impairment (4)
869
2,179
2,829
6,612
Fair value adjustment - equity investments (5)
(291
)
90
(13,635
)
(13,614
)
Equity method losses - Learfield IMG College and Endeavor Content
(6)
83,171
14,831
149,086
76,291
Gain on sale of the restricted Endeavor Content business(7)
—
—
(463,641
)
—
Tax receivable agreements liability adjustment (8)
10,405
—
61,497
—
Other (9)
(6,749
)
9,152
24,914
51,063
Tax effects of adjustments (10)
(8,952
)
19,176
1,323
90,407
Other tax items (11)
(12,241
)
—
(65,924
)
17,608
Adjustments allocated to non-controlling interests (12)
(67,416
)
(66,566
)
(16,044
)
(404,028
)
Adjusted Net Income
$
108,431
$
143,719
$
368,113
$
195,194
__________
(1)
Equity-based compensation represents
primarily non-cash compensation expense associated with our
equity-based compensation plans.
The decrease for the three months ended
September 30, 2022 as compared to the three months ended September
30, 2021 was primarily due to grants under the 2021 Incentive Award
Plan that were issued in connection with the IPO.
The decrease for the nine months ended
September 30, 2022 as compared to the nine months ended September
30, 2021 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, 2022 and 2021.
(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, 2022 primarily related to professional advisor costs,
which were approximately $21 million and primarily related to our
Events, Experiences & Rights segment and Corporate. Fair value
adjustments for contingent consideration liabilities related to
acquired businesses and acquisition earn-out adjustments were
approximately $10 million, which primarily related to our
Representation segment.
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 were approximately $4 million, which primarily related
to our Representation and Events, Experiences & Rights
segments.
Such costs for the nine months ended September 30, 2022
primarily related to professional advisor costs of approximately
$33 million and related to all of our segments. Fair value
adjustments for contingent consideration liabilities related to
acquired businesses and acquisition earn-out adjustments were
approximately $25 million, which primarily related to our
Representation segment.
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.
(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, 2022 primarily related to restructuring expenses in
our Events, Experiences & Rights segment.
Such costs for the three months ended
September 30, 2021 primarily related to the impairment of goodwill
in our Representation segment.
Such costs for the nine months ended
September 30, 2022 primarily related to a write off of an asset in
Corporate and the restructuring expenses in our Events, Experiences
& Rights and Representation segments.
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.
(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 as
well as losses from the 20% interest we retained in the restricted
Endeavor Content business, which we sold in January 2022.
(7)
Relates to the gain recorded for the sale
of the restricted Endeavor Content business, net of transactions
costs of $15.0 million.
(8)
Includes the adjustment for the tax
receivable agreements liability related to the expected realization
of certain tax benefits after concluding that such TRA payments
would be probable based on estimates of future taxable income over
the terms of the TRAs.
(9)
For the three months ended September 30,
2022, other costs were comprised primarily of a gain of
approximately $23 million related to the sale of DBH, which related
to our Owned Sports Properties segment, losses of approximately $13
million on foreign exchange transactions, which related to all of
our segments and Corporate, a loss of approximately $8 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 $4
million related to foreign exchange hedge contracts.
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 nine months ended September 30,
2022, other costs were comprised primarily of losses of
approximately $33 million on foreign exchange transactions, which
related to all of our segments and Corporate, a gain of
approximately $23 million related to the sale of DBH, which related
to our Owned Sports Properties segment, a loss of approximately $9
million related to non-cash fair value adjustments of embedded
foreign derivatives, which related primarily to our Events,
Experiences & Rights segment, and losses of approximately $7
million related to foreign exchange hedge contracts which related
to our Events, Experiences & Rights segment 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, and a loss of approximately $10 million related to
non-cash fair value adjustments of embedded foreign currency
derivatives primarily related to our Events, Experiences &
Rights segment.
(10)
Reflects the tax effect of the adjustments
noted above.
(11)
Such items for the three and nine months
ended September 30, 2022 reflects the release of a valuation
allowance on deferred tax assets due to the expected realization of
certain tax benefits in connection with the TRA liability. Such
items for the nine months ended September 30, 2021 includes $7.4
million of deferred tax liabilities associated with indefinite
lived intangibles recorded as a result of the IPO and tax expense
of $10.2 million, related to a change in tax rate in the United
Kingdom.
(12)
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/20221110005748/en/
Investors: investor@endeavorco.com Press:
press@endeavorco.com
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