Fourth Quarter 2020
Highlights*
* (All comparisons are versus the prior year period unless
stated otherwise)
- Revenue was $238.2 million, a decrease of 26% or $84.6 million,
reflecting the absence of the Company’s large-scale event in Saudi
Arabia and ticketed live events
- Operating income was $36.2 million, a decrease of 64% or $63.6
million
- Adjusted OIBDA1 was $51.2 million, a decrease of 52% or $56.4
million
- WWE transitioned Raw and SmackDown to Tropicana Field in Tampa
Bay (December 11), and continued to deliver a spectacular
interactive experience, WWE ThunderDome, to fans
- WWE Network average paid subscribers2 were 1.5 million, an
increase of 6%
Full Year 2020
Highlights*
* (All comparisons are versus the prior year period unless
stated otherwise)
- WWE produced live, in-ring content without interruption
throughout the year, demonstrating the Company’s ability to adapt
to COVID-19 and unprecedented industry challenges
- Revenue was $974.2 million, an increase of 1% or $13.8 million
as the growth in core content rights fees was largely offset by the
loss of ticket revenue and the absence of a large-scale
international event
- Operating income was $208.6 million, an increase of 79% or
$92.1 million, driven by the substantial rise in content rights
fees, which have a high incremental margin
- Adjusted OIBDA reached a record $286.2 million, an increase of
59% or $106.2 million
- Digital video views were 38.0 billion, an increase of 10%, and
hours consumed were 1.4 billion, an increase of 10%, across digital
and social media platforms3
Full Year 2021 Business
Outlook4
- WWE entered into a multi-year WWE Network U.S. licensing
agreement (effective March 18, 2021) with Peacock, NBCU’s streaming
service. This strategic agreement enables WWE to reach a larger
audience and realize a greater economic return as compared to a
stand-alone subscription service
- WrestleMania will return to Tampa Bay on Saturday, April 10 and
Sunday, April 11, 2021 at Raymond James Stadium with ticket
availability and safety protocols forthcoming
- Management expects restrictions related to the spread of
COVID-19, particularly related to the cancellation, postponement or
reduced capacity of ticketed live events, to continue at least
through the first half of 2021. Additionally, management
anticipates a significant year-over-year increase in WWE’s expense
base due to the return of employees from furlough and continued
higher expenses associated with the production of its weekly Raw
and SmackDown television content at the WWE ThunderDome from its
stadium residence. The Company estimates it can achieve 2021
Adjusted OIBDA of $270 - $305 million as revenue growth, driven by
the impact of the Peacock transaction, the gradual ramp-up of
ticketed live events, including large-scale international events,
and the escalation of core content rights fees, is offset by the
increase in personnel and production expenses. Management estimates
that the stated 2021 Adjusted OIBDA guidance range would be 15% -
20% higher without the ongoing impact of COVID-19, which includes
the loss of ticket and merchandise sales at live events and the
increased investment in production to further fan engagement. (See
2021 Business Outlook on page 6 for further information)
WWE (NYSE: WWE) today announced financial results for its fourth
quarter and year ended December 31, 2020.
“During the fourth quarter, we continued to produce live content
in new ways, which successfully increased audience interaction and
engagement,” said Vince McMahon, WWE Chairman & CEO. “As we
continued to adapt our business to the changing media environment,
we completed an important agreement to license WWE Network content
to Peacock, which we expect will expand the reach of our brands and
enhance the value of our content.”
Kristina Salen, WWE Chief Financial Officer, added “For the
year, we achieved record revenue and Adjusted OIBDA, which was at
the high end of our rescinded guidance. Adjusted OIBDA increased
nearly 60% reflecting the full year impact of our new content
distribution agreements in the U.S. and comprehensive efforts to
contain costs in challenging times. In 2021, we anticipate Adjusted
OIBDA of $270 million to $305 million, reflecting the increasing
monetization of our content tempered by the ongoing impact of
COVID-19.”
Fourth-Quarter Consolidated
Results*
* (All comparisons are versus the prior year period unless
stated otherwise)
Revenue was $238.2 million, a decrease of 26% or $84.6
million, primarily due to the absence of the Company’s large-scale
event in Saudi Arabia as well as the absence of ticket and
merchandise sales, all resulting from the cancellation,
postponement and relocation of live events due to public health
concerns related to COVID-19.
Operating Income was $36.2 million, a decrease of 64% or
$63.6 million, primarily driven by the absence of events (as
described above) and, to a lesser extent, a $7.0 million increase
in management incentive compensation and a $6.0 million increase in
stock compensation expense related to forfeitures in the prior year
period. The Company’s Operating income margin decreased to 15.2%
from 30.9%.
Adjusted OIBDA (which excludes stock compensation) was
$51.2 million, a decrease of 52% or $56.4 million. The Company’s
Adjusted OIBDA margin decreased to 21.5% from 33.3%.
Net Income was $13.6 million, or $0.16 per diluted share,
a decrease from $69.3 million, or $0.78 per diluted share, in the
fourth quarter 2019, primarily reflecting lower operating
performance. Current period results also reflected an after-tax
loss of $5.8 million related to certain equity investments and $1.0
million in after-tax severance expense resulting from a reduction
in force due to COVID-19. Excluding these items, Adjusted Net
Income5 was $20.4 million, or $0.24 per diluted share.
Cash flows generated by operating activities were $62.4
million, a decrease from $119.4 million, driven by lower operating
performance.
Free Cash Flow was $56.2 million, a decrease from $106.6
million, primarily due to the change in operating cash flow.6
Return of Capital to
Shareholders
The Company paid $9.3 million in dividends to shareholders
during the fourth quarter 2020. There were no share repurchases
under the Company’s existing share repurchase program during the
fourth quarter 2020.
Full Year 2020 Consolidated
Results*
* (All comparisons are versus the prior year period unless
stated otherwise)
Revenue was $974.2 million, an increase of 1% or $13.8
million, as the growth in core content rights fees was largely
offset by the loss of live event ticket and merchandise sales as
well as the absence of a large-scale event in Saudi Arabia. These
losses resulted from the cancellation, postponement and relocation
of live events due to public health concerns related to COVID-19
(beginning in mid-March 2020).
Operating Income was $208.6 million, an increase of 79%
or $92.1 million, primarily driven by the substantial increase in
core content rights fees, which have a high incremental margin. The
increase in operating income was partially offset by a $10.0
million increase in management incentive compensation, an $8.5
million increase in depreciation and amortization primarily
associated with the Company’s workplace strategy, and a $7.0
million increase in severance expense resulting from a reduction in
force due to COVID-19. The Company’s Operating income margin
increased to 21.4% from 12.1%.
Adjusted OIBDA (which excludes stock compensation) was
$286.2 million, an increase of $106.2 million or 59%. Adjusted
OIBDA excludes the $7.0 million in severance expense (as described
above). The Company’s Adjusted OIBDA margin increased to 29.4% from
18.7%.
Net Income was $131.8 million, or $1.56 per diluted
share, an increase from $77.1 million, or $0.85 per diluted share,
in the prior year, primarily due to stronger operating performance
partially offset by the impact of the finance lease that commenced
in July 2019 related to the Company’s new headquarters. Current
period results also reflected an after-tax net loss of $4.4
million, driven by impairment charges on certain equity investments
partially offset by net realized gains of marketable securities,
and $5.4 million in after-tax severance expense (as described
above). Excluding these items, Adjusted Net Income5 was $141.6
million, or $1.68 per diluted share.
Cash flows generated by operating activities were $319.9
million, an increase from $121.7 million, primarily due to changes
in working capital and stronger operating performance.
Free Cash Flow was $292.3 million, an increase from $52.6
million, primarily driven by the increase in operating cash flow
and, to a lesser extent, a decrease in capital expenditures.6
Cash, cash equivalents and short-term investments were
$593 million as of December 31, 2020, which includes $100 million
borrowed under the Company’s revolving line of credit. Of the $200
million borrowed during the second quarter 2020, $100 million was
repaid in the fourth quarter 2020 and the remainder was repaid in
January 2021. As a result, the Company currently estimates debt
capacity under its revolving line of credit of $200
million.
Return of Capital to
Shareholders
The Company paid $37.2 million in dividends to shareholders in
2020. There were no share repurchases under the Company’s existing
share repurchase program during 2020.
Basis of Presentation
For the fourth quarter of 2020, the Company’s consolidated
pre-tax results included the impact of an $8.6 million loss on
investments, primarily related to $4.4 million of impairment
charges coupled with $4.2 million in fair market value adjustments
of marketable securities prior to their sale, and $1.5 million in
severance expense resulting from a reduction in force due to
COVID-19. For the twelve-month period ended December 31, 2020, the
Company’s consolidated pre-tax results included $13.4 million of
incremental costs related to the finance lease for the Company’s
new headquarters, $7.0 million in severance expense resulting from
a reduction in force due to COVID-19, and a net loss of $5.7
million related to certain equity investments, which included $15.9
million of impairment charges partially offset by $10.2 million in
fair market value adjustments of marketable securities prior to
their sale. A reconciliation of Net Income to Adjusted Net Income
for the three and twelve-month periods ended December 31, 2020 and
2019 can be found in the supplemental schedule on page 15 of this
release.
Results by Operating
Segment*
* (All comparisons are versus the prior year period unless
stated otherwise)
Media
Fourth-Quarter 2020
Revenue was $210.5 million, a decrease of 20% or $54.1
million, primarily driven by the absence of the Company’s
large-scale event in Saudi Arabia and, to a lesser extent,
decreased sales of advertising and
sponsorship. These factors were partially offset by growth in
WWE Network subscription revenue.
WWE Network’s average paid subscribers were 1.5 million, an
increase of 6%.
Operating income was $67.1 million, a decrease of 41% or
$47.5 million, primarily due to a decrease in revenue (as described
above), partially offset by a corresponding reduction in
event-related and content creation expenses.
Adjusted OIBDA was $73.0 million, representing a decrease
of 37% or $43.6 million.
Full Year 2020
Revenue was $868.2 million, an increase of 17% or $125.1
million, primarily driven by the growth of domestic core content
rights fees for the Company’s flagship programs Raw and SmackDown,
partially offset by the absence of a large-scale international
event in Saudi Arabia.
WWE Network’s average paid subscribers were 1.6 million (flat on
a year-over-year basis).
Operating income was $332.5 million, an increase of 74%
or $141.7 million, primarily due to an increase in revenue (as
described above) and, to a lesser extent, a reduction in operating
expenses.
Adjusted OIBDA was $367.8 million, representing an
increase of 64% or $143.7 million.
Live Events
Fourth-Quarter 2020
Revenue was $0.7 million, a decrease of 97% or $26.7
million, resulting from the absence of live events and a
corresponding decline in ticket sales in North American and
international markets. (The fourth quarter 2019 had 50 events in
North America and 20 events in international markets.)
Operating income reflected a loss of $7.0 million, a
decrease of $6.0 million, as the decline in North America and
international ticket sales (as described above) was partially
offset by a reduction in event-related expenses.
Adjusted OIBDA reflected a loss of $6.7 million,
representing a decrease of $4.9 million.
Full Year 2020
Revenue was $19.9 million, a decrease of 84% or $105.7
million, resulting from the absence of live events and a
corresponding decline in ticket sales in North American and
international markets beginning in mid-March 2020. (310 events were
held in 2019 compared to 42 events held in 2020.)
Operating income reflected a loss of $19.1 million, a
decrease of $26.8 million, as the decline in North America and
international ticket sales (as described above) was partially
offset by a reduction in event-related expenses.
Adjusted OIBDA reflected a loss of $17.6 million,
representing a decrease of $27.0 million.
Consumer Products
Fourth-Quarter 2020
Revenue was $27.0 million, a decrease of 12% or $3.8
million, primarily due to lower video game royalties, driven by the
absence of a 2021 release of the Company’s franchise console game,
as well as the decline in venue merchandise sales resulting from
the absence of ticketed live events in the quarter (as described
above). These factors were partially offset by an increase in
eCommerce merchandise sales.
Operating income was $8.9 million, a decrease of 30% or
$3.9 million, reflecting a decline in revenue (as described
above).
Adjusted OIBDA was $9.1 million, representing a decrease
of 26% or $3.2 million.
Full Year 2020
Revenue was $86.1 million, a decrease of 6% or $5.6
million, primarily driven by lower venue merchandise sales
resulting from the absence of ticketed-audience events beginning in
mid-March 2020, partially offset by increased eCommerce sales.
Operating income was $24.8 million, a decrease of 6% or
$1.6 million, reflecting a decline in revenue (as described above)
partially offset by lower operating expenses.
Adjusted OIBDA was $26.6 million, representing a decrease
of 7% or $1.9 million.
2021 Business Outlook4
On January 25, 2021, WWE issued guidance for 2021 Adjusted
OIBDA. As previously indicated, management expects restrictions
related to COVID-19, particularly related to the cancellation,
postponement or reduced capacity of ticketed live events, to
continue at least through the first half of 2021. Additionally,
management anticipates a significant year-over-year increase in
WWE’s expense base due to the return of employees from furlough and
continued higher expenses associated with the production of its
weekly Raw and SmackDown television content at the WWE ThunderDome
from its stadium residence at Tropicana Field. The Company
estimates it can achieve 2021 Adjusted OIBDA of $270 - $305 million
as revenue growth, driven by the impact of the Peacock transaction,
the gradual ramp-up of ticketed live events, including large-scale
international events, and the escalation of core content rights
fees, is offset by the increase in personnel and production
expenses.
Management estimates that the stated 2021 Adjusted OIBDA
guidance range would be 15% - 20% higher without the ongoing impact
of COVID-19, which includes the loss of ticket and merchandise
sales at live events and the increased investment in production to
further fan engagement. Estimates of future performance beyond 2021
will be impacted by the return of these businesses and various
other factors.
Although the Company continues to adapt its business to the
changing environment, the timing and rate of returning ticket
audiences to its live events remains subject to significant
uncertainty, and as such management is not reinstating quarterly
guidance at this time.
Management continues to believe that WWE has significant
long-term opportunities and is well positioned, particularly given
its substantial cash and liquidity, to deliver on its strategic
initiatives and to drive long-term shareholder value.
Notes
(1)
The definition of Adjusted OIBDA can be
found in the Non-GAAP Measures section of the release on pages 7-8.
A reconciliation of three and twelve months ended December 31, 2020
and 2019 Operating Income to Adjusted OIBDA can be found in the
Supplemental Information in this release on page 16
(2)
Average paid subscribers are calculated
based on the arithmetic daily mean over the relevant period, and
may differ substantially from paid subscribers at the end of any
period due to the timing of paid subscriber additions and
losses
(3)
Consumption includes videos viewed on
third party (Facebook, YouTube, Twitter, Instagram, Snapchat,
TikTok, Twitch, etc.) and WWE platforms (WWE.com and WWE App,
including the Free Version of WWE Network)
(4)
The Company’s business model and expected
results will continue to be subject to significant execution and
other risks, including risks relating to 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, 2020
(5)
A reconciliation of three and twelve
months ended December 31, 2020 and 2019 Net Income to Adjusted Net
Income can be found in the Supplemental Information in this release
on page 15
(6)
A reconciliation of three and twelve
months ended December 31, 2020 and 2019 Free Cash Flow to Net cash
provided by operating activities can be found in the Supplemental
Information in this release on page 17
Non-GAAP Measures
The Company defines Adjusted OIBDA as operating income
excluding depreciation and amortization, stock-based compensation
expense, certain impairment charges and other non-recurring
material items that otherwise would impact the comparability of
results between periods. Adjusted OIBDA includes amortization 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 than similarly titled non-GAAP financial measures used by
other companies. WWE views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA (and other non-GAAP
measures such as Adjusted Operating Income, Adjusted Net
Income and Adjusted EPS 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, 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 4, 2021 to discuss the Company's earnings results for the
fourth quarter and full year ended 2020. 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:
3809873). 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 4, 2021 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, pay-per-view, digital media and publishing platforms.
WWE’s TV-PG, family-friendly programming can be seen in more than
900 million homes worldwide in 28 languages. WWE Network, the
first-ever 24/7 over-the-top premium network that includes all live
pay-per-views, scheduled programming and a massive video-on-demand
library, is currently available in more than 180 countries. The
Company is headquartered in Stamford, Conn., with offices in New
York, Los Angeles, London, Mexico City, Mumbai, Shanghai,
Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at
wwe.com and corporate.wwe.com. For information on our global
activities, go to http://www.wwe.com/worldwide/.
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains forward-looking statements pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of
1995, which are subject to various risks and uncertainties. These
risks and uncertainties include, without limitation, risks relating
to: the impact of the COVID-19 outbreak on our business, results of
operations and financial condition; entering, maintaining and
renewing major distribution agreements; a rapidly evolving media
landscape; WWE Network; our need to continue to develop creative
and entertaining programs and events; the possibility of a decline
in the popularity of our brand of sports entertainment; the
continued importance of key performers and the services of Vincent
K. McMahon; possible adverse changes in the regulatory atmosphere
and related private sector initiatives; the highly competitive,
rapidly changing and increasingly fragmented nature of the markets
in which we operate and greater financial resources or marketplace
presence of many of our competitors; uncertainties associated with
international markets including possible disruptions and
reputational risks; our difficulty or inability to promote and
conduct our live events and/or other businesses if we do not comply
with applicable regulations; our dependence on our intellectual
property rights, our need to protect those rights, and the risks of
our infringement of others’ intellectual property rights; the
complexity of our rights agreements across distribution mechanisms
and geographical areas; potential substantial liability in the
event of accidents or injuries occurring during our physically
demanding events including without limitation, claims alleging
traumatic brain injury; large public events as well as travel to
and from such events; our feature film business; our expansion into
new or complementary businesses and/or strategic investments; our
computer systems and online operations; privacy norms and
regulations; a possible decline in general economic conditions and
disruption in financial markets; our accounts receivable; our
indebtedness including our convertible notes; litigation; our
potential failure to meet market expectations for our financial
performance, which could adversely affect our stock; Vincent K.
McMahon exercises control over our affairs, and his interests may
conflict with the holders of our Class A common stock; a
substantial number of shares are eligible for sale by the McMahons
and the sale, or the perception of possible sales, of those shares
could lower our stock price; and the volatility of our Class A
common stock. In addition, our dividend is dependent on a number of
factors, including, among other things, our liquidity and
historical and projected cash flow, strategic plan (including
alternative uses of capital), our financial results and condition,
contractual and legal restrictions on the payment of dividends
(including under our revolving credit facility), general economic
and competitive conditions and such other factors as our Board of
Directors may consider relevant. Forward-looking statements made by
the Company speak only as of the date made and are subject to
change without any obligation on the part of the Company to update
or revise them. Undue reliance should not be placed on these
statements. For more information about risks and uncertainties
associated with the Company’s business, please refer to the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of the Company’s
SEC filings, including, but not limited to, our annual report on
Form 10-K and quarterly reports on Form 10-Q.
World Wrestling Entertainment,
Inc.
Operating Segment
Performance
(In millions)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Net Revenue:
Media
$
210.5
$
264.6
$
868.2
$
743.1
Live Events
0.7
27.4
19.9
125.6
Consumer Products
27.0
30.8
86.1
91.7
Total Net Revenue
$
238.2
$
322.8
$
974.2
$
960.4
Operating Income (Loss):
Media
$
67.1
$
114.6
$
332.5
$
190.8
Live Events
(7.0
)
(1.0
)
(19.1
)
7.7
Consumer Products
8.9
12.8
24.8
26.4
Corporate
(32.8
)
(26.6
)
(129.6
)
(108.4
)
Total Operating Income
$
36.2
$
99.8
$
208.6
$
116.5
Adjusted OIBDA:
Media
$
73.0
$
116.6
$
367.8
$
224.1
Live Events
(6.7
)
(1.8
)
(17.6
)
9.4
Consumer Products
9.1
12.3
26.6
28.5
Corporate
(24.2
)
(19.5
)
(90.6
)
(82.0
)
Total Adjusted OIBDA
$
51.2
$
107.6
$
286.2
$
180.0
World Wrestling Entertainment,
Inc.
Operating Segment
Performance
(In millions)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Media Revenue:
Network (including pay-per-view)
$
45.0
$
41.6
$
185.7
$
184.6
Core content rights fees (1)
139.8
139.3
538.3
348.6
Advertising and sponsorship
16.5
27.6
65.3
72.4
Other (2)
9.2
56.1
78.9
137.5
Total Revenue
$
210.5
$
264.6
$
868.2
$
743.1
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Live Events Revenue:
North American ticket sales
$
—
$
17.8
$
15.2
$
93.8
International ticket sales
—
7.0
0.2
19.0
Advertising and sponsorship
—
0.4
0.4
2.1
Other (3)
0.7
2.2
4.1
10.7
Total Revenue
$
0.7
$
27.4
$
19.9
$
125.6
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Consumer Products Revenue:
Consumer product licensing
$
13.5
$
16.6
$
41.7
$
43.2
eCommerce
13.5
11.0
41.2
29.9
Venue merchandise
—
3.2
3.2
18.6
Total Revenue
$
27.0
$
30.8
$
86.1
$
91.7
(1)
Core content rights fees consist primarily
of licensing revenue earned from the distribution of our flagship
programs, Raw and SmackDown, as well as our NXT programming,
through global broadcast, pay television and digital platforms
(2)
Other forms of media monetization reflect
revenue earned from the distribution of other WWE content,
including, but not limited to, certain live in-ring programming
content in international markets, scripted, reality and other
programming, as well as theatrical and direct-to-home video
releases
(3)
Other Live Events includes revenue from
the sale of travel packages associated with the Company’s global
live events, and commissions earned through secondary ticketing as
well as revenue from events for which the Company receives a fixed
fee
World Wrestling Entertainment,
Inc.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Net revenues
$
238.2
$
322.8
$
974.2
$
960.4
Operating expenses
148.7
171.6
549.5
638.2
Marketing and selling expenses
16.6
20.3
71.3
84.7
General and administrative expenses
26.3
20.5
102.2
86.9
Depreciation and amortization
10.4
10.6
42.6
34.1
Operating income
36.2
99.8
208.6
116.5
Interest expense
9.1
7.9
35.6
26.1
Other (expense) income, net
(7.0
)
1.5
(1.9
)
4.3
Income before income taxes
20.1
93.4
171.1
94.7
Provision for income taxes
6.5
24.1
39.3
17.6
Net income
$
13.6
$
69.3
$
131.8
$
77.1
Earnings per share:
Basic
$
0.17
$
0.89
$
1.70
$
0.99
Diluted
$
0.16
$
0.78
$
1.56
$
0.85
Weighted average common shares
outstanding:
Basic
77.8
78.1
77.6
78.2
Diluted
83.7
88.3
84.2
90.2
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,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
462.1
$
90.4
Short-term investments, net
131.3
160.0
Accounts receivable, net
52.0
124.8
Inventory
8.4
8.3
Prepaid expenses and other current
assets
73.1
20.8
Total current assets
726.9
404.3
Property and equipment, net
161.5
174.8
Finance lease right-of-use assets, net
310.8
289.9
Operating lease right-of-use assets,
net
13.5
20.8
Content production assets, net
15.4
20.1
Investment securities
11.1
28.1
Deferred income tax assets, net
10.1
7.2
Other assets, net
48.0
47.0
Total assets
$
1,297.3
$
992.2
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt
$
100.4
$
3.6
Finance lease liabilities
9.6
7.9
Operating lease liabilities
4.0
6.6
Convertible debt
194.7
188.7
Accounts payable and accrued expenses
124.7
80.6
Deferred income
62.9
56.9
Total current liabilities
496.3
344.3
Long-term debt
21.7
22.1
Finance lease liabilities
379.9
335.5
Operating lease liabilities
9.7
14.6
Other non-current liabilities
0.9
0.4
Total liabilities
908.5
716.9
Commitments and contingencies
Stockholders' equity:
Class A common stock
0.5
0.5
Class B convertible common stock
0.3
0.3
Additional paid-in capital
424.7
405.4
Accumulated other comprehensive income
3.0
2.8
Accumulated deficit
(39.7
)
(133.7
)
Total stockholders’ equity
388.8
275.3
Total liabilities and stockholders'
equity
$
1,297.3
$
992.2
World Wrestling Entertainment,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Year Ended
December 31,
2020
2019
OPERATING ACTIVITIES:
Net income
$
131.8
$
77.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization and impairments of content
production assets
26.3
35.7
Depreciation and amortization
48.5
39.6
Other amortization
18.0
13.9
Loss on equity investments, net
5.7
3.3
Stock-based compensation
28.0
29.4
(Benefit from) provision for deferred
income taxes
(3.0
)
9.9
Other non-cash adjustments
22.4
8.2
Cash provided by (used in) changes in
operating assets and liabilities:
Accounts receivable
70.0
(41.5
)
Inventory
(1.3
)
(0.5
)
Prepaid expenses and other assets
(12.1
)
2.6
Content production assets
(25.6
)
(34.3
)
Accounts payable, accrued expenses and
other liabilities
5.1
(32.0
)
Deferred income
6.1
10.3
Net cash provided by operating
activities
319.9
121.7
INVESTING ACTIVITIES:
Purchases of property and equipment and
other assets
(27.6
)
(69.1
)
Purchases of short-term investments
(153.9
)
(124.3
)
Proceeds from sales and maturities of
short-term investments
182.3
157.5
Purchase of equity investments
(0.6
)
(1.4
)
Proceeds from sale of investment
securities
11.7
—
Other
—
1.4
Net cash provided by (used in) investing
activities
11.9
(35.9
)
FINANCING ACTIVITIES:
Repayment of debt
(103.6
)
(5.1
)
Repayment of finance leases
(10.8
)
(8.4
)
Dividends paid
(37.2
)
(37.4
)
Debt issuance costs
—
(0.7
)
Proceeds from borrowings under the credit
facility
200.0
—
Taxes paid related to net settlement upon
vesting of equity awards
(11.1
)
(30.2
)
Proceeds from issuance of stock
2.6
2.3
Repurchase and retirement of common
stock
—
(83.4
)
Net cash provided by (used in) financing
activities
39.9
(162.9
)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
371.7
(77.1
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
90.4
167.5
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
462.1
$
90.4
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of
refunds
$
45.6
$
7.4
Cash paid for interest
$
12.3
$
10.7
NON-CASH INVESTING TRANSACTIONS:
Purchases of property and equipment
recorded in accounts payable and accrued expenses
$
4.4
$
5.0
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted Net Income
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31,
2020
2019
As Reported
Loss on
Investments (1)
Other
Adjustments (3)
Adjusted
As Reported
Adjusted
Operating income
$
36.2
$
—
$
1.5
$
37.7
$
99.8
$
99.8
Interest expense
9.1
—
—
9.1
7.9
7.9
Other (expense) income, net
(7.0
)
8.6
—
1.6
1.5
1.5
Income before taxes
20.1
8.6
1.5
30.2
93.4
93.4
Provision for income taxes
6.5
2.8
0.5
9.8
24.1
24.1
Net income
$
13.6
$
5.8
$
1.0
$
20.4
$
69.3
$
69.3
Earnings per share - diluted
$
0.16
$
0.07
$
0.01
$
0.24
$
0.78
$
0.78
Year Ended December
31,
2020
2019
As Reported
Loss on
Investments (2)
Other
Adjustments (3)
Adjusted
As Reported
Adjusted
Operating income
$
208.6
$
—
$
7.0
$
215.6
$
116.5
$
116.5
Interest expense
35.6
—
—
35.6
26.1
26.1
Other expense income, net
(1.9
)
5.7
—
3.8
4.3
4.3
Income before taxes
171.1
5.7
7.0
183.8
94.7
94.7
Provision for income taxes
39.3
1.3
1.6
42.2
17.6
17.6
Net income
$
131.8
$
4.4
$
5.4
$
141.6
$
77.1
$
77.1
Earnings per share - diluted
$
1.56
$
0.05
$
0.06
$
1.68
$
0.85
$
0.85
(1)
During the three months ended December 31,
2020, the Company recognized $8.6 million of losses, primarily
related to $4.4 million of impairment charges coupled with $4.2
million in fair market value adjustments of marketable securities
prior to their sale. The Company did not recognize any such
material net gains or losses, or impairment charges related to its
equity investments during the three months ended December 31,
2019
(2)
During the twelve months ended December
31, 2020, the Company recognized a net loss of $5.7 million related
to certain equity investments, which included $15.9 million of
impairment charges partially offset by $10.2 million in fair market
value adjustments of marketable securities prior to their sale. The
Company did not recognize any such material net gains or losses, or
impairment charges related to its equity investments during the
twelve months ended December 31, 2019
(3)
During the three and twelve months ended
December 31, 2020, the Company recorded severance expense of $1.5
million and $7.0 million, respectively, resulting from a reduction
in force due to COVID-19. The Company did not record any such
expense during the three and twelve months ended December 31,
2019
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted OIBDA
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31, 2020
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other
Adjustments (1)
Adjusted OIBDA
Media
$
67.1
$
3.7
$
2.2
$
—
$
73.0
Live Events
(7.0
)
—
0.3
—
(6.7
)
Consumer Products
8.9
—
0.2
—
9.1
Corporate
(32.8
)
6.7
0.4
1.5
(24.2
)
Total
$
36.2
$
10.4
$
3.1
$
1.5
$
51.2
Three Months Ended December
31, 2019
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
114.6
$
4.5
$
(2.5
)
$
—
$
116.6
Live Events
(1.0
)
—
(0.8
)
—
(1.8
)
Consumer Products
12.8
—
(0.5
)
—
12.3
Corporate
(26.6
)
6.1
1.0
—
(19.5
)
Total
$
99.8
$
10.6
$
(2.8
)
$
—
$
107.6
Year Ended December 31,
2020
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other
Adjustments (1)
Adjusted OIBDA
Media
$
332.5
$
15.1
$
20.2
$
—
$
367.8
Live Events
(19.1
)
—
1.5
—
(17.6
)
Consumer Products
24.8
—
1.8
—
26.6
Corporate
(129.6
)
27.5
4.5
7.0
(90.6
)
Total
$
208.6
$
42.6
$
28.0
$
7.0
$
286.2
Year Ended December 31,
2019
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
190.8
$
12.6
$
20.7
$
—
$
224.1
Live Events
7.7
—
1.7
—
9.4
Consumer Products
26.4
—
2.1
—
28.5
Corporate
(108.4
)
21.5
4.9
—
(82.0
)
Total
$
116.5
$
34.1
$
29.4
$
—
$
180.0
(1)
During the three and twelve months ended
December 31, 2020, the Company recorded severance expense of $1.5
million and $7.0 million, respectively, resulting from a reduction
in force due to COVID-19. The Company’s policy is to include
company-wide severance expense within corporate unallocated general
and administrative expenses. The Company did not record any such
expense during the three and twelve months ended December 31,
2019
World Wrestling Entertainment,
Inc.
Supplemental Information -
Free Cash Flow
(In millions)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Net cash provided by operating
activities
$
62.4
$
119.4
$
319.9
$
121.7
Less cash used for capital
expenditures:
Purchase of property and equipment and
other assets
(6.2
)
(12.8
)
(27.6
)
(69.1
)
Free Cash Flow
$
56.2
$
106.6
$
292.3
$
52.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210204005999/en/
Investors: Michael Weitz 203-352-8642 Michael Guido, CFA
203-352-8779 Media: Matthew Altman 203-352-1177
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