First Quarter 2016
Highlights
- Revenue increased 13% on a pro-forma
basis to $171.1 from $151.3 million in the prior year quarter,
excluding the timing impact of WrestleMania (which occurred in Q2
2016 vs. Q1 2015)
- OIBDA increased 31% to $27.6 million
from the prior year quarter (29% on a pro-forma basis)
- WWE Network averaged 1.29 million paid
subscribers over the first quarter 2016, which represented a 39%
increase from the first quarter 2015, and reached 1.47 million
total subscribers at quarter-end
- WWE’s YouTube channel reached 11
million subscribers and achieved Diamond Play Button status joining
Taylor Swift and Justin Bieber; WWE content garnered 10 billion
YouTube views over the last 12 months
- Announced new series spin-off, Total
Bellas, to debut on E! in Fall 2016 along with the sixth season of
Total Divas. Continued to develop exciting new content for WWE
Network, including Camp WWE (May), Swerved Season 2 (June) and Holy
Foley! (August)
Selected WrestleMania
Highlights
- WrestleMania (April 3, 2016) achieved
record breaking attendance, ticket sales, viewership, and social
media activity
- WrestleMania broke WWE’s attendance
record, attracting 101,763 fans at AT&T Stadium
- WWE Network reached a record 1.82
million total subscribers following WrestleMania (as of April
4)
- During WrestleMania Week, WWE Network
featured 19 hours of prime-time, premier programming and
subscribers watched nearly 22 million hours of content, averaging
12 hours per subscriber
- WrestleMania generated more
than 2.5 million mentions on Twitter in one day and over
250 million video views across WWE digital and social
platforms during WrestleMania Week
WWE (NYSE:WWE) today announced financial results for its first
quarter 2016. For the quarter, the Company reported Net income of
$13.9 million, or $0.18 per share, as compared to Net income of
$9.8 million, or $0.13 per share, in the prior year quarter.
“Our strong performance in the first quarter reflected the
successful execution of our content strategy,” said WWE Chairman
& CEO Vince McMahon. “The sustained year-over-year growth of
WWE Network, the global consumption of our video content across all
platforms, and the recent record breaking attraction of
WrestleMania demonstrate the increasing strength of our brands. We
believe we can continue to leverage these strengths to drive
long-term growth.”
George Barrios, Chief Strategy & Financial Officer, added
“Our earnings growth was driven primarily by the increased
monetization of our network and television content as well as
higher licensing revenue from our franchise video game. Over the
next year, we will continue to focus on producing engaging content
across all platforms, investing in emerging markets, and deploying
technology across the enterprise to drive our long-term
growth.”
Q2 2016 Business Outlook
For the second quarter 2016, the Company projects average paid
subscribers of approximately 1.5 million. The Company also
estimates second quarter 2016 Adjusted OIBDA of approximately $5
million to $9 million.1,2 This range represents an expected
year-over-year decrease attributed to three primary factors:
incremental strategic investments, the timing impact of
WrestleMania production costs, and the timing of a lower effective
royalty rate associated with the Company’s franchise video game.
(The lower video game royalty rate derives from an increasing rate
structure over the 2015 year as compared to a flat rate structure
in 2016. For the full year, the Company expects the rate for 2016
will be comparable to the average effective rate for 2015).
(1) The definition of Adjusted OIBDA can be found in the
Supplemental Information in this release.
(2) Reconciliation of Q2 2016 Operating Income to Adjusted OIBDA
can be found in the Supplemental Information in this release.
2016 Perspective
The range of financial performance projected for the second
quarter would result in Adjusted OIBDA for the first half of 2016
that is essentially flat to the prior year period. The Company
anticipates year-over-year growth in Adjusted OIBDA over the second
half of 2016.
WWE management has previously indicated that if the average paid
subscribers to WWE Network increases at a rate between 20% and 25%
in 2016, 2016 Adjusted OIBDA could be in a range of approximately
$70 million to $85 million. If recent overarching trends regarding
the acquisition and retention of subscribers continue over the
remainder of 2016, management believes average paid subscriber
growth and 2016 Adjusted OIBDA would be at the upper end of these
ranges. The range of 2016 Adjusted OIBDA assumes the previously
communicated incremental investment of $15 million to $20 million
in content, technology and emerging markets. As recent historical
data may not offer a comparable basis for projecting future results
and future results may differ from the range provided, management
offers these ranges of 2016 subscriber and financial performance to
provide further perspective rather than as guidance.
Comparability of Results
WrestleMania 32 occurred on April 3, 2016 and will be included
in second quarter 2016 results, whereas the comparable prior year
event occurred on March 29, 2015 and was included as part of first
quarter 2015 results. The impact of WrestleMania on WWE Network
profits in the first quarter of 2015 was not material since a
significant portion of the subscriber growth occurred in late
March. Therefore, the timing impact of the event on first quarter
2015 results is best estimated by measuring the direct contribution
the event generated from ticket, merchandise and pay-per-view sales
and production costs (excluding any attribution from WWE Network).
In aggregate, these items increased first quarter 2015 revenue by
$24.9 million and reduced OIBDA by $0.4 million with no net impact
on EPS. Refer to the Supplemental Information - Pro Forma Income
Statement & Reconciliation to GAAP Measures on page 12 for a
pro-forma analysis excluding WrestleMania from first quarter 2015
results.
Three Months Ended March 31, 2016 -
Results Overview
Revenues decreased 3% to $171.1 million primarily due to the
timing impact of WrestleMania. (On a pro-forma basis, excluding
this timing impact, the Company’s overall revenues increased 13%
from the prior year quarter.) Reflecting the current quarter
absence of WrestleMania ticket revenue, North American revenues
decreased 7% from the prior year quarter. The decline was partially
offset by growth of WWE Network subscribers and the escalation of
television rights fees, as reflected in the Company’s Media
Division, as well as higher video game revenue. Revenues from
outside North America increased 14% driven by the increased
monetization of content, as reflected in the Media Division, and by
higher live event and video game revenue across the EMEA
region.
The following tables reflect net revenues by region and net
revenues and OIBDA by division/segment (in millions):
Three Months Ended
March 31, 2016 2015
Net Revenues By
Region:
North America $ 130.0 $ 140.3 Europe/Middle East/Africa (EMEA) 27.6
21.6 Asia Pacific (APAC) 11.6 12.0 Latin America 1.9
2.3 Total net revenues $ 171.1 $ 176.2
Net Revenues OIBDA
Three Months Ended March 31, Three Months Ended March
31, 2016 2015 2016 2015
Division/Segment Media Division Network $ 40.3 $ 37.6
$ 15.8 $ (1.5) Television 60.7 58.2 28.3 25.9 Home Entertainment
3.3 4.7 1.5 2.1 Digital Media 5.4 4.3 (0.1) (0.1)
Live
Events 25.3 39.3 6.1 17.6
Consumer Products Licensing
21.0 16.5 14.3 10.8 Venue Merchandise 5.5 8.4 2.0 3.2 WWEShop 6.8
5.3 1.4 1.1
WWE Studios 2.0 1.5 (0.4) (0.4)
Corporate
& Other 0.8 0.4 (41.3) (37.7)
Total $ 171.1 $ 176.2 $ 27.6 $ 21.0
Three Months Ended March 31, 2016 –
Segment Performance Commentary
The year-over-year changes in the Company’s financial
performance were driven by its Network, Television, Live Events,
Licensing, and Corporate & Other business segments. A
discussion of other business segments has been excluded from the
narrative below. Refer to our first quarter 2016 Form 10-Q for
management’s discussion and analysis of financial condition and
results of operations pertaining to all of our segments.
Media Division
Revenues from the Company's Media division increased 5%, to
$109.7 million, primarily due to the growth of WWE Network and the
contractual escalation of television rights fees.
- Network revenues, which include
revenue generated by WWE Network and pay-per-view, increased 7% to
$40.3 million.
WWE Network revenue increased 34% to $38.2 million from $28.6
million in the prior year quarter based on a 39% year-over-year
increase in average paid subscribers to 1.29 million. WWE Network
had 1.47 million total subscribers at the end of the first quarter
and reached a record 1.82 million total subscribers following
WrestleMania (as of April 4, 2016), which represented a 39%
increase from March 30, 2015, the day after WrestleMania last year.
An anticipated decline in Pay-per-view revenue partially offset WWE
Network growth.
The Company continued to broaden the distribution of WWE
Network, which was made available during the first quarter in
Germany, Austria, Switzerland, Japan, Thailand and the Philippines.
The Company continues to work on launch plans for China. WWE
Network had 362,000 total international subscribers at quarter-end
and 434,000 as of April 4, 2016.
The following table provides WWE Network subscriber
performance3,4
As of / Three Month
Ended As of March 31, March 31, Dec.
31, 2016 2015 2015
Ending Total
Subscribers
1,469 1,327 1,272
Ending Paid
Subscribers
U.S. 1,027 1,131 940 International 330 196 277 Total paid
subscribers 1,357 1,327 1,217
Average Paid
Subscribers
Quarter 1,289 927 1,237 Year-to-date 1,289 927 1,139
(3) Metrics reflect subscribers who are direct customers of WWE
Network and subscribers reported under licensed partner agreements,
which have different economic terms for the network.
(4) 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.
WWE Network’s content including the Company’s premier event,
WrestleMania (April 3, 2016), other pay-per-views, original series,
NXT Takeover, and specials have continued to drive viewer
engagement. The Company expects to add more than 300 hours of
original content to the network’s featured programming in 2016, and
more than 1,500 hours of archival content to the network, which
would result in an on-demand library of nearly 6,000 hours at
year-end 2016.
- Television revenues increased 4%
to $60.7 million from $58.2 million in the prior year quarter
primarily due to contractual increases in key distribution
agreements, the largest of which became effective in the fourth
quarter 2014 and the first quarter 2015. The increase in revenue
also reflected an additional episode of the licensed original
series Total Divas (the series aired 11 episodes in Q1 2016 vs. 10
episodes in Q1 2015).
Live Events
Live Event revenues decreased 36% to $25.3 million primarily due
to the timing of the Company's annual WrestleMania event, which
occurred in the second quarter 2016 as compared to the first
quarter 2015. (Excluding this timing impact, Live Event revenues
increased 7% from $23.6 million in the prior year quarter.)
- There were 78 total events (excluding
NXT) in the current quarter, including 72 events in North America
and 6 events in international markets, as compared to 76 events in
the prior year quarter, including 73 events in North America and 3
in international markets.
- North American live event revenues
decreased to $22.8 million from $38.3 million in the prior year
quarter, driven by the timing of WrestleMania, which generated
revenue of approximately $15.7 million in the prior year quarter.
Excluding the impact of WrestleMania, revenue from the Company’s
North American live events was essentially flat as a 6% increase in
average ticket prices to $47.79 was offset by a 9% decline in
average attendance to 6,100 fans, where the latter was
attributable, in part, to changes in venue mix.
- International live event revenue
increased $1.5 million to $2.5 million as compared to the prior
year quarter reflecting the staging of 3 additional events and the
performance of events in Germany and India. The Company’s
international events generated nearly a fourfold increase in
average international attendance to 7,700 fans, which was partially
offset by a 74% decline in the average effective ticket price to
$45.09. The decline in the average ticket price reflected changes
in territory mix. The prior year quarter had three events in Abu
Dhabi, an international market that has historically garnered
higher ticket prices.
Consumer Products
Revenues from Consumer Products increased 10% to $33.3 million
primarily due to higher revenue from the Company’s licensed
merchandise business. Licensing revenues increased 27% to $21.0
million primarily due to higher video game revenue in domestic and
international markets, which derived from higher effective royalty
rates than in the prior year quarter.
Corporate and Other
Corporate and Other expenses increased to $42.1 million in the
current year quarter from $38.1 million in the prior year quarter.
As defined, these expenses include corporate G&A expenses as
well as sales, marketing, and talent development costs, which are
not allocated to specific segments. The $4.0 million rise in
Corporate & Other expense was primarily due to increases in
Business Support costs, including certain talent expenses.
Corporate G&A expenses were essentially flat to the prior year
quarter.
Operating Income Before Depreciation
and Amortization (OIBDA)5
OIBDA reached $27.6 million as compared to $21.0 million in the
prior year quarter. Although, the timing of WrestleMania did not
have a material impact on the Company’s overall results, it did
impact the results of individual business segments in the first
quarter 2015.6 Specifically, the prior year event reduced Media
division OIBDA7 by $12.7 million as the event’s production costs
more than offset its related pay-per-view and sponsorship revenue,
and the event increased Live Event and Consumer Products OIBDA by
$12.3 million on a combined basis from ticket and merchandise
sales. Excluding the timing impact of WrestleMania, the $6.2
million increase in OIBDA was driven by the growth of WWE Network,
the escalation of television rights fees and higher profits from
the licensing of consumer products. Network segment OIBDA increased
$3.7 million on a pro-forma basis primarily due to growth in
subscription revenue. Television OIBDA increased $3.3 million
(pro-forma) due to increased fees in key distribution agreements.
Licensing OIBDA increased $3.4 million with higher effective
royalty rates for the Company’s franchise video game. These growth
drivers were partially offset by a $4.0 million increase in
Corporate and Other expenses as described above. With growth in its
high margin businesses, the Company's overall OIBDA margin improved
to 16% in the current year quarter as compared to 12% (14% on a pro
forma basis) in the prior year quarter.
(5) See Schedules of Adjustments in Supplemental Information on
page 11.
(6) Refer to the Supplemental Information - Pro Forma Income
Statement & Reconciliation to GAAP Measures on page 12 for a
pro-forma analysis excluding WrestleMania from first quarter 2015
results.
(7) Beginning in January 2016, the Company started allocating
certain shared expenses between its Network and Television
segments. Management believes this allocation more accurately
reflects the operations of these segments. For the first quarter
2016, the implementation of this allocation methodology reduced
Network segment OIBDA by $3.3 million and increased Television
segment OIBDA by a corresponding $3.3 million. The allocation
methodology had no impact on the Company’s consolidated financial
statements.
Cash Flows &
Liquidity
Cash flows generated by operating activities were $1.5 million
in the first quarter 2016 as compared to $14.3 million in the prior
year quarter. The $12.8 million decline reflected increased
operating profits that were more than offset by an increase in the
annual payout of management incentive compensation.
Purchases of property and equipment and other assets increased
by $1.0 million from the prior year period.
As of March 31, 2016, the Company held $87.6 million in
cash and short-term investments and estimates debt capacity under
the Company's revolving line of credit of approximately $200
million. The term of the Company’s Revolving Credit Facility
currently ends in September 2016. The Company is evaluating its
plans to renew or replace the facility.
Additional Information
Additional business metrics are made available to investors on
the corporate website - ir.corporate.wwe.com. Note: As previously
announced WWE will host a conference call at 11:00 a.m. ET on May
10th to discuss the Company's earnings results for the first
quarter of 2016. All interested parties are welcome to listen to a
live web cast that will be hosted through the Company’s web site at
ir.corporate.wwe.com. Participants can access the conference call
by dialing 1-855-200-4993 (toll free) or 1-913-489-5104 from
outside the U.S. (conference ID for both lines: 954961). 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 May 10, 2016 at ir.corporate.wwe.com. A replay of
the call will be available approximately two hours after the
conference call concludes, and can be accessed on the Company’s web
site.
About WWE
WWE, a publicly traded company (NYSE:WWE), is an integrated
media organization and recognized leader in global entertainment.
The company consists of a portfolio of businesses that create and
deliver original content 52 weeks a year to a global audience. WWE
is committed to family friendly entertainment on its television
programming, pay-per-view, digital media and publishing platforms.
WWE programming reaches more than 650 million homes worldwide in 25
languages. WWE Network, the first-ever 24/7 over-the-top premium
network that includes all live pay-per-views, scheduled programming
and a massive video-on-demand library, is currently available in
more than 180 countries. The company is headquartered in Stamford,
Conn., with offices in New York, Los Angeles, London, Mexico City,
Mumbai, Shanghai, Singapore, Dubai, Munich and Tokyo.
Additional information on WWE (NYSE: WWE) can be found at
wwe.com and corporate.wwe.com. For information on our global
activities, go to http://www.wwe.com/worldwide/
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains forward-looking statements pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of
1995, which are subject to various risks and uncertainties. These
risks and uncertainties include, without limitation, risks relating
to: WWE Network; major distribution agreements; 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;
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 relating to CTE; 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 revolving credit facility; 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 relatively small public
“float” of our Class A common stock. In addition, our dividend is
dependent on a number of factors, including, among other things,
our liquidity and historical and projected cash flow, strategic
plan (including alternative uses of capital), our financial results
and condition, contractual and legal restrictions on the payment of
dividends (including under our revolving credit facility), general
economic and competitive conditions and such other factors as our
Board of Directors may consider relevant. Forward-looking
statements made by the Company speak only as of the date made and
are subject to change without any obligation on the part of the
Company to update or revise them. Undue reliance should not be
placed on these statements. For more information about risks and
uncertainties associated with the Company’s business, please refer
to the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Risk Factors” sections of the
Company’s SEC filings, including, but not limited to, our annual
report on Form 10-K and quarterly reports on Form 10-Q.
World Wrestling Entertainment,
Inc.
Consolidated Income Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
March 31, 2016 2015 Net revenues $ 171.1 $
176.2 Cost of revenues 93.3 109.7 Selling, general and
administrative expenses 50.2 45.5 Depreciation and amortization
5.6 5.9 Operating income 22.0 15.1
Investment income, net 0.6 0.2 Interest expense (0.6) (0.5) Other
expense, net (0.6) (0.3) Income before income taxes
21.4 14.5 Provision for income taxes 7.5 4.7 Net
income $ 13.9 $ 9.8 Earnings per share: Basic and diluted $
0.18 $ 0.13 Weighted average common shares outstanding:
Basic 75.9 75.5 Diluted 77.1 76.0 Dividends declared per common
share (Class A and B) $ 0.12 $ 0.12
World Wrestling Entertainment,
Inc.
Consolidated Balance Sheets
(In millions)
(Unaudited)
As of March 31, December 31,
2016 2015 ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 23.2 $ 38.0 Short-term investments, net 64.4 64.4
Accounts receivable, net 50.1 58.4 Inventory 7.8 6.2 Prepaid
expenses and other current assets 19.2 12.8 Total
current assets 164.7 179.8 PROPERTY AND EQUIPMENT,
NET 106.3 105.2 FEATURE FILM PRODUCTION ASSETS, NET 28.3 26.4
TELEVISION PRODUCTION ASSETS, NET 10.2 11.4 INVESTMENT SECURITIES
22.4 22.3 NON-CURRENT DEFERRED INCOME TAX ASSETS 42.8 44.7 OTHER
ASSETS, NET 19.8 19.3 TOTAL ASSETS $ 394.5 $ 409.1
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Current portion of long-term debt $ 4.5 $ 4.4 Accounts payable and
accrued expenses 52.9 70.0 Deferred income 58.4 57.2
Total current liabilities 115.8 131.6 LONG-TERM DEBT
16.0 17.1 NON-CURRENT INCOME TAX LIABILITIES 1.0 1.1 NON-CURRENT
DEFERRED INCOME 43.7 50.0 Total liabilities
176.5 199.8 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’
EQUITY: Class A common stock 0.3 0.3 Class B convertible common
stock 0.4 0.4 Additional paid-in capital 373.4 369.7 Accumulated
other comprehensive income 3.2 3.0 Accumulated deficit
(159.3) (164.1) Total stockholders’ equity 218.0
209.3 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 394.5 $
409.1
World Wrestling Entertainment,
Inc.
Consolidated Statements of Cash
Flows
(In millions)
(Unaudited)
Three Months Ended March 31, 2016
2015 OPERATING ACTIVITIES: Net income $ 13.9 $ 9.8
Adjustments to reconcile net income to net cash(used in)/provided
by operating activities: Amortization and impairments of feature
film production assets 1.1 0.7 Amortization of television
production assets 8.1 6.8 Depreciation and amortization 6.7 6.9
Services provided in exchange for equity instruments (0.8) (0.1)
Equity in earnings of affiliate, net of dividends received (0.1) —
Other amortization 0.6 0.5 Stock-based compensation 3.2 2.5
Provision for (recovery from) doubtful accounts (0.1) 0.2 (Benefit
from) provision for deferred income taxes 1.9 (6.8) Other non-cash
adjustments 0.1 — Cash (used in)/provided by changes in operating
assetsand liabilities: Accounts receivable 8.5 (15.1) Inventory
(1.6) (1.2) Prepaid expenses and other assets (8.5) (0.5) Feature
film production assets (3.0) (1.5) Television production assets
(7.0) (3.4) Accounts payable, accrued expenses and other
liabilities (17.3) 18.7 Deferred income (4.2) (3.2)
Net cash provided by operating activities 1.5 14.3
INVESTING ACTIVITIES: Purchases of property and equipment and other
assets (6.7) (5.7) Purchases of short-term investments — (4.6)
Proceeds from sales and maturities of investments — 6.1 Purchase of
equity investments — (0.7) Net cash used in investing
activities (6.7) (4.9) FINANCING ACTIVITIES:
Repayment of long-term debt (1.1) (1.1) Dividends paid (9.1) (9.1)
Proceeds from issuance of stock 0.6 0.5 Net cash used
in financing activities (9.6) (9.7) NET DECREASE IN
CASH AND CASH EQUIVALENTS (14.8) (0.3) CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 38.0 47.2 CASH AND CASH
EQUIVALENTS, END OF PERIOD $ 23.2 $ 46.9 NON-CASH INVESTING
TRANSACTIONS: Non-cash purchase of property and equipment $ 1.0 $
1.2 Non-cash purchase of investment securities $ — $ 13.8
World Wrestling Entertainment,
Inc.
Supplemental Information – Schedule of
Adjustments
(In millions, except per share
data)
(Unaudited)
Three Months Ended March 31, 2016
2015 Operating income $ 22.0 $ 15.1 Investment,
interest and other income, net (0.6) (0.6) Income
before taxes 21.4 14.5 Provision for income taxes 7.5
4.7
Net income $ 13.9 $ 9.8 Earnings per share $ 0.18 $ 0.13
Reconciliation of Operating income to OIBDA Operating income
$ 22.0 $ 15.1 Depreciation & amortization 5.6 5.9
OIBDA $ 27.6 $ 21.0
Non-GAAP Measures:
We define OIBDA as operating income before depreciation
and amortization, excluding feature film and television production
amortization and related impairments. OIBDA is a non-GAAP financial
measure and may be different than similarly-titled non-GAAP
financial measures used by other companies. A limitation of OIBDA
is that it excludes depreciation and amortization, which represents
the periodic charge for certain fixed assets and intangible assets
used in generating revenues for the Company's business. OIBDA
should not be regarded as an alternative to operating income or net
income as an indicator of operating performance, or to the
statement of cash flows as a measure of liquidity, nor should it be
considered in isolation or as a substitute for financial measures
prepared in accordance with GAAP. We believe that operating income
is the most directly comparable GAAP financial measure to
OIBDA.
Adjusted OIBDA, Adjusted Operating income, Adjusted Net
income and Adjusted Earnings per share exclude certain material
items, which otherwise would impact the comparability of results
between periods. These should not be considered as an alternative
to net income, cash flows from operations or any other indicator of
WWE's performance or liquidity, determined in accordance with U.S.
GAAP.
World Wrestling Entertainment,
Inc.
Supplemental Information – Pro Forma
Income Statement & Reconciliation to GAAP Measures
Pro Forma Excludes Timing Impact of
WrestleMania 31
(In millions, except per share
data)
(Unaudited)
Revenues
Q1 2016Reported
Q1 2015Reported
Q1 2015 WM 31 Timing
Q1 2015 Pro forma
Media
Division
Pay-per-view $ 2.1 $ 9.0 $ (4.9) $ 4.1 Subscriptions 38.2
28.6 — 28.6 Network 40.3 37.6
(4.9) 32.7 Television 60.7 58.2 (1.0) 57.2 Home
Entertainment 3.3 4.7 — 4.7 Digital Media 5.4 4.3
— 4.3
Media Division 109.7 104.8
(5.9) 98.9
Live Events 25.3 39.3 (15.7) 23.6
Consumer Products
Division
Licensing 21.0 16.5 — 16.5 Venue Merchandise 5.4 8.4 (3.3) 5.1 WWE
Shop 6.8 5.3 — 5.3
Consumer Products
Division 33.3 30.2 (3.3) 26.9
WWE Studios 2.0 1.5 — 1.5
Corporate and Other
0.8 0.4 — 0.4
Total Revenues $ 171.1 $
176.2 $ (24.9) $ 151.3
OIBDA:
Media Division $ 45.5 $ 26.4 $ 12.7 $ 39.1 Live Events 6.1 17.6
(11.1) 6.5 Consumer Products Division 17.7 15.1 (1.2) 13.9 WWE
Studios (0.4) (0.4) — (0.4) Corporate and Other (41.3)
(37.7) — (37.7)
OIBDA 27.6
21.0 0.4 21.4 Depreciation & amortization
(5.6) (5.9) — (5.9)
Operating
income 22.0 15.1 0.4 15.5 Interest
and other, net (0.6) (0.6) — (0.6)
Income before taxes 21.4 14.5 0.4 14.9 Provision for income
taxes 7.5 4.7 0.1 4.8
Net income
$ 13.9 $ 9.8 $ 0.3 $ 10.1 EPS - basic and diluted $ 0.18 $
0.13 $ — $ 0.13
The impact of WrestleMania is measured using a pro forma
statement rather than as an adjusting item to the Company’s
reported results because adjustments to the Company’s financial
measures are limited by definition to items that are difficult to
predict and are considered unusual or non-recurring in nature. As
defined, adjusted financial measures would exclude certain material
items, including but not limited to, non-cash impairments of film,
intangible and fixed assets, gains and losses on asset sales, as
well as material restructuring charges. No such items were reported
in or have been adjusted from first quarter 2016 or first quarter
2015 results.
World Wrestling Entertainment,
Inc.
Supplemental Information -
Reconciliation of Q2 2016 Business Outlook
(In millions, except per share
data)
(Unaudited)
Reconciliation of Q2 2016 Operating
income to Adjusted OIBDA
Operating
(Loss)/Income
Depreciation OIBDA Adjustments
to OIBDA
AdjustedOIBDA $(1) - $3 $6 $5 - $9 $- $5 - $9
Non-GAAP Measures:
We define OIBDA as operating income before depreciation
and amortization, excluding feature film and television production
asset amortization and impairments. OIBDA is a non-GAAP financial
measure and may be different than similarly-titled non-GAAP
financial measures used by other companies. A limitation of OIBDA
is that it excludes depreciation and amortization, which represents
the periodic charge for certain fixed assets and intangible assets
used in generating revenues for the Company's business. OIBDA
should not be regarded as an alternative to operating income or net
income as an indicator of operating performance, or to the
statement of cash flows as a measure of liquidity, nor should it be
considered in isolation or as a substitute for financial measures
prepared in accordance with GAAP. We believe that operating income
is the most directly comparable GAAP financial measure to
OIBDA.
Adjusted OIBDA, Adjusted Operating income, Adjusted Net
income and Adjusted Earnings per share exclude certain material
items, which otherwise would impact the comparability of results
between periods. These items include, but are not limited to,
non-cash impairments of film, intangible and fixed assets, gains
and losses on asset sales, as well as material restructuring
charges. The adjusted measures should not be considered as an
alternative to net income, cash flows from operations or any other
indicator of WWE's performance or liquidity, determined in
accordance with U.S. GAAP.
World Wrestling Entertainment,
Inc.
Supplemental Information - Free Cash
Flow
(In millions)
(Unaudited)
Three Months Ended
March 31, 2016 2015 Net cash provided by
operating activities $ 1.5 $ 14.3 Less cash used for capital
expenditures: Purchase of property and equipment and other
assets(excluding corporate aircraft) (6.7) (5.7) Free
Cash Flow $ (5.2) $ 8.6
Non-GAAP Measure:
We define Free Cash Flow as net cash provided by
operating activities less cash used for capital expenditures.
Although it is not a recognized measure of liquidity under U.S.
GAAP, Free Cash Flow provides useful information regarding the
amount of cash our continuing business is generating after capital
expenditures, available for reinvesting in the business, debt
service, and payment of dividends.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160510005600/en/
WWEInvestors:Michael Weitz,
203-352-8642Laura Kiernan, 203-328-2519orMedia:Matt Altman, 203-352-1177
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