Fourth Quarter 2021
Highlights
- Revenue increased 30% to $310.3 million
- Operating income increased 131% to $83.6 million
- Adjusted OIBDA1 increased 90% to $97.2 million
- Returned capital to shareholders totaling $59.0 million,
including share repurchases and dividends paid
Full Year 2021
Highlights
- Revenue increased 12% to $1.095 billion, the highest in the
Company’s history
- Operating income increased 24% to $259.0 million
- Adjusted OIBDA1 increased 14% to a record $327.1 million
- Launched WWE Network content on Peacock, NBCU’s streaming
service in the U.S., providing a larger audience and increasing
viewership for WWE’s premium live shows, original series, and vast
library
- Announced a new strategy for premium live events, which focuses
on staging these events in stadiums rather than arenas, and
utilizes targeted dates to maximize WWE’s live audience
potential
- Completed consumer product deals including partnerships with
Blockchain Creative Labs (Fox) to launch an NFT marketplace and
with Panini to be the exclusive provider of WWE trading cards
- Created the Next in Line program to recruit the next generation
of WWE Superstars, which was initiated with 16 collegiate athletes,
including Olympic gold medalist Gable Steveson
- Returned capital to shareholders totaling $202.0 million,
including share repurchases and dividends paid
2022 Business Outlook2
- The Company outlines its expectations for 2022, which assume
ticketed audiences at the Company’s live events for the full year,
and target record revenue and an Adjusted OIBDA range of $360 -
$375 million, which would be an all-time record. This range of
anticipated performance reflects the continued ramp-up of live
events, including large-scale international events, and increased
monetization of content, partially offset by increased production,
content-related, and other expenses.
- Management believes WWE is well positioned to capitalize on
significant future opportunities. In 2022, key initiatives that
could have meaningful implications for long-term growth include the
licensing of WWE Network in international markets, monetization of
new original series, the licensing of Raw second window rights,
further progress with sponsorship sales, and the continued
execution of WWE’s stadium strategy for premium live events.
(See 2022 Business Outlook discussion on pages 8-9 for
additional information)
WWE (NYSE: WWE) today announced financial results for its fourth
quarter and year ended December 31, 2021.
“In 2021, we reached a significant milestone of over $1 billion
in revenue, for the first time in the Company’s history. We ended
the year with strong performance across each of our business lines
that reflected the engagement of a wider audience with distribution
on new digital platforms, including Peacock, and the return of fans
at our live events,” said Vince McMahon, WWE Chairman & CEO.
“We expect the execution of key initiatives in the coming year,
such as the licensing of network content in international markets,
monetization of new original series, and the continued shift to a
stadium strategy for WWE’s premium live events, will further expand
the reach of our brands and enhance the value of our content.”
Frank Riddick, WWE Chief Financial and Administrative Officer,
added “For the year, we achieved record revenue and Adjusted OIBDA,
which exceeded the high end of our guidance. Adjusted OIBDA
increased 14% reflecting higher revenue and profit from the
distribution of network programming on Peacock, the contractual
escalation of rights fees for our flagship shows, Raw and
SmackDown, and the return of ticketed audiences to our live events.
In 2022, we anticipate Adjusted OIBDA of $360 million to $375
million, reflecting the full year performance of our ticketed live
events as well as the increased production and monetization of
content.”
Fourth-Quarter Consolidated
Results
Revenue increased 30% to $310.3 million, primarily due to
the impact of a large-scale international event as well as higher
ticket and venue merchandise sales resulting from the return to
ticketed live events, which began in July 2021.
Operating Income increased 131%, or $47.4 million, to
$83.6 million, driven by the impact of the Company’s large-scale
international event, and, to a lesser extent, the return to other
ticketed live events, which was partially offset by an increase in
management incentive compensation costs associated with the
Company’s improved operating performance. The Company’s Operating
income margin increased to 27% from 15%.
Adjusted OIBDA (which excludes stock compensation)
increased 90%, or $46.0 million, to $97.2 million. The Company’s
Adjusted OIBDA margin increased to 31% from 21%.
Net Income was $63.9 million, or $0.76 per diluted share,
an increase from $13.6 million, or $0.16 per diluted share,
primarily reflecting higher operating performance. The results for
the fourth quarter of 2021 also reflected an after-tax gain of $5.2
million from the reduction of leased space as part of an amendment
to the Company’s new Stamford headquarters lease. The results for
the fourth quarter of 2020 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 Income3 was $58.7
million, or $0.70 per diluted share, as compared to $20.4 million,
or $0.24 per diluted share.
Cash flows generated by operating activities were $42.3
million, a decrease from $62.4 million, as higher net income was
more than offset by a decrease in non-cash adjustments, as well as
the timing of collections associated with large-scale international
events.
Free Cash Flow was $27.5 million, a decrease from $56.2
million, primarily due to the change in operating cash flow and, to
a lesser extent, an increase in capital expenditures.4
Return of Capital to
Shareholders
The Company returned $59.0 million to shareholders in the fourth
quarter of 2021, including $50.0 million in share
repurchases and $9.0 million in dividends paid. Under
the Company’s existing stock repurchase program, approximately 1.0
million shares were repurchased at an average price of $50.73 per
share.
Full Year 2021 Consolidated
Results
Revenue increased 12%, or $121.0 million, to nearly $1.1
billion, driven by higher ticket and venue merchandise sales that
resulted from the Company’s return to ticketed live events for a
portion of the year, including WrestleMania and SummerSlam. The
growth in revenue also reflected the contractual escalation of core
content rights fees associated with the distribution of the
Company’s flagship programs, Raw and SmackDown, and an increase in
network revenue, which stemmed primarily from the upfront revenue
recognition related to the delivery of certain WWE Network
intellectual property rights to Peacock in the first quarter.
Operating Income increased 24%, or $50.4 million, to
$259.0 million, as the growth in revenue was partially offset by
higher television and event-related production expense related to
the Company’s weekly, in-ring content, as well as WrestleMania and
SummerSlam. Prior to the resumption of live event touring in July
2021, the Company produced its weekly, televised programs utilizing
the higher cost environment of WWE ThunderDome at Tropicana Field
and Yuengling Center in Tampa, Florida. During the prior year, WWE
produced a significant portion of weekly, televised content from
its lower production cost performance center in Orlando. Operating
income was also impacted by higher staff related costs, including
severance and management incentive compensation, the latter
resulting from improved operating performance in the current year.
The Company’s Operating income margin increased to 24% from
21%.
Adjusted OIBDA (which excludes stock compensation)
increased 14%, or $40.9 million, to $327.1 million. The increase in
Adjusted OIBDA is less than the increase in Operating Income
because the latter benefited from lower stock compensation expense
in the current year. The Company’s Adjusted OIBDA margin increased
to 30% from 29%.
Net Income increased to $180.4 million, or $2.12 per
diluted share, from $131.8 million, or $1.56 per diluted share,
primarily due to stronger operating performance. The results for
2021 also reflected $6.3 million in after-tax severance expense
associated with the combination of WWE’s television, digital and
studios teams into one organization, partially offset by an
after-tax gain of $5.2 million from the reduction of leased space
as part of an amendment to the Company’s new Stamford headquarters
lease. The results for 2020 reflected $5.4 million in after-tax
severance expense and an after-tax net loss of $4.4 million related
to certain investment securities. Excluding these items, Adjusted
Net Income3 was $181.5 million, or $2.14 per diluted share, as
compared to $141.6 million, or $1.68 per diluted share.
Cash flows generated by operating activities were $178.6
million, a decrease from $319.9 million, as higher net income was
more than offset by a decrease in non-cash adjustments, as well as
the timing of collections associated with the Company’s large-scale
international events and WWE Network revenues.
Free Cash Flow was $139.4 million, a decrease from $292.3
million, primarily driven by the decrease in operating cash flow
and, to a lesser extent, an increase in capital expenditures.4
Cash, cash equivalents and short-term investments were
$416 million as of December 31, 2021. The Company currently
estimates debt capacity under its revolving line of credit
of $200 million.
Return of Capital to
Shareholders
The Company returned $202.0 million to shareholders in 2021,
including $165.6 million in share repurchases and $36.4
million in dividends paid. Under the Company’s existing
stock repurchase program, 4.6 million shares have been repurchased
to-date at an average price of $53.57 per share, resulting in
approximately $251 million remaining available for repurchase
pursuant to the Company’s $500 million authorization. WWE intends
to continue opportunistic repurchases under the program.
Basis of Presentation
For the fourth quarter of 2021, the Company’s consolidated
pre-tax results included the impact of a $6.7 million gain from the
reduction of leased space as part of an amendment to its new
Stamford headquarters lease. For the twelve-month period ended
December 31, 2021, the Company’s consolidated pre-tax results
included $8.1 million in severance expense associated with the
combination of WWE’s television, digital and studios teams into one
organization. A reconciliation of Net Income to Adjusted Net Income
for the three and twelve-month periods ended December 31, 2021 and
2020 can be found in the supplemental schedule on page 16 of this
release.
The schedule below reflects WWE’s performance by operating
segment (in million):1
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Net Revenue:
Media
$
257.6
$
210.5
$
936.2
$
868.2
Live Events
20.1
0.7
57.8
19.9
Consumer Products
32.6
27.0
101.2
86.1
Total Net Revenue
$
310.3
$
238.2
$
1,095.2
$
974.2
Operating Income (Loss):
Media
$
106.3
$
67.1
$
363.4
$
332.5
Live Events
1.4
(7.0
)
6.9
(19.1
)
Consumer Products
12.5
8.9
33.8
24.8
Corporate
(36.6
)
(32.8
)
(145.1
)
(129.6
)
Total Operating Income
$
83.6
$
36.2
$
259.0
$
208.6
Adjusted OIBDA:
Media
$
112.1
$
73.0
$
390.5
$
367.8
Live Events
1.6
(6.7
)
7.7
(17.6
)
Consumer Products
12.9
9.1
35.5
26.6
Corporate
(29.4
)
(24.2
)
(106.6
)
(90.6
)
Total Adjusted OIBDA
$
97.2
$
51.2
$
327.1
$
286.2
Results by Operating
Segment
Media
Fourth-Quarter 2021
Revenue increased 22%, or $47.1 million, to $257.6
million, primarily due to the impact of a large-scale international
event and, to a lesser extent, the contractual escalation of
domestic core content rights fees for the Company’s flagship
programs, Raw and SmackDown. These factors were partially offset by
a decrease in network revenue, driven by the timing of revenue
recognized with the delivery of WWE Network content to Peacock in
the current year quarter as compared to subscription revenue in the
prior year quarter.
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Media Revenue:
Network (including pay-per-view) (a)
$
31.4
$
45.0
$
215.4
$
185.7
Core content rights fees (b)
153.0
139.8
575.8
538.3
Advertising and sponsorship (c)
21.1
16.5
71.5
65.3
Other (d)
52.1
9.2
73.5
78.9
Total Revenue
$
257.6
$
210.5
$
936.2
$
868.2
(a) Network revenue consists primarily of license fees
associated with the distribution of WWE Network content on the
Peacock service in the U.S. (effective March 18, 2021), as well as
subscription fees from customers of WWE Network and license fees
associated with the Company’s international licensed partner
agreements. Network revenue for the twelve-month period ended
December 31, 2021, includes the upfront revenue recognition related
to the delivery of certain WWE Network intellectual property rights
to Peacock in the first quarter.
(b) Core content rights fees consist primarily of licensing
revenue from the distribution of the Company’s flagship programs,
Raw and SmackDown, as well as its NXT programming, through global
broadcast, pay television and digital platforms.
(c) Advertising and sponsorship revenue within the Media segment
consists primarily of advertising revenue from the Company’s
content on third-party social media platforms and sponsorship fees
from sponsors who promote products utilizing the Company’s media
platforms, including promotion on the Company’s digital websites
and on-air promotional media spots.
(d) Other revenue within the Media segment reflects revenue from
the distribution of other WWE content, including, but not limited
to, certain live in-ring programming content in international
markets, scripted, reality and other programming, as well as
theatrical and direct-to-home video releases
Operating income increased 58%, or $39.2 million, to
$106.3 million, driven by the impact of the Company’s large-scale
international event, and, to a lesser extent, the contractual
escalation of rights fees from the distribution of Raw and
SmackDown. These growth drivers were partially offset by a decrease
in Network revenue and an increase in management incentive
compensation costs associated with the Company’s improved operating
performance.
Adjusted OIBDA increased 54%, or $39.1 million, to $112.1
million.
Full Year 2021
Revenue increased 8%, or $68.0 million, to $936.2
million, reflecting the growth of domestic core content rights fees
for the Company’s flagship programs Raw and SmackDown, as well as
an increase in network revenue, which benefited from the upfront
revenue recognition related to the delivery of certain WWE Network
intellectual property rights to Peacock in the first quarter.
Operating income increased 9%, or $30.9 million, to
$363.4 million, primarily due to the increase in revenue (as
described above) and, to a lesser extent, lower network related
expenses driven by the transition of WWE Network to NBCU’s Peacock
service. These sources of growth were partially offset by an
increase in television production expense associated with the
return to live event touring and the production of content from WWE
ThunderDome as compared to the prior year which benefited from
production in the Company’s lower cost performance center in
Orlando for a significant portion of the year. Operating income was
also impacted by higher management incentive compensation resulting
from improved operating performance in the current year.
Adjusted OIBDA increased 6%, or $22.7 million, to $390.5
million.
Live Events
Fourth-Quarter 2021
Revenue was $20.1 million, an increase of $19.4 million,
driven by an increase in ticket sales as the Company returned to
staging ticketed live events. There were 57 total ticketed live
events in the current quarter, consisting of 48 events in North
America and 9 events in international markets. Average attendance
at the Company’s North America events was nearly 5,200.
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Live Events Revenue:
North American ticket sales
$
15.8
$
—
$
46.3
$
15.2
International ticket sales
2.2
—
4.6
0.2
Advertising and sponsorship (e)
0.2
—
0.9
0.4
Other (f)
1.9
0.7
6.0
4.1
Total Revenue
$
20.1
$
0.7
$
57.8
$
19.9
(e) Advertising and sponsorship revenue consists primarily of
fees from advertisers and sponsors that promote products utilizing
the Company’s live events (i.e., presenting sponsor of fan
engagement events and advertising signage at events).
(f) Other Live Events includes revenue from the sale of travel
packages associated with the Company’s global live events,
commissions earned through secondary ticketing, and revenue from
events for which the Company receives a fixed fee
Operating income increased to $1.4 million as compared to
an operating loss of $7.0 million, as the increase in ticket sales
(as described above) was partially offset by an increase in
event-related expenses.
Adjusted OIBDA increased to $1.6 million as compared to a
loss of $6.7 million.
Full Year 2021
Revenue increased to $57.8 million as compared to $19.9
million, with growth driven by an increase in ticket sales as the
Company returned to staging ticketed live events, including
WrestleMania and SummerSlam. There were 101 total ticketed live
events in 2021, consisting of 88 events in North America and 13
events in international markets, as compared to 42 events in the
prior year (held entirely in the first quarter). With the return to
live event touring, average attendance increased 5% to
approximately 6,600 and average ticket prices increased by 43% to
approximately $76.
Operating income was $6.9 million as compared to a loss
of $19.1 million, as the increase in ticket sales (as described
above) was partially offset by an increase in event-related
expenses.
Adjusted OIBDA was $7.7 million as compared to a loss of
$17.6 million.
Consumer Products
Fourth-Quarter 2021
Revenue increased 21%, or $5.6 million, to $32.6 million
with growth attributable to the Company’s franchise video game and
higher sales of merchandise at the Company’s live event venues
driven by the return to ticketed live events. These factors were
partially offset by a decrease in eCommerce merchandise sales due,
in part, to a tough comparison to elevated Covid-related sales in
the prior year quarter.
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Consumer Products Revenue:
Consumer product licensing
$
18.1
$
13.5
$
52.0
$
41.7
eCommerce
11.0
13.5
39.1
41.2
Venue merchandise
3.5
—
10.1
3.2
Total Revenue
$
32.6
$
27.0
$
101.2
$
86.1
Operating income increased 40%, or $3.6 million, to $12.5
million reflecting the increase in revenue (as described
above).
Adjusted OIBDA increased 42%, or $3.8 million, to $12.9
million.
Full Year 2021
Revenue grew 18%, or $15.1 million, to $101.2 million,
with growth attributable to the Company’s licensed video games and
toys, and, to a lesser extent, higher sales of merchandise at the
Company’s live event venues driven by the return to ticketed live
events, including WrestleMania and SummerSlam.
Operating income increased 36%, or $9.0 million, to $33.8
million, reflecting the growth in revenue (as described above).
Adjusted OIBDA increased 33%, or $8.9 million, to $35.5
million.
2022 Business Outlook2
In 2022, the Company targets another year of record revenue,
with growth driven by the full year impact of ticketed live events
(WWE initiated the return of ticketed audiences in July 2021),
staging of additional large-scale international events, escalation
of rights fees for the Company’s flagship programs, and
monetization of new, original series.
Additionally, the Company anticipates a significant increase in
its expense base associated with a higher level of activity in the
coming year. As these expenses support the full year return of live
event touring, expanded global production, and development of new
content, they contribute to higher revenue and profit in the
near-term, and strengthen WWE fan engagement, benefiting the value
of WWE content and the Company’s long-term growth potential.
Accordingly, management has targeted an Adjusted OIBDA range of
$360 million - $375 million, an all-time record (up 10% - 15% from
2021 Adjusted OIBDA of $327.1 million), as revenue growth is
partially offset by the increase in production, content-related and
other expenses.
In 2022, key initiatives that have meaningful implications for
WWE’s long-term growth include the licensing of WWE Network in
international markets, monetization of new original series, the
licensing of Raw second window rights, further progress with
sponsorship sales, and the continued execution of WWE’s stadium
strategy for premium live events.
Providing perspective on WWE’s targeted revenue and Adjusted
OIBDA growth, Mr. Riddick commented, “We continue to believe that
WWE has significant long-term growth opportunities and is well
positioned, particularly given our substantial cash and liquidity,
to deliver on its strategic initiatives. In 2022, we will continue
to evaluate our financial performance, balancing Adjusted OIBDA
growth with increased expenses that could enable us to deliver a
wider range of content, strengthen our engagement with a broadening
audience, and drive long-term shareholder value.”
The Company previously discussed projected capital expenditures
to support its workplace strategy. For 2021, the Company had total
capital expenditures of $39 million, which included approximately
$17 million to build out its new headquarter facility, with the
remainder focused on strengthening its production and enterprise
technology infrastructure. For 2022, the Company estimates total
capital expenditures of $280 million - $310 million, including
construction spending of approximately $235 million - $255 million.
The Company estimates that total capital expenditures related to
the new headquarters facility through 2023 will be approximately
$270 million - $300 million. The Company expects the total project
spend will be partially offset by tenant improvement allowances,
tax credits and proceeds from the sale of other real estate assets.
The total net cost of the Company’s new headquarters through
completion, i.e., net of these items, is estimated within a range
of $160 million - $180 million. The Company expects total capital
expenditures will return to approximately 4% - 5% of revenue once
construction of the Company’s new headquarters has been completed.
These expenditures would be at the low end of the historic range of
approximately 4% to 7% of revenue and are predominantly to maintain
and enhance existing infrastructure.
First Quarter 2022 Business
Outlook2
The Company estimates first quarter 2022 Adjusted OIBDA of $90
million - $100 million, which represents an increase of
approximately 7% - 19% from the prior year quarter. The estimate
reflects substantial revenue growth from the staging of a
large-scale international event (which did not occur in the prior
year quarter) and the impact of WWE’s return to live event touring
(which was initiated in July 2021). The Company also anticipates
that the first quarter growth will be partially offset by the
absence of the one-time revenue recognition associated with Peacock
as well as an increase in operating expenses including higher
production and related costs, and other activity-based
expenses.
WWE is unable to provide a reconciliation of full year or first
quarter guidance to GAAP measures as, at this time, WWE cannot
accurately determine all of the adjustments that would be
required.
Notes
(1) The definition of Adjusted OIBDA can be found in the
Non-GAAP Measures section of the release on page 10. A
reconciliation of three and twelve-month periods ended December 31,
2021 and 2020 Operating Income to Adjusted OIBDA can be found in
the Supplemental Information in this release on page 17.
(2) The Company’s business model and expected results will
continue to be subject to significant execution and other risks,
including 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, 2021. In addition, WWE is unable to provide a
reconciliation of first quarter or full year 2022 guidance to GAAP
measures as, at this time, WWE cannot accurately determine all of
the adjustments that would be required. See Supplemental
Information in this release on page 18.
(3) A reconciliation of three and twelve-month periods
ended December 31, 2021 and 2020 Net Income to Adjusted Net Income
can be found in the Supplemental Information in this release on
page 16.
(4) A reconciliation of three and twelve-month periods ended
December 31, 2021 and 2020 Free Cash Flow to Net cash provided by
operating activities can be found in the Supplemental Information
in this release on page 19.
Non-GAAP Measures
The Company defines Adjusted OIBDA as operating income
excluding depreciation and amortization, stock-based compensation
expense, certain impairment charges and other non-recurring
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 from similarly titled non-GAAP financial measures used by
other companies. WWE views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA (and other non-GAAP
measures such as Adjusted Operating Income, Adjusted Net
Income and Adjusted EPS which are defined as the GAAP
measures excluding certain nonrecurring, material items that impact
the comparability between periods) should not be considered in
isolation from, or as a substitute for, operating income, net
income, EPS or other GAAP measures, such as operating cash flow, as
an indicator of operating performance or liquidity.
The Company defines Free Cash Flow as net cash provided
by operating activities less cash used for capital expenditures.
WWE views net cash provided by operating activities as the most
directly comparable GAAP measure. Although it is not a recognized
measure of liquidity under U.S. GAAP, Free Cash Flow provides
useful information regarding the amount of cash WWE’s continuing
business generates after capital expenditures and is available for
reinvesting in the business, debt service, share repurchases and
payment of dividends.
Additional Information
Additional business metrics are made available to investors on
the corporate website - corporate.wwe.com/investors. Note: As previously
announced WWE will host a conference call at 5:00 p.m. ET on
February 3, 2022, to discuss the Company's earnings results for the
fourth quarter and full year ended 2021. 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:
8269242). 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 3, 2022, at corporate.wwe.com/investors. A replay of the call
will be available approximately two hours after the conference call
concludes and can be accessed on the Company’s website.
About WWE
WWE, a publicly traded company (NYSE: WWE), is an integrated
media organization and recognized leader in global entertainment.
The Company consists of a portfolio of businesses that create and
deliver original content 52 weeks a year to a global audience. WWE
is committed to family-friendly entertainment on its television
programming, premium live events, digital media, and publishing
platforms. WWE’s TV-PG programming can be seen in more than 1
billion homes worldwide in 30 languages through world-class
distribution partners including NBCUniversal, FOX Sports, BT Sport,
Sony India and Rogers. The award-winning WWE Network includes all
premium live events, scheduled programming and a massive
video-on-demand library and is currently available in more than 180
countries. In the United States, NBCUniversal’s streaming service,
Peacock, is the exclusive home to WWE Network.
Additional information on WWE (NYSE: WWE) can be found at
wwe.com and corporate.wwe.com.
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains 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 and
highly competitive media landscape; WWE Network; the computer
systems, content delivery and online operations of WWE and our
business partners; privacy norms and regulations; 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; large
public events as well as travel to and from such events; our
expansion into new or complementary businesses and/or strategic
investments; our accounts receivable; our new leased corporate
headquarters and media production facilities; potential substantial
liabilities if litigation is resolved unfavorably; a change in tax
laws in key jurisdictions could materially increase our tax
expense; our feature film business; a possible decline in general
economic conditions and disruption in financial markets, including
any resulting from COVID-19; our indebtedness including our
convertible notes; 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; our share repurchase program; a substantial
number of shares are eligible for sale by the McMahons and the
sale, or the perception of possible sales, of those shares could
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.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Net revenues
$
310.3
$
238.2
$
1,095.2
$
974.2
Operating expenses
171.0
148.7
608.2
549.5
Marketing and selling expenses
16.6
16.6
69.3
71.3
General and administrative expenses
30.0
26.3
117.8
102.2
Depreciation and amortization
9.1
10.4
40.9
42.6
Operating income
83.6
36.2
259.0
208.6
Interest expense
8.1
9.1
33.6
35.6
Other income (expense), net
6.8
(7.0)
7.5
(1.9)
Income before income taxes
82.3
20.1
232.9
171.1
Provision for income taxes
18.4
6.5
52.5
39.3
Net income
$
63.9
$
13.6
$
180.4
$
131.8
Earnings per share:
Basic
$
0.82
$
0.17
$
2.36
$
1.70
Diluted
$
0.76
$
0.16
$
2.12
$
1.56
Weighted average common shares
outstanding:
Basic
77.8
77.8
76.3
77.6
Diluted
83.7
83.7
84.9
84.2
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,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
134.8
$
462.1
Short-term investments, net
281.0
131.3
Accounts receivable, net
171.2
52.0
Inventory
8.0
8.4
Prepaid expenses and other current
assets
32.2
73.1
Total current assets
627.2
726.9
Property and equipment, net
172.7
161.5
Finance lease right-of-use assets, net
313.4
310.8
Operating lease right-of-use assets,
net
9.0
13.5
Content production assets, net
13.8
15.4
Investment securities
11.6
11.1
Deferred income tax assets, net
13.1
10.1
Other assets, net
43.3
48.0
Total assets
$
1,204.1
$
1,297.3
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt
$
0.4
$
100.4
Finance lease liabilities
12.2
9.6
Operating lease liabilities
4.8
4.0
Convertible debt
201.1
194.7
Accounts payable and accrued expenses
120.5
124.7
Deferred income
74.6
62.9
Total current liabilities
413.6
496.3
Long-term debt
21.3
21.7
Finance lease liabilities
374.7
379.9
Operating lease liabilities
5.1
9.7
Other non-current liabilities
8.1
0.9
Total liabilities
822.8
908.5
Commitments and contingencies
Stockholders' equity:
Class A common stock
0.4
0.5
Class B convertible common stock
0.3
0.3
Additional paid-in capital
409.9
424.7
Accumulated other comprehensive income
2.4
3.0
Accumulated deficit
(31.7)
(39.7)
Total stockholders’ equity
381.3
388.8
Total liabilities and stockholders'
equity
$
1,204.1
$
1,297.3
World Wrestling Entertainment,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Year Ended
December 31,
2021
2020
OPERATING ACTIVITIES:
Net income
$
180.4
$
131.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization and impairments of content
production assets
19.7
26.3
Depreciation and amortization
48.8
48.5
Other amortization
18.8
18.0
Loss on equity investments, net
0.8
5.7
Stock-based compensation
19.1
28.0
Benefit from deferred income taxes
(3.0)
(3.0)
Other non-cash adjustments
(6.3)
22.4
Cash provided by (used in) changes in
operating assets and liabilities:
Accounts receivable
(120.6)
70.0
Inventory
1.2
(1.3)
Prepaid expenses and other assets
3.0
(12.1)
Content production assets
(17.7)
(25.6)
Accounts payable, accrued expenses and
other liabilities
22.7
5.1
Deferred income
11.7
6.1
Net cash provided by operating
activities
178.6
319.9
INVESTING ACTIVITIES:
Purchases of property and equipment and
other assets
(39.2)
(27.6)
Purchases of short-term investments
(374.5)
(153.9)
Proceeds from sales and maturities of
short-term investments
222.1
182.3
Purchase of equity investments
(1.5)
(0.6)
Proceeds from sale of investment
securities
—
11.7
Other
4.3
—
Net cash (used in) provided by investing
activities
(188.8)
11.9
FINANCING ACTIVITIES:
Repayment of debt
(100.4)
(103.6)
Repayment of finance leases
(12.0)
(10.8)
Dividends paid
(36.4)
(37.2)
Proceeds from borrowings under the credit
facility
—
200.0
Taxes paid related to net settlement upon
vesting of equity awards
(5.6)
(11.1)
Proceeds from issuance of stock
2.9
2.6
Repurchase and retirement of common
stock
(165.6)
—
Net cash (used in) provided by financing
activities
(317.1)
39.9
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(327.3)
371.7
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
462.1
90.4
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
134.8
$
462.1
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of
refunds
$
55.5
$
45.6
Cash paid for interest
$
9.9
$
12.3
NON-CASH INVESTING TRANSACTIONS:
Purchases of property and equipment
recorded in accounts payable and accrued expenses
$
22.2
$
4.4
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted Net Income
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31,
2021
2020
As Reported
Gain on Partial Lease
Termination (1)
Adjusted
As Reported
Loss on Investments
(2)
Other Adjustments (3)
Adjusted
Operating income
$
83.6
$
—
$
83.6
$
36.2
$
—
$
1.5
$
37.7
Interest expense
8.1
—
8.1
9.1
—
—
9.1
Other income (expense), net
6.8
(6.7)
0.1
(7.0)
8.6
—
1.6
Income before taxes
82.3
(6.7)
75.6
20.1
8.6
1.5
30.2
Provision for income taxes
18.4
(1.5)
16.9
6.5
2.8
0.5
9.8
Net income
$
63.9
$
(5.2)
$
58.7
$
13.6
$
5.8
$
1.0
$
20.4
Earnings per share - diluted
$
0.76
$
(0.06)
$
0.70
$
0.16
$
0.07
$
0.01
$
0.24
Year Ended December
31,
2021
2020
As Reported
Gain on Partial Lease
Termination (1)
Other Adjustments (3)
Adjusted
As Reported
Loss on Investments
(2)
Other Adjustments (3)
Adjusted
Operating income
$
259.0
$
—
$
8.1
$
267.1
$
208.6
$
—
$
7.0
$
215.6
Interest expense
33.6
—
—
33.6
35.6
—
—
35.6
Other income (expense), net
7.5
(6.7)
—
0.8
(1.9)
5.7
—
3.8
Income before taxes
232.9
(6.7)
8.1
234.3
171.1
5.7
7.0
183.8
Provision for income taxes
52.5
(1.5)
1.8
52.8
39.3
1.3
1.6
42.2
Net income
$
180.4
$
(5.2)
$
6.3
$
181.5
$
131.8
$
4.4
$
5.4
$
141.6
Earnings per share - diluted
$
2.12
$
(0.05)
$
0.07
$
2.14
$
1.57
$
0.05
$
0.06
$
1.68
(1) During the three and twelve months ended December 31, 2021,
the Company recognized a gain of $6.7 million on the reduction of
approximately 33,000 rentable square feet as part of an amendment
to its new Stamford headquarters lease.
(2) 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. 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 three and
twelve months ended December 31, 2021.
(3) During the twelve months ended December 31, 2021, the
Company recorded severance expense of $8.1 million primarily
related to the combination of WWE’s television, digital and studios
teams into one organization for a more unified content strategy and
more streamlined content production. 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.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted OIBDA
(In millions, except per share
data)
(Unaudited)
Three Months Ended December
31, 2021
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments
Adjusted OIBDA
Media
$
106.3
$
2.4
$
3.4
$
—
$
112.1
Live Events
1.4
—
0.2
—
1.6
Consumer Products
12.5
0.1
0.3
—
12.9
Corporate
(36.6)
6.6
0.6
—
(29.4)
Total
$
83.6
$
9.1
$
4.5
$
—
$
97.2
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
Year Ended December 31,
2021
Operating Income
(Loss)
Depreciation &
Amortization
Stock Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
363.4
$
13.4
$
13.7
$
—
$
390.5
Live Events
6.9
—
0.8
—
7.7
Consumer Products
33.8
0.2
1.5
—
35.5
Corporate
(145.1)
27.3
3.1
8.1
(106.6)
Total
$
259.0
$
40.9
$
19.1
$
8.1
$
327.1
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
(1) During the twelve months ended December 31, 2021, the
Company recorded severance expense of $8.1 million primarily
related to the combination of WWE’s television, digital and studios
teams into one organization for a more unified content strategy and
more streamlined content production. 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.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Business Outlook
(In millions, except per share
data)
(Unaudited)
Reconciliation of Adjusted OIBDA to
Operating Income
Q4 2021
FY 2021
Q1 2022
FY 2022
Adjusted OIBDA
$
97.2
$
327.1
$90 - $100
$360 - $375
Depreciation & amortization (1)
(9.1)
(40.9)
—
—
Stock-based compensation (1)
(4.5)
(19.1)
—
—
Other operating income items (1)
—
(8.1)
—
—
Operating income (U.S. GAAP
Basis)
$
83.6
$
259.0
Not estimable
Not estimable
(1) Because of the nature of these items, WWE is unable to
estimate the amounts of any adjustments for these items for periods
after December 31, 2021 due to its inability to forecast if or when
such items will occur. These items are inherently unpredictable and
may not be reliably quantified.
World Wrestling Entertainment,
Inc.
Supplemental Information -
Free Cash Flow
(In millions)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2021
2020
2021
2020
Net cash provided by operating
activities
$
42.3
$
62.4
$
178.6
$
319.9
Less cash used for capital
expenditures:
Purchase of property and equipment and
other assets
(14.8)
(6.2)
(39.2)
(27.6)
Free Cash Flow
$
27.5
$
56.2
$
139.4
$
292.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220203005891/en/
Investors: Michael Weitz 203-352-8642 Seth Zaslow 203-352-1026
Media: Matthew Altman 203-352-1177
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