WWE® Reports 2012 Fourth Quarter and Full Year Results
STAMFORD, Conn.--(BUSINESS WIRE)--
WWE (NYSE:WWE) today announced financial results for its fourth quarter
ended December 31, 2012. Revenues totaled $115.1 million as compared to
$112.9 million in the prior-year quarter. Operating income was $2.6
million as compared to a loss of $13.1 million in the prior-year
quarter. Net income was $0.6 million, or $0.01 per share, as compared to
a loss of $8.6 million, or $(0.12) per share, in the prior-year quarter.
Excluding items that impacted comparability on a year-over-year basis,
Adjusted Operating income was $5.4 million as compared to $3.1 million
in the prior-year quarter, and Adjusted Net income was $1.3 million, or
$0.02 per share, as compared to $1.8 million, or $0.02 per share, in the
prior-year quarter. On an “As Reported” basis, the results of WWE's
movie portfolio, including reduced film impairment charges, were a
significant component of the rise in fourth-quarter earnings. Excluding
the impact of these impairment charges and network-related expenses, the
growth in “Adjusted” Operating income was predominantly from the
licensing of new television programs and digital content, which more
than offset ongoing investment to support the company's long-term growth
objectives. Adjusted earnings, however, declined due to an increase in
the effective tax-rate.
“In the fourth quarter, we continued to make important progress on our
key strategic initiatives, expanding the production and licensing of new
programs and enhancing our brands,” stated Vince McMahon, Chairman and
Chief Executive Officer. “Although we did not announce the launch of a
domestic television network during the year, we believe, now more than
ever, that we can realize the full value of our intellectual property
using a variety of approaches in our global markets. Our confidence is
based on the rising value of content and the tremendous global appeal of
our brands.”
“In 2012, our traditional core businesses (excluding the results of WWE
Studios and network-related expenses) delivered EBITDA of $77 million,
in line with our performance over the preceding four years, which has
ranged from $76 million to $96 million. Based on the anticipated
expiration of key commercial agreements and other opportunities to
maximize our content value, we believe we have the potential to achieve
a significant increase in earnings,” added George Barrios, Chief
Financial Officer. “In order to achieve this growth, it is critical that
we invest in our production and creative capabilities. We expect that
2013 EBITDA performance will approximate our 2012 results, plus or minus
10%. In addition, we anticipate that net income will be impacted by
incremental expenses from the return to a more normalized tax rate
(30%-35% as compared to 26% in 2012) and increased depreciation of
approximately $2 million to $3 million that derives from our ongoing
capital investments to support our long-term growth initiatives. (Please
see "WWE Announces Business Plan And Path to Significant Earnings
Growth" release for more details.)
Comparability of Results
Our results for the current-year quarter included $2.3 million in
network-related operating expenses and a $0.5 million film impairment
charge. Results for the prior-year quarter included $4.0 million in
network-related operating expenses and $12.2 million in film impairment
charges. In order to facilitate an analysis of our financial results on
a more comparable basis, where noted, we have adjusted our results to
exclude these items. (See Schedules of Adjustments in Supplemental
Information.)
Three Months Ended December 31, 2012 - Results
by Region and Business Segment
Revenues increased 2% based on our growth in North America. Revenues
from North America increased 12% driven by increased rights fees from
the licensing of new television programs and digital content, increased
home entertainment sales and, to a lesser extent, increased ticket sales
from a higher number of live events in the region than the prior-year
quarter. Revenues from outside North America declined 21% or $7.2
million primarily due to an anticipated reduction in the number of live
events, which impacted our Live and Televised Entertainment segment (as
described in the business segment discussion below).
The following tables reflect net revenues by region and by segment (in
millions):
Three Months Ended
December 31, 2012
December 31, 2011
Net Revenues By Region:
North America
$
87.6
$
78.2
Europe/Middle East/Africa (EMEA)
19.1
19.1
Asia Pacific (APAC)
7.0
9.4
Latin America
1.4
6.2
Total net revenues
$
115.1
$
112.9
Three Months Ended
December 31, 2012
December 31, 2011
Net Revenues By Segment:
Live and Televised Entertainment
$
82.0
$
81.0
Consumer Products
20.4
18.7
Digital Media
12.1
8.9
WWE Studios
0.6
4.3
Total net revenues
$
115.1
$
112.9
Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $82.0
million for the current quarter as compared to $81.0 million in the
prior-year quarter. Increased rights fees from the production and
licensing of new television programs were affected by timing, with 8
fewer international live events and a reduction in the number of
pay-per-view events (3 vs. 4 in the prior-year quarter).
Live Event revenues declined 13% to$23.3 million from
$26.9 million in the prior-year quarter primarily due to a reduction
in the number of international events and lower average attendance at
both our domestic and international events.
There were 75 total events, including 52 events in North America
and 23 events in international markets, in the current quarter as
compared to 78 events in the prior-year quarter, including 47
events in North America and 31 in international markets.
North American live event revenues increased 9% to $13.9 million
from $12.7 million in the prior-year quarter, reflecting increases
in the number of events and average realized ticket price, which
more than offset a slight decline in average attendance. There
were 5 additional events in the period, representing an 11%
increase while the average ticket price for the quarter's events
increased 4% to $44.64 from $42.87 in the prior-year quarter.
Average attendance declined 5% to approximately 5,700 from 6,000,
primarily due to weaker performance.
International live events generated revenues of $9.4 million as
compared to $14.2 million in the prior-year quarter, reflecting a
26% decline in the number of events, with 8 fewer events in the
period, and an 11% decrease in average attendance to approximately
5,600 from 6,300 in the prior-year quarter. The decline in average
attendance was predominantly due to weaker performance, as the
prior-year quarter included an especially strong eight-event tour
in Mexico. Partially offsetting the decline in events and
attendance, the average ticket price increased 5% to $69.81 due in
part to changes in the mix of ticket sales.
Pay-Per-View revenues were $13.0 million as compared to $14.6
million in the prior-year quarter reflecting the production of three
pay-per-view events in the current quarter as compared to four in the
prior-year quarter. In addition, revenue and buys were impacted by the
timing of our Pay-Per-View distribution in the U.K. as our television
partner in that country selected one fewer event in the current
quarter for distribution via pay-per-view. On a comparable basis, for
the events produced in the quarter, revenue increased approximately 4%
as a 3% decline in buys was more than offset by a 7% increase in the
average revenue per buy due in part to an increased proportion of buys
to view our events in high definition, which generally attracts higher
retail prices.
The details for the number of buys (in 000s) are as follows:
Three Months Ended
Broadcast Month
Events (in chronological order)
December 31, 2012
December 31, 2011
October
Hell in a Cell
199
182
October
Vengeance
—
121
November
Survivor Series
208
281
December
WWE TLC
175
179
Prior events
70
33
Total
652
796
Television revenues increased 20% to $40.6 million from $33.9
million in the prior-year quarter primarily due to the production and
licensing of new programs. An additional hour of our Raw
program was licensed to the USA Network and debuted in July 2012, and
a new Saturday morning kids show, WWE Saturday Morning Slam,
was introduced on The CW Network in August 2012. In addition, during
the quarter, WWE began distribution of a new original series, the WWE
Main Event, which airs on ION Television.
Venue Merchandiserevenues were $3.8 million as compared
to $3.9 million in the prior-year quarter. The 3% decline was
primarily due to a decrease in total international attendance that
arose from 8 fewer international live events in the current-year
quarter. Total paid attendance and sales per capita at our North
American events increased 4% and 5%, respectively.
Consumer Products
Revenues from our Consumer Products businesses increased 9% to $20.4
million from $18.7 million in the prior-year quarter, primarily due to
strong unit sales from our home entertainment catalog that were
partially offset by lower sales of our licensed products.
Home Entertainment net revenues increased 48% to $9.6 million
as compared to $6.5 million in the prior-year quarter driven by the
promotion and strong sales of our catalog titles and two additional,
lower-priced new releases. Revenue growth stemmed from a 43% increase
in shipments to nearly 1.2 million units and improved sell through
rates of our prior-period releases that more than offset a 16%
reduction in average price to $11.31.
Licensing revenues declined 12% to $8.4 million as compared to
$9.5 million in the prior-year quarter with reduced sales across most
product categories, especially video games, as well as novelty
products, and apparel. Royalties earned from the sale of video games
declined by $0.5 million primarily from the absence of WWE All
Stars, which was released in March 2011 and was not refreshed in
2012. In addition, shipments of our annual franchise video game
declined 21% to 128,000 units. Royalties from the sale of toys
increased 11%, or $0.6 million, reflecting the successful launch of
our Brawlin' Buddies toy by Mattel.
On
December 19, 2012, our video game licensee THQ Inc. ("THQ") declared
bankruptcy. As a result, the Company reserved $1.7 million as bad debt
for amounts that were due the Company from THQ at December 31, 2012.
The amounts reserved primarily related to sponsorship agreements and
various services WWE provided to THQ in support of WWE '13. In
connection with the termination of our license agreement with THQ, the
Company will recognize approximately $8.0 million of revenue during
the first quarter of 2013 relating to the unrecognized portion of an
advance received when the Company entered into the license agreement
with THQ in 2009. Additionally, upon termination of the agreement with
THQ, the Company entered into a multi-year agreement with Take-Two
Interactive Software, Inc. (Take-Two) to be the Company's video game
licensee. As a result of THQ's bankruptcy, the Company will not
collect royalties due in the first quarter. The Company has estimated
the amount of this economic loss at between $4.0 million to $5.0
million, and does not believe that this loss will have a material
adverse effect on the Company's business, financial condition or
results of operations.
Magazine publishing net revenues were $1.7 million as compared
to $2.0 million in the prior-year quarter, reflecting lower newsstand
sales in the current-year quarter.
Digital Media
Revenues from our Digital Media related businesses were $12.1 million as
compared to $8.9 million in the prior-year quarter, representing a 36%
increase.
WWE.com revenues increased to $6.2 million from $2.7 million in
the prior-year quarter, primarily due to increased rights fees
associated with the licensing of original short-form content to
YouTube and the licensing of next-day access of current WWE TV
programs to Hulu Plus. The related programming agreements with YouTube
and Hulu commenced February 2012 and September 2012, respectively.
Sales of online advertising also increased from the prior-year quarter.
WWEShop revenues declined to $5.9 million from $6.2 million in
the prior-year quarter as a 10% decline in average revenue per order
to $47.10 was partially offset by a 4% increase in the number of
online merchandise sales to 125,000 orders.
WWE Studios
During the quarter, WWE Studios recognized revenue of $0.6 million as
compared to $4.3 million in the prior-year quarter, reflecting the
timing of releases. There were no feature films released in the current
quarteras compared to one release, The Reunion, in the
prior-year quarter. WWE Studios' movie portfolio generated a loss of
$0.6 million, including a $0.5 million film impairment charge, compared
to a loss of $13.8 million in the prior-year quarter, which included
$12.2 million in film charges. Excluding the impact of those charges in
both the current and prior-year quarter, the WWE Studios' movie
portfolio generated essentially break-even results compared to an
adjusted loss of $1.6 million in the prior-year quarter.
Profit Contribution (Net revenues less cost of
revenues)
Profit contribution increased 89% to $45.9 million primarily due to
improved results (i.e., reduced losses) from our WWE Studios' movie
projects as well as increased rights fees from the licensing of new
television programs and digital content, stronger sell-through rates of
our home entertainment catalog titles and a reduction in certain
talent-related expenses. The profit contribution margin increased to 40%
compared to 22% in the prior-year quarter. Excluding the impact of film
impairments, our Adjusted Profit contribution increased 27% to $46.4
million and our adjusted profit contribution margin was 40% compared to
32% in the prior-year quarter. (See Schedules of Adjustments in
Supplemental Information.)
Selling, general and administrative expenses
SG&A expenses were $37.4 million for the current-year quarter as
compared to $33.3 million in the prior-year quarter. These results
reflected the return to a more normalized level of management incentive
compensation, which resulted in a year-over-year increase of
approximately $2.3 million, increased salary expenses, and incremental
bad debt expense due, in part, to the bankruptcy of our former video
game licensee. The rise in staffing costs (excluding management
incentive compensation) was incurred to support the expansion of our
television and digital content, including a potential network.
Depreciation and amortization
Depreciation and amortization expense totaled $5.9 million for the
current-year quarter as compared to $4.1 million in the prior-year
quarter. The increase in depreciation and amortization expense derives
from our investment in assets to support our long-term growth
objectives, including the launch of a potential network.
EBITDA
EBITDA was $8.5 million in the current-year quarter as compared to a
loss of $9.0 million in the prior-year quarter. Improved results were
driven by the performance of our movie portfolio and the licensing of
additional television and digital content, partially offset by the
aforementioned increase in SG&A expenses. Adjusted EBITDA (excluding the
impact of network-related expenses and film impairments) increased 57%
to $11.3 million from $7.2 million in the prior-year quarter.
Investment and Other (Expense) Income
Investment income, interest and other expense, net was a loss of $0.2
million in the current-year quarter compared to a loss of $0.2 million
in the prior-year quarter.
Effective tax rate
The current year quarter's effective tax rate was 75%. The current
quarter was adversely impacted by $0.4 million of additional tax expense
as a result of differences between estimated and actual full year
taxable income. Additionally, the fourth quarter rate reflected a $0.2
million increase in unrecognized tax benefits and $0.2 million to
provide for dividends from a foreign subsidiary. In total, these items
were responsible for 33 percentage points of the quarter's 75% effective
rate.
Summary Results for the Year Ended December 31,
2012
Total revenues for the year ended December 31, 2012 were $484.0 million
as compared to $483.9 million in the prior year. Operating income for
the current year was $43.2 million versus $37.0 million in the prior
year. Net income was $31.4 million, or $0.42 per share, as compared to
$24.8 million, or $0.33 per share, in the prior year. EBITDA was $63.2
million for the current year as compared to $52.0 million in the prior
year. Excluding items that impacted comparability on a year-over-year
basis, Adjusted Operating income was $52.6 million compared to $64.4
million in the prior year, and Adjusted Net income was $38.6 million, or
$0.51 per share, compared to $43.3 million, or $0.58 per share, in the
prior year. On an “As Reported” basis, the results of WWE's portfolio of
movies, including a $22.2 million reduction in film impairment charges,
was a significant component of the rise in EBITDA for the year.
Excluding the impact of these impairment charges and network-related
expenses, “Adjusted” EBITDA declined 9% as growth from the licensing of
new television programs and digital content, as well as improved results
from our Pay-Per-View operations, were more than offset by lower video
game sales, ongoing investment to support the company's long-term
objectives, and $10.8 million in incremental expenses from the return to
a more normalized level of management incentive compensation in the
current year.
Year Ended December 31, 2012 - Results by
Region and Business Segment
Revenues were essentially flat to the prior year as growth from North
America was offset by a corresponding international decline. Revenue
from North America increased 4%, or $15.4 million, as the licensing of
new television programs and digital content, improved home entertainment
sales, and a rise in the number of domestic live events were partially
offset by lower revenues from our movie releases. Revenues from outside
North America declined 11%, or $15.3 million, primarily due to an
anticipated reduction in the number of live events and lower sales of
licensed consumer products, particularly in the Latin American and EMEA
regions.
The following tables reflect net revenues by region and by segment (in
millions):
Year Ended
December 31, 2012
December 31, 2011
Net Revenues By Region:
North America
$
365.9
$
350.5
Europe/Middle East/Africa
70.7
76.1
Asia Pacific
37.1
38.7
Latin America
10.3
18.6
Total net revenues
$
484.0
$
483.9
Year Ended
December 31, 2012
December 31, 2011
Net Revenues By Segment:
Live and Televised Entertainment
$
353.8
$
340.0
Consumer Products
87.8
94.9
Digital Media
34.5
28.1
WWE Studios
7.9
20.9
Total net revenues
$
484.0
$
483.9
Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were
$353.8 million for the current-year period as compared to $340.0 million
in the prior-year period, representing an increase of 4%.
Year Ended
December 31, 2012
December 31, 2011
Live events
$
103.7
$
104.7
Venue merchandise
18.8
18.3
Pay-per-view
83.6
78.3
Television rights fees
139.5
131.5
Other
8.2
7.2
Total
$
353.8
$
340.0
Consumer Products
Revenues from our Consumer Products businesses were $87.8 million for
the current-year period as compared to $94.9 million in the prior-year
period, representing a decrease of 7%.
Year Ended
December 31, 2012
December 31, 2011
Licensing
$
46.3
$
54.4
Home entertainment
33.0
30.4
Magazine publishing
6.0
7.7
Other
2.5
2.4
Total
$
87.8
$
94.9
Digital Media
Revenues from our Digital Media related businesses were $34.5 million as
compared to $28.1 million in the prior-year period, representing an
increase of 23%.
During the current year, WWE Studios recognized revenue of $7.9 million
as compared to $20.9 million in the prior year, reflecting the timing of
releases from our movie portfolio. Film performance improved by $24.0
million over the prior year driven by the $22.2 million reduction of
impairment charges in the current year.
Profit Contribution (Net revenues less cost of
revenues)
Profit contribution increased 18% to $199.6 million primarily driven by
reduced losses from our WWE Studios film projects, the strong
performance of our Pay-Per-View events, and the licensing of new
television programming and digital content. The growth in profit from
these businesses was partially offset by reduced video game sales and
the return to a more normalized level of management incentive
compensation, which resulted in a $3.2 million increase in expenses on a
year-over-year basis. Excluding the film impairment charges in the
current and prior year, Adjusted Profit contribution increased 5% to
$200.8 million and Adjusted Profit contribution margin increased to 41%
from 40% in the prior year. (See Schedules of Adjustments in
Supplemental Information.)
Selling, general and administrative expenses
SG&A expenses were $136.4 million for the current-year period as
compared to $116.7 million in the prior-year period. This 17% increase
reflected the return to a more normalized level of management incentive
compensation, which resulted in a year-over-year increase of
approximately $7.6 million, higher salary expenses as well as increased
bad debt expense. The rise in staffing costs (excluding management
incentive compensation) was incurred primarily to support a potential
network. Network-related costs, including staffing costs, totaled $8.2
million in the current-year period. Excluding these costs in both
periods, SG&A expenses increased 14% to $128.2 million from $112.7
million in the prior-year period.
EBITDA
EBITDA increased 22% to $63.2 million from $52.0 million in the prior
year. The growth in profit contribution, driven by reduced losses from
our WWE Studios film projects and the strong performance of our
Pay-Per-View events, more than offset the aforementioned increase in
SG&A expenses. Excluding the impact of network-related expenses and film
impairments, however, Adjusted EBITDA declined 9% to $72.6 million from
$79.4 million in the prior year.
Investment and Other Income (Expense)
Investment income was $2.2 million in the current year as compared to
$2.1 million in the prior year. Interest expense of $1.7 million in the
current year includes the amortization of loan origination costs and a
fee on the unused portion of our revolving credit facility, which was
established in the third quarter of 2011. Interest expense in the prior
year was $0.6 million and related primarily to our mortgage which was
repaid in full in 2012. Other expense was approximately $1.0 million in
the current year as compared to $1.6 million in the prior year. The
decline reflected changes in state taxes not based on income.
Effective tax rate
The effective tax rate was 26% in the current year as compared to 33% in
the prior year. The current-year effective tax rate was positively
impacted by the recognition of approximately $4.4 million in previously
unrecognized tax benefits, primarily related to the settlement of
several audits including the State of Connecticut, the IRS and other
state and local jurisdictions.
Cash Flows
Net cash provided by operating activities was $63.0 million for the year
ended December 31, 2012 as compared to $63.2 million in the prior year.
Purchases of property and equipment and other assets increased $6.0
million from the prior-year period to $33.9 million. The level of
capital spending and the increase from the prior year were primarily due
to investment in assets to develop the infrastructure which supports our
efforts to create and distribute new content, including through a
potential network.
Additional Information
Additional business metrics are made available to investors on a monthly
basis on our corporate website - corporate.wwe.com.
Note: WWE will host a conference call on February 28, 2013 at 11:00 a.m.
ET to discuss the Company's earnings results for the fourth quarter of
2012. All interested parties can access the conference call by dialing
855-993-1400 (conference ID: WWE). Please reserve a line 15 minutes
prior to the start time of the conference call. A presentation that will
be referenced during the call can be found at the Company web site at
corporate.wwe.com. A replay of the call will be available approximately
three hours after the conference call concludes, and can be accessed at
corporate.wwe.com.
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 is broadcast in
more than 145 countries and 30 languages and reaches more than 600
million homes worldwide. The company is headquartered in Stamford,
Conn., with offices in New York, Los Angeles, Miami, London, Mumbai,
Shanghai, Singapore, Istanbul 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 maintaining and renewing key agreements,
including television and pay-per-view programming distribution
agreements; the need for continually developing creative and
entertaining programming; the continued importance of key performers and
the services of Vincent McMahon; the conditions of the markets in which
we compete and acceptance of the Company's brands, media and merchandise
within those markets; our exposure to bad debt risk; uncertainties
relating to regulatory and litigation matters; risks resulting from the
highly competitive nature of our markets; uncertainties associated with
international markets; the importance of protecting our intellectual
property and complying with the intellectual property rights of others;
risks associated with producing and travelling to and from our large
live events, both domestically and internationally; the risk of
accidents or injuries during our physically demanding events; risks
relating to our film business; risks relating to increasing content
production for distribution on various platforms, including the
potential creation of a WWE Network; risks relating to our computer
systems and online operations; risks relating to the large number of
shares of common stock controlled by members of the McMahon family and
the possibility of the sale of their stock by the McMahons or the
perception of the possibility of such sales; the relatively small public
float of our stock; and other risks and factors set forth from time to
time in Company filings with the Securities and Exchange Commission.
Actual results could differ materially from those currently expected or
anticipated. 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, general economic and
competitive conditions and such other factors as our Board of Directors
may consider relevant.
World Wrestling Entertainment, Inc. Consolidated
Income Statements (In millions, except per share data) (Unaudited)
Three Months Ended
Year Ended
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Net revenues
$
115.1
$
112.9
$
484.0
$
483.9
Cost of revenues
69.2
88.6
284.4
315.2
Selling, general and administrative expenses
37.4
33.3
136.4
116.7
Depreciation and amortization
5.9
4.1
20.0
15.0
Operating income (loss)
2.6
(13.1
)
43.2
37.0
Investment income, net
0.5
0.6
2.2
2.1
Interest expense
(0.3
)
(0.4
)
(1.7
)
(0.6
)
Other expense, net
(0.4
)
(0.4
)
(1.0
)
(1.6
)
Income (loss) before income taxes
2.4
(13.3
)
42.7
36.9
Provision (benefit) for income taxes
1.8
(4.7
)
11.3
12.1
Net income (loss)
$
0.6
$
(8.6
)
$
31.4
$
24.8
Earnings (loss) per share:
Basic and diluted
$
0.01
$
(0.12
)
$
0.42
$
0.33
Weighted average common shares outstanding:
Basic
74.8
74.4
74.6
74.2
Diluted
75.1
74.8
75.0
74.9
World Wrestling Entertainment, Inc. Consolidated
Balance Sheets (In millions) (Unaudited)
As of
December 31, 2012
December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
66.0
$
52.5
Short-term investments, net
86.3
103.3
Accounts receivable, net
50.7
56.7
Inventory
1.8
1.7
Deferred income taxes
14.4
11.1
Prepaid expenses and other current assets
15.3
14.4
Total current assets
234.5
239.7
PROPERTY AND EQUIPMENT, NET
102.2
96.5
FEATURE FILM PRODUCTION ASSETS, NET
23.7
23.6
TELEVISION PRODUCTION ASSETS
6.3
0.3
INVESTMENT SECURITIES
5.2
10.2
OTHER ASSETS
9.5
8.3
TOTAL ASSETS
$
381.4
$
378.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt
$
—
$
1.3
Accounts payable and accrued expenses
49.0
46.3
Deferred income
28.6
21.7
Total current liabilities
77.6
69.3
LONG-TERM DEBT
—
0.3
NON-CURRENT INCOME TAX LIABILITIES
9.1
5.6
NON-CURRENT DEFERRED INCOME
—
8.2
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Class A common stock
0.3
0.3
Class B convertible common stock
0.5
0.5
Additional paid-in capital
341.7
338.4
Accumulated other comprehensive income
4.0
3.3
Accumulated deficit
(51.8
)
(47.3
)
Total stockholders’ equity
294.7
295.2
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
381.4
$
378.6
World Wrestling Entertainment, Inc. Consolidated
Statements of Cash Flows (In millions) (Unaudited)
Year Ended
December 31, 2012
December 31, 2011
OPERATING ACTIVITIES:
Net income
$
31.4
$
24.8
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization and impairments of feature film production assets
8.8
39.7
Depreciation and amortization
20.0
15.0
Realized gains on sales of investments
(0.2
)
(0.1
)
Amortization of bond premium
2.3
2.6
Amortization of debt issuance costs
0.6
0.2
Stock-based compensation
3.8
2.9
Provision for (recovery from) doubtful accounts
2.5
(0.7
)
Services provided in exchange for equity instruments
(0.4
)
—
Loss on disposal of property and equipment
0.1
1.4
Provision for (benefit from) deferred income taxes
6.2
(6.4
)
Excess tax benefits from stock-based payment arrangements
—
(0.1
)
Cash provided/(used) by changes in operating assets and liabilities:
Accounts receivable
4.5
(1.9
)
Inventory
(0.1
)
0.4
Prepaid expenses and other assets
(2.7
)
4.8
Feature film production assets
(8.9
)
(7.1
)
Television production assets
(6.1
)
(0.3
)
Accounts payable and accrued expenses
2.5
(3.7
)
Deferred income
(1.3
)
(8.3
)
Net cash provided by operating activities
63.0
63.2
INVESTING ACTIVITIES:
Purchase of property and equipment and other assets
(33.9
)
(27.9
)
Purchases of short-term investments
(19.2
)
(47.9
)
Proceeds from sales or maturities of investments
45.2
45.1
Purchase of cost method investment
(5.0
)
—
Net cash used in investing activities
(12.9
)
(30.7
)
FINANCING ACTIVITIES:
Repayment of long-term debt
(1.6
)
(1.2
)
Debt issuance costs
—
(1.8
)
Issuance of stock, net
0.8
0.9
Dividends paid
(35.8
)
(47.8
)
Excess tax benefits from stock-based payment arrangements
—
0.1
Net cash used in financing activities
(36.6
)
(49.8
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
13.5
(17.3
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
52.5
69.8
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
66.0
$
52.5
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds
$
7.2
$
12.1
Cash paid for interest
$
0.8
$
0.4
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Non-cash purchase of property and equipment and other assets
$
1.4
$
5.3
World Wrestling Entertainment, Inc. Supplemental
Information – EBITDA (In millions) (Unaudited)
Three Months Ended
Year Ended
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Net income (loss)
$
0.6
$
(8.6
)
$
31.4
$
24.8
Provision (benefit) for income taxes
1.8
(4.7
)
11.3
12.1
Investment, interest and other expense (income), net
0.2
0.2
0.5
0.1
Depreciation and amortization
5.9
4.1
20.0
15.0
EBITDA
$
8.5
$
(9.0
)
$
63.2
$
52.0
Non-GAAP Measure:
EBITDA is defined as net income (loss) before investment,
interest and other expense/income, income taxes, depreciation and
amortization. The Company's definition of EBITDA does not adjust its
U.S. GAAP basis earnings for the amortization of Feature Film production
assets. Although it is not a recognized measure of performance under
U.S. GAAP, EBITDA is presented because it is a widely accepted financial
indicator of a company's performance. The Company uses EBITDA to measure
its own performance, set goals for operating managers, and in our
calculations of compliance with debt covenants in conjunction with our
credit facility. EBITDA 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 – Schedule of Adjustments
(In millions) (Unaudited)
Three Months Ended
Year Ended
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Profit contribution
$
45.9
$
24.3
$
199.6
$
168.7
Adjustments (Added back):
Film impairment charge
0.5
12.2
1.2
23.4
Adjusted Profit contribution
$
46.4
$
36.5
$
200.8
$
192.1
Selling, general and administrative expenses
37.4
33.3
136.4
116.7
Adjustments (Less):
Network-related expenses
(2.3
)
(4.0
)
(8.2
)
(4.0
)
Adjusted Selling, general and administrative expenses
$
35.1
$
29.3
$
128.2
$
112.7
Depreciation and amortization
5.9
4.1
20.0
15.0
Operating income (loss)
$
2.6
$
(13.1
)
$
43.2
$
37.0
Adjusted Operating income
$
5.4
$
3.1
$
52.6
$
64.4
EBITDA
$
8.5
$
(9.0
)
$
63.2
$
52.0
Adjusted EBITDA
$
11.3
$
7.2
$
72.6
$
79.4
Non-GAAP Measure:
Adjusted Profit contribution, Adjusted Selling, general and
administrative expenses, Adjusted Operating income and Adjusted EBITDA
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 – Schedule of Adjustments (In millions,
except per share data) (Unaudited)
Three Months Ended
Year Ended
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Operating income (loss)
$
2.6
$
(13.1
)
$
43.2
$
37.0
Adjustments (Added back):
Film impairment charge
0.5
12.2
1.2
23.4
Network-related expenses
2.3
4.0
8.2
4.0
Adjusted Operating income
$
5.4
$
3.1
$
52.6
$
64.4
Investment, interest and other (expense) income, net
(0.2
)
(0.2
)
(0.5
)
(0.1
)
Adjusted Income before taxes
$
5.2
$
2.9
$
52.1
$
64.3
Provision (benefit) for taxes
1.8
(4.7
)
11.3
12.1
Adjustments (Added back at period's effective tax rate):
Previously unrecognized tax benefits
—
—
4.1
—
Change due to operating adjustments
2.1
5.8
(1.9
)
8.9
Adjusted Provision for taxes
$
3.9
$
1.1
$
13.5
$
21.0
Adjusted Net income
$
1.3
$
1.8
$
38.6
$
43.3
Adjusted Earnings per share:
Basic
$
0.02
$
0.02
$
0.52
$
0.58
Diluted
$
0.02
$
0.02
$
0.51
$
0.58
Weighted average common shares outstanding (In millions):
Basic
74.8
74.4
74.6
74.2
Diluted
75.1
74.8
75.0
74.9
Non-GAAP Measure:
Adjusted Operating income, Adjusted Income before taxes, Adjusted
Provision for taxes, 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 - Free Cash Flow (In millions) (Unaudited)
Three Months Ended
Year Ended
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Net cash provided by operating activities
$
22.1
$
15.4
$
63.0
$
63.2
Less cash used for capital expenditures and other assets:
Purchase of property and equipment
(6.8
)
(17.5
)
(28.7
)
(26.2
)
Purchase of other assets
(0.4
)
—
(5.2
)
(1.8
)
Free Cash Flow
$
14.9
$
(2.1
)
$
29.1
$
35.2
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 and for payment of dividends.
WWE Investors: Michael Weitz 203-352-8642 Media:
Tara Carraro 203-352-8625
Press Release $WWE World Wrestling Entertainment Inc.
STAMFORD, Conn.--(BUSINESS WIRE)-- WWE (NYSE:WWE) today announced financial results for its fourth quarter ended December 31, 2012. Revenues totaled $115.1 million as compared to $112.9 million in the prior-year quarter. Operating income was $2.6 million as compared to a loss of $13.1 million in the prior-year quarter. Net income was $0.6 million, or $0.01 per share, as compared to a loss of $8.6 million, or $(0.12) per share, in the prior-year quarter. Excluding items that impacted comparability on a year-over-year basis, Adjusted Operating income was $5.4 million as compared to $3.1 million in the prior-year quarter, and Adjusted Net income was $1.3 million, or $0.02 per share, as compared to $1.8 million, or $0.02 per share, in the prior-year quarter. On an “As Reported” basis, the results of WWE's movie portfolio, including reduced film impairment charges, were a significant component of the rise in fourth-quarter earnings. Excluding the impact of these impairment charges and network-related expenses, the growth in “Adjusted” Operating income was predominantly from the licensing of new television programs and digital content, which more than offset ongoing investment to support the company's long-term growth objectives. Adjusted earnings, however, declined due to an increase in the effective tax-rate.
“In the fourth quarter, we continued to make important progress on our key strategic initiatives, expanding the production and licensing of new programs and enhancing our brands,” stated Vince McMahon, Chairman and Chief Executive Officer. “Although we did not announce the launch of a domestic television network during the year, we believe, now more than ever, that we can realize the full value of our intellectual property using a variety of approaches in our global markets. Our confidence is based on the rising value of content and the tremendous global appeal of our brands.”
“In 2012, our traditional core businesses (excluding the results of WWE Studios and network-related expenses) delivered EBITDA of $77 million, in line with our performance over the preceding four years, which has ranged from $76 million to $96 million. Based on the anticipated expiration of key commercial agreements and other opportunities to maximize our content value, we believe we have the potential to achieve a significant increase in earnings,” added George Barrios, Chief Financial Officer. “In order to achieve this growth, it is critical that we invest in our production and creative capabilities. We expect that 2013 EBITDA performance will approximate our 2012 results, plus or minus 10%. In addition, we anticipate that net income will be impacted by incremental expenses from the return to a more normalized tax rate (30%-35% as compared to 26% in 2012) and increased depreciation of approximately $2 million to $3 million that derives from our ongoing capital investments to support our long-term growth initiatives. (Please see "WWE Announces Business Plan And Path to Significant Earnings Growth" release for more details.)
Comparability of Results
Our results for the current-year quarter included $2.3 million in network-related operating expenses and a $0.5 million film impairment charge. Results for the prior-year quarter included $4.0 million in network-related operating expenses and $12.2 million in film impairment charges. In order to facilitate an analysis of our financial results on a more comparable basis, where noted, we have adjusted our results to exclude these items. (See Schedules of Adjustments in Supplemental Information.)
Three Months Ended December 31, 2012 - Results by Region and Business Segment
Revenues increased 2% based on our growth in North America. Revenues from North America increased 12% driven by increased rights fees from the licensing of new television programs and digital content, increased home entertainment sales and, to a lesser extent, increased ticket sales from a higher number of live events in the region than the prior-year quarter. Revenues from outside North America declined 21% or $7.2 million primarily due to an anticipated reduction in the number of live events, which impacted our Live and Televised Entertainment segment (as described in the business segment discussion below).
The following tables reflect net revenues by region and by segment (in millions):
December 31,
2012
2011
Net Revenues By Region:
78.2
2012
2011
Net Revenues By Segment:
81.0
Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $82.0 million for the current quarter as compared to $81.0 million in the prior-year quarter. Increased rights fees from the production and licensing of new television programs were affected by timing, with 8 fewer international live events and a reduction in the number of pay-per-view events (3 vs. 4 in the prior-year quarter).
The details for the number of buys (in 000s) are as follows:
Broadcast
Month
Events (in chronological order)
December 31,
2012
December 31,
2011
Consumer Products
Revenues from our Consumer Products businesses increased 9% to $20.4 million from $18.7 million in the prior-year quarter, primarily due to strong unit sales from our home entertainment catalog that were partially offset by lower sales of our licensed products.
THQ Termination Agreement / Take-Two License Agreement
On December 19, 2012, our video game licensee THQ Inc. ("THQ") declared bankruptcy. As a result, the Company reserved $1.7 million as bad debt for amounts that were due the Company from THQ at December 31, 2012. The amounts reserved primarily related to sponsorship agreements and various services WWE provided to THQ in support of WWE '13. In connection with the termination of our license agreement with THQ, the Company will recognize approximately $8.0 million of revenue during the first quarter of 2013 relating to the unrecognized portion of an advance received when the Company entered into the license agreement with THQ in 2009. Additionally, upon termination of the agreement with THQ, the Company entered into a multi-year agreement with Take-Two Interactive Software, Inc. (Take-Two) to be the Company's video game licensee. As a result of THQ's bankruptcy, the Company will not collect royalties due in the first quarter. The Company has estimated the amount of this economic loss at between $4.0 million to $5.0 million, and does not believe that this loss will have a material adverse effect on the Company's business, financial condition or results of operations.
Digital Media
Revenues from our Digital Media related businesses were $12.1 million as compared to $8.9 million in the prior-year quarter, representing a 36% increase.
WWE Studios
During the quarter, WWE Studios recognized revenue of $0.6 million as compared to $4.3 million in the prior-year quarter, reflecting the timing of releases. There were no feature films released in the current quarter as compared to one release, The Reunion, in the prior-year quarter. WWE Studios' movie portfolio generated a loss of $0.6 million, including a $0.5 million film impairment charge, compared to a loss of $13.8 million in the prior-year quarter, which included $12.2 million in film charges. Excluding the impact of those charges in both the current and prior-year quarter, the WWE Studios' movie portfolio generated essentially break-even results compared to an adjusted loss of $1.6 million in the prior-year quarter.
Profit Contribution (Net revenues less cost of revenues)
Profit contribution increased 89% to $45.9 million primarily due to improved results (i.e., reduced losses) from our WWE Studios' movie projects as well as increased rights fees from the licensing of new television programs and digital content, stronger sell-through rates of our home entertainment catalog titles and a reduction in certain talent-related expenses. The profit contribution margin increased to 40% compared to 22% in the prior-year quarter. Excluding the impact of film impairments, our Adjusted Profit contribution increased 27% to $46.4 million and our adjusted profit contribution margin was 40% compared to 32% in the prior-year quarter. (See Schedules of Adjustments in Supplemental Information.)
Selling, general and administrative expenses
SG&A expenses were $37.4 million for the current-year quarter as compared to $33.3 million in the prior-year quarter. These results reflected the return to a more normalized level of management incentive compensation, which resulted in a year-over-year increase of approximately $2.3 million, increased salary expenses, and incremental bad debt expense due, in part, to the bankruptcy of our former video game licensee. The rise in staffing costs (excluding management incentive compensation) was incurred to support the expansion of our television and digital content, including a potential network.
Depreciation and amortization
Depreciation and amortization expense totaled $5.9 million for the current-year quarter as compared to $4.1 million in the prior-year quarter. The increase in depreciation and amortization expense derives from our investment in assets to support our long-term growth objectives, including the launch of a potential network.
EBITDA
EBITDA was $8.5 million in the current-year quarter as compared to a loss of $9.0 million in the prior-year quarter. Improved results were driven by the performance of our movie portfolio and the licensing of additional television and digital content, partially offset by the aforementioned increase in SG&A expenses. Adjusted EBITDA (excluding the impact of network-related expenses and film impairments) increased 57% to $11.3 million from $7.2 million in the prior-year quarter.
Investment and Other (Expense) Income
Investment income, interest and other expense, net was a loss of $0.2 million in the current-year quarter compared to a loss of $0.2 million in the prior-year quarter.
Effective tax rate
The current year quarter's effective tax rate was 75%. The current quarter was adversely impacted by $0.4 million of additional tax expense as a result of differences between estimated and actual full year taxable income. Additionally, the fourth quarter rate reflected a $0.2 million increase in unrecognized tax benefits and $0.2 million to provide for dividends from a foreign subsidiary. In total, these items were responsible for 33 percentage points of the quarter's 75% effective rate.
Summary Results for the Year Ended December 31, 2012
Total revenues for the year ended December 31, 2012 were $484.0 million as compared to $483.9 million in the prior year. Operating income for the current year was $43.2 million versus $37.0 million in the prior year. Net income was $31.4 million, or $0.42 per share, as compared to $24.8 million, or $0.33 per share, in the prior year. EBITDA was $63.2 million for the current year as compared to $52.0 million in the prior year. Excluding items that impacted comparability on a year-over-year basis, Adjusted Operating income was $52.6 million compared to $64.4 million in the prior year, and Adjusted Net income was $38.6 million, or $0.51 per share, compared to $43.3 million, or $0.58 per share, in the prior year. On an “As Reported” basis, the results of WWE's portfolio of movies, including a $22.2 million reduction in film impairment charges, was a significant component of the rise in EBITDA for the year. Excluding the impact of these impairment charges and network-related expenses, “Adjusted” EBITDA declined 9% as growth from the licensing of new television programs and digital content, as well as improved results from our Pay-Per-View operations, were more than offset by lower video game sales, ongoing investment to support the company's long-term objectives, and $10.8 million in incremental expenses from the return to a more normalized level of management incentive compensation in the current year.
Year Ended December 31, 2012 - Results by Region and Business Segment
Revenues were essentially flat to the prior year as growth from North America was offset by a corresponding international decline. Revenue from North America increased 4%, or $15.4 million, as the licensing of new television programs and digital content, improved home entertainment sales, and a rise in the number of domestic live events were partially offset by lower revenues from our movie releases. Revenues from outside North America declined 11%, or $15.3 million, primarily due to an anticipated reduction in the number of live events and lower sales of licensed consumer products, particularly in the Latin American and EMEA regions.
The following tables reflect net revenues by region and by segment (in millions):
2012
2011
Net Revenues By Region:
350.5
2012
2011
Net Revenues By Segment:
340.0
Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $353.8 million for the current-year period as compared to $340.0 million in the prior-year period, representing an increase of 4%.
2012
2011
104.7
Consumer Products
Revenues from our Consumer Products businesses were $87.8 million for the current-year period as compared to $94.9 million in the prior-year period, representing a decrease of 7%.
December 31,
2012
December 31,
2011
54.4
Digital Media
Revenues from our Digital Media related businesses were $34.5 million as compared to $28.1 million in the prior-year period, representing an increase of 23%.
December 31,
2012
December 31,
2011
12.5
WWE Studios
During the current year, WWE Studios recognized revenue of $7.9 million as compared to $20.9 million in the prior year, reflecting the timing of releases from our movie portfolio. Film performance improved by $24.0 million over the prior year driven by the $22.2 million reduction of impairment charges in the current year.
Profit Contribution (Net revenues less cost of revenues)
Profit contribution increased 18% to $199.6 million primarily driven by reduced losses from our WWE Studios film projects, the strong performance of our Pay-Per-View events, and the licensing of new television programming and digital content. The growth in profit from these businesses was partially offset by reduced video game sales and the return to a more normalized level of management incentive compensation, which resulted in a $3.2 million increase in expenses on a year-over-year basis. Excluding the film impairment charges in the current and prior year, Adjusted Profit contribution increased 5% to $200.8 million and Adjusted Profit contribution margin increased to 41% from 40% in the prior year. (See Schedules of Adjustments in Supplemental Information.)
Selling, general and administrative expenses
SG&A expenses were $136.4 million for the current-year period as compared to $116.7 million in the prior-year period. This 17% increase reflected the return to a more normalized level of management incentive compensation, which resulted in a year-over-year increase of approximately $7.6 million, higher salary expenses as well as increased bad debt expense. The rise in staffing costs (excluding management incentive compensation) was incurred primarily to support a potential network. Network-related costs, including staffing costs, totaled $8.2 million in the current-year period. Excluding these costs in both periods, SG&A expenses increased 14% to $128.2 million from $112.7 million in the prior-year period.
EBITDA
EBITDA increased 22% to $63.2 million from $52.0 million in the prior year. The growth in profit contribution, driven by reduced losses from our WWE Studios film projects and the strong performance of our Pay-Per-View events, more than offset the aforementioned increase in SG&A expenses. Excluding the impact of network-related expenses and film impairments, however, Adjusted EBITDA declined 9% to $72.6 million from $79.4 million in the prior year.
Investment and Other Income (Expense)
Investment income was $2.2 million in the current year as compared to $2.1 million in the prior year. Interest expense of $1.7 million in the current year includes the amortization of loan origination costs and a fee on the unused portion of our revolving credit facility, which was established in the third quarter of 2011. Interest expense in the prior year was $0.6 million and related primarily to our mortgage which was repaid in full in 2012. Other expense was approximately $1.0 million in the current year as compared to $1.6 million in the prior year. The decline reflected changes in state taxes not based on income.
Effective tax rate
The effective tax rate was 26% in the current year as compared to 33% in the prior year. The current-year effective tax rate was positively impacted by the recognition of approximately $4.4 million in previously unrecognized tax benefits, primarily related to the settlement of several audits including the State of Connecticut, the IRS and other state and local jurisdictions.
Cash Flows
Net cash provided by operating activities was $63.0 million for the year ended December 31, 2012 as compared to $63.2 million in the prior year.
Purchases of property and equipment and other assets increased $6.0 million from the prior-year period to $33.9 million. The level of capital spending and the increase from the prior year were primarily due to investment in assets to develop the infrastructure which supports our efforts to create and distribute new content, including through a potential network.
Additional Information
Additional business metrics are made available to investors on a monthly basis on our corporate website - corporate.wwe.com.
Note: WWE will host a conference call on February 28, 2013 at 11:00 a.m. ET to discuss the Company's earnings results for the fourth quarter of 2012. All interested parties can access the conference call by dialing 855-993-1400 (conference ID: WWE). Please reserve a line 15 minutes prior to the start time of the conference call. A presentation that will be referenced during the call can be found at the Company web site at corporate.wwe.com. A replay of the call will be available approximately three hours after the conference call concludes, and can be accessed at corporate.wwe.com.
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 is broadcast in more than 145 countries and 30 languages and reaches more than 600 million homes worldwide. The company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, Miami, London, Mumbai, Shanghai, Singapore, Istanbul 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 maintaining and renewing key agreements, including television and pay-per-view programming distribution agreements; the need for continually developing creative and entertaining programming; the continued importance of key performers and the services of Vincent McMahon; the conditions of the markets in which we compete and acceptance of the Company's brands, media and merchandise within those markets; our exposure to bad debt risk; uncertainties relating to regulatory and litigation matters; risks resulting from the highly competitive nature of our markets; uncertainties associated with international markets; the importance of protecting our intellectual property and complying with the intellectual property rights of others; risks associated with producing and travelling to and from our large live events, both domestically and internationally; the risk of accidents or injuries during our physically demanding events; risks relating to our film business; risks relating to increasing content production for distribution on various platforms, including the potential creation of a WWE Network; risks relating to our computer systems and online operations; risks relating to the large number of shares of common stock controlled by members of the McMahon family and the possibility of the sale of their stock by the McMahons or the perception of the possibility of such sales; the relatively small public float of our stock; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. 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, general economic and competitive conditions and such other factors as our Board of Directors may consider relevant.
World Wrestling Entertainment, Inc.
Consolidated Income Statements
(In millions, except per share data)
(Unaudited)
2012
2011
2012
2011
World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(In millions)
(Unaudited)
2012
2011
World Wrestling Entertainment, Inc.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
2012
2011
World Wrestling Entertainment, Inc.
Supplemental Information – EBITDA
(In millions)
(Unaudited)
2012
2011
2012
2011
24.8
Non-GAAP Measure:
EBITDA is defined as net income (loss) before investment, interest and other expense/income, income taxes, depreciation and amortization. The Company's definition of EBITDA does not adjust its U.S. GAAP basis earnings for the amortization of Feature Film production assets. Although it is not a recognized measure of performance under U.S. GAAP, EBITDA is presented because it is a widely accepted financial indicator of a company's performance. The Company uses EBITDA to measure its own performance, set goals for operating managers, and in our calculations of compliance with debt covenants in conjunction with our credit facility. EBITDA 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 – Schedule of Adjustments
(In millions)
(Unaudited)
2012
2011
2012
2011
Non-GAAP Measure:
Adjusted Profit contribution, Adjusted Selling, general and administrative expenses, Adjusted Operating income and Adjusted EBITDA 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 – Schedule of Adjustments
(In millions, except per share data)
(Unaudited)
December 31,
2012
December 31,
2011
December 31,
2012
December 31,
2011
Non-GAAP Measure:
Adjusted Operating income, Adjusted Income before taxes, Adjusted Provision for taxes, 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 - Free Cash Flow
(In millions)
(Unaudited)
December 31,
2012
December 31,
2011
December 31,
2012
December 31,
2011
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 and for payment of dividends.
WWE
Investors: Michael Weitz 203-352-8642
Media: Tara Carraro 203-352-8625
Source: WWE