| FOR IMMEDIATE RELEASE | Contacts: |
| Investors: Michael Weitz 203-352-8642 |
| Media: Robert Zimmerman 203-359-5131 |
WWE® Reports 2010 Second Quarter Results
STAMFORD, Conn., August 5, 2010 - World Wrestling Entertainment, Inc. (NYSE:WWE) today announced financial results for its second quarter ended June 30, 2010. Revenues totaled $106.8 million in the second quarter, yielding operating income of $10.3 million and net income of $6.3 million, or $0.08 per share. Impacting comparability to the prior year quarter is the timing of our annual WrestleMania® event, which occurred in the first quarter of 2010 and the second quarter of 2009. Excluding the effects of WrestleMania in the prior year quarter, 2009 second quarter revenues were $106.6 million, operating income was $13.1 million and net income was $10.2 million, or $0.14 per share.
“In the second quarter, our performance fell below management expectations as trends weakened in the latter part of the quarter. Although we believe the continued softness in the economy played a part in our results, recent changes in our talent base may have also impacted key operating metrics, particularly domestic pay-per-view buys and live event attendance,” stated Vince McMahon, Chairman and Chief Executive Officer. “In addition, our profitability was negatively affected by the reduction in revenue from high margin businesses and by the logistical costs related to the Icelandic volcano. We view some of these factors as temporary and, looking ahead, we remain confident in our ability to address these challenges by producing compelling content and cultivating consumer demand. On a positive note, the second quarter reflected improved results in our Home Video business and our continued success in managing our expenses.”
Comparability of Results
WrestleMania XXVI occurred on March 28, 2010, and consequently, was included in our first quarter financial results. However, WrestleMania XXV occurred on April 5, 2009 and was included as part of our second quarter results in 2009. WrestleMania XXV contributed approximately $32.2 million of revenues, $15.0 million of profit contribution ($9.7 million, net of tax) and $0.13 of EPS from across our various business lines in the prior year quarter. For comparative purposes, a schedule excluding the impact of WrestleMania XXV has been provided in the supplemental information included in this release.
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Results by Business Segment
Revenues from North America decreased by 32% while revenues outside North America increased 3%, led by our Live and Televised Entertainment segment. Excluding the impact of WrestleMania XXV, revenues from North America decreased 5% and outside North America increased 11%. In addition, there was an approximate $0.7 million favorable impact from foreign exchange rates.
The following tables reflect net revenues by segment and by region for the three months ended June 30, 2010 and June 30, 2009. (Dollars in millions)
| Three Months Ended |
| June 30, | | June 30, |
| Net Revenues | | 2010 | | 2009 |
| Live and Televised Entertainment | $ | 77.4 | | $ | 109.2 |
| Consumer Products | | 23.3 | | | 20.9 |
| Digital Media | | 5.4 | | | 7.9 |
| WWE Studios | | 0.7 | | | 0.8 |
| Total | $ | 106.8 | | $ | 138.8 |
| | | | | | |
| Three Months Ended |
| June 30, | | June 30, |
| Net Revenues by Region | | 2010 | | 2009 |
| North America | $ | 70.5 | | $ | 103.5 |
| Europe, Middle East & Africa (EMEA) | | 21.6 | | | 25.3 |
| Asia Pacific (APAC) | | 7.0 | | | 6.4 |
| Latin America | | 7.7 | | | 3.6 |
| Total | $ | 106.8 | | $ | 138.8 |
| | | | | | |
Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $77.4 million for the current quarter as compared to $109.2 million in the prior year quarter. The 29% decrease in revenues primarily reflects the impact of WrestleMania XXV as previously discussed. Excluding the impact of WrestleMania XXV in the prior year quarter, revenues from our Live and Televised Entertainment businesses were approximately $77.0 million. As such, revenues from our Live and Televised Entertainment businesses were consistent with the prior year quarter on an adjusted basis.
- Live Event revenues were $29.2 million as compared to $34.4 million in the prior year quarter, primarily due to the timing of WrestleMania. WrestleMania XXV generated approximately $8.4 million in revenue in the prior year quarter.
- There were 90 total events, including 28 international events, during the current quarter as compared to 78 events, including 27 international events in the prior year quarter, primarily due to the timing and logistics of our event touring schedule.
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- North American events generated $14.3 million of revenues from 62 events as compared to $20.6 million from 51 events in the prior year quarter. North American average attendance decreased 29% to approximately 5,800 from 8,200 in the prior year quarter. The average ticket price for North American events was $39.50 in the current quarter as compared to $46.25 in the prior year quarter. Excluding the impact of WrestleMania XXV in the prior year quarter, revenues were $12.2 million, North American average attendance was 7,200 and average ticket price was $34.47.
- International events generated approximately $14.9 million of revenues from 28 events as compared to $13.8 million from 27 events in the prior year quarter. This rise reflects a successful Latin America tour, including sponsorship revenue and promoter fees, one additional event and a slight increase in average attendance to approximately 8,200 from 8,100. Average ticket prices were $61.47 as compared to $62.77 in the prior year quarter.
- Pay-Per-View revenues were $10.4 million as compared to $35.6 million in the prior year quarter. There were three pay-per-view events produced in the current quarter as compared to five events in the prior year quarter. Excluding the impact of WrestleMania XXV in the prior year quarter, pay-per-view revenues totaled approximately $14.6 million. Beginning in January 2010, the suggested domestic retail price of non-WrestleMania pay-per-view events increased $5.00 to $44.95.
The details for the number of buys (in 000s) are as follows:
| | | Three Months Ended | | Three Months Ended |
| Events | | June 30, 2010 | | June 30, 2009 |
| WrestleMania | | - | | 960 |
| Backlash® | | - | | 182 |
| Over the Limit™/Judgment Day® | | 197 | | 228 |
| Extreme Rules™ | | 182 | | 213 |
| Fatal 4 Way™/The Bash™ | | 143 | | 178 |
| |
| Prior events | | 10 | | 58 |
| Total | | 532 | | 1,819 |
| | | | | |
- Television Rights Fees revenues were $30.8 million as compared to $28.3 million in the prior year quarter. This increase was primarily due to license fees received from our new WWE Superstars television show and contractual increases from our existing programs.
- Venue Merchandise revenues were $4.3 million as compared to $6.3 million in the prior year quarter. The decrease is due to lower per capita sales, which were $9.74 in the current quarter as compared to $11.26 in the prior year quarter. Excluding the impact of WrestleMania XXV, revenues were $4.9 million and per capita sales were $9.29 in the prior year quarter.
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Consumer Products
Revenues from our Consumer Products businesses were $23.3 million versus $20.9 million in the prior year quarter. Consumer Products revenues increased 11% primarily due to the performance of our Home Video business.
- Home Video net revenues were $11.5 million as compared to $8.6 million in the prior year quarter. This rise reflects higher sales of new release and catalog titles. In addition, the quarter had 7 new releases as compared to 5 in the prior year quarter. Shipments increased 29% to approximately 1,072,000 units in the current period. This was partially offset by a 12% decline in the average price per unit to approximately $12.71 reflecting discounted sales and promotions.
- Licensing revenues were $8.7 million as compared to $9.0 million in the prior year quarter, as lower video game and music sales more than offset increased toy sales. Revenues related to video games and music declined by approximately $3.0 million while revenues from toys increased by approximately $2.4 million in the current quarter. The prior year quarter benefited from the launch of a new video game title, Legends of WrestleMania.
- Magazine publishing net revenues were $2.5 million as compared to $3.0 million in the prior year quarter, primarily reflecting lower sell-through rates in the current quarter.
Digital Media
Revenues from our Digital Media related businesses were $5.4 million as compared to $7.9 million in the prior year, representing a 32% decrease.
- WWE.com revenues were $3.0 million as compared to $4.5 million in the prior year quarter, primarily reflecting a decline in online advertising and wireless revenues.
- WWEShop revenues were $2.4 million as compared to $3.4 million in the prior year quarter. The number of orders decreased by 24% to approximately 47,000 while the average revenue per order declined to $50.73 as compared to $51.97 in the prior year quarter.
WWE Studios
During the current quarter, we recorded revenue of $0.7 million related to previously released films as compared to $0.8 million in the prior year quarter. We participate in revenues generated by the distribution of these films after the print, advertising and distribution costs incurred by our distributors have been recouped and the results have been reported to us. Accordingly, we have not recorded revenues for 12 Rounds or The Marine 2. In September, we expect to release our next film project, Legendary. Under our revised film strategy, Legendary will be self-distributed and marketed by WWE. As such, we expect to begin recognizing revenues and expenses associated with the film in our third quarter results.
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Profit Contribution (Net revenues less cost of revenues)
Profit contribution decreased to $43.8 million in the current quarter as compared to $63.0 million in the prior year quarter. The lower profit contribution reflects, in part, approximately $15.0 million in WrestleMania XXV related profit in the prior year quarter. Gross profit contribution margin decreased to approximately 41% as compared to 45% in the prior year quarter, driven by a reduction in revenue from our higher margin businesses, such as pay-per-view. In addition, our profitability was negatively affected by approximately $1 million in logistical costs related to the Icelandic volcano. Excluding the impact of WrestleMania XXV in the prior year quarter, our profit contribution decreased $4.2 million or 9% in the current quarter.
Selling, general and administrative expenses
SG&A expenses were $30.1 million for the current quarter as compared to $31.3 million in the prior year quarter, reflecting decreases in bad debt, advertising expense and staff related expenses.
Depreciation and amortization
Depreciation and amortization expense was $3.4 million for the current quarter as compared to $3.6 million in the prior year quarter.
EBITDA
EBITDA was approximately $13.7 million in the current quarter as compared to $31.7 million in the prior year quarter. Excluding the impact of WrestleMania XXV in the prior year quarter, adjusted EBITDA was $16.7 million.
Investment and Other (Expense) Income
The decline in investment income of $0.7 million in the current quarter reflects lower average investment balances in addition to lower average interest rates. Other expense of $1.0 million, as compared to other income of $1.5 million in the prior year quarter, reflects realized foreign exchange gains and losses and the revaluation of warrants held in certain licensees.
Effective tax rate
The effective tax rate was 35% in both the current and prior year quarters.
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Summary Results for the Six Months Ended
Total revenues through the six months ended June 30, 2010 were $245.6 million as compared to $246.6 million in the prior year period. Operating income for the current year was $47.6 million versus $44.8 million in the prior year period. Net income was $31.0 million, or $0.41 per share, as compared to $30.2 million, or $0.41 per share, in the prior year period. EBITDA was $52.8 million for the current six month period as compared to $52.2 million in the prior year period.
The following charts reflect net revenues by segment and by geographical region for the six months ended June 30, 2010 and June 30, 2009. (Dollars in millions)
Revenues from outside North America increased 15%, in part due to an approximate $2.8 million favorable impact from foreign exchange rates.
| Net Revenues by Segment |
| Six Months Ended |
| June 30, | | June 30, |
| 2010 | | 2009 |
| Live and Televised Entertainment | $ | 175.7 | | $ | 173.3 |
| Consumer Products | | 54.0 | | | 54.0 |
| Digital Media | | 11.8 | | | 14.8 |
| WWE Studios | | 4.1 | | | 4.5 |
| Total | $ | 245.6 | | $ | 246.6 |
| | | | | | |
| Net Revenues by Region |
| Six Months Ended |
| June 30, | | June 30, |
| 2010 | | 2009 |
| North America | $ | 177.5 | | $ | 187.3 |
| Europe, Middle East & Africa (EMEA) | | 40.6 | | | 41.4 |
| Asia Pacific (APAC) | | 14.8 | | | 12.6 |
| Latin America | | 12.7 | | | 5.3 |
| Total | $ | 245.6 | | $ | 246.6 |
| | | | | | |
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Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $175.7 million for the current period as compared to $173.3 million in the prior year period, an increase of 1%.
| June 30, | | June 30, |
| 2010 | | 2009 |
| Live Events | $ | 55.2 | | $ | 52.4 |
| Pay-Per-View | $ | 42.8 | | $ | 49.2 |
| Venue Merchandise | $ | 10.8 | | $ | 10.9 |
| Television Rights Fees | $ | 60.2 | | $ | 53.2 |
| Television Advertising | $ | 2.9 | | $ | 3.1 |
| WWE Classics On Demand | $ | 2.5 | | $ | 3.0 |
Consumer Products
Revenues from our Consumer Products businesses were $54.0 million in both the current and prior year periods.
| June 30, | | June 30, |
| 2010 | | 2009 |
| Home Video | $ | 19.1 | | $ | 17.8 |
| Licensing | $ | 28.6 | | $ | 28.8 |
| Magazine Publishing | $ | 5.3 | | $ | 6.5 |
Digital Media
Revenues from our Digital Media related businesses were $11.8 million as compared to $14.8 million in the prior year, a decrease of 20%.
| June 30, | | June 30, |
| 2010 | | 2009 |
| WWE.com | $ | 6.4 | | $ | 8.4 |
| WWEShop | $ | 5.4 | | $ | 6.4 |
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WWE Studios
We recorded revenue of $4.1 million in the current period related to four of our releases, See No Evil, The Marine, The Condemned, and Behind Enemy Lines: Colombia as compared to $4.5 million in the prior year period, which was led by the performance of The Marine. As discussed above, we have not recorded revenues for 12 Rounds or The Marine 2. In September, we expect to release our next film project, Legendary. Under our revised film strategy, Legendary will be self-distributed and marketed by WWE. As such, we expect to begin recognizing revenues and expenses associated with the film in our third quarter results.
Profit Contribution (Net revenues less cost of revenues)
Profit contribution decreased to $108.8 million in the current period as compared to $114.4 million in the prior year period, reflecting a reduction in revenue from our higher margin businesses, such as pay-per-view. Total profit contribution margin decreased to approximately 44% as compared to 46% in the prior year period.
Selling, general and administrative expenses
SG&A expenses were $55.9 million for the current period as compared to $62.2 million in the prior year period, reflecting declines in legal and professional fees, bad debt and staff related expenses. Prior period expenses include the impact of our corporate restructuring of approximately $2.2 million in severance costs. Excluding the impact of severance costs, adjusted SG&A expenses were $60.0 million for the prior year period.
EBITDA
EBITDA for the current period was approximately $52.8 million as compared to $52.2 million in the prior year period. Excluding the impact of severance costs, adjusted EBITDA for the prior year period was $54.4 million.
Investment and Other Income (Expense)
The $0.8 million decline in investment income in the current period reflects lower average interest rates. Other expense of $2.1 million in the current period as compared to other income of $0.1 million in the prior year period includes the revaluation of warrants held in certain licensees and realized foreign exchange gains and losses.
Effective tax rate
The effective tax rate was 33% in the current period as compared to 35% in the prior year period. The decrease in tax rate year over year was primarily driven by increased benefits from Internal Revenue Code (IRC) Section 199 related to qualified domestic production activities.
Cash Flows
Net cash provided by operating activities was $24.9 million for the six months ended June 30, 2010 as compared to $75.0 million in the prior year period. This decrease was driven by the timing of feature film investments and changes in working capital, including changes in the WWE’s tax position. Capital expenditures were $6.7 million for the current period as compared to $2.9 million in the prior year period.
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Additional Information
Additional business metrics are made available to investors on a monthly basis on our corporate website – corporate.wwe.com.
Note: World Wrestling Entertainment, Inc. will host a conference call on August 5, 2010 at 11:00 a.m. ET to discuss the Company’s earnings results for the second quarter of 2010. All interested parties can access the conference call by dialing 888-647-2706 (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.
World Wrestling Entertainment, Inc., 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, PG content across all of its platforms including television programming, pay-per-view, digital media and publishing. WWE programming is broadcast in more than 145 countries and 30 languages and reaches more than 500 million homes worldwide. The company is headquartered in Stamford, Conn., with offices in New York, Los Angeles, Chicago, London, Shanghai, Singapore, Tokyo, Toronto and Mexico City. Additional information on World Wrestling Entertainment, Inc. (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, copyrights and logos are the exclusive property of World Wrestling Entertainment, Inc. and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.
Forward-Looking Statements: This news 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 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; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to regulatory and litigation matters; risks resulting from the highly competitive nature of our markets; the importance of protecting our intellectual property and complying with the intellectual property rights of others; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; risks relating to our film business and any new business initiative which we may undertake; risks relating to the large number of shares of common stock controlled by members of the McMahon family; 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 significant and 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, including a waiver by the McMahon family of a portion of the dividends.
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World Wrestling Entertainment, Inc.
Consolidated Income Statements
(in thousands, except per share data)
(Unaudited)
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, | | June 30, | | June 30, |
| 2010 | | 2009 | | 2010 | | 2009 |
| Net revenues | $ | 106,842 | | | $ | 138,794 | | $ | 245,567 | | | $ | 246,619 |
| |
| Cost of revenues | | 63,094 | | | | 75,750 | | | 136,779 | | | | 132,187 |
| Selling, general and administrative expenses | | 30,083 | | | | 31,372 | | | 55,962 | | | | 62,229 |
| Depreciation and amortization | | 3,411 | | | | 3,593 | | | 5,250 | | | | 7,376 |
| |
| Operating income | | 10,254 | | | | 28,079 | | | 47,576 | | | | 44,827 |
| |
| Investment income, net | | 497 | | | | 1,175 | | | 980 | | | | 1,791 |
| Interest expense | | 67 | | | | 88 | | | 138 | | | | 179 |
| Other (expense) income, net | | (1,030 | ) | | | 1,457 | | | (2,072 | ) | | | 132 |
| |
| Income before income taxes | | 9,654 | | | | 30,623 | | | 46,346 | | | | 46,571 |
| |
| Provision for income taxes | | 3,403 | | | | 10,749 | | | 15,358 | | | | 16,375 |
| |
| Net income | $ | 6,251 | | | $ | 19,874 | | $ | 30,988 | | | $ | 30,196 |
| |
| Earnings per share – basic: | | | | | | | | | | | | | |
| Net income | $ | 0.08 | | | $ | 0.27 | | $ | 0.42 | | | $ | 0.41 |
| |
| Earnings per share – diluted: | | | | | | | | | | | | | |
| Net income | $ | 0.08 | | | $ | 0.27 | | $ | 0.41 | | | $ | 0.41 |
| |
| Shares used in per share calculations: | | | | | | | | | | | | | |
| Basic | | 74,303 | | | | 73,513 | | | 74,267 | | | | 73,494 |
| Diluted | | 75,230 | | | | 74,279 | | | 75,228 | | | | 74,137 |
| | | | | | | | | | | | | | |
10
World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(dollars in thousands)
(Unaudited)
| As of | | As of |
| June 30, | | December 31, |
| 2010 | | 2009 |
| ASSETS | | | | | | |
| |
| CURRENT ASSETS: | | | | | | |
| |
| Cash and equivalents | $ | 97,776 | | | $ | 149,784 |
| Short-term investments | | 99,797 | | | | 58,440 |
| Accounts receivable, net | | 48,123 | | | | 62,732 |
| Inventory, net | | 1,628 | | | | 2,182 |
| Prepaid expenses and other current assets | | 30,934 | | | | 21,721 |
| |
| Total current assets | | 278,258 | | | | 294,859 |
| |
| PROPERTY AND EQUIPMENT, NET | | 81,740 | | | | 84,376 |
| |
| FEATURE FILM PRODUCTION ASSETS | | 49,923 | | | | 37,053 |
| |
| INVESTMENT SECURITIES | | 14,727 | | | | 22,370 |
| |
| INTANGIBLE ASSETS, NET | | 218 | | | | 276 |
| |
| OTHER ASSETS | | 1,594 | | | | 1,687 |
| |
| TOTAL ASSETS | $ | 426,460 | | | $ | 440,621 |
| |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| |
| CURRENT LIABILITIES: | | | | | | |
| Current portion of long-term debt | $ | 1,125 | | | $ | 1,082 |
| Accounts payable | | 20,953 | | | | 21,281 |
| Accrued expenses and other liabilities | | 25,063 | | | | 35,164 |
| Deferred income | | 20,409 | | | | 14,603 |
| |
| Total current liabilities | | 67,550 | | | | 72,130 |
| |
| LONG-TERM DEBT | | 2,216 | | | | 2,790 |
| NON-CURRENT TAX LIABILITIES | | 13,215 | | | | 17,152 |
| NON-CURRENT DEFERRED INCOME | | 10,706 | | | | 11,528 |
| |
| STOCKHOLDERS' EQUITY: | | | | | | |
| Class A common stock | | 270 | | | | 257 |
| Class B common stock | | 465 | | | | 477 |
| Additional paid-in capital | | 332,928 | | | | 326,008 |
| Accumulated other comprehensive income | | 2,718 | | | | 2,377 |
| Retained (deficit) earnings | | (3,608 | ) | | | 7,902 |
| Total stockholders' equity | | 332,773 | | | | 337,021 |
| |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 426,460 | | | $ | 440,621 |
| | | | | | | |
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World Wrestling Entertainment, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
| Six Months Ended |
| June 30, | | June 30, |
| 2010 | | 2009 |
| OPERATING ACTIVITIES: | | | | | | | |
| Net income | $ | 30,988 | | | $ | 30,196 | |
| Adjustments to reconcile net income to net cash provided by | | | | | | | |
| operating activities: | | | | | | | |
| Amortization of feature film production assets | | 2,507 | | | | 2,530 | |
| Revaluation of warrants | | (226 | ) | | | 699 | |
| Depreciation and amortization | | 5,251 | | | | 7,376 | |
| Realized gain on sale of investments | | (52 | ) | | | (613 | ) |
| Amortization of investment income | | 776 | | | | 627 | |
| Stock compensation costs | | 4,957 | | | | 3,036 | |
| (Recovery) provision for doubtful accounts | | (606 | ) | | | 1,847 | |
| Provision for inventory obsolescence | | 961 | | | | 1,000 | |
| Benefit from deferred income taxes | | (5,484 | ) | | | (971 | ) |
| Excess tax benefit from stock-based payment arrangements | | (193 | ) | | | (1 | ) |
| Changes in assets and liabilities: | | | | | | | |
| Accounts receivable | | 15,215 | | | | (823 | ) |
| Inventory | | (407 | ) | | | 765 | |
| Prepaid expenses and other assets | | (6,015 | ) | | | 9,043 | |
| Feature film production assets | | (15,610 | ) | | | (1,311 | ) |
| Accounts payable | | (328 | ) | | | 1,177 | |
| Accrued expenses and other liabilities | | (11,767 | ) | | | 21,244 | |
| Deferred income | | 4,982 | | | | (792 | ) |
| Net cash provided by operating activities | | 24,949 | | | | 75,029 | |
| |
| INVESTING ACTIVITIES: | | | | | | | |
| Purchase of property and equipment | | (6,626 | ) | | | (2,875 | ) |
| Proceeds from infrastructure incentives | | 4,130 | | | | - | |
| Purchase of other assets | | (60 | ) | | | (37 | ) |
| Purchase of short-term investments | | (63,003 | ) | | | (18,806 | ) |
| Proceeds from sales or maturities of investments | | 29,414 | | | | 30,630 | |
| Net cash (used in) provided by investing activities | | (36,145 | ) | | | 8,912 | |
| |
| FINANCING ACTIVITIES: | | | | | | | |
| Repayments of long-term debt | | (532 | ) | | | (492 | ) |
| Dividends paid | | (41,579 | ) | | | (40,959 | ) |
| Issuance of stock, net | | 508 | | | | 508 | |
| Proceeds from exercise of stock options | | 598 | | | | 252 | |
| Excess tax benefit from stock-based compensation arrangements | | 193 | | | | 1 | |
| Net cash used in financing activities | | (40,812 | ) | | | (40,690 | ) |
| |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | (52,008 | ) | | | 43,251 | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | 149,784 | | | | 119,655 | |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 97,776 | | | $ | 162,906 | |
| | | | | | | | |
12
World Wrestling Entertainment, Inc.
Supplemental Information - Adjusted Income Statement
Excluding Impact of WrestleMania XXV
(dollars in millions)
(Unaudited)
| | Q2 2010 | | Q2 2009 | | Q2 2009 | | Q2 2009 |
| | Reported | | Reported | | WM XXV | | Adjusted |
| Revenues: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Live & Televised Entertainment | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Live Events | | $ | 29.2 | | | $ | 34.4 | | | $ | 8.4 | | $ | 26.0 | |
| Venue Merchandise | | | 4.3 | | | | 6.3 | | | | 1.4 | | | 4.9 | |
| Pay-Per-View | | | 10.4 | | | | 35.6 | | | | 21.0 | | | 14.6 | |
| Television Rights Fees | | | 30.8 | | | | 28.3 | | | | - | | | 28.3 | |
| Television Advertising | | | 1.5 | | | | 1.7 | | | | - | | | 1.7 | |
| Other | | | 1.2 | | | | 2.9 | | | | 1.4 | | | 1.5 | |
| Total Live & Televised Entertainment | | | 77.4 | | | | 109.2 | | | | 32.2 | | | 77.0 | |
| | | | | | | | | | | | | | | | |
| Consumer Products | | | 23.3 | | | | 20.9 | | | | - | | | 20.9 | |
| | | | | | | | | | | | | | | | |
| Digital Media | | | 5.4 | | | | 7.9 | | | | - | | | 7.9 | |
| | | | | | | | | | | | | | | | |
| WWE Studios | | | 0.7 | | | | 0.8 | | | | - | | | 0.8 | |
| Total Revenues | | $ | 106.8 | | | $ | 138.8 | | | $ | 32.2 | | $ | 106.6 | |
| | | | | | | | | | | | | | | | |
| Profit Contribution | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Live & Televised Entertainment | | $ | 29.3 | | | $ | 46.9 | | | $ | 15.0 | | $ | 31.9 | |
| Consumer Products | | | 12.9 | | | | 12.9 | | | | - | | | 12.9 | |
| Digital Media | | | 2.0 | | | | 3.4 | | | | - | | | 3.4 | |
| WWE Studios | | | (0.4 | ) | | | (0.2 | ) | | | - | | | (0.2 | ) |
| | | | | | | | | | | | | | | | |
| PROFIT CONTRIBUTION | | $ | 43.8 | | | $ | 63.0 | | | $ | 15.0 | | $ | 48.0 | |
| | | | | | | | | | | | | | | | |
| Selling, General & Administrative | | | 30.1 | | | | 31.3 | | | | - | | | 31.3 | |
| | | | | | | | | | | | | | | | |
| EBITDA | | $ | 13.7 | | | $ | 31.7 | | | $ | 15.0 | | $ | 16.7 | |
| | | | | | | | | | | | | | | | |
| Depreciation & Amortization | | | 3.4 | | | | 3.6 | | | | - | | | 3.6 | |
| | | | | | | | | | | | | | | | |
| Operating Income | | $ | 10.3 | | | $ | 28.1 | | | $ | 15.0 | | $ | 13.1 | |
| | | | | | | | | | | | | | | | |
| Investment, interest and other (expense) | | | | | | | | | | | | | | | |
| income, net | | | (0.7 | ) | | | 2.5 | | | | - | | | 2.5 | |
| | | | | | | | | | | | | | | | |
| Income before taxes | | $ | 9.6 | | | $ | 30.6 | | | $ | 15.0 | | $ | 15.6 | |
| | | | | | | | | | | | | | | | |
| Provision for income taxes | | | 3.3 | | | | 10.7 | | | | 5.3 | | | 5.4 | |
| | | | | | | | | | | | | | | | |
| Net Income | | $ | 6.3 | | | $ | 19.9 | | | $ | 9.7 | | $ | 10.2 | |
| | | | | | | | | | | | | | | | |
| EPS basic and diluted | | $ | 0.08 | | | $ | 0.27 | | | $ | 0.13 | | $ | 0.14 | |
| | | | | | | | | | | | | | | | |
13
World Wrestling Entertainment, Inc.
Supplemental Information - EBITDA
(dollars in thousands)
(Unaudited)
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, | | June 30, | | June 30, |
| | 2010 | | 2009 | | 2010 | | 2009 |
| Net income reported on U.S. GAAP basis | | $ | 6,251 | | $ | 19,874 | | | $ | 30,988 | | $ | 30,196 | |
| | | | | | | | | | | | | | | |
| Provision for income taxes | | | 3,403 | | | 10,749 | | | | 15,358 | | | 16,375 | |
| | | | | | | | | | | | | | | |
| Investment, interest and other expense (income), net | | | 600 | | | (2,544 | ) | | | 1,230 | | | (1,744 | ) |
| | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 3,411 | | | 3,593 | | | | 5,250 | | | 7,376 | |
| | | | | | | | | | | | | | | |
| EBITDA | | $ | 13,665 | | $ | 31,672 | | | $ | 52,826 | | $ | 52,203 | |
| | | | | | | | | | | | | | | |
Non-GAAP Measure:
EBITDA is defined as net income 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 and to set goals for operating managers. EBITDA should not be considered as an alternative to net income, cash flows from operations or any other indicator of World Wrestling Entertainment Inc.’s performance or liquidity, determined in accordance with U.S. GAAP.
14
World Wrestling Entertainment, Inc.
Supplemental Information- Free Cash Flow
(dollars in thousands)
(Unaudited)
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, | | June 30, | | June 30, |
| | 2010 | | 2009 | | 2010 | | 2009 |
| Net cash (used in) provided by operating activities | | $ | (13,094 | ) | | $ | 27,711 | | | $ | 24,949 | | | $ | 75,029 | |
| |
| Less cash used in capital expenditures: | | | | | | | | | | | | | | | | |
| Purchase of property and equipment | | | (3,879 | ) | | | (1,407 | ) | | | (6,626 | ) | | | (2,875 | ) |
| Proceeds from infrastructure incentives | | | 890 | | | | - | | | | 4,130 | | | | - | |
| Purchase of other assets | | | - | | | | (21 | ) | | | (60 | ) | | | (37 | ) |
| | | | | | | | | | | | | | | | | |
| Free Cash Flow | | $ | (16,083 | ) | | $ | 26,283 | | | $ | 22,393 | | | $ | 72,117 | |
| | | | | | | | | | | | | | | | | |
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.
15
