WWE Q4 AND FULL YEAR 2017 RESULTS FEBRUARY 8, …corporate.wwe.com/~/media/Files/W/WWE/press... ·...

W W E Q 4 A N D F U L L Y E A R 2 0 1 7 R E S U LT S – F E B R U A R Y 8 , 2 0 1 8

This presentation contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to

various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to: WWE Network (including the risk that we are unable to

attract, retain and renew subscribers); major distribution agreements; our need to continue to develop creative and entertaining programs and events; the

possibility of a decline in the popularity of our brand of sports entertainment; the continued importance of key performers and the services of Vincent K. McMahon;

possible adverse changes in the regulatory atmosphere and related private sector initiatives; the highly competitive, rapidly changing and increasingly fragmented

nature of the markets in which we operate and greater financial resources or marketplace presence of many of our competitors; uncertainties associated with

international markets; our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with applicable regulations; our

dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others’ intellectual property rights; the

complexity of our rights agreements across distribution mechanisms and geographical areas; potential substantial liability in the event of accidents or injuries

occurring during our physically demanding events including, without limitation, claims relating to CTE; large public events as well as travel to and from such events;

our feature film business; our expansion into new or complementary businesses and/or strategic investments; our computer systems and online operations; privacy

norms and regulations; a possible decline in general economic conditions and disruption in financial markets; our accounts receivable; our indebtedness; litigation;

our potential failure to meet market expectations for our financial performance, which could adversely affect our stock; Vincent K. McMahon exercises control over

our affairs, and his interests may conflict with the holders of our Class A common stock; a substantial number of shares are eligible for sale by the McMahons and

the sale, or the perception of possible sales, of those shares could lower our stock price; and the relatively small public “float” of our Class A common stock. In

addition, our dividend is dependent on a number of factors, including, among other things, our liquidity and historical and projected cash flow, strategic plan

(including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our

revolving credit facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant. Forward-looking

statements made by the Company speak only as of the date made and are subject to change without any obligation on the part of the Company to update or revise

them. Undue reliance should not be placed on these statements. For more information about risks and uncertainties associated with the Company’s business,

please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s SEC

filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q.

This presentation contains non-GAAP financial information, including OIBDA. We define OIBDA as operating income before depreciation and amortization,

excluding feature film and television production amortization and related impairments. OIBDA is a non-GAAP financial measure and may be different than similarly-

titled non-GAAP financial measures used by other companies. A limitation of OIBDA is that it excludes depreciation and amortization, which represents the periodic

charge for certain fixed assets and intangible assets used in generating revenues for the Company's business. OIBDA should not be regarded as an alternative to

operating income or net income as an indicator of operating performance, or to the statement of cash flows as a measure of liquidity, nor should it be considered in

isolation or as a substitute for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP

financial measure to OIBDA. Reconciliations of OIBDA to operating income can be found in the Company’s earnings release dated February 8, 2018.

Forward-Looking Statements

2

2017: Another Year of Record Achievements

▪ For the year, achieved record revenue of $801M and record Adjusted OIBDA of $112M, which wasat the high-end of our guidance

▪ For the year, WWE Network’s average paid subscribers increased 8% to 1.53M

▪ On social and digital platforms, WWE content reached a record 20B video views (up 32% from2016); social media engagements increased 4% to 1.2B

▪ WWE’s YouTube channel remained the #1 most viewed Sports Channel and the 2nd most viewedchannel on YouTube with 20B lifetime views

▪ Formed partnerships to create content across multiple platforms including:

- Mixed Match Challenge, a live in-ring series that launched on Facebook Watch on Jan 16;Facilitates mobile consumption and social interaction

- Miz & Mrs., a reality program that will air on USA Network

- Virtual reality experiences, partnered with NextVR to produce content from select 2018 specialevents for the NextVR app

▪ This January, we celebrated the 25th anniversary of Raw, which ranked #1 on cable and #3 on all ofTV; Best ratings in 3 years for the Jan 22 event

▪ Recently, held first women’s Royal Rumble, which was highlighted by appearance of Ronda Rousey

▪ Pleased with performance. Looking forward to 2018 and expect to achieve record revenue, recordAdjusted OIBDA and record subscribers

3

▪ 2018 financial results reflected the successful execution of WWE’s content strategy: to increase themonetization of video content by creating compelling original programming, leveraging a large socialand digital footprint to increase engagement, and utilizing data analytics to optimize performance

▪ Operating income increased 36% with a 10% increase in revenue to over $800M. WWE achieved thehighest annual revenue and Adjusted OIBDA in the Company’s history and exceeded the financialobjectives that were established at the start of 2017

WWE Financial Highlights 2017($ in millions)

4

$801.0$729.2

2017

+10%

2016 2017

$75.6

2016

+36%

$55.7 $80.1

+40%

2017

$111.9

2016

Revenue Operating Income Adjusted OIBDA1

1 A definition of Adjusted OIBDA and a reconciliation to Operating Income can be found in the Company’s Q4 and Full Year 2017 earnings materials and in the appendix to this presentation

Q4 2017: Financial Highlights ($ in millions)

125.0 135.2

38.635.2

30.027.8

1.12.49.6 1.6194.9

+9%211.6

MediaLive EventsConsumer ProductsWWE StudiosCorporate & Other

Revenue Adjusted OIBDA1

5

(49.0) (53.3)

63.548.1

11.1

+94%27.0

5.4

0.313.9

6.29.7

(1.1)

(45.5) (49.9)

66.451.2

11.1

9.76.2

(1.1)

34.8

20.5

+70%

1.8

5.4

Operating Income

Q4 2016 Q4 2016Q4 2016Q4 2017 Q4 2017 Q4 2017


Q4 2017: Media Division ($ in millions)

68.6 75.3

43.7 46.2

12.8 4.2

125.0

8.5

+8%135.2

0.9

TelevisionNetworkDigital MediaHome Entertainment


6

13.7

39.330.6

19.1

5.8

+32% 63.5

(0.7)

48.1

1.91.9

15.5

40.331.9

21.0

5.9

+30% 66.4

(0.8)

51.2

1.9 1.9

Operating Income

Q4 2016 Q4 2016Q4 2016Q4 2017 Q4 2017Q4 2017


Q4 2017: Live Events($ in millions)


7

35.2

38.6-9%

Q4 2016 Q4 2017

5.4

6.2

Q4 2016

-13%

Q4 2017

5.4

6.2 -13%

Q4 2016 Q4 2017

Operating Income


Q4 2017: Consumer Products($ in millions)


8

10.1 11.3

12.814.3

4.9

4.4

+8%

Q4 2017

30.0

Q4 2016

27.8

4.6

6.5

3.0

2.82.1

1.8

+14%

Q4 2017

11.1

Q4 2016

9.7

4.6

6.5

3.0

2.82.1

1.8

+14%

Q4 2017

11.1

Q4 2016

9.7

Operating Income

WWEShopVenue Merchandise Licensing


Capital Structure ($ in millions)

▪ As of Dec. 31, 2017, WWE held ~$297M in cash and short-term investments and had ~$100M indebt capacity under the Company’s revolving credit facility

▪ Free Cash Flow year-to-date increased ~$40M over the prior year period to ~$72M reflecting the change in cash from operating activities and $4.9 million paid towards the purchase of a building and underlying real property in the prior year period

9

Cash & ST Investments Free Cash Flow

$297.4

$267.1

$71.9

$32.2

+$39.7

+$30.3

2016 20162017 2017

WWE Operational Highlights 2017

▪ Made meaningful progress creating new content thatreflects the evolving preferences of fans, particularly asit relates to mobile consumption and social interaction

− Developed a new in-ring series, Mixed MatchChallenge, that premiered live on Facebook Watch

− Announced a new docuseries, Miz & Mrs., that willair on USA network

− Marked milestone in women’s evolution with firstRoyal Rumble match featuring female superstarsand surprise appearance of Ronda Rousey

▪ Continued to deliver strong viewership: Raw andSmackdown remained the #1 and #2 programs onUSA; WWE Network continued to be a leader in direct-to-consumer video; Digital consumption increased 32%to 20B video views

▪ Global sponsorship revenue across platformsincreased 30% in 2017

▪ Innovation across WWE: strengthened talent base,launched new mobile games, delivered #1 actionfigure, applied data analytics to enhance marketing…

10

Planned financial reporting changesEffective starting with Q1 2018 results

▪ Segment Reporting (Including Allocation of Business Support Costs)

▪ Adjusted OIBDA Definition

▪ Revenue Recognition

11

Revised Business Segment Reporting Effective starting with Q1 2018 results

12

Prior 10 Segments

Network

Television

Home Entertainment

Digital Media

WWE Studios

Live Events

Licensing

Venue Merchandise

WWE Shop

Corporate & Other

1

▪ WWE has executed a successful business transformation,with an increasing share of revenue coming from themonetization of video content

▪ Given this ongoing transformation, management hascontinued to evolve the way it analyzes results and allocatesresources

▪ To reflect its revised perspective, the Company isimplementing changes in the structure of its reportedsegments, reducing the number of reported segments from10 to 3 (WWE Studios to be included in Media)

▪ The Company plans to allocate certain “Business support”costs, such as talent development/training, marketing,business strategy and data analytics, to the revisedsegments

▪ Plan to provide greater visibility into WWE’s revenuestreams, such as entertainment rights fees, advertising andsponsorship revenue

▪ The Company believes the revised presentation of results willbe more informative for users of the financial statements andthat the revised structure and allocation of costs will be moreconsistent with that of its media peers

2

3

4

5

6

7

8

10

Revised Segments

Media

Live Events

Consumer

Products

Corporate

1

2

3

9

* Note: We also plan to evaluate and revise the

disclosure of key operating metrics

The revised business segments expected to reflect WWE’s operations as described below

13

Prior 10 Segments

Network

Television

Home Entertainment

Digital Media

WWE Studios

Live Events

Licensing

Venue Merchandise

WWE Shop

Corporate & Other

1

2

3

4

5

6

7

8

910

Revised Segments Key Drivers of Revenue and Performance

Media Production and monetization of content across platforms, including:

− Subscription and rights fees, advertising and sponsorship

− Long-form and short-form programs

− Distribution across WWE Network, pay television, digital/social media

and filmed entertainment outlets

Live Events Ticket sales of the Company's global live events, including primary and

secondary distribution

Consumer

Products

Licensing royalties and direct sales of branded merchandise, including:

− Video and mobile games, toys, apparel and other products

− Sold at retail, online and at WWE venues

Corporate Expect to reflect traditional "G&A" expenses such as finance, human

resources, information technology, facilities and legal

Expect to be treated as a reconciling item, not a separate segment

(See following page)

1

2

3

9

WWE plans to allocate certain business support costs (previously in “Corporate & Other”) to revised segments

14

Revised: Allocated or Kept as Reconciling ItemPrior Segment: Corporate & Other

Allocated to Revised Business Segments

(Media, Live Events, Consumer Products, Other)

Based primarily on segment share of total revenue

Business Support (Examples)

Talent Development

Performance Center

Sales & marketing

Business Strategy

Data Analytics

"Traditional” G&A

• Plan to allocate certain business support costs to the revised segments. These costs are more directly related to

producing and distributing WWE’s content and products, and therefore, more directly tied to generating revenue

• The remainder of the Company’s prior Corporate & Other expenses, such as costs associated with finance, human

resources, information technology, facilities and legal functions are expected to be reported as “Corporate”

expenses, which in aggregate are treated as a reconciling item rather than as a reported segment

Prior Segments: 2017 Revenue ($M)

❶ Network $198

- Subscriptions 184

- Pay-per-view 14

❷ Television 270

❸ Home Entertainment 9

❹ Digital Media 34

❺ WWE Studios 19

❻ Live Events 152

- North America 115

- International 34

- Travel Packages 4

❼ Licensing 52

❽ Venue Merchandise 24

❾ WWE Shop 38

❿ Corporate & Other 6

$801

Expect to provide enhanced visibility of revenue, such as rights, advertising and sponsorship

15

Revised Segments: 2017 Revenue ($M)

❶ Media $536

- Network Subscriptions 176

- Core entertainment rights fees 244

- Other content rights fees (1) 49

- Advertising and sponsorship 52

- Pay-per-view 14

❷ Live Events $152

- North America ticket sales 113

- International ticket sales 32

- Advertising and sponsorship 2

- Travel packages 4

❸ Consumer Products $114

- Consumer product licensing 52

- eCommerce 38

- Venue merchandise 24

$801

1 Includes Studios revenue

New primary measure of performance: Adjusted OIBDA … modified to exclude stock compensation

16

The Company plans to change its primary measure ofperformance from OIBDA to Adjusted OIBDA, and tomodify its definition of Adjusted OIBDA to excludestock-based compensation expense (a non-cashexpense that may vary from period to period withlimited correlation to operating performance)

The Company will continue to exclude certainimpairment charges and other non-recurring materialitems from its definition of Adjusted OIBDA as theseitems also impact the comparability of results betweenperiods

The Company believes Adjusted OIBDA is relevantbecause it provides a meaningful representation ofoperating cash flows and is a primary measure used bymedia investors, analysts and peers for purposes ofvaluation

The Company’s previously stated 2018 AdjustedOIBDA target of $115M equates to a target ofapproximately $140M based on the revised definition

Adjusted OIBDA (Revised definition)

Adjusted OIBDA is defined as operating income excluding

depreciation and amortization, stock-based compensation

expense, certain impairment charges and other non-recurring

materials items that otherwise would impact the comparability of

results between periods. Adjusted OIBDA includes amortization

expenses directly related to the Company’s revenue generating

activities including the amortization of feature film, television

production and WWE Network programming assets

Note: Adjusted OIBDA is a non-GAAP financial measure and may be different

than similarly-titled non-GAAP financial measures used by other companies.

WWE views operating income as the most directly comparable GAAP

measure. Adjusted OIBDA should not be considered in isolation of, or as a

substitute for operating income or other GAAP measures, such as net income

or operating cash flow, as an indicator of operating performance or liquidity

16

Reconciliation to Adjusted OIBDA (revised; $M)

2017 2018 Target

Operating Income (1) $75.6 -

Depreciation & amortization (1) 26.0 -

OIBDA (1) 101.6 -

Adjustments (2) 10.3 -

Adjusted OIBDA (Prior) 111.9 115.0

Stock Compensation 24.1 ~25.0

Adjusted OIBDA (Revised) $136.1 ~$140.0

1 At this time, WWE is unable to reconcile to GAAP measures for 2018, as the Company is unable to determine all of the adjustments that would be required2 2017 adjustments include $4.7 million in film impairment charges and non-recurring expenses of $5.6 million primarily related to certain legal matters and other contractual obligations

Revenue recognition: adoption of new FASB standard (Effective 1/1/18)

17

Existing Licensing

Accounting

• Royalties from the sale of licensed products recorded upon receipt of statements from individual licensees

• Unearned minimum guarantees are recorded as revenue after the end of the licensing contract

▪ In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customer (Topic 606)"

▪ Adoption of guidance requires WWE to record revenue

based on current period estimates rather than wait forstatements that show actual results

▪ The revised approach expected to have the mostsignificant impact on WWE’s licensing and filmedentertainment businesses, where it shifts the timing ofrevenue

▪ The Company anticipates changes in the quarterlytiming of revenue, but does not expect a material impact

on full-year results

▪ Specifically, the Company estimates an $11M to $13M

decline in licensing revenue from the first quarter 2017to the first quarter 2018

▪ WWE adopted the new standard January 1, 2018

New Licensing

Accounting

• Product royalties estimated during the period of sale(lagged reporting no longer acceptable)

• Fixed MG payments will not be deferred until the end of the contract.

Existing WWE Studios

Accounting

• In arrangements with distribution partners, revenue is recorded on a net basis after partners recoup distribution fees and expenses

• Participation statements are reported on a lag and not during the period of film sale/ exhibition

New WWE Studios

Accounting

• Feature film distribution revenue recorded in the period of film sales/ exhibition (based on estimates)

• For co-distributed films, where WWE receives a revenue share, revenue recorded in the period of film exhibition (not on a lag)

Note: As part of its implementation, the cumulativeeffect of initially applying the guidance - primarily

estimated Q4 2017 licensing royalties - will be

reflected as an adjustment to beginning retainedearnings

Adoption of the FASB guideline accelerates the timing

of licensing revenue as demonstrated below …

Basis of Revenue Recognition

Q1 2018 Q2 2018 Q3 2018 Q4 2018

2017 Accounting

Methodology

(If continued)

Statement of

Q4 2017

sales/ royalties

Statement of

Q1 2018

sales/ royalties

Statement of

Q2 2018

sales/ royalties

Statement of

Q3 2018

sales/ royalties

2018 Accounting

Methodology

(New Standard)

Estimate of

Q1 2018

sales/ royalties

Estimate of

Q2 2018

sales/ royalties

Estimate of

Q3 2018

sales/ royalties

Estimate of

Q4 2018

sales/ royalties

Statement of

Q4 2017

sales/ royalties

Q4 2017 product sales/ royalties which would be previously have been recorded in Q1 2018,

is recorded in the beginning balance of Q1 2018 retained earnings (and will not impact the

income statement)

Note:

18

18

Q1 2018 Business Outlook

19

▪ Estimate first quarter 2018 Adjusted OIBDA1 of$23M to $27M, excluding stock-basedcompensation expense

▪ As compared to the first quarter 2017, thisrange represents higher profits from theincreased monetization of content, which arepartially offset by the timing of lower licensingrevenue associated with the new FASBstandard for revenue recognition

▪ As shown (at right), on a pro-forma basis,reflecting 2017 revenue on a comparable basisto 2018, the range of first quarter 2018 AdjustedOIBDA represents growth of approximately $8Mto $12M

▪ WWE also projects Q1 2018 average paidsubscribers to WWE Network of approximately1.53 million

1 At this time, WWE is unable to reconcile to GAAP measures for 2018, as the Company is unable to determine all of the adjustments that would be required2 For Q1 2017, Adjustments include $2.1 million in film impairment charges and $5.6 million primarily related to certain legal matters and other contractual obligations3 Impact to Q1 2017 Adjusted OIBDA represents an approximate estimate of the effect due to the timing shift in our licensing business

Pro Forma Impact of New FASB standard on

Adjusted OIBDA (revised, $M)

2018 Q1 2017 Q1

Operating Income(1) - $4.0

Depreciation & amortization(1) - 6.9

OIBDA(1) - 10.9

Adjustments (2) - 7.7

Adjusted OIBDA (Prior) (1) 16 – 20 18.6

Stock Compensation 7 6.6

Adjusted OIBDA (Revised) 23 - 27 25.2

Estimated Impact Due to Changes in

Revenue Recognition Guidance (3) - ~(10)

Pro Forma Adjusted OIBDA $23 - $27 ~$15.2

▪ In 2018, expect to achieve another year of record revenueand previously targeted Adjusted OIBDA1 of at least$115M. Based on revised definition (excluding stockcompensation), this equates to an approximate 2018Adjusted OIBDA target of at least $140M

▪ Given significant long-term growth potential, our targetbalances near-term results with strategic investments

▪ For 2018, expect capital expenditures of $50M to $70Mreflecting, in part, the shift from 2017 (In 2017, plannedcapex to expand overall production capacity was largelydelayed)

▪ Expect long-term benefit from new tax law as the reducedcorporate rate more than offsets eliminations of deductionsfor domestic production and certain executivecompensation. Effective tax rate to decrease from ~36% to25-27% (ex discrete items)

▪ Key 2018 initiatives include delivering a wide range ofcontent across platforms, continuing to develop data andtechnology infrastructure and investing in markets with thegreatest long-term potential. Integral goal is finalizingdistribution in US, UK and India

2018 Full Year Outlook*

1 A definition of Adjusted OIBDA and a reconciliation to Operating Income can be found in the Company’s Q4 and Full Year 2017 earnings materials and in the appendix to this presentation* The Company’s business model and expected results will continue to be subject to significant execution risks, including those risks outlined in the Company’s Form 10-K filing with the SEC. See

additional notes on page 26 of this presentation

20

21

U.S.

U.K.

India

May - Sept. 2018

Second Half of 2018

First Half of 2019

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Q3

2019

Q4

2019

Q2

2018

K e y 2 0 1 8 I n i t i a t i v e s

Announce Future Distribution: U.S., U.K., India1

Expected Announcement of Future Distribution Plan

Expiration of Current Licensing Agreements

1 Future distribution is subject to negotiations, which are expected to begin next year. Although these announcements could occur either before or after these dates, management believes that these

ranges represent the most likely periods for such communication.

End of

Quarter

A P P E N D I X

Reconciliation of Non-GAAP Measures

23

Reconciliation of Adjusted OIBDA(1) to Operating Income

1 A definition of OIBDA and Adjusted OIBDA can be found on page 26 of this presentation. Source: WWE Q4 and Full Year 2017 Earnings 02/08/2018 (corporate.wwe.com/investors) 2 Adjustments to Q4 2017 and FY 2017 OIBDA reflects film impairment charges of $1.5 million and $4.7 million, respectively, considered to be material in the period in which they occurred, and

may differ from total film impairments 3 Adjustments to FY 2017 OIBDA of $5.6 million of non-recurring expenses primarily related to certain legal matters and other contractual obligations

Reconciliation of Net Cash to Free Cash Flow

$mm Q4 2016 Q4 2017 FY 2016 FY 2017

Net cash provided by operating activities 36.9$ 55.6$ 62.1$ 96.6$

Less cash used for capital expenditures:

Purchase of property and equipment and other assets (6.0) (7.0) (29.9) (24.7)

Free Cash Flow 30.9$ 48.6$ 32.2$ 71.9$

$mm Q4 2016 Q4 2017 FY 2016 FY 2017

Adjusted OIBDA $20.5 34.8$ 80.1$ 111.9$

Depreciation & amortization (6.6) (6.3) (24.4) (26.0)

Film Impairments (2) - (1.5) - (4.7)

Asset Impairments - - - -

Gain (loss) on operating assets - - - -

Restructuring charges - - - -

Other operating income items (3) - - - (5.6)

Operating Income (U.S. GAAP Basis) 13.9$ 27.0$ 55.7$ 75.6$


24

Reconciliation of Adjusted OIBDA (1)

1 A definition of OIBDA and Adjusted OIBDA can be found on page 26 of this presentation. Source: WWE Q4 and Full Year 2017 Earnings 02/08/2018 (corporate.wwe.com/investors)2 Adjustments to Q4 2017 OIBDA reflects film impairment charges of $1.5 million, considered to be material in the quarter in which they occurred

$mm

Operating

Income Depreciation OIBDA

Adjustments

to OIBDA

Adjusted

OIBDA

Network 13.7$ 1.8$ 15.5$ -$ 15.5$

Television 30.6 1.3 31.9 - 31.9

Home Entertainment 1.9 - 1.9 - 1.9

Digital Media 1.9 - 1.9 - 1.9

Live Events 6.2 - 6.2 - 6.2

Licensing 4.6 - 4.6 - 4.6

Venue Merchandise 2.1 - 2.1 - 2.1

WWEShop 3.0 - 3.0 - 3.0

WWE Studios (1.1) - (1.1) - (1.1)

Corporate & Other (49.0) 3.5 (45.5) - (45.5)

Total Operating Income 13.9$ 6.6$ 20.5$ -$ 20.5$

Three Months Ended December 31, 2016

$mm

Operating


Adjustments

to OIBDA

Adjusted

OIBDA

Network 19.1$ 1.9$ 21.0$ -$ 21.0$

Television 39.3 1.0 40.3 - 40.3

Home Entertainment (0.7) (0.1) (0.8) - (0.8)

Digital Media 5.8 0.1 5.9 - 5.9

Live Events 5.4 - 5.4 - 5.4

Licensing 6.5 - 6.5 - 6.5


WWEShop 2.8 - 2.8 - 2.8

WWE Studios (2) 0.3 - 0.3 1.5 1.8

Corporate & Other (53.3) 3.4 (49.9) - (49.9)

Total Operating Income 27.0$ 6.3$ 33.3$ 1.5$ 34.8$

Three Months Ended December 31, 2017


25

Reconciliation of Adjusted OIBDA (1)

1 A definition of OIBDA and Adjusted OIBDA can be found on page 26 of this presentation. Source: WWE Q4 and Full Year 2017 Earnings 02/08/2018 (corporate.wwe.com/investors)2 Adjustments to Full Year 2017 OIBDA reflects film impairment charges of $4.7 million, considered to be material in the quarter in which they occurred, and may differ from total film impairments3 Adjustments to OIBDA of $5.6 million of non-recurring expenses primarily related to certain legal matters and other contractual obligations

$mm

Operating


Adjustments

to OIBDA

Adjusted

OIBDA

Network 57.3$ 6.9$ 64.2$ -$ 64.2$

Television 134.7 4.7 139.4 - 139.4


Digital Media 10.0 0.2 10.2 - 10.2

Live Events 42.3 - 42.3 - 42.3

Licensing 31.1 - 31.1 - 31.1


WWEShop 8.3 - 8.3 - 8.3

WWE Studios (2) (3.6) - (3.6) 4.7 1.1

Corporate & Other (3)(215.2) 14.2 (201.0) 5.6 (195.4)

Total Operating Income 75.6$ 26.0$ 101.6$ 10.3$ 111.9$

Year Ended December 31, 2017

$mm

Operating


Adjustments

to OIBDA

Adjusted

OIBDA

Network 36.9$ 6.1$ 43.0$ -$ 43.0$

Television 114.8 5.0 119.8 - 119.8


Digital Media 4.3 0.3 4.6 - 4.6

Live Events 41.8 - 41.8 - 41.8

Licensing 27.4 - 27.4 - 27.4


WWEShop 7.3 - 7.3 - 7.3

WWE Studios (0.2) - (0.2) - (0.2)

Corporate & Other (191.7) 13.0 (178.7) - (178.7)

Total Operating Income 55.7$ 24.4$ 80.1$ -$ 80.1$

Year Ended December 31, 2016

Notes: Non-GAAP Measures

▪ The Company defines OIBDA as operating income before depreciation and amortization, excluding feature film and television

production asset amortization and related impairments, as well as the amortization of costs related to content delivery and

technology assets utilized for our WWE Network. OIBDA is a non-GAAP financial measure and may be different than similarly-titled

non-GAAP financial measures used by other companies. A limitation of OIBDA is that it excludes depreciation and amortization,

which represents the periodic charge for certain fixed assets and intangible assets used in generating revenues for the Company's

business. OIBDA should not be regarded as an alternative to operating income or net income as an indicator of operating

performance, or to the statement of cash flows as a measure of liquidity, nor should it be considered in isolation or as a substitute for

financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP

financial measure to OIBDA

▪ Adjusted OIBDA, Adjusted Operating income, Adjusted Net income and Adjusted Earnings per share exclude certain material items,

which otherwise would impact the comparability of results between periods. These should not be considered as an alternative to net

income, cash flows from operations or any other indicator of WWE's performance or liquidity, determined in accordance with U.S.

GAAP

▪ The Company defines Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. Although

it is not a recognized measure of liquidity under U.S. GAAP, Free Cash Flow provides useful information regarding the amount of

cash our continuing business is generating after capital expenditures, available for reinvesting in the business, debt service, and

payment of dividends

26

WWE Q4 AND FULL YEAR 2017 RESULTS FEBRUARY 8, …corporate.wwe.com/~/media/Files/W/WWE/press... ·...

Documents

Transcript of WWE Q4 AND FULL YEAR 2017 RESULTS FEBRUARY 8, …corporate.wwe.com/~/media/Files/W/WWE/press... ·...