TKO Reports Third Quarter 2023 Results
- The completion of the transaction to combine UFC and WWE creates potential synergies and new opportunities for TKO Group Holdings, Inc.
- The special one-time cash dividend of $3.86 per share of Class A common stock may be seen as a positive move by investors, potentially increasing shareholder confidence and attracting new investors.
- Third Quarter 2023 Financial Highlights show strong revenue, net income, and adjusted EBITDA, indicating a positive financial performance for the newly formed company.
- None.
TKO Transaction Highlights
- On September 12, 2023, Endeavor and WWE closed the transaction to combine UFC and WWE to form a new, publicly listed company, TKO Group Holdings, Inc.
-
On September 13, 2023, the Company declared a special one-time cash dividend of
$3.86
Third Quarter 2023 Financial Highlights
-
Revenue of
$449.1 million -
Net income of
$22.0 million -
Adjusted EBITDA1 of
$239.7 million - These results cover the period from July 1, 2023 through September 30, 2023 for UFC and the period from September 12, 2023 through September 30, 2023 for WWE
Third Quarter 2023 Operational Highlights and Recent Developments
- UFC held 13 events that consistently delivered strong viewership and attendance and set several all-time records for gross revenue at the respective arenas
- WWE entering into a five-year domestic media rights agreement with NBCUniversal for SmackDown beginning in October 2024
-
WrestleMania 40, to be held at Lincoln Financial Field in
Philadelphia in April 2024, sold more than 90,000 tickets in one day when it went on sale, breaking the record for all-time gate set at WrestleMania 39 - In October, UFC completed a multi-year sponsorship agreement, UFC’s biggest ever in the aggregate including cash and marketing assets, with AB InBev to become the exclusive “Official Global Beer Partner of UFC” effective January 1, 2024
-
In October, UFC agreed to an expansion of its presence in the Middle East North Africa (MENA) region with the extension of its partnership with the Department of Culture and Tourism –
Abu Dhabi to continue to host numbered events through 2028 and an agreement to bring up to 3 Fight Nights to the region annually, including its first event inSaudi Arabia in March 2024
"Since launching TKO on September 12th, our teams at WWE, UFC, and Endeavor have been focused on integration and executing our strategy," said Ariel Emanuel, CEO of TKO. "This includes identifying cost synergies at the high end of the range we guided, bringing events to new international markets including
Third-Quarter Consolidated Results
Revenue increased
UFC’s revenue was
Net Income was
Adjusted EBITDA1 increased
UFC’s Adjusted EBITDA was
Cash flows generated by operating activities were
Free Cash Flow2 was
Cash and cash equivalents were
Results by Operating Segment3
The schedule below reflects TKO’s performance by operating segment:
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||||
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Three Months Ended |
|
Nine Months Ended |
||||||||||||
(in millions) |
|
September 30, |
|
September 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
UFC |
|
$ |
397.5 |
|
|
$ |
340.7 |
|
|
$ |
1,009.4 |
|
|
$ |
868.4 |
|
WWE |
|
|
51.6 |
|
|
|
— |
|
|
|
51.6 |
|
|
|
— |
|
Total Revenue |
|
$ |
449.1 |
|
|
$ |
340.7 |
|
|
$ |
1,061.0 |
|
|
$ |
868.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
UFC |
|
$ |
238.3 |
|
|
$ |
204.5 |
|
|
$ |
612.8 |
|
|
$ |
526.5 |
|
WWE |
|
|
22.0 |
|
|
|
— |
|
|
|
22.0 |
|
|
|
— |
|
Corporate |
|
|
(20.6 |
) |
|
|
(14.0 |
) |
|
|
(48.9 |
) |
|
|
(38.5 |
) |
Total Adjusted EBITDA |
|
$ |
239.7 |
|
|
$ |
190.5 |
|
|
$ |
585.9 |
|
|
$ |
488.0 |
|
UFC
Third-Quarter 2023
Revenue increased
|
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|
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|
|
|
|
|
|
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|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
(in millions) |
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
UFC Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Media Rights & Content |
|
$ |
266.7 |
|
$ |
235.5 |
|
$ |
702.5 |
|
$ |
621.5 |
Live Events |
|
|
51.9 |
|
|
39.2 |
|
|
115.6 |
|
|
79.8 |
Sponsorship |
|
|
63.8 |
|
|
51.6 |
|
|
148.0 |
|
|
126.9 |
Consumer Products |
|
|
15.1 |
|
|
14.4 |
|
|
43.3 |
|
|
40.2 |
Total Revenue |
|
$ |
397.5 |
|
$ |
340.7 |
|
$ |
1,009.4 |
|
$ |
868.4 |
Adjusted EBITDA increased
Adjusted EBITDA margin remained flat at
WWE
Third-Quarter 2023
Revenue was
Including WWE activity for the period from July 1, 2023 through September 11, 2023, revenue was
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Three Months Ended |
|
Nine Months Ended |
||||||||
(in millions) |
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
WWE Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Media Rights & Content |
|
$ |
37.3 |
|
$ |
— |
|
$ |
37.3 |
|
$ |
— |
Live Events |
|
|
5.4 |
|
|
— |
|
|
5.4 |
|
|
— |
Sponsorship |
|
|
2.6 |
|
|
— |
|
|
2.6 |
|
|
— |
Consumer Products |
|
|
6.3 |
|
|
— |
|
|
6.3 |
|
|
— |
Total Revenue |
|
$ |
51.6 |
|
$ |
— |
|
$ |
51.6 |
|
$ |
— |
Adjusted EBITDA was
Including WWE activity for the period from July 1, 2023 through September 11, 2023, Adjusted EBITDA was
Adjusted EBITDA margin was
TKO Transaction
As previously disclosed, on September 12, 2023, Endeavor Group Holdings Inc. (“Endeavor”) and World Wrestling Entertainment, LLC (“WWE”) closed the transaction to combine the Ultimate Fighting Championship (“UFC”) and WWE to form a new, publicly listed company, TKO Group Holdings, Inc. (“TKO”). For the three and nine months ended September 30, 2023, the Company’s consolidated pre-tax results included
Return of Capital to Shareholders
As previously disclosed, on September 13, 2023, the Company announced the declaration of a special one-time cash dividend of
Notes
- The definition of Adjusted EBITDA can be found in the Non-GAAP Financial Measures section of the release on page 6. A reconciliation of Net Income to Adjusted EBITDA for the three and nine-month periods ended September 30, 2023 and 2022 can be found in the Supplemental Information in this release on page 13.
- The definition of Free Cash Flow can be found in the Non-GAAP Financial Measures section of the release on page 6. A reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow for the three and nine-month periods ended September 30, 2023 and 2022 can be found in the Supplemental Information in this release on page 14.
- An explanation of the basis of presentation can be found in this release on page 7.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under
The Company defines Adjusted EBITDA as net income excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by Revenue.
TKO management believes that Adjusted EBITDA is useful to investors as it eliminates the significant level of non-cash depreciation and amortization expense that results from its capital investments and intangible assets, and improves comparability by eliminating the significant level of interest expense associated with TKO’s debt facilities, as well as income taxes which may not be comparable with other companies based on TKO’s tax and corporate structure. Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate TKO’s consolidated operating performance.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of TKO’s results as reported under GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on TKO’s debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any cash requirement for such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items that are reflected in TKO’s statements of cash flows.
TKO management compensates for these limitations by using Adjusted EBITDA and Adjusted EBITDA margin along with other comparative tools, together with GAAP measurements, to assist in the evaluation of TKO’s operating performance.
Adjusted EBITDA and Adjusted EBITDA margin should not be considered substitutes for the reported results prepared in accordance with GAAP and should not be considered in isolation or as alternatives to net income as indicators of TKO’s financial performance, as measures of discretionary cash available to it to invest in the growth of its business or as measures of cash that will be available to TKO to meet its obligations. Although TKO uses Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of its business, such use is limited because it does not include certain material costs necessary to operate TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by TKO, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of TKO’s most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
The Company defines Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. TKO views net cash provided by operating activities as the most directly comparable GAAP measure. Although it is not a recognized measure of liquidity under
Basis of Presentation
As a result of the timing of the consummation of the business combination on September 12, 2023, TKO’s consolidated financial information presented herein include UFC’s results for the three and nine months ended September 30, 2023 and 2022, and only includes WWE’s results for the period from September 12, 2023 through September 30, 2023 following the closing of the transaction.
Information in this release includes results for the WWE operating segment and Corporate on a combined basis to include periods prior to the business combination. Information presented on a combined basis does not reflect any pro forma adjustments or other adjustments for costs related to integration activities, cost savings or synergies that have been or may be achieved if the business combination occurred on January 1, 2022.
Effective September 12, 2023, the Company operates its business under two reportable segments, UFC and WWE. The UFC segment consists entirely of the operations of the Company’s UFC business which was the sole reportable segment prior to the acquisition of WWE, while the WWE segment consists entirely of the operations of the WWE business acquired on September 12, 2023. In addition, it reports results for the “Corporate” group, which incurs expenses that are not allocated to the business segments. The Corporate group consists of general and administrative expenses that relate largely to corporate activities, including information technology, facilities, legal, human resources finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support both reportable segments. Corporate expenses also include management fees paid by the Company to Endeavor under the Services Agreement. All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation. The profitability measure employed by the Company and assessing operating performance, including that of its segments, is Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA includes depreciation and amortization expenses directly related to supporting the operations of the Company’s segments, including content production asset amortization, as well as amortization of right-of-use assets related to finance leases of equipment used to produce and broadcast live events.
Additional Information
As previously announced, TKO will host a conference call at 5:00 p.m. ET on November 7, 2023, to discuss its third quarter 2023 results. All interested parties are welcome to listen to a live webcast that will be hosted through the Company’s website at investor.tkogrp.com. Participants can access the conference call by dialing 1-833-470-1428 (conference ID: 747019). Please reserve a line 5-10 minutes prior to the start time of the conference call.
Any accompanying materials referenced during the call will be made available on November 7, 2023, at investor.tkogrp.com. A replay of the call will be available approximately two hours after the conference call concludes and can be accessed on the Company’s website.
About TKO
TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and entertainment company that comprises UFC, the world’s premier mixed martial arts organization, and WWE, an integrated media organization and the recognized global leader in sports entertainment. Together, our organizations reach more than 1 billion TV households in approximately 170 countries, and we organize more than 350 live events year-round, attracting over one million fans. TKO is majority owned by Endeavor Group Holdings, Inc. (NYSE: EDR), a global sports and entertainment company.
Website Disclosure
Investors and others should note that TKO announces material financial and operational information to its investors using press releases, SEC filings and public conference calls and webcasts, as well as its Investor Relations site at investor.tkogrp.com. TKO may also use its website as a distribution channel of material information about the Company. In addition, you may automatically receive email alerts and other information about TKO, UFC and WWE when you enroll your email address by visiting the “Investor Email Alerts” option under the Resources tab on investor.tkogrp.com.
Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding TKO’s business strategy and plans, financial condition, and anticipated financial performance. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to: TKO’s ability to generate revenue from discretionary and corporate spending on events; TKO’s dependence on key relationships with television and cable networks, satellite providers, digital streaming partners and other distribution partners; TKO’s ability to adapt to or manage new content distribution platforms or changes in consumer behavior; adverse publicity concerning the Company or its key personnel; the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which TKO operates; financial risks with owning and managing events for which TKO sells media and sponsorship rights, ticketing and hospitality; risks related to the integration and realization of the expected benefits of the business combination of UFC and WWE; the Company’s substantial indebtedness; and other important factors discussed in the section entitled “Risk Factors” in TKO’s final prospectus on Form 424(b)(3) filed with the United States Securities and Exchange Commission (the “SEC”) on September 19, 2023, as any such factors may be updated from time to time in TKO’s other filings with the SEC, including, without limitation, TKO’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 to be filed by TKO, accessible on the SEC’s website at www.sec.gov and TKO’s investor relations site at investor.tkogrp.com. Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, TKO undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
TKO Group Holdings, Inc. |
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Consolidated Income Statements |
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(In millions, except per share data) |
||||||||||||||||
(Unaudited) |
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|
||||
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Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
$ |
449.1 |
|
|
$ |
340.7 |
|
|
$ |
1,061.0 |
|
|
$ |
868.4 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct operating costs |
|
|
130.3 |
|
|
|
99.6 |
|
|
|
302.3 |
|
|
|
243.5 |
|
Selling, general and administrative expenses |
|
|
193.2 |
|
|
|
56.5 |
|
|
|
313.0 |
|
|
|
155.7 |
|
Depreciation and amortization |
|
|
31.7 |
|
|
|
15.0 |
|
|
|
61.9 |
|
|
|
45.0 |
|
Total operating expenses |
|
|
355.2 |
|
|
|
171.1 |
|
|
|
677.2 |
|
|
|
444.2 |
|
Operating income |
|
|
93.9 |
|
|
|
169.6 |
|
|
|
383.8 |
|
|
|
424.2 |
|
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
(60.6 |
) |
|
|
(35.3 |
) |
|
|
(172.4 |
) |
|
|
(90.8 |
) |
Other (expense) income, net |
|
|
(0.7 |
) |
|
|
0.4 |
|
|
|
(1.6 |
) |
|
|
(0.4 |
) |
Income before income taxes and equity (earnings) losses of affiliates |
|
|
32.6 |
|
|
|
134.7 |
|
|
|
209.8 |
|
|
|
333.0 |
|
Provision for income taxes |
|
|
11.2 |
|
|
|
5.0 |
|
|
|
17.7 |
|
|
|
12.5 |
|
Income before equity (earnings) losses of affiliates |
|
|
21.4 |
|
|
|
129.7 |
|
|
|
192.1 |
|
|
|
320.5 |
|
Equity (earnings) losses of affiliates, net of tax |
|
|
(0.6 |
) |
|
|
— |
|
|
|
0.3 |
|
|
|
— |
|
Net income |
|
|
22.0 |
|
|
|
129.7 |
|
|
|
191.8 |
|
|
|
320.5 |
|
Less: Net (loss) income attributable to non-controlling interests |
|
|
(22.5 |
) |
|
|
0.6 |
|
|
|
(21.7 |
) |
|
|
1.6 |
|
Less: Net income attributable to TKO Operating Company, LLC prior to the Transactions |
|
|
66.4 |
|
|
|
129.1 |
|
|
|
235.4 |
|
|
|
318.9 |
|
Net loss attributable to TKO Group Holdings, Inc. |
|
$ |
(21.9 |
) |
|
$ |
— |
|
|
$ |
(21.9 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net loss per share of Class A common stock |
|
$ |
(0.26 |
) |
|
|
N/A |
|
|
$ |
(0.26 |
) |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares used in computing basic and diluted net loss per share |
|
|
83,161,406 |
|
|
|
N/A |
|
|
|
83,161,406 |
|
|
|
N/A |
|
TKO Group Holdings, Inc. |
|||||||
Consolidated Balance Sheets |
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(In millions) |
|||||||
(Unaudited) |
|||||||
|
|
|
|
|
|
|
|
|
|
As of |
|||||
|
|
September 30, |
|
December 31, |
|||
|
|
2023 |
|
2022 |
|||
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
188.6 |
|
|
$ |
180.6 |
Accounts receivable, net |
|
|
195.8 |
|
|
|
45.4 |
Other current assets |
|
|
116.6 |
|
|
|
42.3 |
Total current assets |
|
|
501.0 |
|
|
|
268.3 |
Property, buildings and equipment, net |
|
|
568.1 |
|
|
|
175.0 |
Intangible assets, net |
|
|
3,679.9 |
|
|
|
475.8 |
Finance lease right-of-use assets, net |
|
|
236.2 |
|
|
|
— |
Operating lease right-of-use assets, net |
|
|
35.2 |
|
|
|
23.3 |
Goodwill |
|
|
7,644.1 |
|
|
|
2,602.6 |
Investments |
|
|
17.1 |
|
|
|
5.4 |
Other assets |
|
|
54.8 |
|
|
|
30.3 |
Total assets |
|
$ |
12,736.4 |
|
|
$ |
3,580.7 |
Liabilities, Non-controlling Interests and Stockholders'/Members' Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
20.9 |
|
|
$ |
16.9 |
Accrued liabilities |
|
|
244.7 |
|
|
|
108.2 |
Current portion of long-term debt |
|
|
26.7 |
|
|
|
22.7 |
Current portion of finance lease liabilities |
|
|
6.5 |
|
|
|
— |
Current portion of operating lease liabilities |
|
|
3.6 |
|
|
|
1.8 |
Deferred revenue |
|
|
94.5 |
|
|
|
71.6 |
Other current liabilities |
|
|
2.6 |
|
|
|
9.0 |
Total current liabilities |
|
|
399.5 |
|
|
|
230.2 |
Long-term debt |
|
|
2,719.5 |
|
|
|
2,736.3 |
Long-term finance lease liabilities |
|
|
233.0 |
|
|
|
— |
Long-term operating lease liabilities |
|
|
33.1 |
|
|
|
22.6 |
Deferred tax liabilities |
|
|
376.8 |
|
|
|
— |
Other long-term liabilities |
|
|
3.0 |
|
|
|
12.8 |
Total liabilities |
|
|
3,764.9 |
|
|
|
3,001.9 |
Commitments and contingencies |
|
|
|
|
|
|
|
Redeemable non-controlling interests |
|
|
11.1 |
|
|
|
9.9 |
Stockholders'/Members' equity: |
|
|
|
|
|
|
|
Class A common stock |
|
|
— |
|
|
|
— |
Class B common stock |
|
|
— |
|
|
|
— |
Members capital |
|
|
— |
|
|
|
568.1 |
Additional paid-in capital |
|
|
4,186.6 |
|
|
|
— |
Accumulated other comprehensive income |
|
|
0.2 |
|
|
|
0.8 |
Accumulated deficit |
|
|
(21.9 |
) |
|
|
— |
Total TKO Group Holdings, Inc. stockholders’/members' equity |
|
|
4,164.9 |
|
|
|
568.9 |
Nonredeemable non-controlling interests |
|
|
4,795.5 |
|
|
|
— |
Total stockholders'/members' equity |
|
|
8,960.4 |
|
|
|
568.9 |
Total liabilities, non-controlling interests and stockholders'/members' equity |
|
$ |
12,736.4 |
|
|
$ |
3,580.7 |
TKO Group Holdings, Inc. |
||||||||
Consolidated Statements of Cash Flows |
||||||||
(In millions) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Nine Months Ended |
||||||
|
|
September 30, |
||||||
|
|
2023 |
|
2022 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
191.8 |
|
|
$ |
320.5 |
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
61.9 |
|
|
|
44.9 |
|
Amortization and impairments of content costs |
|
|
13.2 |
|
|
|
10.6 |
|
Amortization of original issue discount and deferred financing cost |
|
|
7.9 |
|
|
|
7.7 |
|
Other amortization |
|
|
0.4 |
|
|
|
— |
|
Equity-based compensation |
|
|
36.1 |
|
|
|
18.1 |
|
Income taxes |
|
|
6.0 |
|
|
|
3.6 |
|
Other non-cash adjustments |
|
|
2.6 |
|
|
|
0.8 |
|
Changes in operating assets and liabilities, net of acquisition: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(46.2 |
) |
|
|
(27.1 |
) |
Other current assets |
|
|
19.4 |
|
|
|
16.2 |
|
Other noncurrent assets |
|
|
(11.4 |
) |
|
|
(12.2 |
) |
Accounts payable and accrued liabilities |
|
|
13.0 |
|
|
|
2.4 |
|
Deferred revenue |
|
|
(39.8 |
) |
|
|
(10.8 |
) |
Other liabilities |
|
|
(7.2 |
) |
|
|
2.1 |
|
Net cash provided by operating activities |
|
|
247.7 |
|
|
|
376.8 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property and equipment and other assets |
|
|
(12.6 |
) |
|
|
(9.5 |
) |
Investment in affiliates, net |
|
|
— |
|
|
|
(0.3 |
) |
Cash acquired from WWE |
|
|
381.2 |
|
|
|
— |
|
Payment of deferred consideration in the form of a dividend to former WWE shareholders |
|
|
(321.0 |
) |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
47.6 |
|
|
|
(9.8 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Repayment of long-term debt |
|
|
(24.5 |
) |
|
|
(24.5 |
) |
Redemption of profit units |
|
|
— |
|
|
|
(2.9 |
) |
Payments for financing costs |
|
|
(0.3 |
) |
|
|
— |
|
Distributions to members |
|
|
(260.5 |
) |
|
|
(794.7 |
) |
Net cash used in financing activities |
|
|
(285.3 |
) |
|
|
(822.1 |
) |
|
|
|
|
|
|
|
||
Effects of exchange rate movements on cash |
|
|
(2.0 |
) |
|
|
(1.0 |
) |
|
|
|
|
|
|
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
8.0 |
|
|
|
(456.1 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
180.6 |
|
|
|
874.7 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
188.6 |
|
|
$ |
418.6 |
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
159.9 |
|
|
$ |
77.3 |
|
Cash payments for income taxes |
|
$ |
11.9 |
|
|
$ |
11.0 |
|
NON-CASH INVESTING AND FINANCING TRANSACTIONS: |
|
|
|
|
|
|
||
Purchases of property and equipment recorded in accrued expenses and accounts payable |
|
$ |
4.9 |
|
|
$ |
0.9 |
|
Acquisition of WWE, net of deferred consideration |
|
$ |
8,111.1 |
|
|
$ |
— |
|
Accretion of redeemable non-controlling interests |
|
$ |
— |
|
|
$ |
(1.5 |
) |
Capital contribution from parent for equity-based compensation |
|
$ |
15.8 |
|
|
$ |
18.1 |
|
TKO Group Holdings, Inc. |
||||||||||||||||
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin |
||||||||||||||||
(In millions, except percentages) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|||||||||||
|
|
September 30, |
|
September 30, |
|
|||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|||||||
Net income |
|
$ |
22.0 |
|
|
$ |
129.7 |
|
|
$ |
191.8 |
|
|
$ |
320.5 |
|
Provision for income taxes |
|
|
11.2 |
|
|
|
5.0 |
|
|
|
17.7 |
|
|
|
12.5 |
|
Interest expense, net |
|
|
60.6 |
|
|
|
35.3 |
|
|
|
172.4 |
|
|
|
90.8 |
|
Depreciation and amortization |
|
|
31.7 |
|
|
|
15.0 |
|
|
|
61.9 |
|
|
|
45.0 |
|
Equity-based compensation expense (1) |
|
|
24.6 |
|
|
|
5.6 |
|
|
|
36.1 |
|
|
|
18.1 |
|
Merger and acquisition costs (2) |
|
|
67.5 |
|
|
|
— |
|
|
|
82.5 |
|
|
|
— |
|
Certain legal costs (3) |
|
|
6.3 |
|
|
|
0.3 |
|
|
|
6.8 |
|
|
|
0.6 |
|
Restructuring, severance and impairment (4) |
|
|
15.1 |
|
|
|
— |
|
|
|
15.1 |
|
|
|
— |
|
Other adjustments (5) |
|
|
0.7 |
|
|
|
(0.4 |
) |
|
|
1.6 |
|
|
|
0.5 |
|
Total Adjusted EBITDA |
|
$ |
239.7 |
|
|
$ |
190.5 |
|
|
$ |
585.9 |
|
|
$ |
488.0 |
|
Net income margin |
|
|
5 |
% |
|
|
38 |
% |
|
|
18 |
% |
|
|
37 |
% |
Adjusted EBITDA margin |
|
|
53 |
% |
|
|
56 |
% |
|
|
55 |
% |
|
|
56 |
% |
(1) |
Equity-based compensation represents primarily non-cash compensation expense for awards issued under Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the Replacement Awards and for awards issued under the 2023 Incentive Award Plan. For the three and nine months ended September 30, 2023, equity-based compensation includes |
(2) |
Includes certain costs of professional fees and bonuses related to the TKO transaction and payable contingent on the closing of the TKO transaction. |
(3) |
Includes costs related to certain litigation matters including matters where Vincent K. McMahon has agreed to make future payments to certain counterparties personally. |
(4) |
For the three and nine months ended September 30, 2023 includes costs resulting from the Company’s cost reduction program. For more information, please refer to the Company’s various filings with the SEC, including, but not limited to, Note 16, Restructuring Charges, of its Form 10-Q for the three months ended September 30, 2023. |
(5) |
For the three months ended September 30, 2023 and 2022, other adjustments was comprised primarily of losses of
|
TKO Group Holdings, Inc. |
||||||||||||||||
Reconciliation of Free Cash Flow |
||||||||||||||||
(In millions) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net cash provided by operating activities |
|
$ |
67.0 |
|
|
$ |
138.3 |
|
|
$ |
247.7 |
|
|
$ |
376.8 |
|
Less cash used for capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment and other assets |
|
|
(3.4 |
) |
|
|
(2.2 |
) |
|
|
(12.6 |
) |
|
|
(9.5 |
) |
Free Cash Flow |
|
$ |
63.6 |
|
|
$ |
136.1 |
|
|
$ |
235.1 |
|
|
$ |
367.3 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20231107874822/en/
Investors: Seth Zaslow szaslow@tkogrp.com
Media: press@tkogrp.com
Source: TKO Group Holdings, Inc.
FAQ
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