WWE INVESTOR PRESENTATION
FORWARD-LOOKING STATEMENTS 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 acquisitions; 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, Adjusted OIBDA, Net Debt and Free Cash Flow. 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. In addition, we define Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA and Adjusted OIBDA, Total Debt is the most directly comparable GAAP financial measure to Net Debt, and net cash provided by operating activities is the most directly comparable GAAP financial measure to Free Cash Flow. Neither OIBDA, Adjusted OIBDA, Net Debt nor Free Cash Flow should be regarded as an alternative to the most directly comparably GAAP financial measure as an indicator of operating performance, or to the statement of cash flows as a measure of liquidity, nor should either metric be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. See the Appendix at the end of this presentation for a reconciliation of the non-GAAP measures presented herein. 1
I N V E S T M E N T R A T I O N A L E TRANSFORMING TO A NEW MEDIA GROWTH MODEL 1 ONE-OF-A-KIND MEDIA COMPANY EXECUTING SUCCESSFUL TRANSFORMATION LEVERAGING A POWERFUL MEDIA ECOSYSTEM MULTIPLE GROWTH DRIVERS STRONG FINANCIAL OUTLOOK THE NEW WWE Delivering Sustained Growth 2 2
W W E A T A G L A N C E : 2 0 1 7 H I G H L I G H T S DIVERSIFIED REVENUE STREAMS, GLOBAL PLAYER BUSINESS MODEL 2017 REVENUE (TTM 1 ) 2% 14% 25% Media Live Events North America $784M $784M 20% Consumer Products International 64% Studios/Other 75% PERFORMANCE (TTM 1 ) $784M $63M $98M $54M Up $84M Up $22M Up $27M Up $39M ADJUSTED OIBDA 2 FREE CASH FLOW 3 RECORD REVENUE OPERATING INCOME 1. Performance shown on a trailing twelve month basis from October 1, 2016 through September 30, 2017 2. A definition of Adjusted OIBDA and a reconciliation to Operating Income can be found in the appendix to this presentation 3. Free cash flow is a non-GAAP metric. A definition of Free Cash Flow and reconciliation to Net cash provided by operating activities is included in the appendix to this presentation 3
2 0 1 7 O P E R A T I N G H I G H L I G H T S KEY GROWTH DRIVERS CONTRIBUTING TO RECORD YEAR IN 2017 WWE Network Average Top 7 TV Agreements Continued Growth in Paid Subscribers 1,2 Contractual Escalation 2 International Revenue 1,2 $197M ~$213M $152M 1.5M ~$130M 1.0M +14% Axis Title +22% +18% 2015 TTM 2017 TTM 2014 2017E 2015 TTM 2017 TTM 2017 TTM Revenues Nearly Predictable Revenue Growth; Record highs 2X Historic PPV Revenues +~$105M from 2014 to 2018 1. Time periods represent Q3 trailing twelve months (TTMs) over the relevant period 2. Growth rates shown represent compound annual growth rates (CAGRs) over the relevant period 4
HISTORY OF CREATING COMPELLING CONTENT 6 BILLION HOURS OF 1,500 HOURS OF CONTENT CREATED CONTENT CONSUMED 4.3B 840M INTERNATIONAL U.S. 1,500 HOURS 550M 294M Note: FY 2016 data 5
LARGEST SOCIAL AND DIGITAL SPORTS PROPERTY IN THE WORLD 825 + Million GLOBAL FOLLOWERS Note: Respective platforms, all accounts. Quoted as of 9/30/17 6
LARGEST SOCIAL AND DIGITAL SPORTS PROPERTY IN THE WORLD 1.2 Billion ENGAGEMENTS Note: Respective platforms, all accounts. Quoted on a TTM basis as of Q3 2017 7
#1 SPORTS CHANNEL ON YOUTUBE 1. 2. 3. 17+ BILLION 4+ BILLION 3+ BILLION LIFETIME LIFETIME LIFETIME VIDEO VIEWS VIDEO VIEWS VIDEO VIEWS Social Blade, applies to uploaded content only, through October 2017. Lifetime total video views, uploaded plus user generated content: 32B (source: YouTube) 8
#2 OVERALL CHANNEL ON YOUTUBE 2. 1. 3. 21+ BILLION 17+ BILLION 16+ BILLION LIFETIME LIFETIME LIFETIME VIDEO VIEWS VIDEO VIEWS VIDEO VIEWS Source: Lifetime views based on Vidstatx: http://vidstatsx.com/youtube-top-100-most-viewed 9
B R A N D D E V E L O P M E N T H I G H L I G H T S OUR ENDURING GLOBAL APPEAL IS BASED ON BRINGING HEROES TO LIFE HEROES WE CAN LOOK UP TO HEROES WE CAN SEE IN OURSELVES # 1 Most Followed Active U.S. Athlete 45 M Ad Campaign in Partnership with FOLLOWERS Source: http://fanpagelist.com/category/athletes/ 10
WWE HAS CREATED HEROES IN THE RING FOR MORE THAN 5 DECADES 11
I N V E S T M E N T R A T I O N A L E TRANSFORMING TO A NEW MEDIA GROWTH MODEL ONE-OF-A-KIND MEDIA COMPANY 2 EXECUTING SUCCESSFUL TRANSFORMATION LEVERAGING A POWERFUL MEDIA ECOSYSTEM MULTIPLE GROWTH DRIVERS STRONG FINANCIAL OUTLOOK THE NEW WWE Delivering Sustained Growth 12 12
EXECUTING TRANSFORMATION TO NEW GROWTH MODEL 2015+ 2011-2014 New Media Model 1999-2010 Retooling for • WWE Network Transformation Traditional • Sustainable growth • Launched Media Model • Global expansion direct-to-consumer • New media ecosystem WWE Network • TV, Live Events, • Invested in new model Pay-Per-View • Powerful brand • Grew globally 13
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