1. Review the PDF directly above this discussion link which contains financial statements for WWE Entertainment. Provide at least 4 observations you notice when looking over the financial statements after reflecting on what you have learned from the videos and reading. You could discuss trends, perhaps compare to other companies (you would need to find those financial statements online), discuss if you feel this would be a good company to invest in and the overall health of the organization.
2. What is the GAAP created and why is it important?
3. Provide a current example of a company that has ethically violated accounting principles, what happened, what was the penalty? Why is ethics in accounting important?
Provide at least 4 observations you notice when looking over the financial statements . You could discuss trends, perhaps compare to other companies . discuss if you feel this would be a good company to invest in and the overall health of the organization.
Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) For the years ended December 31, 2017 2018 930,160 5 800,959 2016 729,216 503,667 80,747 64,750 24,411 55,641 3,020 Net revenues Operating expenses Marketing and selling expenses General and administrative expenses Depreciation and amortization Operating income Interest expense Other income, net Income before income taxes Provision for income taxes Net income Earnings per share: basic Earnings per share: diluted Weighted average common shares outstanding: Basic Diluted Dividends declared per common share (Class A and B) 609,182 95,985 85,446 25,069 114,478 15,405 6,964 106,037 6,449 99,588 1.28 1.12 538,525 82,837 77.969 26,050 75,578 14,736 3,218 64,060 31,420 32,640 0.43 0.42 592 $ S 53,213 19,372 33,841 0.44 0.44 $ $ 77,536 88,619 0.48 76,743 78,471 0.48 76,149 77,539 0.48 $ $ Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STA TEMENTS OF COMPREHENSIVE INCOME (in thousands) For the years ended December 31, 2018 2017 99,588 $ 32,640 S 2016 33,841 (339) 120 (209) Net income Other comprehensive income (loss): Foreign currency translation adjustments Unrealized holding (losses) gains on available-for-sale debt securities (net of tax expense (benefit) of $(167). $(334) and $57, respectively) Total other comprehensive loss Comprehensive income 93 (530) (869) 98,719 (644) (524) 32,116 (116) 33,725 $ $ Table of Contents W ORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except per share data) Common Stock Class A Shares Amount Shares 34.215 342 41,689 S Accumulated Additional Other Paid - in Comprehensive Accumulated Capital Income Deficit 369,643 S 3,011 S (164,096 33,841 Amount 417 Total 209,317 33,841 (116) 1,397 (116) 500 1.392 3,740 (3.740) 33,060 33,060 (34,100) 19,460 (34,100) 19,460 (5,544) (37,048) 893 484 18.099 403 3.87 (5.544) 893 (36,564) 18099 239,743 32,640 (524) 1,578 (167,303) $ 32,640 1,571 Balance, December 31, 2015 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Tax effect from stock-based payment arrangements Cash dividends declared Stock-based compensation Balance, December 31, 2016 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Balance, December 31, 2017 Cumulative effect of adopting ASC 606 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Other Balance, December 31, 2018 3,340 (3,340) 2,487 (2,558) 1.460 IIIIIII! 2,487 (2,558) 1,460 (9,164) 874 (37,728) 346 $ 24.151 422,208 2,371 S (172.391) S 10,086 99,588 (9,164) (36,854) 24.151 252.959 10,086 99,588 (869) 1,948 (869) 1,939 (50,798) 1,366 39,304 1.262 4152815 (50,798) (37,243) 39,304 1.262 316,237 1,721 07 14,90 0 215201 152 (101,326) S 00.20 See accompanying notes to consolidated financial statements F-6 Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31, 2018 2016 2017 99,588 S 32,6405 33,841 17,377 21.137 32,030 6,662 26,933 29,396 8,822 29,568 31,767 (882) (2,767) 6,142 39.304 (1.058) 2,024 (2,720) 6,759 24.151 13,572 1.003 (2.893) 2.403 18,099 12,153 (1,463) (3.527) (12,507) (1.801) 579 131 (7,973) (1.204) (30,478) 26,750 (9.936) 186,719 (12.540) (15,921) 8,112 (14,835) 96,588 5,459 (364) (15,474) (6,629) (28,025) (1,041) (16,892) 62,165 (29,904) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Amortization and impairments of feature film production assets Amortization of television production assets Depreciation and amortization Gain on equity investments, net Services provided in exchange for equity instruments Other amortization Stock-based compensation (Benefit from) provision for deferred income taxes Other non-cash adjustments Cash (used in provided by changes in operating assets and liabilities Accounts receivable Inventory Prepaid expenses and other assets Feature film production assets Television production assets Accounts payable, accrued expenses and other liabilities Deferred income Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment and other assets Purchases of short-term investments Proceeds from sales and maturities of short-term investments Purchase of equity investments Other Net cash used in investing activities FINANCING ACTIVITIES Repayment of debt Dividends paid Debt issuance costs Proceeds from borrowings under the credit facilities Proceeds from borrowings on convertible notes, net of issuance costs Proceeds from issuance of warrants Purchase of convertible note hedge Taxes paid related to net settlement upon vesting of equity awards Proceeds from issuance of stock Excess tax benefits from stock-based payment arrangements Net cash (used in provided by financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes, net of refunds Cash paid for interest NON-CASH INVESTING AND FINANCING TRANSACTIONS Purchases of property and equipment recorded in accounts payable and accrued expenses (See Note 10) Mortgage assumption (See Note 12) (32.275) (94,910) 61,428 (1,330) 1,000 (66,087) (24,710) (142,373) 35,660 (2,316) 8,065 (2,250) (133,739) (24,089) (4.782) (37,243) (7,504) (36,854) 1,383 14,534 1.460 (2,558) (9.164) 1.578 (50,798) 1.948 (14,441) (36,564) (702) 11,583 193,899 19,460 (34,100) (5.544) 1.397 893 135,881 173,957 38,019 211.976 (90,875) 29,757 137,700 167,457 (37,125) (74,276) 211.976 137,700 $ $ 10,1075 8.899 $ 14,5905 9,3125 12,475 1.580 2,3345 13,464 - 5 $ 2,940 23,000 See accompanying notes to consolidated financial statements. WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS in thousands, except per share data) Net revenues Operating expenses Marketing and selling expenses General and administrative expenses Depreciation and amortization Operating income Interest expense Other income, net Income before income taxes Provision for income taxes Net income Earnings per share: basic Earnings per share diluted Weighted average common shares outstanding Basic Diluted Dividends declared per common share (Class A and B) For the years eaded December 31, 2018 2017 930,160 5 800.959 $ 609,182 538,525 95,985 82,837 85,446 77,969 25,069 26,050 114,478 75,578 15,405 14,736 6,964 3,218 106,037 64,060 6,449 31,420 99 SRR 32,640 12R 0.43 2016 729,216 503,667 80,747 64,750 24,411 55,641 3,020 592 53,213 19,372 33,841 0.44 044 112 042 76.743 77,536 88,619 76,149 77,539 048 Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) 2016 $ For the years ended December 31, 2017 99.588 99,588 $ 32,640 $ 33,841 (339) 120 (209) Net income Other comprehensive income (loss): Foreign currency translation adjustments Unrealized holding (losses) gains on available-for-sale debt securities (net of tax expense (benefit) of $(167), S(334) and $57, respectively) Total other comprehensive loss Comprehensive income 93 (530) (869) 98,719 (644) (524) 32,116 $ $ S (116) 33,725 WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) As of December 31. 2018 2017 167,457 $ 191,686 137,700 159,744 65,245 78,925 7,753 28,187 474,008 148,089 13,558 7.473 30.196 17,138 9,837 700,299 8,332 19,961 390,982 131,325 22,300 7,292 27,367 18,984 16,257 614,507 $ $ 4,638 ASSETS CURRENT ASSETS: Cash and cash equivalents Short-term investments, net Accounts receivable (net of allowance for doubtful accounts and returns of $1,009 and $3,035, respectively) Inventory Prepaid expenses and other current assets Total current assets PROPERTY AND EQUIPMENT, NET FEATURE FILM PRODUCTION ASSETS, NET TELEVISION PRODUCTION ASSETS, NET INVESTMENT SECURITIES DEFERRED INCOME TAX ASSETS, NET OTHER ASSETS, NET TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt Convertible debt Accounts payable and accrued expenses Deferred income Total current liabilities LONG-TERM DEBT CONVERTIBLE DEBT OTHER NON-CURRENT LIABILITIES Total liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Class A common stock (5.01 par value, 180,000,000 shares authorized 43,721,411 and 42,498,452 shares issued and outstanding as of December 31, 2018 and 2017, respectively) Class B convertible common stock: (8.01 par value; 60,000,000 shares authorized; 34,303,438 and 34,609,438 shares issued and outstanding as of December 31, 2018 and 2017, respectively) Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total stockholders' equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 5,118 183,090 120,158 49,173 357,539 25,696 77,738 55,818 138,194 30,958 177,900 14,496 361,548 827 384,062 437 343 415,281 1,502 (101,326) 316,237 700,299 346 422,208 2,371 (172,391) 252,959 614,507 $ W ORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except per share data) Common Stock Class B Shares 34.215 Amount 342 SharesAmount 41.689 Accumulated Additional Other Paid in Comprehensive Accumulated Capital Income Deficit $ 369,643 S 3,011 $ (164,096) $ 33,841 (116) 1.392 Total 209,317 33,841 (116) 1,397 500 (3.7401 33,060 33,060 (34,100) 19,460 (34,100) 19,460 (5.544) (5,544) 893 893 484 (37,048) 18.099 403387 2.895 $ (167,303) $ 32,640 (36,564) 18,099 239,743 32,640 (524) 1,578 Balance, December 31, 2015 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, met (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Tax cffect from stock-based payment arrangements Cash dividends declared Stock-based compensation Balance, December 31, 2016 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of wamants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Balance, December 31, 2017 Cumulative effect of adopting ASC 606 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Taxes paid related to be settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Other Balance, December 31, 2018 0.340) Il 2,487 (2,558) 1,460 11 SI (9.164) 874 24.151 (37,728) 2,487 (2,558) 1.460 (9,164) (36,854) 24.151 252.959 10,086 99,588 (869) 1,948 2.371 $ (172.391) S 10,086 99,588 - (38.609) (50,798) 1,366 39,304 1.262 415281 (50,798) (37,243) 39,304 1.262 316,237 43,721 43734,30 s 30 1.502 (101,326 S WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31. 2018 2017 2016 99,588 5 32,640 $ 33,841 17,377 21,137 32,030 6,662 26 933 29,396 8,822 29,568 31,767 (882) (2,767) 6,142 39 304 (1.058) 2,024 (2.720) 6,759 24,151 13,572 1,003 (2,893) 2 403 18.099 12.153 (1,463) (3.527) 579 (7.973) (1.204) (30.478) 26,750 (9.936) 186,719 (12,507) (1,801) 131 (12,540) (15.921) 8112 (14,835) 96 588 5,459 (364) (15,474) (6,629) (28,025) (1,041) (16,892) 62,165 (29.904) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Amortization and impairments of feature film production assets Amortization of television production assets Depreciation and amortization Gain on equity investments, net Services provided in exchange for equity instruments Other amortization Stock-based compensation (Benefit from) provision for deferred income taxes Other non-cash adjustments Cash (used in provided by changes in operating assets and liabilities: Accounts receivable Inventory Prepaid expenses and other assets Feature film production assets Television production assets Accounts payable, accrued expenses and other liabilities Deferred income Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment and other assets Purchases of short-term investments Proceeds from sales and maturities of short-term investments Purchase of equity investments Other Net cash used in investing activities FINANCING ACTIVITIES Repayment of debt Dividends pard Debt issuance costs Proceeds from borrowings under the credit facilities Proceeds from borrowings on convertible notes, net of issuance costs Proceeds from issuance of warrants Purchase of convertible note hedge Taxes paid related to net settlement upon vesting of equity awards Proceeds from issuance of stock Excess tax benefits from stock-based payment arrangements Net cash (used in provided by financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes, net of refunds Cash paid for interest NON-CASH INVESTING AND FINANCING TRANSACTIONS Purchases of property and equipment recorded in accounts payable and accrued expenses (See Note 10) Mortgage assumption (See Note 12) (32.275) (94.910) 61.428 (1,330) 1,000 (66,087) (24,710) (142,373) 35 660 (2.316) 8,065 (2.250) (133,739) (24.089) (4.782) (37,243) (7.504) (36,854) 1,383 14,534 1,460 (2.558) (9.164) 1.578 (14 441) (36,564) (702) 11,583 193,899 19,460 (34,100) (5.544) 1,397 893 135 RRI 173.957 38.019 211.976 (50,798) 1.948 (90,875) 29,757 137,700 167,457 (37,125) (74.276) 211,976 137,700 10,107 8,899 $ $ 14,590 9,312 $ S 12,475 1,580 13.464 5 2,334 $ 2,940 23,000 Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) For the years ended December 31, 2017 2018 930,160 5 800,959 2016 729,216 503,667 80,747 64,750 24,411 55,641 3,020 Net revenues Operating expenses Marketing and selling expenses General and administrative expenses Depreciation and amortization Operating income Interest expense Other income, net Income before income taxes Provision for income taxes Net income Earnings per share: basic Earnings per share: diluted Weighted average common shares outstanding: Basic Diluted Dividends declared per common share (Class A and B) 609,182 95,985 85,446 25,069 114,478 15,405 6,964 106,037 6,449 99,588 1.28 1.12 538,525 82,837 77.969 26,050 75,578 14,736 3,218 64,060 31,420 32,640 0.43 0.42 592 $ S 53,213 19,372 33,841 0.44 0.44 $ $ 77,536 88,619 0.48 76,743 78,471 0.48 76,149 77,539 0.48 $ $ Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STA TEMENTS OF COMPREHENSIVE INCOME (in thousands) For the years ended December 31, 2018 2017 99,588 $ 32,640 S 2016 33,841 (339) 120 (209) Net income Other comprehensive income (loss): Foreign currency translation adjustments Unrealized holding (losses) gains on available-for-sale debt securities (net of tax expense (benefit) of $(167). $(334) and $57, respectively) Total other comprehensive loss Comprehensive income 93 (530) (869) 98,719 (644) (524) 32,116 (116) 33,725 $ $ Table of Contents W ORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except per share data) Common Stock Class A Shares Amount Shares 34.215 342 41,689 S Accumulated Additional Other Paid - in Comprehensive Accumulated Capital Income Deficit 369,643 S 3,011 S (164,096 33,841 Amount 417 Total 209,317 33,841 (116) 1,397 (116) 500 1.392 3,740 (3.740) 33,060 33,060 (34,100) 19,460 (34,100) 19,460 (5,544) (37,048) 893 484 18.099 403 3.87 (5.544) 893 (36,564) 18099 239,743 32,640 (524) 1,578 (167,303) $ 32,640 1,571 Balance, December 31, 2015 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Tax effect from stock-based payment arrangements Cash dividends declared Stock-based compensation Balance, December 31, 2016 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Balance, December 31, 2017 Cumulative effect of adopting ASC 606 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Other Balance, December 31, 2018 3,340 (3,340) 2,487 (2,558) 1.460 IIIIIII! 2,487 (2,558) 1,460 (9,164) 874 (37,728) 346 $ 24.151 422,208 2,371 S (172.391) S 10,086 99,588 (9,164) (36,854) 24.151 252.959 10,086 99,588 (869) 1,948 (869) 1,939 (50,798) 1,366 39,304 1.262 4152815 (50,798) (37,243) 39,304 1.262 316,237 1,721 07 14,90 0 215201 152 (101,326) S 00.20 See accompanying notes to consolidated financial statements F-6 Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31, 2018 2016 2017 99,588 S 32,6405 33,841 17,377 21.137 32,030 6,662 26,933 29,396 8,822 29,568 31,767 (882) (2,767) 6,142 39.304 (1.058) 2,024 (2,720) 6,759 24.151 13,572 1.003 (2.893) 2.403 18,099 12,153 (1,463) (3.527) (12,507) (1.801) 579 131 (7,973) (1.204) (30,478) 26,750 (9.936) 186,719 (12.540) (15,921) 8,112 (14,835) 96,588 5,459 (364) (15,474) (6,629) (28,025) (1,041) (16,892) 62,165 (29,904) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Amortization and impairments of feature film production assets Amortization of television production assets Depreciation and amortization Gain on equity investments, net Services provided in exchange for equity instruments Other amortization Stock-based compensation (Benefit from) provision for deferred income taxes Other non-cash adjustments Cash (used in provided by changes in operating assets and liabilities Accounts receivable Inventory Prepaid expenses and other assets Feature film production assets Television production assets Accounts payable, accrued expenses and other liabilities Deferred income Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment and other assets Purchases of short-term investments Proceeds from sales and maturities of short-term investments Purchase of equity investments Other Net cash used in investing activities FINANCING ACTIVITIES Repayment of debt Dividends paid Debt issuance costs Proceeds from borrowings under the credit facilities Proceeds from borrowings on convertible notes, net of issuance costs Proceeds from issuance of warrants Purchase of convertible note hedge Taxes paid related to net settlement upon vesting of equity awards Proceeds from issuance of stock Excess tax benefits from stock-based payment arrangements Net cash (used in provided by financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes, net of refunds Cash paid for interest NON-CASH INVESTING AND FINANCING TRANSACTIONS Purchases of property and equipment recorded in accounts payable and accrued expenses (See Note 10) Mortgage assumption (See Note 12) (32.275) (94,910) 61,428 (1,330) 1,000 (66,087) (24,710) (142,373) 35,660 (2,316) 8,065 (2,250) (133,739) (24,089) (4.782) (37,243) (7,504) (36,854) 1,383 14,534 1.460 (2,558) (9.164) 1.578 (50,798) 1.948 (14,441) (36,564) (702) 11,583 193,899 19,460 (34,100) (5.544) 1.397 893 135,881 173,957 38,019 211.976 (90,875) 29,757 137,700 167,457 (37,125) (74,276) 211.976 137,700 $ $ 10,1075 8.899 $ 14,5905 9,3125 12,475 1.580 2,3345 13,464 - 5 $ 2,940 23,000 See accompanying notes to consolidated financial statements. WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS in thousands, except per share data) Net revenues Operating expenses Marketing and selling expenses General and administrative expenses Depreciation and amortization Operating income Interest expense Other income, net Income before income taxes Provision for income taxes Net income Earnings per share: basic Earnings per share diluted Weighted average common shares outstanding Basic Diluted Dividends declared per common share (Class A and B) For the years eaded December 31, 2018 2017 930,160 5 800.959 $ 609,182 538,525 95,985 82,837 85,446 77,969 25,069 26,050 114,478 75,578 15,405 14,736 6,964 3,218 106,037 64,060 6,449 31,420 99 SRR 32,640 12R 0.43 2016 729,216 503,667 80,747 64,750 24,411 55,641 3,020 592 53,213 19,372 33,841 0.44 044 112 042 76.743 77,536 88,619 76,149 77,539 048 Table of Contents WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) 2016 $ For the years ended December 31, 2017 99.588 99,588 $ 32,640 $ 33,841 (339) 120 (209) Net income Other comprehensive income (loss): Foreign currency translation adjustments Unrealized holding (losses) gains on available-for-sale debt securities (net of tax expense (benefit) of $(167), S(334) and $57, respectively) Total other comprehensive loss Comprehensive income 93 (530) (869) 98,719 (644) (524) 32,116 $ $ S (116) 33,725 WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) As of December 31. 2018 2017 167,457 $ 191,686 137,700 159,744 65,245 78,925 7,753 28,187 474,008 148,089 13,558 7.473 30.196 17,138 9,837 700,299 8,332 19,961 390,982 131,325 22,300 7,292 27,367 18,984 16,257 614,507 $ $ 4,638 ASSETS CURRENT ASSETS: Cash and cash equivalents Short-term investments, net Accounts receivable (net of allowance for doubtful accounts and returns of $1,009 and $3,035, respectively) Inventory Prepaid expenses and other current assets Total current assets PROPERTY AND EQUIPMENT, NET FEATURE FILM PRODUCTION ASSETS, NET TELEVISION PRODUCTION ASSETS, NET INVESTMENT SECURITIES DEFERRED INCOME TAX ASSETS, NET OTHER ASSETS, NET TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt Convertible debt Accounts payable and accrued expenses Deferred income Total current liabilities LONG-TERM DEBT CONVERTIBLE DEBT OTHER NON-CURRENT LIABILITIES Total liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Class A common stock (5.01 par value, 180,000,000 shares authorized 43,721,411 and 42,498,452 shares issued and outstanding as of December 31, 2018 and 2017, respectively) Class B convertible common stock: (8.01 par value; 60,000,000 shares authorized; 34,303,438 and 34,609,438 shares issued and outstanding as of December 31, 2018 and 2017, respectively) Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total stockholders' equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 5,118 183,090 120,158 49,173 357,539 25,696 77,738 55,818 138,194 30,958 177,900 14,496 361,548 827 384,062 437 343 415,281 1,502 (101,326) 316,237 700,299 346 422,208 2,371 (172,391) 252,959 614,507 $ W ORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except per share data) Common Stock Class B Shares 34.215 Amount 342 SharesAmount 41.689 Accumulated Additional Other Paid in Comprehensive Accumulated Capital Income Deficit $ 369,643 S 3,011 $ (164,096) $ 33,841 (116) 1.392 Total 209,317 33,841 (116) 1,397 500 (3.7401 33,060 33,060 (34,100) 19,460 (34,100) 19,460 (5.544) (5,544) 893 893 484 (37,048) 18.099 403387 2.895 $ (167,303) $ 32,640 (36,564) 18,099 239,743 32,640 (524) 1,578 Balance, December 31, 2015 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, met (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of warrants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Tax cffect from stock-based payment arrangements Cash dividends declared Stock-based compensation Balance, December 31, 2016 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Debt discount on convertible debt, net (See Note 11) Purchase of convertible note hedge (See Note 11) Proceeds from issuance of wamants (See Note 11) Taxes paid related to net settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Balance, December 31, 2017 Cumulative effect of adopting ASC 606 Net income Other comprehensive loss Stock issuances, net Conversion of Class B common stock by shareholder (See Note 17) Taxes paid related to be settlement upon vesting of equity awards Cash dividends declared Stock-based compensation Other Balance, December 31, 2018 0.340) Il 2,487 (2,558) 1,460 11 SI (9.164) 874 24.151 (37,728) 2,487 (2,558) 1.460 (9,164) (36,854) 24.151 252.959 10,086 99,588 (869) 1,948 2.371 $ (172.391) S 10,086 99,588 - (38.609) (50,798) 1,366 39,304 1.262 415281 (50,798) (37,243) 39,304 1.262 316,237 43,721 43734,30 s 30 1.502 (101,326 S WORLD WRESTLING ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the years ended December 31. 2018 2017 2016 99,588 5 32,640 $ 33,841 17,377 21,137 32,030 6,662 26 933 29,396 8,822 29,568 31,767 (882) (2,767) 6,142 39 304 (1.058) 2,024 (2.720) 6,759 24,151 13,572 1,003 (2,893) 2 403 18.099 12.153 (1,463) (3.527) 579 (7.973) (1.204) (30.478) 26,750 (9.936) 186,719 (12,507) (1,801) 131 (12,540) (15.921) 8112 (14,835) 96 588 5,459 (364) (15,474) (6,629) (28,025) (1,041) (16,892) 62,165 (29.904) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities Amortization and impairments of feature film production assets Amortization of television production assets Depreciation and amortization Gain on equity investments, net Services provided in exchange for equity instruments Other amortization Stock-based compensation (Benefit from) provision for deferred income taxes Other non-cash adjustments Cash (used in provided by changes in operating assets and liabilities: Accounts receivable Inventory Prepaid expenses and other assets Feature film production assets Television production assets Accounts payable, accrued expenses and other liabilities Deferred income Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment and other assets Purchases of short-term investments Proceeds from sales and maturities of short-term investments Purchase of equity investments Other Net cash used in investing activities FINANCING ACTIVITIES Repayment of debt Dividends pard Debt issuance costs Proceeds from borrowings under the credit facilities Proceeds from borrowings on convertible notes, net of issuance costs Proceeds from issuance of warrants Purchase of convertible note hedge Taxes paid related to net settlement upon vesting of equity awards Proceeds from issuance of stock Excess tax benefits from stock-based payment arrangements Net cash (used in provided by financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for income taxes, net of refunds Cash paid for interest NON-CASH INVESTING AND FINANCING TRANSACTIONS Purchases of property and equipment recorded in accounts payable and accrued expenses (See Note 10) Mortgage assumption (See Note 12) (32.275) (94.910) 61.428 (1,330) 1,000 (66,087) (24,710) (142,373) 35 660 (2.316) 8,065 (2.250) (133,739) (24.089) (4.782) (37,243) (7.504) (36,854) 1,383 14,534 1,460 (2.558) (9.164) 1.578 (14 441) (36,564) (702) 11,583 193,899 19,460 (34,100) (5.544) 1,397 893 135 RRI 173.957 38.019 211.976 (50,798) 1.948 (90,875) 29,757 137,700 167,457 (37,125) (74.276) 211,976 137,700 10,107 8,899 $ $ 14,590 9,312 $ S 12,475 1,580 13.464 5 2,334 $ 2,940 23,000
