UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM ~~10-Q/A~~

~~(Amendment No. 1)~~10-Q

____________________


	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ~~March 31, 2022~~June 30, 2023
or
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______

Commission File Number: 001-16131

WORLD WRESTLING ENTERTAINMENT, INC.

(Exact name of Registrant as specified in its charter)


Delaware	04-2693383
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1241 East Main Street

Stamford, CT 06902

(203) 352-8600

(Address, including zip code, and telephone number, including area code,

of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	WWE	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer x	Accelerated Filer ¨	Non-Accelerated Filer ¨	Smaller Reporting Company ¨			Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

At ~~May 3, 2022,~~July 28, 2023, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was ~~43,246,147~~52,062,642 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 31,099,011.

‎

~~Explanatory Note~~

In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), World Wrestling Entertainment, Inc. (the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the three months ended March 31, 2022, originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 5, 2022 (the “Form 10-Q” or the “Original Filing”), to amend and revise the following Items of our Original Filing:

~~Part I – Item 1.Consolidated Financial Statements (unaudited)~~

~~Part I – Item 4.Controls and Procedures~~

~~Part II – Item 1A.Risk Factors~~

~~Part II – Item 6.Exhibits~~

~~The complete text of those Items is revised in this Quarterly Report on Form 10-Q/A.~~

The only changes to the Original Filing are those related to the matters described below and only in the items listed above. Except as described herein, this Form 10-Q/A does not modify, amend or update any of the other financial information or other information contained in the Original Filing. In addition, in accordance with Securities and Exchange Commission (“SEC”) rules, this Form 10-Q/A includes updated certifications from our co-Chief Executive Officers and Chief Financial and Administrative Officer as Exhibits 31.1, 31.2, 32.1 and 32.2. Otherwise, the information contained in this Form 10-Q/A is as of the date of the Original Filing and does not reflect any information or events occurring after the date of the Original Filing. Such subsequent information or events include, among other things, the information and events described in our Original Filing and in our Quarterly Report on Form 10-Q (“Form 10-Q”) for the fiscal quarter ended June 30, 2022, which is being filed concurrently with this Form 10-Q/A, and the information and events described in our Current Reports on Form 8-K filed subsequent to the date of the Original Filing. For a description of such subsequent information and events, please read our reports filed pursuant to the Exchange Act subsequent to the date of the Original Filing, which update and supersede certain information contained in the Original Filing and this Form 10-Q/A.

On June 17, 2022, the Company and its Board of Directors announced that a special committee of independent members of the Company’s Board of Directors (the “Special Committee”) was formed to investigate alleged misconduct by the Company’s former Chairman and Chief Executive Officer, Vincent K. McMahon, who resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest (“Mr. McMahon”), and another executive, who is also no longer with the Company.

The findings of the investigation identified agreements executed by Mr. McMahon which were previously unknown to the Company. On July 25, 2002, the Company announced that it had determined that certain payments that Mr. McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future totaling $14.6 million) were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. The Company subsequently identified two additional payments totaling $5.0 million, unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). The Company has evaluated the Unrecorded Expenses and has determined that such amounts should have been recorded as expenses in each of the periods in which they became probable and estimable. All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Special Committee investigation is substantially complete.

Management evaluated the quantitative and qualitative impact of these accounting errors on the Company’s previously issued unaudited interim Consolidated Financial Statements included in the Original Filing and concluded that the errors were not material to its previously issued financial statements. The Company has determined that, while the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, the aggregate amount of Unrecorded Expenses would be material if recorded entirely in the second quarter of 2022. Accordingly, the Company is revising its previously issued financial statements to record the Unrecorded Expenses in the applicable periods for the three months ended March 31, 2022 and 2021.

In addition, the Company re-evaluated the effectiveness of its internal controls over financial reporting and identified control deficiencies associated with the accounting errors, which the Company has concluded represent material weaknesses in the Company’s internal control over financial reporting as of March 31, 2022. Accordingly, the Company is filing this Form 10-Q/A to amend management’s assessment of the Company’s internal control over financial reporting and its disclosure controls and procedures to indicate that they were not effective as of March 31 2022.

As a result of the determination to file this Form 10-Q/A, for the reasons outlined in the preceding paragraph, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company, after discussion with management and the Company’s independent registered public accounting firm, Deloitte & Touche LLP, determined that the Company will revise its unaudited interim Consolidated Financial Statements for the three months ended March 31, 2022 and 2021, included in the Original Filing, to disclose the existence of the related material weaknesses and to correct the accounting error for all periods presented. The correction of these accounting errors

~~does not impact the Company’s previously reported revenue during any financial statement period. For a more detailed description of the correction of the accounting error refer to Note 20,~~ ~~Revision of Previously Issued Unaudited Interim Consolidated Financial Information~~ ~~to the Consolidated Financial Statements of the Company included in this Form 10-Q/A.~~

Table of Contents

TABLE OF CONTENTS


	Page #
Part I – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)	2
Consolidated Statements of Operations for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 ~~and 2021~~	2
Consolidated Statements of Comprehensive Income for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 ~~and 2021~~	3
Consolidated Balance Sheets as of ~~March 31, 2022~~June 30, 2023 and December 31, ~~2021~~2022	4
Consolidated Statements of Stockholders’ Equity for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 ~~and 2021~~	5
Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022 ~~and 2021~~	67
Notes to Consolidated Financial Statements	78
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3. Quantitative and Qualitative Disclosures about Market Risk	41
Item 4. Controls and Procedures	2941
Part II – OTHER INFORMATION	3342
Item 1. Legal Proceedings	42
Item 1A. Risk Factors	3342
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5. Other Information	43
Item 6. Exhibits	3544
Signatures	3645

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Net revenues	$	333,448	$	263,524	$	410,374	$	328,135	$	707,925	$	661,583
Operating expenses		180,685		142,154		229,152		196,887		404,736		377,572
Marketing and selling expenses		18,420		18,912		25,233		20,080		41,613		38,500
General and administrative expenses		32,227		26,560		58,624		32,390		102,116		64,617
Depreciation and amortization		9,707		10,842		10,030		9,450		19,013		19,157
Operating income		92,409		65,056		87,335		69,328		140,447		161,737
Interest expense		6,345		8,508		4,945		4,635		9,198		10,980
Other income, net		321		556
Other (expense) income, net						(1,565)		(266)		888		55
Income before income taxes		86,385		57,104		80,825		64,427		132,137		150,812
Provision for income taxes		20,344		13,272		28,824		15,328		43,458		35,672
Net income	$	66,041	$	43,832	$	52,001	$	49,099	$	88,679	$	115,140
Earnings per share: basic	$	0.88	$	0.57	$	0.67	$	0.66	$	1.16	$	1.54
Earnings per share: diluted	$	0.77	$	0.51	$	0.67	$	0.58	$	1.18	$	1.35
Weighted average common shares outstanding:
Basic		74,781		77,376		77,861		74,299		76,160		74,539
Diluted		87,575		85,686		79,295		87,857		77,478		87,736
Dividends declared per common share (Class A and B)	$	0.12	$	0.12	$	0.12	$	0.12	$	0.24	$	0.24

‎

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Net income	$	66,041	$	43,832	$	52,001	$	49,099	$	88,679	$	115,140
Other comprehensive loss:
Other comprehensive income (loss):
Foreign currency translation adjustments		(60)		(46)		(30)		(128)		(13)		(188)
Net unrealized holding losses on available-for-sale debt securities (net of tax benefit of $525 and $7, respectively)		(1,663)		(21)
Total other comprehensive loss		(1,723)		(67)
Net unrealized holding gains (losses) on available-for-sale debt securities (net of tax expense (benefit) of $45 and $(256), and $265 and $(781), respectively)						143		(810)		841		(2,473)
Reclassification adjustment for losses realized in net income from available-for-sale debt securities (net of tax benefit of $0 and $0, and $85 and $0, respectively)						—		—		268		—
Total other comprehensive income (loss)						113		(938)		1,096		(2,661)
Comprehensive income	$	64,318	$	43,765	$	52,114	$	48,161	$	89,775	$	112,479

‎

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)



	As of				As of
	March 31,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Assets
Current assets:
Cash and cash equivalents	$	105,594	$	134,828	$	317,769	$	220,230
Short-term investments, net		342,219		280,957		206,054		258,487
Accounts receivable (net of allowance for doubtful accounts and returns ‎ of $5,157 and $5,155, respectively)		163,192		171,196
Accounts receivable (net of allowance for doubtful accounts and returns of $4,959 and $5,055, respectively)						161,949		112,362
Inventory, net		9,200		8,033		2,223		2,915
Prepaid expenses and other current assets		30,716		32,242		55,518		33,154
Total current assets		650,921		627,256		743,513		627,148
Property and equipment, net		183,793		172,677		372,355		329,141
Finance lease right-of-use assets, net		308,549		313,360		292,232		296,643
Operating lease right-of-use assets, net		14,723		8,973		14,213		16,278
Content production assets, net		15,798		13,781		10,884		16,518
Investment securities		11,618		11,618		12,007		11,797
Deferred income tax assets, net		16,745		13,100		38,414		45,619
Other assets, net		43,201		43,302		23,602		12,425
Total assets	$	1,245,348	$	1,204,067	$	1,507,220	$	1,355,569
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	435	$	430	$	459	$	449
Finance lease liabilities		12,465		12,190		10,849		11,677
Operating lease liabilities		3,783		4,755		2,738		3,604
Convertible debt		213,396		201,093		4,252		214,100
Accounts payable and accrued expenses		112,821		122,716		129,337		122,856
Deferred revenues		83,947		74,633		49,312		79,750
Total current liabilities		426,847		415,817		196,947		432,436
Long-term debt		21,173		21,284		20,622		20,848
Finance lease liabilities		370,948		374,681		363,661		364,900
Operating lease liabilities		11,547		5,063		12,055		13,145
Other non-current liabilities		13,389		12,562		4,624		6,989
Total liabilities		843,904		829,407		597,909		838,318
Commitments and contingencies
Stockholders' equity:
Class A common stock: ($0.01 par value; 180,000,000 shares authorized; ‎ 43,242,334 and 43,732,977 shares issued and outstanding as of ‎ March 31, 2022 and December 31, 2021, respectively)		433		438
Class A common stock: ($0.01 par value; 180,000,000 shares authorized; 51,809,054 and 43,317,422 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)						518		433
Class B convertible common stock: ($0.01 par value; 60,000,000 shares authorized; 31,099,011 shares issued and outstanding)		311		311		311		311
Additional paid-in capital		401,762		422,884		744,908		424,010
Accumulated other comprehensive income		697		2,420		1,258		162
Accumulated deficit		(1,759)		(51,393)
Retained earnings						162,316		92,335
Total stockholders’ equity		401,444		374,660		909,311		517,251
Total liabilities and stockholders' equity	$	1,245,348	$	1,204,067	$	1,507,220	$	1,355,569

‎

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three Months June 30, 2023
									Accumulated		Retained
	Common Stock						Additional		Other		Earnings
	Class A			Class B			Paid - in		Comprehensive		(Accumulated
	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit)		Total
Balance, March 31, 2023	43,347	$	434	31,099	$	311	$	464,723	$	1,145	$	120,079	$	586,692
Net income	—		—	—		—		—		—		52,001		52,001
Other comprehensive loss	—		—	—		—		—		113		—		113
Stock issuances and other, net	3		—	—		—		—		—		—		—
Conversions of convertible debt (See Note 13)	8,459		84	—		—		213,149		—		—		213,233
Net proceeds from partial unwind of convertible note hedge and warrants (See Note 13)	—		—	—		—		49,080		—		—		49,080
Controlling stockholder contributions	—		—	—		—		1,650		—		—		1,650
Taxes paid related to net settlement upon vesting of equity awards	—		—	—		—		(2,985)		—		—		(2,985)
Cash dividends declared	—		—	—		—		—		—		(9,764)		(9,764)
Stock-based compensation	—		—	—		—		19,291		—		—		19,291
Balance, June 30, 2023	51,809	$	518	31,099	$	311	$	744,908	$	1,258	$	162,316	$	909,311

	Six Months June 30, 2023
									Accumulated
	Common Stock						Additional		Other
	Class A			Class B			Paid - in		Comprehensive		Retained
	Shares	Amount		Shares	Amount		Capital		Income		Earnings		Total
Balance, December 31, 2022	43,317	$	433	31,099	$	311	$	424,010	$	162	$	92,335	$	517,251
Net income	—		—	—		—		—		—		88,679		88,679
Other comprehensive income	—		—	—		—		—		1,096		—		1,096
Stock issuances and other, net	33		1	—		—		1,394		—		—		1,395
Conversions of convertible debt (See Note 13)	8,459		84	—		—		213,149		—		—		213,233
Net proceeds from partial unwind of convertible note hedge and warrants (See Note 13)	—		—	—		—		49,080		—		—		49,080
Controlling stockholder contributions	—		—	—		—		27,388		—		—		27,388
Taxes paid related to net settlement upon vesting of equity awards	—		—	—		—		(3,065)		—		—		(3,065)
Cash dividends declared	—		—	—		—		—		—		(18,698)		(18,698)
Stock-based compensation	—		—	—		—		32,952		—		—		32,952
Balance, June 30, 2023	51,809	$	518	31,099	$	311	$	744,908	$	1,258	$	162,316	$	909,311

Three Months Ended March 31, 2022
Accumulated
Retained
Common Stock
Additional
Other
Earnings
Class A
Class B
Paid - in
Comprehensive
(Accumulated
Shares
Amount
Shares
Amount
Capital
Income
Deficit)
Total
Balance, December 31, 2021
43,733
$
438
31,099
$
311
$
422,884
$
2,420
$
(51,393)
$
374,660
Cumulative effect of adopting ASU 2020-06
—
—
—
—
(26,383)
—
17,609
(8,774)
Net income
—
—
—
—
—
—
66,041
66,041
Other comprehensive loss
—
—
—
—
—
(1,723)
—
(1,723)
Repurchases and retirements of common stock
(525)
(5)
—
—
(4,916)
—
(25,085)
(30,006)
Stock issuances and other, net
34
—
—
—
3,439
—
—
3,439
Taxes paid related to net settlement upon vesting of equity awards
—
—
—
—
(32)
—
—
(32)
Cash dividends declared
—
—
—
—
—
—
(8,931)
(8,931)
Stock-based compensation
—
—
—
—
6,770
—
—
6,770
Balance, March 31, 2022
43,242
$
433
31,099
$
311
$
401,762
$
697
$
(1,759)
$
401,444

‎

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)



	Three Months Ended March 31, 2021														Three Months June 30, 2022
									Accumulated		Retained												Accumulated		Retained
	Common Stock						Additional		Other		Earnings				Common Stock						Additional		Other		Earnings
	Class A			Class B			Paid - in		Comprehensive		(Accumulated				Class A			Class B			Paid - in		Comprehensive		(Accumulated
	Shares	Amount		Shares	Amount		Capital		Income		Deficit)		Total		Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit)		Total
Balance, December 31, 2020	46,695	$	467	31,099	$	311	$	436,558	$	2,985	$	(56,327)	$	383,994
Balance, March 31, 2022															43,242	$	433	31,099	$	311	$	401,762	$	697	$	(1,759)	$	401,444
Net income															—		—	—		—		—		—		49,099		49,099
Other comprehensive income															—		—	—		—		—		(938)		—		(938)
Repurchase and retirement of common stock															(170)		(2)	—		—		(1,523)		—		(8,475)		(10,000)
Stock issuances and other, net															4		—	—		—		500		—		—		500
Taxes paid related to net settlement upon vesting of equity awards															—		—	—		—		(596)		—		—		(596)
Cash dividends declared															—		—	—		—		—		—		(8,901)		(8,901)
Stock-based compensation															—		—	—		—		10,224		—		—		10,224
Balance, June 30, 2022															43,076	$	431	31,099	$	311	$	410,367	$	(241)	$	29,964	$	440,832

															Six Months June 30, 2022
																							Accumulated		Retained
															Common Stock						Additional		Other		Earnings
															Class A			Class B			Paid - in		Comprehensive		(Accumulated
															Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit)		Total
Balance, December 31, 2021															43,733	$	438	31,099	$	311	$	422,884	$	2,420	$	(51,393)	$	374,660
Cumulative effect of adopting ASU 2020-06															—		—	—		—		(26,383)		—		17,609		(8,774)
Net income	—		—	—		—		—		—		43,832		43,832	—		—	—		—		—		—		115,140		115,140
Other comprehensive loss	—		—	—		—		—		(67)		—		(67)	—		—	—		—		—		(2,661)		—		(2,661)
Repurchases and retirements of common stock	(1,498)		(15)	—		—		(13,625)		—		(61,360)		(75,000)	(695)		(7)	—		—		(6,439)		—		(33,560)		(40,006)
Stock issuances and other, net	60		1	—		—		3,162		—		—		3,163	38		—	—		—		3,939		—		—		3,939
Taxes paid related to net settlement upon vesting of equity awards	—		—	—		—		(629)		—		—		(629)	—		—	—		—		(628)		—		—		(628)
Cash dividends declared	—		—	—		—		—		—		(9,160)		(9,160)	—		—	—		—		—		—		(17,832)		(17,832)
Stock-based compensation	—		—	—		—		7,548		—		—		7,548	—		—	—		—		16,994		—		—		16,994
Balance, March 31, 2021	45,257	$	453	31,099	$	311	$	433,014	$	2,918	$	(83,015)	$	353,681
Balance, June 30, 2022															43,076	$	431	31,099	$	311	$	410,367	$	(241)	$	29,964	$	440,832

‎

See accompanying notes to consolidated financial statements.

Table of Contents

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



	Three Months Ended				Six Months Ended
	March 31,				June 30,
	2022		2021		2023		2022
OPERATING ACTIVITIES:
Net income	$	66,041	$	43,832	$	88,679	$	115,140
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and impairments of content production assets		9,820		5,823		12,963		16,934
Depreciation and amortization		11,980		12,643		20,988		23,802
Other amortization		3,516		4,222		5,513		6,583
Stock-based compensation		9,618		7,980		32,952		20,645
Provision for (benefit from) deferred income taxes		297		(453)		6,947		(1,707)
Loss on induced conversions of convertible debt						5,409		—
Other non-cash adjustments		345		817		3,989		1,352
Cash provided by (used in) changes in operating assets and liabilities:
Accounts receivable		7,799		(32,864)		(50,217)		(10,283)
Inventory		(872)		282		588		3,473
Prepaid expenses and other assets		(1,388)		12,184		(19,883)		1,174
Content production assets		(11,714)		(5,771)		(7,289)		(19,930)
Accounts payable, accrued expenses and other liabilities		(9,278)		12,530		19,392		(2,606)
Deferred revenues		9,286		(1,319)		(30,438)		(3,834)
Net cash provided by operating activities		95,450		59,906		89,593		150,743
INVESTING ACTIVITIES:
Purchases of property and equipment and other assets		(21,487)		(6,167)		(79,144)		(71,630)
Purchases of short-term investments		(111,623)		(52,405)		(87,003)		(188,819)
Proceeds from sales and maturities of short-term investments		47,424		22,842		141,182		131,974
Purchase of investment securities		—		(210)		(210)		(95)
Proceeds from infrastructure improvement incentives						—		4,329
Net cash used in investing activities		(85,686)		(35,940)		(25,175)		(124,241)
FINANCING ACTIVITIES:
Repayment of long-term debt		(106)		(100,101)		(215)		(207)
Repayment of finance leases		(3,435)		(2,723)		(7,861)		(6,899)
Dividends paid		(8,931)		(9,160)		(18,698)		(17,832)
Net proceeds from partial unwind of convertible note hedge and warrants						49,080		—
Payments related to induced conversions of convertible debt						(5,409)		—
Proceeds from tenant improvement allowances		2,273		—		489		13,129
Proceeds from controlling stockholder contributions						17,405		—
Taxes paid related to net settlement upon vesting of equity awards		(32)		(629)		(3,065)		(628)
Proceeds from issuance of stock and other		1,239		1,963		1,395		1,239
Repurchase and retirement of common stock		(30,006)		(75,000)		—		(40,006)
Net cash used in financing activities		(38,998)		(185,650)
Net cash provided by (used in) financing activities						33,121		(51,204)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(29,234)		(161,684)		97,539		(24,702)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		134,828		462,102		220,230		134,828
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	105,594	$	300,418	$	317,769	$	110,126
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Purchases of property and equipment recorded in accounts payable ‎and accrued expenses (See Note 12)	$	21,352	$	2,696	$	13,387	$	28,210
Principal stockholder contributions (See Note 18)	$	2,200	$	1,200
Controlling stockholder contributions (See Note 20)					$	9,983	$	2,700
Convertible notes exchanged for common stock (See Note 13)					$	210,739	$	—

See accompanying notes to consolidated financial statements.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

1. Basis of Presentation and Business Description

The accompanying ~~Consolidated Financial Statements~~consolidated financial statements include the accounts of WWE. “WWE” refers to World Wrestling Entertainment, Inc. and its subsidiaries, unless the context otherwise requires. References to “we,” “us,” “our” and the “Company” refer to WWE.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The accompanying ~~Consolidated Financial Statements~~consolidated financial statements are unaudited. All adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. All intercompany balances are eliminated in consolidation.

Certain information and note disclosures normally included in annual financial statements have been condensed or omitted from these interim financial statements; these financial statements should be read in conjunction with the financial statements and notes thereto included in our Form 10-K for the year ended December 31, ~~2021 Form 10-K, as amended by Form 10-K/A filed~~2022.

Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on ~~August 15, 2022.~~the reported results of operations.

We are an integrated media and entertainment company, principally engaged in the production and distribution of unique and creative wrestling entertainment content through various channels, including content rights agreements for our flagship programs, Raw and SmackDown, our premium over-the-top network (“WWE Network”) ~~monetized through license arrangements or through direct-to-consumer subscriptions, content rights agreements,~~, premium live event programming, ~~filmed entertainment,~~monetization across social media outlets, live events and the licensing of various WWE themed ~~products, and the sale of consumer products featuring our brands.~~products. Our operations are organized around the following principal activities:

Media:

The Media segment reflects the production and monetization of long-form and short-form video content across various platforms, including ~~WWE Network,~~ broadcast and pay television, streaming, as well as digital and social ~~media, as well as filmed entertainment.~~media. Across these platforms, revenues principally consist of content rights fees associated with the distribution of our programming content, subscriptions to WWE Network, and advertising and sponsorships. Effective March 18, 2021, the domestic monetization of WWE Network is generated from content license fees and certain shared sponsorship revenues from NBC Universal (“NBCU”). Media segment revenues for the three months ended March 31, 2021 include the upfront revenue recognition related to the delivery of certain intellectual property rights under this agreement.

Live Events:

Live events provide ongoing content for our media platforms. Live Event segment revenues consist primarily of ticket sales ~~revenues from events for which we receive a fixed fee, as well as~~and the sale of travel packages associated with the Company’s global live events. As a result of the global spread of the coronavirus pandemic (“COVID-19”), these revenues had been greatly limited from March 2020 through the first half of 2021. In July 2021, we resumed our domestic and international live event touring schedules.

Consumer Products:

~~Note on~~ Beginning July 2022, we launched an exclusive, multi-year partnership with Fanatics to create a new, enhanced experience for WWE fans globally, and transitioned our digital retail platform to Fanatics. In May 2023, we expanded this partnership, and transitioned the ~~COVID-19 Pandemic~~

The global spread of COVID-19 and the various attempts to contain it resulted in restrictions, postponements and cancellations of various sports and other events and required us to cancel, postpone or relocate certainoperations of our ~~live events since March 2020. While restrictions have lessened and we have resumed our domestic and international live~~global event ~~touring schedules, COVID-19 and its variants continue~~merchandise business to create significant uncertainty and the full extent of the impact will depend on numerous evolving factors that we can neither predict nor control, including the pandemic’s duration and severity and the governmental, business and individual responses to it. We will continue to actively monitor the issues raised by the COVID-19 pandemic and may take further actions that alter our businessFanatics.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

operations that are required by applicable governmental authorities and/or that we determine to be in the best interests of our employees, talent, customers, partners and stockholders. Any of the foregoing could have a material negative effect on our business and results of operations.

2. Significant Accounting Policies

Our significant accounting policies are detailed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements within our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2021. Except for the policies on the Company’s convertible debt, there~~2022. There have been no material changes to the Company’s significant accounting policies described in our Annual Report on Form ~~10-K/A. The Company’s policy on the accounting for its convertible debt was updated due to the Company’s adoption of Accounting Standards Update (“ASU”) No. 2020-06, as described below.~~10-K.

Operating Expenses

Operating expenses consist of our production costs associated with developing our content, venue rental and related costs associated with the staging of our live events, compensation costs for our talent, as well as material and related costs associated with our consumer product merchandise ~~sales, and costs associated with operating WWE Network.~~sales. In addition, ~~operating~~Operating expenses include the operating costs associated with talent development, data analytics, data engineering, business strategy and real estate and facilities functions.

Included within Operating expenses are the following:



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Amortization and impairment of content production assets	$	9,820	$	5,823	$	10,442	$	7,114	$	12,963	$	16,934
Depreciation and amortization of WWE Network content delivery and technology assets		2,176		1,724		—		2,227		1,548		4,403
Amortization of right-of-use assets - finance leases of equipment		2,222		2,385		2,594		2,221		5,172		4,443
Depreciation on equipment used directly to support operations		166		147		215		214		427		380
Total depreciation and amortization included in operating expenses	$	14,384	$	10,079	$	13,251	$	11,776	$	20,110	$	26,160

Costs to produce our live event programming are expensed when the event is first broadcast, and are not included in the depreciation and amortization table noted above. These costs include production-related costs, such as lighting, pyrotechnics and staging, associated with our weekly, in-ring televised programming as well as our premium live events, which are included as a component of our Media segment operating expenses. We also incur event-related costs, such as venue rental, security and travel, associated with our premium live events as well as our televised and non-televised events, which are included as a component of our Live Events segment operating expenses. Talent-related costs primarily associated with our premium live events and televised programming are included within our Media segment, while talent-related costs associated with our non-televised events are included within our Live Events segment.

Recent Accounting Pronouncements

~~In August 2020, the Financial Accounting Standards Board (“FASB”)~~No recently issued ~~ASU No. 2020-06,~~ ~~Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity~~ ~~(ASU 2020-06). The new guidance eliminates two of the three models in ASC 470-20,~~ ~~Debt with Conversion and Other Options, that require separating embedded conversion features from convertible instruments. Specifically, the ASU removes the separation models for convertible debt with a cash conversion feature~~accounting pronouncements materially impacted or ~~convertible instruments with a beneficial conversion feature. The Company's existing 3.375% convertible senior notes due December 2023 ("Convertible Notes")~~ are currently accounted for under the cash conversion feature model, which is one of the models being eliminated. As a result, after adopting the new guidance, the Company will no longer separately present in equity an embedded conversion feature of such debt. Instead, the Company will account for a convertible debt instrument wholly as debt unless (i) a convertible debt instrument contains features that require bifurcation as a derivative or (ii) a convertible debt instrument was issued at a substantial premium. Additionally, the ASU revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments (e.g., warrants) and embedded features (e.g., conversion features) that are both indexedexpected to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. The new guidance also requires the use of the if-converted method when calculating diluted earnings per share (“EPS”) for convertible instruments and the treasury stock method should no longer be used. Under the new guidance, convertible instruments that may be settled in cash or shares (e.g., the Company’s Convertible Notes) are to be included in the calculation of diluted EPS if the effect is more dilutive, with no option for rebutting the presumption of share settlement based on stated policy or past experience. The ASU is effective for fiscal years beginning after December 15, 2021 (fiscal year 2022 for the Company) and can be adopted on either a fully retrospective or modified retrospective basis. The Company adopted the ASU effective January 1, 2022 under the modified retrospective approach. The cumulative effect of the change was recognized as an

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~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to~~impact our Consolidated Financial ~~Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

adjustment to the opening balance of retained earnings (accumulated deficit) at the date of adoption. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. As a result of the adoption, the Company’s Convertible Notes are no longer bifurcated into a separate liability and equity component in the March 31, 2022 consolidated balance sheet. Rather, the Convertible Notes are presented as a single liability at amortized cost, net of unamortized debt issuance costs, on the March 31, 2022 consolidated balance sheet. Upon adoption of the ASU, the Company recorded a net increase of $12,068 to the Convertible Notes liability component, a $26,383 net decrease to the equity component (additional paid-in capital) and a net increase of $17,609 to retained earnings (accumulated deficit) for the cumulative effect of the adoption. The Company also recorded a net increase of $3,294 to deferred income tax assets. The adjustments were calculated based on the carrying amount of the Convertible Notes as if it had always been treated as a liability only. Furthermore, included in the above adjustments, are adjustments to the debt issuance costs contra-liability and equity (additional paid-in capital) components under the same premise (i.e., as if the total amount of debt issuance costs had always been treated as a contra-liability only). Lastly, the Company derecognized deferred income taxes associated with the Convertible Notes debt discount and adjusted deferred income taxes relative to unamortized debt issuance costs associated with the Convertible Notes. The Company also expects lower interest expense related to the Convertible Notes that will be recognized in future periods subsequent to adoption as a result of accounting for the Convertible Notes as a single liability measured at amortized cost. The following table summarizes the impact of the adoption of ASU 2020-06 on the Company’s opening consolidated balance sheet on January 1, 2022:

December 31, 2021
ASU 2020-06
January 1, 2022
As Reported
Adoption Impact
As Adjusted
Consolidated Balance Sheet line item:
Deferred income tax assets, net
$
13,100
$
3,294
$
16,394
Convertible debt (1)
$
201,093
$
12,068
$
213,161
Additional paid-in-capital (conversion feature, net of tax)
$
422,884
$
(26,383)
$
396,501
Accumulated deficit (cumulative effect adjustment, net of tax)
$
(51,393)
$
17,609
$
(33,784)

~~(1)~~Prior to adoption, the carrying value of the Convertible Debt represents the principal amount less the unamortized debt discount and unamortized debt issuance costs. After adoption, the carrying value of the Convertible Debt represents the principal amount less the unamortized debt issuance costs.

Statements.

3. Segment Information

The Company currently classifies its operations into 3three reportable segments: Media, Live Events and Consumer Products. Segment information is prepared on the same basis that our chief operating decision maker, our Chief Executive Officer, manages the segments, evaluates financial results, and makes key operating decisions.

Unallocated corporate general and administrative expenses largely relate to corporate functions such as finance, investor relations, community relations, corporate communications, information technology, legal, facilities, human resources and our Board of Directors. These unallocated corporate general and administrative expenses will be shown, as applicable, as a reconciling item in tables where segment and consolidated results are both shown.

The Company presents Adjusted OIBDA as the primary measure of segment profit (loss). The Company defines Adjusted OIBDA as operating income before depreciation and amortization, excluding stock-based compensation, certain impairment charges and other non-recurring ~~material items.~~items that management deems would impact the comparability of results between periods. Adjusted OIBDA includes depreciation and amortization expenses directly related to supporting the operations of our segments, including content production asset amortization, depreciation and amortization of costs related to content delivery and technology assets utilized for WWE Network, as well as amortization of right-of-use assets related to finance leases of equipment used to produce and broadcast our live events. The Company believes the presentation of Adjusted OIBDA is relevant and useful for investors because it allows investors to view our segment performance in the same manner as the primary method used by management to evaluate segment performance and make

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

decisions about allocating resources. Additionally, we believe that Adjusted OIBDA is a primary measure used by media investors, analysts and peers for comparative purposes.

We do not disclose assets by segment information. We do not provide assets by segment information to our chief operating decision maker, as that information is not typically used in the determination of resource allocation and assessing business performance of each reportable segment.

~~Table of Contents~~

~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

The following tables present summarized financial information for each of the Company’s reportable segments:



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Net revenues:
Media	$	278,119	$	242,027	$	320,297	$	243,059	$	546,024	$	521,178
Live Events		23,101		472		61,961		41,007		94,562		64,108
Consumer Products		32,228		21,025		28,116		44,069		67,339		76,297
Total net revenues	$	333,448	$	263,524	$	410,374	$	328,135	$	707,925	$	661,583

Adjusted OIBDA:
Media	$	128,217	$	106,599	$	126,106	$	90,728	$	213,935	$	218,945
Live Events		2,814		(4,308)		34,519		13,776		41,494		16,590
Consumer Products		11,873		6,670		12,492		16,506		34,708		28,379
Corporate		(31,170)		(25,083)		(32,373)		(29,507)		(65,213)		(60,677)
Total Adjusted OIBDA	$	111,734	$	83,878	$	140,744	$	91,503	$	224,924	$	203,237

Reconciliation of Total Operating Income to Total Adjusted OIBDA



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Total operating income	$	92,409	$	65,056	$	87,335	$	69,328	$	140,447	$	161,737
Depreciation and amortization		9,707		10,842		10,030		9,450		19,013		19,157
Stock-based compensation		9,618		7,980		19,291		11,027		32,952		20,645
Other adjustments(1)		—		—		24,088		1,698		32,512		1,698
Total Adjusted OIBDA	$	111,734	$	83,878	$	140,744	$	91,503	$	224,924	$	203,237

(1)

Other adjustments for the three months ended June 30, 2023 include $18,772 of legal and professional fees associated with the Company’s strategic alternatives review and recently announced Transaction Agreement with Endeavor, as well as $5,316 of certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of members of the Company’s Board of Directors. Other adjustments for the six months ended June 30, 2023 include $25,452 of legal and professional fees associated with the Company’s strategic alternatives review and recently announced Transaction Agreement with Endeavor, as well as $7,060 of certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of members of the Company’s Board of Directors and expenses paid by Mr. McMahon for plaintiffs’ attorneys’ fees in connection with a shareholder lawsuit that was mooted (refer to Note 20,

Related Party Transactions

, for further information). Other adjustments for the three and six months ended June 30, 2022 include certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors.

4. Revenues

Revenues are generally recognized when control of the promised goods or services is transferred to our customers, either at a point in time or over time, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In contracts that have multiple performance obligations, we allocate the transaction price to each identified performance obligation based upon their relative standalone selling price. The standalone selling prices are determined using observable standalone selling prices when available, as well as estimates of standalone selling prices using adjusted market assessment and expected cost plus margin approaches to estimate the price for individual performance obligations. Variable consideration can result from variability in price or quantity, or both. The components of our transaction price generally does not include material amounts of variable consideration. The variable consideration related to the transaction price contained in our contracts relates primarily to sales or usage-based royalties earned on consumer product licensing contracts. The variability related to these sales or usage-based royalties will be resolved in the periods when the licensee generates sales related to the intellectual property license. Most of our contracts do not include material amounts of variable consideration related to quantities in a contract, and when we have this variability, we estimate the quantities each reporting period. As it relates to our Consumer Products segment, the Company accounts for shipping and handling activities as fulfillment activities.

We derive our revenues principally from the following sources: (i) content rights fees associated with the distribution of WWE’s media content, including our weekly flagship programs as well as premium live event and original programming, (ii) ~~content license fees and~~ subscriptions to WWE Network, (iii) ~~fees for viewing our premium live event programming, (iv) feature film distribution, (v)~~ advertising and sponsorship sales, ~~(vi)~~(iv) live event ticket sales, ~~(vii)~~(v) consumer product licensing royalties from the sale by third-party licensees of WWE branded merchandise, ~~(viii)~~including through eCommerce platforms and live event venues, and (vi) prior to May 2023, direct-to-consumer sales of merchandise at our live event ~~venues, and (ix) direct-to-consumer sales of our merchandise through eCommerce platforms.~~venues.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

Disaggregated Revenues

The following table presents our revenues disaggregated by primary revenue sources. Sales and usage-based taxes are excluded from revenues.



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Net revenues:
Media Segment:
Network (including pay-per-view) (1)	$	56,335	$	79,392	$	80,121	$	66,889	$	131,501	$	125,668
Core content rights fees (2)		141,523		139,739		154,758		148,480		308,674		287,559
Advertising and sponsorships (3)		19,767		15,596		18,890		17,972		34,527		37,739
Other (4)		60,494		7,300		66,528		9,718		71,322		70,212
Total Media Segment net revenues		278,119		242,027		320,297		243,059		546,024		521,178
Live Events Segment:
North American ticket sales		19,888		—		40,300		34,923		70,464		54,811
International ticket sales		—		—		6,432		2,160		6,432		2,160
Advertising and sponsorships (5)		1,145		—		8,805		1,613		9,817		2,758
Other (6)		2,068		472		6,424		2,311		7,849		4,379
Total Live Events Segment net revenues		23,101		472		61,961		41,007		94,562		64,108
Consumer Products Segment:
Consumer product licensing		20,006		11,039		15,695		22,634		42,436		42,640
eCommerce		7,717		9,986		4,613		12,826		8,431		20,543
Venue merchandise		4,505		—		7,808		8,609		16,472		13,114
Total Consumer Products Segment net revenues		32,228		21,025		28,116		44,069		67,339		76,297
Total net revenues	$	333,448	$	263,524	$	410,374	$	328,135	$	707,925	$	661,583

(1)Network revenues consist primarily of license fees ~~associated with~~from the ~~domestic~~global distribution of WWE Network content ~~to NBCU (effective March 18, 2021), as well as subscription fees from customers of WWE Network and license fees~~ associated with our ~~international~~ licensed partner agreements. ~~Network revenues for the three months ended March 31, 2021 include the upfront revenue recognition related to the delivery of certain WWE Network intellectual property rights.~~

(2)Core content rights fees consist primarily of licensing revenues from the distribution of our flagship programs, RAW and SmackDown, as well as our NXT programming, through global broadcast, pay television and digital platforms.

(3)Advertising and sponsorships revenues within our Media segment consist primarily of advertising revenues from the Company’s content on third-party social media platforms and sponsorship fees from sponsors who promote their products utilizing the Company’s media platforms, including promotion on the Company’s digital websites and on-air promotional media spots.

(4)Other revenues within our Media segment reflect revenues earned from the distribution of other WWE content, including, but not limited to, certain live in-ring programming content in international markets, scripted, reality and other ~~programming, as well as theatrical and direct-to-home video releases.~~programming.

(5)Advertising and sponsorships revenues within our Live Events segment primarily consists of fees from advertisers and sponsors who promote their products utilizing the Company’s live events (i.e., presenting sponsor of fan engagement events and advertising signage at the event).

(6)Other revenues within our Live Events segment primarily consists of the sale of travel packages associated with the Company’s global live events ~~as well as revenues from events for which the Company receives a fixed fee.~~and commissions earned through secondary ticketing.

WWE Network subscriptions revenues for international subscribers ~~and domestic subscribers through March 17, 2021 (prior to transition of WWE Network content domestically to NBCU),~~ are recorded over time during the subscription ~~term, and~~term. In addition, our consumer product licensing revenues, as well as our eCommerce and venue merchandise revenues (beginning in July 2022 and May 2023, respectively) are recorded over time during the licensing period. Other revenue streams identified in the table above are generally recognized at a point-in-time when the performance obligations are satisfied.

~~Payment Terms and Other~~Remaining Performance Obligations

~~Our~~As of June 30, 2023, for contracts greater than one year, the aggregate amount of the transaction price allocated to remaining performance obligations is approximately $2,270,000, comprised of our multi-year content distribution, consumer product licensing and sponsorship contracts. We will recognize rights fees related to our multi-year content distribution contracts as content is delivered to the distributors during the periods 2023 through 2028. We will recognize the revenues associated with the minimum guarantees on our multi-year consumer product licensing arrangements throughout the licensing periods, which range from 2023 through 2031. For our multi-year sponsorship arrangements, we will recognize sponsorship revenues as the sponsorship obligations are satisfied during the periods 2023 through 2028. The transaction prices related to these future obligations generally do not include ~~material~~any amounts of variable consideration ~~other than the sale~~related to sales or usage-based royalties earned related to ~~our~~ consumer product ~~licensing and certain other content rights contracts. Our payment terms vary by the type of products or services offered, and may be subject~~licensing. The variability related to contractual payment terms, which may include advance payment requirements. The time between invoicing and when payment is due is not significant, generally within 30 to 60 days. We have elected the practical expedient to not adjust the total consideration within a contract to reflect a financing component when the duration of the financing is one year or less.these sales

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

Our contracts do not generally include a significant financing component. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties.

~~Remaining Performance Obligations~~

As of March 31, 2022, for contracts greater than one year, the aggregate amount of the transaction price allocated to remaining performance obligations is $3,240,938, comprised of our multi-year content distribution, consumer product licensing and sponsorship contracts. We will recognize rights fees related to our multi-year content distribution contracts as content is delivered to the distributors during the periods 2022 through 2028. We will recognize the revenues associated with the minimum guarantees on our multi-year consumer product licensing arrangements by the end of the licensing periods, which range from 2022 through 2031. For our multi-year sponsorship arrangements, we will recognize sponsorship revenues as the sponsorship obligations are satisfied during the periods 2022 through 2028. The transaction prices related to these future obligations generally do not include any variable consideration, which consists of sales or usage-based royalties earned on consumer product licensing and certain other content rights contracts. The variability related to these sales or usage-based royalties will be resolved in the periods when the licensee generates sales related to the intellectual property license. For transaction prices related to these future obligations that may contain material amounts of variable consideration related to quantities in a contract, we estimate the quantities each reporting period.

Contract Assets and Contract Liabilities (Deferred Revenues)

A contract asset results when goods or services have been transferred to the customer, but payment is contingent upon a future event, other than the passage of time. The Company does not have any material contract assets, only accounts receivable as disclosed on our Consolidated Balance Sheets.

We record deferred revenues (also referred to as contract liabilities under ASC Topic 606) when cash payments are received or due in advance of our performance. Our deferred revenue balance primarily relates to advance payments received related to our content distribution rights agreements, our consumer product licensing agreements, and our sponsorship and advertising arrangements. The Company’s deferred revenue (i.e., contract liabilities) as of ~~March 31, 2022~~June 30, 2023 and December 31, ~~2021~~2022 was ~~$83,947~~$49,312 and ~~$74,661,~~$79,750, respectively, and are included within Deferred revenues ~~and Other non-current liabilities~~ on our Consolidated Balance Sheets.

Revenue recognized during the three and six months ended June 30, 2023 and 2022 that was included in the respective deferred revenue balance at the beginning of each period was $13,033 and $8,007, and $59,995 and $58,321, respectively.

~~Contract Costs (Costs of Obtaining a Contract)~~

Except for certain multi-year television content arrangements, we generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within Marketing and selling expenses within our Consolidated Statements of Operations. Capitalized commission fees of $600 and $625 at March 31, 2022 and December 31, 2021, respectively, relate primarily to incremental costs of obtaining our long-term television content arrangements and these costs are being amortized over the duration of the underlying content agreements on a straight-line basis to marketing and selling expense. During each of the three months ended March 31, 2022 and 2021, the amount of amortization was $25, and there was 0 impairment in relation to the costs capitalized.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

5. Earnings Per Share

For purposes of calculating basic and diluted earnings per share, we used the following weighted average common shares outstanding (in thousands):



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Net income for basic earnings per share	$	66,041	$	43,832	$	52,001	$	49,099	$	88,679	$	115,140
Effect of potentially diluted shares:
Effect of potentially dilutive shares:
Interest expense related to the Convertible Notes ~~(1)~~		1,566		—		1,275		1,562		2,705		3,129
Net income for diluted earnings per share	$	67,607	$	43,832	$	53,276	$	50,661	$	91,384	$	118,269

Weighted average basic common shares outstanding(1)		74,781		77,376		77,861		74,299		76,160		74,539
Dilutive effect of restricted and performance stock units		526		383		1,011		754		906		643
Dilutive effect of convertible debt instruments(1)		12,266		7,925		420		12,800		409		12,548
Dilutive effect of employee share purchase plan		2		2		3		4		3		6
Weighted average dilutive common shares outstanding		87,575		85,686		79,295		87,857		77,478		87,736

Earnings per share:
Basic	$	0.88	$	0.57	$	0.67	$	0.66	$	1.16	$	1.54
Diluted	$	0.77	$	0.51	$	0.67	$	0.58	$	1.18	$	1.35

Anti-dilutive shares (excluded from per-share calculations):
Net shares received on purchased call of convertible debt hedge(1)		4,728		4,536		273		5,146		265		4,949

(1)The ~~Company adopted ASU 2020-06 effective January 1, 2022 under~~increase in basic common shares outstanding and decrease in shares associated with our convertible debt instruments are associated with the ~~modified retrospective approach. As such, for purposes of calculating net income for diluted earnings per share, we have not made any adjustments for~~Exchanges and Conversions that occurred during the three and six months ended ~~March 31, 2021.~~June 30, 2023. Refer to Note 13, Convertible Debt, for further discussion related to these transactions.

Effect of Convertible Notes and Related Convertible Note Hedge and Warrants

In connection with the issuance of the Convertible Notes, the Company entered into Convertible Note Hedge and Warrant transactions as described further in Note 13, Convertible Debt. The collective impact of the Convertible Note Hedge and Warrants effectively eliminates any economic dilution that may occur from the actual conversion of the Convertible Notes between the conversion price of $24.91 per share and the strike price of the Warrants of $31.89 per share. ~~The adoption of ASU 2020-06, as described in Note 2,~~ ~~Significant Accounting Policies – Recent Accounting Pronouncements~~, did not impact the accounting for the Convertible Note Hedge and Warrants (i.e., continue to remain classified in equity), as well as the treatment for diluted earnings per share calculation purposes as it relates to the Convertible Note Hedge and Warrants.

We adopted ASU 2020-06 on January 1, 2022 under the modified retrospective method and applied the new guidance to our Convertible Notes outstanding as of January 1, 2022. We have not changed previously disclosed amounts or provided additional disclosures for comparative periods. ASU 2020-06 requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. Under the if-converted method, diluted earnings per share ~~will be~~is calculated assuming that all the Convertible Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive.

Prior to actual conversion, for purposes of calculating diluted earnings per share, the denominator also includes the additional shares issued related to the Warrants using the treasury stock method to the extent the average price of our common stock exceeds the strike price of the Warrants of $31.89 per share. In addition, prior to actual conversion, the Convertible Note Hedges are not considered for purposes of the calculation of diluted earnings per share, as their effect would be anti-dilutive.

The dilution from the Convertible Notes ~~for the three months ended March 31, 2022, calculated using the if-converted method,~~ had a ~~$0.13~~$0.01 impact on diluted earnings per share ~~as compared to~~for the three and six months ended June 30, 2023. The dilution from the Convertible Notes had a ~~$0.05~~$0.10 and $0.18 impact on diluted earnings per share for the three and six months ended ~~March 31, 2021, which was calculated under the Treasury Stock method.~~June 30, 2022, respectively.

6. Stock-based Compensation

The Company provides for the grant of stock-based awards under our 2016 Omnibus Incentive Plan. We also provide a stock purchase plan for our employees under our 2012 Employee Stock Purchase Plan. Refer to Note 18, Stock-based Compensation, within our Annual Report on Form 10-K for the year ended December 31, 2022 for further information.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

Stock-based ~~Compensation~~compensation expense consisted of the following:

Our 2016 Omnibus Incentive Plan (the “2016 Plan”) provides for the grant of incentive or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance awards to eligible participants as determined by the Compensation Committee of the Board of Directors. Awards may be granted as incentives and rewards to encourage officers, employees, consultants, advisors and independent contractors of the Company and its affiliates and to non-employee directors of the Company to participate in our long-term success.



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Restricted stock units ("RSUs")	$	8,595	$	5,572	$	13,300	$	7,568
Performance stock units ("PSUs")		10,012		4,875		18,066		11,910
Performance stock units tied to relative total shareholder return ("PSU-TSRs")		69		106		137		211
Employee stock purchase plan		470		258		1,148		508
Board of Directors		145		216		301		448
Stock-based compensation expense	$	19,291	$	11,027	$	32,952	$	20,645

Stock-based compensation costs, which includes costs related to RSUs, PSUs, PSU-TSRs, the Company’s qualified employee stock purchase plan and shares issued to the Company’s Board of Directors, totaled $9,618 and $7,980 for the three months ended March 31, 2022 and 2021, respectively.

Restricted Stock Units

The Company grants restricted stock units (“RSUs”) to officers and employees under the 2016 Plan. Stock-based compensation costs associated with our RSUs are determined using the fair market value of the Company’s common stock on the date of the grant. These costs are recognized over the requisite service period using the graded vesting method, net of estimated forfeitures. RSUs have a service requirement typically over a 3.5 year vesting schedule and vest in equal annual installments. We estimate forfeitures based on historical trends when recognizing compensation expense and adjust the estimate of forfeitures when they are expected to differ or as forfeitures occur. Unvested RSUs accrue dividend equivalents at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying RSUs.

The following table summarizes the RSU activity during the ~~three~~six months ended ~~March 31, 2022:~~June 30, 2023:

Units
Weighted-
Average
Grant-Date
Fair Value
Unvested at January 1, 2022
300,003
$
55.03
Granted
149,137
$
51.77
Vested
(1,474)
$
44.97
Forfeited
(15,503)
$
52.51
Dividend equivalents
844
$
53.99
Unvested at March 31, 2022
433,007
$
54.00



		Units
Unvested at January 1, 2023		467,798
Granted		528,473
Vested		(62,436)
Forfeited		(10,370)
Dividend equivalents		2,170
Unvested at June 30, 2023		925,635

Performance Stock Units

~~The Company grants~~During the first quarter of 2023, the Compensation and Human Capital Committed approved an amendment to the vesting schedules for performance stock units (“PSUs”) ~~to officers and employees~~ under the Company’s 2016 Omnibus Incentive Plan. Stock-based compensation costs associated with our PSUs are initially determined using the fair market value of the Company’s common stock on the date the awards are approved by our Compensation Committee (service inception date). The vesting of these PSUs are subject to certain performance conditions and a service requirement of typically 3.5 years. ~~Until~~For PSUs granted prior to 2023, these awards vest in equal annual installments. For PSUs granted in 2023, these awards vest in their entirety after the ~~performance conditions are met,~~service requirement. For PSUs granted prior to 2023, stock compensation costs associated with these PSUs are re-measured each reporting period based upon the fair market value of the Company’s common stock and the estimated performance attainment on the reporting date. The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance conditions. Stock compensation costs for our PSUs are recognized over the requisite service period using the graded vesting method, net of estimated forfeitures. ~~We estimate forfeitures based on historical trends when recognizing~~For PSUs granted in 2023, stock compensation ~~expense and adjust~~costs are recognized over the ~~estimate~~requisite service period using the straight-line method, net of forfeitures when they are expected to differ or as forfeitures occur. Unvested PSUs accrue dividend equivalents once the performance conditions are met at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying PSUs.estimated forfeitures.

~~During~~The following table summarizes the ~~third quarter of 2020,~~PSU activity during the ~~Compensation Committee approved an agreement to grant PSUs to an executive management member for an aggregate value of $15,000.~~ six months ended June 30, 2023:



		Units
Unvested at January 1, 2023		1,015,085
Granted		207,095
Achievement adjustment (1)		64,335
Vested		—
Forfeited		(244,861)
Dividend equivalents		1,378
Unvested at June 30, 2023		1,043,032

(1)During the first quarter of ~~2022, this agreement~~2023, it was ~~amended to increase~~determined that the ~~aggregate value to $22,500. This award vests in 2 tranches of 27%, and 73%, during the years 2022 and 2025, respectively. The first award tranche of $6,000 has~~ performance conditions ~~tied~~related to ~~results through September~~ 2022 ~~and the second award of $16,500 has performance conditions tied~~PSU grants were exceeded, which resulted in an achievement adjustment increase in 2023 relating to results through September 2025. The Company began expensing the second award of $16,500 concurrent with the first award beginning on the service inception date in August 2020. The Company accounts for the first award as an equity award sincethese PSU grants.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

the target shares are known at inception, while the second award is classified as a liability award until the number of shares is determined upon settlement of the first award. The liability and the corresponding expense are adjusted at the end of each reporting period until the date of settlement, considering the probability that the performance conditions will be satisfied. As of March 31, 2022, the liability portion of the award was $5,315, which is included in Other non-current liabilities on the Consolidated Balance Sheet. There are no units associated with the second award in the table below as of March 31, 2022 since the initial target number of shares will be determined by the Compensation Committee in 2022 based on the terms of the award.

~~The following table summarizes the PSU activity during the three months ended March 31, 2022:~~

Units
Weighted-
Average
Grant-Date
Fair Value
Unvested at January 1, 2022
433,267
$
50.14
Granted
573,324
$
62.44
Achievement adjustment
83,250
$
47.81
Forfeited
(10,667)
$
50.89
Dividend equivalents
732
$
49.04
Unvested at March 31, 2022
1,079,906
$
57.81

During the year ended December 31, 2021, we granted 304,726 PSUs, which were subject to performance conditions related to the 2021 fiscal year. During the first quarter of 2022, it was determined that the performance conditions related to these PSUs were exceeded, which resulted in an achievement adjustment increase of 83,250 PSUs in 2022 relating to the initial 2021 PSU grant.

Performance Stock Units with a Market Condition Tied to Relative Total Shareholder Return

In March 2018, the Compensation Committee approved certain agreements to grant PSUs with a market condition (“PSU-TSRs”) where vesting is conditioned upon the total shareholder return performance of the Company’s stock relative to the performance of a peer group over 5 distinct performance periods from 2018 through 2024. The 5 distinct performance periods end in March from 2020 to 2024, with the awards for each performance period vesting in July of each year. The payout for each performance period can vest at between 50% and 175% of the target award based on the percentile ranking of WWE’s total shareholder return performance with vesting capped at 100% if WWE’s absolute total shareholder return is negative. The grant date fair value of the award was calculated using a Monte-Carlo simulation model which factors in the number of awards to be earned based on the achievement of the market condition. This model simulates the various stock price movements of the Company and peer group companies using certain assumptions, including the stock price of WWE and those of the peer group, stock price volatility, the risk-free interest rate, correlation coefficients, and expected dividend yield. The grant date fair value of the award is being amortized as compensation cost over the requisite service period using the graded vesting method.

The following table summarizes the PSU-TSR activity during the ~~three~~six months ended ~~March 31, 2022:~~June 30, 2023:

Units
Weighted-
Average
Grant-Date
Fair Value
Unvested at January 1, 2022
47,736
$
47.28
Granted
—
$
—
Achievement adjustment
10,229
$
47.30
Vested
—
$
—
Forfeited
—
$
—
Dividend equivalents
—
$
—
Unvested at March 31, 2022
57,965
$
47.30



		Units
Unvested at January 1, 2023		34,098
Granted		—
Achievement adjustment (1)		10,229
Vested		—
Forfeited		—
Dividend equivalents		27
Unvested at June 30, 2023		44,354

(1)During the first quarter of ~~2022,~~2023, it was determined that the percentile ranking of WWE’s total shareholder return performance related to the ~~third~~fourth performance period were met, which resulted in an achievement adjustment increase ~~of 10,229 PSU-TSRs~~ in ~~2022~~2023 relating to the initial 2018 PSU-TSR grant.

7. Property and Equipment

Property and equipment consisted of the following:



	As of
	June 30,		December 31,
	2023		2022
Land, buildings and improvements	$	163,824	$	158,806
Equipment and software		170,290		166,249
Corporate aircraft		30,915		32,249
Vehicles		993		993
Projects in progress (1)		221,133		216,710
		587,155		575,007
Less: accumulated depreciation and amortization		(214,800)		(245,866)
Total	$	372,355	$	329,141

(1)As of June 30, 2023 and December 31, 2022, our projects in progress balance included $206,078 and $200,552, respectively, of capital expenditures related to the Company’s headquarter facility.

Depreciation expense for property and equipment totaled $7,608 and $9,155, and $15,715 and $18,471 for the three and six months ended June 30, 2023 and 2022, respectively.

During the second quarter of 2023, the Company reclassified asset costs of $49,510 related to the Company’s headquarter facility from projects in progress to land, building and improvements. These assets began depreciation on April 18, 2023 when the assets became available for their intended use and resulted in depreciation expense of $1,090 for the three and six months ended June 30, 2023.

During the first quarter of 2023, the Company reclassified cost and accumulated depreciation of $42,176 and $39,499, respectively, related to land, building and improvements associated with our current Stamford, Connecticut headquarter property as held for sale. The net assets held for sale of $2,677 are included as a component of Prepaid expenses and other current assets within our Consolidated Balance Sheets as of June 30, 2023. The effect of suspending depreciation on this property held for sale is immaterial to the Company’s results of operations. These assets held for sale are being marketed for sale and it is the Company’s intention to complete the sale of these assets within the next twelve months.

The Company capitalizes interest during the construction period for significant long-term projects in progress. During the three and six months ended June 30, 2023 and 2022, the Company capitalized $1,731 and $1,652, and $3,710 and $1,652, respectively, of interest associated with its projects in progress.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

~~7. Property and Equipment~~

~~Property and equipment consisted of the following:~~

As of
March 31,
December 31,
2022
2021
Land, buildings and improvements
$
154,679
$
154,826
Equipment
153,780
148,193
Corporate aircraft
32,249
32,249
Vehicles
993
993
Projects in progress
63,522
49,660
405,223
385,921
Less: accumulated depreciation and amortization
(221,430)
(213,244)
Total
$
183,793
$
172,677

~~Depreciation expense for property and equipment totaled $9,316 and $10,116 for the three months ended March 31, 2022 and 2021, respectively.~~

8. Leases

Information about the Nature of WWE’s Lease Portfolio

As of ~~March 31, 2022,~~June 30, 2023, the Company’s lease portfolio consists of operating and finance real estate leases for its sales offices, performance centers, warehouses and corporate related facilities. In addition, we have various live event production service arrangements that contain operating and finance equipment leases. With the exception of our ~~new~~ global headquarter lease that commenced on July 1, 2019 with an 18-month free rent period followed by an initial base term of 15 years with options to renew, our other real estate leases have remaining lease terms of approximately one year to ~~ten~~nine years, some of which may also include options to extend the leases. Our equipment leases, which are included as part of various operating service arrangements, generally have remaining lease terms of approximately one year to ~~six~~seven years. Generally, no covenants are imposed by our lease agreements.

As it relates to the Company’s ~~new~~ global headquarter lease, in November 2020 the landlord granted a rent deferral of $6,590 for a portion of the rental payments due during 2021. The rent deferral amount will be payable over a five year period from 2022 through 2026. The FASB has provided relief under ASC 842, “Leases,” related to the COVID-19 pandemic. Under this relief, companies can make an accounting policy election on how to treat lease concessions resulting directly from COVID-19, provided that the modified lease contract results in total cash flows that are substantially the same or less than the cash flows in the original lease contract. The Company has elected to account for the rent deferral resulting directly from COVID-19 as though the enforceable rights and obligations to the deferral existed in the original lease contract at lease inception, and did not account for the concession as a lease modification. In lieu of applying lease modification accounting, the Company accounted for the rent deferral by accruing an accounts payable during the rent concession periods in 2021 and will relieve the payable during 2022 through 2026 when the deferred rents are due. The amount of this deferral was ~~$6,492~~$4,930 as of ~~March 31, 2022,~~June 30, 2023, with ~~$5,250~~$3,608 included as a component of Other non-current liabilities and ~~$1,242~~$1,322 included as a component of Accounts payable and accrued expenses on our Consolidated Balance Sheet.

~~Key Estimates and Judgments~~

~~Key estimates and judgments made in applying the lease accounting rules include how the Company determines (i) the discount rate it uses~~Quantitative Disclosures Related to discount the unpaid lease payments to present value, (ii) lease term and (iii) lease payments. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Company cannot readily determine the interest rate implicit in the lease and therefore uses the incremental borrowing rate for its leases. Leases

The incremental borrowing rate reflects the rate of interest that the Company would pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The incremental borrowing rates were generally determined by estimating the appropriate collateralized borrowing rates to be used for our leases and considered certain factors including, the lease term, economic environment and the assumed credit rating profile of the Company. The lease term for all offollowing table provides quantitative disclosure about the Company’s ~~lease arrangements include~~operating and financing leases for the ~~noncancelable period of the lease plus, if applicable, any additional~~ periods ~~covered by an option to extend the lease that is reasonably certain to be exercised by the Company.~~presented:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Lease costs
Finance lease costs:
Amortization of right-of-use assets	$	5,031	$	4,670	$	10,045	$	9,341
Interest on lease liabilities		3,718		3,774		7,464		7,578
Operating lease costs		1,266		1,268		2,607		2,440
Other short-term and variable lease costs		495		439		1,050		1,112
Sublease income (1)		—		(17)		—		(43)
Total lease costs	$	10,510	$	10,134	$	21,166	$	20,428

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	3,733	$	3,774	$	7,481	$	7,579
Operating cash flows from operating leases	$	1,160	$	892	$	2,191	$	1,967
Finance cash flows from finance leases	$	3,947	$	3,464	$	7,861	$	6,899
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,136	$	—	$	5,932	$	—
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	74	$	172	$	8,679

	As of
	June 30,		December 31,
	2023		2022
Weighted-average remaining lease term - finance leases		25.9 years		26.4 years
Weighted-average remaining lease term - operating leases		6.4 years		6.5 years
Weighted-average discount rate - finance leases		4.0%		4.0%
Weighted-average discount rate - operating leases		3.5%		3.4%

(1)Sublease income excludes rental income from owned properties.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

~~Quantitative Disclosures Related to Leases~~

~~The following table provides quantitative disclosure about the Company’s operating and financing leases for the periods presented:~~

Three Months Ended
March 31,
2022
2021
Lease costs
Finance lease costs:
Amortization of right-of-use assets
$
4,671
$
4,658
Interest on lease liabilities
3,804
4,706
Operating lease costs
1,172
1,518
Other short-term and variable lease costs
673
408
Sublease income (1)
(26)
—
Total lease costs
$
10,294
$
11,290
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases
$
3,805
$
2,763
Operating cash flows from operating leases
$
1,075
$
1,328
Finance cash flows from finance leases
$
3,435
$
2,723
Right-of-use assets obtained in exchange for new finance lease liabilities
$
—
$
174
Right-of-use assets obtained in exchange for new operating lease liabilities
$
8,605
$
3,457
As of
March 31,
2022
2021
Weighted-average remaining lease term - finance leases
26.9 years
27.3 years
Weighted-average remaining lease term - operating leases
7.2 years
3.9 years
Weighted-average discount rate - finance leases
4.0%
4.8%
Weighted-average discount rate - operating leases
3.5%
3.9%

~~(1)Sublease income excludes rental income from owned properties.~~

Maturity of lease liabilities as of ~~March 31, 2022~~June 30, 2023 were as follows:



	Operating		Finance		Operating		Finance
	Leases		Leases		Leases		Leases
2022	$	3,405	$	20,099
2023		3,042		27,409	$	1,798	$	12,290
2024		1,577		24,311		2,736		26,039
2025		1,444		21,140		2,564		22,895
2026		1,465		21,472		2,333		23,256
2027						2,231		20,622
Thereafter		6,523		536,643		5,029		520,339
Total lease payment		17,456		651,074		16,691		625,441
Less: imputed interest		(2,126)		(267,661)		(1,898)		(250,931)
Total future minimum lease payments	$	15,330	$	383,413	$	14,793	$	374,510

~~Table of Contents~~

~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

9. Content Production Assets, Net

Content production assets consisted of the following:



	Predominantly Monetized Individually				Predominantly Monetized as a Film Group				Predominantly Monetized Individually				Predominantly Monetized as a Film Group
	As of				As of				As of				As of
	March 31,		December 31,		March 31,		December 31,		June 30,		December 31,		June 30,		December 31,
	2022		2021		2022		2021		2023		2022		2023		2022
In release	$	6,905	$	3,291	$	32	$	139	$	1,794	$	3,090	$	35	$	7
Completed but not released										20		—		—		—
In production		8,585		9,581		199		627		8,900		13,122		125		289
In development		77		143		—		—		10		10		—		—
Total	$	15,567	$	13,015	$	231	$	766	$	10,724	$	16,222	$	160	$	296

As of ~~March 31, 2022,~~June 30, 2023, all of the “completed but not released” content assets that are monetized individually are estimated to be amortized over the next 12 months and approximately ~~87%~~77% of the “in release” content assets monetized individually are estimated to be amortized over the next three years.

As of ~~March 31, 2022,~~June 30, 2023, all of the “in release” content assets monetized as a film group are estimated to be amortized over the next 12 months.

Amortization and impairment of content production assets consisted of the following:



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Content production amortization expense - assets monetized individually	$	8,105	$	4,496	$	9,802	$	5,921	$	11,638	$	14,026
Content production amortization expense - assets monetized as a film group		1,622		1,298		640		1,189		1,325		2,811
Content production impairment charges (1)		—		—		—		—		—		—
Content production development write-offs (2)		93		29		—		4		—		97
Total amortization and impairment of content production assets	$	9,820	$	5,823	$	10,442	$	7,114	$	12,963	$	16,934

(1)Unamortized content production assets are evaluated for impairment whenever events or changes in circumstances indicate that the fair value of a film predominantly monetized on its own or a film group may be less than its unamortized costs. If conditions indicate a potential impairment, and the estimated future cash flows are not sufficient to recover the unamortized asset, the asset is written down to fair value. In addition, if we determine that content will not likely air, we will expense the remaining unamortized asset.

(2)Capitalized script development costs are evaluated at each reporting period for impairment and to determine if a project is deemed to be abandoned.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

Amortization and impairment expenses related to content production assets are included in the Company’s Media segment, and as a component of Operating expenses on the Consolidated Statements of Operations. Costs to produce our live event programming are expensed immediately when the event is first broadcast and are not included in the content asset amortization amounts above.

10. Investment Securities and Short-Term Investments

Investment Securities

Included within Investment Securities are the following:



	As of				As of
	March 31,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Nonmarketable equity investments without readily determinable fair values	$	11,618	$	11,618	$	12,007	$	11,797
Total investment securities	$	11,618	$	11,618	$	12,007	$	11,797

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~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

Nonmarketable Equity Investments Without Readily Determinable Fair Values

We evaluate our nonmarketable equity investments without readily determinable fair values for impairment if factors indicate that a significant decrease in value has occurred. The Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes.

The Company did 0tnot record any impairment charges on these investments during the three and six months ended ~~March 31, 2022~~June 30, 2023 and ~~2021.~~2022. In addition, there were no observable price change events that were completed during the three and six months ended ~~March 31, 2022~~June 30, 2023 and ~~2021.~~2022.

Short-Term Investments

Short-term investments consist of available-for-sale debt securities which are measured at fair value and consisted of the following:



	As of March 31, 2022								As of December 31, 2021								As of June 30, 2023								As of December 31, 2022
			Gross Unrealized								Gross Unrealized								Gross Unrealized								Gross Unrealized
	Amortized						Fair		Amortized						Fair		Amortized						Fair		Amortized						Fair
	Cost		Gain		(Loss)		Value		Cost		Gain		(Loss)		Value		Cost		Gain		(Loss)		Value		Cost		Gain		(Loss)		Value
U.S. Treasury securities	$	190,552	$	—	$	(901)	$	189,651	$	90,278	$	—	$	(57)	$	90,221	$	67,972	$	—	$	(581)	$	67,391	$	94,287	$	—	$	(1,095)	$	93,192
Corporate bonds		128,292		2		(1,251)		127,043		147,102		1		(269)		146,834		82,858		—		(706)		82,152		117,947		1		(1,435)		116,513
Government agency bonds		26,013		—		(488)		25,525		44,026		1		(125)		43,902		57,005		—		(494)		56,511		49,494		12		(724)		48,782
Total	$	344,857	$	2	$	(2,640)	$	342,219	$	281,406	$	2	$	(451)	$	280,957	$	207,835	$	—	$	(1,781)	$	206,054	$	261,728	$	13	$	(3,254)	$	258,487

The Company evaluates its individual available-for-sale debt securities that are in an unrealized loss position each reporting period and determines whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The amount of the decline related to credit losses are recorded as a credit loss expense in earnings with a corresponding allowance for credit losses and the amount of the decline not related to credit losses are recorded through other comprehensive income, net of tax. As of ~~March 31,~~June 30, 2023 and 2022, ~~and 2021,~~ the aggregate total amount of unrealized losses (that is, the amount by which amortized cost basis exceeds fair value) was insignificant. We did not record an allowance for credit losses on these securities. Accordingly, during the three and six months ended ~~March 31,~~June 30, 2023 and 2022, ~~and 2021,~~ the entire amount of the decline in fair value below the amortized cost basis was recorded as an unrealized loss, net of tax, in ~~other~~Other comprehensive ~~loss~~income (loss) in the Consolidated Statements of Comprehensive Income. Unrealized gains are also reflected, net of tax, as ~~other~~Other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income.

Our U.S. Treasury securities, corporate ~~bonds, municipal~~ bonds and government agency bonds are included in Short-term investments, net on our Consolidated Balance Sheets. Realized gains and losses on investments are included within Other income, net in ~~earnings~~the Consolidated Statements of Operations and are derived using the specific identification method for determining the cost of securities sold.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

As of ~~March 31, 2022,~~June 30, 2023, contractual remaining maturities of these securities are as follows:



		Maturities
U.S. Treasury securities		1 month - 2 years
Corporate bonds		1 month - 2 years
Government agency bonds		52 months - ~~2 years~~1 year

During the three and six months ended ~~March 31,~~June 30, 2023 and 2022, ~~and 2021,~~ we recognized ~~$263~~$3,682 and ~~$87,~~$614, and $6,883 and $876, respectively, of interest income on our short-term investments. Interest income is reflected as a component of Other income, ~~(expense),~~ net ~~within~~on our Consolidated Statements of Operations.

The following table summarizes the short-term investment activity:



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
Proceeds from sales and maturities of short-term investments	$	47,424	$	22,842	$	68,149	$	84,550	$	141,182	$	131,974
Purchases of short-term investments	$	111,623	$	52,405	$	5,793	$	77,196	$	87,003	$	188,819
Gross realized (losses) gains on sale of short-term investments					$	—	$	—	$	(354)	$	—

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~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

11. Fair Value Measurement

Fair value is determined based on the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

The accounting guidance establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three input levels of the fair value hierarchy are summarized as follows:


Level 1-	Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2-	Inputs other than quoted prices in active markets for similar assets and liabilities that are directly or indirectly observable; or
Level 3-	Unobservable inputs, such as discounted cash flow models or valuations, in which little or no market data exists.

Certain financial instruments are carried at cost on the Consolidated Balance Sheets, which approximates fair value due to their short-term, highly liquid nature. The carrying amounts of cash and cash equivalents, money market accounts, accounts receivable, and accounts payable approximate fair value because of the short-term nature of such instruments.

We have classified our investment in U.S. Treasury securities, corporate bonds ~~municipal bonds~~ and government agency bonds, which collectively are investments in available-for-sale debt securities, within Level 2, as their valuation requires quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and/or model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data. The U.S. Treasury securities, corporate bonds ~~municipal bonds~~ and government agency bonds are valued based on model-driven valuations. A third-party service provider assists the Company with compiling market prices from a variety of industry standard data sources, security master files from large financial institutions and other third-party sources that are used to value our corporate bond, U.S. Treasury securities ~~municipal bond~~ and government agency bond investments. The Company did 0tnot have any transfers between Level 1, Level 2, and Level 3 fair value investments during the periods presented.

The fair value measurements of our equity investments without readily determinable fair values and our equity method investments are classified within Level 3 as significant unobservable inputs are used as part of the determination of fair value. Significant unobservable inputs may include variables such as near-term prospects of the investees, recent financing activities of the investees, and the investees' capital structure, as well as other economic variables, which reflect assumptions market participants would use in pricing these assets. For our equity investments without readily determinable fair values, the Company has elected to use the measurement

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes. The Company did 0tnot record any impairment charges on our investment securities during the three and six months ended ~~March 31, 2022~~June 30, 2023 and ~~2021.~~2022.

The Company’s long-lived property and equipment and content production assets are required to be measured at fair value on a non-recurring basis if it is determined that indicators of impairment exist. These assets are recorded at fair value only when an impairment is recognized. The Company did 0tnot record any impairment charges on long lived property and equipment during the three and six months ended ~~March 31, 2022~~June 30, 2023 and ~~2021.~~2022. The Company classifies these assets as Level 3 within the fair value hierarchy due to significant unobservable inputs.

The Company did 0tnot record any impairment charges on content production assets during the three and six months ended ~~March 31, 2022~~June 30, 2023 and ~~2021.~~2022. Refer to Note 9, Content Production Assets, Net, for further discussion. The Company classifies these assets as Level 3 within the fair value hierarchy due to significant unobservable inputs. The Company utilizes a discounted cash flows model to determine the fair value of content production assets where indicators of impairment exist.

The fair value of the Company’s debt, consisting of a mortgage loan assumed in connection with a building purchase, is estimated based upon quoted price estimates for similar debt arrangements. At ~~March 31, 2022,~~June 30, 2023, the ~~carrying~~face amount of the mortgage loan approximates its fair value.

The convertible debt is not marked to fair value at the end of each reporting period, but instead is reported at amortized cost. As of June 30, 2023 and December 31, 2022, the fair value of the Company’s outstanding convertible debt was $17,470 and $605,494, respectively, based on external pricing data, including quoted market prices of these instruments among other factors, and was classified as a Level 2 measurement within the fair value hierarchy.

12. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:



	As of
	June 30,		December 31,
	2023		2022
Trade related	$	10,328	$	9,816
Staff related		13,613		13,828
Management incentive compensation		20,673		31,204
Talent related		7,859		6,274
Accrued WWE Network related expenses		3,574		3,331
Accrued event and television production		17,326		11,599
Accrued legal and professional (1)		26,704		14,980
Accrued purchases of property and equipment		13,387		18,567
Accrued income taxes		—		1,415
Accrued other (2)		15,873		11,842
Total	$	129,337	$	122,856

(1)Accrued legal and professional as of June 30, 2023 includes $13,362 of legal and professional fees associated with the Company’s strategic alternatives review and recently announced Transaction Agreement with Endeavor. As of June 30, 2023 and December 31, 2022, accrued legal and professional also includes $6,077 and $1,992, respectively, of costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors. Additionally, accrued legal and professional as of June 30, 2023 and December 31, 2022 include certain amounts of $3,492 and $9,125, respectively, to be paid by the Company's controlling stockholder (refer to Note 20, Related Party Transactions, for further information).

(2)Accrued other includes accruals for our international and licensing business activities, as well as other miscellaneous accruals, none of which categories individually exceeds 5% of current liabilities.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

The convertible debt is not marked to fair value at the end of each reporting period, but instead is reported at amortized cost. As of March 31, 2022 and December 31, 2021, the calculation of the fair value of the debt component of the Company’s convertible debt required the use of Level 3 inputs, and was determined by calculating the fair value of similar debt without the associated conversion feature based on market conditions at that time:

March 31, 2022
December 31, 2021
Fair Value
Carrying Value (1)
Fair Value
Carrying Value (1)
Convertible senior notes
$
207,739
$
215,000
$
210,076
$
203,032

~~(1)~~Upon adoption of ASU 2020-06 on January 1, 2022, the carrying value of the convertible debt instrument presented in the table above represents the face value of the convertible note as of March 31, 2022. As of December 31, 2021, prior to the adoption of ASU 2020-06, the carrying value of the convertible debt instrument presented in the table above represents the face value of the convertible note less unamortized debt discount.

~~12. Accounts Payable and Accrued Expenses~~

~~Accounts payable and accrued expenses consisted of the following:~~

As of
March 31,
December 31,
2022
2021
Trade related
$
20,692
$
11,150
Staff related
16,481
15,558
Management incentive compensation
7,269
30,604
Talent related
7,320
4,428
Accrued WWE Network related expenses
6,481
10,950
Accrued event and television production
11,388
9,687
Accrued legal and professional (1)
6,543
7,706
Accrued purchases of property and equipment
21,352
22,207
Accrued income taxes (2)
1,733
—
Accrued other
13,562
10,426
Total
$
112,821
$
122,716

~~(1)Accrued legal and professional as of March 31, 2022 and December 31, 2021 include certain amounts of $1,700 and $2,200, respectively, to be paid by the Company’s principal stockholder (see Note 20,~~ ~~Revision of Previously Issued Unaudited Interim Consolidated Financial Information, for further information).~~

~~(2)At December 31, 2021, income taxes has a refundable balance of $7,156 and was included in Prepaid expenses and other current assets on our Consolidated Balance Sheets.~~

Accrued other includes accruals for our international and licensing business activities, as well as other miscellaneous accruals, none of which categories individually exceeds 5% of current liabilities.

13. Convertible Debt

In December 2016 and January 2017, we issued $215,000 aggregate principal amount of 3.375% convertible senior notes ~~due 2023~~ (the “Convertible Notes”). The Convertible Notes are due December 15, 2023, unless earlier repurchased by us or converted. Interest is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017.

The Convertible Notes are governed by an Indenture between us, as issuer, and U.S. Bank, National Association, as trustee. The Convertible Notes will be our general unsecured obligations and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In the event of our bankruptcy, liquidation, reorganization or other winding up, our assets that secure secured debt will be

~~Table of Contents~~

~~WORLD WRESTLING ENTERTAINMENT, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(In thousands, except share data)~~

~~(Unaudited)~~

available to pay obligations on the Convertible Notes only after all indebtedness under such secured debt has been repaid in full from such assets.

Upon conversion of the Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election, at a conversion rate of approximately 40.1405 shares of common stock per $1 principal amount of the Convertible Notes, which corresponds to an initial conversion price of approximately $24.91 per share of our Class A common stock. At any time, prior to the close on the business day immediately preceding June 15, 2023, the Convertible Notes will be convertible under the following circumstances:

a)During any calendar quarter beginning after the calendar quarter ending on December 31, 2016 (and only during such calendar quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

b)During the 5 business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day;

c)Upon the occurrence of specified corporate events; or

d)On or after June 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1 principal amount, at the option of the holder regardless of the foregoing circumstances.

~~Pursuant~~On June 14, 2023, the Company notified the remaining holders of our irrevocable election to ~~item (a) noted above, the Convertible Notes have been convertible since April 1, 2018, and holders~~settle any conversions of the Convertible Notes ~~have~~on or after June 15, 2023 by delivery of the ~~right~~Company’s Class A common stock. As a result, the Company will deliver to ~~convert their notes at any time through at least~~converting note holders in respect of each $1 principal amounts of the Convertible Notes being converted a number of shares of the Company’s Class A common stock equal to the conversion rate in effect on the conversion date. As of June 30, ~~2022. As~~2023, the conversion rate was approximately 40.1405 shares of ~~March 31, 2022, since~~the Company’s Class A common stock.

In May 2023, the Company entered into privately negotiated agreements with certain holders to exchange an aggregate of 6,862,086 shares of the Company’s Class A common stock and $3,949 in cash premiums and accrued interest for $170,952 principal amount of its outstanding Convertible Notes held by such holders (the “Exchanges”). The Exchanges were accounted for as induced conversions for which we recorded a loss on induced conversions of $5,409, which was included in Other (expense) income, net on the Consolidated Statements of Operations. The loss on induced conversions represented the cash premiums paid to investors in excess of the amount of cash or common stock issuable under the original terms of the Convertible Notes, as well as accrued interest and advisor fees incurred upon execution of the Exchanges.

In addition to the Exchanges, holders have converted $39,787 aggregate principal amount of the outstanding Convertible Notes (the “Conversions”). In accordance with the original terms of the Convertible Notes, the Company delivered 1,597,068 shares of the Company’s Class A common stock associated with the Conversions during the three months ended June 30, 2023.

As of June 30, 2023, since the outstanding Convertible Notes mature on December 15, 2023 and are convertible at the option of the holders, the Convertible Notes are reflected in current liabilities on our Consolidated Balance Sheet. ~~As of March 31, 2022, no actual conversions have occurred to date.~~ See Note 5, Earnings Per Share, for a description of the dilutive nature of the Convertible Notes.

In accounting for the issuance of the Convertible Notes, prior to the adoption of ASU 2020-06 on January 1, 2022, we allocated the gross proceeds of the Convertible Notes between the liability and equity components under the cash conversion feature model under prior accounting rules in US GAAP (ASC 470-20). The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument without the associated convertible feature. The carrying amount of the equity component, representing the conversion option, was $36,657 and was determined by deducting the fair value of the liability component from the $215,000 par value of the Convertible Notes. The equity component was not re-measured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (i.e., the debt discount) was amortized to interest expense using the effective interest method with an effective interest rate of 6.4% per annum. Upon adoption of ASU 2020-06 on January 1, 2022, we reversed the separation of the debt and equity components and accounted for the Convertible Notes wholly as debt. We also reversed the amortization of the debt discount, with a cumulative effect adjustment to retained earnings (accumulated deficit) on the adoption date. Prior to the adoption of ASU 2020-06, debt issuance costs attributable to the liability component of $5,454 was being amortized to interest expense using the effective interest method and debt issuance costs attributable to the equity component of $1,110 were netted with the $36,657 equity component in stockholders’ equity. Upon adoption of ASU 2020-06 on January 1, 2022, we reversed the $1,110 of debt issuance costs attributable to the equity component and will account for the entire amount as debt issuance costs that will be amortized as interest expense using the effective interest method, with a cumulative effect adjustment to retained earnings (accumulated deficit) on the adoption date. Refer to Note 2, ~~Significant Accounting Policies – Recent Accounting Pronouncements, for further information regarding the adoption of ASU 2020-06.~~

2221

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

The Convertible Notes consisted of the following components:



	As of				As of
	March 31,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Debt component:
Principal	$	215,000	$	215,000	$	4,261	$	215,000
Less: Unamortized debt discount (1)		—		(11,968)
Less: Unamortized debt issuance costs (2)		(1,604)		(1,939)
Less: Unamortized debt issuance costs						(9)		(900)
Net carrying amount	$	213,396	$	201,093	$	4,252	$	214,100

Equity component (3)	$	—	$	35,547

~~(1)The debt discount associated with the Convertible Notes was derecognized upon adoption of ASU 2020-06 on January 1, 2022.~~

~~(2)Unamortized debt issuance costs as of March 31, 2022 reflects the adoption impact from ASU 2020-06 described above.~~

~~(3)The equity component of the Convertible Notes, net of deferred income taxes, was derecognized upon adoption of ASU 2020-06 on January 1, 2022.~~

The following table sets forth total interest expense recognized related to the Convertible Notes:



	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2023		2022		2023		2022
3.375% contractual coupon	$	1,814	$	1,814	$	1,326	$	1,814	$	3,140	$	3,628
Amortization of debt discount (1)		—		1,356
Amortization of debt issuance costs		235		205		656		235		891		470
Interest expense	$	2,049	$	3,375	$	1,982	$	2,049	$	4,031	$	4,098

~~(1)~~The Company adopted ASU 2020-06 during the first quarter of 2022 using the modified retrospective method. Prior year reports amounts were not revised and are presented in accordance with accounting rules prior to the adoption of ASU 2020-06.

Convertible Note Hedge & Warrant Transactions

In connection with the pricing of the Convertible Notes in December 2016 and January 2017, we entered into convertible note hedge transactions with respect to our Class A common stock (the “Note Hedge”). The Note Hedge transactions cover approximately 8.63 million shares of our Class A common stock and are exercisable upon conversion of the Convertible Notes. The Note Hedge will expire on December 15, 2023, unless earlier terminated. The Note Hedge transactions have been accounted for as part of additional paid-in capital.

~~Warrant Transactions~~

In connection with entering into the Note Hedge transactions described above, we also concurrently entered into separate warrant transactions (the “Warrants”), to sell warrants to acquire approximately 8.63 million shares of our Class A common stock in connection with the Note Hedge transactions at an initial strike price of approximately $31.89 per share, which represents a premium of approximately 60.0% over the last reported sale price of our Class A common stock of $19.93 on December 12, 2016 (initial issuance date of the Convertible Notes). The Warrants transactions have been accounted for as part of additional paid-in capital.

In connection with the Exchanges and Conversions, the Company entered into agreements with each of the bank counterparties to unwind a portion of the Note Hedge and Warrants (collectively "the Unwind Agreements"). Pursuant to the terms of the Unwind Agreements, the Company received net cash proceeds of $49,080 for the settlement of the Note Hedge and Warrants, which resulted in a corresponding increase in Additional paid-in-capital on our Consolidated Balance Sheet as of June 30, 2023. The Unwind Agreements reduced the number of shares of our Class A common stock covered by each of the Bond Hedge and Warrants, respectively, to approximately 360,000 shares as of June 30, 2023.

2322

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

14. Long-Term Debt and Credit Facility

Included within Long-Term Debt are the following:



	As of				As of
	March 31,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Current portion of long-term debt:
Mortgage	$	435	$	430	$	459	$	449
Total current portion of long-term debt	$	435	$	430	$	459	$	449

Long-term debt:
Mortgage	$	21,173	$	21,284	$	20,622	$	20,848
Total long-term debt	$	21,173	$	21,284	$	20,622	$	20,848

Total	$	21,608	$	21,714	$	21,081	$	21,297

Revolving Credit Facility

In May ~~2019,~~2023, the Company ~~entered into an~~ amended ~~and restated~~its $200,000 senior unsecured revolving credit facility ~~with a syndicated group of banks, with JPMorgan Chase Bank, N.A. acting as Administrative Agent~~ (the “Revolving Credit Facility”). primarily to replace the London Interbank Offered Rate with the Secured Overnight Financing Rate (“SOFR”) as the rate to which interest payments are indexed. The Revolving Credit Facility has a maturity date of May 24, 2024. Applicable interest rates for the borrowings under the Revolving Credit Facility are based on the Company’s current consolidated leverage ratio. As of ~~March 31, 2022,~~June 30, 2023, the ~~LIBOR-based~~SOFR-based rate plus margin was ~~1.96%~~6.37%, and the Company is required to pay a commitment fee calculated at a rate per annum of 0.15% on the average daily unused portion of the Revolving Credit Facility. Under the terms of the Revolving Credit Facility, the Company is subject to certain financial covenants and restrictions, including restrictions on our ability to pay dividends and limitations with respect to our indebtedness, liens, mergers and acquisitions, dispositions of assets, investments, capital expenditures and transactions with affiliates.

As of ~~March 31, 2022,~~June 30, 2023, the Company was in compliance with the terms of the Revolving Credit Facility and had available debt capacity under the Revolving Credit Facility of $200,000. As of ~~March 31, 2022~~June 30, 2023 and December 31, ~~2021,~~2022, there were 0no amounts outstanding under the Revolving Credit Facility.

Mortgage

In September 2016, the Company acquired real property and assumed future obligations under a loan agreement, dated June 8, 2015, in the principal amount of $23,000, which loan is secured by a mortgage on the property. The loan bears interest at the rate of 4.50% per annum and requires monthly interest only payments of $86 until June 2018 and interest and principal payments of $117 per month thereafter, with a balloon payment upon maturity on July 5, 2025. ~~There is a significant yield maintenance premium for prepayments.~~ Pursuant to the loan agreement, since the assets of WWE Real Estate, a subsidiary of the Company, represent collateral for the underlying mortgage, these assets will not be available to satisfy debts and obligations due to any other creditors of the Company.

15. Concentration of Credit Risk

We continually monitor our position with, and the credit quality of, the financial institutions that are counterparties to our financial instruments. Our accounts receivable relates principally to a limited number of distributors, including WWE Network, television, and premium live event ~~programming~~ distributors, and licensees. We closely monitor the status of receivables with these customers and maintain allowances for anticipated losses as deemed appropriate. We believe credit risk with respect to accounts receivable is limited due to the generally high credit quality of the Company’s major customers. At ~~March 31, 2022~~June 30, 2023 our 2 largest receivable balances from individual customers were ~~40%~~41% and ~~26%~~17% of our gross accounts receivable. At December 31, ~~2021,~~2022, our 2 largest receivable ~~balances~~balance from ~~customers were 38% and 26%~~an individual customer was 19% of our gross accounts receivable. No other customers individually exceeded 10% of our gross accounts receivable balance.

2423

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

16. Income Taxes

As of ~~March 31, 2022~~June 30, 2023 and December 31, ~~2021,~~2022, we had ~~$16,745~~$38,414 and ~~$13,100,~~$45,619, respectively, of deferred income tax assets, net, included in our Consolidated Balance Sheets.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“The Act”). The Act introduced new provisions including a 15% corporate alternative minimum tax for certain large corporations. The Company does not believe it will be subject to such tax in the near future. The Act also imposes a 1% excise tax on certain stock repurchases made by publicly traded companies after December 31, 2022. The total taxable value of shares repurchased will be reduced by the fair market value of any newly issued shares during the taxable year. While additional guidance has not been issued, we are currently evaluating the applicability and the effect of the new law to our future cash flows and, based on our preliminary assessment, we do not expect a material impact on our Consolidated Financial Statements.

The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is required to reduce the net deferred tax assets to the amount that is more likely than not to be realized in future periods. The Company believes that based on past performance, expected future taxable income and prudent and feasible tax planning strategies, it is more likely than not that the net deferred tax assets will be realized. Changes in these factors may cause us to increase our valuation allowance on deferred tax assets, which would impact our income tax expense in the period we determine that these factors have changed.

As of June 30, 2023, based on current facts and circumstances, management believes that it is more likely than not that the Company will not realize the benefit for a portion of its deferred tax assets associated with foreign tax credits. Accordingly, a partial valuation allowance of $5,427 and $6,813 has been recorded during the three and six months ended June 30, 2023. The Company will continue to assess the realizability of these deferred assets on a quarterly basis.

During the three and six months ended June 30, 2023, in connection with the Exchanges and the Unwind Agreements (as discussed above in Note 13, Convertible Debt), the Company recorded income tax expense of $5,491 primarily related to the cancellation of indebtedness taxable income that was generated by the timing of these transactions as well as the disallowed deduction associated with the loss on induced conversions that was recorded during the period.

17. Content Production Incentives

The Company has access to various governmental programs that are designed to promote content production within the United States of America and certain international jurisdictions. These programs primarily consist of nonrefundable tax credits issued by a jurisdiction on an annual basis for qualifying expenses incurred during the year in the production of certain entertainment content created in whole or in part within the jurisdiction.

During the three and six months ended June 30, 2023, the Company recorded content production incentives of $1,885 and $4,364 related to qualifying content production activities. These incentives are recorded as an offset to production expenses within Operating expenses on our Consolidated Statements of Operations. We did not record any content production incentives during the three and six months ended June 30, 2022.

18. Commitments and Contingencies

Our future commitments related to our operating and finance leases are separately disclosed in Note 8, Leases.

Legal Proceedings

On January 11, 2022, a complaint was filed against the Company by MLW Media LLC (“MLW”), captioned MLW Media LLC v. World Wrestling Entertainment, Inc., No. 5:22-cv-00179-EJD (N.D. Cal.) alleging that the Company supposedly interfered with MLW’s contractual relationship with Tubi, a streaming service owned by Fox Corp., and MLW’s prospective economic advantage with respect to its relationship with VICE TV, and supposedly engaged in unfair business practices in violation of the Sherman Antitrust Act and California law. Such supposedly unfair business practices are alleged to include cutting off competitors’ access to ~~viewers and~~ licensing opportunities, interfering with contracts, poaching talent, and eliminating price ~~competition, and misappropriating and attempting~~competition. On February 13, 2023, the court dismissed all MLW’s claims, allowing MLW leave to ~~misappropriate confidential information of its competitors.~~amend. On March ~~15, 2022,~~6, 2023, MLW filed its first amended complaint. On April 7, 2023, the Company

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

moved to dismiss all claims asserted in the ~~compliant. MLW filed its response~~first amended complaint which was denied by the court on June 15, 2023. WWE’s answer to the ~~Company’s motion to dismiss~~amended complaint is due on ~~April 22, 2022.~~August 14, 2023 and the court has lifted its stay on discovery. The Company believes that all claims in the lawsuit are without merit and intends to defend itself vigorously against them.

As previously ~~announced,~~disclosed, a ~~special committee~~Special Committee of independent members of the Company’s Board of Directors (the “Special Committee”) was formed to investigate alleged misconduct by the Company’s ~~former Chairman and Chief~~then-Chief Executive Officer, Vincent K. McMahon. Mr. McMahon initially resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling ~~interest. The~~interest and, as of January 9, 2023, serves as Executive Chairman of the Board of Directors. Although the Special Committee investigation is complete, the Company has received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas, demands and/or ~~demands~~other claims and complaints arising from, related to, or in connection with these matters.

On January 13, 2023, two purported stockholders of the Company, Carol Casale and Chrystal Lavalle, filed a derivative complaint in the Delaware Court of Chancery entitled Carol Casale v. Vincent K. McMahon, No. 2023-0039-JTL, purportedly on behalf of the Company, against Mr. McMahon (the “Casale Action”). The plaintiffs alleged that Mr. McMahon breached his fiduciary duties by engaging in alleged misconduct (including the alleged misconduct investigated by the Special ~~Committee~~Committee), by purportedly failing to disclose that alleged misconduct to the Board of Directors and allegedly frustrating the Board’s investigation ~~is substantially complete.~~thereof, and by later re-appointing himself to the Board via written consent. The plaintiffs sought damages, declaratory relief, their costs and expenses, and other unspecified relief. On March 20, 2023, Mr. McMahon and the Company responded to the complaint in the Casale action. On March 6, 2023, another purported stockholder, Dennis Palkon, filed a derivative complaint in the Delaware Court of Chancery entitled Dennis Palkon v. World Wrestling Entertainment, Inc., No. 2023-0274-JTL, purportedly on behalf of the Company, against Mr. McMahon, Mr. Barrios, and Ms. Wilson (the “Palkon Action”). The plaintiff alleged that Mr. McMahon breached his fiduciary duties by engaging in misconduct (including the alleged misconduct investigated by the Special Committee) by failing to disclose that alleged misconduct to the Board of Directors and allegedly frustrating the Board’s investigation thereof, and by later re-appointing himself to the Board via written consent. The plaintiff alleged that Mr. Barrios and Ms. Wilson aided and abetted certain of Mr. McMahon’s purported breaches of fiduciary duty. The plaintiff sought damages, declaratory relief, his costs and expenses, and other unspecified relief. By stipulated order entered on May 3, 2023, the Casale Action and the Palkon Action were, among other things, consolidated together and dismissed with prejudice as to the named plaintiffs only on the ground of mootness. The court retained jurisdiction solely for purposes of adjudicating any application related to an award of attorneys’ fees and expenses for counsel for the plaintiffs.

Additional information with respect to this Note 18 may be found in Part II, Item 1, Legal Proceedings.

In addition to the foregoing, from time to time we become a party to other lawsuits and claims. By its nature, the outcome of litigation is not known, but the Company does not currently expect this ordinary course litigation to have a material adverse effect on our financial condition, results of operations or liquidity.

~~18.~~19. Stockholders’ Equity

Stock Repurchase Program

In February 2019, the Company’s Board of Directors authorized a stock repurchase program of up to $500,000 of our common stock. Repurchases may be made from time to time at management’s discretion subject to certain pre-approved parameters and in accordance with all applicable securities and other laws and regulations. The stock repurchase program does not obligate the Company to repurchase any minimum dollar amount or number of shares and may be modified, suspended or discontinued at any time. The Company suspended the stock repurchase program during the second quarter of 2022 and, as a result of the Transaction Agreement, currently has no plans to resume the program.

The Company did not repurchase any shares of common stock in the open market during the three and six months ended June 30, 2023. During the three months ended ~~March 31,~~June 30, 2022, the Company repurchased ~~524,498~~170,359 shares of common stock in the open market at an average price of ~~$57.21~~$58.70 for an aggregate amount of ~~$30,006.~~$10,000. During the ~~three~~six months ended ~~March 31, 2021,~~June 30, 2022, the Company repurchased ~~1,497,820~~694,857 shares of common stock in the open market at an average price of ~~$50.07~~$57.57 for an aggregate amount of ~~$75,000.~~$40,006. As of ~~March 31, 2022, $220,924~~June 30, 2023, $210,924 of common stock remained under the original stock repurchase program authorization.

Stock repurchases are accounted for under the cost method. All shares repurchased to date have been retired by the Company with no unsettled share repurchases as of March 31, 2022. When the Company retires its own common stock, the excess of the repurchase price over par value is allocated between additional paid-in capital and retained earnings, with certain limitations. The portion allocated to additional paid-in capital is determined by applying a percentage, determined by dividing the number of shares to be retired by the number of shares issued and outstanding as of the retirement date, to the balance of additional paid-in capital as of the retirement date.

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WORLD WRESTLING ENTERTAINMENT, INC.

Notes to Consolidated Financial Statements

(In thousands, except share data)

(Unaudited)

Direct costs incurred to repurchase the common stock were not material and were expensed in the period incurred. For the three months ended March 31, 2022 and 2021, $25,085 and $61,360, respectively, and $4,916 and $13,625, respectively, was deducted from retained earnings and additional paid-in capital, respectively, related to the common stock shares retired.

~~Stock issuances and other, net~~Controlling Stockholder Contributions

During the ~~three~~six months ended ~~March 31, 2022 and 2021, stock issuances and other, net~~June 30, 2023, Controlling stockholder contributions in our Consolidated Statements of Stockholders’ Equity include cash capital contributions of $17,405 from our controlling stockholder. During the three and six months ended June 30, 2023 and 2022, Controlling stockholder contributions in our Consolidated Statements of Stockholders’ Equity also include non-cash capital contributions of ~~$2,200~~$1,650 and ~~$1,200,~~$0, and $9,983 and $2,700, respectively, from our ~~majority~~controlling stockholder. These cash and non-cash capital contributions represent amounts paid personally by Mr. McMahon, our ~~majority~~controlling stockholder, to the Company and certain counterparties. See Note 20, ~~Revision of Previously Issued Unaudited Interim Consolidation Financial Information~~Related Party Transactions, for additional information.

~~19.~~20. Related Party Transactions

Vincent K. McMahon, ~~the Company’s former~~who serves as Executive Chairman of the Company’s Board of Directors, ~~and Chief Executive Officer, who resigned from all positions held with the Company on July 22, 2022,~~ controls a substantial majority of the voting power of the issued and outstanding shares of our common ~~stock.~~stock (“Mr. McMahon”). Through the beneficial ownership of a substantial majority of our Class B common stock, Mr. McMahon can effectively exercise control over our affairs.

~~See Note 20,~~ ~~Revision~~During the six months ended June 30, 2023 and 2022, Mr. McMahon made payments of ~~Previously Issued Unaudited Interim Consolidated Financial Information, for a discussion of~~$8,333 and $2,200, respectively, associated with certain payments that Mr. McMahon agreed to make during the period of 2006 through 2022 (including amounts paid and payable in the future) to certain counterparties. These payments are considered non-cash capital contributions and are included as a component of Controlling stockholder contributions on our Consolidated Statements of Stockholders’ Equity. As of June 30, 2023 and December 31, 2022, total liabilities of $3,492 and $11,825, respectively, were included on our Consolidated Balance Sheets related to the future payments owed under these agreements by Mr. McMahon.

Additionally, during the six months ended June 30, 2023, Mr. McMahon made a payment of $17,405 to reimburse the Company for the costs that ~~were not appropriately recorded as expenses~~have been incurred and paid by the Company, through January 31, 2023, in connection with and/or arising from the investigation conducted by a Special Committee of the Company’s ~~previously issued Consolidated Financial Statements.~~Board of Directors, related revisions to the Company’s financial statements and other matters. Mr. McMahon has agreed to review in good faith and reimburse the Company for additional costs incurred by the Company subsequent to January 31, 2023 (or that have been incurred by the Company and not yet paid as of January 31, 2023), in connection with and/or arising from the same matters.

During the six months ended June 30, 2023, the Company incurred $2,650 of expenses paid or payable by Mr. McMahon for plaintiffs’ attorneys’ fees in connection with a shareholder lawsuit that was mooted. Other shareholder litigation remains ongoing as described in Note 18, Commitments and Contingencies.

~~20. Revision of Previously Issued Unaudited Interim Consolidated Financial Information~~

On June 17, 2022, the Company and its Board of Directors announced that a special committee of independent members of Company’s Board of Directors (the “Special Committee”) was formed to investigate alleged misconduct by the Company’s former Chairman and Chief Executive Officer, Vincent K. McMahon, who resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest (“Mr. McMahon”), and another executive, who is also no longer with the Company.

The findings of the investigation identified agreements executed by Mr. McMahon which were previously unknown to the Company. On July 25, 2022, the Company announced that it had determined that certain payments that Mr. McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future totaling $14,600), were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. The Company subsequently identified two additional payments totaling $5,000, unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded in the Company’s Consolidated Financial Statements. Together, these unrecorded expenses total $19,600 (the “Unrecorded Expenses”). The Company has evaluated the Unrecorded Expenses and has determined that such amounts should have been recorded as expenses in each of the periods in which they became probable and estimable. All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Special Committee investigation is substantially complete.

The Company evaluated the relevant guidance associated with the Unrecorded Expenses and concluded that these amounts should have been recognized by the Company as expenses in each of the periods in which they became probable and estimable in accordance with the SEC’s Staff Accounting Bulletin Topic 5T, ~~Miscellaneous Accounting, Accounting for Expenses or Liabilities Paid by Principal Stockholders~~ (“Topic 5T”). As a result, the Company concluded its previously reported operating income and net income for the fiscal year ended December 31, 2021 was overstated by $3,000, respectively, and the Company’s previously reported beginning accumulated deficit as of January 1, 2019 was overstated by $16,600, for which the latter amount represents the aggregate impact of the Unrecorded Expenses on the Company’s previously reported operating income and net income between fiscal years 2006 and 2018. As prescribed by Topic 5T, the corresponding impact of the Unrecorded Expenses resulted in an understatement of the Company’s previously reported additional paid-in-capital of $9,100, $10,600, $11,800, $13,000, and $15,200 as of January 1, 2019, December 31, 2019, 2020, and 2021, and March 31, 2022, respectively, and an understatement of total liabilities, which represents the amounts that remained payable by Mr. McMahon, of $7,500, $6,000, $4,800, $6,600, and $4,400 as of January 1, 2019, December 31, 2019, 2020, and 2021, and March 31, 2022, respectively. Notwithstanding the foregoing accounting framework required by Topic 5T for the Unrecorded Expenses, all of the payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The impact of the Unrecorded Expenses on the Company’s previously reported income taxes was inconsequential.

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~~WORLD WRESTLING ENTERTAINMENT, INC.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the consolidated financial statements and related notes included elsewhere in this report.

Our operations are organized around the following principal activities:

Media:

The Media segment reflects the production and monetization of long-form and short-form video content across various platforms, including broadcast and pay television, streaming, as well as digital and social media. Across these platforms, revenues principally consist of content rights fees associated with the distribution of our programming content, subscriptions to WWE Network, and advertising and sponsorships.

Live Events:

Live events provide ongoing content for our media platforms. Live Event segment revenues consist primarily of ticket sales and the sale of travel packages associated with the Company’s global live events.

Consumer Products:

The Consumer Products segment engages in the merchandising of WWE branded products, such as video games, toys and apparel, through licensing arrangements and direct-to-consumer sales. Revenues principally consist of royalties and licensee fees related to WWE branded products, and sales of merchandise distributed at our live events and through eCommerce platforms. Beginning July 2022, we launched an exclusive, multi-year partnership with Fanatics to create a new, enhanced experience for WWE fans globally, and transitioned our digital retail platform to Fanatics. In May 2023, we expanded this partnership, and transitioned the operations of our global event merchandise business to Fanatics.

~~Notes to Consolidated Financial Statements~~Results of Operation

~~(In thousands, except share data)~~The Company presents Adjusted OIBDA as the primary measure of segment profit (loss). The Company defines Adjusted OIBDA as operating income before depreciation and amortization, excluding stock-based compensation, certain impairment charges and other non-recurring items that management deems would impact the comparability of results between periods. Adjusted OIBDA includes depreciation and amortization expenses directly related to supporting the operations of our segments, including content production asset amortization, depreciation and amortization of costs related to content delivery and technology assets utilized for WWE Network, as well as amortization of right-of-use assets related to finance leases of equipment used to produce and broadcast our live events. The Company believes the presentation of Adjusted OIBDA is relevant and useful for investors because it allows investors to view our segment performance in the same manner as the primary method used by management to evaluate segment performance and make decisions about allocating resources. Additionally, we believe that Adjusted OIBDA is a primary measure used by media investors, analysts and peers for comparative purposes.

~~(Unaudited)~~Adjusted 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 Adjusted OIBDA is that it excludes depreciation and amortization, which represents the periodic charge for certain fixed assets and intangible assets used in our business. Additionally, Adjusted OIBDA excludes stock-based compensation, a non-cash expense that may vary between periods with limited correlation to underlying operating performance, as well as other non-recurring items that management deems would impact the comparability of results between periods. Adjusted 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 Adjusted OIBDA.

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Summary

~~Based on management’s evaluation~~On April 2, 2023, the Company entered into a Transaction Agreement (the “Transaction Agreement”), by and among the Company, Endeavor, and various other WWE and Endeavor subsidiaries, pursuant to which, among other things, WWE and Endeavor agreed to combine the businesses of WWE and Zuffa Parent, LLC (“HoldCo”), a wholly owned subsidiary of Endeavor which owns and operates the Ultimate Fighting Championship (“UFC”), which combined business will be managed by a new publicly traded company (“New PubCo”). Upon closing, among other things, Endeavor and its subsidiaries are expected to collectively own 51% of the ~~Unrecorded Expenses in consideration~~voting power of New PubCo and 51% of the ~~SEC Staff’s Accounting Bulletins Nos. 99 (“SAB 99”~~economic interests in HoldCo, with former securityholders of WWE effectively owning 49% of the economic interests in HoldCo, 49% of the voting power of New PubCo and 100% of the economic ownership of New PubCo, in each case on a fully diluted basis. The various transactions set forth in the Transaction Agreement (the “Transactions”) are expected to close in the second half of 2023, subject to satisfaction or waiver of certain customary conditions. The consummation of the Transactions is not subject to a financing condition. Additionally, please refer to Part II, Item 1A, Risk Factors, which provides a discussion of risk factors related to the Transaction Agreement and ~~108 (“SAB 108”)~~the Transactions.

Three Months Ended June 30, 2023 compared to Three Months Ended June 30, 2022

(dollars in millions, except where noted)

The following tables present our consolidated results followed by our Adjusted OIBDA results:



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net revenues
Media	$	320.3	$	243.1	32	%
Live Events		62.0		41.0	51	%
Consumer Products		28.0		44.1	(37)	%
Total net revenues (1)		410.3		328.2	25	%
Operating expenses
Media		188.0		145.2	29	%
Live Events		25.8		24.7	4	%
Consumer Products		15.4		27.0	(43)	%
Total operating expenses (2)		229.2		196.9	16	%
Marketing and selling expenses
Media		20.8		15.8	32	%
Live Events		3.1		3.1	—	%
Consumer Products		1.3		1.2	8	%
Total marketing and selling expenses		25.2		20.1	25	%
General and administrative expenses (3)		58.6		32.4	81	%
Depreciation and amortization		10.0		9.5	5	%
Operating income		87.3		69.3	26	%
Interest expense		4.9		4.7	4	%
Other expense, net		(1.6)		(0.2)	700	%
Income before income taxes		80.8		64.4	25	%
Provision for income taxes		28.8		15.4	87	%
Net income	$	52.0	$	49.0	6	%

(1)Our consolidated net revenues increased by $82.1 million, or 25%, in the current year quarter as compared to the prior year quarter. This increase was driven by the timing of a large-scale international event as well as $19.7 million in incremental revenues associated with our key content distribution agreements. The current year quarter also includes $9.6 million of higher ticket and ~~interpretations therewith,~~merchandise sales at our live events. These increases were partially offset by eCommerce declines of $8.3 million associated with the transition of our digital retail platforms and declines of $7.0 million associated with the sales of our licensed products. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(2)Our consolidated operating expenses increased by $32.3 million, or 16%, in the current year quarter as compared to the prior year quarter. This increase was primarily driven by $33.7 million of higher production-related costs within our Media segment associated with the timing of a large-scale international event and the creation of the Company’s weekly, in-ring content and premium live events, including WrestleMania. In the current year quarter, the Company ~~concluded~~also incurred $10.1 million of additional management incentive compensation costs primarily driven by improved stock price and business performance. These costs were partially offset by $12.1 million of lower variable costs within our Consumer Products segment, primarily driven by the transition of our digital retail platforms and lower sales of our licensed products. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(3)Our consolidated general and administrative expenses increased by $26.2 million, or 81%, in the current year quarter as compared to the prior year quarter. This increase was primarily driven by $23.0 million of additional legal and professional fees, including $18.8 million of costs associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $3.6 million of additional

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costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors. For further analysis, refer to Management’s Discussion and Analysis of our business segments.



	Three Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	87.3	21	%	$	69.3	21	%
Depreciation and amortization		10.0	2	%		9.5	3	%
Stock-based compensation		19.3	5	%		11.0	3	%
Other adjustments (1)		24.1	6	%		1.7	1	%
Adjusted OIBDA	$	140.7	34	%	$	91.5	28	%

(1)Other adjustments in the current year quarter include $18.8 million of legal and professional fees associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $5.3 million of certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors. Other adjustments in the prior year quarter included certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors.



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Adjusted OIBDA
Media	$	126.1	$	90.7	39	%
Live Events		34.5		13.8	150	%
Consumer Products		12.5		16.5	(24)	%
Corporate		(32.4)		(29.5)	(10)	%
Total Adjusted OIBDA	$	140.7	$	91.5	54	%

Media

The following tables present the performance results and key drivers for our Media segment:



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
Network (including pay-per-view) (1)	$	80.1	$	67.0	20	%
Core content rights fees (2)		154.8		148.5	4	%
Advertising and sponsorship (3)		18.9		17.9	6	%
Other (4)		66.5		9.7	586	%
Total net revenues	$	320.3	$	243.1	32	%

(1)Network revenues consist primarily of license fees from the global distribution of WWE Network content associated with our licensed partner agreements.

(4)Other revenues within our Media segment reflect revenues from the distribution of other WWE content, including, but not limited to, certain live in-ring programming content in international markets, scripted, reality and other programming.

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	Three Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	107.3	33	%	$	78.4	32	%
Depreciation and amortization		4.3	1	%		3.6	1	%
Stock-based compensation		14.5	5	%		8.7	4	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	126.1	39	%	$	90.7	37	%

Media net revenues increased by $77.2 million, or 32%, in the current year quarter as compared to the prior year quarter. This increase was primarily driven by the increase in other revenues within the Media segment of $56.8 million, driven primarily by the timing of a large-scale international event which occurred during the first quarter of the prior year, as well as $5.2 million of additional revenues driven by the delivery of third-party original programming. The current year quarter also includes an increase in our Network revenues of $13.1 million, or 20%, driven primarily by the timing of our premium live events, as well as an increase in our core content rights fees of $6.3 million, or 4%, driven primarily by the contractual escalations of our domestic distribution agreements for our flagship programs, RAW and SmackDown.

Media Adjusted OIBDA as a percentage of revenues increased in the current year quarter as compared to the prior year quarter. This increase was primarily driven by the timing of a large-scale international event coupled with the increase in core content rights fees and network revenues, as discussed above. These increases were partially offset by $7.3 million of higher production-related costs associated with the creation of the Company’s weekly and premium live event content, including our annual WrestleMania events.

Live Events

The following tables present the performance results and key drivers for our Live Events segment:



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
North American ticket sales	$	40.3	$	34.9	15	%
International ticket sales		6.4		2.2	191	%
Advertising and sponsorship (1)		8.8		1.6	450	%
Other (2)		6.5		2.3	183	%
Total net revenues	$	62.0	$	41.0	51	%

Operating Metrics (3)
Total live event attendance		511,300		400,300	28	%
Number of North American events		43		55	(22)	%
Average North American attendance		9,870		6,800	45	%
Average North American ticket price (dollars)	$	93.59	$	91.62	2	%
Number of international events		10		4	150	%
Average international attendance		8,070		6,550	23	%
Average international ticket price (dollars)	$	79.66	$	82.41	(3)	%

(1)Advertising and sponsorships revenues within our Live Events segment primarily consists of fees from advertisers and sponsors who promote their products utilizing the Company’s live events (i.e., presenting sponsor of fan engagement events and advertising signage at the event).

(2)Other revenues within our Live Events segment primarily consists of the sale of travel packages associated with the Company’s global live events, as well as commissions earned through secondary ticketing.

(3)Metrics exclude the events for our developmental NXT brands that typically conduct their events in smaller venues with lower ticket prices.

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	Three Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	33.1	53	%	$	13.2	32	%
Depreciation and amortization		0.1	0	%		0.1	0	%
Stock-based compensation		1.3	2	%		0.5	1	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	34.5	56	%	$	13.8	34	%

Live Events net revenues, which include revenues from ticket sales and travel packages, increased by $21.0 million, or 51%, in the current year quarter as compared to the prior year quarter. Revenues from our ticket sales increased by $9.6 million, or 26%, due to the impact of a 41% increase in average attendance, which was primarily driven by our annual WrestleMania events. Advertising and sponsorship revenues increased by $7.2 million, primarily due to the impact of our annual WrestleMania events in the current year quarter which took place in Los Angeles, California.

Live Events Adjusted OIBDA as a percentage of revenues increased in the current year quarter as compared to the prior year quarter. This increase was driven by the increase in ticket sales and sponsorship revenues, as discussed above.

Consumer Products

The following tables present the performance results and key drivers for our Consumer Products segment:



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
Consumer product licensing	$	15.6	$	22.6	(31)	%
eCommerce		4.6		12.9	(64)	%
Venue merchandise		7.8		8.6	(9)	%
Total net revenues	$	28.0	$	44.1	(37)	%



	Three Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	11.1	40	%	$	15.9	36	%
Depreciation and amortization		—	—	%		—	—	%
Stock-based compensation		1.4	5	%		0.6	1	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	12.5	45	%	$	16.5	37	%

Consumer Products net revenues decreased by $16.1 million, or 37%, in the current year quarter as compared to the prior year quarter. This decrease was primarily driven by a decline in eCommerce revenues of $8.3 million, or 64%, primarily driven by the impact of the ~~Unrecorded Expenses is not material, on an individual~~July 2022 transition of our digital retail platforms. Additionally, the decline in consumer product licensing revenues of $7.0 million, or ~~aggregate basis,~~31%, was primarily due to $4.4 million of lower sales related to the Company’s ~~previously reported consolidated financial statements included~~licensed video games, including our franchise game WWE 2K23, as well as our licensed collectibles.

Consumer Products Adjusted OIBDA as a percentage of revenues increased in the current year quarter as compared to the prior year quarter. This increase was driven by a decline of $12.1 million in certain variable costs driven by the impact of the July 2022 transition of our digital retail platforms and lower sales associated with our consumer products, as discussed above.

Corporate

Unallocated corporate general and administrative expenses largely relate to corporate administrative functions, including finance, investor relations, community relations, corporate communications, information technology, legal, facilities, human resources and our Board of Directors. The Company does not allocate these general and administrative expenses to its business segments.

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	Three Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Loss to Adjusted OIBDA			% of Rev				% of Rev
Operating loss	$	(64.2)	(16)	%	$	(38.2)	(12)	%
Depreciation and amortization		5.6	1	%		5.8	2	%
Stock-based compensation		2.1	1	%		1.2	0	%
Other adjustments (1)		24.1	6	%		1.7	1	%
Adjusted OIBDA	$	(32.4)	(8)	%	$	(29.5)	(9)	%

(1)Other adjustments in the current year quarter include $18.8 million of legal and professional fees associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $5.3 million of certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of members of the Company’s Board of Directors. Other adjustments in the prior year quarter included certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors.

Corporate Adjusted OIBDA decreased by $2.9 million, or 10%, in the current year quarter as compared to the prior year quarter. This decrease was primarily driven by $2.6 million of additional sales tax expenses related to amounts due in certain jurisdictions.

Depreciation and Amortization



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Depreciation and amortization	$	10.0	$	9.5	5	%

Depreciation and amortization expense increased by $0.5 million in the current year quarter as compared to the prior year quarter. This increase was primarily driven by the impact of asset costs of $49.5 million related to the Company’s headquarter facility that began depreciation on April 18, 2023 resulting in $1.1 million of incremental depreciation expense in the current year quarter, partially offset by prior period capital expenditures that have fully depreciated.

Interest Expense



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Interest expense	$	4.9	$	4.7	4	%

Interest expense relates primarily to interest and amortization associated with our convertible notes, our real estate and equipment finance leases, the revolving credit facility and mortgage.

Other Expense, Net



	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Other expense, net	$	(1.6)	$	(0.2)	700	%

Other expense, net is generally comprised of interest income, gains and losses recorded on our equity investments, realized translation gains and losses, and rental income. The incremental expense in the current year quarter as compared to the prior year quarter was primarily driven by a loss of $5.4 million related to the induced conversions of the Convertible Notes, partially offset by $3.1 million of interest income associated with the Company’s short-term investment portfolio.

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Income Taxes



	Three Months Ended
	June 30,						Increase
	2023			2022			(decrease)
Provision for income taxes	$	28.8		$	15.4		87	%
Effective tax rate		36	%		24	%

The effective tax rate increased in the current year quarter as compared to the prior year quarter. This increase was primarily driven by the establishment of an additional valuation allowance against the foreign tax credits generated that will not be fully utilized during 2023, as well as the disallowance of taxable income generated by the partial unwind of the hedge associated with the Convertible Notes.

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Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

(dollars in millions, except where noted)

The following tables present our consolidated results followed by our Adjusted OIBDA results:



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net revenues
Media	$	546.0	$	521.2	5	%
Live Events		94.6		64.1	48	%
Consumer Products		67.3		76.3	(12)	%
Total net revenues (1)		707.9		661.6	7	%
Operating expenses
Media		323.2		287.6	12	%
Live Events		49.4		43.4	14	%
Consumer Products		32.2		46.6	(31)	%
Total operating expenses (2)		404.8		377.6	7	%
Marketing and selling expenses
Media		33.3		30.5	9	%
Live Events		5.9		5.5	7	%
Consumer Products		2.4		2.5	(4)	%
Total marketing and selling expenses		41.6		38.5	8	%
General and administrative expenses (3)		102.1		64.6	58	%
Depreciation and amortization		19.0		19.2	(1)	%
Operating income		140.4		161.7	(13)	%
Interest expense		9.2		11.0	(16)	%
Other income, net		0.9		0.1	800	%
Income before income taxes		132.1		150.8	(12)	%
Provision for income taxes		43.4		35.7	22	%
Net income	$	88.7	$	115.1	(23)	%

(1)Our consolidated net revenues increased by $46.3 million, or 7%, in the current year period as compared to the prior year period. This increase was primarily driven by $27.7 million of additional revenues associated with our key content distribution agreements coupled with $23.3 million of incremental ticket and merchandise sales at our live events. These increases were partially offset by declines of $12.2 million in eCommerce revenues primarily driven by the impact of the July 2022 transition of our digital retail platforms. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(2)Our consolidated operating expenses increased by $27.2 million, or 7%, in the current year period as compared to the prior year period. This increase was primarily driven by $31.6 million of higher production-related costs within our Media segment, primarily associated with the creation of the Company’s weekly, in-ring content and premium live events, including WrestleMania. In the current year period, the Company also incurred $15.8 million of additional management incentive compensation costs primarily driven by improved stock price and business performance. Additionally, we incurred $4.4 million of higher event-related costs in the current year period within our Live Events segment, primarily driven by the impact of additional events. These costs were partially offset by $16.6 million of lower variable costs within our Consumer Products segment, primarily driven by the transition of our digital retail platforms. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(3)Our consolidated general and administrative expenses increased by $37.5 million, or 58%, in the current year period as compared to the prior year period. This increase was primarily driven by $33.6 million of additional legal and professional fees, including $25.4 million of costs associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $5.4 million of additional costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors and expenses paid by Mr. McMahon for plaintiffs’ attorneys’ fees in connection with a shareholder lawsuit that was mooted. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

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	Six Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	140.4	20	%	$	161.7	24	%
Depreciation and amortization		19.0	3	%		19.2	3	%
Stock-based compensation		33.0	5	%		20.6	3	%
Other adjustments (1)		32.5	5	%		1.7	0	%
Adjusted OIBDA	$	224.9	32	%	$	203.2	31	%

(1)Other adjustments in the current year period include $25.4 million of legal and professional fees associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $7.1 million of certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of members of the Company’s Board of Directors and expenses paid by Mr. McMahon for plaintiffs’ attorneys’ fees in connection with a shareholder lawsuit that was mooted. Other adjustments in the prior year period included certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors.




	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Adjusted OIBDA
Media	$	213.9	$	218.9	(2)	%
Live Events		41.5		16.6	150	%
Consumer Products		34.7		28.4	22	%
Corporate		(65.2)		(60.7)	(7)	%
Total Adjusted OIBDA	$	224.9	$	203.2	11	%

Media

The following tables present the performance results and key drivers for our Media segment:



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
Network (including pay-per-view) (1)	$	131.5	$	125.7	5	%
Core content rights fees (2)		308.7		287.6	7	%
Advertising and sponsorship (3)		34.5		37.7	(8)	%
Other (4)		71.3		70.2	2	%
Total net revenues	$	546.0	$	521.2	5	%

(1)Network revenues consist primarily of license fees from the global distribution of WWE Network content associated with our licensed partner agreements.



	Six Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	180.9	33	%	$	195.8	38	%
Depreciation and amortization		8.7	2	%		7.2	1	%
Stock-based compensation		24.3	4	%		15.9	3	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	213.9	39	%	$	218.9	42	%

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Media net revenues increased by $24.8 million, or 5%, in the current year period as compared to the prior year period. This increase was primarily driven by incremental core content rights fees of $21.1 million, or 7%, primarily due to the contractual escalations of our key domestic distribution agreements for our flagship programs, RAW and SmackDown, as well as increases in Network revenues of $5.8 million, or 5%, primarily driven by the timing of our premium live events.

Media Adjusted OIBDA as a percentage of revenues decreased in the current year period as compared to the prior year period. This decrease was primarily driven by the $31.6 million of higher production-related costs associated with the creation of the Company’s weekly and premium live event content. This decline was partially offset by the increased core content rights fees and Network revenues, as discussed above.

Live Events

The following tables present the performance results and key drivers for our Live Events segment:



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
North American ticket sales	$	70.5	$	54.8	29	%
International ticket sales		6.4		2.2	191	%
Advertising and sponsorship (1)		9.8		2.7	263	%
Other (2)		7.9		4.4	80	%
Total net revenues	$	94.6	$	64.1	48	%

Operating Metrics (3)
Total live event attendance		904,000		697,100	30	%
Number of North American events		93		107	(13)	%
Average North American attendance		8,850		6,270	41	%
Average North American ticket price (dollars)	$	83.81	$	80.72	4	%
Number of international events		10		5	100	%
Average international attendance		8,070		5,240	54	%
Average international ticket price (dollars)	$	79.66	$	82.41	(3)	%

(3)Metrics exclude the events for our developmental NXT brands that typically conduct their events in smaller venues with lower ticket prices.



	Six Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	39.2	41	%	$	15.2	24	%
Depreciation and amortization		0.1	0	%		0.1	0	%
Stock-based compensation		2.2	2	%		1.3	2	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	41.5	44	%	$	16.6	26	%

Live Events net revenues, which include revenues from ticket sales and travel packages, increased by $30.5 million, or 48%, in the current year period as compared to the prior year period. Revenues from our ticket sales increased by $19.9 million, or 35%, primarily due to the impact of a 41% increase in average attendance. Advertising and sponsorship revenues increased by $7.1 million, primarily due to the impact of our annual WrestleMania events in the current year period which took place in Los Angeles, California.

Live Events Adjusted OIBDA as a percentage of revenues increased in the current year period as compared to the prior year period. This increase was driven by the increase in ticket sales and sponsorship revenues, as discussed above, partially offset by $4.4 million of increased event-related costs resulting from a change in venue mix.

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Consumer Products

The following tables present the performance results and key drivers for our Consumer Products segment:



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Net Revenues
Consumer product licensing	$	42.4	$	42.6	(0)	%
eCommerce		8.4		20.6	(59)	%
Venue merchandise		16.5		13.1	26	%
Total net revenues	$	67.3	$	76.3	(12)	%



	Six Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Income to Adjusted OIBDA			% of Rev				% of Rev
Operating income	$	32.5	48	%	$	27.1	36	%
Depreciation and amortization		0.1	0	%		0.1	0	%
Stock-based compensation		2.1	3	%		1.2	2	%
Other adjustments		—	—	%		—	—	%
Adjusted OIBDA	$	34.7	52	%	$	28.4	37	%

Consumer Products net revenues decreased by $9.0 million, or 12%, in the current year period as compared to the prior year period. This decrease was primarily driven by eCommerce declines of $12.2 million, or 59%, primarily driven by the impact of the July 2022 transition of our digital retail platforms. This decrease was partially offset by increases in venue merchandise revenues of $3.4 million, or 26%, resulting from the impact of a 41% increase in average attendance, including our annual WrestleMania events.

Consumer Products Adjusted OIBDA as a percentage of revenues increased in the current year period as compared to the prior year period. This increase was primarily driven by a decline of $16.6 million in certain variable costs driven by the impact of the July 2022 transition of our digital retail platforms and lower sales associated with our consumer products, as discussed above.

Corporate



	Six Months Ended
	June 30,
	2023				2022
Reconciliation of Operating Loss to Adjusted OIBDA			% of Rev				% of Rev
Operating loss	$	(112.2)	(16)	%	$	(76.4)	(12)	%
Depreciation and amortization		10.1	1	%		11.8	2	%
Stock-based compensation		4.4	1	%		2.2	0	%
Other adjustments (1)		32.5	5	%		1.7	0	%
Adjusted OIBDA	$	(65.2)	(9)	%	$	(60.7)	(9)	%

(1)Other adjustments in the current year period include $25.4 million of legal and professional fees associated with the Company’s strategic alternatives review and Transaction Agreement with Endeavor, as well as $7.1 million of certain costs incurred connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors and expenses paid by Mr. McMahon for plaintiffs’ attorneys’ fees in connection with a shareholder lawsuit that was mooted. Other adjustments in the prior year period included certain costs incurred in connection with and/or arising from the investigation conducted by the Special Committee of independent members of the Company’s Board of Directors.

Corporate Adjusted OIBDA decreased by $4.5 million, or 7%, in the current year period as compared to the prior year period. This decrease was primarily driven by $2.8 million of additional legal and professional costs as well as $2.1 million of sales tax expenses related to amounts due in certain jurisdictions.

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Depreciation and Amortization



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Depreciation and amortization	$	19.0	$	19.2	(1)	%

Depreciation and amortization expense decreased by $0.2 million in the current year period as compared to the prior year period. This decrease was primarily driven by prior period capital expenditures that have fully depreciated, partially offset by the impact of asset costs of $49.5 million related to the Company’s headquarter facility that began depreciation on April 18, 2023 resulting in $1.1 million of incremental depreciation expense in the current year period.

Interest Expense



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Interest expense	$	9.2	$	11.0	(16)	%

Interest expense relates primarily to interest and amortization associated with our convertible notes, our real estate and equipment finance leases, the revolving credit facility and mortgage. The decrease in the current year period was primarily driven by $2.1 million of additional capitalized interest associated with the Company’s projects in progress.

Other Income, Net



	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Other income, net	$	0.9	$	0.1	800	%

Other income, net is comprised of interest income, gains and losses recorded on our equity investments, realized translation gains and losses, and rental income. The increase in the current year period as compared to the prior year period was primarily driven by $6.0 million of interest income associated with the Company’s short-term investment portfolio, partially offset by a loss of $5.4 million related to the induced conversions of the Convertible Notes.

Income Taxes



	Six Months Ended
	June 30,						Increase
	2023			2022			(decrease)
Provision for income taxes	$	43.4		$	35.7		22	%
Effective tax rate		33	%		24	%

The effective tax rate increased in the current year period as compared to the prior year period. This increase was primarily driven by the establishment of a valuation allowance against the foreign tax credits generated that will not be fully utilized during 2023, as well as the disallowance of taxable income generated by the partial unwind of the hedge associated with the Convertible Notes.

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Liquidity and Capital Resources

We had cash and cash equivalents and short-term investments of $523.8 million and $478.7 million as of June 30, 2023 and December 31, 2022, respectively. Our short-term investments consist primarily of U.S. Treasury securities, corporate bonds and government agency bonds. Our debt balance totaled $25.3 million and $235.4 million as of June 30, 2023 and December 31, 2022, respectively, and includes the carrying value of $4.3 million and $214.1 million related to our convertible senior notes due 2023 as of June 30, 2023 and December 31, 2022, respectively.

We believe that our existing cash and cash equivalents and short-term investment balances, along with cash generated from operations, will be sufficient to meet our ongoing operating requirements for at least the next twelve months, inclusive of transaction and other costs associated with the Transaction Agreement described below, dividend payments, debt service, content production activities, planned capital expenditures and for any discretionary repurchase of shares of our common stock under our share repurchase program, as described below. The Company also has available capacity of $200.0 million under its Revolving Credit Facility, as defined below.

As previously ~~filed~~discussed, on April 2, 2023, the Company entered into a Transaction Agreement by and among the Company, Endeavor, and various other WWE and Endeavor subsidiaries, pursuant to which, among other things, WWE and Endeavor agreed to combine the businesses of WWE and UFC, which combined business will be managed by a new publicly traded company. The Company has incurred and will continue to incur other significant costs, expenses and fees for professional services and other transaction costs in connection with the Transactions. Refer to Part II, Item 1A, Risk Factors, which provides a discussion of risk factors related to the Transactions.

The Company estimates that total capital expenditures related to the Company’s headquarter facility, for which construction is expected to be substantially complete in 2023, will be approximately $320 million to $340 million in the aggregate, partially offset by tenant improvement allowances, tax credits and proceeds from the sale of other real estate assets. Excluding these items, the total net cost of the Company’s headquarter facility is estimated within a range of $210 million to $220 million. The Company expects total capital expenditures will return to approximately 4% to 5% of revenues once construction of the Company’s headquarter facility has been completed.

In February 2019, the Company’s Board of Directors authorized a stock repurchase program of up to $500.0 million of our common stock. Repurchases may be made from time to time at management’s discretion subject to certain pre-approved parameters and in accordance with all applicable securities and other laws and regulations. The extent to which WWE repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements and other corporate considerations. Repurchases under this program may be funded by one or a combination of existing cash balances and free cash flow. The stock repurchase program does not obligate the Company to repurchase any minimum dollar amount or number of shares, and may be modified, suspended or discontinued at any time. The Company suspended the stock repurchases program during the second quarter of 2022 and, as a result of the Transaction Agreement, currently has no plans to resume the program.

Debt Summary and Borrowing Capacity

The Company has $4.3 million aggregate principal amount of its 3.375% convertible senior notes (the “Convertible Notes”) due December 15, 2023 outstanding as of June 30, 2023. Refer to Note 13, Convertible Debt, and Note 5, Earnings Per Share, in the Notes to Consolidated Financial Statements for further information on the Convertible Notes, including the dilutive nature of the Convertible Notes.

In May 2019, the Company entered into an amended and restated $200.0 million senior unsecured revolving credit facility with a syndicated group of banks, with JPMorgan Chase Bank, N.A. acting as Administrative Agent (the “Revolving Credit Facility”). The Revolving Credit Facility has a maturity date of May 24, 2024. As of June 30, 2023, the Company was in compliance with the provisions of our Revolving Credit Facility, there were no amounts outstanding, and the Company had available capacity under the terms of the facility of $200.0 million.

In September 2016, the Company acquired land and a building located in Stamford, Connecticut adjacent to our production facility. In connection with the acquisition, we assumed future obligations under a loan agreement, in the principal amount of $23.0 million, which loan is secured by a mortgage on the property. Pursuant to the loan agreement, the assets of WWE Real Estate, a subsidiary of the Company, represent collateral for the underlying mortgage, therefore these assets will not be available to satisfy debts and obligations due to any other creditors of the Company. As of June 30, 2023 and December 31, 2022, the amounts outstanding of the mortgage were $21.1 million and $21.3 million, respectively.

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Cash Flows from Operating Activities

Cash generated from operating activities was $89.6 million in the six months ended June 30, 2023, as compared to $150.7 million for the corresponding period in the prior year. The $61.1 million decrease in the current year period was primarily driven by working capital requirements, including the timing of collections associated with our large-scale international events.

In the current year period, we spent $7.3 million on content production activities, including WWE’s Most Wanted Treasures, A&E: Biography, and various programs for WWE Network and other digital platforms, as compared to $19.9 million in the prior year period. We anticipate spending approximately $10 million to $15 million on content production activities during the remainder of the current year. We received content production incentives of $6.2 million in the current year period, as compared to $4.0 million received in the prior year period. We anticipate receiving approximately $15 million to $20 million of content production related incentives during the remainder of the year.

Our accounts receivable represents a significant portion of our current assets and relate principally to a limited number of distributors and licensees. At June 30, 2023, our largest receivable balances from individual customers were 41% and 17% of our gross accounts receivable. Changes in the financial condition or operations of our distributors, customers or licensees may result in delayed payments or non-payments which would adversely impact our cash flows from operating activities and/or our results of operations. We believe credit risk with respect to accounts receivable is limited due to the generally high credit quality of the Company’s major customers.

Cash Flows from Investing Activities

Cash used in investing activities was $25.2 million in the six months ended June 30, 2023, as compared to $124.2 million in the prior year period. During the current year period, we purchased $87.0 million of new short-term investments and received proceeds from the maturities of these investments of $141.2 million, as compared to purchases of $188.8 million and proceeds of $132.0 million in the prior year period. Capital expenditures increased by $7.5 million in the current year period, including an additional $5.8 million related to construction activity on the Company’s global headquarter facility in Stamford, Connecticut. Capital expenditures for the remainder of the current year are estimated to range between $95 million and $115 million, with a large portion of this spend associated with the Company’s global headquarter facility, as previously discussed. In the prior year period, the Company received tax credits of $4.3 million relating to our infrastructure improvements in conjunction with qualified capital projects to support our increased content production efforts.

Cash Flows from Financing Activities

Cash provided by financing activities was $33.1 million for the six months ended June 30, 2023, as compared to cash used of $51.2 million in the prior year period. In the current year period, the Company received proceeds of $49.1 million associated with the partial unwind of the Company’s Note Hedge and Warrants (refer to Note 13, Convertible Debt, in the Notes to Consolidated Financial Statements for further information). Additionally, the Company received contributions of $17.4 million in the current year period from our controlling stockholder to reimburse the Company for the costs that have been incurred and paid by the Company in connection with and/or arising from the investigation conducted by a Special Committee of the Company’s Board of Directors. In the prior year period, the Company paid $40.0 million for stock repurchases under its approved stock repurchase program. The Company also received $13.1 million in the prior year period related to tenant improvements associated with construction of its global headquarter facility. Additionally, the Company made dividend payments of $18.7 million and $17.8 million during the six months ended June 30, 2023 and 2022, respectively.

Contractual Obligations

Other than for obligations in the ordinary course of business, there have been no significant changes to our contractual obligations that were previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021 (the “Original~~2022.

Application of Critical Accounting Policies

There have been no significant changes to our critical accounting policies that were previously disclosed in our Annual Filing”) and the previously filed Quarterly Reports on Form 10-Q for the interim periods ended March 31, 2022, September 30, 2021, and June 30, 2021, respectively. However, the Company further concluded that the Unrecorded Expenses cannot be corrected as an out-of-period adjustment in the Company’s current period unaudited interim consolidated financial information as of and for the three and six months ended June 30, 2022 included in its Quarterly Report on Form ~~10-Q~~10-K for ~~the interim period~~our fiscal year ended ~~June 30,~~December 31, 2022 because to do so would cause a material misstatement in those financial statements. Therefore, the Company referred to the guidance prescribed by SAB 108 which specifies that immaterial errors must be corrected the next time previously reported financial statements are filed. In this regard, the Company concluded that its previously reported internal control certification in Item 9A of the Original Annual Filing and Item 4 of the Original Filing was required to be amended to report the existence of certain material weaknessesor in the ~~Company’s internal controls over financial reporting as a result~~methodology used in formulating these significant judgments and estimates that affect the application of the Unrecorded Expenses and, as such, the Company further concluded that the Unrecorded Expenses were required to be immaterially revised as part of the Company’s amendment of the Original Annual Filing and the Original Filing. Accordingly, the Company has corrected the Unrecorded Expenses in the accompanying unaudited interim consolidated financial information as of March 31, 2022 and December 31, 2021 and for the three-month periods ended March 31, 2022 and 2021 and related notes hereto as an immaterial revision of this unaudited interim consolidated financial information.these policies.

Recent Accounting Pronouncements

The ~~following tables present~~information set forth under Note 2 to the ~~impact of correcting~~Consolidated Financial Statements under the ~~Unrecorded Expenses in the Company’s previously issued unaudited interim consolidated financial information:~~caption

“Recent Accounting Pronouncements”

Consolidated Balance Sheet Information
As of March 31, 2022
As of December 31, 2021
As Previously Issued
Adjustment
As Revised
As Previously Issued
Adjustment
As Revised
Accounts payable and accrued expenses
$
111,121
$
1,700
$
112,821
$
120,516
$
2,200
$
122,716
Total current liabilities
$
425,147
$
1,700
$
426,847
$
413,617
$
2,200
$
415,817
Other non-current liabilities
$
10,689
$
2,700
$
13,389
$
8,162
$
4,400
$
12,562
Total liabilities
$
839,504
$
4,400
$
843,904
$
822,807
$
6,600
$
829,407
Additional paid-in capital
$
386,562
$
15,200
$
401,762
$
409,884
$
13,000
$
422,884
Retained earnings (accumulated deficit)
$
17,841
$
(19,600)
$
(1,759)
$
(31,793)
$
(19,600)
$
(51,393)
Total stockholders' equity
$
405,844
$
(4,400)
$
401,444
$
381,260
$
(6,600)
$
374,660

Consolidated Statement of Stockholders' Equity Information
For the Three Months Ended
March 31, 2022
For the Three Months Ended
March 31, 2021
As Previously Issued
Adjustment
As Revised
As Previously Issued
Adjustment
As Revised
Additional paid-in capital, beginning of period
$
409,884
$
13,000
$
422,884
$
424,758
$
11,800
$
436,558
Retained earnings (accumulated deficit), beginning of period
$
(31,793)
$
(19,600)
$
(51,393)
$
(39,727)
$
(16,600)
$
(56,327)
Stock issuances and other, net
$
1,239
$
2,200
$
3,439
$
1,963
$
1,200
$
3,163
Additional paid-in capital, end of period
$
386,562
$
15,200
$
401,762
$
420,014
$
13,000
$
433,014
Retained earnings (accumulated deficit), beginning of period
$
17,841
$
(19,600)
$
(1,759)
$
(66,415)
$
(16,600)
$
(83,015)

is incorporated herein by reference.

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Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This Form ~~10-Q/A~~10-Q contains, and oral statements made from time to time by our representatives may contain, forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our outlook ~~for~~regarding future financial results, the impact of recent changes to management ~~changes,~~and our board of directors (the "Board"); the ~~scope, duration~~timing and ~~findings~~outcome of the ~~investigation being conducted by~~Company's media and other rights negotiations including major domestic programming licenses before their expirations through 2024; the ~~special committee of independent members of our Board of Directors;~~Company's pending business combination with UFC, our plans to remediate identified material weaknesses in our disclosure control and procedures and our internal control over financial reporting, and regulatory, investigative or enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters. ~~In addition, the~~The words ~~“may,” “will,”~~"may," "will," “could,”" “anticipate,~~” “plan,” “continue,” “project,” “intend,” “estimate,” “believe,”~~" "plan," "continue," "project," "intend," "estimate," "believe," “expect,”" “outlook,~~” “target,” “goal,” “guidance”~~" "target," "goal,'' "guidance" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These statements relate to future possible events, as well as our plans, objectives, expectations and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or the performance by us to be materially different from expected future results or performance expressed or implied by ~~such~~any forward-looking statements.

These forward-looking statements are subject to uncertainties relating to, without limitation, the ~~departure of Vince McMahon from the Company and the appointment of Stephanie McMahon and Nick Khan as co-Chief Executive Officers; the scope, duration and findings~~consummation of the ~~ongoing investigation by~~pending business combination with UFC in the ~~special committee~~expected timeline or at all; diversion of ~~independent members~~management's time and attention due to the pending business combination with UFC; the availability of sufficient cash at the close of our ~~Board~~transaction with UFC to distribute to shareholders of ~~Directors; regulatory, investigative or enforcement inquiries, subpoenas or demands arising from, related to, or~~the new public company in ~~connection~~line with ~~these matters; our ability to remediate material weaknesses~~current expectations; possible disruptions in our disclosure controls and procedures and our internal control over financial reporting; and reputational harm to the Company’s relationships with its stockholders, customers, talent and partners, which may have adverse financial and operational impacts, among other factors. The following additional factors, among others, could cause actual results to differ materially from those contained in forward-looking statements: the COVID-19 outbreak, which may continue to affect negatively world economies as well as our industry, business and results of operations; entering, maintaining and renewing major distribution and licensing agreements; a rapidly evolving and highly competitive media landscape; WWE Network; computer systems, content delivery and online operations ofand our ~~Company and~~those of our business partners; privacy norms and regulations; our need to continue to develop creative and entertaining programs and events; our need to retain and continue to recruit key performers; the possibility of a decline in the popularity of our brand of sports entertainment; ~~the resignation 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/or our inability to compete effectively, especially against competitors with greater financial resources or marketplace presence; uncertainties associated with international markets including possible disruptions and reputational risks; 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; large public events as well as travel to and from such events; our expansion into new or complementary businesses, strategic investments and/or acquisitions; our accounts receivable; the construction and move to our new leased corporate and media production headquarters; litigation and other actions, investigations or proceedings; a change in the tax laws of key jurisdictions; ~~our feature film business; a possible decline in general economic conditions~~inflationary pressures and ~~disruption in financial markets including any resulting from COVID-19;~~interest rate changes; our indebtedness including our convertible notes; our potential failure to meet market expectations for our financial performance; ~~through his beneficial ownership~~our share repurchase program; the impact of ~~a substantial majority of our Class B common stock, our~~actions by Mr. McMahon (our controlling ~~stockholder, Vincent K. McMahon~~shareholder, whose interests could ~~exercise ultimate control over our affairs, and his interests may~~ conflict with ~~the holders~~those of our Class A common ~~stock; our share repurchase program; a~~stockholders); the 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~~cause our stock ~~price;~~price to decline; and the volatility in trading prices of our Class A common stock. In ~~addition,~~addition. our dividend and share repurchases are 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~~Company's business, please refer to any documents filed, or to be filed, by the ~~“Management’s~~Company with the SEC, including, but not limited to, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections ~~of the Company’s~~in this Form 10-Q and our other SEC filings, ~~including, but not limited~~and the “Questions and Answers About the Transactions” and “Risk Factors” sections of our Form S-4.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no significant changes to our ~~annual report~~market risk factors that were previously disclosed in our Annual Report on Form ~~10-K/A and quarterly reports on Form 10-Q/A and Form 10-Q.~~10

-K for our fiscal year ended December 31, 2022.

Item 4. Controls and Procedures

~~Background~~

As described in the Explanatory Note to this Form 10-Q/A, and as previously announced on June 17, 2022, a special committee of independent members of the Company’s Board of Directors (the “Special Committee”) was formed to investigate alleged misconduct by the Company’s former Chairman and Chief Executive Officer, Vincent K. McMahon, who resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest (“Mr. McMahon”), and another executive, who is also no longer with the Company.

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The findings of the investigation identified agreements executed by Mr. McMahon which were previously unknown to the Company. On July 25, 2022, the Company announced that it had determined that certain payments that Mr. McMahon agreed to make during the period from 2006 through 2022 (including amounts paid and payable in the future totaling $14.6 million), were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. The Company subsequently identified two additional payments totaling $5.0 million, unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Special Committee investigation is substantially complete.

Disclosure Controls and Procedures

Our management, with the participation of our ~~former Chairman and~~ Chief Executive Officer and ~~our~~ Chief Financial ~~and Administrative~~ Officer, ~~previously~~have evaluated the effectiveness of our disclosure controls and procedures, as defined in ~~Rules~~ Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. ~~Our management concluded at that time that our disclosure controls and procedures were effective as of March 31, 2022.~~ As a result of the material weaknesses in our internal control over financial reporting, ~~described below,~~as previously disclosed under Part II, “Item 9A, Controls and Procedures” in our ~~current co-Chief Executive Officers and~~Annual Report on Form 10-K for the year ended December 31, 2022, our Chief Executive

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Officer and Chief Financial ~~and Administrative~~ Officer ~~have re-performed an evaluation and have~~ concluded that the Company’s disclosure controls and procedures were not effective as of ~~March 31, 2022 due to the material weaknesses in the Company’s internal control over financial reporting described below.~~June 30, 2023.

Notwithstanding the ineffective disclosure controls and procedures as a result of the identified material weaknesses, our ~~co-Chief~~Chief Executive ~~Officers~~Officer and ~~our~~ Chief Financial ~~and Administrative~~ Officer have concluded that the consolidated financial statements as ~~originally~~ issued ~~in the Original Filing and as revised~~ in this Quarterly Report on Form ~~10-Q/A~~10-Q present fairly, in all material respects, the Company’s financial position, results of operations and cash flows in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

~~Management’s Report on Internal Control Over Financial Reporting (as revised)~~

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our former Chairman and Chief Executive Officer and our Chief Financial and Administrative Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2022 based on the criteria established in ~~Internal Control — Integrated Framework~~ ~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO framework”).~~

Previously, based upon that evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2022. However, as discussed above, based upon the evaluation of these criteria and considering the material weaknesses described below, management, with the participation of our co-Chief Executive Officers and our Chief Financial and Administrative Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2021. Accordingly, the Company is filing this Form 10-Q/A to amend management’s assessment of the Company’s internal control over financial reporting and its disclosure controls and procedures to indicate that they were not effective as of March 31, 2022.

The material weaknesses contributed to the errors in the consolidated financial statements as originally filed the quarterly periods ended March 31, 2022 and 2021, for which we have concluded such errors are not material to those previously issued consolidated

~~Table of Contents~~

financial statements. The errors resulted from the Company’s untimely identification, evaluation and recognition of the Unrecorded Expenses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

~~Based on our evaluation, we have concluded that we have material weaknesses in each of the following areas:~~

~~Control Environment~~

We did not maintain an effective control environment based on the criteria established in the COSO framework which resulted in deficiencies in principles associated with the control environment. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) our commitment to integrity and ethical values; and (ii) establishing structures, reporting lines, and appropriate authorities and responsibilities.

We did not maintain an effective control environment to enable the identification and mitigation of risks of accounting errors. The following were contributing factors to the material weaknesses in the control environment:

The tone from executive management was insufficient to create the proper environment for effective internal control over financial reporting and to ensure that: (i) the expectations of the board of directors concerning the importance of integrity and ethical values was demonstrated by current and former executive management; (ii) there was accountability for the performance of internal control over financial reporting responsibilities; and (iii) personnel with key positions had the appropriate training to carry out their responsibilities.

Our processes and procedures that guide accountable individuals in applying internal control over financial reporting were not adequate in preventing or detecting omissions in contractual arrangements and agreements that require accounting evaluation.

~~The control environment material weaknesses contributed to other material weaknesses within our system of internal controls over financial reporting in the following COSO components.~~

~~Risk Assessment~~

We did not maintain effective risk assessment based on the criteria established in the COSO framework which resulted in deficiencies in principles associated with risk assessment. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: our identification and assessment of risks at the entity level.

~~Control Activities~~

We did not maintain effective control activities based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control activities of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: selecting and developing control activities that contribute to the mitigation of risks and support achievement of objectives.

~~The following were contributing factors to the material weaknesses in control activities:~~

We did not adequately consider the specific characteristics of our organization that could impact our accounting for certain transactions, such as a controlling stockholder in the positions of Chairman of the Board and Chief Executive Officer, when selecting and developing control activities to respond to risks.

~~We did not have robust control activities to identify and report agreements to the accounting team for evaluation of accounting and reporting requirements.~~

~~Monitoring~~

We did not maintain effective monitoring activities based on the criteria established in the COSO framework which resulted in deficiencies in principles associated with the monitoring component. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: developing and performing an ongoing evaluation to ascertain whether the components of internal controls are present and functioning.

~~The following was a contributing factor to the material weaknesses in monitoring activities:~~

~~Management did not build ongoing evaluations into the business processes and adjust for changing conditions.~~

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Remediation Plan and Status

~~As of March 31, 2022,~~Although the material weaknesses ~~described above~~previously disclosed have not yet been fully ~~remediated.~~

~~Our~~remediated as of June 30, 2023, our management is committed to remediating identified control deficiencies (including both those that rise to the level of a material weakness and those that do not), fostering continuous improvement in our internal controls and enhancing our overall internal controls environment. Our management believes that these ~~remediation actions, along with additional~~ actions, when fully implemented, will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. Our remediation efforts are ongoing and additional ~~remediation~~ initiatives may be necessary.

~~The following remediation activities highlight our commitment to remediating our identified material weaknesses:~~

~~Control Environment~~

We have undertaken steps to address material weaknesses in the control environment. The control environment, which is the responsibility of management, sets the tone of the organization, influences the control consciousness of its people, and is the foundation for all other components of internal control over financial reporting. Our Audit Committee and executive management team have emphasized and continue to emphasize the importance of internal control over financial reporting, as well as the integrity of our financial statements.

Our management has taken and will continue to take steps to ensure that identified control deficiencies will be remediated through the implementation of internal control policies and procedures with proper oversight. We have implemented certain changes and plan to implement additional changes including:

The Company initiated certain personnel changes, including the promotion of new co-CEOs who have the appropriate experience and commitment to integrity and ethical values, to improve the tone at the top, communication, and compliance within the Company.

The Company’s management will provide training to employees with internal control responsibilities, particularly the new co-CEOs, to ensure adequate knowledge of, and adherence to, our processes supporting internal controls over financial reporting, including increased education regarding the Company’s disclosure and other regulatory requirements.

The Company's management will further promote and communicate the importance of its core values, including our commitment to integrity and ethical values, through Company-wide, consistent messaging in employee and leadership meetings and on the Company’s intranet site.

The Special Committee of the Board of Directors has engaged a third-party consultant with expertise in culture assessment and change to partner with management to conducting a comprehensive culture review and recommending human capital initiatives and best practices.

The Company will distribute an updated employee handbook and implement an annual Company-wide Code of Conduct training to ensure that all employees, particularly those with internal control responsibilities, understand the Company’s standards, rules and expectations to ensure compliance, the importance of communicating matters to accounting, and the availability and use of the Company’s whistleblower program.

~~The Company will reconsider delegation of authority by the Board of Directors and revise certain legal and other processes, including code of conduct and contract management.~~

~~Risk Assessment~~

We plan to review our existing overall Company-wide risk assessment process to ensure that it is robust and frequent enough for the Company’s dynamic business and closely-held publicly traded organization, including the identification of risks, the level of detail in our risk assessment, and the clarity of the linkage between risks and internal controls associated with the material weaknesses. The results of this effort are expected to enable us to effectively identify, develop, evolve and implement controls and procedures to address risks.

~~Table of Contents~~

~~Control Activities~~

Our management has taken and will continue to take steps to ensure that identified control deficiencies will be remediated through the implementation of internal control policies and procedures with proper oversight. We are in the process of strengthening our control activities, including:

The Company's management is designing control activities to enhance the process for the identification and reporting of agreements to the accounting department. In particular, the quarterly certification statements reviewed and attested to by senior executives will include appropriate representation that all agreements have been properly reported to the accounting department.

The Company's management will provide education and reinforce requirements to executives with responsibilities for internal controls, including increased education regarding the Company’s disclosure and other regulatory requirements.

~~Monitoring~~

Our management has taken and will continue to take steps to ensure that identified control deficiencies will be remediated through the implementation of internal control policies and procedures with proper oversight. We are in the process of strengthening our monitoring, including:

In connection with the review our existing overall Company-wide risk assessment process, we plan to revisit our entity-level controls to ensure that they adequately address focal points of the COSO framework as they relate to our business and organization.

Management will develop a monitoring program to periodically evaluate and assess whether those responsible for controls are conducting their activities in accordance with their design, such that there is contemporaneous evidence that the controls are present and functioning.

Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort. We will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

While we believe the steps planned will remediate the effectiveness of our internal control over financial reporting, we have not completed all of our planned remediation ~~efforts identified herein.~~efforts. Accordingly, as we continue to monitor the effectiveness of our internal control over financial reporting in the areas affected by the material weaknesses ~~described above,~~previously disclosed, we have and will continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures and employing ~~any~~ additional tools and resources, ~~deemed necessary,~~ to ensure that our consolidated financial statements are fairly stated in all material respects.

Changes in Internal Control ~~over~~Over Financial Reporting

~~The~~Other than measures taken in response to the material weaknesses identified above were discovered after March 31, 2022, and all of these material weaknesses existed as of March 31, 2022. The remediation activities identified above and any material changes to our internal control over financial reporting also occurred after March 31, 2022. Therefore,previously disclosed, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~March 31, 2022~~June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As previously disclosed on June 17, 2022, a Special Committee of the Board of Directors was formed on June 15, 2022 to investigate allegations of misconduct by Vince McMahon. As previously disclosed, the Special Committee investigation was completed during the fourth quarter of 2022. However, related government investigations remain ongoing.

On July 17, 2023, federal law enforcement agents executed a search warrant and served a federal grand jury subpoena on Mr. McMahon. No charges have been brought in these investigations.

The Company has received voluntary and compulsory legal demands for documents, including from federal law enforcement and regulatory agencies, concerning the investigation and related subject matters.

Fully consistent with prior expectations, the Company and Endeavor expect their transaction to be closed in the second half of 2023.

Additional information with respect to this item may be found in Note 18, Commitments and Contingencies, to the Consolidated Financial Statements.

Item 1A. Risk Factors

Except as described in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, we do not believe there have been any changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

PAConversion and Exchange of Certain Convertible Notes. During the second quarter of 2023, we settled conversion notices submitted by holders of Convertible Notes (as defined above in Note 13 to the Consolidated Financial Statements, ~~RT II. OTHER INFORMATION~~Convertible Debt) by issuing to such converting holders shares of our Class A common stock as stated in the below table, at a rate of 40.1405 shares of our Class A common stock for each $1,000 principal amount of Convertible Notes converted. Such shares were issued in reliance upon the exemption from registration under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

It~~em 1A.~~ ~~Risk Factors~~

Other than the following risk factors, we do not believe there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2021.



Settlement Date	Principal Converted ‎($ in thousands)		Shares Issued
April 4, 2023	$	30	1,204
April 6, 2023		1	40
April 14, 2023		29	1,164
April 18, 2023		1,250	50,175
June 21, 2023		19,738	792,293
June 21, 2023		4,000	160,562
June 23, 2023		10,039	402,970
June 29, 2023		4,700	188,660
Total	$	39,787	1,597,068

~~The Company’s recent Special Committee investigation could result in a material adverse effect on our financial performance.~~

On ~~June 17, 2022,~~May 18, 2023, we settled the exchange of $171.0 million aggregate principal amount of Convertible Notes by issuing to such exchanging holders 6,862,086 shares of our Class A common stock, at a rate of 40.1405 shares of our Class A common stock for each $1,000 principal amount of Convertible Notes exchanged. Holders of the exchanged Convertible Notes also received $3.9 million cash in the aggregate for their exchanged Convertible Notes. Such shares were issued in reliance upon the exemption under Section 4(a)(2) of the Securities Act. Each of the recipients of the shares in the exchange was an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that is also a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act.

Repurchases of Common Stock. The following table presents information with respect to purchases of common stock of the Company ~~and its Board of Directors announced that a special committee of independent members of~~made during the three months ended June 30, 2023 pursuant to the Company’s authorized share repurchase program:



Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Dollar Value that May Yet Be Purchased Under the Program ⁽¹⁾
April 1, 2023 to April 30, 2023	—		—	—		210,923,524
May 1, 2023 to May 31, 2023	—		—	—		210,923,524
June 1, 2023 to June 30, 2023	—		—	—		210,923,524
Total	—	$	—	—	$	210,923,524

(1)In February 2019, the Company’s Board of Directors ~~(the “Special Committee”) was formed~~authorized a stock repurchase program of up to ~~investigate alleged misconduct by the Company’s former Chairman~~$500.0 million of our common stock. Repurchases may be made from time to time at management’s discretion subject to certain pre-approved parameters and ~~Chief Executive Officer, Vincent K. McMahon.~~in accordance with all applicable securities and other laws and regulations. The ~~Special Committee investigation is substantially complete. Mr. McMahon resigned from all positions held with~~stock repurchase program does not obligate the Company ~~on July 22, 2022 but remains a stockholder with a controlling interest. On July 25, 2022, based on the findings~~to repurchase any minimum dollar amount or number of ~~the Special Committee investigation, the Company announced that it had determined that certain payments that Mr. McMahon agreed to make during the period from 2006 through 2022 (including amounts paid~~shares, has no pre-established termination date and ~~payable in the future totaling $14.6 million) were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements.~~may be modified, suspended or discontinued at any time. The Company ~~subsequently identified two additional payments totaling $5.0 million, unrelated to~~suspended the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). All payments underlying the Unrecorded Expenses were or will be paid by Mr. McMahon personally. The Company has determined that, while the amount of Unrecorded Expenses was not material in any individual period in which the Unrecorded Expenses arose, the aggregate amount of Unrecorded Expenses would be material if recorded entirely instock repurchase program during the second quarter of ~~2022. Accordingly, the Company is revising its previously issued financial statements to record the Unrecorded Expenses in the applicable periods for the years ended December 31, 2019, 2020~~2022 and, 2021, as well as the first quarter of 2021 and 2022. In light of the Unrecorded Expenses and related facts, the Company has concluded that its internal control over financial reporting was not effective as a result of one or more material weaknesses. The Company has also received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters. Professional costs resulting from the Special Committee’s investigation have been significant and are expected to continue to be significant as the investigation continues and/or if litigation costs relating to these regulatory, investigative and enforcement inquiries, subpoenas and demands grow. Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our business partners could occur as a result of the ~~investigation. In addition, as a result~~Transaction Agreement, currently has no plans to resume the program. Since the program’s inception, the Company has repurchased approximately 5.3 million shares of common stock in the open market for an aggregate amount of $289.1 million. All repurchased shares were subsequently retired.

Item 5. Other Information

On July 21, 2023, Mr. McMahon went on medical leave after undergoing major spinal surgery. Mr. McMahon will remain on medical leave until further notice but will remain Executive Chairman of the investigation, certain operational changes including without limitation personnel changes have occurred and may continue to occur in the future. Any or all of these impacts based on the findings of the investigation and related matters and the surrounding circumstances could exacerbate the other risks described herein and directly or indirectly have a material adverse effect on our operations and/or financial performance.Company.

~~The resignation of Vincent K. McMahon could adversely affect our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results.~~

Until he resigned from all positions held with the Company on July 22, 2022, in addition to serving as Chairman of our Board of Directors and Chief Executive Officer, Mr. McMahon led the creative team that develops the storylines and the characters for our programming (including our television, WWE Network and other programming) and live events. On July 22, 2022, the Board appointed Stephanie McMahon, at that time Chief Brand Officer, interim Chief Executive Officer, interim Chairwoman and a director of the Company, and Nick Khan, at that time President, Chief Revenue Officer and a director of the Company, to serve as the Company’s co-Chief Executive Officers. The Board has also appointed Stephanie McMahon to serve as the Company’s Chairwoman. Furthermore, in the wake of Mr. McMahon’s departure, our creative effort will be led by Paul Levesque, the Company’s Executive Vice President, Talent Relations and Creative and Ms. McMahon’s husband, who has decades of experience in our Company and has been an important player in all aspects of our creative process, including television, talent and live events. Although Mr. Levesque has extensive practical experience with many of our revenue streams and, with Ms. McMahon, has been critically involved in our business transformation over the past several years as well as our continuing brand development, these collective changes at the top of our organization are extensive and recent, and it is therefore possible that the loss of services of Mr. McMahon could have a material adverse effect on our ability to create popular characters and creative storylines or could otherwise adversely affect our operations and/or financial performance.

~~Failure to remediate a material weakness in internal accounting controls could result in material misstatements in our financial statements.~~

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on, and our independent registered public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Annually, we perform activities that include reviewing, documenting and testing our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal

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control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price.

Subsequent to the Original Filing, management of the Company evaluated immaterial accounting errors related to certain payments that Mr. McMahon, the Company’s former Chairman and Chief Executive Officer, who resigned from all positions held with the Company on July 22, 2022 but remains a stockholder with a controlling interest, agreed to make during the period from 2006 through 2022. The Company determined that these payments (including amounts paid and payable in the future totaling $14.6 million) were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. The Company subsequently identified two additional payments totaling $5.0 million, unrelated to the alleged misconduct by Mr. McMahon that led to the Special Committee investigation, that Mr. McMahon made in 2007 and 2009 that were not appropriately recorded as expenses in the Company’s Consolidated Financial Statements. Together, these unrecorded expenses total $19.6 million (the “Unrecorded Expenses”). The Company has evaluated the Unrecorded Expenses and has determined that such amounts should have been recorded as expenses in each of the periods in which they became probable and estimable.

As a result of the accounting errors, the Company has re-evaluated the effectiveness of the Company’s internal control over financial reporting and identified material weaknesses in the Company’s internal control over financial reporting as of December 31, 2021 and March 31, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. For further discussion regarding the accounting error and the correction of such error to the Company’s previously issued Consolidated Financial Statements, see Note 22, ~~Revision of Previously Issued Consolidated Financial Statements, to the Consolidated Financial Statements of the Company included in Part II – Item 8 of the Company’s Form 10-K/A.~~

Our management may be unable to conclude in future periods that our disclosure controls and procedures are effective due to the effects of various factors, which may, in part, include unremediated material weaknesses in internal controls over financial reporting. For further discussion of the material weaknesses, see Item 4, ~~Controls and Procedures~~. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in those reports is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management is committed to maintaining a strong internal control environment and believes its remediation efforts will represent an improvement in existing controls. Management anticipates that the new controls, as implemented and when tested for a sufficient period of time, will remediate the material weaknesses. We may not be successful in promptly remediating the material weaknesses identified by management, or be able to identify and remediate additional control deficiencies, including material weaknesses, in the future. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

‎

~~Table of Contents~~

Item 6. Exhibits

(a) Exhibits:



Exhibit ‎No.	Description of Exhibit
10.1B10.1	~~Second Amendment to Amended and Restated Employment~~Form of Sale Bonus Letter Agreement ~~with Vincent K. McMahon, effective as of March 9, 2022 (incorporated by reference to Exhibit 10.1B to the Company’s Quarterly Report on Form 10-Q~~ for ~~the quarter ended March 31, 2022, filed May 5, 2022)~~certain executive officers (filed herewith).
10.20A*10.6A	Amendment No. 1 to the Amended and Restated ~~Employment~~Revolving Credit Facility, dated May 9, 2023, between World Wrestling Entertainment, Inc., certain subsidiaries of World Wrestling Entertainment, Inc. party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders, issuing banks and agents party thereto (filed herewith).
10.15D	Fourth Lease Amendment Agreement, ~~with Nick Khan, effective as of March 9, 2022 (incorporated by reference to Exhibit 10.20A to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed May 5, 2022)~~dated June 19, 2023, between World Wrestling Entertainment, Inc. and Stamford Washington Office LLC (filed herewith).
31.1	Certification by ~~Stephanie McMahon and~~ Nick Khan pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification by Frank A. Riddick III pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification by ~~Stephanie McMahon,~~ Nick Khan and Frank A. Riddick III pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.


		World Wrestling Entertainment, Inc. (Registrant)

Dated:	August ~~15, 2022~~2, 2023	By:	/s/ FRANK A. RIDDICK III
			Frank A. Riddick III
			President & Chief Financial ~~& Administrative~~ Officer
			(principal financial officer and authorized
			signatory)



		By:	/s/ KAREN MULLANE
			Karen Mullane
			Chief Accounting Officer
			(principal accounting officer and authorized
			signatory)

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	Three Months Ended March 31, 2022
									Accumulated		Retained
	Common Stock						Additional		Other		Earnings
	Class A			Class B			Paid - in		Comprehensive		(Accumulated
	Shares	Amount		Shares	Amount		Capital		Income		Deficit)		Total
Balance, December 31, 2021	43,733	$	438	31,099	$	311	$	422,884	$	2,420	$	(51,393)	$	374,660
Cumulative effect of adopting ASU 2020-06	—		—	—		—		(26,383)		—		17,609		(8,774)
Net income	—		—	—		—		—		—		66,041		66,041
Other comprehensive loss	—		—	—		—		—		(1,723)		—		(1,723)
Repurchases and retirements of common stock	(525)		(5)	—		—		(4,916)		—		(25,085)		(30,006)
Stock issuances and other, net	34		—	—		—		3,439		—		—		3,439
Taxes paid related to net settlement upon vesting of equity awards	—		—	—		—		(32)		—		—		(32)
Cash dividends declared	—		—	—		—		—		—		(8,931)		(8,931)
Stock-based compensation	—		—	—		—		6,770		—		—		6,770
Balance, March 31, 2022	43,242	$	433	31,099	$	311	$	401,762	$	697	$	(1,759)	$	401,444



	December 31, 2021		ASU 2020-06		January 1, 2022
	As Reported		Adoption Impact		As Adjusted
Consolidated Balance Sheet line item:
Deferred income tax assets, net	$	13,100	$	3,294	$	16,394
Convertible debt (1)	$	201,093	$	12,068	$	213,161
Additional paid-in-capital (conversion feature, net of tax)	$	422,884	$	(26,383)	$	396,501
Accumulated deficit (cumulative effect adjustment, net of tax)	$	(51,393)	$	17,609	$	(33,784)



	Units	Weighted- Average Grant-Date Fair Value
Unvested at January 1, 2022	300,003	$	55.03
Granted	149,137	$	51.77
Vested	(1,474)	$	44.97
Forfeited	(15,503)	$	52.51
Dividend equivalents	844	$	53.99
Unvested at March 31, 2022	433,007	$	54.00



	March 31, 2022				December 31, 2021
	Fair Value		Carrying Value (1)		Fair Value		Carrying Value (1)
Convertible senior notes	$	207,739	$	215,000	$	210,076	$	203,032



Consolidated Balance Sheet Information
	As of March 31, 2022						As of December 31, 2021
	As Previously Issued		Adjustment		As Revised		As Previously Issued		Adjustment		As Revised
Accounts payable and accrued expenses	$	111,121	$	1,700	$	112,821	$	120,516	$	2,200	$	122,716
Total current liabilities	$	425,147	$	1,700	$	426,847	$	413,617	$	2,200	$	415,817
Other non-current liabilities	$	10,689	$	2,700	$	13,389	$	8,162	$	4,400	$	12,562
Total liabilities	$	839,504	$	4,400	$	843,904	$	822,807	$	6,600	$	829,407
Additional paid-in capital	$	386,562	$	15,200	$	401,762	$	409,884	$	13,000	$	422,884
Retained earnings (accumulated deficit)	$	17,841	$	(19,600)	$	(1,759)	$	(31,793)	$	(19,600)	$	(51,393)
Total stockholders' equity	$	405,844	$	(4,400)	$	401,444	$	381,260	$	(6,600)	$	374,660



Consolidated Statement of Stockholders' Equity Information
	For the Three Months Ended March 31, 2022						For the Three Months Ended March 31, 2021
	As Previously Issued		Adjustment		As Revised		As Previously Issued		Adjustment		As Revised
Additional paid-in capital, beginning of period	$	409,884	$	13,000	$	422,884	$	424,758	$	11,800	$	436,558
Retained earnings (accumulated deficit), beginning of period	$	(31,793)	$	(19,600)	$	(51,393)	$	(39,727)	$	(16,600)	$	(56,327)
Stock issuances and other, net	$	1,239	$	2,200	$	3,439	$	1,963	$	1,200	$	3,163
Additional paid-in capital, end of period	$	386,562	$	15,200	$	401,762	$	420,014	$	13,000	$	433,014
Retained earnings (accumulated deficit), beginning of period	$	17,841	$	(19,600)	$	(1,759)	$	(66,415)	$	(16,600)	$	(83,015)