Raises Full Year 2018 Guidance

First Quarter 2018 Highlights

• Revenues reached $187.7 million which was on-par with Q1 2017 (increasing 5% on a comparable year-over basis excluding the impact of ASC Topic 606 in Q1 2018)¹
• Operating income was $21.8 million ($29.0 million on a comparable basis) as compared to $4.0 million in the prior year quarter
• Adjusted OIBDA² increased 40% to $35.2 million (increasing 68% to $42.4 million on a comparable basis)
• WWE Network average paid subscribers³ increased 5% to 1.56 million paid subscribers consistent with the Company’s guidance
• Digital video views increased 56% to 6.7 billion and hours consumed increased 69% to 243 million across digital and social media platforms⁴

Selected WrestleMania Highlights

• WrestleMania (April 8 2018) broke the record for the Mercedes-Benz Superdome’s highest grossing entertainment event at $14.1 million attracting 78 133 fans
• WrestleMania hit a record 2.12 million global households on WWE Network alone making it the most-watched WrestleMania in history
• WWE Network subscribers viewed 25.2 million hours during WrestleMania week or 14 hours per subscriber during the week. This compares to 22.5 million hours last year a 12% year-over-year increase
• During WrestleMania week 13.9 million hours were consumed on digital and social media platforms up 27% from the prior year; April 9 was WWE’s most viewed day ever on YouTube with more than 50 million views

STAMFORD Conn. May 3 2018 - WWE (NYSE: WWE) today announced financial results for its first quarter ended March 31 2018.

“We’re pleased with our continued success in creating and monetizing our content as evidenced by another record-breaking WrestleMania which set new highs for network subscribers and viewership ” said Vince McMahon WWE Chairman and Chief Executive Officer. “We will continue to focus on broadening our global audience across multiple platforms providing the basis for significant growth.”

George Barrios Co-President added “During the first quarter higher content rights fees increased sales of advertising and sponsorships and the continued growth of WWE Network supported strong 40% growth in Adjusted OIBDA. Based on our momentum and ability to capitalize on global opportunities we are raising our target for 2018 Adjusted OIBDA to at least $150 million which would be an all-time record exceeding our previous guidance of at least $145 million.⁵

First-Quarter Consolidated Results

Revenues of $187.7 million were essentially on-par with the first quarter 2017. Revenues in the first quarter 2018 were reduced by $10.3 million as a result of adopting a new FASB standard for revenue recognition ASC Topic 606. On a comparable year-over-year basis (i.e. if the Company had maintained the prior year approach) revenue increased 5% driven by increased revenue from the Media segment. See Basis of Presentation below and Financial Results – Excluding the Impact of Adopting ASC Topic 606 on page 15 for additional information.

Operating Income increased to $21.8 million ($29.0 million on a comparable basis) as compared to $4.0 million in the prior year quarter reflecting increased profits from the Media segment and the impact of $7.7 million in certain non-recurring expenses in the first quarter 2017. The Company’s Operating income margin was 12% as compared to 2% in the prior year quarter.

Adjusted OIBDA increased 40% to $35.2 million as the increased monetization of content as reflected in the Media segment more than offset the impact of adopting ASC Topic 606. On a comparable basis excluding the impact of ASC Topic 606 Adjusted OIBDA would have been $42.4 million representing a 68% increase. The Company’s Adjusted OIBDA margin increased to 19% (or 21% on a comparable basis) from 13% in the prior year quarter.

Net Income increased to $14.8 million or $0.18 per diluted share as compared to $0.9 million or $0.01 per diluted share in the prior year quarter.

Cash flows generated by operating activities of $2.6 million were essentially unchanged from the prior year quarter as improved operating performance was offset by the unfavorable timing of working capital. Free Cash Flow demonstrated a $1.8 million use of cash which was also comparable to the prior year quarter.⁶

Cash cash equivalents and short-term investments were $285 million as of March 31 2018 and the Company estimates debt capacity under its revolving line of credit of approximately $100 million.

Effective Tax Rate declined to 26% from 36% in the prior year quarter primarily driven by the reduction of the federal corporate income tax rate as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) which reduced the corporate rate from 35% to 21% effective January 1 2018.

Basis of Presentation

Effective with the communication of first quarter 2018 results (herein) the Company has begun to report its financial results using three reportable segments: Media Live Events and Consumer Products as well as to allocate certain costs that were previously included in “Corporate & Other” to its revised segments.⁷ In addition the Company has changed its primary measure of performance from OIBDA to Adjusted OIBDA and modified its definition of Adjusted OIBDA to exclude stock-based compensation expense a non-cash expense that may vary from period to period with limited correlation to underlying operating performance in the period. To facilitate evaluation of the Company’s performance under its revised approach the Company has made schedules available that provide a perspective of historical results over the 2015-2017 period as if these results had been reported under the revised structure and using the revised measure of profit (see www.corporate.wwe.com/investors).

Effective January 1 2018 the Company adopted a new FASB standard for revenue recognition (ASC Topic 606). Adoption of this standard reduced revenue in the quarter by $10.3 million and reduced Operating income and Adjusted OIBDA by $7.2 million. See Financial Results – Excluding the Impact of Adopting ASC Topic 606 on page 15 of this release.

For the first quarter 2017 reported Operating income reflected several non-recurring items that impact comparability on a year-over-year basis including $5.6 million in expenses primarily related to certain legal matters and other contractual obligations and $2.1 million in film impairment charges.  These items have been excluded from 2017 Adjusted OIBDA. For the first quarter 2018 there were no such items that impacted year-over-year comparability.

A reconciliation of Q1 2018 Adjusted OIBDA to Operating income (GAAP) can be found in the supplemental schedules on pages 13-14 of this release.

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