Corporate and Other
Corporate and Other expenses increased $8.4 million to $42.0 million from the prior year quarter. As defined, these expenses include corporate overhead and certain expenses related to sales, marketing, and talent development costs, which have not been allocated to specific segments. The increase in Corporate and Other expense during the quarter was driven by a $2.5 million increase in professional fees, a $2.3 million increase in salary and benefit costs, and increased marketing expenses to support key content and brand initiatives, including the expansion of the Company's international infrastructure, talent development and brand marketing.
Operating Income Before Depreciation and Amortization (OIBDA)
OIBDA results declined to a loss of $14.6 million from income of $14.9 million in the prior year quarter. The approximate $30 million decline was driven by the ramp up of WWE Network, investment across WWE to support key content and brand initiatives, and profit declines in several other WWE businesses. The ramp up of WWE Network resulted in a $15.5 million reduction in OIBDA as the growth in subscribers and subscription revenue was more than offset by the loss of pay-per-view revenue and increased programming, customer service and marketing costs. Investment in WWE's content and brand initiatives resulted in an $8.4 million increase in Corporate and Other expenses (as described above). In addition, the overall decrease in OIBDA reflected lower revenue from the Company's video game licensing, webcast pay-per-view events and live events. Based on the increased investment and changes in business mix during the quarter, the Company's OIBDA margin was (9)% in the current year quarter as compared to 10% in the prior year quarter.
Depreciation and Amortization
Depreciation and amortization expense totaled $7.9 million for the current year quarter as compared to $6.1 million in the prior year quarter. Depreciation and amortization expense in both the current and prior year periods derived from investment in assets to support the Company's content initiatives, including efforts to launch WWE Network. The current year quarter includes an adjustment of $1.6 million to adjust the carrying value of the old Corporate Aircraft to our estimate of its fair value, in conjunction with the anticipated sale of this asset.
Investment Income, Interest and Other Expense, Net
Investment income, interest and other expense, net yielded expense of $0.3 million compared to $0.4 million in the prior year quarter.
Effective tax rate
In the current year quarter, the effective tax rate was 36% as compared to 38% in the prior year quarter. The current year quarter effective tax rate approximates the Company's expected effective tax rate. Due to the losses incurred during the current quarter, the Company recorded an associated tax benefit, which it believes it will be able to utilize in future periods.
Summary Results for the Six Months Ended June 30, 2014
Total revenues for the six months ended June 30, 2014 were $281.9 million as compared to $276.3 million in the prior year period. Operating loss for the current year period was $34.7 million versus income $14.9 million in the prior year period. Net loss was $22.5 million, or $0.30 per share, as compared to net income of $8.2 million, or $0.11 per share, in the prior year period. OIBDA was a negative $21.8 million for the current six month period as compared to positive $26.2 million in the prior year period.
Read more at http://www.wrestlinginc.com/wi/news/2014/0731/579544/wwe-reports-2014-second-quarter-results/#giUuESAeQdBZTMRw.99
No comments:
Post a Comment