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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 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, 2024 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: 001-40373

 

 

 

ENDEAVOR GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

83-3340169

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

9601 Wilshire Boulevard, 3rd Floor

Beverly Hills, CA 90210

(Address of principal executive offices) (Zip Code)

 

(310) 285-9000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

 

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 $0.00001 per share

EDR

The 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 (§232.405 of this chapter) 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, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

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

As of April 30, 2024, there were 302,461,128 shares of the registrant’s Class A common stock outstanding, 165,059,586 shares of the registrant’s Class X common stock outstanding and 225,347,636 shares of the registrant’s Class Y common stock outstanding.

 

 

 


TABLE OF CONTENTS

 

Part I – FINANCIAL INFORMATION

 

Item 1. Financial Statements (unaudited)

4

Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

4

Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023

5

Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2024 and 2023

6

Consolidated Statements of Redeemable Interests and Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023

8

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023

9

Notes to Consolidated Financial Statements

10

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

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk

36

Item 4. Controls and Procedures

36

Part II – OTHER INFORMATION

 

Item 1. Legal Proceedings

37

Item 1A. Risk Factors

37

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

39

Item 5. Other Information

39

Item 6. Exhibits

40

 

 


FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the "Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of present and historical facts contained in this Quarterly Report, including without limitation, statements regarding the anticipated timing, benefits and costs associated with the Merger Agreement and Merger-Related Transactions (as defined below), our expectations surrounding the Merger Agreement and Merger-Related Transactions and its ability to maximize shareholder value, our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, future events or expected performance, are forward-looking statements.

Without limiting the foregoing, you can generally identify forward-looking statements by the use of forward-looking terminology, including the terms "aim," "anticipate," "believe," "could," "mission," "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "predict," "potential," "contemplate," or, in each case, their negative, or other variations or comparable terminology and expressions. The forward-looking statements in this Quarterly Report are only predictions and are based on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including, but not limited to:

risks related to the Merger Agreement and Merger-Related Transactions;
changes in public and consumer tastes and preferences and industry trends;
impacts from changes in discretionary and corporate spending on entertainment and sports events due to factors beyond our control, such as adverse economic conditions, on our operations;
our ability to adapt to or manage new content distribution platforms or changes in consumer behavior resulting from new technologies;
our reliance on our professional reputation and brand name;
our dependence on the relationships of our management, agents, and other key personnel with clients across many content categories;
our ability to identify, recruit, and retain qualified and experienced agents and managers;
our ability to identify, sign, and retain clients;
our ability to avoid or manage conflicts of interest arising from our client and business relationships;
the loss or diminished performance of members of our executive management and other key employees;
our dependence on key relationships with television and cable networks, satellite providers, digital streaming partners, corporate sponsors, and other distribution partners;
our ability to effectively manage the integration of and recognize economic benefits from businesses acquired, our operations at our current size, and any future growth;
the conduct of our operations through joint ventures and other investments with third parties;
immigration restrictions and related factors;
failure to protect our IT Systems and Confidential Information against breakdowns, security breaches, and other cybersecurity risks;
the unauthorized disclosure of sensitive or confidential client or customer information;
our ability to protect our trademarks and other intellectual property rights, including our brand image and reputation, and the possibility that others may allege that we infringe upon their intellectual property rights;
risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to both domestic and international markets;
fluctuations in foreign currency exchange rates;
litigation and other proceedings to the extent uninsured or underinsured;
our ability to comply with the U.S. and foreign governmental regulations to which we are subject;
our compliance with certain franchise and licensing requirements of unions and guilds and dependence on unionized labor, which exposes us to risks of work stoppages or labor disturbances;
our ability to obtain additional financing;
risks related to our sports betting businesses and applicable regulatory requirements;
risks related to successful integration of the businesses of WWE and UFC;
our control by Messrs. Emanuel and Whitesell, the Executive Holdcos, and the Silver Lake Equityholders;
risk related to our organization and structure;

1


conflicts of interests that could result due to the amendments to the Endeavor Operating Company LLC Agreement;
our substantial indebtedness;
risks related to tax matters;
risks related to our Class A common stock;
risks related to the TKO Transactions;
risks related to our paying quarterly cash dividends, including pursuant to the Merger Agreement; and
other important factors that could cause actual results, performance or achievements to differ materially from those described in Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("2023 Annual Report"), as updated by Part II, Item 1A. "Risk Factors" in this Quarterly Report, and Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report and in our subsequent filings with the Securities and Exchange Commission (the "SEC").

These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

You should read this Quarterly Report and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

 

Available Information and Website Disclosure

We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.

You also can find more information about us online at our investor relations website located at www.investor.endeavorco.com. Filings we make with the SEC and any amendments to those reports are available free of charge on our website as soon as reasonably practicable after we electronically file such material with the SEC. The information posted on or accessible through our website is not incorporated into this Quarterly Report.

Investors and others should note that we announce material financial and operational information to our investors using press releases, SEC filings and public conference calls and webcasts, and by postings on our investor relations site at investor.endeavorco.com. We may also use our website as a distribution channel of material Company information. In addition, you may automatically receive email alerts and other information about Endeavor when you enroll your email address by visiting the “Investor Email Alerts” option under the Resources tab on investor.endeavorco.com.

DEFINITIONS

As used in this Quarterly Report, unless we state otherwise or the context otherwise requires:

"we," "us," "our," "Endeavor," the "Company," and similar references refer (a) after giving effect to the reorganization transactions, to Endeavor Group Holdings and its consolidated subsidiaries, and (b) prior to giving effect to the reorganization transactions, to Endeavor Operating Company and its consolidated subsidiaries.
"Endeavor Group Holdings" refers to Endeavor Group Holdings, Inc. ("EGH").
"Endeavor Manager" refers to Endeavor Manager, LLC, a Delaware limited liability company and a direct subsidiary of Endeavor Group Holdings following the reorganization transactions.
"Endeavor Manager Units" refers to the common interest units in Endeavor Manager.
"Endeavor Operating Company" refers to Endeavor Operating Company, LLC, a Delaware limited liability company and a direct subsidiary of Endeavor Manager’s and indirect subsidiary of ours following the reorganization transactions ("EOC").
"Endeavor Operating Company Units" refers to all of the existing equity interests in Endeavor Operating Company (other than the Endeavor Profits Units) that were reclassified into Endeavor Operating Company’s non-voting common interest units upon the consummation of the reorganization transactions.
"Endeavor Phantom Units" refers to the phantom units outstanding, which, subject to certain conditions and limitations, entitle the holder to cash equal to the value of a number of Endeavor Manager Units, Endeavor Operating Company Units, or Endeavor Profits Units, or of equity settled to the equivalent number of Endeavor Manager Units, Endeavor Operating Company Units, or Endeavor Profits Units.
"Endeavor Profits Units" refers to the profits units of Endeavor Operating Company that are economically similar to stock options. Each Endeavor Profits Unit has a per unit hurdle price, which is economically similar to the exercise price of a stock option.

2


"Executive Holdcos" refers to Endeavor Executive Holdco, LLC, Endeavor Executive PIU Holdco, LLC, and Endeavor Executive II Holdco, LLC, each a management holding company, the equity owners of which include current and former senior officers, employees, or other service providers of Endeavor Operating Company, and which are controlled by Messrs. Emanuel and Whitesell.
"fully-diluted basis" means on a basis calculated assuming the full cash exercise (and not net settlement but, for the avoidance of doubt, including the conversion of the Convertible Notes (to the extent not converted prior to closing of the TKO Transactions)) of all outstanding options, warrants, restricted stock units, performance stock units, dividend equivalent rights and other rights and obligations (including any promised equity awards and assuming the full issuance of the shares underlying such awards) to acquire voting interests of TKO Group Holdings (without regard to any vesting provisions and, with respect to any promised awards whose issuance is conditioned in full or in part based on achievement of performance goals or metrics, assuming achievement at target performance) and the full conversion, exercise, exchange, settlement of all issued and outstanding securities convertible into or exercisable, exchangeable or settleable for voting interests of TKO Group Holdings, not including any voting interests of TKO Group Holdings reserved for issuance pursuant to future awards under any option, equity bonus, share purchase or other equity incentive plan or arrangement of TKO Group Holdings (other than promised awards described above), and any other interests or shares, as applicable, that may be issued or exercised. For the avoidance of doubt, this definition assumes no net settlement or other reduction in respect of withholding tax obligations in connection with the issuance, conversion, exercise, exchange or settlement of such rights or obligations to acquire interests of TKO Group Holdings as described in the foregoing.
"Merger Agreement" refers to the Agreement and Plan of Merger, entered into on April 2, 2024, by and among the Company, Endeavor Manager, Endeavor Operating Company (together with the Company and Endeavor Manager, the “Company Entities” and each, a “Company Entity”), Executive Holdcos, Wildcat EGH Holdco, L.P., a Delaware limited partnership (“Holdco Parent”), Wildcat OpCo Holdco, L.P., a Delaware limited partnership (“OpCo Parent” and, together with Holdco Parent, the “Parent Entities” and each, a “Parent Entity”), Wildcat PubCo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Holdco Parent (“Company Merger Sub”), Wildcat Manager Merger Sub, L.L.C., a Delaware limited liability company and a wholly-owned subsidiary of Company Merger Sub (“Manager Merger Sub”), Wildcat OpCo Merger Sub, L.L.C., a Delaware limited liability company and wholly-owned subsidiary of OpCo Parent (“OpCo Merger Sub” and, together with Endeavor Manager Merger Sub and Company Merger Sub, the “Merger Subs” and each, a “Merger Sub”).
"Merger" and “Merger-Related Transactions” refers to the transactions contemplated by the terms of the Merger Agreement (as defined above) that, upon completion, will result in Endeavor’s common stock no longer being listed on any public market (referred to as, the “take-private transaction”). Pursuant to the Merger Agreement, (a) OpCo Merger Sub will merge with and into Endeavor Operating Company, with Endeavor Operating Company surviving the merger, collectively owned, directly or indirectly, by OpCo Parent, Endeavor Manager and certain Rollover Holders (as defined herein) (the “OpCo Merger”), (b) immediately following the OpCo Merger, Manager Merger Sub will merge with and into Endeavor Manager, with Endeavor Manager surviving the merger, wholly-owned by the Company (the “Manager Merger”) and (c) immediately following the Manager Merger, Company Merger Sub will merge with and into the Company, with the Company surviving the merger, collectively owned, directly or indirectly, by Holdco Parent and certain Rollover Holders (the “Company Merger” and, together with the Manager Merger and the OpCo Merger, the “Merger” and, together with the other transactions contemplated by the Merger Agreement, collectively, the “Merger-Related Transactions”).
"reorganization transactions" refers to the internal reorganization completed in connection with our May 2021 initial public offering ("IPO"), following which Endeavor Group Holdings manages and operates the business and control the strategic decisions and day-to-day operations of Endeavor Operating Company through Endeavor Manager and includes the operations of Endeavor Operating Company in its consolidated financial statements.
“Rollover Holders" refers to certain holders of equity interests in the Company and Endeavor Operating Company (each, a “Rollover Holder”) each of which entered into a rollover agreement with the Parent Entities, pursuant to which each Rollover Holder has agreed, on the terms and subject to the conditions set forth in the rollover agreements, that certain of their equity interests in Endeavor Operating Company will remain outstanding in the OpCo Merger, and certain of shares of Common Stock they own will remain outstanding in the Company Merger.
"Silver Lake Equityholders" refers to certain affiliates of Silver Lake that are our stockholders.
"TKO" refers to TKO Group Holdings, Inc., a consolidated subsidiary of the Company, which, following the TKO Transactions, owns and operates the UFC and WWE.
The "TKO Transactions" refer to the combination of the UFC and WWE businesses into a new publicly listed company, TKO.
"UFC" refers to the Ultimate Fighting Championship, the professional mixed martial arts ("MMA") organization.
"UFC Parent" or "Zuffa" refers to Zuffa Parent LLC (n/k/a TKO Operating Company, LLC or "TKO OpCo").
"WWE" refers to World Wrestling Entertainment, Inc. (n/k/a World Wrestling Entertainment, LLC).

3


Item 1. Financial Statements (Unaudited)

PART I – FINANCIAL INFORMATION

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

778,643

 

 

$

1,166,526

 

Restricted cash

 

 

 

322,377

 

 

 

278,456

 

Accounts receivable (net of allowance for doubtful accounts of $67,449 and $66,650, respectively)

 

 

 

1,087,852

 

 

 

939,790

 

Deferred costs

 

 

 

656,122

 

 

 

627,170

 

Other current assets

 

 

 

558,023

 

 

 

452,605

 

      Total current assets

 

 

 

3,403,017

 

 

 

3,464,547

 

Property and equipment, net

 

 

 

950,207

 

 

 

944,907

 

Operating lease right-of-use assets

 

 

 

435,818

 

 

 

320,395

 

Intangible assets, net

 

 

 

5,099,843

 

 

 

5,212,365

 

Goodwill

 

 

 

10,081,052

 

 

 

10,151,839

 

Investments

 

 

 

404,210

 

 

 

397,971

 

Deferred income taxes

 

 

 

433,081

 

 

 

430,765

 

Other assets

 

 

 

705,515

 

 

 

621,984

 

      Total assets

 

 

$

21,512,743

 

 

$

21,544,773

 

LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

 

$

608,855

 

 

$

587,608

 

Accrued liabilities

 

 

 

835,996

 

 

 

710,725

 

Current portion of long-term debt

 

 

 

54,753

 

 

 

58,894

 

Current portion of operating lease liabilities

 

 

 

68,275

 

 

 

76,229

 

Deferred revenue

 

 

 

798,192

 

 

 

807,568

 

Deposits received on behalf of clients

 

 

 

308,601

 

 

 

262,436

 

Current portion of tax receivable agreement liability

 

 

 

120,527

 

 

 

156,155

 

Other current liabilities

 

 

 

132,595

 

 

 

137,330

 

      Total current liabilities

 

 

 

2,927,794

 

 

 

2,796,945

 

Long-term debt

 

 

 

4,955,400

 

 

 

4,969,417

 

Long-term operating lease liabilities

 

 

 

409,894

 

 

 

287,574

 

Long-term tax receivable agreement liability

 

 

 

718,643

 

 

 

834,298

 

Deferred tax liabilities

 

 

 

526,505

 

 

 

528,049

 

Other long-term liabilities

 

 

 

560,895

 

 

 

405,979

 

    Total liabilities

 

 

 

10,099,131

 

 

 

9,822,262

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

 

 

229,287

 

 

 

215,458

 

Shareholders' Equity:

 

 

 

 

 

 

 

Class A common stock, $0.00001 par value; 5,000,000,000 shares authorized;
  
301,534,075 and 298,698,490 shares issued and outstanding as of March 31, 2024
  and December 31, 2023, respectively

 

 

 

3

 

 

 

3

 

Class B common stock, $0.00001 par value; 5,000,000,000 shares authorized;
  
none issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

 

Class C common stock, $0.00001 par value; 5,000,000,000 shares authorized;
  
none issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

 

Class X common stock, $0.00001 par value; 4,983,448,411 and 4,983,448,411 shares authorized;
  
165,893,113 and 166,569,908 shares issued and outstanding as of March 31, 2024
  and December 31, 2023, respectively

 

 

 

1

 

 

 

1

 

Class Y common stock, $0.00001 par value; 989,681,838 and 989,681,838 shares authorized;
  
225,897,909 and 225,960,405 shares issued and outstanding as of March 31, 2024
  and December 31, 2023, respectively

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

 

4,955,083

 

 

 

4,901,922

 

Accumulated deficit

 

 

 

(272,473

)

 

 

(117,065

)

Accumulated other comprehensive loss

 

 

 

(20,543

)

 

 

(157

)

Total Endeavor Group Holdings, Inc. shareholders' equity

 

 

 

4,662,073

 

 

 

4,784,706

 

Nonredeemable non-controlling interests

 

 

 

6,522,252

 

 

 

6,722,347

 

Total shareholders' equity

 

 

 

11,184,325

 

 

 

11,507,053

 

Total liabilities, redeemable interests and shareholders' equity

 

 

$

21,512,743

 

 

$

21,544,773

 

See accompanying notes to consolidated financial statements

4


ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Revenue

 

$

1,850,284

 

 

$

1,596,837

 

Operating expenses:

 

 

 

 

 

 

Direct operating costs

 

 

844,610

 

 

 

724,282

 

Selling, general and administrative expenses

 

 

1,096,246

 

 

 

669,213

 

Depreciation and amortization

 

 

156,349

 

 

 

66,751

 

Impairment charges

 

 

64,196

 

 

 

 

Total operating expenses

 

 

2,161,401

 

 

 

1,460,246

 

Operating (loss) income

 

 

(311,117

)

 

 

136,591

 

Other (expense) income:

 

 

 

 

 

 

Interest expense, net

 

 

(96,559

)

 

 

(85,097

)

Tax receivable agreement liability adjustment

 

 

(2,444

)

 

 

2,344

 

Other (expense) income, net

 

 

(2,922

)

 

 

24,433

 

(Loss) income before income taxes and equity losses of affiliates

 

 

(413,042

)

 

 

78,271

 

(Benefit from) provision for income taxes

 

 

(111,834

)

 

 

35,470

 

(Loss) income before equity losses of affiliates

 

 

(301,208

)

 

 

42,801

 

Equity losses of affiliates, net of tax

 

 

(2,263

)

 

 

(6,546

)

Net (loss) income

 

 

(303,471

)

 

 

36,255

 

Less: Net (loss) income attributable to non-controlling interests

 

 

(166,131

)

 

 

28,224

 

Net (loss) income attributable to Endeavor Group Holdings, Inc.

 

$

(137,340

)

 

$

8,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share of Class A common stock:

 

 

 

 

 

 

  Basic

 

$

(0.46

)

 

$

0.03

 

  Diluted

 

$

(0.46

)

 

$

0.03

 

Weighted average number of shares used in computing (loss) earnings per share:

 

 

 

 

 

 

  Basic

 

 

300,460,640

 

 

 

291,936,777

 

  Diluted

 

 

300,460,640

 

 

 

295,285,241

 

 

See accompanying notes to consolidated financial statements

5


ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net (loss) income

 

$

(303,471

)

 

$

36,255

 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

Change in unrealized gains/losses on cash flow hedges:

 

 

 

 

 

 

Unrealized gains (losses) on interest rate swaps

 

 

6,105

 

 

 

(1,036

)

Reclassification of gains to net (loss) income for interest rate swaps

 

 

(16,793

)

 

 

(11,802

)

Foreign currency translation adjustments

 

 

(20,954

)

 

 

22,331

 

Reclassification of foreign currency translation losses to net (loss) income for business divestiture

 

 

 

 

 

3,270

 

Total comprehensive (loss) income, net of tax

 

 

(335,113

)

 

 

49,018

 

Less: Comprehensive (loss) income attributable to non-controlling interests

 

 

(177,398

)

 

 

31,924

 

Comprehensive (loss) income attributable to Endeavor Group Holdings, Inc.

 

$

(157,715

)

 

$

17,094

 

See accompanying notes to consolidated financial statements

6


ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

 

 

Three Months Ended March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Total Shareholders'

 

 

 

 

 

 

 

 

 

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Equity Attributable

 

 

 

Nonredeemable

 

 

Total

 

 

 

Non-controlling

 

Class A Common Stock

 

 

Class X Common Stock

 

 

Class Y Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

to Endeavor Group

 

 

 

Non-controlling

 

 

Shareholders'

 

 

 

Interests

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Holdings, Inc.

 

 

 

Interests

 

 

Equity

 

Balance at January 1, 2024

 

$

215,458

 

 

298,698,490

 

 

$

3

 

 

 

166,569,908

 

 

$

1

 

 

 

225,960,405

 

 

$

2

 

 

$

4,901,922

 

 

$

(117,065

)

 

$

(157

)

 

$

4,784,706

 

 

 

$

6,722,347

 

 

$

11,507,053

 

Comprehensive income (loss)

 

 

14,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(137,340

)

 

 

(20,375

)

 

 

(157,715

)

 

 

 

(192,124

)

 

 

(349,839

)

Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32,755

 

 

 

 

 

 

 

 

 

32,755

 

 

 

 

27,901

 

 

 

60,656

 

Issuance of Class A common stock due to exchanges

 

 

 

 

676,795

 

 

 

 

 

 

(676,795

)

 

 

 

 

 

(62,496

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Class A common stock due to releases of RSUs

 

 

 

 

2,158,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,493

 

 

 

1,493

 

Distributions

 

 

(897

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,653

)

 

 

(13,653

)

Dividends ($0.06 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,068

)

 

 

 

 

 

(18,068

)

 

 

 

(9,026

)

 

 

(27,094

)

Equity reallocation between controlling and non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,697

 

 

 

 

 

 

(11

)

 

 

14,686

 

 

 

 

(14,686

)

 

 

 

Equity impact of tax receivable agreement for exchanges of EOC units and Endeavor Manager units, and deferred taxes arising from changes in ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,709

 

 

 

 

 

 

 

 

 

5,709

 

 

 

 

 

 

 

5,709

 

Balance at March 31, 2024

 

$

229,287

 

 

301,534,075

 

 

$

3

 

 

 

165,893,113

 

 

$

1

 

 

 

225,897,909

 

 

$

2

 

 

$

4,955,083

 

 

$

(272,473

)

 

$

(20,543

)

 

$

4,662,073

 

 

 

$

6,522,252

 

 

$

11,184,325

 

 

See accompanying notes to consolidated financial statements

 

7


ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

 

 

Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Total Shareholders'

 

 

 

 

 

 

 

 

 

Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Equity Attributable

 

 

Nonredeemable

 

 

Total

 

 

 

Non-controlling

 

Class A Common Stock

 

 

Class X Common Stock

 

 

Class Y Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

to Endeavor Group

 

 

Non-controlling

 

 

Shareholders'

 

 

 

Interests

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Holdings, Inc.

 

 

Interests

 

 

Equity

 

Balance at January 1, 2023

 

$

253,079

 

 

290,541,729

 

 

$

2

 

 

 

182,077,479

 

 

$

1

 

 

 

227,836,134

 

 

$

2

 

 

$

2,120,794

 

 

$

(216,219

)

 

$

(23,736

)

 

$

1,880,844

 

 

$

1,172,649

 

 

$

3,053,493

 

Comprehensive income

 

 

17,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,031

 

 

 

9,063

 

 

 

17,094

 

 

 

14,515

 

 

 

31,609

 

Equity-based compensation

 

 

(1,527

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

77,166

 

 

 

 

 

 

 

 

 

77,166

 

 

 

4,990

 

 

 

82,156

 

Issuance of Class A common stock due to exchanges

 

 

 

 

6,165,281

 

 

 

 

 

 

(6,165,281

)

 

 

 

 

 

(313,103

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Class A common stock due to releases of RSUs

 

 

 

 

2,645,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions

 

 

(6,567

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,724

)

 

 

(19,724

)

Accretion of redeemable non- controlling interests

 

 

1,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,387

)

 

 

 

 

 

 

 

 

(1,387

)

 

 

 

 

 

(1,387

)

Acquisition of non-controlling interests

 

 

(715

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,475

 

 

 

2,475

 

Non-controlling interests for sale of businesses

 

 

(8,827

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity reallocation between controlling and non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

57,339

 

 

 

 

 

 

(324

)

 

 

57,015

 

 

 

(57,015

)

 

 

 

Equity impact of tax receivable agreement for exchanges of EOC units and Endeavor Manager units, and deferred taxes arising from changes in ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,897

)

 

 

 

 

 

 

 

 

(5,897

)

 

 

 

 

 

(5,897

)

Balance at March 31, 2023

 

$

254,239

 

 

299,352,355

 

 

$

2

 

 

 

175,912,198

 

 

$

1

 

 

 

227,523,031

 

 

$

2

 

 

$

2,248,015

 

 

$

(208,188

)

 

$

(14,997

)

 

$

2,024,835

 

 

$

1,117,890

 

 

$

3,142,725

 

 

See accompanying notes to consolidated financial statements

8


ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net (loss) income

 

$

(303,471

)

 

$

36,255

 

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

156,349

 

 

 

66,751

 

Amortization and write-off of original issue discount and deferred financing cost

 

 

4,361

 

 

 

4,656

 

Amortization of content costs

 

 

12,127

 

 

 

4,026

 

Impairment charges

 

 

64,196

 

 

 

 

Net loss (gain) on sale/disposal and impairment of assets

 

 

14,477

 

 

 

(1,097

)

Gain on business divestiture

 

 

 

 

 

(