☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
83-3340169
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
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
|
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer
|
☒ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
• |
the impact of the global pandemic related to COVID-19 and its variants on our business, financial condition, liquidity and results of operations;
|
• |
changes in public and consumer tastes and preferences and industry trends;
|
• |
the effect of 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, sign, and retain clients;
|
• |
our ability to identify, recruit, and retain qualified and experienced agents and managers;
|
• |
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 in technology, including at live events, or security breaches of our information systems;
|
• |
the unauthorized disclosure of sensitive or confidential client or customer information;
|
• |
our substantial indebtedness;
|
• |
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;
|
• |
the 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;
|
• |
our control by Messrs. Emanuel and Whitesell, the Executive Holdcos, and the Silver Lake Equityholders;
|
• |
risk related to our organization and structure;
|
• |
risks related to tax matters;
|
• |
risks related to our Class A common stock;
|
• |
other important factors that could cause actual results, performance or achievements to differ materially from those contemplated that are found in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Part II, Item 1A., “Risk Factors” of this Quarterly Report and in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021.
|
• |
“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
Catch-Up
Profits Units” refer to the Endeavor Full
Catch-Up
Profits Units and the Endeavor Partial
Catch-Up
Profits Units.
|
• |
“Endeavor Full
Catch-Up
Profits Units” refer to the Endeavor Profits Units that are designated as “catchup” units. Endeavor Full
Catch-Up
Profits Units have a per unit hurdle price and are entitled to receive a preference on distributions once the hurdle price applicable to such unit has been met. Upon our achievement of a price per share that would have fully satisfied such preference on distributions, the Endeavor Full
Catch-Up
Profits Units were converted into Endeavor Operating Company Units.
|
• |
“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 Partial
Catch-Up
Profits Units” refer to the Endeavor Profits Units that are designated as “catchup” units. Endeavor Partial
Catch-Up
Profits Units have a per unit hurdle price and are entitled to receive a preference on distributions once the hurdle price applicable to such unit has been met. Upon our achievement of a price per share that would have fully satisfied such preference on distributions, the Endeavor Partial
Catch-Up
Profits Units were converted into Endeavor Profits Units (without any such preference) with a reduced per unit hurdle price to take into account such prior preference.
|
• |
“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 and that are economically similar to stock options (other than with respect to Endeavor Full
Catch-up
Profits Units which, upon our achievement of a price per share that would have fully satisfied their preference on distributions, were converted into Endeavor Operating Company Units). Each Endeavor Profits Unit (other than Endeavor Full
Catch-Up
Profits Units) has a per unit hurdle price, which is economically similar to the exercise price of a stock option.
|
• |
“Endeavor Full Catch-Up Profits Units” refer to the Endeavor Profits Units that are designated as “catchup” units. Endeavor Full Catch-Up Profits Units have a per unit hurdle price and are entitled to receive a preference on distributions once the hurdle price applicable to such unit has been met. Upon our achievement of a price per share that would have fully satisfied such preference on distributions, the Endeavor Full Catch-Up Profits Units were converted into Endeavor Operating Company Units.
|
• |
“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.
|
• |
“reorganization transactions” refers to the internal reorganization completed in connection with our May 2021 initial public offering, following which Endeavor Group Holdings manages and operates the business and control the strategic decisions and
day-to-day
|
Item 1.
|
Financial Statements (Unaudited)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue
|
$ | 1,111,272 | $ | 462,914 | $ | 2,180,854 | $ | 1,653,311 | ||||||||
Operating expenses:
|
||||||||||||||||
Direct operating costs
|
570,955 | 172,643 | 1,117,347 | 853,927 | ||||||||||||
Selling, general and administrative expenses
|
785,101 | 302,047 | 1,166,214 | 691,018 | ||||||||||||
Insurance recoveries
|
(10,210 | ) | (16,841 | ) | (29,867 | ) | (33,960 | ) | ||||||||
Depreciation and amortization
|
69,161 | 84,751 | 136,397 | 165,198 | ||||||||||||
Impairment charges
|
3,770 | 172,232 | 3,770 | 175,282 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
1,418,777 | 714,832 | 2,393,861 | 1,851,465 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(307,505 | ) | (251,918 | ) | (213,007 | ) | (198,154 | ) | ||||||||
Other (expense) income:
|
||||||||||||||||
Interest expense, net
|
(83,836 | ) | (71,693 | ) | (152,187 | ) | (141,677 | ) | ||||||||
Loss on extinguishment of debt
|
(28,628 | ) | — | (28,628 | ) | — | ||||||||||
Other income, net
|
7,933 | 21,810 | 4,718 | 47,167 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes and equity losses of affiliates
|
(412,036 | ) | (301,801 | ) | (389,104 | ) | (292,664 | ) | ||||||||
Provision for (benefit from) income taxes
|
60,918 | (4,049 | ) | 66,003 | 44,555 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before equity losses of affiliates
|
(472,954 | ) | (297,752 | ) | (455,107 | ) | (337,219 | ) | ||||||||
Equity losses of affiliates, net of tax
|
(43,813 | ) | (198,013 | ) | (59,284 | ) | (209,807 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(516,767 | ) | (495,765 | ) | (514,391 | ) | (547,026 | ) | ||||||||
Less: Net loss attributable to
non-controlling
interests
|
(190,354
|
)
|
(29,211
|
)
|
(163,108
|
)
|
(25,516
|
)
|
||||||||
Less: Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions
|
(6,816 | ) | (466,554 | ) | (31,686 | ) | (521,510 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Endeavor Group Holdings, Inc.
|
$ | (319,597 | ) | $ | — | $ | (319,597 | ) | $ | — | ||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted loss per share of Class A common stock
(1)
|
$ | (1.24 | ) | N/A | $ | (1.24 | ) | N/A | ||||||||
Weighted average number of shares used in computing basic and diluted loss per share
|
258,266,323 | N/A | 258,266,323 | N/A |
(1)
|
Basic and diluted loss per share of Class A common stock is applicable only for the period from May 1, 2021 through June 30, 2021, which is the period following the initial public offering (“IPO”) and the related Reorganization Transactions (as defined in
Note
1 to the unaudited consolidated financial statements). See Note 14 for the calculation of the numbers of shares used in computation of net loss per share of Class A common stock and the basis for computation of net loss per share.
|
|
|
Three Months Ended June 30,
|
|
|
Six months ended June 30,
|
|
|||||||||||
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
||||||
Net loss
|
$ | (516,767 | ) | $ | (495,765 | ) | $ | (514,391 | ) | $ | (547,026 | ) | |||||
Other comprehensive income (loss), net of tax:
|
|||||||||||||||||
Change in unrealized gains/losses on cash flow hedges:
|
|||||||||||||||||
Unrealized
gain
losses
s
(
)
on forward foreign exchange contracts
|
1,570 | 988 | 212 | (2,124 | ) | ||||||||||||
Reclassification of losses to net loss for forward foreign exchange contracts
|
7 | — | 7 | — | |||||||||||||
Unrealized (losses)
gains
on interest rate swaps
|
(1,802 | ) | (12,465 | ) | 13,274 | (92,464 | ) | ||||||||||
Reclassification of losses to net income (loss) for interest rate swaps
|
7,552 | 5,483 | 14,936 | 6,912 | |||||||||||||
Foreign currency translation adjustments
|
2,170 | 3,022 | (2,380 | ) | (11,460 | ) | |||||||||||
Reclassification of loss to net income (loss) for business divestiture
|
— | — | — | 4,231 | |||||||||||||
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive loss, net of tax
|
(507,270 | ) | (498,737 | ) | (488,342 | ) | (641,931 | ) | |||||||||
Less: Comprehensive
loss
attributable to
non-controlling
interests
|
(187,871 | ) |
(29,211
|
)
|
(160,625 | ) |
(25,516
|
)
|
|||||||||
Less: Comprehensive loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions
|
(3,703 | ) | (469,526 | ) | (12,021 | ) | (616,415 | ) | |||||||||
|
|
|
|
|
|
|
|
||||||||||
Comprehensive loss attributable to Endeavor Group Holdings, Inc.
|
$ | (315,696 | ) | $ | — | $ | (315,696 | ) | $ | — | |||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Redeemable
Non- controlling |
|
|
Redeemable
|
|
|
Members’
|
|
|
Class A Common Stock
|
|
|
Class X Common Stock
|
|
|
Class Y Common Stock
|
|
|
Additional Paid-
|
|
|
Accumulated
|
|
|
Accumulated
Other Comprehensive |
|
|
Total Shareholders’
Equity Attributable to Endeavor Group Holdings, Inc./ |
|
|
Nonredeemable
Non- controlling |
|
|
Total
Shareholders’/ |
|
||||||||||||||||||||||||
|
|
Interests
|
|
|
Equity
|
|
|
Capital
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
In Capital
|
|
|
Deficit
|
|
|
(Loss) Income
|
|
|
Members’ Equity
|
|
|
Interests
|
|
|
Members’ Equity
|
|
|||||||||||||||
Balance at January 1, 2021
|
|
$
|
168,254
|
|
|
$
|
22,519
|
|
|
$
|
468,633
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(190,786
|
)
|
|
$
|
277,847
|
|
|
$
|
686,129
|
|
|
$
|
963,976
|
|
Comprehensive (loss) income prior to Reorganization and IPO
|
|
|
(4,111
|
)
|
|
|
—
|
|
|
|
(31,686
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
19,665
|
|
|
(12,021
|
)
|
|
|
42,859
|
|
|
|
30,838
|
|
||
Equity-based compensation expense prior to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
3,444
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,444
|
|
|
|
7,636
|
|
|
|
11,080
|
|
Distributions prior to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
(245
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(245
|
)
|
|
|
(8,403
|
)
|
|
|
(8,648
|
)
|
Accretion of redeemable non-controlling interests prior to Reorganization and IPO
|
|
|
(271
|
)
|
|
|
—
|
|
|
|
271
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
271
|
|
|
|
—
|
|
|
|
271
|
|
Establishment of non-controlling interests prior to Reorganization and IPO
|
|
|
2,888
|
|
|
|
—
|
|
|
|
560
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
560
|
|
|
|
(3,448
|
)
|
|
|
(2,888
|
)
|
Effect of Reorganization
|
|
|
5,729
|
|
|
|
(22,519
|
)
|
|
|
(440,977
|
)
|
|
|
133,712,566
|
|
|
|
1
|
|
|
|
122,021,609
|
|
|
|
1
|
|
|
|
167,208,026
|
|
|
|
2
|
|
|
|
242,017
|
|
|
|
—
|
|
|
|
80,645
|
|
|
|
(118,311
|
)
|
|
|
135,101
|
|
|
16,790
|
|
|
Issuance of Class A common stock sold in IPO, including underwriters’ option, and Private Placement, net of underwriting discounts
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
81,873,497
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,886,642
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,886,643
|
|
|
|
—
|
|
|
|
1,886,643
|
|
Use of proceeds, including the UFC Buyout
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
42,400,877
|
|
|
|
—
|
|
|
|
67,910,105
|
|
|
|
—
|
|
|
|
70,946,270
|
|
|
|
—
|
|
|
|
(702,698
|
)
|
|
|
—
|
|
|
|
(11,955
|
|
|
|
(714,653
|
)
|
|
|
(120,386
|
)
|
|
|
(835,039
|
)
|
Comprehensive (loss) income subsequent to Reorganization and IPO
|
|
|
(1,694
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(319,597
|
)
|
|
|
3,901
|
|
|
|
(315,696
|
)
|
|
|
(197,679
|
)
|
|
|
(513,375
|
)
|
|||
Equity-based compensation subsequent to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
158,846
|
|
|
|
—
|
|
|
|
—
|
|
|
|
158,846
|
|
|
|
276,864
|
|
|
|
435,710
|
|
Issuance of Class A common stock due to exchanges subsequent to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,880,196
|
|
|
|
—
|
|
|
|
(1,851,331
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Issuance of Class A common stock for vested RSUs subsequent to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,504,547
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Contributed capital subsequent to Reorganization and IPO
|
|
|
5,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Distributions subsequent to Reorganization and IPO
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(95 |
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(95 |
)
|
—
|
|
|
|
(95 |
)
|
||
Accretion of redeemable non-controlling interests subsequent to Reorganization and IPO
|
|
|
867
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(867
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(867
|
)
|
|
|
—
|
|
|
|
(867
|
)
|
Establishment of non-controlling interests subsequent to Reorganization and IPO
|
|
|
2,078
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,078
|
)
|
|
|
(2,078
|
)
|
Equity reallocation between controlling and non-controlling interests
|
— | — | — | — | — | — | — | — | — | 5,027 | — | — | 5,027 | (5,027 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||
Establishment
of
t
agreements
liability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32,081
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(32,081
|
)
|
|
|
—
|
|
|
|
(32,081
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
June 30, 2021 |
|
$
|
179,140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
261,371,683
|
|
|
$
|
2
|
|
|
|
188,080,383
|
|
|
$
|
1
|
|
|
|
238,154,296
|
|
|
$
|
2
|
|
|
$
|
1,556,791
|
|
|
$
|
(319,597
|
) |
|
$
|
(98,530
|
) |
|
$
|
1,138,669
|
|
|
$
|
811,568
|
|
|
$
|
1,950,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||||||||||||
Redeemable Non-
controlling
Interests
|
Redeemable Equity
|
Members’
Capital
|
Accumulated Other
Comprehensive
(Loss) Income
|
Total Endeavor
Operating
Company, LLC
Members’ Equity
|
Nonredeemable
Non-controlling
Interests
|
Total
Members’
Equity
|
||||||||||||||||||||||
Balance at April 1, 2020
|
$ | 197,768 | $ | 43,693 | $ | 1,016,206 | $ | (217,337 | ) | $ | 798,869 | $ | 672,784 | $ | 1,471,653 | |||||||||||||
Comprehensive (loss) income
|
(20,712 | ) | — | (466,554 | ) | (2,972 | ) | (469,526 | ) | (8,499 | ) | (478,025 | ) | |||||||||||||||
Equity-based compensation expense
|
— | — | 5,339 | — | 5,339 | 2,876 | 8,215 | |||||||||||||||||||||
Distributions
|
— | — | (252 | ) | — | (252 | ) | (399 | ) | (651 | ) | |||||||||||||||||
Accretion of redeemable
non-controlling
interests
|
(1,752 | ) | — | 1,752 | — | 1,752 | — | 1,752 | ||||||||||||||||||||
Redemption of units
|
— | — | (7,071 | ) | — | (7,071 | ) | — | (7,071 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at June 30, 2020
|
$ | 175,304 | $ | 43,693 | $ | 549,420 | $ | (220,309 | ) | $ | 329,111 | $ | 666,762 | $ | 995,873 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Six Months Ended June 30, 2020
|
||||||||||||||||||||||||||||
Redeemable
Non-controlling
Interests
|
Redeemable
Equity
|
Members’
Capital
|
Accumulated
Other
Comprehensive
(Loss) Income
|
Total Endeavor
Operating
Company, LLC
Members’ Equity
|
Nonredeemable
Non-controlling
Interests
|
Total
Members’
Equity
|
||||||||||||||||||||||
Balance at January 1, 2020
|
$ | 136,809 | $ | 43,693 | $ | 1,038,678 | $ | (125,404 | ) | $ | 913,274 | $ | 774,309 | $ | 1,687,583 | |||||||||||||
Cumulative transition adjustment of ASU
2016-13
adoption
|
— | — | (1,803 | ) | — | (1,803 | ) | — | (1,803 | ) | ||||||||||||||||||
Comprehensive (loss) income
|
(18,608 | ) | — | (521,510 | ) | (94,905 | ) | (616,415 | ) | (6,908 | ) | (623,323 | ) | |||||||||||||||
Equity-based compensation expense
|
— | — | 9,166 | — | 9,166 | 5,812 | 14,978 | |||||||||||||||||||||
Contributions
|
— | — | 26,476 | — | 26,476 | — | 26,476 | |||||||||||||||||||||
Distributions
|
— | — | (2,470 | ) | — | (2,470 | ) | (110,339 | ) | (112,809 | ) | |||||||||||||||||
Accretion of redeemable
non-controlling
interests
|
(8,101 | ) | — | 8,101 | — | 8,101 | — | 8,101 | ||||||||||||||||||||
Redemption of units
|
— | — | (7,218 | ) | — | (7,218 | ) | — | (7,218 | ) | ||||||||||||||||||
Acquisition of
non-controlling
interests
|
65,204 | — | — | — | — | 5,635 | 5,635 | |||||||||||||||||||||
Business deconsolidation
|
— | — | — | — | — | (1,747 | ) | (1,747 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at June 30, 2020
|
$ | 175,304 | $ | 43,693 | $ | 549,420 | $ | (220,309 | ) | $ | 329,111 | $ | 666,762 | $ | 995,873 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||
2021
|
2020
|
|||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Net loss
|
$ | (514,391 | ) | $ | (547,026 | ) | ||||||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
136,397 | 165,198 | ||||||||||||||
Amortization and
write-off
of original issue discount and deferred financing cost
|
28,807 | 10,393 | ||||||||||||||
Loss on extinguishment of debt
|
28,628 | — | ||||||||||||||
Amortization of content costs
|
73,282 | 25,085 | ||||||||||||||
Impairment charges
|
3,770 | 175,282 | ||||||||||||||
(Gain) loss on sale/disposal and impairment of assets
|
(2,512 | ) | 82 | |||||||||||||
Gain on business acquisition and deconsolidation
|
— | (30,999 | ) | |||||||||||||
Equity-based compensation expense
|
403,508 | 16,975 | ||||||||||||||
Change in fair value of contingent liabilities
|
14,378 | (7,048 | ) | |||||||||||||
Change in fair value of equity investments with and without readily determinable fair value
|
(11,285 | ) | 5,709 | |||||||||||||
Change in fair value of financial instruments
|
21,034 | (17,644 | ) | |||||||||||||
Equity losses from affiliates
|
59,284 | 209,807 | ||||||||||||||
Net (benefit) provision for allowance for doubtful accounts
|
(3,916 | ) | 17,676 | |||||||||||||
Net gain on foreign currency transactions
|
(5,156 | ) | (5,730 | ) | ||||||||||||
Distributions from affiliates
|
902 | 4,675 | ||||||||||||||
Income taxes
|
42,342 | 29,615 | ||||||||||||||
Other, net
|
174 | 718 | ||||||||||||||
Changes in operating assets and liabilities - net of acquisitions:
|
||||||||||||||||
(Increase)/decrease in receivables
|
(141,807 | ) | 247,061 | |||||||||||||
Decrease/(increase) in other current assets
|
2,325 | (59,024 | ) | |||||||||||||
Increase in other assets
|
(490,715 | ) | (104,235 | ) | ||||||||||||
Decrease in deferred costs
|
84,250 | 106,121 | ||||||||||||||
Increase in deferred revenue
|
124,524 | 112,091 | ||||||||||||||
Increase/(decrease)
in accounts payable and accrued liabilities
|
44,394 | (77,270 | ) | |||||||||||||
Decrease in other liabilities
|
(20,416 |
)
|
(75,607 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Net cash (used in) provided by operating activities
|
(122,199 | ) | 201,905 | |||||||||||||
|
|
|
|
|||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Acquisitions, net of cash acquired
|
(255,633 | ) | (309,803 | ) | ||||||||||||
Purchases of property and equipment
|
(27,107 | ) | (40,813 | ) | ||||||||||||
Proceeds from sale of assets
|
19,237 | 83,007 | ||||||||||||||
Investments in affiliates
|
(113,959 | ) | (21,075 | ) | ||||||||||||
Other, net
|
4,897 | (1,997 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Net cash used in investing activities
|
(372,565 | ) | (290,681 | ) | ||||||||||||
|
|
|
|
|||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds from borrowings
|
220,841 | 1,081,677 | ||||||||||||||
Payments on borrowings
|
(852,341 | ) | (437,065 | ) | ||||||||||||
Contributions
|
|
|
5,400
|
|
|
|
—
|
|
||||||||
Distributions
|
(8,743 | ) | (69,557 | ) | ||||||||||||
Redemption of units
|
(14,402 | ) | (5,947 | ) | ||||||||||||
Proceeds from equity offering, net of underwriting discounts
and offering expenses
|
1,886,643 | — | ||||||||||||||
Payments of contingent consideration related to acquisitions
|
(1,778 | ) | (2,320 | ) | ||||||||||||
Acquisition of non-controlling interests
|
|
|
(835,683
|
)
|
|
|
—
|
|
||||||||
Other, net
|
(2,439 | ) | (16,115 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Net cash provided by financing activities
|
397,498 | 550,673 | ||||||||||||||
|
|
|
|
|||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1,055 | (6,418 | ) | |||||||||||||
|
|
|
|
|||||||||||||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(96,211 | ) | 455,479 | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of year
|
1,190,333 | 886,073 | ||||||||||||||
|
|
|
|
|||||||||||||
Cash, cash equivalents and restricted cash at end of period
|
$ | 1,094,122 | $ | 1,341,552 | ||||||||||||
|
|
|
|
1.
|
DESCRIPTION OF BUSINESS
AND ORGANIZATION
|
• |
EGH’s certificate of incorporation was amended and restated to, among other things, provide for the following common stock:
|
Class of Common Stock
|
Par Value
|
Votes
|
Economic Rights
|
|||||
Class A common stock
|
$ | 0.00001 | 1 | Yes | ||||
Class B common stock
|
$ | 0.00001 | None | Yes | ||||
Class C common stock
|
$ | 0.00001 | None | Yes | ||||
Class X common stock
|
$ | 0.00001 | 1 | None | ||||
Class Y common stock
|
$ | 0.00001 | 20 | None |
• |
Endeavor Manager became the sole managing member of EOC and EGH became the sole managing member of Endeavor Manager;
|
• |
Endeavor Manager issued to equityholders of certain management holding companies common interest units in Endeavor Manager along with paired shares of its Class X common stock as consideration for the acquisition of Endeavor Operating Company Units held by such management holding companies;
|
• |
For certain
pre-IPO
investors, EGH issued shares of its Class A common stock, Class Y common stock and rights to receive payments under a tax receivable agreement and for certain other
pre-IPO
investors, EGH issued shares of its Class A common stock as consideration for the acquisition of Endeavor Operating Company Units held by such
pre-IPO
investors;
|
• |
For holders of Endeavor Operating Company Units which remained outstanding following the IPO, EGH issued paired shares of its Class X common stock and, in certain instances, Class Y common stock, in each case equal to the number of Endeavor Operating Company Units held and in exchange for the payment of the aggregate par value of the Class X common stock and Class Y common stock received; and
|
|
•
|
|
Certain Endeavor Profits Units, Endeavor Full
Catch-Up
Profits Units and Endeavor Partial
Catch-Up
Profits Units remained outstanding following the closing of the IPO. Subsequent to the IPO, the Endeavor Full Catch-up Profits Units were recapitalized and converted into Endeavor Operating Company Units and the Endeavor Partial Catch-Up Profits Units were recapitalized and converted into Endeavor Profits Units.
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
3.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
4.
|
IMPACT OF THE GLOBAL
COVID-19
PANDEMIC
|
5.
|
ACQUISITIONS AND DECONSOLIDATION
|
FlightScope
|
NCSA
|
|||||||
Cash and cash equivalents
|
|
$
|
1,042
|
|
|
$
|
3,783
|
|
Accounts receivable
|
|
|
475
|
|
|
|
5,619
|
|
Deferred costs
|
|
|
94
|
|
|
|
1,096
|
|
Other current assets
|
|
|
1,640
|
|
|
|
8,856
|
|
Property and equipment
|
|
|
1,090
|
|
|
|
2,804
|
|
Right of use assets
|
1,272 | — | ||||||
Other assets
|
|
|
166
|
|
|
|
5,472
|
|
Intangible assets:
|
|
|
||||||
Trade names
|
— | 21,100 | ||||||
Customer relationships
|
|
|
2,700
|
|
|
|
10,000
|
|
Internally developed software
|
15,400 | 37,100 | ||||||
Goodwill
|
|
|
30,271
|
|
|
|
193,508
|
|
Accounts payable and accrued expenses
|
|
|
(806
|
)
|
|
|
(21,385
|
)
|
Other current liabilities
|
|
|
(187
|
)
|
|
|
(8,608
|
)
|
Operating lease liability
|
(1,272 | ) | — | |||||
Deferred revenue
|
|
|
(631
|
)
|
|
|
(37,636
|
)
|
Other liabilities
|
|
|
(15,346
|
)
|
|
|
(25,014
|
)
|
|
|
|
|
|
|
|
|
|
Net assets acquired
|
|
$
|
35,908
|
|
|
$
|
196,695
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$ | 45,230 | ||
Restricted cash
|
86 | |||
Accounts receivable
|
10,316 | |||
Deferred costs
|
99,184 | |||
Other current assets
|
53,893 | |||
Property and equipment
|
4,361 | |||
Operating lease
right-of-use
|
3,509 | |||
Other assets
|
74,193 | |||
Intangible assets:
|
||||
Trade names
|
75,400 | |||
Customer and client relationships
|
198,819 | |||
Goodwill
|
387,542 | |||
Accounts payable and accrued expenses
|
(55,927 | ) | ||
Other current liabilities
|
(28,224 | ) | ||
Deferred revenue
|
(175,790 | ) | ||
Debt
|
(217,969 | ) | ||
Operating lease liabilities
|
(3,509 | ) | ||
Other long-term liabilities
|
(24,377 | ) | ||
Non-redeemable
non-controlling
interest
|
(5,635 | ) | ||
|
|
|||
Net assets acquired
|
$ | 441,102 | ||
|
|
6.
|
SUPPLEMENTARY DATA
|
June 30,
2021 |
December 31,
2020 |
|||||||
Licensed program rights, net of accumulated amortization
|
$ | 32,181 | $ | 19,793 | ||||
Produced programming:
|
||||||||
Released, net of accumulated amortization
|
5,190 | 4,806 | ||||||
In production
|
603,869 | 314,214 | ||||||
In development
|
53,632 | 37,392 | ||||||
|
|
|
|
|||||
Total content costs
|
$ | 694,872 | $ | 376,205 | ||||
|
|
|
|
|||||
Content cost monetized on a title-by-title basis
|
$ | 675,163 | $ | 358,207 | ||||
Content cost monetized as a film group
|
19,709 | 17,998 | ||||||
|
|
|
|
|||||
Total content costs
|
$ | 694,872 | $ | 376,205 | ||||
|
|
|
|
June 30,
2021 |
December 31,
2020 |
|||||||
Accrued operating expenses
|
$ | 184,115 | $ | 155,142 | ||||
Payroll, bonuses and benefits
|
167,730 | 100,630 | ||||||
Other
|
79,148 | 66,977 | ||||||
|
|
|
|
|||||
Total accrued liabilities
|
$ | 430,993 | $ | 322,749 | ||||
|
|
|
|
|
|
Balance at
Beginning of Year |
|
|
Additions/Charged
(Credited) to Costs and Expenses |
|
|
Deductions
|
|
|
Foreign
Exchange |
|
|
Balance at
End of Period |
|
|||||
Six months ended June 30, 2021
|
$ | 67,975 | $ | 2,378 | $ | (6,352 | ) | $ | 58 | $ | 64,059 |
|
|
Six Months Ended June 30,
|
|
|||||
|
|
2021
|
|
|
2020
|
|
||
Supplemental information:
|
||||||||
Cash paid for interest
|
$ | 102,393 | $ | 126,995 | ||||
Cash payments for income taxes
|
20,976 | 23,073 | ||||||
Non-cash investing and financing activities:
|
||||||||
Capital expenditures included in accounts payable and accrued liabilities
|
$ | 8,985 | $ | 3,071 | ||||
Contingent consideration provided in connection with acquisitions
|
— | 9,947 | ||||||
Accretion of redeemable non-controlling interests
|
596 | (8,101 | ) | |||||
Accrued redemption of units included in accrued liabilities and other current liabilities
|
— | 9,255 | ||||||
Issuance of Class A Common Units
|
— | 26,476 | ||||||
Issuance of promissory note
|
— | 15,885 | ||||||
Establishment and acquisition of non-controlling interests
|
|
|
3,087,301
|
|
|
|
—
|
|
Establishment of tax receivable agreements liability
|
|
|
32,081
|
|
|
|
—
|
|
7.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
|
Owned Sports
Properties |
|
|
Events, Experiences
& Rights |
|
|
Representation
|
|
|
Total
|
|
||||
Balance — December 31, 2020
|
$ | 2,674,038 | $ | 1,011,217 | $ | 495,924 | $ | 4,181,179 | ||||||||
Acquisitions
|
— | 223,779 | 1,005 | 224,784 | ||||||||||||
Impairment
|
— | (1,979 | ) | (1,791 | ) | (3,770 | ) | |||||||||
Foreign currency translation
and other
|
— | 273 | (2,872 | ) | (2,599 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance — June 30, 2021
|
$ | 2,674,038 | $ | 1,233,290 | $ | 492,266 | $ | 4,399,594 | ||||||||
|
|
|
|
|
|
|
|
Weighted Average
Estimated Useful Life (in years) |
Gross
Amount |
Accumulated
Amortization |
Carrying
Value |
|||||||||||||
Amortized:
|
||||||||||||||||
Trade names
|
17.4 | $ | 990,589 | $ | (260,959 | ) | $ | 729,630 | ||||||||
Customer and client relationships
|
6.7 | 1,327,550 | (960,750 | ) | 366,800 | |||||||||||
Internally developed technology
|
3.9 | 115,757 | (52,550 | ) | 63,207 | |||||||||||
Other
|
4.3 | 45,422 | (44,956 | ) | 466 | |||||||||||
|
|
|
|
|
|
|||||||||||
2,479,318 | (1,319,215 | ) | 1,160,103 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Indefinite-lived:
|
||||||||||||||||
Trade names
|
343,033 | — | 343,033 | |||||||||||||
Owned events
|
89,303 | — | 89,303 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total intangible assets
|
$ | 2,911,654 | $ | (1,319,215 | ) | $ | 1,592,439 | |||||||||
|
|
|
|
|
|
Weighted Average
Estimated Useful Life (in years) |
Gross
Amount |
Accumulated
Amortization |
Carrying
Value |
|||||||||||||
Amortized:
|
||||||||||||||||
Trade names
|
17.5 | $ | 970,595 | $ | (232,158 | ) | $ | 738,437 | ||||||||
Customer and client relationships
|
6.7 | 1,317,083 | (907,889 | ) | 409,194 | |||||||||||
Internally developed technology
|
4.4 | 61,539 | (46,126 | ) | 15,413 | |||||||||||
Other
|
4.3 | 45,317 | (44,251 | ) | 1,066 | |||||||||||
|
|
|
|
|
|
|||||||||||
2,394,534 | (1,230,424 | ) | 1,164,110 | |||||||||||||
|
|
|
|
|
|
|||||||||||
lndefinite-lived:
|
||||||||||||||||
Trade names
|
341,272 | — | 341,272 | |||||||||||||
Owned events
|
90,086 | — | 90,086 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total intangible assets
|
$ | 2,825,892 | $ | (1,230,424 | ) | $ | 1,595,468 | |||||||||
|
|
|
|
|
|
8.
|
INVESTMENTS
|
June 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
Equity method investments
|
$ | 221,225 | $ | 177,663 | ||||
Equity investments without readily determinable fair values
|
72,944 | 66,378 | ||||||
Equity investments with readily determinable fair values
|
869 | 7,037 | ||||||
|
|
|
|
|||||
Total investments
|
$ | 295,038 | $ | 251,078 | ||||
|
|
|
|
9.
|
FINANCIAL INSTRUMENTS
|
Foreign Currency
|
Foreign
Currency
Amount
|
US Dollar
Amount
|
Weighted Average
Exchange Rate Per
$1 USD
|
|||||||
British Pound Sterling
|
£35,500 | in exchange for | $ | 48,913 | £0.73 | |||||
Canadian Dollar
|
C$71,204 | in exchange for | $ | 55,774 | C$1.28 | |||||
Swedish Krona
|
kr7500 | in exchange for | $ | 878 | kr8.54 | |||||
Australian Dollar
|
AUD$14,300 | in exchange for | $ | 10,639 | AUD$1.34 | |||||
Singapore Dollar
|
S$2,600 | in exchange for | $ | 1,932 | S$1.35 |
10.
|
FAIR VALUE MEASUREMENTS
|
|
|
Fair Value Measurements as of
June 30, 2021
|
|
|||||||||||||
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
||||
Assets:
|
|
|
|
|
||||||||||||
Investments in equity securities with readily determinable fair values
|
$ | 869 | $ | — | $ | — | $ | 869 | ||||||||
Forward foreign exchange contracts
|
— | 598 | — | 598 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 869 | $ | 598 | $ | — | $ | 1,467 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$ | — | $ | — |
$
|
2
1,371
|
$ | 21,371 | ||||||||
Interest rate swaps
|
— | 79,546 | — | 79,546 | ||||||||||||
Forward foreign exchange contracts
|
— | 10,966 | — | 10,966 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 90,512 | $ | 21,371 | $ | 111,883 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements as of
December 31, 2020
|
||||||||||||||||
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Investments in equity securities with readily determinable fair values
|
$ | 7,037 | $ | — | $ | — | $ | 7,037 | ||||||||
Forward foreign exchange contracts
|
— | 1,794 | — | 1,794 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 7,037 | $ | 1,794 | $ | — | $ | 8,831 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$ | — | $ | — | $ | 9,026 | $ | 9,026 | ||||||||
Interest rate swaps
|
— | 107,909 | — | 107,909 | ||||||||||||
Forward foreign exchange contracts
|
— | 5,023 | — | 5,023 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 112,932 | $ | 9,026 | $ | 121,958 | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
2021
|
||||
Balance at December 31, 2020
|
$ | 9,026 | ||
Payments
|
(2,032 | ) | ||
Change in fair value
|
14,377 | |||
|
|
|||
Balance at June 30, 2021
|
$ | 21,371 | ||
|
|
11.
|
DEBT
|
June 30,
2021 |
December 31,
2020 |
|||||||
2014 Credit Facilities:
|
||||||||
First Lien Term Loan (due May 2025)
|
$ | 2,801,114 | $ | 3,074,230 | ||||
Revolving Credit Facility (due May 2024)
|
— | 163,057 | ||||||
Zuffa Credit Facilities:
|
||||||||
Zuffa First Lien Term Loan (due April 2026)
|
2,254,635 | 2,447,064 | ||||||
Other debt (2.47%-14.50% Notes due at various dates through 2030)
|
365,145 | 339,519 | ||||||
|
|
|
|
|||||
Total principal
|
5,420,894 | 6,023,870 | ||||||
Unamortized discount
|
(24,201 |
)
|
(40,982 | ) | ||||
Unamortized issuance costs
|
(46,105 | ) | (57,083 | ) | ||||
|
|
|
|
|||||
Total debt
|
5,350,588 | 5,925,805 | ||||||
Less: current portion
|
(94,845 | ) | (212,971 | ) | ||||
|
|
|
|
|||||
Total long-term debt
|
$ | 5,255,743 | $ | 5,712,834 | ||||
|
|
|
|
12.
|
MEMBERS’ EQUITY
|
13.
|
REDEEMABLE
NON-CONTROLLING
INTERESTS
|
14.
|
EARNINGS PER SHARE
|
|
|
Period Through
May 1 - June 30, 2021 |
|
|
Basic and diluted net loss per share
|
|
|||
Numerator
|
||||
Consolidated Net
Loss
|
$ | (518,352 | ) | |
Net loss attributable to NCI (Endeavor Operating Company Unit)
|
(168,469 | ) | ||
Net loss attributable to NCI (Endeavor Manager LLC Manager Unit)
|
(30,285 | ) | ||
|
|
|||
Net loss attributable to EGH common shareholders
|
$
|
(319,597 | ) | |
Denominator
|
||||
Weighted average Class A Common Shares outstanding - Basic
|
258,266,323 | |||
|
|
|||
Basic
and diluted
net
loss
per share
|
$
|
(1.24
|
)
|
|
|
|
Securities that are anti-dilutive this period
|
||||
Stock Option
s
|
3,196,364 | |||
Unvested
RSUs
|
7,479,941 | |||
Manager LLC Units
|
24,722,425 | |||
EOC
Common Units
|
141,245,780 | |||
EOC Profits Interest
|
|
|
15,256,825
|
|
15.
|
EQUITY BASED COMPENSATION
|
|
|
Time Vested RSUs
|
|
|
Market / Market and
Time Vested RSUs |
|
||||||||||
|
|
Units
|
|
|
Value *
|
|
|
Units
|
|
|
Value *
|
|
||||
Outstanding at January 1, 2021
|
— | $ | — | — | $ | — | ||||||||||
Granted
|
7,214,581 | $ | 30.51 | 3,117,354 | 28.08 | |||||||||||
Released
|
(728,103 |
)
|
$ | 30.81 |
|
(830,857 |
)
|
29.03 | ||||||||
Forfeited
|
(9,191 | ) | $ | 30.81 | (3,907 | ) | 27.07 | |||||||||
|
|
|
|
|||||||||||||
Outstanding at June 30, 2021
|
6,477,287 | $ | 30.48 | 2,282,590 | 27.74 | |||||||||||
Vested and releasable at June 30, 2021
|
|
|
1,279,936
|
|
|
$
|
30.53
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
* |
Weighted average grant date fair value
|
|
|
Stock Options
|
|
|||||
|
|
Options
|
|
|
Weighted
Average Exercise Price |
|
||
Outstanding at Janu
a
ry 1, 2021
|
— | $ | — | |||||
Granted
|
3,213,551 | $ | 24.00 | |||||
Forfeited or expired
|
(17,187 |
)
|
$ | 24.00 | ||||
|
|
|||||||
Outstanding at June 30, 2021
|
3,196,364 | $ | 24.00 | |||||
Vested and exercisable at June 30, 2021
|
|
|
563,367
|
|
|
$
|
24.00
|
|
|
|
|
|
Stock Options
|
|
|
Risk-free
i
nterest
r
ate
|
|
|
1.02
|
%
|
Expected
v
olatility
|
|
|
41.36
|
%
|
Expected
l
ife (in years)
|
|
|
5.73
|
|
Expected
d
ividend
y
ield
|
|
|
0.00
|
%
|
16.
|
INCOME TAXES
|
17.
|
REVENUE
|
|
Three Months Ended June 30, 2021
|
|
||||||||||||||
|
|
Owned Sports
Properties |
|
|
Events,
Experiences &
Rights
|
|
|
Representation
|
|
|
Total
|
|
||||
Media rights
|
$ | 162,938 | $ | 310,857 | $ | — | $ | 473,795 | ||||||||
Media production, distribution and content
|
1,240 | 92,698 | 133,275 | 227,213 | ||||||||||||
Events and performance
|
94,687 | 125,117 | — | 219,804 | ||||||||||||
Talent representation and licensing
|
— | — | 145,929 | 145,929 | ||||||||||||
Marketing
|
— | — | 49,028 | 49,028 | ||||||||||||
Eliminations
|
— | — | — | (4,497 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 258,865 | $ | 528,672 | $ | 328,232 | $ | 1,111,272 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Six Months Ended June 30, 2021
|
||||||||||||||||
Owned Sports
Properties |
Events,
Experiences &
Rights
|
Representation
|
Total
|
|||||||||||||
Media rights
|
$ | 340,591 | $ | 633,983 | $ | — | $ | 974,574 | ||||||||
Media production, distribution and content
|
3,427 | 177,411 | 192,198 | 373,036 | ||||||||||||
Events and performance
|
198,328 | 256,888 | — | 455,216 | ||||||||||||
Talent representation and licensing
|
— | — | 292,674 | 292,674 | ||||||||||||
Marketing
|
— | — | 92,269 | 92,269 | ||||||||||||
Eliminations
|
— | — | — | (6,915 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 542,346 | $ | 1,068,282 | $ | 577,141 | $ | 2,180,854 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Three Months Ended June 30, 2020
|
||||||||||||||||
Owned Sports
Properties |
Events, Experiences
& Rights |
Representation
|
Total
|
|||||||||||||
Media rights
|
$ | 103,226 | $ | 46,287 | $ | — | $ | 149,513 | ||||||||
Media production, distribution and content
|
1,064 | 37,864 | 81,258 | 120,186 | ||||||||||||
Events and performance
|
47,949 | 35,683 | — | 83,632 | ||||||||||||
Talent representation and licensing
|
— | — | 79,910 | 79,910 | ||||||||||||
Marketing
|
— | — | 31,672 | 31,672 | ||||||||||||
Eliminations
|
— | — | — | (1,999 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 152,239 | $ | 119,834 | $ | 192,840 | $ | 462,914 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Six Months Ended June 30, 2020
|
||||||||||||||||
Owned Sports
Properties |
Events, Experiences
& Rights |
Representation
|
Total
|
|||||||||||||
Media rights
|
$ | 226,040 | $ | 262,936 | $ | — | $ | 488,976 | ||||||||
Media production, distribution and content
|
3,200 | 113,762 | 150,999 | 267,961 | ||||||||||||
Events and performance
|
155,166 | 411,912 | — | 567,078 | ||||||||||||
Talent representation and licensing
|
— | — | 227,887 | 227,887 | ||||||||||||
Marketing
|
— | — | 106,688 | 106,688 | ||||||||||||
Eliminations
|
— | — | — | (5,279 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 384,406 | $ | 788,610 | $ | 485,574 | $ | 1,653,311 | ||||||||
|
|
|
|
|
|
|
|
Years Ending
December 31, |
||||
Remainder of 2021
|
$ | 871,028 | ||
2022
|
1,409,272 | |||
2023
|
1,252,400 | |||
2024
|
971,381 | |||
2025
|
911,711 | |||
Thereafter
|
578,354 | |||
|
|
|||
$ | 5,994,146 | |||
|
|
Description
|
|
December 31,
2020 |
|
|
Additions
|
|
|
Deductions
|
|
|
Acquisitions
|
|
|
Foreign
Exchange |
|
|
June 30,
2021 |
|
||||||
Deferred revenue - current
|
$ | 606,530 | $ | 1,008,801 | $ | (883,348 | ) | $ | 38,267 | $ | 3,963 | $ | 774,213 | |||||||||||
Deferred revenue - noncurrent
|
$ | 19,437 | $ | 6,468 | $ | (16,787 | ) |
$
|
18,564
|
$
|
—
|
$ | 27,682 |
18.
|
SEGMENT INFORMATION
|
Three months ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Owned Sports Properties
|
$ | 258,865 | $ | 152,239 | $ | 542,346 | $ | 384,406 | ||||||||
Events, Experiences & Rights
|
528,672 | 119,834 | 1,068,282 | 788,610 | ||||||||||||
Representation
|
328,232 | 192,840 | 577,141 | 485,574 | ||||||||||||
Eliminations
|
(4,497 | ) | (1,999 | ) | (6,915 | ) | (5,279 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consolidated revenue
|
$ | 1,111,272 | $ | 462,914 | $ | 2,180,854 | $ | 1,653,311 | ||||||||
|
|
|
|
|
|
|
|
Three months ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Owned Sports Properties
|
$ | 132,267 | $ | 65,502 | $ | 277,816 | $ | 167,796 | ||||||||
Events, Experiences & Rights
|
36,800 | (42,655 | ) | 75,850 | 26,468 | |||||||||||
Representation
|
61,685 | 52,036 | 123,168 | 120,649 | ||||||||||||
Corporate
|
(62,704 | ) | (29,046 | ) | (109,320 | ) | (83,538 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
168,048 | 45,837 | 367,514 | 231,375 | ||||||||||||
Reconciling items:
|
||||||||||||||||
Equity losses (income) losses of affiliates
|
1,158 | 1,759 | (2,176 | ) | 1,797 | |||||||||||
Interest expense, net
|
(83,836 | ) | (71,693 | ) | (152,187 | ) | (141,677 | ) | ||||||||
Depreciation and amortization
|
(69,161 | ) | (84,751 | ) | (136,397 | ) | (165,198 | ) | ||||||||
Equity-based compensation expense
|
(387,017 | ) | (9,204 | ) | (403,508 | ) | (16,975 | ) | ||||||||
Merger, acquisition and
earn-out
costs
|
(14,199 | ) | 859 | (25,184 | ) | (9,303 | ) | |||||||||
Certain legal costs
|
(574 | ) | (3,357 | ) | (4,526 | ) | (6,159 | ) | ||||||||
Restructuring, severance and impairment
|
(4,026 | ) | (195,305 | ) | (4,433 | ) | (212,247 | ) | ||||||||
Fair value adjustment - equity investments
|
5,905 | (2,950 | ) | 13,704 | (5,759 | ) | ||||||||||
COVID-19
related costs
|
— | (2,606 | ) | — | (12,113 | ) | ||||||||||
Other
|
(28,334 | ) | 19,610 | (41,911 | ) | 43,595 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes and equity losses of affiliate
s
|
$ | (412,036 | ) | $ | (301,801 | ) | $ | (389,104 | ) | $ | (292,664 | ) | ||||
|
|
|
|
|
|
|
|
19.
|
COMMITMENTS AND CONTINGENCIES
|
20.
|
RELATED PARTY TRANSACTIONS
|
|
|
June 30,
2021 |
|
|
December 31,
2020 |
|
||
Other current assets
|
$ | 9,071 | $ | 5,572 | ||||
Other assets
|
4,670 | 1,400 | ||||||
Current liabilities
|
— | 1,356 | ||||||
Other current liabilities
|
657 | 969 |
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
||||||||||
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
||||
Revenue
|
$ | 6,039 | $ | 3,093 |
$
|
13,039 | $ | 5,178 | ||||||||
Direct operating costs
|
724 | (80 | ) | 2,857 | 1,972 | |||||||||||
Selling, general and administrative expenses
|
3,304 | 1,445 | 4,430 | 10,261 | ||||||||||||
Other income, net
|
875 | 875 | 1,750 | 1,750 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenue
|
$ | 1,111,272 | $ | 462,914 | $ | 2,180,854 | $ | 1,653,311 | ||||||||
Operating expenses:
|
||||||||||||||||
Direct operating costs
|
570,955 | 172,643 | 1,117,347 | 853,927 | ||||||||||||
Selling, general and administrative expenses
|
785,101 | 302,047 | 1,166,214 | 691,018 | ||||||||||||
Insurance recoveries
|
(10,210 | ) | (16,841 | ) | (29,867 | ) | (33,960 | ) | ||||||||
Depreciation and amortization
|
69,161 | 84,751 | 136,397 | 165,198 | ||||||||||||
Impairment charges
|
3,770 | 172,232 | 3,770 | 175,282 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
1,418,777 | 714,832 | 2,393,861 | 1,851,465 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss
|
(307,505 | ) | (251,918 | ) | (213,007 | ) | (198,154 | ) | ||||||||
Other (expense) income:
|
||||||||||||||||
Interest expense, net
|
(83,836 | ) | (71,693 | ) | (152,187 | ) | (141,677 | ) | ||||||||
Loss on extinguishment of debt
|
(28,628 | ) | — | (28,628 | ) | — | ||||||||||
Other income, net
|
7,933 | 21,810 | 4,718 | 47,167 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes and equity losses of affiliates
|
(412,036 | ) | (301,801 | ) | (389,104 | ) | (292,664 | ) | ||||||||
Provision for (benefit from) income taxes
|
60,918 | (4,049 | ) | 66,003 | 44,555 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before equity losses of affiliates
|
(472,954 | ) | (297,752 | ) | (455,107 | ) | (337,219 | ) | ||||||||
Equity losses of affiliates, net of tax
|
(43,813 | ) | (198,013 | ) | (59,284 | ) | (209,807 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(516,767 | ) | (495,765 | ) | (514,391 | ) | (547,026 | ) | ||||||||
Net loss attributable to
non-controlling
interests
|
(190,354 | ) | (29,211 | ) | (163,108 | ) | (25,516 | ) | ||||||||
Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions
|
(6,816 | ) | (466,554 | ) | (31,686 | ) | (521,510 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Endeavor Group Holdings, Inc.
|
$ | (319,597 | ) | $ | — | $ | (319,597 | ) | $ | — | ||||||
|
|
|
|
|
|
|
|
• |
Owned Sports Properties
|
• |
Events, Experiences
& Rights
|
• |
Representation
|
• |
Owned Sports Properties
|
• |
Events, Experiences
& Rights
in-person
events in the first quarter 2021, resulting from
COVID-19.
|
• |
Representation
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenue:
|
||||||||||||||||
Owned Sports Properties
|
$ | 258,865 | $ | 152,239 | $ | 542,346 | $ | 384,406 | ||||||||
Events, Experiences & Rights
|
528,672 | 119,834 | 1,068,282 | 788,610 | ||||||||||||
Representation
|
328,232 | 192,840 | 577,141 | 485,574 | ||||||||||||
Eliminations
|
(4,497 | ) | (1,999 | ) | (6,915 | ) | (5,279 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
$ | 1,111,272 | $ | 462,914 | $ | 2,180,854 | $ | 1,653,311 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA:
|
||||||||||||||||
Owned Sports Properties
|
$ | 132,267 | $ | 65,502 | $ | 277,816 | $ | 167,796 | ||||||||
Events, Experiences & Rights
|
36,800 | (42,655 | ) | 75,850 | 26,468 | |||||||||||
Representation
|
61,685 | 52,036 | 123,168 | 120,649 | ||||||||||||
Corporate
|
(62,704 | ) | (29,046 | ) | (109,320 | ) | (83,538 | ) |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenue
|
$ | 258,865 | $ | 152,239 | $ | 542,346 | $ | 384,406 | ||||||||
Direct operating costs
|
$ | 81,079 | $ | 48,558 | $ | 173,294 | $ | 139,017 | ||||||||
Selling, general and administrative expenses
|
$ | 44,389 | $ | 35,980 | $ | 92,102 | $ | 75,421 | ||||||||
Adjusted EBITDA
|
$ | 132,267 | $ | 65,502 | $ | 277,816 | $ | 167,796 | ||||||||
Adjusted EBITDA margin
|
51.1 | % | 43.0 | % | 51.2 | % | 43.7 | % |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenue
|
$ | 528,672 |
$
|
119,834 | $ | 1,068,282 |
$
|
788,610 | ||||||||
Direct operating costs
|
$ | 389,533 | $ | 93,254 | $ | 811,069 | $ | 606,998 | ||||||||
Selling, general and administrative expenses
|
$ | 112,803 | $ | 88,237 | $ | 213,074 | $ | 199,108 | ||||||||
Adjusted EBITDA
|
$ | 36,800 | $ | (42,655 | ) | $ | 75,850 | $ | 26,468 | |||||||
Adjusted EBITDA margin
|
7.0 | % | -35.6 | % | 7.1 | % | 3.4 | % |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenue
|
$ | 328,232 | $ | 192,840 | $ | 577,141 | $ | 485,574 | ||||||||
Direct operating costs
|
$ | 104,842 | $ | 32,524 | $ | 139,901 | $ | 101,422 | ||||||||
Selling, general and administrative expenses
|
$ | 161,693 | $ | 108,603 | $ | 313,851 | $ | 263,829 | ||||||||
Adjusted EBITDA
|
$ | 61,685 | $ | 52,036 | $ | 123,168 | $ | 120,649 | ||||||||
Adjusted EBITDA margin
|
18.8 | % | 27.0 | % | 21.3 | % | 24.8 | % |
Three Months Ended June 30,
|
Three Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Adjusted EBITDA
|
$ | (62,704 | ) | $ | (29,046 | ) | $ | (109,320 | ) | $ | (83,538 | ) |
• |
they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;
|
• |
Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
|
• |
although depreciation and amortization are
non-cash
charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Net Income do not reflect any cash requirement for such replacements or improvements; and
|
• |
they are not adjusted for all
non-cash
income or expense items that are reflected in our statements of cash flows.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net loss
|
$ | (516,767 | ) | $ | (495,765 | ) | $ | (514,391 | ) | $ | (547,026 | ) | ||||
Provision for (benefit from) income taxes
|
60,918 | (4,049 | ) | 66,003 | 44,555 | |||||||||||
Interest expense, net
|
83,836 | 71,693 | 152,187 | 141,677 | ||||||||||||
Depreciation and amortization
|
69,161 | 84,751 | 136,397 | 165,198 | ||||||||||||
Equity-based compensation expense
(l)
|
387,017 | 9,204 | 403,508 | 16,975 | ||||||||||||
Merger, acquisition and
earn-out
costs
(2)
|
14,199 | (859 | ) | 25,184 | 9,303 | |||||||||||
Certain legal costs
(3)
|
574 | 3,357 | 4,526 | 6,159 | ||||||||||||
Restructuring, severance and impairment
(4)
|
4,026 | 195,305 | 4,433 | 212,247 | ||||||||||||
Fair value adjustment - Droga5
(5)
|
— | 473 | — | 473 | ||||||||||||
Fair value adjustment - equity investments
(5)
|
(5,905 | ) | 2,950 | (13,704 | ) | 5,759 | ||||||||||
Equity method losses - Learfield IMG College
(6)
|
42,655 | 195,781 | 61,460 | 207,537 | ||||||||||||
COVID-19 related costs
(7)
|
— | 2,193 | — | 2,403 | ||||||||||||
Other
(8)
|
28,334 | (19,610 | ) | 41,911 | (43,595 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$ | 168,048 | $ | 45,424 | $ | 367,514 | $ | 221,665 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss margin
|
(46.5 | %) | (107.1 | %) | (23.6 | %) | (33.1 | %) | ||||||||
Adjusted EBITDA margin
|
15.1 | % | 9.8 | % | 16.9 | % | 13.4 | % |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
(in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net loss
|
$ | (516,767 | ) | $ | (495,765 | ) | $ | (514,391 | ) | $ | (547,026 | ) | ||||
Net loss attributable to
non-controlling
interests
|
190,354 | 29,211 | 163,108 | 25,516 | ||||||||||||
Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions
|
6,816 | — | 31,686 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Endeavor Group Holdings, Inc
|
(319,597 | ) | — | (319,597 | ) | — | ||||||||||
Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions
|
— | (466,554 | ) | — | (521,510 | ) | ||||||||||
Amortization
|
46,649 | 63,494 | 92,377 | 123,458 | ||||||||||||
Equity-based compensation expense
(l)
|
387,017 | 9,204 | 403,508 | 16,975 | ||||||||||||
Merger, acquisition and
earn-out
costs
(2)
|
14,199 | (859 | ) | 25,184 | 9,303 | |||||||||||
Certain legal costs
(3)
|
574 | 3,357 | 4,526 | 6,159 | ||||||||||||
Restructuring, severance and impairment
(4)
|
4,026 | 195,305 | 4,433 | 212,247 | ||||||||||||
Fair value adjustment - Droga5
|
— | 473 | — | 473 | ||||||||||||
Fair value adjustment - equity investments
(5)
|
(5,905 | ) | 2,950 | (13,704 | ) | 5,759 | ||||||||||
Equity method losses - Learfield IMG College
(6)
|
42,655 | 195,781 | 61,460 | 207,537 | ||||||||||||
COVID-19 related costs
(7)
|
— | 2,193 | — | 2,403 | ||||||||||||
Other
(8)
|
28,334 | (19,610 | ) | 41,911 | (43,595 | ) | ||||||||||
Tax effects of adjustments
(9)
|
77,550 | (6,354 | ) | 71,231 | (4,988 | ) | ||||||||||
Valuation allowance and other tax items
(l0)
|
17,608 | — | 17,608 | 32,338 | ||||||||||||
Adjustments allocated to
non-controlling
interests
(l1)
|
(241,635 | ) | (16,328 | ) | (337,462 | ) | (39,693 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted Net Income (Loss)
|
$ | 51,475 | $ | (36,948 | ) | $ | 51,475 | $ | 6,866 | |||||||
|
|
|
|
|
|
|
|
(1) |
Equity-based compensation represents primarily
non-cash
compensation expense associated with our equity-based compensation plans.
|
(2) |
Includes (i) certain costs of professional advisors related to mergers, acquisitions, dispositions or joint ventures and (ii) fair value adjustments for contingent consideration liabilities related to acquired businesses and compensation expense for deferred consideration associated with selling shareholders that are required to remain our employees.
|
(3) |
Includes costs related to certain litigation or regulatory matters in each of our segments and Corporate.
|
(4) |
Includes certain costs related to our restructuring activities and
non-cash
impairment charges.
|
(5) |
Includes the net change in fair value for certain equity investments with and without readily determinable fair values, based on observable price changes.
|
(6) |
Relates to equity method losses, including impairment charges, from our investment in Learfield IMG College following the merger of our IMG College business with Learfield in December 2018.
|
(7) |
Includes
COVID-19
related costs that are
non-recurring
and incremental costs that would have otherwise not been incurred. Such adjustment for the three months ended June 30, 2020 does not include the
write-off
of $0.4 million of deferred event costs, net of insurance recoveries, which is adjusted in our Events, Experiences & Rights segment profitability measure. Such adjustment for the six months ended June 30, 2020 does not include the
write-off
of $10 million of deferred event costs, net of insurance recoveries, which is adjusted in our Events, Experiences & Rights segment profitability measure.
|
(8) |
For the three months ended June 30, 2021, other costs were comprised primarily of approximately $29 million related to a loss on debt extinguishment, which related to Corporate, and a gain of approximately $2 million related to
non-cash
fair value adjustments of embedded foreign currency derivatives, which related primarily to our Events, Experiences & Rights segment.
|
(9) |
Reflects the tax impacts with respect to each adjustment noted above by applying the annual effective tax rate, as applicable.
|
(10) |
Such items for the three and six months ended June 30, 2021 includes $7.4 million of deferred tax liabilities associated with indefinite lived intangibles recorded as a result of the IPO and tax expense of $10.2 million related to a change in tax rate in the United Kingdom. Such items for the six months ended June 30, 2020 relate to a $32.3 million tax expense recorded as a result of acquisitions and subsequent tax restructurings.
|
(11) |
Reflects the share of the adjustments noted above that are allocated to our
non-controlling
interests, net of tax.
|
Six Months Ended June 30,
|
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Net loss, adjusted for
non-cash
items
|
$ | 275,246 | $ | 52,768 | ||||
Changes in working capital
|
103,837 | 266,656 | ||||||
Changes in
non-current
assets and liabilities
|
(501,282 | ) | (117,519 | ) | ||||
|
|
|
|
|||||
Net cash (used in) provided by operating activities
|
$ | (122,199 | ) | $ | 201,905 | |||
Net cash used in investing activities
|
$ | (372,565 | ) | $ | (290,681 | ) | ||
Net cash provided by financing activities
|
$ | 397,498 | $ | 550,673 |
# |
Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
|
ENDEAVOR GROUP HOLDINGS, INC.
|
||||||
Date: August 17, 2021 | By: | /s/ Ariel Emanuel | ||||
Ariel Emanuel
|
||||||
Chief Executive Officer
|
||||||
(Principal Executive Officer)
|
Date: August 17, 2021 | By: | /s/ Jason Lublin | ||||
Jason Lublin
|
||||||
Chief Financial Officer
|
||||||
(Principal Financial Officer)
|
Exhibit 31.1
CERTIFICATIONS
I, Ariel Emanuel, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q/A for the quarterly period ended June 30, 2021 of Endeavor Group Holdings, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
[omitted]; |
(c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 17, 2021 |
By: |
/s/ Ariel Emanuel |
||
Ariel Emanuel | ||||
Chief Executive Officer (principal executive officer) |
Exhibit 31.2
CERTIFICATIONS
I, Jason Lublin, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q/A for the quarterly period ended June 30, 2021 of Endeavor Group Holdings, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
[omitted]; |
(c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 17, 2021 |
By: | /s/ Jason Lublin | ||||
Jason Lublin | ||||||
Chief Financial Officer (principal financial officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Endeavor Group Holdings, Inc. (the Company) on Form 10-Q/A for the quarterly period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 17, 2021 | By: | /s/ Ariel Emanuel | ||||
Ariel Emanuel | ||||||
Chief Executive Officer | ||||||
(principal executive officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Endeavor Group Holdings, Inc. (the Company) on Form 10-Q/A for the quarterly period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 17, 2021 | By: | /s/ Jason Lublin | ||||
Jason Lublin | ||||||
Chief Financial Officer | ||||||
(principal financial officer) |