Table of Contents 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 September 30, 2022 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 (Stat ...

Endeavor Group Holdings, Inc. (NYSE:EDR) Q2 2022 Earnings Conference Call August 12, 2022 5:00 PM ET Company Representatives Ariel Emanuel - Chief Executive Officer & Director Jason Lublin - Chief Financial Officer James Marsh - SVP, Head of Investor Relations Conference Call Participants Ben Swinburne - Morgan Stanley John Hodulik - UBS Stephen Laszczyk - Goldman Sachs Kutgun Maral - RBC Jessica Reif Ehrlich - Bank of America Bryan Kraft - Deutsche Bank David Joyce - Barclays Operator Ladies and gentlemen, ...

FORM 10-Q General Information [General Filing Details](index=1&type=section&id=General%20Filing%20Details) This section details Endeavor Group Holdings, Inc.'s Form 10-Q filing for Q2 2022, including its non-accelerated filer status and outstanding common stock classes - The filing is a Quarterly Report on Form 10-Q for the period ended June 30, 2022[2](index=2&type=chunk) - The registrant, Endeavor Group Holdings, Inc., is classified as a **non-accelerated filer**[2](index=2&type=chunk)[3](index=3&type=chunk) Outstanding Shares (as of July 31, 2022) | Class of Stock | Shares Outstanding | | :------------- | :----------------- | | Class A Common | 285,838,306 | | Class X Common | 183,847,173 | | Class Y Common | 235,001,875 | Part I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Endeavor Group Holdings, Inc.'s unaudited consolidated financial statements for Q2 2022, covering balance sheets, operations, comprehensive income, equity, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets provide a snapshot of the company's financial position as of June 30, 2022, and December 31, 2021, showing total assets, liabilities, redeemable interests, and shareholders' equity Balance Sheet Highlights (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change (vs. Dec 31, 2021) | | :----------------------------------- | :------------ | :---------------- | :------------------------ | | Total Assets | $11,736,618 | $11,434,517 | +$302,101 | | Total Liabilities | $8,611,269 | $9,103,191 | -$491,922 | | Total Shareholders' Equity | $3,076,719 | $2,121,463 | +$955,256 | - Cash and cash equivalents increased by **$263,017 thousand** (from $1,560,995 thousand to $1,824,012 thousand) as of June 30, 2022, compared to December 31, 2021[10](index=10&type=chunk) - Assets held for sale decreased significantly by **$865,943 thousand** (from $885,633 thousand to $19,690 thousand) as of June 30, 2022, compared to December 31, 2021[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail the company's revenues, operating expenses, and net income (loss) for the three and six months ended June 30, 2022, and 2021, highlighting a significant shift from net loss to net income year-over-year Financial Performance (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :------------ | :----------- | | Revenue | $1,312,515 | $1,111,272 | +18.1% | | Total operating expenses | $1,161,496 | $1,418,777 | -18.2% | | Operating income (loss) | $151,019 | $(307,505) | N/A (swing) | | Net income (loss) | $42,220 | $(516,767) | N/A (swing) | | Net income (loss) attributable to EGH, Inc. | $25,806 | $(319,597) | N/A (swing) | | Basic EPS (Class A) | $0.09 | $(1.24) | N/A (swing) | | Diluted EPS (Class A) | $0.09 | $(1.24) | N/A (swing) | Financial Performance (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :------------ | :----------- | | Revenue | $2,786,278 | $2,180,854 | +27.8% | | Total operating expenses | $2,461,344 | $2,393,861 | +2.8% | | Operating income (loss) | $324,934 | $(213,007) | N/A (swing) | | Net income (loss) | $559,886 | $(514,391) | N/A (swing) | | Net income (loss) attributable to EGH, Inc. | $345,352 | $(319,597) | N/A (swing) | | Basic EPS (Class A) | $1.27 | $(1.24) | N/A (swing) | | Diluted EPS (Class A) | $1.24 | $(1.24) | N/A (swing) | - The company experienced a significant swing from operating loss to operating income and net loss to net income for both the three and six months ended June 30, 2022, compared to the prior year[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The consolidated statements of comprehensive income (loss) present the net income (loss) along with other comprehensive income (loss) items, such as unrealized gains/losses on hedges and foreign currency translation adjustments, for the three and six months ended June 30, 2022, and 2021 Comprehensive Income (Loss) (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | | :------------------------------------------ | :---------- | :------------ | | Net income (loss) | $559,886 | $(514,391) | | Total comprehensive income (loss), net of tax | $595,851 | $(488,342) | | Comprehensive income (loss) attributable to EGH, Inc. | $367,468 | $(315,696) | - For the six months ended June 30, 2022, unrealized gains on interest rate swaps contributed **$62.2 million** to other comprehensive income, while foreign currency translation adjustments resulted in a loss of **$(39.8) million**[18](index=18&type=chunk) [Consolidated Statements of Redeemable Interests and Shareholders'/Members' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Redeemable%20Interests%20and%20Shareholders'%2FMembers'%20Equity) These statements detail the changes in redeemable non-controlling interests and shareholders' equity for Endeavor Group Holdings, Inc. for the three and six months ended June 30, 2022, and 2021, reflecting impacts from comprehensive income, equity-based compensation, stock issuances, and acquisitions/divestitures - Total Shareholders' Equity increased by **$955,256 thousand**, from $2,121,463 thousand as of December 31, 2021, to $3,076,719 thousand as of June 30, 2022[12](index=12&type=chunk)[24](index=24&type=chunk) - Redeemable non-controlling interests decreased significantly from **$209,863 thousand** as of December 31, 2021, to **$48,630 thousand** as of June 30, 2022[12](index=12&type=chunk)[24](index=24&type=chunk) - For the six months ended June 30, 2022, comprehensive income attributable to EGH, Inc. was **$367,468 thousand**, and equity-based compensation contributed **$91,798 thousand**[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows present the cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2022, and 2021, showing a significant improvement in operating cash flow and a shift from cash used to cash provided in investing activities Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :------------ | :----------- | | Net cash provided by (used in) operating activities | $213,046 | $(122,199) | +$335,245 | | Net cash provided by (used in) investing activities | $123,154 | $(372,565) | +$495,719 | | Net cash provided by financing activities | $7,196 | $397,498 | -$390,302 | | Increase (decrease) in cash, cash equivalents and restricted cash | $355,875 | $(96,211) | +$452,086 | | Cash, cash equivalents and restricted cash at end of period | $2,148,911 | $1,094,122 | +$1,054,789 | - Operating activities improved by **$335.2 million**, shifting from cash used in 2021 to cash provided in 2022, primarily due to net income adjusted for non-cash items[152](index=152&type=chunk) - Investing activities improved significantly, shifting from **$372.6 million** cash used in 2021 to **$123.2 million** cash provided in 2022, largely driven by **$649.7 million** in proceeds from the divestiture of the restricted Endeavor Content business[152](index=152&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and disclosures for the consolidated financial statements, covering the company's business, accounting policies, recent pronouncements, acquisitions, debt, and other financial instruments [Note 1. DESCRIPTION OF BUSINESS AND ORGANIZATION](index=15&type=section&id=Note%201.%20DESCRIPTION%20OF%20BUSINESS%20AND%20ORGANIZATION) Endeavor Group Holdings, Inc. (EGH) was formed in January 2019 as a holding company for its IPO and related transactions. EGH, through its subsidiaries Endeavor Manager, LLC and Endeavor Operating Company, LLC (EOC), operates as a global sports and entertainment company, controlling all business affairs of Endeavor - Endeavor Group Holdings, Inc. (EGH) was incorporated in January 2019 as a holding company for its initial public offering (IPO) and related transactions[33](index=33&type=chunk) - EGH operates as a global sports and entertainment company, managing and controlling the business and affairs of Endeavor Operating Company (EOC) through Endeavor Manager, LLC[33](index=33&type=chunk) - The company closed its IPO on May 3, 2021, and EOC subsequently acquired 100% of the equity interests of Zuffa (Ultimate Fighting Championship)[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=Note%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The interim consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim reporting, with certain disclosures condensed or omitted. Management's estimates and assumptions, particularly for revenue recognition, fair value of acquisitions, goodwill impairment, and income taxes, are crucial and subject to change - Interim consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim financial information, with certain disclosures condensed or omitted[36](index=36&type=chunk) - Significant accounting policies involve subjective management estimates and assumptions, including those related to revenue recognition, fair value of acquired assets and liabilities, goodwill and intangible asset impairment, and income taxes[37](index=37&type=chunk) [Note 3. RECENT ACCOUNTING PRONOUNCEMENTS](index=15&type=section&id=Note%203.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) The company adopted ASU 2020-06 with no material effect, is assessing ASU 2020-04, and expects no material impact from ASU 2022-01, 2022-02, and 2022-03 upon their fiscal year 2023 effective dates - ASU 2020-06 (Accounting for Convertible Instruments and Contracts in an Entity's Own Equity) was adopted and did not have a material effect on the company's financial position or results of operations[39](index=39&type=chunk) - The company is assessing the impact of ASU 2020-04 (Reference Rate Reform) and expects ASU 2022-01 (Fair Value Hedging) and ASU 2022-02 (Credit Losses) to not have a material effect upon adoption in fiscal year 2023[40](index=40&type=chunk) [Note 4. ACQUISITIONS AND DIVESTITURE](index=16&type=section&id=Note%204.%20ACQUISITIONS%20AND%20DIVESTITURE) In 2022, Endeavor acquired PDL Clubs and the Mutua Madrid Open, while divesting 80% of its restricted Endeavor Content business for **$666.3 million** cash, resulting in a **$463.6 million** net gain - In January 2022, the company acquired four additional Professional Development League (PDL) clubs for **$64.2 million** cash, and in April 2022, acquired the Mutua Madrid Open tennis tournament for **$386.1 million** cash at closing, plus deferred and contingent consideration[41](index=41&type=chunk) - The sale of 80% of the restricted Endeavor Content business closed in January 2022, generating **$666.3 million** in cash proceeds and resulting in a net gain of **$463.6 million**, including a **$121.1 million** gain from remeasuring the retained 20% interest[44](index=44&type=chunk) - For the six months ended June 30, 2022, the four PDL Clubs and Madrid Open acquisitions contributed **$72.2 million** in consolidated revenue and **$33.3 million** in net income[41](index=41&type=chunk) [Note 5. SUPPLEMENTARY DATA](index=18&type=section&id=Note%205.%20SUPPLEMENTARY%20DATA) This note provides a summary of accrued liabilities and changes in the allowance for doubtful accounts. Accrued liabilities primarily consist of operating expenses, payroll, bonuses, and benefits. The allowance for doubtful accounts increased to $62.6 million as of June 30, 2022 Accrued Liabilities (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------- | :------------ | :---------------- | | Accrued operating expenses | $251,146 | $302,024 | | Payroll, bonuses and benefits | $167,585 | $162,688 | | Other | $71,846 | $59,349 | | **Total** | **$490,577** | **$524,061** | - The allowance for doubtful accounts increased from **$57.1 million** at the beginning of 2022 to **$62.6 million** as of June 30, 2022[49](index=49&type=chunk) Supplemental Cash Flow Information (Six Months Ended June 30, in thousands) | Item | 2022 | 2021 | | :------------------------------------------ | :---------- | :---------- | | Cash paid for interest | $98,314 | $102,393 | | Cash payments for income taxes | $19,729 | $20,976 | | Investment in affiliates retained from a business divestiture | $196,345 | — | [Note 6. GOODWILL AND INTANGIBLE ASSETS](index=19&type=section&id=Note%206.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill increased slightly to $4.54 billion as of June 30, 2022, primarily due to acquisitions in Owned Sports Properties and Events, Experiences & Rights segments. Total intangible assets, net, also increased to $1.92 billion, with significant indefinite-lived assets in trade names and owned events Goodwill Carrying Value (in thousands) | Segment | Dec 31, 2021 | June 30, 2022 | Change | | :------------------------- | :----------- | :------------ | :----- | | Owned Sports Properties | $2,741,048 | $2,766,519 | +$25,471 | | Events, Experiences & Rights | $1,266,144 | $1,275,774 | +$9,630 | | Representation | $499,362 | $498,367 | -$995 | | **Total** | **$4,506,554** | **$4,540,660** | **+$34,106** | Intangible Assets (June 30, 2022, in thousands) | Category | Gross Amount | Accumulated Amortization | Carrying Value | Weighted Average Estimated Useful Life (years) | | :-------------------------- | :----------- | :----------------------- | :------------- | :--------------------------------------------- | | **Amortized:** | | | | | | Trade names | $978,100 | $(315,967) | $662,133 | 17.3 | | Customer & client relationships | $1,325,181 | $(1,035,631) | $289,550 | 6.3 | | Internally developed technology | $121,873 | $(78,838) | $43,035 | 3.5 | | Other | $177,723 | $(47,681) | $130,042 | 15.3 | | **Total Amortized** | **$2,602,877** | **$(1,478,117)** | **$1,124,760** | | | **Indefinite-lived:** | | | | | | Trade names | $327,070 | — | $327,070 | N/A | | Owned events | $464,068 | — | $464,068 | N/A | | **Total Intangible Assets** | **$3,394,015** | **$(1,478,117)** | **$1,915,898** | | - Intangible asset amortization expense was **$84.3 million** for the six months ended June 30, 2022, a decrease from **$92.4 million** in the prior year[55](index=55&type=chunk) [Note 7. INVESTMENTS](index=20&type=section&id=Note%207.%20INVESTMENTS) Total investments increased to $483.6 million as of June 30, 2022, primarily driven by growth in equity method investments and equity investments without readily determinable fair values. Equity method investments include the retained 20% interest in the restricted Endeavor Content business and Learfield IMG College, both of which contributed to equity losses Total Investments (in thousands) | Category | June 30, 2022 | December 31, 2021 | Change | | :------------------------------------------ | :------------ | :---------------- | :----- | | Equity method investments | $354,894 | $196,423 | +$158,471 | | Equity investments without readily determinable fair values | $128,140 | $101,124 | +$27,016 | | Equity investments with readily determinable fair values | $556 | $665 | -$109 | | **Total Investments** | **$483,590** | **$298,212** | **+$185,378** | - Equity method investments primarily include the 20% retained interest in the restricted Endeavor Content business and approximately 42% ownership in Learfield IMG College[57](index=57&type=chunk) - The company's share of net loss from Learfield IMG College for the six months ended June 30, 2022, was **$60.9 million**[57](index=57&type=chunk) [Note 8. FINANCIAL INSTRUMENTS](index=21&type=section&id=Note%208.%20FINANCIAL%20INSTRUMENTS) Endeavor uses forward foreign exchange contracts and interest rate swaps to hedge currency and interest rate risks. For the six months ended June 30, 2022, the company recognized gains on interest rate swaps in OCI and reclassified losses to net income, while foreign exchange contracts not designated as hedges resulted in net losses - The company uses forward foreign exchange contracts to hedge foreign currency risks and interest rate swaps to hedge interest rate risks on its debt[61](index=61&type=chunk) - For the six months ended June 30, 2022, interest rate swaps resulted in **$62.2 million** in gains recognized in accumulated other comprehensive income (loss) and **$12.4 million** in losses reclassified to net income (loss)[61](index=61&type=chunk) - Forward foreign exchange contracts not designated as cash flow hedges resulted in a net loss of **$3.1 million** for the six months ended June 30, 2022[61](index=61&type=chunk) [Note 9. FAIR VALUE MEASUREMENTS](index=21&type=section&id=Note%209.%20FAIR%20VALUE%20MEASUREMENTS) The company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy. As of June 30, 2022, equity securities with readily determinable fair values are Level 1, while interest rate swaps and forward foreign exchange contracts are Level 2. Contingent consideration liabilities are Level 3 Fair Value Measurements (June 30, 2022, in thousands) | Category | Level I | Level II | Level III | Total | | :------------------------------------------ | :------ | :------- | :-------- | :---- | | **Assets:** | | | | | | Investments in equity securities with readily determinable fair values | $556 | — | — | $556 | | Interest rate swaps | — | $27,310 | — | $27,310 | | **Total Assets** | **$556** | **$27,310** | **—** | **$27,866** | | **Liabilities:** | | | | | | Contingent consideration | — | — | $3,561 | $3,561 | | Interest rate swaps | — | $978 | — | $978 | | Forward foreign exchange contracts | — | $11,262 | — | $11,262 | | **Total Liabilities** | **—** | **$12,240** | **$3,561** | **$15,801** | - Contingent consideration liabilities decreased from **$26.9 million** as of December 31, 2021, to **$3.6 million** as of June 30, 2022, primarily due to **$26.2 million** in payments, including the settlement with 32 Equity LLC[67](index=67&type=chunk)[68](index=68&type=chunk) [Note 10. DEBT](index=23&type=section&id=Note%2010.%20DEBT) Endeavor's total debt as of June 30, 2022, was $5.68 billion, primarily consisting of First Lien Term Loans under the 2014 Credit Facilities and Zuffa Credit Facilities. The company was in compliance with all financial debt covenants. Substantially all of the subsidiaries' net assets are restricted from transfer to EGH due to debt covenants Outstanding Debt (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------------------------ | :------------ | :---------------- | | First Lien Term Loan (2014 Credit Facilities) | $2,770,982 | $2,786,048 | | Zuffa First Lien Term Loan (Zuffa Credit Facilities) | $2,825,267 | $2,840,767 | | Other debt | $149,996 | $159,010 | | **Total principal** | **$5,746,245** | **$5,785,825** | | **Total debt** | **$5,683,773** | **$5,713,736** | - The company was in compliance with all financial debt covenants for its 2014 Credit Facilities, Zuffa Credit Facilities, and On Location Revolver as of June 30, 2022[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[78](index=78&type=chunk) - Substantially all of the subsidiaries' net assets are effectively restricted from being transferred to EGH due to covenants in the 2014 Credit Facilities and Zuffa Credit Facilities[79](index=79&type=chunk) [Note 11. REDEEMABLE NON-CONTROLLING INTERESTS](index=24&type=section&id=Note%2011.%20REDEEMABLE%20NON-CONTROLLING%20INTERESTS) Endeavor significantly reduced its redeemable non-controlling interests in Q2 2022 through transactions related to On Location (OLE Parent) and Endeavor China, converting these interests into Class A common stock or EOC common units, making both entities indirect wholly-owned subsidiaries. Redeemable interests remain for Zuffa Russia Subsidiary and Frieze - In April 2022, On Location (OLE Parent) became an indirect wholly-owned subsidiary of EOC after 32 Equity exchanged its non-controlling interests for EOC common units and Class X common stock, and the company settled premium contingent consideration for **$24.0 million** cash[80](index=80&type=chunk) - Endeavor China also became an indirect wholly-owned subsidiary of EOC in April 2022, following the issuance of 5,693,774 Class A common shares (valued at **$158.5 million**) in exchange for non-controlling partnership interests[81](index=81&type=chunk) - Redeemable non-controlling interests decreased from **$209,863 thousand** as of December 31, 2021, to **$48,630 thousand** as of June 30, 2022[12](index=12&type=chunk) [Note 12. EARNINGS PER SHARE](index=25&type=section&id=Note%2012.%20EARNINGS%20PER%20SHARE) The company reported basic and diluted earnings per share of $0.09 for the three months ended June 30, 2022, and $1.27 (basic) / $1.24 (diluted) for the six months ended June 30, 2022, a significant improvement from losses in the prior year. The calculation includes adjustments for non-controlling interests and potential dilutive securities Earnings Per Share (Three Months Ended June 30) | Metric | 2022 | 2021 | | :------------------------------------------ | :---------- | :------------ | | Basic EPS (Class A) | $0.09 | $(1.24) | | Diluted EPS (Class A) | $0.09 | $(1.24) | | Weighted average Class A Common Shares outstanding - Basic | 281,623,228 | 258,266,323 | | Weighted average shares used in computing diluted EPS | 449,733,965 | 258,266,323 | Earnings Per Share (Six Months Ended June 30) | Metric | 2022 | 2021 | | :------------------------------------------ | :---------- | :------------ | | Basic EPS (Class A) | $1.27 | $(1.24) | | Diluted EPS (Class A) | $1.24 | $(1.24) | | Weighted average Class A Common Shares outstanding - Basic | 275,092,484 | 258,266,323 | | Weighted average shares used in computing diluted EPS | 446,419,024 | 258,266,323 | - Securities that were anti-dilutive for the three months ended June 30, 2022, included **4.2 million Stock Options**, **4.1 million Unvested RSUs**, and **12.6 million EOC Profits Interest & Phantom Units**[89](index=89&type=chunk) [Note 13. INCOME TAXES](index=26&type=section&id=Note%2013.%20INCOME%20TAXES) EGH is subject to corporate income tax on its share of EOC's taxable income, while EOC is treated as a partnership. For the six months ended June 30, 2022, the company recorded an income tax benefit of $14.5 million, primarily due to the release of a $53.7 million valuation allowance on deferred tax assets related to expected realization of tax benefits from TRA liabilities - EGH is subject to corporate income tax on its allocable share of Endeavor Operating Company's (EOC) taxable income, while EOC is treated as a partnership for U.S. federal income tax purposes[90](index=90&type=chunk) Income Tax Provision (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | | :------------------------------------------ | :---------- | :---------- | | Provision for (benefit from) income taxes | $(14,535) | $66,003 | | Pretax income (loss) | $605,873 | $(389,104) | | Effective tax rate | (2.4%) | (17.0%) | - The income tax benefit for the six months ended June 30, 2022, was primarily due to the release of a **$53.7 million** valuation allowance on deferred tax assets, driven by the expected realization of certain tax benefits in connection with recording a Tax Receivable Agreements (TRA) liability[90](index=90&type=chunk)[91](index=91&type=chunk) [Note 14. REVENUE](index=27&type=section&id=Note%2014.%20REVENUE) Endeavor's revenue for the six months ended June 30, 2022, increased significantly to $2.79 billion, driven by strong performance across all segments, particularly Events, Experiences & Rights, as live events returned. Media rights and events/performance are the largest revenue sources Total Consolidated Revenue (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :---------- | :----------- | | Total Revenue | $2,786,278 | $2,180,854 | +27.8% | Revenue by Primary Source (Six Months Ended June 30, 2022, in thousands) | Revenue Source | Owned Sports Properties | Events, Experiences & Rights | Representation | Total | | :------------------------------------------ | :---------------------- | :--------------------------- | :------------- | :---------- | | Media rights | $329,033 | $337,197 | — | $666,230 | | Media production, distribution and content | $4,124 | $163,999 | $137,753 | $305,876 | | Events and performance | $295,462 | $952,489 | — | $1,247,951 | | Talent representation and licensing | — | — | $421,559 | $421,559 | | Marketing | — | — | $155,964 | $155,964 | | **Total (excluding eliminations)** | **$628,619** | **$1,453,685** | **$715,276** | **$2,797,680** | Remaining Performance Obligations (Future Revenue, in thousands) | Period | Amount | | :------------------------- | :---------- | | Remainder of 2022 | $833,850 | | 2023 | $1,572,487 | | 2024 | $1,199,045 | | 2025 | $1,079,046 | | 2026 | $200,015 | | Thereafter | $586,687 | | **Total** | **$5,471,130** | [Note 15. SEGMENT INFORMATION](index=28&type=section&id=Note%2015.%20SEGMENT%20INFORMATION) Endeavor operates in three reportable segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. All segments showed significant revenue and Adjusted EBITDA growth for both the three and six months ended June 30, 2022, reflecting a strong recovery from COVID-19 impacts Total Consolidated Revenue by Segment (Six Months Ended June 30, in thousands) | Segment | 2022 | 2021 | Change (YoY) | | :--------------------------- | :---------- | :---------- | :----------- | | Owned Sports Properties | $628,619 | $542,346 | +15.9% | | Events, Experiences & Rights | $1,453,685 | $1,068,282 | +36.1% | | Representation | $715,276 | $577,141 | +23.9% | | **Total Consolidated Revenue** | **$2,786,278** | **$2,180,854** | **+27.8%** | Adjusted EBITDA by Segment (Six Months Ended June 30, in thousands) | Segment | 2022 | 2021 | Change (YoY) | | :--------------------------- | :---------- | :---------- | :----------- | | Owned Sports Properties | $310,011 | $277,816 | +11.6% | | Events, Experiences & Rights | $240,600 | $75,850 | +217.2% | | Representation | $212,926 | $123,168 | +72.9% | | Corporate | $(142,733) | $(109,320) | -30.6% | | **Total Adjusted EBITDA** | **$620,804** | **$367,514** | **+68.9%** | [Note 16. COMMITMENTS AND CONTINGENCIES](index=29&type=section&id=Note%2016.%20COMMITMENTS%20AND%20CONTINGENCIES) Endeavor faces legal proceedings, including a **EUR 2 billion** Italian Competition Authority claim and UFC monopolization lawsuits, while committing to acquire OpenBet for **$800 million** and sell ten PDL Clubs for **$280 million** - The company is involved in legal proceedings, including a FEMA complaint against an employee, an Italian Competition Authority investigation with damages claims totaling over **EUR 2 billion**, and class-action lawsuits against Zuffa (UFC) alleging monopolization[103](index=103&type=chunk)[105](index=105&type=chunk) - Endeavor has committed to acquire the OpenBet business for **$800.0 million** ($750.0 million cash, $50.0 million Class A common stock), with closing expected in Q3 2022[106](index=106&type=chunk) - The company plans to sell ten Professional Development League (PDL) Clubs operating under Diamond Baseball Holdings for approximately **$280 million** cash, with closing expected in Q4 2022[109](index=109&type=chunk) [Note 17. RELATED PARTY TRANSACTIONS](index=30&type=section&id=Note%2017.%20RELATED%20PARTY%20TRANSACTIONS) Endeavor engages in related party transactions, primarily with Euroleague (an equity-method investment) for management and production services, and with The Raine Group (partially owned by Silver Lake and executives) for investment banking services and fund investments - For the six months ended June 30, 2022, the company recognized **$2.4 million** in revenue from management fees and **$3.9 million** from production services provided to Euroleague, an equity-method investment[107](index=107&type=chunk) - The company paid **$15.0 million** in transaction costs to The Raine Group (a related party) for investment banking services related to the sale of the restricted Endeavor Content business during the six months ended June 30, 2022[107](index=107&type=chunk) [Note 18. SUBSEQUENT EVENTS](index=31&type=section&id=Note%2018.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2022, Endeavor entered into an agreement to sell ten PDL Clubs for approximately $280 million, acquired 55% of Barrett-Jackson Holdings for $261.2 million, and entered into additional interest rate hedges for $750 million of its 2014 Credit Facilities - In August 2022, the company entered into an agreement to sell ten Professional Development League (PDL) Clubs for approximately **$280 million** cash, expected to close in Q4 2022[109](index=109&type=chunk) - In August 2022, Endeavor acquired 55% of Barrett-Jackson Holdings, LLC for **$261.2 million**, consisting of $248.7 million cash and $12.5 million in Class A common stock[109](index=109&type=chunk) - In August 2022, the company entered into additional interest rate hedges to swap **$750 million** of its 2014 Credit Facilities from floating to a fixed LIBOR coupon of **3.162%** until August 31, 2024[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Endeavor's financial condition and operating results, covering its post-COVID-19 recovery, strategic transactions, segment performance, and the impact of the UFC Buyout and reorganization [BUSINESS OVERVIEW](index=32&type=section&id=BUSINESS%20OVERVIEW) Endeavor is a global sports and entertainment company with three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. It has expanded through organic growth and strategic acquisitions, leveraging its integrated platform anchored by owned and managed intellectual property - Endeavor is a global sports and entertainment company that owns and operates premium sports properties, produces and distributes content, manages live events, and represents talent and corporate clients[112](index=112&type=chunk) - The company operates in three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation[112](index=112&type=chunk) - Strategic acquisitions include the Mutua Madrid Open tennis tournament (April 2022) and 55% of Barrett-Jackson Holdings, LLC (August 2022), while the restricted Endeavor Content business was divested in January 2022[113](index=113&type=chunk)[114](index=114&type=chunk) [Segments](index=32&type=section&id=Segments) Endeavor's segments include Owned Sports Properties (UFC, PBR), Events, Experiences & Rights (live events, media rights, IMG Academy), and Representation (talent, marketing, licensing), with recent acquisitions and divestitures - The Owned Sports Properties segment includes UFC, Professional Bull Riders (PBR), Euroleague, and Diamond Baseball Holdings (DBH), with plans to sell ten PDL Clubs under DBH for approximately **$280 million**[112](index=112&type=chunk) - The Events, Experiences & Rights segment owns/operates over 800 live events, distributes sports video programming, and includes IMG Academy and Next College Student Athlete (NCSA). It is acquiring OpenBet for **$800 million** and acquired the Mutua Madrid Open[112](index=112&type=chunk)[113](index=113&type=chunk) - The Representation segment includes WME talent agency, IMG Models, 160over90 (brand strategy), and IMG Licensing. The restricted Endeavor Content business was sold in January 2022[114](index=114&type=chunk) [Components of Our Operating Results](index=33&type=section&id=Components%20of%20Our%20Operating%20Results) This section defines Endeavor's operating results components: Revenue (media rights, events), Direct Operating Costs (production, media fees), SG&A (personnel, professional services), and Income Taxes (EGH's share of EOC's taxable income) - Revenue is generated from diverse sources across segments, including media rights, pay-per-view, sponsorships, ticket sales, subscriptions, commissions, and marketing/consulting fees[115](index=115&type=chunk) - Direct operating costs primarily cover third-party expenses for event/content production, training facility operations, and media rights fees[115](index=115&type=chunk) - Selling, general and administrative expenses include personnel costs, rent, professional services, and other overhead[115](index=115&type=chunk) [Impact of the COVID-19 Pandemic](index=33&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) The COVID-19 pandemic significantly impacted Endeavor's business starting March 2020, particularly the entertainment and sports industries. While business activity has resumed and restrictions have eased, future increases or reinstatements of restrictions could still adversely affect operations - The COVID-19 pandemic significantly impacted the company's business, results of operations, financial position, and cash flows starting March 2020[117](index=117&type=chunk) - While business activity has resumed and restrictions have been lessened or lifted, future increases or reinstatements of restrictions could still adversely affect operations[117](index=117&type=chunk) [UFC Buyout](index=34&type=section&id=UFC%20Buyout) The UFC Buyout, concurrent with the IPO, led to Endeavor acquiring 100% of UFC Parent, eliminating UFC non-controlling interests and removing UFC LLC Agreement dividend restrictions, though UFC Credit Facilities restrictions persist - The UFC Buyout resulted in Endeavor Operating Company directly or indirectly owning 100% of UFC Parent's equity interests[119](index=119&type=chunk) - As a result, the company no longer attributes income (loss) to non-controlling interests related to UFC and recognized a reduction in nonredeemable non-controlling interests[119](index=119&type=chunk) - Restrictions on dividends under the UFC LLC Agreement were removed after the UFC Buyout, although restrictions from the UFC Credit Facilities remain in place[119](index=119&type=chunk) [Reorganization](index=34&type=section&id=Reorganization) Prior to the IPO, Endeavor Group Holdings (EGH) reorganized as a holding company, consolidating Endeavor Operating Company (EOC) results and paying taxes and TRA obligations from EOC distributions - Prior to the IPO, Endeavor Group Holdings (EGH) became a holding company, managing and operating Endeavor Manager and Endeavor Operating Company (EOC)[120](index=120&type=chunk) - EGH consolidates the results of Endeavor Manager and EOC and is subject to U.S. federal, state, and local income taxes on its allocable share of their taxable income[120](index=120&type=chunk) - EOC makes distributions to EGH to fund its tax obligations and operating expenses, including payments due under Tax Receivable Agreements (TRAs)[120](index=120&type=chunk) [RESULTS OF OPERATIONS](index=34&type=section&id=RESULTS%20OF%20OPERATIONS) Endeavor's Q2 2022 results show significant revenue growth and a shift from net loss to net income, driven by live event recovery and divestitures, with mixed operating expense changes and a boost from the Endeavor Content sale Consolidated Financial Performance (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :------------ | :----------- | | Revenue | $1,312,515 | $1,111,272 | +18.1% | | Operating income (loss) | $151,019 | $(307,505) | N/A (swing) | | Net income (loss) attributable to EGH, Inc. | $25,806 | $(319,597) | N/A (swing) | Consolidated Financial Performance (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :------------ | :----------- | | Revenue | $2,786,278 | $2,180,854 | +27.8% | | Operating income (loss) | $324,934 | $(213,007) | N/A (swing) | | Net income (loss) attributable to EGH, Inc. | $345,352 | $(319,597) | N/A (swing) | [Revenue](index=34&type=section&id=Revenue) Revenue increased by **18.1%** (three months) and **27.8%** (six months) to **$1.31 billion** and **$2.79 billion** respectively, driven by post-COVID-19 live event recovery, UFC/PBR growth, and client commissions, despite the Endeavor Content divestiture - Revenue increased by **$201.2 million** (**18.1%**) to **$1,312.5 million** for the three months ended June 30, 2022, and by **$605.4 million** (**27.8%**) to **$2,786.3 million** for the six months ended June 30, 2022, reflecting a rebound from COVID-19 impacts[122](index=122&type=chunk)[124](index=124&type=chunk) - Owned Sports Properties revenue increased by **28.2%** for the three months and **15.9%** for the six months, driven by growth at UFC (media rights, sponsorship, PPV) and PBR (event timing, acquisitions)[122](index=122&type=chunk)[124](index=124&type=chunk) - Events, Experiences & Rights revenue increased by **18.8%** for the three months and **36.1%** for the six months, primarily due to the return of live events and the Madrid Open acquisition, partially offset by decreased media rights fees[123](index=123&type=chunk)[124](index=124&type=chunk) [Direct operating costs](index=35&type=section&id=Direct%20operating%20costs) Direct operating costs decreased by 11.0% for the three months ended June 30, 2022, but increased by 7.7% for the six months, reflecting a shift in business activities. Decreases were primarily due to lower media rights/production costs and the divestiture of Endeavor Content, while increases were driven by the return of live events and marketing activations - Direct operating costs decreased by **$62.6 million** (**11.0%**) to **$508.4 million** for the three months ended June 30, 2022, primarily due to lower media rights/production costs and the sale of the restricted Endeavor Content business[125](index=125&type=chunk) - Direct operating costs increased by **$85.7 million** (**7.7%**) to **$1,203.0 million** for the six months ended June 30, 2022, primarily due to increased costs related to the return of live events and marketing activations[125](index=125&type=chunk) [Selling, general and administrative expenses](index=35&type=section&id=Selling,%20general%20and%20administrative%20expenses) Selling, general and administrative (SG&A) expenses decreased by 25.2% for the three months and 3.3% for the six months ended June 30, 2022. This reduction was primarily due to significantly lower equity-based compensation expenses in the prior period, partially offset by higher personnel and operating costs as the business recovered from COVID-19 - Selling, general and administrative expenses decreased by **$197.6 million** (**25.2%**) for the three months and **$38.5 million** (**3.3%**) for the six months ended June 30, 2022[126](index=126&type=chunk) - The decrease was principally due to lower equity-based compensation expense (**$326.4 million** for three months, **$292.0 million** for six months) as the prior period included charges for modifications of pre-IPO awards[126](index=126&type=chunk) [Insurance recoveries](index=35&type=section&id=Insurance%20recoveries) Insurance recoveries, primarily related to cancelled events due to COVID-19, significantly decreased to none for the three months and $1.0 million for the six months ended June 30, 2022, compared to $10.2 million and $29.9 million in the prior year periods, respectively Insurance Recoveries (in thousands) | Period | 2022 | 2021 | | :------------------------- | :--- | :--- | | Three Months Ended June 30 | $0 | $10,210 | | Six Months Ended June 30 | $993 | $29,867 | - The decrease in insurance recoveries was primarily related to cancelled events in the Events, Experiences & Rights and Owned Sports Properties segments due to COVID-19[126](index=126&type=chunk) [Depreciation and amortization](index=36&type=section&id=Depreciation%20and%20amortization) Depreciation and amortization expenses decreased by 5.1% for the three months and 3.5% for the six months ended June 30, 2022, primarily due to certain intangible assets becoming fully amortized, partially offset by new intangibles acquired through recent acquisitions Depreciation and Amortization (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30 | $65,612 | $69,161 | -5.1% | | Six Months Ended June 30 | $131,606 | $136,397 | -3.5% | - The decreases were primarily driven by certain intangible assets becoming fully amortized, partially offset by intangibles acquired through acquisitions[128](index=128&type=chunk) [Impairment charges](index=36&type=section&id=Impairment%20charges) No impairment charges were recorded for the three and six months ended June 30, 2022, compared to $3.8 million in the prior year periods, which were related to goodwill in the Events, Experiences & Rights and Representation segments Impairment Charges (in thousands) | Period | 2022 | 2021 | | :------------------------- | :--- | :--- | | Three Months Ended June 30 | $0 | $3,770 | | Six Months Ended June 30 | $0 | $3,770 | - Impairment charges of **$3.8 million** for the three and six months ended June 30, 2021, were for goodwill in the Events, Experiences & Rights and Representation segments[128](index=128&type=chunk) [Interest expense, net](index=36&type=section&id=Interest%20expense,%20net) Net interest expense decreased by 25.4% for the three months and 20.0% for the six months ended June 30, 2022, primarily due to lower indebtedness and interest rates on outstanding debt compared to the prior year Interest Expense, Net (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30 | $62,505 | $83,836 | -25.4% | | Six Months Ended June 30 | $121,777 | $152,187 | -20.0% | - The decrease was primarily driven by lower indebtedness and lower interest rates associated with outstanding debt[128](index=128&type=chunk) [Loss on extinguishment of debt](index=36&type=section&id=Loss%20on%20extinguishment%20of%20debt) No loss on extinguishment of debt was recorded for the three and six months ended June 30, 2022. In the prior year, a $28.6 million loss was incurred due to fees and expenses from the early redemption of term loans Loss on Extinguishment of Debt (in thousands) | Period | 2022 | 2021 | | :------------------------- | :--- | :--- | | Three Months Ended June 30 | $0 | $28,628 | | Six Months Ended June 30 | $0 | $28,628 | - The **$28.6 million** loss in 2021 was due to fees and expenses incurred for the early redemption of term loans issued in May 2020[128](index=128&type=chunk) [Tax receivable agreements liability adjustment](index=36&type=section&id=Tax%20receivable%20agreements%20liability%20adjustment) The company recorded a $2.4 million adjustment for the tax receivable agreements (TRA) liability for the three months ended June 30, 2022, and a $(51.1) million adjustment for the six months, reflecting the expected realization of certain tax benefits based on future taxable income Tax Receivable Agreements Liability Adjustment (in thousands) | Period | 2022 | 2021 | | :------------------------- | :--- | :--- | | Three Months Ended June 30 | $2,405 | $0 | | Six Months Ended June 30 | $(51,092) | $0 | - The adjustments reflect the expected realization of certain tax benefits after concluding that such TRA payments would be probable based on estimates of future taxable income over the terms of the TRAs[128](index=128&type=chunk) [Other (expense) income, net](index=36&type=section&id=Other%20(expense)%20income,%20net) Other (expense) income, net, for the three months ended June 30, 2022, was a $6.1 million expense, primarily due to foreign currency transaction losses. For the six months, it was a $453.8 million income, significantly boosted by a $463.6 million gain from the sale of the restricted Endeavor Content business - Other (expense) income, net, was an expense of **$6.1 million** for the three months ended June 30, 2022, primarily due to **$16.1 million** in foreign currency transaction losses[129](index=129&type=chunk) - For the six months ended June 30, 2022, other (expense) income, net, was an income of **$453.8 million**, which included a **$463.6 million** gain from the sale of the restricted Endeavor Content business[129](index=129&type=chunk) [Provision for (benefit from) income taxes](index=36&type=section&id=Provision%20for%20(benefit%20from)%20income%20taxes) The company recorded an income tax provision of $2.7 million for the three months and a benefit of $14.5 million for the six months ended June 30, 2022. The six-month benefit was primarily due to the release of a $53.7 million valuation allowance on deferred tax assets, linked to the expected realization of tax benefits from TRA liabilities Income Tax (in thousands) | Period | 2022 | 2021 | | :------------------------- | :--- | :--- | | Three Months Ended June 30 | $2,699 | $60,918 | | Six Months Ended June 30 | $(14,535) | $66,003 | - The tax benefit for the six months ended June 30, 2022, was primarily due to the release of a **$53.7 million** valuation allowance on deferred tax assets, related to the expected realization of certain tax benefits in connection with the recording of a TRA liability[130](index=130&type=chunk) [Equity losses of affiliates, net of tax](index=36&type=section&id=Equity%20losses%20of%20affiliates,%20net%20of%20tax) Equity losses of affiliates decreased by $3.9 million to $39.9 million for the three months but increased by $1.2 million to $60.5 million for the six months ended June 30, 2022. These losses primarily stemmed from investments in Learfield IMG College and the retained 20% interest in the restricted Endeavor Content business Equity Losses of Affiliates (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30 | $(39,867) | $(43,813) | +$3,946 | | Six Months Ended June 30 | $(60,522) | $(59,284) | -$1,238 | - Equity losses primarily related to the company's investment in Learfield IMG College and the 20% interest retained in the restricted Endeavor Content business[131](index=131&type=chunk) [Net income (loss) attributable to non-controlling interests](index=36&type=section&id=Net%20income%20(loss)%20attributable%20to%20non-controlling%20interests) Net income attributable to non-controlling interests significantly shifted from a loss of $190.4 million to an income of $16.4 million for the three months, and from a loss of $163.1 million to an income of $214.5 million for the six months ended June 30, 2022. This change primarily reflects the overall improvement in the company's net income and the impact of reorganization transactions Net Income (Loss) Attributable to Non-Controlling Interests (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :--- | :--- | :----------- | | Three Months Ended June 30 | $16,414 | $(190,354) | N/A (swing) | | Six Months Ended June 30 | $214,534 | $(163,108) | N/A (swing) | - The change was primarily due to the significant shift in reported net income (loss) for the periods and the effect of the reorganization transactions[131](index=131&type=chunk) [SEGMENT RESULTS OF OPERATIONS](index=37&type=section&id=SEGMENT%20RESULTS%20OF%20OPERATIONS) All three segments—Owned Sports Properties, Events, Experiences & Rights, and Representation—showed strong revenue and Adjusted EBITDA growth for Q2 2022, reflecting robust recovery, while Corporate Adjusted EBITDA declined due to increased personnel costs Segment Revenue (Six Months Ended June 30, in thousands) | Segment | 2022 | 2021 | Change (YoY) | | :--------------------------- | :---------- | :---------- | :----------- | | Owned Sports Properties | $628,619 | $542,346 | +15.9% | | Events, Experiences & Rights | $1,453,685 | $1,068,282 | +36.1% | | Representation | $715,276 | $577,141 | +23.9% | Segment Adjusted EBITDA (Six Months Ended June 30, in thousands) | Segment | 2022 | 2021 | Change (YoY) | | :--------------------------- | :---------- | :---------- | :----------- | | Owned Sports Properties | $310,011 | $277,816 | +11.6% | | Events, Experiences & Rights | $240,600 | $75,850 | +217.2% | | Representation | $212,926 | $123,168 | +72.9% | | Corporate | $(142,733) | $(109,320) | -30.6% | | **Total Adjusted EBITDA** | **$620,804** | **$367,514** | **+68.9%** | [Owned Sports Properties](index=37&type=section&id=Owned%20Sports%20Properties) The Owned Sports Properties segment reported significant revenue growth of 28.2% for the three months and 15.9% for the six months ended June 30, 2022, driven by UFC's media rights, sponsorships, and PPV, as well as PBR's event timing and acquisitions. Adjusted EBITDA also increased, reflecting strong operational performance - Revenue for the Owned Sports Properties segment increased by **$73.1 million** (**28.2%**) for the three months and **$86.3 million** (**15.9%**) for the six months ended June 30, 2022[134](index=134&type=chunk) - Growth was primarily driven by UFC due to increased media rights fees, sponsorship, licensing, commercial PPV, and event-related revenue, along with an increase at PBR due to event timing and the acquisition of ten PDL Clubs[134](index=134&type=chunk) - Adjusted EBITDA for the segment increased by **$29.0 million** (**21.9%**) for the three months and **$32.2 million** (**11.6%**) for the six months ended June 30, 2022[134](index=134&type=chunk)[135](index=135&type=chunk) [Events, Experiences & Rights](index=38&type=section&id=Events,%20Experiences%20%26%20Rights) The Events, Experiences & Rights segment saw substantial revenue growth of **18.8%** (three months) and **36.1%** (six months), driven by the return of live events and the Madrid Open acquisition, with Adjusted EBITDA increasing by **193.8%** and **217.2%** respectively - Revenue for the Events, Experiences & Rights segment increased by **$99.2 million** (**18.8%**) for the three months and **$385.4 million** (**36.1%**) for the six months ended June 30, 2022[136](index=136&type=chunk) - The increase was primarily driven by the return of live events (e.g., Masters, NCAA Men's March Madness, Super Bowl LVI, music events) and the acquisition of the Madrid Open, partially offset by decreased media rights fees due to contract expirations[136](index=136&type=chunk) - Adjusted EBITDA for the segment increased significantly by **$71.3 million** (**193.8%**) for the three months and **$164.8 million** (**217.2%**) for the six months ended June 30, 2022[136](index=136&type=chunk) [Representation](index=39&type=section&id=Representation) The Representation segment's revenue grew by **9.1%** (three months) and **23.9%** (six months), driven by strong client commissions and recovery in live entertainment, with Adjusted EBITDA increasing by **80.3%** and **72.9%** despite the Endeavor Content divestiture - Revenue for the Representation segment increased by **$29.7 million** (**9.1%**) for the three months and **$138.1 million** (**23.9%**) for the six months ended June 30, 2022[139](index=139&type=chunk)[140](index=140&type=chunk) - The increase was primarily attributable to a rise in client commissions due to strong demand for talent and the recovery of live entertainment and corporate spending, partially offset by the loss of revenue from the divested Endeavor Content business[139](index=139&type=chunk)[140](index=140&type=chunk) - Adjusted EBITDA for the segment increased by **$49.5 million** (**80.3%**) for the three months and **$89.8 million** (**72.9%**) for the six months ended June 30, 2022[139](index=139&type=chunk)[140](index=140&type=chunk) [Corporate](index=39&type=section&id=Corporate) Corporate Adjusted EBITDA decreased by 18.4% for the three months and 30.6% for the six months ended June 30, 2022, primarily due to an increase in personnel costs and other general and administrative expenses not allocated to operating divisions - Corporate Adjusted EBITDA decreased by **$11.5 million** (**18.4%**) to **$(74.3) million** for the three months and by **$33.4 million** (**30.6%**) to **$(142.7) million** for the six months ended June 30, 2022[140](index=140&type=chunk)[141](index=141&type=chunk) - The decline was driven by an increase in cost of personnel and other general and administrative expenses[140](index=140&type=chunk)[141](index=141&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=40&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section defines and reconciles non-GAAP measures, Adjusted EBITDA and Adjusted Net Income, used by management to evaluate consolidated operating performance and profitability by excluding specific non-cash and non-recurring items - Adjusted EBITDA is defined as net income (loss) excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earn-out costs, certain legal costs, restructuring, severance and impairment charges, certain non-cash fair value adjustments, certain equity earnings, tax receivable agreements liability adjustment, and certain other items[143](index=143&type=chunk) - Adjusted Net Income is defined as net income (loss) attributable to Endeavor Group Holdings adjusted for its share of the adjustments used to calculate Adjusted EBITDA (excluding income taxes, net interest expense, and depreciation), on an after-tax basis, plus/minus the release of tax valuation allowances and other tax items[143](index=143&type=chunk) - These non-GAAP measures are used by management to evaluate consolidated operating performance and ongoing profitability, and for planning and forecasting purposes, but have limitations as analytical tools[143](index=143&type=chunk) [Adjusted EBITDA](index=41&type=section&id=Adjusted%20EBITDA) Consolidated Adjusted EBITDA significantly increased by 82.3% to $306.4 million for the three months and 68.9% to $620.8 million for the six months ended June 30, 2022, reflecting strong operational recovery. The Adjusted EBITDA margin also improved to 23.3% and 22.3% for the respective periods Consolidated Adjusted EBITDA (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :---------- | :---------- | :----------- | | Three Months Ended June 30 | $306,355 | $168,048 | +82.3% | | Six Months Ended June 30 | $620,804 | $367,514 | +68.9% | Adjusted EBITDA Margin | Period | 2022 | 2021 | | :------------------------- | :---- | :---- | | Three Months Ended June 30 | 23.3% | 15.1% | | Six Months Ended June 30 | 22.3% | 16.9% | - Key adjustments for the six months ended June 30, 2022, included **$111.5 million** for equity-based compensation expense and a **$(463.6) million** gain on the sale of the restricted Endeavor Content business[144](index=144&type=chunk) [Adjusted Net Income](index=41&type=section&id=Adjusted%20Net%20Income) Adjusted Net Income increased significantly to $130.5 million for the three months and $259.7 million for the six months ended June 30, 2022, compared to $51.5 million for the prior year periods. This improvement reflects the company's operational recovery and the impact of various non-GAAP adjustments, including the release of tax valuation allowances Adjusted Net Income (in thousands) | Period | 2022 | 2021 | Change (YoY) | | :------------------------- | :---------- | :---------- | :----------- | | Three Months Ended June 30 | $130,470 | $51,475 | +153.5% | | Six Months Ended June 30 | $259,682 | $51,475 | +404.5% | - Key adjustments for the six months ended June 30, 2022, included **$84.3 million** for amortization, **$111.5 million** for equity-based compensation expense, and a **$(463.6) million** gain on the sale of the restricted Endeavor Content business[144](index=144&type=chunk) - Other tax items, including the release of a valuation allowance on deferred tax assets, contributed **$(53.7) million** to the adjustments for the six months ended June 30, 2022[144](index=144&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=42&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Endeavor's liquidity, from cash, operating cash flows, and Senior Credit Facilities, is expected to cover working capital and commitments for 12 months, funding growth, acquisitions, debt service, and tax payments, with refinancing anticipated before 2025 - The company's liquidity sources include cash on hand, cash flows from operations, available borrowings under Senior Credit Facilities, and proceeds from potential divestitures[154](index=154&type=chunk) - Primary liquidity needs include funding organic growth, future investments and acquisitions (e.g., Barrett-Jackson, OpenBet), operating expenses, capital expenditures, debt service, and payments under tax receivable agreements[154](index=154&type=chunk) - The company expects to refinance its Senior Credit Facilities prior to the maturity of outstanding loans, with the first maturity occurring in 2025[154](index=154&type=chunk) [Historical liquidity and capital resources](index=42&type=section&id=Historical%20liquidity%20and%20capital%20resources) Historically, Endeavor's operations, revenue-generating activities, and routine capital expenditures have been funded by cash flows from operations, which also serviced long-term debt. Acquisitions were primarily funded by equity contributions, long-term debt issuance, and IPO/private placement proceeds - Cash flows from operations have historically funded day-to-day operations, revenue-generating activities, routine capital expenditures, and long-term debt service[148](index=148&type=chunk) - Acquisitions have been primarily funded through equity contributions from pre-IPO institutional investors, issuance of long-term debt, and proceeds from the initial public offering and private placement[148](index=148&type=chunk) - As of June 30, 2022, the company had **$5.6 billion** in outstanding indebtedness under its Senior Credit Facilities and approximately **$376 million** available to borrow[148](index=148&type=chunk)[149](index=149&type=chunk) [Cash Flows Overview](index=44&type=section&id=Cash%20Flows%20Overview) For the six months ended June 30, 2022, operating cash flow significantly improved to **$213.0 million**, investing activities shifted to a **$123.2 million** cash provision due to the Endeavor Content divestiture, and financing activities decreased to **$7.2 million** cash provided Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | Change (YoY) | | :------------------------------------------ | :---------- | :---------- | :----------- | | Net cash provided by (used in) operating activities | $213,046 | $(122,199) | +$335,245 | | Net cash provided by (used in) investing activities | $123,154 | $(372,565) | +$495,719 | | Net cash provided by financing activities | $7,196 | $397,498 | -$390,302 | - Cash provided by operating activities improved by **$335.2 million**, primarily due to net income adjusted for non-cash items, offset by increases in accounts receivable and decreases in deferred revenue[152](index=152&type=chunk) - Investing activities shifted to cash provided, largely reflecting **$649.7 million** in proceeds from the sale of the restricted Endeavor Content business, partially offset by **$528.1 million** for acquisitions and capital expenditures[152](index=152&type=chunk) [Future sources and uses of liquidity](index=45&type=section&id=Future%20sources%20and%20uses%20of%20liquidity) Endeavor expects current liquidity to cover 12-month commitments, funding organic growth, acquisitions, operating expenses, debt service, and tax payments, with a planned **$250 million** debt reduction and Senior Credit Facilities refinancing before 2025 - The company expects its current liquidity sources (cash on hand, cash flows from operations, available borrowings under Senior Credit Facilities, and proceeds from potential divestitures) to be sufficient for working capital and commitments for at least the next 12 months[154](index=154&type=chunk) - Primary liquidity needs include providing capital for organic growth, funding future investments and acquisitions (e.g., Barrett-Jackson, OpenBet), paying operating expenses, capital expenditures, and servicing long-term debt[154](index=154&type=chunk) - The company anticipates refinancing its Senior Credit Facilities prior to the maturity of outstanding loans, with the first maturity for term loans occurring in 2025[154](index=154&type=chunk) [Tax distributions by Endeavor Operating Company](index=45&type=section&id=Tax%20distributions%20by%20Endeavor%20Operating%20Company) Endeavor Operating Company (EOC) is expected to make tax distributions to its members, including Endeavor Manager, sufficient to cover applicable taxes on their allocable share of EOC's taxable income. These distributions are generally pro rata for EOC Units, but may be reduced for Endeavor Manager and can be non pro-rata for Endeavor Profits Units - Endeavor Operating Company (EOC) is expected to make distributions to its members, including Endeavor Manager, to cover applicable taxes attributable to each member's allocable share of EOC's taxable income[155](index=155&type=chunk) - Tax distributions for EOC Units are generally pro rata, but distributions to Endeavor Manager may be reduced, and non pro-rata distributions may be paid to holders of Endeavor Profits Units[155](index=155&type=chunk) [Tax Receivable Agreements](index=45&type=section&id=Tax%20Receivable%20Agreements) Under TRAs, EGH pays TRA Holders **85%** of realized tax benefits, funded by operating cash flows and tax distributions, with a potential **$700 million** valuation allowance release and **$900 million** TRA liability anticipated in 2022, subject to acceleration clauses - Under TRAs, EGH generally pays TRA Holders **85%** of realized tax benefits from favorable tax attributes, with payments bearing interest from the tax return due date[156](index=156&type=chunk) - EGH expects to fund TRA payments from operating cash flows and excess tax distributions from subsidiaries[156](index=156&type=chunk) - A valuation allowance release (potentially exceeding **$700 million**) and an associated TRA liability (potentially exceeding **$900 million**) are anticipated in 2022 if relevant criteria are met[156](index=156&type=chunk) [Critical Accounting Estimates](index=45&type=section&id=Critical%20Accounting%20Estimates) There were no significant changes in Endeavor's critical accounting policies and estimates or their application during the six months ended June 30, 2022, from those previously disclosed in the 2021 Annual Report - There were no significant changes in critical accounting policies and estimates or their application during the six months ended June 30, 2022, compared to those disclosed in the 2021 Annual Report[157](index=157&type=chunk) [Recent Accounting Standards](index=45&type=section&id=Recent%20Accounting%20Standards) For information on recently adopted or issued accounting standards, refer to Note 3 of the unaudited consolidated financial statements - For further information on recently adopted or issued accounting standards, refer to Note 3 to the unaudited consolidated financial statements[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Ma

Financial Data and Key Metrics Changes - For Q1 2022, the company generated $1.473 billion in consolidated revenue, an increase of $404 million or 38% year-over-year [18] - Adjusted EBITDA for the quarter was $314.4 million, up $115 million or 58% compared to the previous year [18] Business Line Data and Key Metrics Changes - The Sports Property segment generated revenue of $296.7 million, up $13.2 million or 5%, with adjusted EBITDA of $148.7 million, an increase of $3.2 million or 2% [19] - The Events, Experiences, and Rights segment recorded revenue of $825.8 million, up $286.2 million or 53%, and adjusted EBITDA of $132.5 million, up $93.4 million or nearly 240% [23] - The Representation segment saw revenue of $357.3 million, an increase of $108.4 million or 44%, with adjusted EBITDA of $101.7 million, up $40.2 million or 65% [25] Market Data and Key Metrics Changes - The company reported strong demand for live events, with sold-out UFC pay-per-view events and record attendance at events like the Miami Open and Super Bowl 56 [12][42] - The average value of international rights deals closed in Q2 2021 exceeded 100% over prior deals, indicating strong growth in international media rights [21] Company Strategy and Development Direction - The company is focused on capitalizing on the growing demand for premium content and sports rights, with a belief that content spending will continue to rise [15][16] - The company is positioned as a distribution-agnostic player, benefiting from the expansion of content across various platforms, including streaming, podcasts, and digital [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of consumer demand for live events and the overall business, stating that there are no indications of weakness in consumer spending [44] - The company raised its revenue guidance for 2022 to a range between $5.235 billion and $5.475 billion, reflecting strong underlying fundamentals [27] Other Important Information - The company ended the quarter with $5.7 billion in long-term debt and approximately $2 billion in cash, resulting in $3.6 billion in net debt [26] - The company is targeting a 50% free cash flow conversion for the year [36] Q&A Session Summary Question: Content spending debate and talent business diversification - Management does not see any reduction in content spending and believes platforms like Apple and Amazon are increasing their investments [32] - The Representation business revenue increased 24% compared to 2019, indicating strong diversification [33][36] Question: UFC fighter compensation comparison - Management believes UFC fighter compensation should be compared to individual sports like PGA Tour and F1, not team sports [38] Question: Demand for live events and updated guidance - Management reported strong demand for live events, with record attendance and sold-out events, indicating no consumer weakness [42] - Updated guidance reflects strong fundamentals and confidence in business performance [46] Question: Marketing business outlook - Demand for experiential marketing is high, with significant growth in the 160over90 business [48] Question: International rights negotiations - Management is in discussions regarding rights negotiations in Brazil and sees potential for growth [49] Question: Events business strength and seasonality - Management indicated that Q1 results may not be a good run rate for the events business due to seasonality [56] Question: Sports betting competitive landscape - Management is optimistic about the opportunities in the sports betting space, particularly in the U.S., Japan, and Brazil [69] Question: Noncontrolling interest impact on net income - Management acknowledged the complexity of the noncontrolling interest line and offered to follow up for detailed clarification [71]

Table of Contents 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, 2022 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 ...

Financial Data and Key Metrics Changes - For Q4 2021, the company generated $1.5 billion in consolidated revenue, up $545 million or 57% year-over-year [20] - Adjusted EBITDA for Q4 was $229.5 million, an increase of $57 million or 33% [20] - For the full year 2021, revenue reached $5.1 billion, up $1.6 billion or 46%, while adjusted EBITDA was $880.3 million, up $308 million or 54% [20] Business Segment Data and Key Metrics Changes - Owned Sports Properties segment revenue was $277.3 million in Q4, up $8.3 million or 3%, with adjusted EBITDA of $125.1 million, up $2 million or 2% [21] - Events, Experiences & Rights segment reported revenue of $516.7 million in Q4, up $96 million or 23%, and adjusted EBITDA of $54.7 million, up 29% [25] - Representation segment revenue was $717.9 million in Q4, an increase of $443.2 million or 161%, with adjusted EBITDA of $118.4 million, up 141% [27] Market Data and Key Metrics Changes - UFC had its best financial year in its 28-year history, with revenue up 30% year-over-year and all Pay-Per-View events sold out [22][23] - The PBR World Finals saw revenue increases of over 160% compared to the prior year [24] - The IMG Arena sports betting business renewed over 200 content deals with sportsbooks during the year [26] Company Strategy and Development Direction - The company aims to capitalize on secular trends in premium content, media rights, sports betting, and live events [8][12] - The acquisition of OpenBet is expected to enhance the sports betting offering and create new revenue synergies [10][35] - The company is focused on being distribution-agnostic and leveraging its diverse portfolio to meet the growing demand for sports and entertainment content [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the diversified business and the durability of the long-term strategy [17] - The company anticipates continued growth driven by contractual growth in media rights, sponsorship, and a return to live events [33] - Management highlighted the positive trends in consumer demand for events, indicating high attendance and sales [74] Other Important Information - The company ended the year with $5.7 billion in debt and approximately $1.6 billion in cash, resulting in $4.1 billion in net debt [29] - The guidance for 2022 includes expected revenue between $5.2 billion and $5.45 billion, with adjusted EBITDA expected to be between $1.07 billion and $1.12 billion [31] Q&A Session Summary Question: UFC domestic rights negotiations - Management feels positive about the UFC's position and relationship with Disney/ESPN, with no immediate need to negotiate [39] Question: On Location demand trends - Management reported that On Location had a hugely successful Super Bowl, indicating strong demand for hospitality services [41] Question: International media rights renewals for UFC - Management noted strong growth in international rights, with a 94% increase in AAV over the last 14 deals since Q2 2021 [43] Question: Impact of Russia/Ukraine exposure - Management expects less than a 2% impact on adjusted EBITDA from the situation, which has been incorporated into guidance [45] Question: Agency business growth and revenue visibility - Management indicated that the agency business is expected to grow, with no pull forward in revenue and strong demand for content [47][48] Question: Financial impacts of the Olympics deal - Management expects ramp-up costs in 2022 and 2023, with revenue recognition starting in 2024 [54] Question: M&A appetite and deal pipeline - Management remains focused on M&A opportunities across various verticals, including sports properties and betting [55] Question: Emerging media forms and their impact - Management highlighted significant growth in podcasting and NFTs, viewing them as integral to the future content landscape [57] Question: Sports betting opportunities - Management sees a global opportunity in sports betting, especially with the integration of OpenBet and IMG Arena [59]

Part I [Business Overview](index=7&type=section&id=Item%201.%20Business) Endeavor Group Holdings, Inc. is a global sports and entertainment company operating across three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation - The company operates through **three primary business segments**: Owned Sports Properties, Events, Experiences & Rights, and Representation[16](index=16&type=chunk) - The Owned Sports Properties segment includes premier assets like the **Ultimate Fighting Championship (UFC)**, Professional Bull Riders (PBR), a strategic partnership with Euroleague, and several Professional Development League (PDL) baseball clubs[18](index=18&type=chunk)[123](index=123&type=chunk) - The Events, Experiences & Rights segment owns, operates, or represents over **800 events annually**, manages the IMG Academy, and is a major global distributor of sports media rights, also including IMG ARENA sports betting and Endeavor Streaming businesses[19](index=19&type=chunk)[124](index=124&type=chunk) - The Representation segment includes the WME talent agency, **160over90 marketing services**, and IMG Licensing, which was ranked **No. 1 by License Global magazine in 2021** based on nearly **$15 billion in total retail sales**[19](index=19&type=chunk)[125](index=125&type=chunk) - Growth strategies include leveraging its integrated platform for global expansion, expanding experiential offerings, investing in high-growth adjacent industries, and pursuing strategic mergers and acquisitions[26](index=26&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - As of December 31, 2021, Endeavor had approximately **7,700 employees** across **29 countries**[34](index=34&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from changing consumer preferences, reliance on discretionary spending, significant indebtedness, and concentrated voting control - The business is highly sensitive to changes in consumer tastes, discretionary spending, and the ongoing impact of the COVID-19 pandemic, which could reduce demand for its services and content[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - Success depends on relationships of agents and key personnel with clients, and the ability to identify, sign, and retain talent, with loss of key personnel or clients adversely affecting the business[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Potential conflicts of interest arise from the breadth of its platform, such as representing talent while owning sports properties, exemplified by a dispute with the MLB Players' Association regarding PDL Clubs[53](index=53&type=chunk) - As of December 31, 2021, the company had **$5.6 billion in outstanding indebtedness** under its Senior Credit Facilities, potentially limiting financial flexibility and requiring substantial cash flow for debt service[80](index=80&type=chunk)[81](index=81&type=chunk) - The company is controlled by Messrs. Emanuel and Whitesell, Executive Holdcos, and the Silver Lake Equityholders, who collectively control approximately **89.1% of the combined voting power** as of December 31, 2021, potentially leading to actions differing from public stockholders' interests[79](index=79&type=chunk) - The company is required to pay certain pre-IPO investors **85% of cash tax savings** from favorable tax attributes acquired in connection with the IPO, with these payments under tax receivable agreements potentially being significant[85](index=85&type=chunk)[87](index=87&type=chunk) - UFC is named in **five related class-action lawsuits** alleging monopolization of the market for elite professional MMA fighters' services, which could result in material liability[76](index=76&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[111](index=111&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) The company's significant properties include leased corporate offices in major cities and owned facilities like a multi-sport academy and studios Significant Corporate and Other Facilities (as of Dec 31, 2021) | Location | General Character | Segments Utilizing Facility | | :--- | :--- | :--- | | Beverly Hills, CA | Corporate offices | Representation; Corporate | | New York, NY | Corporate offices | Events, Experiences & Rights; Representation; Owned Sports Properties; Corporate | | Las Vegas, NV | Corporate offices and studios (Owned) | Owned Sports Properties | | London, England | Corporate offices and studios | Events, Experiences & Rights; Representation; Owned Sports Properties; Corporate | | Bradenton, FL | Multi-sports academy (Owned) | Events, Experiences & Rights | [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various claims and legal proceedings in the ordinary course of business, with details provided in Note 22 of its financial statements - The company directs readers to Note 22, "Commitments and Contingencies," in the financial statements for a description of its legal proceedings[114](index=114&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[114](index=114&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE under "EDR", with no anticipated cash dividends as earnings are retained for growth - The company's Class A common stock is listed on the NYSE under the symbol "**EDR**"[114](index=114&type=chunk) - The company does not anticipate declaring or paying cash dividends in the foreseeable future, intending to retain earnings to finance business growth[115](index=115&type=chunk) - Endeavor Operating Company is expected to make tax distributions to its members to cover their allocable share of taxable income[115](index=115&type=chunk) - The company did not repurchase any shares of its Class A common stock during the three months ended December 31, 2021[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Endeavor's revenue increased by **46.0% to $5.1 billion**, driven by a strong rebound and strategic acquisitions, despite reporting a net loss of **$467.5 million** Consolidated Results of Operations (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenue** | **$5,077,713** | **$3,478,743** | **$4,570,970** | | Operating (loss) income | ($22,240) | ($153,218) | $210,536 | | **Net loss** | **($467,479)** | **($625,318)** | **($530,661)** | | Net loss attributable to EGH | ($296,625) | N/A | N/A | Revenue by Segment (in thousands) | Segment | 2021 Revenue | 2020 Revenue | % Change | | :--- | :--- | :--- | :--- | | Owned Sports Properties | $1,108,207 | $952,624 | 16.3% | | Events, Experiences & Rights | $2,031,283 | $1,593,509 | 27.5% | | Representation | $1,959,757 | $943,873 | 107.6% | | **Total Revenue** | **$5,077,713** | **$3,478,743** | **46.0%** | Adjusted EBITDA by Segment (in thousands) | Segment | 2021 Adj. EBITDA | 2020 Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | | Owned Sports Properties | $537,627 | $457,589 | 17.5% | | Events, Experiences & Rights | $215,578 | $59,224 | 264.0% | | Representation | $383,388 | $211,977 | 80.9% | | **Total Adjusted EBITDA** | **$880,316** | **$572,547** | **53.7%** | - In 2021, the company completed the full buyout of UFC Parent, making it a wholly-owned entity and eliminating non-controlling interest related to UFC from its financial statements[129](index=129&type=chunk) - As of December 31, 2021, the company had **$5.6 billion in outstanding debt** under its Senior Credit Facilities and approximately **$381 million in available borrowing capacity**[157](index=157&type=chunk) - The company has signed agreements to acquire the OpenBet business for **$1.2 billion** ($1.0B cash, $200M stock) and the Mutua Madrid Open tennis tournament for approximately **€360 million**, both expected to close in 2022[124](index=124&type=chunk)[125](index=125&type=chunk)[166](index=166&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on its **$5.6 billion** variable-rate debt and foreign currency risk from international operations, mitigated by derivatives - The company is exposed to interest rate risk on its floating-rate debt; a **1% increase in effective interest rates** would increase annual interest expense by **$41 million**, holding debt levels constant from December 31, 2021[180](index=180&type=chunk) - Significant international operations, primarily in British Pound and Euro, expose the company to foreign currency risk; a hypothetical **10% appreciation of the U.S. dollar in 2021** would have decreased revenues by approximately **$121.2 million**[180](index=180&type=chunk) - The company uses derivative financial instruments, including interest rate swaps and foreign currency forward contracts, to hedge against potential adverse fluctuations in interest rates and foreign exchange rates[180](index=180&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's audited consolidated financial statements and supplementary data, beginning on page F-1 - The required financial statements for this item are located starting on page **F-1** of the report[181](index=181&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=59&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[182](index=182&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2021, with no material changes to internal controls reported for Q4 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[183](index=183&type=chunk) - The report does not include a management assessment or auditor attestation on internal control over financial reporting, as permitted for newly public companies under an SEC transition period[183](index=183&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2021[184](index=184&type=chunk) [Other Information](index=60&type=section&id=Item%209B.%20Other%20Information) Director Elon Musk notified the company of his resignation from the board, effective June 30, 2022, not due to any disagreement - Elon Musk resigned from the board of directors, effective **June 30, 2022**, with his resignation not due to any disagreement with the company's operations, policies, or practices[185](index=185&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical information for executive officers and directors, including CEO Ariel Emanuel and Executive Chairman Patrick Whitesell, and details the audit committee composition Key Executive Officers and Directors (as of March 16, 2022) | Name | Age | Position | | :--- | :--- | :--- | | Ariel Emanuel | 60 | Chief Executive Officer and Director | | Patrick Whitesell | 57 | Executive Chairman and Director | | Jason Lublin | 50 | Chief Financial Officer | | Mark Shapiro | 52 | President | | Egon Durban | 48 | Chairman of the Board of Directors | | Elon Musk | 50 | Director (Resigning June 30, 2022) | - The audit committee consists of Ursula Burns, Fawn Weaver, and Jacqueline Reses, with Jacqueline Reses serving as the chair, and Ms. Reses and Ms. Burns qualifying as "**audit committee financial experts**"[193](index=193&type=chunk) - The company has a Code of Conduct available on its investor relations website[194](index=194&type=chunk) [Executive Compensation](index=64&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for 2021 was significantly impacted by the IPO, with a substantial portion of CEO and Executive Chairman pay tied to long-term stock price performance - A substantial portion of compensation for the CEO and Executive Chairman is at-risk and tied to long-term stock price performance through special performance stock unit (PSU) awards granted at the IPO[197](index=197&type=chunk)[219](index=219&type=chunk) - CEO Ariel Emanuel's PSU award grants shares valued at **$26.5 million** for each **$4.50 increase** in the stock price over the **$24 IPO price**, with the first milestone at **$28.50** achieved in 2021[197](index=197&type=chunk)[221](index=221&type=chunk) - Executive Chairman Patrick Whitesell's PSU award grants shares valued at **$100 million** for each **$25.00 increase** in the stock price over the **$24 IPO price**, with the first milestone at **$49.00**[197](index=197&type=chunk)[222](index=222&type=chunk) 2021 Summary Compensation Table (Select NEOs) | Name | Position | Salary ($) | Bonus ($) | Equity Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Ariel Emanuel | Chief Executive Officer | 4,000,000 | 10,000,000 | 293,746,113 | 308,177,233 | | Patrick Whitesell | Executive Chairman | 4,000,000 | 5,000,000 | 113,958,091 | 123,101,284 | | Jason Lublin | Chief Financial Officer | 2,000,000 | 3,500,000 | 12,520,433 | 18,036,201 | | Mark Shapiro | President | 3,000,000 | 7,768,797 | 31,166,143 | 41,995,100 | - Employment agreements for all named executive officers provide for severance payments and benefits upon certain qualifying terminations of employment[225](index=225&type=chunk)[248](index=248&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=89&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) A small group of insiders, including Silver Lake affiliates and key executives, collectively control **89.3% of the combined voting power**, making Endeavor a "controlled company" Beneficial Ownership and Voting Power (as of March 4, 2022) | Beneficial Owner | Class A Common Stock Owned (fully exchanged basis) (%) | Combined Voting Power (%) | | :--- | :--- | :--- | | Silver Lake Equityholders | 38.5% | 68.6% | | Ariel Emanuel | 9.8% | 17.1% | | Patrick Whitesell | 9.1% | 16.6% | | **All directors and executive officers as a group** | **50.3%** | **89.3%** | - The ownership structure includes multiple classes of stock, with Class Y common stock carrying **20 votes per share** and Class A and Class X common stock each carrying **one vote per share**, concentrating control among Class Y holders[268](index=268&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) The company has a formal policy for reviewing related party transactions and is a "controlled company" due to concentrated voting power, exempting it from certain independence requirements - The company has a written policy for the review and approval of related person transactions by the Audit Committee[271](index=271&type=chunk) - A Stockholders Agreement with Messrs. Emanuel, Whitesell, and Silver Lake Equityholders governs board nominations and voting agreements, solidifying their control[277](index=277&type=chunk) - The company entered into Tax Receivable Agreements (TRAs) requiring it to pay **85% of realized cash tax savings** from certain tax attributes to pre-IPO investors[280](index=280&type=chunk) - The UFC Buyout involved acquiring the remaining interests in UFC Parent from other holders, including affiliates of Silver Lake and company executives, in exchange for cash, stock, and rights under the TRAs[282](index=282&type=chunk)[284](index=284&type=chunk) - The company is a "**controlled company**" under NYSE rules, exempting it from requirements to have a majority-independent board and fully independent compensation and nominating committees[293](index=293&type=chunk) - The board has determined that directors Ursula Burns, Elon Musk, Jacqueline Reses, and Fawn Weaver are independent[293](index=293&type=chunk) [Principal Accounting Fees and Services](index=101&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Deloitte & Touche LLP served as the independent auditor, with total fees of **$15.7 million in 2021**, primarily driven by **$7.3 million in audit-related fees** for the IPO Fees Paid to Independent Registered Public Accounting Firm (in thousands) | Fee Category | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $8,230,959 | $8,006,777 | | Audit-Related Fees | $7,293,279 | $1,736,890 | | Tax Fees | $197,736 | $304,562 | | All Other Fees | - | - | | **Total Fees** | **$15,721,974** | **$10,048,229** | - Audit-Related Fees in 2021 were primarily for professional services related to the company's IPO, including work on its S-1 registration statements and due diligence[295](index=295&type=chunk) - The audit committee has a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor[296](index=296&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=101&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including corporate documents and material contracts - This section contains a comprehensive list of all exhibits filed with the 10-K report, including foundational corporate documents, debt agreements, and material contracts[298](index=298&type=chunk)[300](index=300&type=chunk) [Form 10-K Summary](index=110&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[309](index=309&type=chunk)

Start Time: 16:30 January 1, 0000 5:08 PM ET Endeavor Group Holdings, Inc. (NYSE:EDR) Q3 2021 Earnings Conference Call November 15, 2021, 16:30 PM ET Company Participants Ari Emanuel - CEO Jason Lublin - CFO James Marsh - SVP of IR Conference Call Participants Ben Swinburne - Morgan Stanley Alexia Quadrani - JPMorgan Stephen Laszczyk - Goldman Sachs David Joyce - Barclays Jason Bazinet - Citi Meghan Durkin - Credit Suisse Rich Greenfield - LightShed Partners Connor Murphy - Deutsche Bank Operator Good after ...

Table of Contents 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 September 30, 2021 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 (Stat ...

Endeavor Group Holdings, Inc. (NYSE:EDR) Q2 2021 Earnings Conference Call August 16, 2021 4:30 PM ET Corporate Participants Samanta Stewart - Senior Vice President & Head-Investor Relations Ari Emanuel - Chief Executive Officer Jason Lublin - Chief Financial Officer Mark Shapiro - President ConferenceCall Participants John Hodulik - UBS Kutgun Maral - RBC Capital Markets Ben Swinburne - Morgan Stanley Meghan Durkin - Credit Suisse Jason Bazinet - Citi David Joyce - Barclays Operator Hi. Welcome to Endeavor’ ...