WWE Announces 2013 Q1 Results: Revenues Flat , PPV Up, Vince McMahon Comments
Depreciation and amortization
Depreciation and amortization expense totaled $5.2 million for the current year quarter as compared to $4.0 million in the prior year quarter. The increase in depreciation and amortization expense derives from our investment in assets to support our efforts to launch a potential network.
Investment and Other (Expense) Income
Investment income, interest and other expense, net, yielded expense of $1.3 million compared to income of $0.5 million in the prior year quarter, reflecting incremental expenses associated with other non-income taxes and realized foreign exchange losses as compared to gains in the prior year quarter.
Effective tax rate
In the current quarter, the effective tax rate was 37% as compared to 7% in the prior year quarter. The 7% rate in the prior year quarter was primarily due to the recognition of a $4.1 million benefit related to previously unrecognized tax benefits.
Net cash used in operating activities was $5.9 million for the three months ended March 31, 2013 as compared to $32.4 million generated by operating activities in the prior year quarter. This $38.3 million decrease was driven by an approximate $12.3 million reduction in operating performance, an $11.0 million increase in the annual payout of management incentive compensation (with the return to a more normalized level of management compensation in 2012), an $8.0 million impact due to the recognition of an advance associated with the termination of our video game license with THQ, and a $5.3 million increase in net tax payments. Additionally, changes in working capital associated with our international live event tours and pay-per-view events contributed to the decline in net cash flow provided by operating activities compared to the prior year quarter.
Purchases of property and equipment and other assets declined by $8.4 million from the prior year period, primarily due to lower investment in assets to support our efforts to create and distribute new content, including through a potential network.