LOS ANGELES, July 26, 2018
/PRNewswire/ --
Highlights (year-over-year):
- Revenue Up 7% for the Quarter to $2.9
Billion
- Operating Income Up 19% for the Quarter to $135 Million
- Adjusted Operating Income Up 18% for the Quarter to
$260 Million
- Event-Related Deferred Revenue of $1.6 Billion as of June
30
- Concert Tickets Sold for 2018 Shows Nearly 70 Million, Up
$3 Million through July
- Sponsorship & Advertising Committed Net Revenue Up 12%
through July
- Ticketmaster Fee-Bearing GTV Up 15% through July
Live Nation Entertainment (NYSE: LYV) today released financial
results for the three and six months ended June 30, 2018.
The company continued its strong performance through the second
quarter, with operating income up 19%, adjusted operating income
("AOI") up 18% and revenue up 7%. Each of our businesses
contributed to these results, all delivering double-digit operating
income and AOI growth for the quarter.
We have built the industry's most scalable and unparalleled live
platform, bringing over 550 million fans in 40 countries to live
events each year. With our key metrics in concerts, sponsorship and
ticketing all pacing ahead of last year, we are confident that in
2018 we will again deliver double-digit operating income and AOI
growth for the company.
Concerts Global Platform Growth
Starting with the concerts business, through July we have sold
approximately 70 million tickets to shows this year, almost three
million more tickets than at this point last year, putting us on
track to have over 90 million fans attend our concerts this
year.
In the second quarter, we promoted more than 9,000 shows for
over 25 million fans, delivering an 11% increase in operating
income, a 13% increase in AOI and 6% revenue growth.
As we previously indicated, this year will be particularly
strong in our amphitheaters, with attendance up double-digits
through the second quarter, and on track to grow by three million
fans for the full year. Given our ability to drive high-margin
on-site spending with this audience, these additional fans are
highly profitable.
At the same time, we continue improving the on-site experience
at our amphitheaters, driving increased spend per fan with
additional points of sale, improved product mix and optimized
pricing. From this and other initiatives, we expect ancillary spend
per fan growth to accelerate this year, increasing by between
$2.50 and $3.00 per head.
We also continue to capture greater value for the artists and
Live Nation through pricing optimization, delivering more of the
market value to artists. As a result, average ticket pricing is up
double-digits in amphitheaters and arenas so far this year, driving
an anticipated $500 million increase
in revenue for the year, assuming consistent price increases
continue.
Through the second quarter, we have booked over 5,000 arena and
amphitheater shows, up 18% over this point last year, putting us on
track for over 90 million tickets this year at 32,000 shows and to
deliver double-digit operating income and AOI growth in our
concerts business for the year.
Sponsorship & Advertising Delivered Continued
Growth
Our sponsorship business continues to grow rapidly, with
operating income up 14%, AOI up 14% and revenue up 12% for the
quarter. The strength of our platform and our ability to provide
direct engagement with our 90 million fans has enabled us to
continue building relationships with strategic brands that have
driven much of our growth. This group accounts for over 75% of our
total sponsorship and the number of these sponsors has grown
double-digits this year as we have added relationships with
companies such as American Eagle, General Mills and Rémy Martin. As
a result, the committed spend by these strategic sponsors is also
up double-digits through mid-July.
Festivals provide a key opportunity for sponsors to engage fans
at a time when they are uniquely receptive to such brand
messages. Our European festivals in particular have grown
strongly in the second quarter, with revenue per fan at these
festivals up 12%. Overall, through July we are pacing double-digits
ahead of last year in committed net revenue, with over 90% of our
planned net revenue for the year committed. Given this, we
currently expect to deliver double-digit operating income and AOI
growth in sponsorship again this year.
Ticketmaster Marketplace Growing
Ticketmaster continues to demonstrate that it is the best
marketplace for venues, teams and artists to sell tickets to fans
globally, with gross transaction value ("GTV") on fee-bearing
tickets up 11% globally this quarter. As a result, for the quarter
Ticketmaster's operating income was up 12%, AOI was up 15% and
revenue was up 13%.
At its core, Ticketmaster continues to be the most effective
ticketing platform in the world, with the technology to service
venues, sports teams and artists, and with the marketplace to
attract and convert ticket buyers.
Our digital ticketing roll-out is proceeding on plan, with the
first phase in 2018 focused on deploying our Presence access
control systems. To date, we have installed Presence systems
in 125 venues, with another 75 venues planned in the second half of
this year, positioning us to have at least 60 million fans using
this system next year.
In addition to building technologies to better serve our venues,
artists and sports teams, we continue investing to make
Ticketmaster an even better marketplace for fans to buy tickets. In
broadening options for fans, we have increased the number of events
listed on Ticketmaster by 16% this year to almost 280,000 events
through June.
From a fan behavior standpoint, we continue to see an ongoing
shift to mobile and, following a redesigned purchase experience,
mobile fee-bearing ticket sales are up 34% for the year, now
accounting for 40% of all fee-bearing ticket sales, with mobile
conversion rates up double-digits.
Overall, Ticketmaster's results are validating our strategy of
delivering an efficient marketplace for fans to buy tickets while
providing a great enterprise software solution to venues, teams and
artists looking to maximize the value of their events. With this
strategy's continued success, we currently expect to again deliver
high single-digit growth in ticketing operating income and AOI this
year.
Summary
2018 is on track for the company to deliver double-digit
operating income and AOI growth along with strong gains in revenue,
operating cash flow and free cash flow — adjusted. Each of our
businesses is contributing to this success, as we put on more
concerts for a greater numbers of fans, continue to monetize fans
who come to the shows, sell more tickets to events of all types and
further demonstrate the value of over 90 million fans to
sponsors.
Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.
The company will webcast a teleconference today at 5:00 p.m. Eastern Time to discuss its financial
performance. Interested parties should visit the Events &
Webcasts section of the company's website at
investors.livenationentertainment.com to listen to the
webcast. Supplemental statistical and financial information to be
provided on the call, if any, will be available under the Reports
section at the same link. A replay of the webcast will also be
available on the Live Nation website.
Notice Regarding Financial Statements
The company has provided certain unaudited financial statements
at the end of this press release for reference. These
unaudited financial statements should be read in conjunction with
the full unaudited financial statements, and the notes thereto, set
forth in the company's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission today and available on the SEC's
website at sec.gov.
About Live Nation Entertainment
Live Nation Entertainment, Inc. (NYSE: LYV) is the world's
leading live entertainment company comprised of global market
leaders: Ticketmaster, Live Nation Concerts, and Live Nation Media
& Sponsorship. For additional information, visit
www.livenationentertainment.com.
|
FINANCIAL
HIGHLIGHTS – 2nd QUARTER
|
|
(unaudited; $ in
millions)
|
|
|
Q2 2018
Reported
|
|
Q2 2017
Reported
|
|
Growth
|
|
Q2 2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
2,380.7
|
|
|
$
|
2,249.9
|
|
|
6
|
%
|
|
$
|
2,341.9
|
|
|
4
|
%
|
|
Sponsorship &
Advertising
|
139.9
|
|
|
124.6
|
|
|
12
|
%
|
|
137.9
|
|
|
11
|
%
|
|
Ticketing
|
351.2
|
|
|
311.2
|
|
|
13
|
%
|
|
347.1
|
|
|
12
|
%
|
|
Other and
Eliminations
|
(3.6)
|
|
|
(2.1)
|
|
|
(71%)
|
|
|
(3.6)
|
|
|
(71%)
|
|
|
$
|
2,868.3
|
|
|
$
|
2,683.6
|
|
|
7
|
%
|
|
$
|
2,823.3
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
41.8
|
|
|
$
|
37.5
|
|
|
11
|
%
|
|
$
|
41.8
|
|
|
11
|
%
|
|
Sponsorship &
Advertising
|
80.5
|
|
|
70.4
|
|
|
14
|
%
|
|
79.1
|
|
|
12
|
%
|
|
Ticketing
|
49.1
|
|
|
43.7
|
|
|
12
|
%
|
|
49.2
|
|
|
13
|
%
|
|
Other and
Eliminations
|
(3.6)
|
|
|
(5.2)
|
|
|
31
|
%
|
|
(3.6)
|
|
|
31
|
%
|
|
Corporate
|
(33.1)
|
|
|
(33.0)
|
|
|
—
|
|
|
(33.1)
|
|
|
—
|
|
|
$
|
134.7
|
|
|
$
|
113.4
|
|
|
19
|
%
|
|
$
|
133.4
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
99.5
|
|
|
$
|
88.4
|
|
|
13
|
%
|
|
$
|
98.4
|
|
|
11
|
%
|
|
Sponsorship &
Advertising
|
88.1
|
|
|
77.1
|
|
|
14
|
%
|
|
86.7
|
|
|
12
|
%
|
|
Ticketing
|
102.9
|
|
|
89.1
|
|
|
15
|
%
|
|
102.2
|
|
|
15
|
%
|
|
Other and
Eliminations
|
(4.5)
|
|
|
(6.0)
|
|
|
25
|
%
|
|
(4.5)
|
|
|
25
|
%
|
|
Corporate
|
(25.7)
|
|
|
(27.2)
|
|
|
6
|
%
|
|
(25.7)
|
|
|
6
|
%
|
|
$
|
260.3
|
|
|
$
|
221.4
|
|
|
18
|
%
|
|
$
|
257.1
|
|
|
16
|
%
|
|
FINANCIAL
HIGHLIGHTS – 6 MONTHS
|
|
(unaudited; $ in
millions)
|
|
|
6 Months
2018
Reported
|
|
6 Months
2017
Reported
|
|
Growth
|
|
6 Months
2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
3,419.7
|
|
|
$
|
3,113.1
|
|
|
10
|
%
|
|
$
|
3,345.6
|
|
|
7
|
%
|
|
Sponsorship &
Advertising
|
214.5
|
|
|
188.6
|
|
|
14
|
%
|
|
209.8
|
|
|
11
|
%
|
|
Ticketing
|
723.6
|
|
|
624.0
|
|
|
16
|
%
|
|
712.8
|
|
|
14
|
%
|
|
Other and
Eliminations
|
(7.1)
|
|
|
0.8
|
|
|
*
|
|
(7.1)
|
|
|
*
|
|
$
|
4,350.7
|
|
|
$
|
3,926.5
|
|
|
11
|
%
|
|
$
|
4,261.1
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(22.1)
|
|
|
$
|
(38.3)
|
|
|
42
|
%
|
|
$
|
(21.2)
|
|
|
45
|
%
|
|
Sponsorship &
Advertising
|
111.6
|
|
|
96.8
|
|
|
15
|
%
|
|
108.2
|
|
|
12
|
%
|
|
Ticketing
|
113.9
|
|
|
98.3
|
|
|
16
|
%
|
|
115.4
|
|
|
17
|
%
|
|
Other and
Eliminations
|
(6.9)
|
|
|
(5.0)
|
|
|
(38%)
|
|
|
(6.9)
|
|
|
(38%)
|
|
|
Corporate
|
(67.8)
|
|
|
(59.7)
|
|
|
(14%)
|
|
|
(67.8)
|
|
|
(14%)
|
|
|
$
|
128.7
|
|
|
$
|
92.1
|
|
|
40
|
%
|
|
$
|
127.7
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
83.9
|
|
|
$
|
66.3
|
|
|
27
|
%
|
|
$
|
81.7
|
|
|
23
|
%
|
|
Sponsorship &
Advertising
|
127.0
|
|
|
110.4
|
|
|
15
|
%
|
|
123.6
|
|
|
12
|
%
|
|
Ticketing
|
223.9
|
|
|
192.4
|
|
|
16
|
%
|
|
223.4
|
|
|
16
|
%
|
|
Other and
Eliminations
|
(8.8)
|
|
|
(6.5)
|
|
|
(35%)
|
|
|
(8.8)
|
|
|
(35%)
|
|
|
Corporate
|
(51.9)
|
|
|
(49.1)
|
|
|
(6%)
|
|
|
(51.9)
|
|
|
(6%)
|
|
|
$
|
374.1
|
|
|
$
|
313.5
|
|
|
19
|
%
|
|
$
|
368.0
|
|
|
17
|
%
|
|
|
* percentages are
not meaningful
|
- As of June 30, 2018, total cash
and cash equivalents were $2.3
billion, which includes $734
million in ticketing client cash and $458 million in free cash.
- Event-related deferred revenue was $1.6
billion as of June 30, 2018,
compared to $1.5 billion as of the
same date in 2017.
- For the quarter ended June 30,
2018, net cash used in operating activities was $256 million and free cash flow — adjusted was
$176 million. For the six months, net
cash provided by operating activities was $520 million and free cash flow — adjusted was
$222 million.
- We currently expect capital expenditures for the full year to
be approximately $250 million, with
approximately 50% to be revenue generating capital
expenditures.
- We currently expect the amortization of non-recoupable
ticketing contract advances for the full year 2018 to be
approximately in line with the total amount in 2017.
|
KEY OPERATING
METRICS
|
|
|
Q2
2018
|
|
Q2
2017
|
|
6 Months
2018
|
|
6 Months
2017
|
|
(in thousands
except estimated events)
|
|
Concerts
(1)
|
|
|
|
|
|
|
|
|
Events:
|
|
|
|
|
|
|
|
|
North
America
|
6,321
|
|
|
5,182
|
|
|
11,108
|
|
|
8,930
|
|
|
International
|
2,756
|
|
|
2,543
|
|
|
5,142
|
|
|
4,751
|
|
|
Total estimated
events
|
9,077
|
|
|
7,725
|
|
|
16,250
|
|
|
13,681
|
|
|
Fans:
|
|
|
|
|
|
|
|
|
North
America
|
16,079
|
|
|
15,325
|
|
|
22,923
|
|
|
21,100
|
|
|
International
|
9,145
|
|
|
9,453
|
|
|
14,593
|
|
|
14,577
|
|
|
Total estimated
fans
|
25,224
|
|
|
24,778
|
|
|
37,516
|
|
|
35,677
|
|
|
Ticketing
(2)
|
|
|
|
|
|
|
|
|
Fee-bearing
tickets
|
48,140
|
|
|
47,506
|
|
|
101,168
|
|
|
97,108
|
|
|
Non-fee-bearing
tickets
|
50,522
|
|
|
51,416
|
|
|
115,019
|
|
|
118,750
|
|
|
Total estimated
tickets
|
98,662
|
|
|
98,922
|
|
|
216,187
|
|
|
215,858
|
|
|
|
|
(1)
|
Events generally
represent a single performance by an artist. Fans generally
represent the number of people who attend an event. Festivals are
counted as one event in the quarter in which the festival begins,
but the number of fans is based on the days the fans were present
at the festival and thus can be reported across multiple quarters.
Events and fan attendance metrics are estimated each
quarter.
|
|
(2)
|
The fee-bearing
tickets estimated above include primary and secondary tickets that
are sold using our Ticketmaster systems or that we issue through
affiliates. This metric includes primary tickets sold during the
period regardless of event timing, except for our own events where
our concert promoters control ticketing and which are reported as
the events occur. The non-fee-bearing tickets estimated above
include primary tickets sold using our Ticketmaster systems,
through season seat packages and our venue clients' box offices,
along with tickets sold on our 'do it yourself'
platform.
|
Reconciliation of Certain Non-GAAP Measures to Their Most
Directly Comparable GAAP Measures (Unaudited)
Reconciliation of Free Cash Flow —
Adjusted to Net Cash Provided by Operating
Activities
|
($ in
millions)
|
Q2
2018
|
|
Q2
2017
|
|
Net cash provided
by (used in) operating activities
|
$
|
(255.7)
|
|
|
$
|
43.0
|
|
|
Changes in operating
assets and liabilities (working capital)
|
466.1
|
|
|
148.5
|
|
|
Free cash flow from
earnings
|
$
|
210.4
|
|
|
$
|
191.5
|
|
|
Less: Maintenance
capital expenditures
|
(23.2)
|
|
|
(31.2)
|
|
|
Distributions to noncontrolling interests
|
(11.6)
|
|
|
(6.3)
|
|
|
Free cash flow —
adjusted
|
$
|
175.6
|
|
|
$
|
154.0
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(225.7)
|
|
|
$
|
(96.9)
|
|
|
|
|
|
|
Net cash used in
financing activities
|
$
|
(89.5)
|
|
|
$
|
(19.1)
|
|
|
($ in
millions)
|
6 Months
2018
|
|
6 Months
2017
|
|
Net cash provided
by operating activities
|
$
|
519.8
|
|
|
$
|
804.7
|
|
|
Changes in operating
assets and liabilities (working capital)
|
(225.6)
|
|
|
(550.1)
|
|
|
Free cash flow from
earnings
|
$
|
294.2
|
|
|
$
|
254.6
|
|
|
Less: Maintenance
capital expenditures
|
(41.1)
|
|
|
(55.7)
|
|
|
Distributions to noncontrolling interests
|
(31.1)
|
|
|
(18.5)
|
|
|
Free cash flow —
adjusted
|
$
|
222.0
|
|
|
$
|
180.4
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(314.4)
|
|
|
$
|
(171.9)
|
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
$
|
314.7
|
|
|
$
|
(24.2)
|
|
Reconciliation of Free Cash to Cash and Cash
Equivalents
|
($ in
millions)
|
June 30,
2018
|
|
Cash and cash
equivalents
|
$
|
2,293.3
|
|
|
Client
cash
|
(733.6)
|
|
|
Deferred revenue —
event-related
|
(1,583.3)
|
|
|
Accrued artist
fees
|
(125.7)
|
|
|
Collections on behalf
of others
|
(58.2)
|
|
|
Prepaid expenses —
event-related
|
665.1
|
|
|
Free
cash
|
$
|
457.6
|
|
Forward-Looking Statements, Non-GAAP Financial Measures and
Reconciliations:
Certain statements in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include, but are not limited to, statements regarding
anticipated double-digit operating income and adjusted operating
income growth for the company in 2018, with expected strong gains
in revenue, operating cash flow and free cash flow - adjusted,
including expected double-digit operating income and adjusted
operating income growth in concerts and sponsorship &
advertising, as well as expected high single-digit operating income
and adjusted operating income growth in ticketing; anticipated
attendance of over 90 million fans at the company's concerts in
2018; the strength of the company's amphitheaters in 2018, with
growth of three million fans anticipated; anticipated acceleration
of ancillary spend per fan in 2018 by between $2.50 and $3.00 per
head; an anticipated $500 million
increase in concerts revenue in 2018, assuming consistent price
increases continue as part of the company's pricing optimization
initiatives; and the company's plans to install its Presence access
control systems at an additional 75 venues in the second half of
2018, positioning the company to have at least 60 million fans
using this system in 2019. Live Nation wishes to caution you that
there are some known and unknown factors that could cause actual
results to differ materially from any future results, performance
or achievements expressed or implied by such forward-looking
statements, including but not limited to operational challenges in
achieving strategic objectives and executing on the company's
plans, the risk that the company's markets do not evolve as
anticipated, the potential impact of any economic slowdown and
operational challenges associated with selling tickets and staging
events.
Live Nation refers you to the documents it files from time to
time with the U.S. Securities and Exchange Commission, or SEC,
specifically the section titled "Item 1A. Risk Factors" of the
company's most recent Annual Report filed on Form 10-K, and
Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K,
which contain and identify other important factors that could cause
actual results to differ materially from those contained in the
company's projections or forward-looking statements. You are
cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date on which they are
made. All subsequent written and oral forward-looking
statements by or concerning Live Nation are expressly qualified in
their entirety by the cautionary statements above. Live
Nation does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise.
This press release contains certain non-GAAP financial measures
as defined by SEC Regulation G. A reconciliation of each such
measure to its most directly comparable GAAP financial measure,
together with an explanation of why management believes that these
non-GAAP financial measures provide useful information to
investors, is provided herein.
Adjusted Operating Income (Loss), or AOI, is a non-GAAP
financial measure that we define as operating income (loss) before
certain stock-based compensation expense, loss (gain) on disposal
of operating assets, depreciation and amortization (including
goodwill impairment), amortization of non-recoupable ticketing
contract advances and acquisition expenses (including transaction
costs, changes in the fair value of acquisition-related contingent
consideration obligations, and acquisition-related severance and
compensation). We use AOI to evaluate the performance of our
operating segments. We believe that information about AOI assists
investors by allowing them to evaluate changes in the operating
results of our portfolio of businesses separate from
non-operational factors that affect net income (loss), thus
providing insights into both operations and the other factors that
affect reported results. AOI is not calculated or presented in
accordance with GAAP. A limitation of the use of AOI as a
performance measure is that it does not reflect the periodic costs
of certain amortizing assets used in generating revenue in our
business. Accordingly, AOI should be considered in addition to, and
not as a substitute for, operating income (loss), net income
(loss), and other measures of financial performance reported in
accordance with GAAP. Furthermore, this measure may vary among
other companies; thus, AOI as presented herein may not be
comparable to similarly titled measures of other companies.
Constant Currency is a non-GAAP financial measure. We calculate
currency impacts as the difference between current period activity
translated using the current period's currency exchange rates and
the comparable prior period's currency exchange rates. We present
constant currency information to provide a framework for assessing
how our underlying businesses performed excluding the effect of
foreign currency rate fluctuations.
Free Cash Flow — Adjusted, or FCF, is a non-GAAP financial
measure that the company defines as net cash provided by (used in)
operating activities less changes in operating assets and
liabilities, less maintenance capital expenditures, less
distributions to noncontrolling interest partners. The company uses
FCF among other measures, to evaluate the ability of its operations
to generate cash that is available for purposes other than
maintenance capital expenditures. The company believes that
information about FCF provides investors with an important
perspective on the cash available to service debt, make
acquisitions, and for revenue generating capital
expenditures. FCF is not calculated or presented in
accordance with GAAP. A limitation of the use of FCF as a
performance measure is that it does not necessarily represent funds
available for operations and is not necessarily a measure of the
company's ability to fund its cash needs. Accordingly, FCF
should be considered in addition to, and not as a substitute for,
net cash provided by (used in) operating activities and other
measures of financial performance reported in accordance with
GAAP. Furthermore, this measure may vary among other
companies; thus, FCF as presented herein may not be comparable to
similarly titled measures of other companies.
Free Cash is a non-GAAP financial measure that the company
defines as cash and cash equivalents less ticketing-related client
funds, less event-related deferred revenue, less accrued expenses
due to artists and cash collected on behalf of others, plus
event-related prepaids. The company uses free cash as a proxy
for how much cash it has available to, among other things,
optionally repay debt balances, make acquisitions and fund revenue
generating capital expenditures. Free cash is not calculated
or presented in accordance with GAAP. A limitation of the use
of free cash as a performance measure is that it does not
necessarily represent funds available from operations and it is not
necessarily a measure of our ability to fund our cash needs.
Accordingly, free cash should be considered in addition to, and not
as a substitute for, cash and cash equivalents and other measures
of financial performance reported in accordance with GAAP.
Furthermore, this measure may vary among other companies; thus,
free cash as presented herein may not be comparable to similarly
titled measures of other companies.
|
Reconciliations of
Certain Non-GAAP Measures to Their Most Directly Comparable GAAP
Measures (Unaudited)
|
|
|
Reconciliation
of Adjusted Operating Income (Loss) to Operating Income
(Loss)
|
|
|
($ in
millions)
|
Operating
income
(loss)
|
|
Stock-based
compensation
expense
|
|
Loss
(gain) on
disposal
of
operating
assets
|
|
Depreciation
and
amortization
|
|
Amortization
of
non-recoupable
ticketing
contract
advances
|
|
Acquisition
expenses
|
|
Adjusted
operating
income
(loss)
reported
|
|
Foreign
exchange
impact
|
|
Adjusted
operating
income
(loss)
constant
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
41.8
|
|
|
$
|
4.0
|
|
|
$
|
0.1
|
|
|
$
|
46.5
|
|
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
99.5
|
|
|
$
|
(1.1)
|
|
|
$
|
98.4
|
|
|
Sponsorship &
Advertising
|
80.5
|
|
|
0.5
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
88.1
|
|
|
(1.4)
|
|
|
86.7
|
|
|
Ticketing
|
49.1
|
|
|
1.2
|
|
|
—
|
|
|
35.0
|
|
|
17.4
|
|
|
0.2
|
|
|
102.9
|
|
|
(0.7)
|
|
|
102.2
|
|
|
Other and
Eliminations
|
(3.6)
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(1.1)
|
|
|
—
|
|
|
(4.5)
|
|
|
—
|
|
|
(4.5)
|
|
|
Corporate
|
(33.1)
|
|
|
6.4
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(25.7)
|
|
|
—
|
|
|
(25.7)
|
|
|
Total Live
Nation
|
$
|
134.7
|
|
|
$
|
12.1
|
|
|
$
|
0.1
|
|
|
$
|
89.8
|
|
|
$
|
16.3
|
|
|
$
|
7.3
|
|
|
$
|
260.3
|
|
|
$
|
(3.2)
|
|
|
$
|
257.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
37.5
|
|
|
$
|
2.0
|
|
|
$
|
0.1
|
|
|
$
|
46.1
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
|
$
|
88.4
|
|
|
$
|
—
|
|
|
$
|
88.4
|
|
|
Sponsorship &
Advertising
|
70.4
|
|
|
0.3
|
|
|
—
|
|
|
6.4
|
|
|
—
|
|
|
—
|
|
|
77.1
|
|
|
—
|
|
|
77.1
|
|
|
Ticketing
|
43.7
|
|
|
1.1
|
|
|
—
|
|
|
27.6
|
|
|
15.6
|
|
|
1.1
|
|
|
89.1
|
|
|
—
|
|
|
89.1
|
|
|
Other and
Eliminations
|
(5.2)
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(0.9)
|
|
|
—
|
|
|
(6.0)
|
|
|
—
|
|
|
(6.0)
|
|
|
Corporate
|
(33.0)
|
|
|
4.8
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(27.2)
|
|
|
—
|
|
|
(27.2)
|
|
|
Total Live
Nation
|
$
|
113.4
|
|
|
$
|
8.2
|
|
|
$
|
0.1
|
|
|
$
|
81.2
|
|
|
$
|
14.7
|
|
|
$
|
3.8
|
|
|
$
|
221.4
|
|
|
$
|
—
|
|
|
$
|
221.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(22.1)
|
|
|
$
|
5.9
|
|
|
$
|
0.1
|
|
|
$
|
92.1
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
83.9
|
|
|
$
|
(2.2)
|
|
|
$
|
81.7
|
|
|
Sponsorship &
Advertising
|
111.6
|
|
|
0.7
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
|
—
|
|
|
127.0
|
|
|
(3.4)
|
|
|
123.6
|
|
|
Ticketing
|
113.9
|
|
|
2.3
|
|
|
—
|
|
|
68.6
|
|
|
38.6
|
|
|
0.5
|
|
|
223.9
|
|
|
(0.5)
|
|
|
223.4
|
|
|
Other and
Eliminations
|
(6.9)
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
(2.3)
|
|
|
—
|
|
|
(8.8)
|
|
|
—
|
|
|
(8.8)
|
|
|
Corporate
|
(67.8)
|
|
|
14.0
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
(51.9)
|
|
|
—
|
|
|
(51.9)
|
|
|
Total Live
Nation
|
$
|
128.7
|
|
|
$
|
22.9
|
|
|
$
|
0.1
|
|
|
$
|
177.7
|
|
|
$
|
36.3
|
|
|
$
|
8.4
|
|
|
$
|
374.1
|
|
|
$
|
(6.1)
|
|
|
$
|
368.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(38.3)
|
|
|
$
|
4.7
|
|
|
$
|
(0.6)
|
|
|
$
|
92.6
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
66.3
|
|
|
$
|
—
|
|
|
$
|
66.3
|
|
|
Sponsorship &
Advertising
|
96.8
|
|
|
0.7
|
|
|
—
|
|
|
12.9
|
|
|
—
|
|
|
—
|
|
|
110.4
|
|
|
—
|
|
|
110.4
|
|
|
Ticketing
|
98.3
|
|
|
2.0
|
|
|
—
|
|
|
54.1
|
|
|
36.5
|
|
|
1.5
|
|
|
192.4
|
|
|
—
|
|
|
192.4
|
|
|
Other and
Eliminations
|
(5.0)
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(1.7)
|
|
|
—
|
|
|
(6.5)
|
|
|
—
|
|
|
(6.5)
|
|
|
Corporate
|
(59.7)
|
|
|
8.7
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
(49.1)
|
|
|
—
|
|
|
(49.1)
|
|
|
Total Live
Nation
|
$
|
92.1
|
|
|
$
|
16.1
|
|
|
$
|
(0.6)
|
|
|
$
|
161.7
|
|
|
$
|
34.8
|
|
|
$
|
9.4
|
|
|
$
|
313.5
|
|
|
$
|
—
|
|
|
$
|
313.5
|
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(unaudited)
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
(in
thousands)
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,293,264
|
|
|
$
|
1,825,322
|
|
|
Accounts receivable,
less allowance of $32,245 and $32,755, respectively
|
949,422
|
|
|
725,304
|
|
|
Prepaid
expenses
|
953,966
|
|
|
546,713
|
|
|
Restricted
cash
|
7,049
|
|
|
3,500
|
|
|
Other current
assets
|
59,655
|
|
|
51,903
|
|
|
Total current
assets
|
4,263,356
|
|
|
3,152,742
|
|
|
Property, plant and
equipment
|
|
|
|
|
Land, buildings and
improvements
|
961,655
|
|
|
955,937
|
|
|
Computer equipment
and capitalized software
|
703,004
|
|
|
610,924
|
|
|
Furniture and other
equipment
|
318,336
|
|
|
312,962
|
|
|
Construction in
progress
|
97,327
|
|
|
133,906
|
|
|
2,080,322
|
|
|
2,013,729
|
|
|
Less accumulated
depreciation
|
1,189,883
|
|
|
1,127,793
|
|
|
890,439
|
|
|
885,936
|
|
|
Intangible
assets
|
|
|
|
|
Definite-lived
intangible assets, net
|
736,888
|
|
|
729,265
|
|
|
Indefinite-lived
intangible assets
|
368,960
|
|
|
369,023
|
|
|
Goodwill
|
1,823,948
|
|
|
1,754,589
|
|
|
Other long-term
assets
|
869,218
|
|
|
612,708
|
|
|
Total
assets
|
$
|
8,952,809
|
|
|
$
|
7,504,263
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable,
client accounts
|
$
|
900,386
|
|
|
$
|
948,637
|
|
|
Accounts
payable
|
134,195
|
|
|
85,666
|
|
|
Accrued
expenses
|
1,180,102
|
|
|
1,109,246
|
|
|
Deferred
revenue
|
1,846,156
|
|
|
925,220
|
|
|
Current portion of
long-term debt, net
|
84,946
|
|
|
347,593
|
|
|
Other current
liabilities
|
60,966
|
|
|
160,638
|
|
|
Total current
liabilities
|
4,206,751
|
|
|
3,577,000
|
|
|
Long-term debt,
net
|
2,743,104
|
|
|
1,952,366
|
|
|
Deferred income
taxes
|
134,974
|
|
|
137,635
|
|
|
Other long-term
liabilities
|
169,266
|
|
|
174,391
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
Redeemable
noncontrolling interests
|
293,194
|
|
|
244,727
|
|
|
Stockholders'
equity
|
|
|
|
|
Common
stock
|
2,079
|
|
|
2,069
|
|
|
Additional paid-in
capital
|
2,337,691
|
|
|
2,374,006
|
|
|
Accumulated
deficit
|
(1,044,019)
|
|
|
(1,079,472)
|
|
|
Cost of shares held
in treasury
|
(6,865)
|
|
|
(6,865)
|
|
|
Accumulated other
comprehensive loss
|
(125,837)
|
|
|
(108,542)
|
|
|
Total Live Nation
stockholders' equity
|
1,163,049
|
|
|
1,181,196
|
|
|
Noncontrolling
interests
|
242,471
|
|
|
236,948
|
|
|
Total
equity
|
1,405,520
|
|
|
1,418,144
|
|
|
Total liabilities
and equity
|
$
|
8,952,809
|
|
|
$
|
7,504,263
|
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
(as
adjusted)
|
|
(in thousands
except share and per share data)
|
|
Revenue
|
$
|
2,868,315
|
|
|
$
|
2,683,585
|
|
|
$
|
4,350,699
|
|
|
$
|
3,926,464
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Direct operating
expenses
|
2,135,107
|
|
|
2,022,471
|
|
|
3,067,191
|
|
|
2,797,732
|
|
|
Selling, general and
administrative expenses
|
476,438
|
|
|
434,385
|
|
|
911,049
|
|
|
817,693
|
|
|
Depreciation and
amortization
|
89,785
|
|
|
81,165
|
|
|
177,656
|
|
|
161,697
|
|
|
Loss (gain) on
disposal of operating assets
|
108
|
|
|
115
|
|
|
146
|
|
|
(544)
|
|
|
Corporate
expenses
|
32,152
|
|
|
32,016
|
|
|
65,962
|
|
|
57,819
|
|
|
Operating
income
|
134,725
|
|
|
113,433
|
|
|
128,695
|
|
|
92,067
|
|
|
Interest
expense
|
35,992
|
|
|
26,878
|
|
|
65,733
|
|
|
52,888
|
|
|
Loss (gain) on
extinguishment of debt
|
(473)
|
|
|
1,049
|
|
|
2,470
|
|
|
1,049
|
|
|
Interest
income
|
(2,705)
|
|
|
(1,031)
|
|
|
(3,888)
|
|
|
(1,976)
|
|
|
Equity in loss
(earnings) of nonconsolidated affiliates
|
313
|
|
|
(536)
|
|
|
(3,402)
|
|
|
(2,876)
|
|
|
Other expense
(income), net
|
6,443
|
|
|
(3,466)
|
|
|
6,771
|
|
|
(6,308)
|
|
|
Income before income
taxes
|
95,155
|
|
|
90,539
|
|
|
61,011
|
|
|
49,290
|
|
|
Income tax
expense
|
11,799
|
|
|
9,984
|
|
|
18,683
|
|
|
16,505
|
|
|
Net income
|
83,356
|
|
|
80,555
|
|
|
42,328
|
|
|
32,785
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
13,997
|
|
|
(923)
|
|
|
6,875
|
|
|
(15,700)
|
|
|
Net income
attributable to common stockholders of Live Nation
|
$
|
69,359
|
|
|
$
|
81,478
|
|
|
$
|
35,453
|
|
|
$
|
48,485
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
common share available to common stockholders of Live
Nation
|
$
|
0.25
|
|
|
$
|
0.31
|
|
|
$
|
0.01
|
|
|
$
|
0.08
|
|
|
Diluted net income
per common share available to common stockholders of Live
Nation
|
$
|
0.24
|
|
|
$
|
0.29
|
|
|
$
|
0.01
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
207,331,781
|
|
|
204,688,374
|
|
|
207,031,642
|
|
|
204,212,281
|
|
|
Diluted
|
215,105,119
|
|
|
213,879,152
|
|
|
215,075,203
|
|
|
213,119,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net
income available to common stockholders of Live Nation:
|
|
Net income
attributable to common stockholders of Live Nation
|
$
|
69,359
|
|
|
$
|
81,478
|
|
|
$
|
35,453
|
|
|
$
|
48,485
|
|
|
Accretion of
redeemable noncontrolling interests
|
(17,172)
|
|
|
(18,837)
|
|
|
(33,557)
|
|
|
(31,414)
|
|
|
Net income available
to common stockholders of Live Nation—basic and diluted
|
$
|
52,187
|
|
|
$
|
62,641
|
|
|
$
|
1,896
|
|
|
$
|
17,071
|
|
|
|
|
|
|
|
|
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(unaudited)
|
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
|
|
(as
adjusted)
|
|
(in
thousands)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
42,328
|
|
|
$
|
32,785
|
|
|
Reconciling
items:
|
|
|
|
|
Depreciation
|
85,493
|
|
|
71,713
|
|
|
Amortization
|
92,163
|
|
|
89,984
|
|
|
Amortization of
non-recoupable ticketing contract advances
|
36,285
|
|
|
34,768
|
|
|
Non-cash compensation
expense
|
22,946
|
|
|
16,101
|
|
|
Other, net
|
14,992
|
|
|
9,277
|
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
|
Increase in accounts
receivable
|
(229,016)
|
|
|
(282,075)
|
|
|
Increase in prepaid
expenses and other assets
|
(604,699)
|
|
|
(406,530)
|
|
|
Increase in accounts
payable, accrued expenses and other liabilities
|
112,065
|
|
|
377,770
|
|
|
Increase in deferred
revenue
|
947,269
|
|
|
860,916
|
|
|
Net cash provided by
operating activities
|
519,826
|
|
|
804,709
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Advances of notes
receivable
|
(69,346)
|
|
|
(9,757)
|
|
|
Collection of notes
receivable
|
14,481
|
|
|
2,762
|
|
|
Investments made in
nonconsolidated affiliates
|
(38,201)
|
|
|
(18,209)
|
|
|
Purchases of
property, plant and equipment
|
(100,641)
|
|
|
(128,607)
|
|
|
Cash paid for
acquisitions, net of cash acquired
|
(93,256)
|
|
|
(16,619)
|
|
|
Purchases of
intangible assets
|
(27,620)
|
|
|
(2,078)
|
|
|
Other, net
|
188
|
|
|
568
|
|
|
Net cash used in
investing activities
|
(314,395)
|
|
|
(171,940)
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
long-term debt, net of debt issuance costs
|
857,121
|
|
|
55,549
|
|
|
Payments on long-term
debt
|
(372,650)
|
|
|
(74,207)
|
|
|
Distributions to
noncontrolling interests
|
(31,143)
|
|
|
(18,523)
|
|
|
Purchases and sales
of noncontrolling interests, net
|
(131,093)
|
|
|
(8,106)
|
|
|
Proceeds from
exercise of stock options
|
10,854
|
|
|
32,629
|
|
|
Payments for deferred
and contingent consideration
|
(14,655)
|
|
|
(14,149)
|
|
|
Other, net
|
(3,703)
|
|
|
2,642
|
|
|
Net cash provided by
(used in) financing activities
|
314,731
|
|
|
(24,165)
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(48,671)
|
|
|
82,687
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
471,491
|
|
|
691,291
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,828,822
|
|
|
1,529,575
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
2,300,313
|
|
|
$
|
2,220,866
|
|
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SOURCE Live Nation Entertainment