LOS ANGELES, Nov. 1, 2018 /PRNewswire/ --
Highlights (year-over-year):
- Revenue Up 11% for the Quarter to $3.8 Billion
- Operating Income Up 16% for the Quarter to $234 Million
- Adjusted Operating Income Up 16% for the Quarter to
$386 Million
- Concert Tickets Sold for 2018 Shows Over 85 Million, Up 5
Million through October
- Sponsorship & Advertising Committed Net Revenue Up 13%
through October
- Ticketmaster Fee-Bearing Gross Transaction Value Up 15%
through October
Live Nation Entertainment, Inc. (NYSE: LYV) today released
financial results for the three and nine months ended
September 30, 2018.
Live Nation had its best quarter ever, and we are on track to
deliver another year of record results across revenue, operating
income and adjusted operating income ("AOI"). For the quarter,
revenue was up 11%, operating income was up 16% and AOI was up 16%.
For the nine months, revenue was up 11%, operating income was up
24% and AOI was up 17%. All our divisions — concerts,
sponsorship, and ticketing — each delivered their strongest third
quarter AOI results ever.
Our concerts business is our flywheel, attracting over 33
million fans to shows globally in the quarter, up 12%
year-over-year, which then drove record results in our on-site,
ticketing and sponsorship businesses. Through October, we have sold
85 million tickets for concerts in 2018, up 6% year-on-year, and we
are on track to sell over 90 million tickets this year.
With our strength in concert attendance growth, we are also
seeing similar success in our on-site, sponsorship and ticketing
businesses, giving us confidence that 2018 will be another year of
record results(1) for Live Nation overall and for each
of our divisions.
CONCERTS GLOBAL PLATFORM GROWTH
With continued strong global demand for concerts through the
third quarter, we drove an 8% increase in attendance to 71 million
fans attending our 24,000 shows across 40 countries, driving
revenue up 11%, operating income more than doubling and AOI up 29%
for the nine months.
We have grown our show count by 17% through the third quarter.
At the same time, we have increased the revenue generated by each
show through pricing optimization. Across our arenas and
amphitheaters, our average ticket pricing is up 14%, driven by
front-of-house pricing which is up 25%. Collectively, these
increases have grown artist earnings by over $300 million across roughly 6,000 shows.
This summer, we also saw growth from on-site hospitality
initiatives at our amphitheaters, increasing our average revenue
per fan by nearly $3 to almost
$27. This is an increase of more than
$6 per fan over the past three years,
as we have driven substantial improvements across our food and
beverage, VIP, and parking programs.
With the success of our concerts flywheel, we are promoting more
shows for more fans, more effectively pricing and selling tickets,
and delivering a better fan experience than ever before. As a
result, we will spend over $6 billion producing concerts this
year, making Live Nation far and away the largest financial partner
to musicians.
SPONSORSHIP DOUBLE-DIGIT GROWTH CONTINUES
In our high-margin sponsorship business, we have continued our
double-digit growth this year, with revenue up 11%, operating
income up 11%, and AOI up 12% year-to-date through September, as we
also delivered our best quarterly results ever for our sponsorship
business.
With 1,000 sponsors across our on-site and online platforms,
Live Nation is the global leader in music sponsorship, providing
brands with opportunities to reach our core millennial audience, as
we again add new branded partnerships this quarter including
T-Mobile, Sony, Sterling Wine, and
Subway.
On-site sponsorship continues to be a key growth driver, and for
the nine months our festival sponsorship net revenue is up 12% as
we continue to find innovative ways at scale to connect brands with
the nearly nine million fans attending over 100 festivals
worldwide.
Our other key growth initiative is deepening and broadening our
strategic brand relationships, with now over 70 sponsors investing
on our platform across multiple fronts. Collectively, the committed
spend by this group is up 13% to nearly $350
million through October, accounting for approximately 75% of
our overall sponsorship & advertising revenue.
With over 95% of our expected sponsorship revenue for the year
now contracted, we are confident we will deliver double-digit
operating income and AOI growth in Sponsorship for the full
year.
TICKETMASTER MARKETPLACE CONTINUES TO GROW
Ticketmaster continues building its position as the global
ticketing marketplace leader, with 15% growth year-to-date through
September in global fee-bearing gross transaction value ("GTV"),
driving revenue growth of 13%, operating income growth of 7% and
AOI growth of 11%.
Ticketmaster will deliver almost 500 million tickets worth
approximately $31 billion in GTV
across 28 countries for the full year, making it the world's
largest such marketplace. And the success of our marketplace is
stronger than ever, as all three quarters in 2018 have been among
our top five quarters ever for recognized GTV.
During the third quarter, we continued our Presence digital
ticketing rollout to NFL stadiums and many of our Live Nation
buildings, bringing the installed base to 177 venues. In the third
quarter at these venues, we held over 1,500 events with more than
three million fans using mobile tickets for entry. We proved
out the scalable capability of mobile ticketing in the quarter,
with as many as 97% of the fans for some NFL games entering via
mobile. For the fourth quarter, we expect digital ticketing growth
to continue, with another ten million fans across 2,000 events,
approximately five million of whom will enter using mobile
tickets.
The move to digital ticketing has meant that sports teams,
venues and artists have much greater control over the ticket,
enabling them to better control distribution and ultimately the
chain of custody for the tickets.
Overall, Ticketmaster's results are validating our dual strategy
of delivering a great marketplace for fans to buy tickets while
providing the greatest enterprise tools to venues, teams and
artists looking to control their tickets and maximize the value of
their events. By continuing to do both effectively, I expect
us to deliver high-single-digit growth in Ticketing operating
income and AOI this year(1).
SUMMARY
As we approach the end of 2018, we are confident that our strong
performance will deliver another record year of results. All of our
businesses — concerts, sponsorship and ticketing — have delivered
growth year-to-date through September, and based on their key
operating metrics, we expect each to deliver record revenue,
operating income, and AOI for the full year(1). As we
look forward, we see tremendous opportunities to continue the
global expansion of our concerts and ticketing businesses, and for
further growth in sponsorship and ticketing from the concerts
flywheel.
Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.
1) Growth numbers for Live Nation overall and for the
Ticketing segment are based on a comparison to 2017 results after
adjusting for $110 million of legal
expenses recorded in the fourth quarter of 2017.
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 – 3rd QUARTER
|
(unaudited; $ in
millions)
|
|
|
Q3 2018
Reported
|
|
Q3 2017
Reported
|
|
Growth
|
|
Q3 2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
Revenue
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
3,297.3
|
|
|
$
|
2,939.4
|
|
|
12
|
%
|
|
$
|
3,319.8
|
|
|
13
|
%
|
Sponsorship &
Advertising
|
171.2
|
|
|
158.0
|
|
|
8
|
%
|
|
172.4
|
|
|
9
|
%
|
Ticketing
|
368.3
|
|
|
340.3
|
|
|
8
|
%
|
|
372.1
|
|
|
9
|
%
|
Other and
Eliminations
|
(1.6)
|
|
|
2.6
|
|
|
*
|
|
(1.6)
|
|
|
*
|
|
$
|
3,835.2
|
|
|
$
|
3,440.3
|
|
|
11
|
%
|
|
$
|
3,862.7
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
121.3
|
|
|
$
|
84.3
|
|
|
44
|
%
|
|
$
|
122.6
|
|
|
45
|
%
|
Sponsorship &
Advertising
|
113.8
|
|
|
106.7
|
|
|
7
|
%
|
|
114.7
|
|
|
7
|
%
|
Ticketing
|
49.5
|
|
|
54.1
|
|
|
(8%)
|
|
|
50.5
|
|
|
(7%)
|
|
Other and
Eliminations
|
(6.9)
|
|
|
(2.5)
|
|
|
*
|
|
(6.9)
|
|
|
*
|
Corporate
|
(43.5)
|
|
|
(41.3)
|
|
|
(5%)
|
|
|
(43.5)
|
|
|
(5%)
|
|
|
$
|
234.2
|
|
|
$
|
201.3
|
|
|
16
|
%
|
|
$
|
237.4
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
200.3
|
|
|
$
|
154.3
|
|
|
30
|
%
|
|
$
|
202.0
|
|
|
31
|
%
|
Sponsorship &
Advertising
|
123.1
|
|
|
113.6
|
|
|
8
|
%
|
|
124.0
|
|
|
9
|
%
|
Ticketing
|
106.5
|
|
|
105.8
|
|
|
1
|
%
|
|
107.9
|
|
|
2
|
%
|
Other and
Eliminations
|
(7.9)
|
|
|
(3.7)
|
|
|
*
|
|
(7.9)
|
|
|
*
|
Corporate
|
(35.5)
|
|
|
(35.5)
|
|
|
—
|
|
|
(35.5)
|
|
|
—
|
|
|
$
|
386.5
|
|
|
$
|
334.5
|
|
|
16
|
%
|
|
$
|
390.5
|
|
|
17
|
%
|
* percentages are
not meaningful
|
FINANCIAL
HIGHLIGHTS – 9 MONTHS
|
(unaudited; $ in
millions)
|
|
|
9 Months
2018
Reported
|
|
9
Months
2017
Reported
|
|
Growth
|
|
9 Months
2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
Revenue
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
6,716.9
|
|
|
$
|
6,052.5
|
|
|
11
|
%
|
|
$
|
6,665.3
|
|
|
10
|
%
|
Sponsorship &
Advertising
|
385.7
|
|
|
346.5
|
|
|
11
|
%
|
|
382.3
|
|
|
10
|
%
|
Ticketing
|
1,091.9
|
|
|
964.3
|
|
|
13
|
%
|
|
1,084.9
|
|
|
13
|
%
|
Other and
Eliminations
|
(8.6)
|
|
|
3.5
|
|
|
*
|
|
(8.6)
|
|
|
*
|
|
$
|
8,185.9
|
|
|
$
|
7,366.8
|
|
|
11
|
%
|
|
$
|
8,123.9
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
99.3
|
|
|
$
|
46.1
|
|
|
*
|
|
$
|
101.5
|
|
|
*
|
Sponsorship &
Advertising
|
225.4
|
|
|
203.5
|
|
|
11
|
%
|
|
222.9
|
|
|
10
|
%
|
Ticketing
|
163.5
|
|
|
152.3
|
|
|
7
|
%
|
|
166.0
|
|
|
9
|
%
|
Other and
Eliminations
|
(14.0)
|
|
|
(7.5)
|
|
|
(87%)
|
|
|
(14.0)
|
|
|
(87%)
|
|
Corporate
|
(111.3)
|
|
|
(101.0)
|
|
|
(10%)
|
|
|
(111.3)
|
|
|
(10%)
|
|
|
$
|
362.9
|
|
|
$
|
293.4
|
|
|
24
|
%
|
|
$
|
365.1
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
284.3
|
|
|
$
|
220.6
|
|
|
29
|
%
|
|
$
|
283.8
|
|
|
29
|
%
|
Sponsorship &
Advertising
|
250.2
|
|
|
224.1
|
|
|
12
|
%
|
|
247.7
|
|
|
11
|
%
|
Ticketing
|
330.3
|
|
|
298.1
|
|
|
11
|
%
|
|
331.1
|
|
|
11
|
%
|
Other and
Eliminations
|
(16.8)
|
|
|
(10.2)
|
|
|
(65%)
|
|
|
(16.8)
|
|
|
(65%)
|
|
Corporate
|
(87.4)
|
|
|
(84.6)
|
|
|
(3%)
|
|
|
(87.4)
|
|
|
(3%)
|
|
|
$
|
760.6
|
|
|
$
|
648.0
|
|
|
17
|
%
|
|
$
|
758.4
|
|
|
17
|
%
|
* percentages are
not meaningful
|
- As of September 30, 2018, total
cash and cash equivalents were $1.9
billion, which includes $734
million in ticketing client cash and $613 million in free cash.
- Event-related deferred revenue was $759
million as of September 30,
2018, compared to $774 million
as of the same date in 2017.
- For the quarter ended September 30,
2018, net cash used in operating activities was $264 million and free cash flow — adjusted was
$307 million. For the nine months,
net cash provided by operating activities was $256 million and free cash flow — adjusted was
$529 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
|
|
|
Q3
2018
|
|
Q3
2017
|
|
9 Months
2018
|
|
9 Months
2017
|
|
(in thousands
except estimated events)
|
Concerts
(1)
|
|
|
|
|
|
|
|
Events:
|
|
|
|
|
|
|
|
North
America
|
5,922
|
|
|
5,267
|
|
|
17,041
|
|
|
14,197
|
|
International
|
1,808
|
|
|
1,491
|
|
|
6,950
|
|
|
6,242
|
|
Total estimated
events
|
7,730
|
|
|
6,758
|
|
|
23,991
|
|
|
20,439
|
|
Fans:
|
|
|
|
|
|
|
|
North
America
|
24,184
|
|
|
21,570
|
|
|
47,090
|
|
|
42,670
|
|
International
|
9,127
|
|
|
8,142
|
|
|
23,719
|
|
|
22,719
|
|
Total estimated
fans
|
33,311
|
|
|
29,712
|
|
|
70,809
|
|
|
65,389
|
|
Ticketing
(2)
|
|
|
|
|
|
|
|
Fee-bearing
tickets
|
53,458
|
|
|
50,093
|
|
|
154,627
|
|
|
147,200
|
|
Non-fee-bearing
tickets
|
59,112
|
|
|
60,814
|
|
|
174,132
|
|
|
179,565
|
|
Total estimated
tickets
|
112,570
|
|
|
110,907
|
|
|
328,759
|
|
|
326,765
|
|
|
|
(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 (Used in) Operating
Activities
($ in
millions)
|
Q3
2018
|
|
Q3
2017
|
Net cash used in
operating activities
|
$
|
(264.2)
|
|
|
$
|
(386.5)
|
|
Changes in operating
assets and liabilities (working capital)
|
620.3
|
|
|
671.0
|
|
Free cash flow from
earnings
|
$
|
356.1
|
|
|
$
|
284.5
|
|
Less: Maintenance
capital expenditures
|
(38.9)
|
|
|
(26.9)
|
|
Distributions to noncontrolling interests
|
(10.3)
|
|
|
(4.4)
|
|
Free cash flow —
adjusted
|
$
|
306.9
|
|
|
$
|
253.2
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(64.5)
|
|
|
$
|
(63.6)
|
|
|
|
|
|
Net cash used in
financing activities
|
$
|
(46.6)
|
|
|
$
|
(1.5)
|
|
($ in
millions)
|
9 Months
2018
|
|
9 Months
2017
|
Net cash provided
by operating activities
|
$
|
255.6
|
|
|
$
|
418.2
|
|
Changes in operating
assets and liabilities (working capital)
|
394.7
|
|
|
120.9
|
|
Free cash flow from
earnings
|
$
|
650.3
|
|
|
$
|
539.1
|
|
Less: Maintenance
capital expenditures
|
(80.0)
|
|
|
(82.6)
|
|
Distributions to noncontrolling interests
|
(41.4)
|
|
|
(22.9)
|
|
Free cash flow —
adjusted
|
$
|
528.9
|
|
|
$
|
433.6
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(378.9)
|
|
|
$
|
(235.5)
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
$
|
268.1
|
|
|
$
|
(25.7)
|
|
Reconciliation of Free Cash to Cash and Cash
Equivalents
($ in
millions)
|
September 30,
2018
|
Cash and cash
equivalents
|
$
|
1,900.3
|
|
Client
cash
|
(733.7)
|
|
Deferred revenue —
event-related
|
(758.7)
|
|
Accrued artist
fees
|
(163.8)
|
|
Collections on behalf
of others
|
(55.0)
|
|
Prepaid expenses —
event-related
|
423.9
|
|
Free
cash
|
$
|
613.0
|
|
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 record results for the full-year 2018, including record
revenue, operating income and adjusted operating income, ;
anticipated strong divisional performance for the full year,
including expected double-digit operating income and adjusted
operating income for sponsorship and expected high-single-digit
growth in ticketing operating income and adjusted operating income;
the anticipation that the company's concerts business will sell
over 90 million tickets, with a spend of over $6 billion producing concerts for the full year;
the expectation that Ticketmaster will deliver almost 500 million
tickets worth approximately $31
billion in GTV across 28 countries in 2018, as well as its
anticipated growth of digital ticketing, currently expecting
another 10 million fans across 2,000 events, approximately five
million of whom are expected to enter using mobile tickets; and the
company's opportunities to continue the global expansion of its
concerts and ticketing businesses and for further growth in
sponsorship and ticketing from its concerts flywheel. 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
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
121.3
|
|
|
$
|
3.2
|
|
|
$
|
10.3
|
|
|
$
|
54.4
|
|
|
$
|
—
|
|
|
$
|
11.1
|
|
|
$
|
200.3
|
|
|
$
|
1.7
|
|
|
$
|
202.0
|
|
Sponsorship &
Advertising
|
113.8
|
|
|
0.4
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|
123.1
|
|
|
0.9
|
|
|
124.0
|
|
Ticketing
|
49.5
|
|
|
1.2
|
|
|
—
|
|
|
34.7
|
|
|
20.8
|
|
|
0.3
|
|
|
106.5
|
|
|
1.4
|
|
|
107.9
|
|
Other and
Eliminations
|
(6.9)
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(1.2)
|
|
|
—
|
|
|
(7.9)
|
|
|
—
|
|
|
(7.9)
|
|
Corporate
|
(43.5)
|
|
|
6.6
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
(35.5)
|
|
|
—
|
|
|
(35.5)
|
|
Total Live
Nation
|
$
|
234.2
|
|
|
$
|
11.4
|
|
|
$
|
10.3
|
|
|
$
|
99.6
|
|
|
$
|
19.6
|
|
|
$
|
11.4
|
|
|
$
|
386.5
|
|
|
$
|
4.0
|
|
|
$
|
390.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
84.3
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
52.3
|
|
|
$
|
—
|
|
|
$
|
15.8
|
|
|
$
|
154.3
|
|
|
$
|
—
|
|
|
$
|
154.3
|
|
Sponsorship &
Advertising
|
106.7
|
|
|
0.3
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
113.6
|
|
|
—
|
|
|
113.6
|
|
Ticketing
|
54.1
|
|
|
1.1
|
|
|
—
|
|
|
28.8
|
|
|
21.5
|
|
|
0.3
|
|
|
105.8
|
|
|
—
|
|
|
105.8
|
|
Other and
Eliminations
|
(2.5)
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(1.3)
|
|
|
—
|
|
|
(3.7)
|
|
|
—
|
|
|
(3.7)
|
|
Corporate
|
(41.3)
|
|
|
4.5
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
(0.1)
|
|
|
(35.5)
|
|
|
—
|
|
|
(35.5)
|
|
Total Live
Nation
|
$
|
201.3
|
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
$
|
89.2
|
|
|
$
|
20.2
|
|
|
$
|
16.0
|
|
|
$
|
334.5
|
|
|
$
|
—
|
|
|
$
|
334.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
99.3
|
|
|
$
|
9.0
|
|
|
$
|
10.5
|
|
|
$
|
146.5
|
|
|
$
|
—
|
|
|
$
|
19.0
|
|
|
$
|
284.3
|
|
|
$
|
(0.5)
|
|
|
$
|
283.8
|
|
Sponsorship &
Advertising
|
225.4
|
|
|
1.2
|
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
—
|
|
|
250.2
|
|
|
(2.5)
|
|
|
247.7
|
|
Ticketing
|
163.5
|
|
|
3.5
|
|
|
—
|
|
|
103.3
|
|
|
59.3
|
|
|
0.7
|
|
|
330.3
|
|
|
0.8
|
|
|
331.1
|
|
Other and
Eliminations
|
(14.0)
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
(3.4)
|
|
|
—
|
|
|
(16.8)
|
|
|
—
|
|
|
(16.8)
|
|
Corporate
|
(111.3)
|
|
|
20.6
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
(87.4)
|
|
|
—
|
|
|
(87.4)
|
|
Total Live
Nation
|
$
|
362.9
|
|
|
$
|
34.3
|
|
|
$
|
10.5
|
|
|
$
|
277.3
|
|
|
$
|
55.9
|
|
|
$
|
19.7
|
|
|
$
|
760.6
|
|
|
$
|
(2.2)
|
|
|
$
|
758.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
46.1
|
|
|
$
|
6.6
|
|
|
$
|
(0.6)
|
|
|
$
|
144.9
|
|
|
$
|
—
|
|
|
$
|
23.6
|
|
|
$
|
220.6
|
|
|
$
|
—
|
|
|
$
|
220.6
|
|
Sponsorship &
Advertising
|
203.5
|
|
|
1.0
|
|
|
—
|
|
|
19.6
|
|
|
—
|
|
|
—
|
|
|
224.1
|
|
|
—
|
|
|
224.1
|
|
Ticketing
|
152.3
|
|
|
3.1
|
|
|
0.1
|
|
|
82.8
|
|
|
58.0
|
|
|
1.8
|
|
|
298.1
|
|
|
—
|
|
|
298.1
|
|
Other and
Eliminations
|
(7.5)
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
(3.1)
|
|
|
—
|
|
|
(10.2)
|
|
|
—
|
|
|
(10.2)
|
|
Corporate
|
(101.0)
|
|
|
13.2
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
(84.6)
|
|
|
—
|
|
|
(84.6)
|
|
Total Live
Nation
|
$
|
293.4
|
|
|
$
|
23.9
|
|
|
$
|
(0.5)
|
|
|
$
|
250.9
|
|
|
$
|
54.9
|
|
|
$
|
25.4
|
|
|
$
|
648.0
|
|
|
$
|
—
|
|
|
$
|
648.0
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
(in
thousands)
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,900,305
|
|
|
$
|
1,825,322
|
|
Accounts receivable,
less allowance of $39,996 and $32,755, respectively
|
1,252,585
|
|
|
725,304
|
|
Prepaid
expenses
|
668,900
|
|
|
546,713
|
|
Restricted
cash
|
9,493
|
|
|
3,500
|
|
Other current
assets
|
49,764
|
|
|
51,903
|
|
Total current
assets
|
3,881,047
|
|
|
3,152,742
|
|
Property, plant and
equipment
|
|
|
|
Land, buildings and
improvements
|
969,840
|
|
|
955,937
|
|
Computer equipment
and capitalized software
|
725,842
|
|
|
610,924
|
|
Furniture and other
equipment
|
319,248
|
|
|
312,962
|
|
Construction in
progress
|
128,943
|
|
|
133,906
|
|
|
2,143,873
|
|
|
2,013,729
|
|
Less accumulated
depreciation
|
1,230,516
|
|
|
1,127,793
|
|
|
913,357
|
|
|
885,936
|
|
Intangible
assets
|
|
|
|
Definite-lived
intangible assets, net
|
669,568
|
|
|
729,265
|
|
Indefinite-lived
intangible assets
|
368,920
|
|
|
369,023
|
|
Goodwill
|
1,835,353
|
|
|
1,754,589
|
|
Other long-term
assets
|
843,454
|
|
|
612,708
|
|
Total
assets
|
$
|
8,511,699
|
|
|
$
|
7,504,263
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable,
client accounts
|
$
|
1,048,647
|
|
|
$
|
948,637
|
|
Accounts
payable
|
112,036
|
|
|
85,666
|
|
Accrued
expenses
|
1,409,170
|
|
|
1,109,246
|
|
Deferred
revenue
|
890,783
|
|
|
925,220
|
|
Current portion of
long-term debt, net
|
81,832
|
|
|
347,593
|
|
Other current
liabilities
|
66,330
|
|
|
160,638
|
|
Total current
liabilities
|
3,608,798
|
|
|
3,577,000
|
|
Long-term debt,
net
|
2,731,985
|
|
|
1,952,366
|
|
Deferred income
taxes
|
130,911
|
|
|
137,635
|
|
Other long-term
liabilities
|
180,626
|
|
|
174,391
|
|
Commitments and
contingent liabilities
|
|
|
|
Redeemable
noncontrolling interests
|
308,450
|
|
|
244,727
|
|
Stockholders'
equity
|
|
|
|
Common
stock
|
2,083
|
|
|
2,069
|
|
Additional paid-in
capital
|
2,328,425
|
|
|
2,374,006
|
|
Accumulated
deficit
|
(871,336)
|
|
|
(1,079,472)
|
|
Cost of shares held
in treasury
|
(6,865)
|
|
|
(6,865)
|
|
Accumulated other
comprehensive loss
|
(134,918)
|
|
|
(108,542)
|
|
Total Live Nation
stockholders' equity
|
1,317,389
|
|
|
1,181,196
|
|
Noncontrolling
interests
|
233,540
|
|
|
236,948
|
|
Total
equity
|
1,550,929
|
|
|
1,418,144
|
|
Total liabilities
and equity
|
$
|
8,511,699
|
|
|
$
|
7,504,263
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
(as
adjusted)
|
|
|
|
(as
adjusted)
|
|
(in thousands
except share and per share data)
|
Revenue
|
$
|
3,835,246
|
|
|
$
|
3,440,308
|
|
|
$
|
8,185,945
|
|
|
$
|
7,366,772
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating
expenses
|
2,924,356
|
|
|
2,633,940
|
|
|
5,991,547
|
|
|
5,431,672
|
|
Selling, general and
administrative expenses
|
524,654
|
|
|
475,864
|
|
|
1,435,703
|
|
|
1,293,557
|
|
Depreciation and
amortization
|
99,606
|
|
|
89,228
|
|
|
277,262
|
|
|
250,925
|
|
Loss (gain) on
disposal of operating assets
|
10,318
|
|
|
37
|
|
|
10,464
|
|
|
(507)
|
|
Corporate
expenses
|
42,093
|
|
|
39,892
|
|
|
108,055
|
|
|
97,711
|
|
Operating
income
|
234,219
|
|
|
201,347
|
|
|
362,914
|
|
|
293,414
|
|
Interest
expense
|
35,993
|
|
|
26,627
|
|
|
101,726
|
|
|
79,515
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
2,470
|
|
|
1,049
|
|
Interest
income
|
(2,260)
|
|
|
(1,471)
|
|
|
(6,148)
|
|
|
(3,447)
|
|
Equity in losses
(earnings) of nonconsolidated affiliates
|
(4)
|
|
|
816
|
|
|
(3,406)
|
|
|
(2,060)
|
|
Other expense
(income), net
|
262
|
|
|
920
|
|
|
7,033
|
|
|
(5,388)
|
|
Income before income
taxes
|
200,228
|
|
|
174,455
|
|
|
261,239
|
|
|
223,745
|
|
Income tax
expense
|
17,031
|
|
|
25,685
|
|
|
35,714
|
|
|
42,190
|
|
Net income
|
183,197
|
|
|
148,770
|
|
|
225,525
|
|
|
181,555
|
|
Net income (loss)
attributable to noncontrolling interests
|
10,514
|
|
|
12,377
|
|
|
17,389
|
|
|
(3,323)
|
|
Net income
attributable to common stockholders of Live Nation
|
$
|
172,683
|
|
|
$
|
136,393
|
|
|
$
|
208,136
|
|
|
$
|
184,878
|
|
|
|
|
|
|
|
|
|
Basic net income per
common share available to common stockholders of Live
Nation
|
$
|
0.73
|
|
|
$
|
0.56
|
|
|
$
|
0.74
|
|
|
$
|
0.65
|
|
Diluted net income
per common share available to common stockholders of Live
Nation
|
$
|
0.70
|
|
|
$
|
0.53
|
|
|
$
|
0.71
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
207,614,413
|
|
|
205,287,843
|
|
|
207,228,034
|
|
|
204,574,742
|
|
Diluted
|
216,788,983
|
|
|
223,132,186
|
|
|
215,406,201
|
|
|
213,886,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net
income available to common stockholders of Live Nation:
|
Net income
attributable to common stockholders of Live Nation
|
$
|
172,683
|
|
|
$
|
136,393
|
|
|
$
|
208,136
|
|
|
$
|
184,878
|
|
Accretion of
redeemable noncontrolling interests
|
(20,789)
|
|
|
(21,397)
|
|
|
(54,347)
|
|
|
(52,811)
|
|
Net income available
to common stockholders of Live Nation—basic
|
151,894
|
|
|
114,996
|
|
|
153,789
|
|
|
132,067
|
|
Convertible debt
interest, net of tax
|
319
|
|
|
3,336
|
|
|
—
|
|
|
—
|
|
Net income available
to common stockholders of Live Nation—diluted
|
$
|
152,213
|
|
|
$
|
118,332
|
|
|
$
|
153,789
|
|
|
$
|
132,067
|
|
|
|
|
|
|
|
|
|
LIVE NATION
ENTERTAINMENT, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
Nine Months
Ended
September 30,
|
|
2018
|
|
2017
|
|
|
|
(as
adjusted)
|
|
(in
thousands)
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
|
225,525
|
|
|
$
|
181,555
|
|
Reconciling
items:
|
|
|
|
Depreciation
|
133,718
|
|
|
107,530
|
|
Amortization
|
143,544
|
|
|
143,395
|
|
Amortization of
non-recoupable ticketing contract advances
|
55,893
|
|
|
54,892
|
|
Amortization of debt
issuance costs and discounts, net
|
14,765
|
|
|
9,836
|
|
Non-cash compensation
expense
|
34,315
|
|
|
23,921
|
|
Unrealized changes in
fair value of contingent consideration
|
11,609
|
|
|
12,198
|
|
Loss (gain) on
disposal of operating assets
|
10,464
|
|
|
(507)
|
|
Equity in earnings of
nonconsolidated affiliates, net of distributions
|
10,024
|
|
|
5,333
|
|
Provision for
uncollectible receivables and advances
|
16,898
|
|
|
7,226
|
|
Other, net
|
(6,525)
|
|
|
(6,236)
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
Increase in accounts
receivable
|
(545,872)
|
|
|
(394,753)
|
|
Increase in prepaid
expenses and other assets
|
(332,254)
|
|
|
(279,269)
|
|
Increase in accounts
payable, accrued expenses and other liabilities
|
484,432
|
|
|
536,944
|
|
Increase (decrease)
in deferred revenue
|
(960)
|
|
|
16,169
|
|
Net cash provided by
operating activities
|
255,576
|
|
|
418,234
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Advances of notes
receivable
|
(71,578)
|
|
|
(10,943)
|
|
Collection of notes
receivable
|
29,104
|
|
|
5,106
|
|
Investments made in
nonconsolidated affiliates
|
(42,580)
|
|
|
(22,157)
|
|
Purchases of
property, plant and equipment
|
(163,714)
|
|
|
(184,499)
|
|
Cash paid for
acquisitions, net of cash acquired
|
(98,288)
|
|
|
(18,809)
|
|
Purchases of
intangible assets
|
(33,175)
|
|
|
(4,895)
|
|
Other, net
|
1,375
|
|
|
698
|
|
Net cash used in
investing activities
|
(378,856)
|
|
|
(235,499)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Proceeds from
long-term debt, net of debt issuance costs
|
857,121
|
|
|
59,313
|
|
Payments on long-term
debt
|
(391,096)
|
|
|
(84,608)
|
|
Distributions to
noncontrolling interests
|
(41,351)
|
|
|
(22,877)
|
|
Purchases and sales
of noncontrolling interests, net
|
(152,971)
|
|
|
(10,730)
|
|
Proceeds from
exercise of stock options
|
16,447
|
|
|
44,746
|
|
Payments for deferred
and contingent consideration
|
(16,239)
|
|
|
(14,149)
|
|
Other, net
|
(3,785)
|
|
|
2,642
|
|
Net cash provided by
(used in) financing activities
|
268,126
|
|
|
(25,663)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(63,870)
|
|
|
118,322
|
|
Net increase in cash,
cash equivalents and restricted cash
|
80,976
|
|
|
275,394
|
|
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
|
$
|
1,909,798
|
|
|
$
|
1,804,969
|
|
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SOURCE Live Nation Entertainment