Full Year 2018 - Another Record Year for Live Nation
- Revenue Up 11% to $10.8
Billion
- Live Nation Concerts Attendance of 93 Million, Up
8%
- Ticketmaster Fee-Bearing GTV Up 14%
- Sponsorship & Advertising Revenue Up 13%
- Event-Related Deferred Revenue Up 35% to $1.1 Billion as of December 31
2019 Indicators (as of Mid-February)
- Tickets Sold for Concerts in 2019 and Confirmed Concert
Events Both Up Double-Digits Year-Over-Year
- Sponsorship & Advertising Committed Net Revenue Over 70%
of 2019 Projections, Up Double-Digits Year-Over-Year
LOS ANGELES, Feb. 28, 2019 /PRNewswire/ -- Live Nation
Entertainment (NYSE: LYV) today released financial results for the
three months and full year ended December 31, 2018.
Live Nation delivered its eighth consecutive year of record
results with revenue, operating income, and adjusted operating
income ("AOI") all up year-over-year, even adjusting for the 2017
impact of a $110 million legal
accrual.
Concerts Growth Accelerated in 2018
Fans more than ever find the live experience, from club shows to
arenas to festivals, a top entertainment choice and the best way to
celebrate their favorite artists and share the experience with
other fans. In the U.S. alone, over the past ten years consumer
spending on live experiences has grown by $5
billion per year, and we believe this ongoing trend will
structurally continue driving increased demand for concerts
globally.
As a result of this strong demand growth, in 2018 we delivered
double-digit attendance growth across our arenas, amphitheaters and
theaters & clubs. Live Nation continued to grow its global
market share in 2018, adding nearly seven million fans globally for
a total of 93 million fans, driving concerts revenue up 11%,
operating income up 61%, and AOI up 22%.
Across all of the artists we work with, we invested over
$6 billion to promote 35,000 shows in
40 countries, with Live Nation by far the largest financial
supporter of artists in music. In addition to growing our show
count and attendance, our pricing and on-site initiatives also
continued to grow our operating income and AOI.
The strength of our business is continuing into 2019, with
ticket sales for shows this year up double-digits through
mid-February, along with similar increases in confirmed
amphitheater, arena and stadium show count. With this growth
and our plans to further monetize our fan relationships, I
currently expect this will translate into continued strong growth
in concerts operating income and AOI in 2019.
Sponsorship Continued Strong Growth in 2018
In our high-margin sponsorship business, we grew revenue,
operating income and AOI all by 13% in 2018. Our top strategic
sponsors have been a key driver of this growth, with 75 sponsors
collectively spending over $350
million to reach our fans, up 11% over 2017. Sponsorship at
our festivals grew 13%, driven by new deals with brands including
Heineken, Barclays, State Farm and Frito-Lay.
All of this reinforces the power of our platform of 93 million
fans, and the continued shift by brands to invest in reaching fans
during the live experience. Research from our Power of
Live white paper indicates that over 90% of fans believe that
brands can enhance the live experience and over 60% of fans believe
that they are more likely to connect with brands at concerts. This
demonstrates that our shows offer brands a truly unique opportunity
to connect with fans.
With over 70% of our budgeted sponsorship net revenue for the
year already committed, pacing double-digits ahead of this time
last year, we are confident we will again deliver double-digit
operating income and AOI growth in 2019.
Ticketmaster Extends Global Leadership Position
Ticketmaster continued growing its leadership position in
ticketing in 2018, with fee-bearing gross transaction value ("GTV")
up 14% and total platform GTV of $33
billion. This drove a 14% increase in ticketing revenue for
the year, and delivered growth in operating income and AOI, even
after adjusting for the 2017 impact of a legal accrual.
Our top priority at Ticketmaster in 2018 was deploying our
Presence digital ticketing solution, which we see as key for
effectively unlocking the value of our customer relationships
across our ticketing, concerts and sponsorship businesses. By the
end of 2018, we deployed Presence in over 200 venues, operating
20,000 events for 40 million fans, approximately half of whom used
digital tickets.
We see our deployment in 2019 further accelerating, and we are
expecting to have Presence in over 500 venues by the end of this
year, with over 125 million fans attending events at these
buildings. At that point, we will cover over 75% of major sports
and Live Nation buildings, making Ticketmaster by far the global
leader in digital ticketing.
At the same time, we continue building our marketplace, with the
fourth quarter being our highest fee-bearing GTV quarter ever,
selling over 60 million fee-bearing tickets in a quarter for the
first time, and delivering over $5
billion in fee-bearing GTV. Overall in 2018, Ticketmaster
managed over 400,000 events, delivering almost 500 million tickets
to fans in 28 countries. We continue adding new clients to our
marketplace, who collectively added over ten million new tickets in
2018.
I believe we have tremendous opportunity for growth on a global
basis, particularly in the 13 markets where we promote concerts but
do not yet have a substantial ticketing operation. In 2018, we
furthered our international expansion, establishing ticketing
operations in Italy, growing our
German operations and laying the groundwork for expansion into
Latin America. Ticketmaster
continues to exceed expectations, both operationally and in its
leadership position in digital ticketing, which we believe it can
extend globally and deliver continued profitable growth.
2019 Growth Drivers
In summary, 2018 was another strong growth year for Live Nation
- building our global concerts business and thereby driving growth
in our high-margin venue, sponsorship and ticketing businesses.
We continue to see the tremendous power of live events, with
strong consumer demand and a robust supply of new and established
artists hitting the road from clubs to stadiums. Live is truly a
unique entertainment form; it cannot be duplicated and creates
lifetime memories that fans are craving more than ever in this
experience economy.
We believe that the live business will continue to have strong
growth for years to come as fans globally drive demand, artists are
touring more and on-site spending, sponsorship and ticketing all
benefit from the concerts flywheel.
In 2019, I expect us to further extend our global concerts
position while enhancing our on-site hospitality business and
capturing additional pricing opportunities. Our sponsorship
business will continue driving double-digit growth as more brands
look for that direct connection with music fans. And as
Ticketmaster continues its transformation to a truly digital
ecosystem, it will also benefit from continued growth in concert
ticket sales and further expansion of our global footprint.
We believe that the combination of macro trends and our
demonstrated ability to execute are strong indicators of our
capability to continue to grow the business for many years to
come.
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 "News /
Events" 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 posted to the
"Financial Info" section of the website. A replay of the webcast
will also be available on the Live Nation website.
Notice Regarding Financial Statements
The company has provided certain financial statements at the end
of this press release for reference. These financial
statements should be read in conjunction with the full financial
statements, and the notes thereto, set forth in the company's
Annual Report on Form 10-K 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
investors.livenationentertainment.com.
FINANCIAL
HIGHLIGHTS – 4th QUARTER
(unaudited; $ in
millions)
|
|
|
|
Q4 2018
Reported
|
|
Q4 2017
Reported
|
|
Growth
|
|
Q4 2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
Revenue
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
2,053.1
|
|
|
$
|
1,839.6
|
|
|
12
|
%
|
|
$
|
2,079.1
|
|
|
13
|
%
|
Sponsorship &
Advertising
|
118.3
|
|
|
98.6
|
|
|
20
|
%
|
|
119.6
|
|
|
21
|
%
|
Ticketing
|
437.7
|
|
|
382.2
|
|
|
15
|
%
|
|
442.6
|
|
|
16
|
%
|
Other &
Eliminations
|
(7.2)
|
|
|
0.1
|
|
|
*
|
|
|
(7.2)
|
|
|
*
|
|
|
$
|
2,601.9
|
|
|
$
|
2,320.5
|
|
|
12
|
%
|
|
$
|
2,634.1
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)**
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(135.5)
|
|
|
$
|
(139.7)
|
|
|
3
|
%
|
|
$
|
(137.1)
|
|
|
2
|
%
|
Sponsorship &
Advertising
|
57.8
|
|
|
48.0
|
|
|
20
|
%
|
|
58.7
|
|
|
22
|
%
|
Ticketing
|
38.5
|
|
|
(61.4)
|
|
|
*
|
|
|
38.6
|
|
|
*
|
|
Other &
Eliminations
|
(4.5)
|
|
|
(9.8)
|
|
|
54
|
%
|
|
(4.5)
|
|
|
54
|
%
|
Corporate
|
(46.7)
|
|
|
(39.1)
|
|
|
(19%)
|
|
|
(46.7)
|
|
|
(19%)
|
|
|
$
|
(90.4)
|
|
|
$
|
(202.0)
|
|
|
55
|
%
|
|
$
|
(91.0)
|
|
|
55
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)**
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(58.2)
|
|
|
$
|
(35.6)
|
|
|
(64%)
|
|
|
$
|
(58.9)
|
|
|
(66%)
|
|
Sponsorship &
Advertising
|
65.5
|
|
|
56.5
|
|
|
16
|
%
|
|
66.4
|
|
|
17
|
%
|
Ticketing
|
106.2
|
|
|
(0.2)
|
|
|
*
|
|
|
106.9
|
|
|
*
|
|
Other &
Eliminations
|
(5.9)
|
|
|
(11.3)
|
|
|
48
|
%
|
|
(5.9)
|
|
|
48
|
%
|
Corporate
|
(39.0)
|
|
|
(32.2)
|
|
|
(21%)
|
|
|
(39.0)
|
|
|
(21%)
|
|
|
$
|
68.6
|
|
|
$
|
(22.8)
|
|
|
*
|
|
|
$
|
69.5
|
|
|
*
|
|
* percentages are
not meaningful
|
** The company
accrued $110 million in the fourth quarter of 2017 in connection
with a legal settlement that reduced operating income and adjusted
operating income for both the Ticketing segment and the
consolidated results.
|
FINANCIAL
HIGHLIGHTS – 12 MONTHS
(unaudited; $ in
millions)
|
|
|
12 Months
2018
Reported
|
|
12 Months
2017
Reported
|
|
Growth
|
|
12 Months
2018
Constant
Currency
|
|
Growth at
Constant
Currency
|
Revenue
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
8,770.0
|
|
|
$
|
7,892.1
|
|
|
11
|
%
|
|
$
|
8,744.4
|
|
|
11
|
%
|
Sponsorship &
Advertising
|
504.0
|
|
|
445.1
|
|
|
13
|
%
|
|
501.9
|
|
|
13
|
%
|
Ticketing
|
1,529.6
|
|
|
1,346.5
|
|
|
14
|
%
|
|
1,527.6
|
|
|
13
|
%
|
Other &
Eliminations
|
(15.8)
|
|
|
3.5
|
|
|
*
|
|
|
(15.8)
|
|
|
*
|
|
|
$
|
10,787.8
|
|
|
$
|
9,687.2
|
|
|
11
|
%
|
|
$
|
10,758.1
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)**
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(36.2)
|
|
|
$
|
(93.6)
|
|
|
61
|
%
|
|
$
|
(35.7)
|
|
|
62
|
%
|
Sponsorship &
Advertising
|
283.1
|
|
|
251.5
|
|
|
13
|
%
|
|
281.6
|
|
|
12
|
%
|
Ticketing
|
201.9
|
|
|
90.9
|
|
|
*
|
|
|
204.5
|
|
|
*
|
|
Other &
Eliminations
|
(18.3)
|
|
|
(17.3)
|
|
|
(6%)
|
|
|
(18.3)
|
|
|
(6%)
|
|
Corporate
|
(158.0)
|
|
|
(140.1)
|
|
|
(13%)
|
|
|
(158.0)
|
|
|
(13%)
|
|
|
$
|
272.5
|
|
|
$
|
91.4
|
|
|
*
|
|
|
$
|
274.1
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)**
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
226.0
|
|
|
$
|
185.0
|
|
|
22
|
%
|
|
$
|
224.8
|
|
|
22
|
%
|
Sponsorship &
Advertising
|
315.5
|
|
|
280.6
|
|
|
13
|
%
|
|
314.0
|
|
|
12
|
%
|
Ticketing
|
436.6
|
|
|
297.8
|
|
|
47
|
%
|
|
438.0
|
|
|
47
|
%
|
Other &
Eliminations
|
(22.5)
|
|
|
(21.6)
|
|
|
(4%)
|
|
|
(22.5)
|
|
|
(4%)
|
|
Corporate
|
(126.5)
|
|
|
(116.7)
|
|
|
(8%)
|
|
|
(126.5)
|
|
|
(8%)
|
|
|
$
|
829.1
|
|
|
$
|
625.1
|
|
|
33
|
%
|
|
$
|
827.8
|
|
|
32
|
%
|
* percentages are
not meaningful
|
** The company
accrued $110 million in the fourth quarter of 2017 in connection
with a legal settlement that reduced operating income and adjusted
operating income for both the Ticketing segment and the
consolidated results.
|
- As of December 31, 2018, total
cash and cash equivalents were $2.4
billion, which includes $859.1
million in ticketing client cash and $610 million in free cash.
- Event-related deferred revenue was $1.1
billion as of December 31,
2018, compared to $816 million
as of the same date in 2017.
- For the year ended December 31,
2018, net cash provided by operating activities was
$942 million and free cash flow —
adjusted was $481 million.
- We currently expect capital expenditures for the full year 2019
to be approximately $300 million,
with approximately 50% to be revenue generating capital
expenditures.
- We currently expect the amortization of nonrecoupable ticketing
contract advances for the full year 2019 to be in line with the
expense in the last few years.
KEY OPERATING
METRICS
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
2018
|
|
2017
|
|
2016
|
|
(in thousands
except estimated events)
|
Concerts
(1)
|
|
|
|
|
|
Estimated
events:
|
|
|
|
|
|
North
America
|
24,186
|
|
|
19,933
|
|
|
17,554
|
|
International
|
10,810
|
|
|
9,659
|
|
|
8,731
|
|
Total estimated
events
|
34,996
|
|
|
29,592
|
|
|
26,285
|
|
Estimated
fans:
|
|
|
|
|
|
North
America
|
61,159
|
|
|
54,868
|
|
|
48,611
|
|
International
|
31,607
|
|
|
31,363
|
|
|
22,408
|
|
Total estimated
fans
|
92,766
|
|
|
86,231
|
|
|
71,019
|
|
Ticketing
(2)
|
|
|
|
|
|
Number of fee-bearing
tickets sold
|
217,442
|
|
|
205,703
|
|
|
187,051
|
|
Number of
non-fee-bearing tickets sold
|
265,080
|
|
|
267,713
|
|
|
267,767
|
|
Total tickets
sold
|
482,522
|
|
|
473,416
|
|
|
454,818
|
|
|
|
(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 number of
fee-bearing tickets sold includes 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
sold reported above includes 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)
|
Q4
2018
|
|
Q4
2017
|
Net cash provided
by operating activities
|
$
|
686.0
|
|
|
$
|
205.3
|
|
Changes in operating
assets and liabilities (working capital)
|
(661.0)
|
|
|
(250.4)
|
|
Free cash flow from
earnings
|
$
|
25.0
|
|
|
$
|
(45.1)
|
|
Less: Maintenance
capital expenditures
|
(55.0)
|
|
|
(31.0)
|
|
Distributions to noncontrolling interests
|
(17.8)
|
|
|
(23.1)
|
|
Free cash flow —
adjusted
|
$
|
(47.8)
|
|
|
$
|
(99.2)
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(109.0)
|
|
|
$
|
(92.1)
|
|
|
|
|
|
Net cash used in
financing activities
|
$
|
(79.3)
|
|
|
$
|
(101.4)
|
|
($ in
millions)
|
12 Months
2018
|
|
12 Months
2017
|
Net cash provided
by operating activities
|
$
|
941.6
|
|
|
$
|
623.5
|
|
Changes in operating
assets and liabilities (working capital)
|
(266.3)
|
|
|
(129.5)
|
|
Free cash flow from
earnings
|
$
|
675.3
|
|
|
$
|
494.0
|
|
Less: Maintenance
capital expenditures
|
(135.0)
|
|
|
(113.6)
|
|
Distributions to noncontrolling interests
|
(59.2)
|
|
|
(46.0)
|
|
Free cash flow —
adjusted
|
$
|
481.1
|
|
|
$
|
334.4
|
|
|
|
|
|
Net cash used in
investing activities
|
$
|
(496.9)
|
|
|
$
|
(327.6)
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
$
|
188.8
|
|
|
$
|
(127.1)
|
|
Reconciliation of Cash and Cash Equivalents to Free
Cash
($ in
millions)
|
|
December 31,
2018
|
Cash and cash
equivalents
|
|
$
|
2,371.5
|
|
Client
cash
|
|
(859.1)
|
|
Deferred revenue —
event-related
|
|
(1,099.3)
|
|
Accrued artist
fees
|
|
(102.2)
|
|
Collections on behalf
of others
|
|
(44.0)
|
|
Prepaids related to
artist settlements/events
|
|
342.8
|
|
Free
cash
|
|
$
|
609.7
|
|
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
the anticipated continued strong growth and demand for the company
and in the live business overall for years to come, including the
company's ability to further extend its global concerts position
while enhancing its on-site hospitality business and capturing
additional pricing opportunities in 2019; expected further
acceleration in the deployment of the company's Presence digital
ticketing solution, with over 500 venues expected to have Presence
by the end of 2019 and over 125 million fans expected to attend
events at those venues; the strength of the opportunity for growth
in the company's ticketing business on a global basis; and the
company's growth prospects for 2019, including expected continued
strong growth in concerts operating income and adjusted operating
income and anticipated double-digit operating income and adjusted
operating income growth in sponsorship and advertising. 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 the company defines as operating income
(loss) before acquisition expenses (including transaction costs,
changes in the fair value of accrued acquisition-related contingent
consideration obligations, and acquisition-related severance and
compensation), depreciation and amortization (including goodwill
impairment), loss (gain) on disposal of operating assets and
certain stock-based compensation expense. The company uses AOI to
evaluate the performance of its operating segments. The company
believes that information about AOI assists investors by allowing
them to evaluate changes in the operating results of the portfolio
of the 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 the company's 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. The company
calculates 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. The company presents 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
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)
|
|
Foreign
exchange
impact
|
|
Adjusted
operating
income
(loss)
constant
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(135.5)
|
|
|
$
|
3.2
|
|
|
$
|
(0.1)
|
|
|
$
|
60.3
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
|
$
|
(58.2)
|
|
|
$
|
(0.7)
|
|
|
$
|
(58.9)
|
|
Sponsorship &
Advertising
|
57.8
|
|
|
0.5
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
65.5
|
|
|
0.9
|
|
|
66.4
|
|
Ticketing
|
38.5
|
|
|
1.2
|
|
|
—
|
|
|
40.3
|
|
|
25.8
|
|
|
0.4
|
|
|
106.2
|
|
|
0.7
|
|
|
106.9
|
|
Other and
Eliminations
|
(4.5)
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(1.6)
|
|
|
—
|
|
|
(5.9)
|
|
|
—
|
|
|
(5.9)
|
|
Corporate
|
(46.7)
|
|
|
6.4
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
(39.0)
|
|
|
—
|
|
|
(39.0)
|
|
Total Live
Nation
|
$
|
(90.4)
|
|
|
$
|
11.3
|
|
|
$
|
(0.1)
|
|
|
$
|
109.3
|
|
|
$
|
24.2
|
|
|
$
|
14.3
|
|
|
$
|
68.6
|
|
|
$
|
0.9
|
|
|
$
|
69.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(139.7)
|
|
|
$
|
12.3
|
|
|
$
|
(0.5)
|
|
|
$
|
81.4
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
(35.6)
|
|
|
$
|
—
|
|
|
$
|
(35.6)
|
|
Sponsorship &
Advertising
|
48.0
|
|
|
0.3
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
56.5
|
|
|
—
|
|
|
56.5
|
|
Ticketing
|
(61.4)
|
|
|
1.1
|
|
|
—
|
|
|
29.8
|
|
|
30.1
|
|
|
0.2
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.2)
|
|
Other and
Eliminations
|
(9.8)
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(1.6)
|
|
|
—
|
|
|
(11.3)
|
|
|
—
|
|
|
(11.3)
|
|
Corporate
|
(39.1)
|
|
|
5.1
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
(32.2)
|
|
|
—
|
|
|
(32.2)
|
|
Total Live
Nation
|
$
|
(202.0)
|
|
|
$
|
18.8
|
|
|
$
|
(0.5)
|
|
|
$
|
121.3
|
|
|
$
|
28.5
|
|
|
$
|
11.1
|
|
|
$
|
(22.8)
|
|
|
$
|
—
|
|
|
$
|
(22.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(36.2)
|
|
|
$
|
12.2
|
|
|
$
|
10.4
|
|
|
$
|
206.8
|
|
|
$
|
—
|
|
|
$
|
32.8
|
|
|
$
|
226.0
|
|
|
$
|
(1.2)
|
|
|
$
|
224.8
|
|
Sponsorship &
Advertising
|
283.1
|
|
|
1.6
|
|
|
—
|
|
|
30.8
|
|
|
—
|
|
|
—
|
|
|
315.5
|
|
|
(1.5)
|
|
|
314.0
|
|
Ticketing
|
201.9
|
|
|
4.8
|
|
|
—
|
|
|
143.6
|
|
|
85.1
|
|
|
1.2
|
|
|
436.6
|
|
|
1.4
|
|
|
438.0
|
|
Other and
Eliminations
|
(18.3)
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(5.0)
|
|
|
—
|
|
|
(22.5)
|
|
|
—
|
|
|
(22.5)
|
|
Corporate
|
(158.0)
|
|
|
27.0
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
(126.5)
|
|
|
—
|
|
|
(126.5)
|
|
Total Live
Nation
|
$
|
272.5
|
|
|
$
|
45.6
|
|
|
$
|
10.4
|
|
|
$
|
386.5
|
|
|
$
|
80.1
|
|
|
$
|
34.0
|
|
|
$
|
829.1
|
|
|
$
|
(1.3)
|
|
|
$
|
827.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concerts
|
$
|
(93.6)
|
|
|
$
|
18.9
|
|
|
$
|
(1.1)
|
|
|
$
|
226.3
|
|
|
$
|
—
|
|
|
$
|
34.5
|
|
|
$
|
185.0
|
|
|
$
|
—
|
|
|
$
|
185.0
|
|
Sponsorship &
Advertising
|
251.5
|
|
|
1.4
|
|
|
—
|
|
|
27.7
|
|
|
—
|
|
|
—
|
|
|
280.6
|
|
|
—
|
|
|
280.6
|
|
Ticketing
|
90.9
|
|
|
4.1
|
|
|
—
|
|
|
112.7
|
|
|
88.1
|
|
|
2.0
|
|
|
297.8
|
|
|
—
|
|
|
297.8
|
|
Other and
Eliminations
|
(17.3)
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
(4.7)
|
|
|
—
|
|
|
(21.6)
|
|
|
—
|
|
|
(21.6)
|
|
Corporate
|
(140.1)
|
|
|
18.4
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
(116.7)
|
|
|
—
|
|
|
(116.7)
|
|
Total Live
Nation
|
$
|
91.4
|
|
|
$
|
42.8
|
|
|
$
|
(1.1)
|
|
|
$
|
372.1
|
|
|
$
|
83.4
|
|
|
$
|
36.5
|
|
|
$
|
625.1
|
|
|
$
|
—
|
|
|
$
|
625.1
|
|
LIVE NATION
ENTERTAINMENT, INC.
CONSOLIDATED
BALANCE SHEETS
|
|
|
December
31,
|
|
2018
|
|
2017
|
|
(in thousands,
except share data)
|
ASSETS
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
2,371,540
|
|
|
$
|
1,825,322
|
|
Accounts receivable,
less allowance of $34,225 and $32,755 in 2018 and 2017,
respectively
|
829,320
|
|
|
725,304
|
|
Prepaid
expenses
|
597,866
|
|
|
546,713
|
|
Restricted
cash
|
6,663
|
|
|
3,500
|
|
Other current
assets
|
42,685
|
|
|
51,903
|
|
Total current
assets
|
3,848,074
|
|
|
3,152,742
|
|
Property, plant and
equipment
|
|
|
|
Land, buildings and
improvements
|
984,558
|
|
|
955,937
|
|
Computer equipment
and capitalized software
|
742,737
|
|
|
610,924
|
|
Furniture and other
equipment
|
329,607
|
|
|
312,962
|
|
Construction in
progress
|
160,028
|
|
|
133,906
|
|
|
2,216,930
|
|
|
2,013,729
|
|
Less accumulated
depreciation
|
1,270,337
|
|
|
1,127,793
|
|
|
946,593
|
|
|
885,936
|
|
Intangible
assets
|
|
|
|
Definite-lived
intangible assets, net
|
661,451
|
|
|
729,265
|
|
Indefinite-lived
intangible assets
|
368,854
|
|
|
369,023
|
|
Goodwill
|
1,822,943
|
|
|
1,754,589
|
|
Long-term
advances
|
420,891
|
|
|
359,528
|
|
Other long-term
assets
|
428,080
|
|
|
253,180
|
|
Total
assets
|
$
|
8,496,886
|
|
|
$
|
7,504,263
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable,
client accounts
|
$
|
1,037,162
|
|
|
$
|
948,637
|
|
Accounts
payable
|
90,253
|
|
|
85,666
|
|
Accrued
expenses
|
1,245,465
|
|
|
1,109,246
|
|
Deferred
revenue
|
1,227,797
|
|
|
925,220
|
|
Current portion of
long-term debt, net
|
82,142
|
|
|
347,593
|
|
Other current
liabilities
|
67,047
|
|
|
160,638
|
|
Total current
liabilities
|
3,749,866
|
|
|
3,577,000
|
|
Long-term debt,
net
|
2,732,878
|
|
|
1,952,366
|
|
Long-term deferred
income taxes
|
137,067
|
|
|
137,635
|
|
Other long-term
liabilities
|
204,977
|
|
|
174,391
|
|
Commitments and
contingent liabilities
|
|
|
|
Redeemable
noncontrolling interests
|
329,355
|
|
|
244,727
|
|
Stockholders'
equity
|
|
|
|
Preferred
stock—Series A Junior Participating, $.01 par value; 20,000,000
shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
Preferred stock, $.01
par value; 30,000,000 shares authorized; no shares issued and
outstanding
|
—
|
|
|
—
|
|
Common stock, $.01
par value; 450,000,000 shares authorized; 210,534,762 and
208,483,993 shares issued and 210,126,738 and 208,075,969 shares
outstanding in 2018 and 2017, respectively
|
2,091
|
|
|
2,069
|
|
Additional paid-in
capital
|
2,268,209
|
|
|
2,374,006
|
|
Accumulated
deficit
|
(1,019,223)
|
|
|
(1,079,472)
|
|
Cost of shares held
in treasury (408,024 shares)
|
(6,865)
|
|
|
(6,865)
|
|
Accumulated other
comprehensive loss
|
(145,231)
|
|
|
(108,542)
|
|
Total Live Nation
stockholders' equity
|
1,098,981
|
|
|
1,181,196
|
|
Noncontrolling
interests
|
243,762
|
|
|
236,948
|
|
Total
equity
|
1,342,743
|
|
|
1,418,144
|
|
Total liabilities
and equity
|
$
|
8,496,886
|
|
|
$
|
7,504,263
|
|
LIVE NATION
ENTERTAINMENT, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Year Ended
December 31,
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
(as
adjusted)
|
|
(as
adjusted)
|
|
(in thousands
except share and per share data)
|
Revenue
|
|
$
|
10,787,800
|
|
|
$
|
9,687,222
|
|
|
$
|
7,826,336
|
|
Operating
expenses:
|
|
|
|
|
|
|
Direct operating
expenses
|
|
7,967,932
|
|
|
7,181,898
|
|
|
5,639,177
|
|
Selling, general and
administrative expenses
|
|
1,997,028
|
|
|
1,907,723
|
|
|
1,548,450
|
|
Depreciation and
amortization
|
|
386,529
|
|
|
372,201
|
|
|
318,584
|
|
Loss (gain) on
disposal of operating assets
|
|
10,369
|
|
|
(969)
|
|
|
124
|
|
Corporate
expenses
|
|
153,406
|
|
|
134,972
|
|
|
125,061
|
|
Operating
income
|
|
272,536
|
|
|
91,397
|
|
|
194,940
|
|
Interest
expense
|
|
138,505
|
|
|
106,722
|
|
|
106,506
|
|
Loss on
extinguishment of debt
|
|
2,471
|
|
|
1,048
|
|
|
14,049
|
|
Interest
income
|
|
(8,961)
|
|
|
(5,717)
|
|
|
(2,573)
|
|
Equity in losses
(earnings) of nonconsolidated affiliates
|
|
(2,747)
|
|
|
(1,161)
|
|
|
17,802
|
|
Other expense
(income), net
|
|
12,163
|
|
|
(115)
|
|
|
10,830
|
|
Income (loss) before
income taxes
|
|
131,105
|
|
|
(9,380)
|
|
|
48,326
|
|
Income tax expense
(benefit)
|
|
40,765
|
|
|
(17,154)
|
|
|
28,029
|
|
Net income
|
|
90,340
|
|
|
7,774
|
|
|
20,297
|
|
Net income
attributable to noncontrolling interests
|
|
30,091
|
|
|
13,789
|
|
|
17,355
|
|
Net income (loss)
attributable to common stockholders of Live Nation
|
|
$
|
60,249
|
|
|
$
|
(6,015)
|
|
|
$
|
2,942
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share available to common stockholders of Live
Nation
|
|
$
|
(0.09)
|
|
|
$
|
(0.48)
|
|
|
$
|
(0.23)
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
Basic and
diluted
|
|
207,441,468
|
|
|
204,923,740
|
|
|
202,076,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net
income (loss) available to common stockholders of Live
Nation:
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders of Live Nation
|
|
$
|
60,249
|
|
|
$
|
(6,015)
|
|
|
$
|
2,942
|
|
Accretion of
redeemable noncontrolling interests
|
|
(77,900)
|
|
|
(91,631)
|
|
|
(49,952)
|
|
Basic and diluted net
loss available to common stockholders of Live Nation
|
|
$
|
(17,651)
|
|
|
$
|
(97,646)
|
|
|
$
|
(47,010)
|
|
|
|
|
|
|
|
|
LIVE NATION
ENTERTAINMENT, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Year Ended
December 31,
|
|
2018
|
|
2017
|
|
2016
|
|
(in
thousands)
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
|
$
|
90,340
|
|
|
$
|
7,774
|
|
|
$
|
20,297
|
|
Reconciling
items:
|
|
|
|
|
|
Depreciation
|
185,376
|
|
|
149,634
|
|
|
139,288
|
|
Amortization
|
201,153
|
|
|
222,567
|
|
|
179,296
|
|
Amortization of
non-recoupable ticketing contract advances
|
80,087
|
|
|
83,334
|
|
|
85,067
|
|
Deferred income tax
benefit
|
(6,247)
|
|
|
(71,539)
|
|
|
(7,891)
|
|
Amortization of debt
issuance costs, discounts and premium, net
|
20,219
|
|
|
13,174
|
|
|
12,594
|
|
Provision for
uncollectible accounts receivable and advances
|
26,321
|
|
|
20,295
|
|
|
21,681
|
|
Loss on
extinguishment of debt
|
2,471
|
|
|
1,048
|
|
|
14,049
|
|
Non-cash compensation
expense
|
45,582
|
|
|
42,755
|
|
|
32,723
|
|
Unrealized changes in
fair value of contingent consideration
|
14,125
|
|
|
18,011
|
|
|
(5,715)
|
|
Loss (gain) on
disposal of operating assets
|
10,369
|
|
|
(969)
|
|
|
124
|
|
Equity in losses
(earnings) of nonconsolidated affiliates, net of
distributions
|
11,693
|
|
|
6,898
|
|
|
27,498
|
|
Other, net
|
(6,231)
|
|
|
1,035
|
|
|
(3,711)
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
|
|
Increase in accounts
receivable
|
(135,429)
|
|
|
(133,020)
|
|
|
(146,128)
|
|
Increase in prepaid
expenses and other assets
|
(266,241)
|
|
|
(238,549)
|
|
|
(128,499)
|
|
Increase in accounts
payable, accrued expenses and other liabilities
|
323,459
|
|
|
474,301
|
|
|
193,775
|
|
Increase in deferred
revenue
|
344,539
|
|
|
26,773
|
|
|
164,291
|
|
Net cash provided by
operating activities
|
941,586
|
|
|
623,522
|
|
|
598,739
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Advances of notes
receivable
|
(90,705)
|
|
|
(19,120)
|
|
|
(17,227)
|
|
Collections of notes
receivable
|
33,914
|
|
|
9,657
|
|
|
8,054
|
|
Investments made in
nonconsolidated affiliates
|
(46,497)
|
|
|
(25,170)
|
|
|
(28,922)
|
|
Purchases of
property, plant and equipment
|
(239,833)
|
|
|
(238,435)
|
|
|
(173,827)
|
|
Cash paid for
acquisitions, net of cash acquired
|
(120,228)
|
|
|
(47,946)
|
|
|
(211,624)
|
|
Purchases of
intangible assets
|
(35,630)
|
|
|
(10,977)
|
|
|
(6,234)
|
|
Other, net
|
2,070
|
|
|
4,405
|
|
|
3,303
|
|
Net cash used in
investing activities
|
(496,909)
|
|
|
(327,586)
|
|
|
(426,477)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from
long-term debt, net of debt issuance costs
|
858,667
|
|
|
60,912
|
|
|
844,451
|
|
Payments on long-term
debt including extinguishment costs
|
(400,396)
|
|
|
(110,855)
|
|
|
(606,831)
|
|
Contributions from
noncontrolling interests
|
4,900
|
|
|
10,671
|
|
|
88
|
|
Distributions to
noncontrolling interests
|
(59,187)
|
|
|
(46,036)
|
|
|
(55,131)
|
|
Purchases and sales
of noncontrolling interests, net
|
(159,634)
|
|
|
(71,509)
|
|
|
(69,106)
|
|
Proceeds from
exercise of stock options
|
22,568
|
|
|
51,069
|
|
|
20,299
|
|
Taxes paid for net
share settlement of equity awards
|
(55,005)
|
|
|
(5,452)
|
|
|
(4,107)
|
|
Payments for deferred
and contingent consideration
|
(18,784)
|
|
|
(15,883)
|
|
|
(20,539)
|
|
Other, net
|
(4,345)
|
|
|
—
|
|
|
(9,912)
|
|
Net cash provided by
(used in) financing activities
|
188,784
|
|
|
(127,083)
|
|
|
99,212
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(84,080)
|
|
|
130,394
|
|
|
(46,759)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
549,381
|
|
|
299,247
|
|
|
224,715
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,828,822
|
|
|
1,529,575
|
|
|
1,304,860
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
2,378,203
|
|
|
$
|
1,828,822
|
|
|
$
|
1,529,575
|
|
SUPPLEMENTAL
DISCLOSURE
|
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
|
Interest, net of
interest income
|
$
|
100,278
|
|
|
$
|
87,111
|
|
|
$
|
96,678
|
|
Income taxes, net of
refunds
|
$
|
60,016
|
|
|
$
|
44,871
|
|
|
$
|
30,312
|
|
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SOURCE Live Nation