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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
Form 10-Q
____________________________________ | | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
or | | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-32601
____________________________________
LIVE NATION ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
____________________________________ | | | | | | | | |
Delaware | | 20-3247759 |
(State of Incorporation) | | (I.R.S. Employer Identification No.) |
9348 Civic Center Drive
Beverly Hills, CA 90210
(Address of principal executive offices, including zip code)
(310) 867-7000
(Registrant’s telephone number, including area code)
______________________________________________________________ | | | | | | | | | | | | | | |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common stock, $.01 Par Value Per Share | | LYV | | New York Stock Exchange |
| | | | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | | | | | | | | | | | | | | | | | |
Large Accelerated Filer | x | | Accelerated Filer | | ¨ |
| | | | | |
Non-accelerated Filer | ¨ | | Smaller Reporting Company | | ☐ |
| | | Emerging Growth Company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No
On November 5, 2024, there were 232,353,685 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 1,754,415 shares of unvested restricted stock awards and excluding 408,024 shares held in treasury.
LIVE NATION ENTERTAINMENT, INC.
INDEX TO FORM 10-Q
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PART I—FINANCIAL INFORMATION | |
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PART II—OTHER INFORMATION | |
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(1) Prior period financial statements were restated as further discussed in Part I — Financial Information—Item 1.—Financial Statements—Note 9 – Correction of Errors in Previously Reported Consolidated Financial Statements.
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GLOSSARY OF KEY TERMS |
AOCI | Accumulated other comprehensive income (loss) |
AOI | Adjusted operating income (loss) |
Company | Live Nation Entertainment, Inc. and subsidiaries |
FASB | Financial Accounting Standards Board |
GAAP | United States Generally Accepted Accounting Principles |
| |
GTV | Gross transaction value |
LIBOR | London Inter-Bank Offered Rate |
Live Nation | Live Nation Entertainment, Inc. and subsidiaries |
SEC | United States Securities and Exchange Commission |
SOFR | Secured Overnight Financing Rate |
Ticketmaster | Our ticketing business |
VIE | Variable interest entities (as defined under GAAP) |
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) | | | | | | | | | | | |
| September 30, 2024 | | December 31, 2023 As Revised |
ASSETS | (in thousands) |
Current assets | | | |
Cash and cash equivalents | $ | 5,489,919 | | | $ | 6,231,866 | |
Accounts receivable, less allowance of $87,122 and $82,350, respectively | 2,693,998 | | | 2,024,649 | |
Prepaid expenses | 1,446,397 | | | 1,147,581 | |
Restricted cash | 10,884 | | | 7,090 | |
Other current assets | 133,956 | | | 122,163 | |
Total current assets | 9,775,154 | | | 9,533,349 | |
Property, plant and equipment, net | 2,375,868 | | | 2,101,463 | |
Operating lease assets | 1,642,298 | | | 1,606,389 | |
Intangible assets | | | |
Definite-lived intangible assets, net | 1,047,987 | | | 1,161,621 | |
Indefinite-lived intangible assets, net | 380,458 | | | 377,349 | |
Goodwill | 2,670,008 | | | 2,691,466 | |
Long-term advances | 577,229 | | | 623,154 | |
Other long-term assets | 1,278,068 | | | 934,849 | |
Total assets | $ | 19,747,070 | | | $ | 19,029,640 | |
LIABILITIES AND EQUITY | | | |
Current liabilities | | | |
Accounts payable, client accounts | $ | 2,081,034 | | | $ | 1,866,864 | |
Accounts payable | 294,765 | | | 267,493 | |
Accrued expenses | 3,454,183 | | | 3,030,812 | |
Deferred revenue | 3,034,514 | | | 3,398,028 | |
Current portion of long-term debt, net | 582,088 | | | 1,134,386 | |
Current portion of operating lease liabilities | 167,035 | | | 158,421 | |
Other current liabilities | 66,959 | | | 128,430 | |
Total current liabilities | 9,680,578 | | | 9,984,434 | |
Long-term debt, net | 5,672,804 | | | 5,459,026 | |
Long-term operating lease liabilities | 1,766,897 | | | 1,686,091 | |
| | | |
Other long-term liabilities | 673,141 | | | 488,159 | |
Commitments and contingent liabilities (see Note 6) | | | |
Redeemable noncontrolling interests | 1,023,907 | | | 859,930 | |
Stockholders' equity | | | |
Common stock | 2,310 | | | 2,298 | |
Additional paid-in capital | 2,214,938 | | | 2,367,918 | |
Accumulated deficit | (1,747,806) | | | (2,443,106) | |
Cost of shares held in treasury | (6,865) | | | (6,865) | |
Accumulated other comprehensive income (loss) | (174,611) | | | 27,450 | |
Total Live Nation stockholders' equity | 287,966 | | | (52,305) | |
Noncontrolling interests | 641,777 | | | 604,305 | |
Total equity | 929,743 | | | 552,000 | |
Total liabilities and equity | $ | 19,747,070 | | | $ | 19,029,640 | |
See Notes to Consolidated Financial Statements
2
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, | |
| 2024 | | 2023 | | 2024 | | 2023 | |
| | | As Revised | | | | As Revised | |
| (in thousands except share and per share data) | |
Revenue | $ | 7,651,087 | | | $ | 8,154,563 | | | $ | 17,474,032 | | | $ | 16,907,636 | | |
Operating expenses: | | | | | | | | |
Direct operating expenses | 5,780,188 | | | 6,297,883 | | | 12,839,737 | | | 12,589,606 | | |
Selling, general and administrative expenses | 1,005,418 | | | 974,150 | | | 2,913,199 | | | 2,533,066 | | |
Depreciation and amortization | 137,001 | | | 130,653 | | | 407,324 | | | 382,352 | | |
Gain on disposal of operating assets | (3,968) | | | (1,583) | | | (5,398) | | | (8,092) | | |
Corporate expenses | 92,923 | | | 99,802 | | | 255,216 | | | 244,295 | | |
Operating income | 639,525 | | | 653,658 | | | 1,063,954 | | | 1,166,409 | | |
Interest expense | 87,961 | | | 86,215 | | | 248,622 | | | 257,425 | | |
Loss on extinguishment of debt | — | | | — | | | — | | | 18,366 | | |
Interest income | (36,067) | | | (78,107) | | | (123,749) | | | (174,872) | | |
Equity in losses (earnings) of nonconsolidated affiliates | 13,987 | | | (5,382) | | | 8,527 | | | (15,047) | | |
| | | | | | | | |
Other expense (income), net | (12,268) | | | 19,251 | | | (110,064) | | | 24,235 | | |
Income before income taxes | 585,912 | | | 631,681 | | | 1,040,618 | | | 1,056,302 | | |
Income tax expense | 70,229 | | | 50,269 | | | 191,412 | | | 127,070 | | |
Net income | 515,683 | | | 581,412 | | | 849,206 | | | 929,232 | | |
Net income attributable to noncontrolling interests | 63,878 | | | 59,932 | | | 153,906 | | | 139,405 | | |
Net income attributable to common stockholders of Live Nation | $ | 451,805 | | | $ | 521,480 | | | $ | 695,300 | | | $ | 789,827 | | |
| | | | | | | | |
Basic net income per common share available to common stockholders of Live Nation | $ | 1.72 | | | $ | 2.01 | | | $ | 2.21 | | | $ | 2.70 | | |
Diluted net income per common share available to common stockholders of Live Nation | $ | 1.66 | | | $ | 1.93 | | | $ | 2.18 | | | $ | 2.66 | | |
| | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | |
Basic | 230,374,307 | | | 228,787,263 | | | 229,923,989 | | | 228,497,712 | | |
Diluted | 245,319,968 | | | 244,163,678 | | | 235,928,752 | | | 235,146,395 | | |
| | | | | | | | |
| | | | | | | | |
Reconciliation to net income available to common stockholders of Live Nation: | | | | | |
Net income attributable to common stockholders of Live Nation | $ | 451,805 | | | $ | 521,480 | | | $ | 695,300 | | | $ | 789,827 | | |
Accretion of redeemable noncontrolling interests | (54,536) | | | (60,882) | | | (186,970) | | | (172,436) | | |
Net income available to common stockholders of Live Nation—basic | $ | 397,269 | | | $ | 460,598 | | | $ | 508,330 | | | $ | 617,391 | | |
Convertible debt interest, net of tax | 10,790 | | | 10,877 | | | 6,971 | | | 7,835 | | |
Net income available to common stockholders of Live Nation—diluted | $ | 408,059 | | | $ | 471,475 | | | $ | 515,301 | | | $ | 625,226 | | |
| | | | | | | | |
See Notes to Consolidated Financial Statements
3
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| | | As Revised | | | | As Revised |
| (in thousands) |
Net income | $ | 515,683 | | | $ | 581,412 | | | $ | 849,206 | | | $ | 929,232 | |
Other comprehensive income, net of tax: | | | | | | | |
Unrealized gain (loss) on cash flow hedge | (8,062) | | | 6,293 | | | 3,320 | | | 14,002 | |
Realized gain on cash flow hedge | (4,878) | | | (4,632) | | | (14,370) | | | (12,436) | |
Foreign currency translation adjustments | (38,915) | | | (48,672) | | | (191,011) | | | 100,752 | |
Comprehensive income | 463,828 | | | 534,401 | | | 647,145 | | | 1,031,550 | |
Comprehensive income attributable to noncontrolling interests | 63,878 | | | 59,932 | | | 153,906 | | | 139,405 | |
Comprehensive income attributable to common stockholders of Live Nation | $ | 399,950 | | | $ | 474,469 | | | $ | 493,239 | | | $ | 892,145 | |
See Notes to Consolidated Financial Statements
4
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Live Nation Stockholders’ Equity | | | | | | |
| | Common Shares Issued | | Common Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Cost of Shares Held in Treasury | | Accumulated Other Comprehensive Loss | | Noncontrolling Interests | | Total Equity | | Redeemable Noncontrolling Interests |
| | (in thousands, except share data) | | (in thousands) |
Revised Balances at June 30, 2024 | | 230,711,943 | | | $ | 2,307 | | | $ | 2,240,759 | | | $ | (2,199,611) | | | $ | (6,865) | | | $ | (122,756) | | | $ | 594,240 | | | $ | 508,074 | | | $ | 970,574 | |
| | | | | | | | | | | | | | | | | | |
Non-cash and stock-based compensation | | — | | | — | | | 23,829 | | | — | | | — | | | — | | | — | | | 23,829 | | | — | |
Common stock issued under stock plans, net of shares withheld for employee taxes | | 30,770 | | | — | | | (2,322) | | | — | | | — | | | — | | | — | | | (2,322) | | | — | |
Exercise of stock options | | 250,641 | | | 3 | | | 6,520 | | | — | | | — | | | — | | | — | | | 6,523 | | | — | |
| | | | | | | | | | | | | | | | | | |
Acquisitions | | — | | | — | | | — | | | — | | | — | | | — | | | 17,216 | | | 17,216 | | | 9,606 | |
| | | | | | | | | | | | | | | | | | |
Purchases of noncontrolling interests | | — | | | — | | | (363) | | | — | | | — | | | — | | | — | | | (363) | | | (21,283) | |
| | | | | | | | | | | | | | | | | | |
Redeemable noncontrolling interests fair value adjustments | | — | | | — | | | (53,485) | | | — | | | — | | | — | | | — | | | (53,485) | | | 53,549 | |
Contributions received | | — | | | — | | | — | | | — | | | — | | | — | | | 3,000 | | | 3,000 | | | (28) | |
Cash distributions | | — | | | — | | | — | | | — | | | — | | | — | | | (21,827) | | | (21,827) | | | (6,099) | |
Other | | — | | | — | | | — | | | — | | | — | | | — | | | 4,420 | | | 4,420 | | | (1,562) | |
Comprehensive income (loss): | | | | | | | | | | | | | | | | | | |
Net income | | — | | | — | | | — | | | 451,805 | | | — | | | — | | | 44,728 | | | 496,533 | | | 19,150 | |
Unrealized loss on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | (8,062) | | | — | | | (8,062) | | | — | |
Realized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | (4,878) | | | — | | | (4,878) | | | — | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | — | | | (38,915) | | | — | | | (38,915) | | | — | |
Balances at September 30, 2024 | | 230,993,354 | | | $ | 2,310 | | | $ | 2,214,938 | | | $ | (1,747,806) | | | $ | (6,865) | | | $ | (174,611) | | | $ | 641,777 | | | $ | 929,743 | | | $ | 1,023,907 | |
See Notes to Consolidated Financial Statements
5
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Live Nation Stockholders’ Equity | | | | | | |
| | Common Shares Issued | | Common Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Cost of Shares Held in Treasury | | Accumulated Other Comprehensive Income (Loss) | | Noncontrolling Interests | | Total Equity | | Redeemable Noncontrolling Interests |
| | (in thousands, except share data) | | (in thousands) |
Revised Balances at December 31, 2023 | | 229,785,241 | | | $ | 2,298 | | | $ | 2,367,918 | | | $ | (2,443,106) | | | $ | (6,865) | | | $ | 27,450 | | | $ | 604,305 | | | $ | 552,000 | | | $ | 859,930 | |
| | | | | | | | | | | | | | | | | | |
Non-cash and stock-based compensation | | — | | | — | | | 86,969 | | | — | | | — | | | — | | | — | | | 86,969 | | | — | |
Common stock issued under stock plans, net of shares withheld for employee taxes | | 530,107 | | | 5 | | | (40,878) | | | — | | | — | | | — | | | — | | | (40,873) | | | — | |
Exercise of stock options | | 678,006 | | | 7 | | | 19,335 | | | — | | | — | | | — | | | — | | | 19,342 | | | — | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Acquisitions | | — | | | — | | | — | | | — | | | — | | | — | | | 54,594 | | | 54,594 | | | 45,378 | |
| | | | | | | | | | | | | | | | | | |
Purchases of noncontrolling interests | | — | | | — | | | (29,692) | | | — | | | — | | | — | | | (15,264) | | | (44,956) | | | (32,296) | |
| | | | | | | | | | | | | | | | | | |
Redeemable noncontrolling interests fair value adjustments | | — | | | — | | | (188,714) | | | — | | | — | | | — | | | — | | | (188,714) | | | 189,366 | |
Contributions received | | — | | | — | | | — | | | — | | | — | | | — | | | 3,000 | | | 3,000 | | | — | |
Cash distributions | | — | | | — | | | | | — | | | — | | | — | | | (126,054) | | | (126,054) | | | (73,780) | |
Other | | — | | | — | | | — | | | — | | | — | | | — | | | 5,182 | | | 5,182 | | | (2,583) | |
Comprehensive income (loss): | | | | | | | | | | | | | | | | | | |
Net income | | — | | | — | | | — | | | 695,300 | | | — | | | — | | | 116,014 | | | 811,314 | | | 37,892 | |
Unrealized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | 3,320 | | | — | | | 3,320 | | | — | |
Realized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | (14,370) | | | — | | | (14,370) | | | — | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | — | | | (191,011) | | | — | | | (191,011) | | | — | |
Balances at September 30, 2024 | | 230,993,354 | | | $ | 2,310 | | | $ | 2,214,938 | | | $ | (1,747,806) | | | $ | (6,865) | | | $ | (174,611) | | | $ | 641,777 | | | $ | 929,743 | | | $ | 1,023,907 | |
See Notes to Consolidated Financial Statements
6
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
As Revised
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Live Nation Stockholders’ Equity | | | | | | |
| | Common Shares Issued | | Common Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Cost of Shares Held in Treasury | | Accumulated Other Comprehensive Income | | Noncontrolling Interests | | Total Equity | | Redeemable Noncontrolling Interests |
| | (in thousands, except share data) | | (in thousands) |
Balances at June 30, 2023 | | 229,084,194 | | | $ | 2,291 | | | $ | 2,438,660 | | | $ | (2,731,652) | | | $ | (6,865) | | | $ | 59,253 | | | $ | 558,806 | | | $ | 320,493 | | | $ | 738,329 | |
Non-cash and stock-based compensation | | 58 | | | — | | | 26,537 | | | — | | | — | | | — | | | — | | | 26,537 | | | — | |
Common stock issued under stock plans, net of shares withheld for employee taxes | | 11,905 | | | — | | | (537) | | | — | | | — | | | — | | | — | | | (537) | | | — | |
Exercise of stock options | | 161,225 | | | 2 | | | 3,342 | | | — | | | — | | | — | | | — | | | 3,344 | | | — | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Acquisitions | | — | | | — | | | — | | | — | | | — | | | — | | | 49,387 | | | 49,387 | | | 20,411 | |
| | | | | | | | | | | | | | | | | | |
Purchases of noncontrolling interests | | — | | | — | | | 3,927 | | | — | | | — | | | — | | | — | | | 3,927 | | | (5,498) | |
Redeemable noncontrolling interests fair value adjustments | | — | | | — | | | (60,627) | | | — | | | — | | | — | | | — | | | (60,627) | | | 60,627 | |
Contributions received | | — | | | — | | | — | | | — | | | — | | | — | | | 772 | | | 772 | | | — | |
Cash distributions | | — | | | — | | | — | | | — | | | — | | | — | | | (13,489) | | | (13,489) | | | (2,691) | |
Other | | — | | | — | | | — | | | — | | | — | | | — | | | 2,164 | | | 2,164 | | | (2,208) | |
Comprehensive income (loss): | | | | | | | | | | | | | | | | | | |
Net income | | — | | | — | | | — | | | 521,480 | | | — | | | — | | | 45,578 | | | 567,058 | | | 14,354 | |
Unrealized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | 6,293 | | | — | | | 6,293 | | | — | |
Realized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | (4,632) | | | — | | | (4,632) | | | — | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | — | | | (48,672) | | | — | | | (48,672) | | | — | |
Balances at September 30, 2023 | | 229,257,382 | | | $ | 2,293 | | | $ | 2,411,302 | | | $ | (2,210,172) | | | $ | (6,865) | | | $ | 12,242 | | | $ | 643,218 | | | $ | 852,018 | | | $ | 823,324 | |
See Notes to Consolidated Financial Statements
7
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
As Revised
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Live Nation Stockholders’ Equity | | | | | | | | | | | | | |
| | Common Shares Issued | | Common Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Cost of Shares Held in Treasury | | Accumulated Other Comprehensive Income (Loss) | | Noncontrolling Interests | | Total Equity | | Redeemable Noncontrolling Interests | | | | | | | |
| | (in thousands, except share data) | | (in thousands) | | | | | | | |
Balances at December 31, 2022 | | 228,498,102 | | | $ | 2,285 | | | $ | 2,698,316 | | | $ | (2,999,999) | | | $ | (6,865) | | | $ | (90,076) | | | $ | 461,366 | | | $ | 65,027 | | | $ | 660,119 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non-cash and stock-based compensation | | 58 | | | — | | | 81,871 | | | — | | | — | | | — | | | — | | | 81,871 | | | — | | | | | | | | |
Common stock issued under stock plans, net of shares withheld for employee taxes | | 229,406 | | | 2 | | | (9,003) | | | — | | | — | | | — | | | — | | | (9,001) | | | — | | | | | | | | |
Exercise of stock options | | 373,066 | | | 4 | | | 8,339 | | | — | | | — | | | — | | | — | | | 8,343 | | | — | | | | | | | | |
Repurchase of 2.5% convertible senior notes due 2023 | | 156,750 | | | 2 | | | (27,327) | | | — | | | — | | | — | | | — | | | (27,325) | | | — | | | | | | | | |
Capped call transactions for 3.125% convertible senior notes due 2029 | | — | | | — | | | (75,500) | | | — | | | — | | | — | | | — | | | (75,500) | | | — | | | | | | | | |
Acquisitions | | — | | | — | | | — | | | — | | | — | | | — | | | 116,630 | | | 116,630 | | | 46,707 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Purchases of noncontrolling interests | | — | | | — | | | (93,721) | | | — | | | — | | | — | | | (27,090) | | | (120,811) | | | (4,839) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Redeemable noncontrolling interests fair value adjustments | | — | | | — | | | (171,673) | | | — | | | — | | | — | | | — | | | (171,673) | | | 171,673 | | | | | | | | |
Contributions received | | — | | | — | | | — | | | — | | | — | | | — | | | 15,403 | | | 15,403 | | | 85 | | | | | | | | |
Cash distributions | | — | | | — | | | | | — | | | — | | | — | | | (88,182) | | | (88,182) | | | (65,607) | | | | | | | | |
Other | | — | | | — | | | — | | | — | | | — | | | — | | | 56,484 | | | 56,484 | | | (15,612) | | | | | | | | |
Comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | — | | | — | | | — | | | 789,827 | | | — | | | — | | | 108,607 | | | 898,434 | | | 30,798 | | | | | | | | |
Unrealized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | 14,002 | | | — | | | 14,002 | | | — | | | | | | | | |
Realized gain on cash flow hedge | | — | | | — | | | — | | | — | | | — | | | (12,436) | | | — | | | (12,436) | | | — | | | | | | | | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | — | | | 100,752 | | | — | | | 100,752 | | | — | | | | | | | | |
Balances at September 30, 2023 | | 229,257,382 | | | $ | 2,293 | | | $ | 2,411,302 | | | $ | (2,210,172) | | | $ | (6,865) | | | $ | 12,242 | | | $ | 643,218 | | | $ | 852,018 | | | $ | 823,324 | | | | | | | | |
See Notes to Consolidated Financial Statements
8
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 |
| | | As Revised |
| (in thousands) |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 849,206 | | | $ | 929,232 | |
Reconciling items: | | | |
Depreciation | 221,841 | | | 193,654 | |
Amortization of definite-lived intangibles and indefinite-lived intangibles impairment loss | 185,483 | | | 188,698 | |
Amortization of non-recoupable ticketing contract advances | 62,237 | | | 58,518 | |
Deferred income tax benefit | (14,059) | | | (10,419) | |
Amortization of debt issuance costs and discounts | 13,168 | | | 13,707 | |
Loss on extinguishment of debt | — | | | 18,366 | |
Stock-based compensation expense | 85,450 | | | 85,905 | |
Unrealized changes in fair value of contingent consideration | (22,453) | | | 42,092 | |
| | | |
Equity in losses of nonconsolidated affiliates, net of distributions | 20,586 | | | 7,013 | |
Provision for uncollectible accounts receivable | (1,101) | | | 35,707 | |
Gain on mark-to-market of investments in nonconsolidated affiliates | (100,048) | | | (46,720) | |
Other, net | (11,618) | | | (12,249) | |
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | | | |
Increase in accounts receivable | (565,093) | | | (1,030,453) | |
Increase in prepaid expenses and other assets | (341,941) | | | (479,434) | |
| | | |
Increase in accounts payable, accrued expenses and other liabilities | 586,960 | | | 903,597 | |
Decrease in deferred revenue | (288,566) | | | (142,593) | |
Net cash provided by operating activities | 680,052 | | | 754,621 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Advances of notes receivable | (92,895) | | | (129,532) | |
Collections of notes receivable | 22,789 | | | 9,550 | |
| | | |
Investments made in nonconsolidated affiliates | (34,479) | | | (45,439) | |
Purchases of property, plant and equipment | (491,750) | | | (304,882) | |
| | | |
Cash acquired from (paid for) acquisitions, net of cash paid (acquired) | (49,456) | | | 29,151 | |
Purchases of intangible assets | (8,390) | | | (36,653) | |
| | | |
Other, net | 11,383 | | | 13,841 | |
Net cash used in investing activities | (642,798) | | | (463,964) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from long-term debt, net of debt issuance costs | 2,038 | | | 988,310 | |
Payments on long-term debt | (384,567) | | | (625,659) | |
Contributions from noncontrolling interests | 3,000 | | | 15,488 | |
Distributions to noncontrolling interests | (199,834) | | | (153,789) | |
Purchases of noncontrolling interests, net | (69,935) | | | (89,819) | |
Payments for capped call transactions | — | | | (75,500) | |
Proceeds from exercise of stock options | 19,342 | | | 8,343 | |
Taxes paid for net share settlement of equity awards | (40,873) | | | (9,001) | |
| | | |
Payments for deferred and contingent consideration | (21,581) | | | (13,690) | |
Other, net | (50) | | | 249 | |
Net cash provided by (used in) financing activities | (692,460) | | | 44,932 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (82,947) | | | (421) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (738,153) | | | 335,168 | |
Cash, cash equivalents and restricted cash at beginning of period | 6,238,956 | | | 5,620,194 | |
Cash, cash equivalents and restricted cash at end of period | $ | 5,500,803 | | | $ | 5,955,362 | |
See Notes to Consolidated Financial Statements
9
LIVE NATION ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION
Preparation of Interim Financial Statements
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, they include all normal and recurring accruals and adjustments necessary to present fairly the results of the interim periods shown. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals, acquisition accounting and impairments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Seasonality
Our Concerts and Sponsorship & Advertising segments typically experience higher revenue and operating income in the second and third quarters as our outdoor venue concerts and festivals primarily occur from May through October in most major markets. Our Ticketing segment revenue is impacted by fluctuations in the availability and timing of events for sale to the public, which vary depending upon scheduling by our clients.
Cash flows from our Concerts segment typically have a slightly different seasonality as partial payments are often made for artist performance fees and production costs for tours in advance of the date the related event tickets go on sale. These artist fees and production costs are expensed when the event occurs. Once tickets for an event go on sale, we generally begin to receive payments from ticket sales in advance of when the event occurs. In the United States, this cash is largely associated with events in our operated venues, notably amphitheaters, festivals, theaters and clubs. Internationally, this cash is from a combination of both events in our owned or operated venues, as well as events in third-party venues associated with our promoter’s share of tickets in allocation markets. We record these ticket sales as revenue when the event occurs. Our seasonality also results in higher balances in cash and cash equivalents, accounts receivable, prepaid expenses, accrued expenses and deferred revenue at different times in the year.
We expect our seasonality trends to evolve as we continue to expand our global operations.
Variable Interest Entities
In the normal course of business, we enter into joint ventures or make investments in companies that will allow us to expand our core business and enter new markets. In certain instances, such ventures or investments may be considered a VIE because the equity at risk is insufficient to permit it to carry on its activities without additional financial support from its equity owners. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The activities we believe most significantly impact the economic performance of our VIEs include the unilateral ability to approve the annual budget, to terminate key management and to approve entering into agreements with artists, among others. We have certain rights and obligations related to our involvement in the VIEs, including the requirement to provide operational cash flow funding.
As of September 30, 2024 and December 31, 2023, excluding intercompany balances and allocated goodwill and intangible assets, there were approximately $855 million and $940 million of assets and $580 million and $592 million of liabilities, respectively, related to VIEs included in our balance sheets. None of our VIEs are significant on an individual basis.
Cash and Cash Equivalents
Included in the September 30, 2024 and December 31, 2023 cash and cash equivalents balance is $1.6 billion and $1.5 billion, respectively, of cash received that includes the face value of tickets sold on behalf of our ticketing clients and their share of service charges (“client cash”), which amounts are to be remitted to these clients. We generally do not utilize client cash for our own financing or investing activities as the amounts are payable to our clients on a regular basis. These amounts due to our clients are included in accounts payable, client accounts.
Income Taxes
Each reporting period, we evaluate the realizability of our deferred tax assets in each tax jurisdiction. As of September 30, 2024, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions, including the United States, due to cumulative pre-tax losses. As a result of the valuation allowances, no tax benefits have been recognized for any losses incurred in those tax jurisdictions for the first nine months of 2024.
Accounting Pronouncements
In June 2022, the FASB issued Accounting Standards Update 2022-03, which clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. We adopted this guidance on January 1, 2024. The adoption did not and is not expected to have a material impact on our consolidated financial statements.
In November 2023, the FASB issued Accounting Standards Update 2023-07, which expands segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss. This guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance.
NOTE 2—LONG-LIVED ASSETS, INTANGIBLES, AND GOODWILL
Property, Plant and Equipment, Net
Property, plant and equipment includes expenditures for the construction of new venues, major renovations to existing buildings or buildings that are being added to our venue network, the development of new ticketing tools and technology enhancements along with the renewal and improvement of existing venues and technology systems, web development and administrative offices.
Property, plant and equipment, net, consisted of the following: | | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (in thousands) |
Land, buildings and improvements | | $ | 2,243,158 | | | $ | 2,043,595 | |
Computer equipment and capitalized software | | 926,193 | | | 888,065 | |
Furniture and other equipment | | 744,635 | | | 646,966 | |
Construction in progress | | 399,353 | | | 317,028 | |
Property, plant and equipment, gross | | 4,313,339 | | | 3,895,654 | |
Less: accumulated depreciation | | 1,937,471 | | | 1,794,191 | |
Property, plant and equipment, net | | $ | 2,375,868 | | | $ | 2,101,463 | |
Definite-lived Intangible Assets
The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the nine months ended September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue- generating contracts | | Client / vendor relationships | | Venue management | | Trademarks and naming rights | | | | Technology and Other (1) | | Total |
| (in thousands) |
Balance as of December 31, 2023: | | | | | | | | | | |
Gross carrying amount | $ | 925,257 | | | $ | 583,436 | | | $ | 226,788 | | | $ | 183,493 | | | | | $ | 20,220 | | | $ | 1,939,194 | |
Accumulated amortization | (336,625) | | | (251,649) | | | (79,218) | | | (104,036) | | | | | (6,045) | | | (777,573) | |
Net | 588,632 | | | 331,787 | | | 147,570 | | | 79,457 | | | | | 14,175 | | | 1,161,621 | |
Gross carrying amount: | | | | | | | | | |
Acquisitions and additions—current year | 68,453 | | | 48,937 | | | 1,256 | | | 3,000 | | | | | 7,939 | | | 129,585 | |
Acquisitions and additions—prior year | 826 | | | 4,066 | | | 453 | | | (2) | | | | | — | | | 5,343 | |
| | | | | | | | | | | | | |
Foreign exchange | (58,063) | | | (16,985) | | | (2,191) | | | (8,810) | | | | | (94) | | | (86,143) | |
Other (2) | (15,575) | | | (20,132) | | | (23,930) | | | (3,213) | | | | | (823) | | | (63,673) | |
Net change | (4,359) | | | 15,886 | | | (24,412) | | | (9,025) | | | | | 7,022 | | | (14,888) | |
Accumulated amortization: | | | | | | | | | |
Amortization | (82,677) | | | (64,266) | | | (17,887) | | | (13,585) | | | | | (6,535) | | | (184,950) | |
| | | | | | | | | | | | | |
Foreign exchange | 15,438 | | | 4,612 | | | 107 | | | 2,521 | | | | | (12) | | | 22,666 | |
Other (2) | 15,575 | | | 20,132 | | | 24,032 | | | 2,863 | | | | | 936 | | | 63,538 | |
Net change | (51,664) | | | (39,522) | | | 6,252 | | | (8,201) | | | | | (5,611) | | | (98,746) | |
Balance as of September 30, 2024: | | | | | | | | | | |
Gross carrying amount | 920,898 | | | 599,322 | | | 202,376 | | | 174,468 | | | | | 27,242 | | | 1,924,306 | |
Accumulated amortization | (388,289) | | | (291,171) | | | (72,966) | | | (112,237) | | | | | (11,656) | | | (876,319) | |
Net | $ | 532,609 | | | $ | 308,151 | | | $ | 129,410 | | | $ | 62,231 | | | | | $ | 15,586 | | | $ | 1,047,987 | |
(1) Other primarily includes intangible assets for non-compete agreements.
(2) Other primarily includes netdowns of fully amortized or impaired assets.
Included in the current year acquisitions amounts above are definite-lived intangible assets primarily associated with the acquisitions of a festival promotion business, an artist management business and a concert promotion company, all located in the United States.
The 2024 acquisitions and additions to definite-lived intangible assets had weighted-average lives as follows:
| | | | | |
| Weighted- Average Life (years) |
Revenue-generating contracts | 9 |
Client/vendor relationships | 5 |
Trademarks and naming rights | 10 |
| |
Venue management | 3 |
Technology | 3 |
| |
All categories | 7 |
Amortization of definite-lived intangible assets for the three months ended September 30, 2024 and 2023 was $61.3 million and $63.4 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $185.0 million and $176.1 million, respectively. As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization expense may vary.
Goodwill
The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the nine months ended September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | |
| Concerts | | Ticketing | | Sponsorship & Advertising | | | Total |
| (in thousands) |
Balance as of December 31, 2023: | | | | | | | | |
Goodwill | $ | 1,439,579 | | | $ | 1,012,530 | | | $ | 674,720 | | | | $ | 3,126,829 | |
Accumulated impairment losses | (435,363) | | | — | | | — | | | | (435,363) | |
Net | 1,004,216 | | | 1,012,530 | | | 674,720 | | | | 2,691,466 | |
| | | | | | | | |
Acquisitions—current year | 25,797 | | | 507 | | | 1,015 | | | | 27,319 | |
Acquisitions—prior year | 4,136 | | | — | | | — | | | | 4,136 | |
| | | | | | | | |
| | | | | | | | |
Foreign exchange | 911 | | | (31,056) | | | (22,768) | | | | (52,913) | |
| | | | | | | | |
Balance as of September 30, 2024: | | | | | | | | |
Goodwill | 1,470,423 | | | 981,981 | | | 652,967 | | | | 3,105,371 | |
Accumulated impairment losses | (435,363) | | | — | | | — | | | | (435,363) | |
Net | $ | 1,035,060 | | | $ | 981,981 | | | $ | 652,967 | | | | $ | 2,670,008 | |
Included in the current year acquisitions amounts above are goodwill primarily associated with the acquisitions of a festival promotion business, an artist management business and a concert promotion company, all located in the United States.
We are in various stages of finalizing our acquisition accounting for recent acquisitions, which may include the use of external valuation consultants, and the completion of this accounting could result in a change to the associated purchase price allocations, including goodwill and our allocation between segments.
Investments in Nonconsolidated Affiliates
At September 30, 2024 and December 31, 2023, we had investments in nonconsolidated affiliates of $514.9 million and $447.5 million, respectively, included in other long-term assets on our consolidated balance sheets.
NOTE 3—LEASES
The significant components of operating lease expense are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| (in thousands) |
Operating lease expense | $ | 64,543 | | | $ | 63,954 | | | $ | 197,051 | | | $ | 206,282 | |
Variable and short-term lease expense | 74,936 | | | 85,148 | | | 148,848 | | | 157,453 | |
Sublease income | (1,447) | | | (1,865) | | | (4,560) | | | (6,477) | |
Net lease expense | $ | 138,032 | | | $ | 147,237 | | | $ | 341,339 | | | $ | 357,258 | |
Many of our leases contain contingent rent obligations based on revenue, tickets sold or other variables. Contingent rent obligations, including those related to subsequent changes in the prevailing index or market rate after lease inception, are not included in the initial measurement of the lease asset or liability and are recorded as rent expense in the period that the contingency is resolved.
Supplemental cash flow information for our operating leases is as follows:
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 |
| (in thousands) |
Cash paid for amounts included in the measurement of lease liabilities | $ | 212,983 | | | $ | 195,945 | |
Lease assets obtained in exchange for lease obligations, net of terminations | $ | 200,039 | | | $ | 148,960 | |
As of September 30, 2024, we have additional operating leases that have not yet commenced, with total lease payments of $207.0 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from October 2024 to June 2030 with lease terms ranging from 3 to 28 years.
NOTE 4—LONG-TERM DEBT
Long-term debt, which includes finance leases, consisted of the following: | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | September 30, 2024 | | December 31, 2023 |
| | | | | (in thousands) |
Senior Secured Credit Facility: | | | | |
| | | | | |
| | | | | |
| | | Term loan B | | $ | 830,348 | | | $ | 836,903 | |
| | | Revolving credit facility | | — | | | 370,000 | |
6.5% Senior Secured Notes due 2027 | | 1,200,000 | | | 1,200,000 | |
3.75% Senior Secured Notes due 2028 | | 500,000 | | | 500,000 | |
4.875% Senior Notes due 2024 | | 575,000 | | | 575,000 | |
5.625% Senior Notes due 2026 | | 300,000 | | | 300,000 | |
4.75% Senior Notes due 2027 | | 950,000 | | | 950,000 | |
| | | | |
2.0% Convertible Senior Notes due 2025 | | 400,000 | | | 400,000 | |
3.125% Convertible Senior Notes due 2029 | | 1,000,000 | | | 1,000,000 | |
Other debt | | 538,824 | | | 511,210 | |
Total principal amount | | 6,294,172 | | | 6,643,113 | |
| | | Less: unamortized discounts and debt issuance costs | | (39,280) | | | (49,701) | |
Total debt, net of unamortized discounts and debt issuance costs | | 6,254,892 | | | 6,593,412 | |
| | | Less: current portion | | 582,088 | | | 1,134,386 | |
Total long-term debt, net | | $ | 5,672,804 | | | $ | 5,459,026 | |
| | | | | | | |
Future maturities of debt at September 30, 2024 are as follows:
| | | | | |
| (in thousands) |
Remainder of 2024 | $ | 550,365 | |
2025 | 56,977 | |
2026 | 1,398,179 | |
2027 | 2,153,854 | |
2028 | 2,091,490 | |
Thereafter | 43,307 | |
Total | $ | 6,294,172 | |
All debt without a stated maturity date is considered current and is reflected as maturing in the earliest period shown in the table above. See Note 5 – Fair Value Measurements for discussion of the fair value measurement of our debt.
Other Debt
As of September 30, 2024, other debt includes $275.0 million for a note due in 2026 related to an acquisition of a venue in the United States during the first quarter of 2023 and $129.2 million for a Euro-denominated note due in 2024 related to a venue located in Europe.
Subsequent Event
On October 31, 2024, we drew down $585 million from our senior secured revolving credit facility, and on November 1, 2024, we used these funds to repay the $575 million principal amount plus accrued interest on our 4.875% senior notes. As a result of this drawdown, the 4.875% senior notes were classified as long-term debt as of September 30, 2024 due to utilizing our revolving credit facility for the payment which has a maturity date in 2029, as amended below.
On November 5, 2024, we amended our senior secured credit facility and entered into Amendment No. 12 (the “Amendment”) to our Credit Agreement, dated as of May 6, 2010 (as amended, restated, supplemented or modified prior to Amendment No. 12, the “Credit Agreement” and as amended by Amendment No. 12, the “Amended Credit Agreement”). The Amendment added a venue expansion revolving credit facility of $400 million, which resulted in a total available borrowing capacity of $1.7 billion.
The Amended Credit Agreement contains a financial covenant that requires the Company to maintain a maximum ratio of consolidated net debt to consolidated EBITDA (both as defined in the Amended Credit Agreement) that ranges from 6.75x to 5.25x, with the first step down of