What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-30 compared with 2024-05-02 · 173 added, 114 removed, 259 unchanged (53% of the section changed)

15 unchanged sentences

Executive Overview

For the third year in a row, the first quarter was a record start to the year for the Company with strong fan demand across all our markets.

Our overall revenue increased by 21% to $3.8 billion on a reported basis, or 22% growth on a constant currency basis as compared to the same period of the prior year.

Concerts and Sponsorship both had revenue growth in excess of 20% while Ticketing had high single-digit growth.

The most significant growth came from our Concerts segment as a result of increased shows and fans.

Our operating income for the quarter decreased by $179.3 million, from an operating income of $142.8 million in the first quarter of 2023 to an operating loss of $36.5 million in the first quarter of 2024 due to higher performance from all three of our major business segments offset by Astroworld estimated loss contingencies in our Concerts segment.

The decrease in operating income was $166.4 million at constant currency.

Based on our strong pipeline of arena, amphitheater and theater and club shows for the remainder of the year, coupled with our current deferred revenue balance of $5.0 billion as of March 31, 2024, we are optimistic for continued success in the remainder of the year even with reduced stadium activity relative to the prior year.

For the third year in a row, our second quarter was a record for the Company with operating income and AOI both up 21% versus 2023.

Compared to just five years ago, we have more than doubled our second quarter revenue, operating income and AOI results.

For the second quarter of 2024, our overall revenue increased by 7% to $6.0 billion on a reported basis as compared to the same period last year.

On a constant currency basis, the growth was also 7%.

The most significant growth came from our Concerts segment as a result of market expansion in the form of increased show count, fans, and onsite spend.

Our operating income for the quarter increased by $79.4 million, or 21%, from $386.4 million in the second quarter of 2023 to $465.8 million in the second quarter of 2024 due to higher performance from all three of our major business segments, most notably our Concerts segment.

The increase in operating income was $88 million, or 23%, at constant currency.

For the first six months of 2024, our consolidated revenue increased by $1.06 billion, or 12%, compared to the same period in 2023, from $8.76 billion to $9.82 billion.

The increase was $1.1 billion, or 13%, on a constant currency basis.

We had consolidated operating income of $429 million for the first six months of 2024, compared to $529 million for the first six months of 2023, a decrease of $100 million.

Stronger operating performance in all three of our major business segments was offset by Astroworld estimated loss contingencies in our Concerts segment.

Consolidated AOI for the first six months increased by $174 million, or 19%, compared to the same period in 2023, from $909 million to $1.1 billion.

The increase was $193 million, or 21%, on a constant currency basis.

Based on our strong pipeline of arena, amphitheater and theater and club shows for the remainder of the year as well as ticket sales for 2024 shows pacing ahead of last year, we are optimistic for continued success in the remainder of the year even with reduced stadium activity relative to the prior year.

All of the segment financial comments to follow are based on reported foreign currency exchange rates.

Our Concerts segment revenue for the quarter increased by $598 million, or 26%, from $2.3 billion in the first quarter of 2023 to $2.9 billion in the first quarter of 2024.

The revenue growth was largely the result of more shows and fans both domestically and in our International markets.

The number of events for the first quarter of 2024 was approximately 11,200 compared to approximately 9,900 in the first quarter of 2023, an increase of approximately 1,300 events or 13%.

The number of fans for the quarter was 22.9 million compared to approximately 18.9 million last year, for growth of 4.0 million fans or 21%.

The increase was largely in the United States, Canada and Mexico.

Arena shows fueled the improvement with fan count up nearly 40% in these venues.

Some of the notable acts touring in the first quarter included Coldplay, Pink, Bad Bunny and Madonna.

Our festivals in Latin America included Estereo Picnic in Bogota, Lollapalooza in Sao Paulo and EDC Mexico in Mexico City.

Combined, our festivals in these markets had three quarters of a million fans.

Concerts AOI for the quarter was $3 million compared to $1 million in the first quarter of 2023.

Our Ticketing segment revenue for the quarter increased by $45 million, or 7%, from $678 million in the first quarter of 2023 to $723 million in the first quarter of 2024.

The improvement resulted from an increase in ticket sales, notably in Europe and Latin America.

We sold approximately 77 million fee-bearing tickets in the first quarter of 2024 compared to 72 million tickets in the same period of the prior year, an increase of 6%.

This was our highest first quarter ever for fee-bearing ticket sales driven by double-digit growth in Europe, Asia-Pacific and Latin America.

It was our highest first quarter for GTV as well.

In the first quarter, we signed 7 million net new tickets of which 70% came from our International markets – one of our best leading indicators regarding the future success of our Ticketing business.

Ticketing AOI for the quarter improved by $13 million, from $271 million in the first quarter of 2023 to $284 million in the first quarter of 2024.

The combination of record ticket sales, GTV and the expansion of our resale business resulted in our strongest Ticketing AOI ever for the first quarter.

Our Sponsorship & Advertising segment revenue for the quarter increased by $41 million, or 24%, from $170 million in the first quarter of 2023 to $211 million in the first quarter of 2024.

The improvement was largely due to our festivals in Latin America.

It was our inaugural year consolidating the Estero Picnic festival in Colombia as well as Lollapalooza in Brazil.

These two events, along with a number of well attended festivals in Mexico, led to significant revenue and AOI growth for Sponsorship & Advertising.

AOI for the quarter increased by $34 million, from $96 million in the first quarter of 2023 to $130 million in the first quarter of 2024.

We are optimistic about the long-term potential of our Company and are focused on the key elements of our business model:

expanding our global concerts platform to connect artists and fans, bringing more shows to fans in existing and new markets as well as improving the on-site experience for our fans by enhancing food and beverage products and premium service offerings.

Our Concerts segment revenue for the quarter increased by $354 million, or 8%, from $4.6 billion in the second quarter of 2023 to $5.0 billion in the second quarter of 2024.

The revenue growth was partially the result of more shows and fans in North America.

The number of events for the second quarter of 2024 was approximately 14,700 compared to approximately 12,300 in the second quarter of 2023, an increase of 2,400 events or 20%.

The number of fans for the quarter was 38.9 million compared to 37.1 million last year, for growth of 1.8 million fans or 5%.

The increase in activity was largely in the United States, powered by fan count at our owned or operated venues, excluding festivals, was up 18% for the quarter.

Following the trend from the first quarter of 2024, arena activity was also very strong, with double digit growth globally, most notably in the United States and Latin America.

Some of the major acts touring in the second quarter included Olivia Rodrigo, Bad Bunny, Metallica and Noah Kahan.

Our larger festivals in the quarter included EDC Vegas, Bottlerock and Download in the United Kingdom.

With amphitheater show count up by over 25% and activity in our owned or operated venues increasing, onsite spend in our amphitheaters increased by nearly 40%.

As a result, Concerts operating income for the quarter improved by $37.1 million compared to the same period in 2023, from $78.5 million to $115.6 million.

Meanwhile, Concerts AOI for the quarter was $271 million compared to $168 million in the second quarter of 2023, for growth of $103 million or 61%.

Operating income margins increased from 1.7% in the second quarter of 2023 to 2.3% in the second quarter of 2024 while AOI margin for the second quarter of 2024 was 5.4% compared to 3.6% last year.

On a year-to-date basis, Concerts margins are out-pacing 2019 which was our previous record year for margins.

For the first six months of 2024, Concerts revenue grew $952 million compared to the same period in 2023, from $6.9 billion to $7.9 billion.

For the first six months of 2024, our Concerts fan count was nearly 62 million compared to 56 million compared to the same period in 2023, an improvement of 6 million fans or 10%.

Onsite spending at our United States amphitheater shows for the first six months of 2024 is pacing ahead of full-year 2023 and on-track to deliver $2 more per fan for the season, driven by higher food and beverage spending.

For our larger festivals, the onsite spend growth has been even stronger.

With roughly 40% of our festival events now played off, we have seen double-digit growth in per fan spend, driven largely by higher food and beverage and VIP sales.

Concerts AOI for the first six months increased by $105 million, or 62%, compared to the same period in 2023, from $169 million to $274 million.

We operate the world’s leading ticketing software and marketplace, tailored to achieving the goals of content owners, venues and sports teams.

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Our ticket marketplaces have reduced friction in the ticket purchase experience and created additional revenue opportunities.

In addition, we continue to grow our sponsorship and advertising partnerships and our clients are able to reach their customers via the powerful connection that live shows creates with ardent fans.

Our Ticketing segment revenue for the quarter increased by $21 million, or 3%, from $709.3 million in the second quarter of 2023 to $730.7 million in the second quarter of 2024.

We sold approximately 78 million fee-bearing tickets in the second quarter of 2024 compared to 79 million tickets in the same period of the prior year.

Our revenue and ticket sales were flat despite the reduction in stadium sales, reflecting strong demand for arena and amphitheater shows.

It was our fifth highest quarter ever in terms of ticket volume, both on a reported and transacted basis.

Ticketing AOI for the quarter was $293 million, essentially even with last year.

For the first six months of 2024, our Ticketing segment revenue grew by $67 million compared to the same period in 2023, from $1.4 billion to $1.5 billion.

Ticketing AOI for the first six months of 2024 increased by $13 million compared to the same period in 2022, from $564 million to $577 million.

Through the end of June 2024, our fee-bearing ticket sales were 155 million tickets, 4 million ahead of 2023.

We have signed clients with over 17 million net new tickets so far this year, of which two-thirds are in our international markets, which gives us confidence our ticketing platforms’ features and functionalities will continue to fuel growth going forward.

We continue to grow our sponsorship and advertising partnerships and our clients are able to reach their customers via the powerful connection that live shows creates with ardent fans.

Our Sponsorship & Advertising segment revenue for the quarter increased by $9 million, or 3%, from $303 million in the second quarter of 2023 to $312 million in the second quarter of 2024.

The improvement was largely due to strategic deals in the United States as well as the success of our international festivals.

For the first six months of 2024, our sponsorship growth has been driven by our owned or operated venues and festival assets, re-emphasizing the importance of our venues footprint and expansion strategy.

AOI for the quarter increased by $19.5 million, from $203.1 million in the second quarter of 2023 to $222.6 million in the second quarter of 2024.

For the first six months of 2024, our Sponsorship & Advertising revenue grew $50.5 million compared to the same period in 2023, from $473.0 million to $523.5 million.

Sponsorship & Advertising AOI for the first six months increased by $54 million compared to the same period in 2023, from $299 million to $353 million.

We are optimistic about the long-term potential of our Company and are focused on the key elements of our business model:

expanding our global platforms to connect artists and fans.

Consolidated Results of Operations

Three Months Ended March 31, % Change

Three Months Ended June 30, % Change

As Reported Currency Impacts At Constant Currency** As Reported As Reported At Constant Currency**

5 unchanged sentences

Depreciation and amortization 137,729 136,514 1%

Loss (gain) on disposal of operating assets (651) 504 *

Gain on disposal of operating assets (779) (7,013) 89%

Corporate expenses 86,216 81,478 6%

Operating income (loss) (36,507) 12,902 (23,605) 142,776 * *

Operating income 465,819 8,457 474,276 386,371 21% 23%

Operating margin 7.7% 7.8% 6.9%

Interest expense 79,970 81,995

Interest income (44,425) (56,452)

Equity in earnings of nonconsolidated affiliates (5,376) (5,558)

Other income, net (20,742) (6,599)

Income before income taxes 456,392 372,985

Income tax expense 80,164 41,648

Net income 376,228 331,337

Net income attributable to noncontrolling interests 78,258 37,655

Net income attributable to common stockholders of Live Nation $ 297,970 $ 293,682

** 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.

Revenue increased $392.7 million during the three months ended June 30, 2024 as compared to the same period of the prior year due to increased revenue in our Concerts segment of $353.7 million, Ticketing segment of $21.3 million and Sponsorship & Advertising segment of $9.4 million as further discussed within each segment’s operating results.

Operating income

Operating income increased $79.4 million during the three months ended June 30, 2024 as compared to the same period of the prior year primarily driven by increased operating income in our Concerts segment of $37.1 million, Ticketing segment of $2.2 million and Sponsorship & Advertising segment of $28.8 million as further discussed within each segment’s operating results.

Net income attributable to noncontrolling interests

Net income attributable to noncontrolling interests increased $40.6 million during the three months ended June 30, 2024 as compared to the same period of the prior year primarily due to higher operating results from certain concert businesses.

Consolidated Results of Operations

Six Months Ended June 30, % Change

As Reported Currency Impacts At Constant Currency** As Reported As Reported At Constant Currency**

(in thousands)

Revenue $ 9,822,945 $ 35,925 $ 9,858,870 $ 8,758,113 12% 13%

Operating expenses:

Direct operating expenses 7,054,666 6,280,367 12%

Selling, general and administrative expenses 1,907,781 1,558,916 22%

Depreciation and amortization 270,323 251,699 7%

Gain on disposal of operating assets (1,430) (6,509) (78)%

Corporate expenses 162,293 144,493 12%

Operating income 429,312 21,359 450,671 529,147 (19)% (15)%

Operating margin 4.4% 4.6 % 6.0%

Interest expense 160,661 171,210

Loss on extinguishment of debt — 18,366

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Income tax expense 115,578 65,488

Net income (loss) (32,217) 44,192

Net income 344,011 375,529

Net income attributable to noncontrolling interests 92,774 85,016

Net loss attributable to common stockholders of Live Nation $ (46,733) $ (3,169)

* Percentages are not meaningful.

Net income attributable to common stockholders of Live Nation $ 251,237 $ 290,513

** Constant currency is a non-GAAP financial measure.

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We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

Revenue increased $672.1 million during the three months ended March 31, 2024 as compared to the same period of the prior year driven by increased revenue in our Concerts segment of $598.2 million, Ticketing segment of $45.4 million and Sponsorship & Advertising of $41.2 million as further discussed within each segment’s operating results.

Revenue increased $1.1 billion during the six months ended June 30, 2024 as compared to the same period of the prior year driven by increased revenue in our Concerts segment of $951.9 million, Ticketing segment of $66.8 million and Sponsorship & Advertising segment of $50.5 million as further discussed within each segment’s operating results.

Operating income

Operating income decreased $179.3 million during the three months ended March 31, 2024 as compared to the same period of the prior year primarily driven by increased operating losses in our Concerts segment of $212.2 million partially offset by higher operating income in our Sponsorship & Advertising segment of $34.6 million and Ticketing segment of $9.6 million as further discussed within each segment’s operating results.

Operating income decreased $99.8 million during the six months ended June 30, 2024 as compared to the same period of the prior year primarily driven by decreased operating income in our Concerts segment of $175.1 million partially offset by increased operating income in our Ticketing segment of $11.8 million and Sponsorship & Advertising segment of $63.3 million, as further discussed within each segment’s operating results.

Other expense (income), net

For the three months ended March 31, 2024, we had other income, net of $77.1 million which includes mark to market adjustments for certain investments in nonconsolidated affiliates of $88.7 million, partially offset by net foreign exchange rate losses of $11.8 million.

For the three months ended March 31, 2023, we had other expense, net of $11.6 million which includes net foreign exchange rate losses of $9.5 million.

For the six months ended June 30, 2024, we had other income, net of $97.8 million which includes mark to market adjustments for certain investments in nonconsolidated affiliates of $88.8 million.

For the six months ended June 30, 2023, we had other expense, net of $5.0 million which includes net foreign exchange rate losses of $29.8 million partially offset by mark to market adjustments for certain investments in nonconsolidated affiliates of $26.5 million.

The net foreign exchange rate losses result primarily from revaluation of certain foreign currency denominated net assets held internationally.

Income tax expense

For the three months ended March 31, 2024, we had a net tax expense of $35.4 million on income before income taxes of $3.2 million compared to a net tax expense of $23.8 million on income before income taxes of $68.0 million for the three months ended March 31, 2023.

For the three months ended March 31, 2024, the income tax expense consisted of $28.0 million related to foreign entities, $1.3 million related to United States federal taxes, and $6.1 million related to state and local income taxes.

For the six months ended June 30, 2024, we had a net tax expense of $115.6 million on income before income taxes of $459.6 million compared to a net tax expense of $65.5 million on an income before income taxes of $441.0 million for the six months ended June 30, 2023.

For the six months ended June 30, 2024, the income tax expense consisted of $96.5 million related to foreign entities, $2.7 million related to United States federal taxes, and $16.4 million related to state and local income taxes.

The net increase in tax expense of $50.1 million was primarily due to profits in certain non-United States jurisdictions.

Net income attributable to noncontrolling interests

Net income attributable to noncontrolling interests decreased $32.8 million during the three months ended March 31, 2024 as compared to the same period of the prior year primarily due to lower operating results from certain concert businesses during the first three months of 2024 as compared to the prior year.

Non-GAAP Measure

AOI is a non-GAAP financial measure that we define as consolidated operating income (loss) before certain acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation), amortization of non-recoupable ticketing contract advances, depreciation and amortization (including goodwill impairment), loss (gain) on disposal of operating assets, and stock-based compensation expense.

We also exclude from AOI the impact of estimated or realized liabilities for settlements or damages arising out of the Astroworld matter that exceed our estimated insurance recovery, due to the significant and non-recurring nature of the matter, which involved multiple fatalities and injury claims.

AOI is a non-GAAP financial measure that we define as consolidated operating income (loss) before certain acquisition expenses (including ongoing legal costs stemming from the Ticketmaster merger, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation), amortization of non-recoupable ticketing contract advances, depreciation and amortization (including goodwill impairment), loss (gain) on disposal of operating assets, and stock-based compensation expense.

Ongoing legal costs associated with defense of these claims, such as attorney fees, are not excluded from AOI.

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thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.

AOI margin is a non-GAAP financial measure that we calculate by dividing AOI by revenue.

We use AOI margin to evaluate the performance of our operating segments.

We believe that information about AOI margin 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 margin is not calculated or presented in accordance with GAAP.

A limitation of the use of AOI margin 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 margin should be considered in addition to, and not as a substitute for, operating income (loss) margin, and other measures of financial performance reported in accordance with GAAP.

Furthermore, this measure may vary among other companies;

thus, AOI margin as presented herein may not be comparable to similarly titled measures of other companies.

The following table sets forth the reconciliation of consolidated operating income to consolidated AOI for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

The following table sets forth the reconciliation of consolidated operating income to consolidated AOI for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

(in thousands)

Operating income (loss) $ (36,507) $ 142,776

Operating income $ 465,819 $ 386,371 $ 429,312 $ 529,147

Acquisition expenses (30,035) 24,829 522 38,140

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Depreciation and amortization 137,729 136,514 270,323 251,699

Loss (gain) on disposal of operating assets (651) 504

Gain on sale of operating assets (779) (7,013) (1,430) (6,509)

Astroworld estimated loss contingencies 94,000 — 279,915 —

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Concerts direct operating expenses include artist fees, event production costs, show-related marketing and advertising expenses, along with other costs.

To judge the health of our Concerts segment, we primarily monitor the number of confirmed events and fan attendance in our network of owned or operated and third-party venues, talent fees, average paid attendance, market ticket pricing, advance ticket sales and the number of major artist clients under management.

In addition, at our owned or operated venues and festivals, we monitor APF and premium ticket sales.

To judge the health of our Concerts segment, we primarily monitor the number of confirmed events and fan attendance in our network of operated and third-party venues, talent fees, average paid attendance, market ticket pricing, advance ticket sales and the number of major artist clients under management.

In addition, at our operated venues and festivals, we monitor ancillary revenue per fan and premium ticket sales.

For business that is conducted in foreign markets, we also compare the operating results from our foreign operations to prior periods without the impact of changes in foreign exchange rates.

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in thousands except estimated events)

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North America (2)

9,990 8,111 17,167 14,420

International 4,688 4,130 8,714 7,726

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North America (2)

23,187 18,474 34,078 26,131

International 15,706 18,599 27,744 29,842

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Three Months Ended

(in thousands)

Change Six Months Ended

2024 2023 2024 2023

(in thousands) (in thousands)

Revenue $ 4,987,039 $ 4,633,291 8% $ 7,866,414 $ 6,914,503 14%

2 unchanged sentences

Depreciation and amortization 92,646 72,913 27% 183,009 143,441 28%

Loss (gain) on disposal of operating assets (712) 115 *

Operating loss $ (296,607) $ (84,422) *

Gain on disposal of operating assets (780) (6,674) (88)% (1,492) (6,559) (77)%

Operating income (loss) $ 115,605 $ 78,481 47% $ (181,002) $ (5,941) *

Operating margin 2.3 % 1.7 % (2.3) % (0.1) %

2 unchanged sentences

* Percentages are not meaningful.

** See “—Non-GAAP Measure” above for the definition of AOI margin.

Concerts revenue increased $598.2 million during the three months ended March 31, 2024 as compared to the same period of the prior year, primarily due to increased shows and fan growth across the United States and international markets.

In particular, higher arena shows and fan count contributed to the increase in revenue.

Concerts had incremental revenue of $59.2 million during the three months ended March 31, 2024 from acquisitions and new venues.

Concerts revenue increased $353.7 million during the three months ended June 30, 2024 as compared to the same period of the prior year primarily due to increased shows and fan growth across the United States.

In particular, higher arena and amphitheater shows and fan count contributed to the increase in revenue.

Concerts had incremental revenue of $90.4 million during the three months ended June 30, 2024 from acquisitions and new venues.

Operating results

Concerts AOI increased $2.2 million for the three months ended March 31, 2024 as compared to the same period of the prior year primarily driven by an increase in revenue discussed above partially offset by higher direct operating expenses to support increased shows and fan growth at events and higher selling, general and administrative expenses related to additional headcount and compensation expenses.

The increase in operating losses of $212.2 million and remaining change in operating loss outside of AOI of $214.4 million is primarily associated with Astroworld estimated loss contingencies of $185.9 million during the current year and higher depreciation and amortization of $19.8 million for additional capital expenditures incurred to support the increased operations.

Concerts AOI increased $102.6 million and operating income increased $37.1 million for the three months ended June 30, 2024 as compared to the same period of the prior year.

The increase in AOI was primarily driven by increases in revenue discussed above partially offset by higher direct operating expenses to support increased shows and fan growth at events and higher selling, general and administrative expenses related to additional headcount and compensation expenses.

The remaining change in operating income outside of AOI of $65.5 million is primarily associated with Astroworld estimated loss contingencies of $94.0 million and higher depreciation and amortization of $19.7 million related to capital expenditures incurred to support the increased operations partially offset by lower acquisition expense of $54.4 million for costs incurred related to contingent considerations changes.

Concerts revenue increased $951.9 million during the six months ended June 30, 2024 as compared to the same period of the prior year primarily due to increased shows and fan growth across the United States.

In particular, higher arena and amphitheater shows and fan count contributed to the increase in revenue.

Concerts had incremental revenue of $149.6 million during the six months ended June 30, 2024 from acquisitions and new venues.

Operating results

Concerts AOI increased $104.9 million during the six months ended June 30, 2024 as compared to the same period of the prior year primarily driven by an increase in revenues from the number of shows discussed above partially offset by increased direct operating expenses to support increased shows and fan growth at events and higher selling, general and administrative expenses related to additional headcount and compensation expenses.

The remaining change in operating income outside of AOI of $279.9 million is primarily associated with Astroworld estimated loss contingencies of $279.9 million and higher depreciation and amortization of $39.6 million related to capital expenditures incurred to support the increased operations partially offset by lower acquisition expense of $50.1 million related to contingent considerations changes.

Our Ticketing segment operating results were, and discussions of significant variances are, as follows:

Three Months Ended

(in thousands)

Change Six Months Ended

2024 2023 2024 2023

(in thousands) (in thousands)

Revenue $ 730,677 $ 709,342 3% $ 1,453,855 $ 1,387,083 5%

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Depreciation and amortization 24,409 27,623 (12)% 47,923 52,707 (9)%

Loss on disposal of operating assets 44 374 (88)%

Loss (gain) on disposal of operating assets 2 (340) * 46 34 35%

Operating income $ 240,802 $ 238,579 1% $ 471,333 $ 459,510 3%

3 unchanged sentences

* Percentages are not meaningful.

** See “—Non-GAAP Measure” above for the definition of AOI margin.

Ticketing revenue increased $45.4 million during the three months ended March 31, 2024 as compared to the same period of the prior year.

This increase is primarily due to higher sales volumes in international markets driven by more events on sale due to more fan demand in 2024 as compared to 2023.

Ticketing revenue increased $21.3 million, or 3%, during the three months ended June 30, 2024 as compared to the same period of the prior year due to higher arena and amphitheater sales which was partially offset by a reduction in stadium activity.

Operating results

Ticketing AOI increased by $13.1 million and operating income increased $9.6 million during the three months ended March 31, 2024 as compared to the same period of the prior year.

These increases was primarily driven by increased ticketing activity discussed above.

These increases were partially offset by higher direct operating expenses to support the increased operations and enterprise growth.

The increase in revenue discussed above were partially offset by higher direct operating expenses to support the increased operations and enterprise growth resulting in a decrease in AOI of $0.2 million and operating income increase of $2.2 million during the three months ended June 30, 2024 as compared to the same period of the prior year.

Ticketing revenue increased $66.8 million during the six months ended June 30, 2024 as compared to the same period of the prior year.

This increase is primarily due to higher sales volumes in international markets driven by more events on sale in 2024 as compared to 2023.

Operating results

Ticketing AOI increased $12.9 million and operating income increased $11.8 million during the six months ended June 30, 2024 as compared to the same period of the prior year primarily driven by increased ticketing activity discussed above.

These increases were partially offset by higher direct operating expenses to support the increased operations and enterprise growth as well as higher selling, general and administrative expenses attributable to increased compensation expenses from increased headcount as compared to the prior year.

Sponsorship & Advertising

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Three Months Ended

(in thousands)

Change Six Months Ended

2024 2023 2024 2023

(in thousands) (in thousands)

Revenue $ 312,234 $ 302,859 3% $ 523,511 $ 472,977 11%

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Depreciation and amortization 17,342 26,521 (35)% 33,082 42,763 (23)%

Loss on sale of operating assets 17 — 100%

Loss (Gain) on sale of operating assets (1) — * 16 — *

Operating income $ 203,022 $ 174,260 17% $ 314,713 $ 251,397 25%

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* Percentages are not meaningful.

** See “—Non-GAAP Measure” above for the definition of AOI margin.

Sponsorship & Advertising revenue increased $41.2 million during the three months ended March 31, 2024 as compared to the same period of the prior year primarily driven by increased sponsorship activity from our festivals in Latin America.

Sponsorship & Advertising revenue increased $9.4 million during the three months ended June 30, 2024 as compared to the same period of the prior year primarily driven by increased sponsorship activity from our United States and international festivals.

Operating results

Sponsorship & Advertising AOI increased $34.4 million and operating income increased $34.6 million for the three months ended March 31, 2024 as compared to the same period of the prior year.

These increases were primarily due to increased revenues from higher sponsorship activity discussed above.

The increases were partially offset by higher direct operating expenses due to additional fulfillment costs to support the growth in sponsorship activity.

Sponsorship & Advertising AOI increased $19.5 million and operating income increased $28.8 million for the three months ended June 30, 2024 as compared to the same period of the prior year.

These increases were primarily due to increased revenues from sponsorship activity discussed above and lower direct operating expenses due to reduced fulfillment costs.

Sponsorship & Advertising revenue increased $50.5 million during the six months ended June 30, 2024 as compared to the same period of the prior year primarily driven by increased sponsorship activity from our international festivals

Operating results

Sponsorship & Advertising AOI increased $53.9 million and operating income increased $63.3 million during the six months ended June 30, 2024 as compared to the same period of the prior year.

These increases were primarily due to higher sponsorship activity revenues discussed above.

Liquidity and Capital Resources

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We may from time to time engage in open market purchases of our outstanding debt securities or redeem or otherwise repay such debt.

Our balance sheet reflects cash and cash equivalents of $6.5 billion at March 31, 2024 and $6.2 billion at December 31, 2023.

Included in the March 31, 2024 and December 31, 2023 cash and cash equivalents balances are $1.4 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, which we refer to as client cash.

Our balance sheet reflects cash and cash equivalents of $6.4 billion at June 30, 2024 and $6.2 billion at December 31, 2023.

Included in the June 30, 2024 and December 31, 2023 cash and cash equivalents balances are $1.3 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, which we refer to as client cash.

We generally do not utilize client cash for our own financing or investing activities as the amounts are payable to clients on a regular basis.

Our foreign subsidiaries held approximately $3.1 billion in cash and cash equivalents, excluding client cash, at March 31, 2024.

Our foreign subsidiaries held approximately $3.1 billion in cash and cash equivalents, excluding client cash, at June 30, 2024.

We generally do not repatriate these funds, but if we did, we would need to accrue and pay United States state income taxes as well as any applicable foreign withholding or transaction taxes on future repatriations.

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If the original maturity of these borrowings is 90 days or less, we present the borrowings and subsequent repayments on a net basis in the statement of cash flows to better represent our financing activities.

Our balance sheet reflects total net debt of $6.2 billion and $6.6 billion, respectively, at March 31, 2024 and December 31, 2023.

Our weighted-average cost of debt, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.6% at March 31, 2024 with approximately 93% of our debt at a fixed rate.

Our weighted-average cost of debt for short-term borrowings outstanding at March 31, 2024, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.1%.

Our balance sheet reflects total net debt of $6.2 billion and $6.6 billion, respectively, at June 30, 2024 and December 31, 2023.

Our weighted-average cost of debt, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.6% at June 30, 2024, with approximately 93% of our debt at fixed rates.

Our weighted-average cost of debt for short-term borrowings outstanding at June 30, 2024, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.1%.

Our cash and cash equivalents are held in accounts managed by third-party financial institutions and consist of cash in our operating accounts and invested cash.

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We are required to pay a commitment fee of 0.35% per year on the undrawn portion available under the revolving credit facility and variable fees on outstanding letters of credit.

Based on our outstanding letters of credit of $31.5 million, $1.27 billion was available for future borrowings from our revolving credit facility as of March 31, 2024.

Based on our outstanding letters of credit of $21.9 million, $1.28 billion was available for future borrowings from our revolving credit facility as of June 30, 2024.

The revolving credit facility matures on November 16, 2028, provided, that if (x) any of the term loan B, our 6.5% Senior Secured Notes due 2027, or our 4.75% Senior Notes due 2027 remain outstanding on the date that is ninety-one days prior to the stated maturity thereof in an aggregate principal amount in excess of $500 million and (y) our consolidated free cash on such date is less than the sum of such outstanding principal amount plus $500 million, then the maturity date of the amended senior secured credit facility will instead be such date.

During the three months ended March 31, 2024, we repaid $370 million of principal related to our revolving credit facility.

During the six months ended June 30, 2024, we repaid $370 million of principal related to our revolving credit facility.

No material gain or loss was recorded as a result of this repayment.

Debt Covenants

As of March 31, 2024, we believe we were in compliance with all of our debt covenants related to our senior secured credit facility and our corporate senior secured notes, senior notes and convertible senior notes.

As of June 30, 2024, we believe we were in compliance with all of our debt covenants related to our senior secured credit facility and our corporate senior secured notes, senior notes and convertible senior notes.

We expect to remain in compliance with all of these covenants throughout 2024.

During the three months ended March 31, 2024, we completed various acquisitions that resulted in cash acquired, net of cash paid of $10.0 million.

During the six months ended June 30, 2024, we completed various acquisitions that resulted in cash paid, net of cash acquired of $17.6 million.

Capital Expenditures

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We categorize capital outlays between revenue generating capital expenditures and maintenance capital expenditures.

Revenue generating capital expenditures generally relate to the construction of new venues to expand our global footprint, major renovations to existing buildings or buildings that are being added to our venue network, the development of new ticketing tools and technology enhancements.

Revenue generating capital expenditures are primarily focused on our global venue expansion strategy as we connect more artists to their global fan base and major renovations to buildings to enhance the fan experience and drive improvements in our hospitality efforts including onsite spending and premium experiences.

In addition, in Ticketing, we continue to develop new ticketing tools and technology enhancements.

Revenue generating capital expenditures can also include smaller projects whose purpose is to increase revenue and/or improve operating income.

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Our capital expenditures, including accruals for amounts incurred but not yet paid for, but net of expenditures funded by outside parties such as landlords and noncontrolling interest partners or expenditures funded by insurance proceeds, consisted of the following:

Three Months Ended

Six Months Ended

(in thousands)

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Total capital expenditures $ 308,337 $ 157,646

Revenue generating capital expenditures during the first three months of 2024 increased from the same period of the prior year primarily due to enhancements at our theaters and amphitheaters in the United States.

Revenue generating capital expenditures during the first six months of 2024 increased from the same period of the prior year primarily due to enhancements at our theaters and amphitheaters in the United States as well as a stadium in South America.

We expect capital expenditures to be approximately $650 million for the year ending December 31, 2024 with approximately 75% of the capital expenditures on revenue generating projects.

Three Months Ended

Six Months Ended

(in thousands)

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Operating Activities

Cash provided by operating activities decreased $167.0 million for the three months ended March 31, 2024 as compared to the same period of the prior year primarily due to higher mark-to-market gains on certain investments in nonconsolidated affiliates combined with an overall decrease in 2024 operating results as discussed within each segment’s operating results partially offset by changes in operating assets and liabilities from timing of events on sale, payments and receipts.

Cash provided by operating activities decreased $245.9 million for the six months ended June 30, 2024 as compared to the same period of the prior year primarily due to higher mark-to-market gains on certain investments in nonconsolidated affiliates, changes in the fair value of contingent consideration as well as changes in operating assets and liabilities from timing of events on sale, payments and receipts.

Investing Activities

Cash used in investing activities increased $110.9 million for the three months ended March 31, 2024 as compared to the prior year primarily due to lower cash acquired from acquisitions, net of cash paid.

Cash used in investing activities increased $135.2 million for the six months ended June 30, 2024 as compared to the prior year primarily due to higher purchases of property, plant and equipment in 2024 for revenue generating capital expenditures.

See “—Uses of Cash - Acquisitions and Capital Expenditures” above for further discussion.

Financing Activities

Cash used in financing activities was $478.4 million for the three months ended March 31, 2024 primarily due to the principal repayment of our revolving credit facility as compared to cash provided by financing activities of $225.7 million for the same period of the prior year primarily due to proceeds in 2023 from the issuance of our 3.125% convertible senior notes partially offset by the repurchase of our 2.5% convertible senior notes and capped call transactions in 2023.

Cash used in financing activities was $643.0 million for the six months ended June 30, 2024 primarily due to the principal repayment of our revolving credit facility as compared to cash provided by financing activities of $73.5 million for the same period of the prior year primarily due to proceeds in 2023 from the issuance of our 3.125% convertible senior notes partially offset by the repurchase of our 2.5% convertible senior notes.

See “—Sources of Cash” above for further discussion.

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As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we have operations.

Our foreign operations reported operating income of $77.3 million for the three months ended March 31, 2024.

We estimate that a 10% change in the value of the United States dollar relative to foreign currencies would change our operating income for the three months ended March 31, 2024 by $7.7 million.

As of March 31, 2024, our most significant foreign exchange exposure included the Euro, British Pound, Australian Dollar, Canadian Dollar and Mexican Peso.

We operate in certain countries that are hyper-inflationary, for example Argentina, however the impact of these currencies did not have a material impact on our statement of operations for the three and six months ended June 30, 2024 and 2023.

Our foreign operations reported an operating income of $306.3 million for the six months ended June 30, 2024.

We estimate that a 10% change in the value of the United States dollar relative to foreign currencies would change our operating income for the six months ended June 30, 2024 by $30.6 million.

As of June 30, 2024, our most significant foreign exchange exposure included the Euro, British Pound, Australian Dollar, Canadian Dollar and Mexican Peso.

This analysis does not consider the implication such currency fluctuations could have on the overall economic conditions of the United States or other foreign countries in which we operate or on the results of operations of our foreign entities.

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We also may enter into forward currency contracts to minimize the risks and/or costs associated with changes in foreign currency rates on forecasted operating income.

At March 31, 2024, we had forward currency contracts outstanding with an aggregate notional amount of $267.8 million.

At June 30, 2024, we had forward currency contracts outstanding with an aggregate notional amount of $242.6 million.

Interest Rate Risk

Our market risk is also affected by changes in interest rates.

We had $6.3 billion of total debt, excluding unamortized debt discounts and issuance costs, outstanding as of March 31, 2024.

Of the total amount, we had $5.8 billion of fixed-rate debt and $0.5 billion of floating-rate debt.

Based on the amount of our floating-rate debt as of March 31, 2024, each 25-basis point increase or decrease in interest rates would increase or decrease our annual interest expense and cash outlay by approximately $1.2 million.

This potential increase or decrease is based on the simplified assumption that the level of floating-rate debt remains constant with an immediate across-the-board increase or decrease as of March 31, 2024 with no subsequent change in rates for the remainder of the period.

We had $6.3 billion of total debt, excluding unamortized debt discounts and issuance costs, outstanding as of June 30, 2024.

Of the total amount, we had $5.8 billion of fixed-rate debt and $462.0 million of floating-rate debt.

Based on the amount of our floating-rate debt as of June 30, 2024, each 25-basis point increase or decrease in interest rates would increase or decrease our annual interest expense and cash outlay by approximately $1.2 million.

This potential increase or decrease is based on the simplified assumption that the level of floating-rate debt remains constant with an immediate across-the-board increase or decrease as of June 30, 2024 with no subsequent change in rates for the remainder of the period.

In January 2020, we entered into an interest rate swap agreement that is designated as a cash flow hedge for accounting purposes to effectively convert a portion of our floating-rate debt to a fixed-rate basis.

The agreement was amended in February 2023 along with the transition from LIBOR to SOFR.

The agreement was amended in February 2023 for the transition from LIBOR to SOFR.

The swap agreement expires in October 2026, has a notional amount of $500.0 million and ensures that a portion of our floating-rate debt does not exceed 3.445%.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024.

There have been no changes to our critical accounting policies during the three months ended March 31, 2024.

There have been no changes to our critical accounting policies during the six months ended June 30, 2024.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis