01—Abstract
Summary
Summary of the 10-K filed February 27, 2020. Cited figures are marked; the original filing is the authoritative source.
Live Nation Entertainment, Inc. reported 2019 revenue of $11.55 billiona, up from $10.79 billion in 2018, with operating income of $324.8 million versus $272.5 million a year earlier.
Net income attributable to common stockholders of Live Nation was $69.9 millionb, compared with $60.2 million in 2018. Growth was led by the Concerts segment, which generated $9.43 billion of revenue, and the filing states that Concerts attendance reached nearly 98 million fans, a record. Ticketing revenue was $1.55 billion and Sponsorship & Advertising revenue was $590.3 million, with segment operating income of $232.0 million and $330.3 million respectively.
Consolidated AOI, a non-GAAP measure, was $942.5 millionc in 2019 versus $829.1 million in 2018. The balance sheet and cash flow profile reflect substantial leverage. Total debt principal was $3.40 billion at December 31, 2019, against cash and cash equivalents of $2.47 billion, which includes $837.7 million of client cash.
Operating cash flow fell to $469.8 milliond from $941.6 million, and capital expenditures were $315.6 million. In October 2019 the company issued $950 million of 4.75% senior notes due 2027 and amended its senior secured credit facility. In February 2020 it issued $400 million of 2.0% convertible senior notes due 2025, and it has agreed to a proposed acquisition of a 51% interest in OCESA Entretenimiento, expected to close in the first half of 2020.
The filing also highlights ongoing regulatory and legal exposure. The Final Judgment with the Department of Justice was extended by five and a half years under an amended agreement reached in December 2019, and the company faces consumer class actions relating to secondary ticket sales that it says it does not believe have merit.
Management reports that it does not believe a loss is probable in those matters. The filing notes that the company has no plans to pay dividends and that it repurchased no shares under a publicly announced program in 2019.
02—Key points
Key Highlights
- Revenue rose to $11.55 billion in 2019 from $10.79 billion in 2018; the filing attributes the increase largely to the Concerts segment.
- Operating income increased to $324.8 million from $272.5 million, while net income attributable to common stockholders of Live Nation was $69.9 million versus $60.2 million.
- Concerts generated $9.43 billion of revenue and nearly 98 million fans attended its events, which the filing describes as a record; Ticketing sold 220 million fee-bearing tickets.
- Operating cash flow declined to $469.8 million from $941.6 million, mainly due to lower accounts payable and accrued expenses and a smaller increase in deferred revenue.
- Total debt principal was $3.40 billion at year-end 2019, including the new $950 million 4.75% senior notes due 2027 and the $400 million 2.0% convertible senior notes due 2025 issued in February 2020.
- The company agreed in December 2019 to extend and clarify its DOJ Final Judgment for an additional five and a half years, with an automatic $1,000,000 penalty for each violation.
- The filing discloses an agreement to acquire a 51% interest in OCESA Entretenimiento, anticipated to close in the first half of 2020.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 27, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $11.55B$10.79B | +7.0% |
| SG&A Expenses | $2.15B$2.00B | +7.4% |
| Operating Income | $324.84M$272.54M | +19.2% |
| Interest Expense | $157.52M$140.98M | +11.7% |
| Net Income | $69.89M$60.25M | +16.0% |
| EPS (Basic) | $-0.02$-0.09 | +77.8% |
| Shares Outstanding (Basic) | 210.08M207.44M | +1.3% |
05—Questions
Frequently Asked Questions
How did Live Nation perform financially in 2019?
Revenue reached $11.55 billion, up from $10.79 billion in 2018. Operating income was $324.8 million compared with $272.5 million, and net income attributable to common stockholders of Live Nation was $69.9 million compared with $60.2 million. The filing states that the increase was largely driven by the Concerts segment.
What is the company's debt position at the end of 2019?
Total debt principal was $3.40 billion as of December 31, 2019, compared with $2.91 billion a year earlier. The company had $416.5 million available under the revolving credit facility after outstanding letters of credit of $83.5 million, and its weighted-average cost of debt was 4.2%.
What were the main financing actions in 2019 and early 2020?
In October 2019 the company issued $950 million of 4.75% senior notes due 2027, drew $950 million under a new term loan B, and used the proceeds to repay its existing term loans and the 5.375% senior notes due 2022. In February 2020 it issued $400 million of 2.0% convertible senior notes due 2025, with net proceeds of approximately $393.5 million.
What regulatory risks does the filing highlight?
The company is subject to an amended Final Judgment with the U.S. Department of Justice, extended by five and a half years, that restricts certain business practices and carries an automatic $1,000,000 penalty per violation. The filing also describes ticket resale restrictions under agreements with the FTC and several states, and consumer class actions relating to secondary ticket sales that management does not currently believe have merit.
Does the company pay dividends or repurchase shares?
No. The filing states that the company has not declared or paid any dividends from inception through December 31, 2019 and does not expect to pay cash dividends in the foreseeable future. It also states that it has no publicly announced share repurchase program; the shares repurchased in 2019 were surrendered by employees to satisfy tax withholding on restricted stock vesting.
06—Continue