Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS AND REVENUE RECOGNITION

v3.23.2
SEGMENTS AND REVENUE RECOGNITION
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
SEGMENTS AND REVENUE RECOGNITION
For the six months ended June 30, 2023 and 2022, our reportable segments are Concerts, Ticketing and Sponsorship & Advertising. We use AOI to evaluate the performance of our operating segments and define AOI as operating income (loss) before certain stock-based compensation expense, loss (gain) on disposal of operating assets, depreciation and amortization (including goodwill impairment), amortization of non-recoupable ticketing contract advances and acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation). AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results.
Revenue and expenses earned and charged between segments are eliminated in consolidation. Our capital expenditures below include accruals for amounts incurred but not yet paid for, but are not reduced by reimbursements received from outside parties such as landlords and noncontrolling interest partners or replacements funded by insurance proceeds.
We manage our working capital on a consolidated basis. Accordingly, segment assets are not reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets and related depreciation and amortization have not been presented.
The following table presents the results of operations for our reportable segments for the three and six months ended June 30, 2023 and 2022:
Concerts Ticketing Sponsorship
& Advertising		 Other & Eliminations Corporate Consolidated
(in thousands)
Three Months Ended June 30, 2023
Revenue $ 4,633,291 $ 709,342 $ 302,859 $ (14,769) $ —  $ 5,630,723 
% of Consolidated Revenue 82.3% 12.6% 5.4% (0.3)%
Intersegment revenue $ 3,300 $ 2,397 $ — $ (5,697) $ —  $ — 
AOI $ 168,058 $ 292,685 $ 203,139 $ (18,142) $ (56,043) $ 589,697 
Three Months Ended June 30, 2022
Revenue $ 3,597,761 $ 575,305 $ 263,786 $ (2,678) $ —  $ 4,434,174 
% of Consolidated Revenue 81.1% 13.0% 5.9% —%
Intersegment revenue $ 1,575 $ 1,646 $ — $ (3,221) $ —  $ — 
AOI $ 122,944 $ 230,759 $ 178,304 $ (2,027) $ (50,381) $ 479,599 
Six Months Ended June 30, 2023
Revenue $ 6,914,503 $ 1,387,083 $ 472,977 $ (16,450) $ —  $ 8,758,113 
% of Consolidated Revenue 78.9% 15.8% 5.4% (0.1)%
Intersegment revenue $ 4,198 $ 3,180 $ — $ (7,378) $ —  $ — 
AOI $ 168,890 $ 563,736 $ 298,670 $ (26,081) $ (95,808) $ 909,407 
Six Months Ended June 30, 2022
Revenue $ 4,805,586 $ 1,055,704 $ 379,475 $ (3,783) $ —  $ 6,236,982 
% of Consolidated Revenue 77.0% 16.9% 6.1% —%
Intersegment revenue $ 2,227 $ 2,912 $ — $ (5,139) $ —  $ — 
AOI $ 73,778 $ 436,979 $ 248,004 $ (6,407) $ (63,716) $ 688,638 
The following table sets forth the reconciliation of consolidated AOI to operating income for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
(in thousands)
AOI 589,697  $ 479,599  $ 909,407  $ 688,638 
Acquisition expenses 24,829  9,543  38,140  21,620 
Amortization of non-recoupable ticketing contract advances 21,234  21,865  41,597  40,392 
Depreciation and amortization 136,514  115,927  251,699  216,396 
Loss (gain) on disposal of operating assets (7,013) 1,065  (6,509) 2,730 
Stock-based compensation expense 27,762  12,500  55,333  61,741 
Operating income $ 386,371  $ 318,699  $ 529,147  $ 345,759 

Contract Advances
At June 30, 2023 and December 31, 2022, we had ticketing contract advances of $97.5 million and $106.5 million, respectively, recorded in prepaid expenses and $128.1 million and $105.0 million, respectively, recorded in long-term advances on the consolidated balance sheets. We amortized $21.2 million and $21.9 million for the three months ended June 30, 2023 and 2022, respectively, and $41.6 million and $40.4 million for the six months ended June 30, 2023 and 2022, respectively, related to non-recoupable ticketing contract advances.
Sponsorship Agreements
At June 30, 2023, we had contracted sponsorship agreements with terms greater than one year that had approximately $1.6 billion of revenue related to future benefits to be provided by us. We expect to recognize, based on current projections, approximately 21%, 30%, 22% and 27% of this revenue in the remainder of 2023, 2024, 2025 and thereafter, respectively.
Deferred Revenue
The majority of our deferred revenue is typically classified as current and is shown as a separate line item on the consolidated balance sheets. Deferred revenue that is not expected to be recognized within the next twelve months is classified as long-term and reflected in other long-term liabilities on the consolidated balance sheets. We had current deferred revenue of $3.1 billion and $2.8 billion at December 31, 2022 and 2021, respectively.
The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three and six months ended June 30, 2023 and 2022:
Three Months Ended
June 30,		 Six Months Ended
June 30,
2023 2022 2023 2022
(in thousands)
Concerts $ 1,133,662  $ 1,031,758  $ 1,815,042  $ 1,310,304 
Ticketing 61,641  56,110  96,241  79,153 
Sponsorship & Advertising 57,247  57,059  107,927  91,298 
$ 1,252,550  $ 1,144,927  $ 2,019,210  $ 1,480,755