| SEGMENT DATA |
SEGMENT DATA
The Company’s reportable segments are Concerts, Sponsorship & Advertising and Ticketing. Prior to 2017, the Company reported an Artist Nation segment, which is now included in its Concerts segment based on the Company’s belief that the strategy behind artist management is to provide a full range of services related to concert promotion and to expand the Concerts line of business. In connection with this, there has been a change in the way the chief operating decision maker, as defined in the FASB guidance, makes decisions around allocations of resources and management responsibilities for this business.
The Concerts segment involves the promotion of live music events globally in the Company’s owned or operated venues and in rented third-party venues, the production of music festivals, the operation and management of music venues, the creation of associated content and the provision of management and other services to artists. The Sponsorship & Advertising segment manages the development of strategic sponsorship programs in addition to the sale of international, national and local sponsorships and the placement of advertising such as signage, promotional programs, rich media offerings, including advertising associated with live streaming and music-related original content, and ads across the Company’s distribution network of venues, events and websites. The Ticketing segment involves the management of the Company’s global ticketing operations, including providing ticketing software and services to clients, ticket resale services and online access for customers relating to ticket and event information, and is responsible for the Company’s primary ticketing website, www.ticketmaster.com.
Revenue and expenses earned and charged between segments are eliminated in consolidation. The Company’s 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 or replacements funded by insurance proceeds.
The Company manages its working capital on a consolidated basis. Accordingly, segment assets are not reported to, or used by, the Company’s management to allocate resources to or assess performance of the segments, and therefore, total segment assets have not been presented.
The following table presents the results of operations for the Company’s reportable segments for the three and nine months ended September 30, 2017 and 2016:
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Concerts |
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Sponsorship
& Advertising |
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Ticketing |
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Other |
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Corporate |
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Eliminations |
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Consolidated |
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(in thousands) |
Three Months Ended September 30, 2017 |
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Revenue |
$ |
2,939,387 |
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$ |
157,981 |
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$ |
532,285 |
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$ |
6,545 |
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$ |
— |
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$ |
(76,780 |
) |
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$ |
3,559,418 |
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Direct operating expenses |
2,497,234 |
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|
23,371 |
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|
283,236 |
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|
4,477 |
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— |
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(75,392 |
) |
|
2,732,926 |
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Selling, general and administrative expenses |
305,494 |
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|
21,320 |
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|
144,622 |
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|
4,428 |
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— |
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— |
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|
475,864 |
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Depreciation and amortization |
52,344 |
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|
6,601 |
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|
50,318 |
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|
115 |
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|
1,362 |
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(1,388 |
) |
|
109,352 |
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Loss (gain) on disposal of operating assets |
(21 |
) |
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— |
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58 |
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— |
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— |
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— |
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37 |
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Corporate expenses |
— |
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— |
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— |
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— |
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39,892 |
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— |
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|
39,892 |
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Operating income (loss) |
$ |
84,336 |
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$ |
106,689 |
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$ |
54,051 |
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$ |
(2,475 |
) |
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$ |
(41,254 |
) |
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$ |
— |
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$ |
201,347 |
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Intersegment revenue |
$ |
73,494 |
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$ |
— |
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$ |
3,286 |
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$ |
— |
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$ |
— |
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$ |
(76,780 |
) |
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$ |
— |
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Three Months Ended September 30, 2016 |
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Revenue |
$ |
2,644,151 |
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$ |
136,087 |
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$ |
456,443 |
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$ |
2,138 |
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$ |
— |
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$ |
(68,403 |
) |
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$ |
3,170,416 |
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Direct operating expenses |
2,247,976 |
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|
15,510 |
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|
231,979 |
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|
149 |
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— |
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(67,611 |
) |
|
2,428,003 |
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Selling, general and administrative expenses |
265,638 |
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|
20,667 |
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124,007 |
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|
4,100 |
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— |
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— |
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|
414,412 |
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Depreciation and amortization |
52,188 |
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|
4,448 |
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|
47,113 |
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|
1,153 |
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|
752 |
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(792 |
) |
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104,862 |
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Loss (gain) on disposal of operating assets |
241 |
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— |
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13 |
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— |
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(1 |
) |
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— |
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253 |
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Corporate expenses |
— |
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— |
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— |
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— |
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31,600 |
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— |
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|
31,600 |
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Operating income (loss) |
$ |
78,108 |
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$ |
95,462 |
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$ |
53,331 |
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$ |
(3,264 |
) |
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$ |
(32,351 |
) |
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$ |
— |
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$ |
191,286 |
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Intersegment revenue |
$ |
64,676 |
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$ |
— |
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$ |
3,727 |
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$ |
— |
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$ |
— |
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$ |
(68,403 |
) |
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$ |
— |
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Nine Months Ended September 30, 2017 |
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Revenue |
$ |
6,052,515 |
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$ |
346,532 |
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$ |
1,510,574 |
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$ |
13,259 |
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$ |
— |
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$ |
(131,588 |
) |
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$ |
7,791,292 |
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Direct operating expenses |
5,057,567 |
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60,516 |
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805,964 |
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5,759 |
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— |
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(128,506 |
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5,801,300 |
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Selling, general and administrative expenses |
804,562 |
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62,989 |
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411,336 |
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14,670 |
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— |
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— |
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1,293,557 |
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Concerts |
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Sponsorship
& Advertising |
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Ticketing |
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Other |
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Corporate |
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Eliminations |
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Consolidated |
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(in thousands) |
Depreciation and amortization |
144,917 |
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|
19,512 |
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140,881 |
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|
327 |
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|
3,262 |
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(3,082 |
) |
|
305,817 |
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Loss (gain) on disposal of operating assets |
(609 |
) |
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— |
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65 |
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— |
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37 |
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— |
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(507 |
) |
Corporate expenses |
— |
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— |
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— |
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— |
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97,711 |
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— |
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|
97,711 |
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Operating income (loss) |
$ |
46,078 |
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$ |
203,515 |
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$ |
152,328 |
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$ |
(7,497 |
) |
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$ |
(101,010 |
) |
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$ |
— |
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$ |
293,414 |
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Intersegment revenue |
$ |
122,455 |
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$ |
— |
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$ |
9,133 |
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$ |
— |
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$ |
— |
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$ |
(131,588 |
) |
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$ |
— |
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Capital expenditures |
$ |
83,612 |
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$ |
4,753 |
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$ |
69,667 |
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$ |
66 |
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$ |
26,195 |
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$ |
— |
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$ |
184,293 |
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Nine Months Ended September 30, 2016 |
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Revenue |
$ |
5,080,877 |
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$ |
288,923 |
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$ |
1,305,577 |
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$ |
4,485 |
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$ |
— |
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$ |
(122,472 |
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$ |
6,557,390 |
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Direct operating expenses |
4,219,599 |
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|
44,711 |
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|
673,990 |
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|
149 |
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— |
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(120,555 |
) |
|
4,817,894 |
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Selling, general and administrative expenses |
701,093 |
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|
50,540 |
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|
363,336 |
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|
11,483 |
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— |
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— |
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|
1,126,452 |
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Depreciation and amortization |
146,013 |
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|
13,777 |
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|
132,789 |
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|
2,053 |
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|
2,526 |
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(1,917 |
) |
|
295,241 |
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Loss (gain) on disposal of operating assets |
(162 |
) |
|
— |
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|
44 |
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|
— |
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|
117 |
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|
— |
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(1 |
) |
Corporate expenses |
— |
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— |
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— |
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— |
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|
85,649 |
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— |
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|
85,649 |
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Operating income (loss) |
$ |
14,334 |
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$ |
179,895 |
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$ |
135,418 |
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$ |
(9,200 |
) |
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$ |
(88,292 |
) |
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$ |
— |
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$ |
232,155 |
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Intersegment revenue |
$ |
115,762 |
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$ |
— |
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$ |
6,710 |
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$ |
— |
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$ |
— |
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$ |
(122,472 |
) |
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$ |
— |
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Capital expenditures |
$ |
51,353 |
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$ |
1,318 |
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$ |
64,513 |
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$ |
777 |
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$ |
5,454 |
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$ |
— |
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$ |
123,415 |
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