Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS AND REVENUE RECOGNITION

v3.23.1
SEGMENTS AND REVENUE RECOGNITION
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
SEGMENTS AND REVENUE RECOGNITION
For the three months ended March 31, 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 months ended March 31, 2023 and 2022:
Concerts Ticketing Sponsorship
& Advertising		 Other & Eliminations Corporate Consolidated
(in thousands)
Three Months Ended March 31, 2023
Revenue $ 2,281,212 $ 677,741 $ 170,118 $ (1,681) $ —  $ 3,127,390 
% of Consolidated Revenue 72.9% 21.7% 5.4% —%
Intersegment revenue $ 898 $ 783 $ — $ (1,681) $ —  $ — 
AOI $ 832 $ 271,051 $ 95,531 $ (7,939) $ (39,765) $ 319,710 
Three Months Ended March 31, 2022
Revenue $ 1,207,825 $ 480,399 $ 115,689 $ (1,105) $ —  $ 1,802,808 
% of Consolidated Revenue 67.0% 26.6% 6.4% —%
Intersegment revenue $ 652 $ 1,266 $ — $ (1,918) $ —  $ — 
AOI $ (49,166) $ 206,220 $ 69,700 $ (4,380) $ (13,335) $ 209,039 
.
The following table sets forth the reconciliation of consolidated AOI to operating income for the three months ended March 31, 2023 and 2022:
Three Months Ended March 31,
2023 2022
(in thousands)
AOI $ 319,710  $ 209,039 
Acquisition expenses 13,311  12,077 
Amortization of non-recoupable ticketing contract advances 20,363  18,527 
Depreciation and amortization 115,185  100,469 
Loss on disposal of operating assets 504  1,665 
Stock-based compensation expense 27,571  49,241 
Operating income $ 142,776  $ 27,060 
Contract Advances
At March 31, 2023 and December 31, 2022, we had ticketing contract advances of $87.8 million and $106.5 million, respectively, recorded in prepaid expenses and $106.2 million and $105.0 million, respectively, recorded in long-term advances on the consolidated balance sheets. We amortized $20.4 million and $18.5 million for the three months ended March 31, 2023 and 2022, respectively, related to non-recoupable ticketing contract advances.
Sponsorship Agreements
At March 31, 2023, we had contracted sponsorship agreements with terms greater than one year that had approximately $1.5 billion of revenue related to future benefits to be provided by us. We expect to recognize, based on current projections, approximately 30%, 26%, 19% and 25% 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 months ended March 31, 2023 and 2022:
Three Months Ended
March 31,
2023 2022
(in thousands)
Concerts $ 681,380  $ 278,546 
Ticketing 34,600  23,043 
Sponsorship & Advertising 50,680  34,239 
$ 766,660  $ 335,828