Live Nation Entertainment Inc

NYSE:LYV

Earnings Call Transcript 2019-Q4

[Operator]

Good day, everyone, and – my name is Pillari, and I will be your conference facilitator for today. At this time, I would like to welcome everyone to Live Nation Entertainment’s Fourth Quarter and Full-Year 2019 Conference Call. Today’s conference is being recorded.

Before we begin, Live Nation has asked me to remind you that this afternoon’s call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company’s anticipated financial performance, business prospects, new developments and similar matters.

Please refer to Live Nation’s SEC filings, including the risk factors and cautionary statements included in the company’s most recent filings on Forms 10-K, 10-Q and 8-K for a description of risks and uncertainties that could impact the actual results.

Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided a full reconciliation to the most comparable GAAP measures in their earnings release. The release reconciliation and other financial or statistical information to be discussed on this call can be found under the Financial Information section on Live Nation’s website at investors.livenationentertainment.com.

It is now my pleasure to turn the conference over to Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment. Please go ahead, sir.

[Michael Rapino, President and Chief Executive Officer]

Good afternoon, and welcome to our fourth quarter and full-year 2019 conference call. In 2019, Live Nation delivered its ninth consecutive year of growth, with revenue up 7% and AOI up 14%.

Starting with the core of our business, our concerts fan count was up 5 million to 98 million globally, driving AOI growth in all of our divisions, concerts, sponsorship and ticketing, demonstrating the effectiveness of our flywheel business model.

In our Concerts segment, fans continue to find the live experience, from club shows to arenas to festivals, a top entertainment choice and the best way to celebrate their favorite artists and share the experience with other fans. In the U.S., over the past five years consumer spending on live entertainment has grown 7% annually, providing strong structural tailwinds to drive increased demand for concerts globally.

With these demand dynamics, in 2019, we delivered growth in concerts revenue of 8% and AOI of 7%. This growth was broad-based across our portfolio, with international fan count up 11%, while in North America, arenas, festivals, theaters & clubs contributed to our growth.

Globally, festivals, theaters & club attendance were up double digits, highlighting the strength of our global footprint and the value of a diversified portfolio of markets, genres and building types that have enabled our consistent growth over the past several years. And across all of the artists we work with, we invested well over $6 billion to promote 40,000 shows in 42 countries, with Live Nation by far the largest financial supporter of artists in music.

Average ticket prices for our amphitheater and arena shows are up double digits since 2017, while sales of dynamically-priced Platinum tickets are up 66% for the year across 3,000 shows, as artists want more of the best seats in the house sold at face value at the onsale.

Even with these increases, concerts remain a great deal for fans relative to other live experiences. Our average ticket for a concert at any one of our amphitheaters was $46 in 2019, relative to a $75 NBA game over $100 for an NFL game.

Once at the show, average per fan spending grew as well. At our amphitheaters, spending grew by $2.50 to over $29 per head, as we improved our product offering, reduced friction with shorter lines, and improved VIP hospitality offerings. The hospitality focus also grew on-site spending at our festivals, theaters & clubs, the result of a better experience for our fans across all our operated venues.

We added 38 new venues in 2019, including six new festivals and 18 new theaters & clubs. As we have gotten better at on-site hospitality over the past several years, this opens up more opportunity for us to operate more buildings, where we make more money per fan, which accelerates the on-site monetization part of our flywheel.

The strength of our business is continuing with concert tickets sold through mid-February for 2020 shows, up 10% to 38 million, and a pipeline of 4,700 confirmed arena, stadium and amphitheater shows, up 30% from the same time last year. All venue types have strong show count growth, led by North America stadium and arena concerts.

In our high-margin sponsorship business, we grew revenue by 17% and AOI by 16% in 2019. Venue sponsorship was a key growth driver in the year, up double digits globally, with broad growth across amphitheaters, festivals, theaters & clubs.

Festivals had a particularly strong year. With the addition of Rock in Rio to our portfolio of marquee festivals, sponsorship in this segment was up over 50%. Our top strategic sponsors have also been a key driver of our sponsorship segment, with 88 sponsors collectively spending approximately $400 million to reach our fans, and revenue from this group up 19% in the year.

In 2019, we broadened our brand partnership base by leveraging our Power of Live research, with particular success in the lifestyle space working with brands, including Revlon, Vans and Clinique, as we demonstrated the importance of their products to concertgoers.

All this reinforces the power of our platform of 98 million fans and the priority of brands to reach fans during the live experience. With over 70% of budgeted sponsorship net revenue for the year committed, and despite 2020 being an off year for Rock in Rio in Brazil, we are confident we will deliver continued growth in our sponsorship segment this year.

Ticketmaster further built its leadership position in ticketing in 2019, growing AOI by 11%. Most of our growth came through reduced customer acquisition costs across both primary and secondary ticketing and from secondary ticketing volume, notably the NFL and other sporting events.

Our international ticketing business drove our growth in fee-bearing tickets and GTV, led by our strong international concerts ticket sales. We now provide services in 31 countries, and in 2019, delivered 115 million tickets internationally, with tremendous opportunity for continued growth on a global basis, particularly in the 15 markets where we promote concerts and don’t yet have a substantial ticketing operation.

Ticketmaster’s recent entry into both the Taiwan and Singapore markets highlights this international expansion opportunity, leveraging our leading concerts position in these markets and now growing our ticketing presence to seven countries in Asia, as we continue to build out our flywheel across more of these markets.

In North America, our top priority in 2019 was deploying Presence, our secure ticketing digital product, which we see as key in differentiating Ticketmaster and providing venues, teams and artists with the information and tools to maximize their fan relationships. Presence was deployed in over 700 venues by the end of 2019, including over 90% of major sports and Live Nation buildings, operating 50,000 events for over 120 million fans, more than half of whom used digital tickets for entry.

We see our deployment in 2020 further accelerating, and we are planning to have Presence in over 1,300 venues by the end of the year, with over 200 million fans attending events at these buildings. At that point, we will cover 100% of major sports and Live Nation buildings, and 90% of all fans in North American Ticketmaster venues, making Ticketmaster by far the global leader in digital ticketing.

Artist-driven initiatives, such as ticketing Pearl Jam’s entire tour with SafeTix, enabling their strategy of getting tickets into the hands of their greatest fans, is one demonstration of how digital ticketing is serving content more effectively. At the same time, we continue to scale our global ticketing marketplace, with the fourth quarter being our second-highest fee-bearing GTV quarter ever, selling over 60 million fee-bearing tickets and delivering over $5 billion in fee-bearing GTV.

Ticketmaster continues to lead the ticketing industry, both operationally and in digital ticketing. Looking at 2020, I’m confident in Ticketmaster’s ability to extend that leadership position globally, as we add more customers, ticket more events and expand our digital ticketing platform.

In summary, 2019 was another strong year for Live Nation, building our global concerts business and driving growth in our high-margin venue, sponsorship and ticketing businesses.

Looking at 2020, our double-digit fan and show count growth so far this year against a backdrop of very high artist activity across all venue types and markets sets up our flywheel to deliver another year of strong global growth.

With this, I will turn the call over to Joe to take you through additional details.

[Joe Berchtold, President]

Thanks, Michael. Looking at our business segments, first, concerts. As Michael indicated, fan attendance grew 5% to 98 million fans, demonstrating the strength of our global portfolio and with this demand growth highlighting the strong fundamentals underlying our business.

Geographically, international had a strong year with growth in stadiums, festivals and theaters & clubs, driving 11% fan growth. Theaters & clubs globally led fan growth for the year with 20% growth to nearly 30 million fans. Festivals also had a strong year, with seven new festivals, including Rock in Rio helping deliver 13% fan growth globally.

Our fan attendance is up from 47 million in 2010, closing out for decade by more than doubling our fan base, the key milestone that demonstrates the consistent and resilient growth at the core of our flywheel, creating significant scale over time.

Looking specifically at the fourth quarter, while attendance and show count were up, our AOI was lower, heavily driven by an increase in advertising expense related to 2020 shows, an increased fixed expenses associated with continuing to build our flywheel and operate more venues. Without this higher than projected advertising expense from putting more 2020 shows on sale in 2019, concerts AOI for the year would have been up double digits.

Moving on to sponsorship. In 2019, we again delivered double-digit AOI growth, up 16% for the year. International drill over 70% of this growth, with the addition of Rock in Rio helping drive both international and festival sponsorship growth.

For the fourth quarter, revenue was up 25% and AOI was up 26%, with growth helped by the second weekend of Rock in Rio Brazil. Our pipeline for 2020 is in good shape, demonstrating the strength of our concerts, flywheel and driving all parts of the business, and we expect to continue growing our sponsorship AOI, despite not having Rock in Rio Brazil this year.

Finally, Ticketmaster. Global GTV was flat in the quarter, matching 2018’s record fourth quarter, while fee-bearing GTV was down 2%. North America fee-bearing GTV was flat for the quarter, while international was down 8%, reflecting the geographic shift in 2020 stadiums versus last year. This volume was up relative to our expectations for the quarter, reflecting both the timing shift and an even stronger 2020 pipeline of concerts than was previously projected.

For the fourth quarter, Ticketmaster AOI was up 23%, due to a 9% increase in secondary GTV, reduced customer acquisition costs and the benefit from competing against last year’s costs related to a third-party data bridge. These same factors then drove our margin improvement for the quarter.

Looking at 2020, we expect the strong concert slate will drive Ticketmaster’s GTV, including the strong Q1, when we will have most of our stadium and arena on sales. A few more points. The coronavirus has had a lot of press lately, so I wanted to give some context for us.

First, as it relates to China and Asia shows generally, show cancellations have been minimal, given our activity levels in China, with 17 shows totaling approximately 75,000 fans. Looking over the next three months, our Asia activity is limited with 70 shows and 200,000 fans in the region.

Second, as it relates to Italy, we have 30 shows booked over the next three months, with approximately 125,000 fans. Collectively, this accounts for less than one half of 1% of our 100 million-plus fans we expect to attend our shows this year.

More broadly, while we expect that there will be further areas of breakout over the next few months, one of our strengths is that we are highly diversified geographically. Thus far, we have seen no pullback in fan demand or ticket buying outside of this specifically affected areas and overall, our attendance is weighted towards the latter part of this year, with our 70% of our attendance expected from June through the end of the year.

Finally, on the OCESA acquisition, we continue to make progress working with the regulators in Mexico on their review. And at this point, we expect the acquisition to close sometime in the second quarter.

With that, I will turn the call over to Kathy to go through more on our financial results.

[Kathy Willard, Chief Financial Officer]

Thanks, Joe, and good afternoon, everyone. Our key highlights for the fourth quarter of 2019 are: revenue increased by 11% to $2.9 billion; AOI was $81 million, up 18%; as of December 31, our deferred revenue related to future shows was up 10% to $1.2 billion, compared to $1.1 billion last year; concerts was the primary driver of revenue growth, as it increased 12% for more fans and shows; sponsorship revenue was up 25%, as we benefited from the second weekend of Rock in Rio Brazil; and ticketing revenue grew 2% as a result of higher secondary ticket volume; AOI was up 18%, driven by growth in sponsorship due to the four days of Rock in Rio and improved resale volume and lower operating cost in ticketing; concerts AOI declined from higher advertising expense for 2020 shows, and increased headcount and rent, primarily related to additional venues.

As we’ve noted before, we recognized our show-related advertising for future shows at the end of the year, so the higher volume of on sales for 2020 shows increases our year and expenses.

Operating loss for the quarter was $83 million, compared to a loss of $90 million in the prior year as a result of the higher AOI. Net loss for the quarter was $160 million, compared to a net loss of $148 million in the prior year, driven mainly by higher interest, taxes and non-controlling interest expense.

For full-year 2019, revenue was $11.5 billion, a 7% increase over 2018. AOI was $943 million, up 14%, and free cash flow adjusted was $499 million, up 4% over last year, representing 53% of AOI due to the timing of distributions to NCI partners.

Revenue growth was primarily driven by concerts, which was up 8%, as we saw attendance growth across North America arenas, international stadiums and festivals and theaters & clubs globally. Sponsorship revenue was also strong with 17% growth, driven by Rock in Rio, high demand for our venue on-site sponsorship programs and growth from a number of our strategic sponsors and related spend.

All of our segments contributed to our AOI growth. Concerts AOI was up 7%, as we grow our fan base and number of shows across arenas, theaters & clubs and festivals, along with improved fan on-site spend at our amphitheaters, festivals and theaters & clubs. Sponsorship AOI grew by 16%. In ticketing, our largest AOI contributor grew 11%. from higher revenue and lower operating costs.

Operating income was $325 million, up 19% over last year, driven by the increase in AOI. Our net income for the full-year was $70 million, compared to $60 million in 2018, due to our improved operating results. Net loss per share was $0.02, after $75 million in accretion of redeemable non-controlling interests. For 2019, we saw a 2% FX impact on both revenue and AOI.

Turning to our balance sheet. As of December 31, we had total cash of $2.5 billion, including $838 million in ticketing client cash and $936 million in net concert event-related cash, leaving free cash of $697 million.

Net cash provided by operating activities was $470 million, compared to $942 million last year, due to the timing of payables and ticket sales versus the prior year. Free cash flow adjusted was $499 million, compared to $481 million last year.

Our total capital expenditures were $316 million, 52% of which was spent on revenue-generating items. Our total net debt as of December 2019, after our refinancing in October, was $3.3 billion, with a weighted average cost of 4.2%.

Our current expectations for 2020 include: in concerts, we expect most of the AOI growth to come in Q3, with some in Q2 and our seasonally quieter Q1, having a bit less activity than last year. In sponsorship, while we expect growth for the year, the Rock in Rio Brazil, biennial Festival will not occur in 2020.

In ticketing, we currently expect this strong concerts slate to drive growth in GTV with higher on-sale activity, particularly in Q1. It is too early in the year for us to predict FX impact for 2020. We will provide guidance in future calls as the year developed. All of our guidance is currently in a constant currency to 2019.

We expect our total capital expenditures to be approximately $375 million, with the increase largely driven by revenue-generating expenditures. And we currently expect accretion of non-controlling interests to be approximately $55 million for 2020, with about half done in the first quarter and the rest fairly evenly distributed across the remaining quarters.

Thank you for joining us today. Operator, we will now open the call for questions.

[Operator]

Thank you. [Operator Instructions] We’ll take our first question from Brandon Ross with LightShed Partners.

[Brandon Ross, LightShed Partners]

Hi guys, thanks for taking the question. Mike may as well address the elephant in the room right off the bat with corona. And you gave us some really good color on Italy and Asia. Thanks for that. But I think investors want to understand the potential downside risk if there are broader show cancellations, especially over the summer period.

To the extent that an individual show is canceled, can you help us understand what the financial impact would be? I know you guys buy many tours outright. I think, you pay artists, like $8 billion per year. Are you left holding the bag if shows are cancelled? And then if there are regions that are affected by corona, do you have the flexibility to reroute tours?

And finally, you gave really strong leading indicators for 2020, obviously, shaping up to be a big year without corona. If there is major corona impact, would you anticipate that activity pushing out to 2021? I think that covers most of it.

[Joe Berchtold, President]

Sure, Brandon, this is Joe. I’ll get started and Michael can jump in. I think the first thing just to put in the right context is your latter point, anything that is being talked about is generally being talked about just in terms of timing, it’s not being talked about not doing the shows, as we’ve long discussed, artists see the touring is the fundamental part of what they do and how they earn their living.

So there, we’re not talking any artists. They’re saying they don’t want to be touring. It’s all exactly where can I go when? So it’s just talking about timing. Absolutely, as we look at very specific hotspot, there is certainly flexibility to reroute as need be or to have them come back and hit that area later, as opposed to when was previously planned.

In general, we pay the artist when the show occurs. There’s generally force majeure clauses. If for some reason a show were to be canceled, we wouldn’t have to pay the artist. But, again, we think that that’s going to be pretty limited, where we don’t have some ability to either reroute or reschedule.

[Michael Rapino, President and Chief Executive Officer]

And Brandon, a little color on the cancel and the cost. So there will be no cost. We don’t pay an artist until they play. If an artist says, if we cancel a show next month in Milan, we don’t pay the artist. There’s no cost incurred. And when the artist replace that show, then we pay the artist.

So these ones are actually the easier ones to manage. I mean, the ones that you always have the more challenges when the festival gets canceled on the Saturday afternoon when 60,000 people are sitting there. That’s when you have a – some marketing and some sunk costs, where it may affect you.

When you have a month, two month, anytime you cancel in advance, there’s actually no cost incurred yet, the artist isn’t at the show, the people aren’t in the venue, you haven’t paid the cost. So this is – the easiest economic challenge for us is to reroute and reschedule a show no cost to us.

As Joe said, the good news is on a supply demand, the show is not going away, it’s just moving to a different quarter. The artist will tour whether they have to jump off this quarter and go in the fall, or 2021, we won’t net lose the business.

And the other demand part that we’re just really impressed with, because we always talk about the resilience of the concert fan is, as of last night, we had a sellout in Australia on a festival that went up. The business is real strong. The consumer still seems to be buying the tickets on a global basis.

So supply demand will be there. We’re going to take this cautiously as we watch the markets and we assume a hotspot will flare up and a show will be canceled here and there. But we’re confident, long-term, the show will happen. The revenue will flow and the fan will show up.

On a macro – on a micro 2020, as I think Joe mentioned, most of our business doesn’t start till the middle of June onwards. So the next few months, we’ll have some cancellations, I assume, here and there in some arenas and clubs, but the heart of our business happens this summer. And we’re optimistic we hope that it can be handled in the summer months bring us some relief and we’ll business as usual. But right now, we’re being cautious looking at all markets, doing the right thing for the artist. We’re playing along with the great demand of this industry.

[Brandon Ross, LightShed Partners]

Great. Thank you for the color.

[Operator]

Next, we’ll move to Ben Swinburne with Morgan Stanley

[Benjamin Swinburne, Morgan Stanley]

Hey, good afternoon. I wanted to ask if you could help us think about the leading indicators you gave in your press release and on the – your opening comments, particularly ticket sold up 10% for 2020, 30% growth in confirmed shows. I don’t think you gave specific guidance financially for 2020, which I understand. But just wondering if you could help put those two numbers into context, because they seem quite robust, even relative to the growth you just delivered in 2019?

And then, secondly, and apologize for asking more virus macro-related stuff, but I’m sure you understand why. On the sponsorship side, can you just help us remind us how much of that business is sort of, either annual multi-year relationships versus anything show specific? Just so we can think about if one or two sizable shows are postponed if we should see that impact sponsorship as well? Thank you.

[Michael Rapino, President and Chief Executive Officer]

I’ll do sponsorship and then I’ll – now sponsorship with most of our – we always talk in our reports about our annual global strategic partners. So most of our contracts are over one to three years, they’re longer-term. They’re not very – the ones that matter are over multiple events, most – mostly multiple markets.

So we don’t have the beautiful part of our business, which is dispersed over 30,000 shows is we don’t have one weekend, one show, one event, that’s the $20 million big event. It’s really dispersed across the globe, across different venues and genres, which is the parts that makes us a bit risk adverse.

So we see no sponsorship risk at all. If a show canceled, the sponsor would get the show later. We’ll make up for the show. Again, going back to our first point, as long as we’re going to deliver a net over the next two years, the same amount of shows, the growth, the tickets that we’ve kind of delivered for that sponsorship commitment, then, we’ll see no pullback at all in the long-term sponsor.

[Benjamin Swinburne, Morgan Stanley]

Thanks, Mike.

[Michael Rapino, President and Chief Executive Officer]

Yes. We’ll talk about the – yes, we’re headed for a record 2020. Business is strong, and Joe will give you – what he can on how will even model that.

[Joe Berchtold, President]

Sure, Ben. As you said, we haven’t tried to give you full-year guidance for a couple of reasons. We don’t generally try to do that in February, it’s a bit early. And secondly, with the uncertainty on the specific timing on the OCESA close, it makes it just harder to give you what the overall year looks like.

But we absolutely are taking a lot of confidence based on being so far up in terms of the 30% on the show count. The 10% up on the fans. I think both of those are exactly leading indicators. They’re not projections of where we’re going to end up. But I think, they’re strong indicators that we’ll have pretty good growth this year.

[Benjamin Swinburne, Morgan Stanley]

Thank you.

[Operator]

Next we’ll move on to Khoa Ngo with Jefferies.

[Khoa Ngo, Jefferies]

Hi. Good afternoon, all. Thanks for taking the question. On OCESA, is there anything that you can provide any specifics as to why it’s still being held up with the Mexican government?

And then just second question is on a more broader level, there was a big transaction that closed in mid-February with one of your competitors and the multiple seems pretty high. And so if we think about the embedded value in the enterprise, if we apply that multiple just for your Ticketing segment, it seems like you can get the concerts and sponsorship pretty – at a pretty attractive multiple. Can you just talk broadly of how you think about the value embedded in the broader enterprise? Thank you.

[Michael Rapino, President and Chief Executive Officer]

So let me take the first one on OCESA. I think, when we started this several months ago, one of the things that we thought was that, because OCESA just gone through some reviews by the same government entity that they were very familiar with the business and it would be a fairly quick process.

As it ended up, this transaction got put with a different team in a different department. So we had to start a little bit more at the basics in terms of the industry. So we weren’t able to shortcut it as much as we thought. There’s nothing that at this point based on most recent discussions to give us great concern, just taking a bit longer.

In terms of the transaction, look, our view is simply that we focus on building a great business at Ticketmaster and throughout all of our different pieces. It’s up to you guys in the market, specifically, value them. We’re building this for long-term value for our shareholders up and down the flywheel and we expect it will be successful in doing that.

[Khoa Ngo, Jefferies]

Thanks very much.

[Operator]

[Operator Instructions] We’ll move next to Doug Arthur with Huber Research.

[Douglas Arthur, Huber Research Partners]

Just going back to cover 2019 for a second. Joe, I’m wondering if you could – I mean, my concern would be on the festival business in Europe if there was any kind of wider spread beyond Italy, obviously? As you said, most of that is in the summer, so it’s a ways off.

But – and I think five years ago, the festival business in Europe is a big part of your package. I think, it’s less big today as a component, given the growth in other markets. But I’m wondering if you could just sort of size – sort of frame the size of that business for you, if there was some kind of slow down or less attendance or even the cancellations outright of some of these large festivals over on the continent?

[Joe Berchtold, President]

Yes. I think that our total festival business would be in that low double-digit portion of our total fan base. And I think our largest single festival would probably be roughly half of a percent of our fan base. So we’re across 100 and change festivals. It’s very diversified geographically, diversified time-wise over multiple continents.

So if there were to be a situation still, as we get into July and August, and you assume it’s located geographically. I would not expect that to be a broad impact in terms of our fan count.

[Douglas Arthur, Huber Research Partners]

Okay. And then just one little detail question on the quarter. I kind of asked this question before. But it looks like your event count in North America in the fourth quarter was very high year-over-year and relative to recent quarters. Is that just this continuation of massive growth in small clubs and theaters?

[Joe Berchtold, President]

Yes, theaters & clubs. That’s – I think we called out specifically that volume and the growth in my portion on the number of theaters & clubs in the attendance there. So that is what drove most of it in Q4.

[Douglas Arthur, Huber Research Partners]

And then, there’s no acquisitions in there, right, in North America?

[Michael Rapino, President and Chief Executive Officer]

Not a substance.

[Douglas Arthur, Huber Research Partners]

Maybe….

[Michael Rapino, President and Chief Executive Officer]

Maybe a club released in Philadelphia. Yes, not an acquisition of scale.

[Douglas Arthur, Huber Research Partners]

Okay. All right. Thank you.

[Operator]

And next, we’ll move on to Stephen Glagola with Cowen.

[Stephen Glagola, Cowen and Company]

Hey, good afternoon. As per the company’s Investor Day presentation in November, you guys highlighted a $60 million ticketing AOI opportunity from entering in new markets with a Live Nation promoter presence. These markets primarily consisted of Latin American/Asian countries, just want to ask in light of Ticketmaster’s recent expansion into Asia, in Taiwan and Singapore. Can you just discuss high level the economics of both the Latin America ticketing and Asia ticketing? How those markets may differ structurally from both the United States and Europe and any incremental challenges in those markets that you may be facing? Thanks.

[Michael Rapino, President and Chief Executive Officer]

You’re well prepared. We’re in – Asia is less than 0.01% or nothing of our business right now. So it’s not a strong business for us currently. I think I would have said on – in liberty that on a global basis, we have a lot of opportunity left international and we look at – we look all across the world from Latin America to South Africa to Asia.

We think all those markets in India and et cetera are going to be long-term great markets for us that are – where we have low market share and are starting to put some shows. So we – were happy we’ve got a flag in the ground in and Singapore and Taiwan, small little businesses helped to get more flags in the ground over time.

And we think in three to five years from now, we hope the Asian business is a big contributor to our overall business, as well as Latin America. But those are emerging markets still very new. Lots of upside, but not to date don’t actually contribute much to the bottom line.

[Stephen Glagola, Cowen and Company]

All right. Thank you.

[Operator]

That does conclude our question-and-answer session. At this time, I’ll turn the call back over to our speakers for any final or additional comments.

[Michael Rapino, President and Chief Executive Officer]

Thank you.

[Operator]

Thank you, everyone. That does conclude today’s conference call. We do thank you all for your participation.