What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-08-05 · 163 added, 137 removed, 718 unchanged (29% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2020 December 31,

47 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Equity in losses (earnings) of nonconsolidated affiliates 2,615 2,681 6,656 ( 6,291 )

Other income, net ( 5,173 ) ( 430 ) ( 545 ) ( 3,833 )

Other expense (income), net ( 10,977 ) 5,384 ( 11,522 ) 1,551

Income (loss) before income taxes ( 559,362 ) 221,252 ( 1,413,381 ) 314,839

23 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

16 unchanged sentences

(in thousands, except share data) (in thousands)

Balances at March 31, 2020 211,834,739 $ 2,118 $ 2,260,509 $ ( 1,137,082 ) $ ( 6,865 ) $ ( 259,326 ) $ 371,478 $ 1,230,832 $ 443,606

Balances at June 30, 2020 212,523,147 $ 2,125 $ 2,295,069 $ ( 1,704,599 ) $ ( 6,865 ) $ ( 243,805 ) $ 341,605 $ 683,530 $ 334,228

Non-cash and stock-based compensation — — 56,696 — — — — 56,696 —

1 unchanged sentence

Exercise of stock options, net of shares withheld for option cost and employee taxes 320,731 3 6,683 — — — — 6,686 —

Fair value of convertible debt conversion feature, net of issuance cost — — 17 — — — — 17 —

Acquisitions — — — — — — 10,480 10,480 7,349

10 unchanged sentences

Foreign currency translation adjustments — — — — — 21,983 — 21,983 —

Balances at June 30, 2020 212,523,147 $ 2,125 $ 2,295,069 $ ( 1,704,599 ) $ ( 6,865 ) $ ( 243,805 ) $ 341,605 $ 683,530 $ 334,228

Balances at September 30, 2020 213,823,002 $ 2,138 $ 2,361,015 $ ( 2,233,501 ) $ ( 6,865 ) $ ( 222,217 ) $ 346,454 $ 247,024 $ 286,987

See Notes to Consolidated Financial Statements

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Foreign currency translation adjustments — — — — — ( 40,866 ) — ( 40,866 ) —

Balances at June 30, 2020 212,523,147 $ 2,125 $ 2,295,069 $ ( 1,704,599 ) $ ( 6,865 ) $ ( 243,805 ) $ 341,605 $ 683,530 $ 334,228

Balances at September 30, 2020 213,823,002 $ 2,138 $ 2,361,015 $ ( 2,233,501 ) $ ( 6,865 ) $ ( 222,217 ) $ 346,454 $ 247,024 $ 286,987

See Notes to Consolidated Financial Statements

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(in thousands, except share data) (in thousands)

Balances at March 31, 2019 209,857,816 $ 2,099 $ 2,267,761 $ ( 1,071,667 ) $ ( 6,865 ) $ ( 148,120 ) $ 197,186 $ 1,240,394 $ 343,029

Balances at June 30, 2019 210,910,143 $ 2,101 $ 2,296,010 $ ( 968,312 ) $ ( 6,865 ) $ ( 148,791 ) $ 233,613 $ 1,407,756 $ 385,328

Non-cash and stock-based compensation — — 12,030 — — — — 12,030 —

Common stock issued under stock plans, net of shares withheld for employee taxes 9,457 — ( 319 ) — — — — ( 319 ) —

Exercise of stock options 167,776 2 2,525 — — — — 2,527 —

Exercise of stock options, net of shares withheld for option cost and employee taxes 206,456 2 3,039 — — — — 3,041 —

Conversion of convertible debt — 8 ( 8 ) — — — — — —

Acquisitions — — — — — — 4,790 4,790 —

Purchases of noncontrolling interests — — ( 24,846 ) — — — ( 2,695 ) ( 27,541 ) —

Redeemable noncontrolling interests fair value adjustments — — ( 23,580 ) — — — — ( 23,580 ) 23,580

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Foreign currency translation adjustments — — — — — ( 32,256 ) — ( 32,256 ) —

Balances at June 30, 2019 210,910,143 $ 2,101 $ 2,296,010 $ ( 968,312 ) $ ( 6,865 ) $ ( 148,791 ) $ 233,613 $ 1,407,756 $ 385,328

Balances at September 30, 2019 211,126,056 $ 2,111 $ 2,262,461 $ ( 789,387 ) $ ( 6,865 ) $ ( 181,047 ) $ 235,559 $ 1,522,832 $ 418,816

See Notes to Consolidated Financial Statements

5 unchanged sentences

Common stock issued under stock plans, net of shares withheld for employee taxes 322,314 3 ( 10,581 ) — — — — ( 10,578 ) —

Exercise of stock options 637,377 7 10,192 — — — — 10,199 —

Exercise of stock options, net of shares withheld for option cost and employee taxes 843,833 9 13,231 — — — — 13,240 —

Conversion of convertible debt 824,328 8 28,578 — — — — 28,586 —

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Foreign currency translation adjustments — — — — — ( 35,816 ) — ( 35,816 ) —

Balances at June 30, 2019 210,910,143 $ 2,101 $ 2,296,010 $ ( 968,312 ) $ ( 6,865 ) $ ( 148,791 ) $ 233,613 $ 1,407,756 $ 385,328

Balances at September 30, 2019 211,126,056 $ 2,111 $ 2,262,461 $ ( 789,387 ) $ ( 6,865 ) $ ( 181,047 ) $ 235,559 $ 1,522,832 $ 418,816

See Notes to Consolidated Financial Statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Unrealized changes in fair value of contingent consideration ( 25,745 ) 7,372

Equity in losses of nonconsolidated affiliates, net of distributions 8,266 6,526

Provision for uncollectible accounts receivable 48,413 14,413

2 unchanged sentences

Decrease (increase) in accounts receivable 406,202 ( 392,065 )

Increase in prepaid expenses and other assets ( 50,493 ) ( 380,285 )

Decrease (increase) in prepaid expenses and other assets 1,793 ( 257,268 )

Increase (decrease) in accounts payable, accrued expenses and other liabilities ( 1,213,409 ) 135,672

Increase in deferred revenue 597,963 578,763

Increase (decrease) in deferred revenue 684,532 ( 162,782 )

Net cash provided by (used in) operating activities ( 956,903 ) 32,922

11 unchanged sentences

Payments on long-term debt ( 24,202 ) ( 30,491 )

Contributions from noncontrolling interests 2,568 13,124

Distributions to noncontrolling interests ( 31,473 ) ( 73,182 )

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The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Annual Report on Form 10-K filed with the SEC on February 27, 2020, as amended by the Form 10-K/A filed with the SEC on June 30, 2020.

Due to the seasonal nature of shows at outdoor amphitheaters and festivals, which primarily occur from May through October, our Concerts and Sponsorship & Advertising segments experience higher revenue during the second and third quarters.

Due to the seasonal nature of shows at outdoor amphitheaters and festivals, which primarily occur from May through October, our Concerts and Sponsorship & Advertising segments typically experience higher revenue during the second and third quarters.

Our Ticketing segment’s revenue is impacted by fluctuations in the availability of events for sale to the public, which vary depending upon scheduling by its clients.

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Because of these factors, the results to date are not necessarily indicative of the results expected for the full year.

Due to the unprecedented stoppage of concert and other events globally beginning in mid-March due to the global COVID-19 pandemic, we do not expect that any quarter in 2020 will follow our typical seasonality trend.

Due to the unprecedented stoppage of concert and other events globally beginning in mid-March resulting from the global COVID-19 pandemic, we do not expect that any quarter in 2020 will follow our typical seasonality trend.

Cash, Cash Equivalents and Restricted Cash

Included in the June 30, 2020 and December 31, 2019 cash and cash equivalents balance is $ 744.7 million and $ 837.7 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges, which amounts are to be remitted to these clients.

Included in the September 30, 2020 and December 31, 2019 cash and cash equivalents balance is $ 614.4 million and $ 837.7 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges, which amounts are to be remitted to these clients.

Restricted cash primarily consists of cash held in escrow accounts to fund capital improvements of certain leased or operated venues.

The cash is held in these accounts pursuant to the related lease or operating agreement.

During the first six months of 2020, we completed several acquisitions that were accounted for as business combinations under the acquisition method of accounting.

During the first nine months of 2020, we completed several acquisitions that were accounted for as business combinations under the acquisition method of accounting.

When we make these acquisitions, we often acquire a controlling interest without buying 100% of the business.

These acquisitions were not significant either on an individual basis or in the aggregate.

During the first six months of 2020, we acquired the remaining redeemable noncontrolling interests of certain subsidiaries and settled certain contingent consideration obligations in exchange for debt obligations totaling $ 20.9 million which are reflected in current portion of long-term debt, net on our consolidated balance sheets.

During the first nine months of 2020, we acquired the remaining redeemable noncontrolling interests of certain subsidiaries and settled certain contingent consideration obligations in exchange for debt obligations totaling $ 11.8 million, which are reflected in current portion of long-term debt, net on our consolidated balance sheets.

These non-cash transactions have not been reflected as cash flows from financing activities within our consolidated statements of cash flows.

Each reporting period, we evaluate the realizability of all of our deferred tax assets in each tax jurisdiction.

As of June 30, 2020, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses.

As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first six months of 2020 and 2019.

As of September 30, 2020, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses.

As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first nine months of 2020 and 2019.

Accounting Pronouncements - Recently Adopted

In June 2016, the FASB issued guidance that replaces the current incurred loss impairment model of recognizing credit losses with an expected loss model for financial assets measured at amortized cost.

We adopted this standard on January 1, 2020, and recorded a $ 3.0 million cumulative-effect adjustment to accumulated deficit in the consolidated balance sheet.

We adopted this standard on January 1, 2020, and recorded a $ 3.0 million cumulative-effect adjustment to accumulated deficit in the consolidated balance sheets.

The adoption is not expected to have a material effect on our future financial position or results of operations.

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In addition, implementation costs previously recorded as property, plant and equipment, net will now be reported as prepaid expenses and other long-term assets on our balance sheets, prospectively.

Accounting Pronouncements - Not Yet Adopted

In August 2020, the FASB issued guidance that simplifies the accounting for convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity.

The new guidance reduces the number of accounting models that require separating embedded conversion features from convertible instruments.

As a result, only conversion features accounted for under the substantial premium model and those that require bifurcation will be accounted for separately.

For contracts in an entity’s own equity, the new guidance eliminates some of the current requirements for equity classification.

The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity.

The guidance is effective for annual periods beginning after December 15, 2021 and interim periods within that year.

Early adoption is permitted for annual periods beginning after December 15, 2020 and interim periods within that year.

The guidance should be applied using either a modified retrospective method or a full retrospective method.

We will adopt this guidance on January 1, 2022, and are currently assessing which implementation method we will apply and the impact that adoption will have on our financial position and results of operations.

NOTE 2— IMPACT OF THE GLOBAL COVID-19 PANDEMIC

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Operating Results

Our second quarter and six-month results were materially impacted by these necessary actions.

Our overall revenue for the quarter decreased by 98 % to $ 74.1 million and for the six months decreased by 71 % to $ 1.4 billion.

Our third quarter and nine-month results were materially impacted by these necessary actions.

Our overall revenue for the quarter decreased by 95 % to $ 184.0 million and for the nine months decreased by 81 % to $ 1.6 billion.

The revenue reduction was across all of our segments as a result of few shows occurring globally beginning in the last half of March and low ticket sales for future shows during the same period, along with the impact of ticket refunds and show cancellations.

We estimate the lost revenue impact from the global COVID-19 pandemic in the second quarter and first six months of 2020 to be approximately $ 2.9 billion and $ 3.3 billion, respectively.

Our operating results for the second quarter and six months decreased as compared to the same periods of 2019 largely due to the global COVID-19 pandemic impacts to our business, totaling approximately $ 755 million and $ 879 million, respectively, including $ 12.1 million of definite-lived intangible assets impairment charges for the first six months of 2020.

The revenue recognized in our Concerts segment in the first six months of 2020 included the results of all the shows that occurred prior to the stoppage of events in mid-March.

Our event-related deferred revenue for Concerts, which is reported as part of deferred revenue on our consolidated balance sheets, includes the face value and Concerts’ share of service charges for all tickets sold by June 30, 2020, for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the first six months have either been returned to fans or are reflected in accrued expenses on the consolidated balance sheets.

We estimate the lost revenue impact from the global COVID-19 pandemic in the third quarter and first nine months of 2020 to be approximately $ 3.7 billion and $ 7.0 billion, respectively.

Our operating results for the third quarter and nine months decreased as compared to the same periods of 2019 largely due to the global COVID-19 pandemic impacts to our business, totaling approximately $ 818.6 million and $ 1.7 billion, respectively, including $ 3.6 million and $ 15.6 million of impairment charges for the third quarter and first nine months of 2020, respectively.

The revenue recognized in our Concerts segment in the first nine months of 2020 included the results of all the shows that occurred prior to the stoppage of events in mid-March.

Our event-related deferred revenue for Concerts, which is reported as part of deferred revenue on our consolidated balance sheets, includes the face value and Concerts’ share of service charges for all tickets sold by September 30, 2020, for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the first nine months have either been returned to fans or are reflected in accrued expenses on the consolidated balance sheets.

In addition, we have recorded an estimate of $ 74.0 million in Concerts for refunds that may occur in the future based on the limited amount of data available on refunds resulting from the global shutdown of our live events.

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We expect that the majority of our shows postponed due to the pandemic will be rescheduled.

Deferred revenue for tickets sold for shows expected to occur after June 30, 2021 totaled $ 486 million and are reflected in other long-term liabilities on our consolidated balance sheets.

By the end of the second quarter of 2020, we had cancelled nearly 3,900 concerts impacted by the stoppage of events starting in mid-March of this year, equating to approximately 12 million tickets, and have refunded or are in the process of refunding these tickets.

In addition, we had nearly 6,400 shows equating to approximately 22 million tickets, that have been postponed and rescheduled into 2021 or were in the process of being rescheduled at the end of the second quarter.

The revenue recognized in our Ticketing segment in the first six months of 2020 includes our share of ticket service charges for tickets sold during the period for third-party clients and for shows that occurred in the period for our Concerts business where our promoters control the ticketing.

Event-related deferred revenue for tickets sold for shows expected to occur after September 30, 2021 totaled $ 103 million and is reflected in other long-term liabilities on our consolidated balance sheets.

By the end of the third quarter of 2020, we had cancelled over 5,000 concerts impacted by the stoppage of events starting in mid-March of this year, equating to approximately 15 million tickets.

In addition, we had nearly 6,000 shows, equating to approximately 22 million tickets, that have been postponed and rescheduled into 2021 or were in the process of being rescheduled at the end of the third quarter.

The revenue recognized in our Ticketing segment in the first nine months of 2020 includes our share of ticket service charges for tickets sold during the period for third-party clients and for shows that occurred in the period for our Concerts business where our promoters control the ticketing.

Revenue in the period has been reduced by refunds given during the period.

In addition, revenue has been reduced for any shows that were cancelled and for refunds requested on rescheduled shows, both during the first six months and up to the time of the filing of these financial statements, and funds have either been returned to the customer or are reflected in accrued expenses on the consolidated balance sheets.

In addition, revenue has been reduced for any shows that were cancelled and for refunds requested on rescheduled shows, both during the first nine months and up to the time of the filing of these financial statements, and funds have either been returned to the customer or are reflected in accrued expenses on the consolidated balance sheets.

Our ticketing clients determine if shows will be rescheduled or cancelled and what the refund policy will be for those shows.

We have not recorded an estimate for refunds that may occur in the future since our clients, not Ticketmaster, determine when shows are cancelled or rescheduled and we have a limited amount of historical data of refunds resulting from a global shutdown of live events on which to reliably determine an estimate.

By the end of the second quarter of 2020 and through the time of this filing, Ticketing had processed or accrued for cancellations or refunds on 17.2 million tickets.

By the end of the third quarter of 2020 and through the time of this filing, Ticketing had processed or accrued for cancellations or refunds on 23.3 million tickets.

For events that are cancelled, our standard policy is to refund the fan within 30 days, though subject to regulations in various markets and in some cases at the discretion of venue or event organizer clients.

Our ticket refund policies for rescheduled shows vary by ticketing client and country.

In multiple international markets, including Germany, Italy and Belgium, government regulations which allow for the issuance of vouchers in place of cash refunds for rescheduled shows, and

in some cases for cancelled shows, have been put in place or drafted.

In multiple international markets, including Germany, Italy and Belgium, governmental regulations which allow for the issuance of vouchers in place of cash refunds for rescheduled shows, and in some cases for cancelled shows, have been put in place or drafted.

The volume and pace of cash refunds could have a material negative effect on our liquidity and capital resources.

The length and severity of the reduction in live events due to the pandemic is uncertain;

accordingly, we expect the negative impact to continue through the remainder of the year.

accordingly, we currently expect the negative impact to continue into next year.

The exact timing and pace of the recovery is uncertain given the significant impact of the pandemic on the overall United States and global economies.

We believe the ongoing effects of the global COVID-19 pandemic on our operations have had, and will continue to have a material negative impact on our financial results and liquidity, and such negative impact may continue beyond the containment of such outbreak.

We have never previously experienced a complete cessation of our live events and unprecedented reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of such a cessation is uncertain and we are unable to estimate the impact on our business, financial condition or near- or longer-term financial or operational results.

We have never previously experienced a complete cessation of our live events or a large-scale reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of these circumstances is uncertain and we are unable to estimate the impact on our business, financial condition or near- or longer-term financial or operational results.

Cash and available liquidity

We amended our senior secured credit facility in April 2020 and further amended it in July 2020 which, among other things, substitutes our net leverage covenant under our existing senior secured credit facility with a $500 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter prior to December 31, 2021.

These amendments will allow us the flexibility to manage our business through the disruption that we will experience in 2020.

We amended our senior secured credit facility in April 2020 and further amended it in July 2020 which, among other things, substitutes our net leverage covenant under our senior secured credit facility with a $500 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter prior to December 31, 2021.

These amendments will allow us the flexibility to manage our business through the disruption that we are experiencing in 2020 and expect to experience in 2021.

In addition, we added a new incremental revolving credit facility of $ 130 million, extending our undrawn debt capacity.

Following this increase, we have approximately $ 965.5 million in available debt capacity, including $ 400 million in undrawn term loan A capacity and $ 565.5 million in available revolver capacity, net of outstanding letters of credit.

Following this increase, we currently have approximately $ 962.6 million in available debt capacity, including $ 400 million in undrawn term loan A capacity and $ 562.6 million in available revolver capacity, net of outstanding letters of credit.

Finally, in May 2020, we issued $ 1.2 billion principal amount of 6.5 % senior secured notes due 2027.

We will continue to evaluate future financing opportunities to further expand liquidity at reasonable costs.

As of June 30, 2020, our total cash and cash equivalents balance was $ 3.3 billion, which included $ 745 million of ticketing client cash.

This cash, net of client cash, together with our now available debt capacity of $ 965.5 million, we believe gives us the liquidity to fund our operations during the pandemic.

Our total cash includes event-related deferred revenue for which the amount can fluctuate over the course of the year, but given the timing of shows in 2020 and expected substantial volume of on-sales for 2021 shows later in the second half of this year, we expect this number to remain above seasonally normal levels throughout this year.

Event-related deferred revenue consists of cash held by our Concerts business for future shows, with roughly half the funds associated with upcoming shows in the United States and half for international shows as of June 30, 2020.

As of September 30, 2020, our total cash and cash equivalents balance was $ 2.6 billion, which included $ 614 million of ticketing client cash.

We believe this cash, net of client cash, together with our available debt capacity of $ 962.6 million, gives us the liquidity to fund our operations during the pandemic.

Our total cash includes event-related deferred revenue for which the amount can fluctuate over the course of the year, but given the shift of shows into 2021, we expect this number to remain above seasonally normal levels throughout this year.

In the United States, the funds are largely associated with shows in our owned or operated venues, notably amphitheaters, festivals, theaters and clubs.

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As part of these cost reduction efforts, we have implemented salary reductions for most of our employees, with salaries for senior executives reduced by up to 60 %.

Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.

We are also making full use of government support programs globally.

In most European and Asian markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there are robust payroll support programs to mitigate a substantial portion of employee costs.

Additionally, in the United States, we have filed for payroll support under the Employee Retention Credit program established as part of the 2020 CARES Act and expect to receive additional support in the second half of the year.

Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, termination of certain

employees and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.

We are also making use of government support programs globally.

In most European and Asian markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there are payroll support programs to mitigate a substantial portion of employee costs.

Additionally, in the United States, we have filed for payroll support under the Employee Retention Credit program established as part of the 2020 CARES Act.

Finally, the CARES Act also provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50 % of the deferred amount due December 31, 2021 and the remaining 50 % due December 31, 2022.

We are further protecting our cash outflows by reducing advances in both our ticketing and concert businesses, re-assessing all capital expenditure projects and evaluating all other cash deployment activities.

As a result of these initiatives and government support programs, we are now targeting $ 800 million in cost reductions in 2020 and the elimination or deferral into 2021 of $ 1.4 billion in cash outflows, which primarily includes the cost reductions along with lower capital expenditures, acquisition payments, and concert and ticketing advances.

With these additional savings, our operational cash burn rate is now expected to average $ 125 million per month from April to December of 2020.

Adding in the rest of our cash outflows for non-operational items gives us a cash burn rate of an expected average of $ 185 million per month from April through the end of

As a result of these initiatives and government support programs, we are now targeting over $ 900 million in cost reductions in 2020 and the elimination or deferral into 2021 of $ 1.5 billion in cash outflows, which primarily includes the cost reductions discussed above along with lower capital expenditures, acquisition payments, and concert and ticketing advances.

We believe this aggressive cost and cash management program, combined with a strong liquidity profile, positions us to manage through the global COVID-19 pandemic-related hold on show activity and provides the flexibility to scale up quickly when shows restart.

Based on these actions and assumptions regarding the impact of the global COVID-19 pandemic, we believe that we will be able to generate sufficient liquidity to satisfy our obligations for the next twelve months and remain in compliance with our existing debt covenants throughout 2020 prior to giving effect to any additional financing that may occur.

Based on these actions and assumptions regarding the impact of the global COVID-19 pandemic, we believe that we will remain in compliance with our debt covenants throughout 2020 and be able to generate sufficient liquidity to satisfy our obligations for the next twelve months, prior to giving effect to any additional financings that may occur.

Our forecasted expense management and liquidity measures may be modified as we get more clarity on the timing of events.

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We are currently planning for the health and safety of our employees as they return to work in our offices in the future, and for our artists and fans as they return to live events.

We will return to work in local markets only after there is clear consensus that the time is right to do so, and then in appropriate numbers with expanded cleaning and social distancing protocols.

We will return to work in local markets only after there is clear guidance that the time is right to do so, and then in appropriate numbers with expanded cleaning and any social distancing or other regulations.

Similarly, we are planning for the resumption of concerts when the time is right.

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We expect that most global tours will resume and larger venues will reopen in the following year and that the underlying business supporting all of our long-lived assets will begin generating operating income once again.

However, we have never previously experienced a complete cessation of our live events and unprecedented reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of such a cessation is uncertain.

However, we have never previously experienced a complete cessation of our live events or a large-scale reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of these circumstances is uncertain.

As a result, the underlying assumptions used in our impairment assessments could change resulting in future impairment charges.

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Property, plant and equipment, net, consisted of the following:

June 30, December 31,

September 30, December 31,

(in thousands)

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Definite-lived Intangible Assets

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the six months ended June 30, 2020:

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the nine months ended September 30, 2020:

contracts Client /

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Net change ( 35,627 ) 63,138 ( 12,123 ) ( 6,713 ) ( 3,835 ) 3,409 8,249

Balance as of June 30, 2020:

Balance as of September 30, 2020:

Gross carrying amount

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(2) Other primarily includes netdowns of fully amortized or impaired assets.

Included in the current year acquisitions amounts above are definite-lived intangible assets primarily associated with the acquisitions of a festival and concert promotion business located in Ireland, a merchandise business, a festival promotion business and a ticketing business, all located in the United States.

Included in the current year acquisitions amounts above are definite-lived intangible assets primarily associated with the acquisitions of a festival and concert promotion business located in Ireland, a merchandise business, a festival promotion business and ticketing relationships, all located in the United States.

The 2020 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:

Life (years) (1)

Revenue-generating contracts 8

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All categories 8

______________

(1) The weighted average life of technology intangibles does not include purchased software licenses that are typically amortized over 1 to 3 years.

We test for possible impairment of definite-lived intangible assets whenever events or circumstances change, such as a significant reduction in operating cash flow or a change in the manner in which the asset is intended to be used, which may indicate that the carrying amount of the asset may not be recoverable.

During the six months ended June 30, 2020, we reviewed the carrying value of certain definite-lived intangible assets that management determined had an indicator that future operating cash flows may not support their carrying value as a result of the expected impacts from the global COVID-19 pandemic, and it was determined that those assets were impaired since the estimated undiscounted operating cash flows associated with those assets were less than their carrying value.

For the six months ended June 30, 2020, we recorded impairment charges related to definite-lived intangible assets of $ 12.1 million as a component of depreciation and amortization.

These impairment charges primarily related to intangible assets for revenue-generating contracts in the Concerts segment.

During the nine months ended September 30, 2020 and

2019, we reviewed the carrying value of certain definite-lived intangible assets that management determined had an indicator that future operating cash flows may not support their carrying value, as a result of the expected impacts from the global COVID-19 pandemic for the 2020 period, and it was determined that those assets were impaired since the estimated undiscounted operating cash flows associated with those assets were less than their carrying value.

For the nine months ended September 30, 2020 and 2019, we recorded impairment charges related to definite-lived intangible assets of $ 15.3 million and $ 19.4 million, respectively, as a component of depreciation and amortization.

For both periods, these impairment charges primarily related to intangible assets for revenue-generating contracts and client/vendor relationships in the Concerts segment.

See Note 7—Fair Value Measurements for further discussion of the inputs used to determine the fair value.

There were no significant impairment charges recorded during the six months ended June 30, 2019.

Amortization of definite-lived intangible assets for the three months ended June 30, 2020 and 2019 was $ 57.8 million and $ 49.5 million, respectively, and for the six months ended June 30, 2020 and 2019 was $ 122.0 million and $ 96.7 million, respectively.

The following table presents our estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets that exist at June 30, 2020:

Amortization of definite-lived intangible assets for the three months ended September 30, 2020 and 2019 was $ 58.4 million and $ 69.3 million, respectively, and for the nine months ended September 30, 2020 and 2019 was $ 180.4 million and $ 166.0 million, respectively.

The following table presents our estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets that exist at September 30, 2020:

(in thousands)

July 1 - December 31, 2020 $ 105,854

October 1 - December 31, 2020 $ 50,797

2021 $ 178,297

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As such, we completed our annual review in the fourth quarter of 2019 and, as reported in our December 31, 2019 Form 10-K, no impairments were recorded as the fair value of each reporting unit was determined to be in excess of its carrying value for all reporting units.

The rapid and severe impacts of the global COVID-19 pandemic, and more specifically the need to support global social distancing efforts, mitigating the spread of the virus, and comply with restrictions put in place by various governmental entities, led to our decision to cease all tours and to close our venues in mid-March.

The rapid and severe impacts of the global COVID-19 pandemic, and more specifically the need to support global social distancing efforts, mitigate the spread of the virus, and comply with restrictions put in place by various governmental entities, led to our decision to cease all tours and to close our venues in mid-March.

As such actions will continue to have a material impact on our cash flows during the suspension of operations, we have performed qualitative and sensitivity reviews to assess whether we believed these actions caused the fair value of any of our reporting units to fall below its carrying value.

These qualitative and sensitivity reviews included discounted cash flow model sensitivity analyses, and a consideration of the impact from changes in financial forecasts, discount rates and carrying values.

The conclusion for all reporting units was that no impairment trigger existed that would require a further quantitative analysis during the six months ended June 30, 2020.

The conclusion for all reporting units was that no impairment trigger existed that would require a further quantitative analysis during the nine months ended September 30, 2020.

We are unable to predict how long the impacts from the global COVID-19 pandemic will impact our operations or what additional restrictions may be imposed by governments.

Significant variations from current expectations could impact future assessments, resulting in future impairment charges.

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the six months ended June 30, 2020:

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the nine months ended September 30, 2020:

Concerts Ticketing Sponsorship

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Foreign exchange ( 2,799 ) 2,720 ( 8,678 ) ( 8,757 )

Balance as of June 30, 2020:

Balance as of September 30, 2020:

Goodwill 1,276,846 770,392 440,028 2,487,266

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Net $ 841,483 $ 770,392 $ 440,028 $ 2,051,903

Included in the current year acquisitions amounts above are goodwill primarily associated with the acquisition of a festival and concert promotion business located in Ireland and a festival promotion business located in the United States.

Included in the current year acquisitions amounts above are goodwill primarily associated with the acquisitions of a festival and concert promotion business located in Ireland, a merchandise business and a festival promotion business, both located in the United States.

We are in various stages of finalizing our acquisition accounting for recent acquisitions, which may include the use of external valuation consultants, and the completion of this accounting could result in a change to the associated purchase price allocations, including goodwill and our allocation between segments.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Contingent rent obligations are not included in the initial measurement of the lease asset or liability and are recorded as rent expense in the period that the contingency is resolved.

In response to the global COVID-19 pandemic, we closed our venues in mid-March and the majority of those venues have remained closed throughout the second quarter.

As a result, our variable lease cost has declined during the three months and six months ended June 30, 2020.

In response to the global COVID-19 pandemic, we closed our venues in mid-March and the majority of those venues have remained closed through September 30, 2020.

As a result, our variable lease cost has declined during the three months and nine months ended September 30, 2020.

Supplemental cash flow information for our operating leases is as follows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Lease assets obtained in exchange for lease obligations, net of terminations $ 149,817 $ 130,011

Future maturities of our operating lease liabilities at June 30, 2020 are as follows:

Future maturities of our operating lease liabilities at September 30, 2020 are as follows:

(in thousands)

July 1 - December 31, 2020 $ 92,241

October 1 - December 31, 2020 $ 41,360

Thereafter 1,598,904

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The weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:

September 30,

Weighted average remaining lease term (in years) 13.9 13.4

Weighted average discount rate 6.19 % 5.78 %

As of June 30, 2020, we have additional operating leases that have not yet commenced with total lease payments of $ 198.7 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 2020 to June 2030 with lease terms ranging from 1 to 21 years.

As of September 30, 2020, we have additional operating leases that have not yet commenced, with total lease payments of $ 119.1 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from October 2020 to June 2030, with lease terms ranging from 1 to 20 years.

In response to the impacts we are experiencing from the global COVID-19 pandemic, we have amended certain of our lease agreements and are continuing negotiations with certain of our landlords for deferral or abatement of fixed rent payments.

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NOTE 5— LONG-TERM DEBT

During the first six months of 2020, we amended our senior secured credit facility, issued $ 1.2 billion principal amount of 6.5 % senior secured notes due 2027 and issued $ 400 million principal amount of 2.0 % convertible senior notes due 2025.

A portion of the proceeds were used to pay fees of approximately $ 33.9 million, leaving approximately $ 1.6 billion for general corporate purposes.

Our senior secured credit facility was further amended in July 2020 to, among other things, provide additional flexibility with our debt covenants.

The amendments to our senior secured credit facility, among other things, provide for (i) a new incremental revolving credit facility, (ii) substitution of the consolidated net leverage ratio covenant with a $ 500.0 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter ending prior to December 31, 2021, (iii) annualization of consolidated EBITDA for the first three fiscal quarters in which the consolidated net leverage ratio covenant applies (as defined in the agreement), (iv) the reset of the consolidated net leverage ratio upon its resumption to 6.75 x with step downs to 6.25 x after four quarters, 5.75 x after eight quarters, 5.50 x after twelve quarters and 5.25 x after fourteen quarters through maturity, (v) adjustment of the applicable interest rate on the undrawn portion of the delayed draw term loan A and existing revolving credit facility, (vi) adjustment of the delayed draw term loan A and existing revolving credit facility commitment fees, (vii) temporary limits on our ability to make certain investments and incur additional indebtedness and liens for the period commencing on July 29, 2020 and ending on the date that we deliver our financial statements and compliance certificate for the first fiscal quarter in which the consolidated net leverage ratio covenant applies (such period, the “Restricted Period”) and (viii) temporary suspension of our ability to make certain voluntary restricted payments through the date on which we deliver a compliance certificate reflecting our compliance with the consolidated net leverage ratio (calculated without annualizing consolidated EBITDA).

During the first nine months of 2020, we amended our senior secured credit facility, issued $ 1.2 billion principal amount of 6.5 % senior secured notes due 2027 and issued $ 400 million principal amount of 2.0 % convertible senior notes due 2025.

A portion of the proceeds were used to pay transaction fees of approximately $ 35.5 million, leaving approximately $ 1.6 billion for general corporate purposes.

The amendments to our senior secured credit facility, among other things, provide for (i) a new incremental revolving credit facility, (ii) substitution of the consolidated net leverage ratio covenant with a $ 500.0 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter ending prior to December 31, 2021, (iii) annualization of consolidated EBITDA for the first three fiscal quarters in which the consolidated net leverage ratio covenant applies (as defined in the agreement), (iv) the reset of the consolidated net leverage ratio upon its resumption to 6.75 x with step downs to 6.25 x after four quarters, 5.75 x after eight quarters, 5.50 x after twelve quarters and 5.25 x after fourteen quarters through maturity, (v) adjustment of the applicable interest rate on the undrawn portion of the delayed draw term loan A and existing revolving credit facility, (vi) adjustment of the delayed draw term loan A and existing revolving credit facility commitment fees, (vii) temporary limits on our ability to make certain investments and incur additional indebtedness and liens for the period that commenced on July 29, 2020 and ends on the date that we deliver our financial statements and compliance certificate for the first fiscal quarter in which the consolidated net leverage ratio covenant applies (such period, the “Restricted Period”) and (viii) temporary suspension of our ability to make certain voluntary restricted payments through the date on which we deliver a compliance certificate reflecting our compliance with the consolidated net leverage ratio (calculated without annualizing consolidated EBITDA).

Long-term debt, which includes capital leases, consisted of the following:

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

(in thousands)

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Total long-term debt, net $ 4,849,274 $ 3,271,262

Future maturities of long-term debt at June 30, 2020 are as follows:

Future maturities of long-term debt at September 30, 2020 are as follows:

(in thousands)

July 1, 2020 - December 31, 2020 $ 52,393

October 1, 2020 - December 31, 2020 $ 31,638

Thereafter 3,383,515

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We are also required to make mandatory prepayments of the loans under the amended credit agreement, subject to specified exceptions, from excess cash flow and with the proceeds of asset sales, debt issuances and specified other events.

There were no borrowings under the revolving credit facilities as of June 30, 2020 and we have not drawn down on the delayed draw term loan A.

There were no borrowings under the revolving credit facilities as of September 30, 2020 and we have not drawn down on the delayed draw term loan A.

Based on our outstanding letters of credit of $ 67.4 million, $ 962.6 million was available for future borrowings from our delayed draw term loan A and revolving credit facilities.

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In February 2020, we issued $ 400 million principal amount of 2.0 % convertible senior notes due 2025.

Interest on the notes is payable semiannually in arrears on February 15 and August 15, beginning August 15, 2020, at a rate of 2.0 % per annum.

Interest on the notes is payable semiannually in arrears on February 15 and August 15, at a rate of 2.0 % per annum.

The notes will mature on February 15, 2025.

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The carrying amount of the equity component of the notes is $ 33.9 million, which is treated as a debt discount, and the principal amount of the liability component (face value of the notes) is $ 400 million.

As of June 30, 2020, the remaining period for the unamortized debt discount balance of $ 31.2 million was approximately five years and the value of the notes, if converted and fully settled in shares, did not exceed the principal amount of the notes.

As of June 30, 2020, the effective interest rate on the liability component of the notes was 4.3 %.

As of September 30, 2020, the remaining period for the unamortized debt discount balance of $ 29.6 million was approximately four years and the value of the notes, if converted and fully settled in shares, did not exceed the principal amount of the notes.

As of September 30, 2020, the effective interest rate on the liability component of the notes was 4.3 %.

The following table summarizes the amount of pre-tax interest cost recognized on the notes:

Three Months Ended

June 30, 2020 Six Months Ended June 30, 2020

September 30, 2020 Nine Months Ended September 30, 2020

(in thousands)

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Cash flows associated with the interest rate swap agreement are reflected as cash flows from operating activities within our consolidated statements of cash flows.

As of June 30, 2020, there is no ineffective portion or amount excluded from effectiveness testing.

As of September 30, 2020, there is no ineffective portion or amount excluded from effectiveness testing.

As a cash flow hedge, the effective portion of the loss on the derivative instrument was reported as a component of other comprehensive loss.

Amounts are deferred in other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction in the period or periods during which the hedged transaction affects earnings.

During the three and six months ended June 30, 2020, we recorded unrealized losses of $ 5.8 million and $ 36.6 million, respectively, as a component of other comprehensive loss related to this hedge.

During the three and nine months ended September 30, 2020, we recorded unrealized losses of $ 2.2 million and $ 38.8 million, respectively, as a component of other comprehensive loss related to this hedge.

Based on the current interest rate expectations, we estimate that approximately $ 8.3 million of this loss in other comprehensive loss will be reclassified into earnings in the next 12 months as an adjustment to interest expense.

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Estimated Fair Value

June 30, 2020 December 31, 2019

September 30, 2020

December 31, 2019

Level 1 Level 2 Total Level 1 Level 2 Total

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Estimated Fair Value at

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

(in thousands)

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Non-recurring

The following table shows the fair value of our financial assets that have been adjusted to fair value on a non-recurring basis, which had a significant impact on our results of operations for the six months ended June 30, 2020.

Fair Value Measurements Using

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Definite-lived intangible assets, net $ 7,390 $ — $ — $ 7,390 $ 15,264

During the six months ended June 30, 2020, we recorded impairment charges related to definite-lived intangible assets of $ 12.1 million as a component of depreciation and amortization.

The impairment charges are primarily related to intangible assets for revenue-generating contracts in the Concerts segment.

It was determined that these assets were impaired since the most recent estimated undiscounted future cash flows associated with these assets were less than their carrying value as a result of the expected impacts from the global COVID-19 pandemic.

Definite-lived intangible assets, net $ — $ — $ — $ — $ 19,372

During the nine months ended September 30, 2020 and 2019, we recorded impairment charges related to definite-lived intangible assets of $ 15.3 million and $ 19.4 million, respectively, as a component of depreciation and amortization.

For the nine months ended September 30, 2020, the impairment charges are primarily related to intangible assets for revenue-generating contracts and client/vendor relationships in the Concerts segment.

For the nine months ended September 30, 2019, the impairment charges were primarily related to intangible assets for revenue-generating contracts in the Concerts segment.

It was determined that these assets were impaired since the most recent estimated undiscounted future cash flows associated with these assets were less than their carrying value, as a result of the expected impacts from the global COVID-19 pandemic for the 2020 period.

These impairments were calculated using operating cash flows, which were discounted to approximate fair value.

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(Supreme Court of British Columbia, Vancouver Registry, filed October 2018);

Live Nation Entertainment, Inc., et al.

Entertainment, Inc., et al.

(Ontario Superior Court of Justice, filed October 2018);

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The parties reached a settlement and the case was dismissed with prejudice in November 2019.

In April 2019, the court

granted the defendants’ motion to compel arbitration of the Lee lawsuit and dismissed the case.

In April 2019, the court granted the defendants’ motion to compel arbitration of the Lee lawsuit and dismissed the case.

Lee subsequently appealed the District Court’s ruling to the Ninth Circuit, and in June 2020 the Ninth Circuit affirmed the District Court’s ruling in the defendants’ favor.

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Accumulated Other Comprehensive Loss

The following table presents changes in the components of AOCI, net of taxes, for the six months ended June 30, 2020:

The following table presents changes in the components of AOCI, net of taxes, for the nine months ended September 30, 2020:

Loss on Cash Flow Hedge Foreign Currency Items Total

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Net other comprehensive loss ( 35,638 ) ( 40,866 ) ( 76,504 )

Balance at June 30, 2020 $ ( 35,243 ) $ ( 208,562 ) $ ( 243,805 )

Balance at September 30, 2020 $ ( 35,638 ) $ ( 186,579 ) $ ( 222,217 )

See Note 7—Fair Value Measurements for further discussion and disclosure of the fair value of our interest rate swap that has been designated as a cash flow hedge.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Beginning in mid-March, we ceased all of our tours and closed our venues to support global efforts at social distancing to mitigate the spread of the virus, and to comply with restrictions put in place by various governmental entities.

For our Concerts segment, the impact is primarily a delay in the timing of revenue recognition as many events are being rescheduled to dates in 2021.

For events that have been cancelled as of June 30, 2020, the deferred revenue has been reclassified to accrued expenses on our consolidated balance sheets where not already refunded to the fan.

For our Concerts segment, the impact is partially a delay in the timing of revenue recognition as many events are being rescheduled to dates in 2021.

For events that have been cancelled as of September 30, 2020, the deferred revenue has been reclassified to accrued expenses on our consolidated balance sheets where not already refunded to the fan.

In certain markets, we are offering fans an incentive to receive a voucher for a future ticket purchase to one of our events in lieu of receiving a refund for the cancelled event.

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Where a fan has elected to receive a refund for a rescheduled event and where we have estimated future refunds, the deferred revenue has been reclassified to accrued expenses if not already refunded.

The estimate of future refunds was developed by allocating our event-related deferred revenue based on where we estimated that the affected events were in the refund process as of June 30, 2020, and applying a venue-specific refund take rate.

The estimate of future refunds was developed by allocating our event-related deferred revenue based on where we estimated that the affected events were in the refund process as of September 30, 2020, and applying a venue-specific refund take rate.

The venue-specific refund take rates were based on the refunds we have issued through the end of the current reporting period since we ceased all our tours and closed our venues in mid-March.

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The timing of our third-party clients’ event cancellations and rescheduling of postponed events or having new events available for sale can result in refunds of service charges exceeding current quarter sales resulting in negative revenue for that period.

For our Sponsorship & Advertising segment, the impact is primarily a delay in the timing of revenue recognition due to our concert events being rescheduled, our venues being closed and the limited number of events currently available for sale on our websites.

For our Sponsorship & Advertising segment, the impact is partially a delay in the timing of revenue recognition due to our concert events being rescheduled, our venues being closed and the limited number of events currently available for sale on our websites.

In response to the impacts we are experiencing from the global COVID-19 pandemic, we have amended or are continuing negotiations with certain of our sponsors to either provide additional benefits when our venues reopen and our concert events resume or extend the term of the agreement with no additional benefits to the sponsor.

Concerts revenue, including intersegment revenue, for the three and six months ended June 30, 2020 and 2019 are as follows:

Concerts revenue, including intersegment revenue, for the three and nine months ended September 30, 2020 and 2019 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

(in thousands)

Total Concert Revenue $ 141,823 $ 2,639,531 $ 1,135,216 $ 3,957,648

Total Concerts Revenue $ 154,791 $ 3,173,843 $ 1,290,007 $ 7,131,491

Percentage of consolidated revenue 84.1 % 84.1 % 79.4 % 82.4 %

* Percentage is not meaningful.

Our Concerts segment generates revenue from the promotion or production of live music events and festivals in our owned or operated venues and in rented third-party venues, artist management commissions and the sale of merchandise for music artists at events.

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Any consideration not collected by the day of the event is typically received within three months after the event date.

Ticketing revenue, including intersegment revenue, for the three and six months ended June 30, 2020 and 2019 are as follows:

Ticketing revenue, including intersegment revenue, for the three and nine months ended September 30, 2020 and 2019 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Non-recoupable ticketing contract advances, excluding those amounts paid to support clients’ advertising costs, are fixed additional incentives occasionally paid by us to certain clients to secure the contract and are typically amortized over the life of the contract on a straight-line basis as a reduction to revenue.

At June 30, 2020 and December 31, 2019, we had ticketing contract advances of $ 67.7 million and $ 100.9 million, respectively, recorded in prepaid expenses and $ 96.0 million and $ 105.7 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 13.3 million and $ 17.0 million for the three months ended June 30, 2020 and 2019, respectively, and $ 32.1 million and $ 34.3 million for the six months ended June 30, 2020 and 2019, respectively, related to non-recoupable ticketing contract advances.

At September 30, 2020 and December 31, 2019, we had ticketing contract advances of $ 66.6 million and $ 100.9 million, respectively, recorded in prepaid expenses and $ 91.1 million and $ 105.7 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 6.7 million and $ 19.9 million for the three months ended September 30, 2020 and 2019, respectively, and $ 38.8 million and $ 54.1 million for the nine months ended September 30, 2020 and 2019, respectively, related to non-recoupable ticketing contract advances.

Sponsorship & Advertising

Sponsorship & Advertising revenue, including intersegment revenue, for the three and six months ended June 30, 2020 and 2019 are as follows:

Sponsorship & Advertising revenue, including intersegment revenue, for the three and nine months ended September 30, 2020 and 2019 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Our Sponsorship & Advertising segment generates revenue from sponsorship and marketing programs that provide its sponsors with strategic, international, national and local opportunities to reach customers through our venue, concert and ticketing assets, including advertising on our websites.

These programs can also include custom events or programs for the

sponsors’ specific brands, which are typically experienced exclusively by the sponsors’ customers.

These programs can also include custom events or programs for the sponsors’ specific brands, which are typically experienced exclusively by the sponsors’ customers.

Sponsorship agreements may contain multiple elements, which provide several distinct benefits to the sponsor over the term of the agreement, and can be for a single or multi-year term.

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Revenue received in advance of the event or the sponsor receiving the benefit is recorded as deferred revenue or in other long-term liabilities if the date of the event is more than twelve months from the balance sheet date.

At June 30, 2020, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 941.4 million of revenue related to future benefits to be provided by us.

At September 30, 2020, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 956.3 million of revenue related to future benefits to be provided by us.

We expect to recognize, based on current projections and expectations of our business resuming, approximately 3 %, 38 %, 24 % and 35 % of this revenue in the remainder of 2020, 2021, 2022 and thereafter, respectively.

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We had current deferred revenue of $ 1.4 billion and $ 1.2 billion at December 31, 2019 and 2018, respectively.

The table below summarizes the amount of current deferred revenue from December 31 recognized during the three and six months ended June 30, 2020 and 2019:

The table below summarizes the amount of current deferred revenue from December 31 recognized during the three and nine months ended September 30, 2020 and 2019:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

5 unchanged sentences

$ 17,750 $ 275,443 $ 327,058 $ 1,175,092

As of June 30, 2020, approximately 32.9 % of the current deferred revenue balance from December 31, 2019 is expected to be recognized in 2021 and thus such amounts remain in current deferred revenue or have been reclassified to long-term deferred revenue.

In addition, as of June 30, 2020, approximately 22.9 % of the current deferred revenue balance from December 31, 2019 has been or is expected to be refunded to fans as the corresponding events have been cancelled or refunds are expected to be requested for rescheduled events, and thus such amounts have been reclassified to accrued expenses if not already refunded.

As of September 30, 2020, approximately 41.0 % of the current deferred revenue balance from December 31, 2019 is expected to be recognized in 2021 and thus such amounts remain in current deferred revenue or have been reclassified to long-term deferred revenue.

In addition, as of September 30, 2020, approximately 28.3 % of the current deferred revenue balance from December 31, 2019 has been or is expected to be refunded to fans as the corresponding events have been cancelled or refunds are expected to be requested for rescheduled events, and thus such amounts have been reclassified to accrued expenses if not already refunded.

As the global COVID-19 pandemic continues to further delay our ability to resume our concert events and reopen our venues, our long-term deferred revenue balance has increased.

We had long-term deferred revenue of $ 591.5 million and $ 34.4 million at June 30, 2020 and December 31, 2019, respectively, which is reflected in other long-term liabilities on the consolidated balance sheets.

We had long-term deferred revenue of $ 164.1 million and $ 34.4 million at September 30, 2020 and December 31, 2019, respectively, which is reflected in other long-term liabilities on the consolidated balance sheets.

NOTE 11— STOCK-BASED COMPENSATION

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

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Total $ 56,695 $ 11,998 $ 106,965 $ 36,924

The increase in stock-based compensation expense for the three and six months ended June 30, 2020 as compared to the same periods of the prior year is primarily due to the issuance of restricted stock in the second quarter of 2020 in lieu of cash payments due for certain compensation owed to employees, as part of our cash savings initiative in connection with the global COVID-19 pandemic.

The increase in stock-based compensation expense for the three and nine months ended September 30, 2020 as compared to the same periods of the prior year is primarily due to the issuance of restricted stock in the second quarter of 2020 in lieu of cash payments due for certain compensation owed to employees, as part of our cash savings initiative in connection with the global COVID-19 pandemic.

NOTE 12— SEGMENT DATA

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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 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, 2020 and 2019:

The following table presents the results of operations for our reportable segments for the three and nine months ended September 30, 2020 and 2019:

Concerts Ticketing Sponsorship

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(in thousands)

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Revenue $ 154,791 $ ( 19,822 ) $ 47,927 $ 806 $ — $ 316 $ 184,018

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(in thousands)

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Revenue $ 3,173,843 $ 388,458 $ 215,247 $ 791 $ — $ ( 4,655 ) $ 3,773,684

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Intersegment revenue $ 2,092 $ 2,563 $ — $ — $ — $ ( 4,655 ) $ —

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Revenue $ 1,290,007 $ 177,436 $ 156,560 $ 2,407 $ — $ ( 2,615 ) $ 1,623,795

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Capital expenditures $ 98,790 $ 58,515 $ 4,709 $ — $ 6,239 $ — $ 168,253

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Revenue $ 7,131,491 $ 1,096,865 $ 441,862 $ 2,372 $ — $ ( 14,069 ) $ 8,658,521

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements