What changed in this filing

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Item 1. Financial Statements

2021-08-03 compared with 2021-05-06 · 206 added, 100 removed, 528 unchanged (37% of the section changed)

51 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands except share and per share data)

4 unchanged sentences

Depreciation and amortization 103,647 122,767 212,523 244,847

Loss on disposal of operating assets 138 130

Loss (gain) on disposal of operating assets ( 28 ) 559 110 689

Corporate expenses 27,598 20,916 55,546 49,228

2 unchanged sentences

Interest income ( 1,471 ) ( 2,429 ) ( 2,620 ) ( 6,902 )

Equity in earnings of nonconsolidated affiliates ( 581 ) ( 2,572 )

Gain from sale of investments in nonconsolidated affiliates ( 55,933 ) ( 3,555 )

Equity in losses of nonconsolidated affiliates 2,998 6,613 2,417 4,041

Loss (gain) from sale of investments in nonconsolidated affiliates 993 35 ( 52,947 ) 35

Other expense (income), net 9,461 ( 5,208 ) 7,462 ( 580 )

18 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

15 unchanged sentences

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

Balances at March 31, 2021 216,027,546 $ 2,160 $ 2,431,387 $ ( 2,984,026 ) $ ( 6,865 ) $ ( 173,216 ) $ 336,446 $ ( 394,114 ) $ 264,384

Non-cash and stock-based compensation — — 12,830 — — — — 12,830 —

Common stock issued under stock plans, net of shares withheld for employee taxes 95,264 2 ( 121 ) — — — — ( 119 ) —

Exercise of stock options, net of shares withheld for option cost and employee taxes 265,667 2 ( 15,860 ) — — — — ( 15,858 ) —

Acquisitions — — — — — — — — 598

Divestitures — — — — — — — — —

Purchases of noncontrolling interests — — 4,275 — — — ( 2,577 ) 1,698 ( 1,698 )

Redeemable noncontrolling interests fair value adjustments — — 951 — — — — 951 ( 951 )

Contributions received — — — — — — 13,471 13,471 95

Cash distributions — — — — — — ( 8,034 ) ( 8,034 ) ( 892 )

Other — — — — — — ( 2,121 ) ( 2,121 ) —

Comprehensive loss:

Net loss — — — ( 195,665 ) — — ( 4,026 ) ( 199,691 ) ( 10,769 )

Unrealized loss on cash flow hedge — — — — — ( 5,788 ) — ( 5,788 ) —

Realized loss on cash flow hedge — — — — — 1,946 — 1,946 —

Foreign currency translation adjustments — — — — — 15,226 — 15,226 —

Balances at June 30, 2021 216,388,477 $ 2,164 $ 2,433,462 $ ( 3,179,691 ) $ ( 6,865 ) $ ( 161,832 ) $ 333,159 $ ( 579,603 ) $ 250,767

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

Common Shares Issued Common Stock Additional Paid-In Capital Accumulated Deficit Cost of Shares Held in Treasury Accumulated Other Comprehensive Loss Noncontrolling Interests Total Equity Redeemable Noncontrolling Interests

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

Balances at December 31, 2020 214,466,988 $ 2,145 $ 2,386,790 $ ( 2,676,833 ) $ ( 6,865 ) $ ( 177,009 ) $ 338,020 $ ( 133,752 ) $ 272,449

1 unchanged sentence

Common stock issued under stock plans, net of shares withheld for employee taxes 661,549 7 ( 20,070 ) — — — — ( 20,063 ) —

Exercise of stock options 994,273 10 25,784 — — — — 25,794 —

Exercise of stock options, net of shares withheld for option cost and employee taxes 1,259,940 12 9,924 — — — — 9,936 —

Acquisitions — — — — — — — — 598

Divestitures — — — — — — — — —

Purchases of noncontrolling interests — — 3,775 — — — ( 2,577 ) 1,198 ( 1,698 )

3 unchanged sentences

Cash distributions — — — — — — ( 12,511 ) ( 12,511 ) ( 2,031 )

Other — — — — — — ( 2,121 ) ( 2,121 ) —

Comprehensive loss:

3 unchanged sentences

Foreign currency translation adjustments — — — — — 2,007 — 2,007 —

Balances at June 30, 2021 216,388,477 $ 2,164 $ 2,433,462 $ ( 3,179,691 ) $ ( 6,865 ) $ ( 161,832 ) $ 333,159 $ ( 579,603 ) $ 250,767

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

(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

Non-cash and stock-based compensation — — 38,538 — — — — 38,538 —

Common stock issued under stock plans, net of shares withheld for employee taxes 79,079 1 ( 217 ) — — — — ( 216 ) —

Exercise of stock options, net of shares withheld for option cost and employee taxes 609,329 6 ( 4,734 ) — — — — ( 4,728 ) —

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

Acquisitions — — — — — — 4,157 4,157 751

Divestitures — — — — — — 593 593 —

Purchases of noncontrolling interests — — ( 454 ) — — — — ( 454 ) ( 89,779 )

Redeemable noncontrolling interests fair value adjustments — — 1,595 — — — — 1,595 ( 1,595 )

Contributions received — — — — — — 1,391 1,391 —

Cash distributions — — — — — — ( 7,915 ) ( 7,915 ) ( 3,287 )

Other — — ( 185 ) — — — ( 501 ) ( 686 ) 1

Comprehensive loss:

Net loss — — — ( 567,517 ) — — ( 27,598 ) ( 595,115 ) ( 15,469 )

Unrealized loss on cash flow hedge — — — — — ( 5,765 ) — ( 5,765 ) —

Realized loss on cash flow hedge — — — — — 1,353 — 1,353 —

Foreign currency translation adjustments — — — — — 19,933 — 19,933 —

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

See Notes to Consolidated Financial Statements

6 unchanged sentences

Common stock issued under stock plans, net of shares withheld for employee taxes 341,249 3 ( 7,665 ) — — — — ( 7,662 ) —

Exercise of stock options 310,507 3 6,453 — — — — 6,456 —

Exercise of stock options, net of shares withheld for option cost and employee taxes 919,836 9 1,719 — — — — 1,728 —

Fair value of convertible debt conversion feature, net of issuance cost — — 33,347 — — — — 33,347 —

Acquisitions — — — — — — 35,322 35,322 11,899

Divestitures — — — — — — 593 593 —

Purchases of noncontrolling interests — — ( 6,939 ) — — — ( 1,032 ) ( 7,971 ) ( 96,190 )

7 unchanged sentences

Unrealized loss on cash flow hedge — — — — — ( 36,596 ) — ( 36,596 ) —

Realized loss on cash flow hedge — — — — — 1,353 — 1,353

Foreign currency translation adjustments — — — — — ( 62,849 ) — ( 62,849 ) —

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

See Notes to Consolidated Financial Statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in thousands)

5 unchanged sentences

Amortization of non-recoupable ticketing contract advances 28,728 32,126

Deferred income tax expense (benefit) 6,149 ( 12,316 )

Amortization of debt issuance costs and discounts 18,373 14,856

Non-cash compensation expense 52,847 50,270

Unrealized changes in fair value of contingent consideration ( 8,040 ) ( 24,789 )

Provision for uncollectible accounts receivable ( 16,563 ) 25,764

Loss (gain) on sale of investments in nonconsolidated affiliates ( 52,947 ) 35

1 unchanged sentence

Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:

Decrease in accounts receivable 21,861 227,913

Decrease (increase) in prepaid expenses and other assets 4,704 ( 207,157 )

Decrease in accounts payable, accrued expenses and other liabilities ( 39,044 ) ( 316,204 )

Decrease (increase) in accounts receivable ( 143,343 ) 363,079

Increase in prepaid expenses and other assets ( 102,554 ) ( 50,493 )

Increase (decrease) in accounts payable, accrued expenses and other liabilities 518,810 ( 807,552 )

Increase in deferred revenue 1,175,690 597,963

Net cash provided by operating activities 74,574 631,675

Net cash provided by (used in) operating activities 1,169,989 ( 390,360 )

CASH FLOWS FROM INVESTING ACTIVITIES

7 unchanged sentences

Other, net 912 1,653

Net cash provided by (used in) investing activities 10,108 ( 122,371 )

Net cash used in investing activities ( 50,295 ) ( 190,641 )

CASH FLOWS FROM FINANCING ACTIVITIES

1 unchanged sentence

Payments on long-term debt ( 85,125 ) ( 11,087 )

Contributions from noncontrolling interests 15,288 1,467

Distributions to noncontrolling interests ( 14,542 ) ( 26,315 )

2 unchanged sentences

Taxes paid for net share settlement of equity awards ( 38,209 ) ( 17,339 )

Payments for deferred and contingent consideration ( 11,926 ) ( 9,940 )

Other, net 105 —

21 unchanged sentences

Our seasonality also results in higher balances in cash and cash equivalents, accounts receivable, prepaid expenses, accrued expenses and deferred revenue at different times in the year.

Due to the unprecedented stoppage of our concert and other events globally beginning in mid-March 2020 resulting from the global COVID-19 pandemic, we did not experience our typical seasonality trends in 2020 and do not expect any quarter in 2021 will follow our typical seasonality trends.

Due to the unprecedented global stoppage of our concert and other events beginning in mid-March 2020 resulting from the global COVID-19 pandemic, we did not experience our typical seasonality trends in 2020 and do not expect 2021 will follow our typical seasonality trends.

Cash, Cash Equivalents and Restricted Cash

2 unchanged sentences

These balances are stated at cost, which approximates fair value.

Included in the March 31, 2021 and December 31, 2020 cash and cash equivalents balance is $ 724.4 million and $ 673.5 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges (“client cash”), which amounts are to be remitted to these clients.

Included in the June 30, 2021 and December 31, 2020 cash and cash equivalents balance is $ 1.1 billion and $ 673.5 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges (“client cash”), which amounts are to be remitted to these clients.

We generally do not utilize client cash for our own financing or investing activities as the amounts are payable to our clients on a regular basis.

7 unchanged sentences

Any gain or loss resulting from the remeasurement to fair value is recorded as a component of other expense (income), net in the statements of operations.

At March 31, 2021 and December 31, 2020, we had investments in nonconsolidated affiliates of $ 162.5 million and $ 170.5 million, respectively, included in other long-term assets on our consolidated balance sheets.

At June 30, 2021 and December 31, 2020, we had investments in nonconsolidated affiliates of $ 208.1 million and $ 170.5 million, respectively, included in other long-term assets on our consolidated balance sheets.

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

As of March 31, 2021, 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 three months of 2021.

As of June 30, 2021, 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 2021 and 2020.

Accounting Pronouncements - Not Yet Adopted

12 unchanged sentences

As the impact of the global COVID-19 pandemic became clearer, we ceased all Live Nation tours and closed our venues in mid-March 2020 to support global efforts at social distancing and mitigating the virus, and to comply with restrictions put in place by various governmental entities, which has had a materially negative impact on our revenue and financial position.

We are beginning to see the positive impacts of successful vaccination rollouts in many of our key markets with social distancing restrictions easing and live events resuming late in the second quarter.

Operating Results

Our first quarter results were materially impacted by these necessary actions.

Our overall revenue for the first quarter of 2021 decreased by 79 % to $ 290.6 million as compared to the same period of the prior year.

The revenue reduction was primarily in our Concerts and Ticketing segments as a result of few shows occurring globally beginning in the last half of March 2020 and low ticket sales for future shows during the same period.

The event-related deferred revenue for our Concerts segment, 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 March 31, 2021 for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the first three months of 2021 have either been returned to fans or are reflected in accrued expenses on the consolidated balance sheets.

Our second quarter and six month results were materially impacted by these necessary actions when compared to periods prior to the global COVID-19 pandemic.

Our overall revenue for the quarter increased by $ 501.9 million to $ 575.9 million and for the six months decreased by $ 573.2 million to $ 866.6 million as compared to the same period of the prior year.

The revenue increase during the quarter was primarily in our Ticketing and Concerts segments as a result of more events going on sale and occurring globally, along with lower refunds, during the second quarter of 2021 as compared to the same period of the prior year.

The decrease in revenue during the first six months of 2021 was primarily in our Concerts segment largely due to normal pre-pandemic operations from January through mid-March of 2020 compared to a full shut-down for the first quarter of 2021.

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

We had a limited number of shows in the first six months of 2021, largely in Australia, New Zealand and the United States.

The event-related deferred revenue for our Concerts segment, 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, 2021 for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the first six months of 2021 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 $ 40 million in Concerts for refunds that may occur in the future for shows we believe may be cancelled or rescheduled based on the data available on refunds resulting from the global shutdown of our live events.

1 unchanged sentence

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

Event-related deferred revenue for tickets sold for shows expected to occur after March 31, 2022 totaled $ 229.8 million and is reflected in other long-term liabilities on our consolidated balance sheets.

The revenue recognized in our Ticketing segment during the first three months of 2021 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 up to the time of the filing of these consolidated 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.

Event-related deferred revenue for tickets sold for shows expected to occur after June 30, 2022 totaled $ 380.7 million and is reflected in other long-term liabilities on our consolidated balance sheets.

The revenue recognized in our Ticketing segment during the first six months of 2021 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 segment where our promoters control the ticketing.

Revenue has been reduced for any shows that were cancelled and for refunds requested on rescheduled shows up to the time of the filing of these consolidated 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.

For events that are cancelled, our standard policy is to refund the fans within 30 days, subject to regulations in various markets and in some cases at the discretion of our 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, 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 in response to the global COVID-19 pandemic.

The volume and pace of cash refunds has had and may continue to 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 and;

accordingly, we currently expect the negative impact to continue in 2021.

The exact timing and pace of the recovery is uncertain given the significant impact of the pandemic and the uncertainty on the timing of the rollout of vaccines on the 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 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.

NOTE 3— LONG-LIVED ASSETS

We reviewed our long-lived assets for potential impairment indicators due to the suspension of our live events resulting from the global COVID-19 pandemic.

Our venues are either owned or we have long-term operating rights under lease or management agreements with terms ranging from 5 to 25 years.

Our venues are either owned or we have long-term operating rights under lease or management agreements typically with terms ranging from 5 to 25 years at inception.

Many of our definite-lived intangible assets are based on revenue-generating contracts and client or vendor relationships associated with live events and have useful lives, established at the time of acquisition, typically ranging from 3 to 10 years.

1 unchanged sentence

Based on our assessments, we have recorded impairment charges on certain of our definite-lived intangible assets, which are discussed below.

The length and severity of the impact to live events and our related sponsorship and ticketing businesses is still uncertain.

We currently do not anticipate a significant change in activity levels until early in the second half of 2021 led by outdoor events and festivals in the United States and United Kingdom.

We expect that most larger venues will reopen and global tours will resume in the second half of 2021 and that the underlying business supporting all of our long-lived assets will begin generating operating income once again.

While we are optimistic, the length and severity of the impact to live events and our related sponsorship and ticketing businesses is still uncertain.

Activity levels are beginning to increase in the second half of 2021 led by outdoor events and festivals in the United States and United Kingdom.

We expect that most larger venues will reopen and tours will resume in the second half of 2021 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 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.

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(in thousands)

7 unchanged sentences

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 three months ended March 31, 2021:

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, 2021:

relationships Revenue-

21 unchanged sentences

Net change ( 9,239 ) ( 7,812 ) ( 6,798 ) ( 4,864 ) 13,398 5,985 ( 9,330 )

Balance as of March 31, 2021:

Balance as of June 30, 2021:

Gross carrying amount

12 unchanged sentences

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 three months ended March 31, 2021 and 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 three months ended March 31, 2021, there were no significant impairment charges.

For the three months ended March 31, 2020, we recorded impairment charges related to definite-lived intangible assets of $ 10.1 million as a component of depreciation and amortization primarily related to intangible assets for revenue-generating contracts in the Concerts segment.

During the six months ended June 30, 2021 and 2020, we reviewed definite-lived intangible assets that management determined had an indicator that remaining future operating cash flows over the acquisition-date estimated useful life 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, 2021, there were no significant impairment charges.

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

See Note 6—Fair Value Measurements for further discussion of the inputs used to determine the fair value.

Amortization of definite-lived intangible assets for the three months ended March 31, 2021 and 2020 was $ 51.9 million and $ 64.2 million, respectively.

Amortization of definite-lived intangible assets for the three months ended June 30, 2021 and 2020 was $ 48.6 million and $ 57.8 million, respectively, and for the six months ended June 30, 2021 and 2020 was $ 100.5 million and $ 122.0 million, respectively.

As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization will vary.

1 unchanged sentence

As such, we completed our annual review in the fourth quarter of 2020 and, as reported in our December 31, 2020 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, mitigate the spread of the virus and comply with restrictions put in place by various governmental entities, led to our decision to stop all tours and close our venues beginning in mid-March 2020.

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 as of March 31, 2021 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 three months ended March 31, 2021.

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 three months ended March 31, 2021:

There were no indicators of impairment during the interim periods of 2021.

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, 2021:

Concerts Ticketing Sponsorship

8 unchanged sentences

Foreign exchange 369 ( 2,433 ) ( 635 ) ( 2,699 )

Balance as of March 31, 2021:

Balance as of June 30, 2021:

Goodwill 1,318,163 776,386 463,518 2,558,067

3 unchanged sentences

Investments in Nonconsolidated Affiliates

During the three months ended March 31, 2021, we sold certain investments in nonconsolidated affiliates for $ 60.3 million in cash plus $ 6.8 million in deferred purchase price consideration resulting in a gain on sale of investments in nonconsolidated affiliates of $ 55.9 million.

During the six months ended June 30, 2021, we sold certain investments in nonconsolidated affiliates for $ 61.6 million in cash plus $ 6.2 million in deferred purchase price consideration resulting in a gain on sale of investments in nonconsolidated affiliates of $ 52.9 million.

During the six months ended June 30, 2021, we entered into certain agreements whereby we received equity in the counterparty to those agreements primarily in exchange for providing sponsorship and marketing programs and support.

We recognized $ 25.0 million of noncash additions to investments in nonconsolidated affiliates which are included in other long-term assets on our consolidated balance sheets associated with these agreements.

NOTE 4— LEASES

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

6 unchanged sentences

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

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Lease assets obtained in exchange for lease obligations, net of terminations $ 41,005 $ 98,052

Future maturities of our operating lease liabilities at March 31, 2021 are as follows:

Future maturities of our operating lease liabilities at June 30, 2021 are as follows:

(in thousands)

April 1 - December 31, 2021 $ 135,266

July 1 - December 31, 2021 $ 91,363

Thereafter 1,503,232

3 unchanged sentences

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Weighted average remaining lease term (in years) 13.7 13.9

Weighted average discount rate 6.39 % 6.31 %

As of March 31, 2021, we have additional operating leases that have not yet commenced, with total lease payments of $ 217.4 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from April 2021 to June 2030, with lease terms ranging from 1 to 20 years.

As of June 30, 2021, we have additional operating leases that have not yet commenced, with total lease payments of $ 175.4 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 2021 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.

3 unchanged sentences

In January 2021, we issued $ 500 million principal amount of 3.75 % senior secured notes due 2028.

A portion of the proceeds were used to pay estimated fees of $ 7.7 million and repay $ 75.0 million aggregate principal amount of the Company’s senior secured term loan B facility, leaving approximately $ 417.3 million for general corporate purposes, including acquisitions and organic investment opportunities.

A portion of the proceeds were used to pay fees of $ 7.7 million and repay $ 75.0 million aggregate principal amount of the Company’s senior secured term loan B facility, leaving approximately $ 417.3 million for general corporate purposes, including acquisitions and organic investment opportunities.

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

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Total long-term debt, net $ 5,295,207 $ 4,855,096

Future maturities of long-term debt at March 31, 2021 are as follows:

Future maturities of long-term debt at June 30, 2021 are as follows:

(in thousands)

April 1, 2021 - December 31, 2021 $ 31,125

July 1, 2021 - December 31, 2021 $ 35,087

Thereafter 3,775,121

4 unchanged sentences

In January 2021, we issued $ 500 million principal amount of 3.75 % senior secured notes due 2028.

Interest on the notes is payable semi-annually in cash in arrears on January 15 and July 15 of each year beginning on July 15, 2021, and will mature on January 15, 2028.

Interest on the notes is payable semi-annually in cash in arrears on January 15 and July 15 of each year and began on July 15, 2021, and will mature on January 15, 2028.

We may redeem some or all of the notes, at any time prior to January 15, 2024, at a price equal to 100 % of the aggregate principal amount, plus any accrued and unpaid interest to the date of redemption, plus a ‘make-whole’ premium.

We may redeem up to 35 % of the aggregate principal amount of the notes from the proceeds of certain equity offerings prior to January 15, 2024, at a price equal to 103.75 % of the aggregate principal amount, plus accrued and unpaid interest thereon, if any, to the date of redemption.

In addition, on or after January 15, 2024 we may redeem some or all of the notes at any time at redemption prices specified in the notes indenture, plus any accrued and unpaid interest to the date of redemption.

4 unchanged sentences

Estimated Fair Value

March 31, 2021

June 30, 2021

December 31, 2020

6 unchanged sentences

Estimated Fair Value at

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

8 unchanged sentences

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 three months ended March 31, 2020.

Fair Value Measurements Using

2 unchanged sentences

Definite-lived intangible assets, net $ 6,919 $ — $ — $ 6,919 $ 12,063

For the three months ended March 31, 2021, there were no significant impairment charges.

During the three months ended March 31, 2020, we recorded impairment charges related to definite-lived intangible assets of $ 10.1 million as a component of depreciation and amortization 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, primarily as a result of the expected impacts from the global COVID-19 pandemic for both periods.

For the six months ended June 30, 2021, there were no significant impairment charges.

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

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

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In April 2021, the court in the Gomel lawsuit refused to certify all claims other than those pled under British Columbia’s Business Practices and Consumer Protection Act and claims for punitive damages, but the court did certify a class of British Columbia residents who purchased tickets to an event in Canada on any secondary market exchange from June 30, 2015 through April 15, 2021 that were initially purchased on Ticketmaster.ca.

We filed a notice of appeal of the class certification ruling in May 2021, and the plaintiff filed a cross-appeal shortly thereafter.

Based on information presently known to management, we do not believe that a loss is probable of occurring at this time, and we believe that the potential liability, if any, will not have a material adverse effect on our financial position, cash flows or results of operations.

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(“OCESA”) and certain other related subsidiaries of CIE.

We made our initial concentration notice filings with the regulatory authorities in Mexico in late August 2019 and received approval for the transaction in mid-April 2020.

We made our initial concentration notice filings with the regulatory authorities in Mexico in late

August 2019 and received approval for the transaction in mid-April 2020.

CIE shareholders approved the acquisition in September 2019.

In May 2020, we notified CIE that we were terminating our agreement with it as a result of CIE’s failure to

comply with its contractual obligation to continue operating the target companies in the ordinary course of business and the occurrence of a material adverse effect (as that term is defined in the CIE purchase agreement).

In May 2020, we notified CIE that we were terminating our agreement with it as a result of CIE’s failure to comply with its contractual obligation to continue operating the target companies in the ordinary course of business and the occurrence of a material adverse effect (as that term is defined in the CIE purchase agreement).

We simultaneously notified TV that we were terminating our agreement with it, which agreement may be terminated if the agreement with CIE is terminated for any reason.

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CIE is seeking specific performance to require us to proceed with closing under the CIE purchase agreement and damages in an unspecified amount arising from our alleged failure to timely close.

The matter has been assigned to a panel of arbitrators and a hearing has been scheduled to commence in March 2022.

The matter has been assigned to a panel of arbitrators and a hearing has been scheduled to commence in June 2022.

We intend to vigorously defend these claims.

1 unchanged sentence

Accumulated Other Comprehensive Loss

The following table presents changes in the components of AOCI, net of taxes, for the three months ended March 31, 2021:

The following table presents changes in the components of AOCI, net of taxes, for the six months ended June 30, 2021:

Cash Flow Hedge Foreign Currency Items Total

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Balance at December 31, 2020 $ ( 31,587 ) $ ( 145,422 ) $ ( 177,009 )

Other comprehensive income (loss) before reclassifications

Other comprehensive income before reclassifications

9,308 2,007 11,315

Amount reclassified from AOCI 3,862 — 3,862

Net other comprehensive income (loss) 17,012 ( 13,219 ) 3,793

Balance at March 31, 2021 $ ( 14,575 ) $ ( 158,641 ) $ ( 173,216 )

Net other comprehensive income 13,170 2,007 15,177

Balance at June 30, 2021 $ ( 18,417 ) $ ( 143,415 ) $ ( 161,832 )

Earnings Per Share

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The calculation of diluted net loss per common share includes the effects of the assumed exercise of any outstanding stock options, the assumed vesting of shares of restricted and deferred stock awards and the assumed conversion of our convertible senior notes, where dilutive.

For the three months ended March 31, 2021 and 2020, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net loss per common share.

For the three and six months ended June 30, 2021 and 2020, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net loss per common share.

The following table shows securities excluded from the calculation of diluted net loss per common share because such securities are anti-dilutive:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Options to purchase shares of common stock 7,797,075 10,197,507 7,797,075 10,197,507

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Beginning in mid-March 2020, 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 partially a delay in the timing of revenue recognition as many events are being rescheduled to dates later in 2021 or 2022.

For events that have been cancelled as of March 31, 2021, 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 have been or are being rescheduled to dates later in 2021 or 2022.

For events that have been cancelled as of June 30, 2021, 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 March 31, 2021, and applying a venue-specific refund take rate.

The venue-specific refund take rates were based on the refunds we have issued since we ceased all our tours and closed our venues in mid-March 2020 through the end of the current reporting period.

The estimate of future refunds was developed by applying the percentage of future shows we believe could be rescheduled to the deferred revenue balances as of June 30, 2021 for those impacted quarters, and then applying a venue-specific refund take rate.

The venue-specific refund take rates were based on the refunds we have issued since we ceased all our tours and closed our venues in mid-March 2020 through the end of the first quarter of 2021.

For our Ticketing segment, the impact is similar to the Concerts segment if the tickets sold for an event are controlled by our concert promoters.

1 unchanged sentence

The revenue reversal is reflected as accrued expenses on our consolidated balance sheets where not already refunded to the fan.

The timing of our third-party clients’ event cancellations and rescheduling of postponed events versus 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 partially a delay in the timing of revenue recognition due to our concert events being rescheduled, our venues being closed along with the limited number of events currently available for sale on our websites.

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

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 months ended March 31, 2021 and 2020 are as follows:

Concerts revenue, including intersegment revenue, for the three and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

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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 months ended March 31, 2021 and 2020 are as follows:

Ticketing revenue, including intersegment revenue, for the three and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

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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 March 31, 2021 and December 31, 2020, we had ticketing contract advances of $ 64.1 million and $ 63.5 million, respectively, recorded in prepaid expenses and $ 82.6 million and $ 87.0 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 10.6 million and $ 18.8 million for the three months ended March 31, 2021 and 2020, respectively, related to non-recoupable ticketing contract advances.

At June 30, 2021 and December 31, 2020, we had ticketing contract advances of $ 74.1 million and $ 63.5 million, respectively, recorded in prepaid expenses and $ 84.2 million and $ 87.0 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 18.1 million and $ 13.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 28.7 million and $ 32.1 million for the six months ended June 30, 2021 and 2020, respectively, related to non-recoupable ticketing contract advances.

Sponsorship & Advertising

Sponsorship & Advertising revenue, including intersegment revenue, for the three months ended March 31, 2021 and 2020 are as follows:

Sponsorship & Advertising revenue, including intersegment revenue, for the three and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

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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.

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.

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.

We also earn revenue from exclusive access rights provided to sponsors in various categories such as ticket pre-sales, beverage pouring rights, venue naming rights, media campaigns, signage within our venues, and advertising on our websites.

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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 March 31, 2021, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.1 billion of revenue related to future benefits to be provided by us.

At June 30, 2021, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.0 billion of revenue related to future benefits to be provided by us.

We expect to recognize, based on current projections, approximately 22 %, 34 %, 16 % and 28 % of this revenue in the remainder of 2021, 2022, 2023 and thereafter, respectively.

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We had current deferred revenue of $ 1.8 billion and $ 1.4 billion at December 31, 2020 and 2019, respectively.

The table below summarizes the amount of the December 31 current deferred revenue recognized during the three months ended March 31, 2021 and 2020:

The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three and six months ended June 30, 2021 and 2020:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

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$ 26,891 $ 19,227 $ 74,719 $ 309,177

As of March 31, 2021, approximately 68.2 % of the current deferred revenue balance from December 31, 2020 is expected to be recognized in 2021 and thus such amounts remain in current deferred revenue.

In addition, as of March 31, 2021, approximately 4.6 % of the current deferred revenue balance from December 31, 2020 has been or is expected to be refunded to fans as the corresponding events have been cancelled or refunds were or are expected to be requested for rescheduled events, and thus such amounts have been reclassified to accrued expenses if not already refunded.

Our long-term deferred revenue balance has increased as events have been rescheduled into the second and third quarters of 2022 in markets still experiencing impacts from the global COVID-19 pandemic.

We had long-term deferred revenue of $ 294.1 million and $ 88.6 million at March 31, 2021 and December 31, 2020, respectively, which is reflected in other long-term liabilities on the consolidated balance sheets.

As of June 30, 2021, approximately 45.7 % of the current deferred revenue balance from December 31, 2020 is expected to be recognized in 2021 and thus such amounts remain in current deferred revenue.

In addition, as of June 30, 2021, approximately 8.6 % of the current deferred revenue balance from December 31, 2020 has been or is expected to be refunded to fans as the corresponding events have been cancelled or refunds were or are expected to be requested for rescheduled events, and thus such amounts have been reclassified to accrued expenses if not already refunded.

Our long-term deferred revenue balance has increased as events have been rescheduled into the third and fourth quarters of 2022 in markets still experiencing impacts from the global COVID-19 pandemic.

We had long-term deferred revenue of $ 442.1 million and $ 88.6 million at June 30, 2021 and December 31, 2020, respectively, which is reflected in other long-term liabilities on the consolidated balance sheets.

NOTE 10— STOCK-BASED COMPENSATION

The following is a summary of stock-based compensation expense we recorded during the respective periods:

The following is a summary of stock-based compensation expense recorded during the respective periods:

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

(in thousands)

2 unchanged sentences

Total $ 12,830 $ 38,538 $ 52,847 $ 50,270

The increase in stock-based compensation expense for the three months ended March 31, 2021 as compared to the same period of the prior year is primarily due to the issuance of restricted stock awards in late 2020 that vested in the first quarter of 2021.

The decrease in stock-based compensation expense for the three months ended June 30, 2021 as compared to the same period of the prior year is primarily due to the issuance of restricted stock awards in the second quarter of 2020 in lieu of cash payments for certain compensation owed to employees, as part of our cash savings initiative in connection with the global COVID-19 pandemic.

NOTE 11— SEGMENT DATA

Our reportable segments are Concerts, Ticketing and Sponsorship & Advertising.

Our Concerts segment involves the promotion of live music events globally in our owned or operated venues and in rented third-party venues, the production of music festivals, the operation and management of music venues, the creation of associated content and the provision of management and other services to artists.

Our Concerts segment involves the promotion of live music events globally in our owned or operated venues and in rented third-party venues, the production of music festivals, the operation and management of music venues, the creation or streaming of associated content and the provision of management and other services to artists.

Our Ticketing segment involves the management of our global ticketing operations, including providing ticketing software and services to clients, and consumers with a marketplace, both online and mobile, for tickets and event information, and is responsible for our primary ticketing website, www.ticketmaster.com .

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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 months ended March 31, 2021 and 2020:

The following table presents the results of operations for our reportable segments for the three and six months ended June 30, 2021 and 2020:

Concerts Ticketing Sponsorship

1 unchanged sentence

(in thousands)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Revenue $ 286,958 $ 244,001 $ 44,561 $ 815 $ — $ ( 389 ) $ 575,946

2 unchanged sentences

Depreciation and amortization 58,450 34,888 7,507 11 2,791 — 103,647

Gain on disposal of operating assets ( 28 ) — — — — — ( 28 )

Corporate expenses — — — — 27,598 — 27,598

Operating income (loss) $ ( 146,337 ) $ 43,825 $ 5,326 $ 290 $ ( 30,389 ) $ — $ ( 127,285 )

Intersegment revenue $ ( 591 ) $ 980 $ — $ — $ — $ ( 389 ) $ —

Concerts Ticketing Sponsorship

& Advertising Other Corporate Eliminations Consolidated

(in thousands)

Three Months Ended June 30, 2020

Revenue $ 141,823 $ ( 87,019 ) $ 18,372 $ 805 $ — $ 103 $ 74,084

Direct operating expenses 182,217 8,051 4,186 — — 103 194,557

Selling, general and administrative expenses 174,554 127,811 17,783 3,204 — — 323,352

Depreciation and amortization 64,342 44,313 7,620 4,385 2,107 — 122,767

Loss (gain) on disposal of operating assets 561 ( 1 ) — ( 1 ) — — 559

Corporate expenses — — — — 20,916 — 20,916

Operating loss $ ( 279,851 ) $ ( 267,193 ) $ ( 11,217 ) $ ( 6,783 ) $ ( 23,023 ) $ — $ ( 588,067 )

Intersegment revenue $ ( 136 ) $ 33 $ — $ — $ — $ 103 $ —

Six Months Ended June 30, 2021

Revenue $ 526,374 $ 272,323 $ 67,208 $ 1,630 $ — $ ( 980 ) $ 866,555

Direct operating expenses 286,080 77,133 14,853 — — ( 980 ) 377,086

Selling, general and administrative expenses 410,544 200,655 38,799 1,749 — — 651,747

Depreciation and amortization 121,336 71,366 14,671 22 5,128 — 212,523

Loss on disposal of operating assets 110 — — — — — 110

3 unchanged sentences

Capital expenditures $ 30,021 $ 18,472 $ 2,485 $ — $ 3,887 $ — $ 54,865

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Revenue $ 1,135,216 $ 197,258 $ 108,633 $ 1,601 $ — $ ( 2,931 ) $ 1,439,777

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