What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-03-01 · 277 added, 234 removed, 1290 unchanged (28% of the section changed)

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Live Nation Entertainment, Inc.

To the Board of Directors and Stockholders of Live Nation Entertainment, Inc.

Opinion on the Financial Statements

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2021, expressed an unqualified opinion thereon.

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 23, 2022, expressed an unqualified opinion thereon.

Basis for Opinion

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Goodwill - North America Concerts Reporting Unit

Description of the Matter At December 31, 2020, the goodwill recorded in the North America Concerts reporting unit was $287 million.

As discussed in Note 1 to the consolidated financial statements, goodwill is tested by the Company’s management for impairment at least annually at the reporting unit level.

Auditing the Company’s annual goodwill impairment test was complex due to the significant judgment in estimating the fair value of the reporting units when a quantitative assessment of fair value is performed.

In particular, the North America Concerts reporting unit was evaluated using a quantitative assessment to determine whether or not goodwill was impaired.

The fair value estimate for this reporting unit was sensitive to assumptions including the discount rate, revenue growth rates and EBITDA margin which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process.

This includes controls over management’s review of the significant assumptions described above.

To test the estimated fair value of the Company’s North America Concerts reporting unit, we performed audit procedures with the assistance of our valuation specialists that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We compared the significant assumptions used by management to current industry and economic trends.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the North America Concerts reporting unit that would result from changes in the assumptions.

Acquisition of OCESA

Description of the Matter As disclosed in Note 3 to the consolidated financial statements, during the year ended December 31, 2021, the Company completed its acquisition of an aggregate 51% interest in OCESA for $431.9 million.

This transaction was accounted for as a business combination.

The Company allocated the purchase price, on a preliminary basis, to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets of $340 million and resulting goodwill of $443 million.

Auditing the Company’s accounting for its acquisition of OCESA was complex due to the significant estimation utilized by management in developing the valuation models used in the preliminary purchase price allocation.

The significant assumptions utilized included, among others, forecasted revenue growth and discount rate.

These assumptions are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over its accounting for the OCESA acquisition.

For example, we tested controls over the valuation of the identified intangible assets and resulting goodwill, including management’s review of the valuation models, underlying data and assumptions used to develop the estimate of fair value of these assets.

To test the estimated fair value of the identified intangible assets and resulting goodwill, we performed audit procedures that included, among others, evaluating the Company’s selection of the valuation methodologies, evaluating the significant assumptions used in the valuation calculations, and testing the completeness and accuracy of the underlying data supporting the significant assumptions.

We involved our valuation specialists to assist with evaluating the methodology used by management to determine the fair value estimates.

Additionally, we performed sensitivity analyses of the identified significant assumptions and compared them, as applicable, to current industry and market trends, the assumptions used by the Company to value similar assets in other acquisitions, as well as historical results.

/s/ Ernst & Young LLP

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Los Angeles, California

March 1, 2021

February 23, 2022

LIVE NATION ENTERTAINMENT, INC.

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Long-term operating lease liabilities 1,606,064 1,445,674

Long-term deferred income taxes 170,759 178,173

Other long-term liabilities 431,581 353,267

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Accumulated deficit ( 3,327,737 ) ( 2,676,833 )

Cost of shares held in treasury ( 408,024 shares)

( 6,865 ) ( 6,865 )

Cost of shares held in treasury ( 6,865 ) ( 6,865 )

Accumulated other comprehensive loss ( 147,964 ) ( 177,009 )

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Equity in losses (earnings) of nonconsolidated affiliates ( 2,520 ) 5,458 ( 5,457 )

Loss (gain) from sale of investments in nonconsolidated affiliates ( 83,578 ) 1,727 ( 1,119 )

Other expense (income), net 3,692 ( 18,807 ) 3,201

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Net income (loss) attributable to common stockholders of Live Nation $ ( 650,904 ) $ ( 1,724,535 ) $ 69,889

$ ( 1,724,535 ) $ 69,889 $ 60,249

Basic and diluted net loss per common share available to common stockholders of Live Nation $ ( 3.09 ) $ ( 8.12 ) $ ( 0.02 )

$ ( 8.12 ) $ ( 0.02 ) $ ( 0.09 )

Weighted average common shares outstanding:

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Other comprehensive income (loss), net of tax:

Unrealized loss on cash flow hedge ( 36,689 ) — —

Unrealized gain (loss) on cash flow hedge 15,204 ( 36,689 ) —

Realized loss on cash flow hedge 7,825 5,102 —

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Common stock issued under stock plans, net of shares withheld for employee taxes 392,147 5 ( 15,357 ) — — — — ( 15,352 ) —

434,707 4 ( 12,460 ) — — — — ( 12,456 ) —

Exercise of stock options, net of shares withheld for option cost and employee taxes 1,823,809 18 ( 24,345 ) — — — — ( 24,327 ) —

Fair value of convertible debt conversion feature, net of issuance costs

— — 62,639 — — — — 62,639 —

Repurchase of convertible debt conversion feature 28 — ( 92,641 ) — — — — ( 92,641 ) —

Exercise of stock options 910,006 9 14,095 — — — — 14,104 —

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

Acquisitions — — — — — — 137,981 137,981 52,373

Divestitures — — — — — — ( 6,684 ) ( 6,684 ) —

Purchases of noncontrolling interests — — ( 23,878 ) — — — ( 24,867 ) ( 48,745 ) ( 1,459 )

Sales of noncontrolling interests — — 1,410 — — — ( 958 ) 452 —

Redeemable noncontrolling interests fair value adjustments — — ( 74,771 ) — — — — ( 74,771 ) 74,771

— — ( 77,799 ) — — — — ( 77,799 ) 77,799

Contributions received — — — — — — 14,285 14,285 —

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Balances at December 31, 2019 211,262,062 2,113 2,245,619 ( 949,334 ) ( 6,865 ) ( 145,713 ) 318,134 1,463,954 449,498

Cumulative effect of change in accounting principle — — — ( 2,964 ) — — — ( 2,964 ) —

Non-cash and stock-based compensation — — 116,899 — — — — 116,899 —

Common stock issued under stock plans, net of shares withheld for employee taxes 1,382,256 14 ( 37,876 ) — — — — ( 37,862 ) —

392,147 5 ( 15,357 ) — — — — ( 15,352 ) —

Exercise of stock options 910,006 9 14,095 — — — — 14,104 —

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

Exercise of stock options, net of shares withheld for option cost and employee taxes 1,822,670 18 20,952 — — — — 20,970 —

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

Acquisitions — — — — — — 54,378 54,378 23,511

Divestitures — — — — — — 6 6 —

Purchases of noncontrolling interests — — 14,336 — — — ( 3,975 ) 10,361 ( 129,652 )

Sales of noncontrolling interests — — ( 7,667 ) — — — 39,406 31,739 —

Redeemable noncontrolling interests fair value adjustments — — 1,180 — — — — 1,180 ( 1,180 )

— — ( 74,771 ) — — — — ( 74,771 ) 74,771

Contributions received — — — — — — 4,668 4,668 750

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Comprehensive income (loss):

Net income — — — 69,889 — — 33,267 103,156 15,056

Net loss — — — ( 1,724,535 ) — — ( 46,774 ) ( 1,771,309 ) ( 56,481 )

Unrealized loss on cash flow hedge — — — — — ( 36,689 ) — ( 36,689 ) —

Realized loss on cash flow hedge — — — — — 5,102 — 5,102 —

Foreign currency translation adjustments — — — — — 291 — 291 —

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

Cumulative effect of change in accounting principle — — — ( 2,964 ) — — — ( 2,964 ) —

Non-cash and stock-based compensation — — 96,747 — — — — 96,747 —

Common stock issued under stock plans, net of shares withheld for employee taxes 921,186 9 ( 27,707 ) — — — — ( 27,698 ) —

1,382,256 14 ( 37,876 ) — — — — ( 37,862 ) —

Exercise of stock options, net of shares withheld for option cost and employee taxes 1,337,301 13 12,458 — — — — 12,471 —

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

— — 33,347 — — — — 33,347 —

Sale of common shares 5,239,259 53 449,577 — — — — 449,630 —

Acquisitions — — — — — — 21,120 21,120 280,828

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Redeemable noncontrolling interests fair value adjustments — — ( 19,771 ) — — — — ( 19,771 ) 19,771

— — 1,180 — — — — 1,180 ( 1,180 )

Contributions received — — — — — — 21,911 21,911 95

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Comprehensive income (loss):

Net loss — — — ( 1,724,535 ) — — ( 46,774 ) ( 1,771,309 ) ( 56,481 )

Unrealized loss on cash flow hedge — — — — — ( 36,689 ) — ( 36,689 ) —

Net income (loss) — — — ( 650,904 ) — — 50,506 ( 600,398 ) ( 8,388 )

Unrealized gain on cash flow hedge — — — — — 15,204 — 15,204 —

Realized loss on cash flow hedge — — — — — 7,825 — 7,825 —

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Equity in losses (earnings) of nonconsolidated affiliates, net of distributions 11,189 18,280 14,152

Loss (gain) on sale of investments in nonconsolidated affiliates ( 83,578 ) 1,727 ( 1,119 )

Other, net ( 15,333 ) ( 18,472 ) ( 4,908 )

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Purchases and sales of noncontrolling interests, net ( 9,638 ) ( 106,242 ) ( 50,267 )

Proceeds from sale of common stock, net of issuance costs 449,630 — —

Proceeds from exercise of stock options 30,618 30,647 14,104

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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 resulting from the global COVID-19 pandemic, we did not experience our typical seasonality trends in 2020.

We cannot predict when these trends will recommence in the future.

Basis of Presentation and Principles of Consolidation

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

Included in the December 31, 2020 and 2019 cash and cash equivalents balance is $ 673.5 million and $ 837.7 million, respectively, of cash received that includes the face value of tickets sold on behalf of our ticketing clients and their share of service charges (“client cash”), which amounts are to be remitted to these clients.

Included in the December 31, 2021 and 2020 cash and cash equivalents balance is $ 1.3 billion and $ 673.5 million, respectively, of cash received that includes the face value of tickets sold on behalf of our 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.

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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 secure the contract with certain clients and are typically amortized over the life of the contract on a straight-line basis.

Artist advances and ticketing contract advances are reviewed for recoverability whenever circumstances change, such as extended delays in an artist’s touring cycle, a decline in an artist’s tour earnings, lack of events on sale for a ticketing client or a decline in a client’s ticket sales, indicating that the advance may not be recoupable over the term of the agreement.

We review various factors, including past recoupment amounts, timing of an artist’s last tour, expectations of future tours, ticketing clients’ historical ticket sales and expectations of clients’ future ticket sales, to determine if we believe the advance will recoup as expected.

If an advance is not expected to be fully recoupable, a reserve is established to reduce the advance to the amount we expect to recoup.

The reserves are recorded as a component of direct operating expenses in our consolidated statements of operations.

Business Combinations

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

These acquisitions and the related results of operations were not significant on either an individual basis or in the aggregate.

These acquisitions and the related results of operations were not significant on either an individual basis or in the aggregate for the years ended December 31, 2020 and 2019.

Further information regarding our acquisitions for the year ended December 31, 2021 can be found in Note 3—Business Acquisitions.

During 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.

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Examples of such events and circumstances include historical financial performance, industry and market conditions, macroeconomic conditions, reporting unit-specific events, historical results of goodwill impairment testing and the timing of the last performance of a quantitative assessment.

We also considered changes in discount rates, market multiples, carrying value and forecast since the last quantitative test.

If any reporting units are concluded to be more likely than not impaired, or if that conclusion cannot be determined qualitatively, a second step is performed for that reporting unit.

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Some of our lease agreements contain annual rental escalation clauses, as well as provisions for us to pay the related utilities and maintenance.

We have elected to account for the lease components (i.e., fixed payments including rent, parking and real estate taxes) and non-lease components (i.e., common-area maintenance costs) as a single lease component.

We have elected to account for the lease components (i.e., fixed payments including rent and parking) and non-lease components (i.e., common-area maintenance costs) as a single lease component.

Many of our lease agreements contain renewal options that can extend the lease for additional terms typically ranging from one to ten years .

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We record revenue or offset expense for covered business interruptions in the period we determine it is probable we will be compensated for the costs incurred or the applicable contingencies with the insurance company are resolved for lost revenue.

This may result in business interruption insurance recoveries being recorded in a period subsequent to the period the Company experiences lost revenue and/or incurred the expenses from a covered event that are being reimbursed.

For the year ended December 31, 2020, we recorded business interruption insurance recoveries of $ 125.7 million, primarily due to the global COVID-19 pandemic, with roughly half recorded as revenue and half as a reduction to our direct operating and selling, general and administrative expenses.

For the years ended December 31, 2019 and December 31, 2018, business interruption insurance recoveries were not significant.

This may result in business interruption insurance recoveries being recorded in a period subsequent to the period we experience lost revenue and/or incurred the expenses from a covered event that are being reimbursed.

For the years ended December 31, 2021 and 2020, we recorded business interruption insurance recoveries of $ 97.2 million and $ 125.7 million, respectively.

The recoveries in 2020 were primarily due to the global COVID-19 pandemic while the recoveries in 2021 were for a variety of claims.

For the year ended December 31, 2021, business interruption insurance recoveries was primarily recorded as revenue.

For the year ended December 31, 2020, approximately half was recorded as revenue and half as a reduction to our direct operating and selling, general and administrative expenses.

Foreign Currency

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Foreign currency transaction gains and losses are included in the statements of operations and include the impact of revaluation of certain foreign currency denominated net assets or liabilities held internationally.

For the years ended December 31, 2020 and December 31, 2019, we recorded net foreign currency transaction gains of $ 9.0 million and $ 3.2 million, respectively.

For the year ended December 31, 2021, we recorded net foreign currency transaction losses of $ 20.6 million.

For the years ended December 31, 2020 and 2019, we recorded net foreign currency transaction gains of $ 9.0 million and $ 3.2 million, respectively.

We do not currently have significant operations in highly inflationary countries.

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Actual results could differ from those estimates.

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 sheets.

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

In August 2018, the FASB issued guidance that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The amortization period of these implementation costs would include periods covered under renewal options that are reasonably certain to be exercised.

The expense related to the capitalized implementation costs also would be presented in the same consolidated financial statement line item as the hosting fees.

We adopted this guidance prospectively on January 1, 2020.

Adoption of this guidance resulted in expense that would have previously been reported as depreciation and amortization to be reported as selling, general and administrative expenses or corporate expenses within our statements of operations going forward.

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

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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.

We will adopt this guidance on January 1, 2022 using the modified retrospective method and expect to record a cumulative-effect adjustment of $ 60.5 million as a reduction to accumulated deficit in the consolidated balance sheets.

We expect the impact of adoption to also result in a reduction of additional paid-in capital of $ 96.0 million and increases in current portion of long-term debt, net and long-term debt, net of $ 14.7 million and $ 20.8 million, respectively, as a result of reversal of the separation of the convertible debt between debt and equity.

The adoption is not expected to have a material effect on our consolidated statements of operations and consolidated statements of cash flows.

NOTE 2— IMPACT OF THE GLOBAL COVID-19 PANDEMIC

The unprecedented and rapid spread of COVID-19 and the related government restrictions and social distancing measures implemented throughout the world have significantly impacted our live event business.

We initially saw event restrictions in Asia and parts of Europe.

Beginning in March 2020, large public events were cancelled, governmental authorities began imposing restrictions on non-essential activities, and businesses suspended activities around the world.

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.

The unprecedented and rapid spread of COVID-19 and the related government restrictions and social distancing measures implemented throughout the world significantly impacted our business from mid-March 2020 through the first half of this year.

Late in the second quarter, however, we began to see the positive impacts of successful vaccination rollouts in many of our key markets, mainly the United States and United Kingdom, with social distancing restrictions easing and live events resuming.

In the third quarter, we saw a meaningful restart of our operations with outdoor amphitheater events and festivals taking place in the United States and United Kingdom.

The restart of our operations has been executed with careful consideration of the safety and health of our fans, artists and employees through a mix of masking, testing and vaccination protocols at our events, venues and offices around the world.

Operating Results

Our annual results were materially impacted by these necessary actions.

Our overall revenue for the year decreased by 84 % to $ 1.9 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 2020 and low ticket sales for future shows during the same period, along with the impact of ticket refunds and show cancellations.

The revenue recognized in our Concerts segment in 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 December 31, 2020, for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the year 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 $ 102.0 million in Concerts for refunds that may occur in the future for shows we believe may be cancelled or rescheduled based on the limited amount of data available on refunds resulting from the global shutdown of our live events.

This estimate only impacts our financial position as a reclassification from deferred revenue or other long-term liabilities to accrued expenses.

While the first half of the year saw a material impact from the global COVID-19 pandemic, in the second half of the year, ticket sales grew, new sponsor partners were signed and shows began to resume, primarily in the United States and United Kingdom.

Our overall revenue for the year ended December 31, 2021 increased by $ 4.4 billion to $ 6.3 billion as compared to prior year.

The revenue increase during the year was across all of our segments as a result of more events going on sale and occurring globally, along with lower refunds, as compared to prior year.

The increase in revenue during 2021 was primarily in our Concerts and Ticketing segments largely due to the resumption of shows and festivals late in the second quarter of 2021 and continuing throughout the rest of 2021 primarily in the United States and United Kingdom.

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 December 31, 2021 for shows expected to occur in the next 12 months.

Any refunds committed to for shows cancelled or rescheduled during the year ended December 31, 2021 have either been returned to fans or are reflected in accrued expenses on the consolidated balance sheets.

We are no longer estimating future refunds as operations have resumed in our major markets and event cancellations and postponements have declined such that our estimation of future events that could be impacted by the global COVID-19 pandemic would result in an insignificant reclassification from deferred revenue to accrued expenses.

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 December 31, 2022 totaled $ 73.2 million and is reflected in other long-term liabilities on our consolidated balance sheets.

The revenue recognized in our Ticketing segment in 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 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.

The revenue recognized in our Ticketing segment during 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 have been put in place in response to the global COVID-19 pandemic which allow for the issuance of vouchers in place of cash refunds for rescheduled shows, and in some cases for cancelled shows.

The restart of our operations is now well underway in the United States and United Kingdom and we expect the same to happen in other parts of the world as vaccination efforts gain momentum in mainland Europe, Asia-Pacific and Latin America.

The reduction in live events due to the pandemic has had a negative impact on our operating results during the year ended December 31, 2021 and we expect certain markets to continue to be impacted in the first quarter of 2022 as there is still uncertainty on the exact timing and pace of the recovery in certain markets where vaccination efforts are still underway.

NOTE 3— BUSINESS ACQUISITIONS

During 2021, we completed the acquisition of an aggregate 51 % interest in OCESA.

This acquisition was accounted for as a business combination under the acquisition method of accounting.

With the exception of OCESA, all other acquisitions were not material on an individual basis or in the aggregate.

OCESA Acquisition

Description of Transaction

On December 6, 2021, we completed our acquisition of an aggregate 51 % of the capital stock of OCESA (the “Acquisition”) for $ 431.9 million, subject to certain adjustments.

Upon closing of the Acquisition, we and Corporación Interamericana de Entretenimiento, S.A.B.

terminated the then pending International Chamber of Commerce arbitration in connection with the earlier termination of the purchase agreements, and any related litigation was also dismissed.

One of the most prominent live event businesses globally, OCESA has a robust business portfolio in ticketing, sponsorship, food and beverage, merchandise, and venue operation across Mexico and Latin America.

As part of the Acquisition, we also acquired an equity interest in OcesaSeitrack, OCESA’s booking and artist management joint venture;

ICREA, one of Mexico’s special and corporate event specialists;

and Centro Citibanamex, an exhibition and convention center in Mexico City.

We expect the Acquisition to add value and growth to our Concerts, Ticketing and Sponsorship & Advertising segments.

Recording of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary acquisition-date fair value of the identifiable assets acquired, liabilities assumed and noncontrolling interests including goodwill:

Initial Allocation

(in thousands)

Fair value of consideration transferred $ 431,943

Fair value of redeemable noncontrolling interests 280,000

Fair value of noncontrolling interests 7,000

Fair value of pre-existing investment in nonconsolidated affiliates 50,000

Preliminary recognized amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents 113,014

Accounts receivable 89,844

Prepaid expenses 33,070

Other current assets 658

Property, plant and equipment 25,318

Operating lease assets 67,142

Intangible assets 340,000

Investments in nonconsolidated affiliates 30,000

Other long-term assets 36,525

Accounts payable, client accounts ( 13,344 )

Accounts payable ( 12,584 )

Accrued expenses ( 69,583 )

Deferred revenue ( 144,557 )

Current portion of operating lease liabilities ( 9,209 )

Long-term operating lease liabilities ( 57,984 )

Long-term deferred income taxes ( 102,279 )

Goodwill $ 442,912

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The goodwill arising from the Acquisition consists largely of cost savings and new opportunities expected from combining the operations of Live Nation and OCESA.

The anticipated synergies primarily relate to cost efficiencies on promotion, venue and festivals as well as ticketing and sponsorship opportunities.

Of the total amount of preliminary goodwill recognized in connection with the Acquisition, none will be deductible for tax purposes.

Preliminary goodwill of $ 39.0 million, $ 155.6 million and $ 248.3 million has been allocated to the Concerts, Ticketing and Sponsorship & Advertising segments, respectively, as a result of the Acquisition.

Below is a summary of the methodologies and significant assumptions used in estimating the fair value of intangible assets and noncontrolling interests.

Intangible assets — the preliminary fair value of the acquired intangible assets is currently being evaluated using commonly used valuation techniques.

In estimating the fair value of the acquired intangible assets, we utilized the valuation methodology determined to be most appropriate for the individual intangible asset being valued.

The acquired definite-lived intangible assets include the following:

Preliminary Estimated Fair Value Preliminary Estimated Useful Lives (1)

(in thousands) (years)

Client/vendor relationships $ 102,000 5 to 10

Revenue-generating contracts 90,000 4 to 10

Venue management and leaseholds 107,000 10

Trademarks and naming rights 41,000 5 to 10

Total acquired intangible assets $ 340,000

_____________________

(1) Determination of the preliminary estimated useful lives of the individual categories of intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset.

Amortization of intangible assets with definite lives is recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows.

Some of the more significant estimates and assumptions inherent in determining the fair value of the identifiable intangible assets are associated with forecasting cash flows and profitability.

The primary assumptions used were generally based upon the present value of anticipated cash flows discounted at rates ranging from 12 % to 13 %.

Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class.

Noncontrolling interests — The preliminary fair value of the redeemable noncontrolling interests and noncontrolling interests of $ 280.0 million and $ 7.0 million, respectively, were estimated by applying the market approach.

The fair value estimates are based on fair value of consideration transferred, adjustment of 20 % to account for acquisition premium and adjustments of 10 % to 20 % to account for lack of marketability that market participants would consider when estimating the fair value of the individual noncontrolling interests.

Actual and Pro Forma Impact of Acquisition

The revenue, loss from continuing operations and net loss of OCESA that are included in our consolidated statements of operations are not material for the year ended December 31, 2021 since the Acquisition closed on December 6, 2021.

Pro forma results of operations, assuming that OCESA had been acquired on January 1, 2020, for the years ended December 31, 2021 and 2020 were not material to our consolidated statements of operations.

We incurred a cumulative total of $ 12.3 million of acquisition transaction expenses relating to the Acquisition, of which $ 9.0 million, $ 1.1 million and $ 1.2 million are included in selling, general and administrative expenses within our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, respectively.

We are in the process of completing our purchase accounting in accordance with GAAP, whereby the purchase price is allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date.

As we completed the Acquisition in the last month of the year ended December 31, 2021 and given the size of the Acquisition, the purchase accounting should be considered preliminary and is subject to revision based on final determinations of fair value and allocations of purchase price to the identifiable assets and liabilities acquired.

NOTE 4— LONG-LIVED ASSETS

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

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.

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.

Our more significant investments in nonconsolidated affiliates are in the concert event promotion, venue operation or ticketing businesses and these businesses are experiencing similar impacts to their operations, in line with what we are seeing from the pandemic.

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.

We expect that most global tours will resume and larger venues will reopen 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.

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

Property, Plant and Equipment

Our more significant investments in nonconsolidated affiliates are in the concert event promotion, venue operation or ticketing businesses, and these businesses have been experiencing similar impacts to their operations, in line with what we are experiencing as a result of the pandemic.

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

Late in the second quarter of 2021 we began to see the positive impacts of successful vaccination rollouts in many of our key markets, mainly the United States and United Kingdom, with social distancing restrictions easing and live events resuming.

In the third quarter of 2021, we saw a meaningful restart of our operations with outdoor amphitheater events and festivals taking place in both the United States and United Kingdom.

We expect the same to happen in other parts of the world as vaccination efforts gain momentum in mainland Europe, Asia-Pacific and Latin America.

The reduction in live events due to the pandemic has had a negative impact on our operating results for 2021 and we expect certain markets to continue to be impacted in the first quarter of 2022 as there is still uncertainty on the exact timing and pace of the recovery in certain markets where vaccination efforts are still underway.

As our larger venues have reopened and tours have resumed in the United States and United Kingdom and we expect other markets to reopen throughout 2022, we believe the underlying business supporting all of our long-lived assets will begin generating operating income once again.

Property, Plant and Equipment, Net

Property, plant and equipment includes expenditures for the construction of new venues, major renovations to existing buildings or buildings that are being added to our venue network, the development of new ticketing tools and technology enhancements along with the renewal and improvement of existing venues and technology systems, web development and administrative offices.

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Acquisitions—prior year 5,558 — — — — — 5,558

Dispositions — ( 1,932 ) — — — — ( 1,932 )

Foreign exchange

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( 72,066 ) ( 67,918 ) ( 15,599 ) ( 14,944 ) ( 18,758 ) ( 4,152 ) ( 193,437 )

Dispositions — 751 — — — — 751

Foreign exchange

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

Included in the current year acquisition amounts above for 2021 are definite-lived intangible assets primarily associated with the acquisition of OCESA.

Information regarding the preliminary estimated fair value of the acquired OCESA intangible assets can be found in Note 3—Business Acquisitions.

Included in the current year acquisitions amounts above for 2020 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.

Included in the current year acquisitions amount above for 2019 are definite-lived intangible assets primarily associated with the acquisitions of concert promotion businesses located in Canada and Chile, venue management businesses located in the United States and Belgium and a festival promotion business located in Brazil that had been accounted for as an equity investment.

The 2021 and 2020 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:

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(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.

For the years ended December 31, 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 certain of those assets were impaired since the estimated undiscounted operating cash flows associated with those assets were less than their carrying value.

For the year ended December 31, 2021, there were no significant impairment charges.

For the year ended December 31, 2020, we recorded impairment charges of $ 23.6 million as a component of depreciation and amortization primarily related to intangible assets for revenue-generating contracts, venue management and leaseholds and client/vendor relationships in the Concerts segment primarily as a result of the expected impacts from the global COVID-19 pandemic where the useful life of the definite-lived intangible asset was expiring within the near term.

For the year ended December 31, 2019, we recorded impairment charges of $ 26.8 million as a component of depreciation and amortization primarily related to intangible assets for revenue-generating contracts in the Concerts and Sponsorship & Advertising segments.

There were no significant impairment charges recorded in 2018.

See Note 8—Fair Value Measurements for further discussion of the inputs used to determine the fair values.

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These indefinite-lived intangible assets had a carrying value of $ 369.0 million and $ 369.1 million as of December 31, 2021 and 2020, respectively.

We currently have seven reporting units with goodwill balances:

We currently have six reporting units with goodwill balances:

International Concerts, North America Concerts, Artist Management and Artist Services (non-management) within the Concerts segment;

Sponsorship & Advertising;

and International Ticketing and North America Ticketing within the Ticketing segment.

and Global Ticketing.

We review goodwill for impairment annually, as of October 1, using a two-step process:

a qualitative review and a quantitative analysis.

In 2020, both in the interim qualitative reviews and as part of the October 1 annual review, market multiples were not incorporated into our assessments as our current financial metrics do not support use of the market approach as a corroborating approach.

When our business resumes and stabilizes, we will reincorporate the market approach into our fair value methodology.

In 2020, as part of our annual test for impairment, four of our reporting units with goodwill were assessed under the initial qualitative evaluation.

Three of these four reporting units, accounting for approximately 28 % of our goodwill at December 31, 2020, did not advance to the second step.

Considerations included (a) excess of fair values over carrying values in the most recent quantitative analysis performed, (b) discount rates, (c) financial results and (d) sensitivity analyses.

For one of these four reporting units, that accounts for approximately 13 % of our goodwill at December 31, 2020, the qualitative analysis was inconclusive primarily due to the loss of revenue resulting from the current cessation of concerts and an increase in its carrying value.

As such, a quantitative analysis was performed for this reporting unit.

We performed the quantitative analysis using a discounted cash flows methodology, which uses both market-based inputs and internal assumptions.

The remaining three of our reporting units, accounting for approximately 59 % of our goodwill at December 31, 2020, went straight to the second step as part of our policy to perform a quantitative test at least every five years to support future first step qualitative reviews.

No impairment charges were recorded in 2020 and 2019 as a result of our annual test or interim tests when performed.

Based upon the results of the annual test in 2018, we recorded impairment charges of $ 10.5 million related to our Artist Services (non-management) reporting unit.

In 2021, as part of the October 1 annual review, market multiples were not incorporated into our assessments for some reporting units where its current financial metrics do not support use of the market approach as a corroborating approach.

When those businesses stabilizes, we will reincorporate the market approach into their fair value methodology.

In 2021, as part of our annual test for impairment, all of our reporting units with goodwill were assessed under the initial qualitative evaluation and did not advance to the quantitative analysis.

Considerations included excess of fair values over carrying values in the most recent quantitative analysis performed, discount rates, financial results and sensitivity analyses.

We also considered changes in discount rates, market multiples if applicable, carrying value and forecasts since the last time a quantitative test was performed.

One of our reporting units, International Concerts, which accounts for $ 265.9 million of goodwill had a negative carrying value.

No impairment charges were recorded for the years ended December 31, 2021, 2020 and 2019 as a result of our annual test or interim tests when performed.

See Note 8—Fair Value Measurements for discussion of the impairment calculation.

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Acquisitions—prior year ( 1,275 ) ( 3,888 ) 418 ( 4,745 )

Dispositions ( 150 ) — — ( 150 )

Foreign exchange ( 10,989 ) ( 6,126 ) ( 6,730 ) ( 23,845 )

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Net $ 955,088 $ 930,064 $ 705,717 $ 2,590,869

Included in the current year acquisitions amounts above for 2021 is goodwill primarily associated with the acquisition of OCESA.

See Note 3—Business Acquisitions for further discussion.

Included in the current year acquisitions amounts above for 2020 are goodwill primarily associated with the acquisitions of a festival and concert promotion business located in Ireland as well as a merchandise business, a festival promotion business and a concerts streaming business located in the United States.

Included in the prior year acquisitions amount above for 2020 are changes primarily associated with the acquisition of a venue management business located in the United States.

Included in the current year acquisitions amount above for 2019 are goodwill associated with the acquisitions of a concert promotion business located in Canada, venue management businesses located in Belgium and the United States and a festival promotion business located in Brazil that had been accounted for as an equity method investment.

We are in various stages of finalizing our acquisition accounting for recent acquisitions, which 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 the allocation between segments.

Investments in Nonconsolidated Affiliates

During the year ended December 31, 2021, we sold certain investments in nonconsolidated affiliates for $ 110.2 million in cash and noncash consideration resulting in a gain on sale of investments in nonconsolidated affiliates of $ 83.6 million.

During the year ended December 31, 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 and recognized $ 25.0 million in 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 5— LEASES

The significant components of operating lease expense are as follows:

December 31, 2020 Year Ended

December 31, 2019

Year Ended December 31,

(in thousands)

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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 2020 and the majority of those venues have remained closed through December 31, 2020.

As a result, our variable and short-term lease cost has declined during the year ended December 31, 2020 as compared to the previous year.

Our variable and short-term lease cost has increased during the year ended December 31, 2021 as compared to the previous year due to the resumption of concert events and festivals in the second half of 2021.

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

December 31, 2020 Year Ended

December 31, 2019

Year Ended December 31,

(in thousands)

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

December 31, 2020 Year Ended

December 31, 2019

Year Ended December 31,

Weighted average remaining lease term (in years) 13.2 13.9

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These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from January 2022 to June 2030 with lease terms ranging from 2 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.

These lease concessions are not expected to substantially increase our obligations under the respective lease agreements.

Therefore, we have elected to account for these lease concessions as though enforceable rights and obligations for those concessions existed in our lease agreements rather than applying the lease modification guidance as clarified by the FASB.

In response to the impacts we experienced from the global COVID-19 pandemic, we amended certain of our lease agreements for deferral or abatement of fixed rent payments in 2020.

These lease concessions did not substantially increase our obligations under the respective lease agreements.

Therefore, we elected to account for these lease concessions as though enforceable rights and obligations for those concessions existed in our lease agreements as clarified by the FASB rather than applying the lease modification guidance.

NOTE 6— LONG-TERM DEBT

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Senior Secured Credit Facility:

Term loan A $ 395,000 $ —

Term loan B 854,385 938,125

6.5% Senior Secured Notes due 2027 1,200,000 1,200,000

3.75% Senior Secured Notes due 2028 500,000 —

4.75% Senior Notes due 2027 950,000 950,000

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2022 $ 602,325

2024 1,351,867

2026 1,120,579

Thereafter 2,653,844

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All long-term debt without a stated maturity date is considered current and is reflected as maturing in the earliest period shown in the table above.

As discussed below, our 2.5% convertible senior notes due 2023 are redeemable by holders outside of our control beginning in 2022 and thus, are classified in current portion of long-term debt.

See Note 8—Fair Value Measurements for discussion of the fair value measurement of our long-term debt.

Amended Senior Secured Credit Facility

In April and July 2020, we amended our senior secured credit facility and now have (i) a $ 400 million delayed draw term loan A facility, (ii) a $ 950 million term loan B facility, (iii) a $ 500 million revolving credit facility and (iv) a $ 130 million incremental revolving credit facility.

The delayed draw term loan A facility is available to be drawn until October 2021.

In addition, subject to certain conditions, we have the right to increase such facilities by an amount equal to the sum of (x) $ 425 million during the Restricted Period and $ 855 million after the Restricted Period, (y) the aggregate principal amount of voluntary prepayments of the delayed draw term loan A and term loan B and permanent reductions of the revolving credit facility commitments, in each case, other than from proceeds of long-term indebtedness, and (z) except during the Restricted Period, additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the agreement) is no greater than 3.75 x.

In April and July 2020, we amended our senior secured credit facility and now have (i) a $ 400 million term loan A facility, (ii) a $ 950 million term loan B facility, (iii) a $ 500 million revolving credit facility and (iv) a $ 130 million incremental revolving credit facility.

In addition, subject to certain conditions, we have the right to increase such facilities by an amount equal to the sum of (x) $ 425 million during the Restricted Period and $ 855 million after the Restricted Period, (y) the aggregate principal amount of voluntary prepayments of the term loan A and term loan B and permanent reductions of the revolving credit facility commitments, in each case, other than from proceeds of long-term indebtedness, and (z) except during the Restricted Period, additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the agreement) is no greater than 3.75 x.

The combined revolving credit facilities provide for borrowings up to $ 630 million with sublimits of up to (i) $ 150 million for the issuance of letters of credit, (ii) $ 50 million for swingline loans, (iii) $ 300 million for borrowings in Dollars, Euros or British Pounds and (iv) $ 100 million for borrowings in those or one or more other approved currencies.

The amended senior secured credit facility is secured by a first priority lien on substantially all of the tangible and intangible personal property of LNE and LNE’s domestic subsidiaries that are guarantors, and by a pledge of substantially all of the shares of stock, partnership interests and limited liability company interests of our direct and indirect domestic subsidiaries and 65 % of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.

The interest rates per annum applicable to revolving credit facility loans and the delayed draw term loan A under the amended senior secured credit facility are, at our option, equal to either Eurodollar plus 2.25 % or a base rate plus 1.25 %.

The interest rates per annum applicable to revolving credit facility loans and the term loan A under the amended senior secured credit facility are, at our option, equal to either Eurodollar plus 2.25 % or a base rate plus 1.25 %.

The interest rates per annum applicable to the term loan B are, at our option, equal to either Eurodollar plus 1.75 % or a base rate plus 0.75 %.

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We are required to pay a commitment fee of 0.5 % per year on the undrawn portion available under the revolving credit facility and delayed draw term loan A, 1.75 % per year on the undrawn portion available under the incremental revolving credit facility and variable fees on outstanding letters of credit.

For the delayed draw term loan A, we are required to make quarterly payments at a rate ranging from 0.625 % of the original principal amount during the first three years to 1.25 % during the last two years, with the balance due at maturity in October 2024.

For the term loan A, we are required to make quarterly payments increasing over time from $ 2.5 million to $ 5.0 million with the balance due at maturity in October 2024.

For the term loan B, we are required to make quarterly payments of $ 2.4 million with the balance due at maturity in October 2026.

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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 December 31, 2020 and we have not drawn down on the delayed draw term loan A.

Based on our outstanding letters of credit of $ 68.3 million, $ 961.7 million was available for future borrowings from our delayed draw term loan A and revolving credit facilities.

There were no borrowings under the revolving credit facilities as of December 31, 2021.

Based on our outstanding letters of credit of $ 60.1 million, $ 569.9 million was available for future borrowings from our revolving credit facilities.

6.5% Senior Secured Notes Due 2027

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

Interest on the notes is payable semi-annually in cash in arrears on May 15 and November 15 of each year beginning on November 15, 2020, and will mature on May 15, 2027.

Interest on the notes is payable semi-annually in cash in arrears on May 15 and November 15 of each year and the notes will mature on May 15, 2027.

We may redeem some or all of the notes, at any time prior to May 15, 2023, 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.

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The notes are secured by a first priority lien on substantially all of the tangible and intangible personal property of LNE and LNE’s domestic subsidiaries that are guarantors, and by a pledge of substantially all of the shares of stock, partnership interests and limited liability company interests of our direct and indirect domestic subsidiaries and 65 % of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.

3.75% Senior Secured Notes due 2028

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 and began on July 15, 2021, and the notes 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 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.

We must make an offer to redeem the notes at 101 % of their aggregate principal amount, plus accrued and unpaid interest to the repurchase date, if we experience certain defined changes of control.

4.75% Senior Notes Due 2027

In October 2019, we issued $ 950 million principal amount of 4.75 % senior notes due 2027.

At December 31, 2021, we had $ 950 million principal amount of 4.75 % senior notes due 2027.

Interest on the notes is payable semi-annually in cash in arrears on April 15 and October 15 of each year, and will mature on October 15, 2027.

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Interest on the notes is payable semiannually in cash in arrears on May 1 and November 1 of each year, and the notes will mature on November 1, 2024.

In addition, on or after November 1, 2019, we may redeem some or all of the notes at any time at the redemption prices that start at 103.656 % of their principal amount, plus any accrued and unpaid interest to the date of redemption.

In addition, on or after November 1, 2019, we may redeem some or all of the notes at any time at redemption prices starting at 103.656 % of their principal amount, plus any accrued and unpaid interest to the date of redemption.

We must make an offer to redeem the notes at 101 % of their aggregate principal amount, plus accrued and unpaid interest to the repurchase date, if we experience certain defined changes of control.

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The carrying amount of the equity component of the notes is $ 64.0 million, which is treated as a debt discount and the principal amount of the liability component (face value of the notes) is $ 550 million.

As of December 31, 2020, the remaining period for the unamortized debt discount balance of $ 29.1 million was approximately two years and the value of the notes, if converted and fully settled in shares, exceeds the principal amount of the notes by $ 44.1 million.

As of December 31, 2021, the remaining period for the unamortized debt discount balance of $ 14.9 million was approximately one year and the value of the notes, if converted and fully settled in shares, exceeds the principal amount of the notes by $ 417.7 million.

As of December 31, 2021, the effective interest rate on the liability component of the notes was 5.7 %.

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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 December 31, 2020, the remaining period for the unamortized debt discount balance of $ 27.9 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 December 31, 2021, the remaining period for the unamortized debt discount balance of $ 21.1 million was approximately three years and the value of the notes, if converted and fully settled in shares, exceeds the principal amount of the notes by $ 52.3 million.

As of December 31, 2021, the effective interest rate on the liability component of the notes was 4.2 %.

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We recorded a $ 4.5 million loss on extinguishment of debt related to this refinancing.

In March 2018, we issued $ 300 million principal amount of 5.625 % senior notes due 2026, issued $ 550 million principal amount of 2.5 % convertible senior notes due 2023 and amended our senior secured credit facility to reduce the applicable interest rate for the term loan B.

Total gross proceeds of $ 850.0 million from the issuance of the notes were used to repay $ 246.3 million of the outstanding principal amount of our 2.5 % convertible senior notes due 2019, the related repurchase premium of $ 90.4 million on those convertible senior notes and accrued interest and fees of $ 20.8 million, leaving $ 492.5 million in additional cash available for general corporate purposes.

We recorded a $ 2.5 million loss on extinguishment of debt related to this refinancing.

Debt Covenants

Our amended senior secured credit facility contains a number of restrictions that, among other things, require us to satisfy a financial covenant and restrict our and our subsidiaries’ ability to incur additional debt, make certain investments and acquisitions, repurchase our stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of our business, enter into sale-leaseback transactions, transfer and sell material assets, merge or consolidate, and pay dividends and make distributions (with the exception of subsidiary dividends or distributions to the parent company or other subsidiaries on at least a pro-rata basis with any noncontrolling interest partners).

Certain of these restrictions are further limited temporarily by the July 2020 amendment.

Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the credit facility becoming immediately due and payable.

The amended senior secured credit facility agreement has one covenant, measured quarterly, that relates to net leverage.

The July 2020 amendment substitutes the consolidated net leverage ratio covenant with a liquidity covenant (as defined in the agreement) that requires our consolidated liquidity be at least $500 million until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter ending prior to December 31, 2021 so long as such election is made during the last month of such fiscal quarter or within 30 days following the end of such fiscal quarter.

The July 2020 amendment also requires the liquidity covenant to be measured monthly beginning January 31, 2021 until the earlier of (x) November 30, 2021 and (y) the last day of the month before the consolidated net leverage ratio covenant applies.

For fiscal quarters after resumption of the consolidated net leverage covenant, we will be required to maintain a ratio of consolidated total net debt to consolidated EBITDA (both as defined in the amended credit agreement) for the trailing four consecutive quarters of 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, except that calculations of consolidated EBITDA (as defined in the agreement) for the first three fiscal quarters after resumption of the covenant will be substituted with an annualized consolidated EBITDA (as defined in the agreement).

For the avoidance of doubt, the consolidated net leverage covenant will resume for the quarter ended December 31, 2021 at the latest.

The indentures governing our 6.5 % senior secured notes, 4.75 % senior notes, 4.875 % senior notes and 5.625 % senior notes contain covenants that limit, among other things, our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of restricted subsidiaries to make payments to us, merge, consolidate or sell all of our assets, create certain liens, and engage in transactions with affiliates on terms that are not on an arms-length basis.

We are required to maintain a ratio of consolidated total net debt to consolidated EBITDA (both as defined in the amended credit agreement) for the trailing four consecutive quarters of 6.75 x through September 30, 2022 with step downs to 6.25 x on December 31, 2022, 5.75 x on December 31, 2023, 5.50 x on December 31, 2024 and 5.25 x on June 30, 2025 through maturity, except that calculations of consolidated EBITDA (as defined in the agreement) will be substituted with an annualized consolidated EBITDA (as defined in the agreement) through June 30, 2022.

The indentures governing our 6.5 % senior secured notes, 3.75 % senior secured notes, 4.75 % senior notes, 4.875 % senior notes and 5.625 % senior notes contain covenants that limit, among other things, our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of restricted subsidiaries to make payments to us, merge, consolidate or sell all of our assets, create certain liens, and engage in transactions with affiliates on terms that are not on an arms-length basis.

Certain covenants, including those pertaining to incurrence of indebtedness, restricted payments, asset sales, mergers, and transactions with affiliates will be suspended during any period in which the notes are rated investment grade by both rating agencies and no default or event of default under the indenture has occurred and is continuing.

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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 year ended December 31, 2020, we recorded unrealized losses of $ 36.7 million, as a component of other comprehensive loss related to this hedge.

Based on the current interest rate expectations, we estimate that approximately $ 7.7 million of this loss in other comprehensive loss will be reclassified into earnings in the next 12 months as an adjustment to interest expense.

During the year ended December 31, 2021, we recorded unrealized gains of $ 15.2 million, as a component of other comprehensive loss related to this hedge.

Based on the current interest rate expectations, we estimate that approximately $ 6.1 million in other comprehensive loss will be reclassified into earnings in the next 12 months as an adjustment to interest expense.

See Note 8—Fair Value Measurements for further discussion and disclosure of the fair values for this interest rate swap derivative.

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These inputs would be based on the best information available, including our own data.

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis, which are classified on the balance sheets as cash and cash equivalents, other current assets, other current liabilities and other long-term liabilities:

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis, which are classified on the balance sheets as cash and cash equivalents, other current assets, other long-term assets, other current liabilities and other long-term liabilities:

Fair Value Measurements

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— 428 — 428 — 118 — 118

Investments in nonconsolidated affiliates 6,835 — — 6,835 12,688 — — 12,688

Total $ 627,815 $ 428 $ — $ 628,243 $ 295,384 $ 118 $ — $ 295,502

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— — 5,679 5,679 — — 8,183 8,183

Subsidiary equity awards

— — — — — — 7,661 7,661

Contingent consideration

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Fair values for forward currency contracts are based on observable market transactions of spot and forward rates.

The fair value of our investments in nonconsolidated affiliates are based quoted prices in an active market.

The fair value for our interest rate swap is based upon inputs corroborated by observable market data with similar tenors.

Certain third parties have a put option or a subsidiary equity award to sell to us their noncontrolling interest in certain of our subsidiaries and such put option or subsidiary equity award is carried at fair value using Level 3 inputs.

Certain third parties have a put option to sell to us their noncontrolling interest in one of our subsidiaries and such put option is carried at fair value using Level 3 inputs.

The put option is triggered by the occurrence of specific events, one of which is certain to occur, that requires us to buy the noncontrolling interest.

The redemption price for the subsidiary equity award is not at fair value and the equity holder does not bear the risk and rewards of ownership.

The redemption price for both the put option and subsidiary equity award is a variable amount based on a formula linked to historical earnings.

We have recorded a current liability for the put option and subsidiary equity award which are valued based on the historic results of that subsidiary.

The redemption price for the put option is a variable amount based on a formula linked to historical earnings.

We have recorded a current liability for the put option which is valued based on the historic results of that subsidiary.

Changes in the fair value are recorded in selling, general and administrative expenses.

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6.5% Senior Secured Notes Due 2027 $ 1,315,284 $ 1,340,688

3.75% Senior Secured Notes Due 2028 $ 498,380 $ —

4.75% Senior Notes Due 2027 $ 978,358 $ 970,872

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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 years ended December 31, 2020 and 2019:

The following table shows the fair value of our 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 years ended December 31, 2021 and 2020:

Fair Value Fair Value Measurements Using Loss

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(in thousands)

Definite-lived intangible assets, net $ 7,963 $ — $ — $ 7,963 $ 23,630

Investments in nonconsolidated affiliates 50,000 — — 50,000 ( 23,711 )

Definite-lived intangible assets, net $ 7,963 $ — $ — $ 7,963 $ 23,630

During 2021, we recorded a gain related to investments in nonconsolidated affiliates of $ 23.7 million, as a component of other expense, net.

The gain was related to the acquisition of a controlling interest in the ticketing business of OCESA on December 6 2021, which was previously accounted for under the equity method.

To calculate the gain, we remeasured this investment to fair value using a market multiple methodology.

The key inputs in the fair value measurement include a future cash flow projection, including revenue, profit margins, market multiples and adjustment related to discount for lack of marketability.

The key inputs used for this non-recurring fair value measurement are considered Level 3 inputs.

During 2021, there were no significant impairment charges.

During 2020, we recorded impairment charges related to definite-lived intangible assets of $ 23.6 million as a component of depreciation and amortization.

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The key inputs used for these non-recurring fair value measurements are considered Level 3 inputs.

During 2018, in conjunction with our annual impairment test, a goodwill impairment was recorded for the Artist Services (non-management) reporting unit in the Concerts segment in the amount of $ 10.5 million as a component of depreciation and amortization.

We calculated this impairment using a combination of a discounted cash flow methodology, which uses both Level 2 and Level 3 inputs, and a market multiple methodology, which uses primarily Level 2 inputs.

The key inputs include discount rates, market multiples, control premiums, revenue growth and estimates of future financial performance.

See Note 1—The Company and Summary of Significant Accounting Policies and Note 3—Long-Lived Assets for further discussion of our methodology and this impairment.

NOTE 9— COMMITMENTS AND CONTINGENT LIABILITIES

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As of December 31, 2021, we have accrued $ 15.6 million in other current liabilities and $ 5.3 million in other long-term liabilities and, as of December 31, 2020, we had accrued $ 27.5 million in other current liabilities and $ 19.1 million in other long-term liabilities, representing the fair value of these estimated payments.

The last contingency period for which we have an outstanding contingent payment is for the period ending June 2025.

The last contingency period for which we have an outstanding contingent payment is for the period ending July 2026.

See Note 8—Fair Value Measurements for further discussion related to the valuation of these contingent payments.

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Consumer Class Actions

The following putative class action lawsuits were filed against Live Nation and/or Ticketmaster in the United States and Canada:

Ticketmaster LLC (Northern District of Illinois, filed September 2018);

Ticketmaster LLC (Northern District of California, filed September 2018);

Ticketmaster LLC, et al.

(Northern District of California, filed September 2018);

Thompson-Marcial v.

The following putative class action lawsuits were filed against Live Nation and/or Ticketmaster in Canada:

Thompson-Marcial and Smith v.

Ticketmaster Canada Holdings ULC (Ontario Superior Court of Justice, filed September 2018);

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Live Nation Entertainment, Inc., et al.

(Northern District of New York, filed October 2018);

Ticketmaster LLC, et al.

(Central District of California, filed October 2018);

Live Nation Entertainment, Inc., et al.

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

Live Nation Entertainment, Inc., et al.

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

Ticketmaster LLC, et al.

(Central District of California, filed November 2018);

and Niedbalski v.

Ticketmaster LLC, et al.

(Central District of California, filed December 2018).

As of November 2020, each of the consumer class actions filed in the United States had been dismissed with prejudice.

In March 2019, the Dickey lawsuit was dismissed, and the Gaetano lawsuit was voluntarily dismissed with prejudice by the plaintiff in April 2019.

The Ameri lawsuit was dismissed in May 2019, and the Vaccaro lawsuit was dismissed in June 2019.

In June 2020, the Ninth Circuit Court of Appeals affirmed the District Court’s ruling in the Lee lawsuit, compelling arbitration and dismissing the case.

In November 2020, the Messing and Niedbalski lawsuits were dismissed with prejudice.

The remaining Canadian lawsuits make similar factual allegations that Live Nation and/or Ticketmaster LLC engage in conduct that is intended to encourage the resale of tickets on secondary ticket exchanges at elevated prices.

Similar putative class actions were filed in the United States during the same time period, but as of November 2020, each of the lawsuits filed in the United States has been dismissed with prejudice.

The Canadian lawsuits make similar factual allegations that Live Nation and/or Ticketmaster engage in conduct that is intended to encourage the resale of tickets on secondary ticket exchanges at elevated prices.

Based on these allegations, each plaintiff asserts violations of different provincial and federal laws.

Each plaintiff also seeks to represent a class of individuals who purchased tickets on a secondary ticket exchange, as defined in each plaintiff’s complaint.

The Watch complaint also makes claims related to Ticketmaster’s fee display practices on the primary market.

The complaints seek a variety of remedies, including unspecified compensatory damages, punitive damages, restitution, injunctive relief and attorneys’ fees and costs.

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

The McPhee matter is stayed pending the outcome of the Watch matter, and the Thompson-Marcial, Watch, and Gomel cases are in the class certification phase.

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.

The appeals have been fully briefed, and we are awaiting the scheduling of a hearing date.

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.

Further, we do not currently believe that the claims asserted in these lawsuits have merit, and considerable uncertainty exists regarding any monetary damages that will be asserted against us.

We continue to vigorously defend these actions.

CIE Arbitration

In July 2019, Ticketmaster New Ventures, S.

(“TNV”), an indirect wholly-owned subsidiary of LNE, entered into agreements with Corporación Interamericana de Entretenimiento, S.A.B.

(“CIE”) and Grupo Televisa, S.A.B.

(“TV”) to acquire an aggregate 51% interest in OCESA Entretenimiento, S.A.

(“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.

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).

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.

On May 25, 2020, TNV commenced binding arbitration proceedings, seated in New York, New York, before the International Court of Arbitration of the International Chamber of Commerce, seeking a declaratory judgment that it properly terminated the CIE purchase agreement and that any obligations thereunder are excused on the grounds set forth above, among others.

On July 30, 2020, CIE filed its response to TNV’s claims, asserting, among other things, that CIE did not breach its obligation to continue operating the target companies in the ordinary course of business and that no material adverse effect (as that term is defined in the CIE purchase agreement) has occurred, and CIE joined LNE as a party to the arbitration proceedings as a joint obligor under the CIE purchase agreement.

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.

We intend to vigorously defend these claims.

Astroworld Litigation

On November 5, 2021, the Astroworld music festival was held in Houston, Texas.

During the course of the festival, ten members of the audience sustained fatal injuries and others suffered non-fatal injuries.

Following these events, at least 448 civil lawsuits have been filed against Live Nation Entertainment, Inc.

and related entities, asserting insufficient crowd control and other theories, seeking compensatory and punitive damages.

Pursuant to a February 14, 2022 order of the state Multidistrict Litigation Panel, matter 21-1033, the civil cases have been assigned to Judge Kristen Hawkins of the 11th District Court of Harris County, Texas, for oversight of pretrial matters under Texas’s rules governing multidistrict litigation.

We are currently unable to reliably predict the developments in, outcome of, and economic costs and other consequences of pending or future litigation related to these matters.

We will continue to investigate the factual and legal defenses, and evaluate these matters based on subsequent events, new information and future circumstances.

We currently expect that liability insurance can provide sufficient coverage, but at this time there are no assurances of such coverage.

Given that these cases are in the early stages and in light of the uncertainties surrounding them, we do not currently possess sufficient information to determine a range of reasonably possible liability.

Notwithstanding the foregoing, and without admitting liability or wrongdoing, we may incur material liabilities from the 2021 Astroworld event, which could have a material impact on our business, financial condition, results of operations and/or cash flows.

Other Litigation

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We also receive transaction fees from the sports franchise for tickets the sports franchise sells using our ticketing software.

Our Chief Executive Officer became a member of the board of directors of Legends Hospitality Holding Company, LLC (“Legends”) in February 2015.

In 2017, our President assumed this role from the Chief Executive Officer.

Our Chief Executive Officer became a member of the board of Legends Hospitality Holding Company, LLC (“Legends”) in February 2015.

In 2017, our President and Chief Financial Officer assumed this role from the Chief Executive Officer.

Legends provides concession services to certain of our owned or operated amphitheaters.

We receive fees based on concession sales at each of the amphitheaters.

In January 2018, our Chief Executive Officer became a member of the board of directors of Sirius XM Holdings Inc.

In January 2021, our President and Chief Financial Officer resigned as a board member of Legends.

Our Chief Executive Officer is a member of the board of directors of Sirius XM Holdings Inc.

(“Sirius XM”), a satellite radio company that is a subsidiary of Liberty Media.

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Income tax expense (benefit) $ ( 2,481 ) $ ( 28,875 ) $ 66,892

The domestic income (loss) before income taxes was $( 1.5 ) billion, $ 36.1 million and $ 43.5 million for 2020 , 2019 and 2018 , respectively.

The domestic income (loss) before income taxes was $( 401.4 ) million, $( 1.5 ) billion and $ 36.1 million for 2021 , 2020 and 2019 , respectively.

Foreign income (loss) before income taxes was $( 209.9 ) million, $( 374.5 ) million and $ 149.0 million for 2021, 2020 and 2019, respectively.

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During 2021 and 2020, we recorded net deferred tax liabilities of $ 103.5 million and $ 35.3 million, respectively, due principally to differences in financial reporting and tax bases in assets acquired in business combinations.

The increase in intangible assets deferred tax liability is primarily due to the OCESA acquisition.

As of December 31, 2021, we have United States federal, state and foreign deferred tax assets related to net operating loss carryforwards of $ 403.1 million, $ 150.9 million and $ 403.5 million, respectively.

The increase in net operating loss carryforwards is primarily attributed to increases in loss carryforwards during 2020.

The majority of the increase in net operating loss carryforwards are in jurisdictions for which we maintain a full valuation allowance against net deferred tax assets.

Based on current statutory carryforward periods, the operating loss carryforwards will expire on various dates beginning in 2025.

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The differences between statutory rates is also impacted by our Luxembourg affiliates and tax rulings which include the application of a reduced Luxembourg effective rate to the net income before tax resulting from our financing activities in Luxembourg.

Amounts included in United States income inclusions and exclusions include the favorable impact of tax deductions for vesting of restricted stock awards and exercises of stock options partially offset in 2019 and 2018 by unfavorable inclusions for GILTI under the provisions associated with the TCJA.

Amounts included in United States income inclusions and exclusions include the favorable impact of tax deductions for vesting of restricted stock awards and exercises of stock options partially offset in 2019 by unfavorable inclusions for GILTI under the provisions associated with the TCJA.

Nondeductible items for all years presented include the impact of increased nondeductible expenses pursuant to the provisions of the TCJA including nondeductible executive compensation.

The 2020 nondeductible expenses also include adjustments for nondeductible noncontrolling interest.

Nondeductible items in 2018 includes our goodwill impairment for Artist Services (non-management) which was not deductible for income tax purposes.

The change in valuation allowance for each period presented resulted primarily from changes in the income (loss) within jurisdictions with full valuation allowances, including the United States.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

The following table summarizes the activity related to our unrecognized tax benefits:

Year Ended December 31,

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Balance at December 31 $ 21,330 $ 21,732 $ 21,723

In February 2019, the Company reached a settlement agreement with the Canadian taxing authority regarding existing uncertain tax positions.

In February 2019, we reached a settlement agreement with the Canadian taxing authority regarding existing uncertain tax positions.

The gross liability for unrecognized tax benefits primarily decreased in 2019 due to this settlement.

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Common shares issued as reported in the consolidated statement of changes in equity 221,964,734 214,466,988

Unissued retirement eligible restricted stock awards 65,625 —

Unvested restricted stock awards 860,244 1,589,073

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Unvested restricted stock awards and unvested deferred stock awards issued will be reflected in the statements of changes in equity at the time of vesting.

In September 2021, we completed the public offering of 5,239,259 shares of common stock.

A portion of the proceeds of $ 455.3 million were used to pay fees of $ 5.7 million, leaving approximately $ 449.6 million of net proceeds.

We used the net proceeds to fund the acquisition of 51 % of the capital stock of OCESA and any remaining proceeds for general corporate purposes.

During 2021, 2020 and 2019, we issued 2.3 million, 3.2 million and 1.3 million shares, respectively, of common stock in connection with stock option exercises and vesting of restricted stock awards.

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Balance at December 31, 2018 $ — $ ( 145,231 ) $ ( 145,231 )

Other comprehensive income before reclassifications — ( 36,689 ) ( 36,689 )

Amount reclassified from AOCI — — —

Net other comprehensive income — ( 36,689 ) ( 36,689 )

Balance at December 31, 2018 — ( 145,231 ) ( 145,231 )

Other comprehensive loss before reclassifications — ( 482 ) ( 482 )

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

Other comprehensive income before reclassifications 15,204 6,016 21,220

Amount reclassified from AOCI 7,825 — 7,825

Net other comprehensive income 23,029 6,016 29,045

Balance at December 31, 2021 $ ( 8,558 ) $ ( 139,406 ) $ ( 147,964 )

See Note 8—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.

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The global COVID-19 pandemic has significantly impacted the recognition of revenue for our Concerts, Ticketing and Sponsorship & Advertising segments.

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.

In the third quarter of 2021, we saw a meaningful restart of our operations with outdoor amphitheater events and festivals taking place in both the United States and United Kingdom.

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 2022.

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For certain of our rescheduled events, we are offering a limited refund window for fans to request a refund.

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 December 31, 2020, 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.

Where a fan has elected to receive a refund for a rescheduled event, the deferred revenue has been reclassified to accrued expenses if not already refunded.

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.

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As of December 31, 2021, approximately 49.1 % of the current deferred revenue balance from December 31, 2020 is expected to be recognized in 2022 and thus such amounts remain in current deferred revenue.

In addition, as of December 31, 2020, approximately 32.7 % 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 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.

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.

In addition, as of December 31, 2021, approximately 13.7 % of the current deferred revenue balance from December 31, 2020 has been refunded to fans as the corresponding events have cancelled or refunds were 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 2023 in markets still experiencing severe impacts from the global COVID-19 pandemic.

We had long-term deferred revenue of $ 116.7 million, $ 88.6 million and $ 34.4 million at December 31, 2021, 2020 and 2019, respectively, which is reflected in other long-term liabilities on the consolidated balance sheets.

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Total $ 209,337 $ 116,889 $ 48,785

The increase in stock-based compensation expense for the year ended December 31, 2020 is primarily due to the issuance of restricted stock awards in 2020 in lieu of cash payments due for bonuses earned in 2019 owed to certain employees, as part of our cash savings initiative in connection with the global COVID-19 pandemic.

As of December 31, 2021, there was $ 53.2 million of total unrecognized compensation cost related to stock-based compensation arrangements for stock options, restricted stock and deferred stock awards.

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Upon share option exercise or vesting of restricted or deferred stock, we issue new shares or treasury shares to fulfill these grants.

Vesting dates on the stock options range from February 2021 to May 2024, and expiration dates range from July 2021 to December 2030 at exercise prices and average contractual lives as follows:

Vesting dates on the stock options range from February 2022 to March 2025, and expiration dates range from January 2022 to March 2031 at exercise prices and average contractual lives as follows:

Prices Outstanding

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In addition, certain restricted stock awards require us or the recipient to achieve minimum performance targets in order for these awards to vest.

In 2020, we granted 2.1 million shares of restricted stock and 0.3 million shares of performance-based awards, respectively, under our stock incentive plan.

These awards will all vest over 3 months to four years with the exception of the performance-based awards which will vest within two years if the performance criteria are met.

As of December 31, 2020, we determined that the performance-based criteria for these awards were not probable of being met and such awards will be forfeited in 2021.

In 2021, we granted 0.8 million shares of restricted stock under our stock incentive plan.

These awards will all vest on the grant date or over a period of six months to four years .

In 2020, we granted 2.1 million shares of restricted stock and 0.3 million shares of performance-based awards, respectively, under our stock incentive plan.

These awards will all vest over one or four years with the exception of the performance-based awards which will vest within two years if the performance criteria are met.

As of December 31, 2020, the performance-based criteria for these awards have been met unless otherwise forfeited.

These awards will all vest over a period of three months to four years with the exception of the performance-based awards which will vest within two years if the performance criteria are met.

As of December 31, 2021, the performance-based criteria for these awards were not met and such awards were forfeited.

In 2019, we granted 0.2 million shares of restricted stock and 0.2 million shares of performance-based awards, respectively, under our stock incentive plans.

These awards will all vest over one or four years with the exception of the performance-based awards which will vest within one to two years if the performance criteria are met.

These awards will all vest over a period of one or four years with the exception of the performance-based awards which will vest within two years if the performance criteria are met.

As of December 31, 2021, the performance-based criteria for these awards have been met unless otherwise forfeited.

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Deferred Stock

We have granted deferred stock awards to our employees where the employees are entitled to receive shares of common stock in the future.

We granted deferred stock awards to our employees where the employees are entitled to receive shares of common stock in the future.

Deferred stock can only be settled in stock as determined at the time of the grant.

All of the deferred stock awards require us to achieve minimum market conditions in order for these awards to issue and vest.

In 2017, we granted 2.5 million shares of deferred stock awards with market conditions under our incentive plan.

These awards will all vest over one to five years if specified stock prices are achieved over a specific number of days during the five years .

In 2020, 2019 and 2018, we achieved minimum market conditions resulting in the issuance of 0.8 million shares, 1.5 million shares and 0.2 million shares of restricted stock, respectively, subject to vesting over one to four years .

In 2020 and 2019, we achieved minimum market conditions resulting in the issuance of 0.8 million shares and 1.5 million shares of restricted stock, respectively, subject to vesting over one to four years .

As of December 31, 2021, there were no deferred stock awards outstanding for which the minimum market conditions have not been met.

The following table presents a summary of the Company’s unvested deferred stock awards outstanding at December 31, 2020, 2019 and 2018 (“Price” reflects the weighted average grant date fair value):

The following table presents a summary of our unvested deferred stock awards outstanding at December 31, 2021, 2020 and 2019 (“Price” reflects the weighted average grant date fair value):

Deferred Stock

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The following details the components of “Other long-term liabilities”:

Deferred income taxes $ 236,549 $ 170,759

Deferred revenue 116,682 88,641

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Long-lived assets $ 77,084 $ 186,265 $ 263,349 $ 854,583 $ 1,117,932

NOTE 16— SUBSEQUENT EVENT

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.

The proceeds were used to pay estimated fees of $ 8.0 million and repay $ 75.0 million aggregate principal amount of the Company’s senior secured term loan B facility, leaving approximately $ 417.0 million for general corporate purposes, including acquisitions and organic investment opportunities.

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.

We must make an offer to redeem the notes at 101 % of their aggregate principal amount, plus accrued and unpaid interest to the repurchase date, if we experience certain defined changes of control.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data