What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 191 added, 114 removed, 472 unchanged (39% of the section changed)

16 unchanged sentences

Definite-lived intangible assets, net 964,406 1,026,338

Indefinite-lived intangible assets 368,943 369,028

Indefinite-lived intangible assets, net 414,700 369,028

Goodwill 2,563,119 2,590,869

31 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands except share and per share data)

4 unchanged sentences

Depreciation and amortization 115,927 103,647 216,396 212,523

Loss on disposal of operating assets 1,665 138

Loss (gain) on disposal of operating assets 1,065 ( 28 ) 2,730 110

Corporate expenses 59,247 27,598 91,657 55,546

2 unchanged sentences

Interest income ( 13,192 ) ( 1,471 ) ( 20,756 ) ( 2,620 )

Equity in earnings of nonconsolidated affiliates ( 4,288 ) ( 581 )

Equity in losses (earnings) of nonconsolidated affiliates ( 1,955 ) 2,998 ( 6,243 ) 2,417

Loss (gain) from sale of investments in nonconsolidated affiliates ( 580 ) 993 ( 448 ) ( 52,947 )

Other expense (income), net 9,267 ( 6 )

Loss before income taxes ( 37,260 ) ( 316,333 )

Other expense, net 5,619 9,461 14,886 7,462

Income (loss) before income taxes 260,372 ( 208,175 ) 223,112 ( 524,508 )

Income tax expense 31,995 2,285 43,691 8,674

Net loss ( 48,956 ) ( 322,722 )

Net income (loss) 228,377 ( 210,460 ) 179,421 ( 533,182 )

Net income (loss) attributable to noncontrolling interests 40,577 ( 14,795 ) 41,803 ( 30,324 )

Net loss attributable to common stockholders of Live Nation $ ( 50,182 ) $ ( 307,193 )

Basic and diluted net loss per common share available to common stockholders of Live Nation $ ( 0.39 ) $ ( 1.44 )

Net income (loss) attributable to common stockholders of Live Nation $ 187,800 $ ( 195,665 ) $ 137,618 $ ( 502,858 )

Basic net income (loss) per common share available to common stockholders of Live Nation $ 0.69 $ ( 0.90 ) $ 0.31 $ ( 2.34 )

Diluted net income (loss) per common share available to common stockholders of Live Nation $ 0.66 $ ( 0.90 ) $ 0.30 $ ( 2.34 )

Weighted average common shares outstanding:

Basic and diluted 221,890,625 214,531,958

Reconciliation to net loss available to common stockholders of Live Nation:

Net loss attributable to common stockholders of Live Nation

Basic 224,674,447 215,702,508 223,290,226 215,120,467

Diluted 243,634,764 215,702,508 231,367,674 215,120,467

Reconciliation to net income (loss) available to common stockholders of Live Nation:

Net income (loss) attributable to common stockholders of Live Nation

$ 187,800 $ ( 195,665 ) $ 137,618 $ ( 502,858 )

Accretion of redeemable noncontrolling interests ( 32,560 ) 951 ( 68,274 ) 35

Basic and diluted net loss available to common stockholders of Live Nation

Net income (loss) available to common stockholders of Live Nation—basic

$ 155,240 $ ( 194,714 ) $ 69,344 $ ( 502,823 )

Convertible debt interest, net of tax 6,365 — — —

Net income (loss) available to common stockholders of Live Nation—diluted

$ 161,605 $ ( 194,714 ) $ 69,344 $ ( 502,823 )

See Notes to Consolidated Financial Statements

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

Net loss $ ( 48,956 ) $ ( 322,722 )

Net income (loss) $ 228,377 $ ( 210,460 ) $ 179,421 $ ( 533,182 )

Other comprehensive income (loss), net of tax:

Unrealized gain on cash flow hedge 23,969 15,096

Unrealized gain (loss) on cash flow hedge 7,687 ( 5,788 ) 31,656 9,308

Realized loss on cash flow hedge 1,247 1,946 3,149 3,862

11 unchanged sentences

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

Balances at March 31, 2022 223,531,301 $ 2,235 $ 2,888,551 $ ( 3,317,397 ) $ ( 6,865 ) $ ( 84,341 ) $ 372,200 $ ( 145,617 ) $ 581,652

Non-cash and stock-based compensation — — 13,221 — — — — 13,221 —

Common stock issued under stock plans, net of shares withheld for employee taxes 544,593 6 ( 5,169 ) — — — — ( 5,163 ) —

Exercise of stock options 1,505,385 15 13,287 — — — — 13,302 —

Acquisitions — — — — — — 4,782 4,782 3,023

Purchases of noncontrolling interests — — ( 20,846 ) — — — ( 4,774 ) ( 25,620 ) ( 1,457 )

Redeemable noncontrolling interests fair value adjustments — — ( 33,020 ) — — — — ( 33,020 ) 32,560

Contributions received — — — — — — 9,190 9,190 —

Cash distributions — — — — — — ( 18,162 ) ( 18,162 ) ( 8,986 )

Other — — ( 2,411 ) — — — 46,449 44,038 ( 46,868 )

Comprehensive income (loss):

Net income — — — 187,800 — — 35,477 223,277 5,100

Unrealized gain on cash flow hedge — — — — — 7,687 — 7,687 —

Realized loss on cash flow hedge — — — — — 1,247 — 1,247 —

Foreign currency translation adjustments — — — — — ( 54,164 ) — ( 54,164 ) —

Balances at June 30, 2022 225,581,279 $ 2,256 $ 2,853,613 $ ( 3,129,597 ) $ ( 6,865 ) $ ( 129,571 ) $ 445,162 $ 34,998 $ 565,024

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

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

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

Balances at December 31, 2021 221,964,734 $ 2,220 $ 2,897,695 $ ( 3,327,737 ) $ ( 6,865 ) $ ( 147,964 ) $ 394,197 $ ( 188,454 ) $ 551,921

11 unchanged sentences

Comprehensive income (loss):

Net income (loss) — — — ( 50,182 ) — — 4,651 ( 45,531 ) ( 3,425 )

Net income — — — 137,618 — — 40,128 177,746 1,675

Unrealized gain on cash flow hedge — — — — — 31,656 — 31,656 —

1 unchanged sentence

Foreign currency translation adjustments — — — — — ( 16,412 ) — ( 16,412 ) —

Balances at June 30, 2022 225,581,279 $ 2,256 $ 2,853,613 $ ( 3,129,597 ) $ ( 6,865 ) $ ( 129,571 ) $ 445,162 $ 34,998 $ 565,024

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

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

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

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

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

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

Acquisitions — — — — — — — — 598

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

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

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

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

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

Comprehensive loss:

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

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

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

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

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

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

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

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

2 unchanged sentences

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

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

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

Acquisitions — — — — — — — — 598

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

9 unchanged sentences

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

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

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

See Notes to Consolidated Financial Statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ ( 48,956 ) $ ( 322,722 )

Net income (loss) $ 179,421 $ ( 533,182 )

Reconciling items:

3 unchanged sentences

Amortization of debt issuance costs and discounts 8,224 18,373

Non-cash compensation expense 49,241 40,017

Stock-based compensation expense 61,741 52,847

Unrealized changes in fair value of contingent consideration 18,010 ( 8,040 )

Loss (gain) on sale of investments in nonconsolidated affiliates 132 ( 53,899 )

Equity in losses (earnings) of nonconsolidated affiliates, net of distributions 10,112 10,002

Provision for uncollectible accounts receivable 25,702 ( 16,563 )

Gain on sale of investments in nonconsolidated affiliates ( 448 ) ( 52,947 )

Other, net 10,033 9,847

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

Decrease (increase) in accounts receivable ( 152,725 ) 21,861

Decrease (increase) in prepaid expenses and other assets ( 338,017 ) 4,704

Increase (decrease) in accounts payable, accrued expenses and other liabilities 236,584 ( 39,044 )

Increase in accounts receivable ( 440,290 ) ( 143,343 )

Increase in prepaid expenses and other assets ( 607,939 ) ( 102,554 )

Increase in accounts payable, accrued expenses and other liabilities 972,906 518,810

Increase in deferred revenue 1,053,178 1,175,690

6 unchanged sentences

Cash paid for acquisitions, net of cash acquired ( 39,854 ) ( 7,627 )

Purchases of intangible assets ( 6,129 ) ( 11,191 )

Proceeds from sale of investments in nonconsolidated affiliates 1,204 61,618

Other, net ( 3,496 ) 912

Net cash provided by (used in) investing activities ( 114,953 ) 10,108

Net cash used in investing activities ( 244,736 ) ( 50,295 )

CASH FLOWS FROM FINANCING ACTIVITIES

3 unchanged sentences

Distributions to noncontrolling interests ( 66,114 ) ( 14,542 )

Purchases and sales of noncontrolling interests, net ( 27,138 ) ( 3,273 )

Proceeds from exercise of stock options 26,051 28,083

Taxes paid for net share settlement of equity awards ( 41,731 ) ( 38,209 )

Payments for deferred and contingent consideration ( 22,508 ) ( 11,926 )

Other, net ( 1,014 ) 105

13 unchanged sentences

The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2021 Annual Report on Form 10-K filed with the SEC on February 23, 2022.

Our Concerts and Sponsorship & Advertising segments typically experience higher revenue and operating income in the second and third quarters as our outdoor venues and festivals are primarily used in or occur from May through October in certain major markets.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals, acquisition accounting and impairments.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.

Actual results could differ from those estimates.

Our Concerts and Sponsorship & Advertising segments typically experience higher revenue and operating income in the second and third quarters as our outdoor venue concerts and festivals primarily occur from May through October in most major markets.

In addition, the timing of when tickets are sold and the tours of top-grossing acts can impact comparability of quarterly results year over year, although annual results may not be impacted.

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

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

Cash flows from our Concerts segment typically have a slightly different seasonality as payments are often made for artist performance fees and production costs for tours in advance of the date the related event tickets go on sale.

6 unchanged sentences

We expect our seasonality trends to return to normal in 2022 as events in our major markets resumed late in the second quarter of 2021.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.

Our cash and cash equivalents include domestic and foreign bank accounts as well as interest-bearing accounts consisting primarily of bank deposits and money market accounts managed by third-party financial institutions.

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

Included in the March 31, 2022 and December 31, 2021 cash and cash equivalents balance is $ 1.5 billion and $ 1.3 billion, 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.

Cash and Cash Equivalents

Included in the June 30, 2022 and December 31, 2021 cash and cash equivalents balance is $ 1.4 billion and $ 1.3 billion, 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.

These amounts due to our clients are included in accounts payable, client accounts.

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

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

Cash held in interest-bearing operating accounts in many cases exceeds the Federal Deposit Insurance Corporation insurance limits.

To reduce our credit risk, we monitor the credit standing of the financial institutions that hold our cash and cash equivalents;

however, these balances could be impacted in the future if the underlying financial institutions fail.

To date, we have experienced no loss or lack of access to our cash or cash equivalents;

however, we can provide no assurances that access to our cash and cash equivalents will not be impacted in the future by adverse conditions in the financial markets.

Nonconsolidated Affiliates

In general, nonconsolidated investments in which we own more than 20% of the common stock or otherwise exercise significant influence over an affiliate are accounted for under the equity method.

We review the value of equity method investments and record impairment charges in the statements of operations for any decline in value that is determined to be other-than-temporary.

If we obtain control of a nonconsolidated affiliate through the purchase of additional ownership interest or changes in the governing agreements, we remeasure our investment to fair value first and then apply the accounting guidance for business combinations.

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

At March 31, 2022 and December 31, 2021, we had investments in nonconsolidated affiliates of $ 318.1 million and $ 293.6 million, respectively, included in other long-term assets on our consolidated balance sheets.

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

As of March 31, 2022, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses.

As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first three months of 2022.

As of June 30, 2022, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses.

As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first six months of 2022.

Accounting Pronouncements - Adopted

16 unchanged sentences

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, concession, 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.

OCESA is one of the most prominent live event businesses globally with a robust business portfolio in ticketing, sponsorship, concession, merchandise, and venue operation across Mexico and Latin America.

We expect the Acquisition to add value and growth to all of our reporting segments.

Recording of Assets Acquired and Liabilities Assumed

3 unchanged sentences

Fair value of consideration transferred $ 431,943

Adjustments for working capital 2,269

Fair value of redeemable noncontrolling interests 280,000

45 unchanged sentences

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.

The revenue, loss from continuing operations and net loss of OCESA that are included in our consolidated statements of operations were 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 $ 12.5 million of acquisition transaction expenses relating to the Acquisition, of which $ 0.2 million and $ 0.6 million are included in selling, general and administrative expenses within our consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively.

We incurred a cumulative total of $ 13.1 million of acquisition transaction expenses relating to the Acquisition, of which $ 0.8 million and $ 0.7 million are included in selling, general and administrative expenses within our consolidated statements of operations for the six months ended June 30, 2022 and 2021, 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.

3 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(in thousands)

7 unchanged sentences

Definite-lived Intangible Assets

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the three months ended March 31, 2022:

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the six months ended June 30, 2022:

relationships Revenue-

21 unchanged sentences

Net change ( 32,154 ) ( 20,918 ) ( 10,156 ) ( 9,049 ) ( 38 ) ( 3,113 ) ( 75,428 )

Balance as of March 31, 2022:

Balance as of June 30, 2022:

Gross carrying amount

5 unchanged sentences

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

Included in the current year acquisitions amounts above are definite-lived intangible assets primarily associated with the acquisitions of a sports management business and a venue management business, both located in the United States, as well as a festival promotion business located in Australia.

The 2022 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:

Revenue-generating contracts 4

Client/vendor relationships 4

1 unchanged sentence

All categories 11

Amortization of definite-lived intangible assets for the three months ended March 31, 2022 and 2021 was $ 49.7 million and $ 51.9 million, respectively.

Amortization of definite-lived intangible assets for the three months ended June 30, 2022 and 2021 was $ 52.6 million and $ 48.6 million, and for the six months ended June 30, 2022 and 2021 was $ 102.3 million and $ 100.5 million, respectively.

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

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the three months ended March 31, 2022:

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the six months ended June 30, 2022:

Concerts Ticketing Sponsorship

9 unchanged sentences

Foreign exchange ( 25,039 ) ( 5,000 ) ( 1,871 ) ( 31,910 )

Balance as of March 31, 2022:

Balance as of June 30, 2022:

Goodwill 1,373,496 930,928 694,058 2,998,482

3 unchanged sentences

Investments in Nonconsolidated Affiliates

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

During the three months ended March 31, 2022, there were no significant sales of investments in nonconsolidated affiliates.

At June 30, 2022 and December 31, 2021, we had investments in nonconsolidated affiliates of $ 327.5 million and $ 293.6 million, respectively, included in other long-term assets on our consolidated balance sheets.

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

During the six months ended June 30, 2022, there were no significant sales of investments in nonconsolidated affiliates.

We entered into certain agreements whereby we received equity in the counterparty to those agreements primarily in exchange for providing sponsorship and marketing programs and support.

We recognized $ 3.8 million and $ 25.0 million of noncash additions to investments in nonconsolidated affiliates for the six months ended June 30, 2022 and 2021, respectively, which are included in other long-term assets on our consolidated balance sheets associated with these agreements.

NOTE 4— LEASES

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

6 unchanged sentences

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

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Lease assets obtained in exchange for lease obligations, net of terminations $ 185,119 $ 41,005

Future maturities of our operating lease liabilities at March 31, 2022 are as follows:

Future maturities of our operating lease liabilities at June 30, 2022 are as follows:

(in thousands)

April 1 - December 31, 2022 $ 166,639

July 1 - December 31, 2022 $ 120,991

Thereafter 1,637,720

3 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Weighted average remaining lease term (in years) 13.3 13.2

Weighted average discount rate 5.97 % 6.10 %

As of March 31, 2022, we have additional operating leases that have not yet commenced, with total lease payments of $ 184.2 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from April 2022 to June 2030, with lease terms ranging from 2 to 27 years.

As of June 30, 2022, we have additional operating leases that have not yet commenced, with total lease payments of $ 219.8 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 2022 to June 2030, with lease terms ranging from 1 to 27 years.

NOTE 5— FAIR VALUE MEASUREMENTS

1 unchanged sentence

Estimated Fair Value

March 31, 2022

June 30, 2022

December 31, 2021

2 unchanged sentences

Cash equivalents $ 1,023,325 $ — $ 1,023,325 $ 620,980 $ — $ 620,980

Interest rate swap — 26,247 26,247 — — —

Interest rate swap $ — $ — $ — $ — $ 8,558 $ 8,558

Cash equivalents consist of money market funds.

Fair values for cash equivalents are based on 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.

Our outstanding debt held by third-party financial institutions is carried at cost, adjusted for any discounts or debt issuance costs.

2 unchanged sentences

Estimated Fair Value at

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(in thousands)

8 unchanged sentences

NOTE 6— COMMITMENTS AND CONTINGENT LIABILITIES

As of June 30, 2022, we have non-cancelable contracts related to minimum performance payments with various artists, other event-related costs and nonrecoupable ticketing contract advances of approximately $ 3.9 billion.

Consumer Class Actions

12 unchanged sentences

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.

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.

3 unchanged sentences

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.

The hearing on the appeal will take place in November 2022.

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.

13 unchanged sentences

NOTE 7— EQUITY

Accumulated Other Comprehensive Loss

The following table presents changes in the components of AOCI, net of taxes, for the three months ended March 31, 2022:

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in the components of AOCI, net of taxes, for the six months ended June 30, 2022:

Cash Flow Hedge Foreign Currency Items Total

5 unchanged sentences

Net other comprehensive income 34,805 ( 16,412 ) 18,393

Balance at March 31, 2022 $ 17,313 $ ( 101,654 ) $ ( 84,341 )

Balance at June 30, 2022 $ 26,247 $ ( 155,818 ) $ ( 129,571 )

Earnings Per Share

Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period.

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

For the three months ended March 31, 2022 and 2021, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net loss per common share.

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

Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

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

The following table sets forth the computation of weighted average common shares outstanding:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Weighted average common shares—basic 224,674,447 215,702,508 223,290,226 215,120,467

Effect of dilutive securities:

Stock options and restricted stock 7,096,282 — 8,077,448 —

Convertible senior notes 11,864,035 — — —

Weighted average common shares—diluted 243,634,764 215,702,508 231,367,674 215,120,467

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

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Options to purchase shares of common stock 3,750 7,797,075 3,750 7,797,075

2 unchanged sentences

Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding 262,950 22,668,142 12,079,707 22,668,142

Restricted Stock

Subsequent to June 30, 2022, we granted 1.1 million shares of performance-based awards, which will vest and be settled in restricted shares under the Company’s stock incentive plan during the performance period.

The actual number of restricted shares earned will vest within three years if the performance criteria are met.

NOTE 8— REVENUE RECOGNITION

The global COVID-19 pandemic significantly impacted revenue for our Concerts, Ticketing and Sponsorship & Advertising segments during 2021.

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.

As we moved into 2022, more of our larger markets began resuming shows with the exception of some of our Asia-Pacific markets who continued to experience disruptions from COVID-19 variants.

Concerts revenue, including intersegment revenue, for the three months ended March 31, 2022 and 2021 are as follows:

The global COVID-19 pandemic significantly impacted revenue for our Concerts, Ticketing and Sponsorship & Advertising segments for the three and six ended June 30, 2021.

As we moved into 2022, more of our larger markets resumed shows and beginning in the second quarter of 2022, all markets re-opened without restrictions, with the exception of certain Asia-Pacific markets who continue to experience disruptions from COVID-19 variants.

Concerts revenue, including intersegment revenue, for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

8 unchanged sentences

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

Ticketing revenue, including intersegment revenue, for the three months ended March 31, 2022 and 2021 are as follows:

Ticketing revenue, including intersegment revenue, for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

2 unchanged sentences

Ticket fee revenue is generated from convenience and order processing fees, or service charges, charged at the time a ticket for an event is sold in either the primary or secondary markets.

Our Ticketing segment is primarily an agency business that sells tickets for events on behalf of its clients, which include venues, concert promoters, professional sports franchises and

leagues, college sports teams, theater producers and museums.

Our Ticketing segment is primarily an agency business that sells tickets for events on behalf of its clients, which include venues, concert promoters, professional sports franchises and leagues, college sports teams, theater producers and museums.

Our Ticketing segment records revenue arising from the portion of convenience and order processing fees it retains, regardless of whether these fees are related to tickets sold in the primary or secondary market, and regardless of whether these fees are associated with our concert events or third-party clients’ concert events.

11 unchanged sentences

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

At March 31, 2022 and December 31, 2021, we had ticketing contract advances of $ 87.6 million and $ 90.5 million, respectively, recorded in prepaid expenses and $ 97.5 million and $ 86.5 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 18.5 million and $ 10.6 million for the three months ended March 31, 2022 and 2021, respectively, related to non-recoupable ticketing contract advances.

At June 30, 2022 and December 31, 2021, we had ticketing contract advances of $ 76.7 million and $ 90.5 million, respectively, recorded in prepaid expenses and $ 92.7 million and $ 86.5 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 21.9 million and $ 18.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 40.4 million and $ 28.7 million for the six months ended June 30, 2022 and 2021, respectively, related to non-recoupable ticketing contract advances.

Sponsorship & Advertising

Sponsorship & Advertising revenue, including intersegment revenue, for the three months ended March 31, 2022 and 2021 are as follows:

Sponsorship & Advertising revenue, including intersegment revenue, for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

9 unchanged sentences

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

At March 31, 2022, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.2 billion of revenue related to future benefits to be provided by us.

At June 30, 2022, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.5 billion of revenue related to future benefits to be provided by us.

We expect to recognize, based on current projections, approximately 22 %, 27 %, 20 % and 31 % of this revenue in the remainder of 2022, 2023, 2024 and thereafter, respectively.

3 unchanged sentences

We had current deferred revenue of $ 2.8 billion and $ 1.8 billion at December 31, 2021 and 2020, respectively.

The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three months ended March 31, 2022 and 2021:

The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three and six months ended June 30, 2022 and 2021:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

9 unchanged sentences

Revenue and expenses earned and charged between segments are eliminated in consolidation.

Our capital expenditures below include accruals for amounts incurred but not yet paid for, but are not reduced by reimbursements received from outside parties such as landlords and noncontrolling interest partners or replacements funded by insurance proceeds.

We use AOI to evaluate the performance of our operating segments and define AOI as operating income (loss) before certain stock-based compensation expense, loss (gain) on disposal of operating assets, depreciation and amortization (including goodwill impairment), amortization of non-recoupable ticketing contract advances and acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation) .

AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results.

We manage our working capital on a consolidated basis.

Accordingly, segment assets are not reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets have not been presented.

The following table presents the results of operations for our reportable segments for the three months ended March 31, 2022 and 2021:

Accordingly, segment assets are not reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets and related depreciation and amortization have not been presented.

The following table presents the results of operations for our reportable segments for the three and six months ended June 30, 2022 and 2021:

Concerts Ticketing Sponsorship

& Advertising Other Corporate Eliminations Consolidated

& Advertising Other & Eliminations Corporate Consolidated

(in thousands)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Revenue $ 3,597,761 $ 575,305 $ 263,786 $ ( 2,678 ) $ — $ 4,434,174

Direct operating expenses 910,277 150,306 12,357 — — ( 1,918 ) 1,071,022

Selling, general and administrative expenses 384,118 147,456 36,100 2,508 — — 570,182

Depreciation and amortization 61,163 28,052 8,225 51 2,978 — 100,469

Loss (gain) on disposal of operating assets 1,868 ( 203 ) — — — — 1,665

Corporate expenses — — — — 32,410 — 32,410

Operating income (loss) $ ( 149,601 ) $ 154,788 $ 59,007 $ ( 1,746 ) $ ( 35,388 ) $ — $ 27,060

Intersegment revenue $ 1,575 $ 1,646 $ — $ ( 3,221 ) $ — $ —

Capital expenditures $ 31,993 $ 11,503 $ 1,752 $ — $ 1,241 $ — $ 46,489

Three Months Ended March 31, 2021

AOI $ 122,944 $ 230,759 $ 178,304 $ ( 2,027 ) $ ( 50,381 ) $ 479,599

Three Months Ended June 30, 2021

Revenue $ 286,958 $ 244,001 $ 44,561 $ 426 $ — $ 575,946

Direct operating expenses 113,904 17,832 2,821 — — ( 591 ) 133,966

Selling, general and administrative expenses 207,847 94,668 19,103 1,235 — — 322,853

Depreciation and amortization 62,886 36,478 7,164 11 2,337 — 108,876

Loss on disposal of operating assets 138 — — — — — 138

Corporate expenses — — — — 27,948 — 27,948

Operating loss $ ( 145,359 ) $ ( 120,656 ) $ ( 6,441 ) $ ( 431 ) $ ( 30,285 ) $ — $ ( 303,172 )

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

Capital expenditures $ 6,653 $ 9,675 $ 1,160 $ — $ 1,449 $ — $ 18,937

AOI $ ( 84,049 ) $ 99,416 $ 13,028 $ ( 1,223 ) $ ( 17,520 ) $ 9,652

Six Months Ended June 30, 2022

Revenue $ 4,805,586 $ 1,055,704 $ 379,475 $ ( 3,783 ) $ — $ 6,236,982

Intersegment revenue $ 2,227 $ 2,912 $ — $ ( 5,139 ) $ — $ —

AOI $ 73,778 $ 436,979 $ 248,004 $ ( 6,407 ) $ ( 63,716 ) $ 688,638

Six Months Ended June 30, 2021

Revenue $ 526,374 $ 272,323 $ 67,208 $ 650 $ — $ 866,555

Intersegment revenue $ — $ 980 $ — $ ( 980 ) $ — $ —

AOI $ ( 158,588 ) $ 36,664 $ 16,544 $ ( 3,445 ) $ ( 33,267 ) $ ( 142,092 )

The following table sets forth the reconciliation of consolidated AOI to operating income (loss) for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(in thousands)

AOI $ 479,599 $ 9,652 $ 688,638 $ ( 142,092 )

Acquisition expenses 9,543 2,381 21,620 ( 5,843 )

Amortization of non-recoupable ticketing contract advance 21,865 18,107 40,392 28,728

Depreciation and amortization 115,927 103,647 216,396 212,523

Loss (gain) on sale of operating assets 1,065 ( 28 ) 2,730 110

Stock-based compensation expense 12,500 12,830 61,741 52,847

Operating income (loss) $ 318,699 $ ( 127,285 ) $ 345,759 $ ( 430,457 )

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

What changed 10-Q

Item 1. Financial Statements