What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-23 · 248 added, 327 removed, 1240 unchanged (32% of the section changed)

24 unchanged sentences

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.

Description of the Matter As disclosed in Note 2 to the consolidated financial statements, the Company completed its acquisition of an aggregate 51% interest in OCESA for $431.9 million on December 6, 2021.

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.

The preliminary estimates of the fair value of intangible assets were finalized during the measurement period in 2022.

The Company allocated the purchase price to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets of $474 million and resulting goodwill of $372 million.

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

The significant assumptions included forecasted earnings 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.

For example, we tested controls over the valuation of the identified intangible assets and resulting goodwill, including management’s review of the valuation models and significant 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.

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

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

/s/ Ernst & Young LLP

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Definite-lived intangible assets, net 1,050,622 1,026,338

Indefinite-lived intangible assets 369,028 369,058

Indefinite-lived intangible assets, net 368,712 369,028

Goodwill 2,529,380 2,590,869

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Net income (loss) attributable to common stockholders of Live Nation $ 295,986 $ ( 650,904 ) $ ( 1,724,535 )

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

Basic net income (loss) per common share available to common stockholders of Live Nation $ 0.66 $ ( 3.09 ) $ ( 8.12 )

Diluted net income (loss) per common share available to common stockholders of Live Nation

$ 0.64 $ ( 3.09 ) $ ( 8.12 )

Weighted average common shares outstanding:

Basic and diluted 217,190,862 212,270,944 210,082,696

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

Basic 224,809,558 217,190,862 212,270,944

Diluted 231,556,866 217,190,862 212,270,944

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

Net income (loss) attributable to common stockholders of Live Nation $ 295,986 $ ( 650,904 ) $ ( 1,724,535 )

Accretion of redeemable noncontrolling interests ( 146,770 ) ( 19,771 ) 1,180

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

$ ( 670,675 ) $ ( 1,723,355 ) $ ( 4,882 )

Net income (loss) available to common stockholders of Live Nation—basic and diluted $ 149,216 $ ( 670,675 ) $ ( 1,723,355 )

See Notes to Consolidated Financial Statements

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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 —

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Exercise of stock options 1,822,670 18 20,952 — — — — 20,970 —

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

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 )

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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 ) —

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 —

Exercise of stock options 1,337,301 13 12,458 — — — — 12,471 —

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

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

Divestitures — — — — — — 6 6 —

Purchases of noncontrolling interests — — ( 110 ) — — — ( 2,577 ) ( 2,687 ) ( 1,698 )

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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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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

Cumulative effect of change in accounting principle — — ( 95,986 ) 60,522 — — — ( 35,464 ) —

Non-cash and stock-based compensation — — 223,136 — — — — 223,136 —

Common stock issued under stock plans, net of shares withheld for employee taxes 2,598,569 26 ( 120,524 ) — — — — ( 120,498 ) —

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

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

Exercise of stock options 3,934,799 39 5,883 — — — — 5,922 —

Acquisitions — — — — — — 6,846 6,846 30,532

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Comprehensive income (loss):

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

Net income — — — 295,986 — — 100,344 396,330 12,863

Unrealized gain on cash flow hedge — — — — — 49,529 — 49,529 —

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Other, net ( 484 ) 106 36

Net cash provided by financing activities 1,171,332 1,350,082 328,889

Net cash provided by (used in) financing activities ( 143,340 ) 1,171,332 1,350,082

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 179,450 ) ( 43,585 ) 29,565

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changed its name to Live Nation Entertainment, Inc.

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 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 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.

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.

These artist fees and production costs are expensed when the event occurs.

Once tickets for an event go on sale, we generally begin to receive payments from ticket sales at our owned or operated venues and festivals in advance of when the event occurs.

Once tickets for an event go on sale, we generally begin to receive payments from ticket sales in advance of when the event occurs.

In the United States, this cash is largely associated with events in our owned or operated venues, notably amphitheaters, festivals, theaters and clubs.

Internationally, this cash is from a combination of both events in our owned or operated venues, as well as events in third-party venues associated with our promoters’ share of tickets in allocation markets.

We record these ticket sales as revenue when the event occurs.

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 and 2021 even with the resumption of events late in the second quarter of 2021.

We expect our seasonality trends to evolve as we continue to expand our global operations.

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, 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.

Included in the December 31, 2022 and 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.

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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To date, we have experienced no loss of 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, including those resulting from the global COVID-19 pandemic.

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.

Allowance for Doubtful Accounts

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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, 2022 and 2020.

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

Further information regarding our acquisitions for the year ended December 31, 2021 can be found in Note 2 – 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.

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

There were no similar material transactions in 2021 and 2022.

We account for our business combinations under the acquisition method of accounting.

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Expenditures for maintenance and repairs are charged to operations as incurred, whereas expenditures for asset renewal and improvements are capitalized.

Our depreciation expense is presented as a separate line item, with amortization expense, in the statements of operations.

There is no depreciation expense included in direct operating expenses, selling, general and administrative expenses or corporate expenses.

We test for possible impairment of property, plant and equipment whenever events or circumstances change, such as a current period operating cash flow loss combined with a history of, or projections of, operating cash flow losses or a significant adverse change in the manner in which the asset is intended to be used, which could indicate that the carrying amount of the asset may not be recoverable.

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Indefinite-lived intangibles consist of trade names which are not subject to amortization.

Our amortization expense is presented as a separate line item, with depreciation expense, in the statements of operations.

There is no amortization expense included in direct operating expenses, selling, general and administrative expenses or corporate expenses.

We test for possible impairment of definite-lived intangible assets whenever events or circumstances change, such as a current period operating cash flow loss combined with a history of, or projections of, operating cash flow losses or a significant adverse change in the manner in which the asset is intended to be used, which could indicate that the carrying amount of the asset may not be recoverable.

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Any such impairment charge is recorded in depreciation and amortization in the statements of operations.

For the years ended December 31, 2022 and 2021, there were no significant impairment charges.

For the year ended December 31, 2020, we recorded impairment charges of $ 23.6 million 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.

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

We test for possible impairment of indefinite-lived intangible assets at least annually.

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The impairment loss calculations require management to apply judgment in estimating future cash flows, expected future revenue, discount rates and royalty rates that reflect the risk inherent in future cash flows.

For the years ended December 31, 2022, 2021 and 2020, there were no significant impairment charges.

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

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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.

Regardless, all reporting units undergo a second step at least once every five years to support our annual qualitative first step.

This second step, used to quantitatively screen for potential impairment and measure the impairment, if any, compares the fair value of the reporting unit with its carrying amount, including goodwill.

Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including our interpretation of current economic indicators and market valuations, and assumptions about our strategic plans with regard to our operations.

Due to the uncertainties associated with such estimates, actual results could differ from such estimates.

If the reporting unit’s carrying value exceeds its fair value, the excess of the carrying value over the fair value is recorded as an impairment to goodwill.

If a reporting unit’s carrying value is negative, the reporting unit passes the impairment test.

In both steps, discount rates, market multiples, and sensitivity tests are derived and/or computed with the assistance of external valuation consultants.

In developing fair values for our reporting units, we employ a discounted cash flow or a market multiple methodology, or a combination thereof.

The discounted cash flow methodology establishes fair value by estimating the present value of the projected future cash flows to be generated from the reporting unit.

The discount rate applied to the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows.

The discounted cash flow methodology uses our estimates of future financial performance.

The most significant assumptions used in the discounted cash flow methodology are the discount rate and expected future revenue, which vary among reporting units.

The market multiple methodology compares us to similar companies on the basis of risk characteristics to determine our risk profile relative to those companies as a group.

This analysis generally focuses on both quantitative considerations, which include financial performance and other quantifiable data, and qualitative considerations, which include any factors which are expected to impact future financial performance.

The most significant assumptions affecting the market multiple methodology are the market multiples used on projected future cash flows and market participant acquisition premium.

A market participant acquisition premium represents the additional value a buyer would pay to obtain control of the respective reporting unit because having control would lead to higher cash flows, lower cost of capital or both.

We also considered changes in discount rates, market multiples, carrying values 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 utilizing a quantitative approach.

For the years ended December 31, 2022 and 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.

No impairment charges were recorded for the years ended December 31, 2022, 2021 and 2020.

We lease office space, many of our concert venues, festival sites and certain equipment.

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We have established a policy of treating the taxes due on future GILTI inclusions in United States taxable income as a current-period expense when incurred.

In August 2022, the Inflation Reduction Act (IRA) was enacted in the United States, which includes health care, clean energy, and income tax provisions.

The income tax provisions amend the Internal Revenue Code to include amongst other things a corporate alternative minimum tax starting in the 2023 tax year.

The Company is still assessing the impact due to lack of United States Treasury regulations;

however, the IRA is not expected to have a material impact on the Company's financial statements due to net operating losses and full valuation allowances for the United States, which is our most significant jurisdiction.

We will continue to monitor to ensure our financial results and related tax disclosures are in compliance with the IRA tax legislation.

Revenue Recognition

Revenue from the promotion or production of an event in our Concerts segment is recognized when the show occurs.

Revenue collected in advance of the event is recorded as deferred revenue until the event occurs.

Consideration collected in advance of the event is recorded as deferred revenue until the event occurs.

Revenue collected from sponsorship agreements, which is not related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor.

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For primary tickets sold for events of third-party clients and secondary market sales, the revenue is recognized at the time of the sale and is recorded by our Ticketing segment.

Amortization of nonrecoupable ticketing contract advances is recorded as a reduction to revenue.

We account for taxes that are externally imposed on revenue producing transactions on a net basis.

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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.

For the years ended December 31, 2022, 2021 and 2020, we recorded business interruption insurance recoveries of $ 38.8 million, $ 97.2 million and $ 125.7 million, respectively.

The recoveries were for a variety of claims and primarily recorded as revenue.

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 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.

For the year ended December 31, 2022 and 2021, we recorded net foreign currency transaction losses of $ 55.8 million and $ 20.6 million, respectively.

For the year ended December 31, 2020, we recorded net foreign currency transaction gains of $ 9.0 million.

Advertising Expense

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Selling, general and administrative expenses include salaries and other compensation costs related to full-time employees, fixed rent, travel and entertainment, legal expenses and consulting along with other costs.

Depreciation and Amortization

Our depreciation and amortization is presented as a separate line item in the statements of operations.

There is no depreciation or amortization included in direct operating expenses, selling, general and administrative expenses or corporate expenses.

Amortization of nonrecoupable ticketing contract advances is recorded as a reduction to revenue.

Non-cash and Stock-based Compensation

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Actual results could differ from those estimates.

Accounting Pronouncements - Not Yet Adopted

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

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current year presentation.

Such reclassifications did not have any effect on our financial condition or results of operations as previously reported.

Accounting Pronouncements Adopted

In August 2020, the FASB issued accounting standards update (“ASU 2020-06”) that simplifies the accounting for convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity.

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

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

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

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 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 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

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 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

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

The impact of adoption also resulted 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 did not have a material effect on our consolidated statements of operations or consolidated statements of cash flows.

NOTE 2— ACQUISITIONS

During 2022, we completed various acquisitions for total consideration, net of cash acquired, of $ 315.0 million.

For certain acquisitions totaling $ 249.9 million, the fair value of the assets acquired represented substantially all the consideration transferred, and as such we accounted for the acquisitions as an asset acquisition.

All acquisitions were not material on an individual basis or in aggregate for the year ended December 31, 2022.

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.

With the exception of OCESA, all other acquisitions were not material on an individual basis or in the aggregate for the years ended December 31, 2021.

OCESA Acquisition

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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.

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 completed our purchase price accounting during the three-month period ending December 31, 2022.

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:

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

Initial Allocation (1)

Adjustments (2)

Final Allocation

(in thousands)

Fair value of consideration transferred $ 431,943 $ — $ 431,943

Adjustments for working capital — 2,269 2,269

Fair value of redeemable noncontrolling interests 280,000 — 280,000

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Fair value of pre-existing investment in nonconsolidated affiliates 50,000 16,660 66,660

Preliminary recognized amounts of identifiable assets acquired and liabilities assumed

recognized amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents 113,014 ( 7,896 ) 105,118

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Long-term deferred income taxes ( 102,279 ) ( 40,200 ) ( 142,479 )

Other long-term liabilities — ( 10,334 ) ( 10,334 )

Goodwill $ 442,912 $ ( 71,039 ) $ 371,873

_____________________

(1) As reported in our 2021 Annual Report on Form 10-K.

(2) The adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities assumed.

The fair value adjustments made to the initial allocation did not result in significant changes to the amortization expense recorded for the years ended December 31, 2022 and 2021.

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.

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

The anticipated synergies primarily relate to increased effectiveness of promotion, venue and festivals as well as ticketing and sponsorship opportunities.

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

Goodwill of $ 195.5 million and $ 176.4 million has been allocated to the 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.

Intangible assets — the fair value of the acquired intangible assets was 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)

Fair Value Useful Lives (1)

(in thousands) (years)

Client/vendor relationships $ 102,000 5 to 10

Revenue-generating contracts 90,000 4 to 10

Client/vendor relationships $ 90,000 10

Revenue-generating contracts 325,000 10

Venue management and leaseholds 14,000 10

Trademarks and naming rights 41,000 5 to 10

Trademarks and naming rights 45,000 10

Total acquired intangible assets $ 474,000

_____________________

(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.

(1) Determination of the 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.

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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.

Noncontrolling interests — The fair value of the redeemable noncontrolling interests and noncontrolling interests of $ 280.0 million and $ 4.0 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 $ 13.3 million of acquisition transaction expenses relating to the Acquisition, of which $ 1.0 million, $ 9.0 million and $ 1.1 million are included in selling, general and administrative expenses within our consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020, 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 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 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.

NOTE 3— LONG-LIVED ASSETS, INTANGIBLES, AND GOODWILL

Property, Plant and Equipment, Net

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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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Acquisitions—prior year ( 7,435 ) 255,086 ( 92,290 ) 7,007 — 318 162,686

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

Foreign exchange

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( 75,369 ) ( 93,290 ) ( 14,277 ) ( 18,382 ) ( 10,316 ) ( 5,218 ) ( 216,852 )

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.

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

Included in the current year acquisitions amounts above for 2022 are definite-lived intangible assets primarily associated with the acquisitions of a concert promotion business located in Germany, a ticketing business located in Thailand as well as a concert promotion business, a sports management business and a venue management business, which are all located in the United States.

Included in the current year acquisition amounts above for 2021 and prior year acquisition amounts for 2022 are definite-lived intangible assets primarily associated with the acquisition of OCESA.

Information regarding the estimated fair value of the acquired OCESA intangible assets can be found in Note 2 – Acquisitions.

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

Weighted-Average Life (1)

Revenue-generating contracts 5 10

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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.

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

Amortization of definite-lived intangible assets for the years ended December 31, 2022, 2021 and 2020 was $ 216.9 million, $ 193.4 million and $ 239.3 million, respectively.

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These indefinite-lived intangible assets had a carrying value of $ 368.7 million and $ 369.0 million as of December 31, 2022 and 2021, respectively.

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 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 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.

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the years ended December 31, 2022 and 2021:

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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 $ 914,063 $ 979,742 $ 635,575 $ 2,529,380

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 current year acquisitions amounts above for 2022 are goodwill primarily associated with the acquisitions of a concert promotion business located in Germany and a concert promotion business located in the United States.

Included in the current year acquisitions amounts above for 2021 and prior year acquisitions for 2022 are goodwill primarily associated with the acquisition of OCESA.

See Note 2 – Acquisitions for further discussion.

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, 2022, there were no significant sales of 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.

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 $ 7.5 million and $ 25.0 million of noncash additions to investments in nonconsolidated affiliates for the years ended December 31, 2022 and 2021, respectively, which are included in other long term assets on our consolidated balance sheets associated with these agreements.

NOTE 4— LEASES

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As of December 31, 2022, we have additional operating leases that have not yet commenced with total lease payments of $ 210.5 million.

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 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.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from February 2023 to June 2030 with lease terms ranging from 2 to 40 years.

NOTE 5— LONG-TERM DEBT

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Total principal amount 5,955,343 5,830,275

Less unamortized discounts and debt issuance costs ( 99,537 ) ( 129,840 )

unamortized discounts and debt issuance costs ( 51,844 ) ( 99,537 )

Total long-term debt, net of unamortized discounts and debt issuance costs 5,903,499 5,730,738

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2026 1,122,495

2027 2,154,773

Thereafter 543,570

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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 7 – Fair Value Measurements for discussion of the fair value measurement of our long-term debt.

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Based on our outstanding letters of credit of $ 51.3 million, $ 578.7 million was available for future borrowings from our revolving credit facilities.

Subsequent to December 31, 2022, we amended our senior secured credit facility.

Refer to Note 16 – Subsequent Events for further details.

6.5% Senior Secured Notes Due 2027

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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, 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, 2022, the debt discount balance was fully amortized and the value of the notes, if converted and fully settled in shares, exceeds the principal amount of the notes by $ 13.9 million.

As of December 31, 2022, the effective interest rate on the liability component of the notes was 5.7 %.

Subsequent to December 31, 2022, we repurchased $ 440.0 million of the principal amount of the 2.5 % convertible senior notes due 2023.

Refer to Note 16 – Subsequent Events for further details.

2.0% Convertible Senior Notes Due 2025

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

As of 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, 2022, the remaining period for the unamortized debt discount balance of $ 14.1 million was approximately two 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, 2022, the effective interest rate on the liability component of the notes was 4.2 %.

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Amortization of debt discount (1)

— 20,883 19,260

Amortization of debt issuance costs 3,710 3,330 3,230

Total interest cost recognized on the notes $ 25,460 $ 45,963 $ 43,501

___________________

(1) There was no amortization of debt discount for the year ended December 31, 2022 due to the adoption of ASU 2020-06 as of January 1, 2022.

Other Long-term Debt

As of December 31, 2021, other long-term debt includes capital leases of $ 4.7 million, debt to noncontrolling interest partners of $ 59.9 million and $ 19.8 million of a subsidiary’s term loan and revolving credit facility.

As of December 31, 2022, other long-term debt includes $ 120.4 million for a Euro denominated note due in 2024, debt to noncontrolling interest partners of $ 54.2 million and capital leases of $ 4.2 million.

Our other long-term debt has a weighted average cost of debt of 4.6 % and maturities at various dates through September 2050.

Extinguishment of Debt

In October 2019, we issued $ 950 million principal amount of 4.75 % senior notes due 2027 and further amended our senior secured credit facility, including the draw down of $ 950 million principal amount under the new term loan B facility.

The proceeds were used to repay the $ 1.1 billion principal balance outstanding on the term loans A and B under our then existing senior secured credit facility, to repay the entire $ 250 million principal amount of the 5.375 % senior notes due 2022, to repay the related redemption premium of $ 3.4 million on the senior notes and accrued interest and fees of $ 30.8 million, leaving $ 527.5 million for general corporate purposes, including acquisitions.

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

Debt Covenants

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

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.

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) was 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.

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During the year ended December 31, 2022, we recorded unrealized gains of $ 49.5 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.

Based on the current interest rate expectations, we estimate that approximately $ 16.4 million in other comprehensive income will be reclassified into earnings in the next 12 months as an adjustment to interest expense.

See Note 7 – Fair Value Measurements for further discussion and disclosure of the fair values for this interest rate swap derivative.

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Cash equivalents $ 503,964 $ — $ — $ 503,964 $ 620,980 $ — $ — $ 620,980

Interest rate swap

— 41,515 — 41,515 — — — —

Forward currency contracts

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

Our debt is not publicly traded and the carrying amounts typically approximate fair value for debt that accrues interest at a variable rate, which are considered to be Level 2 inputs as defined in the FASB guidance.

Our debt is not publicly traded and the carrying amounts typically approximate fair value for debt that accrues interest at a variable rate, which are considered to be Level 2 inputs.

The following table presents the estimated fair values of our senior secured notes, senior notes and convertible senior notes at December 31, 2022 and 2021:

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Non-recurring

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

Description Measurement Level 1 Level 2 Level 3 (Gain)

(in thousands)

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

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

During 2022, there were no significant non-recurring fair value measurements.

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.

To calculate the gains, we remeasured this investment to fair value of $ 50 million 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.

The impairment charges are primarily related to intangible assets for revenue-generating contracts, venue management and leaseholds and client/vendor relationships in the Concerts segment.

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

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

The key inputs in these calculations include future cash flow projections, including revenue profit margins, and, for the fair value computation, a discount rate.

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

During 2019, we recorded impairment charges related to definite-lived intangible assets of $ 26.8 million as a component of depreciation and amortization.

The impairment charges are primarily related to intangible assets for revenue-generating contracts in the Concerts and Sponsorship & Advertising segments.

It was determined that these assets were impaired since the most recent estimated undiscounted future cash flows associated with these assets were less than their carrying value.

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

The key inputs in these calculations include future cash flow projections, including revenue profit margins, and, for the fair value computation, a discount rate.

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

NOTE 8— COMMITMENTS AND CONTINGENT LIABILITIES

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

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.

In April 2021, the court in the Gomel lawsuit declined to certify all claims other than those pled under British Columbia’s Business Practices and Consumer Protection Act and claims for punitive damages.

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 2015 through April 2021 that were initially purchased on Ticketmaster.ca.

In May 2021, Ticketmaster and Live Nation filed a notice of appeal of the class certification ruling, and the plaintiff filed a cross-appeal shortly thereafter.

The appeals were heard in early February 2023.

The court in the Watch matter issued its class certification ruling in November 2022.

The court declined to certify and dismissed all claims other than those pled under provincial consumer protection statutes relating to drip pricing and certified a class of consumers who purchased tickets between September 2015 and June 2018 from Ticketmaster.ca on the primary market.

In December 2022, the parties filed cross-notices of appeal of the court’s ruling.

The class certification hearing in the Thompson-Marcial matter is scheduled for April 2023.

The McPhee matter is stayed pending the outcome of the Watch matter.

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

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Pursuant to a February 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.

Discovery is underway.

Confidential settlements were reached with the families of three of the deceased plaintiffs in August through December 2022.

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.

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Income tax expense (benefit) $ 96,254 $ ( 2,481 ) $ ( 28,875 )

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

The domestic income (loss) before income taxes was $ 217.0 million, $( 401.4 ) million and $( 1.5 ) billion for 2022 , 2021 and 2020 , respectively.

Foreign income (loss) before income taxes was $ 288.4 million, $( 209.9 ) million and $( 374.5 ) million for 2022, 2021 and 2020, respectively.

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Prepaid expenses 12,490 3,424

Hedge investments 10,584 —

Other 19,086 5,829

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Leases 250,183 237,963

Interest limitation 84,599 54,730

Capitalized R&D 35,149 —

Other 53,359 30,056

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Amounts included in differences between foreign and United States statutory rates are impacted by changes in the mix of international earnings subject to various tax rates which can differ greatly in their proximity to the United States statutory rate.

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 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.

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.

The 2022 nondeductible expenses also include nondeductible items associated with our recent acquisition of OCESA.

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.

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Balance at December 31 $ 22,996 $ 21,330 $ 21,732

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.

If we were to prevail on all uncertain tax positions, the net effect would be a decrease to our income tax provision of approximately $ 0.7 million.

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NOTE 11— EQUITY

From inception and through December 31, 2021, we have not declared or paid any dividends.

We currently intend to retain future earnings, if any, to finance the expansion of our business.

Therefore, we do not expect to pay any cash dividends in the foreseeable future.

Moreover, the terms of our senior secured credit facility limit the amount of funds that we will have available to declare and distribute as dividends on our common stock.

Payment of future cash dividends, if any, will be at the discretion of our board of directors in accordance with applicable laws after taking into account various factors, including the financial condition, operating results, current and anticipated cash needs, plans for expansion and contractual restrictions with respect to the payment of dividends.

The following table reconciles common stock reported in the consolidated statements of changes in equity to the consolidated balance sheets.

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During 2022, 2021 and 2020, we issued 6.5 million, 2.3 million and 3.2 million shares, respectively, of common stock in connection with stock option exercises and vesting of restricted stock awards.

During 2019, we issued 0.8 million shares of common stock to holders of our 2.5 % convertible senior notes due 2019 upon conversion of $ 28.6 million of the principal amount of the notes.

Common Stock Reserved for Future Issuance

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Balance at December 31, 2019 $ — $ ( 145,713 ) $ ( 145,713 )

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

Amount reclassified from AOCI — — —

Net other comprehensive loss — ( 482 ) ( 482 )

Balance at December 31, 2019 — ( 145,713 ) ( 145,713 )

Other comprehensive income (loss) before reclassifications ( 36,689 ) 291 ( 36,398 )

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

Other comprehensive income before reclassifications 49,529 8,047 57,576

Amount reclassified from AOCI 312 — 312

Net other comprehensive income 49,841 8,047 57,888

Balance at December 31, 2022 $ 41,283 $ ( 131,359 ) $ ( 90,076 )

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

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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.

Diluted net income per common share adjusts basic net income per common share for the effects of stock options, restricted and deferred stock awards and other potentially dilutive financial instruments only in the periods in which such effect is dilutive.

Our convertible senior notes are considered in the calculation of diluted net income per common share, if dilutive.

The calculation of diluted net income 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 the convertible senior notes where dilutive.

For the years ended December 31, 2021, 2020 and 2019 there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net income per common share.

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:

Year Ended December 31,

2022 2021 2020

Weighted average common shares—basic 224,809,558 217,190,862 212,270,944

Effect of dilutive shares:

Stock options and restricted stock 6,747,308 — —

Weighted average common shares—diluted 231,556,866 217,190,862 212,270,944

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

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14,086,348 22,635,993 24,294,242

NOTE 13— REVENUE RECOGNITION

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

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.

For events that have been cancelled as of December 31, 2021, the deferred revenue has been reclassified to accrued expenses on our consolidated balance sheets where not already refunded to the fan.

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

Where a fan has elected to receive the incentive voucher, the cash from the original ticket purchase remains in deferred revenue.

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, 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.

For the Ticketing segment’s third-party clients, previously recognized service charges are reversed from revenue when the event is cancelled or a refund is issued for a rescheduled event, including refunds issued after the balance sheet date but prior to the filing of our consolidated financial statements.

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

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

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

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

Concerts revenue, including intersegment revenue, for the years ended December 31, 2021, 2020 and 2019 are as follows:

Year Ended December 31,

2021 2020 2019

(in thousands)

Total Concert Revenue $ 4,722,190 $ 1,468,433 $ 9,428,094

Percentage of consolidated revenue 75.3 % 78.9 % 81.6 %

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

As a promoter and venue operator, we earn revenue primarily from the sale of tickets, concessions, merchandise, parking, ticket rebates or service charges on tickets sold by Ticketmaster or third-party ticketing agreements, and rental of our owned or operated venues.

NOTE 12— SEGMENTS AND REVENUE RECOGNITION

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

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.

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 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 and related depreciation and amortization have not been presented.

There were no customers that individually accounted for more than 10% of our consolidated revenue in any year.

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

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

As a promoter and venue operator, we earn revenue primarily from the sale of tickets, concessions, merchandise, parking, ticket rebates or service charges on tickets sold by Ticketmaster or third-party ticketing platforms, and rental of our owned or operated venues.

As an artist manager, we earn commissions on the earnings of the artists and other clients we represent, primarily derived from clients’ earnings for concert tours.

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

Ticketing revenue, including intersegment revenue, for the years ended December 31, 2021, 2020 and 2019 are as follows:

Year Ended December 31,

2021 2020 2019

(in thousands)

Total Ticketing Revenue $ 1,134,268 $ 188,383 $ 1,545,189

Percentage of consolidated revenue 18.1 % 10.1 % 13.4 %

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

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 records revenue arising from convenience and order processing fees, 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.

Our Ticketing segment does not record the face value of the tickets as revenue.

A significant portion of our service charges are payable to the venue and credit card vendors.

The 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.

This segment records revenue arising from convenience and order processing fees, 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.

We do not record the face value of the tickets as revenue.

Ticket fee revenue is recognized when the ticket is sold for third-party clients and secondary market sales, as we have no further obligation to our client’s customers following the sale of the ticket.

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Sponsorship & Advertising

Sponsorship & Advertising revenue, including intersegment revenue, for the years ended December 31, 2021, 2020 and 2019 are as follows:

Year Ended December 31,

2021 2020 2019

(in thousands)

Total Sponsorship & Advertising Revenue $ 411,910 $ 203,676 $ 590,274

Percentage of consolidated revenue 6.6 % 10.9 % 5.1 %

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

Our Sponsorship & Advertising segment manages the development of strategic sponsorship programs in addition to the sale of international, national and local sponsorships and placement of advertising such as signage, promotional programs, rich media offerings, including advertising associated with live streaming and music-related content, and ads across our distribution network of venues, events and websites.

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

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

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We expect to recognize, based on current projections, approximately 34 %, 25 %, 17 % and 24 % of this revenue in 2023, 2024, 2025 and thereafter, respectively.

The following table presents the results of operations for our reportable segments for the years ending December 31, 2022, 2021 and 2020:

Concerts Ticketing Sponsorship

& Advertising Other & Eliminations Corporate Consolidated

(in thousands)

Revenue $ 13,494,100 $ 2,238,618 $ 968,146 $ ( 19,610 ) $ — $ 16,681,254

% of Consolidated Revenue 80.9 % 13.4 % 5.8 % ( 0.1 )%

Intersegment revenue $ 12,821 $ 8,643 $ — $ ( 21,464 ) $ — $ —

AOI $ 169,740 $ 827,901 $ 591,972 $ ( 14,549 ) $ ( 167,882 ) $ 1,407,182

Capital expenditures $ 277,133 $ 70,739 $ 19,383 $ ( 17 ) $ 9,680 $ 376,918

Revenue $ 4,722,190 $ 1,134,268 $ 411,910 $ 79 $ — $ 6,268,447

% of Consolidated Revenue 75.3 % 18.1 % 6.6 % —

Intersegment revenue $ 2,505 $ 404 $ — $ ( 2,909 ) $ — $ —

AOI $ ( 221,338 ) $ 420,545 $ 242,239 $ ( 6,963 ) $ ( 110,620 ) $ 323,863

Capital expenditures $ 92,132 $ 49,004 $ 12,299 $ — $ 23,036 $ 176,471

Revenue $ 1,468,433 $ 188,383 $ 203,676 $ 686 $ — $ 1,861,178

% of Consolidated Revenue 78.9 % 10.1 % 10.9 % 0.1 %

Intersegment revenue $ 712 $ 1,835 $ — $ ( 2,547 ) $ — $ —

AOI $ ( 638,846 ) $ ( 374,563 ) $ 81,910 $ ( 13,478 ) $ ( 70,915 ) $ ( 1,015,892 )

Capital expenditures $ 119,730 $ 77,018 $ 5,781 $ — $ 6,886 $ 209,415

The following table sets forth the reconciliation of consolidated AOI to operating income (loss) for the for the years ended December 31, 2022, 2021 and 2020:

2022 2021 2020

(in thousands)

AOI $ 1,407,182 $ 323,863 $ ( 1,015,892 )

Acquisition expenses 68,078 42,912 ( 13,088 )

Amortization of non-recoupable ticketing contract advance 79,043 74,406 47,971

Depreciation and amortization 449,976 416,277 485,025

Loss (gain) on sale of operating assets ( 32,082 ) ( 1,211 ) 503

Stock-based compensation expense 110,049 209,337 116,889

Operating income (loss) $ 732,118 $ ( 417,858 ) $ ( 1,653,192 )

Deferred Revenue

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Sponsorship & Advertising 133,318 74,266

Other & Corporate — 3,402

$ 2,595,324 $ 633,809

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, 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.

NOTE 13— STOCK-BASED COMPENSATION

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These options typically vest over one to four years .

In 2022, no stock options were granted.

The following assumptions were used to calculate the fair value of our options on the date of grant:

Year Ended December 31,

2021 2020 2019

Risk-free interest rate 1.01 % 0.09 % - 1.19 %

0.09 % - 1.19 %

1.89 % - 2.53 %

Dividend yield 0.0 % 0.0 %

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32.37 % - 51.83 %

27.63 % - 28.12 %

Weighted average expected life (in years) 6.40 2.51

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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 2022 to March 2025, and expiration dates range from January 2022 to March 2031 at exercise prices and average contractual lives as follows:

Vesting dates on the stock options range from February 2023 to March 2025, and expiration dates range from December 2023 to March 2031 at exercise prices and average contractual lives as follows:

Prices Outstanding

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21 8.0 $ 73.77 18 8.0 $ 71.27

$ 45.00 - $ 60.99

445 7.2 $ 56.82 431 7.2 $ 56.78

$ 61.00 - $ 89.99

23 9.0 $ 73.43 19 8.9 $ 70.26

The total intrinsic value of options outstanding and options exercisable as of December 31, 2022 was $ 130.2 million and $ 129.2 million, respectively.

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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 2022, we granted 1.8 million shares of restricted stock and 0.2 million shares of performance-based awards, respectively, under our stock incentive plan.

These awards will vest on the grant date or over a period of one month to six years with the exception of the performance-based awards which will vest within two years if the performance criteria are met.

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

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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 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.

The following table presents a summary of our unvested restricted stock awards outstanding at December 31, 2022, 2021 and 2020 (“Price” reflects the weighted average share price at the date of grant):

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

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.

In 2022, we granted 2.2 million shares of deferred stock awards with market conditions under our stock incentive plans.

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

As of December 31, 2022, there were no deferred stock awards outstanding for which the minimum market conditions have been met.

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

The following table presents a summary of our unvested deferred stock awards outstanding at December 31, 2022, 2021 and 2020 (“Price” reflects the weighted average grant date fair value):

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Total other long-term liabilities $ 455,971 $ 431,581

NOTE 16— SEGMENT DATA

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

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

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

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.

There were no customers that individually accounted for more than 10% of our consolidated revenue in any year.

The following table presents the results of operations for our reportable segments for the years ending December 31, 2021, 2020 and 2019:

Concerts Ticketing Sponsorship

& Advertising Other Corporate Eliminations Consolidated

(in thousands)

Revenue $ 4,722,190 $ 1,134,268 $ 411,910 $ 2,988 $ — $ ( 2,909 ) $ 6,268,447

Direct operating expenses 3,913,975 358,246 86,540 — — ( 2,772 ) 4,355,989

Selling, general and administrative expenses 1,184,424 472,519 95,251 2,765 — ( 137 ) 1,754,822

Depreciation and amortization 243,439 133,227 27,942 43 11,626 — 416,277

Loss (gain) on disposal of operating assets ( 1,162 ) ( 67 ) — — 18 — ( 1,211 )

Corporate expenses — — — — 160,428 — 160,428

Operating income (loss) $ ( 618,486 ) $ 170,343 $ 202,177 $ 180 $ ( 172,072 ) $ — $ ( 417,858 )

Intersegment revenue $ 2,505 $ 404 $ — $ — $ — $ ( 2,909 ) $ —

Capital expenditures $ 92,132 $ 49,004 $ 12,299 $ — $ 23,036 $ — $ 176,471

Revenue $ 1,468,433 $ 188,383 $ 203,676 $ 3,233 $ — $ ( 2,547 ) $ 1,861,178

Direct operating expenses 1,222,997 129,433 52,517 — — ( 2,547 ) 1,402,400

Selling, general and administrative expenses 937,651 501,032 75,669 9,990 — — 1,524,342

Depreciation and amortization 266,255 169,921 30,617 6,684 11,548 — 485,025

Loss (gain) on disposal of operating assets 505 ( 1 ) — ( 1 ) — — 503

Corporate expenses — — — — 102,100 — 102,100

Operating income (loss) $ ( 958,975 ) $ ( 612,002 ) $ 44,873 $ ( 13,440 ) $ ( 113,648 ) $ — $ ( 1,653,192 )

Intersegment revenue $ 712 $ 1,835 $ — $ — $ — $ ( 2,547 ) $ —

Capital expenditures $ 119,730 $ 77,018 $ 5,781 $ — $ 6,886 $ — $ 209,415

Revenue $ 9,428,094 $ 1,545,189 $ 590,274 $ 3,162 $ — $ ( 18,750 ) $ 11,547,969

Direct operating expenses 7,857,437 514,169 114,326 — — ( 18,750 ) 8,467,182

Selling, general and administrative expenses 1,386,928 642,052 112,594 3,912 — — 2,145,486

Depreciation and amortization 239,682 156,894 33,084 364 13,967 — 443,991

Loss (gain) on disposal of operating assets ( 2,490 ) 116 — — 1 — ( 2,373 )

Corporate expenses — — — — 168,839 — 168,839

Operating income (loss) $ ( 53,463 ) $ 231,958 $ 330,270 $ ( 1,114 ) $ ( 182,807 ) $ — $ 324,844

Intersegment revenue $ 6,672 $ 12,078 $ — $ — $ — $ ( 18,750 ) $ —

Capital expenditures $ 186,819 $ 105,246 $ 10,261 $ — $ 35,252 $ — $ 337,578

The following table provides revenue and long-lived assets for our foreign operations included in the consolidated financial statements:

United Kingdom Operations Other Foreign Operations Total Foreign Operations Total Domestic Operations Consolidated Total

NOTE 15— GEOGRAPHIC DATA

The following table provides revenue and long-lived assets, including right-of-use (ROU) assets, for our foreign operations included in the consolidated financial statements:

Europe Other Foreign Total Foreign Domestic Consolidated Total

(in thousands)

Revenue $ 3,160,268 $ 2,474,495 $ 5,634,763 $ 11,046,491 $ 16,681,254

Long-lived assets $ 90,603 $ 185,550 $ 276,153 $ 815,776 $ 1,091,929

Long-lived assets, including ROU assets $ 771,230 $ 226,752 $ 997,982 $ 2,061,076 $ 3,059,058

Revenue $ 869,628 $ 316,462 $ 1,186,090 $ 5,082,357 $ 6,268,447

Long-lived assets $ 91,192 $ 184,679 $ 275,871 $ 825,543 $ 1,101,414

Long-lived assets, including ROU assets $ 588,955 $ 194,777 $ 783,732 $ 1,847,108 $ 2,630,840

Revenue $ 407,382 $ 257,912 $ 665,294 $ 1,195,884 $ 1,861,178

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

Long-lived assets, including ROU assets $ 609,933 $ 126,501 $ 736,434 $ 1,789,203 $ 2,525,637

NOTE 16— SUBSEQUENT EVENTS

In January 2023, we issued $ 1.0 billion principal amount of 3.125 % convertible senior notes due 2029.

In conjunction with this issuance, we used approximately $ 485.8 million of the net proceeds from the notes to repurchase $ 440.0 million aggregate principal amount of the 2.5 % convertible senior notes due 2023 resulting in a loss on debt repurchase of $ 18.4 million and a charge to additional paid-in capital for the induced conversion of the 2.5 % convertible notes of $ 27.4 million.

In addition, we paid debt issuance costs of $ 15.0 million that will be amortized using the effective interest rate method over the term of the related senior notes.

Interest on the 3.125 % convertible senior notes due 2029 is payable semi-annually in arrears on January 15 and July 15, beginning July 15, 2023, at a rate of 3.125 % per annum.

The notes will mature on January 15, 2029.

The notes will be convertible, under certain circumstances, until October 15, 2028, and on or after such date without condition, at an initial conversion rate of 9.2259 shares of our common stock per $1,000 principal amount of notes, subject to adjustment, which represents a 50 % conversion premium based on the last reported sale price for our common stock of $ 72.26 on January 9, 2023 prior to issuing the debt.

Upon conversion, the notes may be settled in shares of common stock or, at our election, cash or a combination of cash and shares of common stock.

Assuming we fully settled the notes in shares, the maximum number of shares that could be issued to satisfy the conversion is currently 9.2 million.

We may redeem for cash all or any portion of the notes, at our option, on or after January 21, 2026 and before the 41st scheduled trading day before the maturity date, if the sales price of our common stock reaches specified targets as defined in the indenture.

The redemption price will equal 100 % of the principal amount of the notes plus accrued interest, if any.

If we experience a fundamental change, as defined in the indenture governing the notes, the holders of the 3.125 % convertible senior notes due 2029 may require us to purchase for cash all or a portion of their notes, subject to specified exceptions, at a price equal to 100 % of the principal amount of the notes plus accrued and unpaid interest, if any.

In connection with the issuance of the 3.125 % convertible senior notes due 2029, we entered into privately negotiated capped call transactions with one or more counterparties.

The cap price of the capped call transactions is initially $ 144.52 , which represents a premium of 100 % over the last reported sale price of the Company’s common stock on January 9, 2023.

The cost of the capped call transactions was approximately $ 75.5 million.

Any remaining proceeds after the repurchase of a portion of the 2.5 % convertible senior notes due 2023, debt issuance costs and capped call transactions will be used for general corporate purposes.

In February 2023, we entered into Amendment No.

10 (the “Amendment”) to our Credit Agreement (as amended, restated, supplemented or modified prior to Amendment No.

10, the “Credit Agreement” and as amended by Amendment No.

10, the “Amended Credit Agreement”), dated as of May 6, 2010.

The Amendment provides for, among other things:

(i) replacement of the benchmark reference rate of the Eurodollar Rate (as defined in the Credit Agreement) (x) with the Term SOFR Rate for borrowings denominated in Dollars and (y) for each Alternative Currency (as defined in the Amended Credit Agreement), a corresponding reference rate, as set forth in the Amended Credit Agreement, (ii) deletion of the provisions regarding Canadian bankers’ acceptances, and (iii) the addition of the Company’s ability to draw letters of credit in Canadian Dollars.

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