What changed in this filing

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Item 1. Financial Statements

2023-05-04 compared with 2022-11-03 · 178 added, 328 removed, 355 unchanged (59% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2023 December 31,

46 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands except share and per share data)

4 unchanged sentences

Depreciation and amortization 115,185 100,469

Gain on disposal of operating assets ( 35,285 ) ( 1,148 ) ( 32,555 ) ( 1,038 )

Loss on disposal of operating assets 504 1,665

Corporate expenses 63,015 32,410

Operating income (loss) 506,249 137,145 852,008 ( 293,312 )

Operating income 142,776 27,060

Interest expense 89,215 66,773

Loss on extinguishment of debt 18,366 —

Interest income ( 40,313 ) ( 7,564 )

Equity in losses (earnings) of nonconsolidated affiliates 14,283 ( 7,025 ) 8,040 ( 4,608 )

Gain from sale of investments in nonconsolidated affiliates — ( 30,633 ) ( 448 ) ( 83,580 )

Equity in earnings of nonconsolidated affiliates ( 4,107 ) ( 4,288 )

Other expense, net 11,583 9,399

3 unchanged sentences

Net income attributable to noncontrolling interests 47,361 1,226

Net income (loss) attributable to common stockholders of Live Nation $ 361,402 $ 46,878 $ 499,020 $ ( 455,980 )

Basic net income (loss) per common share available to common stockholders of Live Nation $ 1.47 $ 0.20 $ 1.79 $ ( 2.13 )

Diluted net income (loss) per common share available to common stockholders of Live Nation $ 1.39 $ 0.19 $ 1.73 $ ( 2.13 )

Net loss attributable to common stockholders of Live Nation $ ( 3,169 ) $ ( 50,182 )

Basic and diluted net loss per common share available to common stockholders of Live Nation $ ( 0.25 ) $ ( 0.39 )

Weighted average common shares outstanding:

Basic 225,761,777 216,888,355 224,123,130 215,716,239

Diluted 243,686,803 223,800,400 239,617,920 215,716,239

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

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

$ 361,402 $ 46,878 $ 499,020 $ ( 455,980 )

Basic and diluted 228,162,831 221,890,625

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

Net loss attributable to common stockholders of Live Nation $ ( 3,169 ) $ ( 50,182 )

Accretion of redeemable noncontrolling interests ( 54,933 ) ( 35,714 )

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

$ 331,487 $ 42,633 $ 401,297 $ ( 460,190 )

Convertible debt interest, net of tax 6,365 — 12,124 —

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

Net loss available to common stockholders of Live Nation—basic and diluted

$ ( 58,102 ) $ ( 85,896 )

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Net income (loss) $ 44,192 $ ( 48,956 )

Other comprehensive income (loss), net of tax:

Unrealized gain on cash flow hedge 18,522 852 50,178 10,160

Other comprehensive income, net of tax:

Unrealized gain (loss) on cash flow hedge ( 3,949 ) 23,969

Realized loss (gain) on cash flow hedge ( 3,548 ) 1,902

Foreign currency translation adjustments 80,148 37,752

Comprehensive income (loss) 373,091 77,702 570,905 ( 440,303 )

Comprehensive income (loss) attributable to noncontrolling interests

36,001 39,989 77,804 9,665

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

Comprehensive income 116,843 14,667

Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to common stockholders of Live Nation

$ 69,482 $ 13,441

5 unchanged sentences

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

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

Balances at December 31, 2022 228,498,102 $ 2,285 $ 2,698,316 $ ( 2,971,229 ) $ ( 6,865 ) $ ( 90,076 ) $ 461,366 $ 93,797 $ 669,766

Non-cash and stock-based compensation — — 27,571 — — — — 27,571 —

1 unchanged sentence

Exercise of stock options 19,962 1 993 — — — — 994 —

Repurchase of 2.5% convertible senior notes due 2023 156,750 2 ( 27,327 ) — — — — ( 27,325 ) —

Capped call transactions for 3.125% convertible senior notes due 2029 — — ( 75,500 ) — — — — ( 75,500 ) —

Acquisitions — — — — — — 58,466 58,466 12,308

5 unchanged sentences

Comprehensive income (loss):

Net income — — — 361,402 — — 40,555 401,957 ( 4,554 )

Unrealized gain on cash flow hedge — — — — — 18,522 — 18,522 —

Net income (loss) — — — ( 3,169 ) — — 41,891 38,722 5,470

Unrealized loss on cash flow hedge — — — — — ( 3,949 ) — ( 3,949 ) —

Realized gain on cash flow hedge — — — — — ( 3,548 ) — ( 3,548 ) —

Foreign currency translation adjustments — — — — — 80,148 — 80,148 —

Balances at September 30, 2022 227,137,581 $ 2,271 $ 2,852,112 $ ( 2,768,195 ) $ ( 6,865 ) $ ( 153,883 ) $ 473,116 $ 398,556 $ 598,981

Balance at March 31, 2023 228,859,789 $ 2,289 $ 2,535,553 $ ( 2,974,398 ) $ ( 6,865 ) $ ( 17,425 ) $ 539,992 $ 79,146 $ 710,350

See Notes to Consolidated Financial Statements

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Comprehensive income (loss):

Net income — — — 499,020 — — 80,683 579,703 ( 2,879 )

Unrealized gain on cash flow hedge — — — — — 50,178 — 50,178 —

Realized loss on cash flow hedge — — — — — 2,634 — 2,634 —

Foreign currency translation adjustments — — — — — ( 58,731 ) — ( 58,731 ) ( 151 )

Balances at September 30, 2022 227,137,581 $ 2,271 $ 2,852,112 $ ( 2,768,195 ) $ ( 6,865 ) $ ( 153,883 ) $ 473,116 $ 398,556 $ 598,981

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

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

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

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

Non-cash and stock-based compensation — — 27,318 — — — — 27,318 —

Common stock issued under stock plans, net of shares withheld for employee taxes 151,280 1 ( 4,523 ) — — — — ( 4,522 ) —

Exercise of stock options, net of shares withheld for option cost and employee taxes 70,011 1 2,238 — — — — 2,239 —

Sale of common shares 5,239,259 52 449,363 — — — — 449,415 —

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

Acquisitions — — — — — — 7,117 7,117 230

Redeemable noncontrolling interests fair value adjustments — — ( 4,245 ) — — — — ( 4,245 ) 4,245

Contributions received — — — — — — 1,329 1,329 —

Cash distributions — — — — — — ( 8,341 ) ( 8,341 ) ( 2,749 )

Other — — — — — — ( 331 ) ( 331 ) —

Comprehensive income (loss):

Net income — — — 46,878 — — 30,135 77,013 9,854

Unrealized loss on cash flow hedge — — — — — 852 — 852 —

Realized loss on cash flow hedge — — — — — 1,991 — 1,991 —

Foreign currency translation adjustments — — — — — ( 12,008 ) — ( 12,008 ) —

Balances at September 30, 2021 221,849,027 $ 2,218 $ 2,903,613 $ ( 3,132,813 ) $ ( 6,865 ) $ ( 170,997 ) $ 363,068 $ ( 41,776 ) $ 262,347

See Notes to Consolidated Financial Statements

Live Nation Stockholders’ Equity

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

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

Non-cash and stock-based compensation — — 80,165 — — — — 80,165 —

Common stock issued under stock plans, net of shares withheld for employee taxes 812,829 8 ( 24,593 ) — — — — ( 24,585 ) —

Exercise of stock options, net of shares withheld for employee taxes 1,329,951 13 12,162 — — — — 12,175 —

Sale of common shares 5,239,259 52 449,363 — — — — 449,415 —

Acquisitions — — — — — — 7,117 7,117 828

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

Sales of noncontrolling interests — — 161 — — — 8,868 9,029 —

Redeemable noncontrolling interests fair value adjustments — — ( 4,210 ) — — — — ( 4,210 ) 4,210

Contributions received — — — — — — 16,522 16,522 95

Cash distributions — — — — — — ( 20,852 ) ( 20,852 ) ( 4,780 )

Other — — — — — — ( 2,452 ) ( 2,452 ) —

Comprehensive income (loss):

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

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Foreign currency translation adjustments — — — — — 37,752 — 37,752 —

Balances at September 30, 2021 221,849,027 $ 2,218 $ 2,903,613 $ ( 3,132,813 ) $ ( 6,865 ) $ ( 170,997 ) $ 363,068 $ ( 41,776 ) $ 262,347

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

See Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

6 unchanged sentences

Amortization of debt issuance costs and discounts 4,630 4,114

Loss on extinguishment of debt 18,366 —

Stock-based compensation expense 27,571 49,241

2 unchanged sentences

Provision for uncollectible accounts receivable 6,054 ( 536 )

Gain on sale of investments in nonconsolidated affiliates ( 393 ) ( 83,580 )

Other, net ( 307 ) 6,078

2 unchanged sentences

Increase in prepaid expenses and other assets ( 369,494 ) ( 338,017 )

Increase in accounts payable, accrued expenses and other liabilities 1,536,196 1,323,448

Increase (decrease) in deferred revenue ( 435,701 ) 551,059

Increase (decrease) in accounts payable, accrued expenses and other liabilities ( 460,749 ) 236,584

Increase in deferred revenue 1,896,145 1,310,527

Net cash provided by operating activities 1,155,848 1,198,300

4 unchanged sentences

Purchases of property, plant and equipment ( 116,886 ) ( 62,525 )

Cash paid for acquisitions, net of cash acquired ( 38,770 ) ( 19,594 )

Purchases of intangible assets ( 6,764 ) ( 6,681 )

Proceeds from sale of investments in nonconsolidated affiliates 3,863 80,593

Cash acquired from (paid for) acquisitions, net of cash paid (acquired) 96,382 ( 13,962 )

Other, net ( 2,076 ) ( 533 )

6 unchanged sentences

Purchases and sales of noncontrolling interests, net ( 21,606 ) ( 105 )

Proceeds from sale of common stock, net of issuance costs — 449,415

Payments for capped call transactions ( 75,500 ) —

Proceeds from exercise of stock options 994 10,907

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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.

Cash flows from our Concerts segment typically have a slightly different seasonality as partial 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 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 promoter’s share of tickets in allocation markets.

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

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

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

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

Variable Interest Entities

In the normal course of business, we enter into joint ventures or make investments in companies that will allow us to expand our core business and enter new markets.

In certain instances, such ventures or investments may be considered a VIE because the equity owners or the equity holders, as a group, lack the characteristics of a controlling financial interest.

In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

The activities we believe most significantly impact the economic performance of our VIEs include the unilateral ability to approve the annual budget, to terminate key management and to approve entering into agreements with artists, among others.

We have certain rights and obligations related to our involvement in the VIEs, including the requirement to provide operational cash flow funding.

As of March 31, 2023 and December 31, 2022, excluding intercompany balances and allocated goodwill and intangible assets, there were approximately $ 938 million and $ 514 million of assets and $ 791 million and $ 427 million of liabilities, respectively, related to VIEs included in our balance sheets.

None of our VIEs are significant on an individual basis.

Cash and Cash Equivalents

Included in the September 30, 2022 and December 31, 2021 cash and cash equivalents balance is $ 1.3 billion 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 March 31, 2023 and December 31, 2022 cash and cash equivalents balance is $ 1.4 billion and $ 1.5 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.

1 unchanged sentence

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

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

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

As of March 31, 2023, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses.

As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first three months of 2023.

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

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Accounting Pronouncements - Adopted

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

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

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

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

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

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 increased our current portion of long-term debt, net and long-term debt, net by $ 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— BUSINESS ACQUISITIONS

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

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

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

OCESA Acquisition

Description of Transaction

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

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

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

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

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

Recording of Assets Acquired and Liabilities Assumed

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

Initial Allocation

(in thousands)

Fair value of consideration transferred $ 431,943

Adjustments for working capital 2,269

Fair value of redeemable noncontrolling interests 280,000

Fair value of noncontrolling interests 7,000

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

Preliminary recognized amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents 105,118

Accounts receivable 90,575

Prepaid expenses 33,060

Other current assets 658

Property, plant and equipment 25,221

Operating lease assets 67,193

Intangible assets 337,000

Investments in nonconsolidated affiliates 30,000

Other long-term assets 36,525

Accounts payable, client accounts ( 12,566 )

Accounts payable ( 13,344 )

Accrued expenses ( 71,209 )

Deferred revenue ( 144,557 )

Current portion of operating lease liabilities ( 9,209 )

Long-term operating lease liabilities ( 57,984 )

Long-term deferred income taxes ( 101,379 )

Goodwill $ 456,110

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 growth in concert promotion, 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 $ 46.7 million, $ 165.0 million and $ 244.4 million has been allocated to the Concerts, Ticketing and Sponsorship & Advertising segments, respectively, as a result of the Acquisition.

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

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

In estimating the fair value of the acquired intangible assets, we utilized the valuation

methodology determined to be most appropriate for the individual intangible asset being valued.

The acquired definite-lived intangible assets include the following:

Preliminary Estimated Fair Value Preliminary Estimated Useful Lives (1)

(in thousands) (years)

Client/vendor relationships $ 100,000 10

Revenue-generating contracts 90,000 4 to 10

Venue management and leaseholds 107,000 10

Trademarks and naming rights 40,000 10

Total acquired intangible assets $ 337,000

_____________________

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

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

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

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

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

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

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

Actual and Pro Forma Impact of Acquisition

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

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

We incurred a cumulative total of $ 13.2 million of acquisition transaction expenses relating to the Acquisition, of which $ 0.9 million and $ 0.8 million are included in selling, general and administrative expenses within our consolidated statements of operations for the nine months ended September 30, 2022 and 2021, respectively.

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

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 3— LONG-LIVED ASSETS

In October 2021, the FASB issued Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers.

This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption is permitted.

We adopted this guidance on January 1, 2023.

The adoption did not have a material impact on our consolidated financial statements.

NOTE 2—LONG-LIVED ASSETS, INTANGIBLES, AND GOODWILL

Property, Plant and Equipment, Net

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

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Definite-lived Intangible Assets

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

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the three months ended March 31, 2023:

relationships Revenue-

contracts Venue management and leaseholds Trademarks

rights Technology Other (1)

rights Technology and Other (1)

(in thousands)

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( 18,910 ) ( 26,175 ) ( 4,029 ) ( 4,765 ) ( 3,596 ) ( 57,475 )

Dispositions — — — — 464 464

Foreign exchange ( 1,396 ) ( 1,861 ) ( 372 ) ( 479 ) ( 219 ) ( 4,327 )

1 unchanged sentence

Net change ( 14,979 ) ( 5,574 ) ( 4,343 ) 8,343 13,791 ( 2,762 )

Balance as of September 30, 2022:

Balance as of March 31, 2023:

Gross carrying amount

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

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

Included in the current year acquisitions amounts above are definite-lived intangible assets primarily associated with the acquisitions of certain venue management businesses located in the United States.

The 2023 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:

Revenue-generating contracts 5

Client/vendor relationships 3

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All categories 8

Amortization of definite-lived intangible assets for the three months ended September 30, 2022 and 2021 was $ 48.1 million and $ 46.1 million, and for the nine months ended September 30, 2022 and 2021 was $ 150.4 million and $ 146.6 million, respectively.

Amortization of definite-lived intangible assets for the three months ended March 31, 2023 and 2022 was $ 57.5 million and $ 49.7 million, respectively.

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

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

The following table presents our estimate of amortization expense for the remainder of the current year and the four succeeding fiscal years for definite-lived intangible assets that exist at March 31, 2023:

(in thousands)

Remainder of 2023 $ 155,399

2024 $ 190,765

2025 $ 159,011

2026 $ 132,081

2027 $ 106,473

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the three months ended March 31, 2023:

Concerts Ticketing Sponsorship

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Acquisitions—prior year 114 ( 106 ) — 8

Dispositions ( 1,792 ) — — ( 1,792 )

Foreign exchange 6,263 16,716 13,746 36,725

Balance as of September 30, 2022:

Balance as of March 31, 2023:

Goodwill 1,367,007 996,352 649,321 3,012,680

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Investments in Nonconsolidated Affiliates

At September 30, 2022 and December 31, 2021, we had investments in nonconsolidated affiliates of $ 355.6 million and $ 293.6 million, respectively, included in other long-term assets on our consolidated balance sheets.

During the nine months ended September 30, 2021, we sold certain investments in nonconsolidated affiliates for $ 101.1 million in cash and noncash consideration resulting in a gain on sale of investments in nonconsolidated affiliates of $ 83.6 million.

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

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

We recognized $ 5.6 million and $ 25.0 million of noncash additions to investments in nonconsolidated affiliates for the nine months ended September 30, 2022 and 2021, respectively, which are included in other long-term assets on our consolidated balance sheets associated with these agreements.

At March 31, 2023 and December 31, 2022, we had investments in nonconsolidated affiliates of $ 361.5 million and $ 408.8 million, respectively, included in other long-term assets on our consolidated balance sheets.

NOTE 3—LEASES

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

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

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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Lease assets obtained in exchange for lease obligations, net of terminations $ 43,636 $ 157,244

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

As of March 31, 2023, we have additional operating leases that have not yet commenced, with total lease payments of $ 174.5 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from April 2023 to June 2030 due to certain offices and venues under construction with lease terms ranging from 2 to 30 years.

NOTE 4—LONG-TERM DEBT

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

March 31, 2023 December 31, 2022

(in thousands)

Senior Secured Credit Facility:

Term loan A $ 377,500 $ 382,500

Term loan B 843,459 845,644

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

3.75% Senior Secured Notes due 2028 500,000 500,000

4.875% Senior Notes due 2024 575,000 575,000

5.625% Senior Notes due 2026 300,000 300,000

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

2.5% Convertible Senior Notes due 2023 — 550,000

2.0% Convertible Senior Notes due 2025 400,000 400,000

3.125% Convertible Senior Notes due 2029 1,000,000 —

Other long-term debt 528,932 252,199

Total principal amount 6,674,891 5,955,343

unamortized discounts and debt issuance costs ( 63,110 ) ( 51,844 )

Total long-term debt, net of unamortized discounts and debt issuance costs 6,611,781 5,903,499

current portion 63,870 620,032

Total long-term debt, net $ 6,547,911 $ 5,283,467

Future maturities of long-term debt at March 31, 2023 are as follows:

(in thousands)

Remainder of 2023 $ 55,837

2024 1,476,446

2026 1,394,267

2027 2,155,327

Thereafter 1,541,211

Total lease payments 2,718,793

Interest 887,785

Present value of lease liabilities $ 1,831,008

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

September 30, 2022 December 31, 2021

Weighted average remaining lease term (in years) 13.6 13.2

Weighted average discount rate 5.96 % 6.10 %

As of September 30, 2022, we have additional operating leases that have not yet commenced, with total lease payments of $ 201.8 million.

These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from October 2022 to June 2030, with lease terms ranging from 2 to 40 years.

Total $ 6,674,891

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.

See Note 5 – Fair Value Measurements for discussion of the fair value measurement of our long-term debt.

3.125% Convertible Senior Notes due 2029

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

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, at our election, shares of common stock or cash or a combination of cash and shares of common stock.

Assuming we fully settle the notes in shares, the maximum number of shares that could be issued to satisfy the conversion is 13.8 million as of March 31, 2023.

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.

As of March 31, 2023, the remaining period for the unamortized debt issuance costs balance of $ 15.0 million was approximately six 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 March 31, 2023, the effective interest rate on the notes was 3.4 %.

In connection with the issuance of the 3.125 % convertible senior notes due 2029, we entered into privately negotiated capped call transactions with several 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 a $ 75.5 million impact to additional paid-in capital.

Debt Extinguishment

In conjunction with the issuance of the 3.125 % convertible senior notes due 2029, we used approximately $ 485.8 million of the net proceeds 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 $ 27.3 million.

On March 15, 2023, we redeemed the remaining $ 110.0 million aggregate principal amount of the 2.5 % convertible senior notes and issued 156,750 common shares of stock.

Senior Secured Facility Amendment

In February 2023, we amended our senior secured credit facility.

The amendments provides for, among other things:

(i) replacement of the benchmark reference rate of the Eurodollar Rate (as defined in the Credit Agreement) with the Term SOFR Rate for borrowings denominated in Dollars and for each Alternative Currency (as defined in the 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.

Other Long-term Debt

As of March 31, 2023, other long-term debt includes $ 270.7 million for a note due in 2026 related to an acquisition of a venue management business during the first quarter of 2023 in the United States.

NOTE 5—FAIR VALUE MEASUREMENTS

1 unchanged sentence

Estimated Fair Value

September 30, 2022

March 31, 2023

December 31, 2022

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Cash equivalents $ 794,275 $ — $ 794,275 $ 503,964 $ — $ 503,964

Interest rate swap — 44,254 44,254 — — —

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

Interest rate swaps — 43,400 43,400 — 41,515 41,515

Cash equivalents consist of money market funds.

Fair values for cash equivalents are based on quoted prices in an active market.

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

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

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

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Estimated Fair Value at

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

6 unchanged sentences

2.0% Convertible Senior Notes due 2025 $ 391,052 $ 397,536

3.125% Convertible Senior Notes due 2029 $ 985,040 $ —

The estimated fair value of our third-party fixed-rate debt is based on quoted market prices in active markets for the same or similar debt, which are considered to be Level 2 inputs.

NOTE 6— COMMITMENTS AND CONTINGENT LIABILITIES

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

Consumer Class Actions

11 unchanged sentences

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

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

Based on these allegations, each

plaintiff asserts violations of different provincial and federal laws.

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

1 unchanged sentence

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.

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.

A hearing on the parties’ motions for leave to appeal took place in March 2023.

The class certification hearing in the Thompson-Marcial matter has not yet been scheduled.

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.

8 unchanged sentences

Discovery is underway.

A confidential settlement was reached with the family of one of the deceased plaintiffs, and the family’s case was dismissed with prejudice against all defendants in August 2022.

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.

3 unchanged sentences

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

Other Litigation

From time to time, we are involved in other legal proceedings arising in the ordinary course of our business, including proceedings and claims based upon purported violations of antitrust laws, intellectual property rights and tortious interference, which could cause us to incur significant expenses.

We have also been the subject of personal injury and wrongful death claims relating to accidents at our venues in connection with our operations.

As required, we have accrued our estimate of the probable settlement or other losses for the resolution of any outstanding claims.

These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, including, in some cases, estimated redemption rates for the settlement offered, assuming a combination of litigation and settlement strategies.

It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings.

NOTE 7—EQUITY

Accumulated Other Comprehensive Income (Loss)

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

The following table presents changes in the components of AOCI, net of taxes, for the three months ended March 31, 2023:

Cash Flow Hedge Foreign Currency Items Total

5 unchanged sentences

Net other comprehensive income ( 7,497 ) 80,148 72,651

Balance at September 30, 2022 $ 44,254 $ ( 198,137 ) $ ( 153,883 )

Balance at March 31, 2023 $ 33,786 $ ( 51,211 ) $ ( 17,425 )

Earnings Per Share

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Weighted average common shares—basic 225,761,777 216,888,355 224,123,130 215,716,239

Effect of dilutive securities:

Stock options and restricted stock 6,060,991 6,912,045 7,409,515 —

Convertible senior notes 11,864,035 — 8,085,275 —

Weighted average common shares—diluted 243,686,803 223,800,400 239,617,920 215,716,239

For the three months ended March 31, 2023 and 2022, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net loss per common share.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Options to purchase shares of common stock 3,237,229 6,705,816

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Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding 19,835,291 22,375,537

Restricted Stock

On July 1, 2022, we granted 1.1 million shares of market-based awards with a fair value of $ 75.3 million, which will vest and be settled in restricted common stock under the Company’s stock incentive plan upon attainment of certain stock price targets during the performance period.

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

NOTE 8— REVENUE RECOGNITION

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

As we moved into 2022, more of our larger markets resumed shows and beginning in the second quarter of 2022, almost all markets had re-opened without restrictions, and we began to see the easing of restrictions in our Asia Pacific markets.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Total Concerts Revenue $ 5,292,594 $ 2,151,596 $ 10,098,180 $ 2,677,970

Percentage of consolidated revenue 86.0 % 79.7 % 81.5 % 75.1 %

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.

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.

Over 95 % of Concerts’ revenue, whether related to promotion, venue operations, artist management or artist event merchandising, is recognized on the day of the related event.

The majority of consideration for our Concerts segment is collected in advance of, or on the day of, the event.

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Total Ticketing Revenue $ 531,570 $ 374,237 $ 1,587,274 $ 646,560

Percentage of consolidated revenue 8.6 % 13.9 % 12.8 % 18.1 %

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

Our Ticketing segment does 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.

For our concert events where our concert promoters control ticketing, ticket fee revenue is recognized when the event occurs because we also have the obligation to deliver the event to the fan.

The delivery of the ticket to the fan is not considered a distinct performance obligation for our concert events because the fan cannot receive the benefits of the ticket unless we also fulfill our obligation to deliver the event.

The majority of ticket fee revenue is collected within the month of the ticket sale.

Revenue received from the sale of tickets in advance of our concert events is recorded as deferred revenue or in other long-term liabilities if the date of the event is more than twelve months from the balance sheet date.

Reported revenue is net of any refunds made or committed to and also the impact of any cancellations of events that occurred during the period.

Ticketing contract advances, which can be either recoupable or non-recoupable, represent amounts paid in advance to our clients pursuant to ticketing agreements and are reflected in prepaid expenses or in long-term advances if the amount is expected to be recouped or recognized over a period of more than twelve months.

Recoupable ticketing contract advances are generally recoupable against future royalties earned by the client, based on the contract terms, over the life of the contract.

Royalties are typically earned by the client when tickets are sold.

Royalties paid to clients are recorded as a reduction to revenue when the tickets are sold and the corresponding service charge revenue is recognized.

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

At September 30, 2022 and December 31, 2021, we had ticketing contract advances of $ 110.1 million and $ 90.5 million, respectively, recorded in prepaid expenses and $ 85.5 million and $ 86.5 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 15.7 million and $ 20.5 million for the three months ended September 30, 2022 and 2021, respectively, and $ 56.1 million and $ 49.2 million for the nine months ended September 30, 2022 and 2021, respectively, related to non-recoupable ticketing contract advances.

Sponsorship & Advertising

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Total Sponsorship & Advertising Revenue $ 343,029 $ 174,449 $ 722,504 $ 241,657

Percentage of consolidated revenue 5.6 % 6.5 % 5.8 % 6.8 %

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

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

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

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

Revenue from sponsorship agreements is allocated to the multiple elements based on the relative stand-alone selling price of each separate element, which are determined using vendor-specific evidence, third-party evidence or our best estimate of the fair value.

Revenue is recognized over the term of the agreement or operating season as the benefits are provided to the sponsor unless the revenue is associated with a specific event, in which case it is recognized when the event occurs.

Revenue is collected in installment payments during the year, typically in advance of providing the benefit or the event.

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

At September 30, 2022, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.3 billion of revenue related to future benefits to be provided by us.

We expect to recognize, based on current projections, approximately 10 %, 36 %, 23 % and 31 % of this revenue in the remainder of 2022, 2023, 2024 and thereafter, respectively.

Deferred Revenue

The majority of our deferred revenue is typically classified as current and is shown as a separate line item on the consolidated balance sheets.

Deferred revenue that is not expected to be recognized within the next twelve months is classified as long-term and reflected in other long-term liabilities on the consolidated balance sheets.

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Concerts $ 825,573 $ 278,557 $ 2,135,814 $ 330,852

Ticketing 40,803 24,159 120,543 31,950

Sponsorship & Advertising 36,703 43,437 128,035 58,070

$ 903,079 $ 346,153 $ 2,384,392 $ 420,872

NOTE 9— 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 or streaming of associated content and the provision of management and other services to artists.

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

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.

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

NOTE 8—SEGMENTS AND REVENUE RECOGNITION

For the three months ended March 31, 2023 and 2022, 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.

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

The following table presents the results of operations for our reportable segments for the three months ended March 31, 2023 and 2022:

Concerts Ticketing Sponsorship

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(in thousands)

Three Months Ended September 30, 2022

Revenue $ 5,292,594 $ 531,570 $ 343,029 $ ( 13,658 ) $ — $ 6,153,535

Intersegment revenue $ 4,408 $ 9,748 $ — $ ( 14,156 ) $ — $ —

AOI $ 280,809 $ 163,176 $ 226,234 $ ( 3,420 ) $ ( 46,081 ) $ 620,718

Three Months Ended September 30, 2021

Revenue $ 2,151,596 $ 374,237 $ 174,449 $ ( 1,560 ) $ — $ 2,698,722

Intersegment revenue $ 1,473 $ 630 $ — $ ( 2,103 ) $ — $ —

AOI $ 59,578 $ 171,754 $ 111,211 $ ( 1,179 ) $ ( 35,684 ) $ 305,680

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Revenue $ 2,281,212 $ 677,741 $ 170,118 $ ( 1,681 ) $ — $ 3,127,390

% of Consolidated Revenue 72.9 % 21.7 % 5.4 % — %

Intersegment revenue $ 898 $ 783 $ — $ ( 1,681 ) $ — $ —

AOI $ 832 $ 271,051 $ 95,531 $ ( 7,939 ) $ ( 39,765 ) $ 319,710

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Revenue $ 1,207,825 $ 480,399 $ 115,689 $ ( 1,105 ) $ — $ 1,802,808

% of Consolidated Revenue 67.0 % 26.6 % 6.4 % — %

Intersegment revenue $ 652 $ 1,266 $ — $ ( 1,918 ) $ — $ —

AOI $ ( 49,166 ) $ 206,220 $ 69,700 $ ( 4,380 ) $ ( 13,335 ) $ 209,039

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

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

The following table sets forth the reconciliation of consolidated AOI to operating income for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

(in thousands)

1 unchanged sentence

Acquisition expenses 13,311 12,077

Amortization of non-recoupable ticketing contract advance 15,729 20,486 56,121 49,214

Amortization of non-recoupable ticketing contract advances 20,363 18,527

Depreciation and amortization 115,185 100,469

Gain on sale of operating assets ( 35,285 ) ( 1,148 ) ( 32,555 ) ( 1,038 )

Loss on disposal of operating assets 504 1,665

Stock-based compensation expense 27,571 49,241

Operating income (loss) $ 506,249 $ 137,145 $ 852,008 $ ( 293,312 )

Operating income $ 142,776 $ 27,060

Contract Advances

At March 31, 2023 and December 31, 2022, we had ticketing contract advances of $ 87.8 million and $ 106.5 million, respectively, recorded in prepaid expenses and $ 106.2 million and $ 105.0 million, respectively, recorded in long-term advances on the consolidated balance sheets.

We amortized $ 20.4 million and $ 18.5 million for the three months ended March 31, 2023 and 2022, respectively, related to non-recoupable ticketing contract advances.

Sponsorship Agreements

At March 31, 2023, we had contracted sponsorship agreements with terms greater than one year that had approximately $ 1.5 billion of revenue related to future benefits to be provided by us.

We expect to recognize, based on current projections, approximately 30 %, 26 %, 19 % and 25 % of this revenue in the remainder of 2023, 2024, 2025 and thereafter, respectively.

Deferred Revenue

The majority of our deferred revenue is typically classified as current and is shown as a separate line item on the consolidated balance sheets.

Deferred revenue that is not expected to be recognized within the next twelve months is classified as long-term and reflected in other long-term liabilities on the consolidated balance sheets.

We had current deferred revenue of $ 3.1 billion and $ 2.8 billion at December 31, 2022 and 2021, respectively.

The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three months ended March 31, 2023 and 2022:

Three Months Ended

(in thousands)

Concerts $ 681,380 $ 278,546

Ticketing 34,600 23,043

Sponsorship & Advertising 50,680 34,239

$ 766,660 $ 335,828

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

What changed 10-Q

Item 1. Financial Statements