lyv-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

Form 10-Q

____________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-32601

____________________________________

LIVE NATION ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

____________________________________


Delaware						20-3247759
(State of Incorporation)						(I.R.S. Employer Identification No.)

9348 Civic Center Drive

Beverly Hills, CA 90210

(Address of principal executive offices, including zip code)

(310) 867-7000

(Registrant’s telephone number, including area code)

______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $.01 Par Value Per Share

LYV

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

On July 20, 2023, there were 230,151,239 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 1,474,521 shares of unvested restricted stock awards and excluding 408,024 shares held in treasury.

LIVE NATION ENTERTAINMENT, INC.

INDEX TO FORM 10-Q


		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Consolidated Balance Sheets (Unaudited) as of June 30 , 2023 and December 31, 2022	2
	Consolidated Statements of Operations (Unaudited) for the three and si x months ended June 30 , 2023 and 2022	3
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and six months ended June 30 , 2023 and 2022	4
	Consolidated Statements of Changes in Equity (Unaudited) for the three and six months ended June 30 , 2023 and 2022	5
	Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30 , 2023 and 2022	9
	Notes to Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 5.	Other Information	38
Item 6.	Exhibits	39


GLOSSARY OF KEY TERMS
AOCI			Accumulated other comprehensive income (loss)
AOI			Adjusted operating income (loss)





FASB			Financial Accounting Standards Board
GAAP			United States Generally Accepted Accounting Principles

GTV			Gross transaction value
LIBOR			London Inter-Bank Offered Rate
Live Nation			Live Nation Entertainment, Inc. and subsidiaries
LNE			Live Nation Entertainment, Inc.
SEC			United States Securities and Exchange Commission
SOFR			Secured Overnight Financing Rate
Ticketmaster			Our ticketing business
VIE			Variable interest entities

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	June 30, 2023		December 31, 2022
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	7,128,873	$	5,606,457
Accounts receivable, less allowance of $66,669 and $63,294, respectively	1,889,652		1,465,383
Prepaid expenses	1,628,578		949,826
Restricted cash	7,769		5,917
Other current assets	122,076		131,939
Total current assets	10,776,948		8,159,522
Property, plant and equipment, net	1,904,020		1,487,663
Operating lease assets	1,582,873		1,571,395
Intangible assets
Definite-lived intangible assets, net	1,118,166		1,050,622
Indefinite-lived intangible assets, net	378,181		368,712
Goodwill	2,619,356		2,529,380
Long-term advances	654,938		568,558
Other long-term assets	890,608		724,989
Total assets	$	19,925,090	$	16,460,841
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, client accounts	$	1,670,651	$	1,791,025
Accounts payable	293,865		180,076
Accrued expenses	2,778,581		2,368,434
Deferred revenue	5,025,871		3,134,800
Current portion of long-term debt, net	51,489		620,032
Current portion of operating lease liabilities	146,931		140,232
Other current liabilities	56,143		68,716
Total current liabilities	10,023,531		8,303,315
Long-term debt, net	6,554,697		5,283,467
Long-term operating lease liabilities	1,659,898		1,654,525

Other long-term liabilities	562,016		455,971
Commitments and contingent liabilities
Redeemable noncontrolling interests	753,519		669,766
Stockholders' equity
Common stock	2,291		2,285
Additional paid-in capital	2,438,660		2,698,316
Accumulated deficit	(2,680,716)		(2,971,229)
Cost of shares held in treasury	(6,865)		(6,865)
Accumulated other comprehensive income (loss)	59,253		(90,076)
Total Live Nation stockholders' equity	(187,377)		(367,569)
Noncontrolling interests	558,806		461,366
Total equity	371,429		93,797
Total liabilities and equity	$	19,925,090	$	16,460,841

See Notes to Consolidated Financial Statements

Table of Contents

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands except share and per share data)
Revenue	$	5,630,723	$	4,434,174	$	8,758,113	$	6,236,982
Operating expenses:
Direct operating expenses	4,164,778		3,267,023		6,280,367		4,338,045
Selling, general and administrative expenses	868,595		672,213		1,558,916		1,242,395
Depreciation and amortization	136,514		115,927		251,699		216,396
Loss (gain) on disposal of operating assets	(7,013)		1,065		(6,509)		2,730
Corporate expenses	81,478		59,247		144,493		91,657
Operating income	386,371		318,699		529,147		345,759
Interest expense	81,995		68,435		171,210		135,208
Loss on extinguishment of debt	—		—		18,366		—
Interest income	(56,452)		(13,192)		(96,765)		(20,756)
Equity in earnings of nonconsolidated affiliates	(5,558)		(1,955)		(9,665)		(6,243)
Other expense (income), net	(6,599)		5,039		4,984		14,438
Income before income taxes	372,985		260,372		441,017		223,112
Income tax expense	41,648		31,995		65,488		43,691
Net income	331,337		228,377		375,529		179,421
Net income attributable to noncontrolling interests	37,655		40,577		85,016		41,803
Net income attributable to common stockholders of Live Nation	$	293,682	$	187,800	$	290,513	$	137,618

Basic net income per common share available to common stockholders of Live Nation	$	1.04	$	0.69	$	0.78	$	0.31
Diluted net income per common share available to common stockholders of Live Nation	$	1.02	$	0.66	$	0.78	$	0.30

Weighted average common shares outstanding:
Basic	228,536,179		224,674,447		228,350,537		223,290,226
Diluted	243,660,186		243,634,764		230,490,937		231,367,674


Reconciliation to net income available to common stockholders of Live Nation:
Net income attributable to common stockholders of Live Nation	$	293,682	$	187,800	$	290,513	$	137,618
Accretion of redeemable noncontrolling interests	(56,621)		(32,560)		(111,554)		(68,274)
Net income available to common stockholders of Live Nation—basic	$	237,061	$	155,240	$	178,959	$	69,344
Convertible debt interest, net of tax	10,804		6,365		—		—
Net income available to common stockholders of Live Nation—diluted	$	247,865	$	161,605	$	178,959	$	69,344

See Notes to Consolidated Financial Statements

Table of Contents

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Net income	$	331,337	$	228,377	$	375,529	$	179,421
Other comprehensive income, net of tax:
Unrealized gain on cash flow hedge	11,658		7,687		7,709		31,656
Realized loss (gain) on cash flow hedge	(4,256)		1,247		(7,804)		3,149
Foreign currency translation adjustments	69,276		(54,164)		149,424		(16,412)
Comprehensive income	408,015		183,147		524,858		197,814
Comprehensive income attributable to noncontrolling interests	37,655		40,577		85,016		41,803
Comprehensive income attributable to common stockholders of Live Nation	$	370,360	$	142,570	$	439,842	$	156,011

See Notes to Consolidated Financial Statements

Table of Contents

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


	Live Nation Stockholders’ Equity
	Common Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Cost of Shares Held in Treasury		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	(in thousands, except share data)															(in thousands)
Balances 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

Non-cash and stock-based compensation	—	—		27,763		—		—		—		—		27,763		—
Common stock issued under stock plans, net of shares withheld for employee taxes	32,526	1		(516)		—		—		—		—		(515)		—
Exercise of stock options	191,879	1		4,004		—		—		—		—		4,005		—

Acquisitions	—	—		—		—		—		—		8,777		8,777		13,988

Purchases of noncontrolling interests	—	—		(71,776)		—		—		—		(15,684)		(87,460)		659

Redeemable noncontrolling interests fair value adjustments	—	—		(56,368)		—		—		—		—		(56,368)		56,368
Contributions received	—	—		—		—		—		—		8,772		8,772		—
Cash distributions	—	—		—		—		—		—		(30,484)		(30,484)		(52,210)
Other	—	—		—		—		—		—		26,295		26,295		7,847
Comprehensive income (loss):
Net income	—	—		—		293,682		—		—		21,138		314,820		16,517
Unrealized gain on cash flow hedge	—	—		—		—		—		11,658		—		11,658		—
Realized gain on cash flow hedge	—	—		—		—		—		(4,256)		—		(4,256)		—
Foreign currency translation adjustments	—	—		—		—		—		69,276		—		69,276		—
Balances at June 30, 2023	229,084,194	$	2,291	$	2,438,660	$	(2,680,716)	$	(6,865)	$	59,253	$	558,806	$	371,429	$	753,519

See Notes to Consolidated Financial Statements

Table of Contents


	Live Nation Stockholders’ Equity
	Common Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Cost of Shares Held in Treasury		Accumulated Other Comprehensive Income		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	(in thousands, except share data)															(in thousands)
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	—	—		55,334		—		—		—		—		55,334		—
Common stock issued under stock plans, net of shares withheld for employee taxes	217,501	2		(8,466)		—		—		—		—		(8,464)		—
Exercise of stock options	211,841	2		4,997		—		—		—		—		4,999		—
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	—	—		—		—		—		—		67,243		67,243		26,296

Purchases of noncontrolling interests	—	—		(97,648)		—		—		—		(27,090)		(124,738)		659

Redeemable noncontrolling interests fair value adjustments	—	—		(111,046)		—		—		—		—		(111,046)		111,046
Contributions received	—	—		—		—		—		—		14,631		14,631		85
Cash distributions	—	—				—		—		—		(74,693)		(74,693)		(62,916)
Other	—	—		—		—		—		—		54,320		54,320		(13,404)
Comprehensive income (loss):
Net income	—	—		—		290,513		—		—		63,029		353,542		21,987
Unrealized gain on cash flow hedge	—	—		—		—		—		7,709		—		7,709		—
Realized gain on cash flow hedge	—	—		—		—		—		(7,804)		—		(7,804)		—
Foreign currency translation adjustments	—	—		—		—		—		149,424		—		149,424		—
Balance at June 30, 2023	229,084,194	$	2,291	$	2,438,660	$	(2,680,716)	$	(6,865)	$	59,253	$	558,806	$	371,429	$	753,519

See Notes to Consolidated Financial Statements

Table of Contents


	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 March 31, 2022	223,531,301	$	2,235	$	2,888,551	$	(3,317,397)	$	(6,865)	$	(84,341)	$	372,200	$	(145,617)	$	581,652
Non-cash and stock-based compensation	—	—		13,221		—		—		—		—		13,221		—
Common stock issued under stock plans, net of shares withheld for employee taxes	544,593	6		(5,169)		—		—		—		—		(5,163)		—
Exercise of stock options	1,505,385	15		13,287		—		—		—		—		13,302		—



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

Purchases of noncontrolling interests	—	—		(20,846)		—		—		—		(4,774)		(25,620)		(1,457)
Redeemable noncontrolling interests fair value adjustments	—	—		(33,020)		—		—		—		—		(33,020)		32,560
Contributions received	—	—		—		—		—		—		9,190		9,190		—
Cash distributions	—	—		—		—		—		—		(18,162)		(18,162)		(8,986)
Other	—	—		(2,411)		—		—		—		46,449		44,038		(46,868)
Comprehensive income (loss):
Net income	—	—		—		187,800		—		—		35,477		223,277		5,100
Unrealized gain on cash flow hedge	—	—		—		—		—		7,687		—		7,687		—
Realized loss on cash flow hedge	—	—		—		—		—		1,247		—		1,247		—
Foreign currency translation adjustments	—	—		—		—		—		(54,164)		—		(54,164)		—
Balances at June 30, 2022	225,581,279	$	2,256	$	2,853,613	$	(3,129,597)	$	(6,865)	$	(129,571)	$	445,162	$	34,998	$	565,024

See Notes to Consolidated Financial Statements

Table of Contents


	Live Nation Stockholders’ Equity
	Common Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Cost of Shares Held in Treasury		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	(in thousands, except share data)															(in thousands)
Balances at December 31, 2021	221,964,734	$	2,220	$	2,897,695	$	(3,327,737)	$	(6,865)	$	(147,964)	$	394,197	$	(188,454)	$	551,921
Cumulative effect of change in accounting principle	—	—		(95,986)		60,522		—		—		—		(35,464)		—
Non-cash and stock-based compensation	—	—		174,811		—		—		—		—		174,811		—
Common stock issued under stock plans, net of shares withheld for employee taxes	1,097,262	11		(41,742)		—		—		—		—		(41,731)		—
Exercise of stock options	2,519,283	25		26,026		—		—		—		—		26,051		—


Acquisitions	—	—		—		—		—		—		5,181		5,181		8,677

Purchases of noncontrolling interests	—	—		(36,087)		—		—		—		(7,672)		(43,759)		(1,457)
Sales of noncontrolling interests	—	—		—		—		—		—		(336)		(336)		—
Redeemable noncontrolling interests fair value adjustments	—	—		(68,734)		—		—		—		—		(68,734)		68,274
Contributions received	—	—		—		—		—		—		15,402		15,402		25
Cash distributions	—	—				—		—		—		(49,970)		(49,970)		(16,144)
Other	—	—		(2,370)		—		—		—		48,232		45,862		(47,947)
Comprehensive income (loss):
Net income	—	—		—		137,618		—		—		40,128		177,746		1,675
Unrealized gain on cash flow hedge	—	—		—		—		—		31,656		—		31,656		—
Realized loss on cash flow hedge	—	—		—		—		—		3,149		—		3,149
Foreign currency translation adjustments	—	—		—		—		—		(16,412)		—		(16,412)		—
Balances at June 30, 2022	225,581,279	$	2,256	$	2,853,613	$	(3,129,597)	$	(6,865)	$	(129,571)	$	445,162	$	34,998	$	565,024

See Notes to Consolidated Financial Statements

Table of Contents

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended June 30,
	2023		2022
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	375,529	$	179,421
Reconciling items:
Depreciation	127,670		114,119
Amortization	124,029		102,277
Amortization of non-recoupable ticketing contract advances	41,597		40,392

Amortization of debt issuance costs and discounts	8,949		8,224
Loss on extinguishment of debt	18,366		—
Stock-based compensation expense	55,333		61,741
Unrealized changes in fair value of contingent consideration	20,100		18,010

Equity in losses of nonconsolidated affiliates, net of distributions	9,019		10,112
Provision for uncollectible accounts receivable	20,120		25,702
Loss (gain) on mark-to-market of equity investments	(26,408)		5,657
Other, net	4,918		3,928
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable	(395,516)		(440,290)
Increase in prepaid expenses and other assets	(836,672)		(607,939)

Increase in accounts payable, accrued expenses and other liabilities	298,718		972,906
Increase in deferred revenue	1,801,097		1,053,178
Net cash provided by operating activities	1,646,849		1,547,438
CASH FLOWS FROM INVESTING ACTIVITIES
Advances of notes receivable	(118,973)		(30,558)
Collections of notes receivable	8,286		11,074

Investments made in nonconsolidated affiliates	(26,336)		(46,699)
Purchases of property, plant and equipment	(202,531)		(130,278)

Cash acquired from (paid for) acquisitions, net of cash paid (acquired)	69,359		(39,854)
Purchases of intangible assets	(35,088)		(6,129)

Other, net	6,077		(2,292)
Net cash used in investing activities	(299,206)		(244,736)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt issuance costs	986,766		4,009
Payments on long-term debt	(614,030)		(22,638)
Contributions from noncontrolling interests	14,716		13,448
Distributions to noncontrolling interests	(137,609)		(66,114)
Purchases and sales of noncontrolling interests, net	(88,239)		(27,138)
Payments for capped call transactions	(75,500)		—
Proceeds from exercise of stock options	4,999		26,051
Taxes paid for net share settlement of equity awards	(8,464)		(41,731)
Payments for deferred and contingent consideration	(9,440)		(22,508)
Other, net	315		(1,014)
Net cash provided by (used in) financing activities	73,514		(137,635)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	103,111		(186,703)
Net increase in cash, cash equivalents, and restricted cash	1,524,268		978,364
Cash, cash equivalents and restricted cash at beginning of period	5,612,374		4,887,792
Cash, cash equivalents and restricted cash at end of period	$	7,136,642	$	5,866,156

See Notes to Consolidated Financial Statements

Table of Contents

LIVE NATION ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

Preparation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, they include all normal and recurring accruals and adjustments necessary to present fairly the results of the interim periods shown. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2022 Annual Report on Form 10-K filed with the SEC on February 23, 2023.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals, acquisition accounting and impairments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Seasonality

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 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 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. 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.

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 June 30, 2023 and December 31, 2022, excluding intercompany balances and allocated goodwill and intangible assets, there were approximately $882 million and $514 million of assets and $625 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 June 30, 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. These amounts due to our clients are included in accounts payable, client accounts.

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Income Taxes

Each reporting period, we evaluate the realizability of our deferred tax assets in each tax jurisdiction. As of June 30, 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 six 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. The income tax provisions amend the Internal Revenue Code to include among other things a corporate alternative minimum tax starting in the 2023 tax year. The Company is still assessing the impact due to a lack of United States Treasury regulations on this matter; 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.

Accounting Pronouncements - Adopted

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 is not expected to have a material impact on our consolidated financial statements.

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

Property, Plant and Equipment, Net

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


	June 30, 2023		December 31, 2022
	(in thousands)
Land, buildings and improvements	$	1,989,861	$	1,648,488
Computer equipment and capitalized software	897,238		910,793
Furniture and other equipment	576,119		535,719
Construction in progress	229,125		244,618
Property, plant and equipment, gross	3,692,343		3,339,618
Less: accumulated depreciation	1,788,323		1,851,955
Property, plant and equipment, net	$	1,904,020	$	1,487,663

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 six months ended June 30, 2023:


	Client / vendor relationships		Revenue- generating contracts		Venue management and leaseholds		Trademarks and naming rights		Technology and Other (1)		Total
	(in thousands)
Balance as of December 31, 2022:
Gross carrying amount	563,210		$	824,785	$	148,022	$	188,596	$	35,736	$	1,760,349
Accumulated amortization	(209,518)		(316,581)		(58,588)		(97,931)		(27,109)		(709,727)
Net	353,692		508,204		89,434		90,665		8,627		1,050,622
Gross carrying amount:
Acquisitions and additions—current year	18,429		27,125		47,045		—		20,224		112,823
Acquisitions and additions—prior year	619		24,530		(11)		—		—		25,138

Foreign exchange	16,306		24,320		2,795		7,434		171		51,026
Other (2)	(12,127)		(42,442)		—		(13,583)		(16,601)		(84,753)
Net change	23,227		33,533		49,829		(6,149)		3,794		104,234
Accumulated amortization:
Amortization	(38,482)		(50,041)		(8,662)		(9,240)		(6,301)		(112,726)

Foreign exchange	(3,058)		(5,312)		(692)		(1,108)		(413)		(10,583)
Other (2)	12,077		43,135		45		13,589		17,773		86,619
Net change	(29,463)		(12,218)		(9,309)		3,241		11,059		(36,690)
Balance as of June 30, 2023:
Gross carrying amount	586,437		858,318		197,851		182,447		39,530		1,864,583
Accumulated amortization	(238,981)		(328,799)		(67,897)		(94,690)		(16,050)		(746,417)
Net	$	347,456	$	529,519	$	129,954	$	87,757	$	23,480	$	1,118,166

(1) Other primarily includes intangible assets for non-compete agreements.

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

Included in the current year acquisitions and additions amounts above are definite-lived intangible assets primarily associated with the acquisitions of certain venue management businesses located in the United States as well as additions for music publishing rights.

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


			Weighted- Average Life (years)
Revenue-generating contracts			5
Client/vendor relationships			5


Venue management and leaseholds			14
Technology (1)			3

All categories			8

_____________________

(1) The weighted average life of technology intangibles does not include purchased software licenses that are typically amortized over 1 to 3 years.

Amortization of definite-lived intangible assets for the three months ended June 30, 2023 and 2022 was $55.2 million and $52.6 million, respectively, and for the six months ended June 30, 2023 and 2022 was $112.7 million and $102.3 million, respectively. As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization will vary.

Goodwill

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the six months ended June 30, 2023:


	Concerts		Ticketing		Sponsorship & Advertising		Total
	(in thousands)
Balance as of December 31, 2022:
Goodwill	$	1,349,426	$	979,742	$	635,575	$	2,964,743
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	914,063		979,742		635,575		2,529,380

Acquisitions—current year	29,934		—		—		29,934
Acquisitions—prior year	1,399		(106)		—		1,293

Dispositions	(6,183)		—		—		(6,183)
Foreign exchange	7,933		29,147		27,852		64,932

Balance as of June 30, 2023:
Goodwill	1,382,509		1,008,783		663,427		3,054,719
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	$	947,146	$	1,008,783	$	663,427	$	2,619,356

Included in the current year acquisitions amounts above is goodwill primarily associated with the acquisitions of certain venue management businesses located in the United States.

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

Investments in Nonconsolidated Affiliates

At June 30, 2023 and December 31, 2022, we had investments in nonconsolidated affiliates of $410.5 million and $408.8 million, respectively, included in other long-term assets on our consolidated balance sheets.

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NOTE 3—LEASES

The significant components of operating lease expense are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Operating lease expense	$	76,999	$	71,750	$	142,328	$	135,511
Variable and short-term lease expense	40,963		34,861		72,305		52,893
Sublease income	(2,424)		(1,304)		(4,612)		(2,274)
Net lease expense	$	115,538	$	105,307	$	210,021	$	186,130

Many of our leases contain contingent rent obligations based on revenue, tickets sold or other variables, while others include periodic adjustments to rent obligations based on the prevailing inflationary index or market rental rates. Contingent rent obligations are not included in the initial measurement of the lease asset or liability and are recorded as rent expense in the period that the contingency is resolved.

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


	Six Months Ended June 30,
	2023		2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	137,924	$	121,953
Lease assets obtained in exchange for lease obligations, net of terminations	$	87,505	$	185,119

As of June 30, 2023, we have additional operating leases that have not yet commenced, with total lease payments of $146.7 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 2023 to June 2030 due to certain offices and venues under construction with lease terms ranging from 2 to 30 years.

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NOTE 4—LONG-TERM DEBT

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


		June 30, 2023		December 31, 2022
		(in thousands)
Senior Secured Credit Facility:

	Term loan A	$	372,500	$	382,500
	Term loan B	841,274		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		526,692		252,199
Total principal amount		6,665,466		5,955,343
Less: unamortized discounts and debt issuance costs		(59,280)		(51,844)
Total long-term debt, net of unamortized discounts and debt issuance costs		6,606,186		5,903,499
Less: current portion		51,489		620,032
Total long-term debt, net		$	6,554,697	$	5,283,467

Future maturities of long-term debt at June 30, 2023 are as follows:


	(in thousands)
Remainder of 2023	$	33,021
2024	1,478,730
2025	50,443
2026	1,394,009
2027	2,153,142
Thereafter	1,556,121
Total	$	6,665,466

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 (the “2029 Notes”). Interest on the 2029 Notes 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 June 30, 2023.

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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 2029 Notes 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 June 30, 2023, the remaining period for the unamortized debt issuance costs balance of $14.3 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 June 30, 2023, the effective interest rate on the notes was 3.4%.

In connection with the issuance of the 2029 Notes, 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 2029 Notes, 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 provide 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 United States 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 June 30, 2023, other long-term debt includes $270.7 million for debt due in 2026 acquired as part of an acquisition of a venue management business during the first quarter of 2023 in the United States.

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NOTE 5—FAIR VALUE MEASUREMENTS

Recurring

The following table shows the fair value of our significant financial assets that are required to be measured at fair value on a recurring basis, which are classified on the consolidated balance sheets as cash and cash equivalents.


	Estimated Fair Value
	June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
	(in thousands)
Assets:
Cash equivalents	$	868,704	$	—	$	868,704	$	503,964	$	—	$	503,964
Interest rate swaps	$	—	$	55,616	$	55,616	$	—	$	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 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. 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.

The following table presents the estimated fair values of our senior secured notes, senior notes and convertible senior notes:


	Estimated Fair Value at
	June 30, 2023		December 31, 2022
	Level 2
	(in thousands)
6.5% Senior Secured Notes due 2027	$	1,207,980	$	1,175,460
3.75% Senior Secured Notes due 2028	$	447,155	$	429,035
4.875% Senior Notes due 2024