Quarterly report pursuant to Section 13 or 15(d)

LONG-LIVED ASSETS

v3.5.0.2
LONG-LIVED ASSETS
 6 Months Ended
Jun. 30, 2016
LONG-LIVED ASSETS [Abstract]  
LONG-LIVED ASSETS
LONG-LIVED ASSETS
Definite-lived Intangible Assets
The Company has definite-lived intangible assets which are amortized over the shorter of either the lives of the respective agreements or the period of time the assets are expected to contribute to the Company’s future cash flows. The amortization is recognized on either a straight-line or expected cash flows basis.
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, 2016:
 
Revenue-
generating
contracts
 
Client /
vendor
relationships
 
Trademarks
and
naming
rights
 
Non-compete
agreements
 
Venue
management
and
leaseholds
 
Technology
 
Other
 
Total
 
(in thousands)
Balance as of December 31, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
Gross carrying amount
$
700,795

 
$
379,282

 
$
86,556

 
$
176,354

 
$
66,051

 
$
30,265

 
$
3,598

 
$
1,442,901

Accumulated amortization
(313,743
)
 
(169,620
)
 
(14,578
)
 
(121,319
)
 
(35,645
)
 
(8,602
)
 
(1,631
)
 
(665,138
)
Net
387,052

 
209,662

 
71,978

 
55,035

 
30,406

 
21,663

 
1,967

 
777,763

Gross carrying amount:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions— current year
46,541

 
55,910

 
259

 
—

 
—

 
8,604

 
—

 
111,314

Acquisitions— prior year
11,404

 
782

 
3,620

 
1,500

 
1,174

 
—

 
154

 
18,634

Dispositions
—

 
(2,299
)
 
—

 
—

 
(1,093
)
 
—

 
—

 
(3,392
)
Foreign exchange
(9,923
)
 
(900
)
 
(387
)
 
(2,264
)
 
(1,697
)
 
(96
)
 
—

 
(15,267
)
Other(1)
(1,919
)
 
(2,307
)
 
(5
)
 
—

 
—

 
—

 
(1
)
 
(4,232
)
Net change
46,103

 
51,186

 
3,487

 
(764
)
 
(1,616
)
 
8,508

 
153

 
107,057

Accumulated amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization
(33,092
)
 
(31,098
)
 
(4,931
)
 
(10,554
)
 
(2,676
)
 
(2,616
)
 
(198
)
 
(85,165
)
Dispositions
—

 
599

 
—

 
—

 
—

 
—

 
—

 
599

Foreign exchange
4,034

 
282

 
180

 
618

 
713

 
176

 
8

 
6,011

Other(1)
1,854

 
2,307

 
—

 
—

 
—

 
—

 
(8
)
 
4,153

Net change
(27,204
)
 
(27,910
)
 
(4,751
)
 
(9,936
)
 
(1,963
)
 
(2,440
)
 
(198
)
 
(74,402
)
Balance as of June 30, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
Gross carrying amount
746,898

 
430,468

 
90,043

 
175,590

 
64,435

 
38,773

 
3,751

 
1,549,958

Accumulated amortization
(340,947
)
 
(197,530
)
 
(19,329
)
 
(131,255
)
 
(37,608
)
 
(11,042
)
 
(1,829
)
 
(739,540
)
Net
$
405,951

 
$
232,938

 
$
70,714

 
$
44,335

 
$
26,827

 
$
27,731

 
$
1,922

 
$
810,418

______________
(1) Other includes netdowns of fully amortized or impaired assets.

Included in the current year acquisitions amounts above are definitive-lived intangible assets primarily associated with the acquisition of a controlling interest in an artist management business with locations in the United States and Canada and controlling interests in festival and concert promoters located in the United Kingdom and the United States.
Included in the prior year acquisitions amounts above are definitive-lived intangible assets primarily associated with the acquisition of a controlling interest in a festival promoter located in the United States.
The 2016 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:
 
Weighted-
Average
Life (years)
Revenue-generating contracts
7
Client/vendor relationships
5
Trademarks and naming rights
5
Technology
5
All categories
6

Amortization of definite-lived intangible assets for the three months ended June 30, 2016 and 2015 was $45.4 million and $43.5 million, respectively, and for the six months ended June 30, 2016 and 2015 was $85.2 million and $76.1 million, respectively. Amortization related to nonrecoupable ticketing contract advances for the three months ended June 30, 2016 and 2015 was $15.0 million and $13.2 million, respectively, and for the six months ended June 30, 2016 and 2015 was $36.5 million and $32.8 million, respectively.
The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets that exist at June 30, 2016:
 
(in thousands)
July 1 - December 31, 2016
$
95,596

2017
$
164,773

2018
$
142,238

2019
$
118,143

2020
$
102,921


As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization may vary. Therefore, the expense to date is not necessarily indicative of the expense expected for the full year.
Goodwill
The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments for the six months ended June 30, 2016:
 
Concerts
 
Sponsorship
& Advertising
 
Ticketing
 
Artist
Nation
 
Total
 
(in thousands)
Balance as of December 31, 2015:
 
 
 
 
 
 
 
 
 
Goodwill
$
602,771

 
$
332,081

 
$
733,825

 
$
340,501

 
$
2,009,178

Accumulated impairment losses
(386,915
)
 
—

 
—

 
(17,948
)
 
(404,863
)
                 Net
215,856

 
332,081

 
733,825

 
322,553

 
1,604,315

 
 
 
 
 
 
 
 
 
 
Acquisitions—current year
30,990

 
25,855

 
3,638

 
17,873

 
78,356

Acquisitions—prior year
(19,171
)
 
18,581

 
—

 
449

 
(141
)
Dispositions
—

 
—

 
—

 
(323
)
 
(323
)
Foreign exchange
(15,542
)
 
3,145

 
1,232

 
(366
)
 
(11,531
)
 
 
 
 
 
 
 
 
 
 
Balance as of June 30, 2016:
 
 
 
 
 
 
 
 
 
Goodwill
599,048

 
379,662

 
738,695

 
358,134

 
2,075,539

Accumulated impairment losses
(386,915
)
 
—

 
—

 
(17,948
)
 
(404,863
)
                 Net
$
212,133

 
$
379,662

 
$
738,695

 
$
340,186

 
$
1,670,676


Included in the current year acquisitions amounts above is goodwill primarily associated with the acquisition of controlling interests in festival and concert promoters located in the United Kingdom and the United States, an artist management business with locations in the United States and Canada and a digital content company located in the United States.
Included in the prior year acquisitions amounts above are net reductions in goodwill resulting from changes in purchase price allocations of prior year acquisitions primarily related to the acquisition of a controlling interest in a festival promoter located in the United States and a venue management business in New Zealand.
The Company is in various stages of finalizing its acquisition accounting for recent acquisitions, which include the use of external valuation consultants, and the completion of this accounting could result in a change to the associated purchase price allocations, including goodwill and its allocation between segments.
Investments in Nonconsolidated Affiliates
The Company has investments in various affiliates that are not consolidated and are accounted for under the equity method of accounting. The Company records its investments in these entities on the balance sheets as investments in nonconsolidated affiliates reported as part of other long-term assets. The Company’s interests in these businesses are recorded in the consolidated statements of operations as equity in losses (earnings) of nonconsolidated affiliates. For the six months ended June 30, 2016, the Company’s investment in Venta de Boletos por Computadora S.A. de C.V., a 33% owned ticketing distribution services company, and Vice Nation, LLC, a 60% owned digital content company, are considered significant on an individual basis.
Summarized unaudited income statement information for the Company’s nonconsolidated affiliates noted above is as follows (at 100%):
 
 
June 30,
 
 
2016
 
2015
 
 
(in thousands)
Revenue
 
$
24,608

 
$
25,273

Operating income
 
$
8,143

 
$
10,540

Net income
 
$
4,915

 
$
6,968

Net income attributable to the common stockholders of the equity investees
 
$
4,878

 
$
6,856