Live Nation Entertainment Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LONG-LIVED ASSETS

LONG-LIVED ASSETS

12 Months Ended

Dec. 31, 2022

LONG-LIVED ASSETS [Abstract]

LONG-LIVED ASSETS

LONG-LIVED ASSETS, INTANGIBLES, AND GOODWILL

Property, Plant and Equipment, Net

Property, plant and equipment includes expenditures for the construction of new venues, major renovations to existing buildings or buildings that are being added to our venue network, the development of new ticketing tools and technology enhancements along with the renewal and improvement of existing venues and technology systems, web development and administrative offices.

Property, plant and equipment consisted of the following:


	December 31,
	2022		2021
	(in thousands)
Land, buildings and improvements	$	1,648,488	$	1,324,278
Computer equipment and capitalized software	910,793		910,581
Furniture and other equipment	535,719		411,403
Construction in progress	244,618		173,865
	3,339,618		2,820,127
Less: accumulated depreciation	1,851,955		1,728,198
	$	1,487,663	$	1,091,929

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 years ended December 31, 2022 and 2021:


	Client / vendor relationships		Revenue- generating contracts		Venue management & leaseholds		Trademarks and naming rights		Technology		Other (1)		Total
	(in thousands)
Balance as of December 31, 2020:
Gross carrying amount	$	496,074	$	578,664	$	147,956	$	150,344	$	72,283	$	17,413	$	1,462,734
Accumulated amortization	(146,397)		(277,710)		(51,924)		(73,604)		(45,799)		(11,700)		(607,134)
Net	349,677		300,954		96,032		76,740		26,484		5,713		855,600
Gross carrying amount:
Acquisitions—current year	117,817		93,102		107,000		41,033		10,419		2,650		372,021
Acquisitions—prior year	5,558		—		—		—		—		—		5,558
Dispositions	—		(1,932)		—		—		—		—		(1,932)
Foreign exchange	(5,922)		(13,430)		(2,146)		(1,689)		160		4		(23,023)
Other (2)	(36,597)		(63,146)		(19,954)		(8,823)		(45,527)		(9,653)		(183,700)
Net change	80,856		14,594		84,900		30,521		(34,948)		(6,999)		168,924
Accumulated amortization:
Amortization	(72,066)		(67,918)		(15,599)		(14,944)		(18,758)		(4,152)		(193,437)
Dispositions	—		751		—		—		—		—		751
Foreign exchange	3,141		5,779		622		554		(190)		(1)		9,905
Other (2)	36,597		63,189		19,972		8,645		46,372		9,820		184,595
Net change	(32,328)		1,801		4,995		(5,745)		27,424		5,667		1,814
Balance as of December 31, 2021:
Gross carrying amount	576,930		593,258		232,856		180,865		37,335		10,414		1,631,658
Accumulated amortization	(178,725)		(275,909)		(46,929)		(79,349)		(18,375)		(6,033)		(605,320)
Net	398,205		317,349		185,927		101,516		18,960		4,381		1,026,338
Gross carrying amount:
Acquisitions—current year	46,432		32,919		11,562		—		—		—		90,913
Acquisitions—prior year	(7,435)		255,086		(92,290)		7,007		—		318		162,686

Foreign exchange	(12,923)		(9,308)		(3,491)		685		53		(2,417)		(27,401)
Other (2)	(39,794)		(47,170)		(615)		39		(7,486)		(2,481)		(97,507)
Net change	(13,720)		231,527		(84,834)		7,731		(7,433)		(4,580)		128,691
Accumulated amortization:
Amortization	(75,369)		(93,290)		(14,277)		(18,382)		(10,316)		(5,218)		(216,852)

Foreign exchange	4,402		5,561		1,783		335		(3)		181		12,259
Other (2)	40,174		47,057		835		(535)		8,309		4,346		100,186
Net change	(30,793)		(40,672)		(11,659)		(18,582)		(2,010)		(691)		(104,407)
Balance as of December 31, 2022:
Gross carrying amount	563,210		824,785		148,022		188,596		29,902		5,834		1,760,349
Accumulated amortization	(209,518)		(316,581)		(58,588)		(97,931)		(20,385)		(6,724)		(709,727)
Net	$	353,692	$	508,204	$	89,434	$	90,665	$	9,517	$	(890)	$	1,050,622

___________________

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

Included in the current year acquisition amounts above for 2021 and prior year acquisition amounts for 2022 are definite-lived intangible assets primarily associated with the acquisition of OCESA. Information regarding the estimated fair value of the acquired OCESA intangible assets can be found in Note 2 – Acquisitions.

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


	Weighted-Average Life (1)
	2022	2021
	(in years)
Revenue-generating contracts	5	10
Client/vendor relationships	4	9
Trademarks and naming rights	0	10
Technology (1)	0	0

Venue management and leaseholds	26	10
Other	0	2
All categories	7	10

_____________________

(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 years ended December 31, 2022, 2021 and 2020 was $216.9 million, $193.4 million and $239.3 million, respectively.

The following table presents our estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets that exist at December 31, 2022:


	(in thousands)
2023	$	391,820
2024	$	156,806
2025	$	125,218
2026	$	100,895
2027	$	75,772

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

Indefinite-lived Intangibles

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

Goodwill

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


	Concerts		Ticketing		Sponsorship & Advertising		Total
	(in thousands)
Balance as of December 31, 2020:
Goodwill	$	1,318,273	$	782,559	$	463,734	$	2,564,566
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	882,910		782,559		463,734		2,129,203

Acquisitions—current year	84,592		157,519		248,295		490,406
Acquisitions—prior year	(1,275)		(3,888)		418		(4,745)
Dispositions	(150)		—		—		(150)

Foreign exchange	(10,989)		(6,126)		(6,730)		(23,845)

Balance as of December 31, 2021:
Goodwill	1,390,451		930,064		705,717		3,026,232
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	955,088		930,064		705,717		2,590,869

Acquisitions—current year	37,386		6,045		—		43,431
Acquisitions—prior year	(76,858)		72,420		(85,168)		(89,606)
Dispositions	(1,792)		—		—		(1,792)

Foreign exchange	239		(28,787)		15,026		(13,522)

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

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

Included in the current year acquisitions amounts above for 2021 and prior year acquisitions for 2022 are goodwill primarily associated with the acquisition of OCESA. See Note 2 – Acquisitions for further discussion.

We are in various stages of finalizing our acquisition accounting for recent acquisitions, which include the use of external valuation consultants, and the completion of this accounting could result in a change to the associated purchase price allocations, including goodwill and the allocation between segments.

Investments in Nonconsolidated Affiliates

During the year ended December 31, 2022, there were no significant sales of investments in nonconsolidated affiliates. During the year ended December 31, 2021, we sold certain investments in nonconsolidated affiliates for $110.2 million in cash and noncash consideration resulting in a gain on sale of investments in nonconsolidated affiliates of $83.6 million.

We entered into certain agreements whereby we received equity in the counterparty to those agreements primarily in exchange for providing sponsorship and marketing programs and support. We recognized $7.5 million and $25.0 million of noncash additions to investments in nonconsolidated affiliates for the years ended December 31, 2022 and 2021, respectively, which are included in other long term assets on our consolidated balance sheets associated with these agreements.