Live Nation Entertainment Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LONG-LIVED ASSETS

LONG-LIVED ASSETS

9 Months Ended

Sep. 30, 2019

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, 2019:


	Revenue- generating contracts		Client / vendor relationships		Trademarks and naming rights		Technology		Other ⁽¹⁾		Total
	(in thousands)
Balance as of December 31, 2018:
Gross carrying amount	$	692,963	$	393,772	$	123,707	$	85,411	$	120,163	$	1,416,016
Accumulated amortization	(391,002)		(213,599)		(41,808)		(38,826)		(69,330)		(754,565)
Net	301,961		180,173		81,899		46,585		50,833		661,451
Gross carrying amount:
Acquisitions—current year	100,416		25,639		1,632		7,794		60,145		195,626
Acquisitions—prior year	—		—		—		—		43		43

Foreign exchange	(14,694)		(3,937)		(845)		(419)		(2,160)		(22,055)
Other ⁽²⁾	(71,601)		(37,748)		76		(8,530)		(19,413)		(137,216)
Net change	14,121		(16,046)		863		(1,155)		38,615		36,398
Accumulated amortization:
Amortization	(75,596)		(43,999)		(10,097)		(19,957)		(16,391)		(166,040)

Foreign exchange	5,560		2,483		362		377		976		9,758
Other ⁽²⁾	71,580		37,747		(54)		8,529		19,421		137,223
Net change	1,544		(3,769)		(9,789)		(11,051)		4,006		(19,059)
Balance as of September 30, 2019:
Gross carrying amount	707,084		377,726		124,570		84,256		158,778		1,452,414
Accumulated amortization	(389,458)		(217,368)		(51,597)		(49,877)		(65,324)		(773,624)
Net	$	317,626	$	160,358	$	72,973	$	34,379	$	93,454	$	678,790

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⁽¹⁾Other primarily includes intangible assets for non-compete, venue management and leasehold agreements.

⁽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 festival promotion business located in Brazil that had been accounted for as an equity method investment, venue management businesses located in Belgium, the United States and Canada, festival promotion businesses located in the United States and Finland, a ticketing business located in Australia and an artist management business located in the United States.

The 2019 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:


			Weighted- Average Life (years)
Revenue-generating contracts			8
Client/vendor relationships			4
Trademarks and naming rights			3

Technology			2
Other			9
All categories			7

We test for possible impairment of definite-lived intangible assets whenever events or circumstances change, such as a significant reduction in operating cash flow or a change in the manner in which the asset is intended to be used, which may indicate that the carrying amount of the asset may not be recoverable. During the nine months ended September 30, 2019, we reviewed the carrying value of certain definite-lived intangible assets that management determined had an indicator that future operating cash flows may not support their carrying value, and it was determined that those assets were impaired since the estimated undiscounted operating cash flows associated with those assets were less than their carrying value. For the nine months ended September 30, 2019, we recorded impairment charges related to definite-lived intangible assets of $19.4 million as a component of depreciation and amortization. These impairment charges primarily related to intangible assets for revenue-generating contracts in the Concerts segment. See Note 4—Fair Value Measurements for further discussion of the inputs used to determine the fair value. There were no significant impairment charges recorded during the nine months ended September 30, 2018.

Amortization of definite-lived intangible assets for the three months ended September 30, 2019 and 2018 was $69.3 million and $51.4 million, respectively, and for the nine months ended September 30, 2019 and 2018 was $166.0 million and $143.5 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 September 30, 2019:


	(in thousands)
October 1 - December 31, 2019	$	48,212
2020	$	164,235
2021	$	125,521
2022	$	97,365
2023	$	81,030

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 nine months ended September 30, 2019:


	Concerts		Ticketing		Sponsorship & Advertising		Total
	(in thousands)
Balance as of December 31, 2018:
Goodwill	$	1,094,604	$	762,953	$	400,749	$	2,258,306
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	659,241		762,953		400,749		1,822,943

Acquisitions—current year	46,648		4,017		51,237		101,902
Acquisitions—prior year	8,827		—		—		8,827


Foreign exchange	(10,889)		(3,458)		(4,110)		(18,457)

Balance as of September 30, 2019:
Goodwill	1,139,190		763,512		447,876		2,350,578
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	$	703,827	$	763,512	$	447,876	$	1,915,215

Included in the current year acquisitions amounts above are goodwill primarily associated with the acquisition of a festival promotion business located in Brazil that had been accounted for as an equity method investment and venue management businesses located in Belgium and Canada.

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.