Quarterly report pursuant to Section 13 or 15(d)

LONG-LIVED ASSETS

v2.4.0.8
LONG-LIVED ASSETS
 3 Months Ended
Mar. 31, 2014
LONG-LIVED ASSETS [Abstract]  
LONG-LIVED ASSETS
LONG-LIVED ASSETS
Property, Plant and Equipment
In the fourth quarter of 2012, an amphitheater in New York that is operated by the Company sustained substantial damage during Hurricane Sandy. During the three months ended March 31, 2013, the Company received a partial insurance recovery and recorded a gain of $3.1 million as a component of loss (gain) on disposal of operating assets in the Concerts segment representing the proceeds received in excess of the carrying value of this amphitheater asset.
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 three months ended March 31, 2014:
 
Revenue-
generating
contracts
 
Client /
vendor
relationships
 
Non-compete
agreements
 
Venue
management
and
leaseholds
 
Technology
 
Trademarks
and
naming
rights
 
Other
 
Total
 
(in thousands)
Balance as of December 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross carrying amount
$
585,094

 
$
277,937

 
$
137,199

 
$
85,642

 
$
100,664

 
$
28,524

 
$
2,375

 
$
1,217,435

Accumulated amortization
(231,053
)
 
(81,809
)
 
(101,128
)
 
(43,687
)
 
(73,110
)
 
(9,092
)
 
(992
)
 
(540,871
)
Net
354,041

 
196,128

 
36,071

 
41,955

 
27,554

 
19,432

 
1,383

 
676,564

Gross carrying amount:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions— current year
—

 
15,000

 
—

 
—

 
1,231

 
—

 
—

 
16,231

Acquisitions— prior year
—

 
2,598

 
—

 
—

 
—

 
—

 
—

 
2,598

Foreign exchange
1,576

 
1,890

 
—

 
(137
)
 
(10
)
 
50

 
—

 
3,369

Other (1)
—

 
(800
)
 
(12,300
)
 
—

 
—

 
—

 
571

 
(12,529
)
Net change
1,576

 
18,688

 
(12,300
)
 
(137
)
 
1,221

 
50

 
571

 
9,669

Accumulated amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization
(12,939
)
 
(9,762
)
 
(3,724
)
 
(1,704
)
 
(5,456
)
 
(894
)
 
(89
)
 
(34,568
)
Foreign exchange
(520
)
 
(470
)
 
—

 
163

 
5

 
(6
)
 
—

 
(828
)
Other (1)
—

 
800

 
12,550

 
—

 
—

 
—

 
—

 
13,350

Net change
(13,459
)
 
(9,432
)
 
8,826

 
(1,541
)
 
(5,451
)
 
(900
)
 
(89
)
 
(22,046
)
Balance as of March 31, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
Gross carrying amount
586,670

 
296,625

 
124,899

 
85,505

 
101,885

 
28,574

 
2,946

 
1,227,104

Accumulated amortization
(244,512
)
 
(91,241
)
 
(92,302
)
 
(45,228
)
 
(78,561
)
 
(9,992
)
 
(1,081
)
 
(562,917
)
Net
$
342,158

 
$
205,384

 
$
32,597

 
$
40,277

 
$
23,324

 
$
18,582

 
$
1,865

 
$
664,187

_________
(1) 
Other includes netdowns of fully amortized assets and reclassification of certain assets from indefinite-lived intangible assets.
Included in the current year acquisitions amount above of $16.2 million are client/vendor relationships primarily associated with the March 2014 acquisition of an artist management business located in California.
The 2014 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:
  
Weighted-
Average
Life (years)
 
 
Client/vendor relationships
8
Technology
3
All categories
8

Amortization of definite-lived intangible assets for the three months ended March 31, 2014 and 2013 was $34.6 million and $38.2 million, respectively. In addition, amortization related to nonrecoupable ticketing contract advances for the three months ended March 31, 2014 and 2013 was $17.4 million and $13.6 million, respectively.
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 three months ended March 31, 2014:
 
Concerts
 
Ticketing
 
Artist
Nation
 
Sponsorship
&  Advertising
 
Total
 
(in thousands)
Balance as of December 31, 2013:
 
 
 
 
 
 
 
 
 
Goodwill (1)
$
505,472

 
$
642,249

 
$
278,923

 
$
310,241

 
$
1,736,885

Accumulated impairment losses (1)
(269,902
)
 
—

 
—

 
—

 
(269,902
)
                 Net
235,570

 
642,249

 
278,923

 
310,241

 
1,466,983

 
 
 
 
 
 
 
 
 
 
Acquisitions—current year
1,129

 
—

 
18,658

 
—

 
19,787

Acquisitions—prior year
2

 
—

 
1,062

 
399

 
1,463

Foreign exchange
3,682

 
(75
)
 
80

 
1,616

 
5,303

 
 
 
 
 
 
 
 
 
 
Balance as of March 31, 2014:
 
 
 
 
 
 
 
 
Goodwill
510,285

 
642,174

 
298,723

 
312,256

 
1,763,438

Accumulated impairment losses
(269,902
)
 
—

 
—

 
—

 
(269,902
)
                 Net
$
240,383

 
$
642,174

 
$
298,723

 
$
312,256

 
$
1,493,536


_________
(1) 
The previously reported total balance has been reduced by $13.0 million due to the net down of fully impaired goodwill related to the Company’s non-core events business which was sold in 2008.
Included in the current year acquisitions amount above of $19.8 million is goodwill primarily associated with the March 2014 acquisition of an artist management business located in California.
The Company is in the process of finalizing its acquisition accounting for recent acquisitions which 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 which are not consolidated and are accounted for under the equity method of accounting. The Company records its investments in these entities in the balance sheet as investments in nonconsolidated affiliates reported as part of other long-term assets. The Company’s interest in these operations are recorded in the statement of operations as equity in earnings of nonconsolidated affiliates. The Company’s investment in Venta de Boletos por Computadora S.A. de C.V. (“VBC”), a 33% owned ticketing distribution services company in Mexico, was considered significant on an individual basis at December 31, 2013.
Summarized income statement information for VBC is as follows (at 100%):
 
 
Three Months Ended 
 March 31,
 
 
2014
 
2013
 
 
(in thousands)
Revenue
 
$
10,368

 
$
10,469

Operating income
 
$
4,978

 
$
4,943

Net income
 
$
3,777

 
$
3,972

Net income attributable to the common stockholders of the equity investee
 
$
3,736

 
$
4,001