Item 1. Financial Statements

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Item 1. Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	March 31, 2023		December 31, 2022
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	6,991,987	$	5,606,457
Accounts receivable, less allowance of $62,224 and $63,294, respectively	1,657,210		1,465,383
Prepaid expenses	1,323,199		949,826
Restricted cash	5,465		5,917
Other current assets	119,260		131,939
Total current assets	10,097,121		8,159,522
Property, plant and equipment, net	1,887,070		1,487,663
Operating lease assets	1,580,919		1,571,395
Intangible assets
Definite-lived intangible assets, net	1,054,538		1,050,622
Indefinite-lived intangible assets, net	368,771		368,712
Goodwill	2,577,317		2,529,380
Long-term advances	594,556		568,558
Other long-term assets	709,299		724,989
Total assets	$	18,869,591	$	16,460,841
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, client accounts	$	1,815,911	$	1,791,025
Accounts payable	172,649		180,076
Accrued expenses	2,002,429		2,368,434
Deferred revenue	5,103,432		3,134,800
Current portion of long-term debt, net	63,870		620,032
Current portion of operating lease liabilities	142,951		140,232
Other current liabilities	72,845		68,716
Total current liabilities	9,374,087		8,303,315
Long-term debt, net	6,547,911		5,283,467
Long-term operating lease liabilities	1,646,624		1,654,525

Other long-term liabilities	511,473		455,971
Commitments and contingent liabilities
Redeemable noncontrolling interests	710,350		669,766
Stockholders' equity
Common stock	2,289		2,285
Additional paid-in capital	2,535,553		2,698,316
Accumulated deficit	(2,974,398)		(2,971,229)
Cost of shares held in treasury	(6,865)		(6,865)
Accumulated other comprehensive loss	(17,425)		(90,076)
Total Live Nation stockholders' equity	(460,846)		(367,569)
Noncontrolling interests	539,992		461,366
Total equity	79,146		93,797
Total liabilities and equity	$	18,869,591	$	16,460,841

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended March 31,
		2023		2022
		(in thousands except share and per share data)
Revenue		$	3,127,390	$	1,802,808
Operating expenses:
Direct operating expenses		2,115,589		1,071,022
Selling, general and administrative expenses		690,321		570,182
Depreciation and amortization		115,185		100,469
Loss on disposal of operating assets		504		1,665
Corporate expenses		63,015		32,410
Operating income		142,776		27,060
Interest expense		89,215		66,773
Loss on extinguishment of debt		18,366		—
Interest income		(40,313)		(7,564)
Equity in earnings of nonconsolidated affiliates		(4,107)		(4,288)

Other expense, net		11,583		9,399
Income (loss) before income taxes		68,032		(37,260)
Income tax expense		23,840		11,696
Net income (loss)		44,192		(48,956)
Net income attributable to noncontrolling interests		47,361		1,226
Net loss attributable to common stockholders of Live Nation		$	(3,169)	$	(50,182)

Basic and diluted net loss per common share available to common stockholders of Live Nation		$	(0.25)	$	(0.39)


Weighted average common shares outstanding:
Basic and diluted		228,162,831		221,890,625



Reconciliation to net loss available to common stockholders of Live Nation:
Net loss attributable to common stockholders of Live Nation		$	(3,169)	$	(50,182)
Accretion of redeemable noncontrolling interests		(54,933)		(35,714)
Net loss available to common stockholders of Live Nation—basic and diluted		$	(58,102)	$	(85,896)

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended March 31,
		2023		2022
		(in thousands)
Net income (loss)		$	44,192	$	(48,956)
Other comprehensive income, net of tax:
Unrealized gain (loss) on cash flow hedge		(3,949)		23,969
Realized loss (gain) on cash flow hedge		(3,548)		1,902
Foreign currency translation adjustments		80,148		37,752
Comprehensive income		116,843		14,667
Comprehensive income attributable to noncontrolling interests		47,361		1,226
Comprehensive income attributable to common stockholders of Live Nation		$	69,482	$	13,441

See Notes to Consolidated Financial Statements

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 Loss		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	—	—		27,571		—		—		—		—		27,571		—
Common stock issued under stock plans, net of shares withheld for employee taxes	184,975	1		(7,950)		—		—		—		—		(7,949)		—
Exercise of stock options	19,962	1		993		—		—		—		—		994		—
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	—	—		—		—		—		—		58,466		58,466		12,308

Purchases of noncontrolling interests	—	—		(25,872)		—		—		—		(11,406)		(37,278)		—

Redeemable noncontrolling interests fair value adjustments	—	—		(54,678)		—		—		—		—		(54,678)		54,678
Contributions received	—	—		—		—		—		—		5,859		5,859		85
Cash distributions	—	—				—		—		—		(44,209)		(44,209)		(10,706)
Other	—	—		—		—		—		—		28,025		28,025		(21,251)
Comprehensive income (loss):
Net income (loss)	—	—		—		(3,169)		—		—		41,891		38,722		5,470
Unrealized loss on cash flow hedge	—	—		—		—		—		(3,949)		—		(3,949)		—
Realized gain on cash flow hedge	—	—		—		—		—		(3,548)		—		(3,548)		—
Foreign currency translation adjustments	—	—		—		—		—		80,148		—		80,148		—
Balance 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

See Notes to Consolidated Financial Statements


	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	—	—		161,590		—		—		—		—		161,590		—
Common stock issued under stock plans, net of shares withheld for employee taxes	552,669	5		(36,573)		—		—		—		—		(36,568)		—
Exercise of stock options	1,013,898	10		12,739		—		—		—		—		12,749		—


Acquisitions	—	—		—		—		—		—		399		399		5,654

Purchases of noncontrolling interests	—	—		(15,241)		—		—		—		(2,898)		(18,139)		—
Sales of noncontrolling interests	—	—		—		—		—		—		(336)		(336)		—
Redeemable noncontrolling interests fair value adjustments	—	—		(35,714)		—		—		—		—		(35,714)		35,714
Contributions received	—	—		—		—		—		—		6,212		6,212		25
Cash distributions	—	—				—		—		—		(31,808)		(31,808)		(7,158)
Other	—	—		41		—		—		—		1,783		1,824		(1,079)
Comprehensive income (loss):
Net income (loss)	—	—		—		(50,182)		—		—		4,651		(45,531)		(3,425)
Unrealized gain on cash flow hedge	—	—		—		—		—		23,969		—		23,969		—
Realized loss on cash flow hedge	—	—		—		—		—		1,902		—		1,902
Foreign currency translation adjustments	—	—		—		—		—		37,752		—		37,752		—
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

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three Months Ended March 31,
	2023		2022
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	44,192	$	(48,956)
Reconciling items:
Depreciation	57,710		50,760
Amortization	57,475		49,709
Amortization of non-recoupable ticketing contract advances	20,363		18,527

Amortization of debt issuance costs and discounts	4,630		4,114
Loss on extinguishment of debt	18,366		—
Stock-based compensation expense	27,571		49,241
Unrealized changes in fair value of contingent consideration	9,702		10,904

Equity in losses of nonconsolidated affiliates, net of distributions	7,793		2,090
Provision for uncollectible accounts receivable	6,054		(536)

Other, net	(307)		6,078
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable	(163,603)		(152,725)
Increase in prepaid expenses and other assets	(369,494)		(338,017)

Increase (decrease) in accounts payable, accrued expenses and other liabilities	(460,749)		236,584
Increase in deferred revenue	1,896,145		1,310,527
Net cash provided by operating activities	1,155,848		1,198,300
CASH FLOWS FROM INVESTING ACTIVITIES
Advances of notes receivable	(33,579)		(18,399)
Collections of notes receivable	2,825		6,709

Investments made in nonconsolidated affiliates	(6,455)		(26,243)
Purchases of property, plant and equipment	(116,886)		(62,525)

Cash acquired from (paid for) acquisitions, net of cash paid (acquired)	96,382		(13,962)


Other, net	(2,076)		(533)
Net cash used in investing activities	(59,789)		(114,953)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt issuance costs	987,793		700
Payments on long-term debt	(604,584)		(12,784)
Contributions from noncontrolling interests	5,944		5,712
Distributions to noncontrolling interests	(54,915)		(38,966)
Purchases and sales of noncontrolling interests, net	(21,606)		(105)
Payments for capped call transactions	(75,500)		—
Proceeds from exercise of stock options	994		10,907
Taxes paid for net share settlement of equity awards	(7,949)		(36,568)
Payments for deferred and contingent consideration	(2,606)		(3,610)
Other, net	(1,870)		(327)
Net cash provided by (used in) financing activities	225,701		(75,041)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	63,318		(21,079)
Net increase in cash, cash equivalents, and restricted cash	1,385,078		987,227
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	$	6,997,452	$	5,875,019

See Notes to Consolidated Financial Statements

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 March 31, 2023 and December 31, 2022, excluding intercompany balances and allocated goodwill and intangible assets, there were approximately $938 million and $514 million of assets and $791 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 March 31, 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.

Income Taxes

Each reporting period, we evaluate the realizability of our deferred tax assets in each tax jurisdiction. As of March 31, 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 three 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 amongst other things a corporate alternative minimum tax starting in the 2023 tax year. The Company is still assessing the impact due to lack of United States Treasury regulations; 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 did not have a material impact on our consolidated financial statements.

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

Property, Plant and Equipment, Net

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


	March 31, 2023		December 31, 2022
	(in thousands)
Land, buildings and improvements	$	1,971,186	$	1,648,488
Computer equipment and capitalized software	861,009		910,793
Furniture and other equipment	558,433		535,719
Construction in progress	223,775		244,618
	3,614,403		3,339,618
Less: accumulated depreciation	1,727,333		1,851,955
	$	1,887,070	$	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 three months ended March 31, 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—current year	2,649		—		20,929		—		—		23,578
Acquisitions—prior year	119		(2,232)		(11)		—		—		(2,124)

Foreign exchange	8,597		28,868		1,621		4,003		86		43,175
Other (2)	(5,326)		(22,462)		—		(13,583)		(16,580)		(57,951)
Net change	6,039		4,174		22,539		(9,580)		(16,494)		6,678
Accumulated amortization:
Amortization	(18,910)		(26,175)		(4,029)		(4,765)		(3,596)		(57,475)
Dispositions	—		—		—		—		464		464
Foreign exchange	(1,396)		(1,861)		(372)		(479)		(219)		(4,327)
Other (2)	5,327		22,462		58		13,587		17,142		58,576
Net change	(14,979)		(5,574)		(4,343)		8,343		13,791		(2,762)
Balance as of March 31, 2023:
Gross carrying amount	569,249		828,959		170,561		179,016		19,242		1,767,027
Accumulated amortization	(224,497)		(322,155)		(62,931)		(89,588)		(13,318)		(712,489)
Net	$	344,752	$	506,804	$	107,630	$	89,428	$	5,924	$	1,054,538

(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 are definite-lived intangible assets primarily associated with the acquisitions of certain venue management businesses located in the United States.

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


			Weighted- Average Life (years)

Client/vendor relationships			3


Venue management and leaseholds			9


All categories			8

Amortization of definite-lived intangible assets for the three months ended March 31, 2023 and 2022 was $57.5 million and $49.7 million, respectively. As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization will vary.

The following table presents our estimate of amortization expense for the remainder of the current year and the four succeeding fiscal years for definite-lived intangible assets that exist at March 31, 2023:


	(in thousands)
Remainder of 2023	$	155,399
2024	$	190,765
2025	$	159,011
2026	$	132,081
2027	$	106,473

Goodwill

The following table presents the changes in the carrying amount of goodwill in each of our reportable segments for the three months ended March 31, 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	11,204		—		—		11,204
Acquisitions—prior year	114		(106)		—		8


Foreign exchange	6,263		16,716		13,746		36,725

Balance as of March 31, 2023:
Goodwill	1,367,007		996,352		649,321		3,012,680
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	$	931,644	$	996,352	$	649,321	$	2,577,317

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 March 31, 2023 and December 31, 2022, we had investments in nonconsolidated affiliates of $361.5 million and $408.8 million, respectively, included in other long-term assets on our consolidated balance sheets.

NOTE 3—LEASES

The significant components of operating lease expense are as follows:


	Three Months Ended March 31,
		2023		2022
		(in thousands)
Operating lease expense		$	65,329	$	63,761
Variable and short-term lease expense		31,342		18,032
Sublease income		(2,188)		(970)
Net lease expense		$	94,483	$	80,823

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:


	Three Months Ended March 31,
	2023		2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	73,489	$	66,232
Lease assets obtained in exchange for lease obligations, net of terminations	$	43,636	$	157,244

As of March 31, 2023, we have additional operating leases that have not yet commenced, with total lease payments of $174.5 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from April 2023 to June 2030 due to certain offices and venues under construction with lease terms ranging from 2 to 30 years.

NOTE 4—LONG-TERM DEBT

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


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

	Term loan A	$	377,500	$	382,500
	Term loan B	843,459		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		528,932		252,199
Total principal amount		6,674,891		5,955,343
Less: unamortized discounts and debt issuance costs		(63,110)		(51,844)
Total long-term debt, net of unamortized discounts and debt issuance costs		6,611,781		5,903,499
Less: current portion		63,870		620,032
Total long-term debt, net		$	6,547,911	$	5,283,467

Future maturities of long-term debt at March 31, 2023 are as follows:


	(in thousands)
Remainder of 2023	$	55,837
2024	1,476,446
2025	51,803
2026	1,394,267
2027	2,155,327
Thereafter	1,541,211
Total	$	6,674,891

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. Interest on the 3.125% convertible senior notes due 2029 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 March 31, 2023.

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 3.125% convertible senior notes due 2029 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 March 31, 2023, the remaining period for the unamortized debt issuance costs balance of $15.0 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 March 31, 2023, the effective interest rate on the notes was 3.4%.

In connection with the issuance of the 3.125% convertible senior notes due 2029, 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 3.125% convertible senior notes due 2029, 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 provides 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 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 March 31, 2023, other long-term debt includes $270.7 million for a note due in 2026 related to an acquisition of a venue management business during the first quarter of 2023 in the United States.

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
	March 31, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
	(in thousands)
Assets:
Cash equivalents	$	794,275	$	—	$	794,275	$	503,964	$	—	$	503,964
Interest rate swaps	—		43,400		43,400		—		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
	March 31, 2023		December 31, 2022
	Level 2
	(in thousands)
6.5% Senior Secured Notes due 2027	$	1,213,140	$	1,175,460
3.75% Senior Secured Notes due 2028	$	448,095	$	429,035
4.875% Senior Notes due 2024	$	563,903	$	560,027
5.625% Senior Notes due 2026	$	291,978	$	285,315
4.75% Senior Notes due 2027	$	880,698	$	847,562
2.5% Convertible Senior Notes due 2023	$	—	$	588,473
2.0% Convertible Senior Notes due 2025	$	391,052	$	397,536
3.125% Convertible Senior Notes due 2029	$	985,040	$	—

The estimated fair value of our third-party fixed-rate debt is based on quoted market prices in active markets for the same or similar debt, which are considered to be Level 2 inputs.

NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES

Litigation

Consumer Class Actions

The following putative class action lawsuits were filed against Live Nation and/or Ticketmaster in Canada: Thompson-Marcial and Smith v. Ticketmaster Canada Holdings ULC (Ontario Superior Court of Justice, filed September 2018); McPhee v. Live Nation Entertainment, Inc., et al. (Superior Court of Quebec, District of Montreal, filed September 2018); Crystal Watch v. Live Nation Entertainment, Inc., et al. (Court of Queen’s Bench for Saskatchewan, by amendments filed September 2018); and Gomel v. Live Nation Entertainment, Inc., et al. (Supreme Court of British Columbia, Vancouver Registry, filed October 2018). Similar putative class actions were filed in the United States during the same time period, but as of November 2020, each of the lawsuits filed in the United States has been dismissed with prejudice.

The Canadian lawsuits make similar factual allegations that Live Nation and/or Ticketmaster engage in conduct that is intended to encourage the resale of tickets on secondary ticket exchanges at elevated prices. Based on these allegations, each

plaintiff asserts violations of different provincial and federal laws. Each plaintiff also seeks to represent a class of individuals who purchased tickets on a secondary ticket exchange, as defined in each plaintiff’s complaint. The Watch complaint also makes claims related to Ticketmaster’s fee display practices on the primary market. The complaints seek a variety of remedies, including unspecified compensatory damages, punitive damages, restitution, injunctive relief and attorneys’ fees and costs.

In April 2021, the court in the Gomel lawsuit declined to certify all claims other than those pled under British Columbia’s Business Practices and Consumer Protection Act and claims for punitive damages. The court did certify a class of British Columbia residents who purchased tickets to an event in Canada on any secondary market exchange from June 2015 through April 2021 that were initially purchased on Ticketmaster.ca. In May 2021, Ticketmaster and Live Nation filed a notice of appeal of the class certification ruling, and the plaintiff filed a cross-appeal shortly thereafter. The appeals were heard in early February 2023.

The court in the Watch matter issued its class certification ruling in November 2022. The court declined to certify and dismissed all claims other than those pled under provincial consumer protection statutes relating to drip pricing and certified a class of consumers who purchased tickets between September 2015 and June 2018 from Ticketmaster.ca on the primary market. In December 2022, the parties filed cross-notices of appeal of the court’s ruling. A hearing on the parties’ motions for leave to appeal took place in March 2023.

The class certification hearing in the Thompson-Marcial matter has not yet been scheduled. The McPhee matter is stayed pending the outcome of the Watch matter.

Based on information presently known to management, we do not believe that a loss is probable of occurring at this time, and we believe that the potential liability, if any, will not have a material adverse effect on our financial position, cash flows or results of operations. Further, we do not currently believe that the claims asserted in these lawsuits have merit, and considerable uncertainty exists regarding any monetary damages that will be asserted against us. We continue to vigorously defend these actions.

Astroworld Litigation

On November 5, 2021, the Astroworld music festival was held in Houston, Texas. During the course of the festival, ten members of the audience sustained fatal injuries and others suffered non-fatal injuries. Following these events, approximately 450 civil lawsuits have been filed against Live Nation Entertainment, Inc. and related entities, asserting insufficient crowd control and other theories, seeking compensatory and punitive damages. Pursuant to a February 2022 order of the state Multidistrict Litigation Panel, matter 21-1033, the civil cases have been assigned to Judge Kristen Hawkins of the 11th District Court of Harris County, Texas, for oversight of pretrial matters under Texas’s rules governing multidistrict litigation. Discovery is underway. Confidential settlements were reached with the families of three of the deceased plaintiffs in August through December 2022.

We are currently unable to reliably predict the developments in, outcome of, and economic costs and other consequences of pending or future litigation related to these matters. We will continue to investigate the factual and legal defenses, and evaluate these matters based on subsequent events, new information and future circumstances. We currently expect that liability insurance can provide sufficient coverage, but at this time there are no assurances of such coverage. Given that these cases are in the early stages and in light of the uncertainties surrounding them, we do not currently possess sufficient information to determine a range of reasonably possible liability. Notwithstanding the foregoing, and without admitting liability or wrongdoing, we may incur material liabilities from the 2021 Astroworld event, which could have a material impact on our business, financial condition, results of operations and/or cash flows.

Other Litigation

From time to time, we are involved in other legal proceedings arising in the ordinary course of our business, including proceedings and claims based upon purported violations of antitrust laws, intellectual property rights and tortious interference, which could cause us to incur significant expenses. We have also been the subject of personal injury and wrongful death claims relating to accidents at our venues in connection with our operations. As required, we have accrued our estimate of the probable settlement or other losses for the resolution of any outstanding claims. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, including, in some cases, estimated redemption rates for the settlement offered, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings.

NOTE 7—EQUITY

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in the components of AOCI, net of taxes, for the three months ended March 31, 2023:


	Cash Flow Hedge		Foreign Currency Items		Total
	(in thousands)
Balance at December 31, 2022	$	41,283	$	(131,359)	$	(90,076)
Other comprehensive income before reclassifications	(3,949)		80,148		76,199
Amount reclassified from AOCI	(3,548)		—		(3,548)
Net other comprehensive income	(7,497)		80,148		72,651
Balance at March 31, 2023	$	33,786	$	(51,211)	$	(17,425)

Earnings Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted net income (loss) per common share includes the effects of the assumed exercise of any outstanding stock options, the assumed vesting of shares of restricted and deferred stock awards and the assumed conversion of our convertible senior notes, where dilutive. For the three months ended March 31, 2023 and 2022, there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net loss per common share.

The following table shows securities excluded from the calculation of diluted net income (loss) per common share because such securities are anti-dilutive:


	Three Months Ended March 31,
		2023	2022
Options to purchase shares of common stock		3,237,229	6,705,816
Restricted stock and deferred stock—unvested		3,593,402	3,805,686

Conversion shares related to the convertible senior notes		13,004,660	11,864,035
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding		19,835,291	22,375,537

NOTE 8—SEGMENTS AND REVENUE RECOGNITION

For the three months ended March 31, 2023 and 2022, our reportable segments are Concerts, Ticketing and Sponsorship & Advertising. We use AOI to evaluate the performance of our operating segments and define AOI as operating income (loss) before certain stock-based compensation expense, loss (gain) on disposal of operating assets, depreciation and amortization (including goodwill impairment), amortization of non-recoupable ticketing contract advances and acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation). AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results.

Revenue and expenses earned and charged between segments are eliminated in consolidation. Our capital expenditures below include accruals for amounts incurred but not yet paid for, but are not reduced by reimbursements received from outside parties such as landlords and noncontrolling interest partners or replacements funded by insurance proceeds.

We manage our working capital on a consolidated basis. Accordingly, segment assets are not reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets and related depreciation and amortization have not been presented.

The following table presents the results of operations for our reportable segments for the three months ended March 31, 2023 and 2022:


	Concerts		Ticketing		Sponsorship & Advertising		Other & Eliminations		Corporate		Consolidated
	(in thousands)






















Three Months Ended March 31, 2023
Revenue	$	2,281,212	$	677,741	$	170,118	$	(1,681)	$	—	$	3,127,390
% of Consolidated Revenue	72.9%		21.7%		5.4%		—%
Intersegment revenue	$	898	$	783	$	—	$	(1,681)	$	—	$	—






AOI	$	832	$	271,051	$	95,531	$	(7,939)	$	(39,765)	$	319,710


Three Months Ended March 31, 2022
Revenue	$	1,207,825	$	480,399	$	115,689	$	(1,105)	$	—	$	1,802,808
% of Consolidated Revenue	67.0%		26.6%		6.4%		—%
Intersegment revenue	$	652	$	1,266	$	—	$	(1,918)	$	—	$	—






AOI	$	(49,166)	$	206,220	$	69,700	$	(4,380)	$	(13,335)	$	209,039

The following table sets forth the reconciliation of consolidated AOI to operating income for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
		2023		2022
		(in thousands)
AOI		$	319,710	$	209,039
Acquisition expenses		13,311		12,077
Amortization of non-recoupable ticketing contract advances		20,363		18,527
Depreciation and amortization		115,185		100,469
Loss on disposal of operating assets		504		1,665
Stock-based compensation expense		27,571		49,241
Operating income		$	142,776	$	27,060

Contract Advances

At March 31, 2023 and December 31, 2022, we had ticketing contract advances of $87.8 million and $106.5 million, respectively, recorded in prepaid expenses and $106.2 million and $105.0 million, respectively, recorded in long-term advances on the consolidated balance sheets. We amortized $20.4 million and $18.5 million for the three months ended March 31, 2023 and 2022, respectively, related to non-recoupable ticketing contract advances.

Sponsorship Agreements

At March 31, 2023, we had contracted sponsorship agreements with terms greater than one year that had approximately $1.5 billion of revenue related to future benefits to be provided by us. We expect to recognize, based on current projections, approximately 30%, 26%, 19% and 25% of this revenue in the remainder of 2023, 2024, 2025 and thereafter, respectively.

Deferred Revenue

The majority of our deferred revenue is typically classified as current and is shown as a separate line item on the consolidated balance sheets. Deferred revenue that is not expected to be recognized within the next twelve months is classified as long-term and reflected in other long-term liabilities on the consolidated balance sheets. We had current deferred revenue of $3.1 billion and $2.8 billion at December 31, 2022 and 2021, respectively.

The table below summarizes the amount of the preceding December 31 current deferred revenue recognized during the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
		2023		2022
		(in thousands)
Concerts		$	681,380	$	278,546
Ticketing		34,600		23,043
Sponsorship & Advertising		50,680		34,239

		$	766,660	$	335,828

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