Live Nation Entertainment, Inc 10-Q for FY2022 Q1

Live Nation Entertainment, Inc. (LYV)

10-Q 2022-05-05 For: 2022-03-31

Added on April 08, 2026

About this 10-Q

Live Nation Entertainment, Inc filed this 10-Q on May 5, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.8B; up 520.4% from $290.61M a year earlier
Net loss: $50.18M; compared with a net loss of $307.19M a year earlier
Diluted EPS: -$0.39; compared with -$1.44 a year earlier

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Delaware						20-3247759
(State of Incorporation)						(I.R.S. Employer Identification No.)


		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Consolidated Balance Sheets (Unaudited) as of March 3 1 , 202 2 and December 31, 2021	2
	Consolidated Statements of Operations (Unaudited) for the three months ended March 3 1 , 202 2 and 2021	3
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three months ended March 31, 202 2 and 2021	4
	Consolidated Statements of Changes in Equity (Unaudited) for the three months ended March 31, 202 2 and 2021	5
	Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 202 2 and 2021	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 5.	Other Information	37
Item 6.	Exhibits	38


GLOSSARY OF KEY TERMS
AOCI			Accumulated other comprehensive income (loss)
AOI			Adjusted operating income (loss)




FASB			Financial Accounting Standards Board
GAAP			United States Generally Accepted Accounting Principles

GTV			Gross transaction value
Live Nation			Live Nation Entertainment, Inc. and subsidiaries
LNE			Live Nation Entertainment, Inc.
OCESA			OCESA Entretenimiento, S.A. de C.V. and certain other related subsidiaries of Corporación Interamericana de Entretenimiento, S.A.B. de C.V.
SEC			United States Securities and Exchange Commission
Ticketmaster			Our ticketing business


	March 31, 2022		December 31, 2021
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	5,871,905	$	4,884,729
Accounts receivable, less allowance of $50,225 and $50,491, respectively	1,210,007		1,066,573
Prepaid expenses	963,227		654,894
Restricted cash	3,114		3,063
Other current assets	62,182		74,834
Total current assets	8,110,435		6,684,093
Property, plant and equipment, net	1,086,307		1,091,929
Operating lease assets	1,649,982		1,538,911
Intangible assets
Definite-lived intangible assets, net	1,004,446		1,026,338
Indefinite-lived intangible assets	368,943		369,028
Goodwill	2,604,811		2,590,869
Long-term advances	576,601		552,697
Other long-term assets	605,077		548,453
Total assets	$	16,006,602	$	14,402,318
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, client accounts	$	1,804,348	$	1,532,345
Accounts payable	67,008		110,623
Accrued expenses	1,511,446		1,645,906
Deferred revenue	4,049,866		2,774,792
Current portion of long-term debt, net	611,319		585,254
Current portion of operating lease liabilities	139,050		123,715
Other current liabilities	95,450		83,087
Total current liabilities	8,278,487		6,855,722
Long-term debt, net	5,146,681		5,145,484
Long-term operating lease liabilities	1,708,610		1,606,064

Other long-term liabilities	436,789		431,581
Commitments and contingent liabilities
Redeemable noncontrolling interests	581,652		551,921
Stockholders' equity
Common stock	2,235		2,220
Additional paid-in capital	2,888,551		2,897,695
Accumulated deficit	(3,317,397)		(3,327,737)
Cost of shares held in treasury	(6,865)		(6,865)
Accumulated other comprehensive loss	(84,341)		(147,964)
Total Live Nation stockholders' equity	(517,817)		(582,651)
Noncontrolling interests	372,200		394,197
Total equity	(145,617)		(188,454)
Total liabilities and equity	$	16,006,602	$	14,402,318


	Three Months Ended March 31,
		2022		2021

		(in thousands except share and per share data)
Revenue		$	1,802,808	$	290,609
Operating expenses:
Direct operating expenses		1,071,022		133,966
Selling, general and administrative expenses		570,182		322,853
Depreciation and amortization		100,469		108,876
Loss on disposal of operating assets		1,665		138
Corporate expenses		32,410		27,948
Operating income (loss)		27,060		(303,172)
Interest expense		66,773		70,830

Interest income		(7,564)		(1,149)
Equity in earnings of nonconsolidated affiliates		(4,288)		(581)
Loss (gain) from sale of investments in nonconsolidated affiliates		132		(55,933)
Other expense (income), net		9,267		(6)
Loss before income taxes		(37,260)		(316,333)
Income tax expense		11,696		6,389
Net loss		(48,956)		(322,722)
Net income (loss) attributable to noncontrolling interests		1,226		(15,529)
Net loss attributable to common stockholders of Live Nation		$	(50,182)	$	(307,193)

Basic and diluted net loss per common share available to common stockholders of Live Nation		$	(0.39)	$	(1.44)


Weighted average common shares outstanding:
Basic and diluted		221,890,625		214,531,958



Reconciliation to net loss available to common stockholders of Live Nation:
Net loss attributable to common stockholders of Live Nation		$	(50,182)	$	(307,193)
Accretion of redeemable noncontrolling interests		(35,714)		(916)
Basic and diluted net loss available to common stockholders of Live Nation		$	(85,896)	$	(308,109)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	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


	Initial Allocation
	(in thousands)
Fair value of consideration transferred	$	431,943
Fair value of redeemable noncontrolling interests	280,000
Fair value of noncontrolling interests	7,000
Fair value of pre-existing investment in nonconsolidated affiliates	50,000

Less: Preliminary recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	105,118
Accounts receivable	85,586
Prepaid expenses	33,060
Other current assets	658
Property, plant and equipment	25,318
Operating lease assets	67,142
Intangible assets	340,000
Investments in nonconsolidated affiliates	30,000
Other long-term assets	36,525
Accounts payable, client accounts	(12,566)
Accounts payable	(13,344)
Accrued expenses	(59,120)
Deferred revenue	(144,557)
Current portion of operating lease liabilities	(9,209)

Long-term operating lease liabilities	(57,984)
Long-term deferred income taxes	(102,279)

Goodwill	$	444,595


	Preliminary Estimated Fair Value		Preliminary Estimated Useful Lives (1)
	(in thousands)		(years)
Client/vendor relationships	$	102,000	5 to 10
Revenue-generating contracts	90,000		4 to 10
Venue management and leaseholds	107,000		10
Trademarks and naming rights	41,000		5 to 10
Total acquired intangible assets	$	340,000


	March 31, 2022		December 31, 2021
	(in thousands)
Land, buildings and improvements	$	1,353,171	$	1,324,278
Computer equipment and capitalized software	885,573		910,581
Furniture and other equipment	446,734		411,403
Construction in progress	123,978		173,865
	2,809,456		2,820,127
Less: accumulated depreciation	1,723,149		1,728,198
	$	1,086,307	$	1,091,929


	Client / vendor relationships		Revenue- generating contracts		Venue management and leaseholds		Trademarks and naming rights		Technology		Other (1)		Total
	(in thousands)
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	1,003		—		9,978		—		—		—		10,981
Acquisitions—prior year	(2)		—		—		—		—		—		(2)

Foreign exchange	4,416		7,307		2,518		3,729		(10)		12		17,972
Other (2)	—		—		—		—		(5,612)		(540)		(6,152)
Net change	5,417		7,307		12,496		3,729		(5,622)		(528)		22,799
Accumulated amortization:
Amortization	(18,106)		(17,218)		(6,046)		(4,556)		(2,959)		(824)		(49,709)

Foreign exchange	(35)		(759)		269		(788)		5		185		(1,123)
Other (2)	—		—		(7)		2		5,706		440		6,141
Net change	(18,141)		(17,977)		(5,784)		(5,342)		2,752		(199)		(44,691)
Balance as of March 31, 2022:
Gross carrying amount	582,347		600,565		245,352		184,594		31,713		9,886		1,654,457
Accumulated amortization	(196,866)		(293,886)		(52,713)		(84,691)		(15,623)		(6,232)		(650,011)
Net	$	385,481	$	306,679	$	192,639	$	99,903	$	16,090	$	3,654	$	1,004,446


			Weighted- Average Life (years)

Client/vendor relationships			3


Venue management and leaseholds			30


All categories			28


	Concerts		Ticketing		Sponsorship & Advertising		Total
	(in thousands)
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	3,086		—		—		3,086
Acquisitions—prior year	6,164		5,864		(9,788)		2,240

Dispositions	(1,792)		—		—		(1,792)
Foreign exchange	(4,227)		3,127		11,508		10,408

Balance as of March 31, 2022:
Goodwill	1,393,682		939,055		707,437		3,040,174
Accumulated impairment losses	(435,363)		—		—		(435,363)
Net	$	958,319	$	939,055	$	707,437	$	2,604,811


	(in thousands)
April 1 - December 31, 2022	$	166,639
2023	247,013
2024	232,688
2025	216,901
2026	205,071
Thereafter	1,689,663
Total lease payments	2,757,975
Less: Interest	910,315
Present value of lease liabilities	$	1,847,660


	Three Months Ended March 31,
	2022		2021
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(48,956)	$	(322,722)
Reconciling items:
Depreciation	50,760		56,975
Amortization	49,709		51,901
Amortization of non-recoupable ticketing contract advances	18,527		10,621

Amortization of debt issuance costs and discounts	4,114		9,196

Non-cash compensation expense	49,241		40,017
Unrealized changes in fair value of contingent consideration	10,904		(9,440)



Loss (gain) on sale of investments in nonconsolidated affiliates	132		(53,899)
Other, net	7,500		2,921
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in accounts receivable	(152,725)		21,861
Decrease (increase) in prepaid expenses and other assets	(338,017)		4,704

Increase (decrease) in accounts payable, accrued expenses and other liabilities	236,584		(39,044)
Increase in deferred revenue	1,310,527		301,483
Net cash provided by operating activities	1,198,300		74,574
CASH FLOWS FROM INVESTING ACTIVITIES
Advances of notes receivable	(18,399)		(10,784)
Collections of notes receivable	6,709		884

Investments made in nonconsolidated affiliates	(26,243)		(5,506)
Purchases of property, plant and equipment	(62,525)		(23,763)

Cash paid for acquisitions, net of cash acquired	(13,962)		(6,132)

Proceeds from sale of investments in nonconsolidated affiliates	332		60,308
Other, net	(865)		(4,899)
Net cash provided by (used in) investing activities	(114,953)		10,108
CASH FLOWS FROM FINANCING ACTIVITIES


	Estimated Fair Value at
	March 31, 2022		December 31, 2021
	Level 2
	(in thousands)
6.5% Senior Secured Notes due 2027	$	1,278,408	$	1,315,284
3.75% Senior Secured Notes due 2028	$	471,290	$	498,380
4.75% Senior Notes due 2027	$	927,134	$	978,358
4.875% Senior Notes due 2024	$	578,404	$	582,952
5.625% Senior Notes due 2026	$	305,865	$	310,284
2.5% Convertible Senior Notes due 2023	$	972,725	$	996,369
2.0% Convertible Senior Notes due 2025	$	518,376	$	531,040


	Three Months Ended March 31,
		2022	2021
		(in thousands except estimated events)
Concerts (1)
Estimated events:
North America		4,716	304
International		1,891	364
Total estimated events		6,607	668
Estimated fans:
North America		6,780	69
International		4,020	429
Total estimated fans		10,800	498
Ticketing (2)
Estimated number of fee-bearing tickets sold		51,380	6,593
Estimated number of non-fee-bearing tickets sold		59,912	10,558
Total estimated tickets sold		111,292	17,151


*			Percentages are not meaningful.
**			See “—Non-GAAP Measures” above for the definition of AOI and AOI margin as well as reconciliation of AOI.


	March 31, 2022		December 31, 2021
Weighted average remaining lease term (in years)	13.8		13.2
Weighted average discount rate	5.94	%	6.10	%


	Estimated Fair Value
	March 31, 2022						December 31, 2021
	Level 1		Level 2		Total		Level 1		Level 2		Total
	(in thousands)
Assets:
Cash equivalents	$	852,653	$	—	$	852,653	$	620,980	$	—	$	620,980


	Cash Flow Hedge		Foreign Currency Items		Total
	(in thousands)
Balance at December 31, 2021	$	(8,558)	$	(139,406)	$	(147,964)
Other comprehensive income before reclassifications	23,969		37,752		61,721
Amount reclassified from AOCI	1,902		—		1,902
Net other comprehensive income	25,871		37,752		63,623
Balance at March 31, 2022	$	17,313	$	(101,654)	$	(84,341)


	Operating income (loss)		Stock- based compensation expense		Loss (gain) on disposal of operating assets		Depreciation and amortization		Amortization of non-recoupable ticketing contract advances		Acquisition expenses		AOI
	(in thousands)














Three Months Ended March 31, 2022
Concerts	$	(149,601)	$	25,675	$	1,868	$	61,163	$	—	$	11,729	$	(49,166)
Ticketing	154,788		2,371		(203)		28,052		21,212		—		206,220
Sponsorship & Advertising	59,007		2,468		—		8,225		—		—		69,700
Other and Eliminations	(1,746)		—		—		51		(2,685)		—		(4,380)
Corporate	(35,388)		18,727		—		2,978		—		348		(13,335)
Total	$	27,060	$	49,241	$	1,665	$	100,469	$	18,527	$	12,077	$	209,039
Three Months Ended March 31, 2021
Concerts	$	(145,359)	$	17,475	$	138	$	62,886	$	—	$	(9,679)	$	(74,539)
Ticketing	(120,656)		7,806		—		36,478		12,423		1,197		(62,752)
Sponsorship & Advertising	(6,441)		2,793		—		7,164		—		—		3,516
Other and Eliminations	(431)		—		—		11		(1,802)		—		(2,222)
Corporate	(30,285)		11,943		—		2,337		—		258		(15,747)
Total	$	(303,172)	$	40,017	$	138	$	108,876	$	10,621	$	(8,224)	$	(151,744)


	Three Months Ended March 31,				% Change
		2022			2021
	(in thousands)
Revenue		$	1,207,825		$	239,416		*
Direct operating expenses		910,277			113,904			*
Selling, general and administrative expenses		384,118			207,847			85%
Depreciation and amortization		61,163			62,886			(3)%
Loss on disposal of operating assets		1,868			138			*

Operating loss		$	(149,601)		$	(145,359)		(3)%
Operating margin		(12.4		%)	(60.7		%)
AOI **		$	(49,166)		$	(74,539)		34%
AOI margin **		(4.1		%)	(31.1		%)


	Three Months Ended March 31,										% Change
	2022								2021
	As Reported			Currency Impacts		At Constant Currency**			As Reported		As Reported	At Constant Currency**
	(in thousands)
Revenue	$	1,802,808		$	14,020	$	1,816,828		$	290,609	*	*
Operating expenses:
Direct operating expenses	1,071,022			7,841		1,078,863			133,966		*	*
Selling, general and administrative expenses	570,182			7,310		577,492			322,853		77%	79%
Depreciation and amortization	100,469			950		101,419			108,876		(8)%	(7)%
Loss on disposal of operating assets	1,665			(2)		1,663			138		*	*
Corporate expenses	32,410			20		32,430			27,948		16%	16%

Operating income (loss)	27,060			$	(2,099)	$	24,961		(303,172)		*	*
Operating margin	1.5		%			1.4		%	*
Interest expense	66,773								70,830

Interest income	(7,564)								(1,149)
Equity in earnings of nonconsolidated affiliates	(4,288)								(581)
Loss (gain) from sale of investments in nonconsolidated affiliates	132								(55,933)
Other expense (income), net	9,267								(6)
Loss before income taxes	(37,260)								(316,333)
Income tax expense	11,696								6,389
Net loss	(48,956)								(322,722)
Net income (loss) attributable to noncontrolling interests	1,226								(15,529)
Net loss attributable to common stockholders of Live Nation	$	(50,182)							$	(307,193)


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (1)	Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Maximum Fair Value of Shares that May Yet Be Purchased Under the Program (2)
January 2022	29,489	$113.87
February 2022	109,091	$119.83
March 2022	183,618	$109.67
	322,198

(1) Represents shares of common stock that employees surrendered as part of the default option to satisfy withholding taxes in connection with the vesting of restricted stock awards under our stock incentive plan. Pursuant to the terms of our stock plan, such shares revert to available shares under the plan.
(2) We do not have a publicly announced program to purchase shares of our common stock. Accordingly, there were no shares purchased as part of a publicly announced program.


LIVE NATION ENTERTAINMENT, INC.

By:			/s/ Brian Capo
			Brian Capo
			Chief Accounting Officer (Duly Authorized Officer)