Live Nation Entertainment Reports Third Quarter 2020 Results
Live Nation Entertainment (LYV) reported its Q3 2020 results, noting that 83% of fans are retaining tickets for rescheduled shows. The company has implemented a $900 million cost reduction program and a $1.5 billion cash management initiative this year. With $2.6 billion in cash and equivalents, including $951 million in free cash, Live Nation believes it can sustain operations until concerts return at scale in summer 2021. A global survey indicates 95% of fans plan to return to live music events post-restrictions, signaling robust demand for future events.
- 83% of fans retaining tickets for rescheduled shows.
- 95% of fans plan to return to live music events when restrictions lift.
- $2.6 billion in cash and cash equivalents, providing strong liquidity.
- Successful festival ticket sales, with EDC Las Vegas selling out in under 24 hours.
- Ongoing regional restrictions on live events delaying returns.
- Uncertainty regarding the exact timeline for resuming large-scale shows.
Highlights
83% of Fans Keeping Tickets for Rescheduled Shows$900 Million Cost Reduction Program Target in 2020$1.5 Billion Cash Management Program Target in 2020
LOS ANGELES, Nov. 5, 2020 /PRNewswire/ -- Live Nation Entertainment, Inc. (NYSE: LYV) today released financial results for the quarter ended September 30, 2020.
There have been no major changes in our business conditions or outlook over the past three months, and while we see signs of promise around the world as some live events return, most regions we operate in continue to have various restrictions on live events. For now, we continue to maintain a strong cash management discipline, while planning for the ramp up to resume live shows as soon as possible.
Enduring Demand for Live
We also continue to see strong fan demand across the board. Our sales and survey data tell us fan demand will be there when the time is right. Our refund rate on rescheduled shows remains consistently low, with
Festival on-sales for next year have been strong, with EDC Las Vegas 2021 sold out in less than 24 hours at a higher capacity than last year, and with ticket sales for Reading, Creamfields and Isle of Wight festivals in the UK all pacing ahead of last year at this time. And we are encouraged by the enthusiasm for the recent events and gatherings that have started to take place, including our first sold-out arena tour with 20,000 fans in New Zealand, where business is headed back to normal.
Leading the Return to Live
Meanwhile, we are working on our roadmap to get back to live safely. We are encouraged by progress on testing technology, treatments and vaccines, which helps us build our plans. We still expect shows at scale next summer, but recognize that the exact timeline of this return will vary by region, and so we continue to focus on remaining flexible.
In preparation, there are two areas we are focusing on:
On the technology front, Ticketmaster is creating the tools we will need to make sure live events can deliver a variety of safety precautions when returning and enhance the fan experience well into the future. We recently unveiled SmartEvent, which includes new products such as our social distancing seat mapping tool and timed entry technology that have been created to give venues the flexibility to plan how to manage everything from venue access to box office interactions. Existing products, including our SafeTix digital ticketing technology, can fulfill new needs, including being a key facilitator for contact tracing when required. And the ability to integrate third-party applications with our digital ticketing platform enables a range of customizable features from contactless concessions to testing and health questionnaire tracking.
On the concert front, Live Nation is developing a set of standards for executing shows at our venues. We are collaborating with health experts to create show guidelines that put in place procedures which can adapt to various situations, across all regions. From venue sanitation procedures to fan-friendly policies on ticket purchases and the latest testing options, we are setting standards that will give fans, crews and artists peace of mind before, during and after the show.
As we look ahead, it is clear that the path to live will not be a straight line. As such, we will maintain flexibility and focus on innovating during this time.
Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.
Additional Information on Liquidity
At the end of the third quarter, the company had total cash and cash equivalents of
The company will webcast a teleconference today at 2:00 p.m. Pacific Time to discuss its financial performance, operational matters and potentially other material developments. Interested parties should visit the "News / Events" section of the company's website at investors.livenationentertainment.com to listen to the webcast. Supplemental statistical and financial information to be provided on the call, if any, will be posted to the "Financial Info" section of the website. A replay of the webcast will also be available on the Live Nation website.
Notice Regarding Financial Statements
The company has provided certain financial statements at the end of this press release for reference. These financial statements should be read in conjunction with the full financial statements, and the notes thereto, set forth in the company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission today and available on the SEC's website at sec.gov.
About Live Nation Entertainment:
Live Nation Entertainment, Inc. (NYSE: LYV) is the world's leading live entertainment company comprised of global market leaders: Ticketmaster, Live Nation Concerts, and Live Nation Media & Sponsorship. For additional information, visit investors.livenationentertainment.com.
FINANCIAL HIGHLIGHTS – 3rd QUARTER | |||||||||||||||||
(unaudited; $ in millions) | |||||||||||||||||
Q3 2020 | Q3 2019 | Growth | Q3 2020 | Growth at | |||||||||||||
Revenue | |||||||||||||||||
Concerts | $ | 154.8 | $ | 3,173.8 | (95) | % | $ | 151.9 | (95) | % | |||||||
Ticketing | (19.8) | 388.5 | * | (20.2) | * | ||||||||||||
Sponsorship & Advertising | 47.9 | 215.2 | (78) | % | 46.2 | (79) | % | ||||||||||
Other and Eliminations | 1.1 | (3.8) | * | 1.1 | * | ||||||||||||
$ | 184.0 | $ | 3,773.7 | (95) | % | $ | 179.0 | (95) | % | ||||||||
Operating Income (Loss) | |||||||||||||||||
Concerts | $ | (281.6) | $ | 111.4 | * | $ | (281.0) | * | |||||||||
Ticketing | (197.4) | 64.2 | * | (195.9) | * | ||||||||||||
Sponsorship & Advertising | 13.8 | 133.2 | (90) | % | 12.3 | (91) | % | ||||||||||
Other and Eliminations | (4.8) | (0.1) | * | (4.8) | * | ||||||||||||
Corporate | (34.4) | (48.7) | 29 | % | (34.4) | 29 | % | ||||||||||
$ | (504.4) | $ | 260.0 | * | $ | (503.8) | * | ||||||||||
Adjusted Operating Income | |||||||||||||||||
Concerts | $ | (173.4) | $ | 194.5 | * | $ | (172.7) | * | |||||||||
Ticketing | (141.9) | 127.3 | * | (141.0) | * | ||||||||||||
Sponsorship & Advertising | 22.9 | 145.3 | (84) | % | 21.4 | (85) | % | ||||||||||
Other and Eliminations | (5.1) | (1.8) | * | (5.1) | * | ||||||||||||
Corporate | (21.7) | (38.2) | 43 | % | (21.7) | 43 | % | ||||||||||
$ | (319.2) | $ | 427.1 | * | $ | (319.1) | * |
* percentages are not meaningful |
FINANCIAL HIGHLIGHTS – 9 MONTHS | ||||||||||||||||||
(unaudited; $ in millions) | ||||||||||||||||||
9 Months | 9 Months | Growth | 9 Months | Growth at | ||||||||||||||
Revenue | ||||||||||||||||||
Concerts | $ | 1,290.0 | $ | 7,131.5 | (82) | % | $ | 1,304.9 | (82) | % | ||||||||
Ticketing | 177.4 | 1,096.9 | (84) | % | 177.9 | (84) | % | |||||||||||
Sponsorship & Advertising | 156.6 | 441.9 | (65) | % | 156.6 | (65) | % | |||||||||||
Other and Eliminations | (0.2) | (11.8) | 98 | % | (0.2) | 98 | % | |||||||||||
$ | 1,623.8 | $ | 8,658.5 | (81) | % | $ | 1,639.2 | (81) | % | |||||||||
Operating Income (Loss) | ||||||||||||||||||
Concerts | $ | (722.6) | $ | 112.9 | * | $ | (726.6) | * | ||||||||||
Ticketing | (480.5) | 170.9 | * | (482.0) | * | |||||||||||||
Sponsorship & Advertising | 40.8 | 256.8 | (84) | % | 40.5 | (84) | % | |||||||||||
Other and Eliminations | (13.0) | (0.4) | * | (13.0) | * | |||||||||||||
Corporate | (89.9) | (132.5) | 32 | % | (89.9) | 32 | % | |||||||||||
$ | (1,265.2) | $ | 407.7 | * | $ | (1,271.0) | * | |||||||||||
Adjusted Operating Income | ||||||||||||||||||
Concerts | $ | (472.3) | $ | 332.7 | * | $ | (475.1) | * | ||||||||||
Ticketing | (300.8) | 351.6 | * | (302.0) | * | |||||||||||||
Sponsorship & Advertising | 67.7 | 283.6 | (76) | % | 67.4 | (76) | % | |||||||||||
Other and Eliminations | (11.7) | (4.6) | * | (11.7) | * | |||||||||||||
Corporate | (54.5) | (101.5) | 46 | % | (54.5) | 46 | % | |||||||||||
$ | (771.6) | $ | 861.8 | * | $ | (775.9) | * |
* percentages are not meaningful |
- As of September 30, 2020, total cash and cash equivalents were
$2.6 billion , which includes$614 million in ticketing client cash and$951 million in free cash. - Event-related deferred revenue was
$1.4 billion as of September 30, 2020, compared to$952 million as of September 30, 2019. In addition, we had long-term deferred revenue of$103 million for events that have been rescheduled more than one year out as of September 30, 2020. - For the nine months ended September 30, 2020, net cash used in operating activities was
$(957) million and free cash flow — adjusted was$(924) million . - We currently expect capital expenditures for the full year to be approximately
$210 million .
KEY OPERATING METRICS | |||||||||||
Q3 2020 | Q3 2019 | 9 Months | 9 Months | ||||||||
(in thousands except estimated events) | |||||||||||
Concerts (1) | |||||||||||
Events: | |||||||||||
North America | 226 | 7,249 | 5,009 | 20,137 | |||||||
International | 141 | 1,879 | 2,571 | 7,450 | |||||||
Total estimated events | 367 | 9,128 | 7,580 | 27,587 | |||||||
Fans: | |||||||||||
North America | 208 | 22,777 | 5,945 | 47,587 | |||||||
International | 61 | 8,843 | 4,779 | 25,979 | |||||||
Total estimated fans | 269 | 31,620 | 10,724 | 73,566 | |||||||
Ticketing (2) | |||||||||||
Fee-bearing tickets | 1,323 | 55,348 | 28,801 | 158,558 | |||||||
Non-fee-bearing tickets | 8,392 | 61,664 | 70,031 | 182,529 | |||||||
Total estimated tickets | 9,715 | 117,012 | 98,832 | 341,087 |
(1) | Events generally represent a single performance by an artist. Fans generally represent the number of people who attend an event. Festivals are counted as one event in the quarter in which the festival begins, but the number of fans is based on the days the fans were present at the festival and thus can be reported across multiple quarters. Events and fan attendance metrics are estimated each quarter. |
(2) | The fee-bearing tickets estimated above include primary and secondary tickets that are sold using our Ticketmaster systems or that we issue through affiliates. This metric includes primary tickets sold during the period regardless of event timing, except for our own events where our concert promoters control ticketing which are reported when the events occur. The non-fee-bearing tickets estimated above include primary tickets sold using our Ticketmaster systems, through season seat packages and our venue clients' box offices, along with tickets sold on our "do it yourself" platform. These ticketing metrics are net of any refunds requested and any cancellations that occurred during the period and up to the time of reporting of our financial statements. Fee-bearing tickets include refunds of 5.2 million and 23.3 million for the three and nine months ended September 30, 2020, respectively. |
Reconciliation of Certain Non-GAAP Measures to Their Most Directly Comparable GAAP Measures (Unaudited)
Reconciliation of Free Cash Flow — Adjusted to Net Cash Provided by (Used in) Operating Activities | |||||||
($ in millions) | Q3 2020 | Q3 2019 | |||||
Net cash used in operating activities | $ | (566.5) | $ | (260.4) | |||
Less: Changes in operating assets and liabilities (working capital) | 223.9 | 624.2 | |||||
Free cash flow from earnings | $ | (342.6) | $ | 363.8 | |||
Less: Maintenance capital expenditures | (10.3) | (46.0) | |||||
Distributions to noncontrolling interests | (5.2) | (9.8) | |||||
Free cash flow — adjusted | $ | (358.1) | $ | 308.0 | |||
Net cash used in investing activities | $ | (33.9) | $ | (121.7) | |||
Net cash used in financing activities | $ | (100.5) | $ | (41.7) |
($ in millions) | 9 Months 2020 | 9 Months 2019 | |||||
Net cash provided by (used in) operating activities | $ | (956.9) | $ | 32.9 | |||
Less: Changes in operating assets and liabilities (working capital) | 120.9 | 676.4 | |||||
Free cash flow from earnings | $ | (836.0) | $ | 709.3 | |||
Less: Maintenance capital expenditures | (56.0) | (105.4) | |||||
Distributions to noncontrolling interests | (31.5) | (73.2) | |||||
Free cash flow — adjusted | $ | (923.5) | $ | 530.7 | |||
Net cash used in investing activities | $ | (224.5) | $ | (403.4) | |||
Net cash provided by (used in) financing activities | $ | 1,361.6 | $ | (139.6) |
Reconciliation of Free Cash to Cash and Cash Equivalents | |||
($ in millions) | September 30, | ||
2020 | |||
Cash and cash equivalents | $ | 2,625.1 | |
Client cash | (614.4) | ||
Deferred revenue — event-related | (1,361.6) | ||
Accrued artist fees | (25.1) | ||
Collections on behalf of others | (48.1) | ||
Prepaid expenses — event-related | 375.0 | ||
Free cash | $ | 950.9 |
Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations:
Certain statements in this press release, including the Supplemental Information that follows, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements regarding the company's expectation that shows at scale will be held in the summer of 2021; future fan demand for live events; the company's ability to create ticketing technology tools and to develop a set of standards for executing shows at its venues in order to make sure live events can deliver a variety of safety precautions when returning; the company's cost reduction program and cash management program targets for 2020; the company's belief that its current level of liquidity provides it with the ability to fund operations until the expected return of concerts at scale in the summer of 2021, preceded by ticket sales earlier in the year; the company's current expectations for capital expenditures for 2020; the company's current forecast of approximately
Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled "Item 1A. Risk Factors" of the company's most recent Annual Report filed on Form 10-K, and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.
This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided herein.
Adjusted Operating Income (Loss), or AOI, is a non-GAAP financial measure that we define 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). We use AOI to evaluate the performance of our operating segments. We believe that information about 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. AOI is not calculated or presented in accordance with GAAP. A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, AOI should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.
Constant Currency is a non-GAAP financial measure. We calculate currency impacts as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior period's currency exchange rates. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.
Free Cash Flow — Adjusted, or FCF, is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities less changes in operating assets and liabilities, less maintenance capital expenditures, less distributions to noncontrolling interest partners. We use FCF among other measures, to evaluate the ability of operations to generate cash that is available for purposes other than maintenance capital expenditures. We believe that information about FCF provides investors with an important perspective on the cash available to service debt, make acquisitions, and for revenue generating capital expenditures. FCF is not calculated or presented in accordance with GAAP. A limitation of the use of FCF as a performance measure is that it does not necessarily represent funds available for operations and is not necessarily a measure of our ability to fund our cash needs. Accordingly, FCF should be considered in addition to, and not as a substitute for, net cash provided by (used in) operating activities and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, FCF as presented herein may not be comparable to similarly titled measures of other companies.
Free Cash is a non-GAAP financial measure that we define as cash and cash equivalents less ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and cash collected on behalf of others, plus event-related prepaids. We use free cash as a proxy for how much cash we have available to, among other things, optionally repay debt balances, make acquisitions and fund revenue generating capital expenditures. Free cash is not calculated or presented in accordance with GAAP. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.
Reconciliations of Certain Non-GAAP Measures to Their Most Directly Comparable GAAP Measures (Unaudited)
Reconciliation of Adjusted Operating Income (Loss) to Operating Income (Loss) | |||||||||||||||||||||||||||||||||||
($ in millions) | Operating | Stock-based | Loss | Depreciation amortization | Amortization of | Acquisition | Adjusted | Foreign | Adjusted | ||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||
Concerts | $ | (281.6) | $ | 39.6 | $ | 0.2 | $ | 65.8 | $ | — | $ | 2.6 | $ | (173.4) | $ | 0.7 | $ | (172.7) | |||||||||||||||||
Ticketing | (197.4) | 5.4 | — | 42.6 | 9.2 | (1.7) | (141.9) | 0.9 | (141.0) | ||||||||||||||||||||||||||
Sponsorship & | 13.8 | 2.5 | — | 6.6 | — | — | 22.9 | (1.5) | 21.4 | ||||||||||||||||||||||||||
Other & | (4.8) | — | — | 2.2 | (2.5) | — | (5.1) | — | (5.1) | ||||||||||||||||||||||||||
Corporate | (34.4) | 9.2 | — | 2.7 | — | 0.8 | (21.7) | — | (21.7) | ||||||||||||||||||||||||||
Total Live | $ | (504.4) | $ | 56.7 | $ | 0.2 | $ | 119.9 | $ | 6.7 | $ | 1.7 | $ | (319.2) | $ | 0.1 | $ | (319.1) | |||||||||||||||||
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Concerts | $ | 111.4 | $ | 3.2 | $ | (0.3) | $ | 71.2 | $ | — | $ | 9.0 | $ | 194.5 | $ | — | $ | 194.5 | |||||||||||||||||
Ticketing | 64.2 | 1.6 | — | 39.6 | 21.8 | 0.1 | 127.3 | — | 127.3 | ||||||||||||||||||||||||||
Sponsorship & | 133.2 | 0.7 | — | 11.3 | — | 0.1 | 145.3 | — | 145.3 | ||||||||||||||||||||||||||
Other & | (0.1) | — | — | 0.1 | (1.9) | 0.1 | (1.8) | — | (1.8) | ||||||||||||||||||||||||||
Corporate | (48.7) | 6.5 | — | 4.0 | — | — | (38.2) | — | (38.2) | ||||||||||||||||||||||||||
Total Live | $ | 260.0 | $ | 12.0 | $ | (0.3) | $ | 126.2 | $ | 19.9 | $ | 9.3 | $ | 427.1 | $ | — | $ | 427.1 | |||||||||||||||||
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||
Concerts | $ | (722.6) | $ | 66.4 | $ | 0.9 | $ | 202.3 | $ | — | $ | (19.3) | $ | (472.3) | $ | (2.8) | $ | (475.1) | |||||||||||||||||
Ticketing | (480.5) | 11.2 | — | 125.1 | 44.1 | (0.7) | (300.8) | (1.2) | (302.0) | ||||||||||||||||||||||||||
Sponsorship | 40.8 | 5.2 | — | 21.8 | — | — | 67.7 | (0.3) | 67.4 | ||||||||||||||||||||||||||
Other & | (13.0) | — | — | 6.6 | (5.3) | — | (11.7) | — | (11.7) | ||||||||||||||||||||||||||
Corporate | (89.9) | 24.2 | — | 9.0 | — | 2.2 | (54.5) | — | (54.5) | ||||||||||||||||||||||||||
Total Live | $ | (1,265.2) | $ | 107.0 | $ | 0.9 | $ | 364.8 | $ | 38.8 | $ | (17.8) | $ | (771.6) | $ | (4.3) | $ | (775.9) | |||||||||||||||||
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Concerts | $ | 112.9 | $ | 9.8 | $ | (0.7) | $ | 176.9 | $ | — | $ | 33.8 | $ | 332.7 | $ | — | $ | 332.7 | |||||||||||||||||
Ticketing | 170.9 | 4.7 | 0.1 | 116.5 | 58.7 | 0.7 | 351.6 | — | 351.6 | ||||||||||||||||||||||||||
Sponsorship | 256.8 | 2.0 | — | 24.8 | — | — | 283.6 | — | 283.6 | ||||||||||||||||||||||||||
Other & | (0.4) | — | — | 0.4 | (4.6) | — | (4.6) | — | (4.6) | ||||||||||||||||||||||||||
Corporate | (132.5) | 20.4 | — | 10.6 | — | — | (101.5) | — | (101.5) | ||||||||||||||||||||||||||
Total Live | $ | 407.7 | $ | 36.9 | $ | (0.6) | $ | 329.2 | $ | 54.1 | $ | 34.5 | $ | 861.8 | $ | — | $ | 861.8 | |||||||||||||||||
LIVE NATION ENTERTAINMENT, INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited) | |||||||
September 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 2,625,082 | $ | 2,470,362 | |||
Accounts receivable, less allowance of | 564,873 | 994,606 | |||||
Prepaid expenses | 605,167 | 667,044 | |||||
Restricted cash | 8,409 | 3,880 | |||||
Other current assets | 56,326 | 57,007 | |||||
Total current assets | 3,859,857 | 4,192,899 | |||||
Property, plant and equipment, net | 1,106,688 | 1,117,932 | |||||
Operating lease assets | 1,461,442 | 1,402,019 | |||||
Intangible assets | |||||||
Definite-lived intangible assets, net | 895,086 | 870,141 | |||||
Indefinite-lived intangible assets | 368,884 | 368,954 | |||||
Goodwill | 2,051,903 | 1,998,498 | |||||
Long-term advances | 730,898 | 593,699 | |||||
Other long-term assets | 410,673 | 431,473 | |||||
Total assets | $ | 10,885,431 | $ | 10,975,615 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Accounts payable, client accounts | $ | 686,105 | $ | 1,005,888 | |||
Accounts payable | 88,869 | 100,237 | |||||
Accrued expenses | 960,011 | 1,391,486 | |||||
Deferred revenue | 1,631,715 | 1,391,032 | |||||
Current portion of long-term debt, net | 50,789 | 37,795 | |||||
Current portion of operating lease liabilities | 115,736 | 121,950 | |||||
Other current liabilities | 49,652 | 59,211 | |||||
Total current liabilities | 3,582,877 | 4,107,599 | |||||
Long-term debt, net | 4,849,274 | 3,271,262 | |||||
Long-term operating lease liabilities | 1,467,105 | 1,374,481 | |||||
Long-term deferred income taxes | 177,893 | 178,173 | |||||
Other long-term liabilities | 274,271 | 130,648 | |||||
Commitments and contingent liabilities | |||||||
Redeemable noncontrolling interests | 286,987 | 449,498 | |||||
Stockholders' equity | |||||||
Common stock | 2,138 | 2,113 | |||||
Additional paid-in capital | 2,361,015 | 2,245,619 | |||||
Accumulated deficit | (2,233,501) | (949,334) | |||||
Cost of shares held in treasury | (6,865) | (6,865) | |||||
Accumulated other comprehensive loss | (222,217) | (145,713) | |||||
Total Live Nation stockholders' equity | (99,430) | 1,145,820 | |||||
Noncontrolling interests | 346,454 | 318,134 | |||||
Total equity | 247,024 | 1,463,954 | |||||
Total liabilities and equity | $ | 10,885,431 | $ | 10,975,615 |
LIVE NATION ENTERTAINMENT, INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Revenue | $ | 184,018 | $ | 3,773,684 | $ | 1,623,795 | $ | 8,658,521 | |||||||
Operating expenses: | |||||||||||||||
Direct operating expenses | 130,749 | 2,800,429 | 1,199,126 | 6,279,447 | |||||||||||
Selling, general and administrative expenses | 405,934 | 542,547 | 1,243,307 | 1,520,910 | |||||||||||
Depreciation and amortization | 119,938 | 126,306 | 364,785 | 329,044 | |||||||||||
Loss (gain) on disposal of operating assets | 208 | (305) | 897 | (553) | |||||||||||
Corporate expenses | 31,630 | 44,666 | 80,858 | 121,909 | |||||||||||
Operating income (loss) | (504,441) | 260,041 | (1,265,178) | 407,764 | |||||||||||
Interest expense | 66,093 | 36,587 | 162,781 | 109,894 | |||||||||||
Interest income | (2,810) | (5,863) | (9,712) | (12,229) | |||||||||||
Equity in losses (earnings) of nonconsolidated affiliates | 2,615 | 2,681 | 6,656 | (6,291) | |||||||||||
Other expense (income), net | (10,977) | 5,384 | (11,522) | 1,551 | |||||||||||
Income (loss) before income taxes | (559,362) | 221,252 | (1,413,381) | 314,839 | |||||||||||
Income tax expense (benefit) | (16,904) | 27,280 | (49,417) | 59,988 | |||||||||||
Net income (loss) | (542,458) | 193,972 | (1,363,964) | 254,851 | |||||||||||
Net income (loss) attributable to noncontrolling interests | (13,556) | 15,047 | (82,761) | 25,015 | |||||||||||
Net income (loss) attributable to common stockholders of | $ | (528,902) | $ | 178,925 | $ | (1,281,203) | $ | 229,836 | |||||||
Basic net income (loss) per common share available to | $ | (2.45) | $ | 0.74 | $ | (6.08) | $ | 0.86 | |||||||
Diluted net income (loss) per common share available to | $ | (2.45) | $ | 0.71 | $ | (6.08) | $ | 0.83 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 212,593,719 | 210,621,971 | 211,781,620 | 209,849,058 | |||||||||||
Diluted | 212,593,719 | 218,957,376 | 211,781,620 | 218,485,494 | |||||||||||
Reconciliation to net income (loss) available to common stockholders of Live Nation: | |||||||||||||||
Net income (loss) attributable to common stockholders of | $ | (528,902) | $ | 178,925 | $ | (1,281,203) | $ | 229,836 | |||||||
Accretion of redeemable noncontrolling interests | 6,990 | (23,580) | (5,955) | (49,407) | |||||||||||
Net income (loss) available to common stockholders of | (521,912) | 155,345 | (1,287,158) | 180,429 | |||||||||||
Convertible debt interest, net of tax | — | — | — | 265 | |||||||||||
Net income (loss) available to common stockholders of | $ | (521,912) | $ | 155,345 | $ | (1,287,158) | $ | 180,694 | |||||||
LIVE NATION ENTERTAINMENT, INC. | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(unaudited) | |||||||
Nine Months Ended September 30, | |||||||
2020 | 2019 | ||||||
(in thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ | (1,363,964) | $ | 254,851 | |||
Reconciling items: | |||||||
Depreciation | 184,391 | 163,004 | |||||
Amortization | 180,394 | 166,040 | |||||
Amortization of non-recoupable ticketing contract advances | 38,833 | 54,120 | |||||
Deferred income tax benefit | (22,615) | (1,008) | |||||
Amortization of debt issuance costs and discounts | 24,201 | 16,300 | |||||
Non-cash compensation expense | 106,965 | 36,924 | |||||
Unrealized changes in fair value of contingent consideration | (25,745) | 7,372 | |||||
Equity in losses of nonconsolidated affiliates, net of distributions | 8,266 | 6,526 | |||||
Provision for uncollectible accounts receivable | 48,413 | 14,413 | |||||
Other, net | (15,160) | (9,177) | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | |||||||
Decrease (increase) in accounts receivable | 406,202 | (392,065) | |||||
Decrease (increase) in prepaid expenses and other assets | 1,793 | (257,268) | |||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | (1,213,409) | 135,672 | |||||
Increase (decrease) in deferred revenue | 684,532 | (162,782) | |||||
Net cash provided by (used in) operating activities | (956,903) | 32,922 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Advances of notes receivable | (12,232) | (24,110) | |||||
Collections of notes receivable | 13,838 | 10,142 | |||||
Investments made in nonconsolidated affiliates | (9,728) | (34,742) | |||||
Purchases of property, plant and equipment | (187,036) | (225,822) | |||||
Cash paid for acquisitions, net of cash acquired | (37,283) | (108,075) | |||||
Purchases of intangible assets | (3,903) | (22,953) | |||||
Other, net | 11,812 | 2,203 | |||||
Net cash used in investing activities | (224,532) | (403,357) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from long-term debt, net of debt issuance costs | 1,608,462 | 604 | |||||
Payments on long-term debt | (24,202) | (30,491) | |||||
Contributions from noncontrolling interests | 2,568 | 13,124 | |||||
Distributions to noncontrolling interests | (31,473) | (73,182) | |||||
Purchases and sales of noncontrolling interests, net | (106,971) | (29,005) | |||||
Proceeds from exercise of stock options | 18,092 | 13,240 | |||||
Taxes paid for net share settlement of equity awards | (42,818) | (10,578) | |||||
Payments for deferred and contingent consideration | (62,035) | (23,322) | |||||
Other, net | 13 | — | |||||
Net cash provided by (used in) financing activities | 1,361,636 | (139,610) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (20,952) | (59,364) | |||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 159,249 | (569,409) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 2,474,242 | 2,378,203 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 2,633,491 | $ | 1,808,794 |
THIRD QUARTER 2020
Supplemental Information
Free Cash & Cash Used in the Quarter
Changes to the company's free cash balance from the end of the second quarter of 2020 to the end of the third quarter were as follows:
(in millions) | |||
Free cash balance at 6/30/2020 | $ | 1,772 | |
Timing impacts to free cash from change in LT deferred revenue, LT prepaid expenses, and | (333) | ||
Ticketmaster impact for the company's portion of service fees refunded to fans during the | (48) | ||
Operational fixed costs | (387) | ||
Non-operational cash uses, including capital expenditures, acquisition activity, net advances | (176) | ||
Inflows from cash management programs | 123 | ||
Free cash balance at 9/30/2020 | $ | 951 |
As indicated in Q2, the timing benefits to free cash totaling approximately
Ticket Refunds
The global refund rate for the company's concerts that are rescheduled and are in or have gone through a refund window is
Across both concerts and festivals, since March the company has refunded
The company still has some shows in the process of rescheduling, or that are rescheduled but not yet offering refunds; if the same fan behavior and mix as noted above is applied on these events, the company currently forecasts approximately
Event-Related Deferred Revenue
The company's deferred revenue for events over the next 12 months was
(in millions) | |||
Current Deferred Revenue as of 6/30/2020 | $ | 941 | |
Shift from long-term deferred revenue to current deferred revenue | 383 | ||
Adjustment to estimated additional future refunds from Live Nation-held cash | (61) | ||
Ticket sales in the third quarter of 2020 | 97 | ||
Other / Net | 2 | ||
Current Deferred Revenue as of 9/30/2020 | $ | 1,362 |
In addition, the company had approximately
The company currently forecasts that event-related deferred revenue at the end of 2020, prior to additional ticket sales and based on the company's projected refund rates, will be approximately
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SOURCE Live Nation Entertainment
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