Live Nation Entertainment Reports Fourth Quarter & Full Year 2020 Results

Highlights

  • 83% of Fans Continuing To Hold Onto Their Tickets
  • $950 Million Cost Reduction Achieved in 2020
  • $1.65 Billion Cash Savings Achieved in 2020

LOS ANGELES, Feb. 25, 2021 /PRNewswire/ — Live Nation Entertainment, Inc. (NYSE: LYV) today released financial results for the quarter ended December 31, 2020.

As we look back on 2020, it is clearly not the year anyone predicted, but I am very proud of how Live Nation has dug in and focused on turning this challenge into an opportunity to improve our business. I want to take a moment to thank our employees for their resilience and creativity, and acknowledge all of those affected by Covid and the shutdown of live events.

We Believe We Will Return to Live Even Stronger
Over the last year, leaders across all our business lines of Concerts, Ticketing and Sponsorship have been analyzing ways to improve their businesses. Some of our key initiatives include: Re-organizing to become more nimble while also reducing our cost structure by $200 million; Building concert streaming and direct to consumer businesses to expand our revenue streams; Advancing our technology initiatives globally while accelerating the shift to digital tickets to meet changing needs of fans, venues and artists; and reinforcing our balance sheet to endure this period, while maintaining a strong position to build our business for the future and act on opportunities as we identify them, such as our recent acquisition of the streaming platform Veeps and a continued pipeline of bolt-on acquisitions throughout the globe.

So while this past year has been challenging for the company, our employees, fans, artists and so many others globally impacted by Covid, I have never been more excited about the opportunities in front of us.

Supply and Demand Pipeline is Very Strong
We continue to have a substantial tailwind in the live event industry, as consumers more than ever are looking to spend on experiences. The supply-demand fundamentals of the concerts business remain strong, with artists ready to get back on the road and fans eager to reconnect at events. All our data continues to show that there is substantial pent-up demand for concerts on the consumer demand side. The $2.4 trillion projected surplus in savings in the U.S. alone by June is a key indicator of consumer spending potential. At the same time, surveys demonstrate the high demand for concerts globally, with 95% of fans likely to attend a show when restrictions are lifted. This is proving out in fan behavior as well, with 83% of fans continuing to hold onto their tickets for rescheduled shows.

On the artist side there is a broad desire to get back on stage – to connect with their fans and to provide economic support to their bands, crew, and the hundreds of others employed each night putting on the show. Given the limited touring activity in 2020 and 2021, the pipeline for 2022 is much stronger than usual, with almost twice as many major touring artists on cycle in 2022 than a typical year – about 45 artists versus the usual 25. And there remains plenty of scheduling availability at arenas, amphitheaters and stadiums to accommodate these additional tours, with over two-thirds of these venues’ nights unused by sporting events or major concerts in a typical year.

Vaccine Rollout Encouraging
It appears that the timing to release the pent-up supply and demand is now approaching. Vaccine distribution is accelerating and declines in Covid cases throughout most of the world gives us even more confidence that a safe and meaningful return to shows will soon be possible. For both the U.S. and U.K., projections indicate that everyone who wants to get vaccinated will be able to do so by May or June, with Europe and most other markets following a few months later. Given the massive social and economic toll that the lockdown has had on the public, we believe there will be strong momentum to reopen society swiftly as soon as vaccines are readily available. And we believe outdoor activities will be the first to happen.

So while the timing of our return to live will continue to vary across global markets, every sign points to it beginning safely in many countries sometime this summer and scaling further from there.

Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.

Additional Information on Liquidity
At the end of the fourth quarter of 2020, the company had total cash and cash equivalents of $2.5 billion, which includes $643 million of free cash. This free cash, along with $962 million of available debt capacity and taking into account the additional $417 million of net cash added to the balance sheet with the debt raise in early January, gives the company $2.0 billion of available liquidity. The company believes this level of liquidity provides it with the ability to fund operations until the expected return of concerts in the summer of 2021, preceded by ticket sales earlier in the year.

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 Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on Monday, March 1, 2021 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 – 4th QUARTER

(unaudited; $ in millions)

Q4 2020
Reported

Q4 2019
Reported

Growth

Q4 2020
Constant
Currency

Growth at
Constant
Currency

Revenue

Concerts

$

178.4

$

2,296.6

(92)

%

$

176.8

(92)

%

Ticketing

10.9

448.3

(98)

%

10.4

(98)

%

Sponsorship & Advertising

47.1

148.4

(68)

%

46.0

(69)

%

Other and Eliminations

0.9

(3.9)

*

0.9

*

$

237.3

$

2,889.4

(92)

%

$

234.1

(92)

%

Operating Income (Loss)

Concerts

$

(236.4)

$

(166.4)

(42)

%

$

(233.6)

(40)

%

Ticketing

(131.5)

61.0

*

(130.4)

*

Sponsorship & Advertising

4.1

73.5

(94)

%

3.3

(95)

%

Other and Eliminations

(0.4)

(0.7)

43

%

(0.4)

43

%

Corporate

(23.8)

(50.3)

53

%

(23.8)

53

%

$

(388.0)

$

(82.9)

*

$

(384.9)

*

Adjusted Operating Income (Loss)

Concerts

$

(166.7)

$

(90.4)

(84)

%

$

(165.1)

(83)

%

Ticketing

(73.7)

130.8

*

(73.2)

*

Sponsorship & Advertising

14.2

82.5

(83)

%

13.4

(84)

%

Other and Eliminations

(1.8)

(1.6)

(13)

%

(1.8)

(13)

%

Corporate

(16.3)

(40.5)

60

%

(16.3)

60

%

$

(244.3)

$

80.8

*

$

(243.0)

*

* percentages are not meaningful

FINANCIAL HIGHLIGHTS – 12 MONTHS

(unaudited; $ in millions)

12 Months
2020
Reported

12 Months
2019
Reported

Growth

12 Months
2020
Constant
Currency

Growth at
Constant
Currency

Revenue

Concerts

$

1,468.4

$

9,428.1

(84)

%

$

1,481.7

(84)

%

Ticketing

188.4

1,545.2

(88)

%

188.4

(88)

%

Sponsorship & Advertising

203.7

590.3

(65)

%

202.6

(66)

%

Other and Eliminations

0.7

(15.6)

*

0.7

*

$

1,861.2

$

11,548.0

(84)

%

$

1,873.4

(84)

%

Operating Income (Loss)

Concerts

$

(959.0)

$

(53.5)

*

$

(960.0)

*

Ticketing

(612.0)

232.0

*

(612.4)

*

Sponsorship & Advertising

44.9

330.3

(86)

%

43.8

(87)

%

Other and Eliminations

(13.5)

(1.2)

*

(13.5)

*

Corporate

(113.6)

(182.8)

38

%

(113.6)

38

%

$

(1,653.2)

$

324.8

*

$

(1,655.7)

*

Adjusted Operating Income (Loss)

Concerts

$

(638.8)

$

242.3

*

$

(639.7)

*

Ticketing

(374.6)

482.4

*

(375.3)

*

Sponsorship & Advertising

81.9

366.1

(78)

%

80.8

(78)

%

Other and Eliminations

(13.5)

(6.3)

*

(13.5)

*

Corporate

(70.9)

(142.0)

50

%

(70.9)

50

%

$

(1,015.9)

$

942.5

*

$

(1,018.6)

*

* percentages are not meaningful

  • As of December 31, 2020, total cash and cash equivalents were $2.5 billion, which includes $674 million in ticketing client cash and $643 million in free cash.
  • Event-related deferred revenue was $1.5 billion as of December 31, 2020, compared to $1.2 billion as of December 31, 2019. In addition, we had long-term deferred revenue of $35 million for events that have been rescheduled more than one year out as of December 31, 2020.
  • For the twelve months ended December 31, 2020, net cash used in operating activities was $(1.1) billion and free cash flow — adjusted was $(1.3) billion.
  • We currently expect capital expenditures for the full year to be approximately $150 million in 2021.

KEY OPERATING METRICS

(unaudited)

2020

2019

2018

(in thousands except estimated events)

Concerts (1)

Estimated events:

North America

5,270

28,407

24,186

International

2,847

11,830

10,810

Total estimated events

8,117

40,237

34,996

Estimated fans:

North America

6,075

62,687

61,159

International

5,067

34,967

31,607

Total estimated fans

11,142

97,654

92,766

Ticketing (2)

Estimated number of fee-bearing tickets

31,101

219,838

217,442

Estimated number of non-fee-bearing tickets

88,823

266,750

265,033

Total estimated tickets sold

119,924

486,588

482,475

(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 sold above are net of refunds of 27.4 million tickets for the year ended December 31, 2020.

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)

Q4 2020

Q4 2019

Net cash provided by (used in) operating activities

$

(125.7)

$

436.9

Less: Changes in operating assets and liabilities (working capital)

(200.4)

(388.5)

Free cash flow from earnings

$

(326.1)

$

48.4

Less: Maintenance capital expenditures

(9.1)

(45.5)

          Distributions to noncontrolling interests

(10.1)

(34.3)

Free cash flow — adjusted

$

(345.3)

$

(31.4)

Net cash provided by (used in) investing activities

$

0.4

$

(287.6)

Net cash provided by (used in) financing activities

$

(12.3)

$

468.5

($ in millions)

12 Months 2020

12 Months 2019

Net cash provided by (used in) operating activities

$

(1,082.6)

$

469.8

Less: Changes in operating assets and liabilities (working capital)

(79.5)

287.9

Free cash flow from earnings

$

(1,162.1)

$

757.7

Less: Maintenance capital expenditures

(65.1)

(150.9)

          Distributions to noncontrolling interests

(41.6)

(107.5)

Free cash flow — adjusted

$

(1,268.8)

$

499.3

Net cash used in investing activities

$

(224.1)

$

(691.0)

Net cash provided by financing activities

$

1,349.3

$

328.9

Reconciliation of Free Cash to Cash and Cash Equivalents

($ in millions)

December 31,
2020

Cash and cash equivalents

$

2,537.8

Client cash

(673.5)

Deferred revenue — event-related

(1,532.5)

Accrued artist fees

(13.1)

Collections on behalf of others

(51.1)

Prepaid expenses — event-related

375.5

Free cash

$

643.1

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 consumer demand and the concerts pipeline for 2022; the timing for reopening society, vaccinations, holding outdoor activities and returning to live events; and the company’s current expectations for capital expenditures in 2021. Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company’s plans, the risk that the company’s markets do not evolve as anticipated, the potential impact of any economic slowdown and operational challenges associated with selling tickets and staging events.

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
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

Adjusted
operating
income
(loss)
reported

Foreign
exchange
impact

Adjusted
operating
income
(loss)
constant
currency

Three Months Ended December 31, 2020

Concerts

$

(236.4)

$

2.4

$

(0.4)

$

63.9

$

$

3.8

$

(166.7)

$

1.6

$

(165.1)

Ticketing

(131.5)

2.2

44.9

10.5

0.2

(73.7)

0.5

(73.2)

Sponsorship & Advertising

4.1

1.2

8.9

14.2

(0.8)

13.4

Other & Eliminations

(0.4)

(1.4)

(1.8)

(1.8)

Corporate

(23.8)

4.1

2.6

0.8

(16.3)

(16.3)

Total Live Nation

$

(388.0)

$

9.9

$

(0.4)

$

120.3

$

9.1

$

4.8

$

(244.3)

$

1.3

$

(243.0)

Three Months Ended December 31, 2019

Concerts

$

(166.4)

$

3.1

$

(1.8)

$

62.9

$

$

11.8

$

(90.4)

$

$

(90.4)

Ticketing

61.0

1.7

40.4

27.2

0.5

130.8

130.8

Sponsorship & Advertising

73.5

0.7

8.2

0.1

82.5

82.5

Other & Eliminations

(0.7)

(1.0)

0.1

(1.6)

(1.6)

Corporate

(50.3)

6.4

3.4

(40.5)

(40.5)

Total Live Nation

$

(82.9)

$

11.9

$

(1.8)

$

114.9

$

26.2

$

12.5

$

80.8

$

$

80.8

Twelve Months Ended December 31, 2020

Concerts

$

(959.0)

$

68.8

$

0.5

$

266.3

$

$

(15.4)

$

(638.8)

$

(0.9)

$

(639.7)

Ticketing

(612.0)

13.4

169.9

54.7

(0.6)

(374.6)

(0.7)

(375.3)

Sponsorship & Advertising

44.9

6.4

30.6

81.9

(1.1)

80.8

Other & Eliminations

(13.5)

6.7

(6.7)

(13.5)

(13.5)

Corporate

(113.6)

28.3

11.5

2.9

(70.9)

(70.9)

Total Live Nation

$

(1,653.2)

$

116.9

$

0.5

$

485.0

$

48.0

$

(13.1)

$

(1,015.9)

$

(2.7)

$

(1,018.6)

Twelve Months Ended December 31, 2019

Concerts

$

(53.5)

$

12.9

$

(2.5)

$

239.7

$

$

45.7

$

242.3

$

$

242.3

Ticketing

232.0

6.3

0.1

156.9

85.8

1.3

482.4

482.4

Sponsorship & Advertising

330.3

2.7

33.1

366.1

366.1

Other & Eliminations

(1.2)

0.1

0.3

(5.5)

(6.3)

(6.3)

Corporate

(182.8)

26.8

14.0

(142.0)

(142.0)

Total Live Nation

$

324.8

$

48.8

$

(2.4)

$

444.0

$

80.3

$

47.0

$

942.5

$

$

942.5

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

December 31,
2020

December 31,
2019

(in thousands, except share data)

ASSETS

Current assets

    Cash and cash equivalents

$

2,537,787

$

2,470,362

    Accounts receivable, less allowance of $72,904 and $50,516, respectively

486,734

994,606

    Prepaid expenses

577,130

667,044

    Restricted cash

8,652

3,880

    Other current assets

39,465

57,007

Total current assets

3,649,768

4,192,899

Property, plant and equipment, net

1,101,414

1,117,932

Operating lease assets

1,424,223

1,402,019

Intangible assets

    Definite-lived intangible assets, net

855,600

870,141

    Indefinite-lived intangible assets

369,058

368,954

Goodwill

2,129,203

1,998,498

Long-term advances

668,756

593,699

Other long-term assets

391,281

431,473

Total assets

$

10,589,303

$

10,975,615

LIABILITIES AND EQUITY

Current liabilities

    Accounts payable, client accounts

$

744,096

$

1,005,888

    Accounts payable

86,356

100,237

    Accrued expenses

894,149

1,391,486

    Deferred revenue

1,839,323

1,391,032

    Current portion of long-term debt, net

53,415

37,795

    Current portion of operating lease liabilities

107,147

121,950

    Other current liabilities

72,083

59,211

Total current liabilities

3,796,569

4,107,599

Long-term debt, net

4,855,096

3,271,262

Long-term operating lease liabilities

1,445,674

1,374,481

Long-term deferred income taxes

170,759

178,173

Other long-term liabilities

182,508

130,648

Commitments and contingent liabilities

Redeemable noncontrolling interests

272,449

449,498

Stockholders’ equity

Preferred stock—Series A Junior Participating, $0.01 par value; 20,000,000 shares authorized; no shares issued and outstanding                             

Preferred stock, $0.01 par value; 30,000,000 shares authorized; no shares issued and outstanding                              

Common stock, $0.01 par value; 450,000,000 shares authorized; 218,423,061 and 214,117,644 shares issued and 218,015,037 and 213,709,620 shares outstanding in 2020 and 2019, respectively

2,145

2,113

    Additional paid-in capital

2,386,790

2,245,619

    Accumulated deficit

(2,676,833)

(949,334)

Cost of shares held in treasury (408,024 shares)

(6,865)

(6,865)

    Accumulated other comprehensive loss

(177,009)

(145,713)

Total Live Nation stockholders’ equity

(471,772)

1,145,820

Noncontrolling interests

338,020

318,134

Total equity

(133,752)

1,463,954

Total liabilities and equity

$

10,589,303

$

10,975,615

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Year Ended December 31,

2020

2019

2018

(in thousands, except share and per share data)

Revenue

$

1,861,178

$

11,547,969

$

10,787,800

Operating expenses:

Direct operating expenses

1,402,400

8,467,182

7,967,932

Selling, general and administrative expenses

1,524,342

2,145,486

1,997,028

Depreciation and amortization

485,025

443,991

386,529

Loss (gain) on disposal of operating assets

503

(2,373)

10,369

Corporate expenses

102,100

168,839

153,406

Operating income (loss)

(1,653,192)

324,844

272,536

Interest expense

226,832

157,521

140,976

Interest income

(11,737)

(14,406)

(8,961)

Equity in losses (earnings) of nonconsolidated affiliates

5,458

(5,457)

(2,747)

Other expense (income), net

(17,080)

2,082

12,163

Income (loss) before income taxes

(1,856,665)

185,104

131,105

Income tax expense (benefit)

(28,875)

66,892

40,765

Net income (loss)

(1,827,790)

118,212

90,340

Net income (loss) attributable to noncontrolling interests

(103,255)

48,323

30,091

Net income (loss) attributable to common stockholders of Live Nation

$

(1,724,535)

$

69,889

$

60,249

Basic and diluted net loss per common share available to common stockholders of Live Nation

$

(8.12)

$

(0.02)

$

(0.09)

Weighted average common shares outstanding:

Basic and diluted

212,270,944

210,082,696

207,441,468

Reconciliation to net loss available to common stockholders of Live Nation:

Net income (loss) attributable to common stockholders of Live Nation

$

(1,724,535)

$

69,889

$

60,249

Accretion of redeemable noncontrolling interests

1,180

(74,771)

(77,900)

Basic and diluted net loss available to common stockholders of Live Nation

$

(1,723,355)

$

(4,882)

$

(17,651)

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Year Ended December 31,

2020

2019

2018

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

(1,827,790)

$

118,212

$

90,340

Reconciling items:

Depreciation

245,713

220,459

185,376

Amortization

239,312

223,532

201,153

Amortization of non-recoupable ticketing contract advances

47,971

80,302

80,087

Deferred income tax benefit

(37,877)

(465)

(6,247)

Amortization of debt issuance costs and discounts

32,774

24,116

20,219

Provision for uncollectible accounts receivable

43,076

27,926

26,321

Non-cash compensation expense

116,889

48,785

45,582

Unrealized changes in fair value of contingent consideration

(24,448)

6,698

14,125

Equity in losses (earnings) of nonconsolidated affiliates, net of distributions

18,280

14,152

11,693

Other, net

(15,995)

(6,027)

6,609

Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in accounts receivable

490,588

(159,792)

(135,429)

Decrease (increase) in prepaid expenses and other assets

141,631

(170,486)

(266,241)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

(1,379,461)

(45,920)

323,459

Increase in deferred revenue

826,699

88,291

344,539

Net cash provided by (used in) operating activities

(1,082,638)

469,783

941,586

CASH FLOWS FROM INVESTING ACTIVITIES

Advances of notes receivable

(56,957)

(50,035)

(90,705)

Collections of notes receivable

80,963

13,216

33,914

Investments made in nonconsolidated affiliates

(11,242)

(57,280)

(46,497)

Purchases of property, plant and equipment

(213,746)

(323,566)

(239,833)

Cash paid for acquisitions, net of cash acquired

(41,083)

(235,071)

(120,228)

Purchases of intangible assets

(8,863)

(42,261)

(35,630)

Proceeds from sale of investments in nonconsolidated affiliates

19,003

1,455

Other, net

7,863

2,542

2,070

Net cash used in investing activities

(224,062)

(691,000)

(496,909)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net of debt issuance costs

1,607,365

937,400

858,667

Payments on long-term debt including extinguishment costs

(30,987)

(437,267)

(400,396)

Contributions from noncontrolling interests

4,668

14,285

4,900

Distributions to noncontrolling interests

(41,625)

(107,476)

(59,187)

Purchases and sales of noncontrolling interests, net

(106,242)

(50,267)

(159,634)

Proceeds from exercise of stock options

30,647

14,104

22,568

Taxes paid for net share settlement of equity awards

(47,539)

(15,353)

(55,005)

Payments for deferred and contingent consideration

(66,992)

(26,537)

(18,784)

Other, net

37

(4,345)

Net cash provided by financing activities

1,349,332

328,889

188,784

Effect of exchange rate changes on cash, cash equivalents and restricted cash

29,565

(11,633)

(84,080)

Net increase in cash, cash equivalents, and restricted cash

72,197

96,039

549,381

Cash, cash equivalents and restricted cash at beginning of period

2,474,242

2,378,203

1,828,822

Cash, cash equivalents and restricted cash at end of period

$

2,546,439

$

2,474,242

$

2,378,203

SUPPLEMENTAL DISCLOSURE

Cash paid during the year for:

      Interest, net of interest income

$

166,405

$

103,915

$

100,278

      Income taxes, net of refunds

$

26,151

$

66,937

$

60,016

FOURTH QUARTER 2020
Supplemental Information
(unaudited)

Free Cash & Cash Used in the Quarter
Changes to the company’s free cash balance from the end of the third quarter of 2020 to the end of the fourth quarter were as follows:

(in millions)

Free cash balance at 9/30/2020

$

951

Operational fixed costs

(290)

Non-operational cash uses, including capital expenditures, acquisition activity, net advances and interest payments

(132)

Operational contribution margin*

116

Inflows / (outflows) from cash management programs

(2)

Free cash balance at 12/31/2020

$

643

*Operational Contribution Margin is our contribution margin less one-time items (Ticketing refunds, insurance recoveries, and artist advance reserves) and excluding the call center costs we have included in operational fixed costs above.

Ticket Refunds – Q4 2020
The global refund rate for the company’s concerts that are rescheduled and are in or have gone through a refund window is 17% through the end of the fourth quarter of 2020. Festivals have generally canceled this year’s event, but for festivals where fans can retain their tickets for next year’s show, approximately 63% of fans are keeping their tickets.

Across both concerts and festivals, since March the company has refunded $282 million for rescheduled Live Nation shows and $842 million for canceled Live Nation shows. Of this $1.1 billion total, $460 million was from funds held by third-party venues and $663 million was from Live Nation-held funds.

The company still has some shows in the process of rescheduling, or that are rescheduled but not yet offering refunds. In addition, refunds may occur in the future for additional cancellations or rescheduled events resulting from the global shutdown of our live events.  Based on current and estimated future impacted events and fan behavior, we have recorded $102 million in additional fan refunds from Live Nation-held funds. As a result, the company has reclassified these funds from deferred revenue to accrued ticket refunds as of the fourth quarter of 2020.

Event-Related Deferred Revenue
The company’s deferred revenue for events over the next 12 months was $1.5 billion as of December 31, 2020 as compared to $1.4 billion as of September 30, 2020. This increase was due to ticket sales for future events, sales for events scheduled for Q4 2021 shifting from long-term to current deferred revenue as well as currency impacts on our international deferred revenue balances.

(in millions)

Current Deferred Revenue as of 9/30/2020

$

1,362

Shift from long-term deferred revenue to current deferred revenue

67

Adjustment to estimated additional future refunds from Live Nation-held cash

(30)

Currency impacts

44

Ticket sales in the fourth quarter of 2020

98

Other / Net

(9)

Current Deferred Revenue as of 12/31/2020

$

1,532

In addition, the company had approximately $35 million of long-term event-related deferred revenue at the end of the fourth quarter of 2020.

Contacts

Investors, Amy Yong, IR@livenation.com, (310) 867-7143; Media, Kaitlyn Henrich, Media@livenation.com