Live Nation Earnings Show Live Events Industry in Midst of Recovery Live Nation Earnings Show Live Events Industry in Midst of Recovery
Live Nation Entertainment’s second quarter 2021 earnings report came out this week, and it paints a picture of an industry in the midst of... Live Nation Earnings Show Live Events Industry in Midst of Recovery

Live Nation Entertainment’s second quarter 2021 earnings report came out this week, and it paints a picture of an industry in the midst of a strong recovery from the COVID pause, indicated by a 677% growth in revenue. Ticketmaster North America saw a headline-grabbing term, including pulling off its 4th best month ever in terms of transaction volume. The company, due largely to the slow pace of reopening in other markets, was still registering a loss, but analysts had predicted a deeper loss, helping the company stock (NYSE: LYV) make a five percent jump overnight after the earnings were reported.

“As communities reopen, we’re seeing the pent-up demand for live events play out as artists and fans are eager to reconnect in person,” Live Nation Entertainment CEO Michael Rapino said on the earnings call. “In the U.S. and U.K., we’re seeing strong ticket sales, and the restart of our concerts and festivals highlighted over the past weekends by Lollapalooza and Rolling Loud in the U.S. and Latitude in the U.K. hosting 750,000 fans combined. With vaccine rollouts increasing throughout Canada and Europe, we expect additional markets to open up broadly in the coming months.”

North America drove the positive momentum for the company, with President and CEO Joe Berchtold saying that the market accounted for 75 percent of transactions in the quarter, compared to 2/3 in the comparison period from 2019.

Berchtold also spoke to navigating the challenges of the constantly shifting COVID landscape, which is causing some concern for the reopening in the United States, and at minimum seems to be trending towards event operators requiring proof of vaccination for concert entry.

“I think what we’re seeing is a shift to increasing requirements for entry of either vaccinated or tested or fully vaccinated. We had that at Lollapalooza over the last weekend, very successfully done. Over 90% of the people were fully vaccinated, which I think was a great signal in terms of people’s commitment and support of being vaccinated in order to go to these shows. So my expectation is that we will see that continue, whether at the artist level, at the city level like New York just announced, or they’re large crowds. Frankly, Lollapalooza certainly went above and beyond what was happening at baseball games in Chicago. And similarly, I think in other markets, we’re going above what others are doing.”

“So we’ll continue to focus on that. I think the great news is that at this point, the discussion is around what are the requirements to hold the events, what do we need to see in terms of vaccinations and testing. Not hearing discussions certainly in the U.S. or the U.K. about impacting those shows to any scale.”

Live Nation’s full release of its earnings is included below:

Live Nation Second Quarter 2021 Results

Highlights

  • Operating Income Improved Over $450 Million, Adjusted Operating Income Returned to Profitability
  • Event-Related Deferred Revenue at $2.1 Billion, Up $650 Million
  • Concerts Pipeline for 2022 Up Double Digits from 2019, With Touring Plans Extending Into 2023 and 2024
  • Ticketmaster North America had 4th Best Month in History for Transacted Ticket Volume
  • Ticketmaster Added Over 11 Million Net New Fee-Bearing Tickets Year-To-Date
  • Sponsorship Commitments for 2022 Up Double Digits from 2019

LOS ANGELESAug. 3, 2021 /PRNewswire/ — Live Nation Entertainment, Inc. (NYSE: LYV) today released financial results for the quarter ended June 30, 2021.

 

Reopening Momentum Growing
As communities reopen, we’re seeing the pent-up demand for live events play out as artists and fans are eager to re-connect in person. In the U.S. and the U.K., we are seeing strong ticket sales and the restart of our concerts and festivals, highlighted over the past weekends by Lollapalooza and Rolling Loud in the U.S. and Latitude in the U.K. hosting a combined three quarters of a million fans. With vaccine rollouts increasing throughout Canada and Europe, we expect additional markets to open more broadly in the coming months.

The momentum for the return to live events has been building every month, with ticket sales and concert attendance pacing faster than expected, underscoring the strength and resiliency of the concert business and live events in general. This progress, combined with our cost discipline, has enabled us to deliver positive adjusted operating income for the second quarter, well ahead of where we thought we would for this quarter. We expect to see further ramp-up accelerate through the rest of the year, with improving operating income and all segments returning to adjusted operating income profitability for the second half of the year, setting us up for a full-scale 2022.

Early Indicators Demonstrate Strong Recovery
As we put more shows on-sale this year and next, ticket sales are the best early indicator for concerts and our overall business. To that end, June was Ticketmaster North America’s 4th best month in history for transacted ticket volume driven in part by our U.S. concerts division putting the highest number of shows on sale ever during a single month – 50% more than the next highest month back in March 2019.

In concerts, our recovery this summer continues to be led by outdoor events at our festivals and amphitheaters. We expect to have over 6 million fans attend our festivals during the second half of the year, with about two-thirds of our festivals increasing their attendance compared to 2019. Most of our festivals sold out in record time while average ticket prices have been 10% higher than 2019. While still early, we have delivered a strong double digit increase in average per fan revenue and in on-site spending versus 2019 at our amphitheater shows over the past few weeks.

Looking forward to 2022 and now also 2023, all our leading indicators continue to point to a roaring era for concerts and other live events. Starting with our concerts division, every major venue type – arenas, amphitheaters, and stadiums – have pipelines indicating double digit growth in show count and ticket sales relative to 2019 levels. In some cases our pipeline is so strong we are extending our planning into 2023 and even beginning to discuss tours that extend into 2024.

At the same time Ticketmaster’s leading edge technology continues to attract new clients, adding 11 million net new fee bearing tickets so far this year – already surpassing any previous full year growth.  As a result, Ticketmaster is set up to benefit in 2022 from both increased Live Nation concert ticket sales as well as additional sales from new clients. In our sponsorship business, our brand partners have maintained and grown their interest in live events, with contracted sponsorship up double digits for 2022 from where we were at this point in 2019 for 2020.

Building a Stronger Flywheel
As our revenue is rebounding, we continue to evolve our business to maximize opportunities from the global recovery and strengthen our flywheel. We have structurally reduced our cost basis by $200 million, making us more nimble and converting more of our revenue to operating income and adjusted operating income. We have integrated our Ticketmaster team globally, enabling us to work toward a global product roadmap that will both reduce our costs and increase our flexibility and speed to deploy new client tools and improve our marketplace experience. Lastly, we continue to build our direct-to-consumer businesses, with initiatives ranging from streaming concerts to NFTs to artist merchandise, bringing more value to artists and deepening fan relationships.

These enhancements, combined with the strongest supply and demand dynamics our industry has ever seen, are fueling our core flywheel strategy and setting us up for multiple years of growth in attendance, revenue, operating income and adjusted operating income.

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

Additional Information on Liquidity
At the end of the second quarter of 2021, the company had total cash and cash equivalents of $4.0 billion, which includes $1.1 billion of free cash. This free cash, along with $971 million of available debt capacity, gives the company $2.1 billion of available liquidity. The company believes this level of liquidity will provide it with the runway it needs as more shows return.

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 – SECOND QUARTER
(unaudited; $ in millions)

Q2 2021
Reported

Q2 2020
Reported

Growth

Q2 2021
Constant
Currency

Growth at
Constant
Currency

Revenue

Concerts

$

287.0

$

141.8

*

$

277.1

*

Ticketing

244.0

(87.0)

*

240.0

*

Sponsorship & Advertising

44.6

18.4

*

43.5

*

Other and Eliminations

0.3

0.9

*

0.3

*

$

575.9

$

74.1

*

$

560.9

*

Operating Income (Loss)

Concerts

$

(146.3)

$

(279.9)

48

%

$

(140.4)

50

%

Ticketing

43.8

(267.2)

*

46.8

*

Sponsorship & Advertising

5.3

(11.2)

*

4.9

*

Other and Eliminations

0.3

(6.8)

*

0.2

*

Corporate

(30.4)

(23.0)

(32)

%

(30.4)

(32)

%

$

(127.3)

$

(588.1)

78

%

$

(118.9)

80

%

Adjusted Operating Income (Loss)

Concerts

$

(84.0)

$

(210.7)

60

%

$

(81.5)

61

%

Ticketing

99.4

(203.9)

*

100.0

*

Sponsorship & Advertising

13.0

(1.8)

*

12.6

*

Other and Eliminations

(1.2)

(3.8)

*

(1.2)

*

Corporate

(17.5)

(11.7)

(50)

%

(17.5)

(50)

%

$

9.7

$

(431.9)

*

$

12.4

*

* percentages are not meaningful

FINANCIAL HIGHLIGHTS – SIX MONTHS
(unaudited; $ in millions)

6 Months
2021
Reported

6 Months
2020
Reported

Growth

6 Months
2021
Constant
Currency

Growth at
Constant
Currency

Revenue

Concerts

$

526.4

$

1,135.2

(54)

%

$

510.1

(55)

%

Ticketing

272.3

197.3

38

%

266.9

35

%

Sponsorship & Advertising

67.2

108.6

(38)

%

65.2

(40)

%

Other and Eliminations

0.7

(1.3)

*

0.7

*

$

866.6

$

1,439.8

(40)

%

$

842.9

(41)

%

Operating Income (Loss)

Concerts

$

(291.7)

$

(441.0)

34

%

$

(283.2)

36

%

Ticketing

(76.8)

(283.1)

73

%

(71.6)

75

%

Sponsorship & Advertising

(1.1)

27.0

*

(1.9)

*

Other and Eliminations

(0.2)

(8.2)

*

(0.2)

*

Corporate

(60.7)

(55.4)

(10)

%

(60.7)

(10)

%

$

(430.5)

$

(760.7)

43

%

$

(417.6)

45

%

Adjusted Operating Income (Loss)

Concerts

$

(158.6)

$

(298.9)

47

%

$

(154.9)

48

%

Ticketing

36.7

(158.9)

*

38.3

*

Sponsorship & Advertising

16.5

44.8

(63)

%

15.7

(65)

%

Other and Eliminations

(3.4)

(6.6)

*

(3.4)

*

Corporate

(33.3)

(32.8)

(2)

%

(33.3)

(2)

%

$

(142.1)

$

(452.4)

69

%

$

(137.6)

70

%

* percentages are not meaningful

  • As of June 30, 2021, total cash and cash equivalents were $4.0 billion, which includes $1.1 billion in ticketing client cash and $1.1 billion in free cash.
  • Event-related deferred revenue was $2.1 billion as of June 30, 2021, compared to $0.9 billion as of June 30, 2020. In addition, the company had long-term deferred revenue of $381 million for events that have been rescheduled more than one year out as of June 30, 2021.
  • For the six months ended June 30, 2021, net cash provided by operating activities was $1.2 billion and free cash flow — adjusted was $(307.4) million.
  • The company currently expects capital expenditures for the full year to be approximately $170 million in 2021, with over 60% of this spend going into revenue generating projects.

KEY OPERATING METRICS
(unaudited)

Q2 2021

Q2 2020

6 Months 2021

6 Months 2020

(in thousands except estimated events)

Concerts (1)

Estimated events:

North America

1,124

25

1,415

4,797

International

560

107

924

2,430

Total estimated events

1,684

132

2,339

7,227

Estimated fans:

North America

629

10

695

5,739

International

706

41

1,135

4,718

Total estimated fans

1,335

51

1,830

10,457

Ticketing (2)

Estimated number of fee-bearing tickets

26,345

(8,870)

32,926

27,335

Estimated number of non-fee-bearing tickets

22,216

6,385

38,376

61,639

Total estimated tickets sold

48,561

(2,485)

71,302

88,974

_________

(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 these consolidated financial statements, which may result in a negative number. Fee-bearing tickets sold above are net of refunds of 4.1 million and 10.7 million tickets for the three months ended June 30, 2021 and 2020, respectively, and 7.1 million and 18.0 million tickets for the six months ended June 30, 2021 and 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)

Q2 2021

Q2 2020

Net cash provided by (used in) operating activities

$

1,095.4

$

(1,022.1)

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

(1,159.6)

598.4

Free cash flow from earnings

$

(64.2)

$

(423.7)

Less: Maintenance capital expenditures

(8.6)

(15.3)

          Distributions to noncontrolling interests

(8.9)

(11.2)

Free cash flow — adjusted

$

(81.7)

$

(450.2)

Net cash used in investing activities

$

(60.4)

$

(68.2)

Net cash provided by (used in) financing activities

$

(15.5)

$

1,079.7

($ in millions)

6 Months 2021

6 Months 2020

Net cash provided by (used in) operating activities

$

1,170.0

$

(390.4)

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

(1,448.6)

(103.0)

Free cash flow from earnings

$

(278.6)

$

(493.4)

Less: Maintenance capital expenditures

(14.3)

(45.7)

          Distributions to noncontrolling interests

(14.5)

(26.3)

Free cash flow — adjusted

$

(307.4)

$

(565.4)

Net cash used in investing activities

$

(50.3)

$

(190.6)

Net cash provided by financing activities

$

401.5

$

1,462.1

Reconciliation of Free Cash to Cash and Cash Equivalents

($ in millions)

June 30,
2021

Cash and cash equivalents

$

4,042.6

Client cash

(1,127.5)

Deferred revenue — event-related

(2,125.3)

Accrued artist fees

(15.4)

Collections on behalf of others

(91.5)

Prepaid expenses — event-related

419.8

Free cash

$

1,102.7

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 current timing expectations for the broader opening of additional markets; the company’s anticipated ramp-up acceleration through the remainder of 2021; anticipated improving operating income and adjusted operating income segment profitability for the second half of 2021, and an anticipated full–scale 2022; expected festival attendance in the second half of 2021; the company’s pipeline indicating double digit growth in show count and ticket sales relatives to 2019; Ticketmaster’s positioning to benefit in 2022 from both increased Live Nation concert ticket sales and sales from new clients; Ticketmaster’s global product roadmap and the prospects that it will both reduce costs and increase flexibility and speed to deploy new clients tools and improve marketplace experience; the company’s prospects for multiple years of growth in attendance, revenue, operating income, and adjusted operating income; 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 June 30, 2021

Concerts

$

(146.3)

$

2.5

$

$

58.4

$

$

1.4

$

(84.0)

$

2.5

$

(81.5)

Ticketing

43.8

1.1

34.9

19.6

99.4

0.6

100.0

Sponsorship & Advertising

5.3

0.2

7.5

13.0

(0.4)

12.6

Other & Eliminations

0.3

(1.5)

(1.2)

(1.2)

Corporate

(30.4)

9.0

2.8

1.1

(17.5)

(17.5)

Total Live Nation

$

(127.3)

$

12.8

$

$

103.6

$

18.1

$

2.5

$

9.7

$

2.7

$

12.4

Three Months Ended June 30, 2020

Concerts

$

(279.9)

$

24.4

$

0.6

$

64.3

$

$

(20.1)

$

(210.7)

$

$

(210.7)

Ticketing

(267.2)

4.1

44.3

14.7

0.2

(203.9)

(203.9)

Sponsorship & Advertising

(11.2)

1.7

7.7

(1.8)

(1.8)

Other & Eliminations

(6.8)

4.4

(1.4)

(3.8)

(3.8)

Corporate

(23.0)

8.3

2.1

0.9

(11.7)

(11.7)

Total Live Nation

$

(588.1)

$

38.5

$

0.6

$

122.8

$

13.3

$

(19.0)

$

(431.9)

$

$

(431.9)

Six Months Ended June 30, 2021

Concerts

$

(291.7)

$

19.9

$

0.1

$

121.3

$

$

(8.2)

$

(158.6)

$

3.7

$

(154.9)

Ticketing

(76.8)

8.9

71.4

32.1

1.1

36.7

1.6

38.3

Sponsorship & Advertising

(1.1)

3.0

14.7

16.5

(0.8)

15.7

Other & Eliminations

(0.2)

(3.4)

0.2

(3.4)

(3.4)

Corporate

(60.7)

21.0

5.1

1.3

(33.3)

(33.3)

Total Live Nation

$

(430.5)

$

52.8

$

0.1

$

212.5

$

28.7

$

(5.6)

$

(142.1)

$

4.5

$

(137.6)

Six Months Ended June 30, 2020

Concerts

$

(441.0)

$

26.7

$

0.7

$

136.6

$

$

(21.9)

$

(298.9)

$

$

(298.9)

Ticketing

(283.1)

5.8

82.5

34.9

1.0

(158.9)

(158.9)

Sponsorship & Advertising

27.0

2.7

15.1

44.8

44.8

Other & Eliminations

(8.2)

4.4

(2.8)

(6.6)

(6.6)

Corporate

(55.4)

15.1

6.2

1.3

(32.8)

(32.8)

Total Live Nation

$

(760.7)

$

50.3

$

0.7

$

244.8

$

32.1

$

(19.6)

$

(452.4)

$

$

(452.4)

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

June 30,
2021

December 31,
2020

(in thousands)

ASSETS

Current assets

    Cash and cash equivalents

$

4,042,619

$

2,537,787

    Accounts receivable, less allowance of $52,767 and $72,904, respectively

646,705

486,734

    Prepaid expenses

678,375

577,130

    Restricted cash

5,018

8,652

    Other current assets

50,534

39,465

Total current assets

5,423,251

3,649,768

Property, plant and equipment, net

1,046,478

1,101,414

Operating lease assets

1,385,184

1,424,223

Intangible assets

    Definite-lived intangible assets, net

777,502

855,600

    Indefinite-lived intangible assets

369,100

369,058

Goodwill

2,122,704

2,129,203

Long-term advances

657,907

668,756

Other long-term assets

463,530

391,281

Total assets

$

12,245,656

$

10,589,303

LIABILITIES AND EQUITY

Current liabilities

    Accounts payable, client accounts

$

1,304,805

$

744,096

    Accounts payable

90,360

86,356

    Accrued expenses

916,161

894,149

    Deferred revenue

2,648,540

1,839,323

    Current portion of long-term debt, net

46,481

53,415

    Current portion of operating lease liabilities

113,576

107,147

    Other current liabilities

45,377

72,083

Total current liabilities

5,165,300

3,796,569

Long-term debt, net

5,295,207

4,855,096

Long-term operating lease liabilities

1,429,303

1,445,674

Long-term deferred income taxes

173,971

170,759

Other long-term liabilities

510,711

182,508

Commitments and contingent liabilities

Redeemable noncontrolling interests

250,767

272,449

Stockholders’ equity

    Common stock

2,164

2,145

    Additional paid-in capital

2,433,462

2,386,790

    Accumulated deficit

(3,179,691)

(2,676,833)

    Cost of shares held in treasury

(6,865)

(6,865)

    Accumulated other comprehensive loss

(161,832)

(177,009)

Total Live Nation stockholders’ equity

(912,762)

(471,772)

Noncontrolling interests

333,159

338,020

Total equity

(579,603)

(133,752)

Total liabilities and equity

$

12,245,656

$

10,589,303

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(in thousands, except share and per share data)

Revenue

$

575,946

$

74,084

$

866,555

$

1,439,777

Operating expenses:

Direct operating expenses

243,120

194,557

377,086

1,068,377

Selling, general and administrative expenses

328,894

323,352

651,747

837,373

Depreciation and amortization

103,647

122,767

212,523

244,847

Loss (gain) on disposal of operating assets

(28)

559

110

689

Corporate expenses

27,598

20,916

55,546

49,228

Operating loss

(127,285)

(588,067)

(430,457)

(760,737)

Interest expense

68,909

52,689

139,739

96,688

Interest income

(1,471)

(2,429)

(2,620)

(6,902)

Equity in losses of nonconsolidated affiliates

2,998

6,613

2,417

4,041

Loss (gain) from sale of investments in nonconsolidated
affiliates

993

35

(52,947)

35

Other expense (income), net

9,461

(5,208)

7,462

(580)

Loss before income taxes

(208,175)

(639,767)

(524,508)

(854,019)

Income tax expense (benefit)

2,285

(29,183)

8,674

(32,513)

Net loss

(210,460)

(610,584)

(533,182)

(821,506)

Net loss attributable to noncontrolling interests

(14,795)

(43,067)

(30,324)

(69,205)

Net loss attributable to common stockholders of Live Nation

$

(195,665)

$

(567,517)

$

(502,858)

$

(752,301)

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

$

(0.90)

$

(2.67)

$

(2.34)

$

(3.62)

Weighted average common shares outstanding:

Basic and diluted

215,702,508

211,693,923

215,120,467

211,371,109

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

Net loss attributable to common stockholders of Live Nation

$

(195,665)

$

(567,517)

$

(502,858)

$

(752,301)

Accretion of redeemable noncontrolling interests

951

1,595

35

(12,945)

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

$

(194,714)

$

(565,922)

$

(502,823)

$

(765,246)

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six Months Ended June 30,

2021

2020

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(533,182)

$

(821,506)

Reconciling items:

Depreciation

111,864

122,825

Amortization

100,457

122,022

Amortization of non-recoupable ticketing contract advances

28,728

32,126

Deferred income tax expense (benefit)

6,149

(12,316)

Amortization of debt issuance costs and discounts

18,373

14,856

Non-cash compensation expense

52,847

50,270

Unrealized changes in fair value of contingent consideration

(8,040)

(24,789)

Provision for uncollectible accounts receivable

(16,563)

25,764

Loss (gain) on sale of investments in nonconsolidated affiliates

(52,947)

35

Other, net

13,700

(2,644)

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

Decrease (increase) in accounts receivable

(143,343)

363,079

Increase in prepaid expenses and other assets

(102,554)

(50,493)

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

518,810

(807,552)

Increase in deferred revenue

1,175,690

597,963

Net cash provided by (used in) operating activities

1,169,989

(390,360)

CASH FLOWS FROM INVESTING ACTIVITIES

Advances of notes receivable

(12,830)

(11,457)

Collections of notes receivable

10,618

12,782

Investments made in nonconsolidated affiliates

(33,729)

(8,150)

Purchases of property, plant and equipment

(58,066)

(142,509)

Cash paid for acquisitions, net of cash acquired

(7,627)

(37,471)

Purchases of intangible assets

(11,191)

(5,594)

Proceeds from sale of investments in nonconsolidated affiliates

61,618

105

Other, net

912

1,653

Net cash used in investing activities

(50,295)

(190,641)

CASH FLOWS FROM FINANCING ACTIVITIES

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

511,068

1,602,097

Payments on long-term debt

(85,125)

(11,087)

Contributions from noncontrolling interests

15,288

1,467

Distributions to noncontrolling interests

(14,542)

(26,315)

Purchases and sales of noncontrolling interests, net

(3,273)

(88,191)

Proceeds from exercise of stock options

28,083

11,406

Taxes paid for net share settlement of equity awards

(38,209)

(17,339)

Payments for deferred and contingent consideration

(11,926)

(9,940)

Other, net

105

Net cash provided by financing activities

401,469

1,462,098

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

(19,965)

(54,974)

Net increase in cash, cash equivalents, and restricted cash

1,501,198

826,123

Cash, cash equivalents and restricted cash at beginning of period

2,546,439

2,474,242

Cash, cash equivalents and restricted cash at end of period

$

4,047,637

$

3,300,365

SECOND QUARTER 2021
Supplemental Earnings Tables
(unaudited)

Free Cash & Cash Used in the Quarter
Changes to the company’s free cash balance from the end of first quarter of 2021 to the end of the second quarter of 2021 were as follows:

(in millions)

Free cash balance at 3/31/2021

$

1,105

Operational burn *

(347)

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

(174)

Operational contribution margin **

358

Inflows / (outflows) from timing classification changes between short-term and long-term

161

Free cash balance at 6/30/2021

$

1,103

* Operational burn is our SG&A and Corporate costs less bonus, severance and bad debt.

** Operational contribution margin is our contribution margin less one-time items (Ticketing refunds, insurance recoveries, and artist advance reserves).

Ticket Refunds – Q2 2021
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, the company has recorded $40 million in estimated additional fan refunds from Live Nation-held funds as of June 30, 2021. As a result, the company has reclassified these funds from deferred revenue to accrued ticket refunds as of the second quarter of 2021.

Event-Related Deferred Revenue
The company’s deferred revenue for events over the next 12 months was $2,125 million as of June 30, 2021, compared to $1,456 million as of March 31, 2021. The $877 million increase due to ticket sales for future events was partially offset by sales of events that have shifted into the second half of 2022 and refunds paid out of Live Nation funds for Q2.

(in millions)

Current Deferred Revenue as of 3/31/2021

$

1,456

Shift from current deferred revenue to long-term deferred revenue

(151)

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

49

Currency impacts

10

Ticket sales in the second quarter of 2021

877

Cash from shows that played off

(14)

Estimated refunds from Live Nation cash

(103)

Other / Net

1

Current Deferred Revenue as of 6/30/2021

$

2,125

In addition, the company had approximately $381 million of long-term event-related deferred revenue at the end of the second quarter of 2021.