01—Abstract
Summary
Summary of the 10-K filed March 1, 2021. Cited figures are marked; the original filing is the authoritative source.
Live Nation Entertainment, Inc. (LYV) reports that the global COVID-19 pandemic had a severe impact on its 2020 results.
Revenue decreased 84% to $1.9 billiona (from $11.5 billion in 2019), and the company recorded an operating loss of $1.7 billion, compared with operating income of $325 million in 2019. Net loss attributable to common stockholders of Live Nation was $1.7 billion. The company ceased all Live Nation tours and closed its venues in mid-March 2020.
Show count fell from 40,237 in 2019 to 8,117 in 2020, and fan attendance fell from 97.7 million to 11.1 million. Management states it cannot estimate the duration of the impact, and expects the negative effect to continue in 2021, with most global tours expected to resume and larger venues to reopen in the second half of 2021. Liquidity was the central focus.
As of December 31, 2020, total cash and cash equivalents were $2.5 billionb, including $673.5 million of ticketing client cash, and available debt capacity was $961.7 million. The company issued $1.2 billion of 6.5% senior secured notes due 2027 and $400 million of 2.0% convertible senior notes due 2025 in 2020, and $500 million of 3.75% senior secured notes due 2028 in January 2021. The senior secured credit facility's net leverage covenant was replaced with a $500 million liquidity covenant through the earlier of December 31, 2021 and a fiscal quarter the company elects before that date.
Total indebtedness was $5.0 billionc, and the company reported cost reductions of over $950 million in 2020 and the elimination or deferral of $1.6 billion in cash outflows. Management believes it will remain in covenant compliance throughout 2021 and can meet obligations for the next twelve months, before giving effect to additional financings. The filing also highlights ongoing operational and regulatory exposures.
Ticketing refunds totaled 27.4 million tickets, equating to just over $2.6 billiond of gross transaction value, and a $102.0 million estimate was recorded for possible future refunds in Concerts. The company faces a pending arbitration with CIE over the terminated OCESA acquisition, with a hearing scheduled to begin in March 2022.
The Amended Final Judgment with the U.S. Department of Justice was extended through the end of 2025. Shareholders' equity was negative, at $(133.8) million total equity as of December 31, 2020.
02—Key points
Key Highlights
- Revenue fell 84% to $1.86 billion in 2020 from $11.55 billion in 2019, with Concerts revenue at $1.47 billion (78.9% of total), Ticketing at $188.4 million (10.1%), and Sponsorship & Advertising at $203.7 million (10.9%).
- Operating loss of $1.65 billion in 2020 versus operating income of $324.8 million in 2019; net loss attributable to common stockholders of Live Nation was $1.72 billion.
- Cash and cash equivalents of $2.54 billion at December 31, 2020, including $673.5 million of ticketing client cash; available debt capacity of $961.7 million.
- Total debt of $5.0 billion at year-end 2020 (versus $3.4 billion in 2019); net debt of $4.9 billion; weighted-average cost of debt of 4.4%.
- Issued $1.2 billion of 6.5% senior secured notes due 2027 and $400 million of 2.0% convertible notes due 2025 in 2020, and $500 million of 3.75% senior secured notes due 2028 in January 2021.
- Cost reductions of over $950 million in 2020 and elimination or deferral of $1.6 billion in cash outflows; net leverage covenant replaced by a $500 million liquidity covenant until the earlier of December 31, 2021 and an elected quarter.
- Total equity was negative $(133.8) million at December 31, 2020, compared with $1.46 billion at December 31, 2019, and the accumulated deficit increased to $(2.68) billion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed March 1, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $1.86B$11.55B | −83.9% |
| SG&A Expenses | $1.52B$2.15B | −29.0% |
| Operating Income | -$1.65B$324.84M | −608.9% |
| Interest Expense | $226.83M$157.52M | +44.0% |
| Net Income | -$1.72B$69.89M | −2567.5% |
| EPS (Basic) | $-8.12$-0.02 | −40500.0% |
| EPS (Diluted) | $-8.12— | — |
| Shares Outstanding (Basic) | 212.27M210.08M | +1.0% |
| Shares Outstanding (Diluted) | 212.27M— | — |
05—Questions
Frequently Asked Questions
How much did the pandemic affect Live Nation's 2020 revenue and profitability?
Revenue decreased 84% to $1.86 billion in 2020 from $11.55 billion in 2019. The company reported an operating loss of $1.65 billion compared with operating income of $324.8 million in 2019, and a net loss attributable to common stockholders of $1.72 billion. The filing attributes these results largely to the global COVID-19 pandemic, which led the company to cease all tours and close its venues in mid-March 2020.
How much liquidity does Live Nation have to get through the pandemic?
As of December 31, 2020, cash and cash equivalents totaled $2.5 billion, including $673.5 million of ticketing client cash, and available debt capacity was $961.7 million. Management believes this liquidity, along with cost reductions and the 2020 and January 2021 debt issuances, will allow it to fund operations and satisfy obligations for at least the next twelve months, before giving effect to any additional financings.
What does the filing say about when live events will return?
Management states that the length and severity of the reduction in live events is uncertain and that it expects the negative impact to continue in 2021. It does not anticipate a significant change in activity levels until early in the second half of 2021, and expects most global tours to resume and larger venues to reopen in the second half of 2021. The company says it cannot estimate the impact on its business with certainty.
What are the main debt and covenant changes?
The company amended its senior secured credit facility in April and July 2020. The July 2020 amendment replaced the net leverage covenant with a $500 million liquidity covenant until the earlier of December 31, 2021 and an elected fiscal quarter before that date. The company issued $1.2 billion of 6.5% senior secured notes due 2027, $400 million of 2.0% convertible senior notes due 2025, and, in January 2021, $500 million of 3.75% senior secured notes due 2028. Total indebtedness was $5.0 billion at December 31, 2020.
What refund and legal risks does the filing disclose?
In 2020, 27.4 million tickets were refunded, equating to just over $2.6 billion of gross transaction value. The company recorded a $102.0 million estimate in Concerts for possible future refunds. It also discloses pending lawsuits challenging its ticket refund policies, a pending arbitration with CIE and Grupo Televisa related to the terminated OCESA acquisition with a hearing scheduled for March 2022, and an Amended Final Judgment with the U.S. Department of Justice extended through the end of 2025.
06—Continue