What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-03 · 200 added, 180 removed, 360 unchanged (51% of the section changed)

14 unchanged sentences

We do not intend to update these forward-looking statements, except as required by applicable law.

Executive Overview

In the third quarter, we saw a meaningful restart of our operations which was reflected in our financials and key performance indicators.

As a result, this was our best quarter in the last two years.

After nearly a year and a half of very limited events and ticket sales, shows began to play off in our key markets and on-sales for future events continue to grow.

In particular, we saw outdoor amphitheater events as well as festivals take place in the United States and United Kingdom with enthusiastic fan response.

Despite the operational challenges associated with ramping up our concerts in a compressed timeframe, increased health and safety protocols, and a generally tighter labor market, we were able to successfully deliver every planned concert, increase overall per fan profitability, and deliver our first positive operating income in two years.

This has been done with careful consideration of the safety and health of our fans, artists and employees via a mix of masking, testing and vaccination protocols.

We have seen record festival attendance at a number of our events this year and little pushback on our vaccine requirements in the United States;

in fact, recent surveys reveal an improvement to the fan experience versus 2019.

Emerging from the pandemic, our organization has streamlined its operations, reduced costs and focused its cash management strategies for future flexibility.

In the United States and United Kingdom, our reopening is well underway while other parts of the world catch up as vaccination efforts gain momentum in mainland Europe, Asia-Pacific and Latin America.

A key leading indicator of the future health of our business is transacted ticket sales and for the third quarter, our United States and United Kingdom markets had double-digit growth versus the third quarter of 2019.

Sales were notably strong for concert events in both markets and sporting events in the United States.

Our revenue increased by $2.5 billion in the third quarter, from $184 million in 2020 to $2.7 billion in 2021.

All three of our segments reported revenue growth due to more events, higher ticket sales and increased sponsor fulfillment over the past three months.

As a result, our operating income improved by $642 million, from a loss of $504 million in 2020 to an income of $137 million in 2021.

The improvement resulted from both increased events, ticket sales and sponsor client activation partially offset by higher selling, general and administrative expenses as we brought employees back from furlough and began hiring new roles to execute 2021 events through the remainder of the year and prepare for 2022.

For the first nine months of 2021, our revenue increased by $1.9 billion, from $1.6 billion in 2020 to $3.6 billion in 2021, which was largely due to our business re-

starting in mid-summer of this year versus operations limited to January through mid-March of 2020.

Our operating loss improved by $1.0 billion or 77%, from $1.3 billion in 2020 to $293 million in 2021.

The improvement was due to the revenue growth as well as reduced selling, general and administrative, and depreciation and amortization costs in the first nine months of this year.

For the third quarter and year-to-date, the impact of changes in foreign exchange rates did not materially impact our year-over-year variances.

Our Concerts segment revenue for the third quarter increased by $2.0 billion, from $155 million in 2020 to $2.2 billion in 2021.

The revenue growth was a result of increased shows and fans this quarter as well as ancillary spend per fan at our events.

The number of events for the third quarter of 2021 was nearly 5,600 compared to approximately 400 events in the third quarter of last year.

The number of fans for the third quarter of 2021 was nearly 17 million compared to approximately 265 thousand in the third quarter of last year.

The growth was largely in the United States and United Kingdom.

Concerts operating loss for the third quarter improved by $249 million, from a loss of $282 million in 2020 to $33 million in 2021.

The improvement was primarily due to more shows this year as well as an increase in net ancillary spend per fan at our amphitheater and festival events.

Our amphitheater net ancillary spend per fan grew by double digits compared to 2019 as a result of higher consumption and our transition to cashless transactions.

At our major festivals that had over 100 thousand fans, we also saw robust growth in onsite spend with our ancillary per fan increasing by double-digits over 2019.

And while we have seen some adverse impacts in our operating expenses per show due to labor shortages and supply chain issues, our spend per fan metrics have outpaced the higher costs.

For the first nine months, our Concerts segment revenue increased by $1.4 billion, from $1.3 billion in 2020 to $2.7 billion in 2021.

The growth in the second and third quarters more than offset the revenue generated in January through mid-March of 2020, prior to the pandemic related shut-down.

Concerts operating loss for the first nine months improved by $398 million, from $723 million in 2020 to $324 million in 2021.

The improvement was driven by the return of shows and fans, higher on-site spend and ticket prices as well as lower selling, general and administrative costs.

Our Ticketing segment revenue for the third quarter increased by $394 million, from negative $20 million in 2020 to positive $374 million in 2021.

The improvement resulted from an increase in ticket sales, stronger pricing, and a reduction in ticket refunds this year.

Excluding refunds, we sold 49 million fee-bearing tickets in the third quarter of this year compared to 7 million tickets in the third quarter of last year.

The improvement was almost entirely driven by sales in the United States and the United Kingdom, largely for concert and sporting events.

Our resale business bounced back dramatically in the third quarter with our highest National Football League sales quarter ever and the month of September was our highest resale gross transaction value month ever.

Ticketing operating income for the third quarter improved by $312 million, from a $197 million loss in 2020 to income of $114 million in 2021.

The improvement in operating results was largely driven by increased ticket sales, strong ticket pricing and higher ancillary revenue streams.

For the first nine months, Ticketing revenue increased by $469 million, from $177 million in 2020 to $647 million in 2021.

This was mostly driven by the reduction in refunds across our global Ticketing segment as refunded tickets declined from 23 million for the first nine months of last year to 13 million for the first nine months of this year.

Excluding refunds, we sold 89 million tickets for the first nine months of this year compared to 52 million tickets for the first nine months of last year with most of these being transacted prior to the pandemic.

Operating income improved by $518 million, from a loss of $480 million in 2020 to income of $37 million in 2021.

This was largely driven by reduced ticket refunds as well as cost savings in the first nine months of this year as compared to last year.

Our Sponsorship & Advertising segment revenue for the third quarter increased by $127 million, from $48 million in 2020 to $174 million in 2021.

The improvement was due to higher activations with our marketing partners due to more events going on sale, venues re-opening and supplying more advertising content to our clients.

Even with a greatly compressed sales window, we saw strong sales for many of our larger festivals and our sponsorship revenue per fan at our United Kingdom events grew compared to 2019.

Operating income for the third quarter increased by $89 million, from $14 million in 2020 to $103 million in 2021.

The improvement was due to more sponsor and online advertising activations resulting from the restart of live events and rapidly increasing ticket sales, particularly in the United States.

For the first nine months, Sponsorship & Advertising revenue increased by $85 million, from $157 million in 2020 to $242 million in 2021.

The growth in the second and third quarters more than offset the revenue generated in January through mid-March of 2020 when our business was fully open.

Operating income for the first nine months increased by $61 million, from $41 million in 2020 to $102 million in 2021 for the same reasons discussed above.

As ticket sales return and events scale up in key markets, we continue to focus on mitigating the financial impact of the shutdown.

We are balancing our ramp-up with the cost-savings initiatives we implemented across the organization and are also protecting our liquidity by managing cash outflows associated with all our major expenditures:

operating expenses, capital expenditures, acquisitions, and advances in both our ticketing and concert businesses.

The pace of the recovery continues to depend on each market’s containment efforts and expeditious rollout of approved vaccines and treatments for COVID-19.

The progress and momentum over the last two quarters has made us even more optimistic about the long-term potential of our company and the unique power of live shows to unite people.

Recent Events

In September 2021, we agreed to proceed with the previously announced acquisition of an aggregate 51% interest in OCESA Entretenimiento, S.A.

and certain other related subsidiaries of Corporación Interamericana de Entretenimiento, S.A.B.

The closing of the acquisition is subject to customary closing conditions, including Mexican regulatory approvals.

We have submitted our initial concentration notice filings to, and responded to initial requests for information from, the regulatory authorities in Mexico, and we are awaiting further responses from them in connection with their review of our initial filings.

We could receive responses from the regulatory authorities by the end of November, which would allow the parties to proceed to close the transaction in the fourth quarter of 2021 if it is re-approved within that time frame .

Impact of the Global COVID-19 Pandemic

The unprecedented and rapid spread of COVID-19 and the related government restrictions and social distancing measures implemented throughout the world have significantly impacted our business.

Beginning in March 2020, large public events were cancelled, governmental authorities began imposing restrictions on non-essential activities, and businesses suspended activities around the world.

As the impact of the global COVID-19 pandemic became clearer, we ceased all Live Nation tours and closed our venues in mid-March 2020 to support global efforts at social distancing and mitigating the virus, and to comply with restrictions put in place by various governmental entities, which has had a materially negative impact on our revenue and financial position.

We are beginning to see the positive impacts of successful vaccination rollouts in many of our key markets with social distancing restrictions easing and live events resuming late in the second quarter.

The unprecedented and rapid spread of COVID-19 and the related government restrictions and social distancing measures implemented throughout the world significantly impacted our business through the first half of this year.

Late in the second quarter, however, we began to see the positive impacts of successful vaccination rollouts in many of our key markets, mainly the United States and United Kingdom, with social distancing restrictions easing and live events resuming.

In the third quarter, we saw a meaningful restart of our operations with outdoor amphitheater events and festivals taking place in both the United States and United Kingdom.

The restart of our operations has been executed with careful consideration of the safety and health of our fans, artists and employees through a mix of masking, testing and vaccination protocols at our events, venues and offices around the world.

Operating Results

2 unchanged sentences

Cash and available liquidity

We currently have approximately $970.8 million available for future borrowings under our senior secured credit facility, including $400 million in undrawn term loan A capacity and $570.8 million in available revolver capacity, net of outstanding letters of credit.

In January 2021, we issued $500 million principal amount of 3.75% senior secured notes due 2028.

We currently have approximately $571.3 million available for future borrowings under our senior secured credit facility, net of outstanding letters of credit.

In January 2021, we issued $500 million principal amount of 3.75% senior secured notes due 2028 and in September 2021, we elected to draw down the $400 million term loan A under the amended senior secured credit facility and completed the public offering of 5,239,259 shares of common stock for $449.4 million of net proceeds.

We will continue to evaluate future financing opportunities to further expand liquidity at reasonable costs.

Additionally, our senior secured credit facility has a $500 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter prior to December 31, 2021, when we will revert to a net leverage covenant.

We believe these allow us the flexibility to manage our business through the disruption that we continue to experience into 2021.

As of June 30, 2021, our total cash and cash equivalents balance was $4.0 billion, which included $1.1 billion of ticketing client cash.

We believe this cash, net of client cash, together with our available debt capacity of $970.8 million, gives us the

liquidity to fund our operations during the pandemic.

Our total cash includes event-related deferred revenue for which the amount can fluctuate over the course of the year, but given the shift of shows into the second half of 2021 and 2022, we expect this number to remain above seasonally normal levels throughout 2021.

Event-related deferred revenue consists of cash held by our Concerts segment for future shows, with roughly half the funds associated with upcoming shows in the United States and half for international shows as of June 30, 2021.

We believe these additional debt and equity issuances, along with our liquidity covenant, allow us the flexibility to manage our business through the disruption that we continue to experience into 2021 and fund the acquisition of 51% of the capital stock of OCESA.

As of September 30, 2021, our total cash and cash equivalents balance was $4.6 billion, which included $1.3 billion of ticketing client cash.

We believe this cash, net of client cash, together with our available debt capacity of $571.3 million, gives us the liquidity to fund our operations during the pandemic and as our markets begin reopening.

Our total cash includes event-related deferred revenue the amount of which can fluctuate over the course of the year, but given the shift of shows into 2022, we expect this number to remain above seasonally normal levels throughout 2021.

Event-related deferred revenue consists of cash held by our Concerts segment for future shows, with approximately half the funds associated with upcoming shows in the United States and half for international shows as of September 30, 2021.

In the United States, the funds are largely associated with shows in our owned or operated venues, notably amphitheaters, festivals, theaters and clubs.

Internationally, the funds held are from a combination of both shows in our owned or operated venues, as well as shows in third-party venues associated with our promoter share of tickets in allocation markets.

We do not otherwise generally hold funds for concerts being held in third-party buildings.

In the United States, venues traditionally hold all funds, and internationally either the venue holds all funds or holds the portion of funds associated with their ticket allocation.

Cost and Cash Management Programs

Given the uncertainty associated with the duration of current conditions globally, we have implemented a number of initiatives to reduce fixed costs and conserve cash.

In response to the impacts the COVID-19 pandemic has had and continues to have on our business globally, we have implemented a number of initiatives to reduce fixed costs and conserve cash while our business was shut down.

As part of these cost reduction efforts, we implemented salary reductions for most of our employees, with salaries for senior executives reduced by up to 60% during 2020.

We began eliminating the salary reductions in January 2021 and have fully restored salaries during the second quarter.

We began eliminating the salary reductions in January 2021 and fully restored salaries during the second quarter.

Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, termination of certain employees and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.

We are also making use of government support programs globally.

In most European and Asian markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there were payroll support programs to mitigate a substantial portion of employee costs, some of which are continuing into 2021.

As our business scales back up, we are beginning to reinvest in our growth while continuing to closely monitor our cash flow and liquidity.

We continue to make use of government support programs globally.

In most European and Asia-Pacific markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there were payroll support programs to mitigate a substantial portion of employee costs.

Additionally, in the United States, we have filed for payroll support under the Employee Retention Credit program established as part of the CARES Act.

Finally, the CARES Act also provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022.

We are further protecting our cash outflows by reducing advances in both our ticketing and concert businesses, re-assessing all capital expenditure projects and evaluating all other cash deployment activities.

As a result of these initiatives and government support programs, in 2020 we achieved over $950 million in cost reductions and the elimination or deferral into 2021 of $1.6 billion in cash outflows, which primarily includes the cost reductions discussed above along with lower capital expenditures, acquisition payments, and concert and ticketing advances.

We believe this aggressive cost and cash management program, combined with a strong liquidity profile, has positioned us to manage through the global COVID-19 pandemic-related hold on show activity and provides the flexibility to scale up quickly as shows are restarting.

Based on these actions and assumptions regarding the impact of the global COVID-19 pandemic, we believe that we will remain in compliance with our debt covenants throughout 2021 and be able to generate sufficient liquidity to satisfy our obligations for the next twelve months, prior to giving effect to any additional financings that may occur.

Based on these actions and assumptions regarding the impact of the global COVID-19 pandemic, we believe that we will remain in compliance with our debt covenants throughout 2021 and be able to generate sufficient liquidity and profitability to satisfy our obligations for the next twelve months, prior to giving effect to any additional financings that may occur.

Our forecasted expense management and liquidity measures may be modified as we get more clarity on the timing of events.

We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our live events and the magnitude, duration and speed of the global pandemic is unknown, and as a consequence, our ability to be predictive is uncertain.

We cannot assure you that our assumptions used to estimate our leverage, liquidity and profitability requirements will be correct because we have never previously experienced a complete cessation of our live events and the magnitude, duration and speed of the global pandemic is unknown, and as a consequence, our ability to be predictive is uncertain.

Health and Safety and Implementing a Return to Business

We are currently implementing steps for the health and safety of our employees as they return to work in our offices in the future, and for our artists and fans as they return to live events.

We will return to work in local markets only after there is clear guidance that the time is right to do so, and then in appropriate numbers with expanded cleaning and any social distancing or other regulations.

We are returning to work in local markets in appropriate numbers with expanded cleaning and any social distancing or other regulations.

Similarly, we are resuming concerts when the time is right on a market by market basis.

We recognize that as concerts have started back up, the experience at our venues has changed, and are working with medical experts and public health officials to implement safety precautions and protocols necessary for fans to return to enjoy our shows.

Fan surveys indicate that the demand will be there when the shows return, with 95% of fans expecting to attend concerts again once the pandemic is over.

The reopening of concerts is happening on a market by market basis, and given we operate in 46 countries globally, the timelines will vary from now to not for several months or beyond.

The length and severity of the impact to live events and our related sponsorship and ticketing businesses is still uncertain.

Activity levels are beginning to increase in the second half of 2021 led by outdoor events and festivals in the United States and United Kingdom.

We expect that most tours will resume and larger venues will reopen in the second half of 2021 and that the underlying business will begin generating operating income once again.

While this disruption has had a material impact on our business, as the leading global live event and ticketing company we believe that we are well-positioned to provide the best service to artists, teams, fans and venues as business resumes.

In the markets where we have reopened, cancellation rates are declining back to historical levels prior to the pandemic.

As the leading global live event and ticketing company, we believe that we are well-positioned to provide the best service to artists, teams, fans and venues as business resumes.

Twenty years of global growth demonstrates the resilience of fan demand for the live entertainment experience.

Executive Overview

Since the onset of the COVID-19 pandemic, we have held very few traditional concerts in order to ensure the safety of our fans, artists, and employees.

Coupled with minimal sponsor engagement and ticket sales, it has been a challenging environment for our company, but one that we met with prudent cost reductions, focused cash management strategies, and a streamlined organization to overcome this unprecedented hurdle.

After supporting worldwide efforts to mitigate the spread of the virus, we began to see the positive impacts of successful vaccination rollouts in key markets with social distancing restrictions easing and live shows returning by the end of the quarter.

While our Concerts number of fans and events did not return to historic levels in the second quarter, we saw our major markets removing capacity limits, particularly in the United States, where planning for live shows have resumed.

Our Ticketing segment had a significant increase in ticket sales in the second quarter;

a key leading indicator that fans are eager to see their favorite stars performing live in the near future.

The effects of the pandemic are still impacting us, but we are taking steps towards welcoming back fans, artists and employees to our live world.

With our reopening gaining traction, our revenue increased by $502 million in the second quarter, from $74 million in 2020 to $576 million in 2021.

All three of our segments reported revenue growth due to more events, higher ticket sales, and increased sponsor fulfillment over the past three months.

As a result, our operating loss improved by $461 million, or 78%, from $588 million in 2020 to $127 million in 2021.

The improvement resulted from both increased events and ticket sales as well as reduced ticket refunds and sunk costs in the second quarter.

For the first six months of 2021, our revenue decreased by $573 million, from $1.4 billion in 2020 to $867 million in 2021, which was largely due to normal pre-pandemic operations from January through mid-March of 2020 compared to a full shut-down for the first quarter of 2021.

However, our operating loss improved by $331 million or 43%, from $761 million in 2020 to $430 million in 2021, despite the decrease in revenue.

The increase was due to the revenue impacts that drove our second quarter improvement as well as lower fixed costs in the first half of this year.

For the second quarter and year-to-date, the impact of changes in foreign exchange rates did not materially impact our year-over-year variances.

Our Concerts segment revenue for the second quarter increased by $145 million, from $142 million in 2020 to $287 million in 2021.

The revenue growth was a result of increased shows and fans this quarter.

The number of events for the second quarter of 2021 was over 1,600 compared to approximately 100 events in the second quarter of last year.

The number of fans grew from approximately 50,000 in the second quarter of 2020, to 1.3 million in the second quarter of 2021.

The growth was largely in the United States and our Asia-Pacific markets.

Concerts operating loss for the second quarter improved by $134 million, from $280 million in 2020 to $146 million in 2021.

The improvement was primarily due to more shows this year as well as sunk costs recorded in the second quarter of last year for advertising expenses and other costs associated with shows cancelled or rescheduled due to the pandemic.

For the first six months, our Concerts segment revenue decreased by $609 million, from $1.1 billion in 2020 to $526 million in 2021.

The growth in the second quarter was more than offset by the revenue generated in January through mid-March of 2020 when our business was fully open.

Despite the decline in revenue, Concerts operating loss for the first six months improved by $149 million, or 34%, from $441 million in 2020 to $292 million in 2021.

This was partially driven by the sunk cost impact in the second quarter of 2020 as well as lower fixed costs in the first six months of 2021 compared to the first six months of 2020.

Our Ticketing segment revenue for the second quarter increased by $331 million, from negative $87 million in 2020 to positive $244 million in 2021.

The improvement resulted from an increase in ticket sales, stronger pricing, and a reduction in ticket refunds this year.

Excluding refunds, we sold 30 million tickets in the second quarter of this year compared with 2 million tickets in the second quarter of last year.

The improvement was almost entirely driven by sales in the United States, largely for concert and sporting events.

Refunded tickets declined from 11 million in the second quarter of last year to 4 million in the second quarter of this year.

Ticketing operating income for the second quarter improved by $311 million, from a $267 million loss in 2020 to income of $44 million in 2021.

The improvement in operating results was largely driven by increased ticket sales, strong ticket pricing, reduced ticket refunds, and lower fixed costs.

For the first six months, Ticketing revenue increased by $75 million, from $197 million in 2020 to $272 million in 2021, an improvement of 38%.

This was mostly driven by the reduction in refunds across our global Ticketing segment.

Refunded tickets declined from 18 million for the first six months of last year to 7 million for the first six months of this year.

Operating loss improved by $206 million, or 73%, from $283 million in 2020 to $77 million in 2021.

This was largely driven by reduced ticket refunds as well as cost savings in the first six months of this year as compared to last year.

Our Sponsorship & Advertising segment revenue for the second quarter increased by $26 million, from $18 million in 2020 to $45 million in 2021.

The improvement was due to higher activations with our marketing partners due to more events going on sale, venues re-opening, and supplying more advertising content to our clients.

Operating income for the second quarter increased by $17 million, from a loss of $11 million in 2020 to income of $5 million in 2021.

The improvement was due

to more sponsor and online advertising activations resulting from the restart of live events and rapidly increasing ticket sales, particularly in the United States.

For the first six months, Sponsorship & Advertising revenue decreased by $41 million, from $109 million in 2020 to $67 million in 2021.

The growth in the second quarter was more than offset by the revenue generated in January through mid-March of 2020 when our business was fully open.

Operating income for the first six months decreased by $28 million, from $27 million of income in 2020 to a loss of $1 million in 2021 for the same reason.

Even as we begin to see sales returning and events happening in key markets, we continue to focus on mitigating the financial impact of the shutdown.

We are balancing our ramp-up with the cost-savings initiatives we implemented across the organization and are also protecting our liquidity by tightly managing cash outflows associated with all our major expenditures:

operating expenses, capital expenditures, acquisitions, and advances in both our ticketing and concert businesses.

The pace of the recovery will depend on each market’s containment efforts and expeditious rollout of approved vaccines and treatments for COVID-19.

We remain optimistic about the long-term potential of our company and the unique power of live shows to unite people.

We believe our aggressive cost-savings and cash management programs, combined with a strong liquidity profile, position Live Nation to manage out of the global COVID-19 pandemic and its impact on live events and provides us the flexibility to scale up quickly as shows resume.

Segment Overview

13 unchanged sentences

To judge the health of our Ticketing segment, we primarily review the GTV and the number of tickets sold through our ticketing operations, the number of clients renewed or added and the average royalty rate paid to clients who use our ticketing services.

In addition, we review the number of visits to our websites, cost of customer acquisition, the purchase conversion rate, the overall number of customers in our database, the number and percentage of tickets sold via mobile and the number of app installs.

For business that is conducted in foreign markets, we also compare the operating results from our foreign operations to prior periods without the impact of changes in foreign exchange rates.

3 unchanged sentences

To judge the health of our Sponsorship & Advertising segment, we primarily review the revenue generated through sponsorship arrangements and online advertising, and the percentage of expected revenue under contract.

For business that is

conducted in foreign markets, we also compare the operating results from our foreign operations to prior periods without the impact of changes in foreign exchange rates.

For business that is conducted in foreign markets, we also compare the operating results from our foreign operations to prior periods without the impact of changes in foreign exchange rates.

Key Operating Metrics

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

20 unchanged sentences

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.

Fee-bearing tickets sold above are net of refunds of 5.8 million and 5.2 million tickets for the three months ended September 30, 2021 and 2020, respectively, and 12.9 million and 23.2 million tickets for the nine months ended September 30, 2021 and 2020, respectively.

Non-GAAP Measures

6 unchanged sentences

(in thousands)

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Concerts $ (32,762) $ 14,226 $ (1,098) $ 59,541 $ — $ 19,671 $ 59,578

4 unchanged sentences

Total $ 137,145 $ 27,318 $ (1,148) $ 101,235 $ 20,486 $ 20,644 $ 305,680

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Concerts $ (281,625) $ 39,635 $ 208 $ 65,794 $ — $ 2,603 $ (173,385)

4 unchanged sentences

Total $ (504,441) $ 56,695 $ 208 $ 119,938 $ 6,707 $ 1,656 $ (319,237)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Concerts $ (324,458) $ 34,170 $ (988) $ 180,877 $ — $ 11,389 $ (99,010)

4 unchanged sentences

Total $ (293,312) $ 80,165 $ (1,038) $ 313,758 $ 49,214 $ 14,801 $ 163,588

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Concerts $ (722,607) $ 66,376 $ 896 $ 202,352 $ — $ (19,269) $ (472,252)

28 unchanged sentences

Three Months Ended

Change Six Months Ended

September 30, %

Change Nine Months Ended

September 30, %

2021 2020 2021 2020

11 unchanged sentences

** See “—Non-GAAP Measures” above for the definition and reconciliation of AOI and AOI margin.

Concerts revenue increased $145.1 million during the three months ended June 30, 2021 as compared to the same period of the prior year primarily due to the resumption of shows in major markets including the United States, Australia and New Zealand as compared to the lack of events during the same period in 2020 driven by the global COVID-19 pandemic.

Concerts revenue increased $2.0 billion during the three months ended September 30, 2021 as compared to the same period of the prior year primarily due to the resumption of shows and festivals in major markets including the United States and United Kingdom as compared to the lack of events during the same period in 2020 driven by the global COVID-19 pandemic.

Operating results

Concerts operating loss decreased $133.5 million during the three months ended June 30, 2021 as compared to the same period of the prior year primarily driven by the higher revenue discussed above along with lower direct operating expenses in the second quarter of 2021 for costs associated with shows cancelled or rescheduled due to the global COVID-19 pandemic.

Concerts revenue decreased $608.8 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to the revenue generated in January through mid-March of 2020 when our business was fully open prior to the global COVID-19 pandemic as compared to the resumption of shows in major markets including the United States, Australia and New Zealand late in the second quarter of 2021.

Concerts operating loss decreased $248.9 million during the three months ended September 30, 2021 as compared to the same period of the prior year primarily driven by the resumption of shows and festivals in 2021 discussed above.

Concerts revenue increased $1.4 billion during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to the resumption of shows and festivals in major markets including the United States and United Kingdom late in the second quarter of 2021 as compared to revenue generated in January through mid-March of 2020 when our business was fully open prior to the global COVID-19 pandemic.

Operating results

Concerts operating loss decreased $149.3 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily driven by cost reduction measures implemented in the second quarter of 2020 and continuing in 2021, including salary reductions, hiring freezes, furloughs, and reduction or elimination of other discretionary spending along with participating in government support programs globally along with lower costs in 2021 associated with shows cancelled or rescheduled due to the global COVID-19 pandemic.

In addition, we recorded $11.6 million of impairment charges in the first six months of 2020 primarily associated with revenue-generating contract intangible assets.

There were no significant impairments recorded in the first six months of 2021.

Concerts operating loss decreased $398.1 million during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily driven by the resumption of shows and festivals during 2021 discussed above.

In addition, we recorded $15.3 million of impairment charges in the first nine months of 2020 primarily associated with revenue-generating contracts and client/vendor relationships intangible assets.

There were no significant impairments recorded in the first nine months of 2021.

Our Ticketing segment operating results were, and discussions of significant variances are, as follows:

Three Months Ended

Change Six Months Ended

September 30, %

Change Nine Months Ended

September 30, %

2021 2020 2021 2020

4 unchanged sentences

Depreciation and amortization 32,040 42,565 (25)% 103,406 125,054 (17)%

Loss (gain) on disposal of operating assets — (1) * — 1 *

Gain on disposal of operating assets (66) (1) * (66) — *

Operating income (loss) $ 114,270 $ (197,407) * $ 37,439 $ (480,460) *

4 unchanged sentences

** See “—Non-GAAP Measures” above for the definition and reconciliation of AOI and AOI margin.

Ticketing revenue increased $331.0 million during the three months ended June 30, 2021 as compared to the same period of the prior year primarily due to an increase in North America primary and secondary ticket fees driven by more events on sale due to the resumption of concerts and sporting events in the second quarter of 2021, strong ticket pricing and lower ticket refunds in 2021.

Ticketing revenue increased $394.1 million during the three months ended September 30, 2021 as compared to the same period of the prior year primarily due to an increase in North America primary and secondary ticket fees driven by more events on sale due to the resumption of concerts and sporting events in the third quarter of 2021, strong ticket pricing and lower ticket refunds in 2021.

Operating results

Ticketing operating income for the three months ended June 30, 2021 was $43.8 million as compared to an operating loss of $267.2 million for the same period of the prior year primarily driven by the increased ticketing activity discussed above along with lower fixed costs from cost reduction measures implemented in the second quarter of 2020 continuing into 2021, including salary reductions, hiring freezes, furloughs, and reduction or elimination of other discretionary spending along with participating in government support programs globally.

Ticketing revenue increased $75.1 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to an increase in North America primary ticket fees driven by lower ticket refunds in 2021 and strong ticket pricing as concert and sporting events on sales resuming in the second quarter of 2021.

Ticketing operating income for the three months ended September 30, 2021 was $114.3 million as compared to an operating loss of $197.4 million for the same period of the prior year primarily driven by the increased ticketing activity discussed above along with lower ticket refunds in 2021.

Ticketing revenue increased $469.1 million during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to an increase in North America primary and secondary ticket fees driven by more events on sale due to the resumption of concerts and sporting events in the second quarter of 2021, strong ticket pricing and lower ticket refunds in 2021.

Operating results

Ticketing operating loss decreased $206.2 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily driven by the increased ticketing activity discussed above along with cost reduction measures implemented in the second quarter of 2020 continuing into 2021, including salary reductions, hiring freezes, furloughs, and reduction or elimination of other discretionary spending along with participating in government support programs globally.

Ticketing operating income for the nine months ended September 30, 2021 was $37.4 million as compared to an operating loss of $480.5 million for the same period of the prior year primarily driven by the increased ticketing activity discussed above along with cost reduction measures implemented in the second quarter of 2020 continuing into 2021, including salary reductions, hiring freezes, furloughs, and reduction or elimination of other discretionary spending along with participating in government support programs globally.

Sponsorship & Advertising

1 unchanged sentence

Three Months Ended

Change Six Months Ended

September 30, %

Change Nine Months Ended

September 30, %

2021 2020 2021 2020

4 unchanged sentences

Depreciation and amortization 7,166 6,634 8% 21,837 21,766 *

Gain on sale of operating assets — — * — — *

Operating income (loss) $ 5,326 $ (11,217) * $ (1,115) $ 27,009 *

Operating income $ 102,755 $ 13,755 * $ 101,640 $ 40,764 *

Operating margin 58.9 % 28.7 % 42.1 % 26.0 %

3 unchanged sentences

** See “—Non-GAAP Measures” above for the definition and reconciliation of AOI and AOI margin.

Sponsorship & Advertising revenue increased $26.2 million during the three months ended June 30, 2021 as compared to the same period of the prior year primarily due to increased activity in online advertising and national sponsorship programs in North America due to the resumption of concert events in the second quarter of 2021.

Sponsorship & Advertising revenue increased $126.5 million during the three months ended September 30, 2021 as compared to the same period of the prior year primarily due to increased activity in national sponsorship programs, festival sponsorships and online advertising in North America due to the resumption of concert events and festivals in the third quarter of 2021.

Operating results

Sponsorship & Advertising operating income for the three months ended June 30, 2021 was $5.3 million as compared to an operating loss of $11.2 million in the same period of the prior year primarily driven by higher sponsorship activity discussed above.

Sponsorship & Advertising revenue decreased $41.4 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to a reduction in sponsorship revenue associated with our venues, festivals and lack of online activity as ticket sales declined driven by the unprecedented stoppage of events beginning in mid-March 2020 and continuing into the second quarter of 2021 due to the global COVID-19 pandemic.

As discussed above, we had increased activity in the second quarter of 2021;

however, that increase was more than offset by the revenue generated in January through mid-March prior to the shut down of our business.

Sponsorship & Advertising operating income increased $89.0 million during the three months ended September 30, 2021 as compared to the same period of the prior year primarily driven by higher sponsorship activity discussed above.

Sponsorship & Advertising revenue increased $85.1 million during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to increased activity in national sponsorship programs, festival sponsorships and online advertising in North America due to the resumption of concert events and festivals in the second quarter of 2021.

Operating results

Sponsorship & Advertising operating loss for the six months ended June 30, 2021 was $1.1 million as compared to an operating income of $27.0 million for the same period of the prior year primarily driven by the lower sponsorship activity discussed above.

Sponsorship & Advertising operating income increased $60.9 million during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily driven by the higher sponsorship activity discussed above.

Consolidated Results of Operations

Three Months Ended June 30, % Change

Three Months Ended September 30, % Change

As Reported Currency Impacts At Constant Currency** As Reported As Reported At Constant Currency**

7 unchanged sentences

Corporate expenses 44,649 (4) 44,645 31,630 41% 41%

Operating loss (127,285) $ 8,427 $ (118,858) (588,067) 78% 80%

Operating income (loss) 137,145 $ (1,392) $ 135,753 (504,441) * *

Operating margin 5.1% 5.1% *

1 unchanged sentence

Interest income (1,333) (2,810)

Equity in losses of nonconsolidated affiliates 2,998 6,613

Loss from sale of investments in nonconsolidated affiliates 993 35

Equity in losses (earnings) of nonconsolidated affiliates (7,025) 2,615

Gain from sale of investments in nonconsolidated affiliates (30,633) (2,514)

Other expense (income), net 12,441 (8,463)

Loss before income taxes (208,175) (639,767)

Income (loss) before income taxes 93,288 (559,362)

Income tax expense (benefit) 6,421 (16,904)

Net loss (210,460) (610,584)

Net loss attributable to noncontrolling interests (14,795) (43,067)

Net loss attributable to common stockholders of Live Nation $ (195,665) $ (567,517)

Net income (loss) 86,867 (542,458)

Net income (loss) attributable to noncontrolling interests 39,989 (13,556)

Net income (loss) attributable to common stockholders of Live Nation $ 46,878 $ (528,902)

* Percentages are not meaningful.

** See “—Non-GAAP Measures” above for the definition of constant currency.

Interest Expense

Interest expense increased $16.2 million, or 31%, during the three months ended June 30, 2021 as compared to the same period of the prior year due to additional interest costs from the issuance of our 6.5% senior secured notes in May 2020 and the issuance of our 3.75% senior secured notes in January 2021.

Net loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests decreased $28.3 million during the three months ended June 30, 2021 as compared to the same period of the prior year primarily due to higher operating results from certain concert and festival promotion businesses in North America during the second quarter of 2021 due to the resumption of events in the second quarter of 2021.

Six Months Ended June 30, % Change

Gain from sale of investments in nonconsolidated affiliates

Gain from sale of investments in nonconsolidated affiliates increased $28.1 million during the three months ended September 30, 2021 as compared to the same period of the prior year primarily due to the sale of certain cost basis investments during the three months ended September 30, 2021.

Other expense (income), net

Other expense (income), net was a loss of $12.4 million during the three months ended September 30, 2021 and includes net foreign exchange rate losses of $11.6 million.

Other expense (income), net was income of $8.5 million during the three months ended September 30, 2020 and includes net foreign exchange rate gains of $5.7 million.

The net foreign exchange rate gains and losses result primarily from revaluation of certain foreign currency denominated net assets held internationally.

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests was net income of $40.0 million during the three months ended September 30, 2021 as compared to a net loss of $13.6 million for the same period of the prior year primarily due to higher operating results from certain concert and festival promotion businesses in North America during the third quarter of 2021 due to the resumption of events in the third quarter of 2021.

Nine Months Ended September 30, % Change

As Reported Currency Impacts At Constant Currency** As Reported As Reported At Constant Currency**

5 unchanged sentences

Depreciation and amortization 313,758 (6,562) 307,196 364,785 (14)% (16)%

Loss on disposal of operating assets 110 (4) 106 689 * *

Loss (gain) on disposal of operating assets (1,038) (4) (1,042) 897 * *

Corporate expenses 100,195 (30) 100,165 80,858 24% 24%

3 unchanged sentences

Interest income (3,953) (9,712)

Equity in earnings of nonconsolidated affiliates 2,417 4,041

Loss (gain) from sale of investments in nonconsolidated affiliates (52,947) 35

Other expense, net 7,462 (580)

Equity in losses (earnings) of nonconsolidated affiliates (4,608) 6,656

Gain from sale of investments in nonconsolidated affiliates (83,580) (2,479)

Other expense (income), net 19,903 (9,043)

Loss before income taxes (431,220) (1,413,381)

1 unchanged sentence

Net loss (446,315) (1,363,964)

Net loss attributable to noncontrolling interests (30,324) (69,205)

Net income (loss) attributable to noncontrolling interests 9,665 (82,761)

Net loss attributable to common stockholders of Live Nation $ (455,980) $ (1,281,203)

2 unchanged sentences

Interest expense

Interest expense increased $43.1 million, or 45%, during the six months ended June 30, 2021 as compared to the same period of the prior year due to additional interest costs from the issuance of our 2.0% convertible senior notes in February 2020, the issuance of our 6.5% senior secured notes in May 2020 and the issuance of our 3.75% senior secured notes in January 2021.

Loss (gain) from sale of investments in nonconsolidated affiliates

Gain from sale of investments in nonconsolidated affiliates was $53.0 million during the six months ended June 30, 2021 as compared to a nominal loss during the same period of the prior year primarily due to the sale of certain cost basis investments during the first six months of 2021.

Interest expense increased $47.4 million, or 29%, during the nine months ended September 30, 2021 as compared to the same period of the prior year due to additional interest costs from the issuance of our 2.0% convertible senior notes in February 2020, the issuance of our 6.5% senior secured notes in May 2020 and the issuance of our 3.75% senior secured notes in January 2021.

Gain from sale of investments in nonconsolidated affiliates

Gain from sale of investments in nonconsolidated affiliates increased $81.1 million during the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to the sale of certain cost basis investments during the first nine months of 2021.

Other expense (income), net

Other expense (income), net was a net loss of $19.9 million during the nine months ended September 30, 2021 and includes net foreign exchange rate losses of $14.0 million.

Other expense (income), net was net income of $9.0 million during the nine months ended September 30, 2020 and includes net foreign exchange rate gains of $4.6 million.

The net foreign exchange rate gains and losses result primarily from revaluation of certain foreign currency denominated net assets held internationally.

Income tax expense (benefit)

For the six months ended June 30, 2021, we had a net tax expense of $8.7 million on a loss before income taxes of $524.5 million compared to a net tax benefit of $32.5 million on a loss before income taxes of $854.0 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021, the income tax expense consisted of $4.6 million related to foreign entities, $3.4 million related to United States federal taxes, and $0.7 million related to state and local income taxes.

The net increase in tax expense of $41.2 million was primarily due to profits in certain non-United States jurisdictions and other discrete tax benefits recorded in the first six months of 2020.

Net loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests decreased $38.9 million during the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to higher operating results from certain concert and festival promotion businesses in North America during the first six months of 2021 due to the resumption of events in the second quarter of 2021.

For the nine months ended September 30, 2021, we had a net tax expense of $15.1 million on a loss before income taxes of $431.2 million compared to a net tax benefit of $49.4 million on a loss before income taxes of $1.4 billion for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, the income tax expense consisted of $9.2 million related to foreign entities, $5.0 million related to United States federal taxes, and $0.9 million related to state and local income taxes.

The net increase in tax expense of $64.5 million was primarily due to profits in certain non-United States jurisdictions and other discrete tax benefits recorded in the first nine months of 2020.

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests was net income of $9.7 million during the nine months ended September 30, 2021 as compared to a net loss of $82.8 million for the same period of the prior year primarily due to higher operating results from certain concert and festival promotion businesses in North America during the first nine months of 2021 due to the resumption of events in 2021.

Liquidity and Capital Resources

In response to the impact that the global COVID-19 pandemic has had on our business, and the uncertainty of the duration of current conditions globally, we have taken certain actions to strengthen our liquidity position and preserve our capital resources.

In response to the impact that the global COVID-19 pandemic has had and continues to have on our business, we have taken certain actions to strengthen our liquidity position and preserve our capital resources.

In April 2020, we amended our senior secured credit facility to provide an incremental $130 million revolving credit facility.

We further amended our senior secured credit facility in July 2020, which, among other things, substitutes our net leverage covenant with a $500 million liquidity covenant (as defined in the agreement) until the earlier of (a) December 31, 2021 and (b) at our election, any fiscal quarter prior to December 31, 2021.

In February 2020, we issued $400 million principal amount of 2.0% convertible senior notes due 2025, in May 2020, we issued $1.2 billion principal amount of 6.5% senior secured notes due 2027 and in January 2021, we issued $500 million principal amount of 3.75% senior secured notes due 2028.

As a result, we believe these amendments and additional debt issuances will allow us the flexibility to manage our business through the disruption we expect to experience in 2021 until we are able to resume our operations.

In February 2020, we issued $400 million principal amount of 2.0% convertible senior notes due 2025 and in May 2020, we issued $1.2 billion principal amount of 6.5% senior secured notes due 2027.

As a result, we believe these amendments and additional debt and equity issuances will allow us the flexibility to manage our business through the disruption we continue to experience into 2021 and fund the acquisition of 51% of the capital stock of OCESA.

Our cash is centrally managed on a worldwide basis.

2 unchanged sentences

We may from time to time engage in open market purchases of our outstanding debt securities or redeem or otherwise repay such debt.

Our balance sheet reflects cash and cash equivalents of $4.0 billion at June 30, 2021 and $2.5 billion at December 31, 2020.

Included in the June 30, 2021 and December 31, 2020 cash and cash equivalents balances are $1.1 billion and $673.5 million, respectively, of cash received that includes the face value of tickets sold on behalf of our ticketing clients and their share of service charges, which we refer to as client cash.

Our balance sheet reflects cash and cash equivalents of $4.6 billion at September 30, 2021 and $2.5 billion at December 31, 2020.

Included in the September 30, 2021 and December 31, 2020 cash and cash equivalents balances are $1.3 billion and $673.5 million, respectively, of cash received that includes the face value of tickets sold on behalf of our ticketing clients and their share of service charges, which we refer to as client cash.

We generally do not utilize client cash for our own financing or investing activities as the amounts are payable to clients on a regular basis.

Our foreign subsidiaries held approximately $1.0 billion in cash and cash equivalents, excluding client cash, at June 30, 2021.

Our foreign subsidiaries held approximately $991.2 million in cash and cash equivalents, excluding client cash, at September 30, 2021.

We generally do not repatriate these funds, but if we did, we would need to accrue and pay United States state income taxes as well as any applicable foreign withholding or transaction taxes on future repatriations.

1 unchanged sentence

If the original maturity of these borrowings is 90 days or less, we present the borrowings and subsequent repayments on a net basis in the statement of cash flows to better represent our financing activities.

Our balance sheet reflects total net debt of $5.3 billion and $4.9 billion at June 30, 2021 and December 31, 2020, respectively.

Our weighted-average cost of debt, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.4% at June 30, 2021.

Our balance sheet reflects total net debt of $5.7 billion and $4.9 billion at September 30, 2021 and December 31, 2020, respectively.

Our weighted-average cost of debt, excluding unamortized debt discounts and debt issuance costs on our term loans and notes, was 4.2% at September 30, 2021.

Our cash and cash equivalents are held in accounts managed by third-party financial institutions and consist of cash in our operating accounts and invested cash.

7 unchanged sentences

Internationally, this cash is from a combination of both events in our owned or operated venues, as well as events in third-party venues associated with our promoter’s share of tickets in allocation markets.

We do not otherwise generally hold cash for events being held in third-party venues.

In the United States, most venues traditionally hold all the cash, and internationally either the venue holds all the cash or holds the portion of the cash associated with their ticket allocation.

With the exception of some upfront costs and artist advances, which are recorded in prepaid expenses until the event occurs, we pay the majority of event-related expenses at or after the event.

24 unchanged sentences

The proceeds were used to pay fees of $7.7 million and repay $75.0 million aggregate principal amount of our senior secured term loan B facility, leaving approximately $417.3 million for general corporate purposes, including acquisitions and organic investment opportunities.

In September 2021, we elected to draw down the $400 million term loan A under the amended senior secured credit facility prior to expiration of the drawdown period on October 17, 2021.

We intend to use the proceeds from the drawdown for general corporate purposes.

In September 2021, we completed the public offering of 5,239,259 shares of common stock.

A portion of the gross proceeds of $455.3 million were used to pay estimated fees of $5.9 million, leaving approximately $449.4 million of net proceeds.

We intend to use the net proceeds to fund the acquisition of 51% of the capital stock of OCESA and use any remaining proceeds for general corporate purposes.

Amended Senior Secured Credit Facility

In April and July 2020, we amended our senior secured credit facility and now have (i) a $400 million delayed draw term loan A facility, (ii) a $950 million term loan B facility, (iii) a $500 million revolving credit facility and (iv) a $130 million incremental revolving credit facility.

The delayed draw term loan A facility is available to be drawn until October 2021.

In addition, subject to certain conditions, we have the right to increase such facilities by an amount equal to the sum of (x) $425 million during the Restricted Period and $855 million after the Restricted Period, (y) the aggregate principal amount of voluntary prepayments of the delayed draw term loan A and term loan B and permanent reductions of the revolving credit facility commitments, in each case, other than from proceeds of long-term indebtedness, and (z) except during the Restricted Period, additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the agreement) is no greater than 3.75x.

In April and July 2020, we amended our senior secured credit facility and now have (i) a $400 million term loan A facility, (ii) a $950 million term loan B facility, (iii) a $500 million revolving credit facility and (iv) a $130 million incremental revolving credit facility.

In addition, subject to certain conditions, we have the right to increase such facilities by an amount equal to the sum of (x) $425 million during the Restricted Period and $855 million after the Restricted Period, (y) the aggregate principal amount of voluntary prepayments of the term loan A and term loan B and permanent reductions of the revolving credit facility commitments, in each case, other than from proceeds of long-term indebtedness, and (z) except during the Restricted Period, additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the agreement) is no greater than 3.75x.

The combined revolving credit facilities provide for borrowings up to $630 million with sublimits of up to (i) $150 million for the issuance of letters of credit, (ii) $50 million for swingline loans, (iii) $300 million for borrowings in Dollars, Euros or British Pounds and (iv) $100 million for borrowings in those or one or more other approved currencies.

the shares of stock, partnership interests and limited liability company interests of our direct and indirect domestic subsidiaries and 65% of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.

The interest rates per annum applicable to revolving credit facility loans and the delayed draw term loan A under the amended senior secured credit facility are, at our option, equal to either Eurodollar plus 2.25% or a base rate plus 1.25%.

The amended senior secured credit facility is secured by a first priority lien on substantially all of the tangible and intangible personal property of LNE and LNE’s domestic subsidiaries that are guarantors, and by a pledge of substantially all of the shares of stock, partnership interests and limited liability company interests of our direct and indirect domestic subsidiaries and 65% of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.

The interest rates per annum applicable to revolving credit facility loans and term loan A under the amended senior secured credit facility are, at our option, equal to either Eurodollar plus 2.25% or a base rate plus 1.25%.

The interest rates per annum applicable to the term loan B are, at our option, equal to either Eurodollar plus 1.75% or a base rate plus 0.75%.

1 unchanged sentence

We are required to pay a commitment fee of 0.5% per year on the undrawn portion available under the revolving credit facility and delayed draw term loan A, 1.75% per year on the undrawn portion available under the incremental revolving credit facility and variable fees on outstanding letters of credit.

For the delayed draw term loan A, we are required to make quarterly payments at a rate ranging from 0.625% of the original principal amount during the first three years to 1.25% during the last two years, with the balance due at maturity in October 2024.

For the term loan A, we are required to make quarterly payments increasing over time from $2.5 million to $5.0 million with the balance due at maturity in October 2024.

For the term loan B, we are required to make quarterly payments of $2.4 million with the balance due at maturity in October 2026.

1 unchanged sentence

We are also required to make mandatory prepayments of the loans under the amended credit agreement, subject to specified exceptions, from excess cash flow and with the proceeds of asset sales, debt issuances and specified other events.

There were no borrowings under the revolving credit facilities as of June 30, 2021 and we have not drawn down on the delayed draw term loan A.

Based on our outstanding letters of credit of $59.2 million, $970.8 million was available for future borrowings from our delayed draw term loan A and revolving credit facilities.

There were no borrowings under the revolving credit facilities as of September 30, 2021.

Based on our outstanding letters of credit of $58.7 million, $571.3 million was available for future borrowings from revolving credit facilities.

6.5% Senior Secured Notes Due 2027

In May 2020, we issued $1.2 billion principal amount of 6.5% senior secured notes due 2027.

Interest on the notes is payable semi-annually in cash in arrears on May 15 and November 15 of each year and will mature on May 15, 2027.

Interest on the notes is payable semi-annually in cash in arrears on May 15 and November 15 of each year and the notes will mature on May 15, 2027.

We may redeem some or all of the notes, at any time prior to May 15, 2023, at a price equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest to the date of redemption, plus a “make-whole” premium.

29 unchanged sentences

They also have financial covenants including minimum consolidated EBITDA to consolidated net interest payable, minimum consolidated cash flow to consolidated debt service, maximum consolidated debt to consolidated EBITDA and minimum liquidity, all as defined in the applicable debt agreements.

As of June 30, 2021, we believe we were in compliance with all of our debt covenants related to our senior secured credit facility and our corporate senior secured notes, senior notes and convertible senior notes.

As of September 30, 2021, we believe we were in compliance with all of our debt covenants related to our senior secured credit facility and our corporate senior secured notes, senior notes and convertible senior notes.

We expect to remain in compliance with all of these covenants throughout 2021.

1 unchanged sentence

All amounts related to the use of cash for acquisitions discussed in this section are presented net of any cash acquired.

During the six months ended June 30, 2021, we used $7.6 million of cash primarily for the acquisition of a venue in the United Kingdom.

During the six months ended June 30, 2020, we used $37.5 million of cash primarily for the acquisitions of a festival promotion business and a venue management business, both located in the United States.

During the nine months ended September 30, 2021, we used $19.6 million of cash primarily for the acquisition of a venue in the United Kingdom and an artist management business in the United States.

During the nine months ended September 30, 2020, we used $37.3 million of cash primarily for the acquisitions of a festival promotion business and a venue management business, both located in the United States.

As of the date of acquisition, the acquired businesses had a total of $71.1 million of cash on their balance sheets, primarily related to deferred revenue for future events.

6 unchanged sentences

Capital expenditures typically increase during periods when our venues are not in operation since that is the time that such improvements can be completed.

Our capital expenditures, including accruals for amounts incurred but not yet paid for, but net of expenditures funded by outside parties such as landlords and noncontrolling interest partners or replacements funded by insurance proceeds, consisted of the following:

Six Months Ended

Our capital expenditures, including accruals for amounts incurred but not yet paid for, but net of expenditures funded by outside parties such as landlords and noncontrolling interest partners or expenditures funded by insurance proceeds, consisted of the following:

Nine Months Ended

September 30,

(in thousands)

2 unchanged sentences

Total capital expenditures $ 104,598 $ 162,783

Maintenance capital expenditures during the first six months of 2021 decreased from the same period of the prior year primarily due to reductions for certain office facility and venue-related projects as part of our cash savings initiatives implemented in connection with the global COVID-19 pandemic.

Revenue generating capital expenditures during the first six months of 2021 decreased from the same period of the prior year primarily due to lower spending in our amphitheater venues and a reduction in technology-related projects as part of our cash savings initiatives implemented in connection with the global COVID-19 pandemic.

We currently expect capital expenditures to be approximately $170 million for the full year of 2021.

Six Months Ended

Maintenance capital expenditures during the first nine months of 2021 decreased from the same period of the prior year primarily due to reductions for certain office facility and technology-related projects as part of our cash savings initiatives implemented in connection with the global COVID-19 pandemic.

Revenue generating capital expenditures during the first nine months of 2021 decreased from the same period of the prior year primarily due to lower spending in our amphitheater venues and a reduction in technology-related projects as part of our cash savings initiatives implemented in connection with the global COVID-19 pandemic.

We currently expect capital expenditures to be approximately $185 million for the full year of 2021 as we have accelerated the timing of certain projects in the second half of the year in response to the reopening of our business.

Nine Months Ended

September 30,

(in thousands)

4 unchanged sentences

Operating Activities

Cash provided by operating activities was $1.2 billion for the six months ended June 30, 2021 as compared to cash used in operating activities of $390.4 million for the same period of the prior year primarily due to increases in accounts payable, client accounts and deferred revenue resulting from the resumption of events in the second quarter of 2021 along with a reduction of net loss year over year.

Cash provided by operating activities was $1.0 billion for the nine months ended September 30, 2021 as compared to cash used in operating activities of $956.9 million for the same period of the prior year primarily due to increases in accounts payable, client accounts and accrued expenses resulting from the resumption of events in certain markets late in the second quarter of 2021 along with a reduction of net loss year over year partially offset by increases in accounts receivable.

Investing Activities

Cash used in investing activities decreased $140.3 million for the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to less cash paid for capital expenditures, proceeds from the sale of investments in nonconsolidated affiliates, and fewer acquisitions.

Cash used in investing activities decreased $112.8 million for the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to less cash paid for capital expenditures, along with higher proceeds from the sale of investments in nonconsolidated affiliates partially offset by an increase in investments in nonconsolidated affiliates.

See “—Uses of Cash” above for further discussion.

Financing Activities

Cash provided by financing activities decreased $1.1 billion for the six months ended June 30, 2021 as compared to the same period of the prior year primarily due to higher net proceeds in 2020 from debt issuances partially offset by lower purchases of noncontrolling interests in 2021.

Cash provided by financing activities decreased $139.3 million for the nine months ended September 30, 2021 as compared to the same period of the prior year primarily due to higher net proceeds in 2020 from debt issuances partially offset by proceeds from the sale of common stock and lower purchases of noncontrolling interests in 2021.

See “—Sources of Cash” above for further discussion.

7 unchanged sentences

Currently, we do not have significant operations in hyper-inflationary countries.

Our foreign operations reported an operating loss of $160.2 million for the six months ended June 30, 2021.

We estimate that a 10% change in the value of the United States dollar relative to foreign currencies would change our operating loss for the six months ended June 30, 2021 by $16.0 million.

As of June 30, 2021, our most significant foreign exchange exposure included the Euro, British Pound, Australian Dollar and Canadian Dollar.

Our foreign operations reported an operating loss of $148.1 million for the nine months ended September 30, 2021.

We estimate that a 10% change in the value of the United States dollar relative to foreign currencies would change our operating loss for the nine months ended September 30, 2021 by $14.8 million.

As of September 30, 2021, our most significant foreign exchange exposure included the Euro, British Pound, Australian Dollar and Canadian Dollar.

This analysis does not consider the implication such currency fluctuations could have on the overall economic conditions of the United States or other foreign countries in which we operate or on the results of operations of our foreign entities.

2 unchanged sentences

We also may enter into forward currency contracts to minimize the risks and/or costs associated with changes in foreign currency rates on forecasted operating income.

At June 30, 2021, we had forward currency contracts outstanding with a notional amount of $43.4 million.

At September 30, 2021, we had forward currency contracts outstanding with a notional amount of $43.6 million.

Interest Rate Risk

Our market risk is also affected by changes in interest rates.

We had $5.5 billion of total debt, excluding debt discounts and issuance costs, outstanding as of June 30, 2021, of which $5.1 billion was fixed-rate debt and $0.4 billion was floating-rate debt.

Based on the amount of our floating-rate debt as of June 30, 2021, each 25-basis point increase or decrease in interest rates would increase or decrease our annual interest expense and cash outlay by approximately $1.0 million.

This potential increase or decrease is based on the simplified assumption that the level of floating-rate debt remains constant with an immediate across-the-board increase or decrease as of June 30, 2021 with no subsequent change in rates for the remainder of the period.

We had $5.8 billion of total debt, excluding debt discounts and issuance costs, outstanding as of September 30, 2021, of which $5.0 billion was fixed-rate debt and $0.8 billion was floating-rate debt.

Based on the amount of our floating-rate debt as of September 30, 2021, each 25-basis point increase or decrease in interest rates would increase or decrease our annual interest expense and cash outlay by approximately $2.0 million.

This potential increase or decrease is based on the simplified assumption that the level of floating-rate debt remains constant with an immediate across-the-board increase or decrease as of September 30, 2021 with no subsequent change in rates for the remainder of the period.

In January 2020, we entered into an interest rate swap agreement that is designated as a cash flow hedge for accounting purposes to effectively convert a portion of our floating-rate debt to a fixed-rate basis.

10 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2020 Annual Report on Form 10-K filed with the SEC on March 1, 2021.

There have been no changes to our critical accounting policies during the six months ended June 30, 2021.

There have been no changes to our critical accounting policies during the nine months ended September 30, 2021.

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis