lyv-20200331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

Form 10-Q

____________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-32601

____________________________________

LIVE NATION ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

____________________________________


Delaware						20-3247759
(State of Incorporation)						(I.R.S. Employer Identification No.)

9348 Civic Center Drive

Beverly Hills, CA 90210

(Address of principal executive offices, including zip code)

(310) 867-7000

(Registrant’s telephone number, including area code)

______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $.01 Par Value Per Share

LYV

New York Stock Exchange

(Includes Preferred Stock Purchase Rights)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

On April 30, 2020, there were 215,260,098 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 3,791,989 shares of unvested restricted and deferred stock awards and excluding 408,024 shares held in treasury.

LIVE NATION ENTERTAINMENT, INC.

INDEX TO FORM 10-Q


		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Consolidated Balance Sheets (Unaudited) as of March 31, 2020 and December 31, 2019	2
	Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2020 and 2019	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2020 and 2019	4
	Consolidated Statements of Changes in Equity (Unaudited) for the three months ended March 31, 2020 and 2019	5
	Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2020 and 2019	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 5.	Other Information	44
Item 6.	Exhibits	44


GLOSSARY OF KEY TERMS
AOCI			Accumulated other comprehensive income (loss)
AOI			Adjusted operating income (loss)




FASB			Financial Accounting Standards Board
GAAP			United States Generally Accepted Accounting Principles

Live Nation			Live Nation Entertainment, Inc. and subsidiaries


SEC			United States Securities and Exchange Commission
Ticketmaster			Our ticketing business

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	March 31, 2020		December 31, 2019
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	3,269,863	$	2,470,362
Accounts receivable, less allowance of $51,555 and $50,516, respectively	759,432		994,606
Prepaid expenses	736,369		667,044
Restricted cash	11,848		3,880
Other current assets	73,513		57,007
Total current assets	4,851,025		4,192,899
Property, plant and equipment, net	1,128,169		1,117,932
Operating lease assets	1,405,018		1,402,019
Intangible assets
Definite-lived intangible assets, net	905,904		870,141
Indefinite-lived intangible assets	368,773		368,954
Goodwill	1,999,979		1,998,498
Long-term advances	749,602		593,699
Other long-term assets	452,974		431,473
Total assets	$	11,861,444	$	10,975,615
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, client accounts	$	907,555	$	1,005,888
Accounts payable	87,840		100,237
Accrued expenses	1,229,321		1,391,486
Deferred revenue	2,273,494		1,391,032
Current portion of long-term debt, net	36,036		37,795
Current portion of operating lease liabilities	121,983		121,950
Other current liabilities	73,827		59,211
Total current liabilities	4,730,056		4,107,599
Long-term debt, net	3,651,019		3,271,262
Long-term operating lease liabilities	1,380,192		1,374,481
Long-term deferred income taxes	178,535		178,173
Other long-term liabilities	247,204		130,648
Commitments and contingent liabilities
Redeemable noncontrolling interests	443,606		449,498
Stockholders' equity
Common stock	2,118		2,113
Additional paid-in capital	2,260,509		2,245,619
Accumulated deficit	(1,137,082)		(949,334)
Cost of shares held in treasury	(6,865)		(6,865)
Accumulated other comprehensive loss	(259,326)		(145,713)
Total Live Nation stockholders' equity	859,354		1,145,820
Noncontrolling interests	371,478		318,134
Total equity	1,230,832		1,463,954
Total liabilities and equity	$	11,861,444	$	10,975,615

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended March 31,
	2020		2019

	(in thousands except share and per share data)
Revenue	$	1,365,693	$	1,727,828
Operating expenses:
Direct operating expenses	873,820		1,151,604
Selling, general and administrative expenses	514,021		464,866
Depreciation and amortization	122,080		98,912
Loss (gain) on disposal of operating assets	130		(147)
Corporate expenses	28,312		36,456
Operating loss	(172,670)		(23,863)
Interest expense	43,999		36,515

Interest income	(4,473)		(2,548)
Equity in earnings of nonconsolidated affiliates	(2,572)		(3,144)
Other expense (income), net	4,628		(3,403)
Loss before income taxes	(214,252)		(51,283)
Income tax expense (benefit)	(3,330)		3,958
Net loss	(210,922)		(55,241)
Net loss attributable to noncontrolling interests	(26,138)		(2,797)
Net loss attributable to common stockholders of Live Nation	$	(184,784)	$	(52,444)

Basic and diluted net loss per common share available to common stockholders of Live Nation	$	(0.94)	$	(0.31)


Weighted average common shares outstanding:
Basic and diluted	211,048,294		208,908,323



Reconciliation to net loss available to common stockholders of Live Nation:
Net loss attributable to common stockholders of Live Nation	$	(184,784)	$	(52,444)
Accretion of redeemable noncontrolling interests	(14,540)		(12,312)
Net loss available to common stockholders of Live Nation—basic and diluted	$	(199,324)	$	(64,756)

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


	Three Months Ended March 31,
	2020		2019
	(in thousands)
Net loss	$	(210,922)	$	(55,241)
Other comprehensive loss, net of tax:
Unrealized loss on cash flow hedge	(30,831)		—
Foreign currency translation adjustments	(82,782)		(2,889)
Comprehensive loss	(324,535)		(58,130)
Comprehensive loss attributable to noncontrolling interests	(26,138)		(2,797)
Comprehensive loss attributable to common stockholders of Live Nation	$	(298,397)	$	(55,333)

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


	Live Nation Stockholders’ Equity
	Common Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Cost of Shares Held in Treasury		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	(in thousands, except share data)																	(in thousands)
Balances at December 31, 2019	211,262,062	$	2,113	$	2,245,619	$	(949,334)	$	(6,865)	$	(145,713)	$	318,134	$	1,463,954	$	449,498
Cumulative effect of change in accounting principle	—	—		—		(2,964)		—		—		—		(2,964)		—
Non-cash and stock-based compensation	—	—		11,741		—		—		—		—		11,741		—
Common stock issued under stock plans, net of shares withheld for employee taxes	262,170	2		(7,448)		—		—		—		—		(7,446)		—
Exercise of stock options	310,507	3		6,453		—		—		—		—		6,456		—
Fair value of convertible debt conversion feature, net of issuance cost	—	—		33,330		—		—		—		—		33,330		—
Acquisitions	—	—		—		—		—		—		31,165		31,165		11,148

Purchases of noncontrolling interests	—	—		(6,485)		—		—		—		(1,032)		(7,517)		(6,411)
Sales of noncontrolling interests	—	—		(8,161)		—		—		—		39,161		31,000		—
Redeemable noncontrolling interests fair value adjustments	—	—		(14,540)		—		—		—		—		(14,540)		14,540
Contributions received	—	—		—		—		—		—		76		76		—
Cash distributions	—	—		—		—		—		—		(4,768)		(4,768)		(10,345)
Other	—	—		—		—		—		—		56		56		—
Comprehensive loss:
Net loss	—	—		—		(184,784)		—		—		(11,314)		(196,098)		(14,824)
Unrealized loss on cash flow hedge	—	—		—		—		—		(30,831)		—		(30,831)		—
Foreign currency translation adjustments	—	—		—		—		—		(82,782)		—		(82,782)		—
Balances at March 31, 2020	211,834,739	$	2,118	$	2,260,509	$	(1,137,082)	$	(6,865)	$	(259,326)	$	371,478	$	1,230,832	$	443,606

See Notes to Consolidated Financial Statements

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	Live Nation Stockholders’ Equity
	Common Shares Issued	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Cost of Shares Held in Treasury		Accumulated Other Comprehensive Income		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	(in thousands, except share data)																	(in thousands)
Balances at December 31, 2018	209,135,581	$	2,091	$	2,268,209	$	(1,019,223)	$	(6,865)	$	(145,231)	$	243,762	$	1,342,743	$	329,355
Non-cash and stock-based compensation	—	—		13,238		—		—		—		—		13,238		—
Common stock issued under stock plans, net of shares withheld for employee taxes	252,634	3		(9,303)		—		—		—		—		(9,300)		—
Exercise of stock options	469,601	5		7,667		—		—		—		—		7,672		—

Acquisitions	—	—		—		—		—		—		974		974		6,981

Purchases of noncontrolling interests	—	—		270		—		—		—		(270)		—		(1,459)

Redeemable noncontrolling interests fair value adjustments	—	—		(12,312)		—		—		—		—		(12,312)		12,312

Cash distributions	—	—		—		—		—		—		(45,943)		(45,943)		(3,941)
Other	—	—		(8)		—		—		—		(1,184)		(1,192)		2,425
Comprehensive loss:
Net loss	—	—		—		(52,444)		—		—		(153)		(52,597)		(2,644)
Foreign currency translation adjustments	—	—		—		—		—		(2,889)		—		(2,889)		—
Balances at March 31, 2019	209,857,816	$	2,099	$	2,267,761	$	(1,071,667)	$	(6,865)	$	(148,120)	$	197,186	$	1,240,394	$	343,029

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three Months Ended March 31,
	2020		2019
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(210,922)	$	(55,241)
Reconciling items:
Depreciation	57,844		51,672
Amortization	64,236		47,240
Amortization of non-recoupable ticketing contract advances	18,811		17,237



Non-cash compensation expense	11,732		13,205





Other, net	(11,376)		3,150
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in accounts receivable	227,913		(90,637)
Increase in prepaid expenses and other assets	(207,157)		(312,032)

Decrease in accounts payable, accrued expenses and other liabilities	(316,204)		(44,915)
Increase in deferred revenue	996,798		839,371
Net cash provided by operating activities	631,675		469,050
CASH FLOWS FROM INVESTING ACTIVITIES
Advances of notes receivable	(10,688)		(4,037)
Collections of notes receivable	10,218		1,078


Purchases of property, plant and equipment	(84,563)		(57,136)

Cash paid for acquisitions, net of cash acquired	(32,508)		(9,882)

Other, net	(4,830)		(14,893)
Net cash used in investing activities	(122,371)		(84,870)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt issuance costs	419,418		557
Payments on long-term debt	(6,032)		(13,573)

Distributions to noncontrolling interests	(15,114)		(49,884)
Purchases and sales of noncontrolling interests, net	(14,030)		(1,463)




Other, net	(1,820)		(7,128)
Net cash provided by (used in) financing activities	382,422		(71,491)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(84,257)		(6,700)
Net increase in cash, cash equivalents, and restricted cash	807,469		305,989
Cash, cash equivalents and restricted cash at beginning of period	2,474,242		2,378,203
Cash, cash equivalents and restricted cash at end of period	$	3,281,711	$	2,684,192

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

Preparation of Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, they include all normal and recurring accruals and adjustments necessary to present fairly the results of the interim periods shown.

The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Annual Report on Form 10-K filed with the SEC on February 27, 2020.

Seasonality

Due to the seasonal nature of shows at outdoor amphitheaters and festivals, which primarily occur from May through October, our Concerts and Sponsorship & Advertising segments experience higher revenue during the second and third quarters. Due to the unprecedented stoppage of our concert events globally in mid-March due to the global COVID-19 pandemic, we do not expect that any quarter in 2020 will follow our typical seasonality trend. Our Ticketing segment’s revenue is impacted by fluctuations in the availability of events for sale to the public, which vary depending upon scheduling by its clients. Our seasonality also results in higher balances in cash and cash equivalents, accounts receivable, prepaid expenses, accrued expenses and deferred revenue at different times in the year. Because of these factors, the results to date are not necessarily indicative of the results expected for the full year.

Cash, Cash Equivalents and Restricted Cash

Included in the March 31, 2020 and December 31, 2019 cash and cash equivalents balance is $841.5 million and $837.7 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges, which amounts are to be remitted to these clients.

Restricted cash primarily consists of cash held in escrow accounts to fund capital improvements of certain leased or operated venues. The cash is held in these accounts pursuant to the related lease or operating agreement.

Acquisitions

During the first three months of 2020, we completed several acquisitions that were accounted for as business combinations under the acquisition method of accounting. When we make these acquisitions, we often acquire a controlling interest without buying 100% of the business. These acquisitions were not significant either on an individual basis or in the aggregate.

Income Taxes

Each reporting period, we evaluate the realizability of all of our deferred tax assets in each tax jurisdiction. As of March 31, 2020, we continued to maintain a full valuation allowance against our net deferred tax assets in certain jurisdictions due to cumulative pre-tax losses. As a result of the valuation allowances, no tax benefits have been recognized for losses incurred, if any, in those tax jurisdictions for the first three months of 2020 and 2019.

Accounting Pronouncements - Recently Adopted

In June 2016, the FASB issued guidance that replaces the current incurred loss impairment model of recognizing credit losses with an expected loss model for financial assets measured at amortized cost. The guidance is effective for annual periods beginning after December 15, 2019 and interim periods within that year. The guidance is to be applied through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We adopted this standard on January 1, 2020, and recorded a $3.0 million cumulative-effect adjustment to accumulated deficit in the consolidated balance sheet. The adoption is not expected to have a material effect on our future financial position or results of operations.

In August 2018, the FASB issued guidance that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amortization period of these implementation costs would include periods covered under renewal options that are reasonably certain to be exercised. The expense related to the capitalized implementation costs also would be presented in the same financial statement line item as the hosting fees. The guidance is effective for annual periods beginning after December 15, 2019 and interim periods within that year. The guidance should be applied either retrospectively

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or prospectively to all implementation costs incurred after the date of adoption. We adopted this guidance prospectively on January 1, 2020. Adoption of this guidance resulted in expense that would have previously been reported as depreciation and amortization to be reported as selling, general and administrative expenses or corporate expenses within our statements of operations going forward. In addition, implementation costs previously recorded as property, plant and equipment, net will now be reported as prepaid expenses and other long-term assets on our balance sheets, prospectively.

NOTE 2—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 live event business. We initially saw event restrictions in Asia and parts of Europe. Beginning in March, 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 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 revenues and financial position.

Operating Results

Our first quarter results were materially impacted by these necessary actions. Our overall revenue for the quarter decreased by 21% to $1.4 billion. The revenue reduction was largely in our Concerts and Ticketing segments as a result of no shows occurring globally in the last half of March and a considerable slowing of ticket sales for future shows during the same period, along with the impact of ticket refunds and show cancellations. We estimate the lost revenue impact from COVID-19 in the first quarter of 2020 to be approximately $435 million. Our operating loss for the quarter increased as compared to the first quarter of 2019 largely due to the COVID-19 impacts to our Concerts and Ticketing businesses, totaling approximately $175 million, including $10.1 million of definite-lived intangible assets impairment charges.

The revenue recognized in our Concerts segment in the first quarter of 2020 included the results of all the shows that occurred prior to the stoppage of events in mid-March. Our event-related deferred revenue for Concerts, which is reported as part of deferred revenue on our consolidated balance sheets, includes the face value and Concerts’ share of service charges for all tickets sold by March 31, 2020, for shows expected to occur in the next 12 months. Any refunds committed to for shows cancelled or rescheduled during the first quarter have either been returned to fans or are reflected in accrued expenses on the consolidated balance sheets. We have not recorded an estimate for refunds that may occur in the future since we have never experienced a global shutdown of live events and are unable to estimate it. We expect that the majority of our shows postponed due to the pandemic will be rescheduled. Any ticket proceeds for shows expected to occur after March 31, 2021 are reflected in other long-term liabilities on our consolidated balance sheets.

As of March 31, 2020, we had sold over 45 million tickets to shows scheduled for 2020, down 2% from the same time last year, net of cancelled shows and shows rescheduled into 2021. By the end of the first quarter of 2020, we had processed cancellations on 1,500 concerts impacted by the event stoppage starting in mid-March of this year, equating to 1.6 million tickets. Another 6,800 shows equating to approximately 13.4 million tickets had been postponed and were in the process of being rescheduled.

The revenue recognized in our Ticketing segment in the first quarter of 2020 includes our share of ticket service charges for tickets sold during the period for third-party clients and for shows that occurred in the quarter for our Concerts business where our promoters control the ticketing. Revenue in the period has been reduced by refunds given during the quarter. In addition, revenue has been reduced for any shows that were cancelled both during the quarter and up to the time of the filing of these financial statements, and funds have either been returned to the customer or are reflected in accrued expenses on the consolidated balance sheets. Our ticketing clients determine if shows will be rescheduled or cancelled and what the refund policy will be for those shows. We have not recorded an estimate for refunds that may occur in the future since we have never experienced a global shutdown of live events and because our clients, not Ticketmaster, determine when shows are cancelled or rescheduled so we are unable to estimate it.

By the end of the first quarter of 2020 and through the time of this filing, Ticketing had processed or accrued for cancellations or refunds on 7.2 million tickets.

For events that are cancelled, our standard policy is to refund the fan within 30 days days, though subject to regulations in various markets and in some cases at the discretion of venue or event organizer clients. Our ticket refund policies for rescheduled shows vary by ticketing client and country. In multiple international markets, including Germany, Italy and Belgium, government regulations which allow for the issuance of vouchers in place of cash refunds for rescheduled shows, and in some cases for cancelled shows, have been put in place or drafted. The volume and pace of cash refunds could have a material negative effect on our liquidity and capital resources.

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The length and severity of the reduction in live events due to the pandemic is uncertain; accordingly, we expect the negative impact to continue through the second quarter of 2020. While we are planning for a modest recovery in demand later in the second half of 2020, the exact timing and pace of the recovery is uncertain given the significant impact of the pandemic on the overall United States and global economies. We believe the ongoing effects of COVID-19 on our operations have had, and will continue to have a material negative impact on our financial results and liquidity, and such negative impact may continue beyond the containment of such outbreak. We have never previously experienced a complete cessation of our live events and unprecedented reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of such a cessation is uncertain and we are unable to estimate the impact on our business, financial condition or near- or longer-term financial or operational results.

Cash and available liquidity

We amended our senior secured credit agreement in April 2020 which will, among other things, suspend our net leverage covenant under our existing senior secured credit agreement for the second and third quarters of 2020, while adding a liquidity test for those quarters. Commencing with the fourth quarter of 2020, through the second quarter of 2021, the net leverage covenant will be calculated by substituting consolidated EBITDA, as defined in the credit agreement, from the second and third quarters of 2020 with consolidated EBITDA from the second and third quarters of 2019. As a result, this amendment will eliminate the use of consolidated EBITDA from the second and third quarters of 2020 in any net leverage covenant test, allowing us the flexibility to manage our business through the disruption we will experience in 2020.

In addition, we added a new incremental revolving credit facility of $130 million, extending our undrawn debt capacity. Following this increase, we have approximately $963 million in available debt capacity, including $400 million in undrawn term loan A capacity and $563 million in available revolver capacity, net of outstanding letters of credit. We will continue to evaluate future financing opportunities to further expand liquidity at reasonable costs.

As of March 31, 2020, our total cash and cash equivalents balance was $3.3 billion, which included $842 million of ticketing client cash. This cash, net of client cash, together with our now available debt capacity of $963 million, we believe 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 timing of shows in 2020 and expected substantial volume of on-sales for 2021 shows in the second half of this year, we expect this number to remain above seasonally normal levels throughout this year.

Event-related deferred revenue consists of cash held by our Concerts business for future shows, with roughly half the funds associated with upcoming shows in the United States and half for international shows as of March 31, 2020. 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 launched a number of initiatives to reduce fixed costs and conserve cash. As part of these cost reduction efforts, we have implemented salary reductions, with salaries for senior executives reduced by up to 50%, and our CEO voluntarily forgoing 100% of his salary for the duration of the salary reduction program. Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.

We are also making full use of government support programs globally. In most European and Asian markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there are robust payroll support programs to mitigate a substantial portion of employee costs. Additionally, in the United States, we expect to receive payroll support under the Employee Retention Credit program established as part of the 2020 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, we are targeting $600 million in cost reductions in 2020 and the elimination or deferral into 2021 of $1.0 billion in cash outflows. We believe this aggressive cost and cash management program, combined with a strong liquidity profile, positions us to manage through the COVID-19 related hold on show activity and provides the flexibility to scale-up quickly when shows restart.

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

Health and Safety and Planning for a Return to Business

We are currently planning 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 consensus that it is safe to do so, and then in appropriate numbers with expanded cleaning and social distancing protocols. Similarly, we are planning for the resumption of concerts when the time is right. We will let the facts and science tell us when we should start putting on concerts again. We recognize the experience at our venues will change when concerts start back up, and are working with medical experts and public health officials to keep people safe while enjoying our shows. Recent fan surveys indicate that the demand will be there when the shows return, with over 90% of fans expecting to attend concerts again once the pandemic is over. We expect the re-opening of concerts will happen on a market by market basis, and given we operate in 40 countries globally, the timelines will vary from relatively soon to not for several months or beyond.

While this temporary 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 once business resumes. Twenty years of global growth demonstrates the resilience of fan demand for the live entertainment experience. We are actively taking steps to ensure that when it is safe for us to do so, we will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to.

NOTE 3—LONG-LIVED ASSETS

We reviewed our long-lived assets for potential impairment due to the temporary suspension of our concert events resulting from the global COVID-19 pandemic. Our venues are either owned or provide long-term operating rights under lease or management agreements with terms ranging from five to twenty-five years. Many of our definite-lived intangible assets are based on revenue-generating contracts, and client or vendor relationships associated with live events and have useful lives, established at the time of acquisition, ranging from 3 to 10 years. Our more significant investments in nonconsolidated affiliates are in the concert event promotion, venue operation or ticketing businesses and are experiencing similar impacts to their operations. Based on our assessments, we have recorded impairment charges on certain of our definite-lived intangible assets which are discussed below.

We expect that concerts will resume in the second half of the year and that the underlying business supporting all of our long-lived assets will begin generating operating income once again. However, we have never previously experienced a complete cessation of our live events and unprecedented reduction in the number of events selling tickets, and as a consequence, our ability to be predictive regarding the impact of such a cessation is uncertain. As a result, the underlying assumptions used in our impairment assessments could change resulting in future impairment charges.

Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following:


	March 31,		December 31,
	2020		2019
	(in thousands)
Land, buildings and improvements	$	1,204,678	$	1,181,876
Computer equipment and capitalized software	817,022		800,990
Furniture and other equipment	415,349		380,174
Construction in progress	148,853		176,275
	2,585,902		2,539,315
Less accumulated depreciation	1,457,733		1,421,383
	$	1,128,169	$	1,117,932

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Definite-lived Intangible Assets

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the three months ended March 31, 2020:


	Revenue- generating contracts		Client / vendor relationships		Trademarks and naming rights		Venue management & Leaseholds		Technology		Other ⁽¹⁾		Total
	(in thousands)
Balance as of December 31, 2019:
Gross carrying amount	$	700,557	$	527,490	$	152,935	$	149,586	$	87,338	$	25,219	$	1,643,125
Accumulated amortization	(402,022)		(203,361)		(56,416)		(42,699)		(54,220)		(14,266)		(772,984)
Net	298,535		324,129		96,519		106,887		33,118		10,953		870,141
Gross carrying amount:
Acquisitions—current year	35,808		94,576		160		8,785		112		94		139,535
Acquisitions—prior year	(228)		—		—		(230)		—		—		(458)

Foreign exchange	(19,843)		(23,275)		(5,937)		(3,457)		(1,219)		(314)		(54,045)
Other ⁽²⁾	(12,198)		(83,255)		—		(820)		(1,409)		(1,344)		(99,026)
Net change	3,539		(11,954)		(5,777)		4,278		(2,516)		(1,564)		(13,994)
Accumulated amortization:
Amortization	(27,428)		(20,097)		(4,169)		(4,283)		(6,462)		(1,797)		(64,236)

Foreign exchange	4,786		6,562		991		1,361		1,012		260		14,972
Other ⁽²⁾	12,198		83,255		1		820		1,399		1,348		99,021
Net change	(10,444)		69,720		(3,177)		(2,102)		(4,051)		(189)		49,757
Balance as of March 31, 2020:
Gross carrying amount	704,096		515,536		147,158		153,864		84,822		23,655		1,629,131
Accumulated amortization	(412,466)		(133,641)		(59,593)		(44,801)		(58,271)		(14,455)		(723,227)
Net