THIRD QUARTER 2020
SUPPLEMENTAL OPERATIONAL AND FINANCIAL INFORMATION
** Information presented is as of November 5, 2020 unless otherwise indicated **
The company has further reduced all discretionary spending by another approximately $100 million, and has now lowered costs for 2020 by over $900 million and reduced its cash usage by approximately $1.5 billion, relative to the company's pre-Covid plans.
With the above reductions, the company has lowered the estimate on its operational cash burn rate to approximately $110 million per month and its gross burn rate to approximately $175 million per month, on average for the last nine months of 2020, and prior to the benefit of contribution margin generated by the business. Included in the gross burn estimate is approximately $40 million in severance expense estimated through year-end, which the company currently expects to generate over $200 million in annual run-rate savings.
The company's $319 million adjusted operating income loss for the third quarter of 2020 consisted of $337 million in operational cash burn, $50 million in other, non-cash, fixed costs, and $68 million of contribution margin, which included $73 million from operations, and other one-time items.
The company's $73 million in contribution margin from operations in the third quarter of 2020 includes its sponsorship business, where the company has been able to maintain 90% of the commitments that were in place at the end of February. The bulk of this sponsorship moved to 2021, but some of it was re-purposed into other assets, including streaming concerts.
The supplemental information provided above contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements regarding Live Nation's anticipated future operational and financial performance. Please refer to Live Nation's SEC filings (including its most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), available in the SEC Filings section of its website at investors.livenationentertainment.com, for a description of risks and uncertainties that could impact the actual results.