Noted within the Live Nation Entertainment Inc. Q2 2020 Results:
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. As part of these cost reduction efforts, we have implemented salary reductions for most of our employees, with salaries for senior executives reduced by up to 50%. 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 have filed for payroll support under the Employee Retention Credit program established as part of the 2020 CARES Act and expect to receive additional support in the second half of the year. 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.
The company’s $432 million adjusted operating income (AOI) loss for the quarter was driven primarily by operational fixed costs of approximately $334 million, inclusive of approximately $60 million in benefits from various government payroll funding programs.
Live Nation Entertainment, Supplemental Operational & Financial Information (https://d1io3yog0oux5.cloudfront.net/_d6ab90581b6763b6c69e24e9b9d8513d/livenationentertainment/db/670/6151/supplemental_operational_and_financial_information/Q2+2020+Supplemental+Operational+and+Financial+Information%5B4%5D.pdf), Page 1.