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The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements Registered number 00035668 31 May 2020 The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements 31 May 2020 Contents Group strategic report 1 Group directors’ report 5 Statement of directors’ responsibilities in respect of the annual report and the financial statements 8 Independent auditor’s report to the members of The Liverpool Football Club and Athletic Grounds Limited 9 Consolidated Profit and Loss Account and Other Comprehensive Income 12 Consolidated Balance Sheet 13 Company Balance Sheet 14 Consolidated Statement of Changes in Equity 15 Company Statement of Changes in Equity 16 Consolidated Statement of Cash Flows 17 Notes 18 The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements 31 May 2020 Group Strategic report The directors present their strategic report and financial statements of The Liverpool Football Club and Athletic Grounds Limited (“the Club” or “Company”) and its subsidiaries (together “the Group”) for the year ended 31 May 2020. Principal activities The Company is a wholly owned subsidiary of UKSV Holdings Company Limited, a company incorporated in the United Kingdom. The Company’s principal activity during the year continued to be those of a professional football club and related activities. Strategy The four key elements of the Group’s strategy are to: • Improve football performance through a positive playing style and strategic player investment; • Improve the scouting and player recruitment process; • Improve the fan experience and interaction with the Club; and • Leverage the Club’s global following to deliver profitable revenue growth. Review of the business On the football pitch the Club were in first place in the Premier League when the season was suspended on the 13 March 2020 and reached the last 16 of the 19/20 UEFA Champions League. The Premier League season was resumed on the 17 June 2020 and the Club went on to win the league for the 19th time in their history. During the reporting period the Club won the 18/19 UEFA Champions League for the 6th time in Madrid and won the FIFA Club World Cup and the UEFA Super Cup. Covid-19 Since March 2020, the Covid-19 pandemic has had a significant impact on the Club’s business, reducing opportunity to generate revenue and profit in the reported period. The main areas affected include all matchday revenue, through suspension of the 19/20 Premier League season, as well as a significant proportion of its non- matchday operations including Retail stores and the Tour and Museum centre. The results also include the impact of a reduction in broadcasting revenues as a result of an adjustment to the distribution from the Premier League. During the period, the Club has continually reviewed costs incurred, and prioritised the job security of all staff from its casual workforce to employees on fixed term and permanent contracts. There are a number of potential risks to the business as a result of Covid-19 and the Directors of the business continue to meet regularly to agree upon preventative measures to ensure the health and safety of all stakeholders. The Directors continue to monitor the financial projections of the Club on a regular basis, taking a proactive approach to short and long-term financial planning based on a range of possible scenarios. As the pandemic continues to develop the business continues to monitor government guidance and practices to make the business as safe as possible but the Directors anticipate the Club’s business will be impacted through the coming season as a minimum. Profit and Loss Account Turnover for the year ended 31 May 2020 was £489.9 million (2019: £533.0 million). Media revenue for the year ended 31 May 2020 was £201.6 million (2019: £260.8 million). The decrease in revenue related to the Premier League extending the 19/20 season to finish in July 2020 as a result of the global Covid-19 pandemic. 1 The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements 31 May 2020 Group Strategic report (continued) Review of the business (continued) Match day revenue for the year ended 31 May 2020 was £70.9 million (2019: £84.2 million). The decrease in matchday revenue was due to four fewer Premier League home games taking place during the period and two fewer Champions League games in comparison with the previous year. Commercial revenue for the year ended 31 May 2020 was £217.4 million (2019: £188.0 million). The increase mainly related to a significant uplift in both sponsorship and merchandising revenue. Administrative expenses for the year ended 31 May 2020 were £496.9 million (2019: £484.4 million). The increase mainly related to higher player salary and player amortisation costs during the period. The profit on the disposal of player registrations for the year ended 31 May 2020 was £26.9 million (2019: £45.2 million). Interest payable for the year ended 31 May 2020 was £3.7 million (2019: £5.0 million). The loss before taxation for the year ended 31 May 2020 was £46.3 million (2019: £41.9 million profit). Balance Sheet Intangible fixed assets have decreased from £370.7 million at 31 May 2019 to £290.2 million at 31 May 2020. The main element of this is the player registration movement from a net book value of £369.2 million at 31 May 2019 to £290.0 million at 31 May 2020. This is as a result of player acquisitions of £29.3 million offset by the net book value of disposals of £2.5 million and amortisation of £106.0 million. There has been a decrease in other intangible assets of £1.3 million in relation to the amortisation of goodwill. Tangible fixed assets have increased from £192.3 million at 31 May 2019 to £216.8 million at 31 May 2020. The main element of this increase relates to the significant investment in the build of the new Training Ground Facility in Kirkby and also includes the impact of selling the Melwood Training site in August 2019 to Torus, a local housing provider. Net bank debt after deferred loan costs has increased by £35.7 million from £12.0 million at 31 May 2019 to £47.7 million at 31 May 2020. Intercompany debt has decreased by £7.9 million from £79.3 million at 31 May 2019 to £71.4 million at 31 May 2020. 2 The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements 31 May 2020 Group Strategic report (continued) Key performance indicators The principal key performance indicators for the financial year were as follows: Non-financial • Performance against target of continued qualification for the Champions League • Attendance versus capacity • Performance of all squads Financial • Revenue • Payroll costs • EBITDA (Earnings before interest, tax, depreciation, and amortisation) • Cash flow • Player trading • Capital expenditure Principal risks and uncertainties The Board acknowledges there are risks that affect the Group and action is taken to minimise the risks. These risks include the current Covid-19 pandemic and the ongoing Brexit negotiations for which the directors continue to monitor and assess the impact of. The directors consider the principal risks and uncertainties associated with running a professional football Club such as Liverpool Football Club to be the player transfer market and wage levels, attendance levels, and revenues from broadcasting contracts and football competitions. An area of focus is the player transfer market and wage costs, and the aim is to manage these costs within financial constraints, whilst remaining as competitive as possible. Development of the Club’s commercial revenue continues, and the Board is mindful that continued success on the field is paramount to this development. Regular meetings are held internally at the Club on the latest risks and financial and commercial issues, including health and safety updates. Financial risk management objectives and policies An explanation of the Group’s exposure to liquidity and cash flow risk, currency risk and credit risk is given in note 19 of the financial statements. Directors’ statement of responsibilities under section 172 Companies Act 2006 The Directors understand their duty to promote the success of the Group for the benefits of its members while considering the Group’s long-term decisions and the impacts on, and views of, the wider stakeholder groups. The main stakeholders of the business include fans, employees, sponsors, suppliers, lenders, football authorities and owners. For the Group success means the performance of the team on the pitch and the long-term increase in the value of the Group stakeholders whilst also having regard to a number of broader factors, including the impact of the Group’s operations on the community and the environment and the likely consequences of decisions in the long term. The Directors continue to consider each of the sub-sections of s.172 during the year: • The likely consequences of any decision in the long-term • The need to foster the Group’s relationships with supporters, suppliers, customers, and others • The impact of the Group’s operations on the community and environment • The desirability of the Group maintaining a reputation for high standards of business conduct • The need to act fairly between members of the Group • The interest of the Group’s employees 3 The Liverpool Football Club and Athletic Grounds Limited Annual report and consolidated financial statements 31 May 2020 Group Strategic report (continued) Directors’ statement of responsibilities under section 172 Companies Act 2006 (continued) The Directors understand that the strength of the business is built on the hard work and dedication of all its employees, with the Club providing an environment where opportunities exist for employees to realise their potential in a working environment where they can succeed.

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