Live Nation Entertainment Reports First Quarter 2013 Financial Results - First Quarter Revenue up 6% and Concert Attendance up 12% -

LOS ANGELES, May 7, 2013 /PRNewswire/ -- Live Nation Entertainment (NYSE: LYV) today released financial results for the three months ended March 31, 2013. 

"We are pleased with our first quarter revenue growth of 6% as compared to last year, driven by a 12% increase in concert attendance.  This good start to the year reaffirms the strength and stability of our platforms heading into 2013, and through April 2013, our concert ticket sales for all events this year are up 26% and Ticketmaster ticket counts for events in 2013 are up 8% relative to this point last year," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.  "These ticket volumes, along with the progress on our strategic initiatives across Concerts, Sponsorship & Advertising and Ticketing give us even greater confidence we will deliver our overall growth plans for 2013."

The company will webcast a teleconference today at 5:00 p.m. Eastern Time to discuss its financial performance.  Interested parties should visit the Investor Relations section of the company's website at www.livenation.com/investors to register for the webcast.  Supplemental statistical and financial information provided on the call, if any, will be available under the same link.  A replay of the webcast will also be available on the Live Nation website.





FINANCIAL HIGHLIGHTS – 1st QUARTER

($ in millions)






Q1 2013

Q1 2012

Growth

Revenue




Concerts

$    513.5

$    448.7

14.4%

Ticketing

325.1

326.5

(0.4%)

Artist Nation

50.3

61.4

(18.1%)

Sponsorship & Advertising

40.1

36.1

11.1%

Other & Eliminations

(5.3)

(4.7)

(12.8%)


$   923.7

$     868.0

6.4%





Adjusted Operating Income (Loss)




Concerts

$       (13.1)

$      (25.0)

47.6%

Ticketing

59.6

72.6

(17.9%)

Artist Nation

(1.1)

(3.0)

63.3%

Sponsorship & Advertising

23.8

20.7

15.0%

Other & Eliminations

0.7

(1.2)

**

Corporate

(17.0)

(15.9)

(6.9%)


$     52.9

$    48.2

9.8%





Operating Income (Loss)




Concerts

$     (39.8)

$     (55.0)

27.6%

Ticketing

15.4

32.3

(52.3%)

Artist Nation

(11.0)

(15.0)

26.7%

Sponsorship & Advertising

23.5

20.6

14.1%

Other & Eliminations

1.0

(1.3)

**

Corporate

(22.3)

(24.4)

8.6%


$    (33.2)

$   (42.8)

22.4%





 ** percentages are not meaningful

As of March 31, 2013, total cash and cash equivalents were $1.2 billion, which includes $441 million in ticketing client cash and $302 million in free cash.  Event-related deferred revenue was $774 million as of March 31, 2013, compared to $613 million as of the same date in 2012.  Free cash flow was $14 million for the first quarter of 2013 as compared to $24 million in the first quarter of last year due to tax refunds received in the first quarter of 2012.

About Live Nation Entertainment:

Live Nation Entertainment is the world's leading live entertainment company comprised of four market leaders: Ticketmaster.com, Live Nation Concerts, Artist Nation Management and Live Nation Media/Sponsorship.  For additional information, visit www.livenation.com/investors.

Follow us @twitter.com/LiveNationInc

 

LIVE NATION ENTERTAINMENT, INC.

 

KEY OPERATING METRICS



















 Three Months Ended  





 March 31,  





2013


2012








Concerts (1)





Estimated Events:






North America

3,258


3,205



International

1,622


1,600




     Total estimated events

4,880


4,805


Estimated Attendance (rounded):






North America

5,056,000


4,360,000



International

3,043,000


2,851,000




     Total estimated attendance

8,099,000


7,211,000








Ticketing (2)





Number of tickets sold (in thousands):






Concerts

16,672


16,808



Sports

8,521


8,806



Arts and theater

4,264


4,818



Family

4,570


4,527



Other (3)

1,721


1,751





35,748


36,710









Gross value of tickets sold (in thousands)

$2,181,851


$2,220,199








Sponsorship & Advertising





Sponsorship revenue (in thousands)

$28,253


$25,717


Online advertising revenue (in thousands)

$11,894


$10,411








(1)

Events generally represent a single performance by an artist.  Attendance generally represents the number of fans who were present at an event.  Festivals are counted as one event in the quarter in which the festival begins but attendance is split over the days of the festival and can be split between quarters.  Events and attendance metrics are estimated each quarter.



(2)

The number and gross value of tickets sold includes primary tickets only and excludes tickets sold for the 2012 Olympics.  These metrics include tickets sold during the period regardless of event timing except for our promoted events in our owned and/or operated buildings and in certain European territories where these tickets are recognized as the events occur.  The total number of tickets sold for the three months ended March 31, 2013 and 2012 excludes 28 million and 31 million tickets sold, respectively, through our venue clients' box offices for which we do not receive a fee.



(3)

Other category includes tickets for comedy shows, facility tours, donations, lectures, seminars and cinemas.

 


LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)













 Three Months Ended  



 March 31, 



2013


2012



 (in thousands except share and per share data) 






Revenue


$        923,698


$        867,997

Operating expenses:





   Direct operating expenses


576,934


538,714

   Selling, general and administrative expenses


279,522


268,135

   Depreciation and amortization


82,165


79,713

   Gain on sale of operating assets


(3,597)


(288)

   Corporate expenses


20,655


23,217

   Acquisition transaction expenses


1,208


1,309

       Operating loss


(33,189)


(42,803)






Interest expense


28,151


29,710

Interest income


(1,768)


(900)

Equity in earnings of nonconsolidated affiliates


(2,582)


(3,881)

Other expense (income), net


3,638


(1,782)

Loss before income taxes


(60,628)


(65,950)

Income tax expense 


3,559


4,278

Net loss


(64,187)


(70,228)

Net loss attributable to noncontrolling interests 


(948)


(1,078)

Net loss attributable to common stockholders of 





   Live Nation Entertainment, Inc.


$         (63,239)


$         (69,150)






Basic and diluted net loss per common share attributable to common stockholders of Live Nation Entertainment, Inc. 


$             (0.33)


$             (0.37)






Basic and diluted weighted average common shares outstanding


188,827,190


186,521,520

 

 

 




LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED BALANCE SHEETS

(unaudited)





March 31,

December 31,


2013

2012


(in thousands)

ASSETS


Current assets



Cash and cash equivalents

$       1,246,415

$    1,001,055

Accounts receivable, less allowance of $20,276 and $19,794, respectively

486,173

415,790

Prepaid expenses

537,246

359,936

Other current assets

49,935

36,031

Total current assets

2,319,769

1,812,812

Property, plant and equipment



Land, buildings and improvements

823,767

852,175

Computer equipment and capitalized software

354,171

338,919

Furniture and other equipment

197,330

200,743

Construction in progress

53,538

56,822





1,428,806

1,448,659

Less accumulated depreciation

727,493

726,873





701,313

721,786

Intangible assets



Definite-lived intangible assets, net

683,052

724,463

Indefinite-lived intangible assets

375,900

377,463

Goodwill

1,328,348

1,357,827

Investments in nonconsolidated affiliates

47,730

46,160

Other long-term assets

232,171

250,295




Total assets

$    5,688,283

$   5,290,806




LIABILITIES AND EQUITY



Current liabilities



Accounts payable, client accounts

$       609,848

$      557,953

Accounts payable

103,359

102,718

Accrued expenses

572,312

626,723

Deferred revenue

890,755

402,002

Current portion of long-term debt

61,368

62,050

Other current liabilities

15,519

16,726




Total current liabilities

2,253,161

1,768,172




Long-term debt, net

1,671,202

1,677,955

Long-term deferred income taxes

196,845

199,596

Other long-term liabilities

92,996

94,409

Commitments and contingent liabilities






Redeemable noncontrolling interests

42,262

42,100




Stockholders' equity 



Common stock

1,915

1,877

Additional paid-in capital

2,297,383

2,272,882

Accumulated deficit

(971,657)

(908,418)

Accumulated other comprehensive loss

(45,102)

(10,923)




Total Live Nation Entertainment, Inc. stockholders' equity

1,282,539

1,355,418

Noncontrolling interests

149,278

153,156

Total equity

1,431,817

1,508,574

Total liabilities and equity

$   5,688,283

$    5,290,806



LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)




Three Months Ended 
 March 31,


2013


2012


(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES




Net loss

$

(64,187)



$

(70,228)


Reconciling items:




Depreciation

30,328



28,936


Amortization

51,837



50,777


Deferred income tax benefit

(3,229)



(3,605)


Amortization of debt issuance costs and discount/premium, net

5,170



3,403


Non-cash compensation expense

6,305



8,979


Gain on disposal of operating assets

(3,597)



(288)


Equity in earnings of nonconsolidated affiliates

(2,582)



(3,881)


Other, net

691



107


Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:




Increase in accounts receivable

(63,146)



(26,374)


Increase in prepaid expenses

(180,243)



(181,927)


Increase in other assets

(32,474)



(29,215)


Increase in accounts payable, accrued expenses and other liabilities

21,773



54,787


Increase in deferred revenue

503,814



433,301


Net cash provided by operating activities

270,460



264,772


CASH FLOWS FROM INVESTING ACTIVITIES




Distributions from nonconsolidated affiliates

1,767



540


Investments made in nonconsolidated affiliates

(1,963)



(864)


Purchases of property, plant and equipment

(25,670)



(28,017)


Proceeds from disposal of operating assets, net of cash divested

8,100



5,648


Purchases of intangible assets

(17)



(10,002)


Decrease (increase) other, net

(853)



525


Net cash used in investing activities

(18,636)



(32,170)


CASH FLOWS FROM FINANCING ACTIVITIES




Proceeds from long-term debt, net of debt issuance costs

89,267



29,587


Payments on long-term debt

(96,674)



(36,844)


Contributions from noncontrolling interests

267



130


Distributions to noncontrolling interests

(1,221)



(3,226)


Proceeds from exercise of stock options

22,332



408


Payments for deferred and contingent consideration

(750)



(10,585)


Net cash provided by (used in) financing activities

13,221



(20,530)


Effect of exchange rate changes on cash and cash equivalents

(19,685)



15,087


Net increase in cash and cash equivalents

245,360



227,159


Cash and cash equivalents at beginning of period

1,001,055



844,253


Cash and cash equivalents at end of period

$

1,246,415



$

1,071,412


Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations:

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, but are not limited to, statements regarding the strength and stability of the company's platforms heading into 2013 and its ability to deliver its overall growth plans for 2013.  Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company's plans, the risk that the company's markets do not evolve as anticipated, the potential impact of the economic slowdown and operational challenges associated with selling tickets and staging events.

Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled "Item 1A. Risk Factors" of the company's most recent Annual Report filed on Form 10-K and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements.  You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made.  All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above.  Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G.  A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided below.

Adjusted Operating Income (Loss), or AOI, is a non-GAAP financial measure that the company defines as operating income (loss) before acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration arrangements, payments under the Azoff Trust note and acquisition-related severance), depreciation and amortization (including goodwill impairments), loss (gain) on disposal of operating assets and non-cash and certain stock-based compensation expense (including expense associated with grants of certain stock-based awards which are classified as liabilities).  The company uses AOI to evaluate the performance of its operating segments.  The company believes that information about AOI assists investors by allowing them to evaluate changes in the operating results of the portfolio of the businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results.  AOI is not calculated or presented in accordance with GAAP.  A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in the company's business.  Accordingly, AOI should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP.  Furthermore, this measure may vary among other companies; thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash Flow is a non-GAAP financial measure that the company defines as Adjusted Operating Income (Loss) less maintenance capital expenditures, less net cash interest expense, less cash taxes, less net distributions to noncontrolling interest partners, plus distributions from investments in nonconsolidated affiliates net of contributions to investments in nonconsolidated affiliates.  The company uses free cash flow, among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than maintenance capital expenditures.  The company believes that information about free cash flow provides investors with an important perspective on the cash available to service debt and make acquisitions.  Free cash flow is not calculated or presented in accordance with GAAP.  A limitation of the use of free cash flow as a performance measure is that it does not necessarily represent funds available for operations and is not necessarily a measure of the company's ability to fund its cash needs.  Accordingly, free cash flow should be considered in addition to, and not as a substitute for, operating income (loss) and other measures of financial performance reported in accordance with GAAP.  Furthermore, this measure may vary among other companies; thus, free cash flow as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash is a non-GAAP financial measure that the company defines as cash and cash equivalents less ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and for cash collected on behalf of others for ticket sales, plus event-related prepaids.  The company uses free cash as a proxy for how much cash it has available to, among other things, optionally repay debt balances, make acquisitions and fund revenue generating capital expenditures.  Free cash is not calculated or presented in accordance with GAAP.  A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from operations and it is not necessarily a measure of our ability to fund our cash needs.  Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with GAAP.  Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.

 









Reconciliations of Non-GAAP Measures to Their Most Directly Comparable GAAP Measures (Unaudited)

 

Reconciliation of Adjusted Operating Income (Loss) to Operating Income (Loss)









  ($ in millions)


Adjusted operating income (loss)

Non-cash and stock-based compensation expense

Loss (gain) on disposal of operating assets

 

Depreciation and

amortization

Acquisition expenses

Operating income (loss)



 

Three months ended March 31, 2013









Concerts


$         (13.1)

$                0.8

$                (3.1)

$              28.7

$               0.3

$             (39.8)

Ticketing


59.6

1.5

(0.1)

42.8

-

15.4

Artist Nation


(1.1)

0.1

(0.4)

10.1

0.1

(11.0)

Sponsorship & Advertising


23.8

0.2

-

0.1

-

23.5

Other and Eliminations


0.7

-

-

(0.3)

-

1.0

    Corporate


(17.0)

3.7

-

0.8

0.8

(22.3)

Total Live Nation


$          52.9

$               6.3

$              (3.6)

$             82.2

$               1.2

$            (33.2)











    Three months ended March 31, 2012









Concerts


$         (25.0)

$                1.3

$                (0.5)

$              28.4

$               0.8

$             (55.0)

Ticketing


72.6

1.5

(0.1)

39.2

(0.3)

32.3

Artist Nation


(3.0)

0.3

-

11.6

0.1

(15.0)

Sponsorship & Advertising


20.7

0.1

-

-

-

20.6

Other and Eliminations


(1.2)

0.1

0.3

(0.2)

(0.1)

(1.3)

    Corporate


(15.9)

5.7

-

0.7

2.1

(24.4)

Total Live Nation


$          48.2

$               9.0

$               (0.3)

$            79.7

$               2.6

$             (42.8)

 




Reconciliation of Adjusted Operating Income (Loss) to Free Cash Flow





($ in millions)

Q1 2013

Q1 2012

Adjusted operating income

$       52.9

$      48.2

Less:  Cash interest expense — net

(22.5)

(28.5)

          Cash taxes

(3.4)

17.9

          Maintenance capital expenditures

(11.5)

(10.1)

          Distributions to noncontrolling interests

(1.2)

(3.2)

Distributions from (contributions to) investments in nonconsolidated affiliates 

(0.2)

(0.3)

          Free cash flow

$      14.1

$      24.0

 Revenue generating capital expenditures

(10.0)

(13.3)

 Net

$        4.1

$     10.7

 




Reconciliation of Cash and Cash Equivalents to Free Cash




($ in millions)


March 31,

2013

Cash and cash equivalents


$          1,246.4

Client cash


(441.2)

Deferred revenue — event related


(773.8)

Accrued artist fees


(26.1)

Collections on behalf of others


(60.0)

Prepaids related to artist settlements/events


357.0

   Free cash


$            302.3

SOURCE Live Nation Entertainment



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