Live Nation Entertainment Reports Second Quarter 2013 Financial Results - Second Quarter Revenue up 8% and Concert Attendance up 8% -

- All Core Businesses Deliver Improved Revenue, AOI and Operating Income for the Quarter -

LOS ANGELES, Aug. 6, 2013 /PRNewswire-FirstCall/ -- Live Nation Entertainment (NYSE: LYV) today released financial results for the three and six months ended June 30, 2013. 

"We saw continued strong consumer demand for the live business over the past quarter, and further accelerated our top line growth by continuing to build share in our concerts and ticketing businesses. As a result, we are well on our way to achieving our 2013 goals with strong performance across our core business segments with revenue growth of 8% in the second quarter as compared to last year.  The positive trend in our concert ticket sales from the beginning of the year has continued with concert attendance up 8% for the quarter," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.  "Sponsorship & Advertising delivered a 16% increase in revenue during the second quarter driven by new sponsors and improved online activity and Ticketmaster revenue was up 3% with 2% higher ticket volume.  We strongly believe that the strategies and investments we are implementing today position the company for long-term growth and delivery of our three-year plan."

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 listen to 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 – 2nd QUARTER

(unaudited; $ in millions)














Q2 2013


Q2 2012


Growth


6 months 2013


6 months 2012


Growth

Revenue












Concerts

$

1,193.0


$

1,076.0


10.9%


$

1,706.5


$

1,524.7


11.9%

Ticketing

337.8


328.9


2.7%


663.0


655.5


1.1%

Artist Nation

99.7


109.2


(8.7%)


150.0


170.6


(12.1%)

Sponsorship & Advertising

71.2


61.3


16.2%


111.4


97.4


14.4%

Other & Eliminations

(22.2)


(24.7)


10.1%


(27.7)


(29.5)


6.1%


$

1,679.5


$

1,550.7


8.3%


$

2,603.2


$

2,418.7


7.6%













Adjusted Operating Income (Loss)












Concerts

$

42.6


$

36.2


17.7%


$

29.4


$

11.3


**

Ticketing

77.6


71.4


8.7%


137.2


143.9


(4.7%)

Artist Nation

8.5


14.9


(43.0%)


7.5


11.9


(37.0%)

Sponsorship & Advertising

47.2


42.9


10.0%


70.9


63.6


11.5%

Other & Eliminations

1.6


0.8


100.0%


2.4


(0.4)


**

Corporate

(17.6)


(20.2)


12.9%


(34.6)


(36.1)


4.2%


$

159.9


$

146.0


9.5%


$

212.8


$

194.2


9.6%













Operating Income (Loss)












Concerts

$

36.9


$

(7.0)


**


$

(2.9)


$

(62.0)


95.3%

Ticketing

39.2


31.5


24.4%


54.5


63.8


(14.6%)

Artist Nation

(2.9)


2.8


**


(13.8)


(12.2)


(13.1%)

Sponsorship & Advertising

46.4


42.7


8.7%


69.8


63.3


10.3%

Other & Eliminations

2.1


1.4


50.0%


3.2


0.1


**

Corporate

(23.9)


(28.4)


15.8%


(46.2)


(52.8)


12.5%


$

97.8


$

43.0


**


$

64.6


$

0.2


**

         ** percentages are not meaningful

For the three months ending June 30, 2013, revenue was $1.7 billion up 8% compared to prior year revenue of $1.6 billion. For the first six months of 2013, revenue was $2.6 billion, up 8% compared to $2.4 billion for the same period of 2012.

As of June 30, 2013, total cash and cash equivalents were $1.4 billion, which includes $479 million in ticketing client cash and $331 million in free cash.  Event-related deferred revenue was $868 million as of June 30, 2013, compared to $707 million as of the same date in 2012.  Free cash flow was $102 million for the second quarter of 2013 as compared to $99 million in the second quarter of last year, and $116 million for the first six months of 2013 versus $123 million for the same period in 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

June 30,


Six Months Ended

June 30,


2013


2012


2013


2012

Concerts (1)








Total estimated events:








     North America

4,076


3,983


7,339


7,188

     International

1,842


1,709


3,464


3,309

          Total estimated events

5,918


5,692


10,803


10,497

Total estimated attendance (rounded):








     North America

9,321,000


9,282,000


14,376,000


13,642,000

     International

6,021,000


4,877,000


9,071,000


7,728,000

          Total estimated attendance

15,342,000


14,159,000


23,447,000


21,370,000

Ancillary net revenue per attendee (2):








     North America amphitheaters





$

18.59


$

18.87

     International festivals





$

16.81


$

17.83

Ticketing (3)








Number of tickets sold (in thousands):








     Concerts

19,526


18,604


36,197


35,412

     Sports

8,099


7,734


16,620


16,540

     Arts and theater

3,962


4,371


8,226


9,190

     Family

3,264


3,073


7,834


7,601

     Other (4)

1,417


1,699


3,138


3,449


36,268


35,481


72,015


72,192









Gross value of tickets sold (in thousands)

$

2,326,378


$

2,191,152


$

4,508,229


$

4,411,351









Sponsorship & Advertising








Sponsorship revenue (in thousands)

$

54,322


$

48,223


$

82,575


$

73,940

Online advertising revenue (in thousands)

$

16,918


$

13,055


$

28,812


$

23,466





(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 based on the days the fan was present at the festival and thus can be reported in multiple quarters.  Events and attendance metrics are estimated each quarter.

(2)

Amounts are reported as of the latest period shown.

(3)

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 venues and in certain European territories where these tickets are reported as the events occur.  The total number of tickets sold excludes approximately 25 million and 27 million tickets sold for the three months ended June 30, 2013 and 2012, respectively, and excludes approximately 53 million and 58 million tickets sold for the six months ended June 30, 2013 and 2012, respectively, through our venue clients' box offices for which we do not receive a fee.

(4)

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

June 30,


Six Months Ended

June 30,


2013


2012


2013


2012


(in thousands except share and per share data)



Revenue

$

1,679,513


$

1,550,677


$

2,603,211


$

2,418,674

Operating expenses:








Direct operating expenses

1,209,918


1,106,869


1,786,852


1,645,583

Selling, general and administrative expenses

295,719


280,943


575,241


549,078

Depreciation and amortization

82,688


94,259


164,853


173,972

Loss (gain) on disposal of operating assets

(30,199)


93


(33,796)


(195)

Corporate expenses

21,812


27,415


42,467


50,632

Acquisition transaction expenses

1,769


(1,870)


2,977


(561)

     Operating income

97,806


42,968


64,617


165

Interest expense

30,041


29,488


58,192


59,198

Interest income

(890)


(931)


(2,658)


(1,831)

Equity in earnings of nonconsolidated affiliates

(2,629)


(1,801)


(5,211)


(5,682)

Other expense, net

3,868


5,424


7,506


3,642

Income (loss) before income taxes

67,416


10,788


6,788


(55,162)

Income tax expense

8,401


5,228


11,960


9,506

Net income (loss)

59,015


5,560


(5,172)


(64,668)

Net income (loss) attributable to noncontrolling interests

885


(2,132)


(63)


(3,210)

Net income (loss) attributable to common stockholders of Live Nation Entertainment, Inc.

$

58,130


$

7,692


$

(5,109)


$

(61,458)









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

$

0.30


$

0.04


$

(0.03)


$

(0.33)









Weighted average common shares outstanding:








Basic

193,069,783


186,893,774


190,960,206


186,707,769

Diluted

196,770,405


189,325,338


190,960,206


186,707,769

 


LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED BALANCE SHEETS

(unaudited)






June 30,

2013


December 31,

2012


(in thousands)

ASSETS




Current assets




Cash and cash equivalents

$

1,385,260


$

1,001,055

Accounts receivable, less allowance of $20,175 and $19,794, respectively

634,509


415,790

Prepaid expenses

607,376


359,936

Other current assets

60,212


36,031

     Total current assets

2,687,357


1,812,812

Property, plant and equipment




Land, buildings and improvements

794,902


852,175

Computer equipment and capitalized software

372,704


338,919

Furniture and other equipment

199,478


200,743

Construction in progress

55,625


56,822


1,422,709


1,448,659

Less accumulated depreciation

730,014


726,873


692,695


721,786

Intangible assets




Definite-lived intangible assets, net

668,367


724,463

Indefinite-lived intangible assets

375,991


377,463

Goodwill

1,369,062


1,357,827

Investments in nonconsolidated affiliates

52,438


46,160

Other long-term assets

236,901


250,295

     Total assets

$

6,082,811


$

5,290,806

LIABILITIES AND EQUITY




Current liabilities




Accounts payable, client accounts

$

622,448


$

557,953

Accounts payable

167,818


102,718

Accrued expenses

631,216


626,723

Deferred revenue

1,018,135


402,002

Current portion of long-term debt

61,658


62,050

Other current liabilities

15,274


16,726

     Total current liabilities

2,516,549


1,768,172

Long-term debt, net

1,662,035


1,677,955

Long-term deferred income taxes

192,821


199,596

Other long-term liabilities

87,409


94,409

Commitments and contingent liabilities




Redeemable noncontrolling interests

78,759


42,100

Stockholders' equity




Common stock

1,959


1,877

Additional paid-in capital

2,355,798


2,272,882

Accumulated deficit

(913,527)


(908,418)

Accumulated other comprehensive loss

(51,959)


(10,923)

     Total Live Nation Entertainment, Inc. stockholders' equity

1,392,271


1,355,418

Noncontrolling interests

152,967


153,156

     Total equity

1,545,238


1,508,574

     Total liabilities and equity

$

6,082,811


$

5,290,806

 



LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)




Six Months Ended

June 30,


2013


2012


(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES






Net loss

$

(5,172)


$

(64,668)

Reconciling items:




Depreciation

59,410


59,691

Amortization

105,443


114,281

Deferred income tax benefit

(6,305)


(6,946)

Amortization of debt issuance costs and discount/premium, net

10,421


6,881

Non-cash compensation expense

14,119


17,919

Gain on disposal of operating assets

(33,796)


(195)

Equity in earnings of nonconsolidated affiliates

(5,211)


(5,682)

Other, net

1,468


(1,773)

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




Increase in accounts receivable

(205,361)


(103,344)

Increase in prepaid expenses

(230,247)


(305,090)

Increase in other assets

(65,252)


(62,284)

Increase in accounts payable, accrued expenses and other liabilities

152,384


94,717

Increase in deferred revenue

588,446


566,621

     Net cash provided by operating activities

380,347


310,128

CASH FLOWS FROM INVESTING ACTIVITIES




Distributions from nonconsolidated affiliates

2,740


703

Investments made in nonconsolidated affiliates

(3,032)


(2,858)

Purchases of property, plant and equipment

(76,685)


(62,785)

Proceeds from disposal of operating assets, net of cash divested

81,070


5,648

Cash paid for acquisitions, net of cash acquired

(23,766)


(68,093)

Purchases of intangible assets

(17)


(11,469)

(Increase) decrease other, net

(1,052)


297

     Net cash used in investing activities

(20,742)


(138,557)

CASH FLOWS FROM FINANCING ACTIVITIES




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

89,369


58,270

Payments on long-term debt

(106,388)


(44,222)

Contributions from noncontrolling interests

267


130

Distributions to noncontrolling interests

(1,936)


(8,189)

Proceeds from exercise of stock options

73,449


859

Payments for deferred and contingent consideration

(750)


(10,585)

     Net cash provided by (used in) financing activities

54,011


(3,737)

Effect of exchange rate changes on cash and cash equivalents

(29,411)


(7,048)

     Net increase in cash and cash equivalents

384,205


160,786

Cash and cash equivalents at beginning of period

1,001,055


844,253

Cash and cash equivalents at end of period

$

1,385,260


$

1,005,039

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 company's prospects for achieving its 2013 goals and the company's positioning for long-term growth and delivery of its three-year plan.  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 any 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 impairment), 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 were 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 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 June 30, 2013


Concerts


$

42.6


$

1.6


$

(31.3)


$

35.1


$

0.3


$

36.9

Ticketing


77.6


1.7



36.7



39.2

Artist Nation


8.5


0.2


1.1


10.1



(2.9)

Sponsorship & Advertising


47.2


0.2



0.6



46.4

Other and Eliminations


1.6


(0.1)



(0.5)


0.1


2.1

Corporate


(17.6)


4.2



0.7


1.4


(23.9)

   Total Live Nation


$

159.9


$

7.8


$

(30.2)


$

82.7


$

1.8


$

97.8





























Three Months Ended June 30, 2012




















Concerts


$

36.2


$

1.3


$


$

44.1


$

(2.2)


$

(7.0)

Ticketing


71.4


1.5


(0.1)


38.8


(0.3)


31.5

Artist Nation


14.9


0.3



11.5


0.3


2.8

Sponsorship & Advertising


42.9


0.2





42.7

Other and Eliminations


0.8



0.2


(0.8)



1.4

Corporate


(20.2)


5.6



0.7


1.9


(28.4)

   Total Live Nation


$

146.0


$

8.9


$

0.1


$

94.3


$

(0.3)


$

43.0



















Six Months Ended June 30, 2013



























Concerts


$

29.4


$

2.5


$

(34.5)


$

63.8


$

0.5


$

(2.9)

Ticketing


137.2


3.1



79.5


0.1


54.5

Artist Nation


7.5


0.3


0.7


20.2


0.1


(13.8)

Sponsorship & Advertising


70.9


0.4



0.7



69.8

Other and Eliminations


2.4




(0.8)



3.2

Corporate


(34.6)


7.8



1.5


2.3


(46.2)

   Total Live Nation


$

212.8


$

14.1


$

(33.8)


$

164.9


$

3.0


$

64.6





























Six Months Ended June 30, 2012




















Concerts


$

11.3


$

2.7


$

(0.5)


$

72.5


$

(1.4)


$

(62.0)

Ticketing


143.9


3.0


(0.2)


78.0


(0.7)


63.8

Artist Nation


11.9


0.6



23.1


0.4


(12.2)

Sponsorship & Advertising


63.6


0.3





63.3

Other and Eliminations


(0.4)



0.5


(1.0)



0.1

Corporate


(36.1)


11.3



1.4


4.0


(52.8)

   Total Live Nation


$

194.2


$

17.9


$

(0.2)


$

174.0


$

2.3


$

0.2

 

 

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





($ in millions)

Q2 2013


Q2 2012

Adjusted operating income

$

159.9


$

146.0

Less:  Cash interest expense — net

(22.0)


(20.4)

            Cash taxes

(19.5)


(3.4)

            Maintenance capital expenditures

(15.3)


(16.6)

            Distributions to noncontrolling interests

(0.7)


(5.0)

Distributions from (contributions to) investments in nonconsolidated affiliates

(0.1)


(1.9)

Free cash flow

$

102.3


$

98.7

     Revenue generating capital expenditures

(18.5)


(18.8)

     Net

$

83.8


$

79.9





($ in millions)

6 months 2013


6 months 2012

Adjusted operating income

$

212.8


$

194.2

Less:  Cash interest expense — net

(44.5)


(48.9)

            Cash taxes

(22.9)


14.5

            Maintenance capital expenditures

(26.8)


(26.7)

            Distributions to noncontrolling interests

(1.9)


(8.2)

Distributions from (contributions to) investments in nonconsolidated affiliates

(0.3)


(2.2)

Free cash flow

$

116.4


$

122.7

     Revenue generating capital expenditures

(28.5)


(32.1)

     Net

$

87.9


$

90.6

 

Reconciliation of Cash and Cash Equivalents to Free Cash




($ in millions)


June 30,

2013

Cash and cash equivalents


$

1,385.3

Client cash


(479.1)

Deferred revenue — event-related


(868.3)

Accrued artist fees


(56.3)

Collections on behalf of others


(38.0)

Prepaids related to artist settlements/events


387.7

      Free cash


$

331.3

 

SOURCE Live Nation Entertainment



RELATED LINKS
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