Live Nation Entertainment Reports Third Quarter 2013 Financial Results

- Third Quarter Revenue up 15% driving Adjusted Operating Income up by 9% and Operating Income up by 21% -

- Record-Setting Summer Concert Attendance up 27% -

Nov 05, 2013, 16:03 ET from Live Nation Entertainment

LOS ANGELES, Nov. 5, 2013 /PRNewswire-FirstCall/ -- Live Nation Entertainment (NYSE: LYV) today released financial results for the three and nine months ended September 30, 2013. 

"We had a record summer with revenue of $2.3 billion, up 15% for the quarter, largely driven by a 27% growth in global concert attendance compared to last year.  Consumer demand has come back strong for us this year, as we have had attendance growth across concerts globally, from new artists to the legends and everyone in between," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.  "The Sponsorship & Advertising segment also had continued strong performance with a 15% increase in revenue for the third quarter driven by higher sponsorship revenue and ongoing success in our online advertising business. And the launch of Ticketmaster resale product in our Ticketing segment delivered higher sales and gross transaction value in the secondary market. At this point we are confident in delivering solid revenue, operating income and adjusted operating income growth for the year, with a double-digit increase in concert attendance."

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 – 3rd QUARTER

(unaudited; $ in millions)

Q3 2013

Q3 2012

Growth

9 months 2013

9 months 2012

Growth

Revenue

Concerts

$

1,727.0

$

1,429.9

21%

$

3,433.5

$

2,954.6

16%

Ticketing

356.8

346.0

3%

1,019.8

1,001.5

2%

Artist Nation

111.1

127.9

(13%)

261.1

298.6

(13%)

Sponsorship & Advertising

110.2

95.8

15%

221.6

193.2

15%

Other & Eliminations

(42.9)

(36.5)

(18%)

(70.6)

(66.1)

(7%)

$

2,262.2

$

1,963.1

15%

$

4,865.4

$

4,381.8

11%

Adjusted Operating Income (Loss)

Concerts

$

70.7

$

49.1

44%

$

100.2

$

60.4

66%

Ticketing

80.3

82.1

(2%)

217.4

226.0

(4%)

Artist Nation

12.7

21.1

(40%)

20.1

33.0

(39%)

Sponsorship & Advertising

83.3

74.1

12%

154.3

137.8

12%

Other & Eliminations

(3.5)

(0.7)

**

(1.2)

(1.1)

(9%)

Corporate

(22.3)

(23.3)

4%

(56.9)

(59.5)

4%

$

221.2

$

202.4

9%

$

433.9

$

396.6

9%

Operating Income (Loss)

Concerts

$

44.6

$

19.1

**

$

41.8

$

(43.0)

**

Ticketing

28.0

36.6

(23%)

82.5

100.4

(18%)

Artist Nation

1.8

7.5

(76%)

(12.0)

(4.7)

**

Sponsorship & Advertising

83.2

73.6

13%

153.0

137.0

12%

Other & Eliminations

(3.1)

(0.2)

**

0.1

**

Corporate

(28.5)

(32.1)

11%

(74.7)

(85.0)

12%

$

126.0

$

104.5

21%

$

190.7

$

104.7

82%

** percentages are not meaningful

As of September 30, 2013, total cash and cash equivalents were $1.3 billion, which includes $510 million in ticketing client cash and $539 million in free cash. Event-related deferred revenue was $313 million as of September 30, 2013, compared to $273 million as of the same date in 2012. Free cash flow was $167 million for the third quarter of 2013 as compared to $152 million in the third quarter of last year, and $283 million for the first nine months of 2013 versus $274 million for the same period in 2012.

About Live Nation Entertainment: Live Nation Entertainment (NYSE: LYV) is the world's leading live entertainment company comprised of four market leaders: Ticketmaster, 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 September 30,

Nine Months Ended September 30,

2013

2012

2013

2012

Concerts (1)

Total estimated events:

North America

3,858

3,938

11,181

11,126

International

1,210

1,227

4,674

4,536

Total estimated events

5,068

5,165

15,855

15,662

Total estimated attendance (rounded):

North America

14,826,000

11,636,000

29,292,000

25,278,000

International

6,348,000

5,080,000

15,419,000

12,808,000

Total estimated attendance

21,174,000

16,716,000

44,711,000

38,086,000

Ancillary net revenue per attendee (2):

North America amphitheaters

$

18.26

$

18.54

International festivals

$

17.81

$

15.71

Ticketing (3)

Number of tickets sold (in thousands):

Concerts

20,526

19,421

56,724

54,832

Sports

7,447

6,709

24,067

23,249

Arts and theater

4,239

4,493

12,465

13,683

Family

3,803

3,676

11,637

11,277

Other (4)

1,579

1,771

4,717

5,221

37,594

36,070

109,610

108,262

Gross transaction value of tickets sold (in thousands)

$

2,231,826

$

2,092,102

$

6,740,055

$

6,503,452

Sponsorship & Advertising

Sponsorship revenue (in thousands)

$

90,081

$

81,199

$

172,656

$

155,139

Online advertising revenue (in thousands)

$

20,136

$

14,606

$

48,948

$

38,072

(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 transaction 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 24 million and 26 million tickets sold for the three months ended September 30, 2013 and 2012, respectively, and excludes approximately 77 million and 84 million tickets sold for the nine months ended September 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 September 30,

Nine Months Ended September 30,

2013

2012

2013

2012

Revenue

(in thousands except share and per share data)

Operating expenses:

$

2,262,236

$

1,963,146

$

4,865,447

$

4,381,820

Direct operating expenses

1,698,731

1,457,423

3,485,583

3,103,006

Selling, general and administrative expenses

325,005

283,846

900,246

832,924

Depreciation and amortization

92,729

84,684

257,582

258,656

Gain on disposal of operating assets

(9,060)

(60)

(42,856)

(255)

Corporate expenses

26,442

30,842

68,909

81,474

Acquisition transaction expenses

2,352

1,896

5,329

1,335

Operating income

126,037

104,515

190,654

104,680

Interest expense

29,393

35,535

87,585

94,733

Loss (gain) on extinguishment of debt

36,269

(460)

36,269

(460)

Interest income

(1,547)

(994)

(4,205)

(2,825)

Equity in losses (earnings) of nonconsolidated affiliates

2,363

(3,117)

(2,848)

(8,799)

Other expense (income), net

(5,269)

(6,575)

2,237

(2,933)

Income before income taxes

64,828

80,126

71,616

24,964

Income tax expense

14,410

11,950

26,370

21,456

Net income

50,418

68,176

45,246

3,508

Net income attributable to noncontrolling interests

6,644

10,228

6,581

7,018

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

$

43,774

$

57,948

$

38,665

$

(3,510)

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

$

0.22

$

0.31

$

0.20

$

(0.02)

Weighted average common shares outstanding:

Basic

196,396,704

187,153,788

192,792,286

186,857,527

Diluted

202,109,783

189,754,343

197,266,289

186,857,527

 

LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30, 2013

December 31, 2012

ASSETS

(in thousands)

Current assets

Cash and cash equivalents

$

1,302,578

$

1,001,055

Accounts receivable, less allowance of $17,240 and $19,794, respectively

578,426

415,790

Prepaid expenses

435,769

359,936

Other current assets

47,777

36,031

Total current assets

2,364,550

1,812,812

Property, plant and equipment

Land, buildings and improvements

812,685

852,175

Computer equipment and capitalized software

386,825

338,919

Furniture and other equipment

205,267

200,743

Construction in progress

59,305

56,822

1,464,082

1,448,659

Less accumulated depreciation

767,079

726,873

697,003

721,786

Intangible assets

Definite-lived intangible assets, net

644,410

724,463

Indefinite-lived intangible assets

376,440

377,463

Goodwill

1,397,471

1,357,827

Investments in nonconsolidated affiliates

40,128

46,160

Other long-term assets

255,558

250,295

Total assets

$

5,775,560

$

5,290,806

LIABILITIES AND EQUITY

Current liabilities

Accounts payable, client accounts

$

659,803

$

557,953

Accounts payable

113,385

102,718

Accrued expenses

784,761

626,723

Deferred revenue

395,763

402,002

Current portion of long-term debt

263,689

62,050

Other current liabilities

16,350

16,726

Total current liabilities

2,233,751

1,768,172

Long-term debt, net

1,540,763

1,677,955

Long-term deferred income taxes

189,496

199,596

Other long-term liabilities

92,288

94,409

Commitments and contingent liabilities

Redeemable noncontrolling interests

66,680

42,100

Stockholders' equity

Common stock

1,973

1,877

Additional paid-in capital

2,375,613

2,272,882

Accumulated deficit

(869,753)

(908,418)

Cost of shares held in treasury

(6,865)

Accumulated other comprehensive loss

(11,261)

(10,923)

Total Live Nation Entertainment, Inc. stockholders' equity

1,489,707

1,355,418

Noncontrolling interests

162,875

153,156

Total equity

1,652,582

1,508,574

Total liabilities and equity

$

5,775,560

$

5,290,806

 

 

LIVE NATION ENTERTAINMENT, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine Months Ended September 30,

2013

2012

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

45,246

$

3,508

Reconciling items:

Depreciation

90,443

90,789

Amortization

167,139

167,867

Deferred income tax benefit

(8,230)

(11,183)

Amortization of debt issuance costs and discount/premium, net

15,409

11,415

Loss (gain) on extinguishment of debt

36,269

(460)

Non-cash compensation expense

23,224

27,595

Gain on disposal of operating assets

(42,856)

(255)

Equity in earnings of nonconsolidated affiliates

(2,848)

(8,799)

Other, net

576

(364)

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

Increase in accounts receivable

(129,361)

(186,313)

Increase in prepaid expenses

(50,432)

(159,473)

Increase in other assets

(94,512)

(37,712)

Increase in accounts payable, accrued expenses and other liabilities

260,254

138,270

Increase (decrease) in deferred revenue

(45,783)

54,154

Net cash provided by operating activities

264,538

89,039

CASH FLOWS FROM INVESTING ACTIVITIES

Distributions from nonconsolidated affiliates

13,104

6,744

Investments made in nonconsolidated affiliates

(7,505)

(3,212)

Purchases of property, plant and equipment

(103,577)

(92,372)

Proceeds from disposal of operating assets, net of cash divested

83,086

7,788

Cash paid for acquisitions, net of cash acquired

(26,418)

(71,256)

Purchases of intangible assets

(17)

(14,553)

Other, net

(1,163)

(943)

Net cash used in investing activities

(42,490)

(167,804)

CASH FLOWS FROM FINANCING ACTIVITIES

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

870,324

481,286

Payments on long-term debt

(854,277)

(457,487)

Contributions from noncontrolling interests

267

130

Distributions to noncontrolling interests

(12,382)

(9,202)

Purchases and sales of noncontrolling interests, net

(75)

(259)

Proceeds from exercise of stock options

80,593

926

Payments for deferred and contingent consideration

(750)

(10,585)

Net cash provided by financing activities

83,700

4,809

Effect of exchange rate changes on cash and cash equivalents

(4,225)

13,374

Net increase (decrease) in cash and cash equivalents

301,523

(60,582)

Cash and cash equivalents at beginning of period

1,001,055

844,253

Cash and cash equivalents at end of period

$

1,302,578

$

783,671

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 delivering revenue, operating income and adjusted operating income growth for 2013, as well as its anticipated double-digit increase in concert attendance for the year. 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 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 September 30, 2013

Concerts

$

70.7

$

1.6

$

(9.1)

$

32.8

$

0.8

$

44.6

Ticketing

80.3

2.9

49.2

0.2

28.0

Artist Nation

12.7

0.2

10.7

1.8

Sponsorship & Advertising

83.3

0.2

(0.1)

83.2

Other and Eliminations

(3.5)

0.1

(0.5)

(3.1)

Corporate

(22.3)

4.2

0.6

1.4

(28.5)

Total Live Nation

$

221.2

$

9.2

$

(9.1)

$

92.7

$

2.4

$

126.0

Three Months Ended September 30, 2012

Concerts

$

49.1

$

1.5

$

$

27.5

$

1.0

$

19.1

Ticketing

82.1

1.7

43.3

0.5

36.6

Artist Nation

21.1

0.4

13.2

7.5

Sponsorship & Advertising

74.1

0.2

0.3

73.6

Other and Eliminations

(0.7)

(0.1)

(0.4)

(0.2)

Corporate

(23.3)

5.9

0.8

2.1

(32.1)

Total Live Nation

$

202.4

$

9.7

$

(0.1)

$

84.7

$

3.6

$

104.5

Nine Months Ended September 30, 2013

Concerts

$

100.2

$

4.1

$

(43.6)

$

96.6

$

1.3

$

41.8

Ticketing

217.4

6.1

128.6

0.2

82.5

Artist Nation

20.1

0.4

0.7

30.9

0.1

(12.0)

Sponsorship & Advertising

154.3

0.6

0.7

153.0

Other and Eliminations

(1.2)

(1.3)

0.1

Corporate

(56.9)

12.0

2.1

3.7

(74.7)

Total Live Nation

$

433.9

$

23.2

$

(42.9)

$

257.6

$

5.3

$

190.7

Nine Months Ended September 30, 2012

Concerts

$

60.4

$

4.2

$

(0.5)

$

100.1

$

(0.4)

$

(43.0)

Ticketing

226.0

4.7

(0.2)

121.3

(0.2)

100.4

Artist Nation

33.0

1.0

36.3

0.4

(4.7)

Sponsorship & Advertising

137.8

0.5

0.3

137.0

Other and Eliminations

(1.1)

0.4

(1.5)

Corporate

(59.5)

17.2

2.2

6.1

(85.0)

Total Live Nation

$

396.6

$

27.6

$

(0.3)

$

258.7

$

5.9

$

104.7

 

 

 

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

($ in millions)

Q3 2013

Q3 2012

Adjusted operating income

$

221.2

$

202.4

Less:  Cash interest expense — net

(28.3)

(36.1)

Cash taxes

(9.9)

(3.9)

Maintenance capital expenditures

(11.7)

(15.5)

Distributions to noncontrolling interests

(10.4)

(1.0)

Distributions from (contributions to) investments in nonconsolidated affiliates

5.9

5.7

Free cash flow

$

166.8

$

151.6

Revenue generating capital expenditures

(13.1)

(13.9)

Net

$

153.7

$

137.7

($ in millions)

9 months 2013

9 months 2012

Adjusted operating income

$

433.9

$

396.6

Less:  Cash interest expense — net

(72.8)

(85.0)

Cash taxes

(32.8)

10.6

Maintenance capital expenditures

(38.5)

(42.2)

Distributions to noncontrolling interests

(12.3)

(9.2)

Distributions from (contributions to) investments in nonconsolidated affiliates

5.6

3.5

Free cash flow

$

283.1

$

274.3

Revenue generating capital expenditures

(41.6)

(46.0)

Net

$

241.5

$

228.3

 

Reconciliation of Cash and Cash Equivalents to Free Cash

($ in millions)

September 30, 2013

Cash and cash equivalents

$

1,302.6

Client cash

(509.5)

Deferred revenue — event-related

(312.7)

Accrued artist fees

(108.3)

Collections on behalf of others

(46.4)

Prepaids related to artist settlements/events

212.9

   Free cash

$

538.6

SOURCE Live Nation Entertainment



RELATED LINKS

http://www.livenation.com/investors