Live Nation Entertainment Reports Fourth Quarter And Full Year 2013 Results - CW15 - OMAHA

Live Nation Entertainment Reports Fourth Quarter And Full Year 2013 Results

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SOURCE Live Nation Entertainment

Full Year 2013 Results - Record Performance

-- Concert Attendance Up 19% - Total Ticketmaster 400 Million Fans Delivering Over $17 Billion GTV

-- 900 Million Fans Visit Ticketmaster, Creating User Database of 250 Million Fan Preferences

-- Revenue Up 11% to $6.5 Billion

-- AOI Increased 10% to $505 Million

-- Moved to Profitability in Operating Income of $140 Million

-- Adjusted Net Income Up $157 Million to ($7 Million)

-- Reported Net Income Improved by $120 Million

-- Free Cash Flow Up 9% to $300 Million

-- Full Year Adjusted EPS Up $0.84 to ($0.04); Reported EPS Up $0.65

LOS ANGELES, Feb. 24, 2014 /PRNewswire/ -- Live Nation Entertainment (NYSE: LYV) today released financial results for the three and twelve months ended December 31, 2013. 

Live Nation Entertainment - EDC

2013 Results

We had a record year in 2013 and are well positioned for continued growth in 2014.  During 2013, we further grew our unmatched concerts global fan base by 10 million fans, attracting almost 60 million fans to our concerts.  This tremendous growth fueled our sponsorship and ticketing businesses with Ticketmaster managing nearly 400 million total tickets in 2013.  Combined, we delivered a record year for revenue, AOI and free cash flow.  Our results demonstrate the effectiveness of our business model, establishing Live Nation as what we believe to be the number one player in each of our businesses, with concerts driving our flywheel, which is then monetized across our high margin on-site, sponsorship and ticketing businesses.

Strong Fan Demand for Live Events

We continue to see the tremendous power of live events, with strong global consumer demand.  Research shows that live events are a high priority for discretionary spending, and over 80% of our fans surveyed indicate that they plan on attending the same or more events in 2014 as in 2013.

Another sign of the strength of our business is that 85% of Live Nation's fan growth came organically, from our promoting more shows in amphitheaters, arenas and stadiums; from launching new festivals; and from establishing operations in new markets.  We believe the live business will continue to have strong global growth for years to come as fan demand, artist supply and new markets come together.

Technology Making Live Music Global

Another reason for the strength of live events is that technology has rapidly transformed the business in a positive fashion; live is not duplicable, and new social platforms have enabled fans around the globe to get close to their favorite artists.  Fans in every corner of the globe can discover, follow, share and embrace artists, translating into greater demand for tours in all markets.

And as music has gone global, technology is enabling a similar transformation of ticketing.  Today the vast majority of ticketing transactions are online or via mobile.  Ticket sales are continuing their rapid shift to mobile, almost doubling again in 2013 to 14% of total ticket sales.

Today fans are hearing about concerts either from friends or by some digital means 70% of the time.  As Ticketmaster continues to improve its products for fans to buy and manage tickets digitally, more fans will be able to find out about shows, coordinate with their friends, and go to more concerts or other live events.  As a result, we believe that Ticketmaster will sell more tickets, Ticketmaster's clients will benefit from increased sales and Live Nation concerts will increase its attendance per show.

Concerts Division Delivers Record Setting Performance

We continue to build share across our businesses, starting by growing our concert business well above industry growth rates, as we were the lead or exclusive promoter on 21 of the top 25 grossing tours in North America.  In addition, we built our festival portfolio, adding a million fans, and we expanded further into emerging markets with nearly one million more fans there as well, now reaching fans in 33 countries.

As we grew the business, we did so consistently across markets and venue types - we increased both attendance and attendance per show at every type of venue, from theaters and clubs to amphitheaters to arenas and stadiums, showing the consistent strength of our business.

We are also seeing this growth across all genres of music, with country music delivering the greatest fan growth, up 2.3 million fans to nearly 7 million, increasing 50% from last year.  Newer artists and genres also contributed to our growth, with 7 of our top 10 tours led by young artists and EDM as our fastest growing genre.

Artist Nation Directly Supports Concert Business

Our concerts growth was supported by greater alignment with our artist management business, as we increased the number of shows we promoted with top Artist Nation acts by 50%.  This delivered increased value of approximately $20 million to our concerts and ticketing businesses, while also providing additional opportunities for our sponsors.  2013 was a year of rebuilding for this business, and we now feel confident that with new leadership we will grow our artist management business in 2014 and it will continue to be a valuable pipeline into our concerts flywheel.

Sponsorship & Advertising Continue Double-Digit Growth

Our sponsorship & advertising business has now reached almost $300 million in revenue, connecting over 750 sponsors with 900 million visitors to our online and mobile sites globally and our 60 million concert-going fans.  We now have the scale to attract a broad advertising base, which drove a 26% increase in ad units sold in 2013.

At the same time our traditional sponsorship business continues to show strength, growing 11% last year.  This was led by a 29% increase in festival sponsorship, where we continue averaging almost $10 revenue per fan across our 4.5 million fans attending 62 festivals.

Ticketmaster Focus on Products Driving Growth

Ticketmaster also continues to build upon its strength, with nearly 400 million tickets issued and managed, generating over $17 billion in gross transaction value, making Ticketmaster one of the top ecommerce sites in the world.  And with a 106% client net renewal rate in 2013, our platforms and products are demonstrating their value to clients.

With the first new product launch enabled by our new platform, Ticketmaster resale delivered a 26% growth in GTV of tickets sold through our secondary business.  This innovative fan-oriented product gives all options - primary and secondary - together in one place for full transparency for the fans.  We believe the $9 billion secondary market that has historically not benefitted content owners will start to be captured by teams and artists, and Ticketmaster resale will be at the forefront of empowering this.  To date we have partnered with two-thirds of the NFL, NBA and NHL teams and over 1,000 concerts in launching this product.

Our team of over 500 engineers continues to work on new mobile products, improving the online experience, and building a new ticketing platform to enable Ticketmaster to substantially upgrade its commerce suite of features for both fans and its B2B clients over the next two years.

2014 Growth Drivers

As we head into 2014, we are more optimistic than ever on the growth potential of our business and our ability to deliver our 3-year plan as laid out for 2014 and 2015.

While we had tremendous success building our concert fan base in 2013, we believe there is more runway ahead that will allow us to continue to build share, add festivals to our global portfolio and enter more emerging markets.  Early indicators show we are off to a strong start, with event-related deferred revenue up 19% year on year to $434 million as of December 31st, 2013 and concert ticket sales for shows in 2014 up 12% as of February 15th, 2014 as compared to this time last year.

We expect sponsorship & advertising to continue dependable growth at recent historical rates, further building our global sponsor base and expanding our online ad units as we grow and extend our online and mobile presence.

At Ticketmaster, we plan on delivering a client net renewal rate of over 100% as we further distinguish ourselves as the best ticketing partner to help clients market and sell their events, and see continued opportunity in 2014 to further build our Ticketmaster resale platform.  We have had a strong start to the year, with overall ticket sales up 8% through February 15th this year as compared to last year.

Michael Rapino

The company will webcast a teleconference today at 5:00 p.m. Eastern Time to discuss its financial performance. Interested parties should visit the Events & Webcasts section of the company's website at investors.livenationentertainment.com to listen to the webcast.  Supplemental statistical and financial information to be provided on the call, if any, will be available under the Quarterly & Financial Reports portion of the Reports section at the same link. A replay of the webcast will also be available on the Live Nation website.

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 investors.livenationentertainment.com.

Follow us @twitter.com/LiveNationInc

FINANCIAL HIGHLIGHTS – 4th QUARTER AND FULL YEAR
(Q4 unaudited; $ in millions)










Q4 2013


Q4 2012


Growth


12 months 2013


12 months 2012


Growth

Revenue












Concerts

$

1,083.7



$

915.8



18

%


$

4,517.2



$

3,870.4



17

%

Ticketing

388.0



372.5



4

%


1,407.8



1,374.0



2

%

Artist Nation

91.8



101.3



(9%)



352.9



399.9



(12%)


Sponsorship & Advertising

63.1



54.7



15

%


284.7



247.9



15

%

Other & Eliminations

(13.5)



(7.1)



(90%)



(84.1)



(73.2)



(15%)



$

1,613.1



$

1,437.2



12

%


$

6,478.5



$

5,819.0



11

%













Adjusted Operating Income (Loss)












Concerts

$

(39.9)



$

(29.0)



(38%)



$

60.3



$

31.4



92

%

Ticketing

80.7



68.6



18

%


298.1



294.6



1

%

Artist Nation

12.0



5.1



**



32.1



38.1



(16%)


Sponsorship & Advertising

40.5



37.8



7

%


194.8



175.6



11

%

Other & Eliminations

(0.6)



(0.5)



(20%)



(1.8)



(1.6)



(13%)


Corporate

(21.4)



(19.5)



(10%)



(78.3)



(79.0)



1

%


$

71.3



$

62.5



14

%


$

505.2



$

459.1



10

%













Operating Income (Loss)












Concerts

$

(81.4)



$

(77.1)



(6%)



$

(39.6)



$

(120.1)



67

%

Ticketing

19.3



22.4



(14%)



101.8



122.8



(17%)


Artist Nation

0.3



(75.9)



**



(11.7)



(80.6)



85

%

Sponsorship & Advertising

38.6



36.8



5

%


191.6



173.8



10

%

Other & Eliminations

(0.1)



(0.1)



**



-



(0.1)



**


Corporate

(27.7)



(32.4)



15

%


(102.4)



(117.4)



13

%


$

(51.0)



$

(126.3)



60

%


$

139.7



$

(21.6)



**














** percentages are not meaningful

As of December 31, 2013, total cash and cash equivalents were $1.3 billion, which includes $538 million in ticketing client cash and $445 million in free cash. Event-related deferred revenue was $434 million as of December 31, 2013, compared to $364 million as of the same date in 2012. Free cash flow was $17 million for the fourth quarter of 2013 as compared to $1 million in the fourth quarter of 2012, and $300 million for the full year 2013 versus $276 million for 2012 (including $26 million of tax refunds received in 2012).

 

LIVE NATION ENTERTAINMENT, INC.
KEY OPERATING METRICS








Year Ended December 31,


2013


2012


2011

Concerts (1)






Total estimated events:






North America

15,582



14,942



15,526


International

7,270



6,996



6,718


Total estimated events

22,852



21,938



22,244


Total estimated fans (rounded):






North America

38,009,000



32,079,000



31,060,000


International (2)

21,527,000



17,915,000



16,803,000


Total estimated fans

59,536,000



49,994,000



47,863,000


Ancillary net revenue per attendee:






North America amphitheaters

$

18.44



$

18.56



$

18.11


International festivals

$

17.69



$

15.55



$

16.62


Ticketing (3)






Number of tickets sold (in thousands):






Concerts

76,524



75,372



71,632


Sports

30,059



28,760



27,055


Arts and theater

19,112



19,961



21,891


Family

16,628



15,970



14,248


Other (4)

6,529



7,669



6,541



148,852



147,732



141,367








Gross transaction value of tickets sold (in thousands)

$

9,352,673



$

9,146,254



$

8,441,230








Sponsorship & Advertising






Sponsorship revenue (in thousands)

$

212,869



$

191,773



$

179,734


Online advertising revenue (in thousands)

$

71,823



$

56,148



$

51,057


 

(1)

Events generally represent a single performance by an artist. Fans generally represent the number of people who attended an event. Festivals are counted as one event in the quarter in which the festival begins but number of fans is based on the days the person was present at the festival and thus can be reported in multiple quarters. Events and fan attendance metrics are estimated each quarter.

(2)

In prior years, estimated fans for international festivals was based on the number of fans who purchased a ticket. In 2013, we are reporting estimated fans for international festivals based on the number of fans who attend the festival to be consistent with all other events. Prior period amounts have been adjusted to reflect the current period presentation. This adjustment resulted in increases in estimated fans of approximately 1.2 million and 1.1 million for the years ended December 31, 2012 and 2011, respectively.

(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 or operated venues and in certain European territories where these tickets are reported as the events occur. The total number of tickets sold reported above for 2013, 2012 and 2011 excludes approximately 250 million, 255 million and 256 million, respectively, of tickets sold using our Ticketmaster systems, through season seat packages and 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



Year Ended December 31,


2013


2012


2011


(in thousands except share and per share data)

Revenue

$

6,478,547



$

5,819,047



$

5,383,998


Operating expenses:






Direct operating expenses

4,680,507



4,151,277



3,789,488


Selling, general and administrative expenses

1,226,892



1,143,632



1,111,969


Depreciation and amortization

368,923



429,557



343,018


(Gain) loss on disposal of operating assets

(38,259)



(514)



978


Corporate expenses

94,385



113,364



112,157


Acquisition transaction expenses

6,439



3,370



8,051


Operating income (loss)

139,660



(21,639)



18,337


Interest expense

111,659



123,740



120,414


Loss (gain) on extinguishment of debt

36,269



(460)



-


Interest income

(5,071)



(4,170)



(4,215)


Equity in earnings of nonconsolidated affiliates

(856)



(9,921)



(7,742)


Other expense, net

2,796



1,333



6,507


Loss before income taxes

(5,137)



(132,161)



(96,627)


Income tax expense (benefit)

30,878



29,736



(26,224)


Net loss

(36,015)



(161,897)



(70,403)


Net income attributable to noncontrolling interests

7,363



1,330



12,613


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

$

(43,378)



$

(163,227)



$

(83,016)








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

$

(0.22)



$

(0.87)



$

(0.46)


Weighted average common shares outstanding:






Basic and diluted

193,885,066



186,955,748



182,388,070


 

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS



December 31,


2013


2012


(in thousands)

ASSETS




Current assets




Cash and cash equivalents

$

1,299,184



$

1,001,055


Accounts receivable, less allowance of $19,850 and $19,794 in 2013 and 2012, respectively

439,151



415,790


Prepaid expenses

378,342



359,936


Other current assets

43,427



36,031


Total current assets

2,160,104



1,812,812


Property, plant and equipment




Land, buildings and improvements

816,931



852,175


Computer equipment and capitalized software

421,846



338,919


Furniture and other equipment

210,866



200,743


Construction in progress

52,883



56,822



1,502,526



1,448,659


Less accumulated depreciation

795,726



726,873



706,800



721,786


Intangible assets




Definite-lived intangible assets, net

676,564



724,463


Indefinite-lived intangible assets

376,736



377,463


Goodwill

1,466,983



1,357,827


Other long-term assets

296,334



296,455


Total assets

$

5,683,521



$

5,290,806


LIABILITIES AND EQUITY




Current liabilities




Accounts payable, client accounts

$

656,253



$

557,953


Accounts payable

111,320



102,718


Accrued expenses

668,799



626,723


Deferred revenue

486,433



402,002


Current portion of long-term debt

278,403



62,050


Other current liabilities

54,310



16,726


Total current liabilities

2,255,518



1,768,172


Long-term debt, net

1,530,484



1,677,955


Long-term deferred income taxes

161,637



199,596


Other long-term liabilities

85,035



94,409


Commitments and contingent liabilities




Redeemable noncontrolling interests

61,041



42,100


Stockholders' equity




Preferred stock-Series A Junior Participating, $.01 par value; 20,000,000 shares authorized; no shares issued and outstanding

-



-


Preferred stock, $.01 par value; 30,000,000 shares authorized; no shares issued and outstanding

-



-


Common stock, $.01 par value; 450,000,000 shares authorized; 199,974,160 and 190,853,380 shares issued and 199,566,136 and 190,853,380 shares outstanding in 2013 and 2012, respectively

1,978



1,877


Additional paid-in capital

2,368,281



2,272,882


Accumulated deficit

(951,796)



(908,418)


Cost of shares held in treasury (408,024 shares in 2013)

(6,865)



-


Accumulated other comprehensive loss

(2,370)



(10,923)


Total Live Nation Entertainment, Inc. stockholders' equity

1,409,228



1,355,418


Noncontrolling interests

180,578



153,156


Total equity

1,589,806



1,508,574


Total liabilities and equity

$

5,683,521



$

5,290,806


 

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended December 31,


2013


2012


2011


(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES






Net loss

$

(36,015)



$

(161,897)



$

(70,403)


Reconciling items:






Depreciation

122,164



124,593



129,177


Amortization

246,759



304,964



213,841


Deferred income tax benefit

(15,888)



(10,957)



(45,603)


Amortization of debt issuance costs and discount/premium, net

20,187



16,696



13,059


Provision for uncollectible accounts receivable and advances

6,098



8,787



9,272


Loss (gain) on extinguishment of debt

36,269



(460)



-


Non-cash compensation expense

28,415



37,063



50,045


Unrealized changes in fair value of contingent consideration

(1,855)



(894)



(11,691)


(Gain) loss on disposal of operating assets

(38,259)



(514)



978


Equity in earnings of nonconsolidated affiliates

(856)



(9,921)



(7,742)


Other, net

(1,024)



1,642



2,481


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






Decrease (increase) in accounts receivable

11,544



(20,319)



(79,807)


Decrease (increase) in prepaid expenses

4,537



(69,175)



73,314


Increase in other assets

(115,645)



(41,707)



(83,928)


Increase in accounts payable, accrued expenses and other liabilities

114,253



64,437



6,817


Increase (decrease) in deferred revenue

36,788



124,760



(64,105)


Net cash provided by operating activities

417,472



367,098



135,705


CASH FLOWS FROM INVESTING ACTIVITIES






Distributions from nonconsolidated affiliates

13,889



9,241



9,273


Investments made in nonconsolidated affiliates

(9,628)



(3,788)



(15,770)


Purchases of property, plant and equipment

(134,868)



(123,811)



(107,500)


Proceeds from disposal of operating assets, net of cash divested

82,618



8,293



7,391


Cash paid for acquisitions, net of cash acquired

(93,537)



(75,641)



(39,465)


Purchases of intangible assets

(522)



(14,562)



(2,591)


Other, net

(1,615)



(3,523)



(3,355)


Net cash used in investing activities

(143,663)



(203,791)



(152,017)


CASH FLOWS FROM FINANCING ACTIVITIES






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

903,179



538,124



(669)


Payments on long-term debt

(886,597)



(525,060)



(31,338)


Contributions from noncontrolling interests

363



825



711


Distributions to noncontrolling interests

(17,384)



(20,079)



(20,863)


Purchases and sales of noncontrolling interests, net

(50,876)



(4,259)



(47,610)


Proceeds from exercise of stock options

85,110



1,143



2,705


Proceeds from sale of common stock

-



-



76,492


Payments for deferred and contingent consideration

(811)



(10,585)



(23,807)


Net cash provided by (used in) financing activities

32,984



(19,891)



(44,379)


Effect of exchange rate changes on cash and cash equivalents

(8,664)



13,386



12,186


Net increase (decrease) in cash and cash equivalents

298,129



156,802



(48,505)


Cash and cash equivalents at beginning of period

1,001,055



844,253



892,758


Cash and cash equivalents at end of period

$

1,299,184



$

1,001,055



$

844,253


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 positioning for growth in 2014 and beyond, as well as its ability to deliver its 3-year plan as laid out for 2014 and 2015; its anticipated addition of festivals and entry into new emerging markets; its expectation that its sponsorship & advertising business will continue to grow in 2014 at recent historical rates; its expectations regarding strong client net renewal rates for Ticketmaster, as well as regarding increased ticket sales and related attendance, and the anticipated impacts of the company's new resale platform and other technological upgrades; and anticipated growth in the company's artist management business in 2014. 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.

Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that the company defines as net income (loss) attributable to common stockholders of Live Nation Entertainment, Inc. less loss on extinguishment of debt on both a total and per share basis. The company uses adjusted net income and adjusted EPS to evaluate the performance of its operations without the impact of debt financing costs. The company believes that information about adjusted net income and adjusted EPS assists investors by allowing them to evaluate changes in the results of the business separate from financing transaction costs that affect net income. Adjusted net income and adjusted EPS are not calculated or presented in accordance with GAAP. A limitation of the use of adjusted net income and adjusted EPS as performance measures is that they do not reflect the costs of financing transactions. Accordingly, adjusted net income and adjusted EPS should be considered in addition to, and not as a substitute for, net income (loss) and net income (loss) per common share attributable to common stockholders of Live Nation Entertainment, Inc. and other measures of financial performance reported in accordance with GAAP. Furthermore, these measures may vary among other companies; thus, adjusted net income and adjusted EPS 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 December 31, 2013














Concerts


$

(39.9)



$

1.6



$

4.7



$

35.8



$

(0.6)



$

(81.4)


Ticketing


80.7



(0.8)



-



62.2



-



19.3


Artist Nation


12.0



0.2



(0.1)



11.7



(0.1)



0.3


Sponsorship & Advertising


40.5



0.2



-



1.6



0.1



38.6


Other and Eliminations


(0.6)



-



-



(0.5)



-



(0.1)


Corporate


(21.4)



4.1



-



0.5



1.7



(27.7)


Total Live Nation


$

71.3



$

5.3



$

4.6



$

111.3



$

1.1



$

(51.0)

















Three Months Ended December 31, 2012














Concerts


$

(29.0)



$

1.4



$

-



$

45.5



$

1.2



$

(77.1)


Ticketing


68.6



1.6



-



44.6



-



22.4


Artist Nation


5.1



0.8



-



79.4



0.8



(75.9)


Sponsorship & Advertising


37.8



0.1



-



0.9



-



36.8


Other and Eliminations


(0.5)



(0.1)



(0.2)



(0.1)



-



(0.1)


Corporate


(19.5)



5.6



-



0.6



6.7



(32.4)


Total Live Nation


$

62.5



$

9.4



$

(0.2)



$

170.9



$

8.7



$

(126.3)

















Twelve Months Ended December 31, 2013














Concerts


$

60.3



$

5.7



$

(38.9)



$

132.4



$

0.7



$

(39.6)


Ticketing


298.1



5.3



-



190.8



0.2



101.8


Artist Nation


32.1



0.6



0.6



42.6



-



(11.7)


Sponsorship & Advertising


194.8



0.8



-



2.3



0.1



191.6


Other and Eliminations


(1.8)



-



-



(1.8)



-



-


Corporate


(78.3)



16.1



-



2.6



5.4



(102.4)


Total Live Nation


$

505.2



$

28.5



$

(38.3)



$

368.9



$

6.4



$

139.7

















Twelve Months Ended December 31, 2012














Concerts


$

31.4



$

5.6



$

(0.5)



$

145.6



$

0.8



$

(120.1)


Ticketing


294.6



6.3



(0.2)



165.9



(0.2)



122.8


Artist Nation


38.1



1.8



-



115.7



1.2



(80.6)


Sponsorship & Advertising


175.6



0.6



-



1.2



-



173.8


Other and Eliminations


(1.6)



(0.1)



0.2



(1.6)



-



(0.1)


Corporate


(79.0)



22.8



-



2.8



12.8



(117.4)


Total Live Nation


$

459.1



$

37.0



$

(0.5)



$

429.6



$

14.6



$

(21.6)


 

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





($ in millions)

Q4 2013


Q4 2012

Adjusted operating income

$

71.3



$

62.5


Less:  Cash interest expense - net

(13.9)



(23.0)


Cash taxes

(12.8)



(8.4)


Maintenance capital expenditures

(21.1)



(20.8)


Distributions to noncontrolling interests

(5.1)



(10.9)


Distributions from (contributions to) investments in nonconsolidated affiliates

(1.3)



2.0


Free cash flow

$

17.1



$

1.4


Revenue generating capital expenditures

(15.1)



(14.3)


Net

$

2.0



$

(12.9)






($ in millions)

12 months 2013


12 months 2012

Adjusted operating income

$

505.2



$

459.1


Less:  Cash interest expense - net

(86.7)



(108.0)


Cash taxes

(45.6)



2.2


Maintenance capital expenditures

(59.6)



(63.0)


Distributions to noncontrolling interests

(17.4)



(20.1)


Distributions from (contributions to) investments in nonconsolidated affiliates

4.3



5.5


Free cash flow

$

300.2



$

275.7


Revenue generating capital expenditures

(56.7)



(60.3)


Net

$

243.5



$

215.4


 

Reconciliation of Cash and Cash Equivalents to Free Cash


($ in millions)


December 31,

 2013

Cash and cash equivalents


$

1,299.2


Client cash


(538.4)


Deferred revenue - event-related


(433.8)


Accrued artist fees


(29.3)


Collections on behalf of others


(37.0)


Prepaids related to artist settlements/events


184.0


   Free cash


$

444.7


 

Reconciliation of Net Loss Attributable to Common Stockholders of Live Nation Entertainment, Inc. to

Adjusted Net Income and Adjusted EPS


($ in millions except share and per share data)


12 months 2013


12 months 2012

Net Loss attributable to common stockholders of Live Nation Entertainment, Inc.


$

(43.4)



$

(163.2)


Add:  Loss (gain) on extinguishment of debt


$

36.3



$

(0.5)


Adjusted net loss attributable to common stockholders of Live Nation Entertainment, Inc.


$

(7.1)



$

(163.7)







Basic and diluted adjusted net loss attributable to common stockholders of Live Nation Entertainment, Inc. (Adjusted EPS)


$

(0.04)



$

(0.88)


Photo: http://photos.prnewswire.com/prnh/20140224/LA70780

 

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