(Logo: http://photos.prnewswire.com/prnh/20081203/LAW048LOGO-b) (Logo: http://www.newscom.com/cgi-bin/prnh/20081203/LAW048LOGO-b)
"Our second quarter results were in line with our plan and financial guidance for the full year," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment. "Our performance to date reflects the impact of the uncertain economy on consumers, offset in part by our efforts to aggressively promote, price and expand access to concerts across our global platform. We have now largely completed the integration of Live Nation and Ticketmaster and we are generating considerable progress in driving efficiencies across our combined business. As we head into our biggest quarter, we are executing a range of revenue enhancement programs, while taking additional steps to reduce our operating expenses."
"Key artist tours anticipated during the summer and balance of the year for our artist management business include the Eagles, Jimmy Buffett, Kid Rock, Kings of Leon and the Scorpions, just to name a few, and it is their success that will help fuel our company’s growth," said Irving Azoff, Executive Chairman of Live Nation Entertainment. "As we look to the future, we are more confident than ever in our belief that Live Nation Entertainment has a unique business model to service artists and fans."
Live Nation Combined Metrics
In order to give comparable information, metrics below include the results of the legacy Ticketmaster operations, as applicable, from the date of the merger (January 25) through the three months and six months ended June 30 for each of 2010 and 2009.
COMBINED METRICS
----------------
(Unaudited; $ in millions except as noted)
Key Drivers Q2 2010 Q2 2009 Variance
------- ------- --------
CONCERTS
--------
Talent Costs and Other Event Direct
Operating Expenses $706.1 $773.5 (8.7%)
Number of Concerts
(est.) 5,553 5,707 (2.7%)
Total Attendance (est.) 12,373,000 13,123,000 (5.7%)
Total Revenue per Attendee (whole $) $69.47 $70.47 (1.4%)
------------------------------------ ------ ------ ------
eCOMMERCE
---------
# of Tickets Sold on TM.com & LN.com
(rounded, est.) 23,898,000 26,476,000 (9.7%)
# of Average Monthly Unique Visitors
(rounded, est.) 27,700,000 25,200,000 9.9%
Online Advertising & Upsell Revenue $9.3 $12.8 (27.3%)
----------------------------------- ---- ----- -------
SPONSORSHIP
-----------
Number of Sponsors - as of date (est.) 556 597 (6.9%)
Sponsorship Revenue Recognized $38.8 $39.9 (2.8%)
Average Revenue per Sponsor (rounded,
whole $) $70,000 $67,000 4.5%
------------------------------------- ------- ------- ---
TICKETING
---------
Royalty & Other Direct Ticketing
Expenses $129.6 $161.4 (19.7%)
# of Tickets Sold (rounded, est.) 29,611,000 33,880,000 (12.6%)
Key Drivers 6 months 6 months Variance
2010 2009 --------
---- ----
CONCERTS
--------
Talent Costs and Other Event Direct
Operating Expenses $1,033.9 $1,102.3 (6.2%)
Number of Live Concerts
(est.) 10,164 10,158 0.1%
Total Attendance (est.) 19,339,000 20,177,000 (4.2%)
Total Revenue per Attendee (whole $) $65.55 $66.31 (1.1%)
------------------------------------ ------ ------ ------
eCOMMERCE
---------
# of Tickets Sold on TM.com & LN.com
(rounded, est.) 41,920,000 47,842,000 (12.4%)
# of Average Monthly Unique Visitors
(rounded, est.) 26,900,000 25,300,000 6.3%
Online Advertising & Upsell Revenue $20.8 $21.2 (1.9%)
----------------------------------- ----- ----- ------
SPONSORSHIP
-----------
Number of Sponsors - as of date (est.) 556 597 (6.9%)
Sponsorship Revenue Recognized $60.1 $59.4 1.2%
Average Revenue per Sponsor (rounded,
whole $) $108,000 $99,000 9.1%
------------------------------------- -------- ------- ---
TICKETING
---------
Royalty & Other Direct Ticketing
Expenses $232.7 $299.0 (22.2%)
# of Tickets Sold (rounded, est.) 53,615,000 61,423,000 (12.7%)
(Unaudited; $ in millions, tickets in thousands)
------------------------------------------------
Gross Total
Value of Ticket Mix %
Primary Ticketing Volume Trends by Tickets Volume of
Category Sold Totals Total
---------------------------------- -------- ------ -----
Second Quarter - 2010
---------------------
Concerts $1,081 16,006 54%
Sports 311 5,882 20%
Arts & Theater 284 4,444 15%
Family 82 2,056 7%
Other (1) 51 1,223 4%
--------- --- ----- ---
Total - 2010 $1,809 29,611 100%
------------ ------ ------ ---
Second Quarter - 2009
---------------------
Concerts $1,234 19,236 57%
Sports 311 6,038 18%
Arts & Theater 347 5,409 16%
Family 79 2,059 6%
Other (1) 57 1,138 3%
--------- --- ----- ---
Total - 2009 $2,028 33,880 100%
Gross Total
Value of Ticket Mix %
Primary Ticketing Volume Trends by Tickets Volume of
Category Sold Totals Total
---------------------------------- -------- ------ -----
Six Months - 2010
Concerts $1,906 28,248 53%
Sports 539 10,687 20%
Arts & Theater 529 8,048 15%
Family 185 4,840 9%
Other (1) 66 1,792 3%
--------- --- ----- ---
Total - 2010 $3,225 53,615 100%
------------ ------ ------ ---
Six Months - 2009
-----------------
Concerts $2,298 34,058 55%
Sports 524 11,144 18%
Arts & Theater 635 9,582 16%
Family 172 4,767 8%
Other (1) 80 1,872 3%
--------- --- ----- ---
Total - 2009 $3,709 61,423 100%
Our results of operations include the results of the legacy Ticketmaster operations only in 2010. 2009 only includes the historical Live Nation results below.
REPORTED FINANCIAL HIGHLIGHTS - 2nd QUARTER
-------------------------------------------
(Unaudited)
-----------
Q2 2010 Q2 2009 Growth
------- ------- ------
($ in millions)
Revenue
Concerts $859.5 $924.8 (7.1%)
Artist Nation 88.8 61.7 43.9%
Ticketing 264.1 17.1 **
Sponsorship 38.8 39.6 (2.0%)
eCommerce 18.9 3.7 **
Other & Eliminations (3.5) 0.3 **
---- --- ---
$1,266.6 $1,047.2 21.0%
======== ======== ====
Margins
-------
Adjusted Operating Income
(Loss) Q2 2010 Q2 2009
------- -------
Concerts $24.3 $25.3 (4.0%) 2.8% 2.7%
Artist Nation 9.9 2.4 ** 11.1% 3.9%
Ticketing 63.8 2.3 ** 24.2% 13.5%
Sponsorship 26.4 27.1 (2.6%) 68.0% 68.4%
eCommerce 3.2 (1.6) ** 16.9% **
Other & Eliminations (0.6) 0.5 **
Corporate (14.7) (11.0) (33.6%)
----- ----- -------
$112.3 $45.0 ** 8.9% 4.3%
====== ===== === --- ---
Operating Income (Loss)
Concerts $(3.9) $(4.5) 13.3% (0.5%) (0.5%)
Artist Nation (1.4) 0.4 ** (1.6%) 0.6%
Ticketing 34.8 (0.2) ** 13.2% (1.2%)
Sponsorship 26.2 27.1 (3.3%) 67.5% 68.4%
eCommerce 2.6 (2.9) ** 13.8% **
Other & Eliminations 0.4 0.4 -
Corporate (19.1) (13.5) (41.5%)
----- ----- -------
$39.6 $6.8 ** 3.1% 0.6%
===== ==== === --- ---
Acquisition Expenses:
Concerts $0.6 $-
Artist Nation 5.7 -
Ticketing 2.8 -
Sponsorship (0.2) -
eCommerce 0.4 -
Corporate 3.7 14.9
--- ----
$26.6 $(8.1) 2.1% (0.8%)
===== ===== --- ------
** percentages are not meaningful
Our results of operations include the results of the legacy Ticketmaster operations only in 2010, beginning January 25. 2009 only includes the historical Live Nation results below.
REPORTED FINANCIAL HIGHLIGHTS - SIX MONTHS ENDED JUNE 30
--------------------------------------------------------
(Unaudited)
-----------
6 months 6 months
2010 2009 Growth
--------- --------- ------
$in millions
Revenue
Concerts $1,267.6 $1,338.0 (5.3%)
Artist Nation 158.3 103.4 53.1%
Ticketing 473.0 26.0 **
Sponsorship 60.1 58.8 2.2%
eCommerce 37.0 5.5 **
Other &
Eliminations (6.4) 0.4 **
$1,989.6 $1,532.1 29.9%
======== ======== ====
Margins
-------
Adjusted
Operating Income 6 months 6 months
(Loss) 2010 2009
--------- ---------
Concerts $(18.3) $(2.1) ** (1.4%) (0.2%)
Artist Nation 10.7 1.5 ** 6.8% 1.5%
Ticketing 109.6 (0.9) ** 23.2% (3.5%)
Sponsorship 35.0 32.9 6.4% 58.2% 56.0%
eCommerce 10.9 (4.4) ** 29.5% **
Other &
Eliminations (0.3) 0.6 **
Corporate (33.8) (22.1) 52.9%
----- ----- ----
$113.8 $5.5 ** 5.7% 0.4%
====== ==== === --- ---
Operating Income
(Loss)
Concerts $(76.8) $(66.8) (15.0%) (6.1%) (5.0%)
Artist Nation (9.9) (3.8) ** (6.3%) (3.7%)
Ticketing 50.7 (6.2) ** 10.7% (23.8%)
Sponsorship 34.6 32.8 5.5% 57.6% 55.8%
eCommerce 7.6 (7.4) ** 20.5% **
Other &
Eliminations 0.6 0.5 20.0%
Corporate (52.1) (26.8) (94.4%)
----- ----- -------
$(45.3) $(77.7) 41.7% (2.3%) (5.1%)
====== ====== ==== ------ ------
Acquisition
Expenses:
Concerts $0.6 $0.1
Artist Nation 5.8 -
Ticketing 6.5 -
Sponsorship 0.1 -
eCommerce 0.7 -
Corporate 17.9 18.6
-- --
$(76.9) $(96.4) (3.9%) (6.3%)
** percentages are not meaningful
In order to give comparable information, the results of operations below include the results of the legacy Ticketmaster operations for each of 2010 and 2009.
COMBINED FINANCIAL HIGHLIGHTS - 2nd QUARTER
-------------------------------------------
(Unaudited)
-----------
Q2 2010 Q2 2009 Growth
------- ------- ------
($ in millions)
Revenue
Concerts $859.5 $924.8 (7.1%)
Artist Nation 88.8 107.7 (17.5%)
Ticketing 264.1 308.3 (14.3%)
Sponsorship 38.8 39.9 (2.8%)
eCommerce 18.9 21.1 (10.4%)
Other & Eliminations (3.5) 0.4 **
---- --- ---
$1,266.6 $1,402.2 (9.7%)
======== ======== ======
Margins
-------
Adjusted Operating Income
(Loss) Q2 2010 Q2 2009
------- -------
Concerts $24.3 $25.3 (4.0%) 2.8% 2.7%
Artist Nation 9.9 14.2 (30.3%) 11.1% 13.2%
Ticketing 63.8 54.8 16.4% 24.2% 17.8%
Sponsorship 26.4 27.4 (3.6%) 68.0% 68.7%
eCommerce 3.2 7.8 (59.0%) 16.9% 37.0%
Other & Eliminations (0.6) 0.5 **
Corporate (14.7) (20.2) 27.2%
----- ----- ----
$112.3 $109.8 2.3% 8.9% 7.8%
====== ====== === --- ---
Operating Income (Loss)
Concerts $(3.9) $(4.5) 13.3% (0.5%) (0.5%)
Artist Nation (1.4) (0.5) ** (1.6%) (0.5%)
Ticketing 34.8 25.7 35.4% 13.2% 8.3%
Sponsorship 26.2 27.3 (4.0%) 67.5% 68.4%
eCommerce 2.6 5.6 (53.6%) 13.8% 26.5%
Other & Eliminations 0.4 0.4 -
Corporate (19.1) (23.7) 19.4%
----- ----- ----
$39.6 $30.3 30.7% 3.1% 2.2%
===== ===== ==== --- ---
Acquisition Expenses:
Concerts $0.6 $-
Artist Nation 5.7 -
Ticketing 2.8 -
Sponsorship (0.2) -
eCommerce 0.4 -
Corporate 3.7 23.4
--- ----
$26.6 $6.9 2.1% 0.5%
===== ==== --- ---
** percentages are not meaningful
The highlights of our combined financial information for the three months ending June 30, 2010 compared to the same period of 2009 are as follows:
Revenue change - Total decrease of $135.6 million, primarily driven by:
-- ($65.3) million - Decrease in Concerts driven by reduced attendance
and lower average revenue per ticket.
-- ($44.2) million - Decrease in Ticketing driven by lower ticket sales,
primarily in the concerts category.
-- ($18.9) million - Decline in Artist Nation due to reduced activity
based on the timing of artist tours in 2010 as compared to last year.
Adjusted Operating Income (Loss) change – Total increase of $2.5 million, primarily driven by:
-- $9.0 million - Increase in Ticketing relating to the synergies
achieved in the Ticketmaster merger and benefits from reduced expenses
due to purchase accounting valuations, partially offset by lower
income from reduced ticket sales.
-- $5.5 million - Reduction in Corporate costs driven by the achievement
of synergies due to the merger.
-- ($9.9) million - Decrease in Concerts, Artist Nation and eCommerce
driven by lower ticket sales and the timing of artist tours.
Operating Income (Loss) change – Total increase of $19.7 million, primarily driven by:
-- $2.5 million - Overall increase in Adjusted Operating Income noted
above.
-- $10.4 million - Decrease in acquisition expenses, primarily in
Corporate. These costs are for severance expenses and transaction
costs related to the Ticketmaster merger.
-- $7.4 million - Decline in depreciation and amortization expense due
primarily to an impairment recorded in 2009.
In order to give comparable information, the results of operations below include the results of the legacy Ticketmaster operations from the date of the merger (January 25) through June 30 for each of 2010 and 2009.
COMBINED FINANCIAL HIGHLIGHTS - SIX MONTHS ENDED JUNE 30
(Unaudited)
-----------
6 months 6 months Growth
-------- -------- ------
2010 2009
---- ----
($ in millions)
Revenue
Concerts $1,267.6 $1,338.0 (5.3%)
Artist Nation 158.3 180.7 (12.4%)
Ticketing 473.0 563.6 (16.1%)
Sponsorship 60.1 59.4 1.2%
eCommerce 37.0 35.8 3.4%
Other &
Eliminations (6.4) 0.4 **
---- --- ---
$1,989.6 $2,177.9 (8.6%)
======== ======== ======
Margins
-------
6
Adjusted Operating 6 months months
Income (Loss) 2010 2009
--------- -------
Concerts $(18.3) $(2.1) ** (1.4%) (0.2%)
Artist Nation 10.7 16.4 (34.8%) 6.8% 9.1%
Ticketing 109.6 101.6 7.9% 23.2% 18.0%
Sponsorship 35.0 33.4 4.8% 58.2% 56.2%
eCommerce 10.9 12.2 (10.7%) 29.5% 34.1%
Other &
Eliminations (0.3) 0.6 **
Corporate (33.8) (43.1) 21.6%
----- ----- ----
$113.8 $119.0 (4.4%) 5.7% 5.5%
====== ====== ====== --- ---
Operating Income
(Loss)
Concerts $(76.8) $(66.8) (15.0%) (6.1%) (5.0%)
Artist Nation (9.9) (11.0) 10.0% (6.3%) (6.1%)
Ticketing 50.7 54.5 (7.0%) 10.7% 9.7%
Sponsorship 34.6 33.3 3.9% 57.6% 56.1%
eCommerce 7.6 7.8 (2.6%) 20.5% 21.8%
Other &
Eliminations 0.6 0.5 20.0%
Corporate (52.1) (50.1) (4.0%)
----- ----- ------
$(45.3) $(31.8) (42.1%) (2.3%) (1.5%)
====== ====== ======= ------ ------
Acquisition
Expenses:
Concerts $0.6 $0.1
Artist Nation 5.8 -
Ticketing 6.5 -
Sponsorship 0.1 -
eCommerce 0.7 -
Corporate 17.9 28.2
-- ----
$(76.9) $(60.1) (3.9%) (2.8%)
====== ====== ------ ------
** percentages are not meaningful
The highlights of our combined financial information for the six months ended June 30, 2010 as compared to the same period of 2009 are as follows:
Revenue Change - Total decrease of $188.3 million, primarily driven by:
-- ($90.6) million - Decline in Ticketing due to lower ticket sales,
primarily in concerts.
-- ($70.4) million - Decrease in Concerts driven by reduced attendance
and lower average revenue per ticket.
Adjusted Operating Income (Loss) change – Total decrease of $5.2 million, primarily driven by:
-- ($16.2) million - Decline in Concerts primarily relating to a $13.4
million allowance recorded in the first quarter of 2010 related to
certain artist advances and a slight decline in show results.
-- $8.0 million - Increase in Ticketing driven by the achievement of
synergies from the Ticketmaster merger and benefits of reduced
expenses from purchase accounting valuations, partially offset by
lower income from reduced ticket sales.
Operating Income (Loss) change – Total decrease of $16.8 million, primarily driven by:
-- ($5.2) million - Overall decrease in adjusted operating income noted
above.
-- ($14.0) million - Increase in non-cash compensation expense primarily
driven by equity awards exchanged and accelerated due to the
completion of the merger.
-- ($4.9) million - Increased loss on sale primarily due to the $5.2
million loss resulting from our sale of Paciolan in the first quarter
of 2010.
-- $10.6 million - Decrease in depreciation and amortization primarily
due to a 2009 impairment.
Other Information -
-- As of June 30, 2010, our cash and cash equivalents were $1.0 billion
and our current and long-term debt was $1.7 billion, with no balance
outstanding on our revolving credit facility.
-- In May 2010, we completed the refinancing of the company's two credit
facilities into one credit facility, thereby reducing the operational
and credit risk of the company.
-- Free cash as of June 30, 2010 was $328.6 million. Free cash flow was
$63.5 million for the second quarter of 2010 as compared to $16.4
million for the same period in 2009, and $30.6 million for the six
months ended June 30, 2010 as compared to ($41.1) million in the same
period of last year.
-- For the six months ended June 30, 2010, maintenance capital
expenditures were $22.6 million and capital expenditures for revenue
generating projects were $7.2 million, for a total of $29.8 million.
This represents an increase of $5.2 million compared to last year
primarily due to the merger with Ticketmaster.
About Live Nation Entertainment:
Live Nation Entertainment (NYSE-LYV) is the largest live entertainment company in the world, consisting of five businesses: concert promotion and venue operations, sponsorship, ticketing solutions, eCommerce and artist management. Live Nation seeks to innovate and enhance the live entertainment experience for artists and fans: before, during and after the show. In 2009, Live Nation sold 140 million tickets, promoted nearly 22,000 concerts, partnered with 850 sponsors and averaged 25 million unique monthly users of its eCommerce sites. For additional information, visit www.livenation.com/investors.
Conference Call:
The company will host a teleconference today, August 5th, 2010 at 5:00 p.m. Eastern Time, which can be accessed by dialing 888-603-6873 (U.S.) or 973-321-1019 (Int’l) and referencing passcode 89305432. To access the call via webcast, please visit the Investor Relations section of the company’s website at www.livenation.com/investors. Please visit the website approximately ten minutes prior to the start time to ensure a connection. Additional statistical and financial information to be provided on the call, if any, will be posted supplementally under that same link. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the Live Nation website through August 12, 2010.
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
June 30,
2010 2009
(in thousands except share and per share data)
Revenue $1,266,598 $1,047,216
Operating expenses:
Direct operating expenses 897,004 838,731
Selling, general and
administrative expenses 252,372 154,606
Depreciation and
amortization 62,957 35,503
Loss (gain) on sale of
operating assets (637) (718)
Corporate
expenses 21,882 12,352
Acquisition
transaction
expenses 6,394 14,877
Operating income
(loss) 26,626 (8,135)
Interest
expense 29,854 15,864
Loss on extinguishment of
debt 21,172 -
Interest
income (769) (576)
Equity in earnings of
nonconsolidated
affiliates (1,708) (633)
Other expense (income)
- net (565) (1,087)
Loss from continuing operations before income
taxes (21,358) (21,703)
Income tax expense (benefit):
Current 5,682 9,177
Deferred 5,633 (574)
Loss from continuing
operations (32,673) (30,306)
Income (loss) from discontinued operations,
net of tax (377) 3,498
Net
loss (33,050) (26,808)
Net income (loss) attributable to
noncontrolling
interests 1,568 390
----- ---
Net loss attributable to Live Nation
Entertainment,
Inc. $(34,618) $(27,198)
Basic and diluted income (loss) per common
share attributable to common stockholders:
Loss from continuing operations
attributable to Live
Nation $(0.20) $(0.37)
Entertainment, Inc
Income (loss) from
discontinued operations
attributable
to - 0.04
Live Nation Entertainment, Inc
Net loss attributable to
Live Nation Entertainment,
Inc. $(0.20) $(0.33)
Weighted average common shares outstanding:
Basic and
diluted 170,007,727 83,612,409
Six Months Ended
June 30,
2010 2009
(in thousands except share and per share data)
Revenue $1,989,551 $1,532,128
Operating expenses:
Direct operating
expenses 1,382,157 1,211,791
Selling, general and
administrative
expenses 483,643 295,508
Depreciation and
amortization 122,276 77,586
Loss (gain) on sale of
operating
assets 3,934 (982)
Corporate
expenses 59,006 25,884
Acquisition transaction
expenses 15,411 18,735
Operating income
(loss) (76,876) (96,394)
Interest
expense 56,359 33,119
Loss on extinguishment of
debt 21,172 -
Interest
income (1,443) (1,566 )
Equity in earnings of
nonconsolidated
affiliates (2,255) (816 )
Other expense (income)
- net (1,633) 607
Loss from continuing operations before
income
taxes (149,076) (127,738)
Income tax expense (benefit):
Current 3,840 10,876
Deferred (7,855) (2,187)
Loss from continuing
operations (145,061) (136,427)
Income (loss) from
discontinued operations, net of
tax (680) 6,462
Net
loss (145,741) (129,965)
Net income (loss) attributable to
noncontrolling
interests 830 (60)
--- ---
Net loss attributable to Live Nation
Entertainment,
Inc. $(146,571) $(129,905)
Basic and diluted income (loss) per common
share attributable to common stockholders:
Loss from continuing operations
attributable to Live
Nation $(0.92) $(1.67)
Entertainment, Inc
Income (loss) from
discontinued operations
attributable
to (0.01) 0.08
Live Nation Entertainment, Inc
Net loss attributable to Live Nation
Entertainment,
Inc. $(0.93) $(1.59)
Weighted average common shares outstanding:
Basic and
diluted 158,219,805 81,618,066
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
December
June 30, 31, 2009
2010 --------
----
(Unaudited) (Audited)
----------- ---------
(in thousands)
ASSETS
Current assets
Cash and cash equivalents $999,928 $236,955
Accounts receivable, less allowance of
$9,429 as of June 30, 2010 and 365,034 176,179
$8,230 as of December 31, 2009
Prepaid expenses 549,508 277,599
Other current assets 62,882 27,133
------ ------
Total current assets 1,977,352 717,866
Property, plant and equipment
Land, buildings and improvements 873,019 875,958
Computer equipment and capitalized
software 176,638 131,875
Furniture and other equipment 161,538 156,756
Construction in progress 27,991 17,398
------ ------
1,239,186 1,181,987
Less accumulated depreciation 474,189 432,003
764,997 749,984
Intangible assets
Definite-lived intangible assets - net 967,152 442,641
Indefinite-lived intangible assets 381,983 28,248
Goodwill 1,164,555 204,672
Investments in nonconsolidated
affiliates 29,027 2,077
Other long-term assets 224,833 196,271
------- -------
Total assets $5,509,899 $2,341,759
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, client accounts $370,634 $-
Accounts payable 133,953 50,844
Accrued expenses 436,885 357,138
Deferred revenue 742,518 284,536
Current portion of long-term debt 46,522 41,032
Other current liabilities 81,809 18,684
------ ------
Total current liabilities 1,812,321 752,234
Long-term debt, net 1,692,129 699,037
Long-term deferred income taxes 200,805 30,480
Other long-term liabilities 195,632 94,567
Series A and Series B redeemable
preferred stock - 40,000
Commitments and contingent liabilities
Redeemable noncontrolling interests 120,207 -
Stockholders' equity
Common stock 1,722 860
Additional paid-in capital 2,037,653 1,090,572
Accumulated deficit (580,356) (433,785)
Cost of shares held in treasury (9,629) (9,529)
Accumulated other comprehensive income
(loss) (60,878) 4,199
------- -----
Total Live Nation Entertainment, Inc.
stockholders' equity 1,388,512 652,317
Noncontrolling interests 100,293 73,124
------- ------
Total stockholders' equity 1,488,805 725,441
--------- -------
Total liabilities and stockholders'
equity $5,509,899 $2,341,759
========== ==========
LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30,
--------
2010 2009
---- ----
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(145,741) $(129,965)
Reconciling items:
Depreciation 60,696 54,539
Amortization 61,580 25,759
Deferred income tax benefit (7,855) (1,292)
Amortization of debt issuance costs 1,826 1,712
Amortization of debt discount/premium,
net 3,524 4,298
Provision for uncollectible accounts
receivable and advances 15,189 1,224
Loss on extinguishment of debt - non-
cash portion. 8,272 -
Non-cash compensation expense 32,798 6,525
Unrealized changes in fair value
contingent consideration 4,555 -
Loss (gain) on sale of operating assets 4,614 (986)
Equity in earnings of nonconsolidated
affiliates (2,255) (1,483)
Changes in operating assets and
liabilities, net of effects of
acquisitions and dispositions:
Increase in accounts receivable (63,659) (42,416)
Increase in prepaid expenses (238,446) (315,746)
Increase in other assets (47,098) (45,023)
Increase in accounts payable, accrued
expenses and other liabilities 18,312 154,006
Increase in deferred revenue 461,967 627,574
------- -------
Net cash provided by operating
activities 168,279 338,726
CASH FLOWS FROM INVESTING ACTIVITIES
Collection of notes receivable 638 316
Advances to notes receivable - (132)
Distributions from nonconsolidated
affiliates 964 2,119
Investments made to nonconsolidated
affiliates - (654)
Purchases of property, plant and
equipment (30,082) (39,089)
Proceeds from disposal of operating
assets, net of cash divested 20,753 16,478
Cash paid for acquisitions, net of cash
acquired 566,144 (5,638)
Purchases of intangible assets (1,363) (7,763)
Decrease in other - net 297 165
--- ---
Net cash provided by (used in)
investing activities 557,351 (34,198)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of
debt issuance costs 1,318,637 235,200
Payments on long-term debt (1,182,507) (283,808)
Redemption of preferred stock (40,000) -
Contributions from noncontrolling
interest partners 13 -
Distributions to noncontrolling
interest partners (8,198) (301)
Proceeds from exercise of stock options 4,254 -
Issuance of treasury stock - 1,553
Equity issuance costs (357) -
Payments for purchases of common stock (1,567 ) (5,803 )
Payments for deferred and contingent
consideration. (11,109) (7,392)
------- ------
Net cash provided by (used in)
financing activities 79,166 (60,551)
Effect of exchange rate changes on cash
and cash equivalents (41,823) 26,193
------- ------
Net increase in cash and cash
equivalents 762,973 270,170
Cash and cash equivalents at beginning
of period 236,955 199,660
------- -------
Cash and cash equivalents at end of
period $999,928 $469,830
======== ========
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 potential health and growth of Live Nation’s business, including with respect to anticipated achievement of projected financial results for the full year and anticipated artist tours for the remainder of the year; the company’s ability to achieve its targeted synergies and realize other anticipated benefits associated with its merger with Ticketmaster; the company’s planned capital expenditures; and the expected reduction of operational and credit risks as a result of the recent refinancing of the company’s credit facilities. 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, challenges related to the post-merger integration of Live Nation and Ticketmaster, 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, merger bonuses, payments under the Azoff Trust note and merger-related severance), depreciation and amortization (including goodwill impairment), loss (gain) on sale of operating assets and non-cash compensation expense. The company uses AOI to evaluate the performance of our operating segments. The company believes that information about AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of 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 our 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 minority 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 our ability to fund our 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 finance venue and other revenue generating 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)
AS REPORTED RESULTS
-------------------
Reconciliation of Adjusted Operating Income (Loss) to
Operating Income (Loss)
-----------------------------------------------------
Loss (gain)
($ in millions) Adjusted Non-cash on
sale of
operating compensation operating
income
(loss) expense assets
Three months ended June 30, 2010
--------------------------------
Concerts $24.3 $1.6 $(1.2)
Artist Nation 9.9 1.1 -
Ticketing 63.8 3.5 0.6
Sponsorship 26.4 0.1 -
eCommerce 3.2 0.2 -
Other &
Eliminations (0.6) - -
Corporate (14.7) 3.9 -
----- --- ---
Total Live Nation $112.3 $10.4 $(0.6)
====== ===== =====
Three months ended June 30, 2009
--------------------------------
Concerts $25.3 $1.4 $(0.7)
Artist Nation 2.4 - -
Ticketing 2.3 0.1 -
Sponsorship 27.1 - -
eCommerce (1.6) - -
Other &
Eliminations 0.5 - -
Corporate (11.0) 1.9 -
----- --- ---
Total Live Nation $45.0 $3.4 $(0.7)
===== ==== =====
Six months ended June 30, 2010
------------------------------
Concerts $(18.3) $3.6 $(1.3)
Artist Nation 10.7 2.4 -
Ticketing 109.6 9.3 5.2
Sponsorship 35.0 0.2 -
eCommerce 10.9 0.2 -
Other &
Eliminations (0.3) 0.1 -
Corporate (33.8) 17.0 -
----- ---- ---
Total Live Nation $113.8 $32.8 $3.9
====== ===== ====
Six months ended June 30, 2009
------------------------------
Concerts $(2.1) $2.1 $(1.0)
Artist Nation 1.5 0.3 -
Ticketing (0.9) 0.1 -
Sponsorship 32.9 - -
eCommerce (4.4) 0.2 -
Other &
Eliminations 0.6 - -
Corporate (22.1) 3.8 -
----- --- ---
Total Live Nation $5.5 $6.5 $(1.0)
==== ==== =====
Reconciliations of Non-GAAP Measures to Their Most
Directly Comparable GAAP
Measures (Unaudited)
AS REPORTED RESULTS
-------------------
Reconciliation of Adjusted Operating Income (Loss)
to Operating Income (Loss)
-----------------------------------------------------------
($ in millions) Acquisition Depreciation Operating
income
expenses and (loss)
amortization
Three months ended June 30, 2010
--------------------------------
Concerts $0.6 $27.8 $(4.5)
Artist Nation 5.7 10.2 (7.1)
Ticketing 2.8 24.9 32.0
Sponsorship (0.2) 0.1 26.4
eCommerce 0.4 0.4 2.2
Other &
Eliminations - (1.0) 0.4
Corporate 3.7 0.5 (22.8)
--- --- -----
Total Live Nation $13.0 $62.9 $26.6
===== ===== =====
Three months ended June 30, 2009
--------------------------------
Concerts $- $29.1 $(4.5)
Artist Nation - 2.0 0.4
Ticketing - 2.4 (0.2)
Sponsorship - - 27.1
eCommerce - 1.3 (2.9)
Other &
Eliminations - 0.1 0.4
Corporate 14.9 0.6 (28.4)
---- --- -----
Total Live Nation $14.9 $35.5 $(8.1)
===== ===== =====
Six months ended June 30, 2010
------------------------------
Concerts $0.6 $56.2 $(77.4)
Artist Nation 5.8 18.2 (15.7)
Ticketing 6.5 44.4 44.2
Sponsorship 0.1 0.2 34.5
eCommerce 0.7 3.1 6.9
Other &
Eliminations - (1.0) 0.6
Corporate 17.9 1.3 (70.0)
---- --- -----
Total Live Nation $31.6 $122.4 $(76.9)
===== ====== ======
Six months ended June 30, 2009
------------------------------
Concerts $0.1 $63.6 $(66.9)
Artist Nation - 5.0 (3.8)
Ticketing - 5.2 (6.2)
Sponsorship - 0.1 32.8
eCommerce - 2.8 (7.4)
Other &
Eliminations - 0.1 0.5
Corporate 18.6 0.9 (45.4)
---- --- -----
Total Live Nation $18.7 $77.7 $(96.4)
===== ===== ======
Reconciliations of Non-GAAP Measures to Their Most Directly
Comparable GAAP Measures (Unaudited)
COMBINED RESULTS
----------------
Reconciliation of Adjusted Operating Income (Loss) to Operating
Income (Loss)
---------------------------------------------------------------
($
in Loss (gain)
millions) Adjusted Non-cash on
operating compensation sale of
income expense operating
(loss) assets
Three months ended June 30, 2010
--------------------------------
Concerts $24.3 $1.6 $(1.2)
Artist
Nation 9.9 1.1 -
Ticketing 63.8 3.5 0.6
Sponsorship 26.4 0.1 -
eCommerce 3.2 0.2 -
Other
&
Eliminations (0.6) - -
Corporate (14.7) 3.9 -
----- --- ---
Total
Live
Nation $112.3 $10.4 $(0.6)
====== ===== =====
Three months ended June 30, 2009
--------------------------------
Concerts $25.3 $1.4 $(0.7)
Artist
Nation 14.2 3.9 -
Ticketing 54.8 1.5 -
Sponsorship 27.4 - -
eCommerce 7.8 - -
Other
&
Eliminations 0.5 - -
Corporate (20.2) 3.0 -
----- --- ---
Total
Live
Nation $109.8 $9.8 $(0.7)
====== ==== =====
Six months ended June 30, 2010
------------------------------
Concerts $(18.3) $3.6 $(1.3)
Artist
Nation 10.7 2.4 -
Ticketing 109.6 9.3 5.2
Sponsorship 35.0 0.2 -
eCommerce 10.9 0.2 -
Other
&
Eliminations (0.3) 0.1 -
Corporate (33.8) 17.0 -
----- ---- ---
Total
Live
Nation $113.8 $32.8 $3.9
====== ===== ====
Six months ended June 30, 2009
------------------------------
Concerts $(2.1) $2.1 $(1.0)
Artist
Nation 16.4 7.3 -
Ticketing 101.6 3.1 -
Sponsorship 33.4 - -
eCommerce 12.2 0.3 -
Other
&
Eliminations 0.6 - -
Corporate (43.1) 6.0 -
----- --- ---
Total
Live
Nation $119.0 $18.8 $(1.0)
====== ===== =====
Reconciliations of Non-GAAP Measures to Their Most
Directly Comparable GAAP Measures (Unaudited)
COMBINED RESULTS
----------------
Reconciliation of Adjusted Operating Income (Loss) to
Operating Income (Loss)
-----------------------------------------------------
($
in
millions) Acquisition Depreciation Operating
income
expenses and (loss)
amortization
Three months ended June 30, 2010
--------------------------------
Concerts $0.6 $27.8 $(4.5)
Artist
Nation 5.7 10.2 (7.1)
Ticketing 2.8 24.9 32.0
Sponsorship (0.2) 0.1 26.4
eCommerce 0.4 0.4 2.2
Other
&
Eliminations - (1.0) 0.4
Corporate 3.7 0.5 (22.8)
--- --- -----
Total
Live
Nation $13.0 $62.9 $26.6
===== ===== =====
Three months ended June 30, 2009
--------------------------------
Concerts $- $29.1 $(4.5)
Artist
Nation - 10.8 (0.5)
Ticketing - 27.6 25.7
Sponsorship - 0.1 27.3
eCommerce - 2.2 5.6
Other
&
Eliminations - 0.1 0.4
Corporate 23.4 0.5 (47.1)
---- --- -----
Total
Live
Nation $23.4 $70.4 $6.9
===== ===== ====
Six months ended June 30, 2010
------------------------------
Concerts $0.6 $56.2 $(77.4)
Artist
Nation 5.8 18.2 (15.7)
Ticketing 6.5 44.4 44.2
Sponsorship 0.1 0.2 34.5
eCommerce 0.7 3.1 6.9
Other
&
Eliminations - (1.0) 0.6
Corporate 17.9 1.3 (70.0)
---- --- -----
Total
Live
Nation $31.6 $122.4 $(76.9)
===== ====== ======
Six months ended June 30, 2009
------------------------------
Concerts $0.1 $63.6 $(66.9)
Artist
Nation - 20.1 (11.0)
Ticketing - 44.0 54.5
Sponsorship - 0.1 33.3
eCommerce - 4.1 7.8
Other
&
Eliminations - 0.1 0.5
Corporate 28.2 1.0 (78.3)
---- --- -----
Total
Live
Nation $28.3 $133.0 $(60.1)
===== ====== ======
Reconciliation of Adjusted Operating Income (Loss) to Free Cash Flow
--------------------------------------------------------------------
($ in millions) Reported Reported Combined
--------------- Q2 2010 Q2 2009 Q2 2009
------- ------- -------
Adjusted operating income $112.3 $45.0 $109.8
Less: Cash interest expense -
net (26.6) (12.3) (25.7)
Cash taxes (5.6) (10.6) (19.9)
Maintenance capital
expenditures (15.3) (5.7) (13.5)
Distributions to noncontrolling
interest partners (1.5) (0.3) (5.7)
Distributions from
(contributions to) investments
in nonconsolidated affiliates 0.2 0.3 3.2
--- --- ---
Free cash flow $63.5 $16.4 $48.2
-------------- ----- ----- -----
($ in millions) Reported Reported Combined
6 6
--------------- months months 6 months
2010 2009 2009
---- ---- ----
Adjusted operating income $113.8 $5.5 $119.0
Less: Cash interest expense -
net (49.6) (25.5) (55.5)
Cash taxes (3.8) (13.6) (30.1)
Maintenance capital
expenditures (22.6) (8.7) (23.0)
Distributions to noncontrolling
interest partners (8.2) (0.3) (6.0)
Distributions from
(contributions to) investments
in nonconsolidated affiliates 1.0 1.5 4.3
--- --- ---
Free cash flow $30.6 $(41.1) $8.7
-------------- ----- ------ ----
Reconciliation of Cash and Cash Equivalents to Free Cash
--------------------------------------------------------
June 30,
($ in millions) 2010
Cash and cash equivalents $999.9
Client Cash $(308.7)
Deferred revenue - event related $(697.3)
Accrued artist fees $(8.9)
Collections on behalf of others $(27.6)
Prepaids related to artist
settlements/events $371.2
------
Free cash $328.6
--------- ------
First Call Analyst:
FCMN Contact:
[email protected],[email protected],CrystalLafata@LiveNat
ion.com
Photo: http://www.newscom.com/cgi-bin/prnh/20081203/LAW048LOGO-b
AP Archive: http://photoarchive.ap.org/
http://photos.prnewswire.com/prnh/20081203/LAW048LOGO-b
PRN Photo Desk, [email protected]
SOURCE: Live Nation Entertainment