Exhibit 99.1
LIVE NATION REPORTS FOURTH QUARTER
AND FULL-YEAR 2005 FINANCIAL RESULTS
- Company Completed Spin-off During Fourth Quarter -
- - Restructuring Charges Relating to Realignment Complete -
- - Company Repurchased 1.5 Million Shares during Fourth Quarter -
LOS ANGELES, CALIFORNIA – February 21, 2006 – Live Nation (NYSE: LYV), a leading live content
and distribution company, announced today fourth quarter and full-year financial results for the
periods ending December 31, 2005. Live Nation will discuss these results on a conference call and
web cast today at 11:00 AM Eastern Time. A live broadcast of the conference call will be available
on the company’s website, located at www.livenation.com.
“The fourth quarter of 2005 represented a new beginning for our company.” said Michael Rapino, Live
Nation’s Chief Executive Officer. “We entered the public markets on December 22nd as an independent
company under new leadership, with a new strategy, identity and a strong balance sheet. Our
primary focus during the fourth quarter was on rightsizing our cost structure and tightening our
strategic and operational focuses. We exited non-core businesses, reduced our workforce by 10% and
streamlined our reporting structure, realigning 12 separate business units into six.”
“In short, our new strategy is to provide value to artists and fans before, during and after the
live event. By expanding our relationships with our customers beyond the two hour experience of the
show, we believe we can further unlock value in our key assets: our 149 venues, that we own, manage
or book, our global and national touring platform, and the 60 million fans who attend our events.
In addition, we believe the establishment of the Live Nation brand will open up new marketing
opportunities for both our artist and advertising partners. Going forward, we will focus our
resources on maximizing the high margin opportunities within all of our businesses.”
“We are also focused on unlocking the value of our distribution network of 149 venues around the
world. In fact, one of the new business units we created is charged with maximizing the
performance of our venue portfolio. Initial areas of focus will include evaluating our geographic
footprint, our mix of venue properties by type and size, as well as determining the current market
value of our real estate property. Under this new structure, we also expect to realize operational
improvements as we look to improve the overall experience for our customers by expanding on the
quality, as well as the types, of services we provide.”
“Overall, during the 4th quarter of 2005 and the last two months we have made
significant strides in laying the groundwork for the long-term success of our company. However,
there is still much work ahead. The balance of 2006 will represent a period of implementation and
execution for Live Nation. In the years ahead, we expect our new strategic direction will unlock
and create new opportunities for our partners, customers and ultimately, our shareholders. With
the benefit of a strong balance sheet, we also have the financial flexibility to invest in our
business and pursue growth opportunities that enhance shareholder value over the long-term. We
look forward to keeping you updated on our progress.”
On December 21, 2005, Live Nation, Inc., formerly CCE Spinco, Inc., was spun-off from Clear Channel
Communications through a tax free distribution of shares to shareholders of Clear Channel
Communications. For the period prior to the spin-off, the financial information provided
represents the combined historical results of operations for Clear Channel Entertainment prepared
on a stand-alone basis for the live entertainment segment and sports representation business of
Clear Channel Communications
1
and include allocation of expenses from Clear Channel Communications.
At the date of the spin-off, Clear Channel Communications contributed its ownership interest in Clear Channel Entertainment to Live
Nation, Inc.
Fourth Quarter 2005 Financial Results
Revenues for the fourth quarter of 2005 were $752.3 million, an increase of $208.1 million, or
38.2%, as compared to the fourth quarter of 2004. Revenue growth is primarily due to an increase
in global music and other operations of $205.0 million and $10.4 million, respectively. These
increases were partially offset by a decrease in global theater of $7.3 million.
The increase in global music revenue reflects an increase in the number of arena and other larger
events as compared to the same period of 2004 including artists such as U2, Paul McCartney and the
Eagles. Other revenues are higher for fourth quarter of 2005 as compared to the fourth quarter of
2004 due primarily to increased sales of DVDs, such as Spike TV’s Joes vs. Pros and Motley
Crue-Carnival of Sins, and new touring productions. The reduction in Theater revenue arises from
less international tours and lower attendance in fourth quarter of 2005 as compared to the same
period of 2004.
Combined operating loss for the fourth quarter of 2005 was $62.8 million, an increased loss of
$42.6 million, as compared to the fourth quarter of 2004. This was due to increased losses/reduced
operating profits in global music, global theater and other operations of $20.3 million, $12.0
million and $7.7 million, respectively, as well as an increase in corporate operating losses of
$2.5 million.
The increased losses in global music were a result of $4.0 million of litigation contingencies and
expenses, $12.2 million of expenses related to reorganization of business units and reductions in
personnel and a $3.2 million write off of advances on certain music projects. Depreciation in
global music also increased by $2.1 million primarily due to advancing depreciation on assets for
which we have determined the useful life to be shorter than originally expected.
The $12.0 million decline in global theater’s operating results was due to $10.1 million of
reorganization and severance expenses and the reduction in international productions revenue
discussed above.
The $7.7 million increase in losses from other operations in the quarter arose from $3.6 million of
reorganization and severance expenses and a $4.5 million increase in the loss on sale of operating
assets.
Corporate operating loss for the fourth quarter of 2005 was $15.1 million, an increase of $2.5
million as compared to the fourth quarter of 2004. This increase in Corporate is due to $1.0
million in severance related costs and $3.9 million increase in litigation related expenses,
partially offset by lower compensation expense due to terminated employees and lower allocation of
management expenses and royalty expenses from Clear Channel Communications.
Interest expense for the fourth quarter of 2005 totaled $3.4 million, as compared to $.9 million
for the fourth quarter of 2004. The Company also had interest expense with Clear Channel
Communications during the period of $10.7 million, as compared to $9.8 million for the fourth
quarter of 2004. This increase in interest expense was primarily the result of interest related to
the addition of Live Nation’s Term Loan and Redeemable Preferred Stock as of the date of the
spin-off of $.7 million and interest related to a contingent purchase price payment related to a
prior acquisition of $1.1 million. The increase in interest to Clear Channel Communications was
due to an increase in the debt balance prior to the spin-off.
For the fourth quarter of 2005, we recorded a current income tax benefit of $41.1 million as
compared to $13.3 million for the fourth quarter of 2004. This increase in current tax benefit is
due primarily to taxable losses incurred during the period and prior to the spin-off, which were
able to be utilized in consolidation with Clear Channel Communications. For the fourth quarter of
2005, deferred tax expense was $99.7 million as compared to $16.6 million for the fourth quarter of
2004. This increase of $83.1 million is primarily due to a valuation allowance of $77.2 million
recorded during the period and after the spin-off related to Live Nation’s deferred tax asset. As
a subsidiary of Clear Channel Communications, taxable losses of the Company’s subsidiaries were
able to be utilized under a consolidated income tax return with
2
Clear Channel Communications. After the spin-off, the deferred tax asset of Live Nation, Inc. had to be
evaluated on a stand-alone basis based on prior historical taxable income. Since Live Nation, Inc.
has had a history of taxable losses, we were required to record a valuation allowance against this
asset.
Net loss for the fourth quarter of 2005 was $134.9 million, or ($2.02) per share, on a basic and
diluted basis, as compared to the net loss of $34.8 million for the fourth quarter of 2004 for the
reasons discussed above.
Full-Year 2005 Financial Results
Combined revenues for full-year 2005 were $2.9 billion, an increase of $130.7 million, or 4.7%,
compared to the same period of 2004. Revenue growth is due to an increase in global music, global
theater and other operations of $120.3 million, $3.0 million and $7.4 million, respectively. The
increase in global music is driven primarily by the improvement in the fourth quarter discussed
above.
Combined operating loss for the full-year 2005 was $13.2 million as compared to operating income of
$59.0 million for the full-year 2004. This decline of $72.2 million in operating results is driven
by reductions in operating income/increases in operating losses in global music, global theater and
other of $28.9 million, $22.3 million and $.5 million, respectively, and an increase in Corporate
operating losses of $20.5 million.
The full year reduction of $28.9 million in global music’s operating income is principally driven
by $11.3 million of higher litigation contingencies and expenses and $12.2 million of costs related
to severances and reorganization of the business. In addition, we experienced a decline in the
number of events across our domestic amphitheaters as compared to last year.
The $22.3 million decline in global theater’s operating results includes $10.5 million of severance
and other reorganization costs, as well as $1.3 million of increased litigation contingencies and
expenses. During 2005, write-offs of advances on certain theater productions increased $5.5
million and the segment also experienced reduced attendance and show profits.
The $0.5 million increase in operating losses of other operations is driven by $5.6 million of
severance and other reorganization costs and $10.2 million of increased litigation expenses. The
impact of these items was offset by growth in the motor sports business, reduced losses in various
marketing activities as compared to fourth quarter of 2004, and a reduced loss on sale of operating
assets. The loss on sale incurred in 2004 was related to the sale of our international leisure
center operations.
Corporate operating losses for full-year 2005 were $56.8 million, an increase of $20.5 million
compared to the same period of 2004. The increase in Corporate is primarily due to a $4.7 million
increase in severance related costs and a $16.4 million increase in litigation related expenses.
Interest expense for full-year 2005 totaled $6.1 million with outside entities and $46.4 million
with Clear Channel Communications, as compared to $3.1 million and $42.4 million, respectively, for
full-year 2004. The increase is related to the changes in the debt balance with Clear Channel
Communications and our new Term Loan and Redeemable Preferred Stock.
Current income tax benefit for full-year 2005 was $53.0 million, a decrease of $2.9 million
compared to the same period of 2004. Deferred income tax expense was $114.5 million, an increase
of $60.1 million, or 110.5%, compared to the same period of 2004. This increase in deferred tax
expense is primarily due to the $77.2 million valuation reserve recorded in the fourth quarter of
2005.
Net loss for full-year 2005 was $130.6 million, or ($1.96) per share, as compared to net income of
$16.3 million for full-year 2004 for the reasons discussed above.
Share Repurchase
On December 22, 2005, Live Nation’s Board of Directors authorized a $150 million share repurchase
program, authorized through December 31, 2006. As of December 31, 2005, Live Nation had purchased
1.5 million shares for an aggregate purchase price of $18.0 million, including commissions and
fees, at an
3
average price of $11.95 per share. Subsequent to the fourth quarter of 2005, the
company has purchased an additional 1.9 million shares for an aggregate purchase price of $24.7 million, including
commissions and fees, at an average price of $13.22 per share.
Live Nation will continue to base its decisions on amounts of repurchases and their timing on such
factors as the stock price, general economic and market conditions and the Company’s debt levels.
The repurchase program may be suspended or discontinued at any time. Shares of stock repurchased
under the plan will be held as treasury shares.
Other Significant Events During and Subsequent to the Fourth Quarter
| |
• |
|
On December 21, 2005 the company completed its spin-off from Clear Channel
Communications (“CCU”) and entered into several agreements with CCU related to this
transaction, completed its $610.0 million credit agreement and announced its board of
directors. |
| |
| |
• |
|
On January 9, 2006 the company formally changed its name to Live Nation, Inc., from
CCE Spinco, Inc. |
| |
| |
• |
|
On January 25, 2006 the company announced a 15-year agreement to manage and promote
the world famous Wembley Arena in London. |
| |
| |
• |
|
On January 26, 2006, the company announced the sale of a portion of its sports talent
representation business assets located in Los Angeles to Arn Tellem. |
Conference Call
The company will also host a teleconference to discuss its fourth quarter and full-year 2005
financial results today at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time. To access the
teleconference, please dial 973-582-2785 ten minutes prior to the start time. The teleconference
will also be available via live webcast under the “About Us” portion of the company’s website
located at www.livenation.com.
If you cannot listen to the teleconference at its scheduled time, there will be a replay available
through Tuesday, February 28, 2006, which can be accessed by dialing 877-519-4471 (U.S.) or
973-341-3080 (Int’l), passcode 7000639. The webcast will also be archived on the company’s website
for 30 days.
4
About Live Nation
Live Nation is a leading live content and distribution company focused on creating superior
experiences for artists, performers, corporations and fans. Live Nation owns, operates or has
booking rights for 149 venues worldwide and promoted or produced over 28,500 events in 2005. Live
Nation is headquartered in Los Angeles, California. Live Nation is listed on the New York Stock
Exchange, trading under the symbol “LYV”. More information about Live Nation and its businesses is
available at www.livenation.com.
# # #
| |
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Contacts: |
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Investors:
|
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Press: |
John Buckley/Jonathon Lesko
|
|
Ray Yeung |
Brainerd Communicators
|
|
Brainerd Communicators |
(212) 986-6667
|
|
(212) 986-6667 |
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
involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Live Nation to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. The
words or phrases “believe”, “expect”, “anticipate”, “plans”, and “estimates”, and similar words or
expressions are intended to identify such forward-looking statements. In addition, any statements
that refer to expectations or other characterizations of future events or circumstances are
forward-looking statements. Various risks that could cause future results to differ from those
expressed by forward-looking statements include, but are not limited to, those described in Live
Nation’s Form 10 and in the company’s other filings with the SEC. Other unknown or unpredictable
factors could have material adverse effects on Live Nation’s future results, performance or
achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking
events discussed herein may not occur. You are cautioned not to place undue reliance on these
forward-looking statements. Live Nation does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information, future events or otherwise.
(See attached financial statements)
5
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Three months ended |
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Twelve months ended |
|
| (in thousands, except per share data) |
|
December 31, |
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December 31, |
| |
|
2005 |
|
|
2004 |
|
|
% Change |
|
|
2005 |
|
|
2004 |
|
|
% Change |
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| |
|
Unaudited |
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|
Unaudited |
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Unaudited |
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| |
Income Statement |
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Revenue |
|
$ |
752,257 |
|
|
$ |
544,249 |
|
|
|
38.2 |
% |
|
$ |
2,936,845 |
|
|
$ |
2,806,128 |
|
|
|
4.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisional operating expenses |
|
|
779,201 |
|
|
|
537,508 |
|
|
|
45.0 |
% |
|
|
2,829,832 |
|
|
|
2,645,293 |
|
|
|
7.0 |
% |
Depreciation and amortization |
|
|
18,230 |
|
|
|
16,596 |
|
|
|
9.8 |
% |
|
|
64,622 |
|
|
|
64,095 |
|
|
|
0.8 |
% |
Loss (gain) on sale of operating assets |
|
|
5,285 |
|
|
|
(1,029 |
) |
|
|
N/A |
|
|
|
4,859 |
|
|
|
6,371 |
|
|
|
(23.7 |
)% |
Corporate expenses |
|
|
12,324 |
|
|
|
11,409 |
|
|
|
8.0 |
% |
|
|
50,715 |
|
|
|
31,386 |
|
|
|
61.6 |
% |
| |
Operating Income (Loss) |
|
|
(62,783 |
) |
|
|
(20,235 |
) |
|
|
210.3 |
% |
|
|
(13,183 |
) |
|
|
58,983 |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
3,388 |
|
|
|
921 |
|
|
|
267.9 |
% |
|
|
6,059 |
|
|
|
3,119 |
|
|
|
94.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense with Clear Channel
Communications |
|
|
10,718 |
|
|
|
9,805 |
|
|
|
9.3 |
% |
|
|
46,437 |
|
|
|
42,355 |
|
|
|
9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings (loss) of
nonconsolidated affiliates |
|
|
(433 |
) |
|
|
(325 |
) |
|
|
33.2 |
% |
|
|
(276 |
) |
|
|
2,906 |
|
|
|
N/A |
|
Other income (expense) — net |
|
|
981 |
|
|
|
(253 |
) |
|
|
N/A |
|
|
|
(3,176 |
) |
|
|
(1,690 |
) |
|
|
87.9 |
% |
| |
Income (loss) before income taxes |
|
|
(76,341 |
) |
|
|
(31,539 |
) |
|
|
142.1 |
% |
|
|
(69,131 |
) |
|
|
14,725 |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
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Income tax benefit (expense): |
|
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|
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|
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|
|
|
|
|
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|
|
|
|
|
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|
Current |
|
|
41,050 |
|
|
|
13,313 |
|
|
|
208.3 |
% |
|
|
53,025 |
|
|
|
55,946 |
|
|
|
(5.2 |
)% |
Deferred |
|
|
(99,654 |
) |
|
|
(16,603 |
) |
|
|
500.2 |
% |
|
|
(114,513 |
) |
|
|
(54,411 |
) |
|
|
110.5 |
% |
| |
Net Income (loss) |
|
$ |
(134,945 |
) |
|
$ |
(34,829 |
) |
|
|
287.5 |
% |
|
$ |
(130,619 |
) |
|
$ |
16,260 |
|
|
|
N/A |
|
| |
|
|
|
|
|
|
|
|
|
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|
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|
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Net income (loss) per share of common stock: |
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|
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|
|
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|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
| |
Basic |
|
$ |
(2.02 |
) |
|
|
— |
|
|
|
|
|
|
$ |
(1.96 |
) |
|
|
— |
|
|
|
|
|
Diluted |
|
$ |
(2.02 |
) |
|
|
— |
|
|
|
|
|
|
$ |
(1.96 |
) |
|
|
— |
|
|
|
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| |
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|
Weighted Average Shares Outstanding |
|
|
66,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,809 |
|
|
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Divisional Analysis |
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Revenue: |
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|
|
Global Music |
|
$ |
612,933 |
|
|
$ |
407,935 |
|
|
|
50.3 |
% |
|
$ |
2,321,302 |
|
|
$ |
2,201,007 |
|
|
|
5.5 |
% |
Global Theater |
|
|
83,773 |
|
|
|
91,103 |
|
|
|
(8.0 |
)% |
|
|
317,038 |
|
|
|
313,974 |
|
|
|
1.0 |
% |
Other |
|
|
55,551 |
|
|
|
45,211 |
|
|
|
22.9 |
% |
|
|
298,505 |
|
|
|
291,147 |
|
|
|
2.5 |
% |
| |
Consolidated Revenue |
|
$ |
752,257 |
|
|
$ |
544,249 |
|
|
|
38.2 |
% |
|
$ |
2,936,845 |
|
|
$ |
2,806,128 |
|
|
|
4.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Music |
|
$ |
(29,082 |
) |
|
$ |
(8,812 |
) |
|
|
230.0 |
% |
|
$ |
56,522 |
|
|
$ |
85,457 |
|
|
|
(33.9 |
)% |
Global Theater |
|
|
(4,040 |
) |
|
|
8,023 |
|
|
|
N/A |
|
|
|
(1,298 |
) |
|
|
20,996 |
|
|
|
N/A |
|
Other |
|
|
(14,554 |
) |
|
|
(6,866 |
) |
|
|
112.0 |
% |
|
|
(11,631 |
) |
|
|
(11,147 |
) |
|
|
4.3 |
% |
Corporate |
|
|
(15,107 |
) |
|
|
(12,580 |
) |
|
|
20.1 |
% |
|
|
(56,776 |
) |
|
|
(36,323 |
) |
|
|
56.3 |
% |
| |
Consolidated Operating Income (loss) |
|
$ |
(62,783 |
) |
|
$ |
(20,235 |
) |
|
|
210.3 |
% |
|
$ |
(13,183 |
) |
|
$ |
58,983 |
|
|
|
N/A |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OIBDAN (see non-GAAP measures): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Consolidated OIBDAN |
|
$ |
(39,747 |
) |
|
$ |
(4,345 |
) |
|
|
814.8 |
% |
|
$ |
57,554 |
|
|
$ |
130,533 |
|
|
|
(55.9 |
)% |
| |
6
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
|
Year ended December 31, |
|
| |
|
|
|
|
|
|
|
|
|
% |
|
| Balance Sheet Data: |
|
2005 |
|
|
2004 |
|
|
Change |
|
Cash |
|
$ |
403,716 |
|
|
$ |
179,137 |
|
|
|
125.4 |
% |
Total Current Assets |
|
$ |
755,692 |
|
|
$ |
472,557 |
|
|
|
59.9 |
% |
Net Property, Plant & Equipment |
|
$ |
808,919 |
|
|
$ |
793,316 |
|
|
|
2.0 |
% |
Total Assets |
|
$ |
1,776,584 |
|
|
$ |
1,478,706 |
|
|
|
20.1 |
% |
Current Liabilities (excluding current portion of long term debt) |
|
$ |
675,915 |
|
|
$ |
578,131 |
|
|
|
16.9 |
% |
Long Term Debt (including current portion of long term debt) |
|
$ |
366,841 |
|
|
$ |
650,675 |
|
|
|
(43.6 |
)% |
Redeemable Preferred Stock |
|
$ |
40,000 |
|
|
|
— |
|
|
|
N/A |
|
Shareholder’s/Owner’s Equity |
|
$ |
636,700 |
|
|
$ |
156,976 |
|
|
|
305.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
|
Three months ended December 31, |
|
|
Twelve months ended December 31, |
| |
|
2005 |
|
|
2004 |
|
|
% Change |
|
|
2005 |
|
|
2004 |
|
|
% Change |
|
| |
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
| |
Cash Flow Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operations |
|
|
11,710 |
|
|
|
31,341 |
|
|
|
(62.6 |
)% |
|
|
13,913 |
|
|
|
119,898 |
|
|
|
(88.4 |
)% |
Net cash used in investing activities |
|
|
(33,446 |
) |
|
|
(19,414 |
) |
|
|
72.3 |
% |
|
|
(106,049 |
) |
|
|
(84,076 |
) |
|
|
26.1 |
% |
Net cash provided by (used in) financing
activities |
|
|
188,820 |
|
|
|
(21,077 |
) |
|
|
N/A |
|
|
|
345,438 |
|
|
|
23,254 |
|
|
|
1385.5 |
% |
Capital Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
56,325 |
|
|
$ |
31,474 |
|
|
|
79.0 |
% |
New venue expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,195 |
|
|
|
41,961 |
|
|
|
(13.7 |
)% |
| |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
92,520 |
|
|
$ |
73,435 |
|
|
|
26.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (see non-GAAP measures): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
13,913 |
|
|
$ |
119,898 |
|
|
|
(88.4 |
)% |
less: maintenance capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,325 |
|
|
|
31,474 |
|
|
|
79.0 |
% |
| |
Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(42,412 |
) |
|
$ |
88,424 |
|
|
|
N/A |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of OIBDAN to Operating Income (loss) and Net Income (loss) — Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIBDAN |
|
$ |
(39,747 |
) |
|
$ |
(4,345 |
) |
|
|
|
|
|
$ |
57,554 |
|
|
$ |
130,533 |
|
|
|
|
|
Depreciation and amortization |
|
|
18,230 |
|
|
|
16,596 |
|
|
|
|
|
|
|
64,622 |
|
|
|
64,095 |
|
|
|
|
|
Loss (gain) on sale of operating assets |
|
|
5,285 |
|
|
|
(1,029 |
) |
|
|
|
|
|
|
4,859 |
|
|
|
6,371 |
|
|
|
|
|
Non-cash compensation expense |
|
|
(479 |
) |
|
|
323 |
|
|
|
|
|
|
|
1,256 |
|
|
|
1,084 |
|
|
|
|
|
| |
|
|
|
|
Operating Income (loss) |
|
$ |
(62,783 |
) |
|
$ |
(20,235 |
) |
|
|
|
|
|
$ |
(13,183 |
) |
|
$ |
58,983 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
3,388 |
|
|
|
921 |
|
|
|
|
|
|
|
6,059 |
|
|
|
3,119 |
|
|
|
|
|
Interest expense with Clear Channel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications |
|
|
10,718 |
|
|
|
9,805 |
|
|
|
|
|
|
|
46,437 |
|
|
|
42,355 |
|
|
|
|
|
Equity in earnings (loss) of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nonconsolidated affiliates |
|
|
(433 |
) |
|
|
(325 |
) |
|
|
|
|
|
|
(276 |
) |
|
|
2,906 |
|
|
|
|
|
Other income (expense) — net |
|
|
981 |
|
|
|
(253 |
) |
|
|
|
|
|
|
(3,176 |
) |
|
|
(1,690 |
) |
|
|
|
|
| |
|
|
|
|
Income (loss) before income taxes |
|
|
(76,341 |
) |
|
|
(31,539 |
) |
|
|
|
|
|
|
(69,131 |
) |
|
|
14,725 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
41,050 |
|
|
|
13,313 |
|
|
|
|
|
|
|
53,025 |
|
|
|
55,946 |
|
|
|
|
|
Deferred |
|
|
(99,654 |
) |
|
|
(16,603 |
) |
|
|
|
|
|
|
(114,513 |
) |
|
|
(54,411 |
) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
|
$ |
(134,945 |
) |
|
$ |
(34,829 |
) |
|
|
|
|
|
$ |
(130,619 |
) |
|
$ |
16,260 |
|
|
|
|
|
| |
|
|
|
|
7
Explanation of non-GAAP measures
| 1. |
|
OIBDAN – The Company uses OIBDAN (operating income (loss) before depreciation, amortization,
loss (gain) on sale of operating assets and non-cash compensation expense) to evaluate the
performance of its operating segments. The Company believes that information about OIBDAN
assists investors by allowing them to evaluate changes in the operating results of the
Company’s portfolio of business separate from non-operational factors that affect net income,
thus providing insights into both operations and the other factors that affect reported
results. OIBDAN is not calculated or presented in accordance with U.S. generally accepted
accounting principles. A limitation of the use of OIBDAN as a performance measure is that it
does not reflect the periodic costs of certain capitalized tangible and intangible assets used
in generating revenues in our business. Accordingly, OIBDAN 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 U.S. GAAP. Furthermore, this
measure may vary among other companies; thus, OIBDAN as presented above may not be comparable
to similarly titled measures of other companies. |
| |
| 2. |
|
Free Cash Flow – The Company uses free cash flow (cash flow from operations less maintenance
capital expenditures), among other measures, to evaluate the ability of its operations to
generate cash that is available for purposes other than capital expenditures. Management
believes that information about free cash flow provides investors with an important
perspective on the cash available to service debt, make acquisitions and repurchase shares.
Free cash flow is not calculated or presented in accordance with U.S. generally accepted
accounting principles. |
8
