Quarterly report pursuant to Section 13 or 15(d)

EQUITY

v2.4.0.8
EQUITY
9 Months Ended
Sep. 30, 2014
Equity [Abstract]  
EQUITY
EQUITY
The following table shows the reconciliation of the carrying amount of stockholders’ equity attributable to Live Nation Entertainment, Inc., equity attributable to noncontrolling interests, total equity and also redeemable noncontrolling interests for the nine months ended September 30, 2014:
 
Live Nation
Entertainment, Inc.
Stockholders’  Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Redeemable
Noncontrolling
Interests
 
(in thousands)
 
(in thousands)
Balance at December 31, 2013
$
1,409,228

 
$
180,578

 
$
1,589,806

 
$
61,041

Non-cash and stock-based compensation
31,531

 

 
31,531

 

Common stock issued under stock plans, net of shares withheld for employee taxes
(14,891
)
 

 
(14,891
)
 

Exercise of stock options
14,142

 

 
14,142

 

Fair value of convertible debt conversion feature, net of issuance costs
21,444

 

 
21,444

 

Acquisitions

 
3,343

 
3,343

 

Purchases of noncontrolling interests
(1,721
)
 
6

 
(1,715
)
 
(4,291
)
Sales of noncontrolling interests
(11,748
)
 
(158
)
 
(11,906
)
 
19,249

Redeemable noncontrolling interests fair value adjustments
(3,702
)
 

 
(3,702
)
 
3,702

Noncontrolling interests contributions

 
106

 
106

 

Cash distributions

 
(21,971
)
 
(21,971
)
 
(1,993
)
Other

 
(4,559
)
 
(4,559
)
 

Comprehensive income (loss):
 
 
 
 

 
 
Net income (loss)
95,649

 
19,175

 
114,824

 
(3,272
)
Unrealized loss on cash flow hedges
(2
)
 

 
(2
)
 

Realized loss on cash flow hedges
48

 

 
48

 

Change in funded status of defined benefit pension plan
30

 

 
30

 

Foreign currency translation adjustments
(35,283
)
 

 
(35,283
)
 

Balance at September 30, 2014
$
1,504,725

 
$
176,520

 
$
1,681,245

 
$
74,436


Common Stock
During the first nine months of 2014, the Company issued 2.0 million shares of common stock in connection with stock option exercises and vestings of restricted stock awards, net of shares withheld for taxes.
Redeemable Noncontrolling Interests
The Company is subject to put arrangements arising from business combinations where the holders of the noncontrolling interests can require the Company to repurchase their shares at specified dates in the future or within specified periods in the future. Certain of these puts can be exercised earlier upon the occurrence of triggering events as specified in the agreements. The exercise dates for these puts range from January 2015 to December 2019. The redemption amounts for these puts are either at fair value at the time of exercise or a variable amount based on a formula linked to earnings. In accordance with the FASB guidance for business combinations, the redeemable noncontrolling interests are recorded at their fair value at acquisition date. As these put arrangements are not currently redeemable, the Company accretes up to the estimated redemption value over the period from the date of issuance to the earliest redemption date of the individual puts, with the offset recorded to additional paid-in capital. Decreases in accretion are only recognized to the extent that increases had been previously recognized. The estimated redemption values that are based on a formula linked to future earnings are computed using projected cash flows each reporting period which take into account the current expectations regarding profitability and the timing of revenue-generating events.
Accumulated Other Comprehensive Income (Loss)
The following table presents changes in the components of AOCI, net of taxes, for the nine months ended September 30, 2014:
 
 
Gains and Losses On Cash Flow Hedges
 
Defined Benefit Pension Items
 
Foreign Currency Items
 
Total
 
 
(in thousands)
Balance at December 31, 2013
 
$
(79
)
 
$
(611
)
 
$
(1,680
)
 
$
(2,370
)
Other comprehensive income (loss) before reclassifications
 
(2
)
 
30

 
(35,283
)
 
(35,255
)
Amount reclassified from AOCI
 
48

 

 

 
48

Net other comprehensive income (loss)
 
46

 
30

 
(35,283
)
 
(35,207
)
Balance at September 30, 2014
 
$
(33
)
 
$
(581
)
 
$
(36,963
)
 
$
(37,577
)

The realized loss on cash flow hedges reclassified from AOCI consists of one interest rate swap agreement.
Earnings Per Share
The following table sets forth the computation of basic and diluted net income per common share:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
 
(in thousands except share and per share data)
Net income attributable to common stockholders of Live Nation Entertainment, Inc.
$
105,163

 
$
43,774

 
$
95,649

 
$
38,665

Accretion of redeemable noncontrolling interests
(1,198
)
 
(265
)
 
(3,702
)
 
(424
)
Net income available to common stockholders of Live Nation Entertainment, Inc.—basic
$
103,965

 
$
43,509

 
$
91,947

 
$
38,241

Convertible debt interest, net of tax
4,813

 

 

 

Net income available to common stockholders of Live Nation Entertainment, Inc.—diluted
108,778

 
43,509

 
91,947

 
38,241

 
 
 
 
 
 
 
 
Weighted average common shares—basic
199,261,810

 
196,396,704

 
198,612,221

 
192,792,286

Effect of dilutive securities:
 
 
 
 
 
 
 
        Stock options, restricted stock and warrants
7,340,484

 
5,713,079

 
7,621,353

 
4,474,003

        Convertible senior notes
14,979,289

 

 

 

Weighted average common shares—diluted
221,581,583

 
202,109,783

 
206,233,574

 
197,266,289

 
 
 
 
 
 
 
 
Basic net income available to common stockholders of Live Nation Entertainment, Inc.
$
0.52

 
$
0.22

 
$
0.46

 
$
0.20

Diluted net income available to common stockholders of Live Nation Entertainment, Inc.
$
0.49

 
$
0.22

 
$
0.45

 
$
0.19


The calculation of diluted net income per common share includes the effects of the assumed exercise of any outstanding stock options and warrants, the assumed vesting of shares of restricted stock awards and the assumed conversion of the 2.5% convertible senior notes and the 2.875% convertible senior notes where dilutive. The following table shows securities excluded from the calculation of diluted net income per common share because such securities are anti-dilutive:
  
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
  
2014
 
2013
 
2014
 
2013
 
(in thousands)
Options to purchase shares of common stock
5,116

 
3,703

 
5,243

 
6,386

Restricted stock awards—unvested
313

 
765

 
344

 
786

Conversion shares related to the convertible senior notes

 
8,105

 
7,930

 
8,105

Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding
5,429

 
12,573

 
13,517

 
15,277