Annual report pursuant to Section 13 and 15(d)

EQUITY

v3.10.0.1
EQUITY
 12 Months Ended
Dec. 31, 2018
Equity [Abstract]  
EQUITY
EQUITY
Dividends
The Company currently intends to retain future earnings, if any, to finance the expansion of its business. Therefore, it does not expect to pay any cash dividends in the foreseeable future. Moreover, the terms of the Company’s senior secured credit facility limit the amount of funds that the Company will have available to declare and distribute as dividends on its common stock. Payment of future cash dividends, if any, will be at the discretion of the Company’s board of directors in accordance with applicable laws after taking into account various factors, including the financial condition, operating results, current and anticipated cash needs, plans for expansion and contractual restrictions with respect to the payment of dividends.
Common Stock
Issued shares of common stock reported on the balance sheets include 1.4 million and 1.6 million, at December 31, 2018 and 2017, respectively, of unvested restricted stock awards that have not been included in the common shares issued reported on the statements of changes in equity. These shares will be reflected in the statements of changes in equity at the time of vesting.
During 2018, 2017 and 2016, the Company issued 2.3 million, 3.5 million and 1.4 million shares, respectively, of common stock in connection with stock option exercises and vesting of restricted stock awards.
Common Stock Reserved for Future Issuance
Common stock of approximately 23.4 million shares as of December 31, 2018 is reserved for future issuances under the stock incentive plan (including 11.8 million options, 1.4 million restricted stock awards and 2.5 million of deferred stock awards currently granted).
Noncontrolling Interests
Common securities held by the noncontrolling interests that do not include put arrangements exercisable outside of the control of the Company are recorded in equity, separate from the Company’s stockholders’ equity.
The purchase or sale of additional ownership in an already controlled subsidiary is recorded as an equity transaction with no gain or loss recognized in net income (loss) or comprehensive income (loss) as long as the subsidiary remains a controlled subsidiary. In 2018 and 2017, the Company acquired all or additional equity interests in several companies that did not have a significant impact to equity either on an individual basis or in the aggregate. In 2016, the Company acquired all or additional equity interests in two artist management businesses located in the United States along with other smaller companies. The following schedule reflects the change in ownership interests for these transactions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(in thousands)
Net income (loss) attributable to common stockholders of Live Nation
$
60,249

 
$
(6,015
)
 
$
2,942

Transfers of noncontrolling interests:
 
 
 
 
 
Changes in Live Nation’s additional paid-in capital for purchases of noncontrolling interests, net of transaction costs
(8,210
)
 
(3,616
)
 
(49,111
)
Changes in Live Nation’s additional paid-in capital for sales of noncontrolling interests, net of transaction costs
1,410

 
—

 
1,424

Net transfers of noncontrolling interests
(6,800
)
 
(3,616
)
 
(47,687
)
Change from net income (loss) attributable to common stockholders of Live Nation and net transfers of noncontrolling interests
$
53,449

 
$
(9,631
)
 
$
(44,745
)

Redeemable Noncontrolling Interests
The Company is subject to put arrangements 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 redemption amounts for these puts are either at a fixed amount, 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. For put arrangements that 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 each reporting period using projected cash flows, and the estimated redemption values that are based on fair value at the time of exercise are computed each reporting period by applying a multiple to projected earnings, both of which take into account the current expectations regarding profitability and the timing of revenue-generating events. The balances are reflected in the Company’s balance sheets as redeemable noncontrolling interests outside of permanent equity.
The Company’s estimate of redemption amounts for puts that are redeemable at fixed or determinable prices on fixed or determinable dates for the years ended December 31, 2019, 2020, 2021, 2022 and 2023 are $90.9 million, $96.5 million, $59.9 million, $29.8 million and $68.9 million, respectively.

Transactions with Noncontrolling Interest Partners
The Company has loaned or advanced money to noncontrolling interest partners under the terms of the partnership operating agreements, promissory notes or other arrangements. As of December 31, 2018, the Company had outstanding notes receivable and prepayments of $8.9 million in other current assets and $86.9 million in other long-term assets, and as of December 31, 2017, the Company had outstanding notes receivable and prepayments of $10.9 million in other current assets and $44.4 million in other long-term assets.
Accumulated Other Comprehensive Income (Loss)
The following table presents changes in the components of AOCI, net of taxes, for the years ended December 31, 2018, 2017 and 2016:
 
 
Foreign Currency Items
 
Other
 
Total
 
 
(in thousands)
Balance at December 31, 2015
 
$
(111,299
)
 
$
(358
)
 
$
(111,657
)
Other comprehensive loss before reclassifications
 
(64,947
)
 
(103
)
 
(65,050
)
Amount reclassified from AOCI
 
—

 
—

 
—

Net other comprehensive loss
 
(64,947
)
 
(103
)
 
(65,050
)
Balance at December 31, 2016
 
(176,246
)
 
(461
)
 
(176,707
)
Other comprehensive income before reclassifications
 
67,704

 
—

 
67,704

Amount reclassified from AOCI
 
—

 
461

 
461

Net other comprehensive income
 
67,704

 
461

 
68,165

Balance at December 31, 2017
 
(108,542
)
 
—

 
(108,542
)
Other comprehensive loss before reclassifications
 
(36,689
)
 
—

 
(36,689
)
Amount reclassified from AOCI
 
—

 
—

 
—

Net other comprehensive loss
 
(36,689
)
 
—

 
(36,689
)
Balance at December 31, 2018
 
$
(145,231
)
 
$
—

 
$
(145,231
)

The realized loss in other reclassified from AOCI during 2017 resulted from the termination of a pension plan.
Earnings per Share
Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share for the effects of stock options, restricted stock and other potentially dilutive financial instruments only in the periods in which such effect is dilutive. The Company’s convertible senior notes are considered in the calculation of diluted net income per common share, if dilutive.
The calculation of diluted net income per common share includes the effects of the assumed exercise of any outstanding stock options, the assumed vesting of shares of restricted stock awards and the assumed conversion of the convertible senior notes where dilutive. For the years ended December 31, 2018, 2017 and 2016 there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net income per common share. The following table shows securities excluded from the calculation of diluted net income per common share because such securities were anti-dilutive:
  
 
Year Ended December 31,
  
 
2018
 
2017
 
2016
Options to purchase shares of common stock
 
11,784,023

 
14,238,589

 
16,283,434

Restricted and deferred stock awards—unvested
 
3,899,181

 
4,106,956

 
1,079,783

Conversion shares related to convertible senior notes
 
8,912,099

 
7,929,982

 
7,929,982

Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding
 
24,595,303

 
26,275,527

 
25,293,199