Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

 v2.3.0.11
STOCKHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 2011
STOCKHOLDERS' EQUITY [Abstract]  
STOCKHOLDERS' EQUITY
NOTE 9-STOCKHOLDERS' EQUITY
 
Common Stock
 
In February 2011, the Company issued 5.7 million shares of common stock in connection with the acquisition of the remaining interests in Front Line. See Note 3-Acquisitions for further discussion regarding this 2011 transaction.
 
In February and June 2011, the Company issued 1.8 million and 5.5 million shares, respectively, of common stock pursuant to a subscription agreement with Liberty Media.
 
In May 2011, the Company issued 0.7 million shares of common stock in connection with the acquisition of the remaining interests in Vector.
 
Redeemable Noncontrolling Interests
 
Due to pre-existing obligations acquired pursuant to the Merger, the Company was subject to fair value put arrangements, some of which were currently redeemable and some of which were not currently redeemable, with respect to the common securities that represent the noncontrolling interests of certain non-wholly-owned Ticketmaster subsidiaries. Certain of these put arrangements were exercisable at fair value by the counterparty outside of the control of the Company, but were settled either in cash or stock at the discretion of the Company and were therefore classified as mezzanine equity. Accordingly, to the extent the fair value of these redeemable interests exceeded the value determined by normal noncontrolling interests accounting, the value of such interests was adjusted to fair value with a corresponding adjustment to additional paid-in capital. For these redeemable interests, the redemption value was their estimated fair value which was based upon a discounted cash flow analysis using estimated cash flows.  Changes to the estimated fair value were computed based upon the impact of changes in the projected cash flows each reporting period which took into account the current expectations regarding profitability and the timing of revenue-generating events and were discounted to a present day fair value. In instances where the put arrangements held by the noncontrolling interests were not currently redeemable, for increases in fair value, or reductions in fair value to the extent increases had been recognized previously, the Company accreted changes in fair value over the period from the date of issuance to the earliest redemption date of the individual securities. Accounting guidance prohibits the recognition of reductions in value below issuance date value, in this case the date of the Merger. In accordance with the FASB guidance for business combinations, the redeemable noncontrolling interests were recorded at their fair value as of the consummation of the Merger on January 25, 2010.
 
 
In the first quarter of 2011, the Company acquired all of the noncontrolling interests in Front Line, a Ticketmaster subsidiary, all of which were not currently redeemable. Specifically, the Company repurchased 27,821 shares of Front Line common stock and 3,402 vested options. These instruments had a combined carrying value of $82.4 million at December 31, 2010. As part of the same transaction, although classified in other long-term liabilities on the consolidated balance sheet, the Company also acquired 15,376 shares of participating restricted Front Line common shares not currently redeemable that had a carrying value of $24.0 million at December 31, 2010. See Note 3 – Acquisitions for further discussion of this 2011 transaction.
 
The common stock of two subsidiaries of Front Line held by noncontrolling interests also included put arrangements. The put arrangements did not have a determinable redemption date, but were considered to be currently redeemable based on the terms of redemption. The stock held by the noncontrolling interests had an estimated redemption fair value and carrying value of $22.5 million as of December 31, 2010. In the second quarter of 2011, the Company acquired all of these remaining noncontrolling interests for $14.7 million.  Amounts paid as part of this transaction were recorded to additional paid-in capital to the extent they were in excess of the amount on the consolidated balance sheets.
 
Noncontrolling Interests
 
For certain non-wholly-owned subsidiaries of the Company, the common securities held by the noncontrolling interests do not include put arrangements exercisable outside of the control of the Company. Such noncontrolling interests are recorded in stockholders' equity, separate from the Company's own equity.
 
The following table shows the reconciliation of the carrying amount of redeemable noncontrolling interests, total stockholders' equity, stockholders' equity attributable to Live Nation Entertainment, Inc. and stockholders' equity attributable to noncontrolling interests:
 
   
Redeemable
Noncontrolling
Interests
    
Live Nation
Entertainment, Inc.
Stockholders' Equity
    
Noncontrolling
Interests
    
Changes in
Accumulated Other Comprehensive
Income (Loss)
    
Total
Stockholders'
Equity
  
   
(in thousands)
    
(in thousands)
  
Balances at December 31, 2010
   $ 107,541     $ 1,364,416     $ 137,252     $ -     $ 1,501,668  
Non-cash compensation
     -       10,159       -               10,159  
Common shares issued for business acquisitions
     -       64       -               64  
Exercise of stock options
     -       3,081       -               3,081  
Sale of common shares
     -       76,492       -               76,492  
Acquisitions and sales of noncontrolling interests
     (98,027 )     84,437       440               84,877  
Disposal of noncontrolling interests
     -       -       (2,699 )             (2,699 )
Fair value of redeemable noncontrolling interests adjustments
     1,722       (1,722 )     -               (1,722 )
Cash dividends
     (5,570 )     -       (4,389 )             (4,389 )
Other
     (839 )     1       (3 )             (2 )
Comprehensive income (loss):
                                        
Net income (loss)
     (4,827 )     (35,203 )     2,302       (32,901 )     (32,901 )
Unrealized loss on cash flow hedges
     -       (137 )     -       (137 )     (137 )
Other
     -       (32 )     -       (32 )     (32 )
Currency translation adjustment
     -       54,653       -       54,653       54,653  
Total comprehensive income
                           $ 21,583       21,583  
Balances at June 30, 2011
   $ -     $ 1,556,209     $ 132,903             $ 1,689,112  
 
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 consolidated net income or comprehensive income. In the first six months of 2011, we acquired the remaining equity interests in Front Line, Vector and other smaller companies. See Note 3-Acquisitions for further discussion regarding the Front Line acquisition. The following schedule reflects the change in ownership interest for these transactions.
 
   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
   
2011
    
2010
    
2011
    
2010
  
   
(in thousands)
  
Net income (loss) attributable to Live Nation Entertainment, Inc.
   $ 13,257     $ (32,787 )   $ (35,203 )   $ (155,000 )
Transfers (to) from noncontrolling interest:
                                
Increase in Live Nation Entertainment, Inc.'s paid in capital for purchases and sales of noncontrolling interests, net of transaction costs
     15,753       -       84,437       -  
Net transfers from noncontrolling interest
     15,753       -       84,437       -  
Change from net income (loss) attributable to Live Nation Entertainment, Inc.and transfers (to) from noncontrolling interest
   $ 29,010     $ (32,787 )   $ 49,234     $ (155,000 )
 
Earnings per Share
 
The following table sets forth the computation of basic and diluted net income (loss) per common share:

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
   
2011
    
2010
    
2011
    
2010
  
   
(in thousands, except for per share data)
  
Net income (loss) attributable to Live Nation Entertainment, Inc.
   $ 13,257     $ (32,787 )   $ (35,203 )   $ (155,000 )
Less loss from discontinued operations, net of tax
     -       (377 )     -       (680 )
Net income (loss) from continuing operations attributable to common stockholders-basic and diluted
   $ 13,257     $ (32,410 )   $ (35,203 )   $ (154,320 )
                                 
                                 
Weighted average common shares-basic
     180,819       170,008       178,568       158,220  
Effect of dilutive securities:
                                
Stock options, restricted stock and warrants
     1,971       -       -       -  
2.875% convertible senior notes
     -       -       -       -  
Weighted average common shares-diluted
     182,790       170,008       178,568       158,220  
                                 
Basic and diluted income (loss) from continuing operations per common share
   $ 0.07     $ (0.19 )   $ (0.20 )   $ (0.98 )
 
The calculation of diluted net income (loss) 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 units and the assumed conversion of the 2.875% convertible senior notes where dilutive. The following table shows securities excluded from the calculation of diluted net income (loss) per common share because such securities are anti-dilutive:
   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
   
2011
    
2010
    
2011
    
2010
  
   
(in thousands)
  
Options to purchase shares of common stock
     14,801       22,340       19,583       22,340  
Restricted stock awards and units - unvested
     2,284       4,401       3,124       4,401  
Warrants
     500       500       500       500  
Conversion shares related to 2.875% convertible senior notes
     8,105       8,105       8,105       8,105  
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding
     25,690       35,346       31,312       35,346