Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

v2.4.0.6
STOCKHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 2012
STOCKHOLDERS' EQUITY [Abstract]  
STOCKHOLDERS' EQUITY
 
NOTE 8-STOCKHOLDERS' 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
   
Total
Stockholders'
Equity
 
   
(in thousands)
    
(in thousands)
  
Balances at December 31, 2011
   $ 8,277     $ 1,461,103     $ 155,791     $ 1,616,894  
Non-cash and stock-based compensation
     -       14,566       -       14,566  
Exercise of stock options
     -       859       -       859  
Acquisitions
     37,865       -       -       -  
Acquisitions of noncontrolling interests
     -       (4 )     (245 )     (249 )
Redeemable noncontrolling interests fair value adjustments
     240       (240 )     -       (240 )
Noncontrolling interests contributions
     -       -       130       130  
Cash dividends, net of tax
     -       -       (8,189 )     (8,189 )
Other
     710       -       (62 )     (62 )
Comprehensive loss:
                                
Net loss
     (562 )     (61,458 )     (2,648 )     (64,106 )
Unrealized loss on cash flow hedges
     -       (88 )     -       (88 )
Currency translation adjustment
     -       (8,865 )     -       (8,865 )
Balances at June 30, 2012
   $ 46,530     $ 1,405,873     $ 144,777     $ 1,550,650  
 
Noncontrolling Interests
 
As of June 30, 2012, for the non-wholly-owned subsidiaries of the Company where 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 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, the Company acquired the remaining equity interests in Front Line and other smaller companies. There were no significant acquisitions of noncontrolling interests during the first half of 2012.
 
The following schedule reflects the change in ownership interests for these transactions.
 
   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
  
   
(in thousands)
  
Net income (loss) attributable to Live Nation Entertainment, Inc.
   $ 7,692     $ 13,257     $ (61,458 )   $ (35,203 )
Transfers (to) from noncontrolling interest:
                                
Changes in Live Nation Entertainment, Inc.'s paid in capital for purchase of noncontrolling interests, net of transaction costs
     (456 )     15,753       (4 )     84,437  
Net transfers (to) from noncontrolling interest
     (456 )     15,753       (4 )     84,437  
Change from net income (loss) attributable to Live Nation Entertainment, Inc. and transfers (to) from noncontrolling interests
   $ 7,236     $ 29,010     $ (61,462 )   $ 49,234  
 
Redeemable Noncontrolling Interests
 
For certain of its consolidated subsidiaries, 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 November 2012 to December 2018. The redemption amounts for these puts are either at a fixed amount, at fair value at the time of exercise or variable 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 the acquisition date. As these put arrangements are not currently redeemable, for increases in the estimated redemption value, or reductions in the estimated redemption value to the extent increases had been recognized previously, the Company accretes changes in the 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. Accounting guidance prohibits the recognition of reductions in value below issuance date value. Changes in 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. For redemption amounts that are fixed dollar amounts, if the initial fair value is the redemption amount, there are no changes recorded until the puts are exercised or expire. The redemption amounts for these put arrangements are reflected in the Company's balance sheets as redeemable noncontrolling interests outside of permanent equity and, at June 30, 2012 and December 31, 2011, were $46.5 million and $8.3 million, respectively. The increase during the current year is principally related to puts associated with the 2012 acquisitions.
 
Earnings per Share
 
The following table sets forth the computation of basic and diluted net income (loss) per common share:
 
   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
  
   
(in thousands, except for per share data)
  
                         
Net income (loss) attributable to Live Nation Entertainment, Inc.-basic and diluted
   $ 7,692     $ 13,257     $ (61,458 )   $ (35,203 )
                                 
                                 
Weighted average common shares-basic
     186,894       180,819       186,708       178,568  
Effect of dilutive securities:
                                
Stock options, restricted stock and warrants
     2,431       1,971       -       -  
2.875% convertible senior notes
     -       -       -       -  
Weighted average common shares-diluted
     189,325       182,790       186,708       178,568  
                                 
Basic and diluted net income (loss) per common share
   $ 0.04     $ 0.07     $ (0.33 )   $ (0.20 )
 
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
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
  
   
(in thousands)
  
Options to purchase shares of common stock
     15,981       14,801       21,340       19,583  
Restricted stock awards and units - unvested
     3,179       2,284       3,935       3,124  
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
     27,765       25,690       33,880       31,312