Quarterly report pursuant to Section 13 or 15(d)

EQUITY

v2.4.0.8
EQUITY
 9 Months Ended
Sep. 30, 2013
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:
 
Live Nation
Entertainment, Inc.
Stockholders’  Equity
 
Noncontrolling
Interests
 
Total
Equity
 
Redeemable
Noncontrolling
Interests
 
(in thousands)
 
(in thousands)
Balances at December 31, 2012
$
1,355,418

 
$
153,156

 
$
1,508,574

 
$
42,100

Non-cash and stock-based compensation
23,224

 
—

 
23,224

 
—

Common stock issued under stock plans, net of shares withheld for employee taxes
(6,580
)
 
—

 
(6,580
)
 
—

Exercise of stock options and warrants
87,458

 
—

 
87,458

 
—

Purchase of common stock
(6,865
)
 
—

 
(6,865
)
 
—

Acquisitions
—

 
9,941

 
9,941

 
29,742

Acquisitions of noncontrolling interests
(851
)
 
767

 
(84
)
 
—

Sales of noncontrolling interests
—

 
(399
)
 
(399
)
 
—

Redeemable noncontrolling interests fair value adjustments
(424
)
 
—

 
(424
)
 
424

Noncontrolling interests contributions
—

 
267

 
267

 
—

Cash distributions
—

 
(12,312
)
 
(12,312
)
 
(70
)
Other
—

 
(648
)
 
(648
)
 
6

Comprehensive income (loss):
 
 
 
 

 
 
Net income (loss)
38,665

 
12,103

 
50,768

 
(5,522
)
Unrealized gain on cash flow hedges
3

 
—

 
3

 
—

Realized loss on cash flow hedges
476

 
—

 
476

 
—

Foreign currency translation adjustments
(817
)
 
—

 
(817
)
 
—

Balances at September 30, 2013
$
1,489,707

 
$
162,875

 
$
1,652,582

 
$
66,680


Common Stock
During the first nine months of 2013, the Company issued 9.7 million shares of common stock primarily in connection with stock option exercises.
The above shares include 0.5 million shares of common stock that were issued in connection with the exercise of warrants to purchase the Company’s common stock. The transactions were cashless net exercises resulting in the Company repurchasing 0.4 million of the shares issued which have been recorded in treasury stock at a value of $6.9 million.
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 consolidated net income or comprehensive income. There were no significant acquisitions or sales of noncontrolling interests during the first nine months of 2013 or 2012.
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 December 2013 to December 2018. 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. 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 the initial 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 amounts for these put arrangements are reflected in the Company’s balance sheets as redeemable noncontrolling interests outside of permanent equity. The increase during the current year is principally related to puts associated with the 2013 acquisitions.
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, 2013:
 
 
Gains and Losses On Cash Flow Hedges
 
Defined Benefit Pension Items
 
Foreign Currency Items
 
Total
 
 
(in thousands)
Balance at December 31, 2012
 
$
(595
)
 
$
(611
)
 
$
(9,717
)
 
$
(10,923
)
Other comprehensive income (loss) before reclassifications
 
3

 
—

 
(817
)
 
(814
)
Amount reclassified from AOCI
 
476

 
—

 
—

 
476

Net other comprehensive income (loss)
 
479

 
—

 
(817
)
 
(338
)
Balance at September 30, 2013
 
$
(116
)
 
$
(611
)
 
$
(10,534
)
 
$
(11,261
)

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 (loss) per common share:
  
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
  
2013
 
2012
 
2013
 
2012
 
(in thousands, except for per share data)
Net income (loss) attributable to common stockholders of Live Nation Entertainment, Inc.—basic and diluted
$
43,774

 
$
57,948

 
$
38,665

 
$
(3,510
)
 
 
 
 
 
 
 
 
Weighted average common shares—basic
196,397

 
187,154

 
192,792

 
186,858

Effect of dilutive securities:
 
 
 
 
 
 
 
Stock options, restricted stock and warrants
5,713

 
2,600

 
4,474

 
—

2.875% convertible senior notes
—

 
—

 
—

 
—

Weighted average common shares—diluted
202,110

 
189,754

 
197,266

 
186,858

 
 
 
 
 
 
 
 
Basic and diluted net income (loss) per common share
$
0.22

 
$
0.31

 
$
0.20

 
$
(0.02
)

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 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 per common share because such securities are anti-dilutive:
  
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
  
2013
 
2012
 
2013
 
2012
 
(in thousands)
Options to purchase shares of common stock
3,703

 
16,890

 
6,386

 
22,213

Restricted stock awards and units—unvested
765

 
2,308

 
786

 
4,061

Warrants
—

 
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
12,573

 
27,803

 
15,277

 
34,879