| 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:
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Live Nation
Entertainment, Inc.
Stockholders’ Equity
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Noncontrolling
Interests
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|
Total
Equity
|
|
Redeemable
Noncontrolling
Interests
|
|
(in thousands) |
|
(in thousands) |
Balance at December 31, 2013 |
$ |
1,409,228 |
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|
$ |
180,578 |
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|
$ |
1,589,806 |
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|
$ |
61,041 |
|
Non-cash and stock-based compensation |
31,531 |
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|
— |
|
|
31,531 |
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|
— |
|
Common stock issued under stock plans, net of shares withheld for employee taxes |
(14,891 |
) |
|
— |
|
|
(14,891 |
) |
|
— |
|
Exercise of stock options |
14,142 |
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|
— |
|
|
14,142 |
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|
— |
|
Fair value of convertible debt conversion feature, net of issuance costs |
21,444 |
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|
— |
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|
21,444 |
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|
— |
|
Acquisitions |
— |
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|
3,343 |
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|
3,343 |
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|
— |
|
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 |
) |
|
— |
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|
(3,702 |
) |
|
3,702 |
|
Noncontrolling interests contributions |
— |
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|
106 |
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|
106 |
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— |
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Cash distributions |
— |
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|
(21,971 |
) |
|
(21,971 |
) |
|
(1,993 |
) |
Other |
— |
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|
(4,559 |
) |
|
(4,559 |
) |
|
— |
|
Comprehensive income (loss): |
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Net income (loss) |
95,649 |
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|
19,175 |
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|
114,824 |
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(3,272 |
) |
Unrealized loss on cash flow hedges |
(2 |
) |
|
— |
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(2 |
) |
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— |
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Realized loss on cash flow hedges |
48 |
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— |
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48 |
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— |
|
Change in funded status of defined benefit pension plan |
30 |
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— |
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30 |
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— |
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Foreign currency translation adjustments |
(35,283 |
) |
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— |
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|
(35,283 |
) |
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— |
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Balance at September 30, 2014 |
$ |
1,504,725 |
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$ |
176,520 |
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$ |
1,681,245 |
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$ |
74,436 |
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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:
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Gains and Losses On Cash Flow Hedges |
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Defined Benefit Pension Items |
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Foreign Currency Items |
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Total |
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(in thousands) |
Balance at December 31, 2013 |
|
$ |
(79 |
) |
|
$ |
(611 |
) |
|
$ |
(1,680 |
) |
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$ |
(2,370 |
) |
Other comprehensive income (loss) before reclassifications |
|
(2 |
) |
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30 |
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(35,283 |
) |
|
(35,255 |
) |
Amount reclassified from AOCI |
|
48 |
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— |
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— |
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|
48 |
|
Net other comprehensive income (loss) |
|
46 |
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|
30 |
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|
(35,283 |
) |
|
(35,207 |
) |
Balance at September 30, 2014 |
|
$ |
(33 |
) |
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$ |
(581 |
) |
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$ |
(36,963 |
) |
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$ |
(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:
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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2014 |
|
2013 |
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2014 |
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2013 |
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(in thousands except share and per share data) |
Net income attributable to common stockholders of Live Nation Entertainment, Inc. |
$ |
105,163 |
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$ |
43,774 |
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$ |
95,649 |
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$ |
38,665 |
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Accretion of redeemable noncontrolling interests |
(1,198 |
) |
|
(265 |
) |
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(3,702 |
) |
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(424 |
) |
Net income available to common stockholders of Live Nation Entertainment, Inc.—basic |
$ |
103,965 |
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$ |
43,509 |
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$ |
91,947 |
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$ |
38,241 |
|
Convertible debt interest, net of tax |
4,813 |
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|
— |
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|
— |
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|
— |
|
Net income available to common stockholders of Live Nation Entertainment, Inc.—diluted |
108,778 |
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|
43,509 |
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|
91,947 |
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38,241 |
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Weighted average common shares—basic |
199,261,810 |
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196,396,704 |
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198,612,221 |
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192,792,286 |
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Effect of dilutive securities: |
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Stock options, restricted stock and warrants |
7,340,484 |
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5,713,079 |
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7,621,353 |
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4,474,003 |
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Convertible senior notes |
14,979,289 |
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— |
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— |
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— |
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Weighted average common shares—diluted |
221,581,583 |
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202,109,783 |
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206,233,574 |
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197,266,289 |
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Basic net income available to common stockholders of Live Nation Entertainment, Inc. |
$ |
0.52 |
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$ |
0.22 |
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$ |
0.46 |
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$ |
0.20 |
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Diluted net income available to common stockholders of Live Nation Entertainment, Inc. |
$ |
0.49 |
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$ |
0.22 |
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$ |
0.45 |
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$ |
0.19 |
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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:
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
(in thousands) |
Options to purchase shares of common stock |
5,116 |
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3,703 |
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5,243 |
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6,386 |
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Restricted stock awards—unvested |
313 |
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|
765 |
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|
344 |
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|
786 |
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Conversion shares related to the convertible senior notes |
— |
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|
8,105 |
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7,930 |
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8,105 |
|
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding |
5,429 |
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12,573 |
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13,517 |
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15,277 |
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