01—Abstract
Summary
Summary of the 10-K filed February 24, 2014. Cited figures are marked; the original filing is the authoritative source.
Live Nation Entertainment, Inc. (NYSE: LYV) reported revenue of $6.48 billiona for 2013, up 11% from $5.82 billion in 2012, and an operating income of $139.7 million, compared with an operating loss of $21.6 million in 2012.
The net loss attributable to common stockholders narrowed to $43.4 millionb ($0.22 per share) from $163.2 million in 2012. Concerts generated $4.52 billion of revenue and reported an operating loss of $39.6 million, while Ticketing generated $1.41 billion of revenue and operating income of $101.8 million. Growth was driven by higher amphitheater and arena attendance, festival acquisitions and online advertising, and the company reported 59.5 million estimated fans, up from 50.0 million in 2012.
The balance sheet shows cash and cash equivalents of $1.30 billionc and total debt of $1.8 billion at December 31, 2013, with a weighted-average cost of debt of 4.3%. In August 2013 the company refinanced its senior secured credit facility and issued additional 7% senior notes, recording a $36.3 million loss on extinguishment of debt. Of the debt, $286.0 million is due in 2014, and the company said it was in compliance with its debt covenants.
Operating cash flow was $417.5 milliond, and capital expenditures were $116.4 million. The filing also discloses risk factors including the company's leverage, the 2010 Ticketmaster merger's final judgment with the DOJ running through July 2020, ongoing ticketing litigation and the need to re-platform its Ticketmaster system, with the new technology expected at certain venue clients in 2015. The company does not plan to pay dividends.
02—Key points
Key Highlights
- Revenue rose 11% to $6.48 billion in 2013, driven mainly by Concerts segment growth of $646.8 million
- Operating income of $139.7 million in 2013 compared with an operating loss of $21.6 million in 2012
- Net loss attributable to common stockholders narrowed to $43.4 million ($0.22 per share) from $163.2 million in 2012
- Estimated fans rose to 59.5 million from 50.0 million, and Ticketing sold 148.9 million tickets with fees
- Total debt of $1.8 billion at a 4.3% weighted-average cost; a $36.3 million loss on extinguishment of debt was recorded from the August 2013 refinancing
- Cash and cash equivalents of $1.30 billion; operating cash flow of $417.5 million; capital expenditures of $116.4 million
- Company is subject to a DOJ Final Judgment through July 2020 that restricts certain business practices and related to the Ticketmaster merger
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 24, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $6.48B$5.82B | +11.3% |
| SG&A Expenses | $1.23B$1.14B | +7.3% |
| Operating Income | $139.66M-$21.64M | +745.4% |
| Interest Expense | $111.66M$123.74M | −9.8% |
| Net Income | -$43.38M-$163.23M | +73.4% |
| EPS (Basic) | $-0.23$-0.88 | +73.9% |
| Shares Outstanding (Basic) | 193.89M186.96M | +3.7% |
05—Questions
Frequently Asked Questions
How did Live Nation's profitability change in 2013?
Operating income improved to $139.7 million from an operating loss of $21.6 million in 2012. The net loss attributable to common stockholders was $43.4 million, or $0.22 per share, compared with $163.2 million, or $0.87 per share, in 2012. Results were helped by a $38.3 million gain on disposal of operating assets, including a $24.8 million gain on the sale of a New York theater.
What drove revenue growth in 2013?
Revenue increased $659.5 million, or 11%, to $6.48 billion. The Concerts segment accounted for most of the increase, with revenue up $646.8 million, or 17%, due to more shows, higher amphitheater and arena attendance, and $144.7 million of incremental revenue from festival promoter acquisitions. Sponsorship & Advertising revenue rose 15% and Ticketing revenue rose 2%, while Artist Nation revenue fell 12%.
How much debt does Live Nation carry and when does it come due?
Total indebtedness was $1.8 billion at December 31, 2013. Of this, $286.0 million is due in 2014, $95.3 million in 2015 and 2016, $101.3 million in 2017 and 2018, and $1.3 billion thereafter. The company had $266.9 million available under its revolving credit facility and said it was in compliance with all debt covenants.
What are the main risks highlighted in the filing?
Key risks include dependence on popular artists and consumer tastes, intense competition in ticketing and live music, seasonality of results, high leverage, the need to fund significant up-front cash requirements for tours, and the cost and timing of re-platforming the Ticketmaster system. The filing also highlights ongoing litigation, regulatory restrictions on TicketsNow, the DOJ Final Judgment, and tax risks related to the IAC spin-off.
Does Live Nation pay dividends?
No. The company has not declared or paid any dividends since the Separation and does not intend to pay dividends in the foreseeable future. It plans to retain earnings for growth and debt repayment, and its senior secured credit facility limits the funds it can distribute as dividends.
06—Continue