LN To Expand Financial Reporting

Live Nation agreed to make changes to the way it reports future operating and net income, among other things, after the Securities and Exchange Commission questioned the company’s handling of 2012 year-end financial filings.

Though correspondence between the SEC and public companies is made easily available through its EDGAR website, the correspondence became even more public when Digital Music News reported on July 11 only the initial SEC letter questioning the 10-K filing but not Live Nation’s responses nor apparent resolution.

An exchange of letters between the SEC and Live Nation dating to April 8 and apparently resolved in May show that regulators reviewed the filings and asked the company to include information in its Management Discussion and Analysis (MD&A) that would help investors “to gain an understanding as to why your operating income and net earnings decreased from the prior period.”

The information in question relates to increases in depreciation and amortization, income taxes and their impact to operations, and reporting of impairment charges, goodwill and changes in stockholders’ equity, according to an April 29 letter from the SEC.

Brian Capo, Live Nation’s chief accounting officer, proposed changes to more clearly discuss negative information and explained some charges were not included in the Executive MD&A as their discussion is already included in that of the Artist Nation segment, among other things.

After some back-and-forth clarifications, Capo wrote May 8 “the Company has agreed to change or supplement the disclosures in its future filings … in the spirit of cooperation with the [SEC] Staff, and not because the company believes that prior filings are materially deficient or inaccurate.”

SEC branch chief Linda Cvrkel wrote on May 15 “we have completed our review of your filing” and included no further questions or requests for information – suggesting the matter is finished.