Live Nation Reports Strong Third Quarter 2008 Results

Live Nation Reports Strong Third Quarter 2008 Results

- Number of live concerts produced in the third quarter of 2008 up 17% over last year -

- Total attendance at these concerts increased 6% as compared to 2007 -

- Revenue increased by 9% driving increases of 16% in adjusted operating income and 9% in operating income for the third quarter -

LOS ANGELES, Nov. 6 /PRNewswire-FirstCall/ -- Live Nation (NYSE:LYV) released financial results for the three months ended September 30, 2008 today.

(Logo: http://www.newscom.com/cgi-bin/prnh/20070220/LATU096LOGO)

Quarterly Summary Results
Unaudited; $ in millions (except per share amounts)

Q3 2008 Q3 2007

Revenue $1,588.7 $1,452.6
Adjusted Operating Income $109.6 $94.2
Operating Income $75.6 $69.2
Free Cash Flow $75.6 $70.1
Net Income $139.9 $41.6
Basic EPS $1.84 $0.60
Diluted EPS $1.67 $0.55

"We generated exceptional results during the third quarter in spite of the global economic downturn," said Michael Rapino, President and Chief Executive Officer. "We continued to execute better and grow our core business with virtually all key metrics used to evaluate our business showing improvements. We increased the number of concerts we produced, we grew our ticket sales and improved our revenues and margins. Despite challenging times, millions of fans have continued to attend live concerts to support their favorite artists. Looking ahead, our primary goal remains centered on maximizing our global concert pipe for our client -- the artist -- and expanding into direct ticketing/online distribution, completing the world's only concert-to-fan direct platform for artists."

Highlights:

-- Formed a multi-year strategic alliance with SMG bringing an estimated
25 million tickets to Live Nation Ticketing and increasing our total
ticket inventory by approximately 25% over the next seven years.
-- Secured a five-year exclusive distribution deal with CIE, the third
largest concert promoter in the world, and T4F, extending Live Nation's
global distribution platform into Brazil, Mexico and other top
countries across Latin America.
-- Completed the sale of our motor sports division for net proceeds of
$167.6 million which were used to repay borrowings under our revolving
credit facility, to permanently reduce a portion of our term loan and
to invest in our core music business.

Below are what we believe to be our key metrics related to our businesses:

METRICS
(Unaudited; $ in millions except
as noted)

Variance 9 months 9 months Variance
Key Drivers Q3 2008 Q3 2007 (Qtr.) 2008 2007 (9 mos.)

Rights Acquisitions - Global Music Businesses
Talent Costs
and Other
Event Direct
Operating
Expenses $1,293.7 $1,190.8 8.6% $2,584.9 $2,217.4 16.6%
Talent and
Other Event
Expenses as
% of Total
Revenue 82.4% 83.6% 81.0% 81.2%
Number of
Live Rights
(Concerts)
(est.) 4,839 4,126 17.3% 15,218 11,513 32.2%
Number of
Ancillary
Live Rights -
as of period
end (est.) 789 n/a n/a 789 n/a n/a
Revenue
Recognized
for Artist
Services/
Ancillary
Live Rights $74.9 n/a n/a $162.3 n/a n/a

Distribution Platform - Global Music Businesses
Total
Attendance
(est.) 17,491,000 16,551,000 5.7% 38,682,000 34,664,000 11.6%
International
Music
Festival
Attendance
(est.) 818,000 532,000 53.8% 1,102,000 843,000 30.7%
Ancillary
Revenue per
Attendee -
NA Music
Amps only $18.29 $18.20 0.5% $18.53 $18.51 0.1%
Total Revenue
per Attendee
(Fan) $89.79 $86.08 4.3% $82.46 $78.78 4.7%

Sponsorship Data - Global Music and Ticketing Businesses
Number of
Sponsors -
as of period
end (est.) 770 719 7.1% 770 719 7.1%
Sponsorship
Revenue
Recognized $74.8 $66.5 12.5% $137.0 $134.7 1.7%
Average
Sponsorship
Revenue per
Sponsor
(rounded,
whole $) $97,000 $92,000 5.4% $178,000 $187,000 (4.8%)

FINANCIAL HIGHLIGHTS - 3rd QUARTER (Unaudited)

Q3 2008 Q3 2007 Variance
$ in millions
Revenue
North American
Music $864.0 $789.1 9.5%
International
Music 480.7 334.4 43.8%
Artist Nation 225.7 301.3 (25.1%)
Ticketing 6.7 4.8 39.6%
Other and
Eliminations 11.6 23.0 (49.6%)
$1,588.7 $1,452.6 9.4%

Adjusted Operating Margins
Income (Loss) Q3 2008 Q3 2007
North American
Music $77.2 $65.2 18.4% 8.9% 8.3%
International
Music 46.3 28.3 63.6% 9.6% 8.5%
Artist Nation (0.8) 7.8 ** ** 2.6%
Ticketing (5.1) (0.5) ** ** **
Other and
Eliminations 2.7 3.0 ** ** **
Corporate (10.7) (9.6) (11.5%)
$109.6 $94.2 16.3% 6.9% 6.5%

Operating Income
(Loss)
North American
Music $61.7 $51.1 20.7% 7.1% 6.5%
International
Music 38.1 29.9 27.4% 7.9% 8.9%
Artist Nation (4.6) 3.0 ** ** 1.0%
Ticketing (6.5) (1.8) ** ** **
Other and
Eliminations 0.5 (0.2) ** ** **
Corporate (13.6) (12.8) (6.2%)
$75.6 $69.2 9.2% 4.8% 4.8%

** not meaningful

The highlights of our financial information for the third quarter of 2008 as compared to the third quarter of 2007 are as follows:

Revenue change - Total increase of $136.1 million, primarily driven by:
-- $75.0 million - Increase in the number of events, ancillary revenue per
attendee, attendance and average ticket prices at our owned and/or
operated amphitheaters and third-party venues, partially offset by a
decrease in arena events, in North American Music.
-- $44.2 million - Acquisitions of Heineken Music Hall (The Netherlands),
DFC (Scotland), Luger (Sweden) and the Arras France festival in
International Music.
-- $83.3 million - Increase in International Music due to stronger
promotion activity in Sweden, Norway and France driven primarily by
strong stadium events and strong arena tours, as well as an overall
increase in revenues related to our festival operations (partially due
to the timing of festivals) in the United Kingdom and Belgium.
-- $61.3 million - Acquisitions of Signatures and Anthill in Artist
Nation.
-- ($136.9) million - Decline in the volume and change in the venue mix of
global tours during the quarter impacting Artist Nation.
-- $18.4 million - Foreign exchange movements, primarily in International
Music.

Adjusted Operating Income (Loss) change - Total increase of $15.4 million, primarily driven by:

-- $9.1 million - Acquisitions of Heineken Music Hall, DFC, Luger and the
Arras France festival in International Music and Signatures and Anthill
in Artist Nation.
-- $12.0 million - Improvement in North American Music operating results
primarily driven by strong amphitheater and third-party venue results
due to increased events and attendance, partially offset by a reduction
in arena events.
-- $10.6 million - Increase in International Music primarily due to
festival results (partially due to the timing of festivals) in the
United Kingdom and Belgium.
-- ($12.3) million - Decrease in the volume and change in the venue mix of
global tours and increased salary and consulting expenses related to
the infrastructure of Artist Nation.
-- ($5.6) million - Decline in Ticketing primarily due to higher salary
costs and other expense related to building our ticketing
infrastructure.
-- $1.9 million - Foreign exchange movements, primarily in International
Music.

Operating Income (Loss) change - Total increase of $6.4 million, primarily driven by:

-- $15.4 million - Overall increase in Adjusted Operating Income (Loss)
noted above.
-- ($5.3) million - Increase in depreciation and amortization expense
primarily due to the amortization of intangible assets related to the
AMG and DFC acquisitions, along with higher depreciation on fixed
assets.
-- ($4.9) million - Decreased gain on the sale of operating assets
primarily due to gains recorded in 2007 on the sale of seven
small-sized music venues in London.

Other Information -
-- We continue to expand our sponsorship relationships, including a new
10-year contract with Telefonica O2 for a naming rights sponsorship at
O2 Dublin arena (formerly The Point) in Dublin, Ireland.
-- We remain on track in building and launching our ticketing business and
completing our direct connection with the millions of fans we serve
annually.

FINANCIAL HIGHLIGHTS - NINE MONTHS ENDED SEPTEMBER 30 (Unaudited)

9 months 9 months
2008 2007 Variance
$ in millions
Revenue
North American
Music $1,783.9 $1,503.9 18.6%
International
Music 986.8 774.2 27.5%
Artist Nation 419.1 452.7 (7.4%)
Ticketing 19.8 9.0 **
Other and
Eliminations 41.5 96.6 **
$3,251.1 $2,836.4 14.6%

Margins
Adjusted Operating 9 months 9 months
Income (Loss) 2008 2007
North American
Music $111.1 $61.3 81.2% 6.2% 4.1%
International
Music 72.7 58.8 23.6% 7.4% 7.6%
Artist Nation (13.4) 4.8 ** ** 1.1%
Ticketing (11.1) (3.4) ** ** **
Other and
Eliminations 12.7 10.5 21.0% ** **
Corporate (30.3) (25.6) (18.4%)
$141.7 $106.4 33.2% 4.4% 3.8%

Operating Income
(Loss)
North American
Music $64.6 $24.6 ** 3.6% 1.6%
International
Music 50.8 65.1 (22.0%) 5.1% 8.4%
Artist Nation (35.9) (7.3) ** ** **
Ticketing (14.7) (6.1) ** ** **
Other and
Eliminations 6.5 (2.6) ** ** **
Corporate (38.1) (34.4) (10.8%)
$33.2 $39.3 ** 1.0% 1.4%

** not meaningful

The highlights of our financial information for the nine-month period ended September 30, 2008 as compared to the same period in 2007 are as follows:

Revenue change - Total increase of $414.7 million, primarily driven by:
-- $185.0 million - Increase in North American Music primarily due to
strong results from arena tours and an increase in events, ancillary
revenue per attendee, attendance and average ticket prices at our owned
and/or operated amphitheaters and third-party venues.
-- $94.9 million - Acquisition of HOB Canada in North American Music.
-- $88.8 million - Acquisitions of AMG, Heineken Music Hall, DFC, Luger
and the Arras France festival in International Music.
-- $61.5 million - Increase in International Music due to stronger
promotion activity in the United Kingdom, Sweden and Norway driven
primarily by strong stadium events and strong arena tours, as well as
an overall increase in revenues related to our festival operations in
the United Kingdom, Belgium and The Netherlands.
-- ($156.5) million - Decreased volume and change in the venue mix of
global tours impacting Artist Nation.
-- $122.9 million - Acquisitions of Signatures and Anthill in Artist
Nation.
-- ($37.4) million - Decline due to the sale in 2007 of a theater
production and also due to fewer productions in our United Kingdom
theater operations in 2008.
-- $72.9 million - Foreign exchange movements, primarily in International
Music.

Adjusted Operating Income (Loss) change - Total increase of $35.3 million, primarily driven by:

-- $19.1 million - Acquisitions of HOB Canada in North American Music,
AMG, Heineken Music Hall, DFC, Luger and the Arras France festival in
International Music and Signatures and Anthill in Artist Nation.
-- $48.1 million - Increase in North American Music operating income due
primarily to cost controls on talent buying and other variable
expenses, higher ticket sales through our internal ticketing
operations, higher average ticket prices and increased activity at our
owned and/or operated amphitheaters and strong arena tours.
-- ($22.7) million - Reduced volume and change in the venue mix in global
tours and increased salary and consulting expenses related to the
infrastructure for Artist Nation.
-- ($7.7) million - Decline in Ticketing primarily due to higher salary
costs and other expense related to building our ticketing
infrastructure.
-- ($4.7) million - Increased headcount and related costs in Corporate.
-- $3.9 million - Foreign exchange movements, primarily in International
Music.

Operating Income (Loss) change - Total decrease of $6.1 million, primarily driven by:

-- $35.3 million - Overall increase in Adjusted Operating Income (Loss)
noted above.
-- ($21.5) million - Increase in depreciation and amortization expense
primarily due to the amortization of intangible assets related to the
AMG, DFC and CPI acquisitions and certain artist rights agreements.
-- ($20.0) million - Decreased gain on the sale of operating assets
primarily due to gains recorded in 2007 on the sale of an amphitheater,
an office building, two mid-sized and seven small-sized music venues
and two other non-core assets.

Other information
-- For the nine months ended September 30, 2008, maintenance capital
expenditures were $21.7 million, down from $30.7 million for the same
period of the prior year. We also incurred $116.9 million of capital
expenditures for revenue generating projects during the nine-month
period ended September 30, 2008, primarily due to the development and
renovation of various venues including O2 Dublin arena (formerly The
Point) in Ireland, House of Blues in Houston and Boston, the Hollywood
Palladium and the AMG venue expansions in Sheffield and Leeds, as well
as for our ticketing roll-out.
-- As of September 30, 2008, our cash and cash equivalents were
$205.9 million and our total long-term debt was $799.3 million,
including $40.0 million outstanding on our revolving credit facility.
Free cash as of September 30, 2008 was $50.4 million.

Conference Call:

The company will host a teleconference today, November 6, 2008 at 5:00 p.m. Eastern Time, which can be accessed by dialing 888-603-6873 (U.S.) or 973-321-1019 (Int'l) and referencing passcode 70943698. To access the call via webcast, please visit the Investor Relations section of the company's website at http://www.livenation.com/investors. Please visit the website approximately ten minutes prior to start time to ensure a connection. Additional statistical and financial information to be provided on the call, if any, will be posted supplementally under that same link. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the Live Nation website through November 13, 2008.

About Live Nation:

Live Nation's mission is to maximize the live concert experience. Our core business is producing, marketing and selling live concerts for artists via our global concert pipe. Live Nation is the largest producer of live concerts in the world, annually producing over 16,000 concerts for 1,500 artists in 57 countries. The company sells over 45 million concert tickets a year and expects to drive over 60 million unique visitors to LiveNation.com in 2008. Live Nation is transforming the concert business by expanding its concert platform into ticketing and building the industry's first artist-to-fan vertically integrated concert platform. Headquartered in Los Angeles, California, Live Nation is listed on the New York Stock Exchange, trading under the symbol "LYV". Additional information about the company can be found at http://www.livenation.com/investors.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(in thousands except share and per share data)
Revenue $1,588,653 $1,452,578 $3,251,077 $2,836,397
Operating expenses:
Direct operating
expenses 1,295,416 1,200,071 2,589,443 2,265,952
Selling, general
and administrative
expenses 174,254 151,910 495,312 444,354
Depreciation and
amortization 31,490 26,191 98,761 77,243
Gain on sale of
operating assets (1,158) (6,112) (799) (20,806)
Corporate expenses 13,062 11,335 35,177 30,394

Operating income 75,589 69,183 33,183 39,260
Interest expense 15,285 15,018 45,646 45,194
Interest income (2,978) (3,704) (8,406) (10,631)
Equity in earnings of
nonconsolidated
affiliates (1,979) (3,211) (871) (2,571)
Minority interest
expense (income) 4,261 8,099 (284) 8,574
Other expense (income) -
net 277 (210) (838) (564)

Income (loss) from
continuing operations
before income taxes 60,723 53,191 (2,064) (742)
Income tax expense
(benefit):
Current (57,977) 5,880 (44,761) 22,545
Deferred 470 6,360 6,132 10,549

Income (loss) from
continuing operations 118,230 40,951 36,565 (33,836)
Income from discontinued
operations, net of tax 21,698 602 69,196 40,262

Net income 139,928 41,553 105,761 6,426
Other comprehensive
income (loss), net of
tax (29,731) 20,326 (17,843) 29,809

Comprehensive income $110,197 $61,879 $87,918 $36,235

Basic income (loss)
per common share:
Income (loss) from
continuing
operations $1.55 $0.59 $0.48 $(0.51)
Income from
discontinued
operations 0.29 0.01 0.92 0.61

Net income $1.84 $0.60 $1.40 $0.10

Diluted income (loss)
per common share:
Income (loss) from
continuing
operations $1.41 $0.54 $0.48 $(0.51)
Income from
discontinued
operations 0.26 0.01 0.91 0.61

Net income $1.67 $0.55 $1.39 $0.10

Weighted average
common shares
outstanding:
Basic 76,230,900 69,398,147 75,647,661 66,820,837
Diluted 84,736,808 78,215,047 76,360,255 66,820,837

CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2008 2007
(unaudited) (audited)
ASSETS (in thousands)
CURRENT ASSETS
Cash and cash equivalents $205,916 $338,991
Accounts receivable, less allowance of $9,243
as of September 30, 2008 and $18,928 as of
December 31, 2007 358,621 264,316
Prepaid expenses 257,901 186,379
Other current assets 37,288 44,722
Assets held for sale 11,376 -

Total Current Assets 871,102 834,408

PROPERTY, PLANT AND EQUIPMENT
Land, buildings and improvements 934,802 1,018,079
Furniture and other equipment 236,794 236,320
Construction in progress 148,883 51,725
1,320,479 1,306,124
Less accumulated depreciation 406,100 391,079
914,379 915,045
INTANGIBLE ASSETS
Intangible assets - net 506,244 382,999
Goodwill 451,248 471,542
OTHER LONG-TERM ASSETS
Notes receivable, less allowance of $565 as
of September 30, 2008 and December 31, 2007 1,440 1,703
Investments in nonconsolidated affiliates 21,347 23,443
Other long-term assets 182,641 122,963

Total Assets $2,948,401 $2,752,103

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $93,966 $79,273
Accrued expenses 512,606 511,636
Deferred revenue 255,995 259,868
Current portion of long-term debt 59,948 36,345
Other current liabilities 50,420 18,348

Total Current Liabilities 972,935 905,470

Long-term debt 739,386 786,261
Other long-term liabilities 144,094 91,465
Minority interest liability 67,823 61,841
Series A and Series B redeemable preferred stock 40,000 40,000
SHAREHOLDERS' EQUITY
Common stock 769 749
Additional paid-in capital 972,907 940,848
Retained deficit (25,180) (130,941)
Cost of shares held in treasury (2,900) -
Accumulated other comprehensive income 38,567 56,410

Total Shareholders' Equity 984,163 867,066

Total Liabilities and Shareholders' Equity $2,948,401 $2,752,103

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended
September 30,
2008 2007
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $105,761 $6,426
Reconciling items:
Depreciation 57,981 59,250
Amortization of intangibles 54,572 20,434
Impairment of operational assets 16,035 -
Deferred income tax expense 6,132 10,400
Amortization of debt issuance costs 3,368 1,337
Non-cash compensation expense 9,588 11,609
Gain on sale of operating assets (167,797) (20,934)
Gain on sale of other investments - (64)
Equity in losses (earnings) of nonconsolidated
affiliates 673 (3,377)
Minority interest expense (income) (123) 8,190
Changes in operating assets and liabilities, net
of effects of acquisitions and dispositions:
Increase in accounts receivable (126,615) (127,855)
Increase in prepaid expenses (83,259) (81,688)
Increase in other assets (89,552) (34,301)
Increase in accounts payable, accrued expenses
and other liabilities 116,788 93,703
Increase in deferred revenue 52,885 91,232
Decrease in other - net (401) -

Net cash provided by (used in) operating
activities (43,964) 34,362

CASH FLOWS FROM INVESTING ACTIVITIES
Collection of notes receivable 106 1,873
Advances to notes receivable - (722)
Distributions from nonconsolidated affiliates 4,976 8,983
Investments made to nonconsolidated affiliates (255) (2,967)
Proceeds from disposal of other investments - 3,616
Purchases of property, plant and equipment (138,550) (66,945)
Proceeds from disposal of operating assets, net
of cash divested 194,286 72,007
Cash paid for acquisitions, net of cash acquired (35,977) (76,051)
Purchases of intangible assets (46,316) -
Decrease in other - net 308 368

Net cash used in investing activities (21,422) (59,838)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt
issuance costs 275,242 315,741
Payments on long-term debt (327,614) (249,835)
Contributions from minority interest partners 8,847 -
Distributions to minority interest partners (1,845) (3,319)
Proceeds from exercise of stock options 636 424
Payments for purchases of common stock (3,628) -

Net cash provided by (used in) financing
activities (48,362) 63,011

Effect of exchange rate changes on cash (19,327) (73)

Net increase in cash and cash equivalents (133,075) 37,462

Cash and cash equivalents at beginning of period 338,991 313,880

Cash and cash equivalents at end of period $205,916 $351,342

Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations:

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements regarding the potential health and growth of Live Nation's business; the company's anticipated achievement of its strategic objectives; and the company's intention to launch its ticketing operations and the anticipated benefits of its ticketing strategy. Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company's plans, the risk that the company's markets do not evolve as anticipated, the potential impact of any general economic slowdown and operational challenges associated with building out the company's ticketing operations.

Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled "Item 1A. Risk Factors" of the company's most recent Annual Report filed on Form 10-K and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided below.

Adjusted Operating Income (Loss) is a non-GAAP financial measure that the company defines as operating income (loss) before depreciation and amortization, loss (gain) on sale of operating assets and non-cash compensation expense. The company uses Adjusted Operating Income (Loss) to evaluate the performance of its operating segments. The company believes that information about Adjusted Operating Income (Loss) assists investors by allowing them to evaluate changes in the operating results of the company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. Adjusted Operating Income (Loss) is not calculated or presented in accordance with U.S. generally accepted accounting principles. A limitation of the use of Adjusted Operating Income (Loss) as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue in the company's business. Accordingly, Adjusted Operating Income (Loss) should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with U.S. GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted Operating Income (Loss) as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash Flow is a non-GAAP financial measure that the company defines as Adjusted Operating Income (Loss) less maintenance capital expenditures, less net interest expense, less cash taxes, less distributions to minority interest partners plus distributions from investments in nonconsolidated affiliates net of contributions to investments in nonconsolidated affiliates. The company uses free cash flow, among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than maintenance capital expenditures. The company believes that information about free cash flow provides investors with an important perspective on the cash available to service debt and make acquisitions. Free cash flow is not calculated or presented in accordance with U.S. generally accepted accounting principles. A limitation of the use of free cash flow as a performance measure is that it does not necessarily represent funds available for operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash flow should be considered in addition to, and not as a substitute for, operating income (loss) and other measures of financial performance reported in accordance with U.S. GAAP. Furthermore, this measure may vary among other companies; thus, free cash flow as presented above may not be comparable to similarly titled measures of other companies.

Free Cash is a non-GAAP financial measure that the company defines as cash and cash equivalents less event-related deferred income, less accrued artist fees, less collections on behalf of others plus prepaids related to artist settlements/events. The company uses free cash as a proxy for how much cash it has available to, among other things, optionally repay debt balances, make acquisitions and finance new venue expenditures. Free cash is not calculated or presented in accordance with U.S. generally accepted accounting principles. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available for operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with U.S. GAAP. Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.

Reconciliations of Non-GAAP Measures to Their Most Directly Comparable GAAP

Measures (Unaudited)

Reconciliation of Adjusted Operating Income (Loss) to Operating Income (Loss)

- Three and Nine Months ended September 30

Loss
(gain)
Adjusted Non-cash on
operating compensa- sale of Depreciation Operating
income tion operating and income
(loss) expense assets amortization (loss)
($ in millions)

Three months ended September 30, 2008

North American Music $77.2 $0.8 $(0.7) $15.4 $61.7
International Music 46.3 0.2 - 8.0 38.1
Artist Nation (0.8) 0.2 - 3.6 (4.6)
Ticketing (5.1) 0.1 - 1.3 (6.5)
Other and Eliminations 2.7 - - 2.2 0.5
Corporate (10.7) 2.4 (0.5) 1.0 (13.6)
Total Live Nation $109.6 $3.7 $(1.2) $31.5 $75.6

Three months ended September 30, 2007

North American Music $65.2 $1.5 $(0.8) $13.4 $51.1
International Music 28.3 0.4 (5.6) 3.6 29.9
Artist Nation 7.8 1.0 - 3.8 3.0
Ticketing (0.5) 0.2 - 1.1 (1.8)
Other and Eliminations 3.0 - 0.4 2.8 (0.2)
Corporate (9.6) 1.8 (0.1) 1.5 (12.8)
Total Live Nation $94.2 $4.9 $(6.1) $26.2 $69.2

Nine months ended September 30, 2008

North American Music $111.1 $2.5 $(0.7) $44.7 $64.6
International Music 72.7 0.8 - 21.1 50.8
Artist Nation (13.4) 2.1 (0.1) 20.5 (35.9)
Ticketing (11.1) 0.3 - 3.3 (14.7)
Other and Eliminations 12.7 0.0 (0.2) 6.4 6.5
Corporate (30.3) 4.8 0.2 2.8 (38.1)
Total Live Nation $141.7 $10.5 $(0.8) $98.8 $33.2

Nine months ended September 30, 2007

North American Music $61.3 $3.2 $(6.8) $40.3 $24.6
International Music 58.8 0.5 (18.7) 11.9 65.1
Artist Nation 4.8 1.7 - 10.4 (7.3)
Ticketing (3.4) 0.5 - 2.2 (6.1)
Other and Eliminations 10.5 - 4.8 8.3 (2.6)
Corporate (25.6) 4.8 (0.1) 4.1 (34.4)
Total Live Nation $106.4 $10.7 $(20.8) $77.2 $39.3

Reconciliation of Adjusted Operating Income (Loss) to Free Cash Flow - Third

Quarter

($ in millions) Q3 2008 Q3 2007
Adjusted operating income $109.6 $94.2
Less: Interest expense - net (12.3) (11.3)
Cash taxes (18.9) (5.9)
Maintenance capital expenditures (2.6) (9.9)
Distributions to minority interest partners (1.4) 0.7
Distributions from (contributions to) investments
in nonconsolidated affiliates 1.2 2.3
Free cash flow $75.6 $70.1

Reconciliation of Cash and Cash Equivalents to Free Cash as of September 30,

2008

September 30,
($ in millions) 2008
Cash and cash equivalents $205.9
Deferred income $(222.5)
Accrued artist fees $(26.6)
Collections on behalf of others $(82.7)
Prepaids related to artist settlements/events $176.3
Free cash $50.4

Photo: http://www.newscom.com/cgi-bin/prnh/20070220/LATU096LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
Source: Live Nation

CONTACT: Media, John Vlautin of Live Nation, +1-310-867-7000; or
Investors, Brad Edwards of Brainerd Communicators, Inc., +1-212-986-6667, for
Live Nation

Web site: http://www.livenation.com/

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Profile: intent