Live Nation Entertainment Reports Third Quarter 2010 Financial Results

Live Nation Entertainment Reports Third Quarter 2010 Financial Results

LOS ANGELES, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Live Nation Entertainment (NYSE: LYV) released financial results for the three months ended September 30, 2010 today. Live Nation completed its merger with Ticketmaster in January 2010; consequently, third quarter 2010 reported results include the legacy Ticketmaster operations for the full quarter.

(Logo: http://photos.prnewswire.com/prnh/20100603/LA14899LOGO)

(Logo: http://www.newscom.com/cgi-bin/prnh/20100603/LA14899LOGO)

"During the third quarter we executed a number of revenue enhancement programs to drive attendance and reduce the impact of the economic slowdown on consumer spending," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment. "We continued to drive results in our higher margin businesses, including our eCommerce and sponsorship assets. Given our direct access to over 200 million fans through our online storefront, we're focused on improving our digital offerings and participating in multiple revenue streams linked to the online ticket purchase. Looking ahead, the artist pipeline for 2011 appears solid and we are taking a more profit-driven and measured approach to securing and pricing our shows given the uncertain economy. We are also taking additional steps to reduce our operating costs and further improve efficiencies across our operations as we move toward 2011. As we execute our strategy, we remain confident in our ability to maximize the value of our end-to-end platform and improve the performance of our business."

"Clearly the adverse economic environment has negatively impacted our concert business during the 2010 year so far, and has had a similar impact on our ticketing and artist businesses as well," said Irving Azoff, Executive Chairman of Live Nation Entertainment. "We continue to grow our Artist Nation business with new signings and acquisitions. While our roster of superstar clients and tour schedules for 2011 remains strong, we need some improvement in the overall economic environment in order to optimize profits going forward."

The company will host a teleconference today, November 4th, 2010 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 16775958. To access the call via webcast, please visit the Investor Relations section of the company's website at www.livenation.com/investors. Please visit the website approximately ten minutes prior to the 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 11, 2010.

Live Nation Combined Metrics

In order to give comparable information, metrics below include the results of the legacy Ticketmaster operations, as applicable, for the three months and from the date of the merger (January 25) through the nine months ended September 30 for each of 2010 and 2009.

COMBINED METRICS
----------------

Key Drivers Q3 2010 Q3 2009 Variance
------- ------- --------
CONCERTS
--------
Number of Concerts (est.) 4,907 4,775 2.8%
Total Attendance (est.) 16,447,000 19,534,000 (15.8%)
Ancillary Net Revenue per
Attendee -NA Amps $17.53 $17.67 (0.8%)
Ancillary Net Revenue per
Attendee -Intl Festivals $15.47 $14.81 4.5%
------------------------- ------ ------ ---
eCOMMERCE
---------
# of Average Monthly
Unique Visitors (rounded,
est.) 27,000,000 24,800,000 8.9%
Online Advertising Revenue $10.7 $9.7 10.3%
SPONSORSHIP
-----------
Number of Sponsors -as of
end of period (est.) 722 808 (10.6%)
Sponsorship Revenue
Recognized $69.5 $73.9 (6.0%)
Average Revenue per
Sponsor (rounded, whole
$) $96,000 $91,000 5.5%
------------------------ ------- ------- ---
TICKETING
---------
# of Tickets Sold
(rounded, est.) 32,271,000 33,711,000 (4.3%)
----------------- ---------- ---------- ------

(Unaudited; $ in millions except as noted)
------------------------------------------
Key 9 months 9 months
Drivers 2010 2009 Variance
--------- --------- --------
CONCERTS
--------
Number
of
Concerts
(est.) 15,049 14,933 0.8%
Total
Attendance
(est.) 35,667,000 39,711,000 (10.2%)
Ancillary
Net
Revenue
per
Attendee
-NA
Amps $17.80 $17.89 (0.5%)
Ancillary
Net
Revenue
per
Attendee
-Intl
Festivals $15.50 $14.43 7.4%
--------- ------ ------ ---
eCOMMERCE
---------
# of
Average
Monthly
Unique
Visitors
(rounded,
est.) 26,900,000 25,100,000 7.2%
Online
Advertising
Revenue $26.7 $23.6 13.1%
SPONSORSHIP
-----------
Number
of
Sponsors
-as of
end of
period
(est.) 722 808 (10.6%)
Sponsorship
Revenue
Recognized $129.6 $133.3 (2.8%)
Average
Revenue
per
Sponsor
(rounded,
whole
$) $179,000 $165,000 8.5%
---------- -------- -------- ---
TICKETING
---------
# of
Tickets
Sold
(rounded,
est.) 86,015,000 95,385,000 (9.8%)
---------- ---------- ---------- ------

(Unaudited; $ in
millions,
tickets in
thousands)
----------------
Primary Total
Ticketing Gross Value Ticket Mix %
Volume Trends of Tickets Volume of
by Category Sold Totals Total
-------------- ------------ ------- ------
Third Quarter - 2010
--------------------
Concerts $1,068 17,948 56%
Sports 330 6,084 19%
Arts & Theater 319 4,563 14%
Family 100 2,392 7%
Other (1) 43 1,284 4%
--------- --- ----- ---
Total - 2010 $1,860 32,271 100%
---------------- ------ ------ ---
Third Quarter - 2009
--------------------
Concerts $1,083 18,564 55%
Sports 324 6,042 18%
Arts & Theater 341 5,171 15%
Family 107 2,543 8%
Other (1) 38 1,391 4%
--------- --- ----- ---
Total - 2009 $1,893 33,711 100%
------------ ------ ------ ---

(Unaudited; $ in
millions,
tickets in
thousands)
----------------
Primary Total
Ticketing Gross Value Ticket Mix %
Volume Trends of Tickets Volume of
by Category Sold Totals Total
-------------- ------------ ------- ------
Nine Months - 2010
------------------
Concerts $2,979 46,325 54%
Sports 861 16,771 19%
Arts & Theater 850 12,611 15%
Family 287 7,232 8%
Other (1) 113 3,076 4%
--------- --- ----- ---
Total - 2010 $5,090 86,015 100%
---------------- ------ ------ ---
Nine Months - 2009
------------------
Concerts $3,388 52,795 55%
Sports 848 17,187 18%
Arts & Theater 978 14,756 15%
Family 279 7,310 8%
Other (1) 111 3,337 4%
--------- --- ----- ---
Total - 2009 $5,604 95,385 100%
------------ ------ ------ ---

(1) Other category includes tickets for: comedy shows; parking; audio
and facility tours; donations; lectures; and seminars.

In order to give comparable information, the combined results of operations below include the results of the legacy Ticketmaster operations for the three months and from the date of the merger (January 25) through the nine months ended September 30 for each of 2010 and 2009. As reported 2009 includes only Live Nation operations as reported in 2009.

FINANCIAL HIGHLIGHTS - 3rd QUARTER and NINE MONTHS
(Unaudited)
-----------

COMBINED
Q3 2010 Q3 2009 Growth
------- ------- ------
($ in millions)
Revenue
Concerts $1,380.5 $1,613.7 (14.5%)
Ticketing 261.7 292.8 (10.6%)
Artist Nation 111.0 151.7 (26.8%)
eCommerce 25.8 25.3 2.0%
Sponsorship 69.5 73.9 (6.0%)
Other & Eliminations (12.1) (14.3) 15.4%
----- ----- ----
$1,836.4 $2,143.1 (14.3%)
======== ======== =======

Adjusted Operating
Income (Loss)
Concerts $61.9 $103.1 (40.0%)
Ticketing 65.5 56.0 17.0%
Artist Nation 21.7 25.5 (14.9%)
eCommerce 13.5 13.0 3.8%
Sponsorship 53.1 48.0 10.6%
Other & Eliminations - 0.4 **
Corporate (23.5) (23.8) (1.3%)
----- ----- ------
$192.2 $222.2 (13.5%)
====== ====== =======

Operating Income
(Loss)
Concerts $30.4 $71.5 (57.5%)
Ticketing 43.4 32.2 34.8%
Artist Nation 5.7 8.7 (34.5%)
eCommerce 11.1 10.8 2.8%
Sponsorship 52.9 47.9 10.4%
Other & Eliminations 0.6 0.2 **
Corporate (29.1) (27.1) 7.4%
----- ----- ---
$115.0 $144.2 (20.2%)
====== ====== =======

Acquisition Expenses $4.8 $14.7
$110.2 $129.5

COMBINED
9 months 9 months Growth
-------- -------- ------
2010 2009
---- ----
($ in millions)
Revenue
Concerts $2,648.1 $2,951.6 (10.3%)
Ticketing 734.7 856.4 (14.2%)
Artist Nation 269.2 332.3 (19.0%)
eCommerce 62.8 61.2 2.6%
Sponsorship 129.6 133.3 (2.8%)
Other & Eliminations (18.5) (13.8) (34.1%)
----- ----- -------
$3,825.9 $4,321.0 (11.5%)
======== ======== =======

Adjusted Operating
Income (Loss)
Concerts $43.7 $101.0 (56.7%)
Ticketing 175.1 157.6 11.1%
Artist Nation 32.4 41.9 (22.7%)
eCommerce 24.4 25.2 (3.2%)
Sponsorship 88.1 81.4 8.2%
Other & Eliminations (0.4) 1.0 **
Corporate (57.3) (66.9) 14.3%
----- ----- ----
$306.0 $341.2 (10.3%)
====== ====== =======

Operating Income
(Loss)
Concerts $(40.4) $4.7 **
Ticketing 94.1 86.7 8.5%
Artist Nation (4.2) (2.3) **
eCommerce 18.7 18.6 0.5%
Sponsorship 87.5 81.2 7.8%
Other & Eliminations 1.3 0.7 **
Corporate (81.2) (77.2) 5.2%
----- ----- ---
$75.8 $112.4 (32.6%)
===== ====== =======

Acquisition Expenses $36.4 $43.0
----- -----
$39.4 $69.4

AS REPORTED 2009
9 Months
Q3 2009 2009
------- ---------
($ in millions)
Revenue
Concerts $1,613.7 $2,951.6
Ticketing 26.0 51.9
Artist Nation 90.2 193.7
eCommerce 5.4 11.0
Sponsorship 73.5 132.3
Other & Eliminations (14.2) (13.8)
----- -----
$1,794.6 $3,326.7
======== ========

Adjusted Operating
Income (Loss)
Concerts $103.1 $101.0
Ticketing 11.4 10.5
Artist Nation 6.7 8.2
eCommerce 0.6 (3.8)
Sponsorship 47.7 80.5
Other & Eliminations 0.4 1.0
Corporate (14.3) (36.4)
----- -----
$155.6 $161.0
====== ======

Operating Income
(Loss)
Concerts $71.4 $4.7
Ticketing 8.7 2.6
Artist Nation 4.8 1.0
eCommerce (0.4) (7.8)
Sponsorship 47.6 80.4
Other & Eliminations 0.2 0.6
Corporate (16.2) (43.0)
----- -----
$116.1 $38.5
====== =====

Acquisition Expenses $7.7 $26.5
---- -----
$108.4 $12.0

** percentages are not meaningful

Free cash as of September 30, 2010 was $425.0 million. Free cash flow was $147.1 million for the third quarter of 2010 as compared to $153.4 million on a combined basis for the same period in 2009, and $177.7 million for the nine months ended September 30, 2010 as compared to $163.1 million on a combined basis for the same period of last year.

About Live Nation Entertainment:

Live Nation Entertainment (NYSE:LYV) is the largest live entertainment company in the world: connecting 200 million fans to 100,000 events in over 40 countries which has made Ticketmaster.com the #3 eCommerce website in the world. For additional information, visit www.livenation.com/investors.

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended
------------------
September 30,
-------------
2010 2009
--- ---

(in thousands except share and per share
data)
Revenue $1,836,351 $1,794,588
Operating
expenses:
Direct
operating
expenses 1,387,302 1,467,647
Selling,
general and
administrative
expenses 244,065 158,412
Depreciation
and
amortization 65,320 35,953
Loss (gain)
on sale of
operating
assets (779) (27)
Corporate
expenses 27,660 16,424
Acquisition
transaction
expenses 2,581 7,780
----- -----

Operating
income 110,202 108,399
Interest
expense 29,414 17,438
Loss on
extinguishment
of debt - -
Interest
income (715) (342)
Equity in
earnings of
nonconsolidated
affiliates (629) (163)
Other
expense
(income) -
net (212) 3,858
---- -----

Income
(loss) from
continuing
operations
before
income
taxes 82,344 87,608
Income tax
expense
(benefit):
Current 14,004 17,344
Deferred 2,905 (2,129)
----- ------

Income
(loss) from
continuing
operations 65,435 72,393
Income
(loss) from
discontinued
operations,
net of tax (3,213) 6,779
------ -----

Net income
(loss) 62,222 79,172
Net income
attributable
to
noncontrolling
interests 10,818 9,925
------ -----
Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $51,404 $69,247
======= =======

Basic net
income
(loss) per
common
share
attributable
to common
stockholders:
Income
(loss) from
continuing
operations
attributable
to Live
Nation
Entertainment,
Inc. $0.32 $0.74
Income
(loss) from
discontinued
operations
attributable
to Live
Nation
Entertainment,
Inc. (0.02) 0.08
----- ----

Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $0.30 $0.82
===== =====

Diluted net
income
(loss) per
common
share
attributable
to common
stockholders:
Income
(loss) from
continuing
operations
attributable
to Live
Nation
Entertainment,
Inc. $0.32 $0.71
Income
(loss) from
discontinued
operations
attributable
to Live
Nation
Entertainment,
Inc. (0.02) 0.07
----- ----

Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $0.30 $0.78
===== =====

Weighted
average
common
shares
outstanding:

Basic 170,285,159 83,631,558
Diluted 172,302,273 92,717,666

Nine Months Ended
-----------------
September 30,
-------------
2010 2009
---- ----

(in thousands except share and per share
data)
Revenue $3,825,902 $3,326,716
Operating
expenses:
Direct
operating
expenses 2,769,459 2,679,438
Selling,
general and
administrative
expenses 727,708 453,920
Depreciation
and
amortization 181,525 113,539
Loss (gain)
on sale of
operating
assets 3,155 (1,009)
Corporate
expenses 86,666 42,308
Acquisition
transaction
expenses 17,992 26,515
------ ------

Operating
income 39,397 12,005
Interest
expense 85,773 50,557
Loss on
extinguishment
of debt 21,172 -
Interest
income (2,158) (1,908)
Equity in
earnings of
nonconsolidated
affiliates (2,884) (979)
Other
expense
(income) -
net (1,845) 4,465
------ -----

Income
(loss) from
continuing
operations
before
income
taxes (60,661) (40,130)
Income tax
expense
(benefit):
Current 17,844 28,220
Deferred (4,950) (4,316)
------ ------

Income
(loss) from
continuing
operations (73,555) (64,034)
Income
(loss) from
discontinued
operations,
net of tax (3,893) 13,241
------ ------

Net income
(loss) (77,448) (50,793)
Net income
attributable
to
noncontrolling
interests 11,648 9,865
------ -----
Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $(89,096) $(60,658)
======== ========

Basic net
income
(loss) per
common
share
attributable
to common
stockholders:
Income
(loss) from
continuing
operations
attributable
to Live
Nation
Entertainment,
Inc. $(0.53) $(0.90)
Income
(loss) from
discontinued
operations
attributable
to Live
Nation
Entertainment,
Inc. (0.02) 0.16
----- ----

Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $(0.55) $(0.74)
====== ======

Diluted net
income
(loss) per
common
share
attributable
to common
stockholders:
Income
(loss) from
continuing
operations
attributable
to Live
Nation
Entertainment,
Inc. $(0.53) $(0.90)
Income
(loss) from
discontinued
operations
attributable
to Live
Nation
Entertainment,
Inc. (0.02) 0.16
----- ----

Net income
(loss)
attributable
to Live
Nation
Entertainment,
Inc. $(0.55) $(0.74)
====== ======

Weighted
average
common
shares
outstanding:

Basic 162,285,785 82,296,605
Diluted 162,285,785 82,296,605

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS

September December
30, 31,
2010 2009
---- ----
(Unaudited) (Audited)
----------- ---------
(in thousands)
ASSETS
Current assets
Cash and cash equivalents $855,616 $236,955
Accounts receivable, less allowance
of $13,042 as of September 30, 2010
and $8,230 as of December 31, 2009 470,503 176,179
Prepaid expenses 433,434 277,599
Other current assets 46,596 27,133
------ ------
Total current assets 1,806,149 717,866
Property, plant and equipment
Land, buildings and improvements 888,838 875,958
Computer equipment and capitalized
software 186,251 131,875
Furniture and other equipment 165,245 156,756
Construction in progress 32,183 17,398
------ ------

1,272,517 1,181,987
Less accumulated depreciation 503,390 432,003
------- -------

769,127 749,984
Intangible assets
Definite-lived intangible assets -
net 967,101 442,641
Indefinite-lived intangible assets 381,157 28,248
Goodwill 1,232,693 204,672

Investments in nonconsolidated
affiliates 27,719 2,077
Other long-term assets 208,603 196,271

Total assets $5,392,549 $2,341,759
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, client accounts $428,688 $-
Accounts payable 99,799 50,844
Accrued expenses 558,826 357,138
Deferred revenue 326,219 284,536
Current portion of long-term debt 65,324 41,032
Other current liabilities 52,613 18,684
------ ------

Total current liabilities 1,531,469 752,234

Long-term debt, net 1,671,789 699,037
Long-term deferred income taxes 227,337 30,480
Other long-term liabilities 198,957 94,567
Series A and Series B redeemable
preferred stock - 40,000
Commitments and contingent
liabilities

Redeemable noncontrolling interests 132,121 -

Stockholders' equity
Common stock 1,723 860
Additional paid-in capital 2,044,110 1,090,572

Accumulated deficit (522,881) (433,785)
Cost of shares held in treasury (9,592) (9,529)
Accumulated other comprehensive
income (loss) (3,211) 4,199
------ -----

Total Live Nation Entertainment,
Inc. stockholders' equity 1,510,149 652,317
Noncontrolling interests 120,727 73,124
------- ------
Total stockholders' equity 1,630,876 725,441
--------- -------
Total liabilities and stockholders'
equity $5,392,549 $2,341,759
========== ==========

LIVE NATION ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended
-----------------
September 30,
-------------
2010 2009
---- ----
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(77,448) $(50,793)
Reconciling items:
Depreciation 90,239 76,033
Amortization 91,286 41,666
Deferred income tax benefit (4,950) (4,651)
Amortization of debt issuance costs 3,265 2,763
Amortization of debt discount/premium,
net 5,109 6,528
Provision for uncollectible accounts
receivable and advances 16,661 2,704
Non-cash loss on extinguishment of debt 8,272 -
Non-cash compensation expense 45,532 10,011
Unrealized changes in fair value
contingent consideration 2,965 -
Loss (gain) on sale of operating assets 7,048 (3,658)
Equity in earnings of nonconsolidated
affiliates (2,884) (1,982)
Changes in operating assets and
liabilities, net of effects of
acquisitions and dispositions:
Increase in accounts receivable (153,403) (110,707)
Increase in prepaid expenses (110,428) (73,228)
Increase in other assets (27,083) (22,522)
Increase in accounts payable, accrued
expenses and other liabilities 84,829 203,412
Increase (decrease) in deferred revenue 34,696 (995)
------ ----

Net cash provided by operating
activities 13,706 74,581

CASH FLOWS FROM INVESTING ACTIVITIES
Collection and advances of notes
receivable 485 61
Distributions from nonconsolidated
affiliates 6,019 2,223
Investments made to nonconsolidated
affiliates (775) (821)
Purchases of property, plant and equipment (49,165) (53,854)
Proceeds from disposal of operating
assets, net of cash divested 22,119 38,516
Cash paid for acquisitions, net of cash
acquired 560,732 (5,146)
Purchases of intangible assets (1,371) (27,863)
Decrease (increase) in other - net (246) 187
---- ---

Net cash provided by (used in) investing
activities 537,798 (46,697)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt
issuance costs 1,318,132 430,511
Payments on long-term debt (1,191,712) (416,143)
Redemption of preferred stock (40,000) -
Contributions from noncontrolling interest
partners 14 -
Distributions to noncontrolling interest
partners (10,538) (816)
Proceeds from exercise of stock options 4,526 -
Issuance of treasury stock - 1,553
Equity issuance costs (357) -
Payments for purchases of common stock (1,567) (5,803)
Payments for deferred and contingent
consideration. (11,109) (7,392)
------- ------

Net cash provided by financing
activities 67,389 1,910
Effect of exchange rate changes on cash
and cash equivalents (232) 28,635
---- ------

Net increase in cash and cash
equivalents 618,661 58,429
Cash and cash equivalents at beginning of
period 236,955 199,660
------- -------

Cash and cash equivalents at end of period $855,616 $258,089
======== ========

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 artist pipeline for 2011; potential improvements in the company's digital offerings and the benefits expected to be derived therefrom; anticipated reduced operating costs and increased efficiencies; and the potential growth of the company's Artist Nation business. 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, challenges related to the post-merger integration of Live Nation and Ticketmaster, the potential impact of the economic slowdown and operational challenges associated with selling tickets and staging events.

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), or AOI, is a non-GAAP financial measure that the company defines as operating income (loss) before acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration arrangements, merger bonuses, payments under the Azoff Trust note and merger-related severance), depreciation and amortization (including goodwill impairment), loss (gain) on sale of operating assets and non-cash and certain stock-based compensation expense (including expense associated with grants of certain stock-based awards which are classified as liabilities). The company uses AOI to evaluate the performance of its operating segments. The company believes that information about AOI assists investors by allowing them to evaluate changes in the operating results of the portfolio of the businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. AOI is not calculated or presented in accordance with GAAP. A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in the company's business. Accordingly, AOI 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 GAAP. Furthermore, this measure may vary among other companies; thus, AOI 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 cash interest expense, less cash taxes, less net 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 GAAP. 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 is not necessarily a measure of the company's ability to fund its 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 GAAP. Furthermore, this measure may vary among other companies; thus, free cash flow as presented herein 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 ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and for cash collected on behalf of others for ticket sales, plus event-related prepaids. 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 venue and other revenue generating expenditures. Free cash is not calculated or presented in accordance with GAAP. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from 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 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)
COMBINED RESULTS
----------------
Reconciliation of Adjusted Operating Income (Loss) to Operating
Income (Loss)
---------------------------------------------------------------

Non-cash
Adjusted and stock- Loss (gain)
operating based on sale of
income compensation operating
(loss) expense assets
Three months ended September 30, 2010
-------------------------------------

Concerts $61.9 $2.6 $(0.8)
Ticketing 65.5 1.4 -
Artist Nation 21.7 3.4 -
eCommerce 13.5 0.2 -
Sponsorship 53.1 0.1 -
Other &
Eliminations - - -
Corporate (23.5) 5.0 -
----- --- ---
Total Live Nation $192.2 $12.7 $(0.8)
====== ===== =====

Three months ended September 30, 2009
-------------------------------------

Concerts $103.1 $1.8 $(0.2)
Ticketing 56.0 1.6 -
Artist Nation 25.5 3.8 -
eCommerce 13.0 - -
Sponsorship 48.0 - -
Other &
Eliminations 0.4 - 0.1
Corporate (23.8) 3.1 -
----- --- ---
Total Live Nation $222.2 $10.3 $(0.1)
====== ===== =====

Nine months ended September 30, 2010
-------------------------------------

Concerts $43.7 $6.2 $(2.0)
Ticketing 175.1 10.7 5.2
Artist Nation 32.4 5.8 -
eCommerce 24.4 0.4 -
Sponsorship 88.1 0.4 -
Other &
Eliminations (0.4) - -
Corporate (57.3) 22.0 -
----- ---- ---
Total Live Nation $306.0 $45.5 $3.2
====== ===== ====

Nine months ended September 30, 2009
------------------------------------

Concerts $101.0 $3.8 $(1.1)
Ticketing 157.6 4.7 -
Artist Nation 41.9 11.1 -
eCommerce 25.2 0.3 -
Sponsorship 81.4 - -
Other &
Eliminations 1.0 - 0.1
Corporate (66.9) 9.2 -
----- --- ---
Total Live Nation $341.2 $29.1 $(1.0)
====== ===== =====

Depreciation Operating
and Acquisition income
($ in millions) amortization expenses (loss)
Three months ended September 30, 2010
-------------------------------------

Concerts $29.7 $(2.9) $33.3
Ticketing 20.7 0.9 42.5
Artist Nation 12.6 1.3 4.4
eCommerce 2.2 0.1 11.0
Sponsorship 0.1 - 52.9
Other &
Eliminations (0.6) - 0.6
Corporate 0.6 5.4 (34.5)
--- --- -----
Total Live Nation $65.3 $4.8 $110.2
===== ==== ======

Three months ended September 30, 2009
-------------------------------------

Concerts $30.0 $0.7 $70.8
Ticketing 22.2 - 32.2
Artist Nation 13.0 - 8.7
eCommerce 2.2 - 10.8
Sponsorship 0.1 - 47.9
Other &
Eliminations 0.1 - 0.2
Corporate 0.2 14.0 (41.1)
--- ---- -----
Total Live Nation $67.8 $14.7 $129.5
===== ===== ======

Nine months ended September 30, 2010
-------------------------------------

Concerts $79.9 $(2.3) $(38.1)
Ticketing 65.1 7.4 86.7
Artist Nation 30.8 7.1 (11.3)
eCommerce 5.3 0.8 17.9
Sponsorship 0.2 0.1 87.4
Other &
Eliminations (1.7) - 1.3
Corporate 1.9 23.3 (104.5)
--- ---- ------
Total Live Nation $181.5 $36.4 $39.4
====== ===== =====

Nine months ended September 30, 2009
------------------------------------

Concerts $93.6 $0.8 $3.9
Ticketing 66.2 - 86.7
Artist Nation 33.1 - (2.3)
eCommerce 6.3 - 18.6
Sponsorship 0.2 - 81.2
Other &
Eliminations 0.2 - 0.7
Corporate 1.1 42.2 (119.4)
--- ---- ------
Total Live Nation $200.7 $43.0 $69.4
====== ===== =====

AS REPORTED RESULTS
-------------------
Reconciliation of Adjusted Operating Income (Loss) to Operating
Income (Loss)
---------------------------------------------------------------

Three months ended September 30, 2009
-------------------------------------

Concerts $103.1 $1.8 $(0.1)
Ticketing 11.4 0.1 -
Artist Nation 6.7 - -
eCommerce 0.6 - -
Sponsorship 47.7 - -
Other &
Eliminations 0.4 - 0.1
Corporate (14.3) 1.7 -
----- --- ---
Total Live Nation $155.6 $3.6 $-
====== ==== ===

Nine months ended September 30, 2009
------------------------------------

Concerts $101.0 $3.8 $(1.1)
Ticketing 10.5 0.1 -
Artist Nation 8.2 0.3 -
eCommerce (3.8) 0.2 -
Sponsorship 80.5 - -
Other &
Eliminations 1.0 - 0.1
Corporate (36.4) 5.5 -
----- --- ---
Total Live Nation $161.0 $9.9 $(1.0)
====== ==== =====

Three months ended September 30, 2009
-------------------------------------

Concerts $30.0 $0.6 $70.8
Ticketing 2.6 - 8.7
Artist Nation 1.9 - 4.8
eCommerce 1.0 - (0.4)
Sponsorship 0.1 - 47.6
Other &
Eliminations 0.1 - 0.2
Corporate 0.2 7.1 (23.3)
--- --- -----
Total Live Nation $35.9 $7.7 $108.4
===== ==== ======

Nine months ended September 30, 2009
------------------------------------

Concerts $93.6 $0.8 $3.9
Ticketing 7.8 - 2.6
Artist Nation 6.9 - 1.0
eCommerce 3.8 - (7.8)
Sponsorship 0.1 - 80.4
Other &
Eliminations 0.3 - 0.6
Corporate 1.1 25.7 (68.7)
--- ---- -----
Total Live Nation $113.6 $26.5 $12.0
====== ===== =====

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

in Reported Reported Combined
--- -------- -------- --------
($ in millions) Q3 2010 Q3 2009 Q3 2009
--------------- ------- ------- -------
Adjusted operating income $192.2 $155.6 $222.2
Less: Cash interest expense-net (25.6) (13.9) (27.4)
Cash taxes (14.0) (18.9) (26.7)
Maintenance capital expenditures (7.4) (5.2) (12.5)
Distributions to noncontrolling
interest partners (2.3) (0.5) (1.1)
Distributions from (contributions to)
investments in nonconsolidated
affiliates 4.2 (0.1) (1.1)
--- ---- ----
Free cash flow $147.1 $117.0 $153.4
-------------- ------ ------ ------

($ in millions) Reported Reported Combined
--------------- -------- -------- --------
9 months 9 months 9 months
-------- -------- --------
2010 2009 2009
---- ---- ----
Adjusted operating income $306.0 $161.0 $341.2
Less: Cash interest
expense - net (75.2) (39.4) (82.9)
Cash taxes (17.8) (32.5) (56.8)
Maintenance capital
expenditures (30.0) (13.9) (35.5)
Distributions to
noncontrolling interest
partners (10.5) (0.8) (7.1)
Distributions from
(contributions to)
investments in
nonconsolidated
affiliates 5.2 1.4 4.2
--- --- ---
Free cash flow $177.7 $75.8 $163.1
-------------- ------ ----- ------

Reconciliation of Cash and Cash Equivalents to Free Cash
--------------------------------------------------------

Sept 30,
($ in millions) 2010
Cash and cash equivalents $855.6
Client Cash $(350.2)
Deferred revenue - event related $(283.0)
Accrued artist fees $(39.0)
Collections on behalf of others $(39.9)
Prepaids related to artist
settlements/events $281.5
------
Free cash $425.0
--------- ------

SOURCE Live Nation Entertainment

Photo:http://photos.prnewswire.com/prnh/20100603/LA14899LOGO
http://photoarchive.ap.org/
Photo:http://www.newscom.com/cgi-bin/prnh/20100603/LA14899LOGO
http://photoarchive.ap.org/
Live Nation Entertainment

CONTACT: Linda Bandov Pazin of Live Nation Entertainment, Inc., +1-310-867-7000, lindabandov@livenation.com

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

-------
Profile: intent