Live Nation Entertainment Reports Third Quarter And Nine Months 2014 Financial Results

Live Nation Entertainment Reports Third Quarter And Nine Months 2014 Financial Results

Highlights (year over year):

- Revenue for the Third Quarter Up 11%

- Adjusted Operating Income for the Third Quarter Up 17%

- Operating Income for the Third Quarter Up 19%

- Free Cash Flow for the Third Quarter Up 19%

- Ticketmaster Resale Up Over 40% for the Nine Months



LOS ANGELES, Oct. 30, 2014 /PRNewswire/ -- Live Nation Entertainment (NYSE: LYV) today released financial results for the three and nine months ended September 30, 2014.

We had a great third quarter and 2014 is on track to be another record year delivering revenue, adjusted operating income, or AOI, and free cash flow growth. For the first nine months of the year, revenue is up 9%, and AOI is up 11%, with all divisions growing both top line and AOI. We are continuing to build share in concerts and artist management and drive growth in sponsorship and ticketing. The live business continues to have a robust outlook as artists are reliant on touring as their main earnings driver and the best means to engage and connect with their fan base. The ongoing flow of new artists continues to re-energize the business as fans more than ever find the live experience, from club shows to stadiums to festivals, a top entertainment choice and the best and most unique means to celebrate their favorite artist and share the experience with fans, both on-site and online.

The connected world and mobile access allow fans to become the greatest marketing boon for artists, as our research has shown that 64% of concertgoers engage in online activities at the show, 76% of concert attendees in the U.S. who took photos or videos at a concert post them online, and all of this generates billions of earned media impressions on social media from our shows, for our artists, every year. At Live Nation, we see great continued runway ahead given the fragmented global landscape in concerts, management and ticketing and as our scale grows, we continue to drive increasing economics in our business model, with higher profits per show, more advertising and improved ticket conversion.

Concerts

Concert fan demand remains strong globally and we are continuing to grow by taking share, promoting 22 of the top 25 global tours this year including Jay-Z and Beyonce, One Direction and Luke Bryan. We are also further growing our festival portfolio and we are expecting nearly five million fans across our 65 global festivals in 2014, 8% growth from 2013. We continue to add more markets to our global footprint of promoting concerts in 40 countries, adding a partner in the Philippines this quarter. And we are getting more fans to our shows, increasing our attendance per show by 4% through the first nine months as compared to the prior year.

http://photos.prnewswire.com/prnvar/20141030/155616

Artist Nation

Artist management is now operating in full gear as we have attracted a number of new managers to the group this year, and we are managing additional acts including Madonna, Lady Gaga, Alicia Keys, Britney Spears, Miley Cyrus, Nicki Minaj and Lil' Wayne.

Sponsorship & Advertising

The Sponsorship & Advertising business continues to deliver strong margins and growth to drive our overall AOI. The success of our Live Nation channel at Yahoo! demonstrates the potential we have in further monetizing our concerts platform by creating compelling content that can be widely distributed and drive advertising revenue. We have now delivered over 100 continuous days of a live show a night with millions of viewers tuning in to watch.

http://photos.prnewswire.com/prnvar/20141030/155618

We believe we have great growth opportunities as we improve the advertising experience for brands that want to reach the highly desirable music fan on-site and on all screens in a highly targeted fashion. Our combination of on-site touch, engaging content and data provides a unique and compelling network for advertisers.

Ticketing

Ticketmaster's new product TM+ is working even better than our optimistic expectations of a year ago. It has been activated for over 13,000 events since its launch last September and year-on-year, as of September 2014, global secondary gross transaction value, or GTV, is up 44% year-to-date. The broad adoption of the platform by fans and teams gives us confidence that we will capture over $1 billion in resale GTV from our launch in September 2013 through the end of 2014.

As we near the end of 2014, Live Nation has never been in a stronger position. We are on track to deliver our three-year strategic plan for 2015, and have great confidence in our longer term growth opportunities as we see the global opportunities in our core businesses of concerts, sponsorship and advertising, ticketing, and artist management.

Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.

The company will webcast a teleconference today at 5:00 p.m. Eastern Time to discuss its financial performance. Interested parties should visit the Investor Relations section of the company's website at investors.livenationentertainment.comto register for the webcast. Supplemental statistical and financial information to be provided on the call, if any, will be available under the same link. A replay of the webcast will also be available on the Live Nation website.





FINANCIAL HIGHLIGHTS - 3rd QUARTER AND 9 MONTHS

(unaudited; $ in millions)
-------------------------



Q3 2014 Q3 2013 Growth 9 months 2014 9 months 2013 Growth
------- ------- ------ ------------- ------------- ------

Revenue

Concerts $1,925.5 $1,727.0 11% $3,760.1 $3,433.5 10%

Ticketing 386.1 356.8 8% 1,111.6 1,019.8 9%

Artist Nation 130.9 111.1 18% 282.7 261.1 8%

Sponsorship &
Advertising 114.6 110.2 4% 230.9 221.6 4%

Other & Eliminations (55.1) (42.9) (28%) (90.2) (70.6) (28%)
----- ----- ---- ----- ----- ----

$2,502.0 $2,262.2 11% $5,295.1 $4,865.4 9%
======== ======== === ======== ======== ===


Adjusted Operating Income (Loss)

Concerts $82.8 $70.7 17% $117.3 $100.2 17%

Ticketing 85.8 80.3 7% 232.4 217.4 7%

Artist Nation 21.9 12.7 73% 30.2 20.1 50%

Sponsorship &
Advertising 88.3 83.3 6% 163.1 154.3 6%

Other & Eliminations 1.8 (3.5) ** (0.3) (1.2) 75%

Corporate (22.5) (22.3) (1%) (60.0) (56.9) (5%)
----- ----- --- ----- ----- ---

$258.1 $221.2 17% $482.7 $433.9 11%
====== ====== === ====== ====== ===


Operating Income (Loss)

Concerts $49.9 $44.6 12% $28.3 $41.8 (32%)

Ticketing 30.5 28.0 9% 87.3 82.5 6%

Artist Nation 9.1 1.8 ** (3.9) (12.0) 67%

Sponsorship &
Advertising 86.7 83.2 4% 158.8 153.0 4%

Other & Eliminations 2.0 (3.1) ** 1.2 0.1 **

Corporate (27.6) (28.5) 3% (77.7) (74.7) (4%)
----- ----- --- ----- ----- ---

$150.6 $126.0 19% $194.0 $190.7 2%
====== ====== === ====== ====== ===


** percentages are not meaningful
As of September 30, 2014, total cash and cash equivalents were $1.4 billion, which includes $532 million in ticketing client cash and $640 million in free cash. Event-related deferred revenue was $319 million as of September 30, 2014, compared to $313 million as of the same date in 2013. Free cash flow was $198 million for the third quarter of 2014 as compared to $167 million in the third quarter of last year, and $308 million for the first nine months of 2014 versus $283 million for the same period in 2013.






LIVE NATION ENTERTAINMENT, INC.

KEY OPERATING METRICS


Three Months Ended Nine Months Ended
September 30, September 30,
-------------

2014 2013 2014 2013
---- ---- ---- ----

Concerts (1)

Total estimated events:

North America 4,102 3,864 11,369 11,215

International 1,055 1,209 4,253 4,672
----- ----- ----- -----

Total estimated events 5,157 5,073 15,622 15,887
----- ----- ------ ------

Total estimated fans (rounded):

North America 17,061,000 14,835,000 32,035,000 29,174,000

International 4,990,000 6,348,000 13,508,000 15,419,000


Total estimated fans 22,051,000 21,183,000 45,543,000 44,593,000
---------- ---------- ---------- ----------

Ticketing

Number of tickets sold (in thousands) (2) 36,603 37,594 110,166 109,610




(1) Events
generally
represent a
single
performance by
an artist.
Fans generally
represent the
number of
people who
attend an
event.
Festivals are
counted as one
event in the
quarter in
which the
festival
begins, but
number of fans
is based on
the days the
fan was
present at the
festival and
thus can be
reported
across
multiple
quarters.
Events and fan
attendance
metrics are
estimated each
quarter.

(2) The number of
tickets sold
includes
primary
tickets only.
This metric
includes
tickets sold
during the
period
regardless of
event timing
except for our
promoted
events in our
owned or
operated
venues and in
certain
European
territories
where these
tickets are
reported as
the events
occur. The
total number
of tickets
sold reported
above for the
three months
ended
September 30,
2014 and 2013
excludes
approximately
71 million and
75 million,
respectively,
and for the
nine months
ended
September 30,
2014 and 2013
excludes
approximately
206 million
and 214
million,
respectively,
of tickets
sold using our
Ticketmaster
systems,
through season
seat packages
and our venue
clients' box
offices, for
which we do
not receive a
fee.
About Live Nation Entertainment:

Live Nation Entertainment (NYSE: LYV) is the world's leading live entertainment company comprised of global market leaders: Ticketmaster, Live Nation Concerts, Live Nation Media & Sponsorship and Artist Nation Management. For additional information, visit investors.livenationentertainment.com.

Follow us @twitter.com/LiveNationInc






LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------

2014 2013 2014 2013
---- ---- ---- ----

(in thousands except share and per share data)

Revenue $2,502,008 $2,262,236 $5,295,109 $4,865,447

Operating expenses:

Direct operating expenses 1,876,519 1,698,731 3,792,366 3,485,583

Selling, general and
administrative expenses 349,676 325,005 978,006 900,246

Depreciation and amortization 97,925 92,729 256,732 257,582

Gain on disposal of operating
assets (1,696) (9,060) (4,977) (42,856)

Corporate expenses 26,647 26,442 73,538 68,909

Acquisition transaction
expenses 2,333 2,352 5,462 5,329
----- ----- ----- -----

Operating income 150,604 126,037 193,982 190,654

Interest expense 28,113 29,393 80,195 87,585

Loss on extinguishment of debt 233 36,269 233 36,269

Interest income (864) (1,547) (2,676) (4,205)

Equity in losses (earnings) of
nonconsolidated affiliates (2,155) 2,363 (5,921) (2,848)

Other expense (income), net 12,587 (5,269) 11,081 2,237
------ ------ ------ -----

Income before income taxes 112,690 64,828 111,070 71,616

Income tax expense (benefit) (3,137) 14,410 (482) 26,370
------ ------ ---- ------

Net income 115,827 50,418 111,552 45,246

Net income attributable to
noncontrolling interests 10,664 6,644 15,903 6,581
------ ----- ------ -----

Net income attributable to
common stockholders of Live
Nation Entertainment, Inc. $105,163 $43,774 $95,649 $38,665
======== ======= ======= =======


Basic net income per common
share attributable to common
stockholders of Live Nation
Entertainment, Inc. $0.52 $0.22 $0.46 $0.20
===== ===== ===== =====

Diluted net income per common
share attributable to common
stockholders of Live Nation
Entertainment, Inc. $0.49 $0.22 $0.45 $0.19
===== ===== ===== =====


Weighted average common shares outstanding:

Basic 199,261,810 196,396,704 198,612,221 192,792,286

Diluted 221,581,583 202,109,783 206,233,574 197,266,289







LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)


September 30, December 31,
2014 2013
---- ----

(in thousands)

ASSETS

Current assets

Cash and cash equivalents $1,358,300 $1,299,184

Accounts receivable, less allowance of
$17,385 and $19,850, respectively 607,150 439,151

Prepaid expenses 484,603 378,342

Other current assets 47,882 43,427
------ ------

Total current assets 2,497,935 2,160,104

Property, plant and equipment

Land, buildings and improvements 811,059 816,931

Computer equipment and capitalized
software 430,443 421,846

Furniture and other equipment 208,679 210,866

Construction in progress 80,210 52,883
------ ------

1,530,391 1,502,526

Less accumulated depreciation 834,450 795,726
------- -------

695,941 706,800

Intangible assets

Definite-lived intangible assets, net 619,671 676,564

Indefinite-lived intangible assets 369,640 376,736

Goodwill 1,484,677 1,466,983

Other long-term assets 379,867 296,334
------- -------

Total assets $6,047,731 $5,683,521
========== ==========

LIABILITIES AND EQUITY

Current liabilities

Accounts payable, client accounts $646,814 $656,253

Accounts payable 96,104 111,320

Accrued expenses 763,800 668,799

Deferred revenue 399,534 486,433

Current portion of long-term debt 47,947 278,403

Other current liabilities 37,734 54,310
------ ------

Total current liabilities 1,991,933 2,255,518

Long-term debt, net 2,027,209 1,530,484

Long-term deferred income taxes 165,224 161,637

Other long-term liabilities 107,684 85,035

Commitments and contingent liabilities

Redeemable noncontrolling interests 74,436 61,041

Stockholders' equity

Common stock 1,998 1,978

Additional paid-in capital 2,403,316 2,368,281

Accumulated deficit (856,147) (951,796)

Cost of shares held in treasury (6,865) (6,865)

Accumulated other comprehensive income
(loss) (37,577) (2,370)
------- ------

Total Live Nation Entertainment, Inc.
stockholders' equity 1,504,725 1,409,228

Noncontrolling interests 176,520 180,578
------- -------

Total equity 1,681,245 1,589,806
--------- ---------

Total liabilities and equity $6,047,731 $5,683,521
========== ==========




LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


Nine Months Ended
September 30,
-------------

2014 2013
---- ----

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $111,552 $45,246

Reconciling items:

Depreciation 93,140 90,443

Amortization 163,592 167,139

Deferred income tax benefit (21,463) (8,230)

Amortization of debt issuance costs and
discount/premium, net 13,375 15,409

Loss on extinguishment of debt 233 36,269

Non-cash compensation expense 31,531 23,224

Gain on disposal of operating assets (4,977) (42,856)

Equity in earnings of nonconsolidated
affiliates (5,921) (2,848)

Other, net (2,679) 221

Changes in operating assets and liabilities, net of
effects of acquisitions and dispositions:

Increase in accounts receivable (193,705) (106,561)

Increase in prepaid expenses (125,525) (50,432)

Increase in other assets (105,228) (94,421)

Increase in accounts payable, accrued
expenses and other liabilities 108,716 237,718

Decrease in deferred revenue (76,473) (45,783)
------- -------

Net cash provided by (used in)
operating activities (13,832) 264,538
------- -------

CASH FLOWS FROM INVESTING ACTIVITIES

Distributions from nonconsolidated
affiliates 7,303 13,104

Investments made in nonconsolidated
affiliates (11,324) (7,505)

Purchases of property, plant and
equipment (98,248) (103,577)

Proceeds from disposal of operating
assets, net of cash divested 2,058 83,086

Cash paid for acquisitions, net of cash
acquired (48,527) (26,418)

Purchases of intangible assets (2,675) (17)

Other, net (8,279) (1,163)


Net cash used in investing activities (159,692) (42,490)
-------- -------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net of
debt issuance costs 515,258 870,324

Payments on long-term debt, including
redemption costs (245,014) (854,277)

Contributions from noncontrolling
interests 81 267

Distributions to noncontrolling
interests (23,964) (12,382)

Purchases and sales of noncontrolling
interests, net (3,528) (75)

Proceeds from exercise of stock options 14,142 80,593

Payments for deferred and contingent
consideration (5,722) (750)

Net cash provided by financing
activities 251,253 83,700
------- ------

Effect of exchange rate changes on cash
and cash equivalents (18,613) (4,225)
------- ------

Net increase in cash and cash
equivalents 59,116 301,523

Cash and cash equivalents at beginning
of period 1,299,184 1,001,055
--------- ---------

Cash and cash equivalents at end of
period $1,358,300 $1,302,578
========== ==========
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 company's anticipated revenue, adjusted operating income, and free cash flow growth in 2014 as compared to 2013; the company's prospects for delivering its three-year strategic plan for 2015 and for longer term growth; the overall outlook for the live business, as well as the company's prospects for driving increased economics in its business model, with higher profits per show, more advertising and improved ticket conversion; expected growth in the company's festival portfolio and anticipated festival attendance for 2014; the company's potential to further monetize its concerts platform through additional content creation; the company's growth opportunities in its sponsorship and advertising business; and the company's anticipated resale ticketing gross transaction value from September 2013 through the end of 2014. 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 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 and acquisition-related severance), depreciation and amortization (including goodwill impairment), loss (gain) on disposal of operating assets and non-cash and certain stock-based compensation expense. 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 AOI less maintenance capital expenditures, less net cash interest expense, less cash taxes, less net distributions to noncontrolling 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 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 fund revenue generating capital 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)





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


($ in millions) Adjusted Non-cash and Loss (gain) on Acquisition Operating income
operating stock-based disposal of expenses (loss)
income (loss) compensation operating
expense assets

Depreciation and

amortization


Three Months Ended September 30, 2014
-------------------------------------


Concerts $82.8 $1.7 $(0.1) $30.2 $1.1 $49.9

Ticketing 85.8 0.7 (1.6) 55.5 0.7 30.5

Artist Nation 21.9 2.1 - 10.5 0.2 9.1

Sponsorship & Advertising 88.3 0.3 - 1.3 - 86.7

Other and Eliminations 1.8 - - (0.2) - 2.0

Corporate (22.5) 4.2 - 0.6 0.3 (27.6)
----- --- --- --- --- -----

Total Live Nation $258.1 $9.0 $(1.7) $97.9 $2.3 $150.6
====== ==== ===== ===== ==== ======


Three Months Ended September 30, 2013
-------------------------------------


Concerts $70.7 $1.6 $(9.1) $32.8 $0.8 $44.6

Ticketing 80.3 2.9 - 49.2 0.2 28.0

Artist Nation 12.7 0.2 - 10.7 - 1.8

Sponsorship & Advertising 83.3 0.2 - (0.1) - 83.2

Other and Eliminations (3.5) 0.1 - (0.5) - (3.1)

Corporate (22.3) 4.2 - 0.6 1.4 (28.5)
----- --- --- --- --- -----

Total Live Nation $221.2 $9.2 $(9.1) $92.7 $2.4 $126.0
====== ==== ===== ===== ==== ======


Nine Months Ended September 30, 2014
------------------------------------


Concerts $117.3 $5.5 $(3.3) $84.9 $1.9 $28.3

Ticketing 232.4 3.5 (1.7) 142.5 0.8 87.3

Artist Nation 30.2 7.8 - 25.9 0.4 (3.9)

Sponsorship & Advertising 163.1 1.1 - 3.2 - 158.8

Other and Eliminations (0.3) 0.1 - (1.6) - 1.2

Corporate (60.0) 13.5 - 1.8 2.4 (77.7)
----- ---- --- --- --- -----

Total Live Nation $482.7 $31.5 $(5.0) $256.7 $5.5 $194.0
====== ===== ===== ====== ==== ======


Nine Months Ended September 30, 2013
------------------------------------


Concerts $100.2 $4.1 $(43.6) $96.6 $1.3 $41.8

Ticketing 217.4 6.1 - 128.6 0.2 82.5

Artist Nation 20.1 0.4 0.7 30.9 0.1 (12.0)

Sponsorship & Advertising 154.3 0.6 - 0.7 - 153.0

Other and Eliminations (1.2) - - (1.3) - 0.1

Corporate (56.9) 12.0 - 2.1 3.7 (74.7)
----- ---- --- --- --- -----

Total Live Nation $433.9 $23.2 $(42.9) $257.6 $5.3 $190.7
====== ===== ====== ====== ==== ======




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


($ in millions) Q3 2014 Q3 2013
------- -------

Adjusted operating income $258.1 $221.2

Less: Cash interest expense -
net (30.3) (28.3)

Cash taxes (9.2) (9.9)

Maintenance capital
expenditures (14.2) (11.7)

Distributions to noncontrolling
interests -net (5.9) (10.4)

Distributions from
(contributions to) investments
in nonconsolidated affiliates (0.5) 5.9
---- ---

Free cash flow $198.0 $166.8

Revenue generating capital
expenditures (14.0) (13.1)
----- -----

Net $184.0 $153.7
--- ------ ------


($ in millions) 9 months 2014 9 months 2013
------------- -------------

Adjusted operating income $482.7 $433.9

Less: Cash interest expense -
net (66.1) (72.8)

Cash taxes (38.3) (32.8)

Maintenance capital
expenditures (46.5) (38.5)

Distributions to noncontrolling
interests -net (23.9) (12.3)

Distributions from
(contributions to) investments
in nonconsolidated affiliates (0.2) 5.6
---- ---

Free cash flow $307.7 $283.1

Revenue generating capital
expenditures (42.6) (41.6)
----- -----

Net $265.1 $241.5
--- ------ ------




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


($ in millions) September 30,
2014
----

Cash and cash equivalents $1,358.3

Client cash (531.7)

Deferred revenue - event-
related (318.7)

Accrued artist fees (62.5)

Collections on behalf of
others (46.4)

Prepaid expenses - event-
related 241.2
-----

Free cash $640.2
--------- ------
Photo - http://photos.prnewswire.com/prnh/20141030/155616

Photo - http://photos.prnewswire.com/prnh/20141030/155618

SOURCE Live Nation Entertainment, Inc.

Photo:http://photos.prnewswire.com/prnh/20141030/155616
http://photoarchive.ap.org/
Photo:http://photos.prnewswire.com/prnh/20141030/155618
http://photoarchive.ap.org/
Photo:http://photos.prnewswire.com/prnh/20100603/LA14899LOGO
http://photoarchive.ap.org/
Live Nation Entertainment, Inc.

CONTACT: Maili Bergman, (310) 867-7000, IR@livenation.com

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


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