Ticketmaster Entertainment, Inc. Reports Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091109006401/en

WEST HOLLYWOOD, Calif.--(Business Wire)--
Ticketmaster Entertainment, Inc. ("Ticketmaster Entertainment" or the "Company")
(NASDAQ: TKTM), the world's leading live entertainment ticketing and artist
services company, today announced financial results for its third quarter ended
September 30, 2009. Revenues for the third quarter were $348.5 million, 3%
higher than the prior-year quarter. Ticketing revenues for the third quarter
were $292.1 million, down 14% versus the prior-year quarter. Adjusted EBITDA was
$59.8 million for the third quarter ended September 30, 2009 compared to $57.3
million for the third quarter ended September 30, 2008. The increase in Adjusted
EBITDA was primarily a result of the Front Line acquisition. Excluding Front
Line, Adjusted EBITDA was $40.2 million. Adjusted net income attributable to
Ticketmaster Entertainment, Inc. was $17.2 million and Adjusted earnings per
share was $0.29.

"We are starting to build momentum in our efforts to transform the live
entertainment business for fans, performers and our venue customers," said
Irving Azoff, Ticketmaster Entertainment CEO. "Paperless ticketing has been
received enthusiastically, it`s working well and a growing number of accounts
are embracing the technology. We`re rolling out a number of initiatives that
enhance the fan experience, both online and at the shows, and that in the future
will greatly improve the transparency of ticket pricing. In the meantime, we`re
also generating pretty good financial results in a very tough economic
environment, and we`re excited about the growing slate of concert tours in the
planning stages for 2010."

Financial and Operating Metrics Summary

Three Months Ended September 30,
2009 2008 % Change
(In millions, except per share data)
Revenue $ 348.5 $ 339.2 3 %
Gross profit 142.9 122.5 17 %
Adjusted EBITDA (1) 59.8 57.3 4 %
Operating income 21.2 26.9 (21 %)
Net income attributable to Ticketmaster Entertainment, Inc. $ 13.1 $ 9.6 36 %
Diluted earnings per share $ 0.22 $ 0.17 29 %
Adjusted net income attributable to Ticketmaster Entertainment, Inc. (1) $ 17.2 $ 9.6 79 %
Adjusted earnings per share (1) $ 0.29 $ 0.17 71 %

Free Cash Flow (1) $ (5.0 ) $ 54.2 NM

Operating Metrics (2)
Number of tickets sold 29.0 32.9 (12 %)
Gross value of tickets sold $ 1,707.7 $ 2,058.2 (17 %)

(1) Adjusted EBITDA, Free Cash Flow, Adjusted net income attributable to
Ticketmaster Entertainment, Inc. and Adjusted earnings per share are
supplemental financial measures. Please see reconciliations of these
supplemental financial measures at the end of this release.

(2) The number and gross value of tickets sold are inclusive of primary and
secondary tickets.

Quarterly Business Highlights

* Throughout the quarter, paperless ticketing was used for Bruce Springsteen and
Nine Inch Nails concerts to help ensure fans have secure and convenient access
to event tickets at the original sale price. Additionally, Penn State University
football`s entire student section at Beaver Stadium began using Ticketmaster`s
paperless ticketing system since the start of the 2009 season.
* In July, Priceline was named the Official Travel Partner of Ticketmaster.com
through the strategic `Beyond the Ticket` brand sponsor initiative. The new
alliance allows fans using Ticketmaster.com to gain access to priceline.com`s
suite of travel services, including specially tailored hotel, airline, and
rental car offers to accompany their live event ticket purchases.
* The London Organising Committee of the Olympic Games and Paralympic Games
(LOCOG) appointed Ticketmaster as the Official Ticketing Services Provider for
the London 2012 Olympic and Paralympic Games. Ticketmaster will work with LOCOG
on its ongoing ticketing strategy and planning before assisting in the set-up
and execution of the ticket sales process. More than nine million total tickets
are expected to be available to the public for the Olympic Games and Paralympic
Games.
* In August, Roger Ames, a music industry veteran, was appointed Chief Executive
Officer of Ticketmaster International. In his role, he oversees Ticketmaster`s
operations in 16 global markets outside of the United States. He is based in
Ticketmaster`s London office.

Results of Operations

Three Months Ended September 30,
2009 2008 % Change
(Dollars in thousands)
Revenue:
Ticketing (1) $ 292,138 $ 339,201 (14 %)
Artist Services (1) 56,388 - NM
Total Revenue $ 348,526 $ 339,201 3 %
Adjusted EBITDA:
Ticketing (1) $ 62,732 $ 75,626 (17 %)
Artist Services (1) 19,588 - NM
Corporate and Unallocated Expenses (22,520 ) (18,336 ) 23 %
Total Adjusted EBITDA $ 59,800 $ 57,290 4 %

(1) After the October 29, 2008 acquisition of a controlling interest in Front
Line, based upon changes in the internal management structure and how the chief
operating decision maker views the business, the Company began reporting two
segments: Ticketing and Artist Services. Prior to the acquisition date, the
Company`s non-controlling investment in Front Line was accounted for using the
equity method of accounting.

Significant Items Affecting EPS

Net income attributable to Ticketmaster Entertainment, Inc. for the three months
ended September 30, 2009 was impacted by a discrete item. The Company incurred
$4.1 million, net of tax, of legal and professional fees in connection with the
pending merger with Live Nation for the three months ended September 30, 2009.
This discrete item negatively impacted diluted earnings per share by
approximately $0.07 for the three months ended September 30, 2009.

Quarterly Results

Primary Ticketing Volume Trends by Category

Three Months Ended September 30, 2009
Global Tickets Ticket Mix %
% Change to PY % Total Tickets
Concerts (20 %) 47 %
Sports 3 % 22 %
Arts & Theatre (6 %) 18 %
Family (10 %) 9 %
Other (1) (5 %) 4 %
Total (12 %) 100 %

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

Third Quarter Results

Ticketing:

Revenue

The Company posted third quarter revenue of $292.1 million, down 14% from the
prior-year quarter, due to a 12% decrease in the number of tickets sold and a 4%
decrease in average revenue per ticket. Excluding the effect of changes in
foreign currency exchange rates, revenues were $301.6 million, down 11% over the
prior-year period. Ticketing volumes were lower across all major categories
except Sports, with the largest impact in the Concerts category due primarily to
the expiration on December 31, 2008 of the principal ticketing agreement with
Live Nation and fewer large events.

Domestic revenues were $203.0 million, down 13% compared to the prior-year
quarter. There was a 14% decrease in the number of tickets sold and a 2%
decrease in average revenue per ticket compared to the prior-year quarter. The
Concerts category had the largest volume decline due to the expiration of the
principal ticketing agreement with Live Nation and fewer large events versus the
prior-year quarter. Excluding the impact of Live Nation, domestic revenues
decreased 1% versus the prior-year quarter. Sports volumes were higher versus
the prior-year quarter due to increased sales in soccer, professional football,
and professional basketball events. In addition to the decline in ticketing
volume and the decrease in the average revenue per ticket, the revenue from
resale ticketing declined 24% versus the prior-year quarter.

International revenues were $89.1 million, down 16% compared to the prior-year
quarter. Number of tickets sold was down 10%, driven primarily by a decline in
the Concert category. Average revenue per ticket was down 8% due largely to the
continued volatility of foreign exchange rates. Excluding the effect of changes
in foreign exchange rates, international revenues were $98.6 million, down 7%
over the prior-year quarter, primarily due to sales declines in Canada, the
Netherlands and Australia, partially offset by higher revenue in the United
Kingdom, Sweden and Norway.

Adjusted EBITDA

Adjusted EBITDA was $62.7 million, down 17% from the prior-year quarter, due
primarily to a 2.5 million ticket volume shortfall attributable to the
expiration of the principal ticketing agreement with Live Nation. Excluding the
impact of Live Nation and the effect of changes in foreign currency exchange
rates, the decline in ticketing volume accounted for approximately $3.8 million
of lower profitability.

Artist Services:

On October 29, 2008, the Company acquired additional equity interests in Front
Line, giving Ticketmaster Entertainment a controlling interest in Front Line.
The Company has consolidated the results of Front Line since the acquisition
date and has entered into the artist services business by virtue of the
acquisition. Prior to the acquisition date, Ticketmaster Entertainment accounted
for its investment in Front Line under the equity method of accounting. The
artist services business focuses on artist management, merchandising, VIP
ticketing and related artist marketing services activities.

Revenue

Front Line`s third quarter revenue of $56.4 million was down 16% from Front
Line`s unconsolidated stand-alone revenue of $67.3 million in the prior-year
quarter due to touring delays and softness in the merchandise environment.

Adjusted EBITDA

Front Line contributed $19.6 million to Adjusted EBITDA in the third quarter of
2009 compared to the unconsolidated stand-alone Adjusted EBITDA of $24.7 million
in the prior-year quarter. Adjusted EBITDA was down 21% from the prior-year
quarter due primarily to a decline in touring and merchandising revenue.

Corporate and Unallocated Expenses

Corporate and Unallocated Expenses primarily include compensation and other
employee costs (including stock-based compensation), outside services, and
professional and legal fees. Corporate and Unallocated Expenses increased $4.2
million, or 23%, over the prior-year quarter primarily due to the Merger-related
costs of $6.9 million, which was partially offset by lower costs for other
professional services. For the nine months ended September 30, 2009, the Company
has incurred Merger-related costs of $21.3 million.

Amortization of Intangibles and Depreciation Expense

Intangible amortization and depreciation expense for three months ended
September 30, 2009 increased $9.4 million and $1.0 million from 2008 primarily
due to incremental expense from the impact of acquisitions not included in the
prior-year period and additional equipment and internally developed software put
into service in the current year.

Interest Income

Interest income for the three months ended September 30, 2009 decreased $4.1
million from 2008 primarily due to the extinguishment of intercompany
receivables from IAC upon the consummation of the spin-off and lower average
interest rates.

Interest Expense

Interest expense for the three months ended September 30, 2009 increased $4.3
million from the prior-year period. The increase was primarily due to a full
quarter of interest expense and amortization of debt issuance costs on the
Company`s Senior Notes and Senior Secured Credit Facilities in the current
quarter as compared to a partial quarter of expense in the prior-year quarter as
the Senior Notes and Senior Credit Facilities were issued in July 2008. This
increase in interest expense was partially offset by lower interest related to
capital leases, which has declined as the Company has reduced the number of
outstanding capital leases.

Income Taxes

For the three months ended September 30, 2009 and 2008, Ticketmaster
Entertainment recorded a tax provision of $2.2 million and $13.3 million,
respectively, which represent effective tax rates of 19% and 58%, respectively.
The 2009 tax rate is lower than the federal statutory rate of 35% due
principally to foreign income taxed at lower rates including the effects of the
Company`s international restructuring and net adjustments related to the
reconciliation of provision accruals to tax returns, partially offset by losses
in foreign jurisdictions for which no tax benefit is recognized and partnership
flow-through losses attributable to noncontrolling interests. The 2008 tax rate
is higher than the federal statutory rate of 35% due principally to state and
local income taxes, net adjustments related to the reconciliation of provision
accruals to tax returns, and losses not benefited in foreign jurisdictions,
partially offset by foreign income taxed at lower rates.

Balance Sheet and Free Cash Flow

The September 30, 2009 balance sheet reflects $595.1 million of cash and cash
equivalents, including $381.9 million in funds collected on behalf of our
clients. As of September 30, 2009, total long-term debt was $837.0 million,
consisting of $287.0 million of 10.75% Senior Notes due in 2016, a $100.0
million Term Loan A with a maturity in 2013 and a $350.0 million Term Loan B
with a maturity in 2014. Ticketmaster Entertainment also maintains a $200.0
million secured revolving credit facility with a maturity in 2013, of which
$100.0 million was drawn down as of September 30, 2009. As of September 30,
2009, the Company was in compliance with all maintenance-based financial
covenants.

Free Cash Flow in the third quarter of 2009 was $(5.0) million, compared to
$54.2 million of Free Cash Flow in the third quarter of 2008. The decrease in
Free Cash Flow was driven primarily by an increase in interest expense paid due
to the semiannual interest payment on the Senior Notes in the third quarter of
2009 which was not paid in the prior-year period, an increase in contract
deposit payments, and unfavorable changes in working capital. These decreases in
free cash flow were partially offset by contributions from Front Line and lower
income tax payments.

Ticketmaster Entertainment`s management will host a conference call today at
1:30 PT (4:30 ET) to discuss the Company`s financial results. A live webcast of
the call will be accessible on the Investor Relations section of Ticketmaster
Entertainment`s website at http://investors.ticketmaster.com

About Ticketmaster Entertainment, Inc.

Ticketmaster Entertainment consists of Ticketmaster and Front Line. As the
world`s leading live entertainment ticketing and marketing company, Ticketmaster
connects the world to live entertainment. Ticketmaster operates in 20 global
markets, providing ticket sales, ticket resale services, marketing and
distribution through www.ticketmaster.com, one of the largest e-commerce sites
on the Internet; approximately 7,100 retail outlets; and 17 worldwide call
centers. Established in 1976, Ticketmaster serves more than 10,000 clients
worldwide across multiple event categories, providing exclusive ticketing
services for leading arenas, stadiums, professional sports franchises and
leagues, college sports teams, performing arts venues, museums, and theaters. In
2008, the Company sold more than 141 million tickets valued at over $8.9 billion
on behalf of its clients. Ticketmaster Entertainment acquired a controlling
interest in Front Line in October 2008. Founded by Irving Azoff and Howard
Kaufman in 2004, Front Line is the world`s leading artist management company.
Ticketmaster Entertainment, Inc. is headquartered in West Hollywood, California
(NASDAQ:TKTM).

This news release may contain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended. These
forward-looking statements include statements relating to the Company`s
anticipated financial performance, business prospects, new developments and
similar matters, and/or statements that use words such as "anticipates",
"estimates", "expects", "intends", "plans", "believes" and similar expressions.
As such forward-looking statements are not guarantees of future performance or
results and involve risks and uncertainties that may cause actual performance or
results to differ materially from those in the forward-looking statements,
including those risks and uncertainties related to the Company`s pending merger
with Live Nation; the Company`s ability to operate effectively as a public
company following its recent spin-off from IAC; changes in economic conditions
generally or in the live entertainment industry; the ability of the Company to
retain existing clients and obtain new clients; Ticketmaster`s ability to
maintain Ticketmaster`s brand recognition and attract and retain customers in a
cost-effective manner; integration of historical and future acquisitions,
including the Front Line acquisition; the Company`s ability to expand
successfully in international markets; changing customer requirements and
industry standards; regulatory changes; and the other risks detailed from time
to time in the Company`s SEC reports, including the most recent reports on Forms
10-K, 10-Q and 8-K, each as it may be amended from time to time. The Company
assumes no obligation to update these forward-looking statements in order to
reflect events or circumstances that may arise after the date of this release,
except as required by law.

TICKETMASTER ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
(In thousands, except per share data)
Revenue $ 347,891 $ 336,350 $ 1,075,133 $ 1,060,112
Interest on funds held for clients 635 2,851 2,265 10,439
Total revenue 348,526 339,201 1,077,398 1,070,551
Cost of sales (exclusive of depreciation shown separately below) 205,589 216,693 658,956 686,264
Gross profit 142,937 122,508 418,442 384,287
Selling and marketing expense 23,986 26,535 67,871 70,564
General and administrative expense 65,982 47,633 194,886 135,130
Amortization of intangibles 17,627 8,268 53,542 28,671
Depreciation 14,171 13,217 40,650 36,100
Operating income 21,171 26,855 61,493 113,822
Other expense, net:
Interest income 546 4,685 1,914 11,438
Interest expense (15,243 ) (10,909 ) (48,818 ) (20,545 )
Equity in income of unconsolidated affiliates 700 2,850 2,588 2,048
Other income (expense) 4,290 (413 ) 7,829 244
Total other expense, net (9,707 ) (3,787 ) (36,487 ) (6,815 )
Earnings before income taxes and noncontrolling interests 11,464 23,068 25,006 107,007
Income tax provision (2,193 ) (13,335 ) (7,914 ) (43,010 )
Net income 9,271 9,733 17,092 63,997
Loss (income) attributable to noncontrolling interests, net 3,822 (118 ) 10,127 1,337
Net income attributable to Ticketmaster Entertainment, Inc. $ 13,093 $ 9,615 $ 27,219 $ 65,334
Net earnings per share available to common stockholders:
Basic $ 0.23 $ 0.17 $ 0.47 $ 1.16
Diluted $ 0.22 $ 0.17 $ 0.46 $ 1.16
Weighted average number of shares of common and common equivalent stock outstanding:
Basic 57,358 56,183 57,339 56,175
Diluted 59,868 56,382 59,517 56,241

TICKETMASTER ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS

September 30, 2009 December 31, 2008
(Unaudited)
(In thousands, except per share data)
ASSETS
Cash and cash equivalents $ 595,058 $ 464,618
Marketable securities - 1,495
Accounts receivable, client accounts 82,740 70,121
Accounts receivable, trade, net of allowance of $7,113 and $3,662, respectively 63,185 46,459
Deferred income taxes 14,236 14,038
Contract advances 52,995 44,927
Prepaid expenses and other current assets 36,913 37,758
Total current assets 845,127 679,416
Property and equipment, net 109,445 111,291
Goodwill 475,173 455,751
Intangible assets, net 303,960 330,061
Long-term investments 8,525 17,487
Other non-current assets 121,923 112,561
TOTAL ASSETS $ 1,864,153 $ 1,706,567
LIABILITIES, TEMPORARY EQUITY AND EQUITY
LIABILITIES:
Accounts payable, client accounts $ 464,652 $ 324,164
Accounts payable, trade 31,293 29,251
Accrued compensation and benefits 45,726 39,683
Deferred revenue 35,050 33,244
Income taxes payable 5,033 7,522
Other accrued expenses and current liabilities 78,136 82,435
Total current liabilities 659,890 516,299
Long-term debt 836,980 865,000
Income taxes payable 5,556 1,680
Other long-term liabilities 18,996 10,286
Deferred income taxes 51,199 67,300

Commitments and contingencies

TEMPORARY EQUITY:
Series A convertible redeemable preferred stock, $0.01 par value, 25,000 shares authorized, 1,750 non-vested shares issued and outstanding at September 30, 2009 and December 31, 2008 14,570 9,888
Redeemable noncontrolling interests 48,827 42,483
EQUITY:
Ticketmaster Entertainment, Inc. stockholders` equity:
Common stock, $0.01 par value, 300,000 shares authorized; 57,380 shares issued and outstanding at September 30, 2009 and 57,213 shares issued and outstanding at December 31, 2008 574 572
Additional paid-in capital 1,227,387 1,235,019
Accumulated deficit (1,031,539 ) (1,058,758 )
Accumulated other comprehensive income (loss) 8,228 (11,374 )
Total Ticketmaster Entertainment, Inc. stockholders` equity 204,650 165,459
Noncontrolling interests 23,485 28,172
Total equity 228,135 193,631
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY $ 1,864,153 $ 1,706,567

TICKETMASTER ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended September 30,
2009 2008
(In thousands)
Cash flows from operating activities:
Net income. $ 17,092 $ 63,997
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangibles 53,542 28,671
Depreciation 40,650 36,100
Amortization of debt issuance costs 3,355 570
Provision for doubtful accounts 2,943 4,729
Stock-based compensation expense 19,433 20,343
Deferred income taxes (16,404 ) 4,950
Investment losses 905 -
Gain on extinguishment of debt (1,527 ) -
Equity in income of unconsolidated affiliates, net of dividends 1,419 1,441
Changes in current assets and liabilities, excluding acquisition effects:
Accounts receivable (2,018 ) (4,049 )
Prepaid expenses and other current assets (11,419 ) (11,644 )
Accounts payable and other current liabilities (17,851 ) (6,742 )
Income taxes payable (3,539 ) 13,494
Deferred revenue 1 3,235
Funds collected on behalf of clients, net 103,088 45,269
Other, net 158 427
Net cash provided by operating activities 189,828 200,791
Cash flows from investing activities:
Transfers to IAC - (910,088 )
Cash paid for acquisitions, net of cash acquired (25,636 ) (405,498 )
Purchases of property and equipment (36,014 ) (37,014 )
Purchase of marketable securities - (4,176 )
Proceeds from sales and maturities of marketable securities 1,497 -
Cash paid for long-term investments (1,226 ) (356 )
Net cash used in investing activities (61,379 ) (1,357,132 )
Cash flows from financing activities:
Capital contributions from IAC - 405,498
Proceeds from issuance of long-term debt - 300,000
Proceeds from bank borrowings - 465,000
Principal payments on long-term obligations (28,009 ) (1,500 )
Payment of deferred financing costs - (27,207 )
Purchase of noncontrolling interest - (764 )
Distributions to noncontrolling interests (6,312 ) -
Excess tax benefits from equity awards - 55
Other, net (370 ) -
Net cash (used in) provided by financing activities (34,691 ) 1,141,082
Effect of exchange rate changes on cash and cash equivalents 36,682 (6,152 )
Net increase (decrease) in cash and cash equivalents 130,440 (21,411 )
Cash and cash equivalents at beginning of period 464,618 568,417
Cash and cash equivalents at end of period $ 595,058 $ 547,006

RECONCILIATION OF SUPPLEMENTAL MEASURE TO GAAP MEASURES

The following table reconciles Adjusted EBITDA to Net income attributable to Ticketmaster Entertainment, Inc. (in thousands):

Three Months Ended
September 30,
2009 2008
Adjusted EBITDA $ 59,800 $ 57,290
Non-cash and stock-based compensation expense (6,831 ) (8,950 )
Amortization of intangibles (17,627 ) (8,268 )
Depreciation expense (14,171 ) (13,217 )
Operating income 21,171 26,855
Other expense, net (9,707 ) (3,787 )
Earnings before income taxes and noncontrolling interests 11,464 23,068
Income tax provision (2,193 ) (13,335 )
Net income 9,271 9,733
Loss (income) attributable to noncontrolling interests, net 3,822 (118 )
Net income attributable to Ticketmaster Entertainment, Inc. $ 13,093 $ 9,615

Non-cash and stock-based compensation expense in the table above is included in the following line items in the accompanying consolidated statements of operations for the three months ended September 30, 2009 and 2008 (in thousands):

Three Months Ended
September 30,
2009 2008
Non-cash and stock-based compensation expense included in:
Cost of sales $ 99 $ 548
Selling and marketing expense 108 595
General and administrative expense 6,624 7,807
Non-cash and stock-based compensation expense $ 6,831 $ 8,950

The following table reconciles Free Cash Flow to net cash provided by operating activities (in thousands):

Three Months Ended
September 30,
2009 2008 (1)
Free Cash Flow $ (4,989 ) $ 54,241
Funds collected on behalf of clients, net (1,086 ) 2,739
Capital expenditures 12,210 13,774
Net cash provided by operating activities $ 6,135 $ 70,754

(1) During the three months ended September 30, 2008, the Company refined its estimate of income taxes due to IAC in connection with pre-spin-off taxable income. We have reduced Free Cash Flow and Net cash provided by operating activities in the above table by $21.3 million to exclude the impact of this item.

The following table reconciles Adjusted net income attributable to Ticketmaster Entertainment, Inc. to Net income attributable to Ticketmaster Entertainment, Inc. and presents Adjusted earnings per share (in thousands except for per share amounts):

Three Months Ended
September 30,
2009 2008
Net income attributable to Ticketmaster Entertainment, Inc. $ 13,093 $ 9,615
Professional and legal fees in connection with Live Nation merger, net of tax 4,114 -
Adjusted net income attributable to Ticketmaster Entertainment, Inc. $ 17,207 $ 9,615

Adjusted earnings per share $ 0.29 $ 0.17

Diluted weighted average shares outstanding 59,868 56,382

TICKETMASTER ENTERTAINMENT`S PRINCIPLES OF FINANCIAL REPORTING

Ticketmaster Entertainment reports Adjusted EBITDA as a supplemental measure to
generally accepted accounting principles ("GAAP"). This measure is one of the
primary metrics by which Ticketmaster Entertainment evaluates the performance of
its businesses, on which its internal budgets are based and by which management
is compensated. Ticketmaster Entertainment believes that investors should have
access to the same set of tools that it uses in analyzing its results. This
supplemental measure should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for or superior
to GAAP results. Ticketmaster Entertainment provides and encourages investors to
examine the reconciling adjustments between the GAAP measure and supplemental
measure which are discussed below.

Definitions of Ticketmaster Entertainment`s Supplemental Measures

Adjusted Earnings before Interest, Income Taxes, Depreciation and Amortization
("Adjusted EBITDA") is defined as operating income excluding, if applicable: (1)
depreciation expense (2) non-cash and stock-based compensation expense (3)
amortization and impairment of intangibles, (4) goodwill impairment, (5) pro
forma adjustments for significant acquisitions, fair value adjustments to
contingent consideration and compensation expense associated with significant
acquisitions or the Merger with Live Nation, and (6) one-time items.
Ticketmaster Entertainment believes this measure is useful to investors because
it represents the operating results from Ticketmaster Entertainment businesses
excluding the effects of any other non-cash expenses. The Adjusted EBITDA metric
was named Adjusted Operating Income in our Annual Report on Form 10-K, as
amended, for the year ended December 31, 2008. Adjusted EBITDA has certain
limitations in that it does not take into account the impact to Ticketmaster
Entertainment`s statement of operations of certain expenses, including
acquisition-related accounting. Ticketmaster Entertainment endeavors to
compensate for the limitations of the supplemental measure presented by also
providing the comparable GAAP measure with equal or greater prominence and
descriptions of the reconciling items, including quantifying such items, to
derive the supplemental measure.

Free Cash Flow is defined as net cash provided by operating activities less
funds collected on behalf of clients, net, and less capital expenditures. We
believe Free Cash Flow is useful to investors because it represents the cash
that our operating businesses generate, before taking into account cash
movements that are nonoperational. Free Cash Flow has certain limitations in
that it does not represent the total increase or decrease in the cash balance
for the period, nor does it represent the residual cash flow for discretionary
expenditures. For example, it does not take into account stock repurchases.
Therefore, we think it is important to evaluate Free Cash Flow along with our
consolidated statement of cash flows.

Adjusted net income attributable to Ticketmaster Entertainment, Inc. and
Adjusted earnings per share represent Net income attributable to Ticketmaster
Entertainment, Inc. and diluted earnings per share, excluding the impact of
discrete items impacting the comparability of quarterly financial results.

Pro Forma Results

Ticketmaster Entertainment will only present revenue or Adjusted EBITDA on a pro
forma basis if a particular transaction is significant within the meaning of
Rule 11-01 of Regulation S-X or if it views a transaction as so significant in
nature that disclosure of pro forma financial information would be material to
investors. For the periods presented in this report, there are no transactions
that Ticketmaster Entertainment has included on a pro forma basis.

One-Time Items

Adjusted EBITDA is presented before one-time items, if applicable. These items
are truly one-time in nature and non-recurring, infrequent or unusual, and have
not occurred in the past two years or are not expected to recur in the next two
years, in accordance with SEC rules. For the periods presented in this report,
there are no one-time items.

Non-Cash and Stock-based Expenses That Are Excluded From Ticketmaster
Entertainment`s Supplemental Measures

Non-cash and stock-based compensation expense consists principally of expense
associated with the grants, including unvested grants assumed in acquisitions,
of restricted stock, restricted stock units and stock options. These expenses
are not paid in cash, and Ticketmaster Entertainment will include the related
shares in its future calculations of fully diluted shares outstanding. For the
majority of the awards, upon vesting of restricted stock and restricted stock
units and the exercise of certain stock options, the awards will be settled, at
Ticketmaster Entertainment`s discretion, on a net basis, with Ticketmaster
Entertainment remitting the required tax withholding amount from its current
funds. For certain stock-based awards which are classified as liabilities, upon
vesting of the awards, the awards will be redeemed in cash at the then fair
value of the stock awards.

Amortization of intangibles is a non-cash expense relating primarily to
acquisitions. At the time of an acquisition, the intangible assets of the
acquired company, such as purchase and distribution agreements, are valued and
amortized over their estimated lives. While it is likely that Ticketmaster
Entertainment will have significant intangible amortization expense as it
continues to acquire companies, Ticketmaster Entertainment believes that since
intangibles represent costs incurred by the acquired company to build value
prior to acquisition, they were part of transaction costs.

Media:
Ticketmaster Entertainment, Inc.
Hannah Kampf
+1-310-360-2434
media@ticketmaster.com
or
Investor Relations:
Brainered Communicators, Inc.
Mike Smargiassi
+1-310-360-2354
smarg@braincomm.com

Copyright Business Wire 2009