Live Nation Entertainment Reports Third Quarter 2011 Financial Results

Nov 03, 2011, 16:05 ET from Live Nation Entertainment

LOS ANGELES, Nov. 3, 2011 /PRNewswire/ -- Live Nation Entertainment (NYSE: LYV) released financial results for the three and nine months ended September 30, 2011 today.  

"I am delighted that we continue to deliver improved financial results and are well on track to drive strong growth in profitability for the year," said Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.  "Across our portfolio this year, we have delivered growth while also improving operating margins.  This is reflected in the healthy gains in free cash flow from our operations while investing in new products including festivals, re-platforming of Ticketmaster, social media and mobile apps."

"We believe the stabilization of consumer demand for live events will continue into 2012 and, looking ahead, we are increasingly optimistic about our opportunities," Rapino continued.  "Given the continued fan demand for concerts and a growing supply of artists hitting the road, we are optimistic about the future growth of the global concert industry. Based on this, we believe we are well positioned to generate improved returns from our business and deliver shareholder value."

The company will host a teleconference today, November 3, 2011 at 5:00 p.m. Eastern Daylight Time, which can be accessed by dialing 888-352-6793 (U.S.) or 719-457-2703 (Int'l) ten minutes prior to the start time and reference passcode 4625414. 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 10, 2011.

The financial results of operations for the first nine months of 2010 only include Ticketmaster results following the date of the merger (January 25) through September 30, 2010. (1)

FINANCIAL HIGHLIGHTS – 3rd QUARTER and NINE MONTHS

(Unaudited; $ in millions)

Q3 2011

Q3 2010

Growth

9 months

2011

9 months

2010

Growth

Revenue

Concerts

$ 1,280.3

$  1,380.5

(7.3%)

$  2,811.8

$    2,648.1

6.2%

Ticketing

287.1

261.2

9.9%

867.2

734.7

18.0%

Artist Nation

121.4

111.0

9.4%

293.9

269.2

9.2%

eCommerce

36.6

25.8

41.9%

103.4

62.8

64.6%

Sponsorship

72.7

69.5

4.6%

147.1

129.6

13.5%

Other & Eliminations

(8.1)

(12.2)

33.6%

(25.1)

(18.5)

(35.7%)

$ 1,790.0

$ 1,835.8

(2.5%)

$  4,198.3

$   3,825.9

9.7%

Adjusted Operating Income (Loss)

Concerts

$      83.7

$      61.9

35.2%

$     62.2

$       43.7

42.3%

Ticketing (3)

51.8

63.9

(18.9%)

204.3

175.1

16.7%

Artist Nation

20.0

21.8

(8.3%)

35.0

32.5

7.7%

eCommerce

14.1

13.5

4.4%

40.0

24.4

63.9%

Sponsorship

54.4

53.1

2.4%

98.0

88.1

11.2%

Other & Eliminations

(0.6)

**

(0.5)

(0.4)

(25.0%)

Corporate

(19.8)

(23.5)

15.7%

(51.8)

(57.4)

9.8%

$    203.6

$    190.7

6.8%

$     387.2

$     306.0

26.5%

Operating Income (Loss)

Concerts

$      49.2

$      30.4

61.8%

$     (29.3)

$      (40.4)

27.5%

Ticketing (3)

14.2

36.5

(61.1%)

97.3

78.4

24.1%

Artist Nation (2)

9.1

5.5

65.5%

(31.3)

(5.5)

**

eCommerce

11.4

11.1

2.7%

31.6

18.7

69.0%

Sponsorship

54.1

52.9

2.3%

97.3

87.5

11.2%

Other & Eliminations

(0.6)

0.6

**

(0.3)

1.3

**

Corporate

(25.6)

(29.1)

12.0%

(67.9)

(81.2)

16.4%

$     111.8

$    107.9

3.6%

$       97.4

$     58.8

65.6%

 Acquisition Expenses

$         7.0

$         4.8

$      12.4

$       36.4

$     104.8

$     103.1

$       85.0

$       22.4

                                  ** percentages are not meaningful

(1)

Reported results for the nine months ended September 30, 2010, include the results of the legacy Ticketmaster operations following the date of the merger through September 30. Results for the legacy Ticketmaster operations for the period January 1-January 25, 2010, or the stub period (which are not included in the reported results above), include $76.1 million in revenue, primarily in the Ticketing segment, and $5.0 million in adjusted operating income, of which $7.7 million was related to the Ticketing segment. Ticketmaster's operating income for the stub period was $14.8 million, including a $30.1 million gain on the sale of a subsidiary prior to the merger.

(2)

The Artist Nation segment's operating loss for the nine months ended September 30, 2011 is driven by $24.4 million of stock-related compensation expense due to the acquisition of the remaining equity of Front Line Management in February 2011.

(3)

The Ticketing segment's adjusted operating income and operating income for the three and nine months ended September 30, 2011 is impacted by $14.6 million of litigation-related expenses.

Free cash as of September 30, 2011 was $356.6 million. Free cash flow was $152.2 million for the third quarter of 2011 as compared to $145.2 million for the same period in 2010, and $223.5 million for the nine months of 2011 compared to $153.3 million for the same period in 2010.

About Live Nation Entertainment:

Live Nation Entertainment is the world's leading live entertainment and eCommerce company, comprised of four market leaders: Ticketmaster.com, Live Nation Concerts, Front Line Management Group and Live Nation Network. Ticketmaster.com is the global event ticketing leader and one of the world's top five eCommerce sites, with over 26 million monthly unique visitors. Live Nation Concerts produces over 20,000 shows annually for more than 2,000 artists globally. Front Line is the world's top artist management company, representing over 250 artists. These businesses power Live Nation Network, the leading provider of entertainment marketing solutions, enabling nearly 800 advertisers to tap into the 200 million consumers Live Nation delivers annually through its live event and digital platforms. For additional information, visit www.livenation.com/investors.

Live Nation Entertainment, Inc.

Key Operating Metrics

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

Concerts (1)

Total Estimated Events:

North America

4,135

3,801

11,418

10,511

International

1,136

1,128

4,248

4,606

    Total estimated events

5,271

4,929

15,666

15,117

Total Estimated Attendance (rounded):

North America

12,257,000

12,820,000

25,109,000

24,664,000

International

3,304,000

3,669,000

10,449,000

11,101,000

    Total estimated attendance

15,561,000

16,489,000

35,558,000

35,765,000

Ancillary net revenue per attendee:

North America amphitheaters

$        17.54

$        16.44

$          18.08

$        16.99

Ticketing (2)

Number of tickets sold (in thousands):

Concerts

18,072

18,266

52,563

46,122

Sports

6,384

6,070

20,556

16,583

Arts and theater

5,190

4,539

14,608

12,532

Family

2,985

2,440

9,731

7,253

Other (3)

2,264

1,239

5,492

3,145

34,895

32,554

102,950

85,635

Gross value of tickets sold (in thousands)

$ 2,008,522

$ 1,913,053

$   6,112,958

$ 5,075,524

Sponsorship/Advertising

Online advertising revenue (in thousands)

$      13,709

$        9,881

$        35,351

$      26,708

Estimated average sponsorship dollars

    per sponsor (rounded)

$    102,000

$      98,000

$      206,000

$    182,000

eCommerce

Gross value of tickets sold online (in thousands)

$ 1,700,025

$ 1,524,429

$   5,032,914

$ 4,076,512

Number of customers in database (rounded)

107,298,000

94,809,000

(1)

Events generally represent a single performance by an artist. Attendance generally represents the number of fans who were present at an event. Festivals are counted as one event in the quarter in which the festival begins but attendance is split over the days of the festival and can be split between quarters. Events and attendance metrics are estimated each quarter.

(2)

The number and gross value of tickets sold includes primary tickets only. These metrics include tickets sold during the period regardless of event timing except for our promoted concerts in our owned and/or operated buildings and certain European territories where these tickets are recognized as the concerts occur. The tickets sold listed above for 2010 do not include 7.1 million tickets with a gross value of $405.0 million for the pre-Merger period. Tickets sold for the full nine months ended September 30, 2010, including the pre-Merger period, were as follows:

Concerts

49,132

Sports

18,242

Arts and theater

13,779

Family

8,251

Other

3,376

92,780

(3)

Other category includes tickets for comedy shows, facility tours, donations, lectures, seminars and cinema.

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2011

2010

2011

2010

(in thousands except share and per share data)

Revenue

$  1,790,025

$  1,835,806

$      4,198,316

$   3,825,902

Operating expenses:

Direct operating expenses

1,286,304

1,388,295

2,971,579

2,769,334

Selling, general and administrative expenses

282,462

244,694

822,226

729,189

Depreciation and amortization

83,341

70,249

237,749

197,190

Loss (gain) on sale of operating assets

231

(779)

866

3,155

Corporate expenses

27,385

27,660

73,011

86,666

Acquisition transaction expenses

5,493

2,581

7,864

17,992

                  Operating income

104,809

103,106

85,021

22,376

Interest expense

30,388

29,280

90,462

85,773

Loss on extinguishment of debt

21,172

Interest income

(1,023)

(709)

(2,848)

(2,143)

Equity in earnings of nonconsolidated affiliates

(2,777)

(629)

(5,549)

(2,884  )

Other expense (income), net

6,461

(212)

7,207

(1,845)

Income (loss) from continuing operations before income taxes

71,760

75,376

(4,251)

(77,697)

Income tax expense (benefit)

8,739

10,338

(29,544)

10,755

Income (loss) from continuing operations

63,021

65,038

25,293

(88,452)

Loss from discontinued operations, net of tax

(3,213)

(3,893)

Net income (loss)

63,021

61,825

25,293

(92,345)

Net income attributable to noncontrolling interests

11,309

10,818

8,784

11,648

Net income (loss) attributable to Live Nation Entertainment, Inc.

$          51,712

$          51,007

$           16,509

$         (103,993)

Basic net income (loss) per common share attributable to common stockholders:

Income (loss) from continuing operations attributable to Live Nation Entertainment, Inc.

$              0.28

$  0.32

$  0.09

$         (0.62)

Loss from discontinued operations attributable to Live Nation Entertainment, Inc.

(0.02)

(0.02)

Net income (loss) attributable to Live Nation Entertainment, Inc.

$              0.28

$  0.30

$               0.09

$             (0.64)

Diluted net income (loss) per common share attributable to common stockholders:

Income (loss) from continuing operations attributable to Live Nation Entertainment, Inc.

$              0.27

$  0.32

$    0.09

$  (0.62  )

Loss from discontinued operations attributable to Live Nation Entertainment, Inc.

(0.02)

(0.02)

Net income (loss) attributable to Live Nation Entertainment, Inc.

$  0.27

$  0.30

$              0.09

$  (0.64  )

Weighted average common shares outstanding:

Basic

186,127,846

170,285,159

181,115,853

162,285,785

Diluted

188,531,130

172,302,273

183,306,799

162,285,785

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2011

2010

(unaudited)

(audited)

(in thousands)

ASSETS

Current assets

Cash and cash equivalents

$  782,573

$  892,758

Accounts receivable, less allowance of $12,480 as of September 30, 2011 and $10,898 as of December 31, 2010

489,236

329,947

Prepaid expenses

324,256

348,309

Other current assets

40,736

32,483

Total current assets

1,636,801

1,603,497

Property, plant and equipment

Land, buildings and improvements

853,141

850,124

Computer equipment and capitalized software

240,279

218,294

Furniture and other equipment

170,280

168,508

Construction in progress

56,094

24,528

1,319,794

1,261,454

Less accumulated depreciation

604,038

524,390

715,756

737,064

Intangible assets

Definite-lived intangible assets, net

896,837

997,268

Indefinite-lived intangible assets

377,508

375,214

Goodwill

1,247,752

1,226,416

Investments in nonconsolidated affiliates

51,187

30,077

Other long-term assets

242,860

226,024

Total assets

$    5,168,701

$  5,195,560

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable, client accounts

$   413,347

$  462,301

Accounts payable

108,272

76,876

Accrued expenses

561,925

498,864

Deferred revenue

273,950

335,539

Current portion of long-term debt

56,563

54,150

Other current liabilities

24,007

46,491

Total current liabilities

1,438,064

1,474,221

Long-term debt, net

1,667,939

1,677,714

Long-term deferred income taxes

177,419

219,143

Other long-term liabilities

162,502

215,273

Commitments and contingent liabilities

Redeemable noncontrolling interests

107,541

Stockholders' equity  

Common stock

1,867

1,724

Additional paid-in capital

2,233,479

2,053,233

Accumulated deficit

(645,666)

(662,175)

Cost of shares held in treasury

(5,313)

(6,122)

Accumulated other comprehensive loss

(5,072)

(22,244)

Total Live Nation Entertainment, Inc. stockholders' equity

1,579,295

1,364,416

Noncontrolling interests

143,482

137,252

Total stockholders' equity

1,722,777

1,501,668

Total liabilities and stockholders' equity

$  5,168,701

$  5,195,560

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended

September 30,

2011

2010

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$         25,293

$    (92,345)

Reconciling items:

Depreciation

94,184

90,239

Amortization

143,565

106,951

Deferred income tax benefit

(40,679)

(7,089)

Amortization of debt issuance costs

4,365

3,265

Amortization of debt discount/premium, net

5,342

5,109

Provision for uncollectible accounts receivable and advances

1,955

16,661

Non-cash loss on extinguishment of debt

8,272

Non-cash compensation expense

40,556

45,532

Unrealized changes in fair value of contingent consideration

(8,828)

2,965

Loss on sale of operating assets

866

7,048

Equity in earnings of nonconsolidated affiliates

(5,549)

(2,884)

Other, net

2,136

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

         Increase in accounts receivable

(164,392)

(153,403)

         Decrease (increase) in prepaid expenses

25,704

(110,428)

         Increase in other assets

(56,645)

(27,083)

         Increase (decrease) in accounts payable, accrued expenses and other liabilities

(27,682)

86,200

         Increase (decrease) in deferred revenue

(67,732)

34,696

Net cash provided by (used in) operating activities

(27,541)

13,706

CASH FLOWS FROM INVESTING ACTIVITIES

Collections and advances of notes receivable

(1,091)

485

Distributions from nonconsolidated affiliates

8,804

6,019

Investments made in nonconsolidated affiliates

(6,437)

(775)

Purchases of property, plant and equipment

(69,573)

(49,165)

Proceeds from disposal of operating assets, net of cash divested

7,361

22,119

Cash paid for acquisitions, net of cash acquired

(25,499)

560,732

Purchases of intangible assets

(118)

(1,371)

Other, net

(842)

(246)

Net cash provided by (used in) investing activities

(87,395)

537,798

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net of issuance costs

(596)

1,318,132

Payments on long-term debt

(22,699)

(1,191,712)

Redemption of preferred stock

(40,000)

Contributions from noncontrolling interests

14

Distributions to and purchases/sales of noncontrolling interests

(61,808)

(10,538)

Proceeds from exercise of stock options

3,210

4,526

Proceeds from sale of common stock

76,492

Equity issuance costs

(357)

Payments for purchases of common stock

(1,567)

Payments for deferred and contingent consideration

(13,807)

(11,109)

Net cash provided by (used in) financing activities

(19,208)

67,389

Effect of exchange rate changes on cash and cash equivalents

23,959

(232)

           Net increase (decrease) in cash and cash equivalents

(110,185)

618,661

Cash and cash equivalents at beginning of period

892,758

236,955

Cash and cash equivalents at end of period

$       782,573

$   855,616

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 potential profitability growth over the full year; stabilization of consumer/fan demand for live events; the company's future opportunities; growth in availability of artists touring in the long-term; future growth in the global concert industry; and the company's ability to generate improved returns from the business in the future and to drive shareholder value. 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 risk that consumer demand weakens and the potential impact of the economic slowdown in general 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 acquisition-related severance), depreciation and amortization (including goodwill impairments), 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 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 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 ticketing, venue and other 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 operating income (loss)

Non-cash and stock-based compensation expense

Loss (gain) on sale of operating assets

Depreciation and amortization

Acquisition expenses

Operating income (loss)

Three months ended September 30, 2011

Concerts

$          83.7

$                1.4

$                 —

$              33.1

$                0.8

$              48.4

Ticketing

51.8

1.4

36.2

0.2

14.0

Artist Nation

20.0

0.2

10.7

0.3

8.8

eCommerce

14.1

2.7

11.4

Sponsorship

54.4

0.2

0.1

54.1

Other & Eliminations

(0.6)

0.2

(0.2)

(0.6)

Corporate

(19.8)

5.1

0.7

5.7

(31.3)

Total Live Nation

$        203.6

$               8.3

$                 0.2

$             83.3

$                7.0

$            104.8

Three months ended September 30, 2010

Concerts

$           61.9

$                  2.6

$                (0.8)

$             29.7

$               (2.9)

$              33.3

Ticketing

63.9

1.5

25.9

0.9

35.6

Artist Nation

21.8

4.0

12.3

1.3

4.2

eCommerce

13.5

0.2

2.2

0.1

11.0

Sponsorship

53.1

0.1

0.1

52.9

Other & Eliminations

(0.6)

0.6

Corporate

(23.5)

5.0

0.6

5.4

(34.5)

Total Live Nation

$         190.7

$              13.4

$               (0.8)

$            70.2

$              4.8

$            103.1

Nine months ended September 30, 2011

Concerts

$            62.2

$                 4.3

$                (0.7)

$              87.9

$               (5.0)

$            (24.3)

Ticketing

204.3

3.9

(0.1)

103.2

1.0

96.3

Artist Nation

35.0

27.8

1.3

37.2

(1.9)

(29.4)

eCommerce

40.0

0.2

8.2

31.6

Sponsorship

98.0

0.5

0.2

97.3

Other & Eliminations

(0.5)

0.4

(0.6)

(0.3)

Corporate

(51.8)

14.5

1.6

18.3

(86.2)

Total Live Nation

$         387.2

$               51.2

$                  0.9

$             237.7

$              12.4

$              85.0

   Nine months ended September 30, 2010

Concerts

$         43.7

$                 6.2

$                (2.0)

$              79.9

$               (2.3)

$            (38.1)

Ticketing

175.1

10.7

5.2

80.8

7.4

71.0

Artist Nation

32.5

7.2

30.8

7.1

(12.6)

eCommerce

24.4

0.4

5.3

0.8

17.9

Sponsorship

88.1

0.4

0.2

0.1

87.4

Other & Eliminations

(0.4)

(1.7)

1.3

Corporate

(57.4)

21.9

1.9

23.3

(104.5)

Total Live Nation

$        306.0

$               46.8

$                  3.2

$             197.2

$               36.4

$              22.4

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

($ in millions)

Q3 2011

Q3 2010

Adjusted operating income

$     203.6

$      190.7

Less:  Cash interest expense — net

(26.1)

(25.6)

           Cash taxes

(11.1)

(14.4)

           Maintenance capital expenditures

(12.7)

(7.4)

           Distributions to noncontrolling interests

(2.3)

(2.3)

Distributions from investments in nonconsolidated affiliates  

0.8

4.2

           Free cash flow

$   152.2

$     145.2

           Revenue generating capital expenditures

(11.8)

(11.4)

           Net

$    140.4

$     133.8

($ in millions)

9 months

2011

9 months

2010

Adjusted operating income

$     387.2

$      306.0

Less:  Cash interest expense — net

(77.9)

(75.2)

           Cash taxes

(34.3)

(42.2)

           Maintenance capital expenditures

(41.6)

(30.0)

           Distributions to noncontrolling interests

(12.3)

(10.5)

Distributions from investments in nonconsolidated affiliates  

2.4

5.2

           Free cash flow

$      223.5

$      153.3

           Revenue generating capital expenditures

(27.6)

(18.6)

           Net

$       195.9

$      134.7

Reconciliation of Cash and Cash Equivalents to Free Cash

($ in millions)

September 30,

2011

Cash and cash equivalents

$            782.6

Client cash

(333.9)

Deferred revenueevent related

(212.6)

Accrued artist fees

(11.2)

Collections on behalf of others

(35.6)

Prepaids related to artist settlements/events

167.3

   Free cash

$             356.6

SOURCE Live Nation Entertainment