Live Nation Reports Second Quarter 2006 Financial Results

08/04/2006

- Company Continues to Sharpen Focus on Live Music -

- Positive Net Income Trend Continues -

LOS ANGELES, Aug. 4 /PRNewswire-FirstCall/ -- Live Nation (NYSE: LYV), a leading live event and venue management company, announced today financial results for the three and six months ended June 30, 2006. Live Nation will discuss these results on a conference call today, Friday, August 4th at 11:00 a.m. Eastern Daylight Time. A live broadcast of the conference call will be available on the company's website, located at www.livenation.com.

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(s), together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is included at the end of this press release.

The company reported revenues of $768.2 million in the second quarter of 2006, an increase of $26.5 million, or 4%, as compared to the second quarter of 2005. Included in revenue is a $2.5 million increase due to movements in foreign exchange.

Net income increased by $8.7 million to $9.7 million in the quarter, with operating income for the quarter decreasing by $3.6 million to $11.7 million. Diluted earnings per share for the quarter amounted to $0.15.

OIBDAN (defined by the company as operating income (loss) before depreciation, amortization, loss (gain) on sale of operating assets and non-cash compensation expense) was $27.0 million in the second quarter of 2006, compared to $30.6 million in the second quarter of 2005. OIBDAN is a non-GAAP financial measure. A reconciliation of OIBDAN to operating income (loss) and net income (loss), its most directly comparable GAAP financial measures, is included at the end of this press release.

"During the quarter we continued to make significant progress in the implementation of our strategic plan," said Michael Rapino, Live Nation's Chief Executive Officer. "An environment of transformation has begun in 2006 as we execute against our newly defined core business. We have a clear strategic focus which has resulted in an expansion of our core live music business and the divestiture of a number of non-core businesses. We are implementing a range of programs to drive revenues and cash flows and have added strategic acquisitions that expand our fan and artist relationships. We remain driven by our focus on vertically integrating our business toward the fan by expanding and improving upon the services we provide to our customers before, during and after the events we promote or produce each year. We are pleased with the trends we are seeing in the third quarter, which is the most important season in our industry, and we are optimistic that we will gradually begin to witness the benefits of our investments as the year progresses."

The company's reportable operating segments are Events, Venues and Sponsorship, and Digital Distribution. The Events segment principally involves the promotion or production of live music shows, theatrical performances and specialized motor sports events, along with providing various services to artists. The Venues and Sponsorship segment principally involves the operation of venues and the sale of premium seats, national and local sponsorships and placement of advertising, including signage, promotional programs and naming of subscription series and venues. The Digital Distribution segment principally involves the management of the company's on-line and wireless distribution activities, including the development of the company's website and managing the company's in-house ticketing operations and third-party ticketing relationships. Included in the Digital Distribution revenue are ticket rebates earned on tickets sold by phone, outlet and over the internet, for events promoted by the Events segment.

Following Live Nation's spin-off from Clear Channel Communications, Inc. in December 2005, the company reorganized its business units and the way in which these businesses are assessed, as described above, beginning in 2006. The company has reclassified all periods presented to conform to the current year presentation. Revenue and expenses earned and charged between segments are eliminated in consolidation.

    Segment Financial Information (unaudited)

                                       Venues and    Digital
    (in thousands)         Events     Sponsorship  Distribution    Other

    Three Months Ended
    June 30, 2006
    Revenue               $594,122     $146,772      $20,567       $9,735
    Direct operating
     expenses              559,283       46,269          678        1,514
    Selling, general
     and administrative
     expenses               56,587       61,516        2,584        8,501
    Depreciation and
     amortization            2,523       12,588          114          234
    Loss (gain) on sale
     of operating assets    (1,780)          73           --          (36)
    Corporate expenses          --           --           --           --
    Operating income
     (loss)               $(22,491)     $26,326      $17,191        $(478)

    Three Months Ended
    June 30, 2005
    Revenue               $576,174     $138,733      $17,705      $11,635
    Direct operating
     expenses              543,237       39,897          708        2,001
    Selling, general
     and administrative
     expenses               51,782       57,331          734       10,411
    Depreciation and
     amortization            2,187       11,288           87          623
    Loss (gain) on sale
     of operating assets       (68)        (174)          --            7
    Corporate expenses          --           --           --           --
    Operating income
     (loss)               $(20,964)     $30,391      $16,176      $(1,407)

    Six Months Ended
    June 30, 2006
    Revenue             $1,016,382     $224,331      $31,155      $18,741
    Direct operating
     expenses              912,366       72,945          927        2,185
    Selling, general
     and administrative
     expenses              109,974      114,577        4,882       15,770
    Depreciation and
     amortization            4,519       24,800          180          469
    Loss (gain) on sale
     of operating assets    (1,793)          77           --       (7,687)
    Corporate expenses          --           --           --           --
    Operating income
     (loss)                $(8,684)     $11,932      $25,166       $8,004

    Six Months Ended
    June 30, 2005
    Revenue               $920,542     $213,346      $27,567      $32,132
    Direct operating
     expenses              828,844       66,385        1,101        8,961
    Selling, general
     and administrative
     expenses              118,078      102,969        1,483       20,774
    Depreciation and
     amortization            4,511       22,595          163        1,264
    Loss (gain) on sale
     of operating assets      (110)        (303)          --         (176)
    Corporate expenses          --           --           --           --
    Operating income
    (loss)                $(30,781)     $21,700      $24,820       $1,309



    (in thousands)                                              Consolidated
                                   Corporate     Eliminations   and Combined
    Three Months Ended
    June 30, 2006
    Revenue                             $--         $(2,966)     $768,230
    Direct operating expenses            --          (2,965)      604,779
    Selling, general and
     administrative expenses             --              (1)      129,187
    Depreciation and amortization       847              --        16,306
    Loss (gain) on sale of
     operating assets                    61              --        (1,682)
    Corporate expenses                7,958              --         7,958
    Operating income (loss)         $(8,866)            $--       $11,682

    Three Months Ended
    June 30, 2005
    Revenue                             $--         $(2,556)     $741,691
    Direct operating expenses            --          (2,525)      583,318
    Selling, general and
     administrative expenses             --             (31)      120,227
    Depreciation and amortization     1,097              --        15,282
    Loss (gain) on sale of
     operating assets                   (25)             --          (260)
    Corporate expenses                7,866              --         7,866
    Operating income (loss)         $(8,938)            $--       $15,258

    Six Months Ended
    June 30, 2006
    Revenue                             $--         $(5,812)   $1,284,797
    Direct operating expenses            --          (5,812)      982,611
    Selling, general and
     administrative expenses             --              --       245,203
    Depreciation and amortization     1,343              --        31,311
    Loss (gain) on sale of
     operating assets                    (7)             --        (9,410)
    Corporate expenses               15,337              --        15,337
    Operating income (loss)        $(16,673)            $--       $19,745

    Six Months Ended
    June 30, 2005
    Revenue                             $--         $(7,413)   $1,186,174
    Direct operating expenses            --          (7,339)      897,952
    Selling, general and
     administrative expenses             --             (46)      243,258
    Depreciation and amortization     2,226              --        30,759
    Loss (gain) on sale of
     operating assets                   (28)             --          (617)
    Corporate expenses               27,090              --        27,090
    Operating income (loss)        $(29,288)           $(28)     $(12,268)



    Events

Events revenue increased $17.9 million, or 3%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to the timing of the Werchter festival in Belgium which took place earlier in 2006, an increase in the number of, and attendance at, our amphitheater events and an increase in the number of events presented by global theater in the second quarter of 2006 as compared to the second quarter of 2005. Partially offsetting this increase was a decline in the number of domestic music events held in third-party theaters and a decline in domestic festival revenues following our exit from a number of unprofitable festivals in 2005.

Events direct operating expenses increased $16.0 million, or 3%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to the timing of the Werchter festival and the increase in global theater events as discussed above. In addition, direct operating expenses increased due to the pre-opening costs related to our production of Phantom of the Opera in Las Vegas during the second quarter of 2006. Partially offsetting this increase was a decline in direct operating expenses due primarily to the decline in the number of domestic music theater events and our exit from a number of domestic music festivals.

Events selling, general and administrative expenses increased $4.8 million, or 9%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to an increase in reserves recorded against receivables due to a vendor bankruptcy, as well as increased consulting expenses related to music marketing. In addition, due to our acquisition of a 50.1% interest in Mean Fiddler during the third quarter of 2005, we are incurring selling, general and administrative expenses related to this business that we did not have in the prior year.

Events gain on sale of operating assets increased $1.7 million during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to a gain recorded related to theatrical production assets that were sold during 2006.

Overall, the $1.5 million decline in operating income for Events in the second quarter of 2006 as compared to the same period of 2005 is due primarily to the increased receivable reserve arising from a vendor bankruptcy, increased costs related to improving our marketing function and incremental selling, general and administrative expenses due to the 2005 Mean Fiddler acquisition whose principal events occur in the third quarter. These decreases were partially offset by an increase in operating income due to the timing of the Werchter festival in Belgium in 2006 and the gain on sale of operating assets.

Venues and Sponsorship

Venues and Sponsorship revenue increased $8.0 million, or 6%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to incremental revenue related to the Mean Fiddler venues acquired during the third quarter of 2005 and the commencement of the operating agreement for Wembley Arena in London during the second quarter of 2006. We also experienced an increase in our owned and/or operated amphitheater results and merchandise revenue resulting primarily from an increase in attendance. However, this increase was partially offset by a decline in revenues from several of our larger domestic and international theatrical venues and one of our international arenas due to a decline in activity during 2006. In addition, sponsorship revenues declined due to the

timing of completion of sponsorship sales in the second quarter of 2006, which we expect to realize in the third quarter.

Venues and Sponsorship direct operating expenses increased $6.4 million, or 16%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to incremental direct operating expenses related to the Mean Fiddler acquisition and Wembley Arena noted above. In addition, direct operating expenses increased related to the increase in merchandise revenues.

Venues and Sponsorship selling, general and administrative expenses increased $4.2 million, or 7%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to an increase in salary, rent and property tax expense related to the acquisitions of Historic Theater Group and Mean Fiddler and the commencement of the Wembley Arena operating agreement. We also incurred higher selling, general and administrative expenses related to building our venue management team in 2006.

Venues and Sponsorship depreciation and amortization expense increased $1.3 million, or 12%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to increased depreciation related to capital expenditures to improve the audience experience at our owned and/or operated amphitheaters.

Overall, the $4.1 million decrease in operating income for Venues and Sponsorship in the second quarter of 2006 as compared to the same period of 2005 is due primarily to reduced activity in several of our larger theatrical venues and one of our international arenas, a reduction in sponsorship sales in the quarter, increased costs related to building the venue management team and higher depreciation expense for our domestic venues. Offsetting this decline were the improved operating results from our owned and/or operated amphitheaters.

Digital Distribution

Digital Distribution revenues increased $2.9 million, or 16%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to additional ticket service charge rebates resulting from the increase in the number of events and attendance within our Events segment. The increase in these revenues exceeds the growth for our Events segment during the same period due to the type of events and the related service charges.

Digital Distribution direct operating expenses remained relatively flat during the three months ended June 30, 2006 as compared to the same period of the prior year due to the small amount of direct operating expenses that are required for this segment.

Digital Distribution selling, general and administrative expenses increased $1.8 million, or 252%, during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to increases in salary for new staff and consultant expenses related to the development of our website and internet strategy.

Overall, operating income for Digital Distribution increased slightly in the second quarter of 2006 as compared to the same period of 2005 primarily due to additional ticket service charge rebates, partially offset by the increased costs related to building the digital distribution management team and developing our on-line presence.

Other Operations

We sold a portion of our sports representation business assets in Los Angeles early in 2006. Primarily as a result of that sale, during the three months ended June 30, 2006 as compared to the same period of the prior year, other revenues decreased $1.9 million, or 16%; other selling, general and administrative expenses decreased $1.9 million, or 18%; and we experienced an overall $.9 million decrease in operating loss for our other operations.

Interest

Total interest expense decreased $3.4 million during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to repayment or capitalization of our debt with Clear Channel Communications in December 2005. This decrease was partially offset by an increase in interest expense related to our term loan and redeemable preferred stock, which did not exist in the second quarter of 2005.

Interest income increased $4.0 million during the three months ended June 30, 2006 as compared to the same period of the prior year primarily due to interest income earned on excess cash invested in money market funds and other short-term investments.

Free Cash Flow

Free cash flow for the three months ended June 30, 2006 totaled $152.7 million as compared to $33.1 million for the same period of the prior year. This increase was driven by the improvement in net income and timing of the receipt and the amount of advance ticket sales. Free cash flow (defined by the company as cash flow from operations less maintenance capital expenditures) is a non-GAAP financial measure. A reconciliation of free cash flow to net cash provided by operating activities, its most directly comparable GAAP financial measure, is included at the end of this press release.

Cash and Debt

Cash and cash equivalents at June 30, 2006 totaled $603.4 million, an increase of $199.7 million over the balance at December 31, 2005. This increase was largely driven by the increase in advance ticket sales for events to be held in the third and fourth quarters of 2006.

Total debt, including preferred stock, at June 30, 2006 totaled $406.9 million, which represents no change compared to the balance at December 31, 2005.

Share Repurchase

On December 22, 2005, our board of directors authorized a $150 million share repurchase program, effective through December 31, 2006. As of June 30, 2006, we have repurchased 3.4 million shares under this program for an aggregate purchase price of $42.7 million, including commissions and fees, at an average price of $12.65 per share. We did not repurchase any shares during the second quarter of 2006.

We will continue to base our decisions on amounts of repurchases and their timing on such factors as the stock price, general economic and market conditions and the company's debt levels. The repurchase program may be suspended or discontinued at any time. Shares of stock repurchased under the plan will be held as treasury shares.

    Other Significant Events During and Subsequent to the Second Quarter

    *  In April 2006, we sold our entire interest in the Planet Hollywood
       venue project in Las Vegas, as well as 49.9% of our interest in the
       Phantom of the Opera project in Las Vegas.  We received $22.9 million
       in proceeds from this sale.

    *  In May 2006, we acquired a controlling interest in the touring division
       of a commonly owned group of companies operating under the name of
       Concert Productions International, or CPI, for a total purchase price
       of $47.2 million.  CPI provides full service global touring, having
       produced tours for top acts such as the Rolling Stones, Pink Floyd and
       U2.  CPI has also developed additional revenue streams around the tours
       that it produces, such as VIP ticketing, fan clubs, merchandising and
       DVDs.  CPI's Chief Executive Officer, Michael Cohl, has joined our
       board of directors.

    *  In June 2006, we acquired a controlling interest in Cinq Group, LLC,
       which operates under the name TRUNK Ltd. TRUNK Ltd. is a specialty
       merchandise company that acquires licenses, primarily from music
       artists, to design, manufacture and sell merchandise through various
       distribution channels.

    *  In June 2006, we also agreed to acquire HOB Entertainment, Inc., or
       HOB, for $350 million in cash.  HOB owns and/or operates 10 mid-size
       venues under the House of Blues brand in cities such as Las Vegas, Los
       Angeles, Chicago and Orlando, and eight amphitheaters in cities
       including Atlanta, Toronto, San Diego and Dallas.  We expect this
       acquisition, which is subject to customary closing conditions, to close
       by the end of 2006.

    *  In July 2006, we announced that we have agreed to acquire a majority
       interest in Musictoday, a leader in connecting artists directly to
       their fans through on-line fan clubs, artist e-commerce and fulfillment
       and artist fan club ticketing.

    *  We have now completed the sale of substantially all of the assets of
       the golf, football and tennis divisions of our sports representation
       business to various parties.

    Conference Call

The company will host a teleconference to discuss its second quarter 2006 financial results today, Friday, August 4th at 11:00 a.m. Eastern Daylight Time/8:00 a.m. Pacific Daylight Time. To access the teleconference, please dial 973-633-6740 ten minutes prior to the start time. The teleconference will also be available via live webcast under the "About Us" portion of the company's website located at www.livenation.com.

If you cannot listen to the teleconference at its scheduled time, there will be a replay available through Friday, August 11, 2006, which can be accessed by dialing 877-519-4471 (U.S.) or 973-341-3080 (Int'l), passcode 7600092. The webcast will also be archived on the company's website for 30 days.

About Live Nation

Live Nation is a leading live event and venue management company focused on creating superior experiences for artists, performers, corporations and fans. Live Nation owns, operates and/or has booking rights for more than 150 venues worldwide and produced over 29,500 events in 2005. Headquartered in Los Angeles, California, Live Nation is listed on the New York Stock Exchange, trading under the symbol "LYV". For more information regarding Live Nation and its businesses, please visit the company's website at www.livenation.com.

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 involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Live Nation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words or phrases "believe", "expect", "anticipate", "plans", and "estimates", and similar words or expressions are intended to identify such forward-looking statements. In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. Various risks that could cause future results to differ from those expressed by forward-looking statements include, but are not limited to, those described in Live Nation's Form 10-K for the year ended December 31, 2005 and in the company's other filings with the SEC. Other unknown or unpredictable factors could have material adverse effects on Live Nation's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed herein may not occur. You are cautioned not to place undue reliance on these forward-looking statements. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

        CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)

                            Three months ended         Six months ended
                                 June 30,                  June 30,
                            2006         2005         2006         2005
                           (in thousands except share and per share data)

    Revenue               $768,230     $741,691   $1,284,797   $1,186,174
    Operating expenses:
      Direct operating
       expenses            604,779      583,318      982,611      897,952
      Selling, general
       and administrative
       expenses            129,187      120,227      245,203      243,258
      Depreciation and
       amortization         16,306       15,282       31,311       30,759
      Gain on sale of
       operating assets     (1,682)        (260)      (9,410)        (617)
      Corporate expenses     7,958        7,866       15,337       27,090
    Operating income (loss) 11,682       15,258       19,745      (12,268)
    Interest expense         8,348          875       16,161        1,494
    Interest expense with
     Clear Channel
     Communications             --       10,827           --       22,015
    Interest income          4,496          459        5,976          944
    Equity in earnings
     (loss) of
     nonconsolidated
     affiliates              1,478       (2,129)       3,302       (1,619)
    Other income
     (expense) - net         5,728         (269)       4,009          190
    Income (loss) before
     income taxes           15,036        1,617       16,871      (36,262)
    Income tax
     benefit (expense):
      Current               (5,884)       5,370       (6,051)      17,521
      Deferred                 530       (6,017)         (21)      (3,016)
    Net income (loss)        9,682          970       10,799      (21,757)
    Other comprehensive
     income, net of tax:
      Unrealized holding
       gain on cash flow
       derivatives           1,377           --        1,869           --
      Foreign currency
       translation
       adjustments          11,919       10,319       15,597       19,903
    Comprehensive
     income (loss)         $22,978      $11,289      $28,265      $(1,854)
    Net income (loss) per
     common share:
      Basic                   $.15                      $.17
      Diluted                 $.15                      $.17
    Weighted average
     common shares
     outstanding:
      Basic             64,462,679                64,218,450
      Diluted           65,329,597                64,919,415



        CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                         Six months ended
                                                             June 30,
                                                       2006         2005
                                                          (in thousands)
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                $10,799       $(21,757)
    Reconciling items:
      Depreciation                                    30,375         29,380
      Amortization of intangibles                        936          1,379
      Deferred income tax expense                         21          3,016
      Amortization of debt issuance costs                292             --
      Current tax benefit dividends to owner              --        (27,807)
      Non-cash compensation expense                    1,570            703
      Gain on sale of operating assets                (9,410)          (617)
      Loss on sale of other investments                2,051             --
      Loss (equity) in earnings of
       nonconsolidated affiliates                     (3,302)         1,619
      Minority interest expense (income)                (684)           571
      Decrease in other - net                            (39)           (96)
    Changes in operating assets and
     liabilities, net of effects of acquisitions:
      Increase in accounts receivable                (63,170)       (68,517)
      Increase in prepaid expenses                  (199,189)      (202,060)
      Increase in other assets                       (13,828)       (69,338)
      Increase in accounts payable, accrued
       expenses and other liabilities                 56,519         96,622
      Increase in deferred income                    383,508        333,202
      Increase (decrease) in minority
       interest liability                              7,690           (953)
        Net cash provided by operating activities    204,139         75,347

    CASH FLOWS FROM INVESTING ACTIVITIES
    Decrease in notes receivable, net                    938          1,119
    Increase in investments in, and
     advances to, nonconsolidated
     affiliates - net                                 (1,179)          (173)
    Contribution from minority interest partner       15,343             --
    Proceeds from disposal of other investments        1,743             --
    Purchases of property, plant and equipment       (31,967)       (49,891)
    Proceeds from disposal of operating assets        36,655            337
    Acquisition of operating assets                   (4,022)        (1,226)
    Decrease (increase) in other - net                  (621)            49
      Net cash provided by (used in) investing
       activities                                     16,890        (49,785)

    CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from debt with Clear Channel
     Communications                                       --         42,719
    Proceeds from long-term debt, net of debt
     issuance costs                                    1,228            444
    Payments on long-term debt                        (6,351)          (508)
    Payments for purchase of common stock            (24,717)            --
        Net cash provided by (used in)
         financing activities                        (29,840)        42,655

    Effect of exchange rate changes on cash            8,527          4,595
        Net increase in cash and cash equivalents    199,716         72,812
    Cash and cash equivalents at
     beginning of period                             403,716        179,137
    Cash and cash equivalents at
     end of period                                  $603,432       $251,949



                         CONSOLIDATED BALANCE SHEETS

                                                    June 30,     December 31,
                                                      2006          2005
                                                   (unaudited)    (audited)
                                                        (in thousands)
                                    ASSETS
    CURRENT ASSETS
    Cash and cash equivalents                       $603,432       $403,716
    Accounts receivable, less allowance
     of $11,121 as of June 30, 2006 and $9,518
     as of December 31, 2005                         291,509        190,207
    Prepaid expenses                                 322,889        115,055
    Other current assets                              49,929         46,714
      Total Current Assets                         1,267,759        755,692
    PROPERTY, PLANT AND EQUIPMENT
    Land, buildings and improvements                 934,335        910,926
    Furniture and other equipment                    178,463        166,004
    Construction in progress                          40,947         39,856
                                                   1,153,745      1,116,786
    Less accumulated depreciation                    340,544        307,867
                                                     813,201        808,919
    INTANGIBLE ASSETS
    Definite-lived intangibles - net                  37,536         12,351
    Goodwill                                         157,864        137,110
    OTHER ASSETS
    Notes receivable, less allowance of
     $745 as of June 30, 2006 and
     December 31, 2005                                 3,195          4,720
    Investments in, and advances to,
     nonconsolidated affiliates                       38,880         30,660
    Other assets                                      34,691         27,132
    Total Assets                                  $2,353,126     $1,776,584

                     LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
    Accounts payable                                 $70,995        $37,654
    Deferred income                                  622,200        232,754
    Accrued expenses                                 464,672        405,507
    Current portion of long-term debt                 28,045         25,705
      Total Current Liabilities                    1,185,912        701,620
    Long-term debt                                   338,840        341,136
    Other long-term liabilities                       41,436         30,766
    Minority interest liability                       65,932         26,362
    Series A and Series B redeemable
     preferred stock                                  40,000         40,000
    Commitments and contingent liabilities
    SHAREHOLDERS' EQUITY
    Common stock                                         672            672
    Additional paid-in capital                       767,521        748,011
    Retained deficit                                 (76,763)       (87,563)
    Cost of shares held in treasury                  (21,473)       (18,003)
    Accumulated other comprehensive income (loss)     11,049         (6,417)
      Total Shareholders' Equity                     681,006        636,700
      Total Liabilities and
       Shareholders' Equity                       $2,353,126     $1,776,584



         RECONCILIATIONS OF NON-GAAP MEASURES TO THEIR MOST DIRECTLY
                     COMPARABLE GAAP MEASURES (UNAUDITED)

Reconciliation of OIBDAN to operating income (loss) and net income (loss) - Consolidated and Combined

                             Three months ended         Six months ended
                                  June 30,                  June 30,
                             2006         2005        2006          2005
                               (in thousands)            (in thousands)

    OIBDAN                 $27,015      $30,640      $43,216      $18,577
    Depreciation and
     amortization           16,306       15,282       31,311       30,759
    Gain on sale of
     operating assets       (1,682)        (260)      (9,410)        (617)
    Non-cash compensation
     expense                   709          360        1,570          703
    Operating income (loss) 11,682       15,258       19,745      (12,268)
    Interest expense         8,348          875       16,161        1,494
    Interest expense with
     Clear Channel
     Communications             --       10,827           --       22,015
    Interest income          4,496          459        5,976          944
    Equity in earnings of
     nonconsolidated
     affiliates              1,478       (2,129)       3,302       (1,619)
    Other income
     (expense) - net         5,728         (269)       4,009          190
    Income (loss) before
     income taxes           15,036        1,617       16,871      (36,262)
    Income tax
     benefit (expense):
      Current               (5,884)       5,370       (6,051)      17,521
      Deferred                 530       (6,017)         (21)      (3,016)
    Net income (loss)       $9,682         $970      $10,799     $(21,757)


Reconciliation of free cash flow to net cash provided by operating activities - Consolidated and Combined

                            Three months ended          Six months ended
                                 June 30,                  June 30,
                            2006         2005         2006          2005
                              (in thousands)            (in thousands)

    Free cash flow        $152,730      $33,110     $180,452      $49,034
    Maintenance capital
     expenditures           12,252       18,779       23,687       26,313
    Net cash provided by
     operating
     activities           $164,982      $51,889     $204,139      $75,347



    Definitions and Use of Non-GAAP Measures

OIBDAN is a non-GAAP financial measure that the company defines as operating income (loss) before depreciation, amortization, loss (gain) on sale of operating assets and non-cash compensation expense. The company uses OIBDAN to evaluate the performance of its operating segments. The company believes that information about OIBDAN assists investors by allowing them to evaluate changes in the operating results of the company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. OIBDAN is not calculated or presented in accordance with U.S. generally accepted accounting principles. A limitation of the use of OIBDAN as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company's business. Accordingly, OIBDAN should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with U.S. GAAP. Furthermore, this measure may vary among other companies; thus, OIBDAN as presented above 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 cash flow from operations less maintenance capital expenditures. 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, make acquisitions and repurchase shares. Free cash flow is not calculated or presented in accordance with U.S. generally accepted accounting principles. A limitation of the use of free cash flow as a performance measure is that it does not necessarily represent funds available for operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash flow should be considered in addition to, and not as a substitute for, net cash provided by operating activities and other measures of financial performance reported in accordance with U.S. GAAP. Furthermore, this measure may vary among other companies; thus, free cash flow as presented above may not be comparable to similarly titled measures of other companies.

SOURCE Live Nation
08/04/2006

CONTACT: Investors, Mike Smargiassi or Jonathan Lesko, both of Brainerd
Communicators, +1-212-986-6667, for Live Nation; or John Vlautin of Live
Nation, +1-310-867-7127
Web site: http://www.livenation.com
(LYV)

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