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Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K



ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2008Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                  to


Commission File No. 001-34064



TICKETMASTER ENTERTAINMENT, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

95-4546874(I.R.S. Employer
Identification No.)


8800 Sunset Blvd., West Hollywood, CA 90069(Address of Registrant's principal executive offices)

(310) 360-3300(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of exchange on which registeredCommon Stock, par value $0.01

NASDAQ Global Select Market


Securities registered pursuant to Section 12(g) of the Act:None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. o Yes    ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. o    Yes ý No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See definition of "accelerated filer," "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a smaller
reporting company)

Smaller reporting company o


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

As of June 30, 2008, there was no established public market for the registrant's common stock. Shares began trading August 21, 2008 after completion
of the spin-off from IAC/ InterActiveCorp.

As
of March 27, 2009, the following shares of the Registrant's common stock were outstanding: 57,329,136

Documents Incorporated by Reference:

Portions of the Registrant's proxy statement for its 2009 Annual Meeting of Stockholders are incorporated by reference into Part III herein.



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TICKETMASTER ENTERTAINMENT, INC.

FORM 10-K

For the Year Ended December 31, 2008

TABLE OF CONTENTS



Page
NumberPART IItem 1.

Business

1Item 1A.

Risk Factors

10Item 1B.

Unresolved Staff Comments

24Item 2.

Properties

24Item 3.

Legal Proceedings

24Item 4.

Submission of Matters to a Vote of Security Holders

28PART IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

29Item 6.

Selected Consolidated Financial Data

30Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

31Item 7A

Quantitative and Qualitative Disclosures About Market Risk

55Item 8.

Consolidated Financial Statements and Supplementary Data

56Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

56Item 9A(T).

Controls and Procedures

56Item 9B.

Other Information

57PART IIIItem 10.

Directors, Executive Officers and Corporate Governance

58Item 11.

Executive Compensation

58Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

58Item 13.

Certain Relationships and Related Transactions, and Director Independence

58Item 14.

Principal Accountant Fees and Services

58PART IVItem 15.

Exhibits and Financial Statement Schedules

58Signatures

63


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PART I

Item 1.Business

Overview

As the world's leading live entertainment ticketing and marketing company, Ticketmaster Entertainment, Inc. ("Ticketmaster
Entertainment," "we," "our," "us" or the "Company") connects the world to live entertainment. Ticketmaster Entertainment currently operates in approximately 20 countries worldwide, providing ticket
sales, ticket resale services, marketing and distribution throughwww.ticketmaster.com, one of the largest e-commerce sites on the internet,
and related proprietary internet and mobile channels, approximately 7,100 independent sales outlets and 17 call centers worldwide. Established in 1976, Ticketmaster Entertainment sold tickets on
behalf of more than 10,000 clients worldwide during 2008, including venues, promoters, sports leagues and teams and museum and cultural institutions, among other clients, across multiple live event
categories, providing exclusive ticketing services for leading arenas, stadiums, amphitheaters, music clubs, concert promoters, professional sports franchises and leagues, college sports teams,
performing arts venues, museums and theaters. Ticketmaster Entertainment's distribution channels and client base provide it with significant scalefor example, in 2008, Ticketmaster
Entertainment brands and businesses sold more than 141 million tickets valued at over $8.9 billion.

Ticketmaster
Entertainment's business also includes the operations of Front Line Management Group, Inc. ("Front Line"), one of the world's leading artist management companies.
Front Line manages musical artists and acts primarily in rock, classic rock, pop and country music. As of December 31, 2008, Front Line had almost 200 artists on its rosters and approximately
80 managers performing services to artists.



Ticketmaster Entertainment's predecessor companies, Ticketmaster Group, Inc. and its subsidiaries, were organized for the
primary purpose of developing stand-alone automated ticketing systems for license to individual facilities. Since then, Ticketmaster Entertainment's business has grown through continued improvements
in its technology, the continued expansion of its service and product offerings, as well as its client base, and the acquisition of and investment in ticketing and technology companies, as well as a
number of entertainment-related businesses, both in the United States and abroad. In January 2003, IAC/InterActiveCorp, a Delaware corporation ("IAC"), at that time our majority owner, acquired the
outstanding shares of Ticketmaster Entertainment that it did not previously own, as a result of which the Company became a wholly-owned subsidiary of IAC. In August 2008, Ticketmaster Entertainment
was spun-off from IAC and became a separate publicly-traded company. In October 2008, the Company acquired an additional equity interest in Front Line, giving it a controlling interest in
Front Line.



On July 1, 2008, the Board of Directors of IAC approved a plan to separate IAC into five separate, publicly traded companies via
the distribution of all of the outstanding shares of common stock of four wholly-owned subsidiaries, including Ticketmaster Entertainment (which at that time was known as Ticketmaster).

On
August 20, 2008, IAC distributed to its stockholders all of the outstanding shares of common stock, par value $0.01 per share, of Ticketmaster Entertainment (the
"spin-off"). Following the spin-off, Ticketmaster Entertainment's businesses included the businesses that formerly comprised IAC's Ticketmaster segment, which consisted of
IAC's domestic and international ticketing and ticketing related businesses, subsidiaries and investments, as well as IAC's investment in Front Line, and

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excluded
Ticketmaster Entertainment's former Reserve America subsidiary and its investment in Active.com, which were transferred to IAC.

Upon
completion of the spin-off (and for a short period prior to that, on a "when-issued" basis), Ticketmaster Entertainment shares began trading on the NASDAQ
Global Select Market ("NASDAQ") under the symbol "TKTM." In conjunction with the spin-off, Ticketmaster Entertainment completed the following transactions: (1) extinguished all
intercompany receivable balances due from IAC and its subsidiaries, which totaled $604.4 million by recording a non-cash distribution to IAC, (2) recapitalized the invested
equity balance with common stock, whereby holders of IAC stock received one fifth of a share of Ticketmaster Entertainment common stock for each share of common and class B common stock of IAC
held as described in our Post Effective Amendment No. 1 to Form S-1 (Commission File Number 333-152702) filed with the Securities and Exchange Commission
("SEC") on August 20, 2008, and (3) distributed $752.9 million in cash to IAC in connection with Ticketmaster Entertainment's separation from IAC, which included the net proceeds
of $723.6 million from our financings through a combination of privately issued debt securities and bank borrowings.



Front Line was formed in January 2005 when it acquired the music management businesses of Irving Azoff and Howard Kaufman and their
respective associates, funded by the private equity groups TH Lee and Bain Capital, together with the Warner Music Group. Front
Line subsequently secured additional financing from IAC. In June 2007, IAC and Warner Music Group acquired the interests formerly held by the private equity groups and certain individual investors,
following which Front Line was owned by a combination of IAC, Warner Music Group and the Azoff Family Trust. In June 2008, Madison Square Garden acquired a combined 10% interest in Front Line by
acquiring interests from both IAC and Warner Music Group. As part of Ticketmaster Entertainment's spin-off from IAC, IAC's investment in Front Line was transferred to Ticketmaster
Entertainment. On October 29, 2008, the Company acquired additional equity interests in Front Line, giving Ticketmaster Entertainment a controlling interest in Front Line. As a result, the
Company has consolidated the results of Front Line from the acquisition date.



On February 10, 2009, the Company entered into a definitive merger agreement with Live Nation, Inc. ("Live Nation"). The
combined entity, which is expected to be called Live Nation Entertainment, joins Live Nation's concert promotions expertise with Ticketmaster Entertainment's world-class ticketing solutions and artist
relationships to improve the live entertainment experience and drive major innovations in ticketing technology, marketing, and service. The companies are expected to be combined in an
all-stock merger of equals transaction that is intended to qualify as tax-free for U.S. federal income tax purposes. Under the merger agreement, holders of Ticketmaster
Entertainment common stock will receive 1.384 shares of Live Nation common stock for each share of Ticketmaster Entertainment common stock they own, subject to adjustments as provided in the merger
agreement. Live Nation and Ticketmaster Entertainment stockholders will each own approximately 50 percent of the outstanding equity interests of the combined company upon completion of the
merger. The merger is subject, among other conditions, to regulatory approvals and the approval of the stockholders of both companies. We anticipate that the transaction will close in the second half
of 2009.

Business Segments

The Company operates in two reportable segmentsTicketing and Artist Services. In addition, the Company also has corporate
and other expenses, which are managed on a total company basis. See

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Note 7Segment
Information of the Notes to the Consolidated Financial Statements for financial information regarding segment reporting.



The Company's ticketing operations are primarily an agency business that sells tickets for events on behalf of our clients and retains
a convenience charge and order processing fee for our services. We sell tickets through a combination of websites, telephone services and ticket outlets. Ticketmaster Entertainment's ticketing sales
are impacted by fluctuations in the availability of events for sale to the public, which may vary depending upon scheduling by its clients. Generally, the second and third quarters of the year
experience the highest domestic ticketing revenue, earned primarily in the concert and sports categories. Generally, international revenues are the highest in the fourth quarter of the year, earned
primarily in the concert category.



Overview."Primary" sales of tickets refers to the original sale of tickets to an event by or on behalf of an event presenter. For the
year ended
December 31, 2008, the substantial majority of Ticketmaster Entertainment's revenues were attributable to primary ticket sale services. Ticketmaster Entertainment provides primary ticket sale
services to the following types of clients:



When
providing primary ticket sale services to clients in the U.S. and abroad (other than in the United Kingdom), Ticketmaster Entertainment generally serves as the exclusive ticket
sales agent for individual tickets sold to the general public outside of facility box offices. In the United Kingdom, Ticketmaster Entertainment is typically a non-exclusive ticket sales
agent for its clients and instead is guaranteed a certain minimum allocation of the tickets for each event. For any particular event, Ticketmaster Entertainment works with clients to identify those
tickets that will be made available for sale through Ticketmaster Entertainment's various distribution channels (see "Distribution" below) as well as facility box offices. To enable most or all
tickets for a given event to be offered for sale simultaneously and sold through these channels, Ticketmaster Entertainment licenses the Ticketmaster System, our proprietary system (see "Intellectual
Property"), and related equipment to clients and installs this system at their facility box offices. The provision of primary ticket sale services to clients is generally governed by individual,
multi-year agreements between Ticketmaster Entertainment and its clients.

Consumers
who purchase tickets through Ticketmaster Entertainment pay an amount equal to the ticket face price, plus a per ticket convenience charge, a per order "order processing" fee
and, if applicable, a premium delivery charge. Ticketmaster Entertainment remits the entire face value of the

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ticket
to the client. In addition, in most cases, Ticketmaster Entertainment remits royalties as specified in the written agreement between Ticketmaster Entertainment and the client.

Client Relationships.Ticketmaster Entertainment generally enters into written agreements with individual clients to provide primary
ticket sale
services for specified multi-year periods, typically ranging from 3 to 5 years. Pursuant to these agreements, clients generally determine what tickets will be available for sale,
when such tickets will go on sale to the public and what the ticket face price will be. Agreements with venue clients generally grant Ticketmaster Entertainment the right to sell tickets for all
events presented at the relevant venue for which tickets are made available to the general public.
Agreements with promoter clients generally grant Ticketmaster Entertainment the right to sell tickets for all events presented by a given promoter at any venue, unless that venue is already covered by
an existing exclusive agreement with Ticketmaster Entertainment or another ticketing service provider. Under Ticketmaster Entertainment's exclusive contracts, clients may not utilize, authorize or
promote the services of third party ticketing companies or technologies while under contract with Ticketmaster Entertainment. While Ticketmaster Entertainment generally has the right to sell a
substantial portion of its clients' tickets, venue and promoter clients often sell and distribute group sales and season tickets in-house. In addition, under many written agreements
between promoters and Ticketmaster Entertainment's clients, Ticketmaster Entertainment's clients often allocate certain tickets for artist, promoter, agent and venue use and do not make those tickets
available for sale by us. Ticketmaster Entertainment also generally allows clients to make a certain limited number of tickets available for sale through fan or other similar clubs, from which
Ticketmaster Entertainment generally derives no revenues unless selected by the club to facilitate the sales. As a result, Ticketmaster Entertainment does not sell all of its clients' tickets and the
amount of tickets that it sells varies from client to client and from event to event, and varies as to any single client from year to year.

Pursuant
to its agreements with certain clients, sales of premium primary tickets, often under high demand, are offered for sale through the Company's TicketExchange service, which is
accessible to consumers throughwww.ticketmaster.com. Such tickets are referred to as "Platinum" tickets and are frequently priced by Ticketmaster
Entertainment's clients at prices that are meant to reflect their market value.

Convenience
charges, which are heavily negotiated, mutually agreed upon and set forth in written agreements between Ticketmaster Entertainment and its clients, vary based upon numerous
factors, including: the scope and nature of the services to be rendered, the amount and cost of equipment to be installed at the client's venue location, the amount of advertising and/or promotional
allowances to be provided, the type of event and the distribution channel in which the ticket is to be sold and the face price of the ticket. Client agreements also provide how and when, and by how
much and with what frequency, changes may be made to per ticket convenience charges and per order "order processing" fees during the term. During the year ended December 31, 2008, per ticket
convenience charges generally ranged from $2.50 to $15.00 and average revenue per ticket (which primarily includes per ticket convenience charges and per order "order processing" fees, as well as
certain other revenue sources directly related to the sale of tickets) was $7.84.

Most
written agreements provide for the payment of royalties to clients, which are heavily negotiated, in an amount equal to a mutually agreed upon portion of related per ticket
convenience charges on all tickets sold through all Ticketmaster Entertainment distribution channels and per order "order processing" fees on all tickets sold online or by telephone. In many cases,
written agreements also require Ticketmaster Entertainment to advance royalties to clients, which advances are usually recoupable by Ticketmaster Entertainment out of the future client royalty
payments. In limited instances, clients have the right to receive an upfront, non-recoupable payment from Ticketmaster Entertainment as an incentive to enter into the ticketing service
agreement. Written agreements also specify the additional ticketing systems, if any, that may be used and purchased by clients during their relationship with Ticketmaster Entertainment.

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Ticketmaster
Entertainment generally does not buy tickets from its clients for sale or resale to the public and typically assumes no financial risk for unsold tickets, other than
indirect risk associated with its ability to recoup advances made to clients. If an event is canceled, Ticketmaster Entertainment refunds the per ticket convenience charges to customers (but not the
per order "order processing" fees), except in certain European jurisdictions, where Ticketmaster Entertainment is required by law to do so. Refunds of ticket prices for canceled events are funded by
clients, which have historically fulfilled these obligations on a timely basis with few exceptions.

Clients
routinely agree by contract to include Ticketmaster Entertainment's name, logos and the applicable Ticketmaster Entertainment website address and
charge-by-phone number in advertisements in all forms of media promoting the availability of their tickets. Ticketmaster Entertainment brand names and logos are also
prominently displayed on printed tickets, ticket envelopes and e-mail alerts about upcoming events that Ticketmaster Entertainment sends to its customers. Ticketmaster Entertainment also
provides primary ticketing solutions for clients who wish to perform ticketing functions in-house on a private label or other basis through its Paciolan and Ticketmaster VISTA brands and
businesses, which license the requisite software or other rights to clients for license and per transaction fees in the case of Paciolan and for per ticket fees in the case of Ticketmaster VISTA.
Ticketmaster Entertainment also currently licenses its name and technology exclusively to a third party that provides primary ticketing services to clients in the Washington, D.C./Baltimore area, as
well as to third parties and joint ventures in certain jurisdictions abroad.



The "resale" of tickets refers to the sale of tickets by a holder who originally purchased the tickets from a venue, promoter or other
entity, or a ticketing services provider selling on behalf of a venue, promoter or other entity. Ticketmaster Entertainment currently offers ticket resale services through TicketsNow, which
Ticketmaster Entertainment acquired in February 2008, its TicketExchange service, which Ticketmaster Entertainment launched in January 2002, and GET ME IN!, which Ticketmaster Entertainment acquired
in February 2008.

TicketsNow
is a leading consumer marketplace for the resale of event tickets in the United States and Canada. TicketsNow enters into listing agreements with licensed ticket resellers to
post ticket inventory for sale through TicketsNow at a purchase price equal to a ticket resale price determined by the relevant ticket resellers, plus an amount equal to a percentage of the ticket
resale price and a pre-determined service fee. TicketsNow remits the reseller-determined ticket resale price
to the ticket resellers and retains the remainder of the purchase price. TicketsNow also licenses point-of-sale business management software to ticket resellers for a fee,
which allows the resellers to manage their ticket inventory and operate their businesses. While TicketsNow does not generally acquire tickets for sale on its own behalf, it may do so from time to time
on a limited basis. TicketsNow also operates a wholesale ticket brokerage business that sells its own inventory of tickets through TicketsNow.com and other retail resellers nationwide.

In
addition to enabling Platinum primary ticket sales, the TicketExchange service allows consumers to resell and purchase tickets online for certain events that were initially sold for
Ticketmaster Entertainment clients in the United States, Europe and Canada who elect to participate in the TicketExchange service. Sellers and buyers each pay Ticketmaster Entertainment a fee that has
been negotiated with the relevant client, a portion of which is shared with the client. Consumers in the United Kingdom, Germany and the Netherlands may buy and sell tickets to live entertainment
events through GET ME IN!, which charges sellers a commission and buyers a processing fee.

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Ticketmaster Entertainment is a leading marketer of live entertainment to fans in the markets in which it operates. For example,
Ticketmaster Entertainment informs fans about upcoming live events for which tickets will be available through Ticketmaster Entertainment in their area through its Ticket Alert email service. Fans can
customize TicketAlerts to inform them about upcoming events for particular performers, teams or venues, as well as events in specified categories (music, sports, theater and family entertainment).
Ticketmaster Entertainment sent approximately 1.6 billion TicketAlert e-mails in 2008, reaching an average of approximately 31 million consumers per week. Ticketmaster
Entertainment also provides rich content on its various websites to promote events that it tickets, including artist pages that feature video content and biographical material.

Ticketmaster
Entertainment continues to develop and introduce new initiatives, as well as enter into new relationships, in an effort to help its clients sell more tickets in more
markets. For example, Ticketmaster Entertainment acquired a 25% interest in Evolution Artists Inc. ("iLike.com") in December 2006 (which does business under the brand name "iLike"), a leading,
online social music discovery service that facilitates the sharing of playlists, new music and concerts, and has entered into arrangements with iLike.com to provide features designed to enhance the
overall consumer experience onwww.ticketmaster.com. Ticketmaster Entertainment also offers a suite of dynamic pricing tools, such as online auctions,
pursuant to which consumers bid on tickets being sold by Ticketmaster Entertainment and purchases them at a price equal to the highest winning bid. For auction sales, in
addition to per order "order processing" fees, Ticketmaster Entertainment typically receives fees based on a percentage of the prices at which tickets are ultimately sold.

Ticketmaster
Entertainment provides promotional and other related services to artists, such as the sale of tickets to members of artist fan clubs and the sale of artist fan club
memberships, through its Echo business. Ticketmaster Entertainment is also seeking to secure and strengthen its relationships with promoters. Ticketmaster Entertainment has also established a presence
as a promoter in China through its Emma Entertainment business, a ticketing company and promoter of live entertainment events in China.



Ticketmaster Entertainment sells tickets online, through independent sales outlets, and via call centers. During the year ended
December 31, 2008, 73%, 16%, and 11% of primary ticket sales were transacted through these channels, respectively.

Online.Ticketmaster Entertainment owns and operates various branded websites, both in the United States and abroad, which are
customized to reflect
services offered in each jurisdiction. Ticketmaster Entertainment's primary online ticketing website,www.ticketmaster.com, together with its other
branded ticketing websites, are designed to promote ticket sales for live events and disseminate event and related merchandise information online. Consumers can access www.ticketmaster.comdirectly,
from affiliated websites and through numerous direct links from banners and event profiles hosted by approved third party
websites.

Independent Sales Outlets.As of December 31, 2008, Ticketmaster Entertainment had approximately 7,100 "Ticket Center" independent
sales
outlets worldwide, approximately 2,000 of which were in the United States and approximately 5,100 of which were in various jurisdictions abroad. The majority of these independent sales outlets are
located in major department, grocery and music stores, malls and, in Europe, post offices. While Ticketmaster Entertainment installs and maintains the hardware and software necessary for these
independent sales outlets to sell tickets, it is not generally responsible for staffing, daily operations and related costs. Ticketmaster Entertainment pays independent sales outlets a commission, the
amount of which ranged from approximately 17% to 25% of Ticketmaster Entertainment's convenience charge in 2008.

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Call Centers.As of December 31, 2008, Ticketmaster Entertainment operated 17 call centers worldwide, through which consumers can
generally
purchase tickets by speaking to an operator or by way of an interactive voice response system, seven days a week, for at least 20 hours per day. Ticketmaster Entertainment's domestic telephone
system can channel all or a portion of incoming calls from any city to a selected call center in another city or region to accommodate the commencement of sales activity for a major event in a given
region, as well as provide back-up capabilities in the event a call center experiences operating difficulties.



The Artist Services segment primarily provides management services to music recording artists in exchange for a commission on the
earnings of these artists. Artist Services also sells merchandise associated with musical artists at live musical performances, to retailers, and directly to consumers via the internet. As of
December 31, 2008, the Artist Services segment was entirely comprised of the business of Front Line. The Artist Services segment is highly seasonal, with profitability related to the timing of
tours and merchandise sales. Peak seasons are typically in the summer and, increasingly, in the fall leading up to the holiday season.

The
fundamental strategy, both at the inception of Front Line and currently, is to build a substantial presence in the music management and allied music services businesses through
acquisition and organic growth. Through our brand "I Love All Access" we operate a successful "VIP" ticketing fan experience program. The program covers both Front Line and third party clients, and
provides fans with a range of added value to the concert ticket, including possible meet and greet or photo opportunities with the artist, attending sound checks, back stage passes, meals and
refreshments, merchandise items and venue parking.

We
also operate a merchandise business selling t-shirts and other apparel at concerts and through retail outlets. Other activities produce income from services provided for
various marketing and sponsorship activities for artists.

International Operations

Ticketmaster Entertainment provides primary ticket sale services in Australia, Canada, Ireland, New Zealand and the United Kingdom,
primarily under the Ticketmaster brand name, and through other brand names in various other jurisdictions abroad, including China (Emma Entertainment), Denmark (BILLETNet), Finland (Lippupalvelu),
Germany (Kartenhaus), the Netherlands (Ticket Service), Norway (billettservice.no), Spain (Tic Tack Ticket), Sweden (Ticnet) and Turkey (Biletix). Ticketmaster Entertainment also provides resale
ticket services in Canada through TicketsNow and in the United Kingdom, Germany and the Netherlands through GET ME IN!.

Ticketmaster
Entertainment also is a party to joint ventures with third parties that provide ticket distribution services in Mexico and supplied ticketing services for the 2008 Beijing
Olympic Games. In the case of the 2008 Beijing Olympic Games joint venture, Ticketmaster Entertainment licensed the Ticketmaster System (defined below) to the joint venture and received a fee based on
the number of tickets the joint venture sold or distributed through the system. Ticketmaster Entertainment also licenses its technology in Brazil, Argentina and Chile.

Ticket
sales and revenues attributable to international operations represented approximately 42% and 31%, respectively, of total ticket sales and revenues in 2008.

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Client Concentration

The Company's largest client, Live Nation (including its subsidiary House of Blues), represented approximately 13%, 17% and 20% of its
consolidated revenue for the years ended December 31, 2008, 2007 and 2006, respectively.

See
"Management's Discussion and Analysis of Financial Condition and Results of OperationsAccess to Supply" for a description of Ticketmaster Entertainment's client
relationship with Live Nation, including the termination of certain client agreements as of December 31, 2008.

Intellectual Property

Ticketmaster Entertainment's core proprietary operating system and software (the "Ticketmaster System") is designed for scalability,
can be customized to satisfy a full range of client requirements and its capacity can be increased through investment in additional hardware. The entire Ticketmaster Entertainment distribution
network, including the Ticketmaster System, provides a single, centralized inventory control and management system capable of tracking total ticket inventory for all events, whether sales are made on
a season, subscription, group or individual ticket basis. Ticketmaster Entertainment believes that the Ticketmaster System enables clients to sell tickets and adapt to emerging and changing trends in
the live entertainment industry in a more efficient and cost-effective manner than they could achieve on their own.

In
areas of Europe outside of the United Kingdom and Ireland, Ticketmaster Entertainment's operating businesses generally use localized versions of Ticketmaster Entertainment's software
or their own software, all of which are also proprietary to Ticketmaster Entertainment. In limited cases abroad, Ticketmaster Entertainment licenses ticketing systems from third parties. Ticketmaster
Entertainment has migrated certain of its international brands and businesses to the Ticketmaster System and intends to continue to do so over the next several years.

The
Ticketmaster System, which includes both hardware and software, is typically located in one of the multiple data centers managed by Ticketmaster Entertainment staff, with the
hardware and software required for use being installed at all points of sale. Ticketmaster Entertainment takes significant measures to prevent outages with respect to the Ticketmaster System and
related systems.

Industry Overview



The ticketing services industry has experienced significant changes over the past decade due to the advent of online commerce. As
consumers increasingly choose to purchase tickets online and through mobile channels, sales through phone, outlet and box office channels have diminished in relative importance. As online ticket
purchases increase, related ticketing costs generally decrease, which has made it easier for clients to manage and facilitate ticket sales in-house, as well as for technology-based
companies to offer primary ticketing services and stand-alone, automated ticketing systems that enable clients to perform their own ticketing or utilize self-ticketing systems. The advent
of online commerce has also contributed to the growth of resale ticketing services and the consolidation of the resale industry, which historically has been more fragmented, consisting of a
significant number of local resellers with limited inventory selling through traditional storefronts. The internet has allowed fans and other ticket resellers to reach a vastly larger audience through
the aggregation of inventory on online resale websites and marketplaces, and has provided consumers with more convenient access to tickets for a larger number and greater variety of events. These
changes have significantly altered the competitive landscape in which Ticketmaster Entertainment operates, in that they have resulted in a broader and more differentiated group of industry
participants offering increasingly more innovative ticketing products and services.

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The artist services industry has historically been extremely fragmented, with numerous music management companies in the United States
alone. Ticketmaster Entertainment believes that a key component of the business is the highly personal nature of the relationship between the artist and his or her manager, which in many cases lasts
for several years. The manager, together with the artist's lawyer and business manager, guides the career of the artists through both the creative
process and the business process in dealing with the artist's rights through music companies, agents, tour promoters, distributors and other commercial organizations.

Competition

Live event content providers (such as owners or operators of live event venues, promoters of concerts and sports teams, among others)
generally contract directly with primary ticketing service providers to sell tickets. Ticketmaster Entertainment continuously experiences substantial competition from other national, regional and
local primary ticketing service providers to secure new and retain existing clients. Ticketmaster Entertainment also faces significant and increasing competition from companies that sell
self-ticketing systems, as well as from clients, who are increasingly choosing to self-ticket through the integration of self-ticketing systems into their existing
operations or the acquisition of primary ticket service providers, and by increasing ticket sales through the client's own box offices and season, subscription or group sales channels. Ticketmaster
Entertainment also faces competition in the resale of tickets from online auction websites and marketplaces, as well as from other ticket resellers with online distribution capabilities. Ticketmaster
Entertainment believes that it competes on the basis of the breadth and quality of the products and services it provides, as well as the tickets it makes available for sale, the capabilities of the
Ticketmaster System and related systems and its distribution network, reliability and price.

In
our Artist Services business, we compete with numerous other music management companies and individual managers in the United States alone. There is competition both to find or
discover new and emerging artists as well as to represent established acts. The relationship between a manager and artist is highly personalized, and establishing and maintaining this relationship is
critical to success in the industry. We believe that we compete on the basis of the quality of the services our managers provide to clients, our reputation in the industry, and the expertise and
talents our managers utilized on behalf of their clients.

Employees

As of December 31, 2008, Ticketmaster Entertainment employed approximately 3,900 full-time and 1,900
part-time employees worldwide. Ticketmaster Entertainment believes that it generally has good employee relationships, including those with employees represented by unions or other similar
organizations. Collective bargaining agreements, whether individualized or statutory, cover all or a portion of our employees in Canada, Denmark, the Netherlands, Sweden, Norway, Spain and Finland.

Additional Information

Company Website and Public Filings.The Company maintains a website atwww.ticketmaster.com. Neither
the information on the Company's website, nor the information on the website of any Ticketmaster Entertainment business, is incorporated by reference in this report, or in any other filings with, or
in any information furnished or submitted to, the SEC.

Ticketmaster
Entertainment makes available, free of charge through its website, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K (including related amendments) as soon as reasonably practicable after they have been electronically filed with, or furnished to, the SEC.

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Code of Ethics.Ticketmaster Entertainment's code of ethics, which applies to all employees, including all executive officers and senior
financial
officers (including Ticketmaster Entertainment's Chief Financial Officer and Controller) and directors, is posted on the Company's website at www.ticketmaster.comunder Investor Relations, Corporate
Governance. The code of ethics complies with Item 406 of
Regulation S-K of the SEC's rules and regulations and the rules of The Nasdaq Stock Market. Any changes to the code of ethics that affect the provisions required by Item 406
of Regulation S-K, and any waivers of the code of ethics for Ticketmaster Entertainment's executive officers, directors or senior financial officers, will also be disclosed on
Ticketmaster's website.

Please
see the Consolidated Financial Statements and the related Notes thereto for information on revenues in the United States and foreign countries.

Item 1A.Risk Factors

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The use of words such as "anticipates," "estimates," "expects," "projects," "intends," "plans" and "believes," among others, generally identify forward-looking
statements. These forward-looking statements include, among others, statements relating to: Ticketmaster Entertainment's anticipated financial performance, business prospects and, anticipated trends
and prospects in the various industries in which Ticketmaster Entertainment businesses operate, new products, services and related strategies and other similar matters. These forward-looking
statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to
predict.

Actual
results could differ materially from those contained in the forward-looking statements included in this report for a variety of reasons, including, among others, the risk factors
set forth below. Other unknown or unpredictable factors that could also adversely affect Ticketmaster Entertainment's business, financial condition and results of operations may arise from time to
time. In light of these risks and uncertainties, the forward-looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these
forward-looking statements, which only reflect the views of our management as of the date of this report. Ticketmaster does not undertake to update these forward-looking statements.

We
describe our business risk factors below.

RISKS RELATING TO THE PENDING MERGER WITH LIVE NATION

Our entry into a merger agreement with Live Nation may have adverse impacts.

On February 10, 2009, we entered into a definitive merger agreement with Live Nation. Consummation of the merger is subject to
customary closing conditions, including regulatory (including antitrust) approvals, and approval by our stockholders and the stockholders of Live Nation. In addition, Live Nation's and our obligation
to complete the merger is conditioned on
our obtaining the consent of the lenders under our senior secured credit facilities to amend certain of the terms of that agreement. It is not certain that these conditions will be met or waived, that
the necessary approvals will be obtained, or that we will be able to successfully consummate the merger as provided for under the merger agreement, or at all. We face risks and uncertainties due both
to the pendency of the merger as well as the potential failure to consummate the merger, including:



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The
occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and our stock price. For more risks and
uncertainties associated with the merger with Live Nation, please see the joint proxy statement/prospectus that Ticketmaster Entertainment and Live Nation intend to file with the SEC with respect to
the proposed transaction.

RISKS RELATING TO OUR RECENTLY-COMPLETED SPIN-OFF FROM IAC

We may be unable to make the changes necessary to operate effectively as a separate public entity and have and will incur additional costs related to operating as an
independent company.

As a result of our spin-off from IAC, IAC no longer has any obligation to provide financial, operational or organizational
assistance to us, other than limited services pursuant to a transition services agreement that we entered into in connection with the spin-off with IAC and the three other companies
spun-off from IAC at substantially the same time as the spin-off. As a separate public entity, we are subject to, and responsible for, regulatory compliance, including periodic
public filings with the SEC and compliance with NASDAQ's continued listing requirements, as well as generally applicable tax and accounting rules. The obligations of being a public company, including
substantial public reporting and investor relations obligations, have required and will require additional expenditures, place new demands on our management and have required and will require the
hiring of additional personnel. We may need to implement additional systems that require new expenditures in order to adequately function as a public company. We have endeavored to make the changes
necessary to successfully operate as an independent public entity; however, this is an ongoing process that may present unanticipated challenges and costs that could have an adverse effect on us.

As
a newly public company, we are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 by the end of our fiscal year ending December 31, 2009, and,
accordingly, this Annual Report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public
accounting firm due to a transition period established by the SEC. If our management is unable to conclude that we maintain effective internal control over financial reporting as of
December 31, 2009, or if our independent registered public accounting firm is unable to deliver an attestation report opining that we maintain effective internal control over financial
reporting as of December 31, 2009, our business, financial condition, and results of operations could be adversely affected.

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If our spin-off from IAC, or one or more of the spin-offs of three other IAC subsidiaries from IAC that occurred on the same date, were to fail to qualify as a
transaction that is generally tax free for U.S. federal income tax purposes, Ticketmaster Entertainment may be subject to significant tax liabilities.

In connection with the spin-offs of Ticketmaster and three other IAC subsidiaries (the "Spincos"), IAC received a private
letter ruling from the IRS regarding the qualification of the spin-offs as transactions that are generally tax free for U.S. federal income tax purposes. IAC also received an opinion of
counsel regarding certain aspects of the transaction that were not covered by the private letter ruling. Notwithstanding the IRS private letter ruling and opinion of counsel, the IRS could determine
that one or more of the spin-offs should be treated as a taxable distribution if it determines that any of the representations, statements or assumptions or undertakings that were included
in the request for the IRS private letter ruling are false or have been violated or if it disagrees with the conclusions in the opinion of counsel that are not covered by the IRS ruling. In addition,
if any of the representations, statements or assumptions upon which the opinion of counsel was based were or become inaccurate, the opinion may be invalid.

If
any of the spin-offs were to fail to qualify as a transaction that is generally tax free for U.S. federal income tax purposes, then IAC would incur material income tax
liabilities for which Ticketmaster Entertainment could be liable. Under applicable federal income tax rules, we are severally liable for any federal income taxes imposed on IAC with respect to taxable
periods during which we were a member of IAC's consolidated federal income tax return group, including the period in which the spin-offs were consummated. Under the Tax Sharing Agreement that we
entered into with IAC and the other Spincos, the Company generally is required to indemnify IAC and the other Spincos for any taxes resulting from the spin-off to the extent such amounts
resulted from (i) any act or failure to act by the Company described in the covenants in the Tax Sharing Agreement, (ii) any acquisition of equity securities or assets of the Company, or
(iii) any breach by the Company of any representation or covenant contained in the separation documents or in the documents relating to the IRS private letter ruling and/or tax opinions.
Corresponding indemnification provisions also apply to the other Spincos. We are entitled to indemnification from IAC, among other things, if, we are liable for, or otherwise required to make a
payment in respect of, a spin-off tax liability for which we are not
responsible under the Tax Sharing Agreement and, if applicable, are unable to collect from the Spinco responsible for such liability under the Tax Sharing Agreement. Our ability to collect under these
indemnity provisions would depend on the financial position of the indemnifying party.

Certain transactions in IAC, Ticketmaster Entertainment, or other Spinco equity securities could cause one or more of the spin-offs to be taxable to IAC and may
give rise to indemnification obligations of the Company under the Tax Sharing Agreement.

Current U.S. federal income tax law creates a presumption that any of the spin-offs would be taxable to IAC if it is part
of a "plan or series of related transactions" pursuant to which one or more persons acquire directly or indirectly stock representing a 50% or greater interest (by vote or value) in IAC or a Spinco
(including Ticketmaster Entertainment). Acquisitions that occur during the four-year period that begins two years before the date of a spin-off are presumed to occur pursuant
to a plan or series of related transactions, unless it is established that the acquisition is not pursuant to a plan or series of transactions that includes the spin-off.

These
rules limit our ability during the two-year period following the spin-off to enter into certain transactions that might be advantageous to us and our stockholders, particularly
issuing equity securities to satisfy financing needs, repurchasing equity securities, and, under certain circumstances, acquiring businesses or assets with equity securities or agreeing to be
acquired. Under the Tax Sharing Agreement, there are restrictions on our ability to take such actions for a period of 25 months from the day after the date of our spin-off from IAC.
Entering into the merger agreement with Live Nation did

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not
violate these restrictions because, prior to entering into the agreement, the Company provided IAC with an opinion of counsel contemplated by the Tax Sharing Agreement.

In
addition to actions of IAC and the Spincos (including Ticketmaster Entertainment), certain transactions that are outside their control and therefore not subject to the restrictive
covenants contained in the Tax Sharing Agreement, such as a sale or disposition of the stock of IAC or the stock of a Spinco by certain persons that own five percent or more of any class of stock of
IAC or a Spinco could have a similar effect on the tax-free status of a spin-off as transactions to which IAC or a Spinco is a party. As of the date of the
spin-off, Liberty Media Corporation and certain of its affiliates, in the aggregate, owned IAC stock representing approximately 61.6% by vote and 29.9% by value and, immediately subsequent
to the spin-off, owned stock of each Spinco representing approximately 29.9% by vote and value. Accordingly, in evaluating our ability to engage in certain transactions involving our
equity securities, we will need to take into account the activities of Liberty Media Corporation and its affiliates.

As
a result of these rules, even if each spin-off otherwise qualifies as a transaction that is generally tax-free for U.S. federal income tax purposes,
transactions involving Spinco or IAC equity securities (including transactions by certain significant stockholders) could cause IAC to recognize taxable gain with respect to the stock of the Spinco as
described above. Although the restrictive covenants and indemnification provisions contained in the Tax Sharing Agreement are intended to minimize the likelihood that such an event will occur, one or
more of the spin-offs may become taxable to IAC as a result of transactions in IAC or Spinco equity securities. As discussed previously, Ticketmaster Entertainment could be liable for such
taxes under the Tax Sharing Agreement or under applicable federal income tax rules.

In
connection with the planned Live Nation merger, the Company has received a tax opinion from outside counsel that the transaction as contemplated in the definitive merger agreement
will not have an adverse tax effect on the spin-off. However, the IRS may disagree with the conclusions in the opinion of counsel and determine that the Live Nation merger causes the
spin-off of Ticketmaster Entertainment to be taxable to IAC. Were this to occur, Ticketmaster Entertainment could be required to make significant indemnification payments to IAC.

Our securities may not qualify for placement in investment indices. In addition, our securities may fail to meet the investment guidelines of institutional investors. In
either case, these factors may negatively impact the price of our securities and may impair our ability to raise capital through the sale of securities.

Some of the holders of IAC securities prior to the spin-off were index funds tied to NASDAQ or other stock or investment
indices, or institutional investors bound by various investment guidelines. Companies are generally selected for investment indices, and in some cases selected by institutional investors, based on
factors such as market capitalization, industry, trading liquidity and financial condition. As an independent company, we have a lower market capitalization than IAC had prior to the
spin-off. As a result, our securities may not qualify for those investment indices.

The spin-off agreements were not the result of arm's length negotiations.

The agreements that we entered into with IAC and the other Spincos in connection with the spin-offs, including the
separation and distribution agreement, tax sharing agreement, employee matters agreement and transition services agreement, were established by IAC, in consultation with the Spincos, with the
intention of maximizing the value to current IAC's shareholders. Accordingly, the terms for us may not be as favorable as would have resulted from negotiations among unrelated third parties.

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RISKS RELATING TO OUR BUSINESS

Live Entertainment Industry and General Economic TrendsOur success depends, in significant part, on entertainment, sporting and leisure events and factors
adversely affecting such events could have a material adverse effect on our business, financial condition and results of operations.

Through our Ticketing segment, we sell tickets to live entertainment, sporting and leisure events at arenas, stadiums, theaters and
other facilities. Through our Artist Services segment, we provide artist management services to nearly 200 clients, and derive significant revenues from touring and live concerts by these clients.
Accordingly, our business, financial condition and results of operations are directly affected by the popularity, frequency and location of such events. Ticket sales are sensitive to fluctuations in
the number and pricing of entertainment, sporting and leisure events and activities offered by promoters, teams and facilities, and adverse trends in the entertainment, sporting and leisure event
industries could adversely affect our business, financial
condition and results of operations. Our Ticketing segment relies on third parties to create and perform live entertainment, sporting and leisure events and to price tickets to such events.
Accordingly, our success depends, in part, upon the ability of these third parties to correctly anticipate public demand for particular events and the prices that the public is willing to pay to
attend such events, as well as the availability of popular artists, entertainers and teams. Similarly, our Artist Services segment could be adversely affected if the artists it represents do not tour
or perform as frequently as anticipated, or if such tours or performances are not as widely attended by fans as anticipated due to changing tastes, general economic conditions or otherwise.

In
addition, general economic conditions, consumer trends, work stoppages, natural disasters and terrorism could have a material adverse effect on our business, financial condition and
results of operations. Entertainment-related expenditures are particularly sensitive to business and personal discretionary spending levels, which tend to decline during general economic downturns.
Recent market conditions have been extremely volatile and unemployment rates have risen in recent months. As a result of these macroeconomic factors, it is reasonably possible that a continued
worsening of the Company's results or domestic and global economic conditions could change certain estimates and assumptions that are significant to the underlying amounts included in the Company's
Consolidated Financial Statements and the Notes thereto. A protracted global recession could have a significant negative impact on our business, financial condition and results of operations.

Third Party RelationshipsWe depend on relationships with clients and any adverse changes in these relationships could adversely affect our business, financial
condition and results of operations.

Our success is dependent, in significant part, on the ability of our businesses to maintain and renew relationships with existing
clients and to establish new client relationships. We anticipate that for the foreseeable future, the substantial majority of our revenues from our Ticketing segment will be derived from online and
offline sales of tickets. We also expect that revenues from primary ticketing services, which consist primarily of per ticket convenience charges and per order "order processing" fees, will continue
to comprise the substantial majority of our consolidated revenues for our Ticketing segment.

Securing
the right to sell tickets depends, in substantial part, on the ability of our businesses to enter into, maintain and renew client contracts on favorable terms. Revenue
attributable to our largest client, Live Nation (including its subsidiary, House of Blues), represented approximately 13% of our total revenue in 2008. This client relationship consisted of four
agreements, two with Live Nation (a worldwide agreement (other than England, Scotland and Wales) that expired without renewal on December 31, 2008, and an agreement covering England, Scotland
and Wales that expires on December 31, 2009) and two with House of Blues (a U.S. agreement that expires on December 31, 2009, and a Canadian agreement that expires on March 1,
2010). Revenue attributable to the worldwide agreement and the agreement covering England, Scotland and Wales represented

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approximately
9% and 2%, respectively, of our total revenues in 2008. The worldwide agreement expired on December 31, 2008, and we anticipate that none of the other agreements will be renewed.
Live Nation launched its own ticketing business in 2009 to ticket Live Nation events and has publicly announced that it intends to use its ticketing system to distribute tickets for third-party live
events. In addition, as is typical of the artist management industry, certain of our arrangements with clients of our Artist Services segment are terminable at will by either party. The loss of key
artists could negatively impact our business.

While
fees from management services represent slightly less than half the revenue of our Artist Service segment, and no individual client represents more than 10% of revenue from
management services, the loss of a number of key artists could negatively impact our business. In addition, as the relationship between a manager and artist is highly personalized, the loss of a
manager may also result in a loss in the artist represented by the manager, which could negatively impact our business.

We
cannot provide assurances that our businesses will be able to maintain other existing client contracts, or enter into or maintain new client contracts, on acceptable terms, if at all,
and the failure to do so could have a material adverse effect on our business, financial condition and results of operations. As explained above and in the below risk factor, the ticketing business is
highly competitive. A number of competing national, regional, and local ticketing service providers are aggressively seeking to secure ticketing contracts from existing and potential Ticketmaster
Entertainment clients. In addition, facilities, promoters and other potential clients are increasingly electing to self-ticket and/or distribute a growing number of tickets through client
direct or other new channels, which could adversely impact the ability of our businesses to secure renewals and new client contracts. The non-renewal or termination of an agreement with a
major client or multiple agreements with a combination of smaller clients could have a material adverse effect on our business, financial condition and results of operations.

Another
important component of our success is the ability of our businesses to maintain existing and build new relationships with third party distribution channels and service providers,
including providers of credit card processing and delivery services, as well as advertisers, among other parties. Any adverse changes in these relationships, including the inability of these parties
to fulfill their obligations to our businesses for any reason, could adversely affect our business, financial condition and results of operations.

CompetitionThe ticketing and artist services industries are highly competitive and competitors may win business away from us, which could adversely affect our
financial performance.

The ticketing industry is highly competitive. We face significant competition from other national, regional and local primary ticketing
service providers to secure new and retain existing clients on a continuous basis. Additionally, we face significant and increasing challenges from companies that sell self-ticketing
systems and from clients who are increasingly choosing to self-ticket, through the integration of self-ticketing systems into their existing operations or the acquisition of
primary ticket services providers and by increasing sales through facility box offices and season, subscription or group sales. We also face competition in the resale of tickets from online auction
websites and resale marketplaces and from other ticket resellers with online distribution capabilities. The intense competition that we face in the ticketing industry could cause the volume of our
ticketing services business to decline. There can be no assurance that we will be able to compete successfully in the future with existing or potential competitors or that competition will not have an
adverse effect on our business and financial condition. Moreover, as we expand into new lines of businesses (including in connection with our proposed merger with Live Nation), we may face direct
competition, in the live music industry, with our prospective or current primary ticketing clients, who primarily include live event content providers (such as owners or operators of live event
venues, promoters of concerts and sports teams, among others). This direct competition with our prospective or current primary ticketing

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clients
could result in a decline in the number of clients we have and a decline in the volume of our ticketing services business, which could adversely affect our business and financial condition.

The
artist services industry is also a highly competitive industry. There are numerous other music management companies and individual managers in the United States alone. We compete
with these companies and individuals to discover new and emerging artists and to represent established acts. In addition, certain of our arrangements with clients of our artist services business are
terminable at will by either party, leading to competition to retain those artists as clients. Competition is intense and may contribute to a decline in the volume of our artist services business,
which could adversely affect our business and financial condition.

Covenants in our debt agreements restrict our business in many ways and if we do not effectively manage our business to comply with these covenants, our financial condition
and results of operations could be adversely affected.

Our senior secured credit facilities and/or the indenture governing our Notes contain various covenants that limit our ability and/or
our restricted subsidiaries' ability to, among other things:



In
addition, our senior secured credit facilities require us to maintain specified financial ratios. Our ability to meet those financial ratios can be affected by events beyond our
control, and we may be unable to meet those tests. In addition, a failure on our part to maintain effective internal controls to measure compliance with these covenants could affect our ability to
take corrective actions on a timely basis, and could result in our being in breach. A breach of any of these covenants could result in a default under our senior secured credit facilities and/or our
other indebtedness. Upon the occurrence of an event of default under our senior secured credit facilities, the lenders could elect to declare all amounts outstanding under our senior secured credit
facilities to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness, which constitutes
a significant portion of our assets. If the lenders under our senior secured credit facilities accelerate the repayment of borrowings, we may not have sufficient assets to repay our senior secured
credit facilities and our other indebtedness.

Our
borrowings under our senior secured credit facilities are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates
increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.

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Brand RecognitionFailure to maintain brand recognition and attract and retain customers in a cost-effective manner could adversely affect our
business, financial condition and results of operations.

Maintaining and promoting the Ticketmaster andticketmaster.com(and related
international) brand names and, to a lesser extent, theticketsnow.com,ticketweb.com, museumtix.comandtmvista.com(and related international) brand names, is critical to the ability of our
businesses to attract consumers and business customers to their respective websites and other distribution channels. We believe that the importance of brand recognition will increase, given the
growing number of online ticketing services due to relatively low barriers to entry to providing internet
online content and services. Accordingly, we have spent, and expect to continue to spend, increasing amounts of money on, and devote greater resources to, branding and other marketing initiatives,
including search engine optimization techniques and paid search engine marketing, neither of which may be successful or cost-effective. The failure of our businesses to maintain the
recognition of their respective brands and to attract and retain consumers in a cost-effective manner could adversely affect our business, financial condition and results of operations.

AcquisitionsWe may experience operational and financial risks in connection with acquisitions. In addition, some of the businesses acquired by us may incur
significant losses from operations or experience impairment of carrying value.

Our growth may depend upon future acquisitions and depends, in part, on our ability to successfully integrate historical acquisitions.
We may experience operational and financial risks in connection with acquisitions. To the extent that we continue to grow through acquisitions, we will need to:



We
may not be successful in addressing these challenges or any others encountered in connection with recent and future acquisitions and the failure to do so could adversely affect our
business, financial condition and results of operations. The anticipated benefits of one or more acquisitions may not be
realized and future acquisitions could result in potentially dilutive issuances of equity securities and/or contingent liabilities. Also, the value of goodwill and other intangible assets acquired
could be impacted by one or more unfavorable events or trends, which could result in impairment charges, in addition to the $1.1 billion impairment charge recorded in the fourth quarter of 2008
as described in Note 4Goodwill and Indefinite-Lived Assets of the Notes to the Consolidated Financial Statements. The occurrence of any of these events could adversely affect our
business, financial condition and results of operations.

Through
certain recent (and potentially future) acquisitions, such as the acquisitions of TicketsNow, Emma Entertainment, Echo, GET ME IN! and Front Line, we entered (or may enter) into
aspects of the ticketing and/or entertainment industries in which we had not previously participated directly. Acquisitions of this nature could adversely affect relationships with new and potential
clients to the extent that clients view the interests of acquired businesses, or those of Ticketmaster Entertainment overall following the completion of any such acquisitions, as competing with or
diverging from their own, which could adversely impact our relationships with its clients and its ability to attract new clients. This would adversely affect our business, financial condition and
results of operations.

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International Presence and ExpansionOur businesses operate in international markets in which we have limited experience. Our businesses may not be able to
successfully expand into new, or further into existing, international markets.

We provide services in various jurisdictions abroad through a number of brands and businesses that we own and operate, as well as
through joint ventures, and expect to continue to expand our international presence. We face, and expect to continue to face, additional risks in the case of our existing and future international
operations, including:



Our
ability to expand our international operations into new jurisdictions, or further into existing, jurisdictions will depend, in significant part, on our ability to identify potential
acquisition candidates, joint venture or other partners, and enter into arrangements with these parties on favorable terms, as well as our ability to make continued investments to maintain and grow
existing international operations. If the revenues generated by international operations are insufficient to offset expenses incurred in connection with the maintenance and growth of these operations,
our business, financial condition and results of operations could be materially and adversely affected. In addition, in an effort to make international operations in one or more given jurisdictions
profitable over the long term, significant additional investments that are not profitable over the short term could be required over a prolonged period.

In
addition, the ticketing industry in many jurisdictions abroad is more fragmented and local than it is in the United States. Our success in these markets will depend on the ability of
our businesses to create economies of scale by consolidating within each market geographically, which would most likely occur over a prolonged period, during which significant investments in
technology and infrastructure would be required. In the case of expansion through organic growth, we could face substantial barriers to entry in new markets, and barriers impeding expansion within
existing, markets due primarily to the risks and concerns discussed above, among others.

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Foreign Currency RisksWe face risks and uncertainties related to foreign currency exchange rate fluctuations.

To the extent that costs and prices for services are established in local currencies and adjusted to U.S. dollars based on
then-current exchange rates, we will be exposed to foreign exchange rate fluctuations. After accounting for such fluctuations, we may be required to record significant gains or losses, the
amount of which will vary based on then current exchange rates, which could cause our results to differ materially from expectations. As we continue to expand our international presence, our exposure
to exchange rate fluctuations will increase, which may have a negative impact on our financial results.

Future Capital NeedsWe may have future capital needs and may not be able to obtain additional financing on acceptable terms.

In connection with our spin-off from IAC, we incurred indebtedness of approximately $765 million and have since
drawn down an additional $100 million from our revolving line of credit. Our future capital needs may include funds necessary to develop new services or to enhance our existing services, to
complete acquisitions or to otherwise take advantage of business opportunities or respond to competitive pressures.

These
arrangements and current market conditions may limit our ability to secure additional financing in the future on favorable terms or at all. Our ability to secure additional
financing and satisfy our financial obligations under indebtedness outstanding from time to time will depend upon our future operating performance, which is subject to then prevailing general economic
and credit market conditions, including interest rate levels and the availability of credit generally, and financial, business and other factors, many of which are beyond our control. The prolonged
continuation or worsening of current credit market conditions would have a material adverse effect on our ability to secure financing on favorable terms, if at all.

We
may be unable to secure additional financing or financing on favorable terms or our operating cash flow may be insufficient to satisfy our financial obligations under indebtedness
outstanding from time to time (if any). Furthermore, if financing is not available when needed, or is available on unfavorable terms, we may be unable to develop new services or enhance our existing
services, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial
condition and results of operations. If additional funds are raised through the issuance of equity securities, our stockholders may experience significant dilution. Also, our ability to engage in
significant equity issuances is limited in order to preserve the tax-free nature of the spin-off, as explained in the above risk factors.

Volatile Stock PriceOur stock price has been volatile

Our common stock began trading on the NASDAQ Stock Market on August 21, 2008 upon completion of the spin-off (and for a short
period prior to that were listed on a "when-issued" basis). Since this time, the market price of our common stock has been volatile. It is likely that the market price of our common stock will
continue to be subject to significant fluctuations. We believe that future announcements concerning us, our competitors or our principal customers, including technological innovations, new product and
service introductions, governmental regulations, litigation or changes in earnings estimated by us or analysts may cause the market price of our common stock to fluctuate substantially in the future.
Sales of substantial amounts of outstanding common stock in the public market could materially and adversely affect the market price of our common stock. Further, in recent months the stock market has
experienced extreme price fluctuations in equity securities of listed companies. These price and volume fluctuations often have been unrelated to the operating

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performance
of those companies. These fluctuations, as well as general economic, political and market conditions, such as armed hostilities, acts of terrorism, civil disturbances, recessions,
international currency fluctuations, or tariffs and other trade barriers, may materially and adversely affect the market price of our common stock.

Changing Customer Requirements and Industry StandardsOur businesses may not be able to adapt quickly enough to changing customer requirements and industry
standards.

The e-commerce industry is characterized by evolving industry standards, frequent new service and product introductions and
enhancements and changing
customer demands. Our businesses may not be able to adapt quickly enough and/or in a cost-effective manner to changes in industry standards and customer requirements and preferences, and
their failure to do so could adversely affect our business, financial condition and results of operations. In addition, the continued widespread adoption of new internet or telecommunications
technologies and devices or other technological changes could require our businesses to modify or adapt their respective services or infrastructures. The failure of our businesses to modify or adapt
their respective services or infrastructures in response to these trends could render their existing websites, services and proprietary technologies obsolete, which could adversely affect our
business, financial condition and results of operations.

In
addition, we are currently in the process of migrating our international brands and businesses to the Ticketmaster System in an attempt to provide consistent and
state-of-the-art services across our businesses and to reduce the cost and expense of maintaining multiple systems, which we may not be able to complete in a timely
or cost-effective manner. Delays or difficulties in implementing the Ticketmaster System, as well as any new or enhanced systems, may limit our ability to achieve the desired results in a
timely manner. Also, we may be unable to devote financial resources to new technologies and systems in the future, which could adversely affect our business financial condition and results of
operations.

Compliance with Laws, Rules and RegulationsOur failure to comply with existing laws, rules and regulations as well as changing laws, rules and regulations and
other legal uncertainties, could adversely affect our business, financial condition and results of operations.

Since our businesses sell tickets and provide related services to consumers through a number of different online and offline channels,
they are subject to a wide variety of statutes, rules, regulations, policies and procedures in various jurisdictions in the United States and abroad, which are subject to change at any time. For
example, our businesses conduct marketing activities via the telephone and/or through online marketing channels, which activities are governed by numerous federal and state regulations, such as the
Telemarketing Sales Rule, state telemarketing laws and the CAN-SPAM Act, among others. Our businesses are also subject to laws, rules and regulations applicable to providers of primary
ticketing and ticket resale services, which in some cases regulate the amount of transaction and other fees that they may be charged in connection with primary ticketing sales and/or the ticket prices
that may be charged in the case of ticket resale services. New legislation of this nature is introduced from time to time in various (and is pending in certain) jurisdictions in which our businesses
sell tickets and provide services. For example, several U.S. states and cities, Canadian provinces, the United Kingdom and European countries prohibit the resale of tickets at prices greater than the
original face price (in the case of certain jurisdictions, without the consent of the venue) and/or prohibit the resale of tickets to certain types of events. Our various businesses have recently been
named as defendants in several purported class action lawsuits and other actions and investigations alleging violations of these types of laws (See Item 3Legal Proceedings). The
failure of our businesses to comply with these laws and regulations could result in fines and/or proceedings against us by governmental agencies and/or consumers, which if material, could adversely
affect our business, financial condition and results of operations. In addition, the promulgation of new laws, rules and regulations that restrict or otherwise

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unfavorably
impact the ability or manner in which our businesses provide primary ticketing and ticket resale services would require our businesses to change certain aspects of their business,
operations and client relationships to ensure compliance, which could decrease demand for services, reduce revenues, increase costs and/or subject us to additional liabilities.

In
addition, the application of various domestic and international sales, use, value-added and other tax laws, rules and regulations to our historical and new products and services is
subject to interpretation by applicable taxing authorities. While we believe that we are compliant with current tax provisions, taxing authorities may take a contrary position and such positions may
adversely affect our business, financial condition and results of operations.

From
time to time, federal, state and local authorities and/or consumers commence investigations, inquiries or litigation with respect to compliance by us and our businesses with
applicable consumer protection, advertising, unfair business practice, antitrust (and similar or related laws) and other laws. Our businesses have historically cooperated with authorities in
connection with these investigations and have satisfactorily resolved each such material investigation, inquiry or litigation. Recently, several states and Canadian provinces have commenced
investigations or inquiries regarding the relationship
between Ticketmaster Entertainment and TicketsNow. We have incurred significant legal expenses in connection with the defense of governmental investigations and litigation in the past and will be
required to incur additional expenses in the future regarding such investigations and litigation. In the case of antitrust (and similar or related) matters, any adverse outcome could limit or prevent
our businesses from engaging in the ticketing business generally (or in a particular market thereof) or subject them to potential damage assessments, all of which could have a material adverse effect
on our business, financial condition and results of operations. See Item 3Legal Proceedings for a description of certain current legal proceedings involving the Company.

Maintenance of Systems and InfrastructureOur success depends, in part, on the integrity of our systems and infrastructures. System interruption and the lack of
integration and redundancy in these systems and infrastructures may have an adverse impact on our business, financial conditions and results of operations.

Our success depends, in part, on our ability to maintain the integrity of our systems and infrastructure, including websites,
information and related systems, call centers and distribution and fulfillment facilities. System interruption and the lack of integration and redundancy in our information systems and infrastructures
may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. We may experience
occasional system interruptions that make some or all systems or data unavailable or prevent our businesses from efficiently providing services or fulfilling orders. We also rely on affiliate and
third-party computer systems, broadband and other communications systems and service providers in connection with the provision of services generally, as well as to facilitate, process and fulfill
transactions. Any interruptions, outages or delays in our systems and infrastructures, our businesses, our affiliates and/or third parties, or deterioration in the performance of these systems and
infrastructures, could impair the ability of our businesses to provide services, fulfill orders and/or process transactions. Fire, flood, power loss, telecommunications failure, hurricanes, tornadoes,
earthquakes, acts of war or terrorism, acts of God and similar events or disruptions may damage or interrupt computer, broadband or other communications systems and infrastructures at any time. Any of
these events could cause system interruption, delays and loss of critical data, and could prevent our businesses from providing services, fulfilling orders and/or processing transactions. While our
businesses have backup systems for certain aspects of their operations, disaster recovery planning by its nature cannot be sufficient for all eventualities. In addition, we may not have adequate
insurance coverage to compensate for losses from a major interruption. If any of these adverse events were to occur, it could adversely affect our business, financial conditions and results of
operations.

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In
addition, any penetration of network security or other misappropriation or misuse of personal consumer information could cause interruptions in the operations of our businesses and
subject us to increased costs, litigation and other liabilities. Network security issues could lead to claims against us
for other misuse of personal information, such as for unauthorized purposes or identity theft, which could result in litigation and financial liabilities, as well as administrative action from
governmental authorities. Security breaches could also significantly damage our reputation with consumers and third parties with whom we do business. It is possible that advances in computer
capabilities, new discoveries, undetected fraud, inadvertent violations of company policies or procedures or other developments could result in a compromise of information or a breach of the
technology and security processes that are used to protect consumer transaction data. As a result, current security measures may not prevent any or all security breaches. We may be required to expend
significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. We also face risks associated with security breaches affecting
third parties with which we are affiliated or otherwise conduct business online. Consumers are generally concerned with security and privacy of the Internet, and any publicized security problems
affecting our businesses and/or those of third parties may discourage consumers from doing business with us, which could have an adverse effect on our business, financial condition and results of
operations.

PrivacyThe processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal
requirements or differing views of personal privacy rights.

In the processing of consumer transactions, our businesses receive, transmit and store a large volume of personally identifiable
information and other user data. The sharing, use, disclosure and protection of this information are governed by the privacy and data security policies maintained by us and our businesses. Moreover,
there are federal, state and international laws regarding privacy and the storing, sharing, use, disclosure and protection of personally identifiable information and user data. Specifically,
personally identifiable information is increasingly subject to legislation and regulations in numerous jurisdictions around the world, the intent of which is to protect the privacy of personal
information that is collected, processed and transmitted in or from the governing jurisdiction. We could be adversely affected if legislation or regulations are expanded to require changes in business
practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of
operations.

Our
businesses may also become exposed to potential liabilities as a result of differing views on the privacy of consumer and other user data collected by these businesses. Our failure,
and/or the failure by the various third party vendors and service providers with which we do business, to comply with applicable privacy policies or federal, state or similar international laws and
regulations or any compromise of security that results in the unauthorized release of personally identifiable information or other user data could damage the reputation of these businesses, discourage
potential users from trying our products and services and/or result in fines and/or proceedings by governmental agencies and/or consumers, one or all of which could adversely affect our business,
financial condition and results of operations.

Intellectual PropertyWe may fail to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third
parties.

We may fail to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of
third parties. We regard our intellectual property rights, including patents, service marks, trademarks and domain names, copyrights, trade secrets and similar intellectual property (as applicable) as
critical to our success. Our businesses also rely heavily upon software codes, informational databases and other components that make up their products and services.

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We rely on a combination of laws and contractual restrictions with employees, customers, suppliers, affiliates and others to establish and protect these
proprietary rights. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use trade secret or copyrighted intellectual property without authorization which,
if discovered, might require legal action to correct. In addition, third parties may independently and lawfully develop substantially similar intellectual properties.

We
have generally registered and continue to apply to register, or secure by contract when appropriate, our trademarks and service marks as they are developed and used, and reserve and
register domain names as we deem appropriate. We generally consider the protection of our trademarks to be important for purposes of brand maintenance and reputation. While we vigorously protect our
trademarks, service marks and domain names, effective trademark protection may not be available or may not be sought in every country in which products and services are made available, and contractual
disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available. Our failure to protect our
intellectual property rights in a meaningful manner or challenges to related contractual rights could result in erosion of brand names and limit our ability of to control marketing on or through the
internet using our various domain names or otherwise, which could adversely affect our business, financial condition and results of operations.

Some
of our businesses have been granted patents and/or have patent applications pending with the United States Patent and Trademark Office and/or various foreign patent authorities for
various
proprietary technologies and other inventions. We consider applying for patents or for other appropriate statutory protection when we develop valuable new or improved proprietary technologies or
inventions are identified, and will continue to consider the appropriateness of filing for patents to protect future proprietary technologies and inventions as circumstances may warrant. The status of
any patent involves complex legal and factual questions, and the breadth of claims allowed is uncertain. Accordingly, any patent application filed may not result in a patent being issued or existing
or future patents may not be adjudicated valid by a court or be afforded adequate protection against competitors with similar technology. In addition, third parties may create new products or methods
that achieve similar results without infringing upon patents that we own. Likewise, the issuance of a patent to us does not mean that our processes or inventions will not be found to infringe upon
patents or other rights previously issued to third parties.

From
time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of the trademarks, copyrights, patents and
other intellectual property rights of third parties. In addition, litigation may be necessary in the future to enforce our intellectual property rights, protect trade secrets or to determine the
validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical
resources, any of which could adversely affect our business, financial condition and results of operations. Patent litigation tends to be particularly protracted and expensive.

Key EmployeesFailure to attract and retain key employees could adversely impact our business.

In order to be successful, we must attract and retain talented executives and other key employees, including those in managerial,
technical, sales, marketing, and support positions. Our businesses require individuals with relevant experience and diverse skill sets, and the market for these personnel is highly competitive. The
failure to attract employees with the requisite skills and abilities to our Company, or the loss of key employees, such as our Chief Executive Officer, Irving Azoff, who not only has a leadership role
for the Company as a whole but also is critical to the success of our artist services business, could adversely impact our ability to meet key objectives, such as the timely and effective development
and delivery of products and services, and could otherwise have a significant impact on our operations.

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Goodwill ImpairmentA significant portion of our goodwill recently became impaired and may suffer further impairment in the future. Any future impairment could
negatively affect our financial results and financial condition.

In accordance with U.S. generally accepted accounting principles, we test goodwill and indefinite-lived intangible assets for
impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. If the carrying amount of our goodwill exceeds its implied fair value, an
impairment loss equal to the excess is recorded. During the year ended December 31, 2008, we recognized a total non-cash charge of $1.1 billion related to the impairment of
goodwill of our Ticketing reporting unit. As of December 31, 2008, after giving effect to the impairment charge, we had goodwill of approximately $455.8 million, which constituted
approximately 27% of our total assets at that date. Due to the volatile stock market, the current economic uncertainty and other factors, the Company cannot assure investors that remaining goodwill
will not be further impaired in future periods. Impairment may result from, among other things, a significant and sustained decline in our stock prices and market capitalization, a significant decline
in our expected cash flows, an adverse change in the business climate and slower growth rates in our industry. If we are required to record an impairment charge for our goodwill in the future, this
would adversely impact our financial condition and financial results.

Item 1B.Unresolved Staff Comments



Item 2.Properties

Ticketmaster Entertainment's corporate offices are located at 8800 W. Sunset Blvd., West Hollywood, California, where the Company
currently leases approximately 70,000 square feet from IAC. Ticketmaster Entertainment also leases office space in various cities throughout the United States and in the various jurisdictions abroad
in which it has operations pursuant to short-
and long-term leases of adequate duration. In addition, Ticketmaster Entertainment owns a small office in Vancouver, Canada and a small plot of land outside of Albuquerque, New Mexico.
Ticketmaster Entertainment believes that its facilities are adequate in the locations where it currently does business.

The
following table shows the location, approximate square footage, use and related business segment of each of the material principal properties used by the Company. All such properties
are leased.

Location

State (U.S.) or
Country

Approximate
Square
Footage

Use

SegmentUNITED STATES:Chandler

Arizona


4,333

Data Center

TicketingEl Segundo

California


7,956

Data Center

TicketingLos Angeles

California


54,532

Office Building

Artist ServicesWest Hollywood

California


68,127

Office Building

CorporatePharr

Texas


41,736

Office Building, call center

TicketingAshburn

Virginia


5,300

Data Center

TicketingCharleston

West Virginia


24,941

Office Building, call center

Ticketing


Item 3.Legal Proceedings

In the ordinary course of business, Ticketmaster Entertainment is a party to various legal proceedings, including those noted in this
section. Ticketmaster Entertainment establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and

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the
loss is reasonably estimable. Management has also identified certain other legal matters where it believes an unfavorable outcome is not probable and, therefore, no reserve is established.
Although management currently believes that an unfavorable resolution of claims against Ticketmaster Entertainment, including claims where an unfavorable outcome is reasonably possible, will not have
a material impact on the liquidity, results of operations, or financial condition of Ticketmaster Entertainment, these matters are subject to inherent uncertainties and management's view of these
matters may change in the future. It is possible that an unfavorable outcome of one or more of these lawsuits could have a material impact on the liquidity, results of operations, or financial
condition of Ticketmaster Entertainment. Ticketmaster Entertainment also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential
loss. See Note 8Income Taxes of the Notes to the Consolidated Financial Statements for discussion related to income tax contingencies. Except as expressly noted herein,
Ticketmaster Entertainment intends to vigorously defend or prosecute all pending legal matters.



Curt Schlessinger et al. v. Ticketmaster, No. BC304565 (Superior Court, Los Angeles
County).On October 21, 2003, a purported representative action was filed in California state court, challenging Ticketmaster Entertainment's charges to online customers
for UPS ticket delivery. The complaint alleged in essence that it is unlawful for Ticketmaster Entertainment not to disclose on its website that the fee it charges to online customers to have their
tickets delivered by UPS contains a
profit component. The complaint asserted a claim for violation of Section 17200 of the California Business and Professions Code and sought restitution or disgorgement of the difference between
(i) the total UPS delivery fees charged by Ticketmaster Entertainment in connection with online ticket sales during the applicable statute of limitations period, and (ii) the amount
Ticketmaster Entertainment paid to UPS for that service.

On
December 31, 2004, the court denied Ticketmaster Entertainment's motion for summary judgment. On April 1, 2005, the court denied the plaintiffs' motion for leave to
amend their complaint to include UPS-delivery fees charged in connection with ticket orders placed by telephone. Citing Proposition 64, a California ballot initiative that outlawed
so-called "representative" actions brought on behalf of the general public, the court ruled that since the named plaintiffs did not order their tickets by telephone, they lacked standing
to assert a claim based on telephone ticket sales. The plaintiffs were granted leave to file an amended complaint that would survive application of Proposition 64.

On
August 31, 2005, the plaintiffs filed an amended class-action and representative-action complaint alleging (i) as before, that Ticketmaster Entertainment's website
disclosures in respect of its charges for UPS ticket delivery violate Section 17200 of the California Business and Professions Code, and (ii) for the first time, that Ticketmaster
Entertainment's website disclosures in respect of its ticket order-processing fees constitute false advertising in violation of Section 17500 of the California Business and Professions Code. On
this latter claim, the amended complaint seeks restitution or disgorgement of the entire amount of order-processing fees charged by Ticketmaster Entertainment during the applicable statute of
limitations period.

On
September 1, 2005, in light of the newly pleaded claim based upon order-processing fees, Ticketmaster Entertainment removed the case to federal court pursuant to the recently
enacted federal Class Action Fairness Act.See Curt Schlessinger et al. v. Ticketmaster, No. 05-CV-6515 (U.S. District
Court, Central District of California). On October 3, 2005, the plaintiffs filed a motion to remand the case to state court, which Ticketmaster Entertainment opposed. On March 23, 2006,
the federal district court issued an order granting the plaintiffs' motion to remand the case to state court. On April 4, 2006, Ticketmaster Entertainment filed a petition for leave to appeal
the district court's order to the United States Court of Appeals for the Ninth Circuit, which the plaintiffs opposed. On May 25, 2006,

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the
federal court of appeals issued an order denying Ticketmaster Entertainment's petition; as a result, the case was remanded to state court.

On
August 14, 2006, the plaintiffs filed a motion for class certification, which Ticketmaster Entertainment opposed. On September 25, 2006, Ticketmaster Entertainment filed
a motion for judgment on the pleadings, which the plaintiffs opposed. On November 21, 2006, Ticketmaster Entertainment requested that the court stay the case pending the California Supreme
Court's decisions in two cases (In re Tobacco II Cases, 142 Cal. App. 4th 891, andPfizer Inc. v.
Superior Court (Galfano), 141
Cal. App. 4th 290) that present issues concerning the interpretation of Proposition 64 that are directly pertinent to both of the pending motions. The plaintiffs opposed
Ticketmaster Entertainment's request. On November 29, 2006, the court ordered that the case be stayed pending the California Supreme Court's ruling on the two cases referenced above.

On
July 11, 2007, the court lifted its stay of the action for the limited purpose of allowing the plaintiffs to proceed with their motion for class certification. The parties
thereafter submitted supplemental briefing in support of their respective positions and argued the motion at a September 20 hearing. On December 19, 2007, the court issued an order
denying the plaintiffs' motion for class certification without prejudice. The court also issued an order staying the action for an additional 180 days or until the California Supreme Court
issues a ruling in theTobacco IIandPfizerappeals. Oral argument in the Tobacco IIcase took place on
March 3, 2009. On February 20, 2009, plaintiffs filed a motion for leave to file a second amended
complaint, which purports to add the allegation that Ticketmaster Entertainment's order processing fees are unconscionably high. Ticketmaster Entertainment opposed the motion on March 16, 2009.
The hearing is scheduled for April 1, 2009.



In re Ticketmaster Online-CitySearch, Inc. Initial Public Offering Securities
Litigation, Case No. 01 Civ. 10822 (S.D.N.Y.).On November 30, 2001, a purported securities class action was filed against Ticketmaster
Entertainment and other defendants in the U.S. District Court for the Southern District of New York. Plaintiff's suit was brought on behalf of purchasers of Ticketmaster Entertainment common stock
during the period from the date of its initial public offering through December 6, 2000, and alleged violations by Ticketmaster Entertainment of Section 10(b) of the Securities Exchange
Act of 1934 and Section 11 of the Securities Act of 1933. Plaintiff alleged that Ticketmaster Entertainment failed to disclose that its underwriters were to receive undisclosed and excessive
compensation and had agreed to allocate shares in the IPO to customers in exchange for agreements to purchase shares in the aftermarket at pre-determined prices. This action was later
consolidated with hundreds of similar actions against issuers, individuals, and underwriters in the U.S. District Court for the Southern District of New York inIn re Initial
Public Offering Securities Litigation, No. 21 MC 92 (S.D.N.Y.). On February 19, 2003, the court granted a motion to dismiss the Section 10(b) claim against
Ticketmaster Entertainment, but denied the motion as to the Section 11 claim against Ticketmaster Entertainment.

On
October 13, 2004, the district court granted a motion for class certification in the six so-called class certification "focus" cases in the consolidated litigation.
(Ticketmaster Entertainment is not a party in any of these focus cases.) On December 5, 2006, the U.S. Court of Appeals for the Second Circuit reversed the trial court's decision. On
August 14, 2007, plaintiffs filed amended complaints containing new class definitions in the six class certification focus cases. On September 27, 2007, plaintiffs moved for
certification of the classes in these cases, however, on October 10, 2008, the Court granted plaintiff's request for the withdrawal of that motion. On November 13, 2007, the issuer
defendants filed a motion to dismiss the amended complaints in the focus cases. On March 26, 2008, the district court granted this motion in part and denied it in part. Accordingly, this action
remains pending against Ticketmaster Entertainment.

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On
June 10, 2004, plaintiffs and the issuer and individual defendants in the consolidated litigation had submitted to the district court for approval a proposed settlement that
had previously been approved by various insurers of the issuer defendants. Approval of the proposed settlement would have resulted in the dismissal of all claims against Ticketmaster Entertainment
with no material impact on the Company. However, in the wake of the appellate reversal of the district court's class-certification order, the Court signed a stipulation and order terminating the
proposed settlement on June 25, 2007.



Krajewski v. TNow Entertainment Group, Inc., Ticketmaster Entertainment, Inc., Ticketmaster
Canada Ltd., and Premium Inventory, Inc.,Case No. CV-09-00371983-00CP (Ontario Superior Court of
Justice);Brandsma v. Ticketmaster Entertainment, Inc. and Ticketmaster Canada Ltd., Case
No. CV-09-372316-00CP (Ontario Superior Court of Justice);Labossiere v. TNow Entertainment Group, Inc., Ticketmaster
Entertainment, Inc., Ticketmaster Canada Ltd., and Premium Inventory, Inc.,Case No. CI-09-01-60049 (The Queen's
Bench, Winnipeg Centre);Marshall v. TicketsNow Entertainment Group, Inc., Ticketmaster Entertainment, Inc., Ticketmaster Canada Ltd., and Premium
Inventory Inc., Case No. 06-000462-099 (Quebec Superior Court, District of Montreal);Murray v. TNow Entertainment
Group, Inc., Ticketmaster Entertainment, Inc., Ticketmaster Canada Ltd., and Premium Inventory, Inc.,Case No. 0901-02400
(Queen's Bench of Alberta).

In
February of 2009, five putative consumer class action complaints were filed in Canada against TNow Entertainment Group, Inc., Ticketmaster Entertainment, Inc.,
Ticketmaster Canada Ltd., and Premium Inventory, Inc. All of the cases allege essentially the same set of facts and causes of action: each plaintiff purports to represent a class
consisting of all persons who purchased a ticket from Ticketmaster Entertainment, Ticketmaster Canada or TicketsNow from early February of 2007 to the present. Each proposed class purports to extend
to United States as well as Canadian consumers. The complaints allege in essence that Ticketmaster Entertainment and Ticketmaster Canada conspired to divert a large number of tickets for resale
through the TicketsNow website at prices higher than face value in violation of Ontario's Ticket Speculation Act, the Amusement Act of Manitoba, the Amusement Act of Alberta, and the Quebec Consumer
Protection Act, respectively. TheBrandsmacase, filed in Ontario, contains the additional allegation that Ticketmaster Entertainment and TicketsNow's
service fees run afoul of anti-scalping laws. Each lawsuit seeks $500 million in compensatory damages and $10 million in punitive damages on behalf of the class.



Diamond v. Ticketmaster Entertainment, Inc. and
Ticketsnow.com, Inc.,Case No. CV 09-0912 (CBM) (United States District Court, Central District of California). On
February 6, 2009, a purported class action complaint asserting several causes of action under the federal antitrust laws as well as California and New York consumer protection laws was filed
against Ticketmaster Entertainment and TicketsNow. The lawsuit alleges that Ticketmaster and TicketsNow unlawfully attempted to monopolize and/or have monopolized the market for secondary tickets and
deceived consumers by, among other things, selling large quantities of tickets to TicketsNow's ticket brokers, either prior to or at the time that tickets for an event go on sale, thereby forcing
consumers to purchase tickets at significantly marked-up prices on TicketsNow instead of Ticketmaster.com. Plaintiff seeks actual damages or restitution in an amount to be determined at
trial and attorneys fees and costs.

Wenzel v. Ticketmaster Entertainment, Inc.,Case No. CV 09-01234 (GHK) (United States District Court, Central
District of California). On February 20, 2009, a putative class action lawsuit was filed against Ticketmaster Entertainment, Inc. in the Central District of California. Plaintiff
purports to represent a nationwide class of consumers consisting of "all persons who inadvertently purchased tickets from TicketsNow.com as a result of deceptive and unfair business practices engaged
in by Ticketmaster Entertainment between January 1, 2005 to the present and who were damaged thereby."

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The
plaintiff claims that Ticketmaster Entertainment violated California's Business and Professions code by redirecting consumers from Ticketmaster.com to Ticketsnow.com, thereby engaging in false
advertising and an unfair business practice by deceiving consumers into inadvertently purchasing tickets from TicketsNow for amounts greater than face value. Plaintiff claims Ticketmaster
Entertainment has been unjustly enriched by this conduct and seeks compensatory damages, a refund to every class member of the difference between face value and the amount paid to TicketsNow, an
injunction preventing Ticketmaster Entertainment from engaging in further unfair business practices with TicketsNow, and attorney fees and costs.

Campbell v. Ticketmaster Entertainment, Inc. and TicketsNow.com, Inc., Case No. CV09-1968 (PSG) (United States District Court,
Central District of California). On March 23, 2009, a purported class action complaint asserting causes of action under California's Business and Professions Code and the California Consumer
Legal Remedies Act was filed against Ticketmaster Entertainment and TicketsNow. The lawsuit alleges that Ticketmaster and TicketsNow committed unfair business practices by, among other things,
"redirecting" consumers from Ticketmaster.com to TicketsNow.com. Plaintiff purports to represent a nationwide class consisting of "all persons who were redirected from Ticketmaster.com to
TicketsNow.com and purchased tickets above face value from TicketsNow.com." Plaintiff seeks disgorgement and restitution on behalf of the class and attorneys fees and costs.

Securities Class Action Litigation Relating to Proposed Merger

McBride v. Ticketmaster Entertainment, Inc.,Case No. BC407677 (Superior Court
of California, Los Angeles County);Police & Fire Retirement System of the City of Detroit v. Ticketmaster Entertainment, Inc. et al.,Case No. BC408228 (Superior Court of California, Los Angeles County). Two putative securities class actions were filed in California Superior Court against Ticketmaster Entertainment and its Board of
Directors on February 13 and February 20, 2009, respectively. The plaintiff in theMcBridecase alleges that the Live Nation transaction
(the "Transaction") delivers insufficient value to Ticketmaster Entertainment stockholders; that the board failed to adequately consider alternative transactions; and that Ticketmaster Entertainment
insiders benefit disproportionately from the Transaction. Among other things, the complaint seeks an injunction against the consummation of the Transaction and compensatory damages for Ticketmaster
Entertainment stockholders. The second putative class action, Police & Fire Retirement System of the City of Detroit, was filed against
Ticketmaster Entertainment and the members of its Board of Directors in the same Los Angeles court in which theMcBridecomplaint was filed. The focus
of this case is the alleged failure of Ticketmaster Entertainment to obtain the highest price and on alleged insufficiencies in the deal protections. Also included is a disclosure claim, which alleges
that Ticketmaster Entertainment wrongfully failed to disclose certain antitrust-related schedules with the merger agreement, which the plaintiff alleges makes it difficult for stockholders to assess
certain provisions of the merger agreement.

Item 4.Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of any of the Company's security holders during the fourth quarter of 2008.

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PART II

Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

Our common stock has been quoted on the Nasdaq Stock Market, Inc. ("NASDAQ") under the ticker symbol "TKTM" since
August 12, 2008. Prior to that time, there was no public market for our common stock. As of March 27, 2009, there were approximately 2,052 holders of record of our common stock and the
closing price of our common stock on such date was $4.06 on NASDAQ.

The
following table sets forth the intra-day high and low prices per share for our common stock during the periods indicated:

Year Ended December 31, 2008

High

LowFourth Quarter

$
13.33

$
3.33Third Quarter (from August 12, 2008 through September 30, 2008)


27.00


9.52


We
have not paid any dividends on our common stock since our common stock began trading on the Nasdaq Stock Market. Our Board of Directors has no current plans to pay cash dividends.
Future dividend policy will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors (subject to restrictions in the documents
governing our indebtedness). In addition, (i) our merger agreement with Live Nation prohibits Ticketmaster Entertainment from paying dividends to holders of our common stock without Live
Nation's consent, and (ii) there are restrictions on our ability to pay dividends under our senior secured credit facility.

During
the quarter ended December 31, 2008, the Company did not issue or sell any shares of its common stock or other equity securities pursuant to unregistered transactions. The
Company did not purchase any shares of its common stock during the quarter ended December 31, 2008.

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Item 6.Selected Financial Data

The following table presents summary selected historical financial information for Ticketmaster Entertainment for each of the years in
the five-year period ended December 31, 2008. This data was derived, in part, from the consolidated financial statements and related notes included at the end of this report
beginning on page F-1. The information set forth is not necessarily indicative of future results and should be read in conjunction with the consolidated financial statements and
related notes thereto, and Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

These
consolidated financial statements present our results of operations, financial position, redeemable preferred stock and stockholders' equity, comprehensive income, and cash flows,
on a combined basis up through the spin-off on August 20, 2008, and on a consolidated basis thereafter. Our
pre spin-off financial statements were prepared on a combined basis, rather than a consolidated basis because they excluded Reserve America and the investment in Active.com that were
owned, and included the investment in Front Line that was not owned by Ticketmaster Entertainment prior to the spin-off by legal entities that comprise Ticketmaster Entertainment's
businesses.

On
October 29, 2008, the Company acquired an additional equity interest in Front Line, giving Ticketmaster Entertainment a controlling interest. As a result, the Company has
consolidated the results of Front Line from the acquisition date. Prior to October 29, 2008, the investment in Front Line was accounted for using the equity method of accounting. The ownership
of Reserve America and the investment in Active.com were retained by IAC after the spin-off. These consolidated financial statements present IAC's and its subsidiaries net investment in
Ticketmaster Entertainment businesses as invested capital in lieu of stockholders' equity. Intercompany transactions and accounts have been eliminated.

Year Ended December 31,2008

2007

2006

2005

2004(Dollars in thousands, except per share data)Consolidated Statement of Operations Data:Revenue

$
1,454,525

$
1,240,477

$
1,062,672

$
928,704

$
747,838Operating (loss) income


(954,143
)

216,316


224,891


166,015


112,404Net (loss) income


(1,005,499
)

169,351


176,701


117,699


69,023Net (loss) earnings per share available to common stockholders:Basic and diluted(1)

$
(17.84
)
$
3.01

$
3.15

$
2.10

$
1.23Share used in computing earnings per share:Basic and diluted


56,353


56,171


56,171


56,171


56,171Consolidated Balance Sheet Data (end of period):Working capital

$
163,117

$
269,917

$
59,642

$
96,477

$
63,222Total assets


1,706,567


2,306,534


1,815,711


1,772,430


1,593,879Long-term debt


865,000











Minority interest


69,544


7,812


669





3,485Redeemable preferred stock


9,888











Total stockholders' equity


166,570


N/A


N/A


N/A


N/ATotal invested equity


N/A


1,739,177


1,357,837


1,353,045


1,270,899


---

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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

Forward-Looking Statements

Forward-looking statements in this Annual Report are subject to known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or
other public statements. Forward-looking statements include the information regarding future financial performance, business prospects and strategy, as well as anticipated financial position,
liquidity and capital needs and other similar matters, in each case relating to the Company.

Statements
preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans," "may increase," "may
fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts. You should
understand that the following important factors could affect future results and could cause actual results to differ materially from those expressed in such forward-looking
statements:



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Certain
of these factors and other factors, risks and uncertainties are discussed in Part I, Item 1A of this Annual Report on Form 10-K. Other unknown or
unpredictable factors may also cause actual results to differ materially from those projected by the forward-looking statements. Most of these factors are difficult to anticipate and are generally
beyond the control of the Company.

You
should consider the areas of risk described above, as well as those set forth in Part I, Item 1A of this Annual Report on Form 10-K, in connection
with considering any forward-looking statements that may be made by the Company generally. Except for the ongoing obligations of the Company to disclose material information under the federal
securities laws, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events
unless required to do so by law.

Spin-Off from IAC/InterActive Corp

On July 1, 2008, the Board of Directors of IAC approved a plan to separate IAC into five separate, publicly traded companies via
the distribution of all of the outstanding shares of common stock of four wholly-owned subsidiaries, including Ticketmaster Entertainment, Inc., a Delaware corporation, formerly known as
Ticketmaster.

On
August 20, 2008, IAC distributed to its stockholders all of the outstanding shares of common stock, par value $0.01 per share, of Ticketmaster Entertainment. Our businesses
include the businesses that formerly comprised IAC's Ticketmaster segment, which consists of its domestic and international ticketing and ticketing related businesses, subsidiaries and investments,
excluding its ReserveAmerica subsidiary and its investment in Active.com. Ticketmaster Entertainment includes IAC's minority investment in Front Line. On October 29, 2008, the Company acquired
an additional equity interest in Front Line, giving Ticketmaster Entertainment a controlling interest in Front Line. As a result, the Company consolidated the results of Front Line from the
acquisition date.

Pending Merger with Live Nation

On February 10, 2009, the Company signed a definitive agreement to merge with Live Nation in a stock transaction pursuant to
which the Company will merge with and into an indirect, wholly-owned subsidiary of Live Nation ("Merger Sub"), with Merger Sub continuing as the surviving entity and as an indirect, wholly-owned
subsidiary of Live Nation and Live Nation continuing as the public parent of the combined companies. Pursuant to the terms of the merger agreement, the aggregate number of shares of Live Nation common
stock that the holders of securities representing 100% of the voting power of

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the
Company's capital stock issued and outstanding immediately prior to the consummation of the merger are entitled to receive in the merger represents 50.01% of the total voting power of the Live
Nation capital stock issued and outstanding immediately following the consummation of the merger. The transaction requires, among other customary closing conditions, approval by a majority of the
outstanding shares of the Company's common stock and Series A Preferred Stock, voting together as a single class, approval by a majority of the shares of Live Nation's common stock, represented
in person or by proxy, and receipt of the necessary consent of lenders party to the Company's credit facility to allow the facility to remain in effect after the consummation of the merger with no
default or event of default there under resulting from the merger. Liberty Media Corporation, which beneficially owns approximately 29% of the Company's common stock, has agreed to vote in favor of
the proposed transaction, subject to the terms of a voting agreement.

Basis of Presentation

These consolidated financial statements of Ticketmaster Entertainment discussed in this Management's Discussion and Analysis of
Financial Condition and Results of Operations present our results of operations, financial position, redeemable preferred stock and stockholders' equity, comprehensive income, and cash flows, on a
combined basis through the spin-off on August 20, 2008, and on a consolidated basis thereafter. Our pre spin-off financial statements were prepared on a combined basis
rather than a consolidated basis because they excluded Ticketmaster Entertainment's former Reserve America subsidiary and its investment in Active.com, which were transferred to IAC, and included the
investment in Front Line that was not owned prior to the spin-off by legal entities that comprise Ticketmaster Entertainment businesses.

The
Company's investment in Front Line was consolidated beginning October 29, 2008, when the Company increased its ownership interest from 39.4% to 82.3%. Prior to
October 29, 2008, the investment in Front Line was accounted for using the equity method of accounting. The ownership of
Reserve America and the investment in Active.com were retained by IAC after the spin-off. These consolidated financial statements present IAC's and its subsidiaries net investment in
Ticketmaster Entertainment businesses as invested capital in lieu of stockholders' equity.

We
prepared the consolidated financial statements from the historical results of operations and historical basis of the assets and liabilities of Ticketmaster Entertainment with the
exception of income taxes. We computed income taxes using our stand-alone tax rate. Our income tax payable as well as deferred tax assets and liabilities represent the estimated impact of filing a
consolidated income tax return with IAC through the spin-off, and filing a standalone consolidated income tax return thereafter. We have eliminated all significant intercompany
transactions and accounts for periods prior to the spin-off.

Until
the spin-off, we recorded expense allocations from IAC, which consisted of certain IAC general corporate overhead expenses based on the ratio of our revenue as a
percentage of IAC's total revenue. The general corporate overhead allocations primarily included expenses relating to accounting, treasury, legal, tax, corporate support, human resource functions and
internal audit. Since the spin-off, we have been performing these functions using our own resources or purchased services, including services purchased from IAC pursuant to the
transitional services agreement among IAC and the Spincos.

The
historical financial statements for periods prior to the spin-off are based on certain assumptions about Ticketmaster Entertainment as a stand-alone company. Our
management believes the assumptions underlying the historical consolidated financial statements of Ticketmaster Entertainment are reasonable. However, this financial information does not necessarily
reflect what the historical financial position, results of operations and cash flows of Ticketmaster Entertainment would have been if Ticketmaster Entertainment had been a stand-alone company prior to
the spin-off.

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Table of Contents

Management Overview

Ticketmaster Entertainment is the world's leading live entertainment ticketing and marketing company, 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 independent sales outlets and 17 call
centers worldwide. Ticketmaster Entertainment serves leading arenas, stadiums, amphitheaters, music clubs, concert promoters,
professional sports franchises and leagues, college sports teams, performing arts venues, museums and theaters in the United States and abroad, including Australia, Canada, China, Denmark, Finland,
Germany, Ireland, the Netherlands, New Zealand, Norway, Spain, Sweden, Turkey and the United Kingdom. Ticketmaster Entertainment is also a party to joint ventures with third parties to provide ticket
distribution services in Mexico and supplied ticketing services for the 2008 Beijing Olympic Games. Ticketmaster Entertainment licenses its technology in Mexico, Argentina, Brazil, Chile, China and
Belgium.

Sources of Revenue



Ticketmaster Entertainment earns a majority of its revenue from primary ticketing on behalf of its clients. Ticketing operations
revenue primarily consists of convenience and order processing fees generated primarily through ticket sales. The sale of tickets for an event often commences several months prior to the event
performance date. Ticketmaster Entertainment recognizes revenue from the sale of a ticket when the ticket is sold. Fluctuations in ticket operations revenue occur largely as a result of changes in the
number of tickets sold and the average revenue per ticket. The number of tickets sold varies as a result of (i) additions or losses of clients serviced by Ticketmaster Entertainment;
(ii) fluctuations in the scheduling of events, particularly for popular performers; (iii) overall consumer demand for live entertainment events; and (iv) the percentage of tickets
for events which are sold directly by clients. The average revenue per ticket varies as a result of the amount of convenience charges earned on each ticket. The amount of convenience charges typically
varies based upon numerous factors, including the face price of the ticket, the type of event, whether the ticket is purchased at an independent sales outlet, through call centers or via Ticketmaster
Entertainment's websites, as well as the services to be rendered to the client.



Front Line secures work for the clients it represents, for which it receives a commission. Generally, commissions are payable by
clients upon their receipt of payments for performance of services or upon the delivery or use of materials which they created. Revenue is recognized in the month of the artist event. Contingent
commissions, such as those based on profits or gross receipts, are recorded upon determination of the amounts. Revenue is not recognized before
persuasive evidence of an arrangement exists, services have been rendered, the amount to be received is fixed or determinable, and collectability is reasonably assured.

Other
revenues consist of revenues from the sales of entertainment packages to consumers in connection with live performances. Entertainment packages are sold and cash is received from
consumers in advance of the event. Revenue and related expenses incurred are deferred until the event occurs. In addition, Front Line sells entertainment related merchandise at live musical
performances, to retailers, and directly to consumers via a website. For retail and internet sales, revenue is recognized upon shipment of the merchandise. Touring revenue, including the sale of
merchandise, is recognized in the month of the event.

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Operating Costs

Ticketmaster Entertainment records ticket operations costs specifically associated with the distribution of tickets sold through its
system. The largest components of these operating costs are royalties paid to clients as a share of convenience and order processing fees, credit card fees, payroll, telecommunication and data
communication costs associated with the Company's call centers, commissions paid on tickets distributed through independent sales outlets away from the box office, and other expenses including ticket
stock and postage. These costs are primarily variable in nature. Direct payroll costs relate to the Company's call centers. Outlet commissions are paid to music chains, department stores and other
independent retail locations in exchange for their providing space and personnel to service ticket purchases. The participation, if any, by clients in Ticketmaster Entertainment's revenue from
convenience and order processing fees is set forth in Ticketmaster Entertainment's contracts with its clients.

Channels of Distribution; Marketing Costs

Ticketmaster Entertainment sells tickets online, through independent sales outlets and call centers and via mobile devices. During the
year ended December 31, 2008, 73%, 16%, 11% and less than 1% of primary tickets were sold through these channels, respectively.

Ticketmaster
Entertainment owns and operates various branded websites, both in the U.S. and abroad, which are customized to reflect services offered in each jurisdiction and designed to
promote ticket sales for live events and disseminate event, performer and related merchandise information online. Consumers can access www.ticketmaster.com directly from affiliated websites and
through numerous direct links from banners and event profiles hosted by approved third party websites.

As
of December 31, 2008, Ticketmaster Entertainment had approximately 7,100 independent sales outlets worldwide, including approximately 2,000 in the United States and
approximately 5,100 in various jurisdictions abroad. Ticketmaster Entertainment pays independent sales outlets a commission, the amount in 2008 ranged from approximately 17% to 25% of Ticketmaster
Entertainment's convenience charge.

As
of December 31, 2008, Ticketmaster Entertainment operated 17 call centers worldwide, through which consumers can generally purchase tickets by telephone, or by way of an
interactive voice response system, seven days a week, for at least 20 hours per day.

Ticketmaster
Entertainment markets and offers services directly to customers throughwww.ticketmaster.comand its other branded websites
allowing customers to transact directly with Ticketmaster Entertainment in a convenient manner. Ticketmaster Entertainment also pays fees to market and distribute services on third party distribution
channels, such as internet portals and search engines. In addition, some of Ticketmaster Entertainment's businesses manage affiliate programs, pursuant to which they pay commissions and fees to third
parties based on revenue earned. Ticketmaster Entertainment has made, and expects to continue to make, investments in online and offline advertising to build its brands and drive traffic to its
businesses.

Clients
routinely agree by contract to include Ticketmaster Entertainment's name, logos, and applicable website address and charge-by-phone number in
advertisements in all forms of media promoting the availability of their tickets. The Ticketmaster Entertainment brand name and logo are also prominently displayed on printed tickets, ticket envelopes
and email alerts about upcoming events that Ticketmaster Entertainment sends to its customers.

Access to Supply

Ticketmaster Entertainment's primary ticketing services, and to a lesser extent, its ticketing resale services, depend significantly
upon the Company's ability to secure ticketing inventory through existing

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clients
and new clients. Ticketmaster Entertainment believes that the ability of its ticketing clients to reach a large qualified audience through its brands and businesses, including through its
multiple distribution channels, is a significant benefit. Ticketmaster Entertainment seeks to maintain and renew client contracts, and enter into new client contracts, on a favorable basis. Revenue
attributable to our largest client, Live Nation (including its subsidiary, House of Blues), represented approximately 13% of our total revenue in 2008. This client relationship consisted of four
agreements, two with Live Nation (a worldwide agreement (other than England, Scotland and Wales) that expired without renewal on December 31, 2008 and an agreement covering England, Scotland
and Wales that expires on December 31, 2009) and two with House of Blues (a U.S. agreement that expires on December 31, 2009 and a Canadian agreement that expires on March 1,
2010). Revenue attributable to the worldwide agreement and the agreement covering England, Scotland and Wales represented approximately 9% and 2%, respectively, of our total revenues in 2008. The
worldwide agreement expired on December 31, 2008, and we anticipate that none of the other agreements will be renewed. Live Nation launched its own ticketing business in 2009 to ticket Live
Nation events and has publicly announced that it intends to use its ticketing system to distribute tickets for third-party live events. Revenue generated from the four Live Nation agreements for the
years ended December 31, 2008, 2007 and 2006 is provided in the table below:

Years ended December 31,Expiration Date

2008

2007

2006(Dollars in thousands)Live NationWorldwide agreement


12/31/08

$
126,200

$
138,832

$
142,972Live NationEngland, Scotland, Wales agreement


12/31/09


30,676


34,935


33,575House of BluesU.S. agreement


12/31/09


26,662


24,960


24,866House of BluesCanadian agreement


3/1/10


8,540


7,704


7,027Total revenue under Live Nation agreements




$
192,078

$
206,431

$
208,440


Economic and Other Trends and Events; Industry Specific Factors

The ticketing services industry has experienced significant changes over the past decade due to the advent of online commerce. The
increase in the number of online ticket sales as a percentage of all ticket sales has resulted in a general decrease in ticketing costs, making it easier for clients to manage ticket sales
in-house, either using proprietary technology or stand-alone, automated ticketing systems licensed from a third party. The growth of online commerce has also contributed to the growth of
resale ticketing services and the consolidation of those services, which historically has been very fragmented, consisting of a significant number of local brokers with limited inventory selling
through traditional storefronts. In addition, entertainment-related expenditures such as ticket sales are sensitive to business and personal discretionary spending levels, which might tend to decline
during general economic downturns.

Ticketmaster
Entertainment has taken steps to replace the revenue it expects to lose following the expiration of its primary contract with Live Nation at the end of 2008. These include a
number of discrete investments including new acquisitions, efforts to gain scale in the market for ticket resale
services and adding resources into growth efforts internationally which come with up-front costs.

During
the second quarter of 2008, Ticketmaster Entertainment began a comprehensive review of its worldwide cost structure in the light of significant investments that have been made
through increased operating and capital expenditures, acquisitions in recent periods, and in advance of the termination of the Live Nation agreement in 2009. As a result of this review, commencing in
the third quarter of 2008, Ticketmaster Entertainment began to effect a series of actions expected to reduce 2009 annual operating expenses by approximately $35 million from reductions in
personnel, consolidation of customer contact centers, and the balance from reductions in other operating costs and other discretionary costs. In order to achieve these cost savings, certain
up-front costs, principally severance costs of $8.6 million were incurred during the third and fourth quarters of 2008. The cost-reduction efforts were completed in the
first quarter of 2009.

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International Operations

Ticketmaster Entertainment's future growth depends in part on its ability to expand its brands and businesses abroad, including in
Europe and Asia, given the large consumer marketplace for the services that Ticketmaster Entertainment's brands and businesses offer. Ticketmaster Entertainment's ability to expand its international
operations into jurisdictions where Ticketmaster Entertainment does not currently operate depends in part on its ability to identify potential acquisition candidates, acquire them on favorable terms
and successfully integrate their operations. In addition, in many countries abroad, access to ticketing inventory is fragmented and may require significant additional investment to achieve
profitability levels consistent with Ticketmaster Entertainment's established businesses. As a percentage of total Ticketmaster Entertainment revenue, international operations represented
approximately 31% in 2008, 34% in 2007, and 29% in 2006.

Results of Operations for the Years Ended December 31, 2008, 2007 and 2006

Ticketmaster Entertainment Consolidated Results of Operations

Revenue

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)RevenueDomestic

$
1,001,953

$
814,851

$
759,339


23
%

7
%RevenueInternational


452,572


425,626


303,333


6
%

40
%Total revenue

$
1,454,525

$
1,240,477

$
1,062,672


17
%

17
%


Consolidated

Revenue in 2008 increased $214.0 million, or 17%, from 2007 primarily due to contributions from The V.I.P. Tour Company
("TicketsNow"), Paciolan, Inc. ("Paciolan") and Front Line, acquired in February, January and October 2008, respectively and a 3% higher average revenue per primary ticket worldwide. These
increases were partially offset by a 2% decline in the number of primary tickets sold worldwide. Domestic revenue grew by 23% due primarily to the acquisitions mentioned above. Excluding acquisitions,
domestic revenue increased slightly primarily due to a 4% increase in average revenue per ticket partially offset by a 3% decline in the number of tickets sold across the concert and family
categories. International revenue grew by 6%, or approximately 8% excluding the impact of foreign exchange, primarily due to a 2% increase in average revenue per ticket. The increases in the average
revenue per ticket primarily resulted from increased revenue from China (Emma Entertainment acquired in August 2007), Canada and Spain. Acquisitions contributed approximately $183.8 million to
Ticketmaster Entertainment's overall revenue growth in 2008.

Revenue
in 2007 increased $177.8 million, or 17%, from 2006 driven by increases in both domestic and international revenue as worldwide tickets sold increased 11%, with a 5%
increase in average revenue per primary ticket. Domestic revenue increased 7%, primarily due to a 5% increase in average revenue per ticket along with a 2% increase in the number of primary tickets
sold. The increase in average domestic revenue per ticket resulted from higher convenience and processing fees due in part to annual contractual increases. International revenue increased by 40%, or
31% excluding the impact of foreign
exchange, primarily due to a 26% increase in the number of tickets sold along with a 12% increase in average revenue per ticket. The increase in the number of tickets sold primarily resulted from
increased ticket sales in the United Kingdom and Canada. International acquisitions contributed approximately $23.2 million, or 2% and 8%, to Ticketmaster Entertainment's overall revenue growth
and international growth, respectively, in 2007.

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Ticketmaster
Entertainment's largest client through 2008, Live Nation (including its subsidiary House of Blues), represented approximately 13%, 17% and 20% of its consolidated revenue
for the years ended December 31, 2008, 2007 and 2006, respectively. See "Access to Supply" for a description of Ticketmaster Entertainment's client relationship with Live Nation, including the
termination of certain client agreements as of December 31, 2008.

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Revenue:Ticketing

$
1,408,820

$
1,240,477

$
1,062,672


14
%

17
%Artist services


45,705








NM


Total revenue

$
1,454,525

$
1,240,477

$
1,062,672


17
%

17
%


Ticketing

Refer to "Consolidated," directly above, for a discussion of revenues in our Ticketing segment.

Artist Services

On October 29, 2008, the Company acquired additional equity interests in Front Line, giving Ticketmaster Entertainment a
controlling interest in the business. 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.
The artist services business focuses on artist management, merchandising, VIP ticketing and related artist marketing services activities. From the acquisition date, Front Line generated revenues of
$45.7 million, driven by strong touring revenue from its core artist management roster and revenues from Mick Management, which was acquired in November of 2008. Strong retail sales by the
merchandise business also contributed to revenue for the period.

Cost of Sales

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Cost of sales

$
927,889

$
766,538

$
637,152


21
%

20
%As a percentage of total revenue


64
%

62
%

60
%

200
bp

184
bpGross margins


36
%

38
%

40
%

(200)
bp

(184)
bp


---

Cost
of sales consists primarily of ticketing royalties, as well as compensation and other employee-related costs (including stock-based compensation) for personnel engaged in call
center functions and credit card processing fees. Ticketing royalties relate to our client's share of convenience and order processing charges. In our Artist Services segment, merchandise inventory,
related shipping costs and costs associated with VIP ticket packages are recorded as cost of sales.

Cost
of sales in 2008 increased $161.4 million from 2007, primarily due to increases of $18.3 million in ticketing royalties resulting from higher revenue and higher
royalty rates, $39.2 million in compensation and other employee-related costs associated, in part, with a 7% increase in headcount (or 3% decrease excluding recent acquisitions) and
$5.7 million in credit card processing fees. Included in these increases was the impact of acquisitions not in the prior year period, which contributed $3.0 million,
$25.0 million, $7.5 million and $57.7 million to ticketing royalties, compensation and other

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employee-related
costs, credit card processing fees and other variable costs, respectively. Other variable costs include merchandise costs and express delivery and shipping costs. Excluding the impact
of acquisitions not in the prior year period, cost of sales increased $68.1 million, or 9%.

Cost
of sales in 2007 increased $129.4 million from 2006, primarily due to increases of $65.8 million in ticketing royalties, $20.1 million in compensation and other
employee-related costs associated, in part, with a 12% increase in headcount, and $16.6 million increase in credit card processing fees which resulted from an increase in ticket volume
processed online. The increase in ticketing royalties was primarily due to increased revenue and higher royalty rates. Royalties are driven in part by higher contractual royalty rates included in the
renewal of contracts with various promoters and venue clients, and are usually based on a percentage of convenience and processing revenues. Cost of sales in 2006 was favorably impacted by
non-recurring items. Domestic and international ticketing royalties are expected to continue to increase as a percentage of convenience and processing revenues.

Selling and marketing expense

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Selling and marketing expense

$
102,631

$
43,487

$
20,123


136
%

116
%As a percentage of total revenue


7
%

4
%

2
%

355
bp

161
bp


Selling
and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for
personnel engaged in customer service and sales functions. Advertising and promotional expenditures primarily include online marketing, including fees paid to search engines and distribution partners,
as well as offline marketing, including sports sponsorship marketing and radio spending.

Selling
and marketing expense in 2008 increased $59.1 million from 2007, primarily due to increased advertising and promotional expenditures of $47.8 million and increased
compensation and other employee-related costs of $8.6 million as Ticketmaster Entertainment continued to build out its worldwide infrastructure. These increases included the impact of
acquisitions in 2008, which contributed $25.9 million and $6.4 million to advertising and promotional expenditures and compensation and other employee-related costs, respectively. The
increase in advertising and promotional expenditures was due, in part, to an increase in sports sponsorship agreements intended to promote Ticketmaster Entertainment's ticket resale services and fees
paid to search engine partners for online marketing. Excluding the impact of acquisitions not in the prior year period, selling and marketing expense increased $25.3 million, or 58%.

Selling
and marketing expense in 2007 increased $23.4 million from 2006, primarily due to increased advertising and promotional expenditures of $17.4 million and increased
compensation and other employee-related costs of $5.9 million associated, in part, with a 31% increase in headcount. The increase in advertising and promotional expenditures includes
$6.3 million in expenses related to sports sponsorship agreements, primarily with National Football League teams that were not incurred in the prior year period and online marketing, including
fees paid to search engines and distribution partners. Sports sponsorship agreements are intended to promote Ticketmaster Entertainment's ticket resale services.

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Table of Contents

General and administrative expense

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)General and administrative expense

$
190,054

$
149,478

$
118,317


27
%

26
%As a percentage of total revenue


13
%

12
%

11
%

102
bp

92
bp


General
and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax,
human resources and executive management functions, facilities costs and fees for professional services.

General
and administrative expense in 2008 increased $40.6 million from 2007, primarily due to increases of $27.4 million in compensation and other employee-related costs,
$4.3 million in facilities costs and $3.2 million in professional fees. The increase in compensation and other employee-related costs was primarily due to an increase of
$16.2 million associated with acquisitions not in the prior year period. Excluding the impact of acquisitions not in the prior year period, general and administrative expense increased
$10.4 million, or 7%. This increase was driven by higher severance costs incurred in connection with the previously announced cost reduction plan, public company costs incurred subsequent to
the spin-off and increased non-cash compensation expense. General and administrative expense includes non-cash compensation expense of $21.2 million in 2008
compared with $10.9 million in 2007. The increase in non-cash compensation was primarily due the modification of existing stock-based compensation awards, new awards granted in
connection with the spin-off and the grants of awards in connection with 2008 acquisitions.

General
and administrative expense in 2007 increased $31.2 million from 2006, primarily due to increases of $8.7 million relating to settlement of litigation (in excess of
prior reserves) compared to the prior year period which included a reduction of $5.8 million in certain litigation reserves due to more favorable settlements than previous reserves reflected.
Also contributing to the increase in general and administrative expense was an increase of $9.7 million in compensation and other employee-related costs as Ticketmaster Entertainment continued
to build out its worldwide infrastructure, as well as increases of $2.1 million and $1.0 million in facilities costs and utilities expense, respectively.

Effective
January 1, 2006, Ticketmaster Entertainment adopted Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), Share-Based Payment("SFAS No. 123R"), using the modified
prospective transition method. There was no impact to the amount of stock-based
compensation recorded in the consolidated statement of operations for the years ended December 31,
2006 and 2005 as a result of adopting SFAS No. 123R. Ticketmaster Entertainment has been recognizing expense for all stock-based grants since it became wholly owned by IAC on January 17,
2003, in accordance with SFAS No. 123,Accounting for Stock-Based Compensation. The majority of stock-based compensation expense is reflected in
general and administrative expense.

Depreciation

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Depreciation

$
49,894

$
38,458

$
35,080


30
%

10
%As a percentage of total revenue


3
%

3
%

3
%

33
bp

(20)
bp


Depreciation
in 2008 and 2007 increased $11.4 million and $3.4 million, respectively, primarily due to various acquisitions not in the prior year period and the incremental
depreciation associated with capital expenditures made during 2007 and 2008, partially offset by certain fixed assets becoming fully

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depreciated
during the period. Excluding the impact of acquisitions made in 2008, depreciation expense in 2008 increased $4.1 million, or 11%.

Goodwill impairment

During the fourth quarter of 2008, the Company recognized a non-cash, pre-tax charge of $1,094.1 million
related to the impairment of goodwill in its Ticketing segment. The impairment, which was indicated by our 2008 annual impairment testing of goodwill, reflected the decline in the Company's share
price since its spin-off from IAC in August 2008 and recent uncertain economic conditions. No impairment charge was recorded for the years ended December 31, 2007 and 2006.

Adjusted Operating Income

Adjusted Operating Income is a non-GAAP measure and is defined in "Ticketmaster Entertainment's Principles of Financial
Reporting," below.

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Adjusted Operating Income:Ticketing

$
312,949

$
356,125

$
340,121


(12
)%

5
%Artist services


16,985








NM


Corporate and unallocated


(72,252
)

(62,579
)

(45,202
)

15
%

38
%Total Adjusted Operating Income

$
257,682

$
293,546

$
294,919


(12
)%

(1
)%


Adjusted
Operating Income in 2008 decreased $35.9 million from 2007, primarily due to increases in cost of sales, selling and marketing expense and general and administrative
expense. The increase in these expenses was driven by acquisitions and increased losses associated with strategic investments, particularly in Germany and Asia and higher overall royalty rates.
Excluding the impact of acquisitions not in the prior year period, Adjusted Operating Income decreased $67.9 million, or 23%.

Adjusted
Operating Income in 2007 decreased $1.4 million from 2006, primarily due to increases in cost of sales, general and administrative expense and selling and marketing
expense. The increase in these expenses was driven by higher overall royalty rates, international development and expansion, and increased marketing efforts, including ticket resale initiatives.
Adjusted Operating Income was negatively impacted by a payment of $8.7 million in settlement of litigation compared to the prior year
period which included a reduction of $5.8 million in certain litigation reserves and the favorable resolution of claims and insurance settlements of $4.3 million.

Operating income

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Operating (loss) income:Ticketing

$
(872,083
)
$
290,070

$
279,272


NM


4
%Artist services


7,642








NM


Corporate and unallocated


(89,702
)

(73,754
)

(54,381
)

22
%

36
%Total Operating (loss) income

$
(954,143
)
$
216,316

$
224,891


NM


(4
)%


Operating
loss in 2008 decreased $1,170.5 million from 2007 operating income, primarily due to the decrease in Adjusted Operating Income described above and increases of
$1,094.1 million in

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goodwill
impairment, $17.9 million in amortization of intangibles and $11.2 million in non-cash compensation expense. Excluding the impact of acquisitions not in the prior
year period, operating income decreased $1,162.8 million.

Operating
income in 2007 decreased $8.6 million from 2006, primarily due to the decrease in Adjusted Operating Income described above and a $4.7 million increase in
non-cash compensation expense, partially offset by a decrease in amortization of intangibles.

Corporate and unallocated expenses

Corporate and unallocated expenses in 2008, 2007 and 2006 were $89.7 million, $73.8 million and $54.4 million,
respectively. Corporate and unallocated expenses in 2008 increased $15.9 million from 2007. This increase was driven by higher severance costs incurred in connection with the previously
announced cost reduction plan, public company costs incurred subsequent to the spin-off, and increased non-cash compensation expense.

Corporate
and unallocated expenses in 2007 increased $19.4 million from 2006 primarily due to increases of $8.7 million in certain litigation reserves in the current year
period compared to the prior year period which included a reduction of $5.8 million in certain litigation reserves and the favorable resolution of claims and insurance settlements of
$4.3 million.

Other income (expense), net

% ChangeYears ended December 31,2008 vs. 2007

2007 vs. 20062008

2007

2006(Dollars in thousands)Other income (expense), net:Interest income (expense), net

$
(25,290
)
$
32,062

$
33,680


NM


(5
)%Equity in income of unconsolidated affiliates


2,659


6,301


2,997


(58
)%

110
%Impairment of long-term investments


(12,334
)







NM


Other income


4,914


1,120


982


339
%

14
%


Interest income (expense), net

The majority of the interest income recorded in our Consolidated Statements of Operations for the years ended December 31, 2008
and 2007 arose from intercompany receivables due from IAC and its subsidiaries. The interest income from IAC ceased upon the extinguishment of all intercompany receivables upon consummation of the
spin-off.

Interest
expense, net in 2008 increased $57.4 million from 2007, primarily due to interest expense and amortization of debt issuance costs of $28.1 million related to the
issuance of the $300.0 million
aggregate principal amount of Senior Notes with a fixed rate of 10.75% (the "Notes") and the indebtedness under our senior secured credit facilities. Interest income in 2008 decreased
$27.5 million primarily due to lower receivable balances due from IAC and subsidiaries and the extinguishment of intercompany receivables from IAC upon consummation of the spin-off,
lower average interest rates, and an adjustment of $8.3 million related to a cumulative true-up of intercompany interest income recorded during the second quarter of 2008.

Interest
income (expense) net in 2007 decreased $1.6 million from 2006, primarily due to lower receivable balances due from IAC and its subsidiaries, partially offset by interest
earned on higher average international operating cash balances in 2007. Interest earned on the receivable balance was principally due to cash transfers to IAC in connection with IAC's centrally
managed U.S. treasury function.

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Equity in income of unconsolidated affiliates

Equity in income of unconsolidated affiliates in 2008 decreased $3.6 million from 2007 due to lower income earned from
Ticketmaster Entertainment's investments in Front Line and TM Mexico as well as losses in other equity investments. Income related to the investment in Front Line was recorded on an equity method of
accounting prior to October 29, 2008.

Equity
in the income of unconsolidated affiliates in 2007 increased $3.3 million from 2006, primarily due to Ticketmaster Entertainment's investments in TM Mexico.

Impairment of long-term Investments

During the fourth quarter of 2008, the Company recorded $12.3 million of charges related to its equity investments in the
venture which handled ticketing at the 2008 Beijing Olympics (the "China investment") and its iLike.com investment. The $6.5 million charge for the China investment included a settlement of
disputed items with the Company's joint venture partners. The $5.8 million charge for the iLike.com investment wrote down the investment to its estimated fair value. No such charges were
recorded for the years ended December 31, 2007 and 2006.

Other income

Other income in 2008 increased $3.8 million from 2007 due to gains on foreign currency exchange primarily related to the
Company's operating activities in Canada and the United Kingdom due to the strengthening of the U.S. dollar compared to the Canadian Dollar and the British Pound. Other income remained relatively flat
in 2007, as compared to 2006.

Income tax provision

In 2008, Ticketmaster Entertainment recorded an income tax provision of $25.6 million which represents an effective tax rate of
-3%. The 2008 tax rate is different from the statutory rate of 35% principally due to the impairment of goodwill that is not deductible for tax purposes. Excluding the impairment charges
recorded in the fourth quarter of 2008, the Company's effective tax rate would have been 42%. This rate is higher than the statutory rate of 35% principally due to losses not benefited in foreign
jurisdictions and state taxes, partially offset by foreign income taxed at lower rates and foreign tax credits. In 2007, Ticketmaster Entertainment recorded an income tax provision of
$89.0 million which represents an effective tax rate of 35%. The 2007 tax rate approximates the federal statutory rate of 35% as state and local income taxes and losses not benefited in foreign
jurisdictions were substantially offset by foreign income taxed at lower rates. In 2006, Ticketmaster Entertainment recorded a tax provision of $86.0 million which represents an effective tax
rate of 33%. The 2006 tax rate was lower than the federal statutory rate of 35% due principally to benefits associated with Ticketmaster Entertainment's assertion that the earnings of certain foreign
subsidiaries are permanently reinvested and foreign income taxed at lower rates, partially offset by state and local income taxes and losses not benefited in foreign jurisdictions.

Ticketmaster
Entertainment adopted the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48,Accounting for Uncertainty in
Income Taxesan interpretation of FASB Statement No. 109("FIN 48") effective January 1, 2007. As of December 31, 2008 and
December 31, 2007, Ticketmaster Entertainment had unrecognized tax benefits of approximately $1.7 million and $6.3 million, respectively, which included accrued interest of
$0.4 million and $0.8 million, respectively.

By
virtue of previously filed separate company and consolidated tax returns with IAC, Ticketmaster Entertainment is routinely under audit by federal, state, local and foreign authorities
in the area of income tax. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts
considered

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sufficient
to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between
the reserves for tax contingencies and the amounts owed by Ticketmaster Entertainment are recorded in the period they become known.

The
IRS is currently examining the IAC consolidated tax returns for the years ended December 31, 2001 through 2003, which include the operations of Ticketmaster Entertainment from
January 17, 2003, the date on which Ticketmaster Entertainment joined the IAC consolidated tax return. The statute of limitations for these years has been extended to December 31, 2009.
In early 2009, the IRS commenced an audit of IAC's tax returns for the years ended December 31, 2004 through 2006. The statue of limitations for these years has been extended and this
examination is expected to be completed in 2011. Various IAC consolidated state and local jurisdictions are currently under examination, the most significant of which are California, Florida, New York
and New York City, for various tax years after December 31, 2001. Ticketmaster Entertainment's operations were included in these returns from January 17, 2003. These examinations are
expected to be completed by late 2009. Ticketmaster Entertainment believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.0 million within
twelve months of the current reporting date due to settlements and expirations of applicable statute of limitations. An estimate of other changes in unrecognized tax benefits cannot be made, but such
other changes are not expected to be significant.

Segment Operating Results

In the fourth quarter of 2008, we began reporting two segments: Ticketing and Artist Services. Our primary operating metric for
evaluating segment performance is Adjusted Operating Income.

The
overall concept that Ticketmaster Entertainment employs in determining its operating segments is to present the financial information in a manner consistent with how our chief
operating decision maker and executive management manages our business, make operating decisions and evaluate operating performance. Operating segments are consolidated for reporting purposes if they
have similar economic characteristics and meet the aggregation criteria of SFAS No. 131,Disclosures about Segments of an Enterprise and Related
Information.

Prior
to the acquisition of a controlling interest in Front Line, Ticketmaster Entertainment had one operating segment in accordance with its internal management structure and based upon
how the chief operating decision maker and executive management viewed the business, its organizational structure and the type of service provided which primarily was online and offline ticketing
services.

After
the October 29, 2008 acquisition of Front Line, based upon changes in the internal management structure and how the chief operating decision makers and executive management
viewed the business, the Company began reporting two segments: Ticketing and Artist Services.

The
Ticketing segment is primarily an agency business that sells tickets for events on behalf of our clients and retains a convenience charge and order processing fee for our services.
We sell tickets through a combination of websites, telephone services and ticket outlets.

The
Artist Services segment primarily provides management services to music recording artists in exchange for a commission on the earnings of these artists. Artist Services also sells
merchandise associated with musical artists at live musical performances, to retailers, and directly to consumers via a website.

For
additional information about our segment results, refer to Note 7Segment Information of the Notes to the Consolidated Financial Statements.

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LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2008, Ticketmaster Entertainment had $466.1 million of cash and cash equivalents and marketable
securities, including $254.0 million in funds representing amounts equal to the face value of tickets sold on behalf of its clients ("client funds"). Ticketmaster Entertainment's cash and cash
equivalents and marketable securities held in foreign jurisdictions were approximately $302.8 million at December 31, 2008, including $169.7 million in client funds, which was
maintained principally in Canada, the United Kingdom and Australia. The Company does not utilize client funds for its own financing or investing activities as the amounts are payable to clients.

In
the fourth quarter of 2008, the Company effectuated a restructuring of its international operations in response to changes in its operating environment that followed the
spin-off from IAC. The restructuring resulted in an internal redistribution of debt, including the deemed repatriation of foreign profits by virtue of a $99.1 million note issued by
a foreign subsidiary to a domestic subsidiary of the Company, $34.3 million of which was repaid in 2008. The tax consequences of the deemed repatriation have all been recognized in 2008 and are
discussed in further detail in Note 8Income Taxes of the Notes to the Consolidated Financial Statements. The Company can generally control the timing of repayment on the remaining
$64.8 million note balance held in the U.S., and such repayments will not have any additional tax consequences.

Net
cash provided by operating activities was $195.2 million and $212.0 million for 2008 and 2007, respectively. The decrease of $16.8 million in net cash provided
by operating activities reflected lower contributions from client funds of $95.3 million which was driven by the timing of settlements with clients, partially offset by lower advance payments
under ticketing contracts and sponsorship deals with resale partners, including significant advances made in 2007 which were not repeated in 2008.

Net
cash used in investing activities in 2008 of $1,475.9 million primarily resulted from cash transfers to IAC of $910.1 million and acquisitions, net of cash acquired, of
$506.6 million. The cash transfers to IAC were comprised of total net proceeds from the Notes and the senior secured credit facilities, and were distributed to IAC in connection with the
spin-off, as well as other proceeds paid to IAC as part of their centrally managed U.S. treasury function. Acquisitions, net of cash acquired, primarily related to the acquisitions of
TicketsNow, Paciolan, GET ME IN! and Front Line. Net cash used in investing activities in 2007 of $13.0 million primarily resulted from $47.5 million of capital expenditures and
$29.4 million of acquisitions, net of cash acquired, partially offset by cash transfers from IAC of $64.5 million.

Net
cash provided by financing activities in 2008 of $1,232.7 million was primarily due to $300.0 million of proceeds received from the issuance of the Notes and
$565 million of proceeds received from borrowings under the senior secured credit facilities. The Company incurred $27.2 million of costs for these debt financings which were initiated
in connection with the spin-off. In addition, we received $405.5 million in capital contributions from IAC during 2008. Net cash provided by financing activities in 2007 of
$30.3 million was primarily due to capital contributions from IAC.

As
of December 31, 2007, Ticketmaster Entertainment had $569.3 million of cash and cash equivalents and restricted cash and cash equivalents, including
$313.6 million in funds representing amounts equal to the face value of tickets sold on behalf of its clients. Ticketmaster Entertainment's cash and cash equivalents and restricted cash and
cash equivalents held in foreign jurisdictions was approximately $358.2 million at December 31, 2007, including $222.5 million in funds representing amounts equal to the face
value of tickets sold on behalf of its clients, and was maintained principally in the United Kingdom, Australia and Canada.

Net
cash provided by operating activities was $212.0 million and $230.7 million in 2007 and 2006, respectively. The decrease of $18.7 million in net cash provided by
operating activities reflects an

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increase
in contract deposits and accounts receivable, partially offset by an increased contribution from client funds of $69.5 million which was primarily due to timing of settlements with
clients.

Net
cash used in investing activities in 2007 of $13.0 million primarily resulted from capital expenditures of $47.5 million and acquisitions, net of cash acquired, of
$29.4 million, partially offset by cash transfers from IAC of $64.5 million. The cash transfers from IAC related to IAC's centrally managed U.S. treasury function. Net cash used in
investing activities in 2006 of $189.1 million primarily resulted from cash transfers to IAC of $214.2 million, capital expenditures of $39.3 million, a net increase in
long-term investments of $20.6 million and acquisitions, net of cash acquired, of $17.8 million. These uses of cash were partially offset by the net proceeds of
$108.9 million related to the purchases, sales and maturities of marketable securities. The increase in long-term investments in 2006 was primarily due to Ticketmaster
Entertainment's equity investment in iLike.com.

Net
cash provided by financing activities in 2007 and 2006 of $30.3 million and $20.6 million, respectively, was primarily due to capital contributions of
$29.4 million and $17.8 million from IAC to fund Ticketmaster Entertainment's 2007 and 2006 acquisitions, respectively.

Ticketmaster
Entertainment anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its operations. Ticketmaster
Entertainment's ability to fund its cash and capital needs will be affected by its ongoing ability to generate cash from operations and the overall capacity and terms of its financing arrangements as
discussed above. Ticketmaster Entertainment believes that its cash on hand along with its anticipated operating cash flow in 2009 and its access to financing arrangements are sufficient to fund its
operating needs, capital, investing and other commitments and contingencies for the foreseeable future.

Under
the senior secured credit facilities and the indenture governing the Notes, the Company is required to maintain certain financial covenants. The Notes contain two incurrence-based
financial covenants, requiring that the Company meet a minimum fixed charge coverage ratio, as defined therein, of 2.0 to 1.0 and a maximum secured leverage ratio, as defined, of 2.25 to 1.0. The
senior secured credit facility has two maintenance-based quarterly financial covenants, requiring a maximum total leverage ratio of 3.5 to 1.0 and a minimum interest coverage ratio of 3.0 to 1.0. The
total leverage ratio for the senior secured credit facilities, calculated as total debt, as defined, divided by total earnings before interest, taxes, depreciation and amortization ("EBITDA"), as
defined therein, for the trailing twelve-month period is the most sensitive to change, as debt levels increase and/or earnings decline. As of December 31, 2008, the Company was in compliance
with all of these financial covenants, giving pro-forma effect, as required, to EBITDA for Front Line.

The
Company believes it has adequate cash and cash equivalents and it will generate sufficient cash from operations to pay-down a portion of its debt, if required, in order
to maintain compliance with all financial covenants through December 31, 2009. Ticketmaster Entertainment may, from time to time, engage in open market purchases of its Notes.

In
the event that the proposed merger is consummated, we expect that our cost of capital related to our bank financing will increase as a result of obtaining the necessary amendments to
our senior secured credit facilities required for the proposed merger.

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CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Payments Due by PeriodContractual Obligations

Total

Less Than
1 Year

1-3 Years

3-5 Years

More Than
5 Years(In thousands)Long term debt obligations(a)

$
1,302,384

$
69,337

$
151,503

$
340,791

$
740,753Capital lease obligations


2,738


1,848


890





Purchase obligations(b)


110,346


33,400


48,645


16,125


12,176Estimated earn-outs related to prior acquisitions(c)


8,000


1,500


6,500





Operating leases


107,322


25,507


36,893


20,823


24,099Total contractual cash obligations(d)

$
1,530,790

$
131,592

$
244,431

$
377,739

$
777,028


---

At
December 31, 2008, we had gross unrecognized tax benefits of approximately $1.7 million, all of which, if recognized, would have an impact on our effective tax rate.

Ticketmaster
Entertainment also has funding commitments that could potentially require its performance in the event of demands by third parties or contingent events, such as under
letters of credit extended or under guarantees of debt, as follows (in thousands):

Amount of Commitment Expiration Per PeriodOther Commercial Commitments*

Total
Amounts
Committed

Less Than
1 year

1-3 years

3-5 years

More Than
5 yearsGuarantees, surety bonds and letters of credit

$
5,603

$
1,743

$
3,460

$
400

$



---

Off-Balance Sheet Arrangements

Other than the contractual obligations and other commercial commitments described above, Ticketmaster Entertainment does not have any
off-balance sheet arrangements as of December 31, 2008.

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Seasonality

Ticketmaster Entertainment's ticketing sales are impacted by fluctuations in the availability of events for sale to the public, which
may vary depending upon scheduling by its clients. Generally, the second and third quarters of the year experience the highest domestic ticketing
revenue, earned primarily in the concert and sports categories. Generally, international revenues are the highest revenues in the fourth quarter of the year, earned primarily in the concert category.

Critical Accounting Policies and Estimates

Certain of the Company's significant accounting policies are summarized below. Also refer to Note 2Summary of
Significant Accounting Policies of the Notes to the Consolidated Financial Statements.

Ticketmaster
Entertainment's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with U.S.
generally accepted accounting principles ("GAAP"). These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the
date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

Significant
estimates underlying the accompanying consolidated financial statements include: the recoverability of contract advances; the recoverability of long-lived assets;
the recovery of goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; and assumptions related to the
determination of stock-based compensation.

Recent Accounting Pronouncements

Refer to Note 2Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements for
a description of recent accounting pronouncements.

Revenue Recognition

We evaluate the recognition of revenue based on the criteria set forth in Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements, as revised by
SAB No. 104,Revenue Recognition.The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue
realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured.
Determining whether some or all of these criteria have been met involves assumptions and judgments, including the evaluation of multiple element arrangements that can have an effect on the timing and
amount of revenue the Company reports.

Gross versus Net Revenue Recognition

The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or
agent in the transaction. To the extent the Company acts as the principal in a transaction, revenues are reported on a gross basis. In concluding on whether or not the Company acts as a principal or
an agent, the guidance set forth by the Emerging Issues Task Force No. 99-19,Reporting Revenue Gross as a Principal versus Net as an
Agentis followed. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company has the
substantial risks and rewards of ownership under the terms of an arrangement.

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Ticketing

Revenue, which primarily consists of convenience and order processing fees from ticketing operations, is recognized as tickets are
sold, and is recorded on a net basis (net of the face value of the ticket) as Ticketmaster Entertainment acts as an agent in these transactions. Interest income is earned on funds that are collected
from ticket purchasers and invested until remittance to the applicable clients. As the process of collecting, holding and remitting these funds is a critical component of providing service to these
clients, the interest earned on these funds is included in revenue. For the years ended December 31, 2008, 2007 and 2006, $16.2 million, $18.7 million and $15.3 million,
respectively, of interest income is included in revenue. Sales taxes collected are not included in revenue.

Artist Services

Front Line secures work for the clients it represents, for which it receives a commission. Generally, commissions are payable by
clients upon their receipt of payments for performance of services or upon the delivery or use of materials which they created. Revenue is recognized in the month of the artist event. Contingent
commissions, such as those based on profits or gross receipts, are recorded upon determination of the amounts. Revenue is not recognized before persuasive evidence of an arrangement exists, services
have been rendered, the amount to be received is fixed or determinable, and collectability is reasonably assured.

Front
Line also earns revenue from the sales of entertainment packages to consumers in connection with live performances. Entertainment packages are sold and cash is received from
consumers in advance of the event. Revenue and related expenses incurred are deferred until the event occurs. In addition, Front Line sells merchandise associated with musical artists at live musical
performances, to retailers, and directly to consumers via a website. For retail and internet sales, revenue is recognized upon shipment of the merchandise. Touring revenue, including the sale of
merchandise, is recognized in the month of the event.

Accounts Receivable

Accounts receivable, client accounts are due principally from ticketing outlets and credit card processors and represent the face value
of tickets sold plus convenience and order processing fees, generally net of outlet commissions.

Accounts
receivable, trade includes amounts relating to artist management, merchandising, advertising, and software licensing sales and are stated at amounts due, net of an allowance for
doubtful accounts. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Ticketmaster Entertainment determines its allowance for doubtful accounts by
considering a number of factors, including the length of time accounts receivable are past due, Ticketmaster Entertainment's previous loss history, the specific customer's current ability to pay its
obligation to Ticketmaster Entertainment and the condition of the general economy and the customer's industry. Ticketmaster Entertainment writes off accounts receivable when they become uncollectible.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess purchase price of an acquired entity over the fair value of the net tangible and intangible assets
acquired. Indefinite-lived intangible assets acquired in business combination are initially recorded at management's estimate of their fair values. The Company accounts for goodwill and
indefinite-lived intangible assets in accordance with SFAS No. 142,Goodwill and Other Intangible Assets("SFAS No. 142"), which among
other things, addresses, financial accounting and reporting requirements for acquired goodwill and indefinite-lived intangible assets.

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SFAS
No. 142 prohibits the amortization of goodwill and requires the Company to test goodwill and indefinite-lived intangible assets for impairment at least annually at the reporting unit
level.

Goodwill
impairment is determined using a two-step process. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount,
including goodwill. In performing the first step, the Company determines the fair value of a reporting unit using the income approach which measures the value of an asset or equity interest in a
business by analyzing the present worth of the economic benefits utilizing a discounted cash flow ("DCF") analysis. In addition, when a DCF analysis is used as the primary method for determining fair
value, the Company assesses the reasonableness of its determined fair values by reference to the Company's market capitalization which is determined by taking a representative average of the stock
closing price immediately prior to the testing date multiplied by the number of shares outstanding.

If
the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not required. If
the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test
compares the implied fair value of the reporting unit's goodwill with its goodwill carrying amount to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in
the same manner as the amount of goodwill recognized in a business combination. In other words, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that
unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the
carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

The
impairment test for other intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the
carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

In
accordance with SFAS No. 142, Ticketmaster Entertainment tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes
in circumstances indicate that the assets might be impaired.

Impairment of goodwill and other intangible assets

Ticketmaster Entertainment assesses goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if
events or changes in circumstances indicate that the assets might be impaired in accordance with SFAS No. 142. Events or circumstances which could trigger impairment review include, but are not
limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant
changes in the manner of the Company's use of the acquired assets or the strategy for the acquired business or the Company's overall business, significant negative industry or economic trends, or
significant underperformance relative to expected historical or projected future results of operations.

The
Company performs its annual assessment for impairment of goodwill and indefinite-lived intangible assets annually on October 1.

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The analysis of potential impairment of goodwill requires a two-step process. The first step is the estimation of fair
value of the applicable reporting units. Reporting units are defined as operating segments or one level below an operating segment when that component constitutes a business for which discrete
financial information is available and segment management regularly reviews the operating results of that component. The Company has identified two reporting units in the Ticketing segment (ticketing
and Echo Music) and three reporting units in the Artist Services segment (artist management, VIP ticketing and merchandising). The Company did not perform impairment tests for the reporting units in
the Artist Services segment given the proximity of the controlling interest acquisition to the impairment testing date. In addition, the fair values determined as part of the step-up
purchase accounting indicated no impairment of historical goodwill.

In
performing the first step, the Company determines the fair value of a reporting unit using the income approach which measures the value of an asset or equity interest in a business by
analyzing the present worth of the economic benefits utilizing a DCF analysis. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount
rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable
company earnings multiples for the market-based approach. The cash flows employed in the DCF analyses were based on the Company's most recent budgets and business plans and various growth rates have
been assumed for years beyond the current business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.
The discount rate utilized by the Company reflected a weighted average cost of capital for a market participant. The calculation utilized seven years of projected cash flows with forecasted sales
growths ranging from -5.7% to 12.5% with a terminal growth rate of 3%. The discount rates utilized in the DCF analyses for the step one tests were 12% with a 9% rate for the terminal
value.

In
addition, when a DCF analysis is used as the primary method for determining fair value, the Company assesses the reasonableness of its determined fair values by reference to the
Company's market capitalization which is determined by taking a representative average of the stock closing prices immediately prior to the testing date multiplied by the number of shares outstanding
plus a reasonable control premium. The Company also considered the market approach which evaluates market transactions involving similarly situated companies, however this approach was not considered
meaningful in the final evaluation because of the lack of comparability between the reporting unit and guideline public companies.

The
results of this step one process indicated that there was a potential impairment of goodwill as the book values exceeded their respective estimated fair values. As a result, the
second step of the goodwill impairment test was performed. Step two of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with its goodwill carrying amount
to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination.

As
a result of our annual impairment test the Company recorded a non-cash charge of $1.1 billion in the fourth quarter of 2008 in the ticketing and Echo Music
reporting units. An increase of 100 basis points in the discount rate for the ticketing reporting unit would have resulted in an additional impairment charge of $126.3 million, and a decrease
of 100 basis points in the discount rate for the ticketing reporting unit would have resulted in a $158.3 million reduction in the impairment charge. A 100 basis point increase in the terminal
growth rate would have resulted in a $86.3 million reduction in the impairment charge and a 100 basis point decrease in the terminal growth rate would have resulted in a $69.0 million
increase in the impairment charge. We believe the assumptions and rates used in our impairment assessment are reasonable, but they involve management judgments, and variations in any

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assumptions
could result in a materially different calculation of the impairment amount. There was no impairment recorded for the years ended December 31, 2007 and 2006.

Continued
significant declines in the Company's stock price from the testing date to December 31, 2008, and global economic conditions combined with lower than expected fourth
quarter ticketing results
caused management to conclude that a triggering event under SFAS No. 142 had occurred during the fourth quarter of 2008. The Company's stock price experienced a decline of over 40% since the
October 1 assessment.

The
Company performed another test of the ticketing reporting unit as of December 31, 2008. We updated our DCF for the ticketing reporting unit and increased the discount rate
from 12% to 15.5% based on increased risk due to current economic volatility experienced during the fourth quarter of 2008. The fair value utilizing the DCF model was reasonable when compared to the
market capitalization at the end of the year plus a reasonable control premium. Because the fair value of the assets exceeded the carrying value, there was no indication of further impairment, and a
step two test under SFAS 142 was not required.

Long-Lived Assets and Intangible Assets with Definite Lives

In accordance with SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived
Assets, long-lived assets, including property and equipment and intangible assets with definite lives, are tested for recoverability whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. Events or circumstances that may indicate that an asset is impaired include, but are not limited to, significant decreases in
the market value of an asset, significant underperformance relative to expected historical or projected future operating results, a change in the extent or manner in which an asset is used, shifts in
technology, loss of key personnel, significant negative industry or economic trends, changes in the Company's operating model or strategy, and competitive forces. The carrying amount of a
long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is
deemed to not be recoverable, an impairment loss is recorded as the amount by which the carrying amount of the long-lived asset exceeds its fair value. Amortization of definite lived
intangible assets is recorded either on a straight-line basis or an accelerated basis over their estimated lives.

In
connection with its annual assessment in 2008, the Company identified and recorded an impairment charge of $0.6 million for the write-off of a covenant not to
compete related to Ticketmaster Entertainment's operations in Germany. The intangible asset impairment charge is included in the amortization of intangible assets in the accompanying Consolidated
Statements of Operations. There was no definite lived intangible asset impairment recorded for the years ended December 31, 2007 and 2006.

Long-Term Investments

Ticketmaster Entertainment applies the provisions of Accounting Principles Board No. 18,The Equity
Method of Accounting for Investments in Common Stockfor accounting for its investments in common stock. Investments in which Ticketmaster Entertainment has the ability to
exercise significant influence over the operating and financial matters of the investee are accounted for using the equity method. Investments in which Ticketmaster Entertainment does not have the
ability to exercise significant influence over the operating and financial matters of the investee are accounted for using the cost method. Ticketmaster Entertainment evaluates each equity and cost
method investment for impairment on a quarterly basis and recognizes an impairment loss if a decline in value is determined to be other-than-temporary. If Ticketmaster
Entertainment has not identified events or changes in circumstances that may have a significant adverse effect on the fair value of a cost investment, then the fair value of such cost method
investment is not estimated, as it is impracticable to do so.

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Contract Advances

Contract advances, which can be either recoupable or non-recoupable, represent amounts paid in advance to Ticketmaster
Entertainment's clients pursuant to ticketing agreements that provide for the client's participation in the convenience charges and/or order processing fees. Recoupable contract advances are generally
recoupable against future royalties earned by the clients based on the contract terms over the life of the contract (generally 3 to 7 years). Non-recoupable contract advances are
fixed additional incentives which are normally amortized over the life of the contract on a straight-line basis (generally 3 to 7 years). Recoupment of contract advances and
amortization of non-recoupable contract advances are included in cost of sales in the accompanying Consolidated Statements of Operations.

Accounts Payable, Client Accounts

Accounts payable, client accounts consists of contractual amounts due to clients for tickets sold on behalf of the organizations that
sponsor events and ticketing royalties, which arise from the client's share of convenience and order processing charges.

Deferred Revenue

Deferred revenue primarily consists of unredeemed gift cards issued by the Company. Upon the purchase of a gift card, deferred revenue
is established for the cash value of the gift card. Deferred revenue is relieved and net revenue is recorded upon redemption by the customer or the expiration of the gift card, if applicable. Over
time, some portion of the gift cards issued without expiration dates are not redeemed. This amount is recorded as revenue when it can be determined that the likelihood of the gift card being redeemed
is remote and there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions. We determine the probability of the gift cards being redeemed to be remote based on historical
gift card redemption patterns. Income from gift card revenue, net of any amounts subject to escheat laws, is included in revenue in the accompanying Consolidated Statements of Operations.

Income Taxes

Ticketmaster Entertainment accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax
assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. Ticketmaster Entertainment records interest on potential tax contingencies as a component
of income tax expense and records interest net of any applicable related income tax benefit.

Effective
January 1, 2007, Ticketmaster Entertainment adopted the provisions of FIN 48. As a result of the adoption of FIN 48, Ticketmaster Entertainment recognizes
liabilities for uncertain tax positions based on the two-step process prescribed by the interpretation. The first step is to evaluate the tax position for recognition by determining if the
weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related
appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period, net of
shares subject to repurchase rights, and excludes any dilutive effects of options or warrants, restricted stock, restricted stock units, and convertible securities,

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if
any. Diluted net income (loss) per share is computed using the weighted-average number of common stock and common stock equivalent shares outstanding (including the effect of restricted stock)
during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

TICKETMASTER ENTERTAINMENT'S PRINCIPLES OF FINANCIAL REPORTING

Ticketmaster Entertainment reports Adjusted Operating Income as a supplemental measure to 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 non-GAAP 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 and non-GAAP measure which are discussed below.

Definition of Ticketmaster Entertainment's Non-GAAP Measure

Adjusted Operating Income is defined as operating income excluding, if applicable: (1) depreciation expense
(2) non-cash compensation expense (3) amortization and impairment of intangibles, (4) goodwill impairment, (5) pro forma adjustments for significant
acquisitions, 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 non-cash expenses. Adjusted Operating Income 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
non-GAAP 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 non-GAAP measure.

Pro Forma Results

Ticketmaster Entertainment will only present Adjusted Operating Income 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 Operating Income 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 Expenses That Are Excluded From Ticketmaster Entertainment's Non-GAAP Measure

Non-cash 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. Upon vesting of restricted stock and restricted stock units and the exercise of certain stock options, the awards will be settled, at

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Ticketmaster
Entertainment's discretion, on a net basis, with Ticketmaster Entertainment remitting the required tax withholding amount from its current funds.

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.

RECONCILIATION OF ADJUSTED OPERATING INCOME

For a reconciliation of Adjusted Operating Income to net income for the years ended December 31, 2008, 2007 and 2006, see
Note 7Segment Information of the Notes to the Consolidated Financial Statements.

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Market Risk Management

Market risk is the potential loss from adverse changes in interest rates, foreign exchange rates and market prices. Our exposure to
market risk includes our Notes, our revolving credit facility, derivative instruments, cash and cash equivalents, merchant accounts payable and deferred merchant bookings denominated in foreign
currencies. We manage our exposure to these risks through established policies and procedures. Our objective is to mitigate potential income statement, cash flow and market exposures from changes in
interest and foreign exchange rates.

Interest Rate Risk

In July 2008, we issued $300.0 million aggregate principal amount of Notes with a fixed rate of 10.75%. As a result, if market
rates decline, our required payments will exceed those based on market rates. The fair value of our Notes was approximately $162.0 million as of December 31, 2008 based on the quoted
market price. A 50 basis point increase or decrease in interest rates would decrease or increase the fair value of our Notes by approximately $3.3 million.

Also,
in July 2008, we entered into new $650.0 million senior secured credit facilities consisting of a $100.0 million Term Loan A with a maturity of five years, a
$350.0 million Term Loan B with a maturity of six years and a $200.0 million revolving credit facility (the "Revolver") with a maturity of five years. The interest rate per annum
applicable to loans under the senior secured credit facilities are, at Ticketmaster Entertainment's option, equal to either a base rate or a LIBOR rate plus an applicable margin, which in the case of
the Term Loan A and the Revolver will vary with the total leverage ratio of Ticketmaster Entertainment (except that the applicable margin with respect to the Term Loan A and borrowings under the
Revolver is fixed at 2.75% per annum for LIBOR loans under Term Loan A and 2.25% per annum for LIBOR loans under the Revolver, and 1.75% per annum for base rate loans under Term Loan A and 1.25% per
annum for base rate loans under the Revolver until Ticketmaster Entertainment delivers financial statements for the quarter ending December 31, 2008). The applicable margin for the Term Loan B
is 3.25% per annum for LIBOR loans and 2.25% per annum for base rate loans. The base rate means the greater of (i) the prime rate as quoted from time to time by JPMorgan Chase Bank, N.A. or
(ii) the Federal Funds rate plus 0.5%. As a result, we may be susceptible to fluctuations in interest rates since we do not hedge the interest rate exposure arising from any borrowings under
our senior secured credit facilities. As of December 31, 2008, our outstanding borrowing under the revolving credit facility was $115 million. Assuming a 100 basis point change in the
interest rate under our senior secured credit facilities, our annual interest expense would change by approximately $5.7 million.

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Foreign Currency Exchange Risk

Ticketmaster Entertainment conducts business in certain foreign markets, primarily in the European Union and Canada. Ticketmaster
Entertainment's primary exposure to foreign currency risk relates to the Company's investments in foreign subsidiaries that transact business in a functional currency other than the U.S. Dollar,
primarily the Euro, British Pound Sterling and Canadian Dollar. However, the exposure is mitigated as Ticketmaster Entertainment has generally reinvested profits from its international operations in
order to fund the growth of its international operations including through acquisitions. Ticketmaster Entertainment is also exposed to foreign currency risk related to its assets and liabilities
denominated in a currency other than the functional currency.

As
currency exchange rates change, translation of the income statements of Ticketmaster Entertainment's international businesses into U.S. dollars affects
year-over-year comparability of operating results. Historically, Ticketmaster Entertainment has not hedged translation risks because cash flows from international operations
have been generally reinvested locally. However, the Company periodically reviews its strategy for hedging transaction risks. The Company's objective in managing its foreign exchange risk is to
minimize its potential exposure to the changes that exchange rates might have on the Company's earnings, cash flows and financial position. A hypothetical 10% adverse change in overall foreign
currency exchange rates over an entire year would result in a reduction of reported revenue of approximately $45.9 million and a reduction of reported loss before income taxes of approximately
$6.7 million. Excluding the impact of impairment charges, a hypothetical 10% adverse change in foreign currency exchange rates would result in a reduction of reported loss before income taxes
of approximately $7.6 million. These estimates assume an adverse shift in all foreign currency exchange rates, which do not always move in the same direction, and actual results may differ
materially.

During
the fourth quarter of 2008, Ticketmaster Entertainment's entered into foreign currency forward exchange contracts which were used to mitigate the risk of changes in foreign
currency exchange rates on short-term intercompany loans payable to certain international subsidiaries. As of December 31, 2008, the Company had foreign currency forward exchange
contracts outstanding with nominal amounts of AUD 16.5 million. Foreign exchange net gains for the years ended December 31, 2008, 2007 and 2006 were $4.9 million,
$1.1 million and $1.2 million, respectively.

As
Ticketmaster Entertainment increases its operations in international markets it becomes increasingly exposed to potentially volatile movements in currency exchange rates. The economic
impact of currency
exchange rate movements on Ticketmaster Entertainment is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material,
could cause Ticketmaster Entertainment to adjust its financing, operating and hedging strategies.

Item 8.Consolidated Financial Statements and Supplementary Data

Our consolidated financial statements and supplementary data are included at the end of this report, beginning on
page F-1.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A(T).Controls and Procedures

The Company monitors and evaluates on an ongoing basis its disclosure controls in order to improve its overall effectiveness. In the
course of this evaluation, the Company modifies and refines its internal processes as conditions warrant.

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As
required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), our management, including our chief executive officer and our
chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined by
Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our chief executive officer and chief financial officer concluded that as of the end of
the period covered by this report, our disclosure controls and procedures were effective in providing reasonable assurance that information we are required to disclose in our filings with the SEC
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and include controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and
principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

We
are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 by the end of our fiscal year ending December 31, 2009. The notification of such compliance is
due no later than the time we file our annual report for the fiscal year ending December 31, 2009. We believe we are devoting adequate resources and expertise, both internal and external, in
order to meet this requirement. However, there is no guarantee that our efforts will result in management's ability to conclude, or our independent registered public accounting firm to attest, that
our internal control over financial reporting is effective as of December 31, 2009.

As
required by Rule 13a-15(d) under the Exchange Act, we, under the supervision and with the participation of our management, including the Chief Executive Officer and
Chief Financial Officer, also evaluated whether any changes occurred to our internal control over financial reporting during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, such control. Based on that evaluation, there has been no such change during the period covered by this report.

This
annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's independent
registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Item 9B.Other Information

None.

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PART III

Item 10.Directors, Executive Officers and Corporate Governance

The information regarding directors, executive officers, the Company's Audit Committee and Section 16(a) beneficial ownership
reporting compliance is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal
year ended December 31, 2008.

We
have a Code of Business Conduct and Ethics, which is applicable to all of our directors, officers and employees. The Code of Business Conduct and Ethics is available on our Investor
Relations Web
site (http://investors.ticketmaster.com). We intend to post any amendments to or waivers from our Code of Business Conduct and Ethics applicable to our chief executive officer, principal financial
officer or principal accounting officer at this location on our Web site.

Item 11.Executive Compensation

Information for this item is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and
Exchange Commission within 120 days after the close of our fiscal year ended December 31, 2008.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information for this item is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and
Exchange Commission within 120 days after the close of our fiscal year ended December 31, 2008.

Item 13.Certain Relationships and Related Transactions, and Director Independence

Information for this item is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and
Exchange Commission within 120 days after the close of our fiscal year ended December 31, 2008.

Item 14.Principal Accountant Fees and Services

Information for this item is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and
Exchange Commission within 120 days after the close of our fiscal year ended December 31, 2008.

PART IV

Item 15.Exhibits and Financial Statement Schedule

(a)(1) Consolidated Financial Statements

The
financial statements listed in the Index to Consolidated Financial Statements on page F-1 are filed as part of this Form 10-K.

(a)(2)
Financial Statement Schedule

Schedule IIValuation
and Qualifying Accounts

All
other financial statement schedules are either included in the Notes to Consolidated Financial Statements or are omitted because they are not applicable.

(a)(3)
Exhibits

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Exhibit

Description2.1

Agreement and Plan of Merger, dated as of February 10, 2009, by and among Ticketmaster Entertainment Inc., Live Nation, Inc. and, from and after its accession to the Agreement, Merger Sub (incorporated by
reference to Ticketmaster Entertainment's Form 8-K, filed February 13, 2009)3.1

Amended and Restated Certificate of Incorporation of Ticketmaster Entertainment, Inc. (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)3.2

Certificate of Ownership and Merger Merging Ticketmaster Merger Corporation into Ticketmaster (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed November 4, 2008)3.3

Amended and Restated By-laws of Ticketmaster Entertainment (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)4.1

Certificate of Designation for Series A Convertible Preferred Stock of Ticketmaster Entertainment Inc. (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed November 4,
2008)10.1

Separation and Distribution Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. (incorporated by
reference to Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.2

Tax Sharing Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. (incorporated by reference to
Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.3

Transition Services Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. (incorporated by reference to
Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.4

Employee Matters Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. (incorporated by reference to
Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.5

Registration Rights Agreement, dated as of August 20, 2008, among Ticketmaster, Liberty Media Corporation and Liberty USA Holdings, LLC. (incorporated by reference to Ticketmaster Entertainment's
Form 8-K, filed August 25, 2008)10.6

Spinco Agreement, dated as of May 13, 2008, between IAC/InterActiveCorp, Liberty Media Corporation, LMC Silver King, Inc., Liberty HSN II, Inc., LMC USA VIII, Inc., LMC USA IX,
 Inc., LMC USA XI, Inc., LMC USA XII, Inc., LMC USA XIII, Inc., LMC USA XIV, Inc., LMC USA XV, Inc., Liberty Tweety, Inc., BDTV Inc., BDTV II Inc., BDTV III Inc.,
BDTV IV Inc. and Barry Diller (filed as Exhibit 10.1 to IAC/InterActiveCorp's Current Report on Form 8-K (SEC File No. 0-20570) dated May 16, 2008 and incorporated herein by reference)10.7

Spinco Assignment and Assumption Agreement, dated as of August 20, 2008, among IAC/InterActiveCorp, Ticketmaster, Liberty Media Corporation and Liberty USA Holdings, LLC. (incorporated by reference to
Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.8

Employment Agreement between IAC/InterActiveCorp and Sean Moriarty, dated as of August 5, 2008 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on From S-1/A, filed August 8,
2008)


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Exhibit

Description10.9

Employment Agreement between Ticketmaster L.L.C. and Edward J. Weiss, effective as of January 1, 2008 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on Form S-1, filed
August 1, 2008)10.10

Employment Agreement between Ticketmaster L.L.C. and Eric Korman, effective as of April 10, 2006 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on Form 10-12B/A, filed
June 26, 2008)10.11

Letter Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of July 31, 2006 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.12

Letter Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of February 6, 2006 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.13

Letter Agreement between Ticketmaster L.L.C. and Ticketmaster Group Limited Partnership, dated as of October 17, 2005 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.14

Letter Agreement between Ticketmaster L.L.C. and Ticketmaster Group Limited Partnership, dated as of March 21, 2002 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.15

Letter Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of February 7, 2001 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.16

Amendment to License Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of August 31, 1999 (incorporated by reference to Ticketmaster Entertainment's Registration
Statement on Form 10-12B/A, filed June 26, 2008)10.17

Letter Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of July 28, 1997 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.18

Consent and Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of January 5, 1996 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.19

License Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership, dated as of May 23, 1991 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on
Form 10-12B/A, filed June 26, 2008)10.20

Ticketmaster 2008 Stock and Annual Incentive Plan (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.21

Employment Agreement between Brian Regan and Ticketmaster L.L.C., dated as of May 19, 2008 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on Form 10-12B/A, filed
June 26, 2008)10.22

Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Ticketmaster Entertainment's Registration Statement on Form S-1, filed August 1, 2008)


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Exhibit

Description10.23

Credit Agreement among Ticketmaster, as Borrower, Certain Subsidiaries of the Borrower, as Guarantors, The Lenders Party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, dated as of
July 25, 2008 (incorporated by reference to Ticketmaster Entertainment's Registration Statement on Form S-1/A, filed August 8, 2008)10.24

Indenture, dated as of July 28, 2008, among Ticketmaster, as Issuer, the Guarantors identified therein, and The Bank of New York Mellon, as Trustee (incorporated by reference to Ticketmaster Entertainment's
Registration Statement on Form S-1, filed August 1, 2008)10.25

First Supplemental Indenture, dated as of August 20, 2008, to the Indenture, dated as of July 28, 2008, among Ticketmaster, as Issuer, the Guarantors identified therein and The Bank of New York Mellon, as
Trustee (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed August 25, 2008)10.26

Agreement and Plan of Merger among Ticketmaster, V.I.P. Merger Sub Inc., The V.I.P. Tour Company, TNSH, LLC, and certain stockholders of The V.I.P. Tour Company, dated January 11, 2008 (incorporated by
reference to Ticketmaster Entertainment's Registration Statement on Form S-1, filed August 1, 2008)10.27

Stockholder Agreement, dated as of February 10, 2009, by and among Live Nation, Inc., Liberty Media Corporation, Liberty USA Holdings, LLC and Ticketmaster Entertainment, Inc. (incorporated by
reference to Ticketmaster' Entertainment's Form 8-K, filed February 13, 2009)10.28

Stock Purchase Agreement, dated as of October 22, 2008, by and among FLMG Holdings Corp., MM Investment Inc. and WMG Church Street Limited (incorporated by reference to Ticketmaster Entertainment's
Form 8-K filed October 28, 2008)10.29

Employment Agreement, dated as of October 22, 2008, by and among Irving Azoff, Ticketmaster Entertainment Inc., and for certain purposes, the Azoff Family Trust of 1997 (incorporated by reference to
Ticketmaster Entertainment's Form 8-K, filed November 4, 2008)10.30

Employment Agreement, dated as of May 11, 2007, by and between Front Line Management Group, Inc. and Irving Azoff (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed
November 4, 2008)10.31

Restricted Stock Award Agreement, dated as of June 8, 2007, by and between Front Line Management Group, Inc. and Irving Azoff (incorporated by reference to Ticketmaster Entertainment's Form 8-K, filed
November 4, 2008)10.32

Amended and Restated Stockholders' Agreement of Front Line Management Group, Inc., dated as of June 9, 2008, by and among Front Line Management Group, Inc., FLMG Holdings Corp., for certain purposes
IAC/ InterActiveCorp, The Azoff Family Trust of 1997, MM Investment Inc., WMG Church Street Limited, Madison Square Garden, L.P. and the other parties named therein (incorporated by reference to Ticketmaster Entertainment's Form 8-K,
filed November 4, 2008)10.33

Employment Agreement dated as of December 9, 2004, between Ticketmaster L.L.C. and Chris Riley (incorporated by reference to Ticketmaster Entertainment's Form 10-Q for the Quarterly Period ended
September 30, 2008)10.34

Amendment No. 1 dated as of January 4, 2008, to Employment Agreement between Ticketmaster L.L.C. and Chris Riley (incorporated by reference to Ticketmaster Entertainment's Form 10-Q for the Quarterly
Period ended September 30, 2008)


61

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Table of Contents

Exhibit

Description21.1

Subsidiaries of Ticketmaster Entertainment, Inc.31.1

CEO Certification Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 200231.2

CFO Certification Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 200232.1

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


---

Unless
otherwise noted, exhibits are filed herewith.

62

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Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

TICKETMASTER ENTERTAINMENT, INC.(Registrant)Date: March 31, 2009

By:

/s/ IRVING L. AZOFF Irving L. Azoff Chief Executive Officer


Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant on March 30, 2009 in
the capacities indicated.

Signature

Title/s/ IRVING L. AZOFF Irving L. Azoff

Chief Executive Officer & Director
(Principal Executive Officer)/s/ BRIAN REGAN Brian Regan

Executive Vice President & Chief Financial Officer
(Principal Financial & Accounting Officer)/s/ BARRY DILLER Barry Diller

Chairman & Director/s/ TERRY BARNES Terry Barnes

Director/s/ MARK CARLETON Mark Carleton

Director/s/ BRIAN DEEVY Brian Deevy

Director/s/ JONATHAN DOLGEN Jonathan Dolgen

Director/s/ DIANE IRVINE Diane Irvine

Director/s/ CRAIG JACOBSON Craig Jacobson

Director/s/ VICTOR KAUFMAN Victor Kaufman

Director/s/ MICHAEL LEITNER Michael Leitner

DirectorJon Miller

Director


63

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PAGEAudited Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm

F-2Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006

F-3Consolidated Balance Sheets as of December 31, 2008 and 2007

F-4Consolidated Statements of Redeemable Preferred Stock and Stockholders' Equity for the years ended December 31, 2008,
2007 and 2006

F-5Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006

F-6Notes to Consolidated Financial Statements

F-7Schedule IIValuation and Qualifying Accounts

F-63


F-1

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Table of Contents

Report of Independent Registered Public Accounting Firm

The
Board of Directors and Stockholders of
Ticketmaster Entertainment, Inc.

We
have audited the accompanying consolidated balance sheets of Ticketmaster Entertainment, Inc. (the "Company," as described in Note 1) as of December 31, 2008 and
2007, and the related consolidated statements of operations, redeemable preferred stock and stockholders' equity, and cash flows for each of the three years in the period ended December 31,
2008. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal controls over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ticketmaster Entertainment, Inc. at
December 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S.
generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.



Los
Angeles, California
March 27, 2009

F-2

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Table of Contents



TICKETMASTER ENTERTAINMENT, INC.        CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,2008

2007

2006(In thousands, except per share data)Revenue

$
1,438,282

$
1,221,798

$
1,047,380Interest on funds held for clients


16,243


18,679


15,292Total revenue


1,454,525


1,240,477


1,062,672Cost of sales (exclusive of depreciation shown separately below)


927,889


766,538


637,152Gross profit


526,636


473,939


425,520Selling and marketing expense


102,631


43,487


20,123General and administrative expense


190,054


149,478


118,317Amortization of intangibles


44,109


26,200


27,109Depreciation


49,894


38,458


35,080Goodwill impairment


1,094,091





Operating (loss) income


(954,143
)

216,316


224,891Other income (expense):Interest (expense) income, net


(25,290
)

32,062


33,680Equity in income of unconsolidated affiliates


2,659


6,301


2,997Impairment of long-term investments


(12,334
)




Other income


4,914


1,120


982Total other (expense) income, net


(30,051
)

39,483


37,659(Loss) earnings before income taxes and minority interest


(984,194
)

255,799


262,550Income tax provision


(25,627
)

(89,007
)

(85,967
)Minority interests in losses of consolidated subsidiaries


4,322


2,559


118Net (loss) income

$
(1,005,499
)
$
169,351

$
176,701Net (loss) earnings per share available to common stockholders:Basic and diluted

$
(17.84
)
$
3.01

$
3.15Weighted average number of common and common equivalent stock outstanding:Basic and diluted


56,353


56,171


56,171


The
accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-3

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Table of Contents



TICKETMASTER ENTERTAINMENT, INC.        CONSOLIDATED BALANCE SHEETS

December 31,
2008

December 31,
2007(In thousands, except
per share data)ASSETSCash and cash equivalents

$
464,618

$
568,417Restricted cash





853Marketable securities


1,495


Accounts receivable, client accounts


70,121


99,453Accounts receivable, trade, net of allowance of $3,662 and $2,346, respectively


46,459


33,979Deferred income taxes


14,038


5,883Contract advances


44,927


63,126Prepaid expenses and other current assets


37,758


21,149Total current assets


679,416


792,860Property and equipment, net


111,291


95,122Goodwill


455,751


1,090,418Intangible assets, net


330,061


92,325Long-term investments


17,487


149,295Other non-current assets


112,561


86,514TOTAL ASSETS

$
1,706,567

$
2,306,534LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITYLIABILITIES:Accounts payable, client accounts

$
324,164

$
413,075Accounts payable, trade


29,251


14,698Accrued compensation and benefits


39,683


31,171Deferred revenue


33,244


19,829Income taxes payable


7,522


1,721Other accrued expenses and current liabilities


82,435


42,449Total current liabilities


516,299


522,943Long term debt


865,000


Income taxes payable


1,680


982Other long-term liabilities


10,286


3,204Deferred income taxes


67,300


32,416Minority interests


69,544


7,812Commitments and contingenciesREDEEMABLE PREFERRED STOCK:Series A convertible redeemable preferred stock, $0.01 par value, 25,000 authorized, 1,750 non-vested shares issued and outstanding at December 31,
2008 and no shares authorized, issued and outstanding at December 31, 2007


9,888


STOCKHOLDERS' EQUITY:Common stock, $0.01 par value, 300,000 shares authorized at December 31, 2008; 57,213 shares issued and outstanding


572


Invested capital





2,172,497Additional paid-in capital


1,236,130


Receivables from IAC and subsidiaries





(474,110
)Accumulated deficit


(1,058,758
)

Accumulated other comprehensive (loss) income


(11,374
)

40,790Total stockholders' equity


166,570


1,739,177TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

$
1,706,567

$
2,306,534


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-4

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Stockholders' EquityRedeemable
Preferred Stock
$0.01 Par Value

Common Stock
$0.01 Par ValueReceivables
from IAC
and
Subsidiaries

Accumulated
Other
Comprehensive
IncomeInvested
Capital

Additional
Paid-in
Capital

Retained
DeficitAmount

Shares

Amount

Shares

Total(in thousands)Balance as of December 31, 2005

$





$





$
1,681,651

$


$


$
(329,601
)
$
995

$
1,353,045Comprehensive income:Net income for the year ended December 31, 2006














176,701














176,701Foreign currency translation


























21,993


21,993Comprehensive income





























198,694Net transfers from IAC (principally funding for acquisitions reduced by the transfer of an investment to IAC)














16,358














16,358Net change in receivables from IAC and subsidiaries























(210,260
)




(210,260
)Balance as of December 31, 2006

$





$





$
1,874,710

$


$


$
(539,861
)
$
22,988

$
1,357,837Comprehensive income:Net income for the year ended December 31, 2007














169,351














169,351Foreign currency translation


























17,802


17,802Comprehensive income





























187,153Cumulative effect of adoption of FIN 48














1,344














1,344Net transfers from IAC (principally the transfer of an investment to Ticketmaster Entertainment, Inc. and funding for acquisitions)














127,092














127,092Net change in receivables from IAC and subsidiaries























65,751





65,751Balance as of December 31, 2007

$





$





$
2,172,497

$


$


$
(474,110
)
$
40,790

$
1,739,177Comprehensive loss:Net income prior to the spin-off














53,259














53,259Net loss after the spin-off




















(1,058,758
)







(1,058,758
)Foreign currency translation


























(52,164
)

(52,164
)Comprehensive loss





























(1,057,663
)Distributions to and contributions from IAC, net of extinguishment of intercompany amounts














(1,012,960
)







474,110





(538,850
)Capitalization as a result of the spin-off from IAC














(1,212,796
)

1,212,796











Issuance of common stock at spin-off








562


56,210





(562
)










Adjustment of deferred RSU liability to fair value

















826











826Issuance of common stock upon exercise of stock options











3





50











50Stock awards related to Front Line acquisition








10


1,000





13,158











13,168Redeemable preferred stock


8,848


1,750











(8,848
)










(8,848
)Stock-based compensation


1,040














18,710











18,710Balance as of December 31, 2008

$
9,888


1,750

$
572


57,213

$


$
1,236,130

$
(1,058,758
)
$


$
(11,374
)
$
166,570


The
accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-5

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Table of Contents



TICKETMASTER ENTERTAINMENT, INC.        CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,2008

2007

2006(In thousands)Cash flows from operating activities:Net (loss) income

$
(1,005,499
)
$
169,351

$
176,701Adjustments to reconcile net (loss) income to net cash provided by operating activities:Amortization of intangibles


44,109


26,200


27,109Depreciation


49,894


38,458


35,080Goodwill impairment


1,094,091





Impairment of long-term investments


12,334





Amortization of debt issuance costs


1,697





Provision for doubtful accounts


2,409


464


757Stock-based compensation expense


23,731


12,572


7,839Deferred income taxes


(32,247
)

(11,210
)

(10,205
)Equity in income of unconsolidated affiliates, net of dividends


953


1,035


(1,997
)Excess tax benefits from stock-based awards


(55
)

(3,029
)

(2,738
)Minority interests in losses of consolidated subsidiaries


(4,322
)

(2,559
)

(118
)Changes in current assets and liabilities, excluding acquisition effects:Accounts receivable


3,694


(10,878
)

(3,415
)Prepaid expenses and other current assets


3,266


(77,559
)

(667
)Accounts payable and other current liabilities


4,678


(9,645
)

(7,506
)Income taxes payable


12,199


4,110


4,958Deferred revenue


7,209


2,038


1,974Funds collected on behalf of clients, net


(23,198
)

72,093


2,593Other, net


245


526


311Net cash provided by operating activities


195,188


211,967


230,676Cash flows from investing activities:Transfers (to) from IAC


(910,088
)

64,548


(214,186
)Cash paid for acquisitions, net of cash acquired


(506,602
)

(29,423
)

(17,844
)Purchases of property and equipment


(50,838
)

(47,521
)

(39,288
)Purchases of marketable securities


(7,634
)




(37,841
)Proceeds from sales and maturities of marketable securities


5,043





146,708Cash paid for long-term investments


(5,830
)

(630
)

(20,638
)Other, net








(5,977
)Net cash used in investing activities


(1,475,949
)

(13,026
)

(189,066
)Cash flows from financing activities:Capital contributions from IAC


405,498


29,423


17,844Proceeds from the issuance of long-term debt


300,000





Proceeds from bank borrowings


565,000





Principal payments on long-term obligations


(2,101
)

(2,175
)

(21
)Payment of deferred financing costs


(27,169
)




Purchase of minority interest


(764
)




Distributions to minority interest


(7,830
)




Excess tax benefits from equity awards


55


3,029


2,738Other, net


50





Net cash provided by financing activities


1,232,739


30,277


20,561Effect of exchange rate changes on cash and cash equivalents


(55,777
)

21,622


17,576Net (decrease) increase in cash and cash equivalents


(103,799
)

250,840


79,747Cash and cash equivalents at beginning of year


568,417


317,577


237,830Cash and cash equivalents at end of year

$
464,618

$
568,417

$
317,577


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-6

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

Ticketmaster Entertainment Inc., a Delaware corporation, ("Ticketmaster Entertainment," "we," "our," "us" or the "Company")
consists of Ticketmaster and Front Line Management Group, Inc. ("Front Line"). Ticketmaster Entertainment operates in 20 global markets, providing ticket sales, ticket resale services,
marketing and distribution throughwww.ticketmaster.com, numerous retail outlets and worldwide call centers. Established in 1976, Ticketmaster
Entertainment serves 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. Ticketmaster Entertainment acquired a controlling interest in Front Line in October 2008. Founded by Irving Azoff and Howard Kaufman in 2004,
Front Line is an artist management company.

Spin-off from IAC/InterActiveCorp

On July 1, 2008, the Board of Directors of IAC/InterActiveCorp ("IAC"), approved a plan to separate IAC into five separate,
publicly traded companies via the distribution of all
of the outstanding shares of common stock of four wholly-owned subsidiaries, including Ticketmaster Entertainment (the "Spincos").

On
August 20, 2008, IAC distributed to its stockholders all of the outstanding shares of common stock, par value $0.01 per share, of Ticketmaster Entertainment (the
"spin-off"). Ticketmaster Entertainment's businesses include the businesses that formerly comprised IAC's Ticketmaster segment (which, at the time of spin-off, included IAC's
domestic and international ticketing and ticketing related businesses, subsidiaries and investments, and excluded Ticketmaster Entertainment's Reserve America subsidiary and its investment in
Active.com) Ticketmaster Entertainment also includes IAC's minority investment in Front Line. On October 29, 2008, the Company acquired an additional equity interests in Front Line, giving
Ticketmaster Entertainment a controlling interest in Front Line. Refer to Note 3Business Acquisitions.

Upon
completion of the spin-off (and for a short period prior to that, on a "when issued" basis), Ticketmaster Entertainment shares began trading on The Nasdaq Stock
Market, Inc. ("NASDAQ") under the symbol "TKTM." In conjunction with the spin-off, Ticketmaster Entertainment completed the following transactions: (1) extinguished all
intercompany receivable balances due from IAC and its subsidiaries, which totaled $604.4 million by recording a non-cash distribution to IAC, (2) recapitalized the invested
equity balance with common stock, whereby holders of IAC stock received one fifth of a share of Ticketmaster Entertainment common stock for each share of common and class B common stock IAC
held as described in our Post Effective Amendment No. 1 to Form S-1 (Commission File Number 333-152702) filed with the Securities and Exchange Commission
("SEC") on August 20, 2008, and (3) distributed $752.9 million in cash to IAC in connection with Ticketmaster Entertainment's separation from IAC, which included the net proceeds
of $723.6 million from our financings through a combination of privately issued debt securities and bank borrowings. Refer to Note 9Long Term Debt.

Basis of Presentation

These consolidated financial statements present our results of operations, financial position, redeemable preferred stock and
stockholders' equity, comprehensive income, and cash flows, on a combined basis through the spin-off on August 20, 2008, and on a consolidated basis thereafter. Our

F-7

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION (Continued)

pre
spin-off financial statements were prepared on a combined basis, rather than a consolidated basis because they excluded Reserve America and the investment in Active.com that were
owned, and included the investment in Front Line that was not owned by Ticketmaster Entertainment prior to the spin-off by legal entities that comprise Ticketmaster Entertainment
businesses.

Ticketmaster
Entertainment's investment in Front Line was consolidated beginning October 29, 2008, when the Company increased its ownership interest from 39.4% to 82.3%. Prior to
October 29, 2008, the investment in Front Line was accounted for using the equity method of accounting. The ownership of Reserve America and the investment in Active.com were retained by IAC
after the spin-off. These consolidated financial statements present IAC's and its subsidiaries net investment in the Ticketmaster Entertainment businesses as invested capital in lieu of
stockholders' equity. Intercompany transactions and accounts have been eliminated.

We
prepared the consolidated financial statements from the historical results of operations and historical basis of the assets and liabilities of Ticketmaster Entertainment with the
exception of income taxes. We computed income taxes using our stand-alone tax rate. Our income tax payable as well as deferred tax assets and liabilities represent the estimated impact of filing a
consolidated income tax return with IAC through the spin-off, and filing a stand-alone consolidated income tax return thereafter.

Until
the spin-off, we recorded expense allocations from IAC, which consisted of certain IAC general corporate overhead expenses, based on the ratio of our revenue as a
percentage of IAC's total revenue. The general corporate overhead allocations primarily included expenses relating to accounting, treasury, legal, tax, corporate support, human resource functions and
internal audit. Since the spin-off, we have been performing these functions using our own resources or purchased services, including services purchased from IAC pursuant to the
transitional services agreement among IAC and Ticketmaster Entertainment.

The
historical financial statements are based on certain assumptions about Ticketmaster Entertainment as a stand-alone company. Our management believes the assumptions underlying the
historical consolidated financial statements of Ticketmaster Entertainment are reasonable. However, this financial information does not necessarily reflect what the historical financial position,
results of operations and cash flows of Ticketmaster Entertainment would have been if Ticketmaster Entertainment had been a stand-alone company during the periods presented.

Reclassifications

Certain amounts in the prior years' consolidated financial statements and notes have been revised to conform to the
current-year presentation.

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the
United States. Ticketmaster Entertainment consolidates all entities that we control by ownership of a majority voting interest as well as certain variable interest entities for which our Company is
the primary beneficiary.

F-8

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We
use the equity method to account for our investments for which we have the ability to exercise significant influence over operating and financial policies. Consolidated net income
includes our Company's proportionate share of the net income or net loss of these companies.

We
use the cost method to account for our investments in companies that we do not control and for which we do not have the ability to exercise significant influence over operating and
financial policies. In accordance with the cost method, these investments are recorded at cost or fair value, as appropriate.

We
eliminate from our financial results all significant intercompany transactions, including the intercompany transactions with variable interest entities and the intercompany portion of
transactions with equity method investees.

Revenue Recognition

We evaluate the recognition of revenue based on the criteria set forth in Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements, as revised by SAB No. 104,Revenue Recognition.The
Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has
occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Determining whether some or all of these criteria have been met involves assumptions and judgments,
including the evaluation of multiple element arrangements that can have an effect on the timing and amount of revenue the Company reports.

Gross versus Net Revenue Recognition

The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or
agent in the transaction. To the extent the Company acts as the principal in a transaction, revenues are reported on a gross basis. In concluding on whether or not the Company acts as a principal or
an agent, the guidance set forth by the Emerging Issues Task Force ("EITF") No. 99-19,Reporting Revenue Gross as a Principal versus Net as an
Agent("EITF 99-19") is followed. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of
whether the Company has the substantial risks and rewards of ownership under the terms of an arrangement.

Ticketing

Revenue, which primarily consists of convenience and order processing fees from ticketing operations, is recognized as tickets are
sold, and is recorded on a net basis (net of the face value of the ticket) as Ticketmaster Entertainment acts as an agent in these transactions. Interest income is earned on funds that are collected
from ticket purchasers and invested until remittance to the applicable clients. As the process of collecting, holding and remitting these funds is a critical component of providing service to these
clients, the interest earned on these funds is included in revenue. For the years ended December 31, 2008, 2007 and 2006, $16.2 million, $18.7 million and
$15.3 million, respectively, of interest income is included in revenue. Sales taxes collected are not included in revenue.

F-9

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Artist Services

Front Line secures work for the clients it represents, for which it receives a commission. Generally, commissions are payable by
clients upon their receipt of payments for performance of services or upon the delivery or use of materials which they created. Revenue is recognized in the month of the artist event. Contingent
commissions, such as those based on profits or gross receipts, are recorded upon determination of the amounts. Revenue is not recognized before persuasive evidence of an arrangement exists, services
have been rendered, the amount to be received is fixed or determinable, and collectability is reasonably assured.

Front
Line also earns revenue from the sales of entertainment packages to consumers in connection with live performances. Entertainment packages are sold and cash is received from
consumers in advance of the event. Revenue and related expenses incurred are deferred until the event occurs. In addition, Front Line sells merchandise associated with musical artists at live musical
performances, to retailers, and directly to consumers via a website. For retail and internet sales, revenue is recognized upon shipment of the merchandise. Touring revenue, including the sale of
merchandise, is recognized in the month of the event.

Cost of Sales (exclusive of depreciation)

In our Ticketing segment, costs associated with processing and delivering ticketing orders to customers are recorded as cost of sales.
In our Artist Services segment, merchandise inventory, related shipping costs and costs associated with VIP ticket packages are recorded as cost of sales.

Cash and Cash Equivalents

Cash and cash equivalents include cash, money market instruments and time deposits with maturities of less than 91 days. Cash
and cash equivalents include $254.0 million and $313.6 million at December 31, 2008 and 2007, respectively, of collected proceeds relating to the face value of the tickets, which
are payable to clients and reflected as accounts payable, client accounts. Cash and cash equivalents held in international territories totaled $301.3 million and $358.2 million at
December 31, 2008 and 2007, respectively.

Restricted Cash

There was no restricted cash at December 31, 2008. Restricted cash at December 31, 2007 represents amounts held in escrow
by the Company's international operations in Spain.

Marketable Securities

At times, Ticketmaster Entertainment invests in marketable securities and accounts for them in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 115,Accounting for Certain Investments in Debt and Equity Securities. Marketable securities totaled
approximately $1.5 million at December 31, 2008. The Company did not hold any marketable securities at December 31, 2007. Ticketmaster Entertainment only invests in marketable
securities with active secondary or resale markets to ensure portfolio liquidity and the ability to readily convert investments into cash to fund current operations, or satisfy other cash requirements
as needed. Marketable securities are, when held, classified as available-for-sale and reported at fair value based on quoted market prices.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable

Accounts receivable, client accounts are due principally from ticketing outlets and credit card processors and represent the face value
of tickets sold plus convenience and order processing fees, generally net of outlet commissions.

Accounts
receivable, trade include amounts relating to artist management, merchandising, advertising, and software licensing sales and are stated at amounts due, net of an allowance for
doubtful accounts. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Ticketmaster Entertainment determines its allowance for doubtful accounts by
considering a number of factors, including the length of time accounts receivable are past due, Ticketmaster Entertainment's previous loss history, the specific customer's current ability to pay its
obligation to Ticketmaster Entertainment and the condition of the general economy and the customer's industry. Ticketmaster Entertainment writes off accounts receivable when they become uncollectible.

Inventories

Inventories are valued at lower of cost or net realizable market value. Cost is determined using the first-in,
first-out method. At December 31, 2008, Front Line merchandise inventory of $1.8 million was included in prepaid expenses and other current assets.

Property and Equipment

Property and equipment, including significant improvements, are recorded at cost. Any gains or losses on dispositions are included in
operations.

Depreciation
is recorded on a straight-line basis to allocate the cost of depreciable assets to operations over their estimated service lives.

Asset Category

Depreciation PeriodComputer equipment and capitalized software

1 to 5 YearsFurniture and other equipment

5 to 7 YearsBuildings and leasehold improvements

3 to 40 Years


Leasehold
improvements are amortized using the straight-line method over the shorter of the economic useful life or the remaining lease term. Expenditures for maintenance and
repairs are charged to operations as incurred, whereas expenditures for renewal and improvements are capitalized.

In
accordance with American Institute of Certified Public Accountants' Statement of Position No. 98-1,Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use, Ticketmaster Entertainment capitalizes certain qualified costs incurred in connection with the development of internal use
software. Capitalization of internal use software costs begins when the preliminary project stage is completed, management with the relevant authority authorizes and commits to the funding of the
software project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized internal use software is depreciated on a
straight-line basis over the estimated useful life of the software, not to exceed three years. Capitalized internal software costs, net of accumulated depreciation, totaled
$33.9 million and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

$26.7 million
at December 31, 2008 and 2007, respectively, and are included in "Property and equipment, net" in the accompanying consolidated balance sheets.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess purchase price of an acquired entity over the fair value of the net tangible and intangible assets
acquired. Indefinite-lived intangible assets acquired in business combination are initially recorded at management's estimate of their fair values. The Company accounts for goodwill and
indefinite-lived intangible assets in accordance with SFAS No. 142, which among other things, addresses, financial accounting and reporting requirements for acquired goodwill and
indefinite-lived intangible assets. SFAS No. 142 prohibits the amortization of goodwill and requires the Company to test goodwill and indefinite-lived intangible assets for impairment at least
annually at the reporting unit level. The Company has identified two reporting units in the Ticketing segment (ticketing and Echo Music) and three reporting units in the Artist Services segment
(artist management, VIP ticketing and merchandising).

Goodwill
impairment is determined using a two-step process. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount,
including goodwill. In performing the first step, the Company determined the fair value of a reporting unit using the income approach which measures the value of an asset or equity interest in a
business by analyzing the present worth of the economic benefits utilizing a discounted cash flow ("DCF") analysis. In addition, when a DCF analysis is used as the primary method for determining fair
value, the Company assesses the reasonableness of its determined fair values by reference to the Company's market capitalization which is determined by taking a representative average of the closing
stock price immediately prior to the testing date multiplied by the number of shares outstanding as well as other market considerations.

If
the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not required. If
the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test
compares the implied fair value of the reporting unit's goodwill with its goodwill carrying amount to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in
the same manner as the amount of goodwill recognized in a business combination. In other words, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that
unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the
carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

The
impairment test for other intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the
carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. In our case, the Ticketmaster trade name is the only intangible asset
not subject to amortization. The estimates of fair value of the trade name was determined using the "relief from royalty" DCF valuation analysis. The "relief from royalty" method is based on the
principle that ownership of the trade name relieves Ticketmaster Entertainment from having to pay an arms length

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

royalty
to a third party for the right to use the name. The method applies a cost savings approach, or "relief from royalty" to calculate the value of the trade name.

In
accordance with SFAS No. 142, Ticketmaster Entertainment tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes
in circumstances indicate that the assets might be impaired. SFAS No. 142 requires the testing of goodwill for impairment be performed at a level referred to as a reporting unit. The Company
did not perform impairment tests for the reporting units in the Artist Services segment given the proximity of the controlling interest acquisition to the impairment testing date. In addition, the
fair values determined as part of the step-up purchase accounting indicated no impairment of historical-cost goodwill. Refer to Note 3Business Acquisitions
for discussion of purchase accounting.

Based
on the analysis performed, it was also determined that the indefinite-lived intangible asset, the Ticketmaster Entertainment trade name, was not impaired at the most recent testing
date. There was no goodwill or indefinite-lived intangible asset impairment recorded for the years ended December 31, 2007 and 2006. Refer to Note 4Goodwill and
Indefinite-Lived Assets.

Long-Lived Assets and Intangible Assets with Definite Lives

In accordance with SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived
Assets("SFAS No. 144"), long-lived assets, including property and equipment and intangible assets with definite lives, are tested for recoverability
whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum
of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is deemed to not be recoverable, an impairment loss is recorded as the
amount by which the carrying amount of the long-lived asset exceeds its fair value. Amortization of definite lived intangible assets is recorded either on a straight-line basis
or an accelerated basis over their estimated lives.

Long-Term Investments

Ticketmaster Entertainment applies the provisions of Accounting Principles Board No. 18,The Equity
Method of Accounting for Investments in Common Stock, for accounting for its investments in common stock. Investments in which Ticketmaster Entertainment has the ability to
exercise significant influence over the operating and financial matters of the investee are accounted for using the equity method. Investments in which Ticketmaster Entertainment does not have the
ability to exercise significant influence over the operating and financial matters of the investee are accounted for using the cost method. Ticketmaster Entertainment evaluates each equity and cost
method investment for impairment on a quarterly basis and recognizes an impairment loss if a decline in value is determined to be other-than-temporary. If Ticketmaster
Entertainment has not identified events or changes in circumstances that may have a significant adverse effect on the fair value of a cost investment, then the fair value of such cost method
investment is not estimated, as it is impracticable to do so.

As
of December 31, 2008, Ticketmaster Entertainment determined that the equity investments in Beijing Gehua Ticketmaster Ticketing Co., Ltd. ("Beijing Gehua") and
Evolution Artists, Inc. ("iLike.com") had suffered "other than temporary" impairment losses after giving consideration to, among other things, the decline in market value of the investments and
the expectation of non-recovery of these investments beyond their current market values. Accordingly, the Company recorded an "other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

than
temporary" impairment loss of $6.5 million and $5.8 million for Beijing Gehua and iLike.com, respectively, to reduce such investments to their aggregate fair value. Refer to
Note 13Equity Investments in Unconsolidated Affiliates for discussion related to investments accounted for under the equity method.

Investments
accounted for under the cost method are included in "Long-term investments" in the accompanying consolidated balance sheets and had a carrying value of
approximately $4.5 million and $4.1 million as of December 31, 2008 and 2007, respectively.

Contract Advances

Contract advances, which can be either recoupable or non-recoupable, represent amounts paid in advance to Ticketmaster
Entertainment's clients pursuant to ticketing agreements that provide for the client's participation in the convenience charges and/or order processing fees. Recoupable contract advances are generally
recoupable against future royalties earned by the clients based on the contract terms over the life of the contract (generally 3 to 7 years). Non-recoupable contract advances are
fixed additional incentives which are normally amortized over the life of the contract on a straight-line basis (generally 3 to 7 years). Recoupment of contract advances and
amortization of non-recoupable contract advances are included in cost of sales in the accompanying Consolidated Statements of Operations.

Accounts Payable, Client Accounts

Accounts payable, client accounts consist of contractual amounts due to clients for tickets sold on behalf of the organizations that
sponsor events and ticketing royalties, which arise from the clients' share of convenience and order processing charges.

Deferred Revenue

Deferred revenue primarily consists of unredeemed gift cards issued by the Company. Upon the purchase of a gift card, deferred revenue
is established for the cash value of the gift card. Deferred revenue is relieved and net revenue is recorded upon redemption by the customer or the expiration of the gift card, if applicable. Over
time, some portion of the gift cards issued without expiration dates are not redeemed. This amount is recorded as revenue when it can be determined that the likelihood of the gift card being redeemed
is remote and there is no legal
obligation to remit the unredeemed gift cards to relevant jurisdictions. We determine the probability of the gift cards being redeemed to be remote based on historical gift card redemption patterns.
Income from gift card revenue, net of any amounts subject to escheat laws, is included in revenue in the accompanying Consolidated Statements of Operations.

Advertising

Advertising costs are charged to expense in the period incurred and represent both offline costs, including sports sponsorships and
radio advertising, and online advertising costs, including fees paid to search engines and distribution partners. Advertising expense was $70.2 million, $21.6 million and
$6.3 million for the years ended December 31, 2008, 2007 and 2006, respectively.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Research and Development

Research and development costs, which relate primarily to software development, are charged to operations as incurred. Based on
Ticketmaster Entertainment's development process, technological feasibility is established upon completion of a working model. Costs incurred prior to the completion of a working model are expensed as
incurred. Costs incurred subsequent to the completion of a working model and the point at which the software is ready for general release are capitalized. Research and development costs were
$34.5 million, $21.4 million and $20.1 million for the years ended December 31, 2008, 2007 and 2006, respectively.

Income Taxes

Ticketmaster Entertainment accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax
assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. Ticketmaster Entertainment records interest on potential tax contingencies as a component
of income tax expense and records interest net of any applicable related income tax benefit.

Effective
January 1, 2007, Ticketmaster Entertainment adopted the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB
Statement No. 1("FIN 48"). As a result of the adoption
of FIN 48, Ticketmaster Entertainment recognizes liabilities for uncertain tax positions based on the two-step process prescribed by the interpretation. The first step is to
evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of
related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement.

Foreign Currency Translation and Transaction Gains and Losses

The financial position and operating results of substantially all foreign operations are consolidated using the local currency as the
functional currency. Local currency assets
and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses are translated at average rates of exchange during the period. Resulting
translation gains or losses are included as a component of accumulated other comprehensive income, a separate component of stockholders' equity. Accumulated other comprehensive income is solely
related to foreign currency translation. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in the
Consolidated Statements of Operations. Foreign currency transaction net gains for the years ended December 31, 2008, 2007 and 2006 were $4.9 million, $1.1 million and
$1.2 million, respectively, and are included in other income in the accompanying Consolidated Statements of Operations.

During
the fourth quarter of 2008, Ticketmaster Entertainment entered into foreign currency forward exchange contracts to mitigate the risk of changes in foreign currency exchange rates
on short-term intercompany loans payable to certain international subsidiaries. As of December 31, 2008,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

the
Company had foreign currency forward exchange contracts outstanding with nominal amounts of AUD 16.5 million. Gains and losses on these foreign currency exchange contracts are recognized in
income currently as the contracts were not designated as hedging instruments, substantially offsetting currency transaction gains and losses on the short term intercompany loans. The change in fair
value of these instruments from date of purchase through December 31, 2008 was a loss of $0.5 million. At December 31, 2007, the Company had no outstanding foreign currency
contracts.

Debt Issuance Costs

Debt issuance costs are deferred and amortized to interest expense over the terms of debt or, when the debt can be redeemed at the
option of the holders, over the term of the redemption option. The Company utilizes the effective interest method to amortize debt issuance costs.

Stock-Based Compensation

On January 1, 2006, Ticketmaster Entertainment adopted the provisions of SFAS No. 123 (revised
2004), Share-Based Payment("SFAS No. 123R"), which requires the measurement and recognition of compensation expense for all share-based payment
awards made to employees and directors including employee stock options and restricted stock units ("RSUs") based on the grant-date fair values of the awards.

The
Company adopted SFAS No. 123R using the modified prospective transition method, and the Company's consolidated financial statements for the years ended December 31,
2008, 2007 and 2006 reflect the impact of SFAS No. 123R. Stock-based compensation recognized under SFAS No. 123R for the years ended December 31, 2008, 2007 and 2006 was
$23.7 million, $12.6 million and $7.8 million, respectively, which was primarily related to RSUs and stock options. There was no impact to the amount of stock-based compensation
recorded in the Consolidated Statements of Operations for the year ended December 31, 2006 as a result of adopting SFAS No. 123R. Ticketmaster Entertainment has been recognizing expense
for all stock-based grants since it became wholly owned by IAC on January 17, 2003, in accordance with SFAS No. 123.

SFAS
No. 123R requires companies to estimate the fair value of share-based payment awards on the grant date using an option-pricing model. The Company uses the Black-Scholes
option-pricing model for valuing share-based payment awards. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in
the Company's Consolidated Statements of Operations.

SFAS
No. 123R requires forfeitures to be estimated at the time of grant in order to calculate the amount of share-based payment awards ultimately expected to vest. The forfeiture
rate is based on historical rates. As stock-based compensation recognized in the Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 is based on equity
awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Business Combinations

All of the Company's acquisitions have been accounted for as purchase business combinations in accordance with the provisions of SFAS
No. 141,Business Combinations("SFAS No. 141"). Under the purchase method of accounting, the costs, including transaction costs, are
allocated to the underlying

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

net
assets acquired, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Definite-lived
identifiable intangible assets, which are determined in purchase accounting, are amortized on either a straight-line basis or an accelerated basis based on
management's estimates of expected cash flows from related assets. The Company determines the appropriate amortization method by performing an analysis of expected cash flows over the estimated useful
lives of the assets and matches the amortization expense to the expected cash flows from those assets.

In
order to determine the fair value of certain assets and liabilities acquired, the Company may obtain appraisals from valuation specialists for certain intangible assets. While there
are a number of different methods used in estimating the fair value of acquired intangible assets, there are two approaches primarily used: the discounted cash flow and market comparison approaches.
Some of the more significant estimates and assumptions inherent in the two approaches include: projected future cash flows (including timing); discount rate reflecting the risk inherent in the future
cash flows; terminal growth rate; subscriber churn; terminal value; determination of appropriate market comparables; and the determination of whether a premium or a discount should be applied to
market comparables. Most of the above assumptions are made based on available historical and market information.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period, net of
shares subject to repurchase rights, and excludes any dilutive effects of options or warrants, Restricted Stock, RSUs, and convertible securities, if any. Diluted net income (loss) per share is
computed using the weighted-average number of common stock and common stock equivalent shares outstanding (including the effect of restricted stock) during the period. Common stock equivalent shares
are excluded from the computation if their effect is antidilutive.

Legal Contingencies

The Company is currently involved in certain legal proceedings. The Company records liabilities related to pending litigation when an
unfavorable outcome is probable and management can reasonably estimate the amount of loss. The Company does not record liabilities for pending litigation when there are uncertainties related to
assessing either the amount or the probable outcome of the claims asserted in the litigation. As additional information becomes available, the Company continually assesses the potential liability
related to such pending litigation.

Operating Leases

The Company leases office space, data centers and certain office equipment under operating lease agreements with original lease periods
of up to 10 years. Certain of the lease agreements contain rent holidays and rent escalation provisions. Rent holidays and rent
escalation provisions are considered in determining straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased
property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease
basis and are generally not included in the initial lease term.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income (Loss)

SFAS No. 130,Reporting Comprehensive Income,establishes standards for
reporting comprehensive income (loss) and its components in financial statements. Comprehensive income (loss), as defined, includes all changes in equity (net assets) during a period from
non-owner sources. For the Company, comprehensive income (loss) primarily consists of its reported net income (loss) and foreign currency translation.

Segments

The Company complies with the reporting requirements of SFAS No. 131,Disclosures about Segments of an
Enterprise and Related Information. 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 and executive management viewed the business, the Company began reporting two segments: Ticketing and Artist Services.

Accounting Estimates

Ticketmaster Entertainment's management is required to make certain estimates and assumptions during the preparation of the
consolidated financial statements in accordance with U.S. generally accepted accounting principles. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures
of contingent assets and liabilities as of the
date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

Significant
estimates underlying the accompanying consolidated financial statements include, but are not limited to: the recoverability of contract advances; the recoverability of
long-lived assets; the recovery of goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; and
assumptions related to the determination of stock-based compensation.

Certain Risks and Concentrations

Ticketmaster Entertainment's business is subject to certain risks and concentrations including dependence on third party technology
providers, exposure to risks associated with online commerce security and credit card fraud.

Financial
instruments, which potentially subject Ticketmaster Entertainment to concentration of credit risk, consist primarily of cash and cash equivalents. Cash and cash equivalents are
maintained with quality financial institutions of high credit and cash held in the U.S. is in excess of Federal Deposit Insurance Corporation insurance limits.

The
Company has one customer, Live Nation, Inc. ("Live Nation") (including its subsidiary House of Blues) that comprises more than 10% of total revenue. Refer to
Note 7Segment Information.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

Disclosures by Public Entities about Transfers of Financial Assets and Interests in Variable Interest Entities

In December 2008, the FASB issued FASB Staff Position ("FSP") FAS No.140-4 and FIN 46(R)-8, Disclosures
by Public Entities about Transfers of Financial Assets and Interests in Variable Interest Entities ("FSP FAS No. 140-4" and "FIN 46(R)-8"). FSP FAS
No. 140-4 and FIN 46(R)-8 require additional disclosures about an entity's involvement with variable interest entities and transfers of financial assets. FSP FAS
No. 140-4 and. FIN 46(R)-8 are effective for the first reporting period ending after December 15, 2008. Ticketmaster Entertainment adopted FSP
FAS No. 140-4 and FIN 46(R)-8 effective January 1, 2009 and the standard did not have a material impact on the Company's consolidated financial
statements.

Equity Method Investment Accounting Considerations

In November 2008, the FASB ratified the EITF consensus on Issue No. 08-6,Equity Method
Investment Accounting Considerations("EITF 08-6") which addresses certain effects of SFAS Nos. 141R and 160 on an entity's accounting for
equity-method investments. The consensus indicates, among other things, that transaction costs for an investment should be included in the cost of the equity-method investment (and not expensed) and
shares subsequently issued by the equity-method investee that reduce the investor's ownership percentage should be accounted for as if the investor had sold a proportionate share of its investment,
with gains or losses recorded through earnings. EITF 08-6 was effective for the Company beginning January 1, 2009 on a prospective basis and the Company is currently
evaluating the impact of EITF 08-6 on its consolidated financial statements.

Accounting for Defensive Intangible Assets

In November 2008, the FASB ratified the EITF consensus on Issue No. 08-7,Accounting for
Defensive Intangible Assets("EITF 08-7"). EITF 08-7 addresses the accounting for an intangible asset acquired in a business combination
or asset acquisition that an entity does not intend to use or intends to hold to prevent others from obtaining access (a defensive intangible asset). Under EITF 08-7, a defensive
intangible asset would need to be accounted for as a separate unit of accounting and would be assigned a useful life based on the period over which the asset diminishes in value.
EITF 08-7 was effective for the Company beginning January 1, 2009 on a prospective basis and is currently evaluating the impact of EITF 08-7 on its
consolidated financial statements.

Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities

In June 2008, the FASB issued FSP No. EITF 03-6-1,Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities("FSP No. EITF 03-6-1"). FSP No.
EITF 03-6-1 clarifies that share-based payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered participating
securities and included in the calculation of basic EPS. The provisions of FSP EITF 03-6-1 were effective for the Company beginning January 1, 2009, and in 2009,
will be applied retroactively to all prior period earnings per share computations. The Company is currently evaluating the impact of the adoption of FSP EITF 03-6-1 on
its earnings per share amounts.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP No. FAS 142-3,Determination of the Useful Life of
Intangible Assets("FSP No. FAS 142-3"). FSP No. FAS 142-3 amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142. FSP No. FAS 142-3 was effective for the Company beginning January 1,
2009 on a prospective basis and we are currently evaluating the impact of FSP No. FAS 142-3 on our consolidated financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133("SFAS No. 161"). SFAS No. 161 requires enhanced disclosures on an entity's derivative and
hedging activities. Entities are required to provide enhanced disclosures about (i) how and why an entity uses
derivative instruments, (ii) how derivative instruments and related hedging items are accounted for under SFAS No. 133 and its related interpretations and (iii) how derivative
instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS No. 161 encourages, but does not require, presenting disclosures for
earlier periods for comparative purposes at initial adoption. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15,
2008 with early adoption encouraged. The Company adopted SFAS No. 161 on January 1, 2009. Because SFAS No. 161 amends only the disclosure requirements for derivative instruments
and hedged items, the adoption of SFAS No. 161 is not anticipated to have a material impact on the Company's consolidated financial statements.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Financial
Statementsan amendment of Accounting Research Bulletin No. 51("SFAS No. 160") which changes the accounting and reporting for minority interests.
Noncontrolling (minority) interests will be reported as a component of equity separate from the parent's equity, and purchases or sales of equity interests that do not result in a change in control
will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the statement of operations
and upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for
fiscal years beginning after December 15, 2008. SFAS No. 160 will be applied prospectively, except as it relates to disclosures, for which the effects will be applied retrospectively for
all periods presented. Early adoption is not permitted. The Company is currently evaluating the impact but does not expect the initial application of SFAS No. 160 to have a material impact on
its consolidated financial statements.

Business Combinations

In December 2007, the FASB issued SFAS No. 141 (revised 2007),Business
Combinations("SFAS No. 141R"), which replaces SFAS No. 141. SFAS No. 141R establishes revised principles and requirements for the recognition and
measurement of assets and liabilities in a business combination. SFAS No. 141R requires (i) recognition of 100% of the fair values of acquired assets, including

F-20

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

goodwill,
and assumed liabilities upon obtaining control, (ii) contingent consideration to be fair valued at acquisition date, (iii) transaction costs to be expensed as incurred,
(iv) pre-acquisition contingencies to be accounted for at acquisition date at fair value and (v) costs of a plan to exit an activity or terminate or relocate employees to be
accounted for as post combination costs. SFAS
No. 141(R) is effective for fiscal years beginning after December 15, 2008 and early adoption is prohibited. SFAS No. 141R requires prospective application for all acquisitions
after the adoption date. The Company expects SFAS No. 141R to have an impact on how acquisitions are reflected in the consolidated financial statements when effective, but the timing, nature
and magnitude of the specific effects will depend on the nature, terms and size of any acquisitions that the Company consummates after the effective date. As of December 31, 2008, approximately
$0.6 million of transaction costs related to deals not consummated were capitalized and included in prepaid expense and other current assets. These costs will be expensed during 2009.

Additionally,
for business combinations in which the acquisition date is prior to the effective date of SFAS No. 141R, the acquirer is required to apply the requirements of SFAS
No. 109,Income Taxes, as amended by SFAS No. 141R, prospectively. After the effective date of SFAS No. 141R, changes in the
valuation allowance for acquired deferred tax assets and dispositions of uncertain income tax positions must be recognized as an adjustment to income tax expense, rather than through goodwill. The
impact of the adoption of SFAS No. 141R on the Company's consolidated financial statements will largely be dependent on the size and nature of the business combinations completed after the
adoption of this statement.

NOTE 3BUSINESS ACQUISITIONS

Business acquisitions completed by Ticketmaster Entertainment during 2008 are described below.

Front Line Management Group, Inc.

On October 29, 2008, the Company acquired additional equity interests in Front Line, a portion of which was acquired from Warner
Music Group for $123.0 million. The remaining equity interests were acquired in a transaction that, for accounting purposes, was treated as an exchange by a trust controlled by Mr. Azoff of
certain Front Line equity awards for certain
Ticketmaster Entertainment equity awards. The Company acquired additional ownership interests of 42.9% in the aggregate, resulting in a controlling interest in Front Line of 82.3% (approximately 74%
on a diluted basis). See Note 11Redeemable Preferred Stock and Stockholders' Equity for further information regarding the exchange of equity awards. The acquisition was accounted
for as a step-acquisition under the purchase method of accounting in accordance with SFAS No. 141, as prior to this transaction the Company owned 39.4% of Front Line. The primary
reasons for the acquisition were to diversify revenue and cash flow streams, expand business opportunities and capitalize on strategic opportunities.

F-21

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3BUSINESS ACQUISITIONS (Continued)

The Company believed that certain of these primary factors supported the amount of goodwill recorded as a result of the purchase price paid for Front Line, in relation to other acquired
tangible and intangible assets.

The
total cost of the Front Line step-acquisition was approximately $138.0 million, including expenses incurred in connection with the transaction. The following table
summarizes the components of the purchase price (in thousands):

Cash consideration

$
123,000Fair value of exchanged equity awards


13,168Transaction costs


1,816Total

$
137,984


The
fair value of exchanged equity awards was valued based on the average of the Company's closing stock price for the period from two days prior to through two days after the
announcement date.

To
fund the cash portion of the Front Line acquisition, the Company used cash on hand and $100 million borrowed under the Revolver, as defined in Note 9Long
Term Debt.

The
purchase price for the acquisition was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of October 29,
2008. The Company believes that the fair values assigned to the assets acquired and the liabilities assumed were based on reasonable

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3BUSINESS ACQUISITIONS (Continued)

assumptions.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in connection with the step-acquisition (in thousands):

Description

Estimated Fair
Value

Weighted-Average
Amortization PeriodNet liabilities assumed:Cash and cash equivalents

$
18,058Accounts receivables, net


6,740Other current assets


2,441Property and equipment


716Other non-current assets


557Accounts payable


(5,147
)Accrued liabilities


(4,992
)Income taxes payable


(3,638
)Deferred revenue


(1,684
)Other liabilities


(6,487
)Deferred tax liability


(15,561
)Minority interests


(17,604
)Total net liabilities assumed


(26,601
)Intangible assets acquired:Artist relationships


54,871


6.0 yearsCustomer relationships


13,685


4.4 yearsNon-compete agreements


5,090


3.8 yearsTotal intangible assets acquired


73,646


5.4 yearsGoodwill


90,939Total purchase price

$
137,984


The
goodwill recorded in connection with this transaction has been included in the Artist Services segment and is not deductible for federal income tax purposes. The Company's fair value
estimates for the purchase price allocation may change during the allowable allocation period if additional information becomes available. However, the Company does not currently expect any further
material changes to the purchase price allocation.

The
results of Front Line's operations have been included in the Company's consolidated financial statements since October 29, 2008. The following unaudited pro forma information
assumes the Front Line acquisition occurred at January 1, 2008 and 2007 (in thousands, except per share amounts):

Years Ended December 31,2008

2007(unaudited)Revenues

$
1,609,854

$
1,384,909Net (loss) income

$
(1,006,438
)
$
161,138Basic and diluted net (loss) income per share

$
(17.86
)
$
2.87


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3BUSINESS ACQUISITIONS (Continued)

The
unaudited pro forma information is presented for illustrative purposes only and does not purport to be indicative of the results of future operations of the Company or of the results
that would have actually been attained had the operations been combined during the periods presented.

Certain
prior acquisitions made by Front Line include contingent additional consideration if and when certain financial targets, as defined in each applicable acquisition agreement, are
achieved. Based on the acquisitions' current performance, management estimates potential contingent additional consideration of $8.0 million will be paid within the next two years.

The V.I.P. Tour Company ("TicketsNow")

On February 24, 2008, the Company acquired 100% of the outstanding common shares of TicketsNow, a leading resale
on-line provider of tickets for live sporting and entertainment events. The acquisition was accounted for under the purchase method of accounting in accordance with SFAS No. 141.
The primary reasons for the acquisition were to increase Ticketmaster Entertainment's presence in the resale ticketing market and to grow our business by providing consumers with expanded buying
options.

The
Company believes that these factors supported the amount of goodwill recorded as a result of the purchase price paid for TicketsNow, in relation to other acquired tangible and
intangible assets.

The
total cost of the TicketsNow acquisition was approximately $279.4 million, including expenses incurred in connection with the transaction. The cash consideration for the
TicketsNow acquisition was funded through cash on hand at IAC and the Company. The following table summarizes the components of the purchase price (in thousands):

Cash consideration

$
278,009Transaction costs


1,427Total

$
279,436


The
purchase price for the acquisition was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The
Company believes that the fair values assigned to the assets acquired and the liabilities assumed were based on reasonable

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3BUSINESS ACQUISITIONS (Continued)

assumptions.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands):

Description

Estimated Fair
Value

Weighted-Average
Amortization PeriodNet liabilities assumed:Cash and cash equivalents

$
21,030Accounts receivables, net


3,843Prepaid taxes


9,578Other current assets


1,916Property and equipment


7,985Other assets


51Accounts payable


(6,394
)Accrued liabilities


(8,437
)Deferred tax liabilities, net


(38,774
)Other liabilities


(642
)Total net liabilities assumed


(9,844
)Intangible assets acquired:Broker relationships


63,800


12.0 yearsTrademarks and trade names


21,000


10.0 yearsTechnology


18,200


3.4 yearsCustomer relationships


7,000


3.0 yearsNon-compete agreements


1,000


3.0 yearsTotal intangible assets acquired


111,000


9.6 yearsGoodwill


178,280Total purchase price

$
279,436


The
goodwill has been included in the Ticketing segment and is not deductible for federal income tax purposes. The purchase price allocation for the acquisition is considered final and
the Company does not currently expect any further material changes to the purchase price allocation.

The
results of TicketsNow's operations have been included in the Company's consolidated financial statements since February 24, 2008. The following unaudited pro forma information
assumes the TicketsNow acquisition occurred at January 1, 2008 and 2007 (in thousands, except per share amounts):

Years Ended December 31,2008

2007(unaudited)Revenues

$
1,465,194

$
1,313,113Net (loss) income

$
(1,009,055
)
$
164,714Basic and diluted net (loss) income per share

$
(17.91
)
$
2.93


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3BUSINESS ACQUISITIONS (Continued)

The
unaudited pro forma information is presented for illustrative purposes only and does not purport to be indicative of the results of future operations of the Company or of the results
that would have actually been attained had the operations been combined during the periods presented.

Additional acquisitions completed during 2008

In 2008, the Company also acquired the following three entities for a total cost of $151.6 million, which was paid primarily in
cash:



Goodwill
recognized in these transactions amounted to $100.6 million, which has been included in the Ticketing segment and is not deductible for federal income tax purposes.

NOTE 4GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS

The balance of goodwill and indefinite-lived intangible assets, net is as follows (in thousands):

December 31,2008

2007Goodwill

$
455,751

$
1,090,418Indefinite-lived intangible asset, trade name


62,585


62,560Total goodwill and indefinite-lived intangible asset, net

$
518,336

$
1,152,978


The
following tables present the balance of goodwill, including the changes in carrying amount of goodwill, for the years ended December 31, 2008 and 2007 (in thousands):

Balance as of
January 1, 2008

Additions

Goodwill
Impairment

Foreign Exchange
Translation

Balance as of
December 31, 2008$
1,090,418

$
479,150

$
(1,094,091
)
$
(19,726
)
$
455,751


For
the Ticketing segment, additions principally related to the acquisitions of TicketsNow, Paciolan, and GET ME IN! The aggregate purchase price for these acquisitions totaled
approximately $428 million with approximately $151.6 million of intangible assets and $282.1 million of goodwill identified. An additional $194.9 million of goodwill was
recorded as a result of the acquisition of a controlling interest in Front Line which included $147.4 million in historical basis and $47.5 million resulting from the excess of the
purchase price over fair value of identified assets for the stepped-up portion of the acquisition. The purchase price allocation for the Front Line acquisition is preliminary and subject
to adjustment during the allocation period, which is not expected to last beyond one year

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS (Continued)

from
the date of purchase, and as such, the goodwill may change. Purchase price allocations for the remaining acquisitions are considered final.

Balance as of
January 1, 2007

Additions

(Deductions)

Foreign Exchange
Translation

Balance as of
December 31, 2007$
1,051,732

$
35,732

$
(5,899
)
$
8,853

$
1,090,418


Additions
principally relate to acquisitions. Deductions principally relate to the establishment of a deferred tax asset related to acquired tax attributes.

Impairment of Goodwill and Indefinite-Lived Assets

As a result of our annual impairment test, the Company recorded a non-cash charge of $1.1 billion, representing
$1.08 billion in the ticketing reporting unit and $0.02 billion in the Echo Music reporting unit. Subsequent to the impairment, $260.9 million of goodwill continues to be included
in the ticketing reporting unit and all goodwill has been written-off in the Echo Music reporting unit.

The
Company believes the factors which led to the impairment include the decline in the global economy and the Company's stock price. In determining the impairment charge, the Company
used certain DCF analyses. The analyses included seven years of projected cash flows with forecasted sales growth rates ranging from -5.7% to 12.5% with a terminal growth rate of 3%. The
discount rates used in the DCF analyses for the step one tests were 12% with a 9% rate for the terminal value. The Company also considered the market approach which evaluates market transactions
involving similarly situated companies, however it was not considered meaningful in the final evaluation because of the lack of comparability between the reporting units and guideline public
companies. In addition, the Company assessed the reasonableness of its determined fair values by reference to the Company's market capitalization and determined that the implied control premium was
reasonable.

Following
the annual impairment testing date, the Company's stock price experienced a decline of over 40%. This significant decline in market capitalization together with the significant
decline in the global economy and lower fourth quarter ticketing results led management to the conclusion that a triggering event had occurred under SFAS 142 which caused the Company to perform
a step one test for the ticketing reporting unit at December 31, 2008.

At
December 31, 2008, the Company updated its DCF analysis for the ticketing reporting unit and increased the discount rate utilized from 12% to 15.5% and the terminal growth rate
from 9% to 12.5% based on increased risk due to current economic volatility experienced during the 4th quarter of 2008. The fair value utilizing the DCF model was determined to be reasonable
when compared to the market capitalization at the end of the year plus a reasonable control premium. Because the fair value
of the assets exceeded the carrying value, there was no indication of further impairment, and a step two test was not required.

As
previously noted, the Company had acquired a controlling interest in Front Line following the annual impairment date. The Company considered the assumptions included in the valuation
performed at the time of the step-acquisition and did not consider it necessary to perform an interim goodwill impairment test for the artist management, VIP ticketing or merchandising
reporting units during the fourth quarter of 2008. The purchase accounting associated with the step-acquisition, further

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS (Continued)

described
in Note 3Business Acquisitions, established fair values for the Artist Services reporting units. The Company believes that the proximity of the transaction to year end
supported the valuation made pursuant to the controlling interest acquisition.

There
was no goodwill impairment recorded for the years ended December 31, 2007 and 2006. In addition, the Company's impairment test for the indefinite-lived trademark indicated
no impairment for the year ended December 31, 2008.

NOTE 5LONG-LIVED ASSETS AND INTANGIBLE ASSETS WITH DEFINITE LIVES

At December 31, 2008, intangible assets with definite lives related to the following (in thousands):

Cost

Accumulated
Amortization

Net

Weighted Average
Amortization Life
(Years)Purchase agreements

$
157,952

$
(151,209
)
$
6,743


6.1Broker relationships


64,331


(4,468
)

59,863


12.0Customer relationships


53,086


(8,060
)

45,026


7.9Technology


31,333


(14,494
)

16,839


3.5Distribution agreements


27,333


(23,959
)

3,374


6.3Non-compete agreements


23,968


(12,950
)

11,018


4.8Artist relationships


138,369


(38,720
)

99,649


20.0Trademarks and trade names


24,740


(2,716
)

22,024


9.1Other


3,873


(933
)

2,940


10.9Total

$
524,985

$
(257,509
)
$
267,476


In
accordance with SFAS No. 144, long-lived assets, including property and equipment and intangible assets with definite lives, are tested for recoverability whenever
events or changes in circumstances indicate that their carrying amount may not be recoverable. In 2008, the Company identified and recorded an impairment charge of $0.6 million for the
write-off of a covenant not to compete related to Ticketmaster Entertainment's ticketing operations in Germany. The intangible asset impairment charge is included in the amortization of
intangible assets in the accompanying Consolidated Statements of Operations. There was no definite-lived intangible asset impairment recorded for the years ended December 31, 2007 and 2006.

Amortization
of intangible assets with definite lives is based on the nature of the applicable intangible asset and expected future cash flows derived from the intangible asset. Based on

F-28

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5LONG-LIVED ASSETS AND INTANGIBLE ASSETS WITH DEFINITE LIVES (Continued)

December 31,
2008 balances, such amortization for the next five years and thereafter is estimated to be as follows (in thousands):

Years Ending December 31,2009

$
58,6142010


45,9252011


32,5592012


27,0392013


23,8762014 and thereafter


79,463$
267,476


At
December 31, 2007, intangible assets with definite lives related to the following (in thousands):

Cost

Accumulated
Amortization

Net

Weighted-Average
Amortization Life
(Years)Purchase agreements

$
163,681

$
(145,637
)
$
18,044


6.1Distribution agreements


28,109


(20,567
)

7,542


4.2Technology


8,587


(8,397
)

190


3.9Non-compete agreements


11,513


(10,193
)

1,320


3.3Other


3,239


(570
)

2,669


11.8Total

$
215,129

$
(185,364
)
$
29,765


NOTE 6PROPERTY AND EQUIPMENT

The balance of property and equipment, net is as follows (in thousands):

December 31,2008

2007Computer equipment and capitalized software

$
300,331

$
260,983Buildings and leasehold improvements


19,374


14,180Furniture and other equipment


21,461


18,375Projects in progress


13,198


10,249Land


2,058


2,500356,422


306,287Less: accumulated depreciation and amortization


(245,131
)

(211,165
)Total property and equipment, net

$
111,291

$
95,122


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7SEGMENT INFORMATION

Prior to the acquisition of Front Line, Ticketmaster Entertainment had one operating segment in accordance with the internal management structure and based upon how the chief operating
decision maker and executive management viewed the business, its organizational structure and the type of service provided which primarily was online and offline ticketing services. After the
October 29, 2008 acquisition of Front Line, based upon changes in the internal management structure and how the chief operating decision maker and executive management viewed the business, the
Company began reporting two segments: Ticketing and Artist Services.

The
Ticketing segment is primarily an agency business that sells tickets for events on behalf of our clients and retains a convenience charge and order processing fee for our services.
We sell tickets through a combination of websites, telephone services and ticket outlets.

The
Artist Services segment primarily provides management services to music recording artists in exchange for a commission on the earnings of these artists. Artist Services also sells
merchandise associated with musical artists at live musical performances, to retailers, and directly to consumers via a website.

Revenue
and expenses earned and charged between segments are eliminated in consolidation. Corporate expenses, interest income, interest expense, equity in losses (earnings) of
nonconsolidated affiliates, minority interest in income (losses) of consolidated subsidiaries, and other expense (income)net and income taxes expense are managed on a total company basis.
Corporate expenses primarily include compensation and other employee costs (including stock-based compensation), outside services and professional fees.

Years Ended December 31,2008

2007

2006(In thousands)RevenueTicketing

$
1,408,820

$
1,240,477

$
1,062,672Artist services


45,705





Total revenue

$
1,454,525

$
1,240,477

$
1,062,672




Years Ended December 31,2008

2007

2006(In thousands)Operating (loss) income:Ticketing

$
(872,083
)
$
290,070

$
279,272Artist services


7,642





Corporate and unallocated


(89,702
)

(73,754
)

(54,381
)Total operating (loss) income

$
(954,143
)
$
216,316

$
224,891


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7SEGMENT INFORMATION (Continued)



Years Ended December 31,2008

2007

2006(In thousands)Adjusted Operating income (loss):(a)Ticketing

$
312,949

$
356,125

$
340,121Artist services


16,985





Corporate and unallocated


(72,252
)

(62,579
)

(45,202
)Total Adjusted operating income

$
257,682

$
293,546

$
294,919




Years Ended December 31,2008

2007

2006(In thousands)Capital Expenditures:Ticketing

$
43,821

$
41,354

$
32,944Artist services


150





Corporate and unallocated


6,867


6,167


6,344Total Capital expenditures

$
50,838

$
47,521

$
39,288


The
following table reconciles Adjusted Operating Income to Operating (loss) income for the Company's reportable segments to net (loss) income available to common stockholders:

Year ended December 31, 2008Adjusted
Operating
Income(a)

Non-cash
compensation
expense

Amortization
of intangibles

Depreciation
expense

Goodwill
impairment

Operating
(loss) income(In thousands)Ticketing

$
312,949

$
(7,848
)
$
(37,103
)
$
(45,990
)
$
(1,094,091
)
$
(872,083
)Artist services


16,985


(2,153
)

(7,006
)

(184
)




7,642Corporate and unallocated


(72,252
)

(13,730
)




(3,720
)




(89,702
)Total

$
257,682

$
(23,731
)
$
(44,109
)
$
(49,894
)
$
(1,094,091
)

(954,143
)Other expense, net


(30,051
)Loss before income taxes and minority interest


(984,194
)Income tax provision


(25,627
)Minority interests in losses of consolidated subsidiaries


4,322Net loss available to common stockholders

$
(1,005,499
)


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7SEGMENT INFORMATION (Continued)



Year ended December 31, 2007Adjusted
Operating
Income(a)

Non-cash
compensation
expense

Amortization
of intangibles

Depreciation
expense

Operating
(loss) income(In thousands)Ticketing

$
356,125

$
(4,121
)
$
(26,200
)
$
(35,734
)
$
290,070Corporate and unallocated


(62,579
)

(8,451
)




(2,724
)

(73,754
)Total

$
293,546

$
(12,572
)
$
(26,200
)
$
(38,458
)

216,316Other income, net


39,483Earnings before income taxes and minority interest


255,799Income tax provision


(89,007
)Minority interests in losses of consolidated subsidiaries


2,559Net income available to common stockholders

$
169,351




Year ended December 31, 2006Adjusted
Operating
Income(a)

Non-cash
compensation
expense

Amortization
of intangibles

Depreciation
expense

Operating
(loss) income(In thousands)Ticketing

$
340,121

$
(1,300
)
$
(27,109
)
$
(32,440
)
$
279,272Corporate and unallocated


(45,202
)

(6,539
)




(2,640
)

(54,381
)Total

$
294,919

$
(7,839
)
$
(27,109
)
$
(35,080
)

224,891Other income, net


37,659Earnings before income taxes and minority interest


262,550Income tax provision


(85,967
)Minority interests in losses of consolidated subsidiaries


118Net income available to common stockholders

$
176,701


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7SEGMENT INFORMATION (Continued)

The
Ticketing segment's largest client, Live Nation (including its subsidiary House of Blues), represented approximately 13%, 17% and 20% of its consolidated revenue for the years ended
December 31, 2008, 2007, and 2006, respectively.

Ticketmaster
Entertainment maintains operations in the United States, the United Kingdom, Canada and other international territories. Geographic information about the United States and
international territories is presented below:

Years Ended December 31,2008

2007

2006(In thousands)RevenueUnited States

$
1,001,952

$
814,851

$
759,339Canada


102,718


96,852


76,097United Kingdom


139,826


140,408


104,095All other countries


210,029


188,366


123,141Total revenue

$
1,454,525

$
1,240,477

$
1,062,672




December 31,2008

2007(In thousands)Long-lived assetsUnited States

$
851,836

$
1,314,617All other countries


172,894


192,113Total Long-lived assets

$
1,024,730

$
1,506,730


The
Company manages its working capital on a consolidated basis. In addition, segment assets are not reported to, or used by, the chief operating decision maker to allocate resources to
or assess performance of the segments, and therefore, pursuant to SFAS No. 131, total segment assets have not been disclosed.

NOTE 8INCOME TAXES

In all periods presented, current and deferred tax expense has been computed for Ticketmaster Entertainment on a separate return basis. Ticketmaster Entertainment's payments to IAC for
its share of IAC's consolidated federal and state tax return liabilities prior to the spin-off have been reflected within cash flows from operating activities in the accompanying
Consolidated Statements of Cash Flows.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

U.S.
and foreign earnings from continuing operations before income taxes and minority interest are as follows (in thousands):

Years Ended December 31,2008

2007

2006U.S.

$
(1,048,671
)
$
170,573

$
199,282Foreign


64,477


85,226


63,268Total

$
(984,194
)
$
255,799

$
262,550


The
components of the provision for income taxes attributable to continuing operations are as follows (in thousands):

Years Ended December 31,2008

2007

2006Current income tax provision:Federal

$
19,402

$
62,246

$
60,960State


6,856


12,076


11,416Foreign


31,616


25,895


23,796Current income tax provision


57,874


100,217


96,172Deferred income tax (benefit) provision:Federal


(16,370
)

(9,880
)

(1,383
)State


(12,939
)

(1,477
)

(5,533
)Foreign


(2,938
)

147


(3,289
)Deferred income tax benefit


(32,247
)

(11,210
)

(10,205
)Income tax provision

$
25,627

$
89,007

$
85,967


Current
income taxes payable has been reduced by $11.4 million, $3.0 million and $2.7 million for the years ended December 31, 2008, 2007 and 2006,
respectively, for tax deductions attributable to stock-based compensation. The related income tax benefits of this stock-based compensation were recorded as amounts charged or credited to invested
capital or a reduction in goodwill.

Following
the spin-off in 2008, the Company held its newly issued third-party debt in the U.S. parent, whereas substantially all of its non-client cash was held
in foreign subsidiaries. In response to this change in its operating environment, the Company completed a restructuring of its international operations which resulted in an internal redistribution of
cash and debt. For tax purposes, the transactions related to the restructuring resulted in a deemed repatriation of foreign profits of $116.4 million, $40.7 million,
tax-effected, subject to withholding taxes of $1.5 million and foreign tax credits of $44.1 million. The net benefit on the 2008 provision was approximately
$1.9 million.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

The
tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2008 and 2007
are presented below (in thousands). The valuation allowance is related to items for which it is more likely than not that the tax benefit will not be realized.

December 31,2008

2007Deferred tax assets:Provision for accrued expenses

$
10,144

$
6,976Net operating loss carryforwards


23,078


8,070Stock-based compensation


20,360


7,977Tax credits


4,926


Investment in unconsolidated subsidiaries


4,168


559Other


4,813


1,142Total deferred tax assets


67,489


24,724Less valuation allowance


(23,282
)

(10,722
)Net deferred tax assets


44,207


14,002Deferred tax liabilities:Property and equipment


(14,266
)

(4,973
)Intangible and other assets


(80,956
)

(33,992
)Other


(447
)

(1,536
)Total deferred tax liabilities


(95,669
)

(40,501
)Net deferred tax liability

$
(51,462
)
$
(26,499
)


Included
in other non-current assets in the accompanying consolidated balance sheets at December 31, 2008 and 2007 is a non-current deferred tax asset of
$1.8 million and $0.9 million, respectively. In addition, included in other accrued expenses and current liabilities in the accompanying consolidated balance sheet at December 31,
2007 is a current deferred tax liability of $0.9 million.

At
December 31, 2008, Ticketmaster Entertainment had federal and state net operating losses ("NOLs") of approximately $18.6 million and $38.9 million, respectively.
If not utilized, the federal and state NOLs will expire at various times between 2023 and 2026, and 2009 and 2025, respectively. Utilization of federal NOLs will be subject to limitations under
Sections 382 and 1502 of the Internal Revenue Code of 1986, as amended. In addition, utilization of certain state NOLs may be subject to limitations under state law similar to
Sections 382 and 1502 of the Internal Revenue Code of 1986. At December 31, 2008, Ticketmaster Entertainment had foreign NOLs of approximately $50.9 million available to offset
future income. Of these foreign losses, approximately $19.1 million can be carried forward indefinitely, and approximately $18.2 million, $9.3 million, and $4.3 million
will expire within five years, ten years, and fifteen years, respectively. Utilization of approximately $17.3 million of foreign NOLs will be subject to annual limitations based on taxable
income. During 2008, Ticketmaster Entertainment did not recognize any significant tax benefits related to domestic and foreign NOLs.

At
December 31, 2008, the Company had a tax credit carryforward of approximately $4.9 million related to a federal credit for foreign taxes. This credit can be carried
forward for ten years.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

During
2008, Ticketmaster Entertainment's valuation allowance increased by approximately $12.6 million. This increase was primarily related to foreign net operating losses and
deferred tax assets not benefited for losses from investments in unconsolidated subsidiaries. At December 31, 2008, Ticketmaster Entertainment had a valuation allowance of approximately
$23.3 million related to the portion of tax operating loss carryforwards and other items for which it is more likely than not that the tax benefit will not be realized. Of these amounts, no tax
benefits with respect to acquired NOLs will be applied as a reduction to goodwill if recognized in future years, based on the requirements of adopting SFAS No. 141R.

A
reconciliation of the income tax provision to the amounts computed by applying the statutory federal income tax rate to earnings from continuing operations before income taxes and
minority interest is shown as follows (in thousands):

Years Ended December 31,2008

2007

2006Income tax provision at the federal statutory rate of 35%

$
(344,468
)
$
89,530

$
91,892State income taxes, net of effect of federal tax benefit


(3,892
)

6,890


8,434Foreign income taxed at a different statutory tax rate


(5,171
)

(6,665
)

(5,308
)Foreign losses not benefited


7,294


2,539


1,045Goodwill impairment


365,280





Investments in unconsolidated subsidiaries


6,319


2,461


Dividends from foreign subsidiaries


42,451





27,513Foreign income tax credits utilized


(45,039
)

(1,237
)

(27,969
)Incremental tax on unremitted earnings of certain non-U.S. subsidiaries








(8,111
)Other, net


2,853


(4,511
)

(1,529
)Income tax provision

$
25,627

$
89,007

$
85,967


In
accordance with APB No. 23, no federal and state income taxes have been provided on permanently reinvested earnings of certain foreign subsidiaries aggregating approximately
$149.8 million at December 31, 2008. The amount of the unrecognized deferred U.S. income tax liability with respect to these earnings is $19.0 million. In 2006, Ticketmaster
Entertainment asserted that the earnings of certain foreign subsidiaries are permanently reinvested resulting in a benefit of $8.1 million from the release of net deferred tax liabilities
established in prior years. As previously noted, the Company effectuated an international restructuring in 2008 that resulted in a deemed repatriation of foreign profits of $116.4 million. It
is management's view that this represented a one-time event to adjust for changes in the operating environment created by the spin-off from IAC. The Company continues to assert
that its foreign earnings will remain permanently reinvested.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

Ticketmaster Entertainment adopted the provisions of FIN 48 effective January 1, 2007. A reconciliation of the beginning and ending amount of unrecognized tax benefits,
excluding interest, is as follows (in thousands):

2008

2007Balance at beginning of year

$
5,489

$
583Additions based on tax positions related to the current year


168


3,884Additions based on tax positions of prior years


554


1,022Reductions for tax positions of prior years


(981
)

Settlements


(3,635
)

Expiration of applicable statute of limitations


(281
)

Balance at end of year

$
1,314

$
5,489


As
of December 31, 2008 and 2007, the unrecognized tax benefits, including interest, were $1.7 million and $6.3 million, respectively. Unrecognized tax benefits for
the year ended December 31, 2008, decreased by $4.2 million due principally to the effective settlement of certain prior year tax positions with the Internal Revenue Service ("IRS")
principally relating to the reversal of deductible temporary differences and unrecognized tax benefits that were transferred to IAC in connection with the spin-off, related to tax
positions included in IAC's consolidated tax return filings. If unrecognized tax benefits as of December 31, 2008 are subsequently recognized, approximately $1.2 million, net of related
deferred tax assets and interest, would reduce the income tax provision from continuing operations.

Ticketmaster
Entertainment recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. Included in income tax expense from continuing
operations for the year ended December 31, 2008 is a benefit of $0.2 million, net of related deferred taxes of $0.2 million, for interest on unrecognized tax benefits. At
December 31, 2008 and 2007, Ticketmaster Entertainment had accrued $0.4 million and $0.8 million, respectively for the payment of interest. There are no material accruals for
penalties.

By
virtue of previously filed separate company and consolidated tax returns with IAC, Ticketmaster Entertainment is routinely under audit by federal, state, local and foreign authorities
in the area of income tax. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts
considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided.
Differences between the reserves for tax contingencies and the amounts owed by Ticketmaster Entertainment are recorded in the period they become known.

The
IRS is currently examining the IAC consolidated tax returns for the years ended December 31, 2001 through 2003, which include the operations of Ticketmaster Entertainment from
January 17, 2003, the date which Ticketmaster Entertainment joined the IAC consolidated tax return. The statutes of limitations for these years have been extended to December 31, 2009.
In early 2009, the IRS commenced an audit of IAC's tax returns for the years ended December 31, 2004 through 2006. The statutes of limitations for these years has been extended and this
examination is expected to be completed in 2011. Various IAC consolidated state and local jurisdictions are currently under

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

examination,
the most significant of which are California, Florida, New York and New York City, for various tax years after December 31, 2001. Ticketmaster Entertainment's operations were
included in these returns from January 17, 2003. These examinations are expected to be completed by late 2009.

Ticketmaster
Entertainment believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.0 million within twelve months of the
current reporting date due to settlements and expirations of applicable statute of limitations. An estimate of other changes in unrecognized tax benefits cannot be made, but such other changes are not
expected to be significant.

NOTE 9LONG TERM DEBT

The balance of long-term debt is as follows (in thousands):

December 31, 200810.75% Senior Notes due July 28, 2016

$
300,0002008 Term Loan A, due July 25, 2013


100,0002008 Term Loan B, due July 25, 2014


350,0002008 Revolver, due July 25, 2013


115,000Total

$
865,000


Ticketmaster Entertainment 10.75% Senior Notes

Overview

In connection with the spin-off, Ticketmaster Entertainment issued $300.0 million aggregate principal amount of
10.75% Senior Notes due 2016 (the "Notes"). Interest is payable semi-annually in cash in arrears on August 1 and February 1 of each year, commencing February 1, 2009.
The Notes are guaranteed by existing and future domestic restricted subsidiaries of Ticketmaster Entertainment.

Redemption

The Notes are redeemable by Ticketmaster Entertainment, in whole or in part, on or after August 1, 2012 at the following prices
(expressed as percentages of the principal amount), plus accrued and unpaid interest, on August 1 of the following years: 105.375% (2012), 102.688% (2013) and 100.00% (2014 and thereafter). At
any time and from time to time prior to August 1, 2012, the Notes are redeemable by Ticketmaster Entertainment at a redemption price equal to 100% of the principal amount plus the greater of
(i) 1% of the principal amount of such Note; and (ii) the excess, if any, of: (A) an amount equal to the present value of (1) the redemption price of such Note at
August 1, 2012, plus (2) the remaining scheduled interest payments on the Notes to be redeemed (subject to the right of holders on the relevant record date to receive interest due on the
relevant interest payment date) to August 1, 2012 (other than interest accrued to the redemption date), computed using a discount rate equal to the Treasury Rate plus 50 basis points; over
(B) the principal amount of the Notes to be redeemed. In addition, up to 35% of the Notes may be redeemed by Ticketmaster Entertainment with proceeds from certain equity offerings before
August 1, 2011 at a price equal to 110.75% of their principal amount, plus accrued and unpaid interest. Ticketmaster Entertainment must also offer to redeem the Notes at 101% of their principal
amount, plus accrued and unpaid interest, if it experiences

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9LONG TERM DEBT (Continued)

certain
kinds of changes of control. Lastly, if Ticketmaster Entertainment or certain of its subsidiaries (specifically, those that are designated restricted subsidiaries under the indenture governing
the Notes) sell assets and do not apply the sale proceeds in a specified manner within a specified time,
Ticketmaster Entertainment will be required to make an offer to purchase Notes at their face amount, plus accrued and unpaid interest to the purchase date.

Certain Covenants

The indenture governing the Notes contains covenants that limit, among other things, Ticketmaster Entertainment's ability and the
ability of its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock; make certain distributions, investments and other restricted payments; sell certain assets;
agree to any restrictions on the ability of restricted subsidiaries to make payments to Ticketmaster Entertainment; merge, consolidate or sell all of Ticketmaster Entertainment's assets; create
certain liens; and engage in transactions with affiliates on terms that are not arm's length. Certain covenants, including those pertaining to incurrence of indebtedness, restricted payments, asset
sales, mergers and transactions with affiliates will be suspended during any period in which the Notes are rated investment grade by both rating agencies and no default or event of default under the
indenture has occurred and is continuing. The Notes contain two incurrence based financial covenants, as defined, requiring a minimum fixed charge coverage ratio of 2.0 to 1.0 and a maximum secured
indebtedness leverage ratio of 2.25 to 1.0. As of December 31, 2008, the Company was in compliance with these incurrence based financial covenants.

Ticketmaster Entertainment Senior Secured Credit Facilities

Overview

Also in connection with the spin-off, on July 25, 2008, Ticketmaster Entertainment and certain of its subsidiaries
entered into a Credit Agreement with a syndicate of banks. The senior secured credit facilities provide financing of up to $650.0 million, consisting of a $100.0 million Term Loan A with
a maturity of five years, a $350.0 million Term Loan B with a maturity of six years and a $200.0 million revolving credit facility (the "Revolver") with a maturity of five years. In
addition, subject to certain conditions, including compliance with certain financial covenants, the senior secured credit facilities permit Ticketmaster Entertainment to incur incremental term loans
and revolving loans in an aggregate principal amount of up to $125.0 million.

Ticketmaster
Entertainment borrowed $15.0 million under the Revolver in connection with the spin-off. On October 27, 2008, the Company borrowed an additional
$100.0 million under the Revolver to fund a portion of the acquisition consideration for an additional interest in Front Line. The available borrowing capacity of the Revolver at
December 31, 2008 was $85.0 million, subject to limitations imposed to maintain compliance with debt covenants which are further discussed below.

Interest Rates

The interest rates per annum applicable to loans under the senior secured credit facilities are, at Ticketmaster Entertainment's
option, equal to either a base rate or a LIBOR rate plus an applicable margin, which in the case of the Term Loan A and the Revolver will vary with the total leverage ratio of Ticketmaster
Entertainment (except that the applicable margin with respect to the Term Loan A and borrowings under the Revolver is fixed at 2.75% per annum for LIBOR loans under the Term Loan A

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9LONG TERM DEBT (Continued)

and
2.25% per annum for LIBOR loans under the Revolver, and 1.75% per annum for base rate loans under the Term Loan A and 1.25% per annum for base rate loans under the Revolver until Ticketmaster
Entertainment delivers financial statements for the quarter ending December 31, 2008). The applicable margin for the Term Loan B is 3.25% per annum for LIBOR loans and 2.25% per annum for base
rate loans. The base rate means the greater of (i) the prime rate as quoted from time to time by JPMorgan Chase Bank, N.A. or (ii) the Federal Funds rate plus 0.5%. The interest rates
for the Term Loan A, Term Loan B and the Revolver at December 31, 2008 were 6.14%, 6.64% and 4.65%, respectively. Interest expense and amortization of debt issuance costs of
$28.1 million was recorded for the year ended December 31, 2008.

Prepayments

The senior secured credit facilities require Ticketmaster Entertainment to prepay outstanding loans, subject to certain exceptions
(including a right of reinvestment of asset sale proceeds in Ticketmaster Entertainment's business) with the proceeds of certain asset sales, casualty insurance and recovery events, the incurrence of
certain indebtedness and with a percentage of annual excess cash flow (which may be reduced to 0% upon the achievement of a specified leverage ratio).

Amortization

The Term Loan A will amortize in an amount equal to 10% of the original principal amount during 2011, 15% in 2012 and 75% in 2013,
payable in quarterly installments with the remaining amount payable on the fifth anniversary of the closing date of the senior secured credit facilities. The Term Loan B will amortize in an amount
equal to 1% per annum in equal quarterly installments commencing with the end of the first fiscal quarter in 2011, with the remaining amount payable on the sixth anniversary of the closing date of the
senior secured credit facilities. Any voluntary prepayments made on the Term Loan A or Term Loan B from time to time may be applied against otherwise scheduled amortization obligations. Any principal
amounts outstanding under revolving loans are due and payable in full at maturity, on the fifth anniversary of the closing date of the senior secured credit facilities.

Guarantee and Security

All obligations under the senior secured credit facilities are unconditionally guaranteed by each of Ticketmaster Entertainment's
existing and future direct and indirect domestic subsidiaries, subject to certain exceptions. The obligations of any foreign subsidiary borrowers under the senior secured credit facilities also are
guaranteed by Ticketmaster Entertainment and the guarantors. All obligations of Ticketmaster Entertainment under the senior secured credit facilities and the guarantees of those obligations are
secured by (subject to certain exceptions) a first priority pledge of all of the equity interests of each of the domestic subsidiaries held by Ticketmaster Entertainment; a first priority pledge of
65% of the equity interests of each of the first-tier foreign subsidiaries of Ticketmaster Entertainment and its subsidiaries; and a first priority security interest in substantially all
of the other assets of Ticketmaster Entertainment and each guarantor. The obligations of each foreign subsidiary borrower under the revolving credit facility also are secured.

F-40

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9LONG TERM DEBT (Continued)

Certain Covenants

The senior secured credit facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, the
ability of Ticketmaster Entertainment and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, pay
dividends and other restricted payments and prepay unsecured indebtedness. The senior secured credit facility has two quarterly financial covenants requiring a maximum total leverage ratio of 3.50 to
1.00 and a minimum interest coverage ratio of 3.00 to 1.00. As of December 31, 2008, the Company was in compliance with these financial covenants. The Company believes it has adequate cash and
cash equivalents and will generate sufficient cash from operations to pay down a portion of its debt, if required, in order to maintain compliance with all financial covenants through
December 31, 2009.

Scheduled Debt Repayments:

As of December 31, 2008, the Company's long-term debt has scheduled repayments for each of the next five years as
follows (in thousands):

Years Ending December 31,2009

$
2010


2011


13,5002012


18,5002013


191,750Thereafter


641,250Total

$
865,000


The
above table does not include projected interest payments the Company is required to pay.

Debt Issuance Costs

Debt issuance costs are amortized using the effective interest method over the terms of the Ticketmaster Entertainment Notes and
related senior secured credit facilities. At December 31, 2008, debt issuance costs of $4.5 million and $21.1 million are included in prepaid expenses and other current assets and
other non-current assets, respectively. Amortization of such costs is included in interest expense in the Consolidated Statements of Operations.

NOTE 10EARNINGS PER SHARE

We compute earnings per share in accordance with SFAS No. 128,Earnings Per Share("SFAS No. 128"). We compute basic
earnings per share using the weighted average number of common shares outstanding for the period. Under the provisions of SFAS No. 128, basic net income per common share is computed by dividing
the net income applicable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share
for the effects of stock options, restricted stock and other potentially dilutive financial instruments in the periods in which such effect is dilutive.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10EARNINGS PER SHARE (Continued)

Basic Earnings Per Share

For the year ended December 31, 2008, we computed basic earnings per share using the weighted average number of shares of common
stock outstanding following the spin-off, as if such shares were outstanding for the entire period prior to the spin-off, plus the weighted average of such shares outstanding
following the spin-off date through December 31, 2008.

For
the years ended December 31, 2007 and 2006, we computed basic earnings per share using the number of shares of common stock outstanding immediately following the
spin-off, as if such shares were outstanding for the entire period.

Diluted Earnings Per Share

For the year ended December 31, 2008, we computed diluted earnings per share using (i) the number of shares of common
stock outstanding immediately following the spin-off, (ii) the weighted average of such shares outstanding following the spin-off date through December 31, 2008,
(iii) if dilutive, the incremental common stock that we would issue upon the assumed exercise of stock options and the vesting of RSUs using the treasury stock method, and (iv) if
dilutive, the incremental common stock that we would issue upon conversion of the Company's Preferred Stock.

For
the years ended December 31, 2007 and 2006, we computed diluted earnings per share using the dilutive impact of all stock-based awards outstanding immediately following the
spin-off, as if such awards were outstanding for the entire period.

The
following table presents our basic and diluted earnings (loss) per share:

For the Years Ended December 31,2008

2007

2006(In thousands, except for per share data)Net income (loss):

$
(1,005,499
)
$
169,351

$
176,701Net earnings (loss) per share available to common stockholders:Basic

$
(17.84
)
$
3.01

$
3.15Diluted

$
(17.84
)
$
3.01

$
3.15Weighted average of number of shares outstanding:Basic


56,353


56,171


56,171Diluted effect of:Options to purchase common stock, RSUs and redeemable preferred stock








Diluted


56,353


56,171


56,171


Weighted
average common shares outstanding includes the incremental shares that would be issued upon the assumed exercise of stock options, vesting of RSUs and conversion
of the Company's Preferred Stock if the effect is dilutive. Because the Company had a net loss from continuing operations in 2008, no potentially dilutive securities were included in the denominator
for computing dilutive earnings per share, since their impact on earnings per share would be anti-dilutive. For the year ended December 31, 2008, approximately 5,700 stock options
and 139,500 RSUs that could potentially dilute basic earnings per share in the future were excluded from the calculation of diluted earnings per share because their inclusion would have been
anti-dilutive.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Upon the spin-off, IAC common stockholders received one-fifth of a share of Ticketmaster Entertainment common stock for each share of IAC common and IAC
class B common stock held.

Concurrent
with its acquisition of a controlling interest in Front Line on October 29, 2008, the Company entered into an employment agreement with Irving Azoff, the Company's new
Chief
Executive Officer, whereby he received 1,750,000 shares of Ticketmaster Entertainment restricted Series A Convertible Preferred Stock ("Preferred Stock"); 1,000,000 shares of restricted
Ticketmaster Entertainment common stock ("Restricted Common Stock"); and an option to purchase 2,000,000 shares of Ticketmaster Entertainment common stock. Subject to, and simultaneously with these
grants of Preferred Stock and Restricted Common Stock, the Azoff Family Trust relinquished 25,918 shares of previously issued restricted Front Line common stock and received the Ticketmaster
Entertainment Preferred Stock and Restricted Common Stock. Refer to Note 3Business Acquisitions for further discussion of Front Line purchase accounting.

Ticketmaster Entertainment Common Stock and Restricted Stock

Our authorized common stock consists of 300,000,000 shares of common stock, par value $0.01 per share. Subject to prior dividend rights
of the holders of any preferred shares, the holders of common stock are entitled to receive dividends, when, and if, declared by our board of directors out of funds legally available for that purpose.
We have not paid any dividends on our common stock since our common stock began trading on the Nasdaq Stock Market. Our Board of Directors has no current plans to pay cash dividends. Each share of
common stock is entitled to one vote per share on matters submitted to a vote of stockholders. In the event of any liquidation, dissolution, or winding-up of the Company after the
satisfaction in full of the liquidation preferences of holders of any preferred shares, holders of shares of common stock are entitled to ratable distribution of the remaining assets available for
distribution to stockholders.

The
Company issued 1,000,000 shares of restricted common stock to the Azoff Family Trust on October 29, 2008. The restricted common stock will vest on the five-year
anniversary of the grant date, subject to Mr. Azoff's continued employment with Front Line or Ticketmaster Entertainment, and may vest earlier in certain limited circumstances. We have recorded
$0.2 million of stock-based compensation cost during 2008 related to the restricted common stock grant.

Series A Convertible Preferred Stock

Our authorized Preferred Stock consists of 25,000,000 shares of Preferred Stock, par value $0.01 per share, of which 2,100,000 shares
have been designated Series A Convertible Preferred Stock, par value $0.01. On October 29, 2008, the Company issued 1,750,000 restricted shares of Series A Convertible Preferred
Stock to the Azoff Family Trust. The shares of Preferred Stock are entitled to a 3% annual paid in kind dividend, subject to declaration by the Ticketmaster Entertainment board of directors out of
funds legally available therefor. The Preferred Stock, which votes on an as converted basis with Ticketmaster Entertainment common stock, will be mandatorily redeemable by Ticketmaster Entertainment
at its liquidation preference on the fifth anniversary of its issuance and is convertible at any time prior to redemption into shares of restricted common stock based on a conversion price of $20 per
common share. The Preferred Stock (or the restricted common stock, if converted) will vest on the fifth anniversary of the grant date, subject to Mr. Azoff's continued employment with Front
Line or Ticketmaster Entertainment and may vest earlier in certain limited circumstances. We are recognizing

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Continued)

compensation
expense over the vesting term. At December 31, 2008, the aggregate amount of unpaid dividends on the Preferred Stock was $0.2 million.

Due
to the nature of the redemption feature and other provisions, the Company classified the Preferred Stock as temporary equity. We have recorded the portion of the value that has
accreted of the Preferred Stock allocated to the requisite service period that has passed of $8.8 million as Redeemable Preferred Stock in the consolidated balance sheet as of
December 31, 2008. The value of the Preferred Stock attributed to the remaining service period of $31.2 million is being accreted to its redemption value over a period of five years with
a charge to stock-based compensation expense. The redemption value of the Preferred Stock was $40.6 million. We have recorded $1.0 million of stock-based compensation expense for the
year ended December 31, 2008 related to the Preferred Stock.

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION

In 2008, the Company's Board of Directors and stockholders approved the Ticketmaster Entertainment 2008 Stock and Annual Incentive Plan (the "Plan") whereby we can grant RSUs,
performance stock units ("PSUs"), stock options and other stock-based awards to officers, employees, directors and consultants.

RSUs
are awards whose value to the holder is based upon the market value of our stock when the RSUs vest. Our RSUs are generally subject to performance-based vesting or service-based
vesting where a specific period of continued employment must pass before an award vests. Typically, a portion of the RSUs granted vest periodically over the term of the grant. The terms and conditions
upon which the stock options become exercisable vary among grants.

The
maximum number of shares that may be awarded under the Plan is the sum of (a) the number of shares that may be issuable upon exercise or vesting of IAC stock-based
compensation awards that were converted into Ticketmaster Entertainment stock-based compensation awards in connection with the spin-off ("Adjusted Awards") and (b) 5,000,000. The
maximum number of shares that may be granted pursuant to options intended to be incentive stock options is 3,333,333 shares. Shares subject to an award under the Plan may be an authorized and unissued
share or may be treasury shares. No single participant may be granted awards in excess of 3,333,333 shares during the term of the Plan, provided that Adjusted Awards are not subject to this
limitation.

As
of December 31, 2008, we had approximately 2.4 million shares of common stock available for new grants under the Plan.

In
addition, the Plan described above has a stated term of ten years and provides that the exercise price of stock options granted will not be less than the market price of the Company's
common stock on the grant date. The Plan does not specify grant dates or vesting schedules as those determinations have been delegated to the Compensation and Human Resources Committee of Ticketmaster
Entertainment's Board of Directors (the "Committee"). Each grant agreement reflects the vesting schedule for that particular grant as determined by the Committee. Broad-based stock option awards
issued to date have generally vested in equal annual installments over a four-year period, and RSU awards issued to date have generally vested in equal annual installments over a
five-year period, in each case, from the grant date. PSU awards issued to date will generally cliff vest at the end of a three-year period from the date of grant. In addition
to equity awards outstanding under the Plan

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION (Continued)

discussed
above, stock options and other equity awards outstanding under plans assumed in acquisitions are reflected in the information set forth below.

As
described below in "Modification of Stock-Based Compensation Awards," certain stock options, restricted stock, RSUs, and other equity based awards granted to our employees, officers,
directors, and consultants by IAC prior to the spin-off were converted into awards based on our common stock in connection with the spin-off. For the period from
January 1, 2008 to August 19, 2008 and for the year ended December 31, 2007 and 2006, IAC allocated to us stock-based compensation expense that was attributable to our employees.

On
October 29, 2008, the Company granted Mr. Azoff an option to purchase 2,000,000 shares of Ticketmaster Entertainment common stock. The option vests in equal annual
installments over four years (and may vest earlier in specified circumstances), and has a per share exercise price of $20.00 and a ten year term.

Stock-based
compensation expense related to stock options, restricted stock, RSUs and PSUs is included in the following line items in the accompanying Consolidated Statements of
Operations for the years ended December 31, 2008, 2007 and 2006 (in thousands):

Years ended December 31,2008

2007

2006Cost of sales

$
1,197

$
800

$
654Selling and marketing expense


1,302


876


646General and administrative expense


21,232


10,896


6,539Stock-based compensation expense before income taxes


23,731


12,572


7,839Income tax benefit


(9,019
)

(5,305
)

(3,424
)Stock-based compensation expense after income taxes

$
14,712

$
7,267

$
4,415


The
amount of stock-based compensation expense recognized in the Consolidated Statements of Operations is reduced by estimated forfeitures, as the amount recorded is based on awards
ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if the actual forfeiture rate differs
from the estimated rate.

As
of December 31, 2008, there was approximately $89.8 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards,
including the Preferred Stock referred to in Note 11Redeemable Preferred Stock and Stockholders' Equity. This cost is expected to be recognized over a weighted-average period of
approximately 2.6 years.

Modification of Stock-Based Compensation Awards

In connection with the spin-off of Ticketmaster Entertainment and the spin-offs of the three other Spincos, all
existing IAC stock-based compensation awards, which included RSUs, stock options and warrants, granted on or prior to December 31, 2007 were modified as follows:



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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION (Continued)



The
modification of IAC stock-based compensation awards, including the accelerated vesting of certain awards (described above), resulted in an additional $5.6 million in
stock-based compensation of which $4.5 million was recognized as expense during the period from August 20, 2008 through December 31, 2008. The modification of IAC stock-based
compensation awards affected approximately 640 Ticketmaster Entertainment employees.

F-46

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION (Continued)

Stock Options

The following table presents a summary of changes in outstanding stock options from August 20, 2008, the date of the
spin-off from IAC, through December 31, 2008:

December 31, 2008Shares

Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value(Shares and intrinsic value in thousands)Outstanding at August 20, 2008 (date of spin-off)


3,357

$
33.94Granted


2,440


23.89Exercised


(7
)

6.67Forfeited


(140
)

38.55Outstanding at December 31, 2008


5,650

$
29.52


7.63

$
127Exercisable at December 31, 2008


1,307

$
30.17


2.97

$
127Expected to vest at December 31, 2008


4,019

$
28.77


9.11

$



The
fair value of each stock option award is estimated on the grant date using the Black-Scholes option pricing model.

The
Black-Scholes option pricing model incorporates various assumptions, including expected volatility and expected term. For purposes of this model, no dividends have been assumed.
Expected stock price volatilities are estimated based on implied volatilities of traded options and the historical volatility of stocks of similar companies since the Company does not have sufficient
trading history to reasonably predict its own volatility. The risk-free interest rates are based on U.S. Treasury yields for notes with comparable terms as the awards, in effect at the
grant date. The expected term of options granted is based on analyses of historical employee termination rates and option exercise patterns, giving consideration to expectations of future employee
behavior. The following assumptions were used to calculate the fair value of the Company's options for the period from August 20, 2008 (date of spin-off) through December 31,
2008:

2008Risk-free interest rate


3.01% - 3.63%Expected term (in years)


5 - 6Dividend yield


0.0%Weighted average volatility


60.88%


The
weighted average grant-date fair value of stock options granted for the period from August 20, 2008 (date of spin-off) through December 31, 2008
was $4.04. The total intrinsic value of stock options exercised during the period from August 20, 2008 (date of spin-off) through December 31, 2008 was $78,000. Cash received
from stock option exercises and the related actual tax benefit realized for the year ended December 31, 2008 were approximately $50,000 and $21,000, respectively.

F-47

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION (Continued)

Restricted Stock, Restricted Stock Units and Performance Stock Units

RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of Ticketmaster
Entertainment common stock and with the value of each RSU equal to the fair value of Ticketmaster Entertainment common stock at the date of grant. RSUs may be settled in cash, stock or both, as
determined by the Committee at the time of grant. The majority of RSUs are settled in stock and are classified as equity. Each restricted stock, RSU and PSU grant is subject to service-based vesting,
where a specific period of continued employment must pass before an award vests. PSUs also include performance-based vesting, where certain performance targets set at the time of grant must be
achieved before an award vests. The Company recognizes expense for all restricted stock, RSUs and PSUs for which vesting is considered probable. For restricted stock and RSU grants to U.S. employees,
the accounting charge is measured at the grant date as the fair value of Ticketmaster Entertainment common stock and expensed straight-line as stock-based compensation expense over the vesting term.
For PSU grants to U.S. employees, the expense is measured at the grant date as the fair value of Ticketmaster common stock and expensed as stock-based compensation when the performance targets are
considered probable of being achieved.

The
following table presents a summary of unvested restricted common stock, RSUs and PSUs from August 20, 2008 (date of spin-off) through December 31, 2008:

Restricted Stock

RSUs

PSUsNumber of
shares

Weighted
Average Grant
Date Fair Value

Number of
shares

Weighted
Average Grant
Date Fair Value

Number of
shares(a)

Weighted
Average Grant
Date Fair Value(Shares in thousands)Outstanding at August 20, 2008 (date of spin-off)




$



795

$
35.39


235

$
45.83Granted


1,000


9.14


129


21.64





Vested








(3
)

31.22





Forfeited








(519
)

35.04


(65
)

48.29Unvested at December 31, 2008


1,000

$
9.14


402

$
31.44


170

$
44.89


The
weighted average fair value of restricted stock, RSUs and PSUs granted during the period from August 20, 2008 (date of spin-off) through December 31, 2008
is based on market prices of Ticketmaster Entertainment's common stock on the grant date. The total fair value of restricted stock, RSUs and PSUs that vested during the period from August 20,
2008 (date of spin-off) through December 31, 2008 was zero.

Stock-Based Compensation of Acquired Companies

Front Line

In June 2006, Front Line issued options to acquire 3,402 shares of Front Line common stock to a senior executive. The options vest,
subject to the executive's continued employment with Front Line, 25% upon issuance, an additional 5% on July 20, 2006 and an additional 5% every three months thereafter from July 20,
2006. The value of the options was calculated at the date of grant using the

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12SFAS 123R AND STOCK-BASED COMPENSATION (Continued)

Black-Scholes
option pricing model with the following assumptions: no dividends, volatility of 25%, risk-free interest rate of 4.0%, and an expected life of ten years. The expected life of
options granted was estimated based on the term of the options and the expectations of the option life for the senior executive. The expected volatility factor was based on historical volatility of
comparable publicly traded entities. The risk-free interest rate was based on the U.S. treasury yield curve in effect at the date of the grant for a period equal to the expected term of
the option. Front Line has recorded $78,000 of stock-based compensation expense for the period from October 29, 2008
(date of step-acquisition by Ticketmaster Entertainment) through December 31, 2008 related to stock options.

Certain
Front Line executives have received grants of restricted shares of Front Line's common stock in conjunction with their continued employment with Front Line. Front Line recognizes
expense for all restricted stock and measures expense at the grant date as the fair value of the Front Line common stock and records the expense straight-line as stock-based compensation
expense over the vesting term. The value of the restricted stock is based on values of Front Line equity transactions near the grant date of the restricted stock. Front Line has recorded
$0.8 million in stock-based compensation expense related to the restricted stock for the period from October 29, 2008 (date of step-acquisition by Ticketmaster Entertainment)
through December 31, 2008.

In
October 2008, in connection with the acquisition of a controlling interest in Front Line by Ticketmaster Entertainment, the Azoff Family Trust relinquished 25,918 shares of previously
issued restricted Front Line common stock and received Ticketmaster Entertainment Preferred Stock and Restricted Common Stock. The transaction, for accounting purposes, was treated as an exchange.
Refer to Note 11Redeemable Preferred Stock and Stockholders' Equity.

As
of December 31, 2008, there was approximately $23.0 million of unrecognized compensation cost related to all Front Line equity-based awards outstanding.

NOTE 13EQUITY INVESTMENTS IN UNCONSOLIDATED AFFILIATES

At December 31, 2008 and 2007 Ticketmaster Entertainment's equity investments in unconsolidated affiliates totaled $12.9 million and $145.2 million, respectively,
and are included in "Long-term investments" in the accompanying consolidated balance sheets.

On
October 29, 2008, Ticketmaster Entertainment acquired additional interests in Front Line, a portion of which was acquired from Warner Music Group for $123.0 million. The
remaining equity interests were acquired in a transaction that, for accounting purposes, was treated as an exchange by a trust controlled by Mr. Azoff of certain Front Line equity awards for
certain Ticketmaster equity awards. The Company acquired additional ownership interests of 42.9% in the aggregate, resulting in a controlling interest in Front Line of 82.3% (approximately 74% on a
diluted basis). Refer to Note 3Business Acquisitions for discussion of purchase accounting and Note 11Redeemable Preferred Stock and Stockholders' Equity for further
information regarding the exchange of awards. Ticketmaster Entertainment's 39.4% ownership interest in Front Line prior to the acquisition was accounted for under the equity method of accounting.
Income related to the investment in Front Line, which totaled $1.2 million, $2.9 million, and $0.7 million in the years ended December 31, 2008, 2007 and 2006,
respectively, is included in 'Other income (expense)' in the accompanying Consolidated Statements of Operations. The results of Front Line were consolidated with Ticketmaster Entertainment effective
October 29, 2008.

The
Company also maintains a 15% investment in Broadway China Ventures and accounts for its investment on a cost basis.

F-49

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13EQUITY INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Continued)

The following is a list of investments accounted for under the equity method, the principal market in which the investee operates, and the relevant ownership percentage:

December 31,
2008

December 31,
2007iLike.com (United States)


25
%

25
%Beijing Gehua Ticketmaster Ticketing Co., Ltd. (China)


40
%

40
%TM Mexico (Mexico)


33.3
%

33.3
%Front Line (United States)





45.99
%


Summarized
aggregated financial information of Ticketmaster Entertainment's equity investments is as follows (in thousands):

2008

2007

2006Current assets

$
46,131

$
93,693

$
27,037Non-current assets


7,721


176,174


8,113Current liabilities


32,005


45,620


7,774Non-current liabilities





13,877


Net sales


45,979


156,789


25,176Gross profit


33,077


94,166


17,522Net income


4,164


16,257


8,992


Ticketmaster
Entertainment received dividends from TM Mexico of $3.5 million, $7.3 million and $1.0 million during the years ended December 31, 2008, 2007 and
2006, respectively.

Impairment of Investments

In September 2006, Ticketmaster Entertainment acquired a 25% interest in iLike.com, a leading online social music discovery service for
$13.3 million to provide features designed to enhance the overall consumer experience on Ticketmaster.com. As of December 31, 2008, Ticketmaster Entertainment determined that the
investment in iLike.com had suffered an other than temporary impairment loss, after giving consideration to, among other things, iLike.com's current negative financial and operational condition and
the decline in market value of the investment. Accordingly, Ticketmaster Entertainment recorded an other than temporary impairment loss of $5.8 million to reduce the equity investment in
iLike.com to its estimated fair value during the year ended December 31, 2008.

In
November 2006, Ticketmaster Entertainment invested $1.5 million for a 40% interest in a joint venture with Beijing Gehua to supply ticketing services for the 2008 Beijing
Summer Olympic Games. During 2008, Ticketmaster Entertainment had incurred losses in excess of its initial investment. In addition, Ticketmaster Entertainment has been involved in a dispute with the
joint venture partners related to certain costs it had incurred on behalf of the joint venture and has negotiated a settlement with its joint venture partners. As part of the settlement, the Company
will not recover its costs from the joint venture partners, and therefore, the Company recorded an "other than temporary" impairment loss of $6.5 million as of December 31, 2008.

F-50

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14RELATED PARTY TRANSACTIONS

Prior to the spin-off, our operating expenses included allocations from IAC for accounting, treasury, legal, tax, corporate support, human resource functions, and internal
audit functions. These expenses were allocated based on the ratio of Ticketmaster Entertainment's revenue as a percentage of IAC's total revenue. Expense allocations from IAC were $1.8 million
from the period from January 1, 2008 to August 19, 2008, and $3.5 million and $2.6 million for the years ended December 31, 2007 and 2006, respectively, and are
included in general and administrative expense in our Consolidated Statements of Operations. Included in interest income (expense), net in the accompanying Consolidated Statements of Operations was
$8.3 million related to a cumulative true-up of intercompany interest income recorded during the second quarter of 2008. The expense allocations from IAC ceased upon consummation of
the spin-off.

Ticketmaster
Entertainment occupies office space in buildings in Los Angeles and New York City that are currently owned by IAC. Related rental expense charged to Ticketmaster
Entertainment by IAC totaled $2.9 million, $2.4 million and $1.7 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The
majority of the interest income recorded in our Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 arose from intercompany receivables
from IAC and its subsidiaries. The interest income from IAC ceased upon the extinguishment of all intercompany receivables upon consummation of the spin-off.

During
the second quarter of 2008, IAC recorded an $8.3 million cumulative true-up of intercompany interest income. Accordingly, the portion of interest expense
reflected in the consolidated statement of operations that is intercompany in nature was $1.4 million for the year ended December 31, 2008. The portion of interest income reflected in
the Consolidated Statements of Operations that is intercompany in nature was $27.8 million and $30.5 million for the years ended December 31, 2007 and December 31, 2006,
respectively.

An
analysis of Ticketmaster Entertainment's receivables from IAC and subsidiaries is as follows (in thousands):

2008

2007Receivables from IAC and subsidiaries at beginning of year

$
474,110

$
539,861Cash transfers from IAC related to its centrally managed U.S. treasury function


191,908


(83,052
)Interest (expense) income


(1,446
)

27,793Employee equity instruments and associated tax withholdings


4,053


8,141Taxes (excludes tax withholdings associated with employee equity instruments)


(68,915
)

8,925Allocation of non-cash compensation expense


(12,895
)

(10,128
)Administrative expenses and other


17,548


(17,430
)Receivables from IAC and subsidiaries at August 20, 2008 and December 31, 2007, respectively


604,363


474,110Extinguishment of receivable from IAC and subsidiaries by recording a non-cash distribution


(604,363
)

Receivables from IAC and subsidiaries at end of year

$


$
474,110


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14RELATED PARTY TRANSACTIONS (Continued)

Relationship between IAC and Ticketmaster Entertainment after the spin-off

For purposes of governing certain of the ongoing relationships between IAC and Ticketmaster Entertainment at and after the
spin-off, and to provide for an orderly transition, IAC and Ticketmaster Entertainment and the other Spincos entered into a separation agreement and a tax sharing agreement, among other
agreements.

Separation Agreement

As part of the separation agreement, (i) IAC contributed to Ticketmaster Entertainment all of the subsidiaries and assets
comprising the Ticketmaster Businesses, (ii) Ticketmaster Entertainment assumed all of the liabilities related to the Ticketmaster Entertainment businesses, (iii) each party agreed to
indemnify the other and its respective affiliates, current and former directors, officers and employees for any losses arising out of any breach of any of the spin-off agreements and
(iv) Ticketmaster Entertainment agreed to indemnify IAC for its failure to assume and perform any assumed liabilities and any liabilities relating to Ticketmaster Entertainment financial and
business information included in the SEC documentation filed with respect to the spin-off as well as such other terms as to which IAC and Ticketmaster Entertainment mutually agreed.

Tax Sharing Agreement

The tax sharing agreement governs the respective rights, responsibilities and obligations of IAC and Ticketmaster Entertainment after
the spin-off with respect to taxes for the periods ended on or before the spin-off. Generally, IAC agreed to pay taxes with respect to Ticketmaster Entertainment income
included on its consolidated, unitary or combined federal or state tax returns, including audit adjustments with respect thereto, but other pre-distribution taxes that are attributable to
Ticketmaster Entertainment, including taxes reported on separately-filed returns and all foreign returns and audit adjustments with respect thereto were agreed to be borne solely by Ticketmaster
Entertainment. The tax sharing agreement contains certain customary restrictive covenants that generally prohibit Ticketmaster Entertainment (absent a supplemental Internal Revenue Service ruling or
an unqualified opinion of counsel to the contrary, in each case, in a form and substance satisfactory acceptable to IAC in its sole discretion) from taking actions that could jeopardize the tax free
nature of the spin-off. Ticketmaster Entertainment agreed to indemnify IAC for any taxes and related losses resulting from its non-compliance with these restrictive covenants,
as well as for the breach of certain
representations in the spin-off agreements and other documentation relating to the tax-free nature of the spin-off.

Agreements with Liberty Media Corporation

In connection with the spin-off, the Company assumed from IAC all of IAC's rights and obligations relating to Ticketmaster
Entertainment under a Spinco Agreement between IAC and Liberty Media Corporation ("Liberty"), providing for post-spin-off governance arrangements at the Company. As of
February 10, 2009, Liberty beneficially owned approximately 29.1% of the shares of common stock of the Company. The following summary briefly describes the material terms of those governance
arrangements and related matters and is qualified by reference to the full Spinco

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14RELATED PARTY TRANSACTIONS (Continued)

Agreement
and the assignment agreement, which are included as Exhibits 10.6 and 10.7 to this Annual Report:



The
Company is also party to a registration rights agreement with Liberty providing Liberty certain rights to gain registration under the Securities Act of their shares, among other
things.

NOTE 15COMMITMENTS

Ticketmaster Entertainment leases office space, equipment and services used in connection with its
operations under various operating leases, many of which contain escalation clauses. The Company records rent expense on a straight-line basis over the lease term.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 15COMMITMENTS (Continued)

Future
minimum payments under operating lease agreements are as follows (in thousands):

Years Ending December 31,2009

$
25,5072010


20,8472011


16,0462012


12,5152013


8,308Thereafter


24,099Total

$
107,322


Expenses
charged to operations under lease agreements were $25.4 million, $20.1 million and $16.0 million in the years ended December 31, 2008, 2007 and 2006,
respectively, and include month-to-month and one-time charges relating to leases that do not require future minimum payments. In addition, rent expense charged to
Ticketmaster Entertainment by IAC, for which no minimum payments are required, totaled $ 1.7 million, $2.4 million and $1.7 million in the years ended December 31, 2008,
2007 and 2006, respectively. Subsequent to the spin-off, Ticketmaster Entertainment entered into operating lease agreements with IAC to rent office space in New York and in California.
These lease agreements do not contain renewal options and will terminate in the second half of 2009, unless extensions are negotiated. See Note 14Related Party Transactions for a
further discussion of transactions between Ticketmaster Entertainment and IAC.

Ticketmaster
Entertainment also has funding commitments that could potentially require its performance in the event of demands by third parties or contingent events, such as under
letters of credit extended or under guarantees of debt, as follows (in thousands):

Years ending December 31,2009

2010

2011

2012

2013

Thereafter

TotalGuarantees, surety bonds and letters of credit

$
1,743

$
210

$
3,250

$


$
400

$


$
5,603Purchase obligations


33,400


27,432


21,213


14,905


1,220


12,176


110,346Estimated earn-outs relating to prior acquisitions


1,500


6,500














8,000Total commercial commitments

$
36,643

$
34,142

$
24,463

$
14,905

$
1,620

$
12,176

$
123,949


IAC
guaranteed a $3.25 million line of credit granted to one of Ticketmaster Entertainment's clients in connection with the production of Broadway shows in China. According to the
terms of the
spin-off, the guarantee was transferred from IAC to Ticketmaster Entertainment and, accordingly, the guarantee is included in the table above. The surety bonds primarily relate to
marketing events and licensing bonds for ticketing services. The purchase obligations primarily arise from sports sponsorship agreements intended to promote Ticketmaster Entertainment's ticket resale
services.

The
Company has certain contingent obligations related to prior acquisitions made by Front Line. As of December 31, 2008, contingent consideration of $8.0 million
represents commitments not yet accrued for in the accompanying Consolidated Balance Sheets or paid, that remain subject to payout

F-54

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 15COMMITMENTS (Continued)

following
the achievement of future performance targets. Such contingent payouts may be payable over the next two years.

NOTE 16CONTINGENCIES

In the ordinary course of business, Ticketmaster Entertainment is a party to various lawsuits. Ticketmaster Entertainment establishes reserves for specific legal matters when it
determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. The following is a summary of pending legal matters for which the Company maintains no
established reserve as we do not believe the likelihood of unfavorable outcomes are probable or the losses are reasonably estimable.



On October 21, 2003, a purported representative action was filed in California state court, challenging Ticketmaster
Entertainment's charges to online customers for UPS ticket delivery. The complaint alleged in essence that it is unlawful for Ticketmaster Entertainment not to disclose on its website that the fee it
charges to online customers to have their tickets delivered by UPS contains a profit component. The complaint asserted a claim for violation of Section 17200 of the California Business and
Professions Code and sought restitution or disgorgement of the difference between (i) the total UPS delivery fees charged by Ticketmaster Entertainment in connection with online ticket sales
during the applicable statute of limitations period, and (ii) the amount Ticketmaster Entertainment paid to UPS for that service.

On
August 31, 2005, the plaintiffs filed an amended class-action and representative-action complaint alleging (i) as before, that Ticketmaster Entertainment's website
disclosures in respect of its charges for UPS ticket delivery violate Section 17200 of the California Business and Professions Code, and (ii) for the first time, that Ticketmaster
Entertainment's website disclosures in respect of its ticket order-processing fees constitute false advertising in violation of Section 17500 of the California Business and Professions Code. On
this latter claim, the amended complaint seeks restitution or disgorgement of the entire amount of order-processing fees charged by Ticketmaster Entertainment during the applicable statute of
limitations period.

On
August 14, 2006, the plaintiffs filed a motion for class certification, which Ticketmaster Entertainment opposed. On September 25, 2006, Ticketmaster Entertainment filed
a motion for judgment on the pleadings, which the plaintiffs opposed. On November 21, 2006, Ticketmaster Entertainment requested that the court stay the case pending the California Supreme
Court's decisions in two cases (In re Tobacco II Cases, 142 Cal. App. 4th 891, andPfizer Inc. v.
Superior Court (Galfano), 141 Cal. App. 4th 290) that present issues concerning the interpretation of Proposition 64 that are directly pertinent to both of
the pending motions. The plaintiffs opposed Ticketmaster Entertainment's request. On November 29, 2006, the court ordered that the case be stayed pending the California Supreme Court's ruling
on the two cases referenced above.

On
February 20, 2009, plaintiffs filed a motion for leave to file a second amended complaint, which purports to add the allegation that Ticketmaster Entertainment's order
processing fees are unconscionably high. Ticketmaster Entertainment opposed the motion on March 16, 2009. The hearing is scheduled for April 1, 2009.

F-55

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16CONTINGENCIES (Continued)



On November 30, 2001, a purported securities class action was filed against Ticketmaster Entertainment and other defendants in
the U.S. District Court for the Southern District of New York. Plaintiff's suit was brought on behalf of purchasers of Ticketmaster Entertainment common stock during the period from the date of its
initial public offering through December 6, 2000, and alleged violations by Ticketmaster Entertainment of Section 10(b) of the Securities Exchange Act of 1934 and Section 11 of
the Securities Act of 1933. Plaintiff alleged that Ticketmaster Entertainment failed to disclose that its underwriters were to receive undisclosed and excessive compensation and had agreed to allocate
shares in the IPO to customers in exchange for agreements to purchase shares in the aftermarket at pre-determined prices. This action was later consolidated with hundreds of similar
actions against issuers and underwriters in the U.S. District Court for the Southern District of New York inIn re Initial Public Offering Securities
Litigation, No. 21 MC 92 (S.D.N.Y.). On February 19, 2003, the court granted a motion to dismiss the Section 10(b) claim against Ticketmaster
Entertainment, but denied the motion as to the Section 11 claim against Ticketmaster Entertainment.

On
October 13, 2004, the district court granted a motion for class certification in the six so-called class certification "focus" cases in the consolidated litigation.
(Ticketmaster Entertainment is not a party in any of these focus cases.) On December 5, 2006, the U.S. Court of Appeals for the Second Circuit reversed the trial court's decision. On
August 14, 2007, plaintiffs filed amended complaints containing new class definitions in the six class certification focus cases. On September 27, 2007, plaintiffs moved for
certification of the classes in these cases. On November 13, 2007, the issuer defendants filed a motion to dismiss the amended complaints in the focus cases. On March 26, 2008, the
district court granted this motion in part and denied it in part. Accordingly, this action remains pending against Ticketmaster Entertainment.



In February of 2009, five putative consumer class action complaints were filed in Canada against TNow Entertainment Group, Inc.,
Ticketmaster Entertainment, Ticketmaster Canada Ltd., and Premium Inventory, Inc. All of the cases allege essentially the same set of facts and causes of action: each plaintiff purports
to represent a class consisting of all persons who purchased a ticket from Ticketmaster Entertainment, Ticketmaster Canada or TicketsNow from early February of 2007 to the present. Each proposed class
purports to extend to United States as well as Canadian consumers. The complaints allege in essence that Ticketmaster Entertainment and Ticketmaster Canada conspired to divert a large number of
tickets for resale through the TicketsNow website at prices higher than face value in violation of Ontario's Ticket Speculation Act, the Amusement Act of Manitoba, the Amusement Act of Alberta, and
the Quebec Consumer Protection Act, respectively. The Ontario case contains the additional allegation that Ticketmaster Entertainment and TicketsNow's service fees run afoul of
anti-scalping laws. Each lawsuit seeks $500 million in compensatory damages and $10 million in punitive damages on behalf of the class.



On February 6, 2009, a purported class action complaint asserting several causes of action under the federal antitrust laws as
well as California and New York consumer protection laws was filed against Ticketmaster Entertainment and TicketsNow. The lawsuit alleges that Ticketmaster

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16CONTINGENCIES (Continued)

Entertainment
and TicketsNow unlawfully attempted to monopolize and/or have monopolized the market for secondary tickets and deceived consumers by, among other things, selling large quantities of
tickets to TicketsNow's ticket brokers, either prior to or at the time that tickets for an event go on sale, thereby forcing consumers to purchase tickets at significantly marked-up prices
on TicketsNow instead of Ticketmaster.com. Plaintiff seeks actual damages or restitution in an amount to be determined at trial and attorneys fees and costs.

On
February 20, 2009, a putative class action lawsuit was filed against Ticketmaster Entertainment, Inc. in the Central District of California. The plaintiff purports to
represent a nationwide class of consumers consisting of "all persons who inadvertently purchased tickets from TicketsNow.com as a result of deceptive and unfair business practices engaged in by
Ticketmaster Entertainment between January 1, 2005 to the present and who were damaged thereby." The plaintiff claims that Ticketmaster Entertainment violated California's Business and
Professions code by redirecting consumers from Ticketmaster.com to Ticketsnow.com, thereby engaging in false advertising and an unfair business practice by deceiving consumers into inadvertently
purchasing tickets from TicketsNow for amounts greater than face value. The plaintiff claims Ticketmaster Entertainment has been unjustly enriched by this conduct and seeks compensatory damages, a
refund to every class member of the difference between face value and the amount paid to TicketsNow, an injunction preventing Ticketmaster Entertainment from engaging in further unfair business
practices with TicketsNow, and attorney fees and costs.

On
March 23, 2009, a purported class action complaint asserting causes of action under California's Business and Professions Code and the California Consumer Legal Remedies Act
was filed against Ticketmaster Entertainment and TicketsNow. The lawsuit alleges that Ticketmaster and TicketsNow committed unfair business practices by, among other things, "redirecting" consumers
from Ticketmaster.com to TicketsNow.com. Plaintiff purports to represent a nationwide class consisting of "all persons who were redirected from Ticketmaster.com to TicketsNow.com and purchased tickets
above face value from TicketsNow.com." Plaintiff seeks disgorgement and restitution on behalf of the class and attorneys fees and costs.



Two putative securities class actions were filed in California Superior Court against Ticketmaster Entertainment and its Board of
Directors on February 13, 2008 and February 20, 2008, respectively. The plaintiff in the first case alleges that the Live Nation transaction (the "Transaction") delivers insufficient
value to Ticketmaster Entertainment stockholders that the Board of Directors of Ticketmaster Entertainment failed to adequately consider alternative transactions; and that Ticketmaster Entertainment
insiders benefit disproportionately from the Transaction. Among other things, the complaint seeks an injunction against the consummation of the Transaction and compensatory damages for Ticketmaster
Entertainment stockholders. The second putative class action was filed against Ticketmaster Entertainment and the members of its Board in the same Los Angeles court in which the first complaint was
filed. The focus of this case is the alleged failure of Ticketmaster Entertainment to obtain the highest price and on alleged insufficiencies in the deal protections. Also included is a disclosure
claim, which alleges that Ticketmaster Entertainment wrongfully failed to disclose certain antitrust-related schedules with the merger agreement, which plaintiff alleges makes it difficult for
stockholders to assess certain provisions of the merger agreement. The Company believes both actions are without merit and intends to defend them vigorously.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17FAIR VALUE MEASUREMENTS

In accordance with SFAS No. 157,Fair Value Measurements("SFAS No. 157"), the Company maximizes the use of observable
inputs and minimizes the use of unobservable inputs when developing fair value measurements. When available, the Company uses quoted market prices to measure fair value. If market prices are not
available, fair value measurement is based upon models that use primarily market-based or independently-sourced market parameters. If market observable inputs for model-
based valuation techniques are not available, the Company will be required to make judgments about assumptions market participants would use in estimating the fair value of the financial instrument.
Fair values of cash and cash equivalents, short-term accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts because of their
short-term nature. Marketable securities are recognized in the balance sheets at their fair values based on quoted prices. Long-term debt is carried at cost. However, the
Company is required to estimate the fair value of long-term debt under SFAS No. 107,Disclosures about Fair Values of Financial
Instruments. ("SFAS No. 107") The fair value of long-term debt is estimated based on market prices or third-party quotes.

The
provisions of SFAS No. 157 related to nonfinancial assets and liabilities will be effective for the Company on January 1, 2009 in accordance with FSP
FAS 157-2,Effective Date of FASB Statement No. 157and will be applied prospectively. The Company is currently evaluating the
impact that these additional provisions will have on the Company's consolidated financial statements.

In
October 2008, the FASB issued FSP FAS 157-3,Determining the Fair Value of a Financial Asset When the Market for That Asset is Not
Active, to clarify how an entity would determine fair value in an inactive market. FSP 157-3 was effective immediately and applied to the Company's consolidated
financial statements for the year ended December 31, 2008. The application of the provisions of FSP 157-3 did not materially impact the Company's consolidated financial statements.

On
January 1, 2008, SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an Amendment of FASB
Statement No. 115("SFAS No. 159") became effective. SFAS No. 159 allows an entity to choose to measure certain financial instruments and liabilities at
fair value on its balance sheet on a contract-by-contract basis. The Company has elected not to adopt the fair value option on SFAS No. 159 on its existing financial
instruments.

SFAS
No. 157 establishes a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) quoted prices (unadjusted) in active markets
for identical assets and liabilities (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2), and
(iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table presents
information about assets required to be carried at fair value on a recurring basis at December 31, 2008 (in thousands):

Total

Level 1Marketable securities

$
1,495

$
1,495


The
Company estimated the fair value of its long-term debt by using market prices or third party quotes. The below table summarizes the fair value estimates, at
December 31, 2008 (in thousands):

Carrying
Amount

Estimated
Fair ValueLong-term debt

$
865,000

$
532,800


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 18SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental Disclosure of Non-Cash Transactions

In accordance with the terms of the spin-off, IAC transferred its equity investment in Front Line, valued at
$125.8 million at December 31, 2007, to Ticketmaster Entertainment. Additionally, Ticketmaster Entertainment transferred its investment in Active.com, valued at $4.0 million at
December 31, 2007, to IAC. The net amount of these transfers, which is included in "Net transfers from IAC" in the accompanying Consolidated Statements of Redeemable Preferred Stock and
Stockholders' Equity, was $96.6 million and $(2.3) million in the years ended December 31, 2007 and 2006, respectively.

On
August 20, 2008, in conjunction with the spin-off, Ticketmaster Entertainment extinguished all intercompany receivable balances from IAC and its subsidiaries, which
totaled $604.4 million by recording a non-cash distribution to IAC. See Note 14Related Party Transactions.

Supplemental Disclosure of Cash Transactions

Years Ended December 31,2008

2007

2006(In thousands)Cash paid during the period for:Interest

$
12,940

$
822

$
302Income tax payments, including amounts paid to IAC for Ticketmaster Entertainment's share of IAC's consolidated tax liability, net of tax
refunds

$
42,983

$
96,107

$
91,214


NOTE 19BENEFIT PLANS

During the three year period ended December 31, 2008, Ticketmaster Entertainment either participated in a retirement savings plan sponsored by IAC or had a retirement savings plan
in the United States that was qualified under Section 401(k) of the Internal Revenue Code. Under the IAC plan, participating employees were permitted to contribute up to 16% of their pretax
earnings, but not more than statutory limits. Ticketmaster Entertainment's match under the IAC plan was fifty cents for each dollar a participant contributed to this plan, with a maximum contribution
of 3% of a participant's eligible earnings. Matching contributions for the IAC plan were approximately $2.6 million, $2.5 million and $2.1 million in 2008, 2007, and 2006,
respectively. The increase in matching contributions for 2008 and 2007 was primarily related to increased participation in the plan. Matching contributions are invested in the same manner as each
participant's voluntary contributions in the investment options provided under the plan. Investment options in the plan included IAC common stock, but neither participant nor matching contributions
are required to be invested in IAC common stock. Subsequent to the spin-off, the net assets available for benefits of the employees of Ticketmaster Entertainment were transferred from the
IAC plan to a newly created Ticketmaster Entertainment plan effective January 1, 2009.

Ticketmaster
Entertainment's match under retirement savings plans sponsored by several recently acquired domestic subsidiaries is comparable to the Company's match under the IAC plan.
Matching contributions under these plans were approximately $0.6 million in 2008.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 19BENEFIT PLANS (Continued)

During
the three years ended December 31, 2008, Ticketmaster Entertainment also had or participated in various benefit plans, principally defined contribution plans, for its
non-U.S. employees. Ticketmaster Entertainment's contributions for these plans were approximately $4.6 million, $4.1 million and $3.4 million in 2008, 2007 and 2006,
respectively.

NOTE 20RESTRUCTURING CHARGES

During the second quarter of 2008, Ticketmaster Entertainment began a comprehensive review of its worldwide cost structure in light of significant investments that have been made through
increased operating and capital expenditures, acquisitions in recent periods, and in advance of the termination of the Live Nation agreement in 2009. As a result of this review, commencing in the
third quarter of 2008, Ticketmaster Entertainment began to effect a series of actions expected to reduce 2009 annual operating expenses by approximately $35 million from reductions in
personnel, consolidation of customer contact centers, and the balance from reductions in other operating costs and other discretionary costs. The cost-reduction efforts were completed in
the first quarter of 2009.

In
order to achieve these cost savings, certain up-front costs, principally severance costs were incurred during the third and fourth quarters of 2008. The Company recorded
restructuring charges totaling $8.6 million for employee termination benefits within its Ticketing segment during the year-ended December 31, 2008.

The
following table summarizes the restructuring liabilities balance (included as a component of other accrued expenses within the accompanying consolidated balance sheets) as of
December 31, 2008.

Balance as of
January 1, 2008

Charges to
expense

Cash
payments

Non-cash
utilized

Balance as of
December 31,
2008(in thousands)Employee termination costs

$
158

$
8,628

$
(3,120
)
$
21

$
5,687Total

$
158

$
8,628

$
(3,120
)
$
21

$
5,687


The
restructuring charges recorded during the year ended December 31, 2008 have been included in the following line items in the statement of operations.

(in thousands)Cost of sales

$
1,581Selling and marketing expense


704General and administrative expense


6,343Total

$
8,628


NOTE 21SUBSEQUENT EVENTS

Merger Agreement with Live Nation

On February 10, 2009, the Company signed a definitive agreement to merge with Live Nation in a stock transaction pursuant to
which the Company will merge with and into an indirect, wholly-owned subsidiary of Live Nation ("Merger Sub"), with Merger Sub continuing as the surviving entity and as an

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 21SUBSEQUENT EVENTS (Continued)

indirect,
wholly-owned subsidiary of Live Nation and Live Nation continuing as the public parent of the combined companies. Pursuant to the terms of the merger agreement, the aggregate number of
shares of Live Nation common stock that the holders of securities representing 100% of the voting power of the Company's capital stock issued and outstanding immediately prior to the consummation of
the merger are entitled to receive in the merger represents 50.01% of the total voting power of the Live Nation capital stock issued and outstanding immediately following the consummation of the
merger. The transaction requires, among other customary closing conditions, regulatory approvals, approval by a majority of the outstanding shares of the Company's common stock and Series A
Preferred Stock, voting together as a single class, approval by a majority of the shares of Live Nation's common stock, represented in person or by proxy, and receipt of the necessary consent of
lenders party to the Company's credit facility to allow the facility to remain in effect after the consummation of the merger with no default or event of default there under, resulting from the
merger. Liberty Media Corporation, which beneficially owns approximately 29% of the Company's common stock, has agreed to vote in favor of the proposed transaction, subject to the terms of a voting
agreement.

In
connection with the merger agreement, the Company entered into a letter agreement, dated as of February 10, 2009, with Irving Azoff pursuant to which the Company agreed, prior
to the consummation
of the Merger, to redeem the shares of Preferred Stock held by or on behalf of Mr. Azoff for a note (a) having terms comparable to the Ticketmaster Series A Preferred Stock
(except that the note would not be convertible into shares of Ticketmaster Entertainment common stock) and (b) resulting in legal, economic and tax treatment that, in the aggregate, will be no
less favorable to Mr. Azoff than such treatment with respect to the Preferred Stock.

If
the merger agreement is terminated before we complete the merger, under certain circumstances, we may be required to pay a termination fee to Live Nation in the amount of
$15 million plus Live Nation's expenses.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 22QUARTERLY RESULTS (UNAUDITED)

Quarter Ended
March 31,

Quarter Ended
June 30,

Quarter Ended
September 30,

Quarter Ended
December 31,(In thousands, except per share data)Year Ended December 31, 2008Revenue

$
348,981

$
382,369

$
339,201

$
383,974Gross profit


127,959


133,820


122,508


142,349Operating (loss) income


46,790


40,177


26,855


(1,067,965
)Net (loss) income


32,707


23,012


9,615


(1,070,833
)Earnings (loss) per share:Basic and diluted

$
0.58

$
0.41

$
0.17

$
(18.82
)Year Ended December 31, 2007(1)Revenue

$
303,577

$
293,416

$
292,466

$
351,018Gross profit


118,793


109,556


111,280


134,310Operating income


61,488


45,368


48,036


61,424Net income


42,925


34,804


40,541


51,081Earnings per share:Basic and diluted

$
0.76

$
0.62

$
0.72

$
0.91


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Table of Contents

Schedule II

TICKETMASTER ENTERTAINMENT, INC.        VALUATION AND QUALIFYING ACCOUNTS

Description

Balance at
Beginning of
Period

Charges to
Earnings

Charges to
Other
Accounts

Deductions

Balance at
End of Period(In thousands)2008Allowance for doubtful accounts

$
2,346

$
2,409

$
(192
)
$
(901
)(1)
$
3,662Deferred tax valuation allowance


10,722


13,779


(1,219
)(2)




23,282Other reserves














2007Allowance for doubtful accounts

$
2,798

$
496

$
126

$
(1,074
)(1)
$
2,346Deferred tax valuation allowance


8,116


2,606








10,722Other reserves


39





(39
)




2006Allowance for doubtful accounts

$
2,033

$
761

$
74

$
(70
)(1)
$
2,798Deferred tax valuation allowance


5,404


(915
)

3,627
(3)




8,116Other reserves


39











39


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