Table of Contents



UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-Q



ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended September 30, 2009Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                        toCommission File No. 001-34064




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

Delaware

95-4546874(State or other jurisdiction of
incorporation or organization)

(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)



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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such
files).    Yes o    No 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 ý

Non-accelerated filero (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 November 5, 2009, the following shares of the Registrant's common stock were outstanding: 57,383,150.



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Table of Contents



TICKETMASTER ENTERTAINMENT, INC.        FORM 10-Q        For the Quarterly Period Ended September 30, 2009        TABLE OF CONTENTS



Page
NumberPART IItem 1.

Consolidated Financial Statements

1Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2009 and 2008 (unaudited)

1Consolidated Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008

2Consolidated Statement of Temporary Equity and Equity as of September 30, 2009 (unaudited) and December 31, 2008

3Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008 (unaudited)

4Notes to Unaudited Consolidated Financial Statements

5Item 2.

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

31Item 3.

Quantitative and Qualitative Disclosures About Market Risk

48Item 4(T).

Controls and Procedures

48PART II

OTHER INFORMATION

49Item 1.

Legal Proceedings

49Item 1A.

Risk Factors

52Item 6.

Exhibits

68Signatures

69


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PART 1FINANCIAL STATEMENTS

Item 1.Consolidated Financial Statements



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

Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008(In thousands, except per share data)Revenue

$
347,891

$
336,350

$
1,075,133

$
1,060,112Interest on funds held for clients


635


2,851


2,265


10,439Total revenue


348,526


339,201


1,077,398


1,070,551Cost of sales (exclusive of depreciation shown separately below)


205,589


216,693


658,956


686,264Gross profit


142,937


122,508


418,442


384,287Selling and marketing expense


23,986


26,535


67,871


70,564General and administrative expense


65,982


47,633


194,886


135,130Amortization of intangibles


17,627


8,268


53,542


28,671Depreciation


14,171


13,217


40,650


36,100Operating income


21,171


26,855


61,493


113,822Other expense, net:Interest income


546


4,685


1,914


11,438Interest expense


(15,243
)

(10,909
)

(48,818
)

(20,545
)Equity in income of unconsolidated affiliates


700


2,850


2,588


2,048Other income (expense)


4,290


(413
)

7,829


244Total other expense, net


(9,707
)

(3,787
)

(36,487
)

(6,815
)Earnings before income taxes and noncontrolling interests


11,464


23,068


25,006


107,007Income tax provision


(2,193
)

(13,335
)

(7,914
)

(43,010
)Net income


9,271


9,733


17,092


63,997Loss (income) attributable to noncontrolling interests, net


3,822


(118
)

10,127


1,337Net income attributable to Ticketmaster Entertainment, Inc.

$
13,093

$
9,615

$
27,219

$
65,334Net earnings per share available to common stockholders:Basic

$
0.23

$
0.17

$
0.47

$
1.16Diluted

$
0.22

$
0.17

$
0.46

$
1.16Weighted average number of shares of common and common equivalent stock outstanding:Basic


57,358


56,183


57,339


56,175Diluted


59,868


56,382


59,517


56,241


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

1

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TICKETMASTER ENTERTAINMENT, INC.        CONSOLIDATED BALANCE SHEETS

September 30,
2009

December 31,
2008(Unaudited)(In thousands, except per
share data)ASSETSCash and cash equivalents

$
595,058

$
464,618Marketable securities





1,495Accounts receivable, client accounts


82,740


70,121Accounts receivable, trade, net of allowance of $7,113 and $3,662, respectively


63,185


46,459Deferred income taxes


14,236


14,038Contract advances


52,995


44,927Prepaid expenses and other current assets


36,913


37,758Total current assets


845,127


679,416Property and equipment, net


109,445


111,291Goodwill


475,173


455,751Intangible assets, net


303,960


330,061Long-term investments


8,525


17,487Other non-current assets


121,923


112,561TOTAL ASSETS

$
1,864,153

$
1,706,567LIABILITIES, TEMPORARY EQUITY AND EQUITYLIABILITIES:Accounts payable, client accounts

$
464,652

$
324,164Accounts payable, trade


31,293


29,251Accrued compensation and benefits


45,726


39,683Deferred revenue


35,050


33,244Income taxes payable


5,033


7,522Other accrued expenses and current liabilities


78,136


82,435Total current liabilities


659,890


516,299Long-term debt


836,980


865,000Income taxes payable


5,556


1,680Other long-term liabilities


18,996


10,286Deferred income taxes


51,199


67,300Commitments and contingenciesTEMPORARY EQUITY:Series A convertible redeemable preferred stock, $0.01 par value, 25,000 shares authorized, 1,750 non-vested shares issued and outstanding at
September 30, 2009 and December 31, 2008


14,570


9,888Redeemable noncontrolling interests


48,827


42,483EQUITY:Ticketmaster Entertainment, Inc. stockholders' equity:Common stock, $0.01 par value, 300,000 shares authorized; 57,380 shares issued and outstanding at September 30, 2009 and 57,213 shares issued and
outstanding at December 31, 2008


574


572Additional paid-in capital


1,227,387


1,235,019Accumulated deficit


(1,031,539
)

(1,058,758
)Accumulated other comprehensive income (loss)


8,228


(11,374
)Total Ticketmaster Entertainment, Inc. stockholders' equity


204,650


165,459Noncontrolling interests


23,485


28,172Total equity


228,135


193,631TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY

$
1,864,153

$
1,706,567


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

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TICKETMASTER ENTERTAINMENT, INC.        CONSOLIDATED STATEMENT OF TEMPORARY EQUITY AND EQUITY        (Unaudited)

Temporary Equity

Ticketmaster Entertainment, Inc. Stockholders' EquityRedeemable
Preferred Stock
$0.01 Par Value



Common Stock
$0.01 Par ValueAccumulated
Other
Comprehensive
IncomeRedeemable
Noncontrolling
Interests

Additional
Paid-in
Capital

Retained
Deficit

Noncontrolling
Interests

Total
EquityAmount

Shares

Amount

Shares(In thousands)Balance as of December 31, 2008

$
9,888


1,750

$
42,483

$
572


57,213

$
1,235,019

$
(1,058,758
)
$
(11,374
)
$
28,172

$
193,631Comprehensive income:Net income (loss)








(4,459
)










27,219





(5,668
)

21,551Foreign currency translation








43














19,602





19,602Comprehensive (loss) income








(4,416
)
















(5,668
)

41,153Issuance of common stock











2


167


778











780Stock-based compensation


4,682





3,212








10,288











10,288Repurchase of outstanding options

















(388
)










(388
)Noncontrolling interests in acquisitions


























2,100


2,100Fair value of redeemable noncontrolling interests adjustment








13,122








(13,122
)










(13,122
)Tax adjustment related to spin-off from IAC

















(5,188
)










(5,188
)Exercise of redemption feature of noncontrolling interest








(382
)



















Distributions to noncontrolling interests








(5,192
)
















(1,119
)

(1,119
)Balance as of September 30, 2009

$
14,570


1,750

$
48,827

$
574


57,380

$
1,227,387

$
(1,031,539
)
$
8,228

$
23,485

$
228,135


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

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

Nine Months Ended
September 30,2009

2008(In thousands)Cash flows from operating activities:Net income.

$
17,092

$
63,997Adjustments to reconcile net income to net cash provided by operating activities:Amortization of intangibles


53,542


28,671Depreciation


40,650


36,100Amortization of debt issuance costs


3,355


570Provision for doubtful accounts


2,943


4,729Stock-based compensation expense


19,433


20,343Deferred income taxes


(16,404
)

4,950Investment losses


905


Gain on extinguishment of debt


(1,527
)

Equity in income of unconsolidated affiliates, net of dividends


1,419


1,441Changes in current assets and liabilities, excluding acquisition effects:Accounts receivable


(2,018
)

(4,049
)Prepaid expenses and other current assets


(11,419
)

(11,644
)Accounts payable and other current liabilities


(17,851
)

(6,742
)Income taxes payable


(3,539
)

13,494Deferred revenue


1


3,235Funds collected on behalf of clients, net


103,088


45,269Other, net


158


427Net cash provided by operating activities


189,828


200,791Cash flows from investing activities:Transfers to IAC





(910,088
)Cash paid for acquisitions, net of cash acquired


(25,636
)

(405,498
)Purchases of property and equipment


(36,014
)

(37,014
)Purchase of marketable securities





(4,176
)Proceeds from sales and maturities of marketable securities


1,497


Cash paid for long-term investments


(1,226
)

(356
)Net cash used in investing activities


(61,379
)

(1,357,132
)Cash flows from financing activities:Capital contributions from IAC





405,498Proceeds from issuance of long-term debt





300,000Proceeds from bank borrowings





465,000Principal payments on long-term obligations


(28,009
)

(1,500
)Payment of deferred financing costs





(27,207
)Purchase of noncontrolling interest





(764
)Distributions to noncontrolling interests


(6,312
)

Excess tax benefits from equity awards





55Other, net


(370
)

Net cash (used in) provided by financing activities


(34,691
)

1,141,082Effect of exchange rate changes on cash and cash equivalents


36,682


(6,152
)Net increase (decrease) in cash and cash equivalents


130,440


(21,411
)Cash and cash equivalents at beginning of period


464,618


568,417Cash and cash equivalents at end of period

$
595,058

$
547,006


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

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TICKETMASTER ENTERTAINMENT, INC.        NOTES TO UNAUDITED 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 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 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 (the "Spincos"), including Ticketmaster Entertainment.

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 the 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). At the time of the spin-off, Ticketmaster Entertainment also included IAC's minority investment in Front Line. On October 29, 2008, the Company acquired additional
equity interests in Front Line, giving Ticketmaster Entertainment a controlling interest in Front Line.

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 a combination of privately issued debt securities and bank borrowings. Refer to Note 5Long-Term Debt.

Pending Merger with Live Nation

On February 10, 2009, the Company entered into a definitive agreement to merge with Live Nation, Inc. ("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 an
indirect, wholly-owned subsidiary of Live Nation and Live Nation

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION (Continued)

continuing
as the public parent of the combined companies (the "Merger"). Pursuant to the terms of the merger agreement (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 equity interests issued and outstanding immediately prior to the consummation of the Merger are
entitled to receive in the Merger will represent 50.01% of the total voting power of the Live Nation equity interests issued and outstanding immediately following the consummation of the Merger. The
Merger 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, domestic and foreign regulatory approvals, 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 thereunder resulting from the Merger,
which consent was obtained in May 2009.

Basis of Presentation

These interim unaudited consolidated financial statements present our results of operations, financial position, temporary equity and
equity, comprehensive income and cash flows on a consolidated basis. The consolidated financial statements include Ticketmaster Entertainment's investment in Front Line, which was consolidated
beginning on October 29, 2008, when the Company increased its ownership interest from 39.4% to 82.3% (approximately 75% on a diluted basis). Prior to October 29, 2008, the investment in
Front Line was accounted for using the equity method of accounting.

We
prepared the interim unaudited 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 the Spincos.

Interim
results are not necessarily indicative of the results that may be expected for a full year. You should read these interim unaudited consolidated financial statements and notes in
conjunction with our audited consolidated financial statements and notes for the year ended December 31, 2008, which are included in our Form 10-K, as amended.

The
historical September 30, 2008 unaudited 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

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION (Continued)

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 entire period presented.

The
accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the
rules and regulations of the SEC. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for audited financial statements. In the
opinion of Ticketmaster Entertainment's management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

We
have evaluated all subsequent events through November 9, 2009, the date the financial statements were issued.

Reclassifications

Certain amounts in the prior year's financial statements and notes have been reclassified to conform to the current-year
presentation.

NOTE 2SUMMARY OF ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

Effective July 1, 2009, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement
No. 162("SFAS No. 168"). Under SFAS No. 168, the historical GAAP hierarchy was eliminated and the Accounting Standards Codification ("ASC") became the
single official source of authoritative, non-governmental GAAP, other than guidance issued by the SEC. All other literature became non-authoritative. SFAS No. 168 became
effective for financial statements issued for interim and annual periods ending after September 15, 2009. It has been codified within ASC 105,Generally Accepted
Accounting Principles("Topic 105"). Ticketmaster Entertainment adopted Topic 105 in the third quarter of 2009. Since Topic 105 does not change GAAP, the
standard did not impact the Company's financial statements.

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") No. FAS 140-4 and FASB Interpretation
("FIN") 46(R)-8,Disclosures by Public Entities about Transfers of Financial Assets and Interests in Variable Interest Entities("FSP
No. FAS 140-4" and "FIN 46(R)-8"). FSP No. FAS 140-4 and FIN 46(R)-8 require additional disclosures about an entity's
involvement with variable interest entities and transfers of financial assets. Ticketmaster Entertainment adopted FSP No. FAS 140-4 and FIN 46(R)-8 on
January 1, 2009, and the standards did not have a material impact on the Company's consolidated financial statements. Following the effective date of the ASC, FSP No.
FAS 140-4 and FIN 46(R)-8 were both codified within ASC 810,Consolidation("Topic 810"), and
ASC 860,Transfers and Servicing.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF ACCOUNTING STANDARDS (Continued)

Equity Method Investment Accounting Considerations

In November 2008, the FASB ratified the Emerging Issues Task Force ("EITF") consensus on Issue No. 08-6, Equity Method Investment Accounting
Considerations("EITF 08-6") which addresses certain effects of ASC 805, Business Combinations("Topic 805"), and Topic 810 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.
Ticketmaster Entertainment adopted EITF 08-6 on January 1, 2009, and the standard did not have a material impact on the Company's consolidated financial statements. Following
the effective date of the ASC, EITF 08-06 was codified within ASC 323,InvestmentsDebt and Equity Securities.

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.
Ticketmaster Entertainment adopted EITF 08-7 on January 1, 2009, and the standard did not have a material impact on the Company's consolidated financial statements. Following
the effective date of the ASC, EITF 08-07 was codified within ASC 350,IntangiblesGoodwill and Others("Topic 350"), and Topic 805.

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. Ticketmaster Entertainment adopted FSP No. EITF 03-6-1 on January 1, 2009, and the standard did not have
a material impact on the Company's consolidated financial statements. Following the effective date of the ASC, FSP No. EITF 03-6-1 was codified within ASC 260, Earnings Per Share("Topic 260").

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,Goodwill and Other Intangible Assets.
Ticketmaster Entertainment adopted FSP No. FAS 142-3 on January 1, 2009 on a prospective basis, and the standard did not have a material impact on the Company's consolidated
financial statements. Following the effective date of the
ASC, FSP No. FAS 142-3 was codified within ASC 275,Risks and Uncertainties, and Topic 350.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF ACCOUNTING STANDARDS (Continued)

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 and (iii) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Ticketmaster Entertainment
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 did not have a material impact on the Company's consolidated financial statements. Following the effective date of the ASC, SFAS No. 161 was codified within ASC 815, Derivatives and
Hedging.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51("SFAS No. 160"). SFAS No. 160 changes the accounting and reporting for noncontrolling
interests. Noncontrolling 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 Consolidated Statements
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
applied prospectively, except for the presentation and disclosure requirements, which are applied retrospectively for all periods presented. Ticketmaster Entertainment adopted SFAS No. 160 on
January 1, 2009. Following the effective date of the ASC, SFAS No. 160 was codified within Topic 810.

As
a result of the adoption, we have reclassified certain noncontrolling interests from liabilities to a component of equity. In accordance with Topic 810, securities that are
redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of equity. Since the noncontrolling interests held by third parties in certain
consolidated subsidiaries are exercisable outside the control of the Company, these interests are classified as a component of temporary equity in the accompanying Consolidated Balance Sheets.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R),Business Combinations("SFAS No. 141(R)"), which replaces SFAS No. 141, Business Combinations.SFAS No. 141(R) establishes revised principles and
requirements for the recognition and measurement of assets and liabilities in a business combination. SFAS No. 141(R) requires (i) recognition of 100% of the fair values of acquired
assets, including goodwill, and assumed liabilities upon obtaining control, (ii) contingent consideration to be accounted for at fair value at the acquisition date, (iii) transaction
costs to be expensed as incurred, (iv) pre-acquisition contingencies to be accounted for at the 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 was
prohibited. SFAS No. 141(R) requires prospective application for all acquisitions

9

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF ACCOUNTING STANDARDS (Continued)

after
the adoption date. The Company expects SFAS No. 141(R) to have an impact on how acquisitions are reflected in the consolidated financial statements, but the timing, nature and magnitude
of the specific effects will depend on the nature, terms and size of future acquisitions that the Company consummates. As of December 31, 2008, approximately $0.6 million of transaction
costs related to transactions not consummated were capitalized and included in prepaid expenses and other current assets. These costs were expensed during the first quarter of 2009.

Additionally,
for business combinations for which the acquisition date occurs prior to the effective date of SFAS No. 141(R), the acquirer is required to apply the requirements of
ASC 740,Income Taxes("Topic 740"), as amended by SFAS No. 141(R), prospectively. After the effective date of SFAS
No. 141(R), 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. 141(R) on the Company's consolidated financial statements will largely be dependent on the size and nature of the business
combinations completed after January 1, 2009. Following the effective date of the ASC, SFAS No. 141(R) was codified within Topic 805.

In
April 2009 the FASB issued FSP No. FAS 141(R)-1Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That
Arise from Contingencies("FSP
No. 141(R)-1"). FSP No. 141(R)-1 amends the provisions in SFAS No. 141(R) for the initial recognition and measurement, subsequent measurement and
accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. FSP No. 141(R)-1 eliminates the distinction between contractual and
non-contractual contingencies, including the initial recognition and measurement criteria in SFAS No. 141(R), and instead carries forward most of the provisions in SFAS
No. 141 for acquired contingencies. FSP No. 141(R)-1 is effective for contingent assets and contingent liabilities acquired in business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Ticketmaster Entertainment adopted FSP141(R)-1 on January 1,
2009, and the standard did not have a material impact on the Company's consolidated financial statements. Following the effective date of the ASC, FSP No. 141(R)-1 was codified
within Topic 805.

Accounting by Lessees for Maintenance Deposits

In June 2008, the FASB issued EITF Issue No. 08-3,Accounting by Lessees for
Maintenance Deposits("EITF 08-3"). EITF 08-3 concluded that maintenance deposits should be considered a deposit when paid to the lessor
if it is probable that the deposits will be refunded to the lessee. The cost of maintenance activities should be expensed or capitalized by the lessee, as appropriate, when the underlying maintenance
is performed. If it is less than probable that a maintenance deposit will be refunded to the lessee, the deposit is recognized as additional rent expense. EITF 08-3 is effective for
financial statements issued for fiscal years beginning after December 15, 2008. Ticketmaster Entertainment adopted EITF 08-3 on January 1, 2009, and the standard did
not have an impact on the Company's consolidated financial statements. Following the effective date of the ASC, EITF 08-3 was codified within ASC 840, Leases.

10

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF ACCOUNTING STANDARDS (Continued)

Subsequent Events

In May 2009, the FASB issued SFAS No. 165,Subsequent Events("SFAS
No. 165"). SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are
available to be issued. In particular, SFAS No. 165 sets forth the following: (i) the period after the balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. SFAS No. 165 does not apply to subsequent events or transactions that are within the scope of other applicable U.S. generally accepted
accounting principles that provide different guidance on the accounting treatment for subsequent events or transactions. SFAS No. 165 is effective for interim or annual financial periods ending
after June 15, 2009, but should be applied on a prospective basis. Ticketmaster Entertainment adopted SFAS No. 165 in the second quarter of 2009, and the standard did not have a material
impact on the Company's consolidated financial statements and disclosures. Following the effective date of the ASC, SFAS No. 165 was codified within ASC 855, Subsequent Events.

Fair Value Accounting

In April 2009, the FASB issued FSP No. FAS 107-1 and Accounting Principles Board Opinion ("APB")
No. 28-1,Interim Disclosures about Fair Value of Financial Instruments("FSP No. FAS 107-1 and APB
No. 28-1"). FSP FAS No. 107-1 and APB No. 28-1 amends SFAS No. 107,Disclosures about Fair Value of Financial
Instruments,to require disclosures about the fair value of financial instruments for interim reporting periods ending after June 15, 2009. This FSP also amends
APB No. 28,Interim Financial Reporting, to require those disclosures in summarized financial information at interim financial periods.
Ticketmaster Entertainment adopted FSP FAS No. 107-1 and APB No. 28-1 in the second quarter of 2009, and the standard did not have an impact on the Company's
financial statement disclosures. Following the effective date of the ASC, FSP FAS No. 107-1 and APB No. 28-1 was codified within ASC 825, Financial Instruments.

Recent Accounting Pronouncements

Variable Interest Entities

In June 2009, the FASB issued SFAS No. 167,Amendments to FASB Interpretation
No. 46(R)("SFAS No. 167"). This statement amends certain requirements of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest
Entities. Among other accounting and disclosure requirements, SFAS No. 167 replaces the quantitative-based
risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest
entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to
receive benefits from the entity. The Company will adopt SFAS No. 167 in its first annual and interim reporting periods beginning after November 15, 2009. The Company is evaluating the
impact of SFAS No. 167 on the Company's consolidated financial statements.

11

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF ACCOUNTING STANDARDS (Continued)

Fair Value Accounting

In August 2009, the FASB issued ASU No. 2009-5, which amends ASC 820,Fair
Value Measurements and Disclosures("Topic 820") as it relates to the fair value measurement of liabilities. ASU No. 2009-5 provides clarification
that in circumstances in which a quoted price in an active market for the identical liability is not available, an entity is required to measure fair value utilizing one or more of the following
techniques: (1) a valuation technique that uses the quoted market price of an identical liability or similar liabilities when traded as assets; or (2) another valuation technique that is
consistent with the principles of Topic 820, such as a present value technique. The Company will adopt ASU No. 2009-5 in its first interim reporting period beginning after
August 26, 2009. The Company is evaluating the impact of ASU No. 2009-5 on the Company's consolidated financial statements.

NOTE 3SEGMENT INFORMATION

The overall concept employed by Ticketmaster Entertainment in determining its operating segments is to present the financial information in a manner consistent with how our chief
operating decision
maker manages our business, makes operating decisions and evaluates operating performance. Operating segments are consolidated for reporting purposes if they have similar economic characteristics and
meet the aggregation criteria of ASC 280,Segment Reporting("Topic 280").

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 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 a controlling interest in Front Line, based upon changes in the internal management structure and how the chief operating decision maker
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 income of unconsolidated
affiliates, net loss attributable to noncontrolling interests, and other income (expense) and income tax expense are

12

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3SEGMENT INFORMATION (Continued)

managed
on a total company basis. Corporate expenses primarily include compensation and other employee costs (including stock-based compensation), outside services and professional fees.

Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008(In thousands)Revenue:Ticketing

$
292,138

$
339,201

$
943,065

$
1,070,551Artist Services


56,388





134,333


Total revenue

$
348,526

$
339,201

$
1,077,398

$
1,070,551




Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008(In thousands)Operating income:Ticketing

$
41,675

$
52,044

$
139,250

$
176,998Artist Services


5,108





(396
)

Corporate and unallocated


(25,612
)

(25,189
)

(77,361
)

(63,176
)Total operating income

$
21,171

$
26,855

$
61,493

$
113,822




Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008(In thousands)Adjusted EBITDA(a):Ticketing

$
62,732

$
75,626

$
206,718

$
248,196Artist Services


19,588





37,690


Corporate and unallocated


(22,520
)

(18,336
)

(69,290
)

(49,260
)Total Adjusted EBITDA

$
59,800

$
57,290

$
175,118

$
198,936




Nine Months Ended
September 30,2009

2008(In thousands)Capital expenditures:Ticketing

$
32,795

$
31,913Artist Services


426


Corporate and unallocated


2,793


5,101Total capital expenditures

$
36,014

$
37,014


13

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3SEGMENT INFORMATION (Continued)

The following table reconciles Adjusted EBITDA for the Company's reportable segments to Net income attributable to Ticketmaster Entertainment, Inc.:

Three Months Ended September 30, 2009Adjusted
EBITDA(a)

Non-cash and
stock-based
compensation
expense

Amortization
of
intangibles

Depreciation
expense

Operating
income(In thousands)Ticketing

$
62,732

$
(996
)
$
(6,813
)
$
(13,248
)
$
41,675Artist Services


19,588


(3,536
)

(10,814
)

(130
)

5,108Corporate and unallocated


(22,520
)

(2,299
)




(793
)

(25,612
)Total

$
59,800

$
(6,831
)
$
(17,627
)
$
(14,171
)

21,171Other expense, net


(9,707
)Earnings before income taxes and noncontrolling interests


11,464Income tax provision


(2,193
)Net income


9,271Plus: Loss attributable to noncontrolling interests, net


3,822Net income attributable to Ticketmaster Entertainment, Inc.

$
13,093




Three Months Ended September 30, 2008Adjusted
EBITDA(a)

Non-cash and
stock-based
compensation
expense

Amortization
of
intangibles

Depreciation
expense

Operating
income(In thousands)Ticketing

$
75,626

$
(2,957
)
$
(8,268
)
$
(12,357
)
$
52,044Corporate and unallocated


(18,336
)

(5,993
)




(860
)

(25,189
)Total

$
57,290

$
(8,950
)
$
(8,268
)
$
(13,217
)

26,855Other expense, net


(3,787
)Earnings before income taxes and noncontrolling interests


23,068Income tax provision


(13,335
)Net income


9,733Less: Income attributable to noncontrolling interests, net


(118
)Net income attributable to Ticketmaster Entertainment, Inc.

$
9,615


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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3SEGMENT INFORMATION (Continued)



Nine Months Ended September 30, 2009Adjusted
EBITDA(a)

Non-cash and
stock-based
compensation
expense

Amortization
of
intangibles

Depreciation
expense

Operating
income(In thousands)Ticketing

$
206,718

$
(3,347
)
$
(26,229
)
$
(37,892
)
$
139,250Artist Services


37,690


(10,375
)

(27,313
)

(398
)

(396
)Corporate and unallocated


(69,290
)

(5,711
)




(2,360
)

(77,361
)Total

$
175,118

$
(19,433
)
$
(53,542
)
$
(40,650
)

61,493Other expense, net


(36,487
)Earnings before income taxes and noncontrolling interests


25,006Income tax provision


(7,914
)Net income


17,092Plus: Loss attributable to noncontrolling interests, net


10,127Net income attributable to Ticketmaster Entertainment, Inc.

$
27,219




Nine Months Ended September 30, 2008Adjusted
EBITDA(a)

Non-cash and
stock-based
compensation
expense

Amortization
of
intangibles

Depreciation
expense

Operating
income(In thousands)Ticketing

$
248,196

$
(8,676
)
$
(28,671
)
$
(33,851
)
$
176,998Corporate and unallocated


(49,260
)

(11,667
)




(2,249
)

(63,176
)Total

$
198,936

$
(20,343
)
$
(28,671
)
$
(36,100
)

113,822Other expense, net


(6,815
)Earnings before income taxes and noncontrolling interests


107,007Income tax provision


(43,010
)Net income


63,997Plus: Loss attributable to noncontrolling interests, net


1,337Net income attributable to Ticketmaster Entertainment, Inc.

$
65,334


(a)Our
primary operating metric for evaluating segment performance is Adjusted Earnings before Interest, Income Taxes, Depreciation and Amortization ("Adjusted
EBITDA"), which is defined as Operating income excluding, if applicable: (1) depreciation expense, (2) non-cash and stock-based compensation expense, (3) amortization
and impairment of intangibles, (4) goodwill or other impairments, (5) pro forma adjustments for significant acquisitions, fair value adjustments to contingent consideration and
compensation expense associated with significant transactions or the Merger with Live Nation and (6) one-time items. Ticketmaster Entertainment believes this measure is useful to
investors because it represents its consolidated operating results excluding the effects of non-cash expenses. The Adjusted EBITDA metric was referred to as Adjusted Operating Income in
our Annual Report on Form 10-K, as amended, for the year ended December 31, 2008.


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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3SEGMENT INFORMATION (Continued)

Adjusted
EBITDA has certain limitations in that it does not take into account the impact to Ticketmaster Entertainment's Consolidated Statements of Operations of certain expenses, including
acquisition-related accounting. Ticketmaster Entertainment endeavors to compensate for the limitations of the supplemental measure presented by providing the comparable GAAP measure with equal or
greater prominence, financial statements prepared in accordance with generally accepted accounting principles, and descriptions of the reconciling items, including quantifying such items, to derive
the supplemental measure.


The
Ticketing segment's largest client through 2008, Live Nation (including its subsidiary, House of Blues), represented approximately 3% and 16% of Ticketmaster Entertainment's
consolidated revenue for the three months ended September 30, 2009 and 2008, respectively. Live Nation represented approximately 6% and 16% of the Company's consolidated revenue for the nine
months ended September 30, 2009 and 2008, respectively.

NOTE 4INCOME TAXES

Ticketmaster Entertainment calculates its interim income tax provision in accordance with Subtopic 270,Interim Reporting, of
Topic 740. At the end of each interim period, the Company makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary
year-to-date earnings or loss. The tax or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax
effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the
realizability of a beginning-of-the-year deferred tax asset in future years is recognized in the interim period in which the change occurs.

The
computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income
for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets
generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained
or our tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the
current quarter. Included in the income tax provision for the three months ended September 30, 2009 is a benefit of $1.4 million due to a change in the estimated annual effective tax
rate from that used in the second quarter.

For
the three and nine months ended September 30, 2009, the Company recorded a tax provision of $2.2 million and $7.9 million, respectively, which represent
effective tax rates of 19% and 32%, respectively. The tax rate for the three months ended September 30, 2009 is lower than the federal statutory rate of 35% due principally to foreign income
taxed at lower rates including the effects of our international restructuring and net adjustments related to the reconciliation of provision accruals to tax returns, partially offset by losses in
foreign jurisdictions for which no tax benefit can be recognized and partnership flow-through losses attributable to noncontrolling interests. The tax rate for the nine months ended
September 30, 2009 is lower than the federal statutory rate of 35% due principally to foreign income taxed at lower rates including the effects of our international restructuring, net
adjustments related to the reconciliation of provision accruals to tax returns, foreign tax credits related to foreign dividends and deductible payments made in connection with a dividend, partially
offset by

16

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4INCOME TAXES (Continued)

losses
in foreign jurisdictions for which no tax benefit can be recognized, partnership flow-through losses attributable to noncontrolling interests and adjustments to deferred taxes due
to newly enacted state tax legislation.

For
the three and nine months ended September 30, 2008, the Company recorded a tax provision of $13.3 million and $43.0 million, respectively, which represent
effective tax rates of 58% and 40%, respectively. The tax rate for the three months ended September 30, 2008 is higher than the federal statutory rate of 35% due principally to state and local
income taxes, net adjustments related to the reconciliation of provision accruals to tax returns, and losses not benefited in foreign jurisdictions, partially offset by foreign income taxed at lower
rates. The tax rate for the nine months ended September 30, 2008 is higher than the federal statutory rate of 35% principally due to state and local income taxes and losses not benefited in
foreign jurisdictions, partially offset by foreign income taxed at lower rates.

As
of December 31, 2008 and September 30, 2009, the Company had unrecognized tax benefits of approximately $1.3 million and $4.9 million, respectively. During
the three and nine months ended September 30, 2009, the unrecognized tax benefits increased by approximately $1.2 million and $3.6 million, respectively, as a result of historical
state tax positions and foreign income tax positions taken in the current year. If unrecognized tax benefits as of September 30, 2009 are subsequently recognized, approximately
$4.8 million, net of related deferred tax assets and interest, would reduce income tax provision from continuing operations. The Company recognizes interest and, if applicable, penalties
related to unrecognized tax benefits in income tax expense. Included in income tax expense for the three and nine months ended September 30, 2009 is $0.1 million and $0.2 million,
respectively, net of related deferred taxes, for interest and penalties on unrecognized tax benefits. At September 30, 2009, the Company has accrued $0.7 million for the payment of
interest and penalties.

The
tax sharing agreement between IAC and the Company provides that the impact of the reconciliation of federal and state income taxes, including the effects of certain tax elections
made by IAC related to the Company for the 2008 period prior to the spin-off, is the responsibility of IAC. This resulted in a benefit to IAC in the form of a reduction in its federal
income tax liability during the third quarter of 2009. As a result, the Company recorded a $5.2 million decrease
to additional paid-in capital in the Company's Consolidated Balance Sheet as of September 30, 2009 reflecting a reduction in the amount distributed by IAC to the Company's
shareholders in the spin-off. An adjustment may be recorded in the fourth quarter of 2009 upon the reconciliation of IAC's state income tax liability, following the filing of state tax
returns, for the period prior to the spin-off.

By
virtue of previously filed separate company tax returns, as well as consolidated tax returns with IAC, Ticketmaster Entertainment is routinely under audit by federal, state, local and
foreign income tax authorities. 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 amounts recorded for unrecognized tax benefits 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 2006, which include the operations of Ticketmaster Entertainment from
January 17, 2003, the date which Ticketmaster Entertainment joined the IAC consolidated tax group.

17

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4INCOME TAXES (Continued)

The
statute of limitations for these years has been extended to December 31, 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. See Note 14Related Party Transactions to the Company's Annual Report on
Form 10-K, as amended, for the year ended December 31, 2008, for a description of the tax sharing arrangement with IAC and the Spincos.

Ticketmaster
Entertainment believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.4 million within twelve months of the
current reporting date due to settlements and expirations of applicable statutes 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 5LONG-TERM DEBT

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

September 30, 2009

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

$
286,980

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


100,000


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


350,000


350,0002008 Revolver, due July 25, 2013


100,000


115,000Total

$
836,980

$
865,000


The
10.75% Senior Notes ("Senior Notes") contain two incurrence-based financial covenants requiring a minimum fixed charge coverage ratio, as defined therein, of 2.0 to 1.0, and a
maximum secured indebtedness leverage ratio, as defined therein, of 2.25 to 1.0 in order to incur additional indebtedness, other than permitted debt.

Term
Loan A, Term Loan B and the revolving credit facility (the "Revolver," collectively with Term Loan A and Term Loan B, the "Senior Secured Credit
Facilities") bear interest rates per annum based on fixed and variable interest rates specified in the credit agreement governing the Senior Secured Credit Facilities. The interest rates for Term
Loan A, Term Loan B and the Revolver at September 30, 2009 were 3.30%, 3.55% and 2.83%, respectively.

The
Senior Secured Credit Facilities have two quarterly financial covenants requiring a maximum total leverage ratio, as defined therein, of 3.50 to 1.00 and a minimum interest coverage
ratio, as defined therein, of 3.00 to 1.00. As of September 30, 2009, the Company was in compliance with both of these financial covenants.

18

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5LONG-TERM DEBT (Continued)

As
of September 30, 2009, the Company's long-term debt has scheduled principal repayments for each of the next five years and thereafter as follows (in thousands):

Years ending December 31,2009

$
2010


2011


13,5002012


18,5002013


176,750Thereafter


628,230Total

$
836,980


In
July 2009, the Company repurchased and retired $13.0 million aggregate principal amount of our Senior Notes. In September 2009, the Company paid down
$15.0 million of the outstanding balance under the Revolver.

NOTE 6EARNINGS PER SHARE

We compute earnings per share in accordance with Topic 260. We compute basic earnings per share using the weighted average number of common shares outstanding for the period.
Under the provisions of Topic 260, 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.

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

Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008(In thousands, except for per share data)Net income attributable to Ticketmaster Entertainment, Inc.:

$
13,093

$
9,615

$
27,219

$
65,334Net earnings per share available to common stockholders:Basic

$
0.23

$
0.17

$
0.47

$
1.16Diluted

$
0.22

$
0.17

$
0.46

$
1.16Weighted average number of shares outstanding:Basic


57,358


56,183


57,339


56,175Dilutive effect of:Options to purchase common stock, restricted stock units and redeemable preferred stock


2,510


199


2,178


66Diluted


59,868


56,382


59,517


56,241


The
diluted weighted average common shares outstanding includes the incremental shares that would be issued upon the assumed exercise of stock options, vesting of restricted stock units
("RSUs")

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6EARNINGS PER SHARE (Continued)

and
conversion of the Company's Series A convertible redeemable preferred stock if the effect is dilutive.

NOTE 7TEMPORARY EQUITY AND 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.

Ticketmaster Entertainment Common Stock and Restricted Stock

The Company's 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 the Company's board of directors out of funds legally
available for that purpose. The Company has not paid any dividends on its common stock since its common stock began trading on the Nasdaq Stock Market. The Company's 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. The Company
recorded $0.4 million and $1.1 million of stock-based compensation expense for the three and nine months ended September 30, 2009, respectively, related to the restricted common
stock grant. There was no stock-based compensation expense recorded for this award in the three and nine months ended September 30, 2008.

Series A Convertible Preferred Stock

The Company's 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

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7TEMPORARY EQUITY AND EQUITY (Continued)

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. The Company is recognizing compensation expense over the
vesting term. At September 30, 2009, the aggregate amount of unpaid dividends on the Preferred Stock was $1.0 million.

Due
to the nature of the redemption feature and other provisions, the Company classified the Preferred Stock as temporary equity. The Company obtained an independent valuation of
$40.0 million for the fair value of the 1,750,000 shares of Preferred Stock in October 2008 valued using an option pricing model. In connection with Ticketmaster Entertainment's
acquisition of a controlling interest in Front Line, they were accounted for as an exchange of equity instruments in a business combination in accordance with Topic 718 and the Company recorded
$8.8 million as temporary equity representing the vested portion of the fair value based on the requisite service period that had passed. This amount was previously expensed by Front Line prior
to the acquisition. In accordance with ASC 480,Distinguishing Liabilities from Equity("Topic 480"), the Company adjusted additional
paid-in-capital by $8.8 million to appropriately record the instrument as temporary equity at the time the grant was awarded outside of permanent equity as redemption of
this award is outside the control of Ticketmaster Entertainment. The value of the Preferred Stock attributed to the remaining service period of $31.2 million is being expensed ratably over the
future service period from October 2008 through October 2013. Ticketmaster Entertainment recorded $1.6 million and $4.7 million of stock-based compensation expense for the
three and nine months ended September 30, 2009, respectively. There was no stock-based compensation expense for the Preferred Stock in the three and nine months ended September 30, 2008.

Redeemable Noncontrolling Interests

In connection with the acquisition of certain subsidiaries, the Company is party to fair value put arrangements with respect to the
common securities that represent the remaining noncontrolling interests of the acquired company or a portion thereof. These put arrangements are exercisable at fair value by the counterparty outside
of the control of the Company and are classified as temporary equity in accordance with Topic 480. Accordingly, to the extent the fair value of these redeemable interests exceeds the value
determined by normal noncontrolling interests accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital. In instances
where the put arrangements held by the noncontrolling interests are not currently redeemable, the Company accretes the changes from book value to the redemption fair value over the period from the
date of issuance to the earliest redemption date of the individual securities using the interest method.

The
currently redeemable put arrangements held by the noncontrolling interests of certain subsidiaries of the Company had an estimated redemption fair value of $0.4 million and
$1.3 million as of September 30, 2009 and December 31, 2008, respectively. In the third quarter of 2009, Ticketmaster Entertainment exercised the redemption feature related to one
of the noncontrolling interests and removed $0.4 million from redeemable noncontrolling interests to other accrued expenses and current liabilities in the Consolidated Balance Sheet as of
September 30, 2009 as this represents the Company's estimate of the amount to be paid to the noncontrolling interest.

21

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7TEMPORARY EQUITY AND EQUITY (Continued)

The
Company acquired a controlling interest in Front Line on October 29, 2008, increasing the Company's ownership interest from 39.4% to 82.3%. As of September 30, 2009,
81.17% of the common stock of Front Line held by noncontrolling interests included put arrangements that were not currently redeemable. These shares had an estimated fair value of $51.2 million
as of September 30, 2009. The shares held by the noncontrolling interests are redeemable at differing dates as specified in the October 29, 2008 transaction. Per the terms of the
transaction, 17,279 shares are redeemable on October 29, 2011, 5,271 shares are redeemable on October 29, 2013 and the remaining 174 shares are redeemable on January 24, 2015;
these shares had estimated redemption fair values of $38.9 million, $11.9 million and $0.4 million, respectively, as of September 30, 2009. For the three and nine months
ended September 30, 2009, in accordance with Topic 480, the Company has accreted $1.4 million and $8.8 million, respectively, of the change from book value to the
redemption fair value using the interest method. There was no accretion for the three and nine months ended September 30, 2008. The carrying value of these common shares, including the recorded
accretion, was $32.9 million and $28.9 million as of September 30, 2009 and December 31, 2008, respectively.

Additionally,
the founder of Front Line and the Azoff Family Trust hold options and restricted stock in Front Line that included put arrangements exercisable at the option of the holder
on October 29, 2013, subject to vesting. The options and restricted stock had an estimated redemption fair value of $19.3 million as of September 30, 2009. For the three and nine
months ended September 30, 2009, in accordance with Topic 480, the Company has accreted $0.3 million and $0.8 million, respectively, of the change from book value to the
redemption fair value using the interest method. There was no accretion for the three and nine months ended September 30, 2008. The carrying value of the options and restricted stock, including
the recorded accretion, was $3.3 million and $0.6 million as of September 30, 2009 and December 31, 2008, respectively.

The
common stock of two subsidiaries of Front Line held by noncontrolling interests included put arrangements that were not currently redeemable. One put arrangement, redeemable on
August 23, 2012, had an estimated redemption fair value of $3.4 million as of September 30, 2009. The remaining put arrangement, which does not have a determinable redemption
date, had an estimated redemption fair value of $8.8 million as of September 30, 2009. For both the three and nine months ended September 30, 2009, in accordance with
Topic 480, the Company has recorded a fair value adjustment of $0.5 million. There was no accretion for the three and nine months ended September 30, 2008. As of
September 30, 2009 and December 31, 2008, the carrying value for these interests was $12.2 million and $11.7 million, respectively.

Noncontrolling Interests

For 18.83% of the common stock of Front Line held by noncontrolling interests and certain non-wholly owned subsidiaries of
Front Line, the common securities held by the noncontrolling interests do not include put arrangements exercisable outside of the control of the Company. As such, these noncontrolling interests are
recorded in equity, separate from the Company's own equity in accordance with SFAS No. 160. The carrying value of these noncontrolling interests was $23.5 million and
$28.2 million as of September 30, 2009 and December 31, 2008, respectively.

22

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8STOCK-BASED COMPENSATION

Stock-based compensation expense related to stock options, restricted stock, restricted stock units ("RSUs") and performance stock units ("PSUs") is included in the following line items
in the Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008 (in thousands):

Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008Cost of sales

$
99

$
548

$
319

$
1,086Selling and marketing expense


108


595


346


1,183General and administrative expense


6,624


7,807


18,768


18,074Stock-based compensation expense

$
6,831

$
8,950

$
19,433

$
20,343


During
the nine months ended September 30, 2009, under the terms of the Front Line Management Group Inc. Equity Incentive Plan, Front Line granted 4,699 restricted shares
of Front Line's common stock with a total grant date fair value of $9.84 million. The values of the restricted stock were based on values of Front Line equity transactions near the grant dates
of the restricted stock. The restricted stock awards vest in full either on the fourth anniversary or the third anniversary of the applicable grant date. The awards contain certain mandatory
redemption features whereby Front Line is required to purchase vested shares from the grantees at their fair market values on the applicable redemption dates. These grants are classified as
liabilities in accordance with Topic 480, since the awards represent an unconditional obligation requiring Front Line to redeem the instruments at future specified dates. We have recorded
$0.4 million and $0.9 million of compensation cost during the three and nine months ended September 30, 2009, respectively, related to the Front Line restricted common stock
grants. As of September 30, 2009, we have recorded a liability of $1,258,000 in other long term liabilities on the Consolidated Balance Sheet related to these awards.

During
the nine months ended September 30, 2009, the Company granted an aggregate of 2,235,000 stock options with an exercise price of $5.33 per share and an estimated average
grant date fair value of approximately $2.31 per share. The fair value of options granted in 2009 was estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used
an expected volatility rate of 43.28%, dividend yield of 0%, expected term of 6.25 years and a risk-free interest rate of 1.23%. Volatility was based on 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 rate was based on U.S. Treasury yields in
effect at the grant date for notes with terms comparable to those of the awards. The Company used the simplified method to estimate the expected term as it does not have sufficient historical exercise
data due to the limited period of time its equity shares have been publicly traded. The options vest ratably over four years and have ten year terms. We have recorded $0.3 million and
$0.5 million of stock-based compensation cost during the three months and nine months ended September 30, 2009, respectively, related to these option grants.

During
the nine months ended September 30, 2009, the Company granted 113,000 RSUs to certain employees with a grant date fair value of $5.33 per share. The RSUs vest ratably over
four years. We have recorded $0.1 million and $0.2 million of stock-based compensation cost during the three months and nine months ended September 30, 2009, respectively, related
to these RSU grants.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8STOCK-BASED COMPENSATION (Continued)

In
connection with his appointment to the board, on April 16, 2009, the Company granted 22,000 RSUs to an eligible non-employee member of its Board of Directors with a
grant date fair value of $4.58 per share and which vest ratably over two years.

NOTE 9INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Equity Investments

At September 30, 2009 and December 31, 2008, Ticketmaster Entertainment's equity investments in unconsolidated affiliates
totaled $8.5 million and $12.9 million, respectively, and are included in Long-term investments in the Consolidated Balance Sheets.

On
October 29, 2008, Ticketmaster Entertainment acquired additional interests in Front Line from certain stockholders of Front Line for an aggregate purchase price of
$123.0 million. On this same date, the Company also acquired equity interests in Front Line 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). 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 $3.4 million and $2.0 million in the three and nine months ended September 30,
2008, respectively, are included in equity in income of unconsolidated affiliates in the Consolidated Statements of Operations. The results of Front Line were consolidated with Ticketmaster
Entertainment effective October 29, 2008.

On
September 25, 2009, Ticketmaster Entertainment sold its 25% interest in iLike.com, Inc. to MySpace, Inc. for $7.9 million. The Company recognized a gain of
$2.9 million on the sale of the investment. The gain is reflected in other income (expense) line item in the Consolidated Statements of Operations for the three and nine months ended
September 30, 2009.

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 at
September 30, 2009 and December 31, 2008:

September 30,
2009

December 31,
2008iLike.com, Inc. (United States)





25.0%Beijing Gehua Ticketmaster Ticketing Co., Ltd. (China)


40.0%


40.0%TM Mexico (Mexico)


33.3%


33.3%


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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Continued)

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

Nine Months Ended
September 30,2009

2008Net sales

$
27,505

$
165,016Gross profit


20,274


97,037Net income


7,046


5,848


The
summarized aggregated financial information for the nine months ended September 30, 2008 includes Ticketmaster Entertainment's investment in Front Line which, prior to
October 29, 2008, was accounted for under the equity method of accounting.

Cost Investments

In December 2006, Ticketmaster Entertainment acquired a 15% in Broadway China Ventures ("BCV"), a partnership formed to produce
Broadway musicals in China. As of June 30, 2009, the investment balance accounted for on a cost basis was $4.7 million. As of September 30, 2009, Ticketmaster Entertainment
determined that the investment in BCV had suffered an other than temporary impairment loss after giving consideration to, among other things, BCV's negative financial and operational condition.
Accordingly, Ticketmaster Entertainment recorded an other than temporary impairment loss of $3.8 million to reduce the equity investment in BCV to its estimated fair value as of
September 30, 2009. The other than temporary impairment loss is reflected in other income (expense) line item in the Consolidated Statement of Operations for the three and nine months ended
September 30, 2009.

NOTE 10COMPREHENSIVE INCOME

The components of comprehensive income (loss), net of tax, are as follows (in thousands):

Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

2009

2008Net income

$
9,271

$
9,733

$
17,092

$
63,997Foreign currency translation


7,944


(21,101
)

19,645


(6,416
)Total Comprehensive income (loss)


17,215


(11,368
)

36,737


57,581Loss (income) attributable to noncontrolling interests, net


3,822


(118
)

10,127


1,337Foreign currency translation


(43
)

57


(43
)

(18
)Comprehensive loss (income) attributable to noncontrolling interets


3,779


(61
)

10,084


1,319Comprehensive income (loss) attributable to Ticketmaster Entertainment, Inc.

$
20,994

$
(11,429
)
$
46,821

$
58,900


Accumulated
other comprehensive income as of September 30, 2009 and September 30, 2008 is solely related to foreign currency translation.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11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. The Company believes that the allocation methods used by IAC were reasonable. Expense allocations from IAC were zero and $1.8 million for the three and
nine months ended September 30, 2008, respectively, and are included in general and administrative expense in our Consolidated Statements of Operations for the periods. 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 $0.8 million and $0.7 million for the three months ended September 30, 2009 and 2008, respectively, and $2.6 million and $2.0 million
for the nine months ended September 30, 2009 and 2008, respectively.

During
the second quarter of 2008, the Company recorded an $8.3 million cumulative interest charge from IAC. The portion of interest expense reflected in the Company's
Consolidated Statements of Operations that was intercompany in nature was zero and $8.3 million for the three and nine months ended September 30, 2008, respectively. For the three and
nine months ended September 30, 2008, interest income reflected in the Company's Consolidated Statements of Operations included $3.4 million and $7.1 million, respectively, of
interest income for intercompany interest receivable from IAC. The intercompany receivable from IAC was extinguished upon consummation of the spin-off.

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.

IAC
and Ticketmaster Entertainment currently continue, and for the foreseeable future expect to continue, to work together pursuant to a variety of commercial relationships. In
connection with the spin-off, IAC and Ticketmaster Entertainment entered into various commercial agreements between subsidiaries of IAC, on the one hand, and subsidiaries of Ticketmaster
Entertainment, on the other hand, many of which memorialized (in most material respects) pre-existing arrangements in effect prior to the spin-off and all of which were
negotiated at arm's length.

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, providing for post-spin-off governance arrangements at the Company. As of February 10, 2009, Liberty
beneficially owned approximately 29.1% of the outstanding shares of common stock of the Company. Refer to the Company's Annual Report on Form 10-K, as amended, for the year ended
December 31, 2008 for a summary of the material terms of those governance agreements and related matters.

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Table of Contents

TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11RELATED PARTY TRANSACTIONS (Continued)

Liberty/Live Nation Stockholder Agreement

In connection with Ticketmaster Entertainment entering into the Merger Agreement with Live Nation, pursuant to which the Merger is
pending, Ticketmaster Entertainment entered into a certain Stockholder Agreement among Live Nation, Liberty, Liberty USA Holdings, LLC and Ticketmaster Entertainment, dated February 10,
2009 (the "Liberty Stockholder Agreement") regarding certain corporate governance rights, designation rights and registration rights with respect to the Live Nation common stock to be received by
Liberty in the Merger. Among other things, subject to certain restrictions and limitations set forth in the Liberty Stockholder Agreement, Liberty will have the right, following the closing of the
Merger, to nominate up to two directors to serve on the Live Nation board of directors. In addition, if Liberty designates two directors to the Live Nation board of directors, one of them must meet
the independence standards of the NYSE with respect to Live Nation, and Liberty would have the right to designate one of its nominees to serve on the Audit Committee and one nominee to serve on the
Compensation Committee of the Live Nation board of directors, subject to such designee's satisfaction of the applicable standards for service on such committees. The Liberty Stockholder Agreement also
contains provisions relating to limitations on the ownership of Live Nation equity securities by Liberty and its affiliates following the Merger and on transfers of Live Nation equity securities and
rights and obligations under the Liberty Stockholder Agreement following the Merger.

Relationships Involving Executives

In connection with Ticketmaster Entertainment's entering into the Merger Agreement on February 10, 2009, Ticketmaster
Entertainment entered into a letter agreement with Mr. Azoff, Chief Executive Officer of Ticketmaster Entertainment, pursuant to which Ticketmaster Entertainment agreed, prior to the
consummation of the Merger, to redeem the shares of Ticketmaster Entertainment series A convertible redeemable preferred stock held by or on behalf of Mr. Azoff for a note (i)
having terms comparable to the Ticketmaster Entertainment series A convertible redeemable preferred stock (except that the note will not be convertible into shares of Ticketmaster Entertainment
common stock) and (ii) 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 Ticketmaster
Entertainment series A convertible redeemable preferred stock. The form of the note was agreed to in October in connection with the entry into Mr. Azoff's new employment
agreement.

In
April 2009, the Board of Directors of Front Line declared a dividend in the amount of $115.74844 per share of Front Line common stock payable in cash to the holders of record
of Front Line common stock. This dividend totaled $20.1 million and was paid in April 2009. The Azoff Family Trust of 1997, of which Mr. Azoff, Ticketmaster Entertainment's Chief
Executive Officer, is co-Trustee, received a pro rata portion of this dividend totaling $3.0 million with respect to the 25,918.276 shares of Front Line common stock held by the
trust. Mr. Azoff, pursuant to the terms of a restricted share grant agreement, also may be entitled to certain gross-up payments from Front Line associated with distributions made
on the unvested portion of his restricted Front Line common shares for the difference between ordinary income and capital gains tax treatment. Such payments to Mr. Azoff were
$0.7 million related to the April 2009 Front Line dividend. The amount of the pro rata dividend paid to FLMG Holdings Corp. ("FLMG") and TicketWeb, LLC (wholly-owned subsidiaries
of Ticketmaster Entertainment that hold Ticketmaster Entertainment's interest in Front Line), was $15.0 million. Prior to the payment of the dividend, FLMG made a loan to Front Line in the
amount of $20.0 million,

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11RELATED PARTY TRANSACTIONS (Continued)

evidenced
by a promissory note from Front Line to FLMG with a principal amount of $20.0 million and bearing interest at a rate of 4.5%, payable no later than six months from the date of
issuance. A portion of the proceeds from the note was used, together with cash on hand at Front Line, to pay the dividend. The $20.0 million note and accumulated interest were repaid to FLMG in
the third quarter of 2009.

For
a further discussion of related party relationships, see Item 13 of the Company's Annual Report on Form 10-K, as amended, for the year ended
December 31, 2008.

NOTE 12COMMITMENTS AND CONTINGIENCIES

In the ordinary course of business, Ticketmaster Entertainment is a party to various legal proceedings. 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. 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 4Income Taxes for discussion related to income tax contingencies. For a discussion of certain legal
proceedings involving the Company, see Part II, Item 1 of this Form 10-Q.

In
addition, pursuant to the Merger Agreement, if the Merger Agreement is terminated before the Merger is completed, under some circumstances the Company may be obligated to pay to Live
Nation a termination fee of $15.0 million plus Live Nation's expenses.

NOTE 13FAIR VALUE MEASUREMENTS

In accordance with Topic 820, 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 that
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 Consolidated 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 Topic 825.

The
provisions of Topic 820 related to nonfinancial assets and liabilities became effective for the Company on January 1, 2009, and are applied prospectively. The
application of Topic 820 did not have a material impact on the Company's consolidated financial statements.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13FAIR VALUE MEASUREMENTS (Continued)

Topic 820
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
Company estimated the fair value of its long-term debt by using market prices or third-party quotes.

The
table below summarizes the fair value estimates, at September 30, 2009 (in thousands):

Carrying
Amount

Estimated
Fair Value
(Level 2)Long-term debt

$
836,980

$
822,744


NOTE 14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 expiration of the various Live Nation ticketing agreements beginning in December 2008. 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
$35.0 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 in the ticketing segment were substantially completed in the second quarter of 2009.

The
following table summarizes the restructuring liabilities balance related to the actions taken in 2008 (included as a component of other accrued expenses within the Consolidated
Balance Sheets) as of September 30, 2009.

Balance as of
January 1, 2009

Credit to
expense

Cash
payments

Foreign
Exchange
Translation

Balance as of
September 30, 2009(In thousands)Employee termination costs

$
5,687


(55
)

(5,130
)

(12
)
$
490Total

$
5,687


(55
)

(5,130
)

(12
)
$
490


During
the first quarter of 2009, the Company recorded a severance and separation charge of $1.4 million for the resignation of an executive of Ticketmaster Entertainment. As of
September 30, 2009, $1.1 million of this liability remains to be paid in bi-weekly installments for the remaining period of eighteen months through March 2011. The
severance charge was included in the general and administrative expense line item in the Consolidated Statement of Operations for the nine months ended September 30, 2009.

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TICKETMASTER ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 15INTANGIBLES AMORTIZATION

In the current year, as a result of consideration of operating results and other events impacting the business, the Company evaluated the remaining useful lives attributed to certain
intangible assets in accordance with Topic 350. The Company determined that circumstances warranted a revision to the remaining period of amortization for the related intangible assets. The
Company determined that certain international ticketing agreement intangible assets did not have a useful life beyond the second quarter of 2009, and as such, the Company accelerated the amortization
of these assets to fully amortize the assets by the end of the second quarter of 2009. The additional amortization expense related to the ticketing agreement intangible assets equaled
$5.1 million, the entire balance of which was reflected in the Ticketing segment in the second quarter of 2009.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

Forward-Looking Statements

Forward-looking statements in this Quarterly 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 II, Item 1A of this Quarterly Report on Form 10-Q. 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 the Company's Annual Report on Form 10-K, as
amended, for the year ended December 31, 2008, in connection with considering any forward-looking statements that may be made by the Company generally. 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, 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 (the
"spin-off"). 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. At the time of the spin-off, Ticketmaster Entertainment includes IAC's
minority investment in Front Line. 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 consolidated the results of Front Line from the acquisition date.

Pending Merger with Live Nation

On February 10, 2009, the Company entered into a definitive agreement to merge with Live Nation, Inc. ("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 an
indirect, wholly-owned subsidiary of Live Nation and Live Nation continuing as the public parent of the combined companies (the "Merger"). Pursuant to the terms of

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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 equity interests issued and
outstanding immediately prior to the consummation of the Merger are entitled to receive in the Merger will represent 50.01% of the total voting power of the Live Nation equity interests issued and
outstanding immediately following the consummation of the Merger. The Merger 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, domestic and
foreign regulatory approvals, 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 thereunder resulting from the Merger, which consent was obtained in May 2009. Liberty Media Corporation ("Liberty"), which beneficially owns approximately 29% of
the Company's outstanding common stock, has agreed to vote in favor of the proposed transaction, subject to the terms of a voting agreement.

The
proposed transaction has been subject to antitrust/competition regulatory review in the United States and four other countries. Ticketmaster Entertainment remains optimistic that the
regulatory process will be completed, and the Merger will close, during the first quarter of 2010. In the United States, Ticketmaster Entertainment and Live Nation are engaged in discussions with the
U.S. Department of Justice, Antitrust Division ("DOJ") regarding the proposed transaction. The parties have certified compliance with the DOJ's respective "second requests" and are now in the process
of discussing the proposed transaction, and ways the parties might address any of the DOJ's concerns, with the DOJ, as well as responding to supplemental information requests from the DOJ about the
parties' respective businesses.

The
other jurisdictions where the transaction has been under regulatory review are Canada, the United Kingdom, Norway and Turkey. The Canadian Bureau of Competition ("CBC") issued a
"second request" for additional information relating to the parties' respective businesses, and the parties are in the process of finalizing their responses to the CBC's requests. The U.K. authorities
have issued several information requests to which the parties have responded, and the matter is now before the UK Competition Commission ("CC") via a referral from the UK Office of Fair Trading
("OFT") which completed its investigation in June 2009 and determined that further evaluation by the CC is warranted in light of competition concerns that were identified by the OFT. The CC
published its "Provisional
Findings" regarding the Merger on October 8, 2009, and on October 29, 2009 held remedies hearings with the parties to review how the parties might address and resolve the CC's concerns
as set forth in its provisional findings that the Merger would result in a "substantial lessening of competition" in the UK ticketing market. The CC is scheduled to issue its final report on the
Merger on or before January 19, 2010. The Norwegian and Turkish competition authorities have both completed and closed their investigations without asserting any objections to the Merger.

Basis of Presentation

These interim unaudited 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, temporary equity and equity, comprehensive income and cash flows on a consolidated
basis. The consolidated financial statements include Ticketmaster Entertainment's investment in Front Line, which was consolidated beginning October 29, 2008, when the Company increased its
ownership interest from 39.4% to 82.3% (approximately 75% on a diluted basis). Prior to October 29, 2008, the investment in Front Line was accounted for using the equity method of accounting.

We
prepared the interim unaudited consolidated financial statements from the historical results of operations and historical basis of the assets and liabilities of Ticketmaster
Entertainment with the

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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.

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 interim unaudited 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 combined 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.

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, 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, and 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.

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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.

For
a more detailed presentation of the Company's operating businesses, see the Company's Annual Report on Form 10-K, as amended, for the year ended
December 31, 2008.

Results of Operations for the Three and Nine Months Ended September 30, 2009 Compared to the Three and Nine Months Ended September 30, 2008

Ticketmaster Entertainment Consolidated Results of Operations

Revenue



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)RevenueDomestic

$
259,395

$
233,295


11%

$
796,764

$
734,555


8%RevenueInternational


89,131


105,906


(16)%


280,634


335,996


(16)%Total revenue

$
348,526

$
339,201


3%

$
1,077,398

$
1,070,551


1%


Consolidated

Revenue in the three months ended September 30, 2009 increased $9.3 million, or 3%, from the prior-year
quarter primarily due to contributions from Front Line, in which the Company acquired a majority interest in October 2008, partially offset by lower ticketing revenue attributable to
Ticketmaster Entertainment's largest client through 2008, Live Nation (including its subsidiary, House of Blues) following the expiration on December 31, 2008 of the principal agreement for
primary ticketing services to Live Nation. On a world-wide basis, there was a 12% decrease in the number of primary tickets sold and a 4% decrease in average revenue per ticket. Excluding
the impact of Live Nation, there was a 5% decrease in the number of primary tickets sold and less than a 1% decrease in average revenue per ticket.

Domestic
revenue increased by 11% compared to the prior-year quarter due primarily to contributions from Front Line, partially offset by a 14% decrease in the number of
tickets sold, along with a 2% decrease in average revenue per ticket due to lower ticketing revenue attributable to Live Nation, mentioned above. Ticketing volumes were lower across all major
categories except Sports, with

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the
largest impact experienced in the Concerts category due to the expiration of the principal agreement for primary ticketing with Live Nation, as well as a smaller number of large concert events
compared to the prior-year quarter. Excluding the impact of Live Nation, there was a 2% decrease in the number of tickets sold domestically. International revenue decreased by 16%
primarily due to a 10% decrease in the number of tickets sold along with an 8% decrease in average revenue per ticket in Ticketmaster Entertainment's international operations. The decrease in the
number of tickets sold was driven primarily by a decline in the Concerts category. The decline in the average revenue per ticket was due largely to due largely to the volatility of foreign exchange
rates. Excluding the impact of foreign exchange rates, international revenue decreased by 7% compared to the prior-year period, primarily due to sales declines in Canada, the Netherlands
and Australia, partially offset by higher revenue in the United Kingdom, Sweden and Norway.

Ticketmaster
Entertainment's largest client through 2008, Live Nation (including its subsidiary, House of Blues), represented approximately 3% and 16% of Ticketmaster Entertainment's
consolidated revenue for the three months ended September 30, 2009 and 2008, respectively.

Revenue
in the nine months ended September 30, 2009 increased $6.8 million from 2008 primarily due to contributions from Front Line in which the Company acquired a majority
interest in October 2008, partially offset by lower ticketing revenue attributable to Ticketmaster Entertainment's largest client through 2008, Live Nation (including its subsidiary, House of
Blues) following the expiration on December 31, 2008 of the principal agreement for primary ticketing services to Live Nation. On a world-wide basis, there was a 10% decrease in the
number of primary tickets sold and a 4% decrease in average revenue per ticket. Excluding the impact of Live Nation, there was a 2% decrease in the number of primary tickets sold with no change in the
average revenue per ticket.

Domestic
revenue for the nine months ended September 30, 2009 increased by 8% compared to the prior-year period primarily due to contributions from Front Line offset
by an 11% decrease in the number of tickets sold, as well as a 1% decrease in average revenue per ticket. Ticketing volumes were lower across all categories, with the largest impact experienced in the
Concerts category due to the expiration of the principal agreement for primary ticketing with Live Nation. Excluding the impact of Live Nation, there was a 2% increase in the number of tickets sold
domestically. International revenue decreased by 16% primarily due to a 9% decrease in the number of tickets sold along with a 9% decrease in average revenue per ticket in Ticketmaster Entertainment's
international operations. The decrease in the number of tickets sold was driven primarily by a decline in the Concerts category. The decline in the average revenue per ticket is due largely to the
volatility of foreign exchange rates. Excluding the impact of foreign exchange rates, international revenue decreased by 2% compared to the same-prior-year period, primarily
due to sales declines in the Netherlands, Canada and Australia, partially offset by higher revenue in the United Kingdom, Ireland and Spain.

Ticketmaster
Entertainment's largest client through 2008, Live Nation (including its subsidiary, House of Blues), represented approximately 6% and 16% of Ticketmaster Entertainment's
consolidated revenue for the nine months ended September 30, 2009 and 2008, respectively.

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Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Revenue:Ticketing

$
292,138

$
339,201


(14)%

$
943,065

$
1,070,551


(12)%Artist Services


56,388





NM


134,333





NMTotal revenue

$
348,526

$
339,201


3%

$
1,077,398

$
1,070,551


1%


Ticketing

Refer to "Consolidated," directly above, for a discussion of revenues in Ticketmaster Entertainment's Ticketing segment.

Artist Services

On October 29, 2008, Ticketmaster Entertainment acquired additional equity interests in Front Line, giving Ticketmaster
Entertainment a controlling interest in the business. Ticketmaster Entertainment 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. In the three and nine months
ended September 30, 2009, Front Line generated revenues of $56.4 million and $134.3 million, respectively, from VIP ticketing, core management services, non-artist
management services and strategic acquisitions.

Cost of Sales



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Cost of sales:Ticketing

$
180,158

$
216,693


(17)%

$
599,330

$
686,264


(13)%Artist Services


25,431





NM


59,626





NMTotal cost of sales

$
205,589

$
216,693


(5)%

$
658,956

$
686,264


(4)%As a percentage of total revenue


59%


64%


(489)bp


61%


64%


(294)bpGross margins


41%


36%


489bp


39%


36%


294bp


Consolidated

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 Ticketmaster Entertainment's client's share of convenience and
order processing charges. In Ticketmaster Entertainment's Artist Services segment, merchandise inventory, related shipping costs and costs associated with VIP ticket packages are recorded as cost of
sales.

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Cost
of sales for the three and nine months ended September 30, 2009 decreased $11.1 million and $27.3 million, respectively, from the prior-year,
primarily due to decreases in compensation and other employee-related costs, ticketing royalties, credit card processing fees and costs associated with call center operations. These decreases were
partially offset by costs of sales associated with Front Line, which Ticketmaster Entertainment has now consolidated.

Ticketing

Ticketing cost of sales for the quarter ended September 30, 2009 decreased $36.5 million from the prior-year
quarter, primarily due to decreases of $22.0 million in compensation and other employee-related costs, $10.3 million in ticketing royalties, $4.1 million in credit card processing
fees and $1.7 million in cost savings from call center operations. The decrease in compensation and other employee-related costs was due in part to a reduction in headcount. The decrease in
ticketing royalties and credit card processing fees was primarily due to lower convenience and processing revenues. The cost savings from call center operations was due to the lower volume of customer
calls handled by the call centers, as well as the Company's focus on increased efficiencies and reducing overall expenses.

Ticketing
cost of sales for the nine months ended September 30, 2009 decreased $86.9 million from 2008, primarily due to decreases of $39.5 million in compensation
and other employee-related costs, $33.4 million in ticketing royalties, $7.5 million in credit card processing fees and $6.5 million in cost savings from call center operations.
The decrease in compensation and other employee-related costs was due in part to a reduction in headcount. The decrease in ticketing royalties and credit card processing fees was primarily due to
lower convenience and processing revenues. The cost savings from call center operations was due to the lower volume of customer calls handled by the call centers, as well the Company's focus on
increased efficiencies and reducing overall expenses.

Artist Services

On October 29, 2008, Ticketmaster Entertainment acquired additional equity interests in Front Line, giving Ticketmaster
Entertainment a controlling interest in the business. Ticketmaster Entertainment has consolidated the results of Front Line since the acquisition date and has entered into the artist services business
by virtue of the acquisition. In the three and nine months ended September 30, 2009, Front Line recorded cost of sales of $25.4 million and $59.6 million, respectively. Of the
total cost of sales for the three and nine months ended September 30, 2009, Front Line incurred $20.7 million and $44.8 million of merchandise-related costs. The remaining balance
is primarily due to costs related to fulfillment of VIP ticketing packages sold to customers.

Selling and marketing expense



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Selling and marketing expense:Ticketing

$
23,986

$
26,535


(10)%

$
67,871

$
70,564


(4)%Artist Services








NM








NMTotal selling and marketing expense

$
23,986

$
26,535


(10)%

$
67,871

$
70,564


(4)%As a percentage of total revenue


7%


8%


(94)bp


6%


7%


(29)bp


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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 engine and distribution partners,
as well as offline marketing, including sports sponsorship marketing and radio spending. Sports sponsorship agreements are intended to promote Ticketmaster Entertainment's ticket resale services.
Selling and marketing expenses are incurred only for the ticketing segment and do not impact the artist services segment.

Selling
and marketing expense for the three months ended September 30, 2009 decreased $2.5 million from the prior-year quarter, primarily due to a decrease of
$1.7 million in advertising and promotional expenditures, and a decrease of $1.3 million in compensation and other employee-related costs, partially offset by an increase of
$0.7 million in technology support costs. The decrease in advertising and promotional expenditures was due, in part, to a decrease in sports sponsorship marketing expense and fees paid to
search engine partners for online marketing. The decrease in compensation and other employee-related costs was due in part to a reduction in headcount.

Selling
and marketing expense for the nine months ended September 30, 2009 decreased $2.7 million from the prior-year quarter, primarily due to a decrease of
$1.3 million in advertising and promotional expenditures, and a decrease of $0.9 million in compensation and other employee-related
costs. The decrease in advertising and promotional expenditures was due, in part, to a decrease in sports sponsorship marketing expense and fees paid to search engine partners for online marketing.
The decrease in compensation and other employee-related costs was due in part to a reduction in headcount.

General and administrative expense



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)General and administrative expense:Ticketing

$
26,258

$
23,304


13%

$
72,493

$
74,203


(2)%Artist Services


14,905





NM


47,392





NMCorporate and unallocated


24,819


24,329


2%


75,001


60,927


23%Total general and administrative expense

$
65,982

$
47,633


39%

$
194,886

$
135,130


44%As a percentage of total revenue


19%


14%


489bp


18%


13%


547bp


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 for the three months ended September 30, 2009 increased $18.3 million from the prior-year quarter, primarily due to increases
of $8.8 million in compensation and other employee-related costs and $4.8 million in professional fees. The increase in compensation and other employee-related costs was primarily due to
$10.2 million of Front Line compensation which was not included in the prior-year quarter, partially offset by cost savings from Ticketmaster Entertainment's restructuring plan.
General and administrative expense includes non-cash and stock-based compensation expense of $6.6 million and $7.8 million for the three months ended September 30,

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2009
and 2008, respectively. The decrease in non-cash and stock-based compensation was primarily due to nonrecurring charges in the prior year for modifications of existing stock-based
compensation awards in connection with the Ticketmaster Entertainment spin-off. The increase in professional fees was primarily due to $6.9 million of legal and professional fees
incurred in connection with the pending Merger with Live Nation, partially offset by lower costs for other professional services. Excluding the impact of Front Line, general and administrative expense
increased $3.4 million, or 7%.

General
and administrative expense for the nine months ended September 30, 2009 increased $59.8 million from the prior-year period, primarily due to increases
of $27.3 million in
compensation and other employee-related costs and $18.9 million in professional fees. The increase in compensation and other employee-related costs was primarily due to $34.4 million of
Front Line compensation which was not included in the prior-year period, partially offset by cost savings from Ticketmaster Entertainment's restructuring plan. General and administrative
expense includes non-cash and stock-based compensation expense of $18.8 million and $18.1 million for the nine months ended September 30, 2009 and 2008, respectively.
The increase in non-cash and stock-based compensation was primarily due to the grant of new awards subsequent to the Ticketmaster Entertainment spin-off and the grants of
awards in connection with 2008 acquisitions, offset by charges in the prior year for modifications of existing stock-based compensation awards in connection with the Ticketmaster Entertainment
spin-off. The increase in professional fees was primarily due to $21.3 million of legal and professional fees incurred in connection with the pending Merger with Live Nation,
partially offset by lower costs for other professional services. Excluding the impact of Front Line, general and administrative expense increased $12.4 million, or 9%.

Depreciation



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Depreciation:Ticketing

$
13,248

$
12,357


7%

$
37,892

$
33,851


12%Artist Services


130





NM


398





NMCorporate and unallocated


793


860


(8)%


2,360


2,249


5%Total depreciation

$
14,171

$
13,217


7%

$
40,650

$
36,100


13%As a percentage of total revenue


4%


4%


17bp


4%


3%


40bp


Depreciation
for the three and nine months ended September 30, 2009 increased $1.0 million and $4.6 million, respectively, from 2008 primarily due to additional
equipment and internally developed software put into service in the current year.

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Adjusted EBITDA

Adjusted EBITDA is a supplemental measure and is defined in "Ticketmaster Entertainment's Principles of Financial
Reporting," below.



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Adjusted EBITDA:Ticketing

$
62,732

$
75,626


(17)%

$
206,718

$
248,196


(17)%Artist Services


19,588





NM


37,690





NMCorporate and unallocated


(22,520
)

(18,336
)

23%


(69,290
)

(49,260
)

41%Total Adjusted EBITDA

$
59,800

$
57,290


4%

$
175,118

$
198,936


(12)%


Adjusted
EBITDA for the three months ended September 30, 2009 increased $2.5 million from the prior-year quarter, due primarily to contributions from Front
Line, in which the Company acquired a majority interest in October 2008, as well as lower cost of sales and selling and marketing expense, discussed above. These increases in Adjusted EBITDA
were partially offset by lower sales volumes and increases in general and administrative expense, which were also discussed above. Excluding the impact of Ticketmaster Entertainment's acquisition of a
majority interest in Front Line in October 2008, Adjusted EBITDA decreased $17.1 million, or 30%.

Adjusted
EBITDA for the nine months ended September 30, 2009 decreased $23.8 million from the prior-year period, due to lower sales volumes and increases in
general and administrative expense, partially offset by contributions from Front Line, lower cost of sales and selling and marketing expenses, discussed above. Excluding the impact of Ticketmaster
Entertainment's acquisition of a majority interest in Front Line in October 2008, Adjusted EBITDA decreased $61.5 million, or 31%.

Operating income



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

% Change(Dollars in thousands)Operating income (loss):Ticketing

$
41,675

$
52,044


(20)%

$
139,250

$
176,998


(21)%Artist Services


5,108





NM


(396
)




NMCorporate and unallocated


(25,612
)

(25,189
)

2%


(77,361
)

(63,176
)

22%Total operating income

$
21,171

$
26,855


(21)%

$
61,493

$
113,823


(46)%


Operating
income for the three months ended September 30, 2009 decreased $5.7 million from the prior-year quarter, primarily due to increases of
$9.4 million in amortization of intangibles and $1.0 million in depreciation expense, partially offset by the increase in Adjusted EBITDA described above and a decrease of
$2.1 million in non-cash and stock-based compensation expense. The increase in intangible amortization expense was attributable to incremental amortization expense from the impact
of recent acquisitions which were not included in the prior-year quarter. Excluding the impact

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of
Ticketmaster Entertainment's acquisition of a majority interest in Front Line in October 2008, operating income decreased $10.8 million or 40%.

Operating
income for the nine months ended September 30, 2009 decreased $52.3 million from the prior-year period, primarily due to the decrease in Adjusted
EBITDA described above and increases of $24.9 million in amortization of intangibles and $4.6 million in depreciation expense. The increase in intangible amortization expense was due to
the acceleration of amortization expense of $5.1 million related to certain international ticketing agreement intangible assets and incremental amortization expense from the impact of recent
acquisitions which were not included in the prior-year period. Excluding the impact of Ticketmaster Entertainment's acquisition of a majority interest in Front Line in October 2008,
operating income decreased $51.9 million or 46%.

Corporate and unallocated expenses

Corporate and unallocated expenses primarily include compensation and other employee costs (including stock-based compensation),
outside services and professional fees. Corporate and unallocated expenses for the three months and nine months ended September 30, 2009 increased $0.4 million and $14.2 million,
respectively, from the prior-year periods primarily due to higher legal and professional fees associated with the pending Merger with Live Nation and professional services related to
operating as a publicly traded company. These higher costs were partially offset by a decrease in non-cash and stock-based compensation due to
nonrecurring charges in the prior-year quarter for modifications of existing stock-based compensation awards in connection with the Ticketmaster Entertainment spin-off.

Other expense, net



Three Months Ended
September 30,

Nine Months Ended
September 30,2009

2008

% Change

2009

2008

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

$
546

$
4,685


(88)%

$
1,914

$
11,438


(83)%Interest expense


(15,243
)

(10,909
)

40%


(48,818
)

(20,545
)

138%Equity in income of unconsolidated affiliates


700


2,850


(75)%


2,588


2,048


26%Other income (expense)


4,290


(413
)

NM


7,829


244


NM


Interest income

Interest income in 2009 for the three and nine months ended September 30, 2009 decreased $4.1 million and
$9.5 million, respectively, from the prior-year periods primarily due to the extinguishment of intercompany receivables from IAC upon the consummation of the Ticketmaster
Entertainment spin-off and lower average interest rates.

Interest expense

Interest expense for the three and nine months ended September 30, 2009 increased $4.3 million and $28.3 million,
respectively, from the prior-year periods. The increase for the three months ended September 30, 2009 was primarily due to incremental interest expense and amortization of debt
issuance costs of $5.0 million related to Ticketmaster Entertainment's Senior Notes and Senior Secured Credit Facilities, partially offset by lower interest related to capital leases. The
increase for the nine months ended September 30, 2009 was primarily due to incremental interest expense and amortization of debt issuance costs of $37.6 million related to the previously
mentioned Senior Notes and Senior

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Secured
Credit Facilities, partially offset by an $8.3 million cumulative interest charge from IAC in the second quarter of 2008 and lower interest related to capital leases.

Equity in income of unconsolidated affiliates

Equity in the income of unconsolidated affiliates for the three and nine months ended September 30, 2009 decreased
$2.2 million and increased $0.5 million, respectively, from the prior-year periods. The decrease in the income of unconsolidated affiliates for the three months ended
September 30, 2009 was primarily due the absence of equity in the income of Front Line in the current year as the Company acquired a majority interest in Front Line in October 2008,
partially offset by negative financial performance of the Company's joint venture in China which impacted the prior year. The increase in the income of unconsolidated affiliates for the nine months
ended September 30, 2009 is primarily due to the negative financial performance of the Company's joint venture in China which impacted the prior year, partially offset by the absence of equity
in the income of Front Line in the current year as the Company acquired a majority interest in Front Line in October 2008. For the three and nine months ended September 30, 2008, the
Company recognized income of $3.4 million and $2.0 million, respectively, from its noncontrolling interest in Front Line.

Other income (expense)

Other income (expense) in 2009 for the three and nine months ended September 30, 2009 increased $4.7 million and
$7.6 million, respectively, from the prior-year periods. The increase in other income for the three and nine months ended September 30, 2009 is due primarily to gains of
$3.7 million and $7.2 million, respectively, on foreign currency exchange related to the Company's operating activities outside of the United States compared to a loss of
$0.4 million and a gain of $0.2 million in the three and nine months ended September 30, 2008, respectively. In the third quarter, the Company also recognized a gain of
$2.9 million from the sale of its equity investment in iLike.com and a gain of $1.5 million on the extinguishment of a portion of its Senior Notes. Partially offsetting these items, the
Company recognized an other than temporary impairment of $3.8 million related to its cost basis investment in BCV; refer to Note 8Equity Investments in Unconsolidated
Affiliates, in the Notes to Unaudited Consolidated Financial Statements, for additional information.

Income tax provision

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

For
the nine months ended September 30, 2009 and 2008, Ticketmaster Entertainment recorded tax provisions of $7.9 million and $43.0 million, respectively, which
represent effective tax rates of 32% and 40%, respectively. The 2009 tax rate is lower than the federal statutory rate of 35% due principally to foreign income taxed at lower rates including the
effects of our international restructuring, net adjustments related to the reconciliation of provision accruals to tax returns, foreign tax credits related to foreign dividends and deductible payments
made in connection with a dividend, partially offset by losses in foreign jurisdictions for which no tax benefit can be recognized, partnership flow-through losses attributable to
noncontrolling interests and adjustments to deferred taxes due to newly enacted state tax legislation. Excluding the effects of the newly enacted state tax legislation, the Company's

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effective
tax rate would have been 26%. The 2008 tax rate is higher than the federal statutory rate of 35% principally due to state and local income taxes and losses not benefited in foreign
jurisdictions, partially offset by foreign income taxed at lower rates.

As
of December 31, 2008 and September 30, 2009, the Company had unrecognized tax benefits of approximately $1.3 million and $4.9 million, respectively. During
the three and nine months ended September 30, 2009, the unrecognized tax benefits increased by approximately $1.2 million and $3.6 million, respectively, as a result of historical
state tax positions and foreign income tax positions taken in the current year. The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax
expense. Included in income tax expense for the three and nine months ended September 30, 2009 is $0.1 million and $0.2 million, respectively, net of related deferred taxes, for
interest and penalties on unrecognized tax benefits. At September 30, 2009, the Company has accrued $0.7 million for the payment of interest and penalties.

By
virtue of previously filed separate company tax returns, as well as consolidated tax returns with IAC, Ticketmaster Entertainment is routinely under audit by federal, state, local and
foreign income tax authorities. 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 amounts recorded for unrecognized tax benefits and the amounts owed by Ticketmaster Entertainment are recorded in the period they become known. Ticketmaster Entertainment
believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.4 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 changes are not expected to be significant.

Segment Operating Results

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 manages our business, makes operating decisions and evaluates operating performance. Operating segments are consolidated
for reporting purposes if they have similar economic characteristics and meet the aggregation criteria of ASC 280,Segment Reporting("Topic 280").

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 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 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 3Segment Information in the Notes to Unaudited Consolidated Financial Statements.

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2009, Ticketmaster Entertainment had $595.1 million of cash and cash equivalents including
$381.9 million in funds representing amounts equal to the face value of tickets sold on behalf of clients ("client funds"). Ticketmaster Entertainment's $595.1 million of cash and cash
equivalents included approximately $335.4 million which were maintained principally in Canada, the United Kingdom, Australia and Ireland; of this balance, $219.1 million were client
funds. The Company does not utilize client funds for its own financing or investing activities as the amounts are payable to clients.

Net
cash provided by operating activities was $189.8 million and $200.8 million for the nine months ended September 30, 2009 and 2008, respectively. The decrease of
$11.0 million in net cash provided by operating activities reflected the decline in operating results and higher interest payments in 2009 compared to 2008. The decrease in net cash provided by
operating activities was partially offset by higher contributions from client funds of $57.8 million, driven by the timing of settlements with clients, and favorable changes in working capital,
which included the timing of settlements for accrued liabilities and income taxes payable.

Net
cash used in investing activities in the nine months ended September 30, 2009 of $61.4 million primarily resulted from cash paid for capital expenditures of
$36.0 million and $25.6 million for acquisitions in the artist services segment. Net cash used in investing activities in the nine months ended September 30, 2008 of
$1,357.1 million primarily resulted from cash transfers to IAC of $910.1 million, acquisitions, net of cash acquired, of $405.5 million and capital expenditures of
$37.0 million. The cash transfers related to IAC's centrally managed U.S. treasury function. Acquisitions, net of cash acquired, primarily related to the acquisitions of TicketsNow, Paciolan
and GET ME IN!.

Net
cash used in financing activities in the nine months ended September 30, 2009 of $34.7 million was primarily due to the repurchase and retirement of
$13.0 million face value of the outstanding Senior Notes for $11.5 million in cash, the repayment of $15.0 million of the outstanding balance on the Company's Revolver,
$6.3 million of distributions to noncontrolling interest holders and $1.5 million of payments on capital leases. Net cash provided by financing activities of $1,141.1 million in
the nine months ended September 30, 2008 was primarily due to $300.0 million of proceeds received from the issuance of the Senior Notes and $450.0 million of proceeds received
under the Senior Secured Credit Facilities. In addition, the Company drew down $15.0 million on its Revolver. The Company incurred $27.2 million of costs for these debt financings which
were initiated in connection with the spin-off. In addition, the Company received $405.5 million in capital contributions from IAC during the nine-month period.

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. Ticketmaster Entertainment believes that its cash on hand, excluding client funds, along with its anticipated operating
cash flow in 2009 and its access to financing arrangements, are sufficient to fund operating needs, capital, investing and other commitments and contingencies for the foreseeable future.

Under
the Company's Senior Secured Credit Facilities and the indenture governing the Company's Senior Notes, the Company is required to comply with certain financial covenants. The
Senior 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 therein, of 2.25 to 1.0 in order to incur additional indebtedness, other than permitted debt. 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

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total
leverage ratio for the Senior Secured Credit Facilities, calculated as total debt, as defined therein, 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 September 30, 2009, the Company was in compliance
with all maintenance-based financial covenants.

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 Senior Notes.

In
the event that the proposed Merger with Live Nation is consummated, we expect that the cost of capital related to our bank financing will increase at such time as a result of having
obtained amendments to the Senior Secured Credit Facilities required for the proposed Merger.

Critical Accounting Policies and Estimates

Refer to the discussion of our accounting policies in our audited consolidated financial statements and notes for the year ended
December 31, 2008, which are included in our Annual Report on Form 10-K, as amended, filed with the SEC.

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 the discussion of our accounting policies in our audited consolidated financial statements and notes for the year ended
December 31, 2008, which are included in our Annual Report on Form 10-K, as amended, filed with the SEC. In addition, refer to Note 2Summary of Recent
Accounting Standards in the Notes to Unaudited Consolidated Financial Statements.

TICKETMASTER ENTERTAINMENT'S PRINCIPLES OF FINANCIAL REPORTING

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

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Definition of Ticketmaster Entertainment's Supplemental Measure

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

Pro Forma Results

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

One-Time Items

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

Non-Cash and Stock-based Expenses That Are Excluded From Ticketmaster Entertainment's Supplemental Measure

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

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

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RECONCILIATION OF ADJUSTED EBITDA

For a reconciliation of Adjusted EBITDA to Net income attributable to Ticketmaster Entertainment, Inc. for the three and nine
months ended September 30, 2009 and 2008, see Note 3Segment Information in Notes to Unaudited Consolidated Financial Statements.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A Quantitative and Qualitative
Disclosure about Market Risk which is included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2008. Our exposure to market risk has not
changed materially since December 31, 2008.

Item 4(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.

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.

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PART IIOTHER INFORMATION

Item 1.Legal Proceedings



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 California's Unfair Competition Law or "UCL," codified
at California Business and Professions Code section 17200et seq.,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
July 20, 2004, Ticketmaster filed a motion for summary judgment. The Court heard the motion on December 20, 2004, and denied Ticketmaster's motion, in part, based on
Plaintiffs' arguments that they were not challenging Ticketmaster's rights to make a profit, but instead were only challenging Ticketmaster's UPS delivery charges based on Plaintiffs' "misleading
pass-through" theory of liability.

On
December 7, 2004, Ticketmaster filed its first motion for judgment on the pleadings based on the passage of Proposition 64, which became effective in November 2004.
Plaintiffs opposed the motion. The Court heard the motion on April 1, 2005, and explained that Plaintiffs could not proceed with a representative action without amending the complaint to comply
with class action procedures.

On
August 31, 2005, the plaintiffs filed their first amended complaint, for the first time pleading this case as a putative class action. The first amended complaint alleged
(i) as before, that Ticketmaster Entertainment's website disclosures in respect of its charges for UPS ticket delivery violate the UCL, 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 California's False Advertising Law or "FAL," codified at California
Business and Professions Code sections 17500et seq.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 25, 2006, Ticketmaster Entertainment filed their second 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 (2006), andPfizer Inc. v. Superior Court (Galfano), 141 Cal. App. 4th 290 (2006)) 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
September 20, 2007, the Court heard Plaintiffs' motion for class certification. On December 19, 2007, the Court issued an Order denying the motion without prejudice and
continuing the stay of the case pending resolution ofIn re Tobacco II(the lead case before the Supreme Court on the relevant issues).

On
May 18, 2009, the California Supreme Court decided theTobacco IIcase. On April 1, 2009, the Court granted plaintiff's
motion for leave to file a Second Amended Complaint that purports to clarify plaintiff's existing claims under the UCL and FAL and adds new claims that (a) Ticketmaster Entertainment's order
processing fees are unconscionable under the UCL and (b) Ticketmaster's alleged business practices violate the "unlawful" prong of the UCL because they also allegedly constitute an underlying
violation of California's Consumer Legal Remedies Act (codified at California

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Civil
Code sections 1750et seq.). Ticketmaster Entertainment filed a demurrer to the Second Amended Complaint on May 8, 2009. Plaintiffs
have filed a Third Amended Complaint to attempt to cure deficiencies in the Second Amended Complaint and to seek to address the California Supreme Court's holding in Tobacco II.Ticketmaster
Entertainment filed a demurrer to the Third Amended Complaint on July 3. The hearing on the demurrer took place
on August 7, 2009. The court took the matter under submission. Plaintiffs filed their second class certification motion on August 31, 2009, which Ticketmaster Entertainment opposed on
September 21, 2009. The hearing on the motion is scheduled for November 19, 2009.



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 Exchange Act and Section 11 of the Securities Act.
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 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. The plaintiffs had
filed a motion for class certification in the six class certification focus cases, however, on October 3, 2008, plaintiffs requested to withdraw that motion without prejudice. On
October 10, 2008, the Court granted that request. On April 2, 2009, a proposed settlement among the parties in the consolidated litigation was filed with the Court, which, if finally
approved by the Court, would result in the dismissal of the claims against the Company with prejudice. On June 9, 2009, the Court granted preliminary approval to the proposed settlement and
scheduled a settlement fairness hearing for September 10, 2009. On October 6, 2009, the court approved the settlement.



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

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afoul
of anti-scalping laws. Each lawsuit seeks compensatory and punitive damages on behalf of the class.



From February through June of 2009, eleven purported class action lawsuits asserting causes of action under various state
consumer protection laws were filed against Ticketmaster Entertainment and TicketsNow in District Courts in California, New Jersey, Minnesota, Pennsylvania, and North Carolina. The lawsuits allege
that Ticketmaster and TicketsNow unlawfully 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. Plaintiffs further claim that
Ticketmaster Entertainment violated various state consumer protection laws by allegedly "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.
Plaintiffs claim that Ticketmaster Entertainment has been unjustly enriched by this conduct and seek 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 July 20, 2009,
all of the cases were consolidated and transferred to the Central District of California. Plaintiffs filed their consolidated class action complaint on September 25, 2009. Ticketmaster
Entertainment filed its response on October 26, 2009.



Ticketmaster Entertainment and each of its directors have been named as defendants in two lawsuits filed in the Superior Court of
California, Los Angeles County (the "Court"), challenging the Merger:McBride v. Ticketmaster Entertainment, Inc., No. BC407677,
andPolice and Fire Retirement System of the City of Detroit v. Ticketmaster Entertainment, Inc., No. BC408228. These actions were
consolidated under the captionIn re Ticketmaster Entertainment Shareholder Litigation, Lead Case No. BC407677, by a court order dated
March 30, 2009. The plaintiffs filed an amended complaint in the consolidated action on July 2, 2009 and a second amended complaint on September 10, 2009 which superseded the
earlier complaints. The second amended consolidated complaint generally alleges that Ticketmaster Entertainment and its directors breached their fiduciary duties by entering into the Merger Agreement
without regard to the fairness of the Merger Agreement to the Ticketmaster Entertainment stockholders and by failing to obtain adequate consideration for shares of Ticketmaster Entertainment common
stock. The second amended consolidated complaint also alleges that the preliminary joint proxy statement/prospectus of Live Nation and Ticketmaster Entertainment, which is a part of Amendment
No. 1 to the Registration Statement of Live Nation that was filed with the SEC on July 1, 2009, contains material omissions and misstatements. Live Nation and Ticketmaster
Entertainment's financial advisor, Allen & Co., are also named as defendants in the consolidated action and are charged with aiding and abetting the Ticketmaster Entertainment directors'
alleged breaches of fiduciary duty. Among other things, the second amended consolidated complaint seeks an injunction barring the completion of the Merger until an adequate proxy statement is filed
and Ticketmaster Entertainment and its directors have completed a proper process for selling Ticketmaster Entertainment or evaluating its strategic alternatives, rescission of the Merger Agreement
compensatory damages, and attorneys' fees and expenses. Plaintiffs have filed a motion for leave to file a third amended complaint that is presently pending with the Court. Ticketmaster Entertainment
and Live Nation believe the litigation is without merit and intend to defend it vigorously.

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The Federal Trade Commission ("FTC") is currently investigating the methods by which Ticketmaster Entertainment and TicketsNow
previously advertised and sold tickets to consumers on the TicketsNow resale marketplace. Ticketmaster Entertainment and TicketsNow are providing the FTC with information and responding to information
requests from the FTC regarding these issues, and are continuing to cooperate with and negotiate an equitable resolution of the FTC's investigation.

Item 1A.Risk Factor

Cautionary Statements Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q 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 Entertainment does not undertake to update these forward-looking statements.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the below risks, which could materially
affect our business, financial condition or future results. The risks described below are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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. 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 SPIN-OFF FROM IAC

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 IAC's spin-off of each of Ticketmaster Entertainment and certain other former businesses of IAC, each of
which is referred to as a Spinco, IAC received a private letter ruling from the IRS regarding the qualification of these spin-offs as transactions that are generally tax-free
for U.S. federal income tax purposes. IAC's spin-off of each of the Spincos is referred to collectively as the IAC spin-offs. 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 IAC 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 IAC 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, Ticketmaster Entertainment is severally liable for any federal income
taxes imposed on IAC with respect to taxable periods during which Ticketmaster Entertainment was a member of IAC's consolidated federal income tax return group, including the period in which the IAC
spin-offs were consummated. Under the Tax Sharing Agreement that Ticketmaster Entertainment entered into with IAC and the other Spincos, Ticketmaster Entertainment generally is required to
indemnify IAC and the other Spincos for any taxes resulting from the Ticketmaster Entertainment spin-off to the extent such amounts resulted from (i) any act or failure to act by
Ticketmaster Entertainment described in the covenants in the Tax Sharing Agreement, (ii) any acquisition of equity securities or assets of Ticketmaster Entertainment, or

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(iii) any
breach by Ticketmaster Entertainment 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. Ticketmaster Entertainment is entitled to indemnification from IAC, among other things, if, Ticketmaster
Entertainment is liable for, or otherwise required to make a payment in respect of, a Ticketmaster Entertainment spin-off tax liability for which Ticketmaster Entertainment is not
responsible under the Tax Sharing Agreement and, if applicable, is unable to collect from the Spinco responsible for such liability under the Tax Sharing Agreement. Ticketmaster Entertainment's
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 IAC spin-offs to be taxable to IAC and
may give rise to indemnification obligations of Ticketmaster Entertainment under the Tax Sharing Agreement.

Current U.S. federal income tax law creates a presumption that any of the IAC 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 Ticketmaster Entertainment's ability during the two-year period following the Ticketmaster Entertainment spin-off to enter into certain
transactions that might be advantageous to Ticketmaster Entertainment and its 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 Ticketmaster Entertainment's
ability to take such actions for a period of 25 months from the day after the date of the Ticketmaster Entertainment spin-off. Entering into the merger agreement with Live Nation
did not violate these restrictions because, prior to entering into the agreement, Ticketmaster Entertainment provided IAC with an unqualified opinion of tax counsel contemplated by the Tax Sharing
Agreement and IAC confirmed that the opinion was satisfactory to IAC.

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 Ticketmaster
Entertainment spin-off, Liberty Media 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 Ticketmaster Entertainment spin-off, owned stock of each Spinco representing approximately 29.9% by vote and value. Accordingly, in evaluating Ticketmaster
Entertainment's ability to engage in certain transactions involving its equity securities, Ticketmaster Entertainment will need to take into account the activities of Liberty Media and its affiliates.

As
a result of these rules, even if each IAC 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 IAC spin-offs may become taxable to IAC as a result of transactions in IAC or Spinco equity securities. As discussed previously,

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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 merger with Live Nation, Ticketmaster Entertainment has received an unqualified opinion of tax counsel that the transaction as contemplated in the
definitive merger agreement will not have an adverse tax effect on the Ticketmaster Entertainment spin-off. Moreover, the closing of the merger is conditioned on Ticketmaster Entertainment
having received another such unqualified opinion of tax counsel, dated as of the closing date of the merger, and IAC's written acknowledgement that the opinion is in form and substance satisfactory to
IAC. However, the IRS may disagree with the conclusions in these opinions of counsel and determine that the merger causes the Ticketmaster Entertainment spin-off to be taxable to IAC. Were
this to occur and that position were sustained, Ticketmaster Entertainment would be required to make material indemnification payments to IAC.

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

The agreements that Ticketmaster Entertainment 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 Ticketmaster Entertainment may not be as favorable as would have
resulted from negotiations among unrelated third parties.

RISKS RELATING TO OUR BUSINESS

Live Entertainment Industry and General Economic TrendsTicketmaster Entertainment's 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 its Ticketing segment, Ticketmaster Entertainment sells tickets to live entertainment, sporting and leisure events at arenas,
stadiums, theaters and other facilities. Through its Artist Services segment, Ticketmaster Entertainment provides artist management services to nearly 200 clients, and derives significant revenues
from touring and live concerts by these clients. Accordingly, Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business, financial condition and results of operations.
The Ticketing segment relies on third parties to create and perform live entertainment, sporting and leisure events and to price tickets to such events. Accordingly, Ticketmaster Entertainment's
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, the 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 Ticketmaster Entertainment's 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

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worsening
of Ticketmaster Entertainment's results or domestic and global economic conditions could change certain estimates and assumptions that are significant to the underlying amounts included in
Ticketmaster Entertainment's Consolidated Financial Statements and the notes thereto included in its Annual Report on Form 10-K, as amended, for the fiscal year ended
December 31, 2008 and in the joint proxy statement/prospectus relating to the pending merger with Live Nation. A protracted global recession could have a significant negative impact on
Ticketmaster Entertainment's business, financial condition and results of operations. Similarly, public heath issues or a health epidemic could result in the cancellation of live entertainment events
or in lower attendance and ticket sales if fans choose to not attend events they would otherwise attend out of heath concerns. Recently, human cases of swine flu virus infection have been identified
in the United States and internationally. If public health issues such as the swine flu were to result in the cancellation of live entertainment events or diminished ticket sales, Ticketmaster
Entertainment's business, financial condition and results of operations could be negatively impacted.

Third Party RelationshipsTicketmaster Entertainment depends on relationships with clients and any adverse changes in these relationships could adversely affect
its business, financial condition and results of operations.

Ticketmaster Entertainment's success is dependent, in significant part, on the ability of Ticketmaster Entertainment's businesses to
maintain and renew relationships with existing clients and to establish new client relationships. Ticketmaster Entertainment anticipates that for the foreseeable future, the substantial majority of
its revenues from the Ticketing segment will be derived from online and offline sales of tickets. Ticketmaster Entertainment also expects 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 its consolidated revenues for the Ticketing segment.

Securing
the right to sell tickets depends, in substantial part, on the ability of Ticketmaster Entertainment's businesses to enter into, maintain and renew client contracts on favorable
terms. In light of the fact that the Merger ultimately may not be completed, it is important to note that revenue attributable to Ticketmaster Entertainment's largest client, Live Nation (including
its subsidiary, House of Blues), represented approximately 13% of Ticketmaster Entertainment's 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 Ticketmaster Entertainment's total revenues in 2008. The
worldwide agreement expired on December 31, 2008, and Ticketmaster Entertainment anticipates 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 Ticketmaster Entertainment's arrangements with clients of the Artist Services segment are terminable at will by either party. The loss of key artists could negatively
impact Ticketmaster Entertainment's business.

While
fees from management services represent slightly less than half the revenue of Ticketmaster Entertainment's 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 Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business.

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Ticketmaster
Entertainment cannot provide assurances that its 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 its 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 Ticketmaster Entertainment's 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 Ticketmaster
Entertainment's business, financial condition and results of operations.

Another
important component of Ticketmaster Entertainment's success is the ability of Ticketmaster Entertainment's 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 Ticketmaster Entertainment's businesses for any reason, could adversely affect Ticketmaster Entertainment's
business, financial condition and results of operations.

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

The ticketing industry is highly competitive. Ticketmaster Entertainment faces significant competition from other national, regional
and local primary ticketing service providers to secure new and retain existing clients on a continuous basis. Additionally, Ticketmaster Entertainment faces 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. Ticketmaster
Entertainment also faces 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 Ticketmaster Entertainment faces in the ticketing industry could cause the volume of its ticketing services business to decline. There can be no assurance that Ticketmaster
Entertainment will be able to compete successfully in the future with existing or potential competitors or that competition will not have an adverse effect on its business and financial condition.
Moreover, as Ticketmaster Entertainment expands into new lines of businesses (including in connection with the pending merger with Live Nation), Ticketmaster Entertainment may face direct competition,
in the live music industry, with its 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 Ticketmaster Entertainment's prospective or current primary ticketing clients could result in a decline in the number of
clients Ticketmaster Entertainment
has and a decline in the volume of its ticketing services business, which could adversely affect its 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. Ticketmaster
Entertainment competes with these companies and individuals to discover new and emerging artists and to represent established acts. In addition, certain of Ticketmaster Entertainment's arrangements
with clients of Ticketmaster Entertainment's Artist Services business are terminable at will by either party,

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leading
to competition to retain those artists as clients. Competition is intense and may contribute to a decline in the volume of Ticketmaster Entertainment's Artist Services business, which could
adversely affect Ticketmaster Entertainment's business and financial condition.

Covenants in Ticketmaster Entertainment's debt agreements restrict Ticketmaster Entertainment's business in many ways and if Ticketmaster Entertainment does not effectively
manage its business to comply with these covenants, its financial condition and results of operations could be adversely affected.

Ticketmaster Entertainment's senior secured credit facilities and/or the indenture governing the Ticketmaster Entertainment 10.75%
senior notes due 2016, which are referred to as the Ticketmaster Entertainment Senior Notes, contain various covenants that limit Ticketmaster Entertainment's ability and/or Ticketmaster
Entertainment's restricted subsidiaries' ability to, among other things:



In
addition, Ticketmaster Entertainment's senior secured credit facilities require it to maintain specified financial ratios. Ticketmaster Entertainment's ability to meet those financial
ratios can be affected by events beyond Ticketmaster Entertainment's control, and Ticketmaster Entertainment may be unable to meet those tests. Among other things, certain adjustments required in
connection with the pending merger with Live Nation as a result of Ticketmaster Entertainment's status as the deemed accounting acquired company may make it more difficult for Ticketmaster
Entertainment to comply with these financial ratios. In addition, a failure on Ticketmaster Entertainment's part to maintain effective internal controls to measure compliance with these covenants
could affect its ability to take corrective actions on a timely basis, and could result in its being in breach. A breach of any of these covenants could result in a default under Ticketmaster
Entertainment's senior secured credit facilities and/or Ticketmaster Entertainment's other indebtedness. Upon the occurrence of an event of default under Ticketmaster Entertainment's senior secured
credit facilities, the lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable. If Ticketmaster Entertainment 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 Ticketmaster Entertainment's assets. If
the lenders under Ticketmaster Entertainment's senior secured
credit facilities accelerate the repayment of borrowings, Ticketmaster Entertainment may not have sufficient assets to repay its senior secured credit facilities and its other indebtedness.

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

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International Presence and ExpansionTicketmaster Entertainment's businesses operate in international markets in which Ticketmaster Entertainment has limited
experience. Ticketmaster Entertainment's businesses may not be able to successfully expand into new, or further into existing, international markets.

Ticketmaster Entertainment provides services in various jurisdictions abroad through a number of brands and businesses that it owns and
operates, as well as through joint ventures, and expects to continue to expand its international presence. Ticketmaster Entertainment faces, and expects to continue to face, additional risks in the
case of its existing and future international operations, including:



Ticketmaster
Entertainment's ability to expand its international operations into new jurisdictions, or further into existing, jurisdictions will depend, in significant part, on its
ability to identify potential acquisition candidates, joint venture or other partners, and enter into arrangements with these parties on favorable terms, as well as Ticketmaster Entertainment's
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, Ticketmaster Entertainment's 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.

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In
addition, the ticketing industry in many jurisdictions abroad is more fragmented and local than it is in the United States. Ticketmaster Entertainment's success in these markets will
depend on the ability of Ticketmaster Entertainment's 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, Ticketmaster Entertainment 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.

Foreign Currency RisksTicketmaster Entertainment faces 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, Ticketmaster Entertainment will be exposed to foreign exchange rate fluctuations. After accounting for such fluctuations, Ticketmaster Entertainment may be
required to record significant gains or losses, the amount of which will vary based on then current exchange rates, which could cause its results to differ materially from expectations. As
Ticketmaster Entertainment continues to expand its international presence, its exposure to exchange rate fluctuations will increase, which may have a negative impact on its financial results.

Changing Customer Requirements and Industry StandardsTicketmaster Entertainment's 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. Ticketmaster Entertainment's 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 Ticketmaster Entertainment's 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 Ticketmaster Entertainment's businesses to
modify or adapt their respective services or infrastructures. The failure of Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business, financial condition and results of operations.

In
addition, Ticketmaster Entertainment is currently in the process of migrating its international brands and businesses to the Ticketmaster System in an attempt to provide consistent
and state-of-the-art services across its businesses and to reduce the cost and expense of maintaining multiple systems, which Ticketmaster Entertainment 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 Ticketmaster
Entertainment's ability to achieve the desired results in a timely manner. Also, Ticketmaster Entertainment may be unable to devote financial resources to new technologies and systems in the future,
which could adversely affect its business, financial condition and results of operations.

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

Since Ticketmaster Entertainment's 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

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abroad,
which are subject to change at any time. For example, Ticketmaster Entertainment's 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. Ticketmaster
Entertainment's 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 Ticketmaster Entertainment's 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. Ticketmaster Entertainment's 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. The failure of Ticketmaster Entertainment's businesses to comply
with these laws and regulations could result in fines and/or proceedings against Ticketmaster Entertainment by governmental agencies and/or consumers, which if material, could adversely affect its
business, financial condition and results of operations. In addition, the promulgation of new laws, rules and regulations that restrict or otherwise unfavorably impact the ability or manner in which
Ticketmaster Entertainment's businesses provide primary
ticketing and ticket resale services would require Ticketmaster Entertainment's 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 Ticketmaster Entertainment to additional liabilities.

In
addition, the application of various domestic and international sales, use, value-added and other tax laws, rules and regulations to Ticketmaster Entertainment's historical and new
products and services is subject to interpretation by applicable taxing authorities. While Ticketmaster Entertainment believes that it is compliant with current tax provisions, taxing authorities may
take a contrary position and such positions may adversely affect its 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 Ticketmaster Entertainment and its businesses with applicable consumer protection, advertising, unfair business practice,
antitrust (and similar or related laws) and other laws. Ticketmaster Entertainment's 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. Ticketmaster Entertainment has 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 Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business, financial condition and results of operations. See Part II, Item 1 "Legal Proceedings" of this
report for a description of certain current legal proceedings involving Ticketmaster Entertainment.

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

Ticketmaster Entertainment's success depends, in part, on Ticketmaster Entertainment's ability to maintain the integrity of
Ticketmaster Entertainment's 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 Ticketmaster Entertainment's information systems and infrastructures may adversely affect Ticketmaster Entertainment's ability to operate websites, process and fulfill
transactions, respond to customer inquiries and generally maintain cost-efficient operations. Ticketmaster Entertainment may experience occasional system interruptions that make some or
all systems or data unavailable or prevent its businesses from efficiently providing services or fulfilling orders. Ticketmaster Entertainment also relies 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 its systems and
infrastructures, its businesses, its affiliates and/or third parties, or deterioration in the performance of these systems and infrastructures, could impair the ability of Ticketmaster Entertainment's
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 Ticketmaster Entertainment's businesses from providing services, fulfilling orders and/or processing transactions. While Ticketmaster
Entertainment's businesses have backup systems for certain aspects of their operations, disaster recovery planning by its nature cannot be sufficient for all eventualities. In addition, Ticketmaster
Entertainment 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 Ticketmaster
Entertainment's business, financial conditions and results of operations.

In
addition, any penetration of network security or other misappropriation or misuse of personal consumer information could cause interruptions in the operations of Ticketmaster
Entertainment's businesses and subject Ticketmaster Entertainment to increased costs, litigation and other liabilities. Network security issues could lead to claims against Ticketmaster Entertainment
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 Ticketmaster Entertainment's reputation with consumers and third parties with whom Ticketmaster Entertainment does 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. Ticketmaster Entertainment may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences.
Ticketmaster Entertainment also faces risks associated with security breaches affecting third parties with which it is affiliated or otherwise conducts business online. Consumers are generally
concerned with security and privacy of the Internet, and any publicized security problems affecting Ticketmaster Entertainment's businesses and/or those of third parties may discourage consumers from
doing business with Ticketmaster Entertainment, which could have an adverse effect on Ticketmaster Entertainment's business, financial condition and results of operations.

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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, Ticketmaster Entertainment's 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
Ticketmaster Entertainment and its 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. Ticketmaster Entertainment 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 its business, financial condition and results of operations.

Ticketmaster
Entertainment's 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. Ticketmaster Entertainment's failure, and/or the failure by the various third party vendors and service providers with which Ticketmaster Entertainment does 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 Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business, financial condition and results of operations.

Intellectual PropertyTicketmaster Entertainment may fail to adequately protect its intellectual property rights or may be accused of infringing intellectual
property rights of third parties.

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

Ticketmaster
Entertainment relies 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.

Ticketmaster
Entertainment has generally registered and continues to apply to register, or secure by contract when appropriate, its trademarks and service marks as they are developed and
used, and reserves and registers domain names as it deems appropriate. Ticketmaster Entertainment generally considers the protection of its trademarks to be important for purposes of brand maintenance
and reputation. While Ticketmaster Entertainment vigorously protects its 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. The failure of Ticketmaster Entertainment to protect its

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intellectual
property rights in a meaningful manner or challenges to related contractual rights could result in erosion of brand names and limit its ability to control marketing on or through the
Internet using its various domain names or otherwise, which could adversely affect its business, financial condition and results of operations.

Some
of Ticketmaster Entertainment's 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. Ticketmaster Entertainment considers applying for patents or for other appropriate statutory protection when it
develops valuable new or improved proprietary technologies or identifies inventions, 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 Ticketmaster Entertainment owns. Likewise, the issuance of a patent to
Ticketmaster Entertainment does not mean that its processes or inventions will not be found to infringe upon patents or other rights previously issued to third parties.

From
time to time, Ticketmaster Entertainment is 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 Ticketmaster Entertainment's intellectual property
rights, protect trade secrets or 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 Ticketmaster Entertainment's 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 Ticketmaster Entertainment's business, including prior to the completion of the
Merger.

In order to be successful, Ticketmaster Entertainment must attract and retain talented executives and other key employees, including
those in managerial, technical, sales, marketing, and support positions. Ticketmaster Entertainment's 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 Ticketmaster Entertainment, or the loss of key employees, such as Ticketmaster
Entertainment's Chief Executive Officer, Mr. Azoff, who not only has a leadership role for Ticketmaster Entertainment as a whole but also is critical to the success of its Artist Services
business, could adversely impact Ticketmaster Entertainment's 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 Ticketmaster Entertainment's operations.

Ticketmaster Entertainment may be unable to make the changes necessary to comply with the internal control over financial reporting requirements of Section 404 of the
Sarbanes-Oxley Act of 2002.

Ticketmaster Entertainment is required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 by the end of its fiscal
year ending December 31, 2009 for the first time as a newly established public company, and, accordingly, its Annual Report on Form 10-K, as amended, for the fiscal year
ended December 31, 2008 does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of its independent registered public
accounting firm due to a transition period established by the SEC. If Ticketmaster Entertainment's management is unable to conclude that Ticketmaster Entertainment maintains effective internal control
over financial

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reporting
as of December 31, 2009 and future periods, or if Ticketmaster Entertainment's independent registered public accounting firm is unable to deliver an attestation report opining that
Ticketmaster Entertainment maintains effective internal control over financial reporting as of December 31, 2009 and future periods, Ticketmaster Entertainment's business, financial condition
and results of operations could be adversely affected.

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

As a result of Ticketmaster Entertainment's spin-off from IAC, IAC no longer has any obligation to provide financial,
operational or organizational assistance to Ticketmaster Entertainment, other than limited services pursuant to a Transition Services Agreement that Ticketmaster Entertainment entered into in
connection with the Ticketmaster Entertainment spin-off with IAC and the Spincos. As a separate public entity, Ticketmaster Entertainment is 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 Ticketmaster
Entertainment's management and have required and will require the hiring of additional personnel. Ticketmaster Entertainment may need to implement additional systems that require new expenditures in
order to adequately function as a public company. Ticketmaster Entertainment has 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 Ticketmaster Entertainment.

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

Maintaining and promoting the Ticketmaster andwww.ticketmaster.com(and related
international) brand names and, to a lesser extent, thewww.ticketsnow.com,www.ticketweb.com, www.museumtix.comandwww.tmvista.com(and related international) brand names, is critical to the
ability of Ticketmaster Entertainment's businesses to attract consumers and business customers to their respective websites and other distribution channels. Ticketmaster Entertainment believes 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 online content and services. Accordingly,
Ticketmaster Entertainment has spent, and expects 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 Ticketmaster Entertainment's businesses to maintain
the recognition of their respective brands and to attract and retain consumers in a cost-effective manner could adversely affect Ticketmaster Entertainment's business, financial condition
and results of operations.

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

Ticketmaster Entertainment's growth may depend upon future acquisitions and depends, in part, on Ticketmaster Entertainment's ability
to successfully integrate historical acquisitions. Ticketmaster

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Entertainment
may experience operational and financial risks in connection with acquisitions. To the extent that Ticketmaster Entertainment continues to grow through acquisitions, it will need
to:



Ticketmaster
Entertainment 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 its 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 charge recorded in the fourth
quarter of 2008 related to the impairment of goodwill. The occurrence of any of these events could adversely affect Ticketmaster Entertainment's business, financial condition and results of
operations.

Through
certain acquisitions (all of which were completed prior to February 8, 2009), such as the acquisitions of TicketsNow, Emma Entertainment, Echo, GET ME IN! and Front Line,
Ticketmaster Entertainment entered into aspects, and through future acquisitions may enter into aspects, of the ticketing and/or entertainment industries in which it 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 Ticketmaster Entertainment's relationships with its
clients and its ability to attract new clients. This would adversely affect Ticketmaster Entertainment's business, financial condition and results of operations.

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

In connection with Ticketmaster Entertainment's spin-off from IAC, Ticketmaster Entertainment incurred indebtedness of
approximately $765 million and has since drawn down an additional $100 million from its revolving credit facility, which is referred to as the revolver. Ticketmaster Entertainment's
future capital needs may include funds necessary to develop new services or to enhance its 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 Ticketmaster Entertainment's ability to secure additional financing in the future on favorable terms or at all. Ticketmaster
Entertainment's ability to secure additional financing and satisfy Ticketmaster Entertainment's financial obligations under indebtedness outstanding from time to time will depend upon Ticketmaster
Entertainment's 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 Ticketmaster Entertainment's control. The prolonged continuation or worsening of current credit market conditions would
have a material adverse effect on Ticketmaster Entertainment's ability to secure financing on favorable terms, if at all.

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Ticketmaster
Entertainment may be unable to secure additional financing or financing on favorable terms or its operating cash flow may be insufficient to satisfy its 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, Ticketmaster Entertainment may be
unable to develop new services or enhance its 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 its business, financial condition and results of operations. If additional funds are raised through the issuance of equity securities, Ticketmaster Entertainment
stockholders may experience significant dilution. Also, Ticketmaster Entertainment's ability to engage in significant equity issuances is limited in order to preserve the tax-free nature
of the Ticketmaster Entertainment spin-off.

Volatile Stock PriceTicketmaster Entertainment's stock price has been volatile.

Shares of Ticketmaster Entertainment common stock began trading on NASDAQ on August 21, 2008 upon completion of Ticketmaster
Entertainment's spin-off from IAC (and for a short period prior to that were listed on a "when-issued" basis). Since this time, the market price of Ticketmaster Entertainment
common stock has been volatile. It is likely that the market price of Ticketmaster Entertainment common stock will continue to be subject to significant fluctuations. Ticketmaster Entertainment
believes that future announcements concerning it, its competitors or its principal customers, including technological innovations, new product and service introductions, governmental regulations,
litigation or changes in earnings estimated by it or analysts may cause the market price of Ticketmaster Entertainment common stock to fluctuate substantially in the future. Sales of substantial
amounts of outstanding Ticketmaster Entertainment common stock in the public market could materially and adversely affect the market price of Ticketmaster Entertainment 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
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 Ticketmaster Entertainment common stock.

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

In accordance with GAAP, 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. If the carrying amount of Ticketmaster Entertainment's goodwill exceeds its implied fair value, an
impairment loss equal to the excess is recorded. During the year ended December 31, 2008, Ticketmaster Entertainment recognized a total non-cash charge of $1.1 billion
related to the impairment of goodwill of its Ticketing reporting unit. As of December 31, 2008, after giving effect to the impairment charge, Ticketmaster Entertainment had goodwill of
approximately $455.8 million, which constituted approximately 27% of its total assets at that date. Due to the volatile stock market, the current economic uncertainty and other factors,
Ticketmaster Entertainment 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 its stock prices and market capitalization, a significant decline in its expected cash flows, an adverse change in the business climate and slower growth rates in its industry. If
Ticketmaster Entertainment is required to record an impairment charge for its goodwill in the future, this would adversely impact its financial condition and financial results.

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Item 6.Exhibits

Exhibit

Description10.1

Amendment No. 1 to Credit Agreement among Ticketmaster Entertainment, Inc., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent, dated
July 25, 2008.31.1

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


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Table of Contents

SIGNATURES

Pursuant to the requirements 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: November 9, 2009

By:

/s/ BRIAN REGAN Brian Regan Executive Vice President and Chief Financial Officer


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