UNITED STATES
SECURITIES 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 June 30, 2008oro

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


Commission File No. 001-34064

TICKETMASTER(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

95-4546874(I.R.S. Employer
Identification No.)8800 Sunset Blvd., West Hollywood, CA 90069(Address of Registrant's principal executive offices)(310) 360-3300(Registrant's telephone number, including area code)


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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 o    No ý

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

Large accelerated filer o

Accelerated filer o

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

Smaller reporting company o


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

As of September 18, 2008, the following shares of the Registrant's common stock were outstanding: 56,195,031



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EXPLANATORY NOTE

On July 1, 2008, the Board of Directors of IAC/InterActiveCorp, a Delaware corporation ("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, a Delaware corporation
("Ticketmaster" or the "Company"). On August 20, 2008, in connection with the spin-off, IAC distributed to its stockholders all of the outstanding shares of Common Stock, par value
$0.01 per share, of Ticketmaster.

Prior
to the spin-off, Ticketmaster entered into a Separation and Distribution Agreement and several other agreements with IAC and the other Spincos (as defined below) to
effect the separation of the Spincos and provide a framework for the relationships of the Spincos with IAC and each of the other Spincos.

Except
as otherwise indicated or unless the context otherwise requires, (i) "IAC/InterActiveCorp" and "IAC" refer to IAC/InterActiveCorp and its consolidated subsidiaries other
than, for all periods following the spin-off, HSN, Inc., Interval Leisure Group, Inc., Tree.com, Inc. and Ticketmaster and their respective subsidiaries (the
"Spincos"), all of which were spun off from IAC concurrent with the Ticketmaster spin-off, (ii) "Ticketmaster," the "Company," "we," "our" or "us" refers to Ticketmaster, and
(iii) "Spin-Off," "spin-off," "separation" or "distribution" refers to the distribution by IAC of the common stock of the Company and the other Spincos.

For
further information regarding the presentation of financial information in this Quarterly Report on Form 10-Q, please see Note 1Basis of
Presentation to the combined financial statements.

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TICKETMASTER    INDEX

PART I.

FINANCIAL INFORMATIONItem 1.

Financial Statements

1Combined Statements of Operations for the Three and Six Months Ended June 30, 2008 and 2007 (unaudited)

1Combined Balance Sheets as of June 30, 2008 (unaudited) and December 31, 2007

2Combined Statement of Invested Equity as of June 30, 2008 (unaudited) and December 31, 2007

3Combined Statements of Cash Flows for the Six Months ended June 30, 2008 and 2007 (unaudited)

4Notes to Unaudited Combined Financial Statements

5Item 2.

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

15Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28Item 4T.

Controls and Procedures

28PART II.

OTHER INFORMATIONItem 1.

Legal Proceedings

29Item 1A.

Risk Factors

29Item 6.

Exhibits

29SIGNATURES

30


i

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PART 1FINANCIAL STATEMENTS

Item 1.Combined Financial Statements

TICKETMASTER AND SUBSIDIARIES        COMBINED STATEMENTS OF OPERATIONS        (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007(In thousands)Service revenue

$
378,945

$
288,210

$
723,762

$
588,757Interest on funds held for clients


3,424


5,206


7,588


8,236Total revenue


382,369


293,416


731,350


596,993Cost of sales (exclusive of depreciation shown separately below)


248,549


183,860


469,571


368,644Gross profit


133,820


109,556


261,779


228,349Selling and marketing expense


24,636


8,158


44,029


15,231General and administrative expense


45,644


39,892


87,497


74,150Amortization of intangibles


11,535


6,667


20,403


13,520Depreciation


11,828


9,471


22,883


18,592Operating income


40,177


45,368


86,967


106,856Other income (expense):Interest income


1,430


8,499


3,022


13,877Interest expense


(6,868
)

(133
)

(5,905
)

(399
)Equity in (losses) income of uncombined affiliates


(1,468
)

960


(802
)

1,825Other (expense) income


(287
)

(208
)

657


(125
)Total other (expense) income, net


(7,193
)

9,118


(3,028
)

15,178Earnings before income taxes and minority interest


32,984


54,486


83,939


122,034Income tax provision


(10,854
)

(19,873
)

(29,675
)

(44,510
)Minority interest in losses of combined subsidiaries


882


191


1,455


205Net income

$
23,012

$
34,804

$
55,719

$
77,729


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

1

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TICKETMASTER AND SUBSIDIARIES        COMBINED BALANCE SHEETS

June 30, 2008

December 31, 2007(unaudited)

(audited)(In thousands)ASSETSCash and cash equivalents

$
520,795

$
568,417Restricted cash





853Marketable securities


4,133


Accounts receivable, client accounts


112,658


99,453Accounts receivable, trade, net of allowance of $7,140 and $2,346, respectively


44,035


33,979Deferred income taxes


8,064


5,883Contract advances


54,915


63,126Prepaid expenses and other current assets


40,317


21,149Total current assets


784,917


792,860Property and equipment, net


112,434


95,122Goodwill


1,389,179


1,090,418Intangible assets, net


224,635


92,325Long-term investments


126,980


149,295Other non-current assets


95,890


86,514TOTAL ASSETS

$
2,734,035

$
2,306,534LIABILITIES AND INVESTED EQUITYLIABILITIES:Accounts payable, client accounts

$
478,003

$
413,075Accounts payable, trade


19,199


14,698Accrued compensation and benefits


28,355


31,171Deferred revenue


31,278


19,829Income taxes payable


1,565


1,721Other accrued expenses and current liabilities


41,156


42,449Total current liabilities


599,556


522,943Income taxes payable


1,022


982Other long-term liabilities


7,266


3,204Deferred income taxes


66,245


32,416Minority interest


7,331


7,812Commitments and contingenciesINVESTED EQUITY:Invested capital


2,604,162


2,172,497Receivables from IAC and subsidiaries


(606,947
)

(474,110
)Accumulated other comprehensive income


55,400


40,790Total invested equity


2,052,615


1,739,177TOTAL LIABILITIES AND INVESTED EQUITY

$
2,734,035

$
2,306,534


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

2

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TICKETMASTER AND SUBSIDIARIES        COMBINED STATEMENT OF INVESTED EQUITY        (Unaudited)

Total

Invested Capital

Receivables from
IAC and
Subsidiaries

Accumulated Other
Comprehensive
Income(In thousands)Balance as of December 31, 2007

$
1,739,177

$
2,172,497

$
(474,110
)
$
40,790Comprehensive income:Net income for the six months ended June 30, 2008


55,719


55,719





Foreign currency translation


14,610








14,610Comprehensive income


70,329Net transfers from IAC (principally funding for acquisitions)


375,946


375,946





Net change in receivables from IAC and subsidiaries


(132,837
)




(132,837
)

Balance as of June 30, 2008

$
2,052,615

$
2,604,162

$
(606,947
)
$
55,400


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

3

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TICKETMASTER AND SUBSIDIARIES        COMBINED STATEMENTS OF CASH FLOWS        (Unaudited)

Six Months Ended June 30,2008

2007(In thousands)Cash flows from operating activities:Net income

$
55,719

$
77,729Adjustments to reconcile net income to net cash provided by operating activities:Amortization of intangibles


20,403


13,520Depreciation


22,883


18,592Non-cash compensation expense


11,393


4,942Deferred income taxes


(2,703
)

(5,606
)Equity in losses (income) of uncombined affiliates, net of dividends


4,290


3,529Minority interest in losses of combined subsidiaries


(1,455
)

(205
)Changes in current assets and liabilities:Accounts receivable


(5,282
)

(2,126
)Prepaid expenses and other current assets


(12,020
)

(2,529
)Accounts payable and other current liabilities


(31,242
)

(13,143
)Income taxes payable


(5,442
)

(1,799
)Deferred revenue


5,652


282Funds collected on behalf of clients, net


42,530


32,347Other, net


3,988


495Net cash provided by operating activities


108,714


126,028Cash flows from investing activities:Transfers (to) from IAC


(141,914
)

17,256Acquisitions, net of cash acquired


(393,545
)

(31,260
)Capital expenditures


(23,240
)

(21,361
)Purchase of marketable securities


(4,176
)

Increase in long-term investments


(257
)

(77
)Net cash used in investing activities


(563,132
)

(35,442
)Cash flows from financing activities:Capital contributions from IAC


393,545


31,260Principal payments on long-term obligations


(929
)

(1,582
)Excess tax benefits from stock-based awards


53


2,489Net cash provided by financing activities


392,669


32,167Effect of exchange rate changes on cash and cash equivalents


14,127


11,346Net (decrease) increase in cash and cash equivalents


(47,622
)

134,099Cash and cash equivalents at beginning of period


568,417


317,577Cash and cash equivalents at end of period

$
520,795

$
451,676


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

4

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TICKETMASTER AND SUBSIDIARIES        NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION

Spin-Off

On August 20, 2008, IAC/InterActiveCorp ("IAC") distributed (the "spin-off") to its stockholders all of the outstanding shares of
common stock, par value $0.01 per share, of Ticketmaster. Ticketmaster's businesses include the businesses that formerly comprised IAC's Ticketmaster segment, which consists of its domestic and
international ticketing and ticketing related businesses, subsidiaries and investments, excluding its ReserveAmerica subsidiary and its investment in Active.com. Ticketmaster includes IAC's investment
in Front Line Management Group, Inc. ("Front Line"). We refer to our businesses as the "Ticketmaster Businesses."

Basis of Presentation

The historical combined financial statements of Ticketmaster and its subsidiaries reflect the historical financial position, results of
operations and cash flows of the Ticketmaster Businesses since their respective dates of acquisition by IAC, and the allocation to Ticketmaster of certain IAC corporate expenses relating to the
Ticketmaster Businesses based on the historical consolidated financial statements and accounting records of IAC and using the historical results of operations and historical bases of the assets and
liabilities of the Ticketmaster Businesses. However, for the purposes of these financial statements, income taxes have been computed for Ticketmaster on an as if stand-alone, separate tax return
basis. These financial statements are prepared on a combined, rather than a consolidated, basis because they exclude ReserveAmerica and the investment in Active.com that were owned, and include the
investment in Front Line that was not
owned, either directly or indirectly, prior to the spin-off by legal entities that comprise the Ticketmaster Businesses. The ownership of ReserveAmerica and the investment in Active.com were retained
by IAC after the spin-off. These combined financial statements present IAC's and its subsidiaries net investment in the Ticketmaster Businesses as invested equity in lieu of shareholders'
equity. Intercompany transactions and accounts have been eliminated.

In
the opinion of Ticketmaster's management, the assumptions underlying the historical combined financial statements of Ticketmaster are reasonable. However, this financial information
does not necessarily reflect what the historical financial position, results of operations and cash flows of Ticketmaster would have been had Ticketmaster been a stand-alone company during the periods
presented.

The
accompanying unaudited combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with
the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for
complete financial statements. In the opinion of Ticketmaster's management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Interim results are not necessarily indicative of the results that may be expected for a full year. The accompanying unaudited combined financial statements should be read in conjunction with
Ticketmaster's audited combined financial statements and notes thereto for the year ended December 31, 2007.

Company Overview

Ticketmaster is the world's leading live entertainment ticketing and marketing company, providing ticket sales, ticket resale services,
marketing and distribution throughwww.ticketmaster.com, one of the

5

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 1ORGANIZATION AND BASIS OF PRESENTATION (Continued)

largest
e-commerce sites on the internet, approximately 6,700 independent sales outlets and 19 call centers worldwide. Ticketmaster 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 is also a party to joint ventures with third parties to
provide ticket distribution services in Mexico and to supply ticketing services for the 2008 Beijing Olympic Games. Ticketmaster licenses its technology in Mexico, Argentina, Brazil, Chile, China and
Belgium.

NOTE 2SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Ticketmaster's management is required to make certain estimates and assumptions during the preparation of its combined financial
statements in accordance with U.S. generally accepted accounting principles. 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 combined 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 combined 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

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 does not require
new fair value measurements but rather defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. Ticketmaster adopted SFAS 157 on
January 1, 2008 for financial assets and liabilities. Adoption of FAS 157 with respect to financial assets and liabilities did not have a material impact on
Ticketmaster's combined financial position and results of operations. As of June 30, 2008, Ticketmaster's financial assets consisted of cash and marketable securities which are measured at fair
value using quoted prices for identical assets in an active market (Level 1 fair value hierarchy) in accordance with SFAS 157.

In
February 2008, the FASB issued FSP FAS 157-2,Effective date of FASB Statement No. 157(FSP
FAS 157-2), which permits a one-year deferral of the application of SFAS No. 157 for all non-financial assets and non-financial liabilities, except
those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company will adopt SFAS No. 157 for non-financial
assets and non-financial liabilities on January 1, 2009 and does not expect the provisions to have a material effect on its results of operations, financial position or cash flows.

In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Liabilities, including an amendment of FASB Statement No. 115."
SFAS 159 allows companies to elect fair-value measurement when an eligible financial asset or financial liability is initially recognized or when an event, such as a business
combination, triggers a new basis of accounting for that financial

6

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 2SIGNIFICANT ACCOUNTING POLICIES (Continued)

asset
or financial liability. SFAS 159 became effective for Ticketmaster on January 1, 2008, however, Ticketmaster did not elect the fair value measurement provision for any of our
financial assets or liabilities, and as a result the adoption of SFAS 159 had no effect on Ticketmaster's combined financial position or results of operations.

In
December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statementsan amendment of
Accounting Research Bulletin No. 51" ("SFAS No. 160"). SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other
than the parent, the amount of combined net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest and the valuation of retained noncontrolling
equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. SFAS No. 160 will be applied
prospectively, except as it relates to disclosures, for which the effects will be applied retrospectively for all periods presented. Early adoption is not permitted. Ticketmaster is currently
assessing the impact of SFAS No. 160 on its combined financial position, results of operations and cash flows.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS No. 141R"), which replaces FASB Statement No. 141. SFAS No. 141R
establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest
in the acquiree and the goodwill
acquired. The Statement also establishes disclosure requirements that will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141R applies
prospectively to business combinations in fiscal years beginning after December 15, 2008. Early adoption is not permitted. Ticketmaster is currently assessing the impact of the adoption of SFAS
No. 141R on its combined financial position, results of operations and cash flows.

NOTE 3GOODWILL AND INTANGIBLE ASSETS

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

June 30, 2008

December 31, 2007Goodwill

$
1,389,179

$
1,090,418Intangible assets with indefinite lives


62,585


62,560Intangible assets with definite lives, net


162,050


29,765Total goodwill and intangible assets, net

$
1,613,814

$
1,182,743


7

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 3GOODWILL AND INTANGIBLE ASSETS (Continued)

Intangible
assets with indefinite lives relate principally to trade names and trademarks acquired in various acquisitions. At June 30, 2008, intangible assets with definite lives
relate to the following (in thousands):

Cost

Accumulated
Amortization

Net

Weighted Average
Amortization Life
(Years)Purchase agreements

$
166,301

$
(156,386
)
$
9,915


6.0Broker relationships


63,800


(1,772
)

62,028


12.0Customer lists


34,600


(2,503
)

32,097


7.0Technology


32,815


(11,215
)

21,600


3.4Distribution agreements


28,903


(23,245
)

5,658


4.3Other


44,792


(14,040
)

30,752


7.3Total

$
371,211

$
(209,161
)
$
162,050


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

Cost

Accumulated
Amortization

Net

Weighted Average
Amortization Life
(Years)Purchase agreements

$
163,681

$
(145,637
)
$
18,044


6.1Distribution agreements


28,109


(20,567
)

7,542


4.2Technology


8,587


(8,397
)

190


4.0Other


14,752


(10,763
)

3,989


5.2Total

$
215,129

$
(185,364
)
$
29,765


Amortization
of intangible assets with definite lives is computed on a straight-line basis and, based on June 30, 2008 balances, such amortization for the remainder of
2008 and each of the next five years and thereafter is estimated to be as follows (in thousands):

Remaining six months of 2008

$
16,6562009


28,7102010


23,9772011


15,5132012


12,7652013


12,0512014 and thereafter


52,378$
162,050


The
following table presents the balance of goodwill, including changes in the carrying amount of goodwill, for the six months ended June 30, 2008 (in thousands):

Balance As of
January 1, 2008

Additions

(Deductions)

Foreign Exchange
Translation

Balance As of
June 30, 2008$
1,090,418

$
293,760

$
(14
)
$
5,015

$
1,389,179


8

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 3GOODWILL AND INTANGIBLE ASSETS (Continued)

Additions
principally relate to the acquisitions of TicketsNow, Paciolan, and GET ME IN! LTD. The aggregate purchase price for these acquisitions totaled approximately
$425 million. Ticketmaster identified approximately $151.5 million of intangible assets other than goodwill. The goodwill recognized amounted to approximately $289.3 million. The
purchase price allocation for each of these acquisitions is preliminary and subject to adjustment during the allocation period, which is not expected to last beyond a year from the respective date of
purchase, and as such the goodwill may change.

NOTE 4PROPERTY AND EQUIPMENT

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

June 30, 2008

December 31, 2007Computer equipment and capitalized software

$
293,661

$
260,983Leasehold improvements


17,460


14,180Furniture and other equipment


21,168


18,375Projects in progress


12,589


10,249Land


2,471


2,500347,349


306,287Less: accumulated depreciation and amortization


(234,915
)

(211,165
)Total property and equipment, net

$
112,434

$
95,122


NOTE 5SEGMENT INFORMATION

Ticketmaster has one operating segment based upon how the chief operating decision maker and executive management view the business, its organizational structure and the type of service
provided, which primarily is online and offline ticketing services.

Ticketmaster's
primary metric is Operating Income Before Amortization, which is defined as operating income excluding, if applicable: (1) non-cash compensation
expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) pro forma adjustments for significant acquisitions, and (5) one-time
items. Ticketmaster believes this measure is useful to investors because it represents its combined operating results taking into account depreciation, which it believes is an ongoing cost of doing
business, but excluding the effects of any other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not take into account the impact to
Ticketmaster's statement of operations of certain expenses, including non-cash compensation and acquisition-related accounting.

9

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 5SEGMENT INFORMATION (Continued)

The following table reconciles Operating Income Before Amortization to operating income and net income (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007Operating Income Before Amortization

$
58,340

$
55,098

$
118,763

$
125,318Non-cash compensation expense


(6,628
)

(3,063
)

(11,393
)

(4,942
)Amortization of intangibles


(11,535
)

(6,667
)

(20,403
)

(13,520
)Operating income


40,177


45,368


86,967


106,856Interest income


1,430


8,499


3,022


13,877Interest expense


(6,868
)

(133
)

(5,905
)

(399
)Equity in (losses) income of uncombined affiliates


(1,468
)

960


(802
)

1,825Other (expense) income


(287
)

(208
)

657


(125
)Income tax provision


(10,854
)

(19,873
)

(29,675
)

(44,510
)Minority interest in losses of combined subsidiaries


882


191


1,455


205Net income

$
23,012

$
34,804

$
55,719

$
77,729


Non-cash
compensation expense in the table above is included in the following line items in the accompanying combined statements of operations for the three and six months
ended June 30, 2008 and 2007 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007Cost of sales

$
303

$
242

$
538

$
390Selling and marketing expense


330


265


588


428General and administrative expense


5,995


2,556


10,267


4,124Non-cash compensation expense

$
6,628

$
3,063

$
11,393

$
4,942


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

Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007Revenue:United States

$
261,553

$
200,137

$
501,260

$
409,214All other countries


120,816


93,279


230,090


187,779Total

$
382,369

$
293,416

$
731,350

$
596,993


10

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 5SEGMENT INFORMATION (Continued)



June 30, 2008

December 31, 2007Long-lived assets (excluding goodwill and intangible assets):United States

$
81,383

$
63,021All other countries


31,051


32,101Total

$
112,434

$
95,122


NOTE 6EQUITY INVESTMENTS IN UNCOMBINED AFFILIATES

At June 30, 2008 and December 31, 2007, Ticketmaster's equity investments in uncombined affiliates totaled $122.6 million and $145.2 million, respectively,
and are included in "Long-term investments" in the accompanying combined balance sheets. On June 9, 2008 IAC sold a portion of its investment in Front Line to Madison Square
Garden, L.P. at the same per share price that IAC paid to acquire its investment in Front Line.

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

Six Months Ended June 30,2008

2007Net sales

$
112,198

$
67,011Gross profit


54,638


42,239Net income


2,200


5,173


NOTE 7COMPREHENSIVE INCOME

Comprehensive income is comprised of (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007Net income

$
23,012

$
34,804

$
55,719

$
77,729Foreign currency translation


2,326


5,847


14,610


8,459Comprehensive income

$
25,338

$
40,651

$
70,329

$
86,188


Accumulated
other comprehensive income for the three and six months ended June 30, 2008 and June 30, 2007 is solely related to foreign currency translation.

NOTE 8INCOME TAXES

Ticketmaster calculates its interim income tax provision in accordance with Accounting Principles Board Opinion No. 28 and FASB Interpretation No. 18. At the end of each
interim period, Ticketmaster 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

11

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

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 June 30, 2008 is a benefit of $0.4 million due to a change in the estimated annual effective tax rate
from that used in the first quarter.

For
the three and six months ended June 30, 2008, Ticketmaster recorded a tax provision of $10.9 million and $29.7 million, respectively, which represent effective
tax rates of 33% and 35%, respectively. The tax rate for the three months ended June 30, 2008 is lower than the federal statutory rate of 35% due principally to foreign income taxed at lower
rates and tax benefit related to foreign dividends, partially offset by state and local income taxes. The tax rate for the six months ended
June 30, 2008 approximates the federal statutory rate of 35% principally due to state and local income taxes, offset by foreign income taxed at lower rates and foreign tax credits from foreign
dividends.

For
the three and six months ended June 30, 2007, Ticketmaster recorded a tax provision of $19.9 million and $44.5 million, respectively, representing an effective
tax rate of 36%. The tax rate for the three and six months ended June 30, 2007 is higher than the federal statutory rate of 35% due principally to state and local income taxes.

As
of December 31, 2007 and June 30, 2008, Ticketmaster had unrecognized tax benefits of approximately $5.5 million. Included in unrecognized tax benefits at
June 30, 2008 is approximately $4.6 million for tax positions included in IAC's consolidated tax return filings that will remain a liability of IAC after the spin-off.
Ticketmaster recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. Included in income tax expense for the three and six months ended
June 30, 2008 is $0.1 million and $0.2 million, net of related deferred taxes, for interest on unrecognized tax benefits. At June 30, 2008, Ticketmaster has accrued
$1.1 million for the payment of interest. There are no material accruals for penalties.

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

The
IRS is currently examining the IAC consolidated tax returns for the years ended December 31, 2001 through 2003, which includes the operations of Ticketmaster from
January 17, 2003, the date which Ticketmaster joined the IAC consolidated tax return. The statute of limitations for these

12

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 8INCOME TAXES (Continued)

years
has been extended to December 31, 2009. Various IAC consolidated state, local and foreign jurisdictions are currently under examination, the most significant of which are California,
Florida, New York state and New York City, for various tax years after December 31, 2001. These examinations are expected to be completed by late 2008.

Ticketmaster
believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $3.6 million within twelve months of the current reporting
date due to the reversal of deductible temporary differences which will result in a corresponding increase in net deferred tax liabilities. An estimate of other changes in unrecognized tax benefits
cannot be made, but are not expected to be significant.

NOTE 9CONTINGENCIES

In the ordinary course of business, Ticketmaster is a party to various lawsuits. Ticketmaster 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, 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, 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. Ticketmaster also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 8 for
discussion related to income tax contingencies.

NOTE 10RELATED PARTY TRANSACTIONS

Ticketmaster's expenses include allocations from IAC of costs associated with IAC's accounting, treasury, legal, tax, corporate support, human resources and internal audit functions.
These expenses were allocated based on the ratio of Ticketmaster's revenue as a percentage of IAC's total revenue. Allocated costs were $0.8 million and $0.7 million for the three months
ended June 30, 2008 and 2007, respectively, and $1.8 million and $1.5 million for the six months ended June 30, 2008 and 2007, respectively, and are included in "General
and administrative expense" in the accompanying combined statements of operations. It is not practicable to determine the amounts of these expenses that would have been incurred had Ticketmaster
operated as an unaffiliated entity. In the opinion of management, the allocation method is reasonable.

The
portion of interest expense reflected in the combined statements of operations that is intercompany in nature was $6.3 millions and $4.6 million for the three and six
months ended June 30, 2008, respectively. The portion of interest income reflected in the combined statements of operations that is intercompany in nature was $7.6 million and
$12.2 million for the three and six months ended June 30, 2007, respectively. This intercompany interest relates to the receivables from IAC.

13

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TICKETMASTER AND SUBSIDIARIES

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 10RELATED PARTY TRANSACTIONS (Continued)

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

June 30, 2008Receivables from IAC and subsidiaries at December 31, 2007

$
474,110Cash transfers from IAC related to its centrally managed U.S. treasury function


170,905Interest expense


(4,587
)Employee equity instruments and associated tax withholdings


4,053Taxes (excludes tax withholdings associated with employee equity instruments)


(23,601
)Allocation of non-cash compensation expense


(6,800
)Administrative expenses and other


(7,133
)Receivables from IAC and subsidiaries at June 30, 2008

$
606,947


Relationship Between IAC and Ticketmaster after the Spin-Off

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

NOTE 11SUBSEQUENT EVENTS

In connection with the Spin-Off, Ticketmaster distributed approximately $726 million in cash to IAC on August 20, 2008. This distribution was funded in part
through borrowings of $100 million and $350 million of Term Loan A and B loans, respectively , pursuant to the Credit Agreement entered into by Ticketmaster and certain of its
subsidiaries on July 25, 2008 (the "Credit Agreement"). On August 20, 2008, each of Ticketmaster's direct and indirect domestic subsidiaries became a party to the Credit Agreement as a
guarantor of Ticketmaster's obligations and pledged certain of its assets as security for those obligations. Ticketmaster has borrowed $15 million of revolving loans pursuant to the revolving
portion of the Credit Agreement.

The
remainder of the $726 million distribution was funded by the net proceeds from Ticketmaster's private placement of $300 million aggregate principal amount of 10.75%
senior unsecured notes due 2016 (the "Ticketmaster Notes") issued pursuant to an Indenture between Ticketmaster and The Bank of New York Mellon on July 28, 2008 (the "Indenture"). On
August 20, 2008, a subsidiary that was transferred to Ticketmaster in connection with the pre-Spin-Off restructuring became a guarantor of Ticketmaster's obligations
under the Ticketmaster Notes pursuant to a Supplemental Indenture to the Indenture. Interest on the Ticketmaster Notes is payable semi-annually in cash in arrears on August 1 and
February 1 of each year, commencing February 1, 2009.

Also
in connection with the Spin-off, on August 20, 2008 the Ticketmaster Board of Directors and IAC, in its capacity as sole stockholder of Ticketmaster, approved
both the Ticketmaster Deferred Compensation Plan for Non-Employee Directors and the Ticketmaster 2008 Stock and Annual Incentive Plan (the "2008 Incentive Plan"), each of which became
effective on that date. As a result, non-employee members of Ticketmaster's Board of Directors were each awarded 4,621 Ticketmaster restricted stock units under the 2008 Incentive Plan.

14

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Item 2.Management's Discussion and Analysis of the 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, including the realization of anticipated
benefits related to the spin-offs, 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:



15

---





Certain
of these factors and other factors, risks and uncertainties are discussed in the "Risk Factors" section of the Company's Post-Effective Amendment No. 1 to Form S-1
filed with the SEC on August 20, 2008, which is attached as Exhibit 99.2 hereto. 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 the "Risk Factors" section of the Company's Post-Effective Amendment No. 1 to Form S-1
filed with the SEC on August 20, 2008, which is attached as Exhibit 99.2 hereto, in connection with considering any forward-looking statements that may be made by the Company generally.
Except for the ongoing obligations of the Company to disclose material information under the federal securities laws, the Company does not undertake any obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required to do so by law.

Management Overview

On August 20, 2008, IAC/InterActiveCorp ("IAC") distributed (the "spin-off") to its stockholders all of the outstanding shares of
common stock, par value $0.01 per share, of Ticketmaster. Our businesses include the businesses that formerly comprised IAC's Ticketmaster segment, which consists of its domestic and
international ticketing and ticketing related businesses, subsidiaries and investments, excluding its ReserveAmerica subsidiary and its investment in Active.com. Ticketmaster includes IAC's investment
in Front Line Management Group, Inc. ("Front Line"). We refer to our businesses as the "Ticketmaster Businesses."

Results of operations for the three and six months ended June 30, 2008 compared to the three and six months ended June 30, 2007:

Revenue



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Domestic

$
261,553

31%

$
200,137International


120,816

30%


93,279Total revenue

$
382,369

30%

$
293,416


Revenue
in 2008 increased $89.0 million, or 30%, from 2007 driven by increases in both domestic and international revenue as worldwide tickets sold increased 7%, with a 10%
increase in average revenue per ticket. Domestic revenue grew by 31%, primarily due to a 9% increase in average revenue per ticket, a 5% increase in the number of tickets sold and contributions from
The V.I.P. Tour Company ("TicketsNow") and Paciolan, Inc. ("Paciolan"), acquired in February and January 2008, respectively. The increase in average domestic revenue per ticket resulted from
higher convenience and processing fees due, in part, to annual contractual increases. International revenue grew by 30%, or 21% excluding the impact of foreign exchange, primarily due to a 13%
increase in average revenue per

16

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ticket
along with a 9% increase in the number of tickets sold. Both the increases in the average revenue per ticket and the number of tickets sold primarily resulted from increased revenue from
Canada, China (Emma Entertainment acquired in August 2007) and Australia. Acquisitions contributed approximately $45.0 million to Ticketmaster's overall revenue growth in 2008.

Ticketmaster's
largest client, Live Nation, Inc. ("Live Nation") (including its subsidiary House of Blues), represented approximately 18% and 23% of its combined revenue for the
three months ended June 30, 2008 and 2007, respectively. Ticketmaster anticipates that none of the Live Nation agreements will be renewed upon their expiration, which range from
December 31, 2008 through March 1, 2010.



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Domestic

$
501,260

22%

$
409,214International


230,090

23%


187,779Total revenue

$
731,350

23%

$
596,993


Revenue
in 2008 increased $134.4 million, or 23%, from 2007 driven by increases in both domestic and international revenue as worldwide tickets sold increased 5%, with an 8%
increase in average revenue per ticket. Domestic revenue grew by 22%, primarily due to contributions from TicketsNow and Paciolan, acquired in February and January 2008, respectively, as well as an 8%
increase in average revenue per ticket and a 3% increase in the number of tickets sold. The increase in average domestic revenue per ticket resulted from higher convenience and processing fees as
noted above in the three month discussion. International revenue grew by 23%, or 13% excluding the impact of foreign exchange, primarily due to an 11% increase in average revenue per ticket along with
a 7% increase in the number of tickets sold. Both the increases in the average revenue per ticket and the number of tickets sold primarily resulted from increased revenue from Canada, China (Emma
Entertainment acquired in August 2007) and Australia. Acquisitions contributed approximately $61.9 million to Ticketmaster's overall revenue growth in 2008.

Live
Nation (including its subsidiary House of Blues) represented approximately 17% and 20% of Ticketmaster's combined revenue for the six months ended June 30, 2008 and 2007,
respectively.

Cost of sales



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Cost of sales

$
248,549


35%

$
183,860As a percentage of total revenue


65%


234 bp


63%Gross margin


35%


(234) bp


37%


---

bp = basis
points

Cost
of sales consists primarily of ticketing royalties, credit card processing fees and compensation and other employee-related costs (including stock-based compensation) for personnel
engaged in call center functions. Ticketing royalties relate to Ticketmaster's clients' share of convenience and order processing charges.

17

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Cost
of sales in 2008 increased $64.7 million from 2007, primarily due to increases of $20.5 million in ticketing royalties, $13.9 million in compensation and other
employee-related costs and $6.8 million in credit card processing fees which resulted from an increase in ticket volume processed. Included in these increases is the impact of acquisitions not
in the year ago period, which contributed $1.7 million, $7.3 million and $1.9 million to ticketing royalties, compensation and other employee-related costs and credit card
processing fees, respectively. Excluding the impact of acquisitions not in the year ago period, cost of sales increased $36.4 million, or 20%. The increase in ticketing royalties is due to
increased revenue and higher royalty rates which are driven, in part, by higher contractual royalty rates included in the renewal of contracts with various clients, and are usually based on a
percentage of convenience and order processing revenue. Domestic and international ticketing royalties will continue to increase as a percentage of convenience and processing revenue.



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Cost of sales

$
469,571


27%

$
368,644As a percentage of total revenue


64%


246 bp


62%Gross margin


36%


(246) bp


38%


Cost
of sales in 2008 increased $100.9 million from 2007, primarily due to increases of $33.2 million in ticketing royalties resulting from higher revenue and higher
royalty rates, $25.2 million in compensation and other employee-related costs associated, in part, with a 22% increase in headcount (or 4% excluding recent acquisitions) and $8.3 million
in credit card processing fees. Included in these increases is the impact of acquisitions not in the year ago period, which contributed $2.4 million, $13.2 million and
$2.6 million to ticketing royalties, compensation and other employee-related costs and credit card processing fees, respectively. Excluding the impact of acquisitions not in the year ago
period, cost of sales increased $61.3 million, or 17%.

Selling and marketing expense



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Selling and marketing expense

$
24,636


202%

$
8,158As a percentage of total revenue


6%


366 bp


3%


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

Selling
and marketing expense in 2008 increased $16.5 million from 2007, primarily due to increased advertising and promotional expenditures of $11.1 million and increased
compensation and other employee-related costs of $3.0 million. Included in these increases is the impact of acquisitions not in the year ago period, which contributed $7.0 million and
$1.8 million to advertising and promotional expenditures and compensation and other employee-related costs, respectively. Excluding the impact of acquisitions not in the year ago period,
selling and marketing expense increased $5.5 million, or 68%. The increase in advertising and promotional expenditures is due in part to costs

18

---



associated
with its agreements with resale partners which are intended to promote Ticketmaster's ticket exchange offering.



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Selling and marketing expense

$
44,029


189%

$
15,231As a percentage of total revenue


6%


347 bp


3%


Selling
and marketing expense in 2008 increased $28.8 million from 2007, primarily due to increased advertising and promotional expenditures of $19.3 million and increased
compensation and other employee-related costs of $5.4 million as Ticketmaster continued to build out its worldwide infrastructure. Included in these increases is the impact of acquisitions not
in the year ago period, which contributed $9.2 million and $2.9 million to advertising and promotional expenditures and compensation and other employee-related costs, respectively.
Excluding the impact of acquisitions not in the year ago period, selling and marketing expense increased $13.3 million, or 87%. The increase in advertising and promotional expenditures is due,
in part, to an increase in marketing efforts including online and resale ticket services such as ticket exchange.

General and administrative expense



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)General and administrative expense

$
45,644


14%

$
39,892As a percentage of total revenue


12%


(166) bp


14%


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

General
and administrative expense in 2008 increased $5.8 million from 2007, primarily due to increases of $5.8 million in compensation and other employee-related costs,
$2.4 million in professional fees, $1.4 million in rent and utilities and $0.9 million in bad debt expense, partially offset by a reduction of $7.0 million in certain
litigation reserves. The increase in compensation and other employee-related costs is primarily due to an increase of $4.6 million associated with recent acquisitions not in the year ago
period. Excluding the impact of acquisitions not in the year ago period, general and administrative expense decreased $1.3 million, or 4%. Ticketmaster expects to incur increased costs related
to the additional financial and legal requirements associated with being a separate public company, as well as increased non-cash compensation associated with the modification of existing
stock-based compensation awards in connection with the spin-off and the grant of new awards in connection with and subsequent to the spin-off.

General
and administrative expense includes non-cash compensation expense of $6.0 million in 2008 compared with $2.6 million in 2007. The increase in
non-cash compensation expense is primarily due to equity grants issued and assumed in recent acquisitions as well as equity grants issued to Ticketmaster employees subsequent to the second
quarter of 2007. As of June 30, 2008, there was approximately $44.7 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is
currently expected to be recognized over a weighted average period of

19

---



approximately
2.6 years (exclusive of the impact of the modification related to the spin-off, which primarily consists of the accelerated vesting of certain restricted stock units).



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)General and administrative expense

$
87,497


18%

$
74,150As a percentage of total revenue


12%


(46) bp


12%


General
and administrative expense in 2008 increased $13.3 million from 2007, primarily due to increases of $10.1 million in compensation and other employee-related costs.
The increase in compensation and other employee-related costs is primarily due to an increase of $7.4 million associated with recent acquisitions not in the year ago period. Excluding the
impact of acquisitions not in the year ago period, general and administrative expense increased $2.2 million, or 3%.

General
and administrative expense includes non-cash compensation expense of $10.3 million in 2008 compared with $4.1 million in 2007. The increase in
non-cash compensation expense is primarily due to factors described above in the three month discussion.

Depreciation



Three Months Ended June 30,

Six Months Ended June 30,2008

% Change

2007

2008

% Change

2007(Dollars in thousands)Depreciation

$
11,828


25%

$
9,471

$
22,883


23%

$
18,592As a percentage of total revenue


3%


(13) bp


3%


3%


1 bp


3%


Depreciation
for the three and six months ended June 30, 2008 increased $2.4 million and $4.3 million, respectively, primarily due to various acquisitions not in the
year ago period and the incremental depreciation associated with capital expenditures made during 2007 and 2008, partially offset by certain fixed assets becoming fully depreciated during the period.
Excluding the impact of acquisitions not in the year ago period, depreciation expense for the three and six months increased $0.3 million and $0.8 million, or 3% and 4%, respectively.

Operating Income Before Amortization

Operating Income Before Amortization is a non-GAAP measure and is defined in "Ticketmaster's Principles of Financial
Reporting".



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Operating Income Before Amortization

$
58,340


6%

$
55,098As a percentage of total revenue


15%


(352) bp


19%


Operating
Income Before Amortization in 2008 increased $3.2 million from 2007, primarily due to an increase in revenue, partially offset by higher administrative and technology
costs associated with acquisitions and the continued build out of worldwide infrastructure, increased costs associated with its agreements with resale partners, increased losses associated with
strategic investments, particularly in Germany and China and higher royalty rates. Excluding the impact of acquisitions not in the year ago period, Operating Income Before Amortization increased
$4.1 million, or 7%.

20

---







Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Operating Income Before Amortization

$
118,763

(5)%

$
125,318As a percentage of total revenue


16%

(475) bp


21%


Operating
Income Before Amortization in 2008 decreased $6.6 million from 2007, primarily due to increases in cost of sales, selling and marketing expense and general and
administrative expense. The increase in these expenses was driven by acquisitions and increased losses associated with strategic investments, particularly in Germany and China and higher overall
royalty rates. Excluding the impact of acquisitions not in the year ago period, Operating Income Before Amortization decreased $2.8 million, or 2%.

Operating income



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Operating income

$
40,177

(11)%

$
45,368As a percentage of total revenue


11%

(495) bp


15%


Operating
income in 2008 decreased $5.2 million from 2007, despite the increase in Operating Income Before Amortization described above, primarily due to increases of
$4.9 million in amortization of intangibles and $3.6 million in non-cash compensation expense. Excluding the impact of acquisitions not in the year ago period, operating
income increased $4.3 million, or 10%.



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Operating income

$
86,967

(19)%

$
106,856As a percentage of total revenue


12%

(601) bp


18%


Operating
income in 2008 decreased $19.9 million from 2007, primarily due to the decrease in Operating Income Before Amortization described above and increases of
$6.9 million in amortization of intangibles and $6.5 million in non-cash compensation expense. Excluding the impact of acquisitions not in the year ago period, operating
income decreased $3.2 million, or 3%.

During
the second quarter of 2008, Ticketmaster began a comprehensive review of its worldwide cost structure in light of significant investments that have been made through increased
operating and capital expenditures, acquisitions in recent periods, and in advance of the termination of the Live Nation agreement in 2009. As a result of this review, Ticketmaster currently intends
to take the following actions, among others, which it currently expects will reduce its operating expenditures by an estimated $35 million on an annualized basis: (i) integration of
Paciolan and TicketsNow, which were acquired in January and February 2008, respectively, (ii) the rationalization of certain ticketing platforms, products and services, (iii) certain
operating cost reductions, including, among others, reductions in personnel, payment processing and discretionary costs, (iv) the consolidation of customer contact centers and (v) the
review of global marketing and sponsorship costs for efficiency. Ticketmaster currently expects that achieving these actions will require some up-front costs, principally

21

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severance
costs and lease termination costs as well as the accelerated amortization of capitalized software and leasehold improvements, which costs are currently expected to be $4 to $6 million
in total. Ticketmaster expects that these up-front costs will principally impact its 2008 results, starting in the third quarter, but the aggregate cash costs of these actions are not
expected to materially impact Ticketmaster's overall financial position or liquidity.

Other income (expense)



Three Months Ended June 30,2008

% Change

2007(Dollars in thousands)Other income (expense):Interest income

$
1,430


(83)%

$
8,499Interest expense


(6,868
)

5,064%


(133
)Equity in (losses) income of uncombined affiliates


(1,468
)

NM


960Other expense


(287
)

39%


(208
)


During
the second quarter of 2008, IAC recorded a cumulative true-up of intercompany interest income. The amount of the related adjustment was $8.3 million.
Accordingly, there is intercompany interest income of $7.6 million in 2007 and intercompany interest expense of $6.3 million in 2008. This is the primary driver of the quarter over
quarter variance in interest income and interest expense.

Equity
in (losses) income of uncombined affiliates in 2008 decreased $2.4 million due to losses of $1.5 million, primarily due to Ticketmaster investment in Front Line.



Six Months Ended June 30,2008

% Change

2007(Dollars in thousands)Other income (expense):Interest income

$
3,022


(78)%

$
13,877Interest expense


(5,905
)

1,380%


(399
)Equity in (losses) income of uncombined affiliates


(802
)

NM


1,825Other income (expense)


657


NM


(125
)


As
described above in the three month discussion during the second quarter of 2008, there is an $8.3 million adjustment related to a cumulative true-up of intercompany
interest income. Accordingly, there is intercompany interest income of $12.2 million in 2007 and intercompany interest expense of $4.6 million in 2008. This is the primary driver of the
year over year variance in interest income and interest expense.

Income tax provision



For the three months ended June 30, 2008 and 2007, Ticketmaster recorded tax provisions of $10.9 million and
$19.9 million, respectively, which represent effective tax rates of 33% and 36%, respectively. The 2008 tax rate is lower than the federal statutory rate of 35% due principally to foreign
income taxed at lower rates and foreign tax credits from foreign dividends, partially offset by state and local income taxes. The 2007 tax rate is higher than the federal statutory rate of 35%
principally due to state and local income taxes.

22

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For the six months ended June 30, 2008 and 2007, Ticketmaster recorded tax provisions of $29.7 million and
$44.5 million, respectively, which represent effective tax rates of 35% and 36%, respectively. The 2008 tax rate approximates the federal statutory rate of 35% due principally to state and
local income taxes, offset by foreign income taxed at lower rates and foreign tax credits from foreign dividends. The 2007 tax rate is higher than the federal statutory rate of 35% principally due to
state and local income taxes.

As
of December 31, 2007 and June 30, 2008, Ticketmaster had unrecognized tax benefits of approximately $5.5 million. Included in unrecognized tax benefits at
June 30, 2008 is approximately $4.6 million for tax positions included in IAC's consolidated tax return filings that remained a liability of IAC after the spin-off.
Ticketmaster recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. Included in income tax expense for the three and six months ended
June 30, 2008 is $0.1 million and $0.2 million, net of related deferred taxes,
for interest on unrecognized tax benefits. At June 30, 2008, Ticketmaster has accrued $1.1 million for the payment of interest. There are no material accruals for penalties.

By
virtue of previously filed separate company and consolidated tax returns with IAC, Ticketmaster is routinely under audit by federal, state, local and foreign authorities in the area
of income tax. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered
sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between
the reserves for tax contingencies and the amounts owed by Ticketmaster are recorded in the period they become known. Ticketmaster believes that it is reasonably possible that its unrecognized tax
benefits could decrease by approximately $3.6 million within twelve months of the current reporting date due to the reversal of deductible temporary differences which will result in a
corresponding increase in net deferred tax liabilities. An estimate of other changes in unrecognized tax benefits cannot be made, but are not expected to be significant.

Under
the terms of the tax sharing agreement, which will be executed in connection with the spin-off, IAC will generally retain the liability related to federal and state
returns filed on a consolidated or unitary basis for all periods prior to the spin-off.

23

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LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2008, Ticketmaster had $524.9 million of cash and cash equivalents, restricted cash and cash equivalents
and marketable securities, including $365.3 million in funds representing amounts equal to the face value of tickets sold on behalf of its clients. Ticketmaster's cash and cash equivalents and
restricted cash and cash equivalents held in foreign jurisdictions is approximately $354.0 million at June 30, 2008, including $230.9 million in funds representing amounts equal
to the face value of tickets sold on behalf of its clients, and is maintained principally in Canada, the United Kingdom and Australia.

Net
cash provided by operating activities was $108.7 million and $126.0 million in 2008 and 2007, respectively. The decrease of $17.3 million in net cash provided by
operating activities reflects an increase in the payments of accounts payable and other current liabilities and increased prepaid
expenses and other current assets, partially offset by an increased contribution from client funds of $10.2 million which is primarily due to the timing of settlements with clients.

Net
cash used in investing activities in 2008 of $563.1 million primarily resulted from acquisitions, net of cash acquired, of $393.5 million, cash transfers to IAC of
$141.9 million and capital expenditures of $23.2 million. The cash transfers to IAC relate to IAC's centrally managed U.S. treasury function. Acquisitions, net of cash acquired, in 2008
primarily relate to the acquisitions of TicketsNow, Paciolan and GET ME IN! Ltd. Net cash used in investing activities in 2007 of $35.4 million primarily resulted from acquisitions, net
of cash acquired, of $31.3 million and capital expenditures of $21.4 million, partially offset by cash transfers from IAC of $17.3 million.

Net
cash provided by financing activities in 2008 and 2007 of $392.7 million and $32.2 million, respectively, were primarily due to capital contributions of
$393.5 million and $31.3 million from IAC to fund Ticketmaster's 2008 and 2007 acquisitions, respectively.

In
connection with the spin-off, Ticketmaster raised $750 million through a combination of privately issued debt securities (the "Notes") and secured credit facilities
(the "Term Loans"). In addition, Ticketmaster negotiated a $200 million revolving credit facility (the "RCF"). The total costs incurred in connection with the issuance of the Notes and
borrowings under the Term Loans and establishing the RCF are estimated to be $26.0 million. The net proceeds are approximately $724.0 million. In connection with the separation,
Ticketmaster distributed the net proceeds of the financing to IAC and retained its client cash and its international cash which total approximately $488.4 million as of June 30, 2008.
Upon completion of the spin-off, intercompany receivable balances were extinguished.

Ticketmaster
anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its operations. Ticketmaster's ability to fund its
cash and capital needs will be affected by its ongoing ability to generate cash from operations, the overall capacity and terms of its financing arrangements as discussed above, and access to the
capital markets. Ticketmaster believes that its cash on hand along with its anticipated operating cash flow in 2008 and its access to capital markets are sufficient to fund its operating needs,
capital, investing and other commitments and contingencies for the foreseeable future.

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CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Payments Due by PeriodContractual Obligations

Total

Less Than 1 Year

1-3 Years

3-5 Years

More Than 5 Years(In thousands)Capital lease obligations

$
3,910

$
2,269

$
1,641

$


$
Purchase obligations(a)


84,634


31,781


39,407


11,271


2,175Operating leases


93,688


20,077


32,509


19,852


21,250Total contractual cash obligations

$
182,232

$
54,127

$
73,557

$
31,123

$
23,425


---

Seasonality

Ticketmaster's ticket sales are impacted by fluctuations in the availability of events for sale to the public, which may vary depending
upon scheduling by its clients. Generally, the second and fourth quarters of the year experience the highest revenue.

Recent Accounting Pronouncements

Refer to Note 2 to the combined financial statements for a description of recent accounting pronouncements.

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TICKETMASTER'S PRINCIPLES OF FINANCIAL REPORTING

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

Definition of Ticketmaster's Non-GAAP Measure

Operating Income Before Amortizationis defined as operating income excluding, if applicable: (1) non-cash compensation
expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) pro forma adjustments for significant acquisitions, and (5) one-time
items. Ticketmaster believes this measure is useful to investors because it represents the operating results from the Ticketmaster Businesses, taking into account depreciation, which Ticketmaster
believes is an ongoing cost of doing business, but excluding the effects of any other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not
take into account the impact to Ticketmaster's statement of operations of certain expenses, including non-cash compensation, and acquisition-related accounting.
Ticketmaster endeavors to compensate for the limitations of the non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions
of the reconciling items, including quantifying such items, to derive the non-GAAP measure.

Pro Forma Results

Ticketmaster will only present Operating Income Before Amortization on a pro forma basis if it views a particular transaction as
significant in size or transformational in nature. For the periods presented in this report, there are no transactions that Ticketmaster has included on a pro forma basis.

One-Time Items

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

Non-Cash Expenses That Are Excluded From Ticketmaster's Non-GAAP Measure

Non-cash compensationexpense 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 will include the related shares in its future calculations of fully
diluted shares outstanding. Upon vesting of restricted stock and restricted stock units and the exercise of certain stock options, the awards will be settled, at Ticketmaster's discretion, on a net
basis, with Ticketmaster remitting the required tax withholding amount from its current funds.

Amortization of intangiblesis 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 will have significant
intangible amortization expense as it continues to acquire companies, Ticketmaster 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 OPERATING INCOME BEFORE AMORTIZATION

For a reconciliation of Operating Income Before Amortization to net income for the three and six months ended June 30, 2008 and
2007, see Note 5 to the combined financial statements.

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Item 3.Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

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

As
currency exchange rates change, translation of the income statements of Ticketmaster's international businesses into U.S. dollars affects year-over-year
comparability of operating results. Historically, Ticketmaster has not hedged translation risks because cash flows from international operations have been generally reinvested locally. Foreign
exchange net losses for the three months ended June 30, 2008 and 2007 were $0.3 million and $0.2 million, respectively. For the six months ended June 30, 2008 foreign
exchange net gains were $0.7 million compared with foreign exchange net losses of $0.1 million for the six months ended June 30, 2007.

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

Item 4T.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 Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission'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 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.

28

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PART II.    OTHER INFORMATION

Item 1.Legal Proceedings

Please see the discussion of legal proceedings in the Company's Post-Effective Amendment No. 1 to
Form S-1 filed with the SEC on August 20, 2008, which is incorporated herein by reference and attached as Exhibit 99.1 hereto.

Item 1A.Risk Factors

Please see the discussion of risk factors in the Company's Post-Effective Amendment No. 1 to
Form S-1 filed with the SEC on
August 20, 2008, which is incorporated herein by reference and attached as Exhibit 99.2 hereto.

Item 6.Exhibits

The following documents are filed as Exhibits to the Report:

Exhibit Numbers

Description31.1

Certification of the Company's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification of the Company's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232

Certification of the Company's Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200299.1

"Legal Proceedings" as set forth in the Company's Post-Effective Amendment No. 1 to Form S-1 filed with the SEC on August 20, 200899.2

"Risk Factors" as set forth in the Company's Post-Effective Amendment No. 1 to Form S-1 filed with the SEC on August 20, 2008


29

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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.

TICKETMASTERDate: September 22, 2008

By:

/s/BRIAN REGANBrian Regan Executive Vice President and Chief Financial Officer


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