Live Nation Entertainment (LYV) Q4 2007 earnings summary

Executive summary

• 2007 strategy focused on growing the global concert platform, expanding artist services and preparing an in-house ticketing and online business for launch in 2009.

• Events reached 64.3M attendees, including 45M+ live music fans; North American Music attendance rose 13% YoY to 28.0M.

• The U2 partnership was agreed in principle for 12 years; a separate 10-year relationship with Madonna covers touring and broader music-related rights.

Financial highlights

• FY2007 revenue was $4.185B, up 13% YoY; operating income was $82.1M versus $33.1M in 2006.

• Net loss narrowed to $11.9M from $31.4M; diluted EPS was -$0.17 versus -$0.48.

• Operating cash flow was $49.8M; investing used $141.1M and financing provided $110.2M. Cash ended the year at $339.0M.

• 2007 revenue growth included $116.7M from foreign-exchange movements and reflected acquisitions; gain on asset sales reduced reported expenses.

Outlook and guidance

• In-house ticket sales are planned to begin for 2009 events under a long-term CTS Eventim platform agreement; ticketing is expected to improve customer data access and distribution.

• Management expected operating cash flow, credit-facility borrowings and other financing alternatives to cover working capital, capital expenditure and debt service for at least the succeeding year.

• Revenue-generating capital spending increased in 2007, with venue development and renovations continuing; annual capital expenditures are capped at $110M under the credit covenant.