Welcome everyone to the Live Nation second quarter 2009 earnings conference call. (Operator Instructions) Before we begin, Live Nation has asked me to remind you that this afternoon's call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to Live Nation's SEC filings for a description of risks and uncertainties that impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with SEC Regulation G, Live Nation has provided a full reconciliation for the most comparable GAAP measure in their earnings release on their website. The release, reconciliations and other financial or statistical information to be discussed on this call can be found on www.livenation.com/investors. It is now my pleasure to turn the call over to Mr. Michael Rapino, Chief Executive Officer. Sir you may begin your conference.

Thank you. Good afternoon everyone and welcome to our 2009 second quarter conference call. I am joined today by our CFO, Kathy Willard. Our second quarter results were largely in line with our internal expectations and despite the global economic downturn we are executing on strategy and remain on track to achieve our primary goals; generate growth from our core business and increase our adjusted operating income for the year. We have entered into the third quarter, the most important period of the year representing 40% of our annual contribution margin. In comparison, Q1 and Q2 combined equal 40%. We are heading into Q3 with considerable momentum. Our deferred revenue from tickets sold to date for upcoming summer events and our in venue spending highlights the underlying strengths of our business going into our peak concert season. We are putting fans in seats and we are monetizing our platform. As we discussed in our last call, we plan to generate growth in 2009 through three primary labors. First, we will grow international adjusted operating income through our 2008 investment in O2 Dublin, increased sponsorship and a strong stadium line up. Second, we will increase per head spend on site in our North American amphitheaters with simplified menu selection, increased point of sale, focus on hawking and increasing attendance. Third, we will drive attendance in North America through aggressive fan focused promotions. We also look to decrease show count in North America as we approach the tough economic times with a more disciplined risk/reward buying strategy. We are offsetting these increases by a slight decrease in sponsorship and a reduction in North American ticket sales. Given current trends and visibility into the third quarter we continue to believe that we will grow our adjusted operating income for the fourth straight year.…

Thank you Michael. Good afternoon and thank you everyone for joining us. During the second quarter consolidated revenue was $1.1 billion which was down $66.7 million compared to revenue in the same period last year primarily due to a decline of $86.3 million from foreign exchange movements, mostly in international music. On a constant currency basis revenue would have been up 1.7% over the second quarter of last year. Positive revenue impacts included an increase of $26.8 million related to acquisitions in North American music and International music and $12.9 million in ticketing due to higher revenue from service charges due to the launch of our ticketing platform. Adjusted operating income was $51.2 million during the second quarter of 2009 compared with $63.2 million during the second quarter of 2008. This decrease was due to a decline of $7.6 million from foreign exchange movement and a $19.8 million decrease in North American music driven by a reduction in the overall number of events. We also had positive changes in adjust operating income including a $6.3 million increase in International music driven by strong promotions and festival results along with the re-opening of the O2 Dublin along with $4.5 million in ticketing due to higher net revenue from ticket service charges. Our operating loss in the second quarter was $3.4 million compared to operating income of $27.8 million in the second quarter of 2008. Our operating loss was impacted by $14.9 million of acquisition transaction expenses related to our pending merger with Ticketmaster due to a change in the accounting rules related to business combinations. In addition, our operating income decline was driven by $3.9 million of increased depreciation and amortization expenses related to several of our capital investments from last year along with the overall decrease in adjusted operating income.…

(Operator Instructions) The first question comes from the line of Ben Mogil – Thomas Weisel Partners. Ben Mogil – Thomas Weisel Partners: In terms of sponsorship I know in the past you have talked about you did 172 last year and understandably would likely be down because of the environment this year and you were looking for 150 as kind of a rough target for the year. You sort of sit here at the beginning of August, is that target still achievable as far as you can tell?

As we said, we are mildly surprised we are flat year-over-year. We have a 12-month business in sponsorship which people kind of think it is a summer sponsorship business but most of our deals are ongoing. As we are sitting here now I think we will end up slightly below last year. We have some risk and some remaining big deals to close. We think we will get close to it. Right now in context going into the year we are not going to be in the 10%, 20% or 30% decline like most of the advertising businesses. I think we will be flat to 5% down. Ben Mogil – Thomas Weisel Partners: Flat from the 170 number last year?

No. There is two sponsorship numbers. There is $100 million and then there is premium seats which we calculate to get to that full 170. My premium seats are over and done with this year because they are the summer activity. The remaining number we think about as pure sponsorship is $108 million from last year. If you take the premium seats. We are tracking flat to that right now on forecast but we have to close some deals to deliver that. I would say if you were using the number, I originally said for the year we may be $20 million down. I think we are looking better than that and will probably end up $10 million down. Ben Mogil – Thomas Weisel Partners: How did the premium, I am guessing the premium seats for the year are largely sold. How did they fare this coming in this economy?

Again, we assume they might have been a bigger risk than they were. We would end up, again we are going to end up flat by the time we are down maybe $3-4 million down from last year. Nothing substantial. If you look at our sponsorship there is kind of an international business. Simon Lewis runs that and we are going to grow that business this year substantially. They are just having great success internationally. Mostly because it was a fairly under developed market and they have been able to get the low hanging fruit. We have national sponsors, local sponsors and premium seats. Our premium seats…basically if you look at all three of those they are all relatively flat to maybe $3 million down each. So we didn’t have any disasters on a national deal basis, a local deal basis or a premium seat. We just got clipped, we probably will end up getting clipped $3 million each and end up $10 million down if you add up those three. Ben Mogil – Thomas Weisel Partners: In terms of the Wednesday sales you were running, if you look at lawn ticket sales overall, how did they fare just looking at that as sort of being the more price sensitive kind of customers? From the overall summer perspective, what do you see now through Labor Day if you will? Any thoughts on how that market fared this summer?

Surprisingly we looked at data a hundred different ways. If you look at Pollstar's 100 Tours, if you look at the top tours versus the mid shows we haven’t found any trend yet whether it is regular priced or not where the sales were considerably down whether they are A shows, B, C, lawn seats or reserved. Generally they were flat. We knew going in this year we were going to take probably 100 less shows in our amphitheater because we said in the last quarter those extra 100 shows you chase could be winners or they could be the losers so we really wanted to go in safe this year in North America. So to deliver the attendance we are going to deliver in amphitheaters we are going to exceed last year’s attendance if you look at per show attendee. We have sold 600,000 tickets in those service fee Wednesdays. A wild success but it is only 5% of our overall business. You couldn’t make or break the difference if your core 95% was trending down. So overall we are kind of seeing business flat and we knew doing something spectacular around promotions might gain us another 600,000-800,000 incremental tickets through the year. It would just be some icing on the cake on our amphitheater season. One of our biggest challenges would be cannibalization rates. Would they buy on Wednesday but not buy at the end? We have seen exceptionally low cannibalization rates on these Wednesday shows which has been really encouraging. Ben Mogil – Thomas Weisel Partners: I was wanting to make sure I heard you right, your deferred revenue number included if you were looking at it on a year-over-year basis included $13.5 million of service charge. Is that correct?

That is right. From the ticketing operation that we wouldn’t have had last year. Not our total but what would have been new. Ben Mogil – Thomas Weisel Partners: If I look at it from that perspective you are up about 12% on deferred revenue year-over-year apples-to-apples. Is that about what you are getting?

That is right. Ben Mogil – Thomas Weisel Partners: Did currency have an impact positive or negative?

Not significant. This is really you are just seeing the timing of the Q3 shows and the way the ticket sales have gone. We are up from 83% sales versus 77% last year.

There was no mystery in how we planned the year. We purposely knew Q2 would be slightly down from last year because it wasn’t hard to figure out when Madonna and U2 were starting a stadium tour on July 1 worldwide your Q3 revenue is going to be big. You don’t have to go for the kill in Q2 when you know you have that size of revenue coming in on July 1 in Q3. That is what is driving that business in terms of the top part. Ben Mogil – Thomas Weisel Partners: I think you have talked about that before on calls you had to look at Q2 and Q3 and deferred revenue because that kind of encapsulates the summer season if you will. Can you give us an update if you look at the LTM EBITDA from a bank perspective and sum up the 150 in cash you were allotted to [sub out] what number are you at from a covenants perspective?

I won’t give you an exact number. You can do the top level math. We are definitely very comfortable with where we are not only in Q2 but for the rest of the year. Ben Mogil – Thomas Weisel Partners: Do all sort of the one-time charges from Ticketmaster from the proposed merger get factored into calculations or not?

No, we add those back so they are not an impact to debt covenants.

The next question comes from the line of David Kestenbaum – Morgan Joseph. David Kestenbaum – Morgan Joseph: Can you elaborate on who you think you capitalize in 2010 on the 360 deals with ? The artists in particular?

Several of them. The one that is different is Shakira will be out on tour for the first time. U2 will be continuing their tour. Those are the two biggest ones.

And Jay-Z will have a record out. David Kestenbaum – Morgan Joseph: Given the tough economic times have artist expectations changed at all? Are you able to negotiate maybe more favorable terms with them? Then exactly how do the economics work when you cut the price in half since that is the artists’ bread and butter? Are they willing to take a pay cut on that? Do you have to compromise or something else? How does that work exactly?

On the first question, unfortunately the answer is no. You can see our talent costs. The good news is the last couple of years our talent cost to revenue has remained fairly flat. There hasn't been any increase. When you are an artist that can demand ticket sales you are going out expecting to get paid what you have always gotten paid. So we have not had any success in artists reducing their cost structure given the economic times. David Kestenbaum – Morgan Joseph: But if you are running less shows and I assume some of your competitors are running less shows, wouldn’t that law of supply and demand help you a little bit in the equation? Maybe with the weaker artists?

With the weaker, yes. We hope that this year and onward the artists, agents, managers and everyone starts to realize it is not healthy for the industry for the ticket prices to increase. We know that ticket prices are a main issue on consumers coming to shows. We know in order to sell those 40% of unsold tickets we as an industry have to be smarter on our pricing. Some managers and some artists are more proactive and understand it and think through it. Some don’t. Overall, the overall economics of the percentage of guarantee versus revenue hasn’t shifted. We would hope that over time all promoters and others figure a way to bring the prices down. As far as the promotion, it is a combination. A lot of what we did was the no service fee. So we took that service fee and took it right off our bottom line. That didn’t affect the band because they still got the face value of the ticket. Now again, why would we do that? If we can give away a $5 service fee in contribution margin but get one incremental person through our amphitheater that spends $15 on ancillary it is a good trade off for us. So going back to the first part it is all about if it was incremental and what your cannibalization rate was. In this case we put 600,000 people through the door. We have not done our assessment and analysis complete for the year but we are talking somewhere around a 30% cannibalization rate and 70% incremental ticket rate. The math works for us. Whether the artist participates or not at what point can you drive new customers in to buy on site? In some cases the four-packs, six-packs and two-for-one’s artists do participate. If the show has been on sale for a month and the artist and promoter know you are only going to sell another 2,000 seats but if you could put 4,000 in lets all take a slight reduction on the gross. Most bands are very proactive in understanding more people in will mean some level of price promotion especially this year. So they have participated in that end. David Kestenbaum – Morgan Joseph: Can you talk about how you are doing on the ticketing initiative? I know you gave detailed numbers at your analyst day a few years ago. Are you going to hit those numbers for 2009 and for 2010?

The 2008 numbers weren’t quite big of a loss as we expected them to be. 2009 is not quite the same. So a little bit of a loss, about a $30 million movement when we did the original back in January of 2008. It is probably closer to $20-25 million, closer to $25 million mark this year as far as swing. 2010 is really going to depend on North American ticket sales. So I don’t really have better data for you on that right now.

The biggest challenge from day one would it work. Would we sell tickets. Could we handle the load. Could we get our summer season up without any issues. Remember back in October the world was debating would it work. So one of the most important piece that is accomplishment for us, our biggest strategic priority of the year was could we sell 10 million plus tickets on a platform without any consumer issues. We are at 9.1. We haven’t had an issue since early January with Phish. Nathan Hubbard and the team have done a great job of seamlessly selling lots of concert tickets. You can imagine these Wednesdays have been a heck of an experiment on our load and we have handled those Wednesday on sales perfectly. Executionally we have been delivering. As far as the revenue generated we haven’t had to over staff any more than planned or fix or lower than we had planned overall. We are running at basically the amount of people we need. The fixed cost structure is about the same as we had expected. We are charging the same service fee to the fan as expected. Net/net our efficiency is running it and also monetizing it is 90% on plan you could say.

Remember ticketing recognizes their revenue just the same as North American music does. It is when the events happen so most of that will also be in Q3.

The next question comes from the line of Mark Wienkes – Goldman Sachs Mark Wienkes – Goldman Sachs: First, as you have been divesting assets over the last couple of years can you talk about how your return has changed and what the plan is over I guess sans merger with a focus on returns and how you see that improving over the next couple of years. Then the drivers or the differences in the attendance trends internationally versus domestically or North America, is that just pure content based?

In terms of the return on our asset sales we are still seeing obviously they are strategic sales for us so the ones we have out there in the U.K. theaters and potentially the New York theater, we are expecting very accretive returns. So we really aren’t seeing the impacts of that. Obviously those are strategic buyers that are involved in that. Mark Wienkes – Goldman Sachs: And the differences in attendance trends?

Two fold. One in Europe, Madonna is touring Europe, not America. Two, festivals have been very successful this year in Europe. They are having a really strong year in the festival market. Festivals are the amphitheaters of Europe for us so when they are strong our business is strong. Three, U2 is starting in Europe for Q3 and will be here in the fall. So those are the three that would drive international. North America we have U2 coming in the fourth quarter and we purposely, as I said, went into the year not trying to break the show count of last year and purposely kind of dialed down our aggression on how many shows we would fill the amphitheater with for good economic risk. So we went in this year knowing that North America didn’t have to over-deliver and that Europe would and we didn’t have to take that unnecessary risk on some tours and some shows that could have been a negative on us. Mark Wienkes – Goldman Sachs: I remember last year there as an increased focus on bringing more festivals to North America. What was the lesson learned from that and is that something you are continuing this year?

We like to fail fast. We did one in Vancouver that didn’t produce the returns we wanted. We lost a couple of million dollars. Also last year it seemed to be the strategy of the year because every promoter tried a festival last year and very few succeeded. We decided again with the economic crisis back in October and planning season we decided to shut down any risky capital initiatives around launching new festivals in North America in 2009. From the looks of it, there are a few established festivals that do great; Lollapalooza, Bonaroo and Coachella. Other than that, the North American market there are a lot of festivals that are out there are just not succeeding. So, we are not robust on the idea that festivals are a growth opportunity in North America. Mark Wienkes – Goldman Sachs: You just talked to the actual logistics or issues or hurdles you see in terms of flipping the switch on House of Blues and the international ticketing at the end of this year, like lessons learned. What did you learn this year in North America? Obviously you mentioned Phish. Are there any significant or different things you need to think about with respect to turning on the rest of the network?

No, I think we have a software platform from CTS. It is technology. We have an ongoing relationship with them. Week by week we are demanding more and more from the system. Week by week Germany is adjusting and trying to make it better and better. So we have had a year of learning and we have a long way to go still to becoming a top notch technology company. It works. It sells tickets. The biggest part we learned is the real fruit from the exercise comes from your e-commerce store front and your dynamic pricing. This no service fees was just continual testing around the dynamic pricing that says can we motivate purchase. We found two pieces of information in research this year that just drives everything we do. 60% of our fans said they would have went to the show but they didn’t hear about it. 40% of our inventory is unsold. We think there are millions of dollars of upside if we can; one, get to the fan more efficiently and effect some of those 60 that want to come. Then through dynamic pricing chip away at that 40% unsold. So the lessons really are just around how do you become a great e-commerce website to motivate purchase, give a better experience and that learning. The bottom line platform called CTS is a software that works good enough and we will continue to innovate it but we don’t see any fundamental problems in adding more to it. Mark Wienkes – Goldman Sachs: Have you seen any differences in the secondary ticketing market with respect to what you are seeing on your website? Michael Rapino : We don’t really have any secondary business right now. We decided this year is not the year we are going to try and figure that piece out. I have read the different reports from Stub Hub and others who it looks like business is still healthy on their end on the top end of the site. We haven’t seen any new insight either way that would suggest the business is growing or declining. It looks pretty stable. That business at the end of the day is the big cities, big tours and great seats can demand a great premium.

The next question comes from the line of David Joyce – Miller Tabak. David Joyce – Miller Tabak: Can you discuss how your Latin American partnership has been panning out according to your original expectations and what sort of impact that would have had in the second quarter proportionate to deferred revenue? What other territories would you consider looking into in the future?

Our partner, CIE, is a great partner. As everyone would know it wasn’t the best year to be a promoter in Mexico with swine flu and others. This year we had a great success by bringing Madonna into South America last year. Basically since January the Mexican business has been shut closed for business on a concert perspective. It is now heating back up and we have some stadium shows planned. We will continue to move forward. We have no real impact on deferred revenue. It is not a big enough piece of business. That strategic relationship is about having that distribution pipe when you have shows like Madonna or the Jonas Brothers. When you are promoting in Brazil, Mexico or Chile you are now not just selling off the show but you are actually participating in the local revenue. It is new revenue to us but at the end of the day Latin America in general is a $5-7 million EBITDA business a year. It is not a big piece of business right now. Europe is doing really well. As far as expansion we are continually looking at Australia, Japan and Germany. Those are the big markets we really don’t have any presence in that we would like to find a right way to get to at the right cost one day.

The next question comes from the line of Alan Gould – Natixis Alan Gould – Natixis: It has been a couple of years now since you started these 360 deals. You have had Madonna, Nickelback and I guess U2 all on the road. How have they performed relative to your expectations in the first year or two of those deals?

They have exceeded our original plan. As you remember when we signed Madonna there was a lot of debate on how big she was touring, what her age was, would she tour. She went out and broke all history records with the largest tour in history from a solo artist. We had not planned on it being that big. That over delivered on our return. Jay-Z toured and sold out every arena. That again we didn’t have 100% sell out in there. So that worked. Nickelback is just dead on plan. We knew they were a sleeper and a big band and selling one million tickets right now is unheard of in today’s economy. Then U2, we always believe they are going to be as big and as long as they want. We have thought this tour when we did that deal did we know they were going to do a worldwide stadium tour? No. So we would have never built into a plan that aggressive scaling in size. So U2 will over deliver completely on our original plan. The easy part of those deals we believed from our history those would be strong touring acts and having them under contract would benefit us. It has. It kept the price of talent down and they have all over performed. Then the real test will come when our first real album comes out that we have to do some level of distribution on. We have our first Jay-Z album we have outsourced that to Warner Records. Again, we always said when we took these over the cost of the album was the marginal small part of the overall deal and we don’t plan on building infrastructure and cost structure to become a distributor. We are finding there are a lot of distributors who want the Jay-Z, Madonna and Nickelback records. So we are pretty confident we will be able to find our returns on the record by outsourcing that. Alan Gould – Natixis: How are the other ancillary businesses gone? Have they also out performed like the tours have? The merchandise, etc.?

Yes. Most of our deals are all tour related. At the end of the day if you sell the tickets, the fan site works, the membership works, the merchandise works, the sponsorship works. The Blackberry sponsorship on U2 over delivered. Shakira will be coming up this year. We believe she will be a gigantic star worldwide again. The business has over delivered on all of those pieces given the size of the ticket sales. Alan Gould – Natixis: I missed the first part of the call if this was already asked, how is sponsorship going given the softness in overall advertising and the economy?

We did cover it but just a summary, given the trends of advertising down the 15-30% depending on which medium we are tracking flat right now year-over-year which we are surprised by honestly. We don’t know if that will hold through the rest of the year so we are building our plan to assume that sponsorship will be down somewhere in the range of 5% year-over-year is how we built our plan. We originally built it being down about 10% but we are feeling at this point that we may finish the year only 5% down. Alan Gould – Natixis: Did you lower the guidance to high single digits as opposed to low double digits?

That is correct.

The next question comes from the line of Reed Walker – [Avascent Group]. Reed Walker – [Avascent Group]: Any update on the merger? I saw the notice and there is no questions yet.

Nothing. We are in the usual process of the DOJ. We are moving on that. The S4 we will finalize soon. When will that go out?

45-60 days probably. It is out on Amendment 1 but still not effective. Reed Walker – [Avascent Group]: Still 45-60 days. Has there been a second request for data?

Oh yes. We did that back in March. We are on full second review. Everything is going…I can say we are very confident and optimistic still that we will close this in the fourth quarter and the DOJ when it is all said and done we will see the benefits of the output.

There are no further questions at this time. I would now like to turn the call back over to management for any closing remarks.

Thank you everybody. We will talk to you in Q3.

This concludes Live Nation’s second quarter 2009 earnings conference call. You may now disconnect.