Good afternoon. My name is Carrie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Live Nation Entertainment Fourth Quarter and Full Year 2011 Earnings Conference Call. Today's conference is being recorded. [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, including statements relating to the company's anticipated financial performance, business prospects, new developments and similar matters. Please refer to Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's most recent filings on Forms 10-K, 10-Q and 8-K, for a description of risks and uncertainties that could 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. 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. Irving Azoff, Live Nation Entertainment's Chairman of the Board.

Thank you, operator, and welcome, everyone, to our fourth quarter 2011 earnings call. Joining me today are Michael Rapino, our CEO; and Kathy Willard, our CFO. I will begin the call with some brief comments and then turn it over to Michael, who will review our fourth quarter and 2011 full year results. Despite the difficult global economic environment for discretionary consumer spending businesses, we continue to deliver improved results and make significant progress towards achieving the goals set following the merger of Live Nation and Ticketmaster in 2010. The strong concert performance and improvements to our Ticketing platform, e-commerce capabilities, online advertising and sponsorship businesses will be covered in more detail by Michael. The continuing enhancements to the Ticketmaster systems for our new dynamic pricing tools, LiveAnalytics, Interactive Seat Maps and improving technologies are being well received by our clients and also by consumers. In addition to my broader role at Live Nation, I continue to lead Artist Nation, including Front Line Management. Our key artists have been far more active during 2011, delivering improvements in management business results for the year of 36% above last year. Despite some slippage of a few key artist tour plans to 2012, 2 of these, Van Halen and Neil Diamond, already have tours underway and are doing terrific business. Several acts like Jason Aldean have had amazing breakthroughs this year. The Eagles, Jimmy Buffett, Journey, Steely Dan and many of our vintage acts continued their strong tour performances during last year. We continue to sign major superstar talent like Mariah Carey, and we concluded a multi-rights deal with Sony and Nickelodeon for the incredibly hot tween band, Big Time Rush. As reported previously, the improvement in our management business has been offset by higher cost this year in the Live Nation merchandise business, identified as we continue to integrate and restructure our 2 merchandise businesses. We've successfully integrated the group's various VIP Ticketing businesses and look to more effective and profitable results from these going forward. So thank you again for your support, and I look forward to updating you to our progress on the next earnings call. And now I'd like to turn this over to Michael for his remarks.

Thank you, Irving. Good afternoon, everyone. Looking back on 2011, we set out to grow profitability in our core businesses, invest in our Ticketing platform and start to launch innovative products to better serve and engage the fans. Taking a look at the scorecard a year later, we delivered on this mission. We grew revenue and AOI in each of our businesses. We turned concerts around and doubled AOI; improved Ticketmaster profitability for the first time in 5 years; grew sponsorship AOI by 12% and e-commerce AOI by 41%; and as a result, delivered overall revenue growth of 6% and AOI growth of 21%. Free cash flow grew 23%, demonstrating our ability to convert AOI into cash. We launched new innovative products such as Facebook seat maps, Live Nation apps, GrouponLive, LiveAnalytics, Pricemaster and upgraded our ticketmaster.com checkout. In 2012, we will build on our 2011 successes and continue to focus on the key strategic drivers that will grow our business. Number one is to continue to grow our core businesses through better cost execution and expanded revenue; two is to launch innovative products at both Ticketmaster and Live Nation that drive fan engagement and conversion; three, to invest in our Ticketmaster technology re-platform; and four, to continue to expand into untapped global markets. Now I'll take you through our divisional updates. On the concert side, in 2011, I spoke that I expected that year to be one of stable demand despite economic uncertainty, with growth being driven by a proved execution, and that is exactly what we delivered in 2011. And 2007 (sic) [2011] highlights. We expanded our portfolio of festivals, electronic and geographic markets; we launched 10 new festivals; we moved strongly into the electronic music space, promoting 148 electronic concerts and festivals during the year to nearly…

Thank you, Michael, and hello, everyone. We are pleased with our results for 2011 as we delivered growth in all our key financial metrics. Revenue, adjusted operating income, operating income, net income and free cash flow are all higher. And once again, we have improved our gross margins, AOI margins, operating margin and net margin for the year. As we've discussed, we believe the full year results are the most accurate gauge of our performance, given fluctuations in concert and ticket on-sale timing. I will get into the specifics, but as a top line, we delivered solid revenue growth and significant improvement across AOI, operating income and net income. For the full year 2011, revenue grew 6% to $5.4 billion, with revenue growth across every one of our segments. Concerts revenue grew by 2% on slightly increased show count and roughly flat attendance. Ticketing revenue was up 14%, driven by the increase in ticket sales. Increased online advertising and up-sell activity, along with higher online ticket sales, drove a 64% increase in e-commerce revenue during 2011. And lastly, sponsorship and Artist Nation delivered strong revenue growth over last year from new sponsorship relationships and higher touring activity by our managed artists. For the year, adjusted operating income increased 21% to $438 million. The concert division doubled AOI year-over-year, as we executed better on our core arena and amphitheater platforms, while expanding our portfolio and investing close to $10 million in new festivals. Ticketing AOI was up 18% due to increased ticket sales and the 2012 London Olympics. We are pleased that we delivered this profitability growth in ticketing, while also making a substantial investment in the Ticketmaster technology re-platforming project. E-commerce grew AOI 41%, largely as a result of increased advertising and up-sell revenue, while also investing in social and…

[Operator Instructions] And we'll take our first question from David Joyce with Miller Tabak.

Questions on the ticketing. You've excluded the London Olympics from the metrics in the press release. Is there a -- could you talk about any sort of different economics related to that or why you would have excluded them? Is just -- is it just really skew the comparability?

We are just -- we're paid a fee on each ticket we sold. Those have been excluded all year. So there's no change in that methodology, David. We're just trying to make that clear that those are not in the ticket sales.

Okay. And in November, you had discussed the headwinds for the fourth quarter of the lack of NBA game ticket sales and the lack of the Wickeds, new shows, but it looks like you more than made up for that. What would you attribute that to?

It's overall. Obviously, the timing of the NBA lockout was not as impactful. The concert ticket sales were, but overall Ticketmaster had higher ticket sales than we had expected at that time, and we're very pleased with the reduced impact of the NBA.

All right. And finally, if you could just clarify...

I'm sorry, David. David, just to add to that. As you can see, it was a -- we've had an early start to the concert year in general. So both December and in January, a lot have be-gone sales have happened, which is great for our business. So they got some relief from the concert side to cover up for the NBA fall.

Understood. Okay. And just some final clarification on what you said, Kathy, that the ticket sales would be flat to slightly up this year. But you said there would be an offset for the investments in mobile and platform. You mean an AOI offset because of -- you were talking about the AOI impact from this one...

Correct, the investments in the business that go through operating expenses from Ticketmaster.

And we'll take our next question from Ben Mogil with Stifel, Nicolaus.

Kathy, in your comments that you expect ticket sales to be sort of flat to slightly up in '12, and Michael's comments earlier about sort of his expectation of trends, is the way we should be looking at it really is, is that the pricing is kind of flat and volume is up low single digits? Is that the correct way to look at it?

Pricing on average ticket price, you mean?

Yes.

I mean in general, you can say yes. I mean, probably net overall, there might be a few pennies on overall average ticket price, history would say. But we don't expect any of our -- any revenue coming so much from the ticket prices going up. Now we might dynamically price it better and get some of the overall ticket revenue increase from the higher end of the market. But in our assumptions, we would believe that both ticketing industry and concerts look to be able to end this year in single-digit growth, when we were probably predicting a flat year.

That's great. And then sort of the one quick follow-up. If you took the -- if you take the year-end deferred revenue balance and you strip out the impact of the Olympics, but then you add in the January -- the strong $87 million in January, are you running about flat, call it, January of '12 versus December of '10?

Yes. I mean, yes, that's the right answer. Flat to slightly up based on what we saw in January.

And even excluding the impact of the deferred Olympics?

I mean, remember that's not significant because most of those earnings were recognized in '11. So it's really...

The Olympics don't show up as a deferred revenue account for you?

No, it's not substantial because we were recognizing those fees as we've delivered our service.

Remember, it's not a concert. It's a ticket.

Yes, of course. Of course. But are you not withholding the -- you don't hold the cash on behalf of the Olympics for the event, or that goes right back to them.

No, it's turned over fairly regularly, just like most of our venue clients.

And we'll take our next question from Doug Arthur with Evercore.

Yes, Kathy, I'm wondering if you can be a little bit more specific on the increase in corporate expense. You mentioned litigation and incentive comp. I mean, litigation was a fairly significant factor in Q3. Was it as significant in Q4?

No, it's not the same impact. It's still a substantial number, and these are not -- it's not a settlement accrual like we did in Q3. It's ongoing litigation cost for that particular case is getting -- heating up. It was pretty much dormant in 2010, and so we're incurring those costs in -- more of those costs in 2011.

And should that be expected again in Q1?

Yes. I mean, you can see more of the details in the K, but that case will be continuing through 2012 and the future.

Okay. And then just a question on e-commerce profitability in the quarter. Big revenue growth, flattish AOI, anything in -- specifically there?

Again, that's more along the lines of the investment in the social and mobile platforms.

[Operator Instructions] We'll take our next question from Bishop Cheen with Wells Fargo.

So we covered litigation cost. Growing competition in the ticket distribution and services business, and without asking specifically about any incumbent or would-be competitor, can you just give us your thoughts and color on what you think the competitive landscape looks like going forward?

Well, I can -- we'll have to use 2011 as a basis to answer that. I think there was concern 12 to 18 months ago about Ticketmaster's ability in this evolving technology landscape to continue to compete. And we know -- and I think we hopefully put a lot of that to rest right now with a 102% renewal rate. So I would say that we're always humble, we're always waking up every day paranoid, we're making sure we're equipped to handle the future, but we think that what we're doing with master [ph] and what that team has done over the last year of injecting a new life into that great platform, that we're very, very confident we will continue to maintain our leadership position on the ticketing side, from a technology side as we start to roll out our apps, our mobile kind of extensions in that business. We think that's going to continue to grow and excel that business. So as we're holding on to the overall business and spending and reinvesting in our core technology, we're very confident that between now and our new technology rolling out over the next 2 years, that we will continue to be by far the innovator and the leader in this space and our scale will continually be a competitive advantage to us.

Fair enough. Housekeeping question. You expect to file the 10-K by when?

It will be -- it's being filed today, if it hasn't already.

And we'll take our next question from John Healy with Northcoast Research.

I wanted to ask a little bit more about the rollout of dynamic pricing. Michael, maybe you could kind of walk us through the process that, that has to go through with getting the artist sign-off on that? And as we close the year, how many venues actually had it this year? And what do you expect for 2012?

Well, a few questions. On dynamic pricing, we look at it in a few ways, but let's call it the most important way, which is the Pricemaster tool, which is our joint venture with MarketShare that powers that world-class technology. As we have mentioned in earlier calls, we spent 2011 finalizing that technology, the interface, making it very easy for anyone to use. I mean the UI is incredibly simple for a venue manager, promoter or manager to use. So '11 was about getting it developed, testing it, and we tested it amongst sports teams and concert venues with great success, both in the interaction of it and the end result. So we're looking in 2012, obviously, it's always easier to get adoption in-house. So it's easier for us to walk across the street, educate all of our promoters on this incredible tool and get them in their hands and on the computer using and selling it for 2012 concert season. So most of our promoters have been through all the training, understand the tool, can easily sell it now when they're talking to the artist about their summer season. And obviously, because the artist controls the ticket price in the end, it's a conversation with the artist to make sure that they're comfortable having an ongoing, scalable, flexing ticket price that's matching market demand. And we've had a great success, I think. I don't know if Irving is still on, but I know he's talked about it publicly before, that his roster of artists all understand and support the concept. So we're very excited that 100 shows already have artist approval, and we'll be testing our dynamic pricing fairly deeply on the concert side this year.

And there are no further questions. I will now turn the call back over to Mr. Rapino for closing remarks.

Great. Thank you, everybody, and we look forward to talking to you in May.

Ladies and gentlemen, this concludes the Live Nation Entertainment Fourth Quarter and Full Year 2011 Earnings Call.