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 First Quarter 2012 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, reconciliation 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 Azzof, Live Nation Entertainment's Chairman of the Board.

Thank you, operator, and welcome, everyone, to our first quarter 2012 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 results for the quarter in more detail. The global economic environment for discretionary consumer spending businesses remains difficult. Nevertheless, 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. Touring activity during the first quarter is typically quiet. However, AOI for the quarter rose 7% on a 2% revenue increase. The concert performance and improvements to our ticketing platform, eCommerce capabilities, online advertising and Sponsorship businesses will be covered in more detail by Mike. The continuing enhancements to the Ticketmaster systems to our new dynamic pricing tools, LiveAnalytics, Interactive Seat Maps and improving technologies are being well-received by our clients and consumers. In addition to my broader role at Live Nation, I continue to lead Artist Nation, including Front Line Management. Touring activity by our key artists during the first quarter was slower than last year. It was limited to Van Halen, Jimmy Buffett and Jason Aldean. Van Halen has extended their current tour with dates through the fall. Summer touring from key artists looks good. We continue our program of aggressive new artist signings and securing merchandise and VIP ticketing rights with established stars and even the new tween band sensation, One Direction. So, thank you again for your support. I look forward to updating you on our progress during our next earnings call. I'd like now to turn it over to Michael for his remarks. Thanks, much.

Thank you, Irving. We're off to a great start for the year and seeing some wind at our backs with strong fan demand. At Live Nation, we have sold 23% more concert tickets through April and 8% more at Ticketmaster. Sponsorship and advertising is on-track to deliver double-digit growth, and as a result, we are on track to deliver both top line and bottom line growth in 2012. And as we look beyond, we continue to see great growth opportunity. We have still a limited presence outside of North America and Europe, markets that could generate 50% additional growth off our current base with higher margins in North America. We are one of the most passionate consumer products and yet 30% of fans still miss concerts because they didn't hear about the show. Social and mobile can go a long way in driving these sales. And we have the greatest music sponsorship platform in the industry. Just getting our fair share of spending would double this business. And now let's look at our business units and how they're advancing on this strategy in Q2 -- in Q1. Live Nation continues to grow its global market share and profitability. Live Nation concerts ticket sales were up 23%. As we mentioned in the first quarter, up until April and consistently strong both in North America, up 25% and International, up 19%. Looking at these results by business lines, festivals, our key focus for expansion and our highest margin concert product line, is off to a strong start. In North America, we launched several new festivals, and as a result, our North American festival sales were up over 30% and European festival sales were up 20% through Europe. Electronic music, as we move -- and a big focus for us, with our acquisition…

Thanks, Michael, and good afternoon, everyone. 2012 is off to a great start with the first quarter results, and we have again delivered growth in all of our key financial metrics. Revenue, adjusted operating income, operating income and free cash flow. Beginning in 2012, we have reduced our reportable segments from 5 to 4. They are now concerts, ticketing, Artist Nation and Sponsorship and advertising. All online advertising and online Sponsorship revenue from the previously reported eCommerce segment are now included in sponsorship and advertising, while all of their activity for eCommerce has been allocated to the ticketing segment. This change was made to adjust the segments to how we manage the operations of our 4 main businesses. In the first quarter, revenue grew 2% to $868 million. Concerts' revenue was flat year-over-year on slightly increased show count and attendance due to low -- due to fewer shows in stadiums and arenas as compared to last year. Ticketing revenue was up 3%, driven particularly by strength in ticket sales in Europe. As a note to this, we've seen through April and early May, the International ticket sales are continuing to hold up and are doing even better in the second quarter, with double-digit ticket sales growth in April for all Ticketmaster events regardless of timing. Increased online advertising activity drove a 9% increase in Sponsorship and advertising revenue during the quarter. And Artist Nation revenue grew 13% over last year due to 2011 acquisitions, along with higher management commissions and merchandise and VIP ticket sales. For the quarter, adjusted operating income increased 7% to $48 million compared to last year's $45 million. The concerts division grew AOI year-over-year by 40%, driven by improved arena show results and increased show count. Ticketing increased the number of tickets sold by 6% in…

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

Housekeeping things to understand. One, on the free cash flow and strength on the tax receivables. What was that related to that was building up, if you could just help us understand that a little bit more?

Yes, primarily, we talked about this at year end, David. But it's primarily related to the Front Line acquisition and some benefits we got for carrying back against our NOL. So that was the biggest piece of it.

Okay. And Irving, you mentioned some of the global economic issues. Is that primarily reflected on the International side because it looked like North America was still fairly strong?

Well, I think I'm not sure if Irving can jump in, but generally, the concern is always, we don't want to get too optimistic and ahead of ourselves. We are seeing great trends throughout the globe. Lady Gaga shows are selling out from Asia to Europe, so we're having a strong year. What we're always looking, as everyone else is, to the economic challenges and seeing if they're affecting our business. Europe, which most people wonder about, has been very strong for us. That's why I referred to sales up 19%. Most of our business, well over 80% of our businesses is in Northern Europe. A very small percentage of our business is in Spain, and none of it in Greece. So right now, we really haven't been affected by any of the global economic challenges. Northern Europe and Europe is ahead of last year. North America is ahead, and even our businesses in Asia and others are all strong. So we're always -- we are looking, but right now, we're very confident that the industry and our lineup are going to have a strong year from the ticket sales perspective.

And finally, if we could just understand some of the re-categorization, it looks like the ad revenue online that was shifted to the Sponsorship and advertising level was almost all margin, whereas the other revenue had more expenses attached to it that went to the ticketing side. If you could explain what moved around there, please?

That's correct. I mean, basically it's the online advertising piece that went into Sponsorship and advertising, which is fairly high-margin. The cost for most of the sellers who are already in the Sponsorship division, so there wasn't a whole lot of direct cost transfer. And the rest of the business, which is the upsell, the fee per ticket and then the cost to run the websites and all the online activities, is the piece that shifted into ticketing.

And our next question comes from Ben Mogil with Stifel, Nicolaus.

So when you talk about sort of double-digit tenants growth in the North American amphitheaters, if you look at it on a per show basis, what kind of number would you be looking for? I'm trying to get a sense of show count as you head into the year?

As you can you -- as you know from the number right now, we're tracking incredibly ahead of last year at 50%. When it all shakes out over the summer, show-per-show, year-over-year, we would still expect on a per show basis, our tenants to be up in the high-single to double digits.

I'm guessing, Michael, it's too early to have any sense of what food and beverage looks like this year?

Yes, too early. I mean, the only window we get is from January to now, in all of our theater club arena business in terms of what we're doing. And all of those trends seem to be holding up year-over-year and ahead. So we don't see anything that would alert that the sum will be any different in the first 4 months when consumers have showed up at the building they were spending equally to last year.

Okay. And then Kathy, this one for you. On the European situation, have you -- I know in the past, you've always hedged your, sort of guarantees out of Europe, et cetera, and your anticipated cash flows, have you done that by this time of the year?

Yes, we haven't changed that process, so we continue on those artist contracts to absolutely hedge those for any unpaid amounts.

And we'll take our next question from John Tinker with Maxim.

Could you just talk a little more about the secondary markets? Obviously, so you mentioned you're working with the Garden, Barclays, NFL, and what size of shares do you think would be a good go for you to shoot for that? And secondly, could you just touch base on where you are with AEG and the Staples center, and who's managing that -- I'm sorry, who's selling tickets for that still?

Well, I'll answer the Staples, because it's the easiest. The Ticketmaster still is the ticketing partner agent for the Staples Center. So, I guess, at some point it may -- will be shifted to the new platform. But as of now, we're still doing all of the business at that building. And as far as the secondary business, there's 2 ways to look at the secondary. The first and foremost for us is just to make sure we have as much content or tickets at our platform as possible. So anyway we can leverage any of our existing Ticketmaster inventory or Ticketmaster clients, and get that inventory at TicketsNow, that's our first step in competing against the market leader out there. So it's stuck whether it's Live Nation, whether it's Madison Square Garden or the NFL, having any of that inventory exclusively or a first-comes basis on our inventory will help us drive our proposition. And then second, is to drive traffic to our TicketsNow website. Again, the way we can grow that business against the leader and the easiest way we can grow it is through the synergy of the Ticketmaster. The traffic we have at Ticketmaster, any time now you have no-tickets-page found. If we can do it in the proper way where the consumer is fully aware and its transparent, that is the secret sauce to delivering volume over to TicketsNow and driving our consumer business. So my team's worked hard this year and complied to all the previous issues with the FCC, and etc. had -- FTC, and we think this year, we'll be able to drive a lot of traffic to TicketsNow from our main business sites. So if we achieved both of those goals, increased our traffic this year and increased our inventory. You've already seen from the first quarter, ticket sales, volume is up double digits for us. And we have a very, very aggressive goal and target over the next 2 years on how we think that business can chip away at the market leader from a AOI and a ticket allocation perspective.

Just one follow-up if I could. You exclude ticket sales for the 2012 London Olympics. Can you just say how's that's going and how that goes to your P&L?

For the tickets sold for the Olympics were not reported as tickets, they were fees that we earned and most of that, as you know, was earned last year.

Okay, so you don't get any incremental revenue at all now?

I mean, the majority of the -- remember Ticketmaster counts the money when the sale was made, and Live Nation counts the money when the show happens. Olympics are only at Ticketmaster's side of the equation. Most of the tickets were sold in 2011 for the Olympics. There is a on-sale starting this weekend and next, so there will still be some tickets that are being sold in 2012. But the vast majority of the Olympic tickets were sold in 2011, and the recorded service fees were in the 2011 Q4 numbers.

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

Look, just -- I'm looking real quick, because I haven't seen the Q come across. It looks like the balance sheet and the layers of the secured senior and total debt are pretty much the same as they were at December 31. Is that the right impression?

That's correct.

Okay. And then secondly, this is kind of more of a bigger picture question. Because of the upgrade, for lack of a better word, enhancement of state-of-the-art for your ticketing platform, can you remind us again, that is a multi-year project, or when is the inflection point that we would notice a substantial benefit prone to the economics to Live Nation from that upgrade and enhancement?

Good question. I think there's 2 paths to where the benefits come. One is along the way and then one is at the end from a more fixed cost perspective. So the first and most important thing about re-platforming our technology, while we're doing it, we are also able to use some of the features and functionalities that are being developed to launch during the 3-year process. So the process started last year, that we were going to upgrade our platform and our code. Over those 3 years, we would be able to use some of that investment that comes to market. So Interactive Seat Maps, we're launching a new client portal to our customers this year. Historically, Ticketmaster had a green screen portal for our clients for 20 years. It can't -- if you can't survive in the future in that kind of technology, well, we're going to be launching a state-of-the-art client portal this year for our customers. So that's a benefit that is being built under the new platform, but can launch that feature and functionality now. So over the 3 years, we will continually have features and functions whether it's on the website, whether it's our API coming to life or whether it's for our B2B that will help us, first and foremost, maintain and acquire new customers. So I think in a big picture, when we took this business over 2 years ago, the business had declined for 5 years, both from an AOI, and from a net renewal process. In the last year and a half, we have reversed the AOI trend and grew the business in 2011. But more importantly, we've also reversed the renewal and now are looking somewhere in the 100% renewal rate. So we believe, first and foremost, for the…

Okay, so that means you're recapturing your investment between one and 2 years depending at when you start the clock at the end of the third year?

Yes, I think you could make -- I mean, there's 2 business cases. If you did nothing for the next 3 years, what -- where would your business have declined and what AOI would you have lost? So step one, is we turn the decline, and now have this business healthy, robust, and our clients more importantly, now see that the vigor around the innovation and the technology as we will deliver them, is leading in world-class. So that's why, I believe for 3 years, we will continue to grow and maintain a strong core business, renewal business. So we'll protect our current business. And then step 2, yes, you're kind of the -- just if you looked at the 2-year return, going into the third year, just operating your business off that new lower cost basis, you have a 1 to 2 year return on that capital.

And our next question comes from Rich Tullo with Albert Fried.

One question is, specifically what kind of headwinds did you see from the truncated NBA season in the first quarter? Was it -- arena availability hard to come by? I've heard, anecdotally from different venues, that it was a challenge fitting in concerts, as well as gains? And do you expect in the fourth quarter the comparables in regards to the NBA and the arena availability to improve since there will be no NBA lockout in the fourth quarter of this year?

Yes, I mean, in general, the lockout and the length of it in the grand picture was fairly not affected to our bottom line. We lost some ticket sales, gained a few shows, a few concert shows where we had some fees on it, and then business got back fairly quickly and the tickets sales started start again. So in a net overall, it was I think at the time, we said somewhere, it might have caused us $5 million in AOI to our bottom line at Ticketmaster for some lost ticket sales that weren't replaced by maybe concerts or other events. So net year-over-year, we might have a $5 million pick up in Q4 next year if you wanted to do it straight apples-for-apples in terms of ticket sales-to-shows.

And then just kind of a follow-up, on the pacing of the incremental CapEx for Ticketmaster, is that going to flow evenly throughout the year, or is it more weighted in the first half.

It's going to be -- yes, for this year, the piece, the $25 million, it should be fairly even throughout the year. And then obviously, the project continues over the multi-years of the project. Because we're just finishing year 1 and it's the 3 years of the full project.

And there are no further questions. [Operator Instructions]

All right. Thank you.

And this concludes the question-and-answer session. I will now turn the call back over to Mr. Rapino for closing.

Great. Thank you, everybody.

And ladies and gentlemen, this does conclude the Live Nation Entertainment First Quarter 2012 Earnings Conference Call.