Welcome to Warner Music Group's Third Quarter Earnings Call for the period ended June 30, 2016. At the request of Warner Music Group, today's call is being recorded for replay purposes. And if you object, you may disconnect at any time. [Operator Instructions] Now I would like to turn today's call over to your host, Mr. James Steven, Executive Vice President, Communications and Marketing. You may begin.

Good morning, everyone. Welcome to Warner Music Group's fiscal third quarter conference call. Both our earnings press release and the Form 10-Q we filed this morning are available on our website. Today, our CEO, Steve Cooper, will update you on our business performance and strategy; our Executive Vice President and CFO, Eric Levin, will discuss our financial condition and results; and then we will take your questions. Before Steve's comments, let me remind you that this communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. All forward-looking statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that can cause actual results that differ materially from our expectations. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our earnings press release, our Form 10-Q and Form 10-K and other SEC filings. We plan to present certain non-GAAP results during this conference call. We have provided schedules reconciling these results to our GAAP results in our earnings press release posted on our website. Also, please note, all revenue figures and comparisons discussed today will be presented in constant currency, unless otherwise noted. With that, I'll turn it over to Steve Cooper.

Thank you, James. Good morning, everyone. Thanks for joining us, and I hope you're all having a great summer. I'd like to start by marking the recent fifth anniversary of the acquisition of the Warner Music Group by Len Blavatnik's Access Industries. It's a happy anniversary, as today we are reporting our largest third quarter revenue since Access's ownership began. Over the last 5 years, we've signed and developed fantastic artists and songwriters, we've expanded and transformed our operations around the world and we've significantly improved our financial health. Since Q3 2011, we've grown our Recorded Music revenue at a CAGR of 5% and our OIBDA at a CAGR of 9%. Meanwhile, for calendar year 2011 through '15, the recorded music industry stayed relatively flat at a CAGR of 0.1%, a very positive indication that we've been outpacing the industry. In 2011, physical formats were our largest source of Recorded Music revenue, and those formats were declining steadily. In stark contrast, over the last 5 years, given our early embrace of streaming, it has grown from an insignificant portion of digital sales to our largest single source of revenue for the second quarter running. Today's results are further evidence of our strong momentum. Specifically, this quarter, we grew total revenue by 15%, digital revenue by 23% and OIBDA by 20%. We're having a great year and are well positioned for long-term growth. Once again, I'd like to update you on our key priorities, which are driving our business forward. First, our commitment to delivering a consistent flow of great new music, driven by our operators all over the world. We're achieving this goal by ensuring that we are never dependent on any single label, country or division for sustaining our success. Instead, we're drawing on our collective strength. It's encouraging…

Thank you, Steve, and good morning, everyone. I'm very pleased with our results. We have a proven strategy for financial success, which is allowing us to further optimize our capital structure. We're driving revenue growth with great new music, international expansion and commercial innovation. We're growing OIBDA through a combination of revenue growth and our focus on cost control. We're converting OIBDA into cash by thoughtful working capital management, and we're generating additional cash through select noncore asset sales. To review our third quarter performance, total revenue growth of 15% was strong. And even on an as-reported basis, we grew a very healthy 14%. From an OIBDA perspective, certain adjustments are necessary to make the year-over-year comparisons more meaningful. The details are in our press release, but in this quarter, we had $9 million gain related to asset sales versus $3 million of nonrecurring expenses in the prior year quarter. Adjusted OIBDA, which excludes the gain in nonrecurring expenses, rose 8% to $111 million. Adjusted OIBDA margin declined 0.8 percentage points to 13.7%. The decline was driven by revenue mix as we had strong growth in concert promotion and physical revenue, which tend to be lower margin. That said, for the first 9 months of the year, our adjusted OIBDA margin is up 0.2 percentage points to 15.7%. In Recorded Music, total revenue was up 15%, with digital revenue up 20%, driven by streaming. Physical revenue grew 10%, benefiting from local releases and catalog. Licensing was essentially flat, down $1 million, which was largely timing related. Artist services and expanded rights revenue rose 24%, driven by timing of concert promotion activity. Recorded Music adjusted OIBDA was up 8% to $110 million, benefiting from revenue growth. And Recorded Music adjusted margin declined 1 percentage point to 16.2%, which was related to…

[Operator Instructions] Your first question comes from the line of Aaron Watts with Deutsche Bank.

This is Angeline Matthew for Aaron Watts. I wanted to ask you guys a follow-up on the Vevo announcement that was out a couple of days ago. I was wondering if I could get some context around how this could impact your revenue and cash flow. And when you would see this benefit flow through to your P&L?

I'm sorry, I didn't catch your first name again.

Angeline Matthew.

This is Steve Cooper. We don't expect to have a needle-moving revenue boost from the Vevo relationship. It is -- the utilization of our videos on the Vevo-owned properties, which is primarily vevo.com, where their views, relative to their views on YouTube, are not particularly substantial. What we are doing, however, is working on creating a culture relationship with Vevo so that our videos get more exposure off of YouTube, and we will continue to work to grow that relationship.

[Operator Instructions] There are no further in the question-and-answer queue. I now turn the call back -- the presentation to you.

Great. Well, listen, everybody, thanks for your time. I hope you enjoy the balance of the summer, and we will talk to you in the fall. Have a great day. Bye-bye.

And this concludes today's conference call. You may now disconnect.