Michael Rapino - President and CEO Joe Berchtold - COO Kathy Willard - EVP and CFO

David Joyce - Evercore ISI Amy Yong - Macquarie Vasily Karasyov - Sterne Agee Martin Pyykkonen - Rosenblatt Securities

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 2014 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer period. 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 measures in their earnings release. The release, reconciliations and other financial or statistical information to be discussed on this call can be found under the Investor Relations tab on investors.livenationentertainment.com. It is now my pleasure to turn the call over to Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.

Good afternoon and welcome to our fourth quarter and full year 2014 conference call. Live Nation continues to be the global in the live event industry with another record year. In 2014 the company grew AOI by 10%, revenue by 6% and free cash flow by 9%. We continue to see the tremendous power of live events with strong consumer global demand. Live is truly a unique entertainment form it cannot be duplicated, it is elevated not threatened by technology and it’s borderless. Fans around the world can now discover, follow, share and artist creating a greater demand for live shows. Technology is also transforming ticketing. Ticket sales are continuing the rapid shift to mobile with 35% growth in 2014 to 18% of total ticket sales leading to a higher fan engagement conversion and a better purchase flow. We believe the Live business will continue to have a strong growth for years to come, as connected fans drive demands, artist are motivated to tour and mobile technology drives conversion. Starting with our Concert division, in 2014 we built on a record 2013 are growing concert's revenue 5%. We again grew our global market share as we promoted the majority of 22 to the top 25 global tours. At the same time, we continue to expand our global footprint in the Philippines, Thailand, Taiwan and Indonesia while also building our portfolio of marquee festival assets with the acquisition of Austin City Limits and Lollapalooza. Our Artist Management Business, AOI grew by 50% as we attracted more managers to Live Nation including U2, Madonna, Lady Gaga, Miley Cyrus, Britney Spears, Alicia Keys. And it drives our Concert business as Live Nation promoted over 700 shows in 2014 more than double that of 2012 with a high percentage of these artist activating TN plus. For this expanded concert base, we again grew our advertising business at a double-digit pace to 10% increase in AOI for the year and our highest margin business at over 70%. And our online business AOI grew even faster at 15%. This growth was driven by two initiatives. First, we’ve remained focused on growing our fan network, increasing traffic by 17% for a total of over one billion visitors throughout the year. And second, we’re not monetizing our content, notably our deal with Yahoo to stream our live concert everyday, which has driven increased interest by advertisers to our online platform to have an incremental business. Yahoo and Live are just the beginning of our entry into the media space, driving advertising with high-quality, live music related video offerings that will continue to expand and drive advertising growth. Our unique ad platform has enabled us to attract new strategic sponsors such as Pepsi, Coke and SAP last year. With these additions, we now have approximately 60 companies that spend over $1 million each year on the Live Nation platform driving over $200 million in revenue and additional 700 companies that also advertise on our platform generating over $300 million in sales revenue. We believe, we can continue to up-sell and convert these 700 sponsors as we grow our average deal size. Ticketmaster continue to build on its global leadership with the introduction of new products that instantly scale on Ticketmaster’s platform and drive revenue. In 2014 these new products help drive a 7% increase in gross transaction value of primary tickets to $23 billion and a 55% increase in secondary GTV. Our most successful new product launch has been Ticketmaster Plus with over $1 billion of secondary GTV since its launch in the fall of 2013. The number of events activated in 2014 increased 500% to 10,000 events listed on Ticketmaster. Secondary growth for concerts in particular has been very strong with 350% year-on-year increase, demonstrating how Ticketmaster can leverage Live Nation concerts as a top customer to immediately establish scale and new products. And despite the strong growth, only 6% of our Ticketmaster event 2014 were activated with secondary inventory. So we have substantial run rate for growth ahead. At the same time we have shifted our product focus for event discovery, purchase and ticket management to mobile. As a result in the fourth quarter of 2014 for the first time, we have more visitors to our mobile sites than desktop. There remains tremendous growth opportunity for Ticketmaster traffic and conversion. The shift to mobile will more effectively link fans with shows and Ticketmaster’s ability to drive mobile app installation as it continues to be the number one place to discover and buy tickets. Our commitment to our venue client is surprise them with the best service and products in the industry, and this continues to bare out as we achieved the net renewal rate of over 100% for the fifth straight year. In addition to enabling better products as a result of our technology investments we were also lowering our operating cost. And by the end of 2014, we reduced our cost per ticket in North America by almost $0.25 per ticket ahead of our planned time table. Demonstrating Ticketmaster's low cost business it had the second biggest sales day in its 30-year history last Friday selling over one million tickets. The top day four years ago and we expect this year to be like that. We’re confident that our business model and it’s scale provides ongoing growth potential during these continued opportunities to consolidate global concert business and we’ll use that scale to start drive fan monetization, advertising, and ticketing. In 2012 we've grown revenue by 18% AOI by 20%, and cash flow by 31%. Looking forward to see this growth of sustainable and repeatable given the breadth of believers and friends working for us. With that I’ll turn it over to Joe, who will take you through additional detail.

Hey Michael. Looking first at our concerts business segment for the full year looking at the specific markets in North America attendance grew by 6% to our 40 million fans with show count of 2%, and attendance per show of 3%. While the amphitheaters, festivals and theaters and clubs all attracted more fans in 2014 stadiums were the strongest driver of fan growth with a record 76 stadium shows led by sellout tours with One Direction, Jay-Z, and Beyonce, Rihanna and Eminem. Internationally, attendance declined by 14%, which we believe was simply a matter of tour cycles and geographic mix with nothing to indicate any consumer issues. The attendance decline came from arenas and stadiums, which both experienced a substantial drop in show count. Notwithstanding the show count decline, our attendance per show at both arenas and stadiums was up for the year 1% and 7% respectively and globally our festivals continue to be a solid growth driver of 9% to almost five million fans. Looking at the fourth quarter, our results reflected a significant drop in arena shows and shift of activity to the third quarter that we previously indicated would be happening. If you look at the aggregate numbers we have 20% of our concerts revenue in Q4 this year versus 24% in each to the past two years. Again consistent with our previous projections of a shift in activity through the third quarter due to stadium activity and arenas timing. As a result we had 41% of our concert revenue in the third quarter of 2014 up from 37% or 38% in the past few years. As we look to 2015, our ticket sales so far this year remain on pace with last year and we expect the global touring pipeline to be at least as strong as it was in 2014 albeit with a return to a more traditional balance of stadium and arena shows. And in particular we expect our international markets to see material increase in touring activity. Turning to our sponsorship and advertising business, our sponsorship and advertising business delivered 5% revenue and 10% AOI growth for the year closing with a very strong fourth quarter that grew AOI by 24%. As we look to 2015, through the end of January, we had double-digit growth and confirmed bookings for those sponsors and advertisers and as a result for 2015 we expect to continue delivering AOI growth at historical levels for the business. For the year, Ticketmaster revenue was up 11%, while AOI was up 9% and for the fourth quarter, our revenue was up 15% and AOI up 16%. In primary ticketing, Ticketmaster benefited from a further acceleration of concert on sales into Q4. As a point of comparison, 29% of total concert ticket sold at Ticketmaster in the year were sold in the fourth quarter of 2014 up from the more typical 26% to 27% for the past few years. In secondary ticketing we saw an acceleration of our GTV growth in the fourth quarter, driven particularly by the NFL concerts in our international markets. And as Michael noted, with our cost savings programs, we were able to drive our fourth quarter cost to achieve an almost $0.25 per ticket cumulative reduction in operating cost for our North America tickets. And through all this we continued our technology investments for future products, which we expect to be the norm for this business going forward. Based on ticket sales through the first six weeks of the year, in 2015 we expect to have low single-digit growth in primary tickets and ongoing double-digit growth in secondary ticketing. And as a result, we expect to continue the trajectory we’ve been on with highest single-digit AOI growth in 2015. So in summary, as we look to 2015, we remain confident we will deliver our three-year plan as we’ve laid out. A few points to note, first from a phasing standpoint we expect the third quarter to continue growing in its size as a percent of full year AOI. On the other hand, we expect that first quarter will return to generating its share of AOI more in line with what we saw in 2011 through 2013 as opposed to the spike we saw in Q1 last year. Secondly, on FX rate, given our 2015 was obviously set based on 2014 actuals, our revenue in AOI are both about two third U.S. dollar denominated and a one third mix of Euro, Pound, Canadian dollar and all other currencies in net order. In 2014 currency fluctuations did not have a major impact on our results about 1% of AOI. Part of the reason we haven’t been impacted much is because we hedge our cost exposure against our revenue base. So our exposure is mainly in the value of profits we bring home from overseas, not in our actual cost of goods versus our revenue and obviously over the past few months, currency fluctuations have been much more volatile with risk of greater impacts in 2015. But at this point we feel very good about the underlying operating strength of the businesses around the world and see these fluctuations simply a cyclical point in time and not reflective of anything structural in the business. I'll turn the call over to Kathy now to go through more on our financial results.

Thanks Joe and good afternoon, everyone. Let me start by summarizing our key financial highlights for the year. Revenue was up 6% to $6.9 billion. AOI is up 10% to $555 million and free cash flow is up 9% to $327 million and in addition our concerts related deferred revenue at yearend is up 7% to $464 million. Now let me take you through some more other details. Revenue for the full year was $6.9 billion, up 6% over last year's $6.5 billion. All of our segments delivered revenue growth for the year, with the largest growth coming from concerts, up 5% and ticketing up 11%. Adjusted operating income in 2014 grew 10% to $555 million, compared to $505 million last year. Concerts AOI was $51 million, compared to $60 million in 2013, due to fewer stadium and arena shows internationally. Sponsorship and advertising's AOI grew 10% to $213 million from the higher online advertising and growth in sponsorship. Ticketing delivered AOI of $326 million, an increase of 9% year-over-year, due to increased primary and secondary ticket sales. And Artist Nation AOI was $48 million, a 50% growth from the $32 million in 2013, driven by higher management commission. Our overall AOI margin was 8% in line with 2013. Normalized operating income for the year was $161 million, an improvement of 7% over last year on the same basis even with the $38 million benefit in 2013 from the gain on disposal of assets and after deducting the non-cash accounting charges in 2014 largely coming from the goodwill write off of our international concerts business, our operating income for the year was $7 million. We delivered net income on a normalized basis for the year of $22 million compared to a net loss of $27 million for last year. This normalized net income equates to a positive EPS of $0.09 for 2014. After deducting the non-cash charges, net of the non-controlling interest share, our net loss for 2014 was $91 million and EPS was a loss of $0.49. For the fourth quarter, revenue was $1.6 billion, down 3% over last year, driven by an 11% drop in concerts revenue with a shift in activities in the third quarter this year as Joe netted. The rest of our operating divisions delivered double-digit growth in revenue for the quarter with the increase in ticketing revenue driven by higher primary and secondary ticketing volumes globally and the increase in sponsorship and advertising revenue coming from more online advertising deals. AOI for the quarter was up to $72 million. Concerts AOI was a loss of $67 million, compared to a loss of $40 million in 2013. The fourth quarter was impacted by fewer arena shows internationally along with the timing of our global touring activity. Ticketing AOI in the fourth quarter was $94 million, up 16% from last year's $81 million with the growth in primary and secondary ticket sales in both North America and Europe. Sponsorship and advertising's AOI for the fourth quarter was $50 million, up 24% from the prior year, coming from the increased arena activity. And Artist Nation AOI was $18 million, up 49% from last year with higher management commissions. In the fourth quarter, our normalized operating loss was $41 million in line with the fourth quarter of last year and after deducting the non-cash charges, our operating loss was $187 million. Lastly, our normalized net loss for the quarter was $81 million after deducting the same non-cash charges, net of the non-controlling interest share, our net loss for the quarter was $186 million. Moving on to cash flow, for the full year free cash flow was $327 million, a 9% increase over the $300 million last year. The increase for the year was due to our higher AOI, net of the increase in distributions to non-controlling interest. Our free cash flow as a percentage of AOI was 59% in 2014, in line with our targeted AOI conversion. Free cash flow was $19 million for the fourth quarter, compared to $17 million in 2013. Cash flow from operations was $269 million 2014, as compared to $417 million last year. The decrease year-over-year is primarily due to higher artist advances made towards the end of 2014 as we bought more 2015 tours supporting our growth and global market shares. As of December 31, we had total cash of $1.4 billion, which includes $534 million in ticketing client cash. Our free cash, which excludes the event related cash for future shows was $494 million as compared to $445 million in 2013. And as I noted, our deferred revenue per concerts was $464 million at the end of the year, an increase of 7% over the $434 million last year. Total capital expenditures for 2014 were in line with our expectations at $134 million of which $60 million was spend on maintenance items. Revenue generating capital expenditures totaled $74 million with higher investments in technology and development of innovative new products, along with an increase in venue related projects as compared to last year. Our total debt was $2.1 billion as of December 31, and our weighted average cost of debt, excluding debt discounts and including the debt premium is 4.3%. Our debt covenant requires a maximum leverage ratio of five times and we're comfortable in compliance of below four times at December 31. We’re excited that we delivered another record year of operating results with growth in revenue AOI and free cash flow and we’re looking forward to another strong year in 2015. Thank you for joining us for the call today. We’ll now open up the call for questions. Operator?

[Operator Instructions] And we’ll take our first question from David Joyce with Evercore ISI.

Thank you. I was wondering if you can provide more color on the Ticketmaster savings that you're running ahead of schedule would you be at a run rate perhaps by the middle of this year or is that sort of going to be dependent on the phasing of the ticket sales goes this year?

Hey David, it’s Joe. I think at this point we’re just comfortable saying it’s going to be -- we’re going to get it out over the course of the year, not going to give you anything specific to the quarters, obviously as we get into the higher volume quarters it makes it all easier to get to that number. But we’re sticking to over the course of the year.

Thanks and I appreciate the help on sizing and thinking about the FX, but could you talk what the impact was on the concerts in the fourth quarter?

Oh yeah I gave you -- what I gave you was for the full year, it was about 1% of AOI almost all of that was fourth quarter impact and given that most of our revenues was in concerts you could assume that was a large driver. But again we hedge the input versus the output, so when we commit to an artist to do a tour in Europe, pay him in U.S. dollars, we hedge at that point to dollars again the revenue we get from the European ticket sales. So we’re not just exposed again the revenue, most of it is a profit exposure if you will.

Okay. Great. Thank you very much.

And we’ll take our next question from Amy Yong with Macquarie.

Thanks. Two questions just first on your guidance, when you talk about how the growth is sustainable and repeatable. Is this a 60 number or 60 number can you just help us think about kind of the growth CAGRs and elaborate on the guidance? And my second question is on acquisition for festivals. Anyway to think about the synergies either top or bottom line synergies with Austin City Limits and Lollapalooza. Thanks.

Thanks Amy, on the guidance a few years ago, we had given a three-year plan and a target to get to our $600 million goal. And we're obviously in the last year of that three-year plan. We believe we’re on track to deliver our goal. Obviously there’s always inquiries about will you give further guidance beyond '16 or beyond '15, it's not something that we’re going to get in a habit of, but I wanted to kind of give you kind of an overview there that if you look at what we’ve been able to accomplish over the last three years, cumulatively regardless of exactly what year was up slightly versus the other. And you were trying to build a model '16, '17 and '18, our message there is to you getting from a $300 million-ish to $600 million was because we built a better business, we’re investing in the right levers and we’re monetizing it. And we do some tuck in acquisitions in every now and then a C3. So we can kind of repeat history going forward and we would expect to deliver if we were sitting here somewhere in the year 2019 and looking back over the last three years, our goal would be to continually deliver that kind of ongoing growth. And then on the festival question Amy, what we said is that when we buy a festival, our expectation is that it is going to be accretive to our business within the second size of our festivals after we buy -- so often when we buy a business, because the planning for the next festival are already well underway. There is a limited amount of impact which will impact it, but the limited amount again by the cycle after that we’ll have our sponsorship team our ticketing organization, our operations team totally working alongside the acquisition to make sure that we’re getting to that accretive level.

Great thanks and congrats on the year.

Thank you.

And we’ll take our next question from Vasily Karasyov with Sterne Agee.

Thank you. Good afternoon. I was wondering if you could give us a breakdown of the adjusted operating income growth in this sponsorship and advertising segment. What percentage of that is organic meaning it grew not from its positions, but what you had prior to the year start? And how dependent are you on continued acquisitions of festivals, promoters and so on in order to see this growth rate sustained into the future?

Our $300 million in advertising sponsorship revenue I don’t know off the top 95% of that is organic. You have -- the scale that we already have when we do a bolt-on like C3 or we -- which is not in last year's numbers anyways. But when we do a bolt-on or addition, it’s adding some incremental tickets and some incremental volumes on our quest to continually go from 5,000 shows to 22,000 shows to 30,000 shows. But our high margin advertising business has been growing at double-digits off its base organic business.

And do you feel like you still have headroom to go in terms of growth there on organic basis that does that we’re not monetizing it fully right now or you depend on growing attendance?

No we think we have if you do simple math and you say how big is the size of the price various reports will tell you that there’s $18 billion, $20 billion spent corporate America on sports and music. So break that down and give you somewhere in a $1.5 billion to $2 billion spent in the music space. If you look at the size of our business and we’re generating $300 million out of the $1.5 billion we know that we don’t have to go compete against NBA or Sport. So our main line advertising just to get a bigger piece of that advertising space, but it is dedicated to music. A key function of that is we’ve been doing very well over the last many net multiple years. And just to keep adding incremental ad units so staying out with the market. So nine years ago was a sign in amphitheater and then we elevated our staff and started selling strategic deals. And then we hired a digital team and started building an ad network and then last year we started monetizing our content and this year we started mobile advertising. So we think we got a 400% plus sales team so we got a group credible diverse set of skills there. They know how to sell content and how to sell digital and how to sell strategic and local and we think our assets are still undervalued and we will continue to be able to roll that high margin business as one of the core drivers of our business in terms of no capital required just monetizing the scale.

Very helpful. Thank you.

And we’ll take our final question from Martin Pyykkonen with Rosenblatt Securities.

Yeah, thanks couple of quick things, Joe you mentioned a few things in terms of outlook for the New Year, but I was wondering if you could kind of considering you have visibility obviously in the festivals you might buy and touring that things that haven’t been announced obviously. Can you project any mix by venue Q2 and Q3 and Q3 in particular in that what extent that might vary from 2014 if at all and unless I missed it, I don’t think there was any specific comments about the EDM segment, is that something you expect to be up this year in 2015 and any way you can scope any magnitude even if it’s not on official number. Thanks.

Yeah I’ll give you kind of a general on the pipe, every year we always say that we have such scale that while I’ll be sitting here in a year from now telling you that I had 22,000, 23,000 shows, yes. We have no fear that our global staff are the best at it. We’ll continue to get our share of the market and slightly more. Last year, we had an exceptional in the U.S. only an exceptional stadium year. Had a lot of big stadium tours out last year. We don’t see that repeating this year. But we’re already seeing a much stronger arenas business this year, because the artist have decided maybe I’m not going to go in stadiums, but I’ll do longer U.S. states will come to life. I think you’ll also see some artist debate whether with the FX cost and the cost of business that they do a few more shows in America versus traveling overseas. So we would look at the pipe it will be consistent from a show count, total ticket number year-over-year we see it still being given again it was a record year this year, which would be the record year the year before. So the benchmark continually gets higher, but we think we will repeat history. We think we’ll have a strong arena market this year. We think festivals in Europe will be stronger this year than last year. And we think the EDM business, we have continually within Somiak taken a very disciplined approach to how we grow Electric Daisy to main festival in Vegas. We launched one last year in Mexico. We launched one in London. We’ll continue to launch a few more of those on a global basis this year. And we continue to think EDM is a great channel and to be in the portfolio and it’s providing some great advertising sponsorship opportunities as well as in 2015 the first year we’ll officially move in Somiak all over to the Ticketmaster platform. So we start to get the double benefit of feeding the ticketing and advertising pipe.

So you characterized EDM just out of the words of your mouth, but the demand is still vibrant as far as the end market, I mean there’s no concern from you sampling on that part and sounds like?

No I would characterize it as I think it’s a strong, stable, global business, but the reality of EDM is when you’re not hitting mainline arena stadiums and festivals like country, rock and roll, pop and urban it's always going to be a small percent of our total business, because it’s more about 10 great festivals of summer that matter versus 4,000 shows that happen across America that matter. So great small niche business, but given it operate kind of outside of the traditional venue platform, it allows to be more eventism and smaller to the total business.

I just had one quick question on ticketing, not so much again in number. But as you look at secondary ticketing revenue mix, I’m assuming in your plans you would have that increasing as a percentage of mix over time. Should we be thinking of that as margin neutral or margin accretive or margin negative in terms of mix or secondary ticketing revenue relative to primary ticketing revenue over a multiple quarter few year time period?

I would think of it as fairly margin neutral it’s the same overall business concept is primary, which is we got some cost of acquiring rights that selling ticket season have service fees around the same 20%ish and you got operating cost against that to put you in low 20s kind of AOI rate. So there’s nothing structurally different between primary in terms of the pipes of margin you should see.

Okay. Thanks.

And ladies and gentlemen this concludes the Live Nation Entertainment fourth quarter and full year 2014 earnings conference call. You may now disconnect.

Thank you.