Michael Rapino - Live Nation Entertainment, Inc. Joe Berchtold - Live Nation Entertainment, Inc. Kathy Willard - Live Nation Entertainment, Inc.

Amy Yong - Macquarie Capital (USA), Inc. David Joyce - Evercore Group LLC Brandon Ross - BTIG LLC John Tinker - Gabelli & Company Douglas Middleton Arthur - Huber Research Partners LLC

Good afternoon. My name is Tom and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the Live Nation Entertainment First Quarter 2017 Conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' 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 forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, new developments and similar matters. Please refer to the Live Nation 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 actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided a full reconciliation of 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. Please go ahead, sir. Michael Rapino - Live Nation Entertainment, Inc.: Good afternoon and welcome to our first quarter's conference call. Live Nation has continued growing its business in 2017, with first quarter revenue up 17% and AOI up 25%, with strong operating performance across all our concert, advertising and ticketing segments. This year, we have booked more shows, sold more tickets and have more sponsorship commitments than ever before at this point of the year. With the strength of these leading indicators, I'm confident we will once again deliver record top line and AOI performance in each of our businesses in 2017. The global concert industry is structurally growing, with strong tailwinds for both supply and demand. On the supply side, artists are touring now more than ever as live as their primary source of income. And on the demand side, between the millennial shifting of spend to experiences and the globalization of artists on social media, we see continued long-term growth as fans attending more concerts. And as of May 1, we are seeing this trend in our results, as we have booked over 4,000 arenas, stadium and amphitheater shows for 2017, up 10% over last year. This growth has led to arena and stadium shows up 18% and 32% respectively. And as a result, tickets sold through April for our concerts this year are up 25% to 46 million tickets. Along with the strong show and ticket count increase, we expect to continue driving the profitability of our concert business through increased on-site spending. This year we have invested to add more points of sale and continuing to refine our product assortment and pricing to drive fan satisfaction and sales. As more of our venues and festivals become Wi-Fi connected, we are seeing increased per fan spend through services such as seat order delivery, and we continue to scale up this summer with this service. Looking globally at the concert business, we now promote shows in 40 countries, as we continued reaching more fans in more markets. Our promotion business in Germany has been particularly successful. Having launched Live Nation Germany just one year ago, we now expect Germany to be our Number 2 market in Europe in 2017, with 1.5 million fans attending our shows. With all parts of our global concert business looking strong this year, the concert segment continues to be the engine that powers the Live Nation flywheel strategy, growing the profitability of the concert business, while also driving our advertising and ticketing business. In our advertising and sponsorship division, we continue to see strong brand demand for our 70 million-plus on-site audience, driving double-digit growth in our advertising business. As of May 1, we have commitments for over 80% of our planned advertising inventory for the year, pacing double-digits ahead of last year. We expect double-digit growth in festival sponsorship this year. And with over 80 festivals, it remains a top channel for brands to engage with their customers. And on our top client brands that spend over $1 million in advertising, we continue to see their increased spend, which now accounts for 75% of our total spend, and we see pacing in double-digits through April. We're also seeing increased demand for concert video content. In addition to announcing Twitter as our latest partner in streaming live concerts, we have captured four concerts in VR in partnerships with Hulu and NextVR, and last week we premiered the Live Nation-produced Puff Daddy documentary, Can't Stop, Won't Stop; The Bad Boy Story at the Tribeca Film Festival, and now being distributed by Apple. Collectively, this content provides us with an array of additional ad units and provides valuable marketing for our tours. Taking this all together, I expect us to again deliver double-digit AOI growth in our advertising business. In our first quarter, Ticketmaster delivered its largest quarter in history for GTV and ticket volume on a transacted basis. Our growth in this quarter came from both fee-bearing primary and secondary business, with GTV up 18% and 20% respectively. Our success starts with continuing to build our venue client base. In the first quarter, we added 245 new clients, providing them with the most effective software platform for their ticketing needs. On the commerce side, we began by attracting more fans to our sites, and in this quarter, we increased online business by 10% year-over-year and grew app installed base by 41% to 33 million. And once these fans come to our site or app, our investments to-date to improve the experience and purchase flow are driving higher conversion rates and increased sales for us. Other major initiatives we launched this past quarter is a new product called Fan Verified (sic) [Verified Fan], which leverages proprietary data and analytics to screen and verify potential ticket buyers, so we increase the likelihood that real fans will purchase tickets to artists' shows. We've now supported over 30 tours including Depeche Mode, Twenty One Pilots and Harry Styles, as they seek new ways to help get the tickets in the hands of real fans. This program has been highly successful in reducing by over 90% the number of tickets that have been sold on the resale market. With this strong start to the year, we expect another record year in ticketing. And overall, we see 2017 on track to deliver another year of record growth. All of the leading indicators for our concert, sponsorship and advertising business are ahead of last year and we expect our business to deliver record results. With that, I will turn it over to Joe. Joe Berchtold - Live Nation Entertainment, Inc.: Thanks, Michael. Looking at the business segments, first concerts, revenue grew 16% in the first quarter at constant currency, while AOI was down. This revenue increase was driven by growth in fans attending our shows up 22% to 10.9 million, with higher arena and stadium show count both in North America and internationally. AOI was down in part due to our higher cost structure for our concerts business, as we've scaled up our promotions and on-site product teams. We expect to benefit from this investment and the increased activity that will play out in the second and third quarters. To that point, as Michael said, we've already booked over 4,000 amphitheater, arena and stadium shows this year, up 10% from this point last year. And once again, we're promoting the vast majority of the top global tours, led by six tours, each already selling over 1 million tickets so far this year, including Coldplay, U2, Bruno Mars, Depeche Mode, Guns N' Roses and Metallica. We're also continuing to build our global festival portfolio, and this year we expect to hold 96 festivals, increasing our attendance to over 8 million fans. Our international markets continue to have a very strong lineup, and we expect to have 9,000 shows with more than 25 million fans in 2017, continuing to demonstrate the power of promoting artists in 40 countries around the world. From a timing standpoint, part of our ticket sales to-date are driven by the typically earlier on-sale timing for arena and stadium shows. For the full-year, we expect to deliver mid-single digit growth in both show count and attendance. Q2 looks to be particularly strong for both show count and attendance this year, thanks to these arena and stadium shows and some timing of our major festivals. And overall, we're delighted thus far with 2017 continuing to grow our concerts flywheel this year. Turning to our sponsorship and advertising business, revenue grew by 13% and AOI grew by 10% for the first quarter, both at constant currency. Over 85% of our advertising AOI is typically recognized in the second through fourth quarters, so it's our committed sales pipeline that is our key leading indicator for the business at this point, and as Michael noted, 80% of our business expected for the year is already contracted and we're tracking double-digit ahead of this time last year. Finally, Ticketmaster, for the quarter, revenue was up 23% and AOI was up 25%, both at constant currency. Fee-bearing GTV was up 18% to $3.7 billion globally at constant currency and our primary fee-bearing GTV was also up 18% at constant currency, as we increased ticket sales by 11% and pricing was up 6% on average. Both North America and international markets grew ticket volume similarly, with North America up 10% and international up 11%. Not surprisingly, given our comments on a strong quarter for concert sales, our concerts segment drove approximately 60% of the ticket volume growth and 70% of the primary GTV growth for the quarter. In secondary, we grew our GTV 20% for the quarter at constant currency, our 12th consecutive quarter of double-digit growth. Here two concerts were the primary growth driver accounting for 70% of the increased GTV. Michael pointed to the continued success Ticketmaster is having in attracting more fans to our sites and converting these visits to sales. And one additional point I want to make is on the continued growth of our mobile platform, as we further improve our mobile online experience in apps and we're increasing our traffic, app installs and conversion. And as a result, mobile ticket sales increased 39% year-over-year for the quarter, and overall mobile sales now represents 30% of our global ticket sales. Looking at the full year for ticketing, we expect the first quarter will be our best in terms of year-on-year comparisons, given the volume of concerts we put on sale. Between this strong first quarter and continued success attracting and converting buyers in both primary and secondary ticketing, we expect to deliver a mid- to high-single digit AOI growth for the year. And in summary, four months into the year, given the strength of all our leading indicators, we're confident that we will deliver record results in 2017. Our flywheel business model is working. Our first quarter results were driven by our ticketing business, notably from selling more tickets to more concerts. And in Q2 and Q3, we will see these concerts play-out, driving our high-margin, on-site and advertising businesses. On to few specifics, looking at seasonality, we expect Q2 to be a strong concerts quarter as I noted, and so AOI at a bit higher percentage of our full-year AOI than last year. And on FX, we saw a 1% to 2% impact on the business in Q1. And based on rates today, expect Q2 to be about the same. I'll now turn the call over to Kathy to go through more on our financial results. Kathy Willard - Live Nation Entertainment, Inc.: Thanks, Joe and good afternoon everyone. As I mentioned last time, we are now reporting three business segments starting this quarter; concerts, sponsorship & advertising, and ticketing. We have combined our previously reported Artist Nation segment into concerts, based on our view that the strategy behind artist management is to provide a full range of services related to concert promotion and to expand our concert businesses. We have also slightly changed our definition of free cash flow this quarter, now titled free cash flow adjusted, in order to reduce confusion with other similar measures and to recognize it as a liquidity measure tied back to cash flow from operating activity. Our key financial highlights for the first quarter of 2017 are revenue was up 19% to $1.43 billion, and AOI increased 25% to $92 million, both at constant currency. Free cash flow adjusted was $27 million. Free cash flow would have been $29 million under our prior calculation, so the difference is not significant. As of March 31, our total deferred revenue related to future shows was $1.6 billion, up 34% compared to $1.2 billion last year. Growth in concerts and ticketing drove the revenue increase for the quarter. Concerts revenue was up 16% from higher show counts at stadiums and arenas, and ticketing revenue was up 23% from the increased primary ticket volumes in GTV, driven by concert events, as Joe outlined, all at constant currency. AOI for the quarter was up 25%, driven by strong growth at Ticketmaster, with ticketing AOI also up 25% for the quarter, and sponsorship & advertising AOI was up 10% from the increased online advertising, all at constant currency. Operating loss in the first quarter was $21 million, an improvement of 36% from the same period last year, and net loss was $33 million compared to a loss of $45 million in the first quarter of 2016, driven by the higher AOI. Moving to our key balance sheet items, as of March 31, we had total cash of $2.2 billion, including $671 million in ticketing client cash and $1.2 billion in net concert event related cash, with a free cash balance of $374 million. Cash flow from operations was $761 million compared to $517 million in the first quarter of 2016, with the increase driven by higher event-related deferred revenue. Free cash flow adjusted was $27 million in the first quarter of 2017 compared to $25 million last year on the same basis. Our total capital expenditures for the quarter were $57 million, with maintenance CapEx of $25 million and revenue-generating CapEx of $33 million, compared to a total of $25 million in the first quarter of 2016, with the increase driven by technology and venue enhancements. We currently expect total capital expenditures of approximately $220 million for the full-year 2017, with approximately 50% of that to be used for revenue-generating CapEx. For the full year, we estimate we will record approximately $60 million of accretion related to redeemable non-controlling interest. And lastly, as of March 31, our total net debt was $2.3 billion and our weighted average cost of debt was 3.8%. Thank you for joining us today and we will now open up the call for questions, operator.

Thank you. And we'll take our first question from Amy Yong with Macquarie. Amy Yong - Macquarie Capital (USA), Inc.: Thanks. Two questions, one on guidance, and then one on ticketing. Joe, can you clarify your comments on guidance? Did I hear that AOI is going to be up mid-single digits? It just seems like with a 1Q beat and a seasonally stronger 2Q and 3Q, that it would imply a more dramatic slowdown in 4Q. So I just want to make sure I got that correctly. And then on the ticketing side, I think one point of investor concern continues to be competition on the secondary market. And given kind of what you've been able to accomplish, can you just point to some of the things that you're doing that separates you from your competitors? And then out of the 40 counties that you're present in, can you remind us how many ticketing platforms you have and if this is a bigger focus for you? Thank you. Joe Berchtold - Live Nation Entertainment, Inc.: Sure. I'll start with the guidance point, Amy. I was talking about the ticketing segment when I was talking about that point, which was that it's been a very strong Q1, because it was disproportionate to arenas and stadiums which tend to go on sale early. So it drove a very high Q1 performance. And then I was just saying, some of that for ticketing segment, not the overall business, was going to balance out for that guidance. Michael Rapino - Live Nation Entertainment, Inc.: Amy, on ticketing. On ticketing, Amy, I mean, I think our numbers speak for it. We are continuing to grow our secondary business. That's pretty much a two-way race in ticketing. And as we've quoted before, Ticketmaster, historically was late to this party, and we've been making – the pie has been getting bigger and we've been increasing our market share continually year-over-year. And we're going to continue to do that for one reason, we have incredible primary scale at our store. So we have lots of customers that are going to come on a on-sale looking for a ticket in primary, that for 38 years we had a closed store, and now we have, most of the times, we have a secondary ticket option for that customer. So the more inventory we keep activating at our store called tm.com is how we're going to keep growing our GTA, more and more sports teams, venues and artists are adopting the idea of having a secondary option available in the primary purchase flow. So we think we have more inventory to activate and the double-digit growth we've been expensing year-over-year, we would expect secondary growth to be a strong growth driver for years to come. Second point is, we're only getting started in the European global side of the business, where we're seeing great growth, where we weren't last to get to the market, in most of those cities, Londons and UKs and Germanys, we are first or it's a still very new market that we're entering. So we think we have a lot of runway on a global basis to grow secondary business. About 40 countries we promote in, we would be in about 29. But let's call it 15 to 16 of strong ticketing markets right now for us. So you could see that there's great opportunity to keep driving ticketing growth through our content business in those 40 markets. Joe Berchtold - Live Nation Entertainment, Inc.: Yeah, and Amy, I would just point to Germany, I think it's a great example of how we think about the flywheel working with ticketing, which is we had an offer of ticketing business in Germany, but it wasn't a real substantial one. As we have gone into the promotion side there in a big way, and as Michael said, our Number 2 European market now, we're able to drive a lot of those tickets to the Ticketmaster business, which builds the brand, establishes it, helps to get other clients, and now has a much more – we now have a much more substantial business in Germany. So that's the model we like and we we'll continue to look for opportunities to replicate that. Amy Yong - Macquarie Capital (USA), Inc.: Thank you.

And we'll take our next question from David Joyce with Evercore ISI. David Joyce - Evercore Group LLC: Thank you. Couple of questions. Just help us understand your domestic versus international split. If you could talk about how much of your ticket sales – the number of tickets sold domestically versus internationally both on fee-bearing and non-fee-bearing, just to get a sense of that geographic split? And then also if you could provide some thoughts about how much of the sponsorship and advertising is domestic versus international? Thanks. Joe Berchtold - Live Nation Entertainment, Inc.: Sure. Just on the tickets, first of all, what I said was is that North America is up 10%, international is up 11%. So, they're both up. That's the fee-bearing tickets, they're both up strong this quarter. We haven't historically broken out the non-fee-bearing. They tend to be much more North America driven, because they're tied in with season tickets. But that's not really obviously a material driver of our economics. And then on the sponsorship side, we don't give exact breakdowns, but over the course of the year, it's kind of a two-thirds:one-third, 60:40 type of split on the sponsorship, which pretty much aligns with our overall concert business split. David Joyce - Evercore Group LLC: Okay. If I could just add another separate question, where are you in the integrating Amazon as a ticket selling partner? Michael Rapino - Live Nation Entertainment, Inc.: Well, in the UK, where it has always been an allocation market, we would be feeding them some tickets, I think maybe 3%, 4% tickets, most in the UK, allocates out to a host of retailers. So we would be doing that and allocating across multiple platforms. Ticketmaster is still selling the large majority of the tickets, but then we allocate out to lots of retailers in the UK. So that would be the only market where Amazon would be selling a few tickets. In the rest of the world, we continue to look at our APIs, top partner strategy, from Groupon to Spotify to other partners and we'll continue to look at the right incremental partnership. David Joyce - Evercore Group LLC: All right. Thank you.

We'll take our next question from Brandon Ross with BTIG. Brandon Ross - BTIG LLC: Hi. Thanks for taking the question. So taking a step back and kind of a follow-up to David's question there, how do you think in today's world about distribution of tickets to best serve sports teams and artists? Your willingness to work with Amazon seems to indicate that you think it makes sense to decouple the front-end, the retailing portion, from the back-end, the enterprise level? Michael Rapino - Live Nation Entertainment, Inc.: Yes. Brandon Ross - BTIG LLC: And would you consider letting StubHub plug into sell Ticketmaster tickets? Then I have a couple others. Thanks. Joe Berchtold - Live Nation Entertainment, Inc.: So, take that in a few pieces, Brandon. So first of all, we absolutely think of our business in two pieces as providing that enterprise software solution on the clients, and secondly as providing the e-commerce and selling the tickets. So, just organizationally and thinking about the business, we've absolutely thought about we have two missions, and we have to be great at both missions to ultimately achieve the market share and the positioning that we want to achieve. I think specifically on the commerce side, as you said, taking a step back, Ticketmaster's job is to sell every possible ticket for its sports teams, artists and other content. So the first step in that is our creating the best possible sites, online and mobile, that attract and convert fans. And Michael talked and gave some statistics around the continued success we're having in buildings that. And then the second step is finding additional sales channels to sell incremental tickets. And we've been doing this forever in the Ticketmaster business called Affiliates. It's the technology that now changes and makes that look a little bit differently. But the affiliates that we have today and the ones that we use our API with, the ones like the Facebooks and the Bandsintown, they act as marketing leads for us to then transact the tickets. And our studies have absolutely shown we drive incremental sales through those marketing leads. And then the second step for us is we're looking at other commerce sites that we're confident will sell incremental tickets generally against a different database, a different customer that they can reach on some sort of advantaged basis generally with a different value proposition. And I think Groupon is our most successful example here, where they've gotten a different ticketing offer to a different customer, and again, track and analyze the highly incremental sales force. So I mean rather than give a specific answer about any other specific player, really the point is, if we are convinced that we can sell incremental tickets for our clients, then we will look at any platform. But that is the basis by which we make that assessment. Brandon Ross - BTIG LLC: Great. And then for Verified Fan seems to be pretty successful. Just a point of curiosity, why not use Facebook login for that and kind of let them do the work for you, since they're so proactive in cutting down who's a real person and who's not? Joe Berchtold - Live Nation Entertainment, Inc.: Sure. Absolutely, we use the social profile as part of it. The challenge is that they're continually having to scrape and delete false accounts as well. And in the rush of an on-sale or over what could be a day or so, you don't want to be dependent on any single point. So we'll take a social sign-in along with other data, put it against our proprietary database against all of our fans, all of our fan data, and use our own scoring system to try to create what we think is the most fair, best way to get the tickets to the fans. And then I would also say that it's going to be a continually evolving process, because once the scalpers figure out your algorithm, if they can back into it, you have to update it, change it and continually renew it. Brandon Ross - BTIG LLC: Great. And then just more of a housekeeping, on the guidance. The same guidance for overall AOI, is that still in line with historical rates as you said on the prior call? Joe Berchtold - Live Nation Entertainment, Inc.: No. So, I don't think we've given guidance for the overall business. We gave guidance on sponsorships that that will continue at historical rates, and on ticketing, that will be mid- to high-single digit AOI growth. I think those are the two pieces we've given guidance on. Brandon Ross - BTIG LLC: Thank you very much for the questions. Joe Berchtold - Live Nation Entertainment, Inc.: Thanks, Brandon.

We'll take our next question from John Tinker with Gabelli. John Tinker - Gabelli & Company: Hi. Thank you. Just couple of quick questions. You've mentioned Germany a couple of times. I noticed that CTS Eventim, they still refers to themselves as the European market leader. Given you've had an interesting history with them, what's your sort of relationship with them there, and would it be fair to discuss what you sort of think your market share is in Europe overall? Michael Rapino - Live Nation Entertainment, Inc.: Always fun, John. I haven't looked at their latest data. They're obviously Number 1 in Germany. That would be the only place that they would be Number 1 in. We would be Number 1 across Europe on concerts and I would assume total ticket sales. But regardless, we're in 40 countries with scale and they are a very strong German company with some market expansion through Europe. But we're competitors. We compete on the concert and the ticketing side. Good news is the pie is growing for everybody. So I assume they're doing well, and we think we can pick up a lot more share in Germany and the rest of the world, regardless of what their activity is. John Tinker - Gabelli & Company: And since I noticed that I think you resigned with Jay-Z, but it was very much positioned as a purely keeping involve – been able to – as the strongest company been able to pay the most to keep the best talent, and the 360 deal, is it totally over? Michael Rapino - Live Nation Entertainment, Inc.: Yeah, we never officially talk whether we renewed Jay or not. That's just good speculation post that was running. But for the record, yes, we are not in the 360 business; we haven't been for years. We're in the long-term securing touring business. And Jay has been an incredible partner of Live Nation. And we hope to be in the Jay-Z, and assume to be in the Jay-Z touring business for a long time, where we both can do what we do best. John Tinker - Gabelli & Company: Thanks.

And we'll take our next question from Doug Arthur with Huber Research. Douglas Middleton Arthur - Huber Research Partners LLC: Yeah, thanks. I know you're not breaking out Artist Nation anymore obviously, but can you, Kathy, can you talk at all about the impact that had on the combined entity now? Was it up, down, flat? That would be helpful. And then second, Joe, in terms of the second quarter being stronger than normal, can you discuss any impact that would have on the third quarter? Thanks. Kathy Willard - Live Nation Entertainment, Inc.: Doug, we can't really break it out since it's something we're not really providing. And just remember, as we've talked about it, it's really just there to drive the overall concert business, and you'll see that overall impact in the full year. Michael Rapino - Live Nation Entertainment, Inc.: But it wouldn't be marginally up or down to make a difference to the core numbers you're reading, Doug. Douglas Middleton Arthur - Huber Research Partners LLC: Okay. Joe Berchtold - Live Nation Entertainment, Inc.: And then on the Q2, Q3, I think the best way to frame this, Q3, look, the whole summer looks very solid, looks very strong, lots of growth. Q2, and frankly Q1 was – well, we talked about the big growth in attendance – is where we have seen and we are confident on the very high level of growth. We expect Q3 to be as good or better than last year. It's just that Q2 was even stronger. Douglas Middleton Arthur - Huber Research Partners LLC: Okay. Thank you.

And there are no further questions in the queue. So at this time, we'll go ahead and end today's conference. We appreciate your participation. Michael Rapino - Live Nation Entertainment, Inc.: Thank you.