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 Second Quarter 2013 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 measures 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. Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.

Good afternoon. Welcome to our second quarter conference call. We had great results for our second quarter with all our core businesses performing well, setting us up for what looks to be a record summer. Starting with the top line, our revenue was up 8% for the quarter, driven by growth in our Concert position. Looking broadly at consumer demand for Concerts, we have seen double-digit growth in concerts at both Live Nation and Ticketmaster on a global basis, reconfirming the quality of live artist on the supply side and strong fan desire to attend live shows as a top entertainment option. At the same time, we continue to build share, with ticket sales for our Concerts up 26% through June. We're also continuing to drive AOI growth at even faster rates than revenue. AOI was up 10% in the quarter, and free cash flow also up for the quarter, along with higher free cash on our balance sheet. As I did last quarter, let me give you an update on the 5 strategic drivers that we believe will deliver our 2015 AOI and cash targets. First, growing market share in concerts and tickets up by 5 million tickets. If you can tell from my opening comments, this is shaping up to be our strongest concert season ever. We've already sold 2 million more fans at our shows this summer than last year at this time, with double-digit growth expected for this year across festivals, amphitheaters and arenas. We're seeing this growth from both the artist and fan side, with show count growth from clubs, amphitheaters and arenas, while also increasing the attendance per show at all of our venues. As a result, I expect us to achieve our 5 million incremental fans by 2014. In addition to this organic…

Thanks, Michael. First, Concerts. Live Nation Concerts revenue for the second quarter was up 11%, and AOI improved by 18% versus 2012. The second quarter performance was driven by an 8% increase in global attendance with a 4% increase in attendance per show. And as Michael noted, concert ticket sales for all shows this year is up 26% from this point last year, with 23 million tickets already sold for shows in the second half compared to 15 million at the end of June 2012, a 50% increase. Taking this by market. First, our international markets increased attendance by 23% in the second quarter. This was driven by strong stadium tours with Bruce Springsteen, Vasco Rossi and Depeche Mode across Europe in the quarter. And going into the second half, we expect continued solid attendance growth led by our arena business. This is highlighted by our P!nk tour in Australia with 42 shows for over 500,000 fans, along with Fleetwood Mac, Bruno Mars and Rihanna, all leading major international tours. In North America, attendance was flat for the quarter with strong growth in festivals offset by fewer arena and stadium shows. As we head into the third quarter though, we see very strong growth in both the amphitheater and arena businesses, with show count and attendance per show up. At this point, we have already had 9 artists sell over 500,000 tickets for arena and amp tours in 2013 led by Maroon 5, Beyoncé, Kid Rock, One Direction, Luke Bryan and Jason Aldean. As we've discussed, our other global priority is festivals. In this year, we expect to grow our festival base by over 20% to more than 4 million fans attending 67 festivals across 15 countries. We continue to see strength in our traditional rock and pop based festivals…

Thanks, Joe, and good afternoon, everyone. I will now provide more details about our results for the second quarter and year-to-date and then discuss the rest of 2013. For the second quarter, revenue was $1.7 billion, up 8% over the same period in 2012. This growth was driven by Concerts improvement of 11% from increased shows and attendance in Europe, as well as higher activity in other global markets including Australia and new revenue from acquisitions. Adjusted operating income for the second quarter grew 10% to $160 million as compared to $146 million in 2012. All of our core segments contributed to this increase. Concerts AOI increased 18% from higher show count and attendance in Europe and Australia. Ticketing AOI for the quarter was up 9% from growth in international Ticketing markets, including the U.K., Ireland and Australia. Sponsorship & Advertising AOI grew 10% from higher online advertising, along with new sponsors. Operating income for the quarter was $98 million compared to $43 million last year. This improvement came from our higher AOI, as well as a $30 million gain on disposal of assets in our Concerts segment during the quarter. This gain is from the sale of our New York theater where we netted $22 million and also from insurance proceeds relating to the rebuild of Jones Beach in New York that was damaged by Hurricane Sandy last year. Net income for the quarter was $58 million compared to $8 million in 2012. Year-to-date, revenue was $2.6 billion, up 8% over the same period in 2012. Concerts, again, was the main driver of this growth with an increase of 12% over last year due to higher show count and attendance internationally, revenue from acquisitions and higher global touring activity. Sponsorship & Advertising was up 14% year-to-date, with an increase…

[Operator Instructions] And we'll take our first question from John Tinker with Maxim Group.

Could you just -- you mentioned some areas were growing organically, the rest from acquisitions and others. As we try and figure out your growth rate, what -- how should we think about the size of acquisitions on that?

John, you're a little muffled there, but I think you were asking about acquisitions versus organic in general, you're talking? Are you talking on revenue ticket count? What parameters are you talking there?

[indiscernible] international acquisitions, and I'm trying to figure out how much of those helped your growth rate in terms of -- so what's organic and what's acquisition driven?

Got it. I think in general, if you look in 2013, things like Hong Kong and Singapore, our small acquisitions are just basically hirings. 2013, generally 100% of our AOI is organic. We have not added anything incremental from an acquisition perspective at this point. So we really haven't made any acquisitions over the last year of substance. Most of the expansions are low-cost entries. Insomniac is a -- while we did acquire, but we didn't have any of those effects on their business in the last quarter since we closed late.

You mentioned that you still have a low share in the secondary ticket marketing business. You're quantifying about $4 billion. As you go out 2, 3 years when the new technology kicks in, the rebuilt Ticketmaster, what might be a kind of number we could start thinking about? Or is it possible to quantify that yet?

Well, we're not going to give you hard guidance on that. But we say triple, we're somewhere, I think, in some of our presentations we've showed you with our current NFL Exchange and TicketsNow and other fragmented pieces, we have somewhere in the low digits. So we expect that we should be able to capture 20% to 30% of the secondary business over time.

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

Just looking at the metrics on the Concert business, I mean, certainly one of the big upside surprises in the quarter was international, both in terms of the number of events. I mean, attendance was up huge, and U.S. -- North America a little more flat. But as you go into the seasonally important third quarter and you look -- you've already talked about the ticket sales, how do those 2, in terms of number of events and sort of estimated attendance, how does that look sort of big picture for North America versus international third quarter year-over-year?

Well, let me just back you up. On a -- I want to make sure we get the credit here. As you know, a year ago, we talked about some changes in management over in Europe, and it was a focus for us to get the right leadership on the Concerts side with John Reid put in place. And he's done a fabulous job of rallying the troops and making sure we buy smarter, sell more tickets, get rid of the risk in the portfolio, some of the festivals and events in some of the markets like Spain and that, that weren't performing. So a lot of it has to do with just the execution of the team. When you look at a macro perspective, I think we've alluded to it in North America is going to have a very strong year as we finish Q3 in the amphitheaters. I think at the year, on a holistic perspective, North America is going to have an out-at-the-park summer and Europe will have continued year-over-year growth. But North America will be the star kind of, of the 2 when the season's over. But international has, as you've seen, bounced back and will hold that bounce for most of the year.

Yes, because, I mean, as a follow-up, Michael, you've talked about culling the number of festivals in Europe, at least you talked about that last year after the third quarter. I mean, is that going to impact international at all in Q3?

No. I mean, we -- the ones we canceled, we either added a better one or more importantly, just focused on the great stars that we have. When you have festivals like Reading and Leeds and Download and T In The Park, some of the, let's call them, the Coachellas of Europe, you're much better off spending a few extra dollars and time figuring out how to sell more tickets and sponsorship to that than driving some of the riskier ones. So we think the overall, our festivals will be stronger with the current portfolio, and there'll be no effect from the ones we canceled on a total basis from an operating [ph] perspective.

Okay. And just finally then, I mean, the margin on the concert business in the second quarter, I mean, it's a record for a second quarter as far back as my numbers go. There may have been a higher number somewhere farther back. But I mean, the margin improvement in the Concert segment, which is a big source of leverage for you, seems to be -- have great momentum right now. That's always a little tricky in the big third quarter. But I mean, any thoughts on guidance there?

Well, as we said, we do expect to see margin expansion in the Concerts business over the course of this year. In totality, as you said, a lot of it driven by Q2 and even more in Q3, particularly off of what Michael said in terms of having not just continued strong performance internationally, but having North America come along similarly in Q3.

[Operator Instructions] And we'll take our next question from Martin Pyykkonen with Wedge Partners.

Two questions, one on the EDM opportunity. I know you mentioned the 17 festivals across U.S. and Europe, and I know this is still early and it's a relatively new burgeoning segment. But any comment you can make in terms of how much runway headroom is still out there to add festivals without saturating the market or getting diminishing returns? Just curious your sort of best guesstimate, if you will, on that. And then secondly, I know this is a long way off, but last year coming into the deep fall winter turned out to be a pretty good period relatively speaking, and I'm wondering if you have any kind of read on that based on who you're talking to, what artists may be thinking about and sort of the heartbeat of that as I was mentioning about the Garden reopens in full force. I know it's going to open in the winter last couple of years. And then you got the new venue of the L.A. Forum, which for better or worse, MSG certainly looks at that as a new additive venue, not displacing business from the Staples Center. I'm just curious if you agree with that and if you see the opportunity to fulfill a pretty strong pipeline of artists in there? I know the Eagles start out, but looking beyond that?

All right. That's a handful. I'll start with -- EDM has a great global runway. I mean, we're nowhere near saturation. This is the music of today's youth. There's some great festivals out there in Vegas and New York and et cetera, but huge, huge global demand. You look at things like -- markets like Canada. Montréal, Vancouver, Toronto don't even have an EDM event of this scale yet. Lots of smaller ones, but not scalable yet. So we look at Latin America, Europe, Asia, huge opportunity. We have had a flurry of opportunities and calls from around the world with people very interested to launch a Hard, Creamfield or an Insomniac-branded event. So we think we're at the start of the runway. We think we have, by far, the most cohesive best management team in the world, running it with James Barton from Creamfields, Pascal from Insomniac and Gary Richards from Hard. So we're not looking to have 10 or 12 companies running our strategy. We're looking for a small handful of what we think are the strong brands that have global expansion. The second piece of that runway that's just ready to explode is it's really not been broken by mainstream Madison Avenue yet. So again, my sponsorship team would tell me when they're out talking to the CMOs, one of the biggest question they get is how do we get into EDM, how do we get to that youth market. So we think sponsorship has a huge opportunity, and we think ultimately, the other piece that we'll bring to the equation as our new platform comes to life is most of EDM is not ticketed by Ticketmaster. It's ticketed by more small, independent sites. And we think as we build out a proper EDM white label opportunity…

So just to clarify what I think you said on Sponsorship & Advertising revenues, we see it reported, it's pretty negligible what you've actually gotten in that revenue line from EDM at this point. But again, a lot of upside and runway?

Yes. But to date, it would be less than 1% of our sponsorship revenue might be EDM related, if that. So huge runway.

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

All right. Thank you, everybody. Have a great summer, and we'll talk on Q3.

Ladies and gentlemen, this concludes the Live Nation Entertainment Second Quarter 2013 Earnings Conference Call.