Good day, everyone. My name is Justin, and I will be your conference facilitator for today. At this time, I'd like to welcome everyone to the Live Nation Entertainment First Quarter 2019 Conference Call. Today's conference is being recorded. 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 related 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 to 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 in the Financial Information section on Live Nation's website at investors.livenationentertainment.com. It is now my pleasure to turn the conference over to Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment.

Good afternoon, and welcome to our first quarter 2019 conference call. 2019 is off to a strong start with our highest first quarter AOI ever at $115 million and with revenue up 17% to $1.7 billion. Our Concerts and Sponsorship segments drove this growth, as both delivered record first quarter revenue and AOI. More importantly, we have now booked enough concerts, sold enough tickets and secured enough sponsorship commitments to be confident that Company will deliver double-digit AOI growth for the year. We continue to benefit from a global concerts industry that is structurally growing with strong tailwinds for both supply and demand. Our performance is further accelerated by our concert flywheel, driving additional profitable growth in our onsite sponsorship and ticketing businesses. Starting with the concert business, we had almost 15 million fans attend our concerts during the first quarter, up 22% year-on-year, led by our arena and theater shows, which are each up over 1 million fans. As a result, revenue was up 27% and we delivered our first positive AOI Q1 in our concerts business. This sets up the year well and through mid-April, we have sold 49 million for our concerts this year, up 5% year-on-year. At the same time, we have continued shifting to market based pricing, growing the use of platinum tickets. Looking at our front of house tickets, amphitheater pricing is up double digits this year, and both amphitheaters and arenas have seen an increase in pricing of over 30% across the past two years. Even with this improved pricing, we're not seeing any pullback in demand for concerts as sell-through rates continue to be strong globally, across arenas, amphitheaters and stadiums, and from the best seats in the front to the lawn seats at our amphitheaters. As we add fans, we continue…

Thanks, Michael. Looking at our business segments, first, Concerts. In the first quarter, Live Nation promoted 8,000 concerts for nearly 15 million fans worldwide, increases of 12%and 22%, respectively. Fan growth was strong across both North America and international markets, led in particular by arena, show count and fan growth, along with increased theater activity. Looking to the full-year, we expect to grow our fan base in both North America and internationally with arenas, theaters and clubs and festivals leading this growth. Our international markets are looking particularly strong, driven also by a resurgence of stadium shows for 2019, including such artists as BTS, Ed Sheeran and Metallica. In total, we expect overall fan growth for the year in the mid single-digits, which combined with our pricing initiatives and onsite spending programs we expect will deliver strong double-digit AOI growth for the concert segment. Turning to our Sponsorship and Advertising business. AOI was up 2% for the quarter and revenue was up 1%. Sponsorship is the only segment where we saw material effects impact in the quarter and excluding effects, AOI was up 7% and revenue was up 4%. Given over 85% of our sponsorship is recognized in the second through fourth quarters, it is our committed net revenue that is our most important indicator at this point of the year. And, as Michael indicated, our committed net revenue is up double-digits at over 80% of our target for the year. We're seeing consistent growth with both North America and international markets pacing double-digits ahead of this point last year as our both online advertising and sponsorship. And within Sponsorship, festival sponsorship per fan and revenue from strategic sponsors are both projected to be up double-digits for the year. This broad growth gives us confidence that we will deliver another…

Thanks, Joe; and good afternoon, everyone. Our key financial highlights for the first quarter of 2019, our revenue was up 17% to $1.7 billion, AOI increased 1% to $115 million and, as of March 31, our total deferred revenue related to future shows was $1.8 billion, up slightly compared to last year. The increase in revenue was driven primarily by Concerts, which grew by 27% as a result of increased activity in arenas and theaters globally, which also then delivered the increase in AOI for the quarter. Overall, our AOI for the first quarter finished stronger than what we had expected a few months ago due to a few items. In Concerts, globally, we had a large number of theater shows that performed strongly and we also saw a shift of some artists performance payments from Q1 into Q2. And in Ticketing, our ticket sales accelerated starting in mid-March, as Michael noted. Our operating loss was $24 million in the first quarter, driven by higher depreciation and amortization along with acquisition-related costs. And our net loss for the quarter was $52 million compared to $34 million in the prior year, as a result of the higher operating loss. For the quarter, accretion of redeemable non-controlling interest was $12 million. For the full year, we currently estimate that this accretion will be approximately $62 million with the remainder for the year fairly consistent across the quarters. For Q1, we had a negative FX impact on revenue and AOI of about 3%. And based on the rates now, we expect both to be impacted negatively by approximately 1% in the second quarter. Amortization of non-recoupable ticketing contract advances in 2019 is expected to be in line with the last few years of expense. Turning to our balance sheet. As of March 31,…

Thank you. [Operator Instructions] And we'll go ahead and take the first question.

Hi. This is David. As you noted, I think this your first quarter with a positive AOI in Concerts after posting modest losses going back at least to the Ticketmaster merger. How much of this is driven just by scale on higher attendance or there are other factors that have shifted in the business that now you're realizing a positive result in the first quarter.

Yes. That's all fundamentally driven by the higher attendance, David. As we said, we're very strong in arenas and theaters for the quarter, record attendance so that drove through to the higher performance, which then was supported by the pricing that we have which has higher flow through and just as we continue to scale the business.

Okay. And then in the theaters and clubs division, you've been fairly active over the past month in Southern California adding new venues, booking relationships, can you just talk about the strategic extension opportunities that you see in getting scale at such a local level and how much room is there to sort of repeat this strategy in other areas?

Yes. David, we've been talking about the diversity of our concert business both geographically, so our goal is to continue to be a global business. There are lots of countries, 42 we're in and many more cities where we want to keep building, whether it's our festival business, our concert business or our venue business. So those releases you see are just continual bolt-ons in markets like San Diego or Los Angeles or London or Paris where we see an opportunity to pick up a great promoter, pick up a venue. And as you know from our financials when we manage the venue, our per head margin increases. So we're always looking for opportunities to bolt-on pieces of the venue or promoter or festival business in markets around the world and you'll see that continue for years to come.

Okay. And then just on your ticketing result, can you say if there are any ongoing data breach expenses in the quarter? Is there any impact to margin at all from rolling out Presence? Thanks.

Yes. I think as we talked about in the last call, we expected to see data breach costs in the high-single millions over the course of this year. So as we also said, we expected that to be primarily in Q1 and Q2, so you do have some of that in this quarter. As it relates to Presence, there's nothing new or different really from a cost standpoint of deploying Presence at this point. It's continuing to roll out some access control systems at the venues, which will be on the capital side, but nothing material on the operational side.

Thank you.

And we'll take the next question.

Good afternoon. This is Amy Young from Macquarie. Maybe just following up on ticketing. What activity drove the turnaround in mid-March and April? Was there anything specific that you can talk about? And then can you update us on the progress that ticketing is making on the international front? And lastly, I think a lot of us understand that there's an option to buy in the remainder of Rock in Rio. Can you help us understand what the puts and takes are for that specific deal? Thank you.

Sure. In terms of the turnaround, I think, Amy, more than anything else it was just the catching up of what the pull forward was in Q4 and having that run its course in Q1. We didn't know whether that was going to run its course end of February, end of March, end of April. There was just that uncertainty when we last spoke. So it ended up playing out, but as of the middle of March, this was when we basically saw ourselves work that out of the system. And then that combined with as we thought, it's a very strong theater business, which tended to have a shorter lead time when the shows are announced to onsale to play, also augmented the quarter for us. It was a particularly – speaking then on international, it was a particularly strong quarter for international. That business continues to grow well as we follow the concerts globally and build the business in the markets where we have a strong Concerts Presence and less of a historical Ticketmaster Presence. I don't think we have anything structural to announce at this point, but certainly our strategy remains on course to use the concerts as the flywheel and to have ticketing benefit from that activity. In terms of Rock in Rio, yes, we have got certain options as you said, nothing has been done at this point. I don't think we're in a position to comment on what we're going to do or not do until we make a final determination.

Got it. And congrats on the quarter.

But we will say, Amy, we're thrilled with the acquisition. Rock in Rio this year is going to have a record year attendance ticket sales profitability. So we've always known that's one of prized jewels in the global festival business, so we're using it. One, we think the festival fabulous, it's got expansion to it and it's been a huge part of our South American entry. So you'll see us do more, invest more in it. It is the general strategy regardless of what day we do what part.

[Operator Instructions] And we'll go and take the next caller.

Hi, it's Brandon Ross from BTIG. On your mid single-digit AOI growth for tickets that you gave us guidance, what's your assumption for the timing of onsale this year? Do you expect a similar pull forward in Q4 like we saw in Q4 of 2018? And then I have another one.

Yes. We've seen sales go earlier and earlier, so I think you'll see more and more activity in Q4 for the following year seems to be the trend in the last couple of years.

Okay. And then maybe a follow-up on David's. With your CapEx growth accelerating this year, you've mentioned you're expanding your venue footprint. Can you talk a little more about exactly what types of venues you're investing in and where you're investing in that?

Music venues, Brandon. Does that help your model?

Amphitheaters, Theaters.

Yes. Music venues, right. We have 50 amphitheaters, we love that model, continues to be a high-margin business. It drives sponsorships, drives ticketing, drives our global food and beverage, so you'll see us – if there's opportunities, we'll keep expanding that footprint, both here and around the world. From the 500-seat to 6,000-seat range, I think we have over 200 and something of those venues now. In House of Blues to Fillmore to Europe, we have a strong portfolio, Australia, we do Canada. We see those as a real great sweet spot of upcoming talent. Huge piece of the youth culture, so it drives our sponsorship, our data around that segment, those customers tend to go to shows five, six times versus a higher-end show at the arenas you go two times. So you get a real active young audience when you're in the kind of the 500 to 6,000 seats. They seem to be the new movie theater for every developer. So we have great opportunities to kind of leverage our content for more equity, more revenue, more of the pie in the right development. So I think we're in a really sweet spot where the live theater is a part that a lot of the developers, real estate, neighborhood, city centers they all want that venue to be part of their attraction in urban centers. So we continually have a big opportunity and a long list of options where we will continue to, whether we acquire the lease, whether we manage, whether we book or whether we bill, we think they are good accretive businesses on overall expansion globally.

Thank you.

[Operator Instructions] We'll go and take the next question.

It's Doug Arthur. Joe, you made a comment about the timing of festivals shifting from Q3 to Q2. Is that something – in terms of modeling, is that material? Or is that more sort of on the margin in terms of how it's going to skew the seasonality of the concert sector?

As I mentioned and you can assume it's probably meaningful to think through. We just have a couple of festivals that traditionally sit over those weekends of the end of June, beginning in July. and based on how the weekend falls, it could either goes more into Q2 or Q3. So we're just making sure to point that out, so as you guys do your modeling, you get the balance between Q2 and Q3.

Okay. And then, I mean you guys were quite cautious on the first quarter. We talked about a little bit on this call. It seems like the Ticketing segment kind of in terms of the timing of these onsales kind of did what you thought it would do, Sponsorship and Advertising was pretty swell in the quarter, obviously the buildup is later. So ergo, the big surprise, which I'm surprised it was such a big surprise was in the Concerts segment in terms of very strong revenue growth. I guess when you did your fourth quarter, you do not quite have the visibility on that at the time or how do you see that playing out versus what you've originally expected?

Well, I think, on the Ticketmaster part, as I said on earlier part of the call, we didn't know when that was going to fully work through the Q4 pull forward and how much of it was incremental and how much of it was timing. So until we saw that play out, we didn't know what that was. Now we've now seen it play out, it was on the positive end of the spectrum of what we had hoped for. And as we said, as of mid-July, Ticketmaster has sold 4 million more concert tickets for shows this year than it sold at this point last year. So that was definitely an unknown for us when we did the call in February. Another thing is on the Concert side, I've said a few times that the theater side of the business in particular has been strong and that tends to be shorter lead time. And then I think third is overall we've been very happy with the sell-through rates. As Michael mentioned, they've been very strong. You've listened to other companies' calls and you hear concerns about the economic cycle that was again an unknown to us and I think that having sell-through rates that are at or above last year's across venue type and across ticket types has been something that's given us – maybe still a lot better today than we did a few months ago.

And Doug just to jump on that, I think that last point is the fundamental. We were going into a year, we want to make sure that globally, environmentally that there was not – no speed bumps that were going to affect our business. Our sell-through really, really picked up halfway through Q1. We do our annual concert week. I think it's our third or maybe fourth year now. We sold 1 million tickets yesterday, which would have been more than what we would have sold in three days last year. So that is another example of the market is very strong. From club shows to festivals, our European business is very strong. So we are very optimistic now that there is no slow down at all on a global consumer demand perspective. Our business is strong.

All right. Okay. That's very helpful. And then I guess, finally, sort of a nerdy question, but to the extent that you sell more tickets via mobile and via the app, does that improve your data, the granularity of your data, and help you drive sponsorships?

Great question.

Best question so far.

So selling tickets on the app, under the historical model, once we've had a material difference in terms of the data we have. As we shift to digital ticketing and we get the identity, when we have all of those individuals identified on data, it gives us, first of all, much better data. Second of all, by having a combination of cellphone numbers and app installs, it enables us to connect with them directly real-time via phone, so whether that's a sponsor, an artist, a team, Ticketmaster marketing it provides a much more effective marketing platform.

Great, okay. Thank you.

And we'll take another question.

Yes. Hi. Ryan Sundby, William Blair. Congrats on the quarter, and thanks for taking my question. Michael, in the press release, as you called out, you've really done a great job driving front of house, and arenas and amphitheater over the last couple of years. I was just wondering if you can maybe talk about what pricing has looked like at – for the rest of the house. And then maybe tie that in with kind of how your unsold inventory looks today versus kind of what you shared a few years ago in something like 25% of tickets were going unsold?

Yes. On kind of our annual Investor Day we do in November. I mean I have those numbers up on the slide again. I can't remember the precise number, but you can go back and look at that. The progress has been there year-over-year. So few factors, one, we just continue and look at the demand on the secondary market over the last few years. As much as we've been increasing the P1, the secondary business has also been growing. So we know there's $8 billion to $10 billion of opportunities still priced outside of the house from a consumer demand perspective. So we know we got years left and we'll be sitting on this call telling you that we've slowly increased the price and it's a slower process, because the artist has to find that right balance between what he will charge that makes sense for his fan and his brand and what the market will bear. That allows us to be some in efficiency, but a great progress. The artists is much more – the appetite is a lot larger now as we’ve moved forward and exceed kind of a sunlight on what the artist or what's these tickets are selling for. So we have a great opportunity to keep pricing upfront. I think we've talked about before. The great advantage of pricing upfront is you also then get some extra growth in the pot to reduce the pricing in the back. A problem in the concert business is never been to sell the first 30 rows, it's can you sell those final 30 rows and get that customer in the house and when they buy a beer and they drive your sponsorship and your data. So one of the reasons you see our revenue and our ticket…

Okay, got it. Very helpful. And then I guess in the QIC, you called out higher tuning activity in Asia as a driver of concert growth. Just wondering, if you could, maybe provide just a little more color on where that came from? And then maybe just take a step back and remind us kind of what countries are you materially in today? I mean, as you look over the next five years, kind of what are the big opportunities in Asia to drive growth?

I'm not sure where the Asia comment came from. We've been building our global business for years, as you know. We're in 42 markets, where we have a Live Nation office, where we're promoting the show. It is a global bundle of local business. You have to have boots on the ground to actually execute. So if you look at our business on a global perspective, historically our European, Western European, Canada, U.S. and Australia have been the traditional markets of a global business. And you've seen in the last five years, whether it's South America, whether it's Asia or Eastern Europe, we've been slowly building out the infrastructure in those markets. We believe that the – now that the artist is global in terms of when Drake drops a single tomorrow, that 19-year-old in Singapore, Colombia and Cape Town knows about it as well as that one in Detroit. So it is a fast expanding global business. Every major city in the world wants to be an entertainment capital and have Drake perform there. The infrastructure is being built. So you're going to see us continue and be aggressive in Asia, South America, India and Eastern Europe, as those markets are becoming every year more legitimate. I think Asia comment might have been driven by our BTS tour. It's a great success story, we're very proud to be part of that global tour and that might be where the Asia comment came in. Overall, our Asia business is a growing business. We've been in China, Hong Kong and Singapore for years. We've been continually looking to grow those businesses and we will over time.

Perfect. Thanks.

And that does conclude the question-and-answer session. I'll now turn the conference back over to you for any additional remarks.

All right. Thank you, everybody.

Well, thank you. That does conclude today's conference. We do thank you for your participation. Have a wonderful day.