Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Live Nation Entertainment, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Live Nation Entertainment, Inc. (the Company) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP

We have served as the Company’s auditor since 2005.

Los Angeles, California

February 27, 2018

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2017				2016
	(in thousands, except share data)
ASSETS
Current assets
Cash and cash equivalents	$	1,825,322			$	1,526,591
Accounts receivable, less allowance of $32,755 and $29,634 in 2017 and 2016, respectively	725,304				568,936
Prepaid expenses	546,713				528,250
Other current assets	55,403				49,774
Total current assets	3,152,742				2,673,551
Property, plant and equipment
Land, buildings and improvements	955,937				838,545
Computer equipment and capitalized software	610,924				524,571
Furniture and other equipment	312,962				256,765
Construction in progress	133,906				125,430
	2,013,729				1,745,311
Less accumulated depreciation	1,127,793				993,775
	885,936				751,536
Intangible assets
Definite-lived intangible assets, net	729,265				812,031
Indefinite-lived intangible assets	369,023				368,766
Goodwill	1,754,589				1,747,088
Other long-term assets	612,708				411,294
Total assets	$	7,504,263			$	6,764,266
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, client accounts	$	948,637			$	726,475
Accounts payable	85,666				55,030
Accrued expenses	1,109,246				781,494
Deferred revenue	925,220				804,973
Current portion of long-term debt, net	347,593				53,317
Other current liabilities	160,638				39,055
Total current liabilities	3,577,000				2,460,344
Long-term debt, net	1,952,366				2,259,736
Long-term deferred income taxes	137,635				197,811
Other long-term liabilities	174,391				149,791
Commitments and contingent liabilities
Redeemable noncontrolling interests	244,727				347,068
Stockholders’ equity
Preferred stock—Series A Junior Participating, $.01 par value; 20,000,000 shares authorized; no shares issued and outstanding	—				—
Preferred stock, $.01 par value; 30,000,000 shares authorized; no shares issued and outstanding	—				—
Common stock, $.01 par value; 450,000,000 shares authorized; 208,483,993 and 204,475,849 shares issued and 208,075,969 and 204,067,825 shares outstanding in 2017 and 2016, respectively	2,069				2,034
Additional paid-in capital	2,374,006				2,381,011
Accumulated deficit	(1,079,472		)		(1,073,457		)
Cost of shares held in treasury (408,024 shares)	(6,865		)		(6,865		)
Accumulated other comprehensive loss	(108,542		)		(176,707		)
Total Live Nation stockholders’ equity	1,181,196				1,126,016
Noncontrolling interests	236,948				223,500
Total equity	1,418,144				1,349,516
Total liabilities and equity	$	7,504,263			$	6,764,266

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended December 31,
		2017				2016				2015
	(in thousands except share and per share data)
Revenue		$	10,337,448			$	8,354,934			$	7,245,731
Operating expenses:
Direct operating expenses		7,748,791				6,082,708				5,196,473
Selling, general and administrative expenses		1,907,723				1,548,450				1,411,855
Depreciation and amortization		455,534				403,651				397,241
Loss (gain) on disposal of operating assets		(969		)		124				845
Corporate expenses		134,972				125,061				107,945
Operating income		91,397				194,940				131,372
Interest expense		106,722				106,506				102,881
Loss on extinguishment of debt		1,048				14,049				—
Interest income		(5,717		)		(2,573		)		(3,528		)
Equity in losses (earnings) of nonconsolidated affiliates		(1,161		)		17,802				(1,502		)
Other expense (income), net		(115		)		10,830				27,168
Income before income taxes		(9,380		)		48,326				6,353
Income tax expense (benefit)		(17,154		)		28,029				22,122
Net income (loss)		7,774				20,297				(15,769		)
Net income attributable to noncontrolling interests		13,789				17,355				16,739
Net income (loss) attributable to common stockholders of Live Nation		$	(6,015	)		$	2,942			$	(32,508	)
Basic and diluted net loss per common share available to common stockholders of Live Nation		$	(0.48	)		$	(0.23	)		$	(0.33	)
Weighted average common shares outstanding:
Basic and diluted		204,923,740				202,076,243				200,973,485
Reconciliation to net loss available to common stockholders of Live Nation:
Net income (loss) attributable to common stockholders of Live Nation		$	(6,015	)		$	2,942			$	(32,508	)
Accretion of redeemable noncontrolling interests		(91,631		)		(49,952		)		(33,179		)
Basic and diluted net loss available to common stockholders of Live Nation		$	(97,646	)		$	(47,010	)		$	(65,687	)

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Net income (loss)		$	7,774			$	20,297			$	(15,769	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		67,704				(64,947		)		(41,895		)
Other		461				(103		)		248
Comprehensive income (loss)		75,939				(44,753		)		(57,416		)
Comprehensive income attributable to noncontrolling interests		13,789				17,355				16,739
Comprehensive income (loss) attributable to common stockholders of Live Nation		$	62,150			$	(62,108	)		$	(74,155	)

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

		Live Nation Stockholders’ Equity
		Common Shares Issued			Common Stock				Additional Paid-In Capital				Accumulated Deficit				Cost of Shares Held in Treasury				Accumulated Other Comprehensive Income (Loss)				Noncontrolling Interests				Total Equity				Redeemable Noncontrolling Interests
	(in thousands, except share data)																																(in thousands)
Balances at December 31, 2014		200,431,276			$	2,004			$	2,414,428			$	(1,042,603	)		$	(6,865	)		$	(70,010	)		$	186,893			$	1,483,847			$	168,855
Non-cash and stock-based compensation		—			—				33,361				—				—				—				—				33,361				—
Common stock issued under stock plans, net of shares withheld for employee taxes		460,418			5				(7,657		)		—				—				—				—				(7,652		)		—
Exercise of stock options		1,138,891			11				16,269				—				—				—				—				16,280				—
Acquisitions		—			—				—				—				—				—				30,627				30,627				83,263
Purchases of noncontrolling interests		—			—				(6,555		)		—				—				—				(3,585		)		(10,140		)		—
Sales of noncontrolling interests		—			—				11,899				—				—				—				720				12,619				(9,652		)
Redeemable noncontrolling interests fair value adjustments		—			—				(33,179		)		—				—				—				—				(33,179		)		33,179
Noncontrolling interests contributions		—			—				—				—				—				—				255				255				—
Cash distributions		—			—				—				—				—				—				(24,693		)		(24,693		)		(5,953		)
Other		—			—				—				—				—				—				(5,182		)		(5,182		)		2,215
Comprehensive income (loss):
Net income (loss)		—			—				—				(32,508		)		—				—				24,931				(7,577		)		(8,192		)
Foreign currency translation adjustments		—			—				—				—				—				(41,895		)		—				(41,895		)		—
Other																					248								248
Balances at December 31, 2015		202,030,585			2,020				2,428,566				(1,075,111		)		(6,865		)		(111,657		)		209,966				1,446,919				263,715
Non-cash and stock-based compensation		—			—				34,011				(1,288		)		—				—				—				32,723				—
Common stock issued under stock plans, net of shares withheld for employee taxes		302,545			3				(4,110		)		—				—				—				—				(4,107		)		—
Exercise of stock options		1,062,936			11				20,288				—				—				—				—				20,299				—
Acquisitions		—			—				—				—				—				—				40,697				40,697				72,560
Divestitures		—			—				—				—				—				—				(1,856		)		(1,856		)		—
Purchases of noncontrolling interests		—			—				(49,111		)		—				—				—				(14,049		)		(63,160		)		(12,674		)
Sales of noncontrolling interests		—			—				1,424				—				—				—				427				1,851				—
Redeemable noncontrolling interests fair value adjustments		—			—				(49,952		)		—				—				—				—				(49,952		)		49,952
Cash distributions		—			—				—				—				—				—				(34,285		)		(34,285		)		(20,846		)
Other		—			—				(105		)		—				—				—				(399		)		(504		)		5
Comprehensive income (loss):
Net income (loss)		—			—				—				2,942				—				—				22,999				25,941				(5,644		)
Foreign currency translation adjustments		—			—				—				—				—				(64,947		)		—				(64,947		)		—
Other		—			—				—				—				—				(103		)		—				(103		)		—
Balances at December 31, 2016		203,396,066			2,034				2,381,011				(1,073,457		)		(6,865		)		(176,707		)		223,500				1,349,516				347,068
Non-cash and stock-based compensation		—			—				42,755				—				—				—				—				42,755				—
Common stock issued under stock plans, net of shares withheld for employee taxes		342,974			4				(5,456		)		—				—				—				—				(5,452		)		—
Exercise of stock options		3,137,997			31				51,038				—				—				—				—				51,069				—
Acquisitions		—			—				—				—				—				—				9,159				9,159				6,640
Purchases of noncontrolling interests		—			—				(3,616		)		—				—				—				(2,836		)		(6,452		)		(165,227		)
Redeemable noncontrolling interests fair value adjustments		—			—				(91,631		)		—				—				—				—				(91,631		)		91,631
Contributions received		—			—				—				—				—				—				10,671				10,671				1,875
Cash distributions		—			—				—				—				—				—				(24,715		)		(24,715		)		(28,994		)
Other		—			—				(95		)		—				—				—				212				117				(1,099		)
Comprehensive income (loss):
Net income (loss)		—			—				—				(6,015		)		—				—				20,957				14,942				(7,167		)
Foreign currency translation adjustments		—			—				—				—				—				67,704				—				67,704				—
Other		—			—				—				—				—				461				—				461				—
Balances at December 31, 2017		206,877,037			$	2,069			$	2,374,006			$	(1,079,472	)		$	(6,865	)		$	(108,542	)		$	236,948			$	1,418,144			$	244,727

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	7,774			$	20,297			$	(15,769	)
Reconciling items:
Depreciation	149,634				139,288				134,148
Amortization	305,900				264,363				263,093
Deferred income tax benefit	(71,539		)		(7,891		)		(9,611		)
Amortization of debt issuance costs, discounts and premium, net	13,174				12,594				10,885
Provision for uncollectible accounts receivable and advances	20,295				21,681				19,505
Loss on extinguishment of debt	1,048				14,049				—
Non-cash compensation expense	42,755				32,723				33,361
Unrealized changes in fair value of contingent consideration	18,011				(5,715		)		8,010
Equity in losses (earnings) of nonconsolidated affiliates, net of distributions	6,898				27,498				9,436
Other, net	67				(3,587		)		(11,525		)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable	(133,020		)		(146,128		)		(67,235		)
Increase in prepaid expenses and other assets	(239,065		)		(129,748		)		(122,872		)
Increase in accounts payable, accrued expenses and other liabilities	474,301				193,775				3,480
Increase in deferred revenue	26,773				164,291				52,948
Net cash provided by operating activities	623,006				597,490				307,854
CASH FLOWS FROM INVESTING ACTIVITIES
Advances of notes receivable	(19,120		)		(17,227		)		(28,288		)
Investments made in nonconsolidated affiliates	(25,170		)		(28,922		)		(21,998		)
Purchases of property, plant and equipment	(238,435		)		(173,827		)		(142,491		)
Cash paid for acquisitions, net of cash acquired	(47,946		)		(211,624		)		(89,780		)
Purchases of intangible assets	(10,977		)		(6,234		)		(12,267		)
Other, net	14,062				11,357				3,839
Net cash used in investing activities	(327,586		)		(426,477		)		(290,985		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt issuance costs	60,912				844,451				57,276
Payments on long-term debt including extinguishment costs	(110,855		)		(606,831		)		(63,569		)
Contributions from noncontrolling interests	10,671				88				711
Distributions to noncontrolling interests	(46,036		)		(55,131		)		(30,645		)
Purchases and sales of noncontrolling interests, net	(71,509		)		(69,106		)		(9,752		)
Proceeds from exercise of stock options	51,069				20,299				16,280
Payments for deferred and contingent consideration	(15,883		)		(20,539		)		(6,770		)
Other, net	(5,452		)		(14,019		)		(7,652		)
Net cash provided by (used in) financing activities	(127,083		)		99,212				(44,121		)
Effect of exchange rate changes on cash and cash equivalents	130,394				(46,759		)		(51,652		)
Net increase (decrease) in cash and cash equivalents	298,731				223,466				(78,904		)
Cash and cash equivalents at beginning of period	1,526,591				1,303,125				1,382,029
Cash and cash equivalents at end of period	$	1,825,322			$	1,526,591			$	1,303,125
SUPPLEMENTAL DISCLOSURE
Cash paid during the year for:
Interest, net of interest income	$	87,111			$	96,678			$	92,620
Income taxes, net of refunds	$	44,871			$	30,312			$	44,287

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History

Live Nation was incorporated in Delaware on August 2, 2005 in preparation for the contribution and transfer by Clear Channel Communications, Inc. of substantially all of its entertainment assets and liabilities to the Company. The Company completed this separation on December 21, 2005 and became a publicly traded company on the New York Stock Exchange trading under the symbol “LYV.”

On January 25, 2010, the Company merged with Ticketmaster Entertainment LLC and it became a wholly-owned subsidiary of Live Nation. Effective with the merger, Live Nation, Inc. changed its name to Live Nation Entertainment, Inc.

Seasonality

Due to the seasonal nature of shows at outdoor amphitheaters and festivals, which primarily occur from May through October, the Concerts and Sponsorship & Advertising segments experience higher revenue during the second and third quarters. The Ticketing segment’s revenue is impacted by fluctuations in the availability of events for sale to the public, which vary depending upon scheduling by its clients. The Company’s seasonality also results in higher balances in cash and cash equivalents, accounts receivable, prepaid expenses, accrued expenses and deferred revenue at different times in the year.

Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial statements include all accounts of the Company, its majority owned and controlled subsidiaries and VIEs for which the Company is the primary beneficiary. Intercompany accounts among the consolidated businesses have been eliminated in consolidation. Net income (loss) attributable to noncontrolling interests is reflected in the statements of operations.

Typically the Company consolidates entities in which the Company owns more than 50% of the voting common stock and controls operations and also VIEs for which the Company is the primary beneficiary. Investments in nonconsolidated affiliates in which the Company owns more than 20% of the voting common stock or otherwise exercises significant influence over operating and financial policies but not control of the nonconsolidated affiliate are accounted for using the equity method of accounting. Investments in nonconsolidated affiliates in which the Company owns less than 20% of the voting common stock and does not exercise significant influence over operating and financial policies are accounted for using the cost method of accounting.

All cash flow activity reflected on the consolidated statements of cash flows for the Company is presented net of any non-cash transactions so the amounts reflected may be different than amounts shown in other places in the Company’s financial statements that are based on accrual accounting and therefore include non-cash amounts. For example, the purchases of property, plant and equipment reflected on the consolidated statements of cash flows reflects the amount of cash paid during the year for these purchases and does not include the impact of the changes in accrued expenses related to capital expenditures during the year.

Variable Interest Entities

In the normal course of business, the Company enters into joint ventures or makes investments in companies that will allow it to expand its core business and enter new markets. In certain instances, such ventures or investments may be considered a VIE because the equity at risk is insufficient to permit it to carry on its activities without additional financial support from its equity owners. In determining whether the Company is the primary beneficiary of a VIE, it assesses whether it has the power to direct activities that most significantly impact the economic performance of the entity and has the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The activities the Company believes most significantly impact the economic performance of its VIEs include the unilateral ability to approve the annual budget, the unilateral ability to terminate key management and the unilateral ability to approve entering into agreements with artists, among others. The Company has certain rights and obligations related to its involvement in the VIEs, including the requirement to provide operational cash flow funding. As of December 31, 2017 and 2016, excluding intercompany balances and allocated goodwill and intangible assets, there were $192.1 million and $186.4 million of assets and $98.0 million and $98.9 million of liabilities, respectively, related to VIEs included in the balance sheets. None of the Company’s VIEs are significant on an individual basis.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. The Company’s cash and cash equivalents consist primarily of domestic and foreign bank accounts as well as interest-bearing accounts consisting primarily of bank deposits and money market accounts managed by third-party financial institutions. These balances are stated at cost, which approximates fair value.

Included in the December 31, 2017 and 2016 cash and cash equivalents balance is $769.4 million and $591.0 million, respectively, of cash received that includes the face value of tickets sold on behalf of ticketing clients and their share of service charges (“client cash”), which amounts are to be remitted to the clients. The Company generally does not utilize client cash for its own financing or investing activities as the amounts are payable to clients on a regular basis. These amounts due to clients are included in accounts payable, client accounts.

Cash held in interest-bearing operating accounts in many cases exceeds the Federal Deposit Insurance Corporation insurance limits. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents; however, these balances could be impacted in the future if the underlying financial institutions fail. To date, the Company has experienced no loss or lack of access to its cash or cash equivalents; however, the Company can provide no assurances that access to its cash and cash equivalents will not be impacted in the future by adverse conditions in the financial markets.

Allowance for Doubtful Accounts

The Company evaluates the collectability of its accounts receivable based on a combination of factors. Generally, it records specific reserves to reduce the amounts recorded to what it believes will be collected when a customer’s account ages beyond typical collection patterns, or the Company becomes aware of a customer’s inability to meet its financial obligations.

The Company believes that the credit risk with respect to trade receivables is limited due to the large number and the geographic diversification of its customers.

Prepaid Expenses

The majority of the Company’s prepaid expenses relate to event expenses including show advances and deposits and other costs directly related to future concert events. For advances that are expected to be recouped over a period of more than 12 months, the long-term portion of the advance is classified as other long-term assets. These prepaid costs are charged to operations upon completion of the related events.

Ticketing contract advances, which can be either recoupable or non-recoupable, represent amounts paid in advance to the Company’s clients pursuant to ticketing agreements and are reflected in prepaid expenses or in other long-term assets if the amount is expected to be recouped or recognized over a period of more than 12 months. Recoupable ticketing contract advances are generally recoupable against future royalties earned by the clients, based on the contract terms, over the life of the contract. Non-recoupable ticketing contract advances, excluding those amounts paid to support clients’ advertising costs, are fixed additional incentives occasionally paid by the Company to secure the contract with certain clients and are normally amortized over the life of the contract on a straight-line basis. Amortization of these non-recoupable ticketing contract advances is included in depreciation and amortization in the statements of operations. For the years ended December 31, 2017, 2016 and 2015, the Company amortized $83.3 million, $85.1 million and $86.6 million, respectively, related to non-recoupable ticketing contract advances.

Business Combinations

During 2017, 2016 and 2015, the Company completed several acquisitions that were accounted for as business combinations under the acquisition method of accounting. These acquisitions were not significant either on an individual basis or in the aggregate.

The Company accounts for its business combinations under the acquisition method of accounting. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items.

Property, Plant and Equipment

Property, plant and equipment are stated at cost or fair value at the date of acquisition. Depreciation, which is recorded for both owned assets and assets under capital leases, is computed using the straight-line method over their estimated useful lives, which are typically as follows:

Buildings and improvements - 10 to 50 years

Computer equipment and capitalized software - 3 to 10 years

Furniture and other equipment - 3 to 10 years

Leasehold improvements are depreciated over the shorter of the economic life or associated lease term assuming the Company exercises renewal periods, if appropriate. Expenditures for maintenance and repairs are charged to operations as incurred, whereas expenditures for asset renewal and improvements are capitalized.

The Company tests for possible impairment of property, plant and equipment whenever events or circumstances change, such as a current period operating cash flow loss combined with a history of, or projected, operating cash flow losses or a significant adverse change in the manner in which the asset is intended to be used, which may indicate that the carrying amount of the asset may not be recoverable. If indicators exist, the Company compares the estimated undiscounted future cash flows related to the asset to the carrying value of the asset. If the carrying value is greater than the estimated undiscounted future cash flow amount, an impairment charge is recorded based on the difference between the fair value and the carrying value. Any such impairment charge is recorded in depreciation and amortization in the statements of operations. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows.

Intangible Assets

The Company classifies intangible assets as definite-lived or indefinite-lived. Definite-lived intangibles include revenue-generating contracts, client/vendor relationships, trademarks and naming rights, technology, non-compete agreements, and venue management and leasehold agreements, all of which are amortized either on a straight-line basis over the respective lives of the agreements, typically 3 to 15 years, or on a basis more representative of the time pattern over which the benefit is derived. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are stated at cost or fair value at the date of acquisition. Indefinite-lived intangibles consist of trade names. Indefinite-lived intangibles are not subject to amortization, but are reviewed for impairment at least annually.

The Company tests for possible impairment of definite-lived intangible assets whenever events or circumstances change, such as a current period operating cash flow loss combined with a history of, or projected, operating cash flow losses or a significant adverse change in the manner in which the asset is intended to be used, which may indicate that the carrying amount of the asset may not be recoverable. If indicators exist, the Company compares the estimated undiscounted future cash flows related to the asset to the carrying value of the asset. If the carrying value is greater than the estimated undiscounted future cash flow amount, an impairment charge is recorded based on the difference between the fair value and the carrying value. Any such impairment charge is recorded in depreciation and amortization in the statements of operations.

The Company tests for possible impairment of indefinite-lived intangible assets at least annually. Depending on facts and circumstances, qualitative factors may first be assessed to determine whether the existence of events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. If it is concluded that it is more likely than not impaired, the Company performs a quantitative impairment test by comparing the fair value with the carrying amount. If the qualitative assessment is not performed first, the Company performs only this quantitative test. When specific assets are determined to be impaired, the cost basis of the asset is reduced to reflect the current fair value. Any such impairment charge is recorded in depreciation and amortization in the statements of operations. The impairment loss calculations require management to apply judgment in estimating future cash flows, projected expected revenue, discount rates and royalty rates that reflect the risk inherent in future cash flows.

Goodwill

The Company reviews goodwill for impairment annually, as of October 1, using a two-step process. It also tests goodwill for impairment in other periods if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount or when the Company changes its reporting units.

The first step is a qualitative evaluation as to whether it is more likely than not that the fair value of any of the Company’s reporting units is less than its carrying value using an assessment of relevant events and circumstances. Examples of such events and circumstances include historical financial performance, industry and market conditions, macroeconomic conditions, reporting unit-specific events, historical results of goodwill impairment testing and the timing of the last performance of a quantitative assessment.

If any reporting units are concluded to be more likely than not impaired, or if that conclusion cannot be determined qualitatively, a second step is performed for that reporting unit. Regardless, all reporting units undergo a second step at least once every five years. This second step, used to quantitatively screen for potential impairment and measure the impairment, if any, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the reporting unit’s carrying value exceeds its fair value, the excess of the carrying value over the fair value is recorded as an impairment to goodwill. If a reporting unit’s carrying value is negative, the reporting unit passes the impairment test. In this case, the Company will disclose the amount of goodwill allocated to that reporting unit and disclose which reportable segment the reporting unit is included in. In both steps, discount rates, market multiples, and sensitivity tests are derived and/or computed with the assistance of external valuation consultants.

The second step that the Company uses to evaluate goodwill for impairment and measure impairment, if any, involves the determination of the fair value of the Company’s reporting units. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates.

In developing fair values for its reporting units, the Company employs a market multiple or a discounted cash flow methodology, or a combination thereof. The market multiple methodology compares the Company to similar companies on the basis of risk characteristics to determine its risk profile relative to those companies as a group. This analysis generally focuses on both quantitative considerations, which include financial performance and other quantifiable data, and qualitative considerations, which include any factors which are expected to impact future financial performance. The most significant assumptions affecting the market multiple methodology are the market multiples used and control premium. A control premium represents the additional value an investor would pay in order to obtain a controlling interest in the respective reporting unit.

The discounted cash flow methodology establishes fair value by estimating the present value of the projected future cash flows to be generated from the reporting unit. It is important to note that items such as depreciation, amortization and stock-based compensation expense are not part of cash flows which is more akin to the Company’s AOI metric. The discount rate applied to the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows. The discounted cash flow methodology uses the Company’s estimates of future financial performance. The most significant assumptions used in the discounted cash flow methodology are the discount rate and expected future revenue, which vary among reporting units.

Nonconsolidated Affiliates

In general, nonconsolidated investments in which the Company owns more than 20% of the common stock or otherwise exercises significant influence over an affiliate are accounted for under the equity method. The Company recognizes gains or losses upon the issuance of securities by any of its equity method investees. The Company reviews the value of equity method investments and records impairment charges in the statements of operations for any decline in value that is determined to be other-than-temporary. If the Company obtains control of a nonconsolidated affiliate through the purchase of additional ownership interest or changes in the governing agreements, it remeasures its investment to fair value first and then applies the accounting guidance for business combinations. Any gain or loss resulting from the remeasurement to fair value is recorded as a component of other expense (income), net in the statements of operations.

Accounts Payable, Client Accounts

Accounts payable, client accounts consists of contractual amounts due to ticketing clients which includes the face value of tickets sold and the clients’ share of service charges.

Income Taxes

The Company accounts for income taxes using the liability method which results in deferred tax assets and liabilities based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not that some portion of or the entire asset will not be realized. As almost all earnings from the Company’s continuing foreign operations are permanently reinvested and not distributed, the Company’s income tax provision does not include additional United States state and foreign withholding or transaction taxes on those foreign earnings that would be incurred if they were distributed. It is not practicable to determine the amount of state and foreign income taxes, if any, that might become due in the event that any remaining available cash associated with these earnings were distributed.

The FASB guidance for income taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is more likely than not to be realized upon ultimate settlement.

The Company has established a policy of including interest related to tax loss contingencies in income tax expense (benefit) in the statements of operations.

Revenue Recognition

Revenue from the promotion and production of an event in the Concerts segment is recognized after the show occurs. Revenue related to larger global tours is also recognized after the show occurs; however, any profits related to these tours, primarily related to music tour production and tour management services, is recognized after minimum revenue guarantee thresholds, if any, have been achieved. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorships and other revenue, which is not related to any single event, is classified as deferred revenue and generally recognized over the operating season or the term of the contract.

Revenue from the Company’s ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold. For tickets sold to events at the Company’s owned or operated venues and festivals in the United States, and where the Company controls the tickets internationally, the revenue for the associated ticket service charges collected in advance of the event is recorded as deferred revenue until the event occurs and these service charges are shared between the Company’s Ticketing and Concerts segments. For tickets sold for events at third-party venues, the revenue is recognized at the time of the sale and is recorded by the Company’s Ticketing segment.

The Company accounts for taxes that are externally imposed on revenue producing transactions on a net basis.

Gross versus Net Revenue Recognition

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company has the substantial risks and rewards of ownership under the terms of an arrangement. The Ticketing segment’s revenue, which primarily consists of service fees from its ticketing operations, is recorded net of the face value of the ticket as the Company generally acts as an agent in these transactions.

Foreign Currency

Results of operations for foreign subsidiaries and foreign equity investees are translated into United States dollars using the average exchange rates during the year. The assets and liabilities of those subsidiaries and investees are translated into United States dollars using the exchange rates at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders’ equity in AOCI. Foreign currency transaction gains and losses are included in the statements of operations and include the impact of revaluation of certain foreign currency denominated net assets or liabilities held internationally. For the year ended December 31, 2017, the Company recorded net foreign currency transaction gains of $3.1 million. For the years ended December 31, 2016 and 2015, the Company recorded net foreign currency transaction losses of $8.8 million and $35.3 million, respectively. The Company does not currently have operations in highly inflationary countries.

Advertising Expense

The Company records advertising expense in the year that it is incurred. Throughout the year, general advertising expenses are recognized as they are incurred, but event-related advertising for concerts is recognized once the show occurs. However, all advertising costs incurred during the year and not previously recognized are expensed at the end of the year. Advertising expenses of $378.1 million, $311.9 million and $275.6 million for the years ended December 31, 2017, 2016 and 2015, respectively, were recorded as a component of direct operating expenses. Advertising expenses of $40.3 million, $33.2 million and $28.6 million for the years ended December 31, 2017, 2016 and 2015, respectively, were recorded as a component of selling, general and administrative expenses.

Direct Operating Expenses

Direct operating expenses include artist fees, show-related marketing and advertising expenses, royalties paid to clients for their share of service charges, rent expense for events in third-party venues, credit card fees, telecommunication and data communication costs associated with the Company’s call centers, commissions paid on tickets distributed through independent sales outlets away from the box office, and salaries and wages related to seasonal employees at the Company’s venues along with other costs, including ticket stock and shipping. These costs are primarily variable in nature.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include salaries and other compensation costs related to full-time employees, fixed rent, travel and entertainment, legal expenses and consulting along with other costs.

Depreciation and Amortization

The Company’s depreciation and amortization is presented as a separate line item in the statements of operations. There is no depreciation or amortization included in direct operating expenses, selling, general and administrative expenses or corporate expenses.

Non-cash and Stock-based Compensation

The Company follows the fair value recognition provisions in the FASB guidance for stock compensation. Stock-based compensation expense recognized includes compensation expense for all share-based payments using the estimated grant date fair value. Stock-based compensation expense is adjusted for forfeitures as they occur.

The fair value for options in Live Nation stock is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of the options is amortized to expense on a straight-line basis over the options’ vesting period. The Company uses an expected volatility based on an even weighting of its own traded options and historical volatility. Beginning in 2017, the Company uses a weighted-average expected life based on historical experience calculated with the assistance of outside consultants. Through December 31, 2016, the Company used the simplified method for estimating the expected life within the valuation model which is the period of time that options granted are expected to be outstanding. The Company used the simplified method as it did not believe its historical experience provided a reasonable basis with which to estimate the expected term due to the impact of a number of divestitures after its inception, the varying vesting terms of awards issued since the Company’s inception and the impact from the type and amount of awards converted pursuant to the Company’s merger with Ticketmaster Entertainment LLC. The risk-free rate for periods within the expected life of the option is based on the United States Treasury note rate.

The fair value of restricted stock awards and deferred stock awards, which is generally the stock price on the date of grant, is amortized to expense on a straight-line basis over the vesting period except for restricted stock awards and deferred stock awards with minimum performance or market targets as their vesting condition. The performance-based awards are amortized to expense on a graded basis over the vesting period to the extent that it is probable that the performance criteria will be met. Specific for market-based awards, the fair value is estimated using a Monte Carlo simulation model and is then amortized to expense on a graded basis over the derived service period, which is estimated as the median weighted average vesting period from the Monte Carlo simulation model. However, unlike awards with a service or performance condition, the expense for market-based awards will not be reversed solely because the market condition is not satisfied.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals, acquisition accounting and impairments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Accounting Pronouncements - Recently Adopted

In March 2016, the FASB issued guidance clarifying that the assessment of whether an embedded contingent put or call option is clearly and closely related to the debt instrument only requires an analysis pursuant to the four-step decision sequence outlined in the guidance for embedded derivatives. The guidance should be applied to existing debt instruments using a modified retrospective method as of the beginning of the period of adoption. The Company adopted this guidance on January 1, 2017, and the adoption did not have an impact on its financial position or results of operations.

In October 2016, the FASB issued guidance that requires a single decision maker evaluating whether it is the primary beneficiary of a variable interest entity to consider its indirect interests held by related parties that are under common control on a proportionate basis as opposed to considering those interests in their entirety as required by current guidance. The guidance should be applied retrospectively. The Company adopted this guidance on January 1, 2017, and the adoption did not have an impact on its financial position or results of operations.

In December 2016, the FASB issued guidance making technical corrections and improvements, which includes an update clarifying how to account for arrangements that include a license to use internal-use software acquired from third parties. The guidance for this specific technical correction should be applied prospectively. The Company adopted this guidance on January 1, 2017, and the adoption did not have a material effect on its financial position or results of operations.

In January 2017, the FASB issued guidance that eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The guidance should be applied prospectively to goodwill impairment tests performed within the period of adoption. The Company adopted this guidance effective October 1, 2017.

Accounting Pronouncements - Not Yet Adopted

Revenue Recognition

In May 2014, the FASB issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. The new standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to receive in exchange for those goods or services. The FASB also issued important guidance clarifying certain guidelines of the standard including (1) reframing the indicators in the principal versus agent guidance to focus on evidence that a company is acting as a principal rather than agent and (2) identifying performance obligations and licensing. The standard is effective for annual periods beginning after December 15, 2017 and interim periods within that year. Early adoption of the standard is only permitted for annual periods beginning after December 15, 2016 and interim periods within that year. The guidance should be applied retrospectively, either to each prior period presented in the financial statements, or only to the most current reporting period presented in the financial statements with a cumulative-effect adjustment as of the date of adoption.

To assess the impact of the standard, the Company dedicated personnel to lead the implementation effort and supplemented them with additional external resources. These personnel reviewed the amended guidance and subsequent clarifications, conducted surveys of divisional finance managers to obtain a detailed understanding of contracts with customers within each division, and reviewed a sample of contracts judgmentally selected based on the size and complexity of all major revenue streams. The Company has completed its review and analysis, including the estimated impact of the new guidance.

Based on the procedures performed to date, the Company believes it has identified all material contract types and costs that will be impacted by the new guidance. The Concerts segment, representing approximately 76% of the Company’s 2017 consolidated revenue, will not require a change in its revenue recognition as the Company believes this revenue should continue to be deferred until the event date under the new standard. For the Ticketing segment, representing approximately 21% of 2017 consolidated revenue, the Company has concluded that it will no longer present certain payments to ticketing clients as an expense and will begin reflecting these payments as a reduction of revenue. Previously, the Company recognized royalties paid to ticketing clients as direct operating expenses and nonrecoupable ticketing contract advances as depreciation and amortization. Under the new guidance, the Company will now recognize royalties and ticketing contract advances paid to ticketing clients as a reduction to revenue. Consolidated revenue for 2017 will be reduced by $650.2 million, or approximately 6%, and the Ticketing segment revenue will be reduced by $797.3 million, or approximately 37%. There will be no impact overall to operating income. The timing of revenue recognition will not change for the Ticketing segment. The remaining revenue streams of the Company will not be impacted by the new guidance.

The Company is compiling the data necessary for the required disclosures along with implementing changes to internal controls and accounting policies and processes that may be required to comply with the new revenue recognition and disclosure requirements. The Company will adopt this standard on January 1, 2018, applying it retrospectively to each prior period presented in the consolidated statements of operations.

The table below represents the impact of the adoption to the Company’s consolidated and Ticketing segment’s results of operations. The impact to the consolidated results of operations includes the elimination of intercompany transactions between the Company’s Concerts and Ticketing segments.

	As Reported				Adjustment				As Restated
	(in thousands)
Consolidated
2017
Revenue	$	10,337,448			$	(650,226	)		$	9,687,222
Direct operating expenses	$	7,748,791			$	(566,893	)		$	7,181,898
Depreciation and amortization	$	455,534			$	(83,333	)		$	372,201
2016
Revenue	$	8,354,934			$	(528,598	)		$	7,826,336
Direct operating expenses	$	6,082,708			$	(443,531	)		$	5,639,177
Depreciation and amortization	$	403,651			$	(85,067	)		$	318,584
Ticketing Segment
2017
Revenue	$	2,143,800			$	(797,290	)		$	1,346,510
Direct operating expenses	$	1,170,121			$	(709,240	)		$	460,881
Depreciation and amortization	$	200,777			$	(88,050	)		$	112,727
2016
Revenue	$	1,827,930			$	(661,901	)		$	1,166,029
Direct operating expenses	$	956,956			$	(574,266	)		$	382,690
Depreciation and amortization	$	185,925			$	(87,635	)		$	98,290

Lease Accounting

In February 2016, the FASB issued guidance that requires lessees to recognize most leases on their balance sheet as a lease liability and a right-of-use asset, and to disclose key information about leasing arrangements. The guidance is effective for annual periods beginning after December 15, 2018 and interim periods within that year, and early adoption is permitted. The guidance should be applied on a modified retrospective basis.

To assess the impact of the standard, the Company has dedicated certain of its personnel to lead the implementation effort. These personnel reviewed the amended guidance and subsequent clarifications and attended multiple training sessions in order to understand the potential impact the new standard could have on the Company’s financial position and results of operations. The Company has formed a cross-functional steering committee including members from its major divisions. The Company is in the process of implementing a third-party lease accounting software to record, analyze, and calculate the financial statement and disclosure impacts.

The Company will finalize its conclusions in 2018 and ensure that it can produce the data necessary for the required disclosures along with assessing changes to internal controls and processes that may be required to comply with the new lease accounting and disclosure requirements. The Company will adopt this standard on January 1, 2019 and is currently evaluating the impact that this guidance will have on its financial position and results of operations.

Other Pronouncements

In January 2016, the FASB issued amendments for the recognition, measurement, presentation and disclosure of financial instruments. Among other things, the guidance requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with any change in fair value recognized in net income unless the investments do not have readily determinable fair values. The amendments are effective for annual periods beginning after December 15, 2017 and interim periods within that year. Early adoption is not permitted for most of the amendments. The amendments are to be applied through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption with the exception of equity investments without readily determinable fair values, which will be applied prospectively. The Company will adopt this guidance on January 1, 2018, and does not expect the adoption to have a material impact on its financial position and results of operations.

In October 2016, the FASB issued guidance that requires companies to recognize the income tax effects of intercompany sales and transfers of assets, other than inventory, in the period in which the transfer occurs. That is a change from current

guidance which requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within that year, and early adoption is permitted. The guidance should be applied on a modified retrospective basis. The Company will adopt this guidance on January 1, 2018, and the adoption will not impact its financial position or results of operations.

In January 2017, the FASB issued guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business and should be accounted for as an asset acquisition rather than a business combination. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within that year, and early adoption is permitted. The guidance should be applied prospectively to any transactions occurring within the period of adoption. The Company will adopt this guidance on January 1, 2018, and will apply it prospectively to acquisitions occurring on or after January 1, 2018.

NOTE 2—LONG-LIVED ASSETS

Definite-lived Intangible Assets

The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the years ended December 31, 2017 and 2016:

	Revenue- generating contracts				Client / vendor relationships				Trademarks and naming rights				Technology				Other (1)				Total
	(in thousands)
Balance as of December 31, 2015:
Gross carrying amount	$	700,795			$	379,282			$	86,556			$	30,265			$	246,003			$	1,442,901
Accumulated amortization	(313,743		)		(169,620		)		(14,578		)		(8,602		)		(158,595		)		(665,138		)
Net	387,052				209,662				71,978				21,663				87,408				777,763
Gross carrying amount:
Acquisitions—current year	136,029				42,861				5,100				24,804				11,411				220,205
Acquisitions—prior year	11,404				782				3,618				—				2,674				18,478
Dispositions	—				(2,299		)		—				—				(1,225		)		(3,524		)
Foreign exchange	(25,360		)		(4,528		)		(930		)		(1,364		)		(8,110		)		(40,292		)
Other (2)	(62,470		)		(14,089		)		(6		)		(627		)		(126,746		)		(203,938		)
Net change	59,603				22,727				7,782				22,813				(121,996		)		(9,071		)
Accumulated amortization:
Amortization	(76,484		)		(60,815		)		(9,623		)		(6,153		)		(25,055		)		(178,130		)
Dispositions	—				599				—				—				22				621
Foreign exchange	10,555				1,962				477				491				2,926				16,411
Other (2)	62,872				14,089				—				627				126,849				204,437
Net change	(3,057		)		(44,165		)		(9,146		)		(5,035		)		104,742				43,339
Balance as of December 31, 2016:
Gross carrying amount	760,398				402,009				94,338				53,078				124,007				1,433,830
Accumulated amortization	(316,800		)		(213,785		)		(23,724		)		(13,637		)		(53,853		)		(621,799		)
Net	443,598				188,224				70,614				39,441				70,154				812,031
Gross carrying amount:
Acquisitions—current year	19,095				22,635				—				12,707				6,620				61,057
Acquisitions—prior year	(6,724		)		—				35,464				1,120				—				29,860
Foreign exchange	23,308				10,457				1,429				2,278				4,857				42,329
Other (2)	(6,714		)		(93,652		)		(4,900		)		(5,517		)		(253		)		(111,036		)
Net change	28,965				(60,560		)		31,993				10,588				11,224				22,210
Accumulated amortization:
Amortization	(94,797		)		(61,550		)		(13,315		)		(13,869		)		(19,035		)		(202,566		)
Foreign exchange	(9,918		)		(4,460		)		(560		)		(764		)		(2,463		)		(18,165		)
Other (2)	11,504				93,438				4,918				5,525				370				115,755
Net change	(93,211		)		27,428				(8,957		)		(9,108		)		(21,128		)		(104,976		)
Balance as of December 31, 2017:
Gross carrying amount	789,363				341,449				126,331				63,666				135,231				1,456,040
Accumulated amortization	(410,011		)		(186,357		)		(32,681		)		(22,745		)		(74,981		)		(726,775		)
Net	$	379,352			$	155,092			$	93,650			$	40,921			$	60,250			$	729,265

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(1) Other includes non-compete agreements of $31.6 million and $43.9 million at December 31, 2017 and 2016, respectively, and venue management and leaseholds of $27.2 million and $24.3 million at December 31, 2017 and 2016, respectively.

(2) Other includes netdowns of fully amortized or impaired assets.

Included in the current year acquisitions amount above for 2017 are definite-lived intangible assets primarily associated with the acquisitions of an artist management business located in the United States, various concert promotion businesses located in the United States and Italy, a festival promotion business located in Switzerland and various ticketing businesses located in the United States and the Czech Republic.

Included in the prior year acquisitions amount above for 2017 are changes primarily associated with the acquisitions of festival promotion businesses located in the United States and Australia.

Included in the current year acquisitions amount above for 2016 are definitive-lived intangible assets primarily associated with the acquisitions of festival and concert promoters located in the United States, Australia, Sweden and the United Kingdom, an artist management business with locations in the United States and Canada, a digital content company located in the United States, and the remaining interest in a ticketing-related technology business that had previously been accounted for as a cost method investment.

Included in the prior year acquisitions amount above for 2016 are changes primarily associated with the acquisition of a festival promoter located in the United States.

The 2017 and 2016 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:

	Weighted- Average Life (years)
	2017		2016
Revenue-generating contracts	7		8
Client/vendor relationships	6		6
Trademarks and naming rights	—		10
Technology	3		5
Other	9		5
All categories	6		8

Amortization of definite-lived intangible assets for the years ended December 31, 2017, 2016 and 2015 was $202.6 million, $178.1 million and $174.0 million, respectively.

The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets that exist at December 31, 2017:

	(in thousands)
2018	$	179,251
2019	$	151,852
2020	$	118,439
2021	$	81,950
2022	$	63,920

As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization expense may vary.

Indefinite-lived Intangibles

The Company has indefinite-lived intangible assets which consist of trade names. These indefinite-lived intangible assets had a carrying value of $369.0 million and $368.8 million as of December 31, 2017 and 2016, respectively.

Goodwill

In 2016, the Company’s reportable segments were Concerts, Sponsorship & Advertising, Ticketing and Artist Nation. Beginning in 2017, the Company no longer presents Artist Nation as a reportable segment and now includes the business previously reported in the Artist Nation segment in the Concerts segment. See further discussion of the segment change in Note 12—Segment Data. The Company’s reporting units reviewed for impairment remain unchanged.

The Company currently has seven reporting units with goodwill balances: International Concerts, North America Concerts, Artist Management and Artist Services (non-management) within the Concerts segment; Sponsorship & Advertising; and International Ticketing and North America Ticketing within the Ticketing segment. The Company reviews goodwill for impairment annually, as of October 1, using a two-step process: a qualitative review and a quantitative analysis. In 2017, as part of the Company’s annual test for impairment of goodwill, five reporting units were assessed under the initial qualitative evaluation and did not require a quantitative analysis. These reporting units account for approximately 80% of the Company’s goodwill at December 31, 2017. Considerations included (a) considerable excess of fair values over carrying values in the most recent quantitative analysis performed, (b) improved discount rates, (c) varying results on market multiples and (d) improving financial results.

Finally, for two reporting units that account for approximately 20% of the Company’s goodwill at December 31, 2017, although discount rates remained consistent with prior year, the qualitative analysis was inconclusive due to declines in recent financial performance against prior expectations and varying results on market multiples. As such, quantitative analysis was performed for these reporting units.

The Company performed the quantitative analysis using a combination of a discounted cash flows methodology, which uses both market-based and internal assumptions, and a market multiple methodology, which uses primarily market-based assumptions.

Based upon the results of the annual test for 2017, the Company recorded an impairment charge of $20.0 million related to its Artist Services (non-management) reporting unit. See Note 5—Fair Value Measurements for discussion of the impairment calculation. There were no impairment charges recorded in 2016 or 2015.

The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments for the years ended December 31, 2017 and 2016:

	Concerts				Sponsorship & Advertising				Ticketing				Total
	(in thousands)
Balance as of December 31, 2015:
Goodwill	$	943,272			$	332,081			$	733,825			$	2,009,178
Accumulated impairment losses	(404,863		)		—				—				(404,863		)
Net	538,409				332,081				733,825				1,604,315
Acquisitions—current year	123,952				45,376				8,671				177,999
Acquisitions—prior year	(18,457		)		18,302				(108		)		(263		)
Dispositions	(323		)		—				—				(323		)
Foreign exchange	(31,424		)		67				(3,283		)		(34,640		)
Balance as of December 31, 2016:
Goodwill	1,017,020				395,826				739,105				2,151,951
Accumulated impairment losses	(404,863		)		—				—				(404,863		)
Net	612,157				395,826				739,105				1,747,088
Acquisitions—current year	10,265				5,438				11,139				26,842
Acquisitions—prior year	(21,614		)		(9,822		)		882				(30,554		)
Impairment	(20,000		)		—				—				(20,000		)
Foreign exchange	10,242				10,311				10,660				31,213
Balance as of December 31, 2017:
Goodwill	1,015,913				401,753				761,786				2,179,452
Accumulated impairment losses	(424,863		)		—				—				(424,863		)
Net	$	591,050			$	401,753			$	761,786			$	1,754,589

Included in the current year acquisitions amount above for 2017 is goodwill associated with the acquisitions of various ticketing businesses located in the United States, an artist management business located in the United States, various concert promotion businesses located in Italy and the United States and a festival promotion business located in Switzerland.

Included in the prior year acquisitions amount above for 2017 are changes primarily associated with the acquisitions of festival promotion businesses located in the United States and Australia.

Included in the current year acquisitions amount above for 2016 is goodwill associated with the acquisitions of festival and concert promoters located in the United States, Australia and the United Kingdom, an artist management business with locations in the United States and Canada, and a digital content company located in the United States.

Included in the prior year acquisitions amount above for 2016 are changes primarily associated with the acquisitions of a festival promoter located in the United States and a venue management business in New Zealand.

The Company is in various stages of finalizing its acquisition accounting for recent acquisitions, which include the use of external valuation consultants, and the completion of this accounting could result in a change to the associated purchase price allocations, including goodwill and its allocation between segments.

Investments in Nonconsolidated Affiliates

The Company has investments in various affiliates which are not consolidated and are accounted for under the equity method of accounting. The Company records its investments in these entities in the balance sheet as investments in nonconsolidated affiliates reported as part of other long-term assets. The Company’s interests in these operations are recorded in the statements of operations as equity in losses (earnings) of nonconsolidated affiliates. For the year ended December 31, 2017, the Company’s investment in Venta de Boletos por Computadora S.A. de C.V, a 33% owned ticketing distribution services company is considered significant on an individual basis and certain other investments are considered significant on an aggregate basis. Summarized balance sheet and income statement information for these entities is as follows (at 100%):

		December 31,
		2017				2016
		(in thousands)
Current assets		$	125,883			$	58,099
Noncurrent assets		$	117,890			$	14,854
Current liabilities		$	133,586			$	39,207
Noncurrent liabilities		$	15,531			$	—
Noncontrolling interests		$	476			$	355

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Revenue		$	83,363			$	57,620			$	59,770
Operating income		$	23,691			$	24,673			$	27,443
Net income		$	18,048			$	18,652			$	20,481
Net income attributable to the common stockholders of the equity investees		$	17,927			$	18,670			$	20,400

The company reviews its nonconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. For the year ended December 31, 2016, the Company recorded impairment charges related to these investments of $16.5 million as equity in losses (earnings) of nonconsolidated affiliates, primarily related to investments in a digital content company and an online merchandise company that are located in the United States. See Note 5—Fair Value Measurements for further discussion of the inputs used to determine the fair values. There were no significant impairments of investments in nonconsolidated affiliates during 2017 and 2015.

NOTE 3—LONG-TERM DEBT

Long-term debt, which includes capital leases, consisted of the following:

					December 31,
					2017				2016
					(in thousands)
Senior Secured Credit Facility:
	Term loan A				$	175,750			$	187,625
	Term loan B				962,849				972,563
4.875% Senior Notes due 2024					575,000				575,000
5.375% Senior Notes due 2022					250,000				250,000
2.5% Convertible Senior Notes due 2019					275,000				275,000
Other long-term debt					99,393				104,397
Total principal amount					2,337,992				2,364,585
Less unamortized discounts and debt issuance costs					(38,033		)		(51,532		)
Total long-term debt, net of unamortized discounts and debt issuance costs					2,299,959				2,313,053
Less: current portion					347,593				53,317
Total long-term debt, net					$	1,952,366			$	2,259,736

Future maturities of long-term debt at December 31, 2017 are as follows:

	(in thousands)
2018	$	353,738
2019	42,240
2020	71,621
2021	114,546
2022	260,013
Thereafter	1,495,834
Total	$	2,337,992

All long-term debt without a stated maturity date is considered current and is reflected as maturing in the earliest period shown in the table above. See Note 5—Fair Value Measurements for discussion of fair value measurement of the Company’s long-term debt.

Senior Secured Credit Facility

In June 2017, the Company amended its term loan B under the senior secured credit facility reducing the applicable interest rate. At December 31, 2017, the Company’s senior secured credit facility consists of (i) a $190 million term loan A facility, (ii) a $970 million term loan B facility and (iii) a $365 million revolving credit facility. Subject to certain conditions, the Company has the right to increase the facility by an amount equal to the sum of $625 million and the aggregate principal amount of voluntary prepayments of the term B loans and permanent reductions of the revolving credit facility commitment, in each case, other than from proceeds of long-term indebtedness, and additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the credit agreement) is no greater than 3.25x. The revolving credit facility provides for borrowings up to the amount of the facility with sublimits of up to (i) $150 million for the issuance of letters of credit, (ii) $50 million for swingline loans, (iii) $200 million for borrowings in Euros or British Pounds and (iv) $50 million for borrowings in one or more other approved currencies. The senior secured credit facility is secured by (i) a first priority lien on substantially all of the tangible and intangible personal property of the Company’s domestic subsidiaries that are guarantors and (ii) a pledge of substantially all of the shares of stock, partnership interests and limited liability company interests of the Company’s direct and indirect domestic subsidiaries and 65% of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.

The interest rates per annum applicable to revolving credit facility loans and the term loan A under the senior secured credit facility are, at the Company’s option, equal to either LIBOR plus 2.25% or a base rate plus 1.25%, subject to stepdowns based on the Company’s net leverage ratio. The interest rates per annum applicable to the term loan B are, at the Company’s

option, equal to either LIBOR plus 2.25% or a base rate plus 1.25%. The Company is required to pay a commitment fee of 0.5% per year on the undrawn portion available under the revolving credit facility, subject to a stepdown based on the Company’s net leverage ratio, and variable fees on outstanding letters of credit.

For the term loan A, the Company is required to make quarterly payments increasing over time from $4.8 million to $28.5 million, with the balance due at maturity in October 2021. For the term loan B, the Company is required to make quarterly payments of $2.4 million, with the balance due at maturity in October 2023. The revolving credit facility matures in October 2021. The Company is also required to make mandatory prepayments of the loans under the credit agreement, subject to specified exceptions, from excess cash flow and with the proceeds of asset sales, debt issuances and other specified events.

Based on the Company’s outstanding letters of credit of $83.8 million, $281.2 million was available for future borrowings under the revolving credit facility at December 31, 2017.

4.875% Senior Notes

At December 31, 2017, the Company had $575 million principal amount of 4.875% senior notes due 2024. Interest on the notes is payable semi-annually in cash in arrears on May 1 and November 1 of each year beginning on May 1, 2017, and the notes will mature on November 1, 2024. The Company may redeem some or all of the notes, at any time prior to November 1, 2019, at a price equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest to the date of redemption, plus a ‘make-whole’ premium. The Company may redeem up to 35% of the aggregate principal amount of the notes from the proceeds of certain equity offerings prior to November 1, 2019, at a price equal to 104.875% of the aggregate principal amount, plus accrued and unpaid interest thereon, if any, to the date of redemption. In addition, on or after November 1, 2019, the Company may redeem some or all of the notes at any time at the redemption prices that start at 103.656% of their principal amount, plus any accrued and unpaid interest to the date of redemption. The Company must make an offer to redeem the notes at 101% of their aggregate principal amount, plus accrued and unpaid interest to the repurchase date, if it experiences certain defined changes of control.

5.375% Senior Notes

At December 31, 2017, the Company had $250 million principal amount of 5.375% senior notes due 2022 outstanding. Interest on the notes is payable semiannually in arrears on June 15 and December 15, and the notes will mature on June 15, 2022. The Company may redeem at its option some or all of the notes at redemption prices that start at 104.0313% of their principal amount, plus any accrued and unpaid interest to the date of redemption. The Company must make an offer to redeem the notes at 101% of the aggregate principal amount, plus any accrued and unpaid interest to the repurchase date, if it experiences certain defined changes of control.

2.5% Convertible Senior Notes

At December 31, 2017, the Company had $275 million principal amount of convertible senior notes due 2019 outstanding. The notes pay interest semiannually in arrears on May 15 and November 15 at a rate of 2.5% per annum. The notes will mature on May 15, 2019, and may not be redeemed by the Company prior to the maturity date. The notes will be convertible, under certain circumstances, until November 15, 2018, and on or after such date without condition, at an initial conversion rate of 28.8363 shares of the Company’s common stock per $1,000 principal amount of notes, subject to adjustment, which represents a 52.5% conversion premium based on the last reported sale price for the Company’s common stock of $22.74 on May 19, 2014. Upon conversion, the notes may be settled in shares of common stock or, at the Company’s election, cash or a combination of cash and shares of common stock. Assuming the Company fully settled the notes in shares, the maximum number of shares that could be issued to satisfy the conversion is currently 7.9 million.

If the Company experiences a fundamental change, as defined in the indenture governing the notes, the holders of the 2.5% convertible senior notes may require the Company to purchase for cash all or a portion of their notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any.

The carrying amount of the equity component of the notes is $22.0 million and the principal amount of the liability component (face value of the notes) is $275 million. As of December 31, 2017, the remaining period for the debt discount was approximately one year and the value of the notes, if converted and fully settled in shares, exceed the principal amount of the notes by $62.6 million. As of December 31, 2017 and 2016, the effective interest rate on the liability component of the notes was 5.0%.

The following table summarizes the amount of pre-tax interest cost recognized on the 2.5% convertible senior notes:

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
Interest cost recognized relating to:
Contractual interest coupon	$	6,875			$	6,875			$	6,856
Amortization of debt discount	5,080				4,833				4,599
Amortization of debt issuance costs	1,358				1,358				1,355
Total interest cost recognized on the notes	$	13,313			$	13,066			$	12,810

Other Long-term Debt

As of December 31, 2017, other long-term debt includes capital leases of $14.2 million, debt to noncontrolling interest partners of $44.0 million and $17.8 million of a subsidiary’s term loan and revolving credit facility. Total notes payable consist primarily of 34 notes with a weighted average cost of debt of 4.3% and maturities of up to four years.

Debt Extinguishment

In October 2016, the Company issued $575 million principal amount of 4.875% senior notes due 2024 and amended its senior secured credit facility. The amendment to the senior secured credit facility provided the existing term loan A and term loan B lenders with an option to convert their outstanding principal amounts into the new term loans. Excluding the outstanding principal amounts for lenders who elected to convert their outstanding term loans, total proceeds of $858.5 million were used to repay $123.3 million outstanding principal amount of the Company’s borrowings under the senior secured credit facility, to repay the entire $425 million principal amount of the Company’s 7% senior notes due 2020 and to pay the related redemption premium of $14.9 million on the 7% senior notes and accrued interest and fees of $38.4 million, leaving $256.9 million in additional cash available for general corporate purposes. The Company recorded $14.0 million as a loss on extinguishment of debt related to this refinancing in 2016. There were no significant gains or losses on extinguishment of debt recorded in 2017 or 2015.

Debt Covenants

The Company’s senior secured credit facility contains a number of restrictions that, among other things, require the Company to satisfy a financial covenant and restrict the Company’s and its subsidiaries’ ability to incur additional debt, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets, merge or consolidate, and pay dividends and make distributions (with the exception of subsidiary dividends or distributions to the parent company or other subsidiaries on at least a pro-rata basis with any noncontrolling interest partners). Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the credit facility becoming immediately due and payable. The senior secured credit facility agreement has a covenant, measured quarterly, that relates to total leverage. The consolidated total leverage covenant requires the Company to maintain a ratio of consolidated total funded debt to consolidated EBITDA (both as defined in the credit agreement) of 5.25x over the trailing four consecutive quarters through September 30, 2018. The consolidated total leverage ratio will reduce to 5.0x on December 31, 2018, 4.75x on December 31, 2019 and 4.5x on December 31, 2020.

The indentures governing the 4.875% senior notes and the 5.375% senior notes contain covenants that limit, among other things, the Company’s ability and the ability of its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of restricted subsidiaries to make payments to the Company, merge, consolidate or sell all of the Company’s assets, create certain liens, and engage in transactions with affiliates on terms that are not arms-length. Certain covenants, including those pertaining to incurrence of indebtedness, restricted payments, asset sales, mergers and transactions with affiliates will be suspended during any period in which the notes are rated investment grade by both rating agencies and no default or event of default under the indenture has occurred and is continuing. The 4.875% senior notes and the 5.375% senior notes contain two incurrence-based financial covenants, as defined, requiring a minimum fixed charge coverage ratio of 2.0x and a maximum secured indebtedness leverage ratio of 3.50x.

Some of the Company’s other subsidiary indebtedness includes restrictions on entering into various transactions, such as acquisitions and disposals, and prohibits payment of ordinary dividends. They also have financial covenants including minimum consolidated EBITDA to consolidated net interest payable, minimum consolidated cash flow to consolidated debt service and maximum consolidated debt to consolidated EBITDA, all as defined in the applicable debt agreements.

As of December 31, 2017, the Company believes it was in compliance with all of its debt covenants. The Company expects to remain in compliance with all of these covenants throughout 2018.

NOTE 4—DERIVATIVE INSTRUMENTS

The Company primarily uses forward currency contracts and options to reduce its exposure to foreign currency risk associated with short-term artist fee commitments. The Company may also enter into forward currency contracts to minimize the risks and/or costs associated with changes in foreign currency rates on forecasted operating income. At December 31, 2017 and 2016, the Company had forward currency contracts and options outstanding with notional amounts of $72.4 million and $173.8 million, respectively. These instruments have not been designated as hedging instruments and any change in fair value is reported in earnings during the period of the change. The Company’s foreign currency derivative activity, including the related fair values, are not material to any period presented.

The Company does not enter into derivative instruments for speculative or trading purposes and does not anticipate any significant recognition of derivative activity through the income statement in the future related to the instruments currently held. See Note 5—Fair Value Measurements for further discussion and disclosure of the fair values for the Company’s derivative instruments.

NOTE 5—FAIR VALUE MEASUREMENTS

Recurring

The Company currently has various financial instruments carried at fair value, such as marketable securities, derivatives and contingent consideration, but does not currently have nonfinancial assets and liabilities that are required to be measured at fair value on a recurring basis. The Company’s financial assets and liabilities are measured using inputs from all levels of the fair value hierarchy as defined in the FASB guidance for fair value. For this categorization, only inputs that are significant to the fair value are considered. The three levels are defined as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (i.e., market corroborated inputs).

Level 3—Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data.

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis, which are classified on the balance sheets as cash and cash equivalents, other current assets, other current liabilities and other long-term liabilities:

	Fair Value Measurements at December 31, 2017																Fair Value Measurements at December 31, 2016
	Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
					(in thousands)																(in thousands)
Assets:
Cash equivalents	$	58,063			$	—			$	—			$	58,063			$	55,081			$	—			$	—			$	55,081
Forward currency contracts	—				114				—				114				—				2,957				—				2,957
Total	$	58,063			$	114			$	—			$	58,177			$	55,081			$	2,957			$	—			$	58,038
Liabilities:
Forward currency contracts	—				1,276				—				1,276				—				363				—				363
Put option	—				—				5,768				5,768				—				—				5,147				5,147
Contingent consideration	—				—				70,039				70,039				—				—				44,195				44,195
Total	$	—			$	1,276			$	75,807			$	77,083			$	—			$	363			$	49,342			$	49,705

Cash equivalents consist of money market funds. Fair values for cash equivalents are based on quoted prices in an active market. Fair values for forward currency contracts are based on observable market transactions of spot and forward rates.

A third party has a put option to sell its noncontrolling interest in one of the Company’s subsidiaries to the Company and is carried at fair value using Level 3 inputs because the redemption date and redemption amount are not fixed. The put option is triggered by the occurrence of specific events, one of which is certain to occur, and requires the Company to buy the noncontrolling interest. The redemption amount for this put option is a variable amount based on a formula linked to historical earnings. The Company has recorded a current liability for this put option which is valued based on the historic results of that subsidiary. Changes in the fair value are recorded in selling, general and administrative expenses.

The Company has certain contingent consideration obligations related to acquisitions which are measured at fair value using Level 3 inputs. The amounts due to the sellers are based on the achievement of agreed-upon financial performance metrics by the acquired companies where the contingent obligation is either earned or not earned. The Company records the liability at the time of the acquisition based on the present value of management’s best estimates of the future results of the acquired companies compared to the agreed-upon metrics. Subsequent to the date of acquisition, the Company updates the original valuation to reflect current projections of future results of the acquired companies and the passage of time. Accretion of, and changes in the valuations of, contingent consideration are reported in selling, general and administrative expenses. See Note 6—Commitments and Contingent Liabilities for additional information related to the contingent payments.

Due to their short maturity, the carrying amounts of accounts receivable, accounts payable and accrued expenses approximated their fair values at December 31, 2017 and 2016.

The Company’s outstanding debt held by third-party financial institutions is carried at cost, adjusted for discounts or debt issuance costs. The Company’s debt is not publicly traded and the carrying amounts typically approximate fair value for debt that accrues interest at a variable rate, which are considered to be Level 2 inputs. The estimated fair values of the Company’s 5.375% senior notes, 4.875% senior notes and the 2.5% convertible senior notes were $259.2 million, $592.3 million and $310.6 million, respectively, at December 31, 2017. The estimated fair values of the 5.375% senior notes, 4.875% senior notes and the 2.5% convertible senior notes were $259.7 million, $578.5 million and $294.6 million, respectively, at December 31, 2016. The estimated fair value of the Company’s third-party fixed-rate debt is based on quoted market prices in active markets for the same or similar debt, which are considered to be Level 2 inputs. The Company has fixed-rate debt held by noncontrolling interest partners with a face value of $44.0 million and $35.7 million at December 31, 2017 and 2016, respectively. The Company is unable to determine a fair value for this debt.

Non-recurring

The following table shows the fair value of the Company’s financial assets that have been adjusted to fair value on a non-recurring basis which had a significant impact on the Company’s results of operations for the years ended December 31, 2017 and 2016:

		Fair Value				Fair Value Measurements Using												Loss
Description		Measurement				Level 1				Level 2				Level 3				(Gain)
		(in thousands)
2017
Goodwill		$	30,832			$	—			$	—			$	30,832			$	20,000
2016
Investment in nonconsolidated affiliates		$	—			$	—			$	—			$	—			$	16,455

During 2017, in conjunction with the Company’s annual impairment tests a goodwill impairment was recorded for the Artist Services (non-management) reporting unit in the Concerts segment in the amount of $20.0 million as a component of depreciation and amortization. The Company calculated these impairments using a combination of a discounted cash flow methodology, which uses both Level 2 and Level 3 inputs, and a market multiple methodology, which uses primarily Level 2 inputs. These key inputs include discount rates, market multiples, control premiums, revenue growth and estimates of future financial performance. See Note 1—The Company and Summary of Significant Accounting Policies and Note 2—Long-Lived Assets for further discussion of the Company’s methodology and this impairment.

As discussed in Note 2—Long-Lived Assets, during 2016, the Company believed certain of its investment balances were impaired based on financial information received regarding the bankruptcy or dissolution of two nonconsolidated affiliates, which are considered Level 3 inputs. There were no significant adjustments for the year ended December 31, 2017.

During 2015, the Company recorded gains related to investments in nonconsolidated affiliates of $9.1 million as a component of other expense (income), net. The gains were related to the acquisitions of a controlling interest in a festival promoter and an artist management business, and the remaining interest in a ticketing business, which were previously accounted for under the equity method. Prior to consolidation, the Company remeasured these investments to fair value using a discounted cash flow methodology. The key inputs in these fair value measurements include future cash flow projections,

including revenue and profit margins, discount rates and attrition rates. The key inputs used for these non-recurring fair value measurements are considered Level 3 inputs.

NOTE 6—COMMITMENTS AND CONTINGENT LIABILITIES

The Company leases office space, certain equipment and many of its concert venues. Some of the lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for the payment of utilities and maintenance by the Company. The Company also has non-cancelable contracts related to minimum performance payments with various artists, other event-related costs and nonrecoupable ticketing contract advances. In addition, the Company has commitments relating to additions to property, plant, and equipment under certain construction commitments for facilities and venues.

As of December 31, 2017, the Company’s future minimum rental commitments under non-cancelable operating lease agreements, minimum payments under non-cancelable contracts and capital expenditure commitments consist of the following:

	Non-cancelable Operating Leases				Non-cancelable Contracts				Capital Expenditures
	(in thousands)
2018	$	175,863			$	897,266			$	16,499
2019	170,751				235,324				3,889
2020	156,278				76,546				3,764
2021	126,317				39,076				4,181
2022	115,849				27,204				872
Thereafter	1,423,288				96,985				30,933
Total	$	2,168,346			$	1,372,401			$	60,138

Commitment amounts for non-cancelable operating leases and non-cancelable contracts which stipulate an increase in the commitment amount based on an inflationary index have been estimated using an inflation factor of 1.8% for North America, 2.9% for the United Kingdom, 1.7% for Denmark and 1.6% for the Netherlands.

Aggregate minimum rentals of $47.7 million to be paid to the Company in years 2018 through 2032 under non-cancelable subleases are excluded from the commitment amounts in the above table.

Total rent expense charged to operations for 2017, 2016 and 2015 was $220.1 million, $196.0 million and $159.5 million, respectively. In addition to the minimum rental commitments included in the table above, the Company has leases that contain contingent payment requirements for which payments vary depending on revenue, tickets sold or other variables. Contingent rent expense charged to operations for 2017, 2016 and 2015 was $48.3 million, $49.0 million and $43.7 million, respectively. The above table above does not include contingent rent or rent expense for events in third-party venues.

In connection with asset and business disposals, the Company generally provides indemnifications to the buyers including claims resulting from employment matters, commercial claims and governmental actions that may be taken against the assets or businesses sold. Settlement of these claims is subject to various statutory limitations that are dependent upon the nature of the claim.

Certain agreements relating to acquisitions provide for deferred purchase consideration payments at future dates. A liability is established at the time of the acquisition for these fixed payments. For obligations payable at a date greater than twelve months from the acquisition date, the Company applies a discount rate to calculate the present value of the obligations. As of December 31, 2017, the Company has accrued $109.6 million in other current liabilities and $6.1 million in other long-term liabilities and, as of December 31, 2016, the Company had accrued $18.1 million in other current liabilities and $7.2 million in other long-term liabilities, related to these deferred purchase consideration payments. The increase in other current liabilities during 2017 is primarily due to the timing of payment for the acquisition of the redeemable noncontrolling interest in a festival and concert promoter business located in the United States following the put redemption in December 2017.

The Company has contingent obligations related to acquisitions which are accounted for as business combinations. Contingent consideration associated with business combinations is recorded at fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled. The Company records these fair value changes in its statements of operations as selling, general and administrative expenses. The contingent consideration is generally subject to payout following the achievement of future performance targets and a portion is expected to be payable in the next twelve months. As of December 31, 2017, the Company has accrued $34.2 million in other current liabilities and $35.8 million in other long-term liabilities and, as of December 31, 2016, the Company had accrued $5.2 million in other current liabilities and $39.0 million in other long-term liabilities, representing the fair value of these estimated payments. The last

contingency period for which the Company has an outstanding contingent payment is for the period ending March 2026. See Note 5—Fair Value Measurements for further discussion related to the valuation of these contingent payments.

During 2006, in connection with the Company’s acquisition of a theatrical business, the Company guaranteed obligations related to a lease agreement. In the event of default, the Company could be liable for obligations through the end of 2035 which have future lease payments (undiscounted) of approximately $15.3 million as of December 31, 2017. The scheduled future minimum rentals for this lease for the years 2018 through 2022 are $1.6 million each year. The venues under the lease agreement were included in the sale of the Company’s North American theatrical business in 2008. The buyer has assumed the Company’s obligations under the guaranty, however, the Company remains contingently liable to the lessor. The Company believes that the likelihood of a material liability being triggered under this lease is remote, and no liability has been accrued for these contingent lease obligations as of December 31, 2017.

As of December 31, 2017 and 2016, the Company guaranteed the debt of third parties of approximately $18.3 million and $18.0 million, respectively, primarily related to maximum credit limits on employee and tour-related credit cards, obligations of a nonconsolidated affiliate and obligations under a venue management agreement.

Litigation

Songkick

In December 2015, a company referred to as Songkick filed an antitrust lawsuit against Live Nation and Ticketmaster L.L.C. in the United States District Court for the Central District of California. The suit alleged, among other complaints, that the defendants monopolized certain markets and engaged in certain exclusionary and anticompetitive conduct, ultimately causing harm to Songkick in a product market that it refers to as “artist presale ticketing services.” In the spring of 2016, Live Nation and Ticketmaster L.L.C. prevailed in a partial motion to dismiss, and shortly thereafter asserted counterclaims against Songkick, alleging that Songkick tortiously interfered with Ticketmaster’s venue contracts. In February 2017, Songkick filed an amended complaint, adding claims of trade secret misappropriation, statutory violations and related causes of action, arising from certain alleged conduct by a former Songkick employee who had gone to work for Ticketmaster.

In October 2017, the Court granted in part Live Nation’s motion to prevent Songkick’s damages expert from testifying, but declined to grant Live Nation’s motion for summary judgment. Following those rulings, Songkick was left with an antitrust claim (subject to treble damages) for lost profits and lost enterprise value, tort claims seeking the same, and a claim for unjust enrichment damages arising from alleged trade secret misappropriation. In January 2018, the Company and Songkick entered into a settlement agreement containing a mutual release of claims, thus resolving each party’s claims and counterclaims. Pursuant to the settlement agreement, in January 2018 the Company made a lump sum payment of $110.0 million, which has been accrued at December 31, 2017, and the parties jointly filed a stipulation of dismissal under which the parties dismissed with prejudice their respective claims and counterclaims. In a separate, concurrent transaction, the Company additionally purchased certain assets from Songkick, including its anti-scalping algorithm, API applications and patent portfolio.

Other Litigation

From time to time, the Company is involved in other legal proceedings arising in the ordinary course of its business, including proceedings and claims based upon purported violations of antitrust laws, intellectual property rights and tortious interference, which could cause the Company to incur significant expenses. The Company has also been the subject of personal injury and wrongful death claims relating to accidents at its venues in connection with its operations. As required, the Company has accrued its estimate of the probable settlement or other losses for the resolution of any outstanding claims. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, including, in some cases, estimated redemption rates for the settlement offered, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings.

NOTE 7—CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

Transactions Involving Related Parties

The following table provides details of the total revenue earned and expenses incurred from all related-party transactions:

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
Related-party revenue	$	135,996			$	123,521			$	109,720
Related-party expenses	$	14,176			$	8,996			$	8,668
Related-party acquisition related	$	—			$	2,145			$	—

The significant related-party transactions included in the table above are detailed below.

As of December 31, 2017 and 2016, the Company has payable balances of $23.1 million and $20.9 million, respectively, due to certain of the companies noted below.

Liberty Media

Two current members of our board of directors were originally nominated by Liberty Media pursuant to a stockholder agreement. These directors receive directors’ fees and stock-based awards on the same basis as other non-employee members of the Company’s board of directors.

The Company leases a venue from and provides ticketing services to a sports franchise owned by Liberty Media and pays royalty fees and non-recoupable ticketing contract advances to the sports franchise. The Company also receives transaction fees from the sports franchise for tickets the sports franchise sells using the Company’s ticketing software. From time to time, the Company purchases advertising from a satellite radio company that is a subsidiary of Liberty Media.

Legends

The Company’s Chief Executive Officer became a member of the board of directors of Legends Hospitality Holding Company, LLC (“Legends”) in February 2015. In 2017, the Company’s President assumed this role from the Chief Executive Officer. Legends provides concession services to certain of the Company’s owned or operated amphitheaters. The Company receives fees based on concession sales at each of the amphitheaters.

Senior Management

The Company conducts certain transactions in the ordinary course of business with companies that are owned, in part or in total, by certain members of senior management of the Company. These transactions primarily relate to ticketing services.

Transactions Involving Equity Method Investees

The Company conducts business with certain of its equity method investees in the ordinary course of business. Transactions primarily relate to venue rentals and ticketing services. Revenue of $2.8 million, $2.0 million and $2.0 million were earned in 2017, 2016 and 2015, respectively, and expenses of $1.8 million, $3.2 million and $1.5 million were incurred in 2017, 2016 and 2015, respectively, from these equity investees for services rendered or provided in relation to these business ventures.

NOTE 8—INCOME TAXES

Significant components of the provision for income tax expense (benefit) are as follows:

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Current:
Federal		$	(702	)		$	564			$	543
Foreign		50,970				29,902				23,811
State		4,117				5,454				7,379
Total current		54,385				35,920				31,733
Deferred:
Federal		(56,442		)		5,113				(355		)
Foreign		(15,841		)		(11,703		)		(8,278		)
State		744				(1,301		)		(978		)
Total deferred		(71,539		)		(7,891		)		(9,611		)
Income tax expense (benefit)		$	(17,154	)		$	28,029			$	22,122

The domestic income (loss) before income taxes was $(132.6) million, $1.1 million and $(21.4) million for 2017, 2016 and 2015, respectively. Foreign income before income taxes was $123.2 million, $47.2 million and $27.8 million for 2017, 2016 and 2015, respectively.

Significant components of the Company’s deferred tax liabilities and assets are as follows:

		December 31,
		2017				2016
		(in thousands)
Deferred tax liabilities:
Intangible assets		$	132,041			$	189,131
Prepaid expenses		7,882				8,770
Long-term debt		1,229				3,835
Other		7,533				6,077
Total deferred tax liabilities		148,685				207,813
Deferred tax assets:
Accrued expenses		68,168				45,839
Net operating loss carryforwards		466,023				563,461
Foreign tax and other credit carryforwards		62,136				59,977
Equity compensation		20,549				32,452
Other		2,725				—
Total gross deferred tax assets		619,601				701,729
Valuation allowance		596,437				681,566
Total deferred tax assets		23,164				20,163
Net deferred tax liabilities		$	(125,521	)		$	(187,650	)

Each reporting period, the Company evaluates the realizability of all of its deferred tax assets in each tax jurisdiction. As of December 31, 2017, the Company continued to maintain a full valuation allowance against its net deferred tax assets in certain jurisdictions due to sustained pre-tax losses. As a result of the valuation allowances, no tax benefits have been recognized for losses incurred in those tax jurisdictions in 2017, 2016 and 2015. The reduction in individual deferred tax liabilities and deferred tax assets in 2017 is primarily a result of revaluation of the federal deferred tax balances due to United States tax reform. The valuation allowance balance reduction in 2017 is primarily a result of the reduction in the net United States deferred tax assets revalued using the newly enacted federal tax rate of 21%.

During 2017 and 2016, the Company recorded net deferred tax liabilities of $9.0 million and $15.9 million, respectively, due principally to differences in financial reporting and tax bases in assets acquired in business combinations.

As of December 31, 2017, the Company has United States federal, state and foreign deferred tax assets related to net operating loss carryforwards of $123.1 million, $63.5 million and $279.4 million, respectively. Based on current statutory carryforward periods, these losses will expire on various dates beginning in 2025. The Company’s federal net operating loss is subject to statutory limitations on the amount that can be used in any given year.

The reconciliation of income tax computed at the United States federal statutory rates to income tax expense (benefit) is:

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Income tax expense (benefit) at United States statutory rates		$	(3,283	)		$	16,914			$	2,223
State income taxes, net of federal tax benefits		1,544				3,264				3,959
Differences between foreign and United States statutory rates		(10,887		)		(11,116		)		(5,356		)
United States tax reform rate change		(55,685		)		—				—
Non-United States income inclusions and exclusions		3,826				(2,749		)		655
United States income inclusions and exclusions		11,347				(1,317		)		2,095
Nondeductible items		11,380				3,210				4,736
Tax contingencies		1,955				2,390				2,063
Tax expense from acquired goodwill		4,489				5,936				4,483
Change in valuation allowance		18,067				11,820				7,116
Other, net		93				(323		)		148
		$	(17,154	)		$	28,029			$	22,122

Income tax expense is principally attributable to the Company’s earnings in foreign tax jurisdictions along with state income taxes.

Amounts included in differences between foreign and United States statutory rates are impacted by changes in the mix of international earnings subject to various tax rates which can differ greatly in their proximity to the United States statutory rate. In 2015, there was an increase in taxable foreign earnings in jurisdictions whose statutory rates are closer to the United States statutory rate which reduced the amount of this difference as compared to other years. The differences between statutory rates is also impacted by the Company’s Luxembourg affiliates and tax rulings which include the application of a reduced Luxembourg effective rate to the net income before tax resulting from the Company’s financing activities in Luxembourg.

On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted, which amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the TCJA reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate. The rate reduction will take effect on January 1, 2018. The TCJA will cause the Company’s United States deferred tax assets and liabilities to be revalued. Deferred income taxes result from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. The provisional amount recorded to revalue our United States net deferred tax liability balance was a $55.7 million income tax benefit in the Company’s consolidated statement of operations for the year ended December 31, 2017.

The change in the United States income exclusions and inclusions increased due to the one-time transition tax liability under the TCJA. The international provisions of the TCJA, which generally establish a territorial-style system for taxing foreign-sourced income of domestic multinational corporations, includes the requirement that companies pay a one-time transition tax on earnings of certain foreign-sourced subsidiaries that were previously tax-deferred and creates new taxes on certain foreign-sourced earnings. The Company recorded an estimated amount for the one-time transition liability for its foreign subsidiaries of approximately $25.8 million, which does not impact income tax expense for 2017 since the Company has reflected the transition tax liability as a reduction to existing fully-valued tax attribute carryforwards. Additional work is necessary for a more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to the amount will be recorded in the quarter of 2018 when the analysis is complete, but is not anticipated to impact tax expense due to the existence of the aforementioned fully-

valued tax attribute carryforwards. The transition tax inclusion was partially offset by an exclusion pertaining to tax deductions the Company receives for the vesting of restricted shares and non-qualified stock options.

Nondeductible items in 2017 include the Company’s goodwill impairment for Artist Services, which was not deductible for income tax purposes. There were no impairments of goodwill in 2016 or 2015.

The change in the valuation allowance in 2017 and 2016 resulted primarily from changes in the income within jurisdictions with full valuation allowances, including the United States.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

		Year Ended December 31,
		2017				2016				2015
		(in thousands)
Balance at January 1		$	15,117			$	14,022			$	12,619
Additions:
Increase for current year positions		807				—				1,606
Increase for prior year positions		15,498				1,978				274
Decrease for prior year positions		—				(3		)		—
Interest and penalties for prior years		2,745				546				525
Reductions:
Expiration of applicable statute of limitations		(1,233		)		—				—
Settlements for prior year positions		(2,033		)		(1,188		)		(852		)
Foreign exchange		(271		)		(238		)		(150		)
Balance at December 31		$	30,630			$	15,117			$	14,022

If the Company were to prevail on all uncertain tax positions, the net effect would be a decrease to its income tax provision of approximately $16.8 million. The remaining $13.8 million is offset by deferred tax assets that represent tax benefits that would be received in the event that the Company did not prevail on all uncertain tax positions. It is not expected that the total amounts of unrecognized tax benefits will increase or decrease materially within the next year.

The Company regularly assesses the likelihood of additional assessments in each taxing jurisdiction resulting from current and subsequent years’ examinations. Liabilities for income taxes are established for future income tax assessments when it is probable there will be future assessments and the amount can be reasonably estimated. Once established, liabilities for uncertain tax positions are adjusted only when there is more information available or when an event occurs necessitating a change to the liabilities. The Company believes that the resolution of income tax matters for open years will not have a material effect on its consolidated financial statements although the resolution of income tax matters could impact the Company’s effective tax rate for a particular future period.

The tax years 2009 through 2017 remain open to examination by the primary tax jurisdictions to which the company is subject.

NOTE 9—EQUITY

Dividends

The Company currently intends to retain future earnings, if any, to finance the expansion of its business. Therefore, it does not expect to pay any cash dividends in the foreseeable future. Moreover, the terms of the Company’s senior secured credit facility limit the amount of funds that the Company will have available to declare and distribute as dividends on its common stock. Payment of future cash dividends, if any, will be at the discretion of the Company’s board of directors in accordance with applicable laws after taking into account various factors, including the financial condition, operating results, current and anticipated cash needs, plans for expansion and contractual restrictions with respect to the payment of dividends.

Common Stock

Issued shares of common stock reported on the balance sheets include 1.6 million and 1.1 million, at December 31, 2017 and 2016, respectively, of unvested restricted stock awards that have not been included in the common shares issued reported on the statements of changes in equity. These shares will be reflected in the statements of changes in equity at the time of vesting.

During 2017, 2016 and 2015, the Company issued 3.5 million, 1.4 million and 1.6 million shares, respectively, of common stock in connection with stock option exercises and vesting of restricted stock awards.

Common Stock Reserved for Future Issuance

Common stock of approximately 25.8 million shares as of December 31, 2017 is reserved for future issuances under the stock incentive plan (including 14.2 million options, 1.6 million restricted stock awards and 2.5 million of deferred stock awards currently granted).

Noncontrolling Interests

Common securities held by the noncontrolling interests that do not include put arrangements exercisable outside of the control of the Company are recorded in equity, separate from the Company’s stockholders’ equity.

The purchase or sale of additional ownership in an already controlled subsidiary is recorded as an equity transaction with no gain or loss recognized in net income (loss) or comprehensive income (loss) as long as the subsidiary remains a controlled subsidiary. In 2017, the Company acquired all or additional equity interests in several companies that did not have a significant impact to equity either on an individual basis or in the aggregate. In 2016, the Company acquired all or additional equity interests in two artist management businesses located in the United States along with other smaller companies. In 2015, a subsidiary of the Company exchanged its equity interest in a ticketing business for a noncontrolling interest in the Company’s subsidiary that acquired the remaining equity interest of that ticketing business. In addition, the Company acquired the remaining equity interest in an artist management business in the United Kingdom. The following schedule reflects the change in ownership interests for these transactions:

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
Net income (loss) attributable to common stockholders of Live Nation	$	(6,015	)		$	2,942			$	(32,508	)
Transfers of noncontrolling interest:
Changes in Live Nation’s additional paid-in capital for purchases of noncontrolling interests, net of transaction costs	(3,616		)		(49,111		)		(6,555		)
Changes in Live Nation’s additional paid-in capital for sales of noncontrolling interests, net of transaction costs	—				1,424				11,899
Net transfers of noncontrolling interest	(3,616		)		(47,687		)		5,344
Change from net income (loss) attributable to common stockholders of Live Nation and net transfers of noncontrolling interests	$	(9,631	)		$	(44,745	)		$	(27,164	)

Redeemable Noncontrolling Interests

The Company is subject to put arrangements where the holders of the noncontrolling interests can require the Company to repurchase their shares at specified dates in the future or within specified periods in the future. Certain of these puts can be exercised earlier upon the occurrence of triggering events as specified in the agreements. The redemption amounts for these puts are either at a fixed amount, at fair value at the time of exercise or a variable amount based on a formula linked to earnings. In accordance with the FASB guidance for business combinations, the redeemable noncontrolling interests are recorded at their fair value at acquisition date. For put arrangements that are not currently redeemable, the Company accretes up to the estimated redemption value over the period from the date of issuance to the earliest redemption date of the individual puts, with the offset recorded to additional paid-in capital. Decreases in accretion are only recognized to the extent that increases had been previously recognized. The estimated redemption values that are based on a formula linked to future earnings are computed using projected cash flows each reporting period which take into account the current expectations regarding profitability and the timing of revenue-generating events. The balances are reflected in the Company’s balance sheets as redeemable noncontrolling interests outside of permanent equity. The decrease during the current year is primarily due to the acquisition of the remaining interest in a festival and concert promoter business located in the United States upon the exercise of the related put in December 2017.

The Company’s estimate of redemption amounts for puts that are redeemable at fixed or determinable prices on fixed or determinable dates for the years ended December 31, 2018, 2019, 2020, 2021 and 2022 are $1.5 million, $101.6 million, $87.6 million, $61.7 million and $25.6 million, respectively. The estimate for 2018 has decreased primarily due to the December 2017 put redemption noted above that was originally estimated to likely occur later in the redemption period.

Accumulated Other Comprehensive Income (Loss)

The following table presents changes in the components of AOCI, net of taxes, for the years ended December 31, 2017, 2016 and 2015:

		Foreign Currency Items				Other				Total
		(in thousands)
Balance at December 31, 2014		$	(69,404	)		$	(606	)		$	(70,010	)
Other comprehensive income (loss) before reclassifications		(41,895		)		223				(41,672		)
Amount reclassified from AOCI		—				25				25
Net other comprehensive income (loss)		(41,895		)		248				(41,647		)
Balance at December 31, 2015		(111,299		)		(358		)		(111,657		)
Other comprehensive loss before reclassifications		(64,947		)		(103		)		(65,050		)
Amount reclassified from AOCI		—				—				—
Net other comprehensive loss		(64,947		)		(103		)		(65,050		)
Balance at December 31, 2016		(176,246		)		(461		)		(176,707		)
Other comprehensive income before reclassifications		67,704				—				67,704
Amount reclassified from AOCI		—				461				461
Net other comprehensive income		67,704				461				68,165
Balance at December 31, 2017		$	(108,542	)		$	—			$	(108,542	)

The realized loss in other reclassified from AOCI during 2017 resulted from the termination of a pension plan. The realized loss in other reclassified from AOCI during 2015 consists of one interest rate swap agreement that expired on June 30, 2015.

Earnings per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share adjusts basic net income per common share for the effects of stock options, restricted stock and other potentially dilutive financial instruments only in the periods in which such effect is dilutive. The Company’s convertible senior notes are considered in the calculation of diluted net income per common share, if dilutive.

The calculation of diluted net income per common share includes the effects of the assumed exercise of any outstanding stock options, the assumed vesting of shares of restricted stock awards and the assumed conversion of the convertible senior notes where dilutive. For the years ended December 31, 2017, 2016 and 2015 there were no reconciling items to the weighted average common shares outstanding in the calculation of diluted net income per common share. The following table shows securities excluded from the calculation of diluted net income per common share because such securities were anti-dilutive:

		Year Ended December 31,
		2017			2016			2015
Options to purchase shares of common stock		14,238,589			16,283,434			16,308,739
Restricted and deferred stock awards—unvested		4,106,956			1,079,783			860,646
Conversion shares related to convertible senior notes		7,929,982			7,929,982			7,929,982
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding		26,275,527			25,293,199			25,099,367

NOTE 10—STOCK-BASED COMPENSATION

In December 2005, the Company adopted its 2005 Stock Incentive Plan, which has been amended and/or restated on several occasions. In connection with the Company’s merger with Ticketmaster Entertainment LLC, the Company adopted the Amended and Restated Ticketmaster 2008 Stock & Annual Incentive Plan. The plans authorize the Company to grant stock option awards, director shares, stock appreciation rights, restricted stock and deferred stock awards, other equity-based awards and performance awards. The Company has granted restricted stock awards, options to purchase its common stock and deferred stock awards to employees, directors and consultants of the Company and its affiliates under the stock incentive plans at no less than the fair market value of the underlying stock on the date of grant. The stock incentive plans contain anti-dilutive provisions that require the adjustment of the number of shares of the Company’s common stock represented by, and the exercise price of, each option for any stock splits or stock dividends.

The following is a summary of stock-based compensation expense recorded by the Company during the respective periods:

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
Selling, general and administrative expenses	$	24,364			$	15,687			$	16,380
Corporate expenses	18,391				17,036				16,981
Total	$	42,755			$	32,723			$	33,361

The increase in stock-based compensation expense for the year ended December 31, 2017 as compared to the prior year is due primarily to other equity awards granted to employees during 2017 that vested immediately. During 2017, the Company recorded stock-based compensation expense for these other awards of $10.0 million as a component of selling, general and administrative expenses.

As of December 31, 2017, there was $116.2 million of total unrecognized compensation cost related to stock-based compensation arrangements for stock options, restricted stock and deferred stock awards. This cost is expected to be recognized over a weighted-average period of 4.1 years.

Stock Options

Stock options are granted for a term not exceeding ten years and the nonvested options are generally forfeited in the event the employee, director or consultant terminates his or her employment or relationship with the Company or one of its affiliates. Any options that have vested at the time of termination are forfeited to the extent they are not exercised within the applicable post-employment exercise period provided in their option agreements. These options vest over two to five years.

The following assumptions were used to calculate the fair value of the Company’s options on the date of grant:

	Year Ended December 31,
	2017			2016			2015
Risk-free interest rate	1.87% - 2.27%			1.24% - 1.49%			1.47% - 1.75%
Dividend yield	0.0	%		0.0	%		0.0	%
Volatility factors	25.88% - 27.58%			29.42% - 36.11%			34.18% - 43.36%
Weighted average expected life (in years)	5.78			5.76			5.94

The following table presents a summary of the Company’s stock options outstanding at the dates given, and stock option activity for the period between such dates (“Price” reflects the weighted average exercise price per share):

	Year Ended December 31,
	2017							2016							2015
	Options			Price				Options			Price				Options			Price
	(in thousands, except per share data)
Outstanding January 1	16,283			$	13.55			16,309			$	13.54			16,999			$	13.78
Granted	1,164			33.48				1,103			19.53				1,667			25.32
Exercised	(3,138	)		16.27				(1,063	)		19.10				(1,098	)		14.50
Forfeited or expired	(70	)		24.05				(66	)		22.39				(1,259	)		31.58
Outstanding December 31	14,239			$	14.52			16,283			$	13.55			16,309			$	13.54
Exercisable December 31	11,906			$	12.00			12,628			$	12.01			11,177			$	11.54
Weighted average fair value per option granted				$	10.18						$	6.98						$	9.93

The total intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $57.5 million, $8.5 million and $14.1 million, respectively. Cash received from stock option exercises for the years ended December 31, 2017, 2016 and 2015 was $51.1 million, $20.3 million and $16.3 million, respectively.

There were 7.4 million shares available for future grants under the stock incentive plans at December 31, 2017. Upon share option exercise or vesting of restricted or deferred stock, the Company issues new shares or treasury shares to fulfill these grants. Vesting dates on the stock options range from January 2018 to December 2021, and expiration dates range from January 2018 to December 2027 at exercise prices and average contractual lives as follows:

Range of Exercise Prices		Outstanding as of 12/31/17			Weighted Average Remaining Contractual Life		Weighted Average Exercise Price				Exercisable as of 12/31/17			Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
		(in thousands)			(in years)						(in thousands)			(in years)
$2.75 - $4.99		1,713			1.2		$	2.82			1,713			1.2		$	2.82
$5.00 - $9.99		4,455			4.8		$	8.81			4,455			4.8		$	8.81
$10.00 - $14.99		2,540			3.3		$	11.34			2,540			3.3		$	11.34
$15.00 - $19.99		1,269			7.0		$	19.04			745			6.2		$	18.82
$20.00 - $24.99		1,842			6.2		$	21.15			1,467			6.1		$	21.15
$25.00 - $29.99		2,061			7.9		$	26.77			986			7.1		$	25.35
$30.00 - $44.99		359			9.9		$	43.50			—			0.0		$	—

The total intrinsic value of options outstanding and options exercisable as of December 31, 2017 was $606.1 million and $506.8 million, respectively.

Restricted Stock

The Company has granted restricted stock awards to its employees, directors and consultants under its stock incentive plans. These common shares carry a legend which restricts their transferability for a term of one to five years and are forfeited in the event the recipient’s employment or relationship with the Company is terminated prior to the lapse of the restriction. In addition, certain restricted stock awards require the Company or the recipient to achieve minimum performance targets in order for these awards to vest.

In 2017, the Company granted 0.9 million shares of restricted stock and 0.2 million shares of performance-based awards, respectively, under the Company’s stock incentive plans. These awards will all vest over one or four years with the exception of the performance-based awards which will vest within one to two years if the performance criteria are met.

In 2016, the Company granted 0.4 million shares of restricted stock and 0.4 million shares of performance-based awards, respectively, under the Company’s stock incentive plans. These awards will vest over one or four years with the exception of the performance-based awards which will generally vest within two years if the performance criteria are met. As of December 31, 2017, the performance-based criteria for these awards have been met unless otherwise forfeited.

In 2015, the Company granted 0.3 million shares of restricted stock and 0.2 million shares of performance-based awards, respectively, under the Company’s stock incentive plans. These awards will generally vest over one or four years with the exception of the performance-based awards which will generally vest within two years if the performance criteria are met. As of December 31, 2017, the performance-based criteria for these awards have been met unless otherwise forfeited.

The following table presents a summary of the Company’s unvested restricted stock awards outstanding at December 31, 2017, 2016 and 2015 (“Price” reflects the weighted average share price at the date of grant):

	Restricted Stock
	Awards			Price
	(in thousands, except per share data)
Unvested at December 31, 2014	1,171			$	16.18
Granted	456			26.11
Forfeited	(6	)		10.02
Vested	(760	)		14.74
Unvested at December 31, 2015	861			$	22.67
Granted	751			20.65
Forfeited	(50	)		21.63
Vested	(482	)		21.73
Unvested at December 31, 2016	1,080			$	21.67
Granted	1,132			35.97
Forfeited	(82	)		22.96
Vested	(523	)		21.89
Unvested at December 31, 2017	1,607			$	31.79

The total grant date fair market value of the shares issued upon the vesting of restricted stock awards during the years ended December 31, 2017, 2016 and 2015 was $11.5 million, $10.5 million and $11.2 million, respectively. As of December 31, 2017, there were 0.2 million restricted stock awards outstanding which require the Company or the recipient to achieve minimum performance targets in order for the awards to vest.

Deferred Stock

The Company has granted deferred stock awards to its employees where the employees are entitled to receive shares of common stock in the future. Deferred stock can only be settled in stock as determined at the time of the grant. All of the deferred stock awards require the Company to achieve minimum market conditions in order for these awards to issue and vest.

In 2017, the Company granted 2.5 million shares of deferred stock awards with market conditions under the Company’s stock incentive plans. These awards will all vest over five years if specified stock prices are achieved over a specific number of days during the five years.

The following table presents a summary of the Company’s unvested deferred stock awards outstanding at December 31, 2017 and 2016 (“Price” reflects the weighted average share price at the date of grant):

	Deferred Stock
	Awards			Price
	(in thousands, except per share data)
Unvested at December 31, 2016	—			$	—
Granted	2,500			26.69
Forfeited	—			—
Vested	—			—
Unvested at December 31, 2017	2,500			$	26.69

As of December 31, 2017, there were 2.5 million deferred stock awards outstanding which require the Company to achieve minimum market conditions in order for the awards to issue and vest.

NOTE 11—OTHER INFORMATION

	December 31,
	2017				2016
	(in thousands)
The following details the components of “Other current assets”:
Cash held in escrow	$	6,628			$	2,983
Inventory	17,467				15,114
Other	31,308				31,677
Total other current assets	$	55,403			$	49,774
The following details the components of “Other long-term assets”:
Long-term advances	$	359,528			$	208,977
Investments in nonconsolidated affiliates	105,271				82,032
Other	147,909				120,285
Total other long-term assets	$	612,708			$	411,294
The following details the components of “Accrued expenses”:
Accrued compensation and benefits	$	233,459			$	192,167
Accrued event expenses	247,380				192,599
Accrued insurance	97,606				65,941
Accrued legal	129,882				22,904
Collections on behalf of others	48,099				31,233
Other	352,820				276,650
Total accrued expenses	$	1,109,246			$	781,494
The following details the components of “Other current liabilities”:
Contingent and deferred purchase consideration	$	143,809			$	23,301
Other	16,829				15,754
Total other current liabilities	$	160,638			$	39,055
The following details the components of “Other long-term liabilities”:
Deferred revenue	9,569				5,506
Contingent and deferred purchase consideration	41,946				46,228
Other	122,876				98,057
Total other long-term liabilities	$	174,391			$	149,791

NOTE 12—SEGMENT DATA

For all periods presented, the Company’s reportable segments are Concerts, Sponsorship & Advertising and Ticketing. Prior to 2017, the Company reported an Artist Nation segment, which is now included in its Concerts segment based on the Company’s belief that the strategy behind artist management is to provide a full range of services related to concert promotion and to expand the Concerts line of business. In connection with this, there has been a change in the way the chief operating decision maker, as defined in the FASB guidance, makes decisions around allocations of resources and management responsibilities for this business.

The Concerts segment involves the promotion of live music events globally in the Company’s owned or operated venues and in rented third-party venues, the production of music festivals, the operation and management of music venues, the creation of associated content and the provision of management and other services to artist. The Sponsorship & Advertising segment manages the development of strategic sponsorship programs in addition to the sale of international, national and local sponsorships and placement of advertising such as signage, promotional programs, rich media offerings, including advertising associated with live streaming and music-related content, and ads across the Company’s distribution network of venues, events and websites. The Ticketing segment involves the management of the Company’s global ticketing operations, including providing ticketing software and services to clients, ticket resale services and online access for customers relating to ticket and event information, and is responsible for the Company’s primary ticketing website, www.ticketmaster.com.

Revenue and expenses earned and charged between segments are eliminated in consolidation. The Company’s capital expenditures below include accruals for amounts incurred but not yet paid for, but are not reduced by reimbursements received from outside parties such as landlords or replacements funded by insurance proceeds.

The Company manages its working capital on a consolidated basis. Accordingly, segment assets are not reported to, or used by, the Company’s management to allocate resources to or assess performance of the segments, and therefore, total segment assets have not been presented.

There were no customers that individually accounted for more than 10% of the Company’s consolidated revenue in any year.

The following table presents the results of operations for the Company’s reportable segments for the years ending December 31, 2017, 2016 and 2015:

	Concerts				Sponsorship & Advertising				Ticketing				Other				Corporate				Eliminations				Consolidated
	(in thousands)
2017
Revenue	$	7,892,076			$	445,148			$	2,143,800			$	21,012			$	—			$	(164,588	)		$	10,337,448
Direct operating expenses	6,641,071				78,725				1,170,121				18,746				—				(159,872		)		7,748,791
Selling, general and administrative expenses	1,119,335				87,268				681,948				19,172				—				—				1,907,723
Depreciation and amortization	226,315				27,669				200,777				432				5,057				(4,716		)		455,534
Loss (gain) on disposal of operating assets	(1,056		)		—				49				—				38				—				(969		)
Corporate expenses	—				—				—				—				134,972				—				134,972
Operating income (loss)	$	(93,589	)		$	251,486			$	90,905			$	(17,338	)		$	(140,067	)		$	—			$	91,397
Intersegment revenue	$	148,125			$	—			$	16,463			$	—			$	—			$	(164,588	)		$	—
Capital expenditures	$	109,801			$	6,701			$	105,317			$	149			$	25,926			$	—			$	247,894
2016
Revenue	$	6,283,521			$	377,618			$	1,827,930			$	7,978			$	—			$	(142,113	)		$	8,354,934
Direct operating expenses	5,202,097				60,218				956,956				2,902				—				(139,465		)		6,082,708

	Concerts				Sponsorship & Advertising				Ticketing				Other				Corporate				Eliminations				Consolidated
	(in thousands)
Selling, general and administrative expenses	950,060				71,089				510,490				16,811				—				—				1,548,450
Depreciation and amortization	194,715				18,206				185,925				2,940				4,433				(2,568		)		403,651
Loss (gain) on disposal of operating assets	(61		)		—				68				—				117				—				124
Corporate expenses	—				—				—				—				125,141				(80		)		125,061
Operating income (loss)	$	(63,290	)		$	228,105			$	174,491			$	(14,675	)		$	(129,691	)		$	—			$	194,940
Intersegment revenue	$	133,505			$	—			$	8,528			$	80			$	—			$	(142,113	)		$	—
Capital expenditures	$	87,306			$	2,161			$	91,285			$	1,028			$	7,824			$	—			$	189,604
2015
Revenue	$	5,382,965			$	333,726			$	1,639,564			$	3,176			$	—			$	(113,700	)		$	7,245,731
Direct operating expenses	4,450,517				47,760				808,697				1,068				—				(111,569		)		5,196,473
Selling, general and administrative expenses	863,516				57,681				488,483				2,175				—				—				1,411,855
Depreciation and amortization	201,775				9,932				184,129				46				3,490				(2,131		)		397,241
Loss on disposal of operating assets	645				—				26				—				174				—				845
Corporate expenses	—				—				—				—				107,945				—				107,945
Operating income (loss)	$	(133,488	)		$	218,353			$	158,229			$	(113	)		$	(111,609	)		$	—			$	131,372
Intersegment revenue	$	104,571			$	—			$	9,129			$	—			$	—			$	(113,700	)		$	—
Capital expenditures	$	41,977			$	4,836			$	93,323			$	—			$	5,011			$	—			$	145,147

The following table provides revenue and long-lived assets for the Company’s foreign operations included in the consolidated financial statements:

		United Kingdom Operations				Other Foreign Operations				Total Foreign Operations				Total Domestic Operations				Consolidated Total
		(in thousands)
2017
Revenue		$	785,174			$	2,779,324			$	3,564,498			$	6,772,950			$	10,337,448
Long-lived assets		$	74,551			$	127,173			$	201,724			$	684,212			$	885,936
2016
Revenue		$	683,464			$	1,882,583			$	2,566,047			$	5,788,887			$	8,354,934
Long-lived assets		$	69,380			$	104,780			$	174,160			$	577,376			$	751,536
2015
Revenue		$	672,826			$	1,534,629			$	2,207,455			$	5,038,276			$	7,245,731
Long-lived assets		$	74,517			$	126,194			$	200,711			$	530,571			$	731,282

NOTE 13—QUARTERLY RESULTS OF OPERATIONS (Unaudited)

		March 31,								June 30,								September 30,								December 31,
		2017				2016				2017				2016				2017				2016				2017				2016
		(in thousands)
Revenue		$	1,413,181			$	1,207,716			$	2,818,693			$	2,179,258			$	3,559,418			$	3,170,416			$	2,546,156			$	1,797,544
Operating income (loss)		$	(21,366	)		$	(33,290	)		$	113,433			$	74,159			$	201,347			$	191,286			$	(202,017	)		$	(37,215	)
Net income (loss)		$	(47,770	)		$	(55,954	)		$	80,555			$	36,461			$	148,770			$	132,761			$	(173,781	)		$	(92,971	)
Net income (loss) attributable to common stockholders of Live Nation		$	(32,993	)		$	(44,518	)		$	81,478			$	37,741			$	136,393			$	111,079			$	(190,893	)		$	(101,360	)
Basic net income (loss) per common share available to common stockholders of Live Nation		$	(0.22	)		$	(0.29	)		$	0.31			$	0.13			$	0.56			$	0.51			$	(1.12	)		$	(0.58	)
Diluted net income (loss) per common share available to common stockholders of Live Nation		$	(0.22	)		$	(0.29	)		$	0.29			$	0.13			$	0.53			$	0.49			$	(1.12	)		$	(0.58	)

The following summarizes unusual or infrequent items effecting the quarterly results of operations:

2017

The Company accrued $110.0 million in the fourth quarter of 2017 in connection with a legal settlement entered into in January 2018. See Note 6—Commitments and Contingent Liabilities for further discussion of the settlement.

The Company recorded a goodwill impairment of $20.0 million in the fourth quarter of 2017 in connection with its annual impairment test. See Note 2—Long-Lived Assets and Note 5—Fair Value Measurements for further discussion.

The Company recorded a $55.7 million income tax benefit in connection with the 2017 tax reform. See Note 8—Income Taxes for further discussion of the impact of the 2017 tax reform.

The Company recorded net foreign exchange rate gains of $2.7 million and $4.4 million in the first and second quarters of 2017, respectively, and net foreign exchange rate losses of $4.2 million in the fourth quarter of 2017, as a component of other expense (income), net.

2016

In the third quarter of 2016, the Company recorded impairment charges of $15.1 million related to investments in a digital content company and an online merchandise company as a component of equity in losses (earnings) of nonconsolidated affiliates. See Note 5—Fair Value Measurements for further discussion of the inputs used to determine the fair values.

In the fourth quarter of 2016, the Company recorded a $14.0 million loss on extinguishment of debt related to the refinancing of certain of its debt. See Note 3—Long-Term Debt for further discussion.

The Company recorded net foreign exchange rate gains of $7.8 million in the first quarter of 2016 and net foreign exchange rate losses of $6.6 million, $1.9 million and $8.0 million in the second, third and fourth quarters of 2016, respectively, as a component of other expense (income), net.