Our success depends, in large part, upon our ability to recruit, train and retain athletic performers who have the physical presence, acting ability and charisma to portray characters in our live events, video programming (including our television, WWE Network and televised programming.other programming) and films. We cannot guarantee that we will be able to continue to identify train and retaintrain these performers. Additionally, throughout our history, performers from time to time have stopped working for us for any number of reasons, and we cannot guarantee that we will be able to retain our current performers either during the terms of their contracts or when their contracts expire. Our failure to attract and retain key performers, an increase in the costs required to attract and retain such performers, or a serious or untimely injury to, or the death of, or unexpected or premature loss or retirement for any reason of, any of our key performers could lead to a decline in the appeal of our storylines and the popularity of our brand of entertainment, whichentertainment.  Scheduling conflicts for talent services may also affect certain productions. Any of the foregoing issues could adversely affect our operating results.

Our operations are affected by consumer tastes and entertainment trends, which are unpredictable and subject to change and may be affected by changes in the social and political climate. Our programming is created to evoke a passionate response from our fans. Changes in our fans’ tastes or a material change in the perceptions of our business partners, including our distributors, sponsors and licensees, whether as a result of the social and political climate or otherwise, could adversely affect our operating results.

The unexpected loss of the services of Vincent K. McMahon could adversely affect our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results.

In addition to serving as Chairman of our Board of Directors and Chief Executive Officer, Mr. McMahon leads the creative team that develops the storylines and the characters for our televised programming (including our television, WWE Network and other programming) and live events.  Mr. McMahon, fromFrom time to time, Mr. McMahon has also been an important member of our cast of performers. The loss of Mr. McMahon due to unexpected retirement, disability, death or other unexpected termination for any reason could have a material adverse effect on our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results.

Production of televisionvideo programming by independent producers is generally not directly regulated by the federal or state governments in the United States, the marketplaceStates. However, under FCC regulations in many instances we are responsible for closed captioning our television and internet programming and any failure to remain in compliance with these regulations could expose us to substantial costs and adverse publicity. The markets for programming (including television and WWE Network programming) in the United States isand internationally may be substantially affected significantly by government regulations applicable to, as well as social and political influences on, television stations television networks and cable and satellite television systems and channels.networks. We voluntarily designate the suitability of each of our television showsand WWE Network programs using standard industry ratings, and all of our programming currently has a PG rating.ratings. Domestic and foreign governmental and private-sector initiatives relating to the content of mediavideo programming are announced from time to time. Any failure by us to meet these governmental policies andand/or private-sector expectations could restrict our program content and adversely affect our levels of viewership andand/or the number of WWE Network subscribers, result in adverse publicity and/or impact our operating results.

In thesome United States and some foreign jurisdictions, athletic commissions and other applicable regulatory agencies require us to obtain licenses for promoters, medical clearances and/or other permits or licenses for performers and/or permits for events in order for us to promote and conduct our live events. Foreign jurisdictions require visas for personnel and talent at international live events. In international markets, third party promoters generally oversee permitting and regulatory matters. In the event that we fail to comply with the regulations of a particular jurisdiction, whether through our acts or omissions or those of our third party promoters, we may be prohibited from promoting and conducting our live events in that jurisdiction. The inability to present our live events over an extended periodin jurisdiction(s), in addition to the lost revenues and expenses of time or in a number of jurisdictionsthe missed event(s), could lead to a decline in the various revenue streams generated from our live events,in such jurisdiction(s), which could adversely affect our operating results.

Intellectual property is material to all aspects of our business. Our inability to protect ourWe have a large portfolio of registered and unregistered trademarks, service marks, copyrighted material and characters, trade names and other intellectual property rights from piracy, counterfeiting or other unauthorized use could negatively affect our business materially. We expend substantial cost and effort in an attempt to maintain and protect our intellectual property and to maintain compliance vis-à-vis other parties’ intellectual property. We have a large portfolio of registered and unregistered trademarks and service marks worldwide and maintain a large catalog of copyrighted works, including copyrights to our television programming, music, photographs, books, magazines and apparel art. A principal focus of our efforts is to protect the intellectual property relating to our originally created characters portrayed by our performers, which encompasses images, likenesses, names and other identifying indicia of these characters.worldwide. We also own a large number of Internet website domain names and operate a network of developed, content-based sites, which facilitate and contribute to the

We hold numerous live events each year. This schedule exposes our performers and our employees who are involved in the production of those events to the risk of travel and performance-related accidents, the consequences of which are not fully covered by insurance. The physical nature of our events exposes our performers to the risk of serious injury or death. Although our performers, as independent contractors, are responsible for maintaining their own health, disability and life insurance, we self-insure medical costs for our performers for injuries that they incur while performing. We also self-insure a substantial portion of any other liability that we could incur relating to such injuries. Liability to us resulting from any death or serious injury sustained by one of our performers while performing, to the extent not covered by our insurance, could adversely affect our business, financial condition and operating results. 

As noted below, we have recently been named as aare the defendant in litigation claiming that professional wrestling as currently and historically performed by us has resulted in significant injuries to our performers including, but not limited to, chronic traumatic encephalopathy ofor "CTE".

We hold numerous large live events each year, both domestically and internationally. Certain risks are inherent in large events of thisthe type we perform as well as the travel to and from them. Althoughthem, and we believe we take appropriateare required to expend substantial resources on safety matters such as security. Risks of travel and financial precautions in connection with ourlarge live events possible difficulties could occur includinginclude air and land travel interruption or accidents, the spread of illness, injuries resulting from building problems, pyrotechnics or other equipment malfunction, terrorism or other violence, local labor strikes and other "force majeure"force majeure type events. These issues could result in personal injuries or deaths, canceled events and other disruptions to our business for which we do not carryour business interruption insurance ormay be insufficient. Any of these occurrences also could result in liability to other parties.parties for which we may not have insurance. Any of these risks could adversely affect our business, financial condition and/or results of operations.

We have substantial capitalized film costs. The accounting for our film business in accordance with generally accepted accounting principles entails significant judgment used to develop estimates of expected future revenues from films. If expected revenue from one or more of our films does not materialize because audience demand does not meet expectations, our estimated revenues may not be sufficient to recoup our investment in the film. If actual revenues are lower than our estimated revenues or if costs are higher than expected, we may be required to record an impairment charge and write down the capitalized costs of the film.  No assurance can be given that we will not record additional impairment charges in future periods. In addition, capitalized film costs are reflected net of certain production tax incentives granted by various governmental authorities. Our ability to realize these credits may be limited by changes in the legislation governinglaws and regulations relating to the incentives and/or the economic environment. The inability to realize these credits would have the effect of increasing our overall production costs.

We have entered into new or complementary businesses and made equity and debt investments in other companies in the past and plan to continue to do so in the future. We may also enter into business combination transactions, make acquisitions or enter into strategic partnerships, joint ventures or alliances. Risks of this expansion and/or these investments and transactions may include, among other risks: potential diversion of management’s attention and other resources, including available cash, from our existing businesses; unanticipated liabilities or contingencies; reduced earnings due to increased amortization,amortization; loss on investments due to poor performance by the business invested in; inability to successfully integrate a new business; revaluations of debt and equity investments as well as market, credit and interest-rate risks (any of which could result in  impairment charges and other costs;costs); competition from other companies with more experience in such businesses; and possible additional regulatory requirements and compliance costs which could affect our business, financial condition and operating results.

The Company faces the risk of a security breach or disruption, whether through external cyber intrusion or from persons with access to systems inside our organization. Although theThe Company makescommits significant effortspersonnel and financial resources to maintain the security of its computer systems, and has implementedincluding implementing various measures to monitor and manage the risk of a security breach or disruption, thereand to plan for the mitigation of losses if such breach or disruption were to occur. There can be no assurance that these security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging or that the Company would be promptly aware of them.them or able to mitigate damages from them, if any such breach or disruption were to occur. The Company also utilizes third party service providers in several aspects of its operations (including WWE Network), and these third parties are also subject to risks of security breach or disruption. The Company is not able to assure the effectiveness of security among our service providers. The Company and certain of its third party service providers receive personal information through web services including WWE Network. In many instances this information is subject to the Company's privacy policies. Personal information received by our service providers includes credit card information in certain instances, most notably WWE Network, our live event merchandise sales and WWEShop, the Company's internet retail operations. The Company expends significant effort to ensure compliance with its privacy policy and to ensure that our service providers safeguard credit card information including contractually requiring those providers to remain compliant with applicable PCI Data Security Standards. However, a significant security breach or other disruption involving the Company'scomputer systems of the Company or its one or more of its service providers’ computer systemsproviders could disrupt the proper functioning of these systems and therefore the Company's  operations (for which we likely will not carry sufficient insurance); result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information; require significant management attention and resources to remedy the damages that could result;result (if, in fact, they can be remedied), and subject

the Company to litigation or damage to its reputation. Implementation of the GDPR may enhance this risk. Any or all of these could have a negative impact on our financial condition or results of operations.

Our operations are affected by general economic conditions, which affectincluding consumers’ disposable income. Theincome, which has a direct material impact on the demand for entertainment and leisure activities tends to be highly sensitive to the level of consumers’ disposable income.activities. Declines in general economic conditions could reduce the level of discretionary income that our fans and potential fans have to spend on our live and televised entertainment, includingevents, programming (including WWE Network,Network), films and consumer products, which could adversely affect our revenues. Volatility and disruption of financial markets could limit the ability of our clients’, licensees’sponsors, licensees and distributors’ abilitydistributors to obtain adequate financing to maintain operations and result in a decrease in sales volume that could have a negative impact on our business, financial condition and results of operations. Our television partners derive revenues from the sale of advertising. We also sell advertising directly on our website, on WWE Network and, depending upon the distribution methods used to monetize additional content, we may have additional advertising to sell. We sell sponsorship packages to our live events and certain other of our services. Softness in the advertising markets due to a weak economic environment or otherwise, could adversely affect our revenues or the financial viability of our distributors.

Substantial portions of our accounts receivable are from distributors of ourfor WWE Network, pay-per-view, television and home video programming and from licensees who produce consumer products containing our intellectual property. The concentration of our accounts receivable across a limited number of distributors and licensees subjects us to individual credit risk with respect to such parties. Thesethese parties maywho could become insolvent or declare bankruptcy, rendering collection impossible. Certain of the parties are located overseas which can make collections more difficult orand, at times, economically unfeasible. Additionally, adverse changes in general economic conditions and/or contraction in global credit markets could precipitate liquidity problems among our debtors, including our key distributors and/or licensees. This could increase our exposure to losses from bad debts and have a material adverse effect on our business, financial condition and results of operations.

We believe we have sufficient liquidity for at least the next twelve months for our operating needs and(including the payment of our dividenddividend). However, our ability to make scheduled principal and interest payments on the Convertible Notes and under the Revolving Credit Facility, the Asset-Backed Facilities and any other indebtedness that may be outstanding at the time will depend on our future performance, which is subject to economic, financial, competitive and other factors beyond our control, including the items described elsewhere in these Risk Factors. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and provide for 2015.all our other uses of cash including capital and operating expenditures and paying our dividend. If we are incorrectunable to generate sufficient cash flow, we could be required to adopt one or more alternatives which, assuming they are, in this assessmentfact, available, could be onerous, dilutive or otherwise affect our operations and/or the market price of our liquidityCommon Stock. Such alternatives could include, for example, substantially reducing our cost structure, selling assets, reducing or eliminating our dividend, obtaining additional equity capital and/or refinancing/replacing the indebtedness. We may not be able to engage in any of these activities on desirable terms or at all due to our then existing financial condition, market conditions, regulatory matters or contractual obligations (including, for example, any restrictions under our Revolving Credit Facility or other credit agreement or debt instruments that may exist at that time). 

Any failure to make a required payment under our indebtedness may constitute a default under that indebtedness and under other indebtedness due to cross-default provisions and could trigger acceleration clauses causing the obligations to become immediately due and payable. The occurrence of one or more of these risks could materially and adversely affect our financial condition and operating results.

The accounting method for convertible debt securities that may be settled in cash, such as the Convertible Notes, could have a material effect on our reported financial results.

Under ASC 470-20, Debt with Conversion and Other Options, an entity must separately account for the liability and equity components of the convertible debt instruments (such as the Convertible Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for the Convertible Notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on our Consolidated Balance Sheets, and the value of the equity component would be treated as original issue discount for purposes of accounting for the debt component of the Convertible Notes. As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented as a result of the amortization of the discounted carrying value of the Convertible Notes to their face amount over the term of the Convertible Notes. We will report lower net income in our financial results because ASC 470-20 will require interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the Convertible Notes.

In addition, under certain circumstances, convertible debt instruments (such as the Convertible Notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the Convertible Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Convertible Notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to obtain adequate capital,use the treasury stock method in accounting for the shares issuable upon conversion of the Convertible Notes, then our business, financial condition, liquiditydiluted earnings per share would be adversely affected. Conversion of our Convertible Notes and operating results could be materially adversely affected.

By its nature, the outcome of such litigation is inherently difficult to assess and quantify, and theits continuing defense against such claims or actions can be costly and time consuming for management.is costly. Any adverse judgment in such other litigation significantly in excess of our insurance coverageor settlement could adversely affecthave a material adverse impact on our financial condition or results of operations.

We believe that the price of our stock generally reflects highcertain market expectations for our future operating results.results, including expectations for a substantial improvement in operating results due, in whole or in part, to the upcoming domestic television negotiation. Any failure to meet or delay in meeting these expectations, including as a result of the domestic television negotiation, the failure of

WWE Network to achieve expectationsexpected subscriber numbers or as a result of any of the other events, conditions and/or circumstances set forth in these Risk Factors could cause the market price of our stock to decline.

We have Class A common stock and Class B common stock. The holders of Class A common stock generally have rights identical to holders of Class B common stock, except that holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to ten votes per share. Holders of both classes of common stock generally will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by applicable Delaware law.

A substantial majority of the issued and outstanding shares of Class B common stock is owned beneficially by Vincent K. McMahon. Mr. McMahon and, as a result, he controls a majority of the voting power of the issued and outstanding shares of our common stock. Through his beneficial ownership of a substantial majority of our Class B common stock Mr. McMahonand can effectively can exercise control over our affairs, and hisaffairs. His interest could conflict with the holders of our Class A common stock. TheMcMahon’s voting power of Mr. McMahon through his ownership of our Class B common stockcontrol could discourage or preclude others from initiating potential mergers, takeovers or other change of control transactions. As a result, the market price of our Class A common stock could decline.

Historically, as a result of our relatively small public float, our Class A common stock has been less liquid than the common stock of companies with broader public ownership, and the trading prices for our Class A common stock have been more volatile than generally may be the case for more widely-held common stock. Among other things, trading of a relatively small volume of our Class A common stock may have a greater impact on the trading price of our Class A common stock than would be the case if our public float were larger.

It

It

Our principal properties consist of the following:



Facility		Location		Square Feet		Owned/ Leased		Expiration Date of Lease
Corporate offices		Stamford, CT		94,200		Owned		—
Warehouse space		Norwalk, CT		121,500		Leased		January 2020
Production facilities, office and warehouse space		Stamford, CT		203,200	(1)	Owned		—
Corporate offices		Stamford, CT		33,100		Leased		Various through May 2020
WWE Performance Center and warehouse space		Orlando, FL		47,800		Leased		Various through November 2020
Sales offices		Various		28,200		Leased		Various through December 2026
WWE Studios office		Los Angeles, CA		13,200		Leased		April 2020
Warehouse space		Stamford, CT		5,600		Leased		December 2026

	(1)
Facility		Location		Square Feet			Owned/Leased		Expiration Date Includes 96,200 square feet of Lease
Corporate offices		Stamford, CT		114,300			Owned		—
Warehouse space		Norwalk, CT		121,500			Leased		January 2020
Production facility		Stamford, CT		90,000			Owned		—
Corporate offices and production facilities		Stamford, CT		41,400			Leased		Various through September 2016
Training Facility		Orlando, FL		39,000			Leased		November 2017
Sales offices		Various		27,900			Leased		Various through October 2022
WWE Studios leased to other tenants within the office		Los Angeles, CA		11,100			Leased		April 2020
Warehouse space		Stamford, CT		5,600			Leased		May 2015
Studio space		Stamford, CT		2,500			Leased		July 2015 building.

All of the facilities listed above are utilized in our Media Division, in Live Events, and in our Consumer Products Division and in our Corporate and Other segment, with the exception of the WWE Studios office in Los Angeles, which primarily focuses on our WWE Studios segment.

It

Itemem 3.  Legal Proceedings

On July 26, 2014, the Company received notice of a lawsuit filed in the United States District Court for the District of Connecticut, entitled Warren Ganues and Dominic Varriale, on behalf of themselves and all others similarly situated, v. World Wrestling Entertainment, Inc., Vincent K. McMahon and George A. Barrios, alleging violations of federal securities laws based on certain statements relating to the negotiation of WWE’s domestic television license.  The complaint seeks certain unspecified damages.  A nearly identical lawsuit was filed one month later entitled Curtis Swanson, on behalf of himself and all others similarly situated, v. World Wrestling Entertainment, Inc., Vincent K. McMahon and George A. Barrios.  Both lawsuits are purported securities class actions subject to the Private Securities Litigation Reform Act of 1995 (“PSLRA”).  On September 23-24, five putative plaintiffs filed motions to be appointed lead plaintiff and to consolidate the two cases pursuant to the PSLRA.  Following a hearing on October 29, 2014, the Court issued an order dated November 5, 2014 appointing Mohsin Ansari as Lead Plaintiff and consolidating the two actions.  On January 5, 2015, the Lead Plaintiff filed an amended complaint.  Among other things, the amended complaint adds Stephanie McMahon Levesque and Michelle D. Wilson as named defendants.While these lawsuits are in the early stages, the Company believes the claims are without merit and intends to vigorously defend itself against them.

On October 23, 2014, a purported class action lawsuit was filed in the United StatesU. S. District Court for the District of Oregon, entitled William Albert Haynes III, on behalf of himself and others similarly situated, v. World Wrestling Entertainment, Inc., This complaint was amended on January 30, 2015 and alleged that the Company ignored, downplayed, and/or failed to disclose the risks associated with traumatic brain injuries suffered by WWE’s performers and seeks class action status. On March 31, 2015, the Company filed a motion to dismiss the first amended class action complaint in its entirety or, if not dismissed, to transfer the lawsuit to the U.S. District Court for the District of Connecticut. Without addressing the merits of the Company's motion to dismiss, the Court transferred the case to Connecticut on June 25, 2015. The plaintiffs filed an objection to such transfer, which was denied on July 27, 2015. On January 16, 2015, a purported class actionsecond lawsuit was filed in the United StatesU. S. District Court for the Eastern District of Pennsylvania, entitled Evan Singleton and Vito LoGrasso, individually and on behalf of all others similarly situated, v. World Wrestling Entertainment, Inc.,both alleging thatmany of the same allegations as Haynes. On February 27, 2015, the Company ignored, downplayed, and/or failedmoved to disclosetransfer venue to the risks associated with traumatic brain injuries suffered by WWE’s performers.  TheseU.S. District Court for the District of Connecticut due to forum-selection clauses in the contracts between WWE and the plaintiffs and that motion was granted on March 23, 2015. The plaintiffs filed an amended complaint on May 22, 2015 and, following a scheduling conference in which the court ordered the plaintiffs to cure various pleading deficiencies, the plaintiffs filed a second amended complaint on June 15, 2015. On June 29, 2015, WWE moved to dismiss the second amended complaint in its entirety. On April 9, 2015, a third lawsuit was filed in the U. S. District Court for the Central District of California, entitled Russ McCullough, a/k/a “Big Russ McCullough,” Ryan Sakoda, and Matthew R. Wiese a/k/a “Luther Reigns,” individually and on behalf of all others similarly situated, v. World Wrestling Entertainment, Inc., asserting similar allegations to Haynes. The Company again moved to transfer the lawsuit to Connecticut due to forum-selection clauses in the contracts between WWE and the plaintiffs, which the California court granted on July 10, 2015. On September 21, 2015, the plaintiffs amended this complaint and, on November 16, 2015, the Company moved to dismiss the amended complaint. Each of these suits both seekseeks unspecified actual, compensatory and punitive damages and injunctive relief, including ordering medical monitoring.  The Haynes and McCullough cases purport to be class actions.  On February 18, 2015, a lawsuit was filed in Tennessee state court and subsequently removed to the U.S. District Court for the Western District of Tennessee, entitled Cassandra Frazier, individually and as next of kin to her deceased husband, Nelson Lee Frazier, Jr., and as personal representative of the Estate of Nelson Lee Frazier, Jr. Deceased, v. World Wrestling Entertainment, Inc.  A similar suit was filed in the U. S. District Court for the Northern District of Texas entitled Michelle James, as mother and next friend of Matthew Osborne, minor child, and Teagan Osborne, a minor child v. World Wrestling Entertainment, Inc. These lawsuits contain many of the same allegations as the other lawsuits alleging traumatic brain injuries

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and further allege that the injuries contributed to these former talents’ deaths. WWE moved to transfer the Frazier and Osborne lawsuits to the U.S. District Court for the District of Connecticut based on forum-selection clauses in the decedents’ contracts with WWE, which motions were granted by the respective courts. On November 23, 2015, amended complaints were filed in Frazier and Osborne, which the Company moved to dismiss on December 16, 2015 and December 21, 2015, respectively. On November 10, 2016, the Court granted the Company’s motions to dismiss the Frazier and Osborne lawsuits in their entirety. On June 29, 2015, the Company filed a declaratory judgment action in the U. S. District Court for the District of Connecticut entitled World Wrestling Entertainment, Inc. v. Robert Windham, Thomas Billington, James Ware, Oreal Perras and various John and Jane Does seeking a declaration against these former performers that their threatened claims related to alleged traumatic brain injuries and/or other tort claims are time-barred. On September 21, 2015, the defendants filed a motion to dismiss this complaint, which the Company opposed. The Court previously ordered a stay of discovery in all cases pending decisions on the motions to dismiss. On January 15, 2016, the Court partially lifted the stay and permitted discovery only on three issues in the case involving Singleton and LoGrasso. Such discovery was completed by June 1, 2016. On March 21, 2016, the Court issued a memorandum of decision granting in part and denying in part the Company’s motions to dismiss the Haynes, Singleton/LoGrasso, and McCullough lawsuits. The Court granted the Company’s motions to dismiss the Haynes and McCullough lawsuits in their entirety and granted the Company’s motion to dismiss all claims in the Singleton/LoGrasso lawsuit except for the claim of fraud by omission. On March 22, 2016, the Court issued an order dismissing the Windham lawsuit based on the Court’s memorandum of decision on the motions to dismiss. On April 4, 2016, the Company filed a motion for reconsideration with respect to the Court’s decision not to dismiss the fraud by omission claim in the Singleton/LoGrasso lawsuit and, on April 5, 2016, the Company filed a motion for reconsideration with respect to the Court dismissal of the Windham lawsuit. On July 21, 2016, the Court denied the Company’s motion in the Singleton/LoGrasso lawsuit and granted in part the Company’s motion in the Windham lawsuit. On April 20, 2016, the plaintiffs filed notices of appeal of the Haynes and McCullough lawsuits. On April 27, 2016, the Company moved to dismiss the appeals for lack of appellate jurisdiction, which motions were granted and the appeals were dismissed with leave to appeal upon the resolution of all of the consolidated cases. The Company has filed a motion for summary judgment on the sole remaining claim in the Singleton/LoGrasso lawsuit. The Company also filed a motion for judgment on the pleadings against the Windham defendants. Lastly, on July 18, 2016, a lawsuit was filed in the U.S. District Court for the District of Connecticut, entitled Joseph M. Laurinaitis, et al. vs. World Wrestling Entertainment, Inc. and Vincent K. McMahon, individually and as the trustee of certain trusts. This lawsuit contains many of the same allegations as the other lawsuits alleging traumatic brain injuries and further alleges, among other things, that the plaintiffs were misclassified as independent contractors rather than employees denying them, among other things, rights and benefits under the Occupational Safety and Health Act (OSHA), the National Labor Relations Act (NLRA), the Family and Medical Leave Act (FMLA), federal tax law, and various state Worker’s Compensation laws. This lawsuit also alleges that the booking contracts and other agreements between the plaintiffs and the Company are unconscionable and should be declared void, entitling the plaintiffs to certain damages relating to the Company’s use of their intellectual property. The lawsuit alleges claims for violation of RICO, unjust enrichment, and an accounting against Mr. McMahon. The Company and Mr. McMahon moved to dismiss this complaint on October 19, 2016. On November 9, 2016, the Laurinaitis plaintiffs filed an amended complaint. On December 23, 2016, the Company and Mr. McMahon moved to dismiss the amended complaint. On September 29, 2017, the Court issued an order on the motion to dismiss pending in the Laurinaitis case and on the motion for judgment on the pleadings pending in the Windham case. The Court reserved judgment on the pending motions and ordered that within thirty-five (35) days of the date of the order the Laurinaitis plaintiffs and the Windham defendants file amended pleadings that comply with the Federal Rules of Civil Procedure.  The Court further ordered that each of the Laurinaitis plaintiffs and the Windham defendants submit to the Court for in camera review affidavits signed and sworn under penalty of perjury setting forth facts within each plaintiff’s or declaratory judgment-defendant’s personal knowledge that form the factual basis of their claim or defense.  On November 3, 2017, the Laurinaitis plaintiffs filed a second amended complaint.  The Company and Mr. McMahon believe that the second amended complaint fails to comply with the Court’s September 29, 2017 order and otherwise remains legally defective for all of the reasons set forth in their motion to dismiss the amended complaint.  Also on November 3, 2017, the Windham defendants filed a second answer.  The Company does not know if the Laurinaitis Plaintiffs and Windham Defendants submitted the affidavits required under the Court’s September 29, 2017 order.  On November 17, 2017, the Company and Mr. McMahon filed a response that, among other things, urged the Court to grant the motion for judgment on the pleadings against the Windham defendants and dismiss the Laurinaitis plaintiffs’ complaint with prejudice and award sanctions against the Laurinaitis plaintiffs’ counsel because the amended pleadings fail to comply with the Court’s September 29, 2017 order and the Federal Rules of Civil Procedure.  The Company believes all claims and threatened claims against the claimsCompany in these various lawsuits are being prompted by the same plaintiffs’ lawyer and are without merit andmerit.  The Company intends to vigorouslycontinue to defend itself against them.these lawsuits vigorously.

On August 9, 2016, a lawsuit was filed in the U.S. District Court for the District of Connecticut entitled Marcus Bagwell, individually and on behalf of all others similarly situated v. World Wrestling Entertainment, Inc. The lawsuit alleges claims for breach of contract, breach of fiduciary duty, unjust enrichment and violations of the Connecticut Unfair Trade Practices Act, C.G.S. §42-110a, et seq., principally arising from WWE’s alleged failure to pay royalties for streaming video on WWE Network. On September 7, 2016, a motion for leave to amend was filed along with a proposed amended complaint that, among other things, sought to add Scott Levy as an individual plaintiff and WCW, Inc. as a defendant. On November 4, 2016, the Court granted plaintiffs’ motion for leave to amend and plaintiffs filed their amended complaint on November 7, 2016. On December 2, 2016, the Company moved to dismiss the amended complaint. On May 5, 2017, the Court granted in part and denied in part the Company’s motion to dismiss. The Court dismissed plaintiff’s declaratory judgment, unjust enrichment and successor liability claims, as well as all claims asserted against WCW, Inc. The Court also granted plaintiffs leave to file a second amended complaint, which plaintiffs filed on May 19, 2017. Plaintiffs then sought

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leave to file a third amended complaint to correct certain errors by plaintiffs’ counsel, which the Court granted and plaintiffs filed their third amended complaint on June 15, 2017. The third amended complaint continues to assert claims for breach of contract, breach of fiduciary duty, and violations of the Connecticut Unfair Trade Practices Act, C.G.S. §42-110a, et seq. against WWE. Following the depositions of Plaintiffs Bagwell and Levy, Plaintiffs’ counsel advised that they intended to voluntarily dismiss Plaintiffs’ remaining claims against the Company. On December 7, 2017, the parties filed a Stipulation of Dismissal pursuant to which all of Bagwell’s and Levy’s claims were dismissed with prejudice. No money was paid by WWE in consideration for the dismissal with prejudice.  On December 8, 2017, the Court granted the parties’ Stipulation of Dismissal and closed the case.

In addition to the foregoing, from time to time we are involved in severalbecome a party to other suitslawsuits and claims that we consider to be in the ordinary course of our business.claims. By its nature, the outcome of litigation is not known, but the Company does not currently expect its pendingthis ordinary course litigation to have a material adverse effect on our financial condition, results of operations or liquidity. We may from time to time become a party to other legal proceedings.

Ite

Itemm 4.  Mine Safety Disclosures

Not Applicable

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PART II

PA

ItemRT II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Class A common stock trades on the New York Stock Exchange, under the symbol "WWE".

Our Class B common stock is not listed on any exchange.

The following table sets forth the high and the low sale prices per share of our Class A common stock as reported by the New York Stock Exchange and the dividends declared per share of Class A and Class B common stock for the periods indicated:

Fiscal Year 20142017



		Quarter Ended
		March 31			June 30			September 30			December 31			Full Year
Class A common stock price per share:
High		$	23.14		$	22.57		$	23.57		$	33.28		$	33.28
Low		$	18.00		$	19.12		$	20.09		$	21.22		$	18.00
Class A dividends declared per share		$	0.12		$	0.12		$	0.12		$	0.12		$	0.48
Class B dividends declared per share		$	0.12		$	0.12		$	0.12		$	0.12		$	0.48

		Quarter Ended
		March 31				June 30				September 30				December 31				Full Year
Class A common stock price per share:
High		$	31.98			$	30.39			$	15.88			$	14.68			$	31.98
Low		$	15.31			$	10.55			$	11.40			$	10.76			$	10.55
Class A dividends declared per share		$	0.12			$	0.12			$	0.12			$	0.12			$	0.48
Class B dividends declared per share		$	0.12			$	0.12			$	0.12			$	0.12			$	0.48

Fiscal Year 20132016



		Quarter Ended
		March 31			June 30			September 30			December 31			Full Year
Class A common stock price per share:
High		$	18.93		$	19.72		$	21.55		$	21.30		$	21.55
Low		$	14.20		$	15.55		$	17.80		$	16.77		$	14.20
Class A dividends declared per share		$	0.12		$	0.12		$	0.12		$	0.12		$	0.48
Class B dividends declared per share		$	0.12		$	0.12		$	0.12		$	0.12		$	0.48

		Quarter Ended
		March 31				June 30				September 30				December 31				Full Year
Class A common stock price per share:
High		$	8.90			$	10.33			$	11.33			$	16.94			$	16.94
Low		$	7.91			$	8.56			$	9.62			$	10.15			$	7.91
Class A dividends declared per share		$	0.12			$	0.12			$	0.12			$	0.12			$	0.48
Class B dividends declared per share		$	0.12			$	0.12			$	0.12			$	0.12			$	0.48

There were 8,0697,461 holders of record of Class A common stock and fivethree holders of record of Class B common stock on February 13, 2015.6, 2018. Vincent K. McMahon, Chairman of the Board of Directors and Chief Executive Officer, controls a substantial majority of the voting power of the issued and outstanding shares of our common stock, and as a result, can effectively exercise control over our affairs.

Our Class B common stock is fully convertible into Class A common stock, on a one for one basis, at any time at the option of the holder. The two classes are entitled to equal per share dividends and distributions and vote together as a class with each share of Class B entitled to ten votes and each share of Class A entitled to one vote, except when separate class voting is required by applicable law. If, at any time, any shares of Class B common stock are beneficially owned by any person other than Vincent McMahon, Linda McMahon, any descendant of either of them, any entity which is wholly owned and is controlled by any combination of such persons or any trust, all the beneficiaries of which are any combination of such persons, each of those shares will automatically convert into shares of Class A common stock.

Our Board of Directors regularly evaluates the Company’s Common Stock dividend policy and determines the dividend rate each quarter. The level of dividends will continue to be influenced by many factors, including, among other things, our liquidity and historical and projected cash flow, our strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our revolving credit facility)Revolving Credit Facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant from time to time. We cannot assure our stockholders that dividends will be paid in the future, or that, if paid, dividends will be at the same amount or with the same frequency as in the past. Any reduction in our dividend payments could have a negative effect on our stock price.

In September 2011, the

The Company entered into a $200has an amended and restated $100.0 million senior unsecured revolving credit facility which was amended and restated in April 2013, and further amended on May 1, 2014 ("the Revolving Credit Facility"). The Company has never had any borrowings

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under the Credit Facility and as of December 31, 2014, we are in compliance with the provisions of the Credit Facility and are not restricted from paying dividends to our stockholders. TheRevolving Credit Facility restricts our ability to pay dividends if a default or event of default has occurred and is continuing thereunder. During 2015,As of December 31, 2017, we may be unable to meet certainwere in compliance with the provisions of the Revolving Credit Facility's covenants, in which caseFacility and, as a result, we would needare not restricted from paying dividends to get an appropriate waiver or amendment or terminate the facility entirely so that there would be no default or event of default. If terminated, we may or may not seek to replace the revolving credit facility. No assurance can be given that an amendment or a suitable replacement will be available or economically viable.our stockholders. Whether or not the facilityour Revolving Credit Facility is available, and whether or not, if unavailable, it is replaced, we believe we have sufficient liquidity for our operating needs and payment of our dividend for 2015.at least the next twelve months.

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Cumulative Total Return Chart

Set forth below is a line graph comparing, for the period commencing December 31, 20092012 and ended December 31, 2014,2017, the cumulative total return on our Class A common stock compared to the cumulative total return of the Russell 2000 Index and S&P Movies and Entertainment Index, a published industry index. The graph assumes the investment of $100 at the close of trading as of December 31, 20092012 in our Class A common stock, the Russell 2000 Index and the S&P Movies and Entertainment Index and the reinvestment of all dividends.



		Period Ending
Index		12/31/12		12/31/13		12/31/14		12/31/15		12/31/16		12/31/17
World Wrestling Entertainment, Inc.		100.00		220.13		169.34		251.93		266.69		452.54
Russell 2000		100.00		138.82		145.62		139.19		168.85		193.58
S&P Movies & Entertainment		100.00		155.57		183.29		166.34		183.60		192.81

	Period Ending
Index	12/31/09		12/31/10		12/31/11		12/31/12		12/31/13		12/31/14
World Wrestling Entertainment, Inc.	100.00		101.83		71.22		63.85		140.55		108.12
Russell 2000	100.00		126.86		121.56		141.43		196.34		205.95
S&P Movies & Entertainment	100.00		116.74		129.98		175.01		272.25		320.76

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Item

Item 6.  Selected Financial Data

The following selected consolidated financial data has been derived from our consolidated financial statements. You should read the selected financial data in conjunction with our consolidated financial statements and related notes and the information set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this report.

Financial Highlights: (in millions, except per share data)



		For the year ended December 31,
		2017 (1)			2016 (2)			2015 (3)			2014 (4)			2013 (5)
Net revenues		$	801.0		$	729.2		$	658.8		$	542.6		$	508.0
Operating income (loss)		$	75.6		$	55.6		$	38.8		$	(42.2)		$	5.9
Net income (loss)		$	32.6		$	33.8		$	24.1		$	(30.1)		$	2.8
Earnings (Loss) per share, basic		$	0.43		$	0.44		$	0.32		$	(0.40)		$	0.04
Earnings (Loss) per share, diluted		$	0.42		$	0.44		$	0.32		$	(0.40)		$	0.04
Dividends declared per Class A share		$	0.48		$	0.48		$	0.48		$	0.48		$	0.48
Dividends declared per Class B share		$	0.48		$	0.48		$	0.48		$	0.48		$	0.48

		As of December 31,
		2017			2016			2015			2014			2013
Cash, cash equivalents and short-term investments		$	297.4		$	267.1		$	102.4		$	115.4		$	109.4
Total assets		$	614.5		$	600.9		$	409.1		$	382.6		$	378.5
Total debt (6)		$	213.5		$	202.7		$	21.6		$	25.9		$	29.6
Total stockholders’ equity		$	253.0		$	239.7		$	209.3		$	205.9		$	265.9

		For the year ended December 31,
		2014 (1)				2013 (2)				2012 (3)				2011 (4)				2010
Net revenues		$	542.6			$	508.0			$	484.0			$	483.9			$	477.7
Operating (loss) income		$	(42.2	)		$	5.9			$	43.2			$	37.0			$	82.3
Net (loss) income		$	(30.1	)		$	2.8			$	31.4			$	24.8			$	53.5
(Loss) Earnings per share, basic		$	(0.40	)		$	0.04			$	0.42			$	0.33			$	0.72
(Loss) Earnings per share, diluted		$	(0.40	)		$	0.04			$	0.42			$	0.33			$	0.71
Dividends declared per Class A share		$	0.48			$	0.48			$	0.48			$	0.72			$	1.44
Dividends declared per Class B share		$	0.48			$	0.48			$	0.48			$	0.60			$	0.96
		As of December 31,
		2014				2013				2012				2011				2010
Cash, cash equivalents and short-term investments		$	115.4			$	109.4			$	152.4			$	155.8			$	166.9
Total assets		$	382.6			$	378.5			$	381.4			$	378.6			$	415.7
Total debt		$	25.9			$	29.6			$	—			$	1.6			$	2.8
Total stockholders’ equity		$	205.9			$	265.9			$	294.7			$	295.1			$	316.7

____________________

(1)

Operating income includes $5.6 million of expenses related to non-recurring legal matters and other contractual obligations and impairment charges on our feature films of $5.5 million (See Note 7 to the consolidated financial statements).

(1)

(2)

Operating income includes impairment charges on our feature films of $0.8 million (See Note 7 to the consolidated financial statements).

(3)

Operating income includes impairment charges on our feature films of $0.5 million (See Note 7 to the consolidated financial statements).  Operating income also includes a $7.1 million non-cash abandonment charge to write-off costs relating to a media center expansion project (See Note 6  to the consolidated financial statements).

(4)

Operating income includes impairment charges on our feature films of $1.5 million (See Note 7 to the Consolidated Financial Statements) and $4.2 million in restructuring charges of which $2.4 million relates to severance and other costs and $1.8 million relates to the impairment of gamification assets and is included in depreciation and amortization expense. Operating income also includes a $1.6 million adjustment to reduce the carrying value of the oldformer corporate aircraft to its estimated fair value and is included in depreciation expense. Net income includes a $4.0 million impairment of an equity investment and is included in other expense.

(2) (5)		Operating income includes impairment charges on our feature films of $11.7 million (See Note 7 to the Consolidated Financial Statements) and $10.7 million of costs associated with our emerging content and distribution efforts, including WWE Network, partially offset by the positive impact of $3.4 million resulting from the transition of our video game business to a new licensee.

(3) (6)	Operating income	Total debt includes $8.2$177.9 million and $161.0 million of costs incurred associated with our emerging contentconvertible senior notes outstanding as of December 31, 2017 and distribution efforts, including WWE Network, offset by the impactDecember 31, 2016, respectively.  We completed a private offering and sale of a $4.4 million tax benefit relating to previously unrecognized tax benefits.

(4)

Operating income includes impairment charges on our feature films of $23.4$200.0 million and $4.0$15.0 million associated with our emerging contentaggregate principal amount of 3.375% convertible senior notes due in 2023 in December 2016 and distribution efforts, including WWE Network. Results for 2011 do not include amounts for management incentive compensation sinceJanuary 2017, respectively. The balance represents the Company did not meet performance targets.liability component, net of unamortized debt discount and debt issuance costs (See Note 11 to the consolidated financial statements).

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Item

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the audited consolidated financial statements and related notes included elsewhere in this report.

Background

Our operations are organized around the four principal activities:

The following analysis outlines all material activities contained within each of our reportable segments.

Media Division:

Network

Revenues consist principally of subscriptions to WWE Network, fees for viewing our pay-per-view and video-on-demand programming, and advertising fees.

Television

•DivisionRevenues consist principally of television rights fees and advertising.:

Network

·

Revenues consist principally of subscriptions to WWE Network, fees for viewing our pay-per-view programming, and advertising fees.

Television

·

Revenues consist principally of television rights fees and advertising.

Home Entertainment

·

Revenues consist principally of sales of WWE produced content via home entertainment platforms, including DVD, Blu-Ray, and subscription and transactional on-demand outlets.

Revenues consist principally of sales of WWE produced content via home entertainment platforms, including DVD, Blu-Ray, subscription and transactional on-demand outlets.

Digital Media

·

Revenues consist principally of advertising sales on our websites and third party websites including YouTube, and sales of various broadband and mobile content.

Revenues consist principally of advertising sales on our websites and third party websites including YouTube, sales of various broadband and mobile content and magazine publishing. The Company discontinued the magazine publishing business in August 2014.

Live Events

•Revenues consist principally of ticket sales and travel packages for live events.:

·

Revenues consist principally of ticket sales and travel packages for live events.

Consumer Products Division:Division:

Licensing

·

Revenues consist principally of royalties or license fees related to various WWE themed products such as video games, toys and apparel.

Licensing

Revenues consist principally of royalties or license fees related to various WWE themed products such as video games, toys and apparel.

Venue Merchandise

·

Revenues consist of sales of merchandise at our live events.

WWEShop

·

Revenues consist of sales of merchandise on our websites, including through our WWEShop Internet storefront and on distribution platforms, including Amazon.

•Revenues consist of sales of merchandise at our live events.

WWEShop

•Revenues consist of sales of merchandise on our website through our WWEShop internet storefront.

WWE Studios

•Revenues consist of amounts earned from the investing in producing and/or distributing of filmed entertainment.:

·

Revenues consist of amounts earned from investing in, producing, and/or distributing filmed entertainment.

Corporate & Other

Revenues consist of amounts earned from talent appearances. Expenses include corporate overhead and certain expenses related to sales and marketing, including our international offices, and talent development functions.

In our prior reports filed with the Securities Exchange Commission ("SEC") through fiscal year 2013, we presented five reportable segments: Live and Televised Entertainment, Consumer Products, Digital Media, WWE Studios and Unallocated Corporate and Other. Effective January 1, 2014, we now present ten reportable segments. Information presented for the twelve months ended December 31, 2013 and 2012 included in the audited consolidated financial statements herein and elsewhere in this Annual Report has been recast to reflect our new segment presentation. See Note 19, Segment Information,:

·

Revenues consist of amounts earned from talent appearances. Expenses are presented in two categories comprised of Corporate Support and Business Support. Corporate Support expenses primarily include our corporate general and administrative functions. Business Support expenses include our sales and marketing functions, our international offices, and talent development function, including the costs associated with our WWE Performance Center, as well as business strategy and data analytics support. Additionally, Corporate and Other includes all intersegment eliminations recorded in consolidation.

for further details on our reportable segments. Such revisions have no impact on our consolidated financial condition, results of operations or cash flows for the periods presented.26

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��

Results of Operations

The Company presents OIBDA as the primary measure of segment profit (loss). As a means to summarize the OIBDA measure, we also present total consolidated OIBDA, divisional OIBDA for certain groupings of our segments (discussed further below) and OIBDA as a percentage of revenues. The Company defines OIBDA as operating income before depreciation and amortization (excluding feature film and television production asset amortization and impairments, as well as the amortization of costs related to content delivery and technology assets utilized for our WWE Network). The Company believes the presentation of OIBDA is relevant and useful for investors because it allows investors to view our segment performance in the same manner as the primary method used by management to evaluate segment performance and make decisions about allocating resources. The Company definesAdditionally, we believe that OIBDA asprovides a meaningful representation of operating income before depreciation and amortization, excluding feature film and television production asset amortization and impairments, as well as the amortization of costs related to content delivery and technology utilized forcash flows within our WWE Network.

segments.

OIBDA is a non-GAAP financial measure and may be different than similarly-titled non-GAAP financial measures used by other companies. A limitation of OIBDA is that it excludes depreciation and amortization, which represents the periodic charge for certain fixed assets and intangible assets used in generating revenues for our business. OIBDA should not be regarded as an alternative to operating income or net income as an indicator of operating performance, or to the statement of cash flows as a measure of liquidity, nor should it be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA. See Note 19,  Segment Information, in the accompanying Consolidated Financial Statementsconsolidated financial statements for a reconciliation of OIBDA to operating income for the periods presented.

We do not allocaterecord certain costs included in OIBDA ofwithin our Corporate and Other segment tosince the other reportable segments. Corporate and Other expense primarily includes corporate overhead and certain expenses related to sales and marketing, including our international offices, and talent development functions, including costs associated with our WWE Performance Center. These costs benefit the Company as a whole and are therefore not allocated.directly attributable to our other reportable segments. These costs are presented in two categories, Corporate Support and Business Support. Corporate Support expenses primarily include our corporate general and administrative functions. Business Support expenses include our sales and marketing functions, our international offices, talent development costs, including costs associated with our WWE Performance Center, and our business strategy and data analytics functions. Revenues from transactions between our operating segments are not material.

Included in Corporate and Other are intersegment eliminations recorded in consolidation.

While the reporting of our financial results is done at a segment level, we provide divisional sub-totals for revenues and OIBDA for our Media and Consumer Products Divisions. The Media Division is comprised of our Network, Television, Home Entertainment and Digital Media segments and represents the monetization of WWE content assets across various distribution channels. The Consumer Products Division is comprised of our Licensing, Venue Merchandise and WWEShop segments, which derive their revenues from the monetization of our intellectual property through royalties, license fees and the sale of WWE branded merchandise. We believe the divisional construct is relevant as we continually evaluate the best manner to exploit our content and intellectual property through various channels in a rapidly changing media landscape.

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Results of Operations

Year Ended December 31, 20142017 compared to Year Ended December 31, 2013

2016 

(dollars in millions)

Summary

Net Revenues		2014				2013				increase (decrease)
Media Division		$	339.9			$	302.7			12	%
Live Events		110.7				113.1				(2	)%
Consumer Products Division		78.1				78.5				(1	)%
WWE Studios		10.9				10.8				1	%
Corporate & Other		3.0				2.9				3	%
Total		542.6				508.0				7	%
OIBDA
Media Division		75.4				98.4				(23	)%
Live Events		27.8				30.8				(10	)%
Consumer Products Division		32.2				41.2				(22	)%
WWE Studios		0.5				(12.7		)		(104	)%
Corporate & Other		(151.4		)		(127.3		)		19	%
Total		(15.5		)		30.4				(151	)%
OIBDA as a percentage of revenues		(3		)%		6		%
Depreciation and amortization		26.7				24.5				9	%
Operating (loss) income		(42.2		)		5.9				(815	)%
Loss on equity investment		(4.0		)		—				(100	)%
Investment and other expense, net		(3.1		)		(1.3		)		138	%
(Loss) income before income taxes		(49.3		)		4.6				(1,172	)%
(Benefit) provision for income taxes		(19.2		)		1.8				(1,167	)%
Net (loss) income		$	(30.1	)		$	2.8			(1,175	)%

Our Media division revenues increased 12% driven

The following tables present our consolidated results followed by the impact of the launch of our WWE Network and increased revenue associated with certain key television distribution agreements. Our Live Events segment revenues declined by 2% due to decreased stadium capacity and ticket prices at OIBDA results:



								Increase
		2017			2016			(decrease)
Net revenues
Media Division:
Network		$	197.9		$	180.9		9	%
Television			270.2			241.7		12	%
Home Entertainment			8.6			13.1		(34)	%
Digital Media			34.5			26.9		28	%
Total Media Division			511.2			462.6		11	%
Live Events			151.7			144.4		5	%
Consumer Products Division:
Licensing			52.1			49.1		6	%
Venue Merchandise			23.8			24.2		(2)	%
WWEShop			37.8			34.6		9	%
Total Consumer Products Division			113.7			107.9		5	%
WWE Studios			18.6			10.1		84	%
Corporate & Other			5.8			4.2		38	%
Total net revenues (1)			801.0			729.2		10	%
Cost of revenues
Media Division:
Network			119.4			123.3		(3)	%
Television			129.5			120.1		8	%
Home Entertainment			5.4			6.5		(17)	%
Digital Media			10.4			9.4		11	%
Total Media Division			264.7			259.3		2	%
Live Events			106.2			99.2		7	%
Consumer Products Division:
Licensing			12.7			13.5		(6)	%
Venue Merchandise			13.0			12.8		2	%
WWEShop			27.0			24.8		9	%
Total Consumer Products Division			52.7			51.1		3	%
WWE Studios			17.6			5.8		203	%
Corporate & Other			17.8			14.6		22	%
Total cost of revenues (2)			459.0			430.0		7	%
Selling, general and administrative expenses
Corporate & Other (3)			189.0			168.3		12	%
All other segments			51.4			50.8		1	%
Total selling, general and administrative expenses			240.4			219.1		10	%
Depreciation and amortization			26.0			24.4		7	%
Operating income			75.6			55.7		36	%
Interest expense (4)			14.7			3.0		390	%
Investment and other income, net			3.1			0.5		520	%
Income before income taxes			64.0			53.2		20	%
Provision for income taxes (5)			31.4			19.4		62	%
Net income		$	32.6		$	33.8		(4)	%

28WrestleMania due to the venue location and the staging of eleven fewer international events. Our Consumer Products division experienced a 1% decline in revenues, primarily driven by lower licensing revenues from our video games. Our WWE Studios segment increased slightly by $0.1 million.

The comparability of our results for 2014 were impacted by $4.2 million in restructuring charges of which $2.4 million relates to severance and other costs and is included in Corporate and Other Expense with $0.3 million included in our Digital Media Segment, and $1.8 million relates to the impairment of gamification assets and is included in Depreciation and amortization expense. The current year results also include a $4.0 million impairment of an equity investment which is included in Loss on equity investments and a $1.6 million adjustment to reduce the carrying value of the old corporate aircraft to its estimated fair value, included in Depreciation and amortization expense. Lastly, our results for 2014 were impacted by $1.5 million of impairment charges related to our film portfolio. In 2013, our results were impacted by $11.7 million of impairment charges related to our film portfolio and an approximate $3.4 million positive impact from the transition of our video game business to a new licensee.

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(1)

Our consolidated net revenues increased by $71.8 million, or 10%, in 2017 as compared to 2016. This increase was primarily driven by $26.2 million in incremental revenues associated with the contractual escalation of our television distribution agreements and the timing impact of our licensed reality based television series, and $15.4 million of increased subscription revenues related to the growth of our WWE Network. Our WWE Studios segment recognized $8.5 million in incremental revenue in 2017, driven by the timing and performance of our film portfolio. In addition, the impact of 34 additional domestic events contributed $8.4 million to our live events revenues, while digital media advertising revenues increased by $7.6 million. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(2)

Our consolidated cost of revenues increased by $29.0 million, or 7%, in 2017 as compared to 2016.  The $11.8 million increase in our WWE Studios segment was primarily due to higher film amortization, including $5.5 million of film impairment charges resulting from revised ultimate profit expectations for several of our feature films. In the current year, we incurred $9.4 million of additional costs in our Television segment, primarily associated with the use of additional production elements on our weekly live episodic shows. The $7.0 million increase in cost of revenues in the Live Events segment was driven by an increased number of events, including international events. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(3)

Refer to the Corporate & Other section within Management’s Discussion and Analysis for a detailed analysis of the changes.

(4)

Interest expense increased by $11.7 million in 2017 as compared to 2016, as the convertible notes and the assumed mortgage were entered into during the second half of 2016. Refer to Note 10,  Long-Term Debt and Credit Facilities,  and Note 11, Convertible Debt,  in the Notes to Consolidated Financial Statements for further discussion.

(5)

Our provision for income taxes increased by $12.0 million, or 62%, in 2017 as compared to 2016, primarily driven by the impact of remeasurement of our deferred tax asset as a result of the Tax Cuts and Jobs Act (the “Tax Act”). Refer to Note 12, Income Taxes,  in the Notes to Consolidated Financial Statements for further discussion.



								Increase
		2017			2016			(decrease)
OIBDA
Media Division:
Network		$	64.2		$	43.0		49	%
Television			139.4			119.8		16	%
Home Entertainment			1.6			5.3		(70)	%
Digital Media			10.2			4.6		122	%
Total Media Division			215.4			172.7		25	%
Live Events			42.3			41.8		1	%
Consumer Products Division:
Licensing			31.1			27.4		14	%
Venue Merchandise			9.1			9.8		(7)	%
WWEShop			8.3			7.3		14	%
Total Consumer Products Division			48.5			44.5		9	%
WWE Studios			(3.6)			(0.2)		(1,700)	%
Corporate & Other			(201.0)			(178.7)		12	%
Total OIBDA		$	101.6		$	80.1		27	%



		2017						2016
Reconciliation of Operating Income to OIBDA					% of Rev						% of Rev
Media Division:
Operating income		$	203.6		40	%		$	161.3		35	%
Depreciation and amortization			11.8		2	%			11.4		2	%
Media Division OIBDA		$	215.4		42	%		$	172.7		37	%
Consumer Products Division:
Operating income		$	48.5		43	%		$	44.5		41	%
Depreciation and amortization			—		—	%			—		—	%
Consumer Products Division OIBDA		$	48.5		43	%		$	44.5		41	%
Consolidated:
Operating income		$	75.6		9	%		$	55.7		8	%
Depreciation and amortization			26.0		3	%			24.4		3	%
Total OIBDA		$	101.6		13	%		$	80.1		11	%

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Media Division

The following tables present the performance results and key drivers for our segments within our Media division (dollars in millions, except where noted):



								Increase
		2017			2016			(decrease)
Revenues - Media Division
Network		$	197.9		$	180.9		9	%
Subscriptions		$	183.7		$	168.3		9	%
Pay-per-view		$	14.2		$	12.6		13	%
Number of paid subscribers at period end			1,471,400			1,403,000		5	%
Domestic			1,065,200			1,032,600		3	%
International (a)			406,200			370,400		10	%
Number of average paid subscribers			1,532,700			1,417,900		8	%
Domestic			1,127,700			1,062,600		6	%
International (a)			405,000			355,300		14	%
Television		$	270.2		$	241.7		12	%
Home Entertainment		$	8.6		$	13.1		(34)	%
Gross units shipped			1,342,500			1,594,400		(16)	%
Digital Media		$	34.5		$	26.9		28	%
Total		$	511.2		$	462.6		11	%

(a)

Metrics reflect subscribers who are direct customers of WWE Network and estimated subscribers under licensed partner agreements, which have different economic terms for WWE Network.



														Increase
		2017						2016						(decrease)
OIBDA - Media Division					% of Rev						% of Rev
Network		$	64.2		32	%		$	43.0		24	%		49	%
Television		$	139.4		52	%		$	119.8		50	%		16	%
Home Entertainment		$	1.6		19	%		$	5.3		40	%		(70)	%
Digital Media		$	10.2		30	%		$	4.6		17	%		122	%

Revenues-Media Division		2014				2013				increase (decrease)
Network		$	115.0			$	86.3			33	%
Subscriptions		$	69.5			N/A
Pay-per-view		$	45.2			$	82.5			(45	)%
WWE Classics On Demand(a)		$	0.3			$	3.8			(92	)%
Monthly subscription price (dollars)(b)		$	9.99			N/A
Number of paid subscribers at period end		816,000				N/A
Domestic		772,000				N/A
International		44,000				N/A
Number of average paid subscribers (c)		567,000				N/A
Number of pay-per-view events		12				12				—	%
Number of buys from pay-per-view events		2,292,000				3,838,000				(40	)%
Average revenue per buy (dollars)		$	19.55			$	21.41			(9	)%
Pay-per-view domestic retail price, excluding WrestleMania (dollars)		$	44.95			$	44.95			—	%
Pay-per-view domestic retail price WrestleMania (dollars)		$	59.95			$	59.95			—	%
Television		$	176.7			$	163.4			8	%
Home Entertainment		$	27.3			$	24.3			12	%
Gross units shipped		2,674,400				3,987,200				(33	)%
Digital Media		$	20.9			$	28.7			(27	)%
Total		$	339.9			$	302.7			12	%
Television Ratings
Average weekly household ratings for RAW		3.4				3.4				—	%
Average weekly household ratings for SmackDown		2.3				2.2				5	%
Average weekly household ratings for WWE Main Event		1.0				0.9				11	%
Average weekly household ratings for Total Divas (E!)		1.3				1.4				(7	)%

OIBDA-Media Division		2014				2013				increase (decrease)
Network		$	(1.8	)		$	27.9			(106	)%
Television		61.9				56.1				10	%
Home Entertainment		15.0				8.8				70	%
Digital Media		0.3				5.6				(95	)%
Total		$	75.4			$	98.4			(23	)%
OIBDA as a percentage of revenues		22		%		33		%

____________________

(a) This service was discontinued in January 2014.

(b) This is our pricing for our domestic subscribers at December 31, 2014. In certain international territories, subscribers can access the network by other means and/or subscription pricing may vary.

(c) Average subscribers shown for 2014 represent the average level of subscribers for the year ended December 31, 2014 although WWE Network did not launch in the U.S. until February 24, 2014.

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Network revenues, which include revenues generated by WWE Network pay-per-view and video-on-demand,pay-per-view, increased by $28.7$17.0 million, or 9%, in 20142017 as compared to 2013.2016. WWE Network is a 24/7 streaming network that provides accessrevenues increased by $15.4 million, or 9%, in 2017 as compared to live and scheduled programming, including all 12 of WWE’s live pay-per-view events, as well as access to its comprehensive video-on-demand library. WWE Network, which launched on February 24, 2014, accounted for $69.5 million2016, driven primarily by the increase in new digital subscription revenues in the current year with approximately 567,000 average paid subscribers for the year ended December 31, 2014.subscribers. During the year ended December 31, 2014,2017, WWE Network had approximately 1,490,000an average of 1,532,700 paid subscribers, compared to an average of 1,417,900 subscribers in 2016.  During the year ended December 31, 2017, there were 1,803,700 gross additions to itsWWE Network’s subscriber base, partially offset by churn of 674,0001,735,300 subscribers. GrossGross additions include unique new subscribers and win-backs (subscribers that previously churned out and subsequently renewed their subscription). The subscription pricing of WWE Network at December 31, 2014 to WWE Network2017 is $9.99 per month with a one month commitment period. The $69.5no minimum commitment. Pay-per-view revenues increased by $1.6 million, of revenues generatedor 13%, primarily driven by WWE Network in the current year was partially offset by the declinean 11% increase in pay-per-view revenue of $37.3 million due primarily to a 40% declinebuys. The increase in total pay-per-view buys primarily attributable to WWE Network's launch. Additionally, the average revenue per buy declined by 9% to approximately $19.55 per buy due to a higher portion of pay-per-view buys coming from international markets in which have lower effective pricing. In addition, video-on-demand revenues decreased by $3.5 million due to the cessation of our Classics On Demand offering in January 2014 in anticipation of the launch of WWE Network in February.  Total Network OIBDA as a percentage of revenues decreased to a loss of 2% in 20142017 as compared to a profit of 32% in 20132016 was driven mainlyprimarily by the increase in revenues, coupled with lower programming related costs associated with the launch and ongoing support of $5.0 million driven by our WWE Network. In support of WWE Network, we incurred $14 million in additionalfocus on in-ring programming and production costs. Additionally, advertising and promotion expense increased $16 million in support of WWE Network's launch and subscriber acquisition efforts and we spent approximately $13 million in customer service costs associated with WWE Network.

which has higher margins than our original content.

Television revenues, which include revenues generated from television rights fees and advertising, increased by $13.3$28.5 million, or 12%, in 20142017 as compared to 2013.  Television rights fees in2016.  This increase was driven primarily by $26.2 million due to the current year include approximately $8.0 million in incremental revenuecontractual increases associated with the execution of certain key television distribution agreements manyand the timing impact of which were entered intoour licensed reality based television series. The increase in the later half of the year. Rights fees were also positively impacted by the production and licensing of new programs, most notably Total Divas, which commenced in late 2013. The televisionTelevision OIBDA as a percentage of revenues in 2017 as compared to 2016 was essentially flatdriven primarily by the increase in revenues, partially offset by additional costs incurred associated with the periods at approximately 35%use of additional production elements on our weekly live episodic shows, Raw and Smackdown Live.

Home entertainmentEntertainment revenues, which include revenues generated from the sale of WWE produced content via home entertainment platforms such as DVD and Blu-Ray discs and digital downloads, increaseddecreased by $3.0$4.5 million, or 34%, in 20142017 as compared to 2013.  This increase2016.  The decrease was duedriven by the impact of a  16% decline in part tounits shipped, coupled with a  5% decline in the recognition of $4.6 million in minimum guarantees received from our home video distributor. This increase was offset by aaverage price per unit sold. The decrease in DVD and Blu-Ray revenue which fell by $1.7 million, due to a 33% decline in shipments to 2.7 million units. Home entertainmentEntertainment OIBDA as a percentage of revenues increased to 55% in 20142017 as compared to 36% in 20132016 was primarily driven by the recognitiondecrease in revenues, including the impact of minimum guarantees and the lackdeclines in our higher margin international business.

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Table of associated variable costs.Contents

Digital mediaMedia revenues which include revenues generated from WWE.com and from our magazine publishing business, decreasedincreased by $7.8$7.6 million, or 28%, in 20142017 as compared to 2013. WWE.com revenues decreased by $4.8 million in the current year compared to the prior year due to lower advertising across various platforms as well as lower monetization of the Company's pay-per-view webcasts via WWE.com as these events became available on WWE Network. Publishing revenues decreased by $3.0 million2016, primarily due to decreased sell rates and the discontinuation of our print WWE magazine businessincreased advertising revenues. The increase in the third quarter of 2014. Digital mediaMedia OIBDA as a percentage of revenues decreasedin 2017 as compared to 1% in 2014 from 20% in 20132016 was primarily driven by the decline in digital advertising and pay-per-view buy revenue, the discontinuation of our publishing business and a relatively fixed cost structure.

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increased revenues.

Live Events

The following tables present the performance results and key drivers for our Live Events segment (dollars in millions, except where noted):



										Increase
		2017				2016				(decrease)
Revenues - Live Events
Live events		$	148.1			$	141.1			5	%
North America		$	115.1			$	104.8			10	%
International		$	33.0			$	36.3			(9)	%
Total live event attendance (1)			2,170,200				2,101,800			3	%
Number of North American events (1)			314				280			12	%
Average North American attendance (1)			5,600				5,800			(3)	%
Average North American ticket price (dollars) (1)		$	58.68			$	58.19			1	%
Number of international events (1)			70				64			9	%
Average international attendance (1)			5,700				7,500			(24)	%
Average international ticket price (dollars) (1)		$	77.83			$	65.85			18	%
Travel packages		$	3.6			$	3.3			9	%
Total		$	151.7			$	144.4			5	%

(1)

Metrics above exclude the events for our NXT brand.  This is our developmental brand that typically conducts their events in smaller venues with lower ticket prices.  We conducted 188 NXT events with paid attendance of 152,300 and average ticket prices of $39.27 in 2017 as compared to 189 events with paid attendance of 187,800 and average ticket prices of $37.32 in 2016.



										Increase
		2017				2016				(decrease)
OIBDA - Live Events
Live events		$	40.4			$	40.1			1	%
Travel packages			1.9				1.7			12	%
Total		$	42.3			$	41.8			1	%
OIBDA as a percentage of revenues			28	%			29	%

Revenues- Live Events		2014				2013				increase  (decrease)
Live events		$	108.5			$	111.5			(3	)%
North America		$	81.8			$	81.4			—	%
International		$	26.7			$	30.1			(11	)%
Total live event attendance		1,931,000				1,924,100				—	%
Number of North American events		264				256				3	%
Average North American attendance		6,000				6,000				—	%
Average North American ticket price (dollars)		$	48.86			$	48.63			—	%
Number of international events		54				65				(17	)%
Average international attendance		6,200				5,900				5	%
Average international ticket price (dollars)		$	75.81			$	74.13			2	%
Travel packages		2.2				1.6				38	%
Total		$	110.7			$	113.1			(2	)%
OIBDA-Live Events		2014				2013				increase (decrease)
Live events		$	27.0			$	30.1			(10	)%
Travel packages		0.8				0.7				14	%
Total		$	27.8			$	30.8			(10	)%
OIBDA as a percentage of revenues		25		%		27		%

Live events revenues, which include revenues from ticket sales and travel packages, decreasedincreased by $2.4$7.3 million, or 5%, in 20142017 as compared to 2013.2016. Revenues from our North America live events business increased by $0.4$10.6 million, or 10%, primarily due to the stagingincreases of eight$8.4 million resulting from 34 additional events in the current year which more than offset the decline in revenueevents.  Also contributing to this increase was $1.1 million of revenues associated with WrestleMania 30 this year, which experienced decreased attendance as a result of stadium capacity and configuration issues. Overall total average attendance and averagesecondary ticket prices remained flat. Oursales. Revenues from our international live events business decreased $3.4by $3.3 million, or 9%, primarily driven by elevendue to five fewer NXT events, held, which was offset, in part, by an increase in average ticket prices and to a lesser extent average attendancecoupled with changes in the current year as compared to the prior year.mix of territories in which we performed. The decrease in Live eventsEvents OIBDA as a percentage of revenues decreased to 25% in 20142017 as compared to 27% in 20132016 was driven primarily by lower average attendance and higher employee related expenses. promotional costs.

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Consumer Products Division

The following tables present the performance results and key drivers for our segments within our Consumer Products division (dollars in millions, except where noted):



								Increase
		2017			2016			(decrease)
Revenues - Consumer Products Division
Licensing		$	52.1		$	49.1		6	%
Venue merchandise			23.8			24.2		(2)	%
Domestic per capita spending (dollars)		$	10.16		$	10.89		(7)	%
WWEShop			37.8			34.6		9	%
Average WWEShop revenues per order (dollars)		$	45.81		$	44.61		3	%
Online merchandise orders			818,600			771,500		6	%
Total		$	113.7		$	107.9		5	%



														Increase
		2017						2016						(decrease)
OIBDA - Consumer Products Division					% of Rev						% of Rev
Licensing		$	31.1		60	%		$	27.4		56	%		14	%
Venue merchandise		$	9.1		38	%		$	9.8		40	%		(7)	%
WWEShop		$	8.3		22	%		$	7.3		21	%		14	%

Revenues-Consumer Products Division		2014				2013				increase  (decrease)
Licensing		$	38.6			$	43.6			(11	)%
Venue merchandise		19.3				19.4				(1	)%
Domestic per capita spending (dollars)		$	9.58			$	10.24			(6	)%
WWEShop		20.2				15.5				30	%
Average WWEShop revenues per order (dollars)		$	47.46			$	48.10			(1	)%
Total		$	78.1			$	78.5			(1	)%
OIBDA-Consumer Products Division		2014				2013				increase  (decrease)
Licensing		$	21.0			$	31.3			(33	)%
Venue merchandise		7.7				7.5				3	%
WWEShop		3.5				2.4				46	%
Total		$	32.2			$	41.2			(22	)%
OIBDA as a percentage of revenues		41		%		52		%

Licensing revenues decreasedincreased by $5.0$3.0 million, or 6%, in 20142017 as compared to 2013. In2016, primarily driven by higher sales of $2.1 million from the current year, increased video game receipts of $4.6 million were offset by the absence of a one time benefit associated with the termination of our previous video game license recordedCompany’s licensed toys. The increase in 2013 and lower toy royalties in the current year compared to prior year. Licensing OIBDA as a percentage of revenues decreased in 2014 to 54%2017 as compared to 72% in 2013. The OIBDA margin in2016 was driven by the prior year reflected a positive benefit associated with the recognitionmix of the advance received from THQ.

products sold within our licensed portfolio.

Venue merchandise revenues decreased by $0.1$0.4 million, or 2%, in 20142017 as compared to 20132016, primarily due to a 6%7%  decline in per capita merchandise spend at our domestic events to $9.58spend. The decrease in the current year. The venue merchandiseVenue Merchandise OIBDA as a percentage of revenues increasedin 2017 as compared to 40% in 2014 from 39% in 20132016 was driven by product mix.

mix and increased venue costs. 

WWEShop revenues increased by $4.7$3.2 million, or 9%, in 20142017 as compared to 2013, based on2016,  primarily due to a 33%6% increase in the volume of online merchandise sales to approximately 426,000 orders.orders, coupled with a  3% increase in the average revenue per order.  Orders increased primarily due to mobile shop optimizationthe impact of additional distribution channels, including in international territories, continued marketing efforts and a distribution strategybroader assortment of products offered. The increase in the UK utilizing Amazon UK. The average revenue per order decreased 1% to $47.46 in the current year. WWEShop OIBDA as a percentage of revenues increased to 17% in 20142017 as compared to 15% in 2013.

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WWE Studios

The following table provides detailed information on our WWE Studios’ segment (dollars in millions):

								Feature Film Production Assets-net as of Dec 31, 2014
																				For the Year Ended December 31,
		Release		Production								Inception to-date								Revenue								OIBDA
Title		Date		Costs*								Revenue				OIBDA				2014				2013				2014				2013
2014
Jingle All the Way 2		Dec. 2014		$	1.6			$	1.6			$	—			$	—			$	—			$ N/A				$	—			$ N/A
Queens of the Ring		Nov. 2014		—				—				—				—				—				N/A				—				N/A
See No Evil 2		Oct. 2014		1.1				1.1				—				—				—				N/A				—				N/A
Leprechaun: Origins		Aug. 2014		1.0				1.0				—				—				—				N/A				—				N/A
Road to Paloma		July 2014		—				—				0.2				0.1				0.2				N/A				0.1				N/A
Oculus		Apr. 2014		3.0				1.7				—				(1.3		)		—				N/A				(1.3		)		N/A
Scooby Doo! WrestleMania Mystery		Mar. 2014		1.2				0.6				1.9				1.2				1.9				N/A				1.2				N/A
				7.9				6.0				2.1				—				2.1				—				—				—
2013
Christmas Bounty		Nov. 2013		3.7				0.1				4.1				0.5				—				4.1				$	(0.1	)		0.6
12Rounds 2: Reloaded		June 2013		1.4				0.8				1.3				0.7				1.3				—				0.7				$	—
No One Lives		May 2013		2.2				0.1				1.0				(1.0		)		0.1				0.9				(0.2		)		(0.8		)
The Call		Mar. 2013		1.0				0.4				4.1				3.5				3.8				0.3				3.2				0.3
Dead Man Down		Mar. 2013		5.8				1.0				—				(4.7		)		—				—				—				(4.7		)
The Marine 3: Homefront		Mar. 2013		1.5				0.8				1.4				0.7				1.3				0.1				0.7				—
				15.6				3.2				11.9				(0.3		)		6.5				5.4				4.3				(4.6		)
Prior Releases				116.3				2.9				104.0				(30.4		)		2.3				5.4				1.0				(4.6		)
Completed but not released				3.9				3.9				—				—				—				—				—				—
In production				10.0				10.0				—				—				—				—				—				—
In development				0.5				0.5				—				(4.4		)		—				—				(0.3		)		—
Sub-total				$	146.3			$	26.5			$	118.0			$	(35.1	)		$	10.9			$	10.8			$	5.0			$	(9.2	)
Selling, General & Administrative Expenses																												(4.5		)		(3.5		)
Total																												$	0.5			$	(12.7	)

____________________

* Production costs are presented net of the associated benefit of production incentives.

 During 2014, we released one feature film via theatrical distribution, Oculus, and five films direct to DVD, Scooby Doo! WrestleMania Mystery, Leprechaun: Origins, See No Evil 2, Queens of the Ring and Jingle All the Way 2. The Company2016 entered into an agreement to co-distribute the feature film Road to Paloma. This film was released via a limited theatrical release and on DVD in July 2014. During 2013, we released three feature films via theatrical distribution, No One Lives, Dead Man Down and The Call, two films, 12 Rounds 2: Reloaded and The Marine 3: Homefront direct to DVD and one made-for-television movie, Christmas Bounty.

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Third-party distributors control the distribution and marketing of co-distributed films, anddriven by operating leverage as a result we recognizeof the revenue on a net basis after the third-party distributor recoups distribution fees and expenses and results are reported to us. Results are typically reported to us in quarters subsequent to the initial release of these films.

growth.

WWE Studios

WWE Studios revenues increased $0.1by $8.5 million, or 84%, in 20142017 as compared to 2013.2016.  The increasechange in film revenue is driven byreflective of both the timing of our film releases.releases and the performance of released films. In the current year,addition to delivering Fighting With My Family to our distribution partner, we recognized $3.8 million in revenue from our film,released nine films, Surf’s Up 2: WaveMania,  The Call,Resurrection of Gavin Stone which was released,  The Jetsons & WWE: Robo-WrestleMania!,  The Marine 5: Battleground,  Sleight,  Pure Country: Pure Heart,  Armed Response,  Birth of the Dragon and Killing Hasselhoff, in 2013.2017 as compared to five feature films in 2016. As we typically participate in a film’s results subsequent to our distributor’s recoupment of costs, there is a lag between a film’s release and its impact on revenue. WWE Studios OIBDA increased $13.2decreased by  $3.4 million in 20142017 as compared to 2013, due in part to2016,  primarily driven by the profitabilityexpected performance of The Call and reduced impairment charges. The Company recorded $1.5 ofour film portfolio, including additional impairment charges in 2014 as compared to $11.7 million recorded in 2013.during 2017. 

At December 31, 2014,2017, the Company had $26.5$22.3 million (net of accumulated amortization and impairment charges) of feature film production assetsFeature Film Production Assets capitalized on its Consolidated Balance Sheet, of which $12.1$15.9 million is for films in-release, $10.0$3.1 million is for films in production and the remaining $4.4$3.3 million is for films that are completed, pending release, or developmental projects. We review and revise estimates of ultimate revenue and participation costs at the end of each reporting quarter to reflect the most current information available. If estimates for a film’s ultimate revenue and/or costs are revised and indicate a significant decline in a film’s profitability, or if events or circumstances change that would indicate we should assess whether the fair value of a film is less than its unamortized film costs, we calculate the film's estimated fair value using a discounted cash flows model. If fair value is less than unamortized cost, the film asset is written down to fair value.

Revenues- Corporate & Other (dollars in millions )		2014				2013				increase (decrease)
Other		$	3.0			$	2.9			3	%

Other revenues include revenues associated with talent appearances We recorded impairment charges of $5.5 million and were consistent$0.8 million in both periods presented.2017 and 2016, respectively.

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OIBDA- Corporate & Other (dollars in millions )		2014				2013				increase (decrease)
Corporate & Other		$	(151.4	)		$	(127.3	)		19	%

Corporate & Other Expenses

The following table presents the amounts and percent change of

We record certain significant corporate and other expenses (dollars in millions):

		2014				2013				increase (decrease)
Staff related		$	53.9			$	48.4			11	%
Management incentive compensation		12.4				7.0				77	%
Legal, accounting and other professional		22.3				15.7				42	%
Travel and entertainment expenses		6.1				5.1				20	%
Advertising, marketing and promotion		9.5				8.4				13	%
Corporate insurance		3.7				4.0				(8	)%
Bad debt expense		1.2				—				100	%
All other		45.3				41.6				9	%
Total corporate & other expenses		$	154.4			$	130.2			19	%
Corporate & Other as a percentage of net revenues		28		%		26		%

costs within our Corporate and other expenses primarily include corporate overhead and certain expenses related to our sales and marketing, including our international offices, and talent development functions, including costs associated with our WWE Performance Center. TheseOther segment since the costs benefit the Company as a whole and are therefore not allocateddirectly attributable to individual businesses.our other reportable segments. These costs are presented in two categories, Corporate Support and Business Support. Corporate Support expenses primarily include our corporate general and administrative functions. Business Support expenses include our sales and marketing functions, our international offices, talent development costs, including costs associated with our WWE Performance Center, and our business strategy and data analytics functions. The presentation of Corporate & Other expenses in these two categories provides further details on the primary composition of our Selling, general and administrative expenses as presented in our Consolidated Statements of Operations as the majority of Selling, general and administrative expenses are comprised of expenses from our Corporate & Other segment. 

The following table presents the financial results for our Corporate and otherOther segment (dollars in millions):



		For the year ended December 31,
		2017												2016
		Corporate Support				Business Support				Total Corporate & Other				Corporate Support				Business Support				Total Corporate & Other				Increase (Decrease)
Corporate & Other revenue		$	—			$	5.8			$	5.8			$	—			$	4.2			$	4.2			38	%

Corporate & Other expenses:
Staff related		$	26.9			$	40.4			$	67.3			$	23.3			$	36.5			$	59.8			13	%
Management incentive compensation			11.8				17.0				28.8				10.9				13.6				24.5			18	%
Legal, accounting and other professional			25.2				10.2				35.4				17.3				12.0				29.3			21	%
Travel and entertainment expenses			0.3				5.8				6.1				0.2				5.9				6.1			—	%
Advertising, marketing and promotion			0.5				8.9				9.4				0.5				9.4				9.9			(5)	%
Corporate insurance			3.0				1.7				4.7				2.6				1.3				3.9			21	%
Talent related expenses (1)			—				25.1				25.1				—				20.1				20.1			25	%
Other expenses			19.0				11.0				30.0				18.0				11.3				29.3			2	%
Corporate & Other expenses		$	86.7			$	120.1			$	206.8			$	72.8			$	110.1			$	182.9			13	%
Corporate & Other as a percentage of net revenues			11	%			15	%			26	%			10	%			15	%			25	%

OIBDA - Corporate & Other		$	(86.7)			$	(114.3)			$	(201.0)			$	(72.8)			$	(105.9)			$	(178.7)			12	%

(1)

Talent related expenses within Business Support include costs associated with our WWE Performance Center, talent appearances and certain talent support costs. Talent costs associated with specific revenue streams are excluded from the above amounts and included within applicable business segments.

Corporate and Other expenses increased by $24.2$23.9 million, or 19%13%, in 20142017 as compared to 2013.2016. This increase is primarily due to increases in professional feeshigher staff related costs of $6.6$7.5 million due to increased headcount, $5.6 million of expenses related to strategic initiatives,non-recurring legal matters and other contractual obligations and talent related costs of $5.0 million in support of talent development and international expansion,initiatives.  During 2017, we also incurred $4.3 million of additional management incentive compensation costs, primarily driven by $3.8 million of $5.4stock compensation expenses due to an increase in the Company’s stock price.

Depreciation and Amortization

(dollars in millions)



										Increase
		2017				2016				(decrease)
Depreciation and amortization		$	26.0			$	24.4			7	%

Depreciation and amortization expense increased $1.6 million, reflecting amounts expectedor 7%, in 2017 as compared to be paid based on the Company's operating performance, and staff related expenses2016, primarily driven by prior year capital expenditures.

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Interest Expense

(dollars in millions)



										Increase
		2017				2016				(decrease)
Interest expense		$	14.7			$	3.0			391	%

Interest expense, which relates primarily to support talent developmentinterest and other strategic objectives. Staff related expensesamortization associated with our convertible notes, our debt facilities, assumed mortgage and aircraft financing, increased by $11.7 million in 2017 as compared to 2016, as the convertible notes and assumed mortgage were entered into during the latter part of 2016.

Investment Income and Other Expense, Net

(dollars in millions)



										Increase
		2017				2016				(decrease)
Investment income, net		$	3.4			$	2.3			48	%
Other expense, net		$	(0.3)			$	(1.8)			83	%

Investment income, net increased by $1.1 million, or 48%, in 2017 as compared to 2016, primarily driven by an increase of $1.5 million in income from our short-term investment instruments, partially offset by $0.5 million of lower returns from an equity method investment. Other expense, net is primarily comprised of state excise taxes and realized foreign currency translation losses, partially offset by rental income.

Income Taxes

(dollars in millions)



										Increase
		2017				2016				(decrease)
Provision for (benefit from) income taxes		$	31.4			$	19.4			62	%
Effective tax rate			49	%			36	%

The effective tax rate was 49% in 2017 as compared to 36% in 2016.  The increase in the effective tax rate in the current year include $2.0 million in severance associated with our restructuring plan.

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Tableperiod was primarily driven by the impact of Contents

Depreciation and Amortization

(dollars in millions)

		2014				2013				increase (decrease)
Depreciation and amortization		$	26.7			$	24.5			9	%

Depreciation expense in the current year includes a benefit of $1.5 million from the recognition of an infrastructure tax credit. This credit was used to reduce the carrying value of the assets as of their in-service date and consequently the adjustment to depreciation expense reflects the revised amount incurred to date. This credit was received in the current year but related to assets placed in service in prior years. Additionally, the current year balance includes an adjustment of $1.6 million to reduce the carrying valueremeasurement of our old corporate aircraft to its estimated fair value and an impairment charge of $1.8 million related to a change in business strategy related to our gamification platform. Overall, depreciation expense in the current year was higher due to depreciation expense related to the Company's recent investment in property and equipment to support our emerging content distribution efforts, including our WWE Network.

Investment Income, Interest Expense and Other Expense, Net

(dollars in millions)

		2014				2013				increase (decrease)
Loss on equity investment		$	(4.0	)		$	—			(100	)%
Investment income, interest expense and other expense, net		$	(3.1	)		$	(1.3	)		138	%

Due to a change in our ownership interest in a cost method investment, we recorded an impairment charge of $4.0 million in 2014, for the excess of the carrying value over its estimated fair value. Investment income, interest and other expense, net yielded an expense of $3.1 million in 2014 as compared to $1.3 million in 2013. The increase in net expense primarily related to translation losses incurred in the current perioddeferred tax asset as a result of fluctuationsthe Tax Act, which resulted in foreign currency exchange rates.

Income Taxes

(dollars in millions)

		2014				2013				increase (decrease)
(Benefit from) provision for income taxes		$	(19.2	)		$	1.8			(1,167	)%
Effective tax rate		39		%		39		%

the recognition of $11.3 million of expense. The Company recorded a tax benefit of $19.2 million associated with our operating loss in 2014. The Company currently believes this benefit is realizable and has not recorded a valuation allowance againstTax Act reduced the related deferred tax assets. If it becomes more likely than not that the Company will not realize these benefits, a valuation allowance would be recorded with a corresponding chargecorporate rate from 35% to our income tax provision.

21% effective January 1, 2018.

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Year Ended December 31, 20132016 compared to Year Ended December 31, 2012

2015

(dollars in millions)

Summary

Net Revenues		2013				2012				increase(decrease)
Media Division		$	302.7			$	287.3			5	%
Live Events		113.1				106.6				6	%
Consumer Products Division		78.5				79.9				(2	)%
WWE Studios		10.8				7.9				37	%
Corporate & Other		2.9				2.3				26	%
Total		508.0				484.0				5	%
OIBDA
Media Division		98.4				117.0				(16	)%
Live Events		30.8				27.0				14	%
Consumer Products Division		41.2				41.1				—	%
WWE Studios		(12.7		)		(5.5		)		131	%
Corporate & Other		(127.3		)		(116.4		)		9	%
Total		30.4				63.2				(52	)%
OIBDA as a percentage of revenues		6		%		13		%
Depreciation and amortization		24.5				20.0				23	%
Operating income		5.9				43.2				(86	)%
Investment and other expense net		(1.3		)		(0.5		)		160	%
Income before income taxes		4.6				42.7				(89	)%
Provision for income taxes		1.8				11.3				(84	)%
Net income		$	2.8			$	31.4			(91	)%

The comparability offollowing tables present our consolidated results for 2013 was impactedfollowed by $11.7 million of impairment charges related to our film portfolio, including $4.7 million and $0.9 million, for OIBDA results:



								Increase
		2016			2015			(decrease)
Net revenues
Media Division:
Network		$	180.9		$	159.4		13	%
Television			241.7			231.1		5	%
Home Entertainment			13.1			13.4		(2)	%
Digital Media			26.9			21.5		25	%
Total Media Division			462.6			425.4		9	%
Live Events			144.4			124.7		16	%
Consumer Products Division:
Licensing			49.1			48.9		0	%
Venue Merchandise			24.2			22.4		8	%
WWEShop			34.6			27.1		28	%
Total Consumer Products Division			107.9			98.4		10	%
WWE Studios			10.1			7.1		42	%
Corporate & Other			4.2			3.2		31	%
Total net revenues (1)			729.2			658.8		11	%
Cost of revenues
Media Division:
Network			123.3			107.0		15	%
Television			120.1			129.0		(7)	%
Home Entertainment			6.5			7.7		(16)	%
Digital Media			9.4			8.5		11	%
Total Media Division			259.3			252.2		3	%
Live Events			99.2			84.3		18	%
Consumer Products Division:
Licensing			13.5			12.2		11	%
Venue Merchandise			12.8			12.2		5	%
WWEShop			24.8			19.8		25	%
Total Consumer Products Division			51.1			44.2		16	%
WWE Studios			5.8			4.1		41	%
Corporate & Other			14.6			12.5		17	%
Total cost of revenues (2)			430.0			397.3		8	%
Selling, general and administrative expenses
Corporate & Other (3)			168.3			155.7		8	%
All other segments			50.8			37.1		37	%
Total selling, general and administrative expenses			219.1			192.8		14	%
Loss on abandonment (4)			—			7.1		(100)	%
Depreciation and amortization			24.4			22.8		7	%
Operating income			55.7			38.8		44	%
Interest expense			3.0			2.4		25	%
Investment and other income (expense), net			0.5			(0.2)		350	%
Income before income taxes			53.2			36.2		47	%
Provision for income taxes			19.4			12.1		60	%
Net income		$	33.8		$	24.1		40	%

35Dead Man Down and No One Lives, respectively, which were 2013 releases and $6.1 million from previously released films and an approximate $3.4 million positive impact from the transition of our video game business to a new licensee.In 2012, our results were impacted by a $1.2 millionimpairment charge related to our two feature films, Bending the Rules and Barricade, andthe recognition of a $4.4 million benefit due to previously unrecognized tax benefits.

Our Media division revenues increased by 5% primarily due to the increased revenues in television rights business. Our Live Events segment revenues increased by 6% reflecting increased revenues from our North America events. Our Consumer Products division segment experienced a 2% decline in revenues, primarily driven by a $2.7 million decrease in our licensing business. Our WWE Studios segment experienced a 37% increase in revenues due in part to the November 2013 release of Christmas Bounty, a made-for-television production, and from our movie portfolio.

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(1)

Our consolidated net revenues increased by $70.4 million, or 11%, in 2016 as compared to 2015. This increase was primarily driven by $29.5 million of increased subscription revenues related to the growth of our WWE Network in new and existing territories and $14.6 million in incremental revenues associated with the escalation of our television rights fees. Higher average ticket prices and increased attendance contributed $11.8 million to our live events revenues, while the growth of our NXT brand resulted in increased live event revenues of $4.1 million. An increase in merchandise sales also contributed $9.3 million of incremental revenues. These increases were partially offset by a $8.0 million decline in our pay-per-view revenues due to the continued growth and expansion of WWE Network. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(2)

Our consolidated cost of revenues increased by $32.7 million, or 8%, in 2016 as compared to 2015. In 2016, we incurred $13.1 million of additional programming related costs in our Network segment in support of our focus on adding original programming to WWE Network and additional pay-per-view events. The $14.9 million increase in cost of revenues in the Live Events segment was driven by an increased number of events, including international events, coupled with higher WrestleMania costs. For further analysis, refer to Management’s Discussion and Analysis of our business segments.

(3)

Refer to the Corporate & Other section within Management’s Discussion and Analysis for a detailed analysis of the changes.

(4)

Loss on abandonment in 2015 includes a $7.1 million non-cash abandonment charge to write-off the value of costs related to a media center expansion project that were incurred several years ago but the expansion was delayed due to the economic uncertainty at the time. The Company made the determination that these plans would not be viable and as such abandoned and wrote-off the asset balance associated with the project.



								Increase
		2016			2015			(decrease)
OIBDA
Media Division:
Network		$	43.0		$	48.4		(11)	%
Television			119.8			97.0		24	%
Home Entertainment			5.3			4.6		15	%
Digital Media			4.6			4.4		5	%
Total Media Division			172.7			154.4		12	%
Live Events			41.8			38.0		10	%
Consumer Products Division:
Licensing			27.4			28.8		(5)	%
Venue Merchandise			9.8			8.9		10	%
WWEShop			7.3			5.1		43	%
Total Consumer Products Division			44.5			42.8		4	%
WWE Studios			(0.2)			(1.5)		87	%
Corporate & Other			(178.7)			(172.1)		4	%
Total OIBDA		$	80.1		$	61.6		30	%



		2016						2015
Reconciliation of Operating Income to OIBDA					% of Rev						% of Rev
Media Division:
Operating income		$	161.3		35	%		$	144.2		34	%
Depreciation and amortization			11.4		2	%			10.2		2	%
Media Division OIBDA		$	172.7		37	%		$	154.4		36	%
Consumer Products Division:
Operating income		$	44.5		41	%		$	42.8		43	%
Depreciation and amortization			—		—	%			—		—	%
Consumer Products Division OIBDA		$	44.5		41	%		$	42.8		43	%
Consolidated:
Operating income (loss)		$	55.7		8	%		$	38.8		6	%
Depreciation and amortization			24.4		3	%			22.8		3	%
Total OIBDA		$	80.1		11	%		$	61.6		9	%

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Media Division

The following tables present the performance results for our segments within our Media division (dollars in millions, except where noted):



								Increase
		2016			2015			(decrease)
Revenues - Media Division
Network		$	180.9		$	159.4		13	%
Subscriptions		$	168.3		$	138.8		21	%
Pay-per-view		$	12.6		$	20.6		(39)	%
Number of paid subscribers at period end			1,403,000			1,217,100		15	%
Domestic			1,032,600			939,900		10	%
International (a)			370,400			277,200		34	%
Number of average paid subscribers			1,417,900			1,139,400		24	%
Domestic			1,062,600			939,100		13	%
International (a)			355,300			200,300		77	%
Television		$	241.7		$	231.1		5	%
Home Entertainment		$	13.1		$	13.4		(2)	%
Gross units shipped			1,594,400			2,081,400		(23)	%
Digital Media		$	26.9		$	21.5		25	%
Total		$	462.6		$	425.4		9	%

(a)

Metrics reflect subscribers who are direct customers of WWE Network and estimated subscribers under licensed partner agreements, which have difference economic terms for WWE Network.



														Increase
		2016						2015						(decrease)
OIBDA - Media Division					% of Rev						% of Rev
Network (1)		$	43.0		24	%		$	48.4		30	%		(11)	%
Television (1)		$	119.8		50	%		$	97.0		42	%		24	%
Home Entertainment		$	5.3		40	%		$	4.6		34	%		15	%
Digital Media		$	4.6		17	%		$	4.4		20	%		5	%

Revenues-Media Division		2013				2012				increase (decrease)
Network		$	86.3			$	87.7			(2	)%
Pay-per-view		$	82.5			$	83.6			(1	)%
WWE Classics On Demand		$	3.8			$	4.1			(7	)%
Number of pay-per-view events		12				12				—	%
Number of buys from pay-per-view events		3,838,000				4,023,000				(5	)%
Average revenue per buy (dollars)		$	21.41			$	20.60			4	%
Pay-per-view domestic retail price, excluding WrestleMania (dollars)		$	44.95			$	44.95			—	%
Pay-per-view domestic retail price WrestleMania (dollars)		$	59.95			$	54.95			9	%
Television		163.4				140.9				16	%
Home Entertainment		24.3				33.0				(26	)%
Gross units shipped		3,987,200				3,775,800				6	%
Digital Media		28.7				25.7				12	%
Total		$	302.7			$	287.3			5	%
Television Ratings
Average weekly household ratings for RAW		3.4				3.3				3	%
Average weekly household ratings for SmackDown		2.2				2.1				5	%
Average weekly household ratings for WWE Main Event		0.9				0.8				13	%
Average weekly household ratings for Total Divas (E!)		1.4				N/A

(1)

See Note 19,  Segment Information, in the Notes to Consolidated Financial Statements for a discussion of our cost allocation methodology between the Network and Television segments, which was implemented during the first quarter of 2016. During the current year, $15.4 million of costs were allocated from Television to Network. A comparable allocation did not occur in the prior year.

OIBDA-Media Division		2013				2012				increase (decrease)
Network		$	27.9			$	41.3			(32	)%
Television		56.1				51.6				9	%
Home Entertainment		8.8				15.4				(43	)%
Digital Media		5.6				8.7				(36	)%
Total		$	98.4			$	117.0			(16	)%
OIBDA as a percentage of revenues		33		%		41		%

Network revenues, which include revenues generated by WWE Network and pay-per-view, and video-on-demand, decreasedincreased by $1.4$21.5 million, or 13%, in 2013 period2016 as compared 2012.  Pay-per-viewto 2015. WWE Network revenues decreasedincreased by $1.1$29.5 million, from 2012,or 21%, in 2016 as compared to 2015, driven primarily as resultby the increase in paid subscribers. During the year ended December 31, 2016, WWE Network had an average of a 5% decline1,417,900 paid subscribers, compared to an average of 1,139,400 subscribers in 2015. During the numberyear ended December 31, 2016, there were 1,858,700 gross additions to WWE Network’s subscriber base, offset by churn of pay-per-view buys1,672,800 subscribers. Gross additions include unique new subscribers and win-backs (subscribers that previously churned out and subsequently renewed their subscription). The subscription pricing of WWE Network at December 31, 2016 is $9.99 per month with no minimum commitment. The increased revenues generated by WWE Network in 2013. This decrease was2016 were partially offset by a 4% increasethe decline in average revenue per buy from 2012 due,pay-per-view revenues of $8.0 million, or 39%. This decline was primarily attributable to the continued growth and expansion of WWE Network; as WWE Network grows, pay-per-view revenues are expected to decline since our pay-per-view events are available on WWE Network. The decrease in part, to an increase in the domestic retail price charged for viewing WrestleMania and higher retail prices charged for viewing our events in high definition. Video-on-demand revenues decreased slightly by $0.3 million. Network OIBDA as a percentage of revenues decreasedin 2016 as compared to 32%2015 was due to higher programming related costs of $13.1 million and the impact of shared costs that we now allocate to the Network segment from our Television segment. On January 1, 2016, we began allocating certain shared costs and expenses between our Network and Television segments, as these allocations are intended to more accurately reflect the operating performance of these segments. The impact of the allocation during 2016 was a decline in 2013 from 47%Network OIBDA of $15.4 million. A comparable allocation did not occur in 2012 due primarily to an additional $5.1 million in talent related expenses.

2015.

Television revenues, which include revenues generated from television rights fees and advertising, increased by $22.5$10.6 million, or 5%, in 20132016 as compared to 2012. Domestically,2015.  This increase was the result of contractual increases of $14.6 million associated with television rights fees increaseddistribution agreements and $3.9 million of revenues associated with our new licensed reality based series, Total Bellas. This increase was partially offset by $17.0 million, primarily due to the production and licensingimpact of new programs. During the third quarter of 2013, we debuted a new televisionour other licensed reality based series, Total Divas and Tough Enough. There were 20 new episodes of these licensed reality series in 2016 as compared to 33 episodes in 2015, which is carried on the E! Network. In addition, 2013 includes the full year impactresulted in a decrease in revenues of programing introduced$6.7 million. 

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The increase in 2012, particularly, an additional hour of RAW to the USA Network, as well as rights fees for an original series, WWE Main Event on the ION Television Network. The television OIBDA as a percentage of revenues decreased to 34% from 37% in 2012 primarily due to increased production costs.

Home entertainment revenues decreased by $8.7 million, or 26%, in 20132016 as compared to 2012. Domestic2015 was primarily driven by a change in product mix, as the licensed reality based series mentioned above typically have a lower margin than our other television programming.  Additionally, Television OIBDA was favorably impacted by a $15.4 million allocation methodology change, as described above.

Home Entertainment revenues, which include revenues generated from the sale of WWE produced content via home entertainment revenue fell approximately $6.4platforms such as DVD and Blu-Ray discs and digital downloads, decreased by $0.3 million, or 23%2%, in 2016 as compared to 2015.  The decrease was due to a 23% decline in units shipped, mostly offset by lower DVD and Blu-Ray returns of $2.7 million and the impact of a 6% increase in shipments to 4.0 million units was more than offset by lower

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sell-through rates and a 13% decline in the average price per unit to $9.60 reflecting a shiftsold. The increase in product mix and retail demand for lower priced product. Additionally, we released 28 titles in 2013 compared to 35 titles in 2012.

Revenue from our international home entertainment activities declined by approximately $2.3 million reflecting lower sales in Canada and the transition to a new licensee in the EMEA region. Home entertainmentEntertainment OIBDA as a percentage of revenues decreased to 36% in 2013 compared to 47% in 2012 due to lower sell-through rates and higher talent expenses.

Digital media revenues, which include revenues generated from WWE.com and from our magazine publishing business, increased by $3.0 million in 20132016 as compared to 2012.  WWE.com2015 was primarily driven by lower production costs of $1.3 million related to the decline in units shipped of our DVD and Blu-Ray discs.

Digital Media revenues increased by $3.3$5.4 million, or 25%, in 20132016 as compared to 20122015, primarily due to the incremental impactincreased advertising revenues, including an increase of the Company's launch of digital distribution of$4.9 million associated with our pay-per-view events across several new platforms and higher sales of advertising across various digital platforms. Magazine publishing revenues decreased by $0.3 millioncontent viewed on YouTube. The decrease in 2013 as compared to 2012. Net units sold decreased by 8% driven by weaker newsstand demand and lower subscription revenue for the WWE Kids magazine reflecting, in part, the continued overall decline in the magazine publishing industry. We published twelve issues of WWE Magazine, ten issues of WWE Kids magazine and three special issues both in 2013 and in 2012. Digital mediaMedia OIBDA as a percentage of revenues decreasedin 2016 as compared to 20% in 2013 from 34% in 2012 due to hiring2015 was primarily driven by increased staff related and professional services costs of new personnel$3.2 million to support digital contentvarious technology initiatives.

Live Events

The following tables present the performance results and key drivers for our Live Events segment (dollars in millions, except where noted):



										Increase
		2016				2015				(decrease)
Revenues - Live Events
Live events		$	141.1			$	122.4			15	%
North America		$	104.8			$	93.0			13	%
International		$	36.3			$	29.4			23	%
Total live event attendance (1)			2,101,800				2,055,000			2	%
Number of North American events (1)			280				273			3	%
Average North American attendance (1)			5,800				6,000			(3)	%
Average North American ticket price (dollars) (1)		$	58.19			$	53.22			9	%
Number of international events (1)			64				56			14	%
Average international attendance (1)			7,500				7,300			3	%
Average international ticket price (dollars) (1)		$	65.85			$	65.10			1	%
Travel packages		$	3.3			$	2.3			43	%
Total		$	144.4			$	124.7			16	%

(1)

Metrics above exclude the events for our NXT brand. This is an emerging brand that typically conducts their events in smaller venues with lower ticket prices. We conducted 189 NXT events with paid attendance of 187,800 and average ticket prices of $37.32 in 2016 as compared to 120 events with paid attendance of 92,500 and average ticket prices of $36.71 in 2015.



										Increase
		2016				2015				(decrease)
OIBDA - Live Events
Live events		$	40.1			$	36.9			9	%
Travel packages			1.7				1.1			55	%
Total		$	41.8			$	38.0			10	%
OIBDA as a percentage of revenues			29	%			30	%

Revenues- Live Events		2013				2012				increase (decrease)
Live events		$	111.5			$	103.7			8	%
North America		$	81.4			$	72.1			13	%
International		$	30.1			$	31.6			(5	)%
Total live event attendance		1,924,100				1,854,100				4	%
Number of North American events		256				248				3	%
Average North American attendance		6,000				5,900				2	%
Average North American ticket price (dollars)		$	48.63			$	45.39			7	%
Number of international events		65				66				(2	)%
Average international attendance		5,900				6,000				(2	)%
Average international ticket price (dollars)		$	74.13			$	74.15			—	%
Travel packages		1.6				2.9				(45	)%
Total		$	113.1			$	106.6			6	%
OIBDA-Live Events		2013				2012				increase (decrease)
Live events		$	30.1			$	26.5			14	%
Travel packages		0.7				0.5				40	%
Total		$	30.8			$	27.0			14	%
OIBDA as a percentage of revenues		27		%		25		%

Live events revenues, which include revenues from ticket sales and travel packages, increased by $6.5$19.7 million, or 16%, in 20132016 as compared to 2012.2015. Revenues from our North America live events business increased $9.3by $11.8 million, or 13%, primarily due in part to a strong performance of our annualhigher average ticket prices, including WrestleMania, event which contributed $3.6increased revenues by $8.1 million, partially offset by a $1.2 million reduction in incremental ticket revenue in 2013. In addition, we held eight more events and experienced a 7% increase in average ticket prices in 2013 as comparedrevenues due to 2012. Ourlower attendance at these events. Revenues from our international live events business decreased $1.5increased by $6.9 million, in 2013or 23%, primarily due to lower$4.6 million of increased revenues due to higher average attendance and eight additional events. Also contributing to the overall increase in revenues was a decrease in average ticket prices partially offset by stronger attendance at$4.1 million positive impact associated with an expanded touring schedule for the events held during our European tour in 2013 and higher average ticket prices from the tour in Abu Dhabi. The decrease in average attendance was predominantly due to venue mix. The liveCompany’s emerging NXT brand. Live events OIBDA as a percentage of revenues increaseddecreased slightly in 2016 as compared to 27%2015, primarily due to the mix of venues in 2013 from 25% in 2012.which the events were held.

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Consumer Products Division

The following tables present the performance results and key drivers for our segments within our Consumer Products division (dollars in millions, except where noted):



								Increase
		2016			2015			(decrease)
Revenues - Consumer Products Division
Licensing		$	49.1		$	48.9		0	%
Venue merchandise			24.2			22.4		8	%
Domestic per capita spending (dollars)		$	10.89		$	10.54		3	%
WWEShop			34.6			27.1		28	%
Average WWEShop revenues per order (dollars)		$	44.61		$	45.87		(3)	%
Online merchandise orders			771,500			590,000		31	%
Total		$	107.9		$	98.4		10	%



														Increase
		2016						2015						(decrease)
OIBDA - Consumer Products Division					% of Rev						% of Rev
Licensing		$	27.4		56	%		$	28.8		59	%		(5)	%
Venue merchandise		$	9.8		40	%		$	8.9		40	%		10	%
WWEShop		$	7.3		21	%		$	5.1		19	%		43	%

Revenues-Consumer Products Division		2013				2012				increase (decrease)
Licensing		$	43.6			$	46.3			(6	)%
Venue merchandise		19.4				18.8				3	%
Domestic per capita spending (dollars)		$	10.24			$	10.66			(4	)%
WWEShop		15.5				14.8				5	%
Average WWEShop revenues per order (dollars)		$	48.10			$	47.66			1	%
Total		$	78.5			$	79.9			(2	)%
OIBDA-Consumer Products Division		2013				2012				increase (decrease)
Licensing		$	31.3			$	32.3			(3	)%
Venue merchandise		7.5				6.7				12	%
WWEShop		2.4				2.1				14	%
Total		$	41.2			$	41.1			—	%
OIBDA as a percentage of revenues		52		%		51		%

Licensing revenues decreased by $2.7 millionincreased slightly in 20132016 as compared to 2012, reflecting a decline2015. The decrease in revenue from sales of toys, video games and other products both domestically and internationally. The period ended December 31, 2013 reflected an estimated $2.0 million positive impact associated with the bankruptcy of our former video game licensee, THQ, and the transition to a new video game licensee, Take-Two Interactive. As a result of THQ's bankruptcy, we did not collect or recognize a portion of anticipated royalties due in 2013. Therefore, despite the positive impact of the transition of our video game license on revenue and income in the first quarter, WWE incurred an estimated economic loss of approximately $3.0 million stemming from foregone video game receipts. Overall, sales of our video game declined approximately 11% due in part to lower effective pricing from 2012. Licensing OIBDA as a percentage of revenues was 72% in 20132016 as compared to 70% in 2012 partially as a result of product.

2015 was primarily due to increased talent participation expenses driven by product mix.

Venue merchandise revenues increased by $0.6$1.8 million, or 8%, in 20132016 as compared to 2012. Increased sales of merchandise at our domestic and Canadian events were partially offset by lower international licensing revenues. Total paid attendance at our domestic events increased 5% while the2015, primarily due to a 3% increase in per capita merchandise spend at those events decreased 4% to $10.24 in the current year. The venuespend. Venue merchandise OIBDA as a percentage of revenues increasedwas essentially unchanged in 2016 as compared to 39% from 36% in 2012.

2015.

WWEShop revenues increased by $0.7$7.5 million, or 28%, in 20132016 compared to 2012, driven by2015, due to a 4%31% increase in the numbervolume of online merchandise orders to 320,200. Average771,500 orders. Orders increased primarily due to the impact of additional distribution channels, including in international territories, continued marketing efforts and a broader assortment of products offered. This increase was partially offset by a 3% decline in the average revenue per order increased slightly by 1% to $48.10.$44.61 in 2016. The increase in WWEShop OIBDA as a percentage of revenues remained relatively flat in the periods.

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2016 as compared to 2015was due to leveraging our fixed costs and improved fulfillment processes.

WWE Studios

The following table provides detailed information on our WWE Studio's segment (dollarsStudios revenues increased by $3.0 million, or 42%, in millions):

								Feature Film Production Assets-net as of Dec 31, 2013
																				For the Year Ended December 31,
		Release		Production								Inception to-date								Revenue								OIBDA
Title		Date		Costs*								Revenue				OIBDA				2013				2012				2013				2012
2013
Christmas Bounty		Nov. 2013		$	3.7			$	0.1			$	4.1			$	0.6			$	4.1			$ N/A				$	0.6			$ N/A
12Rounds 2: Reloaded		June 2013		1.5				1.4				—				—				—				N/A				—				N/A
No One Lives		May 2013		2.2				0.4				0.9				(0.8		)		0.9				N/A				(0.8		)		N/A
The Call		Mar. 2013		1.0				1.0				0.3				0.3				0.3				N/A				0.3				N/A
Dead Man Down		Mar. 2013		5.8				1.0				—				(4.7		)		—				N/A				(4.7		)		N/A
The Marine 3: Homefront		Mar. 2013		1.5				1.4				0.1				—				0.1				N/A				—				N/A
				15.7				5.3				5.4				(4.6		)		5.4				—				(4.6		)		—
2012
Barricade		Sept. 2012		4.1				0.1				1.2				(4.0		)		0.4				0.8				(0.5		)		(1.3		)
The Day		Aug. 2012		—				—				0.2				0.2				0.2				—				0.2				—
No Holds Barred		July 2012		—				—				0.7				0.3				0.3				0.4				0.2				0.1
Bending the Rules		Mar. 2012		5.5				—				1.0				(5.4		)		0.1				0.9				(0.7		)		(1.5		)
				9.6				0.1				3.1				(8.9		)		1.0				2.1				(0.8		)		(2.7		)
Prior Releases				106.7				4.0				98.6				(22.8		)		4.4				5.8				(3.8		)		0.1
Completed but not released				3.1				3.1				—				—				—				—				—				—
In production				2.7				2.7				—				—				—				—				—				—
In development				0.8				0.8				—				(4.1		)		—				—				—				(1.0		)
Sub-total				$	138.6			$	16.0			$	107.1			$	(40.4	)		$	10.8			$	7.9			$	(9.2	)		$	(3.6	)
Selling, General & Administrative Expenses																												(3.5		)		(1.9		)
Total																												$	(12.7	)		$	(5.5	)

____________________

* Production costs are presented net of the associated benefit of production incentives.

During 2013, we2016 as compared to 2015. We released three featurefive films, via theatrical distribution, No One LivesCountdown, Scooby Doo! & WWE: Curse of the Speed Demon, Interrogation,  Dead Man DownIncarnate and The Call,Eliminators, twoin 2016, as compared to six films 12 Rounds 2: Reloaded and The Marine 3: Homefront direct to DVD and one made-for-television movie, Christmas Bounty. Third-party distributors control the distribution and marketing of these films and, as in 2015.  As we typically participate in a result, we recognize revenue on a net basis after the third-party distributor recoups distribution fees and expenses andfilm’s results are reported to us. Results are typically reported to us in periods subsequent to the initialour distributor’s recoupment of costs, there is a lag between a film’s release of these films.

and its impact on revenue. WWE Studios recorded revenues of $10.8$10.1 million for 2013 compared to $7.9in 2016 include $3.0 million for 2012, an increasefrom film releases in 2015, with prior releases contributing the remainder of $2.9 million or 37%. Revenues forfilm revenues. WWE Studios is impacted by the timingrevenue of our$7.1 million in 2015 includes $2.5 million from film releases and change in our distribution model. The increase in revenue in 2013 is primarily related to2014, with prior releases contributing the made-for-television movie, Christmas Bounty, which was released in the fourth quarterremainder of 2013. Although, there were five feature films released in 2013 compared to four films released in 2012, revenues for these 2013 films will be recognized on a net basis as participation statements are received rather than upon release as was the case with our self-distributed titles, including Christmas Bounty.film revenues. WWE Studios OIBDA decreased $7.2increased $1.3 million in 20132016 as compared to 2012, primarily as2015, due, in part, to the increase in revenues, and changes to the terms of the distribution of a resultpreviously released film, which resulted in lower expenses of recording impairment charges of $11.7 million in 2013 compared with $1.2 million in 2012.$1.1 million.

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At December 31, 2013,2016, the Company had $16.0$27.1 million (net of accumulated amortization and impairment charges) of feature film production assetsFeature Film Production Assets capitalized on its Consolidated Balance Sheet, of which $9.4$13.9 million relates tois for films in-release, $3.4 million is for films in production and the remaining $9.8 million is for films that are completed, and inpending release, and $6.6 million relates to various films not yet released.or developmental projects. We review and revise estimates of ultimate revenue and participation costs at the end of each reporting periodquarter to reflect the most current information available. If estimates for a film’s ultimate revenue and/or costs are revised and indicate a significant decline in a film’s profitability, or if events or circumstances change that would indicate we should assess whether the fair value of a film is less than its unamortized film costs, we calculate the film's estimated fair value using a discounted cash flowflows model. If fair value is less than unamortized cost, the film asset is written down to fair value. In 2013, the Company recorded impairmentstotaling $11.7 million, including $4.7 million and $0.9 million, for Dead Man Down and No One Lives, respectively, which were 2013 releases and $6.1 million from previously released films. During 2012, weWe recorded impairment charges of $1.2$0.8 million related to the feature films, Bending the Rulesand Barricade.

Revenues- Corporate & Other (dollars in millions )		2013				2012				increase (decrease)
Other		$	2.9			$	2.3			26	%

Other revenues, which include revenues associated with talent appearances, increased by $0.4$0.5 million in 2013 as compared to the prior year period.2016 and 2015, respectively.

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OIBDA- Corporate & Other (dollars in millions )		2013				2012				increase (decrease)
Corporate & Other		$	(127.3	)		$	(116.4	)		9	%

Corporate & Other Expenses

The following table presents the amounts and percent change of

We record certain significant corporate and other expenses (dollars in millions):

		2013				2012				increase (decrease)
Staff related		$	48.4			$	43.5			11	%
Management incentive compensation		7.0				10.1				(31	)%
Legal, accounting and other professional		15.7				14.8				6	%
Travel and entertainment expenses		5.1				4.0				28	%
Advertising, marketing and promotion		8.4				6.4				31	%
Corporate insurance		4.0				3.9				3	%
Bad debt expense		—				2.5				(100	)%
All other		41.6				33.8				23	%
Total corporate & other expenses		$	130.2			$	119.0			9	%
Corporate & Other as a percentage of net revenues		26		%		25		%

costs within our Corporate and other expenses primarily include corporate overhead and certain expenses related to our sales and marketing, including our international offices, and talent development functions, including costs associated with our WWE Performance Center. TheseOther segment since the costs benefit the Company as a whole and are therefore not allocateddirectly attributable to individual businesses.our other reportable segments. These costs are presented in two categories, Corporate Support and Business Support. Corporate Support expenses primarily include our corporate general and administrative functions. Business Support expenses include our sales and marketing functions, our international offices, talent development costs, including costs associated with our WWE Performance Center, and our business strategy and data analytics functions. The presentation of Corporate & Other expenses in these two categories provides further details on the primary composition of our Selling, general and administrative expenses as presented in our Consolidated Statements of Operations as the majority of Selling, general and administrative expenses are comprised of expenses from our Corporate & Other segment. 

The following table presents the financial results for our Corporate and otherOther segment (dollars in millions):



		For the year ended December 31,
		2016												2015
		Corporate Support				Business Support				Total Corporate & Other				Corporate Support				Business Support				Total Corporate & Other				Increase (Decrease)
Corporate & Other revenue		$	—			$	4.2			$	4.2			$	—			$	3.2			$	3.2			31	%

Corporate & Other expenses:
Staff related		$	23.3			$	36.5			$	59.8			$	23.9			$	32.2			$	56.1			7	%
Management incentive compensation			10.9				13.6				24.5				10.9				13.7				24.6			(0)	%
Legal, accounting and other professional			17.3				12.0				29.3				16.8				7.3				24.1			22	%
Travel and entertainment expenses			0.2				5.9				6.1				0.2				5.7				5.9			3	%
Advertising, marketing and promotion			0.5				9.4				9.9				0.5				7.7				8.2			21	%
Corporate insurance			2.6				1.3				3.9				2.7				1.6				4.3			(9)	%
Talent related expenses (1)			—				20.1				20.1				—				17.8				17.8		��	13	%
Other expenses			18.0				11.3				29.3				17.4				9.8				27.2			8	%
Corporate & Other expenses		$	72.8			$	110.1			$	182.9			$	72.4			$	95.8			$	168.2			9	%
Corporate & Other as a percentage of net revenues			10	%			15	%			25	%			11	%			15	%			26	%

Loss on abandonment			—				—				—				7.1				—				7			(100)	%

OIBDA - Corporate & Other		$	(72.8)			$	(105.9)			$	(178.7)			$	(79.5)			$	(92.6)			$	(172.1)			4	%

(1)

Talent related expenses within Business Support include costs associated with our WWE Performance Center, talent appearances and certain talent support costs. Talent costs associated with specific revenue streams are excluded from the above amounts and included within applicable business segments.

Corporate and Other expenses increased by $11.2$14.7 million, or 9%, in 20132016 as compared to 2012.2015. This wasincrease is primarily due to increases in professional fees of $4.7 million in support of company-wide strategic initiatives, staff related costs of $3.7 million due to increased expensesheadcount, talent related costs of $2.6 million in support of talent development and investments of $1.6 million in global branding. 

Corporate and Other OIBDA for 2015 included a non-cash abandonment charge of $7.1 million to write-off the value of costs related to supporting our content related initiatives, includinga media center expansion project that were incurred several years ago but the launch of WWE Network in 2014, as well as to develop our advertising sales and international infrastructure, partially offset by decreased management incentive compensationexpansion was delayed due to 2013 operating performance.

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Tablethe economic uncertainty at the time. The Company made the determination that these plans would not be viable and abandoned and wrote-off the asset balance associated with the project as Loss on abandonment on our Consolidated Statements of Contents

Operations, which is reflected in our Corporate and Other segment results.

Depreciation and Amortization

(dollars in millions)



										Increase
		2016				2015				(decrease)
Depreciation and amortization		$	24.4			$	22.8			7	%

		2013				2012				increase (decrease)
Depreciation and amortization		$	24.5			$	20.0			23	%

Depreciation and amortization expense increased by $4.5$1.6 million, or 23%7%, in 20132016 as compared to 2012. Depreciation2015, primarily driven by a higher asset base.

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Interest Expense

(dollars in millions)



										Increase
		2016				2015				(decrease)
Interest expense		$	3.0			$	2.4			25	%

Interest expense, for 2013 reflects higher propertywhich relates primarily to interest and equipment balancesamortization associated with the Convertible Notes, our debt facilities, assumed mortgage and aircraft financing, increased by $0.6 million in 2016 as compared to support our emerging content2015, primarily driven by the interest associated with the Convertible Notes and distribution efforts, including our new WWE Network.

mortgage assumed during 2016.

Investment Income, Interest and Other Expense, Net

(dollars in millions)



										Increase
		2016				2015				(decrease)
Investment income, net		$	2.3			$	1.8			28	%
Other expense, net		$	(1.8)			$	(2.0)			10	%

		2013				2012				increase (decrease)
Investment income, interest and other expense, net		$	(1.3	)		$	(0.5	)		160	%

Investment income, interestnet during the years ended December 31, 2016 and other2015 includes $1.6 million and $1.0 million, respectively, of equity method earnings, representing our pro-rata portion from an equity method investment entered into during the first quarter of 2015. Investment income, net also includes income of $0.7 million and $0.8 million from our short term investment instruments during 2016 and 2015, respectively. Other expense, net yielded an expenseis primarily comprised of $1.3foreign currency translation net losses of $1.4 million in 2013 compared to $0.5and certain excise taxes of $0.7 million, in 2012, reflecting lower interest and investmentpartially offset by $0.7 million of rental income.

Income Taxes

(dollars in millions)



										Increase
		2016				2015				(decrease)
(Benefit from) provision for income taxes		$	19.4			$	12.1			60	%
Effective tax rate			36	%			33	%

		2013				2012				increase (decrease)
Provision for income taxes		$	1.8			$	11.3			(84	)%
Effective tax rate		39		%		26		%

The 2013 effective tax rate was negatively impacted due36% in 2016 as compared to 33% in 2015. The higher rate in 2016 is primarily attributable to a reduction in the sizedomestic production activity benefit. 

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Table of permanent differences relative to our pre-tax income, i.e. certain non-deductible expenses are driving the effective rate higher due to decreased income levels in 2013. The 2012 effective tax rate was positively impacted by $4.4 million of previously unrecognized tax benefits primarily related to the settlement of various audits, including the State of Connecticut, the IRS, and other state and local jurisdictions.Contents

Liquidity and Capital Resources

We had cash and cash equivalents and short-term  investments of $115.4$297.4 million and $109.4$267.1 million as of December 31, 20142017 and 2013,2016, respectively. Our short-term investments consist primarily of U.S. Treasury securities, corporate bonds, and municipal bonds, including pre-refunded municipal bonds, and government agency bonds. Our debt balance totaled $25.9$213.5 million and $29.6$202.7 million as of December 31, 20142017 and 2013, respectively. This debt is2016, respectively, and includes the carrying value of $177.9 and $161.0 million related to the financingour convertible senior notes due 2023 as of our corporate aircraft purchased in August 2013. 

On February 24, 2014, the Company launched WWE Network, an over-the-top subscription based platform that allows subscribers access to WWE content. Included in the subscription is access to our marquis pay-per-view events, which were previously sold as stand-alone events through cableDecember 31, 2017 and satellite providers. As viewership of these events transition to WWE Network, our pay-per-view revenues were adversely impacted. December 31, 2016, respectively.  

We believe that our existing cash and cash equivalents and investment balances and cash provided bygenerated from operations will be sufficient to meet our operating requirements overfor at least the next twelve months, inclusive of dividends,dividend payments, debt service, film and television production activities and capital expenditures.

Included in our cash and investment balances at

Borrowing Capacity

In December 31, 2014 is2016, the benefit of $50 million received in October 2014 as an advance payment relating to a long-term television rights deal. This amount is recorded as deferred revenue in our consolidation balance sheet and will be recognized in accordance with the terms of the agreement over the next five years.

Borrowing Capacity

In May 2014, weCompany entered into a First Amendment to ouran amended and restated $200$100.0 million senior unsecured revolving credit facility with a syndicated group of banks, with JPMorgan Chase Bank, N.A. acting as Administrative Agent (the "Revolving Credit Facility").  The Revolving Credit Facility has a maturity date to provide for financial flexibility during our Network launch.July 29, 2021. As of December 31, 2014,2017, the Company iswas in compliance with the provisions of the credit facility and currently has access to funds under the facility, if needed, however during 2015 this access may be severely limited or unavailable altogether without the amendment of certain covenants. No assurance can be given that this amendment will be available or economically viable. As of December 31, 2014,our Revolving Credit Facility, there were no amounts outstanding, under the credit facility and the Company hashad available debt capacity under the terms of the facility of $100.0 million. 

In May 2015, two of the Company’s subsidiaries entered into a $35.0 million secured asset based revolving credit facility, as amended (the “Film Credit Facility”). On December 21, 2017, we repaid in full all outstanding debt and terminated our Film Credit Facility. In connection with the termination, we expensed $0.4 million of approximately $169.0 million.

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Tableunamortized debt issuance costs.

Debt Summary

In December 2016, the Company issued $200.0 million aggregate principal amount of Contents

3.375% convertible senior notes (the "Convertible Notes") due December 15, 2023, and in January 2017, we issued an additional $15.0 million in aggregate principal amount of Convertible Notes after partial exercise of an over-allotment option. The sale of the Convertible Notes in December and January resulted in $193.9 million and $14.5 million, respectively, in net proceeds to WWE after deducting the initial purchasers’ discount and estimated offering expenses. Proceeds from the Convertible Notes were used, in part, to pay for the cost of a convertible note hedge of $34.1 million related to the December issuance and $2.6 million related to the January issuance, which were partially offset by proceeds received from the sale of warrants of $19.5 million and $1.5 million, related to the December and January issuances, respectively. See Note 11,  Convertible Debt, in the Notes to Consolidated Financial Statements for further information. We intend to use the proceeds to support the execution of our long-term growth strategy and for general corporate purposes.

In September 2016, the Company acquired land and a building located in Stamford, Connecticut adjacent to our production facility. In connection with the acquisition, we assumed future obligations under a loan agreement, in the principal amount of $23.0 million, which loan is secured by a mortgage on the property. Pursuant to the loan agreement, since the assets of WWE Real Estate, a subsidiary of the Company, represent collateral for the underlying mortgage, these assets will not be available to satisfy debts and obligations due to any other creditors of the Company.

In 2013, the Company entered into a $31.6 million promissory note (the “Aircraft Note”) with Citizens Asset Finance, Inc., for the purchase of a 2007 Bombardier Global 5000 aircraft and refurbishments. In August 2017, the Aircraft Note was assigned to Fifth Third Equipment Finance Company. The Aircraft Note is secured by a first priority perfected security interest in the purchased aircraft. As of December 31, 2017 and 2016, the amounts outstanding under the Aircraft Note were $12.6 million and $17.1 million, respectively.

Cash Flows from Operating Activities

Cash generated from operating activities was $54.7$96.6 million for the year ended December 31, 2014,2017, compared to $23.8$62.1 million for the year ended December 31, 2013.2016.  The $34.5 million increase in cash provided by operating activities is driven by the receipt of a $50 million advance payment related to our domestic television distribution agreement and improved terms relating to our receivables, partially as a result of the launch of WWE Network, offset by reduced operating performance, includingchanges in working capital and increased spending for the launchnon-cash items, such as stock compensation and ongoing support of WWE Network, as well as, from increased spending on film production assets.

amortization.

During 2014,2017, the Company spent $18.7$12.5 million on feature film production activities, compared to $11.3$6.6 million in 2013.2016. In 2014,2017, we received $2.0$1.8 million in incentives related to feature film productions. In 2013, we received $0.9productions, as compared to $1.0 million in incentives related to feature film production.2016. We anticipate spending between $20.0$5 million and $30.0$20 million on feature film production during the year ending December 31, 2015.

2018.

We recognized $13.8received $13.4 million in non-film related incentives associated with television production incentivesactivities in 2014, including infrastructure credits,2017, as compared to $10.3$17.7 million in the prior year period.2016. During the year ending December 31, 2015,2018, we anticipate receiving approximately $8.0$10 million to $10.0$15 million inon non-film related incentives.

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During 2014,2017, the Company spent $20.9$15.9 million to produce additional contentnon-live event programming for television, including Total Divas Season2 and 3 7 and programmingTotal Bellas Season 2,and various programs for WWE Network, as compared to $11.5$28.0 million spent in the prior year period.2016, which included programming for television, including Total Divas Season 5 and 6, and Total Bellas Season 1, and WWE Network programming, including Camp WWE,  Swerved Season 2 and Holy Foley.  We anticipate spending approximately $18.0$10 million to $23.0$30 million to produce additional non-live event content during the year ending December 31, 2015.2018.  

Our accounts receivable represent a significant portion of our current assets and relate principally to amounts due to us from negative subscriptions, as well as a limited number of customers, distributors and licensees.licensees that produce consumer products containing our intellectual property. At December 31, 2014,2017, our largest single customerreceivable balance from customers was approximately 14%16% of our gross accounts receivable balance.receivable. Changes in the financial condition or operations of our distributors, customers or licensees may result in increased delayed payments or non-payments which would adversely impact our cash flows from operating activities and/or our results of operations.

Cash Flows from Investing Activities

Cash used byin investing activities totaled $1.2was $133.7 million for the year ended December 31, 2014,2017, as compared to $50.8$24.1 million for the year ended December 31, 2013. The change was primarily due to cash paid in the prior year to acquire a new corporate aircraft for approximately $30.9 million. Also contributing was a reduction in capital spending in2016. During the current year, in accordance with our cost cutting initiatives implemented in the second half of 2014. The current year also reflects an increase in cash proceeds aswe invested a resultportion of the saleproceeds from our convertible debt offering and purchased $142.4 million of short-term investments and received proceeds from the maturities of our old corporate aircraftinvestments of $35.7 million.  Capital expenditures in 2017 decreased $5.2 million as compared to 2016. The prior year included $4.9 million paid towards the purchase of a building and underlying real property located in Stamford, Connecticut. Capital expenditures for the receipt of funds relatedyear ending December 31, 2018 are estimated to infrastructure tax credits on capital projects.

range between $50 million and $70 million.

Cash Flow from Financing Activities

Cash used byin financing activities totaled $39.2was $37.1 million for the year ended December 31, 2014,2017, as compared to $6.0cash generated from financing activities of $135.9 million for the year ended December 31, 2013.2016.  During 2013,the current year, we received $31.0$13.4 million in net proceeds from the issuance of a note payable entered into in August 2013 related to the purchasesale of our new corporate aircraft. Additionally, in 2014, we paid $4.1 million of scheduled principal payments related to the new corporate aircraft debtConvertible Notes, less associated bond hedge and warrant transactions, as compared to $1.4cash received of $179.3 million in the prior year period.

year. The Company made dividend payments of $36.9 million and $36.6 million during the years ended December 31, 2017 and 2016, respectively. Additionally, the Company paid $9.2 million and $5.5 million during 2017 and 2016, respectively, as a result of directly withholding shares for tax-withholding purposes associated with the vesting of employee equity awards.

Non-Cash Investing Transactions

In 2016, WWE Real Estate assumed future obligations under a Loan Agreement, in the principal amount of $23.0 million, which loan is secured by a mortgage on the Purchased Property. The Company’s assumption of this mortgage is a non-cash transaction for purposes of the Consolidated Statements of Cash Flows.

During 2015, the Company received an equity interest in Tapout valued at $13.8 million in exchange for promotional service obligations to be provided in the future. The Company’s contribution is a non-cash transaction for purposes of the Consolidated Statements of Cash Flows.

Contractual Obligations

     We

We have entered into various contracts under which we are required to make guaranteed payments, including:

·

Scheduled principal and fixed interest payments under our secured loan in connection with our corporate aircraft financing.

Scheduled principal and fixed interest payments under our secured loan in connection with our corporate aircraft financing.

·

Scheduled principal and fixed interest payments under our assumed mortgage in connection with an owned building in Stamford, Connecticut.

Various operating leases for facilities and sales offices with terms generally ranging from one to ten years.

·

Convertible notes with fixed semi-annual interest payments.

Service contracts with certain vendors and independent contractors, including our talent with terms ranging from one to twenty

·

Various operating leases for facilities and sales offices with terms generally ranging from one to ten years.

Service agreement obligation related to WWE Network (excluding future performance based payments which are variable in nature).

·

Service contracts with certain vendors and independent contractors, including our talent with terms ranging from one to twenty years.

·

Service agreement obligations related to WWE Network (excluding future performance based payments which are variable in nature).

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Our aggregate minimum payment obligations under these contracts as of December 31, 20142017 are as follows (dollars in millions):



																	After
		2018			2019			2020			2021			2022			2022			Total
Long-term debt		$	6.1		$	6.3		$	4.6		$	1.4		$	1.4		$	23.6		$	43.4
Convertible debt (1)			7.3			7.3			7.2			7.3			7.2			222.0			258.3
Operating leases			5.0			4.5			2.5			1.6			1.6			6.4			21.6
Service agreement obligation			6.4			—			—			—			—			—			6.4
Service contracts and talent commitments			27.6			20.0			14.3			7.1			5.9			0.7			75.6
Total commitments		$	52.4		$	38.1		$	28.6		$	17.4		$	16.1		$	252.7		$	405.3

(1)

Convertible debt obligations assume that no notes are converted prior to the December 15, 2023 maturity date. See Note 11, Convertible Debt,  in the Notes to the Consolidated Financial Statements for additional information.

		2015				2016				2017				2018				2019				After 2019				Total
Long-term debt		$	4.9			$	4.9			$	4.9			$	4.9			$	4.9			$	3.2			$	27.7
Operating leases		4.6				3.2				1.9				1.7				1.6				2.1				15.1
Service agreement obligation		9.5				—				—				—				—				—				9.5
Talent and other commitments		12.0				9.7				7.6				2.0				2.0				2.5				35.8
Total commitments		$	31.0			$	17.8			$	14.4			$	8.6			$	8.5			$	7.8			$	88.1

Our Consolidated Balance Sheet at December 31, 20142017 includes $1.7$0.4 million in liabilities associated with uncertain tax positions (including interest and penalties of approximately $0.5$0.1 million), which is not included in the table above. The Company does not expect to pay any significant settlements related to these uncertain tax positions in 2015.2018. Additionally, included at December 31, 2017 is $0.4 million in liabilities associated with the deemed repatriation transition tax as a result of the Act.  The Act permits the Company to pay the net tax liability interest free over a period of up to eight years.

Seasonality

Our operating results are not materially affected by seasonal factors; however, our premier event, WrestleMania, occurs late in our first quarter or early in our second quarter and historically has resulted in increased revenuerevenues and expenses in these periods. As a result of the subscription basedsubscription-based model of WWE Network, revenues may not continue to increase in a corresponding manner but costs from WrestleMania are expected to remain significantly higher than our typical pay-per-view event costs potentially resulting in decreased OIBDA in the period. Churn among WWE Network subscribers may be more pronounced in the periods following large WWE events shown on WWE Network such as WrestleMania. Revenues from our licensing and direct sale of consumer products, including our catalogs, magazines and internet sites, varies from period to period depending on the volume and extent of licensing agreements and marketing and promotion programs entered into during any particular period of time, as well as the commercial success of the media exposure of our characters and brand. The timing of revenues related to our WWE Studios segment fluctuates based upon the timing of our feature film releases. The timing of these events, as well as the continued introduction of new product offerings and revenue generating outlets can and will cause fluctuations in quarterly revenues and earnings.

Inflation

During 2014, 20132017, 2016 and 2012,2015, inflation did not have a material effect on our business.

Off-Balance Sheet Arrangements

As of December 31, 2014,2017, we did not have any material off-balance sheet arrangements, as defined in Item 303(a)(4) of SEC Regulation S-K.

Critical Accounting Estimates

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities. We base our estimates on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities. The accuracy of these estimates and the likelihood of future changes depend on a range of possible outcomes and a number of underlying variables, many of which are beyond our control. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following judgments and estimates are critical in the preparation of our consolidated financial statements.

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Feature Film Production Assets, Net

Feature film production assets are recorded at the cost of production, including production overhead and net of production incentives. The costs for an individual film are amortized in the proportion that revenues bear to management’s estimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. Unamortized feature film production assets are evaluated for impairment each reporting period. We review and revise estimates of ultimate revenue and participation costs at each reporting period to reflect the most current information available. Reductions inIf estimates for a film’s ultimate revenue for a film and/or any increases in estimated participation costs associated with a film couldare revised and indicate a significant decline in a film’s profitability. When there is a significant decline in a film’s profitability, or if events or circumstances change that indicate we calculateshould assess whether the estimated fair value of a film is less than its unamortized film costs, we calculate the film’s estimated fair value using a discounted cash flow model. If the estimated fair value of the film is less than its unamortized costs, we record an impairment charge for the excess of

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the carrying value ofcost, the film over the estimatedasset is written down to fair value. Impairment charges are recorded as an increase in amortization expense included in cost of revenues in the consolidated financial statements.

Our estimate of ultimate revenues for feature films includes revenues from all sources for ten years from the date of a film’s initial release. We estimate the ultimate revenues based on industry and Company specific trends, the historical performance of similar films, the star power of the lead actors, and the genre of the film. Prior to the release of a feature film and throughout its life, we revise our estimates of revenues based on expected future results, actual results and other known factors affecting the various distribution markets.

During the years ended December 31, 2014, 20132017, 2016 and 2012,2015, we recorded aggregate impairment charges of $1.5$5.5 million, $11.7$0.8 million, and $1.2$0.5 million, respectively, related to several of our feature films.

As of December 31, 2014,2017,  we had $26.5$22.3 million (net of accumulated amortization and impairment charges) in capitalized film production costs, which includes 2437 released films, four filmsone film completed but not yet released, and fivetwo films in production.production, and one film in development. No assurance can be given that additional unfavorable changes to revenue and cost estimates will not occur, which, in turn, may result in additional impairment charges that might materially affect our results of operations and financial condition.

Television Production Assets, Net

Television production assets consist primarily of severalnon-live event episodic television series we have produced for distribution eitherthrough a variety of platforms, including on our WWE Network or through other distribution platforms.Network. Amounts capitalized include development costs, production costs, production overhead, and production overhead.employee salaries. Costs to produce live event programming are expensed when the event is first broadcast. Cost to produce episodic programming for television or distribution on WWE Network are amortized in the proportion that revenues bear to management's estimateestimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. Costs to produce our live event programming are expensed when the event is first broadcast and are not included in the capitalized costs or in the related amortization. Unamortized television production assets are evaluated for impairment each reporting period. If conditions indicate a potential impairment, and the estimated future cash flows are not sufficient to recover the unamortized asset, the asset is written down to fair value. In addition, if we determine that a program will not likely air, we will expense the remaining unamortized asset. During the years ended December 31, 20142017, 2016 and 2013,2015, we expensed $25.9$21.1 million, $26.9 million and $7.0$30.6 million, respectively, related to the amortization of television production assets. During the year ended

As of December 31, 2012,2017 and 2016, we did not expense anyhad $7.3 million and $12.5 million, respectively, in capitalized television production assets.

costs. We did not record any impairments related to our television production assets during the years ended December 31, 2014, 20132017, 2016 and 2012.

Pay-Per-View Programming Revenue Recognition

Revenues from our pay-per-view programming are recorded when the event is aired and are based upon our initial estimate of the number of buys achieved. This initial estimate is based on preliminary buy information received from our pay-per-view distributors. Final reconciliation of the pay-per-view buys occurs within one year and subsequent adjustments to the buys are recognized in the period new information is received. Historically, adjustments made to our initial estimates have not had a significant impact on our revenues. Our pay-per-view accounts receivable balance was $3.2 million and $11.2 million at December 31, 2014 and 2013, respectively.

Home Video Returns Allowance

Revenues from the sales of home video titles are recorded at the later of the date of delivery by our distributor to retailers, or the date that these products are made widely available for sale by retailers, net of an allowance for estimated returns. The allowance for estimated returns is based on historical information, current industry trends and demand for our titles. A change in demand for any of our videos or a change in the home video market could impact the level of video returns. As of December 31, 2014 and 2013, our home video returns allowance was $2.6 million and $4.5 million, respectively.

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2015.

Allowance for Doubtful Accounts

Our accounts receivable represent a significant portion of our current assets and relate principally to amounts due to us froma limited number of distributors of our Network, pay-per-view, television, home video programming, and licensees whothat produce consumer products containing our intellectual property and/or trademarks.property. Adverse changes in general economic conditions and/or contraction in global credit markets could precipitate liquidity problems among our key distributors, increasing our exposure to bad debts which could negatively impact our results of operations and financial condition. We estimate the collectabilitycollectibility of our receivables and establish allowances for the amount of receivablesaccount receivable that we estimate to be uncollectible. We base these allowances on our historical collection experience, the length of time our receivablesaccount receivable are outstanding and the financial condition of individual customers. Changes in the financial condition of a single major customer, either adverse or positive, could impact the amount and timing of any additional allowances or reductions that may be required. At December 31, 2014 and 2013,2017, our largest receivable balance from customers made up 14% and 13%, respectively,was 16% of our gross accounts receivable. At December 31, 2016, our two largest receivable balance.balances from customers were 17% and 15% of our gross accounts receivable. As of December 31, 20142017 and 2013,2016, our allowance for doubtful accounts was $4.8$1.3 million and $2.8$5.9 million, respectively.

Income Taxes

Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax bases of particular assets and liabilities, and operating loss carryforwards, using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more-likely-than-not that some

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or all of the deferred tax assets will not be realized. In evaluating our ability to recover deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustmentsadjustment to the deferred tax assets valuation allowance, which would reduce the provision for income taxes.

During the fourth quarter of 2017, the Company recorded a charge of $10.9 million associated with the remeasurement of its net deferred tax assets in connection with the Act. The remeasurement is due to the reduction in the corporate tax rate from 35% to 21%, which reduced the future benefit the company will realize associated with these assets. Additionally, the Company recorded a charge of $0.4 million in the fourth quarter of 2017 associated with the one-time transition tax based on the total post-1986 earnings and profits that were previously deferred from U.S. income taxes. We are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts.

As of December 31, 2014,2017 and 2016, our net deferred tax assets were $37.0 million.$22.4 million and $37.7 million, respectively. As of December 31, 2014,2017 and 2016, our deferred tax liabilities were $2.0 million. Our$3.4 million and $5.2 million, respectively. The decrease in our deferred tax asset balance in 2017 was primarily driven by the remeasurement of our deferred tax assets increased significantlyand liabilities as a result of a reduction in 2014 duethe corporate tax rate from 35% to operating losses.21%, coupled with the activity in prepaid royalties relating to our television contracts. We believe that it is more likely than not that we will have sufficient taxable income in the future to realize these operating loss carryforwardsdeferred tax assets and as such have not recorded a valuation allowance to reduce the net carrying value. If we determine it is more likely than not that we will not have sufficient taxable income to realize these assets, we may need to record a valuation allowance in the future.

We use a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate tax positions taken or expected to be taken in a tax return by assessing whether they are more likely than not sustainable, based solely on their technical merits, upon examination, and including resolution of any related appeals or litigation process. The second step is to measure the associated tax benefit of each position, as the largest amount that we believe is more likely than not realizable. Differences between the amount of tax benefits taken or expected to be taken in our income tax returns and the amount of tax benefits recognized in our financial statements represent our unrecognized income tax benefits, which we record as a liability. Our policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. At December 31, 2014,2017, our unrecognized tax benefits including interest and penalties totaled approximately $1.7$0.4 million.

Recent Accounting Pronouncements

The information set forth under Note 2 to the Consolidated Financial Statements under the caption “

Summary of Significant Accounting Policies – Recent Accounting Pronouncements

In January 2015, the FASB issued Accounting Standards Update No. 2015-01, "Income Statement-Extraordinary and Unusual Items” (Topic 225). This ASU updated the accounting guidance related to extraordinary and unusual items, is incorporated herein by eliminating the concept of extraordinary items. In addition, disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. This standard update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. We early adopted this accounting standard update as of December 31, 2014, which did not have a material effect on our consolidated financial statements.reference.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern". This ASU requires that management evaluate, and, if required, disclose conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. This guidance is effective for the first annual period ending after December 15, 2016, and interim periods thereafter. This standard update is effective for our fiscal year beginning of January 1, 2017. We are currently evaluating theimpact of the adoption of this new standard on our consolidated financial statements.

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In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition”, andmost industry-specific guidance. The ASU requires an entity to recognize revenue in an amount that reflects the consideration to which the entityexpects to receive in exchange for goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2016 andearly adoption is not permitted. This standard update is effective for our fiscal year beginning of January 1, 2017. We are currently evaluating theimpact of the adoption of this new standard on our consolidated financial statements.

In April 2014, the FASB issued Accounting Standards Update No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". This ASUupdated the accounting guidance related to discontinued operations. The updated accounting guidance provides a narrower definition ofdiscontinued operations than existing GAAP. The updated accounting guidance requires that only disposals of components of an entity, or groupsof components, that represent a strategic shift that has or will have a material effect on the reporting entity’s operations be reported in the financialstatements as discontinued operations. The updated accounting guidance also provides guidance on the financial statement presentations anddisclosures of discontinued operations. On July 1, 2014, we early adopted this accounting standard update which did not have a material effect onour consolidated financial statements.

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Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain statements that are forward-looking and are not based on historical facts. When used in this Form 10-K and our other SEC filings, our press releases and comments made in earnings calls, investor presentations or otherwise to the public, the words “may,” “will,” “could,” “anticipate,” “plan,” “continue,” “project,” “intend”, “estimate”, “believe”,“intend,” “estimate,” “believe,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These statements relate to our future plans, objectives, expectations and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or the performance by us to be materially different from future results or performance expressed or implied by such forward-looking statements. The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Form 10-K and our other SEC filings, in press releases, earnings calls and other statements made by our authorized officers: (i) risks relating to WWE Network; (ii) risks relating to entering, maintaining and renewing major distribution agreements;agreements, including our principal domestic television license which currently expires in September 2019; (ii) risks relating to WWE Network, including the risk that we are unable to attract, retain and renew subscribers; (iii) our need to continue to develop creative and entertaining programs and events; (iv) our need to retain or continue to recruit key performers; (v) the risk of a decline in the popularity of our brand of sports entertainment, including as a result of changes in the social and political climate; (vi) the possible unexpected loss of the services of Vincent K. McMahon; (vii) possible adverse changes in the regulatory atmosphere and related private sector initiatives; (viii) the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which we operate and/or our inability to compete effectively, especially against competitors with greater financial resources or marketplace presence; (ix) uncertainties associated with international markets; (x) our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with applicable regulations; (xi) our dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others’ intellectual property rights; (xii) risks relating to the complexity of our rights agreements across distribution mechanisms and geographical areas; (xiii) the risk of substantial liability in the event of accidents or injuries occurring during our physically demanding events including, without limitation, claims relating to CTE; (xiv) exposure to risks relating to large public events as well as travel to and from such events; (xv) risks inherent in our feature film business; (xvi) a variety of risks as we expand into new or complementary businesses and/or make strategic investments;investments and/or acquisitions; (xvii) risks related to our computer

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systems and online operations; (xviii) risks relating to privacy norms and regulations; (xix) risks relating to a possible decline in general economic conditions and disruption in financial markets; (xix)(xx) risks relating to our accounts receivable which represent a significant portion of our current assets and relate principally to a limited number of distributors and licensees; (xx)receivable; (xxi) risks relating to our ability to access our revolving credit facility; (xxi)indebtedness;  (xxii) potential substantial liabilities if litigation is resolved unfavorably; (xxii)(xxiii) our potential failure to meet market expectations for our financial performance, which could adversely affect the market price and volatility of our stock; (xxiii)performance; (xxiv) through his beneficial ownership of a substantial majority of our Class B common stock, our controlling stockholder, Vincent K. McMahon, exercises control over our affairs, and his interests may conflict with the holders of our Class A common stock; (xxiv) risks relating to the fact that our dividend, which exceeds our current and accumulated earnings and profits; (xxv) a substantial number of shares are eligible for sale by Mr. McMahon and members of his family or trusts established for their benefit, and the sale, or the perception of possible sales, of those shares could lower our stock price; and (xxvi) risks related to the relatively small public “float” of our Class A common stock. In addition, our dividend is dependent on a number of factors, including, among other things, our liquidity and historical and projected cash flow, strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends (including under our revolving credit facility), general economic and competitive conditions and such other factors as our Board of Directors may consider relevant.  Forward-looking statements made by the Company speak only as of the date made, are subject to change without any obligation on the part of the Company to update or revise them, and undue reliance should not be placed on these statements.

For more information about risks and uncertainties associated with the Company's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of this Form 10-K and our other SEC filings.

It

Itemem 7A. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are exposed to foreign currency exchange rate, interest rate and equity price risks that could impact our results of operations. Our foreign currency exchange rate risk is minimized by maintaining minimal net assets and liabilities in currencies other than our functional currency.

Short-Term Investments

Our investment portfolio consists primarily of U.S. Treasury securities, corporate and municipal bonds, including pre-refunded municipal bonds, and corporategovernment agency bonds. We are exposed to market risk related to our investment portfolio primarily as a result of credit quality risk and interest rate risk. Credit quality risk is defined as the risk of a credit downgrade to an individual fixed maturityor floating rate security and the potential loss attributable to that downgrade. Credit quality risk is managed through our investment policy, which establishes credit quality limitations on the overall portfolio as well as diversification and percentage limits on securities of individual issuers. The result is a diversified portfolio of fixed maturityor floating rate securities, with a weighted average credit rating of approximately “AA”.

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Interest rate risk is defined as the potential for economic losses on fixed maturityor floating rate securities due to a change in market interest rates. Our investments in municipal bondscorporate and corporatemunicipal bonds have exposure to changes in the level of market interest rates. Interest rate risk is mitigated by managing our investment portfolio’s dollar weighted duration. Additionally, we have the capability of holding any security to maturity, which would allow us to realize full par value. We have evaluated the impact of an immediate 100 basis point change in interest rates on our investment portfolio. A 100 basis point increase in interest rates would result in an approximate $1.2$2.0 million decrease in fair value, whereas a 100 basis point decrease in interest rates would result in an approximate $1.2$2.0 million increase in fair value.

Convertible Senior Notes

In December 2016, we issued $200.0 million principal amount of 3.375% convertible senior notes due December 15, 2023, and in January 2017, pursuant to the exercise of an over-allotment option, we issued an additional $15.0 million principal amount of these notes. We carry this instrument at face value less unamortized discount and unamortized debt issuance costs on our Consolidated Balance Sheet. Since this instrument bears interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of these instruments fluctuates when interest rates change, and when the market price of our stock fluctuates. The fair value of the convertible senior notes will generally increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of the convertible senior notes will generally increase as our common stock price increases and will generally decrease as our common stock price declines in value. The interest and market value changes affect the fair value of our convertible senior notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligation. Conversion of our Convertible Notes and the exercise of related Warrants may cause economic dilution to our stockholders and dilution to our earnings per share.

It

Itemem 8.  Financial Statements and Supplementary Data

The information required by this item is set forth in the Consolidated Financial Statementsconsolidated financial statements filed with this report.report and are herein incorporated by reference.

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Itemm 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None.

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Itemem 9A. Controls and Procedures

Disclosure Controls and Procedures

We have performed an evaluation under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer and our Chief Strategy and Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined under the Securities Exchange Act of 1934. Based on that evaluation, our Chairman and Chief Executive Officer, and our Chief Strategy and Financial Officer concluded that as of the end of the period covered by this Form 10-K, our disclosure controls and procedures were effective and designed to ensure that all material information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting identified in connection with management’s evaluation that occurred during the fourth quarter of our fiscal year ended December 31, 20142017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer and our Chief Strategy and Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 20142017 based on the guidelines established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2014.2017. We review the results of management’s assessment with our Audit Committee.

The effectiveness of our internal control over financial reporting as of December 31, 20142017 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report on Form 10-K. Such report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014.

2017.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors and Stockholders of

World Wrestling Entertainment, Inc.

Stamford, CT

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of World Wrestling Entertainment, Inc. and subsidiaries (the "Company"“Company”) as of December 31, 2014,2017, based on criteria established in Internal Control — Integrated Framework (2013) (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2017, of the Company and our report dated February 8, 2018, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company'sCompany’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.Reporting. Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit.

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 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company'scompany’s internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'scompany’s assets that could have a material effect on the financial statements.

Because of theits inherent limitations, of internal control over financial reporting including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be preventedprevent or detected on a timely basis.detect misstatements. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2014 of the Company and our report dated February 17, 2015 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

February 17, 20158, 2018

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Item

Item 9B. Other Information

None.

PA

PARTRT III

The information required by Part III (Items 10-14) is incorporated herein by reference to our definitive proxy statement for our 20152018 Annual Meeting of Stockholders.

P

PARTART IV

Item

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this report:

1. Consolidated Financial Statementsfinancial statements and Schedule: See index to Consolidated Financial Statementsconsolidated financial statements on page F-1 of this report.

2. Exhibits:

Exhibit No.
Exhibit
No.		Description of Exhibit
3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1 (No. 333-84327)).
3.1A		Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1(a) to our Registration Statement on Form S-8, filed July 15, 2002).
3.1B	Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Annex B to the Proxy Statement filed on March 11, 2016).
3.2		Amended and Restated By-laws (incorporated by reference to Exhibit 3.4 to our Registration Statement on Form S-1 (No. 333-84327)).
3.2A		Amendment to Amended and Restated By-Laws (incorporated by reference to Exhibit 4.2(a) to our Registration Statement on Form S-8, filed July 15, 2002).
4.1	Indenture between World Wrestling Entertainment, Inc. and U.S. Bank National Association, as trustee, dated December 16, 2016 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed December 12, 2016).
10.1* 4.2	Form of 3.375% Convertible Senior Note due 2023 (included in Exhibit 4.1).
10.1*	World Wrestling Entertainment, Inc. 2007 Omnibus Incentive Plan, effective July 20, 2007 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed July 26, 2007).
10.1A*		World Wrestling Entertainment, Inc. Amended and Restated 2007 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement filed on March 14, 2014).
10.2*
10.2*		Form of Agreement for Performance Stock Units to the Company’s employees and officers under the Company’s 2007 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed July 26, 2007).
10.3*		Form of Agreement for Restricted Stock Units to the Company’s employees and officers under the Company’s 2007 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed July 26, 2007).
10.4*		Amended and Restated Employment Agreement with Vincent K. McMahon, effective as of January 1, 2011 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed November 15, 2010).

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10.5*
Exhibit
No.		Description of Exhibit
10.5*		World Wrestling Entertainment 2012 Employee Stock Purchase Plan (incorporated by reference to Appendix A to our Proxy Statement dated March 16, 2012).
10.6*
10.6*		Amended and Restated Booking Agreement with Paul Levesque, effective as of January 1, 2012 (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011).
10.6A*		First Amendment to Amended and Restated Booking Agreement with Paul Levesque, dated May 9, 2016 (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016).
10.7*		Form of offer letters between the Company and executive officers (incorporated by reference to Exhibit 10.7 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011).
10.8*
10.8*		Booking Agreement, dated October 7, 2013, between the Company and Stephanie McMahon Levesque (incorporated by reference to Exhibit 10.17 to the Company'sCompany’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013).
10.8A*		First Amendment to Booking Contract with Stephanie McMahon-Levesque, dated October 7, 2016 (incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016).
10.9*		Employment Agreement between the Company and Michael Luisi dated July 19, 2013 (incorporated by reference to Exhibit 10.10 to the Company'sCompany’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013).
10.9A*
10.9A*		Amendment, dated October 8, 2014, to Employment Agreement between the Company and Michael J. Luisi dated July 19, 2013 (incorporated by reference to Exhibit 10.9A to the Current Report on Form 8-K, filed October 8, 2014).

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10.11
10.10		Amended and Restated Revolving Credit Facility dated April 30, 2013, and related exhibits and schedules (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
10.10A		First Amendment to Amended and Restated Revolving Credit Agreement, dated May 1, 2014 and related exhibits and schedules (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
10.11		Loan and Aircraft Security Agreement, dated August 7, 2013 and related exhibits and schedules (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K, filed August 12, 2013).
10.12
10.12		Promissory Note, dated August 7, 2013 (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K, filed August 12, 2013).
10.13*
10.13*		Form of Indemnification Agreement entered into between the Company and its independent Directors (incorporated by reference to Exhibit 10.13 to the Company'sCompany’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).
10.14*		Form of Performance Stock, Retention, and Non-Competition Agreement for Michelle D. Wilson, George A. Barrios and Kevin Dunn (incorporated by reference to Exhibit 10.9A to the Current Report on Form 8-K, filed March 13, 2015).
21.1 10.16*	World Wrestling Entertainment, Inc. 2016 Omnibus Incentive Plan (incorporated by reference to Annex A to the Proxy Statement filed March 11, 2016).
10.16A*	Form of Performance Stock Units to the Company’s executive officers under the Company’s 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.16A to the Current Report on Form 8-K, filed April 21, 2016).
10.16B*	Form of Restricted Stock Units to the Company’s executive officers under the Company’s 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.16A to the Current Report on Form 8-K, filed April 21, 2016).
10.18	Amended and Restated Revolving Credit Facility dated July 29, 2016 and related exhibits and schedules (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K, filed July 29, 2016).
10.18A	First Amendment, dated as of December 12, 2016, to Amended and Restated Revolving Credit Facility dated July 29, 2016, and related exhibits and schedules (incorporated by reference to Exhibit 10.18A to the Current Report on Form 8-K, filed December 12, 2016).
10.19	Note and Mortgage Assumption Agreement, dated as of September 13, 2016, by and among WWE Real Estate Holdings, LLC, 88 Hamilton Avenue Associates, LLC and Wilmington Trust, National Association, as trustee for the registered holders of Wells Fargo Commercial Mortgage Trust 2015-NXS2, Commercial Mortgage Pass-Through Certificates, Series 2015-NXS2 (incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K, filed September 15, 2016).
10.20	Loan Agreement, dated June 8, 2015, between 88 Hamilton Avenue Associates, LLC and Natixis Real Estate Capital LLC (incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K, filed September 15, 2016).
10.22	Purchase Agreement between World Wrestling Entertainment, Inc. and J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as representatives of the initial purchasers named therein, dated December 12, 2016 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed December 12, 2016).
10.23	Convertible Note Hedge Confirmation between World Wrestling Entertainment, Inc. and JPMorgan Chase Bank, National Association, London Branch, dated December 12, 2016 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed December 12, 2016).
10.24	Warrant Confirmation between World Wrestling Entertainment, Inc. and JPMorgan Chase Bank, National Association, London Branch, dated December 12, 2016 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed December 12, 2016).
10.25	Convertible Note Hedge Confirmation between World Wrestling Entertainment, Inc. and Morgan Stanley & Co. International plc, dated December 12, 2016 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed December 12, 2016).
10.26	Warrant Confirmation between World Wrestling Entertainment, Inc. and Morgan Stanley & Co. International plc, dated December 12, 2016 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, filed December 12, 2016).
10.27	Convertible Note Hedge Confirmation between World Wrestling Entertainment, Inc. and Citibank, N.A., dated December 12, 2016 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, filed December 12, 2016).
10.28	Warrant Confirmation between World Wrestling Entertainment, Inc. and Citibank, N.A., dated December 12, 2016 (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K, filed December 12, 2016).
21.1	List of Subsidiaries (filed herewith).
23.1		Consent of Deloitte & Touche LLP (filed herewith).
31.1		Certification by Vincent K. McMahon pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).
31.2		Certification by George A. Barrios pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (filed herewith).

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32.1
32.1		Certification by Vincent K. McMahon and George A. Barrios pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS		XBRL Instance Document
101.SCH
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

____________________

*   Indicates management contract or compensatory plan or arrangement.

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Item 16.  Form 10-K Summary

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

		World Wrestling Entertainment, Inc.
		(Registrant)
Dated: February 17, 20158, 2018	By:	/s/ VINCENT K. MCMAHON
		Vincent K. McMahon
		Chairman of the Board of Directors and
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature
Signature		Title or Capacity		Date
/s/ VINCENT K. MCMAHON		Chairman of the Board of Directors and Chief Executive Officer		February 17, 20158, 2018
Vincent K. McMahon		(principal executive officer)
/s/ STEPHANIE MCMAHON		Director and Chief Brand Officer		February 8, 2018
Stephanie McMahon
/s/ PAUL LEVESQUE		Director and Executive Vice President,		February 8, 2018
Paul Levesque		Talent, Live Events & Creative
/s/ STUART U. GOLDFARB		Director		February 17, 20158, 2018
Stuart U. Goldfarb
/s/ PATRICIA  A. GOTTESMAN		Director		February 17, 20158, 2018
Patricia A. Gottesman
/s/ DAVID KENINLAUREEN ONG		Director		February 17, 20158, 2018
David Kenin Laureen Ong
/s/ JOSEPH H. PERKINSROBYN W. PETERSON		Director		February 17, 20158, 2018
Joseph H. Perkins Robyn W. Peterson
/s/ FRANK A. RIDDICK III		Director		February 17, 20158, 2018
Frank A. Riddick III
/s/ JEFFREY R. SPEED		Director		February 17, 20158, 2018
Jeffrey R. Speed
/s/ LAUREEN ONG		Director		February 17, 2015
Laureen Ong
/s/ GEORGE A. BARRIOS		Chief Strategy and Financial Officer		February 17, 20158, 2018
George A. Barrios		(principal financial officer)
/s/ MARK KOWAL		Senior Vice President and Corporate Controller Chief Accounting Officer		February 17, 20158, 2018
Mark Kowal		(principal accounting officer)

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WORLD WRESTLING ENTERTAINMENT, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
	Page
Report of Independent Registered Public Accounting Firm	F-2 F-2
Consolidated Statements of Operations for the years ended December 31, 2014, 20132017, 2016 and 20122015	F-3 F-3
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2014, 20132017, 2016 and 20122015	F-4 F-4
Consolidated Balance Sheets as of December 31, 20142017 and 20132016	F-5 F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2014, 20132017, 2016 and 20122015	F-6 F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 20132017, 2016 and 20122015	F-7 F-7
Notes to Consolidated Financial Statements	F-8 F-8
Schedule II – Valuation and Qualifying Accounts	F-35 F-38

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REPORT

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors and Stockholders of

World Wrestling Entertainment, Inc.

Stamford, CT

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of World Wrestling Entertainment, Inc. and subsidiaries (the "Company") as of December 31, 20142017 and 2013, and2016, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2014. Our audits also included2017, and the financial statement schedulerelated notes and the schedules listed in the Index at Item 15. 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of 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 accounting principles generally accepted in the United States of America.

We have also 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 (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 8, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements and financial statement schedule 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 Public Company Accounting Oversight Board (United States).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. An audit includesmisstatement, 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 supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of World Wrestling Entertainment, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2015 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

February 17, 20158, 2018

We have served as the Company’s auditor since 1999.

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WORLD

WORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)



		For the years ended December 31,
		2017			2016			2015
Net revenues		$	800,959		$	729,216		$	658,768
Cost of revenues			458,981			430,032			397,316
Selling, general and administrative expenses			240,350			219,132			192,773
Depreciation and amortization			26,050			24,411			22,760
Loss on abandonment			—			—			7,125
Operating income			75,578			55,641			38,794
Interest expense			14,736			3,020			2,367
Investment income, net			3,409			2,392			1,792
Other expense, net			(191)			(1,800)			(1,993)
Income before income taxes			64,060			53,213			36,226
Provision for income taxes			31,420			19,372			12,082
Net income		$	32,640		$	33,841		$	24,144
Earnings per share: basic		$	0.43		$	0.44		$	0.32
Earnings per share: diluted		$	0.42		$	0.44		$	0.32
Weighted average common shares outstanding:
Basic			76,743			76,149			75,696
Diluted			78,471			77,539			76,333
Dividends declared per common share (Class A and B)		$	0.48		$	0.48		$	0.48

		For the years ended December 31,
		2014				2013				2012
Net revenues		$	542,620			$	507,970			$	484,013
Cost of revenues		377,615				323,028				284,453
Selling, general and administrative expenses		180,457				154,582				136,341
Depreciation and amortization		26,705				24,469				20,024
Operating (loss) income		(42,157		)		5,891				43,195
Loss on equity investment		(3,962		)		—				—
Investment income, net		679				1,426				2,190
Interest expense		(2,084		)		(1,746		)		(1,704		)
Other expense, net		(1,780		)		(968		)		(997		)
(Loss) income before income taxes		(49,304		)		4,603				42,684
(Benefit from) provision for income taxes		(19,232		)		1,839				11,252
Net (loss) income		$	(30,072	)		$	2,764			$	31,432
(Loss) earnings per share: basic and diluted		$	(0.40	)		$	0.04			$	0.42
Weighted average common shares outstanding:
Basic		75,294				74,939				74,595
Diluted		75,294				75,379				74,981

See accompanying notes to consolidated financial statements.

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WORLD

WORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)


		For the years ended December 31,
		2017			2016			2015
Net income		$	32,640		$	33,841		$	24,144
Other comprehensive income (loss):
Foreign currency translation adjustments			120			(209)			(168)
Unrealized holding gains (losses) on available-for-sale securities    (net of tax expense (benefit) of $(334),  $57 and $(30), respectively)			(644)			93			(49)
Total other comprehensive loss			(524)			(116)			(217)
Comprehensive income		$	32,116		$	33,725		$	23,927

		For the years ended December 31,
		2014				2013				2012
Net (loss) income		$	(30,072	)		$	2,764			$	31,432
Other comprehensive (loss) income :
Foreign currency translation adjustments		(172		)		(141		)		156
(Losses) gains on unrealized holding gains on available-for-sale securities (net of tax (benefit) expense of $(83), $(232) and $450, respectively)		(135		)		(377		)		734
Reclassification adjustment for losses (gains) realized in net income available-for-sale securities (net of tax expense (benefit) of $(14), $0, and $75, respectively)		23				(1		)		(121		)
Total other comprehensive (loss) income		(284		)		(519		)		769
Comprehensive (loss) income		$	(30,356	)		$	2,245			$	32,201

See accompanying notes to consolidated financial statements.

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WORLD

WORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)



		As of December 31,
		2017			2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	137,700		$	211,976
Short-term investments, net			159,744			55,164
Accounts receivable (net of allowance for doubtful accounts and returns    of $3,035 and $8,259, respectively)			65,245			53,155
Inventory			8,332			6,531
Prepaid expenses and other current assets			19,961			22,480
Total current assets			390,982			349,306
PROPERTY AND EQUIPMENT, NET			131,325			132,631
FEATURE FILM PRODUCTION ASSETS, NET			22,300			27,137
TELEVISION PRODUCTION ASSETS, NET			7,292			12,508
INVESTMENT SECURITIES			27,367			24,957
NON-CURRENT DEFERRED INCOME TAX ASSETS			18,984			32,556
OTHER ASSETS, NET			16,257			21,808
TOTAL ASSETS		$	614,507		$	600,903
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt		$	4,638		$	6,121
Accounts payable and accrued expenses			77,738			70,360
Deferred income			55,818			56,653
Total current liabilities			138,194			133,134
LONG-TERM DEBT			30,958			35,596
CONVERTIBLE DEBT			177,900			161,008
NON-CURRENT INCOME TAX LIABILITIES			519			725
NON-CURRENT DEFERRED INCOME			13,977			30,697
Total liabilities			361,548			361,160
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Class A common stock: ($.01 par value; 180,000,000 shares authorized;    42,498,452 and 38,455,266 shares issued and outstanding as of    December 31, 2017 and 2016, respectively)			425			385
Class B convertible common stock: ($.01 par value; 60,000,000 shares authorized;    34,609,438 and 37,949,438 shares issued and outstanding as of    December 31, 2017 and 2016, respectively)			346			379
Additional paid-in capital			422,208			403,387
Accumulated other comprehensive income			2,371			2,895
Accumulated deficit			(172,391)			(167,303)
Total stockholders’ equity			252,959			239,743
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	614,507		$	600,903

	As of December 31,
	2014				2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	47,227			$	32,911
Short-term investments, net	68,186				76,476
Accounts receivable (net of allowance for doubtful accounts and returns of $7,726 and $9,344, respectively)	40,088				59,552
Inventory	4,735				2,874
Deferred income tax assets	24,120				12,237
Prepaid expenses and other current assets	12,865				16,147
Total current assets	197,221				200,197
PROPERTY AND EQUIPMENT, NET	114,048				133,480
FEATURE FILM PRODUCTION ASSETS, NET	26,471				16,018
TELEVISION PRODUCTION ASSETS, NET	5,832				10,772
INVESTMENT SECURITIES	7,200				8,299
NON-CURRENT DEFERRED INCOME TAX ASSETS	10,915				—
OTHER ASSETS, NET	20,867				9,696
TOTAL ASSETS	$	382,554			$	378,462
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	4,345			$	4,251
Accounts payable and accrued expenses	57,578				47,882
Deferred income	38,652				30,112
Total current liabilities	100,575				82,245
LONG-TERM DEBT	21,575				25,385
NON-CURRENT INCOME TAX LIABILITIES	1,668				4,884
NON-CURRENT DEFERRED INCOME	52,875				—
Total liabilities	176,693				112,514
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Class A common stock: ($.01 par value; 180,000,000 shares authorized;
33,179,499 and 31,302,790 shares issued and outstanding as of
December 31, 2014 and 2013, respectively)	332				313
Class B convertible common stock: ($.01 par value; 60,000,000 shares authorized;
42,298,437 and 43,797,830 shares issued and outstanding as of
December 31, 2014 and 2013, respectively)	423				438
Additional paid-in capital	353,706				346,974
Accumulated other comprehensive income	3,228				3,512
Accumulated deficit	(151,828		)		(85,289		)
Total stockholders’ equity	205,861				265,948
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	382,554			$	378,462

See accompanying notes to consolidated financial statements.

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WORLD

WORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except per share data)


															Accumulated
		Common Stock										Additional			Other
		Class A					Class B					Paid - in			Comprehensive			Accumulated
		Shares		Amount			Shares		Amount			Capital			Income			Deficit			Total
Balance, December 31, 2014		33,179		$	332		42,298		$	423		$	353,706		$	3,228		$	(151,828)		$	205,861
Net income		—			—		—			—			—			—			24,144			24,144
Other comprehensive loss		—			—		—			—			—			(217)			—			(217)
Stock issuances, net		427			4		—			—			(1,793)			—			—			(1,789)
Conversion of Class B common   stock by shareholder   (See Note 16)		609			6		(609)			(6)			—			—			—			—
Tax effect from stock-based   payment arrangements		—			—		—			—			431			—			—			431
Cash dividends declared		—			—		—			—			67			—			(36,412)			(36,345)
Stock-based compensation		—			—		—			—			17,232			—			—			17,232
Balance, December 31, 2015		34,215		$	342		41,689		$	417		$	369,643		$	3,011		$	(164,096)		$	209,317
Net income		—			—		—			—			—			—			33,841			33,841
Other comprehensive loss		—			—		—			—			—			(116)			—			(116)
Stock issuances, net		500			5		—			—			(4,152)			—			—			(4,147)
Conversion of Class B common   stock by shareholder   (See Note 16)		3,740			38		(3,740)			(38)			—			—			—			—
Debt discount on convertible debt, net (See Note 11)		—			—		—			—			33,060			—			—			33,060
Purchase of convertible note hedge (See Note 11)		—			—		—			—			(34,100)			—			—			(34,100)
Proceeds from issuance of warrants (See Note 11)		—			—		—			—			19,460			—			—			19,460
Tax effect from stock-based   payment arrangements		—			—		—			—			893			—			—			893
Cash dividends declared		—			—		—			—			484			—			(37,048)			(36,564)
Stock-based compensation		—			—		—			—			18,099			—			—			18,099
Balance, December 31, 2016		38,455		$	385		37,949		$	379		$	403,387		$	2,895		$	(167,303)		$	239,743
Net income		—			—		—			—			—			—			32,640			32,640
Other comprehensive loss		—			—		—			—			—			(524)			—			(524)
Stock issuances, net		703			7		—			—			(7,593)			—			—			(7,586)
Conversion of Class B common   stock by shareholder   (See Note 16)		3,340			33		(3,340)			(33)			—			—			—			—
Debt discount on convertible debt, net (See Note 11)		—			—		—			—			2,487			—			—			2,487
Purchase of convertible note hedge (See Note 11)		—			—		—			—			(2,558)			—			—			(2,558)
Proceeds from issuance of warrants (See Note 11)		—			—		—			—			1,460			—			—			1,460
Cash dividends declared		—			—		—			—			874			—			(37,728)			(36,854)
Stock-based compensation		—			—		—			—			24,151			—			—			24,151
Balance, December 31, 2017		42,498		$	425		34,609		$	346		$	422,208		$	2,371		$	(172,391)		$	252,959

		Common Stock														Additional				Accumulated Other
		Class A							Class B							Paid - in				Comprehensive				Accumulated
		Shares			Amount				Shares			Amount				Capital				Income				Deficit				Total
Balance, December 31, 2011		28,255			$	283			46,164			$	462			$	338,414			$	3,262			$	(47,278	)		$	295,143
Net income		—			—				—			—				—				—				31,432				31,432
Other comprehensive income		—			—				—			—				—				769				—				769
Stock issuances, net		336			3				—			—				(133		)		—				—				(130		)
Conversion of Class B common stock by shareholder (See Note 17)		663			7				(663	)		(7		)		—				—				—				—
Tax effect from stock-based payment arrangements		—			—				—			—				(588		)		—				—				(588		)
Cash dividends declared, $0.48 per share		—			—				—			—				154				—				(35,969		)		(35,815		)
Stock-based compensation		—			—				—			—				3,915				—				—				3,915
Balance, December 31, 2012		29,254			$	293			45,501			$	455			$	341,762			$	4,031			$	(51,815	)		$	294,726
Net income		—			—				—			—				—				—				2,764				2,764
Other comprehensive loss		—			—				—			—				—				(519		)		—				(519		)
Stock issuances (repurchases), net		346			3				—			—				(795		)		—				—				(792		)
Conversion of Class B common stock by shareholder (See Note 17)		1,703			17				(1,703	)		(17		)		—				—				—				—
Tax effect from stock-based payment arrangements		—			—				—			—				223				—				—				223
Cash dividends declared, $0.48 per share		—			—				—			—				259				—				(36,238		)		(35,979		)
Stock-based compensation		—			—				—			—				5,525				—				—				5,525
Balance, December 31, 2013		31,303			$	313			43,798			$	438			$	346,974			$	3,512			$	(85,289	)		$	265,948
Net loss		—			—				—			—				$	—			$	—			(30,072		)		(30,072		)
Other comprehensive loss		—			—				—			—				—				(284		)		—				(284		)
Stock issuances, net		376			4				—			—				(1,050		)		—				—				(1,046		)
Conversion of Class B common stock by shareholder (See Note 17)		1,500			15				(1,500	)		(15		)		—				—				—				—
Tax effect from stock-based payment arrangements		—			—				—			—				(79		)		—				—				(79		)
Cash dividends declared, $0.48 per share		—			—				—			—				317				—				(36,467		)		(36,150		)
Stock-based compensation		—			—				—			—				7,544				—				—				7,544
Balance, December 31, 2014		33,179			$	332			42,298			$	423			$	353,706			$	3,228			$	(151,828	)		$	205,861

See accompanying notes to consolidated financial statements.

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WO

WORLDRLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



		For the years ended December 31,
		2017			2016			2015
OPERATING ACTIVITIES:
Net income		$	32,640		$	33,841		$	24,144
Adjustments to reconcile net income to net cash provided by operating    activities:
Amortization and impairments of feature film production assets			17,377			6,662			3,891
Amortization of television production assets			21,137			26,933			30,591
Depreciation and amortization			32,030			29,396			26,630
Loss on abandonment			—			—			7,125
Services provided in exchange for equity instruments			(2,720)			(2,893)			(2,430)
Other amortization			6,759			2,403			2,135
Stock-based compensation			24,151			18,099			17,232
Provision for (benefit from) deferred income taxes			13,572			12,153			(9,674)
Other non-cash adjustments			1,003			(1,463)			(116)
Cash (used in) provided by changes in operating assets and liabilities:
Accounts receivable			(12,507)			5,459			(19,147)
Inventory			(1,801)			(364)			(1,432)
Prepaid expenses and other assets			131			(15,474)			(3,480)
Feature film production assets			(12,540)			(6,629)			(3,812)
Television production assets			(15,921)			(28,025)			(36,175)
Accounts payable, accrued expenses and other liabilities			8,112			(1,041)			12,689
Deferred income			(14,835)			(16,892)			4,238
Net cash provided by operating activities			96,588			62,165			52,409
INVESTING ACTIVITIES:
Purchases of property and equipment and other assets			(24,710)			(29,904)			(20,010)
Purchases of short-term investments			(142,373)			—			(21,624)
Proceeds from sales and maturities of investments			35,660			8,065			24,125
Purchase of equity investments			(2,316)			(2,250)			(1,210)
Net cash used in investing activities			(133,739)			(24,089)			(18,719)
FINANCING ACTIVITIES:
Repayment of debt			(7,504)			(14,441)			(4,345)
Dividends paid			(36,854)			(36,564)			(36,345)
Debt issuance costs			—			(702)			(850)
Proceeds from borrowings under the credit facilities			1,383			11,583			—
Proceeds from borrowings on convertible notes, net of issuance costs			14,534			193,899			—
Proceeds from issuance of warrants			1,460			19,460			—
Purchase of convertible note hedge			(2,558)			(34,100)			—
Taxes paid related to net settlement upon vesting of equity awards			(9,164)			(5,544)			(2,855)
Proceeds from issuance of stock			1,578			1,397			1,066
Excess tax benefits from stock-based payment arrangements			—			893			431
Net cash (used in) provided by financing activities			(37,125)			135,881			(42,898)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS			(74,276)			173,957			(9,208)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			211,976			38,019			47,227
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	137,700		$	211,976		$	38,019
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds		$	14,590		$	12,475		$	21,698
Cash paid for interest		$	9,312		$	1,580		$	1,395
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Purchases of property and equipment recorded in accounts payable and accrued expenses (See Note 9)		$	2,334		$	2,940		$	1,096
Mortgage assumption (See Note 10)		$	—		$	23,000		$	—
Purchase of investment securities (See Note 4)		$	—		$	—		$	13,800

		For the years ended December 31,
		2014				2013				2012
OPERATING ACTIVITIES:
Net (loss) income		$	(30,072	)		$	2,764			$	31,432
Adjustments to reconcile net (loss) income to net cash provided by operating
activities:
Amortization and impairments of feature film production assets		5,515				19,058				8,799
Amortization of television production assets		25,867				7,012				—
Depreciation and amortization		29,007				24,469				20,024
Loss on equity investment		3,962				—				—
Other Amortization		1,941				2,495				2,884
Stock-based compensation		7,544				5,525				3,845
Provision for (recovery from) doubtful accounts		1,164				(6		)		2,483
(Benefit from) provision for deferred income taxes		(25,479		)		1,422				6,183
Other non-cash adjustments		(494		)		(1,049		)		(441		)
Cash (used in)/provided by changes in operating assets and liabilities:
Accounts receivable		17,908				(8,972		)		4,560
Inventory		(1,861		)		(1,103		)		(112		)
Prepaid expenses and other assets		(9,259		)		(2,113		)		(2,796		)
Feature film production assets		(15,968		)		(9,128		)		(8,905		)
Television production assets		(20,927		)		(11,453		)		(6,080		)
Accounts payable, accrued expenses and other liabilities		4,424				(6,668		)		2,507
Deferred income		61,415				1,500				(1,332		)
Net cash provided by operating activities		54,687				23,753				63,051
INVESTING ACTIVITIES:
Purchase of corporate aircraft and related improvements		—				(30,898		)		—
Purchases of property and equipment and other assets		(11,901		)		(25,032		)		(33,890		)
Proceeds from sale of corporate aircraft		3,167				—				—
Net proceeds from infrastructure improvement incentives		2,937				—				—
Purchases of short-term investments		(35,440		)		(37,071		)		(19,177		)
Proceeds from sales and maturities of investments		42,237				44,318				45,191
Purchase of equity investments		(2,204		)		(2,200		)		(5,000		)
Proceeds from sales of property and equipment		—				39				—
Net cash used in investing activities		(1,204		)		(50,844		)		(12,876		)
FINANCING ACTIVITIES:
Proceeds from the issuance of note payable		364				31,032				—
Repayment of long-term debt		(4,080		)		(1,396		)		(1,621		)
Dividends paid		(36,150		)		(35,979		)		(35,815		)
Debt issuance costs		(758		)		(675		)		—
Proceeds from issuance of stock		970				704				811
Excess tax benefits from stock-based payment arrangements		487				268				7
Net cash used in financing activities		(39,167		)		(6,046		)		(36,618		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		14,316				(33,137		)		13,557
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		32,911				66,048				52,491
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	47,227			$	32,911			$	66,048
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds (As restated, see Note 1)		$	2,060			$	2,288			$	12,383
Cash paid for interest		$	1,376			$	984			$	815
NON-CASH INVESTING TRANSACTIONS:
Non-cash purchase of property and equipment		$	1,452			$	1,700			$	1,415

See accompanying notes to consolidated financial statements.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

1.

1. Basis of Presentation and Business Description

The accompanying consolidated financial statements include the accounts of WWE. “WWE” refers to World Wrestling Entertainment, Inc. and its subsidiaries, unless the context otherwise requires. References to “we,” “us,” “our” and the “Company” refer to WWE and its subsidiaries. WWE.  

Certain reclassifications have been made to the Consolidated Statements of Cash Flows in the prior year periods presented to conform to the current year presentation pursuant to our adoption of a new accounting standard as of January 1, 2017 related to share-based payment award accounting simplifications. See Note 2, Significant Accounting Policies – Recent Accounting Pronouncements, for further details.

We are an integrated media and entertainment company, principally engaged in the production and distribution of content through various channels, including our digitalpremium over-the-top ("OTT") WWE Network, television rights agreements, pay-per-view event programming, live events, feature films, licensing of various WWE themed products, and the sale of consumer products featuring our brands. Our operations are organized around the following four principal activities:

Media Division:

Network

Revenues consist principally of subscriptions to WWE Network, fees for viewing our pay-per-view and video-on-demand programming, and advertising fees.

Television

•DivisionRevenues consist principally of television rights fees and advertising.:

Network

·

Revenues consist principally of subscriptions to WWE Network, fees for viewing our pay-per-view programming and advertising fees.

Television

·

Revenues consist principally of television rights fees and advertising.

Home Entertainment

·

Revenues consist principally of sales of WWE produced content via home entertainment platforms, including DVD, Blu-Ray, and subscription and transactional on-demand outlets.

Revenues consist principally of sales of WWE produced content via home entertainment platforms, including DVD, Blu-Ray, subscription and transactional on-demand outlets.

Digital Media

·

Revenues consist principally of advertising sales on our websites and third-party websites including YouTube, and sales of various broadband and mobile content.

Revenues consist principally of advertising sales on our websites and third party websites including YouTube, sales of various broadband and mobile content and magazine publishing. The Company discontinued the magazine publishing business in August 2014.

Live Events

•Revenues consist principally of ticket sales and travel packages for live events.:

·

Revenues consist principally of ticket sales and travel packages for live events.

Consumer Products Division:

Division:

Licensing

Licensing

·

Revenues consist principally of royalties or license fees related to various WWE themed products such as video games, toys, and apparel.

Venue Merchandise

·

Revenues consist of sales of merchandise at our live events.

WWEShop

·

Revenues consist of sales of merchandise on our websites, including through our WWEShop Internet storefront and on distribution platforms, including Amazon.

WWE Studios:

·

Revenues consist of amounts earned from investing in, producing, and/or distributing filmed entertainment.

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Table of royalties or license fees related to various WWE themed products such as video games, toys and apparel.

Venue Merchandise

•Revenues consist of sales of merchandise at our live events.

WWEShop

•Revenues consist of sales of merchandise on our website through our WWEShop internet storefront.

WWE Studios

•Revenues consist of amounts earned from the investing in producing and/or distributing of filmed entertainment.

In our prior reports filed with the Securities Exchange Commission ("SEC") through fiscal year 2013, we presented five reportable segments: Live and Televised Entertainment, Consumer Products, Digital Media, WWE Studios and Unallocated Corporate and Other. Effective January 1, 2014, we now present ten reportable segments. Information presented for the years ended December 31, 2013 and 2012 included in the audited consolidated financial statements herein and elsewhere in this Annual Report has been recast to reflect our new segment presentation. See Note 19, Segment Information, for further details on our reportable segments. Such revisions have no impact on our consolidated financial condition, results of operations or cash flows for the periods presented.

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Contents

WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

1. Basis of Presentation and Business Description (continued)

Restatement

Within the supplemental information of the Consolidated Statements of Cash flows, prior year amounts for cash paid (received) for income taxes of $(3,052) and $7,158 in 2013 and 2012, respectively, were restated to include foreign withholding taxes.

2. Summary of Significant Accounting Policies

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenuerevenues and expenses during the reporting period.periods. Actual results could differ from those estimates.

Basis of Consolidation — The consolidated financial statements include the accounts of WWE and all of its domestic and foreign subsidiaries. Included in Corporate and Other are intersegment eliminations recorded in consolidation. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents — Cash and cash equivalents include cash on deposit in overnight deposit accounts, investments in Treasury bills and investments in money market accounts with original maturities of three months or less at the time of purchase.

Short-term Investments, Net — We classify all of our short-term investments as available-for-sale securities. Such investments consist primarily of U.S. Treasury securities, corporate and municipal bonds, including pre-refunded municipal bonds, corporate bonds and government agency bonds. All of theseThese investments are stated at fair value, with unrealized gains and losses on such securities reflected, net of tax, as other comprehensive income (loss) in stockholders’ equity. Realized gains and losses on investments are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

Accounts Receivable, Net — Accounts receivable relate principally to amounts due to us from distributors of our WWE Network, pay-per-view providers and television networks for pay-per-view presentations and television programming, respectively, and balances due from the sale of home videos, and magazines, as well as from licensees that produce consumer products containing our intellectual property and/or trademarks. We estimate the collectability of our receivables and establish allowances for the amount of accounts receivable that we estimate to be uncollectible. We base these allowances on our historical collection experience, the length of time our accounts receivable are outstanding and the financial condition of individual customers. An individual balance is charged to the allowance when all collection efforts have been exhausted and it is deemed likely to be uncollectible, taking into consideration the financial condition of the customer and other factors.

Inventory — Inventory consists of merchandise sold on our website,websites and on distribution platforms, including Amazon, merchandise sold at live events and DVDs/Blu-rays,Blu-Rays, which are sold via a distributor to retailers. Substantially all of our inventory is comprised of finished goods. Inventory is stated at the lower of cost or market.and net realizable value. The valuation of our inventories requires management to make market estimates assessing the quantities and the prices at which we believe the inventory can be sold.

Property and Equipment, Net — Property and equipment are stated at historical cost net of benefits associated with tax incentives less accumulated depreciation and amortization. Depreciation and amortization is computed on a straight-line basis over the estimated useful lives of the assets or, when applicable, the life of the lease, whichever is shorter. Vehicles and equipment are depreciated based on estimated useful lives varying from three to five years. Buildings and related improvements are depreciated based on estimated useful lives varying from five to thirty-nine years. Our corporate aircraft is depreciated over ten years on a straight-line basis less an estimated residual value. In 2013, we purchased a new corporate aircraft which we refurbished and placed into service in February 2014. It is being depreciated in the same manner as our previous corporate aircraft.

Feature Film Production Assets, Net — Feature film production assets are recorded at the cost of production, including production overhead and net of production incentives. The costs for an individual film are amortized in the proportion that revenues bear to management’s estimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. Unamortized feature film production assets are evaluated for impairment each reporting period. We review and revise estimates of ultimate revenue and participation costs at each reporting period to reflect the most current information available. If estimates for a film’s

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

2. Summary of Significant Accounting Policies (continued)

ultimate revenues and/or costs are revised and indicate a significant decline in a film’s profitability or if events or circumstances change that indicate we should assess whether the fair value of a film is less than its unamortized film costs, we calculate the film's estimated fair value using a discounted cash flows model. If fair value is less than the unamortized cost, the film is written down to fair value. Impairment charges are recorded as an increase in amortization expense included in cost of revenues in the Consolidated Statements of Operations.

Our estimate of ultimate revenues for feature films includes revenues from all sources for ten years from the date of a film’s initial release. We estimate the ultimate revenues based on industry and Company specific trends, the historical performance of similar films, the star power of the lead actors, and the genre of the film. Prior to the release of a feature film and throughout its life, we revise our estimates of revenues based on expected future results, actual results and other known factors affecting the various distribution markets.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

Television Production Assets, Net — Television production assets consist primarily of non-live event episodic television series we have produced for distribution through a variety of platforms including on our WWE Network. Amounts capitalized include development costs, production costs, production overhead and production overhead. Costs to produce live event programming are expensed when the event is first broadcast.employee salaries. Costs to produce episodic programming for television or distribution on WWE Network are amortized in the proportion that revenues bear to management's estimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. Costs to produce our live event programming are expensed when the event is first broadcast and are not included in the capitalized costs or in the related amortization.  

Unamortized television production assets are evaluated for impairment each reporting period. If conditions indicate a potential impairment, and the estimated future cash flows are not sufficient to recover the unamortized asset, the asset is written down to fair value. In addition, if we determine that a program will not likely air, we expense the remaining unamortized asset.

Valuation of Long-Lived Assets — We periodically evaluate the carrying amount of long-lived assets for impairment when events and circumstances warrant such a review.

Investment Securities —  We maintain several investments accounted for asunder the cost method investments. of accounting and under the equity method of accounting. Our cost method investments are carried at cost and adjusted for other-than-temporary declines in fair value.  Our equity method investment relates to a joint venture with Authentic Brands Group (“ABG”) in an apparel and lifestyle brand, Tapout LLC (“Tapout”). Under the equity method of accounting, to the extent that Tapout records income or losses, we record our share proportionate to our ownership percentage of 50%, and any dividends received reduce the carrying amount of the investment. Our share of the income or losses in Tapout is included as a component of Investment income, net, in the Consolidated Statements of Operations, and is also included, net of cash dividends received in Equity in earnings of affiliate, net of dividends received, in the Consolidated Statements of Cash Flows.

We evaluate our cost method investments for impairment annually, and when factors indicate that a significant decrease in value has occurred. Variables considered in making such assessments may include near-term prospects of the investees, recentsubsequent rounds of financing activities of the investees, and the investees’ capital structure as well as other economic variables, which reflect assumptions market participants wouldmay use in pricing these assets. Our investments are recorded atIf an investment is deemed to have experienced an other-than-temporary decline below its cost basis, we reduce the carrying amount of the investment to its quoted or estimated fair value, only if an impairment charge is recognized.as applicable, and establish a new cost basis for the investment. We record these other-than-temporary impairment charges for our cost method investments in Loss on equity investments in the Consolidated Statements of Operations.

Beginning in 2018, we will adopt new accounting rules that will change the way we account for our equity investments without readily determinable fair values (i.e. our existing cost method investments). Under the amended rules, the cost method of accounting is eliminated. Companies have the option to either measure equity investments without readily determinable fair values at fair value or at cost adjusted for changes in observable prices minus impairment. We have elected to measure equity investments without readily determinable fair value at cost adjusted for changes in observable prices minus impairment, which will be recognized in net income. These equity investments will be periodically assessed qualitatively for impairment. When a qualitative assessment indicates that impairment exists, we will measure the investment at fair value. Refer to the discussion in

Recent Accounting Pronouncements below for further details.

Income Taxes — Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Amounts are determined based on the differences between the book and tax bases of particular assets and liabilities and operating loss carry forwards, using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more-likely-than-not that some or all of the deferred tax assets will not be realized. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes, conversely, if we determine we might not be able to realize our deferred tax assets we would record a valuation allowance which would result in a changecharge to the provision for income taxes.

We use a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate tax positions taken or expected to be taken in a tax return by assessing whether they are more likely than not sustainable, based solely on their technical merits, upon examination, and including resolution of any related appeals or litigation process. The second step is to measure the associated tax benefit of each position, as the largest amount that we believe is more likely than not realizable. Differences between the amount of tax benefits taken or expected to be taken in our income tax returns and the amount of tax

benefits recognized in our financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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2. Summary of Significant Accounting Policies (continued)

benefits recognized in our financial

statements represent our unrecognized income tax benefits, which we record as a liability. Our policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense.

Revenue Recognition — Revenues are generally recognized when products are shipped or as services are performed. However, due to the nature of several of our business lines, there are additional steps in the revenue recognition process, as described below. We plan on adopting the new revenue recognition rules starting in fiscal year 2018. Refer to the Recent Accounting Pronouncements section below for a further discussion.

·

WWE Network Subscriptions:

WWE Network Subscriptions:

Revenues are recognized ratably over each paid monthly membership period. Deferred revenue consists of membershipsubscription fees billed to members that have not been recognized and gift memberships that have not been redeemed.

·

Pay-per-view programming:

Pay-per-view programming:

Revenues from our pay-per-view programming are recorded when the event is aired and are based upon our initial estimate of the number of buys achieved. This initial estimate is based on preliminary buy information received from our pay-per-view distributors. Final reconciliation of the pay-per-view buys generally occurs within one year and any subsequent adjustments to the buys are recognized in the period new information is received.

·

Sponsorships:

Sponsorships:

Through our sponsorship packages, we offer advertisers a full range of our promotional vehicles, including online and print advertising, on-air announcements and special appearances by our Superstars. We allocate revenue to all deliverables contained within a sponsorship arrangement based upon their relative selling price. In most instances, we determine relative selling price used for allocating revenue to a specific deliverable using vendor specific objective evidence ("VSOE"). VSOE is the selling price that a vendor charges when it sells similar products or services on a stand-alone basis.  After allocating revenue to each deliverable, we recognize revenue from our sponsorship arrangements when each element is delivered.

·

Licensing:

Licensing:

Revenues from our licensed products are recognized upon receipt of reports from the individual licensees that detail the royalties generated by related product sales. If we receive licensing advances, such payments are recorded as deferred revenue and are recognized as income when earned.

·

Home entertainment:

Home entertainment:

Revenues from the sales of home video titles are recorded net of an allowance for estimated returns, at the later of delivery by our distributor to retailers, or the date that these products are made widely available for sale by retailers. The allowance for estimated returns is based on historical information, current industry trends and demand for our titles.

·

TV rights:

Magazine publishing:

Publishing newsstand revenues are recorded when the magazine is shipped, net of an allowance for estimated returns. We estimate the allowance for newsstand returns based upon our review of historical return rates and the expected performance of our current titles in relation to prior issue return rates.

TV rights:

Rights fees received from distributors of our television programming, both domestically and internationally, are recorded when the program has been delivered to the distributor and is available for exhibition. Our typical distribution agreement is between one and five years in length and frequently provides for contractual increases over its term. Expenses incurred in the production of our weekly television programming are expensed when the programming is first available for exhibition.

Included in Non-current deferred income is $46.9 million

As of December 31, 2017 and 2016, we have $21,475 and $34,375, respectively, related to an advance payment associated with our recent domestic television rights deal.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

2. Summarydeal, which is included as a component of Significant Accounting Policies (continued)deferred income and non-current deferred income within our Consolidated Balance Sheets.

·

Films:

Films:

Revenue recognition for our feature films varies depending on the method of distribution and the extent of control the Company exercises over the distribution and related expenses. We exercise significant control over our self-distributed films and as a result, we record distribution revenue and related expenses on a gross basis in our financial statements. Third-party distribution partners control the distribution and marketing of our licensedco-distributed films, and as a result, we recognize revenue on a net basis after the third-party distributor recoups distribution fees and expenses and results have beenare reported to us. This typically occurs in periods subsequent to the initial release of the film. In certain arrangements, where worldwide film rights and interests are sold to third-party distribution partners, we recognize revenue upon delivery of the completed film to the third-party. Revenues generated from our films through the various

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(In thousands, except share data)

distribution channels, including home video, video-on-demand and television are recognized consistent with the policies described above.

Cost of Revenues — Included within cost of revenues is the amortization and impairmentsimpairment of feature film and television production assets. Television production assets consist primarily of non-live event episodic television series we have produced for distribution through a variety of platforms, including on our WWE Network. We amortize feature film production assets based on the estimated future cash flows. Television production assetsCosts to produce episodic programming for television or distribution on WWE Network are amortized whenin the episode is first broadcast on television.proportion that revenues bear to management's estimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. Unamortized feature film and television production assets are evaluated for impairment each reporting period. Cost of revenues also includes the the amortization of costs related to content delivery and technology assets utilized for our WWE Network.  These costs are amortized on a straight linestraight-line basis over the shorter of the expected useful life or the term of the respective service agreement. We began amortizing these costs following the launch of WWE Network on February 24, 2014.

Included within Costs of revenues are the following:

		Year Ended December 31,
		2014				2013				2012
Amortization and impairment of feature film assets		$	5,515			$	19,058			$	8,799
Amortization of television productions assets		25,867				7,012				—
Amortization of Network content delivery and technology		2,302				—				—
Total amortization and impairment included in costs of revenues		$	33,684			$	26,070			$	8,799

Programming AmortizationProgram amortization for WWE Network —is included in cost of revenues as a component of amortization of television production assets. For episodic programming debuting and currently expected to air exclusively on WWE Network, the cost of the programming is expensed upon initial release, as our expectation is that the vast majority of viewership will occur in close proximity to the initial release. We will monitor this assumption

Included within Cost of revenues are the following:



		Year Ended December 31,
		2017			2016			2015
Amortization and impairment of feature film assets		$	17,377		$	6,662		$	3,891
Amortization of television production assets			21,137			26,933			30,591
Amortization of WWE Network content delivery and technology assets			5,970			4,832			3,870
Total amortization and impairment included in cost of revenues		$	44,484		$	38,427		$	38,352

Costs to produce our live event programming are expensed when the event is first broadcast, and revise this policy if actual viewership patterns vary.

are not included in the amortization table noted above.

Film and Television Production Incentives — The Company has access to various governmental programs that are designed to promote film and television production within the United States and certain international jurisdictions. Tax credits earned with respect to expenditures on qualifying film, television and other production activities, including qualifying capital projects, are included as an offset to the related asset or as an offset to production expenses when we have reasonable assurance regarding the realizable amount of the tax credits.

Advertising Expense — Advertising costs are expensed as incurred, except for costs related to the development of a major commercial or media campaign, which are expensed in the period in which the commercial or campaign is first presented. For the years ended December 31, 2014, 20132017,  2016 and 2012,2015, we recorded advertising expenses of $30,198, $3,819$23,629,  $22,122 and $3,934,$25,260, respectively.

Foreign Currency Translation — For the translation of the financial statements of our foreign subsidiaries whose functional currencies are not U.S. Dollars, assets and liabilities are translated at the year-end exchange rate, and income statement accounts are translated at monthly average exchange rates for the year. The resulting translation adjustments are recorded in accumulated other comprehensive income, a component of stockholders’ equity and also in comprehensive income. Foreign currency transactions are recorded at the exchange rate prevailing at the transaction date, with any gains/losses recorded in other income/expense.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

2. Summary of Significant Accounting Policies (continued)

Stock-Based Compensation — Equity awards are granted to directors, officers and employees of the Company. Stock-based compensation costs associated with our restricted stock units ("RSUs") are determined using the fair market value of the Company's common stock on the date of the grant. These costs are recognized over the requisite service period using the graded vesting method, net of estimated forfeitures. RSUs have a service requirement typically over a three and one halfone-half year vesting schedule and vest in equal annual installments. Unvested RSUs accrue dividend equivalents at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying RSUs.

Stock-based compensation costs associated with our performance stock units ("PSUs") are initially determined using the fair market value of the Company's common stock on the date the awards are approved by our Compensation Committee (service inception date). The vesting of these PSUs isare subject to certain performance conditions and a service requirement of typically three and one half years. Until such time as the performance conditions are met, stock compensation costs associated with these PSUs are re-measured each reporting period based upon the fair market value of the Company's common stock and the probability ofestimated performance attainment on the reporting date. The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance conditions. Stock compensation costs for our PSUs are recognized

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

over the requisite service period using the graded vesting method, net of estimated forfeitures. Unvested PSUs accrue dividend equivalents once the performance conditions are met at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying PSUs.

We estimate forfeitures, based on historical trends when recognizing compensation expense and adjust the estimate of forfeitures when they are expected to differ or as forfeitures occur.

Beginning in 2017, we adopted new accounting rules related to simplifying the accounting for our share-based compensation awards. The new rules require entities to record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement, rather than as a component of additional paid-in capital, and requires entities to classify excess tax benefits as an operating activity in the statement of cash flows. In addition, the amounts paid to satisfy the statutory income tax withholding obligation, which prior to adoption was classified in operating activities on the cash flow statement, are now classified as a financing activity in the Consolidated Statements of Cash Flows. Refer to the discussion in Recent Accounting Pronouncements below for further details.

Earnings Per Share (EPS) — Basic EPS is calculated by dividing net income by the weighted average common shares outstanding during the period. Diluted EPS is calculated by dividing net income by the weighted average common shares outstanding during the period, plus dilutive potential common shares which is calculated using the treasury-stock method. Under the treasury-stock method, potential common shares are excluded from the computation of EPS in periods in which they have an anti-dilutive effect.

Net income per share of Class A and Class B common stock is computed in accordance with a two-class method of earnings allocation. As such, any undistributed earnings for each period are allocated to each class of common stock based on the proportionate share of cash dividends that each class is entitled to receive. The Company did not compute earnings per share using the two classtwo-class method for the years ended December 31, 2014, 20132017,  2016 and 2012,2015, as there were no undistributed earnings during the periods. Also, during 2014, 20132017,  2016 and 2012,2015, the dividends declared and paid per share of Class A and Class B common stock were the same.

Recent Accounting Pronouncements

In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting,” which provides guidance on the various types of changes which would trigger modification accounting for share-based payment awards. In summary, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, which for the Company will be effective for the fiscal year beginning January 1, 2018. The amendments are to be applied prospectively to an award modified on or after the adoption date, consequently the impact will be dependent on whether the Company modifies any of its share-based payment awards and the nature of such modifications.

In January 2015,2017, the FASB issued Accounting Standards Update No. 2015-01, "(“ASU”) 2017-01, “Income Statement-Extraordinary and Unusual ItemsBusiness Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, which for the Company will be effective for the fiscal year beginning January 1, 2018.  Since the new standard is applied prospectively and no disclosures are required at transition, the adoption of this new standard will not have an impact on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 225)230), Classification of Certain Cash Receipts and Cash Payments,” which addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017, which for the Company will be effective for the fiscal year beginning January 1, 2018. The amendments in the ASU should be applied using a retrospective transition method to each period presented. The Company does not expect that the adoption of this new standard will have a material impact on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting.” This ASU updatedupdate simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The update contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. The new guidance was adopted on January 1, 2017. The impact of adoption of the update is summarized below:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

·

All excess tax benefits and deficiencies that result from the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes related to our share-based payment awards will be recognized as income tax benefit or expense in the income statement instead of as an adjustment to additional paid-in capital.  In addition, excess tax benefits are no longer included in the calculation of diluted shares outstanding for purposes computing diluted earnings per share under the treasury stock method. The transition guidance related to these changes has been adopted by the Company on a prospective basis. During 2017, we recorded $1,604 of excess tax benefits related to the vesting of our share-based awards.  Prior to adoption, this amount was recorded in additional paid-in capital. This change reduced the Company’s effective tax rate from 52% to 49% for 2017.

·

An entity is now required to recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Under the required modified retrospective transition, the Company had no cumulative-effect adjustment to retained earnings at January 1, 2017, as the Company had no previously unrecognized excess tax benefits.

·

Excess tax benefits will be classified along with other income tax cash flows as an operating activity on the statement of cash flows. Prior to the update, excess tax benefits were separated from other income tax cash flows and classified as a financing activity. In fiscal year 2016 and 2015, excess tax benefits of $893 and $431, respectively, were recorded as part of financing cash inflows. The Company adopted these changes on a prospective basis.

·

Cash paid by an employer when directly withholding shares for tax-withholding purposes upon vesting of a share-based payment award are now classified as a financing activity on the statement of cash flows rather than as operating cash outflows. This amendment has been adopted by the Company on a retrospective basis. As a result of the retrospective adoption of this amendment, cash outflows of $5,544 and $2,855 were reclassified in the accompanying Consolidated Statements of Cash Flows from "Changes in accounts payable, accrued expenses and other liabilities" to "Taxes paid related to net settlement upon vesting of equity awards " for 2016 and 2015, respectively.

·

The threshold to qualify for equity classification of a share-based payment award would now permit withholding up to a maximum individual statutory tax rate in the applicable jurisdictions. The Company had no share-based payment awards receiving liability treatment under the prior rules. Therefore, the change from minimum up to a maximum statutory rate on tax withholdings had no impact on our consolidated financial statements and no cumulative effect adjustment was required.

·

The Company has elected to continue its current policy of estimating forfeitures rather than recognizing forfeitures when they occur.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to extraordinarythe Equity Method of Accounting”. The amendments eliminate the requirement to retroactively adopt the equity method of accounting when a change in ownership occurs. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investment and unusual items by eliminatingadopt the conceptequity method of extraordinary items. accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. This new guidance was adopted on January 1, 2017 with no impact on our consolidated financial statements.

In addition, disclosureFebruary 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842),” which will supersede the existing guidance for items that are unusuallease accounting. This new standard will require lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The new standard requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in nature or occur infrequentlythe lessee recognizing a right-of-use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize a straight-line total lease expense. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, which for the Company will be retained andeffective for the fiscal year beginning January 1, 2019. An entity will be expandedrequired to include itemsrecognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. While we are evaluating the impact that the new guidance will have on our consolidated financial statements, we currently expect a gross-up of our consolidated balance sheet as a result of recognizing right of use assets and lease liabilities. The extent of such gross-up remains to be determined once we complete a review of our existing lease contracts (we are both unusualprimarily a lessee) and service contracts, which may contain embedded leases.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires that most equity investments be measured at fair value, with subsequent changes in naturefair value recognized in net income (other than those accounted for under equity method of accounting). Under

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(In thousands, except share data)

the new guidance, entities will no longer be able to recognize unrealized holding gains and infrequently occurring. This standard updatelosses on equity securities classified today as available-for-sale in other comprehensive income, and they will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. However, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The guidance for classifying and measuring investments in debt securities and loans is not impacted. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. We early adopted this accounting standard update as of December 31, 2014,2017, which did not have a material effect on our consolidated financial statements.

In August 2014,for the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern". This ASU requires that management evaluate, and, if required, disclose conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. This guidanceCompany is effective for the first annual period ending after December 15, 2016, and interim periods thereafter. This standard update is effective for our fiscal year beginning of January 1, 2017. We are currently evaluating2018. The new guidance must be applied on a modified retrospective basis, with theimpact exception of the amendments related to equity investments without readily determinable fair values, which must be applied on a prospective basis. The Company does not expect that the adoption of this new standard will have a material impact on our consolidated financial statements. The Company’s current available-for-sale securities are invested primarily in debt securities which are not subject to the new guidance, therefore, we will continue to record any unrealized gains or losses on these available-for-sale debt securities through accumulated other comprehensive income. The new guidance will be applied prospectively starting on January 1, 2018 for the Company’s equity investments that do not have readily determinable fair values (i.e. our current cost method investments), therefore, we do not expect any impact upon adoption related to these equity investments. The Company intends to elect to record these equity investments without readily determinable fair values at cost, less impairment, if any, plus or minus subsequent adjustments for observable price changes.

In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which requires all inventory to be measured at the lower of cost and net realizable value, except for inventory that is accounted for using the LIFO or the retail inventory method, which will be measured under existing accounting standards. The new guidance must be applied on a prospective basis and was adopted on January 1, 2017 with no impact on our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

2. Summary of Significant Accounting Policies (continued)

In May 2014, the Financial Accounting Standards Board ("FASB")FASB issued Accounting Standards UpdateASU No. 2014-09, "“Revenue from Contracts with Customers (Topic 606)”." This ASUstandard will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition”"Revenue Recognition," andmost industry-specific guidance. The ASUstandard requires an entity to recognize revenue in an amount that reflects the consideration to which the entityexpects to receive in exchange for goods or services. ThisDuring 2016, the FASB issued additional interpretive guidance isrelating to the standard which covered the topics of principal versus agent considerations and identifying performance obligations and licensing.  The standard along with the subsequent clarifications issued are effective for annual reporting periods beginning after December 15, 20162017, andearly adoption is not permitted. This standard update is interim periods within those fiscal years, making it effective for our fiscal year beginning of January 1, 2017.2018. The standard allows an entity to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We are currently evaluatinghave completed our evaluation of theimpact of the adoptionnew standard and concluded the most significant impact will be an acceleration in the timing of revenue recognition in our licensing and WWE Studios businesses. These businesses collectively do not represent a significant percentage of total annual revenue for the Company. We currently record revenues from our licensed products and WWE Studios film distribution revenues after receiving statements from the licensee and/or film distributor. Under the new revenue recognition rules, revenues will be recorded based on best estimates available in the period of sales or usage. We do not expect the impact of this newchange to be material on a full-year basis, but will likely impact the revenues recorded in a specific quarter as compared to previously reported periods.  We intend to adopt the standard and the related modifications on January 1, 2018, using the modified retrospective approach.  Under this approach, the cumulative effect of initially applying the guidance will be reflected as an adjustment to beginning retained earnings. We are refining our consolidated financial statements.

In April 2014,final cumulative effect adjustment to retained earnings but expect that the FASB issued Accounting Standards Update No. 2014-08, "Presentationadjustment will range between $10,000 and $14,000 on a net, tax effected, basis with the majority of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". This ASUupdated the accounting guidanceadjustment related to discontinued operations. The updated accounting guidance provides a narrower definitionour licensing business.

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Table ofdiscontinued operations than existing GAAP. The updated accounting guidance requires that only disposals of components of an entity, or groupsof components, that represent a strategic shift that has or will have a material effect on the reporting entity’s operations be reported in the financialstatements as discontinued operations. The updated accounting guidance also provides guidance on the financial statement presentations anddisclosures of discontinued operations. On July 1, 2014, we early adopted this accounting standard update which did not have a material effect onour consolidated financial statements. Contents

WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

3. Earnings Per Share

For purposes of calculating basic and diluted earnings per share, we used the following weighted average common shares outstanding (in thousands):



		Year Ended December 31,
		2017			2016			2015
Net income		$	32,640		$	33,841		$	24,144

Weighted average basic common shares outstanding			76,743			76,149			75,696
Dilutive effect of restricted and performance stock units			1,721			1,385			634
Dilutive effect of employee share purchase plan			7			5			3
Weighted average dilutive common shares outstanding			78,471			77,539			76,333

Earnings per share:
Basic		$	0.43		$	0.44		$	0.32
Diluted		$	0.42		$	0.44		$	0.32

Anti-dilutive outstanding restricted and performance stock units    (excluded from per-share calculations)			—			—			—

		Year Ended December 31,
		2014				2013				2012
Net (loss) income		$	(30,072	)		$	2,764			$	31,432
Weighted- average basic common shares outstanding		75,294				74,939				74,595
Dilutive effect of restricted and performance stock units		—			(a)	438				379
Dilutive effect of employee share purchase plan		—			(a)	2				7
Weighted- average dilutive common shares outstanding		75,294				75,379				74,981
(Loss) earnings per share:
Basic		$	(0.40	)		$	0.04			$	0.42
Diluted		$	(0.40	)		$	0.04			$	0.42
Anti-dilutive outstanding options (excluded from per-share calculations)		—				—				2
Anti-dilutive outstanding restricted and performance stock units (excluded from per-share calculations)		80				395				—

(a) Due

Effect of Convertible Notes and Related Convertible Note Hedge and Warrants

In connection with the issuance of the Convertible Notes, the Company entered into Convertible Note Hedge and Warrant transactions as described further in Note 11, Convertible Debt. The collective impact of the Convertible Note Hedge and Warrants effectively eliminates any economic dilution that may occur from the actual conversion of the Convertible Notes between the conversion price of $24.91 per share and the strike price of the Warrants of $31.89 per share.

For purposes of calculating diluted earnings per share, prior to a lossconversion, we will include in the denominator of our diluted earnings per share calculation, the effect of any additional shares that may be issued if our common stock price exceeds $24.91 per share using the treasury stock method. In addition, if the average price of our common stock exceeds the strike price of the Warrants of $31.89 per share, we will also include the effect of the additional potential shares that may be issued related to the Warrants using the treasury stock method. Prior to actual conversion, the Convertible Note Hedges are not considered for purposes of the year, zero incremental shares are included because thecalculation of diluted earnings per share, as their effect would be antidilutive.

F-14

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, exceptanti-dilutive. The convertible notes due 2023 had no impact on diluted earnings per share data)

for the years ending December 31, 2017 and 2016 since the average price of our common stock did not exceed the conversion price of $24.91 per share during those periods.

4. Investment Securities and Short-Term Investments

Investment Securities:Securities

Included within Investment Securities are the following:



		As of December 31,
		2017			2016
Equity method investment		$	14,664		$	14,592
Cost method investments			12,703			10,365
Total investment securities		$	27,367		$	24,957

Equity Method Investment

In March 2015, WWE maintains several costand ABG formed a joint venture to re-launch an apparel and lifestyle brand, Tapout (the "Brand"). ABG agreed to contribute certain intangible assets for the Brand, licensing contracts, systems, and other administrative functions to Tapout.  The Company agreed to contribute promotional and marketing services related to the venture for a period of at least five years in exchange for a 50% interest in the profits and losses and voting interest in Tapout. The Company valued its initial investment of $13,800

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

based on the fair value of the existing licensing contracts contributed by ABG. To the extent that Tapout records income or losses, we record our share proportionate to our ownership percentage, and any dividends received reduce the carrying amount of the investment. Net equity method investments. On March 14, 2014,earnings from Tapout are included as a component of Investment income, net on the Consolidated Statements of Operations. Net dividends received from Tapout are reflected on the Consolidated Statements of Cash Flows within Net cash provided by operating activities. The Company did not record any impairment charges related to our investment in Tapout during the years ended December 31, 2017 and 2016. 

The following table presents the net equity method earnings from Tapout and net dividends received from Tapout for the periods presented:



		Year Ended December 31,
		2017			2016			2015
Net equity method earnings from Tapout		$	1,141		$	1,619		$	994
Net dividends received from Tapout			(1,084)			(1,190)			(941)
Equity in earnings of affiliate, net of dividends received		$	57		$	429		$	53

As promotional services are provided to Tapout, we record revenue and reduce the existing service obligation. During the years ended December 31, 2017, 2016 and 2015, we recorded revenues of $2,720, $2,893 and $2,430, respectively, related to our fulfillment of our promotional services obligation to Tapout. The remaining service obligation as of December 31, 2017 was $5,757, and was included in Deferred Income and Non-Current Deferred Income for $2,760 and $2,997, respectively.

Our known maximum exposure to loss approximates the remaining service obligation to Tapout, which was $5,757 as of December 31, 2017. Creditors of Tapout do not have recourse against the general credit of the Company.

Cost Method Investments

During the year ended December 31, 2017, we invested $2,000 in Series E Preferred Stock of a software application developer. On May, 30, 2013,competitive e-sports company and $100 in a drone racing sports company. In 2017, we also made an additional investment of $2,200$200 in a live event touring business. On June 25, 2012,virtual reality platform operator. During the Companyyear ended December 31, 2016, we invested $5,000 in Series B Preferred Stock$1,000 in a mobile video publishing business, ("Investment"),fantasy sports content provider, $1,000 in a subscription-based sports media company and entered into$250 in a two-year strategic partnership during which time WWE received $1,758 in common stock. In July 2014 this Investment initiated a convertible note financing arrangement, and as part of that financing WWE increased its cash investment another $204, the (“July financing”). The result of the July financing was a change in WWE's ownership of common shares, preferred stock and convertible notes. virtual reality platform operator. 

We evaluate our cost method investments for impairment if factors indicate that a significant decrease in value has occurred. As a result of the July financing we performed an analysis to reassess the fair value of this Investment due to the change in the capital structure and recorded an impairment charge of $3,962 for the excess of the carrying value over the estimated fair value of $3,000. No additional indicators of impairment were noted during the year ended December 31, 2014. The Company did not record any impairment chargecharges on these assetsour cost method investments during the years ended December 31, 20132017, 2016 and 2012. Investment Securities in our Consolidated Balance Sheets as of December 31, 2014 and 2013 are comprised of $7,200 and $8,299, respectively, related to these cost method investments.

2015.

Short-Term Investments:

Investments

Short-term investments measured at fair value consisted of the following:



		December 31, 2017												December 31, 2016
					Gross Unrealized												Gross Unrealized
		Amortized									Fair			Amortized									Fair
		Cost			Gain			(Loss)			Value			Cost			Gain			(Loss)			Value
U.S. Treasury securities		$	73,169		$	—		$	(479)		$	72,690		$	—		$	—		$	—		$	—
Corporate bonds			58,003			—			(329)			57,674			40,183			9			(58)			40,134
Municipal bonds			17,538			7			(99)			17,446			15,075			—			(45)			15,030
Government agency bonds			12,007			—			(73)			11,934			—			—			—			—
Total		$	160,717		$	7		$	(980)		$	159,744		$	55,258		$	9		$	(103)		$	55,164

	December 31, 2014																December 31, 2013
					Gross Unrealized																Gross Unrealized
	Amortized Cost				Gain				(Loss)				Fair Value				Amortized Cost				Gain				(Loss)				Fair Value
Municipal bonds	$	19,962			$	39			$	(9	)		$	19,992			$	44,636			$	176			$	(91	)		$	44,721
Corporate bonds	43,388				20				(199		)		43,209				31,825				104				(174		)		31,755
Government agency bonds	5,000				—				(15		)		4,985				—				—				—				—
Total	$	68,350			$	59			$	(223	)		$	68,186			$	76,461			$	280			$	(265	)		$	76,476

We classify the investments listed in the above table as available-for-sale securities. Such investments consist primarily of U.S. Treasury securities, corporate bonds, municipal bonds, including pre-refunded municipal bonds, and government agency bonds. These investments are stated at fair value as required by the applicable accounting guidance. Unrealized gains and losses on such securities are reflected, net of tax, as other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

Our U.S. Treasury securities, corporate bonds, municipal  corporatebonds and government agency bonds are included in Short-term investments, net on our Consolidated Balance Sheets. Realized gains and losses on investments are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

As of December 31, 2014,2017, contractual maturities of these bondssecurities are as follows:

		Maturities
Municipal bonds U.S. Treasury securities		1 month - 43 years
Corporate bonds		1 month - 45 years
Municipal bonds		1 month - 2 years
Government agency bonds	3	2 months - 4 years

F-15

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

4. Investment Securities and Short-Term Investments (continued)

The following table summarizes the short-term investment activity:



		Year Ended December 31,
		2017			2016			2015
Proceeds from maturities and calls of short-term investments		$	35,660		$	8,065		$	24,125
Purchases of short-term investments		$	142,373		$	—		$	21,624

	Year Ended December 31,
	2014				2013				2012
Proceeds from sale of short-term investments	$	22,572			$	2,793			$	16,486
Proceeds from maturities and calls of short-term investments	$	19,665			$	41,525			$	28,705
Gross realized (losses) gains on sale of short-term investments	$	(37	)		$	1			$	196

5. Fair Value Measurement

Fair value is determined based on the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement based on assumptions that "market participants"market participants would use to price the asset or liability. Accordingly, the framework considers markets or observable inputs as the preferred source of value followed by assumptions based on hypothetical transactions, in the absence of market inputs. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of assets and liabilities should include consideration of non-performance risk, including the Company’s own credit risk.

Additionally, the accounting guidance establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows:

Level 1-	Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2-	Inputs other than quoted prices in active markets for similar assets and liabilities and inputs that are observable for the assetdirectly or liability;indirectly observable; or
Level 3-	unobservable Unobservable inputs, such as discounted cash flow models or valuations, in which little or no market data exists.

The following assets are required to be measured at fair value on a recurring basis and the classification within the hierarchy was as follows:



		Fair Value at December 31, 2017												Fair Value at December 31, 2016
		Total			Level 1			Level 2			Level 3			Total			Level 1			Level 2			Level 3
U.S. Treasury securities		$	72,690		$	—		$	72,690		$	—		$	—		$	—		$	—		$	—
Corporate bonds			57,674			—			57,674			—			40,134			—			40,134			—
Municipal bonds			17,446			—			17,446			—			15,030			—			15,030			—
Government agency bonds			11,934			—			11,934			—			—			—			—			—
Total		$	159,744		$	—		$	159,744		$	—		$	55,164		$	—		$	55,164		$	—

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

		Fair Value at December 31, 2014																Fair Value at December 31, 2013
		Total				Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3
Municipal bonds		$	19,992			$	—			$	19,992			$	—			$	44,721			$	—			$	44,721			$	—
Corporate bonds		43,209				—				43,209				—				31,755				—				31,755				—
Government agency bonds		4,985				—				4,985				—				—				—				—				—
Total		$	68,186			$	—			$	68,186			$	—			$	76,476			$	—			$	76,476			$	—

Certain financial instruments are carried at cost on the Consolidated Balance Sheets, which approximates fair value due to their short-term, highly liquid nature. The carrying amounts of cash and cash equivalents, money market accounts, accounts receivable and accounts payable approximate fair value because of the short-term nature of such instruments.

F-16

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

5. Fair Value Measurement (continued)

We have classified our investments in U.S. Treasury securities, corporate bonds, municipal corporatebonds and government agency bonds within Level 2 as their valuation requires quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and/or model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data. The U.S. Treasury securities, corporate bonds, municipal corporatebonds and government agency bonds are valued based on model-driven valuations. A third partythird-party service provider assists the Company with compiling market prices from a variety of industry standard data sources, security master files from large financial institutions and other third-party sources that are used to value our U.S. Treasury securities, corporate bonds, municipal corporatebonds and government agency bond investments. The Company did not have any transfers between Level 1, Level 2 and Level 3 fair value investments during the periods presented.

The fair value measurements of our investment securities, which are recorded under the cost method investments are classified within Level 3 as significant unobservable inputs are used to fair value these assets due to the absence of quoted market prices and inherent lack of liquidity. Significant unobservable inputs include variables such as near-term prospects of the investees, recentsubsequent financing activities of the investees, and the investees’ capital structure as well as other economic variables, which reflect assumptions market participants would use in pricing these assets. Our investments are recorded at fair value only if an impairment charge is recognized. During the year ended December 31, 2014, the Company recorded an impairment charge of $3,962 on the Investment for the excess of the carrying value over the estimated fair value of $3,000. The Company did not record any impairment charge on these assets during the years ended December 31, 20132017, 2016 and December 31, 2012.

2015.

The Company's long lived property and equipment, feature film and television production assets are required to be measured at fair value on a non-recurring basis if it is determined that indicators of impairment exist. These assets are recorded at fair value only when an impairment is recognized. During the year ended December 31, 2014,2015, the Company recorded an adjustmenta non-cash abandonment charge of $1,600$7,125 to reducewrite-off the carrying value of our old corporate aircraft to its estimated fair value and recorded an impairment charge of $1,757costs related to a change in business strategy relatedmedia center expansion project.  See Note 6, Property and Equipment, for further discussion. The Company classifies these assets as Level 3 within the fair value hierarchy due to our gamification platform. significant unobservable inputs.

During the years ended December 31, 2014, 20132017,  2016 and 2012,2015, the Company recorded impairment charges of $1,476, $11,661$5,472,  $823 and $1,229$490 on feature film production assets based upon fair value measurements of $1,848, $2,363,$4,347,  $1,354, and $1,657,$1,430, respectively. See Note 7, Feature Film Production Assets, for further discussion. The Company classifies these fair values as Level 3 within the fair value hierarchy due to significant unobservable inputs. The Company utilizes a discounted cash flows model to determine the fair value of these impaired films where indicators of impairment exist. The significant unobservable inputs to this model are the Company’s expected cash flows for the film, including projected home video sales, pay and free TV sales and international sales, and a discount rate of 13% that we estimate market participants would seek for bearing the risk associated with such assets. The Company utilizes an independent third party valuation specialist who assists us in gathering the necessary inputs used in our model.

The fair value of the Company's long-term debt, consisting of a mortgage loan assumed in connection with a building purchase and a promissory note payable to RBS Asset Finance, Inc.,secured by the Company’s Corporate Jet, is estimated based upon quoted price estimates for similar debt arrangements. At December 31, 2014,2017, the face amount of the mortgage loan and promissory note approximates itstheir fair value.

The convertible debt is not marked to fair value at the end of each reporting period, but instead is reported at amortized cost. As of December 31, 2017,  the calculation of the fair value of the debt component of the Company’s convertible debt required the use of Level 3 inputs, and was determined by calculating the fair value of similar debt without the associated conversion feature based on market conditions at that time:



		December 31, 2017						December 31, 2016
		Fair Value			Carrying Value (1)			Fair Value			Carrying Value
Convertible senior notes		$	182,661		$	182,783		$	166,702		$	166,050

(1)

The carrying value of the debt instrument presented in the table above represents the face value of the convertible note less unamortized debt discount.

F-17

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

6. Property and Equipment

Property and equipment consisted of the following:



		As of December 31,
		2017			2016
Land, buildings and improvements		$	134,052		$	130,330
Equipment			98,245			136,114
Corporate aircraft			31,277			31,277
Vehicles			905			244
			264,479			297,965
Less accumulated depreciation and amortization			(133,154)			(165,334)
Total		$	131,325		$	132,631

		As of December 31,
		2014				2013
Land, buildings and improvements		$	106,058			$	106,749
Equipment		107,753				107,305
Corporate aircrafts		31,277				51,757
Vehicles		244				244
		245,332				266,055
Less accumulated depreciation and amortization		(131,284		)		(132,575		)
Total		$	114,048			$	133,480

Depreciation expense for property and equipment totaled $25,059, $22,906$24,680,  $23,195 and $19,151,$21,107 for the years ended December 31, 2014, 20132017,  2016 and 2012,2015, respectively. 

During 2014, the Company received tax credits relating to our infrastructure improvements in conjunction with capital projects to support our increased content production efforts. Depreciation expense for the year ended December 31, 2014 reflects2017, the Company retired assets, primarily television production equipment, that were no longer in use and reduced property and equipment cost by $57,255, with a benefitcorresponding reduction to accumulated depreciation of $1,492$56,896.

In September 2016, the Company acquired, through WWE Real Estate Holdings, LLC a wholly-owned special purpose subsidiary (“WWE Real Estate”), a building and underlying real property located in Stamford, Connecticut (the “Purchased Property”) from the recognitionone of the infrastructure tax credit noted above.debtors in the Chapter 11 bankruptcy proceedings of Newbury Common Associates, LLC and certain of its affiliates. In connection with the acquisition, WWE Real Estate assumed the seller’s interests as landlord under several existing leases of the Purchased Property, including the landlord’s interest in leases under which the Company is a tenant. Since the assets of WWE Real Estate represent collateral for the underlying mortgage, these assets are not available to satisfy debts and obligations to any other creditors of the Company. As of December 31, 2017 and 2016, costs of $23,832 and $24,074, respectively, are reflected in Land, buildings and improvements, which is a component of Property and equipment, net on the Consolidated Balance Sheet. Depreciation on the Purchased Property is computed on a straight-line basis over the estimated useful lives of the Purchased Property in accordance with the Company’s existing accounting policy for property and equipment. 

During the year ended December 31, 2015, the Company reevaluated its plans to develop an improved and expanded media center at the location of our existing production facility. The credit was usedCompany made the determination that these plans would not be viable and deemed them abandoned; accordingly, we recorded a non-cash abandonment charge of $7,125 to reducewrite-off the carrying value of these costs, which is disclosed as Loss on abandonment on the assets asConsolidated Statements of their in-service dateOperations and consequently the adjustment to depreciation expense reflects the revised amount incurred to date. The credit was receivedis included in the current year, but related to assets placed in service in prior years. The Company sold its old corporate aircraft, in the third quarter of 2014. In anticipation of that sale depreciation expense in the current year includes an adjustment of $1,600 to reduce the carrying value of the asset to its estimated fair value. Depreciation expense also includes an impairment charge of $1,757 related to a change in business strategy during 2014 related to our gamification platform. See Note 13, Restructuring Charge, for further details.

Corporate and Other segment results.

7. Feature Film Production Assets, Net

Feature film production assets consisted of the following:



		As of December 31,
		2017			2016
In release		$	15,869		$	13,892
Completed but not released			2,211			8,881
In production			3,107			3,387
In development			1,113			977
Total		$	22,300		$	27,137

		As of December 31,
		2014				2013
Feature film productions:
In release		$	12,063			$	9,413
Completed but not released		3,865				3,130
In production		10,036				2,686
In development		507				789
Total		$	26,471			$	16,018

Approximately 42%34% of “In release” film production assets are estimated to be amortized over the next 12 months and approximately 72%69% of “In release” film production assets are estimated to be amortized over the next three years. We anticipate amortizing 80% of our "In release" film production assets within fivefour years as we receive revenues associated with television distribution

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

of our licensed films. During the years ended December 31, 2014, 20132017,  2016 and 2012,2015, we amortized $3,700, $7,397$11,748,  $5,720 and $6,525,$3,401, respectively, of feature film production assets.

During these periods, our films were released under a co-distribution model. Under the year ended December 31, 2014, we released one feature film via theatricalco-distribution model, third-party distribution Oculus, and five films direct to DVD, Scooby Doo! WrestleMania Mystery, Leprechaun: Origins, See No Evil 2, Queens of the Ring and Jingle All the

F-18

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

7. Feature Film Production Assets, Net (continued)

Way 2. These five films comprise $5,907 of our "In release" feature film assets as of December 31, 2014. The Companyentered into an agreement to co-distribute the feature film Road to Paloma. This film was released via a limited theatrical release and on DVD in July 2014. Third-party distributorspartners control the distribution and marketing of theseco-distributed films, and as a result, we recognize revenue on a net basis after the third-party distributor recoupsdistribution partners recoup distribution fees and expenses and results are reported to us. Results are typically reported to us in periods subsequent to the initial release of the film.

In certain arrangements, where worldwide film rights and interests are sold to third-party distribution partners, we recognize revenue upon delivery of the completed film to the third-party.

During the year ended December 31, 2013,2017, we released threefour feature films via theatrical distribution,The Resurrection of Gavin Stone,No One LivesSleight,  Armed Response and Birth of the Dragon,  and five films direct to DVD,  Surf’s Up 2: WaveMania,  The CallJetsons & WWE: Robo-WrestleMania! and,   Dead Man DownThe Marine 5: Battleground, Pure Country: Pure Heart and one made-for television film, Christmas Bounty.Killing Hasselhoff. These fournine films comprise $1,616comprised $7,458 of our “In release” feature film assets as of December 31, 2014. We also released2017.

two feature films, 12 Rounds 2: Reloaded and The Marine 3: Homefront direct to DVD duringDuring the year ended December 31, 2013, which comprise $1,5512016, we released four feature films direct to DVD, Countdown, Scooby Doo! & WWE: Curse of the Speed Demon, Interrogation and Eliminators, and one film via theatrical distribution,  Incarnate. These five films comprised $4,130 of our "In release" feature film assets as of December 31, 2014.2016.  

We currently have one theatrical film designated as “Completed but not released” and have two films "In production." We also have capitalized certain script development costs for various other film projects designated as “In development.” Capitalized script development costs are evaluated at each reporting period for impairment and to determine if a project is deemed to be abandoned.  During the years ended December 31, 2017 and 2016, we expensed $157 and $119, respectively, related to previously capitalized development costs related to abandoned projects. We did not incur any comparable expenses for the year ended December 31, 2015.

Unamortized feature film production assets are evaluated for impairment each reporting period. We review and revise estimates of ultimate revenue and participation costs at each reporting period to reflect the most current information available. If estimates for a film’s ultimate revenue and/or costs are revised and indicate a significant decline in a film’s profitability or if events or circumstances change that indicate we should assess whether the fair value of a film is less than its unamortized film costs, we calculate the films'film’s estimated fair value using a discounted cash flows model. If fair value is less than unamortized cost, the film asset is written down to fair value.

We recorded impairment charges $1,476, $11,661$5,472,  $823 and $1,229$490 related to our feature films during the years ended December 31, 2014, 20132017,  2016 and 2012,2015, respectively. These impairment charges represent the excess of the recorded net carrying value over the estimated fair value.

We currently have four theatrical films designated as “Completed but not released” and have five films "In Production". We have also capitalized certain script development costs for various other film projects designated as “In development”. Capitalized script development costs are evaluated at each reporting period for impairment and to determine if a project is deemed to be abandoned. During the years ended December 31, 2014, and 2012, we expensed $339 and $1,045 related to previously capitalized development costs of abandoned projects, respectively. We did not incur any comparable expenses for the year ended December 31, 2013.

8. Television Production Assets, Net

Television production assets consisted of the following:



		As of December 31,
		2017			2016
In release		$	3,765		$	12,198
In production			3,527			310
Total		$	7,292		$	12,508

		As of December 31,
		2014				2013
Television productions:
In release		$	1,035			$	1,365
Completed but not released		1,259				—
In production		3,538				9,407
Total		$	5,832			$	10,772

F-19

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

8. Television Production Assets, Net (continued)

Television production assets consist primarily of non-live event episodic television series we have produced for distribution through a variety of platforms, including on our WWE Network. Amounts capitalized include development costs, production costs, production overhead and employee salaries. We have $5,832 and $10,772 capitalized as of December 31, 2014 and 2013, respectively, related to this type of programming. Costs to produce our live event programming are expensed when the event is first broadcast. Costs to produce episodic programming for television or distribution on WWE Network are amortized in the proportion that revenues bear to management's estimates of the ultimate revenue expected to be recognized from exploitation, exhibition or sale. For the year ended

F-December 31, 201421, we amortized $25,867

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

Amortization of television production assets of which $13,148 were related to Network programming and $12,719 were related to Television programming. During the year ended December 31, 2013, we amortized $7,012 of television production assets related to the airingsconsisted of the new television series, Total Divas. We didfollowing:



		For the year ended December 31,
		2017			2016			2015
Television programming		$	17,399		$	15,860		$	21,984
WWE Network programming			3,738			11,073			8,607
Total		$	21,137		$	26,933		$	30,591

Costs to produce our live event programming are expensed when the event is first broadcast, and are not incur any comparable expenses forincluded in the year ended December 31, 2012.

capitalized costs or amortization tables noted above.

Unamortized television production assets are evaluated for impairment each reporting period. If conditions indicate a potential impairment, and the estimated future cash flows are not sufficient to recover the unamortized asset, the asset is written down to fair value. In addition, if we determine that a program will not likely air, we will write-offexpense the remaining unamortized asset. During the years ended December 31, 2014, 20132017,  2016 and 2012,2015, we did not record any impairments related to our television production assets.

9. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:



		As of December 31,
		2017			2016
Trade related		$	12,727		$	10,118
Staff related			7,980			7,494
Management incentive compensation			21,556			21,542
Talent related			5,356			6,969
Accrued WWE Network related expenses			2,633			2,120
Accrued event and television production			7,929			7,031
Accrued legal and professional			5,182			1,952
Accrued purchases of property and equipment			2,334			2,940
Accrued film liability			1,993			366
Accrued other			10,048			9,828
Total		$	77,738		$	70,360

		As of December 31,
		2014				2013
Trade related		$	6,721			$	8,565
Staff related		6,558				5,580
Management incentive compensation		13,279				5,711
Talent related		6,446				6,304
Accrued WWE Network related expenses		5,155				2,477
Accrued event and television production		5,612				4,429
Accrued home entertainment expenses		953				1,341
Accrued legal and professional		1,483				1,903
Accrued purchases of property and equipment		1,452				1,700
Accrued film liability		2,521				2,654
Accrued other		7,398				7,218
Total		$	57,578			$	47,882

Accrued other includes accruals for our international and licensing business activities, as well as other miscellaneous accruals, none of which categories individually exceeds 5% of current liabilities. The increase in accrued expenses is primarily due todriven by an increase in management incentive compensation based on Company performanceaccrued legal and for various accrued expensesprofessional fees primarily related to WWE Network operations.

non-recurring legal matters and other contractual obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

10. Long-Term Debt and Credit Facilities

Long-Term Debt

Included within Long-Term Debt are the following:



		As of
		December 31,			December 31,
		2017			2016
Current portion of long-term debt:
Film Credit Facility		$	—		$	1,583
Aircraft financing			4,638			4,538
Total current portion of long-term debt			4,638			6,121

Long-term debt:
Aircraft financing		$	7,958		$	12,596
Mortgage			23,000			23,000
Total long-term debt			30,958			35,596

Total		$	35,596		$	41,717

Mortgage

In September 2016, the Company acquired real property and assumed future obligations under a loan agreement, dated June 8, 2015, in the principal amount of $23,000, which loan is secured by a mortgage on the property. The loan bears interest at the rate of 4.50% per annum and requires monthly interest only payments of $86 until June 2018 and interest and principal payments of $117 per month thereafter, with a balloon payment on maturity in July 2025. There is a significant yield maintenance premium for prepayments. Pursuant to the loan agreement, since the assets of WWE Real Estate, a subsidiary of the Company, represent collateral for the underlying mortgage, these assets will not be available to satisfy debts and obligations due to any other creditors of the Company.

Aircraft Financing

On

 In August 7, 2013, the Company entered into a $31,568 promissory note (the “Note”“Aircraft Note”) with RBSCitizens Asset Finance, Inc., for the purchase of a 2007 Bombardier Global 5000 aircraft and refurbishments. In August 2017, the Aircraft Note was assigned to Fifth Third Equipment Finance Company. The Aircraft Note bears interest at a rate of 2.18% per annum, is payable in monthly installments of $406, inclusive of interest,  beginning in September 2013 and has a final maturity of August 7, 2020. The Aircraft Note is secured by a first priority perfected security interest in the newly purchased aircraft. 

As of December 31, 2014 and 2013, the amount outstanding under the Note was $25,920 and $29,636, respectively.

As of December 31, 2014,2017, the scheduled principal repayments under our Aircraft Note obligation for the subsequent fivethree years and the remaining term of the note thereafter are as follows:

December 31, 2018		$	4,638
December 31, 2019			4,740
December 31, 2020			3,218
		$	12,596

December 31, 2015		$	4,345
December 31, 2016		4,440
December 31, 2017		4,538
December 31, 2018		4,638
December 31, 2019		4,740
Thereafter		3,219
		$	25,920

The table above assumes that the Aircraft Note will not be prepaid prior to its maturity on August 7, 2020.

Credit Facilities

Revolving Credit Facility

In September 2011,December 2016, in connection with the issuance of the Convertible Notes, as defined below, the Company entered into a $200,000an amended and restated $100,000 senior unsecured revolving credit facility with a syndicated group of banks, with JPMorgan Chase Bank, N.A. acting as administrative agent.Administrative Agent (the “Revolving Credit Facility”). The Revolving Credit Facility has a maturity date of July 29, 2021.  Applicable interest rates for the borrowings under the revolving credit facilityRevolving Credit Facility are based on the Company's current consolidated

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

leverage ratio. As of December 31, 2014,2017, the LIBOR-based rate plus margin was 2.51%3.19%. The Company is also required to pay a commitment fee calculated at a rate per annum of 0.375%0.30% on the average daily unused portion of the credit facility.Revolving Credit Facility. Under the terms of the revolving credit facility,Revolving Credit Facility, the Company is subject to certain financial covenants and restrictions, including restrictions on our ability to pay dividends and limitations with respect to our indebtedness, liens, mergers and acquisitions, dispositions of assets, investments, capital expenditures and transactions with affiliates.

In April 2013, the Company amended and restated the revolving credit facility. Under the terms of the amended credit facility, (i) the maturity date was extended to September 9, 2016, (ii) changes were made to the applicable margin for borrowings under the facility, and (iii) restrictions on certain financial covenants were amended to provide for greater financial flexibility.

On May 1, 2014, the Company entered into a First Amendment to its Amended and Restated Credit Facility ("the Amendment") and further modified certain financial covenants to provide for greater financial flexibility. The Amendment, among other things, (a) adjusted the consolidated EBITDA calculation for the four quarterly periods in 2014 and the first and second quarters of 2015 by permitting the add-back of WWE Network Expenses subject to specified maximum amounts in such periods, (b) increased the consolidated EBITDA calculation by the amount of any net investments in respect of feature film production, subject to specified maximum amounts for the quarters ended September 30, 2014 and December 31, 2014 and (c) reduced the consolidated fixed charge coverage ratio for four quarters in 2014 and the first two quarters in 2015 such that the consolidated fixed charge coverage ratio may not be less than 1.0:1.0 for the respective quarterly periods ended March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, increasing to 1.10:1.0 for the quarter ending March 31, 2015, to 1.15:1.0 for the quarter ending June 30, 2015, and to 1.25:1.0 for the quarter ending September 30, 2015.  The Amendment also includes certain additional allowances for the Company to make investments in special film entities. 

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

10. Debt (continued)

As of December 31, 2014,2017, the Company was in compliance with the provisions of the AmendmentRevolving Credit Facility, and hashad available debt capacity under the terms of the revolving credit facilityRevolving Credit Facility of approximately $169,000.$100,000. As of December 31, 20142017 and 2013,2016, there were no amounts outstanding under the Revolving Credit Facility.

Film Credit Facility

In May 2015, two domestic subsidiaries of the Company, WWE Studios Finance Corp. and WWE Studios Finance Holding Corp. (collectively, the “Loan Parties”) entered into a $35,000 secured asset based revolving credit facility.agreement, as amended, with Bank of America, N.A., as Administrative Agent and lender (the “Film Credit Facility”). On December 21, 2017, we repaid in full all outstanding debt and terminated our Film Credit Facility. In connection with the termination, we expensed $397 of unamortized debt issuance costs.

   11. Convertible Debt

In December 2016, we issued $200,000 aggregate principal amount of 3.375% convertible senior notes due 2023 and subsequently in January 2017, we issued an additional $15,000 in aggregate principal amount of such convertible notes through the partial exercise of an over-allotment option (collectively, the “Convertible Notes”).  The Convertible Notes are due December 15, 2023, unless earlier repurchased by us or converted. Interest is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017. The sale of the Convertible Notes in December 2016 and January 2017 resulted in $193,899 and $14,534 in net proceeds, respectively, to WWE after deducting the initial purchasers’ discount and the estimated offering expenses. We used $36,658 of the net proceeds from the sale of the Convertible Notes to pay the cost of the convertible bond hedges, as described below, after such cost was partially offset by the proceeds to us from the sale of warrants in the warrant transactions, as described below. The remaining proceeds will be used to support the execution of our long-term growth strategy and for general corporate purposes.

The Convertible Notes are governed by an Indenture between us, as issuer, and U.S. Bank, National Association, as trustee. The Convertible Notes will be our general unsecured obligations and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In the event of our bankruptcy, liquidation, reorganization or other winding up, our assets that secure secured debt will be available to pay obligations on the Convertible Notes only after all indebtedness under such secured debt has been repaid in full from such assets.

Upon conversion of the Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of Class A common stock, at our election, at a conversion rate of approximately 40.1405 shares of common stock per $1 principal amount of the Convertible Notes, which corresponds to an initial conversion price of approximately $24.91 per share of Class A common stock. At any time, prior to the close on the business day immediately preceding June 15, 2023, the Convertible Notes will be convertible under the following circumstances:

a)

During any calendar quarter beginning after the calendar quarter ending on December 31, 2016 (and only during such calendar quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

b)

During the 5 business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day;

c)

Upon the occurrence of specified corporate events; or

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

d)

On or after June 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1 principal amount, at the option of the holder regardless of the foregoing circumstances.

As of December 31, 2017, the Convertible Notes are not yet convertible.

As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount. The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using an expected present value technique (income approach) to estimate the fair value of similar nonconvertible debt; the debt discount is being amortized as additional non-cash interest expense over the term of the Convertible Notes using the effective interest method with an effective interest rate of 6.40% per annum. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the Note issuances, we allocated the total amount of offering costs incurred to the debt and equity components based on their relative values. Offering costs attributable to the debt component, totaling $5,454, are being amortized as non-cash interest expense over the term of the Convertible Notes, and offering costs attributable to the equity component, totaling $1,110, were netted with the equity component in stockholders' equity.

The Convertible Notes consisted of the following components:



		As of December 31,
		2017			2016
Debt component:
Principal		$	215,000		$	200,000
Less: Unamortized debt discount			(32,217)			(33,950)
Less: Unamortized debt issuance costs			(4,883)			(5,042)
Net carrying amount		$	177,900		$	161,008

Equity component (1)		$	35,547		$	33,060

(1)

Recorded in the Consolidated Balance Sheets within additional paid-in capital, net of the $1,110 issuance costs in equity.

The following table sets forth total interest expense recognized related to the Convertible Notes:



		For the year ended
		December 31,
		2017			2016
3.375% contractual coupon		$	7,232		$	262
Amortization of debt discount			4,290			151
Amortization of debt issuance costs			553			19
Interest expense		$	12,075		$	432

Convertible Note Hedge

In connection with the pricing of the Convertible Notes in December 2016 and January 2017, we entered into convertible note hedge transactions with respect to our Class A common stock (the “Note Hedge”) with three separate counterparties.  The Note Hedge transactions in December 2016 and January 2017 resulted in an aggregate payment to the Note Hedge counterparties of $34,100 and $2,558, respectively. The Note Hedge transactions cover approximately 8.03 million shares of our Class A common stock related to the December 2016 issuance and 602,107 shares of our Class A common stock related to the January 2017 issuance, and are exercisable upon conversion of the Convertible Notes. The Note Hedge will expire on December  15, 2023, unless earlier terminated.  The Note Hedge transactions have been accounted for as part of additional paid-in capital. 

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

Warrant Transactions

In connection with entering into the Note Hedge transactions described above, we also concurrently entered into separate warrant transactions (the “Warrants”), to sell warrants to acquire approximately 8.03 million shares of our Class A common stock in connection with the Note Hedge transaction in December 2016 and 602,107 shares of our Class A common stock in connection with the Note Hedge transaction in January 2017, both at an initial strike price of approximately $31.89 per share, which represents a premium of approximately 60.0% over the last reported sale price of our Class A common stock of $19.93 on December 12, 2016 (initial issuance date of the Convertible Notes).  The Warrant transactions in December 2016 and January 2017 resulted in aggregate proceeds of $19,460 and $1,460, respectively, from the sale of the Warrants to the counterparties.  The Warrants transactions have been accounted for as part of additional paid-in capital.

11.12. Income Taxes

For the years ended December 31, 2014, 20132017,  2016 and 2012, we were taxed2015, the effective tax rate on our (loss) income from continuing operations at an effective tax rate of 39.0%was 49.0%, 39.9% 36.4% and 26.4%33.4%, respectively. Our income tax (benefit)/provision for the years ended December 31, 2014, 2013 and 2012 was $(19,232), $1,839 and $11,252, respectively, and included federal, state and foreign taxes.

The components of our tax provision are as follows:



		Year Ended December 31,
		2017			2016			2015
Current taxes:
Federal		$	7,785		$	(1,931)		$	12,107
State and local			1,313			1,210			2,537
Foreign			8,750			7,940			7,112
Deferred taxes:
Federal			13,177			11,582			(9,736)
State and local			396			560			78
Foreign			(1)			11			(16)
Total income tax expense		$	31,420		$	19,372		$	12,082

		Year Ended December 31,
		2014				2013				2012
Current taxes:
Federal		$	508			$	(2,407	)		$	(400	)
State and local		(335		)		162				66
Foreign		6,074				5,506				5,403
Deferred taxes:
Federal		(23,108		)		(725		)		6,150
State and local		(2,365		)		(680		)		34
Foreign		(6		)		(17		)		(1		)
Total income tax (benefit) expense		$	(19,232	)		$	1,839			$	11,252

Within the current foreign tax provision for the years ended December 31, 2017,  2016 and 2015 is approximately $5,724, $5,340$8,453,  $7,460 and $5,225$6,860, respectively, of foreign withholding taxes paid on income included within the US pre-tax book income below. The prior years balances were revised to reclassify these amounts from current federal deferred tax provision for the year ended December 31, 2017 includes a charge of $10,878 associated with the remeasurement of our deferred tax assets due to current foreignthe revised corporate tax provision.

rate as a result of the Tax Act, as defined below.

Components of (loss) income before income taxes are as follows:



		Year Ended December 31,
		2017			2016			2015
United States		$	62,280		$	51,160		$	35,306
Foreign			1,780			2,053			920
Total income before income taxes		$	64,060		$	53,213		$	36,226

		Year Ended December 31,
		2014				2013				2012
United States		$	(49,808	)		$	4,011			$	42,397
Foreign		504				592				287
Total loss (income) before income taxes		$	(49,304	)		$	4,603			$	42,684

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

11. Income Taxes (continued)

The following sets forth the difference between the provision/(benefit)/provision for income taxes computed at the U.S. federal statutory income tax rate of 35% and that reported for financial statement purposes:



		Year Ended December 31,
		2017			2016			2015
Statutory U.S. federal tax at 35%		$	22,421		$	18,625		$	12,679
State and local taxes, net of federal tax benefit			1,472			1,496			1,848
Foreign rate differential			(298)			(327)			(97)
Tax exempt interest income			(86)			(55)			(52)
Qualified production activity deduction			(1,750)			(942)			(2,077)
Unrecognized tax benefits			(146)			(248)			(447)
Meals and entertainment			317			308			284
Deferred tax asset remeasurement			10,878			—			—
Deemed repatriation transition tax			406			—			—
Excess tax benefits related to the vesting of share-based compensation			(1,604)			—			—
Other			(190)			515			(56)
Provision for income taxes		$	31,420		$	19,372		$	12,082

		Year Ended December 31,
		2014				2013				2012
Statutory U.S. federal tax at 35%		$	(17,256	)		$	1,611			$	14,939
State and local taxes, net of federal tax benefit		(1,444		)		94				1,297
Foreign rate differential		(34		)		(21		)		(32		)
Tax exempt interest income		(119		)		(341		)		(492		)
Qualified production activity deduction		39				(94		)		(854		)
Unrecognized tax benefits		(395		)		(278		)		(3,827		)
Meals and entertainment		297				257				198
Employee Stock Purchase Plan		(27		)		133				41
Property and equipment depreciation		(294		)		635				—
Other		1				(157		)		(18		)
(Benefit)/Provision for income taxes		$	(19,232	)		$	1,839			$	11,252

The tax effects of temporary differences and net operating losses that give rise to significant portions of the deferred tax assets and deferred tax liabilities consisted of the following:



		As of December 31,
		2017			2016
Deferred tax assets:
Accounts receivable		$	310		$	2,206
Inventory			1,696			3,273
Deferred income			8,670			18,715
Stock compensation			7,173			8,937
Net operating loss carryforward			1,195			1,160
Foreign tax credits			—			302
Investments			238			44
Intangible assets			1,673			2,650
Capitalized feature film production costs			1,316			717
Accrued liabilities and reserves			1,191			722
Federal benefit related to uncertain tax positions			103			163
Deferred tax assets, gross			23,565			38,889
Valuation allowance			(1,195)			(1,160)
Deferred tax assets, net			22,370			37,729
Deferred tax liabilities:
Property and equipment depreciation			(2,380)			(4,326)
Investments			(1,006)			(847)
Deferred tax liabilities			(3,386)			(5,173)
Total deferred tax assets, net		$	18,984		$	32,556

		As of December 31,
		2014				2013
Deferred tax assets:
Accounts receivable		$	1,835			$	1,070
Inventory		3,796				4,768
Prepaid royalties		6,004				5,878
Stock options/stock compensation		2,551				1,969
Net operating loss carryforwards		20,386				1,512
Investments		71				3
Intangible assets		2,835				2,768
Accrued liabilities and reserves		474				519
Federal benefit related to uncertain tax positions		495				709
Deferred tax assets, gross		38,447				19,196
Valuation allowance		(1,410		)		(1,512		)
Deferred tax assets, net		37,037				17,684
Deferred tax liabilities:
Property and equipment depreciation		(1,728		)		(5,174		)
Capitalized feature film production costs		(258		)		(2,951		)
Investments		(16		)		(3		)
Deferred tax liabilities		(2,002		)		(8,128		)
Total deferred tax assets, net		$	35,035			$	9,556

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

11. Income Taxes (continued)

The temporary differences described above represent differences between the tax basis of assets or liabilities and amounts reported in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. The Company received tax deductions from the exercisevesting of restricted stock units and performance stock units of $5,459, $3,939$21,457,  $13,301 and $2,747$7,694 in 2014, 20132017,  2016 and 2012,2015, respectively.

As of December 31, 2014,2017, we had $24,120$18,984 of deferred tax assets, net, included in current assets and $10,915 included in non-currentNon-current income tax assets in our consolidated balance sheets.Consolidated Balance Sheet. As of December 31, 20132016, we had $12,237$32,556 of deferred tax assets, net, included in our current assets and $2,681 of deferred tax liabilities, net, included in non-currentNon-current income tax liabilities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

assets in our consolidated balance sheets.Consolidated Balance Sheet. The large increasedecrease in our deferred tax asset balance was driven by the remeasurement of our operating lossdeferred tax assets and liabilities due to tax reform and activity in prepaid royalties relating to television contracts.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and included a variety of other changes. During the fourth quarter of 2017, the Company recorded a charge of $10,878 associated with the remeasurement of its net deferred tax assets due to the tax rate decreasing from 35% to 21%, which reduced the future benefit the Company will realize associated with these assets. Additionally, the Company recorded a charge of $406 in the current yearfourth quarter of 2017 related to the one-time transition tax on mandatory repatriation of undistributed foreign earnings and associatedprofits per the Tax Act. 

The adjustments to net operating lossdeferred tax assets and the charge related to the one-time transition tax are provisional amounts estimated based on information available as of December 31, 2017 and a preliminary review of the Tax Act. These amounts are subject to revision as we obtain information necessary to complete the calculations. We will recognize any changes to the provisional amounts as we refine our estimates of our cumulative temporary differences, finalize the calculation of the total post-1986 earnings and profits of our foreign tax credit carryforwards.

subsidiaries and complete our interpretations of the application of the Tax Act.

As of December 31, 20142017 and 2013,2016, we had valuation allowances of $1,410$1,195 and $1,512$1,160 respectively, to reduce our deferred tax assets to an amount more likely than not to be recovered. This valuation allowance relates to foreign income taxes and the resulting net operating losses in foreign jurisdictions where we have ceased operations.

The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is required to reduce the net deferred tax assets to the amount that is more likely than not to be realized in future periods. The Company believes that based on past performance, expected future taxable income and prudent and feasible tax planning strategies, it is more likely than not that the net deferred tax assets will be realized. Changes in these factors may cause us to increase our valuation allowance on deferred tax assets, which would impact our income tax expense in the period we determine that these factors have changed.

As of December 31, 2014, the Company had a total of $6,967 of foreign tax credit carryforwards, available to offset future U.S. income taxes. As of December 31, 2014, the tax credits will begin to expire at various times in 2023 through 2024.  As of December 31, 2014, the Company had recorded tax benefits totaling $31,100 for Federal, State, and foreign net operating loss carryforwards (“NOLs”).  As of December 31, 2014, the NOLs will begin to expire at various times in 2019 through 2034.

We are subject to periodic audits of our various tax returns by government agencies which could result in possible tax liabilities. Although the outcome of these matters cannot currently be determined, we believe the outcome of these audits will not have a material effect on our financial statements.

 U.S. income taxes have not been provided for on approximately $5,227 of unremitted earnings of our international subsidiaries. These earnings are expected to be indefinitely reinvested overseas. It is not practical to compute the estimated deferred tax liability on these earnings. Any additional U.S. taxes payable on the remaining foreign earnings, if remitted, would be substantially offset by credits for foreign taxes already paid.

Unrecognized Tax Benefits

For the year ended December 31, 2014,2017, we recognized $489$189 of previously unrecognized tax benefits. This primarily relates to the statute of limitations expiring in certain state and local jurisdictions. Included in the amount recognized was $64$70 of potential interest and penalties related to uncertain tax positions. For the year ended December 31, 2013,2016, we recognized $330$284 of previously unrecognized tax benefits relating to the statute of limitations expiring in certain state and local jurisdictions. Included in the amount recognized was $32$28 of potential interest and penalties related to uncertain tax positions. The recognition of these amounts contributed to our effective tax rate of 39.0%49.0% for the year ended December 31, 20142017 as compared to 39.9%36.4% for the year ended December 31, 2013.

2016.

At December 31, 2014,2017,  we had $1,273$389 of unrecognized tax benefits, which if recognized, would affect our effective tax rate. Of this amount, $69 is classified in Prepaid expense and other current assets and the remaining $1,204rate, which is classified in Non-current income tax liabilities. At December 31, 2013,2016, we had $1,786$487 of unrecognized tax benefits. Of this amount $174benefits, which is classified in Prepaid expense and other current assets and the remaining $1,612 was classified in Non-current income tax liabilities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

11. Income Taxes (continued)

Unrecognized tax benefit activity is as follows:



		Year Ended December 31,
		2017			2016
Beginning Balance- January 1		$	487		$	818
Increase to unrecognized tax benefits recorded for positions taken during    the current year			56			77
Decrease to unrecognized tax benefits recorded for positions    taken during a prior period			—			(51)
Decrease to unrecognized tax benefits resulting from a lapse of the    applicable statute of limitations			(154)			(357)
Ending Balance- December 31		$	389		$	487

		Year Ended December 31,
		2014				2013				2012
Beginning Balance- January 1		$	1,786			$	2,128			$	10,733
Increase to unrecognized tax benefits recorded for positions taken during the current year		68				108				307
(Decrease) Increase to unrecognized tax benefits recorded for positions taken during a prior period		(38		)		(3		)		(2,591		)
Decrease in unrecognized tax benefits relating to settlements with taxing authorities		(100		)		(28		)		(5,793		)
Decrease to unrecognized tax benefits resulting from a lapse of the applicable statute of limitations		(443		)		(419		)		(528		)
Ending Balance- December 31		$	1,273			$	1,786			$	2,128

We recognize potential accrued interest and penalties related to uncertain tax positions in income tax expense. We have $355$84 of accrued interest and $120$45 of accrued penalties related to uncertain tax positions as of December 31, 2014. Of these amounts, $11 is classified in Prepaid expense and other current assets and the remaining $464 was2017 classified in Non-current income tax liabilities. At December 31, 2013,2016, we had $453$192 of accrued interest and $171$45 of accrued penalties related to uncertain tax positions.

Of this amount, $33 was classified in Prepaid expense and other current assets and the remaining $591 waspositions classified in Non-current income tax liabilities.

Based upon the expiration of statutes of limitations and possible settlements in several jurisdictions, we believe it is reasonably possible that the total amount of previously unrecognized tax benefits may decrease by approximately $566$127 within 12 months after December 31, 2014.

2017.  

We file income tax returns in the United States and various state, local, and foreign jurisdictions. During 2014,2017 and 2016, the Company settled audits with various state local, and foreignlocal jurisdictions. We are generally subject to examination by the IRS and with few exceptions, otherfor years ending on or after December 31, 2014. We are also subject to examination by various state and local jurisdictions for years ending on or after December 31, 2011.

12.2014.

13. Film and Television Production Incentives

The Company has access to various governmental programs that are designed to promote film and television production within the United States of America and certain international jurisdictions. Incentives earned with respect to expenditures on qualifying film television and other production activities includingand qualifying capital projects are includedrecorded as an offset to the related asset orbalances. Incentives earned with respect to television and other production activities are recorded as an offset to production expensesexpenses. The Company recognizes these benefits when we have reasonable assurance regarding the realizable amount of the incentives. Film and television production

We recorded the following incentives received consisted of the following:

		Year Ended December 31,
		2014				2013				2012
Feature film production incentives		$	4,548			$	864			$	1,851
Television production incentives		$	10,833			$	10,345			$	7,979

During the year ended December 31, 2014, we received $3,080 for infrastructure improvement incentives relating to qualifying capital projects. Of this amount $2,937, was recorded as a reduction in property and equipment. We did not receive any similar incentives forduring the years ended December 31, 20132017,  2016 and 2012.2015:



		Year Ended December 31,
		2017			2016			2015
Television production incentives		$	11,260		$	12,982		$	11,100
Feature film production incentives		$	3,683		$	1,347		$	1,639

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13. Restructuring Charge

During 2014, the Company announced a restructuring plan in support of a cost cutting initiative. Included in this restructuring was the shutdown of our magazine publishing business, a shift in our gamification strategy, and a reduction in our headcount. Additionally, the cost cutting initiatives included reducing prospective spending throughout our operations. The Company recorded a one-time pre-tax restructuring charge of approximately $4,200 in the third quarter of 2014, comprised primarily of a cash charge of approximately $2,000 for severance costs and the write-down of certain assets associated with our gamification business resulting in a non-cash charge of approximately $1,800. The severance costs are recorded in Selling, General and Administrative expenses in our Consolidated Statements of Operations. Approximately $1,700 of cash spend related to severance and other restructuring charges was paid out in the second half of 2014 and we expect that a majority of the remaining liability will be paid out during the first quarter of 2015.

14. Commitments and Contingencies

We have certain commitments, including various non-cancelable operating leases for facilities and sales offices, service contracts with certain vendors and various talent.

talent, and a service agreement obligation related to WWE Network.

Future minimum payments as of December 31, 20142017 under the agreements described above were as follows:



		Operating			Service Contracts			Service
		Lease			and Talent			Agreement
		Commitments			Commitments			Commitments			Total
2018		$	5,026		$	27,582		$	6,417		$	39,025
2019			4,540			19,956			—			24,496
2020			2,490			14,327			—			16,817
2021			1,590			7,164			—			8,754
2022			1,563			5,902			—			7,465
Thereafter			6,392			702			—			7,094
Total		$	21,601		$	75,633		$	6,417		$	103,651

		Operating Lease Commitments				Talent and Other Commitments				Service Agreement Commitments				Total
2015		$	4,599			$	11,952			$	9,493			$	26,044
2016		3,242				9,676				—				12,918
2017		1,884				7,635				—				9,519
2018		1,719				1,995				—				3,714
2019		1,640				1,995				—				3,635
Thereafter		2,044				2,556				—				4,600
Total		$	15,128			$	35,809			$	9,493			$	60,430

Rent expense under operating lease commitments totaled $6,583, $5,405$6,240,  $6,367 and $4,608$6,414 for the years ended December 31, 2014, 20132017,  2016 and 2012,2015, respectively.

Legal Proceedings

On July 26, 2014, the Company received notice of a lawsuit filed in the United States District Court for the District of Connecticut, entitled Warren Ganues and Dominic Varriale, on behalf of themselves and all others similarly situated, v. World Wrestling Entertainment, Inc., Vincent K. McMahon and George A. Barrios, alleging violations of federal securities laws based on certain statements relating to the negotiation of WWE’s domestic television license.  The complaint seeks certain unspecified damages.  A nearly identical lawsuit was filed one month later entitled Curtis Swanson, on behalf of himself and all others similarly situated, v. World Wrestling Entertainment, Inc., Vincent K. McMahon and George A. Barrios.  Both lawsuits are purported securities class actions subject to the Private Securities Litigation Reform Act of 1995 (“PSLRA”).  On September 23-24, five putative plaintiffs filed motions to be appointed lead plaintiff and to consolidate the two cases pursuant to the PSLRA.  Following a hearing on October 29, 2014, the Court issued an order dated November 5, 2014 appointing Mohsin Ansari as Lead Plaintiff and consolidating the two actions.  On January 5, 2015, the Lead Plaintiff filed an amended complaint.  Among other things, the amended complaint adds Stephanie McMahon Levesque and Michelle D. Wilson as named defendants.The Company believes the claims are without merit and intends to vigorously defend itself against them.

On October 23, 2014, a purported class action lawsuit was filed in the United StatesU. S. District Court for the District of Oregon, entitled William Albert Haynes III, on behalf of himself and others similarly situated, v. World Wrestling Entertainment, Inc., This complaint was amended on January 30, 2015 and alleged that the Company ignored, downplayed, and/or failed to disclose the risks associated with traumatic brain injuries suffered by WWE’s performers and seeks class action status. On March 31, 2015, the Company filed a motion to dismiss the first amended class action complaint in its entirety or, if not dismissed, to transfer the lawsuit to the U.S. District Court for the District of Connecticut. Without addressing the merits of the Company's motion to dismiss, the Court transferred the case to Connecticut on June 25, 2015. The plaintiffs filed an objection to such transfer, which was denied on July 27, 2015. On January 16, 2015, a purported class actionsecond lawsuit was filed in the United StatesU.S. District Court for the Eastern District of Pennsylvania, entitled Evan Singleton and Vito LoGrasso, individually and on behalf of all others similarly situated, v. World Wrestling Entertainment, Inc.,both alleging thatmany of the same allegations as Haynes. On February 27, 2015, the Company ignored, downplayed, and/or failedmoved to disclosetransfer venue to the risks associated

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

14. CommitmentsU.S. District Court for the District of Connecticut due to forum-selection clauses in the contracts between WWE and Contingencies (continued)the plaintiffs and that motion was granted on March 23, 2015.  The plaintiffs filed an amended complaint on May 22, 2015 and, following a scheduling conference in which the court ordered the plaintiffs to cure various pleading deficiencies, the plaintiffs filed a second amended complaint on June 15, 2015.  On June 29, 2015, WWE moved to dismiss the second amended complaint in its entirety. On April 9, 2015, a third lawsuit was filed in the U. S. District Court for the Central District of California, entitled

with traumatic brain injuries suffered by WWE’s performers.  TheseRuss McCullough, a/k/a “Big Russ McCullough,” Ryan Sakoda, and Matthew R. Wiese a/k/a “Luther Reigns,” individually and on behalf of all others similarly situated, v. World Wrestling Entertainment, Inc., asserting similar allegations to Haynes. The Company again moved to transfer the lawsuit to Connecticut due to forum-selection clauses in the contracts between WWE and the plaintiffs, which the California court granted on July 10, 2015.  On September 21, 2015, the plaintiffs amended this complaint and, on November 16, 2015, the Company moved to dismiss the amended complaint.  Each of these suits both seekseeks unspecified actual, compensatory and punitive damages and injunctive relief, including ordering medical monitoring.  The Haynes and McCullough cases purport to be class actions. On February 18, 2015, a lawsuit was filed in Tennessee state court and subsequently removed to the U.S. District Court for the Western District of Tennessee, entitled Cassandra Frazier, individually and as next of kin to her deceased husband, Nelson Lee Frazier, Jr., and as personal representative of the Estate of Nelson Lee Frazier, Jr. Deceased, v. World Wrestling Entertainment, Inc. A similar suit was filed in the U. S. District Court for the Northern District of Texas entitled Michelle James, as mother and next friend of Matthew Osborne, minor child, and Teagan Osborne, a minor child v. World Wrestling Entertainment, Inc. These lawsuits contain many of the same allegations as the other lawsuits alleging traumatic brain injuries and further allege that the injuries contributed to these former talents’ deaths. WWE moved to transfer the Frazier and Osborne lawsuits to the U.S. District Court for the District of Connecticut based on forum-selection clauses in the decedents’ contracts with WWE, which motions were granted by the respective courts. On November 23, 2015, amended complaints were filed in Frazier and Osborne, which the Company moved to dismiss on December 16, 2015 and December 21, 2015, respectively. On November 10, 2016, the Court granted the Company’s motions to dismiss the Frazier and Osborne lawsuits in their entirety. On June 29, 2015, the Company filed a declaratory judgment action in the U. S. District Court for the District of Connecticut entitled World Wrestling Entertainment, Inc. v. Robert

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Windham, Thomas Billington, James Ware, Oreal Perras and various John and Jane Does seeking a declaration against these former performers that their threatened claims related to alleged traumatic brain injuries and/or other tort claims are time-barred. On September 21, 2015, the defendants filed a motion to dismiss this complaint, which the Company opposed. The Court previously ordered a stay of discovery in all cases pending decisions on the motions to dismiss.  On January 15, 2016, the Court partially lifted the stay and permitted discovery only on three issues in the case involving Singleton and LoGrasso. Such discovery was completed by June 1, 2016. On March 21, 2016, the Court issued a memorandum of decision granting in part and denying in part the Company’s motions to dismiss the Haynes, Singleton/LoGrasso, and McCullough lawsuits. The Court granted the Company’s motions to dismiss the Haynes and McCullough lawsuits in their entirety and granted the Company’s motion to dismiss all claims in the Singleton/LoGrasso lawsuit except for the claim of fraud by omission. On March 22, 2016, the Court issued an order dismissing the Windham lawsuit based on the Court’s memorandum of decision on the motions to dismiss. On April 4, 2016, the Company filed a motion for reconsideration with respect to the Court’s decision not to dismiss the fraud by omission claim in the Singleton/LoGrasso lawsuit and, on April 5, 2016, the Company filed a motion for reconsideration with respect to the Court dismissal of the Windham lawsuit. On July 21, 2016, the Court denied the Company’s motion in the Singleton/LoGrasso lawsuit and granted in part the Company’s motion in the Windham lawsuit. On April 20, 2016, the plaintiffs filed notices of appeal of the Haynes and McCullough lawsuits. On April 27, 2016, the Company moved to dismiss the appeals for lack of appellate jurisdiction, which motions were granted and the appeals were dismissed with leave to appeal upon the resolution of all of the consolidated cases. The Company has filed a motion for summary judgment on the sole remaining claim in the Singleton/LoGrasso lawsuit. The Company also filed a motion for judgment on the pleadings against the Windham defendants. Lastly, on July 18, 2016, a lawsuit was filed in the U.S. District Court for the District of Connecticut, entitled Joseph M. Laurinaitis, et al. vs. World Wrestling Entertainment, Inc. and Vincent K. McMahon, individually and as the trustee of certain trusts. This lawsuit contains many of the same allegations as the other lawsuits alleging traumatic brain injuries and further alleges, among other things, that the plaintiffs were misclassified as independent contractors rather than employees denying them, among other things, rights and benefits under the Occupational Safety and Health Act (OSHA), the National Labor Relations Act (NLRA), the Family and Medical Leave Act (FMLA), federal tax law, and various state Worker’s Compensation laws. This lawsuit also alleges that the booking contracts and other agreements between the plaintiffs and the Company are unconscionable and should be declared void, entitling the plaintiffs to certain damages relating to the Company’s use of their intellectual property. The lawsuit alleges claims for violation of RICO, unjust enrichment, and an accounting against Mr. McMahon. The Company and Mr. McMahon moved to dismiss this complaint on October 19, 2016.  On November 9, 2016, the Laurinaitis plaintiffs filed an amended complaint. On December 23, 2016, the Company and Mr. McMahon moved to dismiss the amended complaint. On September 29, 2017, the Court issued an order on the motion to dismiss pending in the Laurinaitis case and on the motion for judgment on the pleadings pending in the Windham case. The Court reserved judgment on the pending motions and ordered that within thirty-five (35) days of the date of the order the Laurinaitis plaintiffs and the Windham defendants file amended pleadings that comply with the Federal Rules of Civil Procedure. The Court further ordered that each of the Laurinaitis plaintiffs and the Windham defendants submit to the Court for in camera review affidavits signed and sworn under penalty of perjury setting forth facts within each plaintiff’s or declaratory judgment-defendant’s personal knowledge that form the factual basis of their claim or defense. On November 3, 2017, the Laurinaitis plaintiffs filed a second amended complaint.  The Company and Mr. McMahon believe that the second amended complaint fails to comply with the Court’s September 29, 2017 order and otherwise remains legally defective for all of the reasons set forth in their motion to dismiss the amended complaint. Also on November 3, 2017, the Windham defendants filed a second answer. The Company does not know if the Laurinaitis Plaintiffs and Windham Defendants submitted the affidavits required under the Court’s September 29, 2017 order. On November 17, 2017, the Company and Mr. McMahon filed a response that, among other things, urged the Court to grant the motion for judgment on the pleadings against the Windham defendants and dismiss the Laurinaitis plaintiffs’ complaint with prejudice and award sanctions against the Laurinaitis plaintiffs’ counsel because the amended pleadings fail to comply with the Court’s September 29, 2017 order and the Federal Rules of Civil Procedure. The Company believes all claims and threatened claims against the claimsCompany in these various lawsuits are being prompted by the same plaintiffs’ lawyer and are without merit andmerit. The Company intends to vigorouslycontinue to defend itself against them.these lawsuits vigorously.

On August 9, 2016, a lawsuit was filed in the U.S. District Court for the District of Connecticut entitled Marcus Bagwell, individually and on behalf of all others similarly situated v. World Wrestling Entertainment, Inc. The lawsuit alleges claims for breach of contract, breach of fiduciary duty, unjust enrichment and violations of the Connecticut Unfair Trade Practices Act, C.G.S. §42-110a, et seq., principally arising from WWE’s alleged failure to pay royalties for streaming video on WWE Network. On September 7, 2016, a motion for leave to amend was filed along with a proposed amended complaint that, among other things, sought to add Scott Levy as an individual plaintiff and WCW, Inc. as a defendant. On November 4, 2016, the Court granted plaintiffs’ motion for leave to amend and plaintiffs filed their amended complaint on November 7, 2016. On December 2, 2016, the Company moved to dismiss the amended complaint. On May 5, 2017, the Court granted in part and denied in part the Company’s motion to dismiss. The Court dismissed plaintiff’s declaratory judgment, unjust enrichment and successor liability claims, as well as all claims asserted against WCW, Inc. The Court also granted plaintiffs leave to file a second amended complaint, which plaintiffs filed on May 19, 2017. Plaintiffs then sought leave to file a third amended complaint to correct certain errors by plaintiffs’ counsel, which the Court granted and plaintiffs filed their third amended complaint on June 15, 2017. The third amended complaint continues to assert claims for breach of contract, breach of

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fiduciary duty, and violations of the Connecticut Unfair Trade Practices Act, C.G.S. §42-110a, et seq. against WWE.  Following the depositions of Plaintiffs Bagwell and Levy, Plaintiffs’ counsel advised that they intended to voluntarily dismiss Plaintiffs’ remaining claims against the Company. On December 7, 2017, the parties filed a Stipulation of Dismissal pursuant to which all of Bagwell’s and Levy’s claims were dismissed with prejudice. No money was paid by WWE in consideration for the dismissal with prejudice. On December 8, 2017, the Court granted the parties’ Stipulation of Dismissal and closed the case.

In addition to the foregoing, from time to time we are involved in severalbecome a party to other suitslawsuits and claims that we consider to be in the ordinary course of our business.claims. By its nature, the outcome of litigation is not known, but the Company does not currently expect its pendingthis ordinary course litigation to have a material adverse effect on our financial condition, results of operations or liquidity. We may from time to time become a party to other legal proceedings.

15. Related Party Transactions

Vincent K. McMahon, Chairman of the Board of Directors and Chief Executive Officer, controls a substantial majority of the voting power of the issued and outstanding shares of our common stock. Through the beneficial ownership of a substantial majority of our Class B common stock, Mr. McMahon can effectively exercise control over our affairs.

Linda McMahon, former Chief Executive Officer of the Company, was a candidate for the United States Senate, representing the State of Connecticut, in 2012. Mrs. McMahon’s election teams engaged the Company to produce certain television advertisements during this campaign. The Company performed these services and charged the campaign's the fair market value for the provided television production services, which was approximately $4 for the year ended December 31, 2012.

16. Stockholders’ Equity

Class B Convertible Common Stock

Our Class B common stock is fully convertible into Class A common stock, on a one for one basis, at any time at the option of the holder. The two classes are entitled to equal per share dividends and distributions and vote together as a class with each share of Class B entitled to ten votes and each share of Class A entitled to one vote, except when separate class voting is required by applicable law. If, at any time, any shares of Class B common stock are beneficially owned by any person other than Vincent McMahon, Linda McMahon, any descendant of either of them, any entity which is wholly owned and is controlled by any combination of such persons or any trust, all the beneficiaries of which are any combination of such persons, each of those shares will automatically convert into shares of Class A common stock. During the years ended December 31, 2014, 20132017,  2016 and 2012,2015, Class B shares were sold, resulting in their conversion to Class A shares. Through his beneficial ownership of a substantial majority of our Class B common stock, our controlling stockholder, Vincent McMahon, can effectively exercise control over our affairs, and his interests could conflict with the holders of our Class A common stock.

Dividends

We declared and paid quarterly dividends of $0.12 per share, totaling $36,150, $35,979,$36,854,  $36,564, and $35,815$36,345 on all Class A and Class B shares for the years ended December 31, 2014, 2013, 20122017,  2016 and 2015, respectively.

17. Stock-based Compensation

Our 2007 Amended and Restated2016 Omnibus Incentive Plan ("the 2007 Plan"(the “2016 Plan”) provides for equity-basedthe grant of incentive or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance awards to eligible participants as determined by the Compensation Committee of the Board of Directors as incentivesDirectors. Awards may be granted under the 2016 Plan to officers, employees, consultants, advisors and rewardsindependent contractors of the Company and its affiliates and to encourage officers and employees to participate in our long-term success.

non-employee directors of the Company.

As of December 31, 2014,2017, there were approximately 2.43.6 million shares available for future grants under the 20072016 Plan. It is our policy to issue new shares to satisfy option exercises and the vesting of RSUs and PSUs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

17. Stock-based Compensation (continued)

Restricted Stock Units

The Company grants RSUs to officers and employees under the 20072016 Plan. Stock-based compensation costs associated with our RSUs are determined using the fair market value of the Company's common stock on the date of the grant. These costs are recognized over the requisite service period using the graded vesting method, net of estimated forfeitures. RSUs have a service requirement typically over a three and one halfone-half year vesting schedule and vest in equal annual installments. We estimate forfeitures based on historical trends when recognizing compensation expense and adjust the estimate of forfeitures when they are expected to differ or as forfeitures occur. 

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Unvested RSUs accrue dividend equivalents at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying RSUs.

The following tables summarize the activity of RSUs for the year ended December 31, 2014:2017:



		Units		Weighted- Average Grant-Date Fair Value
Unvested at January 1, 2017		356,761		$	16.68
Granted		308,888		$	19.60
Vested		(145,098)		$	17.16
Forfeited		(54,448)		$	17.75
Dividend equivalents		11,689		$	18.12
Unvested at December 31, 2017		477,792		$	18.33



		Year Ended December 31,
		2017			2016			2015
Stock-based compensation expense		$	3,519		$	2,407		$	1,706
Tax benefits realized			2,920			1,775			666
Weighted-average grant-date fair value of RSUs granted			6,054			3,825			3,288
Fair value of RSUs vested			2,490			1,580			849

		Units			Weighted-Average Grant-Date Fair Value
Unvested at January 1, 2014		107,034			$	9.87
Granted		112,811			$	22.81
Vested		(72,720	)		$	11.11
Forfeited		(32,513	)		$	14.70
Dividend equivalents		4,608			$	19.11
Unvested at December 31, 2014		119,220			$	20.39

		Year Ended December 31,
		2014				2013				2012
Stock-based compensation expense		$	1,095			$	632			$	1,320
Tax benefits realized		1,036				621				494
Weighted-average grant-date fair value of RSUs granted		2,573				515				1,366
Fair value of RSUs vested		808				656				647

As of December 31, 2014,2017, total unrecognized stock-based compensation expense related to unvested RSUs net of estimated forfeitures, was approximately $1,438$4,607 before income taxes, and is expected to be recognized over a weighted-average period of approximately 1.71.6 years.

Performance Stock Units

The Company grants PSUs to officers and employees under the 2016 Plan. Stock-based compensation costs associated with our PSUs are initially determined using the fair market value of the Company's common stock on the date the awards are approved by our Compensation Committee (service inception date) and are granted under the 2007 Plan.. The vesting of these PSUs are subject to certain performance conditions and a service requirement of typically three and one halfone-half years. Until such time as the performance conditions are met, stock compensation costs associated with these PSUs are re-measured each reporting period based upon the fair market value of the Company's common stock and the probability ofestimated performance attainment on the reporting date. The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance conditions. Stock compensation costs for our PSUs are recognized over the requisite service period using the graded vesting method, net of estimated forfeitures. We estimate forfeitures based on historical trends when recognizing compensation expense and adjust the estimate of forfeitures when they are expected to differ or as forfeitures occur. Unvested PSUs accrue dividend equivalents once the performance conditions are met at the same rate as are paid on our shares of Class A common stock. The dividend equivalents are subject to the same vesting schedule as the underlying PSUs.

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17. Stock-based Compensation (continued)

The following tables summarize the activity of PSUs for the year ended December 31, 2014:2017:



		Units		Weighted- Average Grant-Date Fair Value
Unvested at January 1, 2017		2,161,311		$	16.39
Granted		550,460		$	30.58
Achievement adjustment		282,662		$	20.96
Vested		(897,338)		$	17.05
Forfeited		(84,942)		$	24.62
Dividend equivalents		41,778		$	18.03
Unvested at December 31, 2017		2,053,931		$	21.37



		Year Ended December 31,
		2017			2016			2015
Stock-based compensation expense		$	20,356		$	15,361		$	15,088
Tax benefits realized			18,538			11,525			7,028
Weighted-average grant-date fair value of PSUs granted			16,833			17,604			17,843
Fair value of PSUs vested			15,301			9,763			6,078

		Units			Weighted-Average Grant-Date Fair Value
Unvested at January 1, 2014		1,259,629			$	13.46
Granted		278,281			$	12.34
Achievement adjustment		(387,633	)		$	23.99
Vested		(371,197	)		$	13.71
Forfeited		(66,479	)		$	21.47
Dividend equivalents		21,167			$	15.66
Unvested at December 31, 2014		733,768			$	14.89

		Year Ended December 31,
		2014				2013				2012
Stock-based compensation expense		$	6,248			$	4,489			$	2,440
Tax benefits realized		4,423				3,318				2,252
Weighted-average grant-date fair value of PSUs granted		3,434				14,430				4,913
Fair value of PSUs vested		5,090				2,937				4,375

For

During the periodyear ended MarchDecember 31, 2014,2017, we granted 278,281550,460 PSUs which are subject to certain performance conditions.

During the year ended December 31, 21032016 we granted 804,896956,730 PSUs,  which were subject to performance conditions. During the three months ended March 31, 2014,first quarter of 2017,  it was determined that the certain performance conditions related to these PSUs were partially metexceeded, which resulted in a reductionan increase of 387,633282,662 PSUs in 20142017 relating to the initial 20132016 PSU grant.

As of December 31, 2014,2017, total unrecognized stock-based compensation expense related to unvested PSUs, net of estimated forfeitures, was approximately $4,657,$20,077 before income taxes, and is expected to be recognized over a weighted-average period of approximately 1.41.5 years.

Employee Stock Purchase Plan

We provide a stock purchase plan for our employees. Under the plan, all eligible regular full-time employees may contribute up to 10% of their base compensation (subject to certain income limits) to the semi-annual purchase of shares of our common stock. The purchase price is 85% of the fair market value at certain plan-defined dates. As this plan is defined as compensatory, a charge is recorded to Selling, general and administrative expense for the difference between the fair market value and the discounted price. During 2014, 20132017,  2016 and 2012,2015, employees purchased 71,157, 76,21972,882,  71,636 and 76,67686,922 shares of our common stock which resulted in an expense of $201, $404, $85,$276,  $331,  and $438, respectively. As of December 31, 2014, 1.82017,  1.6 million shares of the Company's common stock are reserved for issuance under the 2012 Employee Stock Purchase Plan.

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(In thousands, except per share data)

18. Employee Benefit Plans

We sponsor a 401(k) defined contribution plan covering substantially all employees. Under this plan, participants are allowed to make contributions based on a percentage of their salary, subject to a statutorily prescribed annual limit. We make matching contributions of 50% of each participant’s contributions, up to 6% of eligible compensation. We may also make additional discretionary contributions to the 401(k) plan. Our expense for matching contributions to the 401(k) plan was $1,861, $1,606$2,341,  $2,028 and $1,384$1,947 for the years ended December 31, 2014, 20132017,  2016 and 2012,2015, respectively. The Company did not make any discretionary contributions for the years ended December 31, 20142017,  2016 or 2015.

F-, 342013 or 2012.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

19. Segment Information

During the first quarter of 2014, the Company launched WWE Network, which changed the way that certain content is delivered to our customers. The launch of WWE Network coupled with the continued convergence within the media landscape, has resulted in a change in the Company’s management reporting to its chief operating decision maker. These changes necessitated a change in the Company’s segment reporting to align with management’s operational view. As discussed in Note 1, Basis of Presentation and Business Description, the Company currently classifies its operations into ten reportable segments. The ten reportable segments of the Company now include the following: Network (which includes our pay-per-view business), Television, Home Entertainment and Digital Media, which are individual segments that comprise the Media Division; Live Events; Licensing, Venue Merchandise and WWEShop, which are individual segments that comprise the Consumer Products Division; WWE Studios, and Corporate and Other (as defined below).

The Company presents OIBDA as the primary measure of segment profit (loss). The Company defines OIBDA as operating income before depreciation and amortization, excluding feature film and television production asset amortization and impairments, as well as the amortization of costs related to content delivery and technology assets utilized for our WWE Network. The Company believes the presentation of OIBDA is relevant and useful for investors because it allows investors to view our segment performance in the same manner as the primary method used by management to evaluate segment performance and make decisions about allocating resources. The Company definesAdditionally, we believe that OIBDA as operating income before depreciation and amortization, excluding feature film and television production asset amortization and impairments, as well as, the amortization of costs related to content delivery and technology utilized for our WWE Network.

OIBDA isprovides a non-GAAP financial measure and may be different than similarly-titled non-GAAP financial measures used by other companies. A limitation of OIBDA is that it excludes depreciation and amortization, which represents the periodic charge for certain fixed assets and intangible assets used in generating revenues for our business. OIBDA should not be regarded as an alternative to operating income or net income as an indicatormeaningful representation of operating performance, or to the statement of cash flows as a measure of liquidity, nor should it be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. within our segments.

We believe that operating income is the most directly comparable GAAP financial measure to OIBDA. See below for a reconciliation of OIBDA to operating income for the periods presented.

We do not allocaterecord certain costs included in OIBDA ofwithin our Corporate and Other segment tosince the other reportable segments. Corporate and Other expense primarily includes corporate overhead and certain expenses related to sales and marketing, including our international offices, and talent development functions, including costs associated with our WWE Performance Center. These costs benefit the Company as a whole and are therefore not allocated. Revenues from transactions betweendirectly attributable to our operating segmentsother reportable segments. These costs are not material.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

19. Segment Information (continued)

presented in two categories, Corporate Support and Business Support. Corporate support expenses primarily include our corporate general and administrative functions. Business Support expenses include our sales and marketing functions, our international offices, talent development costs, including costs associated with our WWE Performance Center, and our business strategy and data analytics functions. Included in Corporate and Other are intersegment eliminations recorded in consolidation.

We do not disclose assets by segment information. In general, assets of the Company are leveraged across its reportable segments and we do not provide assets by segment information to our chief operating decision maker, as that information is not typically used in the determination of resource allocation and assessing business performance of each reportable segment.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

The following tables present summarized financial information for each of the Company's reportable segments:



		Year Ended December 31,
		2017			2016			2015
Net revenues:
Network		$	197,876		$	180,895		$	159,407
Television			270,217			241,730			231,115
Home Entertainment			8,635			13,110			13,434
Digital Media			34,479			26,937			21,448
Live Events			151,705			144,358			124,667
Licensing			52,126			49,126			48,913
Venue Merchandise			23,742			24,198			22,428
WWEShop			37,815			34,607			27,074
WWE Studios			18,618			10,094			7,082
Corporate & Other			5,746			4,161			3,200
Total net revenues		$	800,959		$	729,216		$	658,768

Depreciation and amortization:
Network		$	6,897		$	6,045		$	—
Television			4,756			5,026			8,955
Home Entertainment			56			20			—
Digital Media			175			342			1,254
Live Events			—			2			22
WWE Studios			—			—			8
Corporate & Other			14,166			12,976			12,521
Total depreciation and amortization		$	26,050		$	24,411		$	22,760

OIBDA:
Network (1)		$	64,176		$	43,020		$	48,364
Television (1)			139,446			119,814			96,967
Home Entertainment			1,624			5,249			4,624
Digital Media			10,252			4,576			4,384
Live Events			42,254			41,807			37,986
Licensing			31,119			27,430			28,795
Venue Merchandise			9,116			9,764			8,870
WWEShop			8,289			7,338			5,148
WWE Studios			(3,642)			(258)			(1,487)
Corporate & Other (2)			(201,006)			(178,688)			(172,097)
Total OIBDA		$	101,628		$	80,052		$	61,554

Reconciliation of Total Operating Income to Total OIBDA



		Year Ended December 31,
		2017			2016			2015
Total operating income		$	75,578		$	55,641		$	38,794
Depreciation and amortization			26,050			24,411			22,760
Total OIBDA (2)		$	101,628		$	80,052		$	61,554

		Year Ended December 31,
		2014				2013				2012
Net revenues:
Network		$	114,975			$	86,264			$	87,690
Television		176,670				163,428				140,871
Home Entertainment		27,313				24,322				33,002
Digital Media		20,910				28,661				25,738
Live Events		110,659				113,168				106,514
Licensing		38,565				43,633				46,286
Venue Merchandise		19,336				19,397				18,774
WWEShop		20,238				15,598				14,780
WWE Studios		10,882				10,778				7,877
Corporate & Other		3,072				2,721				2,481
Total net revenues		$	542,620			$	507,970			$	484,013
Depreciation and amortization:
Network		$	—			$	—			$	—
Television		8,141				6,613				9,183
Digital Media		2,989				2,693				1,485
Live Events		29				45				55
WWE Studios		9				9				9
Corporate & Other		15,537				15,109				9,292
Total depreciation and amortization		$	26,705			$	24,469			$	20,024
OIBDA:
Network		$	(1,773	)		$	27,801			$	41,463
Television		61,865				56,181				51,478
Home Entertainment		15,024				8,839				15,393
Digital Media		295				5,688				8,671
Live Events		27,829				30,740				27,043
Licensing		20,924				31,265				32,320
Venue Merchandise		7,722				7,547				6,741
WWEShop		3,524				2,378				2,105
WWE Studios		466				(12,744		)		(5,454		)
Corporate & Other		(151,328		)		(127,335		)		(116,541		)
Total OIBDA		$	(15,452	)		$	30,360			$	63,219

(1)

Beginning on January 1, 2016, the Company started allocating certain shared costs and expenses between our Network and Television segments. We believe this allocation more accurately reflects the operations of each of these reportable segments. The impact of this allocation methodology during the year ended December 31, 2016 was a decline to Network segment OIBDA of $15,427, with a corresponding increase of $15,427 to Television segment OIBDA. The allocation methodology had no impact on our consolidated financial statements. Prior year F-36

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Network and Television segment results were not revised for this prospective change in the allocation method. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

(2)

The year ended December 31, 2015 includes a $7,125 charge to write-off assets related to a media center expansion project. This non-cash, non-recurring item relates to assets capitalized in previous years and is recorded as Loss on abandonment in our Consolidated Statements of Operations. See Note 6, Property and Equipment, for further discussion.

19. Segment Information (continued)

Reconciliation of Total Operating (Loss) Income to Total OIBDA

		Year Ended December 31,
		2014				2013				2012
Total operating (loss) income		$	(42,157	)		$	5,891			$	43,195
Depreciation and amortization		26,705				24,469				20,024
Total OIBDA		$	(15,452	)		$	30,360			$	63,219

Geographic Information

Net revenues by major geographic region are based upon the geographic location of where our content is distributed. The information below summarizes net revenues to unaffiliated customers by geographic area:



		Year Ended December 31,
		2017			2016			2015
North America		$	599,697		$	539,917		$	488,957
Europe/Middle East/Africa			125,639			122,728			112,326
Asia Pacific			61,568			54,699			49,348
Latin America			14,055			11,872			8,137
Total net revenues		$	800,959		$	729,216		$	658,768

		Year ended December 31,
		2014				2013				2012
North America		$	426,191			$	391,663			$	365,942
Europe/Middle East/Africa		69,085				72,409				70,720
Asia Pacific		41,054				37,269				37,087
Latin America		6,290				6,629				10,264
Total net revenues		$	542,620			$	507,970			$	484,013

Revenues generated from the United Kingdom, our largest international market, totaled $40,501, $36,003$77,485,  $78,543 and $34,001$75,653 for the years ended December 31, 2014, 20132017,  2016 and 2012,2015, respectively. The Company's property and equipment was almost entirely located in the United States at December 31, 20142017 and 2013.

2016.

20. Concentration of Credit Risk

We continually monitor our position with, and the credit quality of, the financial institutions that are counterparties to our financial instruments. Our accounts receivable relatesrelate principally to a limited number of distributors, including our WWE Network, television, pay-per-view, and home video distributors, and licensees that produce consumer products containing our intellectual trademarks.property. We closely monitor the status of receivables with these customers and maintain allowances for anticipated losses as deemed appropriate. At December 31, 2014 and 20132017 our largest singlereceivable balance from customers made up 14% and 13% , respectively,was 16% of our gross accounts receivable. At December 31, 2016, our two largest receivable balance.balances from customers were 17% and 15% of our gross accounts receivable. No other customers individually exceeded 10% of our gross accounts receivable balance.

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WORLD WRESTLING ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

21.Selected

21. Selected Quarterly Financial Information (unaudited)



		1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
2017		(1) (2)			(1)			(1) (2)			(1) (2) (3)
Net revenues		$	188,444		$	214,586		$	186,325		$	211,604
Cost of revenues		$	109,153		$	136,387		$	95,233		$	118,208
Net income		$	888		$	5,085		$	21,854		$	4,813
Net income per common share: basic		$	0.01		$	0.07		$	0.28		$	0.06
2016
Net revenues		$	171,100		$	198,994		$	164,162		$	194,960
Cost of revenues		$	93,334		$	132,020		$	87,637		$	117,041
Net income		$	13,885		$	862		$	11,075		$	8,019
Net income per common share: basic		$	0.18		$	0.01		$	0.15		$	0.10

(1)

Cost of revenues for the first, second, third and fourth quarters of 2017 includes impairment charges of $2,078,  $1,084,  $759 and $1,551, respectively, related to certain of our feature films. Cost of revenues for the fourth quarter of 2016 includes an impairment charge of $823 related to certain of our feature films. See Note 7, Feature Film Production Assets, for further discussion.

(2)

Net income for the third and fourth quarters of 2017 includes a benefit of $10,645 and $615, respectively, related to television production incentives. Net income for the first, third and fourth quarters of 2016 includes a benefit of $2,530,  $9,638 and $814, respectively, related to television production incentives.

		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
2014		(1) (2)				(2) (3)				(1) (2) (3)				(1) (2)
Net revenues		$	125,572			$	156,310			$	120,183			$	140,555
Cost of revenues		$	84,716			$	121,747			$	78,417			$	92,735
Net loss		$	(8,036	)		$	(14,497	)		$	(5,921	)		$	(1,618	)
Net loss per common share: basic		$	(0.11	)		$	(0.19	)		$	(0.08	)		$	(0.02	)
2013
Net revenues		$	124,001			$	152,282			$	113,292			$	118,395
Cost of revenues		$	74,866			$	96,855			$	70,947			$	80,360
Net income (loss)		$	3,034			$	5,182			$	2,439			$	(7,891	)
Net income (loss) per common share: basic		$	0.04			$	0.07			$	0.03			$	(0.11	)

(3)

Net income for the fourth quarter of 2017 includes one-time charges of $10,878 associated with the remeasurement of our net deferred tax assets and $406 related to the transition tax on mandatory repatriation of undistributed foreign earnings arising from the enactment of the Tax Act. See Note 12, Income Taxes, for further discussion.

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(1) Cost

Table of revenues for the fourth quarter of 2014 and first and third quarters of 2013 include impairment charges of $1,476, Contents

W$4,696, and $6,965, respectively, related to certain of our feature films. See Note 7. Feature Film Production Assets.

(2)Net income (loss) for the third quarter of 2014 includes the benefit of $7,041, and for the second and third quarters of 2013, the benefit of $257, $6,373, respectively, relating to incentives received relating to television production. Additionally, net income in the second, third and fourth quarters of 2014 includes a benefit of $296, $985 and $1,674, respectively, related to feature film production incentives. Further, in 2014 we received an infrastructure improvement incentive which has a $970 positive impact on net income.

(3) Net loss for the second quarter of 2014 includes a $1,600 adjustment to reduce the carrying value of the old corporate aircraft to its estimated fair value. Net loss for the third quarter of 2014 includes $4,200 in restructuring charges in support of a cost cutting initiative and includes a $3,962 impairment of an equity investment.

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WORLDORLD WRESTLING ENTERTAINMENT, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(in thousands)



					Charges to
		Balance at			Expense/
		Beginning			Against			Deductions/			Balance at
Description		of Year			Revenues			Adjustments *			End of Year
For the Year Ended December 31, 2017
Allowance for doubtful accounts		$	5,945		$	537		$	(5,140)		$	1,342
Home video allowance for returns			2,273			6,890			(7,501)			1,662
Allowance for WWE Network refunds and chargebacks			40			353			(363)			30
For the Year Ended December 31, 2016
Allowance for doubtful accounts		$	7,789		$	(386)		$	(1,458)		$	5,945
Home video allowance for returns			2,442			7,294			(7,463)			2,273
Allowance for WWE Network refunds and chargebacks			80			402			(442)			40
For the Year Ended December 31, 2015
Allowance for doubtful accounts		$	4,814		$	630		$	2,345		$	7,789
Magazine publishing allowance for newsstand returns			299			28			(327)			—
Home video allowance for returns			2,588			10,158			(10,304)			2,442
Allowance for WWE Network refunds and chargebacks			25			855			(800)			80

Description		Balance at Beginning of Year				Charges to Expense/ Against Revenues				Deductions/Adjustments *				Balance at End of Year
For the Year Ended December 31, 2014
Allowance for doubtful accounts		$	2,786			$	1,164			$	864			$	4,814
Magazine publishing allowance for newsstand returns		2,038				8,363				(10,102		)		299
Home video allowance for returns		4,520				9,828				(11,760		)		2,588
Network chargebacks		—				302				(277		)		25
For the Year Ended December 31, 2013
Allowance for doubtful accounts		$	6,275			$	(6	)		$	(3,483	)		$	2,786
Magazine publishing allowance for newsstand returns		2,145				14,948				(15,055		)		2,038
Home video allowance for returns		6,271				18,711				(20,462		)		4,520
For the Year Ended December 31, 2012
Allowance for doubtful accounts		$	2,179			$	2,483			$	1,613			$	6,275
Magazine publishing allowance for newsstand returns		3,286				14,355				(15,496		)		2,145
Home video allowance for returns		7,096				15,990				(16,815		)		6,271

*   Includes deductions which are comprised primarily of write-offs of specific bad debts and returns of magazines and home videos from retailers, products,  as well as certain adjustments to the allowance account, which affects bad debt expense or network cancellations and adjustments to refund allowances.including reserves for amounts due from customers that have not been recognized as revenue.

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