Quarterly report pursuant to Section 13 or 15(d)

LEASES LEASES

v3.19.2
LEASES LEASES
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
LEASES LEASES
We lease office space, many of our concert venues, festival sites and certain equipment. We do not recognize an operating lease asset or liability on our consolidated balance sheets for leases with an initial term of twelve months or less, including multi-year festival site leases where the sum of the non-consecutive periods of rental time is less than twelve months. Rent expense for these short-term leases is generally recognized on a straight-line basis over the lease term.
Some of our lease agreements contain annual rental escalation clauses, as well as provisions for us to pay the related utilities and maintenance. We have elected to account for the lease components (i.e., fixed payments including rent, parking and real estate taxes) and nonlease components (i.e., common-area maintenance costs) as a single lease component.
Many of our lease agreements contain renewal options that can extend the lease for additional terms typically ranging from one to ten years. Renewal options at the discretion of the lessor are included in the lease term while renewal options at our discretion are generally not included in the lease term unless they are reasonably certain to be exercised.
In addition to fixed rental payments, many of our leases contain contingent rental payments based on a percentage of revenue, tickets sold or other variables, while others include periodic adjustments to rental payments based on the prevailing inflationary index or market rental rates. Our leases do not contain any material residual value guarantees or restrictive covenants.
We measure our lease assets and liabilities using an incremental borrowing rate which varies from lease to lease depending on geographical location and length of the lease.
The significant components of operating lease expense are as follows:
 
Three Months Ended 
 June 30, 2019
Six Months Ended 
 June 30, 2019
 
(in thousands)
Operating lease cost
$
49,110

$
95,839

Variable and short-term lease cost
34,064

47,829

Sublease income
(4,888
)
(8,629
)
Net lease cost
$
78,286

$
135,039


Supplemental cash flow information for our operating leases is as follows:
 
Six Months Ended 
 June 30, 2019
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
$
94,562

Lease assets obtained in exchange for lease obligations
$
128,175


Future maturities of our operating lease liabilities at June 30, 2019 are as follows:
 
(in thousands)
July 1 - December 31, 2019
$
83,879

2020
182,103

2021
161,123

2022
154,944

2023
147,285

Thereafter
1,150,313

Total lease payments
1,879,647

Less: Interest
620,689

Present value of lease liabilities
$
1,258,958


The weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:
 
June 30, 2019
Weighted average remaining lease term (in years)
13.5

Weighted average discount rate
5.75
%

As of June 30, 2019, we have additional operating leases that have not yet commenced with total lease payments of $304.7 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 2019 to December 2020 with lease terms ranging from 3 to 23 years.