Live Nation Entertainment Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

9 Months Ended

Sep. 30, 2021

The significant components of operating lease expense are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Operating lease cost	$	56,662	$	59,923	$	168,538	$	180,478
Variable and short-term lease cost	44,552		10,545		57,548		43,275
Sublease income	(1,346)		(3,682)		(4,864)		(11,944)
Net lease cost	$	99,868	$	66,786	$	221,222	$	211,809

Many of our leases contain contingent rent obligations based on revenue, tickets sold or other variables, while others include periodic adjustments to rent obligations based on the prevailing inflationary index or market rental rates. Contingent rent obligations are not included in the initial measurement of the lease asset or liability and are recorded as rent expense in the period that the contingency is resolved.

Supplemental cash flow information for our operating leases is as follows:


	Nine Months Ended September 30,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	142,243	$	154,471
Lease assets obtained in exchange for lease obligations, net of terminations	$	79,703	$	149,817

Future maturities of our operating lease liabilities at September 30, 2021 are as follows:


	(in thousands)
October 1 - December 31, 2021	$	39,264
2022	207,883
2023	210,108
2024	193,320
2025	181,720
Thereafter	1,543,848
Total lease payments	2,376,143
Less: Interest	816,783
Present value of lease liabilities	$	1,559,360

The weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:


	September 30, 2021		December 31, 2020
Weighted average remaining lease term (in years)	13.5		13.9
Weighted average discount rate	6.36	%	6.31	%

As of September 30, 2021, we have additional operating leases that have not yet commenced, with total lease payments of $266.7 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from October 2021 to June 2030, with lease terms ranging from 1 to 20 years.

In response to the impacts we are experiencing from the global COVID-19 pandemic, we have amended certain of our lease agreements and are continuing negotiations with certain of our landlords for deferral or abatement of fixed rent payments. These lease concessions are not expected to substantially increase our obligations under the respective lease agreements. Therefore, we have elected to account for these lease concessions as though enforceable rights and obligations for those concessions existed in our lease agreements as clarified by the FASB rather than applying the lease modification guidance.