Live Nation Entertainment Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LEASES

LEASES

12 Months Ended

Dec. 31, 2020

The significant components of operating lease expense are as follows:


	Year Ended December 31, 2020		Year Ended December 31, 2019
	(in thousands)
Operating lease cost	$	241,819	$	201,344
Variable and short-term lease cost	35,202		133,526
Sublease income	(13,270)		(17,235)
Net lease cost	$	263,751	$	317,635

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. In response to the global COVID-19 pandemic, we closed our venues in mid-March 2020 and the majority of those venues have remained closed through December 31, 2020. As a result, our variable and short-term lease cost has declined during the year ended December 31, 2020 as compared to the previous year.

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


	Year Ended December 31, 2020		Year Ended December 31, 2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	203,419	$	183,723
Lease assets obtained in exchange for lease obligations, net of terminations	$	129,174	$	417,394

Future maturities of our operating lease liabilities at December 31, 2020 are as follows:


	(in thousands)
2021	$	192,413
2022	195,983
2023	200,444
2024	183,162
2025	171,708
Thereafter	1,456,969
Total lease payments	2,400,679
Less: Interest	847,858
Present value of lease liabilities	$	1,552,821

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


	Year Ended December 31, 2020		Year Ended December 31, 2019
Weighted average remaining lease term (in years)	13.9		13.9
Weighted average discount rate	6.31	%	5.88	%

As of December 31, 2020, we have additional operating leases that have not yet commenced with total lease payments of $181.0 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from January 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 rather than applying the lease modification guidance as clarified by the FASB.