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

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

6 Months Ended

Jun. 30, 2021

The significant components of operating lease expense are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Operating lease cost	$	56,577	$	58,427	$	111,876	$	120,555
Variable and short-term lease cost	3,543		20,208		12,996		32,730
Sublease income	(1,236)		(4,111)		(3,518)		(8,262)
Net lease cost	$	58,884	$	74,524	$	121,354	$	145,023

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:


	Six Months Ended June 30,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	99,449	$	105,067
Lease assets obtained in exchange for lease obligations, net of terminations	$	41,005	$	98,052

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


	(in thousands)
July 1 - December 31, 2021	$	91,363
2022	204,175
2023	204,889
2024	188,541
2025	176,893
Thereafter	1,503,232
Total lease payments	2,369,093
Less: Interest	826,214
Present value of lease liabilities	$	1,542,879

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


	June 30, 2021		December 31, 2020
Weighted average remaining lease term (in years)	13.7		13.9
Weighted average discount rate	6.39	%	6.31	%

As of June 30, 2021, we have additional operating leases that have not yet commenced, with total lease payments of $175.4 million. These operating leases, which are not included on our consolidated balance sheets, have commencement dates ranging from July 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.