LEASES

Terex has operating and finance leases for real property, vehicles and office and industrial equipment, expiring over terms from 1 to 15 years. Many of the leases held by Terex include options to extend or terminate the lease. The Company currently has no finance leases in its continuing operations.

Real property leases are used for office, administrative and industrial purposes. The base terms of these leases typically expire over a period of 6 years, with options to renew for an additional 70 months. Most of our renewal options are linked to market conditions and Terex cannot estimate how existing renewal options will affect the monthly payments. Residual value guarantees are not material.

The vehicle leases mainly include cars and trucks. Term length for these leases varies between 1 and 7 years.

Office and industrial equipment leases primarily include machinery used for conducting business at office locations and manufacturing sites worldwide. Term length for these leases vary between 1 and 6 years.

Operating Leases

Operating lease cost consists of the following (in millions):



	Three months ended
	March 31, 2019
	Operating Leases
Operating lease costs	$	7.8
Variable lease cost	1.5
Short-term lease cost	1.4
Total operating lease costs	$	10.7

Variable lease costs correspond to future period lease payments which are determined at fair market value at determined points in time. Operating lease obligations consist primarily of commitments to rent real properties.

Supplemental balance sheet information related to leases (in millions, except lease term and discount rate):



	March 31, 2019
Operating lease right-of-use assets	$	121.9

Current maturities of operating leases	$	25.7
Non-current operating leases	106.2
Total operating lease liabilities	$	131.9

Weighted average discount rate for operating leases	5.64		%
Weighted average remaining operating lease term in years	6

Maturities of operating lease liabilities (in millions):



	March 31, 2019
Years Ending December 31,	Operating Leases
2019	$	24.3
2020	28.0
2021	25.0
2022	21.7
2023	18.6
Thereafter	38.4
Total undiscounted operating lease payments	156.0
Less: Imputed interest	(24.1		)
Total operating lease liabilities	131.9
Less: Current Maturities of operating lease liabilities	(25.7		)
Non-current operating lease liabilities	$	106.2

Supplemental cash flow and other information related to operating leases (in millions):



	Three months ended
	March 31, 2019
	Operating Leases
Cash paid for amounts included in the measurement of operating lease liabilities	$	8.2
Operating right-of-use assets obtained in exchange for operating lease liabilities	$	5.7

Disclosures related to periods prior to adoption of the Lease Standard

Future minimum noncancellable operating lease payments at December 31, 2018 are as follows (in millions):



	Operating Leases
2019	$	30.5
2020	25.8
2021	22.9
2022	18.7
2023	16.4
Thereafter	37.0
Total minimum obligations	$	151.3

Most of the Company’s operating leases provide the Company with the option to renew the leases for varying periods after the initial lease terms. These renewal options enable the Company to renew the leases based upon the fair rental values at the date of expiration of the initial lease. Total rental expense under operating leases was $37.5 million in 2018.