Note 8 - Lease Obligations

Capital Leases

MasTec enters into agreements that provide lease financing for machinery and equipment. Leases meeting certain criteria are capitalized, with the related asset recorded in property and equipment and a corresponding amount recorded within the Company’s debt obligations. Capital lease additions are reflected in the consolidated statements of cash flows within the supplemental disclosures of non-cash information. The gross amount of assets held under capital leases as of December 31, 2017 and 2016, which are included within property and equipment, net, totaled $418.0 million and $294.9 million, respectively. Assets held under capital leases, net of accumulated depreciation, totaled $277.3 million and $177.5 million as of December 31, 2017 and 2016, respectively.

Operating Leases

In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its facility, vehicle and equipment needs, including related party leases. See Note 15 - Related Party Transactions. These leases allow the Company to conserve cash and provide flexibility in that the Company pays a monthly rental fee for the use of related facilities, vehicles and equipment rather than purchasing them. The terms of these agreements vary from lease to lease, including some with renewal options and escalation clauses. The Company may decide to cancel or terminate a lease before the end of its term, in which case the Company is typically liable for the remaining lease payments under the term of the lease. For operating leases with purchase options, the option to purchase equipment is at estimated fair market value. Rent and related expense for operating leases that have non-cancelable terms in excess of one year totaled approximately $104.2 million, $100.5 million and $81.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company also incurred rent and related expense for facilities, vehicles and equipment having original terms of one year or less totaling approximately $461.0 million, $298.0 million and $196.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Future Lease Commitments

Future minimum lease commitments under capital leases and non-cancelable operating leases, including escalation clauses in effect as of December 31, 2017, were as follows (in millions):



	Capital Leases			Operating Leases
2018	$	69.5		$	90.7
2019	49.4			57.3
2020	39.4			33.9
2021	29.0			19.2
2022	9.1			12.3
Thereafter	—			30.3
Total minimum lease payments	$	196.4		$	243.7
Less amounts representing interest	(15.2		)
Total capital lease obligations, net of interest	$	181.2
Less current portion	(63.5		)
Long-term portion of capital lease obligations, net of interest	$	117.7