Commitments and Contingencies

12 Months Ended

Jun. 30, 2017

Commitments And Contingencies [Abstract]

(13) COMMITMENTS AND CONTINGENCIES

Capital Leases

Future contractual payments under the terms of the Company’s capital lease obligations were as follows:


Year Ended June 30,
	(in millions)
2018	$	9.8
2019		8.6
2020		7.7
2021		8.0
2022		8.5
Thereafter		74.4
Total minimum lease payments		117.0
Less amounts representing interest		(15.4)
Less current portion		(8.0)
Capital lease obligations, non-current	$	93.6

Operating Leases

The Company leases office space, warehouse space, network assets, switching and transport sites, points of presence and equipment under non-cancelable operating leases. Lease expense was $68.8 million, $53.1 million and $52.3. million for the years ended June 30, 2017, 2016 and 2015, respectively. Additionally, the Company recognized expense related to right-of way, pole attachment and other fees for access of $65.1 million, $48.9 million, and $42.0 million for the years ended June 30, 2017, 2016 and 2015, respectively.

For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases. When the straight-line expense recorded exceeds the cash outflows during the respective period, the Company records a deferred lease obligation on the consolidated balance sheets and amortizes the deferred rent over the terms of the respective leases.

Minimum contractual lease payments due under the Company’s long-term operating leases are as follows:


Year Ended June 30,
	(in millions)
2018	$	113.4
2019		104.3
2020		88.0
2021		66.0
2022		34.9
Thereafter		138.4
	$	545.0

Purchase Commitments

At June 30, 2017, the Company was contractually committed for $379.6 million of capital expenditures for construction materials and purchases of property and equipment, as well as energy and network expenditures. A majority of these purchase commitments are expected to be satisfied in the next twelve months. These purchase commitments are primarily success based; that is, the Company has executed customer contracts that support the future expenditures.

Outstanding Letters of Credit

As of June 30, 2017, the Company had $7.8 million in outstanding letters of credit, which were primarily entered into in connection with various lease agreements. Additionally, as of June 30, 2017, Zayo Canada, Inc., a subsidiary of the Company, had CAD $3.4 million (or $2.6 million) in letters of credit, under a CAD $5.0 million (or $3.9 million) unsecured credit letter agreement.

Contingencies

In the normal course of business, the Company is party to various outstanding legal proceedings, asserted and unasserted claims, and carrier disputes. In the opinion of management, the ultimate disposition of these matters, both asserted and unasserted, will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.