(14) 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)
2019	$	15.4
2020		14.5
2021		14.5
2022		14.6
2023		14.7
Thereafter		130.3
Total minimum lease payments		204.0
Less amounts representing interest		(70.5)
Less current portion		(11.9)
Capital lease obligations, non-current	$	121.6

Operating Leases

The Company leases office space, warehouse space, network assets, switching and transport sites, points of presence, components and equipment under non-cancelable operating leases. Lease expense was $156.4 million, $68.8 million and $53.1 million for the years ended June 30, 2018, 2017 and 2016, respectively. Additionally, the Company recognized expense related to right-of way, pole attachment and other fees for access of $43.4 million, $65.1 million, and $48.9 million for the years ended June 30, 2018, 2017 and 2016, 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)
2019	$	93.7
2020		82.4
2021		66.7
2022		43.6
2023		33.0
Thereafter		114.7
	$	434.1

Obligations for Capital Expenditure

At June 30, 2018, the Company was contractually committed for $509.4 million of capital expenditures for construction materials and purchases of property and equipment. A majority of these obligations are expected to be satisfied in the next twelve months. These obligations are primarily success based; that is, the Company has executed customer contracts that support the future capital expenditures.

Outstanding Letters of Credit

As of June 30, 2018, the Company had $8.1 million in outstanding letters of credit, which were primarily entered into in connection with various lease agreements. Additionally, as of June 30, 2018, 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 $3.8 million) unsecured credit agreement.

Contingencies

In the normal course of business, the Company is party to various outstanding legal proceedings, asserted and unasserted claims, and 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.