(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)
2020	$	20.1
2021		20.0
2022		20.3
2023		19.9
2024		19.5
Thereafter		171.0
Total minimum lease payments		270.8
Less amounts representing interest		(88.6)
Less current portion		(10.0)
Capital lease obligations, non-current	$	172.2

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 $238.7 million, $156.4 million and $68.8 million for the years ended June 30, 2019, 2018 and 2017, respectively. Additionally, the Company recognized expense related to right-of way, pole attachment and other fees for access of $43.8 million, $43.4 million, and $65.1 million for the years ended June 30, 2019, 2018 and 2017, 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)
2020	$	128.1
2021		107.0
2022		83.7
2023		68.0
2024		55.7
Thereafter		215.8
	$	658.3

Purchase Commitments

At June 30, 2019, the Company was contractually committed for $471.1 million of capital expenditures for construction materials and purchases of property and equipment. A majority of these purchase commitments 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.

During the year ended June 30, 2019, the Company entered into a CAD $127.0 million (or $97.0 million) commitment for telecommunications services over a two year period. As of June 30, 2019, CAD $90.0 million (or $68.8 million) remained on the commitment.

Also, during the year ended June 30, 2019, the Company entered into a CAD $40.0 million (or $30.6 million) commitment for telecommunications services over a three year period. As of June 30, 2019, CAD $25.3 million (or $19.3 million) remained on the commitment.

Outstanding Letters of Credit

As of June 30, 2019, the Company had $8.5 million in outstanding letters of credit, which were primarily entered into in connection with various lease agreements. Additionally, as of June 30, 2019, Zayo Canada, Inc., a subsidiary of the Company, had CAD $3.5 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.

The Company accrues for losses related to contingencies when a loss from such claims is probable and the amount of loss can be reasonably estimated. In determining whether a loss from a claim is probable and the loss can be reasonably estimated, the Company reviews and evaluates its litigation and regulatory matters in light of potentially relevant factual and legal developments. If the Company determines an unfavorable outcome is not probable or the amount of loss cannot be reasonably estimated, the Company does not accrue for a potential litigation loss. In those situations, the Company discloses an estimate or range of the reasonably possible losses, if such estimates can be made. At this time, the Company does not believe that it is possible to estimate the reasonably possible losses or a range of reasonably possible losses related to the matters described below.

Following the filing of the preliminary proxy statement on June 3, 2019, several complaints were filed against the Company and its Board of Directors challenging the Merger. Four actions are pending in the United States District Court for the District of Delaware captioned Scarantino v. Zayo Group Holdings, Inc., et al., Case No. 1:19-cv-01068-RGA (D. Del.), Klein v. Zayo Group Holdings, Inc., et al., Case No. 1:19-cv-01085-RGA (D. Del.), Duggan v. Zayo Group Holdings, Inc., et al., Case No. 1:19-cv-01112-RGA (D. Del.), and Dixon v. Zayo Group Holdings, Inc., et al., Case No. 1:19-cv-01123-RGA (D. Del.); one action is pending in the United States District Court for the District of Colorado captioned Graves v. Zayo Group Holdings, Inc., et al., Case No. 1:19-cv-01747-KLM (D. Colo.); and one action is pending in the District Court of Boulder County, Colorado captioned Saroop v. Zayo Group Holdings, Inc., et al., Case No. 2019CV30601. The complaints generally allege, among other things, that the Company and its directors disseminated an allegedly false and materially misleading proxy statement or that the Company’s Board of Directors breached their fiduciary duties in connection with the merger. The complaints seek, among other things, to enjoin the merger, a declaration that the proxy statement violated federal securities laws, unspecified damages, and an award of attorneys’ and experts’ fees.

The Company believes that each of these complaints are without merit and intend to vigorously defend against them.

Three stockholders also filed complaints in the Delaware Court of Chancery pursuant to 8 Del. C. §220 seeking corporate books and records, captioned Teamsters Local 237 Additional Security Benefit Fund, et al. v. Zayo, C.A. No. 2019-0572-VCMR (July 25, 2019); Massachusetts Laborers' Annuity Fund v. Zayo Group Holdings, Inc., C.A. No. 2019-0573-VCMR; and Waterhouse v. Zayo Group Holdings, Inc., C.A. No. 2019-0589-VCMR (July 31, 2019). The Company intends to vigorously defend against these actions.