LEASES

The Company leases many service center and distribution center facilities, vehicles and equipment under non-cancelable lease agreements accounted for as operating leases. The minimum annual rental commitments under non-cancelable operating leases as of June 30, 2017 are as follows:



During Fiscal Years
2018	$	29,000
2019	22,700
2020	15,300
2021	8,200
2022	5,300
Thereafter	14,600
Total minimum lease payments	$	95,100

Rental expense incurred for operating leases, principally from leases for real property, vehicles and computer equipment was $35,900 in 2017, $37,300 in 2016 and $39,300 in 2015, and was classified within selling, distribution and administrative expenses on the statements of consolidated income.

The Company maintains lease agreements for many of the operating facilities of businesses it acquires from previous owners. In many cases, the previous owners of the business acquired become employees of Applied and occupy management positions within those businesses. The payments under lease agreements of this nature totaled $2,400, $3,800, $3,100 and in fiscal 2017, 2016 and 2015, respectively.