7. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases certain of its vehicles, equipment and distribution facilities from various third parties with non-cancelable operating leases with various terms. Certain leases contain renewal. Future minimum payments, by year, and in the aggregate, under these leases with initial terms of one year or more consisted of the following at December 31, 2017 (in millions):

	Non-cancelable		Minimum
	Operating		Sublease
	Leases		Income			Net
2018	$	10.9	$	(0.4	)	$	10.5
2019		9.2		(0.4	)		8.8
2020		6.3		(0.2	)		6.1
2021		4.5		(0.1	)		4.4
2022		2.3		—			2.3
Thereafter		3.0		—			3.0
Total minimum lease payments	$	36.2	$	(1.1	)	$	35.1

Operating lease obligations expire in varying amounts through 2031. Rental expense for all operating leases was $14.8 million, $13.6 million and $13.3 million in 2017, 2016 and 2015, respectively. Sublease income was $0.5 million, $0.9 million and $0.9 million in 2017, 2016 and 2015, respectively.

Certain leases also include options to purchase the leased property. Assets recorded under capital leases as of December 31, 2017 and December 31, 2016 were $6.6 million and $5.1 million, respectively. These assets are recorded net of accumulated amortization of $2.3 million and $1.4 million as of December 31, 2017 and December 31, 2016, respectively.

Legal and Environmental Matters

The Company accrues expenses for contingencies when it is probable that an asset has been impaired or a liability has been incurred and management can reasonably estimate the expense. Contingencies for which the Company has made accruals include environmental and other legal matters. It is possible, however, that actual expenses could exceed our accrual by a material amount which could have a material adverse effect on the Company’s future liquidity, financial condition or operating results in the period in which any such additional expenses are incurred or recognized.

Environmental Matters

The Company was previously identified as a potentially responsible party in connection with the cleanup of contamination at a formerly owned property in Montana. On February 18, 2015, the Montana Department of Environmental Quality (the “DEQ”) issued an amendment to the unilateral administrative order of the DEQ outlining the final remediation of the property in its Record of Decision (the “ROD”). In September 2015, the remedial action work plan (“RAWP”) was approved.

In 2017, the Company paid $5.1 million implementing the RAWP. After a review of the remaining estimate of costs to complete the remediation, the Company recorded a charge of $1.5 million in the fourth quarter of 2017, which was reflected in discontinued operations. The Company estimates the total remaining cost of implementing the RAWP to be $3.5 million at December 31, 2017. The Company believes the accrual represents a reasonable best estimate of the total remaining remediation costs, based on facts, circumstances, and information currently available. However, there are currently unknown variables relating to the actual levels of contaminants and amounts of soil that will ultimately require treatment or removal and as part of the remediation process, additional soil and groundwater sampling, and bench and pilot testing is required to ensure the remediation will achieve the projected outcome required by the DEQ. The ultimate final amount of remediation costs and expenditures are difficult to estimate with certainty and as a result, the amount of actual costs and expenses ultimately incurred by the Company with respect to this property could be lower than, or exceed the amount accrued as of December 31, 2017 by a material amount. If actual costs are materially higher, the incremental expenses over the amount currently accrued could have a material adverse effect on our liquidity, financial condition and operating results.

In addition, some of the Company’s current and former distribution centers are located in areas where environmental contamination may have occurred, and for which the Company, among others, could be held responsible. The Company currently believes that there are no material environmental liabilities at any of its distribution center locations.

Legal Matters

The Company is also involved in litigation in Colorado, Illinois, and Texas filed by PrimeSource Building Products, Inc. (“PrimeSource”) against the Company and eleven of its employees.

The complaints allege, among other things, that certain former employees of PrimeSource have breached their contracts with PrimeSource (including non-competition, non‑interference and non-disclosure covenants) and fiduciary duties to PrimeSource, and that the former employees have misappropriated, and are using, trade secrets of PrimeSource on behalf of the Company. The complaints seek injunctive relief, compensatory damages, and with respect to certain counts, punitive damages.

On July 26, 2017, the Company and certain of the employee defendants filed counterclaims in the Illinois cases alleging, among others things, that PrimeSource has asserted and is maintaining its trade secret misappropriation claims in bad faith, tortiously interfered with the Company’s business relationships, and filed sham litigation and engaged in other exclusionary and predatory conduct in violation of Section 2 of the Sherman Act.

On December 9, 2017, the United Stated District Court of the Northern District of Illinois Eastern Division (the “Court”) ruled the evidence at the hearing failed to show a likelihood of success on the majority of PrimeSource's claims against Huttig and the Court denied PrimeSource’s request to shut down the Huttig-Grip expansion, but granted partial injunctive relief restricting four Huttig employees from working in activities related to the Huttig-Grip expansion and in part enjoining Huttig from selling products to a list of customers that were not pre-existing customers prior to November, 2016, but allows Huttig to sell all products to a list of customers that were pre-existing customers prior to November, 2016. The injunction is currently under review by the Court and could potentially be changed.

While it is not possible at this time to predict with any degree of certainty the ultimate outcome of this litigation, and the Company is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome, the Company believes that PrimeSource’s claims lack merit. The Company has retained outside counsel, and is vigorously defending itself against the lawsuits. As of December 31, 2017, the Company incurred approximately $3.3 million in legal fees related to the PrimeSource litigation.