18.	Commitments, Guarantees, Indemnifications, and Legal Proceedings

We have financial commitments and obligations that arise in the ordinary course of our business. These include long-term debt (discussed in Note 9, Debt), capital commitments, lease obligations, purchase commitments for goods and services, and legal proceedings (discussed below).

Capital Commitments

The Company had capital commitments of approximately $281.3 million and $94.7 million as of December 31, 2017 and 2016, respectively, in connection with the expansion and replacement of existing facilities and equipment.

Lease Obligations

PCA leases space for certain of its facilities, cutting rights to approximately 75,000 acres of timberland, land for a fiber farm, and equipment, primarily vehicles and rolling stock. Remaining lease terms average 14 years and may contain renewal options or escalation clauses. Substantially all lease agreements have fixed payment terms based on the passage of time. Some lease agreements provide us with the option to purchase the leased property. Additionally, some agreements contain renewal options averaging approximately six years. Some leases may require the Company to pay executory costs, which may include property taxes, maintenance and insurance. The minimum lease payments under non-cancelable operating leases with lease terms in excess of one year were as follows (dollars in millions):

2018	$	63.8
2019		54.0
2020		41.1
2021		29.6
2022		19.1
Thereafter		56.2
Total	$	263.8

Total lease expense, including base rent on all leases and executory costs, such as insurance, taxes, and maintenance, for the years ended December 31, 2017, 2016, and 2015, was $100.6 million, $88.3 million and $87.9 million, respectively. These costs are included in “Cost of sales” and “Selling, general, and administrative expenses” in our Consolidated Statements of Income. We had no sublease rental income for the year ended December 31, 2017 and an insignificant amount of sublease rental income in the years ended December 31, 2016 and 2015.

PCA was obligated under capital leases covering buildings and machinery and equipment in the amount of $20.3 million and $21.6 million at December 31, 2017 and 2016, respectively. Assets held under capital lease obligations were included in property, plant, and equipment as follows (dollars in millions):

	Year Ended December 31
	2017			2016
Buildings	$	0.3		$	0.3
Machinery and equipment		28.5			28.5
Total		28.8			28.8
Less accumulated amortization		(15.2	)		(13.7	)
Total	$	13.6		$	15.1

Amortization of assets under capital lease obligations is included in depreciation expense.

The future minimum payments under capitalized leases at December 31, 2017 were as follows (dollars in millions):

2018	$	2.7
2019		2.7
2020		2.7
2021		2.7
2022		2.7
Thereafter		15.0
Total minimum capital lease payments		28.5
Less amounts representing interest		(8.2	)
Present value of net minimum capital lease payments		20.3
Less current maturities of capital lease obligations		(1.3	)
Total long-term capital lease obligations	$	19.0

Interest expense related to capital lease obligations for the years ended December 31, 2017, 2016, and 2015 was $1.4 million, $1.5 million, and $1.6 million, respectively.

Purchase Commitments

In the table below, we set forth our enforceable and legally binding purchase obligations as of December 31, 2017. Some of the amounts are based on management's estimates and assumptions about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties, and other factors. Because these estimates and assumptions are necessarily subjective, our actual payments may vary from those reflected in the table. Purchase orders made in the ordinary course of business are excluded below. Any amounts for which we are liable under purchase orders are reflected on the Consolidated Balance Sheets as accounts payable and accrued liabilities. These obligations relate to various purchase agreements for items such as minimum amounts of energy and fiber purchases over periods ranging from one year to 22 years. Total purchase commitments were as follows (dollars in millions):

2018	$	79.8
2019		54.4
2020		45.6
2021		43.0
2022		42.5
Thereafter		159.0
Total	$	424.3

The Company purchased a total of $339.1 million, $362.0 million, and $299.6 million during the years ended December 31, 2017, 2016, and 2015, respectively, under these purchase agreements.

Environmental Liabilities

The potential costs for various environmental matters are uncertain due to such factors as the unknown magnitude of possible cleanup costs, the complexity and evolving nature of governmental laws and regulations and their interpretations, and the timing, varying costs and effectiveness of alternative cleanup technologies. From 2006 through 2017, there were no significant environmental remediation costs at PCA's mills and corrugated plants. At December 31, 2017, the Company had $31.5 million of environmental-related reserves recorded on its Consolidated Balance Sheet. Of the $31.5 million, approximately $24.0 million related to environmental-related asset retirement obligations discussed in Note 11, Asset Retirement Obligations, and $7.5 million related to our estimate of other environmental contingencies. The Company recorded $4.0 million in “Accrued liabilities” and $27.5 million in “Other long-term liabilities” on the Consolidated Balance Sheet. Liabilities recorded for environmental contingencies are estimates of the probable costs based upon available information and assumptions. Because of these uncertainties, PCA’s estimates may change. The Company believes that it is not reasonably possible that future environmental expenditures for remediation costs and asset retirement obligations above the $31.5 million accrued as of December 31, 2017, will have a material impact on its financial condition, results of operations, or cash flows.

Guarantees and Indemnifications

We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At December 31, 2017, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time.

DeRidder Mill Incident

On February 8, 2017, a tank located in the pulp mill at the Company's DeRidder, Louisiana facility exploded, resulting in three contractor fatalities and other injuries. The Company has been served with multiple lawsuits and is on notice of additional claims. The Company maintains liability insurance subject to a $1.0 million deductible; however, the incident remains under investigation and the lawsuits are in the early stages. Accordingly, the Company is unable to estimate a range of reasonable possible losses at this time.

The Company has also incurred property damage and business interruption losses and has claimed these losses, subject to a $5.0 million deductible, under its property damage and business interruption insurance policy. As of December 31, 2017, the Company finalized the claim with the insurance carrier for $17.0 million, net of the deductible, which was recorded in “Other expense, net.” Payment for the receivable was received in January 2018.

The Company is cooperating with investigations from the U.S. Occupational Health and Safety Administration, the U.S. Chemical Safety Board and the Environmental Protection Agency relating to the incident.

Legal proceedings

We are also a party to various legal actions arising in the ordinary course of our business. These legal actions include commercial liability claims, premises liability claims, and employment-related claims, among others. As of the date of this filing, we believe it is not reasonably possible that any of the legal actions against us will, either individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows.