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Commitments and Contingencies
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies.  
Commitments and Contingencies

Note 14. Commitments and Contingencies

 

Lease Commitments

 

We lease land, buildings and equipment under non‑cancelable operating leases expiring in various years through 2028. Rent expense for leases that contain scheduled rent increases are recorded on a straight‑line basis. Several of the leases have renewal options providing for additional lease periods. Future minimum payments, by year and in the aggregate, under the non‑cancelable leases with initial or remaining terms of one year or more, consisted of the following as of December 31, 2015:

 

 

 

 

 

Operating

 

Leases

 

(in millions)

2016

$

61.6

2017

 

48.2

2018

 

37.3

2019

 

27.5

2020

 

17.8

Thereafter

 

25.0

 

$

217.4

 

Total rental expense amounted to $80.0 million, $79.3 million and $79.9 million in 2015,  2014 and 2013, respectively.

 

Included in the amounts for operating leases are lease payments to various related parties, who are not executive officers of the Company, in the amounts of $5.2 million, $5.5 million and $4.8 million in 2015,  2014 and 2013, respectively. These related party leases are for buildings leased to certain of the companies we have acquired and expire in various years through 2021.

 

Purchase Commitments

 

As of December 31, 2015, we had commitments to purchase minimum quantities of certain metal products, which we entered into to secure material for corresponding long‑term sales commitments we have entered into with our customers. The total amount of the minimum commitments based on current pricing is estimated at approximately $53.9 million, with amounts in 2016, 2017 and thereafter being $47.5 million, $4.2 million, and $2.2 million, respectively.

 

Collective Bargaining Agreements

 

As of December 31, 2015, approximately 11%,  or 1,580, of our total employees are covered by 41 collective bargaining agreements at 51 of our different locations, which expire at various times over the next five years. Approximately 500 of our employees are covered by 21 different collective bargaining agreements that expire during 2016.

 

Environmental Contingencies

 

We are subject to extensive and changing federal, state, local and foreign laws and regulations designed to protect the environment, including those relating to the use, handling, storage, discharge and disposal of hazardous substances and the remediation of environmental contamination. Our operations use minimal amounts of such substances.

 

We believe we are in material compliance with environmental laws and regulations; however, we are from time to time involved in administrative and judicial proceedings and inquiries relating to environmental matters. Some of our owned or leased properties are located in industrial areas with histories of heavy industrial use. We may incur some environmental liabilities because of the location of these properties. In addition, we are currently involved with certain environmental remediation projects related to activities at former manufacturing operations of EMJ, our wholly owned subsidiary, that were sold many years prior to Reliance’s 2006 acquisition of EMJ. Although the potential cleanup costs could be significant, EMJ had maintained insurance policies during the time it owned the manufacturing operations that have covered costs incurred to date, and are expected to continue to cover the majority of the related costs. We do not expect that these obligations will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

 

Legal Matters

 

In 2014, Reliance and Chapel Steel Corp. (“Chapel”) were defendants in an antitrust lawsuit filed in the United States District Court for the Southern District of Texas brought by two former employees who claimed that Reliance, Chapel and the co-defendants engaged in anticompetitive activities. Following a judgment against all the defendants, Reliance and Chapel settled all claims against them relating to this matter for $23.0 million.

 

From time to time, we are named as a defendant in legal actions. Generally, these actions arise out of our normal course of business. We are not a party to any pending legal proceedings other than routine litigation incidental to the business. We expect that these matters will be resolved without having a material adverse effect on our results of operations or financial condition. We maintain liability insurance against risks arising out of our normal course of business.