COMMITMENTS AND CONTINGENCIES

Commitments

We lease land, buildings and equipment under various leases. The leases frequently include renewal options and escalation clauses and require us to pay for utilities, taxes, insurance and maintenance expenses.

Future minimum payments, by year and in the aggregate, under capital leases, non-cancelable operating leases and related subleases with initial terms of more than one year at December 31, 2018, were as follows (in thousands):



	Capital Leases			Operating Leases		Sublease Income
2019	$	2,075		$	55,789	$	471
2020	1,365			46,817		321
2021	664			39,094		193
2022	297			30,975		97
2023	—			24,971		5
Thereafter	—			72,450		—
Total minimum lease payments	4,401			$	270,096	$	1,087
Amounts representing interest	(188		)
Present value of net minimum lease payments	$	4,213

Rent expense for operating leases and other rental items, including short-term equipment rentals charged to cost of sales, for the years ended December 31, 2018, 2017 and 2016 was approximately $191.8 million, $166.5 million and $149.0 million, respectively. Rent expense for each of the years ended December 31, 2018, 2017 and 2016 was reported net of sublease rental income of approximately $0.6 million.

Contractual Guarantees

We have agreements with our executive officers and certain other key management personnel providing for severance benefits for such employees upon termination of their employment under certain circumstances.

In the ordinary course of business, we, at times, guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.

The terms of our construction contracts frequently require that we obtain from surety companies (“Surety Companies”) and provide to our customers payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety Bonds secure our payment and performance obligations under such contracts, and we have agreed to indemnify the Surety Companies for amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. In addition, at the request of labor unions representing certain of our employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts and, accordingly, our bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2018, based on our percentage-of-completion of our projects covered by Surety Bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $1.1 billion. Surety Bonds are issued by Surety Companies in return for premiums, which vary depending on the size and type of bond.

We are subject to regulation with respect to the handling of certain materials used in construction, which are classified as hazardous or toxic by federal, state and local agencies. Our practice is to avoid participation in projects principally involving the remediation or removal of such materials. However, when remediation is required as part of our contract performance, we believe we comply with all applicable regulations governing the discharge of material into the environment or otherwise relating to the protection of the environment.

At December 31, 2018, we employed approximately 33,000 people, approximately 57% of whom are represented by various unions pursuant to approximately 400 collective bargaining agreements between our individual subsidiaries and local unions. We believe that our employee relations are generally good. Only two of these collective bargaining agreements are national or regional in scope.

Restructuring expenses, primarily related to employee severance obligations, were $2.3 million, $1.6 million and $1.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, 2017 and 2016, the balance of our restructuring related obligations yet to be paid was $1.6 million, $0.5 million and $0.2 million, respectively. The majority of obligations outstanding as of December 31, 2017 and 2016 were paid during 2018 and 2017, respectively. The majority of obligations outstanding as of December 31, 2018 will be paid throughout 2019. No material expenses in connection with restructuring from continuing operations are expected to be incurred during 2019.

The changes in restructuring activity by reportable segments during the years ended December 31, 2018 and 2017 were as follows (in thousands):



	United States electrical construction and facilities services segment			United States mechanical construction and facilities services segment			United States building services segment			Corporate administration		Total
Balance at December 31, 2016	$	—		$	188		$	13		$	—	$	201
Charges	452			180			945			—		1,577
Payments	—			(368		)	(918		)	—		(1,286		)
Balance at December 31, 2017	452			—			40			—		492
Charges	—			—			882			1,424		2,306
Payments	(422		)	—			(746		)	—		(1,168		)
Balance at December 31, 2018	$	30		$	—		$	176		$	1,424	$	1,630

A summary of restructuring expenses by reportable segments recognized for the year ended December 31, 2018 was as follows (in thousands):



	United States building services segment		Corporate Administration		Total
Severance	$	882	$	1,424	$	2,306

Government Contracts

As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, fines, penalties and compensatory and treble damages, and possible suspension or debarment from doing business with the government. Based on currently available information, we believe the outcome of ongoing government disputes and investigations will not have a material impact on our financial position, results of operations or liquidity.

Legal Matters

One of our subsidiaries was a subcontractor to a mechanical contractor (“Mechanical Contractor”) on a construction project where an explosion occurred in 2010. The Mechanical Contractor asserted claims, in the context of an arbitration proceeding against our subsidiary, alleging that our subsidiary was responsible for a portion of the damages for which the Mechanical Contractor may be liable as a result of: (a) personal injury suffered by individuals as a result of the explosion and (b) the Mechanical Contractor’s legal fees and associated management costs in defending against any and all such claims. The general contractor (as assignee of the Mechanical Contractor) on the construction project, and for whom the Mechanical Contractor worked, had alleged that our subsidiary was responsible for losses asserted by the owner of the project and/or the general contractor because of delays in completion of the project and for damages to the owner’s property. On January 4, 2019, a final decision was issued by the arbitrator in favor of our subsidiary. The decision denied all claims asserted against our subsidiary in that arbitration.

We are involved in several other proceedings in which damages and claims have been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. Other potential claims may exist that have not yet been asserted against us. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations or liquidity. Litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance. It is possible that some litigation matters for which liabilities have not been recorded could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial position, results of operations or liquidity.