Commitments and Contingencies	6 Months Ended
Jun. 30, 2018
Commitments and Contingencies.
Commitments and Contingencies	Note 16—Commitments and Contingencies Leases — We lease certain property and equipment under non-cancellable operating leases, which expire at various dates through 2023. The leases require us to pay all taxes, insurance, maintenance and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”. Total lease expense during the three and six months ended June 30, 2018 was $9.9 million and $16.7 million, respectively, compared to $5.9 million and $12.0 million, respectively, for the same periods in 2017. Total lease expense associated with operating leases acquired in the Willbros acquisition from the acquisition date of June 1, 2018 to June 30, 2018 was approximately $2.6 million. Withdrawal liability for multiemployer pension plan — In November 2011, members of the Pipe Line Contractors Association (“PLCA”), including ARB, Rockford and Q3C (prior to our acquisition in 2012), withdrew from the Central States, Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”) in order to mitigate additional liability in connection with the significantly underfunded Plan. During the first quarter of 2016, we received a final payment schedule for our withdrawal liability. Based on this schedule, the liability recorded at June 30, 2018 was $4.3 million, which is included in Accrued liabilities on the Condensed Consolidated Balance Sheets. We expect to pay the remaining liability balance during 2018, and have no plans to withdraw from any other labor agreements. NTTA settlement — On February 7, 2012, we were sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”). On February 25, 2015 the Lawsuit was settled, and we recorded a liability for $17.0 million. A second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million. We will use our settlement obligation to pay for a third-party contractor approved by the NTTA. In the event that the total remediation costs exceed the $22.4 million, the second defendant would pay 20% of the excess amount and we would pay for 80% of the excess amount. During the six months ended June 30, 2018, we increased our liability by $0.3 million and spent $0.4 million for remediation. While we continue to monitor the progress toward remediation and the total remediation costs, at this time we cannot determine the eventual remediation cost. At June 30, 2018, the remaining accrual balance was $15.1 million. Legal proceedings — We have been engaged in a dispute resolution to collect money we believe we are owed for a construction project completed in 2014. Because of uncertainties associated with the project, including uncertainty of the amounts that would be collected, we used a zero profit margin approach to recording revenue during the construction period for the project. For the project, a cost reimbursable contract, we had recorded a receivable of $32.9 million with a reserve of approximately $18.1 million included in “Contract liabilities”. During the second quarter of 2018, we received a partial payment on the receivable balance of $12.0 million, reducing our receivable balance to $20.9 million. At this time, we cannot predict the amount that we will collect nor the timing of any collection. The dispute resolution for the receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court. We have initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. A trial date has been tentatively set for the fourth quarter of 2018. We are subject to other claims and legal proceedings arising out of our business. We provide for costs related to contingencies when a loss from such claims is probable and the amount is reasonably estimable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, we review and evaluate our litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on our consolidated results of operations, financial condition or cash flow. SEC Inquiry — We have been cooperating with an inquiry by the staff of the SEC, which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during 2013 and 2014. We are continuing to respond to the staff’s inquiries in connection with this matter. We currently expect this matter to be resolved during 2018. Litigation matters related to the acquisition of Willbros — In the fourth quarter of 2014, Willbros announced a restatement of its Condensed Consolidated Financial Statements for the March 2014 and June 2014 quarters. On October 28, 2014, a complaint was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of purchasers of Willbros’ stock and alleging damages on their behalf arising from the matters that led to the restatement. On February 16, 2018, Willbros reached an agreement in principle, which, if approved by the Court, would settle all claims against the defendants and be fully funded by Willbros’ insurance carriers. On April 17, 2018, the Court signed an Order Preliminarily Approving Settlement and Providing Notice, preliminarily approving the settlement. On August 2, 2018, at a hearing to determine whether the parties’ settlement was fair, reasonable and adequate to the Settlement Class Members, the Court approved the settlement and entered the Order on August 3, 2018. In addition, two shareholder derivative lawsuits were filed purportedly on behalf of Willbros in connection with the restatement. One of the lawsuits was voluntarily dismissed by the plaintiff on April 23, 2015. On October 24, 2016, the Court dismissed the second lawsuit with prejudice. Plaintiffs’ motion for reconsideration was denied on December 21, 2016. Plaintiffs filed a Notice of Appeal on January 20, 2017. The appeal is assigned to the 14th Court of Appeals, Houston, Texas; the court heard oral argument in the appeal on January 30, 2018 but it has not yet issued an opinion. We believe that any judgement would be fully funded by Willbros insurance carriers. On April 11, 2018, Willbros submitted for review to the SEC a preliminary proxy concerning the pending merger with Primoris. On April 24, 2018, a securities class action suit was filed by a purported stockholder in the United States District Court for the Southern District of Texas seeking injunctive relief with regards to the pending merger. The suit, Karl Graulich v. Willbros Group Inc. [sic], et al., Case 4:18-cv-01286, named as defendants Willbros and its directors. The complaint was voluntarily dismissed by the plaintiff on May 9, 2018. Bonding — At June 30, 2018 and December 31, 2017, the Company had bid and completion bonds issued and outstanding totaling approximately $568.2 million and $705.7 million, respectively.

Note 16—Commitments and Contingencies

Leases — We lease certain property and equipment under non-cancellable operating leases, which expire at various dates through 2023. The leases require us to pay all taxes, insurance, maintenance and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”.

Total lease expense during the three and six months ended June 30, 2018 was $9.9 million and $16.7 million, respectively, compared to $5.9 million and $12.0 million, respectively, for the same periods in 2017. Total lease expense associated with operating leases acquired in the Willbros acquisition from the acquisition date of June 1, 2018 to June 30, 2018 was approximately $2.6 million.

Withdrawal liability for multiemployer pension plan — In November 2011, members of the Pipe Line Contractors Association (“PLCA”), including ARB, Rockford and Q3C (prior to our acquisition in 2012), withdrew from the Central States, Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”) in order to mitigate additional liability in connection with the significantly underfunded Plan. During the first quarter of 2016, we received a final payment schedule for our withdrawal liability. Based on this schedule, the liability recorded at June 30, 2018 was $4.3 million, which is included in Accrued liabilities on the Condensed Consolidated Balance Sheets. We expect to pay the remaining liability balance during 2018, and have no plans to withdraw from any other labor agreements.

NTTA settlement — On February 7, 2012, we were sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”). On February 25, 2015 the Lawsuit was settled, and we recorded a liability for $17.0 million. A second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million. We will use our settlement obligation to pay for a third-party contractor approved by the NTTA. In the event that the total remediation costs exceed the $22.4 million, the second defendant would pay 20% of the excess amount and we would pay for 80% of the excess amount. During the six months ended June 30, 2018, we increased our liability by $0.3 million and spent $0.4 million for remediation. While we continue to monitor the progress toward remediation and the total remediation costs, at this time we cannot determine the eventual remediation cost. At June 30, 2018, the remaining accrual balance was $15.1 million.

Legal proceedings — We have been engaged in a dispute resolution to collect money we believe we are owed for a construction project completed in 2014. Because of uncertainties associated with the project, including uncertainty of the amounts that would be collected, we used a zero profit margin approach to recording revenue during the construction period for the project. For the project, a cost reimbursable contract, we had recorded a receivable of $32.9 million with a reserve of approximately $18.1 million included in “Contract liabilities”. During the second quarter of 2018, we received a partial payment on the receivable balance of $12.0 million, reducing our receivable balance to $20.9 million. At this time, we cannot predict the amount that we will collect nor the timing of any collection. The dispute resolution for the receivable initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court. We have initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. A trial date has been tentatively set for the fourth quarter of 2018.

We are subject to other claims and legal proceedings arising out of our business. We provide for costs related to contingencies when a loss from such claims is probable and the amount is reasonably estimable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, we review and evaluate our litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss.

Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on our consolidated results of operations, financial condition or cash flow.

SEC Inquiry — We have been cooperating with an inquiry by the staff of the SEC, which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during 2013 and 2014. We are continuing to respond to the staff’s inquiries in connection with this matter. We currently expect this matter to be resolved during 2018.

Litigation matters related to the acquisition of Willbros — In the fourth quarter of 2014, Willbros announced a restatement of its Condensed Consolidated Financial Statements for the March 2014 and June 2014 quarters. On October 28, 2014, a complaint was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of purchasers of Willbros’ stock and alleging damages on their behalf arising from the matters that led to the restatement. On February 16, 2018, Willbros reached an agreement in principle, which, if approved by the Court, would settle all claims against the defendants and be fully funded by Willbros’ insurance carriers. On April 17, 2018, the Court signed an Order Preliminarily Approving Settlement and Providing Notice, preliminarily approving the settlement. On August 2, 2018, at a hearing to determine whether the parties’ settlement was fair, reasonable and adequate to the Settlement Class Members, the Court approved the settlement and entered the Order on August 3, 2018.

In addition, two shareholder derivative lawsuits were filed purportedly on behalf of Willbros in connection with the restatement. One of the lawsuits was voluntarily dismissed by the plaintiff on April 23, 2015. On October 24, 2016, the Court dismissed the second lawsuit with prejudice. Plaintiffs’ motion for reconsideration was denied on December 21, 2016. Plaintiffs filed a Notice of Appeal on January 20, 2017. The appeal is assigned to the 14th Court of Appeals, Houston, Texas; the court heard oral argument in the appeal on January 30, 2018 but it has not yet issued an opinion. We believe that any judgement would be fully funded by Willbros insurance carriers.

On April 11, 2018, Willbros submitted for review to the SEC a preliminary proxy concerning the pending merger with Primoris. On April 24, 2018, a securities class action suit was filed by a purported stockholder in the United States District Court for the Southern District of Texas seeking injunctive relief with regards to the pending merger. The suit, Karl Graulich v. Willbros Group Inc. [sic], et al., Case 4:18-cv-01286, named as defendants Willbros and its directors. The complaint was voluntarily dismissed by the plaintiff on May 9, 2018.

Bonding — At June 30, 2018 and December 31, 2017, the Company had bid and completion bonds issued and outstanding totaling approximately $568.2 million and $705.7 million, respectively.