Commitments and Contingencies	9 Months Ended
Sep. 30, 2018
Commitments and Contingencies.
Commitments and Contingencies	Note 17—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 nine months ended September 30, 2018 was $15.7 million and $32.4 million, respectively, compared to $6.8 million and $18.8 million, respectively, for the same periods in 2017. Total lease expense associated with operating leases acquired in the Willbros acquisition for the three months ended September 30, 2018 and from the acquisition date of June 1, 2018 to September 30, 2018 was approximately $7.7 million and $10.5 million, respectively. 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. We paid the remaining $4.3 million liability in the third quarter of 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 nine months ended September 30, 2018, we increased our forecasted remediation costs based on bids received by the NTTA from third-party contractors, and increased our liability by $3.8 million. We also spent $0.5 million for remediation during the nine months ended September 30, 2018. 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 September 30, 2018, the remaining accrual balance was $18.5 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 a receivable of $32.9 million with a reserve of approximately $17.9 million included in “Contract liabilities” at December 31, 2017. During the second quarter of 2018, we reached a partial settlement and received a payment on the receivable balance of $12.0 million. As of September 30, 2018, our receivable was $20.9 million and our reserve was $11.6 million. In addition, we reflected another partial settlement of $9.0 million during the third quarter of 2018, which resulted in gross profit of $6.2 million for the three and nine months ended September 30, 2018. The $9.0 million payment was received subsequent to September 30, 2018, which reduced our receivable balance to $11.9 million, and is fully reserved in “Contract liabilities”. 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 remaining surety who has provided lien and stop payment release bonds for the total amount owed. A trial date has been tentatively set for November 26, 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 — During the fourth quarter of 2014, the staff of the SEC began inquiring about certain percentage-of-completion contract revenue recognition practices of the Company during 2013 and 2014. Since that time, we cooperated and responded to the staff’s inquiries in connection with this matter. We settled this matter and the inquiry was closed during the third quarter of 2018. Litigation matters from 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. 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. Bonding — At September 30, 2018 and December 31, 2017, the Company had bid and completion bonds issued and outstanding totaling approximately $508.5 million and $705.7 million, respectively.

Note 17—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 nine months ended September 30, 2018 was $15.7 million and $32.4 million, respectively, compared to $6.8 million and $18.8 million, respectively, for the same periods in 2017. Total lease expense associated with operating leases acquired in the Willbros acquisition for the three months ended September 30, 2018 and from the acquisition date of June 1, 2018 to September 30, 2018 was approximately $7.7 million and $10.5 million, respectively.

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. We paid the remaining $4.3 million liability in the third quarter of 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 nine months ended September 30, 2018, we increased our forecasted remediation costs based on bids received by the NTTA from third-party contractors, and increased our liability by $3.8 million. We also spent $0.5 million for remediation during the nine months ended September 30, 2018. 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 September 30, 2018, the remaining accrual balance was $18.5 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 a receivable of $32.9 million with a reserve of approximately $17.9 million included in “Contract liabilities” at December 31, 2017. During the second quarter of 2018, we reached a partial settlement and received a payment on the receivable balance of $12.0 million. As of September 30, 2018, our receivable was $20.9 million and our reserve was $11.6 million. In addition, we reflected another partial settlement of $9.0 million during the third quarter of 2018, which resulted in gross profit of $6.2 million for the three and nine months ended September 30, 2018. The $9.0 million payment was received subsequent to September 30, 2018, which reduced our receivable balance to $11.9 million, and is fully reserved in “Contract liabilities”. 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 remaining surety who has provided lien and stop payment release bonds for the total amount owed. A trial date has been tentatively set for November 26, 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 — During the fourth quarter of 2014, the staff of the SEC began inquiring about certain percentage-of-completion contract revenue recognition practices of the Company during 2013 and 2014. Since that time, we cooperated and responded to the staff’s inquiries in connection with this matter. We settled this matter and the inquiry was closed during the third quarter of 2018.

Litigation matters from 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. 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.

Bonding — At September 30, 2018 and December 31, 2017, the Company had bid and completion bonds issued and outstanding totaling approximately $508.5 million and $705.7 million, respectively.