NOTE

—COMMITMENTS

AND CONTINGENCIES

Litigation and Claims

The Company is involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause it to incur costs, including, but not limited to, attorneys

’ fees, the Company currently believes that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows.

Road Home Contract

June

10,

2016,

the Office of Community Development (the “OCD”) of the State of Louisiana filed a written administrative demand with the Louisiana Commissioner of Administration against ICF Emergency Management Services, L.L.C. (“ICF Emergency”), a subsidiary of the Company, in connection with ICF Emergency’s administration of the Road Home Program (the “Program”). The Program contract was a

three

-year,

$912

million contract awarded to the Company in

2006

and that ended, as scheduled, in

2009.

The Program was primarily intended to help homeowners and landlords of small rental properties affected by Hurricanes Rita and Katrina. In its administrative demand, the OCD sought approximately

$200.8

million in alleged overpayments to Program grant recipients. The State separately supplemented the amount of recovery it is seeking in total approximately

$214.3

million. The State of Louisiana, through the Division of Administration, also filed suit in Louisiana state court on

June

10,

2016

broadly alleging and seeking recoupment for the same claim made in the administrative proceeding submission before the Louisiana Commissioner of Administration. On

September

21,

2016,

the Commissioner of the Division of Administration notified OCD and the Company of his decision to defer jurisdiction of the administrative demand filed by the OCD. In so doing, the Commissioner declined to reach a decision on the merits, stated that his deferral would not be deemed to grant or deny any portion of the OCD’s claim, and authorized the parties to proceed on the matter in the previously filed judicial proceeding. The Company continues to believe that this claim has no merit, intends to vigorously defend its position, and has therefore not recorded a liability as of

December

31,

2016.

Operating Leases

March

2010,

the Company entered into a new lease that replaced its prior headquarters lease, which was due to expire in

October

2012.

The new lease was initially for approximately

258,000

square feet, with approximately

72,000

square feet of additional space subsequently added. The lease commenced on

April

2010,

and will expire on

December

31,

2022.

Base rent under the agreement is approximately

$0.9

million per month with annual escalations fixed at

2.5%

per year, yielding a total lease commitment of approximately

$150.6

million over the

twelve

-year term of the lease.

The Company has entered into various other operating leases for equipment and office space. Certain facility leases

may

contain fixed escalation clauses, certain facility leases require the Company to pay operating expenses in addition to base rental amounts, and

nine

leases require the Company to maintain letters of credit. Future minimum rental payments under all non-cancelable operating leases are as follows:

Year ending December 31,
2017	$	37,308
2018		35,591
2019		33,278
2020		30,603
2021		29,688
Thereafter		52,284
Total	$	218,752

Minimum

lease payments have been reduced by minimum sublease rentals of

$0.1

million due in the future under non-cancelable subleases.

Rent expense is recognized on a straight-line basis over the lease term

, net of sublease payments. Rent expense consists of the following for the years ended

December

31:

	2016			2015			2014
Rent	$	39.5		$	40.0		$	35.8
Sublease income		(0.1	)		(0.1	)		(0.1	)
Total rent expense	$	39.4		$	39.9		$	35.7