COMMITMENTS AND CONTINGENCIES

Leases

The Company leases a number of its administrative and operations facilities under non-cancellable operating leases expiring at various dates through 2025. In addition, the Company leases certain construction, automotive and computer equipment on a multi-year, monthly or daily basis. Rental expense in the years ended December 31, 2018, 2017 and 2016 was $26.2 million, $26.7 million and $23.8 million, respectively.

At December 31, 2018, the future minimum lease payments required under the non-cancellable operating leases were as follows (in thousands):



Year	Minimum Lease Payments
2019	$	19,843
2020	15,055
2021	11,492
2022	8,111
2023	5,365
Thereafter	7,203
Total	$	67,069

Litigation

In December 2016, the Company settled two lawsuits related to the December 2012 departure of several key leaders in sales and operations for the Tyfo^® technology, which is part of the Infrastructure Solutions platform. Under the settlement, Aegion will receive $6.6 million over four years; and accordingly, recorded the gain to “Gain on litigation settlement” in the Consolidated Statement of Operations. The initial $3.6 million cash payment was received in December 2016, with the remainder to be paid in $750,000 annual installments over the following four years. At December 31, 2018, $750,000 was recorded to “Prepaid expenses and other current assets” and $1.5 million was recorded to “Other assets” in the Consolidated Balance Sheet.

The Company is involved in certain litigation incidental to the conduct of its business and affairs. Management, after consultation with legal counsel, does not believe that the outcome of any such litigation, individually or in the aggregate, will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Contingencies

In connection with the Brinderson acquisition, certain pre-acquisition matters were identified in 2014 whereby a loss is both probable and reasonably estimable. The Company establishes liabilities in accordance with FASB ASC Subtopic No. 450-20, Contingencies - Loss Contingencies, and accordingly, recorded an accrual related to various legal, tax, employee benefits and employment matters. At December 31, 2016, the accrual relating to these matters was $6.0 million. During 2017, the Company made a $0.3 million payment related to one of the above matters. Additionally, the Company reassessed its reserve during 2017 for: (i) the lapse of certain payroll tax statutory limitation periods; and (ii) further developments in the legal status of these matters, including the preliminary settlement through mediated resolution of several matters. Following consultation with internal and third-party legal and tax counsel, the Company lowered its accrual for such matters by $1.5 million during 2017. The accrual adjustments resulted in an offset to “Operating expense” in the Consolidated Statement of Operations. During 2018, the Company made an additional $0.2 million payment related to one of the above matters. As of December 31, 2018, the remaining accrual relating to these matters was $4.0 million.

Purchase Commitments

The Company had no material purchase commitments at December 31, 2018.

Guarantees

The Company has many contracts that require the Company to indemnify the other party against loss from claims, including claims of patent or trademark infringement or other third party claims for injuries, damages or losses. The Company has agreed to indemnify its surety against losses from third-party claims of subcontractors. The Company has not previously experienced material losses under these provisions and, while there can be no assurances, currently does not anticipate any future material adverse impact on its consolidated financial position, results of operations or cash flows.

The Company regularly reviews its exposure under all its engagements, including performance guarantees by contractual joint ventures and indemnification of its surety. As a result of the most recent review, the Company has determined that the risk of material loss is remote under these arrangements and has not recorded a liability for these risks at December 31, 2018 on its consolidated balance sheet.

Retirement Plans

Approximately 1,100 of our U.S. employees participate in multi-employer retirement plans. Substantially all of the Company’s remaining U.S. employees are eligible to participate in one of the Company’s sponsored defined contribution savings plans, which are qualified plans under the requirements of Section 401(k) of the Internal Revenue Code. Company contributions to the domestic plans were $5.7 million, $6.3 million and $5.5 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Certain foreign subsidiaries maintain various other defined contribution retirement plans. Company contributions to such plans for the years ended December 31, 2018, 2017 and 2016 were $1.1 million, $1.0 million and $0.8 million, respectively.

In connection with the Company’s 2009 acquisition of Corrpro, the Company assumed an obligation associated with a contributory defined benefit pension plan sponsored by a subsidiary of Corrpro located in the United Kingdom. Employees of this Corrpro subsidiary no longer accrue benefits under the plan; however, Corrpro continues to be obligated to fund prior period benefits. Both the pension expense and funding requirements for the years ended December 31, 2018, 2017 and 2016 were immaterial to the Company’s consolidated financial position and results of operations. The benefit obligation and plan assets at December 31, 2018 were approximately $7.1 million and $7.9 million, respectively. The Company used a discount rate of 2.8% for the evaluation of the pension liability. The Company recorded an asset associated with the overfunded status of this plan of approximately $0.8 million, which is included in other long-term assets on the consolidated balance sheet. The benefit obligation and plan assets at December 31, 2017 approximated $7.5 million and $9.3 million, respectively. Plan assets consist of investments in equity and debt securities as well as cash, which are primarily Level 2 inputs as defined in Note 13.