If we are unable to adequately address these risks, we could lose our ability to operate in certain international markets and our business, financial condition or results of operations could be materially adversely affected.

The U.S. Departments of Justice, Commerce, Treasury and other agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, the FCPA, and other federal statutes, sanctions and regulations, including those established by the Office of Foreign Assets Control (“OFAC”) and, increasingly, similar or more restrictive foreign laws, rules and regulations. By virtue of these laws and regulations, and under laws and regulations in other jurisdictions, including the European Union and the United Kingdom, we may be obliged to limit our business activities, we may incur costs for compliance programs and we may be subject to enforcement actions or penalties for noncompliance.

In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws and we expect the relevant agencies to continue to increase these activities. A violation of these laws, sanctions or regulations could materially adversely affect our business, financial condition or results of operations.

The Company has compliance policies in place for its employees with respect to FCPA, OFAC, the Bribery Act and similar laws. Our operating subsidiaries also have relevant compliance policies in place for their employees, which are tailored to their operations. However, there can be no assurance that our employees, consultants or agents, or those of our subsidiaries or investees, will not engage in conduct for which we may be held responsible. Violations of the FCPA, the Bribery Act, the rules and regulations established by OFAC and other laws, sanctions or regulations may result in severe criminal or civil penalties, and we may be subject to other liabilities, which could materially adversely affect our business, financial condition or results of operations.

The Sarbanes-Oxley Act of 2002, (the “Sarbanes-Oxley Act”) requires our management to assess the effectiveness of the internal control over financial reporting for the companies we acquire and our external auditor to attest to, and report on the internal control over financial reporting, for these companies. In order to comply with the Sarbanes-Oxley Act, we will need to implement or enhance internal control over financial reporting at acquired companies and evaluate the internal controls. We diddo not conduct a formal evaluation of our acquired the Insurance Companies’companies’ internal control over financial reporting prior to thean acquisition.  The Insurance Companies were subject to Sarbanes-Oxley Act requirements; however, we cannot be certain that the internal controls are effective. We may be required to hire additional staff and incur substantial costs to implement the necessary new internal controls at the Insurance Companies and other companies we acquire. Any failure to implement required internal controls, or difficulties encountered in their implementation, could harm our operating results or increase the risk of material weaknesses in internal controls, which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner.

In pursuing our corporate strategy, we may acquire, or dispose of or exit businesses or reorganize existing investments. The success of this strategy is dependent upon our ability to identify appropriate opportunities, negotiate transactions on favorable terms and ultimately complete such transactions.

We may face delays in completing acquisitions, including in acquiring full ownership of our operating companies. For example, while we intend to complete the short form merger of Schuff,DBMG to acquire 8% of DBMG that we do not already own, the timing of such merger is uncertain and we cannot assure you that we will complete such merger in the near term or at all.

Once we complete acquisitions or reorganizations there can be no assurance that we will realize the anticipated benefits of any transaction, including revenue growth, operational efficiencies or expected synergies. For example, ifIf we fail to recognize some or all of the strategic benefits and synergies expected from a transaction, goodwill and intangible assets may be impaired in future periods. The negotiations associated with the acquisition and disposition of businesses could also disrupt our ongoing business, distract management and employees or increase our expenses.

In addition, we may not be able to integrate acquisitions successfully including Schuff, GMSL and the Insurance Companies, as defined below, and we could incur or assume unknown or unanticipated liabilities or contingencies, which may impact our

In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:

We also own a minority interest in a number of entities, such as DTV America Corporation, Inseego Corp. (“Inseego”, f/k/a Novatel Wireless, Inc.), MediBeacon and Triple Ring Technologies, Inc., over which we do not exercise or have only limited management control and we are therefore unable to direct or manage the business to realize the anticipated benefits that we can achieve through full integration.

We have incurred substantial costs in connection with our prior acquisitions and expect to incur substantial costs in connection with any other transactions we complete in the future. These costs may increase our indebtedness or reduce the amount of cash otherwise available to us for acquisitions, business opportunities and other corporate purposes. There is no assurance that the actual costs will not exceed our estimates. WeOnce an acquisition is consummated, we may continue to incur additional material charges reflecting additional costs associated with our investments and the integration of our acquisitions, including our acquisition of Schuff, GMSL and CGI, DBMG’s acquisition of the Insurance Companies,Detailing and Building Information Modeling management businesses of PDC and BDS, and GMSL’s acquisition of CWind, in fiscal quarters subsequent to the quarter in which such investments and acquisitions were consummated.

We anticipate that the investigation of each specific acquisition or business opportunity and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments with respect to such transaction will require substantial management time and attention and substantial costs for financial advisors, accountants, attorneys and other advisors. If a decision is made not to consummate a specific acquisition, business opportunity or financing and capital market transaction, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific acquisition, investment target or financing, we may fail to consummate the investment or acquisition for any number of reasons, including those beyond our control. Any such event could consume significant management time and result in a loss to us of the related costs incurred, which could adversely affect our financial position and our ability to consummate other acquisitions and investments.

We have, indirectly through our subsidiaries, formed joint ventures, and may in the future engage in similar joint ventures with third parties. For example, Schuff has formed the Schuff Hopsa Engineering, Inc. joint venture located in Panama, and GMSL operates various joint ventures outside of the United States. In such circumstances, we may not be in a position to exercise significant decision-making authority if we do not own a substantial majority of the equity interests of such joint venture or otherwise have contractual rights entitling us to exercise such authority. These ventures may involve risks not present were a third party not involved, including the possibility that partners might become insolvent or fail to fund their share of required capital contributions. In addition, partners may have economic or other business interests or goals that are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Disputes between us and partners may result in litigation or arbitration that would increase our costs and expenses and divert a substantial amount of management’s time and effort away from our businesses. We may also, in certain circumstances, be liable for the actions of our third-party partners.

We may incur significant taxes in connection with effecting acquisitions of or investments in, holding, receiving payments from, operating or disposing of target companies and assets. Our decision to make a particular acquisition, sell a particular asset or increase or decrease a particular investment may be based on considerations other than the timing and amount of taxes owed as a result thereof. We remain liable for certain tax obligations of certain disposed companies, and we may be required to make material payments in connection therewith.

The efficient operation of our businesses is dependent on computer hardware and software systems. Information systems are vulnerable to security breaches, and we rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent security breaches. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any other reason could disrupt our businesses and result in decreased performance and increased costs, causing our results of operations, cash flows or financial condition to suffer.

If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology, and our business might be harmed. In addition, defending our intellectual property rights might entail significant expense. Any of our trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. While we have some U.S. patents and pending U.S. patent applications, we may be unable to obtain patent protection for the technology covered in our patent applications. In addition, our existing patents and any patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our service is available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property. In addition, some of our operating subsidiaries may use trademarks which have not bebeen registered and may be more difficult to protect.

We might be required to spend significant resources to monitor and protect our intellectual property rights. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management personnel.

In the event of aA disaster, such as a natural or man-made catastrophe, anterrorist acts, industrial accident,accidents, a blackout, a computer virus, a terrorist attack or war, could materially adversely affect our operations and results. In addition, our operations may be suspended or our computer systems may be inaccessible to our employees, customers, or business partners for an extended period of time. Even if our employees are able to report to work, they may be unable to perform their duties for an extended period of time if our facilities, data or systems are disabled or destroyed.

Limited availability of natural gas vehicles and engine sizes of such vehicles restricts their wide scale introduction and narrows theANG’s potential customer base. This, in turn, has a limiting effect on the results of operations. Due to the limited supply of natural gas vehicles, ANG’s ability to promote certain of the services contemplated by ANG’s business plan may be restricted, even if there is demand.

A significant number of established businesses, including oil and gas companies, natural gas utilities, industrial gas companies, station owners and other organizations have entered, or are planning to enter, the natural gas fuels market. Many of these current and potential competitors have substantially greater financial, marketing, research and other resources than ANG has. Natural gas utilities continue to own and operate natural gas fueling stations. Utilities in Michigan, Illinois, New Jersey, North Carolina and Georgia have also recently made efforts to invest in the natural gas vehicle fuel space. ANG expects competition to intensify in the near term in the market for natural gas vehicle fuel as the use of natural gas vehicles and the demand for natural gas vehicle fuel increases. Increased competition will lead to amplified pricing pressure, reduced operating margins and fewer expansion opportunities. ANG’s failure to compete successfully would adversely affect ANG’s business and financial results, even if ANG is successful in implementing its business plan.

Gasoline and diesel fueling stations and service infrastructure are widely available in the United States. For natural gas vehicle fuels to achieve more widespread use in the United States, they will require a promotional and educational effort and the development and supply of more natural gas vehicles and fueling stations. This will require significant continued effort by us, as well as government and clean air groups, andgroups. In addition, ANG may face resistance from oil companies and other vehicle fuel companies.

A successful implementation of ANG’s business plan will subject us to a variety of federal, state and local laws and regulations relating to the environment, health and safety, labor and employment and taxation, among others. These laws and regulations are complex, change frequently and have tended to become more stringent over time. Failure to comply with these laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties and the imposition of remedial requirements. From time to time, as part of the regular overall evaluation of ANG’s operations, including newly acquired operations, ANG may be subject to compliance audits by regulatory authorities.

In December 2015, pursuant to the terms of an amended and restated stock purchase agreement (the “SPA”)SPA between us, and Great American Financial Resources, Inc. (“Great American”("GAFRI") and Continental General Corp. (“CGC,” and together with Great American, the “Sellers of the Insurance Companies”“Seller Parties”), we purchased all of the issued and outstanding shares of common stock of the Insurance Companies,UTA and CGI, as well as all assets owned by the Sellers of the Insurance CompaniesSeller Parties or their affiliates that are used exclusively or primarily in the business of the Insurance Companies, subject to certain exceptions. The Insurance Companies are providers of long-term careOn December 31, 2016, UTA merged into and life insurance policies and annuity contracts. Consideration associated with CGI, with CGI being the survivor (“Merger”).

Pursuant to the purchase remains subjectagreement, the Company also agreed to further post-closing adjustments, primarily relatedpay to the Seller Parties, on an annual basis with respect to the years 2015 through 2019, the amount, if any, by which the Insurance Companies’ cash flow testing and premium deficiency reserves decrease from the amount of such reserves as of December 31, 2014, up to $13.0 million. The balance sheetsis calculated based on the annual fluctuation of the statutory cash flow testing and premium deficiency reserves following each of the Insurance CompaniesCompanies' filings with its domiciliary insurance regulator of its annual statutory statements for each calendar year ending December 31, 2015 through and including December 31, 2019. The Company did not set up a contingent liability at acquisition primarily due to the following factors: (i) reduced confidence that treasury rates will increase to historical averages over the near term; (ii) uncertainty around future operating expenses historically performed by the Seller Parties; and (iii) the increase in the premium deficiency reserve as reported at December 31, 2015 of approximately $8.0 million. Because the balance is cumulative over the period at issue, a decrease of approximately $8.0 million is required before any obligation existed to the Seller Parties under the earn-out).

On February 22, 2017 the Company received a significantly higher rate increase from the TDOI than had been assumed in the cash flow testing performed by the Company for the year ended December 31, 2016.  As a result of this rate increase, the probability of a payment to the Seller Parties has increased and the Company has estimated that the fair value of the obligation as of December 31, 2016 is $11.4 million, which was recorded in the closing date.current period earnings and is presented within net loss on contingent consideration line of the consolidate statements of operations.  The Company will update this assessment at each reporting period through December 31, 2019 or until the $13.0 million is paid in full.

CIGOur Insurance segment is highly dependent on its senior management team and other key personnel for the operation and development of its business. CIGOur Insurance segment faces intense competition in retaining and attracting key employees including actuarial, finance, legal, risk, compliance and other professionals.

CGI comprises the core of our new insurance business segment. Our Insurance segment CIG. CIG will endeavor to retain key personnel which we believe are necessary for the success of the business. As we do not currently have substantial insurance company holdings, we also expect that CIGour Insurance segment will add headcount as it fills out its platform to handle aspects of the business that are currently under its transition services agreement with the Sellers of the Insurance Companies (the “TransitionTransition Services Agreement”).Agreement.

Because the insurance industry is highly regulated and requires specific skills, these arrangements are important to the continued operation of the Insurance CompaniesCGI and the successful implementation of the acquisition of the Insurance Companies.CGI. Services covered under the Transition Services Agreement include various support functions needed for the continuation of the business as CIGour Insurance segment transitions to a fully standalone platform; such services include certain IT, functions, investment management, finance and accounting.accounting functions.

Any failure to attract and retain key members of CIG’sour Insurance segment’s management team or other key personnel going forward could have a material adverse effect on CIG’sour Insurance segment’s business, financial condition and results of operations.

CIG’s insurance subsidiaries areOur Insurance segment is subject to regulations that provide minimum capitalization requirements based on risk-based capital (“RBC”) formulas for life and health insurance companies. The RBC formula for life and health insurance companies establishes capital requirements relating to insurance, business, asset, interest rate, and certain other risks.

In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including the following: the amount of statutory income or losses generated by CIG’s insurance subsidiariesour Insurance segment (which are sensitive to equity market and credit market conditions), the amount of additional capital CIG’s insurance subsidiariesour Insurance segment must hold to support business growth, changes in reserve requirements applicable to CIG’s insurance subsidiaries, CIG’sour Insurance segment, our Insurance segment’s ability to secure capital market solutions to provide reserve relief, changes in equity market levels, the value of certain fixed-income and equity securities in its investment portfolio, the credit ratings of investments held in its portfolio, changes in interest rates, credit market volatility, changes in consumer behavior, as well as changes to the National Association of Insurance Commissioners’ (“NAIC”) RBC formula. Many of these factors are outside of CIG’sour Insurance segment’s control. The financial strength of CIG’s insurance subsidiaries areour Insurance segment is significantly influenced by theirits statutory surplus amounts and capital adequacy ratios.

Additionally, in connection with the consummation of the acquisition and as updated by the Merger, the Company has agreed with the Ohio Department of Insurance (“ODOI”)TDOI that, for five years following the closing of the transaction, it will contribute to CGI cash or marketable securities acceptable to the ODOITDOI to the extent required for CGI’s total adjusted capital to be not less than 400% of CGI’s authorized control level risk-based capital (each as defined under OhioTexas law and reported in CGI’s statutory statements filed with the ODOI)TDOI). Similarly, the Company has agreed with the Texas Department of Insurance (“TDOI”) that, for five years following the closing of the transaction, it will contribute to UTA cash or other admitted assets acceptable to the TDOI to the extent required for UTA’s total adjusted capital to be not less than 400% of UTA’s authorized control level risk-based capital (each as defined under Texas law and reported in UTA’s statutory statements filed with the TDOI).

CIGOur Insurance segment makes certain assumptions and estimates regarding mortality, morbidity (i.e., frequency and severity of claims, including claim termination rates and benefit utilization rates), health care experience (including type of care and cost of care), persistency (i.e., the probability that a policy or contract will remain in-force from one period to the next), future premium increases, expenses, interest rates, tax liability, business mix, frequency of claims, contingent liabilities, investment performance and other factors related to its business and anticipated results. The long-term profitability of CIG’sour Insurance segment’s insurance products depends upon how CIG’sour Insurance segment’s actual experience compares with its pricing and valuation assumptions.assumptions and estimates. For example, if morbidity rates are higher than underlying pricing assumptions, CIGour Insurance segment could be required to make greater payments under its long-term care insurance policies than currently projected, and such amounts could be significant. Likewise, if mortality rates are lower than CIG’sour Insurance segment’s pricing assumptions, CIGour Insurance segment could be required to make greater payments and thus establish additional reserves under both its long-term care insurance policies and annuity contracts and such amounts could be significant. Conversely, if mortality rates are higher than CIG’sour Insurance segment’s pricing and valuation assumptions, CIGour Insurance segment could be required to make greater payments under its life insurance policies than currently projected.

The above-described assumptions and estimates incorporate assumptions about many factors, none of which can be predicted with certainty. CIG’sOur Insurance segment’s actual experiences, as well as changes in estimates, are used to prepare CIG’sour Insurance segment’s consolidated statements of operations. To the extent CIG’sour Insurance segment’s actual experience and changes in estimates differ from original estimates, CIG’sour Insurance segment’s business, operations and financial condition may be materially adversely affected.

The calculations CIGour Insurance segment uses to estimate various components of its balance sheet and consolidated statements of operations are necessarily complex and involve analyzing and interpreting large quantities of data. CIGOur Insurance segment currently employs various techniques for such calculations including engaging third partythird-party studies and from time to time will develop and implement more sophisticated administrative systems and procedures capable of facilitating the calculation of more precise estimates.

However, assumptions and estimates involve judgment, and by their nature are imprecise and subject to changes and revisions over time. Accordingly, CIG’sour Insurance segment’s results may be adversely affected from time to time, by actual results differing from assumptions, by changes in estimates, and by changes resulting from implementing more sophisticated administrative systems and procedures that facilitate the calculation of more precise estimates.

CIGOur Insurance segment calculates and maintains reserves for estimated future payments of claims to policyholders and contract holders in accordance with U.S. GAAP and statutory accounting practices. These reserves are released as those future obligations are paid, experience changes or policies lapse. The reserves reflect estimates and actuarial assumptions with regard to future experience. These estimates and actuarial assumptions involve the exercise of significant judgment. CIG’sOur Insurance segment’s future financial results depend significantly on the extent to which actual future experience is consistent with the assumptions and methodologies used in pricing CIG’sour Insurance segment’s insurance products and calculating reserves. Small changes in assumptions or small deviations of actual experience from assumptions can have material impacts on reserves, results of operations and financial condition.

Because these factors are not known in advance and have the potential to change over time, they are difficult to accurately predict and are inherently uncertain, CIGwhich means that our Insurance segment cannot determine with precision the ultimate amounts it will pay for actual claims or the timing of those payments. In addition, CIGour Insurance segment includes assumptions for anticipated (but not yet filed) future premium rate increases in its determination of loss recognition testing of long-term care insurance reserves under U.S. GAAP and asset adequacy testing of statutory long-term care insurance reserves. CIGOur Insurance segment may not be able to realize these anticipated results in the future as a result of its inability to obtain required regulatory approvals or other factors. In this event, CIGour Insurance segment would have to increase its long-term care insurance reserves by amounts that could be material. Moreover, CIGour Insurance segment may not be able to mitigate the impact of unexpected adverse experience by increasing premiums and/or other charges to policyholders (when it has the right to do so) or alternatively by reducing benefits.

For long-duration contracts (such as long-term care policies), loss recognition occurs when, based on current expectations as of the measurement date, the existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases), are not expected to cover the present value of future claims payments, related settlement and maintenance costs, and unamortized acquisition costs. CIGOur Insurance segment regularly reviews its reserves and associated assumptions as part of its ongoing assessment of business performance and risks. If CIGour Insurance segment concludes that its reserves are insufficient to cover actual or expected policy and contract benefits and claim payments as a result of changes in experience, assumptions or otherwise, CIGour Insurance segment would be required to increase its reserves and incur charges in the period in which such determination is made. The amounts of such increases may be significant and thisthus could materially adversely affect CIG’sour Insurance segment’s results of operations and financial condition and may require additional capital in CIG’sour Insurance segment’s businesses.

Insurers that have issued or reinsured long-term care insurance policies have recognized, and may recognize in the future, substantial losses in order to strengthen reserves for liabilities to policyholders in respect of such policies. Such losses may be due to the effect of changes in assumptions of future investment yields, changes in claims, expense, persistency assumptions or other factors. CIGOur Insurance segment is subject to similar risks that adverse changes in any of its reserve assumptions in future periods could result in additional loss recognition in respect of its business.

The success of CIG’sour Insurance segment’s strategy for its run-off long-term care insurance business assumes CIG’sour Insurance segment’s ability to obtain significant price increases, as warranted and actuarially justified based on its experience on its in-force block of long-term care insurance policies. The adequacy of CIG’sour Insurance segment’s current long-term care insurance reserves also depends significantly on this assumption and CIG’sour Insurance segment’s ability to successfully execute its in-force management plan through increased premiums as anticipated.

Although the terms of CIG’sour Insurance segment’s long-term care insurance policies permit CIGour Insurance segment to increase premiums during the premium-paying period, these increases generally require regulatory approval, which often have long lead times to obtain and may not be obtained in all relevant jurisdictions or for the full amounts requested. In addition, some states are considering adopting long-term care insurance rate increase legislation, which would further limit increases in long-term care insurance premium rates, beyond the rate stability legislation previously adopted in certain states.

Such long-term care insurance rate increase legislation would adversely impact CIG’sour Insurance segment’s ability to achieve anticipated rate increases. CIGOur Insurance segment can neither predict how policyholders, competitors and regulators may react to any rate increases;increases, nor whether regulators will approve regulated rate increases. If CIGour Insurance segment is not able to increase rates to the extent it currently anticipates, CIGour Insurance segment may be required to establish additional reserves and make greater payments under long-term care insurance policies than it currently projects.

CGIOur Insurance segment conducts its business throughout the United States, excluding New York State, and UTA conducts its business throughout the United States, excluding New York, New Hampshire and Vermont.  Both CGI and UTA areState. Our Insurance segment is subject to government regulation in each of the states in which it conducts business. Such regulation is vested in state agencies having broad administrative, and in some instances discretionary, authority with respect to many aspects of CIG’sour Insurance segment’s business, which may include, among other things, premium rates and increases thereto, privacy, claims denial practices, policy forms, reinsurance reserve requirements, acquisitions, mergers, and capital adequacy, and is concerned primarily with the protection of policyholders and other customers rather than shareowners.as opposed to other stakeholders. At any given time, a number of financial and/or market conduct examinations of CIG and its insurance subsidiariesour Insurance segment may be ongoing. From time to time, regulators raise issues during examinations or audits of CIG and its insurance subsidiariesour Insurance segment that could, if determined adversely, have a material impact on CIG.our Insurance segment.

Under insurance guaranty fund laws in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. CIGOur Insurance segment cannot predict the amount or timing of any such future assessments.

Although CIG’sour Insurance segment’s business is subject to regulation in each state in which it conducts business, in many instances the state regulatory models emanate from the NAIC. State insurance regulators and the NAIC regularly re-examine existing laws and regulations applicable to insurance companies and their products. Changes in these laws and regulations, or in interpretations thereof, are often made for the benefit of the consumer and at the expense of the insurer and, thus, could have a material adverse effect on CIG’sour Insurance segment’s business, operations and financial condition.

Some of the NAIC pronouncements, particularly as they affect accounting issues, take effect automatically in the various states without affirmative action by the states. Statutes, regulations, and interpretations may be applied with retroactive impact, particularly in areas such as accounting and reserve requirements.

At the federal level, bills are routinely introduced in both chambers of the U.S. Congress which could affect life insurers. In the past, Congress has considered legislation that would impact insurance companies in numerous ways, such as providing for an optional federal charter for insurance companies or a federal presence in insurance regulation, pre-empting state law in certain respects regarding the regulation of reinsurance, increasing federal oversight in areas such as consumer protection and solvency regulation, and other matters.

Our Insurance segment cannot predict whether, or in what form, reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect CIGour Insurance segment or whether these effects will be material.

Other types of regulation that could affect CIGour Insurance segment include insurance company investment laws and regulations, state statutory accounting practices, antitrust laws, minimum solvency requirements, federal privacy laws, insurable interest laws, federal anti-money laundering and anti-terrorism laws. CIGOur Insurance segment cannot predict what form any future changes in these or other areas of regulation affecting the insurance industry might take or what effect, if any, such proposals might have on CIGour Insurance segment if enacted into law.

CIG, through its insurance subsidiaries,Our Insurance segment cedes material amounts of insurance and transfers related assets and certain liabilities to other insurance companies through reinsurance. However, notwithstanding the transfer of related assets and certain liabilities, CIGour Insurance segment remains liable with respect to ceded insurance should any reinsurer fail to meet the obligations it has assumed. Accordingly, CIGour Insurance segment bears credit risk with respect to its reinsurers. CIG, through reinsurance to its insurance subsidiaries,Our Insurance segment currently facescedes material reinsurance obligations to Loyal American Life Insurance Company (“Loyal”) (rated A- by A.M. Best), Hannover Life Reassurance Company (“Hannover”) (rated A+ by A.M. Best) and GALIC (rated A by A.M.

Reinsurers are currently facing many challenges regarding illiquid credit or capital markets, investment downgrades, rating agency downgrades, deterioration of general economic conditions and other factors negatively impacting the financial services industry generally. If such events cause a reinsurer to fail to meet its obligations, CIG’sour Insurance segment’s business, financial condition and results of operations could be materially adversely affected.

CIGOur Insurance segment makes assumptions regarding the fair value and expected future performance of its investments. For example, CIGour Insurance segment expects that its investments in residential and commercial mortgage-backed securities will continue to perform in accordance with their contractual terms, based on assumptions that CIGour Insurance segment believes are industry standard and those that a reasonable market participant would use in determining the current fair value and the performance of the underlying assets. It is possible that the underlying collateral of these investments will perform more poorly than current market expectations and that such reduced performance may lead to adverse changes in the cash flows on CIG’sour Insurance segment’s holdings of these types of securities. This could lead to potential future other-than-temporary impairments within CIG’sour Insurance segment’s portfolio of mortgage-backed and asset-backed securities.

In addition, expectations that CIG’sour Insurance segment’s investments in corporate securities and/or debt obligations will continue to perform in accordance with their contractual terms are based on evidence gathered through its normal credit surveillance process. It is possible that issuers of the corporate securities in which CIGour Insurance segment has invested will perform more poorly than current expectations. Such events may lead CIGour Insurance segment to recognize potential future other-than-temporary impairments within its portfolio of corporate securities.securities and may also have an adverse effect on its liquidity and ability to meet its obligations. It is also possible that such unanticipated events would lead CIGour Insurance segment to dispose of certain of those holdings and recognize the effects of any

CIG’sOur Insurance segment’s business is sensitive to interest rate fluctuations, volatility and the low interest rate environment. For the past several years interest rates have trended downwards toremained at historically low levels. In order to meet policy and contractual obligations, CIGour Insurance segment must earn a sufficient return on invested assets. A prolonged period of historically low rates or significant changes in interest rates could expose CIGour Insurance segment to the risk of not achieving sufficient return on invested assets by not achieving anticipated interest earnings, or of not earning anticipated spreads between the interest rate earned on investments and the credited interest rates paid on outstanding policies and contracts.

Additionally, a prolonged period of low interest rates in the future may lengthen liability maturity, thus increasing the need for a re-investment of assets at yields that are below the amounts required to support guarantee features of outstanding contracts.

Both rising and declining interest rates can negatively affect CIG’sour Insurance segment’s interest earnings and spread income (the difference between the returns CIGour Insurance segment earns on its investments and the amounts that it must credit to policyholders and contract holders). While CIGour Insurance segment develops and maintains asset liability management (“ALM”) programs and procedures designed to mitigate the effect on interest earnings and spread income in rising or falling interest rate environments, no assurance can be given that changes in interest rates will not materially adversely affect its business, financial condition and results of operations.

An extended period of declining interest rates or a prolonged period of low interest rates may cause CIGour Insurance segment to change its long-term view of the interest rates that CIGour Insurance segment can earn on its investments. Such a change would cause CIGour Insurance segment to change the long-term interest rate that it assumes in its calculation of insurance assets and liabilities under U.S. GAAP. This revision would result in increased reserves and other unfavorable consequences. In addition, while the amount of statutory reserves is not directly affected by changes in interest rates, additional statutory reserves may be required as the result of an asset adequacy analysis, which is altered by rising or falling interest rates and widening credit spreads.

CIG’s insurance subsidiaries offerOur Insurance segment offers certain products that allow policyholders to withdraw their funds under defined circumstances. In order to meet such funding obligations, CIGour Insurance segment manages its liabilities and configureconfigures its investment portfolios so as to provide and maintain sufficient liquidity to support expected withdrawal demands and contract benefits and maturities. However, in order to provide necessary long-term returns, a certain portion of its assets are relatively illiquid. There can be no assurance that actual withdrawal demands will match its estimated withdrawal demands.

As interest rates increase, CIGour Insurance segment is exposed to the risk of financial disintermediation through a potential increase in the number of withdrawals. Disintermediation risk refers to the risk that policyholders may surrender their contracts in a rising interest rate environment, requiring CIGour Insurance segment to liquidate assets in an unrealized loss position. If CIGour Insurance segment experiences unexpected withdrawal activity, whether as a result of financial strength downgrades or otherwise, it could exhaust its liquid assets and be forced to liquidate other assets, possibly at a loss or on other unfavorable terms, which could have a material adverse effect on CIG’sour Insurance segment’s business, financial condition and results of operations.

Additionally, CIGour Insurance segment may experience spread compression, and a loss of anticipated earnings, if credited interest rates are increased on renewing contracts in an effort to decrease or manage withdrawal activity.

CIG’sOur Insurance segment’s invested assets are subject to risks of credit defaults and changes in market values. Periods of extreme volatility or disruption in the financial and credit markets could increase these risks. Underlying

Stressed conditions, volatility and disruptions in financial asset classes or various markets, including global capital markets, can have an adverse effect on us, in part because we have a large investment portfolio and our insurance liabilities are sensitive to changing market factors. Global market factors, relatingincluding interest rates, credit spreads, equity prices, real estate markets, foreign currency exchange rates, consumer spending, business investment, government spending, the volatility and strength of the capital markets, deflation and inflation, all affect our financial condition, as well as the volume, profitability and results of our business operations, either directly or by virtue of their impact on the business and economic environment generally and on general levels of economic activity, employment and customer behavior specifically. Disruptions in one market or asset class can also spread to volatility affectingother markets or asset classes. Upheavals in the financial markets can also affect our financial condition (including our liquidity and credit markets could lead to other-than-temporary impairmentscapital levels) as a result of mismatched impacts on the value of our assets in CIG’s investment portfolio.and our liabilities.

The value of CIG’sour Insurance segment’s mortgage-backed investments depends in part on the financial condition of the borrowers and tenants for the properties underlying those investments, as well as general and specific circumstances affecting the overall default rate.

Significant continued financial and credit market volatility, changes in interest rates, credit spreads, credit defaults, real estate values, market illiquidity, declines in equity prices, acts of corporate malfeasance, ratings downgrades of the issuers or guarantors

Valuations may include assumptions or estimates that may have significant period-to-period changes that could have an adverse impact on CIG’sour Insurance segment’s results of operations or financial condition. Moreover, difficult conditions in the global capital markets and the economy may continue to raise the possibility of legislative, judicial, regulatory and other governmental actions.

Significant volatility or disruption in credit markets could have a material adverse effect on CIG’sour Insurance segment’s investment portfolio, and, as a result, CIG’sour Insurance segment’s business, financial condition and results of operations. Changes in interest rates and credit spreads could cause market price and cash flow variability in the fixed income instruments in CIG’sour Insurance segment’s investment portfolio. Significant volatility

CIG’sOur Insurance segment’s investment portfolio may be concentrated in areas, such as particular industries, groups of related industries, asset classes or geographic areas that experience events that cause underperformance of the investments. While CIGour Insurance segment seeks to mitigate this risk through portfolio diversification, if CIG’sour Insurance segment’s investment portfolio is concentrated in any areas that experience negative events or developments, the impact of those negative events may have a disproportionate effect on CIG’sour Insurance segment’s portfolio, which may have an adverse effect on the performance of the CIG’sour Insurance segment’s investment portfolio.

Deferred tax assets refer to assets that are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, in essence, represent future savings of taxes that would otherwise be paid in cash. The realization of the deferred tax assets is dependent upon the generation of sufficient future taxable income, including capital gains. If it is determined that the deferred tax assets cannot be realized, a deferred tax valuation allowance must be established, with a corresponding charge to net income.

If future events differ from CIG’sour Insurance segment’s current forecasts, the valuation allowance may need to be increased from the current amount, which could have a material adverse effect on CIG’sour Insurance segment’s capital position, business, operations and financial condition.

CIGOur Insurance segment operates in an industry in which various practices are subject to scrutiny and potential litigation, including class actions. Civil jury verdicts have been returned against insurers and other financial services companies involving sales, underwriting practices, product design, product disclosure, administration, denial or delay of benefits, charging excessive or impermissible fees, recommending unsuitable products to customers, breaching fiduciary or other duties to customers, refund or claims practices, alleged agent misconduct, failure to properly supervise representatives, relationships with agents or other persons with whom the insurer does business, payment of sales or other contingent commissions, and other matters. For example, a class action lawsuit was filed against CGI in November 2016 alleging breach of contract, tortious interference with contract and unjust enrichment in relation to the introduction of new products to existing policyholders and the replacement of in-force policies. Such lawsuits can result in the award of substantial judgments that are disproportionate to the actual damages, including material amounts of punitive or non-economic compensatory damages. In some states, juries, judges, and arbitrators have substantial discretion in awarding punitive and non-economic compensatory damages, which creates the potential for unpredictable material adverse judgments or awards in any given lawsuit or arbitration. Arbitration awards are subject to very limited appellate review. In addition, in some class action and other lawsuits, financial services companies have made material settlement payments.

The financial services industry, including insurance companies, is sometimes the target of law enforcement and regulatory investigations relating to the numerous laws and regulations that govern such companies. Some financial services companies have been the subject of law enforcement or other actions resulting from such investigations. Resulting publicity about one company may generate inquiries into or litigation against other financial services companies, even those who do not engage in the business

CIGOur Insurance segment is dependent on the performance of third parties as part of its business. In the near term, CIGour Insurance segment will depend on the SellersSeller Parties of the Insurance Companies, under the Transition Services Agreement, for the performance of certain transitional services and administrative services with respect to theour Insurance segment’s life insurance, annuity and long-term care business of CIG’s insurance subsidiaries.business.

In addition, various other third parties provide services to CIGour Insurance segment or are otherwise involved in CIG’sour Insurance segment’s business operations, on an ongoing basis. For example, CIG’sour Insurance segment’s operations are dependent on various technologies, some of which are provided and/or maintained by certain key outsourcing partners and other parties.

Any failure by any of the Sellers of the Insurance CompaniesSeller Parties or such other third partythird-party providers to provide such services could have a material adverse effect on CIG’sour Insurance segment’s business or financial results.

Our Insurance segment also depends on other parties that may default on their obligations to CIGour Insurance segment due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud, or other reasons. Such defaults could have a material adverse effect on CIG’sour Insurance segment’s financial condition and results of operations. In addition, certain of these other parties may act, or be deemed to act, on behalf of CIGour Insurance segment or represent CIGour Insurance segment in various capacities. Consequently, CIGour Insurance segment may be held responsible for obligations that arise from the acts or omissions of these other parties.

If CIGour Insurance segment does not maintain an effective outsourcing strategy or third-party providers do not perform as contracted, CIGour Insurance segment may experience operational difficulties, increased costs and a loss of business that could have a material adverse effect on its results of operations. In addition, CIG’sour Insurance segment’s reliance on third-party service providers that it does not control does not relieve CIGour Insurance segment of its responsibilities and requirements. Any failure or negligence by such third-party service providers in carrying out their contractual duties may result in CIGour Insurance segment becoming liable to parties who are harmed and may result in litigation. Any litigation relating to such matters could be costly, expensive and time-consuming, and the outcome of any such litigation may be uncertain. Moreover, any adverse publicity arising from such litigation, even if the litigation is not successful, could adversely affect the reputation and sales of CIGour Insurance segment and its products.

CIG’sOur Insurance segment’s long-term strategic capital requirements will depend on many factors, including acquisition activity, CIG’sour Insurance segment’s ability to manage the run-off of in-force insurance business, CIG’sour Insurance segment’s accumulated statutory earnings and the relationship between theour Insurance segment’s statutory capital and surplus of CIG’s insurance subsidiaries and various elements of required capital. To support its capital requirements and/or finance future acquisitions, CIGour Insurance segment may need to increase or maintain statutory capital and surplus through financings, which could include debt or equity financing arrangements and/or other surplus relief transactions. Adverse market conditions have affected and continue to affect the availability and cost of capital from external sources. We are not obligated to, and may choose not to or be unable to, provide financing or make any future capital contribution to CIG’s insurance subsidiaries.CGI. Consequently, financing, if available at all, may be available only on terms that are not favorable to CIG.our Insurance segment.

CIGOur Insurance segment is required to comply with USU.S. GAAP. A number of organizations are instrumental in the development and interpretation of USU.S. GAAP such as the SEC, the Financial Accounting Standards Board,FASB, and the American Institute of Certified Public Accountants. USU.S. GAAP is subject to constant review by these organizations and others in an effort to address emerging accounting rules and issue interpretative accounting guidance on a continual basis. CIGOur Insurance segment can give no assurance that future changes to USU.S. GAAP will not have a negative impact on CIG.our Insurance segment.

The application of USU.S. GAAP to insurance businesses and investment portfolios, like CIG's,our Insurance segment’s, involves a significant level of complexity and requires a number of factors and judgments. USU.S. GAAP includes the requirement to carry certain investments and insurance liabilities at fair value. These fair values are sensitive to various factors including, but not limited to, interest rate movements, credit spreads, and various other factors. Because of this, changes in these fair values may cause increased levels of volatility in CIG’sour Insurance segment’s financial statements.

In addition, CIG’s insurance subsidiaries areour Insurance segment is required to comply with statutory accounting principles (“SAP”). SAP and various components of SAP (such as actuarial reserving methodology) are subject to ongoing review by the NAIC and its task forces and committees as well as state insurance departments in an effort to address emerging issues and otherwise improve financial reporting. Various proposals are currently or have previously been pending before committees and task forces of the NAIC, some of which, if enacted, would negatively affect CIG.our Insurance segment. The NAIC is also currently working to reform state regulation in various areas, including comprehensive reforms relating to life insurance reserves and the accounting for such reserves. CIG

Our Insurance segment cannot predict whether or in what form reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect CIG.our Insurance segment. In addition, the NAIC Accounting Practices and Procedures manual provides that state insurance departments may permit insurance companies domiciled therein to depart from SAP by granting them permitted accounting practices. CIGOur Insurance segment cannot predict whether or when the insurance departments of the states of domicile of its competitors may permit them to utilize advantageous accounting practices that depart from SAP, the use of which is not permitted by the insurance departmentsdepartment of the statesCGI’s state of domicile of CIG and its insurance subsidiaries.(Texas). With respect to regulations and guidelines, states sometimes defer to the interpretation of the insurance department of the state of domicile. Neither the action of the domiciliary state nor action of the NAIC is binding on a state. Accordingly, a state could choose to follow a different interpretation. CIGOur Insurance segment can give no assurance that future changes to SAP or components of SAP or the grant of permitted accounting practices to its competitors will not have a negative impact on CIG.our Insurance segment.

Natural and man-made catastrophes, pandemics and malicious and terrorist acts present risks that could materially adversely affect CIG’sour Insurance segment’s operations and results. No assurance can be given that there are not risks that have not been predicted or protected against that could have a material adverse effect on CIG.our Insurance segment. A natural or man-made catastrophe, pandemic or malicious or terrorist act could materially adversely affect the mortality or morbidity experience of CIGour Insurance segment or its reinsurers. Claims arising from such

In addition, such events could result in a decrease or halt in economic activity in large geographic areas, adversely affecting the administration of CIG’sour Insurance segment’s business within such geographic areas and/or the general economic climate, which in turn could have an adverse effect on CIG’sour Insurance segment’s business, operations and financial condition. The possible macroeconomic effects of such events could also adversely affect CIG’sour Insurance segment’s asset portfolio.

In the future, CIGour Insurance segment may pursue acquisitions of insurance companies and/or blocks of insurance businesses through merger, stock purchase or reinsurance transactions or otherwise. Lines of business that may be acquired include but are not limited to, standalone long-term care, life and annuity products, life and annuity products with long-term care and critical illness features, and supplemental health products.

There can be no assurance that the performance of the companies or blocks of business acquired will meet CIG’sour Insurance segment’s expectations, or that any of these acquisitions will be financially advantageous for CIG.our Insurance segment. The evaluation and negotiation of potential acquisitions, as well as the integration of an acquired business or portfolio, could result in a substantial diversion of management resources. Acquisitions could involve numerous additional risks such as potential losses from unanticipated litigation, levels of claims or

Our Insurance segment’s ability to manage its growth through acquisitions will depend, in part, on its success in addressing these risks. Any failure to effectively implement CIG’sour Insurance segment’s acquisition strategies could have a material adverse effect on CIG’sour Insurance segment’s business, financial condition or results of operations.

The market for acquisitions of life or health insurers and blocks of like businesses is highly competitive, and there can be no assurance that CIGour Insurance segment will be able to identify acquisition targets at acceptable valuations, or that any such acquisitions will ultimately achieve projected returns. In addition, insurance is a highly regulated industry and many acquisition transactions are subject to approval of state insurance regulatory authorities, and therefore involve heightened execution risk.

On October 7, 2013, the New York State Department of Financial Services announced that Philip A. Falcone, now our Chairman, President and Chief Executive Officer, had committed not to exercise control, within the meaning of New York insurance law, of a New York-licensed insurer for seven years (the “NYDFS Commitment”). Mr. Falcone, who at the time of the NYDFS Commitment was the Chief Executive Officer and Chairman of the Board of HarbingerHRG Group Inc. (“HGI”), also committed not to serve as an officer or director of certain insurance company subsidiaries and related subsidiaries of HGI or to be involved in any investment decisions made by such subsidiaries, and agreed to recuse himself from participating in any vote of the board of HGI relating to the election or appointment of officers or directors of such companies. However, it was also noted that in the event compliance with the NYDFS Commitment proves impracticable, including in the context of merger, acquisition or similar transactions, then the terms of the NYDFS Commitment may be reconsidered and modified or withdrawn to the extent determined to be appropriate by the NYDFS Insurance regulatory authorities may consider the NYDFS Commitment in the course of a review of any prospective acquisition of an insurance company or block of insurance business by us or CIG,our Insurance segment, increasing the risk that any such transaction may be disapproved, or that regulatory conditions will be applied to the consummation of such an acquisition which may adversely affect the economic benefits anticipated to be derived by us and/or CIGour Insurance segment from such transaction.

Schuff’sDBMG’s cash flow is dependent upon obtaining major construction contracts primarily from general contractors and engineering firms responsible for commercial and industrial construction projects, such as high- and low-rise buildings and office complexes, hotels and casinos, convention centers, sports arenas, shopping malls, hospitals, dams, bridges, mines and power plants. The timing of or failure to obtain contracts, delays in awards of contracts, cancellations of contracts, delays in completion of contracts, or failure to obtain timely payment from Schuff’sDBMG’s customers, could result in significant periodic fluctuations in cash flows from Schuff’sDBMG’s operations. In addition, many of Schuff’sDBMG’s contracts require it to satisfy specific progress or performance milestones in order to receive payment from the customer. As a result, SchuffDBMG may incur significant costs for engineering, materials, components, equipment, labor or subcontractors prior to receipt of payment from a customer. Such expenditures could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.condition

Schuff’sDBMG’s projects are awarded through a competitive bid process or are obtained through negotiation, in either case generally using one of two types of contract pricing approaches: fixed-price or cost-plus pricing. Under fixed-price contracts, SchuffDBMG performs its services and executes its projects at an established price, subject to adjustment only for change orders approved by the customer, and, as a result, it may benefit from cost savings but be unable to recover any cost overruns. If SchuffDBMG does not execute such a contract within cost estimates, it may incur losses or the project may be less profitable than expected. Historically, the majority of Schuff’sDBMG’s contracts have been fixed-price arrangements. The revenue, cost and gross profit realized on such contracts can vary, sometimes substantially, from the original projections due to a variety of factors, including, but not limited to:

Under cost-plus contracts, SchuffDBMG receives reimbursement for its direct labor and material cost, plus a specified fee in excess thereof, which is typically a fixed rate per hour, an overall fixed fee, or a percentage of total reimbursable costs, up to a maximum amount, which is an arrangement that may protect SchuffDBMG against cost overruns. If SchuffDBMG is unable to obtain proper reimbursement for all costs incurred due to improper estimates, performance issues, customer disputes, or any of the additional factors noted above for fixed-price contracts, the project may be less profitable than expected.

Generally, Schuff’sDBMG’s contracts and projects vary in length from 1 to 12 months, depending on the size and complexity of the project, project owner demands and other factors. The foregoing risks are exacerbated for projects with longer-term durations because there is an increased risk that the circumstances upon which SchuffDBMG based its original estimates will change in a manner that increases costs. In addition, SchuffDBMG sometimes bears the risk of delays caused by unexpected conditions or events. To the extent there are future cost increases that SchuffDBMG cannot recover from its customers, suppliers or subcontractors, the outcome could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

Furthermore, revenue and gross profit from Schuff’sDBMG’s contracts can be affected by contract incentives or penalties that may not be known or finalized until the later stages of the contract term. Some of Schuff’sDBMG’s contracts provide for the customer’s review of its accounting and cost control systems to verify the completeness and accuracy of the reimbursable costs invoiced. These reviews could result in reductions in reimbursable costs and labor rates previously billed to the customer.

The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts in progress. Due to the various estimates inherent in Schuff’sDBMG’s contract accounting, actual results could differ from those estimates.

Schuff’sDBMG’s contracts often require it to satisfy or achieve certain milestones in order to receive payment for the work performed. As a result, under these types of arrangements, SchuffDBMG may incur significant costs or perform significant amounts of services prior to receipt of payment. If the ultimate customer does not proceed with the completion of the project or if the customer or contractor under which SchuffDBMG is a subcontractor defaults on its payment obligations, SchuffDBMG may face difficulties in collecting payment of amounts due to it for the costs previously incurred. If SchuffDBMG is unable to collect amounts owed to it, this could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

As SchuffDBMG obtains new significant project awards, these projects may use larger sums of working capital than other projects and Schuff’sDBMG’s backlog may become concentrated among a smaller number of customers. Approximately $167.8$296.4 million, representing 44.1%58.9%, of Schuff’sDBMG’s backlog at December 31, 20152016 was attributable to five contracts, letters of intent, notices to proceed or purchase orders. If any significant projects such as these currently included in Schuff’sDBMG’s backlog or awarded in the future were to have material cost overruns, or be significantly delayed, modified or canceled, Schuff’sDBMG’s results of operations, cash flows or financial position could be adversely impacted.

We can provide no assurance that SchuffDBMG would be able to access such capital and credit as needed or that it would be able to do so on economically attractive terms. Moreover, Schuff may be unable to replace the projects that it executes in its backlog.

As of December 31, 2015, Schuff2016, DBMG had a backlog of work to be completed of approximately $380.8$503.5 million ($252.7441.1 million under contracts or purchase orders and $128.1$62.4 million under letters of intent). Backlog develops as a result of new awards, which represent the revenue value of new project commitments received by SchuffDBMG during a given period, including legally binding commitments without a defined scope.

Commitments may be in the form of written contracts, letters of intent, notices to proceed and purchase orders. New awards may also include estimated amounts of work to be performed based on customer communication and historic experience and knowledge of our customers’ intentions. Backlog consists of projects which have either not yet been started or are in progress but are not yet complete. In the latter case, the revenue value reported in backlog is the remaining value associated with work that has not yet been completed, which increases or decreases to reflect modifications in the work to be performed under a given commitment. The revenue projected in Schuff’sDBMG’s backlog may not be realized or, if realized, may not be profitable as a result of poor contract terms or performance.

Due to project terminations, suspensions or changes in project scope and schedule, we cannot predict with certainty when or if Schuff’sDBMG’s backlog will be performed. From time to time, projects are canceled that appeared to have a high certainty of going forward at the time they were recorded as new awards. In the event of a project cancellation, SchuffDBMG typically has no contractual right to the total revenue reflected in its backlog. Some of the contracts in Schuff’sDBMG’s backlog provide for cancellation fees or certain reimbursements in the event customers cancel projects. These cancellation fees usually provide for reimbursement of Schuff’sDBMG’s out-of-pocket costs, costs associated with work performed prior to cancellation, and, to varying degrees, a percentage of the profit SchuffDBMG would have realized had the contract been completed. Although SchuffDBMG may be reimbursed for certain costs, it may be unable to recover all direct costs incurred and may incur additional unrecoverable costs due to

In certain circumstances, SchuffDBMG guarantees project completion by a scheduled date or certain performance levels. Failure to meet these schedule or performance requirements could result in a reduction of revenue and additional costs, and these adjustments could exceed projected profit. Project revenue or profit could also be reduced by liquidated damages withheld by customers under contractual penalty provisions, which can be substantial and can accrue on a daily basis. Schedule delays can result in costs exceeding our projections for a particular project. Performance problems for existing and future contracts could cause actual results of operations to differ materially from those previously anticipated and could cause us to suffer damage to our reputation within our industry and our customer base.

SchuffDBMG is a provider of services to U.S. government agencies and is therefore exposed to risks associated with government contracting. Government agencies typically can terminate or modify contracts to which SchuffDBMG is a party at their convenience, due to budget constraints or various other reasons. As a result, Schuff’sDBMG’s backlog may be reduced or it may incur a loss if a government agency decides to terminate or modify a contract to which SchuffDBMG is a party. SchuffDBMG is also subject to audits, including audits of internal control systems, cost reviews and investigations by government contracting oversight agencies. As a result of an audit, the oversight agency may disallow certain costs or withhold a percentage of interim payments. Cost disallowances may result in adjustments to previously reported revenue and may require SchuffDBMG to refund a portion of previously collected amounts. In addition, failure to comply with the terms of one or more of our government contracts or government regulations and statutes could result in SchuffDBMG being suspended or debarred from future government projects for a significant period of time, possible civil or criminal fines and penalties, the risk of public scrutiny of our performance, and potential harm to Schuff’sDBMG’s reputation, each of which could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition. Other remedies that government agencies may seek for improper activities or performance issues include sanctions such as forfeiture of profit and suspension of payments.

In addition to the risks noted above, legislatures typically appropriate funds on a year-by-year basis, while contract performance may take more than one year. As a result, contracts with government agencies may be only partially funded or may be terminated, and SchuffDBMG may not realize all of the potential revenue and profit from those contracts. Appropriations and the timing of payment may be influenced by, among other things, the state of the economy, competing political priorities, curtailments in the use of government contracting firms, budget constraints, the timing and amount of tax receipts and the overall level of government expenditures.

SchuffDBMG relies on third-party suppliers, especially suppliers of steel and steel components, and subcontractors to assist in the completion of projects. To the extent these parties cannot execute their portion of the work and are unable to deliver their services, equipment or materials according to the agreed-upon contractual terms, or SchuffDBMG cannot engage subcontractors or acquire equipment or materials, Schuff’sDBMG’s ability to complete a project in a timely manner may be impacted. Furthermore, when bidding or negotiating for contracts, SchuffDBMG must make estimates of the amounts these third parties will charge for their services, equipment and materials. If the amount SchuffDBMG is required to pay for third-party goods and services in an effort to meet its contractual obligations exceeds the amount it has estimated, SchuffDBMG could experience project losses or a reduction in estimated profit.

The prices of the steel and steel components that SchuffDBMG utilizes in the course of completing projects are susceptible to price fluctuations due to supply and demand trends, energy costs, transportation costs, government regulations, duties and tariffs, changes in currency exchange rates, price controls, general economic conditions and other unforeseen circumstances. Although SchuffDBMG may attempt to pass on certain of these increased costs to its customers, it may not be able to pass all of these cost increases on to its customers. As a result, Schuff’sDBMG’s margins may be adversely impacted by such cost increases.

SchuffDBMG purchases a majority of the steel and steel components utilized in the course of completing projects from several domestic and foreign steel producers and suppliers. SchuffDBMG generally does not have long-term contracts with its suppliers. An adverse change in any of the following could have a material adverse effect on Schuff’sDBMG’s results of operations or financial condition:

The principal geographic and product markets SchuffDBMG serves are highly competitive, and this intense competition is expected to continue. SchuffDBMG competes with other contractors for commercial, industrial and specialty projects on a local, regional, or national basis. Continued service within these markets requires substantial resources and capital investment in equipment, technology and skilled personnel, and certain of Schuff’sDBMG’s competitors have financial and operating resources greater than Schuff.DBMG. Competition also places downward pressure on Schuff’sDBMG’s contract prices and margins. Among the principal competitive factors within the industry are price, timeliness of completion of projects, quality, reputation, and the desire of customers to utilize specific contractors with whom they have favorable relationships and prior experience.

While SchuffDBMG believes that it maintains a competitive advantage with respect to these factors, failure to continue to do so or to meet other competitive challenges could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

The regulatory permitting process for Schuff’sDBMG’s projects requires significant investments of time and money by Schuff’sDBMG’s customers and sometimes by Schuff.DBMG. There are no assurances that Schuff’sDBMG’s customers or SchuffDBMG will obtain the necessary permits for these projects. Applications for permits may be opposed by governmental entities, individuals or special interest groups, resulting in delays and possible non-issuance of the permits.

SchuffDBMG is subject to licensure and holdholds licenses in each of the states in the United States in which it operates and in certain local jurisdictions within such states. While we believe that SchuffDBMG is in material compliance with all contractor licensing requirements in the various jurisdictions in which it operates, the failure to obtain, loss of or revocation of any license or the limitation on any of Schuff’sDBMG’s primary services thereunder in any jurisdiction in which it conducts substantial operations could prevent SchuffDBMG from conducting further operations in such jurisdiction and have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

Some of Schuff’sDBMG’s ultimate customers, suppliers and subcontractors have traditionally accessed commercial financing and capital markets to fund their operations, and the availability of funding from those sources could be adversely impacted by volatile equity or credit markets. The unavailability of financing could lead to the delay or cancellation of projects or the inability of such parties to pay SchuffDBMG or provide needed products or services and thereby have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

Certain of Schuff’sDBMG’s projects require the support of bid and performance surety bonds or letters of credit. A restriction, reduction, or termination of Schuff’sDBMG’s surety bond agreements or letter of credit facilities could limit its ability to bid on new project opportunities, thereby limiting new awards, or to perform under existing awards.

Schuff’sDBMG’s operations could require the utilization of large sums of working capital, sometimes on short notice and sometimes without assurance of recovery of the expenditures. Circumstances or events that could create large cash outflows include losses resulting from fixed-price contracts, environmental liabilities, litigation risks, contract initiation or completion delays, customer payment problems, professional and product liability claims and other unexpected costs. There is no guarantee that Schuff’sDBMG’s facilities will be sufficient to meet Schuff’sDBMG’s liquidity needs or that SchuffDBMG will be able to maintain such facilities or obtain any other sources of liquidity on attractive terms, or at all.

Schuff’sDBMG’s operations are subject to the usual hazards inherent in providing engineering and construction services for the construction of often large commercial industrial facilities, such as the risk of accidents, fires and explosions. These hazards can cause personal injury and loss of life, business interruptions, property damage and pollution and environmental damage. SchuffDBMG may be subject to claims as a result of these hazards. In addition, the failure of any of Schuff’sDBMG’s products to conform to customer specifications could result in warranty claims against it for significant replacement or rework costs, which could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

Although SchuffDBMG generally does not accept liability for consequential damages in its contracts, should it be determined liable, it may not be covered by insurance or, if covered, the dollar amount of these liabilities may exceed applicable policy limits. Any catastrophic occurrence in excess of insurance limits at project sites involving Schuff’sDBMG’s products and services could result in significant professional liability, product liability, warranty or other claims against Schuff.DBMG. Any damages not covered by insurance, in excess of insurance limits or, if covered by insurance, subject to a high deductible, could result in a significant loss for Schuff,DBMG, which may reduce its profits and cash available for operations. These claims could also make it difficult for SchuffDBMG to obtain adequate insurance coverage in the future at a reasonable cost. Additionally, customers or subcontractors that have agreed to indemnify SchuffDBMG against such losses may refuse or be unable to pay Schuff.

SchuffDBMG is subject to environmental laws and regulations, including those concerning emissions into the air, discharge into waterways, generation, storage, handling, treatment and disposal of waste materials and health and safety.

Schuff’sDBMG’s fabrication business often involves working around and with volatile, toxic and hazardous substances and other highly regulated pollutants, substances or wastes, for which the improper characterization, handling or disposal could constitute violations of U.S. federal, state or local laws and regulations and laws of other countries, and result in criminal and civil liabilities. Environmental laws and regulations generally impose limitations and standards for certain pollutants or waste materials and require SchuffDBMG to obtain permits and comply with various other requirements. Governmental authorities may seek to impose fines and penalties on Schuff,DBMG, or revoke or deny issuance or renewal of operating permits for failure to comply with applicable laws and regulations. SchuffDBMG is also exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. In connection with the historical operation of our facilities, substances which currently are or might be considered hazardous may have been used or disposed of at some sites in a manner that may require us to make expenditures for remediation.

The environmental, health and safety laws and regulations to which SchuffDBMG is subject are constantly changing, and it is impossible to predict the impact of such laws and regulations on SchuffDBMG in the future. We cannot ensure that Schuff’sDBMG’s operations will continue to comply with future laws and regulations or that these laws and regulations will not cause SchuffDBMG to incur significant costs or adopt more costly methods of operation.

Additionally, the adoption and implementation of any new regulations imposing reporting obligations on, or limiting emissions of greenhouse gases from, Schuff’sDBMG’s customers’ equipment and operations could significantly impact demand for Schuff’sDBMG’s services, particularly among its customers for industrial facilities.

Any expenditures in connection with compliance or remediation efforts or significant reductions in demand for Schuff’sDBMG’s services as a result of the adoption of environmental proposals could have a material adverse effect on Schuff’sDBMG’s results of operations, cash flows or financial condition.

SchuffDBMG has been and may be, from time to time, named as a defendant in legal actions claiming damages in connection with fabrication and other products and services SchuffDBMG provides and other matters. These are typically claims that arise in the normal course of business, including employment-related claims and contractual disputes or claims for personal injury or property damage which occur in connection with services performed relating to project or construction sites. Contractual disputes normally involve claims relating to the timely completion of projects or other issues concerning fabrication and other products and services SchuffDBMG provides. There can be no assurance that any of Schuff’sDBMG’s pending contractual, employment-related personal injury or property damage claims and disputes will not have a material effect on Schuff’sDBMG’s future results of operations, cash flows or financial condition.

A portion of Schuff’sDBMG’s employees are represented by labor unions.unions, and 13% of DBMG’s employees are covered under collective bargaining agreements that expire in less than one year, but are currently being renegotiated. A lengthy strike or other work stoppage at any of its facilities could have a material adverse effect on Schuff’sDBMG’s business. There is inherent risk that ongoing or future negotiations relating to collective bargaining agreements or union representation may not be favorable to Schuff.DBMG. From time to time, SchuffDBMG also has experienced attempts to unionize its non-union facilities. Such efforts can often disrupt or delay work and present risk of labor unrest.

SchuffDBMG often works on large-scale and complex projects, frequently in geographically remote locations. Such involvement often places Schuff’sDBMG’s employees and others near large equipment, dangerous processes or highly regulated materials. If SchuffDBMG or other parties fail to implement appropriate safety procedures for which they are responsible or if such procedures fail, Schuff’sDBMG’s employees or others may suffer injuries. In addition to being subject to state and federal regulations concerning health and safety, many of Schuff’sDBMG’s customers require that it meet certain safety criteria to be eligible to bid on contracts, and some of Schuff’sDBMG’s contract fees or profits are subject to satisfying safety criteria. Unsafe work conditions also have the potential of increasing employee

As of December 31, 2015, the average age of the vessels operated by GMSL was approximately 22 years. The expense of maintaining, repairing and upgrading GMSL’s vessels typically increases with age, and after a period of time the cost necessary to satisfy required marine certification standards may not be economically justifiable. There can be no assurance that GMSL will be able to maintain its fleet by extending the economic life of its existing vessels, or that its financial resources will be sufficient to enable it to make the expenditures necessary for these purposes. In addition, the supply of second-hand replacement vessels is relatively limited and the costs associated with acquiring a newly constructed vessel are high. In the event that GMSL was to lose the use of any of its vessels for a sustained period of time, its financial performance would be adversely affected.

The operation of seagoing vessels entails certain inherent risks that may adversely affect GMSL’s business and reputation, including:

Any of these circumstances or events could substantially increase GMSL’s operating costs, as for example, the cost of substituting or replacing a vessel, or lower its revenues by taking vessels out of operation permanently or for periods of time. The involvement of GMSL’s vessels in a disaster or delays in delivery or damages or loss of cargo may harm its reputation as a safe and reliable vessel operator and cause it to lose business.

GMSL does significant business with clients in the oil and natural gas industry, which is extensively regulated by U.S. federal, state, tribal, and local authorities, and corresponding foreign governmental authorities. Legislation and regulations affecting the oil and natural gas industry are under constant review for amendment or expansion, raising the possibility of changes that may become more stringent and, as a result, may affect, among other things, the pricing or marketing of crude oil and natural gas production. Noncompliance with statutes and regulations and more vigorous enforcement of such statutes and regulations by regulatory agencies may lead to substantial administrative, civil, and criminal penalties, including the assessment of natural resource damages, the imposition of significant investigatory and remedial obligations, and may also result in the suspension or termination of our operations.

GMSL’s business is subject to various international laws and regulations that could lead to enforcement actions, fines, civil or criminal penalties or the assertion of litigation claims and damages. In addition, improper conduct by GMSL’s employees or agents could damage its reputation and lead to litigation or legal proceedings that could result in significant awards or settlements to plaintiffs and civil or criminal penalties, including substantial monetary fines. Such events could lead to an adverse impact on GMSL’s financial condition or results of operations, if not mitigated by its insurance coverage.

As a result of any ship or other incidents, litigation claims, enforcement actions and regulatory actions and investigations, including, but not limited to, those arising from personal injury, loss of life, loss of or damage to personal property, business interruption losses or environmental damage to any affected coastal waters and the surrounding area, may be asserted or brought against various parties including GMSL. The time and attention of GMSL’s management may also be diverted in defending such claims, actions and investigations. GMSL may also incur costs both in defending against any claims, actions and investigations and for any judgments, fines or civil or criminal penalties if such claims, actions or investigations are adversely determined and not covered by its insurance policies.

The exchange rates between the US dollar, the Singapore dollar and the GBP have fluctuated in recent periods and may fluctuate substantially in the future. Accordingly, any material fluctuation of the exchange rate of the GBPUS Dollar against the US dollarGBP and Singapore dollar could have a negative impact on GMSL’s results of operations and financial condition.

The joint ventures in which GMSL has operating activities or interests that are located outside the United States are subject to certain risks related to the indirect ownership and development of, or investment in, foreign subsidiaries, including government expropriation and nationalization, adverse changes in currency values and foreign exchange controls, foreign taxes, U.S. taxes on the repatriation of funds to the United States, and other laws and regulations, any of which may have a material adverse effect on GMSL’s investments, financial condition, results of operations, or cash flows.

GMSL’s non-U.S. sales are significant in relation to consolidated sales. GMSL believes that non-U.S. sales will remain a significant percentage of its revenue. In addition, sales of its products to customers operating in foreign countries that experience political/economic instability or armed conflict could result in difficulties in delivering and installing complete seismic energy source systems within those geographic areas and receiving payment from these customers. Furthermore, restrictions under the FCPA, the Bribery Act, or similar legislation in other countries, or trade embargoes or similar restrictions imposed by the United States or other countries, could limit GMSL’s ability to do business in certain foreign countries. These factors could materially adversely affect GMSL’s results of operations and financial condition.

The oil and gas market has experienced an exceptional upheaval since early 2014 with the price of oil falling dramatically and this economic weakness could continue into the foreseeable future. Oil prices can be very volatile and are subject to international supply and demand, political developments, increased supply from new sources and the influence of OPEC in particular. The major operators are reviewing their overall capital spending and this trend is likely to reduce the size and number of projects carried out in the medium term as the project viability comes under greater scrutiny. This is especially true of offshore oil and gas industry, which is our focus in the oil and gas space as it is a relatively expensive method of drilling for oil and natural gas. Ongoing concerns about the systemic impact of lower oil prices and the continued uncertainty of possible reductions in long termlong-term capital expenditure could have a material adverse effect on the planned growth of GMSL and eventually curtail the anticipated cash flow and results from operations.

The carrier services telecommunications industry is significantly influenced by the marketing and pricing decisions of the larger business participants. The rapid development of new technologies, services and products has eliminated many of the traditional distinctions among wireless, cable, Internet, local and long distance communication services. We face many competitors in this market, including telephone companies, cable companies, wireless service providers, satellite providers, application and device providers. ICS faces competition for its voice trading services from telecommunication services providers’ traditional processes and new companies. Once telecommunication services providers have established business relationships with competitors to ICS, it could be extremely difficult to convince them to utilize our services. These competitors may be able to develop services or processes that are superior to ICS’s services or processes, or that achieve greater industry acceptance.

Many of our competitors are significantly larger than us and have substantially greater financial, technical and marketing resources, larger networks, a broader portfolio of service offerings, greater control over network and transmission lines, stronger

Our ability to compete effectively will depend on, among other things, our network quality, capacity and coverage, the pricing of our products and services, the quality of our customer service, our development of new and enhanced products and services, the reach and quality of our sales and distribution channels and our capital resources. It will also depend on how successfully we anticipate and respond to various factors affecting our industry, including new technologies and business models, changes in consumer preferences and demand for existing services, demographic trends and economic conditions. While growth through acquisitions is a possible strategy for ICS, there are no guarantees that any acquisitions will occur, nor are there any assurances that any acquisitions by ICS would improve the financial results of its business. If we are not able to respond successfully to these competitive challenges, we could experience reduced revenues.

ICS depends on providing customers with highly reliable service. ICS must protect its infrastructure and any collocated equipment from numerous factors, including:

Problems at one or more of ICS’s exchange delivery points, whether or not within ICS’s control, could result in service interruptions or significant equipment damage. Any loss of services, equipment damage or inability to terminate voice calls or supply Internet capacity could reduce the confidence of the members and customers and could consequently impair ICS’s ability to obtain and retain customers, which would adversely affect both ICS’s ability to generate revenues and its operating results.

To manage ICS’s market positioning effectively, we must continue to implement and improve its operational and financial systems and controls, invest in critical network infrastructure to expand its coverage and capacity, maintain or improve its service quality levels, purchase and utilize other transmission facilities, evolve its support and billing systems and train and manage its employee base. If we inaccurately forecast the movement of traffic onto ICS’s network, we could have insufficient or excessive transmission facilities and disproportionate fixed expenses. As we proceed with the development of our ICS business, operational difficulties could arise from additional demand placed on customer provisioning and support, billing and management information systems, product delivery and fulfillment, support, sales and marketing, administrative resources, network infrastructure, maintenance and upgrading. For instance, we may encounter delays or cost-overruns or suffer other adverse consequences in implementing new systems when required.

Our ICS business’business’s long-term success depends on our ability to design, implement, operate, manage, maintain and upgrade a reliable and cost-effective network infrastructure. In addition, we rely on third-party equipment and service vendors to expand and manage ICS’s global network through which it provides its services. If we fail to generate additional traffic on ICS’s network, if we experience technical or logistical impediments to the development of necessary aspects of ICS’s network or the migration of traffic and customers onto ICS’s network, or if we experience difficulties with third-party providers, we may not achieve desired economies of scale or otherwise be successful in growing our ICS business.

We are a holding company and our only material assets are our equity interests in our operating subsidiaries and our other investments. As a result, our principalOur telecommunications network is the source of revenuemost of ICS’s revenues and cash flow is distributions from our subsidiaries and our subsidiaries may be limited by law and by contract in making distributionsany damages to us.

Our operations also rely on a stable supply of utilities service. We cannot assure you that future supply instability will not impair our ability to procure required utility services in the UK Pensions Act 2004,future, which could adversely impact our business, financial condition and results of operations.

Our ability to achieve our strategic objectives will depend in large part upon the Pensions Regulatorsuccessful, timely and cost effective expansion of our network. Factors that could affect such build-out include:

Our domestic operations are subject to regulation by federal and state agencies, and our international operations are regulated by various foreign governments and international bodies. These regulatory regimes may issuerestrict or impose conditions on our ability to operate in designated areas and to provide specified products or services. We are frequently required to maintain licenses for our operations and conduct our operations in accordance with prescribed standards. We are from time to time involved in regulatory and other governmental proceedings or inquiries related to the application of these requirements. It is impossible to predict with any certainty the outcome of pending federal and state regulatory proceedings relating to our operations, or the reviews by federal or state courts of regulatory rulings. Moreover, new laws or regulations or changes to the existing regulatory framework could affect how we manage our wireline and wireless networks, impose additional costs, impair revenue opportunities, and potentially impede our ability to provide services in a contribution noticemanner that would be attractive to us and our customers.

Natural disasters or unanticipated problems with our network infrastructure could cause interruptions in the UK pension planservices we provide. The failure of a switch and our back-up system would result in the interruption of service to the customers served by that switch until necessary repairs are completed or any person whoreplacement equipment is connected withinstalled. The successful operation of our network and its components is highly dependent upon our ability to maintain the network and its components in reliable enough working order to provide sufficient quality of service to attract and maintain customers. Any damage or is an associatefailure that causes interruptions in our operations or lack of adequate maintenance of our network could result in the loss of customers and increased maintenance costs that would adversely impact our results of operations and financial condition.

We have backup data for our key information and data processing systems that could be used in the event of a catastrophe or a failure of our primary systems, and have established alternative communication networks where available. However, we cannot assure you that our business activities would not be materially disrupted if there were a partial or complete failure of any such employer where the Pensions Regulator is of the opinion that the relevant person has been a partythese primary information technology systems or communication networks. Such failures could be caused by, among other things, software bugs, computer virus attacks or conversion errors due to an act,system upgrading. In addition, any security breach caused by unauthorized access to information or a deliberate failure to act, which had as its main purpose (or onesystems, or intentional malfunctions or loss or corruption of its main purposes) the avoidance of pension liabilities. Under the UK Pensions Act 2008, the Pension Regulator has the power to issue a contribution notice to any such person where the Pensions Regulator is of the opinion that the relevant person has been a party to an act,data, software, hardware or a deliberate failure to act, which has a materially detrimental effect on pension plans without sufficient mitigation having been provided. If the Pensions Regulator considers that any of the employers participating in the UK pension plan are “insufficiently resourced” or a “service company,” it may impose a financial support direction requiring us or any person associated or connected with that employer to put in place financial support.

We maintain insurance policies for our network facilities and all of our corporate assets. This insurance coverage protects us in the event we suffer losses resulting from theft, fraud, natural disasters or other similar events or from business interruptions caused by such events. In practice,addition, we maintain insurance policies for our directors and officers. We cannot assure you however, that such insurance will be sufficient or will adequately cover potential losses.

We rely on a few strategic suppliers and vendors to provide us with equipment, materials and services that we need in order to expand and to operate our business. There are a limited number of suppliers with the riskcapability of a contribution notice being imposed may restrictproviding the network equipment and platforms that our abilityoperations and expansion plans require or the services that we require to restructure or undertake certain corporate activities relatingmaintain our extensive and geographically widespread networks. In addition, because the supply of network equipment and platforms requires detailed supply planning and this equipment is technologically complex, it would be difficult for us to GMSL without first seeking agreementreplace the suppliers of the trusteesthis equipment. Suppliers of the UK pension plan and, possibly, the approval of the Pensions Regulator. Additional security may alsocables that we need to be providedextend and maintain our networks may suffer capacity constraints or difficulties in obtaining the raw materials required to manufacture these cables.

We also depend on network installation and maintenance services providers, equipment suppliers, call centers, collection agencies and sales agents, for network infrastructure, and services to satisfy our operating needs. Many suppliers rely heavily on labor; therefore, any work stoppage or labor relations problems affecting our suppliers could adversely affect our operations. Suppliers may, among other things, extend delivery times, raise prices and limit supply due to their own shortages and business requirements. Similarly, interruptions in the trustees before certain corporate activities can be undertaken (such as the paymentsupply of an unusual dividend from GMSL)telecommunications equipment for networks could impede network development and any additional funding required by the UK pension plan mayexpansion. If these suppliers fail to deliver products and services on a timely and cost-efficient basis that satisfies our demands or are unwilling to sell to us on favorable credit terms or at all, we could experience disruptions, which could have an adverse effect on our business, financial condition and the results of our operations.

None.

We currently lease our corporate headquarters facility, which is located in Herndon, Virginia.New York, New York. Additionally, we lease administrative, technical and sales office space in various locations in the countries in which we operate. GMSL is headquartered in Chelmsford, UK, SchuffUnited Kingdom, DBMG is headquartered in Phoenix, Arizona, and our European ICS operations are headquartered in London.Arizona. We also lease space for switches operated by our Telecommunications segment. As of December 31, 2015,2016, total leased space in the United States and the United Kingdom, as well as other countries in which we operate, approximates 498,000666,632 square feet and the total annual lease costs are approximately $5.4 million. The operating leases expire at various times, with the longest commitment expiring in 2027. In addition, DBMG owns operations, administrative, and sales offices located throughout the United States approximating 1,319,833 square feet. We believe that our present administrative, technical and sales office facilities are adequate for our anticipated operations and that similar space can be obtained readily as needed. In addition, Schuff owns operations, administrative, and sales offices located throughout the United States approximating 1,465,000 square feet.

We own substantially all of ourthe equipment required for our businesses which include cable–shipsincludes cable-ships and submersibles (used in our Marine Services segment), steel machinery and equipment (used in our Construction segment), and communications equipment. Our net property and equipment was $214.5 million and $233.3 million at December 31, 2015 and 2014, respectively. As of December 31, 2015 and 2014, total net book value of equipment(used in our Telecommunications segment), except that we lease certain vessels (as described under capital leases consisted of $66.8 million and $75.5 million of cable-ships and submersibles, respectively.the "Business - Marine Services Segment" section). See Note 9—“9. Property, Plant and Equipment,” net, for additional detail regarding our property and equipment. HC2’s 11%11.0% Notes issued on November 20, 2014as well as the 11.0% Bridge Note are secured by substantially all of the Company’s assets. In addition, the SchuffDBMG Facility and GMSL Facility are secured by certain of the assets of SchuffDBMG and GMSL, respectively. See Note 12—“Long-Term13. Long-term Obligations,” for additional detail regarding encumbrances affecting our property and equipment.

The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s consolidated financial

On January 19, 2016, PTCI sought and obtained an order under the Companies’ Creditors Arrangement Act (the “CCAA”) from the Ontario Superior Court of Justice. PTCI received an Initial Order staying all proceedings against PTCI until February

On December 28, 2015, Thethe Chemours Company Mexico S. de R.L de C.V. (“Chermours”Chemours”) filed a Demand for Arbitration (the “Demand”) against the Company’s subsidiary, SSC with the American Arbitration Association, International Centre for Dispute Resolution Case No. 01-15-0006-0956.  SchuffSSC had a purchase order to provide fabricated steel for the expansion of Line 2 Expansion of Du Pont’sat DuPont’s chemical plant in Altamira, Mexico (the “Project”).  The Demand seeks recovery of an alleged mistaken payment of approximately $5 million mistaken payment to SSC and additional damages in excess of $18 million for among other reasons,  alleged breaches, including delays, failure to expedite, breach of assignment of subcontracting clauses, and backcharges for additional costs and rework of fabricated steel provideprovided for the Project.  On January 25, 2016, SSC filed an Answeranswer and Counterclaimcounterclaim denying liability alleged by Chemours and seeking to recover the principal sum of 311 thousandapproximately $0.3 million for unpaid work on the Project as well as an additional sum for damages due to alleged delays, impacts, and other wrongful conduct by Chemours and its agents. No Arbitration schedule orDocument discovery has begun and an arbitration hearing date has been set.is scheduled for March 2018. The Company believes that the allegations and claims set forth in the Demand are without merit and intendintends to defend them vigorously and aggressively pursue Chemours for additional monies owed and damages sustained.

Not applicable.

HC2 common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “PTGI” on June 23, 2011. On November 18, 2013, the Company voluntarily withdrew the trading of HC2 common stock on the NYSE, at which point HC2 common stock began to trade on the OTCQB Market (“OTCQB”) under the same ticker symbol, “PTGI.” On April 9, 2014 in connection with our name change, we changed the ticker symbol of our common stock from “PTGI” to “HCHC”. On December 29, 2014, HC2 common stock began to trade on the NYSE MKT LLC (“NYSE MKT”) under the same ticker symbol “HCHC”.

The following table provides the intraday high and low salesales prices for HC2’sHC2's common stock as reported by the NYSE OTCQB or NYSE MKT as applicable, for each quarterly period for the last two fiscal years. The quotations from the OTCQB reflect inter-dealer prices, without retail markup, markdown or commissions, and may not represent actual transactions.