Revisions in Estimates

Our profit recognition related to construction contracts is based on estimates of costs to complete each project. These estimates can vary significantly in the normal course of business as projects progress, circumstances develop and evolve, and uncertainties are resolved. When we experience significant changes in our estimates of costs to complete, we undergo a process that includes reviewing the nature of the changes to ensure that there are no material amounts that should have been recorded in a prior period rather than as revisions in estimates for the current period. In our review of these changes for the three months ended March 31, 2016 and 2015, we did not identify any material amounts that should have been recorded in a prior period. We use the cumulative catch-up method applicable to construction contract accounting to account for revisions in estimates. Under this method, revisions in estimates are accounted for in their entirety in the period of change. There can be no assurance that we will not experience further changes in circumstances or otherwise be required to further revise our cost estimates.

Revenue in an amount equal to cost incurred is recognized if there is not sufficient information to determine the estimated profit on the project with a reasonable level of certainty. The gross profit impact from projects that reached initial profit recognition is not considered to be a change in estimate for purposes of the tables below, and is therefore excluded. During the three months ended March 31, 2016 and 2015, the gross profit impact from projects reaching initial profit recognition was $4.5 million and $7.6 million, respectively. Included within the revisions in estimates for the three months ended March 31, 2016 and 2015, is an increase in revenue and gross profit of $2.8 million and $9.7 million, respectively, related to the estimated recovery of affirmative claims.

Construction

The changes in project profitability from revisions in estimates that individually had an impact of $1.0 million or more on gross profit were net increases of $1.7 million and $4.8 million for the three months ended March 31, 2016 and 2015, respectively. There were no decreases in project profitability from revisions in estimates that individually had an impact of $1.0 million or more on gross profit for the three months ended March 31, 2016 and 2015. The projects are summarized as follows:

Increases



	Three Months Ended March 31,
(dollars in millions)		2016		2015
Number of projects with upward estimate changes		1		3
Range of increase in gross profit from each project, net	$	1.7	$	1.0 - 2.2
Increase on project profitability	$	1.7	$	4.8

The increase during the three months ended March 31, 2016 was due to the settlement of an outstanding claim. The increases during the three months ended March 31, 2015 were due to estimated cost recovery from claims.

Large Project Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net decreases of $2.8 million and $0.8 million for the three months ended March 31, 2016 and 2015, respectively. There were no amounts attributable to non-controlling interests for the three months ended March 31, 2016 and the amounts attributable to non-controlling interests were $0.5 million of the net decrease for three months ended March 31, 2015. The projects are summarized as follows:

Increases



	Three Months Ended March 31,
(dollars in millions)		2016		2015
Number of projects with upward estimate changes		2		2
Range of increase in gross profit from each project, net	$	1.0 - 1.4	$	1.1 - 1.9
Increase on project profitability	$	2.4	$	3.0

The increases during the three months ended March 31, 2016 were due to owner-directed scope changes. The increases during the three months ended March 31, 2015 were due to estimated cost recovery from claims.

Decreases



	Three Months Ended March 31,
(dollars in millions)		2016		2015
Number of projects with downward estimate changes		2		3
Range of reduction in gross profit from each project, net	$	2.1 - 3.1	$	1.1 - 1.4
Decrease on project profitability	$	5.2	$	3.8

The decreases during the three months ended March 31, 2016 and 2015 were due to additional costs and lower productivity than originally anticipated.