Opening Request for Qualifications - SB Pinhook WTP Guaranteed Savings Contract - Reynolds Construction

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Reynolds Construction, LLC Notes to Financial Statements December 31, 2019 and 2018 Note 1: Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Reynolds Construction, LLC (Company) is a construction contractor of water and wastewater treatment facilities and pipeline installation headquartered in Orleans, Indiana. The Company is a wholly owned subsidiary of Reycon Partners, LLC. The Company’s operating cycle is the length of each individual contract. Therefore, costs incurred and amounts earned on specific jobs in excess of billings are included as a current asset and billings in excess of costs incurred and earnings are included as a current liability. Retainages will generally span the length of each job. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash At December 31, 2019, the Company’s cash accounts exceeded federally insured limits by approximately $5,109,000. Accounts Receivable and Contract Assets Prior to the adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), accounts receivable are based on amounts billed to customers plus any accrued and unpaid interest. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Contract retentions are due 30 days after completion of the project and acceptance by the owner. Accounts past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. Upon adoption of Topic 606 on January 1, 2019, accounts receivable includes billed amounts for services provided to customers for which the Company has an unconditional right to payment. Unbilled amounts for which payment is contingent on satisfaction of additional performance obligations are included in costs and estimated earnings on uncompleted contracts. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. 7