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 Accounts Payable Retainage payable, included in accounts payable, was approximately $4,891,000 and $5,077,000 at December 31, 2019 and 2018, respectively. Contract Liabilities Contract liabilities represent the Company’s obligation to transfer goods or services to a customer when consideration has already been received from the customer. Income Taxes The Company is not directly subject to income taxes under the provisions of the Internal Revenue Code and applicable state law. Therefore, taxable income or loss is reported to the member for inclusion in its respective tax returns and no provision for federal and state income taxes has been included in the accompanying financial statements. Revenue and Cost Recognition - 2018 Profits from construction contracts are generally recognized by applying percentages of completion for each year to the total estimated profits for the respective contracts. The length of each contract varies, but is typically about one to three years. The percentages of completion are determined by relating the actual costs of work performed to date to the current estimated total costs of the respective contracts. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. Selling, general and administrative costs are charged to expense as incurred. When the estimate on a contract indicates a loss, the Company’s policy is to record the entire loss. The cumulative effect of revisions in estimates of total costs or revenue during the course of the work is reflected in the accounting period in which the facts that caused the revision first become known. An amount equal to the costs attributable to unapproved change orders and claims is included in the total estimated revenue when realization is probable. Profit from claims is recorded in the year such claims are resolved. Because of the inherent uncertainties in estimating costs and revenues, it is at least reasonably possible that the estimates used could change in the near term. Revenue Recognition - 2019 Revenue is recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration that it expects to be entitled to in exchange for those services. The amount and timing of revenue recognition varies based on the nature of the services provided and the terms and conditions of the customer contract. See Note 2 for additional information about the Company’s revenue. 9