Opening of Bids - 2023 Guardrail Install. & Replacement Proj No. 122-043R - Laporte Construction Co.

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LAPORTE CONSTRUCTION COMPANY, INC. AND NEW REGIME, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 2022 AND 2021 7 1. PRINCIPLES OF CONSOLIDATION AND DESCRIPTION OF BUSINESS Principles of Consolidation The accompanying consolidated financial statements include the accounts of LaPorte Construction Company, Inc. (“LaPorte”) and its wholly owned subsidiary, New Regime, LLC (“New Regime”), collectively referred to as the “Companies”. Significant intercompany balances and transactions have been eliminated in consolidation. Description of Business LaPorte is a heavy highway contractor involved principally in the construction, repair, and resurfacing of bridges and overpasses, and installation of guardrail. LaPorte performs these various construction activities primarily for state and local government agencies and their designees in northern Indiana. LaPorte’s viability is dependent on the strength of the construction industry, LaPorte’s ability to collect on its contracts, and LaPorte’s ability to profitably compete in a competitive bid market, which is the source of substantially all of LaPorte’s contracts. LaPorte’s contracts are generally performed under fixed-price or fixed-unit-price contracts and time and material contracts, modified by incentive and penalty provisions. Completion periods for LaPorte’s contracts range generally from a few weeks up to eighteen months. Typically fixed- price or fixed-unit-price contracts involve more financial risk; however, they also offer the opportunity for additional profits if LaPorte completes the contract in less time and at less cost than originally estimated. Time and material contracts involve less risk, but often are less profitable. New Regime was formed in 2007 to acquire real estate which is leased to LaPorte for use as its operating facility. 2. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed by the Companies in the preparation of its consolidated financial statements are as follows: Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimated that were used.