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I CROWDERGULF, LLC I NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES I Nature of Business and Basis of Presentation CrowderGulf Joint Venture was organized on October 1, 2003 and reorganized under the Alabama law as CrowderGulf, LLC (the Company) on December 30, 2011. The liability of theatembers of the I Company is limited to the members' total capital contributions. \\ The Company provides services to customers throughout the southeast 11 4ccitates Mese services consist of disaster response, support and pre-event services, marine operations coastal Irestoration and related technical assistance to customers after majo natural/and man-made disasters. Revenue and Cost Recognition 1 \ Revenue from debris management and removal contracts is recognized on the accrual basis when debris collections are received at the appropriate dumping sit&'and ap1-oved by independent onsite inspectors. Beach reclamation service revenue is recognized or t e accr'i ah basis as such services are provided. Revenues from demolition contracts are recognized after phases of structural demolition are complete in accordance with terms of its contracts and th\specified governmental agency has Iapproved the adequacy of the demolition services / \> The Company recognizes its disaster re edict o 7evenue/u der the specific performance method, I whereby revenue is recognized o*after perform nce units (cubic yards, etc.) have been completed and approved by the customer. Final billing only occurs after the customer has approved the specific performance units wh ch are�often del'ayed. In order to properly match revenues with Irelated costs the Company reco s I lled\eceivables for these remediation services. Contract costs include all direct material and labor costs and those indirect costs related to contract Iperformance, such as indirect tabor, supplies, tools, repairs, and depreciation. Selling, general and administrative costs are chargetho expenses as incurred. Cash and Cash Eq Eq aCeet_ IThe Company considers all highly liquid investments with a maturity of six months or less when purchasedo-6e sash eguiivalents. ® In 2017, the Compa9y early adopted the requirements of ASU No. 2016-18, Statement of Cash ® Flo -0Top1Restricted Cash, to present the change during the period in the total of cash, gash equivalents;and amounts generally described as restricted cash or restricted cash equivalents I in the state n ent of cash flows. Therefore, amounts generally described as restricted cash have been included with cash and cash equivalents when reconciling the beginning-of-period and end-of- / shown on the statement of cash flows. ITrade Receivables The Company invoices governmental entities for services performed pursuant to disaster response, I support and pre-event services. The governmental entities, in turn, seek reimbursement from the Federal Emergency Management Administration (FEMA). The Company's contracts with the governmental entities set forth the rates to be paid for specified services. Actual invoices submitted to the governmental entities are subject to reviews by their representative as well as state and I federal officials before submission to FEMA for reimbursement. FEMA may adjust the reimbursements based on its assessment of the "reasonableness" of the contract charges. 7