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Schmidt Construction <br />Notes to Divisional Balance Sheet <br />December 31, 2001 <br />Note 1 -Nature of Business and Significatrt Accounting Policies <br />(Continued) <br />Revenue Recognition -Revenue from sales of asphalt products is recognized when <br />the product is shipped to the customer. Revenue on long-term contracts is <br />recognized under the percentage-of-completion method of accounting and is <br />measured principally on aunit-of-delivery basis. Fulf provision is made for any <br />anticipated losses. Billings for long-term construction contracts are rendered <br />monthly, including the amount of retainage withheld by the customer urttil contract <br />completion. As a general contractor, the Division withholds similar retainages from <br />each subcontractor. <br />Use of Estimates -The preparation of a balance sheet in conformity with generally <br />accepted accounting principles requires management to make estimates and <br />assumptions that affect the reported amounss of assets and liabilities and disclosure <br />of contingent assets and liabilities at the date of the balance sheet. Actual results <br />could differ from those estimates. <br />Note 2 -Related Party Transactions <br />Generally, amourm due from Edw. C. Levy Co. and affiliates are the result of <br />transactions in the normal course of business, as well as financing the working capital <br />needs of affiliates. These balances have been classified azlong-term hazed on the <br />intention of the parties az to repayment. <br />Note 3 -Pensions and Other Postretiremerrt Benefits <br />All eligible salaried employees are covered by noncontributory defined benefit <br />pension plans through Edw. C. Levy Co. In addition, the Division provides certain <br />defined heahh care benefits for retired employees through the Parent. Separate <br />actuarial and funding information relative to the Division is not available. <br />lart~ran <br />4 <br />