NOTE B - REVENUE FROM CONTRACTS WITH CUSTOMERS

Remaining Performance Obligations

As of March 31, 2026, and December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations that are unsatisfied, or partially unsatisfied, was approximately $165.2 million and $158.9 million, respectively. The Partnership expects to recognize unearned revenue at March 31, 2026, as follows (in thousands):

Amounts disclosed above represent management’s best estimate based on current contract schedules and anticipated project progress. Actual timing of revenue recognition may vary due to changes in project scope, performance, or customer requirements.

Contract Estimates

Accounting for long-term contracts with customers involves estimating total transaction price, total estimated costs at completion, and progress toward satisfaction of performance obligations which are used to recognize revenue earned. Unforeseen events and circumstances can alter the estimate of the costs associated with a particular contract. Total estimated costs at completion can be impacted by changes in productivity, scheduling, labor costs, subcontracts, materials, and equipment. Additionally, external factors such as weather, customer needs, customer delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and push the timing and amount of revenue recognition.

To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition, and profitability from a particular contract may be adversely affected.

The nature of the Partnership’s contracts gives rise to several types of variable consideration that can either increase or decrease the transaction price. Transaction price for contracts is required to include evaluation of variable consideration to which the Partnership has an enforceable right to compensation or obligation for a reduction, which can result in increases or decreases to a contract’s transaction price. The effect of a change in variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis.

Contract modifications can result in contract specifications or requirements that either create new or changes existing enforceable rights and obligations of the parties to the contract. The Partnership considers unapproved change orders to be contract modifications for which customers have agreed to changes in the scope of the contract but have not agreed to the price.

The Partnership considers claims to be contract modifications for which the Partnership has sought, or will seek, to collect from customers, or others, for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no contractual agreement with the customer for changes in either the scope or price of the contract. Claims can also be caused by non-customer-caused changes, such as weather delays, work stoppages or other unanticipated events.

Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. Contract modifications are generally for goods or services that are not distinct and, therefore, are accounted for as a part of the existing contract. In those instances, the effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis.

Disaggregation of Revenue

The Partnership’s customers are either in the public or private sector. The public sector primarily includes projects for federal, state, and municipal agencies involving infrastructure and public works construction. The private sector primarily includes commercial and industrial development projects with private clients.

During the three months ended March 31, 2026 and 2025, the Partnership recognized net reductions to revenue of $4.0 million and net increases to revenue of less than $0.1 million, respectively, related to performance obligations satisfied or partially satisfied in prior periods. The amounts primarily reflect revisions in progress towards completion of certain projects resulting from changes in the estimated total cost, and changes to total contract value, including approved change orders, and updates to variable consideration related to unapproved change orders.

As work is performed, revenue is recognized, and the corresponding contract liabilities are reduced. During the three months ended March 31, 2026, and March 31, 2025, the Partnership recognized revenue of $2.0 million and $4.7 million, respectively, that was included in the contract liability balances at December 31, 2025, and December 31, 2024, respectively.

Contract claims and unapproved change orders included in contract assets and liabilities on uncompleted contracts at March 31, 2026, and December 31, 2025 were not material.