EX-99.1 11 exhibit99110q12019.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
 
SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
 
 
 
March 30,
 
December 29,
 
 
2019
 
2018
 
 
(unaudited)
 
(audited)
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
64,837

 
$
128,508

Accounts receivable, net
 
195,411

 
214,518

Costs and estimated earnings in excess of billings
 
17,079

 
18,602

Inventories
 
214,038

 
213,851

Other current assets
 
19,245

 
16,061

Total current assets
 
510,610

 
591,540

Property, plant and equipment, less accumulated depreciation, depletion and amortization (March 30, 2019 - $837,896 and December 29, 2018 - $794,251)
 
1,799,941

 
1,780,132

Goodwill
 
1,196,262

 
1,193,028

Intangible assets, less accumulated amortization (March 30, 2019 - $8,656 and December 29, 2018 - $8,247)
 
18,051

 
18,460

Operating lease right-of-use assets
 
34,403

 
—

Other assets
 
49,990

 
50,084

Total assets
 
$
3,609,257

 
$
3,633,244

Liabilities and Member’s Interest
 
 
 
 
Current liabilities:
 
 
 
 
Current portion of debt
 
$
4,765

 
$
6,354

Current portion of acquisition-related liabilities
 
34,922

 
31,770

Accounts payable
 
102,454

 
109,008

Accrued expenses
 
96,707

 
100,029

Current operating lease liabilities
 
8,098

 
—

Billings in excess of costs and estimated earnings
 
10,656

 
11,840

Total current liabilities
 
257,602

 
259,001

Long-term debt
 
1,855,346

 
1,807,502

Acquisition-related liabilities
 
37,126

 
45,354

Noncurrent operating lease liabilities
 
27,200

 
—

Other noncurrent liabilities
 
132,253

 
135,956

Total liabilities
 
2,309,527

 
2,247,813

Commitments and contingencies (see note 11)
 

 

Member’s equity
 
1,399,912

 
1,396,241

Accumulated earnings (deficit)
 
(78,758
)
 
12,806

Accumulated other comprehensive loss
 
(21,424
)
 
(23,616
)
Total member’s interest
 
1,299,730

 
1,385,431

Total liabilities and member’s interest
 
$
3,609,257

 
$
3,633,244

 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands)
 
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Revenue:
 
 
 
 
Product
 
$
271,641

 
$
256,807

Service
 
34,309

 
33,109

Net revenue
 
305,950

 
289,916

Delivery and subcontract revenue
 
26,689

 
24,505

Total revenue
 
332,639

 
314,421

Cost of revenue (excluding items shown separately below):
 
 
 
 
Product
 
213,726

 
197,433

Service
 
26,589

 
25,923

Net cost of revenue
 
240,315

 
223,356

Delivery and subcontract cost
 
26,689

 
24,505

Total cost of revenue
 
267,004

 
247,861

General and administrative expenses
 
67,610

 
69,861

Depreciation, depletion, amortization and accretion
 
55,388

 
46,958

Transaction costs
 
308

 
1,266

Operating loss
 
(57,671
)
 
(51,525
)
Interest expense
 
29,937

 
28,570

Loss on debt financings
 
14,565

 
—

Other income, net
 
(2,803
)
 
(7,655
)
Loss from operations before taxes
 
(99,370
)
 
(72,440
)
Income tax benefit
 
(7,806
)
 
(3,844
)
Net loss attributable to member of Summit LLC
 
$
(91,564
)
 
$
(68,596
)
 
See notes to unaudited consolidated financial statements.











SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income
(In thousands)
 
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Net loss
 
$
(91,564
)
 
$
(68,596
)
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustment
 
2,358

 
(3,104
)
(Loss) income on cash flow hedges
 
(166
)
 
995

Other comprehensive income (loss):
 
2,192

 
(2,109
)
Comprehensive income attributable to member of Summit LLC
 
$
(89,372
)
 
$
(70,705
)
 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Cash flow from operating activities:
 
 
 
 
Net loss
 
$
(91,564
)
 
$
(68,596
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation, depletion, amortization and accretion
 
56,871

 
45,345

Share-based compensation expense
 
5,906

 
8,507

Net gain on asset disposals
 
(1,735
)
 
(4,077
)
Non-cash loss on debt financings
 
2,850

 
—

Change in deferred tax asset, net
 
(7,738
)
 
(3,689
)
Other
 
47

 
1,579

(Increase) decrease in operating assets, net of acquisitions and dispositions:
 
 
 
 
Accounts receivable, net
 
20,118

 
27,979

Inventories
 
(705
)
 
(35,248
)
Costs and estimated earnings in excess of billings
 
1,541

 
(2,678
)
Other current assets
 
(3,447
)
 
(3,202
)
Other assets
 
2,576

 
747

(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
 
 
 
 
Accounts payable
 
(6,126
)
 
(8,328
)
Accrued expenses
 
(6,268
)
 
(8,074
)
Billings in excess of costs and estimated earnings
 
(1,195
)
 
(1,788
)
Other liabilities
 
(1,807
)
 
156

Net cash used in operating activities
 
(30,676
)
 
(51,367
)
Cash flow from investing activities:
 
 
 
 
Acquisitions, net of cash acquired
 
(2,842
)
 
(113,993
)
Purchases of property, plant and equipment
 
(62,188
)
 
(49,505
)
Proceeds from the sale of property, plant and equipment
 
2,797

 
7,788

Other
 
(178
)
 
1,500

Net cash used for investing activities
 
(62,411
)
 
(154,210
)
Cash flow from financing activities:
 
 
 
 
Capital contributions by member
 
766

 
15,475

Proceeds from debt issuances
 
300,000

 
—

Debt issuance costs
 
(5,774
)
 
—

Payments on debt
 
(256,333
)
 
(3,972
)
Payments on acquisition-related liabilities
 
(6,433
)
 
(6,462
)
Distributions
 
(2,500
)
 
(2,509
)
Other
 
(501
)
 
(1,820
)
Net cash provided by financing activities
 
29,225

 
712

Impact of foreign currency on cash
 
191

 
(398
)
Net (decrease) increase in cash
 
(63,671
)
 
(205,263
)
Cash and cash equivalents – beginning of period
 
128,508

 
383,556

Cash and cash equivalents – end of period
 
$
64,837

 
$
178,293

 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Changes in Member’s Interest and Redeemable Noncontrolling Interest
(In thousands)
 
 
 
Total Member’s Interest
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
other
 
Total
 
 
Member’s
 
Accumulated
 
comprehensive
 
member’s
 
 
equity
 
(deficit) earnings
 
loss
 
interest
Balance - Balance — December 29, 2018
 
$
1,396,241

 
$
12,806

 
$
(23,616
)
 
$
1,385,431

Net contributed capital
 
766

 
—

 
—

 
766

Net loss
 
—

 
(91,564
)
 
—

 
(91,564
)
Other comprehensive income
 
—

 
—

 
2,192

 
2,192

Distributions
 
(2,500
)
 
—

 
—

 
(2,500
)
Share-based compensation
 
5,906

 
—

 
—

 
5,906

Shares redeemed to settle taxes and other
 
(501
)
 
—

 
—

 
(501
)
Balance - Balance — March 30, 2019
 
$
1,399,912

 
$
(78,758
)
 
$
(21,424
)
 
$
1,299,730

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance — December 30, 2017
 
$
1,359,760

 
$
(51,031
)
 
$
(17,135
)
 
$
1,291,594

Net contributed capital
 
15,475

 
—

 
—

 
15,475

Net loss
 
—

 
(68,596
)
 
—

 
(68,596
)
Other comprehensive loss
 
—

 
—

 
(2,109
)
 
(2,109
)
Distributions
 
(2,509
)
 
—

 
—

 
(2,509
)
Share-based compensation
 
8,507

 
—

 
—

 
8,507

Shares redeemed to settle taxes and other
 
(1,820
)
 
—

 
—

 
(1,820
)
Balance — March 31, 2018
 
$
1,379,413

 
$
(119,627
)
 
$
(19,244
)
 
$
1,240,542

 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC
 
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
(Dollars in tables in thousands)
 
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
Summit Materials, LLC (“Summit LLC” and, together with its subsidiaries, “Summit,” “we,” “us,” “our” or the “Company”) is a vertically-integrated construction materials company. The Company is engaged in the production and sale of aggregates, cement, ready-mix concrete, asphalt paving mix and concrete products and owns and operates quarries, sand and gravel pits, two cement plants, cement distribution terminals, ready-mix concrete plants, asphalt plants and landfill sites. It is also engaged in paving and related services. The Company’s three operating and reporting segments are the West, East and Cement segments.
 
Substantially all of the Company’s construction materials, products and services are produced, consumed and performed outdoors, primarily in the spring, summer and fall. Seasonal changes and other weather-related conditions can affect the production and sales volumes of its products and delivery of services. Therefore, the financial results for any interim period are typically not indicative of the results expected for the full year. Furthermore, the Company’s sales and earnings are sensitive to national, regional and local economic conditions, weather conditions and to cyclical changes in construction spending, among other factors.
 
Summit LLC is a wholly owned indirect subsidiary of Summit Materials Holdings L.P. (“Summit Holdings”), whose primary owner is Summit Materials, Inc. (“Summit Inc.”). Summit Inc. was formed as a Delaware corporation on September 23, 2014. Its sole material asset is a controlling equity interest in Summit Holdings. Pursuant to a reorganization into a holding company structure (the “Reorganization”) consummated in connection with Summit Inc.’s March 2015 initial public offering, Summit Inc. became a holding corporation operating and controlling all of the business and affairs of Summit Holdings and its subsidiaries, including Summit LLC.
 
Basis of Presentation—These unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto as of and for the year ended December 29, 2018. The Company continues to follow the accounting policies set forth in those audited consolidated financial statements.
 
Management believes that these consolidated interim financial statements include all adjustments, normal and recurring in nature, that are necessary to present fairly the financial position of the Company as of March 30, 2019, the results of operations for the three months ended March 30, 2019 and March 31, 2018 and cash flows for the three months ended March 30, 2019 and March 31, 2018.
 
Use of Estimates—Preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, valuation of deferred tax assets, goodwill, intangibles and other long-lived assets, pension and other postretirement obligations and asset retirement obligations. Estimates also include revenue earned on contracts and costs to complete contracts. Most of the Company’s paving and related services are performed under fixed unit-price contracts with state and local governmental entities. Management regularly evaluates its estimates and assumptions based on historical experience and other factors, including the current economic environment. As future events and their effects cannot be determined with precision, actual results can differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, are reflected in the Company’s consolidated financial statements when the change in estimate occurs.
 
Business and Credit Concentrations—The Company’s operations are conducted primarily across 23 U.S. states and in British Columbia, Canada, with the most significant revenue generated in Texas, Utah, Kansas and Missouri. The Company’s accounts receivable consist primarily of amounts due from customers within these areas. Therefore, collection of these accounts is dependent on the economic conditions in the aforementioned states, as well as specific situations affecting individual customers. Credit granted within the Company’s trade areas has been granted to many customers, and management does not




believe that a significant concentration of credit exists with respect to any individual customer or group of customers. No single customer accounted for more than 10% of the Company’s total revenue in the three months ended March 30, 2019 or March 31, 2018.
 
Revenue Recognition—We earn revenue from the sale of products, which primarily include aggregates, cement, ready-mix concrete and asphalt, but also include concrete products and plastics components, and from the provision of services, which are primarily paving and related services, but also include landfill operations, the receipt and disposal of waste that is converted to fuel for use in our cement plants and underground storage space rental.
 
Products
 
We earn revenue from the sale of products, which primarily include aggregates, cement, ready-mix concrete and asphalt, but also include concrete products, net of discounts or allowances, if any, and freight and delivery charges billed to customers. Freight and delivery charges associated with cement sales are recorded on a net basis together with freight costs within cost of sales. Revenue for product sales is recognized when evidence of an arrangement exists and when control passes, which generally is when the product is shipped.
 
Services
 
We earn revenue from the provision of services, which are primarily paving and related services, but also include landfill operations, the receipt and disposal of waste that is converted to fuel for use in our cement plants, and underground storage space rental. Revenue from the receipt of waste fuels is recognized when the waste is accepted and a corresponding liability is recognized for the costs to process the waste into fuel for the manufacturing of cement or to ship the waste offsite for disposal in accordance with applicable regulations.
 
Revenue derived from paving and related services is recognized using the percentage of completion method, which approximates progress towards completion. Under the percentage of completion method, we recognize paving and related services revenue as services are rendered. The majority of our construction service contracts are completed within one year, but may occasionally extend beyond this time frame. We estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the life of the contract based on input measures. We generally measure progress toward completion on long-term paving and related services contracts based on the proportion of costs incurred to date relative to total estimated costs at completion. We include revisions of estimated profits on contracts in earnings under the cumulative catch-up method, under which the effect of revisions in estimates is recognized immediately. If a revised estimate of contract profitability reveals an anticipated loss on the contract, we recognize the loss in the period it is identified.
 
The percentage of completion method of accounting involves the use of various estimating techniques to project costs at completion, and in some cases includes estimates of recoveries asserted against the customer for changes in specifications or other disputes. Contract estimates involve various assumptions and projections relative to the outcome of future events over multiple periods, including future labor productivity and availability, the nature and complexity of the work to be performed, the cost and availability of materials, the effect of delayed performance, and the availability and timing of funding from the customer. These estimates are based on our best judgment. A significant change in one or more of these estimates could affect the profitability of one or more of our contracts. We review our contract estimates regularly to assess revisions in contract values and estimated costs at completion. Inherent uncertainties in estimating costs make it at least reasonably possible that the estimates used will change within the near term and over the life of the contracts. No material adjustments to a contract were recognized in the three months ended March 30, 2019.
 
Costs and estimated earnings in excess of billings are composed principally of revenue recognized on contracts on the percentage of completion method for which billings had not been presented to customers because the amounts were not billable under the contract terms at the balance sheet date. In accordance with the contract terms, the unbilled receivables at the balance sheet date are expected to be billed in following periods. Billings in excess of costs and estimated earnings represent billings in excess of revenue recognized. Contract assets and liabilities are netted on a contract-by-contract basis.
 
New Accounting Standards — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which will result in lessees recognizing most leases on the balance sheet. Lessees are required to disclose more quantitative and qualitative information about the leases than current U.S. GAAP requires. The ASU and subsequent amendments issued in 2018 are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We adopted the standard effective December 30, 2018 using the modified retrospective approach.





The modified retrospective approach provides a method for recording existing leases at adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. In addition, we elected the hindsight practical expedient to determine the lease term for existing leases.

The most significant impact upon adoption was the recognition of $36.8 million of operating lease right-of-use assets and $36.8 million operating lease liabilities. The standard had no material impact on our statement of cash flows.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, allowing more financial and nonfinancial hedging strategies to be eligible for hedge accounting. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The adoption of this new ASU did not have a material impact on our consolidated financial results.

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, increasing the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The adoption of this new ASU did not have a material impact on our consolidated financial results.

2. GOODWILL AND INTANGIBLES
 
The Company has completed numerous acquisitions since its formation, which have been financed through a combination of debt and equity funding. The operations of each acquisition have been included in the Company’s consolidated results of operations since the respective closing dates of the acquisitions. The Company measures all assets acquired and liabilities assumed at their acquisition-date fair value.
 
Changes in the carrying amount of goodwill, by reportable segment, from December 29, 2018 to March 30, 2019 are summarized as follows:

 
 
West
 
East
 
Cement
 
Total  
Balance, December 29, 2018
 
$
581,567

 
$
406,805

 
$
204,656

 
$
1,193,028

Acquisitions (1)
 
1,143

 
879

 
—

 
2,022

Foreign currency translation adjustments
 
1,212

 
—

 
—

 
1,212

Balance, March 30, 2019
 
$
583,922

 
$
407,684

 
$
204,656

 
$
1,196,262

_______________________________________________________________________
(1) Reflects goodwill from 2019 acquisitions and working capital adjustments from prior year acquisitions.

The Company’s intangible assets are primarily composed of goodwill, mineral lease agreements and reserve rights. The assets related to mineral lease agreements reflect the submarket royalty rates paid under agreements, primarily for extracting aggregates. The values were determined as of the respective acquisition dates by a comparison of market-royalty rates. The reserve rights relate to aggregate reserves to which the Company has the rights of ownership, but does not own the reserves. The intangible assets are amortized on a straight-line basis over the lives of the leases. The following table shows intangible assets by type and in total:
 
 
 
March 30, 2019
 
December 29, 2018
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Mineral leases
 
$
19,064

 
$
(5,548
)
 
$
13,516

 
$
19,064

 
$
(5,259
)
 
$
13,805

Reserve rights
 
6,234

 
(2,024
)
 
4,210

 
6,234

 
(1,940
)
 
4,294

Trade names
 
1,000

 
(883
)
 
117

 
1,000

 
(858
)
 
142

Other
 
409

 
(201
)
 
208

 
409

 
(190
)
 
219

Total intangible assets
 
$
26,707

 
$
(8,656
)
 
$
18,051

 
$
26,707

 
$
(8,247
)
 
$
18,460

 




Amortization expense totaled $0.4 million and $0.3 million for the three months ended March 30, 2019 and March 31, 2018, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to March 30, 2019 is as follows:
 
2019 (nine months)
$
1,189

2020
1,510

2021
1,475

2022
1,482

2023
1,349

2024
1,254

Thereafter
9,792

Total
$
18,051

 
3. REVENUE RECOGNITION
 
We derive our revenue predominantly by selling construction materials, products and providing paving and related services. Construction materials consist of aggregates and cement. Products consist of related downstream products, including ready-mix concrete, asphalt paving mix and concrete products. Paving and related service revenue is generated primarily from the asphalt paving services that we provide.
 
Revenue by product for the three months ended March 30, 2019 and March 31, 2018 is as follows:
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Revenue by product*:
 
 
 
 
Aggregates
 
$
87,872

 
$
67,450

Cement
 
32,499

 
33,117

Ready-mix concrete
 
117,320

 
122,015

Asphalt
 
23,038

 
18,141

Paving and related services
 
34,345

 
34,336

Other
 
37,565

 
39,362

Total revenue
 
$
332,639

 
$
314,421

*Revenue from liquid asphalt terminals is included in asphalt revenue.
 
The following table outlines the significant changes in contract assets and contract liability balances from December 29, 2018 to March 30, 2019. Also included in the table is the net change in estimate as a percentage of aggregate revenue for such contracts:
 
 
Costs and estimated
 
Billings in excess
 
 
earnings in
 
of costs and
 
 
excess of billings
 
estimated earnings
Balance - December 29, 2018
 
$
18,602

 
$
11,840

Changes in revenue billed, contract price or cost estimates
 
(1,541
)
 
(1,195
)
Other
 
18

 
11

Balance - March 30, 2019
 
$
17,079

 
$
10,656


Accounts receivable, net consisted of the following as of March 30, 2019 and December 29, 2018:
 




 
 
March 30,
 
December 29,
 
 
2019
 
2018
Trade accounts receivable
 
$
167,337

 
$
157,601

Construction contract receivables
 
20,755

 
47,994

Retention receivables
 
12,902

 
15,010

Receivables from related parties
 
575

 
629

Accounts receivable
 
201,569

 
221,234

Less: Allowance for doubtful accounts
 
(6,158
)
 
(6,716
)
Accounts receivable, net
 
$
195,411

 
$
214,518

 
Retention receivables are amounts earned by the Company but held by customers until paving and related service contracts and projects are near completion or fully completed. Amounts are generally billed and collected within one year.
 
4. INVENTORIES
 
Inventories consisted of the following as of March 30, 2019 and December 29, 2018:
 
 
March 30, 2019
 
December 29, 2018
Aggregate stockpiles
 
$
146,132

 
$
151,300

Finished goods
 
35,275

 
34,993

Work in process
 
7,947

 
7,478

Raw materials
 
24,684

 
20,080

Total
 
$
214,038

 
$
213,851

 

5. ACCRUED EXPENSES
 
Accrued expenses consisted of the following as of March 30, 2019 and December 29, 2018:
 
 
March 30, 2019
 
December 29, 2018
Interest
 
$
14,553

 
$
26,223

Payroll and benefits
 
19,126

 
15,952

Finance lease obligations
 
17,407

 
15,557

Insurance
 
16,071

 
13,625

Non-income taxes
 
10,107

 
7,674

Professional fees
 
625

 
1,408

Other (1)
 
18,818

 
19,590

Total
 
$
96,707

 
$
100,029

_______________________________________________________________________
(1) Consists primarily of subcontractor and working capital settlement accruals.





6. DEBT
 
Debt consisted of the following as of March 30, 2019 and December 29, 2018:
 
 
March 30, 2019
 
December 29, 2018
Term Loan, due 2024:
 
 
 
 
$627.4 million and $630.6 million, net of $1.3 million and $1.3 million discount at March 30, 2019 and December 29, 2018, respectively
 
$
626,147

 
$
629,268

8 1/2% Senior Notes, due 2022
 
—

 
250,000

6 1/8% Senior Notes, due 2023:
 
 

 
 

$650.0 million, net of $1.0 million and $1.1 million discount at March 30, 2019 and December 29, 2018, respectively
 
648,952

 
648,891

5 1⁄8% Senior Notes, due 2025
 
300,000

 
300,000

6 1⁄2% Senior Notes, due 2027
 
300,000

 
—

Total
 
1,875,099

 
1,828,159

Current portion of long-term debt
 
4,765

 
6,354

Long-term debt
 
$
1,870,334

 
$
1,821,805

 
The contractual payments of long-term debt, including current maturities, for the five years subsequent to March 30, 2019, are as follows:
2019 (nine months)
$
3,177

2020
7,942

2021
6,354

2022
6,354

2023
656,354

2024
597,253

Thereafter
600,000

Total
1,877,434

Less: Original issue net discount
(2,335
)
Less: Capitalized loan costs
(14,988
)
Total debt
$
1,860,111

 
Senior Notes—On March 15, 2019, Summit LLC and Summit Materials Finance Corp., an indirect wholly-owned subsidiary of Summit LLC (“Finance Corp.” and together with Summit LLC, the “Issuers”) issued $300.0 million in aggregate principal amount of 6.500% senior notes due March 15, 2027 (the “2027 Notes”). The 2027 Notes were issued at 100.0% of their par value with proceeds of $296.3 million, net of related fees and expenses. Interest on the 2027 Notes is payable semi-annually on March 15 and September 15 of each year commencing on September 15, 2019.

In March 2019, using the proceeds from the 2027 Notes, all of the outstanding $250.0 million 8.500% senior notes due 2022 (the “2022 Notes”) were redeemed at a price equal to par plus an applicable premium and the indenture under which the 2022 Notes were issued was satisfied and discharged. As a result of the extinguishment, charges of $14.6 million were recognized in the quarter ended March 30, 2019, which included charges of$11.7 million for the applicable redemption premium and $2.9 million for the write-off of deferred financing fees.

In 2017, the Issuers issued $300.0 million of 5.125% senior notes due June 1, 2025 (the “2025 Notes”). The 2025 Notes were issued at 100.0% of their par value with proceeds of $295.4 million, net of related fees and expenses. The 2025 Notes were issued under an indenture dated June 1, 2017 (as amended and supplemented, the “2017 Indenture”). The 2017 Indenture contains covenants limiting, among other things, Summit LLC and its restricted subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The 2017 Indenture also contains customary events of default. Interest on the 2025 Notes is payable semi-annually on June 1 and December 1 of each year commencing on December 1, 2017.
 




In 2015, the Issuers issued $650.0 million of 6.125% senior notes due July 2023 (the “2023 Notes” and collectively with the 2025 Notes and the 2027 Notes, the “Senior Notes”). Of the aggregate $650.0 million of 2023 Notes, $350.0 million were issued at par and $300.0 million were issued at 99.375% of par. The 2023 Notes were issued under an indenture dated July 8, 2015, the terms of which are generally consistent with the 2017 Indenture. Interest on the 2023 Notes is payable semi-annually in arrears on January 15 and July 15 of each year.
 
As of March 30, 2019 and December 29, 2018, the Company was in compliance with all financial covenants under the applicable indentures.
 
Senior Secured Credit Facilities— Summit LLC has credit facilities that provide for term loans in an aggregate amount of $650.0 million and revolving credit commitments in an aggregate amount of $345.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate amount of term debt are due on the last business day of each March, June, September and December, commencing with the March 2018 payment. The unpaid principal balance is due in full on the maturity date, which is November 21, 2024.
 
On February 25, 2019, Summit LLC entered into Incremental Amendment No. 4 to the credit agreement governing the Senior Secured Credit Facilities (the “Credit Agreement”) which, among other things, increased the total amount available under the revolving credit facility to $345.0 million and extended the maturity date of the Credit Agreement to February 2024. During 2018 and 2017, Summit LLC entered into three different amendments to the Credit Agreement, which among other things, reduced the applicable margin in respect to the outstanding principal amount at the time of the respective amendments.
 
The revolving credit facility bears interest per annum equal to, at Summit LLC’s option, either (i) a base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) LIBOR plus 1.00%, plus an applicable margin of 2.00% for base rate loans or (ii) a LIBOR rate determined by reference to Reuters prior to the interest period relevant to such borrowing adjusted for certain additional costs plus an applicable margin of 3.00% for LIBOR rate loans.
 
There were no outstanding borrowings under the revolving credit facility as of March 30, 2019 and December 29, 2018, leaving remaining borrowing capacity of $329.8 million as of March 30, 2019, which is net of $15.2 million of outstanding letters of credit. The outstanding letters of credit are renewed annually and support required bonding on construction projects, large leases, workers compensation claims and the Company’s insurance liabilities.
 
Summit LLC’s Consolidated First Lien Net Leverage Ratio, as such term is defined in the Credit Agreement, should be no greater than 4.75:1.0 as of each quarter-end. As of March 30, 2019 and December 29, 2018, Summit LLC was in compliance with all financial covenants.
 
Summit LLC’s wholly-owned domestic subsidiary companies, subject to certain exclusions and exceptions, are named as subsidiary guarantors of the Senior Notes and the Senior Secured Credit Facilities. In addition, Summit LLC has pledged substantially all of its assets as collateral, subject to certain exclusions and exceptions, for the Senior Secured Credit Facilities.

The following table presents the activity for the deferred financing fees for the three months ended March 30, 2019 and March 31, 2018:
 
Deferred financing fees
Balance—December 29, 2018
$
15,475

Loan origination fees
5,774

Amortization
(998
)
Write off of deferred financing fees
(2,851
)
Balance—March 30, 2019
$
17,400

 
 
 
 
Balance - December 30, 2017
$
19,033

Amortization
(1,013
)
Balance - March 31, 2018
$
18,020

 
Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC for a (i) $6.0 million Canadian dollar (“CAD”) revolving credit commitment to be used for operating activities that




bears interest per annum equal to the bank’s prime rate plus 0.20%, (ii) $0.5 million CAD revolving credit commitment to be used for capital equipment that bears interest per annum at the bank’s prime rate plus 0.90% and (iii) $0.4 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary. There were no amounts outstanding under this agreement as of March 30, 2019 or December 29, 2018.
 
7. INCOME TAXES
 
Summit LLC is a limited liability company and passes its tax attributes for federal and state tax purposes to its parent company and is generally not subject to federal or state income tax. However, certain subsidiary entities file federal, state and Canadian income tax returns due to their status as taxable entities in the respective jurisdiction. The effective income tax rate for the C Corporations differs from the statutory federal rate primarily due to (1) tax depletion expense in excess of the expense recorded under U.S. GAAP, (2) state income taxes and the effect of graduated tax rates and (3) various other items, such as limitations on meals and entertainment and other costs.  The effective income tax rate for the Canadian subsidiary is not significantly different from its historical effective tax rate.
 
Summit LLC expects additional unrecognized tax benefits in 2019 that if recognized would affect the annual effective tax rate, and included that in its estimate of those amounts in its annual effective tax rate. We did not recognize interest or penalties related to this amount as it is offset by other attributes. No material interest or penalties were recognized in income tax expense during the three months ended March 30, 2019 and March 31, 2018.

8. MEMBERS’ INTEREST
 
Accumulated other comprehensive income (loss) —The changes in each component of accumulated other comprehensive income (loss) consisted of the following:
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
Foreign currency
 
 
 
other
 
 
Change in
 
translation
 
Cash flow hedge
 
comprehensive
 
 
retirement plans
 
adjustments
 
adjustments
 
(loss) income
Balance — December 29, 2018
 
$
(4,392
)
 
$
(19,370
)
 
$
146

 
$
(23,616
)
Foreign currency translation adjustment
 
—

 
2,358

 
—

 
2,358

Loss on cash flow hedges
 
—

 
—

 
(166
)
 
(166
)
Balance — March 30, 2019
 
$
(4,392
)
 
$
(17,012
)
 
$
(20
)
 
$
(21,424
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance - December 30, 2017
 
$
(7,181
)
 
$
(17,790
)
 
$
(2,473
)
 
$
(27,444
)
Foreign currency translation adjustment
 
—

 
706

 
—

 
706

Income on cash flow hedges
 
—

 
—

 
412

 
412

Balance - March 31, 2018
 
$
(7,181
)
 
$
(17,084
)
 
$
(2,061
)
 
$
(26,326
)
 




9. SUPPLEMENTAL CASH FLOW INFORMATION
 
Supplemental cash flow information is as follows:
 
 
 
Three months ended
 
 
March 30, 2019
 
March 31, 2018
Cash payments:
 
 
 
 
Interest
 
$
21,126

 
$
26,927

Income (refund) taxes
 
(20
)
 
1,582

Operating cash payments on operating leases
 
2,837

 
—

Operating cash payments on finance leases
 
699

 
—

Finance cash payments on finance leases
 
2,580

 
—

Non cash financing activities:
 
 
 
 
Right of use assets obtained in exchange for operating lease obligations
 
$
1,608

 
$
—

Right of use assets obtained in exchange for finance leases obligations
 
9,442

 
—

 
10. LEASES

We lease construction and office equipment, distribution facilities and office space. Leases with an initial term of 12 months or less, including month to month leases, are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASC 842, we combine lease and nonlease components. While we also own mineral leases for mining operations, those leases are outside the scope of ASC 842. Assets acquired under finance leases are included in property, plant and equipment.

Many of our leases include options to purchase the leased equipment. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease expense were as follows:




 
March 30, 2019
Operating lease cost
$
2,455

Variable lease cost
72

Short-term lease cost
6,581

Financing lease cost:
 
Amortization of right-of-use assets
2,623

Interest on lease liabilities
755

Total lease cost
$
12,486

 
 
Supplemental balance sheet information related to leases:
 
Operating leases:
 
Operating lease right-of-use assets
$
34,403

 
 
Current operating lease liabilities
$
8,098

Noncurrent operating lease liabilities
27,200

Total operating lease liabilities
$
35,298

Finance leases:
 
Property and equipment, gross
$
75,132

Less accumulated depreciation
(20,581
)
Property and equipment, net
$
54,551

 
 
Current finance lease liabilities
$
17,407

Long-term finance lease liabilities
37,851

Total finance lease liabilities
$
55,258

 
 
 
March 30, 2019
 
Lease Term
Discount Rate
 
(years)
(%)
Weighted average:
 
 
Operating leases
7.9

5.6
%
Finance lease
2.8

5.3
%
 
 
 
Maturities of lease liabilities were as follows:
 
 
 
Operating Leases
Finance Leases
2019 (nine months)
$
7,228

$
15,217

2020
8,737

15,703

2021
7,138

17,974

2022
4,370

6,556

2023
3,419

1,509

2024
2,235

1,750

Thereafter
11,212

2,667

Total lease payments
44,339

61,376

Less imputed interest
(9,041
)
(6,118
)
Present value of lease payments
$
35,298

$
55,258


As previously disclosed, our future minimum lease payment obligations as of December 29, 2018 were as follows:




 
Operating Leases
2019
$
9,479

2020
8,101

2021
6,701

2022
4,279

2023
3,411


11. COMMITMENTS AND CONTINGENCIES
 
The Company is party to certain legal actions arising from the ordinary course of business activities. Accruals are recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be predicted with certainty, management expects that the ultimate resolution of all current pending or threatened claims and litigation will not have a material effect on the Company’s consolidated financial position, results of operations or liquidity. The Company records legal fees as incurred.

In March 2018, we were notified of an investigation by the Canadian Competition Bureau (the “CCB”) into pricing practices by certain asphalt paving contractors in British Columbia, including Winvan Paving, Ltd. (“Winvan”). We believe the investigation is focused on time periods prior to our April 2017 acquisition of Winvan and we are cooperating with the CCB.
 
Environmental Remediation and Site Restoration—The Company’s operations are subject to and affected by federal, state, provincial and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. The Company regularly monitors and reviews its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of the Company’s business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities or noncompliance will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.
 
The Company has asset retirement obligations arising from regulatory and contractual requirements to perform reclamation activities at the time certain quarries and landfills are closed. As of March 30, 2019 and December 29, 2018, $28.1 million and $26.9 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and $4.0 million and $4.1 million, respectively, were included in accrued expenses for future reclamation costs. The total undiscounted anticipated costs for site reclamation as of March 30, 2019 and December 29, 2018 were $93.3 million and $92.5 million, respectively.
 
Other—The Company is obligated under various firm purchase commitments for certain raw materials and services that are in the ordinary course of business. Management does not expect any significant changes in the market value of these goods and services during the commitment period that would have a material adverse effect on the financial condition, results of operations and cash flows of the Company. The terms of the purchase commitments generally approximate one year.
 
12. FAIR VALUE
 
Fair Value Measurements—Certain acquisitions made by the Company require the payment of contingent amounts of purchase consideration. These payments are contingent on specified operating results being achieved in periods subsequent to the acquisition and will only be made if earn-out thresholds are achieved. Contingent consideration obligations are measured at fair value each reporting period. Any adjustments to fair value are recognized in earnings in the period identified.
 
The Company has entered into interest rate derivatives on $200.0 million of its term loan borrowings to add stability to interest expense and to manage its exposure to interest rate movements. The interest rate derivative expires in September 2019. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and will be subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The fair value of contingent consideration and derivatives as of March 30, 2019 and December 29, 2018 was: 




 
 
March 30, 2019
 
December 29, 2018
Current portion of acquisition-related liabilities and Accrued expenses:
 
 
 
 
Contingent consideration
 
$
4,568

 
$
1,394

Cash flow hedges
 
—

 
—

Acquisition-related liabilities and Other noncurrent liabilities:
 
 
 
 
Contingent consideration
 
$
1,205

 
$
5,175

Cash flow hedges
 
—

 
—

 
The fair value of contingent consideration was based on unobservable, or Level 3, inputs, including projected probability-weighted cash payments and a 10.0% discount rate, which reflects a market discount rate. Changes in fair value may occur as a result of a change in actual or projected cash payments, the probability weightings applied by the Company to projected payments or a change in the discount rate. Significant increases or decreases in any of these inputs in isolation could result in a lower, or higher, fair value measurement. The fair value of the cash flow hedges is based on observable, or Level 2, inputs such as interest rates, bond yields and prices in inactive markets. There were no material valuation adjustments to contingent consideration or derivatives as of March 30, 2019 and March 31, 2018.

Financial Instruments—The Company’s financial instruments include debt and certain acquisition-related liabilities (deferred consideration and noncompete obligations). The carrying value and fair value of these financial instruments as of March 30, 2019 and December 29, 2018 was:
 
 
March 30, 2019
 
December 29, 2018
 
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
Level 2
 
 
 
 
 
 
 
 
Long-term debt(1)
 
$
1,865,816

 
$
1,875,099

 
$
1,777,722

 
$
1,828,159

Level 3
 
 
 
 
 
 
 
 
Current portion of deferred consideration and noncompete obligations(2)
 
30,354

 
30,354

 
30,376

 
30,376

Long term portion of deferred consideration and noncompete obligations(3)
 
35,921

 
35,921

 
40,179

 
40,179

(1)
$4.8 million and $6.4 million were included in current portion of debt as of March 30, 2019 and December 29, 2018, respectively.
(2)
Included in current portion of acquisition-related liabilities on the consolidated balance sheets.
(3)
Included in acquisition-related liabilities on the consolidated balance sheets.

The fair value of debt was determined based on observable, or Level 2 inputs, such as interest rates, bond yields and quoted prices in inactive markets. The fair values of the deferred consideration and noncompete obligations were determined based on unobservable, or Level 3, inputs, including the cash payment terms in the purchase agreements and a discount rate reflecting the Company’s credit risk. The discount rate used is generally consistent with that used when the obligations were initially recorded.
 
Securities with a maturity of three months or less are considered cash equivalents and the fair value of these assets approximates their carrying value.
 
13. SEGMENT INFORMATION
 
The Company has three operating segments: West, East, and Cement, which are its reporting segments. These segments are consistent with the Company’s management reporting structure.
 
The operating results of each segment are regularly reviewed and evaluated by the Chief Executive Officer, our Company’s Chief Operating Decision Maker (“CODM”). The CODM primarily evaluates the performance of the Company’s segments and allocates resources to them based on a segment profit metric that we call Adjusted EBITDA, which is computed as earnings from continuing operations before interest, taxes, depreciation, depletion, amortization, accretion, share-based compensation, and transaction costs, as well as various other non-recurring, non-cash amounts.
 
The West and East segments have several acquired subsidiaries that are engaged in various activities including quarry mining, aggregate production and contracting. The Cement segment is engaged in the production of Portland cement. Assets employed




by each segment include assets directly identified with those operations. Corporate assets consist primarily of cash, property, plant and equipment for corporate operations and other assets not directly identifiable with a reportable business segment. The accounting policies applicable to each segment are consistent with those used in the consolidated financial statements.

The following tables display selected financial data for the Company’s reportable business segments as of March 30, 2019 and December 29, 2018 and for the three months ended March 30, 2019 and March 31, 2018:
 
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Revenue*:
 
 
 
 
West
 
$
181,945

 
$
181,713

East
 
113,388

 
95,157

Cement
 
37,306

 
37,551

Total revenue
 
$
332,639

 
$
314,421

*Intercompany sales are immaterial and the presentation above only reflects sales to external customers.
 
 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Loss from operations before taxes
 
$
(99,370
)
 
$
(72,440
)
Interest expense
 
29,937

 
28,570

Depreciation, depletion and amortization
 
54,807

 
46,543

Accretion
 
581

 
415

Loss on debt financings
 
14,565

 
—

Transaction costs
 
308

 
1,266

Non-cash compensation
 
5,906

 
8,507

Other
 
(146
)
 
(7,348
)
Total Adjusted EBITDA
 
$
6,588

 
$
5,513

 
 
 
 
 
Total Adjusted EBITDA by Segment:
 
 
 
 
West
 
$
14,298

 
$
16,173

East
 
3,242

 
(3,203
)
Cement
 
(2,587
)
 
3,667

Corporate and other
 
(8,365
)
 
(11,124
)
Total Adjusted EBITDA
 
$
6,588

 
$
5,513

 
 
 
Three months ended
 
 
March 30, 2019
 
March 31, 2018
Purchases of property, plant and equipment
 
 
 
 
West
 
$
30,375

 
$
28,909

East
 
24,428

 
14,464

Cement
 
6,893

 
4,468

Total reportable segments
 
61,696

 
47,841

Corporate and other
 
492

 
1,664

Total purchases of property, plant and equipment
 
$
62,188

 
$
49,505

 




 
 
Three months ended
 
 
March 30,
 
March 31,
 
 
2019
 
2018
Depreciation, depletion, amortization and accretion:
 
 
 
 
West
 
$
23,925

 
$
22,151

East
 
20,211

 
17,727

Cement
 
10,300

 
6,370

Total reportable segments
 
54,436

 
46,248

Corporate and other
 
952

 
710

Total depreciation, depletion, amortization and accretion
 
$
55,388

 
$
46,958


 
 
March 30, 2019
 
December 29, 2018
Total assets:
 
 
 
 
West
 
$
1,379,580

 
$
1,370,501

East
 
1,269,669

 
1,253,640

Cement
 
875,966

 
877,586

Total reportable segments
 
3,525,215

 
3,501,727

Corporate and other
 
84,042

 
131,517

Total
 
$
3,609,257

 
$
3,633,244

 
14. GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION
 
Summit LLC’s domestic wholly-owned subsidiary companies other than Finance Corp. are named as guarantors (collectively, the “Guarantors”) of the Senior Notes. Finance Corp. does not and will not have any assets or operations other than as may be incidental to its activities as a co-issuer of the Senior Notes and other indebtedness. Certain other partially-owned subsidiaries and a non-U.S. entity do not guarantee the Senior Notes (collectively, the “Non-Guarantors”). The Guarantors provide a joint and several, full and unconditional guarantee of the Senior Notes.
 
There are no significant restrictions on Summit LLC’s ability to obtain funds from any of the Guarantor Subsidiaries in the form of dividends or loans. Additionally, there are no significant restrictions on a Guarantor Subsidiary’s ability to obtain funds from Summit LLC or its direct or indirect subsidiaries.
 
The following condensed consolidating balance sheets, statements of operations and cash flows are provided for the Issuers, the wholly-owned guarantors and the Non-Guarantors.
 
Earnings from subsidiaries are included in other income in the condensed consolidated statements of operations below. The financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the guarantor or non-guarantor subsidiaries operated as independent entities.





Condensed Consolidating Balance Sheets
March 30, 2019
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors 
 
Eliminations 
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
69,094

 
$
1,327

 
$
3,733

 
$
(9,317
)
 
$
64,837

Accounts receivable, net
 
9

 
182,644

 
12,934

 
(176
)
 
195,411

Intercompany receivables
 
480,922

 
601,070

 
—

 
(1,081,992
)
 
—

Cost and estimated earnings in excess of billings
 
—

 
15,609

 
1,470

 
—

 
17,079

Inventories
 
—

 
210,662

 
3,376

 
—

 
214,038

Other current assets
 
1,963

 
13,908

 
3,374

 
—

 
19,245

Total current assets
 
551,988

 
1,025,220

 
24,887

 
(1,091,485
)
 
510,610

Property, plant and equipment, net
 
12,817

 
1,727,295

 
59,829

 
—

 
1,799,941

Goodwill
 
—

 
1,138,807

 
57,455

 
—

 
1,196,262

Intangible assets, net
 
—

 
18,051

 
—

 
—

 
18,051

Operating lease right-of-use assets
 
3,819

 
25,004

 
5,580

 
—

 
34,403

Other assets
 
3,270,321

 
153,303

 
1,005

 
(3,374,639
)
 
49,990

Total assets
 
$
3,838,945

 
$
4,087,680

 
$
148,756

 
$
(4,466,124
)
 
$
3,609,257

Liabilities and Member’s Interest
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Current portion of debt
 
$
4,765

 
$
—

 
$
—

 
$
—

 
$
4,765

Current portion of acquisition-related liabilities
 
—

 
34,922

 
—

 
—

 
34,922

Accounts payable
 
2,435

 
92,173

 
8,022

 
(176
)
 
102,454

Accrued expenses
 
37,556

 
66,582

 
1,886

 
(9,317
)
 
96,707

Current operating lease liabilities
 
721

 
6,365

 
1,012

 
—

 
8,098

Intercompany payables
 
630,962

 
434,273

 
16,757

 
(1,081,992
)
 
—

Billings in excess of costs and estimated earnings
 
—

 
10,129

 
527

 
—

 
10,656

Total current liabilities
 
676,439

 
644,444

 
28,204

 
(1,091,485
)
 
257,602

Long-term debt
 
1,855,346

 
—

 
—

 
—

 
1,855,346

Acquisition-related liabilities
 
—

 
37,126

 
—

 
—

 
37,126

Noncurrent operating lease liabilities
 
4,058

 
18,777

 
4,365

 
—

 
27,200

Other noncurrent liabilities
 
3,372

 
222,786

 
77,412

 
(171,317
)
 
132,253

Total liabilities
 
2,539,215

 
923,133

 
109,981

 
(1,262,802
)
 
2,309,527

Total member's interest
 
1,299,730

 
3,164,547

 
38,775

 
(3,203,322
)
 
1,299,730

Total liabilities and member’s interest
 
$
3,838,945

 
$
4,087,680

 
$
148,756

 
$
(4,466,124
)
 
$
3,609,257

        




Condensed Consolidating Balance Sheets
December 29, 2018
 
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors 
 
Eliminations 
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
117,219

 
$
8,440

 
$
7,719

 
$
(4,870
)
 
$
128,508

Accounts receivable, net
 
—

 
199,538

 
15,165

 
(185
)
 
214,518

Intercompany receivables
 
500,765

 
624,427

 
—

 
(1,125,192
)
 
—

Cost and estimated earnings in excess of billings
 
—

 
17,711

 
891

 
—

 
18,602

Inventories
 
—

 
210,149

 
3,702

 
—

 
213,851

Other current assets
 
1,953

 
11,308

 
2,800

 
—

 
16,061

Total current assets
 
619,937

 
1,071,573

 
30,277

 
(1,130,247
)
 
591,540

Property, plant and equipment, net
 
13,300

 
1,709,083

 
57,749

 
—

 
1,780,132

Goodwill
 
—

 
1,136,785

 
56,243

 
—

 
1,193,028

Intangible assets, net
 
—

 
18,460

 
—

 
—

 
18,460

Other assets
 
3,292,851

 
154,080

 
947

 
(3,397,794
)
 
50,084

Total assets
 
$
3,926,088

 
$
4,089,981

 
$
145,216

 
$
(4,528,041
)
 
$
3,633,244

Liabilities and Member’s Interest
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Current portion of debt
 
$
6,354

 
$
—

 
$
—

 
$
—

 
$
6,354

Current portion of acquisition-related liabilities
 
—

 
31,770

 
—

 
—

 
31,770

Accounts payable
 
4,712

 
92,132

 
12,349

 
(185
)
 
109,008

Accrued expenses
 
45,146

 
57,826

 
1,927

 
(4,870
)
 
100,029

Intercompany payables
 
673,175

 
436,564

 
15,453

 
(1,125,192
)
 
—

Billings in excess of costs and estimated earnings
 
—

 
11,347

 
493

 
—

 
11,840

Total current liabilities
 
729,387

 
629,639

 
30,222

 
(1,130,247
)
 
259,001

Long-term debt
 
1,807,502

 
—

 
—

 
—

 
1,807,502

Acquisition-related liabilities
 
—

 
45,354

 
—

 
—

 
45,354

Other noncurrent liabilities
 
3,768

 
226,137

 
77,368

 
(171,317
)
 
135,956

Total liabilities
 
2,540,657

 
901,130

 
107,590

 
(1,301,564
)
 
2,247,813

Total member's interest
 
1,385,431

 
3,188,851

 
37,626

 
(3,226,477
)
 
1,385,431

Total liabilities and member’s interest
 
$
3,926,088

 
$
4,089,981

 
$
145,216

 
$
(4,528,041
)
 
$
3,633,244






Condensed Consolidating Statements of Operations
For the three months ended March 30, 2019
 
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors 
 
Eliminations
 
Consolidated 
Revenue
 
$
—

 
$
318,181

 
$
15,641

 
$
(1,183
)
 
$
332,639

Cost of revenue (excluding items shown separately below)
 
—

 
256,166

 
12,021

 
(1,183
)
 
267,004

General and administrative expenses
 
14,930

 
50,032

 
2,956

 
—

 
67,918

Depreciation, depletion, amortization and accretion
 
952

 
52,920

 
1,516

 
—

 
55,388

Operating (loss) income
 
(15,882
)
 
(40,937
)
 
(852
)
 
—

 
(57,671
)
Other (income) loss, net
 
43,611

 
(1,942
)
 
(403
)
 
(29,504
)
 
11,762

Interest expense (income)
 
31,697

 
(2,964
)
 
1,204

 
—

 
29,937

Gain on sale of business
 
—

 
—

 
—

 
—

 
—

Income from operations before taxes
 
(91,190
)
 
(36,031
)
 
(1,653
)
 
29,504

 
(99,370
)
Income tax expense
 
374

 
(7,737
)
 
(443
)
 
—

 
(7,806
)
Net income attributable to member of Summit Materials, LLC
 
$
(91,564
)
 
$
(28,294
)
 
$
(1,210
)
 
$
29,504

 
$
(91,564
)
Comprehensive income attributable to member of Summit Materials, LLC
 
$
(89,372
)
 
$
(28,128
)
 
$
(3,568
)
 
$
31,696

 
$
(89,372
)

Condensed Consolidating Statements of Operations
For the three months ended March 31, 2018
 
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors
 
Eliminations
 
Consolidated
Revenue
 
$
—

 
$
300,658

 
$
15,181

 
$
(1,418
)
 
$
314,421

Cost of revenue (excluding items shown separately below)
 
—

 
238,127

 
11,152

 
(1,418
)
 
247,861

General and administrative expenses
 
20,947

 
47,177

 
3,003

 
—

 
71,127

Depreciation, depletion, amortization and accretion
 
710

 
44,993

 
1,255

 
—

 
46,958

Operating (loss) income
 
(21,657
)
 
(29,639
)
 
(229
)
 
—

 
(51,525
)
Other income, net
 
17,365

 
(6,858
)
 
51

 
(18,213
)
 
(7,655
)
Interest expense (income)
 
29,582

 
(2,203
)
 
1,191

 
—

 
28,570

Income from operations before taxes
 
(68,604
)
 
(20,578
)
 
(1,471
)
 
18,213

 
(72,440
)
Income tax expense (benefit)
 
(8
)
 
(3,454
)
 
(382
)
 
—

 
(3,844
)
Net income attributable to member of Summit Materials, LLC
 
$
(68,596
)
 
$
(17,124
)
 
$
(1,089
)
 
$
18,213

 
$
(68,596
)
Comprehensive income (loss) attributable to member of Summit Materials, LLC
 
$
(70,705
)
 
$
(18,119
)
 
$
2,015

 
$
16,104

 
$
(70,705
)





Condensed Consolidating Statements of Cash Flows
For the three months ended March 30, 2019
 
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
 
$
(57,399
)
 
$
26,570

 
$
153

 
$
—

 
$
(30,676
)
Cash flow from investing activities:
 
 
 
 
 
 
 
 
 
 
Acquisitions, net of cash acquired
 
—

 
(2,842
)
 
—

 
—

 
(2,842
)
Purchase of property, plant and equipment
 
(492
)
 
(57,326
)
 
(4,370
)
 
—

 
(62,188
)
Proceeds from the sale of property, plant, and equipment
 
—

 
2,791

 
6

 
—

 
2,797

Other
 
—

 
(178
)
 
—

 
—

 
(178
)
Net cash used for investing activities
 
(492
)
 
(57,555
)
 
(4,364
)
 
—

 
(62,411
)
Cash flow from financing activities:
 


 


 


 


 


Proceeds from investment by member
 
(2,075
)
 
2,841

 
—

 
—

 
766

Net proceeds from debt issuance
 
300,000

 
—

 
—

 
—

 
300,000

Loans received from and payments made on loans from other Summit Companies
 
(26,242
)
 
30,576

 
113

 
(4,447
)
 
—

Payments on long-term debt
 
(253,178
)
 
(3,076
)
 
(79
)
 
—

 
(256,333
)
Payments on acquisition-related liabilities
 
—

 
(6,433
)
 
—

 
—

 
(6,433
)
Debt issuance costs
 
(5,774
)
 
—

 
—

 
—

 
(5,774
)
Distributions from partnership
 
(2,500
)
 
—

 
—

 
—

 
(2,500
)
Other
 
(465
)
 
(36
)
 
—

 
—

 
(501
)
Net cash (used in) provided by financing activities
 
9,766

 
23,872

 
34

 
(4,447
)
 
29,225

Impact of cash on foreign currency
 
—

 
—

 
191

 
—

 
191

Net decrease in cash
 
(48,125
)
 
(7,113
)
 
(3,986
)
 
(4,447
)
 
(63,671
)
Cash — Beginning of period
 
117,219

 
8,440

 
7,719

 
(4,870
)
 
128,508

Cash — End of period
 
$
69,094

 
$
1,327

 
$
3,733

 
$
(9,317
)
 
$
64,837




























Condensed Consolidating Statements of Cash Flows
For the three months ended March 31, 2018
 
 
 
 
 
100%
 
 
 
 
 
 
 
 
 
 
Owned
 
Non-
 
 
 
 
 
 
Issuers
 
Guarantors 
 
Guarantors
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
 
$
(38,210
)
 
$
(15,050
)
 
$
1,893

 
$
—

 
$
(51,367
)
Cash flow from investing activities:
 
 
 
 
 
 
 
 
 
 
Acquisitions, net of cash acquired
 
—

 
(113,993
)
 
—

 
—

 
(113,993
)
Purchase of property, plant and equipment
 
(1,664
)
 
(46,363
)
 
(1,478
)
 
—

 
(49,505
)
Proceeds from the sale of property, plant, and equipment
 
—

 
7,668

 
120

 
—

 
7,788

Other
 
—

 
1,500

 
—

 
—

 
1,500

Net cash used for investing activities
 
(1,664
)
 
(151,188
)
 
(1,358
)
 
—

 
(154,210
)
Cash flow from financing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from investment by member
 
(73,661
)
 
89,136

 
—

 
—

 
15,475

Loans received from and payments made on loans from other Summit Companies
 
(83,090
)
 
82,599

 
(2,192
)
 
2,683

 
—

Payments on long-term debt
 
(1,588
)
 
(2,380
)
 
(4
)
 
—

 
(3,972
)
Payments on acquisition-related liabilities
 
—

 
(6,462
)
 
—

 
—

 
(6,462
)
Distributions from partnership
 
(2,509
)
 
—

 
—

 
—

 
(2,509
)
Other
 
(827
)
 
(960
)
 
(33
)
 
—

 
(1,820
)
Net cash provided by financing activities
 
(161,675
)
 
161,933

 
(2,229
)
 
2,683

 
712

Impact of cash on foreign currency
 
—

 
—

 
(398
)
 
—

 
(398
)
Net increase in cash
 
(201,549
)
 
(4,305
)
 
(2,092
)
 
2,683

 
(205,263
)
Cash — Beginning of period
 
370,741

 
10,254

 
14,933

 
(12,372
)
 
383,556

Cash — End of period
 
$
169,192

 
$
5,949

 
$
12,841

 
$
(9,689
)
 
$
178,293