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Summit Materials (SUM)

Filed: 28 Oct 20, 12:43pm


Exhibit 99.1
 
SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
 
 September 26,December 28,
 20202019
 (unaudited)(audited)
Assets  
Current assets:  
Cash and cash equivalents$288,757 $311,319 
Accounts receivable, net309,377 253,256 
Costs and estimated earnings in excess of billings44,001 13,088 
Inventories209,774 204,787 
Other current assets13,632 13,831 
Total current assets865,541 796,281 
Property, plant and equipment, less accumulated depreciation, depletion and amortization (September 26, 2020 - $1,088,710 and December 28, 2019 - $955,815)1,763,066 1,747,449 
Goodwill1,304,086 1,200,699 
Intangible assets, less accumulated amortization (September 26, 2020 - $12,467 and December 28, 2019 - $10,366)37,923 23,498 
Operating lease right-of-use assets28,551 32,777 
Other assets52,103 55,519 
Total assets$4,051,270 $3,856,223 
Liabilities and Members' Interest  
Current liabilities:  
Current portion of debt$7,942 $7,942 
Current portion of acquisition-related liabilities29,592 30,200 
Accounts payable150,086 116,970 
Accrued expenses144,295 120,237 
Current operating lease liabilities8,193 8,427 
Billings in excess of costs and estimated earnings14,225 13,864 
Total current liabilities354,333 297,640 
Long-term debt1,893,212 1,851,057 
Acquisition-related liabilities12,876 17,666 
Noncurrent operating lease liabilities21,327 25,381 
Other noncurrent liabilities155,011 151,329 
Total liabilities2,436,759 2,343,073 
Commitments and contingencies (see note 11)
Members' equity1,452,758 1,432,718 
Accumulated earnings186,119 101,403 
Accumulated other comprehensive loss(24,366)(20,971)
Total members' interest1,614,511 1,513,150 
Total liabilities and members' interest$4,051,270 $3,856,223 
 
See notes to unaudited consolidated financial statements.





SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands)
 
 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Revenue:    
Product$540,904 $554,721 $1,334,471 $1,293,999 
Service104,342 111,126 228,421 230,389 
Net revenue645,246 665,847 1,562,892 1,524,388 
Delivery and subcontract revenue64,373 66,235 144,926 141,224 
Total revenue709,619 732,082 1,707,818 1,665,612 
Cost of revenue (excluding items shown separately below):
Product331,853 338,119 857,912 846,702 
Service72,778 78,625 162,479 167,550 
Net cost of revenue404,631 416,744 1,020,391 1,014,252 
Delivery and subcontract cost64,373 66,235 144,926 141,224 
Total cost of revenue469,004 482,979 1,165,317 1,155,476 
General and administrative expenses81,499 62,344 218,267 190,915 
Depreciation, depletion, amortization and accretion58,054 55,127 163,760 164,140 
Transaction costs445 751 1,517 1,449 
Operating income100,617 130,881 158,957 153,632 
Interest expense24,561 28,800 77,807 88,020 
Loss on debt financings4,064 4,064 14,565 
Other income, net(1,226)(1,875)(2,753)(8,354)
Income from operations before taxes73,218 103,956 79,839 59,401 
Income tax (benefit) expense(5,106)18,757 (4,877)12,265 
Net income attributable to Summit LLC$78,324 $85,199 $84,716 $47,136 
 
See notes to unaudited consolidated financial statements.





SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income
(In thousands)
 
 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Net income$78,324 $85,199 $84,716 $47,136 
Other comprehensive income (loss):    
Foreign currency translation adjustment2,018 (1,328)(3,395)3,263 
Income (loss) on cash flow hedges155 (148)
Other comprehensive income (loss)2,018 (1,173)(3,395)3,115 
Comprehensive income attributable to Summit LLC$80,342 $84,026 $81,321 $50,251 
 
See notes to unaudited consolidated financial statements.





SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 
 Nine months ended
 September 26, 2020September 28, 2019
Cash flow from operating activities:  
Net income$84,716 $47,136 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation, depletion, amortization and accretion164,155 166,594 
Share-based compensation expense23,119 15,424 
Net gain on asset disposals(5,746)(8,030)
Non-cash loss on debt financings4,064 2,850 
Change in deferred tax asset, net(7,519)11,153 
Other760 (1,609)
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net(48,361)(121,196)
Inventories(2,829)16,296 
Costs and estimated earnings in excess of billings(30,912)(31,085)
Other current assets(75)5,635 
Other assets8,367 4,992 
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable21,729 51,728 
Accrued expenses3,164 9,142 
Billings in excess of costs and estimated earnings395 618 
Other liabilities3,012 (5,805)
Net cash provided by operating activities218,039 163,843 
Cash flow from investing activities:
Acquisitions, net of cash acquired(123,195)(2,842)
Purchases of property, plant and equipment(140,006)(139,762)
Proceeds from the sale of property, plant and equipment8,848 13,035 
Other1,395 (207)
Net cash used for investing activities(252,958)(129,776)
Cash flow from financing activities:
Capital contributions by member329 2,559 
Proceeds from debt issuances700,000 300,000 
Debt issuance costs(9,565)(6,312)
Payments on debt(666,892)(264,906)
Payments on acquisition-related liabilities(7,891)(8,500)
Distributions(2,500)(2,500)
Other(908)(501)
Net cash provided by financing activities12,573 19,840 
Impact of foreign currency on cash(216)174 
Net (decrease) increase in cash(22,562)54,081 
Cash and cash equivalents – beginning of period311,319 128,508 
Cash and cash equivalents – end of period$288,757 $182,589 
 
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 
   otherTotal
 Member’sAccumulatedcomprehensivemember’s
 equityearnings (deficit)lossinterest
Balance — December 28, 2019$1,432,718 $101,403 $(20,971)$1,513,150 
Net contributed capital310 — — 310 
Net loss— (63,625)— (63,625)
Other comprehensive loss— — (8,359)(8,359)
Distributions(2,500)— — (2,500)
Share-based compensation4,905 — — 4,905 
Shares redeemed to settle taxes and other(908)— — (908)
Balance — March 28, 2020$1,434,525 $37,778 $(29,330)$1,442,973 
Net income— 70,017 — 70,017 
Other comprehensive income— — 2,946 2,946 
Share-based compensation4,892 — — 4,892 
Balance — June 27, 2020$1,439,417 $107,795 $(26,384)$1,520,828 
Net contributed capital19 — — 19 
Net income— 78,324 — 78,324 
Other comprehensive income— — 2,018 2,018 
Share-based compensation13,322 — — 13,322 
Balance — September 26, 2020$1,452,758 $186,119 $(24,366)$1,614,511 
Balance — December 29, 2018$1,396,241 $12,806 $(23,616)$1,385,431 
Net contributed capital766 — — 766 
Net loss— (91,564)— (91,564)
Other comprehensive income— — 2,192 2,192 
Distributions(2,500)— — (2,500)
Share-based compensation5,906 — — 5,906 
Shares redeemed to settle taxes and other(501)— — (501)
Balance — March 30, 2019$1,399,912 $(78,758)$(21,424)$1,299,730 
Net contributed capital18 — — 18 
Net income— 53,501 — 53,501 
Other comprehensive income— — 2,096 2,096 
Share-based compensation4,699 — — 4,699 
Balance — June 29, 2019$1,404,629 $(25,257)$(19,328)$1,360,044 
Net contributed capital1,775 — — 1,775 
Net income— 85,199 — 85,199 
Other comprehensive loss— — (1,173)(1,173)
Share-based compensation4,819 — — 4,819 
Balance — September 28, 2019$1,411,223 $59,942 $(20,501)$1,450,664 
 
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, 2 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 3 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 28, 2019. 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 September 26, 2020, the results of operations for the three and nine months ended September 26, 2020 and September 28, 2019 and cash flows for the nine months ended September 26, 2020 and September 28, 2019.
 
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, Kansas, Utah 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 and nine months ended September 26, 2020 or September 28, 2019.
 
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 from the provision of services, which are primarily paving and related services.

Products: 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, which are typically calculated using monthly progress based on the percentage of completion or a customer’s engineer review of progress.

The majority of our construction service contracts are completed within one year, but may occasionally extend beyond this time frame. The majority of our construction service contracts are for work that occurs mostly during the spring, summer and fall. 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.

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.
 
New Accounting Standards—In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which reduces the accounting complexity of implementing a cloud computing service arrangement. The ASU aligns the capitalization of implementation costs among hosting arrangements and costs incurred to develop internal-use software. We adopted this ASU in the first quarter of 2020 and the adoption of this ASU did not have a material impact on the consolidated financial statements.

2. ACQUISITIONS, GOODWILL AND INTANGIBLES
 
The Company has completed numerous acquisitions since its formation, which have been financed through a combination of debt and equity funding and available cash. 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. Goodwill acquired during a business combination has an indefinite life and is not amortized. The following table summarizes the Company’s acquisitions by region and period:

Nine months endedYear ended
September 26, 2020December 28, 2019
West22
East1
 
The purchase price allocation, primarily the valuation of property, plant and equipment for the acquisitions completed during the nine months ended September 26, 2020, as well as the acquisitions completed during 2019 that occurred after September 28, 2019, have not yet been finalized due to the recent timing of the acquisitions, status of the valuation of property, plant and equipment and finalization of related tax returns. The following table summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates:




Nine months endedYear ended
September 26, 2020    December 28, 2019
Financial assets$8,866 $
Inventories2,328 52 
Property, plant and equipment17,069 3,542 
Other assets758 
Financial liabilities(3,980)(36)
Other long-term liabilities(6,473)
Net assets acquired18,568 3,558 
Goodwill105,280 1,834 
Purchase price123,848 5,392 
Other(652)
Net cash paid for acquisitions$123,196 $5,392 

Changes in the carrying amount of goodwill, by reportable segment, from December 28, 2019 to September 26, 2020 are summarized as follows:
 WestEastCement
Total  
Balance—December 28, 2019$585,617 $410,426 $204,656 $1,200,699 
Acquisitions (1)105,298 105,298 
Foreign currency translation adjustments(1,911)(1,911)
Balance—September 26, 2020$689,004 $410,426 $204,656 $1,304,086 
_______________________________________________________________________
(1) Reflects goodwill from acquisitions completed during the nine months ended September 26, 2020 and working capital adjustments from prior year acquisitions.

The Company’s intangible assets subject to amortization are primarily composed of operating permits, mineral lease agreements and reserve rights. Operating permits relate to permitting and zoning rights acquired outside of a business combination. 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 or permits. The following table shows intangible assets by type and in total:
 
 September 26, 2020December 28, 2019
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Operating permits$23,345 $(1,162)$22,183 $6,609 $(290)$6,319 
Mineral leases19,225 (7,286)11,939 19,064 (6,408)12,656 
Reserve rights6,234 (2,444)3,790 6,234 (2,248)3,986 
Trade names1,000 (1,000)1,000 (958)42 
Other586 (575)11 957 (462)495 
Total intangible assets$50,390 $(12,467)$37,923 $33,864 $(10,366)$23,498 
 
Amortization expense totaled $0.7 million and $2.3 million for the three and nine months ended September 26, 2020, respectively, and $0.6 million and $1.4 million for the three and nine months ended September 28, 2019, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to September 26, 2020 is as follows:
 



2020 (three months)$686 
20212,719 
20222,723 
20232,590 
20242,495 
20252,450 
Thereafter24,260 
Total$37,923 
 
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 and nine months ended September 26, 2020 and September 28, 2019 is as follows:
 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Revenue by product*:    
Aggregates$136,396 $137,528 $362,546 $354,050 
Cement82,698 92,482 188,854 202,780 
Ready-mix concrete179,124 172,758 488,710 444,258 
Asphalt128,125 137,753 255,992 254,156 
Paving and related services136,191 138,083 280,446 267,732 
Other47,085 53,478 131,270 142,636 
Total revenue$709,619 $732,082 $1,707,818 $1,665,612 
*Revenue from liquid asphalt terminals is included in asphalt revenue.

Accounts receivable, net consisted of the following as of September 26, 2020 and December 28, 2019:
 
 September 26, 2020December 28, 2019
Trade accounts receivable$231,663 $191,672 
Construction contract receivables62,183 47,966 
Retention receivables18,501 17,808 
Receivables from related parties1,918 1,596 
Accounts receivable314,265 259,042 
Less: Allowance for doubtful accounts(4,888)(5,786)
Accounts receivable, net$309,377 $253,256 
 
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 September 26, 2020 and December 28, 2019:
September 26, 2020December 28, 2019
Aggregate stockpiles$143,271 $140,461 
Finished goods31,657 33,023 
Work in process10,062 7,664 
Raw materials24,784 23,639 
Total$209,774 $204,787 
 




5. ACCRUED EXPENSES
 
Accrued expenses consisted of the following as of September 26, 2020 and December 28, 2019:
September 26, 2020December 28, 2019
Interest$11,413 $26,892 
Payroll and benefits37,862 29,356 
Finance lease obligations24,868 16,007 
Insurance16,888 14,968 
Non-income taxes19,180 7,898 
Deferred asset purchase payments9,686 3,525 
Professional fees788 902 
Other (1)23,610 20,689 
Total$144,295 $120,237 
_______________________________________________________________________
(1) Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.

6. DEBT
 
Debt consisted of the following as of September 26, 2020 and December 28, 2019:
September 26, 2020December 28, 2019
Term Loan, due 2024:  
$619.5 million and $624.3 million, net of $0.9 million and $1.1 million discount at September 26, 2020 and December 28, 2019, respectively$618,545 $623,140 
6 1/8% Senior Notes, due 2023:
  
$650.0 million, net of $0.9 million discount at December 28, 2019649,133 
5 1/8% Senior Notes, due 2025
300,000 300,000 
6 1/2% Senior Notes, due 2027
300,000 300,000 
5 1/4% Senior Notes, due 2029
700,000 
Total1,918,545 1,872,273 
Current portion of long-term debt7,942 7,942 
Long-term debt$1,910,603 $1,864,331 
 
The contractual payments of long-term debt, including current maturities, for the five years subsequent to September 26, 2020, are as follows:
2020 (three months)$3,177 
20216,353 
20226,354 
20236,354 
2024597,253 
2025300,000 
Thereafter1,000,000 
Total1,919,491 
Less: Original issue net discount(946)
Less: Capitalized loan costs(17,391)
Total debt$1,901,154 
 
Senior Notes—On August 11, 2020, Summit LLC and Summit Finance (together, the “Issuers”) issued $700.0 million in aggregate principal amount of 5.250% senior notes due January 15, 2029 (the “2029 Notes”). The 2029 Notes were issued at 100.0% of their par value with proceeds of $690.4 million, net of related fees and expenses. The 2029 Notes were issued under an indenture dated August 11, 2020 (the "2020 Indenture"). The 2020 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 2020 Indenture also contains customary events of default. Interest on the 2029 Notes is payable semi-annually on January 15 and July 15 of each year commencing on January 15, 2021.

In August 2020, using the proceeds from the 2029 Notes, all of the outstanding $650.0 million 6.125% senior notes due 2023 (the “2023 Notes”) were redeemed at a price equal to par and the indenture under which the 2023 Notes were issued was satisfied and discharged. As a result of the extinguishment, charges of $4.1 million were recognized in the quarter ended September 26, 2020, which included charges of $0.8 million for the write-off of original issue discount and $3.3 million for the write-off of deferred financing fees.

On March 15, 2019, 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. The 2027 Notes were issued under an indenture dated March 25, 2019, the terms of which are generally consistent with the 2020 Indenture. 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, the terms of which are generally consistent with the 2020 Indenture. 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 2020 Indenture. Interest on the 2023 Notes is payable semi-annually in arrears on January 15 and July 15 of each year.
 
As of September 26, 2020 and December 28, 2019, 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 with respect to the revolving credit commitments to February 25, 2024.
 
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 0 outstanding borrowings under the revolving credit facility as of September 26, 2020 and December 28, 2019, with borrowing capacity of $329.1 million remaining as of September 26, 2020, which is net of $15.9 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 September 26, 2020 and December 28, 2019, 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 nine months ended September 26, 2020 and September 28, 2019:
 Deferred financing fees
Balance—December 28, 2019$15,436 
Loan origination fees9,565 
Amortization(2,499)
Write off of deferred financing fees(3,338)
Balance—September 26, 2020$19,164 
  
  
Balance - December 29, 2018$15,475 
Loan origination fees6,312 
Amortization(2,668)
Write off of deferred financing fees(2,851)
Balance - September 28, 2019$16,268 
 
Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC Bank Canada 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) $0.3 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary. There were 0 amounts outstanding under this agreement as of September 26, 2020 or December 28, 2019.
 
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 and its subsidiaries expect additional unrecognized tax benefits related to the deductibility of interest expense in 2020 and 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. NaN material interest or penalties were recognized in income tax expense during the three and nine months ended September 26, 2020 and September 28, 2019. We recognized uncertain tax benefits in the three and nine months ended September 26, 2020 related to the passage of the Coronavirus Aid, Relief and Economic Stability Act (“CARES Act”) on March 25, 2020.

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 intranslationCash flow hedgecomprehensive
 retirement plansadjustmentsadjustments(loss) income
Balance — December 28, 2019$(6,317)$(14,654)$$(20,971)
Foreign currency translation adjustment— (3,395)— (3,395)
Balance — September 26, 2020$(6,317)$(18,049)$$(24,366)
Balance — December 29, 2018$(4,392)$(19,370)$146 $(23,616)
Foreign currency translation adjustment— 3,263 — 3,263 
Loss on cash flow hedges— — (148)(148)
Balance — September 28, 2019$(4,392)$(16,107)$(2)$(20,501)
 
9. SUPPLEMENTAL CASH FLOW INFORMATION
 
Supplemental cash flow information is as follows:
 Nine months ended
September 26, 2020September 28, 2019
Cash payments:  
Interest$86,427 $89,759 
Payments (refunds) for income taxes, net1,131 (912)
Operating cash payments on operating leases8,372 8,188 
Operating cash payments on finance leases2,402 2,322 
Finance cash payments on finance leases11,528 9,806 
Non cash financing activities:
Right of use assets obtained in exchange for operating lease obligations$2,931 $4,387 
Right of use assets obtained in exchange for finance leases obligations17,605 18,586 
 
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 Topic 842, we combine lease and nonlease components. While we also own mineral leases for mining operations, those leases are outside the scope of Topic 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:



Three months endedNine months ended
September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Operating lease cost$2,478 $2,608 $7,576 $7,757 
Variable lease cost90 151 253 366 
Short-term lease cost14,335 11,871 33,369 28,043 
Financing lease cost:
Amortization of right-of-use assets3,439 2,612 9,307 7,905 
Interest on lease liabilities780 773 2,329 2,404 
Total lease cost$21,122 $18,015 $52,834 $46,475 
September 26, 2020December 28, 2019
Supplemental balance sheet information related to leases:
Operating leases:
Operating lease right-of-use assets$28,551 $32,777 
Current operating lease liabilities$8,193 $8,427 
Noncurrent operating lease liabilities21,327 25,381 
Total operating lease liabilities$29,520 $33,808 
Finance leases:
Property and equipment, gross$92,873 $82,660 
Less accumulated depreciation(29,663)(24,907)
Property and equipment, net$63,210 $57,753 
Current finance lease liabilities$24,868 $16,007 
Long-term finance lease liabilities34,913 40,410 
Total finance lease liabilities$59,781 $56,417 
Weighted average remaining lease term (years):
Operating leases9.08.6
Finance lease2.62.6
Weighted average discount rate (%):
Operating leases5.4 %5.5 %
Finance lease5.2 %5.5 %
Maturities of lease liabilities were as follows:
Operating LeasesFinance Leases
2020 (three months)$2,444 $4,995 
20218,818 26,169 
20225,475 18,519 
20234,243 6,867 
20242,547 3,207 
20251,507 2,573 
Thereafter12,808 2,831 
Total lease payments37,842 65,161 
Less imputed interest(8,322)(5,380)
Present value of lease payments$29,520 $59,781 

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. Although we currently do not believe this matter will have a material adverse effect on our business, financial condition or results of operations, we are currently not able to predict the ultimate outcome or cost of the investigation.
 
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 September 26, 2020 and December 28, 2019, $33.2 million and $28.8 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and $6.9 million and $7.9 million, respectively, were included in accrued expenses for future reclamation costs. The total undiscounted anticipated costs for site reclamation as of September 26, 2020 and December 28, 2019 were $106.9 million and $97.4 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 fair value of contingent consideration as of September 26, 2020 and December 28, 2019 was: 
September 26, 2020December 28, 2019
Current portion of acquisition-related liabilities and Accrued expenses:  
Contingent consideration$525 $1,967 
Acquisition-related liabilities and Other noncurrent liabilities:
Contingent consideration$1,303 $1,302 
 
The fair value of contingent consideration was based on unobservable, or Level 3, inputs, including projected probability-weighted cash payments and a 9.5% 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. There were 0 material valuation adjustments to contingent consideration as of September 26, 2020 and September 28, 2019.

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 September 26, 2020 and December 28, 2019 was:



 September 26, 2020December 28, 2019
 Fair ValueCarrying ValueFair ValueCarrying Value
Level 2    
Long-term debt(1)$1,939,247 $1,918,545 $1,918,720 $1,872,273 
Level 3    
Current portion of deferred consideration and noncompete obligations(2)29,067 29,067 28,233 28,233 
Long term portion of deferred consideration and noncompete obligations(3)11,573 11,573 16,364 16,364 
(1)$7.9 million was included in current portion of debt as of September 26, 2020 and December 28, 2019.
(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 3 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 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 September 26, 2020 and December 28, 2019 and for the three and nine months ended September 26, 2020 and September 28, 2019:
 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Revenue*:    
West$390,310 $366,504 $919,016 $848,661 
East234,435 266,587 590,341 596,107 
Cement84,874 98,991 198,461 220,844 
Total revenue$709,619 $732,082 $1,707,818 $1,665,612 
*Intercompany sales are immaterial and the presentation above only reflects sales to external customers.
 



 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Income from operations before taxes$73,218 $103,956 $79,839 $59,401 
Interest expense24,561 28,800 77,807 88,020 
Depreciation, depletion and amortization57,364 54,575 161,912 162,417 
Accretion690 552 1,848 1,723 
Loss on debt financings4,064 4,064 14,565 
Transaction costs445 751 1,517 1,449 
Non-cash compensation13,322 4,819 23,119 15,424 
Other4,083 (136)4,287 (2,628)
Total Adjusted EBITDA$177,747 $193,317 $354,393 $340,371 
Total Adjusted EBITDA by Segment:
West$95,470 $81,936 $196,881 $151,054 
East56,943 76,825 119,900 134,479 
Cement35,086 42,683 63,172 75,537 
Corporate and other(9,752)(8,127)(25,560)(20,699)
Total Adjusted EBITDA$177,747 $193,317 $354,393 $340,371 
 
 Nine months ended
September 26, 2020September 28, 2019
Purchases of property, plant and equipment  
West$51,148 $61,679 
East75,006 61,830 
Cement12,097 15,087 
Total reportable segments138,251 138,596 
Corporate and other1,755 1,166 
Total purchases of property, plant and equipment$140,006 $139,762 
 
 Three months endedNine months ended
 September 26, 2020September 28, 2019September 26, 2020September 28, 2019
Depreciation, depletion, amortization and accretion:    
West$23,117 $23,307 $67,082 $70,156 
East22,803 19,668 65,293 59,719 
Cement11,155 11,111 28,425 31,280 
Total reportable segments57,075 54,086 160,800 161,155 
Corporate and other979 1,041 2,960 2,985 
Total depreciation, depletion, amortization and accretion$58,054 $55,127 $163,760 $164,140 

September 26, 2020December 28, 2019
Total assets:  
West$1,540,792 $1,379,684 
East1,347,883 1,288,835 
Cement868,458 868,528 
Total reportable segments3,757,133 3,537,047 
Corporate and other294,137 319,176 
Total$4,051,270 $3,856,223 
 



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
September 26, 2020
  100%   
  OwnedNon-  
 Issuers
Guarantors 
Guarantors 
Eliminations 
Consolidated
Assets     
Current assets:     
Cash and cash equivalents$277,052 $3,350 $12,943 $(4,588)$288,757 
Accounts receivable, net289,977 19,486 (87)309,377 
Intercompany receivables424,533 1,128,619 (1,553,152)
Cost and estimated earnings in excess of billings40,711 3,290 44,001 
Inventories203,217 6,557 209,774 
Other current assets2,219 9,724 1,689 13,632 
Total current assets703,805 1,675,598 43,965 (1,557,827)865,541 
Property, plant and equipment, net10,383 1,691,382 61,301 1,763,066 
Goodwill1,222,786 81,300 1,304,086 
Intangible assets, net37,923 37,923 
Operating lease right-of-use assets2,793 21,647 4,111 28,551 
Other assets3,922,503 197,286 671 (4,068,357)52,103 
Total assets$4,639,484 $4,846,622 $191,348 $(5,626,184)$4,051,270 
Liabilities and Member’s Interest
Current liabilities:
Current portion of debt$7,942 $$$$7,942 
Current portion of acquisition-related liabilities29,592 29,592 
Accounts payable5,935 135,658 8,580 (87)150,086 
Accrued expenses37,693 105,201 5,989 (4,588)144,295 
Current operating lease liabilities874 6,239 1,080 8,193 
Intercompany payables1,072,127 469,880 11,145 (1,553,152)
Billings in excess of costs and estimated earnings13,139 1,086 14,225 
Total current liabilities1,124,571 759,709 27,880 (1,557,827)354,333 
Long-term debt1,893,212 1,893,212 
Acquisition-related liabilities12,876 12,876 
Noncurrent operating lease liabilities2,801 15,600 2,926 21,327 
Other noncurrent liabilities4,389 207,881 107,162 (164,421)155,011 
Total liabilities3,024,973 996,066 137,968 (1,722,248)2,436,759 
Total member's interest1,614,511 3,850,556 53,380 (3,903,936)1,614,511 
Total liabilities and member’s interest$4,639,484 $4,846,622 $191,348 $(5,626,184)$4,051,270 
        



Condensed Consolidating Balance Sheets
December 28, 2019
 
  100%   
  OwnedNon-  
 Issuers
Guarantors 
Guarantors 
Eliminations 
Consolidated
Assets     
Current assets:     
Cash and cash equivalents$302,474 $5,488 $9,834 $(6,477)$311,319 
Accounts receivable, net234,053 19,236 (33)253,256 
Intercompany receivables443,323 942,385 (1,385,708)
Cost and estimated earnings in excess of billings12,291 797 13,088 
Inventories199,794 4,993 204,787 
Other current assets1,763 10,308 1,760 13,831 
Total current assets747,560 1,404,319 36,620 (1,392,218)796,281 
Property, plant and equipment, net11,602 1,674,443 61,404 1,747,449 
Goodwill1,142,063 58,636 1,200,699 
Intangible assets, net23,498 23,498 
Operating lease right-of-use assets3,316 24,551 4,910 32,777 
Other assets3,596,161 168,314 734 (3,709,690)55,519 
Total assets$4,358,639 $4,437,188 $162,304 $(5,101,908)$3,856,223 
Liabilities and Member’s Interest
Current liabilities:
Current portion of debt$7,942 $$$$7,942 
Current portion of acquisition-related liabilities30,200 30,200 
Accounts payable4,588 103,812 8,603 (33)116,970 
Accrued expenses51,043 72,970 2,701 (6,477)120,237 
Current operating lease liabilities764 6,571 1,092 8,427 
Intercompany payables922,356 447,827 15,525 (1,385,708)
Billings in excess of costs and estimated earnings12,183 1,681 13,864 
Total current liabilities986,693 673,563 29,602 (1,392,218)297,640 
Long-term debt1,851,057 1,851,057 
Acquisition-related liabilities17,666 17,666 
Noncurrent operating lease liabilities3,480 18,047 3,854 25,381 
Other noncurrent liabilities4,259 203,919 80,169 (137,018)151,329 
Total liabilities2,845,489 913,195 113,625 (1,529,236)2,343,073 
Total member's interest1,513,150 3,523,993 48,679 (3,572,672)1,513,150 
Total liabilities and member’s interest$4,358,639 $4,437,188 $162,304 $(5,101,908)$3,856,223 




Condensed Consolidating Statements of Operations
For the three months ended September 26, 2020

100%
OwnedNon-
IssuersGuarantors Guarantors EliminationsConsolidated 
Revenue$$689,842 $23,780 $(4,003)$709,619 
Cost of revenue (excluding items shown separately below)458,028 14,979 (4,003)469,004 
General and administrative expenses23,955 55,242 2,747 81,944 
Depreciation, depletion, amortization and accretion980 55,542 1,532 58,054 
Operating (loss) income(24,935)121,030 4,522 100,617 
Other (income) loss, net(134,672)(889)(276)138,675 2,838 
Interest expense (income)31,170 (7,990)1,381 24,561 
Income from operation before taxes78,567 129,909 3,417 (138,675)73,218 
Income tax expense (benefit)243 (6,286)937 (5,106)
Net income attributable to Summit LLC$78,324 $136,195 $2,480 $(138,675)$78,324 
Comprehensive income attributable to member of Summit Materials, LLC$80,342 $136,195 $462 $(136,657)$80,342 

Condensed Consolidating Statements of Operations
For the nine months ended September 26, 2020
 
  100%   
  OwnedNon-  
 Issuers
Guarantors 
Guarantors 
Eliminations
Consolidated 
Revenue$$1,659,526 $61,556 $(13,264)$1,707,818 
Cost of revenue (excluding items shown separately below)1,138,689 39,892 (13,264)1,165,317 
General and administrative expenses50,964 160,670 8,150 219,784 
Depreciation, depletion, amortization and accretion2,960 156,697 4,103 163,760 
Operating (loss) income(53,924)203,470 9,411 158,957 
Other (income) loss, net(235,001)(1,733)271 237,774 1,311 
Interest expense (income)95,379 (21,352)3,780 77,807 
Income from operation before taxes85,698 226,555 5,360 (237,774)79,839 
Income tax expense (benefit)982 (7,383)1,524 (4,877)
Net income attributable to Summit LLC$84,716 $233,938 $3,836 $(237,774)$84,716 
Comprehensive income attributable to member of Summit Materials, LLC$81,321 $233,938 $7,231 $(241,169)$81,321 





Condensed Consolidating Statements of Operations
For the three months ended September 28, 2019

100%
OwnedNon-
IssuersGuarantors GuarantorsEliminationsConsolidated
Revenue$$706,999 $29,186 $(4,103)$732,082 
Cost of revenue (excluding items shown separately below)467,595 19,487 (4,103)482,979 
General and administrative expenses13,603 46,816 2,676 63,095 
Depreciation, depletion, amortization and accretion1,042 52,739 1,346 55,127 
Operating (loss) income(14,645)139,849 5,677 130,881 
Other (income) loss, net(132,261)(1,501)222 131,665 (1,875)
Interest expense (income)32,129 (4,532)1,203 28,800 
Income from operation before taxes85,487 145,882 4,252 (131,665)103,956 
Income tax expense288 17,325 1,144 18,757 
Net income attributable to Summit LLC$85,199 $128,557 $3,108 $(131,665)$85,199 
Comprehensive income attributable to member of Summit Materials, LLC$84,026 $128,402 $4,436 $(132,838)$84,026 

Condensed Consolidating Statements of Operations
For the nine months ended September 28, 2019
 
  100%   
  OwnedNon-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Revenue$$1,603,338 $70,321 $(8,047)$1,665,612 
Cost of revenue (excluding items shown separately below)1,114,401 49,122 (8,047)1,155,476 
General and administrative expenses37,887 146,136 8,341 192,364 
Depreciation, depletion, amortization and accretion2,986 156,827 4,327 164,140 
Operating (loss) income(40,873)185,974 8,531 153,632 
Other (income) loss, net(183,971)(6,427)(553)197,162 6,211 
Interest expense (income)94,848 (10,443)3,615 88,020 
Income from operation before taxes48,250 202,844 5,469 (197,162)59,401 
Income tax expense1,114 9,673 1,478 12,265 
Net income attributable to Summit LLC$47,136 $193,171 $3,991 $(197,162)$47,136 
Comprehensive income attributable to member of Summit Materials, LLC$50,251 $193,319 $728 $(194,047)$50,251 




Condensed Consolidating Statements of Cash Flows
For the nine months ended September 26, 2020
 
  100%   
  OwnedNon-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(110,054)$288,198 $39,895 $$218,039 
Cash flow from investing activities:
Acquisitions, net of cash acquired(92,085)(31,110)(123,195)
Purchase of property, plant and equipment(1,755)(136,670)(1,581)(140,006)
Proceeds from the sale of property, plant, and equipment8,708 140 8,848 
Other1,395 1,395 
Net cash used for investing activities(1,755)(218,652)(32,551)(252,958)
Cash flow from financing activities:
Proceeds from investment by member(91,856)87,925 4,260 329 
Net proceeds from debt issuance700,000 700,000 
Loans received from and payments made on loans from other Summit Companies145,896 (139,650)(8,135)1,889 
Payments on long-term debt(654,765)(11,983)(144)(666,892)
Payments on acquisition-related liabilities(7,891)(7,891)
Debt issuance costs(9,565)(9,565)
Distributions from partnership(2,500)(2,500)
Other(823)(85)(908)
Net cash provided by (used in) financing activities86,387 (71,684)(4,019)1,889 12,573 
Impact of cash on foreign currency(216)(216)
Net (decrease) increase in cash(25,422)(2,138)3,109 1,889 (22,562)
Cash — Beginning of period302,474 5,488 9,834 (6,477)311,319 
Cash — End of period$277,052 $3,350 $12,943 $(4,588)$288,757 


























Condensed Consolidating Statements of Cash Flows
For the nine months ended September 28, 2019
 
  100%   
  OwnedNon-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(85,516)$241,172 $8,187 $$163,843 
Cash flow from investing activities:
Acquisitions, net of cash acquired(2,842)(2,842)
Purchase of property, plant and equipment(1,166)(129,170)(9,426)(139,762)
Proceeds from the sale of property, plant, and equipment12,950 85 13,035 
Other(207)(207)
Net cash used for investing activities(1,166)(119,269)(9,341)(129,776)
Cash flow from financing activities:
Proceeds from investment by member(35,581)38,140 2,559 
Net proceeds from debt issuance300,000 300,000 
Loans received from and payments made on loans from other Summit Companies147,325 (147,782)506 (49)
Payments on long-term debt(254,765)(9,965)(176)(264,906)
Payments on acquisition-related liabilities(8,500)(8,500)
Financing costs(6,312)(6,312)
Distributions from partnership(2,500)(2,500)
Other(462)(39)(501)
Net cash provided by (used in) financing activities147,705 (128,146)330 (49)19,840 
Impact of cash on foreign currency174 174 
Net increase (decrease) in cash61,023 (6,243)(650)(49)54,081 
Cash — Beginning of period117,219 8,440 7,719 (4,870)128,508 
Cash — End of period$178,242 $2,197 $7,069 $(4,919)$182,589