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SUM Summit Materials

Filed: 24 Feb 21, 1:49pm

Exhibit 99.1
Report of Independent Registered Public Accounting Firm
 
To the Members and Board of Directors
Summit Materials, LLC:

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Summit Materials, LLC and subsidiaries (the Company) as of January 2, 2021 and December 28, 2019, the related consolidated statements of operations, comprehensive income, changes in members’ interest, and cash flows for each of the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 2, 2021 and December 28, 2019, and the results of its operations and its cash flows for each of the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018 in conformity with U.S. generally accepted accounting principles.

Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of December 30, 2018 due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 842, Leases.

Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue recognized over time on paving and related services contracts
As discussed in Notes 1 and 4 to the consolidated financial statements, the Company earns revenue from providing paving and related services, which are recognized over time as performance obligations are satisfied. The Company recognizes paving and related services revenue as services are rendered based on the proportion of costs incurred to date relative to total estimated costs to complete. For the year ended January 2, 2021, the Company recognized service revenue related to paving and related services of $310 million.
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We identified the assessment of revenue recognized over time on paving and related services contracts in-progress as a critical audit matter. Paving and related services contracts in-progress required challenging auditor judgment to evaluate the forecast of remaining costs to complete, which had a significant impact on the amount of revenue recognized during the period.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition process related to paving and related services, including controls over the forecasting of estimated costs to complete. We selected a sample of in-progress paving and related services costs incurred and compared the amounts and dates incurred to underlying supporting documentation. We analyzed prior year end in-progress contracts that were completed in the current year to evaluate the Company’s ability to accurately estimate paving and related services contract forecasted costs to complete. For certain contracts, we evaluated the estimated costs to complete by performing project manager interviews to obtain an understanding of the facts and circumstances of each selected contract, including changes in scope to the contract, additional estimated costs to complete, and expected completion date. For certain contracts, we also confirmed with the Company’s customers that the original contract amount, terms of the contact, modifications and billings to the customer were accurate.

/s/ KPMG LLP

We have served as the Company’s auditor since 2012.
Denver, Colorado
February 24, 2021
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SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Balance Sheets
January 2, 2021 and December 28, 2019
(In thousands) 
 
 20202019
Assets  
Current assets:  
Cash and cash equivalents$418,181 $311,319 
Accounts receivable, net254,696 253,256 
Costs and estimated earnings in excess of billings8,666 13,088 
Inventories200,308 204,787 
Other current assets11,428 13,831 
Total current assets893,279 796,281 
Property, plant and equipment1,850,169 1,747,449 
Goodwill1,202,291 1,200,699 
Intangible assets47,852 23,498 
Operating lease right-of-use assets28,543 32,777 
Other assets55,000 55,519 
Total assets$4,077,134 $3,856,223 
Liabilities and Members' Interest
Current liabilities:
Current portion of debt$6,354 $7,942 
Current portion of acquisition-related liabilities7,827 30,200 
Accounts payable121,422 116,970 
Accrued expenses160,801 120,237 
Current operating lease liabilities8,188 8,427 
Billings in excess of costs and estimated earnings16,499 13,864 
Total current liabilities321,091 297,640 
Long-term debt1,892,347 1,851,057 
Acquisition-related liabilities12,246 17,666 
Noncurrent operating lease liabilities21,500 25,381 
Other noncurrent liabilities167,182 151,329 
Total liabilities2,414,366 2,343,073 
Commitments and contingencies (see note 15)
Members' equity1,459,211 1,432,718 
Accumulated earnings222,140 101,403 
Accumulated other comprehensive loss(18,583)(20,971)
Total members' interest1,662,768 1,513,150 
Total liabilities and members' interest$4,077,134 $3,856,223 
 
See accompanying notes to consolidated financial statements.

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended January 2, 2021, December 28, 2019 and December 29, 2018
(In thousands)
 
 202020192018
Revenue:   
Product$1,824,679 $1,724,462 $1,600,159 
Service310,075 306,185 309,099 
Net revenue2,134,754 2,030,647 1,909,258 
Delivery and subcontract revenue197,697 191,493 191,744 
Total revenue2,332,451 2,222,140 2,101,002 
Cost of revenue (excluding items shown separately below):
Product1,166,266 1,116,662 1,058,544 
Service220,033 218,177 225,491 
Net cost of revenue1,386,299 1,334,839 1,284,035 
Delivery and subcontract cost197,697 191,493 191,744 
Total cost of revenue1,583,996 1,526,332 1,475,779 
General and administrative expenses309,531 275,813 270,402 
Depreciation, depletion, amortization and accretion221,320 217,102 204,910 
Gain on sale of property, plant and equipment(7,569)(10,665)(12,555)
Operating income225,173 213,558 162,466 
Interest expense103,291 115,988 115,831 
Loss on debt financings4,064 14,565 149 
Gain on sale of business(12,108)
Other income, net(3,982)(11,977)(15,516)
Income from operations before taxes121,800 94,982 74,110 
Income tax expense (benefit)1,063 6,385 10,273 
Net income attributable to Summit LLC$120,737 $88,597 $63,837 
 
See accompanying notes to consolidated financial statements.

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Years ended January 2, 2021, December 28, 2019, and December 29, 2018
(In thousands)
 
 202020192018
Net income$120,737 $88,597 $63,837 
Other comprehensive income (loss):
Postretirement liability adjustment(2,229)(1,925)1,661 
Foreign currency translation adjustment4,617 4,716 (9,348)
Income (loss) on cash flow hedges(146)1,206 
Other comprehensive income (loss)2,388 2,645 (6,481)
Comprehensive income attributable to Summit LLC$123,125 $91,242 $57,356 
 
See accompanying notes to consolidated financial statements.

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended January 2, 2021, December 28, 2019, and December 29, 2018
(In thousands)
 202020192018
Cash flow from operating activities:   
Net income$120,737 $88,597 $63,837 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation, depletion, amortization and accretion227,513 222,341 208,055 
Share-based compensation expense28,857 20,403 25,378 
Net gain on asset disposals(7,548)(10,294)(30,093)
Non-cash loss on debt financings4,064 2,850 
Change in deferred tax asset, net(2,862)6,350 9,729 
Other619 (2,135)2,018 
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net5,467 (37,049)(5,796)
Inventories3,339 8,582 (11,598)
Costs and estimated earnings in excess of billings4,535 5,558 (8,702)
Other current assets472 5,465 (7,159)
Other assets10,264 5,085 (106)
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable(4,231)18,208 (13,989)
Accrued expenses15,476 8,335 (16,653)
Billings in excess of costs and estimated earnings2,616 1,988 (5,052)
Other liabilities(449)(7,100)(501)
Net cash provided by operating activities408,869 337,184 209,368 
Cash flow from investing activities:
Acquisitions, net of cash acquired(123,477)(5,392)(246,017)
Purchases of property, plant and equipment(177,249)(177,495)(220,685)
Proceeds from the sale of property, plant and equipment14,018 21,173 21,635 
Proceeds from sale of business21,564 
Other1,121 (1,095)3,804 
Net cash used in investing activities(285,587)(162,809)(419,699)
Cash flow from financing activities:
Capital contributions by member1,043 19,076 15,615 
Proceeds from debt issuances700,000 300,000 64,500 
Debt issuance costs(9,605)(6,312)(550)
Payments on debt(674,045)(270,229)(85,042)
Payments on acquisition-related liabilities(30,757)(31,383)(34,004)
Distributions(2,500)(2,500)(2,569)
Other(907)(502)(1,943)
Net cash (used in) provided by financing activities(16,771)8,150 (43,993)
Impact of foreign currency on cash351 286 (724)
Net increase in cash106,862 182,811 (255,048)
Cash and cash equivalents – beginning of period311,319 128,508 383,556 
Cash and cash equivalents – end of period$418,181 $311,319 $128,508 
See accompanying notes to consolidated financial statements.

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Statements of Changes in Members’ Interest
Years ended January 2, 2021, December 28, 2019 and December 29, 2018
(In thousands)
 
 Total Member’s Interest 
   Accumulated 
   otherTotal
 Member’sAccumulatedcomprehensivemember’s
 equitydeficitlossinterest
Balance — December 30, 2017$1,359,760 $(51,031)$(17,135)$1,291,594 
Net contributed capital15,615 — — 15,615 
Net income— 63,837 — 63,837 
Other comprehensive loss— — (6,481)(6,481)
Distributions(2,569)— — (2,569)
Share-based compensation25,378 — — 25,378 
Shares redeemed to settle taxes and other(1,943)— — (1,943)
Balance — December 29, 2018$1,396,241 $12,806 $(23,616)$1,385,431 
Net contributed capital19,076 — — 19,076 
Net income— 88,597 — 88,597 
Other comprehensive income— — 2,645 2,645 
Distributions(2,500)— — (2,500)
Share-based compensation20,403 — — 20,403 
Shares redeemed to settle taxes and other(502)— — (502)
Balance — December 28, 2019$1,432,718 $101,403 $(20,971)$1,513,150 
Net contributed capital1,043 — — 1,043 
Net income— 120,737 — 120,737 
Other comprehensive income— — 2,388 2,388 
Distributions(2,500)— — (2,500)
Share-based compensation28,857 — — 28,857 
Shares redeemed to settle taxes and other(907)— — (907)
Balance — January 2, 2021$1,459,211 $222,140 $(18,583)$1,662,768 
 
See accompanying notes to consolidated financial statements. 

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SUMMIT MATERIALS, LLC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(Dollars in tables in thousands, unless otherwise noted)

(1) Summary of Organization and Significant Accounting Policies
 
Summit Materials, LLC (“Summit LLC” and, together with its subsidiaries, 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”) 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.
 
Principles of Consolidation–The consolidated financial statements include the accounts of Summit LLC and its majority owned subsidiaries. All intercompany balances and transactions have been eliminated. The Company attributes consolidated member’s interest and net income separately to the controlling and noncontrolling interests. Noncontrolling interests in consolidated subsidiaries represent a 20% ownership in Ohio Valley Asphalt, LLC and, prior to the initial public offering (“IPO”) and concurrent purchase of the noncontrolling interests Continental Cement Company, L.L.C. (“Continental Cement”), a 30% redeemable ownership in Continental Cement. The Company accounts for investments in entities for which it has an ownership of 20% to 50% using the equity method of accounting.
 
The Company’s fiscal year is based on a 52-53 week year with each quarter composed of 13 weeks ending on a Saturday. The year ended January 2, 2021 was a 53-week year.
 
Use of Estimates— Preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“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
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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 2020, 2019 or 2018.
 
Accounts Receivable—Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the collectability of individual accounts. In establishing the allowance, management considers historical losses adjusted to take into account current market conditions and its customers’ financial condition, the amount of receivables in dispute, the current receivables aging and current payment terms. Balances that remain outstanding after reasonable collection efforts are exercised are written off through a charge to the valuation allowance.
 
The balances billed but not paid by customers, pursuant to retainage provisions included in contracts, are generally due upon completion of the contracts.
 
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.

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. Revenue for product sales is recognized when evidence of an arrangement exists and when control passes, which generally is when the product is shipped.

Aggregates and cement products are sold point-of-sale through purchase orders. When the product is sold on account, collectability typically occurs 30 to 60 days after the sale. Revenue is recognized when cash is received from the customer at the point of sale or when the products are delivered or collected on site. There are no other timing implications that will create a contract asset or liability, and contract modifications are unlikely given the timing and nature of the transaction. Material sales are likely to have multiple performance obligations if the product is sold with delivery. In these instances, delivery most often occurs on the same day as the control of the product transfers to the customer. As a result, even in the case of multiple performance obligations, the performance obligations are satisfied concurrently and revenue is recognized simultaneously.

Services

We earn revenue from the provision of services, which are primarily paving and related services, but also include landfill operations and the receipt and disposal of waste that is converted to fuel for use in our cement plants. 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.

Collectability of service contracts is due reasonably after certain milestones in the contract are performed. Milestones vary by project, but are typically calculated using monthly progress based on the percentage of completion or a customer’s engineer review of progress. The majority of the time, collection occurs within 90 days of billing and cash is received within the same fiscal year as services performed. On most projects, the customer will withhold a portion of the invoice for retainage, which may last longer than a year depending on the job.

Revenue derived from paving and related services is recognized over time based on the proportion of costs incurred to date relative to the total estimated costs at completion, which approximates progress towards completion. Under this 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. The majority of our construction service contracts, and therefore, revenue, are opened and completed within one year, with most activity during the spring, summer and fall. 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.

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The actual cost to total estimated cost 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 year ended January 2, 2021.

We recognize claims when the amount of the claim can be estimated reliably and it is legally enforceable. In evaluating these criteria, we consider the contractual basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim.

When the contract includes variable consideration, we estimate the amount of consideration to which we will be entitled in exchange for transferring the promised goods or services to a customer. The amount of estimated variable consideration included in the transaction price is the amount for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Types of variable consideration include, but are not limited to, liquidated damages and other performance penalties and production and placement bonuses.

The majority of contract modifications relate to the original contract and are often an extension of the original performance obligation. Predominately, modifications are not distinct from the terms in the original contract; therefore, they are considered part of a single performance obligation. We account for the modification using a cumulative catch-up adjustment. However, there are instances where goods or services in a modification are distinct from those transferred prior to the modification. In these situations, we account for the modifications as either a separate contract or prospectively depending on the facts and circumstances of the modification.

Generally, construction contracts contain mobilization costs which are categorized as costs to fulfill a contract. These costs are excluded from any measure of progress toward contract fulfillment. These costs do not result in the transfer of control of a good or service to the customer and are amortized over the life of the contract.

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.

Inventories—Inventories consist of stone that has been removed from quarries and processed for future sale, cement, raw materials and finished concrete blocks. Inventories are valued at the lower of cost or net realizable value and are accounted for on a first-in first-out basis or an average cost basis. If items become obsolete or otherwise unusable or if quantities exceed what is projected to be sold within a reasonable period of time, they will be charged to costs of revenue in the period that the items are designated as obsolete or excess inventory. Stripping costs are costs of removing overburden and waste material to access aggregate materials and are expensed as incurred.
 
Property, Plant and Equipment, net—Property, plant and equipment are recorded at cost, less accumulated depreciation, depletion and amortization. Expenditures for additions and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Repair and maintenance costs that do not substantially expand productive capacity or extend the life of property, plant and equipment are expensed as incurred.
 
Landfill airspace is included in property, plant and equipment at cost and is amortized based on the portion of the airspace used during the period compared to the gross estimated value of available airspace, which is updated periodically as circumstances dictate. Management reassesses the landfill airspace capacity with any changes in value recorded in cost of revenue. Capitalized landfill costs include expenditures for the acquisition of land and related airspace, engineering and permitting costs, cell construction costs and direct site improvement costs.
 
Upon disposal of an asset, the cost and related accumulated depreciation are removed from the Company’s accounts and any gain or loss is included in general and administrative expenses.
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The Company reviews the carrying value of property, plant and equipment for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Such indicators may include, among others, deterioration in general economic conditions, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows or a trend of negative or declining cash flows over multiple periods.
 
Property, plant and equipment is tested for impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. As a result, the property, plant and equipment impairment test is at a significantly lower level than the level at which goodwill is tested for impairment. In markets where the Company does not produce downstream products, such as ready-mix concrete, asphalt paving mix and paving and related services, the lowest level of largely independent identifiable cash flows is at the individual aggregates operation or a group of aggregates operations collectively serving a local market or the cement operations. Conversely, in vertically-integrated markets, the cash flows of the downstream and upstream businesses are not largely independently identifiable and the vertically-integrated operations are considered the lowest level of largely independent identifiable cash flows.

Aggregates mineral bearing land and interests are included in property, plant and equipment. When leased mineral interests are acquired during a business combination, they are valued using an excess earnings approach for the life of the proven and probable reserves. Depletion expense is recorded using a units of production methodology.
 
Accrued Mining and Landfill Reclamation—The mining reclamation reserve and financial commitments for landfill closure and post-closure activities are based on management’s estimate of future cost requirements to reclaim property at both currently operating and closed sites. Estimates of these obligations have been developed based on management’s interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Costs are estimated in current dollars, inflated until the expected time of payment, and then discounted back to present value using a credit-adjusted risk-free rate on obligations of similar maturity, adjusted to reflect the Company’s credit rating. Changes in the credit-adjusted risk-free rate do not change recorded liabilities. However, subsequent increases in the recognized obligations are measured using a current credit-adjusted risk-free rate. Decreases in the recognized obligations are measured at the initial credit-adjusted risk-free rate.
 
Significant changes in inflation rates, or the amount or, timing of future cost estimates typically result in both (1) a current adjustment to the recorded liability (and corresponding adjustment to the asset) and (2) a change in accretion of the liability and depreciation of the asset to be recorded prospectively over the remaining capacity of the unmined quarry or landfill.
 
Goodwill—Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. Goodwill recorded in connection with the Company’s acquisitions is primarily attributable to the expected profitability, assembled workforces of the acquired businesses and the synergies expected to arise after the Company’s acquisition of those businesses. Goodwill is not amortized, but is tested annually for impairment as of the first day of the fourth quarter and at any time that events or circumstances indicate that goodwill may be impaired. A qualitative approach may first be applied to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If, as a result of the qualitative assessment, it is determined that an impairment is more likely than not, the two-step quantitative impairment test is then performed, otherwise further analysis is not required. The two-step impairment test first identifies potential goodwill impairment for each reporting unit and then, if necessary, measures the amount of the impairment loss.
 
Income Taxes—As a limited liability company, the Company’s federal and state income tax attributes are generally passed to its member. However, certain subsidiaries, or subsidiary groups, of the Company are taxable entities subject to income taxes in the United States and Canada, the provisions for which are included in the consolidated financial statements. Significant judgments and estimates are required in the determination of the consolidated income tax expense.
 
The Company’s deferred income tax assets and liabilities are computed for differences between the tax basis and financial statement amounts that will result in taxable or deductible amounts in the future. The computed deferred balances are based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines it would be able to realize its deferred tax assets for which a
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valuation allowance had been recorded then an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
 
The Company evaluates the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense (benefit).

Prior Year Reclassifications — We have reclassified transaction costs of $2.2 million and $4.2 million for the years ended 2019 and 2018, respectively, from a separate line item included in operating income to general and administrative expenses to conform to the current year presentation. In addition, we reclassified $10.7 million and $12.6 million for the years ended 2019 and 2018, respectively, of gain on sale of property, plant and equipment from general and administrative expenses to its own line item included within operating income, also to conform to the current year presentation.
 
New Accounting Standards — In February 2016, the Financial Accounting Standards Board FASB ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), which requires lessees to recognize 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 statements of operations and 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.

In August 2018, the FASB issued 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.

In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework Changes to The Disclosure Requirements for Defined Benefits Plans, which modifies the disclosure requirements of employer-sponsored defined benefit and other postretirement benefits plans. The ASU is effective for fiscal years beginning after December 15, 2020 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) Acquisitions
 
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. The purchase price allocation for the 2020 acquisitions has not yet been finalized due to the recent timing of the acquisitions. The following table summarizes the Company’s acquisitions by region and year:
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 202020192018
West
East (1)
______________________
(1)     In addition, the Company acquired certain assets of a small ready-mix concrete operation in the second quarter of 2018.
 
The table below summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates.
 
 20202019
Financial assets$8,696 $
Inventories2,856 52 
Property, plant and equipment130,042 3,542 
Other assets2,790 
Financial liabilities(4,469)(36)
Other long-term liabilities(16,069)
Net assets acquired123,846 3,558 
Goodwill1,834 
Purchase price123,846 5,392 
Other(369)
Net cash paid for acquisitions$123,477 $5,392 

Acquisition-Related Liabilities—A number of acquisition-related liabilities have been recorded subject to terms in the relevant purchase agreements, including deferred consideration and noncompete payments. Noncompete payments have been accrued where certain former owners of newly acquired companies have entered into standard noncompete arrangements. Subject to terms and conditions stated in these noncompete agreements, payments are generally made over a five-year period. Deferred consideration is purchase price consideration paid in the future as agreed to in the purchase agreement and is not contingent on future events. Deferred consideration is generally scheduled to be paid in years ranging from 5 to 20 years in annual installments. The remaining payments due under these noncompete and deferred consideration agreements are as follows:

2021$7,205 
20223,411 
20232,657 
20242,620 
20252,567 
Thereafter4,454 
Total scheduled payments22,914 
Present value adjustments(4,704)
Total noncompete obligations and deferred consideration$18,210 
 
Accretion on the deferred consideration and noncompete obligations is recorded in interest expense. 

(3) Goodwill
 
As of January 2, 2021, the Company had 11 reporting units with goodwill for which the annual goodwill impairment test was completed. We perform the annual impairment test on the first day of the fourth quarter each year. We initially perform a qualitative analysis. As a result of this analysis, it was determined that it is more likely than not that the fair value of 7 reporting units were greater than its carrying value. For the remaining reporting units we perform a two-step quantitative analysis. Step 1 of that analysis compares the estimated the fair value of the reporting units using an income approach (i.e., a discounted cash flow technique) and a market approach to the carrying value of the reporting unit. If the estimated fair value
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exceeds its carrying value, the goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, we proceed to the second step to measure the amount of potential impairment loss. Based on this analysis, it was determined that the reporting units’ fair values were greater than their carrying values and 0 impairment charges were recognized in 2020. The accumulated impairment charges recognized in periods prior to 2018 totaled $68.2 million.

These estimates of a reporting unit’s fair value involve significant management estimates and assumptions, including but not limited to sales prices of similar assets, assumptions related to future profitability, cash flows, and discount rates. These estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential. Developing discounted future cash flow estimates in applying the income approach required management to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates about revenue growth, operating margins, capital requirements, inflation and working capital management. The development of appropriate rates to discount the estimated future cash flows required the selection of risk premiums, which can materially affect the present value of estimated future cash flows.
 
The following table presents goodwill by reportable segments and in total:
 WestEastCementTotal
Balance—December 29, 2018$581,567 $406,805 $204,656 $1,193,028 
Acquisitions1,657 3,621 5,278 
Foreign currency translation adjustments2,393 2,393 
Balance—December 28, 2019$585,617 $410,426 $204,656 $1,200,699 
Acquisitions (1)19 19 
Foreign currency translation adjustments1,573 1,573 
Balance—January 2, 2021$587,209 $410,426 $204,656 $1,202,291 
______________________
(1)Reflects goodwill from 2020 acquisitions and working capital adjustments from prior year acquisitions.

(4) 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, and is recognized based on the proportion of costs incurred to date relative to the total estimated costs at completion. The majority of our construction service contracts, and therefore revenue, are opened and completed within one year, with the most activity during the spring, summer and fall.

Revenue by product for the years ended January 2, 2021, December 28, 2019 and December 29, 2018 consisted of the following:
 202020192018
Revenue by product*:
Aggregates$498,007 $469,670 $373,824 
Cement257,629 266,235 258,876 
Ready-mix concrete668,060 607,622 584,114 
Asphalt349,350 330,750 301,247 
Paving and related services381,430 360,234 379,540 
Other177,975 187,629 203,401 
Total revenue$2,332,451 $2,222,140 $2,101,002 
______________________
*Revenue from the liquid asphalt terminals is included in asphalt revenue.

The following table outlines the significant changes in contract assets and contract liability balances from December 28, 2019 to January 2, 2021. Also included in the table is the net change in the estimate as a percentage of aggregate revenue for such contracts: 
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Costs and estimatedBillings in excess
earnings inof costs and
excess of billingsestimated earnings
Balance—December 28, 2019$13,088 $13,864 
Changes in revenue billed, contract price or cost estimates(4,535)2,616 
Other113 19 
Balance—January 2, 2021$8,666 $16,499 

Accounts receivable, net consisted of the following as of January 2, 2021 and December 28, 2019:
 20202019
Trade accounts receivable$191,871 $191,672 
Construction contract receivables47,179 47,966 
Retention receivables18,824 17,808 
Receivables from related parties1,339 1,596 
Accounts receivable259,213 259,042 
Less: Allowance for doubtful accounts(4,517)(5,786)
Accounts receivable, net$254,696 $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.
 
(5) Inventories
Inventories consisted of the following as of January 2, 2021 and December 28, 2019:
 
 20202019
Aggregate stockpiles$137,938 $140,461 
Finished goods32,993 33,023 
Work in process9,281 7,664 
Raw materials20,096 23,639 
Total$200,308 $204,787 
 
(6) Property, Plant and Equipment, net and Intangibles, net

Property, plant and equipment, net consisted of the following as of January 2, 2021 and December 28, 2019:
 
 20202019
Mineral bearing land and leased interests$468,966 $333,024 
Land (non-mineral bearing)197,432 182,065 
Buildings and improvements181,198 178,088 
Plants, machinery and equipment1,397,410 1,318,512 
Mobile equipment and barges543,133 501,809 
Truck and auto fleet56,163 54,838 
Landfill airspace and improvements52,202 49,766 
Office equipment45,942 43,155 
Construction in progress40,648 42,007 
Property, plant and equipment2,983,094 2,703,264 
Less accumulated depreciation, depletion and amortization(1,132,925)(955,815)
Property, plant and equipment, net$1,850,169 $1,747,449 
 
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Depreciation on property, plant and equipment, including assets subject to capital leases, is generally computed on a straight-line basis. Depletion of mineral reserves and leased mineral interests are computed based on the portion of the reserves used during the period compared to the gross estimated value of proven and probable reserves, which is updated periodically as circumstances dictate. Leasehold improvements are amortized on a straight-line basis over the lesser of the asset’s useful life or the remaining lease term. The estimated useful lives are generally as follows:
 
Buildings and improvements10 - 30 years
Plant, machinery and equipment7 - 20 years
Office equipment3 - 7 years
Truck and auto fleet5 - 8 years
Mobile equipment and barges6 - 8 years
Landfill airspace and improvements10 - 30 years
Other4 - 20 years

Depreciation, depletion and amortization expense of property, plant and equipment was $195.3 million, $196.8 million and $199.6 million in the years ended January 2, 2021, December 28, 2019 and December 29, 2018, respectively.
 
Property, plant and equipment at January 2, 2021 and December 28, 2019 included $92.7 million and $82.7 million, respectively, of finance leases for certain equipment and a building with accumulated amortization of $32.8 million and $24.9 million, respectively. The equipment leases generally have terms of less than five years and the building lease had an original term of 30 years. Approximately $24.6 million and $16.0 million of the future obligations associated with the finance leases are included in accrued expenses as of January 2, 2021 and December 28, 2019, respectively, and the present value of the remaining finance lease payments, $31.7 million and $40.4 million, respectively, is included in other noncurrent liabilities on the consolidated balance sheets. Future minimum rental commitments under long-term capital leases are $26.7 million, $18.6 million, $7.1 million, $3.2 million, and $2.6 million for the years ended 2021, 2022, 2023, 2024 and 2025, respectively.
 
Assets are assessed for impairment charges when identified for disposition. The net gain from asset dispositions recognized in general and administrative expenses in fiscal years 2020, 2019 and 2018 was $7.6 million, $10.7 million and $12.6 million, respectively. No material impairment charges have been recognized on assets held for use in fiscal 2020, 2019 or 2018.
 
Intangible Assets—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, or computed based on the portion of the reserves used during the period compared to the gross estimated value of proven and probable reserves. The following table shows intangible assets by type and in total:
 
 January 2, 2021December 28, 2019
 Gross NetGross Net
 CarryingAccumulatedCarryingCarryingAccumulatedCarrying
 AmountAmortizationAmountAmountAmortizationAmount
Operating permits$33,671 $(1,207)$32,464 $6,609 $(290)$6,319 
Mineral leases19,225 (7,571)11,654 19,064 (6,408)12,656 
Reserve rights6,234 (2,504)3,730 6,234 (2,248)3,986 
Trade names1,000 (958)42 
Other586 (582)957 (462)495 
Total intangible assets$59,716 $(11,864)$47,852 $33,864 $(10,366)$23,498 
 
Amortization expense in fiscal 2020, 2019 and 2018 was $2.7 million, $2.1 million and $1.5 million, respectively. The estimated amortization expense for intangible assets for each of the next five years and thereafter is as follows:
 
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2021$3,129 
20223,136 
20233,003 
20242,908 
20252,863 
Thereafter32,813 
Total$47,852 

(7) Accrued Expenses

Accrued expenses consisted of the following as of January 2, 2021 and December 28, 2019:
 20202019
Interest$21,860 $26,892 
Payroll and benefits46,026 29,356 
Finance lease obligations24,601 16,007 
Insurance18,355 14,968 
Non-income taxes15,900 7,898 
Deferred asset purchase payments9,749 3,525 
Professional fees828 902 
Other (1)23,482 20,689 
Total$160,801 $120,237 
______________________
(1)Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.

(8) Debt

Debt consisted of the following as of January 2, 2021 and December 28, 2019:
 
 20202019
Term Loan, due 2024:  
$616.3 million and $624.3 million, net of $0.9 million and $1.1 million discount at January 2, 2021 and December 28, 2019, respectively$615,425 $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 2025300,000 300,000 
6 1⁄2% Senior Notes, due 2027300,000 300,000 
5 1⁄4% Senior Notes, due 2029700,000 
Total1,915,425 1,872,273 
Current portion of long-term debt6,354 7,942 
Long-term debt$1,909,071 $1,864,331 
The contractual payments of long-term debt, including current maturities, for the five years subsequent to January 2, 2021, are as follows:
 
17


  
2021$6,354 
20226,354 
20236,354 
2024597,252 
2025300,000 
Thereafter1,000,000 
Total1,916,314 
Less: Original issue net discount(889)
Less: Capitalized loan costs(16,724)
Total debt$1,898,701 
 
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 2022 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. The 2023 Notes were paid in full in August 2020 as noted above.
 
As of January 2, 2021 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
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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 January 2, 2021 or December 28, 2019. As of January 2, 2021, we had remaining borrowing capacity of $329.1 million under the revolving credit facility, 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 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 January 2, 2021 and December 28, 2019, Summit LLC was in compliance with all financial covenants under the Credit Agreement.

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 years ended January 2, 2021 and December 28, 2019: 
 Deferred financing fees
Balance—December 29, 2018$15,475 
Loan origination fees6,312 
Amortization(3,501)
Write off of deferred financing fees(2,850)
Balance—December 28, 2019$15,436 
Loan origination fees9,605 
Amortization(3,336)
Write off of deferred financing fees(3,338)
Balance—January 2, 2021$18,367 
 
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 0 amounts outstanding under this agreement as of January 2, 2021 or December 28, 2019.
 
(9) Income Taxes
Summit LLC is a limited liability company and passes its tax attributes for federal and state tax purposes to its member and is generally not subject to federal or state income tax. However, certain subsidiaries, or subsidiary groups, file federal, state, and Canadian income tax returns due to their status as C corporations or laws within that jurisdiction. The provision for income taxes is primarily composed of federal, state and local income taxes for the subsidiary entities that have C corporation status.

For the years ended January 2, 2021, December 28, 2019 and December 29, 2018, income taxes consisted of the following:
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 202020192018
Provision for income taxes:  
Current$3,827 $69 $463 
Deferred(2,764)6,316 9,810 
Income tax expense (benefit)$1,063 $6,385 $10,273 
    
The effective tax rate on pre-tax income differs from the U.S. statutory rate of 21% for 2020, 2019 and 2018, respectively, due to the following:
 
 202020192018
Income tax expense (benefit) at federal statutory tax rate$25,577 $19,947 $15,563 
Less: Income tax benefit at federal statutory tax rate for LLC entities(17,647)(15,387)(13,863)
State and local income taxes2,073 1,680 1,614 
Permanent differences2,479 13 (1,194)
Effective tax rate change681 (725)(1,148)
Unrecognized tax benefits(11,525)5,038 6,487 
Valuation allowance(2,478)2,586 
Other(575)(1,703)228 
Income tax benefit$1,063 $6,385 $10,273 
 
The following table summarizes the components of the net deferred income tax asset (liability) as January 2, 2021 and December 28, 2019:
 
 20202019
Deferred tax (liabilities) assets:  
Accelerated depreciation$(70,588)$(60,216)
Net operating loss26,929 18,036 
Investment in limited partnership(18,931)(17,686)
Net intangible assets(3,264)(2,554)
Mining reclamation reserve1,652 723 
Working capital (e.g., accrued compensation, prepaid assets)1,590 1,366 
Interest expense limitation carryforward2,691 
Net deferred tax liabilities(62,612)(57,640)
Less valuation allowance(1,675)(1,675)
Net deferred tax liability$(64,287)$(59,315)
 
The net deferred income tax liability as of January 2, 2021 and December 28, 2019, are included in other noncurrent liabilities on the consolidated balance sheets. As of January 2, 2021, Summit LLC had federal net operating loss carryforwards of $120.3 million, which expire between 2030 and 2037. 

Valuation Allowance—The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible (including the effect of available carryback and carryforward periods) and tax-planning strategies. The deferred income tax asset related to net operating losses resides with two separate tax paying subsidiaries (or subsidiary groups) of Summit LLC. These tax payers have historically generated taxable income and forecast to continue generating taxable income; however, the use of a portion of the net operating may be limited.
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20202019
Valuation Allowance:
Beginning balance$(1,675)$(4,261)
Loss carryforwards— — 
Current year decreases (increases) from operations2,586 
Release of valuation allowance and other— — 
Ending balance$(1,675)$(1,675)

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted. Among other things, the TCJA, beginning January 1, 2018, reduced the federal statutory rate from 35% to 21% and extended bonus depreciation provisions. In addition, the TCJA prescribes the application of net operating loss carryforwards generated in 2018 and beyond will be limited, 100% asset expensing will be allowed through 2022 and begin to phase out in 2023, and the amount of interest expense we are able deduct may also be limited in future years. The TCJA contains many provisions which continue to be clarified through new regulations. As permitted by Staff Accounting Bulletin 118 issued by the SEC on December 22, 2017, we completed our accounting of the impacts of the TCJA. We have completed our analysis within 2018 consistent with the guidance of SAB 118 and any adjustments during the measurement period have been included in net earnings from continuing operations as an adjustment to income tax expense. As such, in the fourth quarter of 2018, the Company recorded additional tax expense of
$2.6 million resulting from the IRS interpretative guidance of TCJA. As of January 2, 2021 and December 28, 2019, a $1.7 million and $1.7 million, respectively, valuation allowance has been recorded on net deferred tax assets where realization of our net operating losses are not more likely than not.
The Company has recognized a reserve against the deferred tax assets for unrecognized tax benefits in the amount of $0.0 million and $11.6 million as of January 2, 2021 and December 28, 2019, respectively. The Company records interest and penalties as a component of the income tax provision. NaN material interest or penalties were recognized in income tax expense during the years ended January 2, 2021 and December 28, 2019.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Unrealized Tax Benefits
Balance—December 29, 2018$6,487 
Additions based on tax position in 20185,132 
Balance—December 28, 2019$11,619 
Reductions based on new regulations(11,619)
Balance—January 2, 2021$
Tax years from 2014 to 2019 remain open and subject to audit by federal, Canadian, and state tax authorities. No income tax expense or benefit was recognized in other comprehensive loss in 2019, 2018 or 2017.
 
Tax Distributions  – The holders of Summit Holdings’ LP Units, including Summit Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Summit Holdings. The limited partnership agreement of Summit Holdings provides for pro rata cash distributions (“tax distributions”) to the holders of the LP Units in an amount generally calculated to provide each holder of LP Units with sufficient cash to cover its tax liability in respect of the LP Units. In general, these tax distributions are computed based on Summit Holdings’ estimated taxable income allocated to Summit Inc. multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate applicable to a corporate resident in New York, New York. No material distributions were made in the years ended January 2, 2021 and December 28, 2019.

(10) Members’ Interest
 
Summit LLC is a wholly owned indirect subsidiary of Summit Holdings, whose primary owner is 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”) 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.
  
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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 plansadjustmentsadjustmentsincome (loss)
Balance — December 29, 2018$(4,392)$(19,370)$146 $(23,616)
Postretirement liability adjustment(1,925)— — (1,925)
Foreign currency translation adjustment— 4,716 — 4,716 
Income on cash flow hedges— — (146)(146)
Balance — December 28, 2019$(6,317)$(14,654)$$(20,971)
Postretirement liability adjustment(2,229)— — (2,229)
Foreign currency translation adjustment— 4,617 — 4,617 
Balance — January 2, 2021$(8,546)$(10,037)$$(18,583)

(11) Supplemental Cash Flow Information
 
Supplemental cash flow information for the years ended January 2, 2021, December 28, 2019 and December 29, 2018 was as follows:
 202020192018
Cash payments:
Interest$99,551 $104,614 $103,250 
Payments (refunds) for income taxes, net1,754 (919)3,340 
Operating cash payments on operating leases10,452 10,618 N/A
Operating cash payments on finance leases3,132 3,051 N/A
Finance cash payments on finance leases14,408 13,164 N/A
Non cash financing activities:
Right of use assets obtained in exchange for operating lease obligations$4,849 $5,842 N/A
Right of use assets obtained in exchange for finance leases obligations18,016 23,965 N/A
 
(12) Stock-Based Compensation
 
Prior to the IPO and related Reorganization, the capital structure of Summit Holdings consisted of six different classes of limited partnership units, each of which was subject to unique distribution rights. In connection with the IPO and the related Reorganization, the limited partnership agreement of Summit Holdings was amended and restated to, among other things, modify its capital structure by creating LP Units. Holders of the LP Units periodically exchange their LP Units for shares of Class A common Stock of Summit Inc.

In the first quarter of 2018, the Board of Directors vested the time-vesting units outstanding and we recognized the remaining $1.0 million of stock based compensation related to these LP units.

Omnibus Incentive Plan
 
In 2015, our Board of Directors and stockholders adopted the Summit Materials, Inc. 2015 Omnibus Incentive Plan (the "Plan"), which allows for grants of equity-based awards in the form of stock options, stock appreciation rights, restricted stock and restricted stock units, performance units, and other stock-based awards. The Plan authorizes the issuance of up to 13,500,000 shares of Class A common stock in the form of restricted stock units and stock options, of which 4.3 million shares were available for future grants as of January 2, 2021.
 
Restricted Stock
 
Restricted Stock with Service-Based Vesting—Under the Plan, the Compensation Committee of the Board of Directors (the “Compensation Committee”) has granted restricted stock to members of the Board of Directors, executive officers and
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other key employees. These awards contain service conditions associated with continued employment or service. The terms of the restricted stock provide voting and regular dividend rights to holders of the awards. Upon vesting, the restrictions on the restricted stock lapse and the shares are considered issued and outstanding for accounting purposes.
 
In each of 2020, 2019 and 2018, the Compensation Committee granted restricted stock to executives and key employees under the Plan as part of our annual equity award program, which vest over a two or three year period, subject to continued employment or service. From time to time, the Compensation Committee grants restricted stock to newly hired or promoted employees or other employees who have achieved extraordinary personal performance objectives.
 
Further, in each of 2020, 2019 and 2018, the Compensation Committee granted 42,736, 65,144 and 38,232 shares, respectively, to non-employee members of the Board of Directors for their annual service as directors. These restricted stock grants vest over a one year period.
 
In measuring compensation expense associated with the grant of restricted stock, we use the fair value of the award, determined as the closing stock price for our Class A common stock on the date of grant. Compensation expense is recorded monthly over the vesting period of the award.
 
Restricted stock with Service- and Market-Condition-Based Vesting—In 2020, 2019 and 2018, the Compensation Committee granted restricted stock to certain members of our executive team as part of their annual compensation package. The restricted stock vests at the end of a three year performance period, based on our total stock return (“TSR”) ranking relative to companies in the S&P Building & Construction Select Industry Index, subject to continued employment.
 
Compensation expense is recorded monthly over the vesting period of the awards. The following table summarizes information for the equity awards granted in 2020:
 OptionsRestricted Stock UnitsPerformance Stock UnitsWarrants
 WeightedWeightedWeightedWeighted
 average grant-Number ofaverage grant-Number ofaverage grant-average grant-
 Number ofdate fair valuerestricteddate fair valueperformancedate fair valueNumber ofdate fair value
 optionsper unitstock unitsper unitstock unitsper unitwarrantsper unit
Beginning balance—December 28, 20192,128,107 $9.08 1,556,636 $20.29 390,645 $31.08 100,037 $18.00 
Granted1,379,943 18.10 199,946 23.43 
Forfeited/ Canceled(35,117)12.30 (154,283)19.12 (112,416)26.54 
Exercised(54,517)10.10 
Vested(647,345)21.28 (49,300)32 
Balance—January 2, 20212,038,473 $9.16 2,134,951 $18.64 428,875 $28.64 100,037 $18.00 
 
The fair value of the time-vesting options granted was estimated as of the grant date using the Black-Scholes-Merton model, which requires the input of subjective assumptions, including the expected volatility and the expected term. The fair value of the performance stock units granted was estimated as of the grant date using Monte Carlo simulations, which requires the input of subjective assumptions, including the expected volatility and the expected term. NaN options to purchase common stock were granted in 2020, 2019 and 2018.

The risk-free rate is based on the yield at the date of grant of a U.S. Treasury security with a maturity period approximating the expected term. As Summit Holdings has not historically and does not plan to issue regular dividends, a dividend yield of 0 was used. The volatility assumption is based on reported data of a peer group of publicly traded companies for which historical information was available adjusted for the Company’s capital structure. The expected term is based on expectations about future exercises and represents the period of time that the units granted are expected to be outstanding.
 
Compensation expense for time-vesting interests granted is based on the grant date fair value. The Company recognizes compensation costs on a straight-line basis over the service period, which is generally the vesting period of the award. Forfeitures are recognized as they occur. Share-based compensation expense, which is recognized in general and administrative expenses, totaled $28.9 million, $20.4 million and $25.4 million in the years ended January 2, 2021, December
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28, 2019 and December 29, 2018, respectively. As of January 2, 2021, unrecognized compensation cost totaled $22.0 million. The weighted average remaining contractual term over which the unrecognized compensation cost is to be recognized is 1.7 years as of year-end 2020.
 
As of January 2, 2021, the intrinsic value of outstanding options, restricted stock units and performance stock units was $3.8 million, $42.9 million and $8.6 million, respectively, and the remaining contractual term was 3.3 years, 1.0 year and 1.3 years, respectively. The weighted average strike price of stock options outstanding as of January 2, 2021 was $18.75 per share. The intrinsic value of 2.0 million exercisable stock options as of January 2, 2021 was $3.8 million with a weighted average strike price of $18.75 and a weighted average remaining contractual period of 3.3 years.
 
(13) Employee Benefit Plans
 
Defined Contribution Plan—The Company sponsors employee 401(k) savings plans for its employees, including certain union employees. The plans provide for various required and discretionary Company matches of employees’ eligible compensation contributed to the plans. The expense for the defined contribution plans was $12.1 million, $11.7 million and $11.2 million for the years ended January 2, 2021, December 28, 2019 and December 29, 2018, respectively.
 
Defined Benefit and Other Postretirement Benefits Plans—The Company’s subsidiary, Continental Cement, sponsors two noncontributory defined benefit pension plans for hourly and salaried employees. The plans are closed to new participants and benefits are frozen. As a result of the collective bargaining unit negotiations in 2017, the hourly defined benefit pension plan was amended to stop future benefit accruals for the Davenport employees effective December 31, 2017. Pension benefits for eligible hourly employees are based on a monthly pension factor for each year of credited service. Pension benefits for eligible salaried employees are generally based on years of service and average eligible compensation.
 
Continental Cement also sponsors two unfunded healthcare and life insurance benefits plans for certain eligible retired employees. Effective January 1, 2014, the plan covering employees of the Hannibal, Missouri location was amended to eliminate all future retiree health and life coverage for current employees. During 2015, Continental Cement adopted one new unfunded healthcare plan to provide benefits prior to Medicare eligibility for certain hourly employees of the Davenport, Iowa location. As a result of the collective bargaining unit negotiations in 2017, hourly Davenport employees hired on or after January 1, 2018 are no longer eligible for retiree medical benefits.
 
The funded status of the pension and other postretirement benefit plans is recognized in the consolidated balance sheets as the difference between the fair value of plan assets and the benefit obligations. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (“PBO”) and for the healthcare and life insurance benefits plans, the benefit obligation is the accumulated postretirement benefit obligation (“APBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. However, since the plans’ participants are not subject to future compensation increases, the plans’ PBO equals the accumulated benefit obligation (“ABO”). The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. The measurement of the benefit obligations is based on the Company’s estimates and actuarial valuations. These valuations reflect the terms of the plan and use participant-specific information, such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest-crediting rates and mortality rates.

The Company uses December 31 as the measurement date for its defined benefit pension and other postretirement benefit plans.
 
Obligations and Funded Status—The following information is as of January 2, 2021 and December 28, 2019 and for the years ended January 2, 2021, December 28, 2019 and December 29, 2018: 
 
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 20202019
PensionHealthcarePensionHealthcare
benefits& Life Ins.benefits& Life Ins.
Change in benefit obligations:
Beginning of period$26,181 $9,090 $24,203 $9,203 
Service cost71 176 60 166 
Interest cost733 242 928 321 
Actuarial (gain) loss2,425 676 2,571 165 
Benefits paid(1,583)(955)(1,581)(765)
End of period$27,827 $9,229 $26,181 $9,090 
Change in fair value of plan assets:
Beginning of period$18,242 $$17,449 $
Actual return on plan assets1,916 2,055 
Employer contributions483 955 319 765 
Benefits paid(1,583)(955)(1,581)(765)
End of period$19,058 $$18,242 $
Funded status of plans$(8,769)$(9,229)$(7,939)$(9,090)
Current liabilities$$(636)$$(653)
Noncurrent liabilities(8,769)(8,593)(7,939)(8,437)
Liability recognized$(8,769)$(9,229)$(7,939)$(9,090)
Amounts recognized in accumulated other comprehensive income:
Net actuarial (gain) loss$10,689 $2,707 $9,286 $2,121 
Prior service cost(1,690)(1,931)
Total amount recognized$10,689 $1,017 $9,286 $190 

The amount recognized in accumulated other comprehensive income (“AOCI”) is the actuarial loss (credit) and prior service cost, which has not yet been recognized in periodic benefit cost.
 
 202020192018
PensionHealthcarePensionHealthcarePensionHealthcare
benefits& Life Ins.benefits& Life Ins.benefits& Life Ins.
Amounts recognized in other comprehensive (income) loss:
Net actuarial loss (gain)$1,728 $675 $1,760 $165 $(1,300)$(172)
Amortization of prior year service cost241 241 241 
Amortization of gain(326)(89)(202)(39)(312)(118)
Total amount recognized$1,402 $827 $1,558 $367 $(1,612)$(49)
Components of net periodic benefit cost:
Service cost$71 $176 $60 $166 $67 $170 
Interest cost733 242 928 321 898 317 
Amortization of gain326 89 202 39 312 118 
Expected return on plan assets(1,221)(1,244)(1,284)
Amortization of prior service credit(241)(241)(241)
Net periodic (expense) benefit cost$(91)$266 $(54)$285 $(7)$364 
 
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Assumptions—Weighted-average assumptions used to determine the benefit obligations as of year-end 2020 and 2019 are:
 20202019
HealthcareHealthcare
Pension benefits& Life Ins.Pension benefits& Life Ins.
Discount rate1.84% - 2.14%1.80% - 1.82%2.78% - 2.96%2.73% - 2.79%
Expected long-term rate of return on plan assets7.00%N/A7.00%N/A
 
Weighted-average assumptions used to determine net periodic benefit cost for years ended January 2, 2021, December 28, 2019 and December 29, 2018:
 
 202020192018
HealthcareHealthcareHealthcare
Pension benefits& Life Ins.Pension benefits& Life Ins.Pension benefits& Life Ins.
Discount rate2.78% - 2.96%2.73% - 2.79%3.90% - 4.02%3.87% - 3.91%3.23% - 3.37%3.20% - 3.25%
Expected long-term rate of return on plan assets7.00%N/A7.00%N/A7.00%N/A
 
The expected long-term return on plan assets is based upon the Plans’ consideration of historical and forward-looking returns and the Company’s estimation of what a portfolio, with the target allocation described below, will earn over a long-term horizon. The discount rate is derived using the FTSE Pension Discount Curve.
 
Assumed health care cost trend rates were 8.0% as of year-end 2020 and 2019, grading to an ultimate trend rate of 4.5% in 2034 and 2033. Assumed health care cost trend rates have a significant effect on the amounts reported for the Company’s healthcare and life insurance benefits plans.
  
Plan Assets—The defined benefit pension plans’ (the “Plans”) investment strategy is to minimize investment risk while generating acceptable returns. The Plans currently invest a relatively high proportion of the plan assets in fixed income securities, while the remainder is invested in equity securities, cash reserves and precious metals. The equity securities are diversified into funds with growth and value investment strategies. The target allocation for plan assets is as follows: equity securities—30%; fixed income securities—63%; cash reserves—5%; and precious metals—2%. The Plans’ current investment allocations are within the tolerance of the target allocation. The Company had no Level 3 investments as of or for the years ended January 2, 2021 and December 28, 2019.
 
At year-end 2020 and 2019, the Plans’ assets were invested predominantly in fixed-income securities and publicly traded equities, but may invest in other asset classes in the future subject to the parameters of the investment policy. The Plans’ investments in fixed-income assets include U.S. Treasury and U.S. agency securities and corporate bonds. The Plans’ investments in equity assets include U.S. and international securities and equity funds. The Company estimates the fair value of the Plans’ assets using various valuation techniques and, to the extent available, quoted market prices in active markets or observable market inputs. The descriptions and fair value methodologies for the Plans’ assets are as follows:
 
Fixed Income Securities—Corporate and government bonds are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.
 
Equity Securities—Equity securities are valued at the closing market price reported on a U.S. exchange where the security is actively traded and are therefore classified as Level 1 assets.
 
Cash—The carrying amounts of cash approximate fair value due to the short-term maturity.
 
Precious Metals—Precious metals are valued at the closing market price reported on a U.S. exchange where the security is actively traded and are therefore classified as Level 1 assets.

The fair value of the Plans’ assets by asset class and fair value hierarchy level as of January 2, 2021 and December 28, 2019 are as follows:
 
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 2020
  Quoted prices in active 
 Total fairmarkets for identicalObservable
 valueassets (Level 1)inputs (Level 2)
Fixed income securities:            
Intermediate—government$3,294 $3,294 $
Intermediate—corporate3,218 3,218 
Short-term—government705 705 
Short-term—corporate448 448 
International1,086 1,086 
Equity securities:
U.S. Large cap value1,516 1,516 
U.S. Large cap growth1,483 1,483 
U.S. Mid cap value631 631 
U.S. Mid cap growth619 619 
U.S. Small cap value663 663 
U.S. Small cap growth650 650 
International1,227 407 820 
Emerging Markets409 409 
Commodities Broad Basket1,002 182 820 
Cash2,107 2,107 
Total$19,058 $12,666 $6,392 
 
 
 2019
  Quoted prices in active 
 Total fairmarkets for identicalObservable
 valueassets (Level 1)inputs (Level 2)
Fixed income securities:   
Intermediate—government$2,482 $2,482 $
Intermediate—corporate1,066 1,066 
Short-term—government1,387 1,387 
Short-term—corporate3,173 3,173 
International1,387 1,387 
Equity securities:
U.S. Large cap value1,225 1,225 
U.S. Large cap growth1,167 1,167 
U.S. Mid cap value581 581 
U.S. Mid cap growth578 578 
U.S. Small cap value583 583 
U.S. Small cap growth593 593 
Managed Futures340 340 
International1,174 386 788 
Emerging Markets394 394 
Commodities Broad Basket1,118 362 756 
Cash994 994 
Total$18,242 $10,732 $7,510 
 
Cash Flows—The Company expects to contribute approximately $1.2 million and $0.6 million in 2021 to its pension plans and to its healthcare and life insurance benefits plans, respectively.
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The estimated benefit payments for each of the next five years and the five-year period thereafter are as follows:
 
 PensionHealthcare and Life
 benefitsInsurance Benefits
2021$1,692 $636 
20221,693 630 
20231,696 617 
20241,655 619 
20251,613 627 
2026 - 20307,597 3,139 

Multiemployer Pension Plans— In 2018, the Company acquired Buildex, LLC and assumed its obligation to contribute to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in multiemployer pension plans are different from single-employer plans. Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer ceases contributing to the plan, the unfunded obligations of the plan are the responsibility of the remaining participating employers.

The Company's participation in these plans for the annual period ended December 31, 2020, is outlined in the table below. The ''EIN/Pension Plan Number" column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2020 and 2019 is for the plan 's year end at December 31, 2020, and December 31, 2019, respectively. The zone status is based on information the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The "Surcharge Imposed" column indicates whether a surcharge has been imposed on contributions to the plan. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. There have been no significant changes that affect the comparability of 2020 and 2019 contributions.
Expiration Date of
Pension Protection ActFIP/RP StatusContributions of CompanyCollective-
PensionEIN/ PensionZone StatusPending/($ in thousands)SurchargeBargaining
Trust FundPlan Number20202019Implemented20202019ImposedAgreement
Construction Industry Laborers Pension Fund43-6060737/001Green - as of December 31, 2019Green - as of December 31, 2018None$100 $112 No3/31/2021
Operating Engineers Local 101 Pension Plan43-6059213/001Green - as of December 31, 2019Green - as of December 31, 2018None20 23 No3/31/2021
Total Contributions$120 $135 

The Company was not listed as providing more than 5% of the total contributions for the Operating Engineers Local 101 Pension Plan or the Construction Industry Laborers Pension Fund for the plan years 2020 and 2019 per the plans' Forms 5500. As of the date of the filing of this annual report on Form 10-K, Forms 5500 were not available for the plan year ending December 31, 2020.

(14) Accrued Mining and Landfill Reclamation
 
The Company has asset retirement obligations arising from regulatory or contractual requirements to perform certain reclamation activities at the time that certain quarries and landfills are closed, which are primarily included in other noncurrent liabilities on the consolidated balance sheets. The current portion of the liabilities, $10.0 million and $7.9 million as of January 2, 2021 and December 28, 2019, respectively, is included in accrued expenses on the consolidated balance sheets. The total
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undiscounted anticipated costs for site reclamation as of January 2, 2021 and December 28, 2019 were $112.8 million and $97.4 million, respectively. The liabilities were initially measured at fair value and are subsequently adjusted for accretion expense, payments and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The following table presents the activity for the asset retirement obligations for the years ended January 2, 2021 and December 28, 2019:
 20202019
Beginning balance$36,676 $30,999 
Acquired obligations861 805 
Change in cost estimate6,523 4,468 
Settlement of reclamation obligations(3,095)(1,812)
Accretion expense2,638 2,216 
Ending balance$43,603 $36,676 
 
(15) 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 not able to predict the ultimate outcome or cost of the investigation at this time.
 
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.

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.
 
(16) 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:

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20202019
Operating lease cost$10,134 $10,451 
Variable lease cost316 423 
Short-term lease cost44,066 38,417 
Financing lease cost:
Amortization of right-of-use assets12,598 11,062 
Interest on lease liabilities3,068 3,171 
Total lease cost$70,182 $63,524 
20202019
Supplemental balance sheet information related to leases:
Operating leases:
Operating lease right-of-use assets$28,543 $32,777 
Current operating lease liabilities$8,188 $8,427 
Noncurrent operating lease liabilities21,500 25,381 
Total operating lease liabilities$29,688 $33,808 
Finance leases:
Property and equipment, gross$92,679 $82,660 
Less accumulated depreciation(32,828)(24,907)
Property and equipment, net$59,851 $57,753 
Current finance lease liabilities$24,601 $16,007 
Long-term finance lease liabilities31,727 40,410 
Total finance lease liabilities$56,328 $56,417 
20202019
Weighted average remaining lease term (years):
Operating leases8.78.6
Finance lease2.42.6
Weighted average discount rate:
Operating leases5.3 %5.5 %
Finance lease5.2 %5.5 %
Maturities of lease liabilities were as follows:
Operating LeasesFinance Leases
2021$9,491 $26,742 
20226,088 18,603 
20234,663 7,053 
20242,863 3,207 
20251,781 2,573 
Thereafter12,961 2,831 
Total lease payments37,847 61,009 
Less imputed interest(8,159)(4,681)
Present value of lease payments$29,688 $56,328 

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The Company has lease agreements associated with quarry facilities under which royalty payments are made. The payments are generally based on tons sold in a particular period; however, certain agreements have minimum annual payments. Royalty expense recorded in cost of revenue during the years ended January 2, 2021, December 28, 2019 and December 29, 2018 was $29.2 million, $24.3 million and $20.1 million, respectively. Minimum contractual commitments for the subsequent five years under royalty agreements are as follows:
 
Royalty
Agreements
2021$9,916 
20229,880 
20239,594 
20249,295 
20259,052 
 
(17) Fair Value of Financial Instruments
 
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 January 2, 2021 and December 28, 2019 was:
 
 20202019
Current portion of acquisition-related liabilities and Accrued expenses:
Contingent consideration$654 $1,967 
Acquisition-related liabilities and Other noncurrent liabilities:
Contingent consideration$1,209 $1,302 
 
The fair value accounting guidance establishes the following fair value hierarchy that prioritizes the inputs used to measure fair value:
 
Level  1 —  Quoted prices in active markets for identical assets and liabilities.
Level 2 —  Observable inputs, other than quoted prices, for similar assets or liabilities in active markets.
Level 3 —  Unobservable inputs, which includes the use of valuation models.
 
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 January 2, 2021 and December 28, 2019 were:
 
 January 2, 2021December 28, 2019
Fair ValueCarrying ValueFair ValueCarrying Value
Level 1
Long-term debt(1)$1,971,087 $1,915,425 $1,918,720 $1,872,273 
Level 3
Current portion of deferred consideration and noncompete obligations(2)7,173 7,173 28,233 28,233 
Long term portion of deferred consideration and noncompete obligations(3)11,037 11,037 16,364 16,364 
______________________
(1)    $6.4 million and $7.9 million were included in current portion of debt as of January 2, 2021 and December 28, 2019, 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.
31


 
Level 1 fair values are used to value investments in publicly-traded entities and assumed obligations for publicly-traded long-term debt.

Level 2 fair values are typically used to value acquired receivables, inventories, machinery and equipment, land, buildings, deferred income tax assets and liabilities, liabilities for asset retirement obligations, environmental remediation and compliance obligations. Additionally, Level 2 fair values are typically used to value assumed contracts at other-than-market rates.

Level 3 fair values are used to value acquired mineral reserves and leased mineral interests and other identifiable intangible assets. The fair values of mineral reserves and leased mineral interests are determined using an excess earnings approach, which requires management to estimate future cash flows. The estimate of future cash flows is based on available historical information and forecasts determined by management, but is inherently uncertain. Key assumptions in estimating future cash flows include sales price, volumes and expected profit margins, net of capital requirements. The present value of the projected net cash flows represents the fair value assigned to mineral reserves and mineral interests. The discount rate is a significant assumption used in the valuation model and is based on the required rate of return that a hypothetical market participant would assume if purchasing the acquired business.
 
The Level 3 fair values of contingent consideration were based on 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 no material adjustments to the fair value of contingent consideration in 2020 or 2019. The fair values of the deferred consideration and noncompete obligations were determined based on 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.
 
(18) 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, the Company’s Chief Operating Decision Maker (“CODM”). The CODM primarily evaluates the performance of its 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 and for the years ended January 2, 2021, December 28, 2019 and December 29, 2018:
 
 202020192018
Revenue*:
West$1,262,196 $1,122,338 $1,117,066 
East799,633 809,098 703,147 
Cement270,622 290,704 280,789 
Total revenue$2,332,451 $2,222,140 $2,101,002 
______________________
32


*   Intercompany sales are immaterial and the presentation above only reflects sales to external customers.
 202020192018
Income from operations before taxes$121,800 $94,982 $74,110 
Interest expense103,291 115,988 115,831 
Depreciation, depletion and amortization218,682 214,886 203,305 
Accretion2,638 2,216 1,605 
Loss on debt financings4,064 14,565 149 
Gain on sale of business(12,108)
Transaction costs2,747 2,222 4,238 
Non-cash compensation28,857 20,403 25,378 
Other2,957 (3,800)(6,247)
Total Adjusted EBITDA$485,036 $461,462 $406,261 
Total Adjusted EBITDA by Segment:
West$271,052 $204,964 $188,999 
East162,275 187,625 138,032 
Cement92,956 103,438 111,394 
Corporate and other(41,247)(34,565)(32,164)
Total Adjusted EBITDA$485,036 $461,462 $406,261 
 
 202020192018
Purchases of property, plant and equipment
West$67,500 $71,397 $120,657 
East92,528 77,894 64,384 
Cement15,071 25,691 28,036 
Total reportable segments175,099 174,982 213,077 
Corporate and other2,150 2,513 7,608 
Total purchases of property, plant and equipment$177,249 $177,495 $220,685 
 
 202020192018
Depreciation, depletion, amortization and accretion:
West$93,866 $93,256 $91,794 
East86,205 81,403 75,433 
Cement37,267 38,447 35,061 
Total reportable segments217,338 213,106 202,288 
Corporate and other3,982 3,996 2,622 
Total depreciation, depletion, amortization and accretion$221,320 $217,102 $204,910 
 
 202020192018
Total assets:
West$1,503,382 $1,379,684 $1,370,501 
East1,303,742 1,288,835 1,253,640 
Cement850,835 868,528 877,586 
Total reportable segments3,657,959 3,537,047 3,501,727 
Corporate and other419,175 319,176 131,517 
Total$4,077,134 $3,856,223 $3,633,244 
 

33



(19) Senior Notes’ 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. 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.





















34


Condensed Consolidating Balance Sheets
January 2, 2021
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Assets
Current assets:
Cash and cash equivalents$401,074 $10,287 $10,461 $(3,641)$418,181 
Accounts receivable, net230,199 24,384 109 254,696 
Intercompany receivables404,459 1,303,293 (1,707,752)
Cost and estimated earnings in excess of billings7,504 1,162 8,666 
Inventories193,417 6,891 200,308 
Other current assets2,840 6,797 1,791 11,428 
Total current assets808,377 1,751,497 44,689 (1,711,284)893,279 
Property, plant and equipment, net9,410 1,746,045 94,714 1,850,169 
Goodwill1,142,083 60,208 1,202,291 
Intangible assets, net47,852 47,852 
Operating lease right-of-use assets2,615 21,880 4,048 28,543 
Other assets4,022,729 207,699 493 (4,175,921)55,000 
Total assets$4,843,131 $4,917,056 $204,152 $(5,887,205)$4,077,134 
Liabilities and Member’s Interest
Current liabilities:
Current portion of debt$6,354 $$$$6,354 
Current portion of acquisition-related liabilities7,827 7,827 
Accounts payable3,889 108,805 8,619 109 121,422 
Accrued expenses54,108 106,320 4,014 (3,641)160,801 
Current operating lease liabilities913 6,114 1,161 8,188 
Intercompany payables1,215,043 485,401 7,308 (1,707,752)
Billings in excess of costs and estimated earnings15,508 991 16,499 
Total current liabilities1,280,307 729,975 22,093 (1,711,284)321,091 
Long-term debt1,892,347 1,892,347 
Acquisition-related liabilities12,246 12,246 
Noncurrent operating lease liabilities2,567 16,062 2,871 21,500 
Other noncurrent liabilities5,142 208,540 117,921 (164,421)167,182 
Total liabilities3,180,363 966,823 142,885 (1,875,705)2,414,366 
Total member's interest1,662,768 3,950,233 61,267 (4,011,500)1,662,768 
Total liabilities and member’s interest$4,843,131 $4,917,056 $204,152 $(5,887,205)$4,077,134 




35


Condensed Consolidating Balance Sheets
December 28, 2019
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
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 











36


Condensed Consolidating Statements of Operations and Comprehensive Income
Year Ended January 2, 2021
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Revenue$$2,259,865 $89,752 $(17,166)$2,332,451 
Cost of revenue (excluding items shown separately below)1,542,586 58,576 (17,166)1,583,996 
General and administrative expenses72,504 217,897 11,561 301,962 
Depreciation, depletion, amortization and accretion3,983 210,038 7,299 221,320 
Operating (loss) income(76,487)289,344 12,316 225,173 
Other (income) loss, net(328,914)(2,473)(198)331,667 82 
Interest expense (income)130,176 (31,402)4,517 103,291 
Income from operation before taxes122,251 323,219 7,997 (331,667)121,800 
Income tax expense (benefit)1,514 (4,737)4,286 1,063 
Net income attributable to Summit LLC$120,737 $327,956 $3,711 $(331,667)$120,737 
Comprehensive income (loss) attributable to member of Summit Materials, LLC$123,125 $330,185 $(906)$(329,279)$123,125 





























37


Condensed Consolidating Statements of Operations and Comprehensive Income
Year ended December 28, 2019
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Revenue$$2,139,457 $94,879 $(12,196)$2,222,140 
Cost of revenue (excluding items shown separately below)1,473,124 65,404 (12,196)1,526,332 
General and administrative expenses58,099 195,683 11,366 265,148 
Depreciation, depletion, amortization and accretion3,997 207,277 5,828 217,102 
Operating (loss) income(62,096)263,373 12,281 213,558 
Other (income) loss, net(279,517)(8,767)(790)291,662 2,588 
Interest expense (income)127,734 (16,561)4,815 115,988 
Income from operation before taxes89,687 288,701 8,256 (291,662)94,982 
Income tax expense1,090 3,377 1,918 6,385 
Net income attributable to Summit LLC$88,597 $285,324 $6,338 $(291,662)$88,597 
Comprehensive income attributable to member of Summit Materials, LLC$91,242 $287,395 $1,622 $(289,017)$91,242 










38


Condensed Consolidating Statements of Operations and Comprehensive Income
Year ended December 29, 2018
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Revenue$$2,018,428 $88,658 $(6,084)$2,101,002 
Cost of revenue (excluding items shown separately below)1,416,222 65,641 (6,084)1,475,779 
General and administrative expenses62,376 184,917 10,554 257,847 
Depreciation, depletion, amortization and accretion2,622 197,406 4,882 204,910 
Operating (loss) income(64,998)219,883 7,581 162,466 
Other (income) loss, net(249,204)(14,643)823 247,657 (15,367)
Interest expense118,857 (7,818)4,792 115,831 
Gain on sale of business(12,108)(12,108)
Income from continuing operations before taxes65,349 254,452 1,966 (247,657)74,110 
Income tax (benefit) expense1,512 8,226 535 10,273 
Net income attributable to member of Summit Materials, LLC$63,837 $246,226 $1,431 $(247,657)$63,837 
Comprehensive income attributable to member of Summit Materials, LLC$57,356 $243,359 $10,779 $(254,138)$57,356 
39


Condensed Consolidating Statements of Cash Flows
For the year ended January 2, 2021
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(135,895)$502,595 $42,169 $$408,869 
Cash flow from investing activities:
Acquisitions, net of cash acquired(92,085)(31,392)(123,477)
Purchase of property, plant and equipment(2,150)(173,228)(1,871)(177,249)
Proceeds from the sale of property, plant, and equipment13,935 83 14,018 
Other1,121 1,121 
Net cash used for investing activities(2,150)(250,257)(33,180)(285,587)
Cash flow from financing activities:
Proceeds from investment by member(91,142)87,925 4,260 1,043 
Net proceeds from debt issuance700,000 700,000 
Loans received from and payments made on loans from other Summit Companies298,656 (288,711)(12,781)2,836 
Payments on long-term debt(657,942)(15,911)(192)(674,045)
Payments on acquisition-related liabilities(30,757)(30,757)
Debt issuance costs(9,605)(9,605)
Distributions from partnership(2,500)(2,500)
Other(822)(85)(907)
Net cash provided by (used in) financing activities236,645 (247,539)(8,713)2,836 (16,771)
Impact of cash on foreign currency351 351 
Net increase in cash98,600 4,799 627 2,836 106,862 
Cash — Beginning of period302,474 5,488 9,834 (6,477)311,319 
Cash — End of period$401,074 $10,287 $10,461 $(3,641)$418,181 


















40


Condensed Consolidating Statements of Cash Flows
For the year ended December 28, 2019
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(112,019)$431,323 $17,880 $$337,184 
Cash flow from investing activities:
Acquisitions, net of cash acquired(5,392)(5,392)
Purchase of property, plant and equipment(2,513)(163,652)(11,330)(177,495)
Proceeds from the sale of property, plant, and equipment21,083 90 21,173 
Proceeds from the sale of a business— 21,564 — — 21,564 
Other(1,095)(1,095)
Net cash used for investing activities(2,513)(149,056)(11,240)(162,809)
Cash flow from financing activities:
Proceeds from investment by member(21,614)40,690 19,076 
Net proceeds from debt issuance300,000 300,000 
Loans received from and payments made on loans from other Summit Companies287,029 (280,836)(4,586)(1,607)
Payments on long-term debt(256,354)(13,650)(225)(270,229)
Payments on acquisition-related liabilities(31,383)(31,383)
Financing costs(6,312)(6,312)
Distributions from partnership(2,500)(2,500)
Other(462)(40)(502)
Net cash provided by (used in) financing activities299,787 (285,219)(4,811)(1,607)8,150 
Impact of cash on foreign currency286 286 
Net increase (decrease) in cash185,255 (2,952)2,115 (1,607)182,811 
Cash — Beginning of period117,219 8,440 7,719 (4,870)128,508 
Cash — End of period$302,474 $5,488 $9,834 $(6,477)$311,319 


















41


Condensed Consolidating Statements of Cash Flows
For the year ended December 29, 2018
 
100%
OwnedNon-
IssuersGuarantorsGuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(142,315)$340,401 $11,282 $$209,368 
Cash flow from investing activities:
Acquisitions, net of cash acquired(246,017)(246,017)
Purchase of property, plant and equipment(7,607)(188,435)(24,643)(220,685)
Proceeds from the sale of property, plant, and equipment21,263 372 21,635 
Proceeds from the sale of a business21,564 21,564 
Other3,804 3,804 
Net cash used for investing activities(7,607)(387,821)(24,271)(419,699)
Cash flow from financing activities:
Proceeds from investment by member(146,533)162,148 15,615 
Net proceeds from debt issuance64,500 64,500 
Loans received from and payments made on loans from other Summit Companies51,696 (65,845)6,647 7,502��
Payments on long-term debt(69,265)(15,662)(115)(85,042)
Payments on acquisition-related liabilities(34,004)(34,004)
Financing costs(550)(550)
Distributions from partnership(2,569)(2,569)
Other(879)(1,031)(33)(1,943)
Net cash provided by financing activities(103,600)45,606 6,499 7,502 (43,993)
Impact of cash on foreign currency(724)(724)
Net (decrease) increase in cash(253,522)(1,814)(7,214)7,502 (255,048)
Cash — Beginning of period370,741 10,254 14,933 (12,372)383,556 
Cash — End of period$117,219 $8,440 $7,719 $(4,870)$128,508 
42