Exhibit 99.1
 
SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands) 
 April 2,January 1,
 20222022
 (unaudited)(audited)
Assets  
Current assets:  
Cash and cash equivalents$287,392 $380,961 
Accounts receivable, net239,839 287,226 
Costs and estimated earnings in excess of billings12,723 7,600 
Inventories187,009 180,760 
Other current assets14,305 11,827 
Current assets held for sale36,572 1,236 
Total current assets777,840 869,610 
Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 2, 2022 - $1,290,560 and January 1, 2022 - $1,266,513)
1,766,594 1,842,908 
Goodwill1,147,276 1,164,750 
Intangible assets, less accumulated amortization (April 2, 2022 - $16,218 and January 1, 2022 - $15,269)
67,015 69,396 
Operating lease right-of-use assets28,766 30,150 
Other assets43,200 58,745 
Noncurrent assets held for sale102,182 — 
Total assets$3,932,873 $4,035,559 
Liabilities and Members' Interest  
Current liabilities:  
Current portion of debt$6,354 $6,354 
Current portion of acquisition-related liabilities13,078 13,110 
Accounts payable146,902 128,843 
Accrued expenses114,228 148,136 
Current operating lease liabilities5,934 6,497 
Billings in excess of costs and estimated earnings6,734 7,401 
Current liabilities held for sale13,110 — 
Total current liabilities306,340 310,341 
Long-term debt1,590,050 1,591,019 
Acquisition-related liabilities22,928 33,369 
Noncurrent operating lease liabilities28,017 28,880 
Other noncurrent liabilities185,446 187,006 
Noncurrent liabilities held for sale3,031 — 
Total liabilities2,135,812 2,150,615 
Commitments and contingencies (see note 11)
Members' equity1,464,619 1,507,859 
Accumulated earnings346,724 393,111 
Accumulated other comprehensive loss(14,282)(16,026)
Total members' interest1,797,061 1,884,944 
Total liabilities and members' interest$3,932,873 $4,035,559 
 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands)
 
 Three months ended
 April 2, 2022April 3, 2021
Revenue:  
Product$355,669 $354,234 
Service36,826 44,247 
Net revenue392,495 398,481 
Delivery and subcontract revenue28,452 29,363 
Total revenue420,947 427,844 
Cost of revenue (excluding items shown separately below):
Product290,345 277,134 
Service34,583 40,197 
Net cost of revenue324,928 317,331 
Delivery and subcontract cost28,452 29,363 
Total cost of revenue353,380 346,694 
General and administrative expenses51,924 51,642 
Depreciation, depletion, amortization and accretion51,193 56,336 
Gain on sale of property, plant and equipment (1,255)(1,769)
Operating loss(34,295)(25,059)
Interest expense20,149 24,124 
Gain on sale of businesses(14,205)(15,668)
Other income, net(696)(4,889)
Loss from operations before taxes(39,543)(28,626)
Income tax expense (benefit)6,844 (836)
Net loss attributable to Summit LLC$(46,387)$(27,790)
 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income
(In thousands)
 
 Three months ended
 April 2, 2022April 3, 2021
Net loss$(46,387)$(27,790)
Other comprehensive income (loss):  
Foreign currency translation adjustment1,744 2,126 
Comprehensive loss attributable to Summit LLC$(44,643)$(25,664)
 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 
 Three months ended
 April 2, 2022April 3, 2021
Cash flows from operating activities:  
Net loss$(46,387)$(27,790)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion54,838 59,045 
Share-based compensation expense5,422 5,363 
Net gain on asset and business disposals(15,660)(15,964)
Change in deferred tax asset, net3,818 (1,386)
Other(221)483 
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net35,836 4,946 
Inventories(36,752)(15,412)
Costs and estimated earnings in excess of billings(6,449)(8,442)
Other current assets(1,891)(9,209)
Other assets1,183 2,504 
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable16,744 14,518 
Accrued expenses(25,947)(24,130)
Billings in excess of costs and estimated earnings317 (2,578)
Other liabilities(1,564)(3,266)
Net cash used in operating activities(16,713)(21,318)
Cash flows from investing activities:
Purchases of property, plant and equipment(57,774)(69,757)
Proceeds from the sale of property, plant and equipment1,439 2,663 
Proceeds from sale of businesses47,821 33,077 
Other(857)(483)
Net cash used in investing activities(9,371)(34,500)
Cash flows from financing activities:
Capital (distributions to) contributions by member(47,482)15,920 
Payments on debt(7,603)(10,170)
Payments on acquisition-related liabilities(11,397)(5,596)
Distributions— (2,500)
Other(1,180)(416)
Net cash used in financing activities(67,662)(2,762)
Impact of foreign currency on cash177 140 
Net decrease in cash(93,569)(58,440)
Cash and cash equivalents – beginning of period380,961 418,181 
Cash and cash equivalents – end of period$287,392 $359,741 
 
See notes to unaudited consolidated financial statements.




SUMMIT MATERIALS, LLC AND SUBSIDIARIES
Unaudited Consolidated Statements of Changes in Members' Interest
(In thousands)
 
 Total Members' Interest 
   Accumulated 
   otherTotal
 Members'Accumulatedcomprehensivemembers'
 equityearningslossinterest
Balance — January 1, 2022$1,507,859 $393,111 $(16,026)$1,884,944 
Net contributed capital(47,482)— — (47,482)
Net loss— (46,387)— (46,387)
Other comprehensive income— — 1,744 1,744 
Share-based compensation5,422 — — 5,422 
Shares redeemed to settle taxes and other(1,180)— — (1,180)
Balance — April 2, 2022$1,464,619 $346,724 $(14,282)$1,797,061 
Balance — January 2, 2021$1,459,211 $222,140 $(18,583)$1,662,768 
Net contributed capital15,920 — — 15,920 
Net loss— (27,790)— (27,790)
Other comprehensive loss— — 2,126 2,126 
Distributions(2,500)— — (2,500)
Share-based compensation5,363 — — 5,363 
Shares redeemed to settle taxes and other(416)— — (416)
Balance — April 3, 2021$1,477,578 $194,350 $(16,457)$1,655,471 
 
See notes to unaudited consolidated financial statements




SUMMIT MATERIALS, LLC
 
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
(Dollars in tables in thousands)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
Summit Materials, LLC (“Summit LLC” and, together with its subsidiaries, “Summit,” “we,” “us,” “our” or the “Company”) is a vertically-integrated construction materials company. The Company is engaged in the production and sale of aggregates, cement, ready-mix concrete, asphalt paving mix and concrete products and owns and operates quarries, sand and gravel pits, two cement plants, cement distribution terminals, ready-mix concrete plants, asphalt plants and landfill sites. It is also engaged in paving and related services. The Company’s three operating and reporting segments are the West, East and Cement segments.
 
Substantially all of the Company’s construction materials, products and services are produced, consumed and performed outdoors, primarily in the spring, summer and fall. Seasonal changes and other weather-related conditions can affect the production and sales volumes of its products and delivery of services. Therefore, the financial results for any interim period are typically not indicative of the results expected for the full year. Furthermore, the Company’s sales and earnings are sensitive to national, regional and local economic conditions, weather conditions and to cyclical changes in construction spending, among other factors.
 
Summit LLC is a wholly owned indirect subsidiary of Summit Materials Holdings L.P. (“Summit Holdings”), whose primary owner is Summit Materials, Inc. (“Summit Inc.”). Summit Inc. was formed as a Delaware corporation on September 23, 2014. Its sole material asset is a controlling equity interest in Summit Holdings. Pursuant to a reorganization into a holding company structure (the “Reorganization”) consummated in connection with Summit Inc.’s March 2015 initial public offering, Summit Inc. became a holding corporation operating and controlling all of the business and affairs of Summit Holdings and its subsidiaries, including Summit LLC.

Basis of Presentation—These unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto as of and for the year ended January 1, 2022. The Company continues to follow the accounting policies set forth in those audited consolidated financial statements.
 
Management believes that these consolidated interim financial statements include all adjustments, normal and recurring in nature, that are necessary to present fairly the financial position of the Company as of April 2, 2022, the results of operations for the three months ended April 2, 2022 and April 3, 2021 and cash flows for the three months ended April 2, 2022 and April 3, 2021.
 
Use of Estimates—Preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, valuation of deferred tax assets, goodwill, intangibles and other long-lived assets, pension and other postretirement obligations and asset retirement obligations. Estimates also include revenue earned on contracts and costs to complete contracts. Most of the Company’s paving and related services are performed under fixed unit-price contracts with state and local governmental entities. Management regularly evaluates its estimates and assumptions based on historical experience and other factors, including the current economic environment. As future events and their effects cannot be determined with precision, actual results can differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, are reflected in the Company’s consolidated financial statements when the change in estimate occurs.
 
Business and Credit Concentrations—The Company’s operations are conducted primarily across 21 U.S. states and in British Columbia, Canada, with the most significant revenue generated in Texas, Utah, Kansas and Missouri. The Company’s accounts receivable consist primarily of amounts due from customers within these areas. Therefore, collection of these accounts is dependent on the economic conditions in the aforementioned states, as well as specific situations affecting individual customers. Credit granted within the Company’s trade areas has been granted to many customers, and management does not


believe that a significant concentration of credit exists with respect to any individual customer or group of customers. No single customer accounted for more than 10% of the Company’s total revenue in the three months ended April 2, 2022 or April 3, 2021.
 
Revenue Recognition—We earn revenue from the sale of products, which primarily include aggregates, cement, ready-mix concrete and asphalt, but also include concrete products, and from the provision of services, which are primarily paving and related services.

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

Services: We earn revenue from the provision of services, which are primarily paving and related services, which are typically calculated using monthly progress based on the percentage of completion or a customer’s engineer review of progress.

The majority of our construction service contracts are completed within one year, but may occasionally extend beyond this time frame. The majority of our construction service contracts are for work that occurs mostly during the spring, summer and fall. We generally measure progress toward completion on long-term paving and related services contracts based on the proportion of costs incurred to date relative to total estimated costs at completion.

The percentage of completion method of accounting involves the use of various estimating techniques to project costs at completion, and in some cases includes estimates of recoveries asserted against the customer for changes in specifications or other disputes.

Prior Period Reclassifications—We reclassified $1.2 million of other current assets to current assets held for sale for the year ended January 1, 2022 to be consistent with the current year presentation.

2. ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLES
 
The Company has completed numerous acquisitions since its formation, which have been financed through a combination of debt and equity funding and available cash. The operations of each acquisition have been included in the Company’s consolidated results of operations since the respective closing dates of the acquisitions. The Company measures all assets acquired and liabilities assumed at their acquisition-date fair value. Goodwill acquired during a business combination has an indefinite life and is not amortized.

Changes in the carrying amount of goodwill, by reportable segment, from January 1, 2022 to April 2, 2022 are summarized as follows:
 WestEastCement
Total  
Balance—January 1, 2022$571,509 $388,585 $204,656 $1,164,750 
Dispositions (1)— (12,036)— (12,036)
Foreign currency translation adjustments621 — — 621 
Goodwill allocated to assets held for sale— (6,059)— (6,059)
Balance—April 2, 2022$572,130 $370,490 $204,656 $1,147,276 
_______________________________________________________________________
(1) Reflects goodwill derecognition from dispositions completed during the three months ended April 2, 2022.

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 certain rights of ownership, but does not own the reserves. The intangible assets are amortized on a straight-line basis over the lives of the leases or permits. The following table shows intangible assets by type and in total:
 


 April 2, 2022January 1, 2022
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Operating permits$33,671 $(2,987)$30,684 $33,671 $(2,467)$31,204 
Mineral leases15,463 (6,105)9,358 19,927 (8,922)11,005 
Reserve rights25,586 (3,535)22,051 25,586 (3,329)22,257 
Other5,286 (364)4,922 5,481 (551)4,930 
Total intangible assets$80,006 $(12,991)$67,015 $84,665 $(15,269)$69,396 
 
Amortization expense totaled $0.9 million and $1.0 million for the three months ended April 2, 2022 and April 3, 2021, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to April 2, 2022 is as follows:
 
2022 (nine months)$2,830 
20233,780 
20243,754 
20253,710 
20263,661 
20273,649 
Thereafter45,631 
Total$67,015 
In the first quarter of 2022, as part of the Company's strategy to rationalize assets, the Company sold one business in the East segment, resulting in cash proceeds of $47.8 million and a total gain on disposition of $14.2 million.

As of April 2, 2022, the Company has operations in the East Segment that are classified as assets held for sale. Asset and liabilities held for sale as of April 2, 2022 and January 1, 2022 were as follows:

April 2, 2022January 1, 2022
Cash and cash equivalents$175 $— 
Accounts receivable, net7,124 — 
Costs and estimated earnings in excess of billings1,333 — 
Inventories26,361 — 
Other current assets1,579 1,236 
Total current assets held for sale$36,572 $1,236 
Property, plant and equipment, net$77,988 $— 
Goodwill6,059 — 
Intangible assets, net1,858 — 
Operating lease right-of-use assets998 — 
Other assets15,279 — 
Total noncurrent assets held for sale$102,182 $— 
Accounts payable$7,844 $— 
Accrued expenses3,873 — 
Current operating lease liabilities403 — 
Billings in excess of costs and estimated earnings990 — 
Total current liabilities held for sale$13,110 $— 
Noncurrent operating lease liabilities$538 $— 
Other noncurrent liabilities2,493 — 
Total noncurrent liabilities held for sale$3,031 $— 

The above stated amounts classified as held for sale have been excluded from the tables shown in Note 2 - Intangible Assets, Note 3 - Accounts Receivable, net, Note 4 - Inventories, Note 5 - Accrued Expenses and Note 10 - Leases.



3. REVENUE RECOGNITION
 
We derive our revenue predominantly by selling construction materials, products and providing paving and related services. Construction materials consist of aggregates and cement. Products consist of related downstream products, including ready-mix concrete, asphalt paving mix and concrete products. Paving and related service revenue is generated primarily from the asphalt paving services that we provide.
 
Revenue by product for the three months ended April 2, 2022 and April 3, 2021 is as follows:
 Three months ended
 April 2, 2022April 3, 2021
Revenue by product*:  
Aggregates$123,393 $117,388 
Cement42,554 38,139 
Ready-mix concrete157,563 158,233 
Asphalt17,138 28,375 
Paving and related services30,610 43,215 
Other49,689 42,494 
Total revenue$420,947 $427,844 
*Revenue from liquid asphalt terminals is included in asphalt revenue.

Accounts receivable, net consisted of the following as of April 2, 2022 and January 1, 2022:
 
 April 2, 2022January 1, 2022
Trade accounts receivable$217,435 $230,714 
Construction contract receivables16,243 47,054 
Retention receivables10,354 13,094 
Receivables from related parties— 292 
Accounts receivable244,032 291,154 
Less: Allowance for doubtful accounts(4,193)(3,928)
Accounts receivable, net$239,839 $287,226 
 
Retention receivables are amounts earned by the Company but held by customers until paving and related service contracts and projects are near completion or fully completed. Amounts are generally billed and collected within one year.
 
4. INVENTORIES
 
Inventories consisted of the following as of April 2, 2022 and January 1, 2022:
April 2, 2022January 1, 2022
Aggregate stockpiles$123,981 $130,640 
Finished goods37,882 22,690 
Work in process6,974 8,277 
Raw materials18,172 19,153 
Total$187,009 $180,760 
 

5. ACCRUED EXPENSES
 
Accrued expenses consisted of the following as of April 2, 2022 and January 1, 2022:


April 2, 2022January 1, 2022
Interest$9,063 $22,762 
Payroll and benefits24,556 38,894 
Finance lease obligations14,234 17,624 
Insurance20,993 20,480 
Non-income taxes23,396 20,069 
Deferred asset purchase payments3,515 4,912 
Professional fees1,690 1,524 
Other (1)16,781 21,871 
Total$114,228 $148,136 
_______________________________________________________________________
(1) Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.

6. DEBT
 
Debt consisted of the following as of April 2, 2022 and January 1, 2022:
April 2, 2022January 1, 2022
Term Loan, due 2024:  
$608.4 million and $610.0 million, net of $0.6 million and $0.7 million discount at April 2, 2022 and January 1, 2022, respectively
$607,767 $609,298 
6 1/2% Senior Notes, due 2027
300,000 300,000 
5 1/4% Senior Notes, due 2029
700,000 700,000 
Total1,607,767 1,609,298 
Current portion of long-term debt6,354 6,354 
Long-term debt$1,601,413 $1,602,944 
 
The contractual payments of long-term debt, including current maturities, for the five years subsequent to April 2, 2022, are as follows:
2022 (nine months)$4,765 
20236,353 
2024597,254 
2025— 
2026— 
2027300,000 
Thereafter700,000 
Total1,608,372 
Less: Original issue net discount(605)
Less: Capitalized loan costs(11,363)
Total debt$1,596,404 
 
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.

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.
 


As of April 2, 2022 and January 1, 2022, the Company was in compliance with all covenants under the applicable indentures.
 
Senior Secured Credit Facilities— Summit LLC has credit facilities that provide for term loans in an aggregate amount of $650.0 million and revolving credit commitments in an aggregate amount of $345.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate amount of term debt are due on the last business day of each March, June, September and December commencing with the March 2018 payment. The unpaid principal balance is due in full on the maturity date, which is November 21, 2024.
 
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. The maturity date with respect to revolving credit commitments under the revolving credit facility is February 25, 2024.
 
There were no outstanding borrowings under the revolving credit facility as of April 2, 2022 and January 1, 2022, with borrowing capacity of $324.6 million remaining as of April 2, 2022, which is net of $20.4 million of outstanding letters of credit. The outstanding letters of credit are renewed annually and support required bonding on construction projects, large leases, workers compensation claims and the Company’s insurance liabilities.
 
Summit LLC’s Consolidated First Lien Net Leverage Ratio, as such term is defined in the Credit Agreement, should be no greater than 4.75:1.0 as of each quarter-end. As of April 2, 2022 and January 1, 2022, Summit LLC was in compliance with all financial covenants.
 
Summit LLC’s wholly-owned domestic subsidiary companies, subject to certain exclusions and exceptions, are named as subsidiary guarantors of the Senior Notes and the Senior Secured Credit Facilities. In addition, Summit LLC has pledged substantially all of its assets as collateral, subject to certain exclusions and exceptions, for the Senior Secured Credit Facilities.

The following table presents the activity for the deferred financing fees for the three months ended April 2, 2022 and April 3, 2021:
 Deferred financing fees
Balance—January 1, 2022$13,049 
Amortization(692)
Balance—April 2, 2022$12,357 
  
  
Balance - January 2, 2021$18,367 
Amortization(836)
Balance - April 3, 2021$17,531 
 
Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC Bank Canada for a (i) $6.0 million Canadian dollar (“CAD”) revolving credit commitment to be used for operating activities that bears interest per annum equal to the bank’s prime rate plus 0.20%, (ii) $0.5 million CAD revolving credit commitment to be used for capital equipment that bears interest per annum at the bank’s prime rate plus 0.90% and (iii) $0.3 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary. There were no amounts outstanding under this agreement as of April 2, 2022 or January 1, 2022, which may be terminated upon demand.
 
7. INCOME TAXES
 
Summit LLC is a limited liability company and passes its tax attributes for federal and state tax purposes to its parent company and is generally not subject to federal or state income tax. However, certain subsidiary entities file federal, state and Canadian income tax returns due to their status as taxable entities in the respective jurisdiction. The effective income tax rate for the C Corporations differs from the statutory federal rate primarily due to (1) tax depletion expense in excess of the expense recorded under U.S. GAAP, (2) basis differences in assets divested, (3) state income taxes and the effect of graduated tax rates and (4) various other items, such as limitations on meals and entertainment and other costs. The effective income tax rate for the Canadian subsidiary is not significantly different from its historical effective tax rate.
 
No material interest or penalties were recognized in income tax expense during the three months ended April 2, 2022 and April 3, 2021.



8. MEMBERS’ INTEREST
 
Accumulated other comprehensive income (loss) —The changes in each component of accumulated other comprehensive income (loss) consisted of the following:
 
    Accumulated
  Foreign currency other
 Change intranslationCash flow hedgecomprehensive
 retirement plansadjustmentsadjustments(loss) income
Balance — January 1, 2022$(7,243)$(8,783)$— $(16,026)
Foreign currency translation adjustment— 1,744 — 1,744 
Balance — April 2, 2022$(7,243)$(7,039)$— $(14,282)
Balance — January 2, 2021$(8,546)$(10,037)$— $(18,583)
Foreign currency translation adjustment— 2,126 — 2,126 
Balance — April 3, 2021$(8,546)$(7,911)$— $(16,457)
 
9. SUPPLEMENTAL CASH FLOW INFORMATION
 
Supplemental cash flow information is as follows:
 Three months ended
April 2, 2022April 3, 2021
Cash payments:  
Interest$31,789 $29,476 
Payments for income taxes, net1,542 2,312 
Operating cash payments on operating leases2,455 2,928 
Operating cash payments on finance leases372 655 
Finance cash payments on finance leases5,949 5,834 
Non cash financing activities:
Right of use assets obtained in exchange for operating lease obligations$5,416 $3,081 
Right of use assets obtained in exchange for finance leases obligations248 588 
 
10. LEASES

We lease construction and office equipment, distribution facilities and office space. Leases with an initial term of 12 months or less, including month to month leases, are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight line basis over the lease term. For lease agreements we have entered into or reassessed, we combine lease and nonlease components. While we also own mineral leases for mining operations, those leases are outside the scope of Accounting Standards Update No. 2016-2, Leases (Topic 842). Assets acquired under finance leases are included in property, plant and equipment.

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


Three months ended
April 2, 2022April 3, 2021
Operating lease cost$2,512$1,727 
Variable lease cost11372
Short-term lease cost8,2487,301
Financing lease cost:
Amortization of right-of-use assets1,9863,050
Interest on lease liabilities369657
Total lease cost$13,228$12,807
April 2, 2022January 1, 2022
Supplemental balance sheet information related to leases:
Operating leases:
Operating lease right-of-use assets$28,766$30,150
Current operating lease liabilities$5,934$6,497
Noncurrent operating lease liabilities28,01728,880
Total operating lease liabilities$33,951$35,377
Finance leases:
Property and equipment, gross$63,040$68,982
Less accumulated depreciation(31,459)(31,404)
Property and equipment, net$31,581$37,578
Current finance lease liabilities$14,234$17,624
Long-term finance lease liabilities10,55714,982
Total finance lease liabilities$24,791$32,606
Weighted average remaining lease term (years):
Operating leases9.79.7
Finance lease2.52.3
Weighted average discount rate:
Operating leases4.4 %4.4 %
Finance leases5.1 %5.2 %
Maturities of lease liabilities, as of April 2, 2022, were as follows:
Operating LeasesFinance Leases
2022 (nine months)$5,352$11,198
20236,1977,510
20244,8832,936
20253,6122,415
20262,952990
20272,456760
Thereafter17,3071,083
Total lease payments42,75926,892
Less imputed interest(8,808)(2,101)
Present value of lease payments$33,951$24,791

11. COMMITMENTS AND CONTINGENCIES
 
The Company is party to certain legal actions arising from the ordinary course of business activities. Accruals are recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be predicted with certainty, management expects that the ultimate resolution of all current pending or threatened claims and


litigation will not have a material effect on the Company’s consolidated financial position, results of operations or liquidity. The Company records legal fees as incurred.

In March 2018, we were notified of an investigation by the Canadian Competition Bureau (the “CCB”) into pricing practices by certain asphalt paving contractors in British Columbia, including Winvan Paving, Ltd. (“Winvan”). We believe the investigation is focused on time periods prior to our April 2017 acquisition of Winvan and we are cooperating with the CCB. Although we currently do not believe this matter will have a material adverse effect on our business, financial condition or results of operations, we are currently not able to predict the ultimate outcome or cost of the investigation.
 
Environmental Remediation and Site Restoration—The Company’s operations are subject to and affected by federal, state, provincial and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. The Company regularly monitors and reviews its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of the Company’s business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities or noncompliance will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.
 
The Company has asset retirement obligations arising from regulatory and contractual requirements to perform reclamation activities at the time certain quarries and landfills are closed. As of April 2, 2022 and January 1, 2022, $37.0 million and $37.7 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and $4.3 million and $7.4 million, respectively, were included in accrued expenses for future reclamation costs. The total undiscounted anticipated costs for site reclamation as of April 2, 2022 and January 1, 2022 were $107.6 million and $112.4 million, respectively.
 
Other—The Company is obligated under various firm purchase commitments for certain raw materials and services that are in the ordinary course of business. Management does not expect any significant changes in the market value of these goods and services during the commitment period that would have a material adverse effect on the financial condition, results of operations and cash flows of the Company. The terms of the purchase commitments generally approximate one year.
 
12. FAIR VALUE
 
Fair Value Measurements—Certain acquisitions made by the Company require the payment of contingent amounts of purchase consideration. These payments are contingent on specified operating results being achieved in periods subsequent to the acquisition and will only be made if earn-out thresholds are achieved. Contingent consideration obligations are measured at fair value each reporting period. Any adjustments to fair value are recognized in earnings in the period identified.
 
The fair value of contingent consideration as of April 2, 2022 and January 1, 2022 was: 
April 2, 2022January 1, 2022
Current portion of acquisition-related liabilities and Accrued expenses:  
Contingent consideration$133 $129 
Acquisition-related liabilities and Other noncurrent liabilities:
Contingent consideration$1,115 $1,239 
 
The fair value of contingent consideration was based on unobservable, or Level 3, inputs, including projected probability-weighted cash payments and a 9.5% discount rate, which reflects a market discount rate. Changes in fair value may occur as a result of a change in actual or projected cash payments, the probability weightings applied by the Company to projected payments or a change in the discount rate. Significant increases or decreases in any of these inputs in isolation could result in a lower, or higher, fair value measurement. There were no material valuation adjustments to contingent consideration as of April 2, 2022 and April 3, 2021.

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 April 2, 2022 and January 1, 2022 was:


 April 2, 2022January 1, 2022
 Fair ValueCarrying ValueFair ValueCarrying Value
Level 1    
Long-term debt(1)$1,596,591 $1,607,767 $1,653,085 $1,609,298 
Level 3    
Current portion of deferred consideration and noncompete obligations(2)12,945 12,945 12,981 12,981 
Long term portion of deferred consideration and noncompete obligations(3)21,813 21,813 32,130 32,130 
(1)$6.4 million was included in current portion of debt as of April 2, 2022 and January 1, 2022.
(2)Included in current portion of acquisition-related liabilities on the consolidated balance sheets.
(3)Included in acquisition-related liabilities on the consolidated balance sheets.

The fair value of debt was determined based on observable, or Level 2, inputs, such as interest rates, bond yields and quoted prices in inactive markets. The fair values of the deferred consideration and noncompete obligations were determined based on unobservable, or Level 3, inputs, including the cash payment terms in the purchase agreements and a discount rate reflecting the Company’s credit risk. The discount rate used is generally consistent with that used when the obligations were initially recorded.
 
Securities with a maturity of three months or less are considered cash equivalents and the fair value of these assets approximates their carrying value.
 
13. SEGMENT INFORMATION
 
The Company has three operating segments: West, East and Cement, which are its reporting segments. These segments are consistent with the Company’s management reporting structure.
 
The operating results of each segment are regularly reviewed and evaluated by the Chief Executive Officer, our Company’s Chief Operating Decision Maker (“CODM”). The CODM primarily evaluates the performance of the Company’s segments and allocates resources to them based on a segment profit metric that we call Adjusted EBITDA, which is computed as earnings from operations before interest, taxes, depreciation, depletion, amortization, accretion and share-based compensation, as well as various other non-recurring, non-cash amounts. Beginning with the first quarter of 2021, the Company no longer adjusts for transaction costs, as those costs are recurring cash payments, and are included in general and administrative expenses.
 
The West and East segments have several 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 April 2, 2022 and January 1, 2022 and for the three months ended April 2, 2022 and April 3, 2021:
 Three months ended
 April 2, 2022April 3, 2021
Revenue*:  
West$252,232 $251,133 
East122,490 136,042 
Cement46,225 40,669 
Total revenue$420,947 $427,844 
*Intercompany sales are immaterial and the presentation above only reflects sales to external customers.
 


 Three months ended
 April 2, 2022April 3, 2021
Loss from operations before taxes$(39,543)$(28,626)
Interest expense20,149 24,124 
Depreciation, depletion and amortization50,479 55,570 
Accretion714 766 
Gain on sale of businesses(14,205)(15,668)
Non-cash compensation5,422 5,363 
Other247 205 
Total Adjusted EBITDA$23,263 $41,734 
Total Adjusted EBITDA by Segment:
West$32,692 $40,648 
East8,136 11,745 
Cement(5,819)2,499 
Corporate and other(11,746)(13,158)
Total Adjusted EBITDA$23,263 $41,734 
 
 Three months ended
April 2, 2022April 3, 2021
Purchases of property, plant and equipment  
West$26,874 $34,068 
East24,326 33,202 
Cement6,115 2,273 
Total reportable segments57,315 69,543 
Corporate and other459 214 
Total purchases of property, plant and equipment$57,774 $69,757 
 
 Three months ended
 April 2, 2022April 3, 2021
Depreciation, depletion, amortization and accretion:  
West$24,575 $25,140 
East18,295 21,943 
Cement7,574 8,149 
Total reportable segments50,444 55,232 
Corporate and other749 1,104 
Total depreciation, depletion, amortization and accretion$51,193 $56,336 

April 2, 2022January 1, 2022
Total assets:  
West$1,527,170 $1,512,298 
East1,259,620 1,292,638 
Cement852,313 844,086 
Total reportable segments3,639,103 3,649,022 
Corporate and other293,770 386,537 
Total$3,932,873 $4,035,559 
 


14. GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION
 
Summit LLC’s domestic wholly-owned subsidiary companies other than Finance Corp. are named as guarantors (collectively, the “Guarantors”) of the Senior Notes. Finance Corp. does not and will not have any assets or operations other than as may be incidental to its activities as a co-issuer of the Senior Notes and other indebtedness. Certain other partially-owned subsidiaries and a non-U.S. entity do not guarantee the Senior Notes (collectively, the “Non-Guarantors”). The Guarantors provide a joint and several, full and unconditional guarantee of the Senior Notes.
 
There are no significant restrictions on Summit LLC’s ability to obtain funds from any of the Guarantors in the form of dividends or loans. Additionally, there are no significant restrictions on a Guarantor’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 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 Guarantors or Non-Guarantors operated as independent entities.



Condensed Consolidating Balance Sheets
April 2, 2022
     
  Non-  
 Issuers
Guarantors 
Guarantors 
Eliminations 
Consolidated
Assets     
Current assets:     
Cash and cash equivalents$270,487 $1,475 $19,412 $(3,982)$287,392 
Accounts receivable, net49 217,943 21,974 (127)239,839 
Intercompany receivables357,196 1,771,245 — (2,128,441)— 
Cost and estimated earnings in excess of billings— 11,947 776 — 12,723 
Inventories— 180,997 6,012 — 187,009 
Other current assets3,519 44,966 2,392 — 50,877 
Total current assets631,251 2,228,573 50,566 (2,132,550)777,840 
Property, plant and equipment, net11,384 1,665,426 89,784 — 1,766,594 
Goodwill— 1,085,924 61,352 — 1,147,276 
Intangible assets, net— 62,093 4,922 — 67,015 
Operating lease right-of-use assets5,376 18,058 5,332 — 28,766 
Other assets4,424,084 309,795 616 (4,589,113)145,382 
Total assets$5,072,095 $5,369,869 $212,572 $(6,721,663)$3,932,873 
Liabilities and Members' Interest
Current liabilities:
Current portion of debt$6,354 $— $— $— $6,354 
Current portion of acquisition-related liabilities— 13,078 — — 13,078 
Accounts payable5,524 130,424 11,081 (127)146,902 
Accrued expenses39,221 89,979 2,120 (3,982)127,338 
Current operating lease liabilities798 4,387 749 — 5,934 
Intercompany payables1,618,099 508,948 1,394 (2,128,441)— 
Billings in excess of costs and estimated earnings— 6,210 524 — 6,734 
Total current liabilities1,669,996 753,026 15,868 (2,132,550)306,340 
Long-term debt1,590,050 — — — 1,590,050 
Acquisition-related liabilities— 22,928 — — 22,928 
Noncurrent operating lease liabilities9,441 14,199 4,377 — 28,017 
Other noncurrent liabilities5,547 228,195 119,156 (164,421)188,477 
Total liabilities3,275,034 1,018,348 139,401 (2,296,971)2,135,812 
Total members' interest1,797,061 4,351,521 73,171 (4,424,692)1,797,061 
Total liabilities and members' interest$5,072,095 $5,369,869 $212,572 $(6,721,663)$3,932,873 
        


Condensed Consolidating Balance Sheets
January 1, 2022
 
     
  Non-  
 Issuers
Guarantors 
Guarantors 
Eliminations 
Consolidated
Assets     
Current assets:     
Cash and cash equivalents$365,044 $2,264 $18,337 $(4,684)$380,961 
Accounts receivable, net94 264,888 22,185 59 287,226 
Intercompany receivables366,619 1,746,909 — (2,113,528)— 
Cost and estimated earnings in excess of billings— 6,942 658 — 7,600 
Inventories— 175,211 5,549 — 180,760 
Other current assets3,036 8,920 1,107 — 13,063 
Total current assets734,793 2,205,134 47,836 (2,118,153)869,610 
Property, plant and equipment, net10,013 1,742,721 90,174 — 1,842,908 
Goodwill— 1,104,019 60,731 — 1,164,750 
Intangible assets, net— 64,466 4,930 — 69,396 
Operating lease right-of-use assets5,612 19,693 4,845 — 30,150 
Other assets4,417,039 220,500 576 (4,579,370)58,745 
Total assets$5,167,457 $5,356,533 $209,092 $(6,697,523)$4,035,559 
Liabilities and Members' Interest
Current liabilities:
Current portion of debt$6,354 $— $— $— $6,354 
Current portion of acquisition-related liabilities— 13,110 — — 13,110 
Accounts payable6,284 114,405 8,095 59 128,843 
Accrued expenses55,440 94,858 2,522 (4,684)148,136 
Current operating lease liabilities780 5,053 664 — 6,497 
Intercompany payables1,607,816 502,334 3,378 (2,113,528)— 
Billings in excess of costs and estimated earnings— 6,960 441 — 7,401 
Total current liabilities1,676,674 736,720 15,100 (2,118,153)310,341 
Long-term debt1,591,019 — — — 1,591,019 
Acquisition-related liabilities— 33,369 — — 33,369 
Noncurrent operating lease liabilities9,647 15,101 4,132 — 28,880 
Other noncurrent liabilities5,173 227,348 118,906 (164,421)187,006 
Total liabilities3,282,513 1,012,538 138,138 (2,282,574)2,150,615 
Total members' interest1,884,944 4,343,995 70,954 (4,414,949)1,884,944 
Total liabilities and members' interest$5,167,457 $5,356,533 $209,092 $(6,697,523)$4,035,559 



Condensed Consolidating Statements of Operations
For the three months ended April 2, 2022
 
     
  Non-  
 Issuers
Guarantors 
Guarantors 
Eliminations
Consolidated 
Revenue$— $395,180 $27,097 $(1,330)$420,947 
Cost of revenue (excluding items shown separately below)— 334,264 20,446 (1,330)353,380 
General and administrative expenses17,304 31,672 1,693 — 50,669 
Depreciation, depletion, amortization and accretion750 47,496 2,947 — 51,193 
Operating (loss) income(18,054)(18,252)2,011 — (34,295)
Other income, net(5,919)(552)(7)5,782 (696)
Interest expense (income)33,902 (15,123)1,370 — 20,149 
Gain on sale of business— (14,205)— — (14,205)
(Loss) income from operation before taxes(46,037)11,628 648 (5,782)(39,543)
Income tax expense350 6,318 176 — 6,844 
Net (loss) income attributable to Summit LLC$(46,387)$5,310 $472 $(5,782)$(46,387)
Comprehensive (loss) income attributable to member of Summit Materials, LLC$(44,643)$5,310 $(1,272)$(4,038)$(44,643)

Condensed Consolidating Statements of Operations
For the three months ended April 3, 2021
 
     
  Non-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Revenue$— $407,301 $22,811 $(2,268)$427,844 
Cost of revenue (excluding items shown separately below)— 331,844 17,118 (2,268)346,694 
General and administrative expenses18,591 29,849 1,433 — 49,873 
Depreciation, depletion, amortization and accretion1,104 52,566 2,666 — 56,336 
Operating (loss) income(19,695)(6,958)1,594 — (25,059)
Other income, net(25,560)(4,337)(481)25,489 (4,889)
Interest expense (income)33,291 (10,543)1,376 — 24,124 
(Loss) income from operation before taxes(27,426)23,590 699 (25,489)(28,626)
Income tax expense (benefit)364 (1,385)185 — (836)
Net (loss) income attributable to Summit LLC$(27,790)$24,975 $514 $(25,489)$(27,790)
Comprehensive (loss) income attributable to member of Summit Materials, LLC$(25,664)$24,975 $(1,612)$(23,363)$(25,664)



Condensed Consolidating Statements of Cash Flows
For the three months ended April 2, 2022
 
     
  Non-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(48,551)$25,873 $5,965 $— $(16,713)
Cash flow from investing activities:
Purchase of property, plant and equipment(459)(55,522)(1,793)— (57,774)
Proceeds from the sale of property, plant, and equipment— 1,360 79 — 1,439 
Proceeds from the sale of a business— 47,821 — — 47,821 
Other— (857)— — (857)
Net cash used for investing activities(459)(7,198)(1,714)— (9,371)
Cash flow from financing activities:
Capital distributions to member(47,482)— — — (47,482)
Loans received from and payments made on loans from other Summit Companies4,703 (2,052)(3,353)702 — 
Payments on long-term debt(1,588)(6,015)— — (7,603)
Payments on acquisition-related liabilities— (11,397)— — (11,397)
Other(1,180)— — — (1,180)
Net cash used in financing activities(45,547)(19,464)(3,353)702 (67,662)
Impact of cash on foreign currency— — 177 — 177 
Net (decrease) increase in cash(94,557)(789)1,075 702 (93,569)
Cash — Beginning of period365,044 2,264 18,337 (4,684)380,961 
Cash — End of period$270,487 $1,475 $19,412 $(3,982)$287,392 

























Condensed Consolidating Statements of Cash Flows
For the three months ended April 3, 2021
 
     
  Non-  
 Issuers
Guarantors 
GuarantorsEliminationsConsolidated
Net cash (used in) provided by operating activities$(44,988)$18,590 $5,080 $— $(21,318)
Cash flow from investing activities:
Purchase of property, plant and equipment(215)(67,795)(1,747)— (69,757)
Proceeds from the sale of property, plant, and equipment— 2,457 206 — 2,663 
Proceeds from the sale of a business— 33,077 — — 33,077 
Other— (483)— — (483)
Net cash used for investing activities(215)(32,744)(1,541)— (34,500)
Cash flow from financing activities:
Proceeds from investment by member15,920 — — — 15,920 
Loans received from and payments made on loans from other Summit Companies(21,350)22,390 (2,063)1,023 — 
Payments on long-term debt(1,589)(8,531)(50)— (10,170)
Payments on acquisition-related liabilities— (5,596)— — (5,596)
Distributions from partnership(2,500)— — — (2,500)
Other(416)— — — (416)
Net cash (used in) provided by financing activities(9,935)8,263 (2,113)1,023 (2,762)
Impact of cash on foreign currency— — 140 — 140 
Net (decrease) increase in cash(55,138)(5,891)1,566 1,023 (58,440)
Cash — Beginning of period401,074 10,287 10,461 (3,641)418,181 
Cash — End of period$345,936 $4,396 $12,027 $(2,618)$359,741