EX-99.4 4 d21642dex994.htm EX-99.4 EX-99.4

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information has been derived by applying pro forma adjustments to Summit Materials, LLC’s and the Lafarge Target Business’ historical financial statements attached as Exhibits 99.2 and 99.3 to the accompanying Current Report on Form 8-K. Capitalized terms used but not defined herein have the meanings given to them in the body of the accompanying Current Report on Form 8-K

The pro forma adjustments are based on currently available information, accounting judgments and assumptions that we believe are reasonable. The unaudited pro forma condensed consolidated balance sheet and statements of operations are presented for illustrative purposes only and do not purport to represent our results of operations or balance sheet that would actually have occurred had the transactions referred to below been consummated on March 28, 2015 for the unaudited pro forma condensed consolidated balance sheet and on December 29, 2013 for the unaudited pro forma condensed consolidated statements of operations, or to project our financial position or results of operations for any future date or period. The adjustments are described in the notes to the unaudited pro forma condensed consolidated financial information.

The Lafarge Target Business’ predecessor results included in the pro forma statements are presented based on their fiscal year, which is based on calendar period ends. Summit Materials, LLC’s fiscal year is based on a 52-53 week year. The resulting difference is not considered material to the pro forma condensed consolidated financial statements.

The unaudited pro forma condensed consolidated balance sheet as of March 28, 2015 and the unaudited pro forma condensed consolidated statements of operations for the year ended December 27, 2014 and the three months ended March 28, 2015 are presented on a pro forma adjusted basis to give effect to the following items:

 

  •   the completion of Summit Materials, Inc.’s initial public offering (the “IPO”) on March 17, 2015 (as relates to the unaudited pro forma condensed consolidated statements of operations for the year ended December 27, 2014 and the three months ended March 28, 2015);

 

  •   the redemption of $288.2 million in aggregate principal amount of 10 1⁄2% Senior Notes due 2020 (the “2020 notes”) that occurred in April 2015;

 

  •   the offering and sale of the $350.0 million aggregate principal amount of 6.125% Senior Notes due 2023 notes (the “2023 notes”);

 

  •   the July 17, 2015 closing of and borrowings under our new term loan facility (the “New Term Loan Facility”) and our existing revolving credit facility;

 

  •   the closing of the Davenport Acquisition;

 

  •   the repayment of certain indebtedness, including the redemption of $183.0 million in aggregate principal amount of 2020 notes that is expected to occur in August 2015; and

 

  •   payment of actual and estimated premiums, fees and expenses in connection with the foregoing.

The unaudited pro forma condensed consolidated financial information should be read in conjunction with the consolidated financial statements for Summit Materials, LLC included in Summit LLC’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014 and Summit LLC’s Quarterly Report on Form 10-Q for the period ended March 28, 2015 and for the Lafarge Target Business attached as Exhibits 99.2 and 99.3 to the accompanying Current Report on Form 8-K.

 

1

Summit Materials, LLC and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of March 28, 2015

(Amounts in thousands)

 

     Summit
Materials,
LLC		     April 2015
Partial 2020
Notes
Redemption		     Davenport
Predecessor
Results		      Pro Forma
Davenport
Adjustments		     Offering and Sale
of the 2023 Notes
and New Term
Loan Facility
Refinancing		     Pro Forma Total  
Assets              

Current assets:

              

Cash

    $ 314,980      $ (309,980 )(a)    $ —         $ —        $ —        $ 5,000   

Accounts receivable, net

      109,941        —          7,707         —          —          117,648   

Costs and estimated earnings in excess of billings

      11,836        —          —           —          —          11,836   

Inventories

      133,307        —          24,270         —          —          157,577   

Other current assets

      17,476        —          1,247         —          —          18,723   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total current assets

   587,540      (309,980 )    33,224      —        —        310,784   

Property, plant and equipment, less accumulated depreciation, depletion and amortization

   948,129      —        81,268      217,949 (d)    —        1,247,346   

Goodwill

   415,582      —        114,600      33,263 (d)    —        563,445   

Intangible assets, less accumulated amortization

   16,891      —        —        —        —        16,891   

Other assets

   50,112      (5,267 )(b)    —        —        11,868 (f)    56,713   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total assets

 $ 2,018,254    $ (315,247 )  $ 229,092    $ 251,212    $ 11,868    $ 2,195,179   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Liabilities and Member’s Interest

Current liabilities:

Current portion of debt

 $ 5,275    $ 21,582 (a)  $ —      $ —      $ 19,396 (g)  $ 46,253   

Current portion of acquisition-related liabilities

   22,351      —        —        80,000 (e)    —        102,351   

Accounts payable

   70,840      —        3,341      —        —        74,181   

Accrued expenses

   81,612      (5,147 )(a)    3,194      —        (9,290 )(g)    70,369   

Billings in excess of costs and estimated earnings

   8,309      —        —        —        —        8,309   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total current liabilities

   188,387      16,435      6,535      80,000      10,106      301,464   

Long-term debt

   1,057,418      (299,832 )(c)    —        —        392,672 (h)    1,150,258   

Acquisition-related liabilities

   36,168      —        —        —        —        36,168   

Other noncurrent liabilities

   97,433      —        23,769      —        —        121,202   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total liabilities

   1,379,406      (283,397 )    30,304      80,000      402,778      1,609,091   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Member’s Interest:

Members’ equity

   987,010      —        198,788      171,212 (d)    (370,000 )(i)    987,010   

Accumulated deficit

   (327,523 )    (31,851 )(b)    —        —        (20,910 )(j)    (380,284 ) 

Accumulated other comprehensive loss

   (21,845 )    —        —        —        —        (21,845 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Member’s interest

   637,642      (31,851 )    198,788      171,212      (390,910 )    584,881   

Noncontrolling interest

   1,206      —        —        —        —        1,206   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total member’s interest

   638,848      (31,851 )    198,788      171,212      (390,910 )    586,087   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Total liabilities and member’s interest

 $ 2,018,254    $ (315,247 )  $ 229,092    $ 251,212    $ 11,868    $ 2,195,179   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated balance sheet.

 

2

(a) Represents the adjustments to cash, current portion of debt and accrued expenses from the April 2015 redemption of $288.2 million aggregate principal amount of 2020 notes. The $310.0 million reduction to cash was composed of the following:

 

($ in millions)       

April 2015 redemption of aggregate principal amount of the 2020 notes

    $ (288.2 ) 

Interest payments related to the April 2020 notes redemption

      (5.1 ) 

Prepayment fee on the April 2015 2020 notes redemption

      (38.2 ) 

Borrowing under senior secured revolving credit facility

      21.6   
  

 

 

  

Total

 $ (310.0 ) 
  

 

 

  

 

(b) Represents a $5.3 million adjustment to other assets related to a write off of deferred financing fees associated with the April 2015 2020 notes redemption and the following adjustments to accumulated deficit:

 

($ in millions)       

Write off of the deferred financing fees related to the April 2015 2020 notes redemption

    $ (5.3 ) 

Write-off of the net premium related to the April 2015 2020 notes redemption

      11.6   

Prepayment fee on the April 2015 2020 notes redemption (see tickmark (a))

      (38.2 ) 
  

 

 

  
$ (31.9 ) 
  

 

 

  

 

(c) Represents the following adjustments to long-term debt as a result of the April 2015 redemption of $288.2 million aggregate principal amount of 2020 notes:

 

($ in millions)       

April 2015 redemption of aggregate principal amount of the 2020 notes

    $ (288.2 ) 

Write-off of the net premium related to the April 2015 2020 notes redemption (see tickmark (b))

      (11.6 ) 
  

 

 

  
$ (299.8 ) 
  

 

 

  

 

(d) Represents management’s estimated purchase accounting adjustments to fixed assets, goodwill, and equity related to the Davenport Acquisition.
(e) Represents the $80.0 million deferred purchase obligation payable no later than December 31, 2015, subject to certain adjustments as set forth in the Davenport Purchase Agreement.
(f) Reflects the following changes to other assets as a result of the offering and sale of the 2023 notes and New Term Loan Facility:

 

($ in millions)       

Deferred transaction costs related to the offering and sale of the 2023 notes and New Term Loan Facility

    $ 19.4   

Write off of deferred financing fees related to the August 2015 2020 notes redemption and the New Term Loan Facility

      (7.5 ) 
  

 

 

  
$ 11.9   
  

 

 

  

 

3

(g) Represents the following adjustments to current portion of debt and accrued expenses as a result of the offering and sale of the 2023 notes and New Term Loan Facility:

 

($ in millions)       

Change in the current portion of debt related to the New Term Loan Facility

    $ 1.2   

Interest payments related to the August 2015 2020 notes redemption

      8.9   

Borrowing under our revolving credit facility to fund a portion of the redemption fees on the August 2015 2020 notes redemption

      9.3   
  

 

 

  
$ 19.4   
  

 

 

  

 

(h) Represents the following adjustments to long-term debt as a result of the offering and sale of the 2023 notes and New Term Loan Facility:

 

($ in millions)       

New Term Loan Facility (net of current portion of debt of $6.5 million and discount of $3.2 million)

    $ 640.3   

Refinance in connection with the New Term Loan Facility (net of current portion of debt of $5.3 million)

      (409.3 ) 

Offering and sale of the 2023 notes

      350.0   

Redemption of the 2020 notes in August 2015

      (183.0 ) 

Write off of the net premium related to the August 2015 2020 notes redemption and the New Term Loan Facility

      (5.3 ) 
  

 

 

  
$ 392.7   
  

 

 

  

 

(i) Adjustment to eliminate the Davenport Acquisition equity changes upon consolidation.
(j) Represents the following adjustments to accumulated deficit as a result of the offering and sale of the 2023 notes and New Term Loan Facility:

 

($ in millions)       

Write off of the deferred financing fees related to the 2020 notes redeemed and the refinancing in connection with the New Term Loan Facility

    $ (7.5 ) 

Reduction of the net premium related to the 2020 notes redeemed and the refinancing in connection with the New Term Loan Facility

      5.3   

Redemption fees on the August 2015 2020 notes redemption

      (18.7 ) 
  

 

 

  
$ (20.9 ) 
  

 

 

  

 

4

Summit Materials, LLC and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of

Operations

Three Months Ended March 28, 2015

(Amounts in thousands)

 

     Summit
Materials, LLC		     Pre-acquisition
results of
Davenport
Acquisition		     Pro Forma
Davenport
Adjustments		     Pro Forma
Adjustments for
the April 2015
Partial 2020 Notes
Redemption, Sale
of the 2023 Notes
and New Term
Loan Facility
Refinancing		     Pro Forma
Adjustments for
the IPO		     Pro Forma Total  

Revenue

    $ 193,987      $ 11,301      $ 30,432 (a)    $ —        $ —        $ 235,720   

Cost of revenue

      158,269        7,718        25,449 (a)      —          —          191,436   

General and administrative expenses

      67,234        2,779        —          —          (29,295 )(f)      40,718   

Depreciation, depletion, amortization and accretion

      26,126        1,807        1,084 (b)      —          —          29,017   

Transaction costs

      1,364        —          (1,022 )(c)      —          —          342   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating loss

   (59,006 )    (1,003 )    4,920      —        29,295      (25,794 ) 

Other expense, net

   391      —        —        —        —        391   

Loss on debt financings

   799      —        —        —        —        799   

Interest expense

   24,109      —        —        (4,703 )(d)    —        19,406   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Loss) Income from continuing operations before taxes

   (84,305 )    (1,003 )    4,920      4,703      29,295      (46,390 ) 

Income tax benefit

   (4,468 )    (417 )    —        (126 )(e)    —        (5,011 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net (Loss) Income

   (79,837 )    (586 )    4,920      4,829      29,295      (41,379 ) 

Net loss attributable to noncontrolling interests

   (1,982 )    —        —        —        —        (1,982 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net (loss) income attributable to Summit Materials, LLC

 $ (77,855 )  $ (586 )  $ 4,920    $ 4,829    $ 29,295    $ (39,397 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated statement of operations for the three months ended March 28, 2015.

 

(a) Represents the revenue and costs related to a supply agreement to sell third-party cement through the Davenport terminals. This agreement will be assigned to Summit Materials as part of the Davenport Acquisition, but was not included in the audit of the Lafarge Target Business’ financial statements.
(b) Represents the additional depreciation expense related to the step up in fair value of fixed assets acquired in the Davenport Acquisition, calculated as follows:

 

($ in millions)

       

Estimated depreciation expense

    $ 2.9   

Elimination of historical depreciation expense

      (1.8 ) 
  

 

 

  

Depreciation expense adjustment

 $ 1.1   
  

 

 

  

 

(c) This adjustment is to eliminate transaction costs recognized during the three months ended March 28, 2015 in connection with the Davenport Acquisition, principally third party accounting, legal, valuation and financial advisory fees.

 

5

(d) Represents the adjustment to interest expense from the redemption of $288.2 million in aggregate principal amount of 2020 notes and the offering and sale of the 2023 notes and New Term Loan Facility as follows:

 

($ in millions)

       

Estimated quarterly interest expense after the Davenport Acquisition

    $ 16.4   

Elimination of historical interest expense

      (21.7 ) 

Estimated incremental interest expense related to the amortization of new deferred financing fees and discount

      0.6   
  

 

 

  
$ (4.7 ) 
  

 

 

  

 

(e) The income tax benefit adjustment relates to the change in the debt balance in our C corporation subsidiaries as a result of the 2020 notes redemptions and the sale of the 2023 notes.
(f) The IPO adjustments for the general and administrative expenses relate to the following:

 

($ in millions)

       

Termination of the transaction and management fee agreement with Blackstone Management Partners L.L.C.(1)

    $ (14.8 ) 

Removal of the non-recurring stock compensation modification charge, offset by incremental stock compensation expense

      (14.5 ) 
  

 

 

  
$ (29.3 ) 
  

 

 

  

 

  (1) In connection with the formation of Summit Holdings, Summit Holdings entered into a transaction and management fee agreement with Blackstone Management Partners L.L.C. to provide monitoring, advisory and consulting services. This is the expenses and termination payment associated with this agreement that ended with the IPO.

 

6

Summit Materials, LLC

Unaudited Pro Forma Condensed Consolidated

Statement of Operations

Year Ended December 27, 2014

(Amounts in thousands)

 

     Summit
Materials, LLC		     Pre-acquisition
results of
Davenport
Acquisition		      Pro Forma
Davenport
Adjustments		     Pro Forma
Adjustments for
April 2015 Partial
2020 Notes
Redemption, Sale
of the 2023 Notes
and New Term
Loan Facility
Refinancing		     Pro Forma
Adjustments for
the IPO		     Pro Forma Total  

Revenue

    $ 1,204,231      $ 113,680       $ 4,739 (a)    $ —        $ —        $ 1,322,650   

Cost of revenue

      887,160        67,155         3,991 (a)      —          —          958,306   

General and administrative expenses

      150,732        16,049         —          —          (3,198 )(f)      163,583   

Depreciation, depletion, amortization and accretion

      87,826        7,200         4,409 (b)      —          —          99,435   

Transaction costs

      8,554        —           (50 )(c)      —          —          8,504   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

   69,959      23,276      (3,612 )    —        3,198      92,821   

Other (income) loss, net

   (3,447 )    179      —        —        —        (3,268 ) 

Interest expense

   86,742      —        —        (9,385 )(d)    —        77,357   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

(Loss) Income from continuing operations before taxes

   (13,336 )    23,097      (3,612 )    9,385      3,198      18,732   

Income tax (benefit) expense

   (6,983 )    7,798      —        (17 )(e)    —        798   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net (Loss) Income from continuing operations

   (6,353 )    15,299      (3,612 )    9,401      3,198      17,934   

Income from discontinued operations

   (71 )    —        —        —        —        (71 ) 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net Loss (Income)

   (6,282 )    15,299      (3,612 )    9,401      3,198      18,005   

Net income attributable to noncontrolling interests

   2,495      —        —        —        —        2,495   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net (loss) income attributable to Summit Materials, LLC

 $ (8,777 )  $ 15,299    $ (3,612 )  $ 9,401    $ 3,918    $ 15,510   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated statement of operations for the year ended December 27, 2014.

 

(a) Represents the revenue and costs related to a supply agreement to sell third-party cement through the Davenport terminals. This agreement will be assigned to Summit Materials as part of the Davenport Acquisition, but was not included in the audit of the Lafarge Target Business’ financial statements.
(b) The depreciation expense adjustment relates to the step up in fair value of fixed assets acquired in the Davenport Acquisition. A summary of the effects of the adjustment to depreciation expense for the year ended December 27, 2014 is as follows:

 

($ in millions)

       

Estimated depreciation expense

    $ 11.6   

Elimination of historical depreciation expense

      (7.2 ) 
  

 

 

  

Depreciation expense adjustment

 $ 4.4   
  

 

 

  

 

7

(c) This adjustment is to eliminate transaction costs recognized during the year ended December 27, 2014 in connection with the Davenport Acquisition, principally third party accounting, legal, valuation and financial advisory fees.
(d) A summary of the effects of the adjustment to interest expense for the year ended December 27, 2014 is as follows:

 

($ in millions)

       

Estimated annual interest expense after the Davenport Acquisition

    $ 65.6   

Elimination of historical interest expense

      (76.8 ) 

Estimated incremental interest expense related to the amortization of new deferred financing fees and discount

      1.7   
  

 

 

  
$ (9.4 ) 
  

 

 

  

 

(e) The income tax benefit adjustment relates to the change in the debt balance in our C corporation subsidiaries as a result of the 2020 notes redemptions and the sale of the 2023 notes.
(f) The IPO adjustments for the general and administrative expenses relate to the following:

 

($ in millions)

       

Termination of the transaction and management fee agreement with Blackstone Management Partners L.L.C.(1)

    $ (4.9 ) 

Incremental stock compensation expense

      1.7   
  

 

 

  
$ (3.2 ) 
  

 

 

  

 

  (1) In connection with the formation of Summit Holdings, Summit Holdings entered into a transaction and management fee agreement with Blackstone Management Partners L.L.C. to provide monitoring, advisory and consulting services. This is the expenses and termination payment associated with this agreement that ended with the IPO.

 

8