GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Sep. 28, 2019

Summit Materials, LLC

Guarantor and Non-Guarantor Financial Information

GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Summit LLC’s domestic wholly-owned subsidiary companies other than Finance Corp. are named as guarantors (collectively, the “Guarantors”) of the Senior Notes. Finance Corp. does not and will not have any assets or operations other than as may be incidental to its activities as a co-issuer of the Senior Notes and other indebtedness. Certain other partially-owned subsidiaries and a non-U.S. entity do not guarantee the Senior Notes (collectively, the “Non-Guarantors”). The Guarantors provide a joint and several, full and unconditional guarantee of the Senior Notes.

There are no significant restrictions on Summit LLC’s ability to obtain funds from any of the Guarantor Subsidiaries in the form of dividends or loans. Additionally, there are no significant restrictions on a Guarantor Subsidiary’s ability to obtain funds from Summit LLC or its direct or indirect subsidiaries.

The following condensed consolidating balance sheets, statements of operations and cash flows are provided for the Issuers, the wholly-owned guarantors and the Non-Guarantors.

Earnings from subsidiaries are included in other income in the condensed consolidated statements of operations below. The financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the guarantor or non-guarantor subsidiaries operated as independent entities.

Condensed Consolidating Balance Sheets

September 28, 2019

			100%
			Owned		Non-
	Issuers		Guarantors		Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	178,242	$	2,197	$	7,069	$	(4,919	)	$	182,589
Accounts receivable, net	—		314,249		23,005		(194		)	337,060
Intercompany receivables	449,895		782,193		—		(1,232,088		)	—
Cost and estimated earnings in excess of billings	—		47,033		2,682		—			49,715
Inventories	—		193,195		3,820		—			197,015
Other current assets	1,811		9,382		844		—			12,037
Total current assets	629,948		1,348,249		37,420		(1,237,201		)	778,416
Property, plant and equipment, net	11,348		1,688,612		62,347		—			1,762,307
Goodwill	—		1,141,574		57,922		—			1,199,496
Intangible assets, net	—		24,446		—		—			24,446
Operating lease right-of-use assets	3,486		24,447		5,112		—			33,045
Other assets	3,499,351		160,937		799		(3,609,315		)	51,772
Total assets	$	4,144,133	$	4,388,265	$	163,600	$	(4,846,516	)	$	3,849,482
Liabilities and Member’s Interest
Current liabilities:
Current portion of debt	$	6,354	$	—	$	—	$	—		$	6,354
Current portion of acquisition-related liabilities	—		31,898		—		—			31,898
Accounts payable	3,318		138,284		11,435		(194		)	152,843
Accrued expenses	39,361		80,757		3,035		(4,919		)	118,234
Current operating lease liabilities	750		6,796		1,063		—			8,609
Intercompany payables	782,697		429,858		19,533		(1,232,088		)	—
Billings in excess of costs and estimated earnings	—		11,543		933		—			12,476
Total current liabilities	832,480		699,136		35,999		(1,237,201		)	330,414
Long-term debt	1,853,414		—		—		—			1,853,414
Acquisition-related liabilities	—		38,645		—		—			38,645
Noncurrent operating lease liabilities	3,674		17,684		3,971		—			25,329
Other noncurrent liabilities	3,901		205,384		78,749		(137,018		)	151,016
Total liabilities	2,693,469		960,849		118,719		(1,374,219		)	2,398,818
Total member's interest	1,450,664		3,427,416		44,881		(3,472,297		)	1,450,664
Total liabilities and member’s interest	$	4,144,133	$	4,388,265	$	163,600	$	(4,846,516	)	$	3,849,482

Condensed Consolidating Balance Sheets

December 29, 2018

			100%
			Owned		Non-
	Issuers		Guarantors		Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	117,219	$	8,440	$	7,719	$	(4,870	)	$	128,508
Accounts receivable, net	—		199,538		15,165		(185		)	214,518
Intercompany receivables	500,765		624,427		—		(1,125,192		)	—
Cost and estimated earnings in excess of billings	—		17,711		891		—			18,602
Inventories	—		210,149		3,702		—			213,851
Other current assets	1,953		11,308		2,800		—			16,061
Total current assets	619,937		1,071,573		30,277		(1,130,247		)	591,540
Property, plant and equipment, net	13,300		1,709,083		57,749		—			1,780,132
Goodwill	—		1,136,785		56,243		—			1,193,028
Intangible assets, net	—		18,460		—		—			18,460
Other assets	3,292,851		154,080		947		(3,397,794		)	50,084
Total assets	$	3,926,088	$	4,089,981	$	145,216	$	(4,528,041	)	$	3,633,244
Liabilities and Member’s Interest
Current liabilities:
Current portion of debt	$	6,354	$	—	$	—	$	—		$	6,354
Current portion of acquisition-related liabilities	—		31,770		—		—			31,770
Accounts payable	4,712		92,132		12,349		(185		)	109,008
Accrued expenses	45,146		57,826		1,927		(4,870		)	100,029
Intercompany payables	673,175		436,564		15,453		(1,125,192		)	—
Billings in excess of costs and estimated earnings	—		11,347		493		—			11,840
Total current liabilities	729,387		629,639		30,222		(1,130,247		)	259,001
Long-term debt	1,807,502		—		—		—			1,807,502
Acquisition-related liabilities	—		45,354		—		—			45,354
Other noncurrent liabilities	3,768		226,137		77,368		(171,317		)	135,956
Total liabilities	2,540,657		901,130		107,590		(1,301,564		)	2,247,813
Total member's interest	1,385,431		3,188,851		37,626		(3,226,477		)	1,385,431
Total liabilities and member’s interest	$	3,926,088	$	4,089,981	$	145,216	$	(4,528,041	)	$	3,633,244

Condensed Consolidating Statements of Operations

For the three months ended September 28, 2019

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors		Eliminations			Consolidated
Revenue	$	—		$	706,999		$	29,186	$	(4,103	)	$	732,082
Cost of revenue (excluding items shown separately below)	—			467,595			19,487		(4,103		)	482,979
General and administrative expenses	13,603			46,816			2,676		—			63,095
Depreciation, depletion, amortization and accretion	1,042			52,739			1,346		—			55,127
Operating (loss) income	(14,645		)	139,849			5,677		—			130,881
Other (income) loss, net	(132,261		)	(1,501		)	222		131,665			(1,875		)
Interest expense (income)	32,129			(4,532		)	1,203		—			28,800
Income from operation before taxes	85,487			145,882			4,252		(131,665		)	103,956
Income tax expense	288			17,325			1,144		—			18,757
Net income attributable to Summit LLC	$	85,199		$	128,557		$	3,108	$	(131,665	)	$	85,199
Comprehensive income attributable to member of Summit Materials, LLC	$	84,026		$	128,402		$	4,436	$	(132,838	)	$	84,026

Condensed Consolidating Statements of Operations

For the nine months ended September 28, 2019

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,603,338		$	70,321		$	(8,047	)	$	1,665,612
Cost of revenue (excluding items shown separately below)	—			1,114,401			49,122			(8,047		)	1,155,476
General and administrative expenses	37,887			146,136			8,341			—			192,364
Depreciation, depletion, amortization and accretion	2,986			156,827			4,327			—			164,140
Operating (loss) income	(40,873		)	185,974			8,531			—			153,632
Other (income) loss, net	(183,971		)	(6,427		)	(553		)	197,162			6,211
Interest expense (income)	94,848			(10,443		)	3,615			—			88,020
Income from operation before taxes	48,250			202,844			5,469			(197,162		)	59,401
Income tax expense	1,114			9,673			1,478			—			12,265
Net income attributable to Summit LLC	$	47,136		$	193,171		$	3,991		$	(197,162	)	$	47,136
Comprehensive income attributable to member of Summit Materials, LLC	$	50,251		$	193,319		$	728		$	(194,047	)	$	50,251

Condensed Consolidating Statements of Operations

For the three months ended September 29, 2018

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors			Eliminations			Consolidated
Revenue	$	—		$	668,145		$	28,064		$	(1,548	)	$	694,661
Cost of revenue (excluding items shown separately below)	—			452,394			20,957			(1,548		)	471,803
General and administrative expenses	10,951			46,910			2,856			—			60,717
Depreciation, depletion, amortization and accretion	574			52,213			1,187			—			53,974
Operating (loss) income	(11,525		)	116,628			3,064			—			108,167
Other income, net	(132,382		)	(3,019		)	(236		)	132,266			(3,371		)
Interest expense (income)	29,396			(1,882		)	1,206			—			28,720
Gain on sale of business	—			(12,108		)	—			—			(12,108		)
Income from operation before taxes	91,461			133,637			2,094			(132,266		)	94,926
Income tax expense	1,034			2,898			567			—			4,499
Net income attributable to Summit LLC	$	90,427		$	130,739		$	1,527		$	(132,266	)	$	90,427
Comprehensive income (loss) attributable to member of Summit Materials, LLC	$	92,484		$	130,652		$	(443	)	$	(130,209	)	$	92,484

Condensed Consolidating Statements of Operations

For the nine months ended September 29, 2018

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors			Eliminations			Consolidated
Revenue	$	—		$	1,548,960		$	65,597		$	(4,585	)	$	1,609,972
Cost of revenue (excluding items shown separately below)	—			1,087,150			48,031			(4,585		)	1,130,596
General and administrative expenses	45,175			141,372			8,245			—			194,792
Depreciation, depletion, amortization and accretion	1,919			145,135			3,609			—			150,663
Operating (loss) income	(47,094		)	175,303			5,712			—			133,921
Other income, net	(204,677		)	(10,563		)	(87		)	203,534			(11,793		)
Interest expense (income)	87,924			(5,447		)	3,589			—			86,066
Gain on sale of business	—			(12,108		)	—			—			(12,108		)
Income from operation before taxes	69,659			203,421			2,210			(203,534		)	71,756
Income tax expense	1,226			1,481			616			—			3,323
Net income attributable to Summit LLC	$	68,433		$	201,940		$	1,594		$	(203,534	)	$	68,433
Comprehensive income attributable to member of Summit Materials, LLC	$	66,697		$	200,497		$	4,773		$	(205,270	)	$	66,697

Condensed Consolidating Statements of Cash Flows

For the nine months ended September 28, 2019

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors			Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	(85,516	)	$	241,172		$	8,187		$	—		$	163,843
Cash flow from investing activities:
Acquisitions, net of cash acquired	—			(2,842		)	—			—			(2,842		)
Purchase of property, plant and equipment	(1,166		)	(129,170		)	(9,426		)	—			(139,762		)
Proceeds from the sale of property, plant, and equipment	—			12,950			85			—			13,035
Other	—			(207		)	—			—			(207		)
Net cash used for investing activities	(1,166		)	(119,269		)	(9,341		)	—			(129,776		)
Cash flow from financing activities:
Proceeds from investment by member	(35,581		)	38,140			—			—			2,559
Net proceeds from debt issuance	300,000			—			—			—			300,000
Loans received from and payments made on loans from other Summit Companies	147,325			(147,782		)	506			(49		)	—
Payments on long-term debt	(254,765		)	(9,965		)	(176		)	—			(264,906		)
Payments on acquisition-related liabilities	—			(8,500		)	—			—			(8,500		)
Debt issuance costs	(6,312		)	—			—			—			(6,312		)
Distributions from partnership	(2,500		)	—			—			—			(2,500		)
Other	(462		)	(39		)	—			—			(501		)
Net cash provided by (used in) financing activities	147,705			(128,146		)	330			(49		)	19,840
Impact of cash on foreign currency	—			—			174			—			174
Net increase (decrease) in cash	61,023			(6,243		)	(650		)	(49		)	54,081
Cash — Beginning of period	117,219			8,440			7,719			(4,870		)	128,508
Cash — End of period	$	178,242		$	2,197		$	7,069		$	(4,919	)	$	182,589

Condensed Consolidating Statements of Cash Flows

For the nine months ended September 29, 2018

				100%
				Owned			Non-
	Issuers			Guarantors			Guarantors			Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	(107,736	)	$	173,597		$	4,696		$	—		$	70,557
Cash flow from investing activities:
Acquisitions, net of cash acquired	—			(210,894		)	—			—			(210,894		)
Purchase of property, plant and equipment	(5,946		)	(156,016		)	(21,790		)	—			(183,752		)
Proceeds from the sale of property, plant, and equipment	—			18,257			169			—			18,426
Proceeds from the sale of a business	—			21,564			—			—			21,564
Other	—			2,660			—			—			2,660
Net cash used for investing activities	(5,946		)	(324,429		)	(21,621		)	—			(351,996		)
Cash flow from financing activities:
Proceeds from investment by member	(112,386		)	128,001			—			—			15,615
Net proceeds from debt issuance	64,500			—			—			—			64,500
Loans received from and payments made on loans from other Summit Companies	(60,387		)	58,052			6,215			(3,880		)	—
Payments on long-term debt	(69,265		)	(9,701		)	(61		)	—			(79,027		)
Payments on acquisition-related liabilities	—			(32,821		)	—			—			(32,821		)
Financing costs	(550		)	—			—			—			(550		)
Distributions from partnership	(2,569		)	—			—			—			(2,569		)
Other	(873		)	(1,007		)	(33		)	—			(1,913		)
Net cash (used in) provided by financing activities	(181,530		)	142,524			6,121			(3,880		)	(36,765		)
Impact of cash on foreign currency	—			—			(422		)	—			(422		)
Net decrease in cash	(295,212		)	(8,308		)	(11,226		)	(3,880		)	(318,626		)
Cash — Beginning of period	370,741			10,254			14,933			(12,372		)	383,556
Cash — End of period	$	75,529		$	1,946		$	3,707		$	(16,252	)	$	64,930