Leases

12 Months Ended

Jan. 02, 2021

Lessee, Lease, Description [Line Items]

Leases

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:

	2020			2019
Operating lease cost	$	10,134		$	10,451
Variable lease cost	316			423
Short-term lease cost	44,066			38,417
Financing lease cost:
Amortization of right-of-use assets	12,598			11,062
Interest on lease liabilities	3,068			3,171
Total lease cost	$	70,182		$	63,524
	2020			2019
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 liabilities	21,500			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 liabilities	31,727			40,410
Total finance lease liabilities	$	56,328		$	56,417
	2020			2019
Weighted average remaining lease term (years):
Operating leases	8.7			8.6
Finance lease	2.4			2.6
Weighted average discount rate:
Operating leases	5.3		%	5.5		%
Finance lease	5.2		%	5.5		%
Maturities of lease liabilities were as follows:
	Operating Leases			Finance Leases
2021	$	9,491		$	26,742
2022	6,088			18,603
2023	4,663			7,053
2024	2,863			3,207
2025	1,781			2,573
Thereafter	12,961			2,831
Total lease payments	37,847			61,009
Less imputed interest	(8,159)			(4,681)
Present value of lease payments	$	29,688		$	56,328

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
2022	9,880
2023	9,594
2024	9,295
2025	9,052

Leases

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:

	2020			2019
Operating lease cost	$	10,134		$	10,451
Variable lease cost	316			423
Short-term lease cost	44,066			38,417
Financing lease cost:
Amortization of right-of-use assets	12,598			11,062
Interest on lease liabilities	3,068			3,171
Total lease cost	$	70,182		$	63,524
	2020			2019
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 liabilities	21,500			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 liabilities	31,727			40,410
Total finance lease liabilities	$	56,328		$	56,417
	2020			2019
Weighted average remaining lease term (years):
Operating leases	8.7			8.6
Finance lease	2.4			2.6
Weighted average discount rate:
Operating leases	5.3		%	5.5		%
Finance lease	5.2		%	5.5		%
Maturities of lease liabilities were as follows:
	Operating Leases			Finance Leases
2021	$	9,491		$	26,742
2022	6,088			18,603
2023	4,663			7,053
2024	2,863			3,207
2025	1,781			2,573
Thereafter	12,961			2,831
Total lease payments	37,847			61,009
Less imputed interest	(8,159)			(4,681)
Present value of lease payments	$	29,688		$	56,328

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
2022	9,880
2023	9,594
2024	9,295
2025	9,052

Summit Materials, LLC

Lessee, Lease, Description [Line Items]

Leases

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:

	2020			2019
Operating lease cost	$	10,134		$	10,451
Variable lease cost	316			423
Short-term lease cost	44,066			38,417
Financing lease cost:
Amortization of right-of-use assets	12,598			11,062
Interest on lease liabilities	3,068			3,171
Total lease cost	$	70,182		$	63,524
	2020			2019
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 liabilities	21,500			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 liabilities	31,727			40,410
Total finance lease liabilities	$	56,328		$	56,417
	2020			2019
Weighted average remaining lease term (years):
Operating leases	8.7			8.6
Finance lease	2.4			2.6
Weighted average discount rate:
Operating leases	5.3		%	5.5		%
Finance lease	5.2		%	5.5		%
Maturities of lease liabilities were as follows:
	Operating Leases			Finance Leases
2021	$	9,491		$	26,742
2022	6,088			18,603
2023	4,663			7,053
2024	2,863			3,207
2025	1,781			2,573
Thereafter	12,961			2,831
Total lease payments	37,847			61,009
Less imputed interest	(8,159)			(4,681)
Present value of lease payments	$	29,688		$	56,328

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
2022	9,880
2023	9,594
2024	9,295
2025	9,052

Leases

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:

	2020			2019
Operating lease cost	$	10,134		$	10,451
Variable lease cost	316			423
Short-term lease cost	44,066			38,417
Financing lease cost:
Amortization of right-of-use assets	12,598			11,062
Interest on lease liabilities	3,068			3,171
Total lease cost	$	70,182		$	63,524
	2020			2019
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 liabilities	21,500			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 liabilities	31,727			40,410
Total finance lease liabilities	$	56,328		$	56,417
	2020			2019
Weighted average remaining lease term (years):
Operating leases	8.7			8.6
Finance lease	2.4			2.6
Weighted average discount rate:
Operating leases	5.3		%	5.5		%
Finance lease	5.2		%	5.5		%
Maturities of lease liabilities were as follows:
	Operating Leases			Finance Leases
2021	$	9,491		$	26,742
2022	6,088			18,603
2023	4,663			7,053
2024	2,863			3,207
2025	1,781			2,573
Thereafter	12,961			2,831
Total lease payments	37,847			61,009
Less imputed interest	(8,159)			(4,681)
Present value of lease payments	$	29,688		$	56,328

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
2022	9,880
2023	9,594
2024	9,295
2025	9,052