Summit Materials, Inc. - Quarter Report: 2022 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 2, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file numbers:

001-36873 (Summit Materials, Inc.)

333-187556 (Summit Materials, LLC)


SUMMIT MATERIALS, INC.
SUMMIT MATERIALS, LLC
(Exact name of registrants as specified in their charters)


Delaware (Summit Materials, Inc.)						47-1984212
Delaware (Summit Materials, LLC)						26-4138486
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
1550 Wynkoop Street, 3rd Floor						80202
Denver, Colorado						(Zip Code)
(Address of principal executive offices)

Registrants’ telephone number, including area code: (303) 893-0012

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock (par value $.01 per share)

SUM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Summit Materials, Inc.

Yes

☒

☐

Summit Materials, LLC

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Summit Materials, Inc.

Yes

☒

☐

Summit Materials, LLC

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Summit Materials, Inc.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Summit Materials, LLC

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Summit Materials, Inc.

Yes

☐

☒

Summit Materials, LLC

Yes

☐

☒

As of August 2, 2022, the number of shares of Summit Materials, Inc.’s outstanding Class A and Class B common stock, par value $0.01 per share for each class, was 118,300,041 and 99, respectively.

As of August 2, 2022, 100% of Summit Materials, LLC’s outstanding limited liability company interests were held by Summit Materials Intermediate Holdings, LLC, its sole member and an indirect subsidiary of Summit Materials, Inc.

EXPLANATORY NOTE

This quarterly report on Form 10-Q (this “report”) is a combined quarterly report being filed separately by two registrants: Summit Materials, Inc. and Summit Materials, LLC. Each registrant hereto is filing on its own behalf all of the information contained in this report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information. We believe that combining the quarterly reports on Form 10-Q of Summit Materials, Inc. and Summit Materials, LLC into this single report eliminates duplicative and potentially confusing disclosure and provides a more streamlined presentation since a substantial amount of the disclosure applies to both registrants.

Unless stated otherwise or the context requires otherwise, references to “Summit Inc.” mean Summit Materials, Inc., a Delaware corporation, and references to “Summit LLC” mean Summit Materials, LLC, a Delaware limited liability company. The references to Summit Inc. and Summit LLC are used in cases where it is important to distinguish between them. We use the terms “we,” “our,” “us” or “the Company” to refer to Summit Inc. and Summit LLC together with their respective subsidiaries, unless otherwise noted or the context otherwise requires.

Summit Inc. was formed on September 23, 2014 to be a holding company. As of July 2, 2022, its sole material asset was a 98.9% economic interest in Summit Materials Holdings L.P., a Delaware limited partnership (“Summit Holdings”). Summit Inc. has 100% of the voting rights of Summit Holdings, which is the indirect parent of Summit LLC. Summit LLC is a co-issuer of our outstanding 6 1/2 % senior notes due 2027 (“2027 Notes”) and our 5 1/4% senior notes due 2029 (“2029 Notes” and collectively with the 2027 Notes, the “Senior Notes”). Summit Inc.’s only revenue for the three and six months ended July 2, 2022 was that generated by Summit LLC and its consolidated subsidiaries. Summit Inc. controls all of the business and affairs of Summit Holdings and, in turn, Summit LLC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (the “Annual Report”), as filed with the Securities and Exchange Commission (the “SEC”), any factors discussed in the section entitled “Risk Factors” of this report and the following:

•our dependence on the construction industry and the strength of the economies in which we operate;

•the cyclical nature of our industry;

•risks related to weather and seasonality;

•risks associated with our capital-intensive business;

•competition within our local markets;

•our ability to execute on our acquisition and portfolio optimization strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses;

•our dependence on securing and permitting aggregate reserves in strategically located areas;

•the impact of the coronavirus (“COVID-19”) pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our business;

•declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies particularly if such are not augmented by federal funding or if the federal government fails to act on a highway infrastructure bill;

•our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation, recession and rising interest rates;

•environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;

•costs associated with pending and future litigation;

•rising prices for, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges, geopolitical events or otherwise;

•conditions in the credit markets;

•our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;

•material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;

•cancellation of a significant number of contracts or our disqualification from bidding for new contracts;

•special hazards related to our operations that may cause personal injury or property damage not covered by insurance;

•unexpected factors affecting self-insurance claims and reserve estimates;

•our current level of indebtedness, including our exposure to variable interest rate risk;

•our dependence on senior management team, and our ability to retain and attract other qualified personnel;

•supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt;

•climate change and climate change legislation or other regulations;

•unexpected operational difficulties;

•interruptions in our information technology systems and infrastructure, including cybersecurity and data leakage risks; and

•potential labor disputes, strikes, other forms of work stoppage or other union activities.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

Any forward-looking statement that we make herein speaks only as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

CERTAIN DEFINITIONS

As used in this report, unless otherwise noted or the context otherwise requires:

•“EBITDA” refers to net income (loss) before interest expense (income), income tax expense (benefit) and depreciation, depletion and amortization;

•“Finance Corp.” refers to Summit Materials Finance Corp., an indirect wholly-owned subsidiary of Summit LLC and the co-issuer of the Senior Notes;

•“LP Units” refers to the Class A limited partnership units of Summit Holdings; and

•“TRA” refers to a tax receivable agreement between Summit Inc. and certain current and former holders of LP Units and their permitted assignees.

Corporate Structure

The following chart summarizes our organizational structure, equity ownership and our principal indebtedness as of July 2, 2022. This chart is provided for illustrative purposes only and does not show all of our legal entities or all obligations of such entities.

(1)SEC registrant.

(2)The shares of Class B Common Stock are currently held by pre-IPO investors, including certain members of management or their family trusts that directly hold LP Units. A holder of Class B Common Stock is entitled, without regard to the number of shares of Class B Common Stock held by such holder, to a number of votes that is equal to the aggregate number of LP Units held by such holder.

(3)Guarantor under the senior secured credit facilities, but not the Senior Notes.

(4)Summit LLC and Finance Corp are the issuers of the Senior Notes and Summit LLC is the borrower under our senior secured credit facilities. Finance Corp. was formed solely for the purpose of serving as co-issuer or guarantor of certain indebtedness, including the Senior Notes. Finance Corp. does not and will not have operations of any kind and does not and will not have revenue or assets other than as may be incidental to its activities as a co-issuer or guarantor of certain indebtedness.

Table of Contents

SUMMIT MATERIALS, INC.

SUMMIT MATERIALS, LLC

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I—Financial Information

Item 1.	Financial Statements for Summit Materials, Inc.	1

	Consolidated Balance Sheets as of July 2, 2022 (unaudited) and January 1, 2022	1

	Unaudited Consolidated Statements of Operations for the three and six months ended July 2, 2022 and July 3, 2021	2

	Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended July 2, 2022 and July 3, 2021	3

	Unaudited Consolidated Statements of Cash Flows for the six months ended July 2, 2022 and July 3, 2021	4

	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended July 2, 2022 and July 3, 2021	5

	Notes to Unaudited Consolidated Financial Statements	6

	Financial Statements for Summit Materials, LLC	20

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II — Other Information

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

SIGNATURES		40

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)


	July 2, 2022		January 1, 2022
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	465,315	$	380,961
Accounts receivable, net	327,266		287,226
Costs and estimated earnings in excess of billings	37,813		7,600
Inventories	209,875		180,760
Other current assets	14,393		11,827
Current assets held for sale	1,799		1,236
Total current assets	1,056,461		869,610
Property, plant and equipment, less accumulated depreciation, depletion and amortization (July 2, 2022 - $1,219,120 and January 1, 2022 - $1,266,513)	1,785,844		1,842,908
Goodwill	1,144,282		1,163,750
Intangible assets, less accumulated amortization (July 2, 2022 - $13,824 and January 1, 2022 - $15,269)	68,375		69,396
Deferred tax assets, less valuation allowance (July 2, 2022 - $1,113 and January 1, 2022 - $1,675)	161,942		204,566
Operating lease right-of-use assets	31,407		30,150
Other assets	42,492		58,745

Total assets	$	4,290,803	$	4,239,125
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of debt	$	6,354	$	6,354
Current portion of acquisition-related liabilities	12,846		13,110
Accounts payable	167,643		128,232
Accrued expenses	133,810		147,476
Current operating lease liabilities	6,504		6,497
Billings in excess of costs and estimated earnings	5,805		7,401

Total current liabilities	332,962		309,070
Long-term debt	1,516,705		1,591,019
Acquisition-related liabilities	23,849		33,369
Tax receivable agreement liability	327,501		326,548
Noncurrent operating lease liabilities	30,186		28,880
Other noncurrent liabilities	118,798		127,027

Total liabilities	2,350,001		2,415,913
Commitments and contingencies (see note 12)
Stockholders’ equity:
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,114,612 and 118,705,108 shares issued and outstanding as of July 2, 2022 and January 1, 2022, respectively	1,182		1,188
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of July 2, 2022 and January 1, 2022	—		—
Additional paid-in capital	1,336,375		1,326,340
Accumulated earnings	587,283		478,956
Accumulated other comprehensive income	4,193		7,083
Stockholders’ equity	1,929,033		1,813,567
Noncontrolling interest in Summit Holdings	11,769		9,645
Total stockholders’ equity	1,940,802		1,823,212
Total liabilities and stockholders’ equity	$	4,290,803	$	4,239,125

See notes to unaudited consolidated financial statements.

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

(In thousands, except share and per share amounts)


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue:
Product	$	542,939	$	527,800	$	898,608	$	882,034
Service	88,979		90,730		125,805		134,977
Net revenue	631,918		618,530		1,024,413		1,017,011
Delivery and subcontract revenue	54,636		49,387		83,088		78,750
Total revenue	686,554		667,917		1,107,501		1,095,761
Cost of revenue (excluding items shown separately below):
Product	360,356		346,697		650,701		623,831
Service	69,213		71,632		103,796		111,829
Net cost of revenue	429,569		418,329		754,497		735,660
Delivery and subcontract cost	54,636		49,387		83,088		78,750
Total cost of revenue	484,205		467,716		837,585		814,410
General and administrative expenses	47,651		47,448		99,575		99,090
Depreciation, depletion, amortization and accretion	47,157		58,233		98,350		114,569
Gain on sale of property, plant and equipment	(3,695)		(1,403)		(4,950)		(3,172)
Operating income	111,236		95,923		76,941		70,864
Interest expense	20,599		24,216		40,748		48,402

Tax receivable agreement expense	954		—		954		—
(Gain) loss on sale of businesses	(156,053)		236		(170,258)		(15,432)
Other income, net	(977)		(4,695)		(1,673)		(9,584)
Income from operations before taxes	246,713		76,166		207,170		47,478
Income tax expense	53,947		18,408		49,204		12,965
Net income	192,766		57,758		157,966		34,513

Net income attributable to Summit Holdings	2,653		1,099		2,145		371
Net income attributable to Summit Inc.	$	190,113	$	56,659	$	155,821	$	34,142
Earnings per share of Class A common stock:
Basic	$	1.61	$	0.48	$	1.31	$	0.29
Diluted	$	1.60	$	0.48	$	1.31	$	0.29
Weighted average shares of Class A common stock:
Basic	118,242,880		117,637,036		118,590,173		116,650,881
Diluted	118,681,507		118,585,398		119,394,954		117,832,026

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net income	$	192,766	$	57,758	$	157,966	$	34,513
Other comprehensive income (loss):
Foreign currency translation adjustment	(5,610)		2,632		(3,866)		4,758

Less tax effect of other comprehensive income (loss) items	1,353		(553)		934		(999)
Other comprehensive (loss) income	(4,257)		2,079		(2,932)		3,759
Comprehensive income	188,509		59,837		155,034		38,272
Less comprehensive income attributable to Summit Holdings	2,592		1,150		2,103		467
Comprehensive income attributable to Summit Inc.	$	185,917	$	58,687	$	152,931	$	37,805

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(In thousands)


	Six months ended
	July 2, 2022		July 3, 2021
Cash flows from operating activities:
Net income	$	157,966	$	34,513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion	107,511		118,430
Share-based compensation expense	10,156		10,190
Net gain on asset and business disposals	(174,902)		(18,390)

Change in deferred tax asset, net	44,160		2,743
Other	(357)		92
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net	(57,797)		(60,829)
Inventories	(58,092)		(14,606)
Costs and estimated earnings in excess of billings	(36,165)		(21,475)
Other current assets	(2,130)		(3,925)
Other assets	(593)		4,927
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable	39,602		26,858
Accrued expenses	(11,108)		(4,496)
Billings in excess of costs and estimated earnings	(737)		(2,031)
Tax receivable agreement liability	954		7,132
Other liabilities	(2,214)		(4,482)
Net cash provided by operating activities	16,254		74,651
Cash flows from investing activities:
Acquisitions, net of cash acquired	(1,933)		(7,271)
Purchases of property, plant and equipment	(129,580)		(132,723)
Proceeds from the sale of property, plant and equipment	5,427		6,806
Proceeds from sale of businesses	341,741		103,649
Other	(1,098)		(27)
Net cash provided by (used in) investing activities	214,557		(29,566)
Cash flows from financing activities:


Payments on debt	(86,821)		(17,433)
Payments on acquisition-related liabilities	(11,577)		(8,378)
Distributions from partnership	(25)		—
Repurchases of common stock	(47,509)		—
Proceeds from stock option exercises	123		31,766
Other	(187)		(417)
Net cash (used in) provided by financing activities	(145,996)		5,538
Impact of foreign currency on cash	(461)		293
Net increase in cash	84,354		50,916
Cash and cash equivalents—beginning of period	380,961		418,181
Cash and cash equivalents—end of period	$	465,315	$	469,097

See notes to unaudited consolidated financial statements.

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share amounts)


	Summit Materials, Inc.
			Accumulated
			Other		Class A			Class B			Additional		Noncontrolling		Total
	Accumulated		Comprehensive		Common Stock			Common Stock			Paid-in		Interest in		Stockholders’
	Earnings		income		Shares	Dollars		Shares	Dollars		Capital		Summit Holdings		Equity
Balance - January 1, 2022	$	478,956	$	7,083	118,705,108	$	1,188	99	$	—	$	1,326,340	$	9,645	$	1,823,212







Net loss	(34,292)		—		—	—		—	—		—		(508)		(34,800)

Other comprehensive income, net of tax	—		1,306		—	—		—	—		—		19		1,325
Stock option exercises	—		—		1,589	—		—	—		27		—		27
Share-based compensation	—		—		—	—		—	—		5,422		—		5,422
Repurchases of common stock	(47,494)		—		(1,506,878)	(15)		—	—		(121)		121		(47,509)
Shares redeemed to settle taxes and other	—		—		842,029	8		—	—		(1,120)		(68)		(1,180)
Balance — April 2, 2022	$	397,170	$	8,389	118,041,848	$	1,181	99	$	—	$	1,330,548	$	9,209	$	1,746,497







Net income	190,113		—		—	—		—	—		—		2,653		192,766

Other comprehensive loss, net of tax	—		(4,196)		—	—		—	—		—		(61)		(4,257)
Stock option exercises	—		—		4,929	—		—	—		96		—		96
Share-based compensation	—		—		—	—		—	—		4,734		—		4,734

Distributions from partnership	—		—		—	—		—	—		—		(25)		(25)
Shares redeemed to settle taxes and other	—		—		67,835	1		—	—		997		(7)		991
Balance - July 2, 2022	$	587,283	$	4,193	118,114,612	$	1,182	99	$	—	$	1,336,375	$	11,769	$	1,940,802


Balance — January 2, 2021	$	326,772	$	5,203	114,390,595	$	1,145	99	$	—	$	1,264,681	$	18,467	$	1,616,268
Net loss	(22,517)		—		—	—		—	—		—		(728)		(23,245)
LP Unit exchanges	—		—		711,794	7		—	—		4,744		(4,751)		—
Other comprehensive income, net of tax	—		1,635		—	—		—	—		—		45		1,680
Stock option exercises	—		—		863,338	9		—	—		15,911		—		15,920
Share-based compensation	—		—		—	—		—	—		5,363		—		5,363

Shares redeemed to settle taxes and other	—		—		678,605	6		—	—		(1,432)		—		(1,426)
Balance — April 3, 2021	$	304,255	$	6,838	116,644,332	$	1,167	99	$	—	$	1,289,267	$	13,033	$	1,614,560
Net income	56,659		—		—	—		—	—		—		1,099		57,758
LP Unit exchanges	—		—		445,540	4		—	—		3,631		(3,635)		—
Other comprehensive income, net of tax	—		2,028		—	—		—	—		—		51		2,079
Stock option exercises	—		—		847,480	8		—	—		15,837		—		15,845
Share-based compensation	—		—		—	—		—	—		4,827		—		4,827

Shares redeemed to settle taxes and other	—		—		18,536	1		—	—		(148)		—		(147)
Balance — July 3, 2021	$	360,914	$	8,866	117,955,888	$	1,180	99	$	—	$	1,313,414	$	10,548	$	1,694,922

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, except per share amounts or otherwise noted)

1.SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Summit Materials, Inc. (“Summit Inc.” 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 Inc. is a holding corporation operating and controlling all of the business and affairs of Summit Materials Holdings L.P. (“Summit Holdings”) and its subsidiaries, and through Summit Holdings conducts its business. Summit Inc. owns the majority of the partnership interests of Summit Holdings (see Note 9, Stockholders’ Equity). Summit Materials, LLC (“Summit LLC”), an indirect wholly owned subsidiary of Summit Holdings, conducts the majority of our operations. Summit Materials Finance Corp. (“Summit Finance”), an indirect wholly owned subsidiary of Summit LLC, has jointly issued our Senior Notes as described below.

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 July 2, 2022, the results of operations for the three and six months ended July 2, 2022 and July 3, 2021 and cash flows for the six months ended July 2, 2022 and July 3, 2021.

Principles of Consolidation—The consolidated financial statements include the accounts of Summit Inc. and its majority owned subsidiaries. All intercompany balances and transactions have been eliminated.

For a summary of the changes in Summit Inc.’s ownership of Summit Holdings, see Note 9, Stockholders’ Equity.

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, tax receivable agreement ("TRA") liability, 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.

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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 and six months ended July 2, 2022 or July 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.

Earnings per Share—The Company computes basic earnings per share attributable to stockholders by dividing income attributable to Summit Inc. by the weighted-average shares of Class A common stock outstanding. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in the Company’s earnings. Since the Class B common stock has no economic value, those shares are not included in the weighted-average common share amount for basic or diluted earnings per share. In addition, as the shares of Class A common stock are issued by Summit Inc., the earnings and equity interests of noncontrolling interests are not included in basic earnings per share.

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.

The following table summarizes the Company’s acquisitions by region and period:


	Six months ended	Year ended
	July 2, 2022	January 1, 2022
West	—	—
East	1	3

The purchase price allocation, primarily the valuation of property, plant and equipment for the acquisitions completed during the six months ended July 2, 2022, as well as the acquisitions completed during 2021 that occurred after July 3,

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2021, have not yet been finalized due to the recent timing of the acquisitions, status of the valuation of property, plant and equipment and finalization of related tax returns. The following table summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates:


	Six months ended		Year ended
	July 2, 2022		January 1, 2022
Financial assets	$	—	$	—
Inventories	16		2,406
Property, plant and equipment	1,688		19,668
Intangible assets	—		702
Other assets	272		98
Financial liabilities	—		(1,742)
Other long-term liabilities	(43)		(470)
Net assets acquired	1,933		20,662
Goodwill	—		—
Purchase price	1,933		20,662
Acquisition-related liabilities	—		(1,149)
Other	—		—
Net cash paid for acquisitions	$	1,933	$	19,513

Changes in the carrying amount of goodwill, by reportable segment, from January 1, 2022 to July 2, 2022 are summarized as follows:


	West		East		Cement		Total
Balance—January 1, 2022	$	570,509	$	388,585	$	204,656	$	1,163,750
Dispositions (1)	—		(18,095)		—		(18,095)
Foreign currency translation adjustments	(1,373)		—		—		(1,373)

Balance—July 2, 2022	$	569,136	$	370,490	$	204,656	$	1,144,282

_______________________________________________________________________

(1) Reflects goodwill derecognition from dispositions completed during the six months ended July 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:


	July 2, 2022						January 1, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Operating permits	$	36,036	$	(3,361)	$	32,675	$	33,671	$	(2,467)	$	31,204
Mineral leases	15,463		(6,317)		9,146		19,927		(8,922)		11,005
Reserve rights	25,586		(3,741)		21,845		25,586		(3,329)		22,257

Other	5,114		(405)		4,709		5,481		(551)		4,930
Total intangible assets	$	82,199	$	(13,824)	$	68,375	$	84,665	$	(15,269)	$	69,396

Amortization expense totaled $0.8 million and $1.8 million for the three and six months ended July 2, 2022, respectively, and $0.9 million and $1.8 million for the three and six months ended July 3, 2021, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to July 2, 2022 is as follows:

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2022 (six months)	$	1,924
2023	3,856
2024	3,829
2025	3,785
2026	3,736
2027	3,724
Thereafter	47,521
Total	$	68,375

In the six months ended July 2, 2022, as part of the Company's strategy to rationalize assets, the Company sold two business in the East segment, resulting in cash proceeds of $341.7 million and a total gain on disposition of $170.3 million.

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 and six months ended July 2, 2022 and July 3, 2021 is as follows:


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue by product*:
Aggregates	$	161,480	$	153,496	$	284,873	$	270,884
Cement	86,815		82,169		129,369		120,308
Ready-mix concrete	183,357		183,861		340,920		342,094
Asphalt	94,141		93,935		111,279		122,310
Paving and related services	98,610		102,080		129,220		145,295
Other	62,151		52,376		111,840		94,870
Total revenue	$	686,554	$	667,917	$	1,107,501	$	1,095,761

*Revenue from liquid asphalt terminals is included in asphalt revenue.

Accounts receivable, net consisted of the following as of July 2, 2022 and January 1, 2022:


	July 2, 2022		January 1, 2022
Trade accounts receivable	$	273,995	$	230,714
Construction contract receivables	46,179		47,054
Retention receivables	11,216		13,094
Receivables from related parties	—		292
Accounts receivable	331,390		291,154
Less: Allowance for doubtful accounts	(4,124)		(3,928)
Accounts receivable, net	$	327,266	$	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 July 2, 2022 and January 1, 2022:

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	July 2, 2022		January 1, 2022
Aggregate stockpiles	$	139,040	$	130,640
Finished goods	40,833		22,690
Work in process	9,252		8,277
Raw materials	20,750		19,153
Total	$	209,875	$	180,760

5.ACCRUED EXPENSES

Accrued expenses consisted of the following as of July 2, 2022 and January 1, 2022:


	July 2, 2022		January 1, 2022
Interest	$	23,163	$	22,762
Payroll and benefits	31,592		38,894
Finance lease obligations	10,918		17,624
Insurance	21,368		20,480
Non-income taxes	21,344		19,409
Deferred asset purchase payments	3,856		4,912
Professional fees	687		1,524
Other (1)	20,882		21,871
Total	$	133,810	$	147,476

(1)Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.

6.DEBT

Debt consisted of the following as of July 2, 2022 and January 1, 2022:


	July 2, 2022		January 1, 2022
Term Loan, due 2024:
$534.4 million and $610.0 million, net of $0.5 million and $0.7 million discount at July 2, 2022 and January 1, 2022, respectively	$	533,859	$	609,298
61⁄2% Senior Notes, due 2027	300,000		300,000
51⁄4% Senior Notes, due 2029	700,000		700,000
Total	1,533,859		1,609,298
Current portion of long-term debt	6,354		6,354
Long-term debt	$	1,527,505	$	1,602,944

The contractual payments of long-term debt, including current maturities, for the five years subsequent to July 2, 2022, are as follows:


2022 (six months)	$	3,177
2023	6,354
2024	524,876
2025	—
2026	—
2027	300,000
Thereafter	700,000
Total	1,534,407
Less: Original issue net discount	(548)
Less: Capitalized loan costs	(10,800)
Total debt	$	1,523,059

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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 July 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 interest rate on the term loan is a variable rate, it was 3.67% as of July 2, 2022. During the second quarter of 2022, the Company repaid $72.4 million of its term loan under provisions related to divestitures of businesses. Should the Company consummate additional divestitures during the remainder of the year, additional prepayments of the term loan may be required. 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 July 2, 2022 and January 1, 2022, with borrowing capacity of $324.6 million remaining as of July 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 July 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.

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The following table presents the activity for the deferred financing fees for the six months ended July 2, 2022 and July 3, 2021:


	Deferred financing fees
Balance—January 1, 2022	$	13,049

Amortization	(1,384)

Balance—July 2, 2022	$	11,665


Balance—January 2, 2021	$	18,367

Amortization	(1,673)

Balance—July 3, 2021	$	16,694

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 July 2, 2022 or January 1, 2022, which may be terminated upon demand.

7.INCOME TAXES

Summit Inc.’s tax provision includes its proportional share of Summit Holdings’ tax attributes. Summit Holdings’ subsidiaries are primarily limited liability companies but do include certain entities organized as C corporations and a Canadian subsidiary. The tax attributes related to the limited liability companies are passed on to Summit Holdings and then to its partners, including Summit Inc. The tax attributes associated with the C corporation and Canadian subsidiaries are fully reflected in the Company’s accounts.

Our income tax expense was $53.9 million and $49.2 million in the three and six months ended July 2, 2022, respectively, and our income tax expense was $18.4 million and $13.0 million in the three and six months ended July 3, 2021, respectively. The effective tax rate for Summit Inc. differs from the federal statutory tax rate primarily due to (1) state taxes, (2) tax depletion expense in excess of the expense recorded under U.S. GAAP, (3) basis differences in assets divested, (4) the minority interest in the Summit Holdings partnership that is allocated outside of the Company and (5) various other items such as limitations on meals and entertainment, certain stock compensation and other costs.

As of July 2, 2022 and January 1, 2022, Summit Inc. had a valuation allowance of $1.1 million and $1.7 million, respectively, which relates to certain deferred tax assets in taxable entities where realization is not more likely than not.

No material interest or penalties were recognized in income tax expense during the three and six months ended July 2, 2022 and July 3, 2021.

Tax Receivable Agreement—The Company is party to a TRA with certain current and former holders of LP Units that provides for the payment by Summit Inc. to exchanging holders of LP Units of 85% of the benefits, if any, that Summit Inc. actually realizes (or, under certain circumstances such as an early termination of the TRA, is deemed to realize) as a result of increases in the tax basis of tangible and intangible assets of Summit Holdings and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA.

In the six months ended July 2, 2022, there were no LP Units acquired by Summit Inc. in exchange for an equal number of newly-issued shares of Summit Inc.’s Class A common stock. As of July 2, 2022 and January 1, 2022, we had recorded $327.5 million and $326.5 million of TRA liability, respectively.

Tax Distributions – The holders of Summit Holdings’ LP Units, including Summit Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Summit Holdings. The limited partnership agreement of Summit Holdings provides for pro rata cash distributions (“tax distributions”) to the holders of the LP Units in an amount generally calculated to provide each holder of LP Units with sufficient cash to cover its tax liability in respect of the LP Units. In general, these tax distributions are computed based on Summit Holdings’ estimated taxable income allocated to Summit Inc. multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income

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tax rate in New York, New York. Summit Holdings did not make any tax distributions in the six months ended July 2, 2022 and July 3, 2021.

8.EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings by the weighted average common shares outstanding and diluted net earnings is computed by dividing net earnings, adjusted for changes in the earnings allocated to Summit Inc. as a result of the assumed conversion of LP Units, by the weighted-average common shares outstanding assuming dilution.

The following table shows the calculation of basic and diluted earnings per share:


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Net income attributable to Summit Inc.	$	190,113	$	56,659	$	155,821	$	34,142

Weighted average shares of Class A stock outstanding	118,099,059		117,436,461		118,438,200		116,423,833
Add: Nonvested restricted stock awards of retirement eligible shares	143,821		200,575		151,973		227,048
Weighted average shares outstanding	118,242,880		117,637,036		118,590,173		116,650,881
Basic earnings per share	$	1.61	$	0.48	$	1.31	$	0.29

Diluted net income attributable to Summit Inc.	$	190,113	$	56,659	$	155,821	$	34,142

Weighted average shares outstanding	118,242,880		117,436,461		118,590,173		116,423,833

Add: stock options	76,161		270,392		101,094		379,129
Add: warrants	10,413		15,270		12,844		18,539
Add: restricted stock units	257,454		681,927		533,242		838,672
Add: performance stock units	94,599		181,348		157,601		171,853
Weighted average dilutive shares outstanding	118,681,507		118,585,398		119,394,954		117,832,026
Diluted earnings per share	$	1.60	$	0.48	$	1.31	$	0.29

Excluded from the above calculations were the shares noted below as they were antidilutive:

Three months ended

Six months ended

July 2, 2022

July 3, 2021

July 2, 2022

July 3, 2021

Antidilutive shares:

LP Units

1,314,006

1,885,789

1,314,006

2,249,499

9.STOCKHOLDERS’ EQUITY

During 2021, certain limited partners of Summit Holdings exchanged their LP Units for shares of Class A common stock of Summit Inc.

In March 2022, our Board of Directors authorized a share repurchase program, whereby we can repurchase up to $250 million of our Class A common stock. During the six months ended July 2, 2022, we repurchased 1.5 million shares of Class A common stock for $47.5 million. These shares were retired upon purchase.

The following table summarizes the changes in our ownership of Summit Holdings:

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	Summit Inc. Shares (Class A)	LP Units	Total	Summit Inc. Ownership Percentage
Balance — January 1, 2022	118,705,108	1,314,006	120,019,114	98.9	%

Stock option exercises	6,518	—	6,518
Repurchases of common stock	(1,506,878)	—	(1,506,878)
Other equity transactions	909,864	—	909,864
Balance — July 2, 2022	118,114,612	1,314,006	119,428,618	98.9	%


Balance — January 2, 2021	114,390,595	2,873,170	117,263,765	97.5	%
Exchanges during period	1,157,334	(1,157,334)	—
Stock option exercises	1,710,818	—	1,710,818
Other equity transactions	697,141	—	697,141
Balance — July 3, 2021	117,955,888	1,715,836	119,671,724	98.6	%

Summit Inc. is Summit Holdings’ primary beneficiary and thus consolidates Summit Holdings in its consolidated financial statements with a corresponding noncontrolling interest reclassification, which was 1.1% and 1.1% as of July 2, 2022 and January 1, 2022, respectively.

Accumulated other comprehensive income (loss) —The changes in each component of accumulated other comprehensive income (loss) consisted of the following:


	Change in retirement plans		Foreign currency translation adjustments		Accumulated other comprehensive income (loss)
Balance — January 1, 2022	$	1,508	$	5,575	$	7,083


Foreign currency translation adjustment, net of tax	—		(2,890)		(2,890)

Balance — July 2, 2022	$	1,508	$	2,685	$	4,193


Balance — January 2, 2021	$	533	$	4,670	$	5,203

Foreign currency translation adjustment, net of tax	—		3,663		3,663

Balance — July 3, 2021	$	533	$	8,333	$	8,866

10.SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:


	Six months ended
	July 2, 2022		July 3, 2021
Cash payments:
Interest	$	36,115	$	41,023
Payments for income taxes, net	8,503		5,579
Operating cash payments on operating leases	4,652		2,482
Operating cash payments on finance leases	646		563
Finance cash payments on finance leases	11,297		4,219
Non cash financing activities:
Right of use assets obtained in exchange for operating lease obligations	$	9,312	$	2,348
Right of use assets obtained in exchange for finance leases obligations	258		—
Exchange of LP Units to shares of Class A common stock	—		33,981

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11.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:

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	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022			July 3, 2021
Operating lease cost	$	2,271	$	1,693	$	4,783		$	3,420
Variable lease cost	42		101		155			173
Short-term lease cost	10,933		10,843		19,181			18,144
Financing lease cost:
Amortization of right-of-use assets	1,377		2,617		3,363			5,667
Interest on lease liabilities	271		557		640			1,214
Total lease cost	$	14,894	$	15,811	$	28,122		$	28,618

					July 2, 2022			January 1, 2022
Supplemental balance sheet information related to leases:
Operating leases:
Operating lease right-of-use assets					$	31,407		$	30,150

Current operating lease liabilities					$	6,504		$	6,497
Noncurrent operating lease liabilities					30,186			28,880
Total operating lease liabilities					$	36,690		$	35,377
Finance leases:
Property and equipment, gross					$	53,760		$	68,982
Less accumulated depreciation					(28,355)			(31,404)
Property and equipment, net					$	25,405		$	37,578

Current finance lease liabilities					$	10,918		$	17,624
Long-term finance lease liabilities					9,127			14,982
Total finance lease liabilities					$	20,045		$	32,606

Weighted average remaining lease term (years):
Operating leases					9.8			9.7
Finance lease					2.7			2.3

Weighted average discount rate:
Operating leases					4.3		%	4.4		%
Finance leases					5.1		%	5.2		%

Maturities of lease liabilities, as of July 2, 2022, were as follows:
					Operating Leases			Finance Leases
2022 (six months)					$	3,985		$	6,219
2023					7,106			7,493
2024					5,922			2,936
2025					4,194			2,415
2026					3,309			980
2027					2,615			750
Thereafter					18,711			1,083
Total lease payments					45,842			21,876
Less imputed interest					(9,152)			(1,831)
Present value of lease payments					$	36,690		$	20,045

12.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

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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 July 2, 2022 and January 1, 2022, $36.7 million and $37.7 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and $4.7 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 July 2, 2022 and January 1, 2022 were $110.7 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.

13.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 July 2, 2022 and January 1, 2022 was:


	July 2, 2022		January 1, 2022
Current portion of acquisition-related liabilities and Accrued expenses:
Contingent consideration	$	133	$	129
Acquisition-related liabilities and Other noncurrent liabilities:
Contingent consideration	$	1,162	$	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 July 2, 2022 and July 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 July 2, 2022 and January 1, 2022 was:

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	July 2, 2022				January 1, 2022
	Fair Value		Carrying Value		Fair Value		Carrying Value
Level 1
Long-term debt(1)	$	1,431,985	$	1,533,859	$	1,653,085	$	1,609,298
Level 3
Current portion of deferred consideration and noncompete obligations(2)	12,713		12,713		12,981		12,981
Long term portion of deferred consideration and noncompete obligations(3)	22,687		22,687		32,130		32,130

(1)$6.4 million was included in current portion of debt as of July 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.

14.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 July 2, 2022 and January 1, 2022 and for the three and six months ended July 2, 2022 and July 3, 2021:


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue*:
West	$	383,750	$	337,968	$	635,982	$	589,101
East	209,153		244,127		331,643		380,169
Cement	93,651		85,822		139,876		126,491
Total revenue	$	686,554	$	667,917	$	1,107,501	$	1,095,761

*Intercompany sales are immaterial and the presentation above only reflects sales to external customers.

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	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Income from operations before taxes	$	246,713	$	76,166	$	207,170	$	47,478
Interest expense	20,599		24,216		40,748		48,402
Depreciation, depletion and amortization	46,455		57,523		96,934		113,093
Accretion	702		710		1,416		1,476

Tax receivable agreement expense	954		—		954		—
(Gain) loss on sale of businesses	(156,053)		236		(170,258)		(15,432)
Non-cash compensation	4,734		4,827		10,156		10,190
Other	(70)		114		177		319
Total Adjusted EBITDA	$	164,034	$	163,792	$	187,297	$	205,526

Total Adjusted EBITDA by Segment:
West	$	84,644	$	78,771	$	117,336	$	119,419
East	46,694		57,284		54,830		69,029
Cement	43,241		39,422		37,422		41,921
Corporate and other	(10,545)		(11,685)		(22,291)		(24,843)
Total Adjusted EBITDA	$	164,034	$	163,792	$	187,297	$	205,526


	Six months ended
	July 2, 2022		July 3, 2021
Purchases of property, plant and equipment
West	$	58,137	$	66,545
East	45,910		55,991
Cement	19,875		9,762
Total reportable segments	123,922		132,298
Corporate and other	5,658		425
Total purchases of property, plant and equipment	$	129,580	$	132,723


	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Depreciation, depletion, amortization and accretion:
West	$	22,012	$	25,351	$	46,587	$	50,491
East	14,915		21,554		33,210		43,497
Cement	9,460		10,227		17,034		18,376
Total reportable segments	46,387		57,132		96,831		112,364
Corporate and other	770		1,101		1,519		2,205
Total depreciation, depletion, amortization and accretion	$	47,157	$	58,233	$	98,350	$	114,569


	July 2, 2022		January 1, 2022
Total assets:
West	$	1,607,636	$	1,512,298
East	1,163,937		1,292,638
Cement	887,916		844,086
Total reportable segments	3,659,489		3,649,022
Corporate and other	631,314		590,103
Total	$	4,290,803	$	4,239,125

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SUMMIT MATERIALS, LLC AND SUBSIDIARIES

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited consolidated financial statements and notes thereto for Summit Materials, LLC and subsidiaries are included as Exhibit 99.1 to this Quarterly Report on Form 10-Q and are incorporated by reference herein.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Historical results may not be indicative of future performance. Forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the section entitled “Risk Factors” in the Annual Report, and factors discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated interim financial statements and the related notes and other information included in this report.

Overview

Summit’s vision is to be the most socially responsible, integrated construction materials solution provider, collaborating with stakeholders to deliver differentiated innovations and solve our customers’ challenges. Within our markets, we strive to be a market leader by offering customers a single-source provider for construction materials and related downstream products through our vertical integration. Our materials include aggregates, which we supply across the United States, and in British Columbia, Canada, and cement, which we supply to surrounding states along the Mississippi River from Minnesota to Louisiana. In addition to supplying aggregates to customers, we use a portion of our materials internally to produce ready-mix concrete and asphalt paving mix, which may be sold externally or used in our paving and related services businesses. Our vertical integration creates opportunities to increase aggregates volumes, optimize margin at each stage of production and provide customers with efficiency gains, convenience and reliability, which we believe gives us a competitive advantage.

We are organized into 10 operating companies that make up our three distinct operating segments: West, East and Cement, which are also our reporting segments. We operate in 21 U.S. states and in British Columbia, Canada and currently have assets in 20 U.S. states and in British Columbia, Canada. The map below illustrates our geographic footprint.

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Business Trends and Conditions

The U.S. construction materials industry is composed of four primary sectors: aggregates; cement; ready-mix concrete; and asphalt paving mix. Each of these materials is widely used in most forms of construction activity. Participants in these sectors typically range from small, privately-held companies focused on a single material, product or market to publicly traded multinational corporations that offer a wide array of construction materials and services. Competition is constrained in part by the distance materials can be transported efficiently, resulting in predominantly local or regional operations. Due to the lack of product differentiation, competition for all of our products is predominantly based on price and, to a lesser extent, quality of products and service. As a result, the prices we charge our customers are not likely to be materially different from the prices charged by other producers in the same markets. Accordingly, our profitability is generally dependent on the level of demand for our materials and products and our ability to control operating costs. We continue to monitor supply chain issues, as well as inflationary pressures on our raw material inputs as well as labor costs.

Our revenue is derived from multiple end-use markets including public infrastructure construction and private residential and nonresidential construction. Public infrastructure includes spending by federal, state, provincial and local governments for roads, highways, bridges, airports and other infrastructure projects. Public infrastructure projects have historically been a relatively stable portion of state and federal budgets. Residential and nonresidential construction consists of new construction and repair and remodel markets. Any economic stagnation or decline, which could vary by local region and market, could affect our results of operations. Our sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical changes in construction spending, especially in the private sector. From a macroeconomic view, we continue to see positive indicators for highway obligations. While rising interest rates and inflation have not yet

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impacted housing starts in our major markets, we are monitoring that activity closely. Rising interest rates and inflation may also impact our non-residential construction activity in the future.

Transportation infrastructure projects, driven by both federal and state funding programs, represent a significant share of the U.S. construction materials market. Federal funds are allocated to the states, which are required to match a portion of the federal funds they receive. Federal highway spending uses funds predominantly from the Federal Highway Trust Fund, which derives its revenue from taxes on diesel fuel, gasoline and other user fees. The dependability of federal funding allows state departments of transportation to plan for their long-term highway construction and maintenance needs. The Infrastructure Investment and Jobs Act ("IIJA") was signed into law on November 15, 2021. The IIJA provides $1.2 trillion in funding over five years from 2022 through 2026, including $550 billion in new investments for all modes of transportation, water, power and energy, environment remediation, public lands, broadband and resilience.

In 2021, approximately 64% of our revenue was derived from the private construction market, and the remaining revenue from the public markets. We believe residential activity in our key markets will continue to be a driver for volumes in future periods. Funding for public infrastructure projects is expected to remain a high priority.

In addition to federal funding, state, county and local agencies provide highway construction and maintenance funding. Our four largest states by revenue, Texas, Utah, Kansas and Missouri, represented approximately 23%, 15%, 12% and 9%, respectively, of our total revenue in 2021. The following is a summary of key funding initiatives in those states:

•The Texas Department of Transportation (“TXDOT”) updated its fiscal year 2022 lettings estimate to $10.8 billion up from $8.4 billion in fiscal year 2021 and $7.5 billion in fiscal year 2020. Longer term, TXDOT has indicated a target of $8 billion per year in total state and local lettings.

•The state of Utah anticipates transportation funding of approximately $2.7 billion in fiscal year 2023.

•The state of Kansas anticipates approximately $2.1 billion for fiscal year 2023 for transportation funding.

•The state of Missouri anticipates transportation funding of approximately $3.5 billion in fiscal year 2023.

Use and consumption of our products fluctuate due to seasonality. Nearly all of the products used by us, and by our customers, in the private construction and public infrastructure industries are used outdoors. Our highway operations and production and distribution facilities are also located outdoors. Therefore, seasonal changes and other weather-related conditions, in particular extended rainy and cold weather in the spring and fall, as well as major weather events such as hurricanes, tornadoes, tropical storms, heavy snows and flooding, can adversely affect our business and operations through a decline in both the use of our products and demand for our services. In addition, construction materials production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. Warmer and drier weather during the second and third quarters of our fiscal year typically result in higher activity and revenue levels during those quarters. The first quarter of our fiscal year typically has lower levels of activity due to weather conditions, and the third quarter of our fiscal year typically has the highest levels of activity.

We are subject to commodity price risk with respect to price changes in liquid asphalt and energy, including fossil fuels and electricity for aggregates, cement, ready-mix concrete and asphalt paving mix production, natural gas for hot mix asphalt production and diesel fuel for distribution vehicles and production related mobile equipment. Liquid asphalt escalator provisions in most of our private and commercial contracts limit our exposure to price fluctuations in this commodity. We often obtain similar escalators on public infrastructure contracts. In addition, we enter into various firm purchase commitments, with terms generally less than one year, for certain raw materials, including diesel fuel.

Backlog

Our products are generally delivered upon receipt of orders or requests from customers, or shortly thereafter. Accordingly, the backlog associated with product sales is converted into revenue within a relatively short period of time. Inventory for products is generally maintained in sufficient quantities to meet rapid delivery requirements of customers. Therefore, a period-over-period increase or decrease of backlog does not necessarily result in an improvement or a deterioration of our business. Our backlog includes only those products and projects for which we have obtained a purchase order or a signed contract with the customer and does not include products purchased and sold or services awarded and provided within the period.

Financial Highlights

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The principal factors in evaluating our financial condition and operating results as of and for the three and six months ended July 2, 2022 as compared to the three and six months ended July 3, 2021, and certain other highlights include:

•Net revenue increased $13.4 million and $7.4 million in the three and six months ended July 2, 2022, respectively, primarily resulting from increases in average sales prices more than offsetting decreases due to divestitures completed in 2022 and 2021.

•Our operating income increased $15.3 million and $6.1 million in the three and six months ended July 2, 2022, respectively, as our increases in average sales prices exceeded inflationary impacts on our expenses, mitigated by a $11.1 million and $16.2 million decrease, respectively, in depreciation, depletion, amortization and accretion expenses resulting from our divestitures.

•In the three and six months ended July 2, 2022, average sales price increased 4.7% and 4.7% in aggregates, 7.5% and 8.3% in cement, 9.7% and 8.6% in ready-mix concrete and 18.9% and 17.4% in asphalt, respectively.

•In the three and six months ended July 2, 2022, sales volume decreased 1.6% and 1.2% in aggregates, 0.4% and 0.2% in cement, 9.1% and 8.3% in ready-mix concrete and 15.2% and 22.1% in asphalt, respectively.

•In the six months ended July 2, 2022, the Company sold two businesses in the East segment, resulting in cash proceeds of $341.7 million and a total gain on disposition of $170.3 million. We used $72.4 million of proceeds to pay down our term loan during the three months ended July 2, 2022.

•In March 2022, the Company repurchased $47.5 million of our Class A common stock.

Results of Operations

The following discussion of our results of operations is focused on the key financial measures we use to evaluate the performance of our business from both a consolidated and operating segment perspective. Operating income and margins are discussed in terms of changes in volume, pricing and mix of revenue source (i.e., type of product, sales or service revenue). We focus on operating margin, which we define as operating income as a percentage of net revenue, as a key metric when assessing the performance of the business, as we believe that analyzing changes in costs in relation to changes in revenue provides more meaningful insight into the results of operations than examining costs in isolation.

Operating income reflects our profit from operations after taking into consideration cost of revenue, general and administrative expenses, depreciation, depletion, amortization and accretion and gain on sale of property, plant and equipment. Cost of revenue generally increases ratably with revenue, as labor, transportation costs and subcontractor costs are recorded in cost of revenue. As organic volumes increase, we expect our general and administrative costs as a percentage of revenue to decrease. General and administrative expenses as a percentage of revenue vary throughout the year due to the seasonality of our business.

Consolidated Results of Operations

The table below sets forth our consolidated results of operations for the three and six months ended July 2, 2022 and July 3, 2021.

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	Three months ended				Six months ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
($ in thousands)
Net revenue	$	631,918	$	618,530	$	1,024,413	$	1,017,011
Delivery and subcontract revenue	54,636		49,387		83,088		78,750
Total revenue	686,554		667,917		1,107,501		1,095,761
Cost of revenue (excluding items shown separately below)	484,205		467,716		837,585		814,410
General and administrative expenses	47,651		47,448		99,575		99,090
Depreciation, depletion, amortization and accretion	47,157		58,233		98,350		114,569
Gain on sale of property, plant and equipment	(3,695)		(1,403)		(4,950)		(3,172)
Operating income	111,236		95,923		76,941		70,864
Interest expense	20,599		24,216		40,748		48,402

Tax receivable agreement expense	954		—		954		—
(Gain) loss on sale of businesses	(156,053)		236		(170,258)		(15,432)
Other income, net	(977)		(4,695)		(1,673)		(9,584)
Income from operations before taxes	246,713		76,166		207,170		47,478
Income tax expense	53,947		18,408		49,204		12,965
Net income	$	192,766	$	57,758	$	157,966	$	34,513

Three and six months ended July 2, 2022 compared to the three and six months ended July 3, 2021


	Three months ended										Six months ended
($ in thousands)	July 2, 2022			July 3, 2021			Variance				July 2, 2022			July 3, 2021			Variance
Net revenue	$	631,918		$	618,530		$	13,388	2.2	%	$	1,024,413		$	1,017,011		$	7,402	0.7	%
Operating income	111,236			95,923			15,313		16.0	%	76,941			70,864			6,077		8.6	%
Operating margin percentage	17.6		%	15.5		%					7.5		%	7.0		%
Adjusted EBITDA (1)	$	164,034		$	163,792		$	242	0.1	%	$	187,297		$	205,526		$	(18,229)	(8.9)	%
Adjusted EBITDA Margin (1)	26.0		%	26.5		%					18.3		%	20.2		%

(1)Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures that we find helpful in monitoring the performance of our business. See "Non-GAAP Performance Measures" below for a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable GAAP measure.

Net revenue increased $13.4 million in the three months ended July 2, 2022, due to increases in our average sales price and as well as organic revenue increases in the West and Cement segments, more than offsetting decreases due to divestitures in the East segment. Of the increase in net revenue, $12.6 million was from increased sales of materials and $2.5 million was from increased sales of products, partially offset by $1.8 million from decreased service revenue. We experienced organic volume decline of 2.3%, 0.4%, 9.1% and 15.2% in our aggregates, cement, ready-mix concrete and asphalt lines of business, respectively. The decline in organic asphalt volumes was primarily due to a divestiture of a paving business in our West segment which occurred in the second quarter of 2021. We achieved organic price growth across all lines of business during the second quarter of 2022. Additional detail about the impact of acquisitions and divestitures on each segment is presented below where material.

Net revenue increased $7.4 million in the six months ended July 2, 2022, primarily resulting from organic price increases across all lines of business, partially offset by organic volume decline in our ready-mix concrete and asphalt operations due to our divestiture program. Of the increase in net revenue, $23.1 million was from increased sales of materials, partially offset by $6.5 million from decreased sales of products and $9.2 million from decreased service revenue. Our organic volumes declined 2.1%, 0.2%, 8.3% and 22.1% in aggregates, cement, ready-mix concrete and asphalt, respectively. The organic volume decreases for ready-mix and asphalt were primarily attributable to our divestiture program. We had organic price growth in our aggregate, cement, ready-mix and asphalt lines of business of 4.8%, 8.3%, 8.6% and 17.4%, respectively, during the first six months of 2022.

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Operating income increased by $15.3 million in the second quarter of 2022 as compared to the second quarter of 2021, primarily as our net revenue gains and decreases in depletion, amortization and accretion expenses outpaced increases in our cost of revenue. Our depreciation, depletion, amortization and accretion expense decreased by $11.1 million over the prior year amount primarily due to divestitures.

Operating income increased by $6.1 million in the first six months of 2022 as compared to the first six months of 2021, primarily due to increases in average sales prices that exceeded increases in our cost structure. Additionally, we had a decrease of $16.2 million in depreciation, depletion, amortization and accretion expense primarily due to our divestiture program.

Our operating margin percentage for the three and six months ended July 2, 2022 increased from 15.5% to 17.6% and from 7.0% to 7.5%, respectively, from the comparable period a year ago, due to the factors noted above. Adjusted EBITDA, as defined in "Non-GAAP Performance Measures" below, increased by $0.2 million and decreased $18.2 million in the three and six months ended July 2, 2022, respectively, due to the factors noted above.

As a vertically-integrated company, we include intercompany sales from materials to products and from products to services when assessing the operating results of our business. We refer to revenue inclusive of intercompany sales as gross revenue. These intercompany transactions are eliminated in the consolidated financial statements. Gross revenue by product was as follows:


	Three months ended								Six months ended
($ in thousands)	July 2, 2022		July 3, 2021		Variance				July 2, 2022		July 3, 2021		Variance
Revenue by product*:
Aggregates	$	200,535	$	194,595	$	5,940	3.1	%	$	349,961	$	338,389	$	11,572	3.4	%
Cement	90,689		84,673		6,016		7.1	%	134,495		124,376		10,119		8.1	%
Ready-mix concrete	183,425		183,936		(511)		(0.3)	%	341,027		342,272		(1,245)		(0.4)	%
Asphalt	98,001		100,626		(2,625)		(2.6)	%	115,502		131,851		(16,349)		(12.4)	%
Paving and related services	168,689		175,898		(7,209)		(4.1)	%	209,026		237,706		(28,680)		(12.1)	%
Other	(54,785)		(71,811)		17,026		23.7	%	(42,510)		(78,833)		36,323		46.1	%
Total revenue	$	686,554	$	667,917	$	18,637	2.8	%	$	1,107,501	$	1,095,761	$	11,740	1.1	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. The elimination of intracompany transactions is included in Other. Revenue from the liquid asphalt terminals is included in asphalt revenue.

Detail of our volumes and average selling prices by product in the three and six months ended July 2, 2022 and July 3, 2021 were as follows:


	Three months ended
	July 2, 2022			July 3, 2021
	Volume(1)			Volume(1)			Percentage Change in
	(in thousands)	Pricing(2)		(in thousands)	Pricing(2)		Volume		Pricing
Aggregates	16,820	$	11.92	17,091	$	11.39	(1.6)	%	4.7	%
Cement	705	128.57		708	119.64		(0.4)	%	7.5	%
Ready-mix concrete	1,394	131.63		1,534	119.94		(9.1)	%	9.7	%
Asphalt	1,321	71.16		1,557	59.87		(15.2)	%	18.9	%

	Six months ended
	July 2, 2022			July 3, 2021
	Volume(1)			Volume(1)			Percentage Change in
	(in thousands)	Pricing(2)		(in thousands)	Pricing(2)		Volume		Pricing
Aggregates	30,223	$	11.58	30,600	$	11.06	(1.2)	%	4.7	%
Cement	1,046	128.52		1,048	118.68		(0.2)	%	8.3	%
Ready-mix concrete	2,635	129.45		2,872	119.18		(8.3)	%	8.6	%
Asphalt	1,582	70.33		2,031	59.91		(22.1)	%	17.4	%

(1)Volumes are shown in tons for aggregates, cement and asphalt and in cubic yards for ready-mix concrete.

(2)Pricing is shown on a per ton basis for aggregates, cement and asphalt and on a per cubic yard basis for ready-mix concrete.

Table of Contents

Revenue from aggregates increased $5.9 million and $11.6 million in the three and six months ended July 2, 2022, respectively. In the first six months of 2022, we had solid increases in organic aggregate volumes in most of our markets, which were offset by volume decreases in certain markets due to divestitures in 2022 and 2021. Organic aggregate volumes decreased 2.1% in the first six months of 2022 as compared to the same period a year ago, primarily due to divestitures in our East segment and unfavorable weather conditions in Kansas and Missouri, partially offset by increases in our Virginia, Georgia, Texas and British Columbia markets. Aggregate average sales price of $11.58 per ton increased 4.7% in the first six months of 2022 as compared to the first six months of 2021, due to our focus on increasing prices in the current inflationary environment. We have continued, and expect to continue increasing prices to stay ahead of inflationary pressures.

Revenue from cement increased $6.0 million and $10.1 million in the three and six months ended July 2, 2022, respectively. In the three and six months ended July 2, 2022, organic cement volumes decreased 0.4% and 0.2%, respectively, and organic cement average sales prices increased 7.5% and 8.3%, respectively, as compared to the same period in the prior year.

Revenue from ready-mix concrete decreased $0.5 million and $1.2 million in the three and six months ended July 2, 2022, respectively. In the three and six months ended July 2, 2022, our ready-mix volumes decreased 9.1% and 8.3%, respectively, and our average sales prices increased 9.7% and 8.6%, respectively. The volume decrease in the three and six months ended July 2, 2022 occurred primarily in our Intermountain West and North Texas markets while our price increase was primarily in the Intermountain West and South Texas markets.

Revenue from asphalt decreased $2.6 million and $16.3 million in the three and six months ended July 2, 2022, respectively, primarily due to the divestiture of our paving business in Texas in May 2021. In the first six months of 2022, organic pricing increased 17.4%, with strong pricing gains in the Virginia, North Texas and Intermountain West geographies. In the first six months of 2022, organic volumes decreased 22.1% mainly due to the divestiture noted above.

Other Financial Information

Interest expense

In September 2021, we redeemed all $300.0 million 5.125% Senior Notes due 2025 using existing cash on hand. As a result, interest expense in the first half of 2022 is less than it was in the first half of 2021.

Gain (Loss) on Sale of businesses

We continue to make progress on our strategy to divest certain businesses through portfolio optimization. In the first six months of 2022, we sold two businesses in the East segment, resulting in cash proceeds of $341.7 million and a net gain on disposition of $170.3 million. In the first six months of 2021, we sold four businesses in the East segment and one in the West segment, resulting in cash proceeds of $103.6 million and a net gain on disposition of $15.4 million.

Income Tax Expense

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible, as well as consideration of tax-planning strategies we may seek to utilize net operating loss carryforwards that begin to expire in 2030.

Segment results of operations

West Segment

Table of Contents


	Three months ended										Six months ended
($ in thousands)	July 2, 2022			July 3, 2021			Variance				July 2, 2022			July 3, 2021			Variance
Net revenue	$	352,510		$	313,617		$	38,893	12.4	%	$	588,512		$	548,361		$	40,151	7.3	%
Operating income	62,580			53,209			9,371		17.6	%	70,572			68,266			2,306		3.4	%
Operating margin percentage	17.8		%	17.0		%					12.0		%	12.4		%
Adjusted EBITDA (1)	$	84,644		$	78,771		$	5,873	7.5	%	$	117,336		$	119,419		$	(2,083)	(1.7)	%
Adjusted EBITDA Margin (1)	24.0		%	25.1		%					19.9		%	21.8		%

Net revenue in the West segment increased $38.9 million for the three months ended July 2, 2022, due to net revenue increases across all lines of business. Net revenue in the West segment increased $40.2 million in the six months ended July 2, 2022, as increases in net revenues in aggregates and ready-mix concrete outpaced a decrease in asphalt and paving revenues. Organic aggregate volumes increased 5.7% in the first six months of 2022 as compared to the first six months of 2021, and organic aggregates average sales prices increased 4.0%, primarily due to strong demand in our Texas and Vancouver, Canada geographies. Organic ready-mix concrete volumes decreased 0.6% and our organic ready-mix concrete average sales prices increased 9.2% in the first half of 2022. Organic ready-mix volumes were strong in 2022 in South Texas which were offset by slightly lower volumes in the Intermountain West region, which were impacted by availability of cement. Although residential construction activity remains strong, particularly in the Houston and Salt Lake City areas, two of our largest metro areas where we operate, we believe home builders in those markets are beginning to phase new builds in anticipation of a slowdown. We continue to monitor that activity given recent increases in mortgage rates and other inflationary concerns that is expected to impact residential markets.

The West segment’s operating income increased $9.4 million and $2.3 million in the three and six months ended July 2, 2022, respectively. Adjusted EBITDA increased $5.9 million and decreased $2.1 million and Adjusted EBITDA Margin decreased to 24.0% from 25.1% and to 19.9% from 21.8% in the three and six months ended July 2, 2022, respectively. The increases in operating income and Adjusted EBITDA for the second quarter of 2022 occurred primarily due to higher aggregate volumes and increases in average sales prices for both aggregates and ready-mix concrete. The operating margin percentage in the West segment decreased in the six months ended July 2, 2022 due to the aggregate product mix in Texas as well as the other factors noted above.

Gross revenue by product/ service was as follows:


	Three months ended								Six months ended
($ in thousands)	July 2, 2022		July 3, 2021		Variance				July 2, 2022		July 3, 2021		Variance
Revenue by product*:
Aggregates	$	97,772	$	87,485	$	10,287	11.8	%	$	175,554	$	159,623	$	15,931	10.0	%
Ready-mix concrete	156,693		141,501		15,192		10.7	%	291,284		268,487		22,797		8.5	%
Asphalt	65,906		59,464		6,442		10.8	%	79,506		87,152		(7,646)		(8.8)	%
Paving and related services	116,365		103,768		12,597		12.1	%	148,868		150,657		(1,789)		(1.2)	%
Other	(52,986)		(54,250)		1,264		2.3	%	(59,230)		(76,818)		17,588		22.9	%
Total revenue	$	383,750	$	337,968	$	45,782	13.5	%	$	635,982	$	589,101	$	46,881	8.0	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. The elimination of intracompany transactions is included in “Other.” Revenue from the liquid asphalt terminals is included in asphalt revenue.

The West segment’s percent changes in sales volumes and pricing in the three and six months ended July 2, 2022 from the three and six months ended July 3, 2021 were as follows:

Table of Contents


	Three months ended				Six months ended
	Percentage Change in				Percentage Change in
	Volume		Pricing		Volume		Pricing
Aggregates	7.3	%	4.2	%	5.7	%	4.0	%
Ready-mix concrete	(0.3)	%	11.2	%	(0.6)	%	9.2	%
Asphalt	(5.0)	%	19.2	%	(18.8)	%	17.7	%

Revenue from aggregates in the West segment increased $10.3 million and $15.9 million in the three and six months ended July 2, 2022, respectively, due to an increase in aggregates sales volumes and prices. In the three and six months ended July 2, 2022, aggregate volumes increased 7.3% and 5.7%, respectively, primarily due to strong volumes in Texas as well as in the British Columbia markets. Aggregates pricing for the three and six months ended July 2, 2022 increased 4.2% and 4.0% when compared to the same period in 2021 as we implemented price increases in all our markets.

Revenue from ready-mix concrete in the West segment increased $15.2 million and $22.8 million in the three and six months ended July 2, 2022, respectively. For the three and six months ended July 2, 2022, organic ready-mix concrete prices increased 11.2% and 9.2%, respectively. For the three and six months ended July 2, 2022, our ready-mix concrete organic volumes decreased 0.3% and 0.6% as strong volume increases in South Texas were offset by declines in the Intermountain West and North Texas geographies.

In May 2021, we divested our paving business in South Texas, which reduced our volumes and revenues subsequent to the closing date. Revenue from asphalt in the West segment increased $6.4 million and decreased $7.6 million in the three and six months ended July 2, 2022, respectively. For the three and six months ended July 2, 2022, asphalt volumes decreased 5.0% and 18.8%, respectively. Average sales prices for asphalt increased 19.2% and 17.7% in the three and six months ended July 2, 2022, respectively. Revenue for paving and related services in the West segment increased by $12.6 million and decreased $1.8 million in the three and six months ended July 2, 2022, respectively.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the six months ended July 2, 2022 was approximately $(6.8) million and $37.9 million, respectively.

East Segment


	Three months ended										Six months ended
($ in thousands)	July 2, 2022			July 3, 2021			Variance				July 2, 2022			July 3, 2021			Variance
Net revenue	$	185,757		$	219,091		$	(33,334)	(15.2)	%	$	296,025		$	342,159		$	(46,134)	(13.5)	%
Operating income	31,625			34,605			(2,980)		(8.6)	%	20,898			24,231			(3,333)		(13.8)	%
Operating margin percentage	17.0		%	15.8		%					7.1		%	7.1		%
Adjusted EBITDA (1)	$	46,694		$	57,284		$	(10,590)	(18.5)	%	$	54,830		$	69,029		$	(14,199)	(20.6)	%
Adjusted EBITDA Margin (1)	25.1		%	26.1		%					18.5		%	20.2		%

Net revenue in the East segment decreased $33.3 million and $46.1 million in the three and six months ended July 2, 2022, respectively, as compared to the same period a year ago, primarily due to one divestiture in late January 2022 and a second divestiture in May 2022. Operating income decreased $3.0 million and $3.3 million in the three and six months ended July 2, 2022, respectively, as inflationary increases in our cost of revenue exceeded our increases in average sales prices. Adjusted EBITDA decreased $10.6 million and $14.2 million in the three and six months ended July 2, 2022, respectively, primarily due to the divestitures noted above. Adjusted EBITDA Margin decreased to 25.1% from 26.1% and to 18.5% from 20.2% in the three and six months ended July 2, 2022, respectively, as compared to the same period a year ago.

Operating margin percentage for the three and six months ended July 2, 2022 increased to 17.0% from 15.8% and remained flat at 7.1%, respectively, from the comparable period a year ago, due to the items noted above.

Gross revenue by product/ service was as follows:

Table of Contents


	Three months ended								Six months ended
($ in thousands)	July 2, 2022		July 3, 2021		Variance				July 2, 2022		July 3, 2021		Variance
Revenue by product*:
Aggregates	$	102,763	$	107,110	$	(4,347)	(4.1)	%	$	174,407	$	178,766	$	(4,359)	(2.4)	%
Ready-mix concrete	26,732		42,435		(15,703)		(37.0)	%	49,743		73,785		(24,042)		(32.6)	%
Asphalt	32,095		41,162		(9,067)		(22.0)	%	35,996		44,699		(8,703)		(19.5)	%
Paving and related services	52,324		72,130		(19,806)		(27.5)	%	60,158		87,049		(26,891)		(30.9)	%
Other	(4,761)		(18,710)		13,949		74.6	%	11,339		(4,130)		15,469		374.6	%
Total revenue	$	209,153	$	244,127	$	(34,974)	(14.3)	%	$	331,643	$	380,169	$	(48,526)	(12.8)	%

The East segment’s percent changes in sales volumes and pricing in the three and six months ended July 2, 2022 from the three and six months ended July 3, 2021 were as follows:


	Three months ended				Six months ended
	Percentage Change in				Percentage Change in
	Volume		Pricing		Volume		Pricing
Aggregates	(9.9)	%	6.6	%	(8.5)	%	6.7	%
Ready-mix concrete	(38.2)	%	1.8	%	(35.7)	%	4.9	%
Asphalt	(31.0)	%	16.1	%	(28.7)	%	15.8	%

Revenue from aggregates in the East segment decreased $4.3 million and $4.4 million in the three and six months ended July 2, 2022, respectively, as compared to the same period a year ago. Aggregate volumes in the first six months of 2022 decreased 8.5% primarily due to our divestiture program. Excluding the impact of the divestitures, our aggregate volumes were slightly down in our Kansas markets which were impacted by wet weather conditions as well as wind farm projects in 2021 that were not replaced with similar projects in 2022. Despite the reduced volumes in the East segment, we had higher volumes in our Georgia market. Aggregates organic pricing increased 6.8% and 7.1% in the three and six months ended July 2, 2022, respectively, as compared to the same period a year ago.

Revenue from ready-mix concrete in the East segment decreased $15.7 million and $24.0 million in the three and six months ended July 2, 2022, respectively, as compared to the same period in 2021, primarily due to our divestiture program. Excluding the impact of our divestiture program, our ready mix volumes were flat in the three month period ended July 2, 2022. Our ready-mix average sales prices increased 1.8% and 4.9%, in the three and six months ended July 2, 2022, respectively.

Revenue from asphalt decreased $9.1 million and $8.7 million in the three and six months ended July 2, 2022, respectively, when compared to the same period in 2021, again impacted by divestitures. Asphalt pricing increased 15.8% in the six months ended July 2, 2022, due to increases in liquid asphalt. Paving and related service revenue decreased $19.8 million and $26.9 million in the three and six months ended July 2, 2022, respectively, primarily due to our divestitures noted above.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the six months ended July 2, 2022 was approximately $(62.9) million and $25.8 million, respectively.

Cement Segment


	Three months ended										Six months ended
($ in thousands)	July 2, 2022			July 3, 2021			Variance				July 2, 2022			July 3, 2021			Variance
Net revenue	$	93,651		$	85,822		$	7,829	9.1	%	$	139,876		$	126,491		$	13,385	10.6	%
Operating income	33,718			25,801			7,917		30.7	%	20,212			15,755			4,457		28.3	%
Operating margin percentage	36.0		%	30.1		%					14.4		%	12.5		%
Adjusted EBITDA (1)	$	43,241		$	39,422		$	3,819	9.7	%	$	37,422		$	41,921		$	(4,499)	(10.7)	%
Adjusted EBITDA Margin (1)	46.2		%	45.9		%					26.8		%	33.1		%

Table of Contents

Net revenue in the Cement segment increased $7.8 million and $13.4 million primarily due to average price increases of 7.5% and 8.3%, partially offset by decreased organic cement volumes of 0.4% and 0.2% in the three and six months ended July 2, 2022, respectively. Our Green America Recycling facility, which provides alternative fuel for one of our plants, is fully operational in 2022; however, the facility was not fully operational in the second quarter of 2021, after its prolonged shutdown due to an explosion in April 2020.

Operating income increased $7.9 million and $4.5 million during the three and six months ended July 2, 2022, respectively. Adjusted EBITDA increased $3.8 million and decreased $4.5 million and Adjusted EBITDA Margin increased to 46.2% from 45.9% and decreased to 26.8% from 33.1% in the three and six months ended July 2, 2022, respectively. Our Adjusted EBITDA margin increased in the three months ended July 2, 2022 as our increases in average sales price exceeded inflationary pressures. Our Adjusted EBITDA margin decreased for the six months ended July 2, 2022, due to elevated repair and maintenance costs over the comparable prior period, primarily in the first quarter of 2022. Additionally, we received less in insurance proceeds in 2022 than in 2021 related to the recycling plant explosion that occurred in April 2020. In the three months ended July 2, 2022, we received an additional $1.7 million related to property, plant and equipment damage. In comparison, in the first half of 2021, we received $1.2 million in insurance proceeds relative to property, plant and equipment and $7.9 million in business interruption insurance proceeds. In all periods, insurance proceeds relative to property, plant and equipment were recorded as gain on sale of assets and business interruption insurance proceeds were recorded as other income.

Operating margin percentage for the three and six months ended July 2, 2022 increased to 36.0% from 30.1% and to 14.4% from 12.5%, respectively, from the comparable period a year ago. The increased operating margin for the six months ended July 2, 2022 was primarily due to increases in our average sales price targeted to exceed inflationary pressures. We continue to sell more imported tons of cement in 2022 than in 2021, which tends to compress our margins. We expect to import cement throughout the duration of 2022 to keep pace with demand. Production levels in the three and six month periods ending July 2, 2022 were slightly less than the comparable periods in 2021.

Gross revenue by product was as follows:


	Three months ended								Six months ended
($ in thousands)	July 2, 2022		July 3, 2021		Variance				July 2, 2022		July 3, 2021		Variance
Revenue by product*:
Cement	$	90,689	$	84,673	$	6,016	7.1	%	$	134,495	$	124,376	$	10,119	8.1	%
Other	2,962		1,149		1,813		157.8	%	5,381		2,115		3,266		154.4	%
Total revenue	$	93,651	$	85,822	$	7,829	9.1	%	$	139,876	$	126,491	$	13,385	10.6	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. Revenue from waste processing and the elimination of intracompany transactions is included in Other.

The Cement segment’s percent changes in sales volumes and pricing in the three and six months ended July 2, 2022 from the three and six months ended July 3, 2021 were as follows:


	Three months ended				Six months ended
	Percentage Change in				Percentage Change in
	Volume		Pricing		Volume		Pricing
Cement	(0.4)	%	7.5	%	(0.2)	%	8.3	%

Revenue from cement increased $6.0 million and $10.1 million in the three and six months ended July 2, 2022, respectively, due to organic cement pricing gains of 7.5% and 8.3%, partially offset by volume decreases of 0.4% and 0.2%, respectively.

Liquidity and Capital Resources

Our primary sources of liquidity include cash on-hand, cash provided by operations, amounts available for borrowing under our senior secured credit facilities and capital-raising activities in the debt and capital markets. In addition to our current sources of liquidity, we have access to liquidity through public offerings of shares of our Class A common stock. To facilitate such offerings, in January 2020, we filed a shelf registration statement with the SEC that will expire in January 2023. The amount of Class A common stock to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific limit on the amount we may issue. The specifics of any future offerings, along with the use of the proceeds thereof, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

Table of Contents

As of July 2, 2022, we had $465.3 million in cash and cash equivalents and $723.5 million of working capital compared to $381.0 million and $560.5 million, respectively, at January 1, 2022. Working capital is calculated as current assets less current liabilities. There were no restricted cash balances as of July 2, 2022 or January 1, 2022. We had no outstanding borrowings on our senior secured revolving credit facility, which had borrowing capacity of $324.6 million as of July 2, 2022, which is net of $20.4 million of outstanding letters of credit and is fully available to us within the terms and covenant requirements of our credit agreement governing the senior secured credit facilities (the “Credit Agreement”).

In March 2022, our Board of Directors authorized a share repurchase program, whereby we can repurchase up to $250.0 million of our Class A common stock. During the first quarter of 2022, we repurchased 1.5 million shares of Class A common stock for $47.5 million. As of July 2, 2022, approximately $202.5 million remained available for share repurchases under the share repurchase program.

Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year. Our working capital requirements generally increase during the first half of the year as we build up inventory and focus on repair and maintenance and other set-up costs for the upcoming season. Working capital levels then decrease as the construction season winds down and we enter the winter months, which is when we see significant inflows of cash from the collection of receivables.

As of July 2, 2022 and January 1, 2022, our long-term borrowings totaled $1.5 billion and $1.6 billion, respectively, for which we incurred $18.1 million and $35.8 million of interest expense for the three and six months ended July 2, 2022, respectively, and $21.2 million and $42.4 million for the three and six months ended July 3, 2021, respectively. We expect that normal operating cash flow will be sufficient to fund our seasonal working capital needs. We had no outstanding borrowings on the revolving credit facility as of July 2, 2022.

We believe we have access to sufficient financial resources from our liquidity sources to fund our business and operations, including contractual obligations, capital expenditures and debt service obligations, for at least the next twelve months. Our growth strategy contemplates future acquisitions for which we believe we have sufficient access to capital. We also plan to divest of certain dilutive businesses as we rationalize our portfolio, which will also generate additional capital.

We and our affiliates may from time to time purchase our outstanding debt through open market purchases, privately negotiated transactions or otherwise. Purchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Indebtedness

Please refer to the notes to the consolidated interim financial statements for detailed information about our long-term debt, scheduled maturities of long-term debt and affirmative and negative covenants, including the maximum allowable consolidated first lien net leverage ratio. As of July 2, 2022, we were in compliance with all debt covenants. At July 2, 2022 and January 1, 2022, $1.5 billion and $1.6 billion, respectively, of total debt was outstanding under our respective debt agreements. During the second quarter of 2022, we repaid $72.4 million of our term loan under provisions related to the divestitures of businesses. Should we consummate additional divestitures during the remainder of the year, additional prepayments of the term loan may be required.

Cash Flows

The following table summarizes our net cash used in or provided by operating, investing and financing activities and our capital expenditures in the six months ended July 2, 2022 and July 3, 2021:


	Summit Inc.
($ in thousands)	July 2, 2022		July 3, 2021
Net cash provided by (used in):
Operating activities	$	16,254	$	74,651
Investing activities	214,557		(29,566)
Financing activities	(145,996)		5,538

Operating activities

Table of Contents

During the six months ended July 2, 2022, cash provided by operating activities was $16.3 million primarily as a result of:

•Net income of $158.0 million, decreased by non-cash expenses, including $107.5 million of depreciation, depletion, amortization and accretion expense and $10.2 million of share-based compensation, offset by the net gain on asset and business divestitures of $174.9 million.

•Billed and unbilled accounts receivable increased by $94.0 million in the first six months of 2022 as a result of the seasonality of our business. The majority of our sales occur in the spring, summer and fall and we typically incur an increase in accounts receivable (net billed and unbilled) during the second and third quarters of each year. This amount is typically converted to cash in the fourth and first quarters. Our inventory levels decreased during the second quarter as business activity increased during the quarter.

•The timing of payments associated with accounts payable and accrued expenses of cash, which is consistent with the seasonality of our business whereby we build-up inventory levels and incur repairs and maintenance costs to ready the business for increased sales volumes in the summer and fall. These costs are typically incurred in the first half of the year and paid by year-end. In addition, we made $36.1 million of interest payments in the six months ended July 2, 2022.

During the six months ended July 3, 2021, cash provided by operating activities was $74.7 million primarily as a result of:

•Net income of $34.5 million, increased by non-cash expenses, including $118.4 million of depreciation, depletion, amortization and accretion expense and $10.2 million of share-based compensation, reduced by the net gain on sale of businesses and other assets of $18.4 million.

•Billed and unbilled accounts receivable increased by $82.3 million in the first six months of 2021 as a result of the seasonality of our business. The majority of our sales occur in the spring, summer and fall and we typically incur an increase in accounts receivable (net billed and unbilled) during the second and third quarters of each year. This amount is typically converted to cash in the fourth and first quarters. Our inventory levels decreased during the second quarter as business activity increased during the quarter.

•The timing of payments associated with accounts payable and accrued expenses of cash, which is consistent with the seasonality of our business whereby we build-up inventory levels and incur repairs and maintenance costs to ready the business for increased sales volumes in the summer and fall. These costs are typically incurred in the first half of the year and paid by year-end. In addition, we made $41.0 million of interest payments in the six months ended July 3, 2021.

Investing activities

During the six months ended July 2, 2022, cash provided by investing activities was $214.6 million, of which $129.6 million was invested in capital expenditures, which was offset by $341.7 million of proceeds from the sale of two businesses in the East segment, as well as $5.4 million of proceeds from asset sales.

During the six months ended July 3, 2021, cash used for investing activities was $29.6 million, of which $132.7 million was invested in capital expenditures, which was offset by $103.6 million of proceeds from the sale of a businesses, as well as $6.8 million of proceeds from asset sales.

Financing activities

During the six months ended July 2, 2022, cash used in financing activities was $146.0 million. We made $86.8 million of payments on debt, including the $72.4 million prepayment of the term loan due to our divestiture program, $11.6 million payments on acquisition-related liabilities and used $47.5 million to repurchase shares of Class A common stock.

During the six months ended July 3, 2021, cash provided by financing activities was $5.5 million. We received $31.8 million of proceeds from stock option exercises, which was offset by $8.4 million payments on acquisition-related liabilities and $17.4 million of payments on debt.

Cash paid for capital expenditures

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We paid cash of approximately $129.6 million in capital expenditures in the six months ended July 2, 2022 compared to $132.7 million in the six months ended July 3, 2021.

We currently estimate that we will invest between $270 million to $290 million inclusive of spend associated with greenfield projects. The timing of our greenfield expenditures is dependent upon the timing of when permits may be issued. We expect to fund our capital expenditure program through cash on hand, cash from operations, and outside financing arrangements including our revolving credit facility.

Tax Receivable Agreement

When the Company purchases LP Units for cash or LP Units are exchanged for shares of Class A common stock, this results in increases in the Company’s share of the tax basis of the tangible and intangible assets of Summit Holdings. These increases in tax basis may increase, for tax purposes, depreciation and amortization deductions and therefore reduce the amount of tax that Summit Inc. would otherwise be required to pay in the future. In connection with our initial public offering, we entered into a TRA with the holders of the LP Units that provides for the payment by Summit Inc. to exchanging holders of LP Units of 85% of the benefits, if any, that Summit Inc. actually realizes (or, under certain circumstances such as an early termination of the TRA is deemed to realize) as a result of these increases in tax basis and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. The increases in tax basis as a result of an exchange of LP Units for shares of Class A common stock, as well as the amount and timing of any payments under the TRA, are difficult to accurately estimate, as they will vary depending upon a number of factors, including the timing of the exchanges, the price of our Class A common stock at the time of the exchange, the extent to which the exchanges are taxable, the amount and timing of our income and the effective tax rate.

We anticipate funding payments under the TRA from cash flows from operations, available cash and available borrowings under our Senior Secured Revolving Credit Facilities. As of July 2, 2022, we had accrued $327.5 million as TRA liability in our consolidated financial statements. We do not expect significant payments on our TRA liability to occur within the next twelve months.

Based upon a $23.08 per share price of our Class A common stock, the closing price of our stock on the last trading day of the three months ended July 2, 2022, and a contractually defined discount rate of 4.56%, we estimate that if Summit Inc. were to exercise its right to terminate the TRA, the aggregate amount required to settle the TRA would be approximately $263.1 million. Estimating the amount and the timing of payments that may be made under the TRA is by its nature difficult and imprecise, insofar as the amounts payable depends on a variety of factors, including, but not limited to, the timing of future exchanges, our stock price at the date of the exchange and the timing of the generation of future taxable income. The increases in tax basis as a result of an exchange, as well as the amount and timing of any payments under the TRA, will vary depending on a variety of factors.

Commitments and contingencies

We are 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 pending or threatened claims and litigation will not have a material effect on our consolidated financial position, results of operations or liquidity. We record legal fees as incurred.

Environmental Remediation—Our 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. We regularly monitor and review 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 our business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities and noncompliance will not have a material adverse effect on our consolidated financial condition, results of operations or liquidity.

Other—We are 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.

Off-Balance sheet arrangements

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As of July 2, 2022, we had no material off-balance sheet arrangements.

Non-GAAP Performance Measures

We evaluate our operating performance using metrics that we refer to as “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted Cash Gross Profit” and “Adjusted Cash Gross Profit Margin” which are not defined by U.S. GAAP and should not be considered as an alternative to earnings measures defined by U.S. GAAP. We define Adjusted EBITDA as EBITDA, adjusted to exclude accretion, loss on debt financings, gain on sale of business, non-cash compensation and certain other non-cash and non-operating items. Beginning with the first quarter of 2021, the Company no longer adjusts for transaction costs, as those costs are recurring cash payments and included in general and administrative expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. We define Adjusted Cash Gross Profit as operating income before general and administrative expenses, depreciation, depletion, amortization and accretion and Adjusted Cash Gross Profit Margin as Adjusted Cash Gross Profit as a percentage of net revenue.

We present Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the convenience of investment professionals who use such metrics in their analyses. The investment community often uses these metrics to assess the operating performance of a company’s business and to provide a consistent comparison of performance from period to period. We use these metrics, among others, to assess the operating performance of our individual segments and the consolidated company.

Non-GAAP financial measures are not standardized; therefore, it may not be possible to compare such financial measures with other companies’ non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure.

The tables below reconcile our net income (loss) to EBITDA and Adjusted EBITDA, present Adjusted EBITDA by segment and reconcile operating income to Adjusted Cash Gross Profit for the periods indicated:


Reconciliation of Net Income to Adjusted EBITDA	Three months ended July 2, 2022
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income	$	65,606	$	64,089	$	38,641	$	24,430	$	192,766
Interest (income) expense	(4,035)		(2,714)		(4,860)		32,208		20,599
Income tax expense (1)	987		—		—		52,960		53,947
Depreciation, depletion and amortization	21,779		14,523		9,383		770		46,455
EBITDA	$	84,337	$	75,898	$	43,164	$	110,368	$	313,767
Accretion	233		392		77		—		702

Tax receivable agreement expense (1)	—		—		—		954		954
Gain on sale of businesses (2)	—		(29,452)		—		(126,601)		(156,053)
Non-cash compensation	—		—		—		4,734		4,734
Other	74		(144)		—		—		(70)
Adjusted EBITDA	$	84,644	$	46,694	$	43,241	$	(10,545)	$	164,034


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Six months ended July 2, 2022
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	77,507	$	71,455	$	30,210	$	(21,206)	$	157,966
Interest (income) expense	(8,005)		(6,165)		(9,822)		64,740		40,748
Income tax expense (benefit) (1)	1,163		(106)		—		48,147		49,204
Depreciation, depletion and amortization	46,127		32,407		16,881		1,519		96,934
EBITDA	$	116,792	$	97,591	$	37,269	$	93,200	$	344,852
Accretion	460		803		153		—		1,416

Tax receivable agreement expense (1)	—		—		—		954		954
Gain on sale of businesses (2)	—		(43,657)		—		(126,601)		(170,258)
Non-cash compensation	—		—		—		10,156		10,156
Other	84		93		—		—		177
Adjusted EBITDA	$	117,336	$	54,830	$	37,422	$	(22,291)	$	187,297

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Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended July 3, 2021
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	55,447	$	37,035	$	33,230	$	(67,954)	$	57,758
Interest (income) expense	(2,860)		(2,176)		(4,035)		33,287		24,216
Income tax expense (1)	1,198		156		—		17,054		18,408
Depreciation, depletion and amortization	25,133		21,146		10,143		1,101		57,523
EBITDA	$	78,918	$	56,161	$	39,338	$	(16,512)	$	157,905
Accretion	218		408		84		—		710


(Gain) loss on sale of businesses	(273)		509		—		—		236
Non-cash compensation	—		—		—		4,827		4,827
Other	(92)		206		—		—		114
Adjusted EBITDA	$	78,771	$	57,284	$	39,422	$	(11,685)	$	163,792


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Six months ended July 3, 2021
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	72,883	$	44,004	$	31,625	$	(113,999)	$	34,513
Interest (income) expense	(4,892)		(3,896)		(8,080)		65,270		48,402
Income tax expense (1)	1,384		90		—		11,491		12,965
Depreciation, depletion and amortization	50,057		42,620		18,211		2,205		113,093
EBITDA	$	119,432	$	82,818	$	41,756	$	(35,033)	$	208,973
Accretion	434		877		165		—		1,476


Gain on sale of businesses	(273)		(15,159)		—		—		(15,432)
Non-cash compensation	—		—		—		10,190		10,190
Other	(174)		493		—		—		319
Adjusted EBITDA	$	119,419	$	69,029	$	41,921	$	(24,843)	$	205,526

(1)The reconciliation of net income to Adjusted EBITDA is based on the financial results of Summit Inc. and its subsidiaries, which was $49.3 million and $37.7 million less than Summit LLC and its subsidiaries in the three and six months ended July 2, 2022, respectively, and $12.1 million and $7.5 million less in three and six months ended July 3, 2021, respectively, due to TRA expense and income tax expense which are obligations of Summit Holdings and Summit Inc. and are thus excluded from Summit LLC’s consolidated net income.

(2)The Corporate gain is related to the sale of a business in the East Segment in the three months ended July 2, 2022.


Reconciliation of Working Capital	July 2, 2022		January 1, 2022
($ in thousands)
Total current assets	$	1,056,461	$	869,610
Less total current liabilities	(332,962)		(309,070)
Working capital	$	723,499	$	560,540


	Three months ended						Six months ended
Reconciliation of Operating Income to Adjusted Cash Gross Profit	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
($ in thousands)
Operating income	$	111,236		$	95,923		$	76,941		$	70,864
General and administrative expenses	47,651			47,448			99,575			99,090
Depreciation, depletion, amortization and accretion	47,157			58,233			98,350			114,569
Gain on sale of property, plant and equipment	(3,695)			(1,403)			(4,950)			(3,172)
Adjusted Cash Gross Profit (exclusive of items shown separately)	$	202,349		$	200,201		$	269,916		$	281,351
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)	32.0		%	32.4		%	26.3		%	27.7		%

(1)Adjusted Cash Gross Profit Margin, which we define as Adjusted Cash Gross Profit as a percentage of net revenue.

Critical Accounting Policies and Estimates

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Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period.

Please refer to “Critical Accounting Policies and Estimates” described in “Part II. Item 7. Management’s Discussion and Analysis of our Financial Condition and Results of Operations” of our annual report on Form 10-K filed with the SEC on February 24, 2022, from which there have been no material changes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks arising from transactions that are entered into in the normal course of business. Our operations are highly dependent upon the interest rate-sensitive construction industry as well as the general economic environment. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs. For a discussion of quantitative and qualitative disclosures about market risk, please refer to the Annual Report from which our exposure to market risk has not materially changed.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Summit Inc.

Summit Inc. maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in Summit Inc.’s reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Summit Inc.’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Summit Inc.’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Summit Inc.’s disclosure controls and procedures as of July 2, 2022. Based upon that evaluation, Summit Inc.’s Chief Executive Officer and Chief Financial Officer concluded that, as of July 2, 2022, Summit Inc.’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Summit LLC

Summit LLC maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Summit LLC’s reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Summit LLC’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Summit LLC’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Summit LLC’s disclosure controls and procedures as of July 2, 2022. Based upon that evaluation, Summit LLC’s Chief Executive Officer and Chief Financial Officer concluded that, as of July 2, 2022, Summit LLC’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

Summit Inc.

There was no change in Summit Inc.’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during its last fiscal quarter that has materially affected, or is reasonably likely to materially affect, Summit Inc.’s internal control over financial reporting.

Summit LLC

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There was no change in Summit LLC’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during its last fiscal quarter that has materially affected, or is reasonably likely to materially affect, Summit LLC’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under Note 12, "Commitments and Contingencies," to Summit Inc.’s unaudited consolidated financial statements is incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in the Annual Report, which could materially affect the Company’s business, financial condition, operating results or liquidity or future results. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its results of operations, financial condition or liquidity. There have been no material changes to the risk factors disclosed in the Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On March 2, 2022, we announced that our Board of Directors authorized the repurchase of up to $250.0 million of our Class A common stock. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. We did not repurchase any shares during the second quarter of 2022. As of July 2, 2022, we have $202.5 million available for repurchase under our share repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this report.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


3.1			Restated Certificate of Incorporation of Summit Materials, Inc. (incorporated by reference to Exhibit 3.1 to Summit Materials, Inc.’s Current Report on Form 8-K filed on May 19, 2021).
3.2			Second Amended and Restated Bylaws of Summit Materials, Inc. (incorporated by reference to Exhibit 3.3 to Summit Materials, Inc.’s Current Report on Form 8-K filed on May 19, 2021).
3.3			Certificate of Formation of Summit Materials, LLC, as amended (incorporated by reference to Exhibit 3.1 to Summit Materials, LLC’s Registration Statement on Form S-4, filed March 27, 2013 (File No. 333-187556)).
3.4			Second Amended and Restated Limited Liability Company Agreement of Summit Materials, LLC (incorporated by reference to Exhibit 3.4 to the Registrants’ Quarterly Report on Form 10-Q filed on October 30, 2019 (File No. 001-36783))
31.1*			Summit Materials, Inc.’s Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Summit Materials, Inc.’s Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*			Summit Materials, LLC’s Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*			Summit Materials, LLC’s Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Summit Materials, Inc.’s Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**			Summit Materials, Inc.’s Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3**			Summit Materials, LLC’s Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4**			Summit Materials, LLC’s Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1*			Mine Safety Disclosures
99.1*			Summit Materials, LLC’s Unaudited Consolidated Financial Statements and Notes to Unaudited Consolidated Financial Statements.
101.INS*			Inline XBRL Instance Document - the instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document
101.SCH*			Inline XBRL Taxonomy Extension Schema Document
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104.1*			Cover Page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2022, formatted in Inline XBRL (and contained in Exhibit 101).

* Filed herewith

** Furnished herewith

† Indicates management contract or compensatory plan or arrangement

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them other than for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.



	SUMMIT MATERIALS, INC.
	SUMMIT MATERIALS, LLC

Date: August 4, 2022	By:	/s/ Anne P. Noonan
		Anne P. Noonan
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 4, 2022	By:	/s/ Brian J. Harris
		Brian J. Harris
		Chief Financial Officer
		(Principal Financial and Accounting Officer)