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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 March 30, 2024
OR
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.)
1801 California Street, Suite 3500
80202
Denver, Colorado
(Zip Code)
(Address of principal executive offices)

Registrants’ telephone number, including area code: (303893-0012
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 classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock (par value $.01 per share)SUMNew 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.YesNoSummit Materials, LLCYesNo
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.YesNoSummit Materials, LLCYesNo
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 filerSmaller 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 filerSmaller 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Summit Materials, Inc.YesNoSummit Materials, LLCYesNo
As of April 29, 2024, 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 175,464,775 and 0, respectively.
As of April 29, 2024, 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 March 30, 2024, it held 100.0% of the economic interest and 100% of the voting rights of Summit Materials Holdings L.P., a Delaware limited partnership (“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”), our 5 1/4% senior notes due 2029 (“2029 Notes”) and our 7 1/4% senior notes due 2031 (“2031 Notes” collectively with the 2027 Notes and 2029 Notes, the “Senior Notes”). 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 December 30, 2023 (the “Annual Report”), as filed with the Securities and Exchange Commission (the “SEC”), the 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 local economies in which we operate, including residential;
the cyclical nature of our business;
risks related to weather and seasonality;
risks associated with our capital-intensive business;
competition within our local markets;
risks related to the integration of Argos USA and realization of intended benefits within the intended timeframe;
our ability to execute on our acquisition strategy and portfolio optimization strategy and, successfully integrate acquisitions with our existing operations;
our dependence on securing and permitting aggregate reserves in strategically located areas;
the impact of rising interest rates;



declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities, the federal government and other state agencies particularly;
our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;
environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
rising prices for, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges or otherwise;
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;
potential incurrence of substantially more debt;
restrictive covenants in the instruments governing our debt obligations;
our dependence on senior management and other key personnel, and our ability to retain and attract qualified personnel;
supply constraints or significant price fluctuations in the coal, electricity, diesel fuel, natural gas, liquid asphalt and other petroleum‑based resources that we use;
climate change and climate change legislation or other regulations;
evolving corporate governance and corporate disclosure regulations and expectations, including with respect to environmental, social and governance matters;
unexpected operational difficulties;
costs associated with pending and future litigation;
interruptions in our information technology systems and infrastructure, including cybersecurity and data leakage risks;
potential labor disputes, strikes, other forms of work stoppage or other union activities; and
material or adverse effects related to the Argos USA combination.


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:
 
"Argos USA" refers to Argos North America Corp., a Delaware corporation;
“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 illustrates our simplified organizational structure, equity ownership and our principal indebtedness as of March 30, 2024. This chart is provided for illustrative purposes only and does not show all of the legal entities in our organizational structure or all obligations of such entities.
Corp Structure.jpg
(1)SEC registrant.
(2)Guarantor under the senior secured credit facilities, but not the Senior Notes.
(3)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.


SUMMIT MATERIALS, INC.
SUMMIT MATERIALS, LLC 
FORM 10-Q 
TABLE OF CONTENTS  
  Page No.
PART I—Financial Information 
   
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
   
   
   
PART II — Other Information 
   
   
   
   
   
   
   
  



PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 March 30, 2024December 30, 2023
 (unaudited)(audited)
Assets  
Current assets:  
Cash and cash equivalents$498,110 $374,162 
Restricted cash 800,000 
Accounts receivable, net454,650 287,252 
Costs and estimated earnings in excess of billings11,681 10,289 
Inventories338,501 241,350 
Other current assets40,644 17,937 
Current assets held for sale1,375 1,134 
Total current assets1,344,961 1,732,124 
Property, plant and equipment, less accumulated depreciation, depletion and amortization (March 30, 2024 - $1,447,284 and December 30, 2023 - $1,267,557)
4,417,355 1,976,820 
Goodwill1,990,482 1,224,861 
Intangible assets, less accumulated amortization (March 30, 2024 - $28,335 and December 30, 2023 - $18,972)
179,587 68,081 
Deferred tax assets, less valuation allowance (March 30, 2024 - $1,113 and December 30, 2023 - $1,113)
 52,009 
Operating lease right-of-use assets89,251 36,553 
Other assets108,264 59,134 
Total assets$8,129,900 $5,149,582 
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of debt$7,575 $3,822 
Current portion of acquisition-related liabilities8,993 7,007 
Accounts payable290,914 123,621 
Accrued expenses191,776 171,691 
Current operating lease liabilities16,745 8,596 
Billings in excess of costs and estimated earnings6,005 8,228 
Total current liabilities522,008 322,965 
Long-term debt2,772,709 2,283,639 
Acquisition-related liabilities20,655 28,021 
Tax receivable agreement liability44,267 41,276 
Deferred tax liabilities205,669 15,854 
Noncurrent operating lease liabilities78,618 33,230 
Other noncurrent liabilities267,337 108,017 
Total liabilities3,911,263 2,833,002 
Commitments and contingencies (see note 12)
Stockholders’ equity:
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 175,454,250 and 119,529,380 shares issued and outstanding as of March 30, 2024 and December 30, 2023, respectively
1,755 1,196 
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 0 and 99 shares issued and outstanding as of March 30, 2024 and December 30, 2023, respectively
  
Preferred Stock, par value $0.01 per share; 250,000,000 shares authorized, 1 and 0 shares issued and outstanding as of March 30, 2024 and December 30, 2023, respectively
  
Additional paid-in capital3,403,307 1,421,813 
Accumulated earnings809,885 876,751 
Accumulated other comprehensive income3,690 7,275 
Stockholders’ equity4,218,637 2,307,035 
Noncontrolling interest in Summit Holdings 9,545 
Total stockholders’ equity4,218,637 2,316,580 
Total liabilities and stockholders’ equity$8,129,900 $5,149,582 
See notes to unaudited consolidated financial statements.
1

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands, except share and per share amounts) 
 Three months ended
 March 30, 2024April 1, 2023
Revenue:  
Product$728,694 $372,172 
Service44,535 35,098 
Net revenue773,229 407,270 
Delivery and subcontract revenue31,786 28,118 
Total revenue805,015 435,388 
Cost of revenue (excluding items shown separately below):
Product556,020 295,881 
Service36,205 30,038 
Net cost of revenue592,225 325,919 
Delivery and subcontract cost31,786 28,118 
Total cost of revenue624,011 354,037 
General and administrative expenses68,526 45,998 
Depreciation, depletion, amortization and accretion95,971 50,894 
Transaction and integration costs62,208 364 
Gain on sale of property, plant and equipment (848)(430)
Operating loss(44,853)(15,475)
Interest expense51,892 27,420 
Loss on debt financings5,453 493 
Gain on sale of businesses(14,985) 
Other income, net(8,878)(5,710)
Loss from operations before taxes(78,335)(37,678)
Income tax benefit(11,065)(6,466)
Net loss(67,270)(31,212)
Net loss attributable to noncontrolling interest in Summit Holdings(404)(408)
Net loss attributable to Summit Inc.$(66,866)$(30,804)
Loss per share of Class A common stock:
Basic$(0.40)$(0.26)
Diluted$(0.40)$(0.26)
Weighted average shares of Class A common stock:
Basic167,511,575 118,679,656 
Diluted167,511,575 118,679,656 

See notes to unaudited consolidated financial statements.
2

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income
(In thousands) 
 Three months ended
 March 30, 2024April 1, 2023
Net loss$(67,270)$(31,212)
Other comprehensive income (loss):
Foreign currency translation adjustment(4,724)203 
Less tax effect of other comprehensive income (loss) items1,139 (39)
Other comprehensive (loss) income(3,585)164 
Comprehensive loss(70,855)(31,048)
Less comprehensive loss attributable to Summit Holdings(404)(405)
Comprehensive loss attributable to Summit Inc.$(70,451)$(30,643)

See notes to unaudited consolidated financial statements.
3

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
(In thousands) 
 Three months ended
 March 30, 2024April 1, 2023
Cash flows from operating activities:  
Net loss$(67,270)$(31,212)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion106,354 53,927 
Share-based compensation expense6,720 4,708 
Net gain on asset and business disposals(15,834)(868)
Non-cash loss on debt financings5,453 161 
Change in deferred tax asset, net(19,054)(7,522)
Other748 26 
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net(11,127)20,414 
Inventories(5,302)(20,960)
Costs and estimated earnings in excess of billings(1,799)(7,868)
Other current assets(1,973)(3,748)
Other assets4,839 2,239 
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable21,177 20,987 
Accrued expenses(60,842)(27,968)
Billings in excess of costs and estimated earnings(1,780)(1,507)
Tax receivable agreement (benefit) expense6,227 (531)
Other liabilities(6,782)57 
Net cash (used in) provided by operating activities(40,245)335 
Cash flows from investing activities:
Acquisitions, net of cash acquired(1,100,919)(55,477)
Purchase of intellectual property(21,400) 
Purchases of property, plant and equipment(58,519)(63,584)
Proceeds from the sale of property, plant and equipment2,664 1,777 
Proceeds from sale of businesses75,993  
Other(1,240)(1,045)
Net cash used in investing activities(1,103,421)(118,329)
Cash flows from financing activities:
Proceeds from debt issuances1,007,475  
Debt issuance costs(17,550)(1,566)
Payments on debt(506,392)(4,414)
Payments on acquisition-related liabilities(6,124)(11,374)
Proceeds from stock option exercises593 15 
Other(9,260)(5,719)
Net cash provided by (used in) financing activities468,742 (23,058)
Impact of foreign currency on cash(1,128)58 
Net decrease in cash and cash equivalents and restricted cash(676,052)(140,994)
Cash and cash equivalents and restricted cash—beginning of period1,174,162 520,451 
Cash and cash equivalents and restricted cash—end of period$498,110 $379,457 

See notes to unaudited consolidated financial statements.
4

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except share amounts) 
 Summit Materials, Inc. 
 Accumulated
OtherClass AClass BAdditionalNoncontrollingTotal
AccumulatedComprehensiveCommon StockCommon StockPaid-inInterest inStockholders’
 EarningsincomeSharesDollarsSharesDollarsCapitalSummit HoldingsEquity
Balance - December 30, 2023$876,751 $7,275 119,529,380 $1,196 99 $ $1,421,813 $9,545 $2,316,580 
Net loss(66,866)— — — — — — (404)(67,270)
LP Unit exchanges— — 763,243 8 — — 9,534 (9,542) 
Other comprehensive loss, net of tax— (3,585)— — — — —  (3,585)
Stock option exercises— — 29,216 — — — 593 — 593 
Class B share cancellation— — — — (99)— — — — 
Share-based compensation— — — — — — 6,720 — 6,720 
Issuance of Class A Shares— — 54,720,000 547 — — 1,973,203 — 1,973,750 
Shares redeemed to settle taxes and other— — 412,411 4 — — (8,556)401 (8,151)
Balance - March 30, 2024$809,885 $3,690 175,454,250 $1,755  $ $3,403,307 $ $4,218,637 
Balance — December 31, 2022$590,895 $3,084 118,408,655 $1,185 99 $ $1,404,122 $12,704 $2,011,990 
Net loss(30,804)— — — — — — (408)(31,212)
LP Unit exchanges— — 2,000 — — — 21 (21) 
Other comprehensive income, net of tax— 161 — — — — — 3 164 
Stock option exercises— — 902 — — — 15 — 15 
Share-based compensation— — — — — — 4,708 — 4,708 
Shares redeemed to settle taxes and other— — 407,114 4 — — (5,680)(43)(5,719)
Balance — April 1, 2023$560,091 $3,245 118,818,671 $1,189 99 $ $1,403,186 $12,235 $1,979,946 
See notes to unaudited consolidated financial statements.
5

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
 
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, six 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.
 
On September 23, 2014, Summit Inc. was formed as a Delaware corporation to be a holding company. As of March 30, 2024, Summit Inc. held 100% of the economic interests and voting power of Summit Materials Holdings L.P. (“Summit Holdings”). Pursuant to a reorganization into a holding company structure (the “Reorganization”) consummated in connection with Summit Inc.’s March 2015 initial public offering ("IPO"), Summit Inc. became a holding corporation operating and controlling all of the business and affairs of Summit Holdings and its subsidiaries. Summit Inc. directly and indirectly owns all of the partnership interests of Summit Holdings (see note 11, 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.

On January 12, 2024, Summit completed a combination with Argos North America Corp. ("Argos USA"), Cementos Argos S.A. ("Cementos Argos"), Argos SEM LLC and Valle Cement Investments, Inc. (the "Argos Parties," and together with Argos USA, "Argos"), pursuant to which Summit acquired all of the outstanding equity interests (the "Transaction") of Argos USA from the Argos SEM LLC and Valle Cement Investments, Inc. in exchange for $1.2 billion of cash, the issuance of 54,720,000 shares of the Summit Inc.'s Class A common stock and one preferred share in a transaction valued at approximately $3.1 billion. The cash consideration was funded from the net proceeds of an $800 million offering of Senior Notes due 2031 and new term loan borrowings under our current credit facility. The purchase price is subject to customary adjustments, with any upward or downward adjustments made against the cash consideration. The Transaction Agreement, dated as of September 7, 2023, contains customary representations and warranties, covenants and agreements, including a Stockholder Agreement. For additional details related to the Transaction, see Note 2, Acquisitions, Dispositions, Goodwill and Intangibles.

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 December 30, 2023. 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 March 30, 2024, the results of operations for the three months ended March 30, 2024 and April 1, 2023 and cash flows for the three months ended March 30, 2024 and April 1, 2023.
 
6

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.

Business and Credit Concentrations—The Company’s operations are conducted primarily across 24 U.S. states and in British Columbia, Canada, with the most significant revenue generated in Texas, Florida, Georgia, Utah, Missouri, and Kansas. The Company’s accounts receivable consist primarily of amounts due from customers within these areas. Therefore, collection of these accounts is dependent on the economic conditions in the aforementioned states, as well as specific situations affecting individual customers. Credit granted within the Company’s trade areas has been granted to many customers, and management does not believe that a significant concentration of credit exists with respect to any individual customer or group of customers. No single customer accounted for more than 10% of the Company’s total revenue in the three months ended March 30, 2024 or April 1, 2023.

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 plastics components, and from the provision of services, which are primarily paving and related services, but also include landfill operations, the receipt and disposal of waste that is converted to fuel for use in our cement plants.
Products: Revenue for product sales is recognized when the performance obligation is satisfied, 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 a method similar to 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.
Estimating costs to be incurred for revenue recognition 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. 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 Year Reclassifications — We have reclassified transaction costs of $0.4 million for the three months ended April 1, 2023, from general and administrative expenses to a separate line item included in operating income to conform to the current year presentation. We have also reclassified our deferred tax liabilities of $15.9 million as of December 30, 2023, from other non-current liabilities to a separate line item in long term liabilities.

7

2.ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLES
 
Acquisition of Argos USA

On January 12, 2024, Summit completed its acquisition of all of the outstanding equity interests of Argos USA from Argos SEM LLC and Valle Cement Investments, Inc. for total consideration of approximately $3.1 billion. Summit acquired all of the outstanding equity interests of Argos USA in exchange for (i) $1.2 billion of cash (subject to customary adjustments), (ii) 54,720,000 shares of Class A Common Stock and (iii) one share of preferred stock, par value $0.01 per share, of Summit Inc. (together with the Class A Consideration, the “Stock Consideration”).

The Argos USA assets include four integrated cement plants, two grinding facilities, 140 ready-mix concrete plants, eight ports and 10 inland terminals across the East and Gulf Coast regions, with a total installed cement grinding capacity of 9.6 million tons per annum and a total import capacity of 5.4 million tons of cement per annum.

The results of Argos USA’s operations are included in these consolidated financial statements from the closing date of the Transaction. Argos USA revenues and net income included in the consolidated income statement for the period from January 12, 2024 to March 30, 2024 was $352.4 million and $18.9 million, respectively.

The following table includes unaudited pro forma financial information that presents the consolidated results of operations for the three months ended March 30, 2024 and April 1, 2023 as if the Transaction had occurred on January 1, 2023.

Q1 2024Q1 2023
Total Revenues$848,902 $835,396 
Net income attributable to Summit Inc.$(66,269)$(35,844)

The unaudited pro forma information has been calculated after adjusting the results of Argos USA for the following impacts of the Transaction, among other items:
Additional depreciation, depletion, and amortization for property, plant, and equipment and intangible assets acquired.
Interest expense adjustments to reflect the payoff of Argos USA debt obligations and new debt issued by the Company to complete the Transaction.
Elimination of royalties expenses paid to the parent of Argos USA which will not be incurred post-combination.
Elimination of historical transaction expenses of Argos USA incurred to pursue an initial public offering.

The Company incurred combination-related costs of $61.3 million in the three months ended March 30, 2024 and none for the three months ended April 1, 2023. These expenses are included in transaction and integration costs on consolidated income statement and are reflected in pro forma net income attributable to Summit Inc. for the three months ended April 1, 2023 in the table above. The pro forma results do not include any cost savings or associated costs to achieve such savings from operating efficiencies or synergies that may result from the combination.

The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of the consolidated results of operations of the Company had the combination actually occurred on January 1, 2023, nor of the results of our future operations of the combined business. The pro forma results are based on the preliminary purchase price allocation and will be updated to reflect the final amounts as the allocation is finalized during the measurement period.

Fair value of consideration transferred
Cash consideration$1,145,463 
Fair value of stock consideration issued1,973,750 
Total fair value of consideration transferred$3,119,213 

Summit Inc. issued 54,720,000 shares of common stock and calculated the fair value of stock consideration using a per share price of $36.07 on January 12, 2024, the closing date of the Transaction. The fair value of preferred stock is immaterial.

The preferred stock is non-transferable and has no economic rights or ordinary voting rights. The preferred stock was issued to ensure the Argos Parties’ voting interests are not involuntarily diluted and provides a short window to purchase shares of Class A Common Stock in the market, in certain limited circumstances, to prevent the Argos Parties voting interests from dropping below 25.01% of the total Summit common stock.

Argos USA Preliminary Purchase Price Allocation
8


The acquisition of all of the outstanding equity interests of Argos USA was accounted for in accordance with Accounting Standards Codification 805, Business Combinations. The identifiable assets acquired and liabilities assumed were recorded at their estimated preliminary acquisition date fair values. The excess purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed.

Purchase Price$3,119,213 
Asset acquired:
Cash and cash equivalents97,153 
Accounts receivable, net156,195 
Inventories95,448 
Other current assets18,178 
Intangible assets, net100,000 
Property, plant and equipment, net2,447,340 
Operating lease right of use assets55,756 
Other assets52,684 
Liabilities assumed:
Accounts payable(113,929)
Accrued expenses(73,039)
Current operating lease liabilities(7,545)
Noncurrent operating lease liabilities(48,211)
Deferred tax liabilities(263,530)
Other noncurrent liabilities(166,233)
Fair value of identifiable net assets acquired2,350,267 
Goodwill$768,946 

The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair value estimates of assets acquired and liabilities assumed are pending the completion of various items, including obtaining further information regarding the identification and valuation of all assets acquired and liabilities assumed.

Certain of the more significant balances that are not yet finalized include the valuation of property, plant and equipment, intangible assets (including goodwill), inventories, and other working capital accounts, and related income tax considerations. Accordingly, management considers the balances above to be preliminary, and there could be adjustments to the consolidated financial statements in subsequent periods, including changes to depreciation and amortization expense related to the property, plant, and equipment and intangible assets acquired and their respective useful lives, among other adjustments.

The final determination of the fair values of the assets acquired and liabilities assumed will be completed within the measurement period of up to one year from the acquisition date.

The identified intangible assets acquired include Customer Relationships and Contractual Intangible Assets, with preliminary fair values of $85.0 million and $15.0 million, respectively, and expected to be amortized over a weighted average amortization period of 3 and 8 years, respectively.

Goodwill

Goodwill recognized includes synergies expected to be achieved from the operations of the combined company, the assembled workforce of Argos USA, and intangible assets that do not qualify for separate recognition. Expected synergies include both increased revenue opportunities and the cost savings from the planned integration of platform infrastructure, facilities, personnel, and systems. The transaction is considered a non-taxable business combination and the goodwill is not deductible for tax purposes. The allocation of goodwill to the Company’s reporting units is not complete and is subject to
9

change during the measurement period. On a preliminary basis, all goodwill was assigned to the Cement reportable segment.

Intellectual Property License Agreement

In connection with the Transaction, the Company and Argos USA entered into an Intellectual Property License Agreement with the Argos Parties pursuant to which the parties will grant each other various intellectual property licenses. Certain intellectual property licenses from the Argos Parties, including the "Argos" trade name in Canada and the United States, are provided on a royalty-fee basis. The $21.4 million fair value of these acquired intangible assets was excluded from consideration transferred and recorded separately from the business combination.

Other Acquisitions

The financial results of each acquisition have been included in the Company’s consolidated results of operations beginning on 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 other acquisitions by region and period:

Three months endedYear ended
March 30, 2024December 30, 2023
West*1 3 
East* 1 
Cement*  
_______________________________________________________________________
* The combination with Argos USA affected all three reporting segments. In addition to the acquisition of all of the outstanding equity interests of Argos USA, we also acquired one aggregates-based operation in our West segment.

The purchase price allocation, primarily the valuation of property, plant and equipment, as well as considerations for contracts assumed in the acquisition, for the acquisitions completed during the three months ended March 30, 2024, as well as the acquisitions completed during 2023 that occurred after April 1, 2023, 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:

Three months endedYear ended
March 30, 2024    December 30, 2023
Financial assets$1,740 $12,747 
Inventories161 6,251 
Property, plant and equipment15,170 125,207 
Other assets333 1,085 
Financial liabilities(903)(11,973)
Other long-term liabilities(407)(802)
Net assets acquired16,094 132,515 
Goodwill36,515 108,590 
Purchase price52,609 241,105 
Other (1,597)
Net cash paid for acquisitions$52,609 $239,508 

Changes in the carrying amount of goodwill, by reportable segment, from December 30, 2023 to March 30, 2024 are summarized as follows:
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 WestEastCement
Total  
Balance—December 30, 2023$658,704 $361,501 $204,656 $1,224,861 
Acquisitions (1)36,101  768,946 805,047 
Dispositions (2) (37,938) (37,938)
Foreign currency translation adjustments(1,488)  (1,488)
Balance—March 30, 2024$693,317 $323,563 $973,602 $1,990,482 
_______________________________________________________________________
(1) Reflects goodwill from 2024 acquisitions and working capital adjustments from prior year acquisitions.
(2) Reflects goodwill derecognition from dispositions completed during 2024.

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:

 March 30, 2024December 30, 2023
 Gross
 Carrying
 Amount
Accumulated
 Amortization
Net
 Carrying
 Amount
Gross
 Carrying
 Amount
Accumulated
 Amortization
Net
 Carrying
 Amount
Operating permits$38,677 $(6,089)$32,588 $38,677 $(5,691)$32,986 
Mineral leases17,375 (7,498)9,877 17,778 (7,676)10,102 
Reserve rights25,586 (5,226)20,360 25,586 (5,020)20,566 
Intellectual property21,400 (2,339)19,061    
Other104,884 (7,183)97,701 5,012 (585)4,427 
Total intangible assets$207,922 $(28,335)$179,587 $87,053 $(18,972)$68,081 
 
Amortization expense totaled $9.2 million and $0.9 million for the three months ended March 30, 2024 and April 1, 2023, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to March 30, 2024 is as follows:

2024 (nine months)$33,705 
202544,713 
202634,345 
20276,629 
20285,707 
20294,999 
Thereafter49,489 
Total$179,587 
During the first quarter of 2024, we sold two businesses in the East segment, resulting in total proceeds of $76.0 million and a net gain on disposition of $15.0 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 months ended March 30, 2024 and April 1, 2023 is as follows:
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 Three months ended
 March 30, 2024April 1, 2023
Revenue by product*:  
Aggregates$145,511 $143,653 
Cement224,097 49,013 
Ready-mix concrete312,047 138,778 
Asphalt27,985 26,635 
Paving and related services40,922 27,184 
Other54,453 50,125 
Total revenue$805,015 $435,388 
*Revenue from liquid asphalt terminals is included in asphalt revenue.
 
Accounts receivable, net consisted of the following as of March 30, 2024 and December 30, 2023: 
 March 30, 2024December 30, 2023
Trade accounts receivable$441,049 $228,697 
Construction contract receivables15,110 51,567 
Retention receivables10,649 13,541 
Receivables from related parties518  
Accounts receivable467,326 293,805 
Less: Allowance for doubtful accounts(12,676)(6,553)
Accounts receivable, net$454,650 $287,252 
 
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 March 30, 2024 and December 30, 2023: 
 March 30, 2024December 30, 2023
Aggregate stockpiles$172,593 $165,272 
Finished goods85,921 43,122 
Work in process22,507 10,702 
Raw materials57,480 22,254 
Total$338,501 $241,350 

5.ACCRUED EXPENSES
 
Accrued expenses consisted of the following as of March 30, 2024 and December 30, 2023:
 March 30, 2024December 30, 2023
Interest$43,210 $27,593 
Payroll and benefits29,616 63,888 
Finance lease obligations4,698 4,020 
Insurance34,653 25,277 
Current portion of accrued taxes and TRA liability23,317 11,042 
Deferred asset purchase payments7,269 5,903 
Professional fees6,580 2,036 
Other (1)42,433 31,932 
Total$191,776 $171,691 
(1)Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.
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6.DEBT
 
Debt consisted of the following as of March 30, 2024 and December 30, 2023: 
 March 30, 2024December 30, 2023
Term Loan, due 2029:  
$1,010.0 million and $504.5 million, net of $2.4 million and $4.0 million discount at March 30, 2024 and December 30, 2023, respectively
$1,007,601 $500,473 
612% Senior Notes, due 2027
300,000 300,000 
514% Senior Notes, due 2029
700,000 700,000 
           714% Senior Notes, due 2031
800,000 800,000 
Total2,807,601 2,300,473 
Current portion of long-term debt7,575 3,822 
Long-term debt$2,800,026 $2,296,651 
 
The contractual payments of long-term debt, including current maturities, for the five years subsequent to March 30, 2024, are as follows:

2024 (nine months)$5,050 
202512,625 
202610,100 
2027310,100 
202810,100 
20291,662,025 
Thereafter800,000 
Total2,810,000 
Less: Original issue net discount(2,399)
Less: Deferred financing costs(27,317)
Total debt$2,780,284 
 
Senior Notes— On December 14, 2023, Summit LLC and Summit Finance (together, the “Issuers”) issued $800.0 million in aggregate principal amount of 7.250% senior notes due January 15, 2031 (the “2031 Notes”). The 2031 Notes were issued at 100.0% of their par value with proceeds of $788.3 million, net of related fees and expenses. The 2031 Notes were issued under an indenture dated as of December 14, 2023 (the "2031 Notes Indenture"). The 2031 Notes 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 2031 Notes Indenture also contains customary events of default. The gross proceeds of the 2031 Notes were held in escrow as of December 30, 2023 as the proceeds were restricted to use for the cash consideration for the Transaction. The proceeds were released upon closing of the Transaction on January 12, 2024. Interest on the 2031 Notes is payable semi-annually on January 15 and July 15 of each year commencing on July 15, 2024.

On August 11, 2020, 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 terms of which are generally consistent with the 2031 Notes Indenture. 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 2031 Notes Indenture. Interest on the 2027 Notes is payable semi-annually on March 15 and September 15 of each year commencing on September 15, 2019.

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As of March 30, 2024 and December 30, 2023, the Company was in compliance with all covenants under the applicable indentures.
 
Senior Secured Credit Facilities

On January 12, 2024, Summit Materials, LLC entered into Amendment No. 7 to the credit agreement governing the Senior Secured Credit Facilities (the “Credit Agreement”), which among other things:

(1) established new term loans in an aggregate principal amount of $1.010 billion (the "Term Loan Facility") bearing interest, at Summit LLC’s option, based on either the base rate or Term SOFR rate and an applicable margin of (i) 1.50% per annum with respect to base rate borrowings and a floor of 1.00% per annum or (ii) 2.50% per annum with respect to Term SOFR borrowings and a floor of zero, resulting in a current interest rate as of March 30, 2024 of 7.83%. Amendment No. 7 also extended the maturity date for the Term Loan Facility to January 12, 2029. In addition, the new term loan is subject to a 1.00% prepayment premium in respect of any principal amount repaid in connection with certain repricing transactions occurring within six months following the Amendment No. 7 Effective Date and requires quarterly amortization payments of 0.25% of the principal amount of the Term Loan Facility on the Amendment No. 7 effective date and due on the last business day or each March, June, September and December, commencing with the June 2024 payment. The proceeds of the new term loans were used to (i) fund a portion of the cash consideration in connection with the closing of the Transaction, (ii) refinance the $504.5 million prior term loans outstanding, resulting in charges of $5.5 million which were recognized for the three months ended March 30, 2024, which included charges of $4.0 million for the write-off of original issue discount and $1.5 million for the write-off of deferred financing fees and (iii) pay fees, commissions and expenses in connection with the foregoing;

(2) in respect of the revolving credit facility thereunder (the “Revolving Credit Facility”), (a) increased the total aggregate commitments under the Revolving Credit Facility from $395.0 million to $625.0 million and (b) reduced the applicable margin (with no leverage-based step downs) to (i) 1.50% per annum with respect to base rate borrowings and a floor of 1.00% per annum or (ii) 2.50% per annum with respect to Term SOFR borrowings and a floor of zero; and

(3) modified certain covenants to provide greater flexibility for Summit LLC under the Credit Agreement.

The revolving credit facility matures on January 10, 2028, provided that if more than $125 million of the 2027 Notes are outstanding as of December 14, 2026, then the maturity date of the revolving credit facility will be December 14, 2026. There were no outstanding borrowings under the revolving credit facility as of March 30, 2024 and December 30, 2023, with borrowing capacity of $604.1 million remaining as of March 30, 2024, which is net of $20.9 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. In connection with the combination with Argos USA described above, Summit assumed a letter of credit related to Argos USA's workers compensation claims and insurance liabilities equal to $11.4 million which expires August 2024.
 
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 March 30, 2024 and December 30, 2023, 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 including a real property exception, for the Senior Secured Credit Facilities.

In September 2023, in connection with our agreement to acquire all of the outstanding equity interests of Argos USA, we obtained a $1.3 billion 364-day term loan bridge facility commitment from various financial institutions. The term loan bridge facility expired unused upon the closing of the Transaction in January 2024.
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The following table presents the activity for the deferred financing fees for the three months ended March 30, 2024 and April 1, 2023:
 Deferred financing fees
Balance—December 30, 2023$14,463 
Loan origination fees17,550 
Amortization(1,550)
Write off of deferred financing fees(1,462)
Balance—March 30, 2024$29,001 
 
 
Balance—December 31, 2022$11,489 
Loan origination fees1,566 
Amortization(616)
Write off of deferred financing fees(160)
Balance—April 1, 2023$12,279 

Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC Bank Canada, which was amended on November 30, 2020, 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 0.20% and (iii) $1.5 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary and (iv) $10.0 million CAD revolving foreign exchange facility available to purchase foreign exchange forward contracts. There were no amounts outstanding under this agreement as of March 30, 2024 or December 30, 2023, 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 benefit was $11.1 million and $6.5 million in the three months ended March 30, 2024 and April 1, 2023, respectively. The effective tax rate for Summit Inc. differs from the federal statutory tax rate primarily due to (1) basis differences in assets divested, (2) tax depletion expense in excess of the expense recorded under U.S. GAAP, (3) state taxes, (4) various other items such as limitations on meals and entertainment, certain stock compensation, non-deductible compensation paid to covered employees, and other costs.
  
As of each of March 30, 2024 and December 30, 2023, Summit Inc. had a valuation allowance of $1.1 million, 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 months ended March 30, 2024 and April 1, 2023.

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 three months ended March 30, 2024, all of the remaining 763,243 LP Units were acquired by Summit Inc. in exchange for an equal number of newly-issued shares of Summit Inc.’s Class A common stock and the Company recorded an increase in the TRA liability of approximately $6.7 million related to the exchanges.

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
15

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 tax rate in New York, New York. No tax distributions were made by Summit Holdings in the three months ended March 30, 2024.

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
 March 30, 2024April 1, 2023
Net loss attributable to Summit Inc.$(66,866)$(30,804)
Weighted average shares of Class A stock outstanding167,446,041 118,564,556 
Add: Nonvested restricted stock awards of retirement eligible shares65,534 115,100 
Weighted average shares outstanding167,511,575 118,679,656 
Basic loss per share$(0.40)$(0.26)
Diluted net loss attributable to Summit Inc.$(66,866)$(30,804)
Weighted average shares outstanding167,511,575 118,679,656 
Add: weighted average of LP Units  
Add: stock options  
Add: warrants  
Add: restricted stock units  
Add: performance stock units  
Weighted average dilutive shares outstanding167,511,575 118,679,656 
Diluted loss per share$(0.40)$(0.26)
 
Excluded from the above calculations were the shares noted below as they were antidilutive:
 Three months ended
 March 30, 2024April 1, 2023
Antidilutive shares:  
LP Units511,565 1,311,257 
Time-vesting stock options239,429 279,680 
Warrants31,519 31,519 
Time-vesting restricted stock units1,186,426 1,051,844 
Market-based restricted stock units550,165