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 and 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. Yes ☒ No ☐

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). Yes ☒ No ☐

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:

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). Yes ☐ No ☒

As of ~~July 31, 2019, 68,504,717~~April 30, 2020, 68,836,430 shares of common stock, par value $0.01 per share, of the registrant were outstanding.

										March 31,			September 30,			March 31,
	June 30,			September 30,			June 30,			2020			2019			2019
	2019			2018			2018			(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	27,729		$	129,927		$	27,551		$	781,172		$	72,287		$	645
Accounts receivable, less allowance of $24,732, $17,584 and $13,963 as of June 30, 2019, September 30, 2018 and June 30, 2018, respectively		1,079,091			1,090,533			1,077,888
Accounts receivable, less allowance of $16,003, $13,095 and $23,058 as of March 31, 2020, September 30, 2019 and March 31, 2019, respectively											907,539			1,108,134			869,760
Inventories, net		1,124,063			936,047			1,165,389			1,037,905			1,018,183			1,031,183
Prepaid expenses and other current assets		361,831			244,360			337,589			305,367			315,643			332,100
Total current assets		2,592,714			2,400,867			2,608,417			3,031,983			2,514,247			2,233,688
Property and equipment, net		269,041			280,407			288,708			247,372			260,376			271,022
Goodwill		2,490,940			2,491,779			2,321,180			2,488,635			2,490,590			2,490,326
Intangibles, net		1,177,694			1,334,366			1,371,005			889,983			1,125,540			1,229,949
Operating lease assets											452,006			-			-
Other assets, net		1,243			1,243			1,511			10			2,059			1,243
Total assets	$	6,531,632		$	6,508,662		$	6,590,821		$	7,109,989		$	6,392,812		$	6,226,228

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	643,411		$	880,872		$	719,686		$	643,086		$	822,931		$	510,434
Accrued expenses		590,756			611,539			520,952			362,817			599,155			453,889
Current operating lease liabilities											98,477			-			-
Current portions of long-term debt/obligations		19,366			19,661			19,714			13,412			18,689			19,988
Total current liabilities		1,253,533			1,512,072			1,260,352			1,117,792			1,440,775			984,311
Borrowings under revolving lines of credit, net		424,011			92,442			482,489			1,001,609			80,961			416,614
Long-term debt, net		2,494,648			2,494,725			2,494,308			2,494,821			2,494,623			2,494,673
Deferred income taxes, net		110,180			106,994			93,928			50,365			103,913			110,064
Long-term obligations under equipment financing and other, net		6,332			13,639			15,979
Non-current operating lease liabilities											349,365			-			-
Long-term obligations under equipment financing, net											963			4,609			8,527
Other long-term liabilities		5,352			5,290			6,319			1,671			6,383			5,702
Total liabilities		4,294,056			4,225,162			4,353,375			5,016,586			4,131,264			4,019,891

Commitments and contingencies (Note 9)

Convertible preferred stock; $0.01 par value; aggregate liquidation preference $400,000; 400,000 shares authorized, issued and outstanding as of June 30, 2019, September 30, 2018 and June 30, 2018		399,195			399,195			399,195
Convertible Preferred Stock; $0.01 par value; aggregate liquidation preference $400,000; 400,000 shares authorized, issued and outstanding as of March 31, 2020, September 30, 2019 and March 31, 2019¹											399,195			399,195			399,195

Stockholders' equity:
Common stock (voting); $0.01 par value; 100,000,000 shares authorized; 68,480,751, 68,135,790 and 68,105,113 shares issued and outstanding as of June 30, 2019, September 30, 2018 and June 30, 2018, respectively		684			681			681
Undesignated preferred stock; 5,000,000 shares authorized, none issued or outstanding		-			-			-
Common stock (voting); $0.01 par value; 100,000,000 shares authorized; 68,836,258, 68,574,176 and 68,475,871 shares issued and outstanding as of March 31, 2020, September 30, 2019 and March 31, 2019, respectively											688			685			684
Undesignated preferred stock; 5,000,000 shares authorized, NaN issued or outstanding											-			-			-
Additional paid-in capital		1,077,953			1,067,040			1,063,137			1,091,469			1,083,042			1,073,243
Retained earnings		777,842			833,834			792,502			641,172			799,222			752,855
Accumulated other comprehensive income (loss)		(18,098	)		(17,250	)		(18,069	)		(39,121	)		(20,596	)		(19,640	)
Total stockholders' equity		1,838,381			1,884,305			1,838,251			1,694,208			1,862,353			1,807,142
Total liabilities and stockholders' equity	$	6,531,632		$	6,508,662		$	6,590,821		$	7,109,989		$	6,392,812		$	6,226,228

	Three Months Ended June 30,				Nine Months Ended June 30,						Three Months Ended March 31,						Six Months Ended March 31,
	2019		2018		2019			2018			2020			2019			2020			2019
Net sales	$	1,924,534	$	1,934,951	$	5,075,247		$	4,482,555		$	1,458,486		$	1,429,037		$	3,133,598		$	3,150,713
Cost of products sold		1,451,998		1,441,057		3,832,154			3,380,531			1,116,086			1,094,049			2,380,500			2,380,156
Gross profit		472,536		493,894		1,243,093			1,102,024			342,400			334,988			753,098			770,557
Operating expense:
Selling, general and administrative		328,827		323,194		976,928			858,534			318,510			320,408			645,429			648,101
Depreciation		17,731		15,811		52,779			41,640			17,495			17,447			36,567			35,048
Amortization		51,724		50,076		155,508			105,339
Amortization¹												187,356			51,763			232,134			103,784
Total operating expense		398,282		389,081		1,185,215			1,005,513			523,361			389,618			914,130			786,933
Income (loss) from operations		74,254		104,813		57,878			96,511			(180,961	)		(54,630	)		(161,032	)		(16,376	)
Interest expense, financing costs, and other		38,089		37,348		116,902			99,486
Interest expense, financing costs, and other²												23,454			40,452			61,747			78,813
Loss on debt extinguishment												-			-			14,678			-
Income (loss) before provision for income taxes		36,165		67,465		(59,024	)		(2,975	)		(204,415	)		(95,082	)		(237,457	)		(95,189	)
Provision for (benefit from) income taxes¹		5,178		18,090		(21,032	)		(53,291	)
Provision for (benefit from) income taxes												(81,775	)		(26,996	)		(91,407	)		(26,210	)
Net income (loss)	$	30,987	$	49,375	$	(37,992	)	$	50,316		$	(122,640	)	$	(68,086	)	$	(146,050	)	$	(68,979	)
Dividends on preferred shares²		6,000		6,000		18,000			12,000
Dividends on Preferred Stock³												6,000			6,000			12,000			12,000
Net income (loss) attributable to common shareholders	$	24,987	$	43,375	$	(55,992	)	$	38,316		$	(128,640	)	$	(74,086	)	$	(158,050	)	$	(80,979	)

Weighted-average common stock outstanding:
Basic		68,477,946		68,086,387		68,391,882			67,976,980			68,820,155			68,451,920			68,743,633			68,348,850
Diluted		69,265,384		69,148,143		68,391,882			69,240,040
Diluted⁴												68,820,155			68,451,920			68,743,633			68,348,850

Net income (loss) per share³:
Net income (loss) per share⁵:
Basic	$	0.32	$	0.56	$	(0.82	)	$	0.52		$	(1.87	)	$	(1.08	)	$	(2.30	)	$	(1.18	)
Diluted	$	0.32	$	0.55	$	(0.82	)	$	0.51		$	(1.87	)	$	(1.08	)	$	(2.30	)	$	(1.18	)

	Three Months Ended June 30,					Nine Months Ended June 30,						Three Months Ended March 31,						Six Months Ended March 31,
	2019		2018			2019			2018			2020			2019			2020			2019
Net income (loss)	$	30,987	$	49,375		$	(37,992	)	$	50,316		$	(122,640	)	$	(68,086	)	$	(146,050	)	$	(68,979	)
Other comprehensive income (loss):
Foreign currency translation adjustment		1,542		(1,535	)		(848	)		(3,506	)		(6,456	)		1,520			(5,168	)		(2,390	)
Unrealized gain (loss) due to change in fair value of derivatives, net of tax													(15,886	)		-			(13,357	)		-
Total other comprehensive income (loss)		1,542		(1,535	)		(848	)		(3,506	)		(22,342	)		1,520			(18,525	)		(2,390	)
Comprehensive income (loss)	$	32,529	$	47,840		$	(38,840	)	$	46,810		$	(144,982	)	$	(66,566	)	$	(164,575	)	$	(71,369	)

											Accumulated																Accumulated
					Additional						Other			Total							Additional						Other			Total
	Common Stock				Paid-in			Retained			Comprehensive			Stockholders'			Common Stock				Paid-in			Retained			Comprehensive			Stockholders'
	Shares		Amount		Capital			Earnings			Income (Loss)			Equity			Shares		Amount		Capital			Earnings			Income (Loss)			Equity
Three Months Ended June 30, 2018
Balance as of March 31, 2018		68,043,284	$	680	$	1,056,248		$	743,127		$	(16,534	)	$	1,783,521
Issuance of common stock, net of shares withheld for taxes		61,829		1		1,591			-			-			1,592
Issuance costs related to secondary offering of common stock		-		-		-			-			-			-
Stock-based compensation		-		-		5,298			-			-			5,298
Other comprehensive income (loss)		-		-		-			-			(1,535	)		(1,535	)
Net income (loss)		-		-		-			49,375			-			49,375
Dividends on preferred shares¹		-		-		-			-			-			-
Balance as of June 30, 2018		68,105,113	$	681	$	1,063,137		$	792,502		$	(18,069	)	$	1,838,251

Three Months Ended June 30, 2019
Balance as of March 31, 2019		68,475,871	$	684	$	1,073,243		$	752,855		$	(19,640	)	$	1,807,142
Three Months Ended March 31, 2019
Balance as of December 31, 2018																		68,432,707	$	684	$	1,067,711		$	826,941		$	(21,160	)	$	1,874,176
Issuance of common stock, net of shares withheld for taxes		4,880		-		73			-			-			73			43,164		-		725			-			-			725
Stock-based compensation		-		-		4,637			-			-			4,637			-		-		4,807			-			-			4,807
Other comprehensive income (loss)		-		-		-			-			1,542			1,542			-		-		-			-			1,520			1,520
Net income (loss)		-		-		-			30,987			-			30,987			-		-		-			(68,086	)		-			(68,086	)
Dividends on preferred shares¹		-		-		-			(6,000	)		-			(6,000	)
Balance as of June 30, 2019		68,480,751	$	684	$	1,077,953		$	777,842		$	(18,098	)	$	1,838,381
Dividends on Preferred Stock¹																		-		-		-			(6,000	)		-			(6,000	)
Balance as of March 31, 2019																		68,475,871	$	684	$	1,073,243		$	752,855		$	(19,640	)	$	1,807,142


Nine Months Ended June 30, 2018
Balance as of September 30, 2017		67,700,858	$	677	$	1,047,506		$	748,186		$	(14,563	)	$	1,781,806
Three Months Ended March 31, 2020
Balance as of December 31, 2019																		68,760,731	$	687	$	1,086,970		$	769,812		$	(16,779	)	$	1,840,690
Issuance of common stock, net of shares withheld for taxes		404,255		4		2,972			-			-			2,976			75,527		1		(162	)		-			-			(161	)
Issuance costs related to secondary offering of common stock		-		-		(474	)		-			-			(474	)
Stock-based compensation		-		-		13,133			-			-			13,133			-		-		4,661			-			-			4,661
Other comprehensive income (loss)		-		-		-			-			(3,506	)		(3,506	)		-		-		-			-			(22,342	)		(22,342	)
Net income (loss)		-		-		-			50,316			-			50,316			-		-		-			(122,640	)		-			(122,640	)
Dividends on preferred shares¹		-		-		-			(6,000	)		-			(6,000	)
Balance as of June 30, 2018		68,105,113	$	681	$	1,063,137		$	792,502		$	(18,069	)	$	1,838,251
Dividends on Preferred Stock¹																		-		-		-			(6,000	)		-			(6,000	)
Balance as of March 31, 2020																		68,836,258	$	688	$	1,091,469		$	641,172		$	(39,121	)	$	1,694,208

Nine Months Ended June 30, 2019

Six Months Ended March 31, 2019
Balance as of September 30, 2018		68,135,790	$	681	$	1,067,040		$	833,834		$	(17,250	)	$	1,884,305			68,135,790	$	681	$	1,067,040		$	833,834		$	(17,250	)	$	1,884,305
Issuance of common stock, net of shares withheld for taxes		344,961		3		(1,988	)		-			-			(1,985	)		340,081		3		(2,061	)		-			-			(2,058	)
Stock-based compensation		-		-		12,901			-			-			12,901			-		-		8,264			-			-			8,264
Other comprehensive income (loss)		-		-		-			-			(848	)		(848	)		-		-		-			-			(2,390	)		(2,390	)
Net income (loss)		-		-		-			(37,992	)		-			(37,992	)		-		-		-			(68,979	)		-			(68,979	)
Dividends on preferred shares¹		-		-		-			(18,000	)		-			(18,000	)
Balance as of June 30, 2019		68,480,751	$	684	$	1,077,953		$	777,842		$	(18,098	)	$	1,838,381
Dividends on Preferred Stock¹																		-		-		-			(12,000	)		-			(12,000	)
Balance as of March 31, 2019																		68,475,871	$	684	$	1,073,243		$	752,855		$	(19,640	)	$	1,807,142

Six Months Ended March 31, 2020
Balance as of September 30, 2019																		68,574,176	$	685	$	1,083,042		$	799,222		$	(20,596	)	$	1,862,353
Issuance of common stock, net of shares withheld for taxes																		262,082		3		(1,390	)		-			-			(1,387	)
Stock-based compensation																		-		-		9,817			-			-			9,817
Other comprehensive income (loss)																		-		-		-			-			(18,525	)		(18,525	)
Net income (loss)																		-		-		-			(146,050	)		-			(146,050	)
Dividends on Preferred Stock¹																		-		-		-			(12,000	)		-			(12,000	)
Balance as of March 31, 2020																		68,836,258	$	688	$	1,091,469		$	641,172		$	(39,121	)	$	1,694,208

	Nine Months Ended June 30,						Six Months Ended March 31,
	2019			2018			2020			2019
Operating Activities
Net income (loss)	$	(37,992	)	$	50,316		$	(146,050	)	$	(68,979	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		208,287			146,979			268,701			138,832
Stock-based compensation		12,901			13,133			9,817			8,264
Certain interest expense and other financing costs		9,077			11,549			5,721			6,051
Beneficial lease amortization		1,714			-			-			1,145
Loss on debt extinguishment		-			1,726			14,678			-
Gain on sale of fixed assets		(3,470	)		(1,131	)		(884	)		(1,172	)
Deferred income taxes		3,195			(48,855	)		(49,320	)		3,086
Changes in operating assets and liabilities, net of the effects of businesses acquired in the period:
338(h)(10) election refund¹								(5,282	)		-
Changes in operating assets and liabilities:
Accounts receivable		10,970			(52,024	)		199,063			219,740
Inventories		(188,213	)		(299,881	)		(21,819	)		(96,052	)
Prepaid expenses and other assets		(117,520	)		(19,511	)
Prepaid expenses and other current assets								6,527			(85,320	)
Accounts payable and accrued expenses		(93,908	)		195,948			(434,926	)		(368,154	)
Other liabilities		62			732
Other assets and liabilities								2,950			415
Net cash provided by (used in) operating activities		(194,897	)		(1,019	)		(150,824	)		(242,144	)

Investing Activities
Purchases of property and equipment		(44,337	)		(34,978	)		(25,064	)		(26,320	)
Acquisition of businesses, net		(163,973	)		(2,715,429	)		-			(163,973	)
Proceeds from the sale of assets		6,200			750			1,122			1,428
Net cash provided by (used in) investing activities		(202,110	)		(2,749,657	)		(23,942	)		(188,865	)

Financing Activities
Borrowings under revolving lines of credit		1,734,476			2,122,949			2,029,316			1,880,684
Repayments under revolving lines of credit		(1,404,836	)		(1,631,978	)
Borrowings under term loan		-			970,000
Repayments under term loan		(7,275	)		(443,425	)
Payments under revolving lines of credit								(1,109,903	)		(1,557,615	)
Payments under term loan								(4,850	)		(4,850	)
Borrowings under senior notes		-			1,300,000			300,000			-
Payment under senior notes								(309,564	)		-
Payment of debt issuance costs		-			(65,788	)		(3,718	)		-
Repayments under equipment financing facilities and other		(7,602	)		(8,604	)
Proceeds from issuance of convertible preferred stock		-			400,000
Payment of stock issuance costs		-			(1,279	)
Payment of dividends on preferred stock		(18,000	)		(6,000	)
Payments under equipment financing facilities and finance leases								(4,427	)		(2,642	)
Payment of dividends on Preferred Stock								(12,000	)		(12,000	)
Proceeds from issuance of common stock related to equity awards		1,654			6,950			1,447			1,559
Taxes paid related to net share settlement of equity awards		(3,639	)		(3,975	)
Payment of taxes related to net share settlement of equity awards								(2,834	)		(3,617	)
Net cash provided by (used in) financing activities		294,778			2,638,850			883,467			301,519

Effect of exchange rate changes on cash and cash equivalents		31			1,127			184			208

Net increase (decrease) in cash and cash equivalents		(102,198	)		(110,699	)		708,885			(129,282	)
Cash and cash equivalents, beginning of period		129,927			138,250			72,287			129,927
Cash and cash equivalents, end of period	$	27,729		$	27,551		$	781,172		$	645

Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	138,686		$	91,662		$	63,700		$	77,336
Income taxes paid (received), net of refunds		(8,784	)		33,751			(441	)		(11,073	)

Beacon Roofing Supply, Inc. ~~(the~~(“Beacon” or the “Company”) was incorporated in the state of Delaware on August 22, 1997 and is the largest publicly traded distributor of ~~residential and non-residential~~ roofing materials and complementary building products in the United States and Canada.

On January ~~2, 2018,~~15, 2020, the Company ~~completed~~announced the ~~acquisition~~rebranding of ~~all~~its exterior product branches with the ~~outstanding capital stock~~trade name “Beacon Building Products” (the “Rebranding”). The new name, and a related logo, will be adopted at over 450 Beacon one-step exterior products branches. The Company’s interior, insulation, weatherproofing and two-step branches will continue to operate under current brand names.

As of Allied Building Products Corp. (“Allied”), a New Jersey corporation, for $2.625 billion, subject to certain working capital and other adjustments. Allied engages in the distribution of roofing materials, drywall, ceiling tile, and related accessories in the United States and was a wholly-owned subsidiary of Oldcastle Distribution, Inc. (see Note 3 for further discussion).

~~The Company operates its business under regional and local trade names and, as of June 30, 2019,~~March 31, 2020, the Company ~~serviced customers in~~operated 528 branches throughout all 50 states ~~within~~in the ~~United States~~U.S. and 6 provinces in Canada. The Company’s material subsidiaries are Beacon Sales Acquisition, Inc. and Beacon Roofing Supply Canada Company.

The Company prepared the condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the requirements of the Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current period presentation. The balance sheet as of ~~June 30, 2018~~March 31, 2019 has been presented for a better understanding of the impact of seasonal fluctuations on the Company’s financial condition.

In management’s opinion, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. The results for the three and ~~nine~~six months ended ~~June 30, 2019~~March 31, 2020 are not necessarily indicative of the results to be expected for the twelve months ending September 30, ~~2019~~2020 (“fiscal year ~~2019”~~2020” or ~~“2019”~~“2020”).

The three-month periods ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018 each~~ had 64 and 63 business days, respectively. The ~~and the nine-month~~six-month periods ended ~~June 30,~~March 31, 2020 and 2019 had 126 and ~~2018~~ ~~each had 189~~125 business days,. respectively.

These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the Company’s fiscal year ~~2018~~2019 (“~~2018”~~2019”) Annual Report on Form 10-K for the year ended September 30, ~~2018.~~2019.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Significant items subject to such estimates include accounts receivable, inventories, purchase price allocations, goodwill and intangibles, and income taxes. ~~Actual~~Assumptions made in the development of these estimates contemplate the impact of the novel coronavirus (“COVID‑19”) on the economy and our anticipated results; however, actual amounts could differ from ~~those~~these estimates.

~~In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers~~.” This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most previously issued revenue recognition guidance. The new standard is effective for public business entities for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017. The standard permits the use of either the full retrospective or modified retrospective adoption methods. The Company elected the modified retrospective method and adopted the standard as of October 1, 2018 utilizing the portfolio practical expedient. The adoption of this guidance did not impact the Company’s retained earnings and did not have a material impact on the Company’s net sales recognition practices, income from operations, or net income per share amounts. The adoption of this guidance did result in certain balance sheet reclassifications to record estimated customer returns, specifically the recognition of a current liability for the gross amount of estimated returns and a current asset for the value of the related products. These reclassifications did not have a material impact on the Company’s consolidated balance sheet as of June 30, 2019. In addition, the adoption of this guidance resulted in additional quantitative disclosures

~~to disaggregate net sales balances by product line and geography. See Note 4 to the Consolidated Financial Statements for further discussion.~~

~~In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business.”~~ This guidance is intended to assist entities when evaluating when a set of transferred assets and activities constitutes a business. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017. The Company adopted the standard as of October 1, 2018 and the standard did not have a material impact on the Company’s financial statement and related disclosures.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~“Scope of Modification Accounting.”~~ This guidance is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2017. The Company adopted the standard as of October 1, 2018 and the standard did not have a material impact on the Company’s financial statement and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” This guidance ~~will replace~~replaces most existing accounting for ~~lease guidance when it becomes effective. This new standard is effective using the modified retrospective approach for annual reporting periods,~~leases and interim reporting periods contained therein, beginning after December 15, 2018, and early adoption is permitted. In July 2018, the FASB amended the new lease standard which, among other changes, allows a company to elect to adopt ASU 2016-02 using a transition option whereby a cumulative effect adjustment is recorded to the opening balance of its retained earnings on the adoption date.requires enhanced disclosures. The guidance ~~will require~~requires the Company to record a ~~right of use~~right-of-use asset and a lease liability for most of the Company’s leases, including those ~~currently~~previously treated as operating leases. The Company ~~will adopt~~adopted the standard using the modified retrospective transition method as of October 1, 2019 and will ~~use~~not apply the standard to comparative prior periods presented. The Company used the package of transition practical expedients outlined in the transition guidance. The ~~scope~~most significant effects of the ~~overall~~new standard were the recognition of $483.5 million of operating lease assets and $476.0 million of operating lease liabilities on October 1, 2019. As part of the adoption, the Company carried forward the assessment from the previous lease standard of whether Beacon’s contracts contain (or are) leases, the classification of leases, and remaining lease terms. The accounting for finance leases remains unchanged. The adoption of the new standard did not have a material impact on the Company’s consolidated results of operations or cash flows. See Note 8 for further discussion.

In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income.” This guidance is intended to address the accounting treatment for the tax effects on items within accumulated other comprehensive income as a result

of the adoption of the Tax Cuts and Jobs Act of 2017. This new standard became effective for the Company on October 1, 2019. The adoption of this new guidance did not have a material impact on the Company’s financial statements and related ~~disclosures is still being quantified.~~disclosures.

In June 2016, the FASB issued ASU 2016-13, “Financial ~~Instruments –~~ Instruments—Credit Losses: Measurement of Credit Losses on Financial ~~Instruments.~~Instruments.” This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Accounting for Goodwill Impairment.” This guidance is intended to introduce a simplified approach to measurement of goodwill impairment, eliminating the need for a hypothetical purchase price allocation and instead measuring impairment by the amount a reporting unit’s carrying value exceeds its fair value. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of this new guidance to have a material impact on its financial statements and related disclosures.

In ~~February 2018,~~December 2019, the FASB issued ASU ~~2018-02,~~2019-12, “Income ~~Statement~~Taxes – ~~Reporting Comprehensive Income.~~Simplifying the Accounting for Income Taxes.” This guidance is intended to ~~address~~simplify the accounting ~~treatment~~ for ~~the tax effects on items within accumulated other comprehensive~~ income ~~as a result~~taxes by removing certain exceptions, clarifying existing guidance and improving consistent application of the ~~adoption of the Tax Cuts and Jobs Act of 2017.~~guidance. This new standard is effective for annual reporting periods, and interim reporting periods contained therein, beginning after December 15, ~~2018,~~2020, and early adoption is permitted. The Company ~~does not expect~~is currently evaluating the ~~adoption of~~impact that this ~~new~~ guidance tomay have ~~a material impact~~ on its financial statements and related disclosures.

~~On January 2, 2018 (the “Closing Date”)~~In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional practical expedients to ease the potential burden in accounting for contract modifications and hedge accounting related to reference rate reform. The standard is effective as of March 12, 2020 through December 31, 2022. However, the standard is not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The Company ~~completed its acquisition of all~~expects to elect optional expedients and exceptions provided by the outstanding capital stock of Allied (the “Allied Acquisition”), pursuant to a certain stock purchase agreement dated August 24, 2017 (the “Stock Purchase Agreement”), among the Company, Oldcastle, Inc.,guidance, as parent, and Oldcastle Distribution, Inc., as seller, for approximately $2.625 billion in cash, subject to a working capital and certain other adjustments as set forth in the Stock Purchase Agreement (the “Purchase Price”). As of June 30, 2019, the adjusted Purchase Price for Allied was $2.88 billion, including increases of (i) $164.0 millionneeded, related to the ~~impact~~2023 ABL and 2025 Term Loan debt instruments, both of ~~the Section 338(h)(10) election under the current U.S. tax code and (ii) $88.1 million from a recorded net working capital adjustment.~~

In connection with the Allied Acquisition, on the Closing Date the Company entered into (i) a new term loan agreement with Citibank, N.A., providing for a term loan B facility with an initial commitment of $970.0 million and (ii) an amended and restated credit agreement with Wells Fargo Bank, N.A., providing for a senior secured asset-based revolving credit facility with an initial commitment of $1.30 billion. Base borrowingwhich include interest rates ~~on these facilities are at LIBOR plus 1.25% and LIBOR plus 2.25%, respectively.~~

In connection with the Allied Acquisition, on the Closing Date, the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P., pursuant to a certain investment agreement, dated as of August 24, 2017, with CD&R Boulder Holdings, L.P. and Clayton, Dubilier & Rice Fund IX, L.P. (solely for the purpose of limited provisions therein) (the “Convertible Preferred Stock Purchase”). The $400.0 million in proceeds from the Convertible Preferred Stock Purchase were used to finance, in part, the Purchase Price. The Preferred Stock is convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company’s common stock will be at a conversion price of $41.26 per share. The Preferred Stock accumulates dividends at a rate of 6.0% per annum (payable in cash or in-kind, subject to certain conditions). The Preferred Stock is not mandatorily redeemable; therefore, it is classified as mezzanine equity on the Company’s consolidated balance sheets and has a balance of $399.2 million (the $400.0 million proceeds received on the Closing Date, net of $0.8 million of unamortized issuance costs) as of June 30, 2019.

Allied’s results of operations have been included with Company’s consolidated results beginning January 2, 2018. Allied distributed products in 208 locations across 31 states as of the date of the close.

~~The Allied Acquisition has been accounted for as a business combination in accordance with the requirements of ASC 805, “Business Combinations.” The acquisition price has been allocated among assets acquired and liabilities assumed at fair value~~ based on ~~information currently available, with the excess recorded as goodwill.~~a LIBOR rate (with a floor) plus a fixed spread. The ~~goodwill recognized is attributable primarily to expected synergies from the Allied assembled workforce operating the branches as part of a larger network~~Company will evaluate and the value stemming from the addition of both new customers and an established new line of business (interiors). As of March 31, 2019, the Company had finalized the purchase accounting entries for the Allied Acquisition, detailed as follows (in thousands):

~~The purchase accounting entries above include~~disclose the impact of ~~the Section 338(h)(10) election under the current U.S. tax code. The Company made~~ this ~~election on October 15, 2018 and has reflected the $164.0 million impact of this election~~guidance in the ~~purchase price and its fiscal year 2018 tax provision accordingly. The Company determined that $1.12 billion~~period of ~~goodwill related to the acquisition of Allied is deductible for tax purposes as of June 30, 2019.~~

The Company’s goodwill and indefinite-lived trade name are tested for impairment annually, and all acquired goodwill and intangible assets are subject to review for impairment should future indicators of impairment develop. There were no material contingencies assumed as part of the Allied Acquisition.

~~During fiscal year 2018, the Company acquired 7 branches from the following acquisitions:~~

The Company recorded the acquired assets and liabilities related to these transactions at their estimated fair values as of the respective acquisition dates, which resulted in goodwill of $7.6 million ($7.1 million of which is deductible for tax purposes as of June 30, 2019) and $11.4 million ~~in intangible assets~~.

For those acquisitions where the acquisition accounting entries have yet to be finalized, the Company’s allocation of the purchase price is subject to change on receipt of additional information, including, but not limited to, the finalization of asset valuations (intangible and fixed) and income tax accounting,election, as well as the ~~Company’s continued review of the assumed liabilities that may result in the recognition of changes to the carrying amounts on the opening balance sheet~~nature and ~~a related adjustment to goodwill.~~reason for doing so.

The Company records net sales when performance obligations with our customer are satisfied. A performance obligation is a promise to transfer a distinct good to the customer and is the unit of account. The transaction price is allocated to each distinct performance obligation and recognized as net sales when, or as, the performance obligation is satisfied. All contracts have a single performance obligation as the promise to transfer the individual good is not separately identifiable from other promises and is, therefore, not distinct. Performance obligations are satisfied at a point in time and net sales are recognized when the customer accepts the delivery of a product or takes possession of a product with rights and rewards of ownership.

The Company enters into agreements with customers to offer rebates, generally based on achievement of specified sales levels and various marketing allowances that are common industry practice. Reductions to net sales for customer programs and incentive offerings, including promotions and other volume-based incentives, are estimated using the most likely amount method and recorded in the period in which the sale occurs. Provisions for early payment discounts are accrued in the same period in which the sale occurs. The Company does not have any material payment terms as payment is received shortly after the transfer of control of the products to the customer. Commissions to internal sales teams are paid to obtain contracts. As these contracts are less than one year, these costs are expensed as incurred.

The Company includes shipping and handling costs billed to customers in net sales. Related costs are accounted for as fulfillment activities and are recognized as cost of products sold when control of the products transfers to the customer.

The following table presents the Company’s net sales by product line and geography for ~~the three and nine months ended June 30, 2019~~each period presented (in thousands):

	Three Months Ended June 30, 2019						Nine Months Ended June 30, 2019						U.S.		Canada		Total
	U.S.		Canada		Total		U.S.		Canada		Total
Three Months Ended March 31, 2019
Residential roofing products	$	829,643	$	18,616	$	848,259	$	2,134,328	$	34,427	$	2,168,755	$	594,525	$	4,392	$	598,917
Non-residential roofing products		439,516		32,589		472,105		1,120,885		79,661		1,200,546		296,156		17,470		313,626
Complementary building products		601,764		2,406		604,170		1,701,007		4,939		1,705,946		515,721		773		516,494
Total net sales	$	1,870,923	$	53,611	$	1,924,534	$	4,956,220	$	119,027	$	5,075,247	$	1,406,402	$	22,635	$	1,429,037

Three Months Ended March 31, 2020
Residential roofing products													$	586,621	$	4,592	$	591,213
Non-residential roofing products														335,026		17,975		353,001
Complementary building products														513,237		1,035		514,272
Total net sales													$	1,434,884	$	23,602	$	1,458,486


Six Months Ended March 31, 2019
Residential roofing products													$	1,308,021	$	15,759	$	1,323,780
Non-residential roofing products														682,833		47,106		729,939
Complementary building products														1,094,443		2,551		1,096,994
Total net sales													$	3,085,297	$	65,416	$	3,150,713

Six Months Ended March 31, 2020
Residential roofing products													$	1,277,970	$	15,503	$	1,293,473
Non-residential roofing products														723,534		50,362		773,896
Complementary building products														1,062,947		3,282		1,066,229
Total net sales													$	3,064,451	$	69,147	$	3,133,598

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the fully diluted weighted-average number of common shares outstanding during the period.

Holders of Preferred Stock participate in dividends on an as-converted basis when declared on common shares. As a result, Preferred Stock is classified as a participating security and thereby requires the allocation of income that would have otherwise been available to common shareholders when calculating net income (loss) per share.

Diluted net income (loss) per share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common shareholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

The following table presents the components and calculations of basic and diluted net income (loss) per share for each period presented (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2019			2018			2020			2019			2020			2019
Net income (loss)	$	30,987		$	49,375		$	(37,992	)	$	50,316		$	(122,640	)	$	(68,086	)	$	(146,050	)	$	(68,979	)
Dividends on preferred shares		6,000			6,000			18,000			12,000
Dividends on Preferred Stock														6,000			6,000			12,000			12,000
Net income (loss) attributable to common shareholders	$	24,987		$	43,375		$	(55,992	)	$	38,316		$	(128,640	)	$	(74,086	)	$	(158,050	)	$	(80,979	)
Undistributed income allocated to participating securities		(3,099	)		(5,406	)		-			(3,293	)		-			-			-			-
Net income (loss) attributable to common shareholders - basic and diluted	$	21,888		$	37,969		$	(55,992	)	$	35,023		$	(128,640	)	$	(74,086	)	$	(158,050	)	$	(80,979	)

Weighted-average common shares outstanding - basic		68,477,946			68,086,387			68,391,882			67,976,980			68,820,155			68,451,920			68,743,633			68,348,850
Effect of common share equivalents		787,438			1,061,756			-			1,263,060			-			-			-			-
Weighted-average common shares outstanding - diluted		69,265,384			69,148,143			68,391,882			69,240,040			68,820,155			68,451,920			68,743,633			68,348,850

Net income (loss) per share - basic	$	0.32		$	0.56		$	(0.82	)	$	0.52		$	(1.87	)	$	(1.08	)	$	(2.30	)	$	(1.18	)
Net income (loss) per share - diluted	$	0.32		$	0.55		$	(0.82	)	$	0.51		$	(1.87	)	$	(1.08	)	$	(2.30	)	$	(1.18	)

The following table includes the number of shares that may be dilutive common shares in the future. These shares were not included in the computation of diluted net income (loss) per share because the effect was either anti-dilutive or the requisite performance conditions were not met:

	Three Months Ended June 30,				Nine Months Ended June 30,				Three Months Ended March 31,				Six Months Ended March 31,
	2019		2018		2019		2018		2020		2019		2020		2019
Stock options		735,324		484,358		1,274,921		349,281		2,088,820		1,534,920		2,000,161		1,544,719
Restricted stock units		48,927		355,891		147,585		148,638		431,381		75,599		416,148		196,914
Preferred Stock		9,694,619		9,694,619		9,694,619		6,392,056		9,694,619		9,694,619		9,694,619		9,694,619

On December 23, 2019, the Board of Directors of the Company approved the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the “2014 Plan”). On February ~~9, 2016,~~11, 2020, the shareholders of the Company approved an additional 4,850,000 shares under the ~~Amended and Restated Beacon Roofing Supply, Inc.~~ 2014 ~~Stock Plan (the “2014 Plan��).~~Plan. The 2014 Plan, which was originally approved by the shareholders on February 12, 2014, provides for discretionary awards of stock options, stock awards, restricted stock units, and stock appreciation rights ~~for up to 5,000,000 shares of common stock~~ to selected employees and non-employee directors. The 2014 Plan mandates that all forfeited, expired, and withheld shares, including those from the predecessor ~~plans,~~plan, be returned to the 2014 Plan and made available for issuance. As of ~~June 30, 2019,~~March 31, 2020, there were ~~1,796,676~~5,530,536 shares of common stock available for ~~issuance.~~

~~Prior to~~issuance under the 2014 Plan. The 2014 Plan is the only plan maintained by the Company ~~maintained the amended and restated Beacon Roofing Supply, Inc. 2004 Stock Plan (the “2004 Plan”). Upon shareholder approval of the 2014 Plan, the Company ceased issuing~~pursuant to which equity awards ~~from the 2004 Plan and mandated that all future equity awards will be issued from the 2014 Plan.~~are granted.

For all equity awards granted prior to October 1, 2014, in the event of a change in control of the Company, all awards are immediately vested. Beginning in fiscal 2015, equity awards contained a “double trigger” change in control mechanism. Unless an award is continued or assumed by a public company in an equitable manner, an award shall become fully vested immediately prior to a change in control (at 100% of the grant target in the case of a performance-based restricted stock unit award). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination within one-year following the change in control, in which event the award shall immediately become fully vested (at 100% of the grant target in the case of a performance-based restricted stock unit award).

Non-qualified stock options granted to employees generally expire 10 years after the grant date and are subject to continued employment and vest evenly in three annual installments over the three-year period following the grant date.

The fair value of the stock options granted during the ~~nine~~six months ended ~~June 30, 2019~~March 31, 2020 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

The following table summarizes all stock option activity for the ~~nine~~six months ended ~~June 30, 2019~~March 31, 2020 (in thousands, except share, per share, and time period amounts):

	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value¹		Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value¹
Balance as of September 30, 2018		1,969,037		$	33.08		5.7	$	14,088
Balance as of September 30, 2019											2,339,489		$	32.61		6.1	$	12,034
Granted		611,031			27.31						407,736			33.47
Exercised		(91,481	)		18.08						(76,329	)		18.95
Canceled/Forfeited		(68,179	)		37.10						(20,728	)		36.26
Expired		(3,108	)		26.74						(2,534	)		14.45
Balance as of June 30, 2019		2,417,300		$	32.09		6.1	$	18,435
Vested and expected to vest after June 30, 2019		2,378,442		$	32.09		6.1	$	18,133
Exercisable as of June 30, 2019		1,584,299		$	30.82		4.6	$	12,767
Balance as of March 31, 2020											2,647,634		$	33.12		6.3	$	342
Vested and expected to vest after March 31, 2020											2,589,890		$	33.14		6.2	$	342
Exercisable as of March 31, 2020											1,733,712		$	33.35		4.9	$	334

During the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded stock-based compensation expense related to stock options of ~~$1.0~~$1.1 million and ~~$1.0~~$1.1 million, respectively. During the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded stock-based compensation expense related to stock options of ~~$3.1~~$2.2 million and ~~$2.9~~$2.1 million, respectively. As of ~~June 30, 2019,~~March 31, 2020, there was ~~$6.0~~$7.0 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of ~~1.9~~2.0 years.

The following table summarizes additional information on stock options for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,				Six Months Ended March 31,
	2019		2018		2020		2019
Weighted-average fair value of stock options granted	$	8.77	$	15.86	$	10.70	$	8.77
Total grant date fair value of stock options vested		3,825		4,172		3,937		3,735
Total intrinsic value of stock options exercised		1,409		8,995		1,094		1,360

Restricted stock unit (“RSU”) awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that contain one or more additional vesting conditions tied directly to a defined performance metric for the Company. The actual number of RSUs that will vest can range from 0% to 200% of the original grant amount, depending upon the terms of the award and actual Company performance above or below the established performance metric targets. The Company estimates performance in relation to the defined targets when determining the projected number of RSUs that are expected to vest and calculating the related stock-based compensation expense.

RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the board. Beginning in fiscal year 2016, the Company enacted a policy that allows any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer to elect to have ~~any future~~their RSU ~~grants~~grant settle simultaneously with vesting. Eligibility is determined annually based on the value of the non‑employee directors’ Beacon equity holdings as of December 1. Elections must be made by December 31 and apply only to the succeeding RSU grant following the election.

The following table summarizes all restricted stock unit activity for the ~~nine~~six months ended ~~June 30, 2019:~~March 31, 2020:

	RSUs Outstanding			Weighted-Average Grant Date Fair Value		RSUs Outstanding			Weighted-Average Grant Date Fair Value
Balance as of September 30, 2018		934,023		$	47.00
Balance as of September 30, 2019							1,123,358		$	37.48
Granted		669,579			27.77		415,670			33.59
Released		(372,681	)		40.62		(270,264	)		45.76
Canceled/Forfeited		(106,676	)		45.49		(12,893	)		32.20
Balance as of June 30, 2019		1,124,245		$	37.80
Vested and expected to vest after June 30, 2019		989,233		$	38.86
Balance as of March 31, 2020							1,255,871		$	34.30
Vested and expected to vest after March 31, 2020							1,047,567		$	35.34

During the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded stock-based compensation expense related to restricted stock units of ~~$3.6~~$3.5 million and ~~$4.3~~$3.8 million, respectively. During the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded stock-based compensation expense related to restricted stock units of ~~$9.8~~$7.6 million and ~~$10.2~~$6.2 million, respectively. As of ~~June 30, 2019,~~March 31, 2020, there was ~~$19.3~~$20.2 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of ~~1.8~~1.9 years.

The following table summarizes additional information on RSUs for the periods presented (in thousands, except per share amounts):

	Nine Months Ended June 30,				Six Months Ended March 31,
	2019		2018		2020		2019
Weighted-average fair value of RSUs granted	$	27.77	$	57.40	$	33.59	$	27.77
Total grant date fair value of RSUs vested		15,978		6,656		13,362		15,920
Total intrinsic value of RSUs released		11,375		11,041		9,093		11,319

Given the adverse impact of the COVID-19 pandemic on global markets, the Company performed impairment analyses over its intangible assets and goodwill and concluded there was 0 impairment as of March 31, 2020.

The following table sets forth the change in the carrying amount of goodwill during the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively (in thousands):

Balance as of September 30, 2017	$	1,251,986
Acquisitions		1,070,823
Translation and other adjustments		(1,629	)
Balance as of June 30, 2018	$	2,321,180


Balance as of September 30, 2018	$	2,491,779		$	2,491,779
Acquisitions¹		(513	)		(513	)
Translation and other adjustments		(326	)		(940	)
Balance as of June 30, 2019	$	2,490,940
Balance as of March 31, 2019				$	2,490,326


Balance as of September 30, 2019				$	2,490,590
Translation and other adjustments					(1,955	)
Balance as of March 31, 2020				$	2,488,635

The changes in the carrying amount of goodwill for the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ were driven primarily by purchase accounting and foreign currency translation adjustments.

In connection with transactions finalized during fiscal year 2018, the Company recorded intangible assets of $1.05 billion ($920.8 million of customer relationships, $120.0 million of indefinite-lived trademarks, and $7.0 million of beneficial lease arrangements).

The following table summarizes intangible assets by category (in thousands, except time period amounts):

	June 30, 2019			September 30, 2018			June 30, 2018			Weighted-Average Remaining Life¹ (Years)		March 31, 2020			September 30, 2019			March 31, 2019			Weighted-Average Remaining Life¹ (Years)
Amortizable intangible assets:
Non-compete agreements	$	2,824		$	2,824		$	2,824			2.37	$	200		$	2,824		$	2,824			2.2
Customer relationships		1,531,061			1,530,565			1,530,434			17.89		1,486,267			1,530,970			1,530,902			16.9
Trademarks		10,500			10,500			10,500			7.08		7,600			10,500			10,500			6.6
Beneficial lease arrangements		8,060			8,060			7,644			3.80		-			8,060			8,060			-
Total amortizable intangible assets		1,552,445			1,551,949			1,551,402					1,494,067			1,552,354			1,552,286
Accumulated amortization		(567,801	)		(410,633	)		(373,447	)				(655,417	)		(619,864	)		(515,387	)
Total amortizable intangible assets, net	$	984,644		$	1,141,316		$	1,177,955				$	838,650		$	932,490		$	1,036,899
Indefinite lived trademarks		193,050			193,050			193,050
Indefinite-lived trademarks													51,333			193,050			193,050
Total intangibles, net	$	1,177,694		$	1,334,366		$	1,371,005				$	889,983		$	1,125,540		$	1,229,949

~~For~~In the three months ended ~~June 30,~~March 31, 2020, in connection with the Rebranding, the Company incurred non-cash accelerated intangible asset amortization of $142.6 million related to the write-off of certain trade names, primarily Allied (exterior products only), Roofing Supply Group and JGA. The Company used an income approach, specifically the relief from royalty method, to determine the fair value of remaining indefinite-lived trademarks. Various Level 3 fair value assumptions were used in the determination of the estimated fair value, including items such as sales growth rates, royalty rates, discount rates, and other prospective financial information.

During the three months ended March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded ~~$51.7~~$187.4 million and ~~$50.1~~$51.8 million of amortization expense relating to the above-listed intangible assets, respectively. ~~For~~During the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recorded ~~$155.5~~$232.1 million and ~~$105.3~~$103.8 million of amortization expense relating to the above-listed intangible assets, respectively. The intangible asset lives range from 5 to 20 years and have a weighted-average remaining life of ~~17.8~~16.9 years as of ~~June 30, 2019.~~March 31, 2020.

The following table summarizes the estimated future amortization expense for intangible assets (in thousands):

Year Ending September 30,
2019 (July - Sept)	$	53,055
2020		179,549
2020 (Apr - Sept)			$	88,344
2021		149,980		147,987
2022		121,431		120,540
2023		97,522		97,416
2024				78,771
Thereafter		383,107		305,592
Total future amortization expense	$	984,644	$	838,650

The following table summarizes all financing arrangements from the respective periods presented (in thousands):

	June 30, 2019			September 30, 2018			June 30, 2018			March 31, 2020			September 30, 2019			March 31, 2019
Revolving Lines of Credit
2023 ABL:
U.S. Revolver, expires January 2023¹	$	412,549		$	89,352		$	471,857
Canada Revolver, expires January 2023²		11,462			3,090			10,632
U.S. Revolver¹										$	1,001,609		$	80,961		$	414,369
Canada Revolver²											-			-			2,245
Current portion		-			-			-			-			-			-
Borrowings under revolving lines of credit, net	$	424,011		$	92,442		$	482,489		$	1,001,609		$	80,961		$	416,614

Long-term Debt, net
Term Loans:
Term Loan, matures January 2025³	$	927,582		$	930,726		$	931,332
2025 Term Loan³										$	924,438		$	926,535		$	928,631
Current portion		(9,700	)		(9,700	)		(9,700	)		(9,700	)		(9,700	)		(9,700	)
Long-term borrowings under term loans		917,882			921,026			921,632
Long-term borrowings under term loan											914,738			916,835			918,931
Senior Notes:
Senior Notes, mature October 2023⁴		294,566			293,607			293,287
Senior Notes, mature November 2025⁵		1,282,200			1,280,092			1,279,389
2023 Senior Notes⁴											-			294,886			294,246
2025 Senior Notes⁵											1,284,308			1,282,902			1,281,496
2026 Senior Notes⁶											295,775			-			-
Current portion		-			-			-			-			-			-
Long-term borrowings under senior notes		1,576,766			1,573,699			1,572,676			1,580,083			1,577,788			1,575,742
Long-term debt, net	$	2,494,648		$	2,494,725		$	2,494,308		$	2,494,821		$	2,494,623		$	2,494,673

Equipment Financing Facilities and Other
Equipment financing facilities, various maturities through September 2021⁶	$	7,981		$	11,222		$	12,288
Capital lease obligations, various maturities through November 2021⁷		8,017			12,378			13,705
Equipment Financing Facilities, net
Equipment financing facilities⁷										$	4,675		$	6,885		$	9,068
Capital lease obligations⁸											-			6,713			9,747
Current portion		(9,666	)		(9,961	)		(10,014	)		(3,712	)		(8,989	)		(10,288	)
Long-term obligations under equipment financing and other, net	$	6,332		$	13,639		$	15,979
Long-term obligations under equipment financing, net										$	963		$	4,609		$	8,527

On October 9, 2019, the Company, and certain subsidiaries of the Company as guarantors, executed a private offering of $300.0 million aggregate principal amount of 4.50% Senior Notes due 2026 (the “2026 Senior Notes”) at an issue price of 100%. The 2026 Senior Notes mature on November 15, 2026 and bear interest at a rate of 4.50% per annum, payable on May 15 and November 15 of each year, commencing on May 15, 2020.

The 2026 Senior Notes and related subsidiary guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside of the United States pursuant to Regulation S under the Securities Act. The 2026 Senior Notes and related subsidiary guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

On October 28, 2019, the Company used the net proceeds from the offering, together with cash on hand and available borrowings under the 2023 ABL (as defined below), to redeem all $300.0 million aggregate principal amount outstanding of the 2023 Senior Notes (as defined below) at a redemption price of 103.188% and to pay all related accrued interest, fees and expenses.

The intent of the transaction was to take advantage of lower market interest rates by refinancing the existing 2023 Senior Notes with the 2026 Senior Notes. The Company has accounted for the refinance as a debt extinguishment of the 2023 Senior Notes and an issuance of the 2026 Senior Notes. As a result, the Company recorded a loss on debt extinguishment of $14.7 million in the three months ended December 31, 2019. The Company has capitalized debt issuance costs of $4.5 million related to the 2026 Senior Notes, which are being amortized over the term of the financing arrangements.

As of March 31, 2020, the outstanding balance on the 2026 Senior Notes, net of $4.2 million of unamortized debt issuance costs, was $295.8 million.

In connection with the Allied Acquisition, the Company entered into various financing arrangements totaling $3.57 billion, including an asset-based revolving line of credit of $1.30 billion (“2023 ABL”), $525.0 million of which was drawn at closing, and a $970.0 million term loan (“2025 Term Loan”). The Company also raised an additional $1.30 billion through the issuance of senior notes (the “2025 Senior Notes”).

The proceeds from these financing arrangements were used to finance the Allied Acquisition, to refinance or otherwise extinguish all third-party indebtedness, to pay fees and expenses associated with the acquisition, and to provide working capital and funds for other general corporate purposes. The Company capitalized new debt issuance costs totaling approximately $65.3 million related to the 2023 ABL, the 2025 Term Loan and the 2025 Senior ~~Notes.~~

Since the financing arrangements entered into in connection with the Allied Acquisition had certain lenders who also participated in previous financing arrangements entered into by the Company, portions of the transactions were accounted for as either a debt modification or a debt extinguishment. In accordance with the accounting for debt modification, the Company expensed $2.0 million of debt issuance costs related to the Allied financing arrangements and recognized a loss on debt extinguishment of $1.7 million. The remainder of the debt issuance costs will beNotes, which are being amortized over the term of the ~~Allied~~ financing arrangements.

On January 2, 2018, the Company entered into a $1.30 billion asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2023 ABL consists of revolving loans in both the United States (“2023 U.S. Revolver”) in the amount of $1.20 billion and Canada (“2023 Canada Revolver”) in the amount of $100.0 million. The 2023 ABL has a maturity date of January 2, 2023. The 2023 ABL has various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The current unused commitment fees on the 2023 ABL are 0.25% per annum.

There is ~~one~~1 financial covenant under the 2023 ABL, which is ~~a Consolidated~~the Fixed Charge ~~Ratio.~~Coverage Ratio (the “FCCR”). The ~~Consolidated Fixed Charge Ratio~~FCCR is calculated by dividing ~~consolidated earnings before interest, taxes, depreciation and amortization (EBITDA)~~Consolidated EBITDA, less Capital Expenditures, by Consolidated Fixed Charges ~~(both~~(all terms as defined in the agreement). Per the covenant, the Company’s ~~Consolidated Fixed Charge Ratio~~FCCR must be a minimum of 1.00 at the end of each fiscal quarter, calculated on a trailing four quarter basis (or under certain circumstances, at the end of each fiscal month, calculated on a trailing twelve-month basis.) Compliance is only required at such times as borrowing availability (subject to certain adjustments) is less than the greater of (i) 10% of the lesser of the borrowing base or the aggregate commitments or (ii) $90.0 million, and for a period of thirty days thereafter. The Company was in compliance with this covenant as of ~~June 30, 2019.~~March 31, 2020.

The 2023 ABL is secured by a first priority lien over substantially all of the Company’s and each guarantor’s accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of the Company’s and each guarantor’s other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). The 2023 ABL is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

In March 2020, the Company elected to draw down approximately $725 million from its revolving credit facility. This was a proactive measure to increase the Company's cash position and preserve financial flexibility in light of current uncertainty in global markets resulting from the COVID-19 pandemic. As of ~~June 30, 2019,~~March 31, 2020, the total balance outstanding on the 2023 ABL, net of ~~$8.8~~$6.9 million of unamortized debt issuance costs, was ~~$424.0 million.~~$1.00 billion. The Company also has outstanding standby letters of credit related to the 2023 U.S. Revolver in the amount of ~~$13.3~~$13.0 million as of ~~June 30, 2019.~~March 31, 2020.

On January 2, 2018, the Company entered into a $970.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2025 Term Loan requires quarterly principal payments in the amount of $2.4 million, with the remaining outstanding principal to be paid on its January 2, 2025 maturity date. The interest rate is based on a LIBOR rate (with a floor) plus a fixed spread. The Company has the option of selecting a LIBOR period that determines the rate at which interest can accrue on the Term Loan as well as the period in which interest payments are made.

The 2025 Term Loan is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the ABL Priority Collateral. Certain excluded assets will not be included in the Term Priority Collateral and the ABL Priority Collateral. The Term Loan is guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.

As of ~~June 30, 2019,~~March 31, 2020, the outstanding balance on the 2025 Term Loan, net of ~~$30.3~~$26.2 million of unamortized debt issuance costs, was ~~$927.6~~$924.4 million.

On October 25, 2017, Beacon Escrow Corporation, a wholly owned subsidiary of the Company (the “Escrow Issuer”), completed a private offering of $1.30 billion aggregate principal amount of ~~4.875%~~4.875% Senior Notes due 2025 at an issue price of 100%. The 2025 Senior Notes bear interest at a rate of ~~4.875%~~4.875% per annum, payable semi-annually in arrears, beginning May 1, 2018. The Company anticipates repaying the 2025 Senior Notes at the maturity date of November 1, 2025. Per the terms of the Escrow Agreement, the net proceeds from the 2025 Senior Notes remained in escrow until they were used to fund a portion of the purchase price of the Allied Acquisition payable at closing on January 2, 2018.

Upon closing of the Allied Acquisition on January 2, 2018, (i) the Escrow Issuer merged with and into the Company, and the Company assumed all obligations under the 2025 Senior Notes; and (ii) all existing domestic subsidiaries of the Company (including the entities acquired in the Allied Acquisition) became guarantors of the 2025 Senior Notes.

As of ~~June 30, 2019,~~March 31, 2020, the outstanding balance on the 2025 Senior Notes, net of ~~$17.8~~$15.7 million of unamortized debt issuance costs, was $1.28 billion.

In connection with the Roofing Supply Group (“RSG”) acquisition in fiscal year 2016, the Company entered into various financing arrangements totaling $1.45 billion, including an asset-based revolving line of credit (“2020 ABL”) of $700.0 million ($350.0 million of which was drawn at closing) and a $450.0 million term loan (“2022 Term Loan”). The Company also raised an additional $300.0 million through the issuance of senior notes (the “2023 Senior Notes”).

The proceeds from these financing arrangements were used to provide working capital and funds for other general corporate purposes, to refinance or otherwise extinguish all third-party indebtedness, to finance the acquisition, and to pay fees and expenses associated with the RSG acquisition. The Company incurred debt issuance costs totaling approximately $31.3 million related to the 2020 ABL, 2022 Term Loan and 2023 Senior Notes.

On October 1, 2015, the Company entered into a $700.0 million asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2020 ABL had an original maturity date of October 1, 2020 and consisted of revolving loans in both the United States, in the amount of $670.0 million, and Canada, in the amount of $30.0 million. The 2020 ABL had various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The full balance of the 2020 ABL was paid on January 2, 2018 in conjunction with the Allied Acquisition.

On October 1, 2015, the Company entered into a $450.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2022 Term Loan required quarterly principal payments in the amount of $1.1 million, with the remaining outstanding principal to be paid on its original maturity date of October 1, 2022. The interest rate was based on a LIBOR rate (with a floor) plus a fixed spread. The Company had the option of selecting a LIBOR period that determined the rate at which interest would accrue, as well as the period in which interest payments are made. The full balance of the 2022 Term Loan was paid on January 2, 2018 in conjunction with the Allied Acquisition, including the write-off of $0.7 million in debt issuance costs.

On October 1, 2015, in connection with the acquisition of Roofing Supply Group, the Company raised $300.0 million by issuing ~~senior notes~~6.38% Senior Notes due ~~2023.~~2023 (the “2023 Senior Notes”). The 2023 Senior Notes ~~have~~had a coupon rate of 6.38% per annum and ~~are~~were payable semi-annually in arrears, beginning April 1, 2016. There ~~are~~were early payment provisions in the indenture inunder which the Company would be subject to ~~“make whole” provisions. The Company anticipates repaying the notes at the maturity date of~~redemption premiums. On October ~~1, 2023.~~

~~The 2023 Senior Notes are guaranteed jointly, severally, fully and unconditionally by the Company’s active United States subsidiaries.~~

~~As of June 30,~~28, 2019, the Company redeemed all $300.0 million aggregate principal amount outstanding ~~balance on~~of the 2023 Senior Notes ~~net~~at a redemption price of ~~$5.4~~103.188% plus accrued interest and, as a result, wrote off $5.1 million of unamortized debt issuance ~~costs, was $294.6 million.~~costs.

As of ~~June 30, 2019,~~March 31, 2020, the Company had ~~$8.0~~$4.7 million outstanding under equipment financing facilities, with fixed interest rates ranging from 2.33% to 2.89% and payments due through September ~~2021.~~2021.

~~As of June 30, 2019, the Company had $8.0 million of capital lease obligations outstanding. These leases have interest rates ranging from 2.72% to 10.39% with payments due through November 2021.~~

The Company mostly operates in leased facilities, which are accounted for as operating leases. The leases typically provide for a base rent plus real estate ~~taxes.~~taxes and insurance. Certain of the leases provide for escalating rents over the lives of the leases, and rent expense is recognized over the terms of those leases on a straight-line basis. The real estate leases expire between 2020 and 2038.

~~At June 30, 2019,~~In addition, the ~~minimum rental commitments~~Company leases equipment such as trucks and forklifts. Equipment leases are primarily accounted for as operating leases; however, the Company also accounts for some equipment leases as finance leases. The equipment leases expire between 2020 and 2026.

The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included on the consolidated balance sheets. Finance lease assets are included in property and equipment, net. The current portion of the finance lease liabilities is included in accrued expenses, and the noncurrent portion is included in other long-term liabilities.

Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rates implicit in most of the leases are not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.

Operating lease assets include any prepaid lease payments and lease incentives. The Company’s lease terms include periods under ~~all~~options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The Company generally uses the base, non-cancelable lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company has elected to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the lease assets and liabilities.

Payments under the Company’s lease agreements are primarily fixed. However, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities. These amounts include payments affected by the Consumer Price Index and payments for maintenance and utilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table summarizes components of operating lease costs recognized within selling, general and administrative expenses (in thousands):

The following table presents supplemental cash flow information related to operating leases ~~with initial or~~(in thousands):

As of March 31, 2020, the Company’s operating leases had a weighted-average remaining ~~terms~~lease term of ~~more than one year~~5.7 years and a weighted-average discount rate of 3.99%. Future lease payments under operating leases as of March 31, 2020 were as follows (in thousands):

Year Ending September 30,
2019 (July - Sept)	$	28,015
2020		109,780
2020 (Apr - Sept)			$	57,919
2021		100,696		108,453
2022		83,157		92,762
2023		66,437		75,755
2024				58,649
Thereafter		156,176		106,081
Total minimum lease payments	$	544,261
Total future lease payments				499,619
Imputed interest				(51,777	)
Total operating lease liabilities			$	447,842

~~For the three months ended June 30, 2019~~9. Commitments and 2018, rent expense was $27.4 million and $27.7 million, respectively. For the nine months ended June 30, 2019 and 2018, rent expense was $82.8 million and $71.4 million, respectively. Sublet income was immaterial for each of these periods.

The Company is subject to loss contingencies pursuant to various federal, state and local environmental laws and regulations; however, the Company is not aware of any reasonably possible losses that would have a material impact on its results of operations, financial position, or liquidity. Potential loss contingencies include possible obligations to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical or other substances by the Company or by other parties. In connection with its acquisitions, the Company’s practice is to request indemnification for any and all known material liabilities of significance as of the respective dates of acquisition. Historically, environmental liabilities have not had a material impact on the Company’s results of operations, financial position or liquidity.

The Company is subject to litigation from time to time in the ordinary course of business; however, the Company does not expect the results, if any, to have a material adverse impact on its results of operations, financial position or liquidity.

The ~~following table summarizes certain geographic information~~Company participates in multi-employer defined benefit plans for which it is not the sponsor. As of March 31, 2020, some of the Company’s multi-employer defined benefit plans were reported to have underfunded liabilities. Withdrawal from participation in one of these plans requires the Company to make a lump-sum contribution to the plan. The Company’s withdrawal liability depends on the extent of the plan’s funding of vested benefits, among other factors. The Company has withdrawn from the Central States Pension Fund and Local 408 Pension fund. As a result, the Company has recorded contingent liabilities for the ~~periods presented (in thousands):~~estimated pension plan exit costs. The Company does not believe that the finalized lump-sum contributions to exit these plans will have a material impact on its results of operations.

Other comprehensive income (loss) is composed of certain gains and losses that are excluded from net income under GAAP and instead recorded as a separate element of stockholders’ equity. ~~For~~

The following table summarizes the ~~three~~components of and ~~nine months ended June 30, 2019, the change~~changes in accumulated other comprehensive ~~income (loss) was $1.5 million~~loss (in thousands):

Gains (losses) on derivative instruments are recognized in the consolidated statements of operations in interest expense, financing costs, and ~~$(0.8) million, respectively, and composed solely of foreign currency translation effects. There were no reclassifications out of accumulated~~ other ~~comprehensive income (loss)~~.

The following table summarizes certain geographic information for the ~~three and nine months ended June 30, 2019.~~periods presented (in thousands):

As of ~~June 30, 2019,~~March 31, 2020, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1).

As of ~~June 30, 2019,~~March 31, 2020, based upon recent trading prices (Level 2), the fair value of the Company’s $300.0 million Senior Notes due in ~~2023~~2026 was ~~$312.4~~$279.1 million and the fair value of the $1.30 billion Senior Notes due 2025 was ~~$1.29~~$1.17 billion.

As of ~~June 30, 2019,~~March 31, 2020, the fair value of the Company’s term loan and revolving asset-based line of credit approximated the amount outstanding. The Company estimates the fair value of its Senior Secured Credit Facility by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles (Level 3).

The ~~2023 Senior Notes~~Company uses interest rate derivative instruments to manage the risk related to fluctuating cash flows from interest rate changes by converting a portion of its variable-rate borrowings into fixed-rate borrowings.

On September 11, 2019, the Company entered into 2 interest rate swap agreements to manage the interest rate risk associated with the variable rate on the 2025 Term Loan (see Note 7 for more information). Each swap agreement has a notional amount of $250 million. One agreement (the “5-year swap”) will expire on August 30, 2024 and ~~2025 Senior Notes are guaranteed jointly~~swaps the thirty-day LIBOR with a fixed-rate of 1.49%. The second agreement (the “3-year swap”) will expire on August 30, 2022 and ~~severally by all~~swaps the ~~United States subsidiaries~~thirty-day LIBOR with a fixed-rate of 1.50%. At the inception of the swap agreements, the Company ~~(collectively,~~determined that both swaps qualified for cash flow hedge accounting under ASC 815. Therefore, changes in the ~~“Guarantors”),~~fair value of the effective portions of the swaps, net of taxes, will be recognized in other comprehensive income each period, then reclassified into the consolidated statements of operations as a component of interest expense, financing costs, and ~~not~~other in the period in which the hedged transaction affects earnings. Any ineffective portions of the hedges are immediately recognized in earnings as a component of interest expense, financing costs and other.

The effectiveness of the swaps will be assessed qualitatively by the ~~Canadian subsidiaries~~Company during the lives of the ~~Company. Such guarantees are full and unconditional. Supplemental condensed consolidating financial information~~hedges by a) comparing the current terms of the ~~Company, including such information for the Guarantors, is presented below. The information is presented in accordance~~hedges with the ~~requirements~~related hedged debt to assure they continue to coincide and b) through an evaluation of ~~Rule 3-10~~the ability of the counterparty to the hedges to honor their obligations under the ~~SEC’s Regulation S-X.~~hedges. The ~~financial information may not necessarily be indicative of results of operations, cash flows or financial position had the non-guarantor subsidiaries operated~~Company performed a qualitative analysis as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups.

~~BEACON ROOFING SUPPLY, INC.~~of March 31, 2020 and concluded that the swap agreements continue to meet the requirements under ASC 815 to qualify for cash flow hedge accounting. As of March 31, 2020, the fair value of the 3‑year and 5‑year swaps, net of tax, were $5.6 million and $9.4 million, respectively, both in favor of the counterparty. These amounts are included in accrued expenses in the accompanying consolidated balance sheets.

~~Condensed Consolidating Balance Sheets~~The Company records any differences paid or received on its interest rate hedges to interest expense, financing costs and other. The following table summarizes the combined fair values, net of tax, of the interest rate derivative instruments (in thousands):

The fair value of the interest rate swaps is determined through the use of a pricing model, which utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals (generally referred to as the “LIBOR Curve”) for the full terms of the hedge agreements. These values reflect a Level 2 measurement under the applicable fair value hierarchy.

~~(Unaudited; In~~The following table summarizes the amounts of gain (loss) on the interest rate derivative instruments recognized in other comprehensive income (in thousands)

June 30, 2019

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations
and Other

Consolidated

Assets

Current assets:

Cash and cash equivalents
$
-

$
26,414

$
1,315

$
-

$
27,729

Accounts receivable, net

-

1,042,678

37,553

(1,140
)

1,079,091

Inventories, net

-

1,088,619

35,444

-

1,124,063

Prepaid expenses and other current assets

47,774

306,015

8,042

-

361,831

Total current assets

47,774

2,463,726

82,354

(1,140
)

2,592,714

Intercompany receivable, net

-

1,589,058

-

(1,589,058
)

-

Investments in consolidated subsidiaries

6,282,509

-

-

(6,282,509
)

-

Deferred income taxes, net

20,417

-

-

(20,417
)

-

Property and equipment, net

25,608

233,175

10,258

-

269,041

Goodwill

-

2,461,212

29,728

-

2,490,940

Intangibles, net

-

$
1,175,790

1,904

-

1,177,694

Other assets, net

1,243

-

-

-

1,243

Total assets
$
6,377,551

$
7,922,961

$
124,244

$
(7,893,124
)

$
6,531,632

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable
$
31,028

$
606,981

$
6,542

$
(1,140
)

$
643,411

Accrued expenses

56,112

516,895

17,749

-

590,756

Current portions of long-term debt/obligations

9,700

9,666

-

-

19,366

Total current liabilities

96,840

1,133,542

24,291

(1,140
)

1,253,533

Intercompany payable, net

1,548,487

-

40,571

(1,589,058
)

-

Borrowings under revolving lines of credit, net

-

412,549

11,462

-

424,011

Long-term debt, net

2,494,648

-

-

-

2,494,648

Deferred income taxes, net

-

130,083

514

(20,417
)

110,180

Long-term obligations under equipment financing and other, net

-

6,332

-

-

6,332

Other long-term liabilities

-

5,269

83

-

5,352

Total liabilities

4,139,975

1,687,775

76,921

(1,610,615
)

4,294,056

Convertible preferred stock

399,195

-

-

-

399,195

Total stockholders' equity

1,838,381

6,235,186

47,323

(6,282,509
)

1,838,381

Total liabilities and stockholders' equity
$
6,377,551

$
7,922,961

$
124,244

$
(7,893,124
)

$
6,531,632

	Three Months Ended March 31,					Six Months Ended March 31,
Instrument	2020			2019		2020			2019
Designated interest rate swaps	$	(15,886	)	$	-	$	(13,357	)	$	-

On March 27, 2020, the U.S. federal government officially signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). ASC 740, “Accounting for Income Taxes,” requires companies to recognize the effect of tax law changes in the period of enactment. The CARES Act allows companies a five-year carryback for Net Operating Losses (“NOLs”) arising in tax years beginning after December 31, 2017 and before January 1, 2021. The Company is projecting to generate a taxable loss for the year ending September 30, 2020, which the Company will be able carryback to the year ending September 30, 2015 with an enacted federal tax rate of 35%. This resulted in the recognition of a $33.3 million income tax benefit for the three months ended March 31, 2020, which is composed of the following items:

Other provisions in the CARES Act that will impact the Company include the ability to carry back losses due to the technical correction for fiscal year filers with an NOL in the 2017-2018 straddle year, the technical correction regarding qualified improvement property, the increase in Section 163(j) interest limitation percentage, and the allowance of remaining AMT credits to be fully refundable in 2019.

In addition to the CARES Act, the Company also recognized the impact of the Rebranding during the three months ended March 31, 2020 with non-cash accelerated intangible asset amortization of $142.6 million related to the write-off of certain trade names. The Company determined that the Rebranding was an unusual or infrequent occurring item; therefore, the tax effect is recognized in the interim period the transaction arose. As a result, the Company recognized a $36.5 million decrease of its deferred tax liabilities, which also resulted in the recognition of an income tax benefit for the same amount in its consolidated statement of operations for the three months ended March 31, 2020.

September 30, 2018

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations
and Other

Consolidated

Assets

Current assets:

Cash and cash equivalents
$
-

$
136,499

$
1,959

$
(8,531
)

$
129,927

Accounts receivable, net

-

1,051,410

40,262

(1,139
)

1,090,533

Inventories, net

-

907,605

28,442

-

936,047

Prepaid expenses and other current assets

23,711

214,011

6,638

-

244,360

Total current assets

23,711

2,309,525

77,301

(9,670
)

2,400,867

Intercompany receivable, net

-

1,361,615

-

(1,361,615
)

-

Investments in consolidated subsidiaries

6,109,325

-

-

(6,109,325
)

-

Deferred income taxes, net

22,475

-

-

(22,475
)

-

Property and equipment, net

18,929

250,517

10,961

-

280,407

Goodwill

-

2,461,725

30,054

-

2,491,779

Intangibles, net

-

1,332,104

2,262

-

1,334,366

Other assets, net

1,243

-

-

-

1,243

Total assets
$
6,175,683

$
7,715,486

$
120,578

$
(7,503,085
)

$
6,508,662

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable
$
24,154

$
843,907

$
22,482

$
(9,671
)

$
880,872

Accrued expenses

41,448

564,331

5,760

-

611,539

Current portions of long-term debt/obligations

9,700

9,961

-

-

19,661

Total current liabilities

75,302

1,418,199

28,242

(9,671
)

1,512,072

Intercompany payable, net

1,322,156

-

39,459

(1,361,615
)

-

Borrowings under revolving lines of credit, net

-

89,352

3,090

-

92,442

Long-term debt, net

2,494,725

-

-

-

2,494,725

Deferred income taxes, net

-

128,846

622

(22,474
)

106,994

Long-term obligations under equipment financing and other, net

-

13,639

-

-

13,639

Other long-term liabilities

-

5,207

83

-

5,290

Total liabilities

3,892,183

1,655,243

71,496

(1,393,760
)

4,225,162

Convertible preferred stock

399,195

-

-

-

399,195

Total stockholders' equity

1,884,305

6,060,243

49,082

(6,109,325
)

1,884,305

Total liabilities and stockholders' equity
$
6,175,683

$
7,715,486

$
120,578

$
(7,503,085
)

$
6,508,662

June 30, 2018

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations
and Other

Consolidated

Assets

Current assets:

Cash and cash equivalents
$
-

$
50,563

$
3,698

$
(26,710
)

$
27,551

Accounts receivable, net

-

1,046,751

32,277

(1,140
)

1,077,888

Inventories, net

-

1,132,228

33,161

-

1,165,389

Prepaid expenses and other current assets

44,662

286,478

6,449

-

337,589

Total current assets

44,662

2,516,020

75,585

(27,850
)

2,608,417

Intercompany receivable, net

-

1,290,785

-

(1,290,785
)

-

Investments in consolidated subsidiaries

5,981,419

-

-

(5,981,419
)

-

Deferred income taxes, net

19,702

-

-

(19,702
)

-

Property and equipment, net

14,046

264,610

10,052

-

288,708

Goodwill

-

2,291,635

29,545

-

2,321,180

Intangibles, net

-

1,368,653

2,352

-

1,371,005

Other assets, net

1,242

269

-

-

1,511

Total assets
$
6,061,071

$
7,731,972

$
117,534

$
(7,319,756
)

$
6,590,821

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable
$
42,884

$
688,336

$
16,316

$
(27,850
)

$
719,686

Accrued expenses

24,416

490,987

5,549

-

520,952

Current portions of long-term debt/obligations

9,700

10,014

-

-

19,714

Total current liabilities

77,000

1,189,337

21,865

(27,850
)

1,260,352

Intercompany payable, net

1,251,503

-

39,282

(1,290,785
)

-

Borrowings under revolving lines of credit

-

471,857

10,632

-

482,489

Long-term debt, net

2,494,308

-

-

-

2,494,308

Deferred income taxes, net

-

113,454

176

(19,702
)

93,928

Long-term obligations under equipment financing and other, net

-

15,979

-

-

15,979

Other long-term liabilities

814

5,428

77

-

6,319

Total liabilities

3,823,625

1,796,055

72,032

(1,338,337
)

4,353,375

Convertible preferred stock

399,195

-

-

-

399,195

Total stockholders' equity

1,838,251

5,935,917

45,502

(5,981,419
)

1,838,251

Total liabilities and stockholders' equity
$
6,061,071

$
7,731,972

$
117,534

$
(7,319,756
)

$
6,590,821

Nine Months Ended June 30, 2019

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations
and Other

Consolidated

Net cash provided by (used in) operating activities
$
(26,715
)

$
(166,414
)

$
(9,450
)

$
7,682

$
(194,897
)

Investing Activities

Purchases of property and equipment

(11,612
)

(32,055
)

(670
)

-

(44,337
)
Acquisition of businesses, net

-

(163,973
)

-

-

(163,973
)
Proceeds from the sale of assets

4,077

2,110

13

-

6,200

Intercompany activity

61,510

-

-

(61,510
)

-

Net cash provided by (used in) investing activities

53,975

(193,918
)

(657
)

(61,510
)

(202,110
)

Financing Activities

Borrowings under revolving lines of credit

-

1,701,300

33,176

-

1,734,476

Repayments under revolving lines of credit

-

(1,379,981
)

(24,855
)

-

(1,404,836
)
Repayments under term loan

(7,275
)

-

-

-

(7,275
)
Repayments under equipment financing facilities and other

-

(7,602
)

-

-

(7,602
)
Payment of dividends on preferred stock

(18,000
)

-

-

-

(18,000
)
Proceeds from issuance of common stock related to equity awards

1,654

-

-

-

1,654

Taxes paid related to net share settlement of equity awards

(3,639
)

-

-

-

(3,639
)
Intercompany activity

-

(63,470
)

1,055

62,415

-

Net cash provided by (used in) financing activities

(27,260
)

250,247

9,376

62,415

294,778

Effect of exchange rate changes on cash and cash equivalents

-

-

87

(56
)

31

Net increase (decrease) in cash and cash equivalents

-

(110,085
)

(644
)

8,531

(102,198
)
Cash and cash equivalents, beginning of period

-

136,499

1,959

(8,531
)

129,927

Cash and cash equivalents, end of period
$
-

$
26,414

$
1,315

$
-

$
27,729

Nine Months Ended June 30, 2018

Parent

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations
and Other

Consolidated

Net cash provided by (used in) operating activities
$
(68,803
)

$
93,178

$
(8,308
)

$
(17,086
)

$
(1,019
)

Investing Activities

Purchases of property and equipment

(8,721
)

(24,901
)

(1,356
)

-

(34,978
)
Acquisition of businesses, net

(2,715,429
)

-

-

-

(2,715,429
)
Proceeds from the sale of assets

-

724

26

-

750

Intercompany activity

628,948

-

-

(628,948
)

-

Net cash provided by (used in) investing activities

(2,095,202
)

(24,177
)

(1,330
)

(628,948
)

(2,749,657
)

Financing Activities

Borrowings under revolving lines of credit

-

2,082,972

39,977

-

2,122,949

Repayments under revolving lines of credit

-

(1,599,839
)

(32,139
)

-

(1,631,978
)
Borrowings under term loan

970,000

-

-

-

970,000

Repayments under term loan

(443,425
)

-

-

-

(443,425
)
Borrowings under senior notes

1,300,000

-

-

-

1,300,000

Payment of debt issuance costs

(58,266
)

(7,522
)

-

-

(65,788
)
Repayments under equipment financing facilities and other

-

(8,604
)

-

-

(8,604
)
Proceeds from issuance of convertible preferred stock

400,000

-

-

-

400,000

Payment of stock issuance costs

(1,279
)

-

-

-

(1,279
)
Payment of dividends on preferred stock

(6,000
)

-

-

-

(6,000
)
Proceeds from issuance of common stock related to equity awards

6,950

-

-

-

6,950

Taxes paid related to net share settlement of equity awards

(3,975
)

-

-

-

(3,975
)
Intercompany activity

-

(635,244
)

2,789

632,455

-

Net cash provided by (used in) financing activities

2,164,005

(168,237
)

10,627

632,455

2,638,850

Effect of exchange rate changes on cash and cash equivalents

-

-

1,127

-

1,127

Net increase (decrease) in cash and cash equivalents

-

(99,236
)

2,116

(13,579
)

(110,699
)
Cash and cash equivalents, beginning of period

-

149,799

1,582

(13,131
)

138,250

Cash and cash equivalents, end of period
$
-

$
50,563

$
3,698

$
(26,710
)

$
27,551

The following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis included in our ~~2018~~2019 Annual Report on Form 10-K and our Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this document. Unless otherwise indicated, references to ~~“2019”~~“2020” refer to the three ~~and nine~~or six months ended ~~June 30, 2019~~March 31, 2020 being discussed and references to ~~“2018”~~“2019” refer to the three ~~and nine~~or six months ended ~~June 30, 2018~~March 31, 2019 being discussed. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

We are the largest publicly traded distributor of ~~residential~~roofing materials and ~~non-residential roofing materials~~complementary building products in the United States and Canada. ~~We also distribute complementary building products, including siding, windows, specialty exterior building products, insulation, waterproofing systems, wallboard and acoustical ceiling tiles.~~ We are among the oldest and most established distributors in the industry. The complementary building products we distribute include siding, windows, insulation, waterproofing systems, wallboard, acoustical ceilings, and other specialty exterior and interior building products. We purchase products from a large number of manufacturers and then distribute these goods to a customer base consisting of contractors and, to a lesser extent, ~~general contractors,~~home builders, retailers, and other building materials suppliers.

On January 15, 2020, we announced the rebranding of our exterior product branches with the trade name “Beacon Building Products” (the “Rebranding”). The new name, and a related logo, will be adopted at over 450 Beacon one-step exterior products branches. Our interior, insulation, weatherproofing and two-step branches will continue to operate under current brand names.

As of ~~June 30, 2019,~~March 31, 2020, we operated~~537~~ 528 branches inthroughout all 50 states ~~throughout~~in the ~~United States~~U.S. and 6 provinces in Canada. We ~~stock~~offer one of the most extensive assortments of high-quality branded products in the industry with approximately ~~90,000~~140,000 SKUs available across our branch network, enabling us to deliver products to serve over ~~100,000~~110,000 customers on a timely basis.

On January 2, 2018, we completed the acquisition of all the outstanding capital stock of Allied Building Products Corp. (“Allied”), a New Jersey Corporation (the “Allied Acquisition”), for approximately $2.625 billion, subject to working capital and other adjustments (the “Purchase Price”). As of June 30, 2019, the adjusted Purchase Price for Allied was $2.88 billion and purchase accounting entries were finalized. Headquartered in East Rutherford, New Jersey, Allied was one of the country’s largest exterior and interior building products distributors, distributing products across 208 locations in 31 states in the U.S. with a strong presence in New York, New Jersey, Florida, California, Hawaii and the upper Midwest at the time of the acquisition. We believe the acquisition of Allied was a strategically and financially compelling transaction that expanded our geographic footprint, enhanced our scale and market presence, diversified our product offerings, and positioned us to provide new growth opportunities that will increase our long-term profitability.

Effective execution of both our sales and operating plans enables us to grow beyond the relative strength of the markets we serve. Our business model is a bottom-up approach, where each of our branches uses its regional knowledge and experience to assist with the development of a marketing plan and product mix that is best suited for its respective market. Local alignment with overall strategic goals provides the foundation for significant ownership of results at the branch level. Our distinctive ~~operational~~operating model and ~~significant~~ branch level autonomy differentiate us from the competition.

We provide our customers with industry-leading digital solutions, including Beacon ~~Pro+~~PRO+, our innovative e-commerce portal, and Beacon 3D+, aan in-home visualizer and dynamic modeling tool for our residential customers. These platforms help our customers save time, work more efficiently and grow their business. Additional value-added services we offer include, but are not limited to, job site delivery, custom designed tapered roofing systems, metal fabrication and trade credit. We consider customer relations and our employees’ knowledge of roofing and building materials to be vital to our ability to increase customer loyalty and maintain customer satisfaction. Our customers’ business success can be enhanced when they are supported by our efficient and effective distribution network. We invest significant resources in professional development, management skills, product knowledge, and operational proficiency. We pride ourselves on providing these capabilities developed on a foundation of continuous improvement ~~driving~~that drives service excellence, productivity and ~~efficiencies.~~efficiency.

We seek opportunities to expand our business operations through both acquisitions and organic growth (opening branches, growing sales with existing customers, adding new customers and introducing new products). Our main acquisition strategy is to target market leaders that do business in geographic areas that we currently do not service or that complement our existing regional operations. ~~In addition~~We pursue organic growth opportunities that allow us to ~~our acquisition~~penetrate deeper into target markets and establish a greater presence. The most recent successful execution of ~~Allied, our recent success in delivering on~~ our growth strategy is ~~highlighted~~summarized by the following:

The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption, and it is likely to adversely affect our business. As of the date of this filing, significant uncertainty exists concerning the magnitude of the impact and duration of the COVID-19 pandemic.

In ~~addition,~~this unprecedented time, we continue to emphasize the health and safety of our employees, customers and the communities in which we operate. Amid the current COVID-19 backdrop, our employees are practicing social distancing and are handwashing and cleaning in accordance with CDC standards. We have been designated an essential business in all the local markets that we serve, and we have ~~opened seven new branches~~yet to experience a significant amount of forced temporary branch closures due to COVID-19 business disruptions. We continue to deliver building products to both the residential and commercial construction markets. We continue to serve customers in ~~fiscal~~every way possible, and our online platform has stood out as an increasingly valuable tool in this current remote operating environment.

Our average daily sales levels for the three and six months ended March 31, 2020 increased 0.5% and decreased 1.3%, respectively, compared to the prior year. Our average daily sales for the month of April 2020 were down approximately 20% compared to the prior year ~~2019,~~period; however, there were indications of relative stability in our sales volumes toward the second half of the month.

In response to the potential business disruptions, we have implemented a series of operational and financial actions to combat the effects of the COVID‑19 induced slowdown. We immediately responded to changes in localized demand through aggressive cost-cutting actions, including ~~locations~~a reduction in ~~Huntsville, Alabama; Fresno, California; Ocala, Odessa,~~seasonal and ~~Panama City, Florida; Reno, Nevada;~~temporary hiring, cuts in overtime hours and ~~Plano, Texas. New branch locations allow us~~reduced hourly schedules. We have also implemented furloughs in both operating and non-operating functions, reduced salaries, significantly restricted capital expenditures, improved working capital metrics by reducing inventory, and heightened our organizational focus on managing all expenses. We have taken meaningful actions to ~~penetrate deeper into~~improve our ~~existing markets~~financial flexibility and ~~establish a greater presence.~~

~~Results~~ensure the strength of ~~Operations~~our balance sheet, and we are prepared to take additional steps to appropriately manage the business through this uncertain period. We are also monitoring input costs to ensure we are well-positioned to take advantage of any opportunities that present themselves over the next several quarters.

Comparison of the Three Months Ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~

The following tables set forth consolidated statement of operations data and such data as a percentage of total net sales for the periods presented (in thousands):

	Three Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2020			2019
Net sales	$	1,924,534	$	1,934,951	$	1,458,486		$	1,429,037
Cost of products sold		1,451,998		1,441,057		1,116,086			1,094,049
Gross profit		472,536		493,894		342,400			334,988
Operating expense:
Selling, general and administrative		328,827		323,194		318,510			320,408
Depreciation		17,731		15,811		17,495			17,447
Amortization		51,724		50,076		187,356			51,763
Total operating expense		398,282		389,081		523,361			389,618
Income (loss) from operations		74,254		104,813		(180,961	)		(54,630	)
Interest expense, financing costs, and other		38,089		37,348		23,454			40,452
Loss on debt extinguishment						-			-
Income (loss) before provision for income taxes		36,165		67,465		(204,415	)		(95,082	)
Provision for (benefit from) income taxes		5,178		18,090		(81,775	)		(26,996	)
Net income (loss)	$	30,987	$	49,375	$	(122,640	)	$	(68,086	)
Dividends on preferred shares		6,000		6,000
Dividends on Preferred Stock						6,000			6,000
Net income (loss) attributable to common shareholders	$	24,987	$	43,375	$	(128,640	)	$	(74,086	)

	Three Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		75.4	%		74.5	%		76.5	%		76.6	%
Gross profit		24.6	%		25.5	%		23.5	%		23.4	%
Operating expense:
Selling, general and administrative		17.1	%		16.7	%		21.9	%		22.4	%
Depreciation		0.9	%		0.8	%		1.2	%		1.2	%
Amortization		2.7	%		2.6	%		12.8	%		3.6	%
Total operating expense		20.7	%		20.1	%		35.9	%		27.2	%
Income (loss) from operations		3.9	%		5.4	%		(12.4	%)		(3.8	%)
Interest expense, financing costs, and other		2.0	%		1.9	%		1.6	%		2.8	%
Loss on debt extinguishment								0.0	%		0.0	%
Income (loss) before provision for income taxes		1.9	%		3.5	%		(14.0	%)		(6.6	%)
Provision for (benefit from) income taxes		0.3	%		0.9	%		(5.6	%)		(1.8	%)
Net income (loss)		1.6	%		2.6	%		(8.4	%)		(4.8	%)
Dividends on preferred shares		0.3	%		0.4	%
Dividends on Preferred Stock								0.4	%		0.4	%
Net income (loss) attributable to common shareholders		1.3	%		2.2	%		(8.8	%)		(5.2	%)

In managing our business, we consider all growth, including the opening of new branches, to be organic growth unless it results from an acquisition. When we refer to growth in existing markets or organic growth, we include growth from existing and newly opened branches but exclude growth from acquired branches until they have been under our ownership for at least four full fiscal quarters at the start of the fiscal reporting period. We believe the existing market information is useful to investors because it helps explain organic growth or decline. When ~~combined, our existing market information and acquired market information equal our consolidated company totals. When~~ we refer to regions, we are referring to our geographic regions. When we refer to our net product costs, we are referring to our invoice cost less the impact of short-term buying programs (also referred to as “special buys”) given the manner in which they are offered).

As of ~~June 30, 2019,~~March 31, 2020, we had a total of ~~537~~528 branches in operation. ~~Our existing market calculations include the operating results of the 530 branches that meet our definition (7~~All 528 branches were ~~excluded because they were~~ acquired ~~after~~prior to the start of the ~~third~~second quarter of fiscal year ~~2018).~~

~~The following table summarizes~~2019 and therefore meet our existing market definition. As a result, operating results ~~of operations by market type (existing and acquired)~~ for ~~the~~existing markets are equal to consolidated operating results for all periods ~~presented (in thousands):~~presented.

~~Consolidated net~~Net sales ~~decreased 0.5%~~increased 2.1% to ~~$1.92~~$1.46 billion in ~~2019,~~2020, from ~~$1.93~~$1.43 billion in ~~2018. Existing market net sales decreased 1.1% to $1.91 billion~~2019. The comparative increase in ~~2019, from $1.93 billion in 2018. The year-over-year decrease in existing market~~ net sales was ~~mainly~~ influenced by our sales initiatives around contractor conversions, national account sales, and the ~~following factors:~~

continued positive impact of our industry-leading digital platform, partially offset ~~by:~~by decreased hurricane-related demand in the Mid-Atlantic.

~~Existing market net~~Net sales by geographical region increased (decreased) from ~~2018~~2019 to ~~2019~~2020 as follows: Northeast ~~1.4%~~1.7%; Mid-Atlantic ~~(5.4%~~(3.9%); Southeast ~~(0.6%~~(0.4%); Southwest ~~3.8%~~(2.6%); Midwest ~~(2.2%)~~6.8%; West ~~(3.2%)~~8.8%; and Canada ~~3.7%~~4.3%.

We estimate the impact of inflation or deflation on our sales and gross profit by looking at changes in our average selling prices and gross margins (discussed below).

~~Product line~~The following table summarizes net sales by product line for ~~our existing markets were as follows~~the periods presented (in thousands):

	Three Months Ended June 30,																Three Months Ended March 31,
	2019					2018					Change						2020					2019					Change
	Net Sales		%			Net Sales		%			$			%			Net Sales		%			Net Sales		%			$			%
Residential roofing products	$	846,944		44.3	%	$	821,827		42.5	%	$	25,117			3.1	%	$	591,213		40.5	%	$	598,917		42.0	%	$	(7,704	)		(1.3	%)
Non-residential roofing products		471,661		24.7	%		483,335		25.0	%		(11,674	)		(2.4	%)		353,001		24.2	%		313,626		21.9	%		39,375			12.6	%
Complementary building products		592,020		31.0	%		627,301		32.5	%		(35,281	)		(5.6	%)		514,272		35.3	%		516,494		36.1	%		(2,222	)		(0.4	%)
Total existing market sales	$	1,910,625		100.0	%	$	1,932,463		100.0	%	$	(21,838	)		(1.1	%)
Total net sales																	$	1,458,486		100.0	%	$	1,429,037		100.0	%	$	29,449			2.1	%

Acquired market net sales were $13.9 million in 2019. We recognized acquired market product line net sales of $1.3 million in residential roofing products, $12.2 million in complementary building products and immaterial sales in non-residential roofing products.

~~Gross~~The following table summarizes gross profit and gross margin for ~~our consolidated and existing markets were as follows~~the periods presented (in thousands):

~~Consolidated gross~~Gross profit ~~decreased 4.3%~~increased 2.2% to ~~$472.5~~$342.4 million in ~~2019,~~2020, from ~~$493.9~~$335.0 million in ~~2018. Existing market gross profit decreased 5.0% to $468.6 million in 2019, from $493.2 million in 2018.~~2019.

~~Consolidated gross~~Gross margin was ~~24.6%~~23.5% in ~~2019, down 0.9%~~2020, up 0.1% from ~~25.5%~~23.4% in ~~2018. Existing market gross margin was 24.5%~~2019. The comparative increase in ~~2019, down 1.0% from 25.5% in 2018. The year-over-year decrease in existing market~~ gross margin was influenced by a net product cost ~~increase~~decrease of approximately ~~3.5% and an unfavorable mix shift,~~1%, partially offset by a price ~~increase~~decrease of ~~approximately 3% across all~~less than 1% and a product ~~lines.~~

Consolidated gross margin and existing market gross margin were similar due to most branches being classified as existing market branches for the period. Consolidated direct sales (products shipped by our vendors directly to our customers), which typically have substantially lower gross margins (and operating expense) compared to our warehouse sales, represented 12.5% and 13.9% of our net sales in 2019 and 2018, respectively.mix shift.

~~Operating~~The following table summarizes operating expense for ~~consolidated and existing markets was as follows~~the periods presented (in thousands):

~~Consolidated operating~~Operating expense increased ~~2.4%~~34.3% to ~~$398.3~~$523.4 million in ~~2019,~~2020, from ~~$389.1~~$389.6 million in ~~2018. Existing market operating expense increased 1.6% to $394.9 million in 2019, from $388.6 million in 2018.~~2019. The ~~year-over-year~~comparative increase in ~~existing market~~ operating expense was mainly influenced by the following factors:

Interest expense, financing costs and other expense was ~~$38.1~~$23.5 million in ~~2019, remaining relatively flat~~2020, compared to ~~$37.3~~$40.5 million in ~~2018.~~2019. The decrease is primarily due to:

There was an income tax ~~provision~~benefit of ~~$5.2~~$81.8 million in ~~2019,~~2020, compared to ~~$18.1~~$27.0 million in ~~2018.~~2019. The ~~decrease~~comparative increase in income tax ~~provision~~benefit was ~~mainly driven by~~primarily due to tax benefits from deferred tax adjustments of $36.5 million related to the Rebranding and $33.3 million related to the impact of the recently announced CARES Act related to the COVID-19 pandemic that allows the Company to carry back net operating losses for five years and tax effects current year net losses at a ~~reduction in pre-tax book income of $31.3 million compared to 2018.~~ 35% rate.

The effective tax rate, excluding any discrete items, was ~~13.8%~~39.8% in ~~2019,~~2020, compared to ~~29.5%~~27.9% in ~~2018.~~2019. We expect our fiscal year ~~2019~~2020 effective tax rate, excluding any discrete items, will range from approximately ~~35.0%~~38.0% to ~~37.0%~~40.0%.

Net income (loss) was ~~$31.0~~$(122.6) million in ~~2019,~~2020, compared to ~~$49.4~~$(68.1) million in ~~2018.~~2019. There were $6.0 million of dividends on preferred shares in ~~2019~~both 2020 and ~~2018,~~2019, making net income (loss) attributable to common shareholders of ~~$25.0~~$(128.6) million ~~in 2019, compared to $43.4~~and $(74.1) million, ~~in 2018.~~respectively. We calculate net income (loss) per share by dividing net income (loss), less dividends on preferred shares and adjustments for participating securities, by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by utilizing the most dilutive result after applying and comparing the two-class method and if-converted method (see Note 54 in the Notes to Condensed Consolidated Financial Statements for further discussion).

The following table presents all the components utilized to calculate basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Net income (loss)	$	30,987		$	49,375		$	(122,640	)	$	(68,086	)
Dividends on preferred shares		6,000			6,000
Dividends on Preferred Stock								6,000			6,000
Net income (loss) attributable to common shareholders		24,987			43,375			(128,640	)		(74,086	)
Undistributed income allocated to participating securities		(3,099	)		(5,406	)		-			-
Net income (loss) attributable to common shareholders - basic and diluted (if-converted method)	$	21,888		$	37,969		$	(128,640	)	$	(74,086	)
Undistributed income allocated to participating securities		3,099			5,406			-			-
Re-allocation of undistributed income to preferred shares		(3,068	)		(5,334	)
Re-allocation of undistributed income to Preferred Stock								-			-
Net income (loss) attributable to common shareholders - diluted (two-class method)	$	21,919		$	38,041		$	(128,640	)	$	(74,086	)

Weighted-average common shares outstanding - basic		68,477,946			68,086,387			68,820,155			68,451,920
Effect of common share equivalents		787,438			1,061,756			-			-
Weighted-average common shares outstanding - diluted (if-converted and two-class method)		69,265,384			69,148,143			68,820,155			68,451,920

Net income (loss) per share - basic	$	0.32		$	0.56		$	(1.87	)	$	(1.08	)
Net income (loss) per share - diluted (two-class method)		0.32			0.55			(1.87	)		(1.08	)
Net income (loss) per share - diluted (if-converted method)		0.32			0.55			(1.87	)		(1.08	)

Comparison of the ~~Nine~~Six Months Ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~

The following tables set forth consolidated statement of operations data and such data as a percentage of total net sales for the periods presented (in thousands):

	Nine Months Ended June 30,						Six Months Ended March 31,
	2019			2018			2020			2019
Net sales	$	5,075,247		$	4,482,555		$	3,133,598		$	3,150,713
Cost of products sold		3,832,154			3,380,531			2,380,500			2,380,156
Gross profit		1,243,093			1,102,024			753,098			770,557
Operating expense:
Selling, general and administrative		976,928			858,534			645,429			648,101
Depreciation		52,779			41,640			36,567			35,048
Amortization		155,508			105,339			232,134			103,784
Total operating expense		1,185,215			1,005,513			914,130			786,933
Income (loss) from operations		57,878			96,511			(161,032	)		(16,376	)
Interest expense, financing costs, and other		116,902			99,486			61,747			78,813
Loss on debt extinguishment								14,678			-
Income (loss) before provision for income taxes		(59,024	)		(2,975	)		(237,457	)		(95,189	)
Provision for (benefit from) income taxes		(21,032	)		(53,291	)		(91,407	)		(26,210	)
Net income (loss)	$	(37,992	)	$	50,316		$	(146,050	)	$	(68,979	)
Dividends on preferred shares		18,000			12,000
Dividends on Preferred Stock								12,000			12,000
Net income (loss) attributable to common shareholders	$	(55,992	)	$	38,316		$	(158,050	)	$	(80,979	)

	Nine Months Ended June 30,						Six Months Ended March 31,
	2019			2018			2020			2019
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		75.5	%		75.4	%		76.0	%		75.5	%
Gross profit		24.5	%		24.6	%		24.0	%		24.5	%
Operating expense:
Selling, general and administrative		19.3	%		19.2	%		20.6	%		20.6	%
Depreciation		1.0	%		0.9	%		1.2	%		1.1	%
Amortization		3.1	%		2.3	%		7.4	%		3.3	%
Total operating expense		23.4	%		22.4	%		29.2	%		25.0	%
Income (loss) from operations		1.1	%		2.2	%		(5.1	%)		(0.5	%)
Interest expense, financing costs, and other		2.3	%		2.2	%		2.0	%		2.5	%
Loss on debt extinguishment								0.5	%		0.0	%
Income (loss) before provision for income taxes		(1.2	%)		0.0	%		(7.6	%)		(3.0	%)
Provision for (benefit from) income taxes		(0.5	%)		(1.1	%)		(2.9	%)		(0.8	%)
Net income (loss)		(0.7	%)		1.1	%		(4.7	%)		(2.2	%)
Dividends on preferred shares		0.4	%		0.2	%
Dividends on Preferred Stock								0.3	%		0.4	%
Net income (loss) attributable to common shareholders		(1.1	%)		0.9	%		(5.0	%)		(2.6	%)

As of ~~June 30, 2019,~~March 31, 2020, we had a total of ~~537~~528 branches in operation. ~~Our existing market calculations include the operating results of the 325 branches that meet our definition (212~~All 528 branches were ~~excluded because they were~~ acquired ~~after~~prior to the start of fiscal year ~~2018).~~

~~The following table summarizes our results of operations by market type (existing and acquired) for the periods presented (in thousands):~~

¹ ~~Existing market operating expense for~~ 2019 and ~~2018 includes $23.0 million ($16.3 million, net of taxes) and $43.8 million ($31.0 million, net of taxes), respectively, of acquisition costs and business restructuring costs.~~therefore meet our existing market definition. As a result, operating results for existing markets are equal to consolidated operating results for all periods presented.

~~Consolidated net~~Net sales ~~increased 13.2%~~decreased 0.5% to ~~$5.08~~$3.13 billion in ~~2019,~~2020, from ~~$4.48~~$3.15 billion in ~~2018. Existing market net sales increased 0.9% to $2.96 billion~~2019. The comparative decrease in ~~2019, from $2.93 billion in 2018. The year-over-year increase in existing market~~ net sales was ~~mainly~~ influenced by decreased hurricane-related demand in the ~~following factors:~~

Mid-Atlantic and Southeast, partially offset ~~by:~~by the continued positive impact of our industry-leading digital platform.

~~Existing market net~~Net sales by geographical region increased (decreased) from ~~2018~~2019 to ~~2019~~2020 as follows: Northeast ~~10.6%~~(2.3%); Mid-Atlantic ~~13.0%~~(9.2%); Southeast ~~1.7%~~(2.4%); Southwest ~~(3.2%~~(0.3%); Midwest ~~(5.8%)~~2.0%; West ~~(13.2%)~~5.7%; and Canada ~~0.5%~~5.7%.

We estimate the impact of inflation or deflation on our sales and gross profit by looking at changes in our average selling prices and gross margins (discussed below).

~~Product line~~The following table summarizes net sales by product line for ~~our existing markets were as follows~~the periods presented (in thousands):

	Nine Months Ended June 30,																Six Months Ended March 31,
	2019					2018					Change						2020					2019					Change
	Net Sales		%			Net Sales		%			$			%			Net Sales		%			Net Sales		%			$			%
Residential roofing products	$	1,571,512		53.0	%	$	1,513,880		51.6	%	$	57,632			3.8	%	$	1,293,473		41.3	%	$	1,323,780		42.0	%	$	(30,307	)		(2.3	%)
Non-residential roofing products		843,062		28.5	%		868,354		29.6	%		(25,292	)		(2.9	%)		773,896		24.7	%		729,939		23.2	%		43,957			6.0	%
Complementary building products		546,818		18.5	%		551,366		18.8	%		(4,548	)		(0.8	%)		1,066,229		34.0	%		1,096,994		34.8	%		(30,765	)		(2.8	%)
Total existing market sales	$	2,961,392		100.0	%	$	2,933,600		100.0	%	$	27,792			0.9	%
Total net sales																	$	3,133,598		100.0	%	$	3,150,713		100.0	%	$	(17,115	)		(0.5	%)

Acquired market net sales were $2.11 billion in 2019. We recognized acquired market product line net sales of $597.2 million in residential roofing products, $357.5 million in non-residential roofing products and $1,159.1 million in complementary building products.

~~Gross~~The following table summarizes gross profit and gross margin for ~~our consolidated and existing markets were as follows~~the periods presented (in thousands):

~~Consolidated gross profit increased 12.8% to $1.24 billion in 2019, from $1.10 billion in 2018. Existing market gross~~Gross profit decreased ~~3.1%~~2.3% to ~~$681.4~~$753.1 million in ~~2019,~~2020, from ~~$703.4~~$770.6 million in ~~2018.~~2019.

~~Consolidated gross~~Gross margin was 24.0% in 2020, down 0.5% from 24.5% in ~~2019, down 0.1% from 24.6% in 2018. Existing market gross margin was 23.0% in 2019, down 1.0% from 24.0% in 2018.~~2019. The ~~year-over-year~~comparative decrease in ~~existing market~~ gross margin was influenced by a price decrease of less than 1% and a product ~~cost increase of approximately 5-6%,~~mix shift, partially offset by a ~~price increase~~net product cost decrease of ~~approximately 5% across all product lines.~~

~~Consolidated gross margin was higher~~less than existing market gross margin due to the positive impact of recent acquisitions. Consolidated direct sales (products shipped by our vendors directly to our customers), which typically have substantially lower gross margins (and operating expense) compared to our warehouse sales, represented 12.6% and 13.7% of our net sales in 2019 and 2018, respectively.1%.

~~Operating~~The following table summarizes operating expense for ~~consolidated and existing markets was as follows~~the periods presented (in thousands):

~~Consolidated operating~~Operating expense increased ~~17.9%~~16.2% to ~~$1.19 billion in 2019, from $1.01 billion in 2018. Existing market operating expense decreased 0.5% to $621.2~~$914.1 million in ~~2019,~~2020, from ~~$624.2~~$786.9 million in ~~2018.~~2019. The ~~year-over-year decrease~~comparative increase in ~~existing market~~ operating expense was mainly influenced by the following factors:

Interest expense, financing costs and other expense was ~~$116.9~~$61.7 million in ~~2019,~~2020, compared to ~~$99.5~~$78.8 million in ~~2018.~~2019. The ~~increase was mainly driven by the additional interest costs related to a higher average outstanding debt balance over the comparative periods as a direct result of the Allied Acquisition.~~decrease is primarily due to:

There was an income tax benefit of ~~$21.0~~$91.4 million in ~~2019,~~2020, compared to ~~$53.3~~$26.2 million in ~~2018.~~2019. The ~~decrease~~comparative increase in income tax benefit was ~~mainly driven by~~primarily due to tax benefits from deferred tax adjustments of $36.5 million related to the Rebranding and $33.3 million related to the impact of the ~~Tax Cuts and Jobs~~recently announced CARES Act ~~of 2017. In 2018,~~related to the COVID-19 pandemic that allows the Company ~~remeasured its deferred~~to carry back net operating losses for five years and tax ~~assets and~~effects current year net losses at a 35% rate.

~~liabilities based on the revised corporate tax rate, which was the primary driver of a $49.2 million net tax benefit for the period.~~ The effective tax rate, excluding any discrete items, was ~~36.5%~~39.8% in ~~2019~~,2020, compared to ~~29.5%~~27.9% in ~~2018~~.2019. We expect our fiscal year ~~2019~~2020 effective tax rate, excluding any discrete items, will range from approximately ~~35.0%~~38.0% to ~~37.0%~~40.0%.

Net income (loss) was ~~$(38.0)~~$(146.1) million in ~~2019,~~2020, compared to ~~$50.3~~$(69.0) million in ~~2018.~~2019. There were ~~$18.0~~$12.0 million of dividends on preferred shares in both 2020 and 2019, ~~compared to $12.0 million in 2018,~~ making net income (loss) attributable to common shareholders ~~of $(56.0)~~$(158.1) million ~~in 2019, compared to $38.3~~and $(81.0) million, ~~in 2018.~~respectively. We calculate net income (loss) per share by dividing net income (loss), less dividends on preferred shares and adjustments for participating securities, by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by utilizing the most dilutive result after applying and comparing the two-class method and if-converted method (see Note 54 in the Notes to Condensed Consolidated Financial Statements for further discussion).

The following table presents ~~the~~ all the components utilized to calculate basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

	Nine Months Ended June 30,						Six Months Ended March 31,
	2019			2018			2020			2019
Net income (loss)	$	(37,992	)	$	50,316		$	(146,050	)	$	(68,979	)
Dividends on preferred shares		18,000			12,000
Dividends on Preferred Stock								12,000			12,000
Net income (loss) attributable to common shareholders		(55,992	)		38,316			(158,050	)		(80,979	)
Undistributed income allocated to participating securities		-			(3,293	)		-			-
Net income (loss) attributable to common shareholders - basic and diluted (if-converted method)	$	(55,992	)	$	35,023		$	(158,050	)	$	(80,979	)
Undistributed income allocated to participating securities		-			3,293			-			-
Re-allocation of undistributed income to preferred shares		-			(3,238	)
Re-allocation of undistributed income to Preferred Stock								-			-
Net income (loss) attributable to common shareholders - diluted (two-class method)	$	(55,992	)	$	35,078		$	(158,050	)	$	(80,979	)

Weighted-average common shares outstanding, basic		68,391,882			67,976,980			68,743,633			68,348,850
Effect of common share equivalents		-			1,263,060			-			-
Weighted-average common shares outstanding - diluted (if-converted and two-class method)		68,391,882			69,240,040			68,743,633			68,348,850

Net income (loss) per share - basic	$	(0.82	)	$	0.52		$	(2.30	)	$	(1.18	)
Net income (loss) per share - diluted (two-class method)		(0.82	)		0.51			(2.30	)		(1.18	)
Net income (loss) per share - diluted (if-converted method)		(0.82	)		0.51			(2.30	)		(1.18	)

To provide investors with additional information regarding our financial results, we prepare certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), specifically:

We define Adjusted Net Income (Loss) as net income ~~that excludes~~excluding the impact of acquisition costs, business restructuring costs, ~~and~~ the effects of tax ~~reform. Adjusted Net Income (Loss) per share or "Adjusted EPS" is calculated by dividing~~reform, and the ~~Adjusted Net Income (Loss) for the period by the weighted-average diluted shares outstanding for the period after assuming the full conversion~~direct financial impact of the ~~participating Preferred Stock.~~

COVID-19 pandemic. We define Adjusted EBITDA as net income ~~plus~~excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, acquisition costs, ~~and~~ business restructuring ~~costs. EBITDA is a measure commonly used in~~costs, and the ~~distribution industry, and we present Adjusted EBITDA to enhance your understanding~~direct financial impact of ~~our operating performance.~~the COVID 19 pandemic.

We use these supplemental non-GAAP measures to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute our non-GAAP financial measures consistently using the same methods each period.

We believe these non-GAAP measures are useful measures because they ~~allow~~permit investors to better understand changes ~~in underlying operating performance~~ over comparative periods by providing ~~investors with~~ financial results that are unaffected by ~~cyclical variances~~certain items that ~~can be driven by items such as investment activity or purchase accounting adjustments.~~are not indicative of ongoing operating performance.

While we believe that these non-GAAP measures are useful to investors when evaluating our business, they are not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. ~~You~~These non-GAAP measures should not ~~consider these non-GAAP measures~~be considered in isolation or as a substitute for other financial performance measures presented in accordance with GAAP. These non-GAAP financial measures may have material limitations including, but not limited to, the exclusion of certain costs without a corresponding reduction of net income for the income generated by the assets ~~that~~to which the excluded costs are ~~related to.~~related. In addition, these non-GAAP financial measures may differ from similarly titled measures presented by other companies.

The following table presents a reconciliation of net income, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted Net Income (Loss)~~/Adjusted EPS~~ for each of the periods indicated (in ~~thousands, except per share amounts)~~thousands):

	Three Months Ended June 30,												Nine Months Ended June 30,
	2019						2018						2019						2018						Three Months Ended March 31,						Six Months Ended March 31,
	Amount			Per Share¹			Amount			Per Share¹			Amount			Per Share²			Amount			Per Share²			2020			2019			2020			2019
Net income (loss)	$	30,987		$	0.39		$	49,375		$	0.63		$	(37,992	)	$	(0.49	)	$	50,316		$	0.67		$	(122,640	)	$	(68,086	)	$	(146,050	)	$	(68,979	)
Adjustments:
Acquisition costs³		60,482			0.77			63,561			0.80			185,922			2.38			171,289			2.26
Business restructuring costs⁴		1,664			0.02			-			-			1,664			0.02			-			-
Effects of tax reform⁵		-			-			(1,166	)		(0.02	)		(462	)		(0.01	)		(49,149	)		(0.65	)
Acquisition costs¹																										43,875			61,479			94,509			125,440
Business restructuring costs²																										144,461			-			164,991			-
COVID-19 impact³																										(33,322	)		-			(33,322	)		-
Effects of tax reform																										-			(462	)		-			(462	)
Total adjustments		62,146			0.79			62,395			0.78			187,124			2.39			122,140			1.61			155,014			61,017			226,178			124,978
Tax impact of total adjustments⁶		(20,563	)		(0.26	)		(18,370	)		(0.23	)		(54,946	)		(0.69	)		(49,860	)		(0.66	)
Tax impact of total adjustments⁴																										(44,854	)		(17,815	)		(64,282	)		(34,383	)
Total adjustments, net of tax		41,583			0.53			44,025			0.55			132,178			1.70			72,280			0.95			110,160			43,202			161,896			90,595
Adjusted Net Income (Loss)	$	72,570		$	0.92		$	93,400		$	1.18		$	94,186		$	1.21		$	122,596		$	1.62		$	(12,480	)	$	(24,884	)	$	15,846		$	21,616

	Three Months Ended June 30,				Nine Months Ended June 30,				Three Months Ended March 31,					Six Months Ended March 31,
	2019		2018		2019		2018		2020			2019		2020			2019
Amortization of intangible assets	$	51,723	$	50,075	$	155,508	$	105,339	$	44,707		$	51,764	$	89,485		$	103,784
Costs classified as selling, general, and administrative^a		5,733		9,957		21,337		43,827		2,447			6,687		6,299			15,605
Amortization of debt issuance costs		3,026		3,529		9,077		22,123
Non-operating (income) expenses^b										(3,279	)		3,028		(1,275	)		6,051
Total acquisition costs		60,482		63,561		185,922		171,289	$	43,875		$	61,479	$	94,509		$	125,440

The following table presents a reconciliation of net income, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for each of the periods indicated (in thousands):

	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2019			2018			2020			2019			2020			2019
Net income (loss)	$	30,987		$	49,375		$	(37,992	)	$	50,316		$	(122,640	)	$	(68,086	)	$	(146,050	)	$	(68,979	)
Interest expense, net		40,169			39,055			121,800			104,334			35,625			41,815			70,421			81,631
Income taxes		5,178			18,090			(21,032	)		(53,291	)
Depreciation and amortization		69,455			65,887			208,287			146,979
Income taxes¹														(81,775	)		(26,996	)		(91,407	)		(26,210	)
Depreciation and amortization²														204,851			69,210			268,701			138,832
Stock-based compensation		4,637			5,298			12,901			13,133			4,661			4,807			9,817			8,264
Acquisition costs¹		5,733			9,957			21,337			43,827
Business restructuring costs²		1,664			-			1,664			-
Acquisition costs³														(2,835	)		6,687			1,017			15,605
Business restructuring costs⁴														943			-			20,627			-
COVID-19 impact⁵														23			-			23			-
Adjusted EBITDA	$	157,823		$	187,662		$	306,965		$	305,298		$	38,853		$	27,437		$	133,149		$	149,143

Adjusted EBITDA as a % of net sales		8.2	%		9.7	%		6.0	%		6.8	%		2.7	%		1.9	%		4.2	%		4.7	%

In general, sales and net income are highest during our first, third and fourth fiscal quarters, which represent the peak months of construction and re-roofing, especially in our branches in the northern and mid-western U.S. and in Canada. We have historically incurred low net income levels or net losses during the second quarter when our sales are substantially lower.

We generally experience an increase in inventory, accounts receivable and accounts payable during the third and fourth quarters of the year as a result of the seasonality of our business. Our peak cash usage generally occurs during the third quarter, primarily because accounts payable terms offered by our suppliers typically have due dates in April, May and June, while our peak accounts receivable collections typically occur from June through November.

We generally experience a slowing of our accounts receivable collections during our second quarter, mainly due to the inability of some of our customers to conduct their businesses effectively in inclement weather in certain divisions. We continue to attempt to collect those receivables, which require payment under our standard terms. We do not provide material concessions to our customers during this quarter of the year.

We generally experience our peak working capital needs during the third quarter after we build our inventories following the winter season but before we begin collecting on most of our spring receivables.

38The impact of the COVID-19 pandemic may cause fluctuations in our financial results and working capital that are not aligned with the seasonality we generally experience.

The following table sets forth certain unaudited quarterly data for the first ~~three~~two quarters of ~~2019~~2020 and fiscal year ~~2018,~~2019, which, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of this data. Results of any one or more quarters are not necessarily indicative of results for an entire fiscal year or of continuing trends (in thousands, except per share amounts):

	2019									2018												2020						2019
	Qtr 3			Qtr 2			Qtr 1			Qtr 4			Qtr 3			Qtr 2			Qtr 1¹			Qtr 2			Qtr 1			Qtr 4			Qtr 3			Qtr 2			Qtr 1
Net sales	$	1,924,534		$	1,429,037		$	1,721,676		$	1,935,756		$	1,934,951		$	1,425,625		$	1,121,979		$	1,458,486		$	1,675,112		$	2,029,913		$	1,924,534		$	1,429,037		$	1,721,676
% of fiscal year’s net sales		37.9	%		28.2	%		33.9	%		30.2	%		30.1	%		22.2	%		17.5	%	n/m			n/m				28.6	%		27.1	%		20.1	%		24.2	%

Gross profit		472,536			334,988			435,569			491,297			493,894			338,377			269,753			342,400			410,698			493,462			472,536			334,988			435,569
% of fiscal year’s gross profit		38.0	%		26.9	%		35.0	%		30.8	%		31.0	%		21.2	%		16.9	%	n/m			n/m				28.4	%		27.2	%		19.3	%		25.1	%

Income (loss) from operations		74,254			(54,630	)		38,254			108,115			104,813			(57,398	)		49,096			(180,961	)		19,929			89,874			74,254			(54,630	)		38,254
% of fiscal year’s income (loss) from operations		128.3	%		(94.4	%)		66.1	%		52.8	%		51.2	%		(28.1	%)		24.0	%	n/m			n/m				60.8	%		50.3	%		(37.0	%)		25.9	%

Net income (loss)	$	30,987		$	(68,086	)	$	(893	)	$	48,310		$	49,375		$	(66,655	)	$	67,596		$	(122,640	)	$	(23,410	)	$	27,380		$	30,987		$	(68,086	)	$	(893	)
Dividends on preferred shares		6,000			6,000			6,000			6,000			6,000			6,000			-
Dividends on Preferred Stock																							6,000			6,000			6,000			6,000			6,000			6,000
Net income (loss) attributable to common shareholders	$	24,987		$	(74,086	)	$	(6,893	)	$	42,310		$	43,375		$	(72,655	)	$	67,596		$	(128,640	)	$	(29,410	)	$	21,380		$	24,987		$	(74,086	)	$	(6,893	)

Net income (loss) per share - basic	$	0.32		$	(1.08	)	$	(0.10	)	$	0.54		$	0.56		$	(1.07	)	$	1.00		$	(1.87	)	$	(0.43	)	$	0.27		$	0.32		$	(1.08	)	$	(0.10	)
Net income (loss) per share - diluted	$	0.32		$	(1.08	)	$	(0.10	)	$	0.54		$	0.55		$	(1.07	)	$	0.98		$	(1.87	)	$	(0.43	)	$	0.27		$	0.32		$	(1.08	)	$	(0.10	)

Liquidity is defined as the current amount of readily available cash and the ability to generate adequate amounts of cash to meet the current needs for cash. We assess our liquidity in terms of our cash and cash equivalents on hand and the ability to generate cash to fund our operating activities, taking into consideration available borrowings and the seasonal nature of our business.

Our principal sources of liquidity as of ~~June 30, 2019~~March 31, 2020 were our cash and cash equivalents of ~~$27.7~~$781.2 million and our available borrowings of ~~$789.2~~$197.5 million under our asset-based ~~lending~~ revolving credit facility. During March 2020, we elected to borrow an additional $725.0 million under our revolving credit facility as a proactive measure to increase our cash position and preserve financial flexibility in response to the current uncertainty in global markets resulting from the COVID-19 pandemic.

Our primary capital needs are for working capital obligations and other general corporate purposes, including acquisitions and capital expenditures. Our primary sources of working capital are cash from operations and bank borrowings. We have financed large acquisitions through increased bank borrowings and the issuance of long-term debt and common or preferred stock. We then repay any such borrowings with cash flows from operations. We have funded most of our capital expenditures with cash on hand, increased bank borrowings, or equipment financing, and then reduced those obligations with cash flows from operations. We may explore additional or replacement financing sources in order to bolster liquidity and strengthen our capital structure.

We believe we currently have adequate liquidity and availability of capital to fund our present operations, meet our commitments on our existing debt and fund anticipated growth, including expansion in existing and targeted market areas. We may seek potential acquisitions from time to time and hold discussions with certain acquisition candidates. If suitable acquisition opportunities or working capital needs arise that require additional financing, we believe that our financial position and earnings history provide a sufficient base for obtaining additional financing resources at reasonable rates and terms. We may also choose to issue additional shares of common stock or preferred stock in order to raise funds.

The following table summarizes our cash flows for the periods indicated (in thousands):

	Nine Months Ended June 30,						Six Months Ended March 31,
	2019			2018			2020			2019
Net cash provided by (used in) operating activities	$	(194,897	)	$	(1,019	)	$	(150,824	)	$	(242,144	)
Net cash provided by (used in) investing activities		(202,110	)		(2,749,657	)		(23,942	)		(188,865	)
Net cash provided by (used in) financing activities		294,778			2,638,850			883,467			301,519
Effect of exchange rate changes on cash and cash equivalents		31			1,127			184			208
Net increase (decrease) in cash and cash equivalents	$	(102,198	)	$	(110,699	)	$	708,885		$	(129,282	)

Net cash used in operating activities was ~~$194.9~~$150.8 million in ~~2019,~~2020, compared to ~~$1.0~~$242.1 million in ~~2018.~~2019. Cash from operations ~~decreased $193.9~~increased $91.3 million due to ana incremental cash ~~outflow~~inflow of ~~$213.9~~$81.2 million stemming from changes to our net working capital, mainly driven by decreases in ~~accounts payable~~inventory and ~~accrued expenses. This decrease~~prepaid expenses and other assets. In addition, there was ~~partially offset by~~ an increase in net income after adjustments for non-cash items of ~~$20.0~~$10.2 million.

Net cash used in investing activities was ~~$202.1~~$23.9 million in ~~2019,~~2020, compared to ~~$2.75 billion~~$188.9 million in ~~2018.~~2019. The ~~$2.55 billion of additional~~$164.9 million decrease in investing cash spend was primarily due to ~~the impact of the Allied Acquisition in 2018, partially offset by~~ the $164.0 million payment resulting from the 338(h)(10) election made in ~~October 2018 (see Note 3~~2019 in connection with the ~~Notes to Condensed Consolidated Financial Statements).~~Allied Acquisition.

Net cash provided by financing activities was ~~$294.8~~$883.5 million in ~~2019,~~2020, compared to ~~$2.64 billion~~$301.5 million in ~~2018.~~2019. The financing cash flow ~~decrease~~increase of ~~$2.34 billion~~$581.9 million was primarily due to a $596.3 million increase in net borrowings under our revolving lines of credit over the ~~combined $2.27 billion impact of the 2025 Senior Notes and 2025 Term Loan that we entered into in 2018 in connection with the Allied Acquisition (see Note 8~~comparative periods, partially offset by an additional $13.3 million cash outflow in the ~~Notes~~current period related to ~~Condensed Consolidated Financial Statements for further discussion).~~the refinancing of our outstanding senior notes.

As of ~~June 30, 2019,~~March 31, 2020, we had access to the following financing arrangements:

On October 9, 2019, we and certain of our subsidiaries as guarantors executed a private offering of $300.0 million aggregate principal amount of 4.50% Senior Notes due 2026 (the “2026 Senior Notes”) at an issue price of 100%. The 2026 Senior Notes mature on November 15, 2026 and bear interest at a rate of 4.50% per annum, payable on May 15 and November 15 of each year, commencing on May 15, 2020.

On October 28, 2019, we used the net proceeds from the offering, together with cash on hand and available borrowings under the 2023 ABL (as defined below), to redeem all $300.0 million aggregate principal amount outstanding of the 2023 Senior Notes (as defined below) at a redemption price of 103.188% and to pay all related accrued interest, fees and expenses.

The intent of the transaction was to take advantage of lower market interest rates by refinancing the existing 2023 Senior Notes with the 2026 Senior Notes. We have accounted for the refinance as a debt extinguishment of the 2023 Senior Notes and an issuance of the 2026 Senior Notes. As a result, we recorded a loss on debt extinguishment of $14.7 million in the three months ended

December 31, 2019. We have capitalized debt issuance costs of $4.5 million related to the 2026 Senior Notes, which are being amortized over the term of the financing arrangements.

As of March 31, 2020, the outstanding balance on the 2026 Senior Notes, net of $4.2 million of unamortized debt issuance costs, was $295.8 million.

In connection with the Allied Acquisition, we entered into various financing arrangements totaling $3.57 billion, including an asset-based revolving line of credit of $1.30 billion (“2023 ABL”), $525.0 million of which was drawn at closing, and a $970.0 million term loan (“2025 Term Loan”). We also raised an additional $1.30 billion through the issuance of senior notes (the “2025 Senior Notes”).

The proceeds from these financing arrangements were used to finance the Allied Acquisition, to refinance or otherwise extinguish all third-party indebtedness, to pay fees and expenses associated with the acquisition, and to provide working capital and funds for other general corporate purposes. We capitalized new debt issuance costs totaling approximately $65.3 million related to the 2023 ABL, the 2025 Term Loan and the 2025 Senior ~~Notes.~~

Since the financing arrangements entered into in connection with the Allied Acquisition had certain lenders who also participated in our previous financing arrangements, portions of the transactions were accounted for as either a debt modification or a debt extinguishment. In accordance with the accounting for debt modification, we expensed $2.0 million of debt issuance costs related to the Allied financing arrangements and recognized a loss on debt extinguishment of $1.7 million. The remainder of the debt issuance costs will beNotes, which are being amortized over the term of the ~~Allied~~ financing arrangements.

On January 2, 2018, we entered into a $1.30 billion asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2023 ABL consists of revolving loans in both the United States (“2023 U.S. Revolver”) in the amount

of $1.20 billion and Canada (“2023 Canada Revolver”) in the amount of $100.0 million. The 2023 ABL has a maturity date of January 2, 2023. The 2023 ABL has various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The current unused commitment fees on the 2023 ABL are 0.25% per annum.

There is one financial covenant under the 2023 ABL, which is ~~a Consolidated~~the Fixed Charge ~~Ratio.~~Coverage Ratio (the “FCCR”). The ~~Consolidated Fixed Charge Ratio~~FCCR is calculated by dividing ~~consolidated earnings before interest, taxes, depreciation and amortization (EBITDA)~~Consolidated EBITDA, less Capital Expenditures, by Consolidated Fixed Charges ~~(both~~(all terms as defined in the agreement). Per the covenant, ~~our Consolidated Fixed Charge Ratio~~the Company’s FCCR must be a minimum of 1.00 at the end of each fiscal quarter, calculated on a trailing four quarter basis (or under certain circumstances, at the end of each fiscal month, calculated on a trailing twelve-month basis.) Compliance is only required at such times as borrowing availability (subject to certain adjustments) is less than the greater of (i) 10% of the lesser of the borrowing base or the aggregate commitments or (ii) $90.0 million, and for a period of thirty days thereafter. The Company was in compliance with this covenant as of ~~June 30, 2019.~~March 31, 2020.

The 2023 ABL is secured by a first priority lien over substantially all of our and each guarantor’s accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the “ABL Priority Collateral”), and a second priority lien over substantially all of our and each guarantor’s other assets, including all of the equity interests of any subsidiary held by us or any guarantor, subject to certain customary exceptions (the “Term Priority Collateral”). The 2023 ABL is guaranteed jointly, severally, fully and unconditionally by our active United States subsidiaries.

As of ~~June 30, 2019,~~March 31, 2020, the total balance outstanding on the 2023 ABL, net of ~~$8.8~~$6.9 million of unamortized debt issuance costs, was ~~$424.0 million.~~$1.00 billion. We also have outstanding standby letters of credit related to the 2023 U.S. Revolver in the amount of ~~$13.3~~$13.0 million as of ~~June 30, 2019.~~March 31, 2020.

On January 2, 2018, we entered into a $970.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2025 Term Loan requires quarterly principal payments in the amount of $2.4 million, with the remaining outstanding principal to be paid on its January 2, 2025 maturity date. The interest rate is based on a LIBOR rate (with a floor) plus a fixed spread. We have the option of selecting a LIBOR period that determines the rate at which interest can accrue on the Term Loan as well as the period in which interest payments are made.

As of ~~June 30, 2019,~~March 31, 2020, the outstanding balance on the 2025 Term Loan, net of ~~$30.3~~$26.2 million of unamortized debt issuance costs, was ~~$927.6~~$924.4 million.

On October 25, 2017, Beacon Escrow Corporation, our ~~wholly-owned~~wholly owned subsidiary (the “Escrow Issuer”), completed a private offering of $1.30 billion aggregate principal amount of 4.875% Senior Notes due 2025 at an issue price of 100%. The 2025 Senior

Notes bear interest at a rate of 4.875% per annum, payable semi-annually in arrears, beginning May 1, 2018. We anticipate repaying the 2025 Senior Notes at the maturity date of November 1, 2025. Per the terms of the Escrow Agreement, the net proceeds from the 2025 Senior Notes remained in escrow until they were used to fund a portion of the purchase price of the Allied Acquisition payable at closing on January 2, 2018.

Upon closing of the Allied Acquisition on January 2, 2018, (i) the Escrow Issuer merged with and into us, and we assumed all obligations under the 2025 Senior Notes; and (ii) all our existing domestic subsidiaries (including the entities acquired in the Allied Acquisition) became guarantors of the 2025 Senior Notes.

As of ~~June 30, 2019,~~March 31, 2020, the outstanding balance on the 2025 Senior Notes, net of ~~$17.8~~$15.7 million of unamortized debt issuance costs, was $1.28 billion.

In connection with the Roofing Supply Group (“RSG”) acquisition in fiscal year 2016, we entered into various financing arrangements totaling $1.45 billion, including an asset-based revolving line of credit (“2020 ABL”) of $700.0 million ($350.0 million of which was drawn at closing) and a $450.0 million term loan (“2022 Term Loan”). We also raised an additional $300.0 million through the issuance of senior notes (the “2023 Senior Notes”).

The proceeds from these financing arrangements were used to provide working capital and funds for other general corporate purposes, to refinance or otherwise extinguish all third-party indebtedness, to finance the acquisition, and to pay fees and expenses associated with the RSG acquisition. We incurred debt issuance costs totaling approximately $31.3 million related to the 2020 ABL, 2022 Term Loan, and 2023 Senior Notes.

On October 1, 2015, we entered into a $700.0 million asset-based revolving line of credit with Wells Fargo Bank, N.A. and a syndicate of other lenders. The 2020 ABL had an original maturity date of October 1, 2020 and consisted of revolving loans in both the United States, in the amount of $670.0 million, and Canada, in the amount of $30.0 million. The 2020 ABL had various borrowing tranches with an interest rate based on a LIBOR rate (with a floor) plus a fixed spread. The full balance of the 2020 ABL was paid on January 2, 2018 in conjunction with the Allied Acquisition.

On October 1, 2015, we entered into a $450.0 million Term Loan with Citibank N.A., and a syndicate of other lenders. The 2022 Term Loan required quarterly principal payments in the amount of $1.1 million, with the remaining outstanding principal to be paid on its original maturity date of October 1, 2022. The interest rate was based on a LIBOR rate (with a floor) plus a fixed spread. We had the option of selecting a LIBOR period that determined the rate at which interest would accrue, as well as the period in which interest payments are made. The full balance of the 2022 Term Loan was paid on January 2, 2018 in conjunction with the Allied Acquisition, including the write-off of $0.7 million in debt issuance costs.

On October 1, 2015, wein connection with the acquisition of Roofing Supply Group, the Company raised $300.0 million by issuing ~~senior notes~~6.38% Senior Notes due ~~2023.~~2023 (the “2023 Senior Notes”). The 2023 Senior Notes ~~have~~had a coupon rate of 6.38% per annum and ~~are~~were payable semi-annually in arrears, beginning April 1, 2016. There ~~are~~were early payment provisions in the indenture inunder which wethe Company would be subject to ~~“make whole” provisions. We anticipate repaying the notes at the maturity date of~~redemption premiums. On October ~~1, 2023.~~

~~The 2023 Senior Notes are guaranteed jointly, severally, fully and unconditionally by our active United States subsidiaries.~~

As of ~~June 30, 2019,~~March 31, 2020, we had ~~$8.0~~$4.7 million outstanding under equipment financing facilities, with fixed interest rates ranging from 2.33% to 2.89% and payments due through September 2021.

~~As of June 30, 2019, we had $8.0 million of capital lease obligations outstanding. These leases have interest rates ranging from 2.72% to 10.39% with payments due through November 2021.~~

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

Our disclosure and analysis in this report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of ~~management’s~~management��s plans and objectives, future contracts, and forecasts of trends and other matters. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “believe,” “will likely result,” “outlook,” “project” and other words and expressions of similar meaning. No assurance can be given that the results in any forward-looking statements will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act.

Certain factors that may affect our business and could cause actual results to differ materially from those expressed in any forward-looking statements include those set forth under the heading “Risk Factors” contained herein, as well as those in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2018.~~2019.

Our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of its ~~2018~~2019 Annual Report on Form 10-K have not changed materially during the three-month period ended ~~June 30, 2019.~~March 31, 2020.

As of ~~June 30, 2019,~~March 31, 2020, management, including the CEO and CFO, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Act”)). Based on that evaluation, management, including the CEO and CFO, concluded that as of ~~June 30, 2019,~~March 31, 2020, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

On January 2, 2018, we completed our acquisition of Allied Building Products Corp. ("Allied"). As permitted under existing SEC staff guidance, management elected to exclude Allied from our internal controls assessment for fiscal year 2018. However, for fiscal year 2019, the acquired Allied business is within the scope of management’s assessment of internal controls. Management has fully integrated all of the acquired Allied branches, and internal controls at the Allied branches were part of management’s assessment of internal controls for effectiveness as of June 30, 2019. The full integration of the Allied branches did not lead to material changes to our internal controls over financial reporting.

~~Including the Allied Acquisition, there~~There has been no change to our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other than as set forth below, our risk factors disclosures set forth in Part I, Item 1A, “Risk Factors” of our 2019 Annual Report on Form 10-K have not changed materially during the three months ended March 31, 2020.

The impact of the COVID-19 pandemic, or similar global health concerns, could have a significant effect on supply and/or demand for our products and have a negative impact on our business operations and financial results.

A significant outbreak of epidemic, pandemic, or contagious diseases in the human population, including the COVID‑19 pandemic, could result in a widespread health crisis that could adversely affect global markets, resulting in an economic downturn that could affect the supply and/or demand for our products. Any quarantines, labor shortages or other disruptions to us, our suppliers, or our customers would likely adversely impact our sales and operating results. A prolonged economic downturn may result in reduced cash flows or a reduction to our market capitalization, triggering the potential need to recognize significant non-cash intangible asset impairment charges in our results of operations. It could also result in an adverse impact on the creditworthiness of our customers and the collectability of trade receivables, thereby affecting our liquidity. In addition, order lead times could be extended or delayed, and pricing could increase. Some products or services may become unavailable if the regional spread became significant enough to prevent alternative sourcing. We are unable to predict the potential future impact that the COVID‑19 pandemic, or another such virus or health concern, could have on the Company if the spread is unable to be contained.

Pursuant to Rule 405 of Regulation S-T, the following interactive data files formatted in Inline Extensible Business Reporting Language (iXBRL) are attached as Exhibit 101 to this Quarterly Report on Form 10-Q: (i) the Consolidated Balance Sheets as of ~~June~~March 31, 2020; September 30, 2019; ~~September 30, 2018;~~ and ~~June 30, 2018,~~March 31, 2019, (ii) the Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ (iii) the Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months

ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ (iv) the Consolidated Statements of Stockholders’ Equity for the three and ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ (v) the Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ and (vi) the Notes to Condensed Consolidated Financial Statements.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Title of each class	Trading Symbol	Name of each exchange on which registered

Common Stock, $0.01 par value	BECN	NASDAQ Global Select Market

PART I.	Financial Information (unaudited)
	Item 1.	Condensed Consolidated Financial Statements
		Consolidated Balance Sheets	3
		Consolidated Statements of Operations	4
		Consolidated Statements of Comprehensive Income	5
		Consolidated Statements of Stockholders’ Equity	6
		Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2821
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4335
	Item 4.	Controls and Procedures	4335
PART II.	Other Information
	Item 1A.	Risk Factors	36
	Item 6.	Exhibits	4436
Signatures			4538

	January 2, 2018						January 2, 2018
	(as reported at March 31, 2018)			Adjustments			(as adjusted at March 31, 2019)
Cash	$	19,322		$	(19,153	)	$	169
Accounts receivable		315,485			22,064			337,549
Inventory		322,705			(7,920	)		314,785
Prepaid and other current assets		59,279			16,161			75,440
Property, plant, and equipment		139,528			(168	)		139,360
Goodwill		1,130,635			102,145			1,232,780
Intangible assets		1,037,000			-			1,037,000
Current liabilities		(271,252	)		11,963			(259,289	)
Non-current liabilities		(6,820	)		6,097			(723	)
Total purchase price	$	2,745,882		$	131,189		$	2,877,071

Risk-free interest rate	~~3.00~~1.74	%
Expected volatility	~~29.35~~33.18	%
Expected life (in years)	~~5.18~~5.25
Dividend yield	-

	Three Months Ended March 31, 2020		Six Months Ended March 31, 2020
Operating lease costs	$	30,967	$	62,428
Variable lease costs		2,954		5,611
Total operating lease costs	$	33,921	$	68,039


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

		Six Months Ended March 31, 2020
Operating cash flows for operating lease liabilities		$	59,046

	Foreign			Derivative			Accumulated Other
	Currency Translation			Financial Instruments			Comprehensive Loss
Balance as of September 30, 2019	$	(18,984	)	$	(1,612	)	$	(20,596	)
Other comprehensive income before reclassifications		(5,168	)		(13,357	)		(18,525	)
Reclassifications out of other comprehensive loss		-			-			-
Balance as of March 31, 2020	$	(24,152	)	$	(14,969	)	$	(39,121	)

		Assets/(Liabilities) as of:
Instrument	Fair Value Hierarchy	March 31, 2020			September 30, 2019			March 31, 2019
Designated interest rate swaps¹	Level 2	$	(14,969	)	$	(1,612	)	$	-

	June 30, 2019
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations and Other			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	26,414	$	1,315	$	-		$	27,729
Accounts receivable, net		-		1,042,678		37,553		(1,140	)		1,079,091
Inventories, net		-		1,088,619		35,444		-			1,124,063
Prepaid expenses and other current assets		47,774		306,015		8,042		-			361,831
Total current assets		47,774		2,463,726		82,354		(1,140	)		2,592,714
Intercompany receivable, net		-		1,589,058		-		(1,589,058	)		-
Investments in consolidated subsidiaries		6,282,509		-		-		(6,282,509	)		-
Deferred income taxes, net		20,417		-		-		(20,417	)		-
Property and equipment, net		25,608		233,175		10,258		-			269,041
Goodwill		-		2,461,212		29,728		-			2,490,940
Intangibles, net		-	$	1,175,790		1,904		-			1,177,694
Other assets, net		1,243		-		-		-			1,243
Total assets	$	6,377,551	$	7,922,961	$	124,244	$	(7,893,124	)	$	6,531,632

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	31,028	$	606,981	$	6,542	$	(1,140	)	$	643,411
Accrued expenses		56,112		516,895		17,749		-			590,756
Current portions of long-term debt/obligations		9,700		9,666		-		-			19,366
Total current liabilities		96,840		1,133,542		24,291		(1,140	)		1,253,533
Intercompany payable, net		1,548,487		-		40,571		(1,589,058	)		-
Borrowings under revolving lines of credit, net		-		412,549		11,462		-			424,011
Long-term debt, net		2,494,648		-		-		-			2,494,648
Deferred income taxes, net		-		130,083		514		(20,417	)		110,180
Long-term obligations under equipment financing and other, net		-		6,332		-		-			6,332
Other long-term liabilities		-		5,269		83		-			5,352
Total liabilities		4,139,975		1,687,775		76,921		(1,610,615	)		4,294,056

Convertible preferred stock		399,195		-		-		-			399,195

Total stockholders' equity		1,838,381		6,235,186		47,323		(6,282,509	)		1,838,381
Total liabilities and stockholders' equity	$	6,377,551	$	7,922,961	$	124,244	$	(7,893,124	)	$	6,531,632

	Existing Markets						Acquired Markets						Consolidated
	Three Months Ended June 30,
	2019			2018			2019			2018			2019			2018
Net sales	$	1,910,625		$	1,932,463		$	13,909		$	2,488		$	1,924,534		$	1,934,951

Gross profit	$	468,602		$	493,246		$	3,934		$	648		$	472,536		$	493,894
Gross margin		24.5	%		25.5	%		28.3	%		26.0	%		24.6	%		25.5	%

Operating expense:
Selling, general, and administrative	$	326,020		$	322,788		$	2,807		$	406		$	328,827		$	323,194
Depreciation		17,664			15,764			67			47			17,731			15,811
Amortization		51,213			50,026			511			50			51,724			50,076
Operating expense¹	$	394,897		$	388,578		$	3,385		$	503		$	398,282		$	389,081
Operating expense as a % of net sales		20.7	%		20.1	%		24.3	%		20.2	%		20.7	%		20.1	%

Operating income (loss)	$	73,705		$	104,668		$	549		$	145		$	74,254		$	104,813
Operating margin		3.9	%		5.4	%		3.9	%		5.8	%		3.9	%		5.4	%

	Three Months Ended June 30,						Change¹
	2019			2018			$			%
Gross profit - consolidated	$	472,536		$	493,894		$	(21,358	)		(4.3	%)
Gross profit - existing markets		468,602			493,246			(24,644	)		(5.0	%)
Gross margin - consolidated		24.6	%		25.5	%	N/A				(0.9	%)
Gross margin - existing markets		24.5	%		25.5	%	N/A				(1.0	%)

	BEACON ROOFING SUPPLY, INC.

Date: ~~August 7, 2019~~May 8, 2020	BY:	/s/ JOSEPH M. NOWICKI
		Joseph M. Nowicki
		Executive Vice President & Chief Financial Officer