Summary of Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 27, 2014 |
Accounting Policies [Abstract] | |
Business Activities and Organization | | (a) | Business Activities and Organization | | |
Continental Cement Company, L.L.C. ( “Continental Cement”) produces Portland cement at its plant located in Hannibal, Missouri. Cement distribution terminals are maintained in Hannibal and St. Louis, Missouri and Bettendorf, Iowa. Continental Cement’s primary customers are ready-mixed concrete and concrete products producers and contractors located in the Midwestern United States. |
Green America Recycling, L.L.C. (“GAR”), a wholly owned subsidiary of Continental Cement, is engaged in the business of securing, processing and blending hazardous and nonhazardous waste materials primarily for use as supplemental fuels in Continental Cement’s manufacturing process. GAR’s primary customers are commercial transportation disposal facilities and petroleum and chemical manufacturers located in the continental United States. |
Continental Cement, a Delaware limited liability company, is governed by the Amended and Restated Continental Cement Limited Liability Company Agreement (as amended, the “LLC Agreement”). As such, liability of the Continental Cement’s members is generally limited to the amount of their net investment in Continental Cement. Continental Cement is an indirect non–wholly owned subsidiary of Summit Materials, LLC (“Summit Materials”). |
In 2013, Continental Cement changed its fiscal year from a calendar year to a 52-53 week year with each quarter composed of 13 weeks ending on a Saturday, consistent with that of Summit Materials. Continental Cement’s fiscal year end in 2014 and 2013 was December 27 and December 28, respectively, compared to the calendar year ended December 31 in 2012. The effect of this change to Continental Cement’s financial position, results of operations and liquidity was immaterial. |
Principles of Consolidation | | (b) | Principles of Consolidation | | |
The consolidated financial statements include the accounts of Continental Cement and its wholly owned subsidiary, GAR (collectively the “Company”). All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | | (c) | Use of Estimates | | |
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible and other long-lived assets, pension and other postretirement obligations, asset retirement obligations and the redeemable members’ interest. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates and assumptions when circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, will be reflected in the Company’s consolidated financial statements when the change in estimate occurs. |
Business and Credit Concentrations | | (d) | Business and Credit Concentrations | | |
The Company’s customers are primarily located in Missouri, Iowa and Illinois. The Company’s accounts receivable balances are due primarily from ready-mixed concrete and concrete products producers and contractors within this area. Collection of these accounts is therefore dependent on the economic conditions of the area. However, credit granted within the Company’s trade area has been granted to a wide variety of customers, and management does not believe that any significant concentrations of credit exist with respect to individual customers or groups of customers who are engaged in similar activities that would be similarly affected by changes in economic or other conditions. The Company had approximately 15%, 16% and 13%, of cement sales with companies owned by a certain minority owner of the Company for the years ended December 27, 2014, December 28, 2013 and December 31, 2012, respectively. |
Accounts Receivable | | (e) | Accounts Receivable | | |
Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the status of individual accounts. In establishing the allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, the current receivables aging and current payment terms. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts. Changes in the allowance for doubtful accounts have not been material to the consolidated financial statements. |
Revenue Recognition | | (f) | Revenue Recognition | | |
Revenue from the sale of cement is recognized when evidence of an arrangement exists, the fee is fixed or determinable, title passes, which is generally when the product is shipped, and collection is reasonably assured. Cement sales are recorded net of discounts, allowances and sales taxes, as applicable. The Company records freight revenue on a net basis together with freight costs within cost of sales. |
Revenue from the receipt of waste fuels is recognized when the waste is accepted and a corresponding liability is recognized for the costs to process the waste into fuel for the manufacturing of cement or to ship the waste offsite for disposal in accordance with applicable regulations. |
Inventories | | (g) | Inventories | | |
Inventories of raw materials, work in process and finished goods are carried at the lower of cost (determined using the average cost method) or market. If items become obsolete or otherwise unusable, they will be charged to costs of production when that determination is made by management. |
Property, Plant and Equipment, net | | (h) | Property, Plant and Equipment, net | | |
Property, plant and equipment are recorded at cost, less accumulated depreciation and depletion. Expenditures for additions and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Repair and maintenance costs that do not substantially expand productive capacity or extend the life of property, plant and equipment are expensed as incurred. |
Upon disposal of an asset, the cost and related accumulated depreciation are removed from the Company’s accounts and any gain or loss is included in general and administrative expenses. |
Depreciation on property, plant and equipment is computed on a straight-line basis. These estimated useful lives are as follows: |
|
| | | | |
Buildings and improvements | | | 7—40 years | |
Plant, machinery and equipment | | | 20—40 years | |
Mobile equipment and barges | | | 15—20 years | |
Office equipment | | | 3—6 years | |
Other | | | 2—10 years | |
Depletion of mineral reserves is calculated over proven and probable reserves by the units of production method on a site-by-site basis. |
Property, plant and equipment is tested for impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. As a result, the property, plant and equipment impairment test may be at a significantly lower level than the level at which goodwill is tested for impairment. The lowest level of largely independent identifiable cash flows is at the cement operations. Assets are assessed for impairment charges when identified for disposition. Projected losses from disposition are recognized in the period in which they become estimable, which may be in advance of the actual disposition. |
The Company reviews the carrying value of property, plant and equipment for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable, considering the estimated future cash flows from its use and eventual disposition. Such indicators may include, among others, deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows or a trend of negative or declining cash flows over multiple periods. |
Accrued Mining Reclamation | | (i) | Accrued Mining Reclamation | | |
The Company's mining reclamation obligations are based on management’s estimate of future cost requirements to reclaim property at quarry sites. Estimates of these obligations have been developed based on management’s interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. The obligations were estimated based on reclamation costs at the time of the estimate, inflated until the expected time of payment using an inflation rate of 2.5%, and then discounted back to present value using a risk-free rate on obligations of similar maturity, adjusted to reflect the Company’s credit rating. Changes in the credit-adjusted, risk-free rate do not change recorded liabilities. However, subsequent increases in the recognized obligations are measured using a current credit-adjusted, risk-free rate. Decreases in the recognized obligations are measured at the initial credit-adjusted, risk-free rate. |
Significant changes in inflation rates or the amount or timing of future cost estimates typically result in both (1) a current adjustment to the recorded liability (and corresponding adjustment to the asset) and (2) a change in accretion of the liability and depreciation of the asset to be recorded prospectively over the remaining capacity of the unmined quarry. |
Goodwill | | (j) | Goodwill | | |
Goodwill is the excess of cost over the fair value of net assets of businesses acquired and was $24.1 million as of December 27, 2014 and December 28, 2013. Goodwill is not amortized, but is tested annually for impairment and whenever events or circumstances change that would make it more likely than not that an impairment may have occurred. |
The Company performs an annual impairment analysis as of the first day of the fourth quarter of each fiscal year for its one reporting unit. The goodwill impairment test first uses a qualitative approach to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If, as a result of the qualitative assessment, it is determined that an impairment is more likely than not, the two-step quantitative impairment test is then performed, otherwise further analysis is not required. The two-step quantitative impairment test compares the fair value of the reporting unit to its carrying value. Management estimates the fair value of the reporting unit primarily based on the discounted projected cash flows of the underlying operations. A number of significant assumptions and estimates are required to forecast operating cash flows, including macroeconomic trends in the private construction and public infrastructure industries, expected success in securing future sales and the appropriate interest rate used to discount the projected cash flows. During the 2014 qualitative review of goodwill, management concluded that it was more likely than not that the estimated fair value of the Company exceeded its carrying value and during the 2013 quantitative review of goodwill, management concluded that the estimated fair value of the reporting unit was substantially in excess of its carrying value, resulting in no indication of impairment. The Company has recorded no goodwill impairment charges to date. |
Income Taxes | | (k) | Income Taxes | | |
Continental Cement and GAR are limited liability companies that pass their tax attributes for federal and state tax purposes to their members and are generally not subject to federal or state income tax. |
Reclassifications | | (l) | Reclassifications | | |
Certain amounts have been reclassified in prior periods to conform to the presentation in the consolidated financial statements as of and for the year ended December 27, 2014. |