Washington, D.C. 20549

Form 10-Q

(Mark One)

x~~QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES~~

~~EXCHANGE ACT OF 1934~~

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September ~~30, 2017~~

24, 2022

o~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES~~

~~EXCHANGE ACT OF 1934~~

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

For the transition period from ____________ to

Commission file number 1-31429

Valmont Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-0351813

~~Delaware~~ (State or Other Jurisdiction of Incorporation or Organization)	~~47-0351813~~ (I.R.S. Employer Identification No.)
~~One~~ 15000 Valmont Plaza,
Omaha,Nebraska	68154
(Address of Principal Executive Offices)	~~68154-5215~~ (Zip Code)

~~(402)~~

(402) 963-1000

(Registrant’s telephone number, including area code)

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

~~________________________~~

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock $1.00 par value		VMI		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No o

☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes x☒ No o

☐

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



Large accelerated filerx	☒	Accelerated filer o	☐	Non‑accelerated filero	☐	Smaller reporting company o	☐
Emerging growth company o	~~(Do not check if a~~ ~~smaller reporting company)~~ ☐

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

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x

~~22,607,680~~

☒

21,333,058

Outstanding shares of common stock as of October ~~23, 2017~~27, 2022

Table of Contents

VALMONT INDUSTRIES, ~~INC.~~

INC

INDEX TO FORM 10-Q

		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	4
	Condensed Consolidated Balance Sheets as of September 24, 2022 and December 25, 2021	5
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended September 24, 2022 and September 25, 2021	6
	Condensed Consolidated Statements of Shareholders’ Equity for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

	PART II. OTHER INFORMATION
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39
Signatures		40

Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited):

Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine weeks

ended September 30, 2017 and September 24, 2016
3

Condensed Consolidated Statements of Comprehensive Income for the thirteen

and thirty-nine weeks ended September 30, 2017 and September 24, 2016
4
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31,
2016
5
Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended
September 30, 2017 and September 24, 2016
6
Condensed Consolidated Statements of Shareholders' Equity for the thirty-nine
weeks ended September 30, 2017 and September 24, 2016
7
Notes to Condensed Consolidated Financial Statements
8
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
31
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
40
Item 4.
Controls and Procedures
40

PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
41
Item 6.
Exhibits
41
Signatures
42

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended Thirty-nine Weeks Ended
September 30,
2017 September 24,
2016 September 30,
2017 September 24,
2016
Product sales $ 602,080
$ 544,828
$ 1,807,539
$ 1,648,530
Services sales 78,699
65,419
223,450
198,571
Net sales 680,779
610,247
2,030,989
1,847,101
Product cost of sales 462,854
409,003
1,366,875
1,220,567
Services cost of sales 54,331
46,221
152,635
135,425
Total cost of sales 517,185
455,224
1,519,510
1,355,992
Gross profit 163,594

155,023

511,479

491,109
Selling, general and administrative expenses 103,671
101,783
308,764
303,698
Operating income 59,923
53,240
202,715
187,411
Other income (expenses):
Interest expense (11,190 ) (11,100 ) (33,312 ) (33,276 )
Interest income 1,311
771
3,205
2,289
Other 517
878
1,684
452
(9,362 ) (9,451 ) (28,423 ) (30,535 )
Earnings before income taxes 50,561
43,789
174,292
156,876
Income tax expense:
Current 21,163
18,017
50,264
51,276
Deferred (7,268 ) (3,749 ) 79
(1,534 )
13,895
14,268
50,343
49,742
Net earnings 36,666
29,521
123,949
107,134
Less: Earnings attributable to noncontrolling interests (1,458 ) (1,348 ) (4,098 ) (3,966 )
Net earnings attributable to Valmont Industries, Inc. $ 35,208
$ 28,173
119,851
103,168
Earnings per share:
Basic $ 1.56
$ 1.25
$ 5.33
$ 4.56
Diluted $ 1.55
$ 1.24
$ 5.28
$ 4.54
Cash dividends declared per share $ 0.375
$ 0.375
$ 1.125
$ 1.125
Weighted average number of shares of common stock outstanding - Basic (000 omitted) 22,527
22,505
22,505
22,602
Weighted average number of shares of common stock outstanding - Diluted (000 omitted) 22,751
22,659
22,717
22,741


	Thirteen weeks ended				Thirty-nine weeks ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Product sales	$	999,131	$	782,694	$	2,926,290	$	2,283,460
Services sales		98,251		86,088		287,444		254,837
Net sales		1,097,382		868,782		3,213,734		2,538,297
Product cost of sales		739,353		585,986		2,193,846		1,712,721
Services cost of sales		72,551		55,392		192,623		163,971
Total cost of sales		811,904		641,378		2,386,469		1,876,692
Gross profit		285,478		227,404		827,265		661,605
Selling, general and administrative expenses		175,506		151,209		503,732		425,574
Operating income		109,972		76,195		323,533		236,031
Other income (expenses):
Interest expense		(11,629)		(11,031)		(34,278)		(31,466)
Interest income		507		397		1,019		894
Gain (loss) on investments - unrealized		(901)		488		(4,306)		1,556
Other		2,822		2,644		8,537		10,297
		(9,201)		(7,502)		(29,028)		(18,719)
Earnings before income taxes		100,771		68,693		294,505		217,312
Income tax expense:
Current		33,278		21,109		83,311		55,069
Deferred		(5,455)		(5,029)		(2,780)		(8,747)
		27,823		16,080		80,531		46,322
Earnings before equity in earnings of nonconsolidated subsidiaries		72,948		52,613		213,974		170,990
Equity in loss of nonconsolidated subsidiaries		(18)		(360)		(931)		(1,079)
Net earnings		72,930		52,253		213,043		169,911
Less: earnings attributable to noncontrolling interests		(818)		(603)		(2,512)		(1,137)
Net earnings attributable to Valmont Industries, Inc.	$	72,112	$	51,650	$	210,531	$	168,774
Earnings per share:
Basic	$	3.38	$	2.44	$	9.88	$	7.97
Diluted	$	3.34	$	2.40	$	9.77	$	7.86

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

Thirteen Weeks Ended Thirty-nine Weeks Ended
September 30,
2017 September 24,
2016 September 30,
2017 September 24,
2016
Net earnings $ 36,666
$ 29,521
$ 123,949
$ 107,134
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Unrealized translation gain (loss) 19,530
770
60,471
(1,938 )
Gain/(loss) on hedging activities:
Net investment hedge (740 ) 1,972
(1,816 ) 4,897
Amortization cost included in interest expense 19
18
56
56
Other comprehensive income (loss) 18,809
2,760
58,711
3,015
Comprehensive income 55,475
32,281
182,660
110,149
Comprehensive loss (income) attributable to noncontrolling interests (2,570 ) (1,618 ) (4,552 ) (5,732 )
Comprehensive income attributable to Valmont Industries, Inc. $ 52,905
$ 30,663
$ 178,108
$ 104,417


	Thirteen Weeks Ended				Thirty-nine weeks ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Net earnings	$	72,930	$	52,253	$	213,043	$	169,911
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Unrealized translation loss		(46,000)		(15,018)		(78,050)		(16,961)
Gain (loss) on hedging activities:
Cash flow hedges		—		307		—		16
Amortization cost included in interest expense		(16)		(16)		(48)		(48)
Commodity hedges		(2,233)		(5,754)		(1,185)		20,500
Realized (gain) loss on commodity hedges recorded in earnings		1,546		(9,870)		1,048		(10,140)
Cross currency swaps		5,592		2,530		10,873		4,041
Defined Benefit Pension Plan:
Actuarial loss		115		163		371		1,838
Other comprehensive loss		(40,996)		(27,658)		(66,991)		(754)
Comprehensive income		31,934		24,595		146,052		169,157
Comprehensive (income) loss attributable to noncontrolling interests		242		268		(514)		(819)
Comprehensive income attributable to Valmont Industries, Inc.	$	32,176	$	24,863	$	145,538	$	168,338

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

September 30,
2017 December 31,
2016
ASSETS
Current assets:
Cash and cash equivalents $ 493,490
$ 399,948
Receivables, net 492,842
439,342
Inventories 403,234
350,028
Prepaid expenses, restricted cash, and other assets 50,064
57,297
Refundable income taxes 8,493
6,601
Total current assets 1,448,123
1,253,216
Property, plant and equipment, at cost 1,169,854
1,105,736
Less accumulated depreciation and amortization 647,430
587,401
Net property, plant and equipment 522,424
518,335
Goodwill 336,754
321,110
Other intangible assets, net 142,090
144,378
Other assets 160,780
154,692
Total assets $ 2,610,171
$ 2,391,731

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt $ 949
$ 851
Notes payable to banks 197
746
Accounts payable 216,104
177,488
Accrued employee compensation and benefits 81,494
72,404
Accrued expenses 106,238
89,914
Dividends payable 8,478
8,445
Total current liabilities 413,460
349,848
Deferred income taxes 28,183
35,803
Long-term debt, excluding current installments 754,202
754,795
Defined benefit pension liability 199,562
209,470
Deferred compensation 48,612
44,319
Other noncurrent liabilities 13,557
14,910
Shareholders’ equity:
Preferred stock of $1 par value -
Authorized 500,000 shares; none issued —
—
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued 27,900
27,900
Retained earnings 1,974,601
1,874,722
Accumulated other comprehensive loss (288,102 ) (346,359 )
Treasury stock (601,565 ) (612,781 )
Total Valmont Industries, Inc. shareholders’ equity 1,112,834
943,482
Noncontrolling interest in consolidated subsidiaries 39,761
39,104
Total shareholders’ equity 1,152,595
982,586
Total liabilities and shareholders’ equity $ 2,610,171
$ 2,391,731


	September 24,		December 25,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	166,221	$	177,232
Receivables, net		614,411		571,593
Inventories		746,282		728,834
Contract assets		215,684		142,643
Prepaid expenses and other assets		107,476		83,646
Refundable income taxes		—		8,815
Total current assets		1,850,074		1,712,763
Property, plant and equipment, at cost		1,426,883		1,422,101
Less accumulated depreciation and amortization		830,033		823,496
Net property, plant and equipment		596,850		598,605
Goodwill		728,587		708,566
Other intangible assets, net		182,796		175,364
Other assets		263,422		251,951
Total assets	$	3,621,729	$	3,447,249

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	2,106	$	4,884
Notes payable to banks		4,935		13,439
Accounts payable		376,508		347,841
Accrued employee compensation and benefits		125,565		144,559
Contract liabilities		200,341		135,746
Other accrued expenses		136,335		108,771
Income taxes payable		10,668		—
Dividends payable		11,733		10,616
Total current liabilities		868,191		765,856
Deferred income taxes		48,542		47,849
Long-term debt, excluding current installments		935,129		947,072
Defined benefit pension liability		—		536
Operating lease liabilities		156,860		147,759
Deferred compensation		28,754		35,373
Other noncurrent liabilities		11,502		89,207
Shareholders’ equity:
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued		27,900		27,900
Additional paid in capital		13,251		1,479
Retained earnings		2,569,641		2,394,307
Accumulated other comprehensive loss		(328,120)		(263,127)
Treasury stock		(769,941)		(773,712)
Total Valmont Industries, Inc. shareholders’ equity		1,512,731		1,386,847
Noncontrolling interest in consolidated subsidiaries		60,020		26,750
Total shareholders’ equity		1,572,751		1,413,597
Total liabilities and shareholders’ equity	$	3,621,729	$	3,447,249

See accompanying notes to condensed consolidated financial statements.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

Thirty-nine Weeks Ended
September 30,
2017 September 24,
2016
Cash flows from operating activities:
Net earnings $ 123,949
$ 107,134
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization 63,500
61,242
Noncash loss on trading securities 395
973
Impairment of assets - restructuring activities —
618
Stock-based compensation 7,300
6,572
Change in fair value of contingent consideration —
(3,527 )
Defined benefit pension plan expense 481
1,486
Contribution to defined benefit pension plan (26,064 ) (712 )
Change in restricted cash - pension plan trust 12,568
(13,652 )
(Gain)/loss on sale of property, plant and equipment (732 ) 250
Deferred income taxes 79
(1,534 )
Changes in assets and liabilities:
Receivables (39,584 ) 16,436
Inventories (41,545 ) (34,413 )
Prepaid expenses and other assets (11,636 ) (10,624 )
Accounts payable 28,895
(11,338 )
Accrued expenses 20,157
3,272
Other noncurrent liabilities (1,627 ) 240
Income taxes refundable (1,732 ) 4,831
Net cash flows from operating activities 134,404
127,254
Cash flows from investing activities:
Purchase of property, plant and equipment (39,898 ) (42,233 )
Proceeds from sale of assets 1,575
3,938
Acquisitions, net of cash acquired (5,362 ) —
Proceeds from settlement of net investment hedge 5,123
—
Other, net (3,462 ) (2,824 )
Net cash flows from investing activities (42,024 ) (41,119 )
Cash flows from financing activities:
Net borrowings under short-term agreements (549 ) (128 )
Principal payments on long-term borrowings (658 ) (1,563 )
Dividends paid (25,386 ) (25,604 )
Dividends to noncontrolling interest (3,895 ) (2,527 )
Purchase of noncontrolling interest —
(11,009 )
Purchase of treasury shares —
(46,581 )
Proceeds from exercises under stock plans 12,446
6,509
Purchase of common treasury shares—stock plan exercises (3,929 ) (1,453 )
Net cash flows from financing activities (21,971 ) (82,356 )
Effect of exchange rate changes on cash and cash equivalents 23,133
(3,478 )
Net change in cash and cash equivalents 93,542
301
Cash and cash equivalents—beginning of year 399,948
349,074
Cash and cash equivalents—end of period $ 493,490
$ 349,375


	Thirty-nine weeks ended
	September 24,		September 25,
	2022		2021
Cash flows from operating activities:
Net earnings	$	213,043	$	169,911
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization		72,803		67,764
Stock-based compensation		29,998		17,895
Defined benefit pension plan benefit		(7,597)		(11,051)
Contribution to defined benefit pension plan		(17,155)		(970)
Loss (gain) on sale of property, plant and equipment		790		(1,250)
Equity in loss in nonconsolidated subsidiaries		931		1,079
Deferred income taxes		(2,780)		(8,747)
Changes in assets and liabilities:
Receivables		(60,450)		(30,709)
Inventories		(31,143)		(211,273)
Prepaid expenses and other assets (current and non-current)		6,738		(21,589)
Contract assets		(76,887)		(33,199)
Accounts payable		37,787		76,916
Accrued expenses		10,904		15,523
Contract liabilities		(10,051)		6,768
Other noncurrent liabilities		(9,312)		10,228
Income taxes payable/refundable		26,107		14,533
Net cash flows from operating activities		183,726		61,829
Cash flows from investing activities:
Purchase of property, plant and equipment		(67,122)		(80,509)
Proceeds from sale of assets		71		1,655
Acquisitions, net of cash acquired		(39,287)		(312,500)
Other, net		(108)		1,891
Net cash flows from investing activities		(106,446)		(389,463)
Cash flows from financing activities:
Proceeds from short-term borrowings		4,137		3,191
Payments on short-term borrowings		(12,366)		(23,654)
Proceeds from long-term borrowings		235,470		236,710
Principal payments on long-term borrowings		(251,155)		(66,128)
Settlement of financial derivatives		2,243		—
Dividends paid		(34,080)		(30,794)
Purchase of noncontrolling interests		(7,338)		—
Purchase of treasury shares		(20,491)		(24,101)
Proceeds from exercises under stock plans		8,778		22,747
Purchase of common treasury shares—stock plan exercises		(4,341)		(16,955)
Net cash flows from financing activities		(79,143)		101,016
Effect of exchange rate changes on cash and cash equivalents		(9,148)		(4,313)
Net change in cash and cash equivalents		(11,011)		(230,931)
Cash and cash equivalents—beginning of year		177,232		400,726
Cash and cash equivalents—end of period	$	166,221	$	169,795

See accompanying notes to condensed consolidated financial ~~statements.~~statements

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)

Common
stock Additional
paid-in
capital Retained
earnings Accumulated
other
comprehensive
income (loss) Treasury
stock Noncontrolling
interest in
consolidated
subsidiaries Total
shareholders’
equity
Balance at December 26, 2015 $ 27,900
$ —
$ 1,729,679
$ (267,218 ) $ (571,920 ) $ 46,770
$ 965,211
Net earnings —
—
103,168
—
—
3,966
107,134
Other comprehensive income (loss) —
—
—
1,249
—
1,766
3,015
Cash dividends declared —
—
�� (25,482 ) —
—
—
(25,482 )
Dividends to noncontrolling interests —
—
—
—
—
(2,527 ) (2,527 )
Purchase of noncontrolling interests —
(137 ) —
—
—
(10,872 ) (11,009 )
Purchase of treasury shares; 384,622 shares acquired —
—
—
—
(46,581 ) —
(46,581 )
Stock plan exercises; 10,747 shares acquired —
—
—
—
(1,453 ) —
(1,453 )
Stock options exercised; 68,631 shares issued —
(6,435 ) 4,582
—
8,362
—
6,509
Stock option expense —
4,358
—
—
—
—
4,358
Stock awards; 6,725 shares issued —
2,214
—
—
912
—
3,126
Balance at September 24, 2016 $ 27,900
$ —
$ 1,811,947
$ (265,969 ) $ (610,680 ) $ 39,103
$ 1,002,301
Balance at December 31, 2016 $ 27,900
$ —
$ 1,874,722
$ (346,359 ) $ (612,781 ) $ 39,104
$ 982,586
Net earnings —
—
119,851
—
—
4,098
123,949
Other comprehensive income (loss) —
—
—
58,257
—
454
58,711
Cash dividends declared —
—
(25,417 ) —
—
—
(25,417 )
Dividends to noncontrolling interests —
—
—
—
—
(3,895 ) (3,895 )
Stock plan exercises; 24,672 shares acquired —
—
—
—
(3,929 ) —
(3,929 )
Stock options exercised; 106,351 shares issued —
(7,300 ) 5,445
—
14,301
—
12,446
Stock option expense —
3,868
—
—
—
—
3,868
Stock awards; 6,034 shares issued —
3,432
—
—
844
—
4,276
Balance at September 30, 2017 $ 27,900
$ —
$ 1,974,601
$ (288,102 ) $ (601,565 ) $ 39,761
$ 1,152,595


							Accumulated				Noncontrolling
			Additional				other				interest in		Total
	Common		paid-in		Retained		comprehensive		Treasury		consolidated		shareholders’
	stock		capital		earnings		loss		stock		subsidiaries		equity
Balance at June 26, 2021	$	27,900	$	—	$	2,337,015	$	(283,435)	$	(786,857)	$	26,861	$	1,321,484
Net earnings		—		—		51,650		—		—		603		52,253
Other comprehensive loss		—		—		—		(26,787)		—		(871)		(27,658)
Cash dividends declared ($0.50 per share)		—		—		(10,617)		—		—		—		(10,617)
Purchase of treasury shares; 10,759 shares acquired		—		—		—		—		(2,500)		—		(2,500)
Stock plan exercises; 144 shares acquired		—		—		—		—		(33)		—		(33)
Stock options exercised; 20,749 shares issued		—		(2,194)		27		—		5,023		—		2,856
Stock option expense		—		618		—		—		—		—		618
Stock awards; 494 shares issued		—		8,244		—		—		85		—		8,329
Balance at September 25, 2021	$	27,900	$	6,668	$	2,378,075	$	(310,222)	$	(784,282)	$	26,593	$	1,344,732
Balance at June 25, 2022	$	27,900	$	4,321	$	2,509,262	$	(288,184)	$	(764,917)	$	64,768		1,553,150
Net earnings		—		—		72,112		—		—		818		72,930
Other comprehensive loss		—		—		—		(39,936)		—		(1,060)		(40,996)
Cash dividends declared ($0.55 per share)		—		—		(11,733)		—		—		—		(11,733)
Purchase of noncontrolling interest		—		1,410		—		—		—		(4,456)		(3,046)
Addition of noncontrolling interest due to acquisition		—		—		—		—		—		(50)		(50)
Purchase of treasury shares; 38,606 shares acquired		—		—		—		—		(10,715)		—		(10,715)
Stock plan exercises; 507 shares acquired		—		—		—		—		(136)		—		(136)
Stock options exercised; 20,448 shares issued		—		(2,859)		—		—		5,791		—		2,932
Stock option expense		—		749		—		—		—		—		749
Stock awards; 270 shares issued		—		9,630		—		—		36		—		9,666
Balance at September 24, 2022	$	27,900	$	13,251	$	2,569,641	$	(328,120)	$	(769,941)	$	60,020	$	1,572,751

See accompanying notes to the condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


							Accumulated				Noncontrolling
			Additional				other				interest in		Total
	Common		paid-in		Retained		comprehensive		Treasury		consolidated		shareholders’
	stock		capital		earnings		loss		stock		subsidiaries		equity
Balance at December 26, 2020	$	27,900	$	335	$	2,245,035	$	(309,786)	$	(781,422)	$	25,774	$	1,207,836
Net earnings		—		—		168,774		—		—		1,137		169,911
Other comprehensive loss		—		—		—		(436)		—		(318)		(754)
Cash dividends declared ($1.50 per share)		—		—		(31,848)		—		—		—		(31,848)
Purchase of treasury shares; 103,056 shares acquired		—		—		—		—		(24,100)		—		(24,100)
Stock plan exercises; 71,412 shares acquired		—		—		—		—		(16,955)		—		(16,955)
Stock options exercised; 164,872 shares issued		—		(10,294)		(3,886)		—		36,927		—		22,747
Stock option expense		—		1,885		—		—		—		—		1,885
Stock awards; 9,554 shares issued		—		14,742		—		—		1,268		—		16,010
Balance at September 25, 2021	$	27,900	$	6,668	$	2,378,075	$	(310,222)	$	(784,282)	$	26,593	$	1,344,732
Balance at December 25, 2021	$	27,900	$	1,479	$	2,394,307	$	(263,127)	$	(773,712)	$	26,750	$	1,413,597
Net earnings		—		—		210,531		—		—		2,512		213,043
Other comprehensive loss		—		—		—		(64,993)		—		(1,998)		(66,991)
Cash dividends declared ($1.65 per share)		—		—		(35,197)		—		—		—		(35,197)
Purchase of noncontrolling interest		—		1,599		—		—		—		(8,937)		(7,338)
Addition of noncontrolling interest due to acquisition		—		—		—		—		—		41,693		41,693
Purchase of treasury shares; 77,410 shares acquired		—		—		—		—		(20,491)		—		(20,491)
Stock plan exercises; 19,282 shares acquired		—		—		—		—		(4,341)		—		(4,341)
Stock options exercised; 69,025 shares issued		—		(4,946)		—		—		13,724		—		8,778
Stock option expense		—		2,301		—		—		—		—		2,301
Stock awards; 80,163 shares issued		—		12,818		—		—		14,879		—		27,697
Balance at September 24, 2022	$	27,900	$	13,251	$	2,569,641	$	(328,120)	$	(769,941)	$	60,020	$	1,572,751

See accompanying notes to the condensed consolidated financial statements.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Consolidated Financial Statements

The Condensed Consolidated Balance Sheet as of September ~~30, 2017~~,24, 2022, the Condensed Consolidated Statements of Earnings, ~~and~~ Comprehensive Income, and Shareholders’ Equity for the thirteen and thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September ~~24, 2016~~,25, 2021, and the Condensed Consolidated ~~Statements~~Statement of Cash Flows ~~and Shareholders' Equity~~ for the thirty-nine ~~week~~ ~~periods~~weeks then ended have been prepared by ~~the Company,~~Valmont Industries, Inc. (the “Company”), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of September ~~30, 2017~~24, 2022 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016. The accounting policies and methods of computation followed in these interim financial statements are the same as those followed in the financial statements for the year ended~~ ~~December 31, 2016~~.25, 2021. The results of operations for the period ended September ~~30, 2017~~24, 2022 are not necessarily indicative of the operating results for the full year.

~~Inventories~~

~~Approximately~~ ~~36%~~

Change in Reportable Segments

During the first quarter of 2022, the Company’s Chief Executive Officer, as the chief operating decision maker ("CODM"), made changes to the Company’s management structure and ~~38% of inventory is valued at~~began to manage the ~~lower of cost, determined on~~business, allocate resources, and evaluate performance under the ~~last-in, first-out (LIFO) method, or market as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~.new structure. As a result, the Company has realigned its reportable segment structure. All ~~other inventory~~prior period segment information has been recast to reflect this change in reportable segments. Refer to Note 7 for additional information.

Inventories

Inventory is valued at the lower of cost, determined on the first-in, first-out ~~(FIFO)~~(“FIFO”) method or ~~market.~~net realizable value. Finished goods and manufactured goods inventories include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials to manufactured and finished goods. ~~The excess of replacement cost of inventories over the LIFO value is approximately $40,886 and $38,047 at September 30, 2017 and~~ ~~December 31, 2016, respectively.~~

Inventories consisted of the following:


	September 24,		December 25,
	2022		2021
Raw materials and purchased parts	$	274,713	$	278,107
Work-in-process		77,806		63,628
Finished goods and manufactured goods		393,763		387,099
Total Inventory	$	746,282	$	728,834

Income Taxes

Earnings before income taxes for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021, were as follows:


	Thirteen weeks ended				Thirty-nine weeks ended
	2022		2021		2022		2021
United States	$	41,146	$	47,784	$	164,177	$	156,028
Foreign		59,625		20,909		130,328		61,284
	$	100,771	$	68,693	$	294,505	$	217,312

September 30,
2017 December 31,
2016
Raw materials and purchased parts $ 175,222
$ 143,659
Work-in-process 35,126
27,291
Finished goods and manufactured goods 233,772
217,125
Subtotal 444,120
388,075
Less: LIFO reserve 40,886
38,047
$ 403,234
$ 350,028

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~

~~Income Taxes~~

~~Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries for the~~ ~~thirteen and thirty-nine weeks ended September 30, 2017 and September 24, 2016, were as follows:~~

Thirteen Weeks Ended Thirty-nine Weeks Ended
2017 2016 2017 2016
United States $ 28,886
$ 21,550
$ 115,082
$ 105,390
Foreign 21,675
22,239
59,210
51,486
$ 50,561
$ 43,789
$ 174,292
$ 156,876

Pension Benefits

The Company incurs expenses in connection with the Delta Pension Plan ~~("DPP"~~(“DPP”). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.

The components of the net periodic pension (benefit) expense for the thirteen and thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September ~~24, 2016~~25, 2021 were as follows:

Thirteen Weeks Ended Thirty-nine Weeks Ended
Net periodic (benefit) expense: 2017 2016 2017 2016
Interest cost $ 4,676
$ 6,092
$ 13,475
$ 19,134
Expected return on plan assets (5,277 ) (5,565 ) (15,208 ) (17,648 )
Amortization of actuarial loss 768
—
2,214
—
Net periodic expense $ 167
$ 527
$ 481
$ 1,486


	Thirteen weeks ended				Thirty-nine weeks ended
Net periodic (benefit) expense:	2022		2021		2022		2021
Interest cost	$	2,930	$	2,479	$	9,452	$	7,508
Expected return on plan assets		(5,400)		(6,957)		(17,420)		(21,061)
Amortization of actuarial loss		115		827		371		2,502
Net periodic benefit	$	(2,355)	$	(3,651)	$	(7,597)	$	(11,051)

Stock Plans

The Company maintains ~~stock‑based~~stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, ~~non-vested~~restricted stock awards, restricted stock units, and bonuses of common stock. At September ~~30, 2017, 704,818~~24, 2022,1,881,267 shares of common stock remained available for issuance under the plans. ~~Shares and options issued and available are subject to changes in capitalization.~~

Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three ~~to six~~ years or on the grant’s fifth ~~anniversary of the grant.~~

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~

anniversary. Expiration of grants is ~~from~~ seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant.

The ~~Company's~~Company’s compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen and thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September ~~24, 2016~~,25, 2021, respectively, were as follows:

Thirteen Weeks Ended Thirty-nine Weeks Ended
2017 2016 2017 2016
Compensation expense $ 1,290
$ 1,399
$ 3,868
$ 4,358
Income tax benefits 496
539
1,489
1,678


	Thirteen weeks ended				Thirty-nine weeks ended
	2022		2021		2022		2021
Compensation expense	$	10,415	$	8,947	$	29,998	$	17,895
Income tax benefits		2,604		2,237		7,500		4,474

Fair Value

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

ASC 820 establishes a ~~three‑level~~three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

Trading Securities: The ~~assets and liabilities recorded for~~majority of the Company’s trading securities represent the investments held in the Valmont Deferred Compensation Plan (the “DCP”). The assets and liabilities of ~~$39,283~~the DCP at September 24, 2022 of $23,757 ($~~35,784~~29,982 at December ~~31, 2016)~~25, 2021) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities, considering the ~~employee's~~employee’s ability to change investment allocation of their deferred compensation at any time.

Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate.

Marketable Securities: The Company's marketable securities consist of short-term investments in certificates of deposit.


			Fair Value Measurement Using:
			Quoted Prices in		Significant Other		Significant
			Active Markets		Observable		Unobservable
	Carrying Value		for Identical		Inputs		Inputs
	September 24, 2022		Assets (Level 1)		(Level 2)		(Level 3)
Assets:
Trading securities	$	23,839	$	23,839	$	—	$	—
Derivative financial instruments, net	$	8,690	$	—	$	8,690	$	—
Marketable securities	$	6,292	$	—	$	6,292	$	—


			Fair Value Measurement Using:
			Quoted Prices in		Significant Other		Significant
	Carrying Value		Active Markets		Observable		Unobservable
	December 25,		for Identical		Inputs		Inputs
	2021		Assets (Level 1)		(Level 2)		(Level 3)
Assets (Liabilities):
Trading securities	$	30,076	$	30,076	$	—	$	—
Derivative financial instruments, net	$	(4,007)	$	—	$	(4,007)	$	—

Long-Lived Assets

The Company’s other non-financial assets include goodwill and other intangible assets, which are classified as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of annual impairment testing.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~

Leases

The ~~Company's ownership of shares~~Company’s operating leases are included in ~~Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at $1,779~~other assets and $2,016 as of September 30, 2017 and December 31, 2016, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.

Fair Value Measurement Using:
Carrying Value
September 30, 2017 Quoted Prices in
Active Markets
for Identical
Assets (Level 1) Significant Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets:
Trading Securities $ 41,062
$ 41,062
$ —
$ —

Fair Value Measurement Using:
Carrying Value
December 31,
2016 Quoted Prices in
Active Markets
for Identical
Assets (Level 1) Significant Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets:
Trading Securities $ 37,800
$ 37,800
$ —
$ —

operating lease liabilities.

Comprehensive Income

(Loss)

Comprehensive income (loss) includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. Accumulated other comprehensive income (loss) consisted of the following at September ~~30, 2017~~24, 2022 and December ~~31, 2016:~~25, 2021:


	Foreign						Accumulated
	Currency		Gain on		Defined		Other
	Translation		Hedging		Benefit		Comprehensive
	Adjustments		Activities		Pension Plan		Loss
Balance at December 25, 2021	$	(243,350)	$	15,777	$	(35,554)	$	(263,127)
Current-period comprehensive income (loss)		(76,052)		10,688		371		(64,993)
Balance at September 24, 2022	$	(319,402)	$	26,465	$	(35,183)	$	(328,120)

Revenue Recognition

The Company determines the appropriate revenue recognition for our contracts by analyzing the type, terms and conditions of each contract or arrangement with a customer. Contracts with customers for all businesses are fixed-price with sales tax excluded from revenue, and do not include variable consideration. Discounts included in contracts with customers, typically early pay discounts, are recorded as a reduction of net sales in the period in which the sale is recognized. Contract revenues are classified as product when the performance obligation is related to the manufacturing of goods. Contract revenues are classified as service when the performance obligation is the performance of a service. Service revenue is primarily related to the Coatings and Technology Products and Services product lines.

Customer acceptance provisions exist only in the design stage of our products and acceptance of the design by the customer is required before the project is manufactured and delivered to the customer. The Company is not entitled to any compensation solely based on design of the product and does not recognize this service as a separate performance obligation and, therefore, no revenue is recognized with the design stage. No general rights of return exist for customers once the product has been delivered and the Company establishes provisions for estimated warranties. The Company does not sell extended warranties for any of its products.

Shipping and handling costs associated with sales are recorded as cost of goods sold. The Company elected to use the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably recognize freight expense as the structure is being manufactured, when the revenue from the associated customer contract is being recognized over time. With the exception of the transmission, distribution, and substation structures ("TD&S") product line, the renewable energy product lines, and the telecommunication structures product line, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company has elected to not disclose the partially satisfied performance obligation at the end of the period when the contract has an original expected duration of one year or less. In addition, the Company does not adjust the amount of consideration to be received in a contract for any significant financing component if payment is expected within twelve months of transfer of control of goods or services.

The Company’s contract asset as of September 24, 2022 and December 25, 2021 was $215,684 and $142,643, respectively. While most of the Infrastructure segment customers are generally invoiced upon shipment or delivery of the goods to the customer’s specified location, certain customers are also invoiced by advanced billings or progress billings.

Foreign Currency Translation Adjustments Gain/(Loss) on Hedging Activities Defined Benefit Pension Plan Accumulated Other Comprehensive Loss
Balance at December 31, 2016 $ (251,228 ) $ 7,978
$ (103,109 ) $ (346,359 )
Current-period comprehensive income (loss) 60,017
(1,760 ) —
58,257
Balance at September 30, 2017 $ (191,211 ) $ 6,218
$ (103,109 ) $ (288,102 )

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~

~~Net Investment Hedge~~

~~In the second quarter of 2016, the Company entered into a one-year foreign currency forward~~

At September 24, 2022 and December 25, 2021, total contract ~~which qualified~~liabilities were $200,488 and $213,203, respectively. At September 24, 2022, $200,341 was recorded as ~~a net investment hedge, in order to mitigate foreign currency risk on a portion of our investments denominated in British pounds. The forward~~ contract ~~had a notional amount to sell British pounds~~liabilities and ~~receive $44,000, and matured in May 2017. The realized gain of~~ ~~$5,123 ($3,150 after tax)~~ ~~has been deferred in~~$147 was recorded as other ~~comprehensive income where it will remain until the Company's net investments in its British subsidiaries are divested. No ineffectiveness resulted from the hedge prior to its maturity.~~

In the third quarter of 2017, the Company entered into two six-month foreign currency forward contracts which qualified as net investment hedges, in order to mitigate foreign currency risk on our grinding media business that is denominated in both Australian dollars and British pounds. The Company announced its intention to divest of this business in August 2017 and regulatory approval in Australia is currently pending. The forward contracts have a maturity date of January 2018 and a notional amount to sell Australian dollars and British pounds to receive $27,000 and $18,500, respectively. The unrealized loss recorded at September 30, 2017 is $740 and is included in Accounts Payablenoncurrent liabilities on the ~~Consolidated Balance Sheets. No ineffectiveness has resulted from~~condensed consolidated balance sheets. Additional details are as follows:

●

During the thirteen and thirty-nine weeks ended September 24, 2022, the Company recognized $16,826 and $75,998 of revenue that was included in the total contract liability as of December 25, 2021. The revenue recognized was due to applying advance payments received for performance obligations completed during the period;

●

In the thirteen and thirty-nine weeks ended September 25, 2021, the Company recognized $18,981 and $88,350 of revenue that was included in the total contract liability as of December 26, 2020. The revenue recognized was due to applying advance payments received for performance obligations completed during the period; and

●

At September 24, 2022, the Company had $147 of remaining performance obligations on contracts with an original expected duration of one year or more and expects to complete the remaining performance obligations on these contracts within the next 12 to 24 months.

Segment and Product Line Revenue Recognition

Infrastructure Segment

Steel and concrete utility structures within the hedge and the balance is recorded in the Consolidated Statement of Other Comprehensive Income within gain/(loss) on hedging activities. When the forward contract matures, the realized gain/(loss) will be deferred in Other Comprehensive Income where it will remain until the grinding media business is divested.

~~Recently Issued Accounting Pronouncements~~

~~In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-9,~~ ~~Revenue from Contracts with Customers~~ ~~(Topic 606), which supersedes the revenue recognition requirements in~~ ~~Accounting Standards Codification ("ASC") 605,~~ ~~Revenue Recognition~~. ~~The new revenue recognition standard~~ requires entities to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This standard is effective for interim and annual reporting periods beginning after December 15, 2017, and can be adopted either retrospectively or as a cumulative effect adjustment as of the date of adoption. Early adoption is permitted for interim and annual periods beginning after December 15, 2016. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its consolidated results of operations and financial position. One area under assessment is the timing of revenue recognition for the Company’sTD&S product ~~lines that~~line are ~~custom~~ engineered to ~~a single customer’s~~customer specifications resulting in limited ability ~~that~~to sell the ~~asset can be used~~structure to a different customer if an order is canceled after production commences. The continuous transfer of control to the customer is evidenced either by contractual termination clauses or by our rights to payment for ~~another customer. These~~work performed to-date plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment. For our TD&S and telecommunication structure product lines, ~~reside in~~we generally recognize revenue on an inputs basis, using total production hours incurred to-date for each order as a percentage of total hours estimated to produce the ~~Utility~~order. The completion percentage is applied to the order’s total revenue and ~~Engineered Support Structures segments. When~~total estimated costs to determine reported revenue, cost of goods sold and gross profit. Production of an order, once started, is typically completed within three months. Depending on the ~~terms and conditions allow the Company to bill a customer for full compensation on a canceled order for the performance completed to date,~~product sold, revenue ~~will be~~from renewable energy is recognized ~~over the production period and not the current practice which is~~both upon shipment or ~~time~~delivery of ~~delivery~~goods to the ~~customer. The Company is also evaluating the necessary changes to its internal control processes to recognize revenue over time~~customer depending on contract terms, or by using an inputs method, based ~~model after adoption. Based~~ on the ~~current status~~ratio of costs incurred to-date to the total estimated costs at completion of the ~~evaluation,~~performance obligation. External sales agents are used in certain TD&S sales and the ~~adoption~~Company has chosen to expense estimated commissions owed to third parties by recognizing them proportionately as the goods are manufactured.

For the structures sold for lighting and transportation and for the majority of telecommunication products, revenue is recognized upon shipment or delivery of goods to the customer depending on contract terms, which is the same point in time that the customer is billed. There are also large regional customers who have unique product specifications for telecommunication structures. When the customer contract includes a cancellation clause that would require them to pay for work completed plus a reasonable margin if an order was canceled, revenue is recognized over time based on hours worked as a percent of total estimated hours to complete production.

The Coatings product line revenues are derived by providing coating services to customers’ products, which include galvanizing, anodizing, and powder coating. Revenue is recognized once the coating service has been performed and the goods are ready to be picked up or delivered to the customer which is the same time that the customer is billed.

Agriculture Segment

Revenue recognition from the manufacture of irrigation equipment and related parts and services (including tubular products for industrial customers) is generally upon shipment of the ~~standard~~goods to the customer which is ~~not expected to have~~the same point in time that the customer is billed. The remote monitoring subscription services recognized as part of technology services product line are primarily billed annually and revenue is recognized on a ~~material effect on~~straight-line basis over the ~~amounts or timing~~subsequent twelve months.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Disaggregation of revenue ~~recognition for~~by product line is disclosed in the ~~Company’s other segments. The Company expects to adopt the new standard using the modified retrospective approach effective January 1, 2018.~~

Business Segments and Related Revenue Information footnote (see note 7).

Recently Issued Accounting Pronouncements (not yet adopted)

In ~~February 2016,~~September 2022, the FASB issued ASU ~~2016-02,~~ ~~Leases~~No. 2022-04: Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations, which ~~provides revised~~requires all buyers that use supplier finance programs to enhance the transparency of such programs to allow financial statement users to understand the effect on working capital, liquidity and cash flows. The new guidance ~~on leases requiring lessees~~requires disclosure of key terms of the program, including a description of the payment terms, payment timing and assets pledged as security or other forms of guarantees provided to ~~recognize~~the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a ~~right-of-use asset~~description of where these obligations are presented in the balance sheet and a ~~lease liability for virtually all~~rollforward of ~~their leases (other than leases that meet~~ the ~~definition of a short-term lease).~~obligation during the annual period. The liability will be equal to the present value of lease payments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. ASU 2016-02guidance is effective in the first quarter of 2023, except for ~~interim and annual reporting periods beginning after December 15, 2018 and~~the rollforward, which is ~~to be applied on a modified retrospective transition.~~ ~~The Company~~effective in 2024. Early adoption is permitted. We are currently evaluating the effect of adopting this ~~new~~ accounting ~~guidance but expects~~guidance.

In March 2020, the ~~adoption will result in a significant increase in total assets~~FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and ~~liabilities.~~

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)~~

exceptions for applying GAAP principles to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued due to reference rate reform. In ~~August 2016,~~January 2021, the FASB issued ASU ~~2016-15,~~ ~~Classification~~No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified that certain optional expedients and exceptions in Topic 848 apply to derivative instruments that are affected by the discounting transition due to reference rate reform. The Company has not used any of ~~Certain Cash Receipts~~the accommodations to date but may use them up until December 31, 2022.

(2) ACQUISITIONS

Acquisitions of Businesses

On June 1, 2022, the Company acquired approximately 51% of ConcealFab for $39,287 in cash (net of cash acquired) and ~~Cash Payments~~subject to working capital adjustments. Approximately $1,850 of the purchase price is contingent on seller representations and warranties that will be settled within 18 months of the acquisition date. ConcealFab is located in Colorado Springs, Colorado and its operations are reported in the ~~Statement of Cash Flows~~, which provides more specific guidance on cash flow presentation for certain transactions. ASU 2016-15 is effective for interim periods and fiscal years beginning after December 15, 2017, with early adoption permitted.Infrastructure segment. The ~~Company does not expect the provisions of this new standard will have a material impact on the consolidated financial statements and plans~~acquisition was made to ~~adopt it in the first quarter of 2018.~~

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment,~~ which eliminates Step 2 from the goodwill impairment test. ASU 2017-04 is effective for periods and fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard in the third quarter of 2017 which is the same period as it performs the annual goodwill impairment testing.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Presentation of Net Periodic Benefit Cost Related to Defined Benefit Plans,~~ which amends the income statement presentation requirements for the components of net periodic benefit cost for an entity's defined benefit pension and post-retirement plans. ASU 2017-07 is effective for periods and fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of any annual period for which an entity's financial statements have not been issued. The Company does not believe this ASU will have a material impact on the consolidated financial statements and plans to adopt this ASU in the first quarter of 2018.

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Targeted Improvements to Accounting for Hedging Activities~~, which improves the financial reporting of hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 is effective for periods and fiscal years beginning after December 15, 2018. Early adoption is permitted for any interim period post issuance. The Company does not believe the adoption of this ASU will have a material impact on the consolidated financial statements.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(2) ACQUISITIONS~~

~~On July 31, 2017,~~allow the Company purchased Aircon Guardrails Private Limited ("Aircon") for $5,362 in cash, net of cash acquired, plus assumed liabilities. Aircon produces highway safety systems including guardrails, structural metal products,to incorporate innovative 5G infrastructure and solar structural products in India with annual sales of approximately $10,000. In the preliminary purchase price allocation, goodwill of $3,327 and $2,109 of customer relationships and other intangible assets were recorded.passive intermodulation mitigation solutions into our advanced infrastructure portfolio. Goodwill is not deductible for tax purposes. ~~This business is included in the Engineered Support Structures segment~~The amount allocated to goodwill was primarily attributable to anticipated synergies and ~~was acquired to expand the Company's geographic presence in the Asia-Pacific region.~~other intangibles that do not qualify for separate recognition. The Company expects to finalize the purchase price allocation early in the first quarter of 2023.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed of ConcealFab as of the date of acquisition:


	As of June 1,
	2022
Current assets	$	21,133
Customer relationships		26,200
Trade name		5,000
Property, plant & equipment		3,813
Other assets		9,108
Goodwill		42,465
Total fair value of assets acquired	$	107,719
Current liabilities		6,658
Long-term debt		2,038
Operating lease liabilities		7,812
Deferred taxes		5,464
Other noncurrent liabilities		12
Total fair value of liabilities assumed	$	21,984
Non-controlling interest in consolidated subsidiaries		41,693
Net assets acquired	$	44,042

On May 12, 2021, the Company acquired the outstanding shares of Prospera, an artificial intelligence company focused on machine learning and computer vision in agriculture, for $300,000 in cash (net of cash acquired). The acquisition of Prospera, located in Tel Aviv, Israel, was made to allow the Company to accelerate innovation with machine learning for agronomy and is reported in the Agriculture segment. Goodwill is not deductible for tax purposes, the trade name will be amortized over 7 years, and the developed technology asset will be amortized over 5 years. The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do not qualify for separate recognition. The Company finalized the purchase price allocation in the fourth quarter of ~~2017.~~ 2021.

The following table summarizes the fair values of the assets acquired and liabilities assumed of Prospera as of the date of acquisition:


	As of May 12,
	2021
Current assets	$	647
Developed technology		32,900
Trade name		2,850
Property, plant & equipment		1,063
Goodwill		273,453
Total fair value of assets acquired	$	310,913
Current liabilities		2,690
Deferred taxes		8,223
Total fair value of liabilities assumed	$	10,913
Net assets acquired	$	300,000

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

On April 20, 2021 the Company acquired the assets of PivoTrac for $12,500 in cash. The agreed upon purchase price was $14,000, with $1,500 being held back for seller representations and warranties. The acquisition of PivoTrac, located in Texas, was made to allow the Company to advance its technology strategy and increase its number of connected agricultural devices and will be reported in the Agriculture segment. The fair values assigned were $10,800 for goodwill, $2,627 for customer relationships, and the remainder is net working capital. Goodwill is not deductible for tax purposes and the customer relationship will be amortized over 8 years. The Company finalized the purchase price allocation in the second quarter of 2022.

Proforma disclosures were omitted for these acquisitions as ~~this business does~~the they do not have a significant impact on the ~~Company's~~Company’s financial results.

~~Acquisitions~~

Acquisition of Noncontrolling Interests

~~In April 2016,~~

On August 10, 2022, the Company acquired the remaining ~~30%~~9% of ~~IGC Galvanizing Industries (M) Sdn Bhd that it did not own~~Convert Italy S.p.A. for ~~$5,841. In June 2016,~~$3,046. As this transaction was for the ~~Company acquired 5.2%~~acquisition of ~~the remaining 10% of Valmont SM that it did not own for $5,168. As these transactions were for acquisitions of part or~~ all of the remaining shares of consolidated ~~subsidiaries~~subsidiary with no change in control, ~~they were~~it was recorded within ~~shareholders'~~shareholders’ equity and as a financing cash flow in the Consolidated Statements of Cash Flows.

~~3) RESTRUCTURING ACTIVITIES~~

~~In April 2015, the Company's Board of Directors authorized a broad restructuring plan (the "2015 Plan") to respond to the market environment in certain businesses. During fiscal 2016,~~

On May 10, 2022, the Company ~~incurred pre-tax restructuring charges~~acquired the remaining 20% of ~~$4,581 as it completed~~Valmont West Coast Engineering Ltd. for $4,292. As this transaction was for the ~~2015 Plan.~~

~~In 2016,~~acquisition of all of the ~~Company identified and executed further region specific restructuring activities (the "2016 Plan") and incurred $5,045~~remaining shares of pre-tax restructuring expenses in cost of sales and $2,780 of pre-tax restructuring expense in SG&A in 2016. Within the total $7,825, were pre-tax asset impairments of $1,099. The 2016 Plan was primarily completed by year-end 2016. The Energy and Mining segment incurred $1,607, the Coatings segment incurred $305, and Corporate incurred approximately $225 of restructuring expenses during the third quarter of 2016. A significantconsolidated subsidiary with no change in ~~market conditions~~control, it was recorded within shareholders’ equity and as a financing cash flow in ~~any~~the Consolidated Statements of ~~the Company's segments may affect the Company's assessment~~Cash Flows.

(3) GOODWILL AND INTANGIBLE ASSETS

Amortized Intangible Assets

The components of ~~necessity for further restructuring activities.~~

~~Liabilities recorded for the restructuring plans~~amortized intangible assets as of September 24, 2022 and ~~changes therein for the first three quarters of fiscal 2017~~December 25, 2021 were as follows:


	September 24, 2022
	Gross				Weighted
	Carrying		Accumulated		Average
	Amount		Amortization		Life
Customer Relationships	$	241,049	$	160,896	13 years
Patents & Proprietary Technology		57,202		19,572	8 years
Trade Name		2,850		543	7 years
Other		4,415		4,091	6 years
	$	305,516	$	185,102


	December 25, 2021
	Gross				Weighted
	Carrying		Accumulated		Average
	Amount		Amortization		Life
Customer Relationships	$	224,597	$	160,626	13 years
Patents & Proprietary Technology		58,699		13,955	9 years
Trade Name		2,850		183	7 years
Other		4,534		3,959	6 years
	$	290,680	$	178,723

Balance at December 31, 2016 Recognized Restructuring Expense Costs Paid or Otherwise Settled Balance at September 30, 2017
Severance $ 1,597
$ —
$ (1,597 ) $ —
Other cash restructuring expenses 4,581
—
(3,377 ) 1,204
Total $ 6,178
$ —
$ (4,974 ) $ 1,204

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(4) GOODWILL AND INTANGIBLE ASSETS~~

~~Amortized Intangible Assets~~

~~The components of amortized intangible assets at~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~were as follows:~~

September 30, 2017
Gross
Carrying
Amount Accumulated
Amortization Weighted
Average
Life
Customer Relationships $ 200,269
$ 126,845
13 years
Proprietary Software & Database 3,687
3,111
8 years
Patents & Proprietary Technology 6,633
3,859
11 years
Other 4,807
4,032
3 years
$ 215,396
$ 137,847

December 31, 2016
Gross
Carrying
Amount Accumulated
Amortization Weighted
Average
Life
Customer Relationships $ 191,316
$ 111,342
13 years
Proprietary Software & Database 3,616
3,056
8 years
Patents & Proprietary Technology 6,434
3,420
11 years
Other 3,713
3,668
3 years
$ 205,079
$ 121,486

Amortization expense for intangible assets for the thirteen and thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September ~~24, 2016~~,25, 2021, respectively was as follows:

Thirteen Weeks Ended Thirty-nine Weeks Ended
2017 2016 2017 2016
4,025
3,964
11,792
12,037


	Thirteen weeks ended				Thirty-nine weeks ended
	2022		2021		2022		2021
Amortization expense	$	5,386	$	6,137	$	16,766	$	15,551

Estimated annual amortization expense related to ~~finite‑lived~~finite-lived intangible assets is as follows:

Estimated
Amortization
Expense
2017 $ 15,823
2018 14,492
2019 13,718
2020 12,608
2021 10,474


	Estimated
	Amortization
	Expense
2022	$	22,021
2023		20,631
2024		18,703
2025		17,269
2026		12,743

The useful lives assigned to ~~finite‑lived~~finite-lived intangible assets included consideration of factors such as the Company’s past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company’s expected use of the intangible asset.

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(4) GOODWILL AND INTANGIBLE ASSETS (Continued)~~

Non-amortized intangible assets

Intangible assets with indefinite lives are not ~~amortized.~~amortized and consist solely of trade names. The carrying ~~values~~value of trade names at September ~~30, 2017~~24, 2022 and December ~~31, 2016~~ ~~were~~25, 2021 are as follows:

September 30,
2017 December 31,
2016 Year Acquired
Webforge $ 9,362
$ 8,624
2010
Valmont SM 9,839
8,765
2014
Newmark 11,111
11,111
2004
Ingal EPS/Ingal Civil Products 7,633
7,032
2010
Donhad 5,758
5,305
2010
Shakespeare 4,000
4,000
2014
Industrial Galvanizers 2,390
2,201
2010
Other 14,448
13,747

$ 64,541
$ 60,785


	September 24,		December 25,		Year
	2022		2021		Acquired
Newmark	$	11,111	$	11,111	2004
Convert Italia S.p.A		7,266		8,479	2018
Webforge		6,375		7,877	2010
Ingal EPS/Ingal Civil Products		6,181		7,637	2010
Valmont SM		5,209		6,082	2014
ConcealFab		5,000		—	2022
Shakespeare		4,000		4,000	2014
Walpar		3,500		3,500	2018
Other		13,741		14,721	Various
	$	62,383	$	63,407

In its determination of these intangible assets as ~~indefinite‑lived,~~indefinite-lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.

The Company’s trade names were tested for impairment ~~in the third quarter~~as of ~~2017.~~August 27, 2022. The values of each trade name ~~was~~were determined using the relief-from-royalty method. Based on this evaluation, no trade names were determined to be impaired.

~~Goodwill~~

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

Goodwill

The carrying amount of goodwill by segment as of September ~~30, 2017~~24, 2022 and December ~~31, 2016~~25, 2021 was as follows:

Engineered
Support
Structures
Segment Energy & Mining Segment Utility
Support
Structures
Segment Coatings
Segment Irrigation
Segment Total
Balance at December 31, 2016 $ 94,314
$ 72,212
$ 75,404
$ 59,569
$ 19,611
$ 321,110
Foreign currency translation 4,568
6,704
—
951
94
12,317
Acquisitions 3,327
—
—
—
—
3,327
Balance at September 30, 2017 $ 102,209
$ 78,916
$ 75,404
$ 60,520

$ 19,705
$ 336,754

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(4) GOODWILL AND INTANGIBLE ASSETS (Continued)~~


	Infrastructure		Agriculture
	Segment		Segment		Total
Gross Balance December 25, 2021	$	456,876	$	313,512	$	770,388
Accumulated impairment losses		(61,822)		—		(61,822)
Balance at December 25, 2021		395,054		313,512		708,566
Acquisitions		42,465		—		42,465
Foreign currency translation		(22,726)		282		(22,444)
Balance at September 24, 2022	$	414,793	$	313,794	$	728,587


	Infrastructure		Agriculture
	Segment		Segment		Total
Gross Balance September 24, 2022	$	476,615	$	313,794	$	790,409
Accumulated impairment losses		(61,822)		—		(61,822)
Balance at September 24, 2022	$	414,793	$	313,794	$	728,587

The Company’s annual impairment test of goodwill was performed ~~during the third quarter~~as of ~~2017,~~August 27, 2022, using primarily the discounted cash flow method. ~~As a result~~The estimated fair value of ~~that testing, the Company determined that its goodwill was not impaired, as the valuation of the~~all our reporting units exceeded their respective carrying ~~values. The Company's offshore and other complex steel structures reporting unit with $14,645 of~~value, so no goodwill is the reporting unit with the smallest cushion between its estimated fair value and its carrying value. Sales and profitability amounts for the first nine months of 2017 approximated the amounts in the 2016 annual impairment model. The 2017 model assumes continued expansion into other highly engineered steel product offerings, such as utility support structures, where the reporting unit completed profitable projects in the past. The Company will continue to monitor the outlook for wind energy in Europe and oil and natural gas prices, which will affect the sales demand assumptions in the five year model for this reporting unit. If demand for off and onshore structures for wind energy changes significantly, the Company will perform an interim impairment test for goodwill. The Company also tracks changes in the global economy that could impact future operating results of any of its reporting units.

impairments were recorded. During fiscal 2022, no goodwill impairments have been recorded.

~~(5)~~

(4) CASH FLOW SUPPLEMENTARY INFORMATION

The Company considers all highly liquid temporary cash investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds) for the thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September ~~24, 2016~~25, 2021 were as follows:


	2022		2021
Interest	$	23,678	$	20,716
Income taxes		61,551		40,113

2017 2016
Interest $ 22,732
$ 24,036
Income taxes 52,823
47,954

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(6)~~

(5) EARNINGS PER SHARE

The following table provides a reconciliation between Basic and Diluted earnings per share ~~(EPS)~~(“EPS”):

Basic EPS Dilutive
Effect of
Stock
Options Diluted EPS
Thirteen weeks ended September 30, 2017:
Net earnings attributable to Valmont Industries, Inc. $ 35,208
$ —
$ 35,208
Shares outstanding (000 omitted) 22,527
224
22,751
Per share amount $ 1.56
$ (0.01 ) $ 1.55
Thirteen weeks ended September 24, 2016:
Net earnings attributable to Valmont Industries, Inc. $ 28,173
$ —
$ 28,173
Shares outstanding (000 omitted) 22,505
154
22,659
Per share amount $ 1.25
$ (0.01 ) $ 1.24
Thirty-nine weeks ended September 30, 2017:
Net earnings attributable to Valmont Industries, Inc. $ 119,851
$ —
$ 119,851
Shares outstanding (000 omitted) 22,505
212
22,717
Per share amount $ 5.33
$ (0.05 ) $ 5.28
Thirty-nine weeks ended September 24, 2016:
Net earnings attributable to Valmont Industries, Inc. $ 103,168
$ —
$ 103,168
Shares outstanding (000 omitted) 22,602
139
22,741
Per share amount $ 4.56
$ (0.02 ) $ 4.54


			Dilutive
			Effect of
			Stock		Diluted
	Basic EPS		Options		EPS
Thirteen weeks ended September 24, 2022:
Net earnings attributable to Valmont Industries, Inc.	$	72,112	$	—	$	72,112
Weighted average shares outstanding (000’s)		21,332		273		21,605
Per share amount	$	3.38	$	(0.04)	$	3.34
Thirteen weeks ended September 25, 2021:
Net earnings attributable to Valmont Industries, Inc.	$	51,650	$	—	$	51,650
Weighted average shares outstanding (000’s)		21,175		377		21,552
Per share amount	$	2.44	$	(0.04)	$	2.40
Thirty-nine weeks ended September 24, 2022						.
Net earnings attributable to Valmont Industries, Inc.	$	210,531	$	—	$	210,531
Weighted average shares outstanding (000’s)		21,308		238		21,546
Per share amount	$	9.88	$	(0.11)	$	9.77
Thirty-nine weeks ended September 25, 2021:
Net earnings attributable to Valmont Industries, Inc.	$	168,774	$	—	$	168,774
Weighted average shares outstanding (000’s)		21,182		301		21,483
Per share amount	$	7.97	$	(0.11)	$	7.86

As of September 24, ~~2016,~~2022 and September 25, 2021, there were ~~378,566~~no outstanding stock options with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per ~~share.~~share, respectively.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

(6) DERIVATIVE FINANCIAL INSTRUMENTS

The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market and recorded in the Company’s consolidated statements of earnings, while others may be accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken, and by entering into transactions with counterparties who are recognized, stable multinational banks. Any gains or losses from net investment hedge activities remain in accumulated other comprehensive income (“AOCI”) until either the sale or substantially complete liquidation of the related subsidiaries.

Fair value of derivative instruments at September 24, 2022 and December 25, 2021 are as follows:


		September 24,		December 25,
Derivatives designated as hedging instruments:	Balance sheet location	2022		2021
Commodity forward contracts	Accrued expenses	$	(5,938)	$	(5,802)
Foreign currency forward contracts	Prepaid expenses and other assets		10		149
Foreign currency forward contracts	Accrued expenses		(946)		(118)
Cross currency swap contracts	Prepaid expenses and other assets		15,664		1,764
Cross currency swap contracts	Accrued expenses		(100)		—
		$	8,690	$	(4,007)

Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021 are as follows:


		Thirteen weeks ended				Thirty-nine weeks ended
	Statements of earnings	September 24,		September 25,		September 24,		September 25,
	location	2022		2021		2022		2021
Commodity forward contracts	Product cost of sales	$	(1,545)	$	9,870	$	(1,047)	$	10,140
Foreign currency forward contracts	Other income		(94)		187		(177)		123
Interest rate hedge amortization	Interest expense		(16)		(16)		(48)		(48)
Cross currency swap contracts	Interest expense		793		691		2,300		2,060
		$	(862)	$	10,732	$	1,028	$	12,275

Cash Flow Hedges

During 2021, the Company entered into steel hot rolled coil (“HRC”) commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $93,498 for the total purchase of 86,100 short tons. During the second quarter of 2022, the Company entered into additional steel HRC forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $14,010 for the total purchase of 15,000 short tons. As of September 24, 2022, the forward contracts had a notional amount of $27,290 for the total purchase of 28,200 short tons from October 2022 to March 2023. The gain (loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings over average inventory turns.

During the third quarter of 2022, the Company entered into natural gas commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future natural gas purchases. The forward contracts had a notional amount of $5,211 for the total purchase of 770,000 mmBtu from October 2022 to October 2023. The gain (loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings in the period consumed.

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VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

During the third quarter of 2022, a subsidiary with a Euro functional currency entered into a foreign currency forward contract to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward contract, which qualifies as a fair value hedge, matures in February 2023 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros.

Net Investment Hedges

In 2019, the Company entered into two fixed-for-fixed cross currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured notes due 2044 for Danish krone (“DKK”) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the Company’s Euro and DKK investments and to reduce interest expense. Interest is exchanged twice per year on April 1 and October 1.

The Company designated the initial full notional amount of the two CCS ($130,000) as a hedge of the net investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign currency translation within AOCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS.

During the third quarter of 2022, the Company partially settled the DKK CCS and received proceeds of $2,243, which will remain in AOCI until either the sale or substantially complete liquidation of the related subsidiaries.

Key terms of the remaining two CCS are as follows:


	Notional				Swapped	Set Settlement
Currency	Amount		Termination Date		Interest Rate	Amount
Danish Krone	$	20,000		April 1, 2024	2.68%		DKK 133,450
Euro	$	80,000		April 1, 2024	2.825%		€ 71,550

(7) BUSINESS SEGMENTS

The accounting principles used in the preparation of the segment information are the same as those used for the consolidated financial statements as disclosed in Note 1, except that the segment assets and income reflect the FIFO basis of accounting for inventory. Certain inventories are accounted for using the LIFO basis in the consolidated financial statements. In & RELATED REVENUE INFORMATION

During the first quarter of ~~2017,~~2022, the Company’s CODM changed the Company’s management structure and began to manage the business, allocate resources and evaluate performance based on the new structure. As a result, the Company ~~changed its~~has realigned to a two reportable segment structure organized by market dynamics (Infrastructure and Agriculture). Three operating ~~income~~segments resulted from the new management structure and two are aggregated into the Agriculture reportable segment. The Company considers gross profit margins, nature of products sold, nature of the production processes, type and class of customer, and methods used to ~~separate out~~distribute products when assessing aggregation of operating segments. The Infrastructure segment includes the ~~LIFO expense (benefit). Prior year financial~~previous reportable segments of Utility Structures, Engineered Support Structures, and Coatings. All prior period segment information has been ~~updated~~recast to reflect this ~~change.~~

change in reportable segments.

Both reportable segments are global in nature with a manager responsible for segment operational performance and the allocation of capital within the segment. Net corporate expense is net of certain service-related expenses that are allocated to business units generally on the basis of employee headcounts.

Reportable segments are as follows:

~~ENGINEERED SUPPORT STRUCTURES:~~

INFRASTRUCTURE: This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, renewable energy, lighting, transportation, and telecommunications, and coatings services to preserve metal products.

AGRICULTURE: This segment consists of the manufacture of ~~engineered metal~~

~~structures~~center pivot and ~~components for the global lighting and traffic, wireless communication, and roadway safety~~

~~industries;~~

~~ENERGY AND MINING:~~ ~~This segment, all outside of the United States, consists of the manufacture of~~

~~access systems applications, forged steel grinding media, on and offshore oil, gas, and wind energy structures;~~

~~UTILITY SUPPORT STRUCTURES:~~ ~~This segment consists of the manufacture of engineered steel and~~

~~concrete structures for the global utility industry;~~

~~COATINGS:~~ ~~This segment consists of galvanizing, anodizing and powder coating services on a global~~

~~basis; and~~

~~IRRIGATION:~~ ~~This segment consists of the manufacture of agricultural~~linear irrigation equipment ~~and related~~

~~parts and services~~ for ~~the global~~ agricultural ~~industry~~markets, including parts and tubular products, and advanced technology solutions for ~~industrial customers.~~precision agriculture.

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)

The Company evaluates the performance of its ~~business~~reportable segments based upon operating income and invested capital. The Company does not allocate ~~LIFO expense,~~ interest expense, non-operating income ~~and deductions,~~(expense), or income taxes to its ~~business~~reportable segments.

Summary by Business


	Thirteen weeks ended				Thirty-nine weeks ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
SALES:
Infrastructure	$	778,353	$	634,283	$	2,224,029	$	1,801,533
Agriculture		327,261		240,331		1,011,606		751,960
Total		1,105,614		874,614		3,235,635		2,553,493
INTERSEGMENT SALES:
Infrastructure		(5,112)		(1,826)		(12,413)		(7,823)
Agriculture		(3,120)		(4,006)		(9,488)		(7,373)
Total		(8,232)		(5,832)		(21,901)		(15,196)
NET SALES:
Infrastructure		773,241		632,457		2,211,616		1,793,710
Agriculture		324,141		236,325		1,002,118		744,587
Total	$	1,097,382	$	868,782	$	3,213,734	$	2,538,297

OPERATING INCOME:
Infrastructure	$	93,572	$	71,422	$	255,722	$	187,421
Agriculture		43,258		27,735		138,779		108,467
Corporate		(26,858)		(22,962)		(70,968)		(59,857)
Total	$	109,972	$	76,195	$	323,533	$	236,031


	Thirteen weeks ended September 24, 2022
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	579,628	$	178,626	$	(7,114)	$	751,140
International		198,725		148,635		(1,118)		346,242
Total	$	778,353	$	327,261	$	(8,232)	$	1,097,382

Product line:
Transmission, Distribution and Substation	$	304,781	$	—	$	—	$	304,781
Lighting and Transportation		241,590		—		—		241,590
Coatings		91,969		—		(3,994)		87,975
Telecommunications		92,830		—		—		92,830
Renewable Energy		47,183		—		(1,118)		46,065
Irrigation Equipment and Parts, excluding Technology		—		303,003		(3,120)		299,883
Technology Products and Services		—		24,258		—		24,258
Total	$	778,353	$	327,261	$	(8,232)	$	1,097,382

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~


	Thirty-nine weeks ended September 24, 2022
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	1,645,472	$	564,369	$	(20,316)	$	2,189,525
International		578,557		447,237		(1,585)		1,024,209
Total	$	2,224,029	$	1,011,606	$	(21,901)	$	3,213,734

Product line:
Transmission, Distribution and Substation	$	882,216	$	—	$	—	$	882,216
Lighting and Transportation		701,009		—		—		701,009
Coatings		264,266		—		(11,295)		252,971
Telecommunications		232,765		—		—		232,765
Renewable Energy		143,773		—		(1,118)		142,655
Irrigation Equipment and Parts, excluding Technology		—		928,622		(9,488)		919,134
Technology Products and Services		—		82,984		—		82,984
Total	$	2,224,029	$	1,011,606	$	(21,901)	$	3,213,734


	Thirteen weeks ended September 25, 2021
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	439,610	$	116,308	$	(5,832)	$	550,086
International		194,673		124,023		—		318,696
Total	$	634,283	$	240,331	$	(5,832)	$	868,782

Product line:
Transmission, Distribution and Substation	$	239,572	$	—	$	—	$	239,572
Lighting and Transportation		217,962		—		—		217,962
Coatings		76,761		—		(1,826)		74,935
Telecommunications		63,088		—		—		63,088
Renewable Energy		36,900		—		—		36,900
Irrigation Equipment and Parts, excluding Technology		—		218,892		(4,006)		214,886
Technology Products and Services		—		21,439		—		21,439
Total	$	634,283	$	240,331	$	(5,832)	$	868,782

~~(7) BUSINESS SEGMENTS (Continued)~~

~~Summary by Business~~

Thirteen Weeks Ended Thirty-nine Weeks Ended
September 30,
2017 September 24,
2016 September 30,
2017 September 24,
2016
SALES:
Engineered Support Structures segment:
Lighting, Traffic, and Roadway Products $ 175,184
$ 159,089
$ 498,034
$ 468,582
Communication Products 46,324
44,095
121,613
115,489
Engineered Support Structures segment 221,508
203,184
619,647
584,071
Energy and Mining segment:
Offshore and Other Complex Steel Structures 25,046
27,330
75,372
76,207
Grinding Media 19,800
20,681
60,466
61,189
Access Systems 34,909
33,541
99,096
97,297
Energy and Mining segment 79,755
81,552
234,934
234,693
Utility Support Structures segment:
Steel 160,948
131,085
471,072
379,157
Concrete 18,811
19,582
67,921
67,275
Utility Support Structures segment 179,759
150,667
538,993
446,432
Coatings segment 82,593
70,082
235,842
213,961
Irrigation segment 147,428
127,809
502,939
438,575
Total 711,043
633,294
2,132,355
1,917,732
INTERSEGMENT SALES:
Engineered Support Structures segment 11,736
10,076
48,399
29,202
Energy & Mining segment 6
319
6
3,386
Utility Support Structures segment 1,231
276
2,448
538
Coatings segment 14,913
10,079
44,230
31,778
Irrigation segment 2,378
2,297
6,283
5,727
Total 30,264
23,047
101,366
70,631
NET SALES:
Engineered Support Structures segment 209,772
193,108
571,248
554,869
Energy & Mining segment 79,749
81,233
234,928
231,307
Utility Support Structures segment 178,528
150,391
536,545
445,894
Coatings segment 67,680
60,003
191,612
182,183
Irrigation segment 145,050
125,512
496,656
432,848
Total $ 680,779
$ 610,247
$ 2,030,989
$ 1,847,101

OPERATING INCOME:
Engineered Support Structures segment $ 16,226
$ 20,323
$ 45,683
$ 53,615
Energy & Mining segment 1,417
3,941
9,195
9,184
Utility Support Structures segment 22,108
16,195
65,005
48,201
Coatings segment 14,577
11,696
36,091
37,132
Irrigation segment 18,235
15,308
83,196
75,216
Adjustment to LIFO inventory valuation method (1,626 ) (2,066 ) (2,839 ) (3,192 )
Corporate (11,014 ) (12,157 ) (33,616 ) (32,745 )
Total $ 59,923
$ 53,240
$ 202,715
$ 187,411

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION~~

~~The Company has three tranches~~


	Thirty-nine weeks ended September 25, 2021
	Infrastructure		Agriculture		Intersegment Sales		Consolidated
Geographical market:
North America	$	1,246,512	$	395,096	$	(15,196)	$	1,626,412
International		555,021		356,864		—		911,885
Total	$	1,801,533	$	751,960	$	(15,196)	$	2,538,297

Product line:
Transmission, Distribution and Substation	$	668,474	$	—	$	—	$	668,474
Lighting and Transportation		609,725		—		—		609,725
Coatings		231,900		—		(7,823)		224,077
Telecommunications		162,830		—		—		162,830
Renewable Energy		128,604		—		—		128,604
Irrigation Equipment and Parts, excluding Technology		—		679,600		(7,373)		672,227
Technology Products and Services		—		72,360		—		72,360
Total	$	1,801,533	$	751,960	$	(15,196)	$	2,538,297

A breakdown by segment of ~~senior unsecured notes. All of the senior notes are guaranteed, jointly, severally, fully~~revenue recognized over time and unconditionally (subject to certain customary release provisions, including sale of the subsidiary guarantor, or sale of all or substantially all of its assets) by certain of the Company’s current and future direct and indirect domestic and foreign subsidiaries (collectively the “Guarantors”), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the “Non-Guarantors”). All Guarantors are 100% owned by the parent company.

~~Consolidated financial information~~at a point in time for the ~~Company ("Parent"), the Guarantor subsidiaries~~thirteen and ~~the Non-Guarantor subsidiaries is as follows:~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS~~

~~For the~~ ~~Thirteen~~thirty-nine weeks ended September ~~30, 2017~~24, 2022 and September 25, 2021 is as follows:


	Point in Time		Over Time		Total
	Thirteen		Thirteen		Thirteen
	weeks ended		weeks ended		weeks ended
	September 24, 2022		September 24, 2022		September 24, 2022
Infrastructure	$	434,839	$	338,402	$	773,241
Agriculture		317,669		6,472		324,141
Total	$	752,508	$	344,874	$	1,097,382


	Point in Time		Over Time		Total
	Thirty-nine		Thirty-nine		Thirty-nine
	weeks ended		weeks ended		weeks ended
	September 24, 2022		September 24, 2022		September 24, 2022
Infrastructure	$	1,233,320	$	978,296	$	2,211,616
Agriculture		983,450		18,668		1,002,118
Total	$	2,216,770	$	996,964	$	3,213,734


	Point in Time		Over Time		Total
	Thirteen		Thirteen		Thirteen
	weeks ended		weeks ended		weeks ended
	September 25, 2021		September 25, 2021		September 25, 2021
Infrastructure	$	359,017	$	273,440	$	632,457
Agriculture		230,273		6,052		236,325
Total	$	589,290	$	279,492	$	868,782

Parent Guarantors Non-
Guarantors Eliminations Total
Net sales $ 284,538
$ 113,243
$ 343,818
$ (60,820 ) $ 680,779
Cost of sales 216,039
88,757
272,959
(60,570 ) 517,185
Gross profit 68,499
24,486
70,859
(250 ) 163,594
Selling, general and administrative expenses 46,451
12,046
45,174
—
103,671
Operating income 22,048
12,440
25,685
(250 ) 59,923
Other income (expense):
Interest expense (10,884 ) (3,989 ) (306 ) 3,989
(11,190 )
Interest income 268
9
5,023
(3,989 ) 1,311
Other 1,379
11
(873 ) —
517
(9,237 ) (3,969 ) 3,844
—
(9,362 )
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries 12,811
8,471
29,529
(250 ) 50,561
Income tax expense (benefit):
Current 9,030
3,082
9,059
(8 ) 21,163
Deferred (3,474 ) —
(3,794 ) —
(7,268 )
5,556
3,082
5,265
(8 ) 13,895
Earnings before equity in earnings of nonconsolidated subsidiaries 7,255
5,389
24,264
(242 ) 36,666
Equity in earnings of nonconsolidated subsidiaries 27,953
9,965
—
(37,918 ) —
Net earnings 35,208
15,354
24,264
(38,160 ) 36,666
Less: Earnings attributable to noncontrolling interests —
—
(1,458 ) —
(1,458 )
Net earnings attributable to Valmont Industries, Inc $ 35,208
$ 15,354
$ 22,806
$ (38,160 ) $ 35,208

Table of Contents

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)
(Unaudited)

~~(Unaudited)~~


	Point in Time		Over Time		Total
	Thirty-nine		Thirty-nine		Thirty-nine
	weeks ended		weeks ended		weeks ended
	September 25, 2021		September 25, 2021		September 25, 2021
Infrastructure	$	997,482	$	796,228	$	1,793,710
Agriculture		729,813		14,774		744,587
Total	$	1,727,295	$	811,002	$	2,538,297

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS~~

~~For the Thirty-nine Weeks Ended September 30, 2017~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net sales $ 893,988
$ 352,827
$ 967,130
$ (182,956 ) $ 2,030,989
Cost of sales 666,060
271,620
764,607
(182,777 ) 1,519,510
Gross profit 227,928
81,207
202,523
(179 ) 511,479
Selling, general and administrative expenses 143,590
35,555
129,619
—
308,764
Operating income 84,338
45,652
72,904
(179 ) 202,715
Other income (expense):
Interest expense (32,672 ) (10,040 ) (640 ) 10,040
(33,312 )
Interest income 563
33
12,649
(10,040 ) 3,205
Other 3,900
42
(2,258 ) —
1,684
(28,209 ) (9,965 ) 9,751
—
(28,423 )
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries 56,129
35,687
82,655
(179 ) 174,292
Income tax expense (benefit):
Current 19,487
13,184
17,612
(19 ) 50,264
Deferred 2,065
—
(1,986 ) —
79
21,552
13,184
15,626
(19 ) 50,343
Earnings before equity in earnings of nonconsolidated subsidiaries 34,577
22,503
67,029
(160 ) 123,949
Equity in earnings of nonconsolidated subsidiaries 85,274
15,281
—
(100,555 ) —
Net earnings 119,851
37,784
67,029
(100,715 ) 123,949
Less: Earnings attributable to noncontrolling interests —
—
(4,098 ) —
(4,098 )
Net earnings attributable to Valmont Industries, Inc $ 119,851
$ 37,784
$ 62,931
$ (100,715 ) $ 119,851

Table of Contents

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS~~

~~For the Thirteen weeks ended September 24, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net sales $ 261,928
$ 89,305
$ 300,648
$ (41,634 ) $ 610,247
Cost of sales 199,957
66,401
230,561
(41,695 ) 455,224
Gross profit 61,971
22,904
70,087
61
155,023
Selling, general and administrative expenses 46,183
11,073
44,527
—
101,783
Operating income 15,788
11,831
25,560
61
53,240
Other income (expense):
Interest expense (10,920 ) (6 ) (174 ) —
(11,100 )
Interest income 68
12
691
—
771
Other 1,370
12
(504 ) —
878
(9,482 ) 18
13
—
(9,451 )
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries 6,306
11,849
25,573
61
43,789
Income tax expense (benefit):
Current 6,112
5,095
6,762
48
18,017
Deferred (5,321 ) —
1,572
—
(3,749 )
791
5,095
8,334
48
14,268
Earnings before equity in earnings of nonconsolidated subsidiaries 5,515
6,754
17,239
13
29,521
Equity in earnings of nonconsolidated subsidiaries 22,658
—
—
(22,658 ) —
Net earnings 28,173
6,754
17,239
(22,645 ) 29,521
Less: Earnings attributable to noncontrolling interests —
—
(1,348 ) —
(1,348 )
Net earnings attributable to Valmont Industries, Inc $ 28,173
$ 6,754
$ 15,891
$ (22,645 ) $ 28,173

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS~~

~~For the Thirty-nine Weeks Ended September 24, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net sales $ 837,137
$ 277,990
$ 873,673
$ (141,699 ) $ 1,847,101
Cost of sales 619,493
205,497
671,202
(140,200 ) 1,355,992
Gross profit 217,644
72,493
202,471
(1,499 ) 491,109
Selling, general and administrative expenses 133,207
33,583
136,908
—
303,698
Operating income 84,437
38,910
65,563
(1,499 ) 187,411
Other income (expense):
Interest expense (32,768 ) (9 ) (499 ) —
(33,276 )
Interest income 181
51
2,057
—
2,289
Other 1,694
39
(1,281 ) —
452
(30,893 ) 81
277
—
(30,535 )
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries 53,544
38,991
65,840
(1,499 ) 156,876
Income tax expense (benefit):
Current 22,086
13,909
15,762
(481 ) 51,276
Deferred (1,834 ) —
300
—
(1,534 )
20,252
13,909
16,062
(481 ) 49,742
Earnings before equity in earnings of nonconsolidated subsidiaries 33,292
25,082
49,778
(1,018 ) 107,134
Equity in earnings of nonconsolidated subsidiaries 69,876
7,859
—
(77,735 ) —
Net earnings 103,168
32,941
49,778
(78,753 ) 107,134
Less: Earnings attributable to noncontrolling interests —
—
(3,966 ) —
(3,966 )
Net earnings attributable to Valmont Industries, Inc $ 103,168
$ 32,941
$ 45,812
$ (78,753 ) $ 103,168

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~For the~~ ~~Thirteen weeks ended September 30, 2017~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net earnings $ 35,208
$ 15,354
$ 24,264
$ (38,160 ) $ 36,666
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
        Unrealized translation gain (loss) —
(3,613 ) 23,143
—
19,530
Unrealized gain/(loss) on hedging activities:
     Net investment hedge (740 ) —
—
—
(740 )
     Amortization cost included in interest expense 19
—
—
—
19
Equity in other comprehensive income 18,418
—
—
(18,418 ) —
Other comprehensive income (loss) 17,697
(3,613 ) 23,143
(18,418 ) 18,809
Comprehensive income (loss) 52,905
11,741
47,407
(56,578 ) 55,475
Comprehensive income attributable to noncontrolling interests —
—
(2,570 ) —
(2,570 )
Comprehensive income (loss) attributable to Valmont Industries, Inc. $ 52,905
$ 11,741
$ 44,837
$ (56,578 ) $ 52,905

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~For the Thirty-nine Weeks Ended September 30, 2017~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net earnings $ 119,851
$ 37,784
$ 67,029
$ (100,715 ) $ 123,949
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
        Unrealized translation gain (loss) —
64,411
(3,940 ) —
60,471
Unrealized gain/(loss) on hedging activities:
     Net investment hedge (1,816 ) —
—
(1,816 )
     Amortization cost included in interest expense 56
—
—
—
56
Equity in other comprehensive income 60,017
—
—
(60,017 ) —
Other comprehensive income (loss) 58,257
64,411
(3,940 ) (60,017 ) 58,711
Comprehensive income (loss) 178,108
102,195
63,089
(160,732 ) 182,660
Comprehensive income attributable to noncontrolling interests —
—
(4,552 ) —
(4,552 )
Comprehensive income (loss) attributable to Valmont Industries, Inc. $ 178,108
$ 102,195
$ 58,537
$ (160,732 ) $ 178,108

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~For the~~ ~~Thirteen weeks ended September 24, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net earnings $ 28,173
$ 6,754
$ 17,239
$ (22,645 ) $ 29,521
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
        Unrealized translation gain (loss) —
(114 ) 884
—
770
Unrealized gain/(loss) on hedging activities:
     Net investment hedge 1,972
—
—
—
1,972
     Amortization cost included in interest expense 18
—
—
—
18
Equity in other comprehensive income 500
—
—
(500 ) —
Other comprehensive income (loss) 2,490
(114 ) 884
(500 ) 2,760
Comprehensive income (loss) 30,663
6,640
18,123
(23,145 ) 32,281
Comprehensive income attributable to noncontrolling interests —
—
(1,618 ) —
(1,618 )
Comprehensive income (loss) attributable to Valmont Industries, Inc. $ 30,663
$ 6,640
$ 16,505
$ (23,145 ) $ 30,663

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~For the Thirty-nine Weeks Ended September 24, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
Net earnings $ 103,168
$ 32,941
$ 49,778
$ (78,753 ) $ 107,134
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
        Unrealized translation gain (loss) —
(263 ) (1,675 ) —
(1,938 )
Unrealized gain/(loss) on hedging activities:
      Net Investment Hedge
4,897
—
—
—
4,897
     Amortization cost included in interest expense 56
—
—
—
56
Equity in other comprehensive income (3,704 ) —
—
3,704
—
Other comprehensive income (loss) 1,249
(263 ) (1,675 ) 3,704
3,015
Comprehensive income (loss) 104,417
32,678
48,103
(75,049 ) 110,149
Comprehensive income attributable to noncontrolling interests —
—
(5,732 ) —
(5,732 )
Comprehensive income (loss) attributable to Valmont Industries, Inc. $ 104,417
$ 32,678
$ 42,371
$ (75,049 ) $ 104,417

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~September 30, 2017~~

Parent Guarantors Non-
Guarantors Eliminations Total
ASSETS
Current assets:
Cash and cash equivalents $ 118,499
$ 4,167
$ 370,824
$ —
$ 493,490
Receivables, net 152,290
69,781
270,771
—
492,842
Inventories 141,774
46,747
219,046
(4,333 ) 403,234
Prepaid expenses, restricted cash, and other assets 8,903
1,023
40,138
—
50,064
Refundable income taxes 8,493
—
—
—
8,493
Total current assets 429,959
121,718
900,779
(4,333 ) 1,448,123
Property, plant and equipment, at cost 558,484
158,087
453,283
—
1,169,854
Less accumulated depreciation and amortization 369,620
82,708
195,102
—
647,430
Net property, plant and equipment 188,864
75,379
258,181
—
522,424
Goodwill 20,108
110,562
206,084
—
336,754
Other intangible assets 144
32,204
109,742
—
142,090
Investment in subsidiaries and intercompany accounts 1,392,533
1,180,732
1,029,831
(3,603,096 ) —
Other assets 47,613
—
113,167
—
160,780
Total assets $ 2,079,221
$ 1,520,595
$ 2,617,784
$ (3,607,429 ) $ 2,610,171
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt $ —
$ —
$ 949
$ —
$ 949
Notes payable to banks —
—
197
—
197
Accounts payable 59,467
8,032
148,605
—
216,104
Accrued employee compensation and benefits 40,760
8,293
32,441
—
81,494
Accrued expenses 44,896
9,222
52,120
—
106,238
Dividends payable 8,478
—
—
—
8,478
Total current liabilities 153,601
25,547
234,312
—
413,460
Deferred income taxes 15,617
—
12,566
—
28,183
Long-term debt, excluding current installments 750,933
185,674
10,060
(192,465 ) 754,202
Defined benefit pension liability —
—
199,562
—
199,562
Deferred compensation 43,077
—
5,535
—
48,612
Other noncurrent liabilities 3,159
5
10,393
—
13,557
Shareholders’ equity:
Common stock of $1 par value 27,900
457,950
648,682
(1,106,632 ) 27,900
Additional paid-in capital —
166,789
1,107,536
(1,274,325 ) —
Retained earnings 1,974,601
684,532
636,283
(1,320,815 ) 1,974,601
Accumulated other comprehensive income (loss) (288,102 ) 98
(286,906 ) 286,808
(288,102 )
Treasury stock (601,565 ) —
—
—
(601,565 )
Total Valmont Industries, Inc. shareholders’ equity 1,112,834
1,309,369
2,105,595
(3,414,964 ) 1,112,834
Noncontrolling interest in consolidated subsidiaries —
—
39,761
—
39,761
Total shareholders’ equity 1,112,834
1,309,369
2,145,356
(3,414,964 ) 1,152,595
Total liabilities and shareholders’ equity $ 2,079,221
$ 1,520,595
$ 2,617,784
$ (3,607,429 ) $ 2,610,171

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~December 31, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
ASSETS
Current assets:
Cash and cash equivalents $ 67,225
$ 6,071
$ 326,652
$ —
$ 399,948
Receivables, net 134,351
60,522
244,469
—
439,342
Inventories 126,669
45,457
182,056
(4,154 ) 350,028
Prepaid expenses 13,271
880
43,146
—
57,297
Refundable income taxes 6,601
—
—
—
6,601
Total current assets 348,117
112,930
796,323
(4,154 ) 1,253,216
Property, plant and equipment, at cost 547,076
153,596
405,064
—
1,105,736
Less accumulated depreciation and amortization 352,960
76,776
157,665
—
587,401
Net property, plant and equipment 194,116
76,820
247,399
—
518,335
Goodwill 20,108
110,561
190,441
—
321,110
Other intangible assets 184
35,953
108,241
—
144,378
Investment in subsidiaries and intercompany accounts 1,279,413
901,758
1,089,369
(3,270,540 ) —
Other assets 43,880
—
110,812
—
154,692
Total assets $ 1,885,818
$ 1,238,022
$ 2,542,585
$ (3,274,694 ) $ 2,391,731
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt $ —
$ —
$ 851
$ —
$ 851
Notes payable to banks —
—
746
—
746
Accounts payable 52,272
15,732
109,484
—
177,488
Accrued employee compensation and benefits 34,508
7,243
30,653
—
72,404
Accrued expenses 30,261
15,242
44,411
—
89,914
Dividends payable 8,445
—
—
—
8,445
Total current liabilities 125,486
38,217
186,145
—
349,848
Deferred income taxes 22,481
—
13,322
—
35,803
Long-term debt, excluding current installments 751,251
—
3,544
—
754,795
Defined benefit pension liability —
—
209,470
—
209,470
Deferred compensation 39,476
—
4,843
—
44,319
Other noncurrent liabilities 3,642
5
11,263
—
14,910
Shareholders’ equity:

Common stock of $1 par value 27,900
457,950
648,683
(1,106,633 ) 27,900
Additional paid-in capital —
159,414
1,107,536
(1,266,950 ) —
Retained earnings 1,874,722
646,749
603,338
(1,250,087 ) 1,874,722
Accumulated other comprehensive income (346,359 ) (64,313 ) (284,663 ) 348,976
(346,359 )
Treasury stock (612,781 ) —
—
—
(612,781 )
Total Valmont Industries, Inc. shareholders’ equity 943,482
1,199,800
2,074,894
(3,274,694 ) 943,482
Noncontrolling interest in consolidated subsidiaries —
—
39,104
—
39,104
Total shareholders’ equity 943,482
1,199,800
2,113,998
(3,274,694 ) 982,586
Total liabilities and shareholders’ equity $ 1,885,818

$ 1,238,022
$ 2,542,585
$ (3,274,694 ) $ 2,391,731

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~For the~~ ~~Thirty-nine Weeks Ended September 30, 2017~~

Parent Guarantors Non-
Guarantors Eliminations Total
Cash flows from operating activities:
Net earnings $ 119,851
$ 37,784
$ 67,029
$ (100,715 ) $ 123,949
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization 19,600
11,130
32,770
—
63,500
Noncash loss on trading securities —
—
395
—
395
Stock-based compensation 7,300
—
—
—
7,300
Defined benefit pension plan expense —
—
481
—
481
Contribution to defined benefit pension plan —
—
(26,064 ) —
(26,064 )
Decrease in restricted cash - pension plan trust —
—
12,568
—
12,568
Loss (gain) on sale of property, plant and equipment (725 ) 59
(66 ) —
(732 )
Equity in earnings in nonconsolidated subsidiaries (85,274 ) (15,281 ) —
100,555
—
Deferred income taxes 2,065
—
(1,986 ) —
79
Changes in assets and liabilities:
Receivables (16,190 ) (9,259 ) (14,135 ) —
(39,584 )
Inventories (15,105 ) (1,290 ) (25,329 ) 179
(41,545 )
Prepaid expenses and other assets (2,501 ) (144 ) (8,991 ) —
(11,636 )
Accounts payable 7,196
(7,700 ) 29,399
—
28,895
Accrued expenses 20,887
(4,971 ) 4,241
—
20,157
Other noncurrent liabilities (381 ) —
(1,246 ) —
(1,627 )
Income taxes payable (refundable) (11,403 ) 802
8,869
—
(1,732 )
Net cash flows from operating activities 45,320
11,130
77,935
19
134,404
Cash flows from investing activities:
Purchase of property, plant and equipment (14,046 ) (5,952 ) (19,900 ) —
(39,898 )
Proceeds from sale of assets 745
(48 ) 878
—
1,575
Acquisitions, net of cash acquired —
—
(5,362 ) —
(5,362 )
Proceeds from settlement of net investment hedge 5,123
—
—
—
5,123
Other, net 15,714
(8,985 ) (10,172 ) (19 ) (3,462 )
Net cash flows from investing activities 7,536
(14,985 ) (34,556 ) (19 ) (42,024 )
Cash flows from financing activities:
Net borrowings under short-term agreements —
—
(549 ) —
(549 )
Principal payments on long-term borrowings

—
(658 ) —
(658 )
Dividends paid (25,386 ) —
—
—
(25,386 )
Dividends to noncontrolling interest —

(3,895 ) —
(3,895 )
Intercompany dividends 22,662
—
(22,662 ) —
—
Intercompany interest on long-term note —
(5,669 ) 5,669
—
—
Intercompany capital contribution (7,375 ) 7,375
—
—
—
Proceeds from exercises under stock plans 12,446
—
—
—
12,446
Purchase of common treasury shares - stock plan exercises (3,929 ) —
—
—
(3,929 )
Net cash flows from financing activities (1,582 ) 1,706
(22,095 ) —
(21,971 )
Effect of exchange rate changes on cash and cash equivalents —
245
22,888
—
23,133
Net change in cash and cash equivalents 51,274
(1,904 ) 44,172
—
93,542
Cash and cash equivalents—beginning of year 67,225
6,071
326,652
—
399,948
Cash and cash equivalents—end of period $ 118,499
$ 4,167
$ 370,824
$ —
$ 493,490

~~VALMONT INDUSTRIES, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in thousands, except per share amounts)~~

~~(Unaudited)~~

~~(8) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~For the Thirty-nine Weeks Ended September 24, 2016~~

Parent Guarantors Non-
Guarantors Eliminations Total
Cash flows from operating activities:
Net earnings $ 103,168
$ 32,941
$ 49,778
$ (78,753 ) $ 107,134
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization 20,482
9,897
30,863
—
61,242
Noncash loss on trading securities —
—
973
—
973
Impairment of assets - restructuring activities —
—
618
—
618
Stock-based compensation 6,572
—
—
—
6,572
Change in fair value of contingent consideration —
—
(3,527 ) —
(3,527 )
Defined benefit pension plan expense —
—
1,486
—
1,486
Contribution to defined benefit pension plan —
—
(712 ) —
(712 )
Increase in restricted cash - pension plan trust —
—
(13,652 ) —
(13,652 )
Loss (gain) on sale of property, plant and equipment 2
117
131
—
250
Equity in earnings in nonconsolidated subsidiaries (69,876 ) (7,859 ) —
77,735
—
Deferred income taxes (1,834 ) —
300
—
(1,534 )
Changes in assets and liabilities:
Receivables (10,501 ) 14,969
11,968
—
16,436
Inventories (11,847 ) (5,024 ) (19,041 ) 1,499
(34,413 )
Prepaid expenses (4,526 ) 76
(6,174 ) —
(10,624 )
Accounts payable (16,605 ) 2,530
2,737
—
(11,338 )
Accrued expenses 11,179
(7,218 ) (689 ) —
3,272
Other noncurrent liabilities (252 ) 5
487
—
240
Income taxes payable (refundable) 19,132
(16,444 ) 2,143
—
4,831
Net cash flows from operating activities 45,094
23,990
57,689
481
127,254
Cash flows from investing activities:
Purchase of property, plant and equipment (5,699 ) (17,944 ) (18,590 ) —
(42,233 )
Proceeds from sale of assets 36
84
3,818
—
3,938
Other, net 13,070
(4,488 ) (10,925 ) (481 ) (2,824 )
Net cash flows from investing activities 7,407
(22,348 ) (25,697 ) (481 ) (41,119 )
Cash flows from financing activities:
Net borrowings under short-term agreements —
—
(128 ) —
(128 )
Principal payments on long-term borrowings (215 ) —
(1,348 ) —
(1,563 )
Dividends paid (25,604 ) —
—
—
(25,604 )
Dividends to noncontrolling interest —
—
(2,527 ) —
(2,527 )
Purchase of noncontrolling interest (137 ) —
(10,872 ) —
(11,009 )
Proceeds from exercises under stock plans 6,509
—
—
—
6,509
Purchase of treasury shares (46,581 ) —
—
—
(46,581 )
Purchase of common treasury shares - stock plan exercises (1,453 ) —
—
—
(1,453 )
Net cash flows from financing activities (67,481 ) —
(14,875 ) —
(82,356 )
Effect of exchange rate changes on cash and cash equivalents —
168
(3,646 ) —
(3,478 )
Net change in cash and cash equivalents (14,980 ) 1,810
13,471
—
301
Cash and cash equivalents—beginning of year 62,281
4,008
282,785
—
349,074
Cash and cash equivalents—end of period $ 47,301
$ 5,818
$ 296,256
$ —
$ 349,375

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

Management’s discussion and analysis contains ~~forward‑looking~~forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These ~~forward‑looking~~forward-looking statements are based on assumptions that management has made in light of experience in the industries in which the Company operates, as well as management’s perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Management believes that these ~~forward‑looking~~forward-looking statements are based on reasonable assumptions. Many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the ~~forward‑looking~~forward-looking statements. These factors include, among other things, the continuing and developing effects of the COVID-19 pandemic including the effects of the outbreak on the general economy and the specific effects on the Company’s business and that of its customers and suppliers, risk factors described from time to time in the Company’s reports to the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes of domestic and foreign governments.

This discussion should be read in conjunction with the financial statements and notes thereto, and the ~~management's~~management’s discussion and analysis included in the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016~~.25, 2021. Segment net sales in the table below and elsewhere are presented net of intersegment sales. See Note 7 of our condensed consolidated financial statements for additional information on segment realignment, segment sales, and intersegment sales.

Table of Contents

Results of Operations (Dollars in millions, except per share amounts)

Thirteen Weeks Ended Thirty-nine Weeks Ended
September 30, 2017 September 24, 2016 % Incr. (Decr.) September 30, 2017 September 24, 2016 % Incr. (Decr.)
Consolidated
Net sales $ 680.8
$ 610.2
11.6 % $ 2,031.0
$ 1,847.1
10.0 %
Gross profit 163.6
155.0
5.5 % 511.5
491.1
4.2 %
as a percent of sales
24.0 % 25.4 % 25.2 % 26.6 %
SG&A expense 103.7
101.8
1.9 % 308.8
303.7
1.7 %
as a percent of sales
15.2 % 16.7 % 15.2 % 16.4 %
Operating income 59.9
53.2
12.6 % 202.7
187.4
8.2 %
as a percent of sales
8.8 % 8.7 % 10.0 % 10.1 %
Net interest expense 9.9
10.3
(3.9 )% 30.1
31.0
(2.9 )%
Effective tax rate 27.5 % 32.6 % 28.9 % 31.7 %
Net earnings $ 35.2
$ 28.2
24.8 % $ 119.9
$ 103.2
16.2 %
Diluted earnings per share $ 1.55
$ 1.24
25.0 % $ 5.28
$ 4.54
16.3 %
Engineered Support Structures (ESS)
Net sales $ 209.8
$ 193.1
8.6 % $ 571.3
$ 554.9
3.0 %
Gross profit 50.9
54.3
(6.3 )% 145.2
156.9
(7.5 )%
SG&A expense 34.6
34.0
1.8 % 99.5
103.3
(3.7 )%
Operating income 16.3
20.3
(19.7 )% 45.7
53.6
(14.7 )%
Energy and Mining (E&M)
Net sales $ 79.7
$ 81.2
(1.8 )% $ 234.9
$ 231.3
1.6 %
Gross profit 12.5
14.8
(15.5 )% 41.6
41.6
— %
SG&A expense 11.1
10.9
1.8 % 32.4
32.5
(0.3 )%
Operating income 1.4
3.9
(64.1 )% 9.2
9.1
1.1 %
Utility Support Structures (Utility)
Net sales $ 178.5
$ 150.4
18.7 % $ 536.5
$ 445.9
20.3 %
Gross profit 39.4
31.8
23.9 % 115.4
94.2
22.5 %
SG&A expense 17.3
15.6
10.9 % 50.4
46.0
9.6 %
Operating income 22.1
16.2
36.4 % 65.0
48.2
34.9 %
Coatings
Net sales $ 67.7
$ 60.0
12.8 % $ 191.6
$ 182.2
5.2 %
Gross profit 20.3
17.9
13.4 % 58.5
59.1
(1.0 )%
SG&A expense 5.8
6.2
(6.5 )% 22.5
22.0
2.3 %
Operating income 14.5
11.7
23.9 % 36.0
37.1
(3.0 )%
Irrigation
Net sales $ 145.1
$ 125.5
15.6 % $ 496.7
$ 432.8
14.8 %
Gross profit 42.1
38.1
10.5 % 153.6
141.4
8.6 %
SG&A expense 23.9
22.7
5.3 % 70.4
66.1
6.5 %
Operating income 18.2
15.4
18.2 % 83.2
75.3
10.5 %
Adjustment to LIFO inventory valuation method
Gross profit $ (1.6 ) $ (2.1 ) NM $ (2.8 ) $ (3.2 ) NM
Operating income (1.6 ) (2.1 ) NM (2.8 ) (3.2 ) NM
Net corporate expense
Gross profit $ —
$ 0.3
NM $ —
$ 1.1
NM
SG&A expense 11.0
12.4
(11.3 )% 33.6
33.8
(0.6 )%
Operating loss (11.0 ) (12.1 ) 9.1 % (33.6 ) (32.7 ) (2.8 )%

~~NM=Not meaningful~~


	Thirteen weeks ended								Thirty-nine weeks ended
	September 24, 2022			September 25, 2021			% Incr. (Decr.)		September 24, 2022			September 25, 2021			% Incr. (Decr.)
Consolidated
Net sales	$	1,097.4		$	868.8		26.3	%	$	3,213.7		$	2,538.3		26.6	%
Gross profit		285.5			227.4		25.5	%		827.3			661.6		25.0	%
as a percent of sales		26.0	%		26.2	%				25.7	%		26.1	%
SG&A expense		175.5			151.2		16.1	%		503.7		$	425.6		18.4	%
as a percent of sales		16.0	%		17.4	%				15.7	%		16.8	%
Operating income		110.0			76.2		44.4	%		323.5			236.0		37.1	%
as a percent of sales		10.0	%		8.8	%				10.1	%		9.3	%
Net interest expense		11.1			10.6		4.7	%		33.3			30.6		8.8	%
Effective tax rate		27.6	%		23.4	%				27.3	%		21.3	%
Net earnings	$	72.1		$	51.7		39.5	%	$	210.5		$	168.8		24.7	%
Diluted earnings per share	$	3.34		$	2.40		39.2	%	$	9.77		$	7.86		24.3	%
Infrastructure
Net sales	$	773.2		$	632.4		22.3	%	$	2,211.6		$	1,793.7		23.3	%
Gross profit		190.9			156.3		22.1	%		539.8			440.0		22.7	%
SG&A expense		97.3			84.9		14.6	%		284.1			252.6		12.5	%
Operating income		93.6			71.4		31.1	%		255.7			187.4		36.4	%
Agriculture
Net sales	$	324.1		$	236.4		37.1	%	$	1,002.1		$	744.6		34.6	%
Gross profit		94.6			70.7		33.8	%		287.4			220.9		30.1	%
SG&A expense		51.3			42.9		19.6	%		148.6			112.4		32.2	%
Operating income		43.3			27.8		55.8	%		138.8			108.5		27.9	%
Net corporate expense
Gross profit	$	—		$	0.3		NM		$	—		$	0.6		NM
SG&A		26.9			23.3		15.5	%		71.0			60.5		17.4	%
Operating loss		(26.9)			(23.0)		17.0	%		(71.0)			(59.9)		18.5	%

~~Overview~~

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Overview, Including Items Impacting Comparability

On a consolidated basis, ~~the increase in~~ net sales ~~in the third quarter of fiscal 2017, as compared with the third quarter of fiscal 2016, reflected~~were higher sales in all reportable segments except for the Energy & Mining segment. On a year-to-date basis, higher consolidated sales in 2017, as compared to 2016, reflected increases across all reportable segments. The changes in net sales in the third quarter and first three quarters of ~~fiscal 2017,~~2022, as compared to the same periods of 2021, with ~~fiscal 2016, were as follows:~~

Third quarter
Total ESS E&M Utility Coatings Irrigation
Sales - 2016 $ 610.2
$ 193.1
$ 81.2
$ 150.4
$ 60.0
$ 125.5
Volume 29.7
15.9
(6.9 ) 1.6
1.5
17.6
Pricing/mix 31.7
(3.5 ) 2.0
26.5
5.6
1.1
Acquisitions 1.6
1.6
—
—
—
—
Currency translation 7.6
2.7
3.4
—
0.6
0.9
Sales - 2017 $ 680.8
$ 209.8
$ 79.7
$ 178.5
$ 67.7
$ 145.1

Year-to-date
Total ESS E&M Utility Coatings Irrigation
Sales - 2016 $ 1,847.1
$ 554.9
$ 231.3
$ 445.9
$ 182.2
$ 432.8
Volume 110.4
20.4
(4.9 ) 48.2
(5.6 ) 52.3
Pricing/mix 63.1
(2.2 ) 5.1
42.4
14.5
3.3
Acquisitions 1.6
1.6
—
—
—
—
Currency translation 8.8
(3.4 ) 3.4
—
0.5
8.3
Sales - 2017 $ 2,031.0
$ 571.3
$ 234.9
$ 536.5
$ 191.6
$ 496.7

~~Volume effects are estimated based on a physical production or~~higher sales ~~measure. Since products we sell are not uniform~~ in nature, pricing and mix relate to a combination of changes in sales prices and the attributes of the product sold. Accordingly, pricing and mix changes do not necessarily directly result in operating income changes.

both reporting segments.

Average steel ~~index~~ prices for both hot rolled coil and plate ~~were higher~~have been very volatile over the past two years, especially in North ~~America~~America. While hot rolled coil steel recently decreased in price, the steel consumed during fiscal 2022 within cost of sales was at a much higher average cost than the steel consumed during fiscal 2021. This resulted in higher net sales and ~~China in~~cost of sales during the third quarter and first ~~three quarters~~nine months of ~~2017, as~~2022, when compared to the same ~~periods in 2016, resulting in higher average cost~~period of ~~material. We expect that average~~2021, as customer pricing mechanisms and product selling ~~prices will increase over time to offset the decrease in gross profit realized from the higher cost of steel~~price practices allowed for the ~~Company.~~

~~In the third quarter~~recovery of 2017, the two hurricanes in the continental United States negatively impacted 10 of our facilities by interrupting production and delivery schedules. This impacted certain locations in the ESS, Coatings, and Utilitythat inflation for both reportable segments.

The Company acquired ~~a highway business in India ("Aircon")~~the following businesses:

●

ConcealFab in the second quarter of 2022, a telecommunications technology company that offers 5G infrastructure and passive intermodulation mitigation solutions (Infrastructure).

●

PivoTrac in the second quarter of 2021, an agricultural technology company that offers solutions focused on remote monitoring of center pivot irrigation machines (Agriculture).

●

Prospera in the second quarter of 2021, a privately-held Israeli-based artificial intelligence company, focused on machine learning and computer vision in agriculture (Agriculture).

There were no items of note impacting comparability of results from net earnings in the third quarter of ~~2017 that is~~2022. Items of note impacting comparability of results from net earnings in the first three quarters of 2022 included ~~in our ESS segment.~~

~~Restructuring Plan~~

~~In July 2016,~~amortization of identified intangible assets of $3.6 million ($2.4 million after-tax) and stock-based compensation expense of $5.0 million ($4.6 million after-tax) for the Company identified a restructuring plan in Australia/New Zealand (the "2016 Plan") focused primarily on closing and consolidating locations within the Energy and Mining and Coatings segments. The Company incurred pre-tax expensesemployees from the ~~2016 Plan~~Prospera subsidiary. These items were recognized within SG&A for the Agriculture segment. These items were $1.6 million ($1.3 million after-tax) and $2.5 million ($1.8 million after-tax), respectively, for the third quarter of ~~$2.1~~2022, and $1.9 million ($1.5 million after-tax) and $2.3 million ($ 2.1 million after-tax), respectively, for the third quarter of 2021.

There were no items of note impacting comparability of results from net earnings in the third quarter of ~~2016.~~ 2021. Items of note impacting comparability of results from net earnings in the first three quarters of 2021 included:

●

charges of $5.5 million ($4.4 million after-tax) related to a write-off of a receivable following arbitration,

●

charges of $1.6 million ($1.3 million after-tax) related to restructuring activities, and

●

charges of $1.1 million ($0.8 million after-tax) related to acquisition costs.

Macroeconomic Impacts on Financial Results and Liquidity

We continue to monitor several macroeconomic and geopolitical trends, that impacted our business, including inflationary cost pressures, supply chain disruptions, the strengthened U.S. dollar, the on-going Russia-Ukraine conflict, changing conditions from the COVID-19 pandemic, and labor shortages.

The ~~Energy~~ultimate magnitude of the COVID-19 pandemic, including the extent of its impact on the Company’s financial and ~~Mining~~operational results will be determined by the length of time the pandemic continues, its effect on the demand for the Company’s products and services and supply chain, as well as the effect of governmental regulations imposed in response to the pandemic.

Change in Reportable Segments

On December 26, 2021, the Company’s CODM began to manage the business, allocate resources and evaluate performance based on changes made to the Company’s management structure. As a result, the Company has realigned its reportable segment ~~incurred~~structure. The Company reorganized from a four segment structure previously organized by product category (Utility Structures, Engineered Support Structures, Coatings, and Irrigation) to a two segment reporting structure

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organized by market dynamics (Infrastructure and Agriculture). All prior period information has been recast to reflect this change in reportable segments. See Note 7 to our Condensed Consolidated Financial Statements for additional information.

Backlog

The backlog of unshipped orders at September 24, 2022 was approximately $2.0 billion compared with approximately $1.6 billion at December 25, 2021. The increase is primarily attributed to the receipt of a large purchase order of approximately $200 million for a large project within our renewable energy product line and $135 million for a large project within our transmission, distribution, and substation product line. Both of these projects are within the ~~Coatings segment incurred~~Infrastructure reporting segment. We expect approximately ~~$0.3 million, and Corporate incurred approximately $0.2 million~~$1.8 billion of ~~restructuring expenses during~~ the ~~third quarter of 2016.~~

backlog to be fulfilled within the subsequent 12 months.

Currency Translation

In the third quarter and first three quarters of ~~fiscal 2017,~~2022, we realized an increase in operating ~~profit,~~income, as compared with ~~fiscal 2016, due to~~2021, despite negative currency translation effects. ~~The U.S. dollar primarily weakened against the Brazilian real and South African rand, resulting in more operating profit in U.S. dollar terms.~~ The breakdown of this effect by segment was as

follows:

Total ESS E&M Utility Coatings Irrigation Corporate
Third quarter $ 0.4
$ 0.2
$ 0.1
$ —
$ 0.1
$ —
$ —

Year-to-date $ 1.3
$ 0.1
$ 0.1
$ —
$ (0.1 ) $ 1.2
$ —


	Total		Infrastructure		Agriculture		Corporate
Third quarter	$	(1.9)	$	(1.5)	$	(0.5)	$	0.1
Year-to-date	$	(1.8)	$	(4.0)	$	1.9	$	0.3

Gross Profit, SG&A, and Operating Income

At a consolidated level, ~~the reduction in~~ gross ~~margin (gross~~ profit as a percent of ~~sales)~~sales was relatively flat in the third quarter of 2022 and decreased slightly in the first three quarters of ~~2017,~~2022, as compared with the same periods in ~~2016, was primarily~~2021, but the amount of gross profit increased due to the higher ~~raw material~~average selling prices across ~~most~~all product lines more than offsetting higher costs of ~~our businesses. Gross~~goods sold across the Company. Amounts of gross profit increased for both reportable segments.

The increase in the third quarter ~~and first three quarters~~ of ~~2017, as compared to~~2022 SG&A expense over the same ~~periods in 2016,~~period of 2021 was due to ~~increased sales volumes in most operating segments.~~higher incentives attributed to improved financial results, salary merit increases, and higher travel costs. The Irrigation and Utility segments realized increases in the third quarter and first three quarters of 2017, while ESS and Energy & Mining realized a decrease in gross profit primarily due to sales pricing that did not fully recover higher raw material costs and an unfavorable sales mix. The Coatings segment realized higher gross profit in the third quarter, but lower gross profitincrease in the first three quarters of ~~2017 as compared~~2022 SG&A expense over the same period of 2021 was due to the ~~same periods in fiscal 2016.~~

incremental SG&A from the May 2021 acquisition of Prospera (including intangible asset amortization, stock-based compensation, and research and development costs), higher incentives attributed to improved financial results, salary merit increases, and higher travel costs.

The ~~Company saw an~~ increase in SG&A in the third quarter and first three quarters of fiscal 2017, as compared to the same periods in 2016, due to higher incentive expenses related to improved business operations. In addition, the Company incurred higher deferred compensation expenses in the first three quarters of 2017 of $1.7 million, which was offset by the same amount of other income.

In the third quarter of 2017, as compared to 2016, operating income for all operating segments were higher except for the ESS and Energy & Mining segments. On a year-to-date basis, operating income was higher in 2017 for the Utility and Irrigation segments and lower for the ESS and Coatings segments. The increase inconsolidated operating income in the third quarter and first three quarters of ~~2017,~~2022, as compared to the same periods ~~in 2016,~~of 2021, is primarily ~~attributable~~due to ~~increased sales volumes~~the increase in average selling prices more than offsetting higher costs of goods sold. This was partially offset by the ~~Utility and Irrigation segments.~~

increase in SG&A year over year.

Net Interest Expense ~~and Debt~~

~~Net interest~~

Interest expense increased in the third quarter and first three quarters of ~~2017,~~2022, as compared ~~with~~to the same periods in ~~2016, was consistent~~2021, due to ~~minimal changes in short and long-term borrowings. Interest income increased due to more cash~~borrowing on ~~hand to invest.~~

the revolving line of credit.

Other Income/~~Expense~~

Expenses (including Gain (loss) on Investments - Unrealized)

The change in other income/~~expense~~expenses in the third quarter ~~and first three quarters~~ of ~~2017,~~2022, as compared ~~with the same periods in 2016,~~to 2021, was primarily due to a lower pension benefit of $1.3 million and the change in the valuation of deferred compensation ~~assets. This change~~assets, shown as "Gain (loss) on investments - unrealized" on the condensed consolidated statements of earnings, which resulted in lower other income of $1.4 million. The change in ~~the third quarter of $0.4 million but increased~~ other ~~income for~~income/expenses in the first three quarters of ~~$1.7~~2022, as compared to 2021, was primarily due to a lower pension benefit of $3.5 million and the change in the valuation of deferred compensation assets which resulted in lower other income of $6.0 million. ~~This amount~~The change related to deferred compensation assets is offset by an opposite change of the same amount in SG&A expense. The change in the market value of the Company's shares held of Delta EMD was a $0.6 million smaller loss on a year-to-date basis when comparing 2017 to 2016. The remaining change was due to foreign currency transaction gains or losses.

Income Tax Expense

Our effective income tax rate in the third quarter and first three quarters of ~~2017~~2022 was ~~27.5%~~27.6% and ~~28.9%, respectively,~~27.3% compared to ~~32.6%~~23.4% and ~~31.7%~~21.3% in the third quarter and first three quarters of ~~2016, respectively. A $1.9 million reversal~~2021. The increase in the effective tax rate was primarily due to a change in geographical earnings and the finalization of ~~a valuation allowance against certain foreign net operating loss carryforwards in third quarter of 2017 contributed to the lower~~

U.S. tax ~~rate. In addition, the Company recorded $1.8 million of deferred income tax expense~~regulations related to ~~decreased future corporate~~foreign tax ~~rates~~credits during 2022. In

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addition, there was an incremental tax benefit in 2021 driven by a change in the United Kingdom tax rate which did not recur in ~~the third quarter of 2016.~~

2022.

Earnings Attributable to Noncontrolling Interests

Earnings attributable to noncontrolling interests ~~was consistent in the third quarter and first three quarters of 2017, as compared to the same periods in 2016.~~

~~Cash Flows from Operations~~

Our cash flows provided by operations was $134.4 million in the first three quarters of fiscal 2017, as compared with $127.3 million provided by operations in the first three quarters of 2016. The increase in operating cash flow in the first three quarters of fiscal 2017, as compared with 2016, was primarily the result of improved net earnings mostly offset by higher net working capital tied to increased sales volumes.

~~Engineered Support Structures (ESS) segment~~

The increase in sales in the third quarter and first three quarters of fiscal 2017, as compared with the same periods of 2016, was due to improved roadway product sales volumes and higher communication product line sales volumes.

Global lighting and traffic, and roadway product sales in the third quarter and first three quarters of 2017 were higher compared to the same periods in fiscal 2016, primarily due to increased sales volumes in roadway product sales, which is a product line outside of North America. In the third quarter and first three quarters of 2017, as compared to 2016, sales volumes in the U.S. were lower across commercial and transportation markets. The 2015 long-term U.S. highway bill has not yet provided a meaningful uplift for our North America structures business. Sales in Europe were higher in the third quarter but lower in the first three quarters of 2017 compared to the same periods in fiscal 2016. The domestic markets in general remain subdued in Europe. The increase in sales volume was partially offset by unfavorable currency translation effects on a year-to-date basis.

~~Communication product line sales~~ were higher in the third quarter and first three quarters of 2022 as compared to 2021 due to higher net earnings of the subsidiaries Valmont does not own 100%.

Cash Flows from Operations

Our cash flows provided by operations were $183.7 million in the first three quarters of fiscal ~~2017,~~2022, as compared with $61.8 million provided by operations in the ~~same periods~~first three quarters of 2021. The increase in ~~fiscal 2016. In both North America~~operating cash flows in the first three quarters of 2022, as compared with 2021, was primarily the result of the increase in net earnings and ~~Asia-Pacific, communication structure and component~~a smaller increase in working capital levels, partially offset by a significant increase in the contribution to the defined benefit pension plan of approximately $17 million.

Infrastructure segment


	Thirteen weeks ended
					Dollar
Infrastructure	Q3 2022		Q3 2021		Change		% Change
Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation		304.8		239.6		65.2	27.2	%
Lighting & Transportation		241.6		218.0		23.6	10.8	%
Coatings		92.0		76.8		15.2	19.8	%
Telecommunications		92.8		63.1		29.7	47.1	%
Renewable Energy		47.2		36.9		10.3	27.9	%
Total	$	778.4	$	634.4	$	144.0	22.7	%

Operating Income	$	93.6	$	71.4	$	22.2	31.1	%


	Thirty-nine weeks ended
					Dollar
Infrastructure	Q3 2022		Q3 2021		Change		% Change
Sales, gross of intercompany eliminations:
Transmission, Distribution and Substation		882.2		668.5		213.7	32.0	%
Lighting & Transportation		701.0		609.7		91.3	15.0	%
Coatings		264.3		231.9		32.4	14.0	%
Telecommunications		232.8		162.8		70.0	43.0	%
Renewable Energy		143.8		128.6		15.2	11.8	%
Total	$	2,224.1	$	1,801.5	$	422.6	23.5	%

Operating Income	$	255.7	$	187.4	$	68.3	36.4	%

Net sales ~~increased due to higher demand from the continued network expansion by providers.~~

~~Gross profit, as a percentage of sales, and operating income for the segment were lower~~ in the third quarter and first three quarters of ~~2017,~~2022, as compared to 2021, increased for this segment across all of the product lines primarily due to higher average selling prices partially offset by $17.6 million in third quarter of 2022 and $40.8 million in the first three quarters of 2022 of unfavorable foreign currency translation effects. From a geography perspective, the increase in sales within North America was much higher than within international markets. The lower reported international sales in 2022, versus 2021, is partially attributed to currency translation effects (appreciation of the U.S. dollar).

Transmission, distribution, and substation sales increased in the third quarter and first three quarters of 2022 as compared with 2021, primarily due to substantially higher average selling prices. This increase in average selling prices is due to a number of our sales contracts in North America containing mechanisms that tie the sales price to published steel

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index pricing at the time our customer issues their purchase order. Sales volumes increased modestly in the third quarter and first three quarters of 2022, as compared to 2021.

Lighting and transportation sales increased during the third quarter and first three quarters of 2022, as compared to the same period in fiscal 2021, due to meaningfully higher average selling prices, primarily in North America, from the continuation of realized pricing actions. Sales volumes increased in North America for both the third quarter and first three quarters of 2022 while volumes decreased within international markets during the first three quarters of 2022. Reported international sales also decreased in the third quarter and first three quarters of 2022 due to unfavorable foreign currency translation effects.

Telecommunication sales increased in the third quarter of 2022, as compared with the same periods in ~~2016,~~2021, due primarily to higher average selling prices and sales generated by the recent acquisition. Sales volumes increased in the first three quarters of 2022, as compared with the same period of 2021 as 5G deployments continue to increase market opportunities across all regions. Average selling prices were higher in the first three quarters of 2022, as compared to 2021.

Coatings sales increased in the third quarter and first three quarters of 2022, as compared to the same periods in 2021, due to ~~margin contraction from~~ higher ~~raw material costs that~~average selling prices. Coating sales also increased in the ~~business was not able~~third quarter of 2022, as compared to ~~fully recover through higher~~2021, due to improved sales ~~pricing. SG&A spending~~volume. Renewable energy sales increased in the third quarter and first three quarters of 2022, as compared to 2021, due to improved sales volumes partially offset by unfavorable foreign currency translation effects.

Gross profit was higher in the third quarter ~~of 2017, as compared to 2016, due to foreign currency translation effects. SG&A spending was lower in the~~and first three quarters of ~~2017,~~2022, as compared to ~~2016, due primarily~~2021. The customer contractual pricing mechanisms and selling price management led to ~~lower commissions owed on communication product line sales, reduced incentives~~a large increase in average selling prices while maintaining gross profit margins in a highly inflationary environment. The increase in operating income for the third quarter and first three quarters of 2022, as compared with 2021, is due to ~~decreased~~a 22% increase in gross profit versus an approximately 15% increase in SG&A. The operating ~~performance, and currency translation effects.~~

~~Energy & Mining (E&M) segment~~

~~The decrease in net sales~~income margin increased to 12% in the third quarter of ~~2017, as compared~~2022, from 11% in third quarter of 2021, due to ~~2016, was due primarily to lower sales volumes that were partially offset by~~the higher ~~sales pricing and favorable currency translation effects.~~ average selling prices.

Agriculture segment


	Thirteen weeks ended
					Dollar
Agriculture	Q3 2022		Q3 2021		Change		% Change
Sales, gross of intercompany eliminations:
North America		178.6		116.3		62.3	53.6	%
International		148.6		124.0		24.6	19.8	%
Total	$	327.2	$	240.3	$	86.9	36.2	%

Operating Income	$	43.3	$	27.7	$	15.6	56.3	%


	Thirty-nine weeks ended
					Dollar
Agriculture	Q3 2022		Q3 2021		Change		% Change
Sales, gross of intercompany eliminations:
North America		564.4		395.1		169.3	42.8	%
International		447.2		356.9		90.3	25.3	%
Total	$	1,011.6	$	752.0	$	259.6	34.5	%

Operating Income	$	138.8	$	108.5	$	30.3	27.9	%

The increase in ~~net sales in the first three quarters of 2017, as compared to 2016, was due to higher sales pricing and favorable currency translation effects.~~

~~Access systems product line~~Agriculture segment net sales in the third quarter and first three quarters of ~~2017 were higher than the same periods in 2016 due to higher sales pricing and favorable currency translation effects. The increase was partially offset by lower external sales volumes in Asia.~~

~~Offshore and other complex structures sales decreased in the third quarter of 2017,~~2022, as compared to ~~the same period in 2016,~~2021, was primarily due to ~~lower~~much higher average selling prices of irrigation equipment globally. In North America, higher sales volumes ~~that were partially offset by favorable currency translation effects. Sales decreased~~for irrigation systems and parts in ~~the first three quarters of 2017,~~2022, as compared to ~~2016, due to~~2021, were driven by improved agricultural commodity prices. The International irrigation product line experienced a slightly lower sales ~~pricing that was partially offset by~~ volume ~~improvements primarily in the wind tower product line.~~

~~Grinding media sales were down slightly in~~for the third quarter and first three quarters of ~~2017,~~2022 as compared to ~~the same periods in 2016. A decrease in~~2021. Overall lower project sales ~~volumes was offset by higher sales pricing and favorable currency translation effects.~~

~~Operating income~~to Egypt for the segment in the third quarter of 2017, as compared to 2016, was lower primarily due to sales pricing that did not fully recover higher material costs in the grinding media business. Operating income was comparable in the first three quarters of 2017 as compared to 2016, due to benefits realized in Access Systems from the 2016 restructuring activities offsetting the lower gross profit realized from higher material costs. SG&A expense was flat in the third quarter and first three quarters of ~~2017, as compared to~~2022 more than offset the ~~same periods~~sales volume increases in ~~2016. Restructuring costs incurred~~most foreign markets. Partially offsetting that decrease was a sales volume increase in the third quarter of ~~2016~~2022 versus 2021 due to robust demand for irrigation equipment and ~~lower compensation~~agriculture

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solar products in Brazil. Sales of technology-related products increased as growers continued adoption of technology to reduce costs ~~were~~and enhance profitability.

The increase in gross profit in 2022, as compared to 2021, was primarily attributed to the meaningfully higher average selling prices which more than offset ~~by currency translation effects~~the amount of inflation within cost of goods sold, as well as increased volume in ~~2017.~~

~~Utility Support Structures (Utility) segment~~

~~In the Utility segment, sales increased~~North America. SG&A was higher in the third quarter of ~~2017,~~2022, as compared ~~with 2016,~~to 2021, primarily due to ~~the~~ higher compensation and travel costs, ~~of steel~~as well as increased research and ~~a favorable sales mix. A number of our sales contracts contain provisions that tie the sales price to published steel index pricing at the time our customer issues their purchase order. For~~development spending. SG&A was higher in the first three quarters of ~~2017,~~2022, as compared to ~~2016, improved sales demand in North America resulted in increased sales volumes in tons for steel utility structures also contributed~~2021, due to higher overall compensation cost and the ~~increase in sales. Sales volumes in tons for concrete utility structures were also higher~~SG&A from the Prospera subsidiary acquired in the third quarter of 2021, including the amortization of identified intangible assets, research and ~~first three quarters of 2017, as compared~~development costs, and stock-based compensation expense. Operating income for the segment was higher in 2022, versus 2021, due to an increase in gross profit, attributed primarily to the ~~same periods in 2016. International utility structures sales decreased in 2017 due to lower volumes.~~

~~Gross profit as a percentage of sales increased in~~higher average selling prices, partially offset by the ~~third quarter and first three quarters of 2017, as compared to the same periods in 2016, due to improved pricing and sales mix.~~higher SG&A.

Net corporate expense

Corporate SG&A expense was higher in the third quarter and first three quarters of ~~2017,~~2022, as compared ~~with~~to the same periods in ~~2016,~~2021, primarily due to higher incentive accruals related to business performance, an increase in rent expense, and ~~commission~~higher compensation expense ~~attributed~~due to salary merit increases. These increases were partially offset by $1.4 million and $6.0 million of lower expense from the ~~increased sales volumes. Operating income increased~~change in valuation of the deferred compensation plan assets in the third quarter and first three quarters of ~~2017, as compared with 2016, due to the increased sales volumes and improved sales pricing.~~

~~Coatings segment~~

Coatings segment sales increased in the third quarter and first three quarters of 2017, as compared to the same periods in 2016, due primarily to increased sales prices to recover higher zinc costs globally. External sales volumes in North America increased in the third quarter but were lower year-to-date, while intercompany volumes increased in the third quarter and first three quarters. In the Asia-Pacific region, improved demand/volume provided an increase in net sales.

SG&A expense was lower in the third quarter of 2017, as compared to 2016, due to restructuring actions undertaken in 2016 to reduce the cost structure in Australia. SG&A expense was comparable in the first three quarters of 2017, as compared to 2016. Operating income was higher in the third quarter of 2017 compared to 2016, due to improved sales pricing and restructuring actions undertaken in 2016. Operating income was lower in the first three quarters of 2017, as compared with 2016, due to costs incurred to start up our facility in Texas.

~~Irrigation segment~~

The increase in Irrigation segment net sales in the third quarter of 2017, as compared to 2016, was primarily due to sales volume increases for international irrigation. On a year-to-date basis in 2017 as compared to 2016, the sales increase is driven by improved volumes for both the domestic and international irrigation businesses. In North America, when comparing 2017 to the same periods of 2016, sales volumes were comparable in the third quarter but increased year-to-date primarily driven by markets outside the traditional corn-belt. In addition, higher equipment running times due to weather conditions resulted in higher service parts sales on a year-to-date basis. International sales increased in the third quarter and first three quarters of 2017, as compared to the same periods in 2016, due to volume increases across most regions and favorable foreign currency translation effects for Brazil and South Africa.

SG&A was higher in the third quarter and first three quarters of fiscal 2017, as compared with the same periods in 2016. The increase can primarily be attributed to higher incentive costs due to improved business results and currency translation effects related to the international irrigation business. Operating income for the segment increased in the third quarter and first three quarters of fiscal 2017 over the same periods in 2016, primarily due to North America and international irrigation sales volume increases, productivity improvements, and favorable foreign currency translation effects.

~~Net corporate expense~~

Corporate SG&A expense was lower in the third quarter of 2017, as compared to the same period in 2016, due to $0.4 million lower pension expense for the Delta Pension Plan and $0.4 million of lower deferred compensation expenses that is offset by the same amount in other expense. Net corporate expense slightly increased in the first three quarters of 2017 as

compared to 2016, due to $1.7 million of higher deferred compensation expenses that is offset by a reduction of the same amount in other expense. This increase was partially offset by $1.0 million of lower pension expenses for the Delta Pension Plan.

2022, respectively.

Liquidity and Capital Resources

~~Cash Flows~~

~~Working~~

Capital Allocation Philosophy

We have historically funded our growth, capital spending and ~~Operating Cash Flows-Net working capital was~~ ~~$1,034.7 million~~ at ~~September 30, 2017, as compared to~~ ~~$903.4 million~~ at ~~December 31, 2016~~. The increase in net working capital in 2017 mainly resulted from increased receivables, cash on hand, and inventory, partially offset by higher accrued expenses and accounts payable. Cash flow provided by operations was $134.4 million in the first three quartersacquisitions through a combination of ~~2017, as compared with $127.3 million in first three quarters of 2016. The increase in~~ operating cash ~~flow in~~flows and debt financing. The following are the ~~first three quarters of 2017, as compared~~capital allocation/priorities for cash generated:

●

working capital and capital expenditure investments necessary for future sales growth;

●

dividends on common stock in the range of 20% of the prior year’s fully diluted net earnings;

●

acquisitions; and

●

return of capital to shareholders through share repurchases.

We also announced our intention to ~~2016, was primarily the result of higher net earnings tied~~manage our capital structure to ~~increased sales volumes~~maintain our investment grade debt rating. Our most recent ratings were Baa3 by Moody’s Investors Services, Inc., BBB- by Fitch Ratings, and ~~pricing that was mostly offset~~BBB+ by Standard and Poor’s Rating Services. We would be willing to allow our debt rating to fall to BBB- to finance a ~~corresponding increase in working capital.~~

~~Investing Cash Flows-Capital spending in the first three quarters of fiscal 2017 was $39.9 million, as compared to $42.2 million for the same period in~~ ~~2016. Capital spending projects in 2017 and 2016 related to investments in machinery and equipment across all businesses.~~special acquisition or other opportunity. We expect to maintain a ratio of debt to invested capital which will support our ~~capital spending for the 2017 fiscal year to be approximately $60 million.~~

~~Financing Cash Flows-Our total interest‑bearing~~current investment grade debt ~~decreased slightly to~~ ~~$755.3 million~~ at ~~September 30, 2017~~ ~~from~~ ~~$756.4 million~~ at ~~December 31, 2016. Financing cash flows changed from a use~~rating.

The Board of ~~approximately $82.4 million~~Directors in the first three quarters of fiscal 2016 to a use of $22.0 million in the first three quarters of fiscal 2017. The reduction of financing cash outflows in the first three quarters of 2017, as compared to 2016, was due to the Company purchasing $46.6 million of treasury shares under our share repurchase program andMay 2014 authorized the purchase of ~~certain noncontrolling interests totaling $11.0~~up to $500 million ~~in 2016.~~

~~Financing and Capital~~

~~We have~~of the Company’s outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately-negotiated transactions. The Board of Directors authorized an ~~open~~additional $250 million ~~authorized~~of share ~~purchase program~~purchases, without an expiration ~~date.~~date in both February 2015 and again in October 2018. The ~~share~~ purchases will be funded from available working capital and short-term borrowings and will be made subject to market and economic conditions. We are not obligated to make any ~~share~~ repurchases ~~under the share repurchase program~~ and we may discontinue the ~~share repurchase~~ program at any time. ~~No shares were repurchased during the first three quarters of 2017.~~ As of September ~~30, 2017,~~24, 2022, we have acquired approximately ~~$132.2~~6.6 million ~~open~~shares for approximately $898.6 million under this ~~authorization~~share repurchase program.

On February 22, 2022, the Company announced that the Board of Directors approved an increase to ~~repurchase shares in~~ the ~~future.~~quarterly cash dividend on the common stock to $0.55 per share, or a rate of $2.20 per share on an annualized basis, an increase of 10% from the prior quarterly cash dividend of $0.50 per share.

Our capital allocation philosophy announcement included our intention to manage our capital structure to maintain our investment grade debt rating. Our most recent rating were Baa3 by Moody's Investors Services, Inc. and BBB+ rating by Standard and Poor's Rating Services. We expect to maintain a leverage ratio which will support our current investment grade debt rating.

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Sources of Financing

Our debt financing at September ~~30, 2017 is~~24, 2022 consisted primarily ~~long-term~~of long‑term debt ~~consisting~~and borrowings on our revolving credit facility. Our long‑term debt as of September 24, 2022, principally consisted of:

●

$450 million face value ($437.1 million carrying value) of senior unsecured notes that bear interest at 5.00% per annum and are due in October 2044.

●

$305 million face value ($297.7 million carrying value) of senior unsecured notes that bear interest at 5.25% per annum and are due in October 2054.

~~$250.2 million face value ($253.0 million carrying value) of senior unsecured notes that bear interest at 6.625% per annum and are due in April 2020.~~

~~$250 million face value ($248.9 million carrying value) of senior unsecured notes that bear interest at 5.00% per annum and are due in October 2044.~~

~~$250 million face value ($246.8 million carrying value) of unsecured notes that bear interest at 5.25% per annum and are due in October 2054.~~

We are allowed to repurchase the notes ~~at specified prepayment premiums. All three~~subject to the payment of a make-whole premium. Both tranches of these notes are guaranteed by certain of our subsidiaries.

~~On October 18, 2017, we amended and restated our~~

Our revolving credit facility with JP Morgan Chase Bank, N.A., as Administrative Agent, and the other lenders party ~~thereto.~~ thereto, has a maturity date of October 18, 2026.

The revolving credit facility provides for ~~$600~~$800 million of committed unsecured revolving credit ~~loans.~~loans with available borrowings thereunder to $400 million in foreign currencies. We may increase the credit facility by up to an additional ~~$200~~$300 million at any time, subject to lenders increasing the amount of their commitments. ~~Our~~The Company and our wholly-owned subsidiaries Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., ~~along with the Company,~~ are authorized borrowers under the credit facility. The obligations arising under the revolving credit facility are guaranteed by the Company and its wholly-owned subsidiaries ~~PiRod,~~Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd.

The ~~amendments~~interest rate on our borrowings will be, at our option, either:

(a)

term SOFR (based on a 1, 3 or 6 month interest period, as selected by the Company) plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending on the credit rating of the Company’s senior, unsecured, long-term debt published by Standard & Poor’s Rating Services and Moody’s Investors Service, Inc.;

(b)

the higher of

●

the prime lending rate,

●

the overnight bank rate plus 50 basis points, and

●

term SOFR (based on a 1 month interest period) plus 100 basis points,

plus, in each case, 0 to 62.5 basis points, depending on the credit rating of our senior, unsecured, long-term debt published by Standard & Poor’s Rating Services and Moody’s Investors Service, Inc.; or

(c)

daily simple SOFR plus a 10 basis point adjustment plus a spread of 100 to 162.5 basis points, depending on the credit rating of the Company’s senior, unsecured, long-term debt published by Standard & Poor’s Rating Services and Mood’s Investors Service, Inc.

A commitment fee is also required under the revolving credit facility which ~~are adopted in the amended and restated credit agreement, include:~~

~~an extension of the maturity date of the credit facility from October 17, 2019 to October 18, 2022;~~

~~an increase in the available borrowings in foreign currencies from $200 million to $400 million;~~

~~a decrease in the range of commitment fees payable from 10 to 27.5 basis points to~~accrues at 10 to 25 basis points, ~~(the specific commitment fees payable~~depending on the credit rating of our senior, unsecured long-term debt published by Standard and Poor’s Rating Services and Moody’s Investor Services, Inc., on the average daily unused portion of the commitments under the ~~credit facility depend on the credit rating of the Company's senior, unsecured, long-term debt);~~

~~a modification of the definition of "EBITDA" to add-back non-recurring cash and non-cash restructuring costs in an amount that does not exceed $75 million in any trailing twelve month period;~~

~~a modification of the leverage ratio permitting it to increase from 3.5X to 3.75X for the four consecutive fiscal quarters after certain material acquisitions;~~

~~implementing beneficial changes to certain of the baskets and exceptions in the negative covenants of the credit facility; and~~

~~updating the credit facility with certain market provisions.~~

~~At September 30, 2017 and December 31, 2016, we had no outstanding borrowings under our~~ revolving credit agreement.

At September 24, 2022 and December 25, 2021, we had outstanding borrowings of $205.6 million and $218.9 million, respectively, under the revolving credit facility. The revolving credit ~~agreement~~facility has a maturity date of October 18, 2026 and contains ~~certain~~a financial ~~covenants~~covenant that may limit our additional borrowing capability under the agreement. At September ~~30, 2017,~~24, 2022, we had the ability to borrow ~~$585.2~~$594.4 million under this facility, after consideration of standby letters of credit of ~~$14.8~~$0.2 million associated with certain insurance ~~obligations and international sales commitments.~~obligations. We also maintain certain ~~short-term~~short‑term bank lines of credit totaling ~~$113.0 million, $112.8~~$130.1 million; $125.1 million of which was unused at September ~~30, 2017.~~24, 2022.

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Our senior, unsecured notes and revolving credit agreement each contain cross-default provisions which permit the acceleration of our indebtedness to them if we default on other indebtedness that results in, or permits, the acceleration of such other indebtedness.

The revolving credit facility requires maintenance of a financial leverage ratio, measured as of the last day of each of our fiscal quarters, of 3.50:1 or less. The leverage ratio is the ratio of: (a) interest-bearing debt minus unrestricted cash in excess of $50 million (but not exceeding $500 million); to (b) adjusted EBITDA. The debt agreements ~~contain covenants that require us~~provide a modification of the definition of “EBITDA” to ~~maintain certain coverage ratios~~add-back any non-cash stock-based compensation in any trailing twelve month period and ~~may limit us with respect to certain business activities, including capital expenditures. The debt agreements~~ allow ~~us to add estimated EBITDA from acquired businesses for periods we did not own the acquired business. The debt agreements also provide~~ for an adjustment to EBITDA, subject to certain limitations, for non-cash charges or gains that are non-recurring in nature. ~~For 2017,~~The leverage ratio is permitted to increase from 3.50:1 to 3:75:1 for the four consecutive fiscal quarters after certain material acquisitions.

The amended and restated revolving credit agreement also contains customary affirmative and negative covenants or credit facilities of this type, including, among others, limitations on us and our ~~covenant calculations do not include any estimated EBITDA from acquired businesses.~~

~~Our key debt covenants are as follows:~~

~~Interest-bearing debt is not~~subsidiaries with respect to ~~exceed 3.5X Adjusted EBITDA~~indebtedness, liens, mergers and acquisitions, investments, dispositions of assets, restricted payments, transactions with affiliates and prepayments of indebtedness. The amended and restated revolving credit agreement also provides for acceleration of the ~~prior four quarters;~~obligations thereunder and

~~Adjusted EBITDA over~~ exercise of other enforcement remedies upon the ~~prior four quarters must be at least 2.5X our interest expense over the same period.~~

occurrence of customary events of default (subject to customary grace periods, as applicable).

At September ~~30, 2017,~~24, 2022, we were in compliance with all covenants related to ~~the~~these debt agreements. ~~The key covenant calculations at September 30, 2017 were as follows:~~

Interest-bearing debt $ 755,348
Adjusted EBITDA-last four quarters 345,590
Leverage ratio 2.19

Adjusted EBITDA-last four quarters $ 345,590
Interest expense-last four quarters 44,445
Interest earned ratio 7.78

The calculation of Adjusted EBITDA-last four quarters ~~(September 25, 2016 through September 30, 2017) is as follows:~~

Net cash flows from operations $ 226,318
Interest expense 44,445
Income tax expense 42,666
Impairment of property, plant and equipment (481 )
Loss on investment (8 )
Change in fair value of contingent consideration (285 )
Deferred income tax benefit 22,072
Noncontrolling interest (5,292 )
Stock-based compensation (10,659 )
Increase in restricted cash - pension plan trust (12,568 )
Pension plan expense (865 )
Contribution to pension plan 26,840
Changes in assets and liabilities 29,167
Other 350
EBITDA 361,700
Reversal of contingent liability (16,591 )
Impairment of property, plant and equipment 481
Adjusted EBITDA $ 345,590

Net earnings attributable to Valmont Industries, Inc. $ 189,915
Interest expense 44,445
Income tax expense 42,666
Depreciation and amortization expense 84,674
EBITDA 361,700
Reversal of contingent liability (16,591 )
Impairment of property, plant, and equipment 481
Adjusted EBITDA $ 345,590

and the Leverage ratio are presented in the tables below in Selected Financial Measures.

Cash Uses

Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to pension plan, and, if market conditions warrant, occasional investments in, or acquisitions of, business ventures. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all consistent with the terms of our debt agreements.

Our businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, recent issuance of senior unsecured notes and our history of positive operational cash flows, we believe that we have adequate liquidity to meet our needs.

We have not made any provision for U.S. income taxes in our financial statements on approximately $437.8 million of undistributed earnings of our foreign subsidiaries, as we intend to reinvest those earnings. Of our cash balances of ~~$493.5~~$166.2 million at September ~~30, 2017,~~24, 2022, approximately ~~$370.5~~$136.6 million is held in ~~entities outside the United States.~~our non-U.S. subsidiaries. If we ~~need to repatriate~~distributed our foreign cash balances ~~to the United States to meet our cash needs, income~~certain taxes would be ~~paid to the extent that those cash repatriations were undistributed earnings of our~~applicable. At September 24, 2022, we have a liability for foreign ~~subsidiaries. The determination of the additional~~withholding taxes and U.S. ~~federal and~~ state income taxes of $3.8 million and $0.7 million, respectively.

Cash Flows

The following table includes a summary of our cash flow information for the thirty-nine weeks ended September 24, 2022 and September 25, 2021:


Dollars in thousands	2022		2021
Cash flow data:
Net cash flows from operating activities	$	183,726	$	61,829
Net cash flows from investing activities		(106,446)		(389,463)
Net cash flows from financing activities		(79,143)		101,016

Working Capital and Operating Cash Flows- Net working capital was $981.9 million at September 24, 2022, as compared to $946.9 million at December 25, 2021. The increase in net working capital in 2022 is attributed to an increase in inventory due to higher average steel costs, an increase in accounts receivables, partially offset by an increase in accounts payable. Cash flow provided by operations was $183.7 million in the first three quarters of 2022, as compared with $61.8 million in the first three quarters of 2021. The increase in operating cash flows in the first three quarters of 2022, as compared

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with 2021, was primarily the result of the increase in net earnings partially offset by a significant increase in the contribution to the defined benefit pension plan.

Investing Cash Flows- Cash used in investing activities totaled $106.4 million in the first three quarters of 2022, compared to $389.5 million in the first three quarters of 2021. Investing activities in 2022 primarily included capital spending of $67.1 million and the acquisition of ConcealFab for $39.3 million. For the first three quarters of 2021, investing activities primarily included capital spending of $80.5 million and the acquisition of two businesses for $312.5 million. We expect our capital expenditures to be in the range of $95 million to $105 million for fiscal 2022.

Financing Cash Flows- Our total interest-bearing debt was $942.2 million at September 24, 2022 and $965.4 million at December 25, 2021. Cash used in financing activities totaled $79.1 million in 2022, compared to cash provided of $101.0 million in 2021.

The financing cash used in the first three quarters of 2022 was primarily the result of borrowings on the revolving credit agreement and short-term notes of $239.6 million; offset by principal payments on our long-term debt and short-term borrowings of $263.5 million, and dividends paid of $34.1 million, the purchase of treasury shares of $20.5 million, and the purchase of non-controlling interests of $7.3 million. The financing cash provided for the first three quarters of 2021 was primarily due to borrowings on the revolving credit agreement and short-term borrowings of $239.9 million; somewhat offset by the principal payments on our long-term debt and short-term borrowings of $89.8 million, dividends paid of $30.8 million, and the purchase of treasury shares of $24.1 million

Guarantor Summarized Financial Information

We are providing the following information in compliance with Rule 3-10 and Rule 13-01 of Regulation S-X with respect to our two tranches of senior unsecured notes. All of the senior notes are guaranteed, jointly, severally, fully and unconditionally (subject to certain customary release provisions, including sale of the subsidiary guarantor, or sale of all or substantially all of its assets) by certain of the Company’s current and future direct and indirect domestic and foreign ~~withholding taxes have~~subsidiaries (collectively the “Guarantors”). The Parent is the Issuer of the notes and consolidates all Guarantors.

The financial information of Issuer and Guarantors is presented on a combined basis with intercompany balances and transactions between Issuer and Guarantors eliminated. The Issuer’s or Guarantors’ amounts due from, amounts due to, and transactions with non-guarantor subsidiaries are separately disclosed.

Combined financial information is as follows:

Supplemental Combined Parent and Guarantors Financial Information

For the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021


	Thirteen weeks ended				Thirty-nine weeks ended
Dollars in thousands	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Net sales	$	716,429	$	520,188	$	2,112,678	$	1,551,701
Gross Profit		165,323		143,724		510,591		426,167
Operating income		59,496		49,166		201,633		159,994
Net earnings		35,791		26,125		124,128		92,200
Net earnings attributable to Valmont Industries, Inc.		33,708		26,098		124,233		92,090

Supplemental Combined Parent and Guarantors Financial Information

September 24, 2022 and December 25, 2021


Dollars in thousands	September 24, 2022		December 25, 2021
Current assets	$	803,504	$	801,797
Noncurrent assets		904,481		807,294
Current liabilities		470,927		383,394
Noncurrent liabilities		1,226,321		1,305,756
Noncontrolling interest in consolidated subsidiaries		1,738		1,844

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Included in noncurrent assets is a due from non-guarantor subsidiaries receivable of $185,795 and $93,613 at September 24, 2022 and December 25, 2021. Included in noncurrent liabilities is a due to non-guarantor subsidiaries payable of $169,899 and $236,577 at September 24, 2022 and December 25, 2021.

Selected Financial Measures

We are including the following financial measures for the company.

Adjusted EBITDA. Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) is one of our key financial ratios in that it is the basis for determining our maximum borrowing capacity at any one time. Our bank credit agreements contain a financial covenant that our total interest‑bearing debt not ~~been provided,~~exceed 3.50x Adjusted EBITDA (or 3.75x Adjusted EBITDA after certain material acquisitions) for the most recent four quarters. These bank credit agreements allow us to add estimated EBITDA from acquired businesses for periods we did not own the acquired businesses. The bank credit agreements also provide for an adjustment to EBITDA, subject to certain specified limitations, for non-cash charges or gains that are non-recurring in nature. If this financial covenant is violated, we may incur additional financing costs or be required to pay the debt before its maturity date. Adjusted EBITDA is non-GAAP measure and, accordingly, should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure of our operating performance or liquidity. The calculation of Adjusted EBITDA-last four quarters (September 25, 2021 to September 24, 2022) is as follows:


Dollars in thousands	Last four quarters Q3 2022
Net cash flows from operations	$	187,835
Interest expense		45,423
Income tax expense		94,910
Impairment of long-lived assets		(27,911)
Deferred income tax (expense) benefit		(5,326)
Noncontrolling interest		(3,470)
Pension plan benefit		11,113
Contribution to pension plan		18,109
Changes in assets and liabilities, net of acquisitions		198,063
Other		(1,875)
EBITDA	$	516,871
Impairment of long-lived assets		27,911
Adjusted EBITDA	$	544,782


	Last four quarters Q3 2022
Net earnings attributable to Valmont Industries, Inc.	$	237,387
Interest expense		45,423
Income tax expense		95,623
Stock based compensation		40,823
Depreciation and amortization expense		97,615
EBITDA	$	516,871
Impairment of long-lived assets		27,911
Adjusted EBITDA	$	544,782

EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. In October 2021, our revolving credit facility was amended to allow the Company to add-back any non-cash stock-based compensation in any trailing twelve month period and allow for an adjustment to EBITDA, subject to certain limitations, for non-cash charges or gains that are non-recurring in nature.

Leverage ratio. Leverage ratio is calculated as the ~~determination~~sum of interest-bearing debt minus unrestricted cash in excess of $50 million (but not exceeding $500 million); divided by Adjusted EBITDA. The leverage ratio is one of the key financial ratios in the covenants under our major debt agreements and the ratio cannot exceed 3.5 (or 3.75x after certain material acquisitions) for any reporting period (four quarters). If those covenants are violated, we may incur additional financing costs or be required to pay the debt before its maturity date. Leverage ratio is a non-GAAP measure and, accordingly, should not ~~practicable.~~be considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure of our operating performance or liquidity.

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The calculation of this ratio at September 24, 2022 is as follows:


Dollars in thousands	2022
Interest-bearing debt	$	942,170
Less: Cash and cash equivalents in excess of $50 million		116,221
Net indebtedness	$	825,949
Adjusted EBITDA		544,782
Leverage Ratio		1.52

Leverage ratio, as presented, may not be comparable to similarly titled measures of other companies.

Financial Obligations and Financial Commitments

There have been no material changes to our financial obligations and financial commitments as described on page 3629 in our Form 10-K for the fiscal year ended December ~~31, 2016.~~

~~Off Balance Sheet Arrangements~~

~~There have been no changes in our off balance sheet arrangements as described on page 37 in our Form 10-K for the fiscal year ended December 31, 2016.~~

25, 2021.

Critical Accounting Policies

There ~~have been~~were no changes in our critical accounting policies as described on pages ~~38-42~~34-37 in our Form 10-K for the fiscal year ended December ~~31, 2016~~25, 2021 during the ~~quarter~~nine months ended September ~~30, 2017.~~

24, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the ~~company's~~Company’s market risk during the quarter ended September ~~30, 2017~~.24, 2022. For additional information, refer to the section "Risk Management" in our Form 10-K for the fiscal year ended December ~~31, 2016~~.

25, 2021.

Item 4. Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is (1) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

No changes in the ~~Company's~~Company’s internal control over financial reporting occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the ~~Company's~~Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes from risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K. See the discussion of the Company’s risk factors under Part I, Item 1A in each of the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021.

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

Issuer Purchases of Equity Securities


				Total Number of
				Shares Purchased	Approximate Dollar
				as Part of	Value of Maximum
	Total Number			Publicly	Number of
	of			Announced Plans	Shares that may yet
	Shares	Average Price		or	be Purchased under the
Period	Purchased	paid per share		Programs	Program ⁽¹⁾
June 26, 2022 to July 23, 2022	—	$	—	—	$	112,086,000
July 24, 2022 to August 27, 2022	38,606		277.54	38,606		101,371,000
August 28, 2022 to September 24, 2022	—		—	—		101,371,000
Total	38,606	$	277.54	38,606	$	101,371,000

Period Total Number of
Shares Purchased Average Price
paid per share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program (1)
July 2, 2017 to July 29, 2017 —
$ —
—
$ 132,172,000
July 30, 2017 to September 2, 2017 —
—
—
132,172,000
September 3, 2017 to September 30, 2017 —
—
—
132,172,000
Total —
$ —
—
$ 132,172,000

(1)

On May 13, 2014, we announced a new capital allocation philosophy which included a share repurchase program. Specifically, the Board of Directors authorized the purchase of up to $500 million of the Company’s outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately-negotiated transactions. On February 24, 2015 and again on October 31, 2018, the Board of Directors authorized an additional purchase of up to $250 million of the Company’s outstanding common stock with no stated expiration date bringing total authorization to $1.0 billion. As of September 24, 2022, we have acquired 6,552,816 shares for approximately $898.6 million under this share repurchase program.

~~(1) On May 13, 2014, we announced a new capital allocation philosophy which included a share repurchase program. Specifically~~, ~~the Board~~

Table of Directors authorized the purchase of up to $500 million of the Company's outstanding common stock from time to time over twelve months at prevailing market prices, through open market or privately-negotiated transactions. On February 24, 2015, the Board of Directors authorized an additional purchase of up to $250 million of the Company's outstanding common stock with no stated expiration date. As of September 30, 2017, we have acquired 4,588,131 shares for approximately $617.8 million under this share repurchase program.

Contents

Item 6. Exhibits


(a)	Exhibits

Exhibit No.		Description
22.1		List of Issuer and Guarantor Subsidiaries. This document was filed as Exhibit 22.1 to the Company’s Quarterly Report on Form 10-Q (Commission file number 001-31429) for the quarter ended September 25, 2021 and is incorporated herein by reference.
~~Exhibit No.~~ 31.1*		~~Description~~
~~31.1~~		Section 302 Certificate of Chief Executive Officer
~~31.2~~ 31.2*		Section 302 Certificate of Chief Financial Officer
~~32.1~~ 32.1*		Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
101		The following financial information from ~~Valmont's~~Valmont’s Quarterly Report on Form 10-Q for the quarter ended September ~~30, 2017,~~24, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information.
104		Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith

Table of Contents

SIGNATURES

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



	VALMONT INDUSTRIES, INC. ~~(Registrant)~~
	~~/s/ MARK C. JAKSICH~~ (Registrant)
	~~Mark C. Jaksich~~
	/s/ AVNER M. APPLBAUM
	Avner M. Applbaum
	Executive Vice President and Chief Financial Officer

Dated ~~this~~ ~~1st~~the 2nd day of November, ~~2017~~.

~~Index of Exhibits~~2022



~~Exhibit No.~~		~~Description~~
~~31.1~~		~~Section 302 Certificate of Chief Executive Officer~~
~~31.2~~		~~Section 302 Certificate of Chief Financial Officer~~
~~32.1~~		~~Section 906 Certifications of Chief Executive Officer and Chief Financial Officer~~
~~101~~		The following financial information from Valmont's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information.



		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine weeks
	ended September 30, 2017 and September 24, 2016	3
	Condensed Consolidated Statements of Comprehensive Income for the thirteen
	and thirty-nine weeks ended September 30, 2017 and September 24, 2016	4
	Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31,
	2016	5
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended
	September 30, 2017 and September 24, 2016	6
	Condensed Consolidated Statements of Shareholders' Equity for the thirty-nine
	weeks ended September 30, 2017 and September 24, 2016	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

	PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	41
Signatures		42



	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	September 30, 2017			September 24, 2016			September 30, 2017			September 24, 2016
Product sales	$	602,080		$	544,828		$	1,807,539		$	1,648,530
Services sales	78,699			65,419			223,450			198,571
Net sales	680,779			610,247			2,030,989			1,847,101
Product cost of sales	462,854			409,003			1,366,875			1,220,567
Services cost of sales	54,331			46,221			152,635			135,425
Total cost of sales	517,185			455,224			1,519,510			1,355,992
Gross profit	163,594			155,023			511,479			491,109
Selling, general and administrative expenses	103,671			101,783			308,764			303,698
Operating income	59,923			53,240			202,715			187,411
Other income (expenses):
Interest expense	(11,190		)	(11,100		)	(33,312		)	(33,276		)
Interest income	1,311			771			3,205			2,289
Other	517			878			1,684			452
	(9,362		)	(9,451		)	(28,423		)	(30,535		)
Earnings before income taxes	50,561			43,789			174,292			156,876
Income tax expense:
Current	21,163			18,017			50,264			51,276
Deferred	(7,268		)	(3,749		)	79			(1,534		)
	13,895			14,268			50,343			49,742
Net earnings	36,666			29,521			123,949			107,134
Less: Earnings attributable to noncontrolling interests	(1,458		)	(1,348		)	(4,098		)	(3,966		)
Net earnings attributable to Valmont Industries, Inc.	$	35,208		$	28,173		119,851			103,168
Earnings per share:
Basic	$	1.56		$	1.25		$	5.33		$	4.56
Diluted	$	1.55		$	1.24		$	5.28		$	4.54
Cash dividends declared per share	$	0.375		$	0.375		$	1.125		$	1.125
Weighted average number of shares of common stock outstanding - Basic (000 omitted)	22,527			22,505			22,505			22,602
Weighted average number of shares of common stock outstanding - Diluted (000 omitted)	22,751			22,659			22,717			22,741



	September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	493,490		$	399,948
Receivables, net	492,842			439,342
Inventories	403,234			350,028
Prepaid expenses, restricted cash, and other assets	50,064			57,297
Refundable income taxes	8,493			6,601
Total current assets	1,448,123			1,253,216
Property, plant and equipment, at cost	1,169,854			1,105,736
Less accumulated depreciation and amortization	647,430			587,401
Net property, plant and equipment	522,424			518,335
Goodwill	336,754			321,110
Other intangible assets, net	142,090			144,378
Other assets	160,780			154,692
Total assets	$	2,610,171		$	2,391,731

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	949		$	851
Notes payable to banks	197			746
Accounts payable	216,104			177,488
Accrued employee compensation and benefits	81,494			72,404
Accrued expenses	106,238			89,914
Dividends payable	8,478			8,445
Total current liabilities	413,460			349,848
Deferred income taxes	28,183			35,803
Long-term debt, excluding current installments	754,202			754,795
Defined benefit pension liability	199,562			209,470
Deferred compensation	48,612			44,319
Other noncurrent liabilities	13,557			14,910
Shareholders’ equity:
Preferred stock of $1 par value -
Authorized 500,000 shares; none issued	—			—
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued	27,900			27,900
Retained earnings	1,974,601			1,874,722
Accumulated other comprehensive loss	(288,102		)	(346,359		)
Treasury stock	(601,565		)	(612,781		)
Total Valmont Industries, Inc. shareholders’ equity	1,112,834			943,482
Noncontrolling interest in consolidated subsidiaries	39,761			39,104
Total shareholders’ equity	1,152,595			982,586
Total liabilities and shareholders’ equity	$	2,610,171		$	2,391,731



	Common stock		Additional paid-in capital				Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Noncontrolling interest in consolidated subsidiaries			Total shareholders’ equity
Balance at December 26, 2015	$	27,900	$	—			$	1,729,679		$	(267,218	)	$	(571,920	)	$	46,770		$	965,211
Net earnings	—		—				103,168			—			—			3,966			107,134
Other comprehensive income (loss)	—		—				—			1,249			—			1,766			3,015
Cash dividends declared	—		—			��	(25,482		)	—			—			—			(25,482		)
Dividends to noncontrolling interests	—		—				—			—			—			(2,527		)	(2,527		)
Purchase of noncontrolling interests	—		(137		)		—			—			—			(10,872		)	(11,009		)
Purchase of treasury shares; 384,622 shares acquired	—		—				—			—			(46,581		)	—			(46,581		)
Stock plan exercises; 10,747 shares acquired	—		—				—			—			(1,453		)	—			(1,453		)
Stock options exercised; 68,631 shares issued	—		(6,435		)		4,582			—			8,362			—			6,509
Stock option expense	—		4,358				—			—			—			—			4,358
Stock awards; 6,725 shares issued	—		2,214				—			—			912			—			3,126
Balance at September 24, 2016	$	27,900	$	—			$	1,811,947		$	(265,969	)	$	(610,680	)	$	39,103		$	1,002,301
Balance at December 31, 2016	$	27,900	$	—			$	1,874,722		$	(346,359	)	$	(612,781	)	$	39,104		$	982,586
Net earnings	—		—				119,851			—			—			4,098			123,949
Other comprehensive income (loss)	—		—				—			58,257			—			454			58,711
Cash dividends declared	—		—				(25,417		)	—			—			—			(25,417		)
Dividends to noncontrolling interests	—		—				—			—			—			(3,895		)	(3,895		)
Stock plan exercises; 24,672 shares acquired	—		—				—			—			(3,929		)	—			(3,929		)
Stock options exercised; 106,351 shares issued	—		(7,300		)		5,445			—			14,301			—			12,446
Stock option expense	—		3,868				—			—			—			—			3,868
Stock awards; 6,034 shares issued	—		3,432				—			—			844			—			4,276
Balance at September 30, 2017	$	27,900	$	—			$	1,974,601		$	(288,102	)	$	(601,565	)	$	39,761		$	1,152,595



	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	2017		2016		2017		2016
United States	$	28,886	$	21,550	$	115,082	$	105,390
Foreign	21,675		22,239		59,210		51,486
	$	50,561	$	43,789	$	174,292	$	156,876



			Fair Value Measurement Using:
	Carrying Value September 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Trading Securities	$	41,062	$	41,062	$	—	$	—



			Fair Value Measurement Using:
	Carrying Value December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Trading Securities	$	37,800	$	37,800	$	—	$	—



	Foreign Currency Translation Adjustments			Gain/(Loss) on Hedging Activities			Defined Benefit Pension Plan			Accumulated Other Comprehensive Loss
Balance at December 31, 2016	$	(251,228	)	$	7,978		$	(103,109	)	$	(346,359	)
Current-period comprehensive income (loss)	60,017			(1,760		)	—			58,257
Balance at September 30, 2017	$	(191,211	)	$	6,218		$	(103,109	)	$	(288,102	)



	Balance at December 31, 2016		Recognized Restructuring Expense		Costs Paid or Otherwise Settled			Balance at September 30, 2017
Severance	$	1,597	$	—	$	(1,597	)	$	—
Other cash restructuring expenses	4,581		—		(3,377		)	1,204
Total	$	6,178	$	—	$	(4,974	)	$	1,204



	September 30, 2017
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	200,269	$	126,845	13 years
Proprietary Software & Database	3,687		3,111		8 years
Patents & Proprietary Technology	6,633		3,859		11 years
Other	4,807		4,032		3 years
	$	215,396	$	137,847



	December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	191,316	$	111,342	13 years
Proprietary Software & Database	3,616		3,056		8 years
Patents & Proprietary Technology	6,434		3,420		11 years
Other	3,713		3,668		3 years
	$	205,079	$	121,486



	Estimated Amortization Expense
2017	$	15,823
2018	14,492
2019	13,718
2020	12,608
2021	10,474



	September 30, 2017		December 31, 2016		Year Acquired
Webforge	$	9,362	$	8,624	2010
Valmont SM	9,839		8,765		2014
Newmark	11,111		11,111		2004
Ingal EPS/Ingal Civil Products	7,633		7,032		2010
Donhad	5,758		5,305		2010
Shakespeare	4,000		4,000		2014
Industrial Galvanizers	2,390		2,201		2010
Other	14,448		13,747
	$	64,541	$	60,785



	Engineered Support Structures Segment		Energy & Mining Segment		Utility Support Structures Segment		Coatings Segment		Irrigation Segment		Total
Balance at December 31, 2016	$	94,314	$	72,212	$	75,404	$	59,569	$	19,611	$	321,110
Foreign currency translation	4,568		6,704		—		951		94		12,317
Acquisitions	3,327		—		—		—		—		3,327
Balance at September 30, 2017	$	102,209	$	78,916	$	75,404	$	60,520	$	19,705	$	336,754



	Basic EPS		Dilutive Effect of Stock Options			Diluted EPS
Thirteen weeks ended September 30, 2017:
Net earnings attributable to Valmont Industries, Inc.	$	35,208	$	—		$	35,208
Shares outstanding (000 omitted)	22,527		224			22,751
Per share amount	$	1.56	$	(0.01	)	$	1.55
Thirteen weeks ended September 24, 2016:
Net earnings attributable to Valmont Industries, Inc.	$	28,173	$	—		$	28,173
Shares outstanding (000 omitted)	22,505		154			22,659
Per share amount	$	1.25	$	(0.01	)	$	1.24
Thirty-nine weeks ended September 30, 2017:
Net earnings attributable to Valmont Industries, Inc.	$	119,851	$	—		$	119,851
Shares outstanding (000 omitted)	22,505		212			22,717
Per share amount	$	5.33	$	(0.05	)	$	5.28
Thirty-nine weeks ended September 24, 2016:
Net earnings attributable to Valmont Industries, Inc.	$	103,168	$	—		$	103,168
Shares outstanding (000 omitted)	22,602		139			22,741
Per share amount	$	4.56	$	(0.02	)	$	4.54



	Parent			Guarantors			Non- Guarantors			Eliminations			Total
Net sales	$	284,538		$	113,243		$	343,818		$	(60,820	)	$	680,779
Cost of sales	216,039			88,757			272,959			(60,570		)	517,185
Gross profit	68,499			24,486			70,859			(250		)	163,594
Selling, general and administrative expenses	46,451			12,046			45,174			—			103,671
Operating income	22,048			12,440			25,685			(250		)	59,923
Other income (expense):
Interest expense	(10,884		)	(3,989		)	(306		)	3,989			(11,190		)
Interest income	268			9			5,023			(3,989		)	1,311
Other	1,379			11			(873		)	—			517
	(9,237		)	(3,969		)	3,844			—			(9,362		)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries	12,811			8,471			29,529			(250		)	50,561
Income tax expense (benefit):
Current	9,030			3,082			9,059			(8		)	21,163
Deferred	(3,474		)	—			(3,794		)	—			(7,268		)
	5,556			3,082			5,265			(8		)	13,895
Earnings before equity in earnings of nonconsolidated subsidiaries	7,255			5,389			24,264			(242		)	36,666
Equity in earnings of nonconsolidated subsidiaries	27,953			9,965			—			(37,918		)	—
Net earnings	35,208			15,354			24,264			(38,160		)	36,666
Less: Earnings attributable to noncontrolling interests	—			—			(1,458		)	—			(1,458		)
Net earnings attributable to Valmont Industries, Inc	$	35,208		$	15,354		$	22,806		$	(38,160	)	$	35,208



	Third quarter
	Total		ESS			E&M			Utility		Coatings		Irrigation
Sales - 2016	$	610.2	$	193.1		$	81.2		$	150.4	$	60.0	$	125.5
Volume	29.7		15.9			(6.9		)	1.6		1.5		17.6
Pricing/mix	31.7		(3.5		)	2.0			26.5		5.6		1.1
Acquisitions	1.6		1.6			—			—		—		—
Currency translation	7.6		2.7			3.4			—		0.6		0.9
Sales - 2017	$	680.8	$	209.8		$	79.7		$	178.5	$	67.7	$	145.1



Interest-bearing debt	$	755,348
Adjusted EBITDA-last four quarters	345,590
Leverage ratio	2.19

Adjusted EBITDA-last four quarters	$	345,590
Interest expense-last four quarters	44,445
Interest earned ratio	7.78



Net cash flows from operations	$	226,318
Interest expense	44,445
Income tax expense	42,666
Impairment of property, plant and equipment	(481		)
Loss on investment	(8		)
Change in fair value of contingent consideration	(285		)
Deferred income tax benefit	22,072
Noncontrolling interest	(5,292		)
Stock-based compensation	(10,659		)
Increase in restricted cash - pension plan trust	(12,568		)
Pension plan expense	(865		)
Contribution to pension plan	26,840
Changes in assets and liabilities	29,167
Other	350
EBITDA	361,700
Reversal of contingent liability	(16,591		)
Impairment of property, plant and equipment	481
Adjusted EBITDA	$	345,590



Net earnings attributable to Valmont Industries, Inc.	$	189,915
Interest expense	44,445
Income tax expense	42,666
Depreciation and amortization expense	84,674
EBITDA	361,700
Reversal of contingent liability	(16,591		)
Impairment of property, plant, and equipment	481
Adjusted EBITDA	$	345,590



Period	Total Number of Shares Purchased	Average Price paid per share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program (1)
July 2, 2017 to July 29, 2017	—	$	—	—	$	132,172,000
July 30, 2017 to September 2, 2017	—	—		—	132,172,000
September 3, 2017 to September 30, 2017	—	—		—	132,172,000
Total	—	$	—	—	$	132,172,000