VALMONT INDUSTRIES INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The following consolidated financial statements of the Company and its subsidiaries are included herein as listed below: ​ ​ ​ Page Consolidated Financial Statements ​ Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 44 Consolidated Statements of Earnings—Three-Year Period Ended December 31, 2022 46 Consolidated Statements of Comprehensive Income—Three-Year Period Ended December 31, 2022 47 Consolidated Balance Sheets—December 31, 2022 and December 25, 2021 48 Consolidated Statements of Cash Flows—Three-Year Period Ended December 31, 2022 49 Consolidated Statements of Shareholders’ Equity—Three-Year Period Ended December 31, 2022 50 Notes to Consolidated Financial Statements—Three-Year Period Ended December 31, 2022 51 ​ ​ ​ 43 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Valmont Industries, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Valmont Industries, Inc. and subsidiaries (the “Company”) as of December 31, 2022 and December 25, 2021, the related consolidated statements of earnings, comprehensive income, cash flows, and shareholders’ equity, for each of the fiscal years in the three-year period ended December 31, 2022, and the related notes listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and December 25, 2021, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill — Refer to Notes 1 and 8 to the consolidated financial statements Critical Audit Matter Description The Company has goodwill, which is allocated among thirteen reporting units. The Company evaluates its thirteen reporting units for goodwill impairment during the third fiscal quarter of each year, or when events or changes in circumstances indicate the carrying value may not be recoverable. Twelve reporting units are evaluated using after-tax cash flows from operations (less capital expenses) discounted to present value (“discounted cash flows”). The solar tracking structure reporting unit was valued using a blend of both the discounted cash flows and a market approach. The market valuation 44 Table of Contents approach estimates the value for this reporting unit using a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA). The EBITDA multiples are analyzed against other industrial companies with similar product lines. These valuation methods require management to make significant estimates and assumptions related to projected cash flows, selection of industrial companies with similar product lines and forecasted EBITDA, and discount rates. We identified goodwill for certain reporting units as a critical audit matter because of the significant estimates and assumptions made by management to estimate fair value and the difference between the fair values and the carrying values of certain reporting units as of August 27, 2022. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to certain assumptions within the projected cash flows, selection of industrial companies with similar product lines and forecasted EBITDA, and discount rates. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the goodwill impairment assessment for certain reporting units included the following, among others: 1. We tested the effectiveness of internal controls over management’s goodwill impairment evaluation, including those over the projected cash flows, selection of industrial companies with similar product lines and forecasted EBITDA, and discount rates. 2. We evaluated management’s ability to accurately forecast cash flows by comparing actual results to management’s historical forecasts. 3. We evaluated the reasonableness of management’s projected cash flows by comparing to (1) historical results, (2) internal communications to management and the Board of Directors, (3) industry reports and (4) information included in Company press releases to analysts and investors. 4. With the assistance of our fair value specialists, we evaluated the discount rates, by testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management . 5. With the assistance of our fair value specialists, we evaluated the selection of industrial companies with similar product lines and forecasted EBITDA and tested the underlying source information and mathematical accuracy of the calculations . /s/ DELOITTE & TOUCHE LLP Omaha, Nebraska March 1, 2023 ​ We have served as the Company’s auditor since 1996. ​ 45 Table of Contents Valmont Industries, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Product sales ​ $ 3,955,320 ​ $ 3,159,605 ​ $ 2,594,855 Services sales ​ 389,930 ​ 341,970 ​ 300,500 Net sales ​ 4,345,250 ​ 3,501,575 ​ 2,895,355 Product cost of sales ​ 2,958,208 ​ 2,395,630 ​ 1,936,024 Services cost of sales ​ 260,818 ​ 222,056 ​ 193,817 Total cost of sales ​ 3,219,026 ​ 2,617,686 ​ 2,129,841 Gross profit ​ 1,126,224 ​ 883,889 ​ 765,514 Selling, general, and administrative expenses ​ 692,975 ​ 590,608 ​ 522,923 Impairment of goodwill and intangible assets ​ — ​ 6,496 ​ 16,638 Operating income ​ 433,249 ​ 286,785 ​ 225,953 Other income (expenses): ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ( 47,534 ) ​ ( 42,612 ) ​ ( 41,075 ) Interest income ​ 2,015 ​ 1,192 ​ 2,374 Gain (loss) on investments - unrealized ​ ( 3,374 ) ​ 1,920 ​ 2,443 Loss from divestiture of offshore wind energy structures business ​ ​ ( 33,273 ) ​ ​ — ​ ​ — Other ​ 12,805 ​ 12,798 ​ 3,073 ​ ​ ( 69,361 ) ​ ( 26,702 ) ​ ( 33,185 ) Earnings before income taxes ​ 363,888 ​ 260,083 ​ 192,768 Income tax expense: ​ ​ ​ Current ​ 109,912 ​ 61,343 ​ 51,012 Deferred ​ ( 1,225 ) ​ 71 ​ ( 1,397 ) ​ ​ 108,687 ​ 61,414 ​ 49,615 Earnings before equity in earnings of nonconsolidated subsidiaries ​ 255,201 ​ 198,669 ​ 143,153 Equity in loss of nonconsolidated subsidiaries ​ ​ ( 950 ) ​ ​ ( 944 ) ​ ​ ( 1,004 ) Net earnings ​ 254,251 ​ 197,725 ​ 142,149 Less: Earnings attributable to noncontrolling interests ​ ( 3,388 ) ​ ( 2,095 ) ​ ( 1,456 ) Net earnings attributable to Valmont Industries, Inc. ​ $ 250,863 ​ $ 195,630 ​ $ 140,693 Earnings per share: ​ ​ ​ Basic ​ $ 11.77 ​ $ 9.23 ​ $ 6.60 Diluted ​ $ 11.62 ​ $ 9.10 ​ $ 6.57 ​ See accompanying notes to consolidated financial statements. ​ 46 Table of Contents Valmont Industries, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three-year period ended December 31, 2022 (Dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Net earnings ​ $ 254,251 ​ $ 197,725 ​ $ 142,149 Other comprehensive income (loss), net of tax: ​ ​ ​ Foreign currency translation adjustments: ​ ​ ​ Unrealized translation gains (losses) ​ ​ ( 44,741 ) ​ ​ ( 31,405 ) ​ ​ 21,483 Realized loss on offshore wind energy structures business recorded in other expense ​ ​ 25,977 ​ ​ — ​ ​ — ​ ​ $ ( 18,764 ) ​ $ ( 31,405 ) ​ $ 21,483 Gain (loss) on hedging activities: ​ ​ ​ ​ ​ ​ ​ ​ Commodity hedges ​ ( 2,352 ) ​ 20,019 ​ — Realized (gain) loss on commodity hedges recorded in earnings ​ 5,212 ​ ( 25,821 ) ​ — Unrealized gain (loss) on cross currency swaps ​ ​ 5,146 ​ ​ 6,093 ​ ​ ( 5,751 ) Unrealized gain on net investment hedges, net of tax expense of $ 2,428 in 2020 ​ ​ — ​ ​ — ​ ​ 7,289 Realized (gain) on offshore wind energy structures business cross currency swap, net of tax expense of $ 1,207 in 2022 ​ ​ ( 3,620 ) ​ ​ — ​ ​ — Cash flow hedges ​ — ​ — ​ 1,598 Realized gain on cash flow hedges recorded in earnings ​ ​ — ​ ​ — ​ ​ ( 1,598 ) Amortization cost included in interest expense ​ ( 64 ) ​ ( 64 ) ​ ( 64 ) ​ ​ ​ 4,322 ​ ​ 227 ​ ​ 1,474 Net gain (loss) on defined benefit pension plan, net of tax expense (benefit) of $( 606 ) in 2022, $ 25,736 in 2021, $( 4,183 ) in 2020 ​ 1,345 ​ 76,718 ​ ( 17,349 ) Other comprehensive income (loss) ​ ( 13,097 ) ​ 45,540 ​ 5,608 Comprehensive income ​ 241,154 ​ 243,265 ​ 147,757 Comprehensive income attributable to noncontrolling interests ​ ( 2,073 ) ​ ( 976 ) ​ ( 3,428 ) Comprehensive income attributable to Valmont Industries, Inc. ​ $ 239,081 ​ $ 242,289 ​ $ 144,329 ​ See accompanying notes to consolidated financial statements. ​ 47 Table of Contents Valmont Industries, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2022 and December 25, 2021 (Dollars in thousands, except shares and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 185,406 ​ $ 177,232 Receivables, less allowance of $ 20,890 in 2022 and $ 18,050 in 2021 ​ 604,181 ​ 571,593 Inventories ​ 728,762 ​ 728,834 Contract assets ​ 174,539 ​ 142,643 Prepaid expenses and other assets ​ 87,697 ​ 83,646 Refundable income taxes ​ — ​ 8,815 Total current assets ​ 1,780,585 ​ 1,712,763 Property, plant, and equipment, at cost ​ 1,433,151 ​ 1,422,101 Less accumulated depreciation and amortization ​ 837,573 ​ 823,496 Net property, plant and equipment ​ 595,578 ​ 598,605 Goodwill ​ 739,861 ​ 708,566 Other intangible assets, net ​ 176,615 ​ 175,364 Defined pension benefit asset ​ ​ 24,216 ​ — Other assets ​ 240,141 ​ 251,951 Total assets ​ $ 3,556,996 ​ $ 3,447,249 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ Current liabilities: ​ ​ Current installments of long-term debt ​ $ 1,194 ​ $ 4,884 Notes payable to banks ​ 5,846 ​ 13,439 Accounts payable ​ 360,312 ​ 347,841 Accrued employee compensation and benefits ​ 124,355 ​ 144,559 Contract liabilities ​ 172,915 ​ 135,746 Other accrued expenses ​ 123,965 ​ 108,771 Income taxes payable ​ ​ 3,664 ​ ​ — Dividends payable ​ 11,742 ​ 10,616 Total current liabilities ​ 803,993 ​ 765,856 Deferred income taxes ​ 41,091 ​ 47,849 Long-term debt, excluding current installments ​ 870,935 ​ 947,072 Operating lease liabilities ​ 155,469 ​ 147,759 Deferred compensation ​ 30,316 ​ 35,373 Other noncurrent liabilities ​ 13,480 ​ 89,743 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 ​ — ​ 1,479 Retained earnings ​ 2,593,039 ​ 2,394,307 Accumulated other comprehensive loss ​ ( 274,909 ) ​ ( 263,127 ) Cost of treasury stock, common shares of 6,549,833 in 2022 and 6,619,860 in 2021 ​ ( 765,183 ) ​ ( 773,712 ) Total Valmont Industries, Inc. shareholders’ equity ​ 1,580,847 ​ 1,386,847 Noncontrolling interest in consolidated subsidiaries ​ 60,865 ​ 26,750 Total shareholders’ equity ​ ​ 1,641,712 ​ ​ 1,413,597 Total liabilities and shareholders’ equity ​ $ 3,556,996 ​ $ 3,447,249 See accompanying notes to consolidated financial statements. 48 Table of Contents Valmont Industries, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Three-year period ended December 31, 2022 (Dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Cash flows from operating activities: ​ ​ ​ ​ Net earnings ​ $ 254,251 ​ $ 197,725 ​ $ 142,149 Adjustments to reconcile net earnings to net cash flows from operations: ​ ​ ​ Depreciation and amortization ​ 97,167 ​ 92,577 ​ 82,892 Noncash loss on trading securities ​ — ​ — ​ 39 Contribution to defined benefit pension plan ​ ( 17,155 ) ​ ( 1,924 ) ​ ( 35,399 ) Impairment of long-lived assets ​ — ​ 27,911 ​ 20,389 Loss on sale of offshore wind energy structures business ​ ​ 33,273 ​ — ​ — Stock-based compensation ​ 41,850 ​ 28,720 ​ 14,874 Defined benefit pension plan benefit ​ ( 10,087 ) ​ ( 14,567 ) ​ ( 7,311 ) Loss (gain) on sale of property, plant and equipment ​ 237 ​ ( 961 ) ​ 60 Equity in loss in nonconsolidated subsidiaries ​ 950 ​ 944 ​ 1,004 Deferred income taxes ​ ( 1,225 ) ​ 71 ​ ( 1,397 ) Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Receivables ​ ( 74,163 ) ​ ( 69,275 ) ​ ( 24,403 ) Inventories ​ ( 3,429 ) ​ ( 289,942 ) ​ ( 21,888 ) Prepaid expenses and other assets (current and non-current) ​ 26,625 ​ ( 36,066 ) ​ ( 10,633 ) Contract assets ​ ( 53,008 ) ​ ( 21,579 ) ​ 19,835 Accounts payable ​ 36,990 ​ 89,418 ​ 33,044 Accrued expenses ​ 624 ​ 30,556 ​ 52,548 Contract liabilities ​ ( 567 ) ​ 6,589 ​ 12,072 Other noncurrent liabilities ​ ( 16,904 ) ​ 20,181 ​ 46,712 Income taxes payable / refundable ​ 10,836 ​ 5,560 ​ ( 8,293 ) Net cash flows from operating activities ​ 326,265 ​ 65,938 ​ 316,294 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase of property, plant, and equipment ​ ( 93,288 ) ​ ( 107,790 ) ​ ( 106,700 ) Proceeds from sale of assets ​ 1,582 ​ 1,745 ​ 10,860 Acquisitions, net of cash acquired ​ ( 39,287 ) ​ ( 312,500 ) ​ ( 15,862 ) Proceeds from settlement of net investment hedge ​ — ​ — ​ 11,983 Investments in nonconsolidated subsidiaries ​ — ​ — ​ ( 1,283 ) Other, net ​ ​ ( 1,087 ) ​ 1,237 ​ ( 3,027 ) Net cash flows from investing activities ​ ( 132,080 ) ​ ( 417,308 ) ​ ( 104,029 ) Cash flows from financing activities: ​ ​ ​ Proceeds from short-term borrowings ​ 9,665 ​ 5,821 ​ 20,990 Payments on short-term borrowings ​ ( 17,242 ) ​ ( 26,062 ) ​ ( 7,946 ) Proceeds from long-term borrowings ​ 253,999 ​ 312,485 ​ 88,872 Principal payments on long-term borrowings ​ ( 336,403 ) ​ ( 91,313 ) ​ ( 121,665 ) Proceeds from settlement of financial derivatives ​ 3,532 ​ — ​ — Debt issuance costs ​ — ​ ( 2,267 ) ​ — Dividends paid ​ ( 45,813 ) ​ ( 41,412 ) ​ ( 36,930 ) Dividends to noncontrolling interest ​ ( 714 ) ​ — ​ ( 5,642 ) Purchase of noncontrolling interests ​ ( 7,338 ) ​ — ​ ( 59,416 ) Purchase of treasury shares ​ ( 40,474 ) ​ ( 26,100 ) ​ ( 56,491 ) Proceeds from exercises under stock plans ​ 16,849 ​ 23,895 ​ 18,961 Purchase of common treasury shares—stock plan exercises ​ ( 17,966 ) ​ ( 21,547 ) ​ ( 14,489 ) Net cash flows from financing activities ​ ( 181,905 ) ​ 133,500 ​ ( 173,756 ) Effect of exchange rate changes on cash and cash equivalents ​ ( 4,106 ) ​ ( 5,624 ) ​ 8,675 Net change in cash and cash equivalents ​ 8,174 ​ ( 223,494 ) ​ 47,184 Cash and cash equivalents—beginning of year ​ 177,232 ​ 400,726 ​ 353,542 Cash and cash equivalents—end of period ​ $ 185,406 ​ $ 177,232 ​ $ 400,726 See accompanying notes to consolidated financial statements. ​ ​ 49 Table of Contents Valmont Industries, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Three-year period ended December 31, 2022 (Dollars in thousands, except shares and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ Noncontrolling ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ ​ ​ ​ interest in ​ Total ​ ​ Common ​ paid-in ​ Retained ​ comprehensive ​ Treasury ​ consolidated ​ shareholders’ ​ ​ stock ​ capital ​ earnings ​ income (loss) ​ stock ​ subsidiaries ​ equity Balance at December 28, 2019 ​ $ 27,900 ​ $ — ​ $ 2,173,802 ​ $ ( 313,422 ) ​ $ ( 743,942 ) ​ $ 45,407 ​ $ 1,189,745 Net earnings ​ — ​ — ​ 140,693 ​ — ​ — ​ 1,456 ​ 142,149 Other comprehensive income (loss) ​ — ​ — ​ — ​ 3,636 ​ — ​ 1,972 ​ 5,608 Cash dividends declared ($ 1.80 per share) ​ — ​ — ​ ( 38,393 ) ​ — ​ — ​ — ​ ( 38,393 ) Dividends to noncontrolling interests ​ — ​ — ​ — ​ — ​ — ​ ( 5,642 ) ​ ( 5,642 ) Purchase of noncontrolling interest ​ — ​ — ​ ( 31,067 ) ​ — ​ — ​ ( 22,544 ) ​ ( 53,611 ) Addition of noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,125 ​ ​ 5,125 Purchase of treasury shares; 441,119 shares acquired ​ — ​ — ​ — ​ — ​ ( 56,491 ) ​ — ​ ( 56,491 ) Stock plan exercises, 88,411 shares acquired ​ — ​ — ​ — ​ — ​ ( 14,489 ) ​ — ​ ( 14,489 ) Stock options exercised; 147,014 shares issued ​ — ​ ( 6,335 ) ​ — ​ — ​ 25,296 ​ — ​ 18,961 Stock option expense ​ — ​ 2,628 ​ — ​ — ​ — ​ — ​ 2,628 Stock awards; 65,248 shares issued ​ — ​ 4,042 ​ — ​ — ​ 8,204 ​ — ​ 12,246 Balance at December 26, 2020 ​ 27,900 ​ 335 ​ 2,245,035 ​ ( 309,786 ) ​ ( 781,422 ) ​ 25,774 ​ 1,207,836 Net earnings ​ — ​ — ​ 195,630 ​ — ​ — ​ 2,095 ​ 197,725 Other comprehensive income (loss) ​ — ​ — ​ — ​ 46,659 ​ — ​ ( 1,119 ) ​ 45,540 Cash dividends declared ($ 2.00 per share) ​ — ​ — ​ ( 42,472 ) ​ — ​ — ​ — ​ ( 42,472 ) Purchase of treasury shares; 111,833 shares acquired ​ — ​ — ​ — ​ — ​ ( 26,100 ) ​ — ​ ( 26,100 ) Stock plan exercises; 90,292 shares acquired ​ — ​ — ​ — ​ — ​ ( 21,547 ) ​ — ​ ( 21,547 ) Stock options exercised; 169,908 shares issued ​ — ​ ( 15,357 ) ​ ( 3,886 ) ​ — ​ 43,138 ​ — ​ 23,895 Stock option expense ​ — ​ 2,538 ​ — ​ — ​ — ​ — ​ 2,538 Stock awards; 88,395 shares issued ​ — ​ 13,963 ​ — ​ — ​ 12,219 ​ — ​ 26,182 Balance at December 25, 2021 ​ 27,900 ​ 1,479 ​ 2,394,307 ​ ( 263,127 ) ​ ( 773,712 ) ​ 26,750 ​ 1,413,597 Net earnings ​ — ​ — ​ 250,863 ​ — ​ — ​ 3,388 ​ 254,251 Other comprehensive loss ​ — ​ — ​ — ​ ( 11,782 ) ​ — ​ ( 1,315 ) ​ ( 13,097 ) Cash dividends declared ($ 2.20 per share) ​ — ​ — ​ ( 46,939 ) ​ — ​ — ​ — ​ ( 46,939 ) Dividends to noncontrolling interests ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 714 ) ​ ​ ( 714 ) Addition of noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 41,693 ​ ​ 41,693 Reduction of noncontrolling interest ​ ​ — ​ ​ 1,599 ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,937 ) ​ ​ ( 7,338 ) Purchase of treasury shares; 137,612 shares acquired ​ — ​ — ​ — ​ — ​ ( 40,474 ) ​ — ​ ( 40,474 ) Stock plan exercises; 60,599 shares acquired ​ — ​ — ​ — ​ — ​ ( 17,966 ) ​ — ​ ( 17,966 ) Stock options exercised; 121,163 shares issued ​ — ​ ( 17,754 ) ​ ( 5,192 ) ​ — ​ 39,795 ​ — ​ 16,849 Stock option expense ​ — ​ 3,120 ​ — ​ — ​ — ​ — ​ 3,120 Stock awards; 147,075 shares issued ​ — ​ 11,556 ​ — ​ — ​ 27,174 ​ — ​ 38,730 Balance at December 31, 2022 ​ $ 27,900 ​ $ — ​ $ 2,593,039 ​ $ ( 274,909 ) ​ $ ( 765,183 ) ​ $ 60,865 ​ $ 1,641,712 ​ See accompanying notes to consolidated financial statements. ​ ​ 50 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Valmont Industries, Inc. and its wholly and majority‑owned subsidiaries (the “Company”). Investments in 20 % to 50 % owned affiliates and joint ventures are accounted for by the equity method. Investments in less than 20 % owned affiliates are accounted for by the cost method. All intercompany items have been eliminated. Cash Overdrafts Cash book overdrafts totaling $ 25,075 and $ 19,670 were classified as accounts payable at December 31, 2022 and December 25, 2021, respectively. The Company’s policy is to report the change in book overdrafts as an operating activity in the Consolidated Statements of Cash Flows. Change in Reportable Segments During the first quarter of 2022, the Company’s Chief Executive Officer, as the chief operating decision maker, made changes to the Company’s management structure and began to manage the business, allocate resources, and evaluate performance under the new structure. As a result, the Company has realigned its reportable segment structure. All prior period segment information has been recast to reflect this change in reportable segments. Refer to Note 21 for additional information. The Company has two reportable segments based on its management structure. Each segment is global in nature with a manager responsible for segment operational performance and allocation of capital within the segment. Reportable segments are as follows: 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 center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture. In addition to these two reportable segments, the Company had a business and related activities that was not more than 10% of consolidated sales, operating income, or assets. This includes the offshore wind energy structures business and is reported in the “Other” segment until its divestiture in 2022. Fiscal Year The Company operates on a 52 or 53 week fiscal year with each year ending on the last Saturday in December. Accordingly, the Company’s fiscal year ended December 31, 2022 consisted of 53 weeks and the Company’s fiscal years ended December 25, 2021 and December 26, 2020 consisted of 52 weeks. The estimated impact on the Company's results of operations due to the extra week in fiscal year 2022 was additional net sales of approximately $ 80,800 and additional net earnings of approximately $ 5,300 . Accounts Receivable Accounts receivable are reported on the balance sheet net of any allowance for doubtful accounts. Allowances are maintained in amounts considered to be appropriate in relation to the outstanding receivables based on age of the receivable, economic conditions and customer credit quality. As the Company’s international business has grown, the exposure to potential losses in international 51 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ markets has also increased. These exposures can be difficult to estimate, particularly in areas of political instability, with governments with which the Company has limited experience, or where there is a lack of transparency as to the current credit condition of governmental units. ​ 52 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED The following table details the balances of the allowance for doubtful receivables and changes therein: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at Charged to Currency Deductions Balance at ​ ​ Beginning of ​ Profit and ​ Translation ​ from ​ Close of For periods ended: ​ Period ​ Loss ​ Adjustment ​ Reserves ​ Period December 31, 2022 ​ $ 18,050 ​ $ 4,237 ​ $ ( 522 ) ​ $ ( 875 ) ​ $ 20,890 December 25, 2021 ​ 15,952 ​ 3,379 ​ ( 339 ) ​ ( 942 ) ​ 18,050 December 26, 2020 ​ 9,548 ​ 7,957 ​ 260 ​ ( 1,813 ) ​ 15,952 ​ The Company sells trade accounts receivable at a discount under uncommitted trade accounts receivable sale programs to third party financial institutions without recourse. As these accounts receivable are sold without recourse, the Company does not retain the associated risks following the transfer of such accounts receivable to the financial institutions. Transfers of accounts receivable are accounted for as sales and, accordingly, accounts receivables sold are excluded from “Receivables, less allowance” on the Consolidated Balance Sheets and cash proceeds are reflected in “Cash flows from operating activities” on the Consolidated Statements of Cash Flows. The difference between the carrying amount of the trade accounts receivables sold and the cash received, or discount, is recorded in “Other” expenses on the Consolidated Statements of Earnings. At December 31, 2022 and December 25, 2021, the Company sold trade accounts receivable of $ 100.0 million and $ 25.4 million, respectively. The fees associated with trade accounts receivables sold are immaterial. Inventories Inventory is valued at the lower of cost, determined on the first-in, first-out (“FIFO”) method, or 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. Long-Lived Assets Property, plant, and equipment are recorded at historical cost. The Company generally uses the straight-line method in computing depreciation and amortization for financial reporting purposes and accelerated methods for income tax purposes. The annual provisions for depreciation and amortization have been computed principally in accordance with the following ranges of asset lives: buildings and improvements 15 to 40 years , machinery and equipment 3 to 12 years , transportation equipment 3 to 24 years , office furniture and equipment 3 to 7 years , and intangible assets 5 to 20 years . Depreciation expense in fiscal 2022, 2021, and 2020 was $ 73,938 , $ 70,223 , and $ 63,890 , respectively. An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its estimated fair value. The Company recognized a pre-tax $ 27,900 impairment of long-lived assets (property, plant, and equipment, customer relationship intangible asset, and trade name) in 2021 when it determined that its offshore wind energy business reporting unit would not generate sufficient cash flows to recover the carrying values. An impairment test was required in November 2021 when the Company received clarifying information on the competitive environment of this reporting unit in Europe. Impairment losses were recorded in 2020 as facilities were closed and future plans for certain fixed assets changed in connection with the Company’s restructuring plans. 53 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ The Company evaluates its reporting units for impairment of goodwill during the third fiscal quarter of each year, or when events or changes in circumstances indicate the carrying value may not be recoverable. Reporting units are evaluated using after-tax operating cash flows (less capital expenditures) discounted to present value (“discounted cash flows”). For the solar tracking reporting unit, the Company valued this reporting unit using a blend of the discounted cash flows and multiple of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) approach. Indefinite‑lived intangible assets are assessed separately from goodwill as part of the annual impairment testing, using a relief-from-royalty method. If the underlying assumptions related to the valuation of a reporting unit’s goodwill or an indefinite‑lived intangible asset change materially before or after the annual impairment testing, the reporting unit or asset is evaluated for potential impairment. In these evaluations, management considers recent operating performance, expected future performance, industry conditions, and other indicators of potential impairment. See footnote 8 for details of impairments recognized during 2021. 54 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Leases The Company's operating leases are included in “Other assets” and “Operating lease liabilities” in the Consolidated Balance Sheets. Income Taxes The Company uses the asset and liability method to calculate deferred income taxes. Deferred tax assets and liabilities are recognized on temporary differences between financial statement and tax bases of assets and liabilities using enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date. Warranties The Company’s provision for product warranty reflects management’s best estimate of probable liability under its product warranties. Estimated future warranty costs are recorded at the time a sale is recognized. Future warranty liability is determined based on applying historical claim rate experience to units sold that are still within the warranty period. In addition, the Company records provisions for known warranty claims. Pension Benefits Certain expenses are incurred in connection with a defined benefit pension plan. 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. Stock Plans The Company maintains 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, restricted stock awards, restricted stock units, and bonuses of common stock. Fair Value The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurement (“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. Derivative Instruments The Company may enter into derivative financial instruments to manage risk associated with fluctuation in interest rates, foreign currency rates, or commodities. Where applicable, the Company may elect to account for such derivatives as either a cash flow, fair value, or net investment hedge. 55 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED 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. The components of accumulated other comprehensive income (loss) consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ Accumulated ​ ​ Currency ​ ​ ​ Defined ​ Other ​ ​ Translation ​ Hedging ​ Benefit ​ Comprehensive ​ ​ Adjustments ​ Activities ​ Pension Plan ​ Income (Loss) Balance at December 25, 2021 ​ $ ( 243,350 ) ​ $ 15,777 ​ $ ( 35,554 ) ​ $ ( 263,127 ) Current period comprehensive income (loss) ​ ( 43,426 ) ​ 7,942 ​ 1,345 ​ ( 34,139 ) Divestiture of offshore wind energy structures business ​ ​ 25,977 ​ ​ ( 3,620 ) ​ ​ — ​ ​ 22,357 Balance at December 31, 2022 ​ $ ( 260,799 ) ​ $ 20,099 ​ $ ( 34,209 ) ​ $ ( 274,909 ) ​ Revenue Recognition The Company determines the appropriate revenue recognition for 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 sales when the performance obligation is related to the manufacturing of goods. Contract revenues are classified as service sales 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 primarily in the design stage of products (on a limited basis, the Company may agree to other acceptance terms), 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 costs 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 line, 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 assets as of December 31, 2022 and December 25, 2021 totaled $ 174,539 and $ 142,643 , respectively. 56 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ 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. At December 31, 2022 and December 25, 2021, total contract liabilities were $ 178,531 and $ 213,203 , respectively. At December 31, 2022, $ 172,915 was recorded as contract liabilities and $ 5,616 was recorded as other noncurrent liabilities on the consolidated balance sheets. Additional details are as follows: ​ 57 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ● During the fiscal year ended December 31, 2022 and December 25, 2021, the Company recognized $ 96,373 and $ 105,406 of revenue that was included in the total contract liability as of December 25, 2021 and December 26, 2020, respectively. The revenue recognized was due to applying advance payments received for performance obligations completed during the period. ● At December 31, 2022, the Company had $ 11,080 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 TD&S product lines are engineered to customer specifications resulting in limited ability to sell the 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 rights to payment for 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 the TD&S and telecommunication structure product lines, the Company generally recognizes 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 order. The completion percentage is applied to the order’s total revenue and 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 product sold, revenue from renewable energy is recognized both upon shipment or delivery of goods to the customer depending on contract terms, or by using an inputs method, based on the ratio of costs incurred to-date to the total estimated costs at completion of the performance obligation. External sales agents are used in certain TD&S sales and the 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 goods to the customer which is 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 straight-line basis over the subsequent twelve months (contract terms). 58 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Disaggregation of revenue by product line is disclosed in the “Business Segments” footnote. A breakdown by segment of revenue recognized over time and revenue recognized at a point in time for the fiscal years ended December 31, 2022 and December 25, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2022 ​ Fiscal Year 2021 ​ Fiscal Year 2020 ​ ​ Point in ​ Over ​ Point in ​ Over ​ Point in ​ Over ​ Time Time Time Time Time Time Infrastructure ​ $ 1,687,458 ​ $ 1,222,288 ​ $ 1,388,297 ​ $ 973,227 ​ $ 1,296,497 ​ $ 838,703 Agriculture ​ 1,307,681 ​ 27,604 ​ 996,278 ​ 20,772 ​ 624,831 ​ 15,261 Other ​ ​ — ​ ​ 100,219 ​ ​ — ​ ​ 123,001 ​ ​ — ​ ​ 120,063 Total ​ $ 2,995,139 ​ $ 1,350,111 ​ $ 2,384,575 ​ $ 1,117,000 ​ $ 1,921,328 ​ $ 974,027 ​ Use of Estimates Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the reported amounts of revenue and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. Equity Method Investments The Company has equity method investments in non-consolidated subsidiaries which are recorded within “Other assets” on the Consolidated Balance Sheets. Treasury Stock Repurchased shares are recorded as “Cost of treasury stock” and result in a reduction of “Shareholders’ equity.” When treasury shares are reissued, the Company uses the last-in, first-out method, and the difference between the repurchase cost and re-issuance price is charged or credited to “Additional paid-in capital”. In May 2014, the Company announced a capital allocation philosophy which covered a share repurchase program. Specifically, the Board of Directors at that time authorized the purchase of up to $ 500,000 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. In February 2015 and again in October 2018, the Board of Directors authorized an additional purchase of up to $ 250,000 of the Company’s outstanding common stock with no stated expiration date. As of December 31, 2022, the Company has acquired 6,613,018 shares for approximately $ 918,600 under this share repurchase program. Subsequent to year end, on February 27, 2023, the Board of Directors increased the amount remaining under the program by an additional $ 400,000 , with no stated expiration date. Research and Development Research and development costs are charged to operations in the year incurred. These costs are a component of “Selling, general, and administrative expenses” on the Consolidated Statements of Earnings. Research and development expenses were approximately $ 46,000 in 2022, $ 37,000 in 2021, and $ 21,400 in 2020. 59 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Recently Adopted Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (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 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. This guidance was able to be adopted on a prospective basis no later than December 31, 2022, with early adoption permitted. In December 2022, the FASB issued ASU No 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (ASU 2022-06). ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. As the Company no longer has any LIBOR based contracts, ASU 2020-04 and ASU 2022-06 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures. ​ 60 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Recently Issued Accounting Pronouncements (Not Yet Adopted) In September 2022, the FASB issued Accounting Standards Update No. 2022-04 (ASU 2022-04), Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations , which 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 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 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 description of where these obligations are presented in the balance sheet, and a rollforward of the obligation during the annual period. The guidance is effective in the first quarter of 2023, except for the rollforward, which is effective in 2024. Early adoption is permitted. The new guidance will have no effect on the Company’s results of operations as the changes are primarily disclosure related. The Company intends to adopt the new standard in 2023 with enhanced disclosure where required. (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 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 Infrastructure segment. The acquisition was made to allow the Company to incorporate innovative 5G infrastructure and passive intermodulation mitigation solutions into the Company’s advanced infrastructure portfolio. Goodwill is not deductible for tax purposes. The amount allocated to goodwill was primarily attributable to anticipated synergies and 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. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed of ConcealFab as of the date of acquisition: ​ 61 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ 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 Technologies, Ltd. ("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 no t deductible for tax purposes, the trade name will be amortized over seven years , and the developed technology asset will be amortized over five years . The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do no t qualify for separate recognition. The Company finalized the purchase price allocation in the fourth quarter of 2021. (2) ACQUISITIONS – CONTINUED 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 ​ 62 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ 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 is 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 no t deductible for tax purposes and the customer relationship will be amortized over eight years . The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that do no t qualify for separate recognition. The Company finalized the purchase price allocation in the second quarter of 2022. On May 29, 2020, the Company acquired 55 % of Energia Solar do Brasil ("Solbras") for $ 4,308 . Approximately $ 646 of the purchase price was contingent on seller representations and warranties and was settled for the full amount in the second quarter of 2021. Solbras is a leading provider of solar energy solutions for agriculture. In the purchase price allocation, goodwill of $ 3,341 and customer relationships of $ 3,718 were recorded and the remainder to net working capital. Goodwill is no t deductible for tax purposes and the customer relationship will be amortized over eight years . The acquisition of Solbras, located in Brazil, was made to allow the Company to expand its product offerings in the Agriculture segment to include not only pivots, but also a sustainable and low-cost energy source to provide electricity to the units. The Company finalized the purchase price allocation in the fourth quarter of 2020. On March 6, 2020, the Company acquired 75 % of KC Utility Packaging, LLC for $ 4,200 . Approximately $ 400 of the purchase price was contingent on seller representations and warranties and was settled for the full amount in the first quarter of 2021. The Company name was subsequently changed to Valmont Substations, LLC. The acquisition was made to expand the Company’s utility substation product offering. In the purchase price allocation, goodwill of $ 1,100 , customer relationships of $ 4,000 , and other intangibles of $ 500 were recorded. The Company finalized the purchase price allocation in the fourth quarter of 2020. Proforma disclosures were omitted for these acquisitions as they do not have a significant impact on the Company’s financial results. Acquisition-related costs incurred for the above acquisitions were insignificant for all years presented. Acquisitions of Noncontrolling Interests In August 2022, the Company acquired the remaining 9 % of Convert Italia S.p.A. for $ 3,046 . As this transaction was for the acquisition of all remaining shares of consolidated subsidiary with no change in control, it was recorded within shareholders’ equity and as a financing cash flow in the Consolidated Statements of Cash Flows. In May 2022, the Company acquired the remaining 20 % of Valmont West Coast Engineering, Ltd. for $ 4,292 . As this transaction was for the acquisition of all of the remaining shares of consolidated subsidiary with no change in control, it was recorded within shareholders’ equity and as a financing cash flow in the Consolidated Statements of Cash Flows. (2) ACQUISITIONS – CONTINUED In February 2020, the Company acquired the remaining 49 % of AgSense that it did not own for $ 43,983 , which includes a holdback payment of $ 2,200 that was made in the second quarter of 2020. The accounting for owning 100 % of AgSense resulted in the recognition of a deferred tax asset of approximately $ 7,700 . In December 2020, the Company acquired the remaining 40 % of Torrent Engineering and Equipment that it did not own for $ 3,500 . In the first quarter of 2020, the Company acquired 16 % of the remaining 25 % that it did not own of Convert Italia S.p.A. for a cash payment of $ 11,750 . The purchase agreement also settled the escrow funds which the Company had paid at date of acquisition. 63 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (3) DIVESTITURES On November 30, 2022, the Company completed the sale of Valmont SM, the offshore wind energy structures business in Denmark, reported in the Other segment. The business was sold because it did not align with the long-term strategic plans for the Company. The offshore wind energy structures business’ historical annual sales, operating profit, and net assets are not significant for discontinued operations presentation. The offshore wind energy structures business had operating income of $ 2,259 for the year ended December 31, 2022, and an operating loss of $ 40,192 (inclusive of a $ 27,900 impairment of long-lived assets) for the year ended December 25, 2021. The Company received Danish Krone 90,000 (U.S. $ 12,570 ) at closing with an additional Danish Krone 28,000 (U.S. $ 4,027 ) held in an escrow account subject to normal closing conditions before it will be released to the Company. The assets and liabilities of the offshore wind energy structures business at closing on November 30, 2022 were as follows: ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 12,420 Receivables, net ​ ​ 35,407 Inventories ​ 1,144 Contract assets ​ ​ 19,127 Prepaid expenses and other assets ​ ​ 1,852 Net property, plant, and equipment ​ 12,915 Intangible assets ​ ​ 5,579 Other assets ​ ​ 1,103 Total assets ​ $ 89,547 ​ ​ ​ ​ Accounts payable ​ $ 23,611 Contract liabilities ​ ​ 34,814 Accrued expenses ​ ​ 4,737 Deferred income taxes ​ ​ 1,375 Total liabilities ​ $ 64,537 ​ ​ ​ ​ Net assets ​ $ 25,010 ​ The pre-tax loss from divestiture is reported in “Other income (expenses)”. The loss is comprised of the proceeds and an asset recognized for the escrow funds not yet released from buyer, less deal-related costs and the net assets of the business, which resulted in a loss of $ 12,123 . In addition to this amount is a $ 21,150 realized loss on foreign exchange translation adjustments and net investment hedges previously reported in shareholders’ equity. ​ ​ ​ ​ ​ Pre-tax loss from divestitures, before recognition of currency translation loss ​ $ 12,123 Recognition of cumulative currency translation loss and hedges (reclassified from OCI) ​ 21,150 Net pre-tax loss from divestiture of offshore wind energy structures business ​ $ 33,273 ​ The transaction did not result in a taxable capital loss. 64 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (4) RESTRUCTURING ACTIVITIES During 2020, the Company executed certain regional restructuring activities (the "2020 Plan") and a U.S. specific early retirement program. The 2020 Plan included the closure of one U.S. galvanizing facility. All 2020 restructuring activities were completed by December 26, 2020. The Company recorded the following pre-tax expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ Agriculture ​ Other ​ Corporate ​ Total Severance ​ $ 1,139 ​ $ — ​ $ — ​ $ — ​ $ 1,139 Other cash restructuring expenses ​ 1,847 ​ — ​ — ​ — ​ 1,847 Impairments of fixed assets/net loss on disposals ​ 3,751 ​ — ​ — ​ — ​ 3,751 Total cost of sales ​ 6,737 ​ — ​ — ​ — ​ 6,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Severance ​ 7,873 ​ 2,968 ​ 1,192 ​ 1,761 ​ 13,794 Other cash restructuring expenses ​ 1,852 ​ — ​ 79 ​ 244 ​ 2,175 Impairments of assets / net loss on disposals ​ 349 ​ — ​ 94 ​ — ​ 443 Total selling, general and administrative expenses ​ 10,074 ​ 2,968 ​ 1,365 ​ 2,005 ​ 16,412 Consolidated total ​ $ 16,811 ​ $ 2,968 ​ $ 1,365 ​ $ 2,005 ​ $ 23,149 ​ ​ ​ ​ (5) 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 fifty-three weeks ended December 31, 2022 and the fifty-two weeks ended December 25, 2021 and December 26, 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Interest ​ ​ $ 46,653 ​ $ 41,159 ​ $ 40,209 Income taxes ​ ​ 93,109 ​ 60,366 ​ 54,801 ​ The sale of the offshore wind energy structures business in 2022 included a hold back receivable contingent on normal closing conditions that is expected to be resolved in the first half of 2023. The acquisitions in 2020 included hold back payments contingent on seller representations and warranties of $ 1,046 . The 2020 hold back payments were released from a trust in the first half of 2021 and the 2019 hold back payments were paid in the first quarter of 2020 and are shown as an investing use of cash in the acquisitions line item of the Consolidated Statements of Cash Flows. (6) INVENTORIES Inventories consisted of the following at December 31, 2022 and December 25, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 25, ​ ​ 2022 2021 Raw materials and purchased parts ​ $ 258,814 ​ $ 278,107 Work-in-process ​ 44,453 ​ 63,628 Finished goods and manufactured goods ​ 425,495 ​ 387,099 ​ ​ $ 728,762 ​ $ 728,834 ​ ​ ​ 65 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (7) PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment, at cost, consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Land and improvements ​ $ 113,188 ​ $ 112,236 Buildings and improvements ​ 390,435 ​ 413,884 Machinery and equipment ​ 721,223 ​ 672,319 Transportation equipment ​ 30,610 ​ 27,020 Office furniture and equipment ​ 128,922 ​ 117,757 Construction in progress ​ 48,773 ​ 78,885 ​ ​ $ 1,433,151 ​ $ 1,422,101 ​ ​ (8) GOODWILL AND INTANGIBLE ASSETS Amortized Intangible Assets The components of amortized intangible assets at December 31, 2022 and December 25, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Gross ​ ​ ​ ​ Weighted ​ ​ Carrying ​ Accumulated ​ Average ​ Amount Amortization Life Customer Relationships ​ $ 222,716 ​ $ 145,502 ​ 13 years Patents & Proprietary Technology ​ 58,404 ​ 21,291 9 years Trade Name ​ 2,850 ​ 645 7 years Other ​ 2,462 ​ 2,164 5 years ​ ​ $ 286,432 ​ $ 169,602 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ Amortization expense for intangible assets was $ 22,120 , $ 21,320 , and $ 18,147 for the fiscal years ended December 31, 2022, December 25, 2021, and December 26, 2020, respectively. During the fourth quarter of fiscal 2021, an impairment test was required when the Company received clarifying information on the competitive environment of the offshore wind energy structures business. As a result, an impairment charge of approximately $ 4,483 was recognized against the remaining net book value of the related customer relationships. 66 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (8) GOODWILL AND INTANGIBLE ASSETS – CONTINUED Estimated annual amortization expense related to finite‑lived intangible assets is as follows: ​ ​ ​ ​ ​ Estimated ​ ​ Amortization ​ ​ Expense 2023 ​ $ 20,825 2024 ​ 18,888 2025 ​ 17,454 2026 ​ 12,933 2027 ​ 9,695 ​ The useful lives assigned to 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. Non-Amortized Intangible Assets Intangible assets with indefinite lives are not amortized. The carrying values of these trade names at December 31, 2022 and December 25, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 25, Year ​ ​ 2022 ​ 2021 ​ Acquired Newmark ​ $ 11,111 ​ $ 11,111 2004 Convert Italia S.p.A. ​ 8,024 ​ 8,479 2018 Webforge ​ ​ 7,107 ​ ​ 7,877 ​ 2010 Ingal EPS / Ingal Civil Products ​ 6,891 ​ 7,637 2010 Valmont SM ​ — ​ 6,082 2014 ConcealFab ​ 5,000 ​ — 2022 Shakespeare ​ 4,000 ​ 4,000 2014 Walpar ​ 3,500 ​ 3,500 2018 Other ​ 14,152 ​ 14,721 Various ​ ​ $ 59,785 ​ $ 63,407 ​ ​ ​ In its determination of these intangible assets as 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. Indefinite-lived intangibles, although not amortized, are still subject to annual impairment assessments, and interim date assessments should events arise that suggest their value may be diminished. The Company’s trade names were tested for impairment as of August 27, 2022. The values of each trade name were determined using the relief-from-royalty method. Based on this evaluation, no trade names were determined to be impaired. During the fourth quarter of fiscal year 2021, an impairment test was required when the Company received clarifying information on the competitive environment of the offshore wind energy structures business. As a result, an impairment charge of approximately $ 2,013 was recognized against the related trade name. In conjunction with an interim second quarter 2020 goodwill impairment test, impairment indicators were noted for the Webforge and Locker trade names requiring an interim impairment test. As a result, an impairment charge of approximately $ 3,900 was recognized against these two trade names in fiscal year 2020. 67 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (8) GOODWILL AND INTANGIBLE ASSETS – CONTINUED Goodwill The carrying amount of goodwill by segment as of December 31, 2022 and December 25, 2021 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ Agriculture ​ Other ​ Total Gross balance at December 25, 2021 ​ $ 442,521 ​ $ 313,512 ​ $ 14,355 ​ $ 770,388 Accumulated impairment losses ​ ( 47,467 ) ​ — ​ ( 14,355 ) ​ ( 61,822 ) Balance at December 25, 2021 ​ 395,054 ​ 313,512 ​ — ​ $ 708,566 Acquisitions ​ 42,465 ​ — ​ — ​ 42,465 Foreign currency translation ​ ( 11,435 ) ​ 265 ​ — ​ ( 11,170 ) Balance at December 31, 2022 ​ $ 426,084 ​ $ 313,777 ​ $ — ​ $ 739,861 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ Agriculture ​ Other ​ Total Gross balance at December 26, 2020 ​ $ 447,612 ​ $ 30,177 ​ $ 14,355 ​ $ 492,144 Accumulated impairment losses ​ ( 47,467 ) ​ — ​ ( 14,355 ) ​ ( 61,822 ) Balance at December 26, 2020 ​ 400,145 ​ 30,177 ​ — ​ 430,322 Acquisitions ​ — ​ 284,253 ​ — ​ 284,253 Foreign currency translation ​ ( 5,091 ) ​ ( 918 ) ​ — ​ ( 6,009 ) Balance at December 25, 2021 ​ $ 395,054 ​ $ 313,512 ​ $ — ​ $ 708,566 ​ The Company’s annual impairment test of goodwill was performed as of August 27, 2022, using primarily the discounted cash flow method. The solar tracking structure reporting unit projects meaningful annual revenue growth for the foreseeable future due to strong market conditions. Therefore, the Company valued this reporting unit using a blend of both the discounted cash flows and a market approach. The market valuation approach estimates the terminal value for this reporting unit using a multiple of earnings before interest, taxes, depreciation, and amortization (“EBITDA”). During fiscal year 2022, no goodwill impairment was recorded. (9) BANK CREDIT ARRANGEMENTS The Company maintains various lines of credit for short-term borrowings totaling $ 125,034 available at December 31, 2022. As of December 31, 2022 and December 25, 2021, $ 5,846 and $ 13,439 was outstanding and recorded as notes payable to banks in the Consolidated Balance Sheets, respectively. The interest rates charged on these lines of credit vary in relation to the banks’ costs of funds. The weighted average interest rate on short-term borrowings was 6.52 % at December 31, 2022. The unused and available borrowings under the lines of credit were $ 119,188 at December 31, 2022. The lines of credit can be modified at any time at the option of the banks. The Company pays no fees in connection with unused lines of credit. (10) INCOME TAXES Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 United States ​ $ 224,370 ​ $ 202,051 ​ $ 169,281 Foreign ​ 139,518 ​ 58,032 ​ 23,487 ​ ​ $ 363,888 ​ $ 260,083 ​ $ 192,768 ​ 68 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (10) INCOME TAXES – CONTINUED Income tax expense (benefit) consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Current: ​ ​ ​ Federal ​ $ 48,309 ​ $ 30,031 ​ $ 30,431 State ​ 11,888 ​ 8,891 ​ 8,302 Foreign ​ 48,273 ​ 20,644 ​ 12,730 ​ ​ 108,470 ​ 59,566 ​ 51,463 Non-current: ​ 1,442 ​ 1,777 ​ ( 451 ) Deferred: ​ ​ ​ Federal ​ ( 7,544 ) ​ 4,587 ​ ( 6,086 ) State ​ ( 1,973 ) ​ 558 ​ ( 822 ) Foreign ​ 8,292 ​ ( 5,074 ) ​ 5,511 ​ ​ ( 1,225 ) ​ 71 ​ ( 1,397 ) ​ ​ $ 108,687 ​ $ 61,414 ​ $ 49,615 ​ The reconciliations of the statutory federal income tax rate and the effective tax rate follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 Statutory federal income tax rate 21.0 % ​ 21.0 % ​ 21.0 % State income taxes, net of federal benefit 2.3 ​ 2.9 ​ 3.5 ​ Carryforwards, credits and changes in valuation allowances 1.0 ​ 1.5 ​ ( 1.6 ) ​ Foreign jurisdictional tax rate differences 4.2 ​ ( 0.1 ) ​ ( 1.7 ) ​ Changes in unrecognized tax benefits 0.3 ​ 0.7 ​ 0.2 ​ Goodwill and intangible impairment — ​ — ​ 2.4 ​ Loss on divestiture of offshore wind energy structures business ​ 2.2 ​ — ​ — ​ Other ( 1.1 ) ​ ( 2.4 ) ​ 1.9 ​ ​ 29.9 % ​ 23.6 % ​ 25.7 % ​ Fiscal year 2022 includes $ 8,166 of tax expense related to the divestiture of the offshore wind energy structures business for which no benefit has been recorded. Fiscal year 2021 includes $ 1,894 of U.S. tax benefits related to foreign taxes paid offset by $ 5,102 of valuation allowance recorded against the offshore wind energy structures business deferred tax assets. Fiscal year 2020 includes $ 4,651 of tax expense related to non-tax deductible impairment of goodwill. Fiscal year 2020 also includes $ 1,100 of tax expense primarily related to restructuring charges for which no tax benefits have been recorded due to the increase in valuation allowance. 69 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (10) INCOME TAXES – CONTINUED Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax credit carryforwards. The tax effects of significant items comprising the Company’s net deferred income tax assets/liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Deferred income tax assets: ​ ​ Accrued expenses and allowances ​ $ 33,577 ​ $ 21,241 Tax credits and loss carryforwards ​ 67,249 ​ 83,690 Defined benefit pension liability ​ — ​ 134 Inventory allowances ​ 7,912 ​ 2,818 Accrued compensation and benefits ​ 24,398 ​ 24,302 Lease liabilities ​ 40,709 ​ 41,128 Deferred compensation ​ 16,308 ​ 10,893 Gross deferred income tax assets ​ 190,153 ​ 184,206 Valuation allowance ​ ( 48,974 ) ​ ( 54,256 ) Net deferred income tax assets ​ 141,179 ​ 129,950 Deferred income tax liabilities: ​ ​ Property, plant and equipment ​ 45,300 ​ 37,686 Intangible assets ​ 52,750 ​ 48,244 Defined benefit pension asset ​ 6,054 ​ — Lease assets ​ 40,708 ​ 41,128 Other deferred tax liabilities ​ 4,941 ​ 5,041 Total deferred income tax liabilities ​ 149,753 ​ 132,099 Net deferred income tax asset (liability) ​ $ ( 8,574 ) ​ $ ( 2,149 ) ​ Deferred income tax assets (liabilities) are presented as follows on the Consolidated Balance Sheets: ​ ​ ​ ​ ​ ​ ​ Balance Sheet Caption 2022 2021 Other assets ​ $ 32,517 ​ $ 45,700 Deferred income taxes ​ ( 41,091 ) ​ ( 47,849 ) Net deferred income tax asset (liability) ​ $ ( 8,574 ) ​ $ ( 2,149 ) ​ Management of the Company has reviewed recent operating results and projected future operating results. The Company’s belief that realization of its net deferred tax assets is more likely than not is based on, among other factors, changes in operations that have occurred in recent years and available tax planning strategies. At December 31, 2022 and December 25, 2021 respectively, there were $ 67,249 and $ 83,690 relating to tax credits and loss carryforwards. Valuation allowances have been established for certain losses that reduce deferred tax assets to an amount that will, more likely than not, be realized. During fiscal 2021, it was determined no longer more likely than not that the offshore wind energy structures business, based in Denmark, would generate future taxable income so a valuation allowance of $ 5,102 was recognized against their tax loss carryforwards. During fiscal year 2022, the offshore wind energy structures business was sold. Also in 2021, the Company recorded a valuation allowance of $ 6,472 against the tax attributes related to the acquisition of Prospera. The deferred tax assets at December 31, 2022 that are associated with tax loss and tax credit carryforwards not reduced by valuation allowances expire in periods starting in 2023. 70 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Uncertain tax positions included in other non-current liabilities are evaluated in a two-step process, whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. ​ 71 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (10) INCOME TAXES – CONTINUED The following summarizes the activity related to the unrecognized tax benefits in 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Gross unrecognized tax benefits—beginning of year ​ $ 2,664 ​ $ 1,864 Gross increases—tax positions in prior period ​ 1,133 ​ 1,315 Gross decreases—tax positions in prior period ​ — ​ ( 6 ) Gross increases—current‑period tax positions ​ 523 ​ 240 Settlements with taxing authorities ​ ( 1,576 ) ​ — Lapse of statute of limitations ​ ( 208 ) ​ ( 749 ) Gross unrecognized tax benefits—end of year ​ $ 2,536 ​ $ 2,664 ​ There are approximately $ 1,141 of uncertain tax positions for which reversal is reasonably possible during the next 12 months due to the closing of the statute of limitations. The nature of these uncertain tax positions is generally the computation of a tax deduction or tax credit. During 2022, the Company recorded a reduction of its gross unrecognized tax benefit of $ 208 with $ 165 recorded as a reduction of income tax expense, due to the expiration of statutes of limitation in the United States. During 2021, the Company recorded a reduction of its gross unrecognized tax benefit of $ 749 with $ 592 recorded as a reduction of income tax expense, due to the expiration of statutes of limitation in the United States. In addition to these amounts, there was an aggregate of $ 172 and $ 1,758 of interest and penalties at December 31, 2022 and December 25, 2021, respectively. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Earnings. The Company files income tax returns in the U.S. and various states as well as foreign jurisdictions. Tax years 2019 and forward remain open under U.S. statutes of limitation. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 2,447 and $ 4,324 at December 31, 2022 and December 25, 2021, respectively. (11) LONG-TERM DEBT Long-term debt is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 25, ​ 2022 2021 5.00 % senior unsecured notes due 2044 (a) ​ $ 450,000 ​ $ 450,000 5.25 % senior unsecured notes due 2054 (b) ​ 305,000 ​ 305,000 Unamortized discount on 5.00 % and 5.25 % senior unsecured notes (a) (b) ​ ( 20,053 ) ​ ( 20,436 ) Revolving credit agreement (c) ​ 140,513 ​ 218,897 Other notes ​ 3,587 ​ 5,684 Debt issuance costs ​ ( 6,918 ) ​ ( 7,189 ) Long-term debt ​ 872,129 ​ 951,956 Less: Current installments of long-term debt ​ 1,194 ​ 4,884 Long-term debt, excluding current installments ​ $ 870,935 ​ $ 947,072 ​ (a) The 5.00 % senior unsecured notes due 2044 include an aggregate principal amount of $ 450,000 on which interest is paid and an unamortized discount balance of $ 12,820 at December 31, 2022. The notes bear interest at 5.000 % per annum and are due on October 1, 2044. The discount will be amortized and recognized as interest expense as interest payments are made over the term of the notes. The notes may be repurchased prior to maturity in whole, or in part, at any time at 100 % of their principal amount plus a make-whole premium and accrued and unpaid interest. These notes are guaranteed by certain subsidiaries of the Company. 72 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (b) The 5.25 % senior unsecured notes due 2054 include an aggregate principal amount of $ 305,000 on which interest is paid and an unamortized discount balance of $ 7,233 at December 31, 2022. The notes bear interest at 5.250 % per annum and are due on October 1, 2054. The discount will be amortized and recognized as interest expense as interest payments are made over the term of the notes. The notes may be repurchased prior to maturity in whole, or in part, at any time at 100 % of their principal amount plus a make-whole premium and accrued and unpaid interest. These notes are guaranteed by certain subsidiaries of the Company. 73 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (11) LONG-TERM DEBT – CONTINUED (c) On October 18, 2021, the Company along with its wholly-owned subsidiaries Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., as borrowers, entered into an amendment and restatement of the revolving credit agreement with the Company’s lenders. The maturity date of the revolving credit facility was extended to October 18, 2026. The credit facility provides for $ 800,000 of committed unsecured revolving credit loans with available borrowings thereunder to $ 400,000 in foreign currencies. The Company may increase the credit facility by up to an additional $ 300,000 at any time, subject to lenders increasing the amount of their commitments. The interest rate on the borrowings will be, at the Company’s option, either: (i) 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.; (ii) 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 the Company’s senior, unsecured, debt published by Standard & Poor’s Rating Services and Mood’s Investors Service, Inc.; or (iii) 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. At December 31, 2022, the Company had $ 140,513 outstanding borrowings under the revolving credit facility. The revolving credit facility has a maturity date of October 18, 2026, and contains a financial covenant that may limit additional borrowing capability under the agreement. At December 31, 2022, the Company had the ability to borrow $ 659,401 under this facility, after consideration of standby letters of credit of $ 162 associated with certain insurance obligations. The Company also maintains certain short-term bank lines of credit totaling $ 125,034 , of which $ 119,188 was unused at December 31, 2022. The revolving credit facility includes a financial leverage covenant. The Company was in compliance with this covenant at December 31, 2022. The minimum aggregate maturities of long-term debt for each of the five years following 2022 are: $ 1,194 , $ 860 , $ 679 , $ 141,081 , and $ 10 . The obligations arising under the 5.00 % senior unsecured notes due 2044, the 5.25 % senior unsecured notes due 2054, and the revolving credit facility are guaranteed by the Company and its wholly owned subsidiaries Valmont Telecommunications, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd. (12) STOCK-BASED COMPENSATION The Company maintains 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, restricted stock awards, restricted stock units, and bonuses of common stock. At December 31, 2022, 1,722,643 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in 74 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ capitalization. The Company’s policy is to issue shares upon exercise of stock options or vesting of restricted stock units or issuance of restricted stock from treasury shares held by the Company. Under the stock option plans, the exercise price of each option equals the market price at the time of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the fifth anniversary of the grant. Expiration of grants is seven to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three years beginning on the first anniversary of the grant. The Company recorded $ 41,850 , $ 28,720 , and $ 14,874 of compensation expense (included in selling, general and administrative expenses) in the 2022, 2021, and 2020 fiscal years for all share-based compensation programs, respectively. The associated tax benefits recorded in the 2022, 2021, and 2020 fiscal years was $ 10,463 , $ 7,180 , and $ 3,719 , respectively. (12) STOCK-BASED COMPENSATION – CONTINUED At December 31, 2022, the amount of unrecognized stock option compensation expense, to be recognized over a weighted average period of 2.37 years, was approximately $ 6,814 . Compensation expense for stock options was $ 3,120 in 2022, $ 2,538 in 2021, and $ 2,628 in 2020. The Company uses a binomial option pricing model to value its stock options. The fair value of each option grant made in 2022, 2021 and 2020 was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 Expected volatility 32.36 % ​ 33.01 % ​ 33.72 % Risk-free interest rate 3.75 % ​ 1.26 % ​ 0.43 % Expected life from vesting date 5.4 yrs ​ 4.0 yrs ​ 4.0 yrs ​ Dividend yield 1.10 % ​ 1.20 % ​ 1.24 % ​ Following is a summary of the stock option activity during 2020, 2021 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Contractual ​ Intrinsic ​ Shares Price Term Value Outstanding at December 28, 2019 488,560 ​ $ 133.13 ​ Granted 66,231 ​ 168.80 ​ Exercised ( 147,014 ) ​ 125.43 ​ Forfeited ( 8,212 ) ​ 137.49 ​ Outstanding at December 26, 2020 399,565 ​ $ 141.79 4.88 ​ $ 12,103 Options vested or expected to vest at December 26, 2020 389,633 ​ $ 141.56 4.81 ​ 11,890 Options exercisable at December 26, 2020 254,498 ​ $ 138.64 3.38 ​ 8,510 ​ 75 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ The weighted average per share fair value of options granted during 2020 was $ 45.49 . ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Contractual ​ Intrinsic ​ Shares Price Term Value Outstanding at December 26, 2020 399,565 ​ $ 141.79 ​ Granted 47,223 ​ 252.89 ​ Exercised ( 169,908 ) ​ 135.76 ​ Forfeited ( 416 ) ​ 132.84 ​ Outstanding at December 25, 2021 276,464 ​ $ 164.48 5.88 ​ $ 22,586 Options vested or expected to vest at December 25, 2021 268,338 ​ $ 163.42 5.80 ​ 22,188 Options exercisable at December 25, 2021 154,860 ​ $ 142.15 4.00 ​ 15,896 ​ The weighted average per share fair value of options granted during 2021 was $ 67.81 . ​ 76 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (12) STOCK-BASED COMPENSATION – CONTINUED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Contractual ​ Intrinsic ​ Shares Price Term Value Outstanding at December 25, 2021 276,464 ​ $ 164.48 ​ Granted 40,564 ​ 332.63 ​ Exercised ( 121,163 ) ​ 139.89 ​ Forfeited ( 175 ) ​ 104.47 ​ Outstanding at December 31, 2022 195,690 ​ $ 214.62 7.53 ​ $ 22,644 Options vested or expected to vest at December 31, 2022 189,267 ​ $ 212.69 7.48 ​ 22,261 Options exercisable at December 31, 2022 90,556 ​ $ 172.08 6.40 ​ 14,276 ​ The weighted average per share fair value of options granted during 2022 was $ 104.01 . In accordance with shareholder-approved plans, the Human Resource Committee of the Board of Directors may grant stock under various stock‑based compensation arrangements, including restricted stock awards, restricted stock units, performance based restricted stock units, and stock issued in lieu of cash bonuses. Under such arrangements, stock or cash (as applicable) is issued without direct cost to the employee. The restricted stock units are settled in Company stock when the restriction period ends. Restricted stock units and awards generally vest in equal installments over three years beginning on the first anniversary of the grant. All cash-settled restricted stock units are marked-to-market and presented within other accrued expenses and noncurrent liabilities in the Consolidated Balance Sheets. During fiscal 2022, 2021 and 2020, the Company granted restricted stock units to directors and certain management employees as follows (which are not included in the above stock plan activity tables): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Restricted stock units granted ​ 60,901 ​ 216,971 ​ 85,251 Weighted‑average per share price on grant date ​ $ 313.75 ​ $ 236.28 ​ $ 161.73 Recognized compensation expense ​ $ 22,664 ​ $ 16,147 ​ $ 9,081 ​ During the second half of 2021, the Company granted 159,982 restricted stock units, worth $ 36,916 , to certain employees of Prospera. These restricted stock units vest in equal installments over four years and require the employees to continue employment over those four years. As such, the related compensation expense will be incurred over the vesting period. At December 31, 2022 the amount of deferred stock‑based compensation granted, to be recognized over a weighted‑average period of 2.73 years, was approximately $ 50,422 . Performance-based restricted stock units (“PSU”) awards consist of shares of the Company’s stock which are payable upon the determination that the Company achieve certain established performance targets and can range from 0 % to 200 % of the targeted payout based on the actual results. PSUs granted in 2022 and 2021 have a performance period of three years . The fair value of each PSU granted is equal to the fair market value of the Company’s common stock on the date of grant. PSUs granted generally have a three years period cliff vesting schedule; however, according to the grant agreements, if certain conditions are met, the employee (or beneficiary) will receive a prorated amount of the award based on active employment during the service period. 77 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ During fiscal 2022, 2021 and 2020, the Company granted PSU awards as follows (which are not included in the above stock plan activity tables): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 Shares granted ​ 33,736 ​ 41,060 ​ 35,181 Weighted‑average per share price on grant date ​ $ 215.15 ​ $ 230.40 ​ $ 125.41 Recognized compensation expense ​ $ 16,066 ​ $ 10,035 ​ $ 3,165 ​ ​ 78 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (13) EARNINGS PER SHARE The following table provides a reconciliation between basic and diluted earnings per share (“EPS”): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dilutive ​ ​ ​ ​ ​ ​ Effect of ​ ​ ​ ​ ​ ​ ​ Stock ​ Diluted ​ ​ Basic EPS ​ Options ​ EPS 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings attributable to Valmont Industries, Inc. ​ $ 250,863 ​ $ — ​ $ 250,863 Weighted average shares outstanding (000’s) ​ 21,311 ​ 269 ​ 21,580 Per share amount ​ $ 11.77 ​ $ ( 0.15 ) ​ $ 11.62 2021: ​ ​ ​ Net earnings attributable to Valmont Industries, Inc. ​ $ 195,630 ​ $ — ​ $ 195,630 Weighted average shares outstanding (000’s) ​ 21,193 ​ 300 ​ 21,493 Per share amount ​ $ 9.23 ​ $ ( 0.13 ) ​ $ 9.10 2020: ​ ​ ​ Net earnings attributable to Valmont Industries, Inc. ​ $ 140,693 ​ $ — ​ $ 140,693 Weighted average shares outstanding (000’s) ​ 21,315 ​ 110 ​ 21,425 Per share amount ​ $ 6.60 ​ $ ( 0.03 ) ​ $ 6.57 ​ Basic and diluted net earnings and earnings per share in fiscal year 2022 were impacted by a loss from the divestiture of the offshore wind energy structures’ business of $ 33,273 ( no associated tax benefit) ($ 1.54 per share). Basic and diluted net earnings and earnings per share in fiscal year 2021 were impacted by impairments of long-lived assets (customer relationship intangible asset, trade name, and property, plant and equipment) associated with the offshore wind energy structures business of $ 21,678 after-tax ($ 1.01 per share) and a valuation allowance against the deferred tax assets of the offshore wind energy structures business of $ 5,076 after-tax ($ 0.24 per share). Basic and diluted net earnings and earnings per share in fiscal year 2020 were impacted by impairments of goodwill and intangible assets in fiscal year 2020 of $ 16,220 after-tax ($ 0.76 per share) and restructuring expenses of $ 17,324 after-tax ($ 0.81 per share). Earnings per share are computed independently for each of the quarters. Therefore, the sum of the quarterly earnings per share may not equal the total for the year. At the end of fiscal years 2022, 2021, and 2020 there were 40,564 , 47,223 , and 0 outstanding stock options, respectively, with exercise prices exceeding the market price of common stock that were excluded from the computation of diluted earnings per share, respectively. (14) EMPLOYEE RETIREMENT SAVINGS PLAN Established under Internal Revenue Code Section 401(k), the Valmont Employee Retirement Savings Plan (“VERSP”) is a defined contribution plan available to all eligible employees. Participants can elect to contribute up to 60 % of annual pay, on a pre-tax and/or after-tax basis. The Company also makes contributions to the VERSP and a non-qualified deferred compensation plan for certain Company executives. The 2022, 2021, and 2020 Company contributions to these plans amounted to approximately $ 18,300 , $ 16,000 , and $ 14,800 , respectively. The Company sponsors a fully‑funded, non-qualified deferred compensation plan for certain Company executives who otherwise would be limited in receiving company contributions into the VERSP under Internal Revenue Service regulations. The invested assets and related liabilities of these participants were $ 25,008 and $ 29,982 at December 31, 2022 and December 25, 2021, respectively. Such amounts are included in “Other assets” and “Deferred compensation” on the Consolidated Balance Sheets. 79 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Amounts distributed from the Company’s non-qualified deferred compensation plan to participants under the transition rules of section 409A of the Internal Revenue Code were approximately $ 4,691 and $ 8,900 at December 31, 2022 and December 25, 2021, respectively. All distributions were made in cash. ​ 80 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (15) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of cash and cash equivalents, receivables, accounts payable, notes payable to banks, and accrued expenses approximate fair value because of the short maturity of these instruments. The fair values of each of the Company’s long-term debt instruments are based on the amount of future cash flows associated with each instrument discounted using the Company’s current borrowing rate for similar debt instruments of comparable maturity (Level 2). The fair value estimates are made at a specific point in time and the underlying assumptions are subject to change based on market conditions. At December 31, 2022, the carrying amount of the Company’s long-term debt was $ 872,129 with an estimated fair value of approximately $ 807,281 . At December 25, 2021, the carrying amount of the Company’s long-term debt was $ 951,956 with an estimated fair value of approximately $ 1,175,332 . ASC 820 establishes a 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 is used. Inputs refers 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 the investments held in the Valmont Deferred Compensation Plan of $ 25,008 ($ 29,982 in 2021 ) represent mutual funds, invested in debt and equity securities, classified as trading securities, considering the employee’s ability to change investment allocation of their deferred compensation at any time. The Company’s remaining ownership in Delta EMD Pty. Ltd. (JSE:DTA) of $ 0 ($ 94 in 2021) is recorded at fair value at December 31, 2022. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input. These securities are included in “Other assets” on the Consolidated Balance Sheets. Derivative Financial Instruments: The fair value of foreign currency and commodity forward 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. Mutual Funds: The Company has short-term investments in various mutual funds. 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 ​ ​ December 31, 2022 ​ Assets (Level 1) ​ (Level 2) ​ (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trading securities ​ $ 25,008 ​ $ 25,008 ​ $ — ​ $ — Derivative financial instruments, net ​ $ 1,404 ​ $ — ​ $ 1,404 ​ $ — Cash and cash equivalents - mutual funds ​ $ 7,205 ​ $ 7,205 ​ $ — ​ $ — Cash and cash equivalents - marketable securities ​ $ 136 ​ $ — ​ $ 136 ​ $ — ​ 81 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (15) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS – CONTINUED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ) ​ $ — ​ ​ (16) 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. The Company had open foreign currency forward contracts that are marked to market at December 31, 2022 and December 25, 2021, which are insignificant and thus excluded from the tables below. 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. Fair value of derivative instruments at December 31, 2022 and December 25, 2021 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivatives designated as hedging instruments: Balance sheet location ​ 2022 ​ 2021 Commodity forward contracts ​ Accrued expenses ​ $ ( 3,854 ) ​ $ ( 5,802 ) Foreign currency forward contracts Prepaid expenses and other assets ​ ​ 83 ​ 149 Foreign currency forward contracts Accrued expenses ​ ​ — ​ ( 118 ) Cross currency swap contracts Prepaid expenses and other assets ​ ​ 5,385 ​ 1,764 Cross currency swap contracts Accrued expenses ​ ​ ( 210 ) ​ — ​ ​ ​ ​ $ 1,404 ​ $ ( 4,007 ) ​ Gains (losses) on derivatives recognized in the Consolidated Statements of Earnings for the years ended December 31, 2022, December 25, 2021, and December 26, 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivatives designated as hedging instruments: ​ Statements of earnings location ​ ​ 2022 ​ 2021 ​ 2020 Commodity forward contracts ​ Product cost of sales ​ ​ $ ( 5,212 ) ​ $ 25,821 ​ $ — Foreign currency forward contracts ​ Product sales ​ ​ ​ — ​ ​ — ​ ​ 1,598 Foreign currency forward contracts ​ Other income ​ ​ ​ ( 45 ) ​ ( 40 ) ​ 187 Interest rate hedge amortization ​ Interest expense ​ ​ ​ ( 64 ) ​ ( 64 ) ​ ( 64 ) Cross currency swap contracts ​ Loss from divestiture of wind energy structures business ​ ​ ​ 4,827 ​ — ​ — Cross currency swap contracts ​ Interest expense ​ ​ ​ 2,875 ​ 2,780 ​ 2,738 ​ ​ ​ ​ ​ $ 2,381 ​ $ 28,497 ​ $ 4,459 ​ 82 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Cash Flow Hedges During 2021, the Company entered into steel hot rolled coil (“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 $ 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 December 31, 2022, the forward contracts had a notional amount of $ 9,766 for the total purchase of 10,300 short tons from January 2023 to March 2023. The gain (loss) realized upon settlement will be recorded in product cost of sales in the Consolidated Statements of Earnings over average inventory turns. ​ 83 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (16) DERIVATIVE FINANCIAL INSTRUMENTS – CONTINUED 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. During the fourth quarter of 2022, the Company entered into additional natural gas commodity forward contracts that also qualify as a cash flow hedge. The forward contracts had a notional amount of $ 3,088 for the total purchase of 620,000 mmBtu from January 2023 to October 2024. As of December 31, 2022, the forward contracts had a notional amount of $ 7,043 for the total purchase of 1,230,000 mmBtu from January 2023 to October 2024. The gain (loss) realized upon settlement will be recorded in “Product cost of sales” in the Consolidated Statements of Earnings in the period consumed. 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. During 2021, a Brazilian subsidiary with a real functional currency entered into foreign currency forward contracts to mitigate foreign currency risk related to a customer order with components purchased in euros. The forward contracts, which qualified as a cash flow hedge, matured in July and September 2021 and had notional amounts to buy 3,800 euros in exchange for a stated amount of Brazilian real. During 2021, 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 qualified as a fair value hedge, matured in December 2021 and a notional amount to sell $ 2,000 in exchange for a stated amount of euros. In 2020, a Brazilian subsidiary with a real functional currency entered into foreign currency forward contracts to mitigate foreign currency risk related to a customer order with components purchased in euros. The forward contracts, which qualified as a cash flow hedge, matured in December 2020 and a notional amount to buy 4,500 euros in exchange for a stated amount of Brazilian real. In 2020, a subsidiary with a euro functional currency entered into foreign currency forward contracts to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward contracts, which qualified as a cash flow hedge, matured in June 2021 and a notional amount to sell $ 27,500 in exchange for a stated amount of euros. Net Investment Hedges In the second quarter of 2020, the Company early settled its Australian dollar denominated foreign currency forward contracts and received proceeds of $ 11,983 . Amounts will remain in OCI until either the sale or substantially complete liquidation of the related subsidiaries. In the second quarter of 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 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 second half of 2022, the Company settled the DKK CCS and received proceeds of $ 3,532 . Due to the sale of the offshore wind energy structures business in the fourth quarter of 2022, the Company reclassified the cumulative net investment hedge 84 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ gain of $ 4,827 ($ 3,620 after tax) from OCI to “Loss from divestiture of offshore wind energy structures business” in the Consolidated Statements of Earnings. Key terms of the Euro CCS are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ ​ ​ Swapped ​ Set Settlement Currency ​ Amount ​ Termination Date ​ Interest Rate ​ Amount Euro ​ $ 80,000 ​ April 1, 2024 2.825 % ​ € 71,550 ​ ​ ​ (17) GUARANTEES The Company’s product warranty accrual reflects management’s best estimate of probable liability under its product warranties. Historical product claims data is used to estimate the cost of product warranties at the time revenue is recognized. Changes in the product warranty accrual, which is recorded in “Accrued expenses”, for the years ended December 31, 2022 and December 25, 2021, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Balance, beginning of period ​ $ 21,308 ​ $ 14,787 Payments made ​ ( 10,569 ) ​ ( 6,444 ) Change in liability for warranties issued during the period ​ 12,866 ​ 13,534 Change in liability for pre-existing warranties ​ ( 3,832 ) ​ ( 569 ) Balance, end of period ​ $ 19,773 ​ $ 21,308 ​ ​ ​ (18) COMMITMENTS & CONTINGENCIES Various claims and lawsuits are pending against Company and certain of its subsidiaries. The Company cannot fully determine the effect of all asserted and unasserted claims on its consolidated results of operations, financial condition, or liquidity. Where asserted and unasserted claims are considered probable and reasonably estimable, a liability has been recorded. The Company does not expect that any known lawsuits, claims, environmental costs, commitments, or contingent liabilities will have a material adverse effect on the consolidated results of operations, financial condition, or liquidity. (19) DEFINED BENEFIT RETIREMENT PLAN Delta Ltd., a wholly-owned subsidiary of the Company, is the sponsor of the Delta Pension Plan ("Plan"). The Plan provides defined benefit retirement income to eligible employees in the United Kingdom. Pension retirement benefits to qualified employees are 1.67 % of final salary per year of service upon reaching the age of 65 years . This Plan has no active employees as members at December 31, 2022. Funded Status The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (“PBO”) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases (if applicable) and inflation. Plan assets are measured at fair value. Because the pension plan is denominated in British pounds sterling, the Company used exchange rates of $ 1.209 /£ and $ 1.356 /£ to translate the net pension liability into U.S. dollars at December 31, 2022 and December 25, 2021, respectively. The PBO was $ 435,711 at December 31, 2022. The net funded status of $ 24,216 at December 31, 2022 is recorded as a noncurrent asset reflecting, in part, a significant actuarial gain for the period from December 25, 2021 to December 31, 2022 attributed to an increase in the discount rate. 85 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Projected Benefit Obligation and Fair Value of Plan Assets —The accumulated benefit obligation (“ABO”) is the present value of benefits earned to date, assuming no future compensation growth. As there are no active employees in the plan, the ABO is equal to the PBO for all years presented. The overfunded ABO represents the difference between the PBO and the fair value of plan assets. (19) DEFINED BENEFIT RETIREMENT PLAN – CONTINUED Changes in the PBO and fair value of plan assets for the pension plan for the period from December 26, 2020 to December 25, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected ​ ​ ​ ​ ​ ​ Benefit ​ Plan ​ Funded ​ ​ Obligation ​ Assets ​ status Fair Value at December 26, 2020 ​ $ 860,173 ​ $ 741,650 ​ $ ( 118,523 ) Employer contributions ​ ​ — ​ ​ 1,924 ​ ​ Interest cost ​ 9,896 ​ — ​ Actual return on plan assets ​ — ​ 48,637 ​ Benefits paid ​ ( 22,952 ) ​ ( 22,952 ) ​ Actuarial gain ​ ( 77,379 ) ​ — ​ Currency translation ​ ( 8,032 ) ​ ( 8,089 ) ​ Fair Value at December 25, 2021 ​ $ 761,706 ​ $ 761,170 ​ $ ( 536 ) ​ Changes in the PBO and fair value of plan assets for the pension plan for the period from December 25, 2021 to December 31, 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected ​ ​ ​ ​ ​ ​ Benefit ​ Plan ​ Funded ​ ​ Obligation ​ Assets ​ status Fair Value at December 25, 2021 ​ $ 761,706 ​ $ 761,170 ​ $ ( 536 ) Employer contributions ​ ​ — ​ ​ 17,155 ​ ​ Interest cost ​ 12,551 ​ — ​ Actual return on plan assets ​ — ​ ( 228,493 ) ​ Benefits paid ​ ( 20,175 ) ​ ( 20,175 ) ​ Actuarial gain ​ ( 248,252 ) ​ — ​ Currency translation ​ ( 70,119 ) ​ ( 69,730 ) ​ Fair Value at December 31, 2022 ​ $ 435,711 ​ $ 459,927 ​ $ 24,216 ​ Actuarial gain decreased the projected benefit obligation resulted from an increase in the discount rate to 4.80 % in 2022 versus 1.90 %. 86 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 31, 2022 and December 25, 2021 consisted of actuarial gains (losses): ​ ​ ​ ​ Balance December 26, 2020 $ ( 165,258 ) Actuarial gain ​ 102,529 Prior service costs amortization ​ 550 Currency translation gain ​ 1,239 Balance December 25, 2021 ​ ( 60,940 ) Actuarial loss ​ ( 2,915 ) Prior service costs amortization ​ 493 Currency translation gain ​ 5,451 Balance December 31, 2022 ​ $ ( 57,911 ) ​ Assumptions — The weighted-average actuarial assumptions used to determine the benefit obligation at December 31, 2022 and December 25, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Percentages 2022 2021 Discount rate 4.80 % ​ 1.90 % Salary increase N/A ​ N/A ​ CPI inflation 2.35 % ​ 2.70 % RPI inflation 3.25 % ​ 3.30 % ​ (19) DEFINED BENEFIT RETIREMENT PLAN – CONTINUED Expense/(Benefit) Pension benefit is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The interest cost component is calculated using the full yield curve approach to estimate the interest cost by applying the specific spot rates along the yield curve used to determine the present value of the benefit plan obligations to relevant cash outflows for the corresponding year. The expected long-term rate of return on plan assets is applied to the fair value of plan assets. Differences in actual experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense. ​ The components of the net periodic pension benefit for the fiscal years ended December 31, 2022 and December 25, 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ Net periodic (benefit) expense: ​ 2022 2021 Interest cost ​ $ 12,551 ​ $ 9,896 Expected return on plan assets ​ ( 23,131 ) ​ ( 27,763 ) Amortization of prior service cost ​ 493 ​ 550 Amortization of actuarial loss ​ — ​ 2,750 Net periodic benefit ​ $ ( 10,087 ) ​ $ ( 14,567 ) ​ 87 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Assumptions — The weighted-average actuarial assumptions used to determine expense are as follows for fiscal years 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ Percentages 2022 ​ 2021 Discount rate for benefit obligations 1.90 % ​ 1.40 % Discount rate for interest cost ​ 1.80 % ​ 1.15 % Expected return on plan assets 3.48 % ​ 3.96 % CPI Inflation 2.70 % ​ 2.00 % RPI Inflation 3.30 % ​ 2.90 % ​ The discount rate is based on the yields of AA-rated corporate bonds with durational periods similar to that of the pension liabilities. The expected return on plan assets is based on the asset allocation mix and the historical return, taking into account current and expected market conditions. The expected return of plan assets decreased from 3.96 % to 3.48 % for 2022 as the investment composition has more liability matching versus return seeking assets. Inflation is based on expected changes in the consumer price index or the retail price index in the U.K. depending on the relevant plan provisions. Cash Contributions The Company completed negotiations with Plan trustees in 2022 regarding annual funding for the Plan. The annual contributions into the Plan are $ 16,000 (/£ 13,100 ) per annum as part of the Plan’s recovery plan, along with a contribution to cover the administrative costs of the Plan of approximately $ 1,600 (/£ 1,300 ) per annum. In December 2020, the Company made its required 2021 annual contribution in addition to the required 2020 annual contribution that was made earlier in fiscal 2020. Benefit Payments The following table details expected pension benefit payments for the years 2023 through 2032: ​ ​ ​ ​ 2023 $ 20,432 2024 ​ 21,036 2025 ​ 21,641 2026 ​ 22,366 2027 ​ 22,970 Years 2028 - 2032 ​ 125,733 ​ ​ 88 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (19) DEFINED BENEFIT RETIREMENT PLAN – CONTINUED Asset Allocation Strategy The investment strategy for pension plan assets is to maintain a diversified portfolio consisting of ● Long-term fixed ‑ income securities that are investment grade or government ‑ backed in nature; ● Common stock mutual funds in U.K. and non-U.K. companies, and ● Diversified growth funds, which are invested in a number of investments, including common stock, fixed income funds, properties and commodities. The Plan, as required by U.K. law, has an independent trustee that sets investment policy. The general strategy is to invest approximately 50 % of the assets of the plan in common stock mutual funds and diversified growth funds, with the remainder of the investments in long-term fixed income securities, including corporate bonds and index-linked U.K. gilts. The trustees regularly consult with representatives of the plan sponsor and independent advisors on such matters. The pension plan investments are held in a trust. The weighted‑average maturity of the corporate bond portfolio was 13 years at December 31, 2022. Fair Value Measurements The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Leveraged Inflation-Linked Gilts (“LDIs”) —LDIs are a combination of U.K. government-backed securities (such as bonds or other fixed income securities issued directly by the U.K. Treasury) money market instruments, and derivatives combined to give leveraged exposure to changes in the U.K. long-term interest and inflation rates. These funds are expected to offset a proportion of the impact changes in the long-term interest and inflation rates in the U.K. have on the pension plan’s benefit plan obligation liability. The fair value recorded by the Plan is calculated using net asset value (“NAV”) for each investment. Temporary Cash Investments —These investments consist of British pound sterling, reported in terms of U.S. dollars based on currency exchange rates readily available in active markets. These temporary cash investments are classified as Level 1 investments. Corporate Bonds —Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment. Corporate Stock —This investment category consists of common and preferred stock, including mutual funds, issued by U.K. and non-U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment. Secured Income Asset (“SIA”) Funds —This investment category consists of holdings which will have a high level of expected inflation linkage. Examples of underlying assets classes are rental streams and infrastructure debt. Due to the private nature of these investments, pricing inputs are not readily observable. Asset valuations are developed by the fund manager. These valuations are based on the application of public market multiples to private company cash flows, market transactions that provide valuation information for comparable companies, and other methods. The fair value recorded by the Plan is calculated using NAV. 89 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (19) DEFINED BENEFIT RETIREMENT PLAN – CONTINUED At December 31, 2022 and December 25, 2021, the pension plan assets measured at fair value on a recurring basis were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in Significant Other Significant ​ ​ ​ ​ Active Markets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ for Identical ​ Inputs ​ Inputs ​ ​ ​ December 31, 2022 ​ Inputs (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Plan assets at fair value: ​ ​ ​ ​ Temporary cash investments ​ $ 5,916 ​ $ — ​ $ — ​ $ 5,916 Total plan net assets at fair value ​ $ 5,916 ​ $ — ​ $ — ​ $ 5,916 Plan assets at NAV: ​ ​ ​ ​ Leveraged inflation-linked gilt funds ​ ​ ​ ​ ​ ​ 206,555 Corporate bonds ​ ​ ​ ​ ​ ​ 63,953 Corporate stock ​ ​ ​ ​ ​ ​ 55,379 Secured income asset funds ​ ​ ​ ​ ​ ​ 128,124 Total plan assets at NAV ​ ​ ​ ​ ​ ​ 454,011 Total plan assets ​ ​ ​ ​ ​ ​ $ 459,927 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in Significant Other Significant ​ ​ ​ ​ Active Markets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ for Identical ​ Inputs ​ Inputs ​ ​ ​ December 25, 2021 ​ Inputs (Level 1) ​ (Level 2) ​ ​ (Level 3) ​ Total Plan assets at fair value: ​ ​ ​ ​ Temporary cash investments ​ $ 14,000 ​ $ — ​ $ — ​ $ 14,000 Total plan net assets at fair value ​ $ 14,000 ​ $ — ​ $ — ​ $ 14,000 Plan assets at NAV: ​ ​ ​ ​ Leveraged inflation-linked gilt funds ​ ​ ​ ​ ​ ​ 283,288 Corporate bonds ​ ​ ​ ​ ​ ​ 107,945 Corporate stock ​ ​ ​ ​ ​ ​ 212,730 Secured income asset funds ​ ​ ​ ​ ​ ​ 143,207 Total plan assets at NAV ​ ​ ​ ​ ​ ​ 747,170 Total plan assets ​ ​ ​ ​ ​ ​ $ 761,170 ​ ​ ​ (20) LEASES The Company has operating leases for plant locations, corporate offices, sales offices, and certain equipment. Outstanding leases at December 31, 2022 have remaining lease terms of one year to twenty-five years , some of which include options to extend leases for up to ten years . The Company does not have any financing leases. The Company elected practical expedients not to reassess whether existing contracts are or contain leases, to not reassess the lease classification of any existing leases, to not reassess initial direct costs for any existing leases, to use hindsight in determining the lease term and in assessing impairment of the right-of-use asset, and to not separate lease and non-lease components for all classes of underlying assets. The Company determines if an arrangement is a lease at inception. Operating leases are included in “Other assets”, “Other accrued expenses”, and “Operating lease liabilities” in the Consolidated Balance Sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make future lease payments arising from the lease. 90 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company used its collateralized incremental borrowing rate in determining the present value of future lease payments. The operating lease ROU asset also includes any lease payments made and excludes any lease incentives and impairments. Some of the Company’s facility leases include options to extend the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company commenced on a new corporate headquarters operating lease with straight-line annual expense of approximately $ 5,100 , a 2 % annual increase in lease payment, and a 25-year term during 2021. In recognition of this lease, an operating lease asset of $ 71,853 and an operating long-term liability of $ 71,196 was recognized. (20) LEASES – CONTINUED Lease cost and other information related to the Company’s operating leases at December 31, 2022 and December 25, 2021 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fifty-three ​ Fifty-two ​ ​ ​ weeks ended ​ weeks ended ​ ​ ​ December 31, ​ December 25, ​ ​ 2022 ​ 2021 ​ Operating lease cost ​ $ 31,062 ​ ​ $ 27,421 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash outflows from operating leases ​ $ 33,150 ​ $ 27,793 ​ ROU assets obtained in exchange for lease obligations ​ $ 27,480 ​ $ 86,481 ​ Weighted average remaining lease term ​ 17 years ​ 17 years ​ Weighted average discount rate ​ 4.2 % ​ 4.0 % ​ ​ Operating lease cost includes approximately $ 1,600 for short-term lease costs and approximately $ 4,400 for variable lease payments in 2022. Supplemental balance sheet information related to operating leases as of December 31, 2022 and December 25, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 25, ​ ​ Classification ​ 2022 ​ 2021 Operating lease assets Other assets ​ $ 162,930 ​ $ 152,664 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease short-term liabilities Other accrued expenses ​ 16,857 ​ 16,754 Operating lease long-term liabilities Operating lease liabilities ​ 155,469 ​ 147,759 Total lease liabilities ​ ​ ​ $ 172,326 ​ $ 164,513 ​ 91 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ Minimum lease payments under operating leases expiring subsequent to December 31, 2022 are as follows: ​ ​ ​ ​ Fiscal year ending: ​ 2023 ​ $ 23,815 2024 ​ 20,689 2025 ​ 19,615 2026 ​ 17,333 2027 ​ 13,924 Subsequent ​ 147,767 Total minimum lease payments ​ $ 243,143 Less: Interest ​ $ 70,817 Present value of minimum lease payments ​ $ 172,326 ​ ​ 92 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (21) BUSINESS SEGMENTS During the first quarter of 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 has realigned to a two reportable segment structure organized by market dynamics (Infrastructure and Agriculture). Three operating 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 distribute products when assessing aggregation of operating segments. The Infrastructure segment includes the previous reportable segments of Utility Support Structures, Engineered Support Structures, and Coatings. All prior period segment information has been recast to reflect this change in reportable segments. The Company has two reportable segments based on its management structure. Each segment is 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 and sales dollars. Reportable segments are as follows: 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 medal products. AGRICULTURE: This segment consists of the manufacture of center pivot components and linear irrigation equipment for agricultural markets, including parts and tubular products, and advanced technology solutions for precision agriculture. In addition to these two reportable segments, the Company had a business and related activities that is not more than 10% of consolidated sales, operating income or assets. This includes the offshore wind energy structures business and was reported in the “Other” segment until its divestiture in 2022. The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its business segments based upon operating income and invested capital. The Company’s operating income for segment purposes excludes unallocated corporate general and administrative expenses, interest expense, non-operating income and deductions, or income taxes. ​ 93 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (21) BUSINESS SEGMENTS – CONTINUED Summary by Business ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 SALES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ ​ $ 2,928,419 ​ $ 2,372,100 ​ $ 2,141,741 Agriculture ​ ​ ​ 1,346,672 ​ ​ 1,028,717 ​ ​ 645,831 Other ​ ​ ​ 100,219 ​ ​ 123,001 ​ ​ 120,063 Total ​ ​ ​ 4,375,310 ​ ​ 3,523,818 ​ ​ 2,907,635 INTERSEGMENT SALES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ ​ ​ ( 18,673 ) ​ ​ ( 10,576 ) ​ ​ ( 6,541 ) Agriculture ​ ​ ​ ( 11,387 ) ​ ​ ( 11,667 ) ​ ​ ( 5,739 ) Other ​ ​ ​ — ​ ​ — ​ ​ — Total ​ ​ ​ ( 30,060 ) ​ ​ ( 22,243 ) ​ ​ ( 12,280 ) NET SALES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ ​ ​ 2,909,746 ​ ​ 2,361,524 ​ ​ 2,135,200 Agriculture ​ ​ ​ 1,335,285 ​ ​ 1,017,050 ​ ​ 640,092 Other ​ ​ ​ 100,219 ​ ​ 123,001 ​ ​ 120,063 Total ​ ​ $ 4,345,250 ​ $ 3,501,575 ​ $ 2,895,355 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING INCOME (LOSS): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ ​ ​ 354,499 ​ ​ 273,598 ​ ​ 217,364 Agriculture ​ ​ ​ 179,263 ​ ​ 137,027 ​ ​ 83,046 Other ​ ​ ​ 2,259 ​ ​ ( 40,192 ) ​ ​ ( 8,192 ) Corporate ​ ​ ​ ( 102,772 ) ​ ​ ( 83,648 ) ​ ​ ( 66,265 ) Total ​ ​ $ 433,249 ​ $ 286,785 ​ $ 225,953 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fifty-three weeks ended December 31, 2022 ​ ​ Infrastructure Agriculture ​ Other Intersegment Sales Consolidated Geographical market: ​ ​ ​ ​ ​ ​ ​ North America ​ $ 2,234,339 ​ $ 766,929 ​ $ — ​ $ ( 26,248 ) ​ $ 2,975,020 International ​ 694,080 ​ 579,743 ​ 100,219 ​ ( 3,812 ) ​ 1,370,230 Total ​ $ 2,928,419 ​ $ 1,346,672 ​ $ 100,219 ​ $ ( 30,060 ) ​ $ 4,345,250 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 1,184,660 ​ $ — ​ $ — ​ $ — ​ $ 1,184,660 Lighting and Transportation ​ 940,462 ​ — ​ — ​ — ​ 940,462 Coatings ​ 356,707 ​ — ​ — ​ ( 15,327 ) ​ 341,380 Telecommunications ​ 320,342 ​ — ​ — ​ — ​ 320,342 Renewable Energy ​ 126,248 ​ — ​ 100,219 ​ ( 3,346 ) ​ 223,121 Irrigation Equipment and Parts, excluding Technology ​ — ​ 1,231,587 ​ — ​ ( 11,387 ) ​ 1,220,200 Technology Products and Services ​ — ​ 115,085 ​ — ​ — ​ 115,085 Total ​ $ 2,928,419 ​ $ 1,346,672 ​ $ 100,219 ​ $ ( 30,060 ) ​ $ 4,345,250 ​ 94 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (21) BUSINESS SEGMENTS – CONTINUED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fifty-two weeks ended December 25, 2021 ​ ​ Infrastructure Agriculture ​ Other Intersegment Sales Consolidated Geographical market: ​ ​ ​ ​ ​ ​ ​ North America ​ $ 1,724,531 ​ $ 545,574 ​ $ — ​ $ ( 22,243 ) ​ $ 2,247,862 International ​ 647,569 ​ 483,143 ​ 123,001 ​ — ​ 1,253,713 Total ​ $ 2,372,100 ​ $ 1,028,717 ​ $ 123,001 ​ $ ( 22,243 ) ​ $ 3,501,575 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 935,099 ​ $ — ​ $ — ​ $ — ​ $ 935,099 Lighting and Transportation ​ 825,923 ​ — ​ — ​ — ​ 825,923 Coatings ​ 309,647 ​ — ​ — ​ ( 10,575 ) ​ 299,072 Telecommunications ​ 238,527 ​ — ​ — ​ — ​ 238,527 Renewable Energy ​ 62,904 ​ — ​ 123,001 ​ — ​ 185,905 Irrigation Equipment and Parts, excluding Technology ​ — ​ 930,858 ​ — ​ ( 11,668 ) ​ 919,190 Technology Products and Services ​ — ​ 97,859 ​ — ​ — ​ 97,859 Total ​ $ 2,372,100 ​ $ 1,028,717 ​ $ 123,001 ​ $ ( 22,243 ) ​ $ 3,501,575 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fifty-two weeks ended December 26, 2020 ​ ​ Infrastructure Agriculture ​ Other Intersegment Sales Consolidated Geographical market: ​ ​ ​ ​ ​ ​ ​ North America ​ $ 1,574,802 ​ $ 378,424 ​ $ — ​ $ ( 12,280 ) ​ $ 1,940,946 International ​ 566,939 ​ 267,407 ​ 120,063 ​ — ​ 954,409 Total ​ $ 2,141,741 ​ $ 645,831 ​ $ 120,063 ​ $ ( 12,280 ) ​ $ 2,895,355 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product line: ​ ​ ​ ​ ​ Transmission, Distribution, and Substation ​ $ 795,693 ​ $ — ​ $ — ​ $ — ​ $ 795,693 Lighting and Transportation ​ 797,335 ​ — ​ — ​ — ​ 797,335 Coatings ​ 276,087 ​ — ​ — ​ ( 6,541 ) ​ 269,546 Telecommunications ​ 186,244 ​ — ​ — ​ — ​ 186,244 Renewable Energy ​ 86,382 ​ — ​ 120,063 ​ — ​ 206,445 Irrigation Equipment and Parts, excluding Technology ​ — ​ 578,686 ​ — ​ ( 5,739 ) ​ 572,947 Technology Products and Services ​ — ​ 67,145 ​ — ​ — ​ 67,145 Total ​ $ 2,141,741 ​ $ 645,831 ​ $ 120,063 ​ $ ( 12,280 ) ​ $ 2,895,355 ​ 95 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 OPERATING INCOME (LOSS): ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ $ 354,499 ​ $ 273,598 ​ $ 217,364 Agriculture ​ 179,263 ​ 137,027 ​ 83,046 Other ​ ​ 2,259 ​ ​ ( 40,192 ) ​ ​ ( 8,192 ) Corporate ​ ( 102,772 ) ​ ( 83,648 ) ​ ( 66,265 ) Total ​ 433,249 ​ 286,785 ​ 225,953 Interest expense, net ​ ( 45,519 ) ​ ( 41,420 ) ​ ( 38,701 ) Loss from divestiture of wind energy structures business ​ ​ ( 33,273 ) ​ — ​ — Other ​ 9,431 ​ 14,718 ​ 5,516 Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries ​ $ 363,888 ​ $ 260,083 ​ $ 192,768 ​ 96 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ (21) BUSINESS SEGMENTS – CONTINUED ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 TOTAL ASSETS: ​ ​ ​ Infrastructure ​ $ 2,267,800 ​ $ 2,102,851 ​ $ 1,933,970 Agriculture ​ 1,112,588 ​ 1,027,272 ​ 465,322 Other ​ ​ — ​ ​ 67,592 ​ ​ 137,316 Corporate ​ 176,608 ​ 249,534 ​ 416,552 Total ​ $ 3,556,996 ​ $ 3,447,249 ​ $ 2,953,160 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 CAPITAL EXPENDITURES: ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure $ 53,228 $ 72,129 $ 81,074 Agriculture ​ 32,886 ​ 17,509 ​ 16,740 Other ​ ​ — ​ ​ 345 ​ ​ — Corporate ​ 7,174 ​ 17,807 ​ 8,886 Total ​ $ 93,288 ​ $ 107,790 ​ $ 106,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 DEPRECIATION AND AMORTIZATION: ​ ​ ​ ​ ​ ​ ​ ​ ​ Infrastructure ​ $ 62,398 ​ $ 59,748 ​ $ 58,985 Agriculture ​ 23,681 ​ 17,813 ​ 12,098 Other ​ ​ 1,393 ​ ​ 5,988 ​ ​ 5,848 Corporate ​ 9,695 ​ 9,028 ​ 5,961 Total ​ $ 97,167 ​ $ 92,577 ​ $ 82,892 ​ Summary by Geographical Area by Location of Valmont Facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 NET SALES: ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 2,965,673 ​ $ 2,260,198 ​ $ 1,919,136 Australia ​ 292,072 ​ 297,720 ​ 252,253 Brazil ​ 354,497 ​ 200,402 ​ 103,591 Denmark ​ 100,219 ​ 123,001 ​ 120,063 Other ​ 632,789 ​ 620,254 ​ 500,312 Total ​ $ 4,345,250 ​ $ 3,501,575 ​ $ 2,895,355 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LONG-LIVED ASSETS: ​ ​ ​ United States ​ $ 1,246,956 ​ $ 1,172,552 ​ $ 748,886 Australia ​ 82,290 ​ 173,240 ​ 179,673 Brazil ​ 42,259 ​ 28,583 ​ 17,151 Denmark ​ — ​ 21,232 ​ 61,546 Other ​ 404,906 ​ 338,879 ​ 391,279 Total ​ $ 1,776,411 ​ $ 1,734,486 ​ $ 1,398,535 ​ 97 Table of Contents Valmont Industries, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Three-year period ended December 31, 2022 (Dollars in thousands, except per share amounts) ​ No single customer accounted for more than 10% of net sales in 2022, 2021, or 2020. Net sales by geographical area are based on the location of the facility producing the sales and do not include sales to other operating units of the Company. Brazil and Australia accounted for approximately 8 % and 7 % of the Company’s net sales in 2022, respectively; no other foreign country accounted for more than 3% of the Company’s net sales. Operating income by business segment are based on net sales less identifiable operating expenses and allocations and includes profits recorded on sales to other operating units of the Company. Long-lived assets consist of property, plant, and equipment, net of depreciation, goodwill, other intangible assets, and other assets. Long-lived assets by geographical area are based on location of facilities. ​ 98 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.