What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-28 · 662 added, 664 removed, 681 unchanged (66% of the section changed)

23 unchanged sentences

Critical Audit Matter Description

The Company has goodwill which is allocated among fourteen reporting units.

The Company evaluates its fourteen 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.

Reporting units are evaluated using projected after-tax cash flows from operations (less capital expenses) discounted to present value.

The Company evaluates goodwill for impairment during the third fiscal quarter of each year, or when events or changes in circumstances indicate the carrying value may not be recoverable.

The Company estimates the fair value of its twelve reporting units with recorded goodwill using a discounted cash flow model which includes projected after-tax cash flows from operations, net of capital expenditures (“projected cash flows”), discounted to their present value.

This valuation method requires management to make significant estimates and assumptions related to projected cash flows and discount rates.

We identified goodwill at the Agriculture Technology, Solar Tracking Structure, and Asia Pacific Access Systems 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 as of September 2, 2023.

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 the projected cash flows and discount rates for these three reporting units.

We identified goodwill at the International Irrigation and Solar reporting units, of approximately $130 million, 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 the International Irrigation and Solar reporting units as of September 1, 2024.

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 the projected cash flows and discount rates for these two reporting units.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the goodwill impairment assessment for the Agriculture Technology, Solar Tracking Structure, and Asia Pacific Access Systems reporting units included the following, among others:

Our audit procedures related to the goodwill impairment assessment for the International Irrigation and Solar reporting units included the following, among others:

● We tested the effectiveness of internal controls over management’s goodwill impairment evaluation, including those over the projected cash flows and discount rates.

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Selling, general, and administrative expenses

Impairment of goodwill and intangible assets

Impairment of goodwill and other intangible assets

Realignment charges

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Interest income

Gain (loss) on investments - unrealized

Gain (loss) on deferred compensation investments

Gain (loss) on divestitures

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Net earnings attributable to Valmont Industries, Inc.

Earnings per share:

Net earnings attributable to Valmont Industries, Inc.

See accompanying Notes to Consolidated Financial Statements.

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Unrealized translation gain (loss)

Realized loss on offshore wind energy structures business recorded in other expense

Realized loss on offshore wind energy structures business included in other expense

Total foreign currency translation adjustments

Hedging activities:

Unrealized gain (loss) on commodity hedges

Realized loss (gain) on commodity hedges recorded in earnings

Unrealized loss on commodity hedges

Realized loss on commodity hedges included in net earnings

Unrealized gain (loss) on cross currency swaps

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Net gain (loss) on defined benefit pension plan

Other comprehensive income (loss), net of tax

Total other comprehensive income (loss), net of tax

Comprehensive income

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Prepaid expenses and other current assets

Refundable income taxes

Total current assets

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Other intangible assets, net

Defined pension benefit asset

Defined benefit pension asset

Other non-current assets

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Common stock of $ 1 par value, authorized 75,000,000 shares;

27,900,000 issued

issued 27,900,000 shares

Retained earnings

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( 1,093,869 )

( 1,043,990 )

Total shareholders’ equity

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Cash flows from operating activities:

Adjustments to reconcile net earnings to net cash flows from operations:

Adjustments to reconcile net earnings to net cash flows from operating activities:

Depreciation and amortization

Contribution to defined benefit pension plan

Impairment of long-lived assets

Impairment of goodwill and other intangible assets

Loss (gain) on divestitures

Stock-based compensation

Defined benefit pension plan cost (benefit)

Loss (gain) on sale of property, plant, and equipment

Net periodic pension cost (benefit)

Loss on sale of property, plant, and equipment

Equity in loss of nonconsolidated subsidiaries

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Accrued expenses

Income taxes payable / refundable

Income taxes payable

Other non-current liabilities

Net cash flows provided by operating activities

Net cash flows from operating activities

Cash flows from investing activities:

Purchase of property, plant, and equipment

Proceeds from divestitures, net of cash divested

Proceeds from sale of assets

Purchases of property, plant, and equipment

Proceeds from divestiture, net of cash divested

Proceeds from sales of assets

Proceeds from property damage insurance claims

Acquisitions, net of cash acquired

Net cash flows used in investing activities

Net cash flows from investing activities

Cash flows from financing activities:

Proceeds from short-term borrowings

Payments on short-term borrowings

Repayments on short-term borrowings

Proceeds from long-term borrowings

Principal payments on long-term borrowings

Principal repayments on long-term borrowings

Proceeds from settlement of financial derivatives

Debt issuance costs

Dividends paid

Dividends to redeemable noncontrolling interests

Purchase of redeemable noncontrolling interests

Purchase of treasury shares

Purchases of redeemable noncontrolling interests

Repurchases of common stock

Proceeds from exercises under stock plans

Tax withholdings on exercises under stock plans

Net cash flows provided by (used in) financing activities

Net cash flows from financing activities

Effect of exchange rate changes on cash and cash equivalents

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Cash and cash equivalents—end of period

Supplemental disclosures of cash flow information:

Interest paid

Income taxes paid

See accompanying Notes to Consolidated Financial Statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND

REDEEMABLE NONCONTROLLING INTERESTS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

AND REDEEMABLE NONCONTROLLING INTERESTS

(Dollars in thousands, except per-share amounts)

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noncontrolling

income (loss)

Balance as of December 25, 2021

Other comprehensive income (loss), net of tax

Cash dividends declared ($ 2.00 per share)

Purchase of treasury shares;

111,833 shares acquired

Stock option and incentive plans

Balance as of December 25, 2021

Other comprehensive loss, net of tax

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Reduction of redeemable noncontrolling interests

Purchase of treasury shares;

Repurchases of common stock;

137,612 shares acquired

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Dividends to redeemable noncontrolling interests

Purchase of treasury shares;

Repurchases of common stock;

1,282,706 shares acquired

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( 1,043,990 )

Other comprehensive loss, net of tax

Cash dividends declared ($ 2.40 per share)

Purchases of redeemable noncontrolling interests

Dividends to redeemable noncontrolling interests

Fair value adjustment on redeemable noncontrolling interests

Repurchases of common stock;

339,973 shares acquired

Stock option and incentive plans

Balance as of December 28, 2024

( 1,093,869 )

See accompanying Notes to Consolidated Financial Statements.

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The Consolidated Financial Statements include the accounts of Valmont Industries, Inc.

and its controlled subsidiaries (the “Company”).

Investments in affiliates and joint ventures through which the Company exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee's activities are accounted for using the equity method.

All intercompany items have been eliminated.

and its controlled subsidiaries (collectively, “Valmont” or the “Company”).

Investments in affiliates and joint ventures, where the Company exercises significant influence but lacks control or is not the primary beneficiary, are accounted for using the equity method.

All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

In preparing the Consolidated Financial Statements in accordance with generally accepted accounting principles, the Company’s management has made various estimates and assumptions.

These estimates affect the reporting of assets and liabilities, the recognition of revenue and expenses, and the disclosure of contingent assets and liabilities.

Actual results may differ from these estimates.

The Company operates on a 52 - or 53 -week fiscal year, with each fiscal year ending on the last Saturday in December.

Accordingly, the Company’s fiscal year ended December 30, 2023 consisted of 52 weeks, the Company’s fiscal year ended December 31, 2022 consisted of 53 weeks, and the Company’s fiscal year ended December 25, 2021 consisted of 52 weeks.

The estimated impact on the Company's results of operations due to the additional week in the fiscal year ended December 31, 2022 was additional net sales of approximately $ 80,800 and additional net earnings of approximately $ 5,300 .

Accordingly, the Company’s fiscal years ended December 28, 2024 and December 30, 2023 each consisted of 52 weeks, while the fiscal year ended December 31, 2022 consisted of 53 weeks.

The additional week in fiscal 2022 contributed approximately $ 80,800 in net sales and approximately $ 5,300 in net earnings to the Company’s results of operations.

Reportable Segments

The Company has two reportable segments based on its management structure.

Each segment is global in nature with a manager responsible for operational performance and allocation of capital.

Reportable segments are as follows:

The Company’s 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, solar, lighting, transportation, and telecommunications, along with coatings services to protect metal products.

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 in fiscal 2022 that were not more than 10% of consolidated sales, operating income, or assets.

This business, the offshore wind energy structures business, was reported in the “Other” segment until its divestiture in the fourth quarter of fiscal 2022.

Cash Overdrafts

Cash book overdrafts totaling $ 19,869 and $ 25,075 were classified as “Accounts payable” in the Consolidated Balance Sheets as of December 30, 2023 and December 31, 2022, respectively.

The Company’s policy is to report the change in book overdrafts as “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

Receivables are reported on the Consolidated Balance Sheets net of any allowance for credit losses.

Allowances are maintained in amounts considered to be appropriate in relation to the outstanding receivables based on the 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 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.

This segment consists of the manufacture and distribution of products and solutions to serve the infrastructure markets of utility, solar, lighting and transportation, and telecommunications, along with coatings services to protect metal products.

This segment consists of the manufacture of center pivot and linear irrigation equipment components for agricultural markets, including aftermarket parts and tubular products, and advanced technology solutions for precision agriculture.

Included in the “Other” segment are the activities of the offshore wind energy structures business, which was divested in the fourth quarter of fiscal 2022.

Cash Book Overdrafts

As of December 28, 2024 and December 30, 2023, cash book overdrafts totaling $ 23,492 and $ 19,869 , respectively, were classified as “Accounts payable” in the Consolidated Balance Sheets.

The Company’s policy is to report changes in book overdrafts as “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

Receivables are reported in the Consolidated Balance Sheets net of any allowances for credit losses.

Allowances are maintained at levels deemed appropriate based on an evaluation of outstanding receivables, considering factors such as the age of the receivables, prevailing economic conditions, and customer credit quality.

As the Company’s international business has expanded, its exposure to potential losses in international markets has also increased.

These exposures are particularly challenging to estimate in politically unstable regions, regions where the Company has limited experience, or regions lacking transparency in governmental credit conditions.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

The following table details the balances of the allowance for credit losses and changes therein:

Balance as of

The following table provides details of the balances of the allowance for credit losses and changes therein:

Fiscal year ended:

Period Balance

December 28, 2024

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December 31, 2022

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 receivable sold are excluded from “Receivables, less allowance” in the Consolidated Balance Sheets, and cash proceeds are reflected in “Cash flows from operating activities” in 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 income (expenses)” in the Consolidated Statements of Earnings.

The Company sells trade accounts receivable at a discount through uncommitted 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 after the transfer.

As of December 28, 2024 and December 30, 2023, the Company sold trade accounts receivable of $ 20,000 and $ 60,000 , respectively.

The fees associated with the trade accounts receivables factoring program are recognized within “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings and were approximately $ 4,500 for the fiscal year ended December 30, 2023.

Inventory is valued at the lower of cost, determined on the first-in, first-out 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.

Transfers of accounts receivable are treated as sales, meaning sold receivables are removed from “Receivables, less allowance” in the Consolidated Balance Sheets.

The cash proceeds from these sales are reflected in “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

The discount, representing the difference between the carrying amount of the trade accounts receivable sold and the cash received, is recorded in “Other income (expenses)” in the Consolidated Statements of Earnings.

Inventory is valued at the lower of cost (determined using the first-in, first-out method) or net realizable value.

Finished and manufactured goods inventories include the cost of acquired raw materials and the related factory labor and overhead charges required to convert raw materials into finished and manufactured 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 - 10 to 30 years , machinery and equipment - 3 to 10 years , transportation equipment - 3 to 10 years , office furniture and equipment - 3 to 7 years , and intangible assets - 2 to 20 years .

Depreciation expense was $ 78,138 , $ 73,938 , and $ 70,223 for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, respectively.

An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds the 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 evaluates its reporting units for impairment of goodwill during the third quarter of each fiscal 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.

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 indefinite‑lived intangible assets 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.

The Company recognized a pre-tax $ 21,415 impairment of property, plant, and equipment in fiscal 2021 when it determined that its offshore wind energy structures business reporting unit would not generate sufficient cash flows to recover the carrying values, recorded as “ Product cost of sales ” in the Consolidated Statements of Earnings.

See Note 8 for details of impairments of goodwill and other intangible assets recognized during the fiscal years ended December 30, 2023 and December 25, 2021.

For financial reporting purposes, the Company primarily uses the straight-line for depreciation and amortization, whereas accelerated methods are applied for income tax purposes.

The estimated useful lives of assets for annual depreciation and amortization are as follows:

● Buildings and improvements:

10 to 30 years

● Machinery and equipment:

3 to 10 years

● Transportation equipment:

3 to 10 years

● Office furniture and equipment:

● Intangible assets:

2 to 20 years .

Depreciation expense for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 was $ 81,181 , $ 78,138 , and $ 73,938 , respectively.

An impairment loss is recognized when an asset’s carrying amount exceeds its recoverable amount, which is determined based on estimated future undiscounted cash flows.

If impaired, the asset’s carrying amount is reduced to its estimated fair value.

The Company evaluates goodwill for impairment annually during the third fiscal quarter or whenever events or circumstances indicate potential impairment.

This assessment includes estimating after-tax operating cash flows (net of capital expenditures) and discounting them to present value.

Indefinite‑lived intangible assets are evaluated separately from goodwill using a relief-from-royalty method as part of the annual impairment testing.

Significant changes in assumptions related to a reporting unit’s goodwill or indefinite‑lived intangible assets may trigger a re-evaluation for potential impairment.

Factors considered in these assessments include recent operating performance, projected future performance, industry conditions, and other relevant indicators.

For details on impairments of goodwill and other intangible assets recognized during fiscal 2023, see Note 7.

VALMONT INDUSTRIES, INC.

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The Company's operating lease right-of-use (“ROU”) assets are included in “Other non-current assets” and the corresponding lease obligations are included in “Other accrued expenses” and “Operating lease liabilities” in the Consolidated Balance Sheets.

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.

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.

The Company calculates deferred income taxes using the asset and liability method.

This method recognizes deferred tax assets and liabilities based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates.

Changes in tax rates affecting deferred tax assets and liabilities are recognized in income in the period in which the tax rate change is enacted.

The Company’s warranty provision represents management’s best estimate of potential liabilities arising from product warranties.

Future warranty costs are estimated and recognized at the time of sale, based on historical claim rates applied to units still under warranty.

Provisions are also recorded for known warranty claims as they arise.

Pension Cost (Benefit)

Certain expenses are incurred in connection with a defined benefit pension plan.

In order to measure the expense and the related benefit obligation, various assumptions are made including discount rates used to value the obligation, the expected return on plan assets used to fund these expenses, and the 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 the pension cost (benefit).

The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resources 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.

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.

The Company incurs expenses related to a defined benefit pension plan.

Key assumptions used to measure the pension expenses and benefit obligations include the discount rate, expected return on plan assets, and estimated future inflation rates.

These assumptions are based on historical experience and current conditions.

An actuarial analysis is performed to measure the expense and liability associated with the pension cost (benefit).

The Company administers stock-based compensation plans that have been approved by its shareholders.

Under these plans, the Human Resources Committee of the Board of Directors is authorized to grant various types of awards, including incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units, and common stock bonuses.

The Company adheres to the guidelines outlined in Accounting Standards Codification 820, Fair Value Measurement (“ASC 820”).

ASC 820 defines fair value, establishes a framework for its measurement, and expands disclosure requirements.

Its provisions also apply to other accounting guidelines that require or allow fair value measurements.

According to ASC 820, fair value is defined as 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 commodity prices.

Where applicable, the Company may elect to account for such derivatives as either a cash flow, fair value, or net investment hedge.

The Company may enter into derivative financial instruments to manage risks associated with fluctuations in interest rates, foreign currency exchange rates, or commodity prices.

When applicable, the Company may designate these derivatives as cash flow, fair value, or net investment hedges.

VALMONT INDUSTRIES, INC.

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Comprehensive Income (Loss)

Comprehensive income (loss) includes net earnings, foreign currency translation adjustments, certain derivative-related activity, and changes in prior service cost from the pension plan.

Results of operations for foreign subsidiaries are translated using the average exchange rates during the period.

Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates.

Accumulated other comprehensive income (loss) (“AOCI”) consisted of the following as of December 30, 2023 and December 31, 2022:

Comprehensive income (loss) consists of net earnings, foreign currency translation adjustments, certain derivative-related activities, and changes in prior service costs and net actuarial losses related to the pension plan.

The results of operations for foreign subsidiaries are translated using average exchange rates for the reporting period, while assets and liabilities are translated at the exchange rates in effect on the balance sheet dates.

As of December 28, 2024 and December 30, 2023, the accumulated other comprehensive income (loss) (“AOCI”) consisted of the following:

Foreign currency translation adjustments

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Revenue Recognition

The Company determines the appropriate revenue recognition model 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 and sale 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 product line and Technology Products and Services product line.

Customer acceptance provisions exist only in the design stage of our products (on a limited basis, the Company may agree to other acceptance terms), and acceptance of the design by the customer is required before manufacturing commences and the product is manufactured and delivered to the customer.

The Company is generally not entitled to any compensation solely based on the design of the product and does not recognize this service as a separate performance obligation, therefore, no revenue is recognized for design services.

No general rights of return exist for customers once the product has been delivered, and the Company establishes provisions for estimated warranties.

Shipping and handling costs associated with sales are recorded within cost of sales.

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 ("TD&S"), Solar, and Telecommunications product lines, 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 one year of transfer of control of goods or services.

Most of the Company’s customers are invoiced upon shipment or delivery of the goods to the customer’s specified location.

Contract assets are recorded as revenue is recognized over time and such contract assets are relieved when the customer is invoiced.

As of December 30, 2023 and December 31, 2022, the Company’s contract assets totaled $ 175,721 and $ 174,539 , respectively.

The Company evaluates each customer contract to determine the appropriate revenue recognition model based on its type, terms, and conditions.

All contracts are fixed price, excluding sales tax from revenue, and do not include variable consideration.

Discounts, primarily for early payments, reduce net sales in the period the sale is recognized.

Contract revenues are classified as “Product sales” when the performance obligation involves manufacturing and selling goods, and as “Service sales” when the performance obligation involves providing a service.

Service revenue is primarily associated with the Coatings product line and the Technology Products and Services product line.

Customer acceptance provisions generally apply only during the design stage, although the Company may agree to other acceptance terms on a limited basis.

Customers must approve the design before manufacturing begins and products are delivered.

The Company does not earn compensation solely for product design and does not consider design services a separate performance obligation;

as such, no revenue is recognized for design services.

Customers do not have general rights of return after delivery, and the Company establishes provisions for estimated warranties.

Shipping and handling costs are included in cost of sales, with freight considered a fulfillment obligation rather than a separate performance obligation.

Freight expenses are recognized proportionally as the structure is manufactured, in line with revenue recognized from the associated customer contract over time.

Except for the Utility, Solar, and Telecommunications product lines, inventory is interchangeable among the various customers within each segment.

The Company has elected not to disclose partially satisfied performance obligations at the end of the reporting period for contracts with an original expected duration of one year or less.

If payment is expected within one year of transferring control of goods or services, the Company does not adjust contract consideration for any significant financing component.

Most customers are invoiced upon shipment or delivery of goods to their specified locations.

Contract assets are recognized as revenue is earned over time and are reduced when the customer is invoiced.

As of December 28, 2024 and December 30, 2023, the Company’s contract assets totaled $ 187,257 and $ 175,721 , respectively, and were recorded as “Contract assets” in the Consolidated Balance Sheets.

Certain customers are invoiced through advance or progress billings.

When the progress toward performance obligations is less than the amount billed to the customer, the excess is recorded as a contract liability.

As of December 28, 2024, total contract liabilities were $ 130,696 , with $ 126,932 recorded as “Contract liabilities” and $ 3,764 as “Other non-current liabilities” in the Consolidated Balance Sheets.

As of December 30, 2023, total contract liabilities of $ 70,978 were recorded as “Contract liabilities” in the Consolidated Balance Sheets.

Additional details are as follows:

● During the fiscal years ended December 28, 2024 and December 30, 2023, the Company recognized $ 53,819 and $ 162,182 in revenue, respectively, from amounts included in contract liabilities as of December 30, 2023 and December 31, 2022.

This revenue reflects advance payments applied to performance obligations completed during the respective periods.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

Certain customers are also invoiced by advanced billings or progress billings.

When progress on performance obligations is less than the amount the customer has been billed, a contract liability is recognized.

As of December 30, 2023, total contract liabilities of $ 70,978 were recorded as “Contract liabilities” in the Consolidated Balance Sheets.

As of December 31, 2022, contract liabilities of $ 172,915 were recorded as “Contract liabilities” and $ 5,616 were recorded as “Other non-current liabilities” in the Consolidated Balance Sheets.

Additional details are as follows:

● During the fiscal years ended December 30, 2023 and December 31, 2022, the Company recognized $ 162,182 and $ 96,373 of revenue that was included in the total contract liability as of December 31, 2022 and December 25, 2021, respectively.

The revenue recognized was due to applying advance payments received for performance obligations completed during the period.

● As of December 30, 2023, the Company had no material remaining performance obligations on contracts with an original expected duration of one year or more.

● As of December 28, 2024, the Company had $ 3,764 in remaining performance obligations on contracts with an original expected duration of one year or more.

These obligations are expected to be fulfilled within the next 12 to 24 months .

Segment and Product Line Revenue Recognition

Infrastructure Segment

Steel and concrete structures within the TD&S and Telecommunications 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 transferred over time, revenue is recognized based on the extent of progress toward completion of the performance obligation.

The selection of the method to measure progress toward completion requires judgment.

For the structures manufactured within the TD&S and Telecommunications 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 complete the order.

The completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of sales, and gross profit.

Production of an order, once started, is typically completed within three months.

Depending on the product sold, revenue from the Solar product line is recognized 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 product line 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 the Lighting and Transportation product line and for the majority of Telecommunications 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.

Some large regional customers 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 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.

Steel and concrete structures within the Utility and Telecommunications product lines are custom engineered to customer specifications.

This customization limits the ability to resell the structures if an order is canceled after production begins.

The continuous transfer of control to the customer is supported by contractual termination clauses or rights to payment for work performed to date, including a reasonable profit, as these products do not have alternative uses for the Company.

As control is transferred over time, revenue is recognized based on progress toward completion of the performance obligation.

The method used to measure progress requires judgment.

Revenue for structures in the Utility and Telecommunications product lines is typically recognized using an input-based method, measuring progress by the ratio of production hours incurred to total estimated hours required.

The resulting completion percentage is applied to the total revenue and estimated costs of the order to determine reported revenue, cost of sales, and gross profit.

Once production begins, orders are generally completed within three months.

Revenue for the Solar product line is recognized upon shipment or delivery, based on contract terms.

In certain Utility product line sales, the Company engages external sales agents and recognizes estimated commissions owed to these agents proportionately as the goods are manufactured.

Revenue from structures sold in the Lighting and Transportation product line, as well as most Telecommunications products, is recognized upon shipment or delivery of goods to the customer, aligning with the billing date.

Some large regional customers may have unique specifications for telecommunication structures.

When a customer contract includes a cancellation clause that requires payment for completed work plus a reasonable margin, revenue is recognized over time based on hours worked as a percentage of the total estimated hours to complete production.

Revenue from Coatings services, including galvanizing and powder coating, is recognized upon service completion and when goods are ready for pickup or delivery.

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 the Technology Products and Services product line are primarily billed annually and revenue is recognized on a straight-line basis over the contract period.

Revenue from irrigation equipment, related parts, services, and tubular products for industrial customers is typically recognized upon shipment, aligning with the billing date.

Remote monitoring subscription services within the Technology Products and Services product line are primarily billed annually, with revenue recognized on a straight-line basis over the contract period.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

The disaggregation of revenue by product line is disclosed in Note 21.

A breakdown by segment of revenue recognized over time and revenue recognized at a point in time for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021 was as follows:

Over Time and Point in Time Revenue

The disaggregation of revenue by product line is provided in Note 20.

A breakdown of revenue recognized over time and at a point in time by segment for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 is as follows:

Fiscal Year Ended

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Total net sales

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 the Consolidated 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 nonconsolidated subsidiaries which are recorded within “Other non-current assets” in the Consolidated Balance Sheets.

The Company has equity method investments in non-consolidated subsidiaries, which are recorded as “Other non-current assets” in the Consolidated Balance Sheets.

Treasury Stock

Repurchased shares are recorded as “Treasury stock, at cost” and result in a reduction of “Shareholders’ equity” in the Consolidated Balance Sheets.

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 that 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.

In February 2023, the Board of Directors increased the amount remaining under the program by an additional $ 400,000 , with no stated expiration date, bringing the total authorization to $ 1,400,000 .

As of December 30, 2023, the Company has acquired 7,895,724 shares for approximately $ 1,263,900 under this share repurchase program.

In November 2023, the Company entered into an accelerated purchase agreement to repurchase $ 120,000 of the Company’s outstanding common stock (“November 2023 ASR”) with CitiBank, N.A.

as counterparty.

The November 2023 ASR was entered into under the Company’s previously announced share repurchase program described above.

In the fourth quarter of fiscal 2023, the Company pre-paid $ 120,000 and received an initial delivery of 438,917 shares of common stock from CitiBank, which represented 75 % of the prepayment amount divided by the closing price of $ 205.05 per share on November 28, 2023.

The final number of shares to be delivered and the average price paid per share will be based on the daily volume weighted average share price during the term of the November 2023 ASR less a discount, which will be completed during the first quarter of fiscal 2024.

When treasury shares are reissued, the Company applies the last-in, first-out method.

Any difference between the repurchase cost and the reissuance price is charged or credited to “Additional paid-in capital” (or “Retained earnings” in the absence of “Additional paid-in capital”).

The Company’s capital allocation philosophy includes a share repurchase program.

In May 2014, the Board of Directors authorized the repurchase of up to $ 500,000 of the Company’s outstanding common stock over a twelve-month period, at prevailing market prices, either through open market or privately negotiated transactions.

The Board subsequently expanded this authorization in February 2015 and October 2018, each time adding $ 250,000 with no expiration date.

In February 2023, the Board increased the program by an additional $ 400,000 , bringing the total authorization to $ 1,400,000 with no expiration date.

As of December 28, 2024, the Company had repurchased 8,235,697 shares for approximately $ 1,333,961 under this program.

Subsequent to year end, on February 18, 2025, the Company announced the Board of Directors increased the amount authorized under the program by an additional $ 700.0 million, with no stated expiration date.

In November 2023, the Company entered into an accelerated share purchase agreement (“November 2023 ASR”) with CitiBank, N.A.

as the counterparty.

The November 2023 ASR was executed under the existing share repurchase program.

The Company prepaid $ 120,000 in the fourth quarter of fiscal 2023 and received an initial delivery of 438,917 shares of common stock.

The agreement was settled in the first quarter of fiscal 2024 with the delivery of an additional 96,224 shares of common stock.

The total number of shares delivered under the November 2023 ASR, at an average purchase price of $ 224.24 per share, was determined based on the volume-weighted average market price of the Company’s common stock during the term of the agreement, less a discount.

Research and Development

Research and development costs are charged to operations in the fiscal year incurred.

These costs are a component of “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings.

During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, research and development costs were approximately $ 55,000 , $ 46,000 , and $ 37,000 , respectively.

Research and development costs are expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings.

For the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, research and development costs were approximately $ 59,000 , $ 55,000 , and $ 46,000 , respectively.

Supplier Finance Program

In fiscal 2019, the Company entered into an agreement with a third-party financial institution to facilitate a supplier finance program.

This program allows qualifying suppliers to sell their receivables from the Company to the financial institution.

These suppliers negotiate directly with the financial institution regarding their outstanding receivables, while the

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Supplier Finance Program

In the first quarter of fiscal 2023, the Company adopted Accounting Standards Update No.

2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations , as well as early adopted the amendment on rollforward information.

During fiscal 2019, the Company entered into an agreement with a third-party financial institution to facilitate a supplier finance program that allows qualifying suppliers to sell their receivables from the Company to the financial institution.

These participating suppliers negotiate their outstanding receivable arrangements directly with the financial institution and the Company’s rights and obligations to suppliers are not impacted.

The Company has no economic interest in a supplier’s decision to enter into these agreements.

Once a qualifying supplier elects to participate in the supplier finance program and reaches an agreement with a financial institution, they elect which individual Company invoices they sell to the financial institution.

The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers to the financial institution on the invoice due date, regardless of whether the individual invoice is sold by the supplier to the financial institution.

The financial institution pays the supplier on the invoice due date for any invoices that were not previously sold under the supplier finance program.

The invoice amounts and scheduled payment terms are not impacted by the suppliers’ decisions to sell amounts under these arrangements.

The payment of these obligations is included in “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

As of December 30, 2023 and December 31, 2022, there were $ 41,916 and $ 48,880 of outstanding payment obligations, respectively, that were sold to the financial institution under the Company’s supplier finance program included in “Accounts payable” in the Consolidated Balance Sheets.

Confirmed obligations outstanding as of December 31, 2022

Invoices confirmed during the period

Confirmed invoices paid during the period

Confirmed obligations outstanding as of December 30, 2023

Company’s rights and obligations to suppliers remain unaffected.

The Company has no economic interest in a supplier’s decision to participate in the program.

Once a supplier opts into the program, they select which individual invoices from the Company to sell to the financial institution.

The Company is obligated to pay the negotiated invoice amount to the financial institution on the due date, regardless of whether the supplier has sold the individual invoice.

For any invoices not sold under the supplier finance program, the financial institution pays the supplier on the invoice’s due date.

The invoice amounts and scheduled payment terms remain unchanged, regardless of whether the supplier decides to sell under these arrangements.

Payments related to these obligations are included in “Cash flows from operating activities” in the Consolidated Statements of Cash Flows.

As of December 28, 2024 and December 30, 2023, outstanding payment obligations of $ 45,602 and $ 41,916 , respectively, were included in “Accounts payable” in the Consolidated Balance Sheets under the Company’s supplier finance program.

Fiscal Year Ended

Confirmed obligations outstanding—beginning of period

Invoices confirmed

Confirmed invoices paid

Confirmed obligations outstanding—end of period

Redeemable Noncontrolling Interests

Subsequent to the issuance of the Company’s Consolidated Financial Statements as of and for the year ended December 31, 2022, the Company identified an error in the presentation of “Noncontrolling interests in consolidated subsidiaries” of $ 60,865 as of December 31, 2022 , $ 26,750 as of December 25, 2021 , and $ 25,774 as of December 26, 2020 , that has been corrected in the current year.

Such amounts were previously reported within “Total shareholders’ equity” and have been revised in the December 31, 2022 Consolidated Balance Sheets and the Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interests to be presented as “Redeemable noncontrolling interests” outside of “Total shareholders’ equity”.

We have evaluated the materiality of this error based on an analysis of quantitative and qualitative factors and concluded it was not material to the prior period financial statements, individually or in aggregate.

Noncontrolling interests with redemption features that are not solely within the Company’s control are considered redeemable noncontrolling interests.

Noncontrolling interests with redemption features that are not solely within the Company’s control are classified as redeemable noncontrolling interests.

The Company has redeemable noncontrolling interests in certain entities.

The seller can require the Company to purchase their remaining ownership, known as a put right, for an amount and on a date specified in the applicable operating agreement.

Likewise, the Company can require the seller to sell the Company their remaining ownership based on the same amount and timing, known as a call option.

As a result of these redemption features, the Company records the noncontrolling interests as redeemable and classifies the balances in temporary equity in the Consolidated Balance Sheets initially at its acquisition-date fair value.

The Company adjusts the redeemable noncontrolling interests each reporting period for the net income (loss) attributable to the noncontrolling interests and any redemption value adjustments.

The redeemable noncontrolling interest is accreted to the future redemption value using the effective interest method up to the date on which the put right becomes effective.

Any accretion adjustment in the current reporting period of the redeemable noncontrolling interest is offset against retained earnings and impacts earnings used in the calculation of earnings per share in the reporting period.

A noncontrolling interest holder can require the Company to purchase their remaining ownership, referred to a put right.

Likewise, the Company can require a noncontrolling interest holder to sell the Company their remaining ownership, known as a call option.

The redemption amount and effective date of these rights vary according to the applicable operating agreements, with some redeemable at fair value and some redeemable at amounts other than fair value.

The Company adjusts the redeemable noncontrolling interests each reporting period for the net income (loss) attributable to the noncontrolling interests and any applicable redemption value adjustments.

Redemption value adjustments are offset against retained earnings.

Earnings used in the computation of earnings per share for the reporting period are impacted by redemption value adjustments for noncontrolling interests redeemable at amounts other than fair value.

As of December 28, 2024 and December 30, 2023, the redeemable noncontrolling interests were $ 51,519 and $ 62,792 , respectively.

The ultimate amount paid for the redeemable noncontrolling interests could be significantly different because the redemption amounts depend on the future results of operations of the businesses.

The final amounts paid for these interests may vary significantly, as the redemption amounts are contingent on the future operational results of the respective businesses.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This update enhances the disclosures about reportable segments, including providing more detailed information on segment expenses.

This guidance is effective for the fiscal year ended December 28, 2024 and for interim periods thereafter.

See Note 20 for the required disclosures associated with this update.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This update is intended to improve transparency and usefulness in income tax disclosures, particularly in areas such as rate reconciliation and reporting of income taxes paid.

The guidance will be effective prospectively for the fiscal year

VALMONT INDUSTRIES, INC.

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Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which improves the disclosures about reportable segments including more detailed information about a reportable segment’s expenses.

This guidance will be effective for the fiscal year ending December 28, 2024 and the interim periods thereafter, with early adoption permitted.

The guidance will have no effect on the Company’s results of operations as the changes are primarily disclosure related.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which enhances the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

This guidance will be effective on a prospective basis for the fiscal year ending December 27, 2025, with early adoption permitted.

The guidance will have no effect on the Company’s results of operations as the changes are primarily disclosure related.

ending December 27, 2025, with early adoption permitted.

The Company does not expect any impact on its results of operations, as the changes primarily relate to enhanced disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This update aims to enhance expense disclosures by providing more detailed information on the types of expenses within commonly presented categories.

The guidance is effective on both a prospective and retrospective basis for the fiscal year ending December 25, 2027, with early adoption permitted.

The Company does not expect any impact on its results of operations, as the changes primarily relate to enhanced disclosures.

(2) ACQUISITIONS

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On August 31, 2023, the Company acquired HR Products for $ 58,044 Australian dollars ($ 37,302 United States (“U.S.”) dollars) in cash, net of cash acquired, and subject to working capital adjustments.

Of this amount, $ 7,200 Australian dollars ($ 4,626 U.S.

dollars) was withheld by the Company at closing as a retention fund, to be settled in two equal payments at 12 and 24 months from the acquisition date for contingencies and disagreements.

HR Products provides a broad range of irrigation products to serve the agriculture and landscaping industries and its operations are reported in the Agriculture segment.

The acquisition strengthens the Company’s value proposition to customers in the key agriculture market of Australia by expanding its geographic footprint and accelerating its aftermarket parts presence.

The amount allocated to goodwill is attributable to anticipated synergies and other intangibles that do not qualify for separate recognition and is no t deductible for tax purposes.

The Company is currently completing its fair value assessment and expects to finalize the purchase price allocation by the third quarter of fiscal 2024.

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

Of the purchase price, $ 7,200 Australian dollars ($ 4,626 U.S.

dollars) was withheld at closing as a retention fund to address contingencies and potential disagreements.

This retention amount will be settled in two equal payments, with the first payment made during the third quarter of fiscal 2024 and the second payment due in the third quarter of fiscal 2025.

HR Products provides a wide range of irrigation products serving the agriculture and landscaping industries, with its operations reported in the Agriculture segment.

This acquisition strengthens the Company’s position in the critical agriculture market of Australia by expanding its geographic footprint and bolstering its aftermarket parts presence.

The acquired customer relationships will be amortized over 13 years .

Goodwill resulting from the acquisition was not tax-deductible and was attributed to anticipated synergies and other intangibles that did not qualify for separate recognition.

The Company finalized the purchase price allocation in the third quarter of fiscal 2024.

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

Current assets

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Current liabilities

Operating lease liabilities

Deferred income taxes

Operating lease liabilities

Total fair value of liabilities assumed

Net assets acquired

On June 1, 2022, the Company acquired approximately 51 % of ConcealFab for $ 39,287 in cash (net of cash acquired).

Approximately $ 1,850 of the purchase price was contingent on seller representations and warranties that were settled in the fourth quarter of fiscal 2023.

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 its advanced Infrastructure portfolio.

Goodwill was 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.

On June 1, 2022, the Company acquired approximately 51 % of ConcealFab, Inc.

for $ 39,287 in cash, net of cash acquired.

Of the purchase price, approximately $ 1,850 was contingent on seller representations and warranties, which were settled in the fourth quarter of fiscal 2023.

ConcealFab is located in Colorado Springs, Colorado, and its operations are included in the Infrastructure segment.

The acquisition allows the Company to integrate innovative 5G infrastructure and passive intermodulation mitigation solutions into its advanced Infrastructure portfolio.

The goodwill resulting from the acquisition was not tax-deductible and was primarily attributed to anticipated synergies and other intangibles that did not qualify for separate recognition.

The Company finalized the purchase price allocation in the first quarter of fiscal 2023.

Under the terms of the operating agreement, the minority owners hold the right to sell their remaining interest in ConcealFab, Inc.

to the Company, and the Company retains the right to purchase the remaining interest from the minority owners.

These rights may generally be exercised at any time following the fifth anniversary of the acquisition’s effective

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Pursuant to the operating agreement and subject to the terms and conditions thereof, the minority owners have the right to sell all of the remaining interest in ConcealFab to the Company, and the Company has the right to purchase all of the remaining interest in ConcealFab from the minority owners, in each case generally at any time following the fifth anniversary of the effective date of the transaction.

The purchase price for any remaining interest put to, or called by, the Company will be determined based on a pre-defined formula as stated in the operating agreement.

As a result of this redemption feature, the Company recorded the noncontrolling interest as redeemable and classified it in temporary equity within the Consolidated Balance Sheets.

See Note 1 for discussion of the Company’s redeemable noncontrolling interests.

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

The purchase price for the remaining interest will be determined based on a predefined formula outlined in the operating agreement.

Due to this redemption feature, the Company recorded the noncontrolling interest as redeemable, and classified it within temporary equity in the Consolidated Balance Sheets.

See Note 1 for further discussion of the Company’s redeemable noncontrolling interests.

The following table summarizes the fair values of the assets acquired and liabilities assumed from ConcealFab, Inc.

as of the date of acquisition:

Current assets

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Net assets acquired

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 was no t deductible for tax purposes, the trade name was assigned an estimated useful life of seven years , and the developed technology asset was assigned an estimated useful life of five years .

The amount allocated to goodwill was primarily attributable to anticipated synergies and other intangibles that did no t qualify for separate recognition.

See Note 8 for details of impairments of goodwill and other intangible assets recognized during the fiscal year ended December 30, 2023.

The Company finalized the purchase price allocation in the fourth quarter of fiscal 2021.

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

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

Current assets

Property, plant, and equipment

Developed technology

Total fair value of assets acquired

Current liabilities

Deferred income taxes

Total fair value of liabilities assumed

Net assets acquired

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 and $ 2,627 for customer relationships, with the remainder representing net working capital.

Goodwill was no t deductible for tax purposes and the customer relationships 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 fiscal 2022.

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 fiscal years presented.

Pro forma disclosures have been omitted, as these acquisitions did not significantly impact the Company’s financial results.

Acquisition-related costs for these transactions were insignificant in all fiscal years presented.

Acquisitions of Redeemable Noncontrolling Interests

Subsequent to fiscal 2023, on January 26, 2024, the Company acquired approximately 9 % of ConcealFab for $ 7,227 .

Additionally, subsequent to fiscal 2023, the minority owner of a consolidated subsidiary exercised their put option to require the Company to purchase their remaining ownership.

As such, $ 10,518 is expected to be paid to acquire the remaining portion of this entity prior to the end of the first quarter of fiscal 2024.

On August 10, 2022, the Company acquired the remaining 9 % of Convert Italia S.p.A.

In the first quarter of fiscal 2024, the Company acquired approximately 9 % of ConcealFab, Inc.

for $ 7,227 and the remaining portion of Valmont Substations, LLC for $ 10,518 .

In the third quarter of fiscal 2022, the Company acquired the remaining 9 % of Convert Italia S.p.A.

for $ 3,046 .

On May 10, 2022, the Company acquired the remaining 20 % of Valmont West Coast Engineering, Ltd.

In the second quarter of fiscal 2022, the Company acquired the remaining 20 % of Valmont West Coast Engineering, Ltd.

for $ 4,292 .

These transactions were for the acquisitions of portions of the remaining shares of consolidated subsidiaries with no changes in control.

These transactions involved acquiring portions of the remaining shares in consolidated subsidiaries, with no changes in control.

(3) DIVESTITURES

On April 30, 2023, the Company completed the sale of Torrent Engineering and Equipment, an integrator of prepackaged pump stations in Indiana, reported in the Agriculture segment, for net proceeds of $ 6,369 .

In the second quarter of fiscal 2023, a pre-tax gain of $ 2,994 was reported in “ Other income (expenses) ” in the Consolidated Statements of Earnings.

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 income, and net assets were not significant for discontinued operations presentation.

On November 25, 2024, the Company completed the sale of George Industries, a coatings and anodizing company in California, which was reported in the Infrastructure segment.

The Company received net proceeds of $ 500 from this sale.

In the fourth quarter of fiscal 2024, a pre-tax loss of $ 2,779 was reported in “ Other income (expenses) ” in the Consolidated Statements of Earnings.

On October 31, 2024, the Company completed the sale of the extractive business, which included the manufacturing and distribution of screening products to the mining and quarrying sectors in Australia and New Zealand, which was reported in the Infrastructure segment.

The Company received net proceeds of $ 5,042 Australian dollars ($ 3,330 U.S.

dollars) from this sale, with an additional $ 1,800 Australian dollars ($ 1,172 U.S.

dollars) to be received through two payments, one in the first quarter of fiscal 2025 and one in the second quarter of fiscal 2026.

In the fourth quarter of fiscal 2024, a pre-tax loss of $ 2,567 Australian dollars ($ 1,695 U.S.

dollars) was reported in “ Other income (expenses) ” in the Consolidated Statements of Earnings.

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The offshore wind energy structures business had an operating income of $ 2,259 for the fiscal year ended December 31, 2022, and an operating loss of $ 40,192 (inclusive of an approximately $ 27,900 impairment of long-lived assets) for the fiscal year ended December 25, 2021.

On April 30, 2023, the Company completed the sale of Torrent Engineering and Equipment Company, LLC, an integrator of prepackaged pump stations in Indiana, which was reported in the Agriculture segment.

The Company received net proceeds of $ 6,369 from this sale.

In the second quarter of fiscal 2023, a pre-tax gain of $ 2,994 was reported in “ Other income (expenses) ” in the Consolidated Statements of Earnings.

On November 30, 2022, the Company completed the sale of Valmont SM, the offshore wind energy structures business in Denmark, which was reported in the Other segment.

The business was sold as it no longer aligned with the Company’s long-term strategic plans.

The historical annual sales, operating income, and net assets of this business were not significant enough to require discontinued operations presentation.

For the fiscal year ended December 31, 2022, the offshore wind energy structures business reported operating income of $ 2,259 .

The Company received 90,000 Danish kroner ($ 12,570 U.S.

dollars) at closing.

An additional 15,000 Danish kroner ($ 2,189 U.S.

dollars) had been held in an escrow account subject to normal closing conditions before it was released to the Company in the first quarter of fiscal 2024.

The assets and liabilities of the offshore wind energy structures business as of closing on November 30, 2022 were as follows:

Cash and cash equivalents

Receivables, net

Contract assets

Prepaid expenses and other current assets

Property, plant, and equipment, net

Other intangible assets, net

Other non-current assets

Accounts payable

Contract liabilities

Other accrued expenses

Deferred income taxes

Total liabilities

Net assets divested

The pre-tax loss from divestiture was reported in “Other income (expenses)” in the Consolidated Statements of Earnings for the fiscal year ended December 31, 2022.

The loss was comprised of the proceeds and an asset recognized for the escrow funds not at the time released from the 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 was a $ 21,150 realized loss on foreign exchange translation adjustments and net investment hedges previously reported in “Shareholders’ equity” in the Consolidated Balance Sheets.

dollars) at closing, with an additional 15,000 Danish kroner ($ 2,189 U.S.

dollars) held in escrow.

This escrow amount, subject to standard closing conditions, was released to the Company in the first quarter of fiscal 2024.

The pre-tax loss from the divestiture was reported in “Other income (expenses)” in the Consolidated Statements of Earnings for the fiscal year ended December 31, 2022.

This loss included the proceeds received, an asset recognized for the escrow funds that had not yet been released by the buyer, deal-related costs, and the net assets of the business.

As a result, the total loss was $ 12,123 .

Additionally, the Company recognized a $ 21,150 realized loss on foreign exchange translation adjustments and net investment hedges, which had previously been reported in “Shareholders’ equity” in the Consolidated Balance Sheets.

Pre-tax loss from divestitures, before recognition of currency translation loss

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(4) REALIGNMENT ACTIVITIES

During the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the Company and reduce costs through an organizational realignment program (the “Realignment Program”).

The Realignment Program provided for a reduction in force through a voluntary early retirement program and other headcount reduction actions, which were completed as of December 30, 2023.

In the third quarter of fiscal 2023, management initiated a plan to streamline segment support across the Company and reduce costs through an organizational realignment program (the “Realignment Program”).

The Realignment Program included a reduction in force through a voluntary early retirement program and other headcount reduction actions, all of which were completed as of December 30, 2023.

The Board of Directors authorized the incurrence of cash charges up to $ 36,000 in connection with the Realignment Program.

During the fiscal year ended December 30, 2023, the Company recorded the following pre-tax expenses for the Realignment Program:

During the fiscal year ended December 30, 2023, the Company recorded the following pre-tax expenses related to the Realignment Program:

Infrastructure

Severance and other employee benefit costs

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Changes in liabilities recorded for the Realignment Program were as follows:

3 unchanged sentences

Severance and other employee benefit costs

(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 fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021 were as follows:

Fiscal Year Ended

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

(5) INVENTORIES

Inventories as of December 30, 2023 and December 31, 2022 consisted of the following:

As of December 28, 2024 and December 30, 2023, inventories consisted of the following:

Raw materials and purchased parts

Work in process

Finished goods and manufactured goods

Finished and manufactured goods

Total inventories

(6) PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment, at cost, as of December 30, 2023 and December 31, 2022 consisted of the following:

As of December 28, 2024 and December 30, 2023, property, plant, and equipment, at cost, consisted of the following:

Land and improvements

5 unchanged sentences

Total property, plant, and equipment, at cost

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(8) GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill by segment as of December 30, 2023 and December 31, 2022 was as follows:

(7) GOODWILL AND OTHER INTANGIBLE ASSETS

As of December 28, 2024 and December 30, 2023, the carrying amounts of goodwill by segment were as follows:

Infrastructure

2 unchanged sentences

Balance as of December 30, 2023

Acquisition measurement period adjustment

Foreign currency translation

6 unchanged sentences

Balance as of December 30, 2023

In the third quarter of fiscal 2023, the Company performed its annual goodwill impairment assessment utilizing a quantitative test on all of its reporting units using a measurement date of September 2, 2023.

The fair values of the reporting units were estimated using a discounted cash flow analysis which requires the Company to estimate the future cash flows as well as select a risk-adjusted discount rate to measure the present value of the anticipated cash flows.

The carrying value for two of the reporting units, Agriculture Technology and India Structures, exceeded their respective estimated fair value.

As a result, impairments of $ 120,000 and $ 1,915 were recognized in the Agriculture and Infrastructure segments, respectively, and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.

For the Agriculture Technology reporting unit, the recent less favorable outlook for the agriculture market in North America and the slower-than-expected adoption rate of the agronomy software solution led to a reduction in forecasted sales.

These reduced forecasted cash flows resulted in a lower fair value of the Agriculture Technology reporting unit when discounted back to the present value.

For the India Structures reporting unit, assumptions around future cash flows including working capital requirements resulted in the impairment of its goodwill.

Intangible Assets

The components of intangible assets as of December 30, 2023 and December 31, 2022 were as follows:

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

In the third quarter of fiscal 2024, the Company conducted its annual goodwill impairment assessment using a quantitative test for all reporting units, with a measurement date of September 1, 2024.

The fair values of the reporting units were estimated using a discounted cash flow analysis, which required projecting future cash flows and applying a risk-adjusted discount rate to determine the present value of the expected cash flows.

The analysis indicated that the estimated fair values of all reporting units exceeded their respective carrying amounts, and no impairment was recorded for fiscal 2024.

In the third quarter of fiscal 2023, the Company recognized impairment charges of $ 120,000 and $ 1,915 in the Agriculture and Infrastructure segments, respectively, resulting from the Company’s annual goodwill impairment assessment as of September 2, 2023.

Other Intangible Assets

As of December 28, 2024 and December 30, 2023, the components of other intangible assets were as follows:

December 28, 2024

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Customer relationships

Patents & proprietary technology

Patents and proprietary technology

Non-amortizing intangible assets:

The weighted-average remaining life of amortizing intangible assets is approximately four years .

Amortization expenses for fiscal years 2024, 2023, and 2022 were $ 14,214 , $ 19,455 , and $ 22,120 , respectively.

Amortization expense is expected to average $ 9,857 annually over the next five fiscal years, based on amortizing intangible assets reported as of December 28, 2024.

The Company’s indefinite-lived trade names were assessed for impairment as of September 1, 2024, using the relief-from-royalty method.

Based on this evaluation, no impairments were identified for these trade names.

In the third quarter of fiscal 2023, the Company recognized an impairment charge of $ 1,656 in the Infrastructure segment as a result of the Company’s annual indefinite-lived trade name impairment assessment as of September 2, 2023.

Additionally, in the third quarter of fiscal 2023, the Company recognized an impairment charge of $ 17,273 in the Agriculture segment for a certain amortizing proprietary technology intangible asset related to the Prospera subsidiary.

(8) BANK CREDIT ARRANGEMENTS

The Company maintains various lines of credit for short-term borrowings, with a total available balance of $ 30,895 as of December 28, 2024.

As of December 28, 2024 and December 30, 2023, $ 1,669 and $ 3,205 were outstanding, respectively, and recorded as “Notes payable to banks” in the Consolidated Balance Sheets.

The interest rates on these lines of credit vary based on the banks’ cost of funds.

The weighted average interest rate on short-term borrowings was 8.14 % as of December 28, 2024.

The unused and available borrowings under these lines of credit totaled $ 29,945 as of December 28, 2024.

The banks may modify the terms of these lines of credit, with the Company’s approval.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

Amortizing intangible assets carry a remaining weighted average life of approximately four years .

Amortization expense was $ 19,455 , $ 22,120 , and $ 21,320 for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, respectively.

Based on amortizing intangible assets recognized in the Consolidated Balance Sheets as of December 30, 2023, amortization expense is estimated to average $ 11,158 for each of the next five fiscal years.

The Company’s indefinite-lived trade names were tested for impairment as of September 2, 2023.

The values of each trade name were determined using the relief-from-royalty method.

Based on this evaluation, the carrying value of one trade name exceeded its estimated fair value.

An impairment charge of $ 1,656 was recognized within the Infrastructure segment and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.

In 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 $ 2,013 was recognized against the related trade name and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.

In the third quarter of fiscal 2023, the Company tested the recoverability of a certain amortizing proprietary technology intangible asset related to Prospera included within the Agriculture Technology reporting unit due to identified impairment indicators.

The Company determined the carrying value of the asset exceeded the total undiscounted estimated future cash flows and reduced the asset to its fair value.

An impairment charge of $ 17,273 was recognized within the Agriculture segment and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.

In 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 $ 4,483 was recognized against the remaining net book value of the related customer relationships and recorded as “Impairment of goodwill and intangible assets” in the Consolidated Statements of Earnings.

(9) BANK CREDIT ARRANGEMENTS

The Company maintains various lines of credit for short-term borrowings totaling $ 39,336 available as of December 30, 2023.

As of December 30, 2023 and December 31, 2022, $ 3,205 and $ 5,846 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 5.16 % as of December 30, 2023.

The unused and available borrowings under the lines of credit were $ 36,131 as of December 30, 2023.

The lines of credit can be modified at any time at the option of the banks.

(9) INCOME TAXES

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Earnings before income taxes and equity in loss of nonconsolidated subsidiaries

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Income tax expense (benefit) for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 consisted of:

1 unchanged sentence

Total current income tax expense

Total deferred income tax expense (benefit)

Total deferred income tax benefit

Total income tax expense

6 unchanged sentences

Changes in unrecognized tax benefits

Impairment of long-lived assets

Impairment of goodwill and other intangible assets

Excess tax benefit on equity compensation

Loss from divestiture of offshore wind energy structures business

Loss on divestitures

Effective tax rate

The fiscal year ended December 30, 2023 included $ 28,079 of tax expense related to non-tax deductible impairment of goodwill.

The fiscal year ended December 30, 2023 included $ 28,079 of tax expense related to non-tax deductible goodwill impairment.

The fiscal year ended December 31, 2022 included $ 8,166 of tax expense related to the divestiture of the offshore wind energy structures business for which no benefit was recorded.

The fiscal year ended December 25, 2021 included $ 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.

VALMONT INDUSTRIES, INC.

21 unchanged sentences

Total deferred income tax liabilities

Net deferred income tax assets (liabilities)

Deferred income tax assets (liabilities) were presented as follows as of December 30, 2023 and December 31, 2022 in the Consolidated Balance Sheets:

Net deferred income tax assets

Deferred income tax assets (liabilities) were presented in the Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023 as follows:

Other non-current assets

Deferred income taxes

Net deferred income tax assets (liabilities)

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 fiscal years and available tax planning strategies.

As of December 30, 2023 and December 31, 2022, respectively, there were $ 58,519 and $ 67,249 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, the Company recorded a valuation allowance of $ 6,472 against the tax attributes related to the acquisition of Prospera.

The deferred tax assets as of December 30, 2023 that are associated with tax loss and tax credit carryforwards not reduced by valuation allowances expire in periods starting in 2024.

Uncertain tax positions included in “Other non-current liabilities” in the Consolidated Balance Sheets 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.

Net deferred income tax assets

The Company’s management has reviewed recent operating results and projected future results, concluding that the realization of its net deferred tax assets is more likely than not.

This assessment is based on, among other factors, recent operational changes and available tax planning strategies.

As of December 28, 2024 and December 30, 2023, the amounts related to tax credits and loss carryforwards were $ 56,180 and $ 58,519 , respectively.

Valuation allowances have been recorded for specific losses, reducing deferred tax assets to an amount that is more likely than not realizable.

Deferred tax assets as of December 28, 2024 related to tax loss and tax credit carryforwards not reduced by valuation allowances are set to expire beginning in 2025.

Uncertain tax positions, included in “Other non-current liabilities” in the Consolidated Balance Sheets, are evaluated in a two-step process.

First, the Company determines whether it is more likely than not that the tax positions will be sustained based on their technical merits.

Second, for positions that meet this threshold, the Company recognizes the largest amount of tax benefit that is more than fifty percent likely to be realized upon settlement with the relevant tax authority.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

The following summarizes the activity related to the unrecognized tax benefits for the fiscal years ended December 30, 2023 and December 31, 2022:

The following summarizes the activity related to unrecognized tax benefits for the fiscal years ended December 28, 2024 and December 30, 2023:

Fiscal Year Ended

Gross unrecognized tax benefits—beginning of period

Gross increases—tax positions in prior period

Gross increases—current‑period tax positions

Gross increases from tax positions in prior period

Gross increases from current‑period tax positions

Settlements with taxing authorities

1 unchanged sentence

Gross unrecognized tax benefits—end of period

There are approximately $ 1,514 of uncertain tax positions for which reversal is reasonably possible during the next 12 months due to the closing of the statutes of limitation.

The nature of these uncertain tax positions is generally the computation of a tax deduction or a tax credit.

During the fiscal year ended December 30, 2023, the Company recorded a reduction of its gross unrecognized tax benefit of $ 742 , with $ 586 recorded as a reduction of income tax expense, due to the expiration of statutes of limitation in the U.S.

During the fiscal year ended December 31, 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 U.S.

In addition to these amounts, there was an aggregate of $ 442 and $ 172 of interest and penalties as of December 30, 2023 and December 31, 2022, respectively.

There are approximately $ 1,747 of uncertain tax positions for which reversal is reasonably possible within the next 12 months due to the closing of statutes of limitation.

Accrued interest and penalties amounted to $ 383 and $ 442 as of December 28, 2024 and December 30, 2023, 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 2020 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 $ 4,372 and $ 2,447 as of December 30, 2023 and December 31, 2022, respectively.

The Organisation for Economic Co-operation and Development (“OECD”) has released the Pillar Two Model Rules Framework (the “Framework”) defining the global minimum tax rules, which contemplate a minimum tax rate of 15% and continues to release additional guidance.

Although it is uncertain whether the U.S.

will enact legislation to adopt the minimum tax directive, certain countries in which the Company operates have adopted legislation effective January 1, 2024, and other countries are in the process of introducing legislation to implement the minimum tax directive.

Further, the OECD issued administrative guidance providing transition and safe harbor rules that could delay the impact of the minimum tax directive.

The Company will continue to monitor the implementation of the Framework by the countries in which the Company operates.

The Company does not expect the Framework to have a material impact on its Consolidated Financial Statements.

The Company files income tax returns in the U.S., various states, and foreign jurisdictions.

tax years from 2021 onward remain open under statutes of limitation.

The total unrecognized tax benefits that, if recognized, would affect the effective tax rate were $ 2,993 and $ 4,372 as of December 28, 2024 and December 30, 2023, respectively.

The Organisation for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15%, effective January 1, 2024.

While the U.S.

has not enacted legislation to adopt Pillar Two, certain countries in which the Company operates have implemented it, while others are in the process of doing so.

Pillar Two had no material impact on the Company’s fiscal 2024 effective tax rate, and the Company does not currently expect it to have a significant impact going forward.

(10) LONG-TERM DEBT

8 unchanged sentences

Long-term debt, excluding current installments

(a) The 5.00 % senior unsecured notes due in fiscal 2044 have an aggregate principal amount of $ 450,000 , with an unamortized discount balance of $ 12,168 as of December 28, 2024.

These notes bear interest at 5.00 % per annum and are due on October 1, 2044.

The discount will be amortized and recognized as interest expense over the term of the notes as interest payments are made.

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 interest.

These notes are guaranteed by certain subsidiaries of the Company.

(b) The 5.25 % senior unsecured notes due in fiscal 2054 have an aggregate principal amount of $ 305,000 , with an unamortized discount balance of $ 7,071 as of December 28, 2024.

These notes bear interest at 5.25 % per annum and are due on October 1, 2054.

The discount will be amortized and recognized as interest expense over the term of the notes as interest payments are made.

The notes may be repurchased prior to maturity, in whole or in part, at any time

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

(a) The 5.00 % senior unsecured notes due in fiscal 2044 include an aggregate principal amount of $ 450,000 on which interest is paid and an unamortized discount balance of $ 12,503 as of December 30, 2023.

The notes bear interest at 5.00 % 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.

(b) The 5.25 % senior unsecured notes due in fiscal 2054 include an aggregate principal amount of $ 305,000 on which interest is paid and an unamortized discount balance of $ 7,162 as of December 30, 2023.

The notes bear interest at 5.25 % 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.

at 100 % of their principal amount, plus a make-whole premium and accrued interest.

These notes are guaranteed by certain subsidiaries of the Company.

1 unchanged sentence

and Valmont Group Pty.

Ltd., as borrowers, entered into an amendment and restatement of the revolving credit agreement with the Company’s lenders.

Ltd., as borrowers, amended and restated 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 Secured Overnight Financing Rate (“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 S&P Global Ratings and Moody’s Investors Service, Inc.;

This facility provides for $ 800,000 in committed unsecured revolving credit loans, with available borrowings of up 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 agreeing to increase their commitments.

The interest rate on the borrowings will be, at the Company’s option:

(i) the term Secured Overnight Financing Rate (“SOFR”) (based on a one-, three-, or six-month interest period, as selected by the Company) plus a 10 -basis-point adjustment and 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 S&P Global Ratings and Moody’s Investors Service, Inc.;

(ii) the higher of

3 unchanged sentences

plus, in each case, 0 to 62.5 basis points, depending on the credit rating of the Company’s senior unsecured long-term debt published by S&P Global Ratings and Moody’s Investors Service, Inc.;

(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 S&P Global Ratings and Moody’s Investors Service, Inc.

As of December 30, 2023, the Company had $ 377,899 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.

As of December 30, 2023, the Company had the ability to borrow $ 421,939 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 $ 39,336 , of which $ 36,131 were unused as of December 30, 2023.

The revolving credit facility includes a financial leverage covenant.

The Company was in compliance with this covenant as of December 30, 2023.

The minimum aggregate maturities of long-term debt for each of the five fiscal years following the fiscal year ended December 30, 2023 are $ 719 ;

The obligations arising under the 5.00 % senior unsecured notes due in fiscal 2044, the 5.25 % senior unsecured notes due in fiscal 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.

(iii) daily simple SOFR plus a 10 -basis-point adjustment and 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 S&P Global Ratings and Moody’s Investors Service, Inc.

As of December 28, 2024, the Company had no outstanding borrowings under its revolving credit facility.

This facility has a maturity date of October 18, 2026 and includes a financial covenant that may limit the ability to borrow additional funds under the agreement.

As of December 28, 2024, the Company could borrow $ 799,838 under the facility, after accounting for standby letters of credit totaling $ 162 related to certain insurance obligations.

The Company also maintains short-term bank lines of credit totaling $ 30,895 , of which $ 29,226 remained unused as of December 28, 2024.

The revolving credit facility includes a financial leverage covenant, with which the Company was in compliance as of December 28, 2024.

The minimum aggregate maturities of long-term debt for each of the five fiscal years following the fiscal year ended December 28, 2024 are as follows:

$ 692 , $ 512 , $ 42 , $ 0 , and $ 0 .

The obligations under the 5.00 % senior unsecured notes due in fiscal 2044, the 5.25 % senior unsecured notes due in fiscal 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.

(11) STOCK-BASED COMPENSATION

The Company maintains stock‑based compensation plans approved by its shareholders, which allow the Human Resources Committee of the Board of Directors to grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units, and bonuses of common stock.

As of December 28, 2024, 1,426,995 shares of common stock remained available for issuance under the plans.

The shares and options issued and available are subject to changes in capitalization.

The Company’s policy is to issue shares upon the exercise of stock options, the vesting of restricted stock units, or the issuance of restricted stock from treasury shares held by the Company.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

(12) STOCK-BASED COMPENSATION

The Company maintains stock‑based compensation plans approved by the shareholders, which provide that the Human Resources 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.

As of December 30, 2023, 1,513,652 shares of common stock remained available for issuance under the plans.

Shares and options issued and available are subject to changes in 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.

Stock options granted under the plans call for the exercise price of each option to equal the closing market price as of the date of the grant.

Options vest beginning on the first anniversary of the grant date in equal amounts over three years or on the grant’s fifth anniversary date.

Expiration of grants is seven to ten years from the date of the award.

Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant.

For the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company recorded $ 39,219 , $ 41,850 , and $ 28,720 of compensation expense (included in “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings) for all share-based compensation programs, respectively.

The associated tax benefits recorded for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, were $ 7,092 , $ 10,463 , and $ 7,180 , respectively.

As of December 30, 2023, the amount of unrecognized stock option compensation expense, to be recognized over a weighted average period of 2.00 years, was approximately $ 6,408 .

For the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, the Company recorded stock-based compensation expenses of $ 29,869 , $ 39,219 , and $ 41,850 , respectively, included in “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings.

The associated tax benefits recorded for these periods were $ 3,412 , $ 7,092 , and $ 10,463 , respectively.

Stock Options

Stock options granted under the plans have an exercise price equal to the closing market price on the date of the grant.

Options vest beginning on the first anniversary of the grant date, with equal amounts vesting over three years or on the grant’s fifth anniversary.

The expiration of grants ranges from seven to ten years from the date of the award.

Restricted stock units and awards typically vest in equal installments over three or four years , beginning on the first anniversary of the grant.

As of December 28, 2024, approximately $ 5,213 of unrecognized stock option compensation expense will be recognized over a weighted-average period of 1.93 years.

During the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, compensation expense for stock options was $ 2,252 , $ 3,687 , and $ 3,120 , respectively.

5 unchanged sentences

Dividend yield

The following is a summary of the stock option activity during the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021:

The following is a summary of the stock option activity for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022:

Outstanding as of December 30, 2023

2 unchanged sentences

Options exercisable as of December 28, 2024

The weighted average per share fair value of options granted during the fiscal year ended December 31, 2024 was $ 107.27 .

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

The weighted average per share fair value of options granted during the fiscal year ended December 31, 2023 was $ 72.60 .

Outstanding as of December 31, 2022

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The weighted average per share fair value of options granted during the fiscal year ended December 31, 2022 was $ 104.01 .

In accordance with shareholder-approved plans, the Human Resources 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 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

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.

During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, 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):

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

During the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, the Company granted restricted stock units to directors and certain management employees as follows:

Fiscal Year Ended

2 unchanged sentences

Recognized compensation expense

During the second half of fiscal 2021, the Company granted 159,982 restricted stock units, worth $ 36,916 , to certain employees of Prospera, of which 50,141 remain outstanding as of December 30, 2023.

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.

As of December 28, 2024, the amount of deferred stock‑based compensation granted, to be recognized over a weighted‑average period of 1.66 years, was approximately $ 27,879 .

Performance-based restricted stock units (“PSUs”) awards consist of shares of the Company’s stock which are payable upon the determination that the Company achieves certain established performance targets and can range from 0 % to 200 % of the targeted payout based on the actual results.

PSUs granted in the fiscal years ended December 30, 2023 and December 31, 2022 have a performance period of three years .

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

Performance Stock Units (“PSUs”)

PSUs consist of shares of the Company’s stock, payable upon the determination that the Company has achieved certain established performance targets.

PSUs can range from 0 % to 200 % of the targeted payout based on actual results over 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-year 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.

During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company granted PSU awards as follows (which are not included in the above stock plan activity tables):

PSUs generally have a three-year cliff-vesting schedule;

however, according to the grant agreements, if certain conditions are met, the employee (or beneficiary) will receive a prorated amount based on active employment during the service period.

During the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, the Company granted PSU awards as follows:

Fiscal Year Ended

3 unchanged sentences

(12) EARNINGS PER SHARE

The following table provides a reconciliation between the earnings and average share amounts used to compute both basic and diluted earnings per share:

The table below provides a reconciliation between the earnings and average share amounts used to compute both basic and diluted earnings per share:

Fiscal Year Ended

Net earnings attributable to Valmont Industries, Inc.

including change in redemption value of redeemable noncontrolling interest:

including change in redemption value of redeemable noncontrolling interests:

Net earnings attributable to Valmont Industries, Inc.

Change in redemption value of redeemable noncontrolling interest

Change in redemption value of redeemable noncontrolling interests

Net earnings attributable to Valmont Industries, Inc.

including change in redemption value of redeemable noncontrolling interest

Weighted average shares outstanding (000s):

including change in redemption value of redeemable noncontrolling interests

Weighted average shares outstanding (in thousands):

Dilutive effect of various stock awards

Net earnings per share attributable to common shareholders:

Net earnings attributable to Valmont Industries, Inc.

Dilutive effect of various stock awards

For the fiscal year ended December 30, 2023, basic and diluted net earnings and earnings per share were impacted by the impairment of goodwill and other intangible assets of $ 136,457 after tax ($ 6.45 per share) and realignment charges of $ 26,490 after tax ($ 1.25 per share).

For the fiscal year ended December 31, 2022, basic and diluted net earnings and earnings per share were impacted by a loss from the divestiture of the offshore wind energy structures business of $ 33,273 with no associated tax benefit ($ 1.54 per share).

As of December 28, 2024, December 30, 2023, and December 31, 2022, there were 44,620 ;

and 40,564 outstanding stock options, respectively, with exercise prices exceeding the average market price of common stock during the applicable periods.

These options were excluded from the computation of diluted earnings per share.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

Basic and diluted net earnings and earnings per share in the fiscal year ended December 30, 2023 were impacted by the impairment of certain long-lived assets of $ 136,457 after-tax ($ 6.45 per share) and realignment charges of $ 26,490 after-tax ($ 1.25 per share).

Basic and diluted net earnings and earnings per share in the fiscal year ended December 31, 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 the fiscal year ended December 25, 2021 were impacted by impairments of long-lived assets 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).

As of December 30, 2023, December 31, 2022, and December 25, 2021, there were 127,774 ;

and 47,223 outstanding stock options with exercise prices exceeding the average market price of common stock during the applicable period that were excluded from the computation of diluted earnings per share, respectively.

(13) 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 their 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 Company’s contributions to these plans for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, amounted to approximately $ 20,000 , $ 18,300 , and $ 16,000 , 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 $ 26,803 and $ 25,008 as of December 30, 2023 and December 31, 2022, respectively.

Such amounts are included in “Other non-current assets” and “Deferred compensation” in the Consolidated Balance Sheets.

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 $ 5,476 and $ 4,691 as of December 30, 2023 and December 31, 2022, respectively.

Participants may elect to contribute up to 75 % of their annual eligible compensation on either a pre-tax or after-tax basis, subject to certain Internal Revenue Code limitations.

The Company also sponsors a fully funded, non-qualified deferred compensation plan for certain executives who would otherwise be limited in receiving contributions into the VERSP under Internal Revenue Service regulations.

As of December 28, 2024 and December 30, 2023, the invested assets and related liabilities for these participants were $ 27,379 and $ 26,803 , respectively.

These amounts are included in “Other non-current assets” and “Deferred compensation” in the Consolidated Balance Sheets.

Distributions from the Company’s non-qualified deferred compensation plan to participants, made under the transition rules of Section 409A of the Internal Revenue Code, totaled $ 5,467 and $ 5,476 for the fiscal years ended December 28, 2024 and December 30, 2023, respectively.

All distributions were made in cash.

The Company contributes to both the VERSP and the non-qualified deferred compensation plan for certain executives.

The Company’s contributions to these plans for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, were approximately $ 19,100 , $ 20,000 , and $ 18,300 , respectively.

(14) FAIR VALUE MEASUREMENTS

The carrying amounts 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.

The fair value estimates are made at a specific point in time and the underlying assumptions are subject to change based on market conditions.

Unless otherwise specified, the carrying amounts of cash and cash equivalents, receivables, accounts payable, notes payable to banks, and accrued expenses approximate fair value due to the short maturity of these instruments.

The fair values of the Company’s long-term debt instruments are based on future cash flows associated with each instrument, discounted using the Company’s current borrowing rate for similar debt instruments of comparable maturities.

Fair value estimates are made at a specific point in time, and the underlying assumptions may change based on market conditions.

As of December 28, 2024, the carrying amount of the Company’s long-term debt was $ 730,633 with an estimated fair value of approximately $ 692,877 .

As of December 30, 2023, the carrying amount of the Company’s long-term debt was $ 1,108,604 with an estimated fair value of approximately $ 1,064,916 .

ASC 820 establishes a three‑level hierarchy for fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date used.

ASC 820 establishes a three‑level hierarchy for fair value measurements, which is based on the transparency of inputs used to value an asset or liability as of the measurement date.

Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

3 unchanged sentences

Unobservable inputs for the asset or liability.

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

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

The following are descriptions of the valuation methodologies used for assets and liabilities measured at fair value:

Trading Securities:

The Company’s trading securities represent the investments held in the Valmont Deferred Compensation Plan (the “DCP”).

As of December 30, 2023 and December 31, 2022, the assets of the DCP were $ 26,803 and $ 25,008 , respectively.

These assets 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.

Quoted market prices are available for these securities in an active market and therefore are categorized as Level 1 inputs.

These securities are included in “Other non-current assets” in the Consolidated Balance Sheets.

The following are the valuation methodologies used for assets and liabilities measured at fair value:

Deferred Compensation Investments:

The Company’s deferred compensation investments include mutual funds invested in debt and equity securities in the Valmont Deferred Compensation Plan.

Quoted market prices are available for these securities in an active market.

The investments are included in “Other non-current assets” in the Consolidated Balance Sheets.

Derivative Financial Instruments:

2 unchanged sentences

The Company has short-term investments in various mutual funds.

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

Carrying Value

1 unchanged sentence

December 28, 2024

Trading securities

Deferred compensation investments

Derivative financial instruments, net

3 unchanged sentences

December 30, 2023

Trading securities

Deferred compensation investments

Derivative financial instruments, net

Cash and cash equivalents—mutual funds

The fair value redemption amounts of certain redeemable noncontrolling interests are measured on a recurring basis utilizing Level 3 inputs, including estimates of future revenue, operating margins, growth rates, and discount rates.

(15) DERIVATIVE FINANCIAL INSTRUMENTS

The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries.

Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments.

Some derivative financial instruments are marked to market and recorded in the Company’s Consolidated Statements of Earnings, while others may be accounted for as fair value, cash flow, or net investment hedges.

Derivative financial instruments have credit and market risk.

The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken and by entering into transactions with counterparties who are recognized, stable multinational banks.

Any gains or losses from net investment hedge activities remain in AOCI until either the sale or substantially complete liquidation of the related subsidiaries.

The Company manages risks related to interest rates, commodity prices, and foreign currency, particularly those arising from foreign currency denominated transactions and investments in foreign subsidiaries.

To address these risks, the Company may use derivative financial instruments.

Depending on their classification, some derivatives are marked to market and recorded in the Company’s Consolidated Statements of Earnings, while others are accounted for as fair value, cash flow, or net investment hedges.

Derivative financial instruments inherently carry credit and market risks, which the Company mitigates by monitoring exposure limits and transacting with recognized, stable multinational banks as counterparties.

Gains or losses from net investment hedge activities remain in AOCI until the related subsidiaries are sold or substantially liquidated.

The fair value of derivative instruments as of December 28, 2024 and December 30, 2023 was as follows:

5 unchanged sentences

Other accrued expenses

Foreign currency forward contracts

Prepaid expenses and other current assets

Cross-currency swap contracts

2 unchanged sentences

Other accrued expenses

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Gains (losses) on derivatives recognized in the Consolidated Statements of Earnings for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 were as follows:

Fiscal Year Ended

Derivatives designated as

Statements of

hedging instruments:

Earnings location

Derivatives designated

Statements of Earnings

as hedging instruments:

Commodity contracts

8 unchanged sentences

Interest expense

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

Cash Flow Hedges

The Company enters into commodity forward, swap, and option contracts that qualify as cash flow hedges of the variability in cash flows attributable to future purchases.

The gain (loss) realized upon settlement for each will be recorded in “Product cost of sales” in the Consolidated Statements of Earnings in the period consumed.

Notional amounts, purchase quantities, and maturity dates of these contracts as of December 30, 2023 were as follows:

The Company enters into commodity forward, swap, and option contracts to hedge variability in cash flows related to future purchases.

Gains (losses) realized upon settlement are recorded in “Product cost of sales” in the Consolidated Statements of Earnings for the period in which the hedged items are consumed.

As of December 28, 2024, the details of these contracts were as follows:

Commodity Type

1 unchanged sentence

Maturity Dates

Hot rolled steel coil

Hot-rolled coil steel

17,000 short tons

December 2023 to April 2024

January 2025 to September 2025

352,000 MMBtu

January 2024 to October 2025

January 2025 to March 2026

Ultra-low-sulfur diesel fuel

2,604,000 gallons

January 2024 to September 2024

December 2024 to June 2026

Net Investment Hedges

In fiscal 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 in fiscal 2044 for Danish krone (“DKK”) and Euro denominated payments.

The CCS were entered into in order to mitigate foreign currency risk on the Company’s Euro and DKK investments and to reduce interest expense.

Interest is exchanged twice per year on April 1 and October 1.

The Company designated the initial full notional amount of the two CCS ($ 130,000 ) as a hedge of the net investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) 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.

In the third and fourth quarters of fiscal 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 fiscal 2022, the Company reclassified the cumulative net investment hedge gain of $ 4,827 ($ 3,620 after-tax) from AOCI to “Other income (expenses)” in the Consolidated Statements of Earnings.

Key terms of the Euro CCS are as follows:

Set Settlement

To manage foreign currency risk associated with its euro investments and reduce interest expenses, the Company uses fixed-for-fixed cross-currency swaps (“CCS”).

These swaps convert U.S.

dollar principal and interest payments from a portion of its 5.00 % senior unsecured notes due in fiscal 2044 into foreign-currency-denominated payments.

Interest payments are exchanged biannually on April 1 and October 1.

Under the spot method, the Company designated the full notional amounts of CCS as hedges for the net investment in certain European subsidiaries.

Changes in fair value of the CCS attributable to spot exchange rates are recorded as cumulative foreign currency translation within AOCI, while net interest receipts reduce interest expense over the life of the CCS.

Key terms as of December 28, 2024 were as follows:

Termination Date

1 unchanged sentence

April 1, 2029

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

In the first quarter of fiscal 2024, the Company early settled a euro net investment hedge entered in fiscal 2019, receiving proceeds of $ 2,711 .

These proceeds will remain in AOCI until the related subsidiaries are sold or substantially liquidated.

In the third and fourth quarters of fiscal 2022, the Company settled a Danish krone net investment hedge, receiving proceeds of $ 3,532 .

Following the sale of the Company’s offshore wind energy structures business in the fourth quarter of fiscal 2022, a cumulative net investment hedge gain of $ 4,827 ($ 3,620 after tax) was reclassified from AOCI to “Other income (expenses)” in the Consolidated Statements of Earnings.

(16) WARRANTIES

The Company’s product warranty accrual reflects management’s best estimate of the 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 are recorded in “Other accrued expenses” in the Consolidated Balance Sheets, for the fiscal years ended December 30, 2023 and December 31, 2022 were as follows:

The Company’s product warranty accrual represents management’s best estimate of the probable liabilities associated with its product warranties.

Historical claims data is used to estimate warranty costs at the time revenue is recognized.

Changes in the product warranty accrual, recorded in “Other accrued expenses” in the Consolidated Balance Sheets, for the fiscal years ended December 28, 2024 and December 30, 2023 were as follows:

Fiscal Year Ended

4 unchanged sentences

Balance—end of period

(18) COMMITMENTS & CONTINGENCIES

Various claims and lawsuits are pending against the 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 (the "Plan").

The Plan provides defined benefit retirement income to eligible employees in the United Kingdom (“U.K.”).

Pension retirement benefits to qualified employees are 1.67 % of final salary per year of service upon reaching the age of 65 years .

The Plan has no active employees as members as of December 30, 2023.

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 Plan is denominated in British pounds, the Company used exchange rates of $ 1.273 /£ and $ 1.209 /£ to translate the net pension asset into U.S.

dollars as of December 30, 2023 and December 31, 2022, respectively.

The PBO was $ 477,763 as of December 30, 2023.

The net funded status of $ 15,404 as of December 30, 2023 is recorded as a non-current asset reflecting, in part, an actuarial loss for the period from December 31, 2022 to December 30, 2023 attributed to a slight decrease in the discount rate.

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.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

Changes in the PBO and fair value of plan assets for the Plan for the period from December 31, 2022 to December 30, 2023 were as follows:

(17) COMMITMENTS AND CONTINGENCIES

The Company and certain subsidiaries are currently facing various claims and lawsuits.

It is difficult for the Company to fully assess the potential impact of both asserted and unasserted claims on its consolidated results of operations, financial condition, or liquidity.

When claims are considered probable and reasonably estimable, a liability is recorded.

However, the Company does not expect that any known lawsuits, claims, environmental costs, commitments, or contingent liabilities will have a material adverse effect on its consolidated results of operations, financial condition, or liquidity.

(18) DEFINED BENEFIT RETIREMENT PLAN

Delta Ltd., a wholly-owned subsidiary of the Company, sponsors the Delta Pension Plan (the “Plan”), which provides defined benefit retirement income to eligible employees in the United Kingdom (“U.K.”).

Qualified employees are entitled to pension retirement benefits amounting to 1.67 % of final salary for each year of service upon reaching the age of 65 .

There have been no active employees participating in the Plan for over five years.

Funded Status

The Company recognizes the pension plan’s funded status as either an asset or liability.

This status reflects the difference between the projected benefit obligation (“PBO”) and the fair value of the plan’s assets.

The PBO represents the present value of benefits earned by participants to date, factoring in assumed future salary increases and inflation.

Plan assets are measured at fair value, and because the Plan is denominated in British pounds, the Company translates the net pension asset into U.S.

dollars using exchange rates of $ 1.257 /£ and $ 1.273 /£ as of December 28, 2024 and December 30, 2023, respectively.

As of December 28, 2024, the PBO was $ 414,657 , and the net funded status was $ 46,520 recorded as a non-current asset, reflecting an actuarial gain attributed to an increase in the discount rate from the prior year.

The accumulated benefit obligation (“ABO”), representing the present value of benefits earned to date without assuming future compensation growth, is equal to the PBO due to the absence of active employees in the plan.

The overfunded ABO represents the difference between the PBO and the fair value of the plan assets.

Changes in the PBO and fair value of plan assets for the period from December 30, 2023 to December 28, 2024 were as follows:

Fair value as of December 30, 2023

3 unchanged sentences

Benefits paid

Actuarial loss

Currency translation

Actuarial gain

Currency translation loss

Fair value as of December 28, 2024

The actuarial loss increased the projected benefit obligation and resulted primarily from a decrease in the discount rate from 4.80 % in fiscal 2022 to 4.50 % in fiscal 2023.

Changes in the PBO and fair value of plan assets for the Plan for the period from December 25, 2021 to December 31, 2022 were as follows:

The actuarial gain decreased the PBO and resulted primarily from an increase in the discount rate from 4.50 % in fiscal 2023 to 5.50 % in fiscal 2024.

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

Changes in the PBO and fair value of plan assets for the period from December 31, 2022 to December 30, 2023 were as follows:

Fair value as of December 31, 2022

3 unchanged sentences

Benefits paid

Actuarial gain

Currency translation

Fair value as of December 31, 2022

The actuarial gain decreased the project benefit obligation and resulted from an increase in the discount rate from 1.90 % in fiscal 2021 to 4.80 % in fiscal 2022.

Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 30, 2023 and December 31, 2022 consisted of actuarial losses, as follows:

Balance as of December 25, 2021

Actuarial loss

Amortization of prior service costs

Currency translation gain

Fair value as of December 30, 2023

The actuarial loss contributed to an increase in the PBO, primarily due to a decrease in the discount rate from 4.80 % in fiscal 2022 to 4.50 % in fiscal 2023.

The pre-tax amounts recognized in AOCI as of December 28, 2024 and December 30, 2023 included actuarial losses, as follows:

Balance as of December 31, 2022

3 unchanged sentences

Balance as of December 30, 2023

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Assumptions — The weighted-average actuarial assumptions used to determine the benefit obligation as of December 30, 2023 and December 31, 2022 were as follows:

Actuarial gain

Amortization of prior service costs

Amortization of net actuarial loss

Currency translation gain

Balance as of December 28, 2024

The weighted-average actuarial assumptions used to determine the benefit obligation as of December 28, 2024 and December 30, 2023 were as follows:

Discount rate

Salary increase

Consumer Price Index ("CPI") inflation

1 unchanged sentence

Cost (Benefit)

Pension cost (benefit) is determined based on 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 cost.

The components of the net periodic pension cost (benefit) for the fiscal years ended December 30, 2023 and December 31, 2022 were as follows:

The pension cost (benefit) is determined based on the annual service cost (the actuarial cost of benefits earned during the period) and the interest cost on those liabilities, adjusted for the expected return on plan assets.

The interest cost is calculated using the full yield curve approach, applying specific spot rates along the yield curve to estimate the present value of the pension obligations relevant to cash outflows for the corresponding year.

The expected long-term rate of return on plan assets is applied to their fair value.

Differences between actual experience and assumptions are not recognized in net earnings immediately;

instead, they are deferred and, if necessary, amortized as pension costs.

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

The components of the net periodic pension cost for the fiscal years ended December 28, 2024 and December 30, 2023 were as follows:

Fiscal Year Ended

2 unchanged sentences

Amortization of prior service costs

Net periodic pension cost (benefit)

Assumptions —The weighted-average actuarial assumptions used to determine the cost (benefit) were as follows for the fiscal years ended December 30, 2023 and December 31, 2022:

Amortization of net actuarial loss

Net periodic pension cost

For the fiscal years ended December 28, 2024 and December 30, 2023, the weighted-average actuarial assumptions used to determine the net periodic pension cost were:

Discount rate for benefit obligations

3 unchanged sentences

RPI inflation

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 on plan assets increased from 3.48 % to 4.85 % for fiscal 2023 as the investment composition has more liability matching versus return-seeking assets.

Inflation is based on expected changes in the CPI or the RPI in the U.K.

depending on the relevant plan provisions.

The discount rate is based on the yields of AA-rated corporate bonds with maturities similar to the pension liabilities.

The expected return on plan assets considers the asset allocation mix and historical returns, factoring in current and anticipated market conditions.

The expected return increased from 4.85 % to 5.05 % for fiscal 2024, reflecting the continued shift toward more liability-matching assets.

Inflation estimates are based on expected changes in the U.K.’s CPI or RPI, depending on the relevant plan provisions.

Cash Contributions

The Company completed negotiations with Plan trustees in fiscal 2022 regarding annual funding for the Plan.

The annual contributions into the Plan are approximately $ 16,700 (£ 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 $ 1,700 (£ 1,300 ) per annum.

In the fourth quarter of fiscal 2020, the Company made its required fiscal 2021 annual contribution in addition to the required fiscal 2020 annual contribution that was made earlier in fiscal 2020.

In fiscal 2022, the Company completed negotiations with Plan trustees regarding annual funding.

The annual contributions to the Plan are approximately £ 13,100 ($ 16,700 ) as part of the Plan’s recovery plan, plus approximately £ 1,900 ($ 2,500 ) annually for administrative costs.

Benefit Payments

The expected pension benefit payments for the fiscal years 2025 through 2034 are as follows:

Asset Allocation Strategy

The investment strategy for the pension plan assets is to maintain a diversified portfolio that includes:

● Long-term fixed-income securities that are either investment grade or government ‑ backed,

● Common stock mutual funds for U.K.

companies, and

● Diversified growth funds that invest across various asset classes, including common stock, fixed income, real estate, and commodities.

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

Benefit Payments

The following table details expected pension benefit payments for the fiscal years 2024 through 2033:

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.

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.

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 as of December 30, 2023.

As required by U.K.

law, the Plan has an independent trustee responsible for setting the investment policy.

The general strategy is to allocate approximately 50 % of the Plan’s assets in common stock mutual funds and diversified growth funds, with the remaining assets in long-term fixed income securities, including corporate bonds and index-linked U.K.

The trustees regularly consult with representatives of the Plan sponsor and independent advisors on these matters.

The pension plan investments are held in a trust, and as of December 28, 2024, the weighted-average maturity of the corporate bond portfolio was 12 years .

On March 26, 2024, the Trustees of the Plan entered into an agreement with a large U.K.

insurance company to purchase a bulk annuity insurance policy (“arrangement”) as an investment asset.

Such arrangement is commonly referred to as a “pension buy-in” and provides the Plan with a monthly contractual payment stream to satisfy pension obligations payable to approximately 15 % of total plan participants.

The arrangement does not relieve the Plan or the Company (as plan sponsor) of the primary responsibility for the pension obligations.

The Plan purchased the arrangement for £ 70,865 ($ 90,800 ) and recorded it at fair value.

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 —These investments 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 pounds, 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.

corporations.

The fair value recorded by the Plan is calculated using NAV for each investment.

Below is a description of the valuation methodologies used for investments measured at fair value, categorized according to the valuation hierarchy:

● Temporary Cash Investment s :

Comprising British pounds, these investments are reported in U.S.

dollars based on readily available currency exchange rates and are classified as Level 1 investments.

● Bulk Annuity Insurance Policy:

The initial value of the bulk annuity insurance policy is equal to the premium paid to secure it.

This value is adjusted each reporting period based on changes in interest rates, discount rates, and benefits paid.

Since the valuation of this asset involves significant judgment and lacks observable market inputs, the buy-in contract is classified as Level 3 in the fair value hierarchy.

● Leveraged Inflation-Linked Gilt Funds:

These investments combine U.K.

government-backed securities, money market instruments, and derivatives to provide leveraged exposure to changes in long-term interest and inflation rates.

Their fair value is calculated using net asset value (“NAV”).

● Corporate Bonds:

Fixed-income securities issued by U.K.

corporations, valued at NAV.

● Corporate Stock:

Common and preferred stocks, including mutual funds, from both U.K.

corporations, valued at NAV.

● Secured Income Asset Funds:

Investments with a high expected inflation linkage, relying on asset valuations developed by fund managers using market multiples, market transactions of comparable companies, and other methods.

The fair value is calculated using NAV.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

Secured Income Asset Funds —This investment category consists of holdings that have a high level of expected inflation linkage.

Examples of underlying asset 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.

As of December 28, 2024 and December 30, 2023, the pension plan assets measured at fair value on a recurring basis were as follows:

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Temporary cash investments

Bulk annuity insurance policy

Total plan net assets at fair value

Plan assets at NAV:

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Total plan assets

The Company has operating leases for plant locations, corporate offices, sales offices, and certain equipment.

Outstanding leases as of December 30, 2023 have remaining lease terms of one year to twenty-three 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 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 non-current 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.

Operating lease ROU assets and liabilities are recognized at the 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 assets are adjusted for any lease payments made, lease incentives, and impairments.

The lease terms for 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.

Changes in the Company’s Level 3 plan assets, which were recorded in other comprehensive income (loss), included:

December 30, 2023

Net Realized and Unrealized Gains (Losses)

Net Purchases, Issuances, and Settlements

Net Transfers Into (Out of) Level 3

Currency Impact

December 28, 2024

Bulk annuity insurance policy

Total Level 3 investments

The Company is a lessee in noncancellable operating leases for plant locations, corporate and sales offices, and certain equipment.

The Company does not have any finance leases.

At the inception of a contract, or when an existing contract is modified, the Company determines if the arrangement constitutes a lease based on whether it conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from, and has the ability to direct the use of, the asset.

At lease commencement, the Company recognizes a lease liability and a ROU asset, based on the present value of lease payments over the lease term.

ROU assets represent the right to use the underlying asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments.

The Company uses its collateralized incremental borrowing rate to calculate the present value of future lease payments.

ROU assets are adjusted for any lease payments, incentives, or impairments.

Lease costs are recognized on a straight-line basis over the lease term.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

Lease cost and other information related to the Company’s operating leases as of and for the fiscal year ended December 30, 2023 and December 31, 2022 were as follows:

The Company has elected not to s eparate lease and non-lease components in all asset classes and does not recognize ROU assets and lease liabilities for short-term leases with a term of 12 months or less.

As of December 28, 2024, the remaining terms of the Company’s operating leases range from one year to twenty-two years , with certain leases offering renewal options of up to ten years .

For facilities where lease terms include renewal options that are reasonably certain to be exercised, the extended term is included in the lease term.

The following table provides supplemental balance sheet information related to operating leases as of December 28, 2024 and December 30, 2023:

Consolidated Balance

Sheets location

Operating lease ROU assets

Other non-current assets

Current portion of operating lease liabilities

Other accrued expenses

Long-term operating lease liabilities

Operating lease liabilities

Total operating lease liabilities

Lease costs and other information related to the Company’s operating leases as of and for the fiscal years ended December 28, 2024 and December 30, 2023 were as follows:

Operating lease cost

Operating cash outflows from operating leases

ROU assets obtained in exchange for lease obligations

ROU assets obtained in exchange for lease liabilities

Weighted-average remaining lease term

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Operating lease cost includes approximately $ 1,800 for short-term lease costs and approximately $ 5,900 for variable lease payments in fiscal 2024.

Supplemental balance sheet information related to operating leases as of December 30, 2023 and December 31, 2022 was as follows:

Classification

Operating lease assets

Other non-current assets

Operating lease short-term liabilities

Other accrued expenses

Operating lease long-term liabilities

Operating lease liabilities

Total lease liabilities

Minimum lease payments under operating leases expiring subsequent to December 30, 2023 are as follows:

Fiscal year ending:

Total minimum lease payments

Present value of minimum lease payments

Maturities of operating lease liabilities as of December 28, 2024 were as follows:

Total lease payments

Present value adjustment

Present value of lease liabilities

(20) BUSINESS 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 based on employee headcounts and sales dollars.

Reportable segments are as follows:

INFRASTRUCTURE:

The Company’s chief operating decision maker (“CODM”) is the President and Chief Executive Officer.

The CODM uses operating income as the profit measure to evaluate segment performance and allocate resources across segments.

Segment selling, general, and administrative expenses include certain corporate expense allocations, typically based on employee headcounts and sales volumes.

For segment reporting purposes, the Company excludes unallocated corporate general and administrative expenses, interest expenses, non-operating income and deductions, and income taxes from operating income.

The accounting policies for the reportable segments are consistent with those described in Note 1.

VALMONT INDUSTRIES, INC.

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(Dollars in thousands, except per-share amounts)

In addition to these two reportable segments, the Company had a business and related activities in fiscal 2022 that were not more than 10% of consolidated sales, operating income, or assets.

This business, the offshore wind energy structures business, was reported in the “Other” segment until its divestiture in the fourth quarter of fiscal 2022.

The accounting policies of the reportable segments are the same as those described in Note 1.

The Company evaluates the performance of its reportable segments based on operating income and return on 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.

Summary by Business

Fiscal Year Ended

Infrastructure

INTERSEGMENT SALES:

The reportable segments are as follows:

Infrastructure :

Total intersegment sales

Agriculture :

Included in the “Other” segment are the activities of the offshore wind energy structures business, which was divested in the fourth quarter of fiscal 2022.

In the fourth quarter of fiscal 2024, the Company renamed its Transmission, Distribution, and Substation product line to the Utility product line.

In fiscal 2024, the Company realigned management's reporting structure for certain composite structure sales and, accordingly, revised its presentation of sales across product lines to reflect how the product is currently managed.

The reporting for fiscal years 2023 and 2022 was adjusted to conform to the 2024 presentation.

As a result, Utility product line sales increased and Lighting and Transportation product line sales decreased by $ 47,902 and $ 32,533 for fiscal 2023 and fiscal 2022, respectively.

Summary by Business Segment

Fiscal year ended December 28, 2024

Infrastructure

Total net sales

OPERATING INCOME (LOSS):

Intersegment sales

Cost of sales

Selling, general, and administrative expenses (a)

Segment operating income

Unallocated corporate expenses

Total operating income

Fiscal year ended December 30, 2023

Infrastructure

Intersegment sales

Cost of sales

Selling, general, and administrative expenses (a)

Impairment of goodwill and other intangible assets

Realignment charges

Segment operating income

Unallocated corporate expenses

Corporate realignment charges

Total operating income

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Infrastructure

Intersegment sales

Cost of sales

Selling, general, and administrative expenses (a)

Segment operating income

Unallocated corporate expenses

Total operating income

(a) Selling, general, and administrative expenses for each reportable segment includes compensation, certain allocated overhead expenses including information technology and enterprise resource planning, commissions, incentives, depreciation and amortization expense, and research and development.

Fiscal year ended December 28, 2024

Infrastructure

Geographical market:

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Product line:

Transmission, Distribution, and Substation

Lighting and Transportation

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Product line:

Transmission, Distribution, and Substation

Lighting and Transportation

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Technology Products and Services

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per-share amounts)

Fiscal year ended December 31, 2022

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Product line:

Transmission, Distribution, and Substation

Lighting and Transportation

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Technology Products and Services

VALMONT INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Fiscal Year Ended

1 unchanged sentence

Infrastructure

Total segment operating income

Unallocated corporate expenses

Total operating income

Interest expense, net

Net interest expense

Other income (expenses)

1 unchanged sentence

Infrastructure

Total segment assets

Unallocated corporate assets

Fiscal Year Ended

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Infrastructure

Total segment capital expenditures

Unallocated corporate capital expenditures

Total capital expenditures

Fiscal Year Ended

DEPRECIATION AND AMORTIZATION:

Infrastructure

Total depreciation and amortization expense

VALMONT INDUSTRIES, INC.

2 unchanged sentences

(Dollars in thousands, except per-share amounts)

Fiscal Year Ended

DEPRECIATION AND AMORTIZATION:

Infrastructure

Total segment depreciation and amortization expense

Unallocated corporate depreciation and amortization expense

Total depreciation and amortization expense

Summary by Geographical Area by Location of Valmont Facilities

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No single customer accounted for more than 10% of net sales in fiscal 2024, 2023, or 2022.

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 each accounted for approximately 7 % of the Company’s net sales in fiscal 2023;

no other foreign country accounted for more than 4% of the Company’s net sales.

Operating income by business segment is 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;

other intangible assets, net of amortization;

and other non-current assets.

Long-lived assets by geographical area are based on the location of facilities.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

Geographical net sales are based on the location of the facility generating them and excludes sales to other operating units within the Company.

In fiscal 2024, Australia contributed approximately 8 % of the Company’s net sales, Brazil contributed approximately 5 %, and no other foreign country accounted more than 4%.

Operating income by business segment is calculated as net sales minus identifiable operating expenses and allocations, and it includes profits from sales to other operating units of the Company.

Long-lived assets include property, plant, and equipment (net of depreciation), goodwill, other intangible assets (net of amortization), and other non-current assets.

Long-lived assets by geographical area are based on the location of the facilities.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data