Valmont Industries

FOR THE FISCAL YEAR ENDED DECEMBER 28, 2019

MESSAGE TO 
FELLOW STAKEHOLDERS 
and FORM 10-K

A MESSAGE TO OUR 
STAKEHOLDERS

Stephen G. Kaniewski
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There are several reasons to invest in a company.
Some investors look for companies that are built on a 
solid foundation with long-term, secular market drivers. 
Others look for companies with a demonstrated history
of shareholder returns and return on invested capital 
focus. All investors look for companies that create value 
for stakeholders and adhere to a set of core principles that
shape the culture for their people. Valmont®continuously 
strives to be all of the above for all our stakeholders. 

2019 Financial Performance

• Revenues of $2.8 billion

• Operating Income of $237.7 million

• Earnings Per Diluted Share of $7.06

     • After-Tax Return on Invested Capital of 9.4%1

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accomplishments for Valmont and our associates around 
the world. Among our many achievements, we launched 
new products and partnerships, expanded our market 
presence throughout the world with new acquisitions and
factories, and refreshed our strategic plan that will guide
our efforts in the coming years. We also made progress 
integrating recently acquired companies that have 
already increased our market share and are expected to 
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years. Strong market demand in both of our infrastructure
businesses was one factor that led to short-term capacity 
constraints that we are strategically addressing by adding 
additional capacity in several of our North American 
facilities.
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three of our facilities, including a one-week closure of our

1Calculation of average invested capital is on page 20 of the attached 2019 Form 10-K.

largest facility in Valley, Nebraska. Our ability to quickly
resume operations after this extraordinary weather event 
is a testament to the strength of our teams. Our operational 
excellence played a critical role in ensuring the safety of 
our employees and minimizing disruptions to our customers.

Our Engineered Support Structures segment continues 
to benefit from strong demand, driven by U.S. states’ in-
creased funding of infrastructure projects, which we
expect to continue to increase over the next few years. 
Sales of wireless communication structures and 
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all major wireless carriers deploying continued 4G and 
LTE buildouts and the acceleration of site preparation in 
advance of the 5G rollout. Challenges this year included a 
less favorable market environment in Australia for our 
Access Systems business, primarily due to reduced
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impacted segment results. 

In our Utility Support Structures segment, the shift to 
renewable energy is creating increased demand for addi-
tional distribution from energy sources, and there contin-
ues to be a critical need for more robust grid infrastructure.

Our Core Values

we operate with absolute

integrity

we have a
passion for our products, 
services, and customers

we strive for
continuous 
improvement
removing waste everywhere with a 
true sense of urgency

we consistently

deliver results

Extended industry lead times will likely continue for the 
foreseeable future. Our global backlog at the end of  2019 
rose to record levels, and is expected to further increase in
2020. Valmont® is uniquely positioned to offer every type 
of electric grid structure for the utility industry, and our teams 
are energized and excited for the opportunities ahead of 
us. The pricing environment in our Northern European
offshore wind business was challenged in 2019, but is 
improving in 2020 due to less available market capacity
and increased demand across the region.

Low net farm income and uncertainty of tariff and trade 
policy outcomes continued to impact our North American
irrigation business, while geo-political events in certain 
key international markets and strength of the U.S. dollar, 
delayed the timing of projects. Despite these challenges, 
sales of our advanced technology offerings grew 25% in 
2019, further strengthening our global market leadership 
position.

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industrial economy and relatively stable overseas markets.
In 2019, we acquired United Galvanizing in Houston, one 
of the largest galvanizers in North America with cost and 
volume synergies expected to be fully realized over the
next few years.  

Despite a few short-term headwinds during the year, 
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from a more moderate raw material cost environment.
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Transformation accelerated throughout the year. Our
teams also demonstrated pricing discipline across all of 
our segments and we continue to build upon this success. 
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million and more than $200 million of free cash
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strategic working capital improvements.2 An example was
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in North America that provided us and our suppliers more
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fully negotiated down payments on two large projects to
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business. We successfully reduced raw material 
quantities from 2018 levels, and continued to build upon
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(cid:87)(cid:74)(cid:72)(cid:84)(cid:76)(cid:83)(cid:78)(cid:95)(cid:78)(cid:83)(cid:76)(cid:5)(cid:88)(cid:78)(cid:76)(cid:83)(cid:78)(cid:1834)(cid:72)(cid:70)(cid:83)(cid:89)(cid:5)(cid:72)(cid:87)(cid:84)(cid:88)(cid:88)(cid:18)(cid:88)(cid:74)(cid:76)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:72)(cid:84)(cid:88)(cid:89)(cid:5)(cid:88)(cid:70)(cid:91)(cid:78)(cid:83)(cid:76)(cid:88)(cid:5)(cid:70)(cid:83)(cid:73)
aligning our teams for long-term growth. 

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2(cid:43)(cid:87)(cid:74)(cid:74)(cid:5)(cid:72)(cid:70)(cid:88)(cid:77)(cid:5)(cid:1835)(cid:84)(cid:92)(cid:5)(cid:84)(cid:75)(cid:5)(cid:9)(cid:23)(cid:22)(cid:21)(cid:19)(cid:23)(cid:5)(cid:78)(cid:88)(cid:5)(cid:72)(cid:70)(cid:81)(cid:72)(cid:90)(cid:81)(cid:70)(cid:89)(cid:74)(cid:73)(cid:5)(cid:70)(cid:88)(cid:5)(cid:84)(cid:85)(cid:74)(cid:87)(cid:70)(cid:89)(cid:78)(cid:83)(cid:76)(cid:5)(cid:72)(cid:70)(cid:88)(cid:77)(cid:5)(cid:1835)(cid:84)(cid:92)(cid:5)(cid:81)(cid:74)(cid:88)(cid:88)(cid:5)(cid:72)(cid:70)(cid:85)(cid:78)(cid:89)(cid:70)(cid:81)(cid:5)(cid:74)(cid:93)(cid:85)(cid:74)(cid:83)(cid:73)(cid:78)(cid:89)(cid:90)(cid:87)(cid:74)(cid:88)(cid:17)
 $307.6 million less $97.4 million. Please refer to page 47 of the attached 2019 10-K for our 
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Global Secular Growth Drivers:

Engineered Support Structures

• (cid:56)(cid:78)(cid:76)(cid:83)(cid:78)(cid:1834)(cid:72)(cid:70)(cid:83)(cid:89)(cid:5)(cid:78)(cid:83)(cid:91)(cid:74)(cid:88)(cid:89)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:78)(cid:83)(cid:5)(cid:89)(cid:87)(cid:70)(cid:83)(cid:88)(cid:85)(cid:84)(cid:87)(cid:89)(cid:70)(cid:89)(cid:78)(cid:84)(cid:83)
   infrastructure

• Unprecedented demand for wireless
   network structures and components

• Rapidly accelerating 5G network
   deployment

• Increasing demand for integrated smart
   technology solutions

Utility Support Structures

• Aging infrastructure replacement from long-       
   term underinvestment in electric grid

• Grid resiliency requirements for 
   uninterrupted power

• Notable demand for renewable
   power (solar and wind) and distributed
   generation

• Replacement of wood distribution and
   transmission poles with those made from
   more robust materials

• Increased load growth in developing markets

Irrigation

• Increasing conservation efforts by
   growers for producing food

• Population growth demands more
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• (cid:44)(cid:84)(cid:91)(cid:74)(cid:87)(cid:83)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)(cid:1123)(cid:5)(cid:73)(cid:74)(cid:88)(cid:78)(cid:87)(cid:74)(cid:5)(cid:75)(cid:84)(cid:87)(cid:5)(cid:88)(cid:74)(cid:81)(cid:75)(cid:18)(cid:88)(cid:90)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)
   food production

• Farm labor costs and shortages

• Global leadership in advanced
   technology solutions that optimize
   water usage and other inputs

Coatings

• Preservation of critical infrastructure
   components

• The demand for better return on
   infrastructure investments

• Growing number of economies actively  
   combating corrosion costs

• Critical need to extend the life of steel 
   products

Engineered Support Structures segment, we expanded 
the growth of our innovative smart pole technology 
solutions. Demand for small cell structures and our 
integrated concealment solutions continues to 
accelerate from 5G network site preparation and
changing market dynamics. 
Our Utility Support Structures segment has been 
piloting wireless monitoring technology on power lines. 
This solution helps our customers identify and 
remediate line conditions on a real-time basis with 
minimal right-of-way impact.  Our Unmanned Aerial 
System (UAS) inspection team is using drone tech-
nology to quickly identify issues for a cross-segment 
customer base that includes Utility, Sports Lighting and
Communications, while reducing environmental impact 
and cost. In response to robust market demand in the 
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concrete distribution pole facility in 2019, and have 
reached maximum capacity utilization levels. We are 
already planning capacity expansions in other U.S. 
markets to increase production of this durable and 
(cid:1835)(cid:74)(cid:93)(cid:78)(cid:71)(cid:81)(cid:74)(cid:5)(cid:70)(cid:81)(cid:89)(cid:74)(cid:87)(cid:83)(cid:70)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:89)(cid:84)(cid:5)(cid:92)(cid:84)(cid:84)(cid:73)(cid:5)(cid:85)(cid:84)(cid:81)(cid:74)(cid:88)(cid:19)(cid:5)

(cid:70)(cid:83)(cid:73)(cid:5)(cid:1834)(cid:87)(cid:88)(cid:89)(cid:5)(cid:78)(cid:83)(cid:17)(cid:5)(cid:1834)(cid:87)(cid:88)(cid:89)(cid:5)(cid:84)(cid:90)(cid:89)(cid:5)(cid:13)(cid:43)(cid:46)(cid:43)(cid:52)(cid:14)(cid:5)(cid:82)(cid:74)(cid:89)(cid:77)(cid:84)(cid:73)(cid:5)(cid:89)(cid:84)(cid:5)(cid:84)(cid:83)(cid:81)(cid:94)(cid:5)(cid:90)(cid:88)(cid:78)(cid:83)(cid:76)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:43)(cid:46)(cid:43)(cid:52)(cid:5)
(cid:82)(cid:74)(cid:89)(cid:77)(cid:84)(cid:73)(cid:5)(cid:71)(cid:74)(cid:76)(cid:78)(cid:83)(cid:83)(cid:78)(cid:83)(cid:76)(cid:5)(cid:78)(cid:83)(cid:5)(cid:1834)(cid:88)(cid:72)(cid:70)(cid:81)(cid:5)(cid:23)(cid:21)(cid:23)(cid:21)(cid:19)(cid:5)(cid:57)(cid:77)(cid:78)(cid:88)(cid:5)(cid:72)(cid:77)(cid:70)(cid:83)(cid:76)(cid:74)(cid:5)(cid:71)(cid:74)(cid:89)(cid:89)(cid:74)(cid:87)
matches our actual costs of goods produced to revenue 
for our product lines. This change also provides uniformity
across all operations with respect to the method of 
inventory accounting, and enhances comparability to 
prior years’ results.

Our Commitment to 
Long-Term Shareholder Value Creation

(cid:60)(cid:74)(cid:5)(cid:87)(cid:74)(cid:82)(cid:70)(cid:78)(cid:83)(cid:5)(cid:1834)(cid:87)(cid:82)(cid:81)(cid:94)(cid:5)(cid:75)(cid:84)(cid:72)(cid:90)(cid:88)(cid:74)(cid:73)(cid:5)(cid:84)(cid:83)(cid:5)(cid:70)(cid:72)(cid:77)(cid:78)(cid:74)(cid:91)(cid:78)(cid:83)(cid:76)(cid:5)(cid:84)(cid:90)(cid:87)(cid:5)long-
term goals: 

Long-Term Financial Goals:

Revenue Growth 3   

5 to 10%

Earnings Per Share Growth  

Return on Invested Capital  

>10%

>10%

Free Cash Flow Conversion4 

>1.0X NET EARNINGS

Operating Margin  

>12%

As demonstrated over the past two years, we are build-
(cid:78)(cid:83)(cid:76)(cid:5)(cid:70)(cid:5)(cid:75)(cid:84)(cid:90)(cid:83)(cid:73)(cid:70)(cid:89)(cid:78)(cid:84)(cid:83)(cid:5)(cid:89)(cid:84)(cid:5)(cid:70)(cid:72)(cid:77)(cid:78)(cid:74)(cid:91)(cid:74)(cid:5)(cid:84)(cid:90)(cid:87)(cid:5)(cid:81)(cid:84)(cid:83)(cid:76)(cid:18)(cid:89)(cid:74)(cid:87)(cid:82)(cid:5)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)(cid:89)(cid:70)(cid:87)-
gets. We have implemented pricing discipline across all 
segments and markets and have positioned our global 
(cid:82)(cid:70)(cid:83)(cid:90)(cid:75)(cid:70)(cid:72)(cid:89)(cid:90)(cid:87)(cid:78)(cid:83)(cid:76)(cid:5)(cid:75)(cid:84)(cid:84)(cid:89)(cid:85)(cid:87)(cid:78)(cid:83)(cid:89)(cid:5)(cid:89)(cid:84)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)(cid:81)(cid:94)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:74)(cid:75)(cid:75)(cid:74)(cid:72)(cid:89)(cid:78)(cid:91)(cid:74)(cid:81)(cid:94)(cid:5)
serve our customers. Our teams are developing and 
introducing new products and services that contribute 
(cid:89)(cid:84)(cid:5)(cid:85)(cid:87)(cid:84)(cid:1834)(cid:89)(cid:70)(cid:71)(cid:81)(cid:74)(cid:5)(cid:76)(cid:87)(cid:84)(cid:92)(cid:89)(cid:77)(cid:19)(cid:5)(cid:60)(cid:74)(cid:5)(cid:70)(cid:87)(cid:74)(cid:5)(cid:88)(cid:89)(cid:87)(cid:70)(cid:89)(cid:74)(cid:76)(cid:78)(cid:72)(cid:70)(cid:81)(cid:81)(cid:94)(cid:5)(cid:70)(cid:73)(cid:73)(cid:78)(cid:83)(cid:76)
capacity in key markets, and continue to drive lean
principles across our organization. The external and
internal challenges we faced in 2019 hindered progress 
(cid:89)(cid:84)(cid:92)(cid:70)(cid:87)(cid:73)(cid:5)(cid:82)(cid:70)(cid:83)(cid:94)(cid:5)(cid:84)(cid:75)(cid:5)(cid:84)(cid:90)(cid:87)(cid:5)(cid:81)(cid:84)(cid:83)(cid:76)(cid:18)(cid:89)(cid:74)(cid:87)(cid:82)(cid:5)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)(cid:89)(cid:70)(cid:87)(cid:76)(cid:74)(cid:89)(cid:88)(cid:17)(cid:5)(cid:71)(cid:90)(cid:89)(cid:5)
(cid:92)(cid:74)(cid:5)(cid:87)(cid:74)(cid:82)(cid:70)(cid:78)(cid:83)(cid:5)(cid:72)(cid:84)(cid:82)(cid:82)(cid:78)(cid:89)(cid:89)(cid:74)(cid:73)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:72)(cid:84)(cid:83)(cid:1834)(cid:73)(cid:74)(cid:83)(cid:89)(cid:5)(cid:78)(cid:83)(cid:5)(cid:84)(cid:90)(cid:87)(cid:5)(cid:70)(cid:71)(cid:78)(cid:81)(cid:78)(cid:89)(cid:94)(cid:5)(cid:89)(cid:84)
achieve them. We believe our business is capable of 
achieving at least a 12% operating margin, buoyed by 
the strong demand in infrastructure businesses, and 
we have a clear execution plan to achieve this in the 
coming years.

Leading with Innovation

2019 was an exciting year of innovation across our four 
segments. Increasing our investment in technology- 
products and solutions was a key company strategy 
in 2019, energizing our teams and strengthening our 
leadership position in the markets we serve. In our 

3Revenue growth is 5% organic. Acquisitions over time are necessary to
   achieve top end range
4Long-term, multi-year goal

 
 
CAPITAL ALLOCATION SCORECARD
                                          a Balanced Approach

$275M of Capital Deployed  
in 2019

Share 
Purchases
$63M

Dividends
$33M

Business
Growth

Aquisitions
$82M

Capital 
Expenditures
$97M

Return of
Capital to
Shareholders

Capital 
Expenditures

• Working capital investment to support business growth
• CapEx of $97M in 2019

Acquisitions

•(cid:5)(cid:56)(cid:89)(cid:87)(cid:70)(cid:89)(cid:74)(cid:76)(cid:78)(cid:72)(cid:5)(cid:1834)(cid:89)(cid:5)(cid:16)(cid:5)(cid:82)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:5)(cid:74)(cid:93)(cid:85)(cid:70)(cid:83)(cid:88)(cid:78)(cid:84)(cid:83)
• Returns to exceed cost of capital within 3 years

Dividends

• Payout ratio target: 15% of net earnings
• Current payout: 21.0%

Share 
Repurchases

• Opportunistic approach
•(cid:5)(cid:56)(cid:90)(cid:85)(cid:85)(cid:84)(cid:87)(cid:89)(cid:74)(cid:73)(cid:5)(cid:71)(cid:94)(cid:5)(cid:75)(cid:87)(cid:74)(cid:74)(cid:5)(cid:72)(cid:70)(cid:88)(cid:77)(cid:5)(cid:1835)(cid:84)(cid:92)(cid:88)
• $204M remaining on current authorization1

1 As of 12/28/2019

In our Irrigation segment, as the recognized global industry
leader, we remain committed to investing in technology 
advancement and innovation. During the year we doubled 
our spending on research and development in this segment, 
despite a challenging agriculture market environment. 
Earlier in the year we announced a partnership with 
Prospera Technologies, a leading Israeli machine vision 
(cid:70)(cid:83)(cid:73)(cid:5)(cid:70)(cid:87)(cid:89)(cid:78)(cid:1834)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)(cid:78)(cid:83)(cid:89)(cid:74)(cid:81)(cid:81)(cid:78)(cid:76)(cid:74)(cid:83)(cid:72)(cid:74)(cid:5)(cid:72)(cid:84)(cid:82)(cid:85)(cid:70)(cid:83)(cid:94)(cid:5)(cid:88)(cid:85)(cid:74)(cid:72)(cid:78)(cid:70)(cid:81)(cid:78)(cid:95)(cid:78)(cid:83)(cid:76)(cid:5)(cid:78)(cid:83)(cid:5)(cid:70)(cid:76)(cid:5)(cid:73)(cid:70)(cid:89)(cid:70)
to achieve our vision of transforming the pivot to an 
autonomous crop management machine.  We have 
already exceeded our goal to monitor one million acres, 

(cid:70)(cid:83)(cid:73)(cid:5)(cid:92)(cid:78)(cid:81)(cid:81)(cid:5)(cid:88)(cid:89)(cid:87)(cid:78)(cid:91)(cid:74)(cid:5)(cid:89)(cid:84)(cid:5)(cid:82)(cid:84)(cid:83)(cid:78)(cid:89)(cid:84)(cid:87)(cid:5)(cid:1834)(cid:91)(cid:74)(cid:5)(cid:82)(cid:78)(cid:81)(cid:81)(cid:78)(cid:84)(cid:83)(cid:5)(cid:70)(cid:72)(cid:87)(cid:74)(cid:88)(cid:5)(cid:71)(cid:94)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:74)(cid:83)(cid:73)(cid:5)(cid:84)(cid:75)(cid:5)
2020. With more than 95,000 connected devices, Valley®
Irrigation, the worldwide leader in precision irrigation, is 
creating a pathway to a future data highway of connected
machines around the world, helping growers reduce input 
costs and increase productivity. 
In our Coatings segment, our proprietary GalvTrac® and 
Valmont Coatings Connector®rr  technologies are unmatched
®
in the industry, enriching the customer experience by 
optimizing zinc application and giving transparency to 
orders at every stage of the coatings process. 

2019 Acquisitions

WIRELESS

CAMOUFLAGE

2019 Capital Allocation 

Valmont® has a long history of returning capital to 
(cid:84)(cid:90)(cid:87)(cid:5)(cid:88)(cid:77)(cid:70)(cid:87)(cid:74)(cid:77)(cid:84)(cid:81)(cid:73)(cid:74)(cid:87)(cid:88)(cid:5)(cid:78)(cid:83)(cid:5)(cid:70)(cid:83)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)(cid:5)(cid:82)(cid:70)(cid:83)(cid:83)(cid:74)(cid:87)(cid:17)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:84)(cid:90)(cid:87)(cid:5)
commitment to a balanced capital allocation 
philosophy remained unchanged in 2019. This past year 
we deployed approximately $275 million in capital for 
capital expenditures, strategic acquisitions, share 
repurchases, and cash dividends at a ratio of 21% of 
prior year net earnings, exceeding our stated goal of 
15%. We invested in new infrastructure facilities in 
Siedlice, Poland and Fort Meade, Florida, and expanded 
our irrigation facility in Dubai, United Arab Emirates, 
all to support strategic growth initiatives.

Elevating our Commitment 
to ESG Principles 

Our company’s 9,800 employees and I are dedicated to 
the continued success of Valmont® and creating long-
term value for all stakeholders, and we pursue these 
(cid:72)(cid:84)(cid:82)(cid:82)(cid:78)(cid:89)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)(cid:5)(cid:92)(cid:78)(cid:89)(cid:77)(cid:5)(cid:70)(cid:5)(cid:1834)(cid:87)(cid:82)(cid:5)(cid:88)(cid:74)(cid:83)(cid:88)(cid:74)(cid:5)(cid:84)(cid:75)(cid:5)(cid:85)(cid:90)(cid:87)(cid:85)(cid:84)(cid:88)(cid:74)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5) 
integrity. We are also mindful of our broader responsibility 
toward our employees and the communities where 
we operate, live and work. Our tagline of Conserving 
Resources, Improving Life® is at the core of the products 
and services that we provide to support sustainable 
(cid:78)(cid:83)(cid:75)(cid:87)(cid:70)(cid:88)(cid:89)(cid:87)(cid:90)(cid:72)(cid:89)(cid:90)(cid:87)(cid:74)(cid:5)(cid:73)(cid:74)(cid:91)(cid:74)(cid:81)(cid:84)(cid:85)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)(cid:5)(cid:90)(cid:88)(cid:74)(cid:5)(cid:84)(cid:75)(cid:5)
water for agriculture. Our more than 80 Green Teams 
(cid:70)(cid:87)(cid:84)(cid:90)(cid:83)(cid:73)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:92)(cid:84)(cid:87)(cid:81)(cid:73)(cid:5)(cid:72)(cid:84)(cid:83)(cid:89)(cid:78)(cid:83)(cid:90)(cid:74)(cid:5)(cid:89)(cid:84)(cid:5)(cid:1834)(cid:83)(cid:73)(cid:5)(cid:78)(cid:83)(cid:83)(cid:84)(cid:91)(cid:70)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:92)(cid:70)(cid:94)(cid:88)(cid:5)(cid:89)(cid:84)(cid:5)
minimize our environmental impact, with an unwavering 
commitment to caring for our employees, customers, 
communities and the planet. 
During the year we continued building upon our Sustain-
(cid:70)(cid:71)(cid:78)(cid:81)(cid:78)(cid:89)(cid:94)(cid:5)(cid:46)(cid:83)(cid:78)(cid:89)(cid:78)(cid:70)(cid:89)(cid:78)(cid:91)(cid:74)(cid:17)(cid:5)(cid:70)(cid:72)(cid:77)(cid:78)(cid:74)(cid:91)(cid:78)(cid:83)(cid:76)(cid:5)(cid:88)(cid:74)(cid:91)(cid:74)(cid:87)(cid:70)(cid:81)(cid:5)(cid:88)(cid:78)(cid:76)(cid:83)(cid:78)(cid:1834)(cid:72)(cid:70)(cid:83)(cid:89)(cid:5)(cid:82)(cid:78)(cid:81)(cid:74)(cid:88)(cid:89)(cid:84)(cid:83)(cid:74)(cid:88)(cid:31)(cid:5)

• (cid:42)(cid:88)(cid:89)(cid:70)(cid:71)(cid:81)(cid:78)(cid:88)(cid:77)(cid:74)(cid:73)(cid:5)(cid:59)(cid:70)(cid:81)(cid:82)(cid:84)(cid:83)(cid:89)(cid:1123)(cid:88)(cid:5)(cid:1834)(cid:87)(cid:88)(cid:89)(cid:5)(cid:76)(cid:81)(cid:84)(cid:71)(cid:70)(cid:81)(cid:5)(cid:74)(cid:81)(cid:74)(cid:72)(cid:89)(cid:87)(cid:78)(cid:72)(cid:78)(cid:89)(cid:94)(cid:5)goal 
   to reduce our global electricity consumption by 
   8% over two years

• Completed 2018 assurance of disclosures for 
   Scope 1 Greenhouse Gas Emissions     

• Awarded the Nebraska Recycling Council Member 
  of the Year for our outstanding efforts to promote 
  recycling in Nebraska

• Recognized our Jasper, Tennessee manufacturing
   facility with the 2019 Sustainability Award for 
   dramatic improvements in key sustainability 
   and employee engagement metrics 

 • Launched an electric vehicle program to replace 
   more than 100 gas-powered vehicles at our largest 
   manufacturing facility by 2021 

• (cid:43)(cid:78)(cid:83)(cid:70)(cid:81)(cid:78)(cid:95)(cid:74)(cid:73)(cid:5)(cid:85)(cid:81)(cid:70)(cid:83)(cid:88)(cid:5)(cid:89)(cid:84)(cid:5)(cid:78)(cid:83)(cid:88)(cid:89)(cid:70)(cid:81)(cid:81)(cid:5)(cid:70)(cid:5)(cid:84)(cid:83)(cid:74)(cid:5)(cid:82)(cid:74)(cid:76)(cid:70)(cid:92)(cid:70)(cid:89)(cid:89)(cid:5)(cid:88)(cid:84)(cid:81)(cid:70)(cid:87)(cid:5)(cid:1834)(cid:74)(cid:81)(cid:73)(cid:5)
   at our Valley, Nebraska campus that will generate 
   carbon-free power for on-campus usage utilizing 
   our own TRJ tracker solution

In 2020, we commit to sharing more of our ESG 
focus across all three principles.

Building a World-Class Team 

We strive to build a workplace that attracts, develops, 
engages and retains the best and brightest talent. This 
begins by strengthening our foundation of talent across 
our manufacturing facilities.  By partnering with high 
schools and colleges in our communities, and leading 
on-site workforce training programs, we are investing in 
our most precious assets, our people. 
We also focus on cultivating strong leaders who live 
our core values, and continue to advance the depth and 
experience of our teams to drive innovation across our 
businesses. In support of our growth strategies, we are 
focused on collaboration, trust and mutual respect in  
order to accelerate the pace of innovation and ensure 
that Valmont products and solutions effectively serve 
our global customers. One example of this is our 
centralized, shared services model that we successfully 
implemented across many key functional areas, such 
as engineering, new product development, procurement 
(cid:70)(cid:83)(cid:73)(cid:5)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:74)(cid:19)(cid:5)(cid:60)(cid:74)(cid:5)(cid:74)(cid:93)(cid:85)(cid:70)(cid:83)(cid:73)(cid:74)(cid:73)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:87)(cid:84)(cid:81)(cid:74)(cid:88)(cid:5)(cid:84)(cid:75)(cid:5)(cid:39)(cid:90)(cid:88)(cid:78)(cid:83)(cid:74)(cid:88)(cid:88)(cid:5)(cid:49)(cid:78)(cid:83)(cid:74)(cid:5)
Managers and Value Stream Leaders to have global 
responsibility and created business partner roles in 
key support areas like human resources, information 
(cid:89)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)(cid:17)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:82)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:78)(cid:83)(cid:76)(cid:17)(cid:5)(cid:89)(cid:84)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)(cid:81)(cid:94)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:74)(cid:75)(cid:75)(cid:74)(cid:72)(cid:89)(cid:78)(cid:91)(cid:74)(cid:81)(cid:94)(cid:5)

support segment growth initiatives. We believe that 
meaningful breakthroughs come from teams that 
combine aspiration and action, value all voices and learn 
from each other’s different ideas, perspectives and 
experiences. This is critical for our sustained success.

Continuous Improvement, Agile and Lean 

We have consistently delivered results through our 
business cycles, driven by our commitment to
operational excellence. Last year we formally introduced 
Valmont® Agile and Lean throughout our organization.
By focusing on the voice of our customers, we have
driven improvements in product quality and process 
(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:94)(cid:17)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:78)(cid:83)(cid:72)(cid:87)(cid:74)(cid:70)(cid:88)(cid:74)(cid:73)(cid:5)(cid:88)(cid:85)(cid:74)(cid:74)(cid:73)(cid:5)(cid:89)(cid:84)(cid:5)(cid:82)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:5)(cid:75)(cid:84)(cid:87)(cid:5)(cid:83)(cid:74)(cid:92)(cid:5)(cid:85)(cid:87)(cid:84)(cid:73)-
ucts and technologies. Employees who complete Val-
mont Agile training are champions of our Core Values of 
continuous improvement and delivering results. We are
(cid:85)(cid:87)(cid:84)(cid:90)(cid:73)(cid:5)(cid:89)(cid:84)(cid:5)(cid:77)(cid:70)(cid:91)(cid:74)(cid:5)(cid:84)(cid:91)(cid:74)(cid:87)(cid:5)(cid:24)(cid:21)(cid:21)(cid:5)(cid:72)(cid:74)(cid:87)(cid:89)(cid:78)(cid:1834)(cid:74)(cid:73)(cid:5)(cid:38)(cid:76)(cid:78)(cid:81)(cid:74)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:49)(cid:74)(cid:70)(cid:83)(cid:5)(cid:70)(cid:88)(cid:88)(cid:84)(cid:72)(cid:78)-
ates at Valmont. Together, their leadership in Lean Daily
Management is leading the way in driving standard
(cid:92)(cid:84)(cid:87)(cid:80)(cid:17)(cid:5)(cid:72)(cid:84)(cid:88)(cid:89)(cid:5)(cid:88)(cid:70)(cid:91)(cid:78)(cid:83)(cid:76)(cid:88)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:85)(cid:87)(cid:84)(cid:72)(cid:74)(cid:88)(cid:88)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:78)(cid:74)(cid:88)(cid:5)(cid:70)(cid:72)(cid:87)(cid:84)(cid:88)(cid:88)(cid:5)
our global teams.  One example is in our Engineered
Support Structures segment. Critical problem-solving
activities led by our production staff at the point of 
(cid:78)(cid:82)(cid:85)(cid:70)(cid:72)(cid:89)(cid:5)(cid:87)(cid:74)(cid:88)(cid:90)(cid:81)(cid:89)(cid:74)(cid:73)(cid:5)(cid:78)(cid:83)(cid:5)(cid:70)(cid:5)(cid:9)(cid:22)(cid:21)(cid:21)(cid:17)(cid:21)(cid:21)(cid:21)(cid:5)(cid:70)(cid:83)(cid:83)(cid:90)(cid:70)(cid:81)(cid:78)(cid:95)(cid:74)(cid:73)(cid:5)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)
(cid:71)(cid:74)(cid:83)(cid:74)(cid:1834)(cid:89)(cid:5)(cid:75)(cid:87)(cid:84)(cid:82)(cid:5)(cid:78)(cid:83)(cid:72)(cid:87)(cid:74)(cid:70)(cid:88)(cid:74)(cid:73)(cid:5)(cid:84)(cid:90)(cid:89)(cid:85)(cid:90)(cid:89)(cid:5)(cid:84)(cid:83)(cid:5)(cid:70)(cid:5)(cid:88)(cid:78)(cid:83)(cid:76)(cid:81)(cid:74)(cid:5)(cid:85)(cid:90)(cid:81)(cid:89)(cid:87)(cid:90)(cid:88)(cid:78)(cid:84)(cid:83)
(cid:81)(cid:78)(cid:83)(cid:74)(cid:19)(cid:5)(cid:55)(cid:74)(cid:85)(cid:81)(cid:78)(cid:72)(cid:70)(cid:89)(cid:78)(cid:83)(cid:76)(cid:5)(cid:89)(cid:77)(cid:78)(cid:88)(cid:5)(cid:71)(cid:74)(cid:83)(cid:74)(cid:1834)(cid:89)(cid:5)(cid:70)(cid:72)(cid:87)(cid:84)(cid:88)(cid:88)(cid:5)(cid:82)(cid:90)(cid:81)(cid:89)(cid:78)(cid:85)(cid:81)(cid:74)(cid:5)(cid:70)(cid:73)(cid:73)(cid:78)(cid:89)(cid:78)(cid:84)(cid:83)(cid:70)(cid:81)
lines at the site will result in a considerable increase in
productivity going forward. Using Agile methodologies,
our Utility Support Structures team improved their 
(cid:74)(cid:83)(cid:76)(cid:78)(cid:83)(cid:74)(cid:74)(cid:87)(cid:78)(cid:83)(cid:76)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:78)(cid:74)(cid:88)(cid:5)(cid:71)(cid:94)(cid:5)(cid:23)(cid:26)(cid:10)(cid:17)(cid:5)(cid:88)(cid:89)(cid:87)(cid:74)(cid:70)(cid:82)(cid:81)(cid:78)(cid:83)(cid:78)(cid:83)(cid:76)(cid:5)(cid:85)(cid:87)(cid:84)(cid:72)(cid:74)(cid:88)(cid:88)-
es and considerably improving customer satisfaction.
Using the 8-step problem solving approach in our India
steel structures facility, the team realized a 20% large
pole seam welding cycle time reduction by optimizing 
welding consumables while maintaining 

our high quality standards. This project demonstrated
that our teams continue to meet increasing customer
demand by evaluating and executing on process 
improvement opportunities to reduce capital expenditures. 
We believe that operational excellence is the foundation
for realizing performance improvements and strength-
ening our market leadership position. Increased market 
demand in our infrastructure businesses is expected to
continue in 2020, and we are strategically adding
capacity to existing North American facilities to effec-
tively meet this demand. These capacity additions are
expected to be completed over the next 6 to 12 months,
(cid:92)(cid:78)(cid:89)(cid:77)(cid:5)(cid:84)(cid:85)(cid:74)(cid:87)(cid:70)(cid:89)(cid:78)(cid:84)(cid:83)(cid:70)(cid:81)(cid:5)(cid:71)(cid:74)(cid:83)(cid:74)(cid:1834)(cid:89)(cid:88)(cid:5)(cid:71)(cid:74)(cid:76)(cid:78)(cid:83)(cid:83)(cid:78)(cid:83)(cid:76)(cid:5)(cid:78)(cid:83)(cid:5)(cid:82)(cid:78)(cid:73)(cid:18)(cid:94)(cid:74)(cid:70)(cid:87)(cid:19)

(cid:55)(cid:74)(cid:1835)(cid:74)(cid:72)(cid:89)(cid:78)(cid:84)(cid:83)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:49)(cid:84)(cid:84)(cid:80)(cid:78)(cid:83)(cid:76)(cid:5)(cid:38)(cid:77)(cid:74)(cid:70)(cid:73)

As we look to 2020, through continued execution of 
our growth strategy, strong operational performance, 
and working capital management, we expect to deliver 
solid operating results with margin expansion, good free
(cid:72)(cid:70)(cid:88)(cid:77)(cid:5)(cid:1835)(cid:84)(cid:92)(cid:17)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:77)(cid:78)(cid:76)(cid:77)(cid:74)(cid:87)(cid:5)(cid:87)(cid:74)(cid:89)(cid:90)(cid:87)(cid:83)(cid:5)(cid:84)(cid:83)(cid:5)(cid:78)(cid:83)(cid:91)(cid:74)(cid:88)(cid:89)(cid:74)(cid:73)(cid:5)(cid:72)(cid:70)(cid:85)(cid:78)(cid:89)(cid:70)(cid:81)(cid:5)(cid:70)(cid:72)(cid:87)(cid:84)(cid:88)(cid:88)
the business. We are in great businesses with strong,
long-term secular drivers and we remain committed to 
improving the quality of life for individuals around the 
world. Recognizing that our employees are the corner-
stone of our accomplishments, we pride ourselves on 
our integrity and ability to deliver results, serving our 
customers with an unwavering passion for our busi-
ness. On behalf of the Valmont team, we are excited 
about the potential ahead and look forward to 
continuing to grow this company together with you, our 
stakeholders. Thank you for your support.

Stephen G. Kaniewski
(cid:53)(cid:87)(cid:74)(cid:88)(cid:78)(cid:73)(cid:74)(cid:83)(cid:89)(cid:5)(cid:11)(cid:5)(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)

FINANCIAL HIGHLIGHTS

$ GAAP  $ ADJUSTED

$2,767

$2,757

$2,746

$269.41

$267.1

$7.06

$7.594

$6.975

$237.7

$$202.311

$$5.115

$$4.204

2019

2018
Net Sales

2017

Dollars in millions, except per share amounts
OPERATING RESULTS

Net sales

Operating income1

Net earnings 2,4,5

Diluted earnings per share4,5

Dividends per share

FINANCIAL POSITION
Total shareholders’ equity

Invested capital3

OPERATING PROFITS

(cid:44)(cid:87)(cid:84)(cid:88)(cid:88)(cid:5)(cid:85)(cid:87)(cid:84)(cid:1834)(cid:89)(cid:5)(cid:70)(cid:88)(cid:5)(cid:70)(cid:5)(cid:10)(cid:5)(cid:84)(cid:75)(cid:5)(cid:83)(cid:74)(cid:89)(cid:5)(cid:88)(cid:70)(cid:81)(cid:74)(cid:88)

Operating income as a % of net sales

Net earnings as a % of net sales2

Return on beginning equity

Return on invested capital3

YEAR-END DATA

Shares outstanding (OOO’s)

Approximate number of shareholders

Number of employees

2019

2018
Operating Income

2017

2019

2018
Diluted Earnings Per Share

2017

2019

$    2,767.0   

237.7

    153.8

    7.06

1.50

$    1,156.9

    1,944.4

25.0%

    8.6%

   5.6%

    14.5%

9.4%

21,942

21,631

9,862

20186

$    2,757.1

    202.3

    94.4

    4.20

1.50

$    1,135.5

    1,888.8

23.9%

    7.3%

    3.4%

     8.5%

7.8%

  21,948

    21,569

10,328

2017

$    2,746.0

    267.1

    116.2

    5.11

1.50

$    1,151.8

    1,906.8

24.8%

    9.7%

    4.2%

    12.3%

10.5%

  22,694

    24,801

10,690

1Fiscal 2018 GAAP operating income included restructuring expense of $34.0 million (pre-tax), goodwill and intangible asset impairments of $15.8 million (pre-tax), and other 
 non-recurring expenses of $17.3 million (pre-tax). On an adjusted basis, operating income was $269.4 million. 
2Net earnings attributable to Valmont Industries, Inc.   
3See Item 6, Selected Financial Data, in the company’s Form 10-K for calculation of invested capital and return on invested capital. 
4Fiscal 2018 included impairments of goodwill and intangible assets of $14.7 million after-tax ($0.66 per share), restructuring expenses of $30.1 million after-tax 
(cid:5)(cid:13)(cid:9)(cid:22)(cid:19)(cid:24)(cid:25)(cid:5)(cid:85)(cid:74)(cid:87)(cid:5)(cid:88)(cid:77)(cid:70)(cid:87)(cid:74)(cid:14)(cid:17)(cid:5)(cid:87)(cid:74)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:83)(cid:76)(cid:5)(cid:84)(cid:75)(cid:5)(cid:81)(cid:84)(cid:83)(cid:76)(cid:18)(cid:89)(cid:74)(cid:87)(cid:82)(cid:5)(cid:73)(cid:74)(cid:71)(cid:89)(cid:5)(cid:74)(cid:93)(cid:85)(cid:74)(cid:83)(cid:88)(cid:74)(cid:88)(cid:5)(cid:84)(cid:75)(cid:5)(cid:9)(cid:22)(cid:22)(cid:19)(cid:22)(cid:5)(cid:82)(cid:78)(cid:81)(cid:81)(cid:78)(cid:84)(cid:83)(cid:5)(cid:70)(cid:75)(cid:89)(cid:74)(cid:87)(cid:18)(cid:89)(cid:70)(cid:93)(cid:5)(cid:13)(cid:9)(cid:21)(cid:19)(cid:26)(cid:21)(cid:5)(cid:85)(cid:74)(cid:87)(cid:5)(cid:88)(cid:77)(cid:70)(cid:87)(cid:74)(cid:14)(cid:17)(cid:5)(cid:9)(cid:22)(cid:25)(cid:19)(cid:27)(cid:5)(cid:82)(cid:78)(cid:81)(cid:81)(cid:78)(cid:84)(cid:83)(cid:5)(cid:70)(cid:75)(cid:89)(cid:74)(cid:87)(cid:18)(cid:89)(cid:70)(cid:93)(cid:5)(cid:13)(cid:9)(cid:21)(cid:19)(cid:27)(cid:26)(cid:5)(cid:85)(cid:74)(cid:87)(cid:5)(cid:88)(cid:77)(cid:70)(cid:87)(cid:74)(cid:14)(cid:5)(cid:84)(cid:75)(cid:5)(cid:84)(cid:89)(cid:77)(cid:74)(cid:87)(cid:5)(cid:83)(cid:84)(cid:83)(cid:18)(cid:87)(cid:74)(cid:72)(cid:90)(cid:87)(cid:87)(cid:78)(cid:83)(cid:76)
 expenses, and a loss from the divestiture of the grinding media business of $5.5 million after-tax ($0.24 per share).  
5Fiscal 2017 included $42.0 million ($1.85 per share) of tax expense attributed to the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) enacted in December 2017. 
6(cid:57)(cid:77)(cid:74)(cid:5)(cid:40)(cid:84)(cid:82)(cid:85)(cid:70)(cid:83)(cid:94)(cid:5)(cid:70)(cid:73)(cid:84)(cid:85)(cid:89)(cid:74)(cid:73)(cid:5)(cid:38)(cid:72)(cid:72)(cid:84)(cid:90)(cid:83)(cid:89)(cid:78)(cid:83)(cid:76)(cid:5)(cid:56)(cid:89)(cid:70)(cid:83)(cid:73)(cid:70)(cid:87)(cid:73)(cid:88)(cid:5)(cid:40)(cid:84)(cid:73)(cid:78)(cid:1834)(cid:72)(cid:70)(cid:89)(cid:78)(cid:84)(cid:83)(cid:5)(cid:13)(cid:1126)(cid:38)(cid:56)(cid:40)(cid:1127)(cid:14)(cid:5)(cid:57)(cid:84)(cid:85)(cid:78)(cid:72)(cid:5)(cid:27)(cid:21)(cid:27)(cid:17)(cid:5)(cid:55)(cid:74)(cid:91)(cid:74)(cid:83)(cid:90)(cid:74)(cid:5)(cid:43)(cid:87)(cid:84)(cid:82)(cid:5)(cid:40)(cid:84)(cid:83)(cid:89)(cid:87)(cid:70)(cid:72)(cid:89)(cid:88)(cid:5)(cid:92)(cid:78)(cid:89)(cid:77)(cid:5)(cid:40)(cid:90)(cid:88)(cid:89)(cid:84)(cid:82)(cid:74)(cid:87)(cid:88)(cid:17)(cid:5)(cid:84)(cid:83)(cid:5)(cid:70)(cid:5)(cid:82)(cid:84)(cid:73)(cid:78)(cid:1834)(cid:74)(cid:73)(cid:5)(cid:87)(cid:74)(cid:89)(cid:87)(cid:84)(cid:88)(cid:85)(cid:74)(cid:72)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:71)(cid:70)(cid:88)(cid:78)(cid:88)(cid:5)(cid:70)(cid:88)(cid:5)(cid:84)(cid:75)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:1834)(cid:87)(cid:88)(cid:89)
(cid:5)(cid:73)(cid:70)(cid:94)(cid:5)(cid:84)(cid:75)(cid:5)(cid:1834)(cid:88)(cid:72)(cid:70)(cid:81)(cid:5)(cid:23)(cid:21)(cid:22)(cid:29)(cid:19)(cid:5)(cid:5)(cid:55)(cid:74)(cid:91)(cid:74)(cid:83)(cid:90)(cid:74)(cid:5)(cid:87)(cid:74)(cid:72)(cid:84)(cid:76)(cid:83)(cid:78)(cid:89)(cid:78)(cid:84)(cid:83)(cid:5)(cid:75)(cid:84)(cid:87)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:85)(cid:87)(cid:78)(cid:84)(cid:87)(cid:5)(cid:89)(cid:77)(cid:87)(cid:74)(cid:74)(cid:5)(cid:94)(cid:74)(cid:70)(cid:87)(cid:88)(cid:5)(cid:85)(cid:87)(cid:74)(cid:88)(cid:74)(cid:83)(cid:89)(cid:74)(cid:73)(cid:5)(cid:78)(cid:83)(cid:5)(cid:89)(cid:77)(cid:78)(cid:88)(cid:5)(cid:89)(cid:70)(cid:71)(cid:81)(cid:74)(cid:5)(cid:92)(cid:74)(cid:87)(cid:74)(cid:5)(cid:90)(cid:83)(cid:73)(cid:74)(cid:87)(cid:5)(cid:70)(cid:5)(cid:73)(cid:78)(cid:75)(cid:75)(cid:74)(cid:87)(cid:74)(cid:83)(cid:89)(cid:5)(cid:71)(cid:70)(cid:88)(cid:78)(cid:88)(cid:5)(cid:92)(cid:77)(cid:78)(cid:72)(cid:77)(cid:5)(cid:92)(cid:70)(cid:88)(cid:5)(cid:38)(cid:56)(cid:40)(cid:5)(cid:57)(cid:84)(cid:85)(cid:78)(cid:72)(cid:5)(cid:27)(cid:21)(cid:26)(cid:19)(cid:5)(cid:5)(cid:53)(cid:81)(cid:74)(cid:70)(cid:88)(cid:74)(cid:5)(cid:88)(cid:74)(cid:74)(cid:5)(cid:75)(cid:84)(cid:84)(cid:89)(cid:83)(cid:84)(cid:89)(cid:74)(cid:5)(cid:22)(cid:5)(cid:89)(cid:84)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:5)(cid:5)
(cid:5)(cid:1834)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)(cid:88)(cid:89)(cid:70)(cid:89)(cid:74)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)(cid:5)(cid:75)(cid:84)(cid:87)(cid:5)(cid:75)(cid:90)(cid:87)(cid:89)(cid:77)(cid:74)(cid:87)(cid:5)(cid:78)(cid:83)(cid:75)(cid:84)(cid:87)(cid:82)(cid:70)(cid:89)(cid:78)(cid:84)(cid:83)(cid:19)

For more information on the footnotes above and the reasons why we believe the non-GAAP measures are useful, please see Item 6, Item 7 and Item 8 of the attached 2019 form 10-K

VALMONT ®
AT A GLANCE

Valmont is a global leader in providing products
that support critical infrastructure that is essential 
for economic and agricultural growth.

$2.8

Billion Dollars 
in Net Sales

(cid:21)

(cid:3)

100+

Countries
of Operation

23

Countries with
Valmont Facilities

87

Manufacturing

Facilities Worldwide

(cid:8)

4

Segments in which 
we do Business

9,800+

Global
Employees

ENGINEERED SUPPORT STRUCTURES (ESS)

The Engineered Support Structures (ESS) business segment engineers, manufactures and
distributes the structures essential for supporting global infrastructure growth. The markets we
serve include transportation, communication, and construction, with products such as out-
door lighting for public, commercial and industrial spaces as well as sporting venues. The ESS
(cid:88)(cid:74)(cid:76)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:70)(cid:81)(cid:88)(cid:84)(cid:5)(cid:73)(cid:74)(cid:91)(cid:74)(cid:81)(cid:84)(cid:85)(cid:88)(cid:5)(cid:89)(cid:87)(cid:70)(cid:75)(cid:1834)(cid:72)(cid:5)(cid:82)(cid:70)(cid:83)(cid:70)(cid:76)(cid:74)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:13)(cid:88)(cid:78)(cid:76)(cid:83)(cid:70)(cid:81)(cid:88)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:88)(cid:78)(cid:76)(cid:83)(cid:70)(cid:76)(cid:74)(cid:14)(cid:17)(cid:5)(cid:81)(cid:78)(cid:76)(cid:77)(cid:89)(cid:78)(cid:83)(cid:76)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:77)(cid:78)(cid:76)(cid:77)(cid:92)(cid:70)(cid:94)(cid:5)(cid:88)(cid:70)(cid:75)(cid:74)(cid:89)(cid:94)
products. ESS is also a leading provider of structures, components and concealment solutions
for wireless communications carriers around the world. In addition to producing engineered
perforated metal fa(cid:2467)ades used in architectural applications, ESS also produces and distributes
access systems that allow people to move safely and effectively in industrial facilities.

UTILITY SUPPORT STRUCTURES

The Utility Support Structures (Utility) business segment features transmission and distribu-
tion products, including poles and lattice structures, as well as substation components and
renewable energy generation equipment in a range of substrates including concrete, steel and
composites. Our products and services enable power to be transferred from the generation 
source—power generation facility or renewable source such as a solar or wind farm—to the end
power consumer. In addition to manufacturing, this segment also offers custom engineering
and support services.

IRRIGATION

The Irrigation business segment develops the technologies and systems that improve agricul-
(cid:89)(cid:90)(cid:87)(cid:70)(cid:81)(cid:5)(cid:85)(cid:87)(cid:84)(cid:73)(cid:90)(cid:72)(cid:89)(cid:78)(cid:91)(cid:78)(cid:89)(cid:94)(cid:5)(cid:89)(cid:77)(cid:87)(cid:84)(cid:90)(cid:76)(cid:77)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:89)(cid:5)(cid:73)(cid:74)(cid:81)(cid:78)(cid:91)(cid:74)(cid:87)(cid:94)(cid:5)(cid:84)(cid:75)(cid:5)(cid:75)(cid:87)(cid:74)(cid:88)(cid:77)(cid:5)(cid:92)(cid:70)(cid:89)(cid:74)(cid:87)(cid:19)(cid:5)(cid:43)(cid:87)(cid:84)(cid:82)(cid:5)(cid:78)(cid:89)(cid:88)(cid:5)(cid:87)(cid:84)(cid:84)(cid:89)(cid:88)(cid:5)(cid:70)(cid:88)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:78)(cid:83)(cid:83)(cid:84)(cid:91)(cid:70)(cid:89)(cid:84)(cid:87)(cid:88)(cid:5)(cid:84)(cid:75)(cid:5)
center pivot irrigation, this segment includes mechanical irrigation systems and tubing, as well
as pumping stations, sprinklers, drive trains and traction solutions. The Valmont® Irrigation seg-
ment is an industry leader in developing advanced technology solutions: as leaders in precision 
irrigation, Valley Irrigation continues to develop and implement cutting-edge crop management 
(cid:89)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)(cid:5)(cid:89)(cid:77)(cid:70)(cid:89)(cid:5)(cid:77)(cid:70)(cid:87)(cid:83)(cid:74)(cid:88)(cid:88)(cid:74)(cid:88)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:85)(cid:84)(cid:92)(cid:74)(cid:87)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:74)(cid:75)(cid:1834)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:94)(cid:5)(cid:84)(cid:75)(cid:5)(cid:89)(cid:87)(cid:90)(cid:88)(cid:89)(cid:74)(cid:73)(cid:5)(cid:74)(cid:86)(cid:90)(cid:78)(cid:85)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:78)(cid:83)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:1834)(cid:74)(cid:81)(cid:73)(cid:19)

COATINGS

The Coatings business segment of Valmont® extends the life, value and aesthetic properties 
of metal products. Valmont Coatings operates one of the world’s largest network of coatings 
facilities, including hot-dip galvanizing  and electroplating, as well as applied coatings (anodizing,
electro-deposition, liquid, powder, duplex). While Valmont Coatings serves the needs of Valmont 
Industries, a majority of its business comes from external customers.

®

73%

AMERICAS

2019
Revenue by Geography

11%

EMEA

16%

APAC

 Valmont Manufacturing Facilities (87)

BOARD
OF DIRECTORS

Mogens C. Bay
Chairman
Valmont Industries, Inc.

Director Since 1993

Catherine J. Paglia
Lead Director
Enterprise Asset 
Management

Director Since 2012

Audit Committee
Human Resources
Committee

Kaj Den Daas
Retired Executive
Vice President
Phillips Lighting B.V.
of the Netherlands

Director Since 2004

Audit Committee

Dr. Theo W. Freye
Retired CEO
CLAAS KgaA

Director Since 2015

Governance &
Nominating Committee

Stephen G. Kaniewski
President &
(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)
Valmont Industries, Inc.

Director Since 2018

Richard A. Lanoha
President &
(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)
Kiewit Corporation 

Director Since 2019

Audit
Committee
Walter Scott, Jr. (Chairman)
Kaj Den Daas
Daniel P. Neary
Catherine J. Paglia
Donna M. Milrod

James B. Milliken
Chancellor
University of Texas System

Director Since 2011

Governance &
Nominating Committee

Donna M. Milrod
Executive Vice President
State Street Corporation

Director Since 2018

Audit Committee
Human Resources
Committee

Daniel P. Neary
Former Chairman & Retired
(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)
Mutual of Omaha 

Director Since 2005 

Audit Committee
Chairman, Human Resources 
Committee

Ambassador
Clark T. Randt, Jr.
Former U.S. Ambassador
to the People’s Republic
of China

Director Since 2009

Chairman, Governance &
Nominating Committee

Walter Scott, Jr.
Retired Chairman 
Peter Kiewit Sons, Inc.

Director Since 1981

Chairman, Audit Committee

Governance & 
Nominating Committee
Clark T. Randt, Jr. (Chairman)
Dr. Theo W. Freye
James B. Milliken

Human Resources 
Committee
Daniel P. Neary (Chairman)
Catherine J. Paglia
Donna M. Milrod

CORPORATE
MANAGEMENT

Stephen G. Kaniewski
President 
(cid:11)(cid:5)(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)

Mark C. Jaksich
Executive Vice President
(cid:11)(cid:5)(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:43)(cid:78)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)

Timothy P. Francis
Senior Vice President 
& Corporate Controller

T. Mitchell Parnell
Senior Vice President
Human Resources

Ellen S. Dasher
Vice President
Global Taxation

Teresa M. Hecker
Vice President 
Internal Audit 

Renee L. Campbell
Vice President
Investor Relations &
Corporate Communications

Claudio O. Laterreur
Senior Vice President
Information Technology &
(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:57)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)(cid:5)

R. Andrew Massey
Vice President
(cid:49)(cid:74)(cid:76)(cid:70)(cid:81)(cid:5)(cid:11)(cid:5)(cid:40)(cid:84)(cid:82)(cid:85)(cid:81)(cid:78)(cid:70)(cid:83)(cid:72)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)

Dan A. Koch, Jr.
Vice President 
North American Pole
Operations

Matthew T. Ondrejko
Vice President
Global Marketing

BUSINESS UNIT 
MANAGEMENT

Aaron M. Schapper
Executive Vice President
Infrastructure

ENGINEERED SUPPORT STRUCTURES

J. Timothy Donahue
Group President

UTILITY SUPPORT STRUCTURES

J. Christopher Colwell
Group President

IRRIGATION

Leonard M. Adams
Group President

COATINGS

Richard S. Cornish
Group President

CORPORATE HEADQUARTERS

SHAREHOLDER AND INVESTOR RELATIONS

Valmont Industries, Inc.
One Valmont Plaza
Omaha, Nebraska 68154 USA

+1 402.963.1000

valmont.com

INDEPENDENT REGISTERED PUBLIC 
ACCOUNTING FIRM

Deloitte & Touche LLP
Omaha, Nebraska USA

STOCK TRANSFER AGENT AND REGISTRAR
ADDRESS SHAREHOLDER INQUIRES TO:

Broadridge Corporate Issuer Solutions, Inc.
PO Box 1342
Brentwood, New York 11717-0718 USA

+1 844.202.5345 or +1 720.414.6878

ANNUAL MEETING

The annual meeting of Valmont® shareholders 
will be held at 1:00 p.m. on Tuesday, April 28, 2020,
at One Valmont Plaza, Omaha, Nebraska USA.

Valmont’s common stock trades on the New York Stock
Exchange (NYSE) under the symbol VMI. 

We make available, free of charge through our website 
at valmont.com, our Annual Report on Form 10-K, quarterly 
reports on Form 10-Q, current reports on Form 8-K, and 
(cid:70)(cid:82)(cid:74)(cid:83)(cid:73)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)(cid:5)(cid:89)(cid:84)(cid:5)(cid:89)(cid:77)(cid:84)(cid:88)(cid:74)(cid:5)(cid:87)(cid:74)(cid:85)(cid:84)(cid:87)(cid:89)(cid:88)(cid:5)(cid:1834)(cid:81)(cid:74)(cid:73)(cid:5)(cid:84)(cid:87)
furnished pursuant to Section 13(a) or 15(d) of the 
Securities Exchange Act of 1934, as soon as reasonably
(cid:85)(cid:87)(cid:70)(cid:72)(cid:89)(cid:78)(cid:72)(cid:70)(cid:71)(cid:81)(cid:74)(cid:5)(cid:70)(cid:75)(cid:89)(cid:74)(cid:87)(cid:5)(cid:88)(cid:90)(cid:72)(cid:77)(cid:5)(cid:82)(cid:70)(cid:89)(cid:74)(cid:87)(cid:78)(cid:70)(cid:81)(cid:5)(cid:78)(cid:88)(cid:5)(cid:74)(cid:81)(cid:74)(cid:72)(cid:89)(cid:87)(cid:84)(cid:83)(cid:78)(cid:72)(cid:70)(cid:81)(cid:81)(cid:94)(cid:5)(cid:1834)(cid:81)(cid:74)(cid:73)(cid:5)(cid:92)(cid:78)(cid:89)(cid:77)(cid:5)(cid:84)(cid:87)
furnished to the Securities and Exchange Commission.

We have also posted on our website our (1) Corporate
Governance Principles, (2) Charters for the Audit Committee, 
Human Resources Committee and Governance and
Nominating Committee of the Board, (3) Code of Business 
(cid:40)(cid:84)(cid:83)(cid:73)(cid:90)(cid:72)(cid:89)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:13)(cid:25)(cid:14)(cid:5)(cid:40)(cid:84)(cid:73)(cid:74)(cid:5)(cid:84)(cid:75)(cid:5)(cid:42)(cid:89)(cid:77)(cid:78)(cid:72)(cid:88)(cid:5)(cid:75)(cid:84)(cid:87)(cid:5)(cid:56)(cid:74)(cid:83)(cid:78)(cid:84)(cid:87)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)(cid:88)
(cid:70)(cid:85)(cid:85)(cid:81)(cid:78)(cid:72)(cid:70)(cid:71)(cid:81)(cid:74)(cid:5)(cid:89)(cid:84)(cid:5)(cid:89)(cid:77)(cid:74)(cid:5)(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:42)(cid:93)(cid:74)(cid:72)(cid:90)(cid:89)(cid:78)(cid:91)(cid:74)(cid:5)(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)(cid:17)(cid:5)(cid:40)(cid:77)(cid:78)(cid:74)(cid:75)(cid:5)(cid:43)(cid:78)(cid:83)(cid:70)(cid:83)(cid:72)(cid:78)(cid:70)(cid:81)
(cid:52)(cid:75)(cid:1834)(cid:72)(cid:74)(cid:87)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:40)(cid:84)(cid:87)(cid:85)(cid:84)(cid:87)(cid:70)(cid:89)(cid:74)(cid:5)(cid:40)(cid:84)(cid:83)(cid:89)(cid:87)(cid:84)(cid:81)(cid:81)(cid:74)(cid:87)(cid:19)(cid:5)(cid:59)(cid:70)(cid:81)(cid:82)(cid:84)(cid:83)(cid:89)(cid:5)(cid:88)(cid:77)(cid:70)(cid:87)(cid:74)(cid:77)(cid:84)(cid:81)(cid:73)(cid:74)(cid:87)(cid:88)
may also obtain copies of these items at no charge 
by contacting:

Renee L. Campbell
Investor Relations

Valmont Industries, Inc.
One Valmont Plaza
Omaha, Nebraska 68154 USA

+1 402.963.1000

investorrelations@valmont.com

UNITED(cid:3)STATES(cid:3)
SECURITIES(cid:3)AND(cid:3)EXCHANGE(cid:3)COMMISSION(cid:3)
Washington,(cid:3)D.C.(cid:3)20549(cid:3)
___________________________________(cid:3)

Form(cid:3)(cid:20)(cid:19)(cid:16)(cid:46)(cid:3)

(Mark(cid:3)One)(cid:3)

(cid:4339)ANNUAL(cid:3)REPORT(cid:3)PURSUANT(cid:3)TO(cid:3)SECTION(cid:3)13(cid:3)OR(cid:3)15(d)(cid:3)OF(cid:3)THE(cid:3)SECURITIES

EXCHANGE(cid:3)ACT(cid:3)OF(cid:3)1934(cid:3)

For(cid:3)the(cid:3)fiscal(cid:3)year(cid:3)ended(cid:3)December(cid:3)28,(cid:3)2019(cid:3)(cid:3)
or(cid:3)

(cid:4337)TRANSITION(cid:3)REPORT(cid:3)PURSUANT(cid:3)TO(cid:3)SECTION(cid:3)13(cid:3)OR(cid:3)15(d)(cid:3)OF(cid:3)THE(cid:3)SECURITIES

EXCHANGE(cid:3)ACT(cid:3)OF(cid:3)1934(cid:3)

For(cid:3)the(cid:3)transition(cid:3)period(cid:3)from(cid:3)____________(cid:3)to(cid:3)(cid:3)

Commission file number (cid:20)(cid:16)(cid:22)(cid:20)(cid:23)(cid:21)(cid:28)(cid:3)(cid:3)
_____________________________________(cid:3)
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Delaware(cid:3)
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One(cid:3)Valmont(cid:3)Plaza,(cid:3)
Omaha,(cid:3)Nebraska(cid:3)
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(cid:3)68154(cid:486)5215(cid:3)
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(cid:523)(cid:21)(cid:135)(cid:137)(cid:139)(cid:149)(cid:150)(cid:148)(cid:131)(cid:144)(cid:150)(cid:495)(cid:149)(cid:3)(cid:150)(cid:135)(cid:142)(cid:135)(cid:146)(cid:138)(cid:145)(cid:144)(cid:135)(cid:3)(cid:144)(cid:151)(cid:143)(cid:132)(cid:135)(cid:148)(cid:481)(cid:3)(cid:139)(cid:144)(cid:133)(cid:142)(cid:151)(cid:134)(cid:139)(cid:144)(cid:137)(cid:3)(cid:131)(cid:148)(cid:135)(cid:131)(cid:3)(cid:133)(cid:145)(cid:134)(cid:135)(cid:524)(cid:3)

(cid:22)(cid:135)(cid:133)(cid:151)(cid:148)(cid:139)(cid:150)(cid:139)(cid:135)(cid:149)(cid:3)(cid:148)(cid:135)(cid:137)(cid:139)(cid:149)(cid:150)(cid:135)(cid:148)(cid:135)(cid:134)(cid:3)(cid:146)(cid:151)(cid:148)(cid:149)(cid:151)(cid:131)(cid:144)(cid:150)(cid:3)(cid:150)(cid:145)(cid:3)(cid:22)(cid:135)(cid:133)(cid:150)(cid:139)(cid:145)(cid:144)(cid:3)(cid:883)(cid:884)(cid:523)(cid:132)(cid:524)(cid:3)(cid:145)(cid:136)(cid:3)(cid:150)(cid:138)(cid:135)(cid:3)(cid:4)(cid:133)(cid:150)(cid:483)(cid:3)

Title(cid:3)of(cid:3)each(cid:3)class(cid:3)

(cid:6)(cid:145)(cid:143)(cid:143)(cid:145)(cid:144)(cid:3)(cid:22)(cid:150)(cid:145)(cid:133)(cid:141)(cid:3)(cid:836)(cid:883)(cid:484)(cid:882)(cid:882)(cid:3)(cid:146)(cid:131)(cid:148)(cid:3)(cid:152)(cid:131)(cid:142)(cid:151)(cid:135)(cid:3)

(cid:3)(cid:3) Symbol(cid:3)
(cid:25)(cid:16)(cid:12)(cid:3)

Name(cid:3)of(cid:3)exchange(cid:3)on(cid:3)which(cid:3)registered(cid:3)
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VALMONT INDUSTRIES, INC.
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 28, 2019 

TABLE OF CONTENTS

Business

PART I
Item 1
Item 1A Risk Factors
Item 1B Unresolved Staff Comments
Item 2
Item 3
Item 4
PART II
Item 5

Properties
Legal Proceedings
Mine Safety Disclosures

Item 6
Item 7

Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of
Operation

Item 7A Quantitative and Qualitative Disclosures About Market Risk
Item 8
Item 9

Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
Item 9A Controls and Procedures
Item 9B Other Information
Part III
Item 10 Directors, Executive Officers and Corporate Governance
Item 11
Item 12

Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

Item 13
Item 14
Part IV
Item 15
Item 16

Exhibits and Financial Statement Schedules
Form 10-K Summary

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Page
No.

2
9
16
16
17
17

18
19

22

40
41

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99
101

102
102

102
102
102

103
107

PART I

ITEM 1.  BUSINESS.

(a) 

General Description of Business

General

We are a diversified global producer of highly-engineered fabricated metal products.  In our Engineered Support 

Structures (ESS) segment, we are a leading producer of steel, aluminum and composite poles, towers, and components for the 
global lighting, traffic, and wireless communications markets. The ESS segment also produces engineered access systems, 
highway safety products, and integrated structure solutions for smart cities. Our Utilities Support Structures (Utility) segment 
manufactures steel and concrete pole structures for global utility transmission, distribution and generation platforms primarily 
in the United States. The Utility segment also produces complex steel energy generation structures sold outside the United 
States and engineered solar tracking solutions globally.  Our Irrigation segment is a global producer of mechanized irrigation 
systems, provider of water management solutions for large-scale production agriculture, and technology for precision 
agriculture. Our Coatings segment provides global galvanizing, painting and anodizing services to preserve and protect metal 
products. 

Our ESS segment sells the following products:  outdoor lighting, traffic control, and roadway safety structures, 

wireless communication structures and components, and engineered access systems. Our Utility segment sells pole structures 
to support electrical transmission and distribution lines and related power distribution equipment. Our Irrigation segment 
produces mechanized irrigation equipment and related services that deliver water, fertilizers, herbicides, and pesticides to 
agricultural crops. Our Coatings segment provides coatings services for Valmont and other industrial customers.  Customers 
and end-users of our products include municipalities and government entities globally, manufacturers of commercial lighting 
fixtures (OEM), contractors, telecommunications and utility companies, and large farming operations, as well as the general 
manufacturing sector.  In 2019, approximately 31% of our net sales were either sold in markets or produced by our 
manufacturing plants outside of North America. We were founded in 1946, went public in 1968 and our shares trade on the 
New York Stock Exchange (ticker: VMI).

Business Strategy

Our strategy is to pursue growth opportunities that leverage our existing product portfolio, knowledge of our 

principal end-markets and customers and engineering capability to increase our sales, earnings and cash flow, including:

Increasing the Market Penetration of our Existing Products.  Our strategy is to increase our market penetration by 

differentiating our products from our competitors’ products through superior customer service, engineering proficiency, 
technological innovation and consistent high quality. For example, our Utility segment increased its 2018 sales by offering 
substations that are prepackaged to simplify our customer's installation and PyraMAX transmission structures.    

Bringing our Existing Products to New Markets.  Our strategy is to expand the sales of our existing products into 
geographic areas where we do not currently serve and where end-users do not currently purchase our type of product. For 
example, we have expanded our geographic presence in Europe, the Middle East, and North Africa for lighting structures.  
This strategy led to us building manufacturing presences in China and India to expand our offering of pole structures for 
lighting, utility and wireless communication to these markets. Our Irrigation segment has a long history of developing new 
emerging markets for mechanized irrigation around the world. In recent years, these markets include Central and Eastern 
Europe and African countries. 

 Developing New Products for Markets that We Currently Serve.  Our strategy is to grow by developing new 

products for markets using our comprehensive understanding of end-user requirements and leveraging longstanding 
relationships with key distributors and end-users. In recent years we developed and sold structures for tramway applications 
in Europe. The customers for this product line include many of the state and local governments that purchase our lighting 
structures. Another example is the development and expansion of decorative lighting poles that have been introduced to our 
existing customer base. Our 2018 acquisition of Walpar, an industry leader in the design, engineering and manufacturing of 
overhead sign structures for the North America transportation market is another example of this strategy. The 2019 
acquisition of Larson Camouflage, an industry leader in wireless communication concealment solutions give us the ability to 
offer integrated solutions to mobile carriers and other wireless communication customers around the world.   

(cid:21)

Developing New Products for New Markets or Leveraging Core Competencies to Further Diversify our Business is 

a path to increase sales. For example, the establishment and growth of our Coatings segment was based on using our 
expertise in galvanizing to develop what is now a global business segment. The decorative lighting market has different 
requirements and preferences than our traditional transportation and commercial markets. For example, our joint venture with 
Tehomet provided expertise in the decorative wood pole market. The 2018 acquisition of Convert Italia SpA, gave us a 
presence in engineered solar tracking products that we believe are complementary to our existing products and provide us 
with future growth opportunities. 

Acquisitions

We have grown internally and by acquisition. Our significant business expansions during the past five years include the 

following (including the segment where the business reports):

2015

•  Acquisition of a galvanizing business located in Hammonton, New Jersey (Coatings)

2016

•  Acquisition of the remaining 30% not previously owned of IGC Galvanizing Industries (M) Sdn Bhd (Coatings)

•  Acquisition of 5.2% of the remaining 10% not previously owned of Valmont SM (Utility)

2017

•  Acquisition of a highway safety business (Aircon) that manufactures guardrails, structural metal products, and solar 

structural products in India (ESS)

2018

•  Acquisition of an integrator of prepackaged pump stations (Irrigation) 

•  Acquisition of a worldwide provider of parts for agricultural irrigation equipment, Irrigation Components 

International (ICI), located in the United States (Irrigation)   

•  Acquisition of an engineering and manufacturer of overhead sign structures (Walpar) located in Southeast United 

States (ESS) 

•  Acquisition of 75% of a provider of engineered solar tracker solutions (Convert Italia SpA) headquartered in         

Italy (Utility) 

•  Acquisition of a steel lattice structures producer located in India (Utility)  

•  Acquisition of a galvanizing business located in New Zealand (Coatings)

2019 

•  Acquisition of a wireless communication concealment solutions provider (Larson Camouflage) headquartered in 

Arizona (ESS)   

•  Acquisition of the remaining 4.8% not previously owned of Valmont SM (Utility)

•  Acquisition of a galvanizing business located in Texas (Coatings)

•  Acquisition of a manufacturer and distributor of wireless site components and safety products in Florida (ESS) 

In 2018, the Company divested of Donhad, a grinding media producer in Australia.  

(b) 

Segments

The Company has four reportable segments based on our management structure. Each segment is global in nature with a 

manager responsible for segment operational performance and allocation of capital within the segment. 

Our reportable segments are as follows:

Engineered Support Structures:  This segment consists of the manufacture and distribution of engineered metal and 
composite poles, towers, and components for global lighting, traffic, and wireless communication markets, engineered access 
systems, integrated structure solutions for smart cities, and highway safety products;

(cid:22)

 
 
 
 
 
 
Utility Support Structures:  This segment consists of the manufacture of engineered steel and concrete structures for 

global utility transmission, distribution, substations, and renewable energy generation equipment;

Coatings:  This segment consists of galvanizing, painting, and anodizing services to preserve and protect metal 

products; and

Irrigation:  This segment consists of the manufacture of agricultural irrigation equipment, parts, services and tubular 

products, water management solutions, and technology for precision agriculture.

In addition to these four reportable segments, there are other businesses and activities which are not more than 10% 

of consolidated sales, operating income or assets. This includes the manufacture of forged steel grinding media for the mining 
industry and is reported in the "Other" category until its divestiture in 2018.

(c) 

Narrative Description of Business

Information concerning the principal products produced and services rendered, markets, competition and 

distribution methods for each of our four reportable segments is set forth below.

Engineered Support Structures Segment (ESS)

Products Produced—We engineer and manufacture steel, aluminum, and composite poles and structures to which 
lighting and traffic control fixtures are attached for a wide range of outdoor lighting applications, such as streets, highways, 
parking lots, sports stadiums and commercial and residential developments. The demand for these products is driven by 
infrastructure, commercial and residential construction and by consumers’ desire for well-lit streets, highways, parking lots 
and common areas to help make these areas safer at night and to support trends toward more active lifestyles and 24-hour 
convenience. In addition to safety, customers want products that are visually appealing. In Europe, we are a leader in 
decorative lighting poles, which are attractive as well as functional. We are leveraging this expertise to expand our decorative 
product sales in North America, China, and the Middle East. Traffic poles are structures to which traffic signals and overhead 
signs are attached and aid the orderly flow of automobile traffic. These poles are typically standard designs but can also be 
engineered to be slightly modified to meet customer specifications to ensure the proper function and safety of the structure. 
Product engineering takes into account factors such as weather (e.g. wind, ice) and the products loaded on the structure 
(e.g. lighting fixtures, traffic signals, overhead signs) to determine the design of the pole. This product line also includes 
roadway safety systems, including guard rail barriers, wire rope safety barriers, crash attenuation barriers and other products. 
Highway safety systems are also designed and engineered to enhance roadway safety.

We also engineer, manufacture, and distribute a broad range of structures (poles and towers), camouflage 

concealment solutions, and components serving the wireless communication market. A wireless communication cell site 
mainly consists of a steel pole or tower, shelter (enclosure where the radio equipment is located), antennas (devices that 
receive and transmit data and voice information to and from wireless communication devices) and components (items that are 
used to mount antennas to a structure and to connect cabling and other parts from the antennas to the shelter).  Larger mono-
pole structures are engineered and designed to customer specifications, which include factors such as the number of antennas 
on the structure and wind and soil conditions. Due to the size of these mono-pole structures, design is important to ensure 
each structure meets performance and safety specifications. We do not provide any significant installation services on the 
structures we sell or manufacture.  We also produce and distribute access systems that allow people to move safely and 
effectively in an industrial, infrastructure or commercial facility. Products offered in this product line include floor gratings, 
handrails, barriers and sunscreens. We also produce a line of engineered products which are used in architectural applications. 
Examples of these products are perforated metal sun screens and facades that can be used on building structures to improve 
shading and aesthetics.  

Markets—The key markets for our lighting, traffic and roadway safety products are the transportation and 
commercial lighting markets and public roadway construction and upgrades. The transportation market includes street and 
highway lighting and traffic control, much of which is driven by government spending programs. For example, the U.S. 
government funds highway and road improvement through the federal highway program. This program provides funding to 
improve the nation’s roadway system, which includes roadway lighting and traffic control enhancements. Matching funding 
from the various states may be required as a condition of federal funding. Some states are supplementing infrastructure 
funding with revenue sources.  Public and private partnerships have recently emerged as an additional funding source. The 
current federal highway program was renewed and extended in late 2015. The current administration has recommended 

(cid:23)

 
increases to spending on roadway infrastructure. In the United States, there are approximately 4 million miles of public 
roadways, with approximately 24% carrying over 80% of the traffic. Accordingly, the need to improve traffic flow through 
traffic controls and lighting is a priority for many communities. Transportation markets in other areas of the world are also 
heavily funded by local and national governments. 

The commercial lighting market is mostly funded privately and includes lighting for applications such as parking 
lots, shopping centers, sports stadiums and business parks. The commercial lighting market is driven by macro-economic 
factors such as general economic growth rates, interest rates and the commercial construction economy. Valmont has many 
long-standing relationships with OEM’s who serve this market. Markets for access systems are typically driven by 
infrastructure, industrial and commercial construction spending. Customers include construction firms or installers who 
participate in these markets, natural gas and mineral exploration companies, resellers such as steel service centers, and end 
users. These markets can be cyclical depending on economic conditions.   

The market for our communication products is driven by increased demand for wireless communication and data. 

Customers are wireless network providers and organizations that own cell sites and attach antennas from multiple carriers to 
the pole or tower structure (build to suit companies). We also sell products to state and federal governments for two-way 
radio communication, radar, broadcasting and security applications. We believe long-term growth should mainly be driven by 
increased usage and technologies such as 5G, which demand higher network density.  Improved emergency response systems, 
as part of the U.S. Homeland Security initiatives, creates additional demand. 

All of the products that we manufacture in this segment are parts of government or customer investments in basic 

infrastructure. The total cost of these investments can be substantial, so access to capital is often important to fund 
infrastructure needs. Demand can be cyclical in these markets due to overall economic conditions.  Additionally, projects can 
sometimes be delayed due to funding or other issues.

Competition—Our competitive strategy in all of the markets we serve is to provide high value to the customer at a 

reasonable price. We compete on the basis of product quality, high levels of customer service, timely, complete, and accurate 
delivery of the product and design capability to provide the best solutions to our customers. There are numerous competitors 
in our markets, most of which are relatively small companies. Companies compete on the basis of price, product quality, 
reliable delivery, engineering design, and unique product features. Pricing can be very competitive, especially when demand 
is weak or when strong local currencies result in increased competition from imported products.

Distribution Methods—Sales and distribution activities are handled through a combination of a direct sales force and 
commissioned agents. Lighting agents represent Valmont as well as lighting fixture companies and sell other related products. 
Sales are typically to electrical distributors, who provide the pole, fixtures and other equipment to the end user as a complete 
package. Commercial lighting, wireless communication products and components, access systems and highway safety sales 
are normally made through Valmont sales employees, who work on a salary plus incentive, although some sales are made 
through independent, commissioned sales agents.

Utility Support Structures Segment (Utility)

Products Produced—We engineer and manufacture tapered steel, pre-stressed concrete and hybrid structures 

(concrete base section and steel upper sections), and steel lattice structures. These products are used to support the lines that 
carry power for electrical transmission, substation and distribution applications. Transmission refers to moving power from 
where it is produced to where it is used.  Substations transfer high voltage electricity to low voltage transmission. Electrical 
distribution carries electricity from the substation to the end-user.  We also design and engineer single axis solar tracker 
solutions for utility-scale solar applications. 

Utility structures can be very large, so product design engineering is important to the function and safety of the 

structure. Our engineering process takes into account weather and loading conditions, such as wind speeds, ice loads and the 
power lines attached to the structure, in order to arrive at the final design. In Northern Europe, we produce utility structures 
for offshore and onshore wind energy. We also manufacture complex steel structures such as rotor houses for wind turbines, 
crown-mounted compensators, winches and cranes for oil and gas exploration, and material handling equipment for 
manufacturing. 

Markets—Our sales in this segment are mainly in North America, where the key drivers in the utility business are 

significant upgrades in the electrical grid to support enhanced reliability standards, policy changes encouraging more 

(cid:24)

 
generation from renewable energy sources, interconnection of regional grids to share more efficient generation to the benefit 
of the consumer and increased electrical consumption which has outpaced the transmission investment in the past decades. 
According to the Edison Electric Institute, the electrical transmission grid in the U.S. requires significant investment in the 
coming years to respond to the compelling industry drivers and lack of investment prior to 2008.  In international markets, 
electrical consumption is expected to increase.  This will require substantial investment in new electricity generation capacity 
and growth in transmission grid development. We expect these factors to result in increased demand for electrical utility 
structures to transport electricity from source to user, as is used in the U.S. markets today. As utilities increase development 
of large-scale solar power and micro-grid applications, single axis tracker solutions will be an essential tool for achieving 
higher energy production. Sales of complex steel structures, wind turbine towers and rotor houses, material handling systems, 
utility transmission structures, and structures for oil & gas exploration mainly occur within Europe.

Competition—Our competitive strategy in this segment is to provide high value solutions to the customer at a 

reasonable price. We compete on the basis of product quality, engineering expertise, high levels of customer service and 
reliable, timely delivery of the product. There are a number of competitors in North America, but there are many competitors 
in international markets. Companies compete on the basis of price, quality and service. Utility sales are often made through a 
competitive bid process, whereby the lowest bidder is awarded the contract, provided the competitor meets all other 
qualifying criteria. In weak markets, price is a more important criteria in the bid process. We also sell on a preferred-provider 
basis to certain large utility customers. These contractual arrangements often last between 3 and 5 years and are frequently 
renewed.  For offshore and complex steel structures, we compete based on our ability to co-engineer and design solutions 
with customers.  We are one of a limited number of competitors that can execute advanced order production of complex steel 
constructions that entail electronics, hydraulics, and highly automated series production for very customized products. 

Distribution Methods—Products are normally sold directly to electrical utilities or energy providers with some sales 

sold through commissioned sales agents.

Coatings Segment (Coatings)

Services Rendered—We add finishes to metals that inhibit corrosion, extend service lives and enhance physical 

attractiveness of a wide range of materials and products. Among the services provided include:

•  Hot-dip Galvanizing

•  Anodizing

• 

Powder Coating

•  E-Coating

In our Coatings segment, we take unfinished products from our customers and return them with a galvanized, 
anodized or painted finish. Galvanizing is a process that protects steel with a zinc coating that is bonded to the product 
surface to inhibit rust and corrosion. Anodizing is a process applied to aluminum that oxidizes the surface of the aluminum in 
a controlled manner, which protects the aluminum from corrosion and allows the material to be dyed a variety of colors. We 
also paint products using powder coating and e-coating technology (where paint is applied through an electrical charge) for a 
number of industries and markets.

Markets—Markets for our products are varied and our profitability is not substantially dependent on any one 
industry or external customer. However, a meaningful percentage of demand is internal, driven by Valmont's other segments.  
Demand for coatings services generally follows the local industrial economies. Galvanizing is used in a wide variety of 
industrial applications where corrosion protection of steel is desired. While markets are varied, our markets for anodized or 
painted products are more directly dependent on consumer markets than industrial markets.

Competition—The Coatings markets traditionally have been very fragmented, with a large number of competitors. 

Most of these competitors are relatively small, privately held companies who compete on the basis of price and personal 
relationships with their customers. As a result of ongoing industry consolidation, there are also several (public and private) 
multi-facility competitors. Our strategy is to compete on the basis of quality of the coating finish and timely delivery of the 
coated product to the customer. We also use the production capacity at our network of plants to ensure that the customer 
receives quality, timely service.

(cid:25)

 
Distribution Methods—Due to freight costs, a galvanizing location has an effective service area of an approximate 

300 to 500 mile radius. While we believe that we are globally one of the largest custom galvanizers, our sales are a small 
percentage of the total market. Sales and customer service are provided directly to the user by a direct sales force, generally 
assigned to each specific location.

Irrigation Segment (Irrigation)

Products Produced—We manufacture and distribute mechanical irrigation equipment and related service parts under 
the “Valley” brand name. A Valley irrigation machine usually is powered by electricity and propels itself over a farm field and 
applies water and chemicals to crops. Water and, in some instances, chemicals are applied through sprinklers attached to a 
pipeline that is supported by a series of towers, each of which is propelled via a drive train and tires. A standard mechanized 
irrigation machine (also known as a “center pivot”) rotates in a circle, although we also manufacture and distribute center 
pivot extensions that can irrigate corners of square and rectangular farm fields as well as conform to irregular field 
boundaries (referred to as a “corner” machine). Our irrigation machines can also irrigate fields by moving up and down the 
field as opposed to rotating in a circle (referred to as a “linear” machine). Irrigation machines can be configured to irrigate 
fields in size from 4 acres to over 500 acres, with a standard size in the U.S. configured for a 160-acre tract of ground. One of 
the key components of our irrigation machine is the control system. This is the part of the machine that allows the machine to 
be operated in the manner preferred by the grower, offering control of such factors as on/off timing, individual field sector 
control, rate and depth of water and chemical application. Our advanced technology solutions include a suite of smart panels 
and remote management of irrigation machines through smartphone, tablet, or centralized computer control. Irrigation net 
sales in 2019, 2018, and 2017 included technology sales of $56.7 million, $45.3 million, and $43.4 million, respectively.  We 
also offer customized water application and scheduling services, which provide forecast information to assist growers in 
determining precision of water application on the field.  Our water management group also provides product and service sales 
related to the delivery of water through mechanized irrigation equipment.  The irrigation machine used in international 
markets is substantially the same as the one produced for the North American market.

Other Types of Irrigation — There are other forms of irrigation available to farmers, two of the most prevalent being 

flood irrigation and drip irrigation. In flood irrigation, water is applied through a pipe or canal at the top of the field and 
allowed to run down the field by gravity. Drip irrigation involves plastic pipe or tape resting on the surface of the field or 
buried a few inches below ground level, with water being applied gradually. We estimate that center pivot and linear 
irrigation comprises 50% of the irrigated acreage in North America. International markets use predominantly flood irrigation.

The Company through its ownership in AgSense LLC, develops and markets remote monitoring technology for 
pivot irrigation systems that is sold on a subscription basis.  AgSense technology allows growers to remotely monitor and 
operate irrigation equipment and other farm implements. Data management and control is achieved using applications 
running on either a desktop Internet browser or various mobile devices connected to the Internet. We also manufacture 
tubular products for industrial customers primarily in the agriculture industry as well as in the transportation and other 
industries.  

Markets—Market drivers in North America and international markets are essentially the same. Since the purchase of 

an irrigation machine is a capital expenditure, the purchase decision is based on the expected return on investment. The 
benefits a grower may realize through investment in mechanical irrigation include improved yields through better irrigation, 
cost savings through reduced labor and lower water and energy usage. The purchase decision is also affected by current and 
expected net farm income, commodity prices, interest rates, the status of government support programs and water regulations 
in local areas. In many international markets, the relative strength or weakness of local currencies as compared with the U.S. 
dollar may affect net farm income, since export markets are generally denominated in U.S. dollars. In addition, governments 
are sponsoring irrigation projects for self-sufficiency in food production. 

The demand for mechanized irrigation comes from the following sources:

• 

• 

• 

conversion from flood irrigation

replacement of existing mechanized irrigation machines

converting land that is not irrigated to mechanized irrigation

One of the key drivers in our Irrigation segment worldwide is that the usable water supply is limited. We estimate 
that:

(cid:26)

 
 
• 

• 

• 

only 2.5% of total worldwide water supply is freshwater

of that 2.5%, only 30% of freshwater is available to humans

the largest user of that freshwater is agriculture

We believe these factors, along with the trend of a growing worldwide population and improving diets, reflect the 

need to use water more efficiently while increasing food production to feed this growing population. We believe that 
mechanized irrigation can improve water application efficiency by 40-90% compared with traditional irrigation methods by 
applying water uniformly near the root zone and reducing water runoff. Furthermore, reduced water runoff improves water 
quality in nearby rivers, aquifers and streams, thereby providing environmental benefits in addition to conservation of water.

Competition—In North America, there are a number of entities that provide irrigation products and services to 
agricultural customers. We believe we are the leader of the four main participants in the mechanized irrigation business. 
Participants compete for sales on the basis of price, product innovation and features, product durability and reliability, quality 
and service capabilities of the local dealer. Pricing can become very competitive, especially in periods when market demand 
is low. In international markets, our competitors are a combination of our major U.S. competitors and privately owned local 
companies. Competitive factors are similar to those in North America, although pricing tends to be a more prevalent 
competitive strategy in international markets. Since competition in international markets is local, we believe local 
manufacturing capability is important to competing effectively in international markets and we have that capability in key 
regions.

Distribution Methods—We market our irrigation machines, technology offerings, and service parts through 
independent dealers. There are approximately 270 dealer locations in North America, with another approximately 270 dealers 
serving international markets in over 60 countries. The dealer determines the grower’s requirements, designs the 
configuration of the machine, installs the machine (including providing ancillary products that deliver water and electrical 
power to the machine) and provides after sales service. Our dealer network is supported and trained by our technical and 
sales teams. Our international dealers are supported through our regional headquarters in South America, South Africa, 
Western Europe, Australia, China and the United Arab Emirates as well as the home office in Valley, Nebraska.

General

Certain information generally applicable to each of our four reportable segments is set forth below.

Suppliers and Availability of Raw Materials.

Hot rolled steel coil and plate, zinc and other carbon steel products are the primary raw materials utilized in the 

manufacture of finished products for all segments. We purchase these essential items from steel mills, steel service centers, 
and zinc producers and these materials are usually readily available. While we may experience increased lead times to 
acquire materials and volatility in our purchase costs, we do not believe that key raw materials would be unavailable for 
extended periods. We have not experienced extended or wide-spread shortages of steel in the past several years, due to what 
we believe are strong relationships with some of the major steel producers. In the past several years, we experienced volatility 
in zinc and natural gas prices, but we did not experience any disruptions to our operations due to availability.

Patents, Licenses, Franchises and Concessions.

We have a number of patents for our manufacturing machinery, poles and irrigation designs. We also have a number 

of registered trademarks. We do not believe the loss of any individual patent or trademark would have a material adverse 
effect on our financial condition, results of operations or liquidity.

Seasonal Factors in Business.

Sales can be somewhat seasonal based upon the agricultural growing season and the infrastructure construction 

season. Sales of mechanized irrigation equipment to farmers are traditionally higher during the spring and fall and lower in 
the summer. Sales of infrastructure products are traditionally higher in the summer and fall and lower in the winter.

(cid:27)

Customers.

We are not dependent for a material part of any segment’s business upon a single customer or upon very few 

customers. The loss of any one customer would not have a material adverse effect on our financial condition, results of 
operations or liquidity.

Backlog.

The backlog of orders for the principal products manufactured and marketed was $924.1 million at the end of the 
2019 fiscal year and $644.7 million at the end of the 2018 fiscal year. An order is reported in our backlog upon receipt of a 
purchase order from the customer or execution of a sales order contract. We anticipate that most of the 2019 backlog of 
orders will be filled during fiscal year 2020. At year-end, the segments with backlog were as follows (dollar amounts in 
millions):

Engineered Support Structures
Utility Support Structures
Irrigation
Coatings

12/28/2019

12/29/2018

$

$

254.0
615.0
55.0
0.1
924.1

$

$

257.4
325.9
59.7
1.7
644.7

Environmental Disclosure.

We are subject to various federal, state and local laws and regulations pertaining to environmental protection and the 
discharge of materials into the environment. Although we continually incur expenses and make capital expenditures related to 
environmental protection, we do not anticipate that future expenditures should materially impact our financial condition, 
results of operations, or liquidity.

Number of Employees.

At December 28, 2019, we had 9,862 employees.

(d) 

Available Information

We make available, free of charge through our web site at http://www.valmont.com, our annual report on Form 10-K, 
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to 
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after such material is 
electronically filed with or furnished to the Securities and Exchange Commission.

ITEM 1A.  RISK FACTORS. 

The following risk factors describe various risks that may affect our business, financial condition and operations.

The ultimate consumers of our products operate in cyclical industries that have been subject to significant downturns 
which have adversely impacted our sales in the past and may again in the future.

Our sales are sensitive to the market conditions present in the industries in which the ultimate consumers of our 

products operate, which in some cases have been highly cyclical and subject to substantial downturns. For example, a 
significant portion of our sales of support structures is to the electric utility industry. Our sales to the U.S. electric utility 
industry were over $600 million in 2019 and 2018. Purchases of our products are deferrable to the extent that utilities may 
reduce capital expenditures for reasons such as unfavorable regulatory environments, a slow U.S. economy or financing 
constraints. In the event of weakness in the demand for utility structures due to reduced or delayed spending for electrical 
generation and transmission projects, our sales and operating income likely will decrease.

(cid:28)

The end users of our mechanized irrigation equipment are farmers. Accordingly, economic changes within the 

agriculture industry, particularly the level of farm income, may affect sales of these products. From time to time, lower levels 
of farm income resulted in reduced demand for our mechanized irrigation and tubing products. Farm income decreases when 
commodity prices, acreage planted, crop yields, government subsidies and export levels decrease. In addition, weather 
conditions, such as extreme drought may result in reduced availability of water for irrigation, and can affect farmers’ buying 
decisions. Farm income can also decrease as farmers’ operating costs increase. Increases in oil and natural gas prices result in 
higher costs of energy and nitrogen based fertilizer (which uses natural gas as a major ingredient). Furthermore, uncertainty 
as to future government agricultural policies may cause indecision on the part of farmers. The status and trend of government 
farm supports, financing aids and policies regarding the ability to use water for agricultural irrigation can affect the demand 
for our irrigation equipment. In the United States, certain parts of the country are considering policies that would restrict 
usage of water for irrigation. All of these factors may cause farmers to delay capital expenditures for farm equipment. 
Consequently, downturns in the agricultural industry will likely result in a slower, and possibly a negative, rate of growth in 
irrigation equipment and tubing sales. As of November 2019, the U.S. Department of Agriculture (the “USDA”) estimated 
U.S. 2019 net farm income to be $92.5 billion, up 10.2 percent from the USDA’s final U.S. 2018 net farm income of $84.0 
billion.

We have also experienced cyclical demand for those of our products that we sell to the wireless communications 

industry. Sales of wireless structures and components to wireless carriers and build-to-suit companies that serve the wireless 
communications industry have historically been cyclical. These customers may elect to curtail spending on new capacity to 
focus on cash flow and capital management. Changes in the competitive structure of the wireless industry, due to industry 
consolidation or reorganization, may interrupt capital plans of the wireless carriers as they assess their networks. 

The engineered access systems product lines are partially dependent on investment spending by our customers in the 

oil, natural gas, and other mined mineral exploration industries, most specifically in the Asia Pacific region.  During periods 
of continued low oil and natural gas prices, these customers may elect to curtail spending on new exploration sites which will 
cause us to experience lower demand for these specific product lines.  

Due to the cyclical nature of these markets, we have experienced, and in the future we may experience, significant 

fluctuations in our sales and operating income with respect to a substantial portion of our total product offering, and such 
fluctuations could be material and adverse to our overall financial condition, results of operations and liquidity.

Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas and fuel may 
increase our operating costs and likely reduce our net sales and profitability.

Hot rolled steel coil and other carbon steel products have historically constituted approximately one-third of the cost 
of manufacturing our products. We also use large quantities of aluminum for lighting structures and zinc for the galvanization 
of most of our steel products. Our facilities use large quantities of natural gas for heating and processing tanks in our 
galvanizing operations. We use gasoline and diesel fuel to transport raw materials to our locations and to deliver finished 
goods to our customers. The markets for these commodities can be volatile. The following factors increase the cost and 
reduce the availability of these commodities:

• 

• 

• 

• 

• 

increased demand, which occurs when we and other industries require greater quantities of these commodities, 
which can result in higher prices and lengthen the time it takes to receive these commodities from suppliers;

lower production levels of these commodities, due to reduced production capacities or shortages of materials 
needed to produce these commodities (such as coke and scrap steel for the production of steel) which could 
result in reduced supplies of these commodities, higher costs for us and increased lead times;

increased cost of major inputs, such as scrap steel, coke, iron ore and energy;

fluctuations in foreign exchange rates can impact the relative cost of these commodities, which may affect the 
cost effectiveness of imported materials and limit our options in acquiring these commodities; and

international trade disputes, import duties, tariffs, and quotas, since we import some steel and aluminum 
finished components/products for various product lines.

(cid:20)(cid:19)

Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag 

increases in our costs of these commodities. Consequently, an increase in these commodities will increase our operating costs 
and likely reduce our profitability.     

Rising steel prices in 2018 and 2017 put pressure on gross profit margins, especially in our Engineered Support 

Structures segment. The elapsed time between the quotation of a sales order and the manufacturing of the product ordered 
can be several months. As some of the sales in the Engineered Support Structures and Utility Support Structures segments are 
fixed price contracts, rapid increases in steel costs likely will result in lower operating income. Steel prices for both hot rolled 
coil and plate can also decrease substantially in a given period, which occurred in North America in 2019.  Decreases in our 
product sales pricing and volumes offset the increase in gross profit realized from the lower steel prices.  Steel is most 
significant for our Utility Support Structures segment where the cost of steel has been approximately 50% of the net sales, on 
average.  Assuming a similar sales mix, a hypothetical 20% change in the price of steel would have affected our net sales 
from our utility support structures segment by approximately $63 million for the year ended December 28, 2019.

We believe the volatility over the past several years was due to significant increases in global steel production and 

rapid changes in consumption (especially in rapidly growing economies, such as China and India). The speed with which 
steel suppliers impose price increases on us may prevent us from fully recovering these price increases particularly in our 
lighting and traffic and utility businesses.  In the same respect, rapid decreases in the price of steel can also result in reduced 
operating margins in our utility businesses due to the long production lead times.

Demand for our infrastructure products and coating services is highly dependent upon the overall level of infrastructure 
spending.

We manufacture and distribute engineered infrastructure products for lighting and traffic, utility and other specialty 

applications. Our Coatings segments serve many construction related industries. Because these products are used primarily in 
infrastructure construction, sales in these businesses are highly correlated with the level of construction activity, which 
historically has been cyclical. Construction activity by our private and government customers is affected by and can decline 
because of, a number of factors, including (but not limited to):

•  weakness in the general economy, which may negatively affect tax revenues, resulting in reduced funds 

available for construction;

• 

• 

interest rate increases, which increase the cost of construction financing; and

adverse weather conditions which slow construction activity.

The current economic uncertainty in the United States and Europe will have some negative effect on our business. In 

our North American lighting product line, some of our lighting structure sales are for new residential and commercial areas. 
When residential and commercial construction is weak, we have experienced some negative impact on our light pole sales to 
these markets. In a broader sense, in the event of an overall downturn in the economies in Europe, Australia or China, we 
may experience decreased demand if our customers in these countries have difficulty securing credit for their purchases from 
us.

In addition, sales in our Engineered Support Structures segment, particularly our lighting, traffic and highway safety 

products, are highly dependent upon federal, state, local and foreign government spending on infrastructure development 
projects, such as the U.S. federal highway funding. The level of spending on such projects may decline for a number of 
reasons beyond our control, including, among other things, budgetary constraints affecting government spending generally or 
transportation agencies in particular, decreases in tax revenues and changes in the political climate, including legislative 
delays, with respect to infrastructure appropriations. 

Design patent litigation related to guardrails could reduce demand for such products and raise litigation risk.

Certain of the Company’s foreign subsidiaries in India, New Zealand, and Australia manufacture highway safety 

products, primarily for sale in non-U.S. markets, and license certain design patents related to guardrails to third parties.  
There are currently domestic U.S. product liability lawsuits against some companies that manufacture and install certain 
guardrail products. Such lawsuits, some of which have at times involved a foreign subsidiary based on its design patent, 
could lead to a decline in demand for such products or approval for use of such products by government purchasers both 
domestically and internationally, and potentially raise litigation risk for foreign subsidiaries and negatively impact their sales 
and license fees.

(cid:20)(cid:20)

 
We may lose some of our foreign investment or our foreign sales and profits may decline because of risks of doing 
business in foreign markets, including trade relations and tariffs.

We are an international manufacturing company with operations around the world. At December 28, 2019, we 

operated over 80 manufacturing plants, located on six continents, and sold our products in more than 100 countries. In 2019, 
approximately 31% of our net sales were either sold in markets or produced by our manufacturing plants outside of North 
America. We have operations in geographic markets that have recently experienced political instability, such as the Middle 
East, and economic uncertainty, such as Western Europe, and health issues, such as the outbreak and spread of coronavirus in 
China. Our geographic diversity also requires that we hire, train and retain competent management for the various local 
markets. 

Demand for our products and our profitability are affected by trade relations between countries. We also have a 

significant manufacturing presence in Australia, Europe and China. These operations are affected by U.S. trade policies, such 
as additional tariffs on a broad range of imports, and retaliatory actions by foreign countries, most recently China, which have 
impacted sales of our products.  In addition, there can be a derived indirect impact on demand for our products arising from 
quotas, restrictions, and retaliatory tariffs (e.g. China tariffs on imported soybeans affects U.S. net farm income).  

We expect that international sales will continue to account for a significant percentage of our net sales in the future. 

Accordingly, our foreign business operations and our foreign sales and profits are subject to the following potential risks:

• 

• 

• 

• 

• 

• 

• 

political and economic instability, resulting in the reduction of the value of, or the loss of, our investment;

recessions in economies of countries in which we have business operations, decreasing our international sales;

natural disasters and public health issues in our geographic markets, negatively impacting our workforce, 
manufacturing capability, and sales; 

difficulties and costs of staffing and managing our foreign operations, increasing our foreign operating costs and 
decreasing profits;

potential violation of local laws or unsanctioned management actions that could affect our profitability or ability 
to compete in certain markets;

difficulties in enforcing our rights outside the United States for patents on our manufacturing machinery, poles 
and irrigation designs;

increases in tariffs, export controls, taxes and other trade barriers reducing our international sales and our profit 
on these sales; and

• 

acts of war or terrorism.

As a result, we may lose some of our foreign investment or our foreign sales and profits may be materially reduced 

because of risks of doing business in foreign markets.   

Failure to comply with any applicable anti-corruption legislation could result in fines, criminal penalties and an adverse 
effect on our business.

 We must comply with all applicable laws, which include the U.S. Foreign Corrupt Practices Act (FCPA), the UK 
Bribery Act or other anti-corruption laws. These anti-corruption laws generally prohibit companies and their intermediaries 
from making improper payments or providing anything of value to improperly influence government officials or private 
individuals for the purpose of obtaining or retaining a business advantage regardless of whether those practices are legal or 
culturally expected in a particular jurisdiction. Recently, there has been a substantial increase in the global enforcement of 
anti-corruption laws. Although we have a compliance program in place designed to reduce the likelihood of potential 
violations of such laws, violations of these laws could result in criminal or civil sanctions and an adverse effect on the 
company’s reputation, business and results of operations and financial condition.

(cid:20)(cid:21)

 
 
 
We are subject to currency fluctuations from our international sales, which can negatively impact our reported earnings.

We sell our products in many countries around the world. Approximately 32% of our fiscal 2019 sales were in 

markets outside the United States and are often made in foreign currencies, mainly the Australian dollar, euro, Brazilian real, 
Canadian dollar, Chinese renminbi and South African rand. Because our financial statements are denominated in U.S. dollars, 
fluctuations in currency exchange rates between the U.S. dollar and other currencies have had and will continue to have an 
impact on our reported earnings. If the U.S. dollar weakens or strengthens versus the foreign currencies mentioned above, the 
result will be an increase or decrease in our reported sales and earnings, respectively. Currency fluctuations have affected our 
financial performance in the past and may affect our financial performance in any given period. In cases where local 
currencies are strong, the relative cost of goods imported from outside our country of operation becomes lower and affects 
our ability to compete profitably in our home markets. 

We also face risks arising from the imposition of foreign exchange controls and currency devaluations. Exchange 

controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our 
foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in 
a diminished value of funds denominated in the currency of the country instituting the devaluation. Actions of this nature 
could have a material adverse effect on our results of operations and financial condition in any given period.

Our businesses require skilled labor and management talent and we may be unable to attract and retain qualified 
employees.

Our businesses require skilled factory workers and management in order to meet our customer’s needs, grow our 

sales and maintain competitive advantages. Skills such as welding, equipment maintenance and operating complex 
manufacturing machinery may be in short supply in certain geographic areas, leading to shortages of skilled labor and/or 
increased labor costs. Management talent is critical as well, to help grow our businesses and effectively plan for succession of 
key employees upon retirement. In some geographic areas, skilled management talent for certain positions may be difficult to 
find. To the extent we have difficulty in finding and retaining these skills in the workforce, there may be an adverse effect on 
our ability to grow profitably in the future.

We may incur significant warranty or contract management costs.

In our Utility Support Structures segment, we manufacture large structures for electrical transmission. These 
products may be highly engineered for very large, complex contracts and subject to terms and conditions that penalize us for 
late delivery and result in consequential and compensatory damages. From time to time, we may have a product quality issue 
on a large utility structures order and the costs of curing that issue may be significant. Our products in the Engineered 
Support Structures segment include structures for a wide range of outdoor lighting, traffic, and wireless communication 
applications. 

Our Irrigation products carry warranty provisions, some of which may span several years.  In the event we have 

wide-spread product reliability issues with certain components, we may be required to incur significant costs to remedy the 
situation.  

We face strong competition in our markets.  

We face competitive pressures from a variety of companies in each of the markets we serve. Our competitors include 
companies who provide the technologies that we provide as well as companies who provide competing technologies, such as 
drip irrigation. Our competitors include international, national, and local manufacturers, some of whom may have greater 
financial, manufacturing, marketing and technical resources than we do, or greater penetration in or familiarity with a 
particular geographic market than we have. 

In addition, certain of our competitors, particularly with respect to our utility and wireless communication product 

lines, have sought bankruptcy protection in recent years, and may emerge with reduced debt service obligations, which could 
allow them to operate at pricing levels that put pressures on our margins. Some of our customers have moved manufacturing 
operations or product sourcing overseas, which can negatively impact our sales of galvanizing and anodizing services. 

(cid:20)(cid:22)

 
 
 
 
 
 
To remain competitive, we will need to invest continuously in manufacturing, product development and customer 

service, and we may need to reduce our prices, particularly with respect to customers in industries that are experiencing 
downturns. We cannot provide assurance that we will be able to maintain our competitive position in each of the markets that 
we serve.

We could incur substantial costs as the result of violations of, or liabilities under, environmental laws.

Our facilities and operations are subject to U.S. and foreign laws and regulations relating to the protection of the 
environment, including those governing the discharge of pollutants into the air and water, the management and disposal of 
hazardous substances and wastes, and the cleanup of contamination. Failure to comply with these laws and regulations, or 
with the permits required for our operations, could result in fines or civil or criminal sanctions, third party claims for property 
damage or personal injury, and investigation and cleanup costs. Potentially significant expenditures could be required in order 
to comply with environmental laws that regulators may adopt or impose in the future.

Certain of our facilities have been in operation for many years and, over time, we and other predecessor operators of 

these facilities have generated, used, handled and disposed of hazardous and other regulated wastes. We detected 
contaminants at some of our present and former sites, principally in connection with historical operations. In addition, from 
time to time we have been named as a potentially responsible party under Superfund or similar state laws. While we are not 
aware of any contaminated sites that are not provided for in our financial statements, including third party sites, at which we 
may have material obligations, the discovery of additional contaminants or the imposition of additional cleanup obligations at 
these sites could result in significant liability beyond amounts provided for in our financial statements.

We may not realize the improved operating results that we anticipate from acquisitions we may make in the future, and we 
may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such 
businesses.

We explore opportunities to acquire businesses that we believe are related to our core competencies from time to 

time, some of which may be material to us. We expect such acquisitions will produce operating results better than those 
historically experienced or presently expected to be experienced in the future by us in the absence of the acquisition. We 
cannot provide assurance that this assumption will prove correct with respect to any acquisition.

Any future acquisitions may present significant challenges for our management due to the time and resources 

required to properly integrate management, employees, information systems, accounting controls, personnel and 
administrative functions of the acquired business with those of Valmont and to manage the combined company on a going 
forward basis. We may not be able to completely integrate and streamline overlapping functions or, if such activities are 
successfully accomplished, such integration may be more costly to accomplish than presently contemplated. We may also 
have difficulty in successfully integrating the product offerings of Valmont and acquired businesses to improve our collective 
product offering. Our efforts to integrate acquired businesses could be affected by a number of factors beyond our control, 
including general economic conditions. In addition, the process of integrating acquired businesses could cause the 
interruption of, or loss of momentum in, the activities of our existing business. The diversion of management’s attention and 
any delays or difficulties encountered in connection with the integration of acquired businesses could adversely impact our 
business, results of operations and liquidity, and the benefits we anticipate may never materialize. These factors are relevant 
to any acquisition we undertake.

In addition, although we conduct reviews of businesses we acquire, we may be subject to unexpected claims or 

liabilities, including environmental cleanup costs, as a result of these acquisitions. Such claims or liabilities could be costly to 
defend or resolve and be material in amount, and thus could materially and adversely affect our business and results of 
operations and liquidity.

We have, from time to time, maintained a substantial amount of outstanding indebtedness, which could impair our ability 
to operate our business and react to changes in our business, remain in compliance with debt covenants and make 
payments on our debt.

As of December 28, 2019, we had $787.5 million of total indebtedness outstanding. We had $556.6 million of 

capacity to borrow under our revolving credit facility at December 28, 2019. We normally borrow money to make business 
acquisitions and major capital expenditures. From time to time, our borrowings have been significant. Our level of 
indebtedness could have important consequences, including:

(cid:20)(cid:23)

 
• 

• 

our ability to satisfy our obligations under our debt agreements could be affected and any failure to comply with 
the requirements, including significant financial and other restrictive covenants, of any of our debt agreements 
and could result in an event of default under the agreements governing our indebtedness;

a substantial portion of our cash flow from operations will be required to make interest and principal payments 
and will not be available for operations, working capital, capital expenditures, expansion, or general corporate 
and other purposes, including possible future acquisitions that we believe would be beneficial to our business;

• 

our ability to obtain additional financing in the future may be impaired;

•  we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage;

• 

• 

our flexibility in planning for, or reacting to, changes in our business and industry may be limited; and

our degree of leverage may make us more vulnerable in the event of a downturn in our business, our industry or 
the economy in general.

We had $353.5 million of cash at December 28, 2019, which mitigates a portion of the risk associated with our debt. 

Approximately 47% of our consolidated cash balances are outside the United States and most of our interest bearing debt is 
borrowed by U.S. entities. In the event that we would have to repatriate cash from international operations to meet cash needs 
in the U.S., we may be subject to legal, contractual or other restrictions.  In addition, as we use cash for acquisitions and other 
purposes, any of these factors could have a material adverse effect on our business, financial condition, results of operations, 
cash flows and business prospects.

The restrictions and covenants in our debt agreements could limit our ability to obtain future financings, make 

needed capital expenditures, withstand a future downturn in our business, or the economy in general, or otherwise conduct 
necessary corporate activities. These covenants may prevent us from taking advantage of business opportunities that arise.

A breach of any of these covenants would result in a default under the applicable debt agreement. A default, if not 

waived, could result in acceleration of the debt outstanding under the agreement and in a default with respect to, and 
acceleration of, the debt outstanding under our other debt agreements. The accelerated debt would become immediately due 
and payable. If that should occur, we may not be able to pay all such debt or to borrow sufficient funds to refinance it. Even if 
new financing were then available, it may not be on terms that are favorable to us.

We assumed an underfunded pension liability as part of the 2010 Delta acquisition and the combined company may be 
required to increase funding of the plan and/or be subject to restrictions on the use of excess cash.

Delta is the sponsor of a United Kingdom defined benefit pension plan that, as of December 28, 2019, covered 

approximately 6,500 inactive or retired former Delta employees. The plan has no active employees as members.  At 
December 28, 2019, this plan was, for accounting purposes, underfunded by approximately £107.1 million ($140.0 million). 
The current agreement with the trustees of the pension plan for annual funding is approximately £13.1 million ($17.1 million) 
in respect of the funding shortfall and approximately £1.3 million ($1.7 million) in respect of administrative expenses. 
Although this funding obligation was considered in the acquisition price for the Delta shares, the underfunded position may 
adversely affect the combined company as follows:

•  Laws and regulations in the United Kingdom normally require the plan trustees and us to agree on a new 
funding plan every three years. The next funding plan will be developed in 2022. Changes in actuarial 
assumptions, including future discount, inflation and interest rates, investment returns and mortality rates, may 
increase the underfunded position of the pension plan and cause the combined company to increase its funding 
levels in the pension plan to cover underfunded liabilities.

•  The United Kingdom regulates the pension plan and the trustees represent the interests of covered workers. 

Laws and regulations, under certain circumstances, could create an immediate funding obligation to the pension 
plan which could be significantly greater than the £107.1 million ($140.0 million) assumed for accounting 
purposes as of December 28, 2019. Such immediate funding is calculated by reference to the cost of buying out 
liabilities on the insurance market, and could affect our ability to fund the Company’s future growth of the 
business or finance other obligations. 

(cid:20)(cid:24)

Our operations could be adversely affected if our information technology systems are compromised or otherwise subjected 
to cyber crimes.

Cyber crime continually increases in sophistication and may pose a significant risk to the security of our information 

technology systems and networks, which if breached could materially adversely affect the confidentiality, availability and 
integrity of our data.  Our operations involve transferring data across national borders, and we must comply with increasingly 
complex and rigorous standards to protect business and personal data in the U.S. and foreign countries, including members of 
the European Union.  We protect our sensitive information and confidential personal data, our facilities and information 
technology systems, but we may be vulnerable to future security breaches.  This could lead to legal risk, fines and penalties, 
negative publicity, theft, modification or destruction of proprietary information or key information, manufacture of defective 
products, production downtimes and operational disruptions, which could adversely affect our reputation, competitiveness 
and results of operations.

Regulatory and business developments regarding climate change could adversely impact our operations and demand for 
our products.

Regulatory and business developments regarding climate change could adversely impact our operations.  We follow 

the scientific discussion on climate change and related legislative and regulatory enactments, including those under 
consideration, to deliberate the potential impact on our operations and demand for our products. The scientific discussion on 
the presence and scope of climate change and the attention that domestic and international legislatures and regulatory 
authorities have given to enacting or considering laws or rules related to climate change are expected to continue. The 
production and market for our products are subject to the impact of laws and rules related to climate change. Our customers, 
and our operating segments, are exposed to risks of increased costs to comply with such laws and rules, including increased 
costs for raw materials and transportation, as well as exposure to damage to our respective business reputations upon any 
failure of compliance.  Other adverse consequences of climate change could include an increased frequency of severe 
weather events and rising sea levels that could affect operations at our manufacturing facilities, the price of insuring company 
assets, or other unforeseen disruptions of the Company’s operations, systems, property, or equipment. 

ITEM 1B.  UNRESOLVED STAFF COMMENTS.

None.

ITEM 2.  PROPERTIES.

Our corporate headquarters are currently located in a leased facility in Omaha, Nebraska, under a lease expiring in 

2021.  Our corporate headquarters will move to a new leased facility in Omaha, Nebraska, expected to open in 2021.  The 
headquarters of the Company’s reportable segments are located in Valley, Nebraska. We also maintain a management 
headquarters in Sydney, Australia. Most of our significant manufacturing locations are owned or are subject to long-term 
renewable leases. Our principal manufacturing locations are in Valley, Nebraska, McCook, Nebraska, Tulsa, Oklahoma, 
Brenham, Texas, Charmeil, France, Monterrey, Mexico, and Shanghai, China. All of these facilities are owned by us. We 
believe that our manufacturing capabilities and capacities are adequate for us to effectively serve our customers. Our capital 
spending programs consist of investment for replacement, achieving operational efficiencies and expanding capacities where 
needed. Our principal operating locations by reportable segment are listed below.

Engineered Support Structures segment North America manufacturing locations are in Nebraska, Texas, Alabama, 

Indiana, Minnesota, Oregon, South Carolina, Washington, Arizona and Canada. The largest of these operations are in Valley, 
Nebraska and Brenham, Texas, both of which are owned facilities. We have communication components distribution 
locations in New York, California, Florida, Georgia, and Texas. International locations are in France, the Netherlands, 
Finland, Estonia, England, Germany, Poland, Morocco, Australia, Indonesia, the Philippines, Thailand, Malaysia, India and 
China. The largest of these operations are in Charmeil, France and Shanghai, China, both of which are owned facilities.

Utility Support Structures segment North America manufacturing locations are in Alabama, Georgia, Florida, 

California, Texas, Oklahoma, Tennessee, Kansas, Nebraska and Mexico. The largest of these operations are in Tulsa, 
Oklahoma and Monterrey, Mexico. The Tulsa and Monterrey facilities are owned. The largest principal international 
manufacturing location is Denmark which is owned and there are also manufacturing locations in China, Italy and India.

(cid:20)(cid:25)

 
 
Coatings segment North America operations include U.S. operations located in Nebraska, California, Minnesota, 

Iowa, Indiana, Illinois, Kansas, New Jersey, Oregon, Utah, Oklahoma, Texas, Virginia, Alabama, Florida and South Carolina 
and two locations near Toronto, Canada. International operations are located in Australia, Malaysia, the Philippines and India.

Irrigation segment North America manufacturing operations are located in Valley, Nebraska, McCook, Nebraska and 

Indiana. Our principal manufacturing operations serving international markets are located in Uberaba, Brazil, Nigel, South 
Africa, Jebel Ali, United Arab Emirates, and Shandong, China. All facilities are owned except for China, which is leased.

Our operations in the "other" category were located in Australia, prior to divestiture in 2018. 

ITEM 3.  LEGAL PROCEEDINGS.

We are not a party to, nor are any of our properties subject to, any material legal proceedings. We are, from time to 

time, engaged in routine litigation incidental to our businesses.

ITEM 4.  MINE SAFETY DISCLOSURES.

Not Applicable.

Information about our Executive Officers

Our executive officers during fiscal 2019, their ages, positions held, and the business experience of each during the 

past five years are, as follows:

Stephen G. Kaniewski, age 48, President and Chief Executive Officer since December 31, 2017, previously 
President and Chief Operating Officer since October 2016.  Utility Support Structures Group President, August 2015 
to October 2016. Vice President of Global Operations for the Irrigation segment in 2014.

Mark C. Jaksich, age 62, Executive Vice President and Chief Financial Officer since February 2014.

Timothy P. Francis, age 43, Senior Vice President and Controller since June 2014. 

T. Mitchell Parnell, age 54, Senior Vice President Human Resources since January 2019.  Vice President Human 
Resources, Valmont Engineered Support Structures 2016 - 2018, Vice President Human Resources PPC - Belden 
2010 to 2015.

Claudio O. Laterreur, age 53, Senior Vice President and Chief Information Officer since May 2019. US Industrial 
Products Partner at IBM and North America Vice President for manufacturing at Neoris, from 2013 - 2019.

R. Andrew Massey, age 50, Vice President and Chief Legal & Compliance Officer since 2006.

Teresa M. Hecker, age 51, Vice President Internal Audit since October 2018. Previously Audit Director since 
December 2017. Audit Director of Conagra Brands, Inc. (CAG) from 2013 to December 2017.

Ellen S. Dasher, age 50, Vice President Global Taxation since December 2015, previously Assistant Director of 
Taxation.

(cid:20)(cid:26)

 
 
PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER 

MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is traded on the New York Stock Exchange under the symbol “VMI”. We had approximately 

21,631 shareholders of common stock at December 28, 2019. 

Issuer Purchases of Equity Securities

Period
September 29, 2019 to October 26, 2019
October 27, 2019 to November 30, 2019

December 1, 2019 to December 28, 2019

(a)
Total Number
of
Shares
Purchased

44,673

12,909

—

(b)
Average Price
paid per share
133.79
$

136.84

—

Total

57,582

$

134.47

57,582

$

(c)
Total Number
of
Shares
Purchased
as Part of
Publicly
Announced
Plans or
Programs

(d)
Approximate Dollar
Value of Maximum
Number of
Shares that May Yet
Be Purchased Under
the Plans or
Programs

44,673

$

12,909

—

206,217,000

204,451,000

204,451,000

204,451,000

On May 13, 2014, we announced a capital allocation philosophy which covered both the quarterly dividend rate as 
well as a share repurchase program.  The Board of Directors at that time authorized the purchase of up to $500 million of the 
Company's outstanding common stock from time to time over twelve months at prevailing market prices, through open 
market or privately-negotiated transactions.  On February 24, 2015 and again on October 31, 2018, the Board of Directors 
authorized additional purchases of up to $250 million of the Company's outstanding common stock with no stated expiration 
date. As of December 28, 2019, we have acquired 5,922,454 shares for approximately $795.5 million under this share 
repurchase program.

(cid:20)(cid:27)

ITEM 6.  SELECTED FINANCIAL DATA.

SELECTED FIVE-YEAR FINANCIAL DATA

(Dollars in thousands, except per share amounts)
Operating Data

2019

2018

2017

2016

2015

(3)

(4)

Net sales

Operating income (1)

Net earnings attributable to Valmont Industries, Inc. (2)

Depreciation and amortization

Capital expenditures

$ 2,766,976

$2,757,144

$ 2,745,967

$2,521,676

$ 2,618,924

237,720

153,769

82,264

97,425

202,280

94,351

82,827

71,985

267,080

116,240

84,957

55,266

245,374

173,232

82,417

57,920

131,695

40,117

91,144

45,468

Per Share Data

Earnings:

Basic (2)

Diluted (2)

Cash dividends declared

Financial Position

Working capital

Property, plant and equipment, net

Total assets

$

$

7.10

7.06

1.500

4.23

4.20

1.500

$

$

5.16

5.11

1.500

7.68

7.63

1.500

$

1.72

1.71

1.500

$ 874,640

$ 931,605

$ 1,069,567

$ 903,368

$ 860,298

558,129

513,992

518,928

518,335

532,489

2,763,411

2,530,274

2,602,250

2,391,731

2,392,382

Long-term debt, including current installments

765,704

742,601

754,854

Total Valmont Industries, Inc. shareholders’ equity.

1,111,484

1,059,762

1,112,836

755,646

943,482

757,995

918,441

Cash flow data:

Net cash flows from operating activities

Net cash flows from investing activities

Net cash flows from financing activities

Financial Measures

Invested capital(a)

Return on invested capital(a)

Adjusted EBITDA(b)

Return on beginning shareholders’ equity(c)

Leverage ratio (d)

Year End Data

Shares outstanding (000)

Approximate number of shareholders

Number of employees

$ 307,614

$ 153,008

$ 133,148

$ 232,820

$ 272,267

(168,150)

(98,950)

(155,445)

(162,110)

(49,615)

(32,010)

(53,049)

(95,158)

(48,171)

(220,005)

$ 1,944,369

$1,888,802

$ 1,906,810

$1,738,978

$ 1,724,182

9.4%

7.8%

10.5%

9.8%

4.8%

$ 326,393

$ 336,236

$ 351,987

$ 326,629

$ 285,115

14.5%

2.41

8.5%

2.24

12.3%

2.15

18.9%

2.32

3.3%

2.66

21,544

21,631

9,862

21,942

21,569

10,328

22,694

24,801

10,690

22,521

26,057

10,552

22,857

27,010

10,697

(1) Fiscal 2018 operating income included impairments of goodwill and intangible assets of $15,780 and restructuring expenses of $34,031.  
Fiscal 2015 operating income included impairments of goodwill and intangible assets of $41,970 and restructuring expenses of $39,852.  

(2) Fiscal 2018 included impairments of goodwill and intangible assets of $14,736 after-tax ($0.66 per share), restructuring expenses and 
non-recurring asset impairments from exiting certain local markets of $37,779 after-tax ($1.68 per share), refinancing of long-term debt 
expenses of $11,115 after-tax ($0.50 per share), and a loss from the divestiture of the grinding media business of $5,350 after-tax ($0.24 per 
share).  Fiscal 2017 included $41,935 of tax expense ($1.85 per share) associated with recording the impact of the 2017 Tax Act.  Fiscal 
2016 included deferred income tax benefit of $30,590 ($1.35 per share) resulting primarily from the re-measurement of the deferred tax 
asset for the Company's U.K. defined benefit pension plan. In addition, fiscal 2016 included $9,888 ($0.44 per share) recorded as a 
valuation allowance against a tax credit asset. Fiscal 2016 also included the reversal of a contingent liability that was recognized as part of 
the Delta purchase accounting of $16,591 ($0.73 per share) which is not taxable. Fiscal 2015 included impairments of goodwill and 
intangible assets of $40,140 after-tax ($1.72 per share), restructuring expenses of $28,167 after-tax ($1.20 per share), and deferred income 
tax expense of $7,120 ($0.31 per share) for a change in U.K. tax rates. 

(cid:20)(cid:28)

 
(3) The Company adopted Accounting Standards Codification ("ASC") Topic 606, Revenue From Contracts with Customers, on a modified 
retrospective basis as of the first day of fiscal 2018.  Revenue recognition for the prior three years presented in this table was under a 
different basis which was ASC Topic 605.  Please see footnote 1 to the financial statements for further information.     

(4) Fiscal 2016 was a 53 week fiscal year. 

a) 

Return on Invested Capital is calculated as Operating Income (after-tax) divided by the average of beginning and ending Invested 
Capital. Invested Capital represents total assets minus total liabilities (excluding interest-bearing debt). Return on Invested 
Capital is one of our key operating ratios, as it allows investors to analyze our operating performance in light of the amount of 
investment required to generate our operating profit. Return on Invested Capital is also a measurement used to determine 
management incentives. Return on Invested Capital is a non-GAAP measure. Accordingly, Invested Capital and Return on 
Invested Capital should not be considered in isolation or as a substitute for net earnings, cash flows from operations or other 
income or cash flow data prepared in accordance with GAAP or as a measure of our operating performance or liquidity. The table 
below shows how Invested Capital and Return on Invested Capital are calculated from our income statement and balance sheet.

Operating income

Adjusted effective tax rate (1)

Tax effect on operating income

After-tax operating income

Average invested capital

Return on invested capital

Total assets

Less: Accounts payable

Less: Accrued expenses

Less: Defined benefit pension liability

Less: Deferred compensation

Less: Other noncurrent liabilities

Less: Dividends payable

Less: Lease liability

Less: Deferred tax liability

Total Invested capital

Beginning of year invested capital

Average invested capital

2019
$ 237,720

2018
$ 202,280

2017
$ 267,080

2016
$ 245,374

2015
$ 131,695

24.0%

27.1%

28.1%

30.8%

32.0%

(57,053)

180,667

(54,818)

147,462

(75,049)

192,031

(75,575)

169,799

(42,142)

89,553

1,916,586

1,897,806

1,822,894

1,731,580

1,874,331

9.4%

7.8%

10.5%

9.8%

4.8%

2,763,411

2,530,274

2,602,250

2,391,731

2,392,382

(197,957)

(285,209)

(140,007)

(45,114)

(8,904)

(8,079)

(85,817)

(47,955)

(218,115)

(171,233)

(143,904)

(46,107)

(10,394)

(8,230)

—

(227,906)

(165,455)

(189,552)

(48,526)

(20,585)

(8,510)

—

(177,488)

(162,318)

(209,470)

(44,319)

(14,910)

(8,445)

—

(179,983)

(175,947)

(179,323)

(48,417)

(40,290)

(8,571)

—

(43,489)

(34,906)

(35,803)

(35,669)

$1,944,369

$1,888,802

$1,906,810

$1,738,978

$1,724,182

$1,888,802

$1,906,810

$1,738,978

$1,724,182

$2,024,479

$1,916,586

$1,897,806

$1,822,894

$1,731,580

$1,874,331

(1) The adjusted effective tax rate for 2018 excludes the effects of the $14,355 goodwill impairment which is not deductible for income tax 
purposes.  The effective tax rate in 2018 including this item is 30.1%. The adjusted effective tax rate for 2017 excludes the $41,935 of tax expense 
associated with recording the impact of the 2017 Tax Act.  The effective tax rate in 2017 including these items is 46.5%. The adjusted effective tax 
rate for 2016 excludes deferred income tax benefit of $30,590 resulting primarily from the re-measurement of the deferred tax asset for the 
Company's U.K. defined benefit pension plan. In addition, fiscal 2016 excludes $9,888 recorded as a valuation allowance against a tax credit asset. 
Fiscal 2016 also excludes the reversal of a contingent liability that was recognized as part of the Delta purchase accounting of $16,591, which is not 
taxable. The effective tax rate in 2016 including these items is 19.1%. The adjusted effective tax rate in 2015 excludes the effects of the goodwill 
impairments which are not deductible for income tax purposes and the $7,120 million deferred income tax expense recognized as a result of the 
U.K. corporate tax rate decreasing from 20% to 18%.  The effective tax rate in 2015 including these items is 51.0%. 

Return on invested capital, as presented, may not be comparable to similarly titled measures of other companies.

(b) 

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

(cid:21)(cid:19)

Net cash flows from operations

Interest expense

Income tax expense

Loss on investment

Change in fair value of contingent consideration

Loss on divestiture of grinding media business

Impairment of goodwill and intangible assets

Impairment of property, plant and equipment

Deferred income tax (expense) benefit

Noncontrolling interest

Equity in earnings of nonconsolidated subsidiaries

Stock-based compensation

Pension plan expense

Contribution to pension plan

Changes in assets and liabilities, net of acquisitions

Other

EBITDA

Reversal of contingent liability

Impairment of goodwill and intangible assets

Cash restructuring expenses

Impairment of assets - restructuring activities

Loss on divestiture of grinding media business

EBITDA from acquisitions (months not owned by Company)

Adjusted EBITDA

Net earnings attributable to Valmont Industries, Inc.

Interest expense

Income tax expense

Depreciation and amortization expense

EBITDA

Reversal of contingent liability

Impairment of goodwill and intangible assets

Cash restructuring expenses

Impairment of assets - restructuring activities

Loss on divestiture of grinding media business

EBITDA from acquisitions (months not owned by Company)

Adjusted EBITDA

2019

2018

2017

2016

2015

$ 307,614

$ 153,008

$ 133,148

$ 232,820

$ 272,267

40,153

50,207

172

—

—

—

—

(3,940)

(5,697)

—

44,237

43,135

44,645

106,145

44,409

42,063

44,621

47,427

62

—

(6,084)

(15,780)

(5,000)

(237)

(586)

(4,555)

—

—

—

—

3,242

—

—

—

—

(41,970)

(1,099)

(19,836)

1,659

(39,755)

23,685

(5,955)

(6,079)

(5,159)

—

—

(11,587)

(10,392)

(10,706)

513

18,461

2,251

1,537

(72,016)

61,647

2,513

225

(648)

40,245

81,305

3,924

(4,858)

(5,216)

(247)

(7,244)

610

—

(9,931)

(1,870)

1,488

16,500

13,690

(71,863)

(631)

(2,327)

326,393

264,550

351,987

342,121

223,309

—

—

—

—

—

—

—

15,780

29,031

12,944

6,084

7,847

—

—

—

—

—

—

(16,591)

—

—

—

41,970

—

1,099

19,836

—

—

—

—

$ 326,393

$ 336,236

$ 351,987

$ 326,629

$ 285,115

2019

2018

2017

2016

2015

$ 153,769

$

94,351

$ 116,240

$ 173,232

$ 40,117

40,153

50,207

82,264

44,237

43,135

82,827

44,645

106,145

84,957

44,409

42,063

82,417

44,621

47,427

91,144

326,393

264,550

351,987

342,121

223,309

—

—

—

—

—

—

—

15,780

29,031

12,944

6,084

7,847

—

—

—

—

—

—

(16,591)

—

—

—

41,970

—

1,099

19,836

—

—

—

—

$ 326,393

$ 336,236

$ 351,987

$ 326,629

$ 285,115

Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. During 2018, we incurred $14,820 of costs 
associated with refinancing of debt. This category of expense is not in the definition of EBITDA for debt covenant calculation purposes per our debt 
agreements. As such, it was not added back in the Adjusted EBITDA reconciliation to cash flows from operations or net earnings for the year ended 
December 29, 2018. In October 2017, our revolving credit facility was amended to allow the Company to add-back non-recurring cash restructuring costs in 
2018.  

(c) 

Return on beginning shareholders’ equity is calculated by dividing Net earnings attributable to Valmont Industries, Inc. by the prior year’s ending 
Total Valmont Industries, Inc. shareholders’ equity.

(cid:21)(cid:20)

(d) 

Leverage ratio is calculated as the sum of current portion of long-term debt, notes payable to bank, and long-term debt divided by Adjusted 
EBITDA. The leverage ratio is one of the key financial ratios in the covenants under our major debt agreements and the ratio cannot exceed 3.5 
(or 3.75x after certain material acquisitions) for any reporting period (four quarters). If those covenants are violated, we may incur additional 
financing costs or be required to pay the debt before its maturity date. Leverage ratio is a non-GAAP measure and, accordingly, should not be 
considered in isolation or as a substitute for net earnings, cash flows from operations or other income or cash flow data prepared in accordance 
with GAAP or as a measure of our operating performance or liquidity. The calculation of this ratio is as follows:

2019

2018

2017

2016

2015

Current portion of long-term debt

$

760

$

779

$

Notes payable to bank

Long-term debt

Total interest bearing debt

Adjusted EBITDA

Leverage Ratio

21,774

764,944

787,478

326,393

2.41

10,678

741,822

753,279

336,236

2.24

$

966

161

$

851

746

753,888

755,015

351,987

2.15

754,795

756,392

326,629

2.32

1,077

976

756,918

758,971

285,115

2.66

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

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATION.

MANAGEMENT’S DISCUSSION AND ANALYSIS

Forward Looking Statements

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

The following discussion and analysis provides information which management believes is relevant to an 
assessment and understanding of our consolidated results of operations and financial position. This discussion should be read 
in conjunction with the Consolidated Financial Statements and related Notes.  

(cid:21)(cid:21)

General 

Consolidated

Net sales

Gross profit

as a percent of sales 

SG&A expense

as a percent of sales 

Operating income

as a percent of sales 

Net interest expense

Effective tax rate

Net earnings attributable to Valmont Industries, Inc

Diluted earnings per share

Engineered Support Structures Segment

Net sales

Gross profit

SG&A expense

Operating income

Utility Support Structures Segment

Net sales

Gross profit

SG&A expense

Operating income

Coatings Segment

Net sales

Gross profit
SG&A expense

Operating income

Irrigation Segment

Net sales

Gross profit

SG&A expense

Operating income

Other

Net sales

Gross profit

SG&A expense

Operating income

Adjustment to LIFO inventory valuation method

Gross profit

Operating income

Net corporate expense

Gross profit

SG&A expense

Operating loss

2019

2018

Change
2019 - 2018

2017

Change
2018 - 2017

Dollars in millions, except per share amounts

$ 2,767.0

$ 2,757.1

0.4 % $ 2,746.0

692.5

25.0%

454.8

16.4%

237.7

8.6%

36.2

24.0%

153.8

7.06

$

$ 1,002.1

229.0

163.4

65.6

$

$

658.3

23.9%

456.0

16.5%

202.3

7.3%

39.6

30.1%

94.4

4.20

967.3

213.1

178.3

34.8

0.4 %

(3.4)%

5.2 %

681.8

24.8%

(0.3)%

414.7

10.0 %

15.1%

17.5 %

267.1

(24.3)%

(8.6)%

9.7%

39.9

46.5%

62.9 %

68.1 % $

116.2

5.11

3.6 % $

912.2

7.5 %

(8.4)%

88.5 %

225.9

162.9

63.0

$

885.6

$

855.2

3.6 % $

856.3

187.6

99.8

87.8

170.5

105.7

64.8

10.0 %

(5.6)%

35.5 %

178.4

80.6

97.8

$

300.6

$

286.7

4.8 % $

256.8

94.2

43.2

51.0

91.0

35.7

55.3

3.5 %

21.0 %

(7.8)%

78.4

28.2

50.2

$

578.7

$

624.8

(7.4)% $

644.4

171.9

100.2

71.7

192.8

95.1

97.7

(10.8)%

5.4 %

(26.6)%

197.3

95.8

101.5

$

— $

23.1

(100.0)% $

76.3

—

—

—

9.8

9.8

$

0.8

1.7

(0.9)

(9.9)

(9.9)

(100.0)%

(100.0)%

(100.0)%

7.4

5.3

2.1

199.0 % $

199.0 %

(5.7)

(5.7)

(73.7)%

(73.7)%

— $

48.2

(48.2)

—

39.5

(39.5)

—

$

22.0 %

22.0 %

0.1

41.9

(41.8)

(100.0)%

(5.7)%

(5.5)%

(0.8)%

(18.8)%

(17.8)%

6.0 %

(5.7)%

9.5 %

(44.8)%

(0.1)%

(4.4)%

31.1 %

(33.7)%

11.6 %

16.1 %

26.6 %

10.2 %

(3.0)%

(2.3)%

(0.7)%

(3.7)%

(69.7)%

(89.2)%

(67.9)%

(142.9)%

$

$

(cid:21)(cid:22)

RESULTS OF OPERATIONS

FISCAL 2019 COMPARED WITH FISCAL 2018

Overview

The increase in net sales in 2019, as compared with 2018, was due to higher sales in the ESS, Utility, and Coatings 
segments that were substantially offset by lower sales in the Irrigation and Other segments. The changes in net sales in 2019, 
as compared with 2018, were as follows:

Sales - 2018

Volume
Pricing/mix

Acquisition/(divestiture)
Currency translation

Sales - 2019

Total

ESS

Utility

Coatings

Irrigation

Other

$

2,757.1 $

967.3 $

(102.1)
82.0

76.3
(46.3)

$

2,767.0 $

18.1
17.6

27.4
(28.3)
1,002.1 $

855.2 $
(60.3)
51.5

43.9
(4.7)
885.6 $

286.7 $
(15.8)
11.5

23.9
(5.7)
300.6 $

624.8 $
(44.1)
1.4

4.2
(7.6)
578.7 $

23.1

—
—
(23.1)
—

—

Volume effects are estimated based on a physical production or sales measure. Since products we sell are not 

uniform in nature, pricing and mix relate to a combination of changes in sales prices and the attributes of the product sold. 
Accordingly, pricing and mix changes do not necessarily directly result in operating income changes.   

 Average steel index prices for both hot rolled coil and plate were lower in North America and China in 2019, as 

compared to 2018, resulting in lower average costs of sales and improved gross profit.

       The Company acquired the following companies during 2019 and 2018:

•  A majority ownership stake in Torrent Engineering and Equipment ("Torrent") in the first quarter of 2018 

(Irrigation).

•  Derit Infrastructure Pvt. Ltd. ("Derit") in the third quarter of 2018, which operates a lattice steel manufacturing 

facility located in India (Utility and Coatings). 

•  A majority ownership stake in Convert Italia SpA ("Convert") in the third quarter of 2018, a provider of engineered 

solar tracker solutions (Utility). 

•  Walpar in the third quarter of 2018, a domestic manufacturer of overhead sign structures (ESS). 
•  CSP Coating Systems ("CSP Coatings") in the fourth quarter of 2018, a coatings provider in New Zealand 

(Coatings).

•  Larson Camouflage ("Larson") in the first quarter of 2019, an industry leading provider of architectural and 

camouflage concealment solutions for the wireless telecommunication market (ESS).

•  United Galvanizing ("United") in the first quarter of 2019, a domestic coatings provider (Coatings).
•  Connect-It Wireless, Inc. ("Connect-It") in the second quarter of 2019, a domestic communication components 

business (ESS).

The Company divested of its grinding media business in the second quarter of 2018, which resulted in a pre-tax loss 

of approximately $6.1 million. The grinding media business is reported in Other and the loss was recorded in other income 
(expenses) on the Consolidated Statements of Earnings.

Restructuring Plan 

In February 2018, the Company announced a restructuring plan related to certain operations in 2018, primarily in the 

ESS segment, through consolidation and other cost-reduction activities (the "2018 Plan"). The Company incurred pre-tax 
expenses from the 2018 Plan of $34.0 million in 2018. 

(cid:21)(cid:23)

 
 
 
 
 
Currency Translation 

In 2019, we realized a reduction in operating profit, as compared with fiscal 2018, due to currency translation 

effects. The breakdown of this effect by segment was as follows:

Total

ESS

Utility

Coatings

Irrigation

Other

Corporate

Full year

$

(1.9) $

(0.8) $

0.1 $

(0.5) $

(0.8) $

— $

0.1

Gross Profit, SG&A, and Operating Income  

At a consolidated level, the increase in gross margin (gross profit as a percent of sales) in 2019, as compared with 

2018, can be attributed to restructuring costs incurred in 2018 of $18.4 million, lower raw material costs, and improved 
selling prices across our infrastructure businesses. The ESS and Utility segments realized an increase in gross margin in 2019, 
while Irrigation and Coatings realized a decrease in gross margin.

The Company saw a decrease in selling, general, and administrative (SG&A) expense in 2019, as compared to 2018. 

The decrease was driven by higher nonrecurring expenses in 2018 including impairment of the goodwill and trade name of 
the offshore and other complex structures ("Offshore") business totaling $15.8 million, restructuring costs of $15.6 million, 
expenses from recently acquired businesses of $9.0 million, and acquisition diligence expenses of $4.4 million. The decrease 
was partially offset by higher deferred compensation expenses of $6.8 million (offset recognized in other expense as 
described below), and higher compensation and project related costs in 2019.

 Operating income was higher for the ESS and Utility segments and lower for the Irrigation and Coatings segments 
in 2019, as compared to 2018. The overall increase in operating income can be attributed to the Offshore goodwill and trade 
name impairment and restructuring costs incurred in 2018 and a lower cost structure resulting from those activities in 2019.

Net Interest Expense and Debt 

Net interest expense for 2019 was lower than 2018 due to a debt refinancing in the third quarter of 2018 that 

included retiring $250.2 million senior unsecured notes due 2020 at 6.625% and issuing new senior unsecured notes of 
$200.0 million due 2044 and $55.0 million due 2054 at 5.0% and 5.25%, respectively.  Costs associated with the refinancing 
of debt totaled $14.8 million. In addition, the Company entered into certain cross currency swaps in 2018 that effectively 
swaps the Company's U.S. denominated debt for Euro and Danish kroner debt at lower interest rates which reduces interest 
expense. Interest income was lower in 2019 due to having less cash on hand to invest during the year.

Other Income/Expense 

The increase in other income in 2019, as compared with 2018, is due to the change in valuation of deferred 

compensation assets in 2019 that resulted in additional income of $6.8 million. This amount is offset by a reduction of the 
same amount in SG&A expense. The Company also divested of its grinding media business in 2018 that resulted in a loss of 
$6.1 million.

Income Tax Expense 

Our effective income tax rate in 2019 and 2018 was 24.0% and 30.1%, respectively. The 2018 tax rate was higher 

due to certain restructuring costs and impairment charges for which no tax benefits were recorded.

Earnings Attributable to Noncontrolling Interests

Noncontrolling interest expense in 2019 was consistent with 2018.

(cid:21)(cid:24)

 
    
 
 
 
 
 
 
 
 
 
Cash Flows from Operations

Our cash flows provided by operations was $307.6 million in 2019, as compared with $153.0 million provided by 

operations in 2018.  The increase in operating cash flows was due to improved working capital management offset by higher 
contributions to the Delta pension plan. The lower working capital is primarily due to a larger liability for customer billings 
in excess of costs and earnings (accrued expenses). This was partially offset by the 2019 Delta pension plan contribution (the 
2018 annual payment was contributed early in December 2017) which is a use of cash flows from operations.

Engineered Support Structures (ESS) segment

The increase in sales in 2019 as compared with 2018, was due to recent acquisitions, improved communication 

product line sales, and improved sales pricing. Sales were partially offset by unfavorable foreign currency translation effects 
of $28.3 million.

Global lighting and traffic, and highway safety product sales in 2019 were $2.3 million higher as compared to 2018, 

due to higher sales pricing and increased sales volumes. Sales volumes and pricing in North America were higher across 
commercial and transportation markets and also increased due to the acquisition of Walpar. Sales in Europe were lower in 
2019, as compared to 2018, due to volume decreases from ceasing manufacturing operations in Morocco and unfavorable 
foreign currency translation effects as the value of the euro depreciated against the U.S. dollar. Sales volumes in Asia-Pacific 
were higher in India due to improved demand, offset by lower demand in China for lighting and traffic products.  Highway 
safety product sales decreased in 2019, as compared to 2018, due to a slowdown in government spending in Australia and 
India and certain project sales in 2018 that did not reoccur in 2019.

Communication product line sales increased by $39.1 million in 2019, as compared with 2018. In North America, 

communication structure and component sales increased in 2019 due to strong demand from the network expansion by 
providers and acquisition of Larson and Connect-It. In Asia-Pacific, sales volumes decreased due to lower demand in China 
and Australia for new wireless communication structures.

Access Systems product line net sales decreased in 2019 by $16.0 million, as compared to 2018. The decrease was 

attributed to lower sales volumes in Australia and unfavorable foreign currency translation effects.  

Gross profit, as a percentage of sales, and operating income for the segment were higher in 2019, as compared to 

2018, due to improved sales volume and pricing, restructuring costs incurred in 2018, and recent acquisitions.  The 
improvements in profitability were partially offset by an approximate $7 million loss recognized in 2019 on certain access 
systems projects and much lower gross profit during the second half of 2019 attributed to weak ANZ access systems market 
conditions. SG&A spending was lower in 2019, as compared to 2018, due to restructuring costs incurred in 2018 and foreign 
currency translation effects. The decrease in SG&A expense was partially offset by the expenses of recent acquisitions.   

Utility Support Structures (Utility) segment

In the Utility segment, sales increased in 2019 as compared with 2018, due to higher sales pricing in North America 

and the acquisition of Convert and Derit that was offset by lower North America volumes and unfavorable foreign currency 
translation effects. A number of our sales contracts in North America contain provisions that tie the sales price to published 
steel index pricing at the time our customer issues their purchase order. Specific to North America, the average sales price 
increase was partially offset by lower sales volumes for steel utility structures; concrete utility structure sales volumes were 
higher. The 2018 acquisitions of Convert and Derit contributed $43.9 million of additional sales in 2019, as compared to 
2018.   

Offshore and other complex structures sales decreased in 2019, as compared to 2018, due to lower sales pricing and 

unfavorable foreign currency translation effects, partially offset by sales volume increases.

Gross profit as a percentage of sales increased in 2019, as compared to 2018, due to improved sales pricing in North 

America and restructuring costs incurred in 2018.  SG&A expense was lower in 2019, as compared with 2018, due to the 
goodwill and trade name impairment recorded in 2018 for Offshore business of $15.8 million that was partially offset by 
expenses associated with recent acquisitions and higher compensation related expenses. 

(cid:21)(cid:25)

 
 
 
 
 
 
 
 
 
 
 
Coatings segment

Coatings segment sales increased in 2019, as compared to 2018, due to increased sales prices and the acquisition of 
United, CSP Coatings, and Derit. Sales volume demand otherwise decreased in North America in 2019, as compared to 2018, 
due to lower industrial economy growth in the U.S. offset somewhat by price actions. In the Asia-Pacific region, the 
acquisition of Derit and CSP Coatings and price increases to recover zinc cost increases drove improved sales in 2019 as 
compared to 2018. 

Gross profit increased in 2019 as compared to 2018, due to contributions from recent acquisitions. SG&A expense 
was higher in 2019, as compared to 2018, due to expenses of recent acquisitions and non-recurring expenses.  2019 included 
approximately $3.0 million of expenses associated with a legal settlement; in 2018 the business recorded the reversal of an 
environmental remediation liability related to one of our North America galvanizing locations of $1.9 million.  Operating 
income was lower in 2019 compared to 2018, due to sales volume decreases globally and non-recurring expenses.

Irrigation segment

The decrease in Irrigation segment net sales in 2019, as compared to 2018, is primarily due to lower sales volumes 

in North America and international markets and unfavorable foreign currency translation effects. Continued low farm 
commodity prices and uncertainty around trade disputes with China dampened net farm income and caused growers to delay 
irrigation investments. However, sales of technology-related products and services continue to grow, as growers are 
increasing adoption of technology to reduce costs and enhance profitability. The decrease in international sales can be 
attributed to project delays and lower overall large project work across most regions. In addition, the weakening of the 
Brazilian real and South African rand in 2019 resulted in lower sales due to currency translation. 

SG&A was higher in 2019, as compared to 2018.  The increase can be attributed to expenses associated with the 

recent acquisitions and planned higher product development expenses. Operating income for the segment decreased in 2019 
due to lower sales volumes for the tubing and international irrigation businesses and the associated operating deleverage of 
fixed factory and SG&A costs. 

Other

In April 2018, the Company completed the sale of Donhad, a mining consumable business with operations in 

Australia. There are no remaining businesses recorded within Other.

LIFO expense

Unit costs of raw materials in the U.S. decreased in 2019, as compared to the end of 2018, resulting in a LIFO 

benefit. In 2018, unit costs of raw materials in the U.S. increased, as compared to the end of 2017, resulting in LIFO expense.

Net corporate expense

Corporate SG&A expense was higher in 2019 as compared to 2018. The increase can be attributed to $6.8 million of 

increased appreciation of deferred compensation plan assets. The increase in deferred compensation plan assets is offset by 
the same amount in other income/expense.

FISCAL 2018 COMPARED WITH FISCAL 2017

Overview

The increase in net sales in 2018, as compared with 2017, was due to higher sales in the ESS and Coatings segments 

that were offset by lower sales in the Irrigation, Utility, and Other segments.  The changes in net sales in 2018, as compared 

(cid:21)(cid:26)

 
 
 
 
 
 
 
 
 
 
 
 
 
with 2017, were as follows:

Sales - 2017

Volume
Pricing/mix

Acquisition/(divestiture)
Currency translation

Sales - 2018

Total

ESS

Utility

Coatings

Irrigation

Other

$

2,746.0 $

912.2 $

(100.6)
114.8

1.5
(4.6)

8.3
28.1

17.2
1.5

856.3 $
(74.8)
50.3

18.9
4.5

$

2,757.1 $

967.3 $

855.2 $

256.8 $

10.8
16.9

3.1
(0.9)
286.7 $

644.4 $
(40.6)
17.1

14.3
(10.4)
624.8 $

76.3
(4.3)
2.4
(52.0)
0.7

23.1

Volume effects are estimated based on a physical production or sales measure. Since products we sell are not 

uniform in nature, pricing and mix relate to a combination of changes in sales prices and the attributes of the product sold. 
Accordingly, pricing and mix changes do not necessarily directly result in operating income changes. On the first day of 
fiscal 2018, the Company adopted the new revenue recognition accounting standard ("ASC 606"). Within the Utility Support 
Structures segment, the steel and concrete product lines now recognize revenue over time whereas in 2017 and years prior, 
their revenue was recognized at a point in time, which was typically upon product delivery to the customer. The impact of the 
adoption of ASC 606 in 2018 was an increase in sales of $36.4 million and an increase in operating income of $6.2 million 
primarily in the Utility segment. It is not practicable to estimate the sales volumes attributable to the adoption of ASC 606 
and thus is not a separate line item in the table above. Information on the adoption of the revenue standard can be found 
under Critical Accounting Policies within Management's Discussion and Analysis.   

 Average steel index prices for both hot rolled coil and plate were higher in North America and China in 2018, as 

compared to 2017, resulting in higher average cost of material. In general, the average selling prices increased during the year 
to mitigate decrease in gross profit realized from the higher cost of steel for the Company.

       The Company acquired the following companies during 2018:

•  Torrent Engineering and Equipment ("Torrent") in the first quarter of 2018 that is included in our Irrigation segment.
•  Derit Infrastructure Pvt. Ltd. ("Derit"), a manufacturing facility located in India that is included in both the Utility 

and Coatings segments. 

•  A majority ownership stake in Convert Italia SpA ("Convert"), a provider of engineered solar tracker solutions, also 

acquired during the third quarter of 2018 and included in the Utility segment. 

•  Walpar, a manufacturer of overhead sign structures, in the third quarter of 2018 that is included in the ESS segment. 
•  CSP Coating Systems ("CSP Coatings"), a coatings provider in New Zealand, acquired in the fourth quarter of 2018 

that is included in the Coatings segment.

The Company divested of its grinding media business in the second quarter of 2018, which resulted in a pre-tax loss 

of approximately $6.1 million. The grinding media business is reported in Other and the loss was recorded in other income 
(expenses) on the Consolidated Statements of Earnings.

Restructuring Plan 

In February 2018, the Company announced a restructuring plan related to certain operations in 2018, primarily in the 

ESS segment, through consolidation and other cost-reduction activities (the "2018 Plan"). The Company incurred pre-tax 
expenses from the 2018 Plan of $34.0 million. The decrease in 2018 gross profit and operating income due to restructuring 
expense by segment is as follows:

Total

ESS

Utility Irrigation Corporate

Gross Profit

Operating Income

$

$

18.4 $

14.3 $

4.1 $

— $

34.0 $

28.5 $

5.2 $

0.2 $

—

0.1

(cid:21)(cid:27)

 
 
 
 
Currency Translation 

In 2018, we realized a reduction in operating profit, as compared with fiscal 2017, due to currency translation 

effects. The breakdown of this effect by segment was as follows:

Total

ESS

Utility

Coatings

Irrigation

Other

Corporate

Full year

$

(1.8) $

(0.5) $

0.3 $

— $

(1.6) $

— $

—

Gross Profit, SG&A, and Operating Income  

At a consolidated level, the reduction in gross margin (gross profit as a percent of sales) in 2018, as compared with 

2017, was primarily due to restructuring costs incurred in the ESS and Utility segments. The Irrigation and Coatings 
segments realized an increase in gross margin in 2018, while Utility, ESS, and Other realized a decrease in gross margin.

The Company saw an increase in selling, general, and administrative (SG&A) expense in 2018, as compared to 

2017, due to impairment of the goodwill and trade name of the Offshore and other complex structures ("Offshore") business 
totaling $15.8 million, restructuring costs incurred of $15.6 million, SG&A from recently acquired businesses of $9.0 million, 
and acquisition diligence expenses of $4.4 million. The increase was partially offset by lower deferred compensation 
expenses of $5.0 million (offset recognized in other expense as described below) and $3.6 million of SG&A in 2017 from the 
grinding media business divested in 2018.

 Operating income was lower for all reportable segments with the exception of Coatings in 2018, as compared to 
2017. The decrease is attributed to the impairment of the goodwill and trade name of the Offshore business, restructuring 
costs incurred in the ESS and Utility segments, and the disposal of the grinding media business included in Other.

Net Interest Expense and Debt 

Net interest expense for 2018 was consistent with 2017.  The Company issued $200.0 million and $55.0 million of 
senior secured notes in June 2018 at 5.0% and 5.25%, respectively. Proceeds from the debt issuance were subsequently used 
to pay off the 2020 bonds in July 2018.

The approximate $14.8 million in pre-tax costs ($11.1 million after-tax) associated with refinancing of debt is due to 
the Company's repurchase through tender of $250.2 million in aggregate principal amount of the senior unsecured notes due 
2020. This expense was comprised of the following:

•  Cash prepayment expenses of approximately $15.8 million; plus
•  Recognition of $1.0 million of expense comprised of the write-offs of unamortized loss on the cash flow hedge and 

deferred financing costs; less

•  Recognition of $2.0 million of the unamortized premium originally recorded upon the issuance of the 2020 notes. 

Other Income/Expense 

The change in other income/expense in 2018, as compared with 2017, was primarily due to the divestiture of our 

grinding media business that resulted in a loss of approximately $6.1 million. Excluding the divestiture, higher other income 
was driven by a periodic pension benefit in 2018 that resulted a beneficial change of $2.8 million. In addition, the change in 
market value of the Company's shares held of Delta EMD was an improvement of $0.8 million. The remaining change was 
due to more favorable foreign currency transaction gains/losses in 2018 as compared to 2017.  The increase in other income 
was partially offset by a change in valuation of deferred compensation assets in 2018 which resulted in additional expense of 
$5.0 million.  This amount is offset by a reduction of the same amount in SG&A expense.

Income Tax Expense 

Our effective income tax rate in 2018 and 2017 was 30.1% and 46.5%, respectively. The 2018 tax rate was impacted 

by the reduction in the U.S. corporate income tax rate from 35% to 21% offset by 2018 restructuring costs and impairment 
charges for which no tax benefits have been recorded. The 2017 tax rate was impacted by The Tax Cuts and Jobs Act of 2017 

(cid:21)(cid:28)

 
    
 
 
 
 
 
 
 
 
 
(the "2017 Tax Act" or “Act”) which resulted in a one-time fourth quarter of 2017 charge of approximately $42 million 
related to the transition effects of the Act.  Excluding this charge, our effective tax rate would have been 28.1% for 2017. 

The $42 million charge was comprised of (a) approximately $9.9 million of expense related to the taxation of 

unremitted foreign earnings ("transition tax"), the federal portion of which is payable over eight (8) years beginning in 2018, 
(b) approximately $20.4 million of expense related to the remeasurement of U.S. deferred tax balances to reflect the new U.S. 
corporate income tax rate, using a federal and state tax rate of 25.0%, and (c) approximately $11.7 million of deferred 
expenses related to foreign withholding taxes and U.S. state income taxes.  During 2018, the Company finalized the transition 
tax which resulted in a credit to tax expense of $0.5 million.  

Earnings attributable to noncontrolling interests was consistent in 2018 and 2017.

Cash Flows from Operations

Our cash flows provided by operations was $153.0 million in 2018, as compared with $133.1 million provided by 
operations in 2017.  The increase in operating cash flows was due to lower contributions to the Delta pension plan partially 
offset by lower net earnings. 

Engineered Support Structures (ESS) segment

The increase in sales in 2018, as compared with 2017, was due to higher sales pricing to cover the higher costs of 

steel and sales volume increases from acquisitions in 2018.

Global lighting and traffic, and highway safety product sales in 2018 were $73.4 million higher as compared to 
2017, due to higher sales pricing and increased sales volumes. Sales volumes and pricing in North America were higher 
across commercial and transportation markets and also increased due to the acquisition of Walpar in the third quarter of 2018. 
Improved sales volumes in Europe contributed to higher sales in 2018, as compared to 2017, along with favorable currency 
translation effects as the value of the euro appreciated against the U.S. dollar. Sales volumes in Asia-Pacific were higher in 
India due to improved demand, offset by lower demand in China for lighting and traffic products.  Highway safety product 
sales increased in 2018, as compared to 2017, due to higher demand in Australia and the acquisition of Aircon in the third 
quarter of 2017.

Communication product line sales were lower by $21.9 million in 2018, as compared with 2017. In North America, 

communication structure and component sales increased in 2018 due to strong demand from the network expansion by 
providers. In Asia-Pacific, sales volumes decreased due to much lower demand in China for new wireless communication 
structures.

Access Systems product line net sales decreased in 2018 by $2.7 million, as compared to 2017. The decrease can be 

attributed to lower sales volumes in Asia due to less large project work that was partially offset by improved demand in 
Australia, in part due to efforts to expand our sales reach into architectural and construction markets.  

Gross profit, as a percentage of sales, and operating income for the segment were lower in 2018, as compared to 

2017, due to restructuring costs incurred in 2018.  In 2018, the segment incurred $14.3 million of restructuring costs within 
product cost of sales and $14.2 million within SG&A expense. In addition, approximately $8.0 million of asset impairment 
costs were incurred related to exiting certain local markets in 2018. SG&A spending was higher in 2018, as compared to 
2017, due to restructuring costs and SG&A expenses of Walpar that was acquired in the third quarter of 2018.  Operating 
income decreased primarily from the $28.5 million of incurred restructuring costs.    

Utility Support Structures (Utility) segment

In the Utility segment, sales decreased in 2018, as compared with 2017, due to lower sales volumes in North 

America that are offset by sales price increases to cover higher steel costs and the acquisition of Convert and Derit in the 
third quarter of 2018. A number of our sales contracts in North America contain provisions that tie the sales price to published 
steel index pricing at the time our customer issues their purchase order. Measured in tonnages, sales volumes for steel utility 
structures in North America were lower whereas concrete utility structure sales volumes were higher in 2018, as compared to 
2017. The Company adopted new revenue recognition guidance effective the first day of fiscal 2018; steel and concrete 

(cid:22)(cid:19)

 
 
 
 
 
 
 
 
 
 
reported sales in 2017 were recognized upon delivery to customers (point in time) whereas reported revenue for 2018 is based 
on progress of production on customer orders (over time).   

Offshore and other complex structures sales decreased in 2018, as compared to 2017, due to lower sales volumes 

that were partially offset by positive effects from currency translation.

Gross profit as a percentage of sales decreased in 2018, as compared to 2017, due to restructuring costs incurred of 

$4.1 million and lower offshore and complex steel structures sales volumes. SG&A expense was higher in 2018, as compared 
with 2017, due to the goodwill and trade name impairment recorded for Offshore business of $15.8 million, restructuring 
expenses, and increased expenses related to the acquisition of Derit and Convert. Excluding restructuring expenses, expenses 
associated with the acquisitions, and the intangible asset impairment, operating income in 2018 was consistent with 2017.

Coatings segment

Coatings segment sales increased in 2018, as compared to 2017, due to increased sales prices to recover higher zinc 

costs globally and higher sales volumes.  The Company acquired Derit in the third quarter of 2018 and CSP Coatings in the 
fourth quarter of 2018 that also contributed to higher sales. Sales pricing and volume demand increased in North America in 
2018, as compared to 2017. In the Asia-Pacific region, continued improvements in the Australia market along with overall 
higher sales pricing provided an increase in net sales. 

SG&A expense was higher in 2018, as compared to 2017, due to higher compensation costs related to improved 

business operations and currency translation effects.  Non-recurring items were recognized in 2018 and 2017 which reduced 
SG&A.  2018 included the reversal of an environmental remediation liability related to one of our North America galvanizing 
locations of $1.9 million; in 2017 the business recorded a reversal of an environmental remediation liability of $2.6 million 
due to the sale of a former galvanizing operation in Australia. Operating income was higher in 2018 compared to 2017, due to 
improved sales volumes and the associated operating leverage of fixed costs and improved sales pricing.

Irrigation segment

The decrease in Irrigation segment net sales in 2018, as compared to 2017, is primarily due to sales volume 
decreases, particularly in the international markets. The decrease in international sales can be attributed to project delays and 
lower overall large project work across most regions. In addition, the weakening of the Brazilian real and Argentina peso in 
2018 resulted in lower sales due to currency translation. North America sales increased in 2018, as compared to 2017, due to 
higher sales pricing and recent acquisitions. Sales volumes in North America for the year were lower due to continued weak 
farm income levels. Recent proposed tariffs also caused uncertainly leading farmers to delay irrigation purchases. 

SG&A was lower in 2018, as compared to 2017.  The decrease can be attributed to lower incentives from reduced 

business operations and currency translation effects which were partially offset by expenses associated with the 2018 
acquisitions. Operating income for the segment decreased in 2018 compared to 2017, due to lower sales volumes and the 
associated operating deleverage of fixed costs and currency translation effects. 

Other

In April 2018, the Company completed the sale of Donhad, a mining consumable business with operations in 

Australia. The Company realized an approximate $6.1 million loss on the sale that is recorded in other income/expense, 
subject to certain post-closing adjustments.

LIFO expense

Steel index prices for both hot rolled coil and plate, and zinc in the U.S. increased at a higher rate in 2018, as 

compared to 2017, resulting in higher LIFO expense.

Net corporate expense

Corporate SG&A expense was lower in 2018 as compared to 2017. The decrease can be attributed to lower deferred 

compensation expenses of $5.0 million, which is offset by the same amount in other expense, and lower incentive expense. 
The decrease was partially offset by higher compensation expenses.

(cid:22)(cid:20)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Working Capital and Operating Cash Flows-Net working capital was $874.6 million at December 28, 2019, as 

compared with $931.6 million at December 29, 2018. The decrease in net working capital in 2019 is attributed to an increase 
in liability for customer billings in excess of costs and earnings of $113.0 million. Cash flow provided by operations was 
$307.6 million in 2019, as compared with $153.0 million in 2018 and $133.1 million in 2017. The increase in operating cash 
flow in 2019, as compared to 2018, was the result of increased net earnings and improved working capital management, 
offset by higher contributions to the Delta pension plan.    

Investing Cash Flows-Capital spending in fiscal 2019 was $97.4 million, as compared with $72.0 million in fiscal 
2018 and $55.3 million in fiscal 2017.  The increase in capital spending in 2019 resulted from plant investments in Poland 
(ESS), concrete distribution poles (Utility), and United Arab Emirates (Irrigation). The increase in investing cash outflows in 
2019, as compared to 2018, was primarily due to an increase in capital expenditures and lower proceeds from the sale of 
assets as we sold our mining consumable business in 2018. The increase was partially offset by reduced spending on 
acquisitions. We expect our capital spending for the 2020 fiscal year to be approximately $120.0 million.

Financing Cash Flows-Our total interest bearing debt increased to $787.5 million at December 28, 2019, from 

$753.3 million at December 29, 2018. Financing cash outflows decreased in 2019, as compared to 2018, due to the Company 
acquiring fewer shares under the share repurchase program. No shares were repurchased in 2017.   

 Capital Allocation Philosophy 

We have historically funded our growth, capital spending and acquisitions through a combination of operating cash 

flows and debt financing. In May 2014, our Board of Directors approved and publicly announced a capital allocation 
philosophy with the following priorities for cash generated:

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

• 

• 

• 

dividends on common stock in the range of 15% of the prior year's fully diluted net earnings; 

acquisitions; and

return of capital to shareholders through share repurchases.  

We also announced our intention to manage our capital structure to maintain our investment grade debt rating. Our 

most recent ratings were Baa3 by Moody's Investors Services, Inc., BBB- by Fitch Ratings, and BBB+ by Standard and 
Poor's Rating Services. We would be willing to allow our debt rating to fall to BBB- to finance a special acquisition or other 
opportunity. We expect to maintain a ratio of debt to invested capital which will support our current investment grade debt 
rating. 

The Board of Directors in May 2014 authorized the purchase of up to $500 million of the Company's outstanding 

common stock from time to time over twelve months at prevailing market prices, through open market or privately-
negotiated transactions. The Board of Directors authorized an additional $250 million of share purchases, without an 
expiration date in both February 2015 and again in October 2018. The purchases will be funded from available working 
capital and short-term borrowings and will be made subject to market and economic conditions. We are not obligated to make 
any repurchases and may discontinue the program at any time. As of December 28, 2019, we have acquired approximately 
5.9 million shares for approximately $795.5 million under these share repurchase programs. 

Sources of Financing

Our debt financing at December 28, 2019 consisted primarily of long term debt. During 2018, the Company issued 

an additional $200 million aggregate principal amount of its 5.00% senior notes due 2044 and $55 million aggregate 
principal amount of its 5.25% senior notes due 2054 and redeemed $250.2 million in remaining aggregate principal amount 
of the 2020 senior notes. Our long term debt as of December 28, 2019, principally consists of:

(cid:22)(cid:21)

• 

• 

$450 million face value ($436.3 million carrying value) of senior unsecured notes that bear interest at 5.00% per 
annum and are due in October 2044. 

$305 million face value ($297.5 million carrying value) of senior unsecured notes that bear interest at 5.25% per 
annum and are due in October 2054. 

We are allowed to repurchase the notes subject to the payment of a make-whole premium.  Both tranches of these 

notes are guaranteed by certain of our subsidiaries. 

Our amended and restated our revolving credit facility with JP Morgan Chase Bank, N.A., as Administrative Agent, 

and the other lenders party thereto has a maturity date of October 18, 2022.  The credit facility provides for $600 million of 
committed unsecured revolving credit loans with available borrowings thereunder to $400 million in foreign currencies.  We 
may increase the credit facility by up to an additional $200 million at any time, subject to lenders increasing the amount of 
their commitments. The leverage ratio of 3.5X increases to 3.75X for the four consecutive fiscal quarters after certain 
material acquisitions. The Company and our wholly-owned subsidiaries Valmont Industries Holland B.V. and Valmont Group 
Pty. Ltd., are authorized borrowers under the credit facility.  The obligations arising under the credit facility are guaranteed by 
the Company and its wholly-owned subsidiaries PiRod, Inc., Valmont Coatings, Inc., Valmont Newmark, Inc. and Valmont 
Queensland Pty. Ltd.

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

(a) LIBOR (based on a 1, 2, 3 or 6 month interest period, as selected by us) plus 100 to 162.5 basis points, 
depending on the credit rating of our senior debt published by Standard & Poor's Rating Services and 
Moody's Investors Service, Inc.; or

(b) the higher of

• 

• 

the prime lending rate, 

 the Federal Funds rate plus 50 basis points, and 

•  LIBOR (based on a 1 month interest period) plus 100 basis points (inclusive of facility fees), 

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

A commitment fee is also required under the revolving credit facility which accrues at 10 to 25 basis points, 

depending on the credit rating of our senior debt published by Standard and Poor's Rating Services and Moody's Investor 
Services, Inc., on the average daily unused portion of the commitment under the revolving credit facility.

At December 28, 2019, we had $29.0 million of outstanding borrowings under the revolving credit facility. The 

revolving credit facility has a maturity date of October 18, 2022 and contains certain financial covenants that may limit our 
additional borrowing capability under the agreement. At December 28, 2019, we had the ability to borrow $556.6 million 
under this facility, after consideration of standby letters of credit of $14.6 million associated with certain insurance 
obligations. We also maintain certain short term bank lines of credit totaling $131.3 million; $109.6 million of which was 
unused at December 28, 2019. 

Our senior unsecured notes and revolving credit agreement each contain cross-default provisions which permit the 

acceleration of our indebtedness to them if we default on other indebtedness that results in, or permits, the acceleration of 
such other indebtedness. 

These debt agreements contain covenants that require us to maintain certain coverage ratios and may limit us with 

respect to certain business activities, including capital expenditures. These debt agreements allow us to add estimated 
EBITDA from acquired businesses for periods we did not own the acquired businesses.  The debt agreements also provide for 
an adjustment to EBITDA, subject to certain specified limitations, for non-cash charges or gains that are non-recurring in 
nature.  

(cid:22)(cid:22)

 
 
 
Our key debt covenants are as follows:

• 

• 

Leverage ratio - Interest-bearing debt is not to exceed 3.50x Adjusted EBITDA (or 3.75x Adjusted 
EBITDA after certain material acquisitions) of the prior four quarters; and
Interest earned ratio - Adjusted EBITDA over the prior four quarters must be at least 2.50x our interest 
expense over the same period. 

At December 28, 2019, we were in compliance with all covenants related to these debt agreements. The key 

covenant calculations at December 28, 2019 were as follows (amounts in thousands):

Interest-bearing debt
Adjusted EBITDA-last four quarters
Leverage ratio

Adjusted EBITDA-last four quarters
Interest expense-last four quarters
Interest earned ratio

$ 787,478
326,393
2.41

326,393
40,153
8.13

The calculation of Adjusted EBITDA-last four quarters is presented under the column for fiscal 2019 in footnote (b) 

to the table "Selected Five-Year Financial Data" in Item 6 - Selected Financial Data.

Our businesses are cyclical, but we have diversity in our markets, from a product, customer and a geographical 

standpoint. We have demonstrated the ability to effectively manage through business cycles and maintain liquidity. We have 
consistently generated operating cash flows in excess of our capital expenditures. Based on our available credit facilities, 
recent issuance of senior unsecured notes and our history of positive operational cash flows, we believe that we have 
adequate liquidity to meet our needs for fiscal 2020 and beyond. 

We have cash balances of $353.5 million at December 28, 2019, approximately $165.6 million is held in our non-

U.S. subsidiaries.  If we distributed our foreign cash balances certain taxes would be applicable.  At December 28, 2019, we 
have a liability for foreign withholding taxes and U.S. state income taxes of $3.7 million and $0.6 million, respectively.

FINANCIAL OBLIGATIONS AND FINANCIAL COMMITMENTS

We have future financial obligations related to (1) payment of principal and interest on interest bearing debt, 

(2) Delta pension plan contributions, (3) operating leases and (4) purchase obligations. These obligations at December 28, 
2019 were as follows (in millions of dollars):

Contractual Obligations

Total

2020

Interest
Delta pension plan contributions
Operating leases
Unconditional purchase commitments
Total contractual cash obligations

$

794.7
1,116.2
182.7
123.1
69.9
$ 2,286.6

$

$

0.8
39.2
18.3
18.7
69.9
146.9

2021-2022
30.4
$
78.2
36.5
28.2
—
173.3

$

2023-2024
$

— $

77.6
36.5
18.2
—
132.3

$

After 2024
763.5
921.2
91.4
58.0
—
$ 1,834.1

Long term debt mainly consisted of $755.0 million principal amount of senior unsecured notes.  At December 28, 
2019, we had outstanding borrowings of $29.0 million under our bank revolving credit agreement. Obligations under these 
agreements may be accelerated in event of non compliance with debt covenants. The Delta pension plan contributions are 
related to the current cash funding commitments to the plan with the plan's trustees. Operating leases relate mainly to various 
production and office facilities and are in the normal course of business.

(cid:22)(cid:23)

 
Unconditional purchase commitments relate to purchase orders for zinc, aluminum and steel, all of which we plan to 
use in 2020, and certain capital investments planned for 2020. We believe the quantities under contract are reasonable in light 
of normal fluctuations in business levels and we expect to use the commodities under contract during the contract period.     

At December 28, 2019, we had approximately $13.1 million of various long term liabilities related to certain income 

tax and other matters. These items are not scheduled above because we are unable to make a reasonably reliable estimate as 
to the timing of any potential payments. 

OFF BALANCE SHEET ARRANGEMENTS

We maintain standby letters of credit for contract performance on certain sales contracts.

MARKET RISK

Changes in Prices

Certain key materials we use are commodities traded in worldwide markets and are subject to fluctuations in price. 

The most significant materials are steel, aluminum, zinc and natural gas. Over the last several years, prices for these 
commodities have been volatile. The volatility in these prices was due to such factors as fluctuations in supply and demand 
conditions, government tariffs and the costs of steel making inputs.  Steel is most significant for our Utility Support 
Structures segment where the cost of steel has been approximately 50% of the net sales, on average.  In 2018, we began using 
steel hot rolled coil derivative contracts on a limited basis to mitigate the impact of rising steel prices on operating income. 
Assuming a similar sales mix, a hypothetical 20% change in the price of steel would have affected our net sales from our 
Utility Support Structures segment by approximately $63 million for the year ended December 28, 2019.  

We have also experienced volatility in natural gas prices in the past several years. Our main strategies in managing 

these risks are a combination of fixed price purchase contracts with our vendors to reduce the volatility in our purchase prices 
and sales price increases where possible. We use natural gas swap contracts on a limited basis to mitigate the impact of rising 
gas prices on our operating income.

Risk Management

Market Risk—The principal market risks affecting us are exposure to interest rates, foreign currency exchange rates 

and commodity prices. At times, we utilize derivative financial instruments to hedge these exposures, but we do not use 
derivatives for trading purposes.

Interest Rates—Our interest bearing debt at December 28, 2019 was mostly fixed rate debt. Our notes payable and a 

small portion of our long-term debt accrue interest at a variable rate. Assuming average interest rates and borrowings on 
variable rate debt, a hypothetical 10% change in interest rates would have affected our interest expense in 2019 and 2018 by 
approximately $0.1 million. Likewise, we have excess cash balances on deposit in interest bearing accounts in financial 
institutions. An increase or decrease in interest rates of ten basis points would have impacted our annual interest earnings in 
2019 and 2018 by approximately $0.3 million and $0.3 million, respectively.

Foreign Exchange—Exposures to transactions denominated in a currency other than the entity’s functional currency 

are not material, and therefore the potential exchange losses in future earnings, fair value and cash flows from these 
transactions are not material. The Company is also exposed to investment risk related to foreign operations. From time to 
time, as market conditions indicate, we will enter into foreign currency contracts to manage the risks associated with 
anticipated future transactions, current balance sheet positions, and foreign subsidiary investments that are in currencies other 
than the functional currencies of our businesses. At December 28, 2019, the Company had outstanding foreign currency 
forward contracts which mitigate foreign currency risk of the Company's investment in its Australian dollar denominated 
businesses.  The forward contracts, which qualify as net investment hedges, have a maturity date of April 2021 and notional 
amounts to sell Australian dollars and receive $100.0 million. In 2019, the Company entered into two fixed-for-fixed cross 
currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured 
notes due 2044 for Danish krone (DKK) and Euro denominated payments. The CCS were entered into in order to mitigate 
foreign currency risk on the Company's Euro and DKK investments and to reduce interest expense. The notional of the Euro 
and DKK CCS are $80.0 million and $50.0 million, respectively, and mature in 2024. Much of our cash in non-U.S. entities 
is denominated in foreign currencies, where fluctuations in exchange rates will impact our cash balances in U.S. dollar terms. 

(cid:22)(cid:24)

A hypothetical 10% change in the value of the U.S. dollar would impact our reported cash balance by approximately $14.1 
million in 2019 and $18.5 million in 2018.

We manage our investment risk in foreign operations by borrowing in the functional currencies of the foreign 

entities or by utilizing hedging instruments (as discussed above) where appropriate. The following table indicates the change 
in the recorded value of our most significant investments at year-end assuming a hypothetical 10% change in the value of the 
U.S. Dollar.

Australian dollar
Euro
Danish krone
Chinese renminbi
Canadian dollar
U.K. pound
Brazilian real

2019

2018

(in millions)

$ 14.7
9.9
5.7
6.9
3.8
6.3
3.3

$18.1
12.1
7.0
6.7
4.7
4.4
2.7

Commodity risk— Steel hot rolled coil is a significant commodity input used by all of our segments in the 
manufacture of our products, with the exception of Coatings. Steel prices are volatile and we may utilize derivative 
instruments to mitigate commodity price risk on fixed price orders. In 2019 and 2018, the Company entered into steel hot 
rolled coil forward contracts which qualified as a cash flow hedge of the variability in the cash flows attributable to future 
steel purchases. There are no outstanding steel coil forward contracts at December, 28, 2019.   

Natural gas is a significant commodity used in our factories, especially in our Coatings segment galvanizing 

operations, where natural gas is used to heat tanks that enable the hot-dipped galvanizing process. Natural gas prices are 
volatile and we mitigate some of this volatility through the use of derivative commodity instruments. Our current policy is to 
manage this commodity price risk for 0-50% of our U.S. natural gas requirements for the upcoming 6-12 months through the 
purchase of natural gas swaps based on NYMEX futures prices for delivery in the month being hedged. The objective of this 
policy is to mitigate the impact on our earnings of sudden, significant increases in the price of natural gas. At December 28, 
2019, we have open natural gas swaps for 80,000 MMBtu.

CRITICAL ACCOUNTING POLICIES   

The following accounting policies involve judgments and estimates used in preparation of the consolidated financial 

statements. There is a substantial amount of management judgment used in preparing financial statements. We must make 
estimates on a number of items, such as impairments of long-lived assets, income taxes, revenue recognition for the product 
lines recognized over time, inventory obsolescence, and pension benefits. We base our estimates on our experience and on 
other assumptions that we believe are reasonable under the circumstances. Further, we re-evaluate our estimates from time to 
time and as circumstances change. Actual results may differ under different assumptions or conditions. The selection and 
application of our critical accounting policies are discussed annually with our audit committee.

Depreciation, Amortization and Impairment of Long-Lived Assets     

Our long-lived assets consist primarily of property, plant and equipment, right-of-use (lease) assets, and goodwill 
and intangible assets acquired in business acquisitions. We have assigned useful lives to our property, plant and equipment 
and certain intangible assets ranging from 3 to 40 years.  Upon adoption of ASC 842 in 2019, the Company impaired the 
right-of-use asset for one of our galvanizing facilities in Australia as it will not generate sufficient cash flows to recover the 
carrying value. Impairment losses were recorded in 2018 as facilities were closed and certain fixed assets were no longer 
expected to be used as a result of our restructuring plans. 

We identified twelve reporting units for purposes of evaluating goodwill and we annually evaluate our reporting 

units for goodwill impairment during the third fiscal quarter, which usually coincides with our strategic planning process. We 
assess the value of our reporting units using after-tax cash flows from operations (less capital expenses) discounted to present 
value. The key assumptions in the discounted cash flow analysis are the discount rate and the projected cash flows. We also 
use sensitivity analysis to determine the impact of changes in discount rates and cash flow forecasts on the valuation of the 

(cid:22)(cid:25)

reporting units.  For both the 2019 and 2018 annual impairment test, we did not first perform the qualitative assessment of 
each of our reporting units using our judgment.

The estimated fair value of all of our reporting units exceeded their respective carrying value, so no goodwill was 
impaired in 2019. The access systems reporting unit with $45.7 million of goodwill, is the reporting unit that did not have a 
substantial excess of estimated fair value over its carrying value. The model assumes geographic expansion of its 
architectural product lines, which realized recent organic growth in its existing market. If architectural systems sales do not 
increase, the Company will be required to perform an interim test of goodwill. A hypothetical 1.0% change in the discount 
rate would increase/decrease the fair value of this reporting unit by approximately $15.0 million, which approximates the 
cushion between the estimated fair value and carrying value of this reporting unit. A goodwill impairment of $14.4 million, 
which represents all of the goodwill of the offshore and other complex steel reporting unit, was recorded in the third quarter 
of 2018. 

If our assumptions on discount rates and future cash flows change as a result of events or circumstances, and we 
believe these assets may have declined in value, then we may record impairment charges, resulting in lower profits. Our 
reporting units are all cyclical and their sales and profitability may fluctuate from year to year. The Company continues to 
monitor changes in the global economy that could impact future operating results of its reporting units. If such conditions 
arise, the Company will test a given reporting unit for impairment prior to the annual test. In the evaluation of our reporting 
units, we look at the long-term prospects for the reporting unit and recognize that current performance may not be the best 
indicator of future prospects or value, which requires management judgment. 

Our indefinite lived intangible assets consist of trade names. We assess the values of these assets apart from 
goodwill as part of the annual impairment testing. We use the relief-from-royalty method to evaluate our trade names, under 
which the value of a trade name is determined based on a royalty that could be charged to a third party for using the trade 
name in question. The royalty, which is based on a reasonable rate applied against estimated future sales, is tax-effected and 
discounted to present value. The most significant assumptions in this evaluation include estimated future sales, the royalty 
rate and the after-tax discount rate. For our evaluation purposes, the royalty rates used vary between 0.5% and 1.5% of sales 
and the after-tax discount rate of 13.0% to 16.0%, which we estimate to be the after-tax cost of capital for such assets. 

Our trade names were tested for impairment in the third quarter of 2019 using the relief-from-royalty valuation 

methodology and determined none to be impaired. In 2018, an impairment of $1.4 million was recorded against the offshore 
and other complex steel structures trade name (Valmont SM).

Inventories

We use the last-in first-out (LIFO) method to determine the value of approximately 41% of our inventory. The 

remaining 59% of our inventory was valued on a first-in first-out (FIFO) basis. In periods of rising costs to produce 
inventory, the LIFO method will result in lower profits than FIFO, because higher recent costs are recorded to cost of goods 
sold than under the FIFO method. Conversely, in periods of falling costs to produce inventory, the LIFO method will result in 
higher profits than the FIFO method.

In 2019, we experienced lower average costs to produce inventory than in the prior year, due mainly to lower costs 

of steel and steel-related products, which resulted in lower cost of sales of approximately $9.8 million, than if our entire 
inventory had been valued on the FIFO method.  In 2018 and 2017, we experienced higher average costs to produce 
inventory than in the prior year, due mainly to higher cost for steel and steel-related products.  This resulted in higher costs of 
goods sold in 2018 and 2017 of approximately $9.9 million and $5.7 million, respectively, than if our entire inventory had 
been valued on the FIFO method. 

We write down slow-moving and obsolete inventory by the difference between the value of the inventory and our 
estimate of the reduced value based on potential future uses, the likelihood that overstocked inventory will be sold and the 
expected selling prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable 
than assumed, additional inventory write downs may be required.

(cid:22)(cid:26)

 
 
 
Income Taxes

We record valuation allowances to reduce our deferred tax assets to amounts that are more likely than not to be 

realized. We consider future taxable income expectations and tax-planning strategies in assessing the need for the valuation 
allowance. If we estimate a deferred tax asset is not likely to be fully realized in the future, a valuation allowance to decrease 
the amount of the deferred tax asset would decrease net earnings in the period the determination was made. Likewise, if we 
subsequently determine that we are able to realize all or part of a net deferred tax asset in the future, an adjustment reducing 
the valuation allowance would increase net earnings in the period such determination was made. 

At December 28, 2019, we had approximately $64.1 million in deferred tax assets relating to tax credits and loss 

carryforwards, with a valuation allowance of $35.2 million, including $2.3 million in valuation allowances remaining in the 
Delta entities related to capital loss carryforwards, which are unlikely ever to be realized. If circumstances related to our 
deferred tax assets change in the future, we may be required to increase or decrease the valuation allowance on these assets, 
resulting in an increase or decrease in income tax expense and a reduction or increase in net income.  Also, we consider the 
earnings in our greater than 50% owned non-U.S. subsidiaries to not be indefinitely reinvested and, accordingly, we have a 
deferred tax liability of $4.3 million related to these unremitted foreign earnings for future taxes that will be incurred when 
cash is repatriated. 

We are subject to examination by taxing authorities in the various countries in which we operate. The tax years 

subject to examination vary by jurisdiction. We regularly consider the likelihood of additional income tax assessments in each 
of these taxing jurisdictions based on our experiences related to prior audits and our understanding of the facts and 
circumstances of the related tax issues. We include in current income tax expense any changes to accruals for potential tax 
deficiencies. If our judgments related to tax deficiencies differ from our actual experience, our income tax expense could 
increase or decrease in a given fiscal period.

Pension Benefits

Delta Ltd. maintains a defined benefit pension plan for qualifying employees in the United Kingdom. There are no 

active employees as members in the plan. Independent actuaries assist in properly measuring the liabilities and expenses 
associated with accounting for pension benefits to eligible employees. In order to use actuarial methods to value the liabilities 
and expenses, we must make several assumptions. The critical assumptions used to measure pension obligations and 
expenses are the discount rate and expected rate of return on pension assets.

We evaluate our critical assumptions at least annually. Key assumptions are based on the following factors:

•  Discount rate is based on the yields available on AA-rated corporate bonds with durational periods similar to 

that of the pension liabilities.

•  Expected return on plan assets is based on our asset allocation mix and our historical return, taking into 

consideration current and expected market conditions. Most of the assets in the pension plan are invested in 
corporate bonds, the expected return of which are estimated based on the yield available on AA rated corporate 
bonds. The long-term expected returns on equities are based on historic performance over the long-term.

• 

Inflation is based on the estimated change in the consumer price index (“CPI”) or the retail price index (“RPI”), 
depending on the relevant plan provisions. 

The discount rate used to measure the defined benefit obligation was 2.05% at December 28, 2019.  The following 

tables present the key assumptions used to measure pension expense for 2020 and the estimated impact on 2020 pension 
expense relative to a change in those assumptions:

Assumptions
Discount rate
Expected return on plan assets
Inflation - CPI
Inflation - RPI

(cid:22)(cid:27)

Pension

2.05%
4.18%
2.15%
3.05%

 
 
    
 
Assumptions In Millions of Dollars
0.25% decrease in discount rate
0.25% decrease in expected return on plan assets
0.25% increase in inflation

Increase
in Pension
Expense

$
$
$

—
1.5
1.2

Revenue Recognition 

Effective the first day of fiscal 2018, we adopted the requirements of Accounting Standards Update (ASU) 2014-09, 
Revenue from Contracts with Customers (Topic 606). Please see note 1 to the consolidated financial statements for additional 
information on the new standard and the cumulative effect from the modified retrospective adjustment. 

We determine the appropriate revenue recognition for our contracts by analyzing the type, terms and conditions of 

each contract or arrangement with a customer. We have no contracts with customers, under any product line, where we could 
earn variable consideration. With the exception of our Utility segment and the wireless communication structures product 
line, our inventory is interchangeable for a variety of the product line’s customers. There is one performance obligation for 
revenue recognition. Our Irrigation and Coatings segments recognize revenue at a point in time, which is when the service 
has been performed or when the goods ship; this is the same time that the customer is billed. Lighting, traffic, highway safety, 
and access system product lines within the ESS segment recognize revenue and bill customers at a point in time, which is 
typically when the product ships or when it is delivered, as stipulated in the customer contract. 

The following provides additional information about our contracts with utility and wireless communication 
structures customers, where the revenue is recognized over time, the judgments we make in accounting for those contracts, 
and the resulting amounts recognized in our financial statements.

Accounting for utility structures and wireless communication monopole contracts: Steel and concrete utility and wireless 
communication monopole structures 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 our rights to payment for work performed to-
date plus a reasonable profit as the products do not have an alternative use to us. Since control is transferring over time, 
revenue is recognized based on the extent of progress towards completion of the performance obligation. We have 
certain wireless communication structures customers' contracts where we do not have the right to payment for work 
performed. In those instances, we recognize revenue at a point in time which is time of shipment of the structure. 

The selection of the method to measure progress towards completion requires judgment. For our steel and concrete 

utility and wireless communication structure product lines, we recognize revenue on an inputs basis, using total 
production hours incurred to-date for each order as a percentage of total hours estimated to produce the order. The 
completion percentage is applied to the order’s total revenue and total estimated costs to determine reported revenue, 
cost of goods sold and gross profit. Our enterprise resource planning (ERP) system captures the total costs incurred to-
date and the total production hours, both incurred to-date and forecast to complete. Revenue from the offshore and other 
complex steel structures business is also recognized using an inputs method, based on the cost-to-cost measure of 
progress. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on 
the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

  Management must make assumptions and estimates regarding manufacturing labor hours and wages, the usage and 
cost of materials, and manufacturing burden / overhead recovery rates for each production facility. For our steel, concrete 
and wireless communication structures, production of an order, once started, is typically completed within three months. 
Projected profitability on open production orders is reviewed and updated monthly. We elected the practical expedient 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. 

(cid:22)(cid:28)

 
  
  
 
  We also have a few steel structure customer orders in a fiscal year that require one or two years to complete, due to 
the quantity of structures. Burden rates and routed production hours, per structure, will be adjusted if and when actual 
costs incurred are significantly higher than what had been originally projected. This resets the timing of revenue 
recognition for future periods so it is better aligned with the new production schedule. For our offshore and other 
complex steel structures, we update the estimates of total costs to complete each order quarterly. Based on these updates, 
revenue in the current period may reflect adjustments for amounts that had been previously recognized. During fiscal 
2019 and 2018, there were no changes to inputs/estimates which resulted in adjustments to revenue for production that 
occurred prior to the beginning of the year. A provision for loss on the performance obligation is recognized if and when 
an order is projected to be at a loss, whether or not production has started. 

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information required is included under the captioned paragraph, “MARKET RISK” on page 35 of this report.

(cid:23)(cid:19)

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements of the Company and its subsidiaries are included herein as listed 

below:

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm
Consolidated Statements of Earnings—Three-Year Period Ended December 28, 2019
Consolidated Statements of Comprehensive Income—Three-Year Period Ended December 28, 2019
Consolidated Balance Sheets—December 28, 2019 and December 29, 2018
Consolidated Statements of Cash Flows—Three-Year Period Ended December 28, 2019

    Consolidated Statements of Shareholders’ Equity—Three-Year Period Ended December 28, 2019

Notes to Consolidated Financial Statements—Three-Year Period Ended December 28, 2019

Page

42
44
45
46
47
48
49

(cid:23)(cid:20)

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Valmont Industries, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Valmont Industries, Inc. and subsidiaries (the "Company") 
as of December 28, 2019 and December 29, 2018, the related consolidated statements of earnings, comprehensive income, 
cash flows, and shareholders' equity, for each of the three years in the period ended December 28, 2019, and the related notes 
and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the 
financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2019 
and December 29, 2018, and the results of its operations and its cash flows for each of the three years in the period ended 
December 28, 2019, in conformity with the accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the Company's internal control over financial reporting as of December 28, 2019, based on criteria established in 
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway 
Commission and our report dated February 26, 2020, expressed an unqualified opinion on the Company's internal control 
over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, effective December 30, 2018, the Company adopted FASB Accounting 
Standards Update 2016-02, Leases.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion 
on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and 
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the 
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due 
to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial 
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included 
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also 
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the 
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that 
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that 
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The 
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, 
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or 
on the accounts or disclosures to which it relates.

Goodwill - Refer to Notes 1 and 8 to the consolidated financial statements

Critical Audit Matter Description

The Company has goodwill of $429 million as of December 28, 2019, which is allocated among twelve reporting units. The 
Company evaluates its twelve reporting units for goodwill impairment during the third fiscal quarter of each year. Reporting 
units are evaluated using after-tax cash flows from operations (less capital expenses) discounted to present value. The 
discounted cash flow method requires management to make significant estimates and assumptions related to projected cash 

(cid:23)(cid:21)

flows. The estimated fair value of all reporting units exceeded their respective carrying value, therefore, no impairment was 
recognized.

We identified goodwill for certain reporting units as a critical audit matter because of the significant estimates and 
assumptions made by management to estimate fair value, including the impact of forecasted geographic expansion and 
forecasted growth in a recently acquired reporting unit, and the difference between the fair values and the carrying values of 
these reporting units as of December 28, 2019. This required a high degree of auditor judgment and an increased extent of 
effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the 
reasonableness of management’s estimates and assumptions related to certain assumptions within the projected cash flows. 

How the Critical Audit Matter Was Addressed in the Audit 

Our audit procedures related to the goodwill impairment assessment for certain reporting units included the following, among 
others: 

•  We tested the effectiveness of internal controls over management’s goodwill impairment evaluation, including those 

over the projected cash flows.

•  We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical 

forecasts. 

•  We evaluated the reasonableness of management’s projected cash flows by comparing to (1) historical results, (2) 
internal communications to management and the Board of Directors, (3) industry reports and (4) forecasted 
information included in Company press releases to analysts and investors.  

•  With the assistance of our fair value specialists, we evaluated the certain reporting units’ valuation compared to its 

peer companies.

•  We evaluated the impact of changes in management’s forecasts from the August 31, 2019 annual measurement date 

to December 28, 2019.

/s/ DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 26, 2020 

We have served as the Company's auditor since 1996.

(cid:23)(cid:22)

Valmont Industries, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

Three-year period ended December 28, 2019 

(Dollars in thousands, except per share amounts)

Product sales
Services sales

Net sales

Product cost of sales

Services cost of sales
Total cost of sales

Gross profit

Selling, general and administrative expenses

Impairment of goodwill and intangible assets

Operating income

Other income (expenses):

Interest expense
Interest income
Gain (loss) on investments - unrealized

Costs associated with refinancing of debt

Loss from divestiture of grinding media business

Other

Earnings before income taxes and equity in earnings of

nonconsolidated subsidiaries

Income tax expense (benefit):

Current

Deferred

Net earnings

Less: Earnings attributable to noncontrolling interests

Net earnings attributable to Valmont Industries, Inc.

Earnings per share:

Basic
Diluted

2019
$ 2,434,190
332,786

2018
$ 2,437,334
319,810

2017
$ 2,447,219
298,748

2,766,976
1,853,965

220,515
2,074,480

692,496
454,776

—

237,720

(40,153)
3,942
5,960

—

—

2,204
(28,047)

2,757,144
1,887,959

210,905
2,098,864

658,280
440,220

15,780

202,280

(44,237)
4,668
(839)
(14,820)
(6,084)
2,473
(58,839)

2,745,967
1,860,087

204,112
2,064,199

681,768
414,688

—

267,080

(44,645)
4,737
3,863

—

—
(2,571)
(38,616)

209,673

143,441

228,464

46,267

3,940
50,207

159,466
(5,697)
153,769

7.10
7.06

$

$
$

44,794
(1,659)
43,135

100,306
(5,955)
94,351

4.23
4.20

$

$
$

66,390

39,755
106,145

122,319
(6,079)
116,240

5.16
5.11

$

$
$

See accompanying notes to consolidated financial statements.

(cid:23)(cid:23)

Valmont Industries, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three-year period ended December 28, 2019 

(Dollars in thousands)

Net earnings

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
Unrealized translation gains (losses)
Realized loss on divestiture of grinding media business recorded
in other expense

2019

2018

2017

$

159,466

$

100,306

$

122,319

(2,506)

(65,436)

79,279

—
(2,506) $

9,203
(56,233) $

—
79,279

$

Gain/(loss) on hedging activities:

Unrealized gain (loss) on net investment hedges, net of tax expense
(benefit) of $384 in 2019, $1,894 in 2018 and ($880) in 2017
Realized loss on grinding media net investment hedge
Amortization cost (benefit) included in interest expense
Deferred loss on interest rate hedges

Commodity hedges

Realized (gain) loss on commodity hedges recorded in earnings

     Unrealized gain (loss) on cross currency swaps

Actuarial gain (loss) on defined benefit pension plan, net of tax expense

(benefit) of ($2,710) in 2019, $8,177 in 2018, ($501) in 2017

Other comprehensive income (loss)

Comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to Valmont Industries, Inc.

$

1,154
—
(64)
—
(2,130)
2,130
1,815
2,905

5,291
1,215
423
(2,467)
1,021
(1,021)
352
4,814

(10,828)
(10,429)
149,037
(5,505)
143,532

$

29,885
(21,534)
78,772
(8,584)
70,188

$

(1,695)
—
74
—

—

—
—
(1,621)

(10,871)
66,787
189,106
(5,529)
183,577

See accompanying notes to consolidated financial statements.

(cid:23)(cid:24)

Valmont Industries, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
December 28, 2019 and December 29, 2018 

(Dollars in thousands, except shares and per share amounts)

Current assets:

ASSETS

Cash and cash equivalents
Receivables, less allowance of $9,548 in 2019 and $8,277 in 2018
Inventories
Contract asset - costs and profits in excess of billings
Prepaid expenses, restricted cash, and other assets
Refundable income taxes
Total current assets

Property, plant and equipment, at cost

Less accumulated depreciation and amortization

Net property, plant and equipment

Goodwill
Other intangible assets, net
Other assets

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current installments of long-term debt
Notes payable to banks
Accounts payable
Accrued employee compensation and benefits
Accrued expenses

Dividends payable

Total current liabilities

Deferred income taxes
Long-term debt, excluding current installments
Defined benefit pension liability
Operating lease liabilities
Deferred compensation
Other noncurrent liabilities
Shareholders’ equity:

Preferred stock of $1 par value -

Authorized 500,000 shares; none issued

Common stock of $1 par value -

Authorized 75,000,000 shares; 27,900,000 issued

Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Cost of treasury stock, common shares of 6,356,103 in 2019 and 5,951,971 in 2018

Total Valmont Industries, Inc. shareholders’ equity

Noncontrolling interest in consolidated subsidiaries

Total shareholders’ equity
Total liabilities and shareholders’ equity

See accompanying notes to consolidated financial statements.

(cid:23)(cid:25)

2019

2018

$

$

$

353,542
480,000
374,565
141,322
32,043
6,947
1,388,419
1,245,261
687,132
558,129
428,864
175,742
212,257
2,763,411

760
21,774
197,957
83,528
201,681
8,079
513,779
47,955
764,944
140,007
85,817
45,114
8,904

313,210
483,963
383,566
112,525
42,800
4,576
1,340,640
1,160,865
646,873
513,992
385,207
175,956
114,479
2,530,274

779
10,678
218,115
79,291
91,942
8,230
409,035
43,489
741,822
143,904
—
46,107
10,394

—

—

27,900
—
2,140,948
(313,422)
(743,942)
1,111,484
45,407
1,156,891
2,763,411

$

27,900
—
2,027,596
(303,185)
(692,549)
1,059,762
75,761
1,135,523
2,530,274

$

$

$

$

Valmont Industries, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three-year period ended December 28, 2019 (Dollars in thousands)

Cash flows from operating activities:

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

Depreciation and amortization
Noncash loss on trading securities
Contribution to defined benefit pension plan
Impairment of property, plant and equipment
Impairment of goodwill & intangible assets
Loss on divestiture of grinding media business
Stock-based compensation
Defined benefit pension plan expense (benefit)
       (Gain) loss on sale of property, plant and equipment

Deferred income taxes
Changes in assets and liabilities (net of acquisitions):

Receivables
Inventories
Prepaid expenses
Contract asset - costs and profits in excess of billings
Accounts payable
Accrued expenses
Other noncurrent liabilities
Income taxes payable (refundable)

Net cash flows from operating activities

Cash flows from investing activities:

Purchase of property, plant and equipment
Proceeds from sale of assets
Acquisitions, net of cash acquired
Proceeds from settlement of net investment hedge
Investments in nonconsolidated subsidiaries
Other, net

Net cash flows used in investing activities

Cash flows from financing activities:

Borrowings (payments) under short-term agreements
Proceeds from long-term borrowings
Principal payments on long-term borrowings
Settlement of financial derivatives
Debt issuance costs
Dividends paid
Dividends to noncontrolling interest
Purchase of noncontrolling interest
Proceeds from exercises under stock plans
Purchase of treasury shares
Purchase of common treasury shares—stock plan exercises
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash, cash equivalents, and restricted cash—beginning of year
Cash, cash equivalents, and restricted cash—end of year

2019

2018

2017

$

159,466

$

100,306

$

122,319

82,264
(172)
(18,461)
—
—
—
11,587
(513)
(2,513)
3,940

5,408
12,313
4,413
(29,274)
(21,410)
108,784
(1,274)
(6,944)
307,614

(97,425)
5,556
(81,841)
11,184
(6,169)
545
(168,150)

11,327
31,000
(10,768)
—
—
(32,642)
(7,737)
(27,845)
13,619
(62,915)
(12,989)
(98,950)
(182)
40,332
313,210
353,542

82,827
(62)
(1,537)
5,000
15,780
6,084
10,392
(2,251)
(225)
(1,659)

12,571
(13,774)
(11,048)
(32,932)
(1,486)
49
(10,888)
(4,139)
153,008

(71,985)
63,103
(143,020)
(1,621)
—
(1,922)
(155,445)

10,543
251,655
(262,191)
(2,467)
(2,322)
(33,726)
(7,055)
(5,510)
7,357
(114,805)
(3,589)
(162,110)
(15,048)
(179,595)
492,805
313,210

$

$

$

84,957
237
(40,245)
—
—
—
10,706
648
(3,924)
39,755

(49,112)
(57,442)
(6,214)
176
39,405
(1,998)
(7,228)
1,108
133,148

(55,266)
8,185
(5,362)
5,123
—
(2,295)
(49,615)

(585)
—
(887)
—
—
(33,862)
(5,674)
—
35,159
—
(26,161)
(32,010)
27,682
79,205
413,600
492,805

See accompanying notes to consolidated financial statements.

(cid:23)(cid:26)

Valmont Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three-year period ended December 28, 2019 
(Dollars in thousands, except shares and per share amounts)

Additional
paid-in
capital

$

Retained
earnings
— $1,874,722

Accumulated
other
comprehensive
income (loss)
$

(346,359) $ (612,781) $

Noncontrolling
interest in
consolidated
subsidiaries

Total
shareholders’
equity

Treasury
stock

Balance at December 30, 2017

27,900

— 1,954,344

(279,022)

(590,386)

38,959

1,151,795

Balance at December 31, 2016

Net earnings

Other comprehensive income (loss)

Cash dividends declared ($1.50 per share)

Dividends to noncontrolling interests

Stock plan exercises; 154,437 shares 

acquired

Stock options exercised; 284,574 shares 

issued

Stock option expense

Stock awards; 42,846 shares issued

Common
stock
27,900

$

—

—

—

—

—

—

—

—

—

—

—

—

—

(4,666)

5,137

(471)

116,240

—

(33,927)

—

—

(2,691)

—

—

—

67,337

—

—

—

—

—

—

—

—

—

—

(26,161)

42,516

—

6,040

Net earnings

Other comprehensive income (loss)

Cash dividends declared ($1.50 per share)

Dividends to noncontrolling interests

Purchase of noncontrolling interest

Cumulative impact of ASC 606 adoption

Impact of ASU 2016-16 adoption

Addition of noncontrolling interest

Purchase of treasury shares; 843,278 

shares acquired

Stock plan exercises; 27,555 shares 

acquired

Stock options exercised; 63,717 shares 

issued

Stock option expense

Stock awards; 61,208 shares issued

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(2,397)

4,064

(1,667)

94,351

—

(33,426)

—

—

9,771

1,038

—

—

—

1,518

—

—

—

(24,163)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

— (114,805)

—

—

—

—

(3,589)

8,236

—

7,995

Balance at December 29, 2018

27,900

— 2,027,596

(303,185)

(692,549)

Net earnings

Other comprehensive income (loss)

Cash dividends declared ($1.50 per share)

Dividends to noncontrolling interests

Purchase of noncontrolling interest

Impact of ASU 842 adoption

Purchase of treasury shares; 491,045 

shares acquired

Stock plan exercises; 90,868 shares 

acquired

Stock options exercised; 119,789 shares 

issued

Stock option expense

Stock awards; 60,021 shares issued

Balance at December 28, 2019

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

277

—

—

—

(3,756)

2,772

707

153,769

—

(32,503)

—

—

(8,886)

—

—

972

—

—

—

(10,237)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(62,915)

(12,989)

16,403

—

8,108

39,104

$

6,079

(550)

—

(5,674)

—

—

—

—

982,586

122,319

66,787

(33,927)

(5,674)

(26,161)

35,159

5,137

5,569

5,955

2,629

—

(7,055)

(5,510)

—

—

40,783

—

—

—

—

—

75,761

5,697

(192)

—

(7,737)

(28,122)

—

—

—

—

—

—

100,306

(21,534)

(33,426)

(7,055)

(5,510)

9,771

1,038

40,783

(114,805)

(3,589)

7,357

4,064

6,328

1,135,523

159,466

(10,429)

(32,503)

(7,737)

(27,845)

(8,886)

(62,915)

(12,989)

13,619

2,772

8,815

$

27,900

$

— $2,140,948

$

(313,422) $ (743,942) $

45,407

$

1,156,891

See accompanying notes to consolidated financial statements.

(cid:23)(cid:27)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Valmont Industries, Inc. and its wholly and 
majority owned subsidiaries (the Company). Investments in 20% to 50% owned affiliates and joint ventures are accounted 
for by the equity method. Investments in less than 20% owned affiliates are accounted for by the cost method. All 
intercompany items have been eliminated. 

Cash overdrafts

Cash book overdrafts totaling $13,971 and $8,888 were classified as accounts payable at December 28, 2019 and 

December 29, 2018, respectively. The Company’s policy is to report the change in book overdrafts as an operating activity in 
the Consolidated Statements of Cash Flows.

Segments

The Company has four reportable segments based on its management structure. Each segment is global in nature 
with a manager responsible for segment operational performance and allocation of capital within the segment. Reportable 
segments are as follows:

ENGINEERED SUPPORT STRUCTURES: This segment consists of the manufacture and distribution of 

engineered metal and composite poles, towers, and components for global lighting, traffic, and wireless communication 
markets, engineered access systems, integrated structure solutions for smart cities, and highway safety products;

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

structures for global utility transmission, distribution, substations, and renewable energy generation equipment;

COATINGS: This segment consists of galvanizing, painting, and anodizing services to preserve and protect metal 

products; and

IRRIGATION: This segment consists of the manufacture of agricultural irrigation equipment, parts, services, tubular 

products, water management solutions, and technology for precision agriculture.

In addition to these four reportable segments, there are other businesses and activities which are not more than 10% 

of consolidated sales, operating income or assets. This includes the manufacture of forged steel grinding media for the mining 
industry and is reported in the "Other" category until its divestiture in 2018.

Fiscal Year

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

Accordingly, the Company’s fiscal years ended December 28, 2019, December 29, 2018 and December 30, 2017 consisted of 
52 weeks. 

(cid:23)(cid:28)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable

Accounts receivable are reported on the balance sheet net of any allowance for doubtful accounts.  Allowances are 
maintained in amounts considered to be appropriate in relation to the outstanding receivables based on age of the receivable, 
economic conditions and customer credit quality. As the Company’s international Irrigation 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, or 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. The Company’s allowance for doubtful accounts related 
to current accounts receivable was $9,548 at December 28, 2019.

Inventories

Approximately 41% and 37% of inventory is valued at the lower of cost, determined on the last-in, first-out (LIFO) 
method, or market as of December 28, 2019 and December 29, 2018, respectively. All other inventory is valued at the lower 
of cost, determined on the first-in, first-out (FIFO) method or market. Finished goods and manufactured goods inventories 
include the costs of acquired raw materials and related factory labor and overhead charges required to convert raw materials 
to manufactured and finished goods. The excess of replacement cost of inventories over the LIFO value is approximately 
$43,805 and $53,619 at December 28, 2019 and December 29, 2018, respectively. 

Long-Lived Assets

Property, plant and equipment are recorded at historical cost. The Company generally uses the straight-line method 

in computing depreciation and amortization for financial reporting purposes and accelerated methods for income tax 
purposes. The annual provisions for depreciation and amortization have been computed principally in accordance with the 
following ranges of asset lives: buildings and improvements 15 to 40 years, machinery and equipment 3 to 12 years, 
transportation equipment 3 to 24 years, office furniture and equipment 3 to 7 years and intangible assets 5 to 20 years. 
Depreciation expense in fiscal 2019, 2018 and 2017 was $64,177, $67,499 and $69,046, respectively.

An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated 

future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its 
estimated fair value. Upon adoption of ASC 842 in 2019, the Company impaired the right-of-use (lease) asset for one of its 
galvanizing facilities in Australia as it will not generate sufficient cash flows to recover the carrying value. Impairment losses 
were recorded in 2018 as facilities were closed and future plans for certain fixed assets changed in connection with the 
Company's restructuring plans. 

The Company evaluates its reporting units for impairment of goodwill during the third fiscal quarter of each year, or 

when events or changes in circumstances indicate the carrying value may not be recoverable. Reporting units are evaluated 
using after-tax operating cash flows (less capital expenditures) discounted to present value. Indefinite lived intangible assets 
are assessed separately from goodwill as part of the annual impairment testing, using a relief-from-royalty method. If the 
underlying assumptions related to the valuation of a reporting unit’s goodwill or an indefinite lived intangible asset change 
materially before or after the annual impairment testing, the reporting unit or asset is evaluated for potential impairment. In 
these evaluations, management considers recent operating performance, expected future performance, industry conditions and 
other indicators of potential impairment. See footnote 8 for details of impairments recognized during 2018. 

(cid:24)(cid:19)

 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company uses the asset and liability method to calculate deferred income taxes. Deferred tax assets and 

liabilities are recognized on temporary differences between financial statement and tax bases of assets and liabilities using 
enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the 
period that includes the enactment date.

Warranties

The Company's provision for product warranty reflects management's best estimate of probable liability under its 

product warranties.  Estimated future warranty costs are recorded at the time a sale is recognized.  Future warranty liability is 
determined based on applying historical claim rate experience to units sold that are still within the warranty period.  In 
addition, the Company records provisions for known warranty claims.

Pension Benefits

Certain expenses are incurred in connection with a defined benefit pension plan.  In order to measure expense and 
the related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected 
return on plan assets used to fund these expenses and estimated future inflation rates.  These assumptions are based on 
historical experience as well as current facts and circumstances.  An actuarial analysis is used to measure the expense and 
liability associated with pension benefits.

Derivative Instruments

The Company may enter into derivative financial instruments to manage risk associated with fluctuation in interest 

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

Comprehensive Income (Loss) 

Comprehensive income (loss) includes net income, currency translation adjustments, certain derivative-related 
activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are 
translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in 
effect on the balance sheet dates. The components of accumulated other comprehensive income (loss) consisted of the 
following:

Defined
Benefit
Pension Plan
$

(84,095) $
(10,828)
(94,923) $

$

Accumulated
Other
Comprehensive
Income (Loss)

(303,185)
(10,237)
(313,422)  

Foreign
Currency
Translation
Adjustments
$

Balance at December 29, 2018
Current-period comprehensive income (loss)
Balance at December 28, 2019

$

(230,261) $
(2,314)
(232,575) $

Gain on
Hedging
Activities

11,171
2,905
14,076

(cid:24)(cid:20)

 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

On December 31, 2017, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from 

Contracts with Customers (ASC 606). The Company elected to use the modified retrospective approach for the adoption of 
the new revenue standard. 

The Company determines the appropriate revenue recognition for our contracts by analyzing the type, terms and 

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

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

Shipping and handling costs associated with sales are recorded as cost of goods sold. The Company elected to use 

the practical expedient of treating freight as a fulfillment obligation instead of a separate performance obligation and ratably 
recognize freight expense as the structure is being manufactured, when the revenue from the associated customer contract is 
being recognized over time.  With the exception of the Utility segment and the wireless communication structures product 
line, the Company’s inventory is interchangeable for a variety of each segment’s customers. The Company elected the 
practical expedient 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. The Company did not have any significant contracts with an original 
expected duration of more than one year at December 28, 2019. In addition, the Company elected the practical expedient to 
not adjust the amount of consideration to be received in a contract for any significant financing component if payment is 
expected within twelve months of transfer of control of goods or services; the Company expects all consideration to be 
received in one year or less at contract inception.

Segment and Product Line Revenue Recognition 

The global Utility segment revenues are derived from manufactured steel and concrete structures for the North 

America utility industry and offshore and other complex structures used in energy generation and distribution outside of the 
United States. Steel and concrete utility structures 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 our rights to payment for work performed to-date 
plus a reasonable profit as the products do not have an alternative use to the Company. Since control is transferring over time, 
revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the 
method to measure progress towards completion requires judgment. For our steel and concrete utility and wireless 
communication structure product lines, we generally recognize revenue on an inputs basis, using total production hours 
incurred to-date for each order as a percentage of total hours estimated to produce the order. The completion percentage is 
applied to the order’s total revenue and total estimated costs to determine reported revenue, cost of goods sold and gross 
profit.  Production of an order, once started, is typically completed within three months.  Revenue from the offshore and other 
complex structures business is also recognized 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 sales of steel and 
concrete structures; the Company has chosen to use the practical expedient to expense estimated commissions owed to third 
parties by recognizing them proportionately as the goods are manufactured.   

(cid:24)(cid:21)

 
 
 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The global ESS segment revenues are derived from the manufacture and distribution of engineered metal, composite 

structures and components for lighting and traffic and roadway safety, engineered access systems, and wireless 
communication.  For the lighting and traffic and roadway safety product lines, 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. 
For Access Systems, revenue is generally recognized upon delivery of goods to the customer which is the same point in time 
that the customer is billed. The wireless communication monopole product line has large regional customers who have unique 
product specifications for these larger communication 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. For the remaining wireless 
communication product line customers which do not provide a contractual right to bill for work completed on a canceled 
order, revenue is recognized upon shipment or delivery of the goods to the customer which is the same point in time that the 
customer is billed.  For wireless communication towers and components, 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.   

The global Coatings segment revenues are derived by providing coating services to customers’ products, which 

include galvanizing, anodizing, and powder coating. Revenue is recognized once the coating service has been performed and 
the goods are ready to be picked up or delivered to the customer which is the same time that the customer is billed. 

The global Irrigation segment revenues are derived from the manufacture of agricultural irrigation equipment and 

related parts and services for the agricultural industry and tubular products for industrial customers.  Revenue recognition for 
the irrigation segment 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 are primarily billed annually and revenue is recognized on a 
straight-line basis over the subsequent twelve months.

Disaggregation of revenue by product line is disclosed in the Segment footnote. A breakdown by segment of revenue 

recognized over time and revenue recognized at a point in time for the fiscal years ended December 28, 2019 and 
December 29, 2018 is as follows:

Point in Time
Fiscal year
ended
December 28,
2019

Over Time
Fiscal year
ended
December
28, 2019

Point in Time
Fiscal year
ended
December
29, 2018

Over Time
Fiscal year
ended
December
29, 2018

Utility Support Structures
Engineered Support Structures
Coatings
Irrigation
Other
  Total

$

$

47,450
952,056
300,640
564,918
—
1,865,064

$

$

838,158
50,020
—
13,734
—
901,912

$

$

16,760
922,677
286,739
612,385
23,080
1,861,641

$

$

838,446
44,681
—
12,376
—
895,503

The Company's contract asset as of December 28, 2019 and December 29, 2018 was $141,322 and $112,525, 

respectively. Both steel and concrete utility customers in North America are generally invoiced upon shipment or delivery of 
the goods to the customer's specified location and there are typically no up-front or progress payments. The increase in the 
contract asset in 2019 is attributed to an increase in finished structures that had not yet been shipped to the customers.   

(cid:24)(cid:22)

 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

At December 28, 2019 and December 29, 2018, the liability for revenue recognized over time was $117,945 and 

$4,906.  The liability for customer billings in excess of costs and earnings is included in Accrued Expenses on the 
Consolidated Balance Sheets.  During the fiscal year ended December 28, 2019 and December 29, 2018, the Company 
recognized $3,921 and $5,222 of revenue that was included in the liability as of December 29, 2018 and December 30, 2017.  
The revenue recognized was due to applying advance payments received for projects completed during the period. 

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets 

and liabilities, the reported amounts of revenue and expenses and the disclosure of contingent assets and liabilities to prepare 
these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those 
estimates.

Equity Method Investments

The Company has equity method investments in non-consolidated subsidiaries which are recorded within "Other 

assets" on the Consolidated Balance Sheets. 

Treasury Stock

Repurchased shares are recorded as “Treasury Stock” and result in a reduction of “Shareholders’ Equity.” When 

treasury shares are reissued, the Company uses the last-in, first-out method, and the difference between the repurchase cost 
and re-issuance price is charged or credited to “Additional Paid-In Capital.”

In May 2014, the Company announced a capital allocation philosophy which covered a share repurchase program.  

Specifically, the Board of Directors at that time authorized the purchase of up to $500,000 of the Company's outstanding 
common stock from time to time over twelve months at prevailing market prices, through open market or privately-
negotiated transactions.  In February 2015 and again in October 2018, the Board of Directors authorized an additional 
purchase of up to $250,000 of the Company's outstanding common stock with no stated expiration date.  As of December 28, 
2019, the Company has acquired 5,922,454 shares for approximately $795,549 under this share repurchase program.  

Research and Development

Research and development costs are charged to operations in the year incurred. These costs are a component of 
“Selling, general and administrative expenses” on the Consolidated Statements of Earnings. Research and development 
expenses were approximately $13,900 in 2019, $11,500 in 2018, and $11,600 in 2017.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which provides revised guidance on leases requiring 
lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the 
definition of a short-term lease). The Company adopted this ASU in the first quarter of 2019. The Company made an 
accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet for all classes of 
underlying assets. In addition, the Company elected certain practical expedients not to reassess whether existing contracts are 
or contain leases, to not reassess the lease classification of any existing leases, to not reassess initial direct costs for any 
existing leases, and to not separate lease components for all classes of underlying assets. The Company did not to recast its 
comparative periods in transition (the “Comparatives Under 840 Option”) as allowed under ASU 2018-11.  

(cid:24)(cid:23)

 
  
 
 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement 

of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology in current U.S. 
GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. 
This update is intended to provide financial statement users with more decision-useful information about the expected credit 
losses. The effective date of ASU No. 2016-13 will be the first quarter of the Company’s fiscal 2020. The Company does not 
expect the impact of the adoption of ASU No. 2016-13 to be significant on its consolidated financial statements.

(2) ACQUISITIONS

Acquisitions of Businesses

On May 13, 2019, the Company acquired the assets of Connect-It Wireless, Inc. ("Connect-It") for $6,034 in cash.  
Connect-It operates in Florida and is a manufacturer and distributor of wireless site components and safety products. In the 
purchase price allocation, goodwill of $3,299 and customer relationships of $828 were recorded and the remainder is net 
working capital. A portion of the goodwill is deductible for tax purposes. Connect-It is included in the ESS segment and was 
acquired to expand the Company's wireless component distribution network. The purchase price allocation was finalized in 
the fourth quarter of 2019.

On February 11, 2019, the Company acquired the outstanding shares of United Galvanizing ("United"), a provider of 

coatings services for $26,000 in cash. The agreed upon purchase price was $28,000, with $2,000 being contingent on seller 
representations and warranties that was settled in the first quarter of 2020. The acquisition of United, located in Houston, 
Texas further expands the Company's galvanizing footprint in North America and will be reported in the Coatings segment.

 The fair values assigned were $12,374 for goodwill, $3,170 for customer relationships, trade name of $894, $10,987 

for property, plant, and equipment, and the remainder is net working capital. Goodwill is not deductible for tax purposes and 
the customer relationship will be amortized over 10 years. The trade name has an indefinite life. The Company finalized the 
purchase price allocation in the fourth quarter of 2019.

On December 31, 2018, the Company acquired the assets of Larson Camouflage ("Larson"), an industry leading 
provider of architectural and camouflage concealment solutions for the wireless telecommunication market for $31,106 in 
cash. The agreed upon purchase price was $34,562, with 10% being held back for seller representations and warranties (paid 
in the first quarter of 2020). Larson was acquired to grow our product offerings in the wireless communication market and 
will be reported in the ESS segment. The fair values assigned were $16,223 for customer relationships, $15,346 for goodwill, 
$1,151 for property, plant, and equipment and the remainder is net working capital. Goodwill is deductible for tax purposes 
and the customer relationships will be amortized over 12 years. The purchase price allocation was finalized in the fourth 
quarter of 2019.

On October 18, 2018, the Company acquired CSP Coatings Systems of Auckland, New Zealand, a provider of a 

wide range of coatings services for approximately $17,711.  The acquisition further strengthens the Company's Asia-Pacific 
market position and will be reported in the Coatings segment. The preliminary fair values assigned were $7,373 to property, 
plant, and equipment, $3,113 for customer relationships, $5,120 for goodwill, with the remainder net working capital.  
Goodwill is not deductible for tax purposes and the customer relationships will be amortized over 10 years.  The Company 
finalized the purchase price allocation in the second quarter of 2019.

(cid:24)(cid:24)

 
 
 
 
 
 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(2) ACQUISITIONS (Continued)

On August 3, 2018, the Company purchased approximately 72% of the outstanding shares of Walpar, LLC 
("Walpar") for $57,805 in cash. Walpar is an industry leader in the design, engineering and manufacturing of overhead sign 
structures for the North America transportation market. Walpar is located in Birmingham, Alabama and its operations are 
reported in the ESS segment. The transaction was funded with cash on hand. The acquisition of Walpar was completed to 
expand the Company's product offering in the sign structure market. Customer relationships will be amortized over 12 years 
and the trade name has an indefinite life. Goodwill is not deductible for tax purposes.

In January 2019, the 28% non-controlling interest shares of Walpar, LLC were acquired for $23,082. During the 

third quarter of 2019, the Company finalized its purchase price allocation including its assessment of the value of intangibles 
on the opening balance sheet. As a result of updated cash flow projections it was determined that a $3,500 reduction in 
customer relationships, along with an offsetting increase in goodwill less deferred tax, was necessary to adjust the allocation 
of fair value to assets acquired and liabilities assumed. The following table summarizes the fair values of the assets acquired 
and liabilities assumed of Walpar as of the date of acquisition:

Current assets

Customer relationships

Trade name

Goodwill

     Total fair value of assets acquired

Current liabilities

Deferred taxes

     Total fair value of liabilities assumed

Non-controlling interests

     Net assets acquired

At August 3,
2018

13,210

28,500

3,500

45,453

90,663

2,197

7,579

9,776

23,082

57,805

$

$

$

$

On August 3, 2018, the Company acquired 75% of the outstanding shares of Convert Italia SpA ("Convert") for 
$43,504 in cash. In the second quarter of 2019, the Company paid the former owners approximately $18,700 additional 
purchase price which was reflected in the contingent consideration liability on the fair value of assets and liabilities assumed 
on acquisition. Convert is a designer and provider of engineered solar tracker solutions that is headquartered in Italy, with 
offices in Brazil and Argentina. The Company acquired Convert to grow market adjacencies in the Utility Support Structures 
segment. 

(cid:24)(cid:25)

 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(2) ACQUISITIONS (Continued)

Patents and proprietary technology will be amortized over 15 years and the trade name has an indefinite life. 
Goodwill is not deductible for tax purposes. The fair value measurement process and purchase price allocation was finalized 
in the third quarter of 2019. The following table summarizes the fair values of the assets acquired and liabilities assumed of 
Convert at the date of acquisition:  

Current assets

Other assets

Patent and Proprietary Technology

Trade name

Goodwill
     Total fair value of assets acquired

Current liabilities

Contingent consideration liability

Deferred taxes

     Total fair value of liabilities assumed

Non-controlling interests
     Net assets acquired

At August 3,
2018

18,349

3,166

16,554

8,701

42,169
88,939

5,376

19,497

6,061

30,934

14,501
43,504

$

$

$

$

On August 1, 2018, the Company acquired the operational assets of Derit Infrastructure Pvt. Ltd. ("Derit") for 
$14,700 in cash, net of assumed liabilities. The Company acquired the net assets at fair value with no value assigned to 
intangible assets in the purchase price allocation. Derit has a manufacturing facility in India with production capabilities for 
steel lattice structures for power transmission, wireless communication, and a provider of zinc galvanizing services. Derit 
was acquired to provide the Company with lattice structure manufacturing capabilities and to further expand the geographic 
footprint of the galvanizing business. The majority of the business will be reported in the Utility Support Structures segment, 
while the galvanizing business will be reported in the Coatings segment. The purchase price allocation was finalized in the 
fourth quarter of 2018. 

On January 26, 2018, the Company acquired 60% of the assets of Torrent Engineering and Equipment ("Torrent") 
for $4,800 in cash.  Torrent operates in Indiana and is an integrator of prefabricated pump stations that involves designing 
high pressure water and compressed air process systems.  Torrent has annual sales of approximately $9,000.  In the purchase 
price allocation, goodwill of $3,922 and $4,020 of customer relationships and other intangible assets were recorded. A 
portion of the goodwill is deductible for tax purposes. Torrent is included in the Irrigation segment and was acquired to 
expand the Company's water management capabilities. The purchase price allocation was finalized in the second quarter of 
2018. 

(cid:24)(cid:26)

 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(2) ACQUISITIONS (Continued)

             The Company's Consolidated Statements of Earnings for the fiscal year ended December 28, 2019 included net sales 
from acquisitions of $117,296. In aggregate, these acquisitions did not contribute net earnings to the Company's consolidated 
2019 results. The proforma effect of these acquisitions on the 2019, 2018, and 2017 Consolidated Statements of Earnings is 
as follows:

Net sales

Net earnings

Earnings per share-diluted

Acquisitions of Noncontrolling Interests

Fifty-two
Weeks Ended
December 28,
2019

Fifty-two
Weeks Ended
December 29,
2018

Fifty-two
Weeks Ended
December 30,
2017

$

2,772,150

$

2,842,162

$

2,818,035

154,302

7.09

98,292

4.38

122,407

5.39

In April 2019, the Company acquired the remaining 4.8% of Valmont SM that it did not own for $4,763. In March 
2018, the Company acquired the remaining 10% of Valmont Industria e Commercio Ltda. that it did not own for $5,510. As 
this transaction was for acquisitions of all of the remaining shares of consolidated subsidiaries with no change in control, it 
was recorded within shareholders' equity and as a financing cash flow in the Consolidated Statements of Cash Flows.

(3) DIVESTITURE

On April 30, 2018, the Company completed the sale of Donhad, its grinding media business in Australia, reported in 
the Other segment.  The business was sold because it did not fit the long-term strategic plans for the Company.  The grinding 
media business historical annual sales, operating profit, and net assets are not significant for discontinued operations 
presentation. The grinding media business had an operating loss of $913 for the year ended December 29, 2018, and 
operating income of $2,134 for the ended December 30, 2017. The Company received Australian $82,500 (U.S. $62,518). 

The pre-tax loss from the divestiture is reported in other income (expense).  The loss is comprised of the proceeds 

from buyer, less deal-related costs, less the net assets of the business which resulted in a gain of $4,334.  Offsetting this 
amount is a $(10,418) realized loss on foreign exchange translation adjustments and net investment hedges previously 
reported in shareholders' equity. 

Pre-tax gain from divestiture, before recognition of currency translation loss
Recognition of cumulative currency translation loss and hedges (out of OCI)
   Net pre-tax loss from divestiture of the grinding media business

$

$

4,334
(10,418)
(6,084)

The transaction did not result in a taxable capital gain as the cash proceeds were less than the tax carrying value of 

the business.  There is an insignificant tax benefit from the tax deductibility of deal related expenses.   

(cid:24)(cid:27)

 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(4) RESTRUCTURING ACTIVITIES 

2018 Plan 

During 2018, the Company executed certain regional restructuring activities (the "2018 Plan") primarily in the ESS 

and Utility segments to transform its operational business model including exiting certain local markets.  The 2018 Plan 
included the closure of seven facilities, including three in China.  The one Utility facility and one ESS facility in Europe 
ceased production in the second quarter of 2019.  All other facilities were closed by December 29, 2018.  The Company 
recorded the following pre-tax expenses: 

ESS

Utility

Irrigation

Other/
Corporate

TOTAL

Severance

$ 6,255

$ 1,825

$

— $

— $

Other cash restructuring expenses

3,512

2,228

Impairments of fixed assets/net
loss on disposals

   Total cost of sales

Severance

Other cash restructuring expenses

Impairments of fixed assets/net
loss on disposals

  Total selling, general and
administrative expenses

4,560

—

14,327

4,053

10,654

3,151

440

1,100

—

—

14,245

1,100

      Consolidated total

$ 28,572

$ 5,153

$

—

—

—

129

51

—

180

180

$

—

—

—

—

126

—

126

126

$

8,080

5,740

4,560

18,380

11,883

3,328

440

15,651

34,031

In connection with exiting certain local markets as a result of the 2018 Plan, the Company also recorded $7,944 of 

impairments of current and other assets during fiscal 2018, primarily inventory.  

Change in the liabilities recorded for the restructuring plans were as follows:

Balance at
December 29,
2018

Recognized
Restructuring
Expense

Costs Paid or
Otherwise
Settled

Balance at
December 28,
2019

Severance
Other cash restructuring expenses
   Total

$

$

6,594
3,462
10,056

$

$

— $
—
— $

(6,594)
(3,462)
(10,056)

$

$

—
—
—

(cid:24)(cid:28)

 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(5) CASH FLOW SUPPLEMENTARY INFORMATION

The Company considers all highly liquid temporary cash investments purchased with an original maturity of three 
months or less at the time of purchase to be cash equivalents. Cash payments for interest and income taxes (net of refunds) 
for the fifty-two weeks ended December 28, 2019 and December 29, 2018, and December 30, 2017 were as follows:

Interest
Income taxes

2019
$ 39,032
43,629

2018
$ 43,305
47,355

$

2017
44,528
63,791

The 2019 acquisition of United and Larson included hold back payments contingent on seller representations and 

warranties of $2,000 and $3,456, respectively. The hold back payments were paid in the first quarter of 2020 and will be 
shown as an investing use of cash in the acquisitions line item of the consolidated statements of cash flows in 2020.

(6) INVENTORIES

Inventories consisted of the following at December 28, 2019 and December 29, 2018:

Raw materials and purchased parts
Work-in-process
Finished goods and manufactured goods
Subtotal
Less: LIFO reserve

(7) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consist of the following:

Land and improvements
Buildings and improvements
Machinery and equipment
Transportation equipment
Office furniture and equipment
Construction in progress

2019
158,314
38,088
221,968
418,370
43,805
374,565

$

$

2018
190,115
35,566
211,504
437,185
53,619
383,566

$

$

2019
$ 111,091
364,396
584,447
23,650
85,130
76,547
$1,245,261

$

2018
99,797
348,836
549,311
24,380
85,239
53,302
$1,160,865

(cid:25)(cid:19)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(8) GOODWILL AND INTANGIBLE ASSETS

Amortized Intangible Assets

The components of amortized intangible assets at December 28, 2019 and December 29, 2018 were as follows: 

Customer Relationships
Patents & Proprietary Technology
Other

Customer Relationships
Patents & Proprietary Technology
Other

December 28, 2019

Gross
Carrying
Amount
$ 237,626
24,068
8,054
$ 269,748

$

$

Accumulated
Amortization

149,720
6,358
7,035
163,113

Weighted
Average
Life
13 years
14 years
5 years

December 29, 2018

Gross
Carrying
Amount
$ 219,508
23,662
7,971
$ 251,141

$

$

Accumulated
Amortization

132,180
4,837
6,891
143,908

Weighted
Average
Life
13 years
14 years
5 years

Amortization expense for intangible assets was $18,087, $15,328 and $15,911 for the fiscal years ended 

December 28, 2019, December 29, 2018 and December 30, 2017, respectively.

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

2020
2021
2022
2023
2024

Estimated
Amortization
Expense

$

17,343
15,298
13,120
11,345
9,434

The useful lives assigned to finite lived intangible assets included consideration of factors such as the Company’s 

past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying 
arrangement that resulted in the recognition of the intangible asset and the Company’s expected use of the intangible asset.

(cid:25)(cid:20)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(8) GOODWILL AND INTANGIBLE ASSETS (Continued)

Non-amortized intangible assets

Intangible assets with indefinite lives are not amortized. The carrying values of trade names at December 28, 2019 

and December 29, 2018 were as follows:

Newmark
Webforge
Valmont SM
Ingal EPS/Ingal Civil Products
Shakespeare
Walpar
Convert
Other

December 28,
2019

December 29,
2018

$

$

11,111
9,143
7,966
7,454
4,000
3,500
8,378
17,555
69,107

$

$

11,111
8,872
8,155
7,233
4,000
4,300
8,580
16,472
68,723

Year
Acquired
2004
2010
2014
2010
2014
2018
2018

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

The Company's trade names were tested for impairment separately from goodwill in the third quarter of 2019. The 

value of each trade name was determined using the relief-from-royalty method. Based on this evaluation, no trade names 
were determined to be impaired. The Company recorded a charge of $1,425 in the third quarter of 2018 for the offshore and 
other complex steel structures (Valmont SM) trade name.

Goodwill

The carrying amount of goodwill by segment as of December 28, 2019 and December 29, 2018 was as follows:

Engineered
Support
Structures
Segment

Gross balance at December 29, 2018 $ 204,735
(18,670)
Accumulated impairment losses
186,065
Balance at December 29, 2018
Acquisitions
21,870
Foreign currency translation

Balance at December 28, 2019

2,029
$ 209,964

Utility
Support
Structures
Segment
$ 123,618
(14,355)
109,263
7,889
(913)
$ 116,239

Coatings
Segment

$

$

80,937
(16,222)
64,715
12,374

436
77,525

Irrigation
Segment
$ 25,164

25,164
—
(28)
$ 25,136

Total
$ 434,454
— (49,247)
$ 385,207
42,133

1,524
$ 428,864

(cid:25)(cid:21)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(8) GOODWILL AND INTANGIBLE ASSETS (Continued)

Engineered
Support
Structures
Segment

Gross balance at December 30, 2017 $ 170,076
(18,670)
Accumulated impairment losses
151,406
Balance at December 30, 2017
42,216
Acquisitions
—
Impairment
—
Divestiture of grinding media
(7,557)
Foreign currency translation
$ 186,065
Balance at December 29, 2018

Utility
Support
Structures
Segment
$ 90,248
—
90,248
34,280
(14,355)
—
(910)
$ 109,263

Coatings
Segment

$

$

76,696
(16,222)
60,474
5,120
—
—
(879)
64,715

Other
$ 15,814

Irrigation
Total
Segment
$ 372,612
$ 19,778
— (34,892)
—
337,720
15,814
19,778
—
87,119
5,503
— (14,355)
—
(15,814)
— (15,814)
(9,463)
—
— $ 385,207

(117)
$ 25,164

$

 The Company’s annual impairment test of goodwill was performed during the third quarter of 2019, using the 

discounted cash flow method. The estimated fair value of all of our reporting units exceeded their respective carrying value, 
so no goodwill was impaired. The access systems reporting unit with $45,727 of goodwill, is the reporting unit that did not 
have a substantial excess of estimated fair value over its carrying value. The model assumes geographic expansion of its 
architectural product lines with realized recent organic growth in its existing market. If architectural systems sales do not 
increase, the Company will be required to perform an interim test of goodwill. A hypothetical 1% change in the discount rate 
would increase/decrease the fair value of the reporting unit by approximately $15,000, which approximates the cushion 
between estimated fair value and carrying value. In the third quarter of 2018, the Company recognized a goodwill impairment 
totaling $14,355, which represented all of the goodwill of the offshore and other complex steel reporting unit.

(9) BANK CREDIT ARRANGEMENTS

The Company maintains various lines of credit for short-term borrowings totaling $132,849 at December 28, 2019. 

As of December 28, 2019 and December 29, 2018, $21,774 and $10,678 was outstanding and recorded as notes payable 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 2.54% at December 28, 2019. The unused 
and available borrowings under the lines of credit were $111,075 at December 28, 2019. The lines of credit can be modified 
at any time at the option of the banks. The Company pays no fees in connection with unused lines of credit. 

(10) INCOME TAXES

Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries are as follows:

United States
Foreign

2019
175,923
33,750
209,673

$

$

2018
127,852
15,589
143,441

$

$

2017
152,372
76,092
228,464

$

$

In fiscal 2017, the Company estimated and recognized approximately $41,935 of tax expense for the 2017 Tax Act.  

The SEC staff issued SAB 118, which provided guidance on accounting for the tax effects of the 2017 Tax Act. 

(cid:25)(cid:22)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(10) INCOME TAXES (Continued)

The Company's accounting for the following element of the 2017 Tax Act was finalized as of December 30, 2017:  

Reduction of U.S. federal corporate tax rate: The 2017 Tax Act reduces the corporate tax rate to 21 percent, 
effective January 1, 2018. Consequently, the Company recorded a decrease related to deferred taxes of $20,372, with 
a corresponding net adjustment to deferred income tax expense for the year ended December 30, 2017.

The Company's accounting for the following elements of the 2017 Tax Act were provisional estimates at December 30, 2017, 
and were finalized as of December 29, 2018 as follows:

Deemed Repatriation transition tax: The Deemed Repatriation transition tax (“Transition Tax”) is a tax on 
unremitted foreign earnings of certain foreign subsidiaries, which subjected the Company's unremitted foreign 
earnings of approximately $394,000 to tax at certain specified rates less associated foreign tax credits. The Company 
recorded a Transition Tax obligation of $9,890 during fiscal 2017 and reduced this expense by $550 in 2018 upon 
finalization. At December 28, 2019, $785 of the Transition Tax has not been paid and is due in fiscal 2024.

Indefinite reinvestment assertion:  The Company position remains that unremitted foreign earnings subject to the 
Transition Tax are not indefinitely reinvested.  The Company recorded foreign withholding taxes and U.S. state 
income taxes of $10,373 and $1,300. This expense was recorded in 2017 with a decrease of $140 recognized in 2018 
as it was finalized.  In addition, the Company has taken the position that on non-U.S. subsidiaries, unremitted 
foreign earnings are not indefinitely reinvested and it recorded additional foreign withholding taxes and U.S. state 
income taxes of $754 and $43, respectively during 2019.

Income tax expense (benefit) consists of:

Current:

Federal
State
Foreign

Non-current:
Deferred:
Federal
State
Foreign

2019

2018

2017

$

$

27,809
5,568
13,130
46,507
(240)

2,108
553
1,279
3,940
50,207

$

$

21,106
6,585
17,559
45,250
(456)

213
9
(1,881)
(1,659)
43,135

$

$

49,324
4,415
12,880
66,619
(229)

(9,626)
(385)
49,766
39,755
106,145

(cid:25)(cid:23)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(10) INCOME TAXES (Continued)

The reconciliations of the statutory federal income tax rate and the effective tax rate follows:

Statutory federal income tax rate
State income taxes, net of federal benefit
Carryforwards, credits and changes in valuation allowances
Foreign tax rate differences
Changes in unrecognized tax benefits
Domestic production activities deduction
Goodwill impairment
Effects of 2017 Tax Act
Other

2019

2018

2017

21.0%
2.5
(1.0)
0.3
(0.1)
—
—
—
1.3
24.0%

21.0%
3.5
3.2
(1.0)
(0.3)
—
2.2
(0.5)
2.0
30.1%

35.0%
1.4
(1.4)
(4.1)
(0.1)
(2.1)
—
18.4
(0.6)
46.5%

Fiscal 2018 includes $3,171 of tax expense related to non-tax deductible goodwill and $6,756 of tax expense 
primarily related to restructuring charges for which no tax benefits have been recorded due to the increase in valuation 
allowance.  Fiscal 2017 includes $41,935 of tax expense related to the 2017 Tax Act. 

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets 

and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax 
credit carryforwards. The tax effects of significant items comprising the Company’s net deferred income tax liabilities are as 
follows:

2019

2018

$

16,148
64,116
35,539
5,599
14,122
21,763
15,174
172,461
(35,215)
137,246

31,628
49,686
22,066
6,067
109,447
27,799

$

$

$

8,268
56,867
36,328
3,320
13,122
—
16,228
134,133
(33,228)
100,905

25,477
44,850
—
7,291
77,618
23,287  

Deferred income tax assets:

Accrued expenses and allowances
Tax credits and loss carryforwards
Defined benefit pension liability
Inventory allowances
Accrued compensation and benefits
Lease liabilities
Deferred compensation

Gross deferred income tax assets

Valuation allowance

Net deferred income tax assets

Deferred income tax liabilities:

Property, plant and equipment
Intangible assets
Lease assets
Other deferred tax liabilities

Total deferred income tax liabilities
Net deferred income tax asset

(cid:25)(cid:24)

 
 
 
                       
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(10) INCOME TAXES (Continued)

ASC 740 requires an entity to disclose the approximate tax effect of each type of temporary difference and 

carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets.  As a result, the 2018 
component of Deferred compensation in the amount of $28,706 has been disaggregated into Deferred compensation and 
Accrued compensation and benefits in the amounts of $16,228 and $12,478, respectively.  In addition, several components 
previously considered to be significant but no longer rise to a significant level have been aggregated.  The 2018 components 
that have been aggregated are $3,914 of Accrued warranty aggregated with Accrued expenses and allowances, $644 of 
Accrued insurance aggregated with Accrued compensation and benefits, $1,064 of Work in progress aggregated with 
Inventory allowances, and $2,746 of Future repatriation of foreign earnings aggregated with Other deferred tax liabilities. 

Deferred income tax assets (liabilities) are presented as follows on the Consolidated Balance Sheets:

     Balance Sheet Caption

Other assets
Deferred income taxes

Net deferred income tax asset

2019
75,754
(47,955)
27,799

$

$

2018

66,776
(43,489)
23,287

$

$

Management of the Company has reviewed recent operating results and projected future operating results. The 

Company's belief that realization of its net deferred tax assets is more likely than not is based on, among other factors, 
changes in operations that have occurred in recent years and available tax planning strategies. At December 28, 2019 and 
December 29, 2018 respectively, there were $64,116 and $56,867 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. The deferred tax assets at December 28, 2019 that are associated with tax loss and tax credit 
carryforwards not reduced by valuation allowances expire in periods starting 2023. 

Uncertain tax positions included in other non-current liabilities are evaluated in a two-step process, whereby (1) the 
Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits 
of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company would 
recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with 
the related tax authority.

The following summarizes the activity related to our unrecognized tax benefits in 2019 and 2018, in thousands:

Gross unrecognized tax benefits—beginning of year
Gross increases—tax positions in prior period
Gross decreases—tax positions in prior period

Settlements with taxing authorities
Lapse of statute of limitations
Gross unrecognized tax benefits—end of year

2019

2018

$

$

2,599
29
—
593
(150)
(771)
2,300

$

$

3,196
103
(199)
280
(50)
(731)
2,599

There are approximately $685 of uncertain tax positions for which reversal is reasonably possible during the next 

12 months due to the closing of the statute of limitations. The nature of these uncertain tax positions is generally the 
computation of a tax deduction or tax credit. During 2019, the Company recorded a reduction of its gross unrecognized tax 
benefit of $771 with $609 recorded as a reduction of income tax expense, due to the expiration of statutes of limitation in the 
United States. During 2018, the Company recorded a reduction of its gross unrecognized tax benefit of $731, with $577 
recorded as a reduction of its income tax expense, due to the expiration of statutes of limitation in the United States. In 

(cid:25)(cid:25)

 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(10) INCOME TAXES (Continued)

addition to these amounts, there was an aggregate of $178 and $196 of interest and penalties at December 28, 2019 and 
December 29, 2018, 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 2016 
and forward remain open under U.S. statutes of limitation. The total amount of unrecognized tax benefits that, if recognized, 
would affect the effective tax rate was $2,224 and $2,536 at December 28, 2019 and December 29, 2018, respectively.

(11) LONG-TERM DEBT

Long-term debt is as follows:

5.00% senior unsecured notes due 2044(a)
5.25% senior unsecured notes due 2054(b)
Unamortized discount on 5.00% and 5.25% senior unsecured notes (a)(b)
Revolving credit agreement (c)
IDR Bonds(d)
Other notes
Debt issuance costs
Long-term debt

Less current installments of long-term debt

Long-term debt, excluding current installments

December 28,
2019

December 29,
2018

$

$

450,000
305,000
(21,143)
29,044
8,500
2,089
(7,786)
765,704
760
764,944

$

$

450,000
305,000
(21,468)
5,719
8,500
2,918
(8,068)
742,601
779
741,822

(a) 

(b) 

(c) 

The 5.00% senior unsecured notes due 2044 include an aggregate principal amount of $450,000 on which interest is 
paid and an unamortized discount balance of $13,675 at December 28, 2019.  The notes bear interest at 5.000% per 
annum and are due on October 1, 2044.  The discount will be amortized and recognized as interest expense as 
interest payments are made over the term of the notes.  The notes may be repurchased prior to maturity in whole, or 
in part, at any time at 100% of their principal amount plus a make-whole premium and accrued and unpaid interest.  
These notes are guaranteed by certain subsidiaries of the Company.

The 5.25% senior unsecured notes due 2054 include an aggregate principal amount of $305,000 on which interest is 
paid and an unamortized discount balance of $7,468 at December 28, 2019.  The notes bear interest at 5.250% per 
annum and are due on October 1, 2054.  The discount will be amortized and recognized as interest expense as 
interest payments are made over the term of the notes.  The notes may be repurchased prior to maturity in whole, or 
in part, at any time at 100% of their principal amount plus a make-whole premium and accrued and unpaid interest.  
These notes are guaranteed by certain subsidiaries of the Company.

The amended and restated revolving credit facility with JP Morgan Chase Bank, N.A., as Administrative Agent, and 
the other lenders party thereto has a maturity date of October 18, 2022.  The credit facility provides for $600,000 of 
committed unsecured revolving credit loans with available borrowings thereunder to $400,000 in foreign currencies.  
We may increase the credit facility by up to an additional $200,000 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) 

LIBOR (based on a 1, 2, 3 or 6 month interest period, as selected by the Company) plus 100 to 162.5 basis 
points, depending on the credit rating of the Company's senior debt published by Standard & Poor's Rating 
Services and Moody's Investors Service, Inc., or;

(cid:25)(cid:26)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(11) LONG-TERM DEBT (Continued)

(ii) 

the higher of

• 

• 

the prime lending rate,

the Federal Funds rate plus 50 basis points, and

•  LIBOR (based on a 1 month interest period) plus 100 basis points,

plus, in each case, 0 to 62.5 basis points, depending on the credit rating of the Company's senior 
debt published by Standard & Poor's Rating Services and Mood's Investors Service, Inc.

At December 28, 2019, the Company had $29,044 outstanding borrowings under the revolving credit facility. The 

revolving credit facility has a maturity date of October 18, 2022 and contains certain financial covenants that may limit 
additional borrowing capability under the agreement. At December 28, 2019, the Company had the ability to borrow 
$556,569 under this facility, after consideration of standby letters of credit of $14,608 associated with certain insurance 
obligations. We also maintain certain short-term bank lines of credit totaling $132,849, $111,075 of which was unused at 
December 28, 2019.

(d) 

The Industrial Development Revenue Bonds were issued to finance the construction of a manufacturing facility in 
Jasper, Tennessee. Variable interest is payable until final maturity on June 1, 2025. The effective interest rates at 
December 28, 2019 and December 29, 2018 were 2.73% and 3.27% respectively.

The lending agreements include certain maintenance covenants, including financial leverage and interest coverage. 

The Company was in compliance with all financial debt covenants at December 28, 2019.  The minimum aggregate 
maturities of long-term debt for each of the five years following 2019 are: $760, $761, $568, $0 and $0.

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

2054, and the revolving credit facility are guaranteed by the Company and its wholly-owned subsidiaries PiRod, Inc., 
Valmont Coatings, Inc., Valmont Newmark, Inc., and Valmont Queensland Pty. Ltd.

(12) STOCK-BASED COMPENSATION 

The Company maintains stock based compensation plans approved by the shareholders, which provide that the 

Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock 
appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At December 28, 2019, 
1,208,223 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.

Under the stock option plans, the exercise price of each option equals the market price at the time of the grant. 

Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the fifth anniversary of 
the grant. Expiration of grants is seven years from the date of grant. Restricted stock units and awards generally vest in equal 
installments over three years beginning on the first anniversary of the grant. The Company recorded $11,587, $10,392 and 
$10,706 of compensation expense (included in selling, general and administrative expenses) in the 2019, 2018 and 2017 
fiscal years for all share-based compensation programs, respectively. The associated tax benefits recorded in the 2019, 2018 
and 2017 fiscal years was $2,897, $2,598 and $4,068, respectively.

At December 28, 2019, the amount of unrecognized stock option compensation expense, to be recognized over a 

weighted average period of 2.31 years, was approximately $4,979.

(cid:25)(cid:27)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(12) STOCK-BASED COMPENSATION (Continued)

The Company uses a binomial option pricing model to value its stock options. The fair value of each option grant 

made in 2019, 2018 and 2017 was estimated using the following assumptions:

2017

2019
2018
33.13% 33.39% 33.76%
2.12%
3.0 yrs
1.17%

1.69% 2.67%
3.0 yrs
3.0 yrs
1.07% 1.07%

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

4.66 $ 21,806
21,517
4.63
15,005
3.94

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

4.35 $
4.30
3.47

909
909
909

Expected volatility
Risk-free interest rate
Expected life from vesting date
Dividend yield

Following is a summary of the stock option activity during 2017, 2018 and 2019:

Outstanding at December 31, 2016
Granted
Exercised
Forfeited
Outstanding at December 30, 2017
Options vested or expected to vest at December 30, 2017
Options exercisable at December 30, 2017

Number
of
Shares
793,173
67,965
(284,574)
(5,942)
570,622
558,114
351,794

Weighted
Average
Exercise
Price
$ 122.77
164.35
121.92
104.26
$ 128.34
$ 128.00
$ 123.90

The weighted average per share fair value of options granted during 2017 was $43.68.

Outstanding at December 30, 2017
Granted
Exercised
Forfeited
Outstanding at December 29, 2018
Options vested or expected to vest at December 29, 2018
Options exercisable at December 29, 2018

Weighted
Average
Exercise
Price
$ 128.34
112.08
106.26
129.52
$ 127.74
$ 127.84
$ 126.61

Number of
Shares
570,622
105,135
(63,717)
(33,627)
578,413
565,952
405,128

(cid:25)(cid:28)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(12) STOCK-BASED COMPENSATION (Continued)

The weighted average per share fair value of options granted during 2018 was $30.48.

Outstanding at December 29, 2018
Granted
Exercised
Forfeited
Outstanding at December 28, 2019
Options vested or expected to vest at December 28, 2019
Options exercisable at December 28, 2019

Weighted
Average
Exercise
Price
$ 127.74
147.31
113.02
137.07
$ 133.13
$ 133.21
$ 133.32

Number of
Shares
578,413
57,648
(119,789)
(27,712)
488,560
478,575
341,828

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

4.04 $
3.99
3.19

9,291
9,078
6,470

The weighted average per share fair value of options granted during 2019 was $37.85. 

Following is a summary of the status of stock options outstanding at December 28, 2019:

Outstanding and Exercisable By Price Range

Options Outstanding

Options Exercisable

Exercise Price
 Range
$104.47 - 112.08

$123.87 - 132.84

$142.67 - 164.35

Number

183,658

70,396

234,506

488,560

Weighted
Average
Remaining
Contractual
Life
4.59 years

1.95 years

4.24 years

Weighted
Average
Exercise
Price
108.58

$

132.70

152.75

Weighted
Average
Exercise
Price
106.43

$

132.70

152.97

Number

113,866

70,396

157,566

341,828

In accordance with shareholder-approved plans, the Human Resource Committee of the Board of Directors may 

grant stock under various stock based compensation arrangements, including restricted stock awards, restricted stock units, 
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 and awards 
generally vest in equal installments over three years beginning on the first anniversary of the grant. During fiscal 2019, 2018 
and 2017, 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):

Shares granted

Recognized compensation expense

2019
78,318
$ 145.89
$ 8,815

2018
88,127
$ 114.89
$ 6,328

2017
62,160
$ 163.18
$ 5,569

At December 28, 2019 the amount of deferred stock based compensation granted, to be recognized over a 

weighted average period of 1.70 years, was approximately $19,501.

(cid:26)(cid:19)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(13) EARNINGS PER SHARE

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

2019:

Net earnings attributable to Valmont Industries, Inc.
Weighted average shares outstanding (000's)
Per share amount

2018:

Net earnings attributable to Valmont Industries, Inc.
Weighted average shares outstanding (000's)
Per share amount

2017:

  Net earnings attributable to Valmont Industries, Inc.
  Weighted average shares outstanding (000's)
  Per share amount

Basic
EPS

$ 153,769
21,659
7.10

$

$ 94,351
22,306
4.23

$

$ 116,240
22,520
5.16

$

Dilutive
Effect of
Stock
Options

Diluted
EPS

$

$

$

$

$

$

— $ 153,769
21,769
7.06

110
0.04

$

— $ 94,351
22,446
4.20

140
0.03

$

— $ 116,240
22,738
5.11

218
0.05

$

Basic and diluted net earnings and earnings per share in fiscal 2018 was impacted by impairments of goodwill and 
intangible assets of $14,736 after-tax ($0.66 per share), restructuring expenses and non-recurring asset impairments arising 
from exiting certain local markets of $37,779 after-tax ($1.68 per share), refinancing of long-term debt expenses of $11,115 
after-tax ($0.50 per share), and a loss from the divestiture of the grinding media business of $5,350 after-tax ($0.24 per 
share).

Basic and diluted net earnings and earnings per share in fiscal 2017 were impacted by the 2017 Tax Act enacted on 

December 22, 2017 by the U.S. government. We remeasured our U.S. deferred income tax assets using a blended rate of 
25.0% recognizing deferred income tax expense of approximately $20,372 ($0.90 per share). We also recorded a provision 
charge of approximately $9,890 ($0.44 per share) of income tax expense for the deemed repatriation transition tax and 
$11,673 ($0.51 per share) of deferred expenses related to foreign withholding taxes and U.S. state income taxes.

Earnings per share are computed independently for each of the quarters.  Therefore, the sum of the quarterly 

earnings per share may not equal the total for the year.

At the end of fiscal years 2019, 2018, and 2017 there were 130,704, 406,806, and 0 outstanding stock options, 

respectively, with exercise prices exceeding the market price of common stock that were excluded from the computation of 
diluted earnings per share, respectively.

(cid:26)(cid:20)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(14) EMPLOYEE RETIREMENT SAVINGS PLAN

Established under Internal Revenue Code Section 401(k), the Valmont Employee Retirement Savings Plan 
(“VERSP”) is a defined contribution plan available to all eligible employees. Participants can elect to contribute up to 50% of 
annual pay, on a pretax and/or after-tax basis. The Company also makes contributions to the Plan and a non-qualified 
deferred compensation plan for certain Company executives. The 2019, 2018 and 2017 Company contributions to these plans 
amounted to approximately $12,600, $12,300 and $11,800 respectively.

The Company sponsors a fully funded, non-qualified deferred compensation plan for certain Company executives 

who otherwise would be limited in receiving company contributions into VERSP under Internal Revenue Service regulations. 
The invested assets and related liabilities of these participants were approximately $36,290 and $37,516 at December 28, 
2019 and December 29, 2018, respectively. Such amounts are included in “Other assets” and “Deferred compensation” on 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 $8,335 and $2,352 at 
December 28, 2019 and December 29, 2018, respectively. All distributions were made in cash.

(15) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents, receivables, accounts payable, notes payable to banks and 

accrued expenses approximate fair value because of the short maturity of these instruments. The fair values of each of the 
Company’s long-term debt instruments are based on the amount of future cash flows associated with each instrument 
discounted using the Company’s current borrowing rate for similar debt instruments of comparable maturity (Level 2). The 
fair value estimates are made at a specific point in time and the underlying assumptions are subject to change based on 
market conditions. At December 28, 2019, the carrying amount of the Company’s long-term debt was $765,704 with an 
estimated fair value of approximately $826,413.  At December 29, 2018, the carrying amount of the Company’s long-term 
debt was $742,601 with an estimated fair value of approximately $683,602.   

For financial reporting purposes, a three level hierarchy for fair value measurements based upon the transparency of 
inputs to the valuation of an asset or liability as of the measurement date is used. Inputs refers broadly to the assumptions that 
market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities 
carried at fair value will be classified and disclosed in one of the following three categories:

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

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

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

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value 
measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

Trading Securities:  The assets and liabilities recorded for the investments held in the Valmont Deferred 

Compensation Plan of $36,290 ($37,516 in 2018) represent mutual funds, invested in debt and equity securities, classified as 
trading securities, considering the employee’s ability to change investment allocation of their deferred compensation at any 
time. The Company's remaining ownership in Delta EMD Pty. Ltd. (JSE:DTA) of $210 ($2,508 in 2018) is recorded at fair 
value at December 28, 2019. Quoted market prices are available for these securities in an active market and therefore 
categorized as a Level 1 input.  These securities are included in Other Assets on the Consolidated Balance Sheets.

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

(cid:26)(cid:21)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(15) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Carrying Value
December 28,
2019

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)

Fair Value Measurement Using:
Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

Trading securities
Derivative financial instruments, net

$

$

36,500
3,247

$

36,500
—

— $

3,247

—
—

Carrying Value
December 29,
2018

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)

Fair Value Measurement Using:
Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

Trading securities
Derivative financial instruments, net

$
$

40,024
9,147

$
$

$

40,024
—

— $
$

9,147

—
—

(16) DERIVATIVE FINANCIAL INSTRUMENTS

The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency 

denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may 
manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market 
and recorded in the Company's consolidated statements of earnings, while others may be accounted for as fair value, cash 
flow, or net investment hedges. The Company had open foreign currency forward contracts that are marked to market at 
December 28, 2019, which are insignificant and thus excluded from the tables below. Derivative financial instruments have 
credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and 
degree of risk that can be taken, and by entering into transactions with counterparties who are recognized, stable 
multinational banks. 

Fair value of derivative instruments at December 28, 2019 and December 29, 2018 are as follows:

Derivatives designated as hedging
instruments:
Commodity forward contracts
Foreign currency forward contracts
Cross currency swap contracts

Balance sheet location

Prepaid expenses and other assets
Prepaid expenses and other assets
Prepaid expenses and other assets

December 28,
2019

December 29,
2018

$

$

— $

2,119
1,128
3,247

$

(285)
8,357
1,075
9,147

(cid:26)(cid:22)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(16) DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

Gains (losses) on derivatives recognized in the consolidated statements of earnings for the years ended 

December 28, 2019, December 29, 2018, and December 30, 2017 are as follows:

Derivatives designated as hedging
instruments:
Commodity forward contracts
Foreign currency forward contracts

Foreign currency forward contracts
Interest rate contracts
Cross currency swap contracts

Statements of earnings
location

Product cost of sales
Loss from divestiture of

grinding media business

Other income (expense)
Interest expense
Interest expense

2019

2018

2017

$

(2,130) $

1,021

$

—
950
(64)
2,823
1,579

$

(1,215)
782
(423)
828
993

$

$

—

—
—
(74)
—
(74)

Cash Flow Hedges

In 2019 and 2018, the Company entered into steel hot rolled coil (HRC) forward contracts which qualified as a cash 

flow hedge of the variability in the cash flows attributable to future steel purchases. In 2019, the forward contracts had a 
notional amount of $12,128 for the purchase of 3,500 short tons for each month from May 2019 to September 2019. In 2018, 
the forward contracts entered into had a notional amount of $8,469 for the purchase of 3,500 short tons for each month from 
July 2018 to September 2018 and a notional amount of $15,563 for the purchase of 6,500 short tons for each month from 
October 2018 to December 2018. The gain (loss) realized upon settlement is recorded in product cost of sales in the 
consolidated statements of earnings over average inventory turns.  

On June 19, 2018, the Company issued and sold $200,000 aggregate principal amount of the Company’s 5.00% 

senior notes due 2044 and $55,000 aggregate principal amount of the Company’s 5.25% senior notes due 2054. During the 
second quarter of 2018, the Company executed contracts to hedge the risk of potential fluctuations in the treasury rates on the 
2044 Notes and 2054 Notes which would change the amount of net proceeds received from the debt offering. These contracts 
had a combined notional amount of $175,000. On June 8, 2018, these contracts were settled with the Company paying $2,467 
to the counterparties which was recorded in OCI and will be amortized as an increase to interest expense over the term of the 
debt. Due to the retirement of the 2020 bonds in July 2018, the Company wrote off the remaining $411 unamortized loss on 
the related cash flow hedge.

Net Investment Hedges

In the second quarter of 2019, all net investment hedges incepted in 2018 were early settled and the Company 
received proceeds of $11,184, which will remain in OCI until either the sale or substantially complete liquidation of the 
related subsidiaries. 

In the second quarter of 2019, the Company entered into a foreign currency forward contract to mitigate foreign 

currency risk of the Company's investment in its Australian dollar denominated businesses. The forward contract qualifies as 
a net investment hedge and has a maturity date of April 2021 and a notional amount to sell Australian dollars to receive 
$100,000. The Australian dollar forward contract effectiveness was assessed under the spot method with forward points 
excluded totaling $881, which the Company has elected to amortize in other income (expense) in the consolidated statements 
of earnings using the straight-line method over the remaining term of the contract.

(cid:26)(cid:23)

 
 
 
 
 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(16) DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

In the second quarter of 2019, the Company entered into two fixed-for-fixed cross currency swaps ("CCS"), 

swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured notes due 2044 for Danish 
krone (DKK) and euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the 
Company's euro and DKK investments and to reduce interest expense.  Interest is exchanged twice per year on April 1 and 
October 1.  

Key terms of the two CCS are as follows:   

Currency

Notional
Amount

Termination Date

Swapped
Interest Rate

Net Settlement
Amount

Danish Krone (DKK) $

Euro

$

50,000

80,000

April 1, 2024

April 1, 2024

2.68%

2.825%

DKK 333,625

€71,550

The Company designated the full notional amount of the three CCS ($130,000) as a hedge of the net investment in 

certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are 
included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign 
currency translation within OCI, and will remain in OCI until either the sale or substantially complete liquidation of the 
related subsidiaries. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS.

(17) GUARANTEES

The Company’s product warranty accrual reflects management’s best estimate of probable liability under its product 
warranties. Historical product claims data is used to estimate the cost of product warranties at the time revenue is recognized.

Changes in the product warranty accrual, which is recorded in “Accrued expenses”, for the years ended 

December 28, 2019 and December 29, 2018, were as follows:

Balance, beginning of period
Payments made
Change in liability for warranties issued during the period
Change in liability for pre-existing warranties
Balance, end of period

(18) COMMITMENTS & CONTINGENCIES

2019

2018

17,008
(17,484)
16,080
(2,072)
13,532

$

$

20,109
(18,920)
13,566
2,253
17,008

$

$

Various claims and lawsuits are pending against Company and certain of its subsidiaries. The Company cannot fully 
determine the effect of all asserted and unasserted claims on its consolidated results of operations, financial condition, or 
liquidity. Where asserted and unasserted claims are considered probable and reasonably estimable, a liability has been recorded. 
We do not expect that any known lawsuits, claims, environmental costs, commitments, or contingent liabilities will have a 
material adverse effect on our consolidated results of operations, financial condition, or liquidity. 

(cid:26)(cid:24)

 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(19) DEFINED BENEFIT RETIREMENT PLAN 

Delta Ltd., a wholly-owned subsidiary of the Company, is the sponsor of the Delta Pension Plan ("Plan"). The Plan 

provides defined benefit retirement income to eligible employees in the United Kingdom. Pension retirement benefits to 
qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. This Plan has no active 
employees as members at December 28, 2019.

Funded Status

The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The 

funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the plan assets. 
The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary 
increases (if applicable) and inflation. Plan assets are measured at fair value. Because the pension plan is denominated in 
British pounds sterling, the Company used exchange rates of $1.269/£ and $1.308/£ to translate the net pension liability into 
U.S. dollars at December 29, 2018 and December 28, 2019, respectively. The net funded status of $140,007 at December 28, 
2019 is recorded as a noncurrent liability.  

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 underfunded 

ABO represents the difference between the PBO and the fair value of plan assets.  On October 26, 2018, the High Court of 
Justice in the United Kingdom ruled that pension plans which offered guaranteed minimum pension ("GMP") benefits 
between 1990 and 1997 must ensure the benefit accrued between men and women were equal.   The Company estimated the 
cost of GMP equalization at £9,500, which is being treated as a prior service cost at December 29, 2018.  

Changes in the PBO and fair value of plan assets for the pension plan for the period from December 30, 2017 to 

December 29, 2018 were as follows:

Fair Value at December 30, 2017
Employer contributions
Interest cost
Prior service costs - GMP equalization
Actual return on plan assets
Benefits paid
Actuarial (gain) loss
Currency translation
Fair Value at December 29, 2018

Projected
Benefit
Obligation
$ 783,301
—
17,878
12,056
—
(28,207)
(95,480)
(42,108)
$ 647,440

Plan
Assets
593,749
1,537
—
—
(32,120)
(28,207)
—
(31,423)
503,536

$

$

Funded
status
$ (189,552)

$ (143,904)

(cid:26)(cid:25)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(19) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Changes in the PBO and fair value of plan assets for the pension plan for the period from December 29, 2018 to 

December 28, 2019 were as follows:

Fair Value at December 29, 2018
Employer contributions
Interest cost
Actual return on plan assets
Benefits paid
Actuarial (gain) loss
Currency translation
Fair Value at December 28, 2019

Projected
Benefit
Obligation
$ 647,440
—
16,923
—
(20,769)
79,485
21,324
$ 744,403

Plan
Assets
503,536
18,461
—
86,081
(20,769)
—
17,087
604,396

$

$

Funded
status
$ (143,904)

$ (140,007)

Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 28, 2019 and 

December 29, 2018 consisted of actuarial gains (losses):

Balance December 30, 2017
     Actuarial gain
     Prior service costs - GMP equalization
     Currency translation gain (loss)
Balance December 29, 2018
     Actuarial gain (loss)
     Currency translation gain (loss)
Balance December 28, 2019

$ (168,250)
44,760
(12,056)
5,358
(130,188)
(10,839)
(2,699)
$ (143,726)

The estimated amount to be amortized from accumulated other comprehensive income into net periodic benefit cost 

in 2020 is approximately $3,008.

Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at December 28, 2019 
and December 29, 2018 were as follows:

Percentages
Discount rate
Salary increase
CPI inflation
RPI inflation

Expense

2019

2018

2.05%
N/A
2.15%
3.05%

2.90%
N/A
2.20%
3.30%

Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned 
during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate 
of return on plan assets is applied to the fair value of plan assets. Differences in actual experience in relation to assumptions 
are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense.

(cid:26)(cid:26)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(19) DEFINED BENEFIT RETIREMENT PLAN (Continued)

The components of the net periodic pension expense for the fiscal years ended December 28, 2019 and 

December 29, 2018 were as follows:

Net Periodic Benefit Cost:

Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of actuarial loss

Net periodic benefit expense (benefit)

2019

2018

$

$

$

16,923
(20,000)
513
2,051
(513) $

17,878
(23,175)
—
3,046
(2,251)

Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2019 

and 2018:

Percentages
Discount rate
Expected return on plan assets
CPI Inflation
RPI Inflation

2019

2018

2.90%
4.25%
2.20%
3.30%

2.55%
4.29%
2.20%
3.30%

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 our asset allocation mix and our historical return, taking 
into account current and expected market conditions. Inflation is based on expected changes in the consumer price index or 
the retail price index in the U.K. depending on the relevant plan provisions.

Cash Contributions

The Company completed negotiations with Plan trustees in 2019 regarding annual funding for the Plan. The annual 
contributions into the Plan are $17,132 (/£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.  

Benefit Payments

The following table details expected pension benefit payments for the years 2020 through 2029:

2020
2021
2022
2023
2024
Years 2024 - 2029

$

21,840
22,494
23,148
23,802
24,587
134,442

(cid:26)(cid:27)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(19) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Asset Allocation Strategy

The investment strategy for pension plan assets is to maintain a diversified portfolio consisting of 

•  Long-term fixed income securities that are investment grade or government backed in nature;

•  Common stock mutual funds in U.K. and non-U.K. companies, and;

•  Diversified growth funds, which are invested in a number of investments, including common stock, fixed 

income funds, properties and commodities. 

The Plan, as required by U.K. law, has an independent trustee that sets investment policy. The general strategy is to 

invest approximately 50% of the assets of the plan in common stock mutual funds and diversified growth funds, with the 
remainder of the investments in long-term fixed income securities, including corporate bonds and index-linked U.K. gilts. 
The trustees regularly consult with representatives of the plan sponsor and independent advisors on such matters.

The pension plan investments are held in a trust. The weighted average maturity of the corporate bond portfolio was 

13 years at December 28, 2019.

Fair Value Measurements

The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used 
for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation 
hierarchy.

Leveraged inflation-linked gilts (LDIs)—LDIs are a combination of U.K. government-backed securities (such as 

bonds or other fixed income securities issued directly by the U.K. Treasury) money market instruments, and derivatives 
combined to give leveraged exposure to changes in the U.K. long-term interest and inflation rates. These funds are expected 
to offset a proportion of the impact changes in the long-term interest and inflation rates in the U.K. have on the pension plan's 
benefit plan obligation liability. The fair value recorded by the Plan is calculated using net asset value (NAV) for each 
investment.

Temporary Cash Investments– These investments consist of British pound sterling, reported in terms of U.S. 

dollars based on currency exchange rates readily available in active markets. These temporary cash investments are classified 
as Level 1 investments.

Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations. 

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

Corporate Stock—This investment category consists of common and preferred stock, including mutual funds, 

issued by U.K. and non-U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment, 
except for one small holding that is actively traded (which is the level 1 investment).

Diversified growth funds - This investment category consists of diversified investment funds, whose holdings 
include common stock, fixed income funds, properties and commodities of U.K. and non-U.K. securities. The fair value 
recorded by the Plan is calculated using NAV for each investment.

(cid:26)(cid:28)

 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(19) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Secured income asset (SIA) funds - This investment category consists of holdings which will have a high level of 

expected inflation linkage.  Examples of underlying assets classes are rental streams and infrastructure debt.  Due to the 
private nature of these investments, pricing inputs are not readily observable.  Asset valuations are developed by the fund 
manager.  These valuations are based on the application of public market multiples to private company cash flows, market 
transactions that provide valuation information for comparable companies, and other methods.  The fair value recorded by the 
Plan is calculated using NAV.

At December 31, 2019 and December 31, 2018, the pension plan assets measured at fair value on a recurring basis 

were as follows:

December 31, 2019

Plan assets at fair value:

Temporary cash investments

Corporate stock

Total plan net assets at fair value

Plan assets at NAV:

Leveraged inflation-linked gilt funds

Corporate bonds
Corporate stock

Secured income asset funds

Total plan assets at NAV

  Total plan assets

December 31, 2018

Plan assets at fair value:

Temporary cash investments

Corporate stock
Total plan net assets at fair value
Plan assets at NAV:
Leveraged inflation-linked gilt funds
Corporate bonds
Corporate stock
Secured income asset funds
Total plan assets at NAV
  Total plan assets

Quoted Prices in
Active Markets
for Identical
Inputs (Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

$

$

38,388

—

38,388

$

$

— $

—

— $

— $

38,388

—

—

— $

38,388

123,637

97,638
234,612

110,121

566,008

$

604,396

Quoted Prices in
Active Markets
for Identical
Inputs (Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

$

$

61,040

506
61,546

$

$

— $

—
— $

— $

—
— $

61,040

506
61,546

122,711
80,454
183,750
55,075
441,990
503,536

$

(cid:27)(cid:19)

 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(20) LEASES

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

Outstanding leases at December 28, 2019 have remaining lease terms of one year to fifteen years, some of which include 
options to extend leases for up to five years. The Company does not have any financing leases. The Company elected 
practical expedients not to reassess whether existing contracts are or contain leases, to not reassess the lease classification of 
any existing leases, to not reassess initial direct costs for any existing leases, to use hindsight in determining the lease term 
and in assessing impairment of the right-of-use asset, and to not separate lease and non-lease components for all classes of 
underlying assets.

The Company determines if an arrangement is a lease at inception. Operating leases are included in other assets, 

accrued expenses, and lease liabilities in our 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 commencement date based on the present value of lease 
payments over the lease term.  The Company used its collateralized incremental borrowing rate in determining the present 
value of future lease payments. The operating lease ROU asset also includes any lease payments made and excludes any lease 
incentives and impairments. Some of the Company's facility leases include options to extend the lease when it is reasonably 
certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term.

Lease cost and other information related to the Company's operating leases are as follows:

Operating lease cost

Operating cash outflows from operating leases
ROU assets obtained in exchange for lease obligations

Weighted average remaining lease term

Weighted average discount rate

Fifty-Two
weeks ended
December 28,
2019

$

$
$

24,073

24,835
13,474

10 years

3.8%

Operating lease cost includes approximately $2,500 for short-term lease costs and approximately $2,000 for variable 

lease payments.

As part of the adoption of ASC 842, the Company evaluated at the historical and projected cash flow generation of 

the operations at each of its long-term leased facilities.  One of those facilities, a galvanizing operation in Melbourne, 
Australia, will not generate sufficient cash flows on an undiscounted cash flow basis to recover the carrying value of the right 
of use asset.  The Company then estimated a value for this operation using a discounted cash flow model.  The result was an 
impairment of the right-of-use lease asset of approximately $12,063. The after-tax balance of $8,444 was recorded as a 
reduction to retained earnings for the transition adjustment of adoption.  

(cid:27)(cid:20)

 
 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(20) LEASES (Continued)

Supplemental balance sheet information related to operating leases as of December 28, 2019 is as follows:

Operating lease assets

Operating lease short-term liabilities
Operating lease long-term liabilities
    Total lease liabilities

Classification

Other assets

Accrued expenses
Operating lease liabilities

December 28,
2019

$

$

86,998

15,226
85,817
101,043

Minimum lease payments under operating leases expiring subsequent to December 28, 2019 are as follows:

Fiscal year ending:

2020
2021
2022
2023
2024
Subsequent
Total minimum lease payments
  Less: Interest
Present value of minimum lease payments

$

$
$
$

18,744
15,504
12,706
9,731
8,453
58,015
123,153
22,110
101,043

The below table as of December 29, 2018 is carried forward, including certain amounts that were historically included in the 
table as a result of the historical lease term conclusions but were not included in the initial ROU asset and lease liability 
measurement as of December 30, 2018 due to the Company's election of the hindsight practical expedient. The Company also 
determined one of its leases with escalating rent payments should be expensed using the straight-line method over a longer 
term and the result was an additional reduction to retained earnings of $442 for a transition adjustment. Minimum lease 
payments for operating leases under ASC 840 expiring subsequent to December 29, 2018 are as follows:

Fiscal year ending:

2019
2020
2021
2022
2023
Subsequent
Total minimum lease payments

$

$

18,757
16,830
13,992
11,932
8,866
76,438
146,815

(cid:27)(cid:21)

 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(21) BUSINESS SEGMENTS

The Company has four reportable segments based on its management structure. Each segment is global in nature 

with a manager responsible for segment operational performance and the allocation of capital within the segment. Net 
corporate expense is net of certain service related expenses that are allocated to business units generally on the basis of 
employee headcounts and sales dollars.

Reportable segments are as follows:

ENGINEERED SUPPORT STRUCTURES:  This segment consists of the manufacture and distribution of 

engineered metal and composite poles, towers, and components for global lighting, traffic, and wireless 
communication markets, engineered access systems, integrated structure solutions for smart cities, and highway 
safety products;

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

concrete structures for global utility transmission, distribution, substations, and renewable energy generation 
equipment;

COATINGS:  This segment consists of galvanizing, painting, and anodizing services to preserve and protect 

metal products; and

IRRIGATION:  This segment consists of the manufacture of agricultural irrigation equipment, parts, 

services, tubular products, water management solutions, and technology for precision agriculture.

In addition to these four reportable segments, the Company had other businesses and activities that individually are 
not more than 10% of consolidated sales, operating income or assets. This includes the manufacture of forged steel grinding 
media for the mining industry and is reported in the "Other" category until its divestiture in 2018.

The accounting policies of the reportable segments are the same as those described in Note 1. The Company 
evaluates the performance of its business segments based upon operating income and invested capital. The Company does not 
allocate LIFO expense, interest expense, non-operating income and deductions, or income taxes to its business segments.

(cid:27)(cid:22)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(21) BUSINESS SEGMENTS (Continued)

Summary by Business

SALES:
Engineered Support Structures segment:

Lighting, Traffic, and Highway Safety Products

    Communication Products

Access Systems

Engineered Support Structures segment

Utility Support Structures segment:

Steel
Concrete
Engineered Solar Tracker Solutions
Offshore and Other Complex Steel Structures

Utility Support Structures segment

Coatings segment
Irrigation segment:
North America

    International

Irrigation segment

Other

Total

INTERSEGMENT SALES:

Engineered Support Structures
Utility Support Structures
Coatings
Irrigation
Total
NET SALES:
Engineered Support Structures segment
Utility Support Structures segment
Coatings segment
Irrigation segment
Other

Total

2019

2018

2017

$

$

708,853
188,912
114,525
1,012,290

630,892
122,032
47,450
90,206
890,580
367,835

378,613
206,583
585,196
—
2,855,901

10,214
4,972
67,195
6,544
88,925

706,582
149,817
130,481
986,880

637,979
111,875
16,760
92,559
859,173
353,351

386,683
246,983
633,666
23,080
2,856,150

19,522
3,967
66,612
8,905
99,006

$

633,178
171,718
133,206
938,102

658,604
99,738
—
100,773
859,115
318,891

369,832
282,598
652,430
76,300
2,844,838

25,862
2,871
62,080
8,058
98,871

1,002,076
885,608
300,640
578,652
—
$ 2,766,976

967,358
855,206
286,739
624,761
23,080
$ 2,757,144

912,240
856,244
256,811
644,372
76,300
$ 2,745,967

(cid:27)(cid:23)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(21) BUSINESS SEGMENTS (Continued)

OPERATING INCOME (LOSS):
Engineered Support Structures
Utility Support Structures
Coatings
Irrigation
Other
Adjustment to LIFO inventory valuation method
Corporate
Total

Interest expense, net
Costs associated with refinancing of debt
Loss from divestiture of grinding media business
Other
Earnings before income taxes and equity in earnings of nonconsolidated

subsidiaries

TOTAL ASSETS:

Engineered Support Structures
Utility Support Structures
Coatings
Irrigation
Other
Corporate
Total

CAPITAL EXPENDITURES:
Engineered Support Structures
Utility Support Structures
Coatings
Irrigation
Other
Corporate
Total

2019

2018

2017

$

$

65,627
87,788
51,008
71,687
—
9,815
(48,205)
237,720
(36,211)
—
—
8,164

$

34,776
64,766
55,325
97,722
(913)
(9,892)
(39,504)
202,280
(39,569)
(14,820)
(6,084)
1,634

62,960
97,853
50,179
101,498
2,134
(5,680)
(41,864)
267,080
(39,908)
—
—
1,292

$

209,673

$ 143,441

$ 228,464

$

943,841
742,194
363,070
347,887
—
366,419
$ 2,763,411

$ 867,735
700,915
294,951
347,894
—
318,779
$2,530,274

$ 846,881
597,231
288,890
369,798
68,934
430,516
$2,602,250

$

$

25,344
26,306
23,610
15,644
—
6,521
97,425

$

$

26,783
17,442
10,320
7,249
7
10,184
71,985

$

$

16,433
14,012
11,080
7,055
2,376
4,310
55,266

(cid:27)(cid:24)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(21) BUSINESS SEGMENTS (Continued)

DEPRECIATION AND AMORTIZATION:

Engineered Support Structures
Utility Support Structures
Coatings
Irrigation
Other
Corporate
Total

Summary by Geographical Area by Location of Valmont Facilities:

NET SALES:

United States
Australia
Denmark
Other

Total

LONG-LIVED ASSETS:

United States
Australia
Denmark
Other

Total

2019

2018

2017

$

$

26,280
23,779
15,907
10,943
—
5,355
82,264

$

$

27,274
23,618
15,956
11,335
775
3,869
82,827

$

$

27,637
25,079
15,115
11,173
2,486
3,467
84,957

2019

2018

2017

$ 1,872,840
255,271
90,206
548,659
$ 2,766,976

$ 1,771,390
325,553
92,559
567,642
$ 2,757,144

$ 1,702,826
356,959
100,773
585,409
$ 2,745,967

$

753,545
193,029
58,435
369,983
$ 1,374,992

$

624,143
168,438
64,497
332,556
$ 1,189,634

$

544,724
227,483
90,372
267,106
$ 1,129,685

No single customer accounted for more than 10% of net sales in 2019, 2018, or 2017. 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. 
Australia accounted for approximately 9% of the Company's net sales in 2019; no other foreign country accounted for more 
than 4% of the Company’s net sales.

Operating income by business segment are based on net sales less identifiable operating expenses and allocations 
and includes profits recorded on sales to other operating units of the company. Long-lived assets consist of property, plant 
and equipment, net of depreciation, goodwill, other intangible assets and other assets. Long-lived assets by geographical area 
are based on location of facilities.

(cid:27)(cid:25)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

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

Consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and the Non-Guarantor 

subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

          For the Year ended December 28, 2019 

Net sales
Cost of sales

Gross profit

Selling, general and administrative expenses

Operating income

Other income (expense):

Interest expense
Interest income

Other

Parent
$1,207,865
887,403

Guarantors
$ 563,935
420,287

320,462

236,574

143,648

38,732

83,888

104,916

Non-
Guarantors
$1,242,812
1,014,071

228,741

179,470

49,271

Total

Eliminations
$ (247,636) $ 2,766,976
2,074,480

(247,281)
(355)
—
(355)

(37,984)
1,676

7,805

(28,503)

(11,150)
37

44
(11,069)

(2,249)
13,459

315

11,525

11,230
(11,230)
—

—

692,496

454,776

237,720

(40,153)
3,942

8,164
(28,047)

Earnings before income taxes and equity in
earnings of nonconsolidated subsidiaries

Income tax expense (benefit):

Current

Deferred

Earnings before equity in earnings of

nonconsolidated subsidiaries

Equity in earnings of nonconsolidated

subsidiaries
Net earnings

Less: Earnings attributable to noncontrolling
interests
Net earnings attributable to Valmont Industries,
Inc

55,385

93,847

60,796

(355)

209,673

8,918

(3,120)

5,798

26,166

—

26,166

11,181

7,060

18,241

2

—

2

46,267

3,940

50,207

49,587

67,681

42,555

(357)

159,466

104,182
153,769

7,900
75,581

— (112,082)
(112,439)

42,555

—
159,466

—

—

(5,697)

—

(5,697)

$ 153,769

$

75,581

$

36,858

$ (112,439) $ 153,769

(cid:27)(cid:26)

 
 
 
 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Year ended December 29, 2018

Net sales
Cost of sales

Gross profit

Selling, general and administrative expenses

Operating income

Other income (expense):

Interest expense

Interest income

Other

Earnings before income taxes and equity in earnings

of nonconsolidated subsidiaries

Income tax expense (benefit):

Current

Deferred

Earnings before equity in earnings of nonconsolidated

subsidiaries

Equity in earnings of nonconsolidated subsidiaries

Net earnings

Less: Earnings attributable to noncontrolling interests

Parent
$1,192,134
906,646

Guarantors
$ 522,366
399,451

285,488
192,343

93,145

122,915
51,127

71,788

Non-
Guarantors
$1,303,323
1,055,215

248,108
212,530

35,578

(42,524)
791
(17,602)
(59,335)

(14,815)
82

59
(14,674)

(1,713)
18,610
(1,727)
15,170

Total

Eliminations
$ (260,679) $ 2,757,144
2,098,864

(262,448)
1,769
—

1,769

14,815
(14,815)
—
—

658,280
456,000

202,280

(44,237)
4,668
(19,270)
(58,839)

33,810

57,114

50,748

1,769

143,441

6,310

1,532

7,842

25,968

68,383
94,351

—

14,948

1,791

16,739

40,375

37,304
77,679

—

23,290
(4,982)
18,308

246

—

246

1,523
— (105,687)
(104,164)
—

32,440

32,440
(5,955)
26,485

$ (104,164) $

44,794
(1,659)
43,135

100,306

—
100,306
(5,955)
94,351

Net earnings attributable to Valmont Industries, Inc

$

94,351

$

77,679

$

(cid:27)(cid:27)

 
VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Year ended December 30, 2017 

Net sales
Cost of sales

Gross profit

Selling, general and administrative expenses

Operating income

Other income (expense):

Interest expense

Interest income

Other

Earnings before income taxes and equity in earnings

of nonconsolidated subsidiaries

Income tax expense (benefit):

Current

Deferred

Earnings before equity in earnings of nonconsolidated

subsidiaries

Equity in earnings of nonconsolidated subsidiaries

Net earnings

Less: Earnings attributable to noncontrolling interests

Total

Eliminations
$ (251,876) $2,745,967
2,064,199

Parent
$1,200,181
898,799

Guarantors
$ 485,448
375,383

301,382
192,182

109,200

110,065
47,955

62,110

Non-
Guarantors
$1,312,214
1,042,199

270,015
174,551

95,464

(43,642)
838

5,681
(37,123)

(13,866)
42

58
(13,766)

(1,003)
17,723
(4,447)
12,273

(252,182)
306
—

306

13,866
(13,866)
—
—

72,077

48,344

107,737

306

228,464

29,407

10,307

39,714

32,363

83,877
116,240

—

17,928

—

17,928

30,416

22,146
52,562

—

18,920

29,448

48,368

135

—

135

59,369

171
— (106,023)
(105,852)
—

—
122,319
(6,079)
$ (105,852) $ 116,240

59,369
(6,079)
53,290

681,768
414,688

267,080

(44,645)
4,737

1,292
(38,616)

66,390

39,755

106,145

122,319

Net earnings attributable to Valmont Industries, Inc

$ 116,240

$

52,562

$

(cid:27)(cid:28)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year ended December 28, 2019 

Net earnings
Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments:

Parent
$ 153,769

Guarantors
75,581
$

Non-
Guarantors
42,555
$

Eliminations
$ (112,439) $ 159,466

Total

        Unrealized translation gains (losses)

—

(1,564)

(942)

    Realized loss on divestiture of grinding media

business recorded in earnings
Gain (loss) on hedging activities

Actuarial gain (loss) in defined benefit pension plan

liability

Equity in other comprehensive income

Other comprehensive income (loss)

Comprehensive income (loss)
Comprehensive income attributable to noncontrolling

interests

Comprehensive income (loss) attributable to Valmont

Industries, Inc.

—
2,905

—
(13,142)
(10,237)
143,532

—
—

—

—
(1,564)
74,017

—
—

(10,828)
—
(11,770)
30,785

—

—
—

—

13,142

13,142
(99,297)

(2,506)

—
2,905

(10,828)
—
(10,429)
149,037

—

—

(5,505)

—

(5,505)

$ 143,532

$

74,017

$

25,280

$ (99,297) $ 143,532

(cid:28)(cid:19)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year ended December 29, 2018 

Net earnings

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:

        Unrealized translation gains (losses)

    Realized loss on divestiture of grinding media

business recorded in earnings
     Gain (loss) on hedging activities

Actuarial gain (loss) in defined benefit pension plan

liability

Equity in other comprehensive income

Other comprehensive income (loss)

Comprehensive income (loss)
Comprehensive income attributable to noncontrolling

interests

Comprehensive income (loss) attributable to Valmont

Industries, Inc.

Parent

$

94,351

Guarantors
77,679
$

Non-
Guarantors
32,440
$

Eliminations
$ (104,164) $ 100,306

Total

—

—

4,814

—
(28,977)
(24,163)
70,188

(6,509)

(58,927)

—

—

—

—
(6,509)
71,170

9,203

—

29,885

—
(19,839)
12,601

—

—

—

—

28,977

28,977
(75,187)

(65,436)

9,203

4,814

29,885

—
(21,534)
78,772

—

—

(8,584)

—

(8,584)

$

70,188

$

71,170

$

4,017

$ (75,187) $

70,188

(cid:28)(cid:20)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year ended December 30, 2017 

Net earnings

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:

        Unrealized translation gains (losses)
    Gain (loss) on hedging activities

Actuarial gain (loss) in defined benefit pension plan

liability

Equity in other comprehensive income

Other comprehensive income (loss)

Comprehensive income

Comprehensive income attributable to noncontrolling

interests

Comprehensive income attributable to Valmont

Industries, Inc.

Parent
$ 116,240

Guarantors
52,562
$

Non-
Guarantors
59,369
$

Eliminations
$ (105,852) $ 122,319

Total

—
(1,621)

138,795
—

—

68,958

67,337

183,577

—

—

138,795

191,357

(59,516)
—

(10,871)
—
(70,387)
(11,018)

—
—

79,279
(1,621)

—
(68,958)
(68,958)
(174,810)

(10,871)
—

66,787

189,106

—

—

(5,529)

—

(5,529)

$ 183,577

$ 191,357

$ (16,547) $ (174,810) $ 183,577

(cid:28)(cid:21)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
December 28, 2019

Parent

Guarantors

Non-
Guarantors

Eliminations

Total

ASSETS

Current assets:

Cash and cash equivalents

Receivables, net

Inventories

Contra asset - costs and profits in excess of billings

Prepaid expenses, restricted cash, and other assets

Refundable income taxes

Total current assets

Property, plant and equipment, at cost

Less accumulated depreciation and amortization

Net property, plant and equipment

Goodwill

Other intangible assets

Investment in subsidiaries and intercompany accounts

Other assets

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current installments of long-term debt

Notes payable to banks

Accounts payable

Accrued employee compensation and benefits

Accrued expenses

Dividends payable

Total current liabilities

Deferred income taxes

Long-term debt, excluding current installments

Defined benefit pension liability

Other noncurrent liabilities

Shareholders’ equity:

Common stock of $1 par value

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss)

Treasury stock

$

182,453

$

6,169

$

164,920

$

— $

353,542

134,972

130,686

65,528

13,820

6,947

534,406

635,322

413,054

222,268

20,108

763

94,090

45,673

47,402

717

—

194,051

175,862

90,384

85,478

141,581

43,933

1,339,206

1,150,458

88,549

4,323

250,938

200,963

28,392

17,506

—

662,719

434,077

183,694

250,383

267,175

131,046

908,212

119,385

—

(2,757)

—

—

—

480,000

374,565

141,322

32,043

6,947

(2,757)

1,388,419

—

—

—

—

—

(3,397,876)

1,245,261

687,132

558,129

428,864

175,742

—

—

212,257

$

2,205,300

$

1,619,824

$

2,338,920

$ (3,400,633) $

2,763,411

$

— $

—

— $

—

760

$

— $

760

39,161

205,070

21,774

107,816

31,890

42,830

—

31,030

30,373

140,007

63,895

—

—

—

—

—

—

—

(123,560)

—

—

68,677

45,294

147,498

8,079

269,548

16,925

734,571

—

72,772

27,900

—

2,140,948

(313,422)

(743,942)

21,464

6,344

11,353

—

—

123,560

—

3,168

457,950

162,906

753,652

79,427

—

648,957

(1,106,907)

1,107,536

(1,270,442)

400,933

(1,154,585)

2,140,948

(334,288)

254,861

—

—

(313,422)

(743,942)

21,774

197,957

83,528

201,681

8,079

513,779

47,955

764,944

140,007

139,835

27,900

—

Total Valmont Industries, Inc. shareholders’ equity

1,111,484

1,453,935

1,823,138

(3,277,073)

1,111,484

Noncontrolling interest in consolidated subsidiaries

—

—

45,407

—

45,407

Total shareholders’ equity

Total liabilities and shareholders’ equity

1,111,484

1,453,935

1,868,545

(3,277,073)

1,156,891

$

2,205,300

$

1,619,824

$

2,338,920

$ (3,400,633) $

2,763,411

(cid:28)(cid:22)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS
December 29, 2018 

Parent

Guarantors

Non-
Guarantors

Eliminations

Total

ASSETS

Current assets:

Cash and cash equivalents

Receivables, net

Inventories

Contra asset - costs and profits in excess of billings

Prepaid expenses, restricted cash, and other assets

Refundable income taxes

Total current assets

Property, plant and equipment, at cost

Less accumulated depreciation and amortization

Net property, plant and equipment

Goodwill

Other intangible assets

$

104,256

$

5,518

$

203,436

$

— $

313,210

134,943

138,158

50,271

21,858

4,576

454,062

579,046

390,438

188,608

20,108

76

75,204

37,019

35,200

746

—

153,687

172,050

93,374

78,676

110,562

27,452

273,816

210,791

27,054

20,196

—

735,293

409,769

163,061

246,708

254,537

148,428

—

(2,402)

—

—

—

483,963

383,566

112,525

42,800

4,576

(2,402)

1,340,640

—

—

—

—

—

1,160,865

646,873

513,992

385,207

175,956

—

Investment in subsidiaries and intercompany accounts

1,286,545

1,161,612

932,982

(3,381,139)

Other assets

Total assets

47,674

—

66,805

—

114,479

$

1,997,073

$

1,531,989

$

2,384,753

$ (3,383,541) $

2,530,274

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current installments of long-term debt

Notes payable to banks

Accounts payable

Accrued employee compensation and benefits

Accrued expenses

Dividends payable

Total current liabilities

Deferred income taxes

Long-term debt, excluding current installments

Defined benefit pension liability

Other noncurrent liabilities

Shareholders’ equity:

Common stock of $1 par value

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss)

Treasury stock

$

— $

—

— $

—

779

$

— $

779

38,399

226,748

10,678

128,730

30,687

55,874

—

29,113

7,858

143,904

10,798

—

—

—

—

—

—

—

(166,729)

—

—

68,304

41,418

25,936

8,230

143,888

14,376

733,964

—

45,083

27,900

—

2,027,596

(303,185)

(692,549)

21,081

7,186

10,132

—

—

166,729

—

620

457,950

162,906

624,394

80,991

—

648,682

(1,106,632)

1,107,536

(1,270,442)

467,699

(1,092,093)

2,027,596

(333,346)

252,355

—

—

(303,185)

(692,549)

10,678

218,115

79,291

91,942

8,230

409,035

43,489

741,822

143,904

56,501

27,900

—

Total Valmont Industries, Inc. shareholders’ equity

1,059,762

1,326,241

1,890,571

(3,216,812)

1,059,762

Noncontrolling interest in consolidated subsidiaries

—

—

75,761

—

75,761

Total shareholders’ equity

Total liabilities and shareholders’ equity

1,059,762

1,326,241

1,966,332

(3,216,812)

1,135,523

$

1,997,073

$

1,531,989

$

2,384,753

$ (3,383,541) $

2,530,274

(cid:28)(cid:23)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year ended December 28, 2019

Cash flows from operating activities:

Net earnings
Adjustments to reconcile net earnings to net cash flows from

operations:

Parent

Guarantors

Non-
Guarantors

Eliminations

Total

$

153,769

$

75,581

$

42,555

$

(112,439) $

159,466

Depreciation and amortization
Noncash loss on trading securities
Contribution to defined benefit pension plan

Stock-based compensation
Defined benefit pension plan (benefit)

(Gain) loss on sale of property, plant and equipment
Equity in earnings in nonconsolidated subsidiaries

Deferred income taxes
Changes in assets and liabilities (net of acquisitions):

Net working capital
Other noncurrent liabilities

Income taxes payable (refundable)
Net cash flows from operating activities

Cash flows from investing activities:

Purchase of property, plant and equipment

Proceeds from sale of assets

Acquisitions, net of cash acquired

Proceeds from settlement of net investment hedge
Investments in nonconsolidated subsidiaries

Other, net

Net cash flows from investing activities

Cash flows from financing activities:

Borrowings under short-term agreements

Proceeds from long-term borrowings
Principal payments on long-term borrowings

Dividends paid

Dividends to noncontrolling interest

Intercompany dividends

Purchase of noncontrolling interest

Intercompany capital contribution

Intercompany interest on long-term note

Proceeds from exercises under stock plans

Purchase of treasury shares

Purchase of common treasury shares - stock plan exercises

Net cash flows from financing activities

          Effect of exchange rate changes on cash and cash equivalents

          Net change in cash and cash equivalents

          Cash, cash equivalents, and restricted cash—beginning of year

26,734
—
—

11,587
—

133
(104,182)

(3,120)

103,019
(505)

1,714
189,149

(59,394)

87

—

11,184
(3,500)

(14,964)
(66,587)

—

31,000
(10,000)

(32,642)

—

65,651

(22,805)

(13,284)

13,518
—
—

—
—

240
(7,900)

—

(36,781)
(5)

(2,012)
42,641

(1,592)

48

(63,141)

—
—

14,210
(50,475)

—

—
—

—

—

53,676

—

—

—

(45,155)

13,619

(62,915)

(12,989)

(44,365)

—

78,197

104,256

—

—

—

8,521

(36)

651

5,518

6,169

42,012
(172)
(18,461)

—
(513)

(2,886)
—

7,060

13,641
(764)

(6,646)
75,826

(36,439)

5,421

(18,700)

—
(2,669)

1,297
(51,090)

11,327

—
(768)

—

(7,737)

(119,327)

(5,040)

13,284

45,155

—

—

—

(63,106)

(146)

(38,516)

203,436

—
—
—

—
—

—
112,082

—

355
—

—
(2)

—

—

—

—
—

2
2

—

—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

$

164,920

$

— $

82,264
(172)
(18,461)

11,587
(513)

(2,513)
—

3,940

80,234
(1,274)

(6,944)
307,614

(97,425)

5,556

(81,841)

11,184
(6,169)

545
(168,150)

11,327

31,000
(10,768)

(32,642)

(7,737)

—

(27,845)

—

—

13,619

(62,915)

(12,989)

(98,950)

(182)

40,332

313,210

353,542

          Cash, cash equivalents, and restricted cash—end of period

$

182,453

$

(cid:28)(cid:24)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
For the Year ended December 29, 2018 

Cash flows from operating activities:

Net earnings
Adjustments to reconcile net earnings to net cash flows from

operations:

Parent

Guarantors

Non-
Guarantors

Eliminations

Total

$

94,351

$

77,679

$

32,440

$

(104,164) $

100,306

Depreciation and amortization
Noncash loss on trading securities
Contribution to defined benefit pension plan
  Impairment of property, plant and equipment

  Impairment of goodwill & intangible assets
Loss on divestiture of grinding media business

  Stock-based compensation
Defined benefit pension plan expense (benefit)

(Gain) loss on sale of property, plant and equipment
Equity in earnings in nonconsolidated subsidiaries

Deferred income taxes
Changes in assets and liabilities (net of acquisitions):

Net working capital
Other noncurrent liabilities

Income taxes payable (refundable)
Net cash flows from operating activities

Cash flows from investing activities:

Purchase of property, plant and equipment

Proceeds from sale of assets
Acquisitions, net of cash acquired

Proceeds from settlement of net investment hedge
Other, net

Net cash flows from investing activities

Cash flows from financing activities:

Payments under short-term agreements
Proceeds from long-term borrowings

Principal payments on long-term borrowings

Settlement of financial derivative

Debt issuance costs

Dividends paid

Dividends to noncontrolling interest

Intercompany dividends

Intercompany capital contribution

Purchase of noncontrolling interest

Proceeds from exercises under stock plans

Purchase of treasury shares

Purchase of common treasury shares - stock plan exercises

Net cash flows from financing activities

          Effect of exchange rate changes on cash and cash equivalents

          Net change in cash and cash equivalents

          Cash, cash equivalents, and restricted cash—beginning of year

26,155
—
—
—

—
2,518

10,392
—

57
(68,383)

1,532

(17,681)
(7,345)

(6,176)
35,420

(25,255)

44
(57,805)

(1,621)
69,714

(14,923)

—
245,936

(261,219)

(2,467)

(2,322)

(33,726)

—

168,757

(3,492)

—

7,357

(114,805)

(3,589)

430

—

20,927

83,329

          Cash, cash equivalents, and restricted cash—end of period

$

104,256

$

(cid:28)(cid:25)

13,959
—
—
—

—
—

—
—

(37)
(37,304)

1,791

(13,962)
615

(1,303)
41,438

(13,115)

268
—

—
(42,667)

(55,514)

—
—

—

—

—

—

—

11,296

3,492

—

—

—

—

14,788

(498)

214

5,304

5,518

42,713
(62)
(1,537)
5,000

15,780
3,566

—
(2,251)

(245)
—

(4,982)

(13,208)
(4,158)

3,340
76,396

(33,615)

62,791
(85,215)

—
(29,215)

(85,254)

10,543
5,719

(972)

—

—

—

(7,055)

(180,053)

—

(5,510)

—

—

—

(177,328)

(14,550)

(200,736)

404,172

—
—
—
—

—
—

—
—

—
105,687

—

(1,769)
—

—
(246)

—

—
—

—
246

246

—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

$

203,436

$

— $

82,827
(62)
(1,537)
5,000

15,780
6,084

10,392
(2,251)

(225)
—

(1,659)

(46,620)
(10,888)

(4,139)
153,008

(71,985)

63,103
(143,020)

(1,621)
(1,922)

(155,445)

10,543
251,655

(262,191)

(2,467)

(2,322)

(33,726)

(7,055)

—

—

(5,510)

7,357

(114,805)

(3,589)

(162,110)

(15,048)

(179,595)

492,805

313,210

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(22) GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year ended December 30, 2017 

Cash flows from operating activities:

Net earnings
Adjustments to reconcile net earnings to net cash flows from

operations:

Depreciation and amortization
Noncash loss on trading securities
  Stock-based compensation
Defined benefit pension plan expense (benefit)
Contribution to defined benefit pension plan

(Gain) loss on sale of property, plant and equipment
Equity in earnings in nonconsolidated subsidiaries

Deferred income taxes
Changes in assets and liabilities (net of acquisitions):

Net working capital
Other noncurrent liabilities

Income taxes payable (refundable)

Net cash flows from operating activities

Cash flows from investing activities:

Purchase of property, plant and equipment

Proceeds from sale of assets
Acquisitions, net of cash acquired

Proceeds from settlement of net investment hedge
Other, net

Net cash flows from investing activities

Cash flows from financing activities:

Payments under short-term agreements
Principal payments on long-term borrowings

Dividends paid
Dividends to noncontrolling interest

Intercompany dividends

Intercompany capital contribution

Proceeds from exercises under stock plans

Purchase of common treasury shares - stock plan exercises

Net cash flows from financing activities

          Effect of exchange rate changes on cash and cash equivalents

          Net change in cash and cash equivalents

          Cash, cash equivalents, and restricted cash—beginning of year

Parent

Guarantors

Non-
Guarantors

Eliminations

Total

$

116,240

$

52,562

$

59,369

$

(105,852) $

122,319

26,237
—
10,706
—
—

(664)
(83,877)

10,307

(23,943)
(140)

(11,837)

43,029

15,003
—
—
—
—

8
(22,146)

—

(25,717)
—

728

20,438

43,717
237
—
648
(40,245)

(3,268)
—

29,448

(25,219)
(7,088)

12,217

69,816

(20,460)

(9,454)

(25,352)

748
—

5,123
684

(13,905)

—
—

(33,862)
—

22,662

(10,818)

35,159

(26,161)

(13,020)

—

16,104

67,225

3
—

—
(22,777)

(32,228)

—
—

—
—

—

10,818

—

—

10,818

205

(767)

6,071

5,304

7,434
(5,362)

—
19,663

(3,617)

(585)
(887)

—
(5,674)

(22,662)

—

—

—

(29,808)

27,477

63,868

340,304

—
—
—
—
—

—
106,023

—

(306)
—

—

(135)

—

—
—

—
135

135

—
—

—
—

—

—

—

—

—

—

—

—

$

404,172

$

— $

84,957
237
10,706
648
(40,245)

(3,924)
—

39,755

(75,185)
(7,228)

1,108

133,148

(55,266)

8,185
(5,362)

5,123
(2,295)

(49,615)

(585)
(887)

(33,862)
(5,674)

—

—

35,159

(26,161)

(32,010)

27,682

79,205

413,600

492,805

          Cash, cash equivalents, and restricted cash—end of period

$

83,329

$

(cid:28)(cid:26)

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Three-year period ended December 28, 2019 
(Dollars in thousands, except per share amounts)

(23) QUARTERLY FINANCIAL DATA (Unaudited)

Net Sales

Gross

Profit

Per Share

Stock Price

Dividends

Amount

Basic

Diluted

High

Low

Declared

Net Earnings

$

692,139
700,871
690,340
683,626
$ 2,766,976

$ 165,129
180,414
176,086
170,867
$ 692,496

$

36,481
41,397
40,144
35,747
$ 153,769

$

698,684
682,405
678,692
697,363
$ 2,757,144

$ 169,240
174,999
164,340
149,701
$ 658,280

$

$

39,281
32,960
4,448
17,662
94,351

$

$

$

$

1.67
1.90
1.86
1.67
7.10

1.74
1.47
0.20
0.80
4.23

$

$

$

$

1.66
1.90
1.85
1.66
7.06

1.72
1.46
0.20
0.80
4.20

$ 139.50
136.75
146.46
151.46
$ 151.46

$ 171.55
154.60
157.15
141.38
$ 171.55

$ 107.43
112.94
123.74
123.80
$ 107.43

$ 140.10
137.90
135.00
103.01
$ 103.01

$

$

$

$

0.375
0.375
0.375
0.375
1.50

0.375
0.375
0.375
0.375
1.50

2019

First
Second
Third
Fourth

Year
2018

First
Second
Third (1)
Fourth (2)

Year

Earnings per share are computed independently for each of the quarters. Therefore, the sum of the quarterly earnings 

per share may not equal the total for the year.

_______________________________

(1) 

(2) 

The third quarter of 2018 included an impairment of goodwill and intangible assets totaling $14,736 after tax 
($0.66 per share) and refinancing of long-term debt expenses of $11,115 after-tax ($0.50 per share).

In the fourth quarter of 2018, the Company recognized restructuring activities expenses and non-recurring asset 
impairment charges from exiting certain markets of $20,625 after-tax ($0.92 per share).  

(cid:28)(cid:27)

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 
DISCLOSURE.

None.

ITEM 9A.  CONTROLS AND PROCEDURES.

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

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining adequate internal control over financial 

reporting as such term is defined in Securities Exchange Act Rule 13a-15(f). The Company carried out an evaluation under 
the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer 
and Chief Financial Officer, of the effectiveness of the Company’s internal control over financial reporting. The Company’s 
management used the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations (COSO) to perform this evaluation.  Based on that evaluation, the Company’s management concluded that the 
Company’s internal control over financial reporting was effective as of December 28, 2019. 

The effectiveness of the Company’s internal control over financial reporting as of December 28, 2019 has been 
audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, a copy of 
which is included in this Annual Report on Form 10-K.

(cid:28)(cid:28)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

To the Shareholders and the Board of Directors of Valmont Industries, Inc. 

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Valmont Industries, Inc. and subsidiaries (the “Company”) as 
of December 28, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the 
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in 
all material respects, effective internal control over financial reporting as of December 28, 2019, based on criteria established 
in Internal Control - Integrated Framework (2013) issued by COSO. 

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the consolidated financial statements as of and for the year ended December 28, 2019, of the Company and our 
report dated February 26, 2020, expressed an unqualified opinion on those financial statements and included an explanatory 
paragraph regarding the Company’s adoption of FASB Accounting Standards Update 2016-02, Leases, effective December 
30, 2018.

Basis for Opinion 

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s 
Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the Company’s internal 
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in 
all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the 
risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on 
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our 
audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures 
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to 
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and 
expenditures of the company are being made only in accordance with authorizations of management and directors of the 
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or 
disposition of the company’s assets that could have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

/s/ Deloitte & Touche LLP
Omaha, Nebraska
February 26, 2020 

(cid:20)(cid:19)(cid:19)

ITEM 9B.  OTHER INFORMATION.

Shareholder Return Performance Graphs   

The graphs below compare the yearly change in the cumulative total shareholder return on the Company’s common 
stock with the cumulative total returns of the S&P Mid Cap 400 Index and the S&P Mid Cap 400 Industrial Machinery Index 
for the five and ten-year periods ended December 28, 2019. The Company was added to these indexes in 2009 by Standard & 
Poor’s. The graphs assume that the beginning value of the investment in Valmont Common Stock and each index was $100 
and that all dividends were reinvested.

(cid:20)(cid:19)(cid:20)

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Except for the information relating to the executive officers of the Company set forth in Part I of this 10-K Report, 

the information called for by items 10, 11, and 13 is incorporated by reference to the sections entitled “Certain Shareholders”, 
“Corporate Governance”, “Board of Directors and Election of Directors”, "Board Committees", “Compensation Discussion 
and Analysis”, "Compensation Risk Assessment", “Human Resources Committee Report”, "Pay Ratio Information", 
“Summary Compensation Table”, “Grants of Plan-Based Awards for Fiscal Year 2019”, “Outstanding Equity Awards at Fiscal 
Year-End”, “Options Exercised in Fiscal 2019”, “Nonqualified Deferred Compensation”, “Director Compensation”, and 
“Potential Payments Upon Termination or Change-in-Control” in the Proxy Statement.

The Company has adopted a Code of Ethics for Senior Officers that applies to the Company’s Chief Executive 
Officer, Chief Financial Officer and Controller and has posted the code on its website at www.valmont.com through the 
“Investors Relations” link. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating 
to amendments to or waivers from any provision of the Code of Ethics for Senior Officers applicable to the Company’s Chief 
Executive Officer, Chief Financial Officer or Controller by posting that information on the Company’s Web site 
at www.valmont.com through the “Investors Relations” link.

ITEM 11.  EXECUTIVE COMPENSATION.

See Item 10.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND 

RELATED STOCKHOLDER MATTERS.

Incorporated herein by reference to “Certain Shareholders” and “Equity Compensation Plan Information” in the 

Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

See Item 10.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information called for by Item 14 is incorporated by reference to the sections titled “Ratification of 

Appointment of Independent Auditors” in the Proxy Statement.

(cid:20)(cid:19)(cid:21)

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)(1)(2)  Financial Statements and Schedules.

PART IV

The following consolidated financial statements of the Company and its subsidiaries are included herein as listed 

below:

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm
Consolidated Statements of Earnings—Three-Year Period Ended December 28, 2019
Consolidated Statements of Comprehensive Income—Three-Year Period Ended December 28, 2019
Consolidated Balance Sheets—December 28, 2019 and December 29, 2018
Consolidated Statements of Cash Flows—Three-Year Period Ended December 28, 2019
Consolidated Statements of Shareholders’ Equity—Three-Year Period Ended December 28, 2019
Notes to Consolidated Financial Statements—Three-Year Period Ended December 28, 2019

42
44
45
46
47
48
49

The following financial statement schedule of the Company is included herein:

SCHEDULE II—Valuation and Qualifying Accounts

All other schedules have been omitted as the required information is inapplicable or the information is included in 

the consolidated financial statements or related notes. Separate financial statements of the registrant have been omitted 
because the registrant meets the requirements which permit omission.

(3) 

Index to Exhibits
See exhibits listed under Part B below.

(cid:20)(cid:19)(cid:22)

 
 
Schedule II

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
(Dollars in thousands)

Balance at
beginning
of
period

Charged
to
profit and
loss

Currency
Translation
Adjustment

Deductions
from
reserves*

Balance at
close of
period

Fifty-two weeks ended December 28, 2019

Reserve deducted in balance sheet from the asset

to which it applies—

Allowance for doubtful receivables
Allowance for deferred income tax asset valuation
Fifty-two weeks ended December 29, 2018

Reserve deducted in balance sheet from the asset

to which it applies—

Allowance for doubtful receivables
Allowance for deferred income tax asset valuation
Fifty-two weeks ended December 30, 2017

Reserve deducted in balance sheet from the asset

to which it applies—

Allowance for doubtful receivables
Allowance for deferred income tax asset valuation

$

$

$

8,277
33,228

2,543
4,141

(76)
(296)

(1,196) $
(1,858)

9,548
35,215

9,813
27,864

994
10,769

(365)
(384)

(2,165) $
(5,021)

8,277
33,228

18,991
81,923

2,060
7,728

510
5,762

(11,748) $
(67,549)

9,813
27,864

______________________________________________

* 

The deductions from reserves are net of recoveries.

(cid:20)(cid:19)(cid:23)

(b) 

Exhibits

Exhibit 3.1 — The Company’s Restated Certificate of Incorporation, as amended. This document

was filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q
(Commission file number 001-31429) for the quarter ended March 28, 2009 and is
incorporated herein by this reference.

Exhibit 3.2 — The Company's By-Laws, as amended. This document was filed as Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2014 and
is incorporated herein (Commission file number 001-31429) by reference.

Exhibit 4.1 — Credit Agreement, dated as of August 15, 2012, among the Company, Valmont

Industries Holland B.V. and Valmont Group Pty. Ltd., as Borrowers, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the other lenders party thereto.  This
document was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K
(Commission file number 001-31429) dated August 15, 2012 and is incorporated
herein by reference.

Exhibit 4.2 — First Amendment dated as of October 17, 2014 to Credit Agreement, dated as of

August 15, 2012, among the Company, Valmont Industries Holland B.V. and Valmont
Group Pty. Ltd., as Borrowers, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other lenders party thereto.  This document was filed as exhibit 10.1 to
the Company's Current Report on Form 8-K (Commission file number 001-31429)
dated October 17, 2014 and is incorporated herein by this reference.

Exhibit 4.3 — Second Amendment dated as of February 23, 2016 to Credit Agreement, dated as of 

August 15, 2012, among the Company, Valmont Industries Holland B.V. and Valmont 
Group Pty. Ltd., as Borrowers, JPMorgan Chase Bank, N.A., as Administrative 
Agent, and the other lenders party thereto.  This document was filed as Exhibit 10.1 
to the Company’s Current Report on Form 8-K (Commission file number 001-31429) 
dated February 23, 2016 and is incorporated herein by reference.

Exhibit 4.4 — First Amended and Restated Credit Agreement, dated as of October 18, 2017, among 

the Company, Valmont Industries Holland B.V. and Valmont Group Pty. Ltd., as 
Borrowers, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other 
lenders party thereto.  This document was filed as Exhibit 10.1 to the Company’s 
Current Report on Form 8-K (Commission file number 001-31429) dated October 18, 
2017 and is incorporated herein by reference.

Exhibit 4.5 — Indenture relating to senior debt, dated as of April 12, 2010, among Valmont

Industries, Inc., the Subsidiary Guarantors party thereto and Wells Fargo Bank,
National Association., as Trustee. This document was filed as Exhibit 4.1 to the
Company’s Current Report on Form 8-K (Commission file number 001-31429) dated
April 12, 2010 and is incorporated herein by this reference.

Exhibit 4.6 — First Supplemental Indenture, dated as of April 12, 2010, to indenture relating to

senior debt, dated as of April 12, 2010, among Valmont Industries, Inc., the
Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as
Trustee. This document was filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K (Commission file number 001-31429) dated April 12, 2010 and is
incorporated herein by this reference.

Exhibit 4.7 — Second Supplemental Indenture, dated as of September 22, 2014, to Indenture

relating to senior debt, dated as of April 12, 2010, among Valmont Industries, Inc., the
Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as
Trustee.  This document was filed as Exhibit 4.2 to the Company's Current Report on
Form 8-K (Commission file number 001-31429) dated September 22, 2014 and is
incorporated herein by this reference.

(cid:20)(cid:19)(cid:24)

Exhibit 4.8 — Third Supplemental Indenture, dated as of September 22, 2014, to Indenture relating

to senior debt, dated as of April 12, 2010, among Valmont Industries, Inc., the
Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as
Trustee.  This document was filed as Exhibit 4.3 to the Company's Current Report on
Form 8-K (Commission file number 001-31429) dated September 22, 2014 and is
incorporated herein by this reference.

Exhibit 4.9* — Description of Registrant's Securities Registered Pursuant to Section 12 of the

Securities Exchange Act of 1934.

Exhibit 10.1 — The Company’s 2008 Stock Plan.  This document was filed as Exhibit 10.5 to the

Company's Annual Report on Form 10-K (Commission file number 001-31429) for
the fiscal year ended December 28, 2013 and is incorporated herein by this reference.

Exhibit 10.2 — The Company's 2013 Stock Plan. This document was filed as Exhibit 10.1 to the

Company’s Current Report on Form 8-K (Commission file number 001-31429) dated
April 30, 2013 and is incorporated herein by reference.

Exhibit 10.3

2013 Stock Plan Amendment, dated December 17, 2015.  This document was filed as
Exhibit 10.7 to the Company’s Annual Report on Form 10-K (Commission file
number 001-31429) for the year ended December 26, 2015 and is incorporated herein
by this reference.

Exhibit 10.4 — The Company's 2018 Stock Plan.  This document was filed as Exhibit 10.1 to the

Company's Current Report on Form 8-K (Commission file number 001-31429) dated
March 12, 2018 and is incorporated herein by reference.

Exhibit 10.5 — Form of Stock Option Agreement.  This document was filed as Exhibit 10.2 to the

Company’s Quarterly Report on Form 10-Q (Commission file number 001-31429) for
the quarter ended March 31, 2018 and is incorporated herein by this reference.

Exhibit 10.6 — Form of Restricted Stock Unit Agreement (Domestic). This document was filed as
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (Commission file
number 001-31429) for the quarter ended March 31, 2018 and is incorporated herein
by reference.

Exhibit 10.7 — Form of Restricted Stock Unit Agreement (Director). This document was filed as
Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (Commission file
number 001-31429) for the quarter ended March 31, 2018 and is incorporated herein
by reference.

Exhibit 10.8 — Form of Restricted Stock Unit Agreement (International).  This document was filed as

Exhibit 10.12 to the Company’s Annual Report on Form 10-K (Commission file
number 001-31429) for the year ended December 26, 2015 and is incorporated herein
by this reference.

Exhibit 10.9 — Form of Restricted Stock Agreement.  This document was filed as Exhibit 10.4 to the
Company’s Current Report on Form 8-K (Commission file number 001-31429) dated
April 30, 2013 and is incorporated herein by this reference.

Exhibit 10.10 — The 2013 Valmont Executive Incentive Plan. This document was filed as Exhibit 10.2
to the Company’s Current Report on Form 8-K (Commission file number 001-31429)
dated April 30, 2013 and is incorporated herein by reference.

(cid:20)(cid:19)(cid:25)

Exhibit 10.11 — The Amended Unfunded Deferred Compensation Plan for Nonemployee Directors.
This document was filed as Exhibit 10.15 to the Company's Annual Report on Form
10-K (Commission file number 001-31429) for the fiscal year ended December 28,
2013 and is incorporated herein by this reference.

Exhibit 10.12 — VERSP Deferred Compensation Plan.  This document was filed as Exhibit 10.16 to
the Company's Annual Report on Form 10-K (Commission file number 001-31429)
for the fiscal year ended December 28, 2013 and is incorporated herein by this
reference.

Exhibit 21* — Subsidiaries of the Company.

Exhibit 23* — Consent of Deloitte & Touche LLP.

Exhibit 24* — Power of Attorney.

Exhibit 31.1* — Section 302 Certification of Chief Executive Officer.

Exhibit 31.2* — Section 302 Certification of Chief Financial Officer.

Exhibit 32.1* — Section 906 Certifications.

Exhibit 101 — The following financial information from the Company’s Annual Report on Form 10-

K for the year ended December 28, 2019, formatted in XBRL (eXtensible Business
Reporting Language): (i) the Consolidated Statements of Earnings, (ii) the
Consolidated Statements of Comprehensive Income,(iii) the Consolidated Balance
Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated
Statements of Shareholders’ Equity, (vi) Notes to Consolidated Financial Statements,
and (vii) document and entity information.

Exhibit 104

Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

_____________________________________________

* 

Filed herewith

Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect to the registrant’s long-term debt are 
not filed with this Form 10-K. Valmont will furnish a copy of such long-term debt agreements to the Securities and Exchange 
Commission upon request.

Management contracts and compensatory plans are set forth as exhibits 10.1 through 10.12.

ITEM 16.  FORM 10-K SUMMARY

Not Applicable.

(cid:20)(cid:19)(cid:26)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 26th day of February, 2020.

SIGNATURES

Valmont Industries, Inc.

By:

/s/ STEPHEN G. KANIEWSKI
Stephen G. Kaniewski
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the 

following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.

Signature

Title

Director, President and Chief Executive Officer
(Principal Executive Officer)

Date

2/26/2020

/s/ STEPHEN G. KANIEWSKI
Stephen G. Kaniewski

/s/ MARK C. JAKSICH
Mark C. Jaksich

/s/  TIMOTHY P. FRANCIS
Timothy P. Francis

Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

2/26/2020

Senior Vice President and Controller (Principal
Accounting Officer)

2/26/2020

                Mogens C. Bay*
                K.R. den Daas*
                Theo W. Freye*
                Richard A. Lanoha*
                James B. Milliken*

Donna M. Milrod*
Daniel P. Neary*
Catherine J. Paglia*
Clark T. Randt*
Walter Scott, Jr.*

______________________________________________

* 

Stephen G. Kaniewski, by signing his name hereto, signs the Annual Report on behalf of each of the directors 
indicated on this 26th day of February, 2020. A Power of Attorney authorizing Stephen G. Kaniewski to sign the 
Annual Report on Form 10-K on behalf of each of the indicated directors of Valmont Industries, Inc. has been filed 
herein as Exhibit 24.

By:

/s/ STEPHEN G. KANIEWSKI
Stephen G. Kaniewski
Attorney-in-Fact

(cid:20)(cid:19)(cid:27)

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Stephen G. Kaniewski, certify that:

1. 

2. 

3. 

4. 

I have reviewed this annual report on Form 10-K for the year ended December 28, 2019 of Valmont Industries, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly 
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and 
for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and 
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting 
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) 

b) 

c) 

d) 

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 
designed under our supervision, to ensure that material information relating to the registrant, including its 
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 
in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial 
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 
covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 
during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual 
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 
over financial reporting; and

5. 

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control 
over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or 
persons performing the equivalent functions):

a) 

b) 

All significant deficiencies and material weaknesses in the design or operation of internal control over 
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 
summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role 
in the registrant’s internal control over financial reporting.

/s/ STEPHEN G. KANIEWSKI
Stephen G. Kaniewski
President and Chief Executive Officer

Date: February 26, 2020 

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Mark C. Jaksich, certify that:

1. 

2. 

3. 

4. 

I have reviewed this annual report on Form 10-K for the year ended December 28, 2019 of Valmont Industries, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly 
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and 
for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and 
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting 
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) 

b) 

c) 

d) 

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 
designed under our supervision, to ensure that material information relating to the registrant, including its 
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 
in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial 
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 
covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 
during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual 
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 
over financial reporting; and

5. 

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control 
over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or 
persons performing the equivalent functions):

a) 

b) 

All significant deficiencies and material weaknesses in the design or operation of internal control over 
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 
summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role 
in the registrant’s internal control over financial reporting.

/s/ MARK C. JAKSICH
Mark C. Jaksich
Executive Vice President and Chief Financial Officer

Date: February 26, 2020 

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes Oxley Act of 2002

The undersigned, Stephen G. Kaniewski, Chairman and Chief Executive Officer of Valmont Industries, Inc. (the 

“Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of the 
Company’s Annual Report on Form 10-K for the year ended December 28, 2019 (the “Report”).

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the 

Sarbanes Oxley Act of 2002, to his knowledge that:

1. 

2. 

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 
1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and 
results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 26th day of February, 2020.

/s/ STEPHEN G. KANIEWSKI
Stephen G. Kaniewski
President and Chief Executive Officer

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes Oxley Act of 2002

The undersigned, Mark C. Jaksich, Executive Vice President and Chief Financial Officer of Valmont Industries, Inc. 

(the “Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of 
the Company’s Annual Report on Form 10-K for the year ended December 28, 2019 (the “Report”).

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the 

Sarbanes Oxley Act of 2002, to his knowledge that:

3. 

4. 

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 
1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and 
results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 26th day of February, 2020.

/s/ MARK C. JAKSICH
Mark C. Jaksich
Executive Vice President and Chief Financial Officer

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BR920253-0320-10K