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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
Form 10-Q
(Mark One)
☒    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 2021
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
For the transition period from ____________ to
Commission file number 1-31429
_____________________________________
Valmont Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware
47-0351813
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification No.)
15000 Valmont Plaza,
Omaha,Nebraska  68154
 (Address of Principal Executive Offices)
 (Zip Code)

(402) 963-1000
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock $1.00 par valueVMINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒Accelerated filer☐Non‑accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No x
21,224,185
Outstanding shares of common stock as of October 21, 2021

1

VALMONT INDUSTRIES, INC

INDEX TO FORM 10-Q
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
weeks ended September 25, 2021 and September 26, 2020
and thirty-nine weeks ended September 25, 2021 and September 26, 2020
Condensed Consolidated Balance Sheets as of September 25, 2021 and
December 26, 2020
Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks
ended September 25, 2021 and September 26, 2020
Condensed Consolidated Statements of Shareholders' Equity for the thirteen and
thirty-nine weeks ended September 25, 2021 and September 26, 2020
Notes to Condensed Consolidated Financial Statements
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.
Exhibits
Signatures
2



VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen weeks endedThirty-nine weeks ended
September 25,
2021		September 26,
2020		September 25,
2021		September 26,
2020
Product sales$782,694 $657,703 $2,283,460 $1,874,199 
Services sales86,088 76,267 254,837 222,779 
Net sales868,782 733,970 2,538,297 2,096,978 
Product cost of sales585,986 494,812 1,712,721 1,392,595 
Services cost of sales55,392 48,411 163,971 143,450 
Total cost of sales641,378 543,223 1,876,692 1,536,045 
Gross profit227,404 190,747 661,605 560,933 
Selling, general and administrative expenses151,209 129,268 425,574 372,481 
 Impairment of goodwill and trade names— — — 16,638 
Operating income76,195 61,479 236,031 171,814 
Other income (expenses):
Interest expense(11,031)(10,454)(31,466)(30,566)
Interest income397 430 894 1,931 
Gain on investments (unrealized)488 900 1,556 1,102 
Other2,644 233 10,297 1,349 
(7,502)(8,891)(18,719)(26,184)
Earnings before income taxes68,693 52,588 217,312 145,630 
Income tax expense:
Current21,109 14,968 55,069 42,922 
Deferred(5,029)(2,884)(8,747)(3,750)
16,080 12,084 46,322 39,172 
Earnings before equity in earnings of nonconsolidated subsidiaries52,613 40,504 170,990 106,458 
Equity in loss of nonconsolidated subsidiaries(360)(276)(1,079)(755)
Net earnings52,253 40,228 169,911 105,703 
Less: Earnings attributable to noncontrolling interests(603)(886)(1,137)(825)
Net earnings attributable to Valmont Industries, Inc.$51,650 $39,342 $168,774 $104,878 
Earnings per share:
Basic$2.44 $1.85 $7.97 $4.91 
Diluted$2.40 $1.84 $7.86 $4.89 

See accompanying notes to condensed consolidated financial statements.
3

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
Thirteen Weeks EndedThirty-nine weeks ended
September 25,
2021		September 26,
2020		September 25,
2021		September 26,
2020
Net earnings
$52,253 $40,228 $169,911 $105,703 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments:
  Unrealized translation gain (loss)(15,018)14,391 (16,961)(16,102)
         Gain (loss) on hedging activities:
Net investment hedges— — — 7,284 
   Cash flow hedges307 (26)16 344 
Amortization cost included in interest expense(16)(16)(48)(48)
     Commodity hedges(5,754)— 20,500 — 
     Realized gain on commodity hedges recorded in earnings(9,870)— (10,140)— 
     Cross currency swaps2,530 (3,725)4,041 570 
         Defined Benefit Pension Plan:
       Actuarial loss163 — 1,838 — 
Other comprehensive income (loss)
(27,658)10,624 (754)(7,952)
Comprehensive income
24,595 50,852 169,157 97,751 
Comprehensive (income) loss attributable to noncontrolling interests268 (1,358)(819)(1,785)
Comprehensive income attributable to Valmont Industries, Inc.
$24,863 $49,494 $168,338 $95,966 












See accompanying notes to condensed consolidated financial statements.
4

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September 25,
2021		December 26,
2020
ASSETS
Current assets:
Cash and cash equivalents$169,795 $400,726 
 Receivables, net537,693 511,714 
Inventories655,903 448,941 
   Contract assets155,417 123,495 
Prepaid expenses and other assets95,965 59,804 
     Refundable income taxes— 9,945 
        Total current assets1,614,773 1,554,625 
Property, plant and equipment, at cost1,383,892 1,341,380 
Less accumulated depreciation and amortization766,579 743,653 
Net property, plant and equipment617,313 597,727 
Goodwill709,462 430,322 
Other intangible assets, net193,449 167,193 
Other assets276,267 203,293 
Total assets$3,411,264 $2,953,160 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt$4,803 $2,748 
Notes payable to banks13,765 35,147 
Accounts payable338,723 268,099 
Accrued employee compensation and benefits124,212 137,939 
   Contract liabilities 138,286 130,018 
Other accrued expenses116,846 89,796 
Income taxes payable3,734 — 
         Dividends payable10,610 9,556 
Total current liabilities750,979 673,303 
Deferred income taxes45,863 41,689 
Long-term debt, excluding current installments897,488 728,431 
Defined benefit pension liability105,175 118,523 
Operating lease liabilities148,031 80,202 
Deferred compensation34,723 44,519 
Other noncurrent liabilities84,273 58,657 
Shareholders’ equity:
Common stock of $1 par value -
Authorized 75,000,000 shares; 27,900,000 issued
27,900 27,900 
Additional paid in capital6,668 335 
Retained earnings2,378,075 2,245,035 
Accumulated other comprehensive loss(310,222)(309,786)
Treasury stock(784,282)(781,422)
     Total Valmont Industries, Inc. shareholders’ equity1,318,139 1,182,062 
Noncontrolling interest in consolidated subsidiaries26,593 25,774 
Total shareholders’ equity1,344,732 1,207,836 
Total liabilities and shareholders’ equity$3,411,264 $2,953,160 
See accompanying notes to condensed consolidated financial statements.
5

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Thirty-nine weeks ended
September 25,
2021		September 26,
2020
Cash flows from operating activities:
Net earnings$169,911 $105,703 
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization67,764 61,523 
   Noncash loss on trading securities — 39 
   Impairment of property, plant and equipment— 2,811 
Impairment of goodwill & intangible assets— 16,638 
Stock-based compensation17,895 8,736 
Defined benefit pension plan benefit(11,051)(5,401)
Contribution to defined benefit pension plan(970)(17,398)
           Gain on sale of property, plant and equipment(1,250)(60)
Equity in loss in nonconsolidated subsidiaries1,079 755 
Deferred income taxes(8,747)(3,750)
Changes in assets and liabilities:
Receivables(30,709)(26,298)
Inventories(211,273)(32,992)
  Prepaid expenses and other assets (current and non-current)(21,589)(19,157)
  Contract assets(33,199)28,597 
Accounts payable76,916 63,627 
Accrued expenses15,523 61,122 
  Contract liabilities6,768 (1,475)
Other noncurrent liabilities10,228 20,982 
   Income taxes payable/refundable14,533 9,044 
Net cash flows from operating activities61,829 273,046 
Cash flows from investing activities:
Purchase of property, plant and equipment(80,509)(70,960)
Proceeds from sale of assets1,655 911 
Acquisitions, net of cash acquired(312,500)(15,862)
        Settlement of net investment hedges— 11,983 
Other, net1,891 2,543 
Net cash flows from investing activities(389,463)(71,385)
Cash flows from financing activities:
Proceeds from short-term borrowings3,191 4,251 
Payments on short-term borrowings(23,654)(10,713)
Proceeds from long-term borrowings236,710 88,872 
Principal payments on long-term borrowings(66,128)(76,417)
Dividends paid(30,794)(27,316)
Dividends to noncontrolling interest— (5,642)
Purchase of noncontrolling interest— (55,916)
Purchase of treasury shares(24,101)(28,006)
Proceeds from exercises under stock plans22,747 980 
Purchase of common treasury shares—stock plan exercises(16,955)(77)
Net cash flows from financing activities101,016 (109,984)
Effect of exchange rate changes on cash and cash equivalents(4,313)(2,164)
Net change in cash and cash equivalents(230,931)89,513 
Cash and cash equivalents—beginning of year400,726 353,542 
Cash and cash equivalents—end of period$169,795 $443,055 
See accompanying notes to condensed consolidated financial statements
6

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Dollars in thousands)
(Unaudited)

Common
stock		Additional
paid-in
capital		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Treasury
stock		Noncontrolling
interest in
consolidated
subsidiaries		Total
shareholders’
equity
Balance at June 27, 2020$27,900 $— $2,194,916 $(332,486)$(763,495)$25,867 $1,152,702 
Net earnings— — 39,342 — — 886 40,228 
Other comprehensive income (loss)— — — 10,152 — 472 10,624 
Cash dividends declared ($0.45 per share)
— — (9,614)— — — (9,614)
Purchase of treasury shares; 60,645 shares acquired
— — — — (7,525)— (7,525)
Stock plan exercises; 580 shares acquired
— — — — (72)— (72)
Stock options exercised; 2,616 shares issued
— 5,461 (5,462)— 257 — 256 
Stock option expense— 686 — — — — 686 
Stock awards; 253 shares issued
— 2,346 — — 33 — 2,379 
Balance at September 26, 2020$27,900 $8,493 $2,219,182 $(322,334)$(770,802)$27,225 $1,189,664 
Balance at June 26, 2021$27,900 $— $2,337,015 $(283,435)$(786,857)$26,861 1,321,484 
Net earnings— — 51,650 — — 603 52,253 
Other comprehensive income— — — (26,787)— (871)(27,658)
Cash dividends declared ($0.50 per share)
— — (10,617)— — — (10,617)
Purchase of treasury shares; 10,759 shares acquired
— — — — (2,500)— (2,500)
Stock plan exercises; 144 shares acquired
— — — — (33)— (33)
Stock options exercised; 20,749 shares issued
— (2,194)27 — 5,023 — 2,856 
Stock option expense— 618 — — — — 618 
Stock awards; 494 shares issued
— 8,244 — — 85 — 8,329 
Balance at September 25, 2021$27,900 $6,668 $2,378,075 $(310,222)$(784,282)$26,593 $1,344,732 












See accompanying notes to the condensed consolidated financial statements.






VALMONT INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Dollars in thousands)
(Unaudited)
Common
stock		Additional
paid-in
capital		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Treasury
stock		Noncontrolling
interest in
consolidated
subsidiaries		Total
shareholders’
equity
Balance at December 28, 2019$27,900 $— $2,173,802 $(313,422)$(743,942)$45,407 $1,189,745 
Net earnings— — 104,878 — — 825 105,703 
Other comprehensive income (loss)— — — (8,912)— 960 (7,952)
Cash dividends declared ($1.35 per share)
— — (28,837)— — — (28,837)
Dividends to noncontrolling interests— — — — — (5,642)(5,642)
Purchase of noncontrolling interest— — (30,661)— — (19,450)(50,111)
Addition of noncontrolling interest— — — — — 5,125 5,125 
Purchase of treasury shares; 251,136 shares acquired
— — — — (28,006)— (28,006)
Stock plan exercises; 617 shares acquired
— — — — (77)— (77)
Stock options exercised; 4,100 shares issued
— 244 — — 736 — 980 
Stock option expense— 1,909 — — — — 1,909 
Stock awards; 8,957 shares issued
— 6,340 — — 487 — 6,827 
Balance at September 26, 2020$27,900 $8,493 $2,219,182 $(322,334)$(770,802)$27,225 $1,189,664 
Balance at December 26, 2020$27,900 $335 $2,245,035 $(309,786)$(781,422)$25,774 $1,207,836 
Net earnings— — 168,774 — — 1,137 169,911 
Other comprehensive income— — — (436)— (318)(754)
Cash dividends declared ($1.50 per share)
— — (31,848)— — — (31,848)
Purchase of treasury shares; 103,056 shares acquired
— — — — (24,100)— (24,100)
Stock plan exercises; 71,412 shares acquired
— — — — (16,955)— (16,955)
Stock options exercised; 164,872 shares issued
— (10,294)(3,886)— 36,927 — 22,747 
Stock option expense— 1,885 — — — — 1,885 
Stock awards; 9,554 shares issued
— 14,742 — — 1,268 — 16,010 
Balance at September 25, 2021$27,900 $6,668 $2,378,075 $(310,222)$(784,282)$26,593 $1,344,732 












See accompanying notes to the condensed consolidated financial statements.
7

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

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

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Consolidated Financial Statements
The Condensed Consolidated Balance Sheet as of September 25, 2021, the Condensed Consolidated Statements of Earnings, Comprehensive Income, and Shareholders' Equity for the thirteen and thirty-nine weeks ended September 25, 2021 and September 26, 2020, and the Condensed Consolidated Statement of Cash Flows for the thirty-nine weeks then ended have been prepared by Valmont Industries Inc. (the Company), without audit. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial statements as of September 25, 2021 and for all periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 2020. The results of operations for the period ended September 25, 2021 are not necessarily indicative of the operating results for the full year.
    Inventories
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.
Inventories consisted of the following:
September 25,
2021		December 26,
2020
Raw materials and purchased parts
$209,090 $155,512 
Work-in-process
45,213 33,632 
Finished goods and manufactured goods
401,600 259,797 
Total Inventory$655,903 $448,941 

Income Taxes
Earnings before income taxes for the thirteen and thirty-nine weeks ended September 25, 2021 and September 26, 2020, were as follows:    
Thirteen weeks endedThirty-nine weeks ended
2021202020212020
United States$47,784 $33,610 $156,028 $141,347 
Foreign20,909 18,978 61,284 4,283 
$68,693 $52,588 $217,312 $145,630 

Pension Benefits
The Company incurs expenses in connection with the Delta Pension Plan ("DPP"). The DPP was acquired as part of the Delta plc acquisition in fiscal 2010 and has no members that are active employees. In order to measure expense and the related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as current facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.
8

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

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


The components of the net periodic pension (benefit) expense for the thirteen and thirty-nine weeks ended September 25, 2021 and September 26, 2020 were as follows:
Thirteen weeks endedThirty-nine weeks ended
Net periodic (benefit) expense:2021202020212020
Interest cost
$2,479 $3,285 $7,508 $9,569 
Expected return on plan assets
(6,957)(5,887)(21,061)(17,149)
Amortization of actuarial loss
827 748 2,502 2,179 
Net periodic (benefit) expense
$(3,651)$(1,854)$(11,051)$(5,401)

    Stock Plans
The Company maintains stock-based compensation plans approved by the shareholders, which provide that the Human Resource Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. At September 25, 2021, 453,718 shares of common stock remained available for issuance under the plans.
    Under the plans, the exercise price of each option equals the closing market price at the date of the grant. Options vest beginning on the first anniversary of the grant in equal amounts over three years or on the grant's fifth anniversary. Expiration of grants is seven years to ten years from the date of grant. Restricted stock units and awards generally vest in equal installments over three years beginning on the first anniversary of the grant.
The Company's compensation expense (included in selling, general and administrative expenses) and associated income tax benefits related to stock options and restricted stock for the thirteen and thirty-nine weeks ended September 25, 2021 and September 26, 2020, respectively, were as follows:
Thirteen weeks endedThirty-nine weeks ended
2021202020212020
Compensation expense
$8,947 $3,065 $17,895 $8,736 
Income tax benefits
2,237 766 4,474 2,184 
During the third quarter of 2021, the Company granted approximately 143,859 restricted shares, worth approximately $38,000, to certain employees of Prospera Technologies, Ltd. ("Prospera"). These restricted shares vest in equal installments over four years, and require the employees to continue employment over those four years. As such, the related compensation expense will be incurred over the vesting period.
Fair Value
The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 apply to other accounting pronouncements that require or permit fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
9

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

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

ASC 820 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
     Level 1: Quoted market prices in active markets for identical assets or liabilities.
    Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
    Level 3: Unobservable inputs that are not corroborated by market data.
The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.
Trading Securities: The assets and liabilities recorded for the investments held in the Valmont Deferred Compensation Plan at September 25, 2021 of $29,481 ($35,125 at December 26, 2020) represent mutual funds, invested in debt and equity securities, classified as trading securities in accordance with Accounting Standards Codification ("ASC") 320, Accounting for Certain Investments in Debt and Equity Securities, considering the employee's ability to change investment allocation of their deferred compensation at any time. The Company's ownership of shares in Delta EMD Pty. Ltd. (JSE:DTA) is also classified as trading securities. The shares are valued at $99 and $202 as of September 25, 2021 and December 26, 2020, respectively, which is the estimated fair value. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.
Derivative Financial Instruments: The fair value of foreign currency and commodity forward contracts, and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate.
Fair Value Measurement Using:
Carrying Value September 25, 2021Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets:
Trading Securities
$29,580 $29,580 $— $— 
Derivative financial instruments, net
7,001 — 7,001 — 
Fair Value Measurement Using:
Carrying Value December 26, 2020Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets:
Trading Securities
$35,327 $35,327 $— $— 
Liabilities:
Derivative financial instruments, net
(5,911)— (5,911)— 

10

VALMONT INDUSTRIES, INC. AND SUBSIDIARIES

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

Long-Lived Assets
    The Company's other non-financial assets include goodwill and other intangible assets, which are classified as Level 3 items. These assets are measured at fair value on a non-recurring basis as part of annual impairment testing. Note 4 to these condensed consolidated financial statements contain additional information related to goodwill and intangible asset impairments recognized in fiscal 2020.

The Company is monitoring the outlook for wind energy in Northern Europe which would affect the net sales and gross profit assumptions in the cash flow projections for the Company’s offshore and other complex steel structures reporting unit. This reporting unit has net property, plant, and equipment of $38,694, the Valmont SM trade name of $8,386, and a customer relationship, net of accumulated amortization, of $4,927. If the market outlook declines further, the Company will have to analyze the recoverability of the long-lived assets which may result in the recognition of an impairment.

Leases

    The Company's operating leases are included in other assets and operating lease liabilities. During the second quarter of 2021, the Company commenced on a new corporate headquarters operating lease with straight-line annual expense of approximately $5,100, a 2% annual increase in lease payment, and a 25 year term. In recognition of this lease, an operating lease asset of $71,853 and an operating lease long-term liability of $71,196 was incurred. These amounts are included within other assets and operating lease liabilities, respectively, in the Condensed Consolidated Balance Sheets as of September 25, 2021.

Comprehensive Income (Loss)
Comprehensive income (loss) includes net earnings, currency translation adjustments, certain derivative-related activity and changes in net actuarial gains/losses from a pension plan. Results of operations for foreign subsidiaries are translated using the average exchange rates during the period. Assets and liabilities are translated at the exchange rates in effect on the balance sheet dates. Accumulated other comprehensive income (loss) consisted of the following at September 25, 2021 and December 26, 2020: