GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

6 Months Ended

Jun. 30, 2012

GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

6. Guarantor/Non-Guarantor Financial Information

        The Company has $450,000 principal amount of senior unsecured notes outstanding at a coupon interest rate of 6.625% per annum. The notes are guaranteed, jointly, severally, fully and unconditionally by certain of the Company's current and future direct and indirect domestic and foreign subsidiaries (collectively the "Guarantors"), excluding its other current domestic and foreign subsidiaries which do not guarantee the debt (collectively referred to as the "Non-Guarantors"). All Guarantors are 100% owned by the parent company.

        Consolidated financial information for the Company ("Parent"), the Guarantor subsidiaries and the Non-Guarantor subsidiaries is as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Thirteen Weeks ended June 30, 2012

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	347,643		$	152,159		$	333,171		$	(65,658	)	$	767,315
Cost of sales		249,557			121,658			261,374			(64,669	)		567,920
Gross profit		98,086			30,501			71,797			(989	)		199,395
Selling, general and administrative expenses		43,762			13,177			45,104			—			102,043
Operating income		54,324			17,324			26,693			(989	)		97,352
Other income (expense):
Interest expense		(7,573	)		(12,244	)		152			12,244			(7,421	)
Interest income		5			129			14,020			(12,244	)		1,910
Other		(454	)		11			(1,534	)		—			(1,977	)
		(8,022	)		(12,104	)		12,638			—			(7,488	)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries		46,302			5,220			39,331			(989	)		89,864
Income tax expense (benefit):
Current		19,363			6,197			10,425			—			35,985
Deferred		(2,963	)		(1,031	)		(1,199	)		—			(5,193	)
		16,400			5,166			9,226			—			30,792
Earnings before equity in earnings of nonconsolidated subsidiaries		29,902			54			30,105			(989	)		59,072
Equity in earnings of nonconsolidated subsidiaries		30,078			23,253			2,276			(53,520	)		2,087
Net earnings		59,980			23,307			32,381			(54,509	)		61,159
Other comprehensive income (loss)		(28,247	)		14,123			(39,671	)		21,836			(31,959	)
Comprehensive income (loss)		31,733			37,430			(7,290	)		(32,673	)		29,200
Less: Comprehensive loss attributable to noncontrolling interests		—			—			2,533			—			2,533
Comprehensive income (loss) attributable to Valmont Industries, Inc	$	31,733		$	37,430		$	(4,757	)	$	(32,673	)	$	31,733

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Twenty-six Weeks ended June 30, 2012

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	712,483		$	280,871		$	627,113		$	(135,802	)	$	1,484,665
Cost of sales		517,069			225,300			491,297			(134,710	)		1,098,956
Gross profit		195,414			55,571			135,816			(1,092	)		385,709
Selling, general and administrative expenses		87,034			26,965			91,540			—			205,539
Operating income		108,380			28,606			44,276			(1,092	)		180,170
Other income (expense):
Interest expense		(15,255	)		(24,501	)		27			24,501			(15,228	)
Interest income		14			323			28,152			(24,501	)		3,988
Other		1,005			25			(1,430	)		—			(400	)
		(14,236	)		(24,153	)		26,749			—			(11,640	)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries		94,144			4,453			71,025			(1,092	)		168,530
Income tax expense (benefit):
Current		36,548			5,296			21,170			—			63,014
Deferred		(2,769	)		139			(1,826	)		—			(4,456	)
		33,779			5,435			19,344			—			58,558
Earnings (loss) before equity in earnings of nonconsolidated subsidiaries		60,365			(982	)		51,681			(1,092	)		109,972
Equity in earnings of nonconsolidated subsidiaries		51,940			46,361			3,932			(98,458	)		3,775
Net earnings		112,305			45,379			55,613			(99,550	)		113,747
Other comprehensive income (loss)		(1,465	)		(2,244	)		8,129			(4,846	)		(426	)
Comprehensive income		110,840			43,135			63,742			(104,396	)		113,321
Less: Comprehensive income attributable to noncontrolling interests		—			—			(2,481	)		—			(2,481	)
Comprehensive income attributable to Valmont Industries, Inc	$	110,840		$	43,135		$	61,261		$	(104,396	)	$	110,840

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Thirteen Weeks Ended June 25, 2011

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	302,497		$	87,273		$	324,846		$	(46,007	)	$	668,609
Cost of sales		223,712			68,513			254,565			(46,163	)		500,627
Gross profit		78,785			18,760			70,281			156			167,982
Selling, general and administrative expenses		41,144			11,510			46,709			—			99,363
Operating income		37,641			7,250			23,572			156			68,619
Other income (expense):
Interest expense		(10,676	)		—			(107	)		—			(10,783	)
Interest income		39			—			1,962			—			2,001
Other		(179	)		19			664			—			504
		(10,816	)		19			2,519			—			(8,278	)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries		26,825			7,269			26,091			156			60,341
Income tax expense (benefit):
Current		12,863			3,172			8,498			—			24,533
Deferred		(3,970	)		(707	)		(6,305	)		—			(10,982	)
		8,893			2,465			2,193			—			13,551
Earnings before equity in earnings of nonconsolidated subsidiaries		17,932			4,804			23,898			156			46,790
Equity in earnings of nonconsolidated subsidiaries		27,895			13,970			1,234			(41,898	)		1,201
Net earnings		45,827			18,774			25,132			(41,742	)		47,991
Other comprehensive income		6,110			—			10,274			(9,392	)		6,992
Comprehensive income		51,937			18,774			35,406			(51,134	)		54,983
Less: Comprehensive income attributable to noncontrolling interests		—			—			(3,046	)		—			(3,046	)
Comprehensive income attributable to Valmont Industries, Inc	$	51,937		$	18,774		$	32,360		$	(51,134	)	$	51,937

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
For the Twenty-six Weeks Ended June 25, 2011

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	565,143		$	161,114		$	594,915		$	(84,614	)	$	1,236,558
Cost of sales		422,015			126,819			467,950			(84,701	)		932,083
Gross profit		143,128			34,295			126,965			87			304,475
Selling, general and administrative expenses		78,253			22,261			90,041			—			190,555
Operating income		64,875			12,034			36,924			87			113,920
Other income (expense):
Interest expense		(18,855	)		—			(189	)		—			(19,044	)
Interest income		34			—			3,744			—			3,778
Other		192			30			672			—			894
		(18,629	)		30			4,227			—			(14,372	)
Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries		46,246			12,064			41,151			87			99,548
Income tax expense (benefit):
Current		19,352			5,276			12,409			—			37,037
Deferred		(3,910	)		(968	)		(5,320	)		—			(10,198	)
		15,442			4,308			7,089			—			26,839
Earnings before equity in earnings of nonconsolidated subsidiaries		30,804			7,756			34,062			87			72,709
Equity in earnings of nonconsolidated subsidiaries		40,632			20,337			2,120			(60,934	)		2,155
Net earnings		71,436			28,093			36,182			(60,847	)		74,864
Other comprehensive income		27,614			—			33,756			(30,896	)		30,474
Comprehensive income		99,050			28,093			69,938			(91,743	)		105,338
Less: Comprehensive income attributable to noncontrolling interests		—			—			(6,288	)		—			(6,288	)
Comprehensive income attributable to Valmont Industries, Inc	$	99,050		$	28,093		$	63,650		$	(91,743	)	$	99,050

CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2012

	Parent			Guarantors			Non-Guarantors		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	23,542		$	40,473		$	264,366	$	—		$	328,381
Receivables, net		133,821			81,412			274,138		—			489,371
Inventories		135,926			84,968			220,402		—			441,296
Prepaid expenses		4,780			743			24,249		—			29,772
Refundable and deferred income taxes		21,862			5,890			16,247		—			43,999
Total current assets		319,931			213,486			799,402		—			1,332,819
Property, plant and equipment, at cost		440,285			112,489			388,951		—			941,725
Less accumulated depreciation and amortization		290,752			57,311			127,970		—			476,033
Net property, plant and equipment		149,533			55,178			260,981		—			465,692
Goodwill		20,108			107,542			185,127		—			312,777
Other intangible assets		580			56,454			104,931		—			161,965
Investment in subsidiaries and intercompany accounts		1,395,199			1,242,596			630,540		(3,268,335	)		—
Other assets		31,787			—			91,709		—			123,496
Total assets	$	1,917,138		$	1,675,256		$	2,072,690	$	(3,268,335	)	$	2,396,749
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt	$	179		$	—		$	69	$	—		$	248
Notes payable to banks		—			—			17,374		—			17,374
Accounts payable		58,810			26,823			136,583		—			222,216
Accrued expenses		75,352			13,032			67,567		—			155,951
Dividends payable		5,985			—			—		—			5,985
Total current liabilities		140,326			39,855			221,593		—			401,774
Deferred income taxes		18,932			27,472			32,813		—			79,217
Long-term debt, excluding current installments		472,548			587,258			1,044		(587,258	)		473,592
Other noncurrent liabilities		31,558			—			102,769		—			134,327
Commitments and contingencies
Shareholders' equity:
Common stock of $1 par value		27,900			457,950			254,982		(712,932	)		27,900
Additional paid-in capital		—			150,286			893,274		(1,043,560	)		—
Retained earnings		1,186,603			415,637			439,011		(854,648	)		1,186,603
Accumulated other comprehensive income		62,587			(3,202	)		73,139		(69,937	)		62,587
Treasury stock		(23,316	)		—			—		—			(23,316	)
Total Valmont Industries, Inc. shareholders' equity		1,253,774			1,020,671			1,660,406		(2,681,077	)		1,253,774
Noncontrolling interest in consolidated subsidiaries		—			—			54,065		—			54,065
Total shareholders' equity		1,253,774			1,020,671			1,714,471		(2,681,077	)		1,307,839
Total liabilities and shareholders' equity	$	1,917,138		$	1,675,256		$	2,072,690	$	(3,268,335	)	$	2,396,749

CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2011

	Parent			Guarantors			Non-Guarantors		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	27,545		$	18,257		$	317,092	$	—		$	362,894
Receivables, net		122,409			53,567			250,707		—			426,683
Inventories		125,862			77,838			190,082		—			393,782
Prepaid expenses		3,448			1,009			21,308		—			25,765
Refundable and deferred income taxes		22,053			6,218			15,548		—			43,819
Total current assets		301,317			156,889			794,737		—			1,252,943
Property, plant and equipment, at cost		427,398			107,315			376,929		—			911,642
Less accumulated depreciation and amortization		283,786			54,740			118,239		—			456,765
Net property, plant and equipment		143,612			52,575			258,690		—			454,877
Goodwill		20,108			107,542			187,012		—			314,662
Other intangible assets		661			59,389			108,033		—			168,083
Investment in subsidiaries and intercompany accounts		1,338,299			695,745			596,301		(2,630,345	)		—
Other assets		30,192			—			85,319		—			115,511
Total assets	$	1,834,189		$	1,072,140		$	2,030,092	$	(2,630,345	)	$	2,306,076
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt	$	187		$	—		$	48	$	—		$	235
Notes payable to banks		—			—			11,403		—			11,403
Accounts payable		85,974			21,428			127,135		—			234,537
Accrued expenses		72,341			14,259			70,528		—			157,128
Dividends payable		4,767			—			—		—			4,767
Total current liabilities		163,269			35,687			209,114		—			408,070
Deferred income taxes		21,891			27,661			35,945		—			85,497
Long-term debt, excluding current installments		473,419			—			996		—			474,415
Other noncurrent liabilities		28,648			—			111,535		—			140,183
Commitments and contingencies
Shareholders' equity:
Common stock of $1 par value		27,900			457,950			254,982		(712,932	)		27,900
Additional paid-in capital		—			181,542			893,884		(1,075,426	)		—
Retained earnings		1,079,698			370,258			407,677		(777,935	)		1,079,698
Accumulated other comprehensive income		64,052			(958	)		65,010		(64,052	)		64,052
Treasury stock		(24,688	)		—			—		—			(24,688	)
Total Valmont Industries, Inc. shareholders' equity		1,146,962			1,008,792			1,621,553		(2,630,345	)		1,146,962
Noncontrolling interest in consolidated subsidiaries		—			—			50,949		—			50,949
Total shareholders' equity		1,146,962			1,008,792			1,672,502		(2,630,345	)		1,197,911
Total liabilities and shareholders' equity	$	1,834,189		$	1,072,140		$	2,030,092	$	(2,630,345	)	$	2,306,076

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twenty-six Weeks Ended June 30, 2012

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Cash flows from operating activities:
Net earnings	$	112,305		$	45,379		$	55,613		$	(99,550	)	$	113,747
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization		9,121			6,341			18,905			—			34,367
Stock-based compensation		3,067			—			—			—			3,067
Defined benefit pension plan expense		—			—			2,050			—			2,050
Contribution to defined benefit pension plan		—			—			(10,750	)		—			(10,750	)
Gain on sale of property, plant and equipment		(65	)		(44	)		(55	)		—			(164	)
Equity in earnings of nonconsolidated subsidiaries		157			—			(3,933	)		—			(3,776	)
Deferred income taxes		(2,769	)		139			(1,826	)		—			(4,456	)
Changes in assets and liabilities:
Receivables		(11,412	)		(27,844	)		(30,666	)		—			(69,922	)
Inventories		(10,063	)		(7,131	)		(31,471	)		167			(48,498	)
Prepaid expenses		(1,332	)		266			(2,994	)		—			(4,060	)
Accounts payable		(13,913	)		5,395			10,494			—			1,976
Accrued expenses		3,009			(1,227	)		(2,403	)		—			(621	)
Other noncurrent liabilities		719			—			(1,127	)		—			(408	)
Income taxes payable (refundable)		(13,249	)		38			(2,878	)					(16,089	)
Net cash flows from operating activities		75,575			21,312			(1,041	)		(99,383	)		(3,537	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(15,037	)		(6,017	)		(18,167	)		—			(39,221	)
Proceeds from sale of assets		98			52			4,717			—			4,867
Other, net		(59,181	)		6,599			(44,964	)		99,383			1,837
Net cash flows from investing activities		(74,120	)		634			(58,414	)		99,383			(32,517	)
Cash flows from financing activities:
Net borrowings under short-term agreements		—			—			5,931			—			5,931
Proceeds from long-term borrowings		39,000			—			126			—			39,126
Principal payments on long-term borrowings		(39,191	)		—			(41	)		—			(39,232	)
Proceeds from sale of partial ownership interest		—			—			1,404			—			1,404
Dividends paid		(9,545	)		—			—			—			(9,545	)
Dividends to noncontrolling interest		—			—			(1,379	)		—			(1,379	)
Proceeds from exercises under stock plans		15,153			—			—			—			15,153
Excess tax benefits from stock option exercises		3,211			—			—			—			3,211
Purchase of common treasury shares—stock plan exercises:		(14,086	)		—			—			—			(14,086	)
Net cash flows from financing activities		(5,458	)		—			6,041			—			583
Effect of exchange rate changes on cash and cash equivalents		—			270			688			—			958
Net change in cash and cash equivalents		(4,003	)		22,216			(52,726	)		—			(34,513	)
Cash and cash equivalents—beginning of year		27,545			18,257			317,092			—			362,894
Cash and cash equivalents—end of period	$	23,542		$	40,473		$	264,366		$	—		$	328,381

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twenty-six Weeks Ended June 25, 2011

	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Cash flows from operations:
Net earnings	$	71,436		$	28,093		$	36,182		$	(60,847	)	$	74,864
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization		9,982			6,147			19,741			—			35,870
Stock-based compensation		2,618			—			—			—			2,618
Defined benefit pension plan expense		—			—			2,962			—			2,962
Contribution to defined benefit pension plan		—			—			(10,086	)		—			(10,086	)
Gain on sale of property, plant and equipment		(216	)		—			(23	)		—			(239	)
Equity in earnings of nonconsolidated subsidiaries		(34	)		—			(2,121	)		—			(2,155	)
Deferred income taxes		(3,910	)		(968	)		(5,320	)		—			(10,198	)
Changes in assets and liabilities:
Receivables		(16,627	)		2,791			(17,227	)		—			(31,063	)
Inventories		(41,343	)		(15,317	)		(22,296	)		—			(78,956	)
Prepaid expenses		(1,270	)		(57	)		(4,301	)		—			(5,628	)
Accounts payable		14,104			3,050			21,740			—			38,894
Accrued expenses		2,860			836			(13,170	)		—			(9,474	)
Other noncurrent liabilities		(5,438	)		—			1,036			—			(4,402	)
Income taxes payable (refundable)		27,822			—			(10,914	)		—			16,908
Net cash flows from operations		59,984			24,575			(3,797	)		(60,847	)		19,915
Cash flows from investing activities:
Purchase of property, plant and equipment		(4,644	)		(7,604	)		(15,663	)		—			(27,911	)
Proceeds from sale of assets		14			13			2,428			—			2,455
Acquisitions, net of cash acquired		—			—			(1,539	)		—			(1,539	)
Other, net		(58,343	)		(17,122	)		16,566			60,847			1,948
Net cash flows from investing activities		(62,973	)		(24,713	)		1,792			60,847			(25,047	)
Cash flows from financing activities:
Net borrowings under short-term agreements		—			—			2,160			—			2,160
Proceeds from long-term borrowings		187,770			—			—			—			187,770
Principal payments on long-term borrowings		(167,186	)		—			(44	)		—			(167,230	)
Purchase of noncontrolling interest		—			—			(25,253	)		—			(25,253	)
Dividends paid		(8,710	)		—			—			—			(8,710	)
Dividends to noncontrolling interest		—			—			(4,958	)		—			(4,958	)
Settlement of financial derivative		(3,568	)		—			—			—			(3,568	)
Debt issues fees		(1,284	)		—			—			—			(1,284	)
Proceeds from exercises under stock plans		16,933			—			—			—			16,933
Excess tax benefits from stock option exercises		2,533			—			—			—			2,533
Purchase of treasury shares		(4,802	)		—			—			—			(4,802	)
Purchase of common treasury shares—stock plan exercises		(18,443	)		—			—			—			(18,443	)
Net cash flows from financing activities		3,243			—			(28,095	)		—			(24,852	)
Effect of exchange rate changes on cash and cash equivalents		—			—			9,870			—			9,870
Net change in cash and cash equivalents		254			(138	)		(20,230	)		—			(20,114	)
Cash and cash equivalents—beginning of year		8,015			619			338,270			—			346,904
Cash and cash equivalents—end of period	$	8,269		$	481		$	318,040		$	—		$	326,790