Good morning. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Valmont Industries, Inc. Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. We ask that you please limit your questions to one question and follow-up question. Thank you. I would now like to turn today's call over to Mr. Jeff Laudin, Manager-Investor Relations. Please go ahead, sir.

Thank you, Kayla. Welcome to the Valmont Industries Fourth Quarter and Full Year 2016 Earnings Conference Call. With me today are Mogens Bay, Chairman and Chief Executive Officer; Steve Kaniewski, President and Chief Operating Officer; Mark Jaksich, Executive Vice President and Chief Financial Officer; and Tim Francis, Vice President and Corporate Controller. Before we begin, please note this conference call is subject to our disclosure on forward-looking statements which applies to today's discussion and will be read in full at the end of the call. The instructions for accessing a replay of the call can be found in our press release, which you will find under the Media Room link in our website. I would now like to turn the floor over to our Chairman and Chief Executive Officer, Mogens Bay.

Thank you, Jeff. Good morning, everyone, and thank you for joining us. I trust that you have all read the press release and reviewed the accompanying earnings slide deck. I will provide an overview of fourth quarter and full year performance, Steve will provide the update on segment performance, and then Mark will provide an overview of the financial results, discuss non-recurring events during the quarter and wrap up with an overview on our capital deployment efforts. With that, let me turn to this period's highlights. Revenue in the fourth quarter was $675 million, an increase of 6.4% year-over-year. Notably, this is the first quarter out of the last 13 that experienced revenue growth. The primary contribution to the sales increase came for Engineered Support and Utility Support Structures, and Energy and Mining segments. During the quarter, we completed the remaining restructuring initiatives associated with our Australia operations which we announced last year. As part of this effort, we consolidated certain manufacturing facilities and reduced SG&A cost primarily in our access system businesses. This completes the major restructuring programs we announced in 2015 and 2016. When I look back over the year, I am pleased to see how the organization has responded to the significant restructuring and cost takeout initiatives. Whereas, we will continue to look for productivity improvement and cost reductions, we have brought to the forefront, now, our efforts in the areas of market expansion and new products. We appointed Steve Kaniewski to President and Chief Operating Officer as part of our succession planning, and I couldn't be more pleased with how Steve has settled into his new role. Steve is bringing impressive leadership and new thinking to the business units; he also fully embraces our strategy surrounding markets and industries we serve, and he's focused on prudent capital allocation and return on invested capital. Overall, we feel good about the fourth quarter and ending the year on a positive note, with solid top-line growth and improved profitability driven by our initiatives to drive down cost. I will now turn the call over to Steve, who will review the segment performance.

Thank you, Mogens, and good morning everyone. In the Engineered Support Structures segment, sales grew 12%. Increased demand for wireless communication products drove much of the improvement. In North America, wireless communication market activity picked up during the fourth quarter and we had positive quarterly sales comparisons for the first time in the year. Carrier activity is increasing, following the spectrum licensing uncertainty in early 2016. In North America, we continue to experience strength in the commercial lighting market due to improved non-residential construction activity and strong relationships with lighting OEMs. We have yet to see a pick-up in demand from the highway bill, but expect to see some activity as the year progresses. Overall, sales were similar to last year. In China and Australia, wireless communication sales also increased as the 4G build-out continues. In EMEA, sales grew modestly. There has been no change in end market drivers as infrastructure spending remains muted across Europe. In Utility Support Structures, sales improved 8% as both volumes and pricing increased. A portion of the price increase was tied to higher steel costs. We believe the near-term demand outlook has improved, albeit with the market oriented towards smaller structures and projects. Our restructuring and organizational realignment in this segment over the last two years has allowed for improved profitability despite fewer large projects. As such, we remain focused on pricing discipline and productivity improvements. Operating income for the segment was 11.2% of sales for the quarter and we are pleased that we met our commitment of 200 basis points of improvement for the year, which we outlined at our Investor Day in February. In the Coatings segment, sales were in line last year at $75 million. Higher Asia Pacific sales offset North American sales, which declined modestly due to lower demand from…

Thank you, Steve, and good morning everyone. Fourth quarter earnings per share on an adjusted basis were $1.61, up 19% from $1.35 in 2015. The adjusted EPS figure for 2016 excludes two favorable non-recurring, non-cash events. First, we removed a contingent liability on our balance sheet of $16.6 million. This matter was associated with the divestiture made by Delta plc prior to Valmont acquiring the company in 2010. We confirm that certain statutes of limitation on this matter expired, and accordingly, we removed the liability. Secondly, certain deferred income tax assets for re-measures are of a legal entity restructuring completed in late 2016. This resulted in a deferred income tax benefit of $22.6 million, thus increasing GAAP earnings. Also, after-tax restructuring expenses of $5.8 million were incurred during the quarter. You will find the GAAP and adjusted results in the press release. My commentary forward on the fourth quarter and full-year 2016 as compared to 2015 will refer to the adjusted results as they are disclosed at the end of the press release. Fourth quarter sales of $675 million represented a 6.4% increase over 2015 as outlined in Mogens' and Steve's earlier remarks. Despite raw material cost increases during the quarter, we improved gross profit margins by 50 basis points over 2015. SG&A spending was comparable to last year. The effect of currency translation in our quarter-end results was not significant. Fourth quarter operating income was $63.5 million, a 27% increase over the same period in 2015. We are pleased to have realized operating leverage on the increased sales and effectively manage gross margins in a challenging raw material cost environment. Turning to 2016, I'd like to draw your attention to slide 12 in the deck, which shows a comparison of our 2016 performance against our stated long-term goals. For…

Thank you, Mark. In 2016, our earnings performance improved, even though revenues were challenged given little or no growth in our end markets. We enter 2017 with a strong organization and a cost structure better matched to the external environment. As the fourth quarter demonstrates, we have seen some improvement in a few of our markets. This should support our expectations for revenue growth in 2017. We do expect to meet all of our financial objectives this year, as Mark just enumerated. We set these objects as achievable through the cycle; so, naturally, we would expect our earnings improvements to accelerate when the time comes when the cycle has turned. At this time, I'd like to turn the call over to the operator to take your questions.

Your first question comes from the line of Julian Mitchell.

Hi. Good morning.

Good morning.

Good morning, Julian.

Just the first question is really around the raw materials impact. Maybe if you could give some sense as to how significant that was within your gross margin sort of year-on-year in the fourth quarter; and also, if you expect to be able to sustain gross margin increases through the first half of 2017 given where input costs are today.

Yeah. Julian, this is Mark. When you think about the raw materials, the one thing we've seen more inflation on is hot-rolled coil, which is a significant part of it; but, there were lot of other elements or other steel parts that we have that didn't really experience the same level of increase. So, there was probably – our sense would be, on an inflationary basis, there may have been possibly 25 basis points to 30 basis points quarter-on-quarter on – just simply related to inflation and the like. But on a go-forward basis, I would say each of our businesses have material cost-saving initiatives and pricing actions. Some of which were already been taken, which collectively – our plan and our objective is to basically try to recover those cost increases in the marketplace.

Understood. Thank you. Then my follow-up would be just around the phasing of the sales growth as you go through the year. You talked about mid-single-digit sales growth for the year as a whole. Yeah, that's roughly what you did in 6% in Q4. So, could we expect that mid-single-digit rate to be steady through the year or is there any kind of back-end loading in any of the larger segments?

Hi, Julian. This is Steve. All of our segments we've predicted more or less a flat sales growth throughout the year. So, it's not that it's back-end loaded. It's pretty consistent quarter-over-quarter.

Great. Thank you.

You next question comes from the line of Craig Bibb.

Hi. Thanks for taking my questions. Mogens, you've talked about the company's focus now is shifting to market expansion and new products. Could you give us a sense? Are there any products that have traction or where do you think the bigger opportunities are for market expansion?

Well, I'll give you a couple of examples. In the Utility business, we introduced last year a new product line called PyraMAX that could be a replacement for lattice towers and we are seeing good tractions, particularly for river crossings in that product line. In the Irrigation business, Steve mentioned a whole number of new introductions in the technology side of the business. So, I would say it's spread throughout both the structural businesses and the Irrigation business.

Okay. And then, in Irrigation, to my surprise, you guys way outperformed Lindsay in the quarter. I know the quarter – the months don't exactly line up. Are you taking share from them or is that like a geographic mix difference?

Well, as I said many times, in North America, share doesn't really move. It could move from quarter-to-quarter and – but over time, it really doesn't. So, I wouldn't read too much into that.

And then, in your comments it sounded like you're expecting a FAST Act benefit this year. I actually thought you're going to say next year. Is it kind of Q4 and how visible is that?

Yeah. This is Steve. From a highway spending perspective, we've noted last quarter that the inquiries were starting to increase. And so, knowing how the cycle works – the engineering, the approvals, the permitting – we would say that that's probably more in the second half of the year that we would start to see some of those effects from the 2015 bill. And then, obviously, as we go into 2018, we would anticipate a continued increase there.

All right. Thanks a lot.

Your next question comes from the line of Brent Thielman. Brent Edward Thielman - D. A. Davidson & Co.: Hi. Good morning.

Good morning.

Good morning. Brent Edward Thielman - D. A. Davidson & Co.: On Utility Structures, how would you characterize large project planning and kind of your general level of visibility through quotations kind of into 2018, maybe relative to where we stood this time the last couple of years trying to look ahead?

Yeah. The large projects, because of typically the permitting process and the – oftentimes maybe even multistate nature of it across maybe an RTO, you have good visibility of the projects pretty much well in advance. So, there are couple of large projects that are on the radar right now. An example could be Clean Line or R-Project in Nebraska. So, we do have visibility to those and we'll work with the utilities ahead of the actual tendering process so that we can understand the structure types and kind of what they're looking for. But as mentioned in my comments, the level of large projects, and I'll say things that do 345 kilovolts or larger, have tended to be muted over the past couple of years. And it's a trend that we anticipate kind of moving forward at this point with the lower voltage classes and smaller projects. Brent Edward Thielman - D. A. Davidson & Co.: Okay. Okay. That's helpful. And then, on Coatings, can you talk about your ability to capture price, I guess, as being cause of move to higher between your two geographies? Is it going to be more difficult in the international operations versus U.S.? And I guess what kind of lag do you expect before you're able to get some of that margin back?

The increase in zinc was pretty pronounced and as I expect, that tends to force all of our competition, both in North America and internationally, to move pretty quickly with that. While there's always some lag based on people's zinc inventory, generally the entire market has moved to address the increased zinc costs. Brent Edward Thielman - D. A. Davidson & Co.: Okay. Thank you.

Your next question comes from the line of Jon Braatz.

Good morning, everyone. Steve, a question on Latin America Irrigation sales. I know you had mentioned that Brazil has been benefiting and I think John Deere mentioned it, too, that they're benefiting from some government, I guess, loan programs or subsidy programs. What's the current status of those programs and can you talk a little bit about maybe what you think might be the duration of those programs?

Yeah. In Brazil, specifically, the one thing that is doing well in their economy, which otherwise is not doing so well is the agricultural economy. And so, politicians on basically all sides of the aisle have agreed that this is something that needs to move forward. We're getting early signs out of the region that they may actually reauthorize the FINAME program earlier than normal just because that is the number one source of foreign capital and tax revenue for the government. So, we anticipate at least in our planning horizon that this continues for the duration of the time period.

You talked about reauthorization, when do you think that that might happen or something – what do we might look forward to that?

I think it's usually slated for the spring timeframe. So, they're already talking about it now, so it maybe late spring by the time that gets reauthorized.

Jon, it's Mogens. It would be very unusual if it was not reauthorized. So, the question always what happens to interest rates under the FINAME program. And last year, they increased it, but it's still way below what a farmer would have to pay if they went to a commercial bank.

Okay. Okay. All right. All right, thank you.

Your next question comes from the line of Nathan Jones. Adam M. Farley - Stifel, Nicolaus & Co., Inc.: Hi. Good morning. This is Adam Farley on for Nathan.

Good morning.

Good morning, Adam Adam M. Farley - Stifel, Nicolaus & Co., Inc.: So, the USDA forecasts a fourth consecutive decline in domestic net farm income. Do you think there's room for another leg-down or is this year really going to be the bottom of the cycle?

This is Mogens. You can make a case that if farm income continues to go down, that you could have another down year. You can equally easy make a case that is not going to happen. We're kind of expecting flat revenue in North America. I think one of the things that may happen is that, after a couple of years of low commodity prices, customers are getting used to this new level. And don't forget that investment in a pivot is really a productivity investment. And regardless of where commodity prices are, the more productive you can become, if you have the balance sheet or the cash to invest, the more likely it is that you will invest in productivity improvement. So, can we guarantee that we have reached the bottom? No. Is the feeling that we may be there? Yes. Adam M. Farley - Stifel, Nicolaus & Co., Inc.: Okay. Great. That's very helpful. Follow-up, I know in the past, you talked about – saying you're going to pass through price to distributors with rising raw material costs. Any color on that? How is that working out? Is there any pushback?

Adam, are you speaking specifically through the irrigation dealers? Adam M. Farley - Stifel, Nicolaus & Co., Inc.: Yes, credits to your dealers.

Yeah. The pricing environment really hasn't changed much over the past year. It remains competitive, particularly when there's more than a single pivot or a couple of pivots. The larger the project, the more competition you get there. And you'll have dealers that will look to get help as compared to competitors' prices. But in general, the pricing environment is fairly stable, as we see at this point. Adam M. Farley - Stifel, Nicolaus & Co., Inc.: Okay. Great. Thank you.

Your next question comes from the line of Brian Drab. Brian P. Drab - William Blair & Co. LLC: Good morning and congratulations on continuing to manage through a tough environment.

Thank you. Brian P. Drab - William Blair & Co. LLC: Yeah. First, I was wondering – you've given some good detail on the outlook here, and thanks for that, but I'm wondering if you could maybe rank order to some extent what you're expecting from the segments in 2017. It sounds like we should expect ESS and USS to outperform that 5% growth and Irrigation to lag, but maybe you could give us a little more clarity on the magnitude of outperformance or underperformance for each segment. And then, if you could, as a part B to this question, talk about the breakdown between price and volume that you're expecting, at least in ESS and USS. Thanks.

Yeah, Brian, this is Mark. I would say you're correct in concluding that Utility and ESS are going to provide the lion's share of the sales growth, and I think the indication is that Irrigation is going to be, on the whole, similar to last year. And then, in Coatings, we believe we'll get some growth. Plus, on top of that, we'll have a full-year impact of the Texas facility, which started up late last year and didn't really contribute much to the top line; and then, Energy and Mining would be relatively flat compared to what we saw in 2016. So, I think as far as – there really isn't – we haven't provided a specific breakout as far as pricing. There's certainly some pricing baked into that 5% sales growth, but the – and it varies a little bit by segment, but I'd say the majority of it is expected to be volume-related revenue growth. Brian P. Drab - William Blair & Co. LLC: Okay, great. And the Coatings growth, is it fair to assume that would be kind of in line with the overall guidance, it's like a mid-single-digit growth is in your forecast?

Yeah. I would say, more or less, that would be the case. If you look at overall expected economic growth in the U.S., that should drive, on the whole, Coatings sales. It depends a little bit on individual sectors, but I think that's a fair assumption. Brian P. Drab - William Blair & Co. LLC: Okay. And then if I could just ask on margins, too, which segments have the greatest margin expansion opportunity in 2017? Thanks.

Well, I don't – Brian, we haven't gone into that level of detail as far as profitability by segment. But certainly, if you think about what Steve's comments were regarding lead times in Utility, in the pipeline, in the orders and so forth, we're expecting to continue in the operational initiatives as well to continue to grow on the Utility side of it. Brian P. Drab - William Blair & Co. LLC: Okay, thanks. I'll save my questions for later, the rest of them. Thanks.

We have a follow-up question from the line of Jon Braatz.

Mark, I was reading the other night about a concern in England about some of the pension liabilities. I know you have a pension liability from the acquisition of Delta. Can you give us little update about that pension and where you stand in terms of funding that pension?

Right. Yeah, you're right. I mean, one of the things would be – couple of things we saw, particularly in the in the back end of the year after Brexit was a pretty significant decrease in the discount rates – to the AA corporate bond rates, which really drives much of the pension valuation because as those rates go down, all the future payments end up being – amounting to more money because they're discounted in lower rates. So, you saw we had an increase in our pension liability, but it's important to understand that this plan is a dormant plan. So, all of the members of the plan are either retirees who are drawing a pension today or they're deferred members, so there's no actives in there. So, in that sense, it's a got a little different risk profile to it as well as time goes on. We'll see some valuation bounce around with respect to – just because of how discount rates work. But the asset portfolio did quite well in 2016 and helped mitigate some of the effects of the discount rate effect. But I think we work closely with the pension trustee board and it's just something we have to manage over time. And we feel over the long term, it won't be a big material impact to us as this all unwinds, but it's pretty volatile environment right now. Brian P. Drab - William Blair & Co. LLC: Okay. All right. Thank you, Mark.

We now have a follow-up question from Brian Drab. Brian P. Drab - William Blair & Co. LLC: Oh, I did not mean to ask a follow-up question, but as long as I'm – I must have pressed *1 twice. But as long I'm on the call here again, one, can you just talk about how much of the earnings growth in 2017 would come from share repurchase?

Yeah. I would say, Brian, that it's relatively small related to that as well. We're going to continue being opportunistic where we can. So, we're not building in a lot of activity on share purchase for 2017, but that remains to be seen depending what happens with the market. Brian P. Drab - William Blair & Co. LLC: Okay. Thanks, and congrats again.

Okay.

And there are currently no questions in queue.

Thank you, Kayla. This concludes our call and we thank you for joining us today. This message will be available for playback on the Internet or by phone for the next week. We look forward to speaking to you again next quarter. And at this time, Kayla will read our disclosure statement.

Included in this discussion are 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 Valmont 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. As you listen to and consider these comments, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties, some of which are beyond Valmont's control and assumptions. Although management believes that these forward-looking statements are based on a reasonable assumption, you should be aware that many factors could affect Valmont'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 Valmont'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 material, 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 company cautions that any forward-looking statement included in this discussion is made as of the date of this discussion and the company does not undertake to update any forward-looking statement. This is the end of today's call. You may now disconnect and have a great day.