Greetings, and welcome to the Valmont Industries Inc. third quarter 2026 earnings conference call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation, during which we ask that you please limit yourself to one question and one brief follow-up question and return to the queue. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to your host, Renee Campbell, Senior Vice President, Capital Markets and Risk. Ms. Campbell, you may begin.
Good morning, everyone, and thank you for joining us. With me today are Avner Applbaum, President and Chief Executive Officer; John Schwietz, Executive Vice President and Chief Financial Officer; Eric Johnson, Chief Accounting Officer, and Casey Meyer, Vice President, Treasury and Investor Relations. Earlier this morning, we issued a press release announcing our third quarter 2026 results. Both the release and the presentation for today's webcast are available on the investors page of our website at valmont.com. A replay of the webcast will be available later this morning. To stay updated with Valmont's latest news releases and information, please sign up for email alerts on our investor site. We will begin today's call with prepared remarks and then open it up for questions. A reminder that today's presentation and Q&A includes forward-looking statements about Valmont's expectations, plans, and future performance. Actual results may differ materially from those expressed or implied.
Important factors that could cause those differences are described under forward-looking statements, which is outlined on slide two of today's presentation and in the risk disclosures in our most recent Form 10-K and subsequent Forms 10-Q available on our investor relations website and sec.gov. With that, I would now like to turn the call over to Avner.
Thank you, Renee. Good morning, everyone, and thank you for joining us. Turning to slide four. I would like to start by highlighting three important takeaways from the quarter. First, we delivered another quarter of sales and earnings growth. Net sales increased 5.5%, and operating margin expanded 220 basis points. Earnings per share rose 25.3%. The progress we are making reinforces our confidence in achieving our long-term financial objectives. Second, infrastructure growth continues to be anchored by markets where we have strong positions and see significant long-term opportunity. North America utility sales increased 23% as customers are modernizing the grid, adding capacity, and improving resiliency as power demand grows. North America coating sales grew 14%, supported by utility construction projects, including data centers. These businesses are delivering on our Investor Day priority to capture above-market growth in utility.
Finally, North America agriculture sales increased 16%, a notable result given the challenging broader market. When storms disrupted growers' operations during their peak season, our Valley dealers and teams were ready to help get their systems back up and running as quickly as possible. Storm replacement activity contributed to the quarter's growth and demonstrated the value of the dealer network. These relationships also support our strategy to grow aftermarket parts and technology, strengthening the business even before a broader market recovery. Turning to slide five, I'll review our infrastructure businesses, starting with North America Utility. Demand is exceptionally strong. Our alliance relationships give us visibility into customers' multi-year plans before projects become firm orders and enter the backlog. That pipeline continues to strengthen. This quarter, more of those opportunities converted into orders, bringing the infrastructure backlog to $1.8 billion.
The projects ahead and orders in hand support our confidence in utility growth behind our path to $35 in earnings per share by the end of 2029. My recent conversations with key utility customers reinforce our view that we are still early in a multi-year investment cycle. One customer told me it has tripled its project management and field teams over the past two years to support its expanding investment program. That same company asked us to evaluate structural alternatives and total installation costs for a higher voltage transmission project. Customers rely on our engineering expertise to make informed decisions early in their projects. They have also made clear that dependable delivery is essential to their construction schedules. That's why we are focused not just on adding capacity, but also on improving throughput and meeting delivery commitments.
Through the third quarter, we've installed and commissioned approximately 20% of the incremental utility steel production capacity required to support our 2029 plan. Lead times across the industry have extended as demand grows and new capacity ramps up. To support utility and coatings, we are increasing our expansion and expect to double our growth capital investment in 2027 compared with this year. These investments are aligned with visible customer demand and our capital framework presented at Investor Day. North America Coatings is also benefiting from the infrastructure investment supporting utility and other end markets. With one of the largest galvanizing networks in the industry, our coatings business plays an important role in improving the durability and life cycle performance of critical steel infrastructure. With galvanizing demand outpacing industry supply, we expect to shift more of our existing capacity towards growing internal volumes as we bring expansion projects online.
This will help us maintain reliable delivery for our utility customers. In lighting and transportation markets are healthy, while lighting continues to be affected by softer residential and commercial construction activity. We're pursuing targeted growth, including expanding our presence in Texas. Our work with utilities and municipalities is translating into new orders and product approvals, supporting our growth in this important market. Our priorities remain improving on-time delivery, manufacturing reliability, and overall operating performance. In telecom, carrier capital deployment remains selective following the peak of the 5G build-out. Several carriers are delaying site modification work to align with future technology and spectrum deployments. This impacted demand this quarter, and we expect market conditions to remain soft in the near term. This does not change our view of the longer-term need for network investment. We are well-positioned to support long-term growth in data consumption and network capacity needs.
Across our international infrastructure markets, we are advancing initiatives to strengthen commercial execution and operational performance across these businesses. A good example this quarter is in Europe, where we secured a new contract to supply distribution poles to a major utility, expanding our participation in grid investment. Turning to agriculture on slide six. Global ag market conditions remain challenged. In North America, higher input costs and lower grain prices continue to pressure farm economics and constrain capital spending. Recent industry reports indicated a decline in grower sentiment and capital investment expectations, reinforcing our view that this quarter's sales growth does not suggest a broader market recovery. The landscape is similar in Brazil. Interest rates and input costs remain elevated while grain prices have not kept pace. We remain confident in the long-term fundamentals of the Brazilian market.
In the Middle East, the ongoing conflict in the region continues to affect our operations and the timing of certain customer projects, with high shipping costs adding to the delays. We do not expect a near-term return to normal activity in the region, and recovery will take time. At the same time, we are very pleased to have been awarded a $100 million project in North Africa supporting food security in the region. The project includes our full suite of technology and water management solutions to improve farm productivity and water efficiency. We expect shipments to begin in the first half of 2027, and our diverse global manufacturing footprint provides the flexibility to reliably serve this customer. While the underlying dynamics differ across regions, we expect the overall operating environment for ag to persist through year-end. We are investing in higher-value aftermarket and technology solutions to help growers improve productivity.
These areas continue to gain traction and strengthen the quality and resilience of the business through the cycle. Across Valmont, our priorities as we look ahead are clear: efficiently ramp the capacity we are adding, align our operations with demand across the portfolio, and recover higher input costs through disciplined pricing. I will now turn the call over to John to review our third quarter financial results and updated 2026 outlook.
Thank you, Avner, and good morning, everyone. Turning to slide eight. I will begin with our consolidated results. Net sales of $1.1 billion increased 5.5% year-over-year, driven by growth in infrastructure, notably North America utility and coatings. Operating income increased to $172.8 million, and operating margin expanded 220 basis points to 15.7%. Our tax rate was approximately 26%. Diluted earnings per share was $6.24, a 25.3% increase from prior year. Moving to our segment results on slide nine. Beginning with infrastructure, sales of $882.1 million grew 9.1% year-over-year. North America utility sales increased 23%, driven by higher pricing and volume growth, supported by a robust market environment. Sales in North America Lighting and Transportation declined 2.2% due to lower volumes. North America Coating sales increased 13.8%, supported by healthy infrastructure and data center demand.
North America Telecom sales decreased 33.8%, reflecting lower carrier spending as customers shifted capital allocation priorities. International sales increased 5.5%, driven by pricing actions and favorable foreign exchange impacts. Operating income increased to $154.8 million, or 17.6% of net sales, compared to $143.4 million, or 17.8% of net sales. Higher pricing and volumes in utility and coatings helped offset higher material costs, the cost of ramping utility capacity, and lower telecom contribution. We are addressing the margin pressure through contractual pass-throughs and broader pricing actions. As capacity ramps, we are focused on strategic sourcing, productivity enhancements, and improving material flow. Let me provide some context on the price cost timing we are experiencing. Average steel prices on the third-party index we use for contractual pass-throughs were approximately 50% above prior year levels. This increase is visible in the chart we have in the appendix.
Because of the size and duration of our utility backlog, these costs affect results before the related pricing adjustments reach revenue. When input costs stabilize, we expect pricing will catch up and support infrastructure margin expansion. This usually takes two to three quarters to fully realize. These near-term pressures do not change our view of the long-term earnings potential of this business. Turning to slide 10. Third quarter agriculture sales decreased 6.4% year-over-year to $226 million. North America sales increased 15.8%, led by storm replacement orders and favorable pricing. International sales decreased 25.3%, driven primarily by lower Middle East and Brazil volumes. We also saw continued growth in our higher value offerings, with aftermarket part sales increasing approximately 12% and technology services growing 7%, despite softer equipment demand. Operating income increased to $40.1 million, or 17.9% of net sales, compared to $23.2 million, or 9.7% of net sales.
Lower credit losses and certain recoveries in Brazil and higher North America volumes contributed to the year-over-year increase, which was partially offset by lower international volumes. Moving to slide 11 for cash liquidity and capital allocation. Operating cash flow was $100.5 million, which includes $40 million of accelerated receivable collections. Working capital increased during the quarter, driven in part by increased sales volume and raw material inflation. We remain focused on improving cash conversion. We ended the quarter with $122 million of cash and net debt leverage of approximately 0.9 x. The strength of our balance sheet continues to be reflected in our investment-grade credit ratings, with S&P reaffirming our BBB+ rating during the quarter and Moody's reaffirming our Baa2 rating subsequent to quarter end. Turning to capital deployment. During the quarter, we invested approximately $46 million in capital expenditures, primarily to support utility capacity expansion.
We returned $97 million to shareholders through $82 million of share repurchases and $15 million of dividends. At quarter end, approximately $367 million remained available under our current share repurchase authorization. This balanced deployment of capital reflects our focus on investing in the highest return growth opportunities while maintaining financial flexibility and returning capital to shareholders. Turning to our full year outlook on slide 12. We are reaffirming our net sales outlook of $4.3 billion - $4.45 billion and raising our adjusted diluted earnings per share guidance. Our infrastructure sales outlook is unchanged at $3.4 billion - $3.5 billion. It reflects favorable pricing and volume growth in North America Utility and Coatings and continued softness in Telecom. Our agriculture sales outlook is also unchanged at $900 million - $950 million as current market conditions remain broadly consistent with our prior assumptions.
Looking to the fourth quarter, we expect earnings and margins to moderate from third quarter levels. Our outlook reflects increasing input cost pressures, business mix effects, and the absence of certain third quarter benefits. Following the strong third quarter performance, we now expect full year adjusted diluted earnings per share of $22.75-$23.75. Finally, our capital expenditure outlook remains unchanged at $170 million-$200 million. With that, I will now turn the call over to Renee.
Thank you, John. At this time, the Operator will open up the call for questions.
Thank you. At this time, we will be conducting a Q&A session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, please limit yourselves to one question and one follow-up. Thank you. Our first question comes from the line of Nathan Jones with Stifel. Please proceed with your question.
Good morning, everyone.
Morning.
Morning.
I guess I'll start on price cost. I'm sure it's going to get a lot of attention. There's obviously been significant steel inflation, freight cost inflation, all of that kind of stuff. I wonder if you'd be able to just talk about what the impact to margins or what the impact to earnings was for that. Does it get worse in fourth Q before it gets better as you start to catch up on price cost? I know we've seen this movie before with Valmont. We know there's a lag between the cost and the price catch up. Just any more color you can give us around what the impact in the quarter was, what you'd expect it to be next quarter, and how much margin upside there is, assuming costs stabilize at some point. Thanks.
Thank you, Nathan, for the question. I won't go through the movie as we've seen it before, as you said. But the answer is, there was impact to the margins here in Q3. They were modest impacts. There was no, let's say, negative dollar impact to it, but there were impacts to the margins. As we look to Q4, we expect that to get a little more pressured. What we've seen since the last earnings call is that the pace of the inflation in our input costs have accelerated. We expect more pressure in Q4 on the margin side. If we look further out, as you know, it usually takes two to three quarters to sort of fully pull through our price mechanisms to results in a stable environment. I'd say even if it moderates, we'll see some growth again in margins.
We don't need a full stabilization, but some moderation of the pace of input costs.
Okay, that's helpful. I guess the other one I'll ask is on the ag side. Obviously, the 16% North America growth is something influenced by the storm revenue and the margins there are also impacted by storm revenue. It's much higher margin, I know. Can you talk about the impact that that had to the quarter? Maybe what it contributed to earnings, if you can break it down that far, just so we kind of have a better idea of what the underlying run rate was.
Perfect. Nathan, I'll start off and then I'll hand it over for John for some more detail. I think it's important to understand that when these storms occur, our farmers have choices, and they chose to come to Valmont for several reasons. One, it is critical time for our farmers to be able to get back up and running. Our operations team are able to manufacture and support with manufacturing these pivots. Our dealers are ready to support our customers and able to get them back into Valmont's ecosystem with our technology and other offerings. We're very pleased with our ability to support our farmers and which contributed strongly to our results. Maybe John, you could add a little bit more color there.
Yep, sure. To your question about the impact to revenue growth and then also the margins. On the revenue side in North America, that was substantially responsible for the growth in North America that we saw in Q3. If we go through the margins, 17.9% was exceptional and exceeded our expectations. So sort of two areas to touch on. As we mentioned in the prepared remarks, we did have some one-time benefits in ag. It amounted to about $7 million. Those were mainly related to recoveries that we made in South America. If we take the impact of those one-time items out, we're just north of 14% for the operating margin. Really that was above what we had discussed in terms of low teen expectations for the second half of the year.
In that delta really is the effect of the storm, is the effect that it's a higher mix with regards to North America, better accretive, and then also better pricing as well.
Thanks for taking my questions.
Thank you. Our next question comes from the line of Tomo Sano with JP Morgan. Please proceed with your question.
Good morning, everyone.
Morning.
Morning.
Thank you for taking my questions. If you could talk about infrastructure backlog has increased to $1.8 billion. Could you break down what is driving the increase across customers and if you could talk about competitive landscape as well from the current environment? Thank you.
Sure. First of all, the majority of the increase, majority of the backlog is related to our utility customers. It is important to understand the entire context is backlog is part of the equation, right? We also monitor our pipeline and our pipeline with our alliance customers have actually strengthened as well. The backlog represents those orders converting from the pipeline to our backlog. The environment continues to be extremely robust. Our customers are strengthening their order. They are increasing their spend. Our pipeline through 2029 has increased over the last several quarters. The market continues to be extremely strong. As it relates to the competitive landscape, the industry is constrained, and being the leaders in this industry with the engineers and the relationship that go over for many decades.
As I mentioned, I visited some of our customers, and it's clear that they come to us for our engineering expertise, for our on-time delivery, for the reliability overall. So we continue to win in this space. We're booking well into 2028. Our customers are looking for us to secure our capacity. So we continue to see robustness in the industry.
Thank you, Avner. Then just one quick follow-up on North America utility was up 23% in Q3. Could you quantify the contribution from volume versus price? And how should we think about Q4 in your guidance? Thank you.
Yep, thank you for the question. So 23% was a result we were pleased with. So the majority of the driving factor there was volume, in this case, for Q3. Although it's noteworthy that price was right at double digits as well, so both contributed. If we look at the full year, we're expecting mid-20s in terms of growth rates for utility, and we are expecting to hit our target of double-digit volume growth for the full year.
Thank you, John.
Yep.
Thank you. Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.
Hi. Good morning. Thanks for taking my questions. First on the project in North Africa, congratulations on that win. Can you talk a little bit more specifically on the timing of revenue recognition there and the cadence of that and also the margins, relative to typical ag margins?
Yeah, sure. So overall, right now we're expecting to start delivery on that project, in the first half of 2027. It's going to be likely an 18 months, up to two years project. But maybe just take a step back. In this environment, we're very pleased on our ability to win a project in the region as well as to support it with our global footprint. We're able to support it from our Dubai facility as well as from other facilities around the world, which allows us to continue to support that region, which has strong demand for food security and water scarcity. So that is a good win for the team. So overall, just to summarize, probably be over 24 months and, John, maybe share a little bit about the margin profile.
Sure. So on the margin side, we are, of course, very disciplined in our intake process as it relates to these projects. This particular project, like most large projects, is slightly below baseline operating profit margin, but not significantly and not expected to really make an impact necessarily.
Okay, thank you. Just switching to utility. You guys sounded, of course, very positive on the utility outlook at the Investor Day. You sound, to me, maybe even more positive now. I was a little surprised just now to hear that volume accounted for more than half of the growth in the quarter, given what's going on with price. Has your outlook become more positive, even just since the recent Investor Day? Do you have more visibility now? You talked about visibility to $6.7 billion in revenue through 2029. How has that number maybe changed and just the overall sentiment?
The answer is yes. We are more confident now in our goal, and that is based on several factors. One, we're actually seeing the spend. We saw our backlog increase. The pipeline we spoke about for the $6.7 billion, that number, now, of course, we're shipping against that as well, has increased. So we're getting better coverage through our 2029. The confidence is driven based on our conversations with our customers. It's with our customer spend. It's their customers committing to them for load growth and committing to spend within. We're seeing more in the industry around additional spend in areas like AI. We're seeing even areas that we don't talk about that much, but we're seeing that the EV spend has also increased. We're seeing more energy out of that area, as well as all the other factors of onshoring, manufacturing.
Unfortunately, we've seen some storms over the last several weeks, which just emphasize the point that we need to keep on focusing on grid hardening and resiliency. So we keep our eye on the market. We're booking well into 2028. The utility have plans going through 2030, and some are conversations with the customers. Our plans are going through 2032. We're also seeing that in the industry that the lead times are expanding. We're seeing now they're going well beyond a year, or they're going to 60 and 70 weeks. So it just shows the entire strength in the market, and we're very pleased with how we're adding our capacity, supporting our customers, and looking pretty positive for us.
Thanks very much.
Thank you. Our next question comes from the line of Brent Thielman with Oppenheimer & Co. Please proceed with your question.
Great. Thanks. Avner or John, just back on the North American utility, would you expect pricing to sustain at a double-digit run rate as we go into 2027, just considering all this inflation? It seems to be a pretty significant factor to your growth rate for that business next year.
Brent, the answer is yes.
Okay. Just in terms of the telecom, obviously utility is outgrowing, but any sense from customers when we might see a change? I know you mentioned not through this year, but any sort of inklings on what you're hearing next year and what could be some catalysts to turn the business around?
At telecom, we don't have great visibility into the market. Of course, we do talk to our customers, and we are seeing that they're being more selective around their spend following the peak of the 5G rollout and some of the site modification, their capital allocation moved out into 2027. So right now, we're looking to continue same environment going into 2027. We do know that they're going to spend more on the spectrum. They're waiting for some technology advancement. But overall, they need to continue their build. So we know it's coming. It's just a matter of timing. There's some indications that we see some coming back more towards the latter half of 2027, but again, we don't have great visibility. So right now what we're doing is we're focusing on our costs. We're focusing on new product development with our customers.
We're looking into other spaces like private networks. Overall, we're working on what we can control. But expect that these conditions to remain at least through the end of the year.
Okay. Thank you.
Thank you. Our next question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.
Hey, good morning. Thanks. Take a couple. So maybe just one more on the steel catch-up. Obviously, Q3 was a little bit of pressure. Q4 is going to be a little bit more. Double-digit pricing is going to continue into 2027. From where you sit today, assuming some normalization of steel pricing, would that imply that we start to see kind of a little bit incremental margin improvement in Q2, or is that more back half?
Thanks for the question. The pace of margin expansion really will be defined in part by how quickly these costs continue to accelerate or stabilize. Q2 is a bit far for us to really tell where the trajectory of these costs are going to go. What we can say is that the actions that we're taking to expand margins are taking hold. As you know, our focus on scaling profitably, on improving operating leverage, you can see improving leverage over SG&A. You can see that in the SG&A numbers that we posted here this year and in this quarter. Those things we'll continue to be working on to try to offset any sort of price cost pressure that we have.
No, I just want to add one point, which I think you know this, but as we're talking about the dislocation, which has an impact on our margins in the short term. As we look forward, the pricing actions we take are mostly to offset the cost. Of course, there's some margin there, but as we get into next year and we see higher pricing, that doesn't necessarily mean that's all dropping to the bottom line. That's really offsetting some of the steel cost. The pressure right now is more of the dislocation, and as they stabilize, that's when our margins stabilize as well.
Got it. No, that makes sense. Maybe just one more within the competitive landscape within infrastructure. Obviously, demand is off the charts at this point in time. Specifically, Nucor is a relatively new entrant here. Near term, perhaps long term, do you see that as any impact on the infrastructure kind of landscape at all from where you guys are sitting at this stage?
Yeah. We monitor capacity industry consistently, and to your point, Nucor, they just announced that they are going to add capacity. Even with all the capacity adds, there is still more demand than supply in the industry. We feel very comfortable with our ability to continue to support our customers without having the industry at full capacity. It is also important to understand that our customers and the large utility customers, they come to Valmont not because we have four walls and press brakes. They come to us because of our engineering expertise, for our reliability, on-time delivery, and the fact that they do not want to take risk, and they know they come to Valmont, that is one area that they do not have to take risk.
Of course, we have our eyes on the competitors, but we feel very good that the industry continues to be well in balance, and we do not have any concerns on that element.
Sounds good. I will leave it there. I appreciate it, guys.
Thank you. Our next question is a follow-up from the line of Brent Thielman with Oppenheimer & Co. Please proceed with your question.
Hey, thanks. Maybe just one follow-up on Ag. The margins have been outstanding this year, and I know there's some mixed factors to that, but why wouldn't we see a carryover benefit to margins in that segment into the fourth quarter from what you saw in Q3?
Yep, great question. Thanks, Brent. The story here is the mix between North America and international. Q3, you're very familiar with, is usually a very strong international quarter and as you saw, because of the storm demand that we had that was exceptional, it was much stronger on the North America side. Also with that, the preferred pricing that we get in those circumstances. That really drove a much better business mix in Q3. If we look to Q4, to your point, we are expecting sort of a more normal return to the business mix between North America and international, and that will put some pressures on the margins compared to Q3.
Okay. Maybe if I could just to follow up, what's been the headwind from, I know the issues in the Middle East, including the closure of the facility, what's been the overall headwind to the business this year, just so we can kind of think about that going into 2027?
Just from a numbers perspective compared to last year, you're right that it's been the Middle East. I mean, the biggest delta from a top-line perspective versus last year has been the lack of project revenue through Ag this year. Other than that, it's really just been the sort of the market conditions, the soft market conditions that we see and the fact that we haven't quite seen line of sight yet to the recovery.
Yeah. If you just order it, I would say definitely the Middle East, and then we did see continued softness in Brazil. North America is one area that we're bumping along the bottoms. That market keeps on kind of supporting those conditions. We've seen that in Q3 actually, we had strength, but that's our expectation is that North America does not go further down with more upside opportunity in North American markets.
Understood. Thank you.
Thank you.
Thank you. We have reached the end of the question and answer session, and I'll now turn the call over to Renee Campbell for closing remarks.
Thank you for joining us today. A replay of this call will be available for playback on our website and by phone for the next seven days. We look forward to speaking with you again next quarter.
These slides and the accompanying oral discussion contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions made by management, considering its experience in the industries where Valmont operates, perceptions of historical trends, current conditions, expected future developments and other relevant factors. It is important to note that these statements are not guarantees of future performance or results. They involve risks, uncertainties, some of which are beyond Valmont's control and assumptions. While management believes these forward-looking statements are based on reasonable assumptions, numerous factors could cause actual results to differ materially from those anticipated.
These factors include, among other things, risks described in Valmont's reports to the Securities and Exchange Commission, SEC, the company's actual cash flows and net income, future economic and market circumstances, industry conditions, company performance and financial results, operational efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes by domestic and foreign governments, including tariffs. The company cautions that any forward-looking statements in this release are made as of its publication date and does not undertake to update these statements except as required by law. The company's guidance includes certain non-GAAP financial measures, adjusted diluted earnings per share and adjusted effective tax rate, presented on a forward-looking basis.
These measures are typically calculated by excluding the impact of items such as foreign exchange, acquisitions, divestitures, realignment or restructuring expenses, goodwill or intangible asset impairment, changes in tax laws or rates, change in redemption value of redeemable non-controlling interests, and other non-recurring items. Reconciliations to the most directly comparable GAAP financial measures are not provided, as the company cannot do so without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and financial impact of such items. For the same reasons, the company cannot assess the likely significance of unavailable information which could be material to future results.