What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-04 compared with 2024-01-04 · 199 added, 159 removed, 282 unchanged (56% of the section changed)

3 unchanged sentences

(unaudited, in millions, except per share amounts)

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2024 February 26,

2023 February 25,

2024 February 26,

Net sales $ 1,458.3 $ 1,253.6 $ 4,855.7 $ 3,655.7

Cost of sales 1,054.6 855.8 3,476.9 2,603.0

Gross profit 403.7 397.8 1,378.8 1,052.7

Selling, general and administrative expenses 179.8 131.5 526.0 357.6

4 unchanged sentences

Equity method investment earnings (loss) 1.0 ( 23.3 ) 17.8 44.0

Net income $ 146.1 $ 175.1 $ 595.8 $ 510.1

Earnings per share:

Basic $ 1.01 $ 1.22 $ 4.11 $ 3.54

Diluted $ 1.01 $ 1.21 $ 4.09 $ 3.53

Weighted average common shares outstanding:

Basic 144.5 144.0 145.0 144.0

Diluted 145.3 144.8 145.8 144.7

See Condensed Notes to Consolidated Financial Statements.

3 unchanged sentences

Thirteen Weeks Ended

November 26, 2023

November 27, 2022

February 25, 2024 Thirteen Weeks Ended

February 26, 2023

Benefit After-Tax

Amount Pre-Tax

Benefit After-Tax

Net income $ 189.2 $ ( 43.1 ) $ 146.1 $ 217.2 $ ( 42.1 ) $ 175.1

Other comprehensive income (loss):

1 unchanged sentence

Unrealized currency translation gains (losses) ( 17.1 ) 0.1 ( 17.0 ) 8.4 0.1 8.5

Other ( 0.2 ) 0.1 ( 0.1 ) 0.1 — 0.1

Comprehensive income $ 171.8 $ ( 42.9 ) $ 128.9 $ 225.7 $ ( 42.0 ) $ 183.7

Twenty-Six Weeks Ended

November 26, 2023

November 27, 2022

Thirty-Nine Weeks Ended

February 25, 2024 Thirty-Nine Weeks Ended

February 26, 2023

Benefit After-Tax

Amount Pre-Tax

Benefit After-Tax

Net income $ 775.1 $ ( 179.3 ) $ 595.8 $ 662.7 $ ( 152.6 ) $ 510.1

Other comprehensive income (loss):

1 unchanged sentence

Unrealized currency translation gains (losses) 14.2 ( 0.2 ) 14.0 ( 39.4 ) 1.6 ( 37.8 )

Other ( 0.4 ) 0.1 ( 0.3 ) 0.6 ( 0.1 ) 0.5

Comprehensive income $ 788.4 $ ( 179.3 ) $ 609.1 $ 623.9 $ ( 151.1 ) $ 472.8

6 unchanged sentences

Receivables, less allowance for doubtful accounts of $ 1.1 and $ 2.6

Inventories 1,210.0 932.0

Prepaid expenses and other current assets 150.6 166.2

2 unchanged sentences

Operating lease assets 135.9 146.1

Goodwill 1,056.6 1,040.7

Intangible assets, net 106.4 110.2

Other assets 381.3 287.6

Total assets $ 7,245.7 $ 6,519.8

LIABILITIES AND STOCKHOLDERS’ EQUITY

15 unchanged sentences

Treasury stock, at cost, 6,336,439 and 4,627,828 common shares

( 480.1 ) ( 314.3 )

Additional distributed capital ( 521.0 ) ( 558.6 )

Retained earnings 2,622.1 2,160.7

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss ( 13.5 ) ( 26.8 )

Total stockholders’ equity 1,758.2 1,411.3

2 unchanged sentences

Lamb Weston Holdings, Inc.

Consolidated Statements of Stockholders’ Equit y

Consolidated Statements of Stockholders’ Equity

(unaudited, in millions, except share data )

Thirteen Weeks Ended November 26, 2023 and November 27, 2022

Thirteen Weeks Ended February 25, 2024 and February 26, 2023

Common Stock,

net of Treasury

Shares Common

Amount Treasury

Amount Additional

(Distributed)

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Income (Loss)

Balance at August 27, 2023

Balance at November 26, 2023 144,368,320 $ 150.7 $ ( 479.4 ) $ ( 535.9 ) $ 2,528.6 $ 3.7 $ 1,667.7

Dividends declared, $ 0.360 per share

— — — — ( 52.0 ) — ( 52.0 )

Common stock issued 32,586 — — 0.5 — — 0.5

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 9,920 ) — ( 0.8 ) — — — ( 0.8 )

Comprehensive income

Other — — 0.1 2.2 ( 0.6 ) — 1.7

Comprehensive income (loss) — — — — 146.1 ( 17.2 ) 128.9

Balance at February 25, 2024 144,390,986 $ 150.7 $ ( 480.1 ) $ ( 521.0 ) $ 2,622.1 $ ( 13.5 ) $ 1,758.2

Balance at November 27, 2022 143,870,309 $ 148.3 $ ( 297.5 ) $ ( 785.5 ) $ 1,569.2 $ ( 61.5 ) $ 573.0

Balance at August 28, 2022

Dividends declared, $ 0.280 per share

— — — — ( 40.3 ) — ( 40.3 )

Common stock issued 8,059 — — 0.1 — — 0.1

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 126,622 ) — ( 12.4 ) — — — ( 12.4 )

Comprehensive income (loss)

Balance at November 27, 2022

Twenty-Six Weeks Ended November 26, 2023 and November 27, 2022

Other — — — 1.0 ( 0.7 ) — 0.3

Comprehensive income — — — — 175.1 8.6 183.7

Balance at February 26, 2023 143,751,746 $ 148.3 $ ( 309.9 ) $ ( 774.0 ) $ 1,703.3 $ ( 52.9 ) $ 714.8

Thirty-Nine Weeks Ended February 25, 2024 and February 26, 2023

Common Stock,

net of Treasury

Shares Common

Amount Treasury

Amount Additional

(Distributed)

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Income (Loss)

Balance at May 28, 2023 145,665,683 $ 150.3 $ ( 314.3 ) $ ( 558.6 ) $ 2,160.7 $ ( 26.8 ) $ 1,411.3

Dividends declared, $ 0.920 per share

— — — — ( 133.2 ) — ( 133.2 )

Common stock issued 433,914 0.4 — 0.3 — — 0.7

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 1,708,611 ) — ( 165.1 ) — — — ( 165.1 )

( 1,698,691 )

Other — — ( 0.7 ) 2.9 ( 1.2 ) — 1.0

Comprehensive income — — — — 595.8 13.3 609.1

Balance at November 26, 2023

Balance at February 25, 2024 144,390,986 $ 150.7 $ ( 480.1 ) $ ( 521.0 ) $ 2,622.1 $ ( 13.5 ) $ 1,758.2

Balance at May 29, 2022 144,071,428 $ 148.0 $ ( 264.1 ) $ ( 813.3 ) $ 1,305.5 $ ( 15.6 ) $ 360.5

Dividends declared, $ 0.770 per share

— — — — ( 110.8 ) — ( 110.8 )

Common stock issued 293,458 0.3 — 1.4 — — 1.7

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 613,140 ) — ( 45.8 ) — — — ( 45.8 )

Other — — — 9.9 ( 1.5 ) — 8.4

Comprehensive income (loss) — — — — 510.1 ( 37.3 ) 472.8

Balance at November 27, 2022

Balance at February 26, 2023 143,751,746 $ 148.3 $ ( 309.9 ) $ ( 774.0 ) $ 1,703.3 $ ( 52.9 ) $ 714.8

See Condensed Notes to Consolidated Financial Statements.

2 unchanged sentences

(unaudited, in millions)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

2024 February 26,

Cash flows from operating activities

Net income $ 595.8 $ 510.1

Adjustments to reconcile net income to net cash provided by operating activities:

4 unchanged sentences

Foreign currency remeasurement gain ( 0.1 ) ( 21.2 )

Other ( 2.9 ) ( 22.3 )

Changes in operating assets and liabilities, net of acquisitions:

Receivables ( 8.6 ) ( 47.2 )

Inventories ( 275.0 ) ( 254.3 )

Income taxes payable/receivable, net 36.3 13.1

8 unchanged sentences

Acquisition of business, net of cash acquired ( 11.2 ) —

Other 14.7 3.6

Net cash used for investing activities $ ( 824.8 ) $ ( 535.7 )

5 unchanged sentences

Repurchase of common stock and common stock withheld to cover taxes ( 165.1 ) ( 47.2 )

Net cash used for financing activities

Other — ( 1.9 )

Net cash provided by financing activities $ 100.1 $ 331.3

Effect of exchange rate changes on cash and cash equivalents 0.7 19.3

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents ( 242.5 ) 150.0

Cash and cash equivalents, beginning of period 304.8 525.0

2 unchanged sentences

Lamb Weston Holdings, Inc.

Condensed Notes to Consolidated Financial Statement s

Condensed Notes to Consolidated Financial Statements

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 unchanged sentences

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements present the financial results of Lamb Weston and its consolidated subsidiaries for the thirteen and twenty-six weeks ended November 26, 2023 and November 27, 2022, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”).

The accompanying unaudited Consolidated Financial Statements present the financial results of Lamb Weston and its consolidated subsidiaries for the thirteen and thirty-nine weeks ended February 25, 2024 and February 26, 2023, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”).

These consolidated financial statements are unaudited and include all adjustments that we consider necessary for a fair presentation of such financial statements and consist only of normal recurring adjustments.

3 unchanged sentences

These financial statements and related condensed notes should be read together with the consolidated financial statements and notes in our Annual Report on Form 10-K for the fiscal year ended May 28, 2023 (the “Form 10-K”), where we include additional information on our critical accounting estimates, policies, and the methods and assumptions used in our estimates.

We filed the Form 10-K with the Securities and Exchange Commission (“SEC”) on July 25, 2023.

We filed the Form 10-K with the Securities and Exchange Commission (the “SEC”) on July 25, 2023.

Certain amounts from prior period consolidated financial statements have been reclassified to conform with current period presentation.

Accounting Pronouncements Not Yet Adopted

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the Securities and Exchange Commission’s Disclosure Update and Simplification Initiati ve.

The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Accounting Standards Codification (“ASC”) in response to the SEC’s Release No.

33-10532, Disclosure Update and Simplification Initiative , and align the ASC’s requirements with the SEC’s regulations.

The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective.

However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective.

Early adoption is prohibited.

We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU is effective for our Annual Report on Form 10-K for the fiscal year ending May 25, 2025, and subsequent interim periods, with early adoption permitted.

ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

ASU 2023-07 is effective for our Annual Report on Form 10-K for the fiscal year ending May 25, 2025, and subsequent interim periods, with early adoption permitted.

We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to enhance transparency and decision usefulness of income tax disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on a prospective basis, with early adoption permitted.

Improvements to Income Tax Disclosures , to enhance transparency and decision usefulness of income tax disclosures, particularly around rate reconciliations and income taxes paid information.

ASU 2023-09 is effective for our Annual Report on Form 10-K for the fiscal year ending May 25, 2025, on a prospective basis, with early adoption permitted.

We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

2 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per common share for the periods presented:

Thirteen Weeks Ended

Twenty-Six Weeks Ended

(in millions, except per share amounts)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in millions, except per share amounts) February 25,

2024 February 26,

2023 February 25,

2024 February 26,

Net income $ 146.1 $ 175.1 $ 595.8 $ 510.1

Basic weighted average common shares outstanding 144.5 144.0 145.0 144.0

2 unchanged sentences

Earnings per share:

Basic $ 1.01 $ 1.22 $ 4.11 $ 3.54

Diluted $ 1.01 $ 1.21 $ 4.09 $ 3.53

___________________________________________

(a) Potential dilutive shares of common stock under employee incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options and the assumed vesting of outstanding restricted stock units and performance awards.

As of November 26, 2023, 0.7 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

As of November 27, 2022, 0.6 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

Income tax expense for the thirteen and twenty-six weeks ended November 26, 2023 and November 27, 2022 was as follows:

Thirteen Weeks Ended

Twenty-Six Weeks Ended

(in millions)

As of February 25, 2024, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

As of February 26, 2023, 0.6 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

Income tax expense for the thirteen and thirty-nine weeks ended February 25, 2024 and February 26, 2023 was as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in millions) February 25,

2024 February 26,

2023 February 25,

2024 February 26,

Income before income taxes and equity method earnings $ 188.2 $ 240.5 $ 757.3 $ 618.7

2 unchanged sentences

Effective tax rate (a) 22.8 % 19.4 % 23.1 % 23.0 %

___________________________________________

(a) The effective income tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings.

3 unchanged sentences

Income Taxes Paid

Income taxes paid, net of refunds, were $ 101.1 million and $ 92.1 million during the twenty-six weeks ended November 26, 2023 and November 27, 2022, respectively.

Income taxes paid, net of refunds, were $ 140.4 million and $ 168.5 million during the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

Inventories are valued at the lower of cost (determined using the first-in, first-out method) or net realizable value and include all costs directly associated with manufacturing products:

1 unchanged sentence

The components of inventories were as follows:

(in millions)

(in millions) February 25,

Raw materials and packaging $ 265.2 $ 145.7

1 unchanged sentence

Supplies and other 89.5 78.0

Inventories $ 1,210.0 $ 932.0

PROPERTY, PLANT AND EQUIPMENT

The components of property, plant and equipment were as follows:

(in millions)

(in millions) February 25,

Land and land improvements $ 168.7 $ 163.2

5 unchanged sentences

Property, plant and equipment, net $ 3,406.4 $ 2,808.0

Depreciation expense was $ 66.5 million and $ 49.7 million for the thirteen weeks ended November 26, 2023 and November 27, 2022, respectively;

and $ 132.4 million and $ 97.0 million for the twenty-six weeks ended November 26, 2023 and November 27, 2022, respectively.

At November 26, 2023 and May 28, 2023, purchases of property, plant and equipment included in accounts payable were $ 188.7 million and $ 82.6 million, respectively.

Interest capitalized within construction in progress for the thirteen weeks ended November 26, 2023 and November 27, 2022, was $ 13.0 million and $ 4.1 million, respectively;

and $ 23.5 million and $ 6.1 million for the twenty-six weeks ended November 26, 2023 and November 27, 2022, respectively.

Depreciation expense was $ 70.8 million and $ 48.8 million for the thirteen weeks ended February 25, 2024 and February 26, 2023, respectively;

and $ 203.2 million and $ 145.8 million for the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

At February 25, 2024 and May 28, 2023, purchases of property, plant and equipment included in accounts payable were $ 156.9 million and $ 82.6 million, respectively.

Interest capitalized within construction in progress for the thirteen weeks ended February 25, 2024 and February 26, 2023, was $ 13.8 million and $ 5.8 million, respectively;

and $ 37.3 million and $ 11.9 million for the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The following table presents changes in goodwill balances, by segment, for the twenty-six weeks ended November 26, 2023:

(in millions)

North America

International

The following table presents changes in goodwill balances, by segment, for the thirty-nine weeks ended February 25, 2024:

(in millions) North America International Total

Balance at May 28, 2023 (a) $ 722.4 $ 318.3 $ 1,040.7

Acquisition — 8.5 8.5

Foreign currency translation adjustment 4.2 3.2 7.4

Balance at November 26, 2023

Balance at February 25, 2024 $ 726.6 $ 330.0 $ 1,056.6

___________________________________________

(a) As a result of our change in segments, effective May 29, 2023, goodwill was reassigned to the North America and International segments based on relative fair value using a market-based approach.

2 unchanged sentences

Other identifiable intangible assets were as follows:

November 26, 2023

(in millions, except useful lives)

Non-amortizing intangible assets (a)

February 25, 2024 May 28, 2023

(in millions, except useful lives) Weighted

(in years) Gross

Amount Accumulated

Amortization Intangible

Assets, Net Weighted

(in years) Gross

Amount Accumulated

Amortization Intangible

Non-amortizing intangible assets (a) n/a $ 18.0 $ — $ 18.0 n/a $ 18.0 $ — $ 18.0

Amortizing intangible assets (b) 13 123.2 ( 34.8 ) 88.4 14 121.4 ( 29.2 ) 92.2

$ 141.2 $ ( 34.8 ) $ 106.4 $ 139.4 $ ( 29.2 ) $ 110.2

___________________________________________

(a) Non-amortizing intangible assets represent brands and trademarks.

(b) Amortizing intangible assets are principally composed of licensing agreements, brands, and customer relationships.

Amortization expense, including developed technology amortization expense, was $ 2.6 million and $ 1.5 million for the thirteen weeks ended November 26, 2023 and November 27, 2022, respectively;

and $ 5.3 million and $ 2.9 million for the twenty-six weeks ended November 26, 2023 and November 27, 2022, respectively.

Amortization expense, including developed technology amortization expense, was $ 7.1 million and $ 1.4 million for the thirteen weeks ended February 25, 2024 and February 26, 2023, respectively;

and $ 12.4 million and $ 4.3 million for the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

Foreign intangible assets are affected by foreign currency translation.

The components of other assets were as follows:

(in millions)

(in millions) February 25,

Capitalized software costs $ 232.3 $ 175.4

1 unchanged sentence

Equity method investments 49.2 43.5

Other 41.7 38.2

Other assets $ 381.3 $ 287.6

ACCRUED LIABILITIES

The components of accrued liabilities were as follows:

(in millions)

(in millions) February 25,

Compensation and benefits $ 102.8 $ 187.5

Accrued trade promotions 67.1 86.1

Derivative liabilities and payables 52.4 53.9

Dividends payable to shareholders 52.0 40.8

Taxes payable 39.6 21.2

Accrued interest

Current portion of operating lease obligations 28.2 28.5

Derivative liabilities and payables

Plant utilities and accruals 21.8 27.2

Accrued interest 20.7 31.1

Other 69.8 33.5

Accrued liabilities $ 454.4 $ 509.8

1 unchanged sentence

The components of our debt, including financing obligations, were as follows:

(in millions)

November 26, 2023

Interest Rate

(in millions) February 25, 2024 May 28, 2023

Amount Interest Rate Amount Interest Rate

Short-term borrowings:

1 unchanged sentence

Euro revolving credit facility 113.6 4.772 149.2 4.230

Other credit facilities

Other credit facilities 22.2 (a) 11.4 (a)

Long-term debt:

5 unchanged sentences

4.875 % senior notes, due May 2028

500.0 4.875 500.0 4.875

4.125 % senior notes, due January 2030

970.0 4.125 970.0 4.125

4.375 % senior notes, due January 2032

700.0 4.375 700.0 4.375

3,328.0 3,319.2

Financing obligations:

5 unchanged sentences

Long-term debt and financing obligations, excluding current portion $ 3,175.1 $ 3,248.4

(a) Other credit facilities consist of several short-term facilities at one of our subsidiaries used for working capital needs and have various interest rates.

(b) The interest rates on the Term A-1, A-2, and A-3 loans do not include anticipated patronage dividends.

___________________________________________

(a) Other credit facilities consist of several short-term facilities at one of our subsidiaries used for working capital purposes and have various interest rates.

(b) The interest rates applicable to the Term A-1, A-2, and A-3 loans do not include anticipated patronage dividends.

We have received and expect to continue receiving patronage dividends under all three term loan facilities.

(c) Excludes debt issuance costs of $ 2.1 million and $ 2.5 million as of November 26, 2023 and May 28, 2023, respectively, related to our U.S.

(c) Excludes debt issuance costs of $ 1.9 million and $ 2.5 million as of February 25, 2024 and May 28, 2023, respectively, related to our U.S.

revolving credit facility, which are recorded in “Other assets” on our Consolidated Balance Sheets.

As of November 26, 2023, we had $ 175.0 million of borrowings outstanding under our U.S.

revolving credit facility and $ 819.6 million of availability under the facility, which is net of outstanding letters of credit of $ 5.4 million.

For the twenty-six weeks ended November 26, 2023 and November 27, 2022, we paid $ 89.4 million and $ 76.6 million of interest on debt, respectively.

As of February 25, 2024, we had $ 908.8 million of available liquidity under our committed revolving credit facilities in the U.S.

For the thirty-nine weeks ended February 25, 2024 and February 26, 2023, we paid $ 151.3 million and $ 120.6 million of interest on debt, respectively.

For more information about our debt and financing obligations, interest rates, and debt covenants, see Note 8, Debt and Financing Obligations, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

3 unchanged sentences

The following table presents our financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall:

As of November 26, 2023

(in millions)

As of February 25, 2024

(in millions) Level 1 Level 2 Level 3 Fair Value

(Liabilities)

4 unchanged sentences

As of May 28, 2023

(in millions)

(in millions) Level 1 Level 2 Level 3 Fair Value

(Liabilities)

3 unchanged sentences

Fair value, net $ — $ ( 66.2 ) $ — $ ( 66.2 )

___________________________________________

(a) Derivative assets and liabilities included in Level 2 primarily represent commodity swaps, option contracts, interest rate swaps and currency contracts.

4 unchanged sentences

Deferred compensation liabilities are primarily presented within “Other noncurrent liabilities” on our Consolidated Balance Sheets.

As of November 26, 2023, we had $ 2,170.0 million of fixed-rate and $ 1,448.5 million of variable-rate debt outstanding.

Based on current market rates, the fair value of our fixed-rate debt was estimated to be $ 1,946.8 million.

As of February 25, 2024, we had $ 2,170.0 million of fixed-rate and $ 1,698.8 million of variable-rate debt outstanding.

Based on current market rates, the fair value of our fixed-rate debt was estimated to be $ 1,995.9 million as of February 25, 2024.

Any differences between the book value and fair value are due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt.

The fair value of our variable-rate term debt approximates the carrying amount as our cost of borrowing is variable and approximates current market prices.

The fair value of our variable-rate term debt approximates the carrying amount and approximates current market prices.

STOCKHOLDERS’ EQUITY

Share Repurchase Program

On October 11, 2023, we announced that our Board of Directors increased our share repurchase authorization to an aggregate amount of $ 500.0 million, including approximately $ 124.0 million of remaining unused capacity under the Board’s previous share repurchase authorization.

On October 11, 2023, we announced that our Board of Directors increased our share repurchase authorization to an aggregate amount of $ 500.0 million.

The program has no expiration date.

During the thirteen weeks ended November 26, 2023, we repurchased 571,986 shares for an aggregate purchase price of $ 50.0 million, or a weighted-average price of $ 87.41 per share.

During the twenty-six weeks ended November 26, 2023, we repurchased 1,564,351 shares for an aggregate purchase price of $ 150.0 million, or a weighted-average price of $ 95.89 per share.

As of November 26, 2023, $ 450.0 million remained authorized for repurchase under the program.

During the twenty-six weeks ended November 26, 2023, we paid $ 81.6 million of cash dividends to our common stockholders.

In addition, on December 1, 2023, we paid $ 40.4 million of cash dividends to common stockholders of record as of the close of business on November 3, 2023.

On December 14, 2023 , our Board of Directors declared a cash dividend of $ 0.36 per share of our common stock.

This dividend will be paid on March 1, 2024 , to common stockholders of record as of the close of business on February 2, 2024 .

During the thirteen weeks ended February 25, 2024, we did not repurchase any shares under the program.

During the thirty-nine weeks ended February 25, 2024, we repurchased 1,564,351 shares for an aggregate purchase price of $ 150.0 million, or a weighted-average price of $ 95.89 per share.

As of February 25, 2024, $ 450.0 million remained authorized for repurchase under the program.

During the thirty-nine weeks ended February 25, 2024, we paid $ 122.0 million of cash dividends to our common stockholders.

In addition, on March 1, 2024, we paid $ 52.0 million of cash dividends to common stockholders of record as of the close of business on February 2, 2024.

On March 20, 2024, our Board of Directors declared a cash dividend of $ 0.36 per share of our common stock.

This dividend will be paid on May 31, 2024, to common stockholders of record as of the close of business on May 3, 2024.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of taxes, as of November 26, 2023 were as follows:

Changes in accumulated other comprehensive income (loss), net of taxes, as of February 25, 2024 were as follows:

(in millions) Foreign

Gain (Loss) Pension and

Post-Retirement

Benefits Other Accumulated

Comprehensive

(in millions)

Income (Loss)

2 unchanged sentences

Net current-period other comprehensive income 14.0 ( 0.4 ) ( 0.3 ) 13.3

Balance as of November 26, 2023

Balance as of February 25, 2024 $ ( 13.1 ) $ ( 1.1 ) $ 0.7 $ ( 13.5 )

Effective May 29, 2023, to align with our expanded global footprint following the completion of our acquisition of the remaining 50 % equity interest in Lamb-Weston/Meijer v.o.f., our former European joint venture (“LW EMEA”), management, including our chief executive officer (who is our chief operating decision maker), began managing operations in two business segments based on management’s change to the way it monitors performance, aligns strategies, and allocates resources.

3 unchanged sentences

These reportable segments are each managed by a general manager and supported by a cross functional team assigned to support the segment.

Thirteen Weeks Ended

Twenty-Six Weeks Ended

(in millions)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in millions) February 25, 2024 (a) February 26,

2023 February 25, 2024 (a) February 26,

Segment net sales

North America $ 947.5 $ 1,070.8 $ 3,250.0 $ 3,088.9

International (a)

Thirteen Weeks Ended November 26, 2023

International (b) 510.8 182.8 1,605.7 566.8

$ 1,458.3 $ 1,253.6 $ 4,855.7 $ 3,655.7

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in millions) February 25, 2024 (a)(d) February 26,

2023 February 25, 2024 (a)(d) February 26,

Segment Adjusted EBITDA

North America $ 285.9 $ 333.0 $ 986.6 $ 864.4

International (a)

Unallocated Corporate Costs (b)

Total Company

Adjusted EBITDA (c)

International (b) 101.7 54.1 291.5 147.4

Total Reportable Segments Adjusted EBITDA 387.6 387.1 1,278.1 1,011.8

Unallocated corporate costs (c) ( 44.0 ) ( 34.9 ) ( 144.7 ) ( 96.1 )

Depreciation and amortization (e) 80.0 59.5 222.0 176.9

Unrealized derivative losses 27.3 5.1 1.6 8.7

Foreign currency exchange gains

Items impacting comparability:

Inventory step-up from acquisition

Integration and acquisition-related items, net

Depreciation and amortization (d)

Income (loss) from operations including equity method investment earnings

Interest expense, net

Income tax expense

Thirteen Weeks Ended November 27, 2022

Adjusted EBITDA

Unrealized derivative gains

Foreign currency exchange losses

Unconsolidated joint venture unrealized derivative losses — 47.1 — 32.7

Item impacting comparability:

Integration and acquisition-related items, net

Depreciation and amortization (d)

Income (loss) from operations including equity method investment earnings

Interest expense, net

Income tax expense

Twenty-Six Weeks Ended November 26, 2023

North America

International (a)

Unallocated Corporate Costs (b)

Total Company

Adjusted EBITDA (c)

Unrealized derivative gains

Foreign currency exchange gains

Items impacting comparability:

Inventory step-up from acquisition

Integration and acquisition-related items, net

Depreciation and amortization (d)

Income (loss) from operations including equity method investment earnings

Interest expense, net

Income tax expense

Twenty-Six Weeks Ended November 27, 2022

Adjusted EBITDA

Unrealized derivative losses

Foreign currency exchange losses 9.0 1.8 7.3 4.2

Unconsolidated joint venture unrealized derivative gains

Items impacting comparability:

Inventory step-up from acquisition — — 20.7 —

Integration and acquisition-related items, net 2.4 ( 4.3 ) 11.2 ( 30.8 )

Gain on acquisition of interest in joint ventures (e)

Depreciation and amortization (d)

Income (loss) from operations including equity method investment earnings

Gain on acquisition of interest in joint ventures (f) — — — ( 15.1 )

Interest expense, net 35.7 25.8 95.5 76.4

Income before income taxes 189.2 217.2 775.1 662.7

Income tax expense 43.1 42.1 179.3 152.6

(a) We acquired the remaining interest in LW EMEA in the fourth quarter of fiscal 2023.

Accordingly, LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and twenty-six weeks ended November 26, 2023, whereas in the same period in the prior year, our 50 % equity interest in LW EMEA was recorded using equity method accounting.

As a result, only 50 % of LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and twenty-six weeks ended November 27, 2022.

(b) Unallocated corporate costs included costs related to corporate support staff and support services, foreign exchange gains and losses and unrealized mark-to-market derivative gains and losses.

Net income $ 146.1 $ 175.1 $ 595.8 $ 510.1

___________________________________________

(a) During the thirteen and thirty-nine weeks ended February 25, 2024, we transitioned certain central systems and functions, including order to cash, produce to deliver, source to pay, and inventory management, among others in North America, to a new enterprise resource planning system.

After the transition, we experienced reduced visibility into finished goods inventories at our distribution centers, resulting in a higher-than-expected effect on customer order fulfillment rates.

By the end of the quarter, we restored the visibility into our finished goods inventories and customer order fulfillment rates to pre-transition levels.

(b) We acquired the remaining interest in LW EMEA in the fourth quarter of fiscal 2023.

Accordingly, LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and thirty-nine weeks ended February 25, 2024, whereas in the same period in the prior year, our 50 % equity interest in LW EMEA was recorded using equity method accounting.

As a result, only 50 % of LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and thirty-nine weeks ended February 26, 2023.

(c) Unallocated corporate costs included costs related to corporate support staff and support services, foreign exchange gains and losses and unrealized mark-to-market derivative gains and losses.

Support services include, but are not limited to, our administrative, information technology, human resources, finance, and accounting functions that are not specifically allocated to the segments.

Unallocated corporate costs for the thirteen and twenty-six weeks ended November 26, 2023 included unallocated corporate costs of LW EMEA, whereas in the same period in the prior year, our portion of LW EMEA’s unallocated corporate costs were recorded in “Equity method investment earnings” in the Consolidated Statements of Earnings in the International segment.

(c) The thirteen and twenty-six weeks ended November 26, 2023 included a $ 70.9 million charge ( $ 53.9 million after-tax, or $ 0.37 per share) related to a write-off of excess raw potatoes.

Unallocated corporate costs for the thirteen and thirty-nine weeks ended February 25, 2024 included unallocated corporate costs of LW EMEA, whereas in the same period in the prior year, our portion of LW EMEA’s unallocated corporate costs were recorded in “Equity method investment earnings” in the Consolidated Statements of Earnings in the International segment.

(d) The thirteen weeks ended February 25, 2024 included a $ 25.0 million charge ($ 19.0 million after-tax, or $ 0.13 per share) related to a write-off of excess raw potatoes.

The total charge to the reporting segments was as follows:

$ 22.7 million to the North America segment and $ 2.3 million to the International segment.

(d) Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of $ 2.1 million and $ 8.6 million for the thirteen weeks ended November 26, 2023 and November 27, 2022, respectively;

and $ 4.3 million and $ 17.6 million for the twenty-six weeks ended November 26, 2023 and November 27, 2022, respectively.

(e) The twenty-six weeks ended November 27, 2022 included a $ 15.1 million (before and after-tax) gain recognized in connection with our acquisition of an additional 40 % equity interest in Lamb Weston Alimentos Modernos S.A.

The thirty-nine weeks ended February 25, 2024 included a $ 95.9 million charge ($ 72.9 million after-tax, or $ 0.50 per share) related to a write-off of excess raw potatoes.

The total charge to the reporting segments was as follows:

$ 86.0 million to the North America segment and $ 9.9 million to the International segment.

(e) Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of $ 2.1 million and $ 9.3 million for the thirteen weeks ended February 25, 2024 and February 26, 2023, respectively;

and $ 6.4 million and $ 26.9 million for the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

(f) The thirty-nine weeks ended February 26, 2023 included a $ 15.1 million (before and after-tax) gain recognized in connection with our acquisition of an additional 40 % equity interest in Lamb Weston Alimentos Modernos S.A.

(“LWAMSA”) in July 2022.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements