What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-07-24 compared with 2023-07-25 · 460 added, 346 removed, 677 unchanged (54% of the section changed)

31 unchanged sentences

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition date fair value of the previously held equity interest in Lamb Weston EMEA

As described in Note 3 to the consolidated financial statements, on February 28, 2023, the Company acquired the remaining 50% interest in Lamb Weston EMEA, increasing the Company’s ownership interest to 100%.

As a result of the transaction, the Company remeasured its previously held equity interest at the acquisition date fair value of $634.4 million and recognized a gain of $410.7 million, which is included in equity method investment earnings (loss) in the consolidated statement of earnings.

The Company determined the estimated fair value of its previously held equity interest using the market approach, which included a control premium assumption.

We identified the evaluation of the acquisition date fair value of the previously held equity interest in Lamb Weston EMEA as a critical audit matter.

Specifically, challenging auditor judgment was required to evaluate the control premium used to determine the acquisition date fair value.

Additionally, specialized skills and knowledge were required to evaluate the relevance of comparable transactions in a similar industry.

Sufficiency of audit evidence over the finished goods inventory held at third-party warehouse locations

As discussed in Note 1 to the consolidated financial statements, the Company has recognized finished goods inventory of $867.9 million as of May 26, 2024, the majority of which is held at third-party warehouse locations.

The tracking of the existence and completeness of finished goods inventory quantities held at third-party warehouse locations is reliant upon manual processes and automated processes within the Company’s enterprise resource planning system.

We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of finished goods inventory held at third-party warehouse locations as a critical audit matter.

Challenging auditor judgment was required to determine the nature and extent of procedures to be performed over the quantity of finished goods inventory held at third-party warehouse locations, including the determination of third-party warehouse locations at which to observe

physical inventory counts and the need to involve information technology (IT) professionals with specialized skills and knowledge to assess the IT system involved.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control over the Company’s determination and selection of the control premium.

We performed a sensitivity analysis over the control premium assumption to assess the impact of changes to that assumption on the Company’s determination of fair value.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating:

• the relevance of comparable transactions, including the industry and time period of the identified transactions

• the control premium by comparing it to relevant publicly available data for comparable transactions.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the quantities of finished goods inventory held at third-party warehouse locations by evaluating:

• homogeneity of the locations

• historical results of physical counts of inventory

• inventory quantities by location.

We evaluated the design and tested the operating effectiveness of certain internal controls within the Company’s inventory process, including controls over finished goods inventory quantities held at third-party warehouse locations.

We involved IT professionals with specialized skills and knowledge, who assisted in testing certain general IT and application controls related to the Company’s process of recording finished goods inventory quantities held at third-party warehouse locations.

We tested the existence and completeness of finished goods inventory by observing a sample of physical inventory counts during the year.

We also obtained external confirmation of inventory quantities held at certain third-party warehouse locations for a sample of locations.

In addition, we evaluated the overall sufficiency of audit evidence obtained over finished goods inventory quantities held at third-party warehouse locations by assessing the results of procedures performed including the appropriateness of such evidence.

We have served as the Company’s auditor since 2016.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 26, 2024 and May 28, 2023, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended May 26, 2024, and the related notes and consolidated financial statement schedule (collectively, the consolidated financial statements), and our report dated July 24, 2024 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired the remaining interest in Lamb-Weston/Meijer v.o.f.

(Lamb Weston EMEA), its joint venture in Europe, during the year ended May 28, 2023, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of May 28, 2023, Lamb Weston EMEA’s internal control over financial reporting associated with 30% of total assets and 7% of total net sales included in the consolidated financial statements of the Company as of and for the year ended May 28, 2023.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Lamb Weston EMEA.

Basis for Opinion

21 unchanged sentences

For the Fiscal Years Ended May

2024 2023 2022

Net sales $ 6,467.6 $ 5,350.6 $ 4,098.9

Cost of sales 4,700.9 3,918.5 3,266.9

Gross profit 1,766.7 1,432.1 832.0

Selling, general and administrative expenses 701.4 550.0 387.6

4 unchanged sentences

Equity method investment earnings (loss) 26.0 460.6 ( 10.7 )

Net income $ 725.5 $ 1,008.9 $ 200.9

Earnings per share:

Basic $ 5.01 $ 6.98 $ 1.38

Diluted $ 4.98 $ 6.95 $ 1.38

Weighted average common shares outstanding:

Basic 144.9 144.5 145.5

Diluted 145.6 145.2 145.9

See Notes to Consolidated Financial Statements.

3 unchanged sentences

For the Fiscal Years Ended May

2024 2023 2022

Benefit After-Tax

Amount Pre-Tax

Benefit After-Tax

Amount Pre-Tax

Benefit After-Tax

Net income $ 955.5 $ ( 230.0 ) $ 725.5 $ 1,233.5 $ ( 224.6 ) $ 1,008.9 $ 272.7 $ ( 71.8 ) $ 200.9

Other comprehensive income (loss):

1 unchanged sentence

Unrealized currency translation gains (losses) 19.3 ( 0.4 ) 18.9 ( 16.6 ) 2.4 ( 14.2 ) ( 51.0 ) 2.1 ( 48.9 )

Other ( 0.5 ) 0.1 ( 0.4 ) 0.5 ( 0.1 ) 0.4 1.2 ( 0.3 ) 0.9

Comprehensive income $ 968.4 $ ( 229.0 ) $ 739.4 $ 1,220.8 $ ( 223.1 ) $ 997.7 $ 226.6 $ ( 70.8 ) $ 155.8

6 unchanged sentences

Receivables, less allowance for doubtful accounts of $ 0.9 and $ 2.6

Inventories 1,138.6 932.0

Prepaid expenses and other current assets 136.4 166.2

2 unchanged sentences

Operating lease assets 133.0 146.1

Equity method investments

Goodwill 1,059.9 1,040.7

Intangible assets, net 104.9 110.2

Other assets 396.4 287.6

Total assets $ 7,367.0 $ 6,519.8

LIABILITIES AND STOCKHOLDERS’ EQUITY

15 unchanged sentences

Treasury stock, at cost, 7,068,741 and 4,627,828 common shares

( 540.9 ) ( 314.3 )

Additional distributed capital ( 508.9 ) ( 558.6 )

6 unchanged sentences

Consolidated Statements of Stockholders’ Equity

(dollars in millions, except share data)

(dollars in millions, except share and per share data)

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 30, 2021 146,191,864 $ 147.6 $ ( 104.3 ) $ ( 836.8 ) $ 1,244.6 $ 29.5 $ 480.6

Dividends declared, $ 0.96 per share

— — — — ( 139.3 ) — ( 139.3 )

Common stock issued 404,952 0.4 — 1.5 — — 1.9

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 2,525,388 ) — ( 159.8 ) — — — ( 159.8 )

Other — — — 0.7 ( 0.7 ) — —

Comprehensive income — — — — 200.9 ( 45.1 ) 155.8

1 unchanged sentence

Dividends declared, $ 1.05 per share

— — — — ( 151.6 ) — ( 151.6 )

Common stock issued 2,247,927 2.3 — 196.7 — — 199.0

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 653,672 ) — ( 50.2 ) — — — ( 50.2 )

( 2,525,388 )

Other — — — 19.5 ( 2.1 ) — 17.4

Comprehensive income — — — — 1,008.9 ( 11.2 ) 997.7

1 unchanged sentence

Dividends declared, $ 1.28 per share

— — — — ( 184.9 ) — ( 184.9 )

Common stock issued 441,886 0.4 — 0.3 — — 0.7

1 unchanged sentence

Repurchase of common stock and common stock withheld to cover taxes ( 2,440,913 ) — ( 225.3 ) — — — ( 225.3 )

Other — — ( 1.3 ) 2.6 ( 1.5 ) — ( 0.2 )

Comprehensive income — — — — 725.5 13.9 739.4

5 unchanged sentences

For the Fiscal Years Ended May

2024 2023 2022

Cash flows from operating activities

Net income $ 725.5 $ 1,008.9 $ 200.9

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

6 unchanged sentences

Foreign currency remeasurement (gain) loss ( 0.1 ) ( 21.7 ) 0.5

Other 7.0 23.9 ( 7.0 )

Changes in operating assets and liabilities, net of acquisitions:

Receivables ( 15.1 ) ( 53.6 ) ( 76.3 )

Inventories ( 203.3 ) ( 125.1 ) ( 63.0 )

Income taxes payable/receivable, net 20.1 ( 12.3 ) 11.6

7 unchanged sentences

Acquisition of interests in joint ventures, net — ( 610.4 ) —

Acquisition of business, net of cash acquired ( 10.5 ) — —

Other 18.2 5.5 ( 4.1 )

Net cash used for investing activities $ ( 984.1 ) $ ( 1,340.9 ) $ ( 310.5 )

5 unchanged sentences

Payments of senior notes call premium — — ( 39.6 )

Proceeds (repayments) of short-term borrowings, net

Net cash provided by (used for) financing activities

Proceeds of short-term borrowings, net 164.9 41.4 —

Other ( 4.5 ) 0.2 ( 5.0 )

Net cash (used for) provided by financing activities $ ( 48.0 ) $ 340.8 $ ( 363.4 )

Effect of exchange rate changes on cash and cash equivalents 0.5 18.2 ( 3.2 )

7 unchanged sentences

(“we,” “us,” “our,” the “Company,” or “Lamb Weston”) is a leading global producer, distributor, and marketer of value-added frozen potato products and is headquartered in Eagle, Idaho.

We have four reportable segments:

Global, Foodservice, Retail, and Other.

We have two reportable segments:

North America and International.

Basis of Presentation

5 unchanged sentences

Intercompany investments, accounts, and transactions have been eliminated.

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

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

The equity method of accounting is applied for investments when the Company has significant influence over the investee’s operations, or when the investee is structured with separate capital accounts and our investment is considered more than minor.

2 unchanged sentences

The preparation of the Consolidated Financial Statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes.

On an ongoing basis, we evaluate our estimates, including but not limited to those related to the measurement of assets acquired and the liabilities assumed based on fair value at the acquisition date, provisions for income taxes, estimates of sales incentives and trade promotion allowances.

On an ongoing basis, we evaluate our estimates, including but not limited to those related to the measurement of assets acquired and the liabilities assumed based on the fair value at the acquisition date, provisions for income taxes, estimates of sales incentives and trade promotion allowances.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

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This is because once a customized product is manufactured pursuant to a purchase order, we have an enforceable right to payment for that product.

Our Global segment sells the majority of our customized products, for which revenue is recognized when a purchase order is received to the extent the product has been manufactured, as opposed to sales of non-customized products, for which revenue is generally recognized upon shipment.

As a result, the timing of the receipt of a purchase order may create quarterly fluctuations in this segment.

Conversely, for non-customized products, revenue is generally recognized upon shipment.

As a result, the timing of the receipt of a purchase order may create quarterly fluctuations.

The nature of our contracts varies based on the business, customer type, and region;

however, in all instances it is our customary business practice to receive a valid order from the customer, in which each party’s rights and related payment terms are clearly identifiable.

Our payment terms are consistent with industry standards and generally include

early pay discounts.

Our payment terms are consistent with industry standards and generally include early pay discounts.

Amounts billed and due from customers are short-term in nature and are classified as receivables, since payments are unconditional and only the passage of time is required before payments are due.

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However, customers may seek to return defective or non-conforming products.

Following a customer return, we may offer remedies, including cash refunds, credit towards future purchases, or product replacement.

Following a customer return, we may offer

remedies, including cash refunds, credit towards future purchases, or product replacement.

As a result, customers’ right of return and related refund or product liabilities are estimated and recorded as reductions in revenue.

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Pension and Post-Retirement Benefits

employees covered by collective bargaining agreements are covered by defined benefit pension plans.

We make pension plan contributions that are sufficient to fund our actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended.

employees are covered by a defined benefit pension plan which is now frozen for all participants.

We make pension plan contributions that are sufficient to fund our actuarial determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended.

From time to time, we may make discretionary contributions based on the funded status of the plans, tax deductibility, income from operations, and other factors.

In fiscal 2023 and 2022, we made $ 2.0 million of discretionary contributions to our qualified plan.

There are no minimum required contributions in fiscal 2024, however, in July 2023, we made a $ 2.5 million discretionary contribution to our qualified pension plan.

In fiscal 2024 and 2023, we made $ 6.1 million and $ 2.0 million of contributions to our qualified plan.

We expect to make minimum required contributions in fiscal 2025 of $ 2.3 million to our qualified pension plan.

We also have a nonqualified defined benefit pension plan that provides unfunded supplemental retirement benefits to certain U.S.

4 unchanged sentences

The funded status of our plans are based on company contributions, benefit payments, the plan asset investment return, the discount rate used to measure the liability, and expected participant longevity.

The benefit obligations of the plans exceeded the assets by $ 9.3 million and $ 11.0 million for the pension plan and $ 4.3 million and $ 5.5 million for the other post-retirement benefit plan for the years ended May 28, 2023 and May 29, 2022, respectively.

The benefit obligations of the plans exceeded the assets by $ 10.0 million and $ 9.3 million for the pension plan and $ 3.8 million and

$ 4.3 million for the other post-retirement benefit plan for the years ended May 26, 2024 and May 28, 2023, respectively.

We recognize the unfunded status of these plans in “Other noncurrent liabilities” on the Consolidated Balance Sheets, and we recognize changes in funded status in the year changes occur through the Consolidated Statements of Comprehensive Income.

6 unchanged sentences

The Plan’s matching contributions have a five-year graded vesting with 20 % vesting each year.

We made employer-matching contributions of $ 38.7 million, $ 30.5 million, and $ 28.8 million in fiscal 2023, 2022, and 2021, respectively.

We made employer contributions of $ 48.1 million, $ 38.7 million, and $ 30.5 million in fiscal 2024, 2023, and 2022 , respectively.

We sponsor a non-qualified deferred compensation savings plan that permits eligible U.S.

19 unchanged sentences

Inventories are reduced to net realizable value after consideration of excess, obsolete, and unsaleable inventories based on quantities on hand and estimated future usage and sales.

The majority of our finished goods inventories are held at third-party warehouses not owned or leased by the Company.

The components of inventories were as follows:

(in millions)

(in millions) May 26,

Raw materials and packaging $ 178.7 $ 145.7

1 unchanged sentence

Supplies and other 92.0 78.0

Inventories $ 1,138.6 $ 932.0

Leased Assets

1 unchanged sentence

Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of the lease payments over the lease term.

Our leases may include options to extend or terminate these leases.

These options to extend are included in the lease term when it is reasonably certain that we will exercise that option.

Our leases may include options to extend or terminate.

Options to extend are included in the lease term when it is reasonably certain that we will exercise the option.

Some leases have variable payments, however, because they are not based on an index or rate, they are not included in lease assets and liabilities.

2 unchanged sentences

As the implicit rate is not readily determinable for most of our leases, we use an incremental borrowing rate to determine the initial present value of lease payments over the lease terms on a collateralized basis over a similar term, which is based on market and company specific information.

This rate is updated quarterly for measurement of new lease liabilities.

Assets and liabilities related to leases having a lease term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the term of the lease.

9 unchanged sentences

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

(in millions)

(in millions) May 26,

Land and land improvements $ 186.2 $ 163.2

6 unchanged sentences

Depreciation is computed on a straight-line basis over the estimated useful lives of the respective classes of assets as follows:

Land improvements

10 - 40 years

Machinery and equipment

Furniture, fixtures, office equipment, and other

Land improvements 1 - 30 years

Buildings 10 - 40 years

Machinery and equipment 5 - 20 years

Furniture, fixtures, office equipment, and other 3 - 15 years

We recorded $ 278.2 million, $ 211.3 million, and $ 181.5 million of depreciation expense in fiscal 2024, 2023, and 2022, respectively.

Below is a breakout between Cost of sales (“COS”) and Selling, general and administrative expenses (“SG&A”) for depreciation and amortization:

(in millions) May 26,

Depreciation - COS $ 266.1 $ 202.2 $ 174.1

Depreciation - SG&A 12.1 9.1 7.4

$ 278.2 $ 211.3 $ 181.5

Amortization - COS $ 1.0 $ 1.0 $ 1.0

Amortization - SG&A 18.6 6.0 4.8

$ 19.6 $ 7.0 $ 5.8

At May 26, 2024 and May 28, 2023, purchases of property, plant and equipment included in accounts payable were $ 292.0 million and $ 138.3 million, respectively.

4 unchanged sentences

We perform an annual impairment assessment of goodwill at the reporting unit level in the fourth quarter of each year, or more frequently if indicators of potential impairment exist.

We have an option to evaluate goodwill for impairment by first performing a qualitative assessment of events and circumstances to determine whether it is more likely than not that the fair value of a reporting until is less than its carrying amount.

If we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amounts, then a quantitative goodwill impairment test is not required to be performed.

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Gains and losses resulting from the translation of Consolidated Balance Sheets are recorded as a component of “Accumulated other comprehensive income (loss).”

Foreign currency transactions resulted in a gain of $ 19.7 million, a loss of $ 3.3 million, and a gain of $ 1.3 million in fiscal 2023, 2022, and 2021, respectively.

Foreign currency transactions resulted in a loss of $ 10.6 million, a gain of $ 19.7 million, and a loss of $ 3.3 million in fiscal 2024, 2023, and 2022, respectively.

Fiscal 2023 includes a $ 25.2 million foreign currency transaction gain related to actions taken to mitigate the effect of changes in currency rates on the purchase price of our former European joint venture, Lamb-Weston/Meijer v.o.f.

These amounts were recorded in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings.

9 unchanged sentences

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Recognized income tax positions are measured at the largest amount that is greater than a 50% likelihood of being realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

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New and Recently Issued Accounting Pronouncements

There were no accounting pronouncements recently issued that had or are expected to have a material impact on our financial statements.

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

Improvements to Reportable Segment Disclosures .

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, 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 24, 2026, 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.

There were no other accounting pronouncements recently issued that had or are expected to have a material impact on our Consolidated Financial Statements.

EARNINGS PER SHARE

2 unchanged sentences

(in millions, except per share amounts) 2024 2023 2022

Net income $ 725.5 $ 1,008.9 $ 200.9

Basic weighted average common shares outstanding 144.9 144.5 145.5

2 unchanged sentences

Earnings per share:

(a) Potential dilutive shares of common stock from 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 May 28, 2023, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

As of May 29, 2022 and May 30, 2021, we did no t have any stock-based awards that were antidilutive .

On July 5, 2022, we acquired an additional 40 % equity interest in Lamb Weston Alimentos Modernos S.A.

(“LWAMSA”), which increased our total equity ownership from 50 % to 90 % , and on February 28, 2023, we purchased the remaining 50 % equity interest in Lamb-Weston/Meijer v.o.f.

(“LW EMEA”), and now own 100 %.

After the acquisitions, we began consolidating the results of operations in our Global segment in our fiscal first and fourth quarters, respectively.

Prior to the acquisitions, the results of each of LWAMSA and LW EMEA were recorded in “Equity method investment earnings (loss).”

We recorded the assets and liabilities of both acquisitions at fair value based on a market approach.

We remeasured our initial equity interests at fair value, after considering control premiums in our industry, which are unobservable inputs, or Level 3, in the fair value hierarchy.

The purchase price allocation for LWAMSA is complete while the LW EMEA purchase price allocation is preliminary.

We estimated the provisional fair value of the assets acquired and liabilities assumed of LW EMEA and its subsidiaries as of the acquisition date.

These provisional amounts could change as additional information becomes available for contingent consideration;

property, plant and equipment;

intangible assets;

and residual goodwill while appraisal reports are finalized .

Fiscal 2023 net income included $ 371.7 million of after-tax ( $ 420.6 million before tax) net gains related to the acquisitions, as follows:

$ 379.5 million after-tax ( $ 425.8 million before tax) non-cash gain recorded in “Equity method investment earnings.”

$ 20.0 million of after-tax ( $ 27.0 million before tax) costs related to the step-up and sale of inventory recorded in “Cost of sales.”

$ 12.2 million of after-tax ( $ 21.8 million before tax) net gain from acquisition-related expenses (foreign currency gain related to actions taken to mitigate the effect of changes in currency rates on the purchase price, net of advisory, legal, valuation and other professional or consulting expenses).

The LWAMSA purchase price consisted of $ 42.3 million in cash.

We recorded LWAMSA’s assets and liabilities at fair value, which included remeasuring our initial equity interest at fair value.

The net sales, income from operations, and total assets acquired were not material to our consolidated net sales, income from operations, and total assets for the periods presented in this report, and therefore LWAMSA is not included in our unaudited pro forma information presented below.

As of May 28, 2023, total LWAMSA interest not directly attributable to Lamb Weston was $ 8.2 million and was recorded in “Additional distributed capital” on our Consolidated Balance Sheet.

For the fiscal year ended May 28, 2023, the net income attributable to noncontrolling interest was not significant and was recorded in “Selling, general and administrative expenses” in our Consolidated Statements of Earnings.

The total consideration for our acquisition of the remaining interest in LW EMEA (“the LW EMEA Acquisition”) was $ 1,447.5 million, which consisted of € 531.6 million ($ 564.0 million) in cash, which excluded settlement of pre-existing relationships of $ 32.3 million and cash held by LW EMEA of $ 28.2 million, and 1,952,421 shares of our common stock ($ 197.3 million on the acquisition date).

The total consideration also included $ 634.4 million for the fair value of our initial equity investment and $ 51.8 million of other non-cash consideration (the majority being settlement of preexisting relationships).

We recorded LW EMEA’s assets and liabilities at fair value.

In fiscal 2023, LW EMEA contributed $ 364.0 million of net sales and a $ 13.6 million loss from operations, which included $ 45.7 million of acquisition-related items ($ 27.0 million before tax expenses related to the sale of inventory stepped up in the acquisition and $ 18.7 million of derivative losses , before taxes).

We do not allocate interest expense and taxes to the acquired operations and therefore, the post-acquisition net earnings are not discernible.

As of May 28, 2023, total LW EMEA interest not directly attributable to Lamb Weston was $ 9.1 million and represented LW EMEA’s 75 percent ownership in a production facility in Austria, and was recorded in “Additional distributed capital” on our Consolidated Balance Sheet.

For the fiscal year ended May 28, 2023, the net loss attributable to noncontrolling interest was not significant and was recorded in “Selling, general and administrative expenses” in our Consolidated Statements of Earnings.

We have substantially completed our estimates of fair value of assets acquired and liabilities assumed.

Our estimates are subject to revisions, which may result in adjustments to the preliminary values discussed below.

The total purchase price consideration was allocated to the net assets acquired based upon their respective estimated fair values as follows:

(in millions)

Cash and cash equivalents

Prepaid expenses and other current assets

Property, plant and equipment (a)

Intangible assets (c)

Assets acquired

Accounts payable

Accrued liabilities

Short-term borrowings

Deferred income taxes

Long-term debt

Other non-current liabilities

Liabilities assumed

Net assets acquired

(a) Property, plant and equipment acquired are being depreciated on a straight-line basis over their estimated remaining lives, which range from 1 to 30 years .

(b) Goodwill is calculated as the excess of the purchase price over the fair values of the identifiable net assets acquired and recorded in our Global segment.

The goodwill is primarily attributable to future growth opportunities in Europe, the Middle East, and Africa.

For tax purposes, the acquisition of the remaining LW EMEA interest was treated as a stock acquisition and is not deductible for tax purposes.

For more information, see Note 5, Income Taxes, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

Financial Statements and Supplementary Data” of this Form 10-K.

Based on the carrying value of these finite-lived assets as of May 28, 2023, amortization expense for each of the next five years is estimated to be approximately $ 5.0 million.

The following unaudited pro forma financial information presents the combined results of operations as if we had acquired the remaining interest of LW EMEA on May 31, 2021.

These unaudited pro forma results are included for informational purposes only and do not purport to represent what the combined companies’ results of operations would have been had the acquisition occurred on that date, nor are they necessarily indicative of future results of operations.

They also do not reflect any cost savings, operational synergies, or revenue enhancements that we may achieve or the costs necessary to achieve those cost savings, operational synergies, revenue enhancements, or integration efforts.

For the Fiscal Years Ended May

Unaudited Pro Forma Information (in millions)

Net income (a) (b)

(a) The fiscal 2023 and 2022 unaudited pro forma financial information has been adjusted to give effect to adjustments that are directly related to the acquisition and factually supportable.

These adjustments include, but are not limited to, the application of our accounting policies;

elimination of related party transactions;

depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets;

and interest expense on acquisition-related debt.

(b) The fiscal 2023 unaudited pro forma net income was also adjusted to exclude a $ 410.7 million ( $ 364.4 million after-tax) non-cash gain related to the LW EMEA Acquisition, $ 27.0 million ( $ 20.0 million after-tax) of acquisition inventory step-up expense and a $ 21.8 million ( $ 12.2 million after-tax) gain from acquisition-related expenses (foreign currency gain related to actions taken to mitigate the effect of changes in currency rates on the purchase price, net of advisory, legal, valuation and other professional or consulting expenses).

These items were included in fiscal 2022 unaudited pro forma net income, along with a non-cash impairment charge of $ 62.7 million (before and after-tax) related to LW EMEA’s withdrawal from its joint venture in Russia.

JOINT VENTURE INVESTMENTS

In fiscal 2023, we purchased additional equity interests in LW EMEA and LWAMSA, and began consolidating financial results in our consolidated financial statements.

Prior to acquiring these incremental equity interests, we accounted for these investments under the equity method of accounting.

LW EMEA has a 75 percent ownership interest in a joint venture that owns a production facility in Austria, which is included in our consolidated results.

For more information, see Note 3, Acquisitions.

At May 28, 2023, Lamb-Weston/RDO Frozen (“Lamb Weston RDO”), our joint venture with RDO Frozen Co., was the only equity method potato processing joint venture accounted for under the equity method of accounting.

Our equity method investments were as follows:

(in millions)

Lamb Weston RDO

Summarized combined financial information for our equity method investments was as follows:

For the Fiscal Years Ended May

(in millions)

Income from operations

Net income (loss) (b)

(in millions)

Current assets

Noncurrent assets

Current liabilities

Noncurrent liabilities

(a) The fiscal 2023 financial information includes the financial results for the parts of the fiscal year when LW EMEA and LWAMSA were being accounted for as unconsolidated joint ventures.

(b) In fiscal 2022, LW EMEA recorded a $ 125.4 million charge to write-off its net investment in its former joint venture in Russia, which is included in the fiscal 2022 net loss and the current and noncurrent assets and liabilities.

Our portion of the non-cash impairment charge was $ 62.7 million.

We made the following sales to and purchases from our equity method affiliates, primarily for finished products sold to or purchased from our joint ventures.

We also provided services, such as sales and marketing services, to our joint ventures that are recorded as a reduction to “Selling, general and administrative expenses” in our Consolidated Statements of Earnings.

We also received dividends.

The following table summarizes the activity with all our equity method affiliates:

For the Fiscal Years Ended May

(in millions)

Services provided

Dividends received

(a) The fiscal 2023 financial information includes the financial results for the part of the fiscal year when LW EMEA and LWAMSA were accounted for as unconsolidated joint ventures.

As of May 28, 2023 and May 29, 2022, we had receivables included in “Receivables” on our Consolidated Balance Sheets from our joint ventures of $ 4.5 million and $ 11.0 million, respectively.

Pre-tax income (loss), inclusive of equity method investment earnings, consisted of the following:

Basic $ 5.01 $ 6.98 $ 1.38

Diluted $ 4.98 $ 6.95 $ 1.38

_____________________________________________________

As of May 26, 2024 and May 28, 2023, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

As of May 29, 2022, we did not have any stock-based awards that were antidilutive.

Pre-tax income, inclusive of equity method investment earnings, consisted of the following:

For the Fiscal Years Ended May

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United States $ 807.8 $ 794.2 $ 287.9

147.7 439.3 ( 15.2 )

Total pre-tax income $ 955.5 $ 1,233.5 $ 272.7

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(in millions) 2024 2023 2022

federal $ 140.5 $ 174.1 $ 45.4

State and local 36.1 25.8 9.5

54.8 24.3 3.4

Total current provision for taxes 231.4 224.2 58.3

federal 27.7 ( 12.6 ) 10.0

State and local ( 14.6 ) ( 0.4 ) ( 1.9 )

( 14.5 ) 13.4 5.4

Total deferred provision for taxes $ ( 1.4 ) $ 0.4 $ 13.5

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Write-off of net investment in Russia (c) — — 13.2

Other 0.2 ( 0.1 ) ( 4.4 )

Total income tax expense $ 230.0 $ 224.6 $ 71.8

Effective income tax rate (d) 24.1 % 18.2 % 26.3 %

(a) We derive the effective tax rate benefit attributed to non-U.S.

_____________________________________________________

(a) We derive the effective tax rate detriment or (benefit) attributed to non-U.S.

income taxed at different rates, including the impact of permanent items.

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

The effective tax rate in fiscal 2023 included the tax impact of the remeasurement of our initial 50 % equity interests in LW EMEA and LWAMSA and other acquisition-related items.

The effective tax rate in fiscal 2023 included the tax impact of the remeasurement of our initial 50 % equity interests in LW EMEA and our joint venture in Argentina, Lamb Weston Alimentos Modernos S.A (“LWAMSA”), and other acquisition-related items.

The fiscal 2023 and 2022 tax rates were both affected by mark-to-market adjustments associated with changes in natural gas and electricity derivatives as commodity markets in Europe experienced significant volatility.

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Significant components of our deferred income tax assets and liabilities were as follows:

(in millions)

Property, plant and equipment (a)

Goodwill and other intangible assets (a)

May 26, 2024 May 28, 2023

(in millions) Assets Liabilities Assets Liabilities

Property, plant and equipment $ — $ 322.6 $ — $ 285.1

Goodwill and other intangible assets 17.4 — 12.0 —

Compensation and benefit related liabilities 27.8 — 24.4 —

Net operating loss and credit carryforwards (b)

Net operating loss and credit carryforwards (a) 22.9 — 4.4 —

Accrued expenses and other liabilities 20.1 — 13.5 —

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Equity method investments — 7.1 — 8.3

Valuation allowance (c)

Net deferred taxes (d)

(a) In connection with our acquisition of LW EMEA, deferred tax liabilities increased $ 82.4 million associated with property, plant and equipment and deferred tax assets decreased $ 25.4 million associated with intangible assets.

(b) At May 28, 2023, Lamb Weston had approximately $ 7.2 million of gross ( $ 1.6 million after-tax) non-U.S.

Derivatives 3.1 — 8.8 —

Other 7.9 6.0 8.3 6.9

169.7 364.6 133.2 332.5

Valuation allowance (b) ( 53.1 ) — ( 49.5 ) —

Net deferred taxes (c) $ 116.6 $ 364.6 $ 83.7 $ 332.5

_____________________________________________________

(a) At May 26, 2024, Lamb Weston had approximately $ 38.2 million of gross ($ 10.2 million after-tax) non-U.S.

net operating loss carryforwards, of which $ 3.2 million (after-tax) will expire by fiscal 2030.

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net operating loss carryforwards will not expire.

Lamb Weston also had a non-U.S.

tax credit carryforward of $ 1.6 million, which will expire by fiscal 2033, and a state business credit carryforward of $ 1.2 million, which will expire by fiscal 2036.

Lamb Weston also had a state business credit carryforward of $ 14.6 million ($ 11.5 million net of federal benefit), which will expire by fiscal 2038, and a non-U.S.

tax credit carryforward of $ 1.2 million, which will expire by fiscal 2033.

(b) The valuation allowance is predominantly related to non-amortizable intangibles.

There was no impact on income tax expense related to changes in the valuation allowance, including net operating loss carryforwards, in fiscal 2024, 2023, and 2022.

(d) Deferred tax assets of $ 3.3 million and $ 2.7 million, as of May 28, 2023 and May 29, 2022, respectively, were presented in “Other assets.” Deferred tax liabilities of $ 252.1 million and $ 172.5 million as of May 28, 2023 and May 29, 2022, respectively, were presented in “Deferred income taxes” as "Long-term liabilities"

on the Consolidated Balance Sheets.

(c) Deferred tax assets of $ 8.2 million and $ 3.3 million, as of May 26, 2024 and May 28, 2023, respectively, were presented in “Other assets.” Deferred tax liabilities of $ 256.2 million and $ 252.1 million as of May 26, 2024 and May 28, 2023, respectively, were presented in “Deferred income taxes” as "Long-term liabilities" on the Consolidated Balance Sheets.

The deferred tax asset and liability net position is determined by tax jurisdiction.

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We have elected to recognize the tax on GILTI as a period expense in the period the tax is incurred.

Under this policy, we have not provided deferred taxes on temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period.

Under this policy, we have not provided deferred taxes on temporary differences that upon their reversal would affect the amount of income subject to GILTI in the period.

We have not established deferred income taxes on accumulated undistributed earnings and other basis differences for operations outside the U.S., as such earnings and basis differences are indefinitely reinvested.

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Ending balance (b) $ 79.6 $ 59.6 $ 40.4

(a) In connection with our acquisition of LW EMEA, we recognized $ 8.9 million of gross unrecognized tax benefits with a corresponding increase to goodwill.

_____________________________________________________

(a) In connection with the acquisition of LW EMEA during the year ended May 28, 2023, we recognized $ 8.9 million of gross unrecognized tax benefits with a corresponding increase to goodwill.

(b) If we were to prevail on the unrecognized tax benefits recorded as of May 26, 2024 and May 28, 2023, it would result in a tax benefit of $ 69.0 million and $ 52.2 million, respectively, and a reduction in the effective tax rate.

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Major jurisdictions where we conduct business generally have statutes of limitations ranging from three to five years.

The expiration of statute of limitations could reduce the uncertain tax positions by approximately $ 7 million during the next 12 months.

Statute of limitation expirations could reduce the uncertain tax positions by approximately $ 14 million during the next 12 months.

Although the timing of the resolutions and/or closures of audits is highly uncertain, it is reasonably possible that certain U.S.

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The following table presents changes in goodwill balances, by segment, for fiscal years 2024 and 2023:

(in millions)

Balance at May 30, 2021

Foreign currency translation adjustment

Balance at May 29, 2022

Acquisitions of interests in joint ventures (a)

(in millions) North America International Total

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

Acquisitions — 8.5 8.5

Foreign currency translation adjustment 6.4 4.3 10.7

Balance at May 26, 2024 $ 728.8 $ 331.1 $ 1,059.9

(a) In fiscal 2023, we recorded $ 691.2 million and $ 42.1 million of goodwill related to the acquisition of incremental equity interests of LW EMEA and LWAMSA, respectively, that is no t deductible for tax purposes.

See Note 3, Acquisitions, for more information.

_____________________________________________________

(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.

Before and after the reassignment of our goodwill, we completed impairment assessments and concluded there were no indications of impairment in our segments.

Please refer to Note 13, Segments, and our Current Report on Form 8-K, which we filed with the Securities and Exchange Commission on August 24, 2023 for further information regarding our segment structure.

Other identifiable intangible assets were as follows:

(in millions, except useful lives)

Non-amortizing intangible assets (a)

May 26, 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) 13 123.6 ( 36.7 ) 86.9 14 121.4 ( 29.2 ) 92.2

$ 141.6 $ ( 36.7 ) $ 104.9 $ 139.4 $ ( 29.2 ) $ 110.2

_____________________________________________________

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

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

In addition, $ 175.4 million and $ 69.6 million of developed technology at May 28, 2023 and May 29, 2022, respectively, is recorded as “Other assets” on our Consolidated Balance Sheets and will generally be amortized over seven years once implemented.

Amortization expense, including developed technology, was $ 7.0 million, $ 5.8 million, and $ 5.0 million in fiscal 2023, 2022, and 2021, respectively.

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

In addition, $ 227.9 million and $ 175.4 million of net developed technology at May 26, 2024 and May 28, 2023, respectively, is recorded as “Other assets” on our Consolidated Balance Sheets and will generally be amortized over seven years once implemented.

Foreign intangible assets are affected by foreign currency translation.

Based on current intangibles subject to amortization, we expect intangible asset amortization expense, excluding developed technology, will be approximately $ 7.3 million in fiscal 2024, $ 7.1 million in fiscal 2025, $ 7.2 million in fiscal 2026, $ 7.1 million in each of fiscal 2027 and 2028, and approximately $ 56.4 million thereafter.

Based on current intangibles subject to amortization, we expect intangible asset amortization expense, excluding developed technology, will be approximately $ 7.2 million in fiscal 2025, $ 7.3 million in fiscal 2026, $ 7.2 million in fiscal 2027, $ 7.2 million in fiscal 2028, and $ 7.0 million in fiscal 2029, and approximately $ 51.0 million thereafter.

Impairment Testing

During the annual goodwill impairment test we performed in the fourth quarter of fiscal 2024, we assessed qualitative factors to determine whether it was more likely than not that the fair value of each reporting unit was less than its carrying value.

Based on the results of the qualitative impairment test, we determined that it was not more likely than not that the fair value was less than the carrying value of our Global, Foodservice, Retail, and Other reporting units.

Based on the results of the qualitative impairment test, we determined that it was not more likely than not that the fair value was less than the carrying value of our North America and International reporting units.

Additionally, we completed our tests of our non-amortizing intangibles in the fourth quarter of fiscal 2024 and there was no indication of intangible asset impairment.

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The components of accrued liabilities were as follows:

(in millions)

Compensation and benefits

(in millions) May 26,

Accrued trade promotions $ 90.0 $ 86.1

Derivative liabilities and payables

Compensation and benefits 72.8 187.5

Dividends payable to shareholders 51.7 40.8

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Current portion of operating lease obligations 29.3 28.5

Plant utilities and accruals

Taxes payable 24.8 21.2

Derivative liabilities and payables 24.6 53.9

Plant utilities and accruals 23.9 27.2

Other 58.8 33.5

Accrued liabilities $ 407.6 $ 509.8

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

(in millions)

Interest Rate

(in millions) May 26, 2024 May 28, 2023

Amount Interest Rate Amount Interest Rate

Short-term borrowings:

Global revolving credit facility $ 291.3 6.580 % $ — — %

revolving credit facility — 6.680 — 7.710

Euro revolving credit facility — 4.790 149.2 4.230

Other credit facilities

Other credit facilities (a) 35.0 11.4

Long-term debt:

Term A-1 loan facility, due June 2026 (b) 228.8 7.240 243.8 5.210

Term A-2 loan facility, due April 2025 (b)

Term A-2 loan facility, due April 2025 (b) (c) — — 280.3 5.380

Term A-3 loan facility, due January 2030 (b) 427.5 7.390 450.0 6.850

Term A-4 loan facility, due May 2029 (b) 325.0 6.540 — —

RMB loan facility, due February 2027 142.2 4.450 94.7 4.600

Euro loan facility, due December 2024

Euro term loan facility, due December 2024 (d) — — 80.4 2.010

Euro term loan facility, due May 2029 216.9 5.080 — —

4.875% senior notes, due May 2028 500.0 4.875 500.0 4.875

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4.375% senior notes, due January 2032 700.0 4.375 700.0 4.375

3,510.4 3,319.2

Financing obligations:

Lease financing obligations due on various dates through 2040 (c)

Lease financing obligations due on various dates through 2040 (e) 5.7 7.7

Total debt and financing obligations 3,842.4 3,487.5

Debt issuance costs and debt discounts (d)

Debt issuance costs and debt discounts (f) ( 19.0 ) ( 25.3 )

Short-term borrowings, net of debt discounts ( 326.3 ) ( 158.5 )

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Long-term debt and financing obligations, excluding current portion $ 3,440.7 $ 3,248.4

(a) The 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.

We have received and expect to continue receiving patronage dividends under all three Term Loan Facilities.

(c) The interest rates on our lease financing obligations ranged from 2.08 % to 6.19 % at May 28, 2023 and 2.08 % to 3.32 % at May 29, 2022.

_____________________________________________________

(a) The Other credit facilities consist of various 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, A-3, and A-4 loans do not include anticipated patronage dividends.

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

(c) The Term A-2 loan facility was repaid in full in connection with our entry into the New Term Loan Credit Agreement discussed below.

(d) The Euro term loan facility, due December 2024 was repaid in full in connection with our entry into the Global Revolving Credit Agreement discussed below.

(e) The interest rates on our lease financing obligations ranged from 2.08 % to 6.19 % at May 26, 2024 and May 28, 2023.

For more information on our lease financing obligations, see Note 7, Leases.

(d) Excludes debt issuance costs of $ 2.5 million and $ 3.3 million as of May 28, 2023 and May 29, 2022, respectively, related to our U.S.

Revolving Credit Facility, which are recorded in “Other assets” on our Consolidated Balance Sheets.

(f) Excludes debt issuance costs of $ 4.9 million and $ 2.5 million as of May 26, 2024 and May 28, 2023, respectively, related to our Global Revolving Credit Facility, which are recorded in “Other assets” on our Consolidated Balance Sheets.

In fiscal 2024, 2023, and 2022, we recorded $ 4.5 million, $ 4.1 million, and $ 4.8 million, respectively, of amortization expense in “Interest expense” in our Consolidated Statements of Earnings.

Fiscal 2022 also included a $ 13.7 million write-off of debt issuance costs associated with our senior notes due 2024 and 2026 which we redeemed in fiscal 2022.

Revolving Credit Facility

We are party to a senior secured credit agreement, dated as of November 9, 2016, as amended, that provides available revolving credit facility borrowings of $ 1.0 billion through August 11, 2026 (“U.S.

Revolving Credit Facility”).

In June 2023, we further amended our U.S.

Revolving Credit Facility to fully transition from LIBOR to a Secured Overnight Financing Rate (“SOFR”).

As part of that amendment, the SOFR Adjustment with respect to Term SOFR was set at 0.10 % for any interest period.

Borrowings under the U.S.

Revolving Credit Facility bear interest at SOFR (including the SOFR Adjustment), the Base Rate, the Alternative Currency Daily Rate, or the Alternative Currency Term Rate (each as defined in the U.S.

Revolving Credit Facility) plus an applicable rate stated in the table below.

Revolving Credit Facility contains certain covenant restrictions, a consolidated net leverage ratio and an interest coverage ratio and customary events of default.

At May 28, 2023 and May 29, 2022, we had no borrowings outstanding under the U.S.

Revolving Credit Facility.

At May 28, 2023, we had $ 994.6 million of availability under the facility, which is net of outstanding letters of credit of $ 5.4 million.

Term A-1, A-2 and A-3 Loan Facilities

We are party to a credit agreement, dated as of June 28, 2019, as amended, that provides for (i) a $ 300.0 million term loan facility and, under certain circumstances, the ability to add incremental facilities in an aggregate amount of up to $ 100.0 million (collectively, “Term A-1 Loan Facility”), and (ii) a $ 325.0 million term loan facility due April 2025 (“Term A-2 Loan Facility”).

On January 31, 2023 , we further amended the credit agreement relating to our Term A-1 and A-2 Loan Facilities (“Amended Term Loan Agreement”) to, among other things, establish a new $ 450.0 million term loan facility with a maturity date of January 31, 2030 (“Term A-3 Loan Facility”) and extend the maturity of our existing Term A-1 loan from June 28, 2024 to June 28, 2026 .

Borrowings under the Term A-3 Loan Facility were used to purchase the remaining equity interest in LW EMEA, and bear interest, before anticipated patronage dividends, at the Adjusted Term SOFR or the Base Rate (as defined in the Amended Term Loan Agreement) plus an applicable rate noted in the table below.

Under the Amended Term Loan Agreement, LIBOR-based rates have been replaced with SOFR-based rates.

Effective February 28, 2023, the Term A-1 and A-2 loan interest rates are SOFR based (with a SOFR adjustment) and Base Rate-based loans and the Term A-1 loan applicable margin increased to match the applicable margin of our Term A-2 loan.

Global Revolving Credit Facility

On May 3, 2024, we entered into an amended and restated credit agreement (the “Global Revolving Credit Agreement”), which replaced our then-existing credit agreement, dated as of November 9, 2016 (as amended, the “U.S.

Revolving Credit Agreement”).

Revolving Credit Agreement provided for, among other things, a $ 1.0 billion revolving credit facility (the “U.S.

Revolving Credit Facility”), including borrowings and letters of credit available in U.S.

dollars and various foreign currencies.

The Global Revolving Credit Agreement modified the U.S.

Revolving Credit Agreement for the purpose of, among other things, (i) increasing the commitments under the Global Revolving Credit Facility to $ 1.5 billion, (ii) extending the maturity date of the Global Revolving Credit Facility from August 2026 to May 2029, and (iii) establishing a new € 200.0 million term loan facility maturing May 2029 (the “New Euro Term Loan Facility”).

Borrowings under the Global Revolving Credit Facility bear interest at a per annum rate equal to (i) an applicable rate described in the table below plus (ii)(a) for U.S.

dollar denominated loans, Term SOFR, Adjusted Daily Simple SOFR or the Base Rate (each as defined in the Global Revolving Credit Agreement), and (b) for Alternative Currency denominated loans, the Alternative Currency Term Rate or the Alternative Currency Daily Rate (each as defined in the Global Revolving Credit Agreement).

Borrowings under the New Euro Term Loan Facility bear interest at a per annum rate equal to (i) an applicable rate described in the table below plus (ii) the Alternative Currency Term Rate applicable to Euro denominated loans.

The Global Revolving Credit Agreement contains certain covenant restrictions, a consolidated net leverage ratio and an interest coverage ratio and customary events of default.

At May 26, 2024, we had $ 1,203.3 million of availability under the Global Revolving Credit Facility, which is net of outstanding letters of credit of $ 5.4 million.

Term Loan Facilities

On May 3, 2024 , we entered into an amended and restated credit agreement (the “New Term Loan Credit Agreement”), which replaced our then-existing credit agreement, dated as of June 28, 2019 (as amended, the “Prior Term Loan Credit Agreement”).

The Prior Term Loan Credit Agreement provided for, among other things, (i) a $ 300.0 million term loan facility due June 2026 (the “Term A-1 Loan Facility”), (ii) a $ 325.0 million term loan facility due April 2025 (the “Term A-2 Loan Facility”) and (iii) a $ 450.0 million term loan facility due January 2030 (the “Term A-3 Loan Facility”).

The New Term Loan Credit Agreement modified the Prior Term Loan Credit Agreement for the purpose of, among other things, establishing an additional $ 325.0 million term loan facility due May 2029 (the “Term A-4 Loan Facility”).

Borrowings under the Term A-4 Loan Facility were used in part to repay the Term A-2 Loan Facility in full.

The Term A-1 Loan Facility and the Term A-3 Loan Facility both remain outstanding under the New Term Loan Credit Agreement.

Borrowings under the New Term Loan Credit Agreement bear interest, before anticipated patronage dividends, at a per annum rate equal to (i) an applicable rate described in the table below plus (ii) Adjusted Term SOFR, the Base Rate or, in the case of Term A-4 Loan Facility, the Fixed Rate (each as defined in the New Term Loan Credit Agreement).

The New Term Loan Credit Agreement contains certain covenant restrictions, a consolidated net leverage ratio and an interest coverage ratio and customary events of default.

RMB Loan Facility

On February 18, 2022 , our wholly owned subsidiary, Ulanqab Lamb Weston Food Co., Ltd., entered into a facility agreement providing for a RMB 1,079.0 million (approximately $ 152.7 million based on prevailing interest exchange rates on May 28, 2023) term loan facility (the “RMB Loan Facility”).

On February 18, 2022, our wholly owned subsidiary, Ulanqab Lamb Weston Food Co., Ltd., entered into a facility agreement providing for a RMB 1,079.0 million (approximately $ 149.0 million based on prevailing exchange rates on May 26, 2024) term loan facility (the “RMB Loan Facility”).

The RMB Loan Facility matures on February 25, 2027.

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In May 2020, we issued $ 500.0 million aggregate principal amount of 4.875 % senior notes due May 15, 2028 (“2028 Notes”).

Our obligations under the 2028 Notes are unconditionally guaranteed on a senior unsecured basis by the same subsidiaries as the U.S.

Revolving Credit Facility.

The 2028 Notes are senior unsecured obligations and rank equally with all of our current and future senior indebtedness (including the 2030 and 2032 Notes), rank senior to all our current and future subordinated indebtedness and are subordinated to all of our current and future secured indebtedness (including all borrowings with respect to the U.S.

Revolving Credit Facility and Term A-1, A-2, and A-3 Loan Facilities to the extent of the value of the assets securing such indebtedness).

Our obligations under the 2028 Notes are unconditionally guaranteed on a senior unsecured basis by the same subsidiaries as the Global Revolving Credit Facility.

to the extent of the value of the assets securing such indebtedness).

Upon a change of control (as defined in the indenture governing the 2028 Notes), we must offer to repurchase the 2028 Notes at 101 % of the principal amount of the notes, plus accrued and unpaid interest.

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On November 8, 2021 , we issued (i) $ 970.0 million aggregate principal amount of 4.125 % senior notes due January 31, 2030 (“2030 Notes”) and (ii) $ 700.0 million aggregate principal amount of 4.375 % senior notes due January 31, 2032 (“2032 Notes”) pursuant to indentures, each dated as of November 8, 2021 (together, the “Indentures”).

Our obligations under the 2030 Notes and 2032 Notes are unconditionally guaranteed on a senior unsecured basis by the same subsidiaries as the U.S.

Revolving Credit Facility .

Our obligations under the 2030 Notes and 2032 Notes are unconditionally guaranteed on a senior unsecured basis by the same subsidiaries as the Global Revolving Credit Facility .

The 2030 Notes and 2032 Notes are effectively subordinated to all of our existing and future secured debt, rank equally with all of our existing and future senior debt and rank senior to all of our existing and future subordinated debt.

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The 2030 Notes and 2032 Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries.

Euro Revolving Credit Facility and Loan Facility

In connection with the LW EMEA Acquisition, we assumed the liability associated with a term loan (“Euro Loan”) and a revolving credit facility (“Euro Revolving Credit Facility”).

On December 10, 2021 , LW EMEA entered into the Euro Loan for € 75.0 million and Euro Revolving Credit Facility for € 400.0 million with certain lenders for a total amount of € 475.0 million (approximately $ 509.3 million based on prevailing interest exchange rates on May 28, 2023).

The Euro Loan and Euro Revolving Credit Facility contain covenants that are standard for credit facilities including, among others, financial covenants, covenants with regards to mergers and consolidations and asset sales, and is subject to acceleration upon various events of default.

The Euro Loan interest rate is dependent on the ratio of consolidated net borrowing to adjusted consolidated EBITDA, and matures on December 10, 2024 .

The Euro Revolving Credit Facility interest rate is dependent on the ratio of consolidated total net borrowings to adjusted consolidated EBITDA.

It matures on December 10, 2026 , with an option to extend for two individual years.

For the three months ended May 28, 2023, we drew € 45.0 million available under the Euro Revolving Credit Facility and repaid € 10.0 million.

At May 28, 2023, we had € 260.0 million of availability under the facility.

Former Euro Revolving Credit Facility and Term Loan Facility

On May 3, 2024, in connection with our entry into the Global Revolving Credit Agreement, we terminated LW EMEA’s then-existing € 400.0 million revolving credit facility (the “Euro Revolving Credit Facility”) and repaid LW EMEA’s then-existing € 75.0 million term loan facility, due December 2024, in full.

Other Credit Facilities

At May 28, 2023 and May 29, 2022, one of our subsidiaries had $ 51.0 million and $ 53.7 million, respectively, of availability under an overdraft line of credit facility with a financial institution, with no borrowings outstanding.

We guarantee the full amount of our subsidiary’s obligations to the financial institution up to the maximum amount of borrowings under the credit facility.

At May 26, 2024 and May 28, 2023, two of our subsidiaries had $ 58.3 million and $ 51.0 million, respectively, of availability under their overdraft line of credit facilities with financial institutions, with borrowings outstanding of $ 35.0 million and $ 11.4 million, respectively.

We guarantee the full amount of one of our subsidiaries’ obligations to the financial institutions up to the maximum amount of borrowings under the credit facility.

Variable Rate Interest

Additional information regarding our variable rate debt modifiers is shown below:

SOFR/LIBOR Rate-Based Loans

Base Rate-Based Loans

Revolving Credit Facility

1.125 - 1.750 %

0.125 - 0.750 %

Term A-1 Loan Facility

1.850 - 2.600 %

Reference Rate-Based Loans Base Rate-Based Loans

Global revolving credit facility (a) 1.125 - 1.750 %

0.125 - 0.750 %

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0.850 - 1.600 %

Term A-2 loan facility (b) 1.850 - 2.600 %

0.850 - 1.600 %

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1.000 - 1.750 %

Reference Rate-Based Loans

PRC Prime Rate-Based Loans

RMB Loan Facility

Prime + 0.300 %

Euro Loan Facility

Term A-4 loan facility (c) 1.850 - 2.850 %

0.850 - 1.850 %

Euro Revolving Credit Facility (British Pound Loans)

_____________________________________________________

Euro Revolving Credit Facility (Other Loans)

(a) Borrowings under the Global Revolving Credit Facility have the same margin whether loans are denominated in U.S.

dollars or non-U.S.

(b) The Term A-2 Loan Facility was repaid in full in connection with our entry into the New Term Loan Credit Agreement.

(c) The Term A-4 Loan Facility is considered fixed-rate debt, however, the last year of its term under the New Term Loan Credit Agreement will be variable-rate based, as noted above.

Reference Rate-Based Loans PRC Prime Rate-Based Loans

RMB loan facility, due February 2027 N/A Prime + 0.300 %

Euro term loan facility, due May 2029 1.125 - 1.750 %

Euro term loan facility, due December 2024 (a) 0.400 - 1.100 %

Euro revolving credit facility (British Pound Loans) (b) 1.250 - 2.100 %

Euro revolving credit facility (Other Loans) (b) 1.050 - 1.900 %

_____________________________________________________

(a) The Euro term loan facility, due December 2024 was repaid in full in connection with our entry into the Global Revolving Credit Agreement.

(b) The Euro Revolving Credit Facility was terminated in connection with our entry into the Global Revolving Credit Agreement.

Debt Maturities

The aggregate minimum principal maturities of our long-term debt, including current portion, for the next five fiscal years and thereafter, are as follows:

(in millions)

(in millions) Debt (a)

Thereafter 1,985.0

_____________________________________________________

(a) See Note 7, Leases, for maturities of our lease financing obligations.

During fiscal 2024, 2023, and 2022, we paid $ 191.3 million, $ 151.8 million, and $ 80.6 million, respectively, of interest on debt.

The increase in fiscal 2023 relates to higher interest rates on variable rate debt and debt facilities associated with the LW EMEA Acquisition.

We lease various real estate, including certain operating facilities, warehouses, office space, and land.

11 unchanged sentences

Total lease costs, net $ 51.1 $ 42.4 $ 38.1

_____________________________________________________

(a) Supply-chain-related lease costs are included in “Cost of sales,” and the remainder is recorded in “Selling, general and administrative expenses,” in our Consolidated Statements of Earnings.

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Operating and finance leases, with initial terms greater than one year, were as follows:

(in millions)

Classification

Operating lease assets

Finance lease assets

Property, plant and equipment, net (a)

(in millions) Classification May 26,

Operating lease assets Operating lease assets $ 133.0 $ 146.1

Finance lease assets Property, plant and equipment, net (a) 3.9 3.8

Total leased assets $ 136.9 $ 149.9

Lease obligations due within one year:

Operating lease obligations

Accrued liabilities

Finance lease obligations

Current portion of long-term debt and financing obligations

Operating lease obligations Accrued liabilities $ 29.3 $ 28.5

Finance lease obligations Current portion of long-term debt and financing obligations 1.5 1.5

Long-term lease obligations:

Operating lease obligations

Other noncurrent liabilities

Finance lease obligations

Long-term debt and financing obligations, excluding current portion

Operating lease obligations Other noncurrent liabilities 115.4 127.5

Finance lease obligations L ong-term debt and financing obligations, excluding current portion 4.2 6.2

Total lease obligations $ 150.4 $ 163.7

_____________________________________________________

(a) Finance leases are net of accumulated amortization of $ 8.2 million and $ 6.8 million at May 26, 2024 and May 28, 2023, respectively.

The maturities of our lease obligations for operating and finance leases at May 26, 2024 for the next five fiscal years and thereafter are as follows:

(in millions, except for lease term and discount rate amounts)

(in millions, except for lease term and discount rate amounts) Operating

Leases Finance

2025 $ 33.4 $ 1.5 $ 34.9

2026 26.7 1.4 28.1

2027 23.2 0.8 24.0

2028 22.1 0.3 22.4

2029 20.2 0.3 20.5

Thereafter 47.6 3.4 51.0

Total lease payments 173.2 7.7 180.9

Interest ( 28.5 ) ( 2.0 ) ( 30.5 )

Present value of lease obligations $ 144.7 $ 5.7 $ 150.4

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STOCK-BASED COMPENSATION

On October 29, 2016, our Board of Directors adopted the Lamb Weston Holdings, Inc.

2016 Stock Plan, which was amended in July 2017 (“Stock Plan”).

The Compensation and Human Capital Committee (“the Committee”) of our Board of Directors administers our stock compensation plan.

The Committee, in its discretion, authorizes grants of restricted stock units (“RSUs”), performance awards payable upon the attainment of specified performance goals (“Performance Shares”), dividend equivalents, and other stock-based awards.

At May 28, 2023, we had 10.0 million shares authorized under the Stock Plan, and 6.1 million were available for future grant.

The Compensation and Human Capital Committee (“the Committee”) of our Board of Directors (the “Board”) administers our stock compensation plan (“Stock Plan”).

The Committee, in its discretion, authorizes grants of restricted stock units (“RSUs”), performance share awards payable upon the attainment of specified performance goals (“Performance Shares”), dividend equivalents, and other stock-based awards.

At May 26, 2024, we had 10.0 million shares authorized for issuance under the Stock Plan, and 5.9 million were available for future grants.

RSUs and Performance Shares

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The weighted average Monte Carlo assumptions for Performance Shares granted during the fiscal year ended May 26, 2024 were:

Dividend yield (%)

Expected volatility of stock (%) 29.1 % - 30.1 %

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Weighted average grant date fair value per unit $ 89.19 - $ 122.25

91.43 - $ 118.97

The following table summarizes RSU and Performance Shares activity for fiscal 2024:

Performance Shares

RSUs Performance Shares

Shares Weighted-

Value Shares Weighted-

Outstanding at May 28, 2023 981,043 $ 68.22 444,644 $ 80.74

Granted (a) 377,162 101.51 116,929 103.65

Vested (b) ( 334,342 ) 67.84 ( 92,080 ) 63.53

Forfeited/expired/cancelled ( 49,172 ) 81.70 ( 28,431 ) 93.11

Outstanding at May 26, 2024 974,691 $ 80.55 441,062 $ 89.61

_____________________________________________________

(a) Granted represents new grants and dividend equivalents accrued.

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Options granted to non-employee directors generally vest one year after the grant date and have a term of ten years .

During the fifty-two weeks ended May 28, 2023, we granted 0.6 million stock options at a weighted-average grant date fair value of $ 25.93 .

The following table provides the related assumptions used in the Black-Scholes model used to determine the fair value of stock options granted during the fiscal year ended May 28, 2023:

Dividend yield (%)

Expected volatility of stock (%)

33.73 - 34.06

Risk-free interest rate (%)

Expected life of stock option (years)

During the fiscal year ended May 26, 2024 , we granted an immaterial amount of stock options.

The following table summarizes stock option activity for fiscal 2024:

Shares Weighted-

(per share) Weighted-

Term (Years) Aggregate

(in millions)

Outstanding at May 28, 2023 701,839 $ 69.92 7.9 $ 27.8

Granted 5,003 81.25

Exercised ( 14,049 ) 56.89

Forfeited/cancelled ( 26,189 ) 79.66

Outstanding at May 26, 2024 666,604 $ 69.90 6.9 $ 12.9

Exercisable at May 28, 2023

Exercisable at May 26, 2024 332,221 $ 59.85 5.6 $ 9.8 (a)

_____________________________________________________

(a) The aggregate intrinsic values represent the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of our fiscal 2024, or $ 89.21 as of May 26, 2024, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at the end of the fiscal year.

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Total compensation expense, net of tax benefit $ 39.3 $ 31.4 $ 17.4

_____________________________________________________

(a) Income tax benefit represents the marginal tax rate, excluding non-deductible compensation.

Based on estimates at May 26, 2024, total unrecognized compensation expense related to stock-based awards was as follows:

(in millions, except data in years)

(in millions, except data in years) Unrecognized

Expense Remaining

Period (in years)

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As of May 26, 2024

(in millions)

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

(Liabilities)

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As of May 28, 2023

(in millions)

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

(Liabilities)

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Derivative assets (a) — 3.0 — $ 3.0

Derivative liabilities (a) — ( 46.6 ) — ( 46.6 )

Deferred compensation liabilities (b) — ( 22.6 ) — ( 22.6 )

Fair value, net $ 15.7 $ ( 58.9 ) $ — $ ( 43.2 )

_____________________________________________________

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

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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.

We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy that is described above.

We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy that is described above with an exception being the Term A-4 Loan Facility, which is quoted at face value (Level 1 inputs).

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.

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Each share of common stock entitles the holder to one vote on matters to be voted on by our stockholders.

No preferred stock was issued or outstanding on May 28, 2023.

No preferred stock was issued or outstanding as of May 26, 2024.

Share Repurchase Program

Our Board of Directors has authorized a program, with no expiration date, to repurchase up to $500.0 million of our common stock.

Our Board has authorized a program, with no expiration date, to repurchase shares of our common stock.

During fiscal 2024, we purchased an aggregate of 2,294,654 shares for $ 210.0 million, or a weighted-average price of $ 91.51 per share.

As of May 28, 2023, $ 223.9 million remained authorized for repurchase under the program.

In October 2023, the Board approved an increase to the share repurchase authorization, which reset the unused capacity under the program to an aggregate $ 500.0 million.

As of May 26, 2024, $ 390.0 million remained authorized for share repurchases under the program.

During fiscal 2024, 2023, and 2022, we paid $ 174.0 million, $ 146.1 million , and $ 138.4 million, respectively, of cash dividends to common stockholders.

On June 2, 2023, we paid $ 40.8 million of dividends to stockholders of record as of the close of business on May 5, 2023.

On July 19, 2023 , our Board of Directors declared a cash dividend of $ 0.280 per share of common stock.

This dividend will be paid on September 1, 2023 , to stockholders of record as of the close of business on August 4, 2023 .

On May 31, 2024, we paid $ 51.7 million of dividends to stockholders of record as of the close of business on May 3, 2024.

On July 18, 2024, our Board declared a cash dividend of $ 0.36 per share of common stock.

This dividend will be paid on August 30, 2024, to stockholders of record as of the close of business on August 2, 2024.

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

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Changes in AOCI, net of tax, as of May 26, 2024, were as follows:

(in millions) Foreign

Losses Pension and

Post-Retirement

Benefits Other Accumulated

Comprehensive

(in millions)

Balance as of May 28, 2023 $ ( 27.1 ) $ ( 0.7 ) $ 1.0 $ ( 26.8 )

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Balance as of May 26, 2024 $ ( 8.2 ) $ ( 5.3 ) $ 0.6 $ ( 12.9 )

We have four operating segments, each of which is a reportable segment:

Global, Foodservice, Retail, and Other.

Our chief operating decision maker receives periodic management reports under this structure that generally focus on the nature and scope of our customers’ businesses, which enables operating decisions, performance assessment, and resource allocation decisions at the segment level.

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

See “Part I, Item 1.

Business” of this Form 10-K for more information on our segments.

For the Fiscal Years Ended May

In July 2022, we acquired an additional 40 % equity interest in LWAMSA, which increased our total equity ownership from 50 % to 90 %.

In addition, in February 2023, we purchased the remaining 50 % equity interest in LW EMEA, and now own 100 %.

After the acquisitions, we consolidated the results of operations of LWAMSA and LW EMEA in our International segment in our fiscal first and fourth quarters of fiscal 2023, respectively.

Prior to the acquisitions, the results of each of LWAMSA and LW EMEA were recorded in “Equity method investment earnings (loss).”

We recorded the assets and liabilities of both acquisitions at fair value based on a market approach.

We remeasured our initial equity interests at fair value, after considering control premiums in our industry, which are unobservable inputs, or Level 3, in the fair value hierarchy.

Fiscal 2023 net income included $ 371.7 million of after-tax ($ 420.6 million before tax) net gains related to the acquisitions, as follows:

$ 379.5 million after-tax ($ 425.8 million before tax) non-cash gain recorded in “Equity method investment earnings.”

$ 20.0 million of after-tax ($ 27.0 million before tax) costs related to the step-up and sale of inventory recorded in “Cost of sales.”

$ 12.2 million of after-tax ($ 21.8 million before tax) net gain from acquisition-related expenses (foreign currency gain related to actions taken to mitigate the effect of changes in currency rates on the purchase price, net of advisory, legal, valuation and other professional or consulting expenses).

The purchase price to acquire the additional 40 % interest in LWAMSA consisted of $ 42.3 million in cash.

The total consideration for our acquisition of the remaining interest in LW EMEA (the “LW EMEA Acquisition”) was $ 1,447.5 million, which consisted of € 531.6 million ($ 564.0 million) in cash, which excluded settlement of pre-existing relationships of $ 32.3 million and cash held by LW EMEA of $ 28.2 million, and 1,952,421 shares of our common stock (valued at $ 197.3 million as of the acquisition closing date).

We recorded LW EMEA’s assets and liabilities at fair value.

In fiscal 2023, LW EMEA contributed $ 364.0 million of net sales and a $ 13.6 million loss from operations, which included $ 52.3 million of acquisition-related items ($ 27.0 million before tax expenses related to the sale of inventory stepped up in the acquisition and $ 25.3 million of unrealized losses related to mark-to-market adjustments for commodity and currency hedging contracts , before taxes).

We do not allocate interest expense and taxes to the acquired operations and therefore, the post-acquisition net earnings are not discernible.

The total purchase price consideration was allocated to the net assets acquired based upon their respective estimated fair values as follows:

(in millions)

Total net sales

Product contribution margin (a)

Advertising and promotion expenses (a)

Selling, general and administrative expenses (d)

Cash and cash equivalents $ 28.2

Receivables 221.5

Inventories 222.1

Prepaid expenses and other current assets 41.4

Property, plant and equipment (a) 629.1

Goodwill (b) 644.9

Intangible assets (c) 80.0

Other assets 29.6

Assets acquired $ 1,896.8

Accounts payable ( 62.2 )

Accrued liabilities ( 164.0 )

Short-term borrowings ( 108.2 )

Deferred income taxes ( 19.2 )

Long-term debt ( 78.0 )

Other non-current liabilities ( 17.7 )

Liabilities assumed $ ( 449.3 )

Net assets acquired $ 1,447.5

_____________________________________________________

(a) Property, plant and equipment acquired are being depreciated on a straight-line basis over their estimated remaining lives, which range from 1 to 30 years.

(b) Goodwill is calculated as the excess of the purchase price over the fair values of the identifiable net assets acquired.

The goodwill is primarily attributable to future growth opportunities in Europe, the Middle East, and Africa.

For tax purposes, the acquisition of the remaining LW EMEA interest was treated as a stock acquisition and is not deductible for tax purposes.

For more information, see Note 5, Income Taxes, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

Financial Statements and Supplementary Data” of the Annual Report on Form 10-K for period ended May 28, 2023, which we filed with the Securities and Exchange Commission on July 25, 2023.

Based on the carrying value of these finite-lived assets as of May 28, 2023, amortization expense for each of the next five years is estimated to be approximately $ 5.0 million.

The following unaudited pro forma financial information presents the combined results of operations as if we had acquired the remaining interest of LW EMEA on May 31, 2021 (the first day of fiscal 2022).

For the Fiscal Years Ended May

Unaudited Pro Forma Information (in millions)

Net sales $ 6,264.0 $ 5,131.4

Net income (a) (b) 644.9 500.4

_____________________________________________________

(a) The fiscal 2023 and 2022 unaudited pro forma financial information has been adjusted to give effect to adjustments that are directly related to the LW EMEA Acquisition and factually supportable.

These adjustments include, but are not limited to, the application of our accounting policies;

elimination of related party transactions;

depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets;

and interest expense on acquisition-related debt.

(b) The fiscal 2023 unaudited pro forma net income was also adjusted to exclude a $ 410.7 million ($ 364.4 million after-tax) non-cash gain related to the LW EMEA Acquisition, $ 27.0 million ($ 20.0 million after-tax) of acquisition inventory step-up expense and a $ 21.8 million ($ 12.2 million after-tax) gain from acquisition-related expenses (foreign currency gain related to actions taken to mitigate the effect of changes in currency rates on the purchase price, net of advisory, legal, valuation and other professional or consulting expenses).

JOINT VENTURE INVESTMENTS

In fiscal 2023, we purchased additional equity interests in LW EMEA and LWAMSA, and began consolidating their respective financial results in our Consolidated Financial Statements.

Prior to acquiring these incremental equity interests, we accounted for these investments under the equity method of accounting.

In addition, LW EMEA has a 75 % ownership interest in a joint venture that owns a production facility in Austria, which is included in our consolidated results.

At May 26, 2024, Lamb-Weston/RDO Frozen (“Lamb Weston RDO”), our joint venture with RDO Frozen Co., was the only joint venture accounted for under the equity method of accounting.

Our equity method investments were as follows:

May 26, 2024 May 28, 2023

(in millions) Carrying

Value Ownership

Interest Carrying

Value Ownership

Lamb Weston RDO $ 59.2 50 % $ 43.1 50 %

Other 0.4 50 %

$ 59.2 $ 43.5

Summarized combined financial information for our equity method investments were as follows:

For the Fiscal Years Ended May

Net sales $ 339.8 $ 1,122.3 $ 1,333.8

Gross profit 88.1 237.0 203.8

Income from operations 55.3 83.3 106.9

Net income (loss) (b) 51.9 70.1 ( 21.4 )

(in millions) May 26,

2024 (c) May 28,

Current assets $ 124.7 $ 98.8

Noncurrent assets 113.5 108.3

Current liabilities 64.3 55.1

Noncurrent liabilities 55.5 64.1

_____________________________________________________

(a) The fiscal 2023 financial information includes the financial results for the parts of the fiscal year when LW EMEA and LWAMSA were being accounted for as unconsolidated joint ventures.

(b) In fiscal 2022, LW EMEA recorded a $ 125.4 million charge to write-off its net investment in its former joint venture in Russia, which is included in the fiscal 2022 net loss.

Our portion of the non-cash impairment charge related to this write-off was $ 62.7 million.

We made the following sales to and purchases from our joint venture investments, primarily for finished products sold to or purchased from our joint ventures.

We also received dividends.

The following table summarizes the activity with all our joint venture investments:

For the Fiscal Years Ended May

(in millions) 2024 2023 (a) 2022

Sales $ 18.1 $ 22.2 $ 14.3

Purchases 74.9 42.9 21.0

Services provided 22.8 18.4 15.6

Dividends received 11.8 — 19.2

_____________________________________________________

(a) The fiscal 2023 financial information includes the financial results for the part of the fiscal year when LW EMEA and LWAMSA were accounted for as unconsolidated joint ventures.

As of May 26, 2024 and May 28, 2023, we had receivables included in “Receivables” on our Consolidated Balance Sheets from our joint ventures of $ 8.2 million and $ 4.5 million, respectively.

Effective May 29, 2023, to align with our expanded global footprint following the completion of the LW EMEA Acquisition, 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.

As a result of this change, we have two operating segments, each of which is a reportable segment:

North America and International.

Our chief operating decision maker receives periodic management reports under this structure, which, as discussed above, informs operating decisions, performance assessment, and resource allocation decisions at the segment level.

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

For the Fiscal Years Ended May

(in millions) 2024 2023 2022

Segment Net Sales

North America $ 4,363.2 $ 4,249.4 $ 3,497.3

International (a) 2,104.4 1,101.2 601.6

$ 6,467.6 $ 5,350.6 $ 4,098.9

For the Fiscal Years Ended May

(in millions) 2024 2023 2022

Segment Adjusted EBITDA

North America $ 1,263.1 $ 1,162.3 $ 711.6

International (a) 331.9 231.0 78.2

Total Reportable Segments Adjusted EBITDA 1,595.0 1,393.3 789.8

Unallocated corporate costs (b) ( 178.3 ) ( 143.9 ) ( 83.1 )

Depreciation and amortization (c) 306.2 247.4 229.3

Unrealized derivative (gains) losses ( 24.9 ) 41.7 8.2

Unconsolidated joint venture unrealized derivative losses (gains) — 32.7 ( 26.5 )

Foreign currency exchange losses (gains) 10.6 5.5 ( 0.7 )

Items impacting comparability:

Inventory step-up from acquisition 20.7 27.0 —

Integration and acquisition-related items, net 12.8 ( 21.8 ) —

Gain on acquisition of interest in joint ventures (d) — ( 425.8 ) —

Write-off of net investment in Russia — — 62.7

Interest expense, net (e) 135.8 109.2 161.0

Income before income taxes 955.5 1,233.5 272.7

Income tax expense 230.0 224.6 71.8

Equity method investment earnings (loss) (f)

(a) Product contribution margin represents net sales less cost of sales and advertising and promotion expenses.

Product contribution margin includes advertising and promotion expenses because those expenses are directly associated with segment performance.

(b) The fiscal year ended May 28, 2023 included a charge of $ 27.0 million ( $ 20.0 million after-tax) related to the step-up and sale of inventory acquired from LW EMEA.

(c) The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts.

(d) Selling, general and administrative expenses for the fiscal year ended May 28, 2023 included a net $ 21.8 million ( $ 12.2 million after-tax) gain related to actions taken to mitigate the effect of changes in currency rates on our purchase of the remaining equity interest in LW EMEA, net of other acquisition-related costs.

(e) The fiscal year ended May 29, 2022 included a loss on extinguishment of debt of $ 53.3 million ( $ 40.5 million after-tax), which includes a call premium of $ 39.6 million related to the redemption of our senior notes due 2024 and 2026, and the write-off of $ 13.7 million of previously unamortized debt issuance costs associated with those notes.

(f) Equity method investment earnings (loss) for the fiscal year ended May 28, 2023 included a $ 425.8 million ( $ 379.5 million after-tax) gain recognized in connection with our purchase of an additional 50 % equity interest in LW EMEA, increasing our equity ownership from 50 % to 100 % , and our purchase of an additional 40 % equity interest in LWAMSA, increasing our equity ownership from 50 % to 90 % .

Net income $ 725.5 $ 1,008.9 $ 200.9

_____________________________________________________

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

Accordingly, LW EMEA’s net sales and adjusted EBITDA for the thirteen weeks ended May 28, 2023 are reported in the International segment, whereas in the first three quarters of fiscal 2023, our initial 50 % equity interest in LW EMEA was recorded using equity method accounting.

As a result, LW EMEA’s net sales are not included in the International segment’s net sales for the first three quarters of the fifty-two weeks ended May 28, 2023, and only 50 % of LW EMEA’s adjusted EBITDA is reported in the International segment for those periods.

(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.

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 fifty-two weeks ended May 26, 2024 included unallocated corporate costs of LW EMEA whereas the fifty-two weeks ended May 28, 2023 included thirteen weeks with unallocated corporate costs.

For the first three quarters of fiscal 2023, 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) Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of $ 8.3 million, $ 29.1 million, and $ 42.0 million for the fifty-two weeks ended May 26, 2024 , May 28, 2023, and May 29, 2022, respectively.

(d) The fiscal year ended May 28, 2023 included a $ 425.8 million ($ 379.5 million after-tax) gain recognized in connection with our purchase of an additional 50 % equity interest in LW EMEA, increasing our equity ownership from 50 % to 100 %, and our purchase of an additional 40 % equity interest in LWAMSA, increasing our equity ownership from 50 % to 90 %.

The gains related to remeasuring our initial equity interests in LW EMEA and LWAMSA to fair value.

See Note 3, Acquisitions, for additional information.

Equity method investment earnings (loss) also included a $ 37.8 million ($ 28.0 million after-tax) unrealized loss, a $ 31.7 million ($ 23.5 million after-tax) unrealized gain, and a $ 8.6 million ($ 6.4 million after-tax) unrealized gain for the fiscal years ended May

28, 2023, May 29, 2022, and May 30, 2021, respectively, related to mark-to-market adjustments associated with changes in natural gas and electricity derivatives as commodity markets in Europe have experienced significant volatility.

I n May 2022, LW EMEA announced its intent to withdraw from its joint venture investment in Russia.

As a result, LW EMEA determined that its net investment in Russia was impaired and recognized a non-cash impairment charge, of which our portion was $ 62.7 million (before and after-tax).

(e) The fiscal year ended May 29, 2022 included a loss on extinguishment of debt of $ 53.3 million ($ 40.5 million after-tax), which includes a call premium of $ 39.6 million related to the redemption of our senior notes due 2024 and 2026, and the write-off of $ 13.7 million of previously unamortized debt issuance costs associated with those notes.

Assets by Segment

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Lamb Weston’s largest customer, McDonald’s Corporation, accounted for approximately 14 %, 13 %, and 10 % of our consolidated net sales in fiscal 2024, 2023, and 2022, respectively.

Sales to McDonald’s Corporation are included in our Global segment.

Other Information

The net sales of each of our Global, Foodservice, and Retail reporting segments are comprised of sales of frozen potato and frozen sweet potato products.

The net sales of our Other reporting segment include:

For the Fiscal Years Ended May

(in millions)

Total net sales

Our operations are principally in the U.S.

With respect to operations outside of the U.S., no single foreign country was significant with respect to consolidated operations in fiscal 2023, 2022, and 2021, however our international presence is growing.

Foreign net sales, including sales by domestic segments to customers located outside of the U.S., were $ 1,225.2 million, $ 682.7 million, and $ 700.2 million in fiscal 2023, 2022, and 2021, respectively.

Foreign long-lived assets are $ 1,195.8 million as of May 28, 2023.

Foreign long-lived assets were not significant as of May 29, 2022.

We have 27 production facilities, 15 located in the U.S.

and 12 located outside of the U.S.

as of May 26, 2024.

Foreign long-lived assets were $ 1,520.8 million and $ 1,195.8 million as of May 26, 2024 and May 28, 2023, respectively.

Long-lived assets located in the Netherlands were $ 808.0 million and $ 680.7 million as of May 26, 2024 and May 28, 2023, respectively.

Sales are classified as domestic or foreign based on the address to which the product is shipped.

No individual foreign country is material to the consolidated results.

Foreign net sales, including sales by domestic locations to external customers located outside of the U.S., were $ 2,189.6 million, $ 1,225.2 million, and $ 682.7 million in fiscal 2024, 2023, and 2022, respectively.

At May 26, 2024, we had approximately 10,700 employees, of which approximately 2,900 of these employees work outside of the U.S.

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Most of the union workers at our facilities are represented under contracts that expire at various times over the next several years.

Fiscal 2024 Segment Realignment

Effective May 29, 2023, in connection with our recent acquisitions and to align with our expanded global footprint, our management, including our chief executive officer, who is our chief operating decision maker, began managing our operations as two business segments based on management’s change to the way it monitors performance, aligns strategies, and allocates resources.

This resulted in a change from four reportable segments to two (North America and International), effective the beginning of fiscal 2024.

All summary financial information on a prospective basis will be presented under the new reportable segments beginning with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending August 27, 2023.

COMMITMENTS, CONTINGENCIES, GUARANTEES, AND LEGAL PROCEEDINGS

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Purchase Obligations and Capital Commitments

A summary of our purchase obligations, excluding capital commitments, as of May 28, 2023 are as follows.

A summary of our purchase obligations and capital commitments that are enforceable and legally binding, as of May 26, 2024, are as follows.

The expected timing of payments of the obligations in the table are estimated based on current information.

Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations:

(in millions)

Purchase Obligations

(a) The amounts in the table above exclude purchase commitments under potato supply agreements due to uncertainty of pricing and quantity.

(in millions) Purchase Obligations and Capital Commitments

2025 (a) $ 591.0

Thereafter 329.7

Total (b) $ 1,148.4

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(a) We had capital commitments of $ 402.7 million and $ 623.9 million as of May 26, 2024 and May 28, 2023, respectively, that represent commitments for construction of previously announced capacity expansions or factory modernization investments.

While these commitments are intended to be paid within the next 12-months, we recognize that the timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations.

Capital commitments were not recorded as liabilities on our Consolidated Balance Sheets as of May 26, 2024 as we had not yet received the related goods nor taken title to the property.

Capital purchases that we have taken title to, but not yet paid for, are recorded as liabilities on our Consolidated Balance Sheets as of May 26, 2024, and are disclosed in Note 1, Nature of Operations and Summary of Significant Accountant Policies, within Property, Plant and Equipment.

(b) The amounts in the table above exclude purchase commitments under potato supply agreements due to uncertainty of pricing and quantity.

Potato supply agreements have maximum contracted pricing with deductions for certain quality attributes, and quantities purchased are determined by the yields produced on contracted acres.

Total purchases under all our potato supply agreements were $ 1,397.8 million, $ 844.6 million, and $ 717.6 million in fiscal 2024, 2023, and 2022, respectively.

We had capital commitments of approximately $ 623.9 million and $ 304.7 million as of May 28, 2023 and May 29, 2022, respectively, that represent commitments for construction of previously announced plants, french fry production lines, or plant modernization investments.

Capital commitments were not recorded as liabilities on our Consolidated Balance Sheets as of May 28, 2023 as we had not yet received the related goods nor taken title to the property.

Guarantees and Indemnifications

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Legal Proceedings

We are a party to various legal actions arising in the ordinary course of our business.

On June 13, 2024, the Cleveland Bakers and Teamsters Pension Fund filed a securities class action lawsuit against the Company and certain of our executive officers in the U.S.

District Court for the District of Idaho on behalf of a putative class of stockholders for alleged violations of the federal securities laws.

Plaintiffs allege that the defendants made misrepresentations and omissions regarding the design and implementation of our ERP system.

We believe the lawsuit lacks merit and intend to vigorously defend against the allegations.

We are also a party to various other legal actions arising in the ordinary course of our business.

These claims, legal proceedings and litigation principally arise from alleged casualty, product liability, employment, and other disputes.

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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-K

Item 8. Financial Statements and Supplementary Data