What changed in this filing

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Item 1. Financial Statements

2024-10-02 compared with 2024-04-04 · 132 added, 181 removed, 300 unchanged (51% of the section changed)

2 unchanged sentences

Consolidated Statements of Earnings

(unaudited, in millions, except per share amounts)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2024 February 26,

2023 February 25,

2024 February 26,

(unaudited, dollars in millions, except per share amounts)

Thirteen Weeks Ended

2024 August 27,

Net sales $ 1,654.1 $ 1,665.3

6 unchanged sentences

Income tax expense 50.8 69.9

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

Equity method investment earnings 11.3 12.1

Net income $ 127.4 $ 234.8

8 unchanged sentences

Consolidated Statements of Comprehensive Income

(unaudited, in millions)

(unaudited, dollars in millions)

Thirteen Weeks Ended

February 25, 2024 Thirteen Weeks Ended

February 26, 2023

Benefit After-Tax

Amount Pre-Tax

Benefit After-Tax

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

Other comprehensive income (loss):

Unrealized pension and post-retirement benefit obligations loss ( 0.1 ) — ( 0.1 ) — — —

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

Other ( 0.2 ) 0.1 ( 0.1 ) 0.1 — 0.1

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

Thirty-Nine Weeks Ended

February 25, 2024 Thirty-Nine Weeks Ended

February 26, 2023

August 25, 2024 Thirteen Weeks Ended

August 27, 2023

Benefit After-Tax

4 unchanged sentences

Unrealized pension and post-retirement benefit obligations loss ( 0.2 ) — ( 0.2 ) ( 0.2 ) — ( 0.2 )

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

Unrealized currency translation gains 56.6 ( 0.6 ) 56.0 0.8 0.4 1.2

Other ( 0.2 ) 0.1 ( 0.1 ) — — —

3 unchanged sentences

Consolidated Balance Sheets

(unaudited, in millions, except share data)

(unaudited, dollars in millions, except share data)

Current assets:

Cash and cash equivalents $ 120.8 $ 71.4

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

Receivables, net of allowances of $ 0.9 and $ 0.9

Inventories 1,135.7 1,138.6

27 unchanged sentences

Retained earnings 2,775.3 2,699.8

Accumulated other comprehensive loss ( 13.5 ) ( 26.8 )

Accumulated other comprehensive income (loss) 42.8 ( 12.9 )

Total stockholders’ equity 1,836.7 1,787.8

3 unchanged sentences

Consolidated Statements of Stockholders’ Equity

(unaudited, in millions, except share data )

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

Common Stock,

net of Treasury

Shares Common

Amount Treasury

Amount Additional

(Distributed)

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

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

Dividends declared, $ 0.360 per share

— — — — ( 52.0 ) — ( 52.0 )

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

Stock-settled, stock-based compensation expense — — — 12.2 — — 12.2

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

Other — — 0.1 2.2 ( 0.6 ) — 1.7

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

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

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

Dividends declared, $ 0.280 per share

— — — — ( 40.3 ) — ( 40.3 )

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

Stock-settled, stock-based compensation expense — — — 10.4 — — 10.4

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

Other — — — 1.0 ( 0.7 ) — 0.3

Comprehensive income — — — — 175.1 8.6 183.7

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

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

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

Thirteen Weeks Ended August 25, 2024 and August 27, 2023

Common Stock,

17 unchanged sentences

Comprehensive income — — — — 127.4 55.7 183.1

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

Balance at August 25, 2024 142,595,357 $ 151.3 $ ( 633.7 ) $ ( 499.0 ) $ 2,775.3 $ 42.8 $ 1,836.7

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

5 unchanged sentences

Other — — — — ( 0.1 ) — ( 0.1 )

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

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

Comprehensive income — — — — 234.8 1.0 235.8

Balance at August 27, 2023 144,926,900 $ 150.7 $ ( 427.8 ) $ ( 548.7 ) $ 2,354.6 $ ( 25.8 ) $ 1,503.0

See Condensed Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

(unaudited, in millions)

Thirty-Nine Weeks Ended

2024 February 26,

(unaudited, dollars in millions)

Thirteen Weeks Ended

2024 August 27,

Cash flows from operating activities

5 unchanged sentences

Deferred income taxes ( 2.9 ) 3.6

Foreign currency remeasurement gain ( 0.1 ) ( 21.2 )

Blue chip swap transaction gains ( 16.6 ) —

Other ( 14.4 ) 9.3

Changes in operating assets and liabilities, net of acquisitions:

Changes in operating assets and liabilities:

Receivables 31.9 0.4

8 unchanged sentences

Additions to other long-term assets ( 26.3 ) ( 37.4 )

Acquisition of interests in joint venture, net — ( 42.3 )

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

Proceeds from blue chip swap transactions, net of purchases 16.6 —

Other — ( 0.1 )

1 unchanged sentence

Cash flows from financing activities

Proceeds from short-term borrowings, net 379.1 —

Proceeds from short-term borrowings 398.0 14.0

Repayments of short-term borrowings ( 194.4 ) ( 32.9 )

Proceeds from issuance of debt 3.3 15.1

3 unchanged sentences

Other ( 0.6 ) 0.1

Net cash provided by financing activities $ 100.1 $ 331.3

Net cash provided by (used for) financing activities $ 52.2 $ ( 171.7 )

Effect of exchange rate changes on cash and cash equivalents 2.6 0.4

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

Net increase (decrease) in cash and cash equivalents 49.4 ( 141.5 )

Cash and cash equivalents, beginning of period 71.4 304.8

6 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.

Beginning in fiscal 2024, in connection with our recent acquisitions and to align with our expanded global footprint, we began managing our operations in two reportable segments:

We have two reportable segments:

North America and International.

1 unchanged sentence

Basis of Presentation

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

The accompanying unaudited Consolidated Financial Statements present the financial results of Lamb Weston and its consolidated subsidiaries for the thirteen weeks ended August 25, 2024 and August 27, 2023, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”).

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

18 unchanged sentences

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

2024 February 26,

2023 February 25,

2024 February 26,

Thirteen Weeks Ended

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

2024 August 27,

Net income $ 127.4 $ 234.8

7 unchanged sentences

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

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

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

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in millions) February 25,

2024 February 26,

2023 February 25,

2024 February 26,

As of August 25, 2024, 0.8 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

As of August 27, 2023, 0.2 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

Income tax expense for the periods presented were as follows:

Thirteen Weeks Ended

(in millions) August 25,

2024 August 27,

Income before income taxes and equity method earnings $ 166.9 $ 292.6

4 unchanged sentences

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

The effective tax rate varies from the U.S.

statutory tax rate of 21% principally due to the impact of U.S.

state taxes, foreign taxes and currency, permanent differences, and discrete items.

Our effective tax rate increased during the first quarter of fiscal 2025, primarily due to a higher proportion of earnings from our international locations with higher tax rates and discrete tax items.

Income Taxes Paid

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

Income taxes paid, net of refunds, were $ 6.0 million and $ 4.2 million during the thirteen weeks ended August 25, 2024 and August 27, 2023, respectively.

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

1 unchanged sentence

The components of inventories were as follows:

(in millions) February 25,

(in millions) August 25,

Raw materials and packaging $ 130.4 $ 178.7

4 unchanged sentences

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

(in millions) February 25,

(in millions) August 25,

Land and land improvements $ 185.2 $ 186.2

5 unchanged sentences

Property, plant and equipment, net $ 3,691.8 $ 3,582.8

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

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

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

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

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

At August 25, 2024 and May 26, 2024, purchases of property, plant and equipment included in accounts payable were $ 148.8 million and $ 292.0 million, respectively.

Below is a breakdown of depreciation and amortization between cost of sales (“COS”) and selling, general and administrative expenses (“SG&A”).

(in millions) August 25,

2024 August 27,

Depreciation - COS $ 78.5 $ 62.9

Depreciation - SG&A 3.4 3.0

$ 81.9 $ 65.9

Amortization - SG&A $ 7.4 $ 2.7

Interest capitalized within construction in progress for the thirteen weeks ended August 25, 2024 and August 27, 2023, was $ 6.7 million and $ 10.5 million, respectively.

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

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

The following table presents changes in goodwill balances, by segment, for the thirteen weeks ended August 25, 2024:

(in millions) North America International Total

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

Acquisition — 8.5 8.5

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

Foreign currency translation adjustment 19.0 8.6 27.6

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

___________________________________________

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

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

See Note 12, Segments, for more information related to the change in segments.

Balance at August 25, 2024 $ 747.8 $ 339.7 $ 1,087.5

Other identifiable intangible assets were as follows:

February 25, 2024 May 28, 2023

August 25, 2024 May 26, 2024

(in millions, except useful lives) Weighted

12 unchanged sentences

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

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

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

Foreign intangible assets are affected by foreign currency translation.

The components of other assets were as follows:

(in millions) February 25,

(in millions) August 25,

Capitalized software costs $ 233.9 $ 227.9

5 unchanged sentences

The components of accrued liabilities were as follows:

(in millions) February 25,

(in millions) August 25,

Compensation and benefits $ 86.9 $ 72.8

Taxes payable 78.7 24.8

Accrued trade promotions 73.0 90.0

Derivative liabilities and payables 52.4 53.9

Dividends payable to shareholders 51.6 51.7

Taxes payable 39.6 21.2

Current portion of operating lease obligations 31.1 29.3

Plant utilities and accruals 21.8 27.2

Accrued interest 25.5 31.7

Plant utilities and accruals 20.7 23.9

Derivative liabilities and payables 19.3 24.6

Other 61.2 58.8

2 unchanged sentences

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

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

(in millions) August 25, 2024 May 26, 2024

Amount Interest Rate Amount Interest Rate

Short-term borrowings:

revolving credit facility $ 405.0 6.681 % $ — 7.710 %

Euro revolving credit facility 113.6 4.772 149.2 4.230

Other credit facilities 22.2 (a) 11.4 (a)

Global revolving credit facility $ 490.6 6.620 % $ 291.3 6.580 %

Other credit facilities (a) 39.8 35.0

Long-term debt:

Term A-1 loan facility, due June 2026 (b) 225.0 7.290 228.8 7.240

Term A-2 loan facility, due April 2025 (b) 268.1 7.233 280.3 5.380

Term A-3 loan facility, due January 2030 (b) 421.9 7.440 427.5 7.390

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

RMB loan facility, due February 2027 147.6 4.240 142.2 4.450

Euro loan facility, due December 2024 81.2 4.184 80.4 2.010

Euro term loan facility, due May 2029 223.8 5.030 216.9 5.080

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

500.0 4.875 500.0 4.875

4.125% senior notes, due January 2030 970.0 4.125 970.0 4.125

970.0 4.125 970.0 4.125

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

3,513.3 3,510.4

3,328.0 3,319.2

Financing obligations:

1 unchanged sentence

Total debt and financing obligations 4,048.9 3,842.4

Debt issuance costs and debt discounts (c) ( 22.2 ) ( 25.3 )

Short-term borrowings, net of debt discounts ( 538.4 ) ( 158.5 )

Debt issuance costs (c) ( 18.0 ) ( 19.0 )

Short-term borrowings ( 530.4 ) ( 326.3 )

Current portion of long-term debt and financing obligations ( 63.2 ) ( 56.4 )

1 unchanged sentence

___________________________________________

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

(a) Other credit facilities consist of short-term facilities at our subsidiaries used for working capital purposes.

Borrowings under these facilities bear interest at various rates.

(b) The interest rates applicable to the Term A-1, A-3, and A-4 loans do not include anticipated patronage dividends.

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

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

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

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

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

(c) Excludes debt issuance costs of $ 4.7 million and $ 4.9 million as of August 25, 2024 and May 26, 2024, respectively, related to our Global revolving credit facility, which are recorded in “Other assets” on our Consolidated Balance Sheets.

As of August 25, 2024, we had $ 1,004.0 million of available liquidity under our committed global revolving credit facility.

For the thirteen weeks ended August 25, 2024 and August 27, 2023, we paid $ 56.7 million and $ 56.9 million of interest on debt, respectively.

On September 27, 2024, we amended our credit agreement, dated as of May 3, 2024, relating to our term loan facilities with certain lenders and AgWest Farm Credit, PCA, as administrative agent (the “Amended Term Loan Agreement”).

The Amended Term Loan Agreement, among other things, established a new $ 500 million term loan facility with a maturity date of September 2031 (“Term A-5 Loan”).

We used the proceeds of the Term A-5 Loan to repay the Term A-1 loan facility in full and $ 275 million of borrowings under our global revolving credit facility.

Borrowings of the Term A-5 Loan bear interest at a per annum rate equal to (i) an applicable rate plus (ii) the Adjusted Term SOFR Rate, the Base Rate or the Fixed Rate (each as defined in the Amended Term Loan Agreement).

The applicable rate is based on the Company’s consolidated net leverage ratio and ranges between 1.85 % to 2.85 % (or, in the case of Base Rate-based loans, 0.85 % to 1.85 %).

For more information about our debt and financing obligations, interest rates, and debt covenants, see Note 6, Debt and Financing Obligations, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

3 unchanged sentences

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

As of February 25, 2024

As of August 25, 2024

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

12 unchanged sentences

___________________________________________

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

The fair values of our Level 2 derivative assets were determined using valuation models that use market observable inputs including both forward and spot prices for commodities and foreign currencies.

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

The fair value of these derivatives were determined using valuation models that use market observable inputs including both forward and spot prices.

Derivative assets are presented within “Prepaid expenses and other current assets” on our Consolidated Balance Sheets and derivative liabilities are presented within “Accrued liabilities” on our Consolidated Balance Sheets.

2 unchanged sentences

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

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

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

As of August 25, 2024, we had $ 2,495.0 million of fixed-rate and $ 1,548.7 million of variable-rate debt outstanding.

Based on current market rates, the fair value of our fixed-rate debt was estimated to be $ 2,370 million as of August 25, 2024.

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

2 unchanged sentences

Share Repurchase Program

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

The program has no expiration date.

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

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

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

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

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

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

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

During the thirteen weeks ended August 25, 2024, we repurchased 1,412,852 shares of our common stock for an aggregate purchase price of $ 82.0 million, or a weighted-average price of $ 58.04 per share.

As of August 25, 2024, $ 308.0 million remained authorized for repurchase under our share repurchase program.

During the thirteen weeks ended August 25, 2024, we paid $ 51.7 million of cash dividends to our common stockholders.

In addition, on August 30, 2024, we paid $ 51.6 million of cash dividends to common stockholders of record as of the close of business on August 2, 2024.

On September 26, 2024, our Board of Directors declared a cash dividend of $ 0.36 per share of our common stock.

This dividend will be paid on November 29, 2024, to common stockholders of record as of the close of business on November 1, 2024.

Accumulated Other Comprehensive Income (Loss)

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

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

(in millions) Foreign

7 unchanged sentences

Net current-period other comprehensive income 56.0 ( 0.2 ) ( 0.1 ) 55.7

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

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

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

Balance as of August 25, 2024 $ 47.8 $ ( 5.5 ) $ 0.5 $ 42.8

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.

Our chief operating decision maker receives periodic management reports under this structure, which 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.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

2023 February 25, 2024 (a) February 26,

Thirteen Weeks Ended

(in millions) August 25,

2024 August 27,

Segment net sales

North America $ 1,103.7 $ 1,135.4

International (b) 510.8 182.8 1,605.7 566.8

International 550.4 529.9

$ 1,654.1 $ 1,665.3

Thirteen Weeks Ended Thirty-Nine Weeks Ended

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

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

Thirteen Weeks Ended

(in millions) August 25,

2024 August 27,

Segment Adjusted EBITDA

North America $ 276.1 $ 379.4

International (b) 101.7 54.1 291.5 147.4

International 50.5 89.6

Total Reportable Segments Adjusted EBITDA 326.6 469.0

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

Depreciation and amortization (e) 80.0 59.5 222.0 176.9

Unrealized derivative losses 27.3 5.1 1.6 8.7

Unconsolidated joint venture unrealized derivative losses — 47.1 — 32.7

Unallocated corporate costs (a) ( 36.7 ) ( 56.2 )

Depreciation and amortization (b) 91.4 70.8

Unrealized derivative gains ( 8.9 ) ( 27.3 )

Foreign currency exchange losses 0.6 7.4

Blue chip swap transaction gains (c) ( 16.6 ) —

Items impacting comparability:

1 unchanged sentence

Integration and acquisition-related items, net — 4.0

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

Interest expense, net 45.2 30.7

3 unchanged sentences

___________________________________________

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

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

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

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

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

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

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

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

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

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

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

The total charge to the reporting segments was as follows:

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

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

The total charge to the reporting segments was as follows:

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

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

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

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

(“LWAMSA”) in July 2022.

This gain related to remeasuring our previously held 50 % equity interest in LWAMSA to fair value, recorded in “Equity method investment earnings” in the Consolidated Statements of Earnings, and is excluded from the financial results of our International segment.

(b) Depreciation and amortization include interest expense, income tax expense, and depreciation and amortization from equity method investments of $ 2.1 million and $ 2.2 million for the thirteen weeks ended August 25, 2024 and August 27, 2023.

dollars into Argentina primarily related to funding our announced capacity expansion in Argentina.

The blue chip swap rate can diverge significantly from Argentina's official exchange rate.

COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS

We have financial commitments and obligations that arise in the ordinary course of our business.

These include long-term debt, lease obligations, purchase commitments for goods and services, and legal proceedings.

There have been no material changes to the commitments, contingencies, guarantees and legal proceedings disclosed in Note 14, Commitments, Contingencies, Guarantees, and Legal Proceedings, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

These include long-term debt, lease obligations, and purchase commitments for goods and services.

There have been no material changes to the commitments, contingencies, and guarantees disclosed in Note 14, Commitments, Contingencies, Guarantees, and Legal Proceedings, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

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

In June 2024, an alleged purchaser of the Company's common stock filed a 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 stock purchasers for alleged violations of the federal securities laws.

A similar lawsuit was filed in the same court in August 2024.

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

We believe the lawsuits lack merit and intend to vigorously defend against the allegations.

In addition, in August 2024, an alleged shareholder filed a derivative lawsuit purportedly on behalf of the Company against certain of our executive officers and directors, alleging breaches of fiduciary and other duties owed to the Company, based on the same matters alleged in the securities lawsuits.

A similar derivative lawsuit was filed in September 2024.

We 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.

In determining loss contingencies, we consider the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability.

An estimated loss is recognized when it is considered probable that a liability has been incurred and when the amount of loss can be reasonably estimated.

While any claim, proceeding or litigation has an element of uncertainty, we believe the outcome of any of these that are pending or threatened will not have a material adverse effect on our financial condition, results of operations, or cash flows.

SUBSEQUENT EVENTS

On October 1, 2024, we announced a restructuring plan that is designed to drive operational and cost efficiencies and improve cash flows.

The restructuring plan includes:

• The permanent closure of our manufacturing facility in Connell, Washington, effective October 1, 2024;

• The temporary curtailment of certain production lines and schedules across our manufacturing network in North America;

• A reduction in operating expenses, including headcount reductions approximating 4 % of our global workforce, and the elimination of certain unfilled job positions;

• A reduction in fiscal 2025 capital expenditures

In connection with this restructuring plan, we expect to record total pre-tax charges of $ 200 million to $ 250 million primarily relate to costs associated with contracted raw potatoes that will not be used due to production line curtailments, accelerating depreciation of assets, the write-down of inventory and long-lived assets, employee severance and other one-time termination benefits, and other costs.

We expect to record most of the pre-tax charges in the second quarter of fiscal 2025, with the remainder expected to be recorded during the second half of fiscal 2025.

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

What changed 10-Q

Item 1. Financial Statements