Company: LW
Filing Date: 2025-08-07
Form Type: ARS
Source: 0001679273-25-000063
Chunk: 150

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-08-07
Form: ARS
Chunk 150
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, 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 $1,304.5 million, $1,397.8 million, and $844.6 million in fiscal 2025, 2024, and 2023, respectively. Guarantees and Indemnifications We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At May 25, 2025, we were not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If the fair value of such liability becomes material, we will accrue for it at that time. We are a party to various potato purchase supply agreements with partner growers, under which they deliver their potato crop from the contracted acres to Lamb Weston during the harvest season, and pursuant to the potato supply agreements, pricing for this inventory is determined after delivery, taking into account crop size and quality, among other factors. Total purchases under these agreements were $206.3 million, $213.2 million, and $166.6 million in fiscal 2025, 2024, and 2023, respectively, under the terms of the potato supply agreements. These purchases are initially recorded in inventory and charged to cost of sales as related inventories are produced and subsequently sold. Under the terms of these potato supply agreements, we have guaranteed repayment of short-term bank loans of the potato suppliers, under certain conditions. At May 25, 2025, we have effectively guaranteed $40.6 million of supplier loans. We have not established a liability for these guarantees, as we have determined that the likelihood of our required performance under the guarantees is remote. Under certain other potato supply agreements, we make advances to growers prior to the delivery of potatoes. The aggregate amounts of these advances were $34.8 million and $40.3 million at May 25, 2025 and May 26, 2024, respectively, and were recorded in “Prepaid expenses and other current assets,” on our Consolidated Balance Sheets. After taking into account liabilities recognized for all of