Company: LW
Filing Date: 2025-08-07
Form Type: ARS
Source: 0001679273-25-000063
Chunk: 69

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-08-07
Form: ARS
Chunk 69
---
 . . . . . . . . . (8.0) (27.2) — Adjusted (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,758.7 $ 674.2 $ 26.0 _____________________________________________________ (a) See the footnotes in the reconciliation of net income to Adjusted EBITDA above for a discussion of the items impacting comparability. 36

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our operations are exposed to market risks from adverse changes in commodity prices affecting the cost of raw materials and energy, changes in currency rates, and interest rates. In the normal course of business, we may periodically enter into derivatives to minimize these risks, but not for trading purposes. All of the following potential changes are based on sensitivity analyses performed on our financial positions as of May 25, 2025 and May 26, 2024. Actual results may differ materially. Commodity Price Risk Certain commodities we use in the production and distribution of our products are exposed to market price risk. To manage that risk, we utilize derivative contracts, many of which qualify for the normal purchase and normal sales scope exception and are not recorded on the Consolidated Balance Sheets. We may use commodity swap or forward purchase contracts, in addition to sourcing from multiple providers, to manage risks associated with market fluctuations in oil and energy prices. Based on our open commodity contract hedge positions as of May 25, 2025, a hypothetical 10% decline in market prices applied to the fair value of the instruments would result in a charge to “Cost of sales” of $6.8 million ($5.1 million after-tax). Based on our open commodity hedge positions as of May 26, 2024, a hypothetical 10% decline in market prices applied to the fair value of the instruments would have resulted in a charge to “Cost of sales” of $9.2 million ($6.9 million after-tax). It should be noted that any change in the fair value of the contracts, real or hypothetical, likely would be substantially offset by an inverse change in the value of the underlying hedged item. Foreign Currency Exchange Rate Risk We are subject to currency exchange rate risk through investments and businesses owned and operated in foreign countries.