Company: LW
Filing Date: 2025-08-07
Form Type: ARS
Source: 0001679273-25-000063
Chunk: 97

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-08-07
Form: ARS
Chunk 97
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 is active. Level 2—Observable market-based inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. Level 3—Unobservable inputs for the asset or liability reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. See Note 11, Fair Value Measurements, for additional information. Foreign Currency Most of our foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues and expenses are translated into U.S. dollars using daily and monthly average exchange rates. 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 losses of $15.2 million and $28.6 million in fiscal 2025 and 2024, respectively, and a gain of $19.7 million in fiscal 2023. 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. (“LW EMEA”). These amounts were recorded in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings. 51

In fiscal 2024, we began entering into blue chip swap transactions in Argentina as a way to mitigate the impact of fluctuations in the currency rate of the Argentinian peso. We recorded gains of $21.1 million and $18.0 million in fiscal 2025 and 2024, respectively. These amounts were recorded in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings. Derivative Financial Instruments We use derivatives and other financial instruments to hedge a portion of our commodity and interest rate risks. We do not hold or issue derivatives and other financial instruments for trading purposes. Derivative instruments are reported in our Consolidated Balance Sheets at their fair values, unless the derivative instruments qualify for the normal purchase normal sale exception (“NPNS”) under GAAP and such exception has been elected. If the NPNS exception is elected, the fair values of such contracts are not recognized. Changes in commodity derivative instrument values are recognized in “Cost of sales” in our Consolidated Statements of Earnings. We do not designate