Lamb Weston Holdings, Inc.LW

Lamb Weston Holdings, Inc. Fair Value Disclosure

10-KFiled Jul 23, 20252 min read
FAIR VALUE MEASUREMENTS
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 May 25, 2025
(in millions)Level 1Level 2Level 3Fair Value
of Assets
(Liabilities)
Pension plan assets$23.4 $— $— $23.4 
Derivative assets (a)— 10.2 — 10.2 
Derivative liabilities (a)— (7.0)— (7.0)
Deferred compensation liabilities (b)— (27.0)— (27.0)
Fair value, net$23.4 $(23.8)$— $(0.4)
As of May 26, 2024
(in millions)Level 1Level 2Level 3Fair Value
of Assets
(Liabilities)
Pension plan assets$22.9 $0.1 $— $23.0 
Derivative assets (a)— 1.4 — 1.4 
Derivative liabilities (a)— (21.7)— (21.7)
Deferred compensation liabilities (b)— (27.6)— (27.6)
Fair value, net$22.9 $(47.8)$— $(24.9)
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(a)Derivative assets and liabilities included in Level 2 primarily represent commodity swaps, option contracts, 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. 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.
(b)The fair values of our Level 2 deferred compensation liabilities were valued using third-party valuations, which are based on the net asset values of mutual funds in our retirement plans. While the underlying assets are actively traded on an exchange, the funds are not. Deferred compensation liabilities are primarily presented within “Other noncurrent liabilities” on our Consolidated Balance Sheets.
The fair values of cash equivalents, receivables, accounts payable and short-term debt approximate their carrying amounts due to their short duration.
Non-financial assets such as property, plant and equipment, and intangible assets are recorded at fair value only if an impairment is recognized. Cost and equity investments are measured at fair value on a non-recurring basis.
At May 25, 2025, we had $2,976.6 million of fixed-rate and $1,166.4 million of variable-rate debt outstanding. Based on current market rates, the fair value of our fixed-rate debt at May 25, 2025 was estimated to be $2,848 million. 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 with an exception being the Term A-4 and Term A-5 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.

Historical Timeline

Fiscal YearFiled
2025Jul 23, 2025Showing above
2024Jul 24, 2024
2023Jul 25, 2023
2022Jul 27, 2022
2021Jul 27, 2021
2020Jul 28, 2020
2019Jul 25, 2019
2018Jul 26, 2018
2017Jul 25, 2017

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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