Document and Entity Information
Document and Entity Information - $ / shares | 6 Months Ended | |
Nov. 24, 2019 | Dec. 27, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 24, 2019 | |
Entity File Number | 1-37830 | |
Entity Registrant Name | LAMB WESTON HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1797411 | |
Entity Address, Address Line One | 599 S. Rivershore Lane | |
Entity Address, City or Town | Eagle | |
Entity Address, State or Province | ID | |
Entity Address, Postal Zip Code | 83616 | |
City Area Code | 208 | |
Local Phone Number | 938-1047 | |
Title of 12(b) Security | Common Stock, $1.00 par value | |
Trading Symbol | LW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,092,112 | |
Entity Listing, Par Value Per Share | $ 1 | |
Current Fiscal Year End Date | --05-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Central Index Key | 0001679273 |
Combined and Consolidated State
Combined and Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Condensed Combined and Consolidated Statements of Earnings | ||||
Net sales | $ 1,019.2 | $ 911.4 | $ 2,008.2 | $ 1,826.3 |
Net sales, type | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of sales | $ 734.1 | $ 662.4 | $ 1,474.5 | $ 1,346.7 |
Cost of sales, type | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 285.1 | $ 249 | $ 533.7 | $ 479.6 |
Selling, general and administrative expenses | 91.6 | 75 | 170.2 | 153 |
Income from operations | 193.5 | 174 | 363.5 | 326.6 |
Interest expense, net | 25.4 | 26.2 | 53.6 | 53 |
Income before income taxes and equity method earnings | 168.1 | 147.8 | 309.9 | 273.6 |
Income tax expense | 42.7 | 34 | 79.4 | 68.3 |
Equity method investment earnings | 15 | 10.2 | 25.6 | 30.1 |
Net income | 140.4 | 124 | 256.1 | 235.4 |
Less: Income attributable to noncontrolling interests | 5 | 8.6 | ||
Net income attributable to Lamb Weston Holdings, Inc. | $ 140.4 | $ 119 | $ 256.1 | $ 226.8 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.96 | $ 0.74 | $ 1.75 | $ 1.47 |
Diluted (in dollars per share) | $ 0.95 | $ 0.74 | $ 1.74 | $ 1.47 |
Combined and Consolidated Sta_2
Combined and Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Other comprehensive income (loss) Pre-Tax Amount: | ||||
Net income | $ 183.1 | $ 158 | $ 335.5 | $ 303.7 |
Reclassification of post-retirement benefits out of accumulated other comprehensive income (loss) | 0.2 | 0.2 | 0.4 | 0.4 |
Unrealized currency translation gains (losses) | (0.4) | (7.6) | (9.5) | (11.9) |
Comprehensive income (loss) | 182.9 | 150.6 | 326.4 | 292.2 |
Less: Comprehensive income attributable to noncontrolling interests | 5 | 8.6 | ||
Comprehensive income (loss) attributable to Lamb Weston Holdings, Inc. | 182.9 | 145.6 | 326.4 | 283.6 |
Other comprehensive income (loss) Tax (Expense) Benefit: | ||||
Net income | (42.7) | (34) | (79.4) | (68.3) |
Reclassification of post-retirement benefits out of accumulated other comprehensive income (loss) | (0.1) | (0.1) | (0.1) | |
Unrealized currency translation gains (losses) | 1 | 1 | ||
Comprehensive income (loss) | (41.8) | (34) | (78.5) | (68.4) |
Comprehensive income (loss) attributable to Lamb Weston Holdings, Inc. | (41.8) | (34) | (78.5) | (68.4) |
Other comprehensive income (loss) After Tax Amount: | ||||
Net income | 140.4 | 124 | 256.1 | 235.4 |
Reclassification of post-retirement benefits out of accumulated other comprehensive income (loss) | 0.1 | 0.2 | 0.3 | 0.3 |
Unrealized currency translation gains (losses) | 0.6 | (7.6) | (8.5) | (11.9) |
Comprehensive income (loss) | 141.1 | 116.6 | 247.9 | 223.8 |
Less: Comprehensive income attributable to noncontrolling interests | 5 | 8.6 | ||
Comprehensive income (loss) attributable to Lamb Weston Holdings, Inc. | $ 141.1 | $ 111.6 | $ 247.9 | $ 215.2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 23.8 | $ 12.2 |
Receivables, less allowance for doubtful accounts of $1.3 and $1.3 | 399.7 | 340.1 |
Inventories | 636 | 498.3 |
Prepaid expenses and other current assets | 47.8 | 110.9 |
Total current assets | 1,107.3 | 961.5 |
Property, plant and equipment, net | 1,552.3 | 1,597.8 |
Operating lease assets | 162.9 | |
Equity method investments | 257.9 | 224.6 |
Goodwill | 307.2 | 205.9 |
Intangible assets, net | 39.8 | 37.6 |
Other assets | 39.4 | 20.7 |
Total assets | 3,466.8 | 3,048.1 |
Current liabilities: | ||
Short-term borrowings | 9.9 | 8.4 |
Current portion of long-term debt and financing obligations | 36.1 | 38 |
Accounts payable | 406 | 289.2 |
Accrued liabilities | 217.4 | 217.2 |
Total current liabilities | 669.4 | 552.8 |
Long-term liabilities: | ||
Long-term debt and financing obligations, excluding current portion | 2,203.7 | 2,280.2 |
Deferred income taxes | 149.5 | 125.7 |
Other noncurrent liabilities | 243.1 | 94 |
Total long-term liabilities | 2,596.3 | 2,499.9 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock of $1.00 par value, 600,000,000 shares authorized; 146,837,024 and 146,654,827 shares issued | 146.8 | 146.7 |
Additional distributed capital | (877) | (890.3) |
Retained earnings | 1,021.9 | 803.6 |
Accumulated other comprehensive loss | (33.5) | (25.3) |
Treasury stock, at cost, 833,820 and 585,794 common shares | (57.1) | (39.3) |
Total stockholders' equity (deficit) | 201.1 | (4.6) |
Total liabilities and stockholders' equity | $ 3,466.8 | $ 3,048.1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Receivables | ||
Allowance for doubtful accounts | $ 1.3 | $ 1.3 |
Common stock | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, authorized shares | 600,000,000 | 600,000,000 |
Common stock, issued shares | 146,837,024 | 146,654,827 |
Treasury stock | ||
Treasury stock, common shares | 833,820 | 585,794 |
Combined and Consolidated Sta_3
Combined and Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common Stock | Treasury Stock | Additional Paid-in (Distributed) Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at the beginning of the period at May. 27, 2018 | $ 146.4 | $ (2.9) | $ (900.4) | $ 426.4 | $ (4.3) | $ (334.8) |
Balance at the beginning of the period (in shares) at May. 27, 2018 | 146,332,332 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Adoption of ASC | 13.7 | 13.7 | ||||
Increase in redemption value of noncontrolling interests in excess of earnings allocated | (10.9) | (10.9) | ||||
Dividends declared | (56) | (56) | ||||
Common stock issued | $ 0.2 | 0.9 | (0.1) | 1 | ||
Common stock issued (in shares) | 220,531 | |||||
Stock-settled, stock-based compensation expense | 9.2 | 9.2 | ||||
Common stock withheld to cover taxes | (4.4) | (4.4) | ||||
Common stock withheld to cover taxes (in shares) | (60,960) | |||||
Other | 0.3 | (0.4) | (0.1) | |||
Comprehensive income (loss) | 226.8 | (11.6) | 215.2 | |||
Balance at the end of the period at Nov. 25, 2018 | $ 146.6 | (7.3) | (900.9) | 610.4 | (15.9) | (167.1) |
Balance at the end of the period (in shares) at Nov. 25, 2018 | 146,491,903 | |||||
Balance at the beginning of the period at Aug. 26, 2018 | $ 146.6 | (6.8) | (896.4) | 519.7 | (8.5) | (245.4) |
Balance at the beginning of the period (in shares) at Aug. 26, 2018 | 146,447,756 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Increase in redemption value of noncontrolling interests in excess of earnings allocated | (10) | (10) | ||||
Dividends declared | (28) | (28) | ||||
Common stock issued | 0.3 | 0.3 | ||||
Common stock issued (in shares) | 51,064 | |||||
Stock-settled, stock-based compensation expense | 5 | 5 | ||||
Common stock withheld to cover taxes | (0.5) | (0.5) | ||||
Common stock withheld to cover taxes (in shares) | (6,917) | |||||
Other | 0.2 | (0.3) | (0.1) | |||
Comprehensive income (loss) | 119 | (7.4) | 111.6 | |||
Balance at the end of the period at Nov. 25, 2018 | $ 146.6 | (7.3) | (900.9) | 610.4 | (15.9) | (167.1) |
Balance at the end of the period (in shares) at Nov. 25, 2018 | 146,491,903 | |||||
Balance at the beginning of the period at May. 26, 2019 | $ 146.7 | (39.3) | (890.3) | 803.6 | (25.3) | (4.6) |
Balance at the beginning of the period (in shares) at May. 26, 2019 | 146,069,033 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Adoption of ASC | 20.5 | 20.5 | ||||
Dividends declared | (58.4) | (58.4) | ||||
Common stock issued | $ 0.1 | 0.1 | 0.2 | |||
Common stock issued (in shares) | 182,197 | |||||
Stock-settled, stock-based compensation expense | 12.6 | 12.6 | ||||
Repurchase of common stock and common stock withheld to cover taxes | (17.8) | (17.8) | ||||
Repurchase of common stock and common stock withheld to cover taxes (in shares) | (248,026) | |||||
Other | 0.6 | 0.1 | 0.7 | |||
Comprehensive income (loss) | 256.1 | (8.2) | 247.9 | |||
Balance at the end of the period at Nov. 24, 2019 | $ 146.8 | (57.1) | (877) | 1,021.9 | (33.5) | 201.1 |
Balance at the end of the period (in shares) at Nov. 24, 2019 | 146,003,204 | |||||
Balance at the beginning of the period at Aug. 25, 2019 | $ 146.8 | (46.7) | (884.7) | 911.1 | (34.2) | 92.3 |
Balance at the beginning of the period (in shares) at Aug. 25, 2019 | 146,062,722 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Dividends declared | (29.2) | (29.2) | ||||
Common stock issued | 0.2 | 0.2 | ||||
Common stock issued (in shares) | 76,787 | |||||
Stock-settled, stock-based compensation expense | 7.2 | 7.2 | ||||
Repurchase of common stock and common stock withheld to cover taxes | (10.4) | (10.4) | ||||
Repurchase of common stock and common stock withheld to cover taxes (in shares) | (136,305) | |||||
Other | 0.3 | (0.4) | (0.1) | |||
Comprehensive income (loss) | 140.4 | 0.7 | 141.1 | |||
Balance at the end of the period at Nov. 24, 2019 | $ 146.8 | $ (57.1) | $ (877) | $ 1,021.9 | $ (33.5) | $ 201.1 |
Balance at the end of the period (in shares) at Nov. 24, 2019 | 146,003,204 |
Combined and Consolidated Sta_4
Combined and Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Feb. 23, 2020 | Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Dividends | |||||
Dividends declared per common share (in dollars per share) | $ 0.23 | $ 0.20000 | $ 0.19125 | $ 0.40000 | $ 0.38250 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Nov. 24, 2019 | Nov. 25, 2018 | |
Cash flows from operating activities | ||
Net income | $ 256.1 | $ 235.4 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of intangibles and debt issuance costs | 91.7 | 77.2 |
Stock-settled, stock-based compensation expense | 12.6 | 9.2 |
Earnings of joint ventures in excess of distributions | (7.6) | (4.5) |
Deferred income taxes | 17.2 | 27.9 |
Other | 2 | 6.2 |
Changes in operating assets and liabilities, net of acquisition: | ||
Receivables | (55.2) | (28.2) |
Inventories | (133.4) | (149.4) |
Income taxes payable/receivable, net | 17.5 | 3.7 |
Prepaid expenses and other current assets | 46.3 | 51 |
Accounts payable | 126.4 | 114.8 |
Accrued liabilities | (28.3) | (26.5) |
Net cash provided by operating activities | 345.3 | 316.8 |
Cash flows from investing activities | ||
Acquisition of business, net of cash acquired | (116.7) | |
Additions to property, plant and equipment | (88.1) | (170.4) |
Additions to other long-term assets | (19.3) | |
Investment in equity method joint venture | (17.1) | |
Other | 1 | 1.7 |
Net cash used for investing activities | (240.2) | (168.7) |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 299.3 | |
Repayments of debt and financing obligations | (318.1) | (20.3) |
Dividends paid | (58.5) | (56) |
Repurchase of common stock and common stock withheld to cover taxes | (17.8) | (4.4) |
Proceeds (payments) of short-term borrowings, net | 1.4 | 4.3 |
Cash distributions paid to noncontrolling interest | (6.1) | |
Other | 0.1 | 1.1 |
Net cash used for financing activities | (93.6) | (81.4) |
Effect of exchange rate changes on cash and cash equivalents | 0.1 | (0.7) |
Net increase in cash and cash equivalents | 11.6 | 66 |
Cash and cash equivalents, beginning of the period | 12.2 | 55.6 |
Cash and cash equivalents, end of period | $ 23.8 | $ 121.6 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 24, 2019 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Lamb Weston Holdings, Inc. (“we,” “us,” “our,” the “Company,” or “Lamb Weston”), along with its joint venture partners, is a leading global producer, distributor, and marketer of value-added frozen potato products and is headquartered in Eagle, Idaho. We have four reportable segments: Global, Foodservice, Retail, and Other. See Note 15, Segments, for additional information on our reportable segments. Basis of Presentation The accompanying consolidated financial statements present the financial results of Lamb Weston for the thirteen and twenty-six weeks ended November 24, 2019 and November 25, 2018, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America. These financial statements are unaudited but include all adjustments (consisting only of normal recurring adjustments) that we consider necessary for a fair presentation of such financial statements. The preparation of financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. Results for interim periods should not be considered indicative of results for our full fiscal year, which ends the last Sunday in May. These financial statements and condensed notes should be read together with the combined and consolidated financial statements and notes in our Annual Report on Form 10-K for the fiscal year ended May 26, 2019 (the “Form 10-K”), which we filed with the Securities and Exchange Commission on July 25, 2019. Certain amounts in the prior period consolidated financial statements have been reclassified to conform with the current period presentation. New and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) modified retrospective Accounting Pronouncements Not Yet Adopted Receivables – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief financial assets previously measured at amortized cost using the fair value option. This guidance is effective concurrent with the adoption of ASU 2016-13. The adoption of this standard is not expected to have a significant impact on our financial statements. Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans There were no other accounting pronouncements recently issued that had or are expected to have a material impact on our financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Nov. 24, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 2. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per common share for the periods presented (dollars and shares in millions, except per share amounts): Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, 2019 2018 2019 2018 Numerator: Net income attributable to Lamb Weston Holdings, Inc. $ 140.4 $ 119.0 $ 256.1 $ 226.8 Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated, net of tax benefits (a) — 10.0 — 10.9 Net income available to Lamb Weston common stockholders $ 140.4 $ 109.0 $ 256.1 $ 215.9 Denominator: Basic weighted average common shares outstanding 146.2 146.6 146.2 146.5 Add: Dilutive effect of employee incentive plans (b) 0.9 0.8 0.9 0.8 Diluted weighted average common shares outstanding 147.1 147.4 147.1 147.3 Earnings per share (a) Basic $ 0.96 $ 0.74 $ 1.75 $ 1.47 Diluted $ 0.95 $ 0.74 $ 1.74 $ 1.47 (a) In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW, LLC (“Lamb Weston BSW”). Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018. During the thirteen and twenty-six weeks ended November 25, 2018, net income available to common stockholders and earnings per share included accretion expense, net of estimated tax benefits, of $9.5 million, or $0.06 per share, to increase the redeemable noncontrolling interest to the amount we agreed to pay to acquire the remaining interest in Lamb Weston BSW. While the accretion, net of estimated tax benefits, reduced net income available to Lamb Weston common stockholders and earnings per share, it did not impact net income in the Consolidated Statements of Earnings. (b) Potentially dilutive shares of common stock from 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 November 24, 2019 and November 25, 2018 , we did not have any stock-based awards that were antidilutive. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Nov. 24, 2019 | |
INCOME TAXES | |
INCOME TAXES | 3. INCOME TAXES Income tax expense was $42.7 million and $34.0 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $79.4 million and $68.3 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. The effective income tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was approximately 23.3% and 21.5% for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and approximately 23.7% and 22.5% for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively, in our Consolidated Statements of 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, permanent differences, and discrete items. Income Taxes Paid Income taxes paid, net of refunds, were $44.4 million and $36.0 million during the twenty-six weeks ended November 24, 2019 and November 25, 2018 , respectively. Unrecognized Tax Benefits There have been no material changes to the unrecognized tax benefits disclosed in Note 5, Income Taxes, of the Notes to Combined and Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of the Form 10-K, and we do not expect any significant changes to unrecognized tax benefits in the next 12 months. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Nov. 24, 2019 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES 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: materials, labor, and manufacturing overhead. The components of inventories were as follows (dollars in millions): November 24, May 26, 2019 2019 Raw materials and packaging $ 213.5 $ 93.1 Finished goods 386.7 371.4 Supplies and other 35.8 33.8 Inventories $ 636.0 $ 498.3 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Nov. 24, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 5. PROPERTY, PLANT AND EQUIPMENT The components of property, plant and equipment were as follows (dollars in millions): November 24, May 26, 2019 2019 Land and land improvements (a) $ 107.0 $ 142.2 Buildings, machinery, and equipment 2,606.8 2,542.3 Furniture, fixtures, office equipment, and other 106.8 105.2 Construction in progress 71.7 84.8 Property, plant and equipment, at cost 2,892.3 2,874.5 Less accumulated depreciation (1,340.0) (1,276.7) Property, plant and equipment, net $ 1,552.3 $ 1,597.8 (a) Effective May 27, 2019, we adopted ASC 842 and we eliminated $38.7 million of land, related to a sale leaseback, as part of the cumulative-effect adjustment. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. Depreciation expense was $43.9 million and $36.9 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $86.5 million and $73.7 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. At November 24, 2019 and May 26, 2019, purchases of property, plant and equipment included in accounts payable were $14.7 Interest capitalized within construction in progress for the thirteen weeks ended November 24, 2019 and November 25, 2018, were $0.7 |
LEASES
LEASES | 6 Months Ended |
Nov. 24, 2019 | |
LEASES | |
LEASES | 6. LEASES We lease various real estate, including certain operating facilities, warehouses, office space, and land. We also lease material handling equipment, vehicles, and certain other equipment. Our leases have remaining lease terms of one Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from these leases. Effective May 27, 2019, operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of the lease payments over the lease term. Our leases may include options to extend or terminate these leases. These options to extend are included in the lease term when it is reasonably certain that we will exercise that option. Some leases have variable payments, however, because they are not based on an index or rate, they are not included in lease assets and liabilities. Variable payments for leases of land and buildings primarily relate to common area maintenance, insurance, taxes, and utilities. Variable payments for equipment, vehicles, and leases within supply agreements primarily relate to usage, repairs, and maintenance. The components of total lease costs, net of an insignificant amount of sublease income, consisted of the following (dollars in millions): Thirteen Weeks Ended November 24, 2019 (a) Operating Finance Leases Leases Total Operating lease costs $ 6.6 $ — $ 6.6 Short-term, variable, and other lease costs, net 0.8 — 0.8 Amortization of lease assets — 0.8 0.8 Interest on lease liabilities — 0.2 0.2 Total lease costs, net $ 7.4 $ 1.0 $ 8.4 Twenty-Six Weeks Ended November 24, 2019 (a) Operating Finance Leases Leases Total Operating lease costs $ 11.4 $ — $ 11.4 Short-term, variable, and other lease costs, net 2.8 — 2.8 Amortization of lease assets — 1.5 1.5 Interest on lease liabilities — 0.4 0.4 Total lease costs, net $ 14.2 $ 1.9 $ 16.1 (a) Supply-chain-related lease costs are included in “Cost of sales” and the remainder is recorded in “Selling, general, and administrative expenses.” Interest on lease liabilities is included in “Interest expense, net,” in our Consolidated Statements of Earnings. Operating and finance leases, with terms greater than one year, were as follows (dollars in millions): As of November 24, 2019 Operating Finance Leases Leases Total Assets: Operating lease assets $ 162.9 $ — $ 162.9 Property, plant and equipment, net (a) — 12.6 12.6 Total leased assets $ 162.9 $ 12.6 $ 175.5 Liabilities: Lease liabilities due within one year: Accrued liabilities $ 23.5 $ — $ 23.5 Current portion of long-term debt and financing obligations — 2.4 2.4 Long-term lease liabilities: Other noncurrent liabilities 141.3 — 141.3 Long-term debt and financing obligations, excluding current portion — 12.1 12.1 Total lease liabilities $ 164.8 $ 14.5 $ 179.3 (a) Finance leases are net of accumulated amortization of $11.3 million. The maturities of our lease liabilities for operating and finance leases at November 24, 2019, were as follows (dollars in millions): Operating Finance Leases Leases Total 2020 (remainder of year) $ 14.5 $ 1.8 $ 16.3 2021 29.6 3.1 32.7 2022 25.7 2.8 28.5 2023 18.2 1.9 20.1 2024 17.8 1.1 18.9 2025 15.9 0.9 16.8 Thereafter 73.7 5.8 79.5 Total lease payments 195.4 17.4 212.8 Less: Interest (a) (30.6) (2.9) (33.5) Present value of lease liabilities $ 164.8 $ 14.5 $ 179.3 Weighted-average remaining lease term (years): 8.4 9.5 Weighted-average discount rate: 3.9% 3.3% (a) As the implicit rate is not readily determinable for most of our leases, we use an incremental borrowing rate to determine the initial present value of lease payments. We use a collateralized rate and apply the rate based on the currency of the lease, which is updated quarterly for the measurement of new lease liabilities. At May 26, 2019, minimum lease payments under non-cancellable leases with lease terms in excess of one year, and accounted for under the previous lease accounting standard, were as follows (dollars in millions): Operating Capital Leases Leases (a) Total 2020 $ 18.6 $ 7.5 $ 26.1 2021 16.5 7.2 23.7 2022 15.7 7.2 22.9 2023 10.5 6.4 16.9 2024 8.6 5.9 14.5 Thereafter 26.6 73.5 100.1 Total lease payments $ 96.5 $ 107.7 $ 204.2 Discount to present value (28.8) (28.8) Total lease liability $ 78.9 $ 175.4 Current portion of financing obligations (4.3) (4.3) Long-term financing obligations, excluding current portion $ 74.6 $ 171.1 (a) Includes unamortized portion of a deferred gain related to a sale leaseback that was eliminated from the Consolidated Balance Sheet as part of the cumulative-effect adjustment at adoption of ASC 842. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. Supplemental cash flow information related to leases was as follows (dollars in millions): Twenty-Six Weeks Ended November 24, 2019 Operating Finance Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities: Cash used for operating activities $ 11.1 $ — $ 11.1 Cash used for financing activities — 1.0 1.0 Noncash investing and financing activities: Asset obtained in exchange for new operating lease obligations 20.2 — 20.2 Assets obtained in exchange for new finance lease obligations — 1.9 1.9 |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Nov. 24, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | 7. ACQUISITIONS On July 2, 2019, we acquired 100% of the outstanding shares of a frozen potato processor in Australia for $116.7 million in cash. This added approximately 70 million pounds of production capacity to our manufacturing network. Net sales, income from operations, and total assets from this acquisition are not material to our consolidated net sales, income from operations, and total assets. Beginning in July 2019, operating results of this acquisition are included in our Global segment. We allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, of which $106.1 million, after final working capital adjustments, was allocated to goodwill (which is not |
INVESTMENTS IN JOINT VENTURES
INVESTMENTS IN JOINT VENTURES | 6 Months Ended |
Nov. 24, 2019 | |
INVESTMENTS IN JOINT VENTURES | |
INVESTMENTS IN JOINT VENTURES | 8. INVESTMENTS IN JOINT VENTURES Other Investments and Variable Interest Entities – Not Consolidated We hold a 50% ownership interest in Lamb-Weston/Meijer v.o.f. (“Lamb-Weston/Meijer”), a joint venture with Meijer Frozen Foods B.V., which is headquartered in the Netherlands and manufactures and sells frozen potato products principally in Europe. We also hold a 50% interest in Lamb-Weston/RDO Frozen (“Lamb Weston RDO”), a potato processing venture based in the United States. These investments are accounted for using equity method accounting. On October 15, 2019, we acquired a 50% ownership interest in Lamb Weston Alimentos Modernos S.A. (“LWAMSA”), a joint venture with Sociedad Commercial del Plata, which is headquartered in Argentina, for $27.3 million. We paid $17.1 million in the first half of fiscal 2020, and we expect to pay $5.5 million during the third quarter of fiscal 2020. The remaining $4.7 million, less any amounts for indemnified losses, is payable in October 2024. We recorded the amounts owed in “Accrued liabilities” and “Other noncurrent liabilities,” respectively, on our Consolidated Balance Sheet. LWAMSA manufactures and sells frozen potato products principally in South America. We account for the investment using equity method accounting. The carrying value of our equity method investments, which includes Lamb-Weston/Meijer, Lamb Weston RDO, and LWAMSA at November 24, 2019 and May 26, 2019, was $257.9 million and $224.6 million, respectively and are included in “Equity method investments” on our Consolidated Balance Sheets. For the thirteen weeks ended November 24, 2019 and November 25, 2018, we had sales to our equity method investments of $9.3 million and $7.6 million and payments to our equity method investments of $2.8 million and $3.2 million, respectively; and for the twenty-six weeks ended November 24, 2019 and November 25, 2018, we had sales to our equity method investments of $16.6 million and $14.1 million and payments to our equity method investments of $6.0 million and $5.9 million, respectively. Total dividends from our equity method investments were $7.8 million and $9.0 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $18.0 million and $25.6 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. Variable Interest Entity - Consolidated In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW. Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018. Prior to entering into the agreement, Lamb Weston BSW was considered a variable interest entity, and we determined that we were the primary beneficiary of the entity. Accordingly, we consolidated the financial statements of Lamb Weston BSW and deducted 50.01% of the operating results of the noncontrolling interests to arrive at “Net income attributable to Lamb Weston Holdings, Inc.” on our Consolidated Statements of Earnings. Lamb Weston and Lamb Weston BSW purchase potatoes and utilize storage facilities and water treatment services from a shareholder of Ochoa, our former partner of the Lamb Weston BSW joint venture. While we continue to purchase such goods and services, subsequent to November 2, 2018, the shareholder of Ochoa is no longer considered a related party. For the period up to November 2, 2018, the aggregate amounts of potato purchases were $7.1 million and $24.6 million for the thirteen and twenty-six weeks ended November 25, 2018, respectively. The aggregate amount of storage facilities and water treatment service costs were $1.3 million and $2.5 million for the thirteen and twenty-six weeks ended November 25, 2018, respectively. |
GOODWILL AND OTHER IDENTIFIABLE
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | 6 Months Ended |
Nov. 24, 2019 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | 9. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS The following table presents changes in goodwill balances, by segment, during the twenty-six weeks ended November 24, 2019 (dollars in millions): Global Foodservice Retail Other Total Balance at May 26, 2019 $ 147.7 $ 42.8 $ 10.9 $ 4.5 $ 205.9 Acquisition (a) 106.1 — — — 106.1 Foreign currency translation adjustment (4.8) — — — (4.8) Balance at November 24, 2019 $ 249.0 $ 42.8 $ 10.9 $ 4.5 $ 307.2 (a) In July 2019, we acquired a frozen potato processor in Australia and recorded $106.1 million of goodwill in our Global Segment. See Note 7, Acquisitions, for more information. Other identifiable intangible assets were as follows (dollars in millions): November 24, 2019 May 26, 2019 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Useful Life Carrying Accumulated (in years) Amount Amortization (in years) Amount Amortization Non-amortizing intangible assets (a) n/a $ 18.0 $ — n/a $ 18.0 $ — Amortizing intangible assets (b) 11.8 42.6 20.8 14 39.1 19.5 $ 60.6 $ 20.8 $ 57.1 $ 19.5 (a) Non-amortizing intangible assets represent brands and trademarks. (b) Amortizing intangible assets are principally composed of licensing agreements, brands, and customer relationships. Amortization expense was $0.8 million and $0.5 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $1.3 million and $1.1 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. Foreign intangible assets are affected by foreign currency translation. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Nov. 24, 2019 | |
ACCRUED LIABILITIES. | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES The components of accrued liabilities were as follows (dollars in millions): November 24, May 26, 2019 2019 Compensation and benefits $ 68.3 $ 92.4 Accrued trade promotions 54.3 48.6 Dividends payable 29.2 29.2 Current portion of operating lease liabilities (a) 23.5 — Franchise, property, and sales and use taxes 8.7 8.6 Accrued interest 6.7 7.6 Income taxes payable 2.0 0.5 Other 24.7 30.3 Accrued liabilities $ 217.4 $ 217.2 (a) Effective May 27, 2019, we adopted ASC 842, using the modified retrospective transition method and as a result we did not recast our prior period financial statements. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. |
DEBT AND FINANCING OBLIGATIONS
DEBT AND FINANCING OBLIGATIONS | 6 Months Ended |
Nov. 24, 2019 | |
DEBT AND FINANCING OBLIGATIONS | |
DEBT AND FINANCING OBLIGATIONS | 11. DEBT AND FINANCING OBLIGATIONS At November 24, 2019 and May 26, 2019, our debt, including financing obligations was as follows (dollars in millions): November 24, May 26, 2019 2019 Short-term borrowings: Revolving credit facility $ — $ 7.2 Other credit facilities 9.9 1.2 9.9 8.4 Long-term debt: Term loan facility, due 2021 285.9 599.1 Term loan facility, due 2024 296.3 — 4.625% senior notes, due 2024 833.0 833.0 4.875% senior notes, due 2026 833.0 833.0 2,248.2 2,265.1 Financing obligations: 4.35% lease financing obligation due May 2030 (a) — 65.3 Lease financing obligations due on various dates through 2040 (b) 14.5 13.6 14.5 78.9 Total debt and financing obligations 2,272.6 2,352.4 Debt issuance costs (22.9) (25.8) Short-term borrowings (9.9) (8.4) Current portion of long-term debt and financing obligations (36.1) (38.0) Long-term debt and financing obligations, excluding current portion $ 2,203.7 $ 2,280.2 (a) On May 27, 2019, we adopted ASC 842 and we eliminated this financing obligation, related to a sale leaseback, as part of the cumulative effect transition adjustment. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. (b) The interest rates on our lease financing obligations range from 2.77% to 3.68% as of November 24, 2019, and 2.72% to 4.33% as of May 26, 2019. Credit Facilities At November 24, 2019, we had no borrowings outstanding under our Revolving Credit Facility (the “Facility”) and $496.6 million of availability under the Facility, which is net of outstanding letters of credit of $3.4 million. For the twenty-six weeks ended November 24, 2019, borrowings under the Facility ranged from zero to $97.9 million and the weighted average interest rate for our outstanding borrowings under the Facility was 3.83%. New Term Loan Facility On June 28, 2019, we amended our credit agreement to refinance $300.0 million of the $599.1 million term loan facility outstanding at May 26, 2019 and entered into a new credit agreement providing for a $300.0 million term loan facility (“New Term Loan Agreement”), for a lower overall interest rate, including anticipated patronage dividends. The New Term Loan Agreement bears interest, before anticipated patronage dividends, at LIBOR or the Base Rate (each as defined in the New Term Loan Agreement) plus an applicable margin ranging from 1.625% to 2.375% for LIBOR-based loans and from 0.625% to 1.375% for Base Rate-based loans, depending upon our total net leverage ratio. The borrowings under the New Term Loan Agreement mature June 28, 2024, and the covenants, events of default, and guarantees are consistent with the Facility. The New Term Loan Agreement also provides for the ability, under certain circumstances, to add incremental facilities in an aggregate amount of up to $100.0 million. In connection with the refinancing, we capitalized $1.0 million of debt issuance costs. During the twenty-six weeks ended November 24, 2019, we recorded $1.7 million of expenses, in “Interest expense, net” for the write-off of debt issuance costs related to the portion of the Term loan facility due in 2021, that was paid in full. For the twenty-six weeks ended November 24, 2019 and November 25, 2018, we paid $52.6 million and $53.3 million of interest on debt, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Nov. 24, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 12. STOCK-BASED COMPENSATION The Compensation Committee (“the Committee”) of our Board of Directors administers our stock compensation plan. The Committee, in its discretion, authorizes grants of restricted stock, restricted stock units (“RSUs”), performance awards payable upon the attainment of specified performance goals (“Performance Shares”), dividend equivalents, and other stock-based awards. During the twenty-six weeks ended November 24, 2019, we granted 0.2 million and 0.1 million RSUs and Performance Shares, respectively, at an average grant date fair value of $68.03. As of November 24, 2019, 7.6 million shares were available for future grant under the plan. Our stock-based compensation expense is recorded in “Selling, general and administrative expenses.” Compensation expense for stock-based awards recognized in the Consolidated Statements of Earnings, net of forfeitures, was as follows (dollars in millions): Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, 2019 2018 2019 2018 Stock-settled RSUs $ 3.5 $ 2.7 $ 6.3 $ 4.9 Performance Shares 3.7 2.2 6.2 4.1 Stock options — 0.1 0.1 0.2 Stock-settled compensation expense 7.2 5.0 12.6 9.2 Cash-settled RSUs (a) — 1.6 1.0 3.7 Total compensation expense 7.2 6.6 13.6 12.9 Income tax benefit (b) (1.6) (1.5) (3.1) (3.0) Total compensation expense, net of tax benefit $ 5.6 $ 5.1 $ 10.5 $ 9.9 (a) All cash-settled RSUs are marked-to-market and presented within “Accrued liabilities” and “Other noncurrent liabilities” on our Consolidated Balance Sheets. (b) Income tax benefit represents the marginal tax rate. Based on estimates at November 24, 2019, total unrecognized compensation expense related to stock-based awards was as follows (dollars in millions): Remaining Weighted Unrecognized Average Compensation Recognition Expense Period (in years) Stock-settled RSUs $ 22.7 2.1 Performance Shares 16.4 1.9 Total unrecognized stock-based expense $ 39.1 2.0 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Nov. 24, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS For information about our fair value policies, methods and assumptions used in estimating the fair value of our financial assets and liabilities, see Note 1, Nature of Operations and Summary of Significant Accounting Policies and Note 12, Fair Value Measurements, of the Notes to Combined and Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of the Form 10-K. 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 (dollars in millions): As of November 24, 2019 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.5 $ — $ — $ 0.5 Derivative assets (a) — 2.4 — 2.4 Total assets $ 0.5 $ 2.4 $ — $ 2.9 Liabilities: Deferred compensation liabilities (b) $ — $ 19.3 $ — $ 19.3 Total liabilities $ — $ 19.3 $ — $ 19.3 As of May 26, 2019 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.5 $ — $ — $ 0.5 Derivative assets (a) — 0.4 — 0.4 Total assets $ 0.5 $ 0.4 $ — $ 0.9 Liabilities: Derivative liabilities (a) $ — $ 3.8 $ — $ 3.8 Deferred compensation liabilities (b) — 15.1 — 15.1 Total liabilities $ — $ 18.9 $ — $ 18.9 (a) Derivative assets and liabilities included in Level 2 primarily represent commodity swap and option contracts. The fair values of our Level 2 derivative assets and liabilities were determined using valuation models that use market observable inputs including interest rate curves and both forward and spot prices for commodities. (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. 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 November 24, 2019, we had $1,666.0 million of fixed-rate and $592.1 million of variable-rate debt outstanding. Based on current market rates, the fair value of our fixed-rate debt at November 24, 2019, was estimated to be $1,761.6 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. 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. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Nov. 24, 2019 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 14. STOCKHOLDERS’ EQUITY Share Repurchase Program In December 2018, our Board of Directors authorized a program, with no expiration date, to repurchase shares of our common stock in an amount not to exceed $250.0 million in the aggregate, on an opportunistic basis. During the thirteen weeks ended November 24, 2019, we repurchased 112,698 shares for $8.6 million, or a weighted-average price of $76.44 per share; and during the twenty-six weeks ended November 24, 2019, we purchased 185,200 shares for $13.4 million, or a weighted-average price of $72.61 per share. As of November 24, 2019, $204.7 million remained authorized for repurchase under the program. Dividends During the twenty-six weeks ended November 24, 2019, we paid $58.5 million of dividends to common stockholders. On November 29, 2019, we paid Accumulated Other Comprehensive Income (Loss) (“AOCI”) Changes in AOCI, net of taxes, as of November 24, 2019 were as follows (in millions). Foreign Accumulated Currency Pension and Other Translation Post-Retirement Comprehensive Gains (Losses) Benefits Loss Balance as of May 26, 2019 $ (20.3) $ (5.0) $ (25.3) Other comprehensive income before reclassifications, net of tax (8.5) — (8.5) Amounts reclassified out of AOCI, net of tax — 0.3 0.3 Net current-period other comprehensive income (loss) (8.5) 0.3 (8.2) Balance as of November 24, 2019 $ (28.8) $ (4.7) $ (33.5) Actuarial losses on pension and post-retirement benefits, net of tax, included in AOCI to be amortized over the next 12 months is a net loss of $0.7 million ($0.5 million after-tax). |
SEGMENTS
SEGMENTS | 6 Months Ended |
Nov. 24, 2019 | |
SEGMENTS | |
SEGMENTS | 15. SEGMENTS We have four operating segments, each of which is a reportable segment: Global, Foodservice, Retail, and Other. Our chief operating decision maker receives periodic management reports under this structure that generally focus on the nature and scope of our customers’ businesses, which enables operating decisions, performance assessment, and resource allocation decisions at the segment level. The reportable segments are each managed by a general manager and supported by a cross functional team assigned to support the segment. Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, (in millions) 2019 2018 2019 2018 Net sales Global $ 539.6 $ 470.0 $ 1,057.2 $ 936.8 Foodservice 304.9 279.7 610.3 577.5 Retail 132.1 123.9 261.4 240.1 Other 42.6 37.8 79.3 71.9 Total net sales 1,019.2 911.4 2,008.2 1,826.3 Product contribution margin (a) Global 128.9 112.4 231.6 206.9 Foodservice 111.3 97.4 213.8 199.4 Retail 28.5 25.9 57.4 48.6 Other (b) 10.4 7.2 20.1 12.2 279.1 242.9 522.9 467.1 Advertising and promotion expenses (a) 6.0 6.1 10.8 12.5 Gross profit 285.1 249.0 533.7 479.6 Selling, general and administrative expenses 91.6 75.0 170.2 153.0 Income from operations 193.5 174.0 363.5 326.6 Interest expense, net 25.4 26.2 53.6 53.0 Income tax expense 42.7 34.0 79.4 68.3 Equity method investment earnings 15.0 10.2 25.6 30.1 Net income 140.4 124.0 256.1 235.4 Less: Income attributable to noncontrolling interests (c) — 5.0 — 8.6 Net income attributable to Lamb Weston Holdings, Inc. $ 140.4 $ 119.0 $ 256.1 $ 226.8 (a) Product contribution margin represents net sales less cost of sales and advertising and promotion expenses. Product contribution margin includes advertising and promotion expenses because the amounts are directly associated with segment performance; it excludes general corporate expenses and interest expense because management believes these amounts are not directly associated with segment performance. (b) The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts. (c) In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW. Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018. Lamb Weston’s largest customer, McDonald’s Corporation, accounted for approximately |
COMMITMENTS, CONTINGENCIES, GUA
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | 6 Months Ended |
Nov. 24, 2019 | |
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | |
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | 16. 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 guarantees and indemnifications disclosed in Note 16, Commitments, Contingencies, Guarantees, and Legal Proceedings, of the Notes to Combined and Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of the Form 10-K. We are a party to 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. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 24, 2019 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements present the financial results of Lamb Weston for the thirteen and twenty-six weeks ended November 24, 2019 and November 25, 2018, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America. These financial statements are unaudited but include all adjustments (consisting only of normal recurring adjustments) that we consider necessary for a fair presentation of such financial statements. The preparation of financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. Results for interim periods should not be considered indicative of results for our full fiscal year, which ends the last Sunday in May. These financial statements and condensed notes should be read together with the combined and consolidated financial statements and notes in our Annual Report on Form 10-K for the fiscal year ended May 26, 2019 (the “Form 10-K”), which we filed with the Securities and Exchange Commission on July 25, 2019. Certain amounts in the prior period consolidated financial statements have been reclassified to conform with the current period presentation. |
Leases | We lease various real estate, including certain operating facilities, warehouses, office space, and land. We also lease material handling equipment, vehicles, and certain other equipment. Our leases have remaining lease terms of one |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings per common | Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, 2019 2018 2019 2018 Numerator: Net income attributable to Lamb Weston Holdings, Inc. $ 140.4 $ 119.0 $ 256.1 $ 226.8 Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated, net of tax benefits (a) — 10.0 — 10.9 Net income available to Lamb Weston common stockholders $ 140.4 $ 109.0 $ 256.1 $ 215.9 Denominator: Basic weighted average common shares outstanding 146.2 146.6 146.2 146.5 Add: Dilutive effect of employee incentive plans (b) 0.9 0.8 0.9 0.8 Diluted weighted average common shares outstanding 147.1 147.4 147.1 147.3 Earnings per share (a) Basic $ 0.96 $ 0.74 $ 1.75 $ 1.47 Diluted $ 0.95 $ 0.74 $ 1.74 $ 1.47 (a) In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW, LLC (“Lamb Weston BSW”). Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018. During the thirteen and twenty-six weeks ended November 25, 2018, net income available to common stockholders and earnings per share included accretion expense, net of estimated tax benefits, of $9.5 million, or $0.06 per share, to increase the redeemable noncontrolling interest to the amount we agreed to pay to acquire the remaining interest in Lamb Weston BSW. While the accretion, net of estimated tax benefits, reduced net income available to Lamb Weston common stockholders and earnings per share, it did not impact net income in the Consolidated Statements of Earnings. (b) Potentially dilutive shares of common stock from 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 November 24, 2019 and November 25, 2018 , we did not have any stock-based awards that were antidilutive. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
INVENTORIES | |
Schedule of components of inventories | November 24, May 26, 2019 2019 Raw materials and packaging $ 213.5 $ 93.1 Finished goods 386.7 371.4 Supplies and other 35.8 33.8 Inventories $ 636.0 $ 498.3 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of components of property, plant and equipment | November 24, May 26, 2019 2019 Land and land improvements (a) $ 107.0 $ 142.2 Buildings, machinery, and equipment 2,606.8 2,542.3 Furniture, fixtures, office equipment, and other 106.8 105.2 Construction in progress 71.7 84.8 Property, plant and equipment, at cost 2,892.3 2,874.5 Less accumulated depreciation (1,340.0) (1,276.7) Property, plant and equipment, net $ 1,552.3 $ 1,597.8 (a) Effective May 27, 2019, we adopted ASC 842 and we eliminated $38.7 million of land, related to a sale leaseback, as part of the cumulative-effect adjustment. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
LEASES | |
Schedule of leases | Thirteen Weeks Ended November 24, 2019 (a) Operating Finance Leases Leases Total Operating lease costs $ 6.6 $ — $ 6.6 Short-term, variable, and other lease costs, net 0.8 — 0.8 Amortization of lease assets — 0.8 0.8 Interest on lease liabilities — 0.2 0.2 Total lease costs, net $ 7.4 $ 1.0 $ 8.4 Twenty-Six Weeks Ended November 24, 2019 (a) Operating Finance Leases Leases Total Operating lease costs $ 11.4 $ — $ 11.4 Short-term, variable, and other lease costs, net 2.8 — 2.8 Amortization of lease assets — 1.5 1.5 Interest on lease liabilities — 0.4 0.4 Total lease costs, net $ 14.2 $ 1.9 $ 16.1 (a) Supply-chain-related lease costs are included in “Cost of sales” and the remainder is recorded in “Selling, general, and administrative expenses.” Interest on lease liabilities is included in “Interest expense, net,” in our Consolidated Statements of Earnings. |
Schedule of operating and finance leases, with terms greater than one year | As of November 24, 2019 Operating Finance Leases Leases Total Assets: Operating lease assets $ 162.9 $ — $ 162.9 Property, plant and equipment, net (a) — 12.6 12.6 Total leased assets $ 162.9 $ 12.6 $ 175.5 Liabilities: Lease liabilities due within one year: Accrued liabilities $ 23.5 $ — $ 23.5 Current portion of long-term debt and financing obligations — 2.4 2.4 Long-term lease liabilities: Other noncurrent liabilities 141.3 — 141.3 Long-term debt and financing obligations, excluding current portion — 12.1 12.1 Total lease liabilities $ 164.8 $ 14.5 $ 179.3 (a) Finance leases are net of accumulated amortization of $11.3 million. |
Schedule of maturities of lease liabilities for operating leases - ASC 842 | Operating Finance Leases Leases Total 2020 (remainder of year) $ 14.5 $ 1.8 $ 16.3 2021 29.6 3.1 32.7 2022 25.7 2.8 28.5 2023 18.2 1.9 20.1 2024 17.8 1.1 18.9 2025 15.9 0.9 16.8 Thereafter 73.7 5.8 79.5 Total lease payments 195.4 17.4 212.8 Less: Interest (a) (30.6) (2.9) (33.5) Present value of lease liabilities $ 164.8 $ 14.5 $ 179.3 Weighted-average remaining lease term (years): 8.4 9.5 Weighted-average discount rate: 3.9% 3.3% (a) As the implicit rate is not readily determinable for most of our leases, we use an incremental borrowing rate to determine the initial present value of lease payments. We use a collateralized rate and apply the rate based on the currency of the lease, which is updated quarterly for the measurement of new lease liabilities. |
Schedule of maturities of lease liabilities for finance leases - ASC 842 | Operating Finance Leases Leases Total 2020 (remainder of year) $ 14.5 $ 1.8 $ 16.3 2021 29.6 3.1 32.7 2022 25.7 2.8 28.5 2023 18.2 1.9 20.1 2024 17.8 1.1 18.9 2025 15.9 0.9 16.8 Thereafter 73.7 5.8 79.5 Total lease payments 195.4 17.4 212.8 Less: Interest (a) (30.6) (2.9) (33.5) Present value of lease liabilities $ 164.8 $ 14.5 $ 179.3 Weighted-average remaining lease term (years): 8.4 9.5 Weighted-average discount rate: 3.9% 3.3% (a) As the implicit rate is not readily determinable for most of our leases, we use an incremental borrowing rate to determine the initial present value of lease payments. We use a collateralized rate and apply the rate based on the currency of the lease, which is updated quarterly for the measurement of new lease liabilities. |
Schedule of maturities of lease liabilities for operating leases - ASC 840 | Operating Capital Leases Leases (a) Total 2020 $ 18.6 $ 7.5 $ 26.1 2021 16.5 7.2 23.7 2022 15.7 7.2 22.9 2023 10.5 6.4 16.9 2024 8.6 5.9 14.5 Thereafter 26.6 73.5 100.1 Total lease payments $ 96.5 $ 107.7 $ 204.2 Discount to present value (28.8) (28.8) Total lease liability $ 78.9 $ 175.4 Current portion of financing obligations (4.3) (4.3) Long-term financing obligations, excluding current portion $ 74.6 $ 171.1 (a) Includes unamortized portion of a deferred gain related to a sale leaseback that was eliminated from the Consolidated Balance Sheet as part of the cumulative-effect adjustment at adoption of ASC 842. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. |
Schedule of maturities of lease liabilities for capital leases - ASC 840 | Operating Capital Leases Leases (a) Total 2020 $ 18.6 $ 7.5 $ 26.1 2021 16.5 7.2 23.7 2022 15.7 7.2 22.9 2023 10.5 6.4 16.9 2024 8.6 5.9 14.5 Thereafter 26.6 73.5 100.1 Total lease payments $ 96.5 $ 107.7 $ 204.2 Discount to present value (28.8) (28.8) Total lease liability $ 78.9 $ 175.4 Current portion of financing obligations (4.3) (4.3) Long-term financing obligations, excluding current portion $ 74.6 $ 171.1 (a) Includes unamortized portion of a deferred gain related to a sale leaseback that was eliminated from the Consolidated Balance Sheet as part of the cumulative-effect adjustment at adoption of ASC 842. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. |
Schedule of supplemental cash flow information related to leases | Twenty-Six Weeks Ended November 24, 2019 Operating Finance Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities: Cash used for operating activities $ 11.1 $ — $ 11.1 Cash used for financing activities — 1.0 1.0 Noncash investing and financing activities: Asset obtained in exchange for new operating lease obligations 20.2 — 20.2 Assets obtained in exchange for new finance lease obligations — 1.9 1.9 |
GOODWILL AND OTHER IDENTIFIAB_2
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Global Foodservice Retail Other Total Balance at May 26, 2019 $ 147.7 $ 42.8 $ 10.9 $ 4.5 $ 205.9 Acquisition (a) 106.1 — — — 106.1 Foreign currency translation adjustment (4.8) — — — (4.8) Balance at November 24, 2019 $ 249.0 $ 42.8 $ 10.9 $ 4.5 $ 307.2 (a) In July 2019, we acquired a frozen potato processor in Australia and recorded $106.1 million of goodwill in our Global Segment. See Note 7, Acquisitions, for more information. |
Schedule of other identifiable intangible assets, non-amortizing intangible assets | November 24, 2019 May 26, 2019 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Useful Life Carrying Accumulated (in years) Amount Amortization (in years) Amount Amortization Non-amortizing intangible assets (a) n/a $ 18.0 $ — n/a $ 18.0 $ — Amortizing intangible assets (b) 11.8 42.6 20.8 14 39.1 19.5 $ 60.6 $ 20.8 $ 57.1 $ 19.5 (a) Non-amortizing intangible assets represent brands and trademarks. (b) Amortizing intangible assets are principally composed of licensing agreements, brands, and customer relationships. Amortization expense was $0.8 million and $0.5 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $1.3 million and $1.1 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. Foreign intangible assets are affected by foreign currency translation. |
Schedule of other identifiable intangible assets, amortizing intangible assets | November 24, 2019 May 26, 2019 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Useful Life Carrying Accumulated (in years) Amount Amortization (in years) Amount Amortization Non-amortizing intangible assets (a) n/a $ 18.0 $ — n/a $ 18.0 $ — Amortizing intangible assets (b) 11.8 42.6 20.8 14 39.1 19.5 $ 60.6 $ 20.8 $ 57.1 $ 19.5 (a) Non-amortizing intangible assets represent brands and trademarks. (b) Amortizing intangible assets are principally composed of licensing agreements, brands, and customer relationships. Amortization expense was $0.8 million and $0.5 million for the thirteen weeks ended November 24, 2019 and November 25, 2018, respectively; and $1.3 million and $1.1 million for the twenty-six weeks ended November 24, 2019 and November 25, 2018, respectively. Foreign intangible assets are affected by foreign currency translation. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
ACCRUED LIABILITIES. | |
Schedule of components of accrued liabilities | November 24, May 26, 2019 2019 Compensation and benefits $ 68.3 $ 92.4 Accrued trade promotions 54.3 48.6 Dividends payable 29.2 29.2 Current portion of operating lease liabilities (a) 23.5 — Franchise, property, and sales and use taxes 8.7 8.6 Accrued interest 6.7 7.6 Income taxes payable 2.0 0.5 Other 24.7 30.3 Accrued liabilities $ 217.4 $ 217.2 (a) Effective May 27, 2019, we adopted ASC 842, using the modified retrospective transition method and as a result we did not recast our prior period financial statements. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. |
DEBT AND FINANCING OBLIGATIONS
DEBT AND FINANCING OBLIGATIONS (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
DEBT AND FINANCING OBLIGATIONS | |
Schedule of debt, including financing obligations | November 24, May 26, 2019 2019 Short-term borrowings: Revolving credit facility $ — $ 7.2 Other credit facilities 9.9 1.2 9.9 8.4 Long-term debt: Term loan facility, due 2021 285.9 599.1 Term loan facility, due 2024 296.3 — 4.625% senior notes, due 2024 833.0 833.0 4.875% senior notes, due 2026 833.0 833.0 2,248.2 2,265.1 Financing obligations: 4.35% lease financing obligation due May 2030 (a) — 65.3 Lease financing obligations due on various dates through 2040 (b) 14.5 13.6 14.5 78.9 Total debt and financing obligations 2,272.6 2,352.4 Debt issuance costs (22.9) (25.8) Short-term borrowings (9.9) (8.4) Current portion of long-term debt and financing obligations (36.1) (38.0) Long-term debt and financing obligations, excluding current portion $ 2,203.7 $ 2,280.2 (a) On May 27, 2019, we adopted ASC 842 and we eliminated this financing obligation, related to a sale leaseback, as part of the cumulative effect transition adjustment. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information. (b) The interest rates on our lease financing obligations range from 2.77% to 3.68% as of November 24, 2019, and 2.72% to 4.33% as of May 26, 2019. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
STOCK-BASED COMPENSATION | |
Schedule of compensation expenses for stock-based awards recognized, net of forfeitures | Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, 2019 2018 2019 2018 Stock-settled RSUs $ 3.5 $ 2.7 $ 6.3 $ 4.9 Performance Shares 3.7 2.2 6.2 4.1 Stock options — 0.1 0.1 0.2 Stock-settled compensation expense 7.2 5.0 12.6 9.2 Cash-settled RSUs (a) — 1.6 1.0 3.7 Total compensation expense 7.2 6.6 13.6 12.9 Income tax benefit (b) (1.6) (1.5) (3.1) (3.0) Total compensation expense, net of tax benefit $ 5.6 $ 5.1 $ 10.5 $ 9.9 (a) All cash-settled RSUs are marked-to-market and presented within “Accrued liabilities” and “Other noncurrent liabilities” on our Consolidated Balance Sheets. (b) Income tax benefit represents the marginal tax rate. |
Schedule of total unrecognized compensation expense, net of estimated forfeitures, related to stock-based payments | Remaining Weighted Unrecognized Average Compensation Recognition Expense Period (in years) Stock-settled RSUs $ 22.7 2.1 Performance Shares 16.4 1.9 Total unrecognized stock-based expense $ 39.1 2.0 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value on recurring basis | As of November 24, 2019 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.5 $ — $ — $ 0.5 Derivative assets (a) — 2.4 — 2.4 Total assets $ 0.5 $ 2.4 $ — $ 2.9 Liabilities: Deferred compensation liabilities (b) $ — $ 19.3 $ — $ 19.3 Total liabilities $ — $ 19.3 $ — $ 19.3 As of May 26, 2019 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.5 $ — $ — $ 0.5 Derivative assets (a) — 0.4 — 0.4 Total assets $ 0.5 $ 0.4 $ — $ 0.9 Liabilities: Derivative liabilities (a) $ — $ 3.8 $ — $ 3.8 Deferred compensation liabilities (b) — 15.1 — 15.1 Total liabilities $ — $ 18.9 $ — $ 18.9 (a) Derivative assets and liabilities included in Level 2 primarily represent commodity swap and option contracts. The fair values of our Level 2 derivative assets and liabilities were determined using valuation models that use market observable inputs including interest rate curves and both forward and spot prices for commodities. (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. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
STOCKHOLDERS' EQUITY | |
Schedule of changes in AOCI, net of tax | Foreign Accumulated Currency Pension and Other Translation Post-Retirement Comprehensive Gains (Losses) Benefits Loss Balance as of May 26, 2019 $ (20.3) $ (5.0) $ (25.3) Other comprehensive income before reclassifications, net of tax (8.5) — (8.5) Amounts reclassified out of AOCI, net of tax — 0.3 0.3 Net current-period other comprehensive income (loss) (8.5) 0.3 (8.2) Balance as of November 24, 2019 $ (28.8) $ (4.7) $ (33.5) |
SEGMENTS (Tables)
SEGMENTS (Tables) | 6 Months Ended |
Nov. 24, 2019 | |
SEGMENTS | |
Schedule of segment information | Thirteen Weeks Ended Twenty-Six Weeks Ended November 24, November 25, November 24, November 25, (in millions) 2019 2018 2019 2018 Net sales Global $ 539.6 $ 470.0 $ 1,057.2 $ 936.8 Foodservice 304.9 279.7 610.3 577.5 Retail 132.1 123.9 261.4 240.1 Other 42.6 37.8 79.3 71.9 Total net sales 1,019.2 911.4 2,008.2 1,826.3 Product contribution margin (a) Global 128.9 112.4 231.6 206.9 Foodservice 111.3 97.4 213.8 199.4 Retail 28.5 25.9 57.4 48.6 Other (b) 10.4 7.2 20.1 12.2 279.1 242.9 522.9 467.1 Advertising and promotion expenses (a) 6.0 6.1 10.8 12.5 Gross profit 285.1 249.0 533.7 479.6 Selling, general and administrative expenses 91.6 75.0 170.2 153.0 Income from operations 193.5 174.0 363.5 326.6 Interest expense, net 25.4 26.2 53.6 53.0 Income tax expense 42.7 34.0 79.4 68.3 Equity method investment earnings 15.0 10.2 25.6 30.1 Net income 140.4 124.0 256.1 235.4 Less: Income attributable to noncontrolling interests (c) — 5.0 — 8.6 Net income attributable to Lamb Weston Holdings, Inc. $ 140.4 $ 119.0 $ 256.1 $ 226.8 (a) Product contribution margin represents net sales less cost of sales and advertising and promotion expenses. Product contribution margin includes advertising and promotion expenses because the amounts are directly associated with segment performance; it excludes general corporate expenses and interest expense because management believes these amounts are not directly associated with segment performance. (b) The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts. (c) In November 2018, we entered into an agreement to acquire the remaining 50.01% interest in Lamb Weston BSW. Our Consolidated Statements of Earnings includes 100% of Lamb Weston BSW’s earnings beginning November 2, 2018. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reportable Segments (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Number of reportable segments | 4 | 4 | 4 | 4 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ASU 2016-02 - Practical Expedients (Details) | 6 Months Ended |
Nov. 24, 2019 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Lease, Practical Expedients, Package | true |
Lease, Practical Expedient, Lessor Single Lease Component | true |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ASU 2016-02 - Impact of Adoption (Details) - USD ($) $ in Millions | May 27, 2019 | Nov. 24, 2019 | Nov. 25, 2018 | May 26, 2019 |
New and Recently Issued Accounting Standards | ||||
Operating lease assets | $ 162.9 | |||
Operating lease liability | 164.8 | |||
Cumulative adjustment to increase retained earnings, net of tax | 20.5 | $ 13.7 | ||
Property, plant and equipment, net | 1,552.3 | $ 1,597.8 | ||
Long-term debt and financing obligations, excluding current portion | $ 2,203.7 | $ 2,280.2 | ||
Accounting Standards Update 2016-02 | ||||
New and Recently Issued Accounting Standards | ||||
Operating lease assets | $ 155 | |||
Cumulative adjustment to increase retained earnings, before tax | 26.6 | |||
Cumulative adjustment to increase retained earnings, net of tax | 20.5 | |||
Accounting Standards Update 2016-02 | Restatement Adjustment | ||||
New and Recently Issued Accounting Standards | ||||
Property, plant and equipment, net | (38.7) | |||
Long-term debt and financing obligations, excluding current portion | $ (65.3) |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New and Recently Issued Accounting Standards (Details) | 6 Months Ended |
Nov. 24, 2019 | |
Accounting Standards Update 2016-02 | |
New and Recently Issued Accounting Standards | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | May 27, 2019 |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected | Modified Retrospective |
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated | true |
Accounting Standards Update 2016-13 | |
New and Recently Issued Accounting Standards | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2018-14 | |
New and Recently Issued Accounting Standards | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Numerator: | ||||
Net income attributable to Lamb Weston Holdings, Inc. | $ 140.4 | $ 119 | $ 256.1 | $ 226.8 |
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated, net of tax benefits | 10 | 10.9 | ||
Net income available to Lamb Weston common stockholders | $ 140.4 | $ 109 | $ 256.1 | $ 215.9 |
Denominator: | ||||
Basic weighted average common shares outstanding | 146.2 | 146.6 | 146.2 | 146.5 |
Add: Dilutive effect of employee incentive plans | 0.9 | 0.8 | 0.9 | 0.8 |
Diluted weighted average common shares outstanding | 147.1 | 147.4 | 147.1 | 147.3 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.96 | $ 0.74 | $ 1.75 | $ 1.47 |
Diluted (in dollars per share) | $ 0.95 | $ 0.74 | $ 1.74 | $ 1.47 |
EARNINGS PER SHARE - Variable I
EARNINGS PER SHARE - Variable Interest Entity - Consolidated - Acquisition - Ownership Interest (Details) - Lamb Weston BSW, LLC | Nov. 02, 2018 | Nov. 01, 2018 |
Ownership interest acquired | ||
Ownership interest acquired (as a percent) | 50.01% | 50.01% |
Ownership interest after completion of the acquisition | ||
Ownership interest after completion of the acquisition (as a percent) | 100.00% |
EARNINGS PER SHARE - Variable_2
EARNINGS PER SHARE - Variable Interest Entity - Consolidated - Acquisition - Pro Forma (Details) - Lamb Weston BSW, LLC - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Nov. 25, 2018 | Nov. 25, 2018 | |
Pro Forma Information | ||
Net income available to common stockholders | $ (9.5) | $ (9.5) |
Basic and diluted earning per share (in dollars per share) | $ (0.06) | $ (0.06) |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Stock options | ||||
EARNINGS PER SHARE | ||||
Antidilutive securities (in shares) | 0 | 0 | 0 | 0 |
Stock-settled restricted stock units | ||||
EARNINGS PER SHARE | ||||
Antidilutive securities (in shares) | 0 | 0 | 0 | 0 |
Cash-settled RSUs | ||||
EARNINGS PER SHARE | ||||
Antidilutive securities (in shares) | 0 | 0 | 0 | 0 |
Performance shares | ||||
EARNINGS PER SHARE | ||||
Antidilutive securities (in shares) | 0 | 0 | 0 | 0 |
INCOME TAXES - General Informat
INCOME TAXES - General Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
INCOME TAXES | ||||
Income tax expense | $ 42.7 | $ 34 | $ 79.4 | $ 68.3 |
Effective income tax rate (as a percent) | 23.30% | 21.50% | 23.70% | 22.50% |
Federal statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% |
INCOME TAXES - Income Taxes Pai
INCOME TAXES - Income Taxes Paid (Details) - USD ($) $ in Millions | 6 Months Ended | |
Nov. 24, 2019 | Nov. 25, 2018 | |
INCOME TAXES | ||
Income taxes paid, net of refunds | $ 44.4 | $ 36 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Components of inventories | ||
Raw materials and packaging | $ 213.5 | $ 93.1 |
Finished goods | 386.7 | 371.4 |
Supplies and other | 35.8 | 33.8 |
Inventories | $ 636 | $ 498.3 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Components (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 2,892.3 | $ 2,874.5 |
Less accumulated depreciation | (1,340) | (1,276.7) |
Property, plant and equipment, net | 1,552.3 | 1,597.8 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 107 | 142.2 |
Buildings, machinery, and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 2,606.8 | 2,542.3 |
Furniture, fixtures, office equipment, and other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 106.8 | 105.2 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 71.7 | $ 84.8 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Sale Leaseback (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 27, 2019 | May 26, 2019 |
New and Recently Issued Accounting Standards | |||
Property, plant and equipment, net | $ 1,552.3 | $ 1,597.8 | |
Accounting Standards Update 2016-02 | Restatement Adjustment | |||
New and Recently Issued Accounting Standards | |||
Property, plant and equipment, net | $ (38.7) |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Property, Plant and Equipment | ||||
Depreciation expense | $ 43.9 | $ 36.9 | $ 86.5 | $ 73.7 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT - Purchases in Accounts Payable (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Nov. 24, 2019 | May 26, 2019 | |
Property, Plant and Equipment | ||
Purchases of property, plant and equipment included in accounts payable | $ 14.7 | $ 27.1 |
PROPERTY, PLANT AND EQUIPMENT_5
PROPERTY, PLANT AND EQUIPMENT - Interest Capitalized (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Construction in progress | ||||
Property, Plant and Equipment | ||||
Interest capitalized | $ 0.7 | $ 2.1 | $ 1.2 | $ 3.5 |
LEASES - Lease Term (Details)
LEASES - Lease Term (Details) | 6 Months Ended |
Nov. 24, 2019 | |
LEASES | |
Lease terms, low end of range | 1 year |
Lease terms, high end of range | 21 years |
LEASES - Options to Extend and
LEASES - Options to Extend and Terminate (Details) | 6 Months Ended |
Nov. 24, 2019 | |
LEASES | |
Lessee, Operating Lease, Option to Extend | true |
Lessee, Operating Lease, Option to Terminate | true |
LEASES - Lease Expense - Total
LEASES - Lease Expense - Total (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Nov. 24, 2019 | Nov. 24, 2019 | |
Lease expense | ||
Operating lease costs | $ 6.6 | $ 11.4 |
Short-term, variable, and other lease costs, net | 0.8 | 2.8 |
Amortization of lease assets | 0.8 | 1.5 |
Interest on lease liabilities | 0.2 | 0.4 |
Total lease costs, net | $ 8.4 | $ 16.1 |
LEASES - Lease Expense - Operat
LEASES - Lease Expense - Operating Leases and Finance Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Nov. 24, 2019 | Nov. 24, 2019 | |
Lease expense | ||
Total lease costs, operating leases | $ 7.4 | $ 14.2 |
Total lease costs, finance leases | 1 | 1.9 |
Total lease costs, net | $ 8.4 | $ 16.1 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities - Tabular Disclosure (Details) $ in Millions | Nov. 24, 2019USD ($) |
Assets and liabilities | |
Operating leases | $ 162.9 |
Finance leases | $ 12.6 |
Finance leases, consolidated balance sheet | us-gaap:PropertyPlantAndEquipmentNet |
Total right-of-use assets | $ 175.5 |
Operating leases, current | $ 23.5 |
Operating leases, current, consolidated balance sheet | us-gaap:AccruedLiabilitiesCurrent |
Operating leases, noncurrent | $ 141.3 |
Operating leases, noncurrent, consolidated balance sheet | us-gaap:OtherLiabilitiesNoncurrent |
Total operating leases | $ 164.8 |
Finance leases, current | $ 2.4 |
Finance leases, current, consolidated balance sheet | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent |
Finance leases, noncurrent | $ 12.1 |
Finance leases, noncurrent, consolidated balance sheet | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Total finance leases | $ 14.5 |
Total lease liability | $ 179.3 |
LEASES - Assets and Liabiliti_2
LEASES - Assets and Liabilities - Additional Information (Details) $ in Millions | Nov. 24, 2019USD ($) |
LEASES | |
Finance lease, right-of-use asset, accumulated amortization | $ 11.3 |
LEASES - ASC 842 - Operating Le
LEASES - ASC 842 - Operating Leases - Maturities of Lease Liabilities (Details) $ in Millions | Nov. 24, 2019USD ($) |
Operating Leases | |
2020 (remainder of year) | $ 14.5 |
2021 | 29.6 |
2022 | 25.7 |
2023 | 18.2 |
2024 | 17.8 |
2025 | 15.9 |
Thereafter | 73.7 |
Total lease payments | $ 195.4 |
LEASES - ASC 842 - Operating _2
LEASES - ASC 842 - Operating Leases - Discount to Present Value (Details) $ in Millions | Nov. 24, 2019USD ($) |
Operating leases | |
Total lease payments | $ 195.4 |
Discount to present value | (30.6) |
Operating leases | $ 164.8 |
LEASES - ASC 842 - Finance Leas
LEASES - ASC 842 - Finance Leases - Maturities of Lease Liabilities (Details) $ in Millions | Nov. 24, 2019USD ($) |
Finance leases | |
2020 (remainder of year) | $ 1.8 |
2021 | 3.1 |
2022 | 2.8 |
2023 | 1.9 |
2024 | 1.1 |
2025 | 0.9 |
Thereafter | 5.8 |
Total lease payments | $ 17.4 |
LEASES - ASC 842 - Finance Le_2
LEASES - ASC 842 - Finance Leases - Discount to Present Value (Details) $ in Millions | Nov. 24, 2019USD ($) |
Finance leases | |
Total lease payments | $ 17.4 |
Discount to present value | (2.9) |
Finance leases | $ 14.5 |
LEASES - ASC 842 - Total Leases
LEASES - ASC 842 - Total Leases - Maturities of Lease Liabilities (Details) $ in Millions | Nov. 24, 2019USD ($) |
LEASES | |
2020 (remainder of year) | $ 16.3 |
2021 | 32.7 |
2022 | 28.5 |
2023 | 20.1 |
2024 | 18.9 |
2025 | 16.8 |
Thereafter | 79.5 |
Total lease payments | $ 212.8 |
LEASES - ASC 842 - Total Leas_2
LEASES - ASC 842 - Total Leases - Discount to Present Value (Details) $ in Millions | Nov. 24, 2019USD ($) |
LEASES | |
Total lease payments | $ 212.8 |
Discount to present value | (33.5) |
Total lease liability | $ 179.3 |
LEASES - Weighted-average Remai
LEASES - Weighted-average Remaining Lease Term and Discount Rate (Details) | Nov. 24, 2019 |
LEASES | |
Weighted-average remaining lease term (years), operating leases | 8 years 4 months 24 days |
Weighted-average discount rate, operating leases (as a percent) | 3.90% |
Weighted-average remaining lease term (years), finance leases | 9 years 6 months |
Weighted-average discount rate, finance leases (as a percent) | 3.30% |
LEASES - ASC 840 - Operating Le
LEASES - ASC 840 - Operating Leases - Maturities of Lease Liabilities (Details) $ in Millions | May 26, 2019USD ($) |
Operating leases | |
2020 | $ 18.6 |
2021 | 16.5 |
2022 | 15.7 |
2023 | 10.5 |
2024 | 8.6 |
Thereafter | 26.6 |
Total lease payments | $ 96.5 |
LEASES - ASC 840 - Financing Ob
LEASES - ASC 840 - Financing Obligations - Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Financing Obligations | ||
2020 | $ 7.5 | |
2021 | 7.2 | |
2022 | 7.2 | |
2023 | 6.4 | |
2024 | 5.9 | |
Thereafter | 73.5 | |
Total lease payments | 107.7 | |
Discount to present value | (28.8) | |
Total lease liability | $ 14.5 | $ 78.9 |
LEASES - ASC 840 - Financing _2
LEASES - ASC 840 - Financing Obligations - Current and Noncurrent (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Financing Obligations | ||
Total lease liability | $ 14.5 | $ 78.9 |
Current portion of financing obligations | (4.3) | |
Long-term financing obligations, excluding current portion | $ 74.6 |
LEASES - ASC 840 - Total Leases
LEASES - ASC 840 - Total Leases - Maturities of Lease Liabilities (Details) $ in Millions | May 26, 2019USD ($) |
LEASES | |
2020 | $ 26.1 |
2021 | 23.7 |
2022 | 22.9 |
2023 | 16.9 |
2024 | 14.5 |
Thereafter | 100.1 |
Total lease payments | 204.2 |
Discount to present value | (28.8) |
Total lease liability | $ 175.4 |
LEASES - ASC 840 - Total Leas_2
LEASES - ASC 840 - Total Leases - Current and Noncurrent (Details) $ in Millions | May 26, 2019USD ($) |
LEASES | |
Total lease liability | $ 175.4 |
Current portion of financing obligations | (4.3) |
Long-term financing obligations, excluding current portion | $ 171.1 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) $ in Millions | 6 Months Ended |
Nov. 24, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Cash used for operating activities | $ 11.1 |
Cash paid for amounts included in the measurement of lease liabilities: | |
Cash used for financing activities | 1 |
Noncash investing and financing activities: | |
Asset obtained in exchange for new operating lease obligations | 20.2 |
Assets obtained in exchange for new finance lease obligations | $ 1.9 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) lb in Millions, $ in Millions | Jul. 02, 2019USD ($)lb | Nov. 24, 2019USD ($) | May 26, 2019USD ($) |
Purchase price allocation | |||
Goodwill | $ 307.2 | $ 205.9 | |
Frozen Potato Processor in Australia, Acquired 2 July 2019 | |||
Ownership interest acquired | |||
Ownership interest acquired (as a percent) | 100.00% | ||
Consideration transferred | |||
Consideration transferred | $ 116.7 | ||
Increase in production capacity | lb | 70 | ||
Purchase price allocation | |||
Goodwill | $ 106.1 | ||
Goodwill deductible for tax purposes | 0 | ||
Intangible assets | $ 3.7 | ||
Weighted average life | 10 years |
INVESTMENTS IN JOINT VENTURES -
INVESTMENTS IN JOINT VENTURES - Other Investments and Variable Interest Entity - Not Consolidated (Details) - USD ($) $ in Millions | Oct. 15, 2019 | Feb. 23, 2020 | Nov. 24, 2019 |
Variable Interest Entity, Not Primary Beneficiary | Lamb-Weston Meijer v.o.f. | |||
Other Investments and Variable Interest Entity - Not Consolidated | |||
Ownership interest (as a percent) | 50.00% | ||
Variable Interest Entity, Not Primary Beneficiary | Lamb-Weston RDO Frozen | |||
Other Investments and Variable Interest Entity - Not Consolidated | |||
Ownership interest (as a percent) | 50.00% | ||
LWAMSA | |||
Other Investments and Variable Interest Entity - Not Consolidated | |||
Ownership interest acquired (as a percent) | 50.00% | ||
Consideration transferred | $ 27.3 | ||
Cash paid of purchase price | $ 17.1 | ||
LWAMSA | Other non current liabilities | |||
Other Investments and Variable Interest Entity - Not Consolidated | |||
Cash payable | $ 4.7 | ||
LWAMSA | Subsequent Event | Accrued liabilities | |||
Other Investments and Variable Interest Entity - Not Consolidated | |||
Cash payable | $ 5.5 |
INVESTMENTS IN JOINT VENTURES_2
INVESTMENTS IN JOINT VENTURES - Transactions with Ventures - Carrying Value (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
INVESTMENTS IN JOINT VENTURES | ||
Carrying value of equity method investments | $ 257.9 | $ 224.6 |
INVESTMENTS IN JOINT VENTURES_3
INVESTMENTS IN JOINT VENTURES - Transactions with Ventures - Sales and Payments (Details) - Corporate Joint Venture - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Related Party Transactions | ||||
Net sales | $ 9.3 | $ 7.6 | $ 16.6 | $ 14.1 |
Payments | $ 2.8 | $ 3.2 | $ 6 | $ 5.9 |
INVESTMENTS IN JOINT VENTURES_4
INVESTMENTS IN JOINT VENTURES - Transactions with Ventures - Dividends Received (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
INVESTMENTS IN JOINT VENTURES | ||||
Dividends received from equity method investments | $ 7.8 | $ 9 | $ 18 | $ 25.6 |
INVESTMENTS IN JOINT VENTURES_5
INVESTMENTS IN JOINT VENTURES - Variable Interest Entity - Consolidated - Acquisition - Ownership Interest (Details) - Lamb Weston BSW, LLC | Nov. 02, 2018 | Nov. 01, 2018 |
Ownership interest acquired | ||
Ownership interest acquired (as a percent) | 50.01% | 50.01% |
Ownership interest after completion of the acquisition | ||
Ownership interest after completion of the acquisition (as a percent) | 100.00% |
INVESTMENTS IN JOINT VENTURES_6
INVESTMENTS IN JOINT VENTURES - Variable Interest Entity - Consolidated - Transactions (Details) - Co-venturer - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Nov. 25, 2018 | Nov. 25, 2018 | |
Related Party Transactions | ||
Purchases | $ 7.1 | $ 24.6 |
Costs | $ 1.3 | $ 2.5 |
GOODWILL AND OTHER IDENTIFIAB_3
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) $ in Millions | 6 Months Ended |
Nov. 24, 2019USD ($) | |
Goodwill | |
Balance at the beginning period | $ 205.9 |
Acquisition | 106.1 |
Foreign currency translation adjustment | (4.8) |
Balance at the end of the period | 307.2 |
Global | |
Goodwill | |
Balance at the beginning period | 147.7 |
Acquisition | 106.1 |
Foreign currency translation adjustment | (4.8) |
Balance at the end of the period | 249 |
Foodservice | |
Goodwill | |
Balance at the beginning period | 42.8 |
Balance at the end of the period | 42.8 |
Retail | |
Goodwill | |
Balance at the beginning period | 10.9 |
Balance at the end of the period | 10.9 |
Other | |
Goodwill | |
Balance at the beginning period | 4.5 |
Balance at the end of the period | $ 4.5 |
GOODWILL AND OTHER IDENTIFIAB_4
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Goodwill Acquired (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Jul. 31, 2019 | Nov. 24, 2019 | |
Goodwill | ||
Acquisition | $ 106.1 | |
Global | ||
Goodwill | ||
Acquisition | $ 106.1 | |
Frozen Potato Processor in Australia | Global | ||
Goodwill | ||
Acquisition | $ 106.1 |
GOODWILL AND OTHER IDENTIFIAB_5
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Weighted Average Useful Life (Details) | 6 Months Ended | 12 Months Ended |
Nov. 24, 2019 | May 26, 2019 | |
Weighted Average | ||
Amortizing Intangible Assets | ||
Weighted Average Useful Life, amortizing intangible assets (in years) | 11 years 9 months 18 days | 14 years |
GOODWILL AND OTHER IDENTIFIAB_6
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Other Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | ||
Gross Carrying Amount, non-amortizing intangible assets | $ 18 | $ 18 |
Gross Carrying Amount, amortizing intangible assets | 42.6 | 39.1 |
Total intangible assets, excluding goodwill | 60.6 | 57.1 |
Accumulated Amortization, amortizing intangible assets | $ 20.8 | $ 19.5 |
GOODWILL AND OTHER IDENTIFIAB_7
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | ||||
Amortization expense | $ 0.8 | $ 0.5 | $ 1.3 | $ 1.1 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
ACCRUED LIABILITIES. | ||
Compensation and benefits | $ 68.3 | $ 92.4 |
Accrued trade promotions | 54.3 | 48.6 |
Dividends payable | 29.2 | 29.2 |
Current portion of operating lease liabilities | 23.5 | |
Franchise, property, and sales and use taxes | 8.7 | 8.6 |
Accrued interest | 6.7 | 7.6 |
Income taxes payable | 2 | 0.5 |
Other | 24.7 | 30.3 |
Accrued liabilities | $ 217.4 | $ 217.2 |
DEBT AND FINANCING OBLIGATION_2
DEBT AND FINANCING OBLIGATIONS - Tabular Disclosure - Components (Details) - USD ($) $ in Millions | Nov. 24, 2019 | Jun. 28, 2019 | May 26, 2019 |
Debt and Financing Obligations | |||
Short-term borrowings | $ 9.9 | $ 8.4 | |
Long-term debt | 2,248.2 | 2,265.1 | |
Financing obligations | 14.5 | 78.9 | |
Total debt and financing obligations | 2,272.6 | 2,352.4 | |
4.625% Senior Notes, due 2024 | Senior Notes | |||
Debt and Financing Obligations | |||
Long-term debt | $ 833 | $ 833 | |
Interest rate (as a percent) | 4.625% | 4.625% | |
4.875% Senior Notes, due 2026 | Senior Notes | |||
Debt and Financing Obligations | |||
Long-term debt | $ 833 | $ 833 | |
Interest rate (as a percent) | 4.875% | 4.875% | |
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | |||
Debt and Financing Obligations | |||
Short-term borrowings | $ 0 | $ 7.2 | |
Term Loan Facility, due 2021 | Secured Debt | |||
Debt and Financing Obligations | |||
Long-term debt | 285.9 | 599.1 | |
Term Loan Facility, due 2021 | Secured Debt | |||
Debt and Financing Obligations | |||
Long-term debt | $ 599.1 | ||
Term Loan Facility, due 2024 | Secured Debt | |||
Debt and Financing Obligations | |||
Long-term debt | 296.3 | $ 300 | |
Other credit facilities | Line of Credit | |||
Debt and Financing Obligations | |||
Short-term borrowings | $ 9.9 | 1.2 | |
4.35% lease financing obligation due May 2030 | |||
Debt and Financing Obligations | |||
Financing obligations | $ 65.3 | ||
Interest rate (as a percent) | 4.35% | 4.35% | |
Lease financing obligations due on various dates through 2040 | |||
Debt and Financing Obligations | |||
Financing obligations | $ 14.5 | $ 13.6 | |
Lease financing obligations due on various dates through 2040 | Minimum | |||
Debt and Financing Obligations | |||
Interest rate (as a percent) | 2.77% | 2.72% | |
Lease financing obligations due on various dates through 2040 | Maximum | |||
Debt and Financing Obligations | |||
Interest rate (as a percent) | 3.68% | 4.33% |
DEBT AND FINANCING OBLIGATION_3
DEBT AND FINANCING OBLIGATIONS - Tabular Disclosure - Current and Noncurrent (Details) - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Debt and Financing Obligations | ||
Total debt and financing obligations | $ 2,272.6 | $ 2,352.4 |
Debt issuance costs | (22.9) | (25.8) |
Short-term borrowings | (9.9) | (8.4) |
Current portion of long-term debt and financing obligations | (36.1) | (38) |
Long-term debt and financing obligations, excluding current portion | $ 2,203.7 | $ 2,280.2 |
DEBT AND FINANCING OBLIGATION_4
DEBT AND FINANCING OBLIGATIONS - Credit Agreement (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Nov. 24, 2019 | May 26, 2019 |
Debt and Financing Obligations | |||
Total face value of debt | $ 2,248.2 | $ 2,265.1 | |
Short-term borrowings | 9.9 | 8.4 | |
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | |||
Debt and Financing Obligations | |||
Short-term borrowings | 0 | 7.2 | |
Available amount | 496.6 | ||
Letter of credit outstanding | 3.4 | ||
Minimum borrowings during the period | 0 | ||
Maximum borrowings during the period | $ 97.9 | ||
Average interest rate (as a percent) | 3.83% | ||
Term Loan Facility, due 2021 | Secured Debt | |||
Debt and Financing Obligations | |||
Total face value of debt | $ 285.9 | $ 599.1 | |
Term Loan Facility, due 2021 | Secured Debt | |||
Debt and Financing Obligations | |||
Face amount | $ 300 | ||
Total face value of debt | 599.1 | ||
Term Loan Facility, due 2024 | Secured Debt | |||
Debt and Financing Obligations | |||
Total face value of debt | 300 | 296.3 | |
New Term Loan Facility | Secured Debt | |||
Debt and Financing Obligations | |||
Increased amount in borrowing capacity | 100 | ||
Capitalized for debt issuance costs | $ 1 | ||
Interest expense, net | $ 1.7 | ||
New Term Loan Facility | Secured Debt | Minimum | LIBOR | |||
Debt and Financing Obligations | |||
Variable interest rate spread (as a percent) | 1.625% | ||
New Term Loan Facility | Secured Debt | Minimum | Base Rate | |||
Debt and Financing Obligations | |||
Variable interest rate spread (as a percent) | 0.625% | ||
New Term Loan Facility | Secured Debt | Maximum | LIBOR | |||
Debt and Financing Obligations | |||
Variable interest rate spread (as a percent) | 2.375% | ||
New Term Loan Facility | Secured Debt | Maximum | Base Rate | |||
Debt and Financing Obligations | |||
Variable interest rate spread (as a percent) | 1.375% |
DEBT AND FINANCING OBLIGATION_5
DEBT AND FINANCING OBLIGATIONS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 24, 2019 | Nov. 25, 2018 | |
Debt and Financing Obligations | ||
Interest paid | $ 52.6 | $ 53.3 |
STOCK-BASED COMPENSATION - Gene
STOCK-BASED COMPENSATION - General Information (Details) shares in Millions | 6 Months Ended |
Nov. 24, 2019$ / sharesshares | |
Stock-based Compensation | |
Granted (in dollars per share) | $ / shares | $ 68.03 |
Available for future grant (in shares) | 7.6 |
Restricted Stock Units (RSUs) | |
Stock-based Compensation | |
Granted (in shares) | 0.2 |
Performance shares | |
Stock-based Compensation | |
Granted (in shares) | 0.1 |
STOCK-BASED COMPENSATION - Comp
STOCK-BASED COMPENSATION - Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Compensation expense | ||||
Stock-settled compensation expense | $ 7.2 | $ 5 | $ 12.6 | $ 9.2 |
Cash-settled RSUs | 1.6 | 1 | 3.7 | |
Total compensation expense | 7.2 | 6.6 | 13.6 | 12.9 |
Income tax benefit | (1.6) | (1.5) | (3.1) | (3) |
Total compensation expense, net of tax benefit | 5.6 | 5.1 | 10.5 | 9.9 |
Stock-settled restricted stock units | ||||
Compensation expense | ||||
Stock-settled compensation expense | 3.5 | 2.7 | 6.3 | 4.9 |
Performance shares | ||||
Compensation expense | ||||
Stock-settled compensation expense | $ 3.7 | 2.2 | 6.2 | 4.1 |
Stock options | ||||
Compensation expense | ||||
Stock-settled compensation expense | $ 0.1 | $ 0.1 | $ 0.2 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Expense, Net of Estimated Forfeitures (Details) $ in Millions | 6 Months Ended |
Nov. 24, 2019USD ($) | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized Compensation Expense | $ 39.1 |
Remaining Weighted Average Recognition Period (in years) | 2 years |
Stock-settled restricted stock units | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized Compensation Expense | $ 22.7 |
Remaining Weighted Average Recognition Period (in years) | 2 years 1 month 6 days |
Performance shares | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized Compensation Expense | $ 16.4 |
Remaining Weighted Average Recognition Period (in years) | 1 year 10 months 24 days |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy (Details) - Recurring - USD ($) $ in Millions | Nov. 24, 2019 | May 26, 2019 |
Assets: | ||
Deferred compensation assets | $ 0.5 | $ 0.5 |
Derivative assets | 2.4 | 0.4 |
Total assets | 2.9 | 0.9 |
Liabilities: | ||
Derivative liabilities | 3.8 | |
Deferred compensation liabilities | 19.3 | 15.1 |
Total liabilities | 19.3 | 18.9 |
Level 1 | ||
Assets: | ||
Deferred compensation assets | 0.5 | 0.5 |
Total assets | 0.5 | 0.5 |
Level 2 | ||
Assets: | ||
Derivative assets | 2.4 | 0.4 |
Total assets | 2.4 | 0.4 |
Liabilities: | ||
Derivative liabilities | 3.8 | |
Deferred compensation liabilities | 19.3 | 15.1 |
Total liabilities | $ 19.3 | $ 18.9 |
FAIR VALUE MEASUREMENTS - Debt
FAIR VALUE MEASUREMENTS - Debt Outstanding (Details) $ in Millions | Nov. 24, 2019USD ($) |
Carrying Value | Fixed rate debt | |
Fair Value Measurements | |
Debt | $ 1,666 |
Carrying Value | Variable rate debt | |
Fair Value Measurements | |
Debt | 592.1 |
Level 2 | Fair Value | Fixed rate debt | |
Fair Value Measurements | |
Debt | $ 1,761.6 |
STOCKHOLDERS' EQUITY - Share Re
STOCKHOLDERS' EQUITY - Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |
Nov. 24, 2019 | Nov. 24, 2019 | Dec. 20, 2018 | |
Share Repurchase Program | |||
Authorization to repurchase common stock not to exceed | $ 250 | ||
Number of shares repurchased (in shares) | 112,698 | 185,200 | |
Treasury stock value | $ 8.6 | $ 13.4 | |
Remaining amount authorized fo share repurchase program | $ 204.7 | $ 204.7 | |
Weighted Average | |||
Share Repurchase Program | |||
Shares purchased, weighted-average price (in dollars per share) | $ 76.44 | $ 72.61 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends Paid (Details) - USD ($) $ in Millions | Nov. 29, 2019 | Nov. 24, 2019 | Nov. 25, 2018 |
Dividends | |||
Dividends paid | $ 29.2 | $ 58.5 | $ 56 |
STOCKHOLDERS' EQUITY - Divide_2
STOCKHOLDERS' EQUITY - Dividends Declared (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Feb. 23, 2020 | Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Dividends | |||||
Dividends declared per common share (in dollars per share) | $ 0.23 | $ 0.20000 | $ 0.19125 | $ 0.40000 | $ 0.38250 |
Dividends declared per common share, declared date | Dec. 19, 2019 | ||||
Dividends declared per common share, payable date | Feb. 28, 2020 | ||||
Dividends declared per common share, record date | Jan. 31, 2020 |
STOCKHOLDERS' EQUITY - Changes
STOCKHOLDERS' EQUITY - Changes in AOCI (Details) $ in Millions | 6 Months Ended |
Nov. 24, 2019USD ($) | |
Changes in AOCI: | |
Balance at the beginning of the period | $ (4.6) |
Balance at the end of the period | 201.1 |
Accumulated Other Comprehensive Loss | |
Changes in AOCI: | |
Balance at the beginning of the period | (25.3) |
Other comprehensive income before reclassifications, net of tax | (8.5) |
Amounts reclassified out of AOCI, net of tax | 0.3 |
Net current-period other comprehensive income (loss) | (8.2) |
Balance at the end of the period | (33.5) |
Foreign Currency Translation Gains (Losses) | |
Changes in AOCI: | |
Balance at the beginning of the period | (20.3) |
Other comprehensive income before reclassifications, net of tax | (8.5) |
Net current-period other comprehensive income (loss) | (8.5) |
Balance at the end of the period | (28.8) |
Pension and Post-Retirement Benefits | |
Changes in AOCI: | |
Balance at the beginning of the period | (5) |
Amounts reclassified out of AOCI, net of tax | 0.3 |
Net current-period other comprehensive income (loss) | 0.3 |
Balance at the end of the period | $ (4.7) |
STOCKHOLDERS' EQUITY - Settleme
STOCKHOLDERS' EQUITY - Settlement Gains on Pension and Post-retirement Benefits Included in AOCI (Details) $ in Millions | Nov. 24, 2019USD ($) |
STOCKHOLDERS' EQUITY | |
Net amount of settlement losses on pension and post-retirement benefits included in AOCI to be amortized over the next 12 months, before tax | $ (0.7) |
Net amount of settlement losses on pension and post-retirement benefits included in AOCI to be amortized over the next 12 months, after tax | $ (0.5) |
SEGMENTS - General Information
SEGMENTS - General Information (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Segments | ||||
Number of operating segments | 4 | 4 | 4 | 4 |
Number of reportable segments | 4 | 4 | 4 | 4 |
SEGMENTS - General Financial In
SEGMENTS - General Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Segment information | ||||
Net sales | $ 1,019.2 | $ 911.4 | $ 2,008.2 | $ 1,826.3 |
Product contribution margin | 279.1 | 242.9 | 522.9 | 467.1 |
Advertising and promotion expenses | 6 | 6.1 | 10.8 | 12.5 |
Gross profit | 285.1 | 249 | 533.7 | 479.6 |
Selling, general and administrative expenses | 91.6 | 75 | 170.2 | 153 |
Income from operations | 193.5 | 174 | 363.5 | 326.6 |
Interest expense, net | 25.4 | 26.2 | 53.6 | 53 |
Income tax expense | 42.7 | 34 | 79.4 | 68.3 |
Equity method investment earnings | 15 | 10.2 | 25.6 | 30.1 |
Net income | 140.4 | 124 | 256.1 | 235.4 |
Less: Income attributable to noncontrolling interests | 5 | 8.6 | ||
Net income attributable to Lamb Weston Holdings, Inc. | 140.4 | 119 | 256.1 | 226.8 |
Global | ||||
Segment information | ||||
Net sales | 539.6 | 470 | 1,057.2 | 936.8 |
Product contribution margin | 128.9 | 112.4 | 231.6 | 206.9 |
Foodservice | ||||
Segment information | ||||
Net sales | 304.9 | 279.7 | 610.3 | 577.5 |
Product contribution margin | 111.3 | 97.4 | 213.8 | 199.4 |
Retail | ||||
Segment information | ||||
Net sales | 132.1 | 123.9 | 261.4 | 240.1 |
Product contribution margin | 28.5 | 25.9 | 57.4 | 48.6 |
Other | ||||
Segment information | ||||
Net sales | 42.6 | 37.8 | 79.3 | 71.9 |
Product contribution margin | $ 10.4 | $ 7.2 | $ 20.1 | $ 12.2 |
SEGMENTS - Variable Interest En
SEGMENTS - Variable Interest Entity - Consolidated - Acquisition - Ownership Interest (Details) - Lamb Weston BSW, LLC | Nov. 02, 2018 | Nov. 01, 2018 |
Ownership interest acquired | ||
Ownership interest acquired (as a percent) | 50.01% | 50.01% |
Ownership interest after completion of the acquisition | ||
Ownership interest after completion of the acquisition (as a percent) | 100.00% |
SEGMENTS - Concentrations - Net
SEGMENTS - Concentrations - Net Sales (Details) | 3 Months Ended | 6 Months Ended | ||
Nov. 24, 2019 | Nov. 25, 2018 | Nov. 24, 2019 | Nov. 25, 2018 | |
Net Sales | Customer Concentration Risk | McDonald's Corporation | ||||
Segments | ||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% |