Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Aug. 30, 2020 | Sep. 30, 2020 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001679273 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Aug. 30, 2020 | |
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 | 146,339,062 | |
Entity Listing, Par Value Per Share | $ 1 | |
Current Fiscal Year End Date | --05-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Consolidated Statements of Earnings | ||
Net sales | $ 871.5 | $ 989 |
Net sales, type | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of sales | $ 657.7 | $ 740.4 |
Cost of sales, type | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 213.8 | $ 248.6 |
Selling, general and administrative expenses | 78.1 | 78.6 |
Income from operations | 135.7 | 170 |
Interest expense, net | 30.3 | 28.2 |
Income before income taxes and equity method earnings | 105.4 | 141.8 |
Income tax expense | 28 | 36.7 |
Equity method investment earnings | 11.9 | 10.6 |
Net income | $ 89.3 | $ 115.7 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.61 | $ 0.79 |
Diluted (in dollars per share) | $ 0.61 | $ 0.79 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Other comprehensive income (loss) - pre-tax amount: | ||
Net income | $ 117.3 | $ 152.4 |
Reclassification of post-retirement benefits out of accumulated other comprehensive income | 0.1 | 0.2 |
Unrealized currency translation gains (losses) | 41.9 | (9.1) |
Comprehensive income (loss) | 159.3 | 143.5 |
Other comprehensive income (loss) - tax (expense) benefit: | ||
Net income | (28) | (36.7) |
Unrealized currency translation gains (losses) | (2.5) | |
Comprehensive income (loss) | (30.5) | (36.7) |
Other comprehensive income (loss) - after tax amount: | ||
Net income | 89.3 | 115.7 |
Reclassification of post-retirement benefits out of accumulated other comprehensive income | 0.1 | 0.2 |
Unrealized currency translation gains (losses) | 39.4 | (9.1) |
Comprehensive income (loss) | $ 128.8 | $ 106.8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,032.5 | $ 1,364 |
Receivables, less allowance for doubtful accounts of $1.1 and $1.3 | 334.8 | 342.1 |
Inventories | 470.6 | 486.7 |
Prepaid expenses and other current assets | 53.1 | 109.8 |
Total current assets | 1,891 | 2,302.6 |
Property, plant and equipment, net | 1,511.5 | 1,535 |
Operating lease assets | 158.4 | 167 |
Equity method investments | 275 | 250.2 |
Goodwill | 323.3 | 303.8 |
Intangible assets, net | 38.5 | 38.3 |
Other assets | 74.9 | 65.4 |
Total assets | 4,272.6 | 4,662.3 |
Current liabilities: | ||
Short-term borrowings | 0.7 | 498.7 |
Current portion of long-term debt and financing obligations | 52.8 | 48.8 |
Accounts payable | 259.3 | 244.4 |
Accrued liabilities | 236.8 | 233 |
Total current liabilities | 549.6 | 1,024.9 |
Long-term liabilities: | ||
Long-term debt and financing obligations, excluding current portion | 2,980.8 | 2,992.6 |
Deferred income taxes | 157.2 | 152.5 |
Other noncurrent liabilities | 253 | 252.3 |
Total long-term liabilities | 3,391 | 3,397.4 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock of $1.00 par value, 600,000,000 shares authorized; 147,430,952 and 146,993,751 shares issued | 147.4 | 147 |
Additional distributed capital | (856.5) | (862.9) |
Retained earnings | 1,119.9 | 1,064.6 |
Accumulated other comprehensive loss | (1) | (40.5) |
Treasury stock, at cost, 1,106,009 and 954,858 common shares | (77.8) | (68.2) |
Total stockholders' equity | 332 | 240 |
Total liabilities and stockholders' equity | $ 4,272.6 | $ 4,662.3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Receivables | ||
Allowance for doubtful accounts | $ 1.1 | $ 1.3 |
Common stock | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, authorized shares | 600,000,000 | 600,000,000 |
Common stock, issued shares | 147,430,952 | 146,993,751 |
Treasury stock | ||
Treasury stock, common shares | 1,106,009 | 954,858 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common Stock | Treasury Stock | Additional Paid-in (Distributed) Capital | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Accumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at the beginning of the period at May. 26, 2019 | $ 146.7 | $ (39.3) | $ (890.3) | $ 20.5 | $ 803.6 | $ (25.3) | $ 20.5 | $ (4.6) |
Balance at the beginning of the period (in shares) at May. 26, 2019 | 146,069,033 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Dividends declared | (29.2) | (29.2) | ||||||
Common stock issued | $ 0.1 | (0.1) | ||||||
Common stock issued (in shares) | 105,410 | |||||||
Stock-settled, stock-based compensation expense | 5.4 | 5.4 | ||||||
Repurchase of common stock and common stock withheld to cover taxes | (7.4) | (7.4) | ||||||
Repurchase of common stock and common stock withheld to cover taxes (in shares) | (111,721) | |||||||
Other | 0.3 | 0.5 | 0.8 | |||||
Comprehensive income (loss) | 115.7 | (8.9) | 106.8 | |||||
Balance at the end of the period at Aug. 25, 2019 | $ 146.8 | (46.7) | (884.7) | 911.1 | (34.2) | 92.3 | ||
Balance at the end of the period (in shares) at Aug. 25, 2019 | 146,062,722 | |||||||
Balance at the beginning of the period at May. 31, 2020 | $ 147 | (68.2) | (862.9) | 1,064.6 | (40.5) | 240 | ||
Balance at the beginning of the period (in shares) at May. 31, 2020 | 146,038,893 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Dividends declared | (33.7) | (33.7) | ||||||
Common stock issued | $ 0.4 | 0.2 | 0.6 | |||||
Common stock issued (in shares) | 437,201 | |||||||
Stock-settled, stock-based compensation expense | 6 | 6 | ||||||
Common stock withheld to cover taxes | (9.6) | (9.6) | ||||||
Common stock withheld to cover taxes (in shares) | (151,151) | |||||||
Other | 0.2 | (0.3) | (0.1) | |||||
Comprehensive income (loss) | 89.3 | 39.5 | 128.8 | |||||
Balance at the end of the period at Aug. 30, 2020 | $ 147.4 | $ (77.8) | $ (856.5) | $ 1,119.9 | $ (1) | $ 332 | ||
Balance at the end of the period (in shares) at Aug. 30, 2020 | 146,324,943 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Nov. 29, 2020 | Aug. 30, 2020 | Aug. 25, 2019 | |
Dividends | |||
Dividends declared per common share (in dollars per share) | $ 0.23 | $ 0.23 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Cash flows from operating activities | ||
Net income | $ 89.3 | $ 115.7 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of intangibles and debt issuance costs | 46.9 | 46 |
Stock-settled, stock-based compensation expense | 6 | 5.4 |
Earnings of joint ventures in excess of distributions | (9.2) | (0.5) |
Deferred income taxes | 1.9 | 10.3 |
Other | 10.8 | 5.6 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Receivables | 9.1 | (27) |
Inventories | 18 | 35.6 |
Income taxes payable/receivable, net | 29 | 24.8 |
Prepaid expenses and other current assets | 38 | 43.3 |
Accounts payable | 18.7 | 7.7 |
Accrued liabilities | (7.9) | (28.4) |
Net cash provided by operating activities | 250.6 | 238.5 |
Cash flows from investing activities | ||
Acquisition of business, net of cash acquired | (116.9) | |
Additions to property, plant and equipment | (20.6) | (50.3) |
Other | (12.5) | (9.5) |
Net cash used for investing activities | (33.1) | (176.7) |
Cash flows from financing activities | ||
Repayments of short-term borrowings, net | 498.1 | 8.3 |
Dividends paid | (33.6) | (29.2) |
Repurchase of common stock and common stock withheld to cover taxes | (9.6) | (7.4) |
Repayments of debt and financing obligations | (9.2) | (309) |
Proceeds from issuance of debt | 299.3 | |
Other | 0.3 | (0.3) |
Net cash used for financing activities | (550.2) | (54.9) |
Effect of exchange rate changes on cash and cash equivalents | 1.2 | (0.1) |
Net increase (decrease) in cash and cash equivalents | (331.5) | 6.8 |
Cash and cash equivalents, beginning of the period | 1,364 | 12.2 |
Cash and cash equivalents, end of period | $ 1,032.5 | $ 19 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Aug. 30, 2020 | |
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 our 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 13, Segments, for additional information on our reportable segments. Basis of Presentation The accompanying unaudited Consolidated Financial Statements present the financial results of Lamb Weston for the thirteen weeks ended August 30, 2020 and August 25, 2019, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America. These financial statements include all adjustments that we consider necessary for a fair presentation of such financial statements and consist only of normal recurring adjustments. The preparation of financial statements involves the use of estimates and accruals. The inputs into our judgements and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. The actual results that we experience may differ materially 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 consolidated financial statements and notes in our Annual Report on Form 10-K for the fiscal year ended May 31, 2020 (the “Form 10-K”), which we filed with the Securities and Exchange Commission on July 28, 2020. New and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements Receivables – Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Accounting Pronouncements Not Yet Adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting 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 disclosures, and adds disclosure requirements identified as relevant to defined benefit pension and other postretirement plans. This guidance is effective for our fiscal 2021. The adoption of this standard is not expected to have a significant impact on our notes to consolidated financial statements. 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 | 3 Months Ended |
Aug. 30, 2020 | |
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 August 30, August 25, 2020 2019 Numerator: Net income $ 89.3 $ 115.7 Denominator: Basic weighted average common shares outstanding 146.3 146.2 Add: Dilutive effect of employee incentive plans (a) 0.8 0.8 Diluted weighted average common shares outstanding 147.1 147.0 Earnings per share Basic $ 0.61 $ 0.79 Diluted $ 0.61 $ 0.79 (a) 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 August 30, 2020, and August 25, 2019, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Aug. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | 3. INCOME TAXES Income tax expense was $28.0 million and $36.7 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, 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 23.9% and 24.1% for the thirteen weeks ended August 30, 2020 and August 25, 2019, 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 tax refunds, net of taxes paid were $2.8 million during the thirteen weeks ended August 30, 2020. Income taxes paid , net of refunds, were $1.5 million during the thirteen weeks ended August 25, 2019 . Unrecognized Tax Benefits There have been no material changes to the unrecognized tax benefits disclosed in Note 3, Income Taxes, of the Notes to 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 | 3 Months Ended |
Aug. 30, 2020 | |
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): August 30, May 31, 2020 2020 Raw materials and packaging $ 67.2 $ 106.2 Finished goods 363.2 339.2 Supplies and other 40.2 41.3 Inventories $ 470.6 $ 486.7 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Aug. 30, 2020 | |
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): August 30, May 31, 2020 2020 Land and land improvements $ 107.2 $ 107.2 Buildings, machinery, and equipment 2,688.9 2,670.1 Furniture, fixtures, office equipment, and other 112.1 107.1 Construction in progress 60.0 58.3 Property, plant and equipment, at cost 2,968.2 2,942.7 Less accumulated depreciation (1,456.7) (1,407.7) Property, plant and equipment, net $ 1,511.5 $ 1,535.0 Depreciation expense was $44.9 million and $42.6 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. At August 30, 2020 and May 31, 2020, purchases of property, plant and equipment included in accounts payable were $6.2 Interest capitalized within construction in progress for both the thirteen weeks ended August 30, 2020 and August 25, 2019, was $0.5 |
INVESTMENTS IN JOINT VENTURES
INVESTMENTS IN JOINT VENTURES | 3 Months Ended |
Aug. 30, 2020 | |
INVESTMENTS IN JOINT VENTURES | |
INVESTMENTS IN JOINT VENTURES | 6. INVESTMENTS IN JOINT VENTURES 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 hold a 50% interest in Lamb-Weston/RDO Frozen (“Lamb Weston RDO”), a potato processing venture based in the United States. We also hold a 50% interest in Lamb Weston Alimentos Modernos S.A. (“LWAMSA”), a joint venture with Sociedad Commercial del Plata, which is headquartered in Argentina. This joint venture manufactures and sells frozen potato products principally in South America. These investments are accounted for using equity method accounting. The carrying value of our equity method investments, which includes Lamb-Weston/Meijer, Lamb Weston RDO, and LWAMSA at August 30, 2020 and May 31, 2020, was $275.0 million and $250.2 million, respectively, and are included in “Equity method investments” on our Consolidated Balance Sheets. For the thirteen weeks ended August 30, 2020 and August 25, 2019, we had sales to our equity method investments of $3.0 million and $7.3 million, respectively, and payments to our equity method investments of $1.1 million and $3.2 million, respectively. Total dividends from our equity method investments were $2.7 million and $10.2 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. We have an agreement to share the costs of our global enterprise resource planning (“ERP”) system and related software and services with Lamb-Weston/Meijer. Under the terms of the agreement, Lamb-Weston/Meijer will pay us for the majority of their portion of the ERP costs in five equal annual payments, plus interest, beginning in the period the system is deployed at Lamb-Weston/Meijer. As of August 30, 2020, Lamb-Weston/Meijer’s portion of the ERP costs totaled $15.7 million. During fiscal 2021 and 2020, we received $2.0 million and $1.0 million from Lamb-Weston/Meijer, and we had $12.6 million and $12.0 million of receivables recorded on our Consolidated Balance Sheets as of August 30, 2020 and May 31, 2020. Of the $12.6 million and $12.0 million of receivables, $0.3 and $1.8 million were recorded in “Receivables, net” and $12.3 million and $10.2 million were recorded in “Other assets,” respectively. We expect the total receivable from Lamb-Weston/Meijer to increase as development and implementation of the ERP system progresses. |
GOODWILL AND OTHER IDENTIFIABLE
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | 3 Months Ended |
Aug. 30, 2020 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | 7. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS The following table presents changes in goodwill balances, by segment, during the thirteen weeks ended August 30, 2020 (dollars in millions): Global Foodservice Retail Other Total Balance at May 31, 2020 $ 245.6 $ 42.8 $ 10.9 $ 4.5 $ 303.8 Foreign currency translation adjustment 19.5 — — — 19.5 Balance at August 30, 2020 $ 265.1 $ 42.8 $ 10.9 $ 4.5 $ 323.3 Other identifiable intangible assets were as follows (dollars in millions): August 30, 2020 May 31, 2020 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Intangible Useful Life Carrying Accumulated Intangible (in years) Amount Amortization Assets, Net (in years) Amount Amortization Assets, Net Non-amortizing intangible assets (a) n/a $ 18.0 $ — $ 18.0 n/a $ 18.0 $ — $ 18.0 Amortizing intangible assets (b) 11 43.3 (22.8) 20.5 11 42.4 (22.1) 20.3 $ 61.3 $ (22.8) $ 38.5 $ 60.4 $ (22.1) $ 38.3 (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 $0.7 million and $0.5 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. Foreign intangible assets are affected by foreign currency translation. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Aug. 30, 2020 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 8. ACCRUED LIABILITIES The components of accrued liabilities were as follows (dollars in millions): August 30, May 31, 2020 2020 Compensation and benefits $ 51.5 $ 74.5 Accrued trade promotions 36.7 42.5 Accrued interest 34.0 8.7 Dividends payable to shareholders 33.7 33.6 Current portion of operating lease liabilities 28.8 28.4 Franchise, property, and sales and use taxes 12.1 9.4 Income taxes payable 11.0 1.3 Other 29.0 34.6 Accrued liabilities $ 236.8 $ 233.0 |
DEBT AND FINANCING OBLIGATIONS
DEBT AND FINANCING OBLIGATIONS | 3 Months Ended |
Aug. 30, 2020 | |
DEBT AND FINANCING OBLIGATIONS | |
DEBT AND FINANCING OBLIGATIONS | 9. DEBT AND FINANCING OBLIGATIONS At August 30, 2020 and May 31, 2020, our debt, including financing obligations was as follows (dollars in millions): August 30, May 31, 2020 2020 Short-term borrowings: Revolving credit facility $ — $ 495.0 Other credit facilities 0.7 3.7 0.7 498.7 Long-term debt: Term loan facility, due 2021 271.9 276.6 Term A-1 loan facility, due 2024 285.0 288.7 Term A-2 loan facility, due 2025 325.0 325.0 4.625% senior notes, due 2024 833.0 833.0 4.875% senior notes, due 2026 833.0 833.0 4.875% senior notes, due 2028 500.0 500.0 3,047.9 3,056.3 Financing obligations: Lease financing obligations due on various dates through 2040 (a) 12.7 13.3 12.7 13.3 Total debt and financing obligations 3,061.3 3,568.3 Debt issuance costs (27.0) (28.2) Short-term borrowings (0.7) (498.7) Current portion of long-term debt and financing obligations (52.8) (48.8) Long-term debt and financing obligations, excluding current portion $ 2,980.8 $ 2,992.6 (a) The interest rates on our lease financing obligations range from 2.31% to 4.10% at both August 30, 2020 and May 31, 2020. Revolving Credit Facility At August 30, 2020, we had no borrowings outstanding under our revolving credit facility and $495.1 million of availability under the facility, which is net of outstanding letters of credit of $4.9 million. For the thirteen weeks ended August 30, 2020, borrowings under the facility ranged from zero to $495.0 million and the weighted average interest rate for our outstanding borrowings under the facility was 1.68%. We paid $5.7 million of interest on debt for both the thirteen weeks ended August 30, 2020 and August 25, 2019. On September 17, 2020, we amended our credit agreement, dated as of November 9, 2016, relating to our existing revolving credit facility discussed above (“Amended Revolving Credit Facility”). The Amended Revolving Credit Facility, among other things, increases the aggregate principal amount to $750.0 million and extends the maturity date to September 17, 2023. In addition, we may add incremental term loan facilities, increase commitments and/or add new revolving commitments in an aggregate principal amount not to exceed the sum of (A) the greater of $600.0 million or 75% of our Consolidated EBITDA (as defined in the Amended Revolving Credit Facility) and (B) an amount based on our consolidated net leverage ratio. Borrowings under the Amended Revolving Credit Facility bear interest at LIBOR or the Base Rate (each as defined in the Amended Revolving Credit Facility) plus an applicable rate ranging from 1.25% to 2.25% for LIBOR-based loans and from 0.25% to 1.25% for Base Rate-based loans, depending upon our consolidated net leverage ratio. In addition to paying interest, we will pay an annual commitment fee for undrawn amounts at a rate of 0.20% to 0.40%, depending on our consolidated net leverage ratio. The Amended Revolving Credit Facility requires us to maintain a consolidated net leverage ratio no greater than 5.25 to 1.00, decreasing ratably to 4.50 to 1.00 on February 26, 2022 through maturity; and an interest coverage ratio no less than 2.75 to 1.00. In connection with the Amended Revolving Credit Facility, we repaid the outstanding $271.9 million term loan facility due in November 2021 with cash on hand. As of our fiscal month ended September 27, 2020, no borrowings were outstanding under the Amended Revolving Credit Facility. Term A-1 and A-2 Loan Facilities On September 23, 2020, in connection with the Amended Revolving Credit Facility, we amended the credit agreement, dated as of June 28, 2019, relating to our Term A-1 and A-2 Loan Facilities (“Term Loan Facilities”), to, among other things, modify the Term Loan Facilities to make conforming changes to the affirmative and negative covenants under the Term Loan Facilities. The financial covenants under the Term Loan Facilities remain unchanged, requiring a consolidated net leverage ratio no greater than 4.50 to 1.00 1.00 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Aug. 30, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 10. 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 units (“RSUs”), performance awards payable upon the attainment of specified performance goals (“Performance Shares”), dividend equivalents, and other stock-based awards. During the thirteen weeks ended August 30, 2020, we granted 0.2 million RSUs at an average grant date fair value of $59.45. As of August 30, 2020, 7.4 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 August 30, August 25, 2020 2019 Stock-settled RSUs $ 3.5 $ 2.8 Performance Shares 2.5 2.5 Stock options — 0.1 Stock-settled compensation expense 6.0 5.4 Cash-settled RSUs (a) — 1.0 Total compensation expense 6.0 6.4 Income tax benefit (b) (1.1) (1.2) Total compensation expense, net of tax benefit $ 4.9 $ 5.2 (a) All cash-settled RSUs are marked-to-market and presented within “Accrued liabilities” on our Consolidated Balance Sheets. (b) Income tax benefit represents the marginal tax rate, excluding non-deductible compensation. Based on estimates at August 30, 2020, 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 $ 26.1 2.3 Performance Shares 6.3 1.4 Total unrecognized stock-based expense $ 32.4 2.1 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Aug. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 11. 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 Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of the Form 10-K. The fair values of cash and cash equivalents, receivables, accounts payable and short-term debt approximate their carrying amounts due to their short duration. 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 August 30, 2020 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.1 $ — $ — $ 0.1 Derivative assets (a) — 2.6 — 2.6 Total assets $ 0.1 $ 2.6 $ — $ 2.7 Liabilities: Deferred compensation liabilities (b) — 21.1 — 21.1 Total liabilities $ — $ 21.1 $ — $ 21.1 As of May 31, 2020 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.1 $ — $ — $ 0.1 Total assets $ 0.1 $ — $ — $ 0.1 Liabilities: Derivative liabilities (a) $ — $ 4.7 $ — $ 4.7 Deferred compensation liabilities (b) — 18.0 — 18.0 Total liabilities $ — $ 22.7 $ — $ 22.7 (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 August 30, 2020, we had $2,166.0 million of fixed-rate and $882.6 million of variable-rate debt outstanding. Based on current market rates, the fair value of our fixed-rate debt at August 30, 2020, was estimated to be $2,297.5 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 | 3 Months Ended |
Aug. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 12. 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 August 30, 2020, we did not repurchase any shares. As of August 30, 2020, $195.3 million remained authorized for repurchase under the program. Dividends During the thirteen weeks ended August 30, 2020, we paid $33.6 million of dividends to common stockholders. On September 4, 2020, we paid Accumulated Other Comprehensive Income (Loss) (“AOCI”) Changes in AOCI, net of taxes, as of August 30, 2020 were as follows (dollars in millions). Foreign Accumulated Currency Pension and Other Translation Post-Retirement Comprehensive Gains (Losses) Benefits Loss Balance as of May 31, 2020 $ (36.3) $ (4.2) $ (40.5) Other comprehensive income before reclassifications, net of tax 39.4 — 39.4 Amounts reclassified out of AOCI, net of tax — 0.1 (a) 0.1 Net current-period other comprehensive income (loss) 39.4 0.1 39.5 Balance as of August 30, 2020 $ 3.1 $ (4.1) $ (1.0) (a) Actuarial losses on pension and post-retirement benefits included in AOCI to be amortized over the next 12 months is a net loss of $0.3 million ($0.2 million after tax). |
SEGMENTS
SEGMENTS | 3 Months Ended |
Aug. 30, 2020 | |
SEGMENTS | |
SEGMENTS | 13. 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 August 30, August 25, (in millions) 2020 (a) 2019 Net sales Global $ 447.5 $ 517.6 Foodservice 236.7 305.4 Retail 153.9 129.3 Other 33.4 36.7 Total net sales 871.5 989.0 Product contribution margin (b) Global 77.8 102.7 Foodservice 85.8 102.5 Retail 35.8 28.9 Other (c) 13.2 9.7 212.6 243.8 Advertising and promotion expenses (b) 1.2 4.8 Gross profit 213.8 248.6 Selling, general and administrative expenses 78.1 78.6 Income from operations 135.7 170.0 Interest expense, net 30.3 28.2 Income tax expense 28.0 36.7 Equity method investment earnings 11.9 10.6 Net income $ 89.3 $ 115.7 (a) On March 11, 2020, the World Health Organization declared the spread of COVID-19 a global pandemic. In an attempt to minimize the transmission of COVID-19, significant social and economic restrictions, including restrictions on dine-in purchases and the imposition of stay-at-home orders, were imposed in the United States and in our international markets. These restrictions had a negative impact on our sales, costs, earnings of our joint ventures, and therefore our net income. The increase in our costs, and the costs of our joint ventures, related to factory utilization and production inefficiencies, manufacturing and operational disruptions directly attributable to the pandemic, as well as incremental warehousing and transportation costs, and costs to enhance employee safety measures, including purchases of safety and health screening equipment, retaining sales employees, and expensing certain capitalized manufacturing facility expansion projects that were stopped. (b) 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. (c) The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts. Lamb Weston’s largest customer, McDonald’s Corporation, accounted for approximately 11%and 10% of consolidated “Net sales” for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. No customer accounted for more than 10% of our consolidated accounts receivable as of August 30, 2020 or May 31, 2020. |
COMMITMENTS, CONTINGENCIES, GUA
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | 3 Months Ended |
Aug. 30, 2020 | |
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | |
COMMITMENTS, CONTINGENCIES, GUARANTEES AND LEGAL PROCEEDINGS | 14. 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 15, Commitments, Contingencies, Guarantees, and Legal Proceedings, of the Notes to 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) | 3 Months Ended |
Aug. 30, 2020 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated Financial Statements present the financial results of Lamb Weston for the thirteen weeks ended August 30, 2020 and August 25, 2019, and have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America. These financial statements include all adjustments that we consider necessary for a fair presentation of such financial statements and consist only of normal recurring adjustments. The preparation of financial statements involves the use of estimates and accruals. The inputs into our judgements and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. The actual results that we experience may differ materially 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 consolidated financial statements and notes in our Annual Report on Form 10-K for the fiscal year ended May 31, 2020 (the “Form 10-K”), which we filed with the Securities and Exchange Commission on July 28, 2020. |
New and Recently Issued Accounting Pronouncements | New and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements Receivables – Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Accounting Pronouncements Not Yet Adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting 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 disclosures, and adds disclosure requirements identified as relevant to defined benefit pension and other postretirement plans. This guidance is effective for our fiscal 2021. The adoption of this standard is not expected to have a significant impact on our notes to consolidated financial statements. 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 (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings per common | Thirteen Weeks Ended August 30, August 25, 2020 2019 Numerator: Net income $ 89.3 $ 115.7 Denominator: Basic weighted average common shares outstanding 146.3 146.2 Add: Dilutive effect of employee incentive plans (a) 0.8 0.8 Diluted weighted average common shares outstanding 147.1 147.0 Earnings per share Basic $ 0.61 $ 0.79 Diluted $ 0.61 $ 0.79 (a) 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 August 30, 2020, and August 25, 2019, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
INVENTORIES | |
Schedule of components of inventories | August 30, May 31, 2020 2020 Raw materials and packaging $ 67.2 $ 106.2 Finished goods 363.2 339.2 Supplies and other 40.2 41.3 Inventories $ 470.6 $ 486.7 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of components of property, plant and equipment | August 30, May 31, 2020 2020 Land and land improvements $ 107.2 $ 107.2 Buildings, machinery, and equipment 2,688.9 2,670.1 Furniture, fixtures, office equipment, and other 112.1 107.1 Construction in progress 60.0 58.3 Property, plant and equipment, at cost 2,968.2 2,942.7 Less accumulated depreciation (1,456.7) (1,407.7) Property, plant and equipment, net $ 1,511.5 $ 1,535.0 |
GOODWILL AND OTHER IDENTIFIAB_2
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Global Foodservice Retail Other Total Balance at May 31, 2020 $ 245.6 $ 42.8 $ 10.9 $ 4.5 $ 303.8 Foreign currency translation adjustment 19.5 — — — 19.5 Balance at August 30, 2020 $ 265.1 $ 42.8 $ 10.9 $ 4.5 $ 323.3 |
Schedule of other identifiable intangible assets, non-amortizing intangible assets | August 30, 2020 May 31, 2020 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Intangible Useful Life Carrying Accumulated Intangible (in years) Amount Amortization Assets, Net (in years) Amount Amortization Assets, Net Non-amortizing intangible assets (a) n/a $ 18.0 $ — $ 18.0 n/a $ 18.0 $ — $ 18.0 Amortizing intangible assets (b) 11 43.3 (22.8) 20.5 11 42.4 (22.1) 20.3 $ 61.3 $ (22.8) $ 38.5 $ 60.4 $ (22.1) $ 38.3 (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 $0.7 million and $0.5 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. Foreign intangible assets are affected by foreign currency translation. |
Schedule of other identifiable intangible assets, amortizing intangible assets | August 30, 2020 May 31, 2020 Weighted Weighted Average Gross Average Gross Useful Life Carrying Accumulated Intangible Useful Life Carrying Accumulated Intangible (in years) Amount Amortization Assets, Net (in years) Amount Amortization Assets, Net Non-amortizing intangible assets (a) n/a $ 18.0 $ — $ 18.0 n/a $ 18.0 $ — $ 18.0 Amortizing intangible assets (b) 11 43.3 (22.8) 20.5 11 42.4 (22.1) 20.3 $ 61.3 $ (22.8) $ 38.5 $ 60.4 $ (22.1) $ 38.3 (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 $0.7 million and $0.5 million for the thirteen weeks ended August 30, 2020 and August 25, 2019, respectively. Foreign intangible assets are affected by foreign currency translation. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
ACCRUED LIABILITIES | |
Schedule of components of accrued liabilities | August 30, May 31, 2020 2020 Compensation and benefits $ 51.5 $ 74.5 Accrued trade promotions 36.7 42.5 Accrued interest 34.0 8.7 Dividends payable to shareholders 33.7 33.6 Current portion of operating lease liabilities 28.8 28.4 Franchise, property, and sales and use taxes 12.1 9.4 Income taxes payable 11.0 1.3 Other 29.0 34.6 Accrued liabilities $ 236.8 $ 233.0 |
DEBT AND FINANCING OBLIGATIONS
DEBT AND FINANCING OBLIGATIONS (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
DEBT AND FINANCING OBLIGATIONS | |
Schedule of debt, including financing obligations | August 30, May 31, 2020 2020 Short-term borrowings: Revolving credit facility $ — $ 495.0 Other credit facilities 0.7 3.7 0.7 498.7 Long-term debt: Term loan facility, due 2021 271.9 276.6 Term A-1 loan facility, due 2024 285.0 288.7 Term A-2 loan facility, due 2025 325.0 325.0 4.625% senior notes, due 2024 833.0 833.0 4.875% senior notes, due 2026 833.0 833.0 4.875% senior notes, due 2028 500.0 500.0 3,047.9 3,056.3 Financing obligations: Lease financing obligations due on various dates through 2040 (a) 12.7 13.3 12.7 13.3 Total debt and financing obligations 3,061.3 3,568.3 Debt issuance costs (27.0) (28.2) Short-term borrowings (0.7) (498.7) Current portion of long-term debt and financing obligations (52.8) (48.8) Long-term debt and financing obligations, excluding current portion $ 2,980.8 $ 2,992.6 (a) The interest rates on our lease financing obligations range from 2.31% to 4.10% at both August 30, 2020 and May 31, 2020. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of compensation expenses for stock-based awards recognized, net of forfeitures | Thirteen Weeks Ended August 30, August 25, 2020 2019 Stock-settled RSUs $ 3.5 $ 2.8 Performance Shares 2.5 2.5 Stock options — 0.1 Stock-settled compensation expense 6.0 5.4 Cash-settled RSUs (a) — 1.0 Total compensation expense 6.0 6.4 Income tax benefit (b) (1.1) (1.2) Total compensation expense, net of tax benefit $ 4.9 $ 5.2 (a) All cash-settled RSUs are marked-to-market and presented within “Accrued liabilities” on our Consolidated Balance Sheets. (b) Income tax benefit represents the marginal tax rate, excluding non-deductible compensation. |
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 $ 26.1 2.3 Performance Shares 6.3 1.4 Total unrecognized stock-based expense $ 32.4 2.1 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value on recurring basis | As of August 30, 2020 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.1 $ — $ — $ 0.1 Derivative assets (a) — 2.6 — 2.6 Total assets $ 0.1 $ 2.6 $ — $ 2.7 Liabilities: Deferred compensation liabilities (b) — 21.1 — 21.1 Total liabilities $ — $ 21.1 $ — $ 21.1 As of May 31, 2020 Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 0.1 $ — $ — $ 0.1 Total assets $ 0.1 $ — $ — $ 0.1 Liabilities: Derivative liabilities (a) $ — $ 4.7 $ — $ 4.7 Deferred compensation liabilities (b) — 18.0 — 18.0 Total liabilities $ — $ 22.7 $ — $ 22.7 (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) | 3 Months Ended |
Aug. 30, 2020 | |
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 31, 2020 $ (36.3) $ (4.2) $ (40.5) Other comprehensive income before reclassifications, net of tax 39.4 — 39.4 Amounts reclassified out of AOCI, net of tax — 0.1 (a) 0.1 Net current-period other comprehensive income (loss) 39.4 0.1 39.5 Balance as of August 30, 2020 $ 3.1 $ (4.1) $ (1.0) (a) Actuarial losses on pension and post-retirement benefits included in AOCI to be amortized over the next 12 months is a net loss of $0.3 million ($0.2 million after tax). |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Aug. 30, 2020 | |
SEGMENTS | |
Schedule of segment information | Thirteen Weeks Ended August 30, August 25, (in millions) 2020 (a) 2019 Net sales Global $ 447.5 $ 517.6 Foodservice 236.7 305.4 Retail 153.9 129.3 Other 33.4 36.7 Total net sales 871.5 989.0 Product contribution margin (b) Global 77.8 102.7 Foodservice 85.8 102.5 Retail 35.8 28.9 Other (c) 13.2 9.7 212.6 243.8 Advertising and promotion expenses (b) 1.2 4.8 Gross profit 213.8 248.6 Selling, general and administrative expenses 78.1 78.6 Income from operations 135.7 170.0 Interest expense, net 30.3 28.2 Income tax expense 28.0 36.7 Equity method investment earnings 11.9 10.6 Net income $ 89.3 $ 115.7 (a) On March 11, 2020, the World Health Organization declared the spread of COVID-19 a global pandemic. In an attempt to minimize the transmission of COVID-19, significant social and economic restrictions, including restrictions on dine-in purchases and the imposition of stay-at-home orders, were imposed in the United States and in our international markets. These restrictions had a negative impact on our sales, costs, earnings of our joint ventures, and therefore our net income. The increase in our costs, and the costs of our joint ventures, related to factory utilization and production inefficiencies, manufacturing and operational disruptions directly attributable to the pandemic, as well as incremental warehousing and transportation costs, and costs to enhance employee safety measures, including purchases of safety and health screening equipment, retaining sales employees, and expensing certain capitalized manufacturing facility expansion projects that were stopped. (b) 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. (c) The Other segment primarily includes our vegetable and dairy businesses and unrealized mark-to-market adjustments associated with commodity hedging contracts. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reportable Segments (Details) - segment | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of reportable segments | 4 | 4 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New and Recently Issued Accounting Standards (Details) | Aug. 30, 2020 |
Accounting Standards Update 2016-13 | |
New and Recently Issued Accounting Standards | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
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 |
Accounting Standards Update 2020-04 | |
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 (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Numerator: | ||
Net income available to common stockholders, basic | $ 89.3 | $ 115.7 |
Net income available to common stockholders, diluted | $ 89.3 | $ 115.7 |
Denominator: | ||
Basic weighted average common shares outstanding (in shares) | 146.3 | 146.2 |
Add: Dilutive effect of employee incentive plans (in shares) | 0.8 | 0.8 |
Diluted weighted average common shares outstanding (in shares) | 147.1 | 147 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.61 | $ 0.79 |
Diluted (in dollars per share) | $ 0.61 | $ 0.79 |
INCOME TAXES - General Informat
INCOME TAXES - General Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
INCOME TAXES | ||
Income tax expense | $ 28 | $ 36.7 |
Effective income tax rate (as a percent) | 23.90% | 24.10% |
Federal statutory tax rate (as a percent) | 21.00% | 21.00% |
INCOME TAXES - Income Taxes Pai
INCOME TAXES - Income Taxes Paid (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
INCOME TAXES | ||
Income taxes paid, net of refunds | $ 2.8 | $ 1.5 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Components of inventories | ||
Raw materials and packaging | $ 67.2 | $ 106.2 |
Finished goods | 363.2 | 339.2 |
Supplies and other | 40.2 | 41.3 |
Inventories | $ 470.6 | $ 486.7 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Components (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 2,968.2 | $ 2,942.7 |
Less accumulated depreciation | (1,456.7) | (1,407.7) |
Property, plant and equipment, net | 1,511.5 | 1,535 |
Land and land improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 107.2 | 107.2 |
Buildings, machinery, and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 2,688.9 | 2,670.1 |
Furniture, fixtures, office equipment, and other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | 112.1 | 107.1 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, at cost | $ 60 | $ 58.3 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Property, Plant and Equipment | ||
Depreciation expense | $ 44.9 | $ 42.6 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Purchases in Accounts Payable (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Aug. 30, 2020 | May 31, 2020 | |
Property, Plant and Equipment | ||
Purchases of property, plant and equipment included in accounts payable | $ 6.2 | $ 9.9 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT - Interest Capitalized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Construction in progress | ||
Property, Plant and Equipment | ||
Interest capitalized | $ 0.5 | $ 0.5 |
INVESTMENTS IN JOINT VENTURES -
INVESTMENTS IN JOINT VENTURES - Equity Method Investments - General Information (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Equity Method Investments | ||
Equity method investments | $ 275 | $ 250.2 |
Lamb-Weston Meijer v.o.f. | ||
Equity Method Investments | ||
Ownership interest (as a percent) | 50.00% | |
Lamb-Weston RDO Frozen | ||
Equity Method Investments | ||
Ownership interest (as a percent) | 50.00% | |
Lamb Weston Alimentos Modernos S.A. | ||
Equity Method Investments | ||
Ownership interest (as a percent) | 50.00% |
INVESTMENTS IN JOINT VENTURES_2
INVESTMENTS IN JOINT VENTURES - Equity Method Investments - Sales and Payments (Details) - Equity Method Investee - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Related Party Transactions | ||
Sales | $ 3 | $ 7.3 |
Payments | $ 1.1 | $ 3.2 |
INVESTMENTS IN JOINT VENTURES_3
INVESTMENTS IN JOINT VENTURES - Equity Method Investments - Dividends (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Dividends from equity method investments | ||
Dividends from equity method investments | $ 2.7 | $ 10.2 |
INVESTMENTS IN JOINT VENTURES_4
INVESTMENTS IN JOINT VENTURES - Equity Method Investments - Agreement - Equity Method Investee Information (Details) $ in Millions | Aug. 30, 2020USD ($) |
Lamb-Weston Meijer v.o.f. | |
Equity Method Investments | |
ERP costs | $ 15.7 |
INVESTMENTS IN JOINT VENTURES_5
INVESTMENTS IN JOINT VENTURES - Equity Method Investments - Agreement - Related Party Information (Details) - Equity Method Investee - Lamb-Weston Meijer v.o.f. $ in Millions | 3 Months Ended | 12 Months Ended |
Aug. 30, 2020USD ($)payment | May 31, 2020USD ($) | |
Related Party Transactions | ||
Number of annual payments | payment | 5 | |
Payment received | $ 2 | $ 1 |
Accounts receivable | ||
Accounts receivable | 12.6 | 12 |
Accounts receivable, current | 0.3 | 1.8 |
Accounts receivable, noncurrent | $ 12.3 | $ 10.2 |
GOODWILL AND OTHER IDENTIFIAB_3
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Aug. 30, 2020USD ($) | |
Goodwill | |
Balance at the beginning period | $ 303.8 |
Foreign currency translation adjustment | 19.5 |
Balance at the end of the period | 323.3 |
Global | |
Goodwill | |
Balance at the beginning period | 245.6 |
Foreign currency translation adjustment | 19.5 |
Balance at the end of the period | 265.1 |
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 - Weighted Average Useful Life (Details) | 3 Months Ended | 12 Months Ended |
Aug. 30, 2020 | May 31, 2020 | |
Weighted Average | ||
Amortizing Intangible Assets | ||
Weighted Average Useful Life, amortizing intangible assets (in years) | 11 years | 11 years |
GOODWILL AND OTHER IDENTIFIAB_5
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Amortizing Intangible Assets (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Amortizing Intangible Assets | ||
Amortizing intangible assets, gross | $ 43.3 | $ 42.4 |
Accumulated amortization | (22.8) | (22.1) |
Amortizing intangible assets, net | $ 20.5 | $ 20.3 |
GOODWILL AND OTHER IDENTIFIAB_6
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Other Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Other Identifiable Intangible Assets | ||
Non-amortizing intangible assets | $ 18 | $ 18 |
Amortizing intangible assets, net | 20.5 | 20.3 |
Other identifiable intangible assets, net | 38.5 | 38.3 |
Other identifiable intangible assets, gross | $ 61.3 | $ 60.4 |
GOODWILL AND OTHER IDENTIFIAB_7
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS | ||
Amortization expense | $ 0.7 | $ 0.5 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
ACCRUED LIABILITIES | ||
Compensation and benefits | $ 51.5 | $ 74.5 |
Accrued trade promotions | 36.7 | 42.5 |
Accrued interest | 34 | 8.7 |
Dividends payable to shareholders | 33.7 | 33.6 |
Current portion of operating lease liabilities | 28.8 | 28.4 |
Franchise, property, and sales and use taxes | 12.1 | 9.4 |
Income taxes payable | 11 | 1.3 |
Other | 29 | 34.6 |
Accrued liabilities | $ 236.8 | $ 233 |
DEBT AND FINANCING OBLIGATION_2
DEBT AND FINANCING OBLIGATIONS - Tabular Disclosure - Components (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Debt and Financing Obligations | ||
Short-term borrowings | $ 0.7 | $ 498.7 |
Long-term debt | 3,047.9 | 3,056.3 |
Financing obligations | 12.7 | 13.3 |
Total debt and financing obligations | 3,061.3 | 3,568.3 |
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% |
4.875% senior notes, due 2028 | Senior Notes | ||
Debt and Financing Obligations | ||
Long-term debt | $ 500 | $ 500 |
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 | $ 495 |
Term Loan Facility, due 2021 | Secured Debt | ||
Debt and Financing Obligations | ||
Long-term debt | 271.9 | 276.6 |
Term A-1 loan facility, due 2024 | Secured Debt | ||
Debt and Financing Obligations | ||
Long-term debt | 285 | 288.7 |
Term A-2 loan facility, due 2025 | Secured Debt | ||
Debt and Financing Obligations | ||
Long-term debt | 325 | 325 |
Other credit facilities | Line of Credit | ||
Debt and Financing Obligations | ||
Short-term borrowings | 0.7 | 3.7 |
Lease financing obligations due on various dates through 2040 | ||
Debt and Financing Obligations | ||
Financing obligations | $ 12.7 | $ 13.3 |
Lease financing obligations due on various dates through 2040 | Minimum | ||
Debt and Financing Obligations | ||
Interest rate (as a percent) | 2.31% | 2.31% |
Lease financing obligations due on various dates through 2040 | Maximum | ||
Debt and Financing Obligations | ||
Interest rate (as a percent) | 4.10% | 4.10% |
DEBT AND FINANCING OBLIGATION_3
DEBT AND FINANCING OBLIGATIONS - Tabular Disclosure - Current and Noncurrent (Details) - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Debt and Financing Obligations | ||
Total debt and financing obligations | $ 3,061.3 | $ 3,568.3 |
Debt issuance costs | (27) | (28.2) |
Short-term borrowings | (0.7) | (498.7) |
Current portion of long-term debt and financing obligations | (52.8) | (48.8) |
Long-term debt and financing obligations, excluding current portion | $ 2,980.8 | $ 2,992.6 |
DEBT AND FINANCING OBLIGATION_4
DEBT AND FINANCING OBLIGATIONS - Credit Agreement (Details) $ in Millions | Sep. 23, 2020 | Sep. 17, 2020USD ($) | Aug. 30, 2020USD ($) | Sep. 27, 2020USD ($) | May 31, 2020USD ($) |
Debt and Financing Obligations | |||||
Short-term borrowings | $ 0.7 | $ 498.7 | |||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | |||||
Debt and Financing Obligations | |||||
Available amount | 495.1 | ||||
Short-term borrowings | 0 | $ 495 | |||
Letter of credit outstanding | 4.9 | ||||
Minimum borrowings during the period | 0 | ||||
Maximum borrowings during the period | $ 495 | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Face amount | $ 750 | ||||
Debt instrument, maturity date | Sep. 17, 2023 | ||||
Short-term borrowings | $ 0 | ||||
Debt instrument, covenant, new borrowings, threshold | $ 600 | ||||
Debt instrument, covenant, new borrowings, percentage of consolidated EBITDA | 75.00% | ||||
Net leverage ratio | 5.25 | ||||
Net leverage ratio, February 26, 2022 to maturity | 4.50 | ||||
Interest coverage ratio | 2.75 | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Minimum | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Commitment fee for undrawn amount (as a percent) | 0.20% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Minimum | LIBOR | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Variable interest rate spread (as a percent) | 1.25% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Minimum | Base Rate | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Variable interest rate spread (as a percent) | 0.25% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Maximum | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Commitment fee for undrawn amount (as a percent) | 0.40% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Maximum | LIBOR | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Variable interest rate spread (as a percent) | 2.25% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Maximum | Base Rate | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Variable interest rate spread (as a percent) | 1.25% | ||||
Revolving Credit Facility, November 2016 | Secured Debt | Revolving Credit Facility | Weighted Average | |||||
Debt and Financing Obligations | |||||
Average interest rate (as a percent) | 1.68% | ||||
Term Loan Facility, due 2021 | Secured Debt | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Repayments of secured debt | $ 271.9 | ||||
Term A-1 loan facility, due 2024 | Secured Debt | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Net leverage ratio | 4.50 | ||||
Interest coverage ratio | 2.75 | ||||
Term A-2 loan facility, due 2025 | Secured Debt | Subsequent Event | |||||
Debt and Financing Obligations | |||||
Net leverage ratio | 4.50 | ||||
Interest coverage ratio | 2.75 |
DEBT AND FINANCING OBLIGATION_5
DEBT AND FINANCING OBLIGATIONS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Debt and Financing Obligations | ||
Interest paid | $ 5.7 | $ 5.7 |
STOCK-BASED COMPENSATION - Awar
STOCK-BASED COMPENSATION - Awards Granted (Details) - Restricted Stock Units (RSUs) shares in Millions | 3 Months Ended |
Aug. 30, 2020$ / sharesshares | |
Stock-based Compensation | |
Granted (in shares) | shares | 0.2 |
Granted (in dollars per share) | $ / shares | $ 59.45 |
STOCK-BASED COMPENSATION - Gene
STOCK-BASED COMPENSATION - General Information (Details) shares in Millions | Aug. 30, 2020shares |
STOCK-BASED COMPENSATION | |
Available for future grant (in shares) | 7.4 |
STOCK-BASED COMPENSATION - Comp
STOCK-BASED COMPENSATION - Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Compensation expense | ||
Stock-settled compensation expense | $ 6 | $ 5.4 |
Cash-settled RSUs | 1 | |
Total compensation expense | 6 | 6.4 |
Income tax benefit | (1.1) | (1.2) |
Total compensation expense, net of tax benefit | 4.9 | 5.2 |
Stock-settled restricted stock units | ||
Compensation expense | ||
Stock-settled compensation expense | 3.5 | 2.8 |
Performance shares | ||
Compensation expense | ||
Stock-settled compensation expense | $ 2.5 | 2.5 |
Stock options | ||
Compensation expense | ||
Stock-settled compensation expense | $ 0.1 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Expense (Details) $ in Millions | 3 Months Ended |
Aug. 30, 2020USD ($) | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized compensation expense | $ 32.4 |
Remaining weighted average recognition period | 2 years 1 month 6 days |
Stock-settled restricted stock units | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized compensation expense | $ 26.1 |
Remaining weighted average recognition period | 2 years 3 months 18 days |
Performance shares | |
Unrecognized compensation expense, net of estimated forfeitures | |
Unrecognized compensation expense | $ 6.3 |
Remaining weighted average recognition period | 1 year 4 months 24 days |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy (Details) - Recurring - USD ($) $ in Millions | Aug. 30, 2020 | May 31, 2020 |
Assets: | ||
Deferred compensation assets | $ 0.1 | $ 0.1 |
Derivative assets | 2.6 | |
Total assets | 2.7 | 0.1 |
Liabilities: | ||
Derivative liabilities | 4.7 | |
Deferred compensation liabilities | 21.1 | 18 |
Total liabilities | 21.1 | 22.7 |
Level 1 | ||
Assets: | ||
Deferred compensation assets | 0.1 | 0.1 |
Total assets | 0.1 | 0.1 |
Level 2 | ||
Assets: | ||
Derivative assets | 2.6 | |
Total assets | 2.6 | |
Liabilities: | ||
Derivative liabilities | 4.7 | |
Deferred compensation liabilities | 21.1 | 18 |
Total liabilities | $ 21.1 | $ 22.7 |
FAIR VALUE MEASUREMENTS - Debt
FAIR VALUE MEASUREMENTS - Debt Outstanding (Details) $ in Millions | Aug. 30, 2020USD ($) |
Carrying Value | Fixed rate debt | |
Fair Value Measurements | |
Debt | $ 2,166 |
Carrying Value | Variable rate debt | |
Fair Value Measurements | |
Debt | 882.6 |
Level 2 | Fair Value | Fixed rate debt | |
Fair Value Measurements | |
Debt | $ 2,297.5 |
STOCKHOLDERS' EQUITY - Share Re
STOCKHOLDERS' EQUITY - Share Repurchase Program (Details) - USD ($) $ in Millions | Aug. 30, 2020 | Dec. 20, 2018 |
STOCKHOLDERS' EQUITY | ||
Authorization to repurchase common stock not to exceed | $ 250 | |
Remaining amount authorized of share repurchase program | $ 195.3 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends Paid (Details) - USD ($) $ in Millions | Sep. 04, 2020 | Aug. 30, 2020 | Aug. 25, 2019 |
Dividends | |||
Dividends paid | $ 33.7 | $ 33.6 | $ 29.2 |
STOCKHOLDERS' EQUITY - Divide_2
STOCKHOLDERS' EQUITY - Dividends Declared (Details) - $ / shares | 3 Months Ended | ||
Nov. 29, 2020 | Aug. 30, 2020 | Aug. 25, 2019 | |
Dividends | |||
Dividends declared per common share (in dollars per share) | $ 0.23 | $ 0.23 | $ 0.20 |
Dividends declared per common share, declared date | Sep. 24, 2020 | ||
Dividends declared per common share, payable date | Dec. 4, 2020 | ||
Dividends declared per common share, record date | Nov. 6, 2020 |
STOCKHOLDERS' EQUITY - Changes
STOCKHOLDERS' EQUITY - Changes in AOCI (Details) $ in Millions | 3 Months Ended |
Aug. 30, 2020USD ($) | |
Changes in AOCI: | |
Balance at the beginning of the period | $ 240 |
Balance at the end of the period | 332 |
Accumulated Other Comprehensive Loss | |
Changes in AOCI: | |
Balance at the beginning of the period | (40.5) |
Other comprehensive income before reclassifications, net of tax | 39.4 |
Amounts reclassified out of AOCI, net of tax | 0.1 |
Net current-period other comprehensive income (loss) | 39.5 |
Balance at the end of the period | (1) |
Foreign Currency Translation Gains (Losses) | |
Changes in AOCI: | |
Balance at the beginning of the period | (36.3) |
Other comprehensive income before reclassifications, net of tax | 39.4 |
Net current-period other comprehensive income (loss) | 39.4 |
Balance at the end of the period | 3.1 |
Pension and Post-Retirement Benefits | |
Changes in AOCI: | |
Balance at the beginning of the period | (4.2) |
Amounts reclassified out of AOCI, net of tax | 0.1 |
Net current-period other comprehensive income (loss) | 0.1 |
Balance at the end of the period | $ (4.1) |
STOCKHOLDERS' EQUITY - Settleme
STOCKHOLDERS' EQUITY - Settlement Gains on Pension and Post-retirement Benefits Included in AOCI (Details) $ in Millions | Aug. 30, 2020USD ($) |
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 | $ (0.3) |
Net amount of settlement losses on pension and post-retirement benefits included in AOCI to be amortized over the next 12 months, after tax | $ (0.2) |
SEGMENTS - General Information
SEGMENTS - General Information (Details) - segment | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Segments | ||
Number of operating segments | 4 | 4 |
Number of reportable segments | 4 | 4 |
SEGMENTS - Tabular Disclosure (
SEGMENTS - Tabular Disclosure (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Segment information | ||
Net sales | $ 871.5 | $ 989 |
Product contribution margin | 212.6 | 243.8 |
Advertising and promotion expenses | 1.2 | 4.8 |
Gross profit | 213.8 | 248.6 |
Selling, general and administrative expenses | 78.1 | 78.6 |
Income from operations | 135.7 | 170 |
Interest expense, net | 30.3 | 28.2 |
Income tax expense | 28 | 36.7 |
Equity method investment earnings | 11.9 | 10.6 |
Net income | 89.3 | 115.7 |
Global | ||
Segment information | ||
Net sales | 447.5 | 517.6 |
Product contribution margin | 77.8 | 102.7 |
Foodservice | ||
Segment information | ||
Net sales | 236.7 | 305.4 |
Product contribution margin | 85.8 | 102.5 |
Retail | ||
Segment information | ||
Net sales | 153.9 | 129.3 |
Product contribution margin | 35.8 | 28.9 |
Other | ||
Segment information | ||
Net sales | 33.4 | 36.7 |
Product contribution margin | $ 13.2 | $ 9.7 |
SEGMENTS - Concentrations (Deta
SEGMENTS - Concentrations (Details) | 3 Months Ended | |
Aug. 30, 2020 | Aug. 25, 2019 | |
Net Sales | Customer Concentration Risk | McDonald's Corporation | ||
Segments | ||
Concentration risk (as a percent) | 11.00% | 10.00% |