SEGMENTS (Tables)

9 Months Ended

Feb. 25, 2024


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(in millions)	February 25, 2024 (a)		February 26, 2023		February 25, 2024 (a)		February 26, 2023
Segment net sales
North America	$	947.5	$	1,070.8	$	3,250.0	$	3,088.9
International (b)	510.8		182.8		1,605.7		566.8
	$	1,458.3	$	1,253.6	$	4,855.7	$	3,655.7

Schedule of the reconciliation of adjusted EBITDA to net income


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(in millions)	February 25, 2024 (a)(d)		February 26, 2023		February 25, 2024 (a)(d)		February 26, 2023
Segment Adjusted EBITDA
North America	$	285.9	$	333.0	$	986.6	$	864.4
International (b)	101.7		54.1		291.5		147.4
Total Reportable Segments Adjusted EBITDA	387.6		387.1		1,278.1		1,011.8
Unallocated corporate costs (c)	(44.0)		(34.9)		(144.7)		(96.1)
Depreciation and amortization (e)	80.0		59.5		222.0		176.9
Unrealized derivative losses	27.3		5.1		1.6		8.7
Unconsolidated joint venture unrealized derivative losses	—		47.1		—		32.7
Foreign currency exchange losses	9.0		1.8		7.3		4.2
Items impacting comparability:
Inventory step-up from acquisition	—		—		20.7		—
Integration and acquisition-related items, net	2.4		(4.3)		11.2		(30.8)
Gain on acquisition of interest in joint ventures (f)	—		—		—		(15.1)
Interest expense, net	35.7		25.8		95.5		76.4
Income before income taxes	189.2		217.2		775.1		662.7
Income tax expense	43.1		42.1		179.3		152.6
Net income	$	146.1	$	175.1	$	595.8	$	510.1

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(a)During the thirteen and thirty-nine weeks ended February 25, 2024, we transitioned certain central systems and functions, including order to cash, produce to deliver, source to pay, and inventory management, among others in North America, to a new enterprise resource planning system. After the transition, we experienced reduced visibility into finished goods inventories at our distribution centers, resulting in a higher-than-expected effect on customer order fulfillment rates. By the end of the quarter, we restored the visibility into our finished goods inventories and customer order fulfillment rates to pre-transition levels.

(b)We acquired the remaining interest in LW EMEA in the fourth quarter of fiscal 2023. Accordingly, LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and thirty-nine weeks ended February 25, 2024, whereas in the same period in the prior year, our 50% equity interest in LW EMEA was recorded using equity method accounting. As a result, only 50% of LW EMEA’s adjusted EBITDA is reported in the International segment for the thirteen and thirty-nine weeks ended February 26, 2023.

(c)Unallocated corporate costs included costs related to corporate support staff and support services, foreign exchange gains and losses and unrealized mark-to-market derivative gains and losses. Support services include, but are not limited to, our administrative, information technology, human resources, finance, and accounting functions that are not specifically allocated to the segments.

Unallocated corporate costs for the thirteen and thirty-nine weeks ended February 25, 2024 included unallocated corporate costs of LW EMEA, whereas in the same period in the prior year, our portion of LW EMEA’s unallocated corporate costs were recorded in “Equity method investment earnings” in the Consolidated Statements of Earnings in the International segment.

(d)The thirteen weeks ended February 25, 2024 included a $25.0 million charge ($19.0 million after-tax, or $0.13 per share) related to a write-off of excess raw potatoes. The total charge to the reporting segments was as follows: $22.7 million to the North America segment and $2.3 million to the International segment. The thirty-nine weeks ended February 25, 2024 included a $95.9 million charge ($72.9 million after-tax, or $0.50 per share) related to a write-off of excess raw potatoes. The total charge to the reporting segments was as follows: $86.0 million to the North America segment and $9.9 million to the International segment.

(e)Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of $2.1 million and $9.3 million for the thirteen weeks ended February 25, 2024 and February 26, 2023, respectively; and $6.4 million and $26.9 million for the thirty-nine weeks ended February 25, 2024 and February 26, 2023, respectively.

(f)The thirty-nine weeks ended February 26, 2023 included a $15.1 million (before and after-tax) gain recognized in connection with our acquisition of an additional 40% equity interest in Lamb Weston Alimentos Modernos S.A. (“LWAMSA”) in July 2022. This gain related to remeasuring our previously held 50% equity interest in LWAMSA to fair value, recorded in “Equity method investment earnings” in the Consolidated Statements of Earnings, and is excluded from the financial results of our International segment.