10-Q 1 lw-20211128x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 28, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to 

Commission File Number: 1-37830

LAMB WESTON HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

 

61-1797411

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

599 S. Rivershore Lane
Eagle, Idaho

 

83616

(Address of principal executive offices)

 

(Zip Code)

(208) 938-1047

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

LW

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No 

As of December 30, 2021, the Registrant had 145,203,600 shares of common stock, par value $1.00 per share, outstanding.

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1

Financial Statements (Unaudited)

Consolidated Statements of Earnings

3

Consolidated Statements of Comprehensive Income

4

Consolidated Balance Sheets

5

Consolidated Statements of Stockholders’ Equity

6

Consolidated Statements of Cash Flows

7

Condensed Notes to Consolidated Financial Statements (Unaudited)

8

Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4

Controls and Procedures

31

Part II. OTHER INFORMATION

32

Item 1

Legal Proceedings

32

Item 1A

Risk Factors

32

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 3

Defaults Upon Senior Securities

32

Item 4

Mine Safety Disclosures

32

Item 5

Other Information

32

Item 6

Exhibits

33

Signatures

34

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

Lamb Weston Holdings, Inc.

Consolidated Statements of Earnings

(unaudited, in millions, except per share amounts)

Thirteen Weeks Ended

Twenty-Six Weeks Ended

    

November 28,

    

November 29,

    

November 28,

    

November 29,

2021

2020

2021

2020

Net sales

$

1,006.6

$

896.1

$

1,990.8

$

1,767.6

Cost of sales

801.1

672.6

1,634.0

1,330.3

Gross profit

205.5

223.5

356.8

437.3

Selling, general and administrative expenses

91.1

83.9

182.2

162.0

Income from operations

114.4

139.6

174.6

275.3

Interest expense, net

82.4

30.0

110.3

60.3

Income before income taxes and equity method earnings

 

32.0

 

109.6

 

64.3

 

215.0

Income tax expense

9.6

31.9

18.3

59.9

Equity method investment earnings

10.1

19.2

16.3

31.1

Net income

$

32.5

$

96.9

$

62.3

$

186.2

Earnings per share:

Basic

$

0.23

$

0.66

$

0.43

$

1.27

Diluted

$

0.22

$

0.66

$

0.42

$

1.27

Weighted average common shares outstanding:

Basic

146.0

146.5

146.1

146.4

Diluted

146.3

147.1

146.6

147.1

See Condensed Notes to Consolidated Financial Statements.

3

Lamb Weston Holdings, Inc.

Consolidated Statements of Comprehensive Income

(unaudited, dollars in millions)

Thirteen Weeks Ended

Thirteen Weeks Ended

November 28, 2021

November 29, 2020

Tax

Tax 

Pre-Tax

(Expense)

After-Tax

Pre-Tax 

(Expense) 

After-Tax 

    

Amount

    

Benefit

    

Amount

    

Amount

    

Benefit

    

Amount

Net income

$

42.1

$

(9.6)

$

32.5

$

128.8

$

(31.9)

$

96.9

Other comprehensive income (loss):

  

Reclassification of post-retirement benefits out of accumulated other comprehensive income

0.1

0.1

 

Unrealized currency translation gains (losses)

(15.6)

0.7

(14.9)

8.1

 

(0.1)

 

8.0

Comprehensive income

$

26.6

$

(8.9)

$

17.7

$

136.9

$

(32.0)

$

104.9

Twenty-Six Weeks Ended

Twenty-Six Weeks Ended

November 28, 2021

November 29, 2020

Tax

Tax 

Pre-Tax

(Expense)

After-Tax

Pre-Tax 

(Expense) 

After-Tax 

    

Amount

    

Benefit

    

Amount

    

Amount

    

Benefit

    

Amount

Net income

$

80.6

$

(18.3)

$

62.3

$

246.1

$

(59.9)

$

186.2

Other comprehensive income (loss):

 

  

 

  

 

 

  

Reclassification of post-retirement benefits out of accumulated other comprehensive income

 

0.2

 

0.2

 

0.1

 

0.1

Unrealized currency translation gains (losses)

 

(39.4)

 

2.2

 

(37.2)

 

50.0

 

(2.6)

 

47.4

Comprehensive income

$

41.4

$

(16.1)

$

25.3

$

296.2

$

(62.5)

$

233.7

See Condensed Notes to Consolidated Financial Statements.

4

Lamb Weston Holdings, Inc.

Consolidated Balance Sheets

(unaudited, dollars in millions, except share data)

November 28,

May 30,

    

2021

    

2021

ASSETS

 

 

  

  

Current assets:

 

 

  

  

Cash and cash equivalents

 

$

621.9

$

783.5

Receivables, less allowance for doubtful accounts of $1.1 and $0.9

 

423.2

 

366.9

Inventories

 

613.9

 

513.5

Prepaid expenses and other current assets

 

58.8

 

117.8

Total current assets

 

1,717.8

 

1,781.7

Property, plant and equipment, net

 

1,568.0

 

1,524.0

Operating lease assets

136.1

141.7

Equity method investments

294.7

310.2

Goodwill

 

318.6

 

334.5

Intangible assets, net

 

35.0

 

36.9

Other assets

 

85.4

 

80.4

Total assets

$

4,155.6

$

4,209.4

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 

  

 

  

Current portion of long-term debt and financing obligations

$

32.2

$

32.0

Accounts payable

 

445.4

 

359.3

Accrued liabilities

 

215.4

 

226.9

Total current liabilities

 

693.0

 

618.2

Long-term liabilities:

Long-term debt and financing obligations, excluding current portion

 

2,692.1

 

2,705.4

Deferred income taxes

161.4

159.7

Other noncurrent liabilities

 

243.9

 

245.5

Total long-term liabilities

3,097.4

3,110.6

Commitments and contingencies

Stockholders' equity:

 

  

 

  

Common stock of $1.00 par value, 600,000,000 shares authorized; 148,028,060 and 147,640,632 shares issued

 

148.0

 

147.6

Additional distributed capital

 

(825.8)

 

(836.8)

Retained earnings

 

1,238.3

 

1,244.6

Accumulated other comprehensive income (loss)

 

(7.5)

 

29.5

Treasury stock, at cost, 2,827,412 and 1,448,768 common shares

(187.8)

(104.3)

Total stockholders’ equity

 

365.2

 

480.6

Total liabilities and stockholders’ equity

$

4,155.6

$

4,209.4

See Condensed Notes to Consolidated Financial Statements.

5

Lamb Weston Holdings, Inc.

Consolidated Statements of Stockholders’ Equity
(unaudited, dollars in millions, except share data)

Thirteen Weeks Ended November 28, 2021 and November 29, 2020

    

    

    

Additional 

    

    

Accumulated 

    

Common Stock,

Common

Treasury

Paid-in

Other 

 Total 

net of Treasury

Stock

Stock

(Distributed)

Retained

Comprehensive 

Stockholders’

Shares

    

Amount

    

Amount

    

Capital

    

Earnings

    

Income (Loss)

    

 Equity

Balance at August 29, 2021

146,061,016

$

148.0

$

(137.7)

$

(830.2)

$

1,240.0

  

$

7.3

  

$

427.4

Dividends declared, $0.235 per share

(34.2)

(34.2)

Common stock issued

11,427

Stock-settled, stock-based compensation expense

4.4

4.4

Repurchase of common stock and common stock withheld to cover taxes

(871,795)

(50.1)

(50.1)

Comprehensive income

32.5

(14.8)

17.7

Balance at November 28, 2021

145,200,648

$

148.0

$

(187.8)

$

(825.8)

$

1,238.3

$

(7.5)

$

365.2

Balance at August 30, 2020

146,324,943

$

147.4

$

(77.8)

$

(856.5)

$

1,119.9

$

(1.0)

$

332.0

Dividends declared, $0.230 per share

(33.7)

(33.7)

Common stock issued

35,494

0.1

0.4

0.5

Stock-settled, stock-based compensation expense

5.3

5.3

Common stock withheld to cover taxes

(5,355)

(0.2)

(0.2)

Other

0.4

(0.3)

0.1

Comprehensive income

96.9

8.0

104.9

Balance at November 29, 2020

146,355,082

$

147.5

$

(78.0)

$

(850.4)

$

1,182.8

$

7.0

$

408.9

Twenty-Six Weeks Ended November 28, 2021 and November 29, 2020

    

    

    

Additional 

    

    

Accumulated 

    

Common Stock,

Common

Treasury

Paid-in

Other 

 Total 

net of Treasury

Stock

Stock

(Distributed)

Retained

Comprehensive 

Stockholders’

Shares

    

Amount

    

Amount

    

Capital

    

Earnings

    

Income (Loss)

    

 Equity

Balance at May 30, 2021

146,191,864

$

147.6

$

(104.3)

$

(836.8)

$

1,244.6

  

$

29.5

  

$

480.6

Dividends declared, $0.470 per share

(68.6)

(68.6)

Common stock issued

387,428

0.4

1.5

1.9

Stock-settled, stock-based compensation expense

9.6

9.6

Repurchase of common stock and common stock withheld to cover taxes

(1,378,644)

(83.5)

(83.5)

Other

(0.1)

(0.1)

Comprehensive income

 

62.3

(37.0)

25.3

Balance at November 28, 2021

145,200,648

$

148.0

$

(187.8)

$

(825.8)

$

1,238.3

$

(7.5)

$

365.2

Balance at May 31, 2020

146,038,893

$

147.0

$

(68.2)

$

(862.9)

$

1,064.6

$

(40.5)

$

240.0

Dividends declared, $0.460 per share

(67.4)

(67.4)

Common stock issued

472,695

0.5

0.6

1.1

Stock-settled, stock-based compensation expense

11.3

11.3

Common stock withheld to cover taxes

(156,506)

(9.8)

(9.8)

Other

0.6

(0.6)

Comprehensive income

186.2

47.5

233.7

Balance at November 29, 2020

146,355,082

$

147.5

$

(78.0)

$

(850.4)

$

1,182.8

$

7.0

$

408.9

See Condensed Notes to Consolidated Financial Statements.

6

Lamb Weston Holdings, Inc.

Consolidated Statements of Cash Flows

(unaudited, dollars in millions)

Twenty-Six Weeks Ended

    

November 28,

    

November 29,

2021

2020

Cash flows from operating activities

Net income

$

62.3

$

186.2

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of intangibles and debt issuance costs

94.9

94.7

Loss on extinguishment of debt

53.3

1.0

Stock-settled, stock-based compensation expense

9.6

11.3

Earnings of joint ventures in excess of distributions

(2.2)

(24.4)

Deferred income taxes

4.3

2.5

Other

(0.5)

15.5

Changes in operating assets and liabilities:

Receivables

(57.7)

(8.5)

Inventories

(101.3)

(140.3)

Income taxes payable/receivable, net

3.1

33.0

Prepaid expenses and other current assets

58.5

51.8

Accounts payable

94.7

138.5

Accrued liabilities

(11.5)

(42.5)

Net cash provided by operating activities

$

207.5

$

318.8

Cash flows from investing activities

Additions to property, plant and equipment

(147.1)

(42.3)

Additions to other long-term assets

(1.0)

(11.4)

Other

0.5

0.4

Net cash used for investing activities

$

(147.6)

$

(53.3)

Cash flows from financing activities

Proceeds from issuance of debt

1,655.4

Repayments of debt and financing obligations

(1,682.1)

(289.6)

Repurchase of common stock and common stock withheld to cover taxes

(83.5)

(9.8)

Dividends paid

(68.7)

(67.2)

Payments of senior notes call premium

(39.6)

Repayments of short-term borrowings, net

 

 

(498.8)

Other

(0.8)

(1.8)

Net cash used for financing activities

$

(219.3)

$

(867.2)

Effect of exchange rate changes on cash and cash equivalents

(2.2)

1.6

Net decrease in cash and cash equivalents

 

(161.6)

 

(600.1)

Cash and cash equivalents, beginning of period

783.5

1,364.0

Cash and cash equivalents, end of period

$

621.9

$

763.9

See Condensed Notes to Consolidated Financial Statements.

7

Lamb Weston Holdings, Inc.

Condensed Notes to Consolidated Financial Statements

(Unaudited)

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 and twenty-six weeks ended November 28, 2021 and November 29, 2020, 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 judgments and estimates consider the economic implications of the effects of the COVID-19 pandemic on our critical accounting estimates and significant accounting policies. 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 30, 2021 (the “Form 10-K”), which we filed with the Securities and Exchange Commission on July 27, 2021.

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

Accounting Pronouncements Not Yet Adopted

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and the London Interbank Offered Rate (“LIBOR”). This guidance includes practical expedients and exceptions to the current guidance on contract modifications and hedge accounting. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. This guidance was effective immediately and generally can be applied through December 31, 2022. We are currently evaluating the potential impact of the transition from LIBOR to alternative reference rates, however we do not expect a significant impact on our consolidated financial statements.

There were no other accounting pronouncements recently issued that had or are expected to have a material impact on our consolidated financial statements.

8

2.    EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per common share for the periods presented:

Thirteen Weeks Ended

Twenty-Six Weeks Ended

    

November 28,

    

November 29,

    

November 28,

    

November 29,

(in millions, except per share amounts)

2021

2020

2021

2020

Numerator:

 

  

 

  

 

  

 

  

Net income

$

32.5

$

96.9

$

62.3

$

186.2

Denominator:

 

  

 

  

 

  

 

  

Basic weighted average common shares outstanding

 

146.0

 

146.5

 

146.1

 

146.4

Add: Dilutive effect of employee incentive plans (a)

 

0.3

 

0.6

 

0.5

 

0.7

Diluted weighted average common shares outstanding

 

146.3

 

147.1

 

146.6

 

147.1

Earnings per share:

Basic

$

0.23

$

0.66

$

0.43

$

1.27

Diluted

$

0.22

$

0.66

$

0.42

$

1.27

(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 November 28, 2021, 0.3 million shares of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive. As of November 29, 2020, an insignificant number of stock-based awards were excluded from the computation of diluted earnings per share because they would be antidilutive.

3.    INCOME TAXES

Income tax expense was $9.6 million and $31.9 million for the thirteen weeks ended November 28, 2021 and November 29, 2020, respectively; and $18.3 million and $59.9 million for the twenty-six weeks ended November 28, 2021 and November 29, 2020, 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 22.8% and 24.8% for the thirteen weeks ended November 28, 2021 and November 29, 2020, respectively; and 22.7% and 24.3% for the twenty-six weeks ended November 28, 2021 and November 29, 2020, 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 $10.3 million and $24.0 million during the twenty-six weeks ended November 28, 2021 and November 29, 2020, respectively.

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. The expiration of statute of limitations could reduce the uncertain tax positions by approximately $7 million during the next 12 months.

9

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:

    

November 28,

May 30,

(in millions)

2021

    

2021

Raw materials and packaging

$

206.1

 

$

89.8

Finished goods

 

361.1

 

 

377.8

Supplies and other

 

46.7

 

 

45.9

Inventories

$

613.9

 

$

513.5

5.    PROPERTY, PLANT AND EQUIPMENT

The components of property, plant and equipment were as follows:

    

November 28,

May 30,

(in millions)

2021

    

2021

Land and land improvements

$

112.1

$

108.2

Buildings, machinery, and equipment

 

2,815.2

 

2,763.3

Furniture, fixtures, office equipment, and other

 

98.6

 

97.1

Construction in progress

 

181.3

 

122.5

Property, plant and equipment, at cost

 

3,207.2

 

3,091.1

Less accumulated depreciation

 

(1,639.2)

 

(1,567.1)

Property, plant and equipment, net

$

1,568.0

$

1,524.0

Depreciation expense was $44.7 million and $45.2 million for the thirteen weeks ended November 28, 2021 and November 29, 2020, respectively; and $89.2 million and $90.1 million for the twenty-six weeks ended November 28, 2021 and November 29, 2020, respectively. At November 28, 2021 and May 30, 2021, purchases of property, plant and equipment included in accounts payable were $14.5 million and $23.1 million, respectively.

Interest capitalized within construction in progress for the thirteen weeks ended November 28, 2021 and November 29, 2020, was $1.6 million and $0.5 million, respectively; and $2.8 million and $1.0 million for the twenty-six weeks ended November 28, 2021 and November 29, 2020, respectively.

6.    EQUITY METHOD INVESTMENTS

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., that is headquartered in the Netherlands and manufactures and sells frozen potato products principally in Europe, Russia, and the Middle East. We hold a 50% interest in Lamb-Weston/RDO Frozen (“Lamb Weston RDO”), a potato processing joint 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 Comercial del Plata S.A., that is headquartered in Argentina. LWAMSA manufactures and sells frozen potato products, principally in South America. These investments are accounted for using equity method accounting. The carrying value of these investments at November 28, 2021 and May 30, 2021, was $294.7 million and $310.2 million, respectively, and are included in “Equity method investments” on our Consolidated Balance Sheets.

For the thirteen weeks ended November 28, 2021 and November 29, 2020, we had sales to our equity method investments of $3.3 million and $3.9 million, respectively, and purchases from our equity method investments of $5.8 million and $2.2 million, respectively. For the twenty-six weeks ended November 28, 2021 and November 29, 2020, we had sales to our equity method investments of $8.2 million and $6.9 million, respectively, and purchases from our equity method investments of $7.2 million and $3.3 million, respectively. Total dividends received from our equity method investments were $4.5 million and $3.9 million for the thirteen weeks ended November 28, 2021 and November 29, 2020,

10

respectively; and $14.2 million and $6.6 million for the twenty-six weeks ended November 28, 2021 and November 29, 2020, 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 its 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 November 28, 2021 and May 30, 2021, Lamb-Weston/Meijer’s portion of the ERP costs was $17.4 million and $16.8 million, respectively. Related to this project, we had $14.1 million and $13.2 million of receivables recorded in “Other assets” on our Consolidated Balance Sheets as of November 28, 2021 and May 30, 2021, respectively. We expect the total receivable from Lamb-Weston/Meijer to increase as development and implementation of the ERP system progresses.

7.    GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The following table presents changes in goodwill balances, by segment, during the twenty-six weeks ended November 28, 2021:

(in millions)

    

Global 

    

Foodservice

    

Retail

    

Other

    

Total

Balance at May 30, 2021

$

276.3

$

42.8

$

10.9

$

4.5

$

334.5

Foreign currency translation adjustment

(15.9)

 

(15.9)

Balance at November 28, 2021

$

260.4

$

42.8

$

10.9

$

4.5

$

318.6

Other identifiable intangible assets were as follows:

November 28, 2021

May 30, 2021

    

Weighted 

    

    

    

    

Weighted 

    

    

    

Average 

Gross 

Average 

 Gross 

Useful Life 

Carrying 

Accumulated 

Intangible

Useful Life 

Carrying 

 Accumulated 

Intangible

(dollars in millions)

(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

  

41.5

  

(24.5)

  

17.0

  

11

  

42.2

  

(23.3)

  

18.9

  

  

$

59.5

  

$

(24.5)

  

$

35.0

  

  

$

60.2

  

$

(23.3)

  

$

36.9

(a)Non-amortizing intangible assets represent brands and trademarks.

(b)Amortizing intangible assets are principally composed of licensing agreements, brands, and customer relationships. Developed technology, which is excluded from this balance, is recorded as “Other assets” on our Consolidated Balance Sheets. Amortization expense, including developed technology amortization expense, was $1.5 million and $1.4 million for the thirteen weeks ended November 28, 2021 and November 29, 2020, respectively; and