v3.26.1
INCOME TAXES
 12 Months Ended
May 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Pre-tax income (loss), inclusive of equity method investment earnings, consisted of the following:
For the Fiscal Years Ended May
(in millions)202620252024
United States$500.8 $418.1 $807.8 
Non-U.S.(82.7)82.2 147.7 
Total pre-tax income$418.1 $500.3 $955.5 
The provision for income taxes included the following:
For the Fiscal Years Ended May
(in millions)202620252024
Current
U.S. federal$79.0 $85.7 $140.5 
State and local14.4 6.3 36.1 
Non-U.S.(6.0)50.7 54.8 
Total current provision for taxes87.4 142.7 231.4 
Deferred
U.S. federal32.9 (1.3)27.7 
State and local3.8 (0.6)(14.6)
Non-U.S.4.0 2.3 (14.5)
Total deferred provision for taxes$40.7 $0.4 $(1.4)
Total provision for taxes$128.1 $143.1 $230.0 
The following table reconciles the U.S. statutory tax rate of 21% on income before taxes, including equity method earnings, with the actual provision for income taxes:
For the Fiscal Year Ended May
(in millions)2026
Amount ($)Percent
Provision computed at U.S. Federal statutory rate$87.8 21.0 %
Domestic federal tax effects:
Tax credits(0.4)(0.1)%
Effects of cross-border tax laws(2.3)(0.6)%
Non-taxable or non-deductible items6.2 1.5 %
Other0.2 — %
Domestic state and local income taxes, net of federal effect (a)7.0 1.7 %
Foreign tax effects:
Argentina
Tax rate differential(5.9)(1.4)%
Non-deductible FX translation9.9 2.4 %
Change in valuation allowance6.8 1.6 %
Other3.8 0.9 %
Australia
Change in valuation allowance8.9 2.1 %
Other(2.9)(0.7)%
Netherlands(5.6)(1.3)%
Other foreign jurisdictions2.0 0.5 %
Worldwide changes in unrecognized tax benefits12.6 3.0 %
Effective income tax rate (b)$128.1 30.6 %
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(a)Oregon, Illinois, and Texas are the primary jurisdictions contributing to this category, with their state taxes accounting for more than 50 percent of the total tax effect.
(b)The effective income tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings.
As previously disclosed for fiscal years 2025 and 2024, prior to our adoption of ASU 2023-09, the effective income tax rate differed from the statutory federal income tax rate as follows:
For the Fiscal Years Ended May
(in millions)20252024
Provision computed at U.S. statutory rate$105.1 $200.7 
Increase (decrease) in rate resulting from:
State and local taxes, net of federal benefit5.1 20.1 
Non-U.S. operations (a)19.0 5.5 
Change in valuation allowance (b)14.7 3.6 
Other(0.8)0.1 
Total income tax expense$143.1 $230.0 
Effective income tax rate (c)28.6 %24.1 %
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(a)We derive the effective tax rate detriment or (benefit) attributed to non-U.S. income taxed at different rates, including the impact of permanent items. The statutory tax rates range from 8.25% to 35%.
(b)The predominant change in the valuation allowance and effective income tax rate in fiscal 2025 is attributable to the establishment of a valuation allowance against certain international deferred tax assets and international permanent differences.
(c)The effective income tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings.
Income Taxes Paid
The details of fiscal 2026 cash payments net of refunds are set forth below:
For the Fiscal Year Ended May
(in millions)2026
US federal$83.2 
US state and local7.7 
Foreign:
Netherlands11.0 
Other foreign jurisdictions16.9 
Total foreign27.9 
Total cash taxes paid, net of refunds$118.8 
As previously disclosed prior to our adoption of ASU 2023-09, income taxes paid net of refunds were $149.7 million and $188.8 million in fiscal 2025 and 2024 respectively.
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred income tax assets and liabilities were as follows:
May 31, 2026May 25, 2025
(in millions)AssetsLiabilitiesAssetsLiabilities
Property, plant and equipment$— $298.5 $— $297.9 
Goodwill and other intangible assets17.7 — 17.1 — 
Compensation and benefit related liabilities20.4 — 26.3 — 
Net operating loss and credit carryforwards (a)47.8 — 34.1 — 
Accrued expenses and other liabilities9.7 — 12.2 — 
Inventory and inventory reserves10.0 — 8.7 — 
Lease obligations28.4 — 28.9 — 
Operating lease assets— 25.9 — 26.6 
R&D expenditures capitalization2.3 — 18.4 — 
Equity method investments— 7.2 — 5.7 
Other7.3 23.4 9.8 12.0 
143.6 355.0 155.5 342.2 
Less: Valuation allowance (b)(83.6)— (65.7)— 
Net deferred taxes (c)$60.0 $355.0 $89.8 $342.2 
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(a)At May 31, 2026, Lamb Weston had approximately $109.3 million of gross ($30.0 million after-tax) non-U.S. net operating loss carryforwards, of which $8.1 million (after-tax) will expire by fiscal 2032. The remaining $21.9 million (after-tax) non-U.S. net operating loss carryforwards will not expire. Lamb Weston also had a non-U.S. tax credit carryforward of $2.3 million, which will expire by fiscal 2034, a state business credit carryforward of $14.5 million (net of federal benefit), which will expire by fiscal 2040, and $1.0 million foreign tax credit.
(b)$48.3 million of the valuation allowance is related to non-amortizable intangible assets in the United States, and $35.3 million is attributable to valuation allowances against certain international deferred tax assets.
(c)Deferred tax assets of $2.4 million and $1.1 million, as of May 31, 2026 and May 25, 2025, respectively, were presented in “Other assets.” Deferred tax liabilities of $297.5 million and $253.5 million as of May 31, 2026 and May 25, 2025, respectively, were presented in “Deferred income taxes” as "Long-term liabilities" on the Consolidated Balance Sheets. The deferred tax asset and liability net position is determined by tax jurisdiction.
The accounting standards allow companies to adopt an accounting policy to either recognize deferred taxes for global intangible low-taxed income (“GILTI”) or treat them as a tax cost in the year incurred. We have elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. Under this policy, we have not provided deferred taxes on temporary differences that upon their reversal would affect the amount of income subject to GILTI in the period.
We have not established deferred income taxes on accumulated undistributed earnings and other basis differences for operations outside the U.S., as such earnings and basis differences are indefinitely reinvested. Determining the unrecognized deferred tax liability for these earnings is not practicable. Generally, no significant U.S. federal income taxes will be imposed on future distributions of non-U.S. earnings under the current law. However, distributions to the U.S. or other jurisdictions could be subject to withholding and other local taxes, and these taxes would not be material.
Uncertain Tax Positions
The aggregate changes in the gross amount of unrecognized tax benefits, excluding interest and penalties consisted of the following:
For the Fiscal Years Ended May
(in millions)202620252024
Beginning balance$82.6 $79.6 $59.6 
Decreases from positions established during prior fiscal years(1.1)(1.5)(3.6)
Increases from positions established during current and prior fiscal years27.5 16.6 29.4 
Decreases relating to settlements with taxing authorities— (1.7)(0.5)
Expiration of statute of limitations(12.7)(10.4)(5.3)
Ending balance (a)$96.3 $82.6 $79.6 
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(a)If we were to prevail on the unrecognized tax benefits recorded as of May 31, 2026 and May 25, 2025, it would result in a tax benefit of $83.4 million and $71.4 million, respectively, and a reduction in the effective tax rate. The ending balances exclude $19.5 million and $17.8 million of gross interest and penalties in fiscal 2026 and 2025, respectively. We accrue interest and penalties associated with uncertain tax positions as part of income tax expense.
Lamb Weston conducts business and files tax returns in numerous countries, states, and local jurisdictions. We do not have any significant open tax audits. Major jurisdictions where we conduct business generally have statutes of limitations ranging from three to five years.