16. SEGMENTS

We have four operating segments, each of which is a reportable segment: Global, Retail, Foodservice 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. We measure our segments’ product contribution margin, which is defined as net sales, less cost of sales and advertising and promotion expenses and excludes general corporate expenses, interest, and taxes. See Note 14, Segments, of the Notes to Combined and Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of the Form 10-K for more information.


	Thirteen Weeks Ended
	August 27,		August 28,
(in millions)	2017		2016
Net sales:
Global	$	413.9	$	399.2
Foodservice		279.4		260.2
Retail		92.0		89.6
Other		32.2		27.3
Total net sales		817.5		776.3
Product contribution margin (a):
Global		74.7		73.7
Foodservice		90.9		79.4
Retail		16.5		19.6
Other		11.2		3.2
Total product contribution margin		193.3		175.9
Equity method investment earnings		20.0		10.6
Total product contribution margin plus equity method investment earnings		213.3		186.5
Other selling, general and administrative expenses (a) (b)		55.7		50.9
Interest expense, net		25.2		1.5
Income tax expense		44.1		51.0
Net income		88.3		83.1
Less: Income attributable to noncontrolling interests		4.9		3.5
Net income attributable to Lamb Weston Holdings, Inc.	$	83.4	$	79.6

(a)

Product contribution margin is defined as net sales, less cost of sales and advertising and promotion expenses. Other selling, general and administrative expenses include all selling, general and administrative expenses other than advertising and promotions expenses.

(b)

The thirteen weeks ended August 27, 2017 and August 28, 2016, include $2.2 million and $9.7 million, respectively, of pre-tax expenses related to the Separation. In all periods, the expenses related primarily to professional fees and other employee-related costs.

Assets by Segment

The manufacturing assets of Lamb Weston are shared across all reporting segments. Output from these facilities used by each reporting segment can change from fiscal year to fiscal year. Therefore, it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment.

Other Information

Lamb Weston’s largest customer, McDonald’s Corporation, accounted for approximately 11% of consolidated “Net sales” in all periods presented in our Condensed Combined and Consolidated Statements of Earnings.