Note 15 Operating Segment Information

The allocation of intersegment profit and corporate level expenses to the reporting segments was historically performed for the legacy Spartan Stores operations and the legacy Nash-Finch Company operations using methodologies consistent with Spartan Stores’ and Nash-Finch Company’s respective historical practices. As previously disclosed, subsequent to the merger management commenced an evaluation of potential methodologies for allocating intersegment profit and corporate level expenses to the reporting segments to determine the most appropriate manner for the newly merged operations. During the third quarter of fiscal 2014, management completed this evaluation. The new allocation methodology was applied in the third quarter of fiscal year 2014 and reflects the manner in which the business is now managed and how management allocates resources and assesses performance. In accordance with generally accepted accounting principles, results for the first and second quarters of fiscal 2014 and all quarters in fiscal year 2013 have been revised to reflect the new allocation methodologies. There was no impact to consolidated financial results.

The following tables set forth information about SpartanNash by operating segment under the new methodologies:

(In thousands)	Military		Food Distribution		Retail		Total
12 Week Period Ended October 4, 2014
Net sales to external customers	$	523,553	$	764,288	$	521,730	$	1,809,571
Inter-segment sales		—		223,809		—		223,809
Merger transaction and integration expenses		3		1,375		1		1,379
Depreciation and amortization		2,751		6,931		10,269		19,951
Operating earnings		5,651		13,834		14,127		33,612
Capital expenditures		1,120		9,329		9,542		19,991

(In thousands)	Food Distribution		Retail		Total
12 Week Period Ended October 12, 2013
Net sales to external customers	$	270,195	$	359,893	$	630,088
Inter-segment sales		150,561		—		150,561
Merger transaction and integration expenses		4,634		—		4,634
Depreciation and amortization		1,529		8,179		9,708
Operating earnings		1,366		11,006		12,372
Capital expenditures		3,059		6,199		9,258

(In thousands)	Military		Food Distribution		Retail		Total
40 Week Period Ended October 4, 2014
Net sales to external customers	$	1,710,122	$	2,503,216	$	1,740,135	$	5,953,473
Inter-segment sales		—		751,777		—		751,777
Merger transaction and integration expenses		27		8,097		4		8,128
Depreciation and amortization		8,580		23,105		35,236		66,921
Operating earnings		15,956		38,713		39,170		93,839
Capital expenditures		13,968		19,319		24,324		57,611

(In thousands)	Food Distribution		Retail		Total
40 Week Period Ended October 12, 2013
Net sales to external customers	$	878,791	$	1,182,700	$	2,061,491
Inter-segment sales		493,936		—		493,936
Merger transaction and integration expenses		7,011		—		7,011
Depreciation and amortization		5,225		26,701		31,926
Operating earnings		15,519		33,111		48,630
Capital expenditures		8,528		20,256		28,784

12 Week Period Ended July 12, 2014 (second quarter)

(In thousands)	Military		Food Distribution		Retail		Total
As currently reported
Net sales to external customers	$	502,402	$	767,926	$	539,847	$	1,810,175
Inter-segment sales		—		231,622		—		231,622
Merger transaction and integration expenses		24		2,554		3		2,581
Depreciation and amortization		1,552		7,155		10,710		19,417
Operating earnings		5,884		10,670		16,095		32,649
Capital expenditures		2,653		3,423		8,705		14,781

	Military			Food Distribution			Retail		Total
Allocation methodology changes applied
Net sales to external customers	$	—		$	—		$	—	$	—
Inter-segment sales		—			(12,244	)		—		(12,244	)
Merger transaction and integration expenses		—			—			—		—
Depreciation and amortization		66			(550	)		484		—
Operating earnings		(847	)		(458	)		1,305		—
Capital expenditures		—			—			—		—

	Military		Food Distribution		Retail		Total
As originally reported
Net sales to external customers	$	502,402	$	767,926	$	539,847	$	1,810,175
Inter-segment sales		—		243,866		—		243,866
Merger transaction and integration expenses		24		2,554		3		2,581
Depreciation and amortization		1,486		7,705		10,226		19,417
Operating earnings		6,731		11,128		14,790		32,649
Capital expenditures		2,653		3,423		8,705		14,781

12 Week Period Ended July 20, 2013 (second quarter)

(In thousands)	Food Distribution		Retail		Total
As currently reported
Net sales to external customers	$	271,890	$	379,235	$	651,125
Inter-segment sales		153,126		—		153,126
Merger transaction and integration expenses		2,377		—		2,377
Depreciation and amortization		1,565		7,927		9,492
Operating earnings		1,100		14,066		15,166
Capital expenditures		2,562		7,237		9,799

	Food Distribution			Retail		Total
Allocation methodology changes applied
Net sales to external customers	$	—		$	—	$	—
Inter-segment sales		(7,083	)		—		(7,083	)
Merger transaction and integration expenses		—			—		—
Depreciation and amortization		(522	)		522		—
Operating earnings		(5,665	)		5,665		—
Capital expenditures		—			—		—

	Food Distribution		Retail		Total
As originally reported
Net sales to external customers	$	271,890	$	379,235	$	651,125
Inter-segment sales		160,209		—		160,209
Merger transaction and integration expenses		2,377		—		2,377
Depreciation and amortization		2,087		7,405		9,492
Operating earnings		6,765		8,401		15,166
Capital expenditures		2,562		7,237		9,799

16 Week Period Ended April 19, 2014 (first quarter)

(In thousands)	Military		Food Distribution		Retail		Total
As currently reported
Net sales to external customers	$	684,167	$	971,002	$	678,558	$	2,333,727
Inter-segment sales		—		296,346		—		296,346
Merger transaction and integration expenses		—		4,168		—		4,168
Depreciation and amortization		4,277		9,019		14,257		27,553
Operating earnings		4,421		14,209		8,948		27,578
Capital expenditures		10,195		6,567		6,077		22,839

	Military			Food Distribution			Retail		Total
Allocation methodology changes applied
Net sales to external customers	$	—		$	—		$	—	$	—
Inter-segment sales		—			(15,470	)		—		(15,470	)
Merger transaction and integration expenses		—			—			—		—
Depreciation and amortization		84			(709	)		625		—
Operating earnings		(1,140	)		(152	)		1,292		—
Capital expenditures		—			—			—		—

	Military		Food Distribution		Retail		Total
As originally reported
Net sales to external customers	$	684,167	$	971,002	$	678,558	$	2,333,727
Inter-segment sales		—		311,816		—		311,816
Merger transaction and integration expenses		—		4,168		—		4,168
Depreciation and amortization		4,193		9,728		13,632		27,553
Operating earnings		5,561		14,361		7,656		27,578
Capital expenditures		10,195		6,567		6,077		22,839

16 Week Period Ended April 27, 2013 (first quarter)

(In thousands)	Food Distribution		Retail		Total
As currently reported
Net sales to external customers	$	336,706	$	443,572	$	780,278
Inter-segment sales		190,249		—		190,249
Depreciation and amortization		2,131		10,595		12,726
Operating earnings		13,053		8,039		21,092
Capital expenditures		2,907		6,820		9,727

	Food Distribution			Retail		Total
Allocation methodology changes applied
Net sales to external customers	$	—		$	—	$	—
Inter-segment sales		(8,624	)		—		(8,624	)
Depreciation and amortization		(685	)		685		—
Operating earnings		(6,268	)		6,268		—
Capital expenditures		—			—		—

	Food Distribution		Retail		Total
As originally reported
Net sales to external customers	$	336,706	$	443,572	$	780,278
Inter-segment sales		198,873		—		198,873
Depreciation and amortization		2,816		9,910		12,726
Operating earnings		19,321		1,771		21,092
Capital expenditures		2,907		6,820		9,727

(In thousands)	Military		Food Distribution			Retail			Total
11 Week Period Ended December 28, 2013 (fourth quarter)
Net sales to external customers	$	248,642	$	473,900		$	406,005		$	1,128,547
Inter-segment sales		—		179,708			—			179,708
Merger transaction and integration expenses		—		13,985			—			13,985
Depreciation and amortization		1,412		3,972			9,355			14,739
Operating earnings		1,901		(4,132	)		(10,846	)		(13,077	)
Capital expenditures		2,246		2,202			7,009			11,457

	October 4, 2014		December 28, 2013*
Total Assets
Military	$	480,599	$	451,518
Food Distribution		810,725		805,468
Retail		695,192		721,898
Discontinued operations		4,753		4,767
Total	$	1,991,269	$	1,983,651

*	See Note 3.

The following table presents sales by type of similar product and services:

	12 Weeks Ended								40 Weeks Ended
(Dollars in thousands)	October 4, 2014				October 12, 2013				October 4, 2014				October 12, 2013
Non-perishables ⁽¹⁾	$	1,146,410	63.4	%	$	312,038	49.5	%	$	3,753,373	63.1	%	$	1,012,545	49.1	%
Perishables ⁽²⁾		554,970	30.7			223,841	35.5			1,840,802	30.9			740,582	35.9
Pharmacy		65,733	3.6			50,909	8.1			215,459	3.6			163,242	7.9
Fuel		42,458	2.3			43,300	6.9			143,839	2.4			145,122	7.1
Consolidated net sales	$	1,809,571	100	%	$	630,088	100	%	$	5,953,473	100	%	$	2,061,491	100	%

⁽¹⁾	Consists primarily of general merchandise, grocery, beverages, snacks and frozen foods.

⁽²⁾	Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.