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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

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

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 ~~August 15, 2017,~~May 25, 2018, the registrant had ~~37,270,606~~35,921,757 outstanding shares of common stock, no par value.

The matters discussed in this Quarterly Report on Form 10-Q, in the Company’s press releases and in the Company’s website-accessible conference calls with analysts and investor presentations include “forward-looking statements” about the plans, strategies, objectives, goals or expectations of SpartanNash Company and subsidiaries (“SpartanNash” or “the Company”). These forward-looking statements are identifiable by words or phrases indicating that SpartanNash or management “expects,” “anticipates,” “plans,” “believes,” or “estimates,” or that a particular occurrence or event “will,” “may,” “could,” “should” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook” or “trend” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Part I, Item 2 of this Quarterly Report on Form 10-Q, are inherently forward-looking. The Company’s asset impairment and restructuring cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of the Quarterly Report, other report, release, presentation, or statement.

In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q, SpartanNash’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and other periodic reports filed with the Securities and Exchange Commission (“SEC”), there are many important factors that could cause actual results to differ materially. These risks and uncertainties include general business conditions, changes in overall economic conditions that impact consumer spending, the Company’s ability to integrate acquired assets, the impact of competition and other factors which are often beyond the control of the Company, and other risks listed in the “Risk Factors” discussion in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016~~30, 2017 and risks and uncertainties not presently known to the Company or that the Company currently deems immaterial.

This section and the discussions contained in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016~~30, 2017 and in Part I, Item 2 “Critical Accounting Policy” of the Quarterly Report on Form 10-Q, are intended to provide meaningful cautionary statements for purposes of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect the Company’s expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to SpartanNash or that SpartanNash currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this Quarterly Report.

	July 15,			December 31,			April 21,			December 30,
	2017			2016			2018			2017
Assets
Current assets
Cash and cash equivalents	$	22,726		$	24,351		$	17,167		$	15,667
Accounts and notes receivable, net		349,279			291,568			330,254			344,057
Inventories, net		555,578			539,857			577,508			597,162
Prepaid expenses and other current assets		32,712			37,187			47,144			47,400
Property and equipment held for sale		173			521			13,093			—
Total current assets		960,468			893,484			985,166			1,004,286

Property and equipment, net		621,618			559,722			582,434			600,240
Goodwill		366,636			322,686			178,648			178,648
Intangible assets, net		130,048			60,202			132,565			134,430
Other assets, net		119,765			94,242			138,124			138,193

Total assets	$	2,198,535		$	1,930,336		$	2,016,937		$	2,055,797

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	394,276		$	372,432		$	356,534		$	376,977
Accrued payroll and benefits		60,363			75,333			57,317			65,156
Other accrued expenses		41,166			40,788			43,034			43,252
Current maturities of long-term debt and capital lease obligations		19,001			17,424			7,628			9,196
Total current liabilities		514,806			505,977			464,513			494,581

Long-term liabilities
Deferred income taxes		137,219			123,243			49,372			42,050
Postretirement benefits		16,689			16,266			15,944			15,687
Other long-term liabilities		39,496			45,768			41,697			40,774
Long-term debt and capital lease obligations		641,257			413,675			733,367			740,755
Total long-term liabilities		834,661			598,952			840,380			839,266

Commitments and contingencies (Note 8)
Commitments and contingencies (Note 7)

Shareholders’ equity
Common stock, voting, no par value; 100,000 shares authorized; 37,536 and 37,539 shares outstanding		522,046			521,984
Common stock, voting, no par value; 100,000 shares authorized; 35,923 and 36,466 shares outstanding								481,286			497,093
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding		—			—			—			—
Accumulated other comprehensive loss		(11,392	)		(11,437	)		(15,052	)		(15,136	)
Retained earnings		338,414			314,860			245,810			239,993
Total shareholders’ equity		849,068			825,407			712,044			721,950

Total liabilities and shareholders’ equity	$	2,198,535		$	1,930,336		$	2,016,937		$	2,055,797

	12 Weeks Ended							28 Weeks Ended
	July 15,			July 16,				July 15,				July 16,			16 Weeks Ended
	2017			2016				2017				2016			April 21, 2018			April 22, 2017
Net sales	$	1,894,709		$	1,827,562			$	4,297,213			$	4,106,332		$	2,385,073		$	2,353,702
Cost of sales		1,623,683			1,564,863				3,668,811				3,509,391			2,041,859			1,996,326
Gross profit		271,026			262,699				628,402				596,941			343,214			357,376

Operating expenses
Selling, general and administrative		231,476			223,418				554,170				519,799			309,058			322,779
Merger/acquisition and integration		622			913				4,638				1,810			2,206			4,017
Restructuring (gains) charges and asset impairment		(14	)		5,748				1,008				21,052
Restructuring charges and asset impairment																6,202			1,021
Total operating expenses		232,084			230,079				559,816				542,661			317,466			327,817

Operating earnings		38,942			32,620				68,586				54,280			25,748			29,559

Other (income) and expenses
Other expenses and (income)
Interest expense		5,682			4,437				12,997				10,260			8,778			7,315
Other, net		(67	)		(120	)			(172	)			(270	)		(225	)		(190	)
Total other expenses, net		5,615			4,317				12,825				9,990			8,553			7,125

Earnings before income taxes and discontinued operations		33,327			28,303				55,761				44,290			17,195			22,434
Income taxes		12,267			10,743				19,636				16,770			4,760			7,369
Earnings from continuing operations		21,060			17,560				36,125				27,520			12,435			15,065

Loss from discontinued operations, net of taxes		(31	)		(76	)			(71	)			(185	)		(92	)		(40	)
Net earnings	$	21,029		$	17,484			$	36,054			$	27,335		$	12,343		$	15,025

Basic earnings per share:
Earnings from continuing operations	$	0.56		$	0.47			$	0.96			$	0.73		$	0.34		$	0.40
Loss from discontinued operations		—			—		*		—				—			—			—
Net earnings	$	0.56		$	0.47			$	0.96			$	0.73		$	0.34		$	0.40

Diluted earnings per share:
Earnings from continuing operations	$	0.56		$	0.47			$	0.96			$	0.73		$	0.34		$	0.40
Loss from discontinued operations		—			—				(0.01	)	*		—			—			—
Net earnings	$	0.56		$	0.47			$	0.95			$	0.73		$	0.34		$	0.40

	12 Weeks Ended					28 Weeks Ended
	July 15,			July 16,		July 15,			July 16,			16 Weeks Ended
	2017			2016		2017			2016			April 21, 2018			April 22, 2017
Net earnings	$	21,029		$	17,484	$	36,054		$	27,335		$	12,343		$	15,025

Other comprehensive income, before tax
Pension and postretirement liability adjustment		31			1		72			3			111			41
Total other comprehensive income, before tax		31			1		72			3			111			41

Income tax expense related to items of other comprehensive income		(11	)		—		(27	)		(1	)		(27	)		(16	)

Total other comprehensive income, after tax		20			1		45			2			84			25
Comprehensive income	$	21,049		$	17,485	$	36,099		$	27,337		$	12,427		$	15,050

							Accumulated															Accumulated
							Other															Other
	Shares			Common			Comprehensive			Retained						Shares			Common			Comprehensive			Retained
	Outstanding			Stock			Income (Loss)			Earnings			Total			Outstanding			Stock			Income (Loss)			Earnings			Total
Balance at December 31, 2016		37,539		$	521,984		$	(11,437	)	$	314,860		$	825,407
Balance at December 30, 2017																	36,466		$	497,093		$	(15,136	)	$	239,993		$	721,950
Net earnings		—			—			—			36,054			36,054			—			—			—			12,343			12,343
Other comprehensive income		—			—			45			—			45			—			—			84			—			84
Dividends - $0.33 per share		—			—			—			(12,500	)		(12,500	)
Dividends - $0.18 per share																	—			—			—			(6,526	)		(6,526	)
Share repurchase		(300	)		(7,873	)		—			—			(7,873	)		(952	)		(20,000	)		—			—			(20,000	)
Stock-based employee compensation		—			7,491			—			—			7,491			—			5,290			—			—			5,290
Issuances of common stock on stock option exercises and stock bonus plan		168			3,606			—			—			3,606
Issuances of common stock for stock bonus plan																	24			470			—			—			470
Issuances of restricted stock		292			—			—			—			—			472			—			—			—			—
Cancellations of stock-based awards		(163	)		(3,162	)		—			—			(3,162	)		(87	)		(1,567	)		—			—			(1,567	)
Balance at July 15, 2017		37,536		$	522,046		$	(11,392	)	$	338,414		$	849,068
Balance at April 21, 2018																	35,923		$	481,286		$	(15,052	)	$	245,810		$	712,044

	28 Weeks Ended
	July 15,			July 16,			16 Weeks Ended
	2017			2016			April 21, 2018			April 22, 2017
Cash flows from operating activities
Net earnings	$	36,054		$	27,335		$	12,343		$	15,025
Loss from discontinued operations, net of tax		71			185			92			40
Earnings from continuing operations		36,125			27,520			12,435			15,065
Adjustments to reconcile net earnings to net cash provided by operating activities:
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Non-cash restructuring, asset impairment and other charges		588			19,271			6,104			916
Depreciation and amortization		46,362			42,040			25,569			25,850
LIFO expense		2,282			2,471			1,540			1,590
Postretirement benefits expense		399			50
Postretirement benefits (income) expense								(303	)		465
Deferred taxes on income		14,565			4,752			7,322			9,719
Stock-based compensation expense		7,491			6,067			5,290			6,352
Other, net		(75	)		(79	)		(49	)		(6	)
Changes in operating assets and liabilities:
Accounts receivable		(25,904	)		9,680			14,703			(18,879	)
Inventories		(12,764	)		(18,360	)		17,950			3,713
Prepaid expenses and other assets		(4,806	)		(9,512	)		1,063			(1,108	)
Accounts payable		(2,369	)		(7,418	)		(18,606	)		(26,159	)
Accrued payroll and benefits		(18,961	)		(11,816	)		(7,326	)		(19,527	)
Postretirement benefit payments		(178	)		(150	)		(88	)		(90	)
Other accrued expenses and other liabilities		(4,398	)		(7,334	)		(5,223	)		(8,192	)
Net cash provided by operating activities		38,357			57,182
Net cash provided by (used in) operating activities								60,381			(10,291	)
Cash flows from investing activities
Purchases of property and equipment		(37,789	)		(41,336	)		(21,041	)		(19,476	)
Net proceeds from the sale of assets		3,701			5,422			150			557
Acquisitions, net of cash acquired		(214,595	)		—			—			(214,595	)
Loans to customers		(330	)		—			(698	)		—
Payments from customers on loans		1,437			1,056			662			754
Other		(225	)		(670	)		(6	)		(133	)
Net cash used in investing activities		(247,801	)		(35,528	)		(20,933	)		(232,893	)
Cash flows from financing activities
Proceeds from revolving credit facility		916,467			690,601
Payments on revolving credit facility		(683,807	)		(684,183	)
Proceeds from senior secured credit facility								259,321			652,573
Payments on senior secured credit facility								(266,753	)		(406,140	)
Share repurchase		(7,873	)		(9,000	)		(20,000	)		—
Net payments related to stock-based award activities		(3,163	)		(2,229	)		(1,567	)		(2,607	)
Repayment of other long-term debt		(4,283	)		(5,145	)		(2,331	)		(2,265	)
Financing fees paid		(252	)		(99	)		(7	)		(216	)
Proceeds from exercise of stock options		3,207			1,032			—			3,207
Dividends paid		(12,500	)		(11,253	)		(6,526	)		(6,255	)
Net cash provided by (used in) financing activities		207,796			(20,276	)
Net cash (used in) provided by financing activities								(37,863	)		238,297
Cash flows from discontinued operations
Net cash provided by (used in) operating activities		23			(281	)
Net cash provided by (used in) discontinued operations		23			(281	)
Net (decrease) increase in cash and cash equivalents		(1,625	)		1,097
Net cash (used in) provided by operating activities								(85	)		52
Net cash (used in) provided by discontinued operations								(85	)		52
Net increase (decrease) in cash and cash equivalents								1,500			(4,835	)
Cash and cash equivalents at beginning of period		24,351			22,719			15,667			24,351
Cash and cash equivalents at end of period	$	22,726		$	23,816		$	17,167		$	19,516

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SpartanNash Company and its subsidiaries (“SpartanNash” or “the Company”). Intercompany accounts and transactions have been eliminated. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December ~~31, 2016.~~30, 2017.

In the opinion of management, the accompanying condensed consolidated financial statements, taken as a whole, contain all adjustments, including normal recurring items, necessary to present fairly the financial position of SpartanNash as of ~~July 15, 2017,~~April 21, 2018, and the results of its operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

The unaudited information in the condensed consolidated financial statements for the ~~second~~first quarters of 2018 and ~~year to date periods of~~ 2017 ~~and 2016~~ include the results of operations of the Company for the ~~12 and 28-week~~16 week periods ended ~~July 15,~~April 21, 2018 and April 22, 2017, ~~and July 16, 2016,~~ respectively.

Note 2 – Adoption of New Accounting Standards and Recently Issued Accounting Standards

In ~~January 2017,~~May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2017-04, “Intangibles~~2014-09, “Revenue from Contracts with Customers – Goodwill and Other: Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. If a reporting unit fails Step 1 of the goodwill impairment test, entities are no longer required to compute the implied fair value of goodwill following the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.Topic 606” (“ASC 606”). The new guidance ~~is effective~~affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. As of the beginning of 2018, the Company ~~in fiscal year ending January 2, 2021. Early adoption is permitted~~adopted ASC 606 and all subsequent ASUs that modified ASC 606. Refer to Note 3, Revenue Recognition, for ~~interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of~~additional information about adoption of this ~~standard~~guidance and additional disclosures required under the standard.

From a principal versus agent perspective, the Company determined that certain contracts in the Food Distribution segment that were historically reported on ~~its~~a gross basis are now required to be reported on a net basis, resulting in a corresponding decreases to both net sales and cost of sales of $42.6 million in the first quarter of 2018 from what would have been recognized under previous guidance. The implementation of the guidance had no impact on gross profit, net earnings, the balance sheet, cash flows, equity, or the timing of revenue recognition in current or prior periods. The adoption of the guidance using the full retrospective method resulted in decreases to fiscal 2017 net sales and cost of sales previously reported as shown in the following table:

In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits.” ASU 2017-07 requires that the service cost component of pension and postretirement benefit costs be presented in the same line item as other current employee compensation costs and other components of those benefit costs be presented separately from the service cost component and outside a subtotal of income from operations, if presented. The ASU also requires that only the service cost component of pension and postretirement benefit costs is eligible for capitalization. The Company adopted this guidance as of the beginning of 2018. Accordingly, benefit costs other than service cost, are reflected in the condensed consolidated ~~financial statements.~~statements of earnings in Other, net, whereas they previously were recognized in Selling, general and administrative expenses. Retrospective application resulted in a decrease to Other, net and an increase in Selling, general and administrative expenses. The costs associated with the reclassifications were not material in either of the periods presented.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations – Clarifying the Definition of a Business.” ASU 2017-01 narrows the definition of a business and provides a screen to determine when a set of the three elements of a ~~business—~~business – inputs, processes, and outputs – are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. ~~The new~~This guidance iswas effective ~~for~~as of the ~~Company in fiscal year ending December 29,~~beginning of 2018. ~~The Company is currently evaluating~~As no business combinations have occurred since the effective date, there has been no impact ~~of adoption of this standard~~ on ~~its~~the consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 provides for simplification of several aspects of the accounting for share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The Company adopted the new standard in the first quarter of fiscal 2017. Accordingly the tax benefits or deficiencies related to stock-based compensation are reflected in the condensed consolidated statements of earnings as a component of the provision for income taxes, whereas they previously were recognized in equity. As a result of the adoption, the Company recognized $1.3 million of tax benefits related to share-based payments in its provision for income taxes in 2017. Additionally, the Company’s condensed consolidated statements of cash flows now include tax benefits as an operating activity, while cash paid on associates’ behalf related to shares withheld for tax purposes is classified as a financing activity. Retrospective application of the cash flow presentation resulted in $2.5 million increases to both net cash provided by operating activities and net cash used in financing activities, respectively, for the year-to-date period ended July 16, 2016. The Company’s stock compensation expense continues to reflect estimated forfeitures.

In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 provides guidance for lease accounting and stipulates that lessees will need to recognize a right-of-use asset and a lease liability for substantially all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease rent payments. Treatment in the consolidated statements of ~~earnings~~operations will be similar to the current treatment of operating and capital leases. The new guidance is effective on a modified retrospective basis for the Company in the first quarter of its fiscal year ending December 28, 2019. The Company has established a transition process which includes understanding the current leasing activities, identifying changes resulting from the new standard, designing tools to account for the change, and updating accounting policies, processes and controls over financial reporting. The adoption of this ASU will result in a significant increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use ~~assets, and the Company is currently evaluating the other~~assets. Other effects of the adoption of this ASU ~~on its consolidated financial statements.~~are currently being evaluated by the Company.

~~In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.”~~ Note 3 – Revenue

The new guidance affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The standard’s core principle is that a company will recognizeCompany recognizes revenue when it ~~transfers~~satisfies a performance obligation by transferring control of the promised goods orand services to ~~customers~~a customer, in an amount that reflects the consideration ~~to which the company~~that it expects to ~~be entitled~~receive in exchange for those goods or services. ~~In August 2015,~~This is achieved through applying the ~~FASB issued ASU 2015-14, “Deferral~~following five-step model:

The Company generates substantially all of its ~~fiscal year ending December 29, 2018. The adoption will include updates~~revenue from contracts with customers, whether formal or implied. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as provided under ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net);” ASU 2016-10, “Identifying Performance Obligations and Licensing;” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients.” Adoption is allowed by either the full retrospective or modified retrospective approach.

The Company is currently in the process of evaluating the impact of adoption of this standard on its consolidated financial statements and has substantially completed its initial evaluation of the major focus areas that could impact the Company. From a principal versus agent considerations perspective, the Company ~~has evaluated its significant arrangements~~considers itself a pass-through conduit for collecting and ~~has determined that revenue recognition on a gross reporting basis will remain relatively unchanged,~~remitting sales taxes, with the exception of taxes assessed during the procurement process of select inventories. Greater than 99% of the Company’s revenues are recognized at a ~~few smaller~~point in time. Revenues from product sales are recognized when control of the goods is transferred to the customer, which occurs at a point in time, typically upon delivery or shipment to the customer, depending on shipping terms, or upon customer check-out in a corporate owned retail store. Freight revenues are also recognized upon delivery, at a point in time. Other revenues, including revenues from value-added services, are recognized as earned, over a period of time. All of the Company’s revenues are domestic, as the Company has no performance obligations on international shipments subsequent to delivery to the domestic port. This standard applies to all contracts with customers, except for contracts that ~~could~~are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments.

The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) with respect to each contract with customers. The Company determined that certain contracts in the Food Distribution segment that were historically reported on a gross basis are now required to be reported on a net basis, resulting in a corresponding decreases to both net sales and cost of sales.

Based upon the nature of the products the Company sells, its customers have limited rights of return which are immaterial. Discounts provided by the Company to customers at the time of sale are recognized as a reduction in sales as the products are sold. Certain contracts include rebates and other forms of variable consideration, including up-front rebates, rebates in arrears, rebatable incentives, flex funds, and product incentives, which may have tiered structures based on purchase volumes and which are accounted for as variable consideration. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the arrangements and management’s final assessment. As it pertains to the Food Distribution and Military segments, the Company determined that the promised goods or services other than grocery products outlinedvariable consideration. Variable consideration is included in the contracts with customers are immaterial in the context of the contracts. As a result of this determination, the Company is not required to assess whether these promised goods or services are performance obligations, and therefore, believes revenue recognition practices will remain relatively unchanged as there are no additional deliverables for which the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will ~~need~~not occur. The Company believes that there will not be significant changes to ~~be allocated.~~its estimates of variable consideration, and has not constrained any consideration in any period presented.

The following table provides information about disaggregated revenue by timing of revenue recognition, type of products and services and type of customer for each of the Company’s reportable segments:

	16 Weeks Ended April 21, 2018
(In thousands)	Food Distribution		Military		Retail		Total
Type of products:
Center store (a)	$	360,143	$	322,358	$	221,292	$	903,793
Fresh (b)		431,598		179,049		205,585		816,232
Non-food (c)		339,196		160,348		99,612		599,156
Fuel		—		—		39,463		39,463
Other		24,274		1,865		290		26,429
Total	$	1,155,211	$	663,620	$	566,242	$	2,385,073
Type of customers:
Individuals	$	—	$	—	$	565,952	$	565,952
Manufacturers, brokers and distributors		61,624		645,677		—		707,301
Retailers		1,074,831		16,078		—		1,090,909
Other		18,756		1,865		290		20,911
Total	$	1,155,211	$	663,620	$	566,242	$	2,385,073

	16 Weeks Ended April 22, 2017
(In thousands)	Food Distribution		Military		Retail		Total
Type of products:
Center store (a)	$	352,190	$	313,677	$	236,745	$	902,612
Fresh (b)		432,529		173,538		220,742		826,809
Non-food (c)		304,546		154,540		102,582		561,668
Fuel		—		—		35,822		35,822
Other		24,883		1,558		350		26,791
Total	$	1,114,148	$	643,313	$	596,241	$	2,353,702
Type of customers:
Individuals	$	—	$	—	$	595,891	$	595,891
Manufacturers, brokers and distributors		66,585		641,755		—		708,340
Retailers		1,028,468		—		—		1,028,468
Other		19,095		1,558		350		21,003
Total	$	1,114,148	$	643,313	$	596,241	$	2,353,702

(a) Center store includes dry grocery, frozen and beverages.
(b) Fresh includes produce, meat, dairy, deli, bakery, prepared proteins, seafood and floral.
(c) Non-food includes general merchandise, health and beauty care, tobacco products and pharmacy.

Customer Supply Agreements (CSAs) – The Company enters into CSAs (also known as Retail Sales and Service Agreements) with many of its independent and national retailer customers. These contracts obligate the Company to supply grocery and related products upon receipt of a purchase order from its customers. The contracts often specify minimum purchases a customer is required to make - in dollars or as a percentage of their total purchases - in order to earn certain rebates or incentives. In some cases, customers are required to repay certain advanced or loaned funds if they fail to meet purchase minimums or otherwise exit the supply agreement. Many of these contracts ~~also~~ include ~~contingent amounts~~various performance obligations other than providing grocery products, such as providing store resets, shelf tags, signage, or merchandising services. The Company has determined that these obligations are not material in the overall context of ~~variable consideration,~~the contracts, and as such has not allocated transaction price to these obligations. Revenue is recognized under these contracts when control of the product passes to the customer, which may happen before or after delivery depending upon specified shipping terms.

Contracts with Manufacturers and Brokers to supply the Defense Commissary Agency (“DeCA”) and Other Government Agencies – DeCA operates a chain of 237 commissaries on U.S. military installations. DeCA contracts with manufacturers to obtain grocery products for the commissary system. Manufacturers either deliver the products to the commissaries themselves or, more commonly, contract with distributors such as SpartanNash to provide products to the commissaries. Manufacturers must authorize the distributors as their official representatives to DeCA, and the distributors must adhere to DeCA’s frequent delivery system (“FDS”) procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. The Company ~~expects there~~obtains distribution contracts with manufacturers through competitive bidding processes and direct negotiations. As commissaries need to be ~~few, if any, changes~~restocked, DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is the manufacturer’s official representative for a particular commissary or exchange location, and then places a product order with that distributor under the auspices of DeCA’s master contract with the applicable manufacturer. The distributor selects that product from its existing inventory, delivers it to the ~~timing~~commissary or port (in the case of overseas shipments) designated by DeCA, and bills the manufacturer for the product price plus a drayage fee that is typically based on a percentage of the purchase price, but may in some cases be based on a dollar amount per case or pound of product sold. The manufacturer then bills DeCA under the terms of its master contract. As control of the product passes to the customer upon delivery, revenue is recognized by SpartanNash at this point in time.

Revenue is recognized for the full amount paid by the vendor (for product and drayage) as the Company ~~currently recognizes~~is a principal in the transaction and therefore should recognize revenue on a gross basis for these ~~amounts under~~contracts. The FASB’s definition of a principal in the ~~presumption that~~transaction is centered on controlling goods before they are ~~determinable~~transferred to the customer. Key considerations supporting that SpartanNash controls the goods for these contracts prior to transfer to the customer include the following: the Company has the ability to obtain substantially all of the remaining benefits from the assets by selling the goods and/or by pledging the related assets as collateral for borrowings, the Company is required to bear the risk of inventory loss prior to transfer to the customer, has shared responsibilities in the fulfillment and ~~can be estimated.~~acceptability of the goods, and to a lesser extent, has some discretion in establishing the price for the goods. Based on a thorough evaluation of all of the facts and circumstances, including a detailed assessment and interpretation of the revenue standard, the Company concluded that it is a principal in the transaction and should recognize revenue on a gross basis for these contracts.

Retail Sales – The corporate owned retail stores recognize revenue at the time the customer takes possession of the goods. While there are no formal contracts related to these sales, they are within the scope of ASC 606. Customer returns are not material. The Company ~~also expects there~~does not recognize a sale when it awards customer loyalty points or sells gift cards and gift certificates; rather, a sale is recognized when the customer loyalty points, gift card or gift certificate are redeemed to ~~be few, if any,~~purchase product. There were no significant changes to revenue recognition in ~~its~~the Retail segment ~~based on how~~under ASC 606 related to the ~~Company currently records~~accounting for gift card breakage and loyalty rewards, which are immaterial ~~with respect~~ to the consolidated financial statements.

Under its contracts with customers, the Company stands ready to deliver product upon receipt of a purchase order. Accordingly, the Company has no performance obligations under its contracts until its customers submit a purchase order. The Company does not receive pre-payment from its customers, or enter into commitments to provide goods or services that have terms greater than one year. As the performance obligation is part of a contract that has an original expected duration of less than one year, the Company has applied the practical expedient under ASC 606 to omit disclosures regarding remaining performance obligations.

For the first quarters of 2018 and 2017, revenue recognized from performance obligations related to prior periods (for example, due to changes in estimated rebates and incentives impacting the transaction price), was not material.

In the ordinary course of business, the Company may advance funds to certain independent retailers which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances, for remaining a SpartanNash customer for a specified time period. These advances must be repaid if the purchase volume requirements are not met or if the retailer no longer remains a customer for the specified time period. For volume based arrangements, the Company estimates the amount of the advanced funds earned by the retailers based on the expected volume of purchases by the retailer, and amortizes the advances as a reduction of the transaction price and revenue earned. These advances are not considered contract assets under ASC 606 as they are not generated through the transfer of goods or services to the retailers. These advances are included in Other assets, net on the Company’s balance sheets.

When the Company transfers goods or services to a customer, payment is due - subject to normal terms - and is not conditional on anything other than the passage of time. Typical payment terms range from due upon receipt to 30 days, depending on the type of customer and relationship. At contract inception, the Company expects that the period of time between the transfer of goods to the customer and when the customer pays for those goods will be less than one year, which is consistent with the Company’s standard payment terms. Accordingly, the Company has elected the practical expedient under ASC 606 to not adjust for the effects of a significant financing component. As such, these amounts are recorded as receivables and not contract assets. The Company had no contract assets for any period presented.

N~~ote 3~~ The Company does not typically incur incremental costs of obtaining a contract that are contingent upon successful contract execution and would therefore be capitalized. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less.

On January 6, 2017, the Company acquired certain assets and assumed certain liabilities of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”) for $214.6 million in cash, net of $2.5 million of cash acquired. Acquired assets consist primarily of property and equipment of ~~$77.5~~$76.7 million, intangible assets of $72.9 million, and working capital. Intangible assets are primarily composed of customer relationships, which ~~will be~~are amortized over fifteen years, and indefinite lived trade names. In connection with the purchase, the Company ~~is providing~~provided certain earn-out opportunities that have the potential to pay the sellers an additional $27.4 million, collectively, if the business achieves certain performance targets during the first three years after acquisition. IfAs certain performance targets ~~are~~were not met in the first year after acquisition, the Company will be reimbursed a portion of the initial purchase price at an amount not to exceed the sum of: a) $15.0 million, representing the funds paid into escrow, and b) any earn-out opportunities earned by the sellers. The reduction in purchase price, if applicable, will first be applied to funds paid into escrow and then as an offset against and a reduction to any payments owed on the various earn-out ~~opportunities. The acquisition was funded~~opportunities, with ~~proceeds from~~reimbursement made after the ~~Company’s Credit Agreement. As~~third-year anniversary of ~~July 15, 2017, the Company has incurred $4.9 million of costs related to~~ the acquisition ~~of which $2.7 million was incurred in 2017, and is recorded in merger/acquisition and integration expense.~~date.

~~Founded in Indianapolis in 1965,~~ Caito is a leading supplier of fresh fruits and vegetables as well as value-added meal solutions to grocery retailers and food service distributors across ~~22 states in~~ the Southeast, Midwest and Eastern United States. BRT offers temperature-controlled distribution and logistics services throughout North America. Caito and BRT service customers from facilities in Indiana and Florida. Caito also has a fresh cut fruit and vegetable facility in Indianapolis and recently completed a new 118,000 square foot Fresh Kitchen facility, also in Indianapolis. The Fresh Kitchen provides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. As of the second quarter of fiscal 2017, the Company has begun limited production in the Fresh Kitchen facility. The Company acquired Caito and BRT to strengthen its fresh product offerings to its existing customer base and to expand into fast-growing, value-added services, such as freshly-prepared centerplate and side dish categories.

The acquired assets and assumed liabilities were recorded at their estimated fair values as of the acquisition date and were based on preliminary estimates. These estimates are subject to revision upon the finalization of the valuations of the acquired real estate and intangible assets. Adjustments, if any, will be made prior to January 5, 2018. The excess of the purchase price over the fair value of net assets acquired ~~currently estimated at $45.2~~of $46.3 million was recorded as goodwill in the consolidated balance sheet ~~and allocated to~~within the Food Distribution ~~segment. The goodwill recognized~~segment, and is ~~attributable primarily to the assembled workforce of Caito and BRT and expected synergies. The Company expects that all goodwill attributable to the acquisition will be~~ deductible for tax purposes.

~~Changes~~During the measurement period, which ended January 5, 2018, the Company recorded opening balance sheet adjustments in the ~~carrying~~ amount of $1.3 million, which increased the balance of goodwill, associated with updated valuations of certain acquired long-lived assets. All adjustments were ~~as follows:~~

~~The Company reviews goodwill and other intangible assets for impairment annually,~~made during ~~the fourth quarter of each~~ fiscal year, and more frequently if circumstances indicate the possibility of impairment. As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of October 8, 2016, the Food Distribution reporting unit had a fair value that was substantially in excess of its carrying value and the fair value of the Retail reporting unit, which had $190.5 million of recorded goodwill as of the assessment date, exceeded its carrying value by 13.1%. The fair value calculations contain significant judgments and estimates related to the Retail reporting unit’s projected weighted average cost of capital, future revenues and cash flows, and overall profitability. These judgments and estimates are impacted by a number of different factors, both internal and external, that could result in changes in the estimates and their related outcomes. Specifically, certain 2017.~~changes in economic, industry or market conditions, business operations, competition, or the Company’s performance could affect the estimates used in the fair value calculations.~~

The Company continues to assess whether indicators are present or if there are changes in circumstances that would suggest impairment may exist, including an evaluation of business climate changes and the significant estimates related to the Retail reporting unit’s future revenues, cash flows and profitability. Since the most recent goodwill impairment test, the Company continues to monitor the trends of the Retail reporting unit’s performance. At this time the Company is not aware of any events or significant changes in its estimates that would indicate that impairment exists, and the Company has sufficient available information, both current and historical, to support its assumptions, judgments and estimates. From a sensitivity perspective, no goodwill impairment charge would be required for the Retail reporting unit if the estimate of future discounted cash flows was 2.5% lower or if the discount rate increased by 35 basis points. If the Company’s stock price experiences a significant and sustained decline or other events or changes in circumstances occur, such as interest rate increases, changes in macroeconomic conditions, or operating results of the Retail reporting unit not meeting the Company’s estimates, it could result in the Company recording a significant non-cash impairment charge.

The following table provides the activity of reserves for closed properties for the first quarter of ~~2017.~~2018. Reserves for closed properties recorded in the condensed consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on when the obligations are expected to be paid.

Included in the liability are lease obligations recorded at the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income.

Restructuring and asset impairment charges included in the condensed consolidated statements of earnings consisted of the following:

Restructuring and asset impairment charges were primarily incurred in the Retail segment due to the economic and competitive environment of certain stores and in conjunction with the Company’s retail store rationalization plan. The changes in estimates relate to revised estimates of lease and ancillary costs associated with previously closed locations, due to deterioration of the condition of certain properties. The lease termination adjustments represent the benefits recognized in connection with lease buyouts negotiated related to previously closed stores.

~~Long-term debt consists~~Fair Value Measurements. Assets with a book value of $1.8 million were measured at a fair value of $0.3 million, resulting in an impairment charge of $1.5 million in 2018. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the ~~following:~~geographic area in which the assets are located, and when necessary, uses real estate brokers.

Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term maturities of these financial instruments. At July 15, 2017 and December 31, 2016, the book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows:

~~The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (Level 2 inputs and valuation techniques).~~

ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability, reflecting the reporting entity’s own assumptions about the assumptions that market participants would use in pricing.

~~Long-lived assets are measured at~~Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. Assets with a book value of $0.9 million were measured at a fair value of $0.4 million, resulting in an impairment charge of $0.5 million in 2017. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledgebecause of the ~~geographic area in which the assets are located, and when necessary, uses real estate brokers.~~short-term maturities of these financial instruments. See Note 5 for discussion of the fair value measurements related to long-lived asset impairment charges. The book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows:

The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (Level 2 inputs and valuation techniques).

Certain of the Company’s business combinations involve the potential for the receipt or payment of future contingent consideration upon the shortfall or achievement of various operating thresholds, respectively. The additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified EBITDA levels. For business combinations including contingent consideration provisions an asset or liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period with the change in fair value recognized as income or expense within operating expenses in the condensed consolidated statements of income. The Company measures the asset and liability on a recurring basis using Level 3 inputs.

The fair value of contingent consideration is measured using projected payment dates, discount rates, probabilities of payment, and projected EBITDA. Projected contingent payment or receipt amounts are discounted back to the current period using a discounted cash flow model. Projected EBITDA amounts are based on initial deal model forecasts at the time of acquisition as well as the Company’s most recent internal operational budget, and include a probability weighted range of outcomes. Changes in projected EBITDA, probabilities of payment, discount rates, or projected payment dates may result in higher or lower fair value measurements. The recurring Level 3 fair value measurements of contingent consideration include the following significant unobservable inputs as of ~~July 15, 2017:~~April 21, 2018:

The fair value of contingent consideration receivable and payable associated with the prior year acquisitions of Caito and BRT ~~acquisition was~~is $18.4 million and $3.4 million, respectively, as of ~~July 15,~~April 21, 2018, and there has been no change in the fair value since December 30, 2017. The net receivable of $15 million was recorded in other assets, net in the condensed consolidated balance sheets as there is a right of offset for the payable and receivable. Upon payment, the portion of the contingent consideration related to the acquisition date fair value is reported as a financing activity in the condensed consolidated statements of cash flows. Amounts received or paid in excess of the acquisition date fair value are reported as an operating activity in the consolidated statements of cash flows.

The Company is engaged from ~~time-to-time~~time to time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business operations or financial condition. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity.

~~From time to time,~~In the ordinary course of business, the Company may advance funds to certain independent retailers which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances, for remaining a SpartanNash customer for a specified time period. These advances must be repaid if the purchase volume requirements are not met or if the retailer no longer remains a customer for the specified time period. As of ~~July 15, 2017,~~April 21, 2018, the Company has an unearned ~~advance~~advanced amount to one independent retailer for an amount representing approximately two percent of the Company’s total ~~assets, and also has outstanding receivables from this customer in the amount of $8.1 million, of which $4.8 million has been reserved for given the past due status on those receivables.~~assets. The Company’s collateral related to the advanced funds is a security interest in select business assets of the independent retailer’s stores, including select real property assets and other collateral, including a personal ~~guarantees,~~guarantee, from the ~~shareholders. However, in~~shareholder. Despite the ~~event of default,~~collateral, the Company may be unable to ~~recover~~realize the entire unearned portion of the funds advanced to this independent ~~retailer.~~retailer, and accordingly, has established a reserve of $4.9 million related to the advance. During the fourth quarter of 2017, and in the context of a state law receivership proceeding, the customer rationalized its retail store base and entered into a new supply agreement with the Company, and assumed the obligation of the original agreement. Based on the ~~uncertainty associated with estimating the value~~expected cash flows generated from sales to this customer and consideration of the previously mentioned collateral, the Company believes it is adequately reserved as of April 21, 2018. However, if the customer’s future performance and related cash flows are negatively impacted by changes in economic, industry or market conditions, including changes in the ~~risks related~~business climate and competition, the Company may be unable to ~~taking possession~~realize the remaining unearned portion of ~~and divesting~~ the ~~secured business assets,~~advanced funds. Given the uncertainty regarding the previously mentioned factors that could impact the customer’s future performance, the Company cannot reasonably estimate the additional amount of advanced funds, if any, ~~that~~which should be reserved. The Company estimates that the possible range of loss related to this customer, in excess of the amount currently reserved, is between zero and $25.0 million, depending on the circumstances discussed above.

The Company contributes to the Central States Southeast and Southwest Pension Fund (“Central States Plan” or “the Plan”), a multi-employer pension plan, based on obligations arising from its collective bargaining agreements (“CBAs”) in Bellefontaine, Ohio, Lima, Ohio, and Grand Rapids, Michigan covering its supply chain associates at those locations. This Plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by contributing employers and unions; however, SpartanNash is not a trustee. The trustees typically are responsible for determining the level of benefits to be provided to participants, as well as for such matters as the investment of the assets and the administration of the plan. The Company currently contributes to the Central States Plan under the terms outlined in the “Primary Schedule” of Central States’ Rehabilitation Plan or those outlined in the “Default Schedule.” Both the Primary and Default schedules require varying increases in employer contributions over the previous year’s contribution. Increases are set within the ~~collective bargaining agreement~~CBAs and vary by location. The Plan continues to be in red zone status, ~~which~~and according to the Pension Protection Act (“PPA”), is considered to be in ~~critical status as red~~“critical and declining” zone ~~status~~status. Among other factors, plans in the “critical and declining” zone are generally less than 65% ~~funded.~~

funded and are projected to become insolvent within the next 15 years (or 20 years depending on the ratio of active-to-inactive participants). Based on the most recent information available to the Company, management believes that the present value of actuarial accrued liabilities in this multi-employer plan significantly exceeds the value of the assets held in trust to pay benefits. Because SpartanNash is one of a number of employers contributing to this plan, it is difficult to ascertain what the exact amount of the underfunding would be. Management is not aware of any significant change in funding levels since December ~~31, 2016.~~30, 2017. To reduce this underfunding, management expects meaningful increases in expense as a result of required incremental multi-employer pension plan contributions in future years. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.

During the 12first quarter and ~~28-week periods ended July 15, 2017,~~the prior year quarter, the Company recognized net periodic pension income ~~of $0.2 million and $0.3 million, respectively, related to the SpartanNash Company Pension Plan and net postretirement benefit costs~~ of $0.1 million and $0.2 million, respectively, related to the SpartanNash Company Pension Plan (“Pension Plan” or “Plan”) and net postretirement benefit costs of $0.1 million in both periods related to the SpartanNash Retiree Medical Plan. Substantially all of these amounts are included in Other, net in the Condensed Consolidated Statements of Earnings.

On February 28, 2018, the Company’s Board of Directors granted approval to proceed with terminating the frozen Pension Plan. The Company will offer participants the option to receive an annuity or lump sum distribution which may be rolled over into another qualified plan, and subsequently terminate the Pension Plan. The termination process is expected to take 12 to 24 months. In connection with the termination of the Plan, the Company expects to incur a one-time, pre-tax settlement charge of approximately $22 million to recognize the deferred losses in AOCI upon distribution of the Plan assets and related recognition of the settlement. The Company also expects to reduce administrative fees and premium funding costs as a result of the Plan termination.

The Company did not make any contributions to the SpartanNash Company Pension Plan during the ~~28 weeks ended July 15, 2017.~~first quarter of 2018. Although no contributions are required, the Company expects to contribute approximately $2.0 to $3.0 million to the Pension Plan in 2018 to fund the plan termination liability. The Company ~~does not expect, and is not required,~~expects to make ~~any~~ contributions ~~for~~in 2018 of $0.4 million to the ~~remainder of the fiscal year ending December 30, 2017.~~Retiree Medical Plan.

The Company’s retirement programs also include defined contribution plans providing contributory benefits, as well as executive compensation plans for a select group of management personnel and/or highly compensated associates.

In addition to the plans listed above, the Company participates in the Central States Southeast and Southwest Pension Fund, ~~(EIN 7456500),~~ the Michigan Conference of Teamsters and Ohio Conference of Teamsters Health and Welfare plans (collectively referred to as “multi-employer plans”), and other company-sponsored defined contribution plans for most associates covered by collective bargaining agreements.

With respect to the Company’s participation in the Central States Plan, expense is recognized as contributions are funded. The Company’s contributions ~~for~~during the ~~28 weeks ended July 15, 2017~~first quarter and ~~July 16, 2016~~prior year quarter were ~~$7.8~~$4.5 million and ~~$7.5~~$4.4 million, respectively. See Note 87 for further information regarding the Company’s participation in the Central States Plan.

The effective income tax rate was ~~36.8%~~27.7% and ~~38.0%~~32.8% for the ~~12 weeks ended July 15, 2017~~first quarter and ~~July 16, 2016, respectively. For~~ the ~~28 weeks ended July 15, 2017 and July 16, 2016, the effective income tax rate was 35.2% and 37.9%,~~prior year quarter, respectively. The differences from the federal statutory ~~rate~~rates of 21% and 35% for the first quarter and the prior year quarter, respectively, are primarily due to state income taxes and stock-based compensation.

On December 22, 2017, the U.S. government enacted comprehensive tax ~~benefits related~~legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. In connection with initial analysis of the impact of the Tax Act, the Company recorded a provisional discrete income tax benefit of $26.0 million in the period ended December 30, 2017 associated with the re-measurement of deferred tax assets and liabilities as a result of the reduction in the U.S. federal corporate tax rate. The Company has not completed its accounting for the income tax effects of certain elements of the Tax Act, but recorded provisional adjustments based on reasonable estimates, which have not materially changed since December 30, 2017. Those estimates may be impacted by the need for further analysis and future clarification and guidance regarding available tax accounting methods and elections, state ~~taxes, stock-based compensation and~~tax conformity to federal tax ~~credits in the current year~~changes and ~~state taxes and federal tax credits in the prior year.~~expected changes to U.S. Treasury regulations. The Company ~~adopted ASU 2016-09~~anticipates these estimates will be finalized on ~~January 1, 2017, which requires tax benefits~~ or ~~deficiencies related to stock-based compensation to be reflected in~~before the ~~condensed consolidated statements of earnings as a component~~due date of the ~~provision for income taxes whereas they were previously recognized in equity. Total tax benefits related to stock-based compensation recognized in fiscal 2017 were $1.3 million.~~federal return, which is October 15, 2018.

The Company has a shareholder-approved stock incentive plan that provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, and other stock-based and stock-related awards to directors, officers and other key associates.

Stock-based compensation expense recognized and included in “Selling, general and administrative expenses” in the condensed consolidated statements of ~~earnings,~~operations, and related tax benefits were as follows:

	12 Weeks Ended						28 Weeks Ended
	July 15,			July 16,			July 15,			July 16,			16 Weeks Ended
(In thousands)	2017			2016			2017			2016			April 21, 2018			April 22, 2017
Restricted stock	$	1,139		$	1,043		$	7,491		$	6,067		$	5,290		$	6,352
Tax benefits		(427	)		(395	)		(2,810	)		(2,300	)		(698	)		(3,434	)
Stock-based compensation expense, net of tax	$	712		$	648		$	4,681		$	3,767		$	4,592		$	2,918

The following table summarizes activity in the stock-based compensation plans for the 2816 weeks ended ~~July 15, 2017:~~

									Weighted									Weighted
	Shares			Weighted		Restricted			Average		Shares		Weighted		Restricted			Average
	Under			Average		Stock			Grant-Date		Under		Average		Stock			Grant-Date
	Options			Exercise Price		Awards			Fair Value		Options		Exercise Price		Awards			Fair Value
Outstanding at December 31, 2016		200,517		$	19.94		660,143		$	26.48
Outstanding at December 30, 2017												47,928	$	16.52		613,744		$	30.32
Granted		—			—		292,205			34.82		—		—		472,456			16.96
Exercised/Vested		(152,589	)		21.02		(253,280	)		25.85		—		—		(251,595	)		28.80
Cancelled/Forfeited		—			—		(75,951	)		29.03		—		—		(4,691	)		25.99
Outstanding at July 15, 2017		47,928		$	16.52		623,117		$	30.34
Outstanding at April 21, 2018												47,928	$	16.52		829,914		$	23.20

The Company has not issued any stock options since 2009 and all outstanding options are vested and exercisable at ~~July 15, 2017.~~April 21, 2018.

As of ~~July 15, 2017,~~April 21, 2018, total unrecognized compensation costs related to non-vested stock-based awards granted under the Company’s stock incentive plans were ~~$6.3~~$6.6 million for restricted stock, and are expected to be recognized over a weighted average period of ~~2.3~~2.6 years. All compensation costs related to stock options have been recognized.

The following table sets forth the computation of basic and diluted earnings per share from continuing operations:

	12 Weeks Ended						28 Weeks Ended
	July 15,			July 16,			July 15,			July 16,			16 Weeks Ended
(In thousands, except per share amounts)	2017			2016			2017			2016			April 21, 2018			April 22, 2017
Numerator:
Earnings from continuing operations	$	21,060		$	17,560		$	36,125		$	27,520		$	12,435		$	15,065
Adjustment for earnings attributable to participating securities		(357	)		(314	)		(640	)		(492	)		(246	)		(276	)
Earnings from continuing operations used in calculating earnings per share	$	20,703		$	17,246		$	35,485		$	27,028		$	12,189		$	14,789
Denominator:
Weighted average shares outstanding, including participating securities		37,809			37,475			37,742			37,483			36,186			37,692
Adjustment for participating securities		(641	)		(670	)		(669	)		(670	)		(717	)		(690	)
Shares used in calculating basic earnings per share		37,168			36,805			37,073			36,813			35,469			37,002
Effect of dilutive stock options		22			71			45			59			11			64
Shares used in calculating diluted earnings per share		37,190			36,876			37,118			36,872			35,480			37,066
Basic earnings per share from continuing operations	$	0.56		$	0.47		$	0.96		$	0.73		$	0.34		$	0.40
Diluted earnings per share from continuing operations	$	0.56		$	0.47		$	0.96		$	0.73		$	0.34		$	0.40

	28 Weeks Ended
	July 15,		July 16,		16 Weeks Ended
(In thousands)	2017		2016		April 21, 2018		April 22, 2017
Non-cash financing activities:
Capital lease obligations	$	60	$	3,524
Recognition of capital lease obligations					$	281	$	60
Non-cash investing activities:
Capital expenditures included in accounts payable		609		2,133		3,581		685
Capital lease asset additions		60		3,524		281		60
Other supplemental cash flow information:
Cash paid for interest		12,224		8,648		8,571		6,636

The following tables set forth information about the Company by reporting segment:

(In thousands)	Food Distribution		Military		Retail		Total		Food Distribution		Military		Retail			Total
12 Weeks Ended July 15, 2017
16 Weeks Ended April 21, 2018
Net sales to external customers	$	941,636	$	471,077	$	481,996	$	1,894,709	$	1,155,211	$	663,620	$	566,242		$	2,385,073
Inter-segment sales		209,435		—		—		209,435		253,324		—		—			253,324
Merger/acquisition and integration		468		—		154		622		2,195		4		7			2,206
Restructuring charges and asset impairment										1,260		—		4,942			6,202
Depreciation and amortization										9,540		3,678		12,019			25,237
Operating earnings (loss)										24,521		1,513		(286	)		25,748
Capital expenditures										12,445		254		8,342			21,041

16 Weeks Ended April 22, 2017
Net sales to external customers									$	1,114,148	$	643,313	$	596,241		$	2,353,702
Inter-segment sales										280,926		—		—			280,926
Merger/acquisition and integration										3,847		—		170			4,017
Restructuring charges and asset impairment										599		—		422			1,021
Depreciation and amortization		6,073		2,607		9,584		18,264		8,944		3,439		13,039			25,422
Operating earnings		23,204		2,509		13,229		38,942		25,272		880		3,407			29,559
Capital expenditures		8,275		1,603		8,435		18,313		5,754		2,451		11,271			19,476

12 Weeks Ended July 16, 2016
Net sales to external customers	$	820,328	$	505,418	$	501,816	$	1,827,562
Inter-segment sales		220,146		—		—		220,146
Merger/acquisition and integration		93		—		820		913
Depreciation and amortization		4,827		2,682		10,126		17,635
Operating earnings		19,227		2,497		10,896		32,620
Capital expenditures		4,673		712		17,861		23,246

28 Weeks Ended July 15, 2017
Net sales to external customers	$	2,104,586	$	1,114,390	$	1,078,237	$	4,297,213
Inter-segment sales		476,763		—		—		476,763
Merger/acquisition and integration		4,315		—		323		4,638
Depreciation and amortization		15,016		6,046		22,624		43,686
Operating earnings		48,518		3,399		16,669		68,586
Capital expenditures		14,029		4,054		19,706		37,789

28 Weeks Ended July 16, 2016
Net sales to external customers	$	1,811,465	$	1,179,941	$	1,114,926	$	4,106,332
Inter-segment sales		497,149		—		—		497,149
Merger/acquisition and integration		561		1		1,248		1,810
Depreciation and amortization		11,297		6,157		23,550		41,004
Operating earnings		45,083		5,930		3,267		54,280
Capital expenditures		10,195		3,047		28,094		41,336

					April 21,		December 30,
(In thousands)	July 15, 2017		December 31, 2016		2018		2017
Total Assets
Food Distribution	$	1,071,156	$	776,725	$	1,125,465	$	1,085,621
Military		408,054		395,737		406,783		432,818
Retail		716,077		754,625		481,214		533,912
Discontinued operations		3,248		3,249		3,475		3,446
Total	$	2,198,535	$	1,930,336	$	2,016,937	$	2,055,797

The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel, and other items and services. The following table presents sales by type of similar products and services:

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q, the information contained under the caption “Forward-Looking Statements,” which appears at the beginning of this report, and the information in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016.~~30, 2017.

SpartanNash, headquartered in Grand Rapids, Michigan, is a leading multi-regional grocery distributor and grocery retailer whose core businesses include distributing grocery products to independent grocery retailers (“independent retailers”), select national retailers, its corporate owned retail stores, and military commissaries and exchanges in the United States. The Company operates three reportable business segments: Food Distribution, Military and Retail.

The Company’s Food Distribution segment provides a wide variety of nationally branded and private brand grocery products and perishable food products to ~~over 2,000~~approximately 2,100 independent retailers, ~~food distributors and~~ the Company’s corporate owned retail ~~stores.~~stores, food service distributors and other customers. The Food Distribution segment ~~currently~~primarily conducts business in ~~47 states, primarily in~~ the Midwest ~~Great Lakes,~~ and Southeast regions of the United States. Combined with the Military segment, the Company serves customers in all 50 states. Through its Food Distribution segment, the Company ~~also~~ services select national retailers, including Dollar General. Sales to Dollar General are made to ~~over 13,700~~approximately 14,800 of its retail locations. ~~Through its recent acquisition of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”) (“the recent acquisition”) on January 7, 2017, the~~The Company processes fresh-cut fruits and vegetables and other value-added meal solutions and supplies these products to grocery retailers and food service ~~distributors through its Indiana and Florida facilities. With~~distributors. Through the ~~new Caito~~ Fresh Kitchen facility, the Company ~~also has the ability to process, cook~~processes, cooks and ~~package~~packages fresh protein-based foods and complete meal solutions for a number of different customers. ~~With the acquisition of BRT, the Company offers temperature-controlled distribution and logistics services throughout North America.~~

The Company’s Military segment contracts with manufacturers to distribute a wide variety of grocery products primarily to military commissaries and exchanges located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Italy, Bahrain, Djibouti and Egypt. The Company has over 40 years of experience acting as a distributor to U.S. military commissaries and exchanges. ~~As of December 8, 2016, the~~The Company is the exclusive worldwide supplier of private brand products to U.S. military commissaries and ~~just recently began shipping~~is continuing to partner with DeCA in the rollout of private brand products to military commissaries which began during the second quarter of fiscal 2017.

AsAt the end of ~~July 15, 2017,~~the first quarter, the Company’s Retail segment operated ~~151~~142 corporate owned retail stores in the Midwest ~~and Great Lakes regions~~region primarily under the banners of Family Fare Supermarkets, VG’s Food and Pharmacy, D&W Fresh Markets, Sun Mart and Family Fresh Market. The Company also offers pharmacy services in 9085 of its corporate owned retail stores and operates 30 fuel centers. The retail stores have a “neighborhood market” focus to distinguish them from supercenters and limited assortment stores.

All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday.

In certain geographic areas, the Company’s sales and operating performance may vary with seasonality. Many stores are dependent on tourism and therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months. ~~The Company’s first quarter is typically its lowest sales quarter. Therefore, operating results are generally lower during this quarter.~~

The Company delivered both top-line and earnings growth in the second quarter of fiscal 2017 despite slower-than-anticipated contributions from the recent acquisition and challenging retail market conditions. Growth from new and existing customers in Food Distribution and ongoing supply chain improvements helped offset Fresh Kitchen start-up and acquisition integration costs, as well as the negative impact of lower sales at Military and Retail. During the quarter, the Company continued to integrate the operations of its recent acquisition, refine and expand production at its Fresh Kitchen facility, and invest in personalized marketing initiatives and other channels to provide its retail customers with improved convenience and a better overall shopping experience. The Company also began shipping DeCA private brand products to U.S. military commissaries during the quarter.

As the Company moves into the second half of the year, it remains committed to top-line and earnings growth as well as continued focus on delivering long-term value to its shareholders. At the beginning of the third quarter, the Company entered into an agreement to obtain all of the commissary distribution business from a DeCA provider exiting these operations in the Southwest. The recently secured new business, together with increasing contributions from the DeCA private brand program, are expected to return Military’s sales and earnings to positive in the second half of the fiscal year. The Company anticipates third quarter earnings to be flat to slightly ahead of the prior year as continued strong performance in its distribution operations will be partially offset by delayed contributions from the recent acquisition and a challenging marketplace for Retail.

~~On the acquisition front, the Company~~ continues to see progress integrating operations, has begun limited production at the Fresh Kitchen facility, and remains confident about the ultimate growth potential and long-term vision for this business and its ready-to-eat categories. The performance ofpositive results from these operations, however, is currently not anticipated to meet original expectations for the current fiscal year but is projected to be accretive in fiscal 2018. To address the challenging retail landscape, the Company is continuing to invest in its store base, personalized marketing initiatives, customer convenience and experience through efforts such as Fast Lane and meal solutions, and the launch of its ~~Our Family~~® brand into the Michigan region. The Company continues to expect an easing of deflationary pressures with modest food inflation anticipated in the second half of the year. Accordingly, and depending on the variability associated with inflation by commodity and its related impact on LIFO, the Company does not expect the deflation-related LIFO benefit of $0.07 per diluted share realized in the prior year to repeat in the fourth quarter of fiscal 2017.investments.

The following table sets forth items from the ~~condensed~~ consolidated statements of ~~earnings~~operations as a percentage of net sales and the year-to-year percentage change in the dollar amounts:

Percentage of Net Sales

Percentage Change

12 Weeks

12 Weeks Ended

28 Weeks Ended

Ended

July 15,

July 16,

July 15,

July 16,

July 15,

2017

2016

2017

2016

2017

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

3.7

Gross profit

14.3

14.4

14.6

14.5

3.2

Selling, general and administrative expenses

12.2

12.3

*

12.9

12.7

3.6

Merger/acquisition and integration

0.0

0.0

0.1

0.0

(31.9
)
Restructuring charges and asset impairment

(0.0
)

0.3

0.0

0.5

(100.2
)
Operating earnings

2.1

1.8

1.6

1.3

19.4

Other income and expenses

0.3

0.3

*

0.3

0.2

30.1

Earnings before income taxes and discontinued operations

1.8

1.5

1.3

1.1

17.8

Income taxes

0.7

*

0.5

*

0.5

0.4

14.2

Earnings from continuing operations

1.1

1.0

0.8

0.7

19.9

Loss from discontinued operations, net of taxes

(0.0
)

(0.0
)

(0.0
)

(0.0
)

(59.2
)
Net earnings

1.1

%

1.0

%

0.8

%

0.7

%

20.3

Net Sales – The following table presents net sales by segment and variances in net sales:

	12 Weeks Ended							28 Weeks Ended
	July 15,		July 16,					July 15,		July 16,					16 Weeks Ended
(In thousands)	2017		2016		Variance			2017		2016		Variance			April 21, 2018		April 22, 2017		Variance
Food Distribution	$	941,636	$	820,328	$	121,308		$	2,104,586	$	1,811,465	$	293,121		$	1,155,211	$	1,114,148	$	41,063
Military		471,077		505,418		(34,341	)		1,114,390		1,179,941		(65,551	)		663,620		643,313		20,307
Retail		481,996		501,816		(19,820	)		1,078,237		1,114,926		(36,689	)		566,242		596,241		(29,999	)
Total net sales	$	1,894,709	$	1,827,562	$	67,147		$	4,297,213	$	4,106,332	$	190,881		$	2,385,073	$	2,353,702	$	31,371

Net sales for the first quarter ~~ended July 15, 2017 (“second quarter”)~~ increased ~~$67.1~~$31.4 million, or ~~3.7%~~1.3%, to ~~$1.89~~$2.39 billion from ~~$1.83~~$2.35 billion in the ~~quarter ended July 16, 2016 (“~~prior year quarter”). Net sales for the year-to-date period ended July 15, 2017 (“year-to-date period”) increased $190.9 million, or 4.6%, to $4.30 billion from $4.11 billion in the year-to-date period ended July 16, 2016 (“prior year-to-date period”).quarter. The increase was driven primarily by ~~contributions from the recent acquisition and~~ organic growth from ~~new and~~ existing customers in the Food Distribution segment and new business in the Military segment, which more than offset lower sales in the ~~Military and~~ Retail ~~segments.~~segment.

Food Distribution net sales, after intercompany eliminations, increased ~~$121.3~~$41.1 million, or ~~14.8%~~3.7%, to ~~$941.6~~$1,155.2 million in the ~~second~~first quarter from ~~$820.3~~$1,114.1 million in the prior year quarter. ~~Net sales for the year-to-date period increased $293.1 million, or 16.2%, from $1.81 billion in the prior year-to-date period to $2.1 billion.~~ The ~~second quarter and year-to-date increases were~~increase was due to ~~contributions from the recent acquisition and organic volume~~sales growth from ~~new and~~ existing customers.

Military net sales ~~decreased $34.3~~increased $20.3 million, or ~~6.8%~~3.2%, to ~~$471.1~~$663.6 million in the ~~second~~first quarter from ~~$505.4~~$643.3 million in the prior year quarter. ~~Net sales for the year-to-date period decreased $65.6 million, or 5.6%, from $1.18 billion in the prior year-to-date period to $1.11 billion.~~ The ~~second quarter and year-to-date decreases were~~increase was primarily due to new commissary business in the Southwest and incremental volume from the private brand program, partially offset by lower comparable sales at the DeCA operated commissaries.

Retail net sales decreased ~~$19.8~~$30.0 million, or ~~3.9%~~5.0%, to ~~$482.0~~$566.2 million in the ~~second~~first quarter from ~~$501.8~~$596.2 million in the prior year quarter. ~~Net sales for the year-to-date period decreased $36.7 million, or 3.3%, from $1.1 billion in the prior year-to-date period to $1.1 billion.~~ The decrease in net sales was primarily attributable to lower sales resulting from the closures and sales of retail stores ~~($11.6~~of $21.3 million ~~for the quarter and $24.8 million year-to-date)~~ and negative comparable store sales. Comparable store sales, excluding fuel, decreased 2.2%. These decreases were ~~-1.8 percent for~~partially offset by higher fuel prices compared to the ~~quarter and -2.0 percent for the year-to-date period, and reflect continued strong competition within the industry.~~prior year quarter. The Company defines a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), regardless of remodels, expansions or relocated stores. ~~The~~Please note that the Company’s definition of comparable store sales may differ from similarly titled measures at other companies.

Gross Profit – Gross profit represents net sales less cost of sales, which for all non-production operations includes ~~product~~ purchase costs, in-bound freight, physical inventory adjustments, markdowns and promotional allowances and excludes warehousing costs, depreciation and other administrative expenses. For the Company’s food processing operations, cost of sales includes direct product and production costs, inbound freight, purchasing and receiving costs, utilities, depreciation, and other indirect production costs and excludes out-bound freight and other administrative expenses. The Company’s gross profit may not be identical to similarly titled measures reported by other companies. Vendor allowances that relate to the buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for the Company’s merchandising costs, such as setting up warehouse infrastructure. Vendor allowances ~~associated with product cost~~ are recognized as a reduction in cost of sales when the product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The distribution segments include shipping and handling costs in the Selling, general and administrative section of operating expenses in the consolidated statements of earnings.

Gross profit ~~increased~~decreased to ~~$271.0~~$343.2 million in the ~~second~~first quarter from ~~$262.7~~$357.4 million in the prior year quarter. As a percent of net sales, gross profit was ~~14.3%~~14.4% compared to ~~14.4%~~15.2% in the prior year quarter. Gross profit for the year-to-date period increased $31.5 million, or 5.3%, from $596.9 million in the prior year-to-date period to $628.4 million. As a percent of net sales, gross profit for the year-to-date period was 14.6% compared to 14.5% in the prior year-to-date period. As a percent of net sales, the ~~second quarter and year-to-date changes~~decrease in gross ~~margin were~~profit was primarily due to the ~~recent acquisition~~timing of certain supplier programs and the increased mix of ~~business operations.~~Food Distribution and Military sales as a percentage of total sales combined with margin investments within certain Retail segment categories.

Selling, General and Administrative Expenses – Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and wages, employee benefits, warehousing costs, store occupancy costs, shipping and handling, utilities, equipment rental, depreciation (to the extent not included in Cost of sales), out-bound freight and other administrative expenses.

SG&A expenses ~~increased $8.1~~decreased $13.7 million, or ~~3.6%~~4.3%, to ~~$231.5~~$309.1 million in the ~~second~~first quarter from ~~$223.4~~$322.8 million in the prior year quarter, representing ~~12.2% percent~~13.0% of net sales in the ~~second~~first quarter compared to ~~12.3%~~13.7% in the prior year quarter. SG&A expenses for the year-to-date period increased $34.4 million, or 6.6%, from $519.8 million in the prior year-to-date period to $554.2 million, and increased to 12.9% as a percentage of net sales compared to 12.7% in the prior year-to-date period. The ~~second~~first quarter ~~and year-to-date increases~~decrease in expense ~~and~~as well as the rate to sales ~~were~~decrease was primarily due to the ~~addition~~mix of ~~the recent acquisition, partly offset by supply chain improvements~~business operations and lower healthcare and incentive compensation expenses.

Merger/Acquisition and Integration – ~~Second~~First quarter and ~~year-to-date period~~prior year quarter results included ~~$0.6~~$2.2 million and ~~$4.6~~$4.0 million, respectively, of merger/acquisition and integration expenses mainly associated with the ~~recent acquisition. Prior year quarter and year-to-date results included $0.9 million and $1.8 million, respectively, of merger/acquisition and integration primarily associated with the~~ merger of Spartan Stores, Inc. and Nash-Finch ~~Company.~~Company and the acquisition of Caito and BRT.

Restructuring Charges and Asset Impairment –~~Year-to-date period~~ First quarter results and prior quarter results included $6.2 million and $1.0 million, respectively, of ~~net~~ restructuring and asset impairment charges ~~which were incurred in the first quarter,~~ primarily associated with the Company’s retail store ~~and~~rationalization program in both periods, with the prior year quarter results also including warehouse rationalization plans, partially offset by a favorable lease terminations. Prior year quarter results and year-to-date included $5.7 million and $21.1 million, respectively, of restructuring and asset impairment charges. Prior quarter restructuring charges and asset impairment consisted primarily of impairment charges related to three underperforming retail stores and additional costs, predominantly labor and inventory transfer costs, incurred in connection with winding down operations at certain closed facilities in the Food Distribution and Retail segments. Prior year-to-date period restructuring charges and asset impairment consisted primarily of charges related to the closure of three retail stores and two food distribution centers, which were part of the Company’s retail store and warehouse rationalization plan, as well as impairment charges related to three underperforming retail stores.termination.

Operating Earnings –The following table presents operating (loss) earnings by segment and variances in operating earnings:

	12 Weeks Ended						28 Weeks Ended
	July 15,		July 16,				July 15,		July 16,					16 Weeks Ended
(In thousands)	2017		2016		Variance		2017		2016		Variance			April 21, 2018			April 22, 2017		Variance
Food Distribution	$	23,204	$	19,227	$	3,977	$	48,518	$	45,083	$	3,435		$	24,521		$	25,272	$	(751	)
Military		2,509		2,497		12		3,399		5,930		(2,531	)		1,513			880		633
Retail		13,229		10,896		2,333		16,669		3,267		13,402			(286	)		3,407		(3,693	)
Total operating earnings	$	38,942	$	32,620	$	6,322	$	68,586	$	54,280	$	14,306		$	25,748		$	29,559	$	(3,811	)

Operating earnings ~~increased $6.3~~decreased $3.8 million ~~or 19.4%,~~ to ~~$38.9~~$25.7 million in the ~~second~~first quarter from ~~$32.6~~$29.6 million in the prior year quarter. ~~Operating earnings for the year-to-date period increased $14.3 million, or 26.4%, to $68.6 million from $54.3 million in the prior year-to-date period.~~ The ~~second~~first quarter ~~increase~~decrease was primarily due to ~~lower~~ restructuring and asset impairment ~~charges, lower warehousing~~costs, the Company’s investments in margin, particularly in the Retail segment, and a change in vendor rebate timing and higher transportation costs, which more than offset the decrease in healthcare and incentive compensation ~~costs and~~expenses, organic sales growth in Food Distribution ~~which more than offset start-up costs associated with the~~and new ~~Fresh Kitchen operation and the negative impact of lower sales~~business in the Military and Retail segments. The year-to-date increase was primarily due to lower restructuring and asset impairment charges as well as organic sales growth in Food Distribution, which more than offset higher merger/acquisition and integration expenses and start-up costs associated with the recent acquisition, the negative impact of lower sales in the Military and Retail segments and the shift of New Year’s Day into the first quarter.Military.

Food Distribution operating earnings ~~increased $4.0~~decreased $0.8 million, or ~~20.7%~~3.0%, to ~~$23.2~~$24.5 million in the ~~second~~first quarter from ~~$19.2~~$25.3 million in the prior year quarter. ~~Operating earnings for the year-to-date period increased $3.4 million, or 7.6%, to $48.5 million from $45.1 million in the prior year-to-date period.~~ The ~~increases~~decrease for the quarter ~~and year-to-date period were~~was driven by ~~organic sales growth~~the change in timing of certain supplier programs and ~~benefits associated with continued supply chain improvements,~~higher transportation costs, partially offset by ~~charges related to~~lower merger/acquisition and integration expenses, ~~Fresh Kitchen start-up costs,~~improvement in Caito operations and ~~restructuring charges related to the Company’s warehouse optimization plan.~~lower incentive compensation.

Military operating earnings ~~were $2.5 million in both the second quarter and prior year quarter. Operating earnings for the year-to-date period decreased $2.5~~increased $0.6 million, or ~~42.7%~~71.9%, to ~~$3.4~~$1.5 million from $5.9 million in the prior year-to-date period. The second quarter was comparable to the prior year as margin rate improvements and lower health care and incentive compensation expenses offset the impact of lower sales. The year-to-date decrease in operating earnings was primarily due to lower sales volume, the negative impact of the shift of New Year’s Day into the first quarter, and higher costs in the first quarter for health care and a large insurance claim.

~~Retail operating earnings increased $2.3 million to $13.2 million in the second quarter from $10.9~~$0.9 million in the prior year quarter. ~~Operating~~The first quarter increase was due to margin improvements and lower healthcare costs, partially offset by continued transportation cost challenges.

Retail operating earnings ~~for~~decreased $3.7 million to a loss of $0.3 million in the ~~year-to-date period increased $13.4 million, or 410%, to $16.7 million~~first quarter from ~~$3.3~~earnings of $3.4 million in the prior ~~year-to-date period.~~year quarter. The ~~second~~first quarter ~~increase~~decrease was primarily due to lower comparable store sales, investments in margin and higher restructuring ~~and impairment~~ charges in connection with store closures compared to the prior year quarter. These amounts were partially offset by ~~the impact of~~ lower ~~sales and the incremental margin investment in fresh departments. The year-to-date increase was primarily due to lower restructuring and impairment charges, improved margin rates~~healthcare costs and the closure of ~~unprofitable stores, partially offset by higher health care costs, lower comparable store sales and the shift of New Year’s Day.~~underperforming stores.

Interest Expense – Interest expense increased ~~$1.3~~$1.5 million, or ~~28.1%~~20.0%, to ~~$5.7~~$8.8 million in the ~~second~~first quarter from ~~$4.4~~$7.3 million in the prior year quarter. ~~Interest expense for the year-to-date period increased $2.7 million, or 26.7%, from $10.3 million in the prior year-to-date period to $13.0 million.~~ The increase in interest expense was primarily due to increased average borrowings ~~related to~~during the ~~recent acquisition.~~period.

Income Taxes – The effective income tax rates were ~~36.8%~~27.7% and ~~38.0%~~32.8% for the ~~second~~first quarter and prior year quarter, ~~respectively. For the year-to-date period and prior year-to-date period, the effective income tax rates were 35.2% and 37.9%,~~ respectively. The differences from the federal statutory ~~rate~~rates of 21% and 35% for the first quarter and the prior year quarter, respectively, are primarily due to state ~~taxes, tax benefits related to stock-based compensation and federal tax credits in the current year and state~~income taxes and ~~federal tax credits in the prior year.~~stock-based compensation. The ~~Company’s effective tax rate decreased due to the~~impact of stock-based compensation benefits ~~recognized resulting from the adoption of ASU 2016-09. The tax impacts of stock-based compensation~~or expenses are primarily generated in the first quarter due to the timing of awards and vesting schedules.

In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding adjusted operating earnings, adjusted earnings from continuing operations, and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude start-up costs associated with the new Fresh Kitchen operation ~~as well as an executive retirement stock compensation award.~~through the start-up period, which concluded during the first quarter. The Fresh Kitchen is a newly constructed facility that provides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. Given the Fresh Kitchen represents a new line of business for the Company, ~~in a fast growth category,~~ the start-up activities associated with testing, training, and preparing the Fresh Kitchen for production, as well as incorporating the related operations into the business, are considered “non-operational” or “non-core” in nature. The retirement stock compensation award represents incremental compensation expense in connection with an executive retirement that is also considered “non-operational” or “non-core” in nature.

Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted operating earnings provide a meaningful representation of its operating performance for the Company as a whole and for its operating segments. The Company considers adjusted operating earnings as an additional way to measure operating performance on an ongoing basis. Adjusted operating earnings is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted operating earnings and adjusted operating earnings by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted operating earnings format.

Adjusted operating earnings is not a measure of performance under accounting principles generally accepted in the United States of America (“GAAP”), and should not be considered as a substitute for operating earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies.

23The retrospective adoption of ASU 2017-07 resulted in an immaterial decrease in operating earnings for the 16 weeks ended April 22, 2017 from the amount previously reported.

Following is a reconciliation of operating earnings to adjusted operating ~~earnings for the 12 weeks and 28 weeks ended July 15, 2017 and July 16, 2016.~~

	12 Weeks Ended						28 Weeks Ended
	July 15,			July 16,			July 15,		July 16,			16 Weeks Ended
(In thousands)	2017			2016			2017		2016			April 21, 2018			April 22, 2017
Operating earnings	$	38,942		$	32,620		$	68,586	$	54,280		$	25,748		$	29,559
Adjustments:
Merger/acquisition and integration		622			913			4,638		1,810			2,206			4,017
Restructuring (gains) charges and asset impairment		(14	)		5,748			1,008		21,052
Restructuring charges and asset impairment													6,202			1,021
Fresh Kitchen start-up costs		1,854			—			4,602		—			1,366			2,748
Stock compensation associated with executive retirement		—			—			1,172					—			1,172
Severance associated with cost reduction initiatives		21			11			24		690			274			3
Adjusted operating earnings	$	41,425		$	39,292		$	80,030	$	77,832		$	35,796		$	38,520
Reconciliation of operating earnings to adjusted operating earnings by segment:	Reconciliation of operating earnings to adjusted operating earnings by segment:											Reconciliation of operating earnings to adjusted operating earnings by segment:
Food Distribution:
Operating earnings	$	23,204		$	19,227		$	48,518	$	45,083		$	24,521		$	25,272
Adjustments:
Merger/acquisition and integration		468			93			4,315		561			2,195			3,847
Restructuring charges and asset impairment		301			2,308			901		4,541			1,260			599
Fresh Kitchen start-up costs		1,854			—			4,602		—			1,366			2,748
Stock compensation associated with executive retirement		—			—			591					—			591
Severance associated with cost reduction initiatives		21			—			22		206			193			1
Adjusted operating earnings	$	25,848		$	21,628		$	58,949	$	50,391		$	29,535		$	33,058
Military:
Operating earnings	$	2,509		$	2,497		$	3,399	$	5,930		$	1,513		$	880
Adjustments:
Merger/acquisition and integration		—			—			—		1			4			—
Restructuring gains		—			(291	)		—		(259	)
Stock compensation associated with executive retirement		—			—			147		—			—			147
Severance associated with cost reduction initiatives		—			1			1		223			52			1
Adjusted operating earnings	$	2,509		$	2,207		$	3,547	$	5,895		$	1,569		$	1,028
Retail:
Operating earnings	$	13,229		$	10,896		$	16,669	$	3,267
Operating (loss) earnings												$	(286	)	$	3,407
Adjustments:
Merger/acquisition and integration		154			820			323		1,248			7			170
Restructuring (gains) charges and asset impairment		(315	)		3,731			107		16,770
Restructuring charges and asset impairment													4,942			422
Stock compensation associated with executive retirement		—			—			434		—			—			434
Severance associated with cost reduction initiatives		—			10			1		261			29			1
Adjusted operating earnings	$	13,068		$	15,457		$	17,534	$	21,546		$	4,692		$	4,434

Adjusted earnings from continuing operations is a non-GAAP operating financial measure that the Company defines as earnings from continuing operations plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted earnings from continuing operations provide a meaningful representation of its operating performance for the Company. The Company considers adjusted earnings from continuing operations as an additional way to measure operating performance on an ongoing basis. Adjusted earnings from continuing operations is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted earnings from continuing operations is a performance measure that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted earnings from continuing operations format.

Adjusted earnings from continuing operations is not a measure of performance under accounting principles generally accepted in the United States of America, and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of earnings from continuing operations to adjusted earnings from continuing ~~operations~~operations:

	16 Weeks Ended
	April 21, 2018					April 22, 2017
				per diluted					per diluted
(In thousands, except per share amounts)	Earnings			share		Earnings			share
Earnings from continuing operations	$	12,435		$	0.34	$	15,065		$	0.40
Adjustments:
Merger/acquisition and integration		2,206					4,017
Restructuring charges and asset impairment		6,202					1,021
Fresh Kitchen start-up costs		1,366					2,748
Stock compensation associated with executive retirement		—					1,172
Severance associated with cost reduction initiatives		274					3
Total adjustments		10,048					8,961
Income tax effect on adjustments (a)		(2,437	)				(3,362	)
Total adjustments, net of taxes		7,611			0.21		5,599			0.15
Adjusted earnings from continuing operations	$	20,046		$	0.55	$	20,664		$	0.55

(a) The income tax effect on adjustments is computed by applying the tax rate, before discrete tax items, to the total adjustments for the ~~12 weeks and 28 weeks ended July 15, 2017 and July 16, 2016.~~period.

12 Weeks Ended

July 15, 2017

July 16, 2016

per diluted

per diluted

(In thousands, except per share amounts)
Earnings

share

Earnings

share

Earnings from continuing operations
$

21,060

$

0.56

$

17,560

$

0.47

Adjustments:

Merger/acquisition and integration

622

913

Restructuring (gains) charges and asset impairment

(14
)

5,748

Fresh Kitchen start-up costs

1,854

—

Severance associated with cost reduction initiatives

21

11

Total adjustments

2,483

6,672

Income tax effect on adjustments (a)

(932
)

(2,525
)

Total adjustments, net of taxes

1,551

0.04

4,147

0.11

Adjusted earnings from continuing operations
$

22,611

$

0.60

$

21,707

$

0.58

28 Weeks Ended

July 15, 2017

July 16, 2016

per diluted

per diluted

(In thousands, except per share amounts)
Earnings

share

Earnings

share

Earnings from continuing operations
$

36,125

$

0.96

$

27,520

$

0.73

Adjustments:

Merger integration and acquisition expenses

4,638

1,810

Restructuring charges and asset impairment

1,008

21,052

Fresh Kitchen start-up costs

4,602

—

Severance associated with cost reduction initiatives

24

690

Stock compensation associated with executive retirement

1,172

—

Total adjustments

11,444

23,552

Income tax effect on adjustments (a)

(4,295
)

(8,953
)

Total adjustments, net of taxes

7,149

0.19

14,599

0.39

Adjusted earnings from continuing operations
$

43,274

$

1.15

$

42,119

$

1.12

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”) is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including deferred (stock) compensation, the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted EBITDA provides a meaningful representation of its operating performance for the Company as a whole and for its operating segments. The Company considers adjusted EBITDA as an additional way to measure operating performance on an ongoing basis. Adjusted EBITDA is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted EBITDA and adjusted EBITDA by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted EBITDA format.

Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under accounting principles generally accepted in the United States of America, and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies.

26The retrospective adoption of ASU 2017-07 resulted in an immaterial decrease in net earnings for the 16 weeks ended April 22, 2017 from the amount previously reported.

Following is a reconciliation of net earnings to adjusted ~~EBITDA for the 12 weeks and 28 weeks ended July 15, 2017 and July 16, 2016.~~EBITDA:

	12 Weeks Ended						28 Weeks Ended
	July 15,			July 16,			July 15,			July 16,			16 Weeks Ended
(In thousands)	2017			2016			2017			2016			April 21, 2018			April 22, 2017
Net earnings	$	21,029		$	17,484		$	36,054		$	27,335		$	12,343		$	15,025
Loss from discontinued operations, net of tax		31			76			71			185			92			40
Income taxes		12,267			10,743			19,636			16,770
Income tax expense														4,760			7,369
Other expenses, net		5,615			4,317			12,825			9,990			8,553			7,125
Operating earnings		38,942			32,620			68,586			54,280			25,748			29,559
Adjustments:
LIFO expense		692			1,059			2,282			2,471			1,540			1,590
Depreciation and amortization		19,018			17,635			44,099			41,004			25,018			25,080
Merger/acquisition and integration		622			913			4,638			1,810			2,206			4,017
Restructuring (gains) charges and asset impairment		(14	)		5,748			1,008			21,052
Fresh Kitchen start-up costs		1,854			—			4,602			—
Restructuring charges and goodwill/asset impairment														6,202			1,021
Fresh Kitchen start-up costs⁽¹⁾														1,366			2,748
Stock-based compensation		1,139			1,043			7,491			6,067			5,290			6,352
Other non-cash (gains) charges		(300	)		(295	)		(523	)		76
Other non-cash gains														(199	)		(222	)
Adjusted EBITDA	$	61,953		$	58,723		$	132,183		$	126,760		$	67,171		$	70,145
Reconciliation of operating earnings to adjusted EBITDA by segment:
Reconciliation of operating earnings (loss) to adjusted EBITDA by segment:													Reconciliation of operating earnings (loss) to adjusted EBITDA by segment:
Food Distribution:
Operating earnings	$	23,204		$	19,227		$	48,518		$	45,083		$	24,521		$	25,272
Adjustments:
LIFO expense		380			551			1,263			1,288			766			883
Depreciation and amortization		6,827			4,827			15,429			11,297			9,321			8,602
Merger/acquisition and integration		468			93			4,315			561			2,195			3,847
Restructuring charges and asset impairment		301			2,308			901			4,541			1,260			599
Fresh Kitchen start-up costs		1,854			—			4,602			—			1,366			2,748
Stock-based compensation		551			369			3,511			2,681			2,526			2,961
Other non-cash (gains) charges		(1	)		25			46			201
Other non-cash charges														215			46
Adjusted EBITDA	$	33,584		$	27,400		$	78,585		$	65,652		$	42,170		$	44,958
Military:
Operating earnings	$	2,509		$	2,497		$	3,399		$	5,930		$	1,513		$	880
Adjustments:
LIFO expense		84			234			392			545			424			308
Depreciation and amortization		2,607			2,682			6,046			6,157			3,678			3,439
Merger/acquisition and integration		—			—			—			1			4			—
Restructuring gains		—			(291	)		—			(259	)
Stock-based compensation		165			226			1,127			1,007			805			962
Other non-cash (gains) charges		(14	)		(5	)		(16	)		203
Other non-cash gains														(71	)		(2	)
Adjusted EBITDA	$	5,351		$	5,343		$	10,948		$	13,584		$	6,353		$	5,587
Retail:
Operating earnings	$	13,229		$	10,896		$	16,669		$	3,267
Operating (loss) earnings													$	(286	)	$	3,407
Adjustments:
LIFO expense		228			274			627			638			350			399
Depreciation and amortization		9,584			10,126			22,624			23,550			12,019			13,039
Merger/acquisition and integration		154			820			323			1,248			7			170
Restructuring charges and asset impairment		(315	)		3,731			107			16,770
Restructuring charges and goodwill/asset impairment														4,942			422
Stock-based compensation		423			448			2,853			2,379			1,959			2,429
Other non-cash gains		(285	)		(315	)		(553	)		(328	)		(343	)		(266	)
Adjusted EBITDA	$	23,018		$	25,980		$	42,650		$	47,524		$	18,648		$	19,600

The following table summarizes the Company’s consolidated statements of cash flows:

28 Weeks Ended

July 15,

July 16,

(In thousands)

2017

2016

Cash flow activities

Net cash provided by operating activities (a)

$

38,357

$

57,182

Net cash used in investing activities

(247,801
)

(35,528
)
Net cash provided by (used in) financing activities (a)

207,796

(20,276
)
Net cash provided by (used in) discontinued operations

23

(281
)
Net (decrease) increase in cash and cash equivalents

(1,625
)

1,097

Cash and cash equivalents at beginning of fiscal year

24,351

22,719

Cash and cash equivalents at end of fiscal year

$

22,726

$

23,816

	16 Weeks Ended
(In thousands)	April 21, 2018			April 22, 2017
Cash flow activities
Net cash provided by (used in) operating activities	$	60,381		$	(10,291	)
Net cash used in investing activities		(20,933	)		(232,893	)
Net cash (used in) provided by financing activities		(37,863	)		238,297
Net cash (used in) provided by discontinued operations		(85	)		52
Net increase (decrease) in cash and cash equivalents		1,500			(4,835	)
Cash and cash equivalents at beginning of the period		15,667			24,351
Cash and cash equivalents at end of the period	$	17,167		$	19,516

~~(a)~~ Prior period amounts have been adjusted for the impact of the adoption of ASU 2016-09. Refer to Note 2 of the notes to condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for further information.

Net cash provided by (used in) operating activities. Net cash provided by operating activities ~~decreased~~increased during the current year-to-date period from the prior year-to-date period by approximately ~~$18.8~~$70.7 million ~~was~~ mainly due to the timing of working capital requirements, particularly changes in ~~working capital, particularly higher~~ accounts receivable and inventory balances ~~at Military as certain customers were addressing system conversion issues~~associated with sales to new and ~~payments were temporarily delayed..~~existing distribution customers.

Net cash used in investing activities. Net cash used in investing activities ~~increased $212.3~~decreased $212.0 million in the current year compared to the prior year primarily due to the ~~recent~~ acquisition ~~(see Note 3 to~~made in the ~~condensed consolidated financial statements).~~prior year.

The Food Distribution, Military and Retail segments utilized ~~45.2%~~59.1%, ~~8.8%~~1.2% and ~~46.0%~~39.6% of capital expenditures, respectively, in the current year.

Net cash (used in) provided by ~~(used in)~~ financing activities. Net cash ~~provided by~~used in financing activities increased ~~$228.1~~$276.2 million in the current year compared to the prior year primarily due to borrowings on the revolving credit facility in the prior year to fund the ~~recent acquisition.~~acquisition and working capital.

Net cash (used in) provided by ~~(used in)~~ discontinued operations. Net cash ~~provided by (used in)~~used in discontinued operations contains the net cash flows of the Company’s Retail and Food Distribution discontinued operations and is primarily composed of facility maintenance expenditures.

Total debt, including capital lease obligations and current maturities, was ~~$660.3~~$741.0 million and ~~$431.1~~$750.0 million as of ~~July 15, 2017~~April 21, 2018 and December ~~31, 2016,~~30, 2017, respectively. The ~~increase~~decrease in total debt was driven by ~~drawdowns on~~principal payments in the ~~credit facility~~current quarter due to ~~finance the recent acquisition.~~an increase in cash provided by operations.

The Company’s principal sources of liquidity are cash flows generated from operations and its senior secured credit facility which has maximum available credit of $1.0 billion. As of ~~July 15, 2017,~~April 21, 2018, the senior secured revolving credit facility ~~and senior secured term loan collectively~~ had outstanding borrowings of ~~$618.7~~$700.1 million. Additional available borrowings under the Company’s $1.0 billion credit facility are based on stipulated advance rates on eligible assets, as defined in the Credit Agreement. The Credit Agreement requires that the Company maintain excess availability of 10% of the borrowing base, as such term is defined in the Credit Agreement. The Company had excess availability after the 10% covenant of ~~$320.6~~$135.2 million at ~~July 15, 2017.~~April 21, 2018. Payment of dividends and repurchases of outstanding shares are permitted, provided that certain levels of excess availability are maintained. The credit facility provides for the issuance of letters of credit, of which ~~$9.2~~$10.3 million were outstanding as of ~~July 15, 2017.~~April 21, 2018. The revolving credit facility matures December 2021, and is secured by substantially all of the Company’s assets.

The Company believes that cash generated from operating activities and available borrowings under the credit facility will be sufficient to meet anticipated requirements for working capital, capital expenditures, dividend payments, and debt service obligations for the foreseeable future. However, there can be no assurance that the business will continue to generate cash flow at or above current levels or that the Company will maintain its ability to borrow under the credit facility.

The Company’s current ratio (current assets to current liabilities) was ~~1.87-to-1~~2.12-to-1 at ~~July 15, 2017~~April 21, 2018 compared to ~~1.77-to-1~~2.03-to-1 at December ~~31, 2016,~~30, 2017, and its investment in working capital was ~~$445.7~~$520.7 million at ~~July 15, 2017~~April 21, 2018 compared to ~~$387.5~~$509.7 million at December ~~31, 2016.~~30, 2017. Net debt to total capital ratio was ~~0.43-to-1~~0.50-to-1 at ~~July 15, 2017~~April 21, 2018 compared to ~~0.33-to-1~~0.50-to-1 at December ~~31, 2016.~~30, 2017.

Total net debt is a non-GAAP financial measure that is defined as long-term debt and capital lease obligations, plus current maturities of long-term debt and capital lease obligations, less cash and cash equivalents. The ratio of net debt to capital is a non-GAAP financial measure that is calculated by dividing net debt, as defined previously, by total capital (net debt plus total shareholders’ equity). The Company believes both management and its investors find the information useful because it reflects the amount of long-term debt obligations that are not covered by available cash and temporary investments. Total net debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Following is a reconciliation of long-term debt and capital lease obligations to total net long-term debt and capital lease obligations as of ~~July 15, 2017~~April 21, 2018 and December ~~31, 2016.~~

	July 15,			December 31,			April 21,			December 30,
	2017			2016
(In thousands)							2018			2017
Current maturities of long-term debt and capital lease obligations	$	19,001		$	17,424		$	7,628		$	9,196
Long-term debt and capital lease obligations		641,257			413,675			733,367			740,755
Total debt		660,258			431,099			740,995			749,951
Cash and cash equivalents		(22,726	)		(24,351	)		(17,167	)		(15,667	)
Total net long-term debt	$	637,532		$	406,748		$	723,828		$	734,284

For information on contractual obligations, see the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016.~~30, 2017. At ~~July 15, 2017,~~April 21, 2018, there have been no material changes to the Company’s significant contractual obligations outside the ordinary course of business.

During the year-to-date period ended ~~July 15, 2017,~~April 21, 2018, the Company returned ~~$20.4~~$26.5 million to shareholders from dividend payments and share repurchases. A ~~10.0%~~9.1% increase in the quarterly dividend rate from ~~$0.15~~$0.165 per share to ~~$0.165~~$0.18 per share was approved by the Board of Directors and announced on March ~~6, 2017.~~15, 2018. Although the Company expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors to declare future dividends. Each future dividend will be considered and declared by the Board of Directors at its discretion. Whether the Board of Directors continues to declare dividends depends on a number of factors, including the Company’s future financial condition, anticipated profitability and cash flows and compliance with the terms of its credit facilities.

Under the senior revolving credit facility, the Company is generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends, together with any cash distributions and share repurchases, do not exceed $25.0 million. Additionally, the Company is generally permitted to pay cash dividends in excess of $25.0 million in any fiscal year so long as its Excess Availability, as defined in the senior revolving credit facility, is in excess of 10% of the Total Borrowing Base, as defined in the senior revolving credit facility, before and after giving effect to the repurchases and dividends.

The Company has also made certain commercial commitments that extend beyond ~~July 15, 2017.~~April 21, 2018. These commitments consist primarily of operating leases and purchase commitments (as disclosed in the Company’s Annual Report on Form 10-K for the year ended December ~~31, 2016)~~30, 2017), standby letters of credit of ~~$9.2~~$10.3 million as of ~~July 15, 2017,~~April 21, 2018, and interest on long-term debt and capital lease obligations.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to bad debts, inventories, intangible assets, assets held for sale, long-lived assets, income taxes, self-insurance reserves, restructuring costs, retirement benefits, stock-based compensation, contingencies and litigation. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Based on the Company’s ongoing review, the Company makes adjustments it considers appropriate under the facts and circumstances. This discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements. The Company believes these accounting policies and others set forth in Item 8, Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016~~30, 2017 should be reviewed as they are integral to the understanding the Company’s financial condition and results of operations. The Company has discussed the development, selection and disclosure of these accounting policies with the Audit Committee of the Board of Directors. The accompanying financial statements are prepared using the same critical accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016.~~30, 2017.

Refer to Note 2 in the notes to the ~~condensed~~ consolidated financial statements for further information.

There have been no material changes in market risk of SpartanNash from the information provided in Part II, Item 7A, “Quantitative and Qualitative Disclosure About Market Risk,” of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2016.~~30, 2017.

An evaluation of the effectiveness of the design and operation of SpartanNash Company’s disclosure controls and procedures (as currently defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was performed as of ~~July 15, 2017~~April 21, 2018 (the “Evaluation Date”). This evaluation was performed under the supervision and with the participation of SpartanNash Company’s management, including its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Chief Accounting Officer (“CAO”). As of the Evaluation Date, SpartanNash Company’s management, including the CEO, CFO and CAO, concluded that SpartanNash’s disclosure controls and procedures were effective as of the Evaluation Date to ensure that material information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange Act of 1934 is accumulated and communicated to management, including its principal executive and principal financial officers as appropriate to allow for timely decisions regarding required disclosure. During the ~~second~~first quarter there was no change in SpartanNash’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, SpartanNash’s internal control over financial reporting.

The following table provides information regarding SpartanNash’s purchases of its own common stock during the 1216 week period ended ~~July 15, 2017. All employee transactions are under associate stock compensation plans.~~April 21, 2018. These may include: (1) shares of SpartanNash common stock delivered in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) shares submitted for cancellation to satisfy tax withholding obligations that occur upon the vesting of the restricted shares. The value of the shares delivered or withheld is determined by the applicable stock compensation plan. For the first quarter of 2018, all shares purchased by SpartanNash not under publicly announced plans related to shares submitted for cancellation to satisfy tax withholding obligations that occur upon the vesting of the restricted shares.

During the first quarter of 2016, the Board authorized and publicly announced a new five-year share repurchase program for $50 million of SpartanNash’s common stock. The remainder of this program was fully utilized in the first quarter of 2018. During the fourth quarter of 2017, the Board authorized an incremental, publicly announced $50 million share repurchase program, expiring in 2022. After the first quarter of 2018 repurchases were made under these programs, $45.0 million remained available under the 2017 program.

Total

Number

Average

of Shares

Price Paid

Period

Purchased

per Share

April 23 – May 20, 2017

Employee Transactions

14,887

$

37.34

May 21 – June 17, 2017

None

—

$

—

June 18 – July 15, 2017

Repurchase Program

300,292

$

26.22

Total for Quarter ended July 15, 2017

Employee Transactions

14,887

$

37.34

Repurchase Program

300,292

$

26.22

			Average
	Total Number		Price Paid
Fiscal Period	of Shares Purchased		per Share
December 31, 2017 - January 27, 2018
Employee Transactions		—	$	—
Repurchase Program		256,326	$	27.07
January 28 - February 24, 2018
Employee Transactions		21,137	$	24.18
Repurchase Program		141,852	$	21.59
February 25 - March 24, 2018
Employee Transactions		42,358	$	16.96
Repurchase Program		340,000	$	18.26
March 25 - April 21, 2018
Employee Transactions		19,620	$	17.21
Repurchase Program		213,930	$	17.72
Total for quarter ended April 21, 2018
Employee Transactions		83,115	$	18.86
Repurchase Program		952,108	$	21.01

The following documents are filed as exhibits to this Quarterly Report on Form 10-Q:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Michigan		38-0593940
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

850 76^th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan		49518
(Address of Principal Executive Offices)		(Zip Code)

	Full Year		4th Quarter		3rd Quarter		2nd Quarter		1st Quarter
(In thousands)	(52 Weeks)		(12 Weeks)		(12 Weeks)		(12 Weeks)		(16 Weeks)
2017	$	164,283	$	38,725	$	38,246	$	38,510	$	48,802

	April 21,			December 30,
(In thousands)	2018			2017
Customer notes receivable	$	2,686		$	2,555
Customer accounts receivable		304,194			312,214
Other receivables		25,509			31,169
Allowance for doubtful accounts		(2,135	)		(1,881	)
Net current accounts and notes receivable	$	330,254		$	344,057
Long-term notes receivable		17,609			18,322
Allowance for doubtful accounts		(120	)		(120	)
Net long-term notes receivable	$	17,489		$	18,202

	Lease and
(In thousands)	Ancillary Costs			Severance			Total
Balance at December 31, 2016	$	21,932		$	—		$	21,932
Provision for closing charges (a)		405			—			405
Provision for severance (b)		—			545			545
Lease termination adjustment (c)		(1,910	)		—			(1,910	)
Accretion expense		302			—			302
Payments		(3,681	)		(379	)		(4,060	)
Balance at July 15, 2017	$	17,048		$	166		$	17,214

	July 15,			December 31,
(In thousands)	2017			2016
Senior secured revolving credit facility, due December 2021	$	564,069		$	359,127
Senior secured term loan, due December 2021		54,672			26,954
Capital lease obligations		45,101			48,255
Other, 2.61% - 8.75%, due 2019 - 2020		3,957			5,028
Total debt - Principal		667,799			439,364
Unamortized debt issuance costs		(7,541	)		(8,265	)
Total debt		660,258			431,099
Less current portion		19,001			17,424
Total long-term debt	$	641,257		$	413,675

	16 Weeks Ended
	April 21,		April 22,
(In thousands)	2018		2017
Asset impairment charges	$	1,470	$	521
Provision for closing charges		3,903		405
Loss (gain) on sales of assets related to closed facilities		137		(177	)
Provision for severance		125		535
Other costs associated with distribution center and store closings		282		296
Changes in estimates		285		—
Lease termination adjustments		—		(559	)
	$	6,202	$	1,021

Unobservable Input	Range
Discount rate		11.80%
Probability of payments	0% - 100%
Projected ~~fiscal~~ year(s) of payments	~~2017~~2018 - 2019

	Percentage of Net Sales				Percentage Change
	16 Weeks Ended				16 Weeks Ended
	April 21, 2018		April 22, 2017		April 21, 2018
Net sales		100.0		100.0		1.3
Gross profit		14.4		15.2		(4.0	)
Selling, general and administrative expenses		13.0		13.7		(4.3	)
Merger/acquisition and integration		0.1		0.2		(45.1	)
Restructuring charges and asset impairment		0.3		0.0		507.4
Operating earnings		1.1		1.3		(12.9	)
Other income and expenses		0.4		0.3		20.0
Earnings before income taxes and discontinued operations		0.7		1.0		(23.4	)
Income tax expense		0.2		0.3		(35.4	)
Earnings from continuing operations		0.5		0.6		(17.5	)
Loss from discontinued operations, net of taxes		—		—		130.0
Net earnings		0.5		0.6		(17.9	)

	Percentage of Net Sales																Percentage Change
																	12 Weeks
	12 Weeks Ended								28 Weeks Ended								Ended
	July 15,				July 16,				July 15,				July 16,				July 15,
	2017				2016				2017				2016				2017
Net sales		100.0		%		100.0		%		100.0		%		100.0		%		3.7
Gross profit		14.3				14.4				14.6				14.5				3.2
Selling, general and administrative expenses		12.2				12.3		*		12.9				12.7				3.6
Merger/acquisition and integration		0.0				0.0				0.1				0.0				(31.9	)
Restructuring charges and asset impairment		(0.0	)			0.3				0.0				0.5				(100.2	)
Operating earnings		2.1				1.8				1.6				1.3				19.4
Other income and expenses		0.3				0.3		*		0.3				0.2				30.1
Earnings before income taxes and discontinued operations		1.8				1.5				1.3				1.1				17.8
Income taxes		0.7		*		0.5		*		0.5				0.4				14.2
Earnings from continuing operations		1.1				1.0				0.8				0.7				19.9
Loss from discontinued operations, net of taxes		(0.0	)			(0.0	)			(0.0	)			(0.0	)			(59.2	)
Net earnings		1.1		%		1.0		%		0.8		%		0.7		%		20.3

	12 Weeks Ended
	July 15, 2017					July 16, 2016
				per diluted					per diluted
(In thousands, except per share amounts)	Earnings			share		Earnings			share
Earnings from continuing operations	$	21,060		$	0.56	$	17,560		$	0.47
Adjustments:
Merger/acquisition and integration		622					913
Restructuring (gains) charges and asset impairment		(14	)				5,748
Fresh Kitchen start-up costs		1,854					—
Severance associated with cost reduction initiatives		21					11
Total adjustments		2,483					6,672
Income tax effect on adjustments (a)		(932	)				(2,525	)
Total adjustments, net of taxes		1,551			0.04		4,147			0.11
Adjusted earnings from continuing operations	$	22,611		$	0.60	$	21,707		$	0.58



	28 Weeks Ended
	July 15, 2017					July 16, 2016
				per diluted					per diluted
(In thousands, except per share amounts)	Earnings			share		Earnings			share
Earnings from continuing operations	$	36,125		$	0.96	$	27,520		$	0.73
Adjustments:
Merger integration and acquisition expenses		4,638					1,810
Restructuring charges and asset impairment		1,008					21,052
Fresh Kitchen start-up costs		4,602					—
Severance associated with cost reduction initiatives		24					690
Stock compensation associated with executive retirement		1,172					—
Total adjustments		11,444					23,552
Income tax effect on adjustments (a)		(4,295	)				(8,953	)
Total adjustments, net of taxes		7,149			0.19		14,599			0.39
Adjusted earnings from continuing operations	$	43,274		$	1.15	$	42,119		$	1.12

	Total
	Number		Average
	of Shares		Price Paid
Period	Purchased		per Share
April 23 – May 20, 2017
Employee Transactions		14,887	$	37.34
May 21 – June 17, 2017
None		—	$	—
June 18 – July 15, 2017
Repurchase Program		300,292	$	26.22
Total for Quarter ended July 15, 2017
Employee Transactions		14,887	$	37.34
Repurchase Program		300,292	$	26.22

Exhibit Number		Document

~~2.1~~3.1		~~Asset Purchase Agreement dated as~~Restated Articles of ~~November 3, 2016 by and among~~Incorporation of SpartanNash Company, ~~Caito Food Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito~~ as ~~Seller’s Representative.~~amended. Previously filed as an exhibit to the Company’s ~~Current~~Quarterly Report on Form ~~8-K filed on January 9,~~10-Q for the quarter ended July 15, 2017. Incorporated herein by reference.

~~2.2~~		Amendment to Asset Purchase Agreement dated as of January 6, 2017 by and among SpartanNash Company, Caito Food Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito as Seller’s Representative. Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 9, 2017. Incorporated herein by reference.

~~3.1~~		~~Restated Articles of Incorporation of SpartanNash Company, as amended.~~

3.2		Bylaws of SpartanNash Company, as amended. Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 1, 2017. Here incorporated by reference.

10.1		~~Description~~Form of ~~Compensation Arrangements~~Restricted Stock Award to Non-Employee Directors.

10.2		Form of ~~Interim Chief Financial Officer.~~Restricted Stock Award to Executive Officers.

10.3		Summary of 2018 Long-Term Incentive Plan.

10.4		Summary of 2018 Annual Cash Incentive Plan.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document