10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended December 30, 2017

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

For the transition period from                      to                     

Commission File Number 001-37578

Performance Food Group Company

(Exact name of registrant as specified in its charter)

Delaware	43-1983182
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)
12500 West Creek Parkway Richmond, Virginia	23238
(Address of principal executive offices)	(Zip Code)

(804) 484-7700

(Registrant’s Telephone Number, Including Area Code)

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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐ (Do not check if a smaller reporting company)	Smaller Reporting Company	☐
Emerging Growth Company	☐

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

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

104,000,540 shares of common stock were outstanding as of February 1, 2018.

TABLE OF CONTENTS

		Page
Special Note Regarding Forward-Looking Statements			3
PART I - FINANCIAL INFORMATION			5
Item 1.	Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		33
Item 4.	Controls and Procedures		33
PART II - OTHER INFORMATION			34
Item 1.	Legal Proceedings		34
Item 1A.	Risk Factors		34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 3.	Defaults Upon Senior Securities		34
Item 4.	Mine Safety Disclosures		34
Item 5.	Other Information		34
Item 6.	Exhibits		35
SIGNATURE			36

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2017 and Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

• competition in our industry is intense, and we may not be able to compete successfully;

• we operate in a low margin industry, which could increase the volatility of our results of operations;

• we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

• our profitability is directly affected by cost inflation and deflation and other factors;

• we do not have long-term contracts with certain of our customers;

• group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

• changes in eating habits of consumers;

• extreme weather conditions;

• our reliance on third-party suppliers;

• labor relations and cost risks and availability of qualified labor;

• volatility of fuel and other transportation costs;

• inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

• we may be unable to increase our sales in the highest margin portion of our business;

• changes in pricing practices of our suppliers;

• risks relating to any future acquisitions;

• environmental, health, and safety costs;

• the risk that we fail to comply with requirements imposed by applicable law or government regulations;

• our reliance on technology and risks associated with disruption or delay in implementation of new technology;

• costs and risks associated with a potential cybersecurity incident or other technology disruption;

• product liability claims relating to the products we distribute and other litigation;

• negative media exposure and other events that damage our reputation;

• anticipated multiemployer pension related liabilities and contributions to our multiemployer pension plan;

• impact of uncollectibility of accounts receivable;

• difficult economic conditions affecting consumer confidence;

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• departure of key members of senior management;

• risks relating to federal, state, and local tax rules;

• the cost and adequacy of insurance coverage;

• risks relating to our outstanding indebtedness; and

• our ability to maintain an effective system of disclosure controls and internal control over financial reporting.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We cannot assure you (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” or “PFG” as used in this Form 10-Q refer to Performance Food Group Company and its consolidated subsidiaries.

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Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except per share data)	As of December 30, 2017		As of July 1, 2017
ASSETS
Current assets:
Cash	$	10.1	$	8.1
Accounts receivable, less allowances of $22.0 and $17.0		1,034.9		1,028.5
Inventories, net		1,043.4		1,013.3
Prepaid expenses and other current assets		51.6		35.0
Total current assets		2,140.0		2,084.9
Goodwill		740.1		718.6
Other intangible assets, net		206.8		201.1
Property, plant and equipment, net		734.9		740.7
Restricted cash		12.9		12.9
Other assets		47.9		45.9
Total assets	$	3,882.6	$	3,804.1
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Outstanding checks in excess of deposits	$	181.4	$	218.2
Trade accounts payable		886.9		907.1
Accrued expenses		204.8		246.0
Long-term debt—current installments		—		5.8
Capital lease obligations—current installments		7.0		5.9
Derivative liabilities		—		0.3
Total current liabilities		1,280.1		1,383.3
Long-term debt		1,358.7		1,241.9
Deferred income tax liability, net		66.0		103.0
Capital lease obligations, excluding current installments		47.4		44.0
Other long-term liabilities		114.9		106.4
Total liabilities		2,867.1		2,878.6
Commitments and contingencies (Note 9)
Shareholders’ equity:
Common Stock
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 102.3 million shares issued and outstanding as of December 30, 2017; 1.0 billion shares authorized, 100.8 million shares issued and outstanding as of July 1, 2017		1.0		1.0
Additional paid-in capital		842.9		855.5
Accumulated other comprehensive income, net of tax expense of $2.2 and $1.5		4.4		2.4
Retained earnings		167.2		66.6
Total shareholders’ equity		1,015.5		925.5
Total liabilities and shareholders’ equity	$	3,882.6	$	3,804.1

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except per share data)	Three months ended December 30, 2017			Three months ended December 31, 2016			Six months ended December 30, 2017			Six months ended December 31, 2016
Net sales	$	4,311.1		$	4,051.8		$	8,676.0		$	8,097.9
Cost of goods sold		3,743.5			3,534.6			7,553.7			7,069.4
Gross profit		567.6			517.2			1,122.3			1,028.5
Operating expenses		518.5			465.9			1,022.7			945.6
Operating profit		49.1			51.3			99.6			82.9
Other expense, net:
Interest expense		15.1			13.6			29.7			26.5
Other, net		(0.1	)		(0.5	)		(0.4	)		(1.3	)
Other expense, net		15.0			13.1			29.3			25.2
Income before taxes		34.1			38.2			70.3			57.7
Income tax (benefit) expense		(43.9	)		15.3			(30.3	)		22.6
Net income	$	78.0		$	22.9		$	100.6		$	35.1
Weighted-average common shares outstanding:
Basic		101.4			100.1			101.2			100.0
Diluted		104.5			102.7			104.5			102.5
Earnings per common share:
Basic	$	0.77		$	0.23		$	0.99		$	0.35
Diluted	$	0.75		$	0.22		$	0.96		$	0.34

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

($ in millions)	Three months ended December 30, 2017		Three months ended December 31, 2016		Six months ended December 30, 2017		Six months ended December 31, 2016
Net income	$	78.0	$	22.9	$	100.6	$	35.1
Other comprehensive income, net of tax:
Interest rate swaps:
Change in fair value, net of tax		1.8		5.0		1.8		6.0
Reclassification adjustment, net of tax		0.2		0.7		0.2		1.5
Other comprehensive income		2.0		5.7		2.0		7.5
Total comprehensive income	$	80.0	$	28.6	$	102.6	$	42.6

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

	Common Stock				Additional Paid-in			Accumulated Other Comprehensive			(Accumulated Deficit) Retained			Total Shareholders’
(In millions)	Shares		Amount		Capital			Income (Loss)			Earnings			Equity
Balance as of July 2, 2016		99.9	$	1.0	$	836.8		$	(5.8	)	$	(29.2	)	$	802.8
Issuance of common stock under stock-based compensation plans		0.2		—		(0.3	)		—			—			(0.3	)
Net income		—		—		—			—			35.1			35.1
Interest rate swaps		—		—		—			7.5			—			7.5
Stock-based compensation expense		—		—		8.1			—			—			8.1
Change in accounting principle (1)		—		—		0.9			—			(0.5	)		0.4
Balance as of December 31, 2016		100.1	$	1.0	$	845.5		$	1.7		$	5.4		$	853.6
Balance as of July 1, 2017		100.8	$	1.0	$	855.5		$	2.4		$	66.6		$	925.5
Issuance of common stock under stock-based compensation plans		1.5		—		(27.1	)		—			—			(27.1	)
Net income		—		—		—			—			100.6			100.6
Interest rate swaps		—		—		—			2.0			—			2.0
Stock-based compensation expense		—		—		14.5			—			—			14.5
Balance as of December 30, 2017		102.3	$	1.0	$	842.9		$	4.4		$	167.2		$	1,015.5

(1) As of the beginning of fiscal 2017, the Company elected to early adopt the provisions of ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company has made a policy election to account for forfeitures as they occur and recorded a cumulative-effect adjustment to Accumulated Deficit as of the date of adoption.

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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PERFORMANCE FOOD GROUP COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

($ in millions)	Six months ended December 30, 2017			Six months ended December 31, 2016 (1)
Cash flows from operating activities:
Net income	$	100.6		$	35.1
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation		49.1			43.3
Amortization of intangible assets		14.6			16.6
Amortization of deferred financing costs and other		2.4			2.2
Provision for losses on accounts receivables		7.5			6.8
Expense related to modification of debt		—			0.1
Stock-based compensation expense		14.5			8.1
Deferred income tax benefit		(37.8	)		(4.0	)
Change in fair value of derivative assets and liabilities		(0.2	)		(1.8	)
Other		7.3			1.1
Changes in operating assets and liabilities, net
Accounts receivable		(1.2	)		(15.1	)
Inventories		(14.3	)		(54.4	)
Prepaid expenses and other assets		(15.0	)		12.5
Trade accounts payable		(29.4	)		(68.2	)
Outstanding checks in excess of deposits		(36.8	)		29.7
Accrued expenses and other liabilities		(28.7	)		(37.5	)
Net cash provided by (used in) operating activities		32.6			(25.5	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(38.5	)		(79.9	)
Net cash paid for acquisitions		(63.2	)		(82.1	)
Proceeds from sale of property, plant and equipment		0.3			0.2
Net cash used in investing activities		(101.4	)		(161.8	)
Cash flows from financing activities:
Net borrowings under ABL Facility		116.4			192.8
Payment of Promissory Note		(6.0	)		—
Cash paid for shares withheld to cover taxes		(27.8	)		(1.1	)
Cash paid for acquisitions		(7.4	)		(0.8	)
Other financing activities		(4.4	)		(2.8	)
Net cash provided by financing activities		70.8			188.1
Net increase in cash and restricted cash		2.0			0.8
Cash and restricted cash, beginning of period		21.0			23.8
Cash and restricted cash, end of period	$	23.0		$	24.6

(1) The consolidated statement of cash flows for the six months ended December 31, 2016 has been adjusted to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The consolidated statements of cash flows explain the change during the periods in the total of cash and restricted cash. Therefore, restricted cash activity is included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Refer to Note 3 for further discussion.

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The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

(In millions)	As of December 30, 2017		As of July 1, 2017
Cash	$	10.1	$	8.1
Restricted cash (2)		12.9		12.9
Total cash and restricted cash	$	23.0	$	21.0

(2) Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims.

Supplemental disclosures of non-cash transactions are as follows:

(In millions)	Six months ended December 30, 2017		Six months ended December 31, 2016
Purchases of property, plant and equipment, financed	$	3.2	$	—
Debt assumed through new capital lease obligations		7.7		19.6
Disposal of property, plant and equipment under sale-leaseback transaction		—		3.2

Supplemental disclosures of cash flow information are as follows:

(In millions)	Six months ended December 30, 2017		Six months ended December 31, 2016
Cash paid during the year for:
Interest	$	28.1	$	23.2
Income taxes, net of refunds		25.1		10.2

See accompanying notes to consolidated financial statements, which are an integral part of these unaudited consolidated financial statements.

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PERFORMANCE FOOD GROUP COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Business Activities

Business Overview

Performance Food Group Company, through its subsidiaries, markets and distributes national and company-branded food and food-related products to customer locations across the United States. The Company serves both of the major customer types in the restaurant industry: (i) independent, or “Street” customers, and (ii) multi-unit, or “Chain” customers, which include regional and national family and casual dining restaurant chains, fast casual chains, and quick-service restaurants. The Company also serves schools, healthcare facilities, business and industry locations, and other institutional customers.

Secondary Offerings

In September 2017, November 2017 and December 2017 Wellspring Capital Management (“Wellspring”) sold an aggregate of 16,272,914 shares of the Company’s common stock in transactions registered under the Securities Act. The Company did not receive any proceeds from these sales. As a result of these sales, Wellspring no longer beneficially owns any shares of the Company’s common stock.

2. Basis of Presentation

The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 1, 2017 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2017 (the “Form 10-K”). The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, and income taxes. Actual results could differ from these estimates.

The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements.

3. Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-11,

Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU requires an entity to measure most inventory at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The ASU is effective for public companies prospectively for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this ASU as of the beginning of fiscal 2018 and concluded that it does not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is

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effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period using the retrospective transition method. The Company elected to early adopt ASU 2016-15 as of the beginning of fiscal 2018. Based on our review of the ASU, the Company concluded that it has historically classified the specified cash receipts and cash payments in accordance with the clarified guidance. This ASU did not have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The ASU requires a retrospective transition method for each period presented. The Company elected to early adopt ASU 2016-18 as of the beginning of fiscal 2018. The statements of cash flows for the six months ended December 30, 2017 and December 31, 2016 include restricted cash with cash when reconciling the beginning-of-period and end-of-period total amounts.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test, which is performed by estimating the fair value of individual assets and liabilities of the reporting unit to calculate the implied fair value of goodwill. Instead, an entity will record a goodwill impairment charge based on the excess of a reporting unit’s carrying value over its estimated fair value, not to exceed the carrying amount of goodwill. This ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted. The Company elected to early adopt ASU 2017-04 as of the beginning of fiscal 2018. Upon adoption of the ASU, the Company concluded that it did not have a material impact on its consolidated financial statements. The Company will apply ASU 2017-04 on a prospective basis when analyzing goodwill impairment.

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This Update is a comprehensive new revenue recognition model that requires a company to recognize revenue that represents the transfer of promised goods or services to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services.

Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies may either use a full retrospective or modified retrospective approach for adoption of Topic 606. The Company will adopt the guidance in fiscal 2019 and currently plans to implement the new standard using the modified retrospective approach. However, our method is subject to change as we finalize our adoption approach for the new standard. The Company has conducted a preliminary assessment and anticipates that the timing of recognition of revenue to be substantially unchanged under the new standard. The amended guidance also requires additional quantitative and qualitative disclosures, which the Company believes will be significant to the consolidated financial statements. The Company is in the process of designing and implementing relevant controls related to adoption of the new standard.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU is a comprehensive new lease accounting model that requires companies to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. For public entities, the ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt the guidance in fiscal 2020. Companies are required to recognize and measure leases at the beginning of the earliest period presented in its financial statements using a modified retrospective approach. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will have a significant impact on our consolidated financial statements. Information about our undiscounted future lease payments and the timing of those payments is in Note 12. Leases in our Form 10-K.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Companies are required to apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. The Company is in the process of evaluating the impact of this ASU on our future consolidated financial statements.

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In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business in order to assist companies in the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amended guidance also removes the existing evaluation of a market participant’s ability to replace missing elements and narrows the definition of output to achieve consistency with other topics. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and should be applied on a prospective basis. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company’s financial statements at the date of adoption.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU expands hedge accounting for both financial and nonfinancial risk components to better align hedge accounting with a company’s risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective basis with a cumulative-effect adjustment to the Consolidated Balance Sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will not have a material impact on its consolidated financial statements.

4. Business Combinations

During the first six months of fiscal 2018, the Company paid cash of $64.9 million for an acquisition and during the first six months of fiscal 2017, the Company paid cash of $82.8 million for four acquisitions. These acquisitions did not materially affect the Company’s results of operations.

The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2018 acquisition.

(In millions)	Fiscal 2018
Net working capital	$	21.4
Goodwill		21.1
Other intangible assets		20.6
Property, plant and equipment		1.8
Total purchase price	$	64.9

The goodwill is a result of expected synergies from combined operations of the acquisition and the Company. The following table presents the changes in the carrying amount of goodwill:

(In millions)	Performance Foodservice		PFG Customized		Vistar		Corporate and Other		Total
Balance as of July 1, 2017	$	428.2	$	166.5	$	64.9	$	59.0	$	718.6
Acquisitions - current year		—		—		21.1		—		21.1
Adjustments related to prior year acquisitions		0.1		—		—		0.3		0.4
Balance as of December 30, 2017	$	428.3	$	166.5	$	86.0	$	59.3	$	740.1

The adjustments related to prior year acquisitions are the result of net working capital adjustments.

Subsequent to December 30, 2017, the Company paid $6.6 million for an acquisition. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed.

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5. Debt

The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below.

Debt consisted of the following:

(In millions)	As of December 30, 2017			As of July 1, 2017
ABL	$	1,016.3		$	899.9
5.500% Notes due 2024		350.0			350.0
Promissory Note		—			6.0
Less: Original issue discount and deferred financing costs		(7.6	)		(8.2	)
Long-term debt		1,358.7			1,247.7
Capital and finance lease obligations		54.4			49.9
Total debt		1,413.1			1,297.6
Less: current installments		(7.0	)		(11.7	)
Total debt, excluding current installments	$	1,406.1		$	1,285.9

ABL Facility

PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the Second Amended and Restated Credit Agreement dated February 1, 2016, as amended by the First Amendment to Second Amended and Restated Credit Agreement dated August 3, 2017 (the “ABL Facility”). The ABL Facility has an aggregate principal amount of $1.95 billion and matures February 2021. The ABL Facility is secured by the majority of the tangible assets of PFGC and its subsidiaries. Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries).

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee ranging from 0.25% to 0.375%.

The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility:

(Dollars in millions)	As of December 30, 2017			As of July 1, 2017
Aggregate borrowings	$	1,016.3		$	899.9
Letters of credit		123.6			105.5
Excess availability, net of lenders’ reserves of $12.2 and $11.2		577.8			594.6
Average interest rate		2.98	%		2.59	%

Senior Notes

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500% Senior Notes due 2024 (the “Notes”), pursuant to an indenture dated as of May 17, 2016. The Notes are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes are not guaranteed by Performance Food Group Company.

The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries are restricted from distribution to Performance Food Group Company, except for approximately $302.0 million of restricted payment capacity available under such debt agreements, as of December 30, 2017. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate.

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Unsecured Subordinated Promissory Note

In connection with an acquisition, Performance Food Group, Inc. issued a $6.0 million interest only, unsecured subordinated promissory note on December 21, 2012. The $6.0 million promissory note was paid off in December 2017.

6. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and diesel fuel costs. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and payments related to the Company’s borrowings and diesel fuel purchases.

The effective portion of changes in the fair value of derivatives that are both designated and qualify as cash flow hedges is recorded in other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction occurs. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. Since the Company has a substantial portion of its debt in variable-rate instruments, it accomplishes this objective with interest rate swaps. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. All of the Company’s interest rate swaps are designated and qualify as cash flow hedges.

As of December 30, 2017, Performance Food Group, Inc. had eight interest rate swaps with a combined $650 million notional amount. The following table summarizes the outstanding Swap Agreements as of December 30, 2017 (in millions):

Effective Date	Maturity Date		Notional Amount		Fixed Rate Swapped
August 9, 2013		August 9, 2018	$	200.0		1.51	%
June 30, 2017		June 30, 2019		50.0		1.13	%
June 30, 2017		June 30, 2020		50.0		1.23	%
June 30, 2017		June 30, 2020		50.0		1.25	%
June 30, 2017		June 30, 2020		50.0		1.26	%
August 9, 2018		August 9, 2021		75.0		1.21	%
August 9, 2018		August 9, 2021		75.0		1.20	%
June 30, 2020		December 31, 2021		100.0		2.16	%

Hedges of Forecasted Diesel Fuel Purchases

From time to time, Performance Food Group, Inc. enters into costless collar arrangements to manage its exposure to variability in cash flows expected to be paid for its forecasted purchases of diesel fuel. As of December 30, 2017, Performance Food Group, Inc. was a party to two such arrangements, with an aggregate 4.5 million gallon original notional amount. The 4.5 million gallon forecasted purchases of diesel fuel are expected to be made between January 1, 2018 and June 30, 2018.

The fuel collar instruments do not qualify for hedge accounting. Accordingly, the derivative instruments are recorded as an asset or liability on the balance sheet at fair value and any changes in fair value are recorded in the period of change as unrealized gains or losses on fuel hedging instruments and included in Other, net in the accompanying consolidated statements of operations.

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7. Fair Value of Financial Instruments

The carrying values of cash, accounts receivable, outstanding checks in excess of deposits, trade accounts payable, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $1,358.7 million and $1,247.7 million, is $1,378.1 million and $1,258.3 million at December 30, 2017 and July 1, 2017, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date, and is considered a Level 2 measurement.

8. Income Taxes

The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various United States federal and state jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax items, tax credits and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” (the “Act”) was signed into law. The Act makes broad and complex changes to the U.S. Internal Revenue Code including, but not limited to: reducing the U.S. federal corporate tax rate from 35% to 21%; creating a new limitation on deductible interest expense; repealing the domestic production activity deduction, providing for bonus depreciation that will allow for full expensing of certain qualified property; and limiting other deductions.

The Company’s net deferred tax liability of $103.0 million as of July 1, 2017 was determined using the federal corporate tax rate of 35% prior to the passage of the Act. The Act reduces the federal corporate tax rate to 21%, effective January 1, 2018. Consequently, we have recorded a $10.2 million decrease in deferred tax assets and a $47.6 million decrease in deferred tax liabilities with a corresponding net benefit to deferred income tax expense of $37.4 million for the three and six months ended December 30, 2017.

The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under FASB ASC 740 – Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Act. The Company has not identified any items for which the income tax effects of the Act have not been substantially completed.

The Company’s effective tax rate was -128.3% for the three months ended December 30, 2017 and 40.1% for the three months ended December 31, 2016. The Company’s effective tax rate was -43.1% for the six months ended December 30, 2017 and 39.2% for the six months ended December 31, 2016. As a result in the reduction in the federal corporate income tax rate to 21% from 35% under the Act, the Company has a blended statutory rate of 28% for the three and six months ended December 30, 2017. For the three and six months ended December 30, 2016, the statutory rate was 35%. Additionally, during the three months ended December 30, 2017, performance vesting criteria for certain stock-based compensation awards was met resulting in a significant permanent tax deduction difference. The impact to the provision for stock-based compensation and the impact of the reduction in tax rate under the Act are summarized as follows:

(Dollars in millions)	Three Months Ended December 30, 2017						Six Months Ended December 30, 2017
	Income Tax Expense			Effective Tax Rate			Income Tax Expense			Effective Tax Rate
Income tax benefit, reported	$	(43.9	)		-128.3	%	$	(30.3	)		-43.1	%
Revaluation of net deferred income tax liability		37.4			109.6	%		37.4			53.3	%
Stock-based compensation – performance vesting		15.4			45.2	%		15.4			21.9	%
Impact of rate reduction on first quarter fiscal 2018 income		2.5			7.4	%		—			—
Income tax expense, excluding benefits	$	11.4			33.9	%	$	22.5			32.1	%

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As of December 30, 2017 and July 1, 2017, the Company had net deferred tax assets of $28.4 million and $43.1 million, respectively, and deferred tax liabilities of $94.4 million and $146.1 million, respectively. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.

The Company records a liability for Uncertain Tax Positions in accordance with FASB ASC 740-10-25, Income Taxes – General - Recognition. As of December 30, 2017 and July 1, 2017, the Company had approximately $1.4 million and $1.3 million of unrecognized tax benefits, respectively. It is reasonably possible that a decrease of approximately $0.1 million in the balance of unrecognized tax benefits may occur within the next twelve months because of statute of limitations expirations, that, if recognized, would affect the effective tax rate.

9. Commitments and Contingencies

Purchase Obligations

The Company had outstanding contracts and purchase orders for capital projects and services totaling $10.1 million at December 30, 2017. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 30, 2017. Subsequent to December 30, 2017, the Company entered into an additional contract totaling $8.8 million.

Guarantees

Subsidiaries of the Company have entered into numerous operating leases, including leases of buildings, equipment, tractors, and trailers. Certain of the leases for tractors, trailers, and other vehicles and equipment, provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 7% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 4 to 8 years and expiration dates ranging from 2018 to 2025. As of December 30, 2017, the undiscounted maximum amount of potential future payments for lease guarantees totaled approximately $28.4 million, which would be mitigated by the fair value of the leased assets at lease expiration. The assessment as to whether it is probable that subsidiaries of the Company will be required to make payments under the terms of the guarantees is based upon their actual and expected loss experience. Consistent with the requirements of FASB ASC 460-10-50, Guarantees-Overall-Disclosure, the Company has recorded $0.2 million of the potential future guarantee payments on its consolidated balance sheet as of December 30, 2017.

The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products.

Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets.

Litigation

The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods.

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U.S. Equal Employment Opportunity Commission Lawsuit. In March 2009, the Baltimore Equal Employment Opportunity Commission, or the “EEOC,” Field Office served us with company-wide (excluding, however, our Vistar and Roma Foodservice operations) subpoenas relating to alleged violations of the Equal Pay Act and Title VII of the Civil Rights Act (“Title VII”), seeking certain information from January 1, 2004 to a specified date in the first fiscal quarter of 2009. In August 2009, the EEOC moved to enforce the subpoenas in federal court in Maryland, and we opposed the motion. In February 2010, the court ruled that the subpoena related to the Equal Pay Act investigation was enforceable company-wide but on a narrower scope of data than the original subpoena sought (the court ruled that the subpoena was applicable to the transportation, logistics, and warehouse functions of our broadline distribution centers only and not to our PFG Customized distribution centers). We cooperated with the EEOC on the production of information. In September 2011, the EEOC notified us that the EEOC was terminating the investigation into alleged violations of the Equal Pay Act. In determinations issued in September 2012 by the EEOC with respect to the charges on which the EEOC had based its company-wide investigation, the EEOC concluded that we engaged in a pattern of denying hiring and promotion to a class of female applicants and employees into certain positions within the transportation, logistics, and warehouse functions within our broadline division in violation of Title VII. In June 2013, the EEOC filed suit in federal court in Baltimore against us. The litigation concerns two issues: (1) whether we unlawfully engaged in an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether we unlawfully failed to promote one of the three individuals who filed charges with the EEOC because of her gender. The EEOC seeks the following relief in the lawsuit: (1) to permanently enjoin us from denying employment to female applicants because of their sex and denying promotions to female employees because of their sex; (2) a court order mandating that we institute and carry out policies, procedures, practices and programs which provide equal employment opportunities for females; (3) back pay with prejudgment interest and compensatory damages for a former female employee and an alleged class of aggrieved female applicants; (4) punitive damages; and (5) costs. The court bifurcated the litigation into two phases. In the first phase, the jury will decide whether we engaged in a gender-based pattern and practice of discrimination and the individual claims of one former employee. If the EEOC prevails on all counts in the first phase, no monetary relief would be awarded, except possibly for the single individual’s claims, which would be immaterial. The remaining individual claims would then be tried in the second phase. At this stage in the proceedings, the Company cannot estimate either the number of individual trials that could occur in the second phase of the litigation or the value of those claims. For these reasons, we are unable to estimate any potential loss or range of loss in the event of an adverse finding in the first and second phases of the litigation. The parties are engaged in discovery. We intend to vigorously defend ourselves.

Wilder, et al. v. Roma Food Enterprises, Inc., et al. The court granted final approval of the settlement stipulation on November 6, 2017. The Company funded the $1.9 million settlement on January 10, 2018, thereby ending the litigation.

Tax Liabilities

The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States, which may result in assessments of additional taxes.

10. Related-Party Transactions

Transaction and Advisory Fee Agreement

The Company was a party to an advisory fee agreement pursuant to which affiliates of The Blackstone Group L.P. and Wellspring provided management certain strategic and structuring advice and certain monitoring, advising, and consulting services to the Company. The advisory fee agreement provided for the payment by the Company of an annual advisory fee and the reimbursement of out of pocket expenses. In fiscal 2018 the Company will pay a total of $3.0 million related to this agreement, of which $1.5 million was paid in the second quarter of fiscal 2018 and during the six months ended December 30, 2017 and $1.5 million will be paid in the third quarter of fiscal 2018. The payments made under this agreement totaled $5.5 million during the six months ended December 31, 2016.

Under its terms, this agreement terminated on October 6, 2017.

Other

The Company participates in and has an equity method investment in a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $4.7 million as of December 30, 2017 and $4.6 million as of July 1, 2017. During the three-month periods ended December 30, 2017 and December 31, 2016, the Company recorded purchases of $177.5 million and $176.6 million, respectively, through the purchasing alliance. During the six-month periods ended December 30, 2017 and December 31, 2016, the Company recorded purchases of $390.4 million and $387.0 million, respectively, through the purchasing alliance.

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11. Earnings Per Share

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted EPS, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the proceeds from the exercise of stock options under the treasury stock method. Potential common shares of 0.7 million and 0.7 million for the three and six months ended December 30, 2017, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. Potential common shares of 1.2 million and 1.0 million for the three and six months ended December 31, 2016, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive.

A reconciliation of the numerators and denominators for the basic and diluted EPS computations is as follows:

(In millions, except per share amounts)	Three months ended December 30, 2017		Three months ended December 31, 2016		Six months ended December 30, 2017		Six months ended December 31, 2016
Numerator:
Net income	$	78.0	$	22.9	$	100.6	$	35.1
Denominator:
Weighted-average common shares outstanding		101.4		100.1		101.2		100.0
Dilutive effect of share-based awards		3.1		2.6		3.3		2.5
Weighted-average dilutive shares outstanding		104.5		102.7		104.5		102.5
Basic earnings per share	$	0.77	$	0.23	$	0.99	$	0.35
Diluted earnings per share	$	0.75	$	0.22	$	0.96	$	0.34

12. Segment Information

The Company has three reportable segments, as defined by ASC 280 Segment Reporting, related to disclosures about segments of an enterprise. The Performance Foodservice (“PFS”) segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. The PFG Customized segment principally serves the family and casual dining channel but also serves fine dining, and fast casual restaurant chains. The Vistar segment distributes candy, snack, beverage, and other products to customers in the vending, office coffee services, theater, retail, and other channels. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA. For PFG Customized, EBITDA includes certain allocated corporate charges that are included in operating expenses. The allocated corporate charges are determined based on a percentage of total sales. This percentage is reviewed on a periodic basis to ensure that the segment is allocated a reasonable rate of corporate expenses based on their use of corporate services.

Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense, as well as the operations of certain recent acquisitions.

In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for PFS, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change.

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(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the three months ended December 30, 2017
Net external sales	$	2,532.8	$	888.1	$	838.3	$	51.9		$	—		$	4,311.1
Inter-segment sales		2.5		0.1		0.6		58.7			(61.9	)		—
Total sales		2,535.3		888.2		838.9		110.6			(61.9	)		4,311.1
EBITDA		83.0		5.9		34.0		(41.4	)		—			81.5
Depreciation and amortization		14.6		3.7		6.9		7.1			—			32.3
Capital expenditures		9.3		4.1		5.3		3.3			—			22.0
For the three months ended December 31, 2016
Net external sales	$	2,356.8	$	933.4	$	737.4	$	24.2		$	—		$	4,051.8
Inter-segment sales		1.4		0.1		0.5		53.7			(55.7	)		—
Total sales		2,358.2		933.5		737.9		77.9			(55.7	)		4,051.8
EBITDA		75.5		6.7		33.0		(33.0	)		—			82.2
Depreciation and amortization		14.0		3.6		6.6		6.2			—			30.4
Capital expenditures		34.1		2.7		0.8		7.5			—			45.1
(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the six months ended December 30, 2017
Net external sales	$	5,157.3	$	1,784.1	$	1,634.5	$	100.1		$	—		$	8,676.0
Inter-segment sales		5.1		0.2		1.2		118.6			(125.1	)		—
Total sales		5,162.4		1,784.3		1,635.7		218.7			(125.1	)		8,676.0
EBITDA		161.8		11.1		59.8		(69.0	)		—			163.7
Depreciation and amortization		28.4		7.3		13.2		14.8			—			63.7
Capital expenditures		20.5		6.3		5.6		6.1			—			38.5
For the six months ended December 31, 2016
Net external sales	$	4,791.5	$	1,800.1	$	1,478.2	$	28.1		$	—		$	8,097.9
Inter-segment sales		3.1		0.7		1.2		108.7			(113.7	)		—
Total sales		4,794.6		1,800.8		1,479.4		136.8			(113.7	)		8,097.9
EBITDA		148.1		10.6		54.8		(69.4	)		—			144.1
Depreciation and amortization		27.1		8.8		11.8		12.2			—			59.9
Capital expenditures		53.8		4.9		2.2		19.0			—			79.9

Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:

(In millions)	As of December 30, 2017		As of July 1, 2017
PFS	$	2,162.3	$	2,161.2
PFG Customized		645.9		667.1
Vistar		754.0		654.5
Corporate & All Other		320.4		321.3
Total assets	$	3,882.6	$	3,804.1

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13. Stock-based Compensation

Performance Food Group Company provides compensation benefits to employees and non-employee directors under several share based payment arrangements. The Performance Food Group Company 2007 Management Option Plan (the”2007 Option Plan”) allowed for the granting of awards to employees, officers, directors, consultants, and advisors of the Company or its affiliates. The terms and conditions of awards granted under the 2007 Option Plan were determined by the Board of Directors.

The Tranche II and Tranche III options and restricted stock granted under the 2007 Option Plan are subject to both time and performance vesting, including performance criteria based on the internal rate of return and sponsor cash inflows as outlined in the 2007 Option Plan.

During the second quarter of fiscal 2018, Wellspring sold all of their remaining interest in shares of the Company’s common stock. On December 7, 2017, the Company determined that the performance criteria for the Tranche II and III awards had been met and 2.1 million shares of restricted stock and 1.4 million options vested. In the second quarter of fiscal 2018, the Company recognized approximately $6.3 million of accelerated compensation expense in connection with the vesting of the Tranche II and III awards. Based on the performance achieved, total compensation expense for the Tranche II and III awards was $24.9 million. The excess tax benefit recognized in the consolidated statements of operations for the three and six months ended December 30, 2017 was $15.4 million.

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

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated financial statements and notes thereto included elsewhere in this quarterly report on Form 10-Q (the “Form 10-Q”) and the audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended July 1, 2017 (the “Form 10-K”). In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Item 1A. Risk Factors” section of the Form 10-K and in the “Part II. Item 1A. Risk Factors” section of our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2017. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Form 10-Q.

Our Company

We market and distribute approximately 150,000 food and food-related products to customers across the United States from approximately 76 distribution facilities to over 150,000 customer locations in the “food-away-from-home” industry. We offer our customers a broad assortment of products including our proprietary-branded products, nationally-branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

We have three reportable segments: Performance Foodservice, PFG Customized, and Vistar. Our Performance Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Performance Foodservice sells to independent, or “Street,” and multi-unit, or “Chain,” restaurants and other institutions such as schools, healthcare facilities, and business and industry locations. Our PFG Customized segment has provided longstanding service to some of the most recognizable family and casual dining restaurant chains and recently expanded service into fast casual restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, and other items nationally to the vending, office coffee service, theater, retail, hospitality, and other channels. We believe that there are substantial synergies across our segments. Cross-segment synergies include procurement, operational best practices such as the use of new productivity technologies, and supply chain and network optimization, as well as shared corporate functions such as accounting, treasury, tax, legal, information systems, and human resources.

21

Recent Trends and Initiatives

Our case volume has grown in each quarter over the comparable prior fiscal year quarter, starting in the second quarter of fiscal 2010 and continuing through the most recent quarter. We believe that we gained industry share during the second quarter of fiscal 2018 given that we have grown our sales more rapidly than the industry growth rate forecasted by Technomic, a research and consulting firm serving the food and food related industry. Our Net income increased 240.6% from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased 186.6% from the first six months of fiscal 2017 to the first six months of fiscal 2018. Adjusted EBITDA increased 12.2% from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased 15.4% from the first six months of fiscal 2017 to the first six months of fiscal 2018, driven primarily by case growth and improved profit per case. Case volume grew 4.2% in the second quarter of fiscal 2018 and 3.9% in the first six months of fiscal 2018 compared to the prior year periods. Gross margin dollars rose 9.7% and 9.1% in the second quarter of fiscal 2018 and the first six months of fiscal 2018, respectively, versus the prior year periods primarily as a result of shifting our channel mix toward higher gross margin customers and shifting our product mix toward sales of Performance Brands. Our operating expenses, compared to the second quarter and first six months of fiscal 2017, increased 11.3% and 8.2%, respectively, as a result of increases in variable operational and selling expenses associated with the increase in case volume, as well as due to several one-time expenses including accelerated stock-based compensation expense.

Key Factors Affecting Our Business

We believe that our performance is principally affected by the following key factors:

• Changing demographic and macroeconomic trends. The share of consumer spending captured by the food-away-from-home industry increased steadily for several decades and paused during the recession that began in 2008. Following the recession, the share has again increased as a result of increasing employment, rising disposable income, increases in the number of restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income households, and an aging population base that spends more per capita at foodservice establishments. The foodservice distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending, changes in consumer confidence, and changes in the prices of certain goods.

• Food distribution market structure. We are the third largest foodservice distributer by revenue in the United States behind Sysco and US Foods, which are both national broadline distributors. The balance of the market consists of a wide spectrum of companies ranging from businesses selling a single category of product (e.g., produce) to large regional broadline distributors with many distribution centers and thousands of products across all categories. We believe our scale enables us to invest in our Performance Brands, to benefit from economies of scale in purchasing and procurement, and to drive supply chain efficiencies that enhance our customers’ satisfaction and profitability. We believe that the relative growth of larger foodservice distributors will continue to outpace that of smaller, independent players in our industry.

• Our ability to successfully execute our segment strategies and implement our initiatives. Our performance will continue to depend on our ability to successfully execute our segment strategies and to implement our current and future initiatives. The key strategies include focusing on independent sales and Performance Brands, pursuing new customers for all three of our reportable segments, expansion of geographies, utilizing our infrastructure to gain further operating and purchasing efficiencies, and making strategic acquisitions.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures used by our management are discussed below. The percentages on the results presented below are calculated based on rounded numbers.

Net Sales

Net sales is equal to gross sales minus sales returns; sales incentives that we offer to our customers, such as rebates and discounts that are offsets to gross sales; and certain other adjustments. Our net sales are driven by changes in case volumes, product inflation that is reflected in the pricing of our products, and mix of products sold.

22

Gross Profit

Gross profit is equal to our net sales minus our cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration) and inbound freight. Cost of goods sold generally changes as we incur higher or lower costs from our suppliers and as our customer and product mix changes.

EBITDA and Adjusted EBITDA

Management measures operating performance based on our EBITDA, defined as net income before interest expense, interest income, income taxes, and depreciation and amortization. EBITDA is not defined under U.S. GAAP and is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP and is subject to important limitations. Our definition of EBITDA may not be the same as similarly titled measures used by other companies.

We believe that the presentation of EBITDA enhances an investor’s understanding of our performance. We use this measure to evaluate the performance of our segments and for business planning purposes. We present EBITDA in order to provide supplemental information that we consider relevant for the readers of our consolidated financial statements included elsewhere in this report, and such information is not meant to replace or supersede U.S. GAAP measures.

In addition, our management uses Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, and other adjustment items permitted in calculating covenant compliance under our credit agreement and indenture (other than certain pro forma adjustments permitted under our credit agreement and indenture relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our credit agreement and indenture, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the credit agreement and indenture). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.

Adjusted EBITDA is not defined under U.S. GAAP and is subject to important limitations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility (as defined below under “-Liquidity and Capital Resources”) and holders of our Notes (as defined below under “-Liquidity and Capital Resources”), in their evaluation of the operating performance of companies in industries similar to ours. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management’s performance for purposes of determining their compensation under our incentive plans.

EBITDA and Adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. For example, EBITDA and Adjusted EBITDA:

• exclude certain tax payments that may represent a reduction in cash available to us;

• do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;

• do not reflect changes in, or cash requirements for, our working capital needs; and

• do not reflect the significant interest expense, or the cash requirements, necessary to service our debt.

In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items as permitted or required by our credit agreement and indenture. Adjusted EBITDA among other things:

• does not include non-cash stock-based employee compensation expense and certain other non-cash charges;

• does not include cash and non-cash restructuring, severance, and relocation costs incurred to realize future cost savings and enhance our operations; and

• does not reflect advisory fees paid.

We have included the calculations of EBITDA and Adjusted EBITDA for the periods presented.

23

Results of Operations, EBITDA, and Adjusted EBITDA

The following table sets forth a summary of our results of operations, EBITDA, and Adjusted EBITDA for the periods indicated (in millions, except per share data):

	Three Months Ended
	December 30, 2017			December 31, 2016			Change			%
Net sales	$	4,311.1		$	4,051.8		$	259.3			6.4
Cost of goods sold		3,743.5			3,534.6			208.9			5.9
Gross profit		567.6			517.2			50.4			9.7
Operating expenses		518.5			465.9			52.6			11.3
Operating profit		49.1			51.3			(2.2	)		(4.3	)
Other expense
Interest expense		15.1			13.6			1.5			11.0
Other, net		(0.1	)		(0.5	)		0.4			80.0
Other expense, net		15.0			13.1			1.9			14.5
Income before income taxes		34.1			38.2			(4.1	)		(10.7	)
Income tax expense		(43.9	)		15.3			(59.2	)		NM
Net income	$	78.0		$	22.9		$	55.1			240.6
EBITDA	$	81.5		$	82.2		$	(0.7	)		(0.9	)
Adjusted EBITDA	$	105.0		$	93.6		$	11.4			12.2
Weighted-average common shares outstanding:
Basic		101.4			100.1			1.3			1.3
Diluted		104.5			102.7			1.8			1.8
Earnings per common share:
Basic	$	0.77		$	0.23		$	0.54			234.8
Diluted	$	0.75		$	0.22		$	0.53			240.9
	Six Months Ended
	December 30, 2017			December 31, 2016			Change			%
Net sales	$	8,676.0		$	8,097.9		$	578.1			7.1
Cost of goods sold		7,553.7			7,069.4			484.3			6.9
Gross profit		1,122.3			1,028.5			93.8			9.1
Operating expenses		1,022.7			945.6			77.1			8.2
Operating profit		99.6			82.9			16.7			20.1
Other expense
Interest expense		29.7			26.5			3.2			12.1
Other, net		(0.4	)		(1.3	)		0.9			69.2
Other expense, net		29.3			25.2			4.1			16.3
Income before income taxes		70.3			57.7			12.6			21.8
Income tax expense		(30.3	)		22.6			(52.9	)		NM
Net income	$	100.6		$	35.1		$	65.5			186.6
EBITDA	$	163.7		$	144.1		$	19.6			13.6
Adjusted EBITDA	$	195.7		$	169.6		$	26.1			15.4
Weighted-average common shares outstanding:
Basic		101.2			100.0			1.2			1.2
Diluted		104.5			102.5			2.0			2.0
Earnings per common share:
Basic	$	0.99		$	0.35		$	0.64			182.9
Diluted	$	0.96		$	0.34		$	0.62			182.4

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We believe that the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net income. The following table reconciles EBITDA and Adjusted EBITDA to net income for the periods presented:

	Three Months Ended					Six Months Ended
	December 30, 2017			December 31, 2016		December 30, 2017			December 31, 2016
	(dollars in millions)					(dollars in millions)
Net income	$	78.0		$	22.9	$	100.6		$	35.1
Interest expense		15.1			13.6		29.7			26.5
Income tax (benefit) expense		(43.9	)		15.3		(30.3	)		22.6
Depreciation		24.3			22.5		49.1			43.3
Amortization of intangible assets		8.0			7.9		14.6			16.6
EBITDA		81.5			82.2		163.7			144.1
Non-cash items(1)		11.8			3.8		16.1			8.5
Acquisition, integration and reorganization charges(2)		1.7			3.8		4.1			6.2
Productivity initiatives(3)		8.5			2.7		9.8			6.8
Other adjustment items(4)		1.5			1.1		2.0			4.0
Adjusted EBITDA	$	105.0		$	93.6	$	195.7		$	169.6

(1) Includes adjustments for non-cash charges arising from stock-based compensation, interest rate swap hedge ineffectiveness, and gain/loss on disposal of assets. Stock-based compensation cost was $11.1 million and $3.9 million in the second quarter of fiscal 2018 and fiscal 2017, respectively, and $14.5 million and $8.1 million in the first six months of fiscal 2018 and fiscal 2017, respectively. In addition, this includes an increase in the LIFO reserve of $0.4 million and $0.6 million for the second quarter of fiscal 2018 and fiscal 2017, respectively, and an increase in the LIFO reserve of $1.2 million in both the first six months of fiscal 2018 and fiscal 2017.

(2) Includes professional fees and other costs related to completed and abandoned acquisitions, costs of integrating certain of our facilities, facility closing costs, and advisory fees.

(3) Consists primarily of professional fees and related expenses associated with productivity initiatives.

(4) Consists of amounts related to fuel collar derivatives, certain financing transactions, lease amendments, and franchise tax expense and other adjustments permitted by our credit agreements.

Consolidated Results of Operations

Three and six months ended December 30, 2017 compared to three and six months ended December 31, 2016

Net Sales

Net sales growth is a function of case growth, pricing (which is primarily based on product inflation/deflation), and a changing mix of customers, channels, and product categories sold. Net sales increased $259.3 million, or 6.4%, for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017 and increased $578.1 million, or 7.1%, for the first six months of fiscal 2018 compared to the first six months of fiscal 2017. The increase in net sales was primarily attributable to sales growth in Vistar, particularly in the theater, hospitality, retail, and vending channels, case growth in Performance Foodservice, particularly in the independent channel, and recent acquisitions. Net sales growth was driven by case volume growth of 4.2% and 3.9% in the second quarter and first six months of fiscal 2017, respectively, as well as an increase in selling price per case in both the second quarter and first six months of fiscal 2018 compared to the prior year periods.

Gross Profit

Gross profit increased $50.4 million, or 9.7%, for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017 and increased $93.8 million, or 9.1%, for the first six months of fiscal 2018 compared to the first six months of fiscal 2017. The increase in gross profit was primarily the result of growth in cases. Within Performance Foodservice, case growth to independent customers positively affected gross profit per case. Independent customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other customers. Also, in the second quarter and first six months of fiscal 2018, Performance Foodservice grew our Performance Brand sales, which have higher gross profit per case compared to the other brands we sell. See “—Segment Results—Performance Foodservice” below for additional discussion.

25

Operating Expenses

Operating expenses increased $52.6 million, or 11.3%, for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017 and increased $77.1 million, or 8.2%, for the first six months of fiscal 2018 compared to the first six months of fiscal 2017. The increase in operating expenses was primarily driven by the increase in case volume and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation and benefits. Operating expenses also increased in the second quarter of fiscal 2018 due to a $7.2 million increase in stock-based compensation as a result of the accelerated vesting of performance-based awards under the 2007 Option Plan and non-recurring development costs related to certain productivity initiatives the Company no longer plans to pursue. For the first six months of fiscal 2018, operating expenses also increased as a result of increases in stock-based compensation expense of $6.4 million and fuel expense of $5.6 million, partially offset by a decrease of $2.0 million in professional, legal and consulting fees.

Depreciation and amortization of intangible assets increased from $30.4 million in the second quarter of fiscal 2017 to $32.3 million in the second quarter of fiscal 2018. Depreciation and amortization of intangible assets increased from $59.9 million for the first six months of fiscal 2017 to $63.7 million for the first six months of fiscal 2018. Depreciation of fixed assets increased as a result of larger capital outlays to support our growth, as well as recent acquisitions. This increase was partially offset by decreases in amortization of intangible assets, since certain intangibles are now fully amortized compared to the prior year.

Net Income

Net income increased $55.1 million, or 240.6%, for the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017 as a result of the $59.2 million decrease in income tax expense, partially offset by the $2.2 million decrease in operating profit, a $1.5 million increase in interest expense, and a $0.4 million decrease in other income.

The decrease in operating profit was a result of the increase in operating expenses discussed above. The increase in interest expense was primarily the result of higher average borrowings and an increase in the average interest rate during the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. The $0.4 million decrease in other income related primarily to derivative activity.

The decrease in income tax expense was primarily a result of the impact of the Tax Cuts and Jobs Act (the “Act”) and the excess tax benefit associated with the vesting of stock-based compensation awards. Our effective tax rate in the second quarter of fiscal 2018 was -128.3% compared to 40.1% in the second quarter of fiscal 2017.

The Act was signed into law on December 22, 2017. Among its numerous changes to the U.S. Internal Revenue Code, the Act reduces the U.S. federal corporate rate from 35% to 21%, which will result in a blended U.S. Federal statutory rate of approximately 28% for the Company. As a result of the Act, the Company revalued its net deferred tax liability, resulting in a decrease to the net deferred tax liability of $37.4 million with a corresponding net benefit to income tax expense of $37.4 million for the three and six months ended December 30, 2017. The Company estimates that its effective tax rate for fiscal 2018 will be approximately 33%.

Additionally, in the second quarter of fiscal 2018, performance vesting criteria for certain stock-based compensation awards was met resulting in an excess tax benefit of $15.4 million for the three and six months ended December 30, 2017.

Net income increased $65.5 million, or 186.6%, for the first six months of fiscal 2018 compared to the first six months of fiscal 2017 as a result of the $52.9 million decrease in income tax expense and the $16.7 million increase in operating profit partially offset by a $3.2 million increase in interest expense and a $0.9 decrease in other income.

The increase in operating profit was a result of the increase in gross profit discussed above. The increase in interest expense was primarily the result of higher average borrowings and an increase in the average interest rate during the first six months of fiscal 2018 compared to the first six months of fiscal 2017. The $0.9 million decrease in other income related primarily to derivative activity.

The decrease in income tax expense was primarily a result of the impact of the Act and the excess tax benefit associated with the vesting of stock-based compensation awards. Our effective tax rate in the first six months of fiscal 2018 was -43.1% compared to 39.2% in the first six months of fiscal 2017.

26

Segment Results

We have three reportable segments as described above—Performance Foodservice, PFG Customized, and Vistar. Management evaluates the performance of these segments based on their respective sales growth and EBITDA. For PFG Customized, EBITDA includes certain allocated corporate expenses that are included in operating expenses. The allocated corporate expenses are determined based on a percentage of total sales. This percentage is reviewed on a periodic basis to ensure that the allocation reflects a reasonable rate of corporate expenses based on their use of corporate services.

Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of our internal logistics unit responsible for managing and allocating inbound logistics revenue and expense, as well as the operations of recent acquisitions.

In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for Performance Foodservice, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change.

The following tables set forth net sales and EBITDA by segment for the periods indicated (dollars in millions):

Net Sales

	Three Months Ended
	December 30, 2017			December 31, 2016			Change			%
Performance Foodservice	$	2,535.3		$	2,358.2		$	177.1			7.5
PFG Customized		888.2			933.5			(45.3	)		(4.9	)
Vistar		838.9			737.9			101.0			13.7
Corporate & All Other		110.6			77.9			32.7			42.0
Intersegment Eliminations		(61.9	)		(55.7	)		(6.2	)		(11.1	)
Total net sales	$	4,311.1		$	4,051.8		$	259.3			6.4
	Six Months Ended
	December 30, 2017			December 31, 2016			Change			%
Performance Foodservice	$	5,162.4		$	4,794.6		$	367.8			7.7
PFG Customized		1,784.3			1,800.8			(16.5	)		(0.9	)
Vistar		1,635.7			1,479.4			156.3			10.6
Corporate & All Other		218.7			136.8			81.9			59.9
Intersegment Eliminations		(125.1	)		(113.7	)		(11.4	)		(10.0	)
Total net sales	$	8,676.0		$	8,097.9		$	578.1			7.1

EBITDA

	Three Months Ended
	December 30, 2017			December 31, 2016			Change			%
Performance Foodservice	$	83.0		$	75.5		$	7.5			9.9
PFG Customized		5.9			6.7			(0.8	)		(11.9	)
Vistar		34.0			33.0			1.0			3.0
Corporate & All Other		(41.4	)		(33.0	)		(8.4	)		(25.5	)
Total EBITDA	$	81.5		$	82.2		$	(0.7	)		(0.9	)
	Six Months Ended
	December 30, 2017			December 31, 2016			Change			%
Performance Foodservice	$	161.8		$	148.1		$	13.7			9.3
PFG Customized		11.1			10.6			0.5			4.7
Vistar		59.8			54.8			5.0			9.1
Corporate & All Other		(69.0	)		(69.4	)		0.4			0.6
Total EBITDA	$	163.7		$	144.1		$	19.6			13.6

27

Segment Results—Performance Foodservice

Three and six months ended December 30, 2017 compared to three and six months ended December 31, 2016

Net Sales

Net sales for Performance Foodservice increased $177.1 million, or 7.5%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased $367.8 million, or 7.7%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. These increases in net sales were attributable to growth in cases sold. Case growth was driven by securing new independent customers and further penetrating existing customers. Securing new and expanded business with independent customers resulted in independent sales growth of approximately 10.4% in the second quarter and the first six months of fiscal 2018 compared to the prior year periods. For the quarter, independent sales as a percentage of total segment sales were 44.5%.

EBITDA

EBITDA for Performance Foodservice increased $7.5 million, or 9.9%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased $13.7 million, or 9.3%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. These increases were the result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization. Gross profit increased by 7.6% in the second quarter of fiscal 2018 and 7.0% in the first six months of fiscal 2018, compared to the prior year periods, as a result of an increase in cases sold, as well as an increase in the gross profit per case. The increase in gross profit per case was driven by a favorable shift in the mix of cases sold toward independent customers and Performance Brands, as well as by an increase in procurement gains. Independent business has higher gross margins than Chain customers within this segment.

Operating expenses excluding depreciation and amortization for Performance Foodservice increased by $19.4 million, or 7.0%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased by $36.4 million, or 6.5%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. Operating expenses increased as a result of an increase in case volume and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation and benefits. Operating expenses also increased as a result of increases in fuel expense of $2.1 million and $3.4 million for the second quarter and first six months of fiscal 2018, respectively. Additionally, insurance expense increased $0.9 million and $2.5 million in the second quarter of fiscal 2018 and the first six months of fiscal 2018, respectively, as compared to the prior year periods.

Depreciation and amortization of intangible assets recorded in this segment increased from $14.0 million in the second quarter of fiscal 2017 to $14.6 million in the second quarter of fiscal 2018 and increased from $27.1 million in the first six months of fiscal 2017 to $28.4 million in the first six months of fiscal 2018. These increases were the result of recent warehouse expansion and computer software projects being placed into service, partially offset by a decrease in amortization of intangible assets since certain intangibles are now fully amortized.

Segment Results—PFG Customized

Three and six months ended December 30, 2017 compared to three and six months ended December 31, 2016

Net Sales

Net sales for PFG Customized decreased $45.3 million, or 4.9%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and decreased $16.5 million, or 0.9%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. Excluding the impact of the Georgia facility that was closed in the fourth quarter of fiscal 2017, net sales would have increased $14.0 million in the second quarter of fiscal 2018 and would have increased $102.6 million in the first six months of fiscal 2018 compared to the prior year periods. These increases were the result of a favorable shift in customer mix.

EBITDA

EBITDA for PFG Customized decreased $0.8 million, or 11.9%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018. This decrease was primarily attributable to an increase in operating expenses, excluding depreciation and amortization, partially offset by an increase in gross profit. Gross profit for PFG Customized increased primarily as a result of a favorable shift in customer mix. EBITDA for this segment increased $0.5 million, or 4.7%, from the first six months of fiscal 2017 to the first six months of fiscal 2018 as a result of a favorable shift in customer mix and an increase in case volume.

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Operating expenses, excluding depreciation and amortization, decreased by $0.2 million, or 0.3%, in the second quarter of fiscal 2018 and decreased $1.2 million, or 1.2%, in the first six months of fiscal 2018, compared to the prior year periods. These decreases in operating expenses were primarily a result of the closed Georgia facility, partially offset by increases in personnel expenses and fuel expense.

Depreciation and amortization of intangible assets recorded in this segment increased from $3.6 million in the second quarter of fiscal 2017 to $3.7 million in the second quarter of fiscal 2018 and decreased from $8.8 million in the first six months of fiscal 2017 to $7.3 million in the first six months of fiscal 2018. The $1.5 million decrease in the first six months of fiscal 2018 is primarily a result of the absence of accelerated amortization of customer relationship intangible assets that was recorded in fiscal 2017.

Segment Results—Vistar

Three and six months ended December 30, 2017 compared to three and six months ended December 31, 2016

Net Sales

Net sales for Vistar increased $101.0 million, or 13.7%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased $156.3 million, or 10.6%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. These increases were driven by case sales growth in the segment’s theater, hospitality, retail, and vending channels.

EBITDA

EBITDA for Vistar increased $1.0 million, or 3.0%, from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased $5.0 million, or 9.1%, from the first six months of fiscal 2017 to the first six months of fiscal 2018. Gross profit dollar growth of $19.4 million, or 19.3%, for the second quarter of fiscal 2018 and $32.6 million, or 16.8%, for the first six months of fiscal 2018 compared to the prior year periods, was driven by an increase in the number of cases sold, as well as a favorable change in sales mix.

Operating expenses, excluding depreciation and amortization, increased $19.1million, or 28.6%, for the second quarter of fiscal 2018 and $28.3 million, or 20.5%, for the first six months of fiscal 2018 compared to the prior year periods. Operating expenses increased primarily as a result of an increase in case volume and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation and benefits. Operating expenses also increased a result of recent acquisitions and due to an increase in fuel expense.

Depreciation and amortization of intangible assets recorded in this segment increased from $6.6 million in the second quarter of fiscal 2017 to $6.9 million in the second quarter of fiscal 2018 and increased from $11.8 million in the first six months of fiscal 2017 to $13.2 million in the first six months of fiscal 2018. Amortization of intangible assets increased as a result of prior year acquisitions. Depreciation of fixed assets increased as a result of an increase in transportation equipment obtained under capital leases.

Segment Results—Corporate & All Other

Three and six months ended December 30, 2017 compared to three and six months ended December 31, 2016

Net Sales

Net sales for Corporate & All Other increased $32.7 million from the second quarter of fiscal 2017 to the second quarter of fiscal 2018 and increased $81.9 million from the first six months of fiscal 2017 to the first six months of fiscal 2018. The increase was primarily attributable to recent acquisitions and an increase in logistics services provided to our other segments.

EBITDA

EBITDA for Corporate & All Other was a negative $41.4 million for the second quarter of fiscal 2018 compared to a negative $33.0 million for the second quarter of fiscal 2017. The decrease in EBITDA in the second quarter of fiscal 2018 was driven by a $7.2 million increase in stock-based compensation as a result of the accelerated vesting of performance-based awards under the 2007 Option Plan. EBITDA in the second quarter of fiscal 2018 also included non-recurring development costs related to certain productivity initiatives the Company no longer plans to pursue.

EBITDA for Corporate & All Other was a negative $69.0 million for the first six months of fiscal 2018 compared to a negative $69.4 million for the first six months of fiscal 2017. The increase in EBITDA was primarily driven by contributions from recent acquisitions and decreases in professional, legal and consulting fees of $2.5 million and insurance expense of $2.3 million, partially offset by an increase in stock-based compensation expense of $6.4 million.

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Depreciation and amortization of intangible assets recorded in this segment increased from $6.2 million in the second quarter of fiscal 2017 to $7.1 million in the second quarter of fiscal 2018 and increased from $12.2 million in the first six months of fiscal 2017 to $14.8 million in the first six months of fiscal 2018. The increase was primarily a result of recent acquisitions.

Liquidity and Capital Resources

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating and capital leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facility. Our working capital and borrowing levels are subject to seasonal fluctuations, typically with the lowest borrowing levels in the third and fourth fiscal quarters and the highest borrowing levels occurring in the first and second fiscal quarters. We believe that our cash flows from operations and available borrowing capacity will be sufficient both to meet our anticipated cash requirements over at least the next twelve months and to maintain sufficient liquidity for normal operating purposes.

At December 30, 2017, our cash balance totaled $23.0 million, including restricted cash of $12.9 million, as compared to a cash balance totaling $21.0 million, including restricted cash of $12.9 million, at July 1, 2017. This increase in cash during the first six months of fiscal 2018 was attributable to net cash provided by financing activities of $70.8 million and net cash provided by operating activities of $32.6 million, partially offset by net cash used in investing activities of $101.4 million. We borrow under our ABL Facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.

As market conditions warrant, we and our stockholders may from time to time, depending upon market conditions, seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such repurchases may be funded by incurring new debt, including additional borrowings under our ABL Facility. In addition, depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness, make investments or acquisitions or for other purposes. Any new debt may be secured debt.

Operating Activities

Six months ended December 30, 2017 compared to Six months ended December 31, 2016

During the first six months of fiscal 2018, our operating activities provided cash flow of $32.6 million, while during the first six months of fiscal 2017 our operating activities used cash flow of $25.5 million. The increase in cash flows provided by operating activities in the first six months of fiscal 2018 compared to the first six months of fiscal 2017 was largely driven by higher operating income and improved working capital management.

Investing Activities

Cash used in investing activities totaled $101.4 million in the first six months of fiscal 2018 compared to $161.8 million in the first six months of fiscal 2017. These investments consisted primarily of payments for business acquisitions of $63.2 million for the first six months of fiscal 2018 and $82.1 million for the first six months of fiscal 2017 and capital purchases of property, plant, and equipment of $38.5 million and $79.9 million for the first six months of fiscal 2018 and the first six months of fiscal 2017, respectively. For the first six months of fiscal 2018, purchases of property, plant, and equipment primarily consisted of information technology and equipment, as well as the outlays for warehouse expansions and improvements. The following table presents the capital purchases of property, plant, and equipment by segment:

(Dollars in millions)	Six Months Ended
	December 30, 2017		December 31, 2016
Performance Foodservice	$	20.5	$	53.8
PFG Customized		6.3		4.9
Vistar		5.6		2.2
Corporate & All Other		6.1		19.0
Total capital purchases of property, plant and equipment	$	38.5	$	79.9

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As of December 30, 2017, the Company had commitments of $7.0 million for capital projects related to warehouse expansion and improvements. The Company anticipates using borrowings from the ABL Facility to fulfill these commitments.

Financing Activities

During the first six months of fiscal 2018, our financing activities provided cash flow of $70.8 million, which consisted primarily of $116.4 million in net borrowings under our ABL facility, which was partially offset by cash paid for shares withheld to cover taxes of $27.8 million and other financing activities.

During the first six months of fiscal 2017, our financing activities provided cash flow of $188.1 million, which consisted primarily of $192.8 million in net borrowings under our ABL facility, which was partially offset by cash paid for shares withheld to cover taxes of $1.1 million and other financing activities.

The following describes our financing arrangements as of December 30, 2017:

ABL Facility: PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the ABL Facility. On August 3, 2017, PFGC and Performance Food Group, Inc., each a wholly-owned subsidiary of the Company, entered into the First Amendment to the ABL Facility (the “Amendment”). The Amendment amended the ABL Facility by, among other things, (i) increasing the aggregate principal amount under the ABL Facility from $1.6 billion to $1.95 billion by increasing Tranche A Commitments by $325,000,000 and the Tranche A-1 Commitments by $25,000,000 and (ii) maintaining the level of additional commitments permitted, excluding the additional commitments effected pursuant to the Amendment, at $800,000,000 under uncommitted incremental facilities.

The ABL Facility is secured by the majority of the tangible assets of PFGC and its subsidiaries. Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the administrative agent for the benefit and on behalf of all lenders.

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee ranging from 0.25% to 0.375%.

The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility:

(Dollars in millions)	As of December 30, 2017			As of July 1, 2017
Aggregate borrowings	$	1,016.3		$	899.9
Letters of credit		123.6			105.5
Excess availability, net of lenders’ reserves of $12.2 and $11.2		577.8			594.6
Average interest rate		2.98	%		2.59	%

The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $160.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include, but are not limited to, restrictions on PFGC’s ability to incur additional indebtedness, pay dividends, create liens, make investments or specified payments, and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under such agreement may be accelerated and the rights and remedies of the lenders under such agreement available under the ABL Facility may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

Senior Notes: On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500% Senior Notes due 2024 (the “Notes”), pursuant to an indenture dated as of May 17, 2016. The Notes are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes are not guaranteed by Performance Food Group Company.

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The proceeds from the Notes were used to pay in full the remaining outstanding aggregate principal amount of loans under a Credit Agreement providing for a term loan facility and to terminate the facility; to temporarily repay a portion of the outstanding borrowings under the ABL Facility; and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes.

The Notes were issued at 100.0% of their par value. The Notes mature on June 1, 2024 and bear interest at a rate of 5.500% per year, payable semi-annually in arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes will have the right to require Performance Food Group, Inc. to make an offer to repurchase each holder’s Notes at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes at any time prior to June 1, 2019 at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on June 1, 2019, Performance Food Group, Inc. may redeem all or a part of the Notes at a redemption price equal to 102.750% of the principal amount redeemed. The redemption price decreases to 101.325% and 100.000% of the principal amount redeemed on June 1, 2020 and June 1, 2021, respectively. In addition, at any time prior to June 1, 2019, Performance Food Group, Inc. may redeem up to 40% of the Notes from the proceeds of certain equity offerings at a redemption price equal to 105.500% of the principal amount thereof, plus accrued and unpaid interest.

The indenture governing the Notes contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes to become or be declared due and payable.

The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries were restricted from distribution to Performance Food Group Company, except for approximately $302.0 million of restricted payment capacity available under such debt agreements, as of December 30, 2017. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate.

As of December 30, 2017, we were in compliance with all of the covenants under the ABL Facility and Notes.

Unsecured Subordinated Promissory Note. In connection with an acquisition, Performance Food Group, Inc. issued a $6.0 million interest only, unsecured subordinated promissory note on December 21, 2012, bearing an interest rate of 3.5%. The $6.0 million promissory note was paid off in December 2017.

Contractual Obligations

Refer to the “Contractual Cash Obligations” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the fiscal year ended July 1, 2017 for details on our contractual obligations and commitments to make specified contractual future cash payments as of July 1, 2017. Other than in connection with the Amendment described above, there have been no material changes to our specified contractual obligations through December 30, 2017.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Total Assets by Segment

Total assets by segment discussed below exclude intercompany receivables between segments.

Total assets for Performance Foodservice increased $150.5 million from $2,011.8 million as of December 31, 2016 to $2,162.3 million as of December 30, 2017. During this time period, this segment increased its accounts receivable, inventory, property, plant, and equipment, intangible assets and goodwill, of which $96.8 million was a result of acquisitions. Total assets for Performance Foodservice increased $1.1 million from $2,161.2 million as of July 1, 2017 to $2,162.3 million as of December 30, 2017. During this time period, this segment increased its inventory and property, plant, and equipment, which was partially offset by a decrease in accounts receivable and intangible assets.

Total assets for PFG Customized decreased $19.7 million from $665.6 million at December 31, 2016 to $645.9 million at December 30, 2017. Total assets for PFG Customized decreased $21.2 million from $667.1 million as of July 1, 2017 to $645.9 million as of September 30, 2017. During these time periods, this segment decreased its accounts receivable, inventory and intangible assets.

Total assets for Vistar increased $82.6 million from $671.4 million as of December 31, 2016 to $754.0 million as of December 30, 2017. Total assets for Vistar increased $99.5 million from $654.5 million as of July 1, 2017 to $754.0 million as of December 30, 2017. During these time periods, this segment increased its accounts receivable, inventory, goodwill and intangible assets, primarily due to acquisitions.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that are most important to portraying our financial position and results of operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies and estimates include those that pertain to the allowance for doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, goodwill and other intangible assets and stock-based compensation, which are described in the Company’s Form 10-K for the fiscal year ended July 1, 2017. There have been no material changes to our critical accounting policies and estimates as compared to our critical accounting policies and estimates described in the Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risks consist of interest rate risk and fuel price risk. There have been no material changes to our market risks since July 1, 2017. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in our Annual Report on Form 10-K for the fiscal year ended July 1, 2017.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), require public companies, including us, to maintain “disclosure controls and procedures,” which are defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required or necessary disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective to accomplish their objectives at a reasonable assurance level.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) under the Exchange Act), that occurred during the fiscal quarter ended December 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various allegations, claims, and legal actions arising in the ordinary course of business.

While it is impossible to determine with certainty the ultimate outcome of any of these proceedings, lawsuits, and claims, management believes that adequate provisions have been made or insurance secured for all currently pending proceedings so that the ultimate outcomes will not have a material adverse effect on our financial position. During the three months ended December 30, 2017, there have been no material changes to legal proceedings from those discussed in the Company’s Form 10-K for the fiscal year ended July 1, 2017, except as it relates to the matter discussed below.

Wilder, et al. v. Roma Food Enterprises, Inc., et al. The court granted final approval of the settlement stipulation on November 6, 2017. We funded the $1.9 million settlement on January 10, 2018, thereby ending the litigation.

Item 1A. Risk Factors

There have been no material changes to our principal risks that we believe are material to our business, results of operations, and financial condition from the risk factors previously disclosed in the Company’s Form 10-K for the fiscal year ended July 1, 2017 and Form 10-Q for the fiscal quarter ended September 30, 2017, which are accessible on the SEC’s website at www.sec.gov.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information relating to our purchases of the Company’s common stock during the second quarter of fiscal 2018.

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2017 – October 28, 2017		—		—		—		—
October 29, 2017 – November 25, 2017		—		—		—		—
November 26, 2017 – December 30, 2017		829,386	$	30.85		—		—
Total		829,386	$	30.85		—		—

(1) During the second quarter of fiscal 2018, the Company purchased 829,386 shares of the Company’s common stock in transactions unrelated to a publicly announced plan or program. These transactions consisted of acquisitions of shares of the Company’s common stock via share withholding for payroll tax obligations due from employees in connection with the delivery of shares of the Company’s common stock under our incentive plans.

Item 3: Defaults Upon Senior Securities

None

Item 4: Mine Safety Disclosures

Not applicable

Item 5: Other Information

None

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Item 6: Exhibits

Exhibit No.	Description
10.1	Letter Agreement, dated December 14, 2017, between Performance Food Group Company and Thomas G. Ondrof.
10.2	Form of Deferred Stock Unit Agreement (Non-Employee Director) under the 2015 Omnibus Incentive Plan.
31.1	CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	CFO 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.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURE

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 hereunto duly authorized.

	PERFORMANCE FOOD GROUP COMPANY (Registrant)
Dated: February 7, 2018	By:	/s/ Thomas G. Ondrof
	Name:	Thomas G. Ondrof
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Signatory)

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EX-10.1

Exhibit 10.1

December 14, 2017

Thomas G. Ondrof

Dear Tom:

In light of your notifying Performance Food Group Company (the “Company”) of your intention to retire as Chief Financial Officer of the Company, this letter agreement (the “Letter Agreement”) confirms our understanding of your role going forward with the Company. The terms of your continued service with the Company, effective as of March 1, 2018 (the “Effective Date”) are summarized below:

Title:	You will serve as Strategic Growth Leader to the Company.
Annual Base Salary:	Your base salary will be $160,000 per year, and shall be paid in accordance with the Company’s customary payroll practices.
Annual Cash Bonus:	Subject to the terms and conditions of PFG’s Management Incentive Plan, your annual cash bonus for FY 2018 will be pro-rated to reflect your annual base salary prior to the Effective Date and your revised annual base salary on and following the Effective Date. Any FY 2018 cash bonus will be paid to you at the same time annual bonuses are generally paid to other senior executives of the Company. You must be employed with the Company at the end of FY 2018 to be eligible for the PFG Management Incentive Plan for such fiscal year; provided however, that you will be eligible to receive any bonus due under the terms of the PFG Management Incentive Plan on a pro-rated basis as described above in the event you are terminated by the Company without cause prior to the end of FY 2018. PFG’s Management Incentive Plan is reviewed periodically and may be subject to change at any time without notice. You will not be eligible for an annual cash bonus for fiscal years after FY 2018.
Treatment of Equity:	Your outstanding equity awards that you have been granted pursuant to the Performance Food Group Company 2015 Omnibus Incentive Plan (the “2015 Plan”) will remain subject to the terms of the 2015 Plan and the applicable award agreements granted thereunder. As a result, you will continue to vest in such awards so long as you remain employed with the Company. The Company is under no obligation to make future equity-based grants to you under the PFG Long Term Incentive Program, including under the 2015 Plan.
Employee Benefits:	You will remain eligible to participate in the Company’s health and welfare plans and other employee benefit plans and programs, in effect from time to time, as determined by the Company so long as you continue to be employed with the Company. However, except as required by law, you will not be eligible for any paid time off or to participate in any of the Company’s severance plans, including the Senior Management Severance Pay Plan. In addition, as of the Effective Date, you will cease to be eligible for a car allowance. The benefits package is subject to change, amendment or elimination, at any time, at the discretion of the Company.

At-Will:	You understand that your employment is not for any specific period of time and is “at-will,” which means the Company may terminate your employment or you may resign at any time with or without cause, and with or without notice. Should such a separation occur, all income, benefits and grants not vested but identified in this letter agreement or any other applicable documents will immediately cease as of the day of separation, except as otherwise provided by applicable law or plan document. The at-will status of your employment cannot be changed except in a written agreement signed by the President and Chief Executive Officer of PFG and you.
Restrictive Covenants:	You acknowledge and agree that you will continue to be subject to the restrictive covenants set forth in your offer letter with the Company, dated August 19, 2016 (the “Offer Letter”), which are incorporated herein by reference.
Company Policies:	You will continue to be subject to all company policies, to the extent relevant to your activities.

If you agree with the terms and conditions set forth in this letter agreement, please indicate your acceptance by signing the enclosed Acknowledgment and Acceptance of Letter Agreement and returning the original to me. If any provision of this letter agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this letter agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this letter agreement. This letter agreement contains the entire agreement and understanding between the Company and you with respect to the subject matter and covenants contained herein (other than the Restrictive Covenants Section set forth in the Offer Letter), and no other representations, promises, agreements or understandings, written or oral, shall be of any force and effect, including the Offer Letter (other than the Restrictive Covenants Section set forth in the Offer Letter). This letter agreement may be executed in multiple original counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same document.

Should you have any questions concerning this letter agreement, please do not hesitate to contact me.

Best regards,

/s/ George Holm

George Holm

President & Chief Executive Officer

Performance Food Group Company

Enclosure:         Acknowledgment and Acceptance of Letter Agreement

ACKNOWLEDGMENT AND ACCEPTANCE

OF

LETTER AGREEMENT

I, Thomas G. Ondrof, hereby acknowledge acceptance of the terms of the attached letter agreement dated December 14, 2017 for the position of Strategic Growth Leader of the Company under the terms and conditions set forth therein.

/s/ Thomas G. Ondrof Thomas G. Ondrof December 14, 2017 Date Signed

EX-10.2

Exhibit 10.2

DEFERRED STOCK UNIT GRANT NOTICE

UNDER THE

PERFORMANCE FOOD GROUP COMPANY

2015 OMNIBUS INCENTIVE PLAN

(Non-Employee Directors)

Performance Food Group Company (the “Company”), pursuant to its 2015 Omnibus Incentive Plan (the “Plan”), hereby grants to the Participant set forth below, the number of Deferred Stock Units set forth below. The Deferred Stock Units are subject to all of the terms and conditions as set forth herein, in the Deferred Stock Unit Agreement (attached hereto or previously provided to the Participant in connection with a prior grant), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.

Participant:	[Insert Participant Name]
Date of Grant:	[Insert Grant Date]
Vesting Commencement Date:	November 10, 2017
Number of Deferred Stock Units:	[Insert No. of Deferred Stock Units Granted]
Vesting Schedule:	Provided the Participant has not undergone a Termination at the time of the applicable vesting date (or event), 100% of the Deferred Stock Units will vest on the earlier of (i) the first anniversary of the Vesting Commencement Date or (ii) the next regularly scheduled annual meeting of the stockholders of the Company following the Vesting Commencement Date; provided, however, that in the event that the Participant undergoes a Termination as a result of such Participant’s death or Disability prior to the applicable vesting date (or event), such Participant shall fully vest in such Participant’s Deferred Stock Units. In addition, in the event of a Change in Control prior to the applicable vesting date (or event), such Participant shall fully vest in such Participant’s Deferred Stock Units to the extent not then vested or previously forfeited or cancelled.

*        *         *

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS DEFERRED STOCK UNIT GRANT NOTICE, THE DEFERRED STOCK UNIT AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF DEFERRED STOCK UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS DEFERRED STOCK UNIT GRANT NOTICE, THE DEFERRED STOCK UNIT AGREEMENT AND THE PLAN.

PERFORMANCE FOOD GROUP COMPANY	PARTICIPANT
By: Brent King
Title:  Senior Vice President, General Counsel

[Signature Page to Deferred Stock Unit Award (Non-Employee Director)]

DEFERRED STOCK UNIT AGREEMENT

UNDER THE

PERFORMANCE FOOD GROUP COMPANY

2015 OMNIBUS INCENTIVE PLAN

Pursuant to the Deferred Stock Unit Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Deferred Stock Unit Agreement (this “Deferred Stock Unit Agreement”) and the Performance Food Group Company 2015 Omnibus Incentive Plan (the “Plan”), Performance Food Group Company (the “Company”) and the Participant agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.

1. Grant of Deferred Stock Units; DSU Account.

(a) Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Deferred Stock Units provided in the Grant Notice (with each Deferred Stock Unit representing an unfunded, unsecured right to receive one share of Common Stock). The Company may make one or more additional grants of Deferred Stock Units to the Participant under this Deferred Stock Unit Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Deferred Stock Unit Agreement to the extent provided therein. The Company reserves all rights with respect to the granting of additional Deferred Stock Units hereunder and makes no implied promise to grant additional Deferred Stock Units.

(b) The Company shall cause an account (the “Unit Account”) to be established and maintained on the books of the Company to record the number of Deferred Stock Units credited to the Participant under the terms of the Grant Notice and this Deferred Stock Unit Agreement.

2. Vesting. Subject to the conditions contained herein and in the Plan, the Deferred Stock Units shall vest as provided in the Grant Notice.

3. Settlement of Deferred Stock Units. The Company will deliver to the Participant, without charge, as soon as reasonably practicable (and, in any event, within 30 days) following the earliest to occur of (a) the date the Participant undergoes a “separation from service” from the Company and its Subsidiaries (as defined in Section 409A of the Code) for any reason and (b) a Change in Control; provided, that such Change in Control also constitutes a “change in ownership or effective control” for purposes of Section 409A of the Code, one share of Common Stock for each Deferred Stock Unit (as adjusted under the Plan, as applicable) which becomes vested hereunder and such vested Deferred Stock Unit shall be cancelled upon such delivery. Upon the issuance of the shares of Common Stock to the Participant, such Participant’s Unit Account shall be eliminated. Notwithstanding anything in this Deferred Stock Unit Agreement to the contrary, the Company shall have no obligation to issue or transfer any shares of Common Stock as contemplated by this Deferred Stock Unit Agreement unless and until such issuance or transfer complies with all relevant provisions of law and the requirements of any stock exchange on which the Company’s shares of Common Stock are listed for trading.

4. Company; Participant.

(a) The term “Company” as used in this Deferred Stock Unit Agreement with reference to service shall include the Company and its Subsidiaries.

(b) Whenever the word “Participant” is used in any provision of this Deferred Stock Unit Agreement under circumstances where the provision should logically be construed to apply to the

executors, the administrators, or the person or persons to whom the Deferred Stock Units may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.

5. Non-Transferability. The Deferred Stock Units may not be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by the Participant, unless such transfer is by will, by the laws of descent and distribution or other applicable law, or specifically required pursuant to a domestic relations order, and any such purported assignment, alienation, pledge, attachment, sale, transfer, or encumbrance shall be void and unenforceable against the Company or any other member of the Company Group; provided, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer, or encumbrance.

6. No Rights as Stockholder; Dividend Equivalents. The Participant or a permitted transferee of the Deferred Stock Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a Deferred Stock Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof. The Deferred Stock Units shall be entitled to be credited with dividend equivalent payments upon the payment by the Company of dividends on shares of Common Stock. Such dividend equivalents will be provided in additional Deferred Stock Units having a Fair Market Value on the date that the underlying Deferred Stock Units are settled in accordance with Section 3 above equal to the amount of such applicable dividends, and shall be payable at the same time as the underlying Deferred Stock Units to which such dividends relate are settled in accordance with Section 3 above. In the event that any Deferred Stock Unit is forfeited by its terms, the Participant shall have no right to dividend equivalent payments in respect of such forfeited Deferred Stock Units.

7. Tax Withholding. The provisions of Section 14(d)(i) of the Plan are incorporated herein by reference and made a part hereof. The Participant shall satisfy such Participant’s withholding liability, if any, referred to in Section 14(d)(i) of the Plan by having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the settlement of the Award a number of shares with a Fair Market Value, on the date that the Deferred Stock Units are settled, equal to such withholding liability; provided, that the number of such shares may not have a Fair Market Value greater than the minimum required statutory withholding liability unless determined by the Committee not to result in adverse accounting consequences. Notwithstanding the foregoing, the Participant acknowledges and agrees that to the extent consistent with applicable law and the Participant’s status as an independent consultant for U.S. federal income tax purposes, the Company does not intend to withhold any amounts as federal income tax withholdings under any other state or federal laws, and the Participant hereby agrees to make adequate provision for any sums required to satisfy all applicable federal, state, local and foreign tax withholding obligations of the Company which may arise in connection with the grant of Deferred Stock Units.

8. Notice. Every notice or other communication relating to this Deferred Stock Unit Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Company’s General Counsel, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records. Notwithstanding the above, all notices and

communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.

9. No Right to Continued Service. This Deferred Stock Unit Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company.

10. Binding Effect. This Deferred Stock Unit Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

11. Waiver and Amendments. Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Deferred Stock Unit Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

12. Governing Law. This Deferred Stock Unit Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Deferred Stock Unit Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Deferred Stock Unit Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.

13. Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Deferred Stock Unit Agreement (including the Grant Notice), the Plan shall govern and control.

14. Section 409A.

(a) It is intended that the Deferred Stock Units granted hereunder shall be compliant with Section 409A of the Code and the regulations promulgated thereunder and shall be interpreted as such, including, without limitation, by delaying the issuance of shares of Common Stock contemplated hereunder.

(b) Notwithstanding anything in this Deferred Stock Unit Agreement to the contrary, if a Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments in respect of any Deferred Stock Unit that is “deferred compensation” subject to Section 409A of the Code and which would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death. Following any applicable six month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, George L. Holm, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 30, 2017 of Performance Food Group Company (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: February 7, 2018

/s/ George L. Holm

George L. Holm

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thomas G. Ondrof, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 30, 2017 of Performance Food Group Company (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: February 7, 2018

/s/ Thomas G. Ondrof

Thomas G. Ondrof

Executive Vice President and Chief Financial Officer

Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Performance Food Group Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George L. Holm, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 7, 2018

/s/ George L. Holm

George L. Holm

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Performance Food Group Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas G. Ondrof, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 7, 2018

/s/ Thomas G. Ondrof

Thomas G. Ondrof

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 30, 2017	Feb. 01, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 30, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	PFGC
Entity Registrant Name	Performance Food Group Company
Entity Central Index Key	0001618673
Current Fiscal Year End Date	--07-01
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		104,000,540

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Dec. 30, 2017	Jul. 01, 2017
Current assets:
Cash		$ 10.1	$ 8.1
Accounts receivable, less allowances of $22.0 and $17.0		1,034.9	1,028.5
Inventories, net		1,043.4	1,013.3
Prepaid expenses and other current assets		51.6	35.0
Total current assets		2,140.0	2,084.9
Goodwill		740.1	718.6
Other intangible assets, net		206.8	201.1
Property, plant and equipment, net		734.9	740.7
Restricted cash	[1]	12.9	12.9
Other assets		47.9	45.9
Total assets		3,882.6	3,804.1
Current liabilities:
Outstanding checks in excess of deposits		181.4	218.2
Trade accounts payable		886.9	907.1
Accrued expenses		204.8	246.0
Long-term debt-current installments			5.8
Capital lease obligations-current installments		7.0	5.9
Derivative liabilities			0.3
Total current liabilities		1,280.1	1,383.3
Long-term debt		1,358.7	1,241.9
Deferred income tax liability, net		66.0	103.0
Capital lease obligations, excluding current installments		47.4	44.0
Other long-term liabilities		114.9	106.4
Total liabilities		2,867.1	2,878.6
Commitments and contingencies (Note 9)
Shareholders' equity:
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 102.3 million shares issued and outstanding as of December 30, 2017; 1.0 billion shares authorized, 100.8 million shares issued and outstanding as of July 1, 2017		1.0	1.0
Additional paid-in capital		842.9	855.5
Accumulated other comprehensive income, net of tax expense of $2.2 and $1.5		4.4	2.4
Retained earnings		167.2	66.6
Total shareholders' equity		1,015.5	925.5
Total liabilities and shareholders' equity		$ 3,882.6	$ 3,804.1

[1] Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company's workers' compensation and liability claims.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 22.0	$ 17.0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	102,300,000	100,800,000
Common stock, shares outstanding	102,300,000	100,800,000
Accumulated other comprehensive income, tax expense	$ 2.2	$ 1.5

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net sales	$ 4,311.1	$ 4,051.8	$ 8,676.0	$ 8,097.9
Cost of goods sold	3,743.5	3,534.6	7,553.7	7,069.4
Gross profit	567.6	517.2	1,122.3	1,028.5
Operating expenses	518.5	465.9	1,022.7	945.6
Operating profit	49.1	51.3	99.6	82.9
Other expense, net:
Interest expense	15.1	13.6	29.7	26.5
Other, net	(0.1)	(0.5)	(0.4)	(1.3)
Other expense, net	15.0	13.1	29.3	25.2
Income before taxes	34.1	38.2	70.3	57.7
Income tax (benefit) expense	(43.9)	15.3	(30.3)	22.6
Net income	$ 78.0	$ 22.9	$ 100.6	$ 35.1
Weighted-average common shares outstanding:
Basic	101.4	100.1	101.2	100.0
Diluted	104.5	102.7	104.5	102.5
Earnings per common share:
Basic	$ 0.77	$ 0.23	$ 0.99	$ 0.35
Diluted	$ 0.75	$ 0.22	$ 0.96	$ 0.34

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 78.0	$ 22.9	$ 100.6	$ 35.1
Interest rate swaps:
Change in fair value, net of tax	1.8	5.0	1.8	6.0
Reclassification adjustment, net of tax	0.2	0.7	0.2	1.5
Other comprehensive income	2.0	5.7	2.0	7.5
Total comprehensive income	$ 80.0	$ 28.6	$ 102.6	$ 42.6

XML

Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions		Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	(Accumulated Deficit) Retained Earnings [Member]
Balance Beginning at Jul. 02, 2016		$ 802.8	$ 1.0	$ 836.8	$ (5.8)	$ (29.2)
Balance Beginning, shares at Jul. 02, 2016			99.9
Issuance of common stock under stock-based compensation plans		(0.3)		(0.3)
Issuance of common stock under stock-based compensation plans, shares			0.2
Net income		35.1				35.1
Interest rate swaps		7.5			7.5
Stock-based compensation expense		8.1		8.1
Change in accounting principle	[1]	0.4		0.9		(0.5)
Balance Ending at Dec. 31, 2016		853.6	$ 1.0	845.5	1.7	5.4
Balance Ending, shares at Dec. 31, 2016			100.1
Balance Beginning at Jul. 01, 2017		$ 925.5	$ 1.0	855.5	2.4	66.6
Balance Beginning, shares at Jul. 01, 2017		100.8	100.8
Issuance of common stock under stock-based compensation plans		$ (27.1)		(27.1)
Issuance of common stock under stock-based compensation plans, shares			1.5
Net income		100.6				100.6
Interest rate swaps		2.0			2.0
Stock-based compensation expense		14.5		14.5
Balance Ending at Dec. 30, 2017		$ 1,015.5	$ 1.0	$ 842.9	$ 4.4	$ 167.2
Balance Ending, shares at Dec. 30, 2017		102.3	102.3

[1] As of the beginning of fiscal 2017, the Company elected to early adopt the provisions of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company has made a policy election to account for forfeitures as they occur and recorded a cumulative-effect adjustment to Accumulated Deficit as of the date of adoption.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income	$ 100.6	$ 35.1
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation	49.1	43.3
Amortization of intangible assets	14.6	16.6
Amortization of deferred financing costs and other	2.4	2.2
Provision for losses on accounts receivables	7.5	6.8
Expense related to modification of debt		0.1
Stock-based compensation expense	14.5	8.1
Deferred income tax benefit	(37.8)	(4.0)
Change in fair value of derivative assets and liabilities	(0.2)	(1.8)
Other	7.3	1.1
Changes in operating assets and liabilities, net
Accounts receivable	(1.2)	(15.1)
Inventories	(14.3)	(54.4)
Prepaid expenses and other assets	(15.0)	12.5
Trade accounts payable	(29.4)	(68.2)
Outstanding checks in excess of deposits	(36.8)	29.7
Accrued expenses and other liabilities	(28.7)	(37.5)
Net cash provided by (used in) operating activities	32.6	(25.5)
Cash flows from investing activities:
Purchases of property, plant and equipment	(38.5)	(79.9)
Net cash paid for acquisitions	(63.2)	(82.1)
Proceeds from sale of property, plant and equipment	0.3	0.2
Net cash used in investing activities	(101.4)	(161.8)
Cash flows from financing activities:
Net borrowings under ABL Facility	116.4	192.8
Payment of Promissory Note	(6.0)
Cash paid for shares withheld to cover taxes	(27.8)	(1.1)
Cash paid for acquisitions	(7.4)	(0.8)
Other financing activities	(4.4)	(2.8)
Net cash provided by financing activities	70.8	188.1
Net increase in cash and restricted cash	2.0	0.8
Cash and restricted cash, beginning of period	21.0	23.8	[1]
Cash and restricted cash, end of period	23.0	24.6	[1]
Purchases of property, plant and equipment, financed	3.2
Debt assumed through new capital lease obligations	7.7	19.6
Disposal of property, plant and equipment under sale-leaseback transaction		3.2
Interest	28.1	23.2
Income taxes, net of refunds	$ 25.1	$ 10.2

[1] The consolidated statement of cash flows for the six months ended December 31, 2016 has been adjusted to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The consolidated statements of cash flows explain the change during the periods in the total of cash and restricted cash. Therefore, restricted cash activity is included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Refer to Note 3 for further discussion.

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions		Dec. 30, 2017	Jul. 01, 2017	Dec. 31, 2016	[2]	Jul. 02, 2016	[2]
Statement of Cash Flows [Abstract]
Cash		$ 10.1	$ 8.1
Restricted cash	[1]	12.9	12.9
Total cash and restricted cash		$ 23.0	$ 21.0	$ 24.6		$ 23.8

[1] Restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company's workers' compensation and liability claims.

[2] The consolidated statement of cash flows for the six months ended December 31, 2016 has been adjusted to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The consolidated statements of cash flows explain the change during the periods in the total of cash and restricted cash. Therefore, restricted cash activity is included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Refer to Note 3 for further discussion.

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Summary of Business Activities

6 Months Ended

Dec. 30, 2017

Accounting Policies [Abstract]

Summary of Business Activities

1. Summary of Business Activities

Business Overview

Performance Food Group Company, through its subsidiaries, markets and distributes national and company-branded food and food-related products to customer locations across the United States. The Company serves both of the major customer types in the restaurant industry: (i) independent, or “Street” customers, and (ii) multi-unit, or “Chain” customers, which include regional and national family and casual dining restaurant chains, fast casual chains, and quick-service restaurants. The Company also serves schools, healthcare facilities, business and industry locations, and other institutional customers.

Secondary Offerings

In September 2017, November 2017 and December 2017 Wellspring Capital Management (“Wellspring”) sold an aggregate of 16,272,914 shares of the Company’s common stock in transactions registered under the Securities Act. The Company did not receive any proceeds from these sales. As a result of these sales, Wellspring no longer beneficially owns any shares of the Company’s common stock.

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Basis of Presentation

6 Months Ended

Dec. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

2. Basis of Presentation

The consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 1, 2017 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form10-K for the fiscal year ended July 1, 2017 (the “Form 10-K”). The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, impairment testing of goodwill and other intangible assets, acquisition accounting, reserves for claims and recoveries under insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, determination of useful lives of tangible and intangible assets, and income taxes. Actual results could differ from these estimates.

The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements.

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Recently Issued Accounting Pronouncements

6 Months Ended

Dec. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Pronouncements

3. Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-11,

Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU requires an entity to measure most inventory at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The ASU is effective for public companies prospectively for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this ASU as of the beginning of fiscal 2018 and concluded that it does not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period using the retrospective transition method. The Company elected to early adopt ASU 2016-15 as of the beginning of fiscal 2018. Based on our review of the ASU, the Company concluded that it has historically classified the specified cash receipts and cash payments in accordance with the clarified guidance. This ASU did not have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The ASU requires a retrospective transition method for each period presented. The Company elected to early adopt ASU 2016-18 as of the beginning of fiscal 2018. The statements of cash flows for the six months ended December 30, 2017 and December 31, 2016 include restricted cash with cash when reconciling thebeginning-of-period and end-of-period total amounts.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test, which is performed by estimating the fair value of individual assets and liabilities of the reporting unit to calculate the implied fair value of goodwill. Instead, an entity will record a goodwill impairment charge based on the excess of a reporting unit’s carrying value over its estimated fair value, not to exceed the carrying amount of goodwill. This ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted. The Company elected to early adopt ASU 2017-04 as of the beginning of fiscal 2018. Upon adoption of the ASU, the Company concluded that it did not have a material impact on its consolidated financial statements. The Company will apply ASU 2017-04 on a prospective basis when analyzing goodwill impairment.

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This Update is a comprehensive new revenue recognition model that requires a company to recognize revenue that represents the transfer of promised goods or services to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services.

Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies may either use a full retrospective or modified retrospective approach for adoption of Topic 606. The Company will adopt the guidance in fiscal 2019 and currently plans to implement the new standard using the modified retrospective approach. However, our method is subject to change as we finalize our adoption approach for the new standard. The Company has conducted a preliminary assessment and anticipates that the timing of recognition of revenue to be substantially unchanged under the new standard. The amended guidance also requires additional quantitative and qualitative disclosures, which the Company believes will be significant to the consolidated financial statements. The Company is in the process of designing and implementing relevant controls related to adoption of the new standard.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU is a comprehensive new lease accounting model that requires companies to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. For public entities, the ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt the guidance in fiscal 2020. Companies are required to recognize and measure leases at the beginning of the earliest period presented in its financial statements using a modified retrospective approach. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will have a significant impact on our consolidated financial statements. Information about our undiscounted future lease payments and the timing of those payments is in Note 12. Leases in our Form 10-K.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Companies are required to apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. The Company is in the process of evaluating the impact of this ASU on our future consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business in order to assist companies in the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amended guidance also removes the existing evaluation of a market participant’s ability to replace missing elements and narrows the definition of output to achieve consistency with other topics. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and should be applied on a prospective basis. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company’s financial statements at the date of adoption.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU expands hedge accounting for both financial and nonfinancial risk components to better align hedge accounting with a company’s risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective basis with a cumulative-effect adjustment to the Consolidated Balance Sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will not have a material impact on its consolidated financial statements.

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Business Combinations

6 Months Ended

Dec. 30, 2017

Business Combinations [Abstract]

Business Combinations

4. Business Combinations

During the first six months of fiscal 2018, the Company paid cash of $64.9 million for an acquisition and during the first six months of fiscal 2017, the Company paid cash of $82.8 million for four acquisitions. These acquisitions did not materially affect the Company’s results of operations.

The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2018 acquisition.

(In millions)	Fiscal 2018
Net working capital	$	21.4
Goodwill		21.1
Other intangible assets		20.6
Property, plant and equipment		1.8
Total purchase price	$	64.9

The goodwill is a result of expected synergies from combined operations of the acquisition and the Company. The following table presents the changes in the carrying amount of goodwill:

(In millions)	Performance Foodservice		PFG Customized		Vistar		Corporate and Other		Total
Balance as of July 1, 2017	$	428.2	$	166.5	$	64.9	$	59.0	$	718.6
Acquisitions - current year		—		—		21.1		—		21.1
Adjustments related to prior year acquisitions		0.1		—		—		0.3		0.4
Balance as of December 30, 2017	$	428.3	$	166.5	$	86.0	$	59.3	$	740.1

The adjustments related to prior year acquisitions are the result of net working capital adjustments.

Subsequent to December 30, 2017, the Company paid $6.6 million for an acquisition. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed.

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Debt

6 Months Ended

Dec. 30, 2017

Debt Disclosure [Abstract]

Debt

5. Debt

The Company is a holding company and conducts its operations through its subsidiaries, which have incurred or guaranteed indebtedness as described below.

Debt consisted of the following:

(In millions)	As of December 30, 2017			As of July 1, 2017
ABL	$	1,016.3		$	899.9
5.500% Notes due 2024		350.0			350.0
Promissory Note		—			6.0
Less: Original issue discount and deferred financing costs		(7.6	)		(8.2	)
Long-term debt		1,358.7			1,247.7
Capital and finance lease obligations		54.4			49.9
Total debt		1,413.1			1,297.6
Less: current installments		(7.0	)		(11.7	)
Total debt, excluding current installments	$	1,406.1		$	1,285.9

ABL Facility

PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the Second Amended and Restated Credit Agreement dated February 1, 2016, as amended by the First Amendment to Second Amended and Restated Credit Agreement dated August 3, 2017 (the “ABL Facility”). The ABL Facility has an aggregate principal amount of $1.95 billion and matures February 2021. The ABL Facility is secured by the majority of the tangible assets of PFGC and its subsidiaries. Performance Food Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries).

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee ranging from 0.25% to 0.375%.

The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility:

(Dollars in millions)	As of December 30, 2017			As of July 1, 2017
Aggregate borrowings	$	1,016.3		$	899.9
Letters of credit		123.6			105.5
Excess availability, net of lenders’ reserves of $12.2 and $11.2		577.8			594.6
Average interest rate		2.98	%		2.59	%

Senior Notes

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500% Senior Notes due 2024 (the “Notes”), pursuant to an indenture dated as of May 17, 2016. The Notes are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes are not guaranteed by Performance Food Group Company.

The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net assets of PFGC and its subsidiaries are restricted from distribution to Performance Food Group Company, except for approximately $302.0 million of restricted payment capacity available under such debt agreements, as of December 30, 2017. Such minimum estimated restricted payment capacity is calculated based on the most restrictive of our debt agreements and may fluctuate from period to period, which fluctuations may be material. Our restricted payment capacity under other debt instruments to which the Company is subject may be materially higher than the foregoing estimate.

Unsecured Subordinated Promissory Note

In connection with an acquisition, Performance Food Group, Inc. issued a $6.0 million interest only, unsecured subordinated promissory note on December 21, 2012. The $6.0 million promissory note was paid off in December 2017.

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Derivatives and Hedging Activities

6 Months Ended

Dec. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

6. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and diesel fuel costs. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and payments related to the Company’s borrowings and diesel fuel purchases.

The effective portion of changes in the fair value of derivatives that are both designated and qualify as cash flow hedges is recorded in other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction occurs. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. Since the Company has a substantial portion of its debt in variable-rate instruments, it accomplishes this objective with interest rate swaps. These swaps are designated as cash flow hedges and involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. All of the Company’s interest rate swaps are designated and qualify as cash flow hedges.

As of December 30, 2017, Performance Food Group, Inc. had eight interest rate swaps with a combined $650 million notional amount. The following table summarizes the outstanding Swap Agreements as of December 30, 2017 (in millions):

Effective Date	Maturity Date		Notional Amount		Fixed Rate Swapped
August 9, 2013		August 9, 2018	$	200.0		1.51	%
June 30, 2017		June 30, 2019		50.0		1.13	%
June 30, 2017		June 30, 2020		50.0		1.23	%
June 30, 2017		June 30, 2020		50.0		1.25	%
June 30, 2017		June 30, 2020		50.0		1.26	%
August 9, 2018		August 9, 2021		75.0		1.21	%
August 9, 2018		August 9, 2021		75.0		1.20	%
June 30, 2020		December 31, 2021		100.0		2.16	%

Hedges of Forecasted Diesel Fuel Purchases

From time to time, Performance Food Group, Inc. enters into costless collar arrangements to manage its exposure to variability in cash flows expected to be paid for its forecasted purchases of diesel fuel. As of December 30, 2017, Performance Food Group, Inc. was a party to two such arrangements, with an aggregate 4.5 million gallon original notional amount. The 4.5 million gallon forecasted purchases of diesel fuel are expected to be made between January 1, 2018 and June 30, 2018.

The fuel collar instruments do not qualify for hedge accounting. Accordingly, the derivative instruments are recorded as an asset or liability on the balance sheet at fair value and any changes in fair value are recorded in the period of change as unrealized gains or losses on fuel hedging instruments and included in Other, net in the accompanying consolidated statements of operations.

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Fair Value of Financial Instruments

6 Months Ended

Dec. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

The carrying values of cash, accounts receivable, outstanding checks in excess of deposits, trade accounts payable, and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of $1,358.7 million and $1,247.7 million, is $1,378.1 million and $1,258.3 million at December 30, 2017 and July 1, 2017, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date, and is considered a Level 2 measurement.

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Income Taxes

6 Months Ended

Dec. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The determination of the Company’s overall effective tax rate requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The effective tax rate reflects the income earned and taxed in various United States federal and state jurisdictions. Tax law changes, increases and decreases in temporary and permanent differences between book and tax items, tax credits and the Company’s change in income in each jurisdiction all affect the overall effective tax rate. It is the Company’s practice to recognize interest and penalties related to uncertain tax positions in income tax expense.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” (the “Act”) was signed into law. The Act makes broad and complex changes to the U.S. Internal Revenue Code including, but not limited to: reducing the U.S. federal corporate tax rate from 35% to 21%; creating a new limitation on deductible interest expense; repealing the domestic production activity deduction, providing for bonus depreciation that will allow for full expensing of certain qualified property; and limiting other deductions.

The Company’s net deferred tax liability of $103.0 million as of July 1, 2017 was determined using the federal corporate tax rate of 35% prior to the passage of the Act. The Act reduces the federal corporate tax rate to 21%, effective January 1, 2018. Consequently, we have recorded a $10.2 million decrease in deferred tax assets and a $47.6 million decrease in deferred tax liabilities with a corresponding net benefit to deferred income tax expense of $37.4 million for the three and six months ended December 30, 2017.

The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under FASB ASC 740 – Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Act. The Company has not identified any items for which the income tax effects of the Act have not been substantially completed.

The Company’s effective tax rate was -128.3% for the three months ended December 30, 2017 and 40.1% for the three months ended December 31, 2016. The Company’s effective tax rate was -43.1% for the six months ended December 30, 2017 and 39.2% for the six months ended December 31, 2016. As a result in the reduction in the federal corporate income tax rate to 21% from 35% under the Act, the Company has a blended statutory rate of 28% for the three and six months ended December 30, 2017. For the three and six months ended December 30, 2016, the statutory rate was 35%. Additionally, during the three months ended December 30, 2017, performance vesting criteria for certain stock-based compensation awards was met resulting in a significant permanent tax deduction difference. The impact to the provision for stock-based compensation and the impact of the reduction in tax rate under the Act are summarized as follows:

(Dollars in millions)	Three Months Ended December 30, 2017						Six Months Ended December 30, 2017
	Income Tax Expense			Effective Tax Rate			Income Tax Expense			Effective Tax Rate
Income tax benefit, reported	$	(43.9	)		-128.3	%	$	(30.3	)		-43.1	%
Revaluation of net deferred income tax liability		37.4			109.6	%		37.4			53.3	%
Stock-based compensation – performance vesting		15.4			45.2	%		15.4			21.9	%
Impact of rate reduction on first quarter fiscal 2018 income		2.5			7.4	%		—			—
Income tax expense, excluding benefits	$	11.4			33.9	%	$	22.5			32.1	%

As of December 30, 2017 and July 1, 2017, the Company had net deferred tax assets of $28.4 million and $43.1 million, respectively, and deferred tax liabilities of $94.4 million and $146.1 million, respectively. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.

The Company records a liability for Uncertain Tax Positions in accordance with FASB ASC 740-10-25, Income Taxes – General - Recognition. As of December 30, 2017 and July 1, 2017, the Company had approximately $1.4 million and $1.3 million of unrecognized tax benefits, respectively. It is reasonably possible that a decrease of approximately $0.1 million in the balance of unrecognized tax benefits may occur within the next twelve months because of statute of limitations expirations, that, if recognized, would affect the effective tax rate.

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Commitments and Contingencies

6 Months Ended

Dec. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Purchase Obligations

The Company had outstanding contracts and purchase orders for capital projects and services totaling $10.1 million at December 30, 2017. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 30, 2017. Subsequent to December 30, 2017, the Company entered into an additional contract totaling $8.8 million.

Guarantees

Subsidiaries of the Company have entered into numerous operating leases, including leases of buildings, equipment, tractors, and trailers. Certain of the leases for tractors, trailers, and other vehicles and equipment, provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 7% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 4 to 8 years and expiration dates ranging from 2018 to 2025. As of December 30, 2017, the undiscounted maximum amount of potential future payments for lease guarantees totaled approximately $28.4 million, which would be mitigated by the fair value of the leased assets at lease expiration. The assessment as to whether it is probable that subsidiaries of the Company will be required to make payments under the terms of the guarantees is based upon their actual and expected loss experience. Consistent with the requirements of FASB ASC 460-10-50, Guarantees-Overall-Disclosure, the Company has recorded $0.2 million of the potential future guarantee payments on its consolidated balance sheet as of December 30, 2017.

The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products.

Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets.

Litigation

The Company is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss arising from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When losses are probable and reasonably estimable, they have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe that the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the Company. However, the final results of legal proceedings cannot be predicted with certainty and, if the Company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the Company’s current estimates of the range of potential losses, the Company’s consolidated financial position or results of operations could be materially adversely affected in future periods.

U.S. Equal Employment Opportunity Commission Lawsuit. In March 2009, the Baltimore Equal Employment Opportunity Commission, or the “EEOC,” Field Office served us with company-wide (excluding, however, our Vistar and Roma Foodservice operations) subpoenas relating to alleged violations of the Equal Pay Act and Title VII of the Civil Rights Act (“Title VII”), seeking certain information from January 1, 2004 to a specified date in the first fiscal quarter of 2009. In August 2009, the EEOC moved to enforce the subpoenas in federal court in Maryland, and we opposed the motion. In February 2010, the court ruled that the subpoena related to the Equal Pay Act investigation was enforceable company-wide but on a narrower scope of data than the original subpoena sought (the court ruled that the subpoena was applicable to the transportation, logistics, and warehouse functions of our broadline distribution centers only and not to our PFG Customized distribution centers). We cooperated with the EEOC on the production of information. In September 2011, the EEOC notified us that the EEOC was terminating the investigation into alleged violations of the Equal Pay Act. In determinations issued in September 2012 by the EEOC with respect to the charges on which the EEOC had based its company-wide investigation, the EEOC concluded that we engaged in a pattern of denying hiring and promotion to a class of female applicants and employees into certain positions within the transportation, logistics, and warehouse functions within our broadline division in violation of Title VII. In June 2013, the EEOC filed suit in federal court in Baltimore against us. The litigation concerns two issues: (1) whether we unlawfully engaged in an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether we unlawfully failed to promote one of the three individuals who filed charges with the EEOC because of her gender. The EEOC seeks the following relief in the lawsuit: (1) to permanently enjoin us from denying employment to female applicants because of their sex and denying promotions to female employees because of their sex; (2) a court order mandating that we institute and carry out policies, procedures, practices and programs which provide equal employment opportunities for females; (3) back pay with prejudgment interest and compensatory damages for a former female employee and an alleged class of aggrieved female applicants; (4) punitive damages; and (5) costs. The court bifurcated the litigation into two phases. In the first phase, the jury will decide whether we engaged in a gender-based pattern and practice of discrimination and the individual claims of one former employee. If the EEOC prevails on all counts in the first phase, no monetary relief would be awarded, except possibly for the single individual’s claims, which would be immaterial. The remaining individual claims would then be tried in the second phase. At this stage in the proceedings, the Company cannot estimate either the number of individual trials that could occur in the second phase of the litigation or the value of those claims. For these reasons, we are unable to estimate any potential loss or range of loss in the event of an adverse finding in the first and second phases of the litigation. The parties are engaged in discovery. We intend to vigorously defend ourselves.

Wilder, et al. v. Roma Food Enterprises, Inc., et al. The court granted final approval of the settlement stipulation on November 6, 2017. The Company funded the $1.9 million settlement on January 10, 2018, thereby ending the litigation.

Tax Liabilities

The Company is subject to customary audits by authorities in the jurisdictions where it conducts business in the United States, which may result in assessments of additional taxes.

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Related-Party Transactions

6 Months Ended

Dec. 30, 2017

Related Party Transactions [Abstract]

Related-Party Transactions

10. Related-Party Transactions

Transaction and Advisory Fee Agreement

The Company was a party to an advisory fee agreement pursuant to which affiliates of The Blackstone Group L.P. and Wellspring provided management certain strategic and structuring advice and certain monitoring, advising, and consulting services to the Company. The advisory fee agreement provided for the payment by the Company of an annual advisory fee and the reimbursement of out of pocket expenses. In fiscal 2018 the Company will pay a total of $3.0 million related to this agreement, of which $1.5 million was paid in the second quarter of fiscal 2018 and during the six months ended December 30, 2017 and $1.5 million will be paid in the third quarter of fiscal 2018. The payments made under this agreement totaled $5.5 million during the six months ended December 31, 2016.

Under its terms, this agreement terminated on October 6, 2017.

Other

The Company participates in and has an equity method investment in a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was $4.7 million as of December 30, 2017 and $4.6 million as of July 1, 2017. During the three-month periods ended December 30, 2017 and December 31, 2016, the Company recorded purchases of $177.5 million and $176.6 million, respectively, through the purchasing alliance. During the six-month periods ended December 30, 2017 and December 31, 2016, the Company recorded purchases of $390.4 million and $387.0 million, respectively, through the purchasing alliance.

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Earnings Per Share

6 Months Ended

Dec. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted EPS, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the proceeds from the exercise of stock options under the treasury stock method. Potential common shares of 0.7 million and 0.7 million for the three and six months ended December 30, 2017, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. Potential common shares of 1.2 million and 1.0 million for the three and six months ended December 31, 2016, respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive.

A reconciliation of the numerators and denominators for the basic and diluted EPS computations is as follows:

(In millions, except per share amounts)	Three months ended December 30, 2017		Three months ended December 31, 2016		Six months ended December 30, 2017		Six months ended December 31, 2016
Numerator:
Net income	$	78.0	$	22.9	$	100.6	$	35.1
Denominator:
Weighted-average common shares outstanding		101.4		100.1		101.2		100.0
Dilutive effect of share-based awards		3.1		2.6		3.3		2.5
Weighted-average dilutive shares outstanding		104.5		102.7		104.5		102.5
Basic earnings per share	$	0.77	$	0.23	$	0.99	$	0.35
Diluted earnings per share	$	0.75	$	0.22	$	0.96	$	0.34

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Segment Information

6 Months Ended

Dec. 30, 2017

Segment Reporting [Abstract]

Segment Information

12. Segment Information

The Company has three reportable segments, as defined by ASC 280 Segment Reporting, related to disclosures about segments of an enterprise. The Performance Foodservice (“PFS”) segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. The PFG Customized segment principally serves the family and casual dining channel but also serves fine dining, and fast casual restaurant chains. The Vistar segment distributes candy, snack, beverage, and other products to customers in the vending, office coffee services, theater, retail, and other channels. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA. For PFG Customized, EBITDA includes certain allocated corporate charges that are included in operating expenses. The allocated corporate charges are determined based on a percentage of total sales. This percentage is reviewed on a periodic basis to ensure that the segment is allocated a reasonable rate of corporate expenses based on their use of corporate services.

Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense, as well as the operations of certain recent acquisitions.

In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for PFS, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change.

(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the three months ended December 30, 2017
Net external sales	$	2,532.8	$	888.1	$	838.3	$	51.9		$	—		$	4,311.1
Inter-segment sales		2.5		0.1		0.6		58.7			(61.9	)		—
Total sales		2,535.3		888.2		838.9		110.6			(61.9	)		4,311.1
EBITDA		83.0		5.9		34.0		(41.4	)		—			81.5
Depreciation and amortization		14.6		3.7		6.9		7.1			—			32.3
Capital expenditures		9.3		4.1		5.3		3.3			—			22.0
For the three months ended December 31, 2016
Net external sales	$	2,356.8	$	933.4	$	737.4	$	24.2		$	—		$	4,051.8
Inter-segment sales		1.4		0.1		0.5		53.7			(55.7	)		—
Total sales		2,358.2		933.5		737.9		77.9			(55.7	)		4,051.8
EBITDA		75.5		6.7		33.0		(33.0	)		—			82.2
Depreciation and amortization		14.0		3.6		6.6		6.2			—			30.4
Capital expenditures		34.1		2.7		0.8		7.5			—			45.1
(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the six months ended December 30, 2017
Net external sales	$	5,157.3	$	1,784.1	$	1,634.5	$	100.1		$	—		$	8,676.0
Inter-segment sales		5.1		0.2		1.2		118.6			(125.1	)		—
Total sales		5,162.4		1,784.3		1,635.7		218.7			(125.1	)		8,676.0
EBITDA		161.8		11.1		59.8		(69.0	)		—			163.7
Depreciation and amortization		28.4		7.3		13.2		14.8			—			63.7
Capital expenditures		20.5		6.3		5.6		6.1			—			38.5
For the six months ended December 31, 2016
Net external sales	$	4,791.5	$	1,800.1	$	1,478.2	$	28.1		$	—		$	8,097.9
Inter-segment sales		3.1		0.7		1.2		108.7			(113.7	)		—
Total sales		4,794.6		1,800.8		1,479.4		136.8			(113.7	)		8,097.9
EBITDA		148.1		10.6		54.8		(69.4	)		—			144.1
Depreciation and amortization		27.1		8.8		11.8		12.2			—			59.9
Capital expenditures		53.8		4.9		2.2		19.0			—			79.9

Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:

(In millions)	As of December 30, 2017		As of July 1, 2017
PFS	$	2,162.3	$	2,161.2
PFG Customized		645.9		667.1
Vistar		754.0		654.5
Corporate & All Other		320.4		321.3
Total assets	$	3,882.6	$	3,804.1

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Stock-based Compensation

6 Months Ended

Dec. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

13. Stock-based Compensation

Performance Food Group Company provides compensation benefits to employees and non-employee directors under several share based payment arrangements. The Performance Food Group Company 2007 Management Option Plan (the”2007 Option Plan”) allowed for the granting of awards to employees, officers, directors, consultants, and advisors of the Company or its affiliates. The terms and conditions of awards granted under the 2007 Option Plan were determined by the Board of Directors.

The Tranche II and Tranche III options and restricted stock granted under the 2007 Option Plan are subject to both time and performance vesting, including performance criteria based on the internal rate of return and sponsor cash inflows as outlined in the 2007 Option Plan.

During the second quarter of fiscal 2018, Wellspring sold all of their remaining interest in shares of the Company’s common stock. On December 7, 2017, the Company determined that the performance criteria for the Tranche II and III awards had been met and 2.1 million shares of restricted stock and 1.4 million options vested. In the second quarter of fiscal 2018, the Company recognized approximately $6.3 million of accelerated compensation expense in connection with the vesting of the Tranche II and III awards. Based on the performance achieved, total compensation expense for the Tranche II and III awards was $24.9 million. The excess tax benefit recognized in the consolidated statements of operations for the three and six months ended December 30, 2017 was $15.4 million.

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Recently Issued Accounting Pronouncements (Policies)

6 Months Ended

Dec. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-11,

Inventory (Topic 330): Simplifying the Measurement of Inventory. This ASU requires an entity to measure most inventory at the lower of cost and net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The ASU is effective for public companies prospectively for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this ASU as of the beginning of fiscal 2018 and concluded that it does not have a material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period using the retrospective transition method. The Company elected to early adopt ASU 2016-15 as of the beginning of fiscal 2018. Based on our review of the ASU, the Company concluded that it has historically classified the specified cash receipts and cash payments in accordance with the clarified guidance. This ASU did not have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The ASU requires a retrospective transition method for each period presented. The Company elected to early adopt ASU 2016-18 as of the beginning of fiscal 2018. The statements of cash flows for the six months ended December 30, 2017 and December 31, 2016 include restricted cash with cash when reconciling thebeginning-of-period and end-of-period total amounts.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 of the goodwill impairment test, which is performed by estimating the fair value of individual assets and liabilities of the reporting unit to calculate the implied fair value of goodwill. Instead, an entity will record a goodwill impairment charge based on the excess of a reporting unit’s carrying value over its estimated fair value, not to exceed the carrying amount of goodwill. This ASU is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted. The Company elected to early adopt ASU 2017-04 as of the beginning of fiscal 2018. Upon adoption of the ASU, the Company concluded that it did not have a material impact on its consolidated financial statements. The Company will apply ASU 2017-04 on a prospective basis when analyzing goodwill impairment.

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This Update is a comprehensive new revenue recognition model that requires a company to recognize revenue that represents the transfer of promised goods or services to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services.

Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies may either use a full retrospective or modified retrospective approach for adoption of Topic 606. The Company will adopt the guidance in fiscal 2019 and currently plans to implement the new standard using the modified retrospective approach. However, our method is subject to change as we finalize our adoption approach for the new standard. The Company has conducted a preliminary assessment and anticipates that the timing of recognition of revenue to be substantially unchanged under the new standard. The amended guidance also requires additional quantitative and qualitative disclosures, which the Company believes will be significant to the consolidated financial statements. The Company is in the process of designing and implementing relevant controls related to adoption of the new standard.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU is a comprehensive new lease accounting model that requires companies to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. For public entities, the ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt the guidance in fiscal 2020. Companies are required to recognize and measure leases at the beginning of the earliest period presented in its financial statements using a modified retrospective approach. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will have a significant impact on our consolidated financial statements. Information about our undiscounted future lease payments and the timing of those payments is in Note 12. Leases in our Form 10-K.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Companies are required to apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. The Company is in the process of evaluating the impact of this ASU on our future consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business in order to assist companies in the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amended guidance also removes the existing evaluation of a market participant’s ability to replace missing elements and narrows the definition of output to achieve consistency with other topics. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and should be applied on a prospective basis. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company’s financial statements at the date of adoption.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU expands hedge accounting for both financial and nonfinancial risk components to better align hedge accounting with a company’s risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective basis with a cumulative-effect adjustment to the Consolidated Balance Sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is in the process of evaluating the impact of this ASU on its future financial statements and believes adoption of this standard will not have a material impact on its consolidated financial statements.

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Business Combinations (Tables)

6 Months Ended

Dec. 30, 2017

Business Combinations [Abstract]

Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2018 acquisition.

(In millions)	Fiscal 2018
Net working capital	$	21.4
Goodwill		21.1
Other intangible assets		20.6
Property, plant and equipment		1.8
Total purchase price	$	64.9

Changes in Carrying Amount of Goodwill

The following table presents the changes in the carrying amount of goodwill:

(In millions)	Performance Foodservice		PFG Customized		Vistar		Corporate and Other		Total
Balance as of July 1, 2017	$	428.2	$	166.5	$	64.9	$	59.0	$	718.6
Acquisitions - current year		—		—		21.1		—		21.1
Adjustments related to prior year acquisitions		0.1		—		—		0.3		0.4
Balance as of December 30, 2017	$	428.3	$	166.5	$	86.0	$	59.3	$	740.1

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Debt (Tables)

6 Months Ended

Dec. 30, 2017

Schedule of Debt

Debt consisted of the following:

(In millions)	As of December 30, 2017			As of July 1, 2017
ABL	$	1,016.3		$	899.9
5.500% Notes due 2024		350.0			350.0
Promissory Note		—			6.0
Less: Original issue discount and deferred financing costs		(7.6	)		(8.2	)
Long-term debt		1,358.7			1,247.7
Capital and finance lease obligations		54.4			49.9
Total debt		1,413.1			1,297.6
Less: current installments		(7.0	)		(11.7	)
Total debt, excluding current installments	$	1,406.1		$	1,285.9

ABL Facility [Member]

Summary of Outstanding Borrowings, Availability, and Average Interest Rate

The following table summarizes outstanding borrowings, availability, and the average interest rate under the ABL Facility:

(Dollars in millions)	As of December 30, 2017			As of July 1, 2017
Aggregate borrowings	$	1,016.3		$	899.9
Letters of credit		123.6			105.5
Excess availability, net of lenders’ reserves of $12.2 and $11.2		577.8			594.6
Average interest rate		2.98	%		2.59	%

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Dec. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Swap Agreements

The following table summarizes the outstanding Swap Agreements as of December 30, 2017 (in millions):

Effective Date	Maturity Date		Notional Amount		Fixed Rate Swapped
August 9, 2013		August 9, 2018	$	200.0		1.51	%
June 30, 2017		June 30, 2019		50.0		1.13	%
June 30, 2017		June 30, 2020		50.0		1.23	%
June 30, 2017		June 30, 2020		50.0		1.25	%
June 30, 2017		June 30, 2020		50.0		1.26	%
August 9, 2018		August 9, 2021		75.0		1.21	%
August 9, 2018		August 9, 2021		75.0		1.20	%
June 30, 2020		December 31, 2021		100.0		2.16	%

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Income Taxes (Tables)

6 Months Ended

Dec. 30, 2017

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

 The impact to the provision for stock-based compensation and the impact of the reduction in tax rate under the Act are summarized as follows:

(Dollars in millions)	Three Months Ended December 30, 2017						Six Months Ended December 30, 2017
	Income Tax Expense			Effective Tax Rate			Income Tax Expense			Effective Tax Rate
Income tax benefit, reported	$	(43.9	)		-128.3	%	$	(30.3	)		-43.1	%
Revaluation of net deferred income tax liability		37.4			109.6	%		37.4			53.3	%
Stock-based compensation – performance vesting		15.4			45.2	%		15.4			21.9	%
Impact of rate reduction on first quarter fiscal 2018 income		2.5			7.4	%		—			—
Income tax expense, excluding benefits	$	11.4			33.9	%	$	22.5			32.1	%

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Earnings Per Share (Tables)

6 Months Ended

Dec. 30, 2017

Earnings Per Share [Abstract]

Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings Per Share Computations

A reconciliation of the numerators and denominators for the basic and diluted EPS computations is as follows:

(In millions, except per share amounts)	Three months ended December 30, 2017		Three months ended December 31, 2016		Six months ended December 30, 2017		Six months ended December 31, 2016
Numerator:
Net income	$	78.0	$	22.9	$	100.6	$	35.1
Denominator:
Weighted-average common shares outstanding		101.4		100.1		101.2		100.0
Dilutive effect of share-based awards		3.1		2.6		3.3		2.5
Weighted-average dilutive shares outstanding		104.5		102.7		104.5		102.5
Basic earnings per share	$	0.77	$	0.23	$	0.99	$	0.35
Diluted earnings per share	$	0.75	$	0.22	$	0.96	$	0.34

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Segment Information (Tables)

6 Months Ended

Dec. 30, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

In the first quarter of fiscal 2018, the Company reorganized its information technology department, and expenses associated with business application teams are now included in the segments results. The EBITDA for PFS, Vistar and Corporate & All Other for the three and six months ended December 31, 2016 has been adjusted to reflect this change.

(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the three months ended December 30, 2017
Net external sales	$	2,532.8	$	888.1	$	838.3	$	51.9		$	—		$	4,311.1
Inter-segment sales		2.5		0.1		0.6		58.7			(61.9	)		—
Total sales		2,535.3		888.2		838.9		110.6			(61.9	)		4,311.1
EBITDA		83.0		5.9		34.0		(41.4	)		—			81.5
Depreciation and amortization		14.6		3.7		6.9		7.1			—			32.3
Capital expenditures		9.3		4.1		5.3		3.3			—			22.0
For the three months ended December 31, 2016
Net external sales	$	2,356.8	$	933.4	$	737.4	$	24.2		$	—		$	4,051.8
Inter-segment sales		1.4		0.1		0.5		53.7			(55.7	)		—
Total sales		2,358.2		933.5		737.9		77.9			(55.7	)		4,051.8
EBITDA		75.5		6.7		33.0		(33.0	)		—			82.2
Depreciation and amortization		14.0		3.6		6.6		6.2			—			30.4
Capital expenditures		34.1		2.7		0.8		7.5			—			45.1
(In millions)	PFS		PFG Customized		Vistar		Corporate & All Other			Eliminations			Consolidated
For the six months ended December 30, 2017
Net external sales	$	5,157.3	$	1,784.1	$	1,634.5	$	100.1		$	—		$	8,676.0
Inter-segment sales		5.1		0.2		1.2		118.6			(125.1	)		—
Total sales		5,162.4		1,784.3		1,635.7		218.7			(125.1	)		8,676.0
EBITDA		161.8		11.1		59.8		(69.0	)		—			163.7
Depreciation and amortization		28.4		7.3		13.2		14.8			—			63.7
Capital expenditures		20.5		6.3		5.6		6.1			—			38.5
For the six months ended December 31, 2016
Net external sales	$	4,791.5	$	1,800.1	$	1,478.2	$	28.1		$	—		$	8,097.9
Inter-segment sales		3.1		0.7		1.2		108.7			(113.7	)		—
Total sales		4,794.6		1,800.8		1,479.4		136.8			(113.7	)		8,097.9
EBITDA		148.1		10.6		54.8		(69.4	)		—			144.1
Depreciation and amortization		27.1		8.8		11.8		12.2			—			59.9
Capital expenditures		53.8		4.9		2.2		19.0			—			79.9

Summary Assets by Reportable Segment, Excluding Intercompany Receivables

Total assets by reportable segment, excluding intercompany receivables between segments, are as follows:

(In millions)	As of December 30, 2017		As of July 1, 2017
PFS	$	2,162.3	$	2,161.2
PFG Customized		645.9		667.1
Vistar		754.0		654.5
Corporate & All Other		320.4		321.3
Total assets	$	3,882.6	$	3,804.1

XML

Summary of Business Activities - Additional Information (Detail) - Common Stock [Member] - Secondary Offering [Member] - Wellspring Capital Management [Member]	4 Months Ended
	Dec. 30, 2017 USD ($) shares
Business Description [Line Items]
Number of common shares sold by selling stockholders | shares	16,272,914
Proceeds from issuance of secondary offerings | $	$ 0
Ownership percentage	0.00%

XML

Business Combinations - Additional Information (Detail) $ in Millions	1 Months Ended	6 Months Ended
	Feb. 07, 2018 USD ($) Business-Combination	Dec. 30, 2017 USD ($)	Dec. 31, 2016 USD ($) Business-Combination
Business Acquisition [Line Items]
Payment for acquisition		$ 63.2	$ 82.1
Number of acquisitions | Business-Combination			4
Subsequent Event [Member]
Business Acquisition [Line Items]
Number of acquisitions | Business-Combination	1
Business Acquisition Cost [Member]
Business Acquisition [Line Items]
Payment for acquisition		$ 64.9	$ 82.8
Business Acquisition Cost [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Payment for acquisition	$ 6.6

XML

Business Combinations - Summary of Preliminary Purchase Price Allocation of Major Class of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Business Acquisition [Line Items]
Goodwill	$ 740.1	$ 718.6
2017 Acquisitions [Member]
Business Acquisition [Line Items]
Net working capital	21.4
Goodwill	21.1
Other intangible assets	20.6
Property, plant and equipment	1.8
Total purchase price	$ 64.9

XML

Business Combination - Changes in Carrying Amount of Goodwill (Detail) $ in Millions	6 Months Ended
	Dec. 30, 2017 USD ($)
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 718.6
Acquisitions - current year	21.1
Adjustments related to prior year acquisitions	0.4
Goodwill, Ending Balance	740.1
Performance Foodservice [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	428.2
Adjustments related to prior year acquisitions	0.1
Goodwill, Ending Balance	428.3
PFG Customized [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	166.5
Goodwill, Ending Balance	166.5
Vistar [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	64.9
Acquisitions - current year	21.1
Goodwill, Ending Balance	86.0
Corporate and Other [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	59.0
Adjustments related to prior year acquisitions	0.3
Goodwill, Ending Balance	$ 59.3

XML

Debt - Schedule of Debt (Detail) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Debt Instrument [Line Items]
Less: Original issue discount and deferred financing costs	$ (7.6)	$ (8.2)
Long-term debt	1,358.7	1,247.7
Capital and finance lease obligations	54.4	49.9
Total debt	1,413.1	1,297.6
Total debt	1,413.1	1,297.6
Less: current installments	(7.0)	(11.7)
Total debt, excluding current installments	1,406.1	1,285.9
ABL Facility [Member]
Debt Instrument [Line Items]
Long-term debt, gross	1,016.3	899.9
5.500% Senior Notes due 2024 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 350.0	350.0
Unsecured Subordinated Promissory Note [Member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 6.0

XML

Debt - Additional Information (Detail) - USD ($)		1 Months Ended	6 Months Ended
	May 17, 2016	Dec. 30, 2017	Dec. 30, 2017	Dec. 21, 2012
Debt Instrument [Line Items]
Payment of promissory note			$ 6,000,000
ABL Facility [Member]
Debt Instrument [Line Items]
Debt instruments face amount		$ 1,950,000,000	$ 1,950,000,000
Credit facility, maturity period			2021-02
Debt instrument description of variable rate			(a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread.
ABL Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Credit facility, commitment fee percentage			0.25%
ABL Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Credit facility, commitment fee percentage			0.375%
ABL Facility [Member] | Federal Funds Effective Swap Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			1.00%
5.500% Senior Notes due 2024 [Member]
Debt Instrument [Line Items]
Debt instruments face amount	$ 350,000,000
Debt instruments amount, interest rate	5.50%
Debt instruments maturity year	2024
ABL Facility and Term Facility [Member]
Debt Instrument [Line Items]
Debt covenant restrictive amount		302,000,000	$ 302,000,000
Unsecured Subordinated Promissory Note [Member]
Debt Instrument [Line Items]
Debt instruments face amount				$ 6,000,000
Payment of promissory note		$ 6,000,000

XML

Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Detail) - ABL Facility [Member] - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Debt Instrument [Line Items]
Aggregate borrowings	$ 1,016.3	$ 899.9
Letters of credit	123.6	105.5
Excess availability, net of lenders' reserves of $12.2 and $11.2	$ 577.8	$ 594.6
Average interest rate	2.98%	2.59%

XML

Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
ABL Facility [Member]
Debt Instrument [Line Items]
Debt amount reserve by lender	$ 12.2	$ 11.2

XML

Derivatives and Hedging Activities - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018 gal	Dec. 30, 2017 USD ($) Agreement Interest_Rates_Swaps gal
Derivative [Line Items]
Non-monetary notional amount volume		4,500,000
Number of arrangements | Agreement		2
Scenario Forecast [Member]
Derivative [Line Items]
Non-monetary notional amount volume	4,500,000
Interest Rate Swaps [Member]
Derivative [Line Items]
Number of interest rate swaps | Interest_Rates_Swaps		8
Notional Amount | $		$ 650,000,000

XML

Derivatives and Hedging Activities - Schedule of Outstanding Swap Agreements (Detail)	6 Months Ended
	Dec. 30, 2017 USD ($)
Interest Rate Swap Agreement One [Member]
Derivative [Line Items]
Effective Date	Aug. 09, 2013
Maturity Date	Aug. 09, 2018
Notional Amount	$ 200,000,000
Fixed Rate Swapped	1.51%
Interest Rate Swap Agreement Two [Member]
Derivative [Line Items]
Effective Date	Jun. 30, 2017
Maturity Date	Jun. 30, 2019
Notional Amount	$ 50,000,000
Fixed Rate Swapped	1.13%
Interest Rate Swap Agreement Three [Member]
Derivative [Line Items]
Effective Date	Jun. 30, 2017
Maturity Date	Jun. 30, 2020
Notional Amount	$ 50,000,000
Fixed Rate Swapped	1.23%
Interest Rate Swap Agreement Four [Member]
Derivative [Line Items]
Effective Date	Jun. 30, 2017
Maturity Date	Jun. 30, 2020
Notional Amount	$ 50,000,000
Fixed Rate Swapped	1.25%
Interest Rate Swap Agreement Five [Member]
Derivative [Line Items]
Effective Date	Jun. 30, 2017
Maturity Date	Jun. 30, 2020
Notional Amount	$ 50,000,000
Fixed Rate Swapped	1.26%
Interest Rate Swap Agreement Six [Member]
Derivative [Line Items]
Effective Date	Aug. 09, 2018
Maturity Date	Aug. 09, 2021
Notional Amount	$ 75,000,000
Fixed Rate Swapped	1.21%
Interest Rate Swap Agreement Seven [Member]
Derivative [Line Items]
Effective Date	Aug. 09, 2018
Maturity Date	Aug. 09, 2021
Notional Amount	$ 75,000,000
Fixed Rate Swapped	1.20%
Interest Rate Swap Agreement Eight [Member]
Derivative [Line Items]
Effective Date	Jun. 30, 2020
Maturity Date	Dec. 31, 2021
Notional Amount	$ 100,000,000
Fixed Rate Swapped	2.16%

XML

Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Long-term debt	$ 1,358.7	$ 1,247.7
Reported Value Measurement [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Long-term debt	1,358.7	1,247.7
Fair Value Inputs Level 2 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value of long term debt	$ 1,378.1	$ 1,258.3

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 01, 2018	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016	Jul. 01, 2017
Income Tax Contingency [Line Items]
Total net deferred income tax liability						$ 103.0
Effective income tax rate reconciliation, at federal statutory income tax rate, percent		28.00%	35.00%	28.00%	35.00%	35.00%
Decrease in deferred tax assets		$ (10.2)
Decrease in deferred tax liabilities		(47.6)
Deferred income tax benefit revalued amount		$ 37.4		$ 37.4
Effective income tax rate		(128.30%)	40.10%	(43.10%)	39.20%
Net deferred tax assets		$ 28.4		$ 28.4		$ 43.1
Net deferred tax liabilities		94.4		94.4		146.1
Unrecognized tax benefits		$ 1.4		1.4		$ 1.3
Decrease in unrecognized tax benefits				$ 0.1
Scenario Forecast [Member]
Income Tax Contingency [Line Items]
Effective income tax rate reconciliation, at federal statutory income tax rate, percent	21.00%

XML

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax benefit, reported	$ (43.9)	$ 15.3	$ (30.3)	$ 22.6
Revaluation of net deferred income tax liability	37.4		37.4
Stock-based compensation - performance vesting	15.4		15.4
Impact of rate reduction on first quarter fiscal 2018 income	2.5
Income tax expense, excluding benefits	$ 11.4		$ 22.5
Income tax benefit, reported	(128.30%)	40.10%	(43.10%)	39.20%
Revaluation of net deferred income tax liability	109.60%		53.30%
Stock-based compensation - performance vesting	45.20%		21.90%
Impact of rate reduction on first quarter fiscal 2018 income	7.40%
Income tax expense, excluding benefits	33.90%		32.10%

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($)		6 Months Ended
	Jan. 10, 2018	Dec. 30, 2017	Feb. 07, 2018
Commitments And Contingencies [Line Items]
Outstanding contracts and purchase orders for capital projects and services		$ 10,100,000
Undiscounted maximum amount for guarantees		28,400,000
Future guarantee annual payments		$ 200,000
Minimum [Member]
Commitments And Contingencies [Line Items]
Operating lease agreements range		7.00%
Operating lease expiration term		4 years
Operating lease expiration dates		2018
Maximum [Member]
Commitments And Contingencies [Line Items]
Operating lease agreements range		20.00%
Operating lease expiration term		8 years
Operating lease expiration dates		2025
Subsequent Event [Member]
Commitments And Contingencies [Line Items]
Additional contracts, entered			$ 8,800,000
Subsequent Event [Member] | Wilder, et al. v. Roma Food Enterprises, Inc., et al. [Member]
Commitments And Contingencies [Line Items]
Litigation settlement, amount awarded to other party	$ 1,900,000

XML

Related-Party Transactions - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Mar. 30, 2018	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016	Jun. 30, 2018	Jul. 01, 2017
Related Party Transaction [Line Items]
Annual payment and reimbursements to affiliates		$ 1.5		$ 1.5	$ 5.5
Scenario Forecast [Member]
Related Party Transaction [Line Items]
Annual payment and reimbursements to affiliates	$ 1.5					$ 3.0
Purchasing Alliance [Member]
Related Party Transaction [Line Items]
Purchases from related party		177.5	$ 176.6	390.4	$ 387.0
Equity method investments		$ 4.7		$ 4.7			$ 4.6

XML

Earnings Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Earnings Per Share [Abstract]
Potential common shares not included in computing diluted earnings per share due to antidilutive effect	0.7	1.2	0.7	1.0

XML

Earnings Per Share - Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Numerator:
Net income	$ 78.0	$ 22.9	$ 100.6	$ 35.1
Denominator:
Weighted-average common shares outstanding	101.4	100.1	101.2	100.0
Dilutive effect of share-based awards	3.1	2.6	3.3	2.5
Weighted-average dilutive shares outstanding	104.5	102.7	104.5	102.5
Basic earnings per share	$ 0.77	$ 0.23	$ 0.99	$ 0.35
Diluted earnings per share	$ 0.75	$ 0.22	$ 0.96	$ 0.34

XML

Segment Information - Additional Information (Detail)	6 Months Ended
	Dec. 30, 2017 Segment
Segment Reporting [Abstract]
Number of reportable segments	3

XML

Segment Information - Schedule of Segment Reporting Information, by Segment (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Net sales	$ 4,311.1	$ 4,051.8	$ 8,676.0	$ 8,097.9
EBITDA	81.5	82.2	163.7	144.1
Depreciation and amortization	32.3	30.4	63.7	59.9
Capital expenditures	22.0	45.1	38.5	79.9
Performance Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	2,532.8	2,356.8	5,157.3	4,791.5
EBITDA	83.0	75.5	161.8	148.1
Depreciation and amortization	14.6	14.0	28.4	27.1
Capital expenditures	9.3	34.1	20.5	53.8
PFG Customized [Member]
Segment Reporting Information [Line Items]
Net sales	888.1	933.4	1,784.1	1,800.1
EBITDA	5.9	6.7	11.1	10.6
Depreciation and amortization	3.7	3.6	7.3	8.8
Capital expenditures	4.1	2.7	6.3	4.9
Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	838.3	737.4	1,634.5	1,478.2
EBITDA	34.0	33.0	59.8	54.8
Depreciation and amortization	6.9	6.6	13.2	11.8
Capital expenditures	5.3	0.8	5.6	2.2
Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	51.9	24.2	100.1	28.1
EBITDA	(41.4)	(33.0)	(69.0)	(69.4)
Depreciation and amortization	7.1	6.2	14.8	12.2
Capital expenditures	3.3	7.5	6.1	19.0
Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(61.9)	(55.7)	(125.1)	(113.7)
Eliminations [Member] | Performance Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	2.5	1.4	5.1	3.1
Eliminations [Member] | PFG Customized [Member]
Segment Reporting Information [Line Items]
Net sales	0.1	0.1	0.2	0.7
Eliminations [Member] | Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	0.6	0.5	1.2	1.2
Eliminations [Member] | Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	58.7	53.7	118.6	108.7
Operating Segments [Member] | Performance Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	2,535.3	2,358.2	5,162.4	4,794.6
Operating Segments [Member] | PFG Customized [Member]
Segment Reporting Information [Line Items]
Net sales	888.2	933.5	1,784.3	1,800.8
Operating Segments [Member] | Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	838.9	737.9	1,635.7	1,479.4
Operating Segments [Member] | Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	$ 110.6	$ 77.9	$ 218.7	$ 136.8

XML

Segment Information - Summary Assets by Reportable Segment, Excluding Intercompany Receivables (Detail) - USD ($) $ in Millions	Dec. 30, 2017	Jul. 01, 2017
Segment Reporting Information [Line Items]
Total assets	$ 3,882.6	$ 3,804.1
Performance Foodservice [Member]
Segment Reporting Information [Line Items]
Total assets	2,162.3	2,161.2
PFG Customized [Member]
Segment Reporting Information [Line Items]
Total assets	645.9	667.1
Vistar [Member]
Segment Reporting Information [Line Items]
Total assets	754.0	654.5
Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Total assets	$ 320.4	$ 321.3

XML

Stock-based Compensation - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
	Dec. 07, 2017	Dec. 30, 2017	Dec. 31, 2016	Dec. 30, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense				$ 14.5	$ 8.1
Income tax benefit		$ 43.9	$ (15.3)	30.3	$ (22.6)
2007 Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit		15.4		$ 15.4
2007 Option Plan [Member] | Tranche Two and Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock vested	2.1
Options vested	1.4
Accelerated compensation expense		6.3
Stock compensation expense		$ 24.9