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 28, 2019

☐ 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	(804) 484-7700
(Address of principal executive offices)	(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PFGC	New York Stock Exchange

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 every Interactive Data File required to be submitted 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 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	☐	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  ☒

117,181,486 shares of common stock were outstanding as of January 29, 2020.

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	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32
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, there can be no assurance 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 Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019 (the “Form 10-K”), as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (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;

• our growth strategy may not achieve the anticipated results;

• risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

• 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;

• adverse judgements or settlements;

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

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

• decrease in earnings from amortization charges associated with acquisitions;

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• impact of uncollectibility of accounts receivable;  

• difficult economic conditions affecting consumer confidence;

• 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 28, 2019			As of June 29, 2019
ASSETS
Current assets:
Cash	$	12.7		$	14.7
Accounts receivable, less allowances of $29.7 and $22.0		1,230.1			1,227.3
Inventories, net		1,349.4			1,356.9
Restricted cash		1,078.2			-
Prepaid expenses and other current assets		62.2			71.7
Total current assets		3,732.6			2,670.6
Goodwill		765.8			765.8
Other intangible assets, net		170.3			194.3
Property, plant and equipment, net		983.5			950.5
Operating lease right-of-use assets		391.3			-
Restricted cash		11.0			10.7
Other assets		56.6			61.6
Total assets	$	6,111.1		$	4,653.5
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Outstanding checks in excess of deposits	$	265.2		$	206.9
Trade accounts payable		1,041.5			1,130.8
Accrued expenses and other current liabilities		413.4			343.3
Finance lease obligations—current installments		24.6			18.3
Operating lease obligations—current installments		78.4			-
Total current liabilities		1,823.1			1,699.3
Long-term debt		2,188.4			1,202.9
Deferred income tax liability, net		102.0			108.0
Finance lease obligations, excluding current installments		164.5			128.9
Operating lease obligations, excluding current installments		314.6			-
Other long-term liabilities		140.0			216.2
Total liabilities		4,732.6			3,355.3
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 104.4 million shares issued and outstanding as of December 28, 2019; 1.0 billion shares authorized, 103.8 million shares issued and outstanding as of June 29, 2019		1.0			1.0
Additional paid-in capital		870.5			866.7
Accumulated other comprehensive loss, net of tax benefit of $0.4 and $0.1		(1.0	)		(0.2	)
Retained earnings		508.0			430.7
Total shareholders’ equity		1,378.5			1,298.2
Total liabilities and shareholders’ equity	$	6,111.1		$	4,653.5

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 28, 2019			Three Months Ended December 29, 2018		Six Months Ended December 28, 2019			Six Months Ended December 29, 2018
Net sales	$	6,068.6		$	4,615.7	$	12,311.6		$	9,155.4
Cost of goods sold		5,357.4			4,001.1		10,889.0			7,947.2
Gross profit		711.2			614.6		1,422.6			1,208.2
Operating expenses		630.7			541.6		1,278.6			1,084.6
Operating profit		80.5			73.0		144.0			123.6
Other expense, net:
Interest expense		26.4			16.0		43.7			31.6
Other, net		(0.2	)		0.7		(0.2	)		0.5
Other expense, net		26.2			16.7		43.5			32.1
Income before taxes		54.3			56.3		100.5			91.5
Income tax expense		13.1			13.2		23.2			20.2
Net income	$	41.2		$	43.1	$	77.3		$	71.3
Weighted-average common shares outstanding:
Basic		104.3			103.9		104.2			103.7
Diluted		106.4			104.9		106.2			105.0
Earnings per common share:
Basic	$	0.39		$	0.41	$	0.74		$	0.69
Diluted	$	0.39		$	0.41	$	0.73		$	0.68

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 28, 2019			Three months ended December 29, 2018			Six Months Ended December 28, 2019			Six Months Ended December 29, 2018
Net income	$	41.2		$	43.1		$	77.3		$	71.3
Other comprehensive income (loss), net of tax:
Interest rate swaps:
Change in fair value, net of tax		0.5			(3.0	)		-			(2.2	)
Reclassification adjustment, net of tax		(0.2	)		(0.8	)		(0.8	)		(1.3	)
Other comprehensive income (loss)		0.3			(3.8	)		(0.8	)		(3.5	)
Total comprehensive income	$	41.5		$	39.3		$	76.5		$	67.8

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)

						Additional			Accumulated Other					Total
	Common Stock					Paid-in			Comprehensive			Retained		Shareholders’
(In millions)	Shares			Amount		Capital			Income (Loss)			Earnings		Equity
Balance as of September 29, 2018		103.6		$	1.0	$	862.7		$	9.5		$	292.1	$	1,165.3
Issuance of common stock under    stock-based compensation plans		0.4			—		1.5			—			—		1.5
Net income		—			—		—			—			43.1		43.1
Interest rate swaps		—			—		—			(3.8	)		—		(3.8	)
Stock-based compensation expense		—			—		4.2			—			—		4.2
Common stock repurchased		(0.2	)		—		(5.2	)		—			—		(5.2	)
Balance as of December 29, 2018		103.8		$	1.0	$	863.2		$	5.7		$	335.2	$	1,205.1
Balance as of September 28, 2019		104.2		$	1.0	$	866.6		$	(1.3	)	$	466.8	$	1,333.1
Issuance of common stock under    stock-based compensation plans		0.2			—		(0.5	)		—			—		(0.5	)
Net income		—			—		—			—			41.2		41.2
Interest rate swaps		—			—		—			0.3			—		0.3
Stock-based compensation expense		—			—		4.4			—			—		4.4
Balance as of December 28, 2019		104.4		$	1.0	$	870.5		$	(1.0	)	$	508.0	$	1,378.5

						Additional			Accumulated Other						Total
	Common Stock					Paid-in			Comprehensive			Retained			Shareholders’
(In millions)	Shares			Amount		Capital			Income (Loss)			Earnings			Equity
Balance as of June 30, 2018		103.2		$	1.0	$	861.2		$	8.3		$	264.8		$	1,135.3
Issuance of common stock under    stock-based compensation plans		0.8			—		(0.8	)		—			—			(0.8	)
Net income		—			—		—			—			71.3			71.3
Interest rate swaps		—			—		—			(3.5	)		—			(3.5	)
Stock-based compensation expense		—			—		8.0			—			—			8.0
Common stock repurchased		(0.2	)		—		(5.2	)		—			—			(5.2	)
Change in accounting principle(1)		—			—		—			0.9			(0.9	)		—
Balance as of December 29, 2018		103.8		$	1.0	$	863.2		$	5.7		$	335.2		$	1,205.1
Balance as of June 29, 2019		103.8		$	1.0	$	866.7		$	(0.2	)	$	430.7		$	1,298.2
Issuance of common stock under    stock-based compensation plans		0.6			—		(5.0	)		—			—			(5.0	)
Net income		—			—		—			—			77.3			77.3
Interest rate swaps		—			—		—			(0.8	)		—			(0.8	)
Stock-based compensation expense		—			—		8.8			—			—			8.8
Balance as of December 28, 2019		104.4		$	1.0	$	870.5		$	(1.0	)	$	508.0		$	1,378.5

(1) As of the beginning of fiscal 2019, the Company elected to early adopt the provisions of ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.

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 28, 2019			Six Months Ended December 29, 2018
Cash flows from operating activities:
Net income	$	77.3		$	71.3
Adjustments to reconcile net income to net cash provided    by operating activities
Depreciation		69.0			54.4
Amortization of intangible assets		17.5			18.2
Amortization of deferred financing costs		1.6			1.7
Provision for losses on accounts receivables		8.9			8.3
Stock compensation expense		8.8			8.0
Deferred income tax benefit		(5.6	)		(4.7	)
Other non-cash activities		9.3			0.6
Changes in operating assets and liabilities, net
Accounts receivable		(11.7	)		(24.3	)
Inventories		7.5			(73.8	)
Prepaid expenses and other assets		9.6			32.2
Trade accounts payable		(89.2	)		(37.4	)
Outstanding checks in excess of deposits		58.3			20.7
Accrued expenses and other liabilities		(3.5	)		(5.2	)
Net cash provided by operating activities		157.8			70.0
Cash flows from investing activities:
Purchases of property, plant and equipment		(49.0	)		(60.1	)
Net cash paid for acquisitions		—			(57.0	)
Proceeds from sale of property, plant and equipment		0.5			0.7
Net cash used in investing activities		(48.5	)		(116.4	)
Cash flows from financing activities:
Net (payments) borrowings under ABL Facility		(72.6	)		65.4
Payments on financed property, plant and equipment		(1.4	)		(4.6	)
Borrowing on Notes due 2027		1,060.0			—
Cash paid for acquisitions		(1.0	)		(3.1	)
Payments under finance lease obligations		(10.6	)		(5.6	)
Proceeds from exercise of stock options		2.6			5.3
Cash paid for shares withheld to cover taxes		(7.6	)		(6.1	)
Repurchases of common stock		—			(4.6	)
Cash paid for debt issuance, extinguishment and modifications		(2.2	)		—
Net cash provided by financing activities		967.2			46.7
Net increase in cash and restricted cash		1,076.5			0.3
Cash and restricted cash, beginning of period		25.4			17.8
Cash and restricted cash, end of period	$	1,101.9		$	18.1

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 28, 2019		As of June 29, 2019
Cash	$	12.7	$	14.7
Restricted cash(1)		1,089.2		10.7
Total cash and restricted cash	$	1,101.9	$	25.4

(1) Restricted cash is included in current restricted cash and long-term restricted cash on the consolidated balance sheet. The current restricted cash includes the proceeds from the issuance of senior notes that are held in escrow as of December 28, 2019 and were used to fund the acquisition of Reinhart Foodservice, L.L.C (“Reinhart”) that closed on December 30, 2019, as well as funds that will be used for the interest payments on those senior notes. The long-term restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims.

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Supplemental disclosures of non-cash transactions are as follows:

(In millions)	Six Months Ended December 28, 2019		Six Months Ended December 29, 2018
Debt assumed through finance lease obligations	$	52.5	$	54.1
Purchases of property, plant and equipment, financed		1.3		2.6
Share repurchase payable		-		0.6

Supplemental disclosures of cash flow information are as follows:

(In millions)	Six Months Ended December 28, 2019		Six Months Ended December 29, 2018
Cash paid during the year for:
Interest	$	33.4	$	32.0
Income taxes paid (refunds), net		27.8		(0.1	)

See accompanying notes, 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 primarily 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 customers, and (ii) multi-unit, or “Chain” customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and business and industry locations. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products and other items nationally to vending distributors, big box retailers, theaters, convenience stores, and hospitality providers.

Share Repurchase Program

On November 13, 2018, the Board of Directors of the Company (the “Board of Directors”) authorized a share repurchase program for up to $250 million of the Company’s outstanding common stock. The share repurchase program does not have an expiration date and may be amended, suspended, or discontinued at any time. The share repurchase program remains subject to the discretion of the Board of Directors. No shares have been repurchased during fiscal year 2020. During the three months ended December 29, 2018, the Company repurchased and subsequently retired 0.2 million shares of common stock for a total of $5.2 million. As of December 28, 2019, approximately $240.7 million remained available for additional share repurchases.

Equity Forward

On November 20, 2019, Performance Food Group Company entered into an underwriting agreement related to the issuance and sale of an aggregate of 10,120,000 shares of its common stock, and up to 1,518,000 additional shares at the underwriters’ option, in each case on a forward sale basis. On November 22, 2019, the full option to purchase the 1,518,000 shares of additional common stock shares on a forward basis was exercised by the underwriters, and, on November 25, 2019, the Company closed the offering. The forward sale transaction is classified as an equity transaction, because it is indexed to the Company’s common stock and physical settlement is within the Company’s control. As of December 28, 2019, no amounts have been recorded in the consolidated financial statements with respect to the equity offering. On December 30, 2019, the Company physically settled the forward sale agreement at the forward sale price of $42.70 per share, net of the underwriting discount. The aggregate offering price of the amount of newly issued common stock was $514.9 million. In connection with the offering, the Company paid the underwriters a discount of $1.55 per share, for a total underwriting discount of $18.0 million. In addition, the Company incurred direct offering expenses of $5.9 million. The Company used the $491.0 million net proceeds that it received from the common stock offering to finance the cash consideration payable in connection with the Reinhart acquisition.

2. Basis of Presentation

The consolidated financial statements have been prepared by the Company, without audit, with the exception of the June 29, 2019 consolidated balance sheet, which was derived from the audited consolidated financial statements included in 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, leases, 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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3. Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and has issued subsequent amendments to this guidance. 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. The Company adopted this new standard as of June 30, 2019, the effective and initial application date, using the modified retrospective approach. Comparative periods presented in the consolidated financial statements prior to June 30, 2019 continue to be presented under Accounting Standards Codification (“ASC”) 840. The Company elected the package of practical expedients, which allowed the Company not to reassess whether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The Company also made a policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheet, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company’s June 30, 2019 adoption of the new standard resulted in the recognition of operating lease liabilities totaling $423.8 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, with $82.1 million within Operating lease liabilities - current and $341.7 million within Operating lease liabilities, excluding current installments. In addition, we recorded corresponding Operating lease right-of-use assets totaling $423.0 million based upon the operating lease liabilities adjusted for deferred rent of $11.0 million, favorable lease intangible assets of $5.3 million and prepaid rent and other adjustments of $4.9 million. The new standard did not have a material impact on the consolidated statements of operations and the consolidated statement of cash flows. See Note 7. Leases for further discussion of the Company’s leasing arrangements and required ASC 842 disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and has issued subsequent amendments to this guidance. 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. The Company plans to adopt the new standard in fiscal 2021. 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 its future consolidated financial statements but does not expect this update to have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2021. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes by removing certain exceptions for intra-period tax allocations, recognition of deferred tax liabilities after a foreign subsidiary transitions to or from equity method accounting, and methodology of calculating income taxes in an interim period with year-to-date losses. Additionally, the guidance provides additional clarification on other areas, including step-up of the tax basis of goodwill recorded as part of an acquisition and the treatment of franchise taxes that are partially based on income. This pronouncement is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2022. Companies are required to apply the standard on a prospective basis, except for certain sections of the guidance which shall be applied on a retrospective or modified retrospective basis. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

4. Revenue Recognition

The Company markets and distributes primarily national and company-branded food and food-related products to customer locations across the United States. The Foodservice segment supplies a “broad line” of products to its customers, including the

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Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13. Segment Information for external revenue by reportable segment.

The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized to net sales over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $12.3 million and $10.6 million as of December 28, 2019 and June 29, 2019, respectively.

5. Business Combinations

During the first six months of fiscal 2019, the Company paid cash of $57.0 million for three acquisitions. These acquisitions did not materially affect the Company’s results of operations.

    The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in the fourth quarter of fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results are achieved during a defined post-closing period. Total contingent consideration outstanding was $88.9 million as of December 28, 2019 and $82.6 million as of June 29, 2019. Earnout liabilities are measured using unobservable inputs that are considered a Level 3 measurement.

Subsequent to December 28, 2019, the Company acquired Reinhart from Reyes Holdings, L.LC. in a transaction valued at $2.0 billion, or approximately $1.7 billion net of an estimated tax benefit to PFG of approximately $265 million. The $2.0 billion purchase price was financed with $466.5 million of borrowings under the Amended Credit Agreement (as defined below), net proceeds of $1,033.7 million from new senior unsecured Notes due 2027 (as defined below), and net proceeds of $491.0 million from an offering of shares of the Company’s common stock. The Reinhart acquisition expands the Company’s broadline presence by enhancing its distribution footprint in key geographies, and the Company believes it will help achieve its long-term growth goals. The Reinhart acquisition will be reported in the Foodservice segment.

Assets acquired and liabilities assumed will be recognized at their respective fair values as of the acquisition date. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed, which will require the use of judgment. Due to the limited time since the December 30, 2019 acquisition date, the preliminary acquisition valuation is incomplete at this time and the Company is unable to provide amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed, including information required for valuation of intangible assets and goodwill.

6. 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 28, 2019			As of June 29, 2019
ABL Facility	$	786.4		$	859.0
5.500% Notes due 2024		350.0			350.0
5.500% Notes due 2027		1,060.0			-
Less: Original issue discount and deferred financing costs		(8.0	)		(6.1	)
Long-term debt		2,188.4			1,202.9
Less: current installments		-			-
Total debt, excluding current installments	$	2,188.4		$	1,202.9

Credit Agreement

As of December 28, 2019, PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the Third Amended and Restated Credit Agreement dated May 17, 2019 (the “ABL Facility”). The ABL Facility has an aggregate principal amount of $2.4 billion and matures on May 17, 2024. 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, and secured by the majority of the assets of, PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries).

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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 of 0.25% per annum.

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

(Dollars in millions)	As of December 28, 2019			As of June 29, 2019
Aggregate borrowings	$	786.4		$	859.0
Letters of credit under credit agreements		95.0			89.9
Excess availability, net of lenders’ reserves of $40.3 and $38.6		1,295.2			1,182.7
Average interest rate		3.22	%		4.01	%

On December 30, 2019, PFGC and Performance Food Group, Inc. entered into the Fourth Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amends and restates the ABL Facility. The Amended Credit Agreement, among other things, (i) increases the aggregate principal amount available to $3.0 billion and (ii) extends the stated maturity date to December 30, 2024. Like the ABL Facility, the Amended Credit Agreement provides for up to $800 million of uncommitted incremental facilities. Additionally, certain covenants were amended to require the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $200.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days.

Senior Notes due 2027

On September 27, 2019, PFG Escrow Corporation (the “Escrow Issuer”), a wholly-owned subsidiary of PFGC, issued and sold $1,060.0 million aggregate principal amount of its 5.500% Senior Notes due 2027 (the “Notes due 2027”).

Upon issuance of the Notes due 2027, the gross proceeds of the offering, along with certain additional funds were deposited into a segregated escrow account. Following the completion of the Reinhart acquisition on December 30, 2019 the funds were released from escrow and were used, together with the net proceeds from an offering of shares of the Company’s common stock and borrowings under the Amended Credit Agreement, to fund the cash consideration for the transaction and to pay related fees and expenses. The Escrow Issuer merged with and into Performance Food Group, Inc., with Performance Food Group, Inc. as the surviving entity, and by entry into a supplemental indenture along with PFGC, Performance Food Group, Inc. assumed all of the Escrow Issuer’s obligations as the issuer under the indenture for the Notes due 2027. Additionally, PFGC and each of the subsidiaries of PFGC identified as a guaranteeing subsidiary became a guarantor of the Notes due 2027.

The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 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 due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 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 due 2027 at any time prior to October 15, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2027 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 October 15, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.375% and 100% of the principal amount redeemed on October 15, 2023 and October 15, 2024, respectively. In addition, at any time prior to October 15, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2027 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 due 2027 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 due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.

Senior Notes due 2024

    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 due 2024”). The Notes due 2024 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 due 2024 are not guaranteed by Performance Food Group Company.

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Letters of Credit Facility

On August 9, 2018, Performance Food Group, Inc. and PFGC entered into a Continuing Agreement for Letters of Credit (the “Letters of Credit Facility”). The Letters of Credit Facility is an uncommitted facility that provides for the issuance of letters of credit in an aggregate amount not to exceed $40.0 million. Each letter of credit shall have a term not to exceed one year; however, a letter of credit may renew automatically in accordance with its terms. A fee equal to 2.5% per annum on the average daily amount available to be drawn on each day under each outstanding letter of credit is payable quarterly. As of December 28, 2019, the Company has $28.3 million letters of credit outstanding under the Letters of Credit Facility.

7.Leases

The Company determines if an arrangement is a lease at inception and recognizes a financing or operating lease liability and right-of-use asset in the Company’s consolidated balance sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. Since the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. This rate was determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expenses for these short-term leases are recognized on a straight-line basis over the lease term. The Company has several lease agreements that contain lease and non-lease components, such as maintenance, taxes, and insurance, which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent.

Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. Certain full-service fleet lease agreements include variable lease payments associated with usage, which are recorded and paid as incurred. When calculating lease liabilities, lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.  

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 11% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 5 to 8 years and expiration dates ranging from 2020 to 2025. As of December 28, 2019, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately $23.2 million, which would be mitigated by the fair value of the leased assets at lease expiration.

The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of December 28, 2019 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases:

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Leases	Consolidated Balance Sheet Location	As of December 28, 2019
Assets:
Operating	Operating lease right-of-use assets	$	391.3
Finance	Property, plant and equipment, net		179.3
Total lease assets		$	570.6
Liabilities:
Current
Operating	Operating lease obligations—current installments	$	78.4
Finance	Finance lease obligations—current installments		24.6
Non-current
Operating	Operating lease obligations, excluding current installments		314.6
Finance	Finance lease obligations, excluding current installments		164.5
Total lease liabilities		$	582.1
Weighted average remaining lease term
Operating leases		7.6 years
Finance leases		7.1 years
Weighted average discount rate
Operating leases			5.4	%
Finance leases			5.6	%

The following table presents the location of lease costs in the Company consolidated statement of operations for the three and six months ended December 28, 2019 (in millions):

Lease Cost	Statement of Operations Location	Three months ended December 28, 2019		Six months ended December 28, 2019
Finance lease cost:
Amortization of finance lease assets	Operating expenses	$	5.8	$	10.5
Interest on lease liabilities	Interest expense		2.7		4.9
Total finance lease cost		$	8.5	$	15.4
Operating lease cost	Operating expenses		26.7		54.8
Short-term lease cost	Operating expenses		5.6		11.5
Total lease cost		$	40.8	$	81.7

Supplemental cash flow information related to leases for the period reported is as follows (in millions):

(In millions)	Six months ended December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	53.3
Operating cash flows from finance leases		4.9
Financing cash flows from finance leases		10.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		11.1
Finance leases		52.5

Future minimum lease payments under non-cancelable leases as of December 28, 2019 are as follows (in millions):

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Fiscal Year	Operating Leases		Finance Leases
Remaining 2020	$	50.2	$	17.4
2021		90.6		34.5
2022		74.6		34.0
2023		59.5		32.9
2024		42.4		32.0
Thereafter		176.0		84.0
Total future minimum lease payments	$	493.3	$	234.8
Less: Interest		100.3		45.7
Present value of future minimum lease payments	$	393.0	$	189.1

Future minimum lease payments in effect as of June 29, 2019 under non-cancelable leases, as determined prior to the adoption of ASC 842, were as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases
2020	$	104.7	$	26.7
2021		89.6		26.3
2022		73.8		25.8
2023		58.2		24.7
2024		40.8		23.9
Thereafter		163.8		58.4
Total future minimum lease payments	$	530.9	$	185.8
Less: Interest				38.6
Present value of future minimum lease payments			$	147.2

As of December 28, 2019, the Company has additional operating and finance leases that have not yet commenced which total $46.9 million in future minimum lease payments and $1.2 million of residual value guarantees. These leases primarily relate to warehouse leases and will commence in fiscal 2020 with lease terms of 3 to 15 years.

8. 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 $2,188.4 million and $1,202.9 million, is $2,280.0 million and $1,216.3 million at December 28, 2019 and June 29, 2019, 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.

9. 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.

The Company’s effective tax rate was 24.2% for the three months ended December 28, 2019 and 23.4% for the three months ended December 29, 2018. The Company’s effective tax rate was 23.1% for the six months ended December 28, 2019 and 22.1% for the six months ended December 29, 2018. The effective tax rate varied from the 21% statutory rate primarily due to state taxes, federal credits and other permanent items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item.

As of December 28, 2019 and June 29, 2019, the Company had net deferred tax assets of $29.1 million and $29.1 million, respectively, and deferred tax liabilities of $131.1 million and $137.1 million, respectively. As of June 29, 2019, the Company had established a valuation allowance of $0.5 million, net of federal benefit, against deferred tax assets related to certain net operating losses which are not likely to be realized due to limitations on utilization. There was no change in the valuation allowance as of December 28, 2019. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.

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The Company records a liability for Uncertain Tax Positions in accordance with FASB ASC 740-10-25, Income Taxes – General – Recognition. As of December 28, 2019 and June 29, 2019, the Company had approximately $1.8 million and $1.9 million of unrecognized tax benefits, respectively. It is reasonably possible that a decrease of approximately $0.6 million in the balance of unrecognized tax benefits may occur within the next twelve months primarily due to statute of limitations expirations, that, if recognized, would affect the effective tax rate.

10. Commitments and Contingencies

Purchase Obligations

The Company had outstanding contracts and purchase orders for capital projects and services totaling $37.4 million at December 28, 2019. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 28, 2019.

Guarantees 

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.

Reinhart Transaction Commitments

As of December 28, 2019, the Company had several outstanding commitments due upon the closing of the acquisition of Reinhart. These commitments, totaling $63.8 million, included $26.0 million of fees related to the Notes due 2027, $4.9 million of fees related to expected additional borrowings under the Amended Credit Agreement, $23.9 million of underwriting and issuance costs for the offering of shares of the Company’s stock, and $9.0 million related to advisory fees for the acquisition. Upon the closing of the Reinhart acquisition on December 30, 2019, these commitments were paid.

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 (“EEOC”) Field Office served the Company 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 the Company 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 the Company’s broadline distribution centers only and not to the Company’s PFG Customized distribution centers). The Company cooperated with the EEOC on the production of information. In September 2011, the EEOC notified the Company 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 the Company 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 the Company’s broadline division in violation of Title VII. In June 2013, the EEOC filed suit in federal court in Baltimore against the Company. The litigation concerns two issues: (1) whether the Company unlawfully engaged in

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an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether the Company 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 the Company 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 the Company 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 the Company 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, the Company is 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.

In May 2018, the EEOC filed motions for sanctions against the Company alleging that we failed to preserve certain paper employment applications and e-mails during 2004 – 2009. In the sanctions motions, the EEOC sought a range of remedies, including but not limited to, a default judgment against the Company, or alternatively, an order barring the Company from filing for summary judgment on the EEOC’s pattern and practice claims. The court denied the EEOC’s motions in June 2019, but reserved ruling on whether the unavailability of certain documents will prejudice the EEOC’s ability to present expert testimony at the trial.

The parties have filed cross motions for summary judgment, the briefing period has concluded, and the motions are now before the court. There is no specific deadline for the court to issue its ruling on the motions. The Company will continue to vigorously defend itself.

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.

11. Related-Party Transactions

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 $5.1 million as of December 28, 2019 and $4.6 million as of June 29, 2019. For the three-month periods ended December 28, 2019 and December 29, 2018, the Company recorded purchases of $244.2 million and $206.2 million, respectively, through the purchasing alliance. During the six-month periods ended December 28, 2019 and December 29, 2018, the Company recorded purchases of $498.4 million and $433.1 million, respectively, through the purchasing alliance.

12. Earnings Per Common 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 earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. The dilutive effect of potential common shares includes the impact of the equity forward the Company entered into in the second quarter of fiscal 2020 since the average closing price of the Company’s common stock for the period was higher than the applicable forward sale price. Potential common shares of 0.1 million and 0.1 million for the three and six months ended December 28, 2019, respectively, and 0.5 million and 0.6 million for the three and six months ended December 29, 2018, respectively, were not included in computing diluted earnings per common share because the effect would have been antidilutive.

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A reconciliation of the numerators and denominators for the basic and diluted earnings per common share computations is as follows:

(In millions, except per share amounts)	Three months ended December 28, 2019		Three months ended December 29, 2018		Six months ended December 28, 2019		Six months ended December 29, 2018
Numerator:
Net Income	$	41.2	$	43.1	$	77.3	$	71.3
Denominator:
Weighted-average common shares outstanding		104.3		103.9		104.2		103.7
Dilutive effect of potential common shares		2.1		1.0		2.0		1.3
Weighted-average dilutive shares outstanding		106.4		104.9		106.2		105.0
Basic earnings per common share	$	0.39	$	0.41	$	0.74	$	0.69
Diluted earnings per common share	$	0.39	$	0.41	$	0.73	$	0.68

13.Segment Information

The Company has two reportable segments: Foodservice and Vistar. The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customer’s menu requirements. The Vistar segment distributes candy, snacks, beverages, cigarettes, other tobacco products, and other products to customers in the vending, office coffee services, theater, retail, convenience store 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.

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.

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the three months ended December 28, 2019
Net external sales	$	3,843.9	$	2,218.6	$	6.1	$	—		$	6,068.6
Inter-segment sales		3.5		0.6		72.5		(76.6	)		—
Total sales		3,847.4		2,219.2		78.6		(76.6	)		6,068.6
Depreciation and amortization		25.8		11.5		6.5		—			43.8
Capital expenditures		8.1		12.8		5.3		—			26.2
For the three months ended December 29, 2018
Net external sales	$	3,669.3	$	941.3	$	5.1	$	—		$	4,615.7
Inter-segment sales		2.6		0.6		64.2		(67.4	)		—
Total sales		3,671.9		941.9		69.3		(67.4	)		4,615.7
Depreciation and amortization		21.7		9.3		6.1		—			37.1
Capital expenditures		25.9		4.0		5.2		—			35.1

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the six months ended December 28, 2019
Net external sales	$	7,770.9	$	4,529.1	$	11.6	$	—		$	12,311.6
Inter-segment sales		7.4		1.2		147.0		(155.6	)		—
Total sales		7,778.3		4,530.3		158.6		(155.6	)		12,311.6
Depreciation and amortization		50.4		23.1		13.0		—			86.5
Capital expenditures		16.3		21.5		11.2		—			49.0
For the six months ended December 29, 2018
Net external sales	$	7,312.6	$	1,833.1	$	9.7	$	—		$	9,155.4
Inter-segment sales		5.3		1.4		129.4		(136.1	)		—
Total sales		7,317.9		1,834.5		139.1		(136.1	)		9,155.4
Depreciation and amortization		42.6		18.2		11.8		—			72.6
Capital expenditures		42.7		6.7		10.7		—			60.1

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EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.

	Three Months Ended						Six Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Foodservice EBITDA	$	113.6		$	104.3		$	217.6		$	196.3
Vistar EBITDA		56.6			45.4			108.1			77.0
Corporate & All Other EBITDA		(45.7	)		(40.3	)		(95.0	)		(77.6	)
Depreciation and amortization		(43.8	)		(37.1	)		(86.5	)		(72.6	)
Interest expense		(26.4	)		(16.0	)		(43.7	)		(31.6	)
Income before taxes	$	54.3		$	56.3		$	100.5		$	91.5

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

(In millions)	As of December 28, 2019		As of June 29, 2019
Foodservice	$	3,299.1	$	3,152.3
Vistar		1,502.0		1,271.0
Corporate & All Other		1,310.0		230.2
Total assets	$	6,111.1	$	4,653.5

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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 and the audited consolidated financial statements and the notes thereto included in 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. 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

Following the completion of the Reinhart acquisition, we market and distribute over 200,000 food and related products to customers across the United States from over 100 distribution facilities to over 200,000 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, beverages, cigarettes, and other tobacco products. 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.

The Company has two reportable segments: Foodservice and Vistar. Our Foodservice segment distributes a broad line of national brands, customer brands, and our proprietary-branded food and food-related products, or “Performance Brands.” Foodservice sells to independent and multi-unit “Chain” restaurants and other institutions such as schools, healthcare facilities, and business and industry locations. Our Chain customers are multi-unit restaurants with five or more locations and include some of the most recognizable family and casual dining restaurant chains. Our Vistar segment specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products and other items nationally to vending distributors, office coffee service distributors, big box retailers, theaters, convenience stores, 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.

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. Our net income decreased 4.4% from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 as a result of an increase in interest expense due to the additional debt issued to help finance the Reinhart acquisition. Net income increased 8.4% for the first six months of fiscal 2020 compared to the first six months of fiscal 2019. Adjusted EBITDA increased 22.2% from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased 27.4% for the first six months of fiscal 2020 compared to the first six months of fiscal 2019, driven primarily by case growth and improved profit per case. Case volume grew 6.7% in the second quarter of fiscal 2020 and 8.7% in the first six months of fiscal 2020 compared to prior year periods. Gross profit dollars rose 15.7% and 17.7% in the second quarter of fiscal 2020 and the first six months of fiscal 2020, respectively, versus the prior year periods, which was faster than case growth, 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 in the second quarter and first six months of fiscal 2020 compared to the second quarter and first six months of fiscal 2019 rose 16.5% and 17.9%, respectively, as a result of increases in variable operational and selling expenses associated with the increase in case volume and as a result of recent acquisitions.

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.

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• Food distribution market structure. The food distribution market consists of a wide spectrum of companies ranging from businesses selling a single category of product (e.g., produce) to large national and 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 both 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, plus excise taxes, 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.

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 GAAP and is not a measure of operating income, operating performance, or liquidity presented in accordance with 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 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 indentures (other than certain pro forma adjustments permitted under our credit agreement and indentures governing the Notes due 2024 and Notes due 2027 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our credit agreement and indentures, 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 indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.

Adjusted EBITDA is not defined under 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 credit agreement and holders of our Notes due 2024 and Notes due 2027, 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.

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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 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 adjustment items as permitted or required by our credit agreement and indentures. Adjusted EBITDA among other things:

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

• does not include acquisition, restructuring, and other costs incurred to realize future cost savings and enhance our operations.

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

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 28, 2019			December 29, 2018		Change			%
Net sales	$	6,068.6		$	4,615.7	$	1,452.9			31.5
Cost of goods sold		5,357.4			4,001.1		1,356.3			33.9
Gross profit		711.2			614.6		96.6			15.7
Operating expenses		630.7			541.6		89.1			16.5
Operating profit		80.5			73.0		7.5			10.3
Other expense, net
Interest expense		26.4			16.0		10.4			65.0
Other, net		(0.2	)		0.7		(0.9	)	NM
Other expense, net		26.2			16.7		9.5			56.9
Income before income taxes		54.3			56.3		(2.0	)		(3.6	)
Income tax expense		13.1			13.2		(0.1	)		(0.8	)
Net income	$	41.2		$	43.1	$	(1.9	)		(4.4	)
EBITDA	$	124.5		$	109.4	$	15.1			13.8
Adjusted EBITDA	$	142.9		$	116.9	$	26.0			22.2
Weighted-average common shares outstanding:
Basic		104.3			103.9		0.4			0.4
Diluted		106.4			104.9		1.5			1.4
Earnings per common share:
Basic	$	0.39		$	0.41	$	(0.02	)		(4.9	)
Diluted	$	0.39		$	0.41	$	(0.02	)		(4.9	)

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	Six Months Ended
	December 28, 2019			December 29, 2018		Change			%
Net sales	$	12,311.6		$	9,155.4	$	3,156.2			34.5
Cost of goods sold		10,889.0			7,947.2		2,941.8			37.0
Gross profit		1,422.6			1,208.2		214.4			17.7
Operating expenses		1,278.6			1,084.6		194.0			17.9
Operating profit		144.0			123.6		20.4			16.5
Other expense, net
Interest expense		43.7			31.6		12.1			38.3
Other, net		(0.2	)		0.5		(0.7	)	NM
Other expense, net		43.5			32.1		11.4			35.5
Income before income taxes		100.5			91.5		9.0			9.8
Income tax expense		23.2			20.2		3.0			14.9
Net income	$	77.3		$	71.3	$	6.0			8.4
EBITDA	$	230.7		$	195.7	$	35.0			17.9
Adjusted EBITDA	$	270.6		$	212.4	$	58.2			27.4
Weighted-average common shares outstanding:
Basic		104.2			103.7		0.5			0.5
Diluted		106.2			105.0		1.2			1.1
Earnings per common share:
Basic	$	0.74		$	0.69	$	0.05			7.2
Diluted	$	0.73		$	0.68	$	0.05			7.4

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 28, 2019		December 29, 2018		December 28, 2019		December 29, 2018
	(In millions)				(In millions)
Net income	$	41.2	$	43.1	$	77.3	$	71.3
Interest expense		26.4		16.0		43.7		31.6
Income tax expense		13.1		13.2		23.2		20.2
Depreciation		35.1		27.5		69.0		54.4
Amortization of intangible assets		8.7		9.6		17.5		18.2
EBITDA		124.5		109.4		230.7		195.7
Non-cash items (1)		5.7		4.7		12.7		9.6
Acquisition, integration and reorganization (2)		12.2		1.3		23.8		4.0
Other adjustment items (3)		0.5		1.5		3.4		3.1
Adjusted EBITDA	$	142.9	$	116.9	$	270.6	$	212.4

(1) Includes adjustments for non-cash charges arising from stock-based compensation and gain/loss on disposal of assets. Stock-based compensation expense was $4.4 million and $4.2 million for the second quarter of fiscal 2020 and fiscal 2019, respectively, and $8.8 million and $8.0 in the first six months of fiscal 2020 and fiscal 2019, respectively. In addition, this includes increases in the last-in-first-out (“LIFO”) reserve of $1.1 million and $0.7 million for the second quarter of fiscal 2020 and fiscal 2019, respectively, and increases in the LIFO reserve of $3.7 million and $1.6 million for the first six months of fiscal 2020 and fiscal 2019, respectively.

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

(3) Consists primarily of amounts related to fuel collar derivatives, certain financing transactions, lease amendments, legal settlements and franchise tax expense, and other adjustments permitted by our credit agreement.

Consolidated Results of Operations

Three and six months ended December 28, 2019 compared to the three and six months ended December 29, 2018

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 $1,452.9 million, or 31.5%, for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019 and increased $3,156.2 million, or 34.5%, for the first six months of fiscal 2020

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compared to the first six months of fiscal 2019. The increase in net sales was primarily attributable to recent acquisitions, sales growth in Vistar, particularly in the corrections, vending, and office coffee service channels, and case growth in Foodservice, particularly in the independent channel. The acquisition of Eby-Brown in the fourth quarter of 2019 contributed $1,260.8 million and $2,634.8 million of net sales in the second quarter and first six months of fiscal 2020, respectively, including $267.3 million and $559.0 million related to excise taxes for the respective periods. Case volume increased 6.7% and 8.7% in the second quarter and first six months of fiscal 2020, respectively, compared to the prior year periods.

Gross Profit

Gross profit increased $96.6 million, or 15.7%, for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019 and increased $214.4 million, or 17.7%, for the first six months of fiscal 2020 compared to the first six months of fiscal 2019. Within 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 2020, Foodservice grew our Performance Brand sales, which have higher gross profit per case compared to the other brands we sell. See “—Segment Results—Foodservice” below for additional discussion. Gross profit as a percentage of net sales was 11.7% for the second quarter of fiscal 2020 compared to 13.3% for the second quarter of fiscal 2019, and 11.6% for the first six months of fiscal 2020 compared to 13.2% for the first six months of fiscal 2019; the decrease reflecting Eby-Brown’s lower margins primarily due to tobacco sales.

Operating Expenses

Operating expenses increased $89.1 million, or 16.5%, for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019 and increased $194.0 million, or 17.9%, for the first six months of fiscal 2020 compared to the first six months of fiscal 2019. The increase in operating expenses for both the second quarter and first six months of fiscal 2020 was primarily driven by recent acquisitions and the increase in case volume and the resulting impact on variable operational and selling expenses. Operating expenses also increased by $6.5 million for the second quarter and $12.9 million for the first six months of fiscal 2020 as a result of professional fees related to acquisitions.

Depreciation and amortization of intangible assets increased from $37.1 million in the second quarter of fiscal 2019 to $43.8 million in the second quarter of fiscal 2020. Depreciation and amortization of intangible assets increased from $72.6 million for the first six months of fiscal 2019 to $86.5 million in the first six months of fiscal 2020. Depreciation of fixed assets increased as a result of capital outlays to support our growth.

Net Income

Net income decreased $1.9 million, or 4.4%, for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019. The decrease in net income was primarily attributable to a $10.4 million increase in interest expense, partially offset by a $7.5 million increase in operating profit. Net income increased $6.0 million, or 8.4%, for the first six months of fiscal 2020 compared to the first six months of fiscal 2019. The increase in net income was primarily attributable to a $20.4 million increase in operating profit, partially offset by a $12.1 million increase in interest expense and a $3.0 million increase in income tax expense.

The increase in operating profit was a result of the increase in gross profit discussed above, partially offset by the increase in operating expenses. The increase in interest expense was primarily the result of an increase in borrowings during fiscal 2020 compared to fiscal 2019.

The increase in income tax expense was primarily a result of the increase in income before taxes. Our effective tax rate for the three months ended December 28, 2019 was 24.2% compared to 23.4% for the three months ended December 29, 2018 and 23.1% for the first six months of fiscal 2020 compared to 22.1% for the first six months of fiscal 2019. The increase in the tax rate was due to an increase in non-deductible expenses and state income taxes, partially offset by a decrease in excess tax benefits related to stock-based compensation as a percentage of income before taxes. 

Segment Results

We have two reportable segments as described above – Foodservice and Vistar. Management evaluates the performance of these segments based various operating and financial metrics, including their respective sales growth and EBITDA.

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.

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

Net Sales

	Three Months Ended
	December 28, 2019			December 29, 2018			Change			%
Foodservice	$	3,847.4		$	3,671.9		$	175.5			4.8
Vistar		2,219.2			941.9			1,277.3			135.6
Corporate & All Other		78.6			69.3			9.3			13.4
Intersegment Eliminations		(76.6	)		(67.4	)		(9.2	)		(13.6	)
Total net sales	$	6,068.6		$	4,615.7		$	1,452.9			31.5

	Six Months Ended
	December 28, 2019			December 29, 2018			Change			%
Foodservice	$	7,778.3		$	7,317.9		$	460.4			6.3
Vistar		4,530.3			1,834.5			2,695.8			147.0
Corporate & All Other		158.6			139.1			19.5			14.0
Intersegment Eliminations		(155.6	)		(136.1	)		(19.5	)		(14.3	)
Total net sales	$	12,311.6		$	9,155.4		$	3,156.2			34.5

EBITDA

	Three Months Ended
	December 28, 2019			December 29, 2018			Change			%
Foodservice	$	113.6		$	104.3		$	9.3			8.9
Vistar		56.6			45.4			11.2			24.7
Corporate & All Other		(45.7	)		(40.3	)		(5.4	)		(13.4	)
Total EBITDA	$	124.5		$	109.4		$	15.1			13.8

	Six Months Ended
	December 28, 2019			December 29, 2018			Change			%
Foodservice	$	217.6		$	196.3		$	21.3			10.9
Vistar		108.1			77.0			31.1			40.4
Corporate & All Other		(95.0	)		(77.6	)		(17.4	)		(22.4	)
Total EBITDA	$	230.7		$	195.7		$	35.0			17.9

Segment Results—Foodservice

Three and six months ended December 28, 2019 compared to the three and six months ended December 29, 2018

Net Sales

Net sales for Foodservice increased $175.5 million, or 4.8%, from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased $460.4 million, or 6.3%, from the first six months of fiscal 2019 to the first six months of fiscal 2020. These increases in net sales were attributable to growth in cases sold, as well as an increase in selling price per case as a result of inflation. Securing new and expanded business with independent customers resulted in independent case growth of approximately 4.9% in the second quarter and 5.2% in the first six months of fiscal 2020 compared to the prior year periods. For the quarter, independent sales as a percentage of total segment sales were 33.7%.

EBITDA

EBITDA for Foodservice increased $9.3 million, or 8.9%, from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased $21.3 million, or 10.9%, from the first six months of fiscal 2019 to the first six months of fiscal 2020. 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 5.6% in the second quarter of fiscal 2020 and 6.4% in the first six months of fiscal 2020, compared to the prior year periods, as a result of an increase in the gross profit per case, as well as an increase in cases sold. The increase in gross profit per case was driven by a favorable shift in the mix of cases sold, including more Performance Brands products sold to our independent customers, as well as by an increase in procurement gains. Independent business has higher gross margins than Chain customers within this segment.

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Operating expenses excluding depreciation and amortization for Foodservice increased by $16.7 million, or 4.6%, from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased by $38.4 million, or 5.2%, from the first six months of fiscal 2019 to the first six months of fiscal 2020. 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 an increase in personnel expenses.

Depreciation and amortization of intangible assets recorded in this segment increased from $21.7 million in the second quarter of fiscal 2019 to $25.8 million in the second quarter of fiscal 2020 and increased from $42.6 million in the first six months of fiscal 2019 to $50.4 million in the first six months of fiscal 2020. This increase was the result of capital outlays for transportation equipment and information technology.

Segment Results—Vistar

Three and six months ended December 28, 2019 compared to the three and six months ended December 29, 2018

Net Sales

Net sales for Vistar increased $1,277.3 million, or 135.6%, from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased $2,695.8 million, or 147.0%, from the first six months of fiscal 2019 to the first six months of fiscal 2020. This increase was driven by recent acquisitions, as well as by sales growth in the segment’s corrections, vending, and office coffee service channels. The acquisition of Eby-Brown in the fourth quarter of 2019 contributed $1,260.8 million and $2,634.8 million of net sales in the second quarter and first six months of fiscal 2020, respectively, including $267.3 million and $559.0 million related to excise taxes for the respective periods.

EBITDA

EBITDA for Vistar increased $11.2 million, or 24.7%, from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased $31.1 million, or 40.4%, from the first six months of fiscal 2019 to the first six months of fiscal 2020. Gross profit dollar growth of $70.1 million, or 49.0%, for the second quarter fiscal 2020 and $153.4 million, or 57.4%, for the first six months of fiscal 2020 compared to the respective prior year periods, was driven by recent acquisitions. On occasion, the Company may now earn a higher gross profit on cigarette inventory and excise tax stamp quantities when manufacturers increase their prices or when jurisdictions increase their excise tax rates. During the first six months of fiscal 2020 the Company recognized $5.6 million of gross profit related to increases in excise tax rates. Additionally, there was an increase in procurement gains, as well as a favorable shift in channel mix that impacted this segment. Gross profit as a percentage of net sales declined from 15.2% for the second quarter of fiscal 2019 to 9.6% for the second quarter of fiscal 2020 and from 14.6% for the first six months of fiscal 2019 to 9.3% the first six months of fiscal 2020 as a result of Eby-Brown’s lower margins.

Operating expense dollar growth, excluding depreciation and amortization, increased $58.9 million, or 60.2%, for the second quarter of fiscal 2020 and $122.3 million, or 64.2%, for the first six months of fiscal 2020 compared to the prior year periods. Operating expenses increased primarily as a result of the acquisition of Eby-Brown.

Depreciation and amortization of intangible assets recorded in this segment increased from $9.3 million in the second quarter of fiscal 2019 to $11.5 million in the second quarter of fiscal 2020 and increased from $18.2 million in the first six months of fiscal 2019 to $23.1 million in the first six months of fiscal 2020. Depreciation of fixed assets and amortization of intangible assets increased as a result of recent acquisitions.

Segment Results—Corporate & All Other

Three and six months ended December 28, 2019 compared to the three and six months ended December 29, 2018

Net Sales

Net sales for Corporate & All Other increased $9.3 million from the second quarter of fiscal 2019 to the second quarter of fiscal 2020 and increased $19.5 million from the first six months of fiscal 2019 to the first six months of fiscal 2020. The increase was primarily attributable to an increase in logistics services provided to our other segments.

EBITDA

EBITDA for Corporate & All Other was a negative $45.7 million for the second quarter of fiscal 2020 compared to a negative $40.3 million for the second quarter of fiscal 2019 and was a negative $95.0 million for the first six months of fiscal 2020 compared to a negative $77.6 million for the first six months of fiscal 2019. These declines in EBITDA were primarily driven by an increase in professional and legal fees of $5.8 million and $12.1 million in the second quarter of fiscal 2020 and the first six months of fiscal 2020, respectively, compared to prior year periods.

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Depreciation and amortization of intangible assets recorded in this segment increased from $6.1 million in the second quarter of fiscal 2019 to $6.5 million in the second quarter of fiscal 2020 and increased from $11.8 million in the first six months of fiscal 2019 to $13.0 million in the first six months of fiscal 2020 as a result of recent capital outlays for information technology.

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 12 months and to maintain sufficient liquidity for normal operating purposes.

We borrow under our credit 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 may from time to time 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 credit 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.

At December 28, 2019, our cash balance totaled $1,101.9 million, including restricted cash of $1,089.2 million, as compared to a cash balance totaling $25.4 million, including restricted cash of $10.7 million, at June 29, 2019. This increase in cash during the first six months of fiscal 2020 was attributable to net cash provided by operating activities of $157.8 million and net cash provided by financing activities of $967.2 million, partially offset by net cash used in investing activities of $48.5 million.

On September 27, 2019, the Escrow Issuer (which merged with and into Performance Food Group, Inc. upon the completion of the Reinhart acquisition) issued and sold $1,060.0 million aggregate principal amount of its Notes due 2027. As of December 28, 2019, the gross proceeds from the issuance of the Notes due 2027 were held in escrow and are classified as restricted cash on the Company’s consolidated balance sheet.

On December 30, 2019, PFGC and Performance Food Group, Inc. entered into the Amended Credit Agreement and borrowed $466.5 million to help finance the Reinhart acquisition. See “Financing Activities” below for a full description of the amended terms related to the Amended Credit Agreement.

On December 30, 2019, the Company physically settled the equity forward at the forward sale price of $42.70 per share, net of the underwriting discount. The Company used the $491.0 million net proceeds from the offering of shares of the Company’s common stock to finance part of the cash consideration payable in connection with the acquisition of Reinhart.

Following the completion of the Reinhart acquisition on December 30, 2019, the funds related to the Notes due 2027 were released from escrow and were used, together with the net proceeds from the offering of shares of the Company’s common stock and borrowings under the Amended Credit Agreement, to fund the cash consideration for the Reinhart acquisition and to pay related fees and expenses.

Operating Activities

Six months ended December 28, 2019 compared to the six months ended December 29, 2018

During the first six months of fiscal 2020 and fiscal 2019, our operating activities provided cash flow of $157.8 million and $70.0 million, respectively. The increase in cash flows provided by operating activities in the first six months of fiscal 2020 compared to the first six months of fiscal 2019 was largely driven by higher operating income and improvements in working capital.

Investing Activities

Cash used in investing activities totaled $48.5 million in the first six months of fiscal 2020 compared to $116.4 million in the first six months of fiscal 2019. These investments consisted primarily of payments for business acquisitions of $57.0 million for the first six months of fiscal 2019 with no corresponding amount for the first six months of fiscal 2020, and capital purchases of property, plant, and equipment of $49.0 million and $60.1 million for the first six months of fiscal 2020 and the first six months of fiscal 2019, respectively. For the first six months of fiscal 2020, purchases of property, plant, and equipment primarily consisted of outlays for information technology, warehouse equipment, warehouse expansions and improvements, and transportation equipment. The following table presents the capital purchases of property, plant, and equipment by segment:

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	Six Months Ended
(Dollars in millions)	December 28, 2019		December 29, 2018
Foodservice	$	16.3	$	42.7
Vistar		21.5		6.7
Corporate & All Other		11.2		10.7
Total capital purchases of property, plant and equipment	$	49.0	$	60.1

As of December 28, 2019, the Company had commitments of $20.6 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings from the Amended Credit Agreement to fulfill these commitments.

Financing Activities

During the first six months of fiscal 2020, our financing activities provided cash flow of $967.2 million, which consisted primarily of $1,060.0 million in cash received from the issuance and sale of the Notes due 2027, partially offset by $72.6 million in net payments under our ABL Facility.

During the first six months of fiscal 2019, our financing activities provided cash flow of $46.7 million, which consisted primarily of $65.4 million in net borrowings under our ABL Facility.

The following describes our financing arrangements as of December 28, 2019:

ABL Facility: As of December 28, 2019, PFGC, a wholly-owned subsidiary of the Company, is a party to the ABL Facility, which has an aggregate principal amount of $2.4 billion and matures on May 17, 2024. 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, and secured by the majority of the assets of, 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 of 0.25%.

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

(Dollars in millions)	As of December 28, 2019			As of June 29, 2019
Aggregate borrowings	$	786.4		$	859.0
Letters of credit under credit agreements		95.0			89.9
Excess availability, net of lenders’ reserves of $40.3 and $38.6		1,295.2			1,182.7
Average interest rate		3.22	%		4.01	%

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) $180.0 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 the ABL Facility may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

Amended Credit Agreement: On December 30, 2019, PFGC and Performance Food Group, Inc. entered into the Amended Credit Agreement with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amends and restates the ABL Facility. The Amended Credit Agreement, among other things, (i) increases the aggregate principal amount available to $3.0 billion and (ii) extends the stated maturity date to December 30, 2024. Like the ABL Facility, the

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Amended Credit Agreement provides for up to $800 million of uncommitted incremental facilities. Additionally, certain covenants were amended to require the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $200.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days.

Senior Notes due 2024: On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its Notes due 2024, pursuant to an indenture dated as of May 17, 2016. The Notes due 2024 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 due 2024 are not guaranteed by Performance Food Group Company.

The proceeds from the Notes due 2024 were used to pay in full the remaining outstanding aggregate principal amount of the loans under the Company’s 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 due 2024.

The Notes due 2024 were issued at 100.0% of their par value. The Notes due 2024 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 due 2024 will have the right to require Performance Food Group, Inc. to make an offer to repurchase each holder’s Notes due 2024 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. currently may redeem all or part of the Notes due 2024 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.325% and 100.000% of the principal amount redeemed on June 1, 2020 and June 1, 2021, respectively.

The indenture governing the Notes due 2024 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 due 2024 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2024 to become or be declared due and payable.

Senior Notes due 2027: On September 27, 2019, Escrow Issuer (to be merged with and into Performance Food Group, Inc.) issued and sold $1,060.0 million aggregate principal amount of Notes due 2027. On December 30, 2019, the proceeds from the Notes due 2027 were used to finance part of the Reinhart acquisition and other transaction costs incurred with the Notes due 2027.

Following the completion of the Reinhart acquisition, Performance Food Group, Inc. assumed the obligation of the Escrow Issuer and the Notes due 2027 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 due 2027 are not guaranteed by Performance Food Group Company.

The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 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 due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 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 due 2027 at any time prior to October 15, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2027 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 October 15, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.375% and 100% of the principal amount redeemed on October 15, 2023 and October 15, 2024, respectively. In addition, at any time prior to October 15, 2022, Performance Food Group Inc. may redeem up to 40% of the Notes due 2027 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 due 2027 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

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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 due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.

Letters of Credit Facility: On August 9, 2018, Performance Food Group, Inc. and PFGC entered into the Letters of Credit Facility.  The Letters of Credit Facility is an uncommitted facility that provides for the issuance of letters of credit in an aggregate amount not to exceed $40.0 million. Each letter of credit shall have a term not to exceed one year; however, a letter of credit may renew automatically in accordance with its terms. A fee equal to 2.5% per annum on the average daily amount available to be drawn on each day under each outstanding letter of credit is payable quarterly. As of December 28, 2019, the Company has $28.3 million letters of credit outstanding under the Letters of Credit Facility.

As of December 28, 2019, we were in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2024 and Notes due 2027.

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 Form 10-K for details on our contractual obligations and commitments to make specified contractual future cash payments as of June 29, 2019.

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.

Total Assets by Segment

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

Total assets for Foodservice increased $242.4 million from $3,056.7 million as of December 29, 2018 to $3,299.1 million as of December 28, 2019. During this time period, this segment increased its property, plant and equipment, inventory and accounts receivable, which was partially offset by a decrease in intangible assets. Total assets for Foodservice increased $146.8 million from $3,152.3 million as of June 29, 2019 to $3,299.1 million as of December 28, 2019. For both periods, Foodservice’s assets also increased as a result of the Company’s June 30, 2019 adoption of ASC 842 and the recognition of operating lease right-of-use assets of $153.4 million.

Total assets for Vistar increased $620.4 million from $881.6 million as of December 29, 2018 to $1,502.0 million as of December 28, 2019. During this time period, this segment increased its accounts receivable, inventory, property, plant and equipment, and goodwill, primarily due to acquisitions. Total assets for Vistar increased $231.0 million from $1,271.0 million as of June 29, 2019 to $1,502.0 million as of December 28, 2019. For both periods, Vistar’s assets also increased as a result of the Company’s June 30, 2019 adoption of ASC 842 and the recognition of operating lease right-of-use assets of $227.3 million.

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, and goodwill and other intangible assets, which are described in the Form 10-K. 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 June 29, 2019. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in the Form 10-K.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Regulations under 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 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 Form 10-Q, were effective to accomplish their objectives at a reasonable assurance level.

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 28, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 28, 2019, there have been no material changes to legal proceedings from those discussed in the Form 10-K.

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 Form 10-K, which is 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 2020.

Period	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan(2)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)(2)
September 29, 2019—October 26, 2019		33,288	$	46.01		—		240.7
October 27, 2019—November 23, 2019		1,401		43.51		—		240.7
November 24, 2019—December 28, 2019		3,265		46.72		—		240.7
Total		37,954	$	45.98		—

(1) During the second quarter of fiscal 2020, the Company repurchased 37,954 shares of the Company’s common stock via share withholding for option cost and payroll tax obligations due from employees in connection with the delivery of shares of the Company’s common stock under our incentive plans.

(2) On November 13, 2018, the Board of Directors authorized a share repurchase program for up to $250 million of the Company’s outstanding common stock. The share repurchase program does not have an expiration date and may be amended, suspended, discontinued at any time. Repurchases under this program depend upon market place conditions and other factors, including compliance with the covenants under the Amended Credit Agreement and the indentures governing the Notes due 2024 and Notes due 2027. The share repurchase program remains subject to the discretion of the Board of Directors. During the three months ended December 28, 2019, the Company did not repurchase any shares pursuant to the share repurchase program. As of December 28, 2019, approximately $240.7 million remained available for additional share repurchases.

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
3.1	Amended and Restated Certificate of Incorporation of Performance Food Group Company (incorporate by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-37578) filed with the Securities and Exchange Commission on November 13, 2019).
4.1	First Supplemental Indenture, dated December 30, 2019, by and among PFG Escrow Corporation, PFGC, Inc., each of the subsidiaries of PFGC, Inc. signatory thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-37578) filed with the Securities and Exchange Commission on December 30, 2019).
10.1	Form of Restricted Stock Unit Agreement (Non-Employee Director) under the 2015 Omnibus Incentive Plan, as amended.
10.2	Form of Deferred Stock Unit Agreement (Non-Employee Director) under the 2015 Omnibus Incentive Plan, as amended.
10.3	Form of Fourth Amended and Restated Credit Agreement, dated December 30, 2019, among PFGC, Inc., Performance Food Group, Inc., Wells Fargo, National Association, as Administrative Agent and Collateral Agent, the other borrowers from time to time party thereto, and the other lenders thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-37578) filed with the Securities and Exchange Commission on December 31, 2019).
10.4	Amendment No. 1 to the 2015 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A (File No. 001-37578) filed with the Securities and Exchange Commission on November 19, 2019).
10.5	Performance Food Group Company Deferred Compensation 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	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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 5, 2020	By:	/s/ James D. Hope
	Name:	James D. Hope
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Signatory)

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EX-10.1

Exhibit 10.1

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, as it may be amended from time to time (the “Plan”), hereby grants to the Participant set forth below, the number of Restricted Stock Units, subject to a deferral feature (the “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), 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 Name]

Date of Grant: November 13, 2019

Vesting Commencement Date: November 13, 2019

Number of

Deferred Stock Units: [____]

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), as of such Termination, such Participant shall fully vest in such Participant’s Deferred Stock Units to the extent not then vested or previously forfeited or cancelled.

In addition, in the event of a Change in Control prior to the applicable vesting date (or event), immediately prior to the Change in Control, such Participant shall fully vest in such Participant’s Deferred Stock Units to the extent not then vested or previously forfeited or cancelled.

***

DEFERRED STOCK UNIT AGREEMENT
UNDER THEPERFORMANCE 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, as it may be amended from time to time (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.  In settlement of each Deferred Stock Unit (as adjusted under the Plan, as applicable) that becomes vested hereunder, the Company will deliver to the Participant, without charge, one share of Common Stock 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” (as defined in Section 409A of the Code) from the Company and its Subsidiaries  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.  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, but subject to Section 409A of the Code, 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. Treatment of Deferred Stock Units Upon Termination.  The provisions of Section 9(c)(ii) of the Plan are incorporated herein by reference and made a part hereof.

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5. 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.

6. 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.

7. 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 shares of Common Stock 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 (rounded up to the nearest whole share of Common Stock), and shall be delivered at the same time as the underlying Deferred Stock Units to which such dividend equivalents 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.

8. 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 Deferred Stock Units and the related dividend equivalents 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 and the related dividend equivalents.

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9. 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.

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

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

12. 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.

13. 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.

14. 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.

15. Section 409A.  

(a) It is intended that the Deferred Stock Units and dividend equivalents granted hereunder are intended to be compliant with Section 409A of the Code and the regulations promulgated thereunder and shall be limited, construed and interpreted as such, including, without limitation, by delaying the issuance of shares of Common Stock contemplated hereunder.  In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.  For purposes of applying the provisions of Section 409A of the Code to this Deferred Stock Unit Agreement, each separately identified amount to which the Participant is entitled shall be treated as a separate payment.

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(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-10.2

Exhibit 10.2

RESTRICTED 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, as it may be amended from time to time (the “Plan”), hereby grants to the Participant set forth below, the number of Restricted Stock Units set forth below.  The Restricted Stock Units are subject to all of the terms and conditions as set forth herein, in the Restricted Stock Unit Agreement (attached hereto), 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 Name]

Date of Grant: November 13, 2019

Vesting Commencement Date: November 13, 2019

Number of

Restricted Stock Units: [_____]

Vesting Schedule: Provided the Participant has not undergone a Termination at the time of the applicable vesting date (or event), 100% of the Restricted 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), as of such Termination, such Participant shall fully vest in such Participant’s Restricted Stock Units to the extent not then vested or previously forfeited or cancelled.

In addition, in the event of a Change in Control prior to the applicable vesting date (or event), immediately prior to the Change in Control, such Participant shall fully vest in such Participant’s Restricted Stock Units to the extent not then vested or previously forfeited or cancelled.

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RESTRICTED STOCK UNIT AGREEMENT
UNDER THEPERFORMANCE FOOD GROUP COMPANY
2015 OMNIBUS INCENTIVE PLAN

Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Restricted Stock Unit Agreement (this “Restricted Stock Unit Agreement”) and the Performance Food Group Company 2015 Omnibus Incentive Plan, as it may be amended from time to time (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 Restricted Stock Units.  Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Restricted Stock Units provided in the Grant Notice (with each Restricted Stock Unit representing an unfunded, unsecured right to receive one share of Common Stock).  The Company may make one or more additional grants of Restricted Stock Units to the Participant under this Restricted Stock Unit Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Restricted Stock Unit Agreement to the extent provided therein.  The Company reserves all rights with respect to the granting of additional Restricted Stock Units hereunder and makes no implied promise to grant additional Restricted Stock Units.

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

3. Settlement of Restricted Stock Units.  In settlement of each Restricted Stock Unit (as adjusted under the Plan, as applicable) that becomes vested hereunder, the Company will deliver to the Participant, without charge, one share of Common Stock as soon as reasonably practicable (and, in any event, within two and one-half months) following the applicable vesting date.  Notwithstanding anything in this Restricted 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 Restricted 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. Treatment of Restricted Stock Units Upon Termination.  The provisions of Section 9(c)(ii) of the Plan are incorporated herein by reference and made a part hereof.

5. Company; Participant.

(a) The term “Company” as used in this Restricted 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 Restricted 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 Restricted 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.

6. Non-Transferability.  The Restricted Stock Units may not be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by the Participant, unless such transfer is

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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.

7. No Rights as Stockholder; Dividend Equivalents. The Participant or a permitted transferee of the Restricted Stock Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a Restricted 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 Restricted 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 shares of Common Stock having a Fair Market Value on the date that the underlying Restricted Stock Units are settled in accordance with Section 3 above equal to the amount of such applicable dividends (rounded up to the nearest whole share of Common Stock), and shall be delivered at the same time as the underlying Restricted Stock Units to which such dividend equivalents relate are settled in accordance with Section 3 above.  In the event that any Restricted Stock Unit is forfeited by its terms, the Participant shall have no right to dividend equivalent payments in respect of such forfeited Restricted Stock Units.

8. 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 Restricted Stock Units and the related dividend equivalents a number of shares with a Fair Market Value, on the date that the Restricted 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 Restricted Stock Units and the related dividend equivalents.

9. Notice.  Every notice or other communication relating to this Restricted 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.

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10. No Right to Continued Service.  This Restricted Stock Unit Agreement does not confer upon the Participant any right to continue as an employee, member of the Board, or service provider to the Company.

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

12. 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 Restricted 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.

13. Governing Law.  This Restricted 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 Restricted 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 Restricted 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.

14. 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 Restricted Stock Unit Agreement (including the Grant Notice), the Plan shall govern and control.

15. Section 409A.  It is intended that the Restricted Stock Units and dividend equivlanets granted hereunder shall be exempt from Section 409A of the Code pursuant to the “short-term deferral” rule applicable to such section, as set forth in the regulations or other guidance published by the Internal Revenue Service thereunder.

052533.0000036 EMF_US 77493340v2

 

EX-10.5

Exhibit 10.5

PERFORMANCE FOOD GROUP COMPANY
DEFERRED COMPENSATION PLAN

PERFORMANCE FOOD GROUP COMPANYDEFERRED COMPENSATION PLAN

Table of Contents

Page

Article I DEFINITIONS 1

Article II PARTICIPATION 6

Article III Deferrals 7

Article IV CREDITS TO ACCOUNT AND INCOME 8

Article V VESTING OF BENEFITS 9

Article VI PAYMENT OF BENEFIT 9

Article VII ADMINISTRATION OF THE PLAN 13

Article VIII CLAIMs REVIEW PROCEDURE 15

Article IX LIMITATION OF RIGHTS 20

Article X AMENDMENT TO OR TERMINATION OF THE PLAN 20

Article XI Participating employers 21

Article XII GENERAL AND MISCELLANEOUS 21

PERFORMANCE FOOD GROUP COMPANYDEFERRED COMPENSATION PLAN

Preamble

Performance Food Group Company (the "Company") adopted this Performance Food Group Company Deferred Compensation Plan (the "Plan") as of April 1, 2020 (the "Effective Date") as a strategy to encourage and reward the continued service of Directors and certain key Employees, as designated by the Company, who are essential to the continued viability of the Company.

The Company intends that the Plan will be maintained for the exclusive benefit of the Participants, who shall constitute Directors and a select group of management and key Employees, and that any Participant or Beneficiary of the Plan shall have the status of an unsecured general creditor with respect to the Plan.  The Plan is intended to comply with Section 409A of the Code.

The terms of the Plan are as follows:

Article I
DEFINITIONS

1.1"Account(s)" shall mean each Base Compensation Deferral Account, Bonus Compensation Deferral Account, and/or Employer Discretionary Credits Account.  The term "Account" shall refer only to a bookkeeping entry and shall not be construed to require the segregation of assets on behalf of a Participant or Beneficiary.  

1.2"Base Salary" shall mean the earnings paid to a Participant by the Employer for personal services, prior to withholding as reported on Form W-2, including, overtime pay commissions and bonuses other than Bonus Compensation, but excluding (a) contributions to, or distributions under, the Plan, (b) special allowances (such as statutory disability pay and disability benefits paid to a Participant during an authorized leave of absence, moving expenses, car expenses, tuition reimbursement, meal allowances, the cost of excess group life insurance income includible in taxable income, and similar items), (c) ordinary compensation from the granting, vesting and/or distribution of awards under the Company’s Omnibus Equity Incentive Plan, or under the Company’s Employee Stock Purchase Plan, and (d) the taxable value of any awards and/or gifts, including cash gifts, gift certificates, gift cards, and similar items of readily convertible cash value given to a Participant by the Employer in connection with a holiday or occasional corporate event.  Base Salary shall include all salary reduction contributions by a Participant under the Performance Food Group Employee Savings Plan and any salary reduction contributions to a cafeteria plan under Section 125 of the Code, and any elective amounts that are not includible in the gross income of the Participant under Section 132(f)(4) of the Code.  Notwithstanding the foregoing, if a Participant is performing service in the uniformed services (as defined in chapter 43 of title 38 of the United States Code) while on active duty for a period of more than thirty (30) days and is receiving amounts which represent all or a portion of the Base Salary that the Participant would have received from the Employer if the Participant were performing services for the Employer, such amounts shall be treated as Base Salary for all purposes under the Plan.

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1.3"Base Compensation" shall meanBase Salary or Director Fees, as applicable.

1.4"Base Compensation Deferral Account" shall mean a bookkeeping account established on the records of the Company for a Participant that is credited with such Participant's Base Compensation deferrals under Section 3.1.  A Participant shall have a one-hundred percent (100%) nonforfeitable interest in his or her Base Compensation Deferral Account(s) at all times.  

1.5"Beneficiary" shall mean the person or persons designated by each Participant under the Plan pursuant to the written beneficiary designation in the form provided by the Plan Committee; provided, however, that a Participant may designate a different Beneficiary hereunder by delivering to the Plan Committee a new written beneficiary designation in the form provided by the Plan Committee and executed specifically with respect to the Plan.  If a Participant fails to name a Beneficiary, if a Beneficiary named by the Participant predeceases the Participant or dies before distribution of the Participant's Account(s) or if such designation is not effective for any reason as determined by the Plan Committee, then the entire value of the Participant's Account(s) will be distributed as follows: (a) if a Participant leaves a surviving spouse, the Participant's distributions shall be paid to such surviving spouse; or (b) if a Participant leaves no surviving spouse nor designated Beneficiary, the Participant's Beneficiary shall be the person or persons surviving the Participant in the first of the following classes in which there is a survivor, share and share alike:

(i)The Participant's natural born or legally adopted children, except that if any such children of the Participant predecease the Participant but leave issue surviving the Participant, such issue will take, by right of representation, the share their parent would have taken if living;

(ii)The Participant's parents; and

(iii)The Participant's estate.

1.6"Board" shall mean the Board of Directors of the Company.

1.7"Bonus Compensation" shall mean with respect to any Participant for a Plan Year, the amount paid under the Company's annual incentive plan, calculated after ensuring that there is a sufficient amount remaining to provide for all of the following items to the extent such items are not otherwise deducted from Base Compensation: (i) all applicable federal and state taxes required to be withheld, (ii) the amount of elective deferrals that such Participant has elected to contribute to the Performance Food Group Employee Savings Plan, (iii) all amounts elected by such Participant to be contributed under any Employer sponsored plan by reason of Section 125 of the Code, (iv) all other amounts elected by such Participant to be paid as participant contributions to any Employer­sponsored plan, and (v) all other deductions authorized or consented to by such Participant or otherwise required by law, provided that to the maximum extent possible, such deductions shall reduce the portion of the Bonus Compensation that is not subject to a Deferral Election.

1.8"Bonus Compensation Deferral Account" shall mean a bookkeeping account established on the records of the Company for a Participant that is credited with such Participant's Bonus Compensation deferrals under Section 3.2.  A Participant shall have a one-hundred percent (100%) nonforfeitable interest in his or her Bonus Compensation Deferral Account(s) at all times.  

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1.9"Change inControl" shall mean the occurrence of any of the following:

(a)the acquisition (whether by purchase, merger, consolidation, combination, or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and any successor thereto (the "Exchange Act") of more than fifty percent (50%) (on a fully diluted basis) of either (i) the then outstanding shares of the Company's common stock, taking into account as outstanding for this purpose such Common Stock ("Common Stock") issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of the Plan, the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company or any Affiliate; or (ii) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate; or (iii) in respect of the Account(s) of a particular Participant, any acquisition by the Participant or any group of Persons including the Participant (or any entity controlled by the Participant or any group of Persons including the Participant);

(b)during any period of twelve (12) months, individuals who, at the beginning of such period, constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to the Effective Date, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to directors of the Company or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or

(c)the sale, transfer, or other disposition of all or substantially all of the assets of the Company to any Person that is not an Affiliate of the Company.

For purposes of this definition, (A) "Person" shall mean any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) and (B) "Affiliate" shall mean any Person that directly or indirectly controls, is controlled by, or is under common control with the Company. The term "control" (including, with correlative meaning, the terms "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract, or otherwise.

1.10"Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and the rules and regulations promulgated thereunder.

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1.11"Company" shall meanPerformance Food Group Company, a Delaware corporation, or any successor.

1.12'"Compensation Committee" shall mean the Compensation Committee and Human Resources Committee of the Board.

1.13"Credit Date" shall mean each business day of the Plan Year.

1.14"Deferral Election" means an election by a Participant to defer Base Compensation, Bonus Compensation and/or Employer Discretionary Credits.  A Participant must make a new Deferral Election with respect to Base Compensation, Bonus Compensation and/or Employer Discretionary Credits for each Plan Year.

1.15"Director" means a member of the Board who is not an Employee.

1.16"Director Fees" means the annual cash retainer and all meeting fees payable in cash to a Director for service as a member of the Board, including retainers and meeting fees paid for service as the lead independent Director, a committee member (including a special committee) or a committee chairman.  

1.17"Disability" means that a Participant is: (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii)  by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees; or (iii) determined to be totally disabled by the Social Security Administration.

1.18"Distribution Date" means the date, as permitted by the Plan Committee, specified by a Participant in his or her Election Notice for the payment of all or a portion of such Participant's Account(s).

1.19"Effective Date" means April 1, 2020.

1.20"Election Notice" means the notice or notices established from time to time by the Plan Committee for making Deferral Elections under the Plan.  The Election Notice includes the amount or percentage of Base Compensation and/or Bonus Compensation to be deferred (subject to any minimum or maximum amounts set forth herein), the Distribution Date(s), and the form of payment (lump sum or installments).

1.21"Election Period" shall mean the period established by the Plan Committee with respect to each Plan Year during which a Deferral Election for such Plan Year must be made in accordance with the requirements of Section 409A of the Code, as follows:

(a)General Rule.  Except as provided in (b) and (c) below, the Election Period shall end no later than the last day of the Plan Year immediately preceding the Plan Year to which the Deferral Election relates.

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(b)Performance-based Compensation. If any Bonus Compensation constitutes "performance-based compensation" within the meaning of Treas. Reg. Section 1.409A-1(e), then the Election Period for such amounts shall be determined by the Plan Committee in accordance with Treas. Reg. Section 1.409A-1(e) (and in no event later than the date on which the amount of the performance-based compensation becomes readily ascertainable).

(c)New Participants. The Election Period for an individual who is treated under Section 409A of the Code as first becoming eligible to participate in an "account balance" plan maintained by the Company shall end no later than thirty (30) days after the individual becomes eligible to participate in the Plan and shall apply only with respect to compensation paid for services performed after the date of the Deferral Election.

1.22"Employee" shall mean an employee of the Company or any Employer.  

1.23"Employer" shall mean a corporation, trade or business that, together with the Company, is treated as a single employer under Sections 414(b) or (c) of the Code that, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees.  

1.24"Employer Discretionary Credits" shall mean amounts, if any, allocated to a Participant under Section 3.3.  

1.25"Employer Discretionary Credits Account" shall mean a bookkeeping account established on the records of the Company for a Participant that is credited with such Participant's Employer Discretionary Credits under Section 3.3.

1.26"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

1.27"FICA Amount" shall have the meaning set forth in Section 6.6(d).

1.28"Insolvent" shall mean (i) the Company is unable to pay its debts as they become due or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code (or any successor federal statute).

1.29"Participant" shall mean a Director or member of management or a key Employee who has been selected for participation in the Plan, as set forth in Article II hereof.

1.30"Plan" shall mean the Performance Food Group Company Deferred Compensation Plan, as it may be amended from time to time.

1.31"Plan Committee" shall mean the individual or committee that is authorized by the Compensation Committee to administer the Plan.  In any case, where the Plan refers to the Plan Committee, such reference is deemed to be a reference to any delegate of the Plan Committee appointed for such purpose.

1.32"Plan Year" shall mean the twelve-consecutive month period commencing January 1 of each calendar year, provided that the initial Plan Year shall commence on the Effective Date and end on the following December 31.

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1.33"Separation from Service" shall mean a "separation from service" within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. Section 1.409A-1(h) including the default presumptions thereunder.

1.34"Specified Employee" shall mean a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code and Treas. Reg. Section 1.409A-1(i).

1.35"Specified Employee Payment Date" shall mean the first payroll date of the seventh month following a Specified Employee's Separation from Service (or, if earlier, upon the date of the Specified Employee's death).

1.36"Unforeseeable Emergency" shall mean a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant's spouse, or the Participant's dependent (as defined in Section 152(a) of the Code); (ii) a loss of the Participant's property due to casualty; or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Plan Committee.

1.37"Vested Interest" shall mean the percentage of a Participant's Account(s) that, pursuant to Section 5.1, is vested.

Article II
PARTICIPATION

2.1Eligibility to Participate.  For any Plan Year, participation in the Plan shall be made available to (i) each individual who is a Director and (ii) the individuals whose position qualifies for an equity grant under the Company's 2015 Omnibus Incentive Plan, as amended, or successor thereto, for the Company's fiscal year that ends within the Plan Year, as determined by the Compensation Committee.  Each such individual will be notified by the Plan Committee of his or her eligibility to participate in the Plan, with such notification specifying the date of participation.  The determination as to the eligibility of any individual to initially participate in the Plan or to continue as a Participant shall be made in the sole and absolute discretion of the Compensation Committee, whose decision in that regard shall be conclusive and binding for all purposes hereunder.  Eligibility to participate in the Plan in one Plan Year does not guarantee eligibility to participate in any subsequent Plan Year.

2.2Cessation of Active Participation.  Notwithstanding any provision herein to the contrary, an Employee or Director who is a Participant shall cease to be entitled to defer Base Compensation and/or Bonus Compensation hereunder as of the earliest to occur of: (i) the date of the termination of the Plan; (ii) the date such individual is no longer eligible to participate under Section 2.1, or (iii) any earlier cessation date designated by the Compensation Committee and communicated to the affected individual prior to the effective date of such cessation.  Each former Participant who continues to have a positive balance in any of his or her Account(s) under the terms of the Plan after his or her participation ceases will continue to be treated as if he or she were a Participant for purposes of the Plan until all of his or her Account(s) have been distributed under the terms of the Plan, except that such Participant will not be eligible to make a Deferral Election

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or receive an allocation of Employer Discretionary Credits unless and until such former Participant again becomes eligible under Section 2.1 and resumes participation in the Plan.

2.3Election Notice.  During the Election Period, a Participant shall submit an executed Election Notice to the Plan Committee to irrevocably elect to defer a portion of his or her Base Compensation and/or Bonus Compensation for the applicable Plan Year pursuant to Sections 3.1, 3.2, and 3.3 hereunder.  A Participant's Deferral Election for a Plan Year expires at the end of such Plan Year, and a new Election Notice must be filed for each subsequent Plan Year. A Participant's failure to properly complete an Election Notice in accordance with this Section 2.3 shall be deemed an election by the Participant to defer zero percent (0%) of his or her Base Compensation and/or Bonus Compensation, as applicable.

Article III
Deferrals

3.1Base Compensation Deferrals.  For any Plan Year, a Participant may elect, pursuant to Section 2.3, to defer an integral percentage of from one percent (1%) to fifty (50%) of his or her Base Compensation otherwise payable to him or her.  Notwithstanding any provision of the Plan or a Deferral Election to the contrary, however, the amount withheld from any payment of Base Compensation shall be reduced automatically, if necessary, so that it does not exceed the amount of such payment net of all withholding and authorized deductions, other than any reduction pursuant to such Deferral Election.  Any amounts withheld pursuant to this Section 3.1 from the Base Compensation otherwise payable to a Participant shall be credited to his or her Base Compensation Deferral Account as of the date on which such amounts would otherwise have been paid.  Base Compensation for a Plan Year not deferred by a Participant pursuant to this Section 3.1 shall be received by such Participant in cash except as provided by any other plan maintained by the Company.  Except as provided in Section 3.4, a Deferral Election of Base Compensation pursuant to this Section 3.1 shall be irrevocable through the end of the Plan Year for which it is made.

3.2Bonus Compensation Deferrals. For any Plan Year, a Participant may elect, pursuant to Section 2.3, to defer an integral percentage of from one percent (1%) to seventy-five percent (75%) of the Bonus Compensation otherwise payable to the Participant.  Notwithstanding any provision of the Plan or a Deferral Election to the contrary, the amount withheld from any Bonus Compensation shall be reduced automatically, if necessary, so that it does not exceed the amount of such payment net of all withholding and authorized deductions other than any reduction pursuant to such Deferral Election.  Any amounts withheld pursuant to this Section 3.2 from the Bonus Compensation otherwise payable to a Participant shall be credited to his or her Bonus Compensation Deferral Account as of the date on which such amounts would otherwise have been paid.  Bonus Compensation for a Plan Year not deferred by a Participant pursuant to this Section 3.2 shall be received by such Participant in cash except as provided by any other plan maintained by the Company.  Except as provided in Section 3.4, a Deferral Election of Bonus Compensation pursuant to this Section 3.2 shall be irrevocable through the end of the Plan Year for which it is made.

3.3Company Deferrals.  The Plan Committee may, from time to time in its sole and absolute discretion, credit a Participant's Employer Discretionary Credits Account with Employer

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Discretionary Credits for such Plan Year.  Such Employer Discretionary Credits may be made on behalf of one or some Participants but not others, and such credits may vary in amount among individual Participants.

Article IV
CREDITS TO ACCOUNT AND INCOME

4.1Credit to Accounts.All amounts credited or charged to a Participant pursuant to the provisions of this Article IV shall be credited or charged to the Account(s) of the Participant as of the applicable Credit Date.  All payments from an Account(s) during the Plan Year shall be charged against the Account(s) as of the applicable payment date.

4.2Credit of Interest.  On each applicable Credit Date, the Participant's Account(s) shall be credited with the earnings and charged with the losses attributable thereto, determined pursuant to the provisions of Section 4.3, as well as any other credits to or charges against such Account(s).

4.3Election of Investments.  Each Participant, upon becoming a Participant in the Plan, may, in the manner prescribed by the Plan Committee, designate the manner in which he or she wishes the Account(s) to be invested among the various options designated by the Plan Committee for this purpose ("phantom investment funds").  Such designation may be changed with respect to future credits and transfers among phantom investment funds, by filing an election with the Plan Committee, in the manner prescribed by the Plan Committee, within the period of time period established by the Plan Committee.  The Participant must designate, in such minimum percentages or amounts as may be prescribed by the Plan Committee, that portion of his or her Account(s) that the Participant wishes to allocate to each phantom investment fund.  The Plan Committee may establish limits on the portion of an Account that may be hypothetically invested in any phantom investment fund or combination of phantom investment funds.  The investment designation will continue until changed by the timely submission of a new investment designation, which change will be effective within the period of time established by the Plan Committee.  In the absence of any such investment designation, a Participant's Account(s) shall be deemed invested in such property as the Plan Committee, in its sole and absolute discretion, shall determine.  The Plan Committee may, but shall not be obligated to, invest amounts credited to a Participant's Account in accordance with the investment designations of such Participant; nevertheless, the Account(s) of such Participant shall be credited with the amount of income, gains and losses attributable thereto, as if the amounts credited to such Account(s) had been so invested.  The Plan Committee shall be authorized at any time and from time to time to modify, alter, delete or add to the investment options hereunder.  In the event a modification occurs, the Plan Committee shall notify those Participants whom the Plan Committee, in its sole and absolute discretion, determines are affected by the change, and shall give such persons such additional time as is determined necessary by the Plan Committee to designate the manner and percentage in which amounts thereby affected shall be deemed invested.  The Plan Committee shall not be obligated to substitute options with similar investment criteria for existing options, nor shall it be obligated to continue the types of investment options presently available to the Participants.  Notwithstanding any of the foregoing provisions, in no event shall the Plan Committee be responsible for implementing the investment designation of a Participant unless proper notice of such designation is given to the Plan Committee

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on the form prescribed by the Plan Committee within the time period established by the Plan Committee for such purpose.

Article V
VESTING OF BENEFITS

5.1Vested Status of Accounts.  

(a)Base Compensation and Bonus Compensation Deferral Accounts.  Each Participant (or Beneficiary in the case of a Participant's death) will have a one-hundred percent (100%) Vested Interest in his or her Base Compensation Deferral Account(s) and his or her Bonus Compensation Deferral Account(s) at all times.  

(b)Employer Discretionary Credits Account.  The Employer Discretionary Credits shall vest in accordance with the vesting schedule under the Performance Food Group Employee Savings Plan, as it may be amended from time to time.  Any Employer Discretionary Credits that are not vested as of a Separation from Service shall immediately expire and be forfeited at such time. Notwithstanding the aforementioned vesting schedule, the Plan Committee may, in its discretion, establish a different vesting schedule that will apply to Employer Discretionary Credits made to the Plan on behalf of any Participant for any Plan Year.  

Article VI
PAYMENT OF BENEFIT

6.1Plan Benefit and Event Triggering Payment.  With respect to each Account, a Participant's Plan "benefit" will be such Participant's Vested Interest in the value of such Account.  Subject to Section 6.2, payment of a Participant's Plan benefit from each Participant's Account shall be made (or commence in the case of installments) on the earliest to occur of the following events (each, a "Payment Event"):

(a)The Distribution Date specified in the Participant's Election Notice, to the extent elected by the Participant;

(b)The Participant's Separation from Service;

(c)The Participant's death; and

(d)The Participant's Disability.

Unless otherwise determined by the Plan Committee, any balance in a Participant's Employer Discretionary Credits Account that is not a Vested Interest shall be forfeited upon the occurrence of a Payment Event.  Additionally, for the purposes of this Article VI, a payment will be considered timely if made within ninety (90) days of the date required herein.

6.2Timing of Payments to Specified Employees. Notwithstanding anything in the Plan to the contrary, if a Participant is a Specified Employee as of the date of his or her Separation from Service, then no distribution of such Participant's Account(s) shall be made upon the Participant's Separation from Service until the Specified Employee Payment Date. Any payments to which a

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Specified Employee otherwise would have been entitled under the Plan during the period between the Participant's Separation from Service and the Specified Employee Payment Date shall be accumulated and paid in a lump sum payment on the Specified Employee Payment Date.

6.3Form of Payment.  With respect to each compensation Deferral Election made by a Participant, such Participant shall irrevocably elect the form of payment with respect to his or her Base Compensation Deferral Account(s), Bonus Compensation Deferral Account(s) and Employer Credits Discretionary Account(s) from one of the following forms:

(a)A lump sum cash payment; or

(b)Annual cash installment payments for a period of five (5), ten (10), or fifteen (15) years.

The amount of each installment payment shall be determined by multiplying the Participant's remaining balance in the applicable Account subject to such installment form, by a fraction, the numerator of which is one and the denominator of which is the number of remaining installment payments to be made to the Participant.  In the event a Participant fails to properly or timely elect the form in which his or her benefit payments from an Account are to be made, such Participant will be deemed to have elected that all benefit payments from such Account will be paid in the form of a single lump sum payment.

6.4Death.  In the event of a Participant's death at a time when amounts are credited to such Participant's Account(s), such amounts shall be paid to such Participant's designated Beneficiary or Beneficiaries at the time set forth in Section 6.1 and in the form elected by the Participant pursuant to Section 6.3. 

6.5Payments Due to Unforeseeable Emergency.  Except in the case of an Unforeseeable Emergency as described in this Section 6.5, Participants and Beneficiaries shall not be permitted to make withdrawals from the Plan prior to the times set forth in Section 6.1 (as modified by Section 6.2) or to borrow from the Plan at any time.

(a)Request for Payment. If a Participant or Beneficiary suffers an Unforeseeable Emergency, he or she may submit a written request to the Plan Committee for a cash lump sum payment from his or her Base Compensation Deferral Account(s) and Bonus Compensation Deferral Account(s) (but not from his or her Employer Discretionary Credits Account).

(b)No Payment If Other Relief Available. The Plan Committee will evaluate the Participant or Beneficiary's request for payment due to an Unforeseeable Emergency taking into account the Participant or Beneficiary's circumstances and the requirements of Section 409A of the Code.  In no event will payments be made pursuant to this Section 6.5 to the extent that the Participant or Beneficiary's hardship can be relieved: (i) through reimbursement or compensation by insurance or otherwise; (ii) by liquidation of the Participant or Beneficiary's assets, to the extent that liquidation of the Participant or Beneficiary's assets would not itself cause severe financial hardship; or (iii) by cessation of Deferral Elections under the Plan, if applicable.

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(c)Limitation on Payment Amount. The amount of any payment made on account of an Unforeseeable Emergency shall not exceed the amount reasonably necessary to satisfy the Participant or Beneficiary's financial need, including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the payment, as determined by the Plan Committee.

(d)Timing of Payment. Payments shall be made from a Participant's Account(s) on the first regularly scheduled pay date that coincides with or immediately follows the first day of the calendar month following the determination by the Plan Committee that a hardship withdrawal due to an Unforeseeable Emergency will be permitted.

(e)Cessation of Deferrals. If a Participant receives payment on account of an Unforeseeable Emergency, the Participant's Deferral Elections shall be cancelled for the remainder of the Plan Year.

6.6Acceleration of Payment.  The time or schedule of any payment hereunder shall not be accelerated, except to the extent otherwise permitted under Section 409A of the Code and the regulations promulgated thereunder.  Consistent with the foregoing sentence, the Plan Committee, in its sole discretion, may accelerate the payment of the balance of a Participant's Account(s) to the Participant (or following the Participant's death, the Participant's Beneficiary) in a lump sum cash payment as soon as administratively practicable after the Plan Committee determines that such acceleration is necessary under one or more of the following:

(a)to the extent that (i) the aggregate amount in the Participant's Account(s) does not exceed the limit in Section 402(g)(1)(B) of the Code (which is nineteen thousand dollars ($19,000) for 2019), (ii) the payment results in the termination of the Participant's entire interest in the Plan and any plans that are aggregated with the Plan pursuant to Treas. Reg. Section 1.409A-1(c)(2), and (iii) the Plan Committee's decision to cash out the Participant's Account(s) is evidenced in writing no later than the date of payment;

(b)to fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the Code) requirement to pay an individual other than the Participant;

(c)as necessary to comply with a certificate of divestiture (as defined in Section 1043(b)(2) of the Code) related to a conflict of interest exception under Section 409A of the Code;

(d)to pay the Federal Insurance Contributions Act tax imposed under Sections 3101 and 3121(a) and (v) of the Code on compensation deferred under the Plan (the "FICA Amount") and the income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local or foreign tax laws as a result of the payment of the FICA Amount and the additional income tax at source on wages attributable to the pyramiding of Section 3401 of the Code wages and taxes; provided, however, that the acceleration permitted under this paragraph (d) shall not exceed the aggregate of the FICA Amount and the income tax withholding related to such FICA Amount;

(e)to the extent that the Plan Committee determines that the Plan fails to satisfy the requirements of Section 409A of the Code; provided, however, that such distribution shall not

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exceed the lesser of (i) the amount in the Participant's Account(s) or (ii) the amount to be reported pursuant to Section 409A of the Code on the applicable Form W-2 (or Form 1099) as taxable income to the Participant; and

(f)upon termination of the Plan, but only to the extent then permitted under Section 409A of the Code.

6.7Withholding Purposes.  If the Company is required to withhold amounts to pay the Participant's portion of the Federal Insurance Contributions Act tax imposed under Sections 3101, 3121(a) or 3121(v)(2) of the Code with respect to amounts that are or will be paid to the Participant under the Plan before they otherwise would be paid, the Plan Committee may withhold an amount equal to the lesser of: (i) the amount in the Participant's Account(s) or (ii) the aggregate of the FICA Amount imposed and the income tax withholding related to such amount.

6.8Delay of Payments Under Certain Circumstances.

(a)Delay for Insolvency or Compelling Business Reasons.  Notwithstanding any provision of this Article VI to the contrary, in the event the Board determines that the making of any payment on the date specified hereunder would jeopardize the ability of the Company to continue as a going concern, the Plan Committee may delay the payment of benefits under this Article VI until the first calendar year in which the Board notifies the Plan Committee that the payment of benefits would not have such effect.

(b)Administrative Delay in Payment.  The payment of benefits hereunder shall be made at the time specified in accordance with the provisions of the foregoing paragraphs of this Article VI; provided that, in the case of administrative necessity, the payment of such benefits may be delayed up to the later of the last day of the calendar year in which payment would otherwise be made or, if later, the fifteenth (15^th), day of the third calendar month immediately following the date on which payment would otherwise be made.  Further, if, as a result of events beyond the control of the Participant (or following the Participant's death, the Participant's Beneficiary), it is not administratively practicable for the Plan Committee to calculate the amount of benefits due to the Participant as of the date on which payment would otherwise be made, the payment may be delayed until the first calendar year in which calculation of the amount is administratively practicable.  

(c)Payments that Would Violate Federal Securities Laws or Other Applicable Law.  Payment will be delayed where the Plan Committee reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law; provided that the delayed payment is made at the earliest date at which the Plan Committee reasonably anticipates that the making of the payment will not cause such violation.

(d)Payments that Would Jeopardize the Ability of the Company to Continue as a Going Concern.  Notwithstanding anything in this Article VI to the contrary, in the event the Board determines that the making of any payment on the date specified hereunder would jeopardize the ability of the Company to continue as a going concern, the Plan Committee may delay the payment of such benefits until the first calendar year in which the Board notifies the Plan Committee that the payment of benefits would not have such effect.

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(e)Section 162(m) of the Code. If the Compensation Committee reasonably anticipates that if a payment were made as scheduled under the Plan it would result in a loss of the Company's tax deduction due to the application of Section 162(m) of the Code, such payment may be delayed and paid(i) during the Participant's first taxable year in which the Compensation Committee reasonably anticipates that the Company's tax deduction will not be limited or eliminated by the application of Section 162(m) of the Code or (ii) subject to Section6.2, during the period beginning with the Participant's Separation from Service and ending on the later of the last day of the Company's taxable year of the Participant's Separation from Service or the fifteenth(15^th) day of the third month following the Participant's Separation from Service. Notwithstanding the foregoing, no payment under the Plan may be deferred in accordance with this Section6.8(e)unless all scheduled payments to the Participant that could be delayed in accordance with Treas. Reg. Section 1.409A-2(b)(7)(i) are also delayed.

Article VII
ADMINISTRATION OF THE PLAN

7.1Designation of Plan Committee.  The Plan shall be administered by the Plan Committee.  The Plan Committee shall serve without bond or security for the performance of its duties hereunder unless applicable law makes the furnishing of such bond or security mandatory or unless required by the Company.  Any member of the Plan Committee may resign by delivering his or her written resignation to the Board.  

7.2Actions of Plan Committee.  If a committee shall be serving as the Plan Committee at any time, the Plan Committee shall perform any act that the Plan authorizes expressed by a vote at a meeting or in a writing signed by a majority of such individuals without a meeting.  Neither the Plan Committee nor any member of the Plan Committee shall vote or decide upon any matter relating solely to himself or herself or vote in any case in which his or her individual right or claim to any benefit under the Plan is particularly involved.  If, in any matter or case in which a person is so disqualified to act, the remaining members of the Plan Committee cannot resolve such matter or case, the remaining members of the Plan Committee will appoint a temporary substitute to exercise all the powers of the disqualified person concerning the matter or case in which he or she is disqualified.

7.3Delegation.  The Plan Committee may from time to time delegate to one or more of an Employer's officers, employees, directors, or agents, or to any other person or organization, any of its powers, duties, and responsibilities with respect to the operation and administration of the Plan, including, but not limited to, the administration of claims, the authority to authorize payment of benefits, the review of denied or modified claims, and the discretion to decide matters of fact, determine eligibility for benefits (and the amount of such benefits), and interpret Plan provisions.  The Plan Committee also may from time to time employ persons to render advice with regard to any fiduciary responsibility held hereunder and may authorize any person to whom any of its fiduciary responsibilities have been delegated to employ persons to render such advice.  Upon designation and written acceptance of any delegation of fiduciary responsibility, the Plan Committee will have no liability for the acts or omissions of any such delegate as long as the Plan Committee does not violate its fiduciary responsibility in making or continuing such delegation.  All delegations of fiduciary responsibility will be reviewed periodically by the Plan Committee

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and will be terminable upon such notice as the Plan Committee in its discretion deems reasonable and prudent under the circumstances.

7.4Expenses and Indemnification.  All usual and reasonable expenses incident to the administration of the Plan, including, but not limited to, legal, accounting, and administrative, shall be allocated and paid by the Employers, as determined by the Plan Committee in its discretion.  To the extent permitted by applicable law, the Company shall indemnify and hold harmless each current and former member of the Plan Committee and the Compensation Committee and each other current and former employee of an Employer to whom Plan administrative or fiduciary functions have been delegated by the Plan Committee or under the Plan from and against any and all claims and expenses (including, without limitation, attorneys' fees and related costs), in connection with the performance by such person of his or her duties in that capacity, other than any of the foregoing arising in connection with the gross negligence or willful misconduct of the person so acting.  Expenses against which such member shall be indemnified hereunder shall include, without limitation, the amounts of any settlement or judgment costs, counsel fees and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.

7.5Administrative Duties.  The Plan Committee shall supervise the administration and enforcement of the Plan according to the terms and provisions hereof and shall have all powers necessary to accomplish these purposes, including, but not by way of limitation, the right, power, authority and duty to:

(a)make rules, regulations, and bylaws for the administration of the Plan that are not inconsistent with the terms and provisions hereof, and to enforce the terms of the Plan and the rules and regulations promulgated thereunder by the Plan Committee;

(b)construe, in its discretion all terms, provisions, conditions, and limitations of the Plan;

(c)authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

(d)correct any defect or to supply any omission or to reconcile any inconsistency that may appear in the Plan in such manner and to such extent as it shall deem in its discretion expedient to effectuate the purposes of the Plan;

(e)select the investment options that will be available for the deemed investment of Accounts under the Plan and establish procedures for permitting Participants to change their selected investment options;

(f)employ and compensate such accountants, attorneys, investment advisors, and other agents, employees and independent contractors as the Plan Committee may deem necessary or advisable for the proper and efficient administration of the Plan;

(g)calculate deemed investment earnings and losses;

(h)determine in its discretion all questions relating to eligibility;

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(i)determine whether and when a Participant has had a Separation from Service with the Company;

(j)make a determination in its discretion as to the right of any person to a benefit under the Plan and to prescribe procedures to be followed by distributees in obtaining benefits hereunder; and

(k)exercise discretion to make any and all other determination which it determines to be necessary or advisable for the administration of the Plan.

All determinations of the Plan Committee shall be conclusive and binding on all Participants and Beneficiaries, subject to the provisions of the Plan and applicable law.

7.6Non-Uniform Treatment.  The Plan Committee's determinations under the Plan need not be uniform and any such determinations may be made selectively among Participants and Beneficiaries.  

7.7Company to Supply Information.  The Company shall supply full and timely information to the Plan Committee and/or Compensation Committee, including, but not limited to, information relating to each Participant's compensation, age, retirement, death, or other cause of Separation from Service and such other pertinent facts as the Plan Committee may require.   When making a determination in connection with the Plan, the Plan Committee and Compensation Committee shall be entitled to rely upon the aforesaid information furnished by the Company.

7.8Correction of Errors. Any contrary provisions of the Plan notwithstanding, in the event the Plan (i) enrolls any individual in the Plan, (ii) pays a Plan benefit or claim under the Plan, (iii) incurs a liability for failure to so enroll or pay a benefit or for terminating enrollment, or (iv) makes any overpayment or erroneous payment to any individual or entity, in any case because of a human or systems error or because of incorrect information provided by, correct information failed to be provided by, fraud, misrepresentation, or concealment of any relevant fact by any Participant, Beneficiary, or other individual, the Plan Committee will be entitled to correct such error in any manner it deems necessary or appropriate, including, without limitation, recovering from such Participant, Beneficiary, or other individual such benefit paid or the amount of such liability incurred and any and all expenses incidental to or necessary for such recovery.  Human or systems error or omission will not alter a Participant's eligibility to participate in the Plan or affect in any way the amount of a Participant's or Beneficiary's benefit to which such Participant or Beneficiary is otherwise entitled under the terms of the Plan.

Article VIII
CLAIMs REVIEW PROCEDURE

8.1Claims Procedures (For Claims For Benefits Other Than Disability-Related Benefits).

(a)Filing a Claim.  Any Participant or other person claiming an interest in the Plan (the "Claimant") may file a claim in writing with the Plan Committee. The Plan Committee shall review the claim itself or appoint an individual or entity to review the claim.

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(b)Claim Decision. The Claimant shall be notified within ninety (90) days after the claim is filed whether the claim is approved or denied, unless the Plan Committee determines that special circumstances beyond the control of the Plan require an extension of time, in which case the Plan Committee may have up to an additional ninety (90) days to process the claim. If the Plan Committee determines that an extension of time for processing is required, the Plan Committee shall furnish written or electronic notice of the extension to the Claimant before the end of the initial ninety (90) day period. Any notice of extension shall describe the special circumstances necessitating the additional time and the date by which the Plan Committee expects to render its decision.

(c)Notice of Denial. If the Plan Committee denies the claim, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(i)The specific reason(s) for the denial;

(ii)Specific reference to the pertinent Plan provisions on which such denial is based;

(iii)A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or information is necessary;

(iv)A description of the Plan's appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant's right to bring a civil action under Section 502(a) of ERISA following a denial of the claim on appeal; and

(v)If an internal rule was relied on to make the decision, either a copy of the internal rule or a statement that this information is available at no charge upon request.

(d)Appeal Procedures. A request for appeal of a denied claim must be made in writing to the Plan Committee within sixty (60) days after receiving notice of denial. The decision on appeal will be made within sixty (60) days after the Plan Committee's receipt of a request for appeal, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than one hundred twenty (120) days after receipt of a request for appeal. A notice of such an extension must be provided to the Claimant within the initial sixty (60) day period and must explain the special circumstances and provide an expected date of decision. The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Plan Committee. The reviewer shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination.

(e)Notice of Decision on Appeal. If the Plan Committee denies the appeal, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(i)The specific reason(s) for the denial;

16

(ii)Specific references to the pertinent Plan provisions on which such denial is based;

(iii)A statement that the Claimant may receive on request all relevant records at no charge;

(iv)A description of the Plan's voluntary procedures and deadlines, if any;

(v)A statement of the Claimant's right to sue under Section 502(a) of ERISA; and

(vi)If an internal rule was relied on to make the decision, either a copy of the internal rule or a statement that this information is available at no charge upon request.

(f)Claims Procedures Mandatory. The internal claims procedures set forth in this Section 8.1 are mandatory. If a Claimant fails to follow these claims procedures, or to timely file a request for appeal in accordance with this Section 8.1, the denial of the Claim shall become final and binding on all persons for all purposes.

8.2Claims Procedures for Disability-Related Benefits.

(a)Filing a Claim. Any Claimant may file a claim in writing with the Plan Committee for Disability-related benefits. The Plan Committee shall review the claim itself or appoint an individual or entity to review the claim.

(b)Claim Decision. The Claimant shall be notified within forty-five (45) days after the claim is filed whether the claim is approved or denied, unless the Plan Committee determines that special circumstances beyond the control of the Plan require an extension of time, in which case the Plan Committee may have up to two additional thirty (30) day periods to make a decision. If the Plan Committee determines that an extension of time for processing is required, the Plan Committee shall furnish written or electronic notice of the extension to the Claimant before the end of the initial forty-five (45) day period. Any notice of extension shall describe the special circumstances necessitating the additional time and the date by which the Plan Committee expects to render its decision.

(c)Notice of Denial. If the Plan Committee denies the claim, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(i)The specific reason(s) for the denial;

(ii)Specific reference to the pertinent Plan provisions on which such denial is based;

(iii)A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or information is necessary;

17

(iv)A discussion of the decision that includes the basis for disagreeing with or not following:

(A)the views presented by health care professionals treating the Claimant and vocational professionals who evaluated the Claimant;

(B)the views of medical or vocational experts whose advice was obtained on the Plan's behalf, regardless of whether the advice was relied on in making the benefit denial; and

(C)a disability determination made by the Social Security Administration (SSA), if presented to the Plan;

(v)If the decision was based on medical necessity or experimental treatment (or a similar exclusion or limit), either:

(A)an explanation of the scientific or clinical judgment for the denial, applying the plan terms to the Claimant's medical circumstances; or

(B)a statement that this explanation will be provided free of charge upon request;

(vi)Either the specific internal rules, guidelines, protocols, standards, or other similar criteria of the Plan relied on in making the denial, or notice that such rules, guidelines, protocols, standards, or other similar criteria of the Plan do not exist;

(vii)Notice that the Claimant is entitled to receive (on request and free of charge) reasonable access to and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits; and

(viii)A description of the Plan's appeal procedures and deadlines applicable to these procedures, including a statement of the Claimant's right to sue under Section 502(a) of ERISA following a denial on appeal.

Claimants are guaranteed the right to present evidence and testimony regarding their claim during the review process.

(d)Filing an Appeal. A request for appeal of a denied claim must be made in writing to the Plan Committee within one hundred eighty (180) days after receiving notice of denial. The decision on appeal will be made within forty-five (45) days after the Plan Committee's receipt of a request for appeal, unless special circumstances require an extension of time for processing, in which case the Plan Committee may have an additional forty-five (45) day period to make a decision. A notice of such an extension must be provided to the Claimant within the initial forty-five (45) day period and must explain the special circumstances and provide an expected date of decision.

On appeal, the review will consider all submitted information, regardless of whether the information was submitted or consulted in the initial decision. The review will not

18

provide deference to the initial decision. The appeal will be conducted by an appropriate named fiduciary, who is not the person who made the initial decision or the subordinate of that person.

For claims involving medical judgment, including decisions about whether a treatment or drug is experimental, investigational, or not medically necessary, the Plan's named fiduciary will consult with a health care professional who:

(i)Has appropriate training and experience in the area of medicine involved;

(ii)Was not consulted during the initial denial; and

(iii)Is not a subordinate of the person who made the initial denial.

The Plan Committee will identify the medical or other experts who were consulted when making the benefit determination, regardless of whether the expert's advice was relied on in making the determination.

Before a benefit denial is issued on appeal, the Claimant will be provided (free of charge) with any new or additional evidence considered, relied on, or generated by the Plan, insurer, or other person making the benefit determination (or at the direction of the Plan, insurer, or other person) regarding the claim. The Claimant will be provided any new or additional evidence as soon as possible and sufficiently in advance of the date the appeal denial notice is due, so that the Claimant has a reasonable opportunity to respond.

Before a benefit denial is issued on appeal, if the denial is issued based on a new or additional rationale, the Claimant will be provided, free of charge, with the rationale. The Claimant will be provided with the rationale as soon as possible and sufficiently in advance of the date on which the appeal denial notice is due, so that the Claimant has a reasonable opportunity to respond.

(e)Notice of Decision on Appeal. If the Plan Committee denies the appeal, it must provide to the Claimant, in writing or by electronic communication, a notice which includes:

(i)The specific reason or reasons why the appeal is denied.

(ii)A reference to the specific Plan provisions on which the denial is based.

(iii)A discussion of the decision that includes the basis for disagreeing with or not following:

(A)the views presented by health care professionals treating the Claimant and vocational professionals who evaluated the Claimant;

(B)the views of medical or vocational experts whose advice was obtained on the Plan's behalf in connection with the Claimant's benefit denial, regardless of whether the advice was relied on in making the benefit denial; and

19

(C)a disability determination made by the SSA regarding the Claimant, if presented to the Plan.

(iv)If the decision was based on medical necessity or experimental treatment (or a similar exclusion or limit), either:

(A)an explanation of the scientific or clinical judgment for the denial, applying the plan terms to the claimant's medical circumstances; or

(B)a statement that this explanation will be provided free of charge upon request.

(v)Either the specific internal rules, guidelines, protocols, standards, or other similar criteria of the plan relied on in making the denial, or notice that such rules, guidelines, protocols, standards, or other similar criteria of the plan do not exist.

(vi)A statement of the Claimant's right to sue under Section 502(a) of ERISA, including a description of any contractual limitations period relevant to the right to sue, with the calendar date on which the contractual limitations period expires for the claim.

Article IX
LIMITATION OF RIGHTS

The establishment of the Plan shall not be construed as giving to any Participant Beneficiary, Employee, Director or any person whomsoever, any legal, equitable or other rights against the Company, or its officers, directors or agents, or as giving to any Participant or Beneficiary any equity or other interest in the assets or business of the Company or as giving any Employee or Director the right to be retained in the service of the Company.  All Participants shall be subject to discharge to the same extent they would have been if the Plan had never been adopted.  The rights of a Participant hereunder shall be solely those of an unsecured general creditor of the Company.

Article X
AMENDMENT TO OR TERMINATION OF THE PLAN

10.1Generally.  The Compensation Committee reserves the right at any time to amend or terminate the Plan in whole or in part.  No amendment or termination shall have the effect of retroactively changing or depriving Participants or Beneficiaries of rights already accrued under the Plan except that an amendment to change phantom investment options or an amendment that the Compensation Committee determines is necessary or desirable to comply with Section 409A of the Code shall not require the consent of any Participant.  No payment of benefits shall occur upon termination of the Plan unless the requirements of Section 409A of the Code have been satisfied.  

10.2Change in Control.  Notwithstanding any provision in the Plan to the contrary, the Company, by resolution of the Compensation Committee and without the consent of any Participant, shall have the full discretion and power to terminate the Plan within thirty (30) days preceding or twelve (12) months following a Change in Control and, in the event of such

20

termination, the Company shall distribute each Participant's Account(s) within twelve (12) months of the date of such termination.

Article XI
Participating employers

The Compensation Committee may designate any entity or organization eligible by law to participate in the Plan as an Employer by written instrument delivered to the Secretary of the Company, or designee, and the designated Employer.  Such written instrument shall specify the effective date of such designated participation, may incorporate specific provisions relating to the operation of the Plan that apply to the designated Employer only and shall become, as to such designated Employer and its Employees, a part of the Plan.  Each designated Employer shall be conclusively presumed to have consented to its designation and to have agreed to be bound by the terms of the Plan and any and all amendments thereto upon its submission of information required by the terms of or with respect to the Plan; provided, however, that the terms of the Plan may be amended so as to increase the obligations of an Employer only with the consent of such Employer, which consent shall be conclusively presumed to have been given by such Employer upon its submission, after receipt of notice of such amendment, of any information required by the terms of or with respect to the Plan.  Except as modified by the Compensation Committee in its written instrument, the provisions of the Plan shall be applicable with respect to each Employer separately, and amounts payable hereunder shall be paid by the Employer which employs the particular Participant.

Article XII
GENERAL AND MISCELLANEOUS

12.1Non-Alienation.  No benefits payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of the same shall be void.  No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to attachment or legal process for or against any person, except to the extent required by law.

12.2Incapacitated Distributee.  In the event any benefit payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined by the Plan Committee, on the basis of qualified medical advice, to be incompetent, the Plan Committee need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of the minor or incompetent, to cause the same to be paid to the minor or incompetent without the intervention of a guardian or custodian, to cause the same to be paid to a legal guardian or custodian of the minor or incompetent, if one has been appointed, or to cause the same to be used for the benefit of the minor or incompetent.

12.3Lost Participant of Beneficiary.  Any Participant or Beneficiary who is entitled to a benefit from the Plan has a duty to keep the Company advised of his or her current mailing address.  If the Plan Committee is unable to locate a Participant or Beneficiary entitled to a distribution hereunder, upon the Plan Committee's determination thereof, such Participant's or Beneficiary's Account(s) shall be forfeited to the Company.  Notwithstanding the foregoing, if

21

subsequent to any such forfeiture the Participant or Beneficiary to whom such distribution is payable makes a valid claim for such distribution, such forfeited Account(s) shall be restored, without the crediting of interest subsequent to the forfeiture, and the balance of such Account shall be distributed to such Participant or Beneficiary as soon as administratively practicable.

12.4No Warranties. Neither the Company nor the Plan Committee warrants or represents that the value of any Participant's Account will increase. Each Participant assumes the risk in connection with the deemed investment of his or her Account(s).

12.5Severability.  In the event that any provision of the Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of the Plan but shall be fully severable and the Plan shall be construed and enforced as if said illegal or invalid provision had never been inserted herein.

12.6Construction.  The section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of the Plan.  Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular.  When used herein, the masculine gender includes the feminine gender. Use of the term "or" is not intended to be exclusive, unless the context clearly requires otherwise.

12.7Compliance with Section 409A of the Code.  The Plan is intended to comply with the applicable provisions of Section 409A of the Code and the Company shall interpret and administer the Agreement in accordance therewith.  Any ambiguities in the Plan shall be construed to effect this intent.  Each payment that a Participant may receive under the Plan shall be treated as a "separate payment" for purposes of Section 409A of the Code.  In addition, any provision, including, without limitation, any definition in the Plan that is determined to violate the requirements of Section 409A of the Code shall be void and without effect and any provision, including, without limitation, any definition, that is required to appear in the Plan under Section 409A of the Code that is not expressly set forth shall be deemed to be set forth herein, and the Plan shall be administered in all respects as if such provisions were expressly set forth.  In addition, the timing of certain payments of benefits provided for under the Plan shall be revised as necessary for compliance with Section 409A of the Code.  Notwithstanding the foregoing, the Company makes no representation that the Plan complies with Section 409A of the Code and shall have no liability to any Participant for any failure to comply with Section 409A of the Code.

12.8Governing Law.  The validity and effect of the Plan and the rights and obligations of all persons affected hereby shall be construed and determined in accordance with the laws of the State of Delaware unless superseded by federal law.

12.9Taxes.  All amounts payable hereunder shall be reduced by any and all federal, state and local taxes imposed upon the Participant or his or her Beneficiary that are required to be paid or withheld by the Company.

[SIGNATURE ON NEXT PAGE]

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IN WITNESS WHEREOF, Performance Food Group Company,has caused this Performance Food Group CompanyDeferred Compensation Plan to be duly executed effective as of the Effective Date.

PERFORMANCE FOOD GROUP COMPANY:

By: /s/ A. Brent King

Its: Senior Vice President, General Counsel and Secretary

Dated: January 31, 2020

23

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 28, 2019 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 5, 2020

/s/ George L. Holm

George L. Holm

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, James D. Hope, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2019 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 5, 2020

/s/ James D. Hope

James D. Hope

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 28, 2019, 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 5, 2020

/s/ George L. Holm

George L. Holm

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

8Exhibit 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 28, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James D. Hope, 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 5, 2020

/s/ James D. Hope

James D. Hope

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

XML

Fair Value of Financial Instruments

6 Months Ended

Dec. 28, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

8. 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 $2,188.4 million and $1,202.9 million, is $2,280.0 million and $1,216.3 million at December 28, 2019 and June 29, 2019, 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.

XML

Revenue Recognition

6 Months Ended

Dec. 28, 2019

Revenue From Contract With Customer [Abstract]

Revenue Recognition

4. Revenue Recognition

The Company markets and distributes primarily national and company-branded food and food-related products to customer locations across the United States. The Foodservice segment supplies a “broad line” of products to its customers, including the

Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13. Segment Information for external revenue by reportable segment.

The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized to net sales over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $12.3 million and $10.6 million as of December 28, 2019 and June 29, 2019, respectively.

XML

Leases - Summary of Supplemental Cash Flow Information related to Leases (Detail) - USD ($) $ in Millions	6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 53.3
Operating cash flows from finance leases	4.9
Financing cash flows from finance leases	10.6	$ 5.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	11.1
Finance leases	$ 52.5

XML

Debt - Schedule of Debt (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Debt Instrument [Line Items]
Less: Original issue discount and deferred financing costs	$ (8.0)	$ (6.1)
Long-term debt	2,188.4	1,202.9
Total debt, excluding current installments	2,188.4	1,202.9
ABL Facility [Member]
Debt Instrument [Line Items]
Long-term debt, gross	786.4	859.0
5.500% Senior Notes due 2024 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	350.0	$ 350.0
5.500% Senior Notes due 2027 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,060.0

XML

Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
ABL Facility [Member]
Debt Instrument [Line Items]
Debt amount reserve by lender	$ 40.3	$ 38.6

XML

Segment Information - Schedule of EBDITA and Reconciliation to Consolidated Income Before Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Segment Reporting Information [Line Items]
Depreciation and amortization	$ (43.8)	$ (37.1)	$ (86.5)	$ (72.6)
Interest expense	(26.4)	(16.0)	(43.7)	(31.6)
Income before taxes	54.3	56.3	100.5	91.5
Foodservice [Member]
Segment Reporting Information [Line Items]
EBITDA	113.6	104.3	217.6	196.3
Depreciation and amortization	(25.8)	(21.7)	(50.4)	(42.6)
Vistar [Member]
Segment Reporting Information [Line Items]
EBITDA	56.6	45.4	108.1	77.0
Depreciation and amortization	(11.5)	(9.3)	(23.1)	(18.2)
Corporate & All Other [Member]
Segment Reporting Information [Line Items]
EBITDA	(45.7)	(40.3)	(95.0)	(77.6)
Depreciation and amortization	$ (6.5)	$ (6.1)	$ (13.0)	$ (11.8)

XML

Segment Information - Schedule of Segment Reporting Information, by Segment (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Segment Reporting Information [Line Items]
Net sales	$ 6,068.6	$ 4,615.7	$ 12,311.6	$ 9,155.4
Depreciation and amortization	43.8	37.1	86.5	72.6
Capital expenditures	26.2	35.1	49.0	60.1
Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	3,843.9	3,669.3	7,770.9	7,312.6
Depreciation and amortization	25.8	21.7	50.4	42.6
Capital expenditures	8.1	25.9	16.3	42.7
Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	2,218.6	941.3	4,529.1	1,833.1
Depreciation and amortization	11.5	9.3	23.1	18.2
Capital expenditures	12.8	4.0	21.5	6.7
Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	6.1	5.1	11.6	9.7
Depreciation and amortization	6.5	6.1	13.0	11.8
Capital expenditures	5.3	5.2	11.2	10.7
Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(76.6)	(67.4)	(155.6)	(136.1)
Eliminations [Member] | Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	3.5	2.6	7.4	5.3
Eliminations [Member] | Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	0.6	0.6	1.2	1.4
Eliminations [Member] | Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	72.5	64.2	147.0	129.4
Operating Segments [Member] | Foodservice [Member]
Segment Reporting Information [Line Items]
Net sales	3,847.4	3,671.9	7,778.3	7,317.9
Operating Segments [Member] | Vistar [Member]
Segment Reporting Information [Line Items]
Net sales	2,219.2	941.9	4,530.3	1,834.5
Operating Segments [Member] | Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Net sales	$ 78.6	$ 69.3	$ 158.6	$ 139.1

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Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Leases Prior to Adoption of ASC 842 (Detail) $ in Millions	Dec. 28, 2019 USD ($)
Operating Leases
2020	$ 104.7
2021	89.6
2022	73.8
2023	58.2
2024	40.8
Thereafter	163.8
Total future minimum lease payments	530.9
Finance Leases
2020	26.7
2021	26.3
2022	25.8
2023	24.7
2024	23.9
Thereafter	58.4
Total future minimum lease payments	185.8
Less: Interest	38.6
Present value of future minimum lease payments	$ 147.2

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Related-Party Transactions - Additional Information (Detail) - Purchasing Alliance [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018	Jun. 29, 2019
Related Party Transaction [Line Items]
Equity method investments	$ 5.1		$ 5.1		$ 4.6
Purchases from related party	$ 244.2	$ 206.2	$ 498.4	$ 433.1

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Statement Of Financial Position [Abstract]
Accounts receivable, allowances	$ 29.7	$ 22.0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000.0	1,000,000,000.0
Common stock, shares issued	104,400,000	103,800,000
Common stock, shares outstanding	104,400,000	103,800,000
Accumulated other comprehensive loss, tax benefit	$ 0.4	$ 0.1

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Leases (Tables)

6 Months Ended

Dec. 28, 2019

Leases [Abstract]

Summary of Right-of-Use Assets and Lease Liabilities in Consolidated Balance Sheet

The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of December 28, 2019 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases:

Leases	Consolidated Balance Sheet Location	As of December 28, 2019
Assets:
Operating	Operating lease right-of-use assets	$	391.3
Finance	Property, plant and equipment, net		179.3
Total lease assets		$	570.6
Liabilities:
Current
Operating	Operating lease obligations—current installments	$	78.4
Finance	Finance lease obligations—current installments		24.6
Non-current
Operating	Operating lease obligations, excluding current installments		314.6
Finance	Finance lease obligations, excluding current installments		164.5
Total lease liabilities		$	582.1
Weighted average remaining lease term
Operating leases		7.6 years
Finance leases		7.1 years
Weighted average discount rate
Operating leases			5.4	%
Finance leases			5.6	%

Summary of Location of Lease Costs in Consolidated Statement of Operations

The following table presents the location of lease costs in the Company consolidated statement of operations for the three and six months ended December 28, 2019 (in millions):

Lease Cost	Statement of Operations Location	Three months ended December 28, 2019		Six months ended December 28, 2019
Finance lease cost:
Amortization of finance lease assets	Operating expenses	$	5.8	$	10.5
Interest on lease liabilities	Interest expense		2.7		4.9
Total finance lease cost		$	8.5	$	15.4
Operating lease cost	Operating expenses		26.7		54.8
Short-term lease cost	Operating expenses		5.6		11.5
Total lease cost		$	40.8	$	81.7

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases for the period reported is as follows (in millions):

(In millions)	Six months ended December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	53.3
Operating cash flows from finance leases		4.9
Financing cash flows from finance leases		10.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		11.1
Finance leases		52.5

Summary of Future Minimum Lease Payments Under Non-Cancelable Leases

Future minimum lease payments under non-cancelable leases as of December 28, 2019 are as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases
Remaining 2020	$	50.2	$	17.4
2021		90.6		34.5
2022		74.6		34.0
2023		59.5		32.9
2024		42.4		32.0
Thereafter		176.0		84.0
Total future minimum lease payments	$	493.3	$	234.8
Less: Interest		100.3		45.7
Present value of future minimum lease payments	$	393.0	$	189.1

Schedule of Future Minimum Lease Payments Under Non-Cancelable Leases Prior to Adoption of ASC 842

Future minimum lease payments in effect as of June 29, 2019 under non-cancelable leases, as determined prior to the adoption of ASC 842, were as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases
2020	$	104.7	$	26.7
2021		89.6		26.3
2022		73.8		25.8
2023		58.2		24.7
2024		40.8		23.9
Thereafter		163.8		58.4
Total future minimum lease payments	$	530.9	$	185.8
Less: Interest				38.6
Present value of future minimum lease payments			$	147.2

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018
Cash flows from operating activities:
Net income	$ 77.3	$ 71.3
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	69.0	54.4
Amortization of intangible assets	17.5	18.2
Amortization of deferred financing costs	1.6	1.7
Provision for losses on accounts receivables	8.9	8.3
Stock compensation expense	8.8	8.0
Deferred income tax benefit	(5.6)	(4.7)
Other non-cash activities	9.3	0.6
Changes in operating assets and liabilities, net
Accounts receivable	(11.7)	(24.3)
Inventories	7.5	(73.8)
Prepaid expenses and other assets	9.6	32.2
Trade accounts payable	(89.2)	(37.4)
Outstanding checks in excess of deposits	58.3	20.7
Accrued expenses and other liabilities	(3.5)	(5.2)
Net cash provided by operating activities	157.8	70.0
Cash flows from investing activities:
Purchases of property, plant and equipment	(49.0)	(60.1)
Net cash paid for acquisitions		(57.0)
Proceeds from sale of property, plant and equipment	0.5	0.7
Net cash used in investing activities	(48.5)	(116.4)
Cash flows from financing activities:
Net (payments) borrowings under ABL Facility	(72.6)	65.4
Payments on financed property, plant and equipment	(1.4)	(4.6)
Borrowing on Notes due 2027	1,060.0
Cash paid for acquisitions	(1.0)	(3.1)
Payments under finance lease obligations	(10.6)	(5.6)
Proceeds from exercise of stock options	2.6	5.3
Cash paid for shares withheld to cover taxes	(7.6)	(6.1)
Repurchases of common stock		(4.6)
Cash paid for debt issuance, extinguishment and modifications	(2.2)
Net cash provided by financing activities	967.2	46.7
Net increase in cash and restricted cash	1,076.5	0.3
Cash and restricted cash, beginning of period	25.4	17.8
Cash and restricted cash, end of period	1,101.9	18.1
Debt assumed through finance lease obligations	52.5	54.1
Purchases of property, plant and equipment, financed	1.3	2.6
Share repurchase payable		0.6
Interest	33.4	32.0
Income taxes paid (refunds), net	$ 27.8	$ (0.1)

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Earnings Per Common Share

6 Months Ended

Dec. 28, 2019

Earnings Per Share [Abstract]

Earnings Per Common Share

12. Earnings Per Common 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 earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. The dilutive effect of potential common shares includes the impact of the equity forward the Company entered into in the second quarter of fiscal 2020 since the average closing price of the Company’s common stock for the period was higher than the applicable forward sale price. Potential common shares of 0.1 million and 0.1 million for the three and six months ended December 28, 2019, respectively, and 0.5 million and 0.6 million for the three and six months ended December 29, 2018, respectively, were not included in computing diluted earnings per common share because the effect would have been antidilutive.

A reconciliation of the numerators and denominators for the basic and diluted earnings per common share computations is as follows:

(In millions, except per share amounts)	Three months ended December 28, 2019		Three months ended December 29, 2018		Six months ended December 28, 2019		Six months ended December 29, 2018
Numerator:
Net Income	$	41.2	$	43.1	$	77.3	$	71.3
Denominator:
Weighted-average common shares outstanding		104.3		103.9		104.2		103.7
Dilutive effect of potential common shares		2.1		1.0		2.0		1.3
Weighted-average dilutive shares outstanding		106.4		104.9		106.2		105.0
Basic earnings per common share	$	0.39	$	0.41	$	0.74	$	0.69
Diluted earnings per common share	$	0.39	$	0.41	$	0.73	$	0.68

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Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 30, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease liabilities	$ 393.0
Operating lease obligations—current installments	78.4
Operating lease liability, noncurrent	314.6
Operating lease, right-of-use asset	$ 391.3
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease liabilities		$ 423.8
Operating lease obligations—current installments		82.1
Operating lease liability, noncurrent		341.7
Operating lease, right-of-use asset		423.0
Operating lease liability, deferred rent		11.0
Operating lease, intangible assets		5.3
Operating lease, prepaid rent and other adjustments		$ 4.9

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Leases - Summary of Future Minimum Lease Payments Under Non-Cancelable Leases (Detail) $ in Millions	Dec. 28, 2019 USD ($)
Operating Leases
Remaining 2020	$ 50.2
2021	90.6
2022	74.6
2023	59.5
2024	42.4
Thereafter	176.0
Total future minimum lease payments	493.3
Less: Interest	100.3
Present value of future minimum lease payments	393.0
Finance Leases
Remaining 2020	17.4
2021	34.5
2022	34.0
2023	32.9
2024	32.0
Thereafter	84.0
Total future minimum lease payments	234.8
Less: Interest	45.7
Present value of future minimum lease payments	$ 189.1

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended
	Dec. 28, 2019 USD ($)
Commitments And Contingencies [Line Items]
Outstanding contracts and purchase orders for capital projects and services	$ 37.4
Reinhart [Member]
Commitments And Contingencies [Line Items]
Commitments, total	63.8
Reinhart [Member] | Advisory Fees [Member]
Commitments And Contingencies [Line Items]
Short term commitments, total	9.0
Reinhart [Member] | Common Stock [Member]
Commitments And Contingencies [Line Items]
Short term commitments, total	23.9
Notes due 2027 [Member] | Reinhart [Member]
Commitments And Contingencies [Line Items]
Commitments, total	26.0
Amended Credit Agreement [Member] | Reinhart [Member]
Commitments And Contingencies [Line Items]
Commitments, total	$ 4.9

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Segment Information - Additional Information (Detail)	6 Months Ended
	Dec. 28, 2019 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Revenue From Contract With Customer [Abstract]
Contract assets	$ 12.3	$ 10.6

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Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Current assets:
Cash	$ 12.7	$ 14.7
Accounts receivable, less allowances of $29.7 and $22.0	1,230.1	1,227.3
Inventories, net	1,349.4	1,356.9
Restricted cash	1,078.2
Prepaid expenses and other current assets	62.2	71.7
Total current assets	3,732.6	2,670.6
Goodwill	765.8	765.8
Other intangible assets, net	170.3	194.3
Property, plant and equipment, net	983.5	950.5
Operating lease right-of-use assets	391.3
Restricted cash	11.0	10.7
Other assets	56.6	61.6
Total assets	6,111.1	4,653.5
Current liabilities:
Outstanding checks in excess of deposits	265.2	206.9
Trade accounts payable	1,041.5	1,130.8
Accrued expenses and other current liabilities	413.4	343.3
Finance lease obligations—current installments	24.6	18.3
Operating lease obligations—current installments	78.4
Total current liabilities	1,823.1	1,699.3
Long-term debt	2,188.4	1,202.9
Deferred income tax liability, net	102.0	108.0
Finance lease obligations, excluding current installments	164.5	128.9
Operating lease obligations, excluding current installments	314.6
Other long-term liabilities	140.0	216.2
Total liabilities	4,732.6	3,355.3
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 104.4 million shares issued and outstanding as of December 28, 2019; 1.0 billion shares authorized, 103.8 million shares issued and outstanding as of June 29, 2019	1.0	1.0
Additional paid-in capital	870.5	866.7
Accumulated other comprehensive loss, net of tax benefit of $0.4 and $0.1	(1.0)	(0.2)
Retained earnings	508.0	430.7
Total shareholders’ equity	1,378.5	1,298.2
Total liabilities and shareholders’ equity	$ 6,111.1	$ 4,653.5

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Earnings Per Common Share (Tables)

6 Months Ended

Dec. 28, 2019

Earnings Per Share [Abstract]

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

A reconciliation of the numerators and denominators for the basic and diluted earnings per common share computations is as follows:

(In millions, except per share amounts)	Three months ended December 28, 2019		Three months ended December 29, 2018		Six months ended December 28, 2019		Six months ended December 29, 2018
Numerator:
Net Income	$	41.2	$	43.1	$	77.3	$	71.3
Denominator:
Weighted-average common shares outstanding		104.3		103.9		104.2		103.7
Dilutive effect of potential common shares		2.1		1.0		2.0		1.3
Weighted-average dilutive shares outstanding		106.4		104.9		106.2		105.0
Basic earnings per common share	$	0.39	$	0.41	$	0.74	$	0.69
Diluted earnings per common share	$	0.39	$	0.41	$	0.73	$	0.68

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions		Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]
Balance Beginning at Jun. 30, 2018		$ 1,135.3	$ 1.0	$ 861.2	$ 8.3	$ 264.8
Balance Beginning, shares at Jun. 30, 2018			103,200,000
Issuance of common stock under stock-based compensation plans		(0.8)		(0.8)
Issuance of common stock under stock-based compensation plans, shares			800,000
Net income		71.3				71.3
Interest rate swaps		(3.5)			(3.5)
Stock-based compensation expense		8.0		8.0
Common stock repurchased		(5.2)		(5.2)
Common stock repurchased, shares			(200,000)
Change in accounting principle	[1]				0.9	(0.9)
Balance Ending at Dec. 29, 2018		1,205.1	$ 1.0	863.2	5.7	335.2
Balance Ending, shares at Dec. 29, 2018			103,800,000
Balance Beginning at Sep. 29, 2018		1,165.3	$ 1.0	862.7	9.5	292.1
Balance Beginning, shares at Sep. 29, 2018			103,600,000
Issuance of common stock under stock-based compensation plans		1.5		1.5
Issuance of common stock under stock-based compensation plans, shares			400,000
Net income		43.1				43.1
Interest rate swaps		(3.8)			(3.8)
Stock-based compensation expense		4.2		4.2
Common stock repurchased		(5.2)		(5.2)
Common stock repurchased, shares			(200,000)
Balance Ending at Dec. 29, 2018		1,205.1	$ 1.0	863.2	5.7	335.2
Balance Ending, shares at Dec. 29, 2018			103,800,000
Balance Beginning at Jun. 29, 2019		$ 1,298.2	$ 1.0	866.7	(0.2)	430.7
Balance Beginning, shares at Jun. 29, 2019		103,800,000	103,800,000
Issuance of common stock under stock-based compensation plans		$ (5.0)		(5.0)
Issuance of common stock under stock-based compensation plans, shares			600,000
Net income		77.3				77.3
Interest rate swaps		(0.8)			(0.8)
Stock-based compensation expense		8.8		8.8
Balance Ending at Dec. 28, 2019		$ 1,378.5	$ 1.0	870.5	(1.0)	508.0
Balance Ending, shares at Dec. 28, 2019		104,400,000	104,400,000
Balance Beginning at Sep. 28, 2019		$ 1,333.1	$ 1.0	866.6	(1.3)	466.8
Balance Beginning, shares at Sep. 28, 2019			104,200,000
Issuance of common stock under stock-based compensation plans		(0.5)		(0.5)
Issuance of common stock under stock-based compensation plans, shares			200,000
Net income		41.2				41.2
Interest rate swaps		0.3			0.3
Stock-based compensation expense		4.4		4.4
Balance Ending at Dec. 28, 2019		$ 1,378.5	$ 1.0	$ 870.5	$ (1.0)	$ 508.0
Balance Ending, shares at Dec. 28, 2019		104,400,000	104,400,000

[1] As of the beginning of fiscal 2019, the Company elected to early adopt the provisions of ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.

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Segment Information

6 Months Ended

Dec. 28, 2019

Segment Reporting [Abstract]

Segment Information

13.Segment Information

The Company has two reportable segments: Foodservice and Vistar. The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional “food-away-from-home” locations. Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customer’s menu requirements. The Vistar segment distributes candy, snacks, beverages, cigarettes, other tobacco products, and other products to customers in the vending, office coffee services, theater, retail, convenience store 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.

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.

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the three months ended December 28, 2019
Net external sales	$	3,843.9	$	2,218.6	$	6.1	$	—		$	6,068.6
Inter-segment sales		3.5		0.6		72.5		(76.6	)		—
Total sales		3,847.4		2,219.2		78.6		(76.6	)		6,068.6
Depreciation and amortization		25.8		11.5		6.5		—			43.8
Capital expenditures		8.1		12.8		5.3		—			26.2
For the three months ended December 29, 2018
Net external sales	$	3,669.3	$	941.3	$	5.1	$	—		$	4,615.7
Inter-segment sales		2.6		0.6		64.2		(67.4	)		—
Total sales		3,671.9		941.9		69.3		(67.4	)		4,615.7
Depreciation and amortization		21.7		9.3		6.1		—			37.1
Capital expenditures		25.9		4.0		5.2		—			35.1

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the six months ended December 28, 2019
Net external sales	$	7,770.9	$	4,529.1	$	11.6	$	—		$	12,311.6
Inter-segment sales		7.4		1.2		147.0		(155.6	)		—
Total sales		7,778.3		4,530.3		158.6		(155.6	)		12,311.6
Depreciation and amortization		50.4		23.1		13.0		—			86.5
Capital expenditures		16.3		21.5		11.2		—			49.0
For the six months ended December 29, 2018
Net external sales	$	7,312.6	$	1,833.1	$	9.7	$	—		$	9,155.4
Inter-segment sales		5.3		1.4		129.4		(136.1	)		—
Total sales		7,317.9		1,834.5		139.1		(136.1	)		9,155.4
Depreciation and amortization		42.6		18.2		11.8		—			72.6
Capital expenditures		42.7		6.7		10.7		—			60.1

EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.

	Three Months Ended						Six Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Foodservice EBITDA	$	113.6		$	104.3		$	217.6		$	196.3
Vistar EBITDA		56.6			45.4			108.1			77.0
Corporate & All Other EBITDA		(45.7	)		(40.3	)		(95.0	)		(77.6	)
Depreciation and amortization		(43.8	)		(37.1	)		(86.5	)		(72.6	)
Interest expense		(26.4	)		(16.0	)		(43.7	)		(31.6	)
Income before taxes	$	54.3		$	56.3		$	100.5		$	91.5

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

(In millions)	As of December 28, 2019		As of June 29, 2019
Foodservice	$	3,299.1	$	3,152.3
Vistar		1,502.0		1,271.0
Corporate & All Other		1,310.0		230.2
Total assets	$	6,111.1	$	4,653.5

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Income Taxes

6 Months Ended

Dec. 28, 2019

Income Tax Disclosure [Abstract]

Income Taxes

9. 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.

The Company’s effective tax rate was 24.2% for the three months ended December 28, 2019 and 23.4% for the three months ended December 29, 2018. The Company’s effective tax rate was 23.1% for the six months ended December 28, 2019 and 22.1% for the six months ended December 29, 2018. The effective tax rate varied from the 21% statutory rate primarily due to state taxes, federal credits and other permanent items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item.

As of December 28, 2019 and June 29, 2019, the Company had net deferred tax assets of $29.1 million and $29.1 million, respectively, and deferred tax liabilities of $131.1 million and $137.1 million, respectively. As of June 29, 2019, the Company had established a valuation allowance of $0.5 million, net of federal benefit, against deferred tax assets related to certain net operating losses which are not likely to be realized due to limitations on utilization. There was no change in the valuation allowance as of December 28, 2019. 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 28, 2019 and June 29, 2019, the Company had approximately $1.8 million and $1.9 million of unrecognized tax benefits, respectively. It is reasonably possible that a decrease of approximately $0.6 million in the balance of unrecognized tax benefits may occur within the next twelve months primarily due to statute of limitations expirations, that, if recognized, would affect the effective tax rate.

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Business Combinations

6 Months Ended

Dec. 28, 2019

Business Combinations [Abstract]

Business Combinations

5. Business Combinations

During the first six months of fiscal 2019, the Company paid cash of $57.0 million for three acquisitions. These acquisitions did not materially affect the Company’s results of operations.

    The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in the fourth quarter of fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results are achieved during a defined post-closing period. Total contingent consideration outstanding was $88.9 million as of December 28, 2019 and $82.6 million as of June 29, 2019. Earnout liabilities are measured using unobservable inputs that are considered a Level 3 measurement.

Subsequent to December 28, 2019, the Company acquired Reinhart from Reyes Holdings, L.LC. in a transaction valued at $2.0 billion, or approximately $1.7 billion net of an estimated tax benefit to PFG of approximately $265 million. The $2.0 billion purchase price was financed with $466.5 million of borrowings under the Amended Credit Agreement (as defined below), net proceeds of $1,033.7 million from new senior unsecured Notes due 2027 (as defined below), and net proceeds of $491.0 million from an offering of shares of the Company’s common stock. The Reinhart acquisition expands the Company’s broadline presence by enhancing its distribution footprint in key geographies, and the Company believes it will help achieve its long-term growth goals. The Reinhart acquisition will be reported in the Foodservice segment.

Assets acquired and liabilities assumed will be recognized at their respective fair values as of the acquisition date. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed, which will require the use of judgment. Due to the limited time since the December 30, 2019 acquisition date, the preliminary acquisition valuation is incomplete at this time and the Company is unable to provide amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed, including information required for valuation of intangible assets and goodwill.

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Business Combinations - Additional Information (Detail) $ in Millions	1 Months Ended	6 Months Ended
	Feb. 05, 2020 USD ($)	Dec. 28, 2019 USD ($) Acquisition	Dec. 29, 2018 USD ($)	Jun. 29, 2019 USD ($)
Business Acquisition [Line Items]
Cash payment for acquisition			$ 57.0
Number of acquisitions | Acquisition		3
Borrowings		$ 2,188.4		$ 1,202.9
5.500% Senior Notes due 2027 [Member]
Business Acquisition [Line Items]
Long-term debt, net		1,060.0
Eby-Brown [Member]
Business Acquisition [Line Items]
Total contingent consideration, outstanding		88.9		$ 82.6
Reinhart [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Business combination, purchase price	$ 2,000.0
Business combination, purchase price net of tax benefit	1,700.0
Business combination, estimated tax benefit	265.0
Net proceeds from offering common stock	491.0
Reinhart [Member] | Amended Credit Agreement [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Borrowings	466.5
Reinhart [Member] | 5.500% Senior Notes due 2027 [Member] | Subsequent Event [Member]
Business Acquisition [Line Items]
Long-term debt, net	$ 1,033.7
Business Acquisition Cost [Member]
Business Acquisition [Line Items]
Cash payment for acquisition		$ 57.0

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Debt - Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility (Detail) - ABL Facility [Member] - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Debt Instrument [Line Items]
Aggregate borrowings	$ 786.4	$ 859.0
Letters of credit under credit agreements	95.0	89.9
Excess availability, net of lenders’ reserves of $40.3 and $38.6	$ 1,295.2	$ 1,182.7
Average interest rate	3.22%	4.01%

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Leases - Summary of Location of Lease Costs in Consolidated Statement of Operations (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Dec. 28, 2019	Dec. 28, 2019
Finance lease cost:
Amortization of finance lease assets	$ 5.8	$ 10.5
Interest on lease liabilities	2.7	4.9
Total finance lease cost	8.5	15.4
Operating lease cost	26.7	54.8
Short-term lease cost	5.6	11.5
Total lease cost	$ 40.8	$ 81.7

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Segment Information - Summary Assets by Reportable Segment, Excluding Intercompany Receivables (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Segment Reporting Information [Line Items]
Total assets	$ 6,111.1	$ 4,653.5
Foodservice [Member]
Segment Reporting Information [Line Items]
Total assets	3,299.1	3,152.3
Vistar [Member]
Segment Reporting Information [Line Items]
Total assets	1,502.0	1,271.0
Corporate & All Other [Member]
Segment Reporting Information [Line Items]
Total assets	$ 1,310.0	$ 230.2

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Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Long-term debt	$ 2,188.4	$ 1,202.9
Reported Value Measurement [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Long-term debt	2,188.4	1,202.9
Fair Value Inputs Level 2 [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value of long term debt	$ 2,280.0	$ 1,216.3

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Earnings Per Common Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Earnings Per Share [Abstract]
Potential common shares not included in computing diluted earnings per common share due to antidilutive effect	0.1	0.5	0.1	0.6

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Consolidated Statements of Cash Flows (Reconciliation) - USD ($) $ in Millions		Dec. 28, 2019	Jun. 29, 2019
Supplemental Cash Flow Elements [Abstract]
Cash		$ 12.7	$ 14.7
Restricted cash	[1]	1,089.2	10.7
Total cash and restricted cash		$ 1,101.9	$ 25.4

[1] Restricted cash is included in current restricted cash and long-term restricted cash on the consolidated balance sheet. The current restricted cash includes the proceeds from the issuance of senior notes that are held in escrow as of December 28, 2019 and were used to fund the acquisition of Reinhart Foodservice, L.L.C (“Reinhart”) that closed on December 30, 2019, as well as funds that will be used for the interest payments on those senior notes. The long-term restricted cash represents the amounts required by insurers to collateralize a part of the deductibles for the Company’s workers’ compensation and liability claims.

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Summary of Business Activities - Additional Information (Detail) - USD ($)				3 Months Ended	6 Months Ended
	Dec. 30, 2019	Nov. 22, 2019	Nov. 20, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018	Nov. 13, 2018
Business Description [Line Items]
Repurchased and retired shares, value				$ 5,200,000		$ 5,200,000
Underwriter's Option [Member]
Business Description [Line Items]
Stock issued			10,120,000
Shares issued, aggregate offering price	$ 514,900,000
Underwriting discount per share	$ 1.55
Discounts on underwriting	$ 18,000,000.0
Direct offering expenses	5,900,000
Net proceeds received from common stock offering	$ 491,000,000.0
Underwriter's Option [Member] | Forward Sale [Member]
Business Description [Line Items]
Stock issued		1,518,000
Stock issued, price per share	$ 42.70
Maximum [Member] | Underwriter's Option [Member] | Forward Sale [Member]
Business Description [Line Items]
Option to purchase common stock			1,518,000
Common Stock [Member]
Business Description [Line Items]
Number of shares repurchased and retired				200,000		200,000
Share repurchase plan, remaining available amount					$ 240,700,000
Number of shares repurchased					0
Common Stock [Member] | Maximum [Member]
Business Description [Line Items]
Share repurchase program, authorized amount							$ 250,000,000

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Debt (Tables)

6 Months Ended

Dec. 28, 2019

Schedule of Debt

Debt consisted of the following:

(In millions)	As of December 28, 2019			As of June 29, 2019
ABL Facility	$	786.4		$	859.0
5.500% Notes due 2024		350.0			350.0
5.500% Notes due 2027		1,060.0			-
Less: Original issue discount and deferred financing costs		(8.0	)		(6.1	)
Long-term debt		2,188.4			1,202.9
Less: current installments		-			-
Total debt, excluding current installments	$	2,188.4		$	1,202.9

ABL Facility [Member]

Summary of Outstanding Borrowings, Availability, and Average Interest Rate under ABL Facility

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

(Dollars in millions)	As of December 28, 2019			As of June 29, 2019
Aggregate borrowings	$	786.4		$	859.0
Letters of credit under credit agreements		95.0			89.9
Excess availability, net of lenders’ reserves of $40.3 and $38.6		1,295.2			1,182.7
Average interest rate		3.22	%		4.01	%

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Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Income Statement [Abstract]
Net sales	$ 6,068.6	$ 4,615.7	$ 12,311.6	$ 9,155.4
Cost of goods sold	5,357.4	4,001.1	10,889.0	7,947.2
Gross profit	711.2	614.6	1,422.6	1,208.2
Operating expenses	630.7	541.6	1,278.6	1,084.6
Operating profit	80.5	73.0	144.0	123.6
Other expense, net:
Interest expense	26.4	16.0	43.7	31.6
Other, net	(0.2)	0.7	(0.2)	0.5
Other expense, net	26.2	16.7	43.5	32.1
Income before taxes	54.3	56.3	100.5	91.5
Income tax expense	13.1	13.2	23.2	20.2
Net income	$ 41.2	$ 43.1	$ 77.3	$ 71.3
Weighted-average common shares outstanding:
Basic	104.3	103.9	104.2	103.7
Diluted	106.4	104.9	106.2	105.0
Earnings per common share:
Basic	$ 0.39	$ 0.41	$ 0.74	$ 0.69
Diluted	$ 0.39	$ 0.41	$ 0.73	$ 0.68

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Debt - Schedule of Debt (Parenthetical) (Detail)		6 Months Ended
	May 17, 2016	Dec. 28, 2019	Sep. 27, 2019
5.500% Senior Notes due 2024 [Member]
Debt Instrument [Line Items]
Debt instruments amount, interest rate	5.50%	5.50%
Debt instruments maturity year	2024	2024
5.500% Senior Notes due 2027 [Member]
Debt Instrument [Line Items]
Debt instruments amount, interest rate		5.50%	5.50%
Debt instruments maturity year		2027

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Leases - Additional Information (Detail) $ in Millions	6 Months Ended
	Dec. 28, 2019 USD ($)
Lessee Lease Description [Line Items]
Operating lease renewal term	10 years
Operating lease, Option to extend	true
Operating lease, Option to extend description	options to extend the leases for up to 10 years
Operating lease, Option to terminate description	options to terminate the leases within 1 year
Operating lease, Option to terminate	true
Finance lease renewal term	10 years
Finance lease, Option to extend	true
Finance lease, Option to extend description	options to extend the leases for up to 10 years
Finance lease, Option to terminate description	options to terminate the leases within 1 year
Finance lease, Option to terminate	true
Undiscounted maximum amount for guarantees	$ 23.2
Future minimum operating lease and finance lease payments, not yet commenced	$ 46.9
Operating leases commencement year	2020
Residual value guarantee	$ 1.2
Minimum [Member]
Lessee Lease Description [Line Items]
Operating lease remaining term	1 year
Finance lease remaining term	1 year
Percentage of residual value guarantee under operating lease	7.00%
Operating lease expiration term	5 years
Operating lease expiration year	2020
Operating leases, not yet commenced, lease term	3 years
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease remaining term	20 years
Finance lease remaining term	20 years
Percentage of residual value guarantee under operating lease	11.00%
Operating lease expiration term	8 years
Operating lease expiration year	2025
Operating leases, not yet commenced, lease term	15 years

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Leases

6 Months Ended

Dec. 28, 2019

Leases [Abstract]

Leases

7.Leases

The Company determines if an arrangement is a lease at inception and recognizes a financing or operating lease liability and right-of-use asset in the Company’s consolidated balance sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. Since the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. This rate was determined by using the yield curve based on the Company’s credit rating adjusted for the Company’s specific debt profile and secured debt risk. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expenses for these short-term leases are recognized on a straight-line basis over the lease term. The Company has several lease agreements that contain lease and non-lease components, such as maintenance, taxes, and insurance, which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent.

Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. Certain full-service fleet lease agreements include variable lease payments associated with usage, which are recorded and paid as incurred. When calculating lease liabilities, lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.  

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 11% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 5 to 8 years and expiration dates ranging from 2020 to 2025. As of December 28, 2019, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately $23.2 million, which would be mitigated by the fair value of the leased assets at lease expiration.

The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of December 28, 2019 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases:

Leases	Consolidated Balance Sheet Location	As of December 28, 2019
Assets:
Operating	Operating lease right-of-use assets	$	391.3
Finance	Property, plant and equipment, net		179.3
Total lease assets		$	570.6
Liabilities:
Current
Operating	Operating lease obligations—current installments	$	78.4
Finance	Finance lease obligations—current installments		24.6
Non-current
Operating	Operating lease obligations, excluding current installments		314.6
Finance	Finance lease obligations, excluding current installments		164.5
Total lease liabilities		$	582.1
Weighted average remaining lease term
Operating leases		7.6 years
Finance leases		7.1 years
Weighted average discount rate
Operating leases			5.4	%
Finance leases			5.6	%

The following table presents the location of lease costs in the Company consolidated statement of operations for the three and six months ended December 28, 2019 (in millions):

Lease Cost	Statement of Operations Location	Three months ended December 28, 2019		Six months ended December 28, 2019
Finance lease cost:
Amortization of finance lease assets	Operating expenses	$	5.8	$	10.5
Interest on lease liabilities	Interest expense		2.7		4.9
Total finance lease cost		$	8.5	$	15.4
Operating lease cost	Operating expenses		26.7		54.8
Short-term lease cost	Operating expenses		5.6		11.5
Total lease cost		$	40.8	$	81.7

Supplemental cash flow information related to leases for the period reported is as follows (in millions):

(In millions)	Six months ended December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	53.3
Operating cash flows from finance leases		4.9
Financing cash flows from finance leases		10.6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		11.1
Finance leases		52.5

Future minimum lease payments under non-cancelable leases as of December 28, 2019 are as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases
Remaining 2020	$	50.2	$	17.4
2021		90.6		34.5
2022		74.6		34.0
2023		59.5		32.9
2024		42.4		32.0
Thereafter		176.0		84.0
Total future minimum lease payments	$	493.3	$	234.8
Less: Interest		100.3		45.7
Present value of future minimum lease payments	$	393.0	$	189.1

Future minimum lease payments in effect as of June 29, 2019 under non-cancelable leases, as determined prior to the adoption of ASC 842, were as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases
2020	$	104.7	$	26.7
2021		89.6		26.3
2022		73.8		25.8
2023		58.2		24.7
2024		40.8		23.9
Thereafter		163.8		58.4
Total future minimum lease payments	$	530.9	$	185.8
Less: Interest				38.6
Present value of future minimum lease payments			$	147.2

As of December 28, 2019, the Company has additional operating and finance leases that have not yet commenced which total $46.9 million in future minimum lease payments and $1.2 million of residual value guarantees. These leases primarily relate to warehouse leases and will commence in fiscal 2020 with lease terms of 3 to 15 years.

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Recently Issued Accounting Pronouncements

6 Months Ended

Dec. 28, 2019

Accounting Changes And Error Corrections [Abstract]

Recently Issued Accounting Pronouncements

3. Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and has issued subsequent amendments to this guidance. 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. The Company adopted this new standard as of June 30, 2019, the effective and initial application date, using the modified retrospective approach. Comparative periods presented in the consolidated financial statements prior to June 30, 2019 continue to be presented under Accounting Standards Codification (“ASC”) 840. The Company elected the package of practical expedients, which allowed the Company not to reassess whether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The Company also made a policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheet, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company’s June 30, 2019 adoption of the new standard resulted in the recognition of operating lease liabilities totaling $423.8 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, with $82.1 million within Operating lease liabilities - current and $341.7 million within Operating lease liabilities, excluding current installments. In addition, we recorded corresponding Operating lease right-of-use assets totaling $423.0 million based upon the operating lease liabilities adjusted for deferred rent of $11.0 million, favorable lease intangible assets of $5.3 million and prepaid rent and other adjustments of $4.9 million. The new standard did not have a material impact on the consolidated statements of operations and the consolidated statement of cash flows. See Note 7. Leases for further discussion of the Company’s leasing arrangements and required ASC 842 disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and has issued subsequent amendments to this guidance. 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. The Company plans to adopt the new standard in fiscal 2021. 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 its future consolidated financial statements but does not expect this update to have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2021. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes by removing certain exceptions for intra-period tax allocations, recognition of deferred tax liabilities after a foreign subsidiary transitions to or from equity method accounting, and methodology of calculating income taxes in an interim period with year-to-date losses. Additionally, the guidance provides additional clarification on other areas, including step-up of the tax basis of goodwill recorded as part of an acquisition and the treatment of franchise taxes that are partially based on income. This pronouncement is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2022. Companies are required to apply the standard on a prospective basis, except for certain sections of the guidance which shall be applied on a retrospective or modified retrospective basis. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

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Related-Party Transactions

6 Months Ended

Dec. 28, 2019

Related Party Transactions [Abstract]

Related-Party Transactions

11. Related-Party Transactions

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 $5.1 million as of December 28, 2019 and $4.6 million as of June 29, 2019. For the three-month periods ended December 28, 2019 and December 29, 2018, the Company recorded purchases of $244.2 million and $206.2 million, respectively, through the purchasing alliance. During the six-month periods ended December 28, 2019 and December 29, 2018, the Company recorded purchases of $498.4 million and $433.1 million, respectively, through the purchasing alliance.

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Debt - Additional Information (Detail) - USD ($)					6 Months Ended
	Dec. 30, 2019	Sep. 27, 2019	Aug. 09, 2018	May 17, 2016	Dec. 28, 2019	Jun. 29, 2019
Letters of Credit Facility [Member]
Debt Instrument [Line Items]
Letters of credit, maximum borrowing capacity			$ 40,000,000.0
Percentage fee on average daily amount available to be drawn on each day under each outstanding letter of credit			2.50%
Letter of credits, outstanding amount					$ 28,300,000
Maximum [Member] | Letters of Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, term			1 year
ABL Facility [Member]
Debt Instrument [Line Items]
Debt instruments face amount					$ 2,400,000,000
Credit facility, maturity date					May 17, 2024
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.
Letter of credits, outstanding amount					$ 95,000,000.0	$ 89,900,000
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%
ABL Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Credit facility, commitment fee percentage					0.25%
Amended Credit Agreement [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instruments face amount	$ 3,000,000,000.0
Credit facility, maturity date	Dec. 30, 2024
Committed amount to be maintained under the covenant	$ 200,000,000.0
Covenant borrowing base, percentage	10.00%
Credit facility, covenant term	the greater of (i) $200.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days.
Amended Credit Agreement [Member] | Maximum [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Credit facility, uncommitted incremental facilities	$ 800,000,000
5.500% Senior Notes due 2027 [Member]
Debt Instrument [Line Items]
Debt instruments face amount		$ 1,060,000,000.0
Debt instruments amount, interest rate		5.50%			5.50%
Issue price of notes as a percentage of par value		100.00%
Debt Instrument maturity date		Oct. 15, 2027
Debt instruments frequency of payments					semi-annually
Debt Instrument, description of redemption					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 due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 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.
Percentage price of principal amount at which debt can be redeemed		100.00%
Debt instruments maturity year					2027
5.500% Senior Notes due 2027 [Member] | Change of Control Triggering Event [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		101.00%
5.500% Senior Notes due 2027 [Member] | Case of Asset Sale [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		100.00%
5.500% Senior Notes due 2027 [Member] | Beginning on October 15, 2022 [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		102.75%
5.500% Senior Notes due 2027 [Member] | On October 15, 2023 [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		101.375%
5.500% Senior Notes due 2027 [Member] | On October 15, 2024 [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		100.00%
5.500% Senior Notes due 2027 [Member] | Prior to October 15, 2022 [Member]
Debt Instrument [Line Items]
Percentage price of principal amount at which debt can be redeemed		105.50%
5.500% Senior Notes due 2027 [Member] | Maximum [Member]
Debt Instrument [Line Items]
Early debt redemption percentage		40.00%
5.500% Senior Notes due 2024 [Member]
Debt Instrument [Line Items]
Debt instruments face amount				$ 350,000,000.0
Debt instruments amount, interest rate				5.50%	5.50%
Debt instruments maturity year				2024	2024

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Leases - Summary of Right-of-Use Assets and Lease Liabilities in Consolidated Balance Sheet (Detail) - USD ($) $ in Millions	Dec. 28, 2019	Jun. 29, 2019
ASSETS
Operating	$ 391.3
Finance	$ 179.3
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Total lease assets	$ 570.6
Current liabilities:
Operating	78.4
Finance	24.6	$ 18.3
Non-current Liabilities:
Operating	314.6
Finance	164.5	$ 128.9
Total lease liabilities	$ 582.1
Weighted average remaining lease term
Operating leases	7 years 7 months 6 days
Finance leases	7 years 1 month 6 days
Weighted average discount rate
Operating leases	5.40%
Finance leases	5.60%

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Commitments and Contingencies

6 Months Ended

Dec. 28, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

Purchase Obligations

The Company had outstanding contracts and purchase orders for capital projects and services totaling $37.4 million at December 28, 2019. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of December 28, 2019.

Guarantees 

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.

Reinhart Transaction Commitments

As of December 28, 2019, the Company had several outstanding commitments due upon the closing of the acquisition of Reinhart. These commitments, totaling $63.8 million, included $26.0 million of fees related to the Notes due 2027, $4.9 million of fees related to expected additional borrowings under the Amended Credit Agreement, $23.9 million of underwriting and issuance costs for the offering of shares of the Company’s stock, and $9.0 million related to advisory fees for the acquisition. Upon the closing of the Reinhart acquisition on December 30, 2019, these commitments were paid.

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 (“EEOC”) Field Office served the Company 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 the Company 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 the Company’s broadline distribution centers only and not to the Company’s PFG Customized distribution centers). The Company cooperated with the EEOC on the production of information. In September 2011, the EEOC notified the Company 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 the Company 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 the Company’s broadline division in violation of Title VII. In June 2013, the EEOC filed suit in federal court in Baltimore against the Company. The litigation concerns two issues: (1) whether the Company unlawfully engaged in

an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether the Company 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 the Company 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 the Company 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 the Company 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, the Company is 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.

In May 2018, the EEOC filed motions for sanctions against the Company alleging that we failed to preserve certain paper employment applications and e-mails during 2004 – 2009. In the sanctions motions, the EEOC sought a range of remedies, including but not limited to, a default judgment against the Company, or alternatively, an order barring the Company from filing for summary judgment on the EEOC’s pattern and practice claims. The court denied the EEOC’s motions in June 2019, but reserved ruling on whether the unavailability of certain documents will prejudice the EEOC’s ability to present expert testimony at the trial.

The parties have filed cross motions for summary judgment, the briefing period has concluded, and the motions are now before the court. There is no specific deadline for the court to issue its ruling on the motions. The Company will continue to vigorously defend itself.

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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Debt

6 Months Ended

Dec. 28, 2019

Debt Disclosure [Abstract]

Debt

6. 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 28, 2019			As of June 29, 2019
ABL Facility	$	786.4		$	859.0
5.500% Notes due 2024		350.0			350.0
5.500% Notes due 2027		1,060.0			-
Less: Original issue discount and deferred financing costs		(8.0	)		(6.1	)
Long-term debt		2,188.4			1,202.9
Less: current installments		-			-
Total debt, excluding current installments	$	2,188.4		$	1,202.9

Credit Agreement

As of December 28, 2019, PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the Third Amended and Restated Credit Agreement dated May 17, 2019 (the “ABL Facility”). The ABL Facility has an aggregate principal amount of $2.4 billion and matures on May 17, 2024. 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, and secured by the majority of the assets of, 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 of 0.25% per annum.

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

(Dollars in millions)	As of December 28, 2019			As of June 29, 2019
Aggregate borrowings	$	786.4		$	859.0
Letters of credit under credit agreements		95.0			89.9
Excess availability, net of lenders’ reserves of $40.3 and $38.6		1,295.2			1,182.7
Average interest rate		3.22	%		4.01	%

On December 30, 2019, PFGC and Performance Food Group, Inc. entered into the Fourth Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other lenders party thereto, which amends and restates the ABL Facility. The Amended Credit Agreement, among other things, (i) increases the aggregate principal amount available to $3.0 billion and (ii) extends the stated maturity date to December 30, 2024. Like the ABL Facility, the Amended Credit Agreement provides for up to $800 million of uncommitted incremental facilities. Additionally, certain covenants were amended to require the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $200.0 million and (ii) 10% of the lesser of the borrowing base and the revolving credit facility amount for five consecutive business days.

Senior Notes due 2027

On September 27, 2019, PFG Escrow Corporation (the “Escrow Issuer”), a wholly-owned subsidiary of PFGC, issued and sold $1,060.0 million aggregate principal amount of its 5.500% Senior Notes due 2027 (the “Notes due 2027”).

Upon issuance of the Notes due 2027, the gross proceeds of the offering, along with certain additional funds were deposited into a segregated escrow account. Following the completion of the Reinhart acquisition on December 30, 2019 the funds were released from escrow and were used, together with the net proceeds from an offering of shares of the Company’s common stock and borrowings under the Amended Credit Agreement, to fund the cash consideration for the transaction and to pay related fees and expenses. The Escrow Issuer merged with and into Performance Food Group, Inc., with Performance Food Group, Inc. as the surviving entity, and by entry into a supplemental indenture along with PFGC, Performance Food Group, Inc. assumed all of the Escrow Issuer’s obligations as the issuer under the indenture for the Notes due 2027. Additionally, PFGC and each of the subsidiaries of PFGC identified as a guaranteeing subsidiary became a guarantor of the Notes due 2027.

The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 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 due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 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 due 2027 at any time prior to October 15, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2027 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 October 15, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.375% and 100% of the principal amount redeemed on October 15, 2023 and October 15, 2024, respectively. In addition, at any time prior to October 15, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2027 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 due 2027 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 due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.

Senior Notes due 2024

    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 due 2024”). The Notes due 2024 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 due 2024 are not guaranteed by Performance Food Group Company.

Letters of Credit Facility

On August 9, 2018, Performance Food Group, Inc. and PFGC entered into a Continuing Agreement for Letters of Credit (the “Letters of Credit Facility”). The Letters of Credit Facility is an uncommitted facility that provides for the issuance of letters of credit in an aggregate amount not to exceed $40.0 million. Each letter of credit shall have a term not to exceed one year; however, a letter of credit may renew automatically in accordance with its terms. A fee equal to 2.5% per annum on the average daily amount available to be drawn on each day under each outstanding letter of credit is payable quarterly. As of December 28, 2019, the Company has $28.3 million letters of credit outstanding under the Letters of Credit Facility.

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Basis of Presentation

6 Months Ended

Dec. 28, 2019

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 June 29, 2019 consolidated balance sheet, which was derived from the audited consolidated financial statements included in 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, leases, 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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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018	Jun. 29, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	24.20%	23.40%	23.10%	22.10%
U.S. federal corporate income tax rate	21.00%
Net deferred tax assets	$ 29,100,000		$ 29,100,000		$ 29,100,000
Net deferred tax liabilities	131,100,000		131,100,000		137,100,000
Valuation allowance	0		0		500,000
Unrecognized tax benefits	$ 1,800,000		1,800,000		$ 1,900,000
Decrease in unrecognized tax benefits			$ 600,000

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Earnings Per Common Share - Schedule of Reconciliation of Numerators and Denominators for Basic and Diluted Earnings Per Common Share Computations (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Numerator:
Net income	$ 41.2	$ 43.1	$ 77.3	$ 71.3
Denominator:
Weighted-average common shares outstanding	104.3	103.9	104.2	103.7
Dilutive effect of potential common shares	2.1	1.0	2.0	1.3
Weighted-average dilutive shares outstanding	106.4	104.9	106.2	105.0
Basic earnings per common share	$ 0.39	$ 0.41	$ 0.74	$ 0.69
Diluted earnings per common share	$ 0.39	$ 0.41	$ 0.73	$ 0.68

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Segment Information (Tables)

6 Months Ended

Dec. 28, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

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.

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the three months ended December 28, 2019
Net external sales	$	3,843.9	$	2,218.6	$	6.1	$	—		$	6,068.6
Inter-segment sales		3.5		0.6		72.5		(76.6	)		—
Total sales		3,847.4		2,219.2		78.6		(76.6	)		6,068.6
Depreciation and amortization		25.8		11.5		6.5		—			43.8
Capital expenditures		8.1		12.8		5.3		—			26.2
For the three months ended December 29, 2018
Net external sales	$	3,669.3	$	941.3	$	5.1	$	—		$	4,615.7
Inter-segment sales		2.6		0.6		64.2		(67.4	)		—
Total sales		3,671.9		941.9		69.3		(67.4	)		4,615.7
Depreciation and amortization		21.7		9.3		6.1		—			37.1
Capital expenditures		25.9		4.0		5.2		—			35.1

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the six months ended December 28, 2019
Net external sales	$	7,770.9	$	4,529.1	$	11.6	$	—		$	12,311.6
Inter-segment sales		7.4		1.2		147.0		(155.6	)		—
Total sales		7,778.3		4,530.3		158.6		(155.6	)		12,311.6
Depreciation and amortization		50.4		23.1		13.0		—			86.5
Capital expenditures		16.3		21.5		11.2		—			49.0
For the six months ended December 29, 2018
Net external sales	$	7,312.6	$	1,833.1	$	9.7	$	—		$	9,155.4
Inter-segment sales		5.3		1.4		129.4		(136.1	)		—
Total sales		7,317.9		1,834.5		139.1		(136.1	)		9,155.4
Depreciation and amortization		42.6		18.2		11.8		—			72.6
Capital expenditures		42.7		6.7		10.7		—			60.1

Schedule of EBDITA and Reconciliation to Consolidated Income Before Taxes

EBITDA for each reportable segment and Corporate & All Other is presented below along with a reconciliation to consolidated income before taxes.

	Three Months Ended						Six Months Ended
	December 28, 2019			December 29, 2018			December 28, 2019			December 29, 2018
Foodservice EBITDA	$	113.6		$	104.3		$	217.6		$	196.3
Vistar EBITDA		56.6			45.4			108.1			77.0
Corporate & All Other EBITDA		(45.7	)		(40.3	)		(95.0	)		(77.6	)
Depreciation and amortization		(43.8	)		(37.1	)		(86.5	)		(72.6	)
Interest expense		(26.4	)		(16.0	)		(43.7	)		(31.6	)
Income before taxes	$	54.3		$	56.3		$	100.5		$	91.5

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 28, 2019		As of June 29, 2019
Foodservice	$	3,299.1	$	3,152.3
Vistar		1,502.0		1,271.0
Corporate & All Other		1,310.0		230.2
Total assets	$	6,111.1	$	4,653.5

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Document and Entity Information - shares	6 Months Ended
	Dec. 28, 2019	Jan. 29, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 28, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Registrant Name	Performance Food Group Company
Entity Central Index Key	0001618673
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--06-27
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		117,181,486
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Trading Symbol	PFGC
Entity File Number	001-37578
Entity Tax Identification Number	43-1983182
Entity Address, Address Line One	12500 West Creek Parkway
Entity Address, City or Town	Richmond
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23238
City Area Code	804
Local Phone Number	484-7700
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $0.01 par value
Security Exchange Name	NYSE
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

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Summary of Significant Accounting Policies and Estimates (Policies)

6 Months Ended

Dec. 28, 2019

Accounting Policies [Abstract]

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and has issued subsequent amendments to this guidance. 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. The Company adopted this new standard as of June 30, 2019, the effective and initial application date, using the modified retrospective approach. Comparative periods presented in the consolidated financial statements prior to June 30, 2019 continue to be presented under Accounting Standards Codification (“ASC”) 840. The Company elected the package of practical expedients, which allowed the Company not to reassess whether arrangements contain leases, the classification of leases, and the capitalization of initial direct costs. The Company also made a policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheet, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company’s June 30, 2019 adoption of the new standard resulted in the recognition of operating lease liabilities totaling $423.8 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, with $82.1 million within Operating lease liabilities - current and $341.7 million within Operating lease liabilities, excluding current installments. In addition, we recorded corresponding Operating lease right-of-use assets totaling $423.0 million based upon the operating lease liabilities adjusted for deferred rent of $11.0 million, favorable lease intangible assets of $5.3 million and prepaid rent and other adjustments of $4.9 million. The new standard did not have a material impact on the consolidated statements of operations and the consolidated statement of cash flows. See Note 7. Leases for further discussion of the Company’s leasing arrangements and required ASC 842 disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and has issued subsequent amendments to this guidance. 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. The Company plans to adopt the new standard in fiscal 2021. 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 its future consolidated financial statements but does not expect this update to have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2021. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes by removing certain exceptions for intra-period tax allocations, recognition of deferred tax liabilities after a foreign subsidiary transitions to or from equity method accounting, and methodology of calculating income taxes in an interim period with year-to-date losses. Additionally, the guidance provides additional clarification on other areas, including step-up of the tax basis of goodwill recorded as part of an acquisition and the treatment of franchise taxes that are partially based on income. This pronouncement is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt this new ASU in fiscal 2022. Companies are required to apply the standard on a prospective basis, except for certain sections of the guidance which shall be applied on a retrospective or modified retrospective basis. The Company is in the process of assessing the impact of this ASU on its future consolidated financial statements but does not expect this update to have a material impact on the Company's consolidated financial statements.

Revenue Recognition

4. Revenue Recognition

The Company markets and distributes primarily national and company-branded food and food-related products to customer locations across the United States. The Foodservice segment supplies a “broad line” of products to its customers, including the

Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13. Segment Information for external revenue by reportable segment.

The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized to net sales over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled $12.3 million and $10.6 million as of December 28, 2019 and June 29, 2019, respectively.

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 28, 2019	Dec. 29, 2018	Dec. 28, 2019	Dec. 29, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 41.2	$ 43.1	$ 77.3	$ 71.3
Interest rate swaps:
Change in fair value, net of tax	0.5	(3.0)		(2.2)
Reclassification adjustment, net of tax	(0.2)	(0.8)	(0.8)	(1.3)
Other comprehensive income (loss)	0.3	(3.8)	(0.8)	(3.5)
Total comprehensive income	$ 41.5	$ 39.3	$ 76.5	$ 67.8

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Summary of Business Activities

6 Months Ended

Dec. 28, 2019

Accounting Policies [Abstract]

Summary of Business Activities

1. Summary of Business Activities

Business Overview

Performance Food Group Company, through its subsidiaries, markets and distributes primarily 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 customers, and (ii) multi-unit, or “Chain” customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and business and industry locations. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products and other items nationally to vending distributors, big box retailers, theaters, convenience stores, and hospitality providers.

Share Repurchase Program

On November 13, 2018, the Board of Directors of the Company (the “Board of Directors”) authorized a share repurchase program for up to $250 million of the Company’s outstanding common stock. The share repurchase program does not have an expiration date and may be amended, suspended, or discontinued at any time. The share repurchase program remains subject to the discretion of the Board of Directors. No shares have been repurchased during fiscal year 2020. During the three months ended December 29, 2018, the Company repurchased and subsequently retired 0.2 million shares of common stock for a total of $5.2 million. As of December 28, 2019, approximately $240.7 million remained available for additional share repurchases.

Equity Forward

On November 20, 2019, Performance Food Group Company entered into an underwriting agreement related to the issuance and sale of an aggregate of 10,120,000 shares of its common stock, and up to 1,518,000 additional shares at the underwriters’ option, in each case on a forward sale basis. On November 22, 2019, the full option to purchase the 1,518,000 shares of additional common stock shares on a forward basis was exercised by the underwriters, and, on November 25, 2019, the Company closed the offering. The forward sale transaction is classified as an equity transaction, because it is indexed to the Company’s common stock and physical settlement is within the Company’s control. As of December 28, 2019, no amounts have been recorded in the consolidated financial statements with respect to the equity offering. On December 30, 2019, the Company physically settled the forward sale agreement at the forward sale price of $42.70 per share, net of the underwriting discount. The aggregate offering price of the amount of newly issued common stock was $514.9 million. In connection with the offering, the Company paid the underwriters a discount of $1.55 per share, for a total underwriting discount of $18.0 million. In addition, the Company incurred direct offering expenses of $5.9 million. The Company used the $491.0 million net proceeds that it received from the common stock offering to finance the cash consideration payable in connection with the Reinhart acquisition.