Performance Food Group Company Annual Report 2016

← All annual reports

FY2016 Annual Report · Performance Food Group Company

Loading PDF…

WWW.PFGC.COM

R12500 West Creek Parkway

1Richmond, VA 23238

FOUNDED ON FOOD
FOCUSED ON SERVICE

2016 Annual Report

P
e
r
f
o
r
m
a
n
c
e

F
o
o
d
G
r
o
u
p

2
0
1
6
A
n
n
u
a

R
e
p
o
r
t

PERFORMANCE FOOD GROUP
AT A GLANCE

Performance Food Group markets and distributes

Performance Food Group markets and distributes ap-

proximately 150,000 food and food-related products
approximately 150,000 food and food-related products

to 150,000 customer locations across the United States

through its PERFORMANCE Foodservice, Vistar and PFG

Customized segments. Over 13,000 associates working
Customized divisions. Over 13,000 associates work-

from 71 distribution centers serve a diverse mix of

ing from 71 distribution centers serve a diverse mix of

customers, spanning independent and chain restaurants,

schools, business and industry locations, hospitals,

vending distributors, office coffee service distributors,

big box retailers, and theaters. Our products are sourced

from more than 5,000 suppliers, allowing us to source

the best products and negotiate competitive pricing.

FINANCIAL HIGHLIGHTS
(in $ dollars)

Net Sales

Gross Profit

Net Income

Adjusted EBITDA

2016

$ 16.1 billion

2.0 billion

$ 68.3 million

$ 366.6 million

NET SALES = $16.1 BILLION

60%

17%

23%

■ Performance
Foodservice

■ Vistar

■ PFG
Customized

BOARD OF DIRECTORS

SHAREHOLDER INFORMATION

DOUGLAS M. STEENLAND

PRAKASH A. MELWANI

Chairman of the
Board of Directors

Audit Committee

Compensation Committee

Director

Compensation Committee
(Chair)

JEFFREY M. OVERLY

MEREDITH ADLER

Director

Audit Committee

Nominating and Corporate
Governance Committee

WILLIAM F. DAWSON, JR.

ARTHUR B. WINKLEBLACK

Director

Nominating and Corporate
Governance Committee
(Chair)

Director

Audit Committee (Chair)

Nominating and Corporate
Governance Committee

GEORGE L. HOLM

President and
Chief Executive Officer

Director

BRUCE MCEVOY

Director

Compensation Committee

JOHN J. ZILLMER

Director

Audit Committee

Compensation Committee

CORPORATE
HEADQUARTERS
Performance Food Group
12500 West Creek Parkway
Richmond, Virginia 23238
804-484-7700

OFFICE OF
INVESTOR RELATIONS
Michael Neese
12500 West Creek Parkway
Richmond, Virginia 23238
804-287-8126
michael.neese@pfgc.com

TRANSFER AGENT
AND REGISTRAR
Computershare Investor Services
P.O. Box 43078
Providence, Rhode Island 02940

INDEPENDENT AUDITORS
Deloitte & Touche LLP
Richmond, VA

INTERNET ACCESS
HELPS REDUCE COSTS

Please visit us at www.pfgc.com.

ANNUAL MEETING
OF SHAREHOLDERS
Friday, December 2, 2016
9:00 a.m.

Offices of Simpson
Thacher & Bartlett LLP

425 Lexington Avenue
New York, New York 10017

STOCK EXCHANGE LISTING

PFG’s common stock
is traded on the
New York Stock
Exchange under the
symbol “PFGC.”

Design: Andra Design
Photography: PFG Archives
Printer: Stephenson Printing Inc.

DEAR SHAREHOLDER

Fiscal 2016 was a productive year at
Performance Food Group (PFG). We
successfully completed an initial public
offering listing our shares on the New York
Stock Exchange and subsequently completed
a secondary offering to investors in the midst
of a volatile environment. At the same time our
team remained intently focused on strategic
initiatives for growth. Our annual results were
fueled by momentum across our business,
including strong independent case growth.
Full-year net sales topped $16 billion, and
gross profit topped $2 billion for the first time
in our Company’s history. Margin improvement
growth resulted from the benefits of improved
mix and operating leverage from strong sales
growth and PFG’s Winning Together program.
These operational and financial results helped
us generate a total shareholder return from
October 1st through June 30th of 40.2%, far
outpacing the S&P 500 return of 9.1%.

KEY FISCAL 2016 HIGHLIGHTS INCLUDE:

n Excluding the extra week of sales for the
year, our total cases grew 4.8%, case
growth to independent street customers
was 8.6%, and we continued to gain
market share;
n Case volume growth reflected new and
expanding business with Street customers in
the PERFORMANCE Foodservice segment
and broad-based growth in Vistar’s sales
channels;
n Our PERFORMANCE brands posted
double-digit growth;
n We grew our gross profit per case and

increased our gross profit margins;
n Our net income growth of 20.9% and
Adjusted EBITDA growth of 11.6%

reflected the strong performance of our

diverse business model;
n Diluted EPS increased 9.4% and our
Adjusted Diluted EPS increased 23.5%;
n PFG delivered $235 million in cash flows
from operating activities, an improvement
of $108 million further reflecting our strong
operating results and the benefits of
deflation in our working capital.

Most importantly, we have a great team
focused on serving our customers, and I want
to thank all of our associates and let them
know how proud I am of their contributions to
PFG this year. Thank you for your hard work
and your commitment to our great company.

LONG-TERM FINANCIAL GOAL

PFG’s diverse business model enabled us to
deliver on our key, long-term financial goal
in fiscal 2016. We grew Adjusted EBITDA
by 9.1%, excluding an extra week of sales,
which was within our 7% to 10% long-term
growth range. We achieved this consistent
growth through the execution of our four
core strategies:

n Grow our customer base, brands,
and channels
n Expand margins through creating
customer value and by driving
productivity improvements
n Pursue strategic acquisitions
n Deliver consistent financial performance

through strong operating cash flows

Our solid top-line growth, combined with
increased gross profit per case and strong
operating expense management, led to
profitability at the high end of our expectations
for the year. Our team executed well on
our fiscal 2016 strategic initiatives. Going
forward, we remain focused on further
improving sales, productivity, and profitability
as we continue to develop opportunities to
add to our growth story both organically and
through value-added, strategic M&A.
Our customer-centric business model and
motivated sales force provide us meaningful
opportunities to continue gaining share and
growing profits in fiscal 2017.

Best regards,

George L. Holm
President and CEO
October 24, 2016

George L. Holm
President & CEO

COMPARISON OF
SHAREHOLDER STOCK RETURN
October 1, 2015 - June 30, 2016

■ Performance Food Group
■ S&P Midcap 400
■ S&P 500

40.2%

9.5%

9.1%

O N D

F M A M

ADJUSTED EBITDA
CAGR = 11.1%

$286

$271

$241

$367

$329

2012

2013

2014

2015

2016

OUR STRATEGIC FOCUS

OUR MISSION

is to be a leader in the foodservice distribution
industry by delivering world-class innovative products
and value-added services that enable our customers’
success and support enduring supplier relationships.

OUR STRATEGIES

are to expand our market share and grow sales
and profits while creating substantial value for our
shareholders by executing our core strategies:

n Grow our customer base, brands, and channels
n Expand margins through creating customer value

and by driving productivity improvements

n Pursue strategic acquisitions
n Deliver consistent financial performance through

strong operating cash flows

OUR VALUES

Put People First

n We respect and care about one another.
n We take personal responsibility for the safety
of ourselves and others.
n We foster a culture of openness and trust.

Customer Focus

n We are committed to our customers’ success.
n We deliver excellence in our products and services.

n We exceed expectations.

Do the Right Thing

n We act with honesty and integrity.
n We accept responsibility for our decisions and actions.
n We serve the communities where we live and work.

Thrive on Innovation

n We encourage ideas that will make us better.
n We inspire creativity and embrace change.
n We collaborate to find new ways to drive our
company forward.

GROWTH IN EVERY SEGMENT THROUGH
OUR COMMITMENT TO CUSTOMERS

PERFORMANCE FOODSERVICE

PERFORMANCE Foodservice continued to grow

through strong independent case growth

resulting from a focus on independent

customers and proprietary brands.

For 28 consecutive quarters, Performance
Foodservice has delivered independent case
growth within a target range of 6% to 10%
and has grown proprietary brands at least
1% to 4% faster than that, outpacing both
its competitors and the industry as a whole.
Independent cases now account for 44.1%
of Performance Foodservice’s sales, up 100
basis points over the previous year with the
largest part of that growth coming from new
customers.

Performance Foodservice’s net sales for
fiscal 2016 were $9.6 billion, representing
an increase of 5.8%. Strong case growth,
combined with gross margin expansion from
selling an improved mix of channels and
proprietary brands drove EBITDA growth of
20.8% for the year.

The unique brands and products

Performance Foodservice continues to launch
are key factors in the segment’s success. Fiscal
2016 included the launch of seven new brands:
Allegiance Premium Pork; Ascend water,
drink mixes and juices; PathProven Certified
Angus Beef; Delectables tabletop condiments;
Nature’s Best Dairy; Peak Fresh Produce; and
Sweet Encore desserts. Each of these brands
was designed to meet an existing need in the
foodservice industry and to offer distinctive
products that meet the needs of foodservice
operators and encourage customer loyalty.
Over the course of the year, the segment
continued to grow with expansions announced
for five locations. In fiscal 2017, the segment
will continue to pursue acquisitions with a
large list of prospects in order to service more
customers and increase in scale.

VISTAR

Vistar’s growth was consistent with the

company’s history of evolving its business

model to penetrate new and existing channels.

Net sales increased 11.4% in fiscal 2016 to
$2.7 billion driven by case and sales growth
in the segment’s retail, theater, vending, and

hospitality channels and by recent acquisitions.
EBITDA for Vistar increased 7.1% and was
paced by 9.1% gross profit dollar growth.
This year Vistar invested in a new
prototype distribution center for handling
pick and pack volume more efficiently.
This prototype uses scanner and sorter
technology to enhance productivity and
make the company more competitive.
Vistar also expanded its Good to Go
program, which provides its customers with an
easy way to accommodate growing consumer
trends by offering snacks and beverages made
with clean ingredients, as well as items that are
gluten-free, allergen-free or certified organic.
The segment continues to follow consumer
preferences and offer new products, such as
single-serve impulse items.

In the latter part of the fourth quarter,
Vistar began serving new geographies in
the dollar store channel, which will require
some extra short-term expense until the volume
can be efficiently integrated into Vistar’s
distribution network. With this addition and
the new distribution center, Vistar is poised
for growth in 2017.

PFG CUSTOMIZED

PFG Customized finished the fiscal year

with the addition of Red Lobster, a substantial

new customer representing $500 million

in revenue.

The addition of Red Lobster was in part a
result of PFG Customized’s unique business
model that caters to the needs of national
chains. By partnering with PFG Customized,
Red Lobster will be able to streamline
operations and leverage the segment’s
national distribution structure.
Net sales for fiscal 2016 increased 0.8%
to $3.8 billion. However, EBITDA decreased
6.6% to $34.1 million, which was driven by an
increase in operating expenses, partially offset
by an increase in gross profit. In addition, the
segment had planned exits of some customers to
free up capacity for the addition of new business
with Red Lobster. This new business is expected
to offset all losses in fiscal 2017.
Overall, the performance of PFG Customized
remains solid as a result of longstanding
customer relationships and a national network
that can quickly accommodate the unique needs
of national chains.

6% to10%

Independent
Case
Growth

PERFORMANCE Foodservice
is outpacing the industry
and its competitors.

KEY BRANDS THAT
DRIVE DIFFERENTIATION

Our strategic brands enable us to build

BRAND SPOTLIGHTS

loyalty with our customers and to differentiate

ourselves from our competitors. We currently

offer more than 35 proprietary brands

with several new and exciting strategic

brands launching in fiscal 2017 as a result

of consumer research. Each brand features

carefully sourced products to appeal to

influential customer segments.

4
4

Started by Louis G. Piancone in 1955, our Roma brand has
a longstanding tradition of providing impeccable products to
restaurant owners across the country and is widely known as
a leader in the Italian food segment. Today, Roma combines
Piancone’s legacy with Performance Food Group’s dedication
to sourcing so we can bring the most traditional and
innovative ingredients, many of which are imported directly
from Italy, to our customers’ kitchens.

This distinctive cheese is a uniquely crafted combination
of mozzarella and a signature Kiss of Buffalo Milk™
that creates unparalleled performance. Bacio is specially
formulated to achieve a consistent, velvety melt every time
with no over-browning or burning. It comes back to life
perfectly when reheated, making it an ideal choice for
pizzerias across the country.

Braveheart Black Angus Beef ® redefines premium beef, setting
a higher bar for quality, tenderness and taste. Through our
proprietary PathProven® process, we use DNA technology to
verify that our cattle are majority Black Angus and implement
industry-leading standards through the entire process from
ranch to plate. Customers can choose from a full line of beef,
spanning carefully cut steaks to mouthwatering burgers.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended July 2, 2016

 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
(State or other jurisdiction of
incorporation or organization)

12500 West Creek Parkway
Richmond, Virginia 23238
(Address of principal executive offices)

43-1983182
(IRS employer
identification no.)

(804) 484-7700
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.01 par value

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes  No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is
not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a

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

Large Accelerated Filer 

Accelerated Filer

Non-accelerated Filer  (Do not check if a smaller reporting company)

Smaller Reporting Company



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes  No 

At December 24, 2015, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market
value of common stock held by non-affiliates was $412,124,764 (based on the closing sale price of common stock on such date on the
New York Stock Exchange).

103,305,316 shares of common stock were outstanding as of August 17, 2016.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Schedule
14A relating to the Registrant’s Annual Meeting of Stockholders, to be held on December 2, 2016, are incorporated by reference in
response to Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. The definitive proxy statement will be filed
with the Securities and Exchange Commission not later than 120 days after the Registrant’s fiscal year ended July 2, 2016.

TABLE OF CONTENTS
TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ................................................................................
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ................................................................................
PART I ...........................................................................................................................................................................................
PART I ...........................................................................................................................................................................................
Business .........................................................................................................................................................
Business .........................................................................................................................................................
Risk Factors ...................................................................................................................................................
Risk Factors ...................................................................................................................................................
Unresolved Staff Comments ..........................................................................................................................
Unresolved Staff Comments ..........................................................................................................................
Properties .......................................................................................................................................................
Properties .......................................................................................................................................................
Legal Proceedings..........................................................................................................................................
Legal Proceedings..........................................................................................................................................
Mine Safety Disclosures ................................................................................................................................
Mine Safety Disclosures ................................................................................................................................
PART II ........................................................................................................................................................................................
PART II ........................................................................................................................................................................................

Item 1.
Item 1.
Item 1A.
Item 1A.
Item 1B.
Item 1B.
Item 2.
Item 2.
Item 3.
Item 3.
Item 4.
Item 4.

Item 5.
Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Item 6.
Item 6.
Item 7.
Item 7.
Item 7A.
Item 7A.
Item 8.
Item 8.
Item 9.
Item 9.
Item 9A.
Item 9A.
Item 9B.
Item 9B.

Securities...................................................................................................................................................
Securities...................................................................................................................................................
Selected Financial Data .................................................................................................................................
Selected Financial Data .................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ........................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ........................
Quantitative and Qualitative Disclosures About Market Risk .......................................................................
Quantitative and Qualitative Disclosures About Market Risk .......................................................................
Financial Statements and Supplementary Data..............................................................................................
Financial Statements and Supplementary Data..............................................................................................
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure .......................
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure .......................
Controls and Procedures ................................................................................................................................
Controls and Procedures ................................................................................................................................
Other Information ..........................................................................................................................................
Other Information ..........................................................................................................................................
PART III .......................................................................................................................................................................................
PART III .......................................................................................................................................................................................
Directors, Executive Officers and Corporate Governance.............................................................................
Directors, Executive Officers and Corporate Governance.............................................................................
Executive Compensation ...............................................................................................................................
Executive Compensation ...............................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ......
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ......
Certain Relationships and Related Transactions, and Director Independence...............................................
Certain Relationships and Related Transactions, and Director Independence...............................................
Principal Accountant Fees and Services ........................................................................................................
Principal Accountant Fees and Services ........................................................................................................
PART IV .......................................................................................................................................................................................
PART IV .......................................................................................................................................................................................
Exhibits and Financial Statement Schedules .................................................................................................
Exhibits and Financial Statement Schedules .................................................................................................
SIGNATURES ...............................................................................................................................................................................
SIGNATURES ...............................................................................................................................................................................

Item 10.
Item 10.
Item 11.
Item 11.
Item 12.
Item 12.
Item 13.
Item 13.
Item 14.
Item 14.

Item 15.
Item 15.

Page
Page

1
1
1
2
3
2
2
3
2
8
9
8
21
22
21
22
23
22
23
24
23
25
26
25
26
27
26

26
27
26
27
28
27
29
29
29
49
48
49
51
50
51
93
94
93
93
94
93
93
94
93
94
95
94
94
95
94
94
95
94
94
95
94
94
95
94
94
95
94
94
96
94
94
94
96
95
97
95

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K (this “Form 10-K”) 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-K, 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-K. Such risks, uncertainties
and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth
under Item 1A. Risk Factors in this Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the
SEC, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

•

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

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

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts, including
our Winning Together program;

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

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

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

changes in eating habits of consumers;

extreme weather conditions;

our reliance on third-party suppliers;

labor relations and cost risks and availability of qualified labor;

volatility of fuel and other transportation costs;

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

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

changes in pricing practices of our suppliers;

risks relating to any future acquisitions;

environmental, health, and safety costs;

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

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

negative media exposure and other events that damage our reputation;

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

impact of uncollectibility of accounts receivable;

difficult economic conditions affecting consumer confidence; and

departure of key members of senior management.

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. There can be no assurance that (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.

Item 1. Business

PART I

Performance Food Group Company (“we,” “our,” “us,” “the Company,” or “PFG”), through its subsidiaries, markets and

Item 1. Business
distributes approximately 150,000 food and food-related products from 71 distribution centers to over 150,000 customer locations
across the United States. We serve a diverse mix of customers, from independent and chain restaurants to schools, business and
Performance Food Group Company (“we,” “our,” “us,” “the Company,” or “PFG”), through its subsidiaries, markets and
industry locations, hospitals, vending distributors, office coffee service distributors, big box retailers, and theaters. We source our
distributes approximately 150,000 food and food-related products from 71 distribution centers to over 150,000 customer locations
products from over 5,000 suppliers and serve as an important partner to our suppliers by providing them access to our broad customer
across the United States. We serve a diverse mix of customers, from independent and chain restaurants to schools, business and
base. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit
industry locations, hospitals, vending distributors, office coffee service distributors, big box retailers, and theaters. We source our
from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and
products from over 5,000 suppliers and serve as an important partner to our suppliers by providing them access to our broad customer
operational strategy. Our more than 13,000 employees work across three reportable segments: Performance Foodservice, PFG
base. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit
Customized, and Vistar. Performance Food Group Company was incorporated under the laws of the state of Delaware on
from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and
September 23, 2002.
operational strategy. Our more than 13,000 employees work across three reportable segments: Performance Foodservice, PFG
Customized, and Vistar. Performance Food Group Company was incorporated under the laws of the state of Delaware on
September 23, 2002.
“Wellspring” are to investment funds affiliated with Wellspring Capital Management LLC.

References to “Blackstone” refer to certain investment funds affiliated with The Blackstone Group L.P. and references to

References to “Blackstone” refer to certain investment funds affiliated with The Blackstone Group L.P. and references to
Customers and Marketing

“Wellspring” are to investment funds affiliated with Wellspring Capital Management LLC.

We serve different types of customers through each of our three business segments. Our Performance Foodservice segment
Customers and Marketing
serves two types of customers—Street customers and Chain customers. Our PFG Customized segment distributes to Chain customers,
including family and casual dining, fast casual, and quick serve restaurants. Our Vistar segment distributes to vending and office
We serve different types of customers through each of our three business segments. Our Performance Foodservice segment
coffee service distributors, big box retailers, theaters, and hospitality providers, among others. We believe that customers select a
serves two types of customers—Street customers and Chain customers. Our PFG Customized segment distributes to Chain customers,
distributor based on breadth of product offerings, consistent product quality, timely and accurate delivery of orders, value-added
including family and casual dining, fast casual, and quick serve restaurants. Our Vistar segment distributes to vending and office
services, and price. In addition, we believe that some of our larger Street and Chain customers gain operational efficiencies by dealing
coffee service distributors, big box retailers, theaters, and hospitality providers, among others. We believe that customers select a
with a limited number of foodservice distributors. No single customer accounted for more than 10% of our total net sales for fiscal
distributor based on breadth of product offerings, consistent product quality, timely and accurate delivery of orders, value-added
2016, fiscal 2015 or fiscal 2014.
services, and price. In addition, we believe that some of our larger Street and Chain customers gain operational efficiencies by dealing
with a limited number of foodservice distributors. No single customer accounted for more than 10% of our total net sales for fiscal
Street Customers. Our Performance Foodservice segment serves our Street customers, which predominantly include
2016, fiscal 2015 or fiscal 2014.
independent restaurants, along with hotels, cafeterias, schools, healthcare facilities, and other institutional customers. We seek to
increase the mix of our total sales to Street customers because they typically generate higher gross profit per case that more than
Street Customers. Our Performance Foodservice segment serves our Street customers, which predominantly include
offsets the generally higher supply chain costs that we incur in serving these customers. Street customers use more value-added
independent restaurants, along with hotels, cafeterias, schools, healthcare facilities, and other institutional customers. We seek to
services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy. In
increase the mix of our total sales to Street customers because they typically generate higher gross profit per case that more than
addition, Street customers also use more of our Performance Brands, which are our highest margin products. Our Performance
offsets the generally higher supply chain costs that we incur in serving these customers. Street customers use more value-added
Foodservice segment supports sales to Street customers with a team of sales and marketing representatives, customer service
services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy. In
representatives, and product specialists. Our sales representatives serve customers in person, by telephone, and through the internet,
addition, Street customers also use more of our Performance Brands, which are our highest margin products. Our Performance
accepting and processing orders, reviewing inventory and account balances, disseminating new product information, and providing
Foodservice segment supports sales to Street customers with a team of sales and marketing representatives, customer service
business assistance and advice where appropriate. These representatives typically use laptop computers to assist customers by entering
representatives, and product specialists. Our sales representatives serve customers in person, by telephone, and through the internet,
orders, checking product availability, and pricing and developing menu-planning ideas on a real-time basis.
accepting and processing orders, reviewing inventory and account balances, disseminating new product information, and providing
business assistance and advice where appropriate. These representatives typically use laptop computers to assist customers by entering
orders, checking product availability, and pricing and developing menu-planning ideas on a real-time basis.
are multi-unit restaurants with five or more locations and include fine dining, family and casual dining, fast casual, and quick serve
restaurants, as well as hotels, healthcare facilities, and other multi-unit institutional customers. Our Performance Foodservice segment
Chain Customers. Both our Performance Foodservice and PFG Customized segments serve Chain customers. Chain customers
Chain customers include various locations of Anthony’s Coal Fired Pizza, Blaze Pizza, Chuy’s, Pollo Tropical, Shake Shack, Subway,
are multi-unit restaurants with five or more locations and include fine dining, family and casual dining, fast casual, and quick serve
and many others. Our PFG Customized segment customers include many of the most recognizable family and casual dining restaurant
restaurants, as well as hotels, healthcare facilities, and other multi-unit institutional customers. Our Performance Foodservice segment
chains including Bonefish Grill, Carrabba’s Italian Grill, Chili’s, Cracker Barrel, Joe’s Crab Shack, O’Charley’s, Outback Steakhouse,
Chain customers include various locations of Anthony’s Coal Fired Pizza, Blaze Pizza, Chuy’s, Pollo Tropical, Shake Shack, Subway,
Ruby Tuesday, and TGI Friday’s. PFG Customized recently began to leverage its distribution platform to serve fast casual chains such
and many others. Our PFG Customized segment customers include many of the most recognizable family and casual dining restaurant
as Fuzzy’s Taco Shop and PDQ, as well as quick serve chains including Church’s Chicken and Wendy’s. Sales to Chain customers are
chains including Bonefish Grill, Carrabba’s Italian Grill, Chili’s, Cracker Barrel, Joe’s Crab Shack, O’Charley’s, Outback Steakhouse,
typically lower gross margin but have larger deliveries than those to Street customers. Dedicated account representatives are
Ruby Tuesday, and TGI Friday’s. PFG Customized recently began to leverage its distribution platform to serve fast casual chains such
responsible for managing the overall Chain customer relationship, including ensuring complete order fulfillment and customer
as Fuzzy’s Taco Shop and PDQ, as well as quick serve chains including Church’s Chicken and Wendy’s. Sales to Chain customers are
satisfaction. Members of senior management assist in identifying potential new Chain customers and managing long-term account
typically lower gross margin but have larger deliveries than those to Street customers. Dedicated account representatives are
relationships.
responsible for managing the overall Chain customer relationship, including ensuring complete order fulfillment and customer
satisfaction. Members of senior management assist in identifying potential new Chain customers and managing long-term account
Vistar Customers. Our Vistar segment distributes candy, snacks, beverages, health & beauty, and other products to a number of
relationships.
distinct channels. Vending operators comprise Vistar’s largest channel. We distribute a broad selection of vending machine products
to the operators’ depots, from which they distribute products and stock machines. We are a leading distributor of these products to
Vistar Customers. Our Vistar segment distributes candy, snacks, beverages, health & beauty, and other products to a number of
distinct channels. Vending operators comprise Vistar’s largest channel. We distribute a broad selection of vending machine products
3
to the operators’ depots, from which they distribute products and stock machines. We are a leading distributor of these products to

Chain Customers. Both our Performance Foodservice and PFG Customized segments serve Chain customers. Chain customers

theater chains, and Vistar’s customers include AMC, Cinemark, Galaxy Theaters, Regal Cinemas, and others. We typically deliver our
orders directly to individual theater locations. We are a leading distributor to the office coffee service channel. Vistar also distributes
to retailers, particularly for candy, snack, and beverage purchases in impulse buying locations. Our customers include retailers such as
Dollar Tree, Home Depot, Staples, and others. Vistar distributes to other channels with a heavy concentration of candy, snacks, and
beverage products, including hospitality providers, concessionaires, college book stores, hotel and airport gift shops, corrections
facilities, and others. The distribution model also includes a “pick and pack” capability, which utilizes third-party carriers and Vistar’s
SKU variety to sell to customers whose order sizes are too small to be served effectively by our delivery network. Vistar also operates
Merchant’s Marts locations, which are cash-and-carry operators where customers generally pick up orders rather than having them
delivered.

Products and Services

We distribute more than 150,000 food and food-related products. These products include a full line of frozen foods, such as
meats, fully prepared appetizers and entrees, fruits, vegetables, and desserts; a full line of canned and dry foods; fresh meats; dairy
products; beverage products; imported specialties; fresh produce; and candy, snack, and other products. We also supply a wide variety
of non-food items including paper products such as pizza boxes, disposable napkins, plates and cups; tableware such as china and
silverware; cookware such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. We also
provide our customers with value-added services, as described below, in the normal course of providing full-service distribution
services.

Performance Brands. We offer our customers an extensive line of proprietary-branded products. We provide umbrella brands

for our broadline distribution operation. Ridgecrest provides discerning chefs with the highest levels of quality and consistency. West
Creek provides a level of quality, consistency, and value that we believe meets or exceeds national brand offerings. Silver Source
provides core products that are value priced while satisfying customers’ specifications. We also have a number of specialty brands,
such as Braveheart 100% Black Angus beef, Empire’s Treasure seafood, Brilliance premium shortenings and oils, Heritage Ovens
baked goods, Village Garden salad dressings, Guest House premium teas and cocoas, Peak Fresh Produce, Allegiance Premium Pork,
Ascend Beverages, and others. We also have an extensive line of products for use in the pizzeria and Italian restaurant business under
the names Piancone, Roma, Assoluti, and others. We believe that these products are a major source of competitive advantage. We
intend to continue to enhance our product offerings based on supplier advice, customer preferences, and data analysis using our data
warehouse. Our Performance Brands enable us to offer customers an alternative to comparable national brands across a wide range of
products and price points, which we believe also promotes customer loyalty. Our Performance Brands products are manufactured for
us according to specifications that have been developed by our quality assurance team. In addition, our quality assurance team certifies
the manufacturing and processing plants where these products are packaged, enforces our quality control standards, and identifies
supply sources that satisfy our requirements.

National Brands. We offer our customers a broad selection of national brand products. We believe that these brands are
attractive to Chain, Street, and other customers seeking recognized national brands in their operations. We believe that distributing
national brands has strengthened our relationships with many national suppliers who provide us with important sales and marketing
support. These sales complement sales of our Performance Brand products.

Customer Brands. Some of our Chain customers, particularly those with national distribution, develop exclusive SKU
specifications directly with suppliers and brand these SKUs. We purchase these SKUs directly from suppliers and receive them into
our distribution centers, where they are mixed with other SKUs and delivered to the Chain customers’ locations.

Value-Added Services. We believe that prompt and accurate delivery of orders, close contact with customers, and the ability to

provide a full array of products and services to assist customers in their foodservice operations are of primary importance in
foodservice distribution. Our operating companies offer multiple deliveries per week to certain customer locations and have the
capability of delivering special orders on short notice. Through our sales and marketing representatives and support staff, we monitor
the needs of our customers and acquaint them with new products and services. Our operating companies also provide ancillary
services relating to foodservice distribution, such as providing customers with electronic order-taking, payment, and other internet
based services, various reports and other data, menu planning advice, food safety training, and assistance in inventory control, as well
as access to various third-party services designed to add value to our customers’ businesses.

Refer to Note 19. Segment Information of Notes to Consolidated Financial Statements included in Part II, Item 8 for the sales

mix for the Company’s principal product and service categories for each of the last three fiscal years.

Suppliers

We purchase from over 5,000 suppliers, none of which accounted for more than 4% of our aggregate purchases in fiscal 2016 or
fiscal 2015. Many of our suppliers provide products to all three business segments, while others sell to only one segment. Our supplier
base consists principally of large corporations that sell their national brands, our Performance Brands, and sometimes both. We also
buy from smaller suppliers, particularly on a regional basis, and particularly those that specialize in produce and other perishable
commodities. Many of our suppliers provide sales material and sales call support for the products that we purchase.

Pricing

Our pricing to customers is either set by contract with the customer or is priced at the time of order. If the price is by contract,
then it is either based on a percentage markup over cost or a fixed markup per unit, and the unit may be expressed either in cases or
pounds of product. If the pricing is set at time of order, the pricing is agreed to between our sales associate and the customer and is
typically based on a product cost that fluctuates weekly or more frequently.

If contracts are based on a fixed markup per unit or pound, then our customers bear the risk of cost fluctuations during the

contract life. In the case of a fixed markup percentage, we typically bear the risk of cost deflation or the benefit of cost inflation. If
pricing is set at the time of order, we have the current cost of goods in our inventory and typically pass cost increases or decreases to
our customers. We generally do not lock in or otherwise hedge commodity costs or other costs of goods sold except within certain
customer contracts where the customer bears the risk of cost fluctuation. We believe that our pricing mechanisms provide us with
significant insulation from fluctuations in the cost of goods that we sell. Our inventory turns, on average, approximately every three-
and-a-half weeks, which further protects us from cost fluctuations.

We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel
prices. We reduce usage by designing more efficient truck routes and by increasing miles per gallon through on-board computers that
monitor and adjust idling time and maximum speeds and through other technologies. In our Performance Foodservice and Vistar
segments, we seek to manage fuel prices through diesel fuel surcharges to our customers and through the use of costless collars. As of
July 2, 2016, we had collars in place for approximately 17% of the gallons we expect to use over the twelve months following July 2,
2016. These fuel collars do not qualify for hedge accounting treatment for reasons discussed in our financial statement footnotes.
Therefore, these collars are recorded at fair value as either an asset or liability on the balance sheet. Any changes in fair value are
recorded in the period of the change as unrealized gains or losses on fuel hedging instruments. In our PFG Customized segment, we
have limited exposure to fuel costs since our sales contracts largely transfer fuel price volatility to our customers.

Competition

The foodservice distribution industry is highly competitive. Certain of our competitors have greater financial and other

resources than we do. Furthermore, there are two larger broadline distributors with national footprints. In addition, there are numerous
smaller regional, local, and specialty distributors. These smaller distributors often align themselves with other smaller distributors
through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings, overall purchasing
power, cost efficiencies and to assemble delivery networks for national or multi-regional distribution. We often do not have exclusive
service agreements with our customers and our customers may switch to other distributors if those distributors can offer lower prices,
differentiated products, or customer service that is perceived to be superior. We believe that most purchasing decisions in the
foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders completely and
accurately and to provide timely deliveries.

We believe we have a competitive advantage over smaller regional and local broadline distributors through economies of scale
in purchasing and procurement, which allow us to offer a broad variety of products (including our proprietary Performance Brands) at
competitive prices to our customers. Our customers benefit from our ability to provide them with extensive geographic coverage as
they continue to grow. We believe we also benefit from supply chain efficiency, including a growing inbound logistics backhaul
network that uses our collective distribution network to deliver inbound products across business segments; best practices in
warehousing, transportation, and risk management; the ability to benefit from the scale of our purchases of items not for resale, such
as trucks, construction materials, insurance, banking relationships, healthcare, and material handling equipment; and the ability to
optimize our networks so that customers are served from the most efficient distribution centers, which minimizes the cost of delivery.
We believe these efficiencies and economies of scale will provide opportunities for improvements in our operating margins when
combined with incremental fixed-cost advantage.

Historically, the food-away-from-home and foodservice distribution industries are seasonal, with lower profit in the first and

third quarters of each calendar year. Consequently, we typically experience lower operating profit during our first and third fiscal
quarters, depending on the timing of acquisitions.

Seasonality

Information Systems

We operate three principal systems that are customized versions of commercial products. These systems span operational
functions including procurement, receiving, warehouse and inventory management, and order processing. All three principal systems
feed financial systems that differ by segment. These financial systems in turn feed into a single consolidation system for financial and
managerial reporting. In addition, we continue to invest into what we believe are “best in breed” systems to optimize our business
performance. These systems include our sales force laptops and order entry systems, inbound logistics, and our “pay for performance”
systems in warehouse stock replenishment and order selection, delivery loading, routing, driver performance, and sales force
productivity.

Employees

As of July 2, 2016, we had more than 13,000 full-time employees. As of July 2, 2016, unions represented approximately 850 of
our employees. We have entered into nine collective bargaining and similar agreements with respect to our unionized employees. We
believe that we have good relations with both union and non-union employees and we strive to be well regarded in the communities in
which we operate. We have not had any material work stoppages or lockouts in the last five years. Our agreements with our union
employees expire at various times to 2025. See “Item 1A. - Risk Factors—Risks Relating to Our Business and Industry—We face
risks relating to labor relations and the availability of qualified labor.”

We have recently made investments to increase the size of our sales force and currently employ over 2,000 sales associates who

are dedicated to serving our customers. Our typical sales representative calls on customers in their place of business on a periodic
basis, usually weekly, to ascertain customer product needs, to help manage the customer’s inventory, and to discuss new products and
other business. These sales representatives are supported by customer services representatives who work in the local market and assist
customers in a variety of ways; business development managers, who help sales representatives prospect for new business; and
category managers and specialists who asset sales representatives and customers with product specific knowledge. All of our segments
have a multi-unit, or Chain, sales force who call on regional and national customers.

Insurance

We maintain high-deductible insurance programs covering portions of general and vehicle liability and workers’ compensation.

The amounts in excess of the deductibles are insured by third-party insurance carriers, subject to certain limitations and exclusions.
We also maintain self-funded group medical insurance. In addition, we maintain property, business and casualty insurance that we
believe accords with customary foodservice industry practice. We cannot predict whether this insurance will be adequate to cover all
potential hazards incidental to our business.

Regulation

Our operations are subject to regulation by state and local health departments, the USDA, and the FDA, which generally impose

standards for product quality and sanitation and are responsible for the administration of recent bioterrorism legislation affecting the
foodservice industry. These government authorities regulate, among other things, the processing, packaging, storage, distribution,
advertising, and labeling of our products. In 2010, the FDA Food Safety Modernization Act, or the “FSMA,” was enacted. The FSMA
represents a significant expansion of food safety requirements and FDA food safety authorities and, among other things, requires that
the FDA impose comprehensive, prevention-based controls across the food supply chain, further regulates food products imported into
the United States, and provides the FDA with mandatory recall authority. The FSMA requires the FDA to undertake numerous
rulemakings and to issue numerous guidance documents, as well as reports, plans, standards, notices, and other tasks. As a result,
implementation of the legislation is ongoing and likely to take several years. Our seafood operations are also specifically regulated by
federal and state laws, including those administered by the National Marine Fisheries Service, established for the preservation of
certain species of marine life, including fish and shellfish. Our processing and distribution facilities must be registered with the FDA
biennially and are subject to periodic government agency inspections. State and/or federal authorities generally inspect our facilities at
least annually. The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and
rejection of agricultural products, governs our relationships with our fresh food suppliers with respect to the grading and commercial

acceptance of product shipments. We are also subject to regulation by state authorities for the accuracy of our weighing and measuring
devices. Our suppliers are also subject to similar regulatory requirements and oversight.

The failure to comply with applicable regulatory requirements could result in, among other things, administrative, civil, or

criminal penalties or fines, mandatory or voluntary product recalls, warning or untitled letters, cease and desist orders against
operations that are not in compliance, closure of facilities or operations, the loss, revocation, or modification of any existing licenses,
permits, registrations, or approvals, or the failure to obtain additional licenses, permits, registrations, or approvals in new jurisdictions
where we intend to do business, any of which could have a material adverse effect on our business, financial condition, or results of
operations. These laws and regulations may change in the future and we may incur material costs in our efforts to comply with current
or future laws and regulations or in any required product recalls.

Our operations are subject to a variety of federal, state, and local laws and other requirements relating to the protection of the

environment and the safety and health of personnel and the public. These include requirements regarding the use, storage, and disposal
of solid and hazardous materials and petroleum products, including food processing wastes, the discharge of pollutants into the air and
water, and worker safety and health practices and procedures. In order to comply with environmental, health, and safety requirements,
we may be required to spend money to monitor, maintain, upgrade, or replace our equipment; plan for certain contingencies; acquire
or maintain environmental permits; file periodic reports with regulatory authorities; or investigate and clean up contamination. We
operate and maintain vehicle fleets, and some of our distribution centers have regulated underground and aboveground storage tanks
for diesel fuel and other petroleum products. Some jurisdictions in which we operate have laws that affect the composition and
operation of our truck fleet, such as limits on diesel emissions and engine idling. A number of our facilities have ammonia- or freon-
based refrigeration systems, which could cause injury or environmental damage if accidentally released, and many of our distribution
centers have propane or battery powered forklifts. Proposed or recently enacted legal requirements, such as those requiring the phase-
out of certain ozone-depleting substances and proposals for the regulation of greenhouse gas emissions, may require us to upgrade or
replace equipment, or may increase our transportation or other operating costs. To date, our cost of compliance with environmental,
health, and safety requirements has not been material. The discovery of contamination for which we are responsible, any accidental
release of regulated materials, the enactment of new laws and regulations, or changes in how existing requirements are enforced could
require us to incur additional costs or subject us to unexpected liabilities.

The Surface Transportation Board and the Federal Highway Administration regulate our trucking operations. In addition,
interstate motor carrier operations are subject to safety requirements prescribed in the U.S. Department of Transportation and other
relevant federal and state agencies. Such matters as weight and dimension of equipment are also subject to federal and state
regulations. We believe that we are in substantial compliance with applicable regulatory requirements relating to our motor carrier
operations. Failure to comply with the applicable motor carrier regulations could result in substantial fines or revocation of our
operating permits.

Our Segments

Performance Foodservice. Performance Foodservice is a leading U.S. foodservice distributor with substantial scale along the

Eastern Seaboard and in the Southeast. Performance Foodservice operates a network of 25 broadline distribution centers, which
supply a “broad line” of products, and 10 Roma distribution centers, which specialize in supplying independent pizzerias and other
Italian-themed restaurants. Each of these distribution centers, which we refer to as operating companies or “OpCos,” is run by a
business team who understands the local markets and the needs of its particular customers and who is empowered to make decisions
on how best to serve them. This segment serves over 85,000 customer locations with over 125,000 food and food-related products.

We offer our customers a broad product assortment that ranges from “center-of-the-plate” items (such as beef, pork, poultry, and

seafood), frozen foods, refrigerated products, and dry groceries to disposables, cleaning and kitchen supplies, and related products
used by our customers. In addition to the products we offer, we provide value-added services by enabling our customers to benefit
from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and
operational strategy.

We classify our customers under two major categories: “Street” and multi-unit “Chain.” Street customers predominantly consist

of independent restaurants. Chain customers are multi-unit restaurants with five or more locations, which include fine dining, family
and casual dining, fast casual, and quick serve restaurants, as well as hotels, healthcare facilities, and other multi-unit institutional
customers. Street customers utilize more of our value-added services, particularly in the areas of product selection and procurement,
market trends, menu development, and operational strategy. Street customer purchases typically generate greater gross profit per case
compared to sales to Chain customers.

Our products consist of our proprietary-branded products, or “Performance Brands,” as well as nationally-branded products and

products bearing our customers’ brands. Our Performance Brands typically generate higher gross profit per case than other brands.

PFG Customized. PFG Customized is a leading national distributor to the family and casual dining channel. We serve over
5,000 customer locations across the United States from nine distribution centers that provide tailored supply chain solutions to our
customers. Our network of distribution centers was developed around our customers and is strategically positioned to provide an
efficient supply chain across both inbound and outbound logistics. PFG Customized’s product offerings are determined by each of our
customers’ specific menu requirements. We also provide customers with value-added services, such as expertise in fresh product
distribution, logistics management, procurement management, and information system interfaces, which enable our customers to run
their businesses efficiently.

We serve many of the most recognizable family and casual dining restaurant chains, including Bonefish Grill, Carrabba’s Italian

Grill, Chili’s, Cracker Barrel, Joe’s Crab Shack, O’Charley’s, Outback Steakhouse, Ruby Tuesday, and TGI Friday’s, and we have
recently entered into an agreement to begin serving Red Lobster in fiscal 2017. PFG Customized’s five largest family and casual
dining customers have been with us for an average of more than 15 years. Cracker Barrel was PFG Customized’s first customer and
grew from a substantial regional account served by Performance Foodservice to an account whose needs are best served by
customized distribution. PFG Customized recently began to utilize its distribution platform to serve fast casual chains such as Fuzzy’s
Taco Shop and PDQ, as well as quick serve chains including Church’s Chicken and Wendy’s.

Vistar. Vistar is a leading national distributor of candy, snacks, and beverages to vending and office coffee service distributors,

big box retailers, theaters, and hospitality providers. The segment provides national distribution of approximately 20,000 different
SKUs of candy, snacks, beverages, and other items to approximately 60,000 customer locations from our network of 27 Vistar OpCos
and nine Merchant’s Marts locations. Merchant’s Marts are cash-and-carry operators where customers generally pick up orders rather
than having them delivered. Vistar’s scale in these channels enhances our ability to procure a broad variety of products for our
customers. Vistar OpCos deliver to vending and office coffee service distributors and directly to most theaters and some other
locations. The distribution model also includes a “pick and pack” capability, which utilizes third-party carriers and Vistar’s SKU
variety to sell to customers whose order sizes are too small to be served effectively by our delivery network. We believe these
capabilities, in conjunction with the breadth of our inventory, are differentiating and allow us to serve many distinct customer types.
Vistar has successfully built upon our national platform to broaden the channels we serve to include hospitality venues,
concessionaires, airport gift shops, college book stores, corrections facilities, and impulse locations in big box retailers such as Home
Depot, Dollar Tree, Staples, and others.

Refer to Note 19. Segment Information of Notes to Consolidated Financial Statements included in Part II, Item 8 for financial

information about our segments.

Available Information

We file annual, quarterly and special reports and other information with the SEC. Our filings with the SEC are available to the public
on the SEC’s website at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via
the “Investors” section at www.pfgc.com. The information we file with the SEC or contained on or accessible through our corporate
website or any other website that we may maintain is not incorporated by reference herein and is not part of this Annual Report on
Form 10-K.

Website and Social Media Disclosure

We use our website (www.pfgc.com) and our corporate Facebook account as channels of distribution of company information. The
information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in
addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically
receive e-mail alerts and other information about PFG when you enroll your e-mail address by visiting the “Email Alerts” section of
our website at investors.pfgc.com. The contents of our website and social media channels are not, however, a part of this Annual
Report on Form 10-K.

Item 1A. Risk Factors

Risks Relating to Our Business and Industry

Competition in our industry is intense, and we may not be able to compete successfully.

The foodservice distribution industry is highly competitive. Certain of our competitors have greater financial and other

resources than we do. Furthermore, there are two larger broadline distributors, Sysco and US Foods, with national footprints. In
addition, there are numerous regional, local, and specialty distributors. These smaller distributors often align themselves with other
smaller distributors through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings,
overall purchasing power, cost efficiencies and to assemble delivery networks for national or multi-regional distribution. We often do
not have exclusive service agreements with our customers and our customers may switch to other distributors if those distributors can
offer lower prices, differentiated products, or customer service that is perceived to be superior. We believe that most purchasing
decisions in the foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders
completely and accurately and provide timely deliveries. We cannot assure you that our current or potential competitors will not
provide products or services that are comparable or superior to those provided by us or adapt more quickly than we do to evolving
trends or changing market requirements. Accordingly, we cannot assure you that we will be able to compete effectively against current
and future competitors, and increased competition may result in price reductions, reduced gross margins, and loss of market share, any
of which could materially adversely affect our business, financial condition, or results of operations.

We operate in a low margin industry, which could increase the volatility of our results of operations.

Similar to other resale-based industries, the foodservice distribution industry is characterized by relatively low profit margins.

These low profit margins tend to increase the volatility of our reported net income since any decline in our net sales or increase in our
costs that is small relative to our total net sales or costs may have a large impact on our net income (loss).

We may not realize anticipated benefits from our cost reduction and productivity improvement efforts, including our Winning
Together program.

We have implemented a number of cost reduction and productivity improvement initiatives that we believe are necessary to
position our business for future success and growth, including our Winning Together program. Our future success and earnings growth
depend upon our ability to achieve a lower cost structure and to operate efficiently in the highly competitive foodservice distribution
industry, particularly in an environment of increased competitive activity and reduced profitability. A variety of factors could cause us
not to realize some of the expected cost savings and productivity enhancements, including, among other things, difficulties in
implementation, delays in the anticipated timing of activities related to our cost savings initiatives, lack of sustainability in cost
savings over time, and unexpected costs associated with operating our business. If we are unable to realize the anticipated benefits
from our cost cutting and productivity improvement efforts, including our Winning Together program, we could become cost
disadvantaged in the marketplace, which could adversely affect our competitiveness and our profitability. Furthermore, even if we
realize the anticipated benefits of our cost reduction and productivity improvement efforts, we may experience an adverse impact on
our employees, customers, suppliers, and purchasing partners that could adversely affect our business, financial condition, or results of
operations.

Cost inflation or deflation could affect the value of our inventory and our financial results.

We make a significant portion of our sales at prices that are based on the cost of products we sell plus a percentage markup. As a

result, volatile food costs may have a direct impact upon our profitability. Our profit levels may be negatively affected during periods
of product cost deflation, even though our gross profit percentage may remain relatively constant or even increase. Prolonged periods
of product cost inflation also may have a negative impact on our profit margins and earnings to the extent such product cost increases
are not passed on to customers because of their resistance to higher prices. Furthermore, our business model requires us to maintain an
inventory of products, and changes in price levels between the time that we acquire inventory from our suppliers and the time we sell
the inventory to our customers could lead to unexpected shifts in demand for our products or could require us to sell inventory at
lesser profit or a loss. In addition, product cost inflation may negatively affect consumer discretionary spending decisions within our
customers’ establishments, which could impact our sales. Our inability to quickly respond to inflationary and deflationary cost
pressures could have a material adverse impact on our business, financial condition, or results of operations.

Many of our customers are not obligated to continue purchasing products from us.

Many of our customers buy from us pursuant to individual purchase orders, and we often do not enter into long-term agreements

with these customers. Because such customers are not obligated to continue purchasing products from us, we cannot assure you that

the volume and/or number of our customers’ purchase orders will remain constant or increase or that we will be able to maintain our
existing customer base. Significant decreases in the volume and/or number of our customers’ purchase orders or our inability to retain
or grow our current customer base may have a material adverse effect on our business, financial condition, or results of operations.

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

Some of our customers, particularly our larger customers, purchase their products from us through group purchasing
organizations, or “GPOs,” in an effort to lower the prices paid by these customers on their foodservice orders, and we have
experienced some pricing pressure from these purchasers. These GPOs have also made efforts to include smaller, independent
restaurants. If these GPOs are able to add a significant number of our customers as members, we may be forced to lower the prices we
charge these customers in order to retain the business, which would negatively affect our business, financial condition, or results of
operations. Additionally, if we were unable or unwilling to lower the prices we charge for our products to a level that was satisfactory
to the GPOs, we may lose the business of those of our customers that are members of these organizations, which could have a material
adverse impact on our business, financial condition, or results of operations

Changes in consumer eating habits could materially and adversely affect our business, financial condition, or results of
operations.

Changes in consumer eating habits (such as a decline in consuming food away from home, a decline in portion sizes, or a shift

in preferences toward restaurants that are not our customers) could reduce demand for our products. Consumer eating habits could be
affected by a number of factors, including changes in attitudes regarding diet and health or new information regarding the health
effects of consuming certain foods. If consumer eating habits change significantly, we may be required to modify or discontinue sales
of certain items in our product portfolio, and we may experience higher costs associated with the implementation of those changes.
Changing consumer eating habits may reduce the frequency with which consumers purchase meals outside of the home. Additionally,
changes in consumer eating habits may result in the enactment of laws and regulations that affect the ingredients and nutritional
content of our food products, or laws and regulations requiring us to disclose the nutritional content of our food products. Compliance
with these laws and regulations, as well as others regarding the ingredients and nutritional content of our food products, may be costly
and time-consuming. We cannot make any assurances regarding our ability to effectively respond to changes in consumer health
perceptions or resulting new laws or regulations or to adapt our menu offerings to trends in eating habits.

Extreme weather conditions and natural disasters may interrupt our business or our customers’ businesses, which could have
a material adverse effect on our business, financial condition, or results of operations.

Many of our facilities and our customers’ facilities are located in areas that may be subject to extreme and occasionally
prolonged weather conditions, including, but not limited to, hurricanes, blizzards, and extreme heat or cold. Such extreme weather
conditions may interrupt our operations and reduce the number of consumers who visit our customers’ facilities in such areas.
Furthermore, such extreme weather conditions may interrupt or impede access to our customers’ facilities, all of which could have a
material adverse effect on our business, financial condition, or results of operations.

We rely on third-party suppliers, and our business may be affected by interruption of supplies or increases in product costs.

We obtain substantially all of our foodservice and related products from third-party suppliers. We typically do not have long-

term contracts with our suppliers. Although our purchasing volume can sometimes provide an advantage when dealing with suppliers,
suppliers may not provide the foodservice products and supplies needed by us in the quantities and at the prices requested. Our
suppliers may also be affected by higher costs to source or produce and transport food products, as well as by other related expenses
that they pass through to their customers, which could result in higher costs for the products they supply to us. Because we do not
control the actual production of most of the products we sell, we are also subject to material supply chain interruptions, delays caused
by interruption in production, and increases in product costs, including those resulting from product recalls or a need to find alternate
materials or suppliers, based on conditions outside our control. These conditions include work slowdowns, work interruptions, strikes
or other job actions by employees of suppliers, weather conditions or more prolonged climate change, crop conditions, water
shortages, transportation interruptions, unavailability of fuel or increases in fuel costs, competitive demands, contamination with mold,
bacteria or other contaminants, and natural disasters or other catastrophic events, including, but not limited to, the outbreak of e. coli
or similar food borne illnesses or bioterrorism in the United States. Our inability to obtain adequate supplies of foodservice and related
products as a result of any of the foregoing factors or otherwise could mean that we could not fulfill our obligations to our customers
and, as a result, our customers may turn to other distributors. Our inability to anticipate and react to changing food costs through our
sourcing and purchasing practices in the future could have a material adverse effect on our business, financial condition, or results of
operations.

We face risks relating to labor relations, labor costs, and the availability of qualified labor.

As of July 2, 2016, we had more than 13,000 employees of whom approximately 850 were members of local unions associated
with the International Brotherhood of Teamsters or other unions. Although our labor contract negotiations have in the past generally
taken place with the local union representatives, we may be subject to increased efforts to engage us in multi-unit bargaining that
could subject us to the risk of multi-location labor disputes or work stoppages that would place us at greater risk of being materially
adversely affected by labor disputes. In addition, labor organizing activities could result in additional employees becoming unionized,
which could result in higher labor costs. Although we have not experienced any significant labor disputes or work stoppages in recent
history, and we believe we have satisfactory relationships with our employees, including those who are union members, increased
unionization or a work stoppage because of our failure to renegotiate union contracts could have a material adverse effect on us.

Further, potential changes in labor legislation, including the Employee Free Choice Act of 2016, or “EFCA,” could result in
portions of our workforce, such as our delivery personnel, being subjected to greater organized labor influence. The EFCA could
affect the nature of labor relations in the United States and how union elections and contract negotiations are conducted. The EFCA
aims to facilitate unionization, and employers of unionized employees may face mandatory, binding arbitration of labor scheduling,
costs, and standards, which could increase the costs of doing business. EFCA or similar labor legislation could have an adverse effect
on our business, financial condition, or results of operations by imposing requirements that could potentially increase costs and reduce
our operating flexibility.

We are subject to a wide range of labor costs. Because our labor costs are, as a percentage of net sales, higher than many other
industries, we may be significantly harmed by labor cost increases. In addition, labor is a significant cost of many of our customers in
the U.S. food-away-from-home industry. Any increase in their labor costs, including any increases in costs as a result of increases in
minimum wage requirements, could reduce the profitability of our customers and reduce demand for our products.

We rely heavily on our employees, particularly drivers, and any shortage of qualified labor could significantly affect our

business. Our recruiting and retention efforts and efforts to increase productivity may not be successful and we could encounter a
shortage of qualified drivers in future periods. Any such shortage would decrease our ability to serve our customers effectively. Such a
shortage would also likely lead to higher wages for employees and a corresponding reduction in our profitability.

Further, we continue to assess our healthcare benefit costs. Despite our efforts to control costs while still providing competitive
healthcare benefits to our associates, significant increases in healthcare costs continue to occur, and we can provide no assurance that
our cost containment efforts in this area will be effective. Because of the breadth and complexity of federal healthcare legislation and
the staggered implementation of its provisions and corresponding regulations, it is difficult to predict the overall impact of healthcare
legislation on our business over the coming years. These changes may require us to change the health benefits that we offer to our
employees or may increase the cost of healthcare in general. If we are unable to raise our prices or cut other costs to cover this
expense, such increases in expenses could materially reduce our operating profit. Our distributors and suppliers also may be affected
by higher minimum wage and benefit standards, which could result in higher costs for goods and services supplied to us.

Fluctuations in fuel costs and other transportation costs could harm our business.

The high cost of fuel can negatively affect consumer confidence and discretionary spending and, as a result, reduce the
frequency and amount spent by consumers within our customers’ establishments for food away from home. The high cost of fuel and
other transportation related costs, such as tolls, fuel taxes, and license and registration fees, can also increase the price we pay for
products as well as the costs incurred by us to deliver products to our customers. Furthermore, both the price and supply of fuel are
unpredictable and fluctuate based on events outside our control, including geopolitical developments, supply and demand for oil and
gas, actions by the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing
countries and regions, regional production patterns, and environmental concerns. These factors in turn could have a material adverse
effect on our sales, margins, operating expenses, or results of operations.

From time to time, we may enter into arrangements to manage our exposure to fuel costs. Such arrangements, however, may not
be effective and may result in us paying higher than market costs for a portion of our fuel. In addition, while we have been successful
in the past in implementing fuel surcharges to offset fuel cost increases, we may not be able to do so in the future.

In addition, compliance with current and future environmental laws and regulations relating to carbon emissions and the effects
of global warming can be expected to have a significant impact on our transportation costs and could have a material adverse effect on
our business, financial condition, or results of operations.

If one or more of our competitors implements a lower cost structure, they may be able to offer lower prices to customers and
we may be unable to adjust our cost structure in order to compete profitably.

Over the last several decades, the retail food industry has undergone significant change as companies such as Wal-Mart and

Costco have developed a lower cost structure to provide their customer base with an everyday low-cost product offering. As a large-
scale foodservice distributor, we have similar strategies to remain competitive in the marketplace by reducing our cost structure.
However, if one or more of our competitors in the foodservice distribution industry adopted an everyday low price strategy, we would
potentially be pressured to lower prices to our customers and would need to achieve additional cost savings to offset these reductions.
We may be unable to change our cost structure and pricing practices rapidly enough to successfully compete in such an environment.

If we fail to increase our sales in the highest margin portions of our business, our profitability may suffer.

Foodservice distribution is a relatively low margin industry. The most profitable customers within the foodservice distribution

industry are generally Street customers. In addition, our most profitable products are our Performance Brands. We typically provide a
higher level of services to our Street customers and are able to earn a higher operating margin on sales to Street customers. Street
customers are also more likely to purchase our Performance Brands. Our ability to continue to penetrate this key customer type is
critical to achieving increased operating profits. Changes in the buying practices of Street customers or decreases in our sales to Street
customers or a decrease in the sales of our Performance Brands could have a material adverse effect on our business, financial
condition, or results of operations.

Changes in pricing practices of our suppliers could negatively affect our profitability.

Foodservice distributors have traditionally generated a significant percentage of their gross margins from promotional
allowances paid by their suppliers. Promotional allowances are payments from suppliers based upon the efficiencies that the
distributor provides to its suppliers through purchasing scale and through marketing and merchandising expertise. Promotional
allowances are a standard practice among suppliers to foodservice distributors and represent a significant source of profitability for us
and our competitors. Any change in such practices that results in the reduction or elimination of promotional allowances could be
disruptive to us and the industry as a whole and could have a material adverse effect on our business, financial condition, or results of
operations.

Our growth strategy may not achieve the anticipated results.

Our future success will depend on our ability to grow our business, including through increasing our Street sales, expanding our

Performance Brands, making strategic acquisitions, and achieving improved operating efficiencies as we continue to expand and
diversify our customer base. Our growth and innovation strategies require significant commitments of management resources and
capital investments and may not grow our net sales at the rate we expect or at all. As a result, we may not be able to recover the costs
incurred in developing our new projects and initiatives or to realize their intended or projected benefits, which could have a material
adverse effect on our business, financial condition, or results of operations.

We may not be able to realize benefits of acquisitions or successfully integrate the businesses we acquire.

From time to time, we acquire businesses that broaden our customer base, and/or increase our capabilities and geographic reach.

If we are unable to integrate acquired businesses successfully or to realize anticipated economic, operational, and other benefits and
synergies in a timely manner, our profitability could be adversely affected. Integration of an acquired business may be more difficult
when we acquire a business in a market in which we have limited expertise or with a company culture different from ours. A
significant expansion of our business and operations, in terms of geography or magnitude, could strain our administrative and
operational resources. Additionally, we may be unable to retain qualified management and other key personnel employed by acquired
companies and may fail to build a network of acquired companies in new markets. We could face significantly greater competition
from broadline foodservice distributors in these markets than we face in our existing markets.

We also regularly evaluate opportunities to acquire other companies. To the extent our future growth includes acquisitions, we

cannot assure you that we will be able to obtain any necessary financing for such acquisitions, consummate such potential acquisitions
effectively, effectively and efficiently integrate any acquired entities, or successfully expand into new markets.

Our business is subject to significant governmental regulation, and costs or claims related to these requirements could
adversely affect our business.

Our operations are subject to regulation by state and local health departments, the U.S. Department of Agriculture, and the Food
and Drug Administration, or the “FDA,” which generally impose standards for product quality and sanitation and are responsible for

the administration of recent bioterrorism legislation affecting the foodservice industry. These government authorities regulate, among
other things, the processing, packaging, storage, distribution, advertising, and labeling of our products. In 2010, the FDA Food Safety
Modernization Act, or the “FSMA,” was enacted. The FSMA represents a significant expansion of food safety requirements and FDA
food safety authorities and, among other things, requires that the FDA impose comprehensive, prevention-based controls across the
food supply, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority.
Our seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine
Fisheries Service, established for the preservation of certain species of marine life, including fish and shellfish. Our processing and
distribution facilities must be registered with the FDA biennially and are subject to periodic government agency inspections. State
and/or federal authorities generally inspect our facilities at least annually. The Federal Perishable Agricultural Commodities Act,
which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs our relationships with our
fresh food suppliers with respect to the grading and commercial acceptance of product shipments. We are also subject to regulation by
state authorities for the accuracy of our weighing and measuring devices. Additionally, the Surface Transportation Board and the
Federal Highway Administration regulate our trucking operations, and interstate motor carrier operations are subject to safety
requirements prescribed by the U.S. Department of Transportation and other relevant federal and state agencies. Our suppliers are also
subject to similar regulatory requirements and oversight. The failure to comply with applicable regulatory requirements could result
in, among other things, administrative, civil, or criminal penalties or fines; mandatory or voluntary product recalls; warning or untitled
letters; cease and desist orders against operations that are not in compliance; closure of facilities or operations; the loss, revocation, or
modification of any existing licenses, permits, registrations, or approvals; or the failure to obtain additional licenses, permits,
registrations, or approvals in new jurisdictions where we intend to do business, any of which could have a material adverse effect on
our business, financial condition, or results of operations. These laws and regulations may change in the future and we may incur
material costs in our efforts to comply with current or future laws and regulations or in any required product recalls.

In addition, our operations are subject to various federal, state, and local laws and regulations relating to the protection of the

environment, including those governing the discharge of pollutants into the air, soil, and water; the management and disposal of solid
and hazardous materials and wastes; employee exposure to hazards in the workplace; and the investigation and remediation of
contamination resulting from releases of petroleum products and other regulated materials. In the course of our operations, we operate,
maintain, and fuel fleet vehicles; store fuel in on-site above and underground storage tanks; operate refrigeration systems, and use and
dispose of hazardous substances and food wastes. We could incur substantial costs, including fines or penalties and third-party claims
for property damage or personal injury, as a result of any violations of environmental or workplace safety laws and regulations or
releases of regulated materials into the environment. In addition, we could incur investigation, remediation, or other costs related to
environmental conditions at our currently or formerly owned or operated properties. Additionally, concern over climate change,
including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit
greenhouse gas emissions. Increased regulation regarding greenhouse gas emissions, especially diesel engine emissions, could impose
substantial costs upon us. These costs include an increase in the cost of the fuel and other energy we purchase and capital costs
associated with updating or replacing our vehicles prematurely.

If the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may
need to recall our products and may experience product liability claims.

The products we distribute may be subject to product recalls, including voluntary recalls or withdrawals, if they are alleged to

cause injury or illness or if they are alleged to have been mislabeled, misbranded, or adulterated or to otherwise be in violation of
governmental regulations. We may also voluntarily recall or withdraw products that we consider not to meet our quality standards,
whether for taste, appearance, or otherwise, in order to protect our brand and reputation. If there is any future product withdrawal that
could result in substantial and unexpected expenditures, destruction of product inventory, damage to our reputation, and lost sales
because of the unavailability of the product for a period of time, our business, financial condition, or results of operations may be
materially adversely affected.

We also may be subject to product liability claims if the consumption or use of our products is alleged to cause injury or illness.
While we carry product liability insurance, our insurance may not be adequate to cover all liabilities we may incur in connection with
product liability claims. For example, punitive damages may not be covered by insurance. In addition, we may not be able to continue
to maintain our existing insurance, to obtain comparable insurance at a reasonable cost, if at all, or to secure additional coverage,
which may result in future product liability claims being uninsured. If there is a product liability judgment against us or a settlement
agreement related to a product liability claim, our business, financial condition, or results of operations may be materially adversely
affected.

We rely heavily on technology in our business and any technology disruption or delay in implementing new technology could
adversely affect our business.

The foodservice distribution industry is transaction intensive. Our ability to control costs and to maximize profits, as well as to

serve customers effectively, depends on the reliability of our information technology systems and related data entry processes. We rely
on software and other technology systems, some of which are managed by third-party service providers, to manage significant aspects
of our business, including making purchases, processing orders, managing our warehouses, loading trucks in the most efficient
manner, and optimizing the use of storage space. The failure of our information technology systems to perform as we anticipate could
disrupt our business and could result in transaction errors, processing inefficiencies, and the loss of sales and customers, causing our
business and results of operations to suffer. In addition, our information technology systems may be vulnerable to damage or
interruption from circumstances beyond our control, including fire, natural disasters, power outages, systems failures, security
breaches, cyber attacks, and viruses. While we have invested and continue to invest in technology security initiatives and disaster
recovery plans, these measures cannot fully insulate us from technology disruption that could result in adverse effects on our
operations and profits.

Information technology systems evolve rapidly and in order to compete effectively we are required to integrate new

technologies in a timely and cost effective manner. If competitors implement new technologies before we do, allowing such
competitors to provide lower priced or enhanced services of superior quality compared to those we provide, this could have an adverse
effect on our operations and profits.

A cyber-security incident or other technology disruptions could negatively affect our business and our relationships with
customers.

We rely upon information technology networks and systems to process, transmit, and store electronic information, and to

manage or support virtually all of our business processes and activities. We also use mobile devices, social networking, and other
online activities to connect with our employees, suppliers, business partners, and customers. These uses give rise to cybersecurity
risks, including security breach, espionage, system disruption, theft, and inadvertent release of information. Our business involves the
storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including
customers’ and suppliers’ personal information, private information about employees, and financial and strategic information about us
and our business partners. Additionally, while we have implemented measures to prevent security breaches and other cyber incidents,
our preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation,
release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems or
the technology systems of third parties on which we rely could result in business disruption, negative publicity, brand damage,
violation of privacy laws, loss of customers, potential liability, and competitive disadvantage.

We may be subject to or affected by product liability claims relating to products we distribute.

We, like any other seller of food, may be exposed to product liability claims in the event that the use of products we sell causes
injury or illness. While we believe we have sufficient primary and excess umbrella liability insurance with respect to product liability
claims we cannot assure you that our limits are sufficient to cover all our liabilities or that we will be able to obtain replacement
insurance on comparable terms, and any replacement insurance or our current insurance may not continue to be available at a
reasonable cost, or, if available, may not be adequate to cover all of our liabilities. We generally seek contractual indemnification and
insurance coverage from parties supplying products to us, but this indemnification or insurance coverage is limited, as a practical
matter, to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by suppliers. If we do not
have adequate insurance or contractual indemnification available, product liability relating to defective products could adversely affect
our profitability.

Adverse judgments or settlements resulting from legal proceedings in which we may be involved in the normal course of our
business could reduce our profits or limit our ability to operate our business.

In the normal course of our business, we are involved in various legal proceedings. The outcome of these proceedings cannot be
predicted. If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of
money were to occur, it could materially and adversely affect our profits or ability to operate our business. Additionally, we could
become the subject of future claims by third parties, including our employees; suppliers, customers, and other counterparties; our
investors; or regulators. Any significant adverse judgments or settlements would reduce our profits and could limit our ability to
operate our business. Further, we may incur costs related to claims for which we have appropriate third-party indemnity, but such third
parties fail to fulfill their contractual obligations.

Adverse publicity about us, lack of confidence in our products or services, and other risks could negatively affect our
reputation and affect our business.

Maintaining a good reputation and public confidence in the safety of the products we distribute or services we provide is critical

to our business, particularly to selling our Performance Brands products. Anything that damages our reputation, or the public’s
confidence in our products, services, facilities, delivery fleet, operations, or employees, whether or not justified, including adverse
publicity about the quality, safety, or integrity of our products, could quickly affect our net sales and profits. Reports, whether true or
not, of food-borne illnesses or harmful bacteria (such as e. coli, bovine spongiform encephalopathy, hepatitis A, trichinosis, listeria, or
salmonella) and injuries caused by food tampering could also severely injure our reputation or negatively affect the public’s
confidence in our products. We may need to recall our products if they become adulterated. If patrons of our restaurant customers
become ill from food-borne illnesses, our customers could be forced to temporarily close restaurant locations and our sales would be
correspondingly decreased. In addition, instances of food-borne illnesses, food tampering, or other health concerns, such as flu
epidemics or other pandemics, even those unrelated to the use of our products, or public concern regarding the safety of our products,
can result in negative publicity about the foodservice distribution industry and cause our sales to decrease dramatically. In addition, a
widespread health epidemic or food-borne illness, whether or not related to the use of our products, as well as terrorist events may
cause consumers to avoid public gathering places, like restaurants, or otherwise change their eating behaviors. Health concerns and
negative publicity may harm our results of operations and damage the reputation of, or result in a lack of acceptance of, our products
or the brands that we carry or the services that we provide.

Our participation in a “multiemployer” pension plan could give rise to significant expenses and liabilities in the future.

We participate in a “multiemployer” pension plan administered by a labor union representing some of our employees. We make
periodic contributions to the plan to allow the plan to meet its pension benefit obligations to its participants. In the ordinary course of
our renegotiation of collective bargaining agreements with the labor union that maintains the plan, we could decide to discontinue
participation in the plan, and in that event we could face withdrawal liability. We could be treated as withdrawing from participation
in the plan if the number of our employees participating in the plan is reduced to a certain degree over certain periods of time. Such
reductions in the number of our employees participating in the plan could occur as a result of changes in our business operations, such
as facility closures or consolidations. In the event that we withdraw from participation in the plan, applicable law could require us to
make withdrawal liability contributions to the plan, and we would have to reflect that on our balance sheet. Our withdrawal liability
for the multiemployer plan would depend on the extent of the plan’s funding of vested benefits. If the multiemployer pension plan in
which we participate has significant underfunded liabilities, such underfunding will increase the size of our potential withdrawal
liability.

Our earnings will be reduced by amortization charges associated with any future acquisitions.

After we complete an acquisition, we must amortize any identifiable intangible assets associated with the acquired company

over future periods. We also must amortize any identifiable intangible assets that we acquire directly. Our amortization of these
amounts reduce our future earnings in the affected periods.

We have experienced losses because of the inability to collect accounts receivable in the past and could experience increases in
such losses in the future if our customers are unable to pay their debts to us when due.

Certain of our customers have from time to time experienced bankruptcy, insolvency, and/or an inability to pay their debts to us

as they come due. If our customers suffer significant financial difficulty, they may be unable to pay their debts to us timely or at all,
which could have a material adverse effect on our results of operations. It is possible that customers may contest their contractual
obligations to us under bankruptcy laws or otherwise. Significant customer bankruptcies could further adversely affect our net sales
and increase our operating expenses by requiring larger provisions for bad debt expense. In addition, even when our contracts with
these customers are not contested, if customers are unable to meet their obligations on a timely basis, it could adversely affect our
ability to collect receivables. Further, we may have to negotiate significant discounts and/or extended financing terms with these
customers in such a situation. If we are unable to collect upon our accounts receivable as they come due in an efficient and timely
manner, our business, financial condition, or results of operations may be materially adversely affected.

Periods of difficult economic conditions and heightened uncertainty in the financial markets affect consumer confidence,
which can adversely affect our business.

The foodservice industry is sensitive to national and regional economic conditions. From 2008 through the beginning of 2010,
deteriorating economic conditions and heightened uncertainty in the financial markets negatively affected consumer confidence and
discretionary spending. This led to reductions in the frequency of dining out and the amount spent by consumers for food-away-from-
home purchases. These conditions, in turn, negatively affected our results during these periods. The development of similar economic

conditions in the future or permanent changes in consumer dining habits as a result of such conditions would likely negatively affect
our operating results.

We are highly dependent upon senior management. Our failure to attract and retain key members of senior management
could have a material adverse effect on us.

We are highly dependent on the performance and continued efforts of our senior management team. Our future success depends

on our ability to continue to attract and retain qualified executive officers and senior management. Any inability to manage our
operations effectively could have a material adverse effect on our business, financial condition, or results of operations. Although we
have an employment agreement with our Chief Executive Officer, we cannot prevent him from terminating employment with us. Most
of our other executives are not bound by employment agreements with us. Losing the services of any of these individuals could
adversely affect our business, financial condition, and results of operations, and it may be difficult to replace them quickly with
executives of equal experience and capabilities.

Federal, state, and local tax rules may adversely impact our business, financial condition, or results of operations.

We are subject to federal, state, and local taxes in the United States. Although we believe that our tax estimates are reasonable,

if the Internal Revenue Service (“IRS”) or any other taxing authority disagrees with the positions we have taken on our tax returns, we
could face additional tax liability, including interest and penalties. If material, payment of such additional amounts upon final
adjudication of any disputes could have a material impact upon our business, financial condition, or results of operations. In addition,
complying with new tax rules, laws, or regulations could affect our business, financial condition, or results of operations, and
increases to federal or state statutory tax rates and other changes in tax laws, rules, or regulations may increase our effective tax rate.
Any increase in our effective tax rate could have a material impact on our business, financial condition, or results of operations.

Insurance and claims expenses could significantly reduce our profitability.

Our future insurance and claims expenses might exceed historic levels, which could reduce our profitability. We maintain high-
deductible insurance programs covering portions of general and vehicle liability and workers’ compensation. The amount in excess of
the deductibles is insured by third-party insurance carriers, subject to certain limitations and exclusions. We also maintain self-funded
group medical insurance.

We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our

experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts.

Although we believe our aggregate insurance limits should be sufficient to cover reasonably expected claims costs, it is possible
that the amount of one or more claims could exceed our aggregate coverage limits. Insurance carriers have raised premiums for many
businesses in our industry, including ours. As a result, our insurance and claims expense could increase. Our results of operations and
financial condition could be materially and adversely affected if (1) total claims costs significantly exceed our coverage limits, (2) we
experience a claim in excess of our coverage limits, (3) our insurance carriers fail to pay on our insurance claims, (4) we experience a
claim for which coverage is not provided or (5) a large number of claims may cause our cost under our deductibles to differ from
historic averages.

Risks Relating to Our Indebtedness

Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to
react to changes in the economy or in our industry, expose us to interest rate risk to the extent of our variable rate debt, and
prevent us from meeting our obligations under our indebtedness.

We are highly leveraged. As of July 2, 2016, we had $1,145.5 million of indebtedness. In addition, we had $725.5 million of
availability under our ABL Facility after giving effect to $97.7 million of outstanding letters of credit and $20.9 million of lenders’
reserves.

Our high degree of leverage could have important consequences for us, including:

•

requiring us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness,
reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, and other
general corporate purposes;

•

increasing our vulnerability to adverse economic, industry, or competitive developments;

• exposing us to the risk of increased interest rates to the extent our borrowings are at variable rates of interest;

• making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the
obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event
of default under the agreements governing our indebtedness;

•

restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service
requirements, acquisitions, and general corporate or other purposes; and

limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a
competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take
advantage of opportunities that our leverage prevents us from exploiting.

A substantial portion of our indebtedness is floating rate debt. If interest rates increase, our debt service obligations on such

indebtedness will increase even though the amount borrowed remained the same, and our net income and cash flows, including cash
available for servicing our indebtedness, will correspondingly decrease. We may elect to enter into interest rate swaps to reduce our
exposure to floating interest rates as described under “—We may utilize derivative financial instruments to reduce our exposure to
market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty
creditworthiness or non-performance of these instruments.” However, we may not maintain interest rate swaps with respect to all of
our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

Servicing our indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on many
factors, some of which are not within our control.

Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our ability to
generate cash in the future. To a certain extent, this is subject to general economic, financial, competitive, legislative, regulatory, and
other factors that are beyond our control. If we are unable to generate sufficient cash flow to service our debt and to meet our other
commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations, or raise additional
debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms, or at all,
and these actions may not be sufficient to meet our capital requirements. In addition, any refinancing of our indebtedness could be at a
higher interest rate, and the terms of our existing or future debt arrangements may restrict us from effecting any of these alternatives.
Our failure to make the required interest and principal payments on our indebtedness would result in an event of default under the
agreement governing such indebtedness, which may result in the acceleration of some or all of our outstanding indebtedness.

Despite our high indebtedness level, we and our subsidiaries will still be able to incur significant additional amounts of debt,
which could further exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the agreements
governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number
of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness that could be incurred in
compliance with these restrictions could be substantial.

The agreements governing our outstanding indebtedness contain restrictions that limit our flexibility in operating our
business.

The agreements governing our outstanding indebtedness contain various covenants that limit our ability to engage in specified

types of transactions. These covenants limit the ability of our subsidiaries to, among other things:

•

incur, assume, or permit to exist additional indebtedness or guarantees;

incur liens;

• make investments and loans;

• pay dividends, make payments, or redeem or repurchase capital stock;

• engage in mergers, liquidations, dissolutions, asset sales, and other dispositions (including sale leaseback transactions);

• amend or otherwise alter terms of certain indebtedness;

• enter into agreements limiting subsidiary distributions or containing negative pledge clauses;

• engage in certain transactions with affiliates;

• alter the business that we conduct;

• change our fiscal year; or

• engage in any activities other than permitted activities.

As a result of these restrictions, we are limited as to how we conduct our business and we may be unable to raise additional debt

or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness
we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these
covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

A breach of any of these covenants could result in a default under one or more of these agreements, including as a result of cross

default provisions, and, in the case of our ABL Facility, permit the lenders to cease making loans to us.

We may utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our
variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of
these instruments.

We may enter into pay-fixed interest rate swaps to limit our exposure to changes in variable interest rates. Such instruments may

result in economic losses should interest rates decline to a point lower than our fixed rate commitments. We will be exposed to credit-
related losses, which could affect the results of operations in the event of fluctuations in the fair value of the interest rate swaps due to
a change in the credit worthiness or non-performance by the counterparties to the interest rate swaps.

Risks Related to Ownership of Our Common Stock

Our stock price may change significantly, and you may not be able to resell shares of our common stock at or above the price
you paid or at all, and you could lose all or part of your investment as a result.

The trading price of our common stock is likely to continue to be volatile. The stock market routinely experiences periods of

large or extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular
companies. You may not be able to resell your shares at or above the price you paid due to a number of factors such as those listed in
“—Risks Related to Our Business and Industry” and the following:

•

results of operations that vary from the expectations of securities analysts and investors;

results of operations that vary from those of our competitors;

• changes in expectations as to our future financial performance, including financial estimates and investment

recommendations by securities analysts and investors;

• declines in the market prices of stocks generally, particularly those of foodservice distribution companies;

•

strategic actions by us or our competitors;

• announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships,

joint ventures, other strategic relationships, or capital commitments;

• changes in general economic or market conditions or trends in our industry or markets;

• changes in business or regulatory conditions;

•

future sales of our common stock or other securities;

investor perceptions or the investment opportunity associated with our common stock relative to other investment
alternatives;

the public’s response to press releases or other public announcements by us or third parties, including our filings with the
Securities and Exchange Commission (the “SEC”);

• announcements relating to litigation;

• guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance;

•

the development and sustainability of an active trading market for our stock;

• changes in accounting principles;

• occurrences of extreme or inclement weather; and

• other events or factors, including those resulting from natural disasters, war, acts of terrorism, or responses to these events.

These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our

actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock
is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were
involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from
our business regardless of the outcome of such litigation.

Because we have no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive
any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We intend to retain future earnings, if any, for future operations, expansion, and debt repayment and have no current plans to
pay any cash dividends for the foreseeable future. The declaration, amount, and payment of any future dividends on shares of common
stock will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account general and economic
conditions, our financial condition, and results of operations, our available cash and current and anticipated cash needs, capital
requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by us to our stockholders or
by our subsidiaries to us, and such other factors as our Board of Directors may deem relevant. In addition, our ability to pay dividends
is limited by covenants of our existing and outstanding indebtedness and may be limited by covenants of any future indebtedness we
or our subsidiaries incur. As a result, you may not receive any return on an investment in our common stock unless you sell our
common stock for a price greater than that which you paid for it.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our
stock price and trading volume could decline.

The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish

about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrades
our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the
price of our stock could decline. If one or more of these analysts ceases coverage of the Company or fails to publish reports on us
regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market
price for our common stock to decline.

The sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the

prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it
more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

As of August 17, 2016, we had a total of 103,305,316 shares of common stock outstanding, which includes 3,409,396 shares of

restricted stock.

Shares held by Blackstone, Wellspring, and our directors, officers, employees, and other stockholders are eligible for resale,

subject in certain cases to volume, manner of sale, and other limitations under Rule 144. In addition, pursuant to a registration rights
agreement, Blackstone, Wellspring, and certain other stockholders have the right, subject to certain conditions, to require us to register
the sale of their shares of our common stock under the Securities Act. By exercising their registration rights and selling a large number
of shares, our existing owners could cause the prevailing market price of our common stock to decline. Shares covered by registration
rights represent approximately 62.1% of our outstanding common stock. Registration of any of these outstanding shares of common
stock would result in such shares becoming freely tradable upon effectiveness of the registration statement.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of our shares of common

stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These
factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or
other securities.

A total of 4,054,459 shares are issuable upon the exercise of options, 288,186 shares are issuable pursuant to restricted stock

units, 451,304 shares are reserved for future issuance under the 2007 Stock Option Plan, and 2,842,442 shares are reserved for future
issuance under the 2015 Omnibus Incentive Plan. These shares will become eligible for sale in the public market once those shares are
issued, subject to various vesting agreements, lock-up agreements, and Rule 144, as applicable.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our
common stock issued in connection with an investment or acquisition could constitute a material portion of our then outstanding
shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in
additional dilution to you.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-

takeover effect and may delay, defer, or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control
transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the
market price for the shares held by our stockholders.

These provisions provide for, among other things:

• a classified Board of Directors with staggered three-year terms;

•

the ability of our Board of Directors to issue one or more series of preferred stock;

• advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our

annual meetings;

• certain limitations on convening special stockholder meetings;

•

the removal of directors only for cause and only upon the affirmative vote of holders of at least 66 2/ 3% of the shares of
common stock entitled to vote generally in the election of directors if Blackstone and its affiliates hold less than 30% of our
outstanding shares of common stock; and

that certain provisions may be amended only by the affirmative vote of at least 66 2/ 3% of the shares of common stock
entitled to vote generally in the election of directors if Blackstone and its affiliates hold less than 30% of our outstanding
shares of common stock.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third-party’s offer may be

considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium
for their shares.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole
and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit
our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or
stockholders.

Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the

State of Delaware is the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our Company,
(ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of our Company to the Company
or the Company’s stockholders, (iii) action asserting a claim against the Company or any director, officer or stockholder of the
Company arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our amended and
restated bylaws, or (iv) action asserting a claim against the Company or any director, officer or stockholder of the Company governed
by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall
be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described
above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors,
officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation
inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional
costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Affiliates of Blackstone and Wellspring will continue to be able to significantly influence our decisions and their interests may
conflict with ours or yours in the future.

As of July 2, 2016, affiliates of Blackstone and Wellspring beneficially own approximately 45.4% and 15.8% of our common
stock, respectively. As a result, investment funds associated with or designated by affiliates of Blackstone and Wellspring have the
ability to elect members of our Board of Directors and thereby to continue to influence our policies and operations, including the
appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our
common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and
amended and restated bylaws, and the entering into of extraordinary transactions, and their interests may not in all cases be aligned
with your interests. In addition, Blackstone and Wellspring may have an interest in pursuing acquisitions, divestitures, and other
transactions that, in their respective judgment, could enhance their investment, even though such transactions might involve risks to
you. For example, Blackstone and Wellspring may have an interest in our making acquisitions that increase our indebtedness or
selling revenue-generating assets. Additionally, in certain circumstances, acquisitions of debt at a discount by purchasers that are
related to a debtor can give rise to cancellation of indebtedness income to such debtor for U.S. federal income tax purposes.

Blackstone and Wellspring are in the business of making investments in companies and may from time to time acquire and hold

interests in businesses that compete directly or indirectly with us.

Our amended and restated certificate of incorporation provides that none of Blackstone, Wellspring, any of their affiliates, or
any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director
and officer capacities) or his or her affiliates has any duty to refrain from engaging, directly or indirectly, in the same business
activities or similar business activities or lines of business in which we operate. Blackstone and Wellspring also may pursue
acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be
available to us. So long as either of Blackstone or Wellspring continue to own a significant amount of our combined voting power,
even if such amount is less than 50%, such stockholder will continue to be able to strongly influence or effectively control our
decisions and, so long as such stockholder and its affiliates collectively own at least 5% of all outstanding shares of our stock entitled
to vote generally in the election of directors, such stockholder will be able to appoint individuals to our Board of Directors under our
stockholders agreement. In addition, Blackstone and Wellspring are able to influence the outcome of all matters requiring stockholder
approval and could cause or prevent a change of control of the Company or a change in the composition of our Board of Directors and
could preclude any unsolicited acquisition of the Company. The concentration of ownership could deprive you of an opportunity to
receive a premium for your shares of common stock as part of a sale of the Company and ultimately might affect the market price of
our common stock.

We are no longer a “controlled company” within the meaning of the NYSE rules and the rules of the SEC. However, we may
continue to rely on exemptions from certain corporate governance requirements that would otherwise provide protection to
stockholders of other companies during a one-year transition period.

Blackstone no longer owns a majority of our outstanding common stock. As a result, we are no longer a “controlled company”

within the meaning of the corporate governance standards contained in Section 303A of the NYSE Listed Company Manual.
Consequently, the NYSE rules will require that we (i) appoint a majority of independent directors to our Board of Directors within one
year of the date we no longer qualify as a “controlled company” and (ii) appoint at least one independent director to each of the
compensation and nominating and governance committees on the date we no longer qualify as a “controlled company,” at least a
majority of independent directors within 90 days of such date and that the compensation and nominating and governance committees
be composed entirely of independent directors within one year of such date. During these transition periods, we may continue to
utilize the available exemptions from certain corporate governance requirements as permitted by the NYSE rules. Accordingly, during
the transition periods you will not have the same protections afforded to stockholders of companies that are subject to all of the
corporate governance requirements of the NYSE.

In addition, although we are no longer a “controlled company,” Blackstone and Wellspring will continue to be able to

significantly influence our decisions. See “—Affiliates of Blackstone and Wellspring will continue to be able to significantly influence
our decisions and their interests may conflict with ours or yours in the future.”

In addition, on June 20, 2012, the SEC passed final rules implementing provisions of the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 pertaining to compensation committee independence and the role and disclosure of compensation
consultants and other advisers to the compensation committee. The SEC’s rules direct each of the national securities exchanges
(including the NYSE on which we list our common stock) to develop listing standards requiring, among other things, that:

• compensation committees be composed of fully independent directors, as determined pursuant to new independence

requirements;

• compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel, and

other committee advisors; and

• compensation committees be required to consider, when engaging compensation consultants, legal counsel, or other advisors,
certain independence factors, including factors that examine the relationship between the consultant or advisor’s employer
and us.

We will not be fully subject to these compensation committee independence requirements until the end of the one-year transition

period after we cease to be a “controlled company.”

We may be unsuccessful in implementing required internal controls over financial reporting.

We are not currently required to comply with the SEC’s rules implementing Section 404 of the Sarbanes-Oxley Act of 2002 and

are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that
purpose. Our management is required to report on, and, beginning with our Annual Report on Form 10-K for our fiscal year ending
July 1, 2017 our independent registered public accounting firm will be required to attest to, the effectiveness of our internal controls
over financial reporting. If we are unable to remedy past deficiencies, or if we identify additional deficiencies in the future, we may be
unable to conclude that our internal controls over financial reporting are effective.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

As of July 2, 2016, we operated 71 distribution centers across our three business segments. Of our 71 facilities, we owned 29
facilities and leased the remaining 42 facilities. Our Performance Foodservice segment operated 35 distribution centers and had an
average square footage of approximately 200,000 square feet per facility. Our PFG Customized segment operated nine distribution
centers and had an average square footage of over 200,000 square feet per facility. Our Vistar segment operated 27 distribution centers
and had an average square footage of approximately 120,000 square feet per facility.

Performance Foodservice

State

Arizona ...............................................................................................
Arkansas .............................................................................................
California ............................................................................................
Colorado .............................................................................................
Connecticut .........................................................................................
Florida.................................................................................................
Georgia ...............................................................................................
Illinois .................................................................................................
Indiana ................................................................................................
Kentucky.............................................................................................
Louisiana.............................................................................................
Maine ..................................................................................................
Maryland.............................................................................................
Massachusetts .....................................................................................
Michigan .............................................................................................
Minnesota ...........................................................................................
Mississippi ..........................................................................................
Missouri ..............................................................................................
New Jersey..........................................................................................
North Carolina ....................................................................................
Ohio ....................................................................................................
Oregon ................................................................................................
Pennsylvania .......................................................................................
South Carolina ....................................................................................
Tennessee............................................................................................
Texas...................................................................................................
Virginia ...............................................................................................

Broadline
—

—
—

—

—
—

—
—
—

1
1

2
2
2

1
1
1
1
1

1
1
3
1

1
2
2
1

Roma
1

—

2
1

—

—
—
—
—
—
—
—
—
—

—

—
—
—

—

Total
1
1
3
1

—

3
2
2

1
1
1
1
1

1
1
2
3
1

1
2
4
1

Total....................................................................................................

Vistar
2

—

PFG
Customized
—
—

3
1
1
2
1
1

1
1
1
1
3
1
1
1
1

2
2

—

—
—
—
—

—

—
—

—

—
—
—

—
—
—
—
—

—
—
—
—

—

1
1

1
1
1

Total
3
1
7
2
1
6
4
3
1
2
1
1
2
1
1
2
2
3
7
2
1
2
1
2
5
7
1

Our Performance Foodservice customers are generally located no more than 200 miles from one of our distribution facilities. Of

the 35 Performance Foodservice distribution centers, six have meat cutting operations that provide custom-cut meat products to our
customers and one has a seafood processing operation that provides custom-cut and packed seafood to its customers and our other
distribution centers. Our PFG Customized customers are generally located no more than 450 miles from one of our distribution
facilities. In addition to the 27 distribution centers operated by Vistar, Vistar has nine cash-and-carry Merchant’s Mart facilities.
Customer orders in all three segments are typically assembled in our distribution facilities and then sorted, placed on pallets, and
loaded onto trucks and trailers in delivery sequence. Deliveries are generally made in large tractor-trailers that we usually lease. We
use integrated computer systems to design and track efficient route sequences for the delivery of our products.

Our distribution center leases are on average 16.7 years in duration. Rent on our leases is typically set at a fixed annual rate, paid

monthly.

Our properties also include a combined headquarters facility for our corporate offices and the Performance Foodservice segment

that is located in Richmond, Virginia; a headquarters facility for PFG Customized that is located in Tennessee; and a headquarters
facility for Vistar that is located in Colorado.

Item 3. Legal Proceedings

We are a party to various claims, lawsuits and other legal proceedings arising out of the ordinary course and conduct of our

business. We have insurance policies covering certain potential losses where such coverage is cost effective. As discussed below, we
have accrued $1.4 million of anticipated settlement costs with respect to one pending lawsuit. For matters not specifically discussed
below, although the outcomes of the claims, lawsuits and other legal proceedings to which we are a party are not determinable at this
time, in our opinion, any additional liability that we might incur upon the resolution of the claims and lawsuits beyond the amounts
already accrued is not expected, individually or in the aggregate, to have a material adverse effect on our consolidated financial
condition, results of operations, or cash flows.

U.S. Equal Employment Opportunity Commission Lawsuit. In March 2009, the Baltimore Equal Employment Opportunity
Commission, or the “EEOC,” Field Office served us with company-wide (excluding, however, our Vistar and Roma Foodservice
operations) subpoenas relating to alleged violations of the Equal Pay Act and Title VII of the Civil Rights Act, seeking certain
information from January 1, 2004 to a specified date in the first fiscal quarter of 2009. In August 2009, the EEOC moved to enforce
the subpoenas in federal court in Maryland, and we opposed the motion. In February 2010, the court ruled that the subpoena related to
the Equal Pay Act investigation was enforceable company-wide but on a narrower scope of data than the original subpoena sought (the
court ruled that the subpoena was applicable to the transportation, logistics, and warehouse functions of our broadline distribution
centers only and not to our PFG Customized distribution centers). We cooperated with the EEOC on the production of information. In
September 2011, the EEOC notified us that the EEOC was terminating the investigation into alleged violations of the Equal Pay Act.
In determinations issued in September 2012 by the EEOC with respect to the charges on which the EEOC had based its company-wide
investigation, the EEOC concluded that we engaged in a pattern of denying hiring and promotion to a class of female applicants and
employees into certain positions within the transportation, logistics, and warehouse functions within our broadline division. In June
2013, the EEOC filed suit in federal court in Baltimore against us. The litigation concerns two issues: (1) whether we unlawfully
engaged in an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether we
unlawfully failed to promote one of the three individuals who filed charges with the EEOC because of her being female. The EEOC
seeks the following relief in the lawsuit: (1) to permanently enjoin us from denying employment to female applicants because of their
sex and denying promotions to female employees because of their sex; (2) a court order mandating that we institute and carry out
policies, procedures, practices and programs which provide equal employment opportunities for females; (3) back pay with
prejudgment interest and compensatory damages for a former female employee and an alleged class of aggrieved female applicants;
(4) punitive damages; and (5) costs. The parties are engaged in discovery. We intend to vigorously defend ourselves. An estimate of
potential loss, if any, cannot be determined at this time.

Laumea v. Performance Food Group, Inc. In May 2014, a former employee of our Roma of Southern California distribution
center filed a putative class action lawsuit in the San Bernardino County, California Superior Court against us. We removed the case
to the United States District Court for the Central District of California. In September 2014, the plaintiff filed a first amended
complaint. There are different counts for which the putative classes differ. The first class is proposed to be all former and current
employees employed by our Performance Foodservice and Vistar segments in California in non-exempt positions at any time during
the period beginning May 30, 2010 to the present, or the “California Class.” With respect to the California Class, the lawsuit alleges
that we (1) failed to pay overtime as required by California statute, (2) failed to provide meal periods and to pay compensation for
such meal periods, (3) failed to provide accurate itemized wage statements, and (4) engaged in unfair trade practices by failing to pay
overtime or to provide meal periods, or pay compensation in lieu thereof. The lawsuit further alleges the plaintiff is entitled to
penalties and attorney fees pursuant to the California Private Attorney General Act. The second putative class is proposed to be all
members of the California Class who separated from employment at any time during the period from May 30, 2011 to the present, or
the “California Subclass.” With respect to the California Subclass, the lawsuit alleges that we failed to pay all compensation due upon
termination of employment and within the period due. The third putative class is proposed to be all current or former employees
employed by us in the United States in non-exempt positions at any time during the period beginning May 30, 2011 to the present, or
the “Nationwide Class.” With respect to the Nationwide Class, the lawsuit alleges we willfully failed to pay overtime compensation
required under the Fair Labor Standards Act.

In June 2015, we engaged in mediation with the plaintiff, subject to the limitation that the interests of the Nationwide Class

would not be mediated except to the extent members of the Nationwide Class worked in California during the applicable period, and
the plaintiff agreed. The mediator proposed the parties settle the lawsuit on the basis of a settlement fund of $1.4 million, on a claims-
made basis with a floor of 60% payout net of attorney fees, administrative fees and enhancements. In July 2015, we indicated our non-
binding agreement to the mediator’s proposal, subject to negotiation of a mutually agreeable settlement. The plaintiff also indicated its
agreement to the mediator’s proposal. Therefore, this amount was accrued in June 2015. In May 2016, we and the plaintiff entered
into a Stipulation for Settlement and Release of Class Action Claims, which Stipulation received preliminary court approval on July
25, 2016. We anticipate notice of the agreed Stipulation will be issued in September 2016 after which a forty-five day claim period
will commence. The final approval hearing has been set in November 2016. Should the parties fail to receive final court approval,
which is unanticipated, we intend to continue to vigorously defend ourselves.

Perez v. Performance Food Group, Inc., et al. In April 2015, a former employee of our Performance Foodservice—Southern
California distribution center filed a putative class action lawsuit in the Alameda County, California Superior Court against us. We
removed the case to the United States District Court for the Northern District of California. In June 2015, the plaintiff filed a first
amended complaint. The lawsuit alleges on behalf of a proposed class of all hourly employees in California (excluding drivers) in our
Performance Foodservice and Vistar segments that we failed to provide second meal periods and to pay compensation for such meal
periods. The lawsuit further alleges on behalf of a proposed class of all employees in California (excluding drivers) who earned non-
discretionary compensation that we failed to pay all overtime wages due, and to pay all premium wages for missed meal periods, by
failing to include all compensation required in the regular rate of pay calculation, and failed to pay wages for all time worked. The
lawsuit further alleges on behalf of a proposed class of all employees in California (excluding drivers) that we failed to pay out vested
vacation time in the form of paid holidays. The lawsuit further alleges on behalf of a proposed class of all employees described above
that we (1) failed to provide accurate itemized wage statements; (2) failed to pay all compensation due upon termination of
employment and within the period due; and (3) engaged in unfair trade practices. Each of the proposed classes for the preceding
claims are for the time period from April 20, 2011 to the present. The lawsuit further alleges on behalf of all of our hourly employees
in the United States (excluding drivers) in non-exempt positions, that we failed to pay appropriate overtime compensation pursuant to
our compensation policy, and to keep records required under the Fair Labor Standards Act, for the period from April 20, 2012 to the
present. Finally, the lawsuit alleges plaintiff is entitled to penalties and attorney fees pursuant to the California Private Attorney
General Act. The lawsuit seeks the following relief: (1) unpaid wages; (2) actual damages; (3) liquidated damages; (4) restitution; (5)
declaratory relief; (6) statutory penalties; (7) civil penalties; and (8) attorneys’ fees, interest and costs. In July 2015, we filed a Motion
to Dismiss or Strike the Complaint. In March 2016, the court granted our motion to dismiss all claims except for the claim alleging we
failed to provide accurate wage statements. The court gave the plaintiff 21 days to amend his complaint. The plaintiff filed a second
amended complaint on April 13, 2016. The plaintiff’s claims in the second amended complaint include substantially the same claims
and allegations as the original lawsuit. We filed a Motion to Dismiss or Strike the Second Amended Complaint on May 11, 2016.
The court has not yet ruled on the motion.

We believe that the exposure created by this lawsuit, if any, is largely duplicative of the exposure, if any, created by the Laumea

Contreras v. Performance Food Group, Inc., et al. In June 2014, a former employee of our Roma of Southern California
distribution center filed a putative class action lawsuit in the Alameda County, California Superior Court against us. The putative class
is proposed to be all drivers employed in any of our California locations in our Performance Foodservice and Vistar segments at any
time during the period beginning June 17, 2010 to the present. In August 2014, the plaintiff filed a first amended complaint. The
lawsuit alleges that we engaged in unfair trade practices and that we, with respect to the putative class, failed to (1) provide timely
offduty meal and rest breaks and to pay compensation for such breaks as required by California law, (2) pay compensation for all
hours worked and to pay a minimum wage for such hours, (3) provide accurate itemized wage statements, (4) pay all compensation
within the period due at the time of termination of employment, and (5) pay compensation in timely fashion. The lawsuit further
alleges that the plaintiff is entitled to penalties and attorney fees pursuant to the California Private Attorney General Act and that
failure to provide meal and rest breaks and to pay a minimum wage for all hours worked constitute unfair business practices.

In June 2015, we engaged in mediation with the plaintiff. The mediator proposed the parties settle the lawsuit on the basis of a

fully paid settlement fund of $3,750,000. In July 2015, the parties agreed to the mediator’s proposal, subject to negotiation of a
mutually agreeable settlement. Therefore, this amount was accrued in June 2015. The parties executed a settlement agreement which
received final approval on May 4, 2016. We paid out the settlement fund on June 17, 2016, which fully resolved the lawsuit.

Vengris v. Performance Food Group, Inc. In May 2015, an employee of our Performance Foodservice Northern California
distribution center filed a putative class action lawsuit in the Alameda County, California Superior Court against us. In July 2015, the
Company removed the case to the United States District Court for the Northern District of California. The putative class is proposed to
be all current and former drivers employed in any of our, our subsidiaries’ or affiliated companies’ California locations since May 2,
2011. The lawsuit alleges that we (1) engaged in wage theft or time shaving by auto-deducting thirty minutes from class members’
work days even if the class members worked during some or all of such meal periods; (2) failed to pay class members for all time
worked when class members worked during first or second meal periods; (3) failed to pay premium wages to class members for
missed meal periods; (4) failed to provide class members the opportunity to take rest breaks of 10 minutes every four hours and failed
to pay premium wage for such missed rest breaks; (5) provided inaccurate wage statements to the class members by failing to account
for all hours worked; (6) failed to pay all compensation within the period due at the time of termination of employment; and (7)
engaged in unlawful, unfair, fraudulent and deceptive business practices by failing to itemize and keep accurate time records and by

failing to pay the class members in a lawful manner. The lawsuit seeks the following relief: (1) compensatory, economic and special
damages, with interest; (2) unpaid wages, with interest; (3) premium wages for non-compliant meal periods and rest breaks; (4)
restitution for engaging in unlawful, unfair, fraudulent, and deceptive business practices related to time records and failure to pay the
class members in a lawful manner; (5) waiting time penalties for failure to pay all wages owed to class members who are former
employees; (6) damages, monies owed, and/or restitution for failing to provide accurate wage statements; (7) injunctive relief barring
the alleged violations; and (8) attorneys’ fees, interest and costs. In July 2015, we filed a Motion to Dismiss or Strike the Complaint.
The court transferred the case to the judge presiding in the Contreras litigation, terminated the motion to dismiss without prejudice and
ruled that we will be able to refile the motion, if necessary, in the future.

We have reached a preliminary agreement with Mr. Vengris to settle his individual claims for an immaterial amount. Should a

final settlement agreement not be reached, we intend to continue to vigorously defend ourselves.

Item 4. Mine Safety Disclosures

Not Applicable

PART II

PART II
PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market and Price Range of Common Stock

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is listed on the NYSE and began trading under the symbol “PFGC” on October 1, 2015. Prior to that time,
Market and Price Range of Common Stock
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
there was no public market for our common stock. The following table sets forth for the periods indicated the high and low reported
Market and Price Range of Common Stock
sale prices per share for our common stock, as reported on the NYSE:

Our common stock is listed on the NYSE and began trading under the symbol “PFGC” on October 1, 2015. Prior to that time,
there was no public market for our common stock. The following table sets forth for the periods indicated the high and low reported
Our common stock is listed on the NYSE and began trading under the symbol “PFGC” on October 1, 2015. Prior to that time,
Fiscal Year Ended July 2, 2016
sale prices per share for our common stock, as reported on the NYSE:
there was no public market for our common stock. The following table sets forth for the periods indicated the high and low reported
Second Quarter (from October 1, 2015) ............................................................................................................. $ 25.22
$ 18.72
Low
sale prices per share for our common stock, as reported on the NYSE:
Third Quarter ...................................................................................................................................................... $ 25.46
$ 20.00
Fiscal Year Ended July 2, 2016
Low
Fourth Quarter .................................................................................................................................................... $ 28.13
$ 22.88
Second Quarter (from October 1, 2015) ............................................................................................................. $ 25.22
$ 18.72
Fiscal Year Ended July 2, 2016
Third Quarter ...................................................................................................................................................... $ 25.46
$ 20.00
Second Quarter (from October 1, 2015) ............................................................................................................. $ 25.22
$ 18.72
Approximate Number of Common Shareholders
Fourth Quarter .................................................................................................................................................... $ 28.13
$ 22.88
Third Quarter ...................................................................................................................................................... $ 25.46
$ 20.00
Fourth Quarter .................................................................................................................................................... $ 28.13
$ 22.88
Approximate Number of Common Shareholders
This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers
Approximate Number of Common Shareholders
and other financial institutions.

At the close of business on August 17, 2016, there were approximately 200 holders of record of our shares of common stock.

High

Low

At the close of business on August 17, 2016, there were approximately 200 holders of record of our shares of common stock.
At the close of business on August 17, 2016, there were approximately 200 holders of record of our shares of common stock.

This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers
Dividends
and other financial institutions.
This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers
and other financial institutions.
We have no current plans to pay dividends on our common stock. In addition, our ability to pay dividends is limited by
Dividends
covenants in the agreements governing our existing indebtedness and may be further limited by the agreements governing other
Dividends
indebtedness we or our subsidiaries incur in the future. See “Item 7. ―Management’s Discussion and Analysis of Financial Condition
We have no current plans to pay dividends on our common stock. In addition, our ability to pay dividends is limited by
and Results of Operations―Liquidity and Capital Resources―Financing Activities.” Any decision to declare and pay dividends in
covenants in the agreements governing our existing indebtedness and may be further limited by the agreements governing other
We have no current plans to pay dividends on our common stock. In addition, our ability to pay dividends is limited by
the future will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of
indebtedness we or our subsidiaries incur in the future. See “Item 7. ―Management’s Discussion and Analysis of Financial Condition
covenants in the agreements governing our existing indebtedness and may be further limited by the agreements governing other
operations, cash requirements, financial condition, contractual restrictions, and other factors that our Board of Directors may deem
and Results of Operations―Liquidity and Capital Resources―Financing Activities.” Any decision to declare and pay dividends in
indebtedness we or our subsidiaries incur in the future. See “Item 7. ―Management’s Discussion and Analysis of Financial Condition
relevant. Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we
the future will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of
and Results of Operations―Liquidity and Capital Resources―Financing Activities.” Any decision to declare and pay dividends in
receive from our subsidiaries.
operations, cash requirements, financial condition, contractual restrictions, and other factors that our Board of Directors may deem
the future will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of
relevant. Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we
operations, cash requirements, financial condition, contractual restrictions, and other factors that our Board of Directors may deem
Recent Sales of Unregistered Securities
receive from our subsidiaries.
relevant. Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we
receive from our subsidiaries.
Recent Sales of Unregistered Securities
stock to members of our management upon the exercise of stock options granted pursuant to our equity incentive plan.
Recent Sales of Unregistered Securities

Between June 28, 2015 and the completion of our initial public offering on October 1, 2015, we issued 9,700 shares of common

Between June 28, 2015 and the completion of our initial public offering on October 1, 2015, we issued 9,700 shares of common
All of these shares were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities
Between June 28, 2015 and the completion of our initial public offering on October 1, 2015, we issued 9,700 shares of common

stock to members of our management upon the exercise of stock options granted pursuant to our equity incentive plan.
Act and Rule 701 promulgated thereunder.
stock to members of our management upon the exercise of stock options granted pursuant to our equity incentive plan.

All of these shares were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities
All of these shares were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities

Item 6. Selected Financial Data
Act and Rule 701 promulgated thereunder.
Act and Rule 701 promulgated thereunder.

We derived the selected statement of operations data for the years ended July 2, 2016, June 27, 2015, and June 28, 2014, and the
Item 6. Selected Financial Data
selected balance sheet data as of July 2, 2016 and June 27, 2015 from our audited consolidated financial statements included in Item 8.
Item 6. Selected Financial Data
Financial Statements and Supplementary Data. We derived the selected statement of operations data for the year ended June 29, 2013
We derived the selected statement of operations data for the years ended July 2, 2016, June 27, 2015, and June 28, 2014, and the
and the selected balance sheet data as of June 28, 2014 from our audited consolidated financial statements not included in this report,
selected balance sheet data as of July 2, 2016 and June 27, 2015 from our audited consolidated financial statements included in Item 8.
We derived the selected statement of operations data for the years ended July 2, 2016, June 27, 2015, and June 28, 2014, and the
after giving effect to the adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting
Financial Statements and Supplementary Data. We derived the selected statement of operations data for the year ended June 29, 2013
selected balance sheet data as of July 2, 2016 and June 27, 2015 from our audited consolidated financial statements included in Item 8.
Pronouncements. We derived the selected statement of operations data for the year ended June 30, 2012 and the selected balance
and the selected balance sheet data as of June 28, 2014 from our audited consolidated financial statements not included in this report,
Financial Statements and Supplementary Data. We derived the selected statement of operations data for the year ended June 29, 2013
sheet data as of June 29, 2013 and June 30, 2012 from our unaudited consolidated financial statements, after giving effect to the
after giving effect to the adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting
and the selected balance sheet data as of June 28, 2014 from our audited consolidated financial statements not included in this report,
adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting Pronouncements, which are not
Pronouncements. We derived the selected statement of operations data for the year ended June 30, 2012 and the selected balance
after giving effect to the adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting
included in this report. Our historical results are not necessarily indicative of the results expected for any future period.
sheet data as of June 29, 2013 and June 30, 2012 from our unaudited consolidated financial statements, after giving effect to the
Pronouncements. We derived the selected statement of operations data for the year ended June 30, 2012 and the selected balance
adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting Pronouncements, which are not
sheet data as of June 29, 2013 and June 30, 2012 from our unaudited consolidated financial statements, after giving effect to the
You should read the selected consolidated financial data below together with our audited consolidated financial statements,
included in this report. Our historical results are not necessarily indicative of the results expected for any future period.
adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting Pronouncements, which are not
including the related notes thereto, included in Item 8. Financial Statements and Supplementary Data, as well as Management’s
included in this report. Our historical results are not necessarily indicative of the results expected for any future period.
Discussion and Analysis of Financial Condition and Results of Operations included in Item 7.

You should read the selected consolidated financial data below together with our audited consolidated financial statements,
You should read the selected consolidated financial data below together with our audited consolidated financial statements,

including the related notes thereto, included in Item 8. Financial Statements and Supplementary Data, as well as Management’s
Discussion and Analysis of Financial Condition and Results of Operations included in Item 7.
including the related notes thereto, included in Item 8. Financial Statements and Supplementary Data, as well as Management’s
Discussion and Analysis of Financial Condition and Results of Operations included in Item 7.

27
27
27

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market and Price Range of Common Stock

Our common stock is listed on the NYSE and began trading under the symbol “PFGC” on October 1, 2015. Prior to that time,

there was no public market for our common stock. The following table sets forth for the periods indicated the high and low reported

sale prices per share for our common stock, as reported on the NYSE:

High

Low

Fiscal Year Ended July 2, 2016

Second Quarter (from October 1, 2015) ............................................................................................................. $ 25.22

Third Quarter ...................................................................................................................................................... $ 25.46

Fourth Quarter .................................................................................................................................................... $ 28.13

$ 18.72

$ 20.00

$ 22.88

At the close of business on August 17, 2016, there were approximately 200 holders of record of our shares of common stock.

This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers

Approximate Number of Common Shareholders

and other financial institutions.

Dividends

We have no current plans to pay dividends on our common stock. In addition, our ability to pay dividends is limited by

covenants in the agreements governing our existing indebtedness and may be further limited by the agreements governing other

indebtedness we or our subsidiaries incur in the future. See “Item 7. ―Management’s Discussion and Analysis of Financial Condition

and Results of Operations―Liquidity and Capital Resources―Financing Activities.” Any decision to declare and pay dividends in

the future will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of

operations, cash requirements, financial condition, contractual restrictions, and other factors that our Board of Directors may deem

relevant. Because we are a holding company, and have no direct operations, we will only be able to pay dividends from funds we

receive from our subsidiaries.

Recent Sales of Unregistered Securities

Between June 28, 2015 and the completion of our initial public offering on October 1, 2015, we issued 9,700 shares of common

stock to members of our management upon the exercise of stock options granted pursuant to our equity incentive plan.

All of these shares were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities

Act and Rule 701 promulgated thereunder.

Item 6. Selected Financial Data

For the fiscal year ended(1)

We derived the selected statement of operations data for the years ended July 2, 2016, June 27, 2015, and June 28, 2014, and the
selected balance sheet data as of July 2, 2016 and June 27, 2015 from our audited consolidated financial statements included in Item 8.
Financial Statements and Supplementary Data. We derived the selected statement of operations data for the year ended June 29, 2013
and the selected balance sheet data as of June 28, 2014 from our audited consolidated financial statements not included in this report,
after giving effect to the adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting
Pronouncements. We derived the selected statement of operations data for the year ended June 30, 2012 and the selected balance
June 27,
2015
sheet data as of June 29, 2013 and June 30, 2012 from our unaudited consolidated financial statements, after giving effect to the
adoption of new accounting pronouncements discussed in Note 3. Recently Issued Accounting Pronouncements, which are not
Statement of Operations Data:
included in this report. Our historical results are not necessarily indicative of the results expected for any future period.
11,505.9
$
Net sales ..............................................
10,101.9
Cost of goods sold ...............................

15,270.0
13,421.7
You should read the selected consolidated financial data below together with our audited consolidated financial statements,
1,848.3
1,688.2

Gross profit..........................................
including the related notes thereto, included in Item 8. Financial Statements and Supplementary Data, as well as Management’s
Operating expenses..............................
Discussion and Analysis of Financial Condition and Results of Operations included in Item 7.
Operating profit ...................................
Interest expense(2)...............................
Loss on extinguishment of debt...........
Other, net.............................................

(dollars in millions, except per share data)

115.6
86.1
—
(0.7)

160.1
85.7
—
(22.2)

114.7
93.9
2.0
(0.7)

202.2
83.9
—
3.8

110.9
76.3
—
0.7

For the fiscal year ended(1)

13,685.7
11,988.5

12,826.5
11,243.8

16,104.8
14,094.8

2,010.0
1,807.8

1,404.0
1,293.1

1,582.7
1,468.0

1,697.2
1,581.6

June 30,
2012

June 28,
2014

June 29,
2013

June 28,
2014

June 29,
2013

June 27,
27
2015

June 30,
2012

July 2,
2016

(dollars in millions, except per share data)

Other expense, net ...............................
Statement of Operations Data:
Income before taxes.............................
Net sales ..............................................
Income tax expense(3).........................
Cost of goods sold ...............................
Net income ..........................................
Gross profit..........................................
Per Share Data:
Operating expenses..............................
Basic net income per share ..................
Operating profit ...................................
Diluted net income per share ...............
Interest expense(2)...............................
Weighted-average number of shares used in
Loss on extinguishment of debt...........
Other, net.............................................
Basic ....................................................
Diluted.................................................
Other expense, net ...............................
Dividends declared per share...............
Income before taxes.............................
Income tax expense(3).........................

per share amounts

$
$

87.7
114.5
16,104.8
46.2
14,094.8
68.3
2,010.0
1,807.8
0.71
202.2
0.70
83.9
—
3.8
96,451,931
98,128,626
87.7
—
114.5
46.2

63.5
96.6
15,270.0
40.1
13,421.7
56.5
1,848.3
1,688.2
0.65
160.1
0.64
85.7
—
(22.2)
86,874,727
87,613,698
63.5
—
96.6
40.1

$
$

85.4
30.2
13,685.7
14.7
11,988.5
15.5
1,697.2
1,581.6
0.18
115.6
0.18
86.1
—
(0.7)
86,868,452
87,533,324
85.4
— $
30.2
14.7

$
$

95.2
19.5
12,826.5
11.1
11,243.8
8.4
1,582.7
1,468.0
0.10
114.7
0.10
93.9
2.0
(0.7)
86,864,606
87,458,530
95.2
2.53
19.5
11.1

77.0
33.9
11,505.9
12.9
10,101.9
21.0
1,404.0
1,293.1
0.24
110.9
0.24
76.3
—
0.7
86,827,483
87,242,331
77.0
1.15
33.9
12.9

$
$

Net income ..........................................

68.3

Per Share Data:
Basic net income per share ..................
Diluted net income per share ...............
Balance Sheet Data:
Weighted-average number of shares used in
Cash and cash equivalents ................................................... $
Total assets ..........................................................................
Basic ....................................................
Total debt.............................................................................
Diluted.................................................
Total shareholders’ equity ...................................................
Dividends declared per share...............

per share amounts

96,451,931
98,128,626

0.71
0.70

$
$

—

$
July 2,
2016
$
$

56.5

0.65
0.64

$
June 27,
2015
$
$

15.5

As of

June 28,
2014
$
$

0.18
0.18

(dollars in millions)

8.4
June 29,
2013

0.10
0.10

$
$

21.0
June 30,
2012
0.24
0.24

10.9
3,455.4
86,874,727
1,145.5
87,613,698
802.8

—

9.2
3,353.5
1,422.6
493.0

86,868,452
87,533,324

5.3
3,199.6
1,435.1
434.1

14.1
3,006.8
1,455.3
420.0
$

86,864,606
87,458,530
2.53

— $

11.1
2,920.7
86,827,483
1,198.7
87,242,331
625.1
1.15

Balance Sheet Data:
Cash and cash equivalents ................................................... $
Total assets ..........................................................................
Total debt.............................................................................
Total shareholders’ equity ...................................................

July 2,
2016

June 27,
2015

As of

June 28,
2014

(dollars in millions)

June 29,
2013

June 30,
2012

10.9
3,455.4
1,145.5
802.8

9.2
3,353.5
1,422.6
493.0

5.3
3,199.6
1,435.1
434.1

14.1
3,006.8
1,455.3
420.0

11.1
2,920.7
1,198.7
625.1

(1) Fiscal year 2016 contained 53 weeks consisting of 371 days and fiscal years 2015, 2014, 2013 and 2012 contained 52 weeks consisting of 364

(2)

(3)

days.
Interest expense includes $7.3 million, $8.0 million, $6.6 million, $11.1 million and $12.5 million of reclassification adjustments for changes in
fair value of interest rate swaps for fiscal 2016, fiscal 2015, fiscal 2014, fiscal 2013 and fiscal 2012, respectively. Also includes $9.4 million loss
on extinguishment and $5.5 million accelerated amortization of original issue discount and financing costs during fiscal 2016.
Income tax expense includes $2.9 million, $3.1 million, $2.6 million, $4.3 million and $4.9 million tax benefit from reclassification adjustments
for fiscal 2016, fiscal 2015, fiscal 2014, fiscal 2013 and fiscal 2012, respectively, related to the reclassification adjustments for change in fair
value of interest rate swaps referred to in note (2).

(1) Fiscal year 2016 contained 53 weeks consisting of 371 days and fiscal years 2015, 2014, 2013 and 2012 contained 52 weeks consisting of 364

days.

(2)

Interest expense includes $7.3 million, $8.0 million, $6.6 million, $11.1 million and $12.5 million of reclassification adjustments for changes in

fair value of interest rate swaps for fiscal 2016, fiscal 2015, fiscal 2014, fiscal 2013 and fiscal 2012, respectively. Also includes $9.4 million loss

on extinguishment and $5.5 million accelerated amortization of original issue discount and financing costs during fiscal 2016.

(3)

Income tax expense includes $2.9 million, $3.1 million, $2.6 million, $4.3 million and $4.9 million tax benefit from reclassification adjustments

for fiscal 2016, fiscal 2015, fiscal 2014, fiscal 2013 and fiscal 2012, respectively, related to the reclassification adjustments for change in fair

value of interest rate swaps referred to in note (2).

Item 7. Management 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 Item 6.

Selected Financial Data and the audited consolidated financial statements and the notes thereto included in Item 8. Financial
Statements and Supplementary Data in this Annual Report on 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 Item 1A. Risk Factors of this Annual Report on 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 Annual Report on Form 10-K.

Our Company

We market and distribute approximately 150,000 food and food-related products to customers across the United States from
approximately 71 distribution facilities to over 150,000 customer locations in the “food-away-from-home” industry. We offer our
customers a broad assortment of products including our proprietary-branded products, nationally-branded products, and products
bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and
seafood), frozen foods, and groceries to candy, snacks, and beverages. We also sell disposables, cleaning and kitchen supplies, and
related products used by our customers. In addition to the products we offer to our customers, we provide value-added services by
allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement,
menu development, and operational strategy.

We have three reportable segments: Performance Foodservice, PFG Customized, and Vistar. Our Performance Foodservice

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

The Company’s fiscal year ends on the Saturday nearest to June 30th. This resulted in a 53-week year for fiscal 2016 and a 52-

week year for fiscal 2015 and fiscal 2014. References to “fiscal 2016” are to the 53-week period ended July 2, 2016, references to
“fiscal 2015” are to the 52-week period ended June 27, 2015, and references to “fiscal 2014” are to the 52-week period ended June 28,
2014.

Recent Trends and Initiatives

Our case volume has grown in each quarter over the comparable prior fiscal year quarter, starting in the second quarter of fiscal
2010 and continuing through the most recent quarter. We believe that we gained industry share during fiscal 2016 given that we have
grown our sales more rapidly than the industry growth rate forecasted by Technomic, a research and consulting firm serving the food
and food related industry. Our Net income grew 20.9% and Adjusted EBITDA grew 11.6% from fiscal 2015 to fiscal 2016, driven by
the 53rd week in fiscal 2016, case growth and improved profit per case. Case volume grew 7.0% in fiscal 2016 compared to fiscal 2015
and grew 4.8% excluding the extra week in fiscal 2016. Gross margin dollars rose 8.7% in fiscal 2016 versus the prior year, 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 fiscal 2016 compared to fiscal 2015 rose 7.1%, which
was slower than gross margin growth, as a result of initiatives undertaken to reduce operating expenses and from lower fuel prices.

Key Factors Affecting Our Business

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

• Changing demographic and macroeconomic trends. The share of consumer spending captured by the food-away-from-home
industry increased steadily for several decades and paused during the recession that began in 2008. Following the recession,
the share has again increased as a result of increasing employment, rising disposable income, increases in the number of

restaurants, and favorable demographic trends, such as smaller household sizes, an increasing number of dual income
households, and an aging population base that spends more per capita at foodservice establishments. The foodservice
distribution industry is also sensitive to national and regional economic conditions, such as changes in consumer spending,
changes in consumer confidence, and changes in the prices of certain goods.

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

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

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures

used by our management are discussed below. The percentages on the results presented below are calculated based on rounded
numbers.

Net Sales

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

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

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

In addition, our management uses Adjusted EBITDA, defined as net income (loss) before interest expense, interest income,

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

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

EBITDA and Adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or

as substitutes for analysis of our results as reported under U.S. GAAP. For example, EBITDA and Adjusted EBITDA:

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

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

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

replaced in the future;

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

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

In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items that are included in EBITDA

and net income as permitted or required by our credit agreements. Adjusted EBITDA among other things:

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

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

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

enhance our operations; and

• does not reflect management fees paid to Blackstone and Wellspring.

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

(dollars in millions, except per share data):

Fiscal Year Ended

Fiscal 2016

Fiscal 2015

Net sales .................................. $
Net sales .................................. $
Cost of goods sold ...................
Cost of goods sold ...................
Gross profit..............................
Gross profit..............................
Operating expenses .................
Operating expenses .................
Operating profit .......................
Operating profit .......................
Other expense, net
Other expense, net

Interest expense .............
Interest expense .............
Other, net .......................
Other, net .......................
Other expense, net .........
Other expense, net .........
Income before income taxes ...
Income before income taxes....
Income before income taxes....
Income tax expense .................
Income tax expense .................
Net income .............................. $
Net income .............................. $

EBITDA .................................. $
EBITDA .................................. $
Adjusted EBTIDA................... $
Adjusted EBTIDA................... $
Weighted-average common
Weighted-average common
shares outstanding:
shares outstanding:
Basic ..............................
Diluted ...........................
Earnings per common share:

Basic ..............................
Diluted ...........................

Earnings per common share:

July 2, 2016

July 2, 2016
16,104.8
16,104.8
14,094.8
14,094.8
2,010.0
2,010.0
1,807.8
1,807.8
202.2
202.2

June 27, 2015
June 27, 2015
15,270.0
15,270.0
$
13,421.7
13,421.7
1,848.3
1,848.3
1,688.2
1,688.2
160.1
160.1

June 28, 2014
June 28, 2014
13,685.7
13,685.7
$
11,988.5
11,988.5
1,697.2
1,697.2
1,581.6
1,581.6
115.6
115.6

Change
Change
834.8
834.8
$
673.1
673.1
161.7
161.7
119.6
119.6
42.1
42.1

%
5.5
5.0
8.7
7.1
26.3

5.5
5.0
8.7
7.1
26.3

Change
Change
$ 1,584.3
$ 1,584.3
1,433.2
1,433.2
151.1
151.1
106.6
106.6
44.5
44.5

%
%
11.6
11.6
12.0
12.0
8.9
8.9
6.7
6.7
38.5
38.5

83.9
3.8
87.7
114.5
46.2
68.3

317.0
366.6

$
$

85.7
(22.2)
63.5
96.6
40.1
56.5

303.6
328.6

$
$

86.1
(0.7)
85.4
30.2
14.7
15.5

249.0
286.1

$
$

(1.8)
26.0
24.2
17.9
6.1
11.8

13.4
38.0

$
$

(2.1)
N/M
38.1
18.5
15.2
20.9

4.4
11.6

$
$

(0.4)
(21.5)
(21.9)
66.4
25.4
41.0

54.6
42.5

(0.5)
(0.5)
3,071.4
3,071.4
(25.6)
(25.6)
219.9
219.9
172.8
172.8
264.5
264.5

21.9
14.9

96,451,931
98,128,626

86,874,727
87,613,698

86,868,452
87,533,324

9,577,204
10,514,928

11.0
12.0

6,275
80,374

0.0
0.1

Basic .............................. $ 0.71
Diluted ........................... $ 0.70

$ 0.65
$ 0.64

$ 0.18
$ 0.18

$ 0.06
$ 0.06

9.2
9.4

$ 0.47
$ 0.47
0.46
$
$
0.46

261.1
255.6

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:

For the fiscal year ended

July 2,
2016

June 27,
2015

June 28,
2014

Net income ......................................................................................... $

Interest expense(1) ....................................................................
Income tax expense...................................................................
Depreciation..............................................................................
Amortization of intangible assets..............................................

68.3
83.9
46.2
80.5
38.1

56.5
85.7
40.1
76.3
45.0

(dollars in millions)
$

EBITDA .............................................................................................
Non-cash items(2).....................................................................
Acquisition, integration and reorganization(3) .........................
Non-recurring items(4) .............................................................
Productivity initiatives(5) .........................................................
Multiemployer plan withdrawal(6) ...........................................
Other adjustment items(7).........................................................

317.0
18.2
9.4
1.7
11.6
-
8.7

303.6
2.5
0.4
5.1
8.3
2.8
5.9

15.5
86.1
14.7
73.5
59.2

249.0
4.9
11.3
0.4
16.3
0.4
3.8

Adjusted EBITDA.............................................................................. $

366.6

328.6

286.1

(1)

(2)

(3)

Includes a $9.4 million loss on extinguishment and $5.5 million of accelerated amortization of original issuance discount and
deferred financing costs during fiscal 2016.
Includes adjustments for non-cash charges arising from employee equity compensation, interest rate swap hedge ineffectiveness,
and adjustments to reflect certain assets held for sale to their net realizable value. Equity compensation cost was $17.2 million,
$1.2 million and $0.7 million for fiscal 2016, fiscal 2015 and fiscal 2014, respectively. In addition, this includes a (decrease)
increase in the LIFO reserve of $(1.5) million, $1.7 million and $3.0 million for fiscal 2016, fiscal 2015, and fiscal 2014,
respectively.
Includes professional fees and other costs related to completed and abandoned acquisitions; in fiscal 2015 these fees are net of a
$25.0 million termination fee related to the terminated agreement to acquire 11 US Foods facilities from Sysco and US Foods,
costs of integrating certain of our facilities, facility closing costs, certain equity transactions, and advisory fees paid to
Blackstone and Wellspring.

(4) Consists primarily of an expense related to our withdrawal from a purchasing cooperative, pre-acquisition worker’s

compensation claims related to an insurance company that went into liquidation, a legal settlement expense, and the impact of
business interruption insurance due to hurricane and other weather related and other one-time events.

(5) Consists primarily of professional fees and related expenses associated with the Winning Together program and other

(6)

productivity initiatives.
Includes amounts related to the withdrawal from the Central States Southeast and Southwest Areas Pension Fund. See Note 15
Commitments and Contingencies to the audited consolidated financial statements included in Item 8. Financial Statements and
Supplementary Data.

(7) Consists primarily of changes in fair value and costs related to settlements on our fuel collar derivatives, certain financing
transactions, lease amendments, and franchise tax expense and other adjustments permitted by our credit agreements.

Consolidated Results of Operations

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

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 $834.8 million, or 5.5%, in fiscal 2016 compared to fiscal
2015. The increase in net sales was primarily attributable to the 53rd week in fiscal year 2016, case growth in Performance
Foodservice, particularly in the Street channel, and sales growth in Vistar, particularly their retail, theater, vending, and hospitality
channels. Net sales for the extra week in fiscal 2016 were approximately $312.4 million.

Net sales growth was driven by case volume growth of 7.0% in fiscal 2016 compared to fiscal 2015. Excluding the impact of the

53rd week in fiscal 2016, case volume increased 4.8 % compared to the prior year. This increase was partially offset by a 1.5%
decrease in selling price per case in fiscal 2016, primarily as a result of deflation and mix. During fiscal 2016, we witnessed deflation
in our cheese, beef, and poultry categories.

Gross Profit

Gross profit increased $161.7 million, or 8.7%, for fiscal 2016 compared to fiscal 2015. The increase in gross profit was the
result of the 53rd week in fiscal 2016, growth in cases sold and a higher gross profit per case, which in turn was the result of selling an
improved mix of channels and products. Within Performance Foodservice, case growth to Street customers positively affected gross
profit per case. Street customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case
than other customers. Also, in fiscal 2016, Performance Foodservice grew our Performance Brand sales, which have higher gross
profit per case compared to the other brands we sell. See “—Segment Results—Performance Foodservice” below for additional
discussion. The Company estimates that the gross profit for the extra week in fiscal 2016 was approximately $40.1 million.

Operating Expenses

Operating expenses increased $119.6 million, or 7.1%, for fiscal 2016 compared to fiscal 2015. The increase in operating
expenses was primarily driven by the 53rd week in fiscal 2016, the increase in case volume, an increased investment in our sales force,
and increases in stock compensation expense of $16.0 million, bonus expense of $13.8 million, and insurance expense of $7.0
million, as discussed in the segment results below. The increase was partially offset by leverage of our fixed costs, improved
productivity in our warehouse and transportation operations, and decreases in fuel expense and amortization of intangible assets.
Operating expenses for the extra week is fiscal 2016 were approximately $35.3 million.

Depreciation and amortization of intangible assets decreased from $121.3 million in fiscal 2015 to $118.6 million in fiscal 2016,

a decrease of 2.2%. Decreases in amortization of intangible assets, since certain intangibles are now fully amortized compared to the
prior year, more than offset the increases in depreciation in fixed assets resulting from larger capital outlays to support our growth.

Net Income

Net income increased by $11.8 million, or 20.9%, to $68.3 million for fiscal 2016 compared to fiscal 2015. The increase in net
income was attributable to a $42.1 million increase in operating profit and a $1.8 million decrease in interest expense, partially offset
by a $26.0 million increase in other expense and a $6.1 million increase in income tax expense. The Company estimates that net
income for the extra week in fiscal 2016 was approximately $2.1 million.

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 decrease in interest expense was primarily the result of lower average borrowings during fiscal 2016
compared to fiscal 2015, partially offset by a $9.4 million loss on extinguishment of debt and $5.5 million of accelerated amortization
of original issuance discount and deferred financing costs.

The $26.0 million increase in other expense related primarily to the absence of the $25.0 million termination fee income

recognized in fiscal 2015, a $3.7 million increase in expense related to settlements on our derivatives and a $0.5 million increase in
hedge ineffectiveness in fiscal 2016 compared to fiscal 2015. These increases were partially offset by a $3.2 million increase in non-
cash income primarily related to the change in fair value of our derivatives for fiscal 2016 compared to fiscal 2015.

The increase in income tax expense was primarily a result of the increase in income before taxes, partially offset by a decrease

in the effective tax rate. Our effective tax rate in fiscal 2016 was 40.3% compared to 41.5% in fiscal 2015. The decrease in the
effective tax rate was a result of an increase in other permanent deductions and a reduction in non-deductible expenses and state
income tax as a percentage of income before taxes. Since non-deductible expenses tend to be relatively constant, there is a favorable
rate impact as income before taxes increases.

Fiscal year ended June 27, 2015 compared to fiscal year ended June 28, 2014

Net Sales

Net sales increased $1.6 billion, or 11.6%, for fiscal 2015 compared to fiscal 2014. This increase is primarily attributable to new
and expanding business with Street customers, which experienced approximately 13% growth for fiscal 2015 compared to fiscal 2014.
The balance of the total net sales increase was primarily attributable to growth in Chain customers.

We grew case volume by 6.4% in fiscal 2015, which contributed to the increase in net sales. Inflation during fiscal 2015
increased at an estimated annual rate of 2.4% compared to an estimated annual rate of 1.7% in fiscal 2014. We calculate inflation and
deflation by reference to the weighted average of changes in prices experienced by our product classes over the same relevant periods.
Net sales growth is a function of case growth, product inflation, and a changing mix of customers, channels, and product categories
sold.

Gross Profit

Gross profit increased $151.1 million, or 8.9%, for fiscal 2015 compared to fiscal 2014. This increase in gross profit was the
result of growth in cases sold and a higher gross profit per case. Net sales from Performance Foodservice increased as a percentage of
total net sales from 59.2% for fiscal 2014 to 59.4% for fiscal 2015. We earn higher gross profit per case in Performance Foodservice
than Vistar and PFG Customized. Within Performance Foodservice, case growth to Street customers positively affected gross profit
per case. Street customers typically receive more services from us, cost more to serve, and pay a higher gross profit per case than other
customers. Also, within Performance Foodservice, we were able to grow our Performance Brand sales, which have higher gross profit
per case compared to other brands, from fiscal 2014 to fiscal 2015. See “—Segment Results—Performance Foodservice” below for
additional discussion.

Operating Expenses

Operating expenses increased $106.6 million, or 6.7%, for fiscal 2015 compared to fiscal 2014. The increase in operating

expenses was primarily caused by the 6.4% increase in case volume and an increase in bonus expenses, professional fees, and IT
expenses, partially offset by a decrease in fuel expense and amortization as discussed in the segment results below. Moreover, we
believe that, during fiscal 2015, the operating expense reduction initiative within our Winning Together program approximately offset
operating expense inflation associated with employees’ salaries and benefits, rent, utilities and other operating expenses. In addition,
our estimated withdrawal liability was increased by $2.8 million during fiscal 2015 to reserve the full value of the withdrawal liability
related to a multiemployer pension plan from which we had withdrawn during fiscal 2013. The estimated withdrawal liability for this
multiemployer pension plan had increased by $0.4 million during fiscal 2014. All of these factors resulted in a net increase in
operating expenses for fiscal 2015 compared to fiscal 2014.

Depreciation and amortization of intangible assets decreased from $132.7 million in fiscal 2014 to $121.3 million in fiscal 2015,

a decrease of 8.6%. The decrease in amortization of intangible assets, since certain intangibles are now fully amortized, more than
offset the increases in depreciation in fixed assets resulting from capital outlays to support our growth.

Net Income

Net income increased by $41.0 million to $56.5 million for fiscal 2015 compared to fiscal 2014. This increase in net income was

attributable to a $44.5 million increase in operating profit and a $21.9 million decrease in other expense, partially offset by a $25.4
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 an increase in operating expenses. The decrease in other expense, net related primarily to a $25.0 million
termination fee in connection with the termination of the Sysco and US Foods merger and lower interest expense in the amount of
$0.4 million for fiscal 2015. The decrease in interest expense was primarily a result of lower average interest rates partially offset by
an increase in average borrowings during fiscal 2015 compared to fiscal 2014. These decreases in other expense, net were partially
offset by $1.9 million less non-cash income related to the change in fair value of our derivatives for fiscal 2015 compared to fiscal
2014 and $1.2 million of expense during fiscal 2015 related to settlements on our derivatives.

The increase in income tax expense was primarily a result of the increase in income before taxes, partially offset by a decrease

in the effective tax rate. The effective tax rate was 41.5% for fiscal 2015 compared to 48.7% for fiscal 2014. The decrease in the
effective tax rate was a result of the reduction of non-deductible expenses and state income taxes as a percentage of income before
taxes. Since non-deductible expenses tend to be relatively constant, there is a favorable rate impact as income before taxes increases.

Segment Results

We have three segments as described above—Performance Foodservice, PFG Customized, and Vistar. Management evaluates

the performance of these segments based on their respective sales growth and EBITDA. For PFG Customized, EBITDA includes
certain allocated corporate expenses that are included in operating expenses. The allocated corporate expenses are determined based
on a percentage of total sales. This percentage is reviewed on a periodic basis to ensure that the allocation reflects a reasonable rate of
corporate expenses based on their use of corporate services.

Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate
Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate

Corporate & All Other is comprised of unallocated corporate overhead and certain operations that are not considered separate

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.

reportable segments based on their size. This includes the operations of our internal logistics unit responsible for managing and
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.
allocating inbound logistics revenue and expense.

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.

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

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

Net Sales

Net Sales
Net Sales

Net Sales

Fiscal Year Ended

Fiscal Year Ended
Fiscal Year Ended

Fiscal Year Ended

Performance Foodservice....................... $
Performance Foodservice....................... $
Performance Foodservice....................... $
Performance Foodservice....................... $
PFG Customized ....................................
PFG Customized ....................................
PFG Customized ....................................
PFG Customized ....................................
Vistar......................................................
Vistar......................................................
Vistar......................................................
Vistar......................................................
Corporate & All Other ...........................
Corporate & All Other ...........................
Corporate & All Other ...........................
Corporate & All Other ...........................
Intersegment Eliminations .....................
Intersegment Eliminations .....................
Intersegment Eliminations .....................
Intersegment Eliminations .....................
Total net sales......................................... $
Total net sales......................................... $
Total net sales......................................... $
Total net sales......................................... $

July 2,
July 2,
July 2,
July 2,
2016
2016
2016
2016
9,616.3
9,616.3
9,616.3
$
9,616.3
3,782.1
3,782.1
3,782.1
3,782.1
2,701.5
2,701.5
2,701.5
2,701.5
220.5
220.5
220.5
220.5
(215.6)
(215.6)
(215.6)
(215.6)
16,104.8
16,104.8
$
16,104.8
16,104.8

$
$

June 27,
June 27,
June 27,
June 27,
2015
2015
2015
2015
9,085.0
9,085.0
$
$
9,085.0
9,085.0
3,752.9
3,752.9
3,752.9
3,752.9
2,426.1
2,426.1
2,426.1
2,426.1
191.6
191.6
191.6
191.6
(185.6)
(185.6)
(185.6)
(185.6)
15,270.0
$
15,270.0
$
$
15,270.0
15,270.0
$

$
$

June 28,
June 28,
June 28,
June 28,
2014
2014
2014
2014
8,103.8
8,103.8
$
$
8,103.8
8,103.8
3,301.0
3,301.0
3,301.0
3,301.0
2,269.0
2,269.0
2,269.0
2,269.0
157.5
157.5
157.5
157.5
(145.6)
(145.6)
(145.6)
(145.6)
13,685.7
$
13,685.7
$
$
13,685.7
13,685.7
$

EBITDA

EBITDA
EBITDA

EBITDA

Fiscal Year Ended

Fiscal Year Ended
Fiscal Year Ended

Fiscal Year Ended

Fiscal 2016

Fiscal 2016
Fiscal 2016

Fiscal 2016

Change
$
$

Change
Change
Change
531.3
531.3
531.3
$
531.3
29.2
29.2
29.2
29.2
275.4
275.4
275.4
275.4
28.9
28.9
28.9
28.9
(30.0)
(30.0)
(30.0)
(30.0)
834.8
834.8
834.8
$
834.8

%
%
%
%
5.8
5.8
5.8
$
5.8
0.8
0.8
0.8
0.8
11.4
11.4
11.4
11.4
15.1
15.1
15.1
15.1
(16.2)
(16.2)
(16.2)
(16.2)
5.5
5.5
$
5.5
5.5

$
$

Fiscal 2016

Fiscal 2016
Fiscal 2016

Fiscal 2016

Fiscal 2015

Fiscal 2015
Fiscal 2015

Fiscal 2015

Change
Change
Change
Change
981.2
$
981.2
$
$
981.2
981.2
451.9
451.9
451.9
451.9
157.1
157.1
157.1
157.1
34.1
34.1
34.1
34.1
(40.0)
(40.0)
(40.0)
(40.0)
1,584.3
$
1,584.3
$
1,584.3
1,584.3
$

%
%
%
%
12.1
12.1
12.1
12.1
13.7
13.7
13.7
13.7
6.9
6.9
6.9
6.9
21.7
21.7
21.7
21.7
(27.5)
(27.5)
(27.5)
(27.5)
11.6
11.6
11.6
11.6

Fiscal 2015

Fiscal 2015
Fiscal 2015

Fiscal 2015

July 2,
2016

July 2,
July 2,
July 2,
2016
2016
2016
307.0
Performance Foodservice....................... $
307.0
Performance Foodservice....................... $
Performance Foodservice....................... $
$
307.0
307.0
Performance Foodservice....................... $
34.1
PFG Customized ....................................
PFG Customized ....................................
34.1
34.1
PFG Customized ....................................
34.1
PFG Customized ....................................
113.0
Vistar......................................................
113.0
Vistar......................................................
113.0
Vistar......................................................
Vistar......................................................
113.0
(137.1)
Corporate & All Other ...........................
Corporate & All Other ...........................
(137.1)
Corporate & All Other ...........................
(137.1)
Corporate & All Other ...........................
(137.1)
$
Total EBITDA........................................ $ 317.0
$
Total EBITDA........................................ $ 317.0
$
Total EBITDA........................................ $ 317.0
Total EBITDA........................................ $ 317.0

June 28,
June 27,
June 28,
June 27,
June 27,
June 27,
June 28,
June 28,
2014
2015
2015
2014
2015
2015
2014
2014
Change
254.2 $ 207.5 $ 52.8
$
254.2 $ 207.5 $ 52.8
$
254.2 $ 207.5 $ 52.8
$
254.2 $ 207.5 $ 52.8
(2.4)
37.5
36.5
36.5
(2.4)
37.5
(2.4)
37.5
36.5
(2.4)
37.5
36.5
7.5
88.3
105.5
7.5
105.5
88.3
88.3
7.5
105.5
105.5
7.5
88.3
(44.5)
(84.3)
(92.6)
(92.6)
(84.3)
(44.5)
(44.5)
(84.3)
(92.6)
(92.6)
(44.5)
(84.3)
$ 13.4
303.6 $ 249.0
$ 13.4
303.6 $ 249.0
$ 13.4
303.6 $ 249.0
$
$ 13.4
303.6 $ 249.0

Change
Change

Change

%
%
%
%
20.8
20.8
20.8
20.8
(6.6)
(6.6)
(6.6)
(6.6)
7.1
7.1
7.1
7.1
(48.1)
(48.1)
(48.1)
(48.1)
4.4
4.4
$
4.4
4.4

Change
Change
Change
Change
$ 46.7
$ 46.7
$ 46.7
$ 46.7
(1.0)
(1.0)
(1.0)
17.2
17.2
17.2
(8.3)
(8.3)
(8.3)
54.6
54.6

54.6

(1.0)
17.2
(8.3)

%
22.5
(2.7)
19.5
(9.8)
21.9

%
%
%
22.5
22.5
22.5
(2.7)
(2.7)
(2.7)
19.5
19.5
19.5
(9.8)
(9.8)
(9.8)
21.9
21.9
21.9

$
$

Segment Results—Performance Foodservice

Segment Results—Performance Foodservice
Segment Results—Performance Foodservice

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015
Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

Net Sales

Net Sales
Net Sales

Net Sales

Net sales for Performance Foodservice increased $531.3 million, or 5.8%, from fiscal 2015 to fiscal 2016. This increase in net
Net sales for Performance Foodservice increased $531.3 million, or 5.8%, from fiscal 2015 to fiscal 2016. This increase in net
Net sales for Performance Foodservice increased $531.3 million, or 5.8%, from fiscal 2015 to fiscal 2016. This increase in net
Net sales for Performance Foodservice increased $531.3 million, or 5.8%, from fiscal 2015 to fiscal 2016. This increase in net
sales was attributable to the 53rd week in fiscal 2016, as well as growth in cases sold. Net sales for the extra week in fiscal 2016 were
sales was attributable to the 53rd week in fiscal 2016, as well as growth in cases sold. Net sales for the extra week in fiscal 2016 were
sales was attributable to the 53rd week in fiscal 2016, as well as growth in cases sold. Net sales for the extra week in fiscal 2016 were
sales was attributable to the 53rd week in fiscal 2016, as well as growth in cases sold. Net sales for the extra week in fiscal 2016 were
approximately $188.0 million. Case growth in fiscal 2016 was driven by securing new Street customers and further penetrating
approximately $188.0 million. Case growth in fiscal 2016 was driven by securing new Street customers and further penetrating
approximately $188.0 million. Case growth in fiscal 2016 was driven by securing new Street customers and further penetrating
approximately $188.0 million. Case growth in fiscal 2016 was driven by securing new Street customers and further penetrating
existing customers. Securing new and expanded business with Street customers resulted in Street sales growth of approximately 8.3%
existing customers. Securing new and expanded business with Street customers resulted in Street sales growth of approximately 8.3%
existing customers. Securing new and expanded business with Street customers resulted in Street sales growth of approximately 8.3%
existing customers. Securing new and expanded business with Street customers resulted in Street sales growth of approximately 8.3%
in fiscal 2016 compared to fiscal 2015. For the year, Street sales as a percentage of total segment sales were up approximately 100
in fiscal 2016 compared to fiscal 2015. For the year, Street sales as a percentage of total segment sales were up approximately 100
in fiscal 2016 compared to fiscal 2015. For the year, Street sales as a percentage of total segment sales were up approximately 100
in fiscal 2016 compared to fiscal 2015. For the year, Street sales as a percentage of total segment sales were up approximately 100
bps, to 44.1%.
bps, to 44.1%.
bps, to 44.1%.
bps, to 44.1%.

EBITDA

EBITDA
EBITDA

EBITDA

EBITDA for Performance Foodservice increased $52.8 million, or 20.8%, from fiscal 2015 to fiscal 2016. This increase was the
EBITDA for Performance Foodservice increased $52.8 million, or 20.8%, from fiscal 2015 to fiscal 2016. This increase was the

EBITDA for Performance Foodservice increased $52.8 million, or 20.8%, from fiscal 2015 to fiscal 2016. This increase was the

EBITDA for Performance Foodservice increased $52.8 million, or 20.8%, from fiscal 2015 to fiscal 2016. This increase was the
result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization.
result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization.
result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization.
result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization.
Gross profit increased by 10.5% in fiscal 2016, compared to the prior fiscal year, as a result of gross profit of approximately $28.3
Gross profit increased by 10.5% in fiscal 2016, compared to the prior fiscal year, as a result of gross profit of approximately $28.3
Gross profit increased by 10.5% in fiscal 2016, compared to the prior fiscal year, as a result of gross profit of approximately $28.3
Gross profit increased by 10.5% in fiscal 2016, compared to the prior fiscal year, as a result of gross profit of approximately $28.3
million in the extra week in fiscal 2016 and an increase in cases sold, as well as an increase in the gross profit per case. The increase in
million in the extra week in fiscal 2016 and an increase in cases sold, as well as an increase in the gross profit per case. The increase in
million in the extra week in fiscal 2016 and an increase in cases sold, as well as an increase in the gross profit per case. The increase in
million in the extra week in fiscal 2016 and an increase in cases sold, as well as an increase in the gross profit per case. The increase in
gross profit per case was driven by a favorable shift in the mix of cases sold toward Street customers and Performance Brands, as well
gross profit per case was driven by a favorable shift in the mix of cases sold toward Street customers and Performance Brands, as well
gross profit per case was driven by a favorable shift in the mix of cases sold toward Street customers and Performance Brands, as well
gross profit per case was driven by a favorable shift in the mix of cases sold toward Street customers and Performance Brands, as well
as by an increase in procurement gains. Street business has higher gross margins than Chain customers within this segment.
as by an increase in procurement gains. Street business has higher gross margins than Chain customers within this segment.
as by an increase in procurement gains. Street business has higher gross margins than Chain customers within this segment.
as by an increase in procurement gains. Street business has higher gross margins than Chain customers within this segment.

Operating expenses excluding depreciation and amortization for Performance Foodservice increased by $79.2 million, or 7.8%,
Operating expenses excluding depreciation and amortization for Performance Foodservice increased by $79.2 million, or 7.8%,
Operating expenses excluding depreciation and amortization for Performance Foodservice increased by $79.2 million, or 7.8%,
Operating expenses excluding depreciation and amortization for Performance Foodservice increased by $79.2 million, or 7.8%,
from fiscal 2015 to fiscal 2016. Operating expenses increased as a result of the extra week in fiscal 2016, an increase in case volume
from fiscal 2015 to fiscal 2016. Operating expenses increased as a result of the extra week in fiscal 2016, an increase in case volume
from fiscal 2015 to fiscal 2016. Operating expenses increased as a result of the extra week in fiscal 2016, an increase in case volume
from fiscal 2015 to fiscal 2016. Operating expenses increased as a result of the extra week in fiscal 2016, an increase in case volume
and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation.
and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation.
and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation.
and the resulting impact on variable operational and selling expenses, as well as cost of living and other increases in compensation.
These increases were partially offset by leverage on our fixed costs, improved productivity in our warehouse and transportation
These increases were partially offset by leverage on our fixed costs, improved productivity in our warehouse and transportation
These increases were partially offset by leverage on our fixed costs, improved productivity in our warehouse and transportation
These increases were partially offset by leverage on our fixed costs, improved productivity in our warehouse and transportation
operations, and a decrease in fuel expense. The Company estimates that operating expenses excluding depreciation and amortization
operations, and a decrease in fuel expense. The Company estimates that operating expenses excluding depreciation and amortization
operations, and a decrease in fuel expense. The Company estimates that operating expenses excluding depreciation and amortization
operations, and a decrease in fuel expense. The Company estimates that operating expenses excluding depreciation and amortization
were approximately $21.2 million in the 53rd week of fiscal 2016.
were approximately $21.2 million in the 53rd week of fiscal 2016.
were approximately $21.2 million in the 53rd week of fiscal 2016.
were approximately $21.2 million in the 53rd week of fiscal 2016.

35
35

Depreciation and amortization of intangible assets recorded in this segment decreased from $65.8 million in fiscal 2015 to $63.2

million in fiscal 2016, a decrease of 4.0%. These reductions were a result of a decrease in amortization of intangible assets since
certain intangibles are now fully amortized.

Fiscal year ended June 27, 2015 compared to fiscal year ended June 28, 2014

Net Sales

Net sales for Performance Foodservice increased 12.1%, or $981.2 million, to $9.1 billion from fiscal 2014 to fiscal 2015. This

increase in net sales was attributable primarily to securing new Street and Chain customers, further penetrating existing customers, and
inflation. Securing new and expanded business with Street customers resulted in Street sales growth of approximately 13% for fiscal
2015 compared to fiscal 2014. The balance of the total net sales increase was primarily attributable to growth in Chain customers.

EBITDA

EBITDA for Performance Foodservice increased $46.7 million, or 22.5%, from fiscal 2014 to fiscal 2015. This increase was the

result of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization.
Gross profit increased by 10.8% in fiscal 2015, compared to the prior fiscal year. The increase in gross profit is a result of increased
net sales from increased sales to Street customers. As a percentage of total segment sales, the business from Street customers remains
consistent at 43.4% for fiscal 2015 and fiscal 2014. Street business has higher gross margins than Chain customers within this
segment. Also, sales of Performance Brands, which have higher gross margins compared to other brands, increased by 15.2% in fiscal
2015.

Operating expenses excluding depreciation and amortization for Performance Foodservice increased by 8.1% from fiscal 2014
to fiscal 2015. Operating expenses increased as a result of an increase in case volume and the resulting impact on variable costs along
with an increase in bonus expense and increased investment in our Street sales force. In addition, our estimated withdrawal liability
was increased by $2.8 million during fiscal 2015 related to a multiemployer pension plan from which we had withdrawn during fiscal
2013. The estimated withdrawal liability for this multiemployer pension plan had increased by $0.4 million during fiscal 2014. These
increases were partially offset by a decrease in fuel expense.

Depreciation and amortization of intangible assets recorded in this segment decreased from $81.7 million in fiscal 2014 to $65.8

million in fiscal 2015, a decrease of 19.5%. This decrease was a result of less amortization in fiscal 2015 since certain intangibles are
now fully amortized.

Segment Results—PFG Customized

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

Net Sales

Net sales for PFG Customized increased $29.2 million, or 0.8%, from fiscal 2015 to fiscal 2016. The increase over this period
was the result of approximately $70.2 million of net sales in the 53rd week in fiscal 2016. Excluding the estimated impact of the 53rd
week in fiscal 2016, net sales would have decreased by an estimated $41.0 million, or 1.1%, from the prior year, driven by planned
exits of some customers to free up capacity for the addition of new business with Red Lobster in fiscal 2017, as well as a decrease in
case volume, which reflected trends among some customers in the casual dining channel.

EBITDA

EBITDA for PFG Customized decreased $2.4 million, or 6.6%, from fiscal 2015 to fiscal 2016. The decrease was primarily
attributable to a decrease in gross profit of $1.9 million, or 0.8% and an increase in operating expenses, excluding depreciation and
amortization. Gross profit for PFG Customized decreased primarily as a result of the planned decrease in case volume. The Company
estimates that gross profit was approximately $4.4 million for the extra week in fiscal 2016.

Operating expenses, excluding depreciation and amortization, increased by $0.5 million, or 0.2% in fiscal 2016, compared to the

prior year primarily because of $3.8 million of expense in the 53rd week in fiscal 2016. Excluding the estimated impact of the 53rd
week in fiscal 2016, operating expenses excluding depreciation and amortization would have decreased by an estimated $3.3 million,
or 1.6%, from the prior year, primarily because of lower case sales, productivity improvement, and a decrease in fuel expense,
partially offset by an increase in transportation wages, an increase in costs associated with upgrading a portion of the segment’s fleet,
and an increase in insurance expense.

Depreciation and amortization of intangible assets recorded in this segment decreased from $15.7 million in fiscal 2015 to $15.4

million in fiscal 2016, a decrease of 1.9%. The decrease is primarily a result of a decrease in amortization of intangible assets, since
certain intangibles are now fully amortized, partially offset by increases of depreciation in fixed assets.

Fiscal year ended June 27, 2015 compared to fiscal year ended June 28, 2014

Net Sales

Net sales for PFG Customized increased $451.9 million, or 13.7%, from fiscal 2015 to fiscal 2014. The increase in net sales

over this period was a result of an amended agreement with an existing customer, the addition of new customers, and inflation.

Based on an amendment to an agreement relating to a certain product, we now recognize the revenue for this product on a gross

basis because we now serve as the principal. Under the amended agreement, we will purchase the product and resell it to our
customer. Previously, the Company was only responsible to deliver the product that the customer had ordered from its vendor. This
factor accounted for approximately 10% of the total sales increase and continued to affect sales growth into the first quarter of fiscal
2016. This change has no effect on our case growth rates cited above.

EBITDA

EBITDA for PFG Customized decreased $1.0 million, or 2.7%, from $37.5 million in fiscal 2014 to $36.5 million in fiscal
2015. This decrease was primarily attributable to an increase in operating expenses excluding depreciation and amortization, partially
offset by an increase in gross profit. Gross profit for PFG Customized increased 0.9% from fiscal 2014 to fiscal 2015, primarily as a
result of increased sales from the addition of new customers during fiscal 2015.

Operating expenses, excluding depreciation and amortization, increased by 1.6% in fiscal 2015, compared to the prior year. The
increase in operating expenses was primarily because of higher case sales, an increase in personnel expenses, and allocated corporate
charges, partially offset by a decrease in fuel expense.

Depreciation and amortization of intangible assets recorded in this segment increased from $15.1 million for fiscal 2014 to

$15.7 million for fiscal 2015, an increase of 4.0%. Increases of depreciation in fixed assets were partially offset by decreases in
amortization of intangible assets.

Segment Results—Vistar

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

Net Sales

Net sales for Vistar increased $275.4 million, or 11.4%, from fiscal 2015 to fiscal 2016. This increase was driven by net sales of
approximately $54.1 million in the 53rd week in fiscal 2016, as well as case sales growth in the segment’s retail, theater, vending, and
hospitality channels and recent acquisitions.

EBITDA

EBITDA for Vistar increased $7.5 million, or 7.1%, from fiscal 2015 to fiscal 2016. This increase in EBITDA was the result of

gross profit dollar growth increasing faster than operating expense dollar growth, excluding depreciation and amortization. Gross
profit dollar growth of $29.6 million, or 9.1% for fiscal 2016 compared to fiscal 2015, was driven by gross profit of approximately
$7.0 million in the 53rd week in fiscal 2016 and an increase in the number of cases sold. These benefits were partially offset by a shift
toward higher cost to serve customers and by inflation-based inventory gains in the prior year.

Operating expense dollar growth, excluding depreciation and amortization, increased $22.1 million, or 10.0% for fiscal 2016.

Operating expenses increased primarily as a result of the 53rd week in fiscal 2016, an increase in the number of cases sold, investments
in additional sales force capacity and investments associated with expansion of geographies served in the dollar store channel and the
opening of a new facility, partially offset by a decrease in fuel expense. The Company estimates that operating expenses excluding
depreciation and amortization were approximately $4.9 million in the 53rd week of fiscal 2016.

Depreciation and amortization of intangible assets recorded in this segment increased from $16.4 million in fiscal 2015 to $18.2
million in fiscal 2016, an increase of 11.0%. Depreciation of fixed assets increased as a result of capital outlays to support our growth,
as well as recent acquisitions.

Fiscal year ended June 27, 2015 compared to fiscal year ended June 28, 2014

Net Sales

Net sales for Vistar increased 6.9%, or $157.1 million, from fiscal 2014 to fiscal 2015. This increase in sales related primarily to

an increase in sales to the segment’s retail, theater, vending, and hospitality channels and inflation.

EBITDA

EBITDA for Vistar increased $17.2 million, or 19.5%, from fiscal 2014 to fiscal 2015. This increase in EBITDA was the result

of an increase in gross profit, partially offset by an increase in operating expenses excluding depreciation and amortization. Gross
profit increased by 10.0% in fiscal 2015 compared to the prior year. The increase in gross profit relates primarily to increased sales,
the benefits of Winning Together and other programs, plus a change in the mix of business generated by the various channels within
the Vistar segment. Net sales from the theater, retail, and hospitality channels increased as a percentage of total Vistar net sales in
fiscal 2015 compared to fiscal 2014, while the percent of net sales from the vending channel declined as a percentage of total Vistar
net sales during the same time period. The theater, retail, and hospitality channels have higher gross margins than the vending channel
within this segment.

Operating expenses excluding depreciation and amortization increased 5.9% for fiscal 2015 compared to fiscal 2014. The
increase in operating expenses was primarily the result of higher case sales and a channel mix shift toward the theater, retail, and
hospitality channels, which cost more to serve, and an increase in bonus expense. These increases were partially offset by a decrease
in fuel expense. In addition, operating expenses for fiscal 2014 also included additional expenses related to a prior acquisition that
partially offset these increases.

Depreciation and amortization of intangible assets recorded in this segment increased from $13.8 million for fiscal 2014 to
$16.4 million for fiscal 2015, an increase of 18.8%. Increases of depreciation in fixed assets were partially offset by decreases in
amortization of intangible assets.

Segment Results—Corporate & All Other

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

Net Sales

Net sales for Corporate & All Other increased $28.9 million from fiscal 2015 to fiscal 2016. The increase in was primarily
attributable to net sales of approximately $4.4 million in the 53rd week of fiscal 2016 and an increase in logistics services provided to
our other segments.

EBITDA

EBITDA for Corporate & All Other was a negative $137.1 million for fiscal 2016 compared to a negative $92.6 million for
fiscal 2015. The decrease in EBITDA was primarily driven by a $16.0 million increase in equity compensation expense and a $5.5
million increase in bonus expense, along with higher corporate overhead associated with personnel costs related to compensation and
other personnel benefits of $10.5 million.

Depreciation and amortization of intangible assets recorded in this segment decreased from $23.4 million in fiscal 2015 to $21.8
million in fiscal 2016. The decrease was primarily a result of a decrease in amortization of intangible assets, since certain intangibles
are now fully amortized.

Fiscal year ended June 27, 2015 compared to fiscal year ended June 28, 2014

Net Sales

Net sales for Corporate & All Other increased $34.1 million from fiscal 2014 to fiscal 2015. The increase in sales was primarily

attributable to an increase in logistics services provided to our other segments.

EBITDA

EBITDA for Corporate & All Other was a negative $84.3 million for fiscal 2014 compared to a negative $92.6 million for fiscal

2015. The decrease in EBITDA was primarily driven by increased investment in headcount primarily associated with Winning
Together, higher corporate overhead associated with personnel costs related to benefits, and an increase in bonus expense, IT
expenses, and professional fees.

Depreciation and amortization of intangible assets recorded in this segment increased from $22.1 million in fiscal 2014 to $23.4
Depreciation and amortization of intangible assets recorded in this segment increased from $22.1 million in fiscal 2014 to $23.4
Depreciation and amortization of intangible assets recorded in this segment increased from $22.1 million in fiscal 2014 to $23.4
million in fiscal 2015. Increases in depreciation in fixed assets, primarily because of IT capital expenditures, were partially offset by a
million in fiscal 2015. Increases in depreciation in fixed assets, primarily because of IT capital expenditures, were partially offset by a
million in fiscal 2015. Increases in depreciation in fixed assets, primarily because of IT capital expenditures, were partially offset by a
decrease in amortization of intangible assets.
decrease in amortization of intangible assets.
decrease in amortization of intangible assets.

Quarterly Results and Seasonality

Historically, the food-away-from-home and foodservice distribution industries are seasonal, with lower profit in the first and

Historically, the food-away-from-home and foodservice distribution industries are seasonal, with lower profit in the first and
Historically, the food-away-from-home and foodservice distribution industries are seasonal, with lower profit in the first and
third quarters of each calendar year. Consequently, we typically experience lower operating profit during our first and third fiscal
third quarters of each calendar year. Consequently, we typically experience lower operating profit during our first and third fiscal
quarters, depending on the timing of acquisitions.
quarters, depending on the timing of acquisitions.

third quarters of each calendar year. Consequently, we typically experience lower operating profit during our first and third fiscal
quarters, depending on the timing of acquisitions.

Financial information for each quarter of fiscal 2016 and fiscal 2015 is set forth below:

Fiscal Year Ended July 2, 2016

(dollars in millions, except share and per share data)
(dollars in millions, except share and per share data)
(dollars in millions, except share and per share data)
Net sales............................................................................................. $
Net sales............................................................................................. $
Net sales............................................................................................. $
Cost of goods sold..............................................................................
Cost of goods sold..............................................................................
Cost of goods sold..............................................................................
Gross profit...............................................................................
Gross profit...............................................................................
Gross profit...............................................................................
Operating expenses ............................................................................
Operating expenses ............................................................................
Operating expenses ............................................................................
Operating profit ........................................................................
Operating profit ........................................................................
Operating profit ........................................................................
Other expense, net:
Interest expense ........................................................................
Interest expense ........................................................................
Interest expense ........................................................................
Other, net ..................................................................................
Other, net ..................................................................................
Other, net ..................................................................................
Other expense, net...........................................................
Other expense, net...........................................................
Other expense, net...........................................................
Income before taxes ...........................................................................
Income before taxes ...........................................................................
Income before taxes ...........................................................................
Income tax expense............................................................................
Income tax expense............................................................................
Income tax expense............................................................................
Net income ............................................................................... $
Net income ............................................................................... $

Net income ............................................................................... $

Other expense, net:

Weighted-average common shares outstanding:

Basic .........................................................................................
Diluted ......................................................................................

Weighted-average common shares outstanding:
Basic .........................................................................................
Diluted ......................................................................................
Earnings per common share:
Basic ......................................................................................... $
Diluted ...................................................................................... $

Basic ......................................................................................... $
Diluted ...................................................................................... $

Earnings per common share:

Q1
Q1
Q1
3,928.9 $
3,928.9 $
3,928.9 $
3,447.8
3,447.8
3,447.8
481.1
481.1
481.1
437.1
437.1
437.1
44.0
44.0
44.0

Q2
3,893.9 $
3,893.9 $
3,893.9 $
3,407.1
3,407.1
3,407.1
486.8
486.8
486.8
433.0
433.0
433.0
53.8
53.8
53.8

Q3
3,909.1 $
3,909.1 $
3,909.1 $
3,428.3
3,428.3
3,428.3
480.8
480.8
480.8
443.2
443.2
443.2
37.6
37.6
37.6

Q4
Q4
4,372.9
4,372.9
4,372.9
3,811.6
3,811.6
3,811.6
561.3
561.3
561.3
494.5
494.5
494.5
66.8
66.8
66.8

21.0
21.0
21.0
2.2
2.2
2.2
23.2
23.2
23.2
20.8
20.8
20.8
8.6
8.6
8.6
12.2 $
12.2 $
12.2 $

23.3
23.3
23.3
1.0
1.0
1.0
24.3
24.3
24.3
29.5
29.5
29.5
12.0
12.0
12.0
17.5 $
17.5 $
17.5 $

21.6
21.6
21.6
0.5
0.5
0.5
22.1
22.1
22.1
15.5
15.5
15.5
6.1
6.1
6.1
9.4 $
9.4 $
9.4 $

18.0
0.1
18.1
48.7
19.5
29.2

86,885,548
87,653,160

99,107,828
100,367,528

99,698,267
101,360,286

99,833,658
101,839,515

0.14 $
0.14 $

0.18 $
0.17 $

0.09 $
0.09 $

0.29
0.29

Fiscal Year Ended June 27, 2015

(dollars in millions, except share and per share data)

Net sales......................................................................................... $
Cost of goods sold..........................................................................

Gross profit...........................................................................
Operating expenses ........................................................................

Operating profit ....................................................................

Other expense, net:

Interest expense ....................................................................
Other, net..............................................................................

Other expense, net.......................................................

Income before taxes .......................................................................
Income tax expense........................................................................

Q1
3,697.6 $
3,248.2

Q2
3,792.5 $
3,335.2

Q3
3,795.5 $
3,343.9

449.4
416.7

32.7

21.2
0.2

21.4

11.3
4.7

457.3
410.2

47.1

21.8
2.7

24.5

22.6
9.8

451.6
424.5

27.1

21.6
0.3

21.9

5.2
2.3

Net income ........................................................................... $

6.6 $

12.8 $

2.9 $

Q4
3,984.4
3,494.4

490.0
436.8

53.2

21.1
(25.4)

(4.3)

57.5
23.3

34.2

Weighted-average common shares outstanding:

Basic.....................................................................................
Diluted..................................................................................

86,874,101
87,600,174

86,874,101
87,637,135

86,874,101
87,706,396

86,876,606
87,637,541

Earnings per common share:

Basic..................................................................................... $
Diluted.................................................................................. $

0.08 $
0.08 $

0.15 $
0.15 $

0.03 $
0.03 $

0.39
0.39

Liquidity and Capital Resources

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit

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

At July 2, 2016, our cash balance totaled $10.9 million, while our cash balance totaled $9.2 million at June 27, 2015. This
increase in cash during fiscal 2016 was attributable to net cash provided by operating activities of $234.9 million, partially offset by
net cash used in investing activities of $157.6 million and financing activities of $75.6 million. We borrow under our Second
Amended and Restated Credit Agreement (the “ABL Facility”) or pay it down regularly based on our cash flows from operating and
investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.

As market conditions warrant, we and our major stockholders, including our Sponsors, may from time to time, depending upon

market conditions, seek to repurchase our securities or loans in privately negotiated or open market transactions, by tender offer or
otherwise.

On October 6, 2015, we completed our IPO of 16,675,000 shares of common stock for an offering price of $19.00 per share

($17.955 per share net of underwriting discounts), including the exercise in full by the underwriters of their option to purchase
additional shares. We sold an aggregate of 12,777,325 shares of such common stock and certain selling stockholders sold 3,897,675
shares. The aggregate offering price of the amount of newly issued common stock was $242.8 million. In connection with the offering,
we paid the underwriters a discount of $1.045 per share, for a total underwriting discount of $13.4 million. In addition, we incurred
direct offering expenses consisting of legal, accounting, and printing costs of $5.8 million in connection with the IPO, of which
$3.0 million was paid during fiscal 2016. We used the net offering proceeds to us after deducting the underwriting discount and our
direct offering expenses to repay $223.0 million aggregate principal amount of indebtedness under a Credit Agreement providing for a
term loan facility (the “Term Facility”). We used the remainder of the net proceeds for general corporate purposes.

On February 1, 2016, Performance Food Group, Inc. amended and restated the ABL Facility to increase the borrowing capacity

from $1.4 billion to $1.6 billion, lower interest rates for LIBOR based loans, extend the maturity from May 2017 to February 2021,

and modify triggers and provisions related to certain reporting, financial, and negative covenants. The total size of the facility
immediately increased the effective borrowing capacity under the ABL Facility since borrowing base assets exceeded the facility size
prior to the amendment. Approximately $6.8 million of fees and expenses have been incurred for the amendment, which were
included as deferred financing costs and will be amortized over the remaining term of the ABL Facility. Of this amount, $6.6 million
was paid during fiscal 2016. In connection with the closing of this amendment, Performance Food Group, Inc. borrowed $200.0
million under the ABL Facility and used the proceeds to repay $200.0 million aggregate principal amount of loans under the Term
Loan Facility.

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of its 5.500%

Senior Notes due 2024 (the “Notes”), pursuant to an indenture dated as of May 17, 2016, that is jointly and severally guaranteed by
PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other
excluded subsidiaries). The proceeds from the Notes were used to pay in full the remaining outstanding $306.4 million aggregate
principal amount of loans under the Term Facility and to terminate the Term 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. A
portion of the Notes was considered a modification of the Term Facility. Approximately $7.2 million of fees and expenses have been
incurred and paid during fiscal 2016 in connection with the Notes. Of the amount of fees incurred, $2.5 was included as deferred
financing costs and will be amortized over the remaining term of the Notes, $2.1 million was included in loss on extinguishment of
debt within interest expense related to the portion of the Term Facility repayment deemed an extinguishment, and $2.6 million was
recorded to Operating expenses for the portion of the Term Facility deemed a modification.

Operating Activities

Fiscal year ended July 2, 2016 compared to fiscal year ended June 27, 2015

During fiscal 2016 and fiscal 2015, our operating activities provided cash flow of $234.9 million and $127.4 million,

respectively.

The increase in cash flows provided by operating activities for fiscal 2016 compared to fiscal 2015 was largely driven by lower

net working capital investment compared to the prior period.

Fiscal year ended June 27, 2015 compared to the fiscal year ended June 28, 2014

During fiscal 2015, our operating activities provided cash flow of $127.4 million, while during fiscal 2014 our operating

activities provided cash flow of $119.7 million, an increase of $7.7 million, or 6.4%.

The increase in cash flows provided by operating activities in fiscal 2015 compared to fiscal 2014 was largely because of the

continued growth in our business. This was partially offset by an increase in our net working capital investment from the prior period
and a decrease in cash provided by accrued expenses and other liabilities that was primarily associated with higher bonus payments
made during fiscal 2015.

Investing Activities

Cash used in investing activities totaled $157.6 million is fiscal 2016 compared to $100.7 million in fiscal 2015 and $93.4
million in fiscal 2014. These investments consisted primarily of capital purchases of property, plant, and equipment of $119.7 million,
$98.6 million and $90.6 million for fiscal years 2016, 2015 and 2014, respectively, and payments for business acquisitions of $39.0
million, $0.4 million and $0.9 million for fiscal years 2016, 2015 and 2014, respectively. In fiscal 2016, purchases of property, plant,
and equipment primarily consisted of transportation and information technology equipment, as well as outlays for warehouse
expansions and improvements.

The following table presents the capital purchases of property, plant, and equipment by segment:

(Dollars in millions)

Fiscal Year Ended

July 2, 2016

June 27, 2015

Performance Foodservice................................................................................................ $
PFG Customized .............................................................................................................
Vistar...............................................................................................................................
Corporate & All Other ....................................................................................................

67.5 $
8.2
13.4
30.6

Total capital purchases of property, plant and equipment............................................... $

119.7 $

41.8 $
7.8
14.5
34.5

98.6 $

June 28, 2014
38.8
12.2
20.7
18.9

90.6

As of July 2, 2016, the Company had commitments of $22.9 million for capital projects related to warehouse expansion and
improvements. The Company anticipates using borrowings from the ABL Facility and lease financing to fulfill these commitments.

Financing Activities

During fiscal 2016, net cash used in financing activities was $75.6 million, which consisted primarily of payments of $736.9
million on our Term Loan Facility, partially offset by $350.0 million in proceeds from the issuance of Notes, $226.4 million in net
proceeds from our initial public offering and $99.3 million in net proceeds under our ABL Facility.

During fiscal 2015, our financing activities used cash flow of $22.8 million, which consisted primarily of $13.9 million in net

payments on our ABL Facility, $7.5 million in payments on our Term Loan Facility, and $3.1 million in payments on our capital and
finance lease obligations, partially offset by $3.5 million in proceeds from our sale-leaseback transaction.

During fiscal 2014, our financing activities used cash flow of $35.1 million, which consisted primarily of $21.2 million in net

payments on our ABL Facility, $5.6 million in payments on our Term Loan Facility, $2.8 million in payments related to acquisitions,
and $1.8 million in payments on financed property, plant, and equipment.

The following describes our financing arrangements as of July 2, 2016:

ABL Facility: PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, is a party to the ABL Facility dated February

1, 2016. The ABL Facility is secured by the majority of the tangible assets of PFGC and its subsidiaries. Performance Food Group,
Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the ABL Facility, which is jointly and severally guaranteed by
PFGC and all material domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and
other excluded subsidiaries). Availability for loans and letters of credit under the ABL Facility is governed by a borrowing base,
determined by the application of specified advance rates against eligible assets, including trade accounts receivable, inventory, owned
real properties, and owned transportation equipment. The borrowing base is reduced quarterly by a cumulative fraction of the real
properties and transportation equipment values. Advances on accounts receivable and inventory are subject to change based on
periodic commercial finance examinations and appraisals, and the real property and transportation equipment values included in the
borrowing base are subject to change based on periodic appraisals. Audits and appraisals are conducted at the direction of the
administrative agent for the benefit and on behalf of all lenders.

On February 1, 2016, Performance Food Group, Inc. amended and restated the ABL Facility to increase the borrowing capacity

from $1.4 billion to $1.6 billion, lower interest rates for LIBOR based loans, extend the maturity from May 2017 to February 2021,
and modify triggers and provisions related to certain reporting, financial, and negative covenants. The total size of the facility
immediately increased the effective borrowing capacity under the ABL Facility since borrowing base assets exceeded the facility size
prior to the amendment. Approximately $6.8 million of fees and expenses have been incurred for the amendment, which were
included as deferred financing costs and will be amortized over the remaining term of the ABL Facility. Of this amount, $6.6 million
was paid during fiscal 2016. In connection with the closing of this amendment, Performance Food Group, Inc. borrowed $200.0
million under the ABL Facility and used the proceeds to repay $200.0 million aggregate principal amount of loans under the Term
Facility.

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the

greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus
1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee ranging from 0.25%
to 0.375%.

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

(Dollars in millions)
(Dollars in millions)

As of
As of
July 2, 2016
July 2, 2016

As of
As of
June 27, 2015
June 27, 2015

Aggregate borrowings...................................................................................................................... $
Aggregate borrowings...................................................................................................................... $
Letters of credit................................................................................................................................
Letters of credit................................................................................................................................
Excess availability, net of lenders’ reserves of $20.9 and $19.7......................................................
Excess availability, net of lenders’ reserves of $20.9 and $19.7......................................................
Average interest rate ........................................................................................................................
Average interest rate ........................................................................................................................

$
$

765.0
765.0
97.7
97.7
725.5
725.5

1.87%
1.87%

665.7
665.7
102.5
102.5
631.8
631.8

1.94%
1.94%

The ABL Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if
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) $130.0 million and (ii) 10% of the lesser of the borrowing base and the revolving
excess availability falls below the greater of (i) $130.0 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,
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
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
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
cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under such agreement may
be accelerated and the rights and remedies of the lenders under such agreement available under the ABL Facility may be exercised,
be accelerated and the rights and remedies of the lenders under such agreement available under the ABL Facility may be exercised,
including rights with respect to the collateral securing the obligations under such agreement.
including rights with respect to the collateral securing the obligations under such agreement.

Term Loan Facility: Performance Food Group, Inc. entered into the Term Facility on May 14, 2013. Performance Food Group,
Term Loan Facility: Performance Food Group, Inc. entered into the Term Facility on May 14, 2013. Performance Food Group,

Inc. borrowed an aggregate principal amount of $750.0 million under the Term Facility that is jointly and severally guaranteed by
Inc. borrowed an aggregate principal amount of $750.0 million under the Term Facility that is jointly and severally guaranteed by
PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other
PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other
excluded subsidiaries). Net proceeds to Performance Food Group, Inc. were $746.3 million. The proceeds from the Term Facility were
excluded subsidiaries). Net proceeds to Performance Food Group, Inc. were $746.3 million. The proceeds from the Term Facility were
used to redeem the Company’s then outstanding senior notes in full; to pay the fees, premiums, expenses, and other transaction costs
used to redeem the Company’s then outstanding senior notes in full; to pay the fees, premiums, expenses, and other transaction costs
incurred in connection with the Term Facility and a previous ABL Facility amendment; and to pay a $220 million dividend to the
incurred in connection with the Term Facility and a previous ABL Facility amendment; and to pay a $220 million dividend to the
Company’s stockholders. A portion of the Term Facility was considered a modification of the senior notes.
Company’s stockholders. A portion of the Term Facility was considered a modification of the senior notes.

On October 6, 2015, the Company completed its IPO and used the net proceeds therefrom to repay $223.0 million aggregate
On October 6, 2015, the Company completed its IPO and used the net proceeds therefrom to repay $223.0 million aggregate

principal amount of indebtedness under the Term Facility. On February 1, 2016, Performance Food Group, Inc. amended and restated
principal amount of indebtedness under the Term Facility. On February 1, 2016, Performance Food Group, Inc. amended and restated
the ABL Facility as described above. In connection with the closing of this amendment, Performance Food Group, Inc. borrowed
the ABL Facility as described above. In connection with the closing of this amendment, Performance Food Group, Inc. borrowed
$200.0 million under the ABL Facility and used the proceeds to repay $200.0 million aggregate principal amount of loans under the
$200.0 million under the ABL Facility and used the proceeds to repay $200.0 million aggregate principal amount of loans under the
Term Facility. Fiscal 2016 includes $5.5 million of accelerated amortization of original issue discount and deferred financing costs
Term Facility. Fiscal 2016 includes $5.5 million of accelerated amortization of original issue discount and deferred financing costs
because of the repayment of $223.0 million aggregate principal amount of indebtedness mentioned above. Additionally, the Company
because of the repayment of $223.0 million aggregate principal amount of indebtedness mentioned above. Additionally, the Company
recognized a $5.8 million loss on extinguishment within interest expense during the third quarter of fiscal 2016, related to the write-off
recognized a $5.8 million loss on extinguishment within interest expense during the third quarter of fiscal 2016, related to the write-off
of unamortized original issue discount and deferred financing costs on the Term Facility, because of the repayment of $200.0 million
of unamortized original issue discount and deferred financing costs on the Term Facility, because of the repayment of $200.0 million
aggregate principal amount of indebtedness mentioned above.
aggregate principal amount of indebtedness mentioned above.

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of Notes described
On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of Notes described

below and used a portion of the proceeds to repay in full the remaining outstanding $306.4 million aggregate principal amount of
below and used a portion of the proceeds to repay in full the remaining outstanding $306.4 million aggregate principal amount of
loans under the Term Facility and to terminate the Term Facility, bringing the total payment amount to $736.9 million for fiscal 2016.
loans under the Term Facility and to terminate the Term Facility, bringing the total payment amount to $736.9 million for fiscal 2016.
A portion of this repayment was considered an extinguishment, resulting in a $3.6 million loss on extinguishment of debt within
A portion of this repayment was considered an extinguishment, resulting in a $3.6 million loss on extinguishment of debt within
interest expense, which is comprised of $2.1 million of fees paid and $1.5 million related to the write-off the pro-rata portion of the
interest expense, which is comprised of $2.1 million of fees paid and $1.5 million related to the write-off the pro-rata portion of the
unamortized original issue discount and deferred financing costs related to the debt extinguishment. A significant portion of this
unamortized original issue discount and deferred financing costs related to the debt extinguishment. A significant portion of this
redemption was considered a modification in accordance with FASB ASC 470-50, Debt-Modifications and Extinguishments, and as a
redemption was considered a modification in accordance with FASB ASC 470-50, Debt-Modifications and Extinguishments, and as a
result, $0.7 million of unamortized original issue discount for the Term Facility was deferred as original issue discount of the Notes
result, $0.7 million of unamortized original issue discount for the Term Facility was deferred as original issue discount of the Notes
and $5.7 million of unamortized deferred financing costs for the Term Facility was deferred as deferred financing costs of the Notes.
and $5.7 million of unamortized deferred financing costs for the Term Facility was deferred as deferred financing costs of the Notes.

Interest expense related to the amortization of deferred financing costs and original issue discount for the Term Facility was as
Interest expense related to the amortization of deferred financing costs and original issue discount for the Term Facility was as

follows:
follows:

(In millions)
(In millions)

For the fiscal years ended
For the fiscal years ended

July 2, 2016
July 2, 2016

June 27, 2015
June 27, 2015

June 28, 2014
June 28, 2014

Deferred financing costs amortization........................................ $
Deferred financing costs amortization........................................ $
Original issue discount amortization ..........................................
Original issue discount amortization ..........................................

Total amortization included in interest expense................ $
Total amortization included in interest expense................ $

14.2 $
14.2 $
1.8
1.8

16.0 $
16.0 $

4.5 $
4.5 $
0.6
0.6

5.1 $
5.1 $

4.5
4.5
0.6
0.6

5.1
5.1

Senior Notes: On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of
Senior Notes: On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of

Notes, pursuant to an indenture dated as of May 17, 2016, that is jointly and severally guaranteed by PFGC and all domestic direct and
Notes, pursuant to an indenture dated as of May 17, 2016, that is jointly and severally guaranteed by PFGC and all domestic direct and
43
43

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

(Dollars in millions)

As of

July 2, 2016

As of

June 27, 2015

Aggregate borrowings...................................................................................................................... $

Letters of credit................................................................................................................................

Excess availability, net of lenders’ reserves of $20.9 and $19.7......................................................

Average interest rate ........................................................................................................................

765.0

97.7

725.5

1.87%

665.7

102.5

631.8

1.94%

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) $130.0 million and (ii) 10% of the lesser of the borrowing base and the revolving

credit facility amount for five consecutive business days. The ABL Facility also contains customary restrictive covenants that include,

but are not limited to, restrictions on PFGC’s ability to incur additional indebtedness, pay dividends, create liens, make investments or

specified payments, and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and

cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under such agreement may

be accelerated and the rights and remedies of the lenders under such agreement available under the ABL Facility may be exercised,

including rights with respect to the collateral securing the obligations under such agreement.

Term Loan Facility: Performance Food Group, Inc. entered into the Term Facility on May 14, 2013. Performance Food Group,

Inc. borrowed an aggregate principal amount of $750.0 million under the Term Facility that is jointly and severally guaranteed by

PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other

excluded subsidiaries). Net proceeds to Performance Food Group, Inc. were $746.3 million. The proceeds from the Term Facility were

used to redeem the Company’s then outstanding senior notes in full; to pay the fees, premiums, expenses, and other transaction costs

incurred in connection with the Term Facility and a previous ABL Facility amendment; and to pay a $220 million dividend to the

Company’s stockholders. A portion of the Term Facility was considered a modification of the senior notes.

On October 6, 2015, the Company completed its IPO and used the net proceeds therefrom to repay $223.0 million aggregate

principal amount of indebtedness under the Term Facility. On February 1, 2016, Performance Food Group, Inc. amended and restated

the ABL Facility as described above. In connection with the closing of this amendment, Performance Food Group, Inc. borrowed

$200.0 million under the ABL Facility and used the proceeds to repay $200.0 million aggregate principal amount of loans under the

Term Facility. Fiscal 2016 includes $5.5 million of accelerated amortization of original issue discount and deferred financing costs

because of the repayment of $223.0 million aggregate principal amount of indebtedness mentioned above. Additionally, the Company

recognized a $5.8 million loss on extinguishment within interest expense during the third quarter of fiscal 2016, related to the write-off

of unamortized original issue discount and deferred financing costs on the Term Facility, because of the repayment of $200.0 million

aggregate principal amount of indebtedness mentioned above.

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of Notes described

below and used a portion of the proceeds to repay in full the remaining outstanding $306.4 million aggregate principal amount of

loans under the Term Facility and to terminate the Term Facility, bringing the total payment amount to $736.9 million for fiscal 2016.

A portion of this repayment was considered an extinguishment, resulting in a $3.6 million loss on extinguishment of debt within

interest expense, which is comprised of $2.1 million of fees paid and $1.5 million related to the write-off the pro-rata portion of the

unamortized original issue discount and deferred financing costs related to the debt extinguishment. A significant portion of this

redemption was considered a modification in accordance with FASB ASC 470-50, Debt-Modifications and Extinguishments, and as a

result, $0.7 million of unamortized original issue discount for the Term Facility was deferred as original issue discount of the Notes

and $5.7 million of unamortized deferred financing costs for the Term Facility was deferred as deferred financing costs of the Notes.

Interest expense related to the amortization of deferred financing costs and original issue discount for the Term Facility was as

follows:

(In millions)

Deferred financing costs amortization........................................ $

Original issue discount amortization ..........................................

Total amortization included in interest expense................ $

14.2 $

1.8

16.0 $

4.5 $

0.6

5.1 $

4.5

0.6

5.1

For the fiscal years ended

July 2, 2016

June 27, 2015

June 28, 2014

Senior Notes: On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount of

Notes, pursuant to an indenture dated as of May 17, 2016, that is jointly and severally guaranteed by PFGC and all domestic direct and
indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The proceeds
43
from the Notes were used to pay in full the remaining outstanding $306.4 million aggregate principal amount of loans under the Term
Facility and to terminate the Term 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. A portion of the Notes was considered a
modification of the Term Facility. Approximately $7.2 million of fees and expenses were incurred and paid during fiscal 2016 in
connection with the Notes. Of the amount of fees incurred, $2.5 was included as deferred financing costs and will be amortized over
the remaining term of the Notes, $2.1 million was included in loss on extinguishment of debt within interest expense related to the
portion of the Term Facility repayment deemed an extinguishment, and $2.6 million was recorded to Operating expenses for the
portion of the Term Facility deemed a modification.

The Notes were issued at 100.0% of their par value. The Notes mature on June 1, 2024 and bear interest at a rate of 5.5% per

year, payable semi-annually in arrears. Performance Food Group, Inc.’s obligations under the Notes are guaranteed on a senior
unsecured basis by all of Performance Food Group, Inc.’s existing and future material wholly-owned domestic restricted subsidiaries
to the extent such subsidiaries guarantee indebtedness under the ABL Facility, and other future capital markets debt securities or
certain other indebtedness incurred under credit facilities for Performance Food Group, Inc. The Notes are not guaranteed by
Performance Food Group Company.

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

The indenture governing the Notes contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability

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

As of July 2, 2016, the outstanding aggregate principal amount of the Notes was $350.0 million with unamortized original issue

discount of $0.7 million and unamortized deferred financing costs of $8.1 million. For fiscal 2016, interest expense included $0.1
million related to the amortization of original interest discount and deferred financing costs.

The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net

assets of PFGC and its subsidiaries are restricted from distribution to Performance Food Group Company, except for approximately
$390.0 million of restricted payment capacity available under such debt agreements, as of July 2, 2016.

As of July 2, 2016, we were in compliance with all of the covenants under the ABL Facility and Notes.

Unsecured Subordinated Promissory Note. In connection with an acquisition, Performance Food Group, Inc. issued a $6.0
million interest only, unsecured subordinated promissory note on December 21, 2012, bearing an interest rate of 3.5%. Interest is
payable quarterly in arrears. The $6.0 million principal is due in a lump sum in December 2017. All amounts outstanding under this
promissory note become immediately due and payable upon the occurrence of a change in control of the Company or PFGC, which
includes the sale, lease, or transfer of all or substantially all of the assets of PFGC. This promissory note was initially recorded at its
fair value of $4.2 million. The difference between the principal and the initial fair value of the promissory note is being amortized as
additional interest expense on a straight-line basis over the life of the promissory note, which approximates the effective yield method.
For fiscal 2016, 2015 and 2014, interest expense each year included $0.4 million related to this amortization. As of July 2, 2016, the
carrying value of the promissory note was $5.5 million.

Contractual Cash Obligations

44
44

indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The proceeds

from the Notes were used to pay in full the remaining outstanding $306.4 million aggregate principal amount of loans under the Term

Facility and to terminate the Term 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. A portion of the Notes was considered a

modification of the Term Facility. Approximately $7.2 million of fees and expenses were incurred and paid during fiscal 2016 in

connection with the Notes. Of the amount of fees incurred, $2.5 was included as deferred financing costs and will be amortized over

the remaining term of the Notes, $2.1 million was included in loss on extinguishment of debt within interest expense related to the

portion of the Term Facility repayment deemed an extinguishment, and $2.6 million was recorded to Operating expenses for the

portion of the Term Facility deemed a modification.

The Notes were issued at 100.0% of their par value. The Notes mature on June 1, 2024 and bear interest at a rate of 5.5% per

year, payable semi-annually in arrears. Performance Food Group, Inc.’s obligations under the Notes are guaranteed on a senior

unsecured basis by all of Performance Food Group, Inc.’s existing and future material wholly-owned domestic restricted subsidiaries

to the extent such subsidiaries guarantee indebtedness under the ABL Facility, and other future capital markets debt securities or

certain other indebtedness incurred under credit facilities for Performance Food Group, Inc. The Notes are not guaranteed by

Performance Food Group Company.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food

Group, Inc. does not apply the proceeds as required, the holders of the Notes will have the right to require Performance Food Group,

Inc. to make an offer to repurchase each holder’s Notes at a price equal to 101% (in the case of a change of control triggering event) or

100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may

redeem all or a part of the Notes at any time prior to June 1, 2019 at a redemption price equal to 100% of the principal amount of the

Notes being redeemed plus a make-whole premium and accrued and unpaid interest, if any. In addition, beginning on June 1, 2019,

Performance Food Group, Inc. may redeem all or a part of the Notes at a redemption price equal to 102.750% of the principal amount

redeemed. The redemption price decreases to 101.325% and 100.000% of the principal amount redeemed on June 1, 2020 and June 1,

2021, respectively. In addition, at any time prior to June 1, 2019, Performance Food Group, Inc. may redeem up to 40% of the Notes

from the proceeds of certain equity offerings at a redemption price equal to 105.500% of the principal amount thereof, plus accrued

and unpaid interest.

The indenture governing the Notes contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability

to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or

redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate,

merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted

subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer

or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes also contain

customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes to become or be

declared due and payable.

As of July 2, 2016, the outstanding aggregate principal amount of the Notes was $350.0 million with unamortized original issue

discount of $0.7 million and unamortized deferred financing costs of $8.1 million. For fiscal 2016, interest expense included $0.1

million related to the amortization of original interest discount and deferred financing costs.

The ABL Facility and the indenture governing the Notes contain customary restrictive covenants under which all of the net

assets of PFGC and its subsidiaries are restricted from distribution to Performance Food Group Company, except for approximately

$390.0 million of restricted payment capacity available under such debt agreements, as of July 2, 2016.

As of July 2, 2016, we were in compliance with all of the covenants under the ABL Facility and Notes.

Unsecured Subordinated Promissory Note. In connection with an acquisition, Performance Food Group, Inc. issued a $6.0

million interest only, unsecured subordinated promissory note on December 21, 2012, bearing an interest rate of 3.5%. Interest is

payable quarterly in arrears. The $6.0 million principal is due in a lump sum in December 2017. All amounts outstanding under this

promissory note become immediately due and payable upon the occurrence of a change in control of the Company or PFGC, which

includes the sale, lease, or transfer of all or substantially all of the assets of PFGC. This promissory note was initially recorded at its

fair value of $4.2 million. The difference between the principal and the initial fair value of the promissory note is being amortized as

additional interest expense on a straight-line basis over the life of the promissory note, which approximates the effective yield method.
For fiscal 2016, 2015 and 2014, interest expense each year included $0.4 million related to this amortization. As of July 2, 2016, the
carrying value of the promissory note was $5.5 million.

Contractual Cash Obligations

The following table sets forth our significant contractual cash obligations as of July 2, 2016. The years below represent our

fiscal years.

(Dollars in millions)
Long-term debt ...................................................................................... $
Capital and finance lease obligations(1) ................................................
Property, plant, and equipment, financed...............................................
Unrecognized tax benefits and interest(2)..............................................
Interest payments related to long-term debt(3) ......................................
Long-term operating leases....................................................................
Purchase obligations(4)..........................................................................
Multiemployer pension plan(5)..............................................................
Total contractual cash obligations.......................................................... $

Payments Due by Period

Less than
1 Year

Total
1,121.0 $ — $

50.5
1.0
0.5
245.3
451.2
31.4
5.8
1,906.7 $

4.7
1.0
—
39.5
87.6
27.6
0.3
160.7 $

1-3 Years

3-5 Years

More than
5 Years

6.0 $
9.4
—
—
78.7
156.0
2.6
0.7
253.4 $

765.0 $
6.0
—
—
71.1
106.8
1.2
0.7
950.8 $

350.0
30.4
—
—
56.0
100.8
—
4.1
541.3

The amounts reflected in the table include the interest component of the lease payments.

(1)
(2) Unrecognized tax benefits relate to uncertain tax positions recorded under accounting standards related to uncertain tax

(3)

positions. As of July 2, 2016, we had a liability of $0.4 million for unrecognized tax benefits for all tax jurisdictions and less
than $0.1 million for related interest that could result in cash payments. We are not able to reasonably estimate the timing of
payments of the amount by which the liability will increase or decrease over time. Accordingly, the related balances have not
been reflected in “Payments Due by Period” section of the table.
Includes payments on our floating rate debt based on rates as of July 2, 2016, assuming the amount remains unchanged until
maturity. The impact of our outstanding floating-to-fixed interest rate swap on the floating rate debt interest payments is
included as well based on the floating rates in effect as of July 2, 2016.
For purposes of this table, purchase obligations include agreements for purchases related to capital projects and services in the
normal course of business, for which all significant terms have been confirmed. The amounts included above are based on
estimates. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be
completed in the coming year, as well a minimum amounts due for various Company meetings and conferences.
(5) Represents the voluntary withdrawal liability recorded related to the withdrawal from the Central States Southeast and

(4)

Southwest Areas Pension Fund (“Central States Pension Fund”) and excludes normal contributions required under our collective
bargaining agreements. See Note 15 Commitments and Contingencies to our audited consolidated financial statements included
in Item 8. Financial Statements and Supplementary Data for further discussion.

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 discussed below exclude intercompany receivables between segments.

Total Assets by Segment

Total assets for Performance Foodservice increased $49.4 million from $1,915.7 million as of June 27, 2015 to $1,965.1 million

as of July 2, 2016. During this time periods, this segment increased its accounts receivable, inventory, and property, plant, and
equipment, which was partially offset by a decrease in the balance of intangible assets.

Total assets for PFG Customized decreased $23.6 million from $649.8 million as of June 27, 2015 to $626.2 million as of
July 2, 2016. During this time period, this segment decreased its accounts receivable, inventory, property, plant, and equipment, and
intangible assets.

Total assets for Vistar increased $97.0 million from $539.2 million as of June 27, 2015 to $636.2 million as of July 2, 2016.
During this time period, this segment increased its accounts receivable, inventory, and property, plant, and equipment. In addition,
goodwill and intangible assets increased primarily as a result of recent acquisitions.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that are most important to portraying our financial position and results of

operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of
matters that are inherently uncertain. Our most critical accounting policies and estimates include those that pertain to the allowance for
doubtful accounts receivable, inventory valuation, insurance programs, income taxes, vendor rebates and promotional incentives, and
goodwill and other intangible assets.

Accounts Receivable

Accounts receivable are primarily comprised of trade receivables from customers in the ordinary course of business, are
recorded at the invoiced amount, and primarily do not bear interest. Receivables are recorded net of the allowance for doubtful
accounts on the accompanying consolidated balance sheets. We evaluate the collectability of our accounts receivable based on a
combination of factors. We regularly analyze our significant customer accounts, and when we become aware of a specific customer’s
inability to meet its financial obligations to us, such as a bankruptcy filing or a deterioration in the customer’s operating results or
financial position, we record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is
collectible. We also record reserves for bad debt for other customers based on a variety of factors, including the length of time the
receivables are past due, macroeconomic considerations, and historical experience. If circumstances related to specific customers
change, our estimates of the recoverability of receivables could be further adjusted.

Inventory Valuation

Our inventories consist primarily of food and non-food products. We primarily value inventories at the lower of cost or market

using the first-in, first-out (“FIFO”) method. FIFO was used for approximately 92% of total inventories at July 2, 2016. The remainder
of the inventory was valued using the last-in, first-out (“LIFO”) method using the link chain technique of the dollar value method. We
adjust our inventory balances for slow-moving, excess, and obsolete inventories. These adjustments are based upon inventory
category, inventory age, specifically identified items, and overall economic conditions.

Insurance Programs

We maintain high-deductible insurance programs covering portions of general and vehicle liability and workers’ compensation.

The amounts in excess of the deductibles are insured by third-party insurance carriers, subject to certain limitations and exclusions.
We also maintain self-funded group medical insurance. We accrue our estimated liability for these deductibles, including an estimate
for incurred but not reported claims, based on known claims and past claims history. The estimated short-term portion of these
accruals is included in Accrued expenses on our consolidated balance sheets, while the estimated long-term portion of the accruals is
included in Other long-term liabilities. The provisions for insurance claims include estimates of the frequency and timing of claims
occurrence, as well as the ultimate amounts to be paid. These insurance programs are managed by a third party, and the deductibles for
general and vehicle liability and workers compensation are collateralized by letters of credit and restricted cash.

Income Taxes

We follow FASB ASC 740-10, Income Taxes—Overall, which requires the use of the asset and liability method of accounting

for deferred income taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the tax bases of assets and liabilities and their reported amounts. Future tax benefits, including net operating loss
carry-forwards, are recognized to the extent that realization of such benefits is more likely than not. Uncertain tax positions are
reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits,
developments in case law, and closing of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate.

Vendor Rebates and Other Promotional Incentives

We participate in various rebate and promotional incentives with our suppliers, either unilaterally or in combination with
purchasing cooperatives and other procurement partners, that consist primarily of volume and growth rebates, annual and multi-year
incentives, and promotional programs. Consideration received under these incentives is generally recorded as a reduction of cost of
goods sold. However, in certain limited circumstances the consideration is recorded as a reduction of costs incurred by us.
Consideration received may be in the form of cash and/or invoice deductions. Changes in the estimated amount of incentives to be
received are treated as changes in estimates and are recognized in the period of change.

Consideration received for volume and growth rebates, annual incentives, and multi-year incentives are recorded as a reduction

of cost of goods sold. We systematically and rationally allocate the consideration for these incentives to each of the underlying

transactions that results in progress by the Company toward earning the incentives. If the incentives are not probable and reasonably
estimable, we record the incentives as the underlying objectives or milestones are achieved. We record annual and multi-year
incentives when earned, generally over the agreement period. We use current and historical purchasing data, forecasted purchasing
volumes, and other factors in estimating whether the underlying objectives or milestones will be achieved. Consideration received to
promote and sell the supplier’s products is typically a reimbursement of marketing costs incurred by the Company and is recorded as a
reduction of our operating expenses. If the amount of consideration received from the suppliers exceeds our marketing costs, any
excess is recorded as a reduction of cost of goods sold. We follow the requirements of FASB ASC 605-50-25-10, Revenue
Recognition—Customer Payments and Incentives—Recognition—Customer’s Accounting for Certain Consideration Received from a
Vendor and ASC 605-50-45-16, Revenue Recognition—Customer Payments and Incentives—Other Presentation Matters—Reseller’s
Characterization of Sales Incentives Offered to Customers by Manufacturers.

Acquisitions, Goodwill, and Other Intangible Assets

We account for acquired businesses using the acquisition method of accounting. Our financial statements reflect the operations

of an acquired business starting from the completion of the acquisition. Goodwill and other intangible assets represent the excess of
cost of an acquired entity over the amounts specifically assigned to those tangible net assets acquired in a business combination. Other
identifiable intangible assets typically include customer relationships, trade names, technology, non-compete agreements, and
favorable lease assets. Goodwill and intangibles with indefinite lives are not amortized. Intangibles with definite lives are amortized
on a straight-line basis over their useful lives, which generally range from two to eleven years. Annually, or when certain triggering
events occur, the Company assesses the useful lives of its intangibles with definite lives. Certain assumptions, estimates, and
judgments are used in determining the fair value of net assets acquired, including goodwill and other intangible assets, as well as
determining the allocation of goodwill to the reporting units. Accordingly, we may obtain the assistance of third-party valuation
specialists for significant tangible and intangible assets. The fair value estimates are based on available historical information and on
future expectations and assumptions deemed reasonable by management, but are inherently uncertain. Significant estimates and
assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of
future cash flows (including expected growth rates and profitability), economic barriers to entry, a brand’s relative market position,
and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which
could affect the accuracy or validity of the estimates and assumptions.

We are required to test goodwill and other intangible assets with indefinite lives for impairment annually or more often if
circumstances indicate. Indicators of goodwill impairment include, but are not limited to, significant declines in the markets and
industries that buy our products, changes in the estimated future cash flows of its reporting units, changes in capital markets, and
changes in its market capitalization.

We apply the guidance in FASB Accounting Standards Update (ASU) 2011-08 “Intangibles—Goodwill and Other—Testing

Goodwill for Impairment,” which provides entities with an option to perform a qualitative assessment (commonly referred to as “step
zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. In performing step zero for our
goodwill impairment test, we are required to make assumptions and judgments, including but not limited to the following: the
evaluation of macroeconomic conditions as related to our business, industry and market trends, and the overall future financial
performance of our reporting units and future opportunities in the markets in which they operate. If impairment indicators are present
after performing step zero, we would perform a quantitative impairment analysis to estimate the fair value of goodwill.

During fiscal 2016 and fiscal 2015, we performed the step zero analysis for our goodwill impairment test. As a result of our step

zero analysis, no further quantitative impairment test was deemed necessary for fiscal 2016 and fiscal 2015. There were no
impairments of goodwill or intangible assets with indefinite lives for fiscal 2016 and fiscal 2015.

Stock-Based Compensation

The Company participates in the Performance Food Group Company 2007 Management Option Plan (the “2007 Option Plan”)

and the Performance Food Group Company 2015 Omnibus Incentive Plan (the “2015 Incentive Plan”) and follows the fair value
recognition provisions of FASB ASC 718-10-25, Compensation—Stock Compensation—Overall—Recognition. This guidance
requires that all stock-based compensation be recognized as an expense in the financial statements. The Company recognizes expense
for its stock-based compensation based on the fair value of the awards that are granted. The Company estimates the fair value of
service-based options using a Black-Scholes option pricing model. The fair values of service-based restricted stock, restricted stock
with performance conditions and restricted stock units are based on the Company’s stock price on the date of grant. With the
assistance of an unrelated specialist, the Company estimates the fair value of options and restricted stock with market conditions using
a Monte Carlo simulation. Compensation cost is recognized ratably over the requisite service period for the awards expected to vest.
For those options and shares of restricted stock that have a performance condition, compensation expense is based upon the number of
options or shares, as applicable, expected to vest after assessing the probability that the performance criteria will be met.

The Company estimates that the possible future compensation expense for awards under the 2007 Option Plan with performance

and market conditions is approximately $45.0 million, of which $8.4 million was recognized in fiscal 2016 and approximately $18.0
million will be recognized over the next three years. The remaining $18.6 million of compensation expense will be recognized when
the Company concludes that it is probable that certain performance conditions will be met.

Recently Issued Accounting Pronouncements

Refer to Note 3 Recently Issued Accounting Pronouncements within the Notes to Consolidated Financial Statements included in

Part II, Item 8 for a full description of recent accounting pronouncements including the respective expected dates of adoption and
expected effects on the Company’s consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

All of our market sensitive instruments are entered into for purposes other than trading.

Interest Rate Risk

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. Although we
hedge a portion of our interest rate risk through interest rate swaps, any borrowings under our credit facilities in excess of the notional
amount of the swaps will be subject to variable interest rates.

As of July 2, 2016, our subsidiary, Performance Food Group, Inc., had nine interest rate swaps with a combined value of $850.0

million notional amount that were designated as cash flow hedges of interest rate risk. See Note 9 Derivative and Hedging Activities
within the Notes to Consolidated Financial Statements included in Part II, Item 8 for further discussion of these interest rate swaps.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in

accumulated other comprehensive income/(loss) and is subsequently reclassified into earnings in the period that the hedged forecasted
transaction impacts earnings. The ineffective portion of the change in fair value of derivatives is recognized directly in earnings.
Amounts reported in accumulated other comprehensive income/(loss) related to derivatives will be reclassified to interest expense as
interest payments are made on our variable-rate debt. During the next twelve months, we estimate that an additional $5.0 million will
be reclassified as an increase to interest expense.

Based on the fair values of these interest rate swaps as of July 2, 2016, a hypothetical 100 bps decrease in LIBOR would result

in a loss of $13.4 million and a hypothetical 100 bps increase in LIBOR would result in a gain of $16.5 million within accumulated
other comprehensive income/(loss).

Assuming an average daily balance on our ABL Facility of approximately $962.0 million, approximately $500.0 million of our
outstanding long-term debt is fixed through interest rate swap agreements and approximately $462.0 million represents variable-rate
debt. A hypothetical 100 bps increase in LIBOR on our variable-rate debt would lead to an increase of approximately $4.6 million in
annual cash interest expense.

Fuel Price Risk

As of July 2, 2016, we had collars in place for approximately 17% of the gallons we expect to use over the twelve months
following July 2, 2016. These fuel collars do not qualify for hedge accounting treatment for reasons discussed in Note 9. Derivative
and Hedging Activities within the Notes to Consolidated Financial Statements included in Part II, Item 8. Therefore, these collars are
recorded at fair value as either an asset or liability on the balance sheet. Any changes in fair value are recorded in the period of the
change as unrealized gains or losses on fuel hedging instruments. A hypothetical 10% decrease in expected diesel fuel prices would
result in a loss of $0.7 million and a 10% hypothetical increase in expected diesel fuel prices would result in a gain of $0.6 million for
these derivative instruments.

The Company estimates that the possible future compensation expense for awards under the 2007 Option Plan with performance

and market conditions is approximately $45.0 million, of which $8.4 million was recognized in fiscal 2016 and approximately $18.0

million will be recognized over the next three years. The remaining $18.6 million of compensation expense will be recognized when

the Company concludes that it is probable that certain performance conditions will be met.

Recently Issued Accounting Pronouncements

Refer to Note 3 Recently Issued Accounting Pronouncements within the Notes to Consolidated Financial Statements included in

Part II, Item 8 for a full description of recent accounting pronouncements including the respective expected dates of adoption and

expected effects on the Company’s consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

All of our market sensitive instruments are entered into for purposes other than trading.

Interest Rate Risk

We are exposed to interest rate risk related to changes in interest rates for borrowings under our ABL Facility. Although we

hedge a portion of our interest rate risk through interest rate swaps, any borrowings under our credit facilities in excess of the notional

amount of the swaps will be subject to variable interest rates.

As of July 2, 2016, our subsidiary, Performance Food Group, Inc., had nine interest rate swaps with a combined value of $850.0

million notional amount that were designated as cash flow hedges of interest rate risk. See Note 9 Derivative and Hedging Activities

within the Notes to Consolidated Financial Statements included in Part II, Item 8 for further discussion of these interest rate swaps.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in

accumulated other comprehensive income/(loss) and is subsequently reclassified into earnings in the period that the hedged forecasted

transaction impacts earnings. The ineffective portion of the change in fair value of derivatives is recognized directly in earnings.

Amounts reported in accumulated other comprehensive income/(loss) related to derivatives will be reclassified to interest expense as

interest payments are made on our variable-rate debt. During the next twelve months, we estimate that an additional $5.0 million will

be reclassified as an increase to interest expense.

Based on the fair values of these interest rate swaps as of July 2, 2016, a hypothetical 100 bps decrease in LIBOR would result

in a loss of $13.4 million and a hypothetical 100 bps increase in LIBOR would result in a gain of $16.5 million within accumulated

other comprehensive income/(loss).

Assuming an average daily balance on our ABL Facility of approximately $962.0 million, approximately $500.0 million of our

outstanding long-term debt is fixed through interest rate swap agreements and approximately $462.0 million represents variable-rate
debt. A hypothetical 100 bps increase in LIBOR on our variable-rate debt would lead to an increase of approximately $4.6 million in
annual cash interest expense.

Fuel Price Risk

Our fuel purchases occur at market prices. Using published market price projections for diesel and estimates of fuel

consumption, a 10% hypothetical increase in diesel prices from the market price would result in a potential increase of approximately
48
$9.0 million in fuel costs included in Operating expenses. As discussed above, this increase in fuel costs would be partially offset by
fuel surcharges passed through to our customers.

Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements as of July 2, 2016 and June 27, 2015
and for the fiscal years ended July 2, 2016, June 27, 2015 and June 28, 2014

Report of Independent Registered Public Accounting Firm ........................................................................................................

Consolidated Balance Sheets .......................................................................................................................................................

Consolidated Statements of Operations .......................................................................................................................................

Consolidated Statements of Comprehensive Income...................................................................................................................

Consolidated Statements of Shareholders’ Equity .......................................................................................................................

Consolidated Statements of Cash Flows ......................................................................................................................................

Notes to Consolidated Financial Statements................................................................................................................................

Schedule 1 – Registrant’s Condensed Financial Statements........................................................................................................

Our fuel purchases occur at market prices. Using published market price projections for diesel and estimates of fuel

consumption, a 10% hypothetical increase in diesel prices from the market price would result in a potential increase of approximately

$9.0 million in fuel costs included in Operating expenses. As discussed above, this increase in fuel costs would be partially offset by
fuel surcharges passed through to our customers.