| --- | --- | --- | --- | --- | |-------|-------|----------|--------------|-----------| | | | | | | | | | | | | | | | | | | | | | INVESTOR | PRESENTATION | JUNE 2020 | | | | | | | 2 Safe Harbor & SEC Regulation G Safe Harbor Statements made in the course of this presentation that state the company's or management's hopes, beliefs, expectations or predictions of the future are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Actua ...

Core-Mark Holding Company, Inc. (CORE) Q1 2020 Earnings Conference Call May 7, 2020 9:00 AM ET Company Participants David Lawrence - VP of Treasury and IR Scott McPherson - President and CEO Chris Miller - CFO Conference Call Participants Benjamin Bienvenue - Stephens Inc. Chris Mandeville - Jefferies Alessandra Jimenez - Raymond James Kelly Bania - BMO Capital Markets Operator Hello, and welcome to the Core-Mark First Quarter 2020 Investor Call. My name is Michelle, and I will be the operator for your conf ...

For the transition period from to Commission File Number 001-37578 Performance Food Group Company UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 28, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) 12500 West Creek Parkway Richmond, Virg ...

Core-Mark Holding Company, Inc. (CORE) Q4 2019 Results Earnings Conference Call March 2, 2020 9:00 AM ET Company Participants David Lawrence - Investor Relations Scott McPherson - President and Chief Executive Officer Chris Miller - Chief Financial Officer Conference Call Participants Ben Bienvenu - Stephens Blake Anderson - Jefferies Kelly Bania - BMO Capital Markets Operator Welcome to the Core-Mark, Fourth Quarter 2019 Investor Call. My name is Hilda and I'll be your operator for today. At this time all ...

(NASDAQ: CORE) INVESTOR PRESENTATION March 2019 Safe Harbor & SEC Regulation G SAFE HARBOR – Statements made in the course of this presentation that state the company's or management's hopes, beliefs, expectations or predictions of the future are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results and performance could differ materially from those set forth in the forward-looking statements. Additional information abo ...

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a standard disclaimer for forward-looking statements, detailing inherent uncertainties and risks that may cause actual results to differ - The report contains forward-looking statements identified by words such as 'estimates,' 'expects,' 'will,' 'anticipates,' 'projects,' 'plans,' 'intends,' 'believes,' and 'forecasts'[9](index=9&type=chunk) - Key risks and uncertainties include **intense industry competition**, **low operating margins**, cost inflation/deflation, reliance on third-party suppliers, labor relations and costs, fuel price volatility, and risks related to acquisitions and technology disruptions[10](index=10&type=chunk)[11](index=11&type=chunk)[14](index=14&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Performance Food Group Company, including balance sheets, operations, comprehensive income, equity, cash flows, and detailed notes - The financial statements are unaudited, except for the consolidated balance sheet as of June 29, 2019, which was derived from audited statements[35](index=35&type=chunk) - Preparation of financial statements requires management to make significant estimates and assumptions in accordance with GAAP[36](index=36&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in millions) | Metric | Dec 28, 2019 | Jun 29, 2019 | Change | % Change | | :-------------------------------- | :----------- | :----------- | :----- | :------- | | Total Assets | $6,111.1 | $4,653.5 | $1,457.6 | 31.3% | | Current Assets | $3,732.6 | $2,670.6 | $1,062.0 | 39.8% | | Restricted Cash (Current) | $1,078.2 | $- | $1,078.2 | NM | | Total Liabilities | $4,732.6 | $3,355.3 | $1,377.3 | 41.0% | | Long-term Debt | $2,188.4 | $1,202.9 | $985.5 | 81.9% | | Total Shareholders' Equity | $1,378.5 | $1,298.2 | $80.3 | 6.2% | - The significant increase in current restricted cash to **$1,078.2 million** as of December 28, 2019, from zero in June 2019, is primarily due to proceeds from senior notes held in escrow for the Reinhart acquisition[17](index=17&type=chunk)[29](index=29&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | Change (%) | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | Change (%) | | :------------------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Net Sales | $6,068.6 | $4,615.7 | 31.5% | $12,311.6 | $9,155.4 | 34.5% | | Gross Profit | $711.2 | $614.6 | 15.7% | $1,422.6 | $1,208.2 | 17.7% | | Operating Profit | $80.5 | $73.0 | 10.3% | $144.0 | $123.6 | 16.5% | | Interest Expense | $26.4 | $16.0 | 65.0% | $43.7 | $31.6 | 38.3% | | Net Income | $41.2 | $43.1 | (4.4%) | $77.3 | $71.3 | 8.4% | | Basic EPS | $0.39 | $0.41 | (4.9%) | $0.74 | $0.69 | 7.2% | | Diluted EPS | $0.39 | $0.41 | (4.9%) | $0.73 | $0.68 | 7.4% | - Net income for the three months ended December 28, 2019, decreased by **4.4%** primarily due to a significant **65.0% increase in interest expense**, partially offset by a **10.3% increase in operating profit**[19](index=19&type=chunk)[120](index=120&type=chunk) [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income Highlights (in millions) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $41.2 | $43.1 | $77.3 | $71.3 | | Other Comprehensive Income (Loss) | $0.3 | $(3.8) | $(0.8) | $(3.5) | | Total Comprehensive Income | $41.5 | $39.3 | $76.5 | $67.8 | - Other comprehensive income (loss) for the three months ended December 28, 2019, was a **gain of $0.3 million**, a positive change from a loss of $3.8 million in the prior year, primarily due to changes in the fair value of interest rate swaps[22](index=22&type=chunk) [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Consolidated Statements of Shareholders' Equity Highlights (in millions) | Metric | Balance as of Jun 29, 2019 | Balance as of Dec 28, 2019 | | :------------------------- | :------------------------- | :------------------------- | | Common Stock | $1.0 | $1.0 | | Additional Paid-in Capital | $866.7 | $870.5 | | Accumulated Other Comprehensive Loss | $(0.2) | $(1.0) | | Retained Earnings | $430.7 | $508.0 | | Total Shareholders' Equity | $1,298.2 | $1,378.5 | - Total shareholders' equity increased by **$80.3 million** from June 29, 2019, to December 28, 2019, primarily driven by net income of **$77.3 million** for the six-month period[17](index=17&type=chunk)[25](index=25&type=chunk) - Stock-based compensation expense for the six months ended December 28, 2019, was **$8.8 million**[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in millions) | Metric | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $157.8 | $70.0 | | Net cash used in investing activities | $(48.5) | $(116.4) | | Net cash provided by financing activities | $967.2 | $46.7 | | Net increase in cash and restricted cash | $1,076.5 | $0.3 | | Cash and restricted cash, end of period | $1,101.9 | $18.1 | - Net cash provided by operating activities more than doubled to **$157.8 million** for the six months ended December 28, 2019, compared to $70.0 million in the prior year, driven by higher operating income and working capital improvements[29](index=29&type=chunk)[146](index=146&type=chunk) - Financing activities provided **$967.2 million** in cash, primarily from the issuance of **$1,060.0 million** in Notes due 2027, significantly increasing the cash and restricted cash balance[29](index=29&type=chunk)[149](index=149&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Summary of Business Activities](index=11&type=section&id=1.%20Summary%20of%20Business%20Activities) - The company markets and distributes national and company-branded food and food-related products to independent and multi-unit restaurants, schools, healthcare facilities, and other institutions[32](index=32&type=chunk) - It also specializes in distributing candy, snacks, beverages, cigarettes, and other tobacco products to vending distributors, big box retailers, theaters, convenience stores, and hospitality providers[32](index=32&type=chunk) - As of December 28, 2019, approximately **$240.7 million** remained available for additional share repurchases under the $250 million program authorized in November 2018, with no repurchases made in fiscal year 2020[33](index=33&type=chunk) - The company closed an equity offering on November 25, 2019, for 11,638,000 shares of common stock on a forward sale basis, generating **$491.0 million** in net proceeds used to finance the Reinhart acquisition[34](index=34&type=chunk) [2. Basis of Presentation](index=11&type=section&id=2.%20Basis%20of%20Presentation) - The consolidated financial statements are unaudited, except for the June 29, 2019 balance sheet, and are prepared in accordance with GAAP, requiring management estimates and assumptions[35](index=35&type=chunk)[36](index=36&type=chunk) [3. Recently Issued Accounting Pronouncements](index=12&type=section&id=3.%20Recently%20Issued%20Accounting%20Pronouncements) - The company adopted ASU 2016-02, Leases (Topic 842), on June 30, 2019, recognizing **$423.8 million** in operating lease liabilities and **$423.0 million** in corresponding right-of-use assets[38](index=38&type=chunk)[39](index=39&type=chunk) - New accounting pronouncements (ASU 2016-13, ASU 2018-15, ASU 2019-12) are being evaluated for adoption in fiscal 2021 or 2022, with no material impact expected on future consolidated financial statements[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [4. Revenue Recognition](index=12&type=section&id=4.%20Revenue%20Recognition) - Revenue is disaggregated at the segment level (Foodservice and Vistar) to reflect how economic factors affect revenue and cash flows[44](index=44&type=chunk) - Customer incentive payments are capitalized and amortized to net sales over the contract or expected customer relationship life, with a contract asset of **$12.3 million** as of December 28, 2019[45](index=45&type=chunk) [5. Business Combinations](index=13&type=section&id=5.%20Business%20Combinations) - The company acquired Reinhart Foodservice, L.L.C. for **$2.0 billion** (approximately **$1.7 billion** net of tax benefit) subsequent to December 28, 2019, closing on December 30, 2019[48](index=48&type=chunk) - The Reinhart acquisition was financed by **$466.5 million** from the Amended Credit Agreement, **$1,033.7 million** from new senior unsecured Notes due 2027, and **$491.0 million** from a common stock offering[48](index=48&type=chunk) - Contingent consideration for the Eby-Brown acquisition totaled **$88.9 million** as of December 28, 2019[47](index=47&type=chunk) [6. Debt](index=13&type=section&id=6.%20Debt) Debt Composition (in millions) | Debt Type | As of Dec 28, 2019 | As of Jun 29, 2019 | | :-------------------------- | :----------------- | :----------------- | | ABL Facility | $786.4 | $859.0 | | 5.500% Notes due 2024 | $350.0 | $350.0 | | 5.500% Notes due 2027 | $1,060.0 | $- | | Less: Discount & Deferred Costs | $(8.0) | $(6.1) | | Total Long-term Debt | $2,188.4 | $1,202.9 | - The ABL Facility had **$786.4 million** in aggregate borrowings and **$1,295.2 million** in excess availability as of December 28, 2019, with an average interest rate of **3.22%**[54](index=54&type=chunk) - On December 30, 2019, the ABL Facility was amended and restated, increasing the aggregate principal amount to **$3.0 billion** and extending the maturity to December 30, 2024[54](index=54&type=chunk) - The **$1,060.0 million** 5.500% Senior Notes due 2027 were issued on September 27, 2019, with proceeds held in escrow until the Reinhart acquisition closed[55](index=55&type=chunk)[56](index=56&type=chunk) [7. Leases](index=15&type=section&id=7.%20Leases) Lease Assets and Liabilities (in millions) as of Dec 28, 2019 | Category | Asset Type | Amount | | :-------------------------- | :-------------------------- | :----- | | Assets | Operating lease right-of-use assets | $391.3 | | | Property, plant and equipment, net (Finance) | $179.3 | | | **Total lease assets** | **$570.6** | | Liabilities | Operating lease obligations—current | $78.4 | | | Finance lease obligations—current | $24.6 | | | Operating lease obligations, excluding current | $314.6 | | | Finance lease obligations, excluding current | $164.5 | | | **Total lease liabilities** | **$582.1** | - The weighted-average remaining lease term for operating leases is **7.6 years** and for finance leases is **7.1 years**, with corresponding weighted-average discount rates of **5.4%** and **5.6%**[66](index=66&type=chunk) - Total lease cost for the six months ended December 28, 2019, was **$81.7 million**, comprising **$15.4 million** for finance leases and **$66.3 million** for operating and short-term leases[66](index=66&type=chunk) [8. Fair Value of Financial Instruments](index=17&type=section&id=8.%20Fair%20Value%20of%20Financial%20Instruments) - The fair value of long-term debt was **$2,280.0 million** as of December 28, 2019, compared to a carrying value of **$2,188.4 million**, and is considered a Level 2 measurement[68](index=68&type=chunk) [9. Income Taxes](index=17&type=section&id=9.%20Income%20Taxes) Effective Tax Rates | Period | Dec 28, 2019 | Dec 29, 2018 | | :-------------------------- | :----------- | :----------- | | Three Months Ended | 24.2% | 23.4% | | Six Months Ended | 23.1% | 22.1% | - The effective tax rate varied from the **21% statutory rate** primarily due to state taxes, federal credits, and other permanent items[70](index=70&type=chunk) - The company had net deferred tax assets of **$29.1 million** and deferred tax liabilities of **$131.1 million** as of December 28, 2019[71](index=71&type=chunk) [10. Commitments and Contingencies](index=18&type=section&id=10.%20Commitments%20and%20Contingencies) - Outstanding purchase obligations for capital projects and services totaled **$37.4 million** as of December 28, 2019[73](index=73&type=chunk) - The company had **$63.8 million** in commitments related to the Reinhart acquisition, including fees for notes, credit agreements, stock offering, and advisory services, which were paid upon closing on December 30, 2019[75](index=75&type=chunk) - The company is engaged in various legal proceedings, including a U.S. Equal Employment Opportunity Commission (EEOC) lawsuit regarding alleged gender discrimination, which management believes will not have a material adverse effect on financial position or results of operations[76](index=76&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) [11. Related-Party Transactions](index=20&type=section&id=11.%20Related-Party%20Transactions) - The company holds an equity method investment of **$5.1 million** in a purchasing alliance as of December 28, 2019[83](index=83&type=chunk) - Purchases through the purchasing alliance totaled **$244.2 million** for the three months and **$498.4 million** for the six months ended December 28, 2019[83](index=83&type=chunk) [12. Earnings Per Common Share](index=20&type=section&id=12.%20Earnings%20Per%20Common%20Share) Earnings Per Common Share | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.39 | $0.41 | $0.74 | $0.69 | | Diluted EPS | $0.39 | $0.41 | $0.73 | $0.68 | | Weighted-average dilutive shares outstanding (millions) | 106.4 | 104.9 | 106.2 | 105.0 | - The dilutive effect of potential common shares for the six months ended December 28, 2019, was **2.0 million shares**[85](index=85&type=chunk) [13. Segment Information](index=21&type=section&id=13.%20Segment%20Information) - The company operates in two reportable segments: Foodservice (distributes food and related products to restaurants and institutions) and Vistar (distributes candy, snacks, beverages, and tobacco products to various channels)[86](index=86&type=chunk) Segment Financial Highlights (in millions) | Segment | Net External Sales (6M Dec 28, 2019) | EBITDA (6M Dec 28, 2019) | Total Assets (Dec 28, 2019) | | :-------------------- | :----------------------------------- | :----------------------- | :-------------------------- | | Foodservice | $7,770.9 | $217.6 | $3,299.1 | | Vistar | $4,529.1 | $108.1 | $1,502.0 | | Corporate & All Other | $11.6 | $(95.0) | $1,310.0 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook, including recent trends, key factors, and detailed segment-specific results - Following the Reinhart acquisition, the company markets and distributes over **200,000 food and related products** from over **100 distribution facilities** to more than **200,000 customer locations**[94](index=94&type=chunk) - The company leverages cross-segment synergies in procurement, operational best practices, supply chain optimization, and shared corporate functions[95](index=95&type=chunk) [Recent Trends and Initiatives](index=23&type=section&id=Recent%20Trends%20and%20Initiatives) - Case volume grew **6.7%** in the second quarter of fiscal 2020 and **8.7%** in the first six months of fiscal 2020 compared to prior year periods[97](index=97&type=chunk) Key Financial Performance Trends (YoY Change) | Metric | Q2 FY2020 Change | 6M FY2020 Change | | :-------------------- | :--------------- | :--------------- | | Net Income | (4.4%) | 8.4% | | Adjusted EBITDA | 22.2% | 27.4% | | Gross Profit Dollars | 15.7% | 17.7% | | Operating Expenses | 16.5% | 17.9% | - Gross profit dollar growth outpaced case growth, primarily due to shifting channel mix toward higher gross margin customers and increased sales of Performance Brands[97](index=97&type=chunk) [Key Factors Affecting Our Business](index=23&type=section&id=Key%20Factors%20Affecting%20Our%20Business) - Performance is affected by changing demographic and macroeconomic trends, including increased consumer spending on food-away-from-home, rising employment, and disposable income[99](index=99&type=chunk) - The company benefits from its scale in the food distribution market, allowing investment in Performance Brands, economies of scale in purchasing, and supply chain efficiencies[107](index=107&type=chunk) - Key strategies include focusing on independent sales and Performance Brands, pursuing new customers, geographic expansion, optimizing infrastructure, and making strategic acquisitions[107](index=107&type=chunk) [How We Assess the Performance of Our Business](index=24&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) - Management uses Net Sales, Gross Profit, EBITDA, and Adjusted EBITDA to assess business performance[101](index=101&type=chunk) - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization, further adjusted to exclude certain non-cash, non-recurring, and other items, and is used for evaluating management performance and covenant compliance[106](index=106&type=chunk) - EBITDA and Adjusted EBITDA have limitations as analytical tools, as they exclude certain cash payments, capital expenditure requirements, working capital changes, and interest expense[108](index=108&type=chunk) [Results of Operations, EBITDA, and Adjusted EBITDA](index=25&type=section&id=Results%20of%20Operations,%20EBITDA,%20and%20Adjusted%20EBITDA) Consolidated Results of Operations, EBITDA, and Adjusted EBITDA (in millions, except per share data) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | Change (%) | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | Change (%) | | :------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Net Sales | $6,068.6 | $4,615.7 | 31.5% | $12,311.6 | $9,155.4 | 34.5% | | Gross Profit | $711.2 | $614.6 | 15.7% | $1,422.6 | $1,208.2 | 17.7% | | Operating Profit | $80.5 | $73.0 | 10.3% | $144.0 | $123.6 | 16.5% | | Net Income | $41.2 | $43.1 | (4.4%) | $77.3 | $71.3 | 8.4% | | EBITDA | $124.5 | $109.4 | 13.8% | $230.7 | $195.7 | 17.9% | | Adjusted EBITDA | $142.9 | $116.9 | 22.2% | $270.6 | $212.4 | 27.4% | - Adjusted EBITDA increased by **22.2%** for the second quarter and **27.4%** for the first six months of fiscal 2020, demonstrating strong operational performance[110](index=110&type=chunk)[112](index=112&type=chunk) [Consolidated Results of Operations](index=26&type=section&id=Consolidated%20Results%20of%20Operations) - Net sales increased by **31.5%** for the second quarter and **34.5%** for the first six months of fiscal 2020, primarily driven by recent acquisitions (Eby-Brown contributed **$1,260.8 million** in Q2 and **$2,634.8 million** in 6M) and sales growth in the Vistar segment[114](index=114&type=chunk)[116](index=116&type=chunk) - Gross profit as a percentage of net sales decreased from **13.3% to 11.7%** in Q2 and from **13.2% to 11.6%** in 6M, reflecting Eby-Brown's lower margins, particularly from tobacco sales[117](index=117&type=chunk) - Operating expenses rose **16.5%** in Q2 and **17.9%** in 6M, mainly due to recent acquisitions, increased case volume, and professional fees related to acquisitions (**$6.5 million** in Q2, **$12.9 million** in 6M)[118](index=118&type=chunk) - The effective tax rate increased to **24.2%** for Q2 and **23.1%** for 6M, primarily due to higher non-deductible expenses and state income taxes, partially offset by a decrease in excess tax benefits from stock-based compensation[122](index=122&type=chunk) [Segment Results](index=28&type=section&id=Segment%20Results) [Segment Results—Foodservice](index=29&type=section&id=Segment%20Results%E2%80%94Foodservice) Foodservice Segment Performance (in millions) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | Change (%) | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | Change (%) | | :------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Net Sales | $3,847.4 | $3,671.9 | 4.8% | $7,778.3 | $7,317.9 | 6.3% | | EBITDA | $113.6 | $104.3 | 8.9% | $217.6 | $196.3 | 10.9% | - Foodservice net sales increased due to growth in cases sold and higher selling prices from inflation, with independent case growth of approximately **4.9%** in Q2 and **5.2%** in 6M[126](index=126&type=chunk) - EBITDA growth was driven by an increase in gross profit per case, resulting from a favorable shift in mix towards Performance Brands sold to independent customers and procurement gains[127](index=127&type=chunk) [Segment Results—Vistar](index=30&type=section&id=Segment%20Results%E2%80%94Vistar) Vistar Segment Performance (in millions) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | Change (%) | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | Change (%) | | :------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Net Sales | $2,219.2 | $941.9 | 135.6% | $4,530.3 | $1,834.5 | 147.0% |\ | EBITDA | $56.6 | $45.4 | 24.7% | $108.1 | $77.0 | 40.4% | - Vistar's net sales surged by **135.6%** in Q2 and **147.0%** in 6M, primarily due to recent acquisitions (Eby-Brown contributed **$1,260.8 million** in Q2 and **$2,634.8 million** in 6M) and strong sales growth in corrections, vending, and office coffee service channels[130](index=130&type=chunk) - EBITDA increased significantly, benefiting from gross profit dollar growth from acquisitions, **$5.6 million** from excise tax rate increases in 6M, procurement gains, and a favorable channel mix[131](index=131&type=chunk) - Gross profit as a percentage of net sales declined due to Eby-Brown's lower margins[131](index=131&type=chunk) [Segment Results—Corporate & All Other](index=30&type=section&id=Segment%20Results%E2%80%94Corporate%20%26%20All%20Other) Corporate & All Other Segment Performance (in millions) | Metric | 3 Months Ended Dec 28, 2019 | 3 Months Ended Dec 29, 2018 | Change (%) | 6 Months Ended Dec 28, 2019 | 6 Months Ended Dec 29, 2018 | Change (%) | | :------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Net Sales | $78.6 | $69.3 | 13.4% | $158.6 | $139.1 | 14.0% | | EBITDA | $(45.7) | $(40.3) | (13.4%) | $(95.0) | $(77.6) | (22.4%) | - The decline in EBITDA for Corporate & All Other was primarily driven by an increase in professional and legal fees (**$5.8 million** in Q2 and **$12.1 million** in 6M)[135](index=135&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash balance totaled **$1,101.9 million** at December 28, 2019, including **$1,089.2 million** in restricted cash, a significant increase from $25.4 million at June 29, 2019[141](index=141&type=chunk) - The increase in cash was attributable to **$157.8 million** from operating activities and **$967.2 million** from financing activities, partially offset by **$48.5 million** used in investing activities[141](index=141&type=chunk) - The company utilized **$1,060.0 million** from the Notes due 2027, **$466.5 million** from the Amended Credit Agreement, and **$491.0 million** from an equity offering to finance the Reinhart acquisition, with funds released from escrow on December 30, 2019[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Operating Activities](index=31&type=section&id=Operating%20Activities) - Net cash provided by operating activities increased to **$157.8 million** for the first six months of fiscal 2020, up from $70.0 million in the prior year, driven by higher operating income and improvements in working capital[146](index=146&type=chunk) [Investing Activities](index=31&type=section&id=Investing%20Activities) - Cash used in investing activities decreased to **$48.5 million** for the first six months of fiscal 2020, compared to $116.4 million in the prior year, primarily due to no major business acquisitions in the current period[147](index=147&type=chunk) - Capital purchases of property, plant, and equipment totaled **$49.0 million**, mainly for information technology, warehouse equipment, and transportation equipment[147](index=147&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) - Financing activities provided **$967.2 million** in cash for the first six months of fiscal 2020, primarily from the **$1,060.0 million** issuance of Notes due 2027, partially offset by **$72.6 million** in net payments under the ABL Facility[149](index=149&type=chunk) - As of December 28, 2019, the ABL Facility had **$786.4 million** in aggregate borrowings and **$1,295.2 million** in excess availability, with an average interest rate of **3.22%**[152](index=152&type=chunk) - The company was in compliance with all covenants under the ABL Facility and the indentures governing the Notes due 2024 and Notes due 2027 as of December 28, 2019[167](index=167&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company does not have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition or results of operations[171](index=171&type=chunk) [Total Assets by Segment](index=34&type=section&id=Total%20Assets%20by%20Segment) Total Assets by Segment (in millions) | Segment | As of Dec 28, 2019 | As of Jun 29, 2019 | Change | | :-------------------- | :----------------- | :----------------- | :----- | | Foodservice | $3,299.1 | $3,152.3 | $146.8 | | Vistar | $1,502.0 | $1,271.0 | $231.0 | | Corporate & All Other | $1,310.0 | $230.2 | $1,079.8 | - Both Foodservice and Vistar segments saw asset increases partly due to the adoption of ASC 842, which led to the recognition of operating lease right-of-use assets (**$153.4 million** for Foodservice and **$227.3 million** for Vistar)[174](index=174&type=chunk)[175](index=175&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the critical accounting policies and estimates, including those for allowance for doubtful accounts, inventory valuation, insurance programs, income taxes, vendor rebates, goodwill, and other intangible assets, as compared to the Form 10-K[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the company's market risks, which primarily include interest rate risk and fuel price risk, since the last annual report - The company's market risks consist of interest rate risk and fuel price risk, with no material changes since June 29, 2019[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated and deemed effective as of December 28, 2019[179](index=179&type=chunk) - There were no material changes in internal control over financial reporting during the fiscal quarter ended December 28, 2019[180](index=180&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is involved in various legal proceedings but management believes the ultimate outcomes will not have a material adverse effect on its financial position, with no material changes from the Form 10-K - The company is subject to various legal proceedings arising in the ordinary course of business[183](index=183&type=chunk) - Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the company's financial position[184](index=184&type=chunk) - No material changes to legal proceedings have occurred from those discussed in the Form 10-K[184](index=184&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the principal risk factors previously disclosed in the company's Form 10-K - There have been no material changes to the principal risk factors affecting the business, results of operations, and financial condition from those previously disclosed in the Form 10-K[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on common stock repurchases made through share withholding for tax obligations under incentive plans and updates on the remaining availability under the company's share repurchase program Common Stock Repurchases (Q2 FY2020) | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | | :-------------------------------- | :----------------------------------- | :--------------------------- | | September 29, 2019—October 26, 2019 | 33,288 | $46.01 | | October 27, 2019—November 23, 2019 | 1,401 | $43.51 | | November 24, 2019—December 28, 2019 | 3,265 | $46.72 | | Total | 37,954 | $45.98 | - During the second quarter of fiscal 2020, the company repurchased **37,954 shares** of common stock via share withholding to cover tax obligations related to employee incentive plans[187](index=187&type=chunk)[188](index=188&type=chunk) - As of December 28, 2019, approximately **$240.7 million** remained available under the $250 million share repurchase program authorized in November 2018, with no shares repurchased under this program during the three months ended December 28, 2019[188](index=188&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[188](index=188&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[188](index=188&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information is reported[188](index=188&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, credit agreements, incentive plans, and certifications - Exhibits include the Amended and Restated Certificate of Incorporation, First Supplemental Indenture, Fourth Amended and Restated Credit Agreement, and CEO/CFO Certifications[189](index=189&type=chunk) [SIGNATURE](index=38&type=section&id=SIGNATURE) [Report Signature](index=38&type=section&id=Report%20Signature) This section contains the official signature block, confirming the due authorization and filing of the report - The report was signed on February 5, 2020, by James D. Hope, Executive Vice President and Chief Financial Officer[194](index=194&type=chunk)

Special Note Regarding Forward-Looking Statements [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines potential risks and uncertainties that could cause actual results to differ from forward-looking statements. It highlights numerous factors, including intense competition, industry-low margins, cost inflation, and risks associated with acquisitions, particularly the pending Reinhart Transaction. The company cautions that this list is not exhaustive and undertakes no obligation to update these statements - The report identifies several key business and operational risks, such as intense competition, low margins, cost inflation, reliance on suppliers, and labor costs[11](index=11&type=chunk) - Significant risks related to the proposed acquisition of Reinhart Foodservice, L.L.C. are disclosed, including potential delays in regulatory approval, failure to realize expected synergies, integration difficulties, and potential disruption to business relationships[13](index=13&type=chunk) PART I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarterly period ended September 28, 2019. It includes the Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Shareholders' Equity, and Statements of Cash Flows, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial items Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | As of Sep 28, 2019 | As of Jun 29, 2019 | | :--- | :--- | :--- | | **Total current assets** | $3,769.7 | $2,670.6 | | **Total assets** | **$6,163.0** | **$4,653.5** | | **Total current liabilities** | $1,823.0 | $1,699.3 | | **Long-term debt** | $2,212.1 | $1,202.9 | | **Total liabilities** | $4,829.9 | $3,355.3 | | **Total shareholders' equity** | **$1,333.1** | **$1,298.2** | Consolidated Statement of Operations Highlights (Unaudited) | (In millions, except per share data) | Three Months Ended Sep 28, 2019 | Three Months Ended Sep 29, 2018 | | :--- | :--- | :--- | | **Net sales** | $6,243.0 | $4,539.7 | | **Gross profit** | $711.4 | $593.6 | | **Operating profit** | $63.5 | $50.6 | | **Net income** | **$36.1** | **$28.2** | | **Diluted EPS** | **$0.34** | **$0.27** | Consolidated Statement of Cash Flows Highlights (Unaudited) | (In millions) | Three Months Ended Sep 28, 2019 | Three Months Ended Sep 29, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $84.2 | $32.3 | | **Net cash used in investing activities** | ($22.5) | ($56.3) | | **Net cash provided by financing activities** | $1,000.3 | $25.3 | | **Net increase in cash and restricted cash** | $1,062.0 | $1.3 | [Note 3: Accounting Pronouncements](index=11&type=section&id=Note%203.%20Recently%20Issued%20Accounting%20Pronouncements) The company adopted the new lease accounting standard (ASU 2016-02, Topic 842) on June 30, 2019. This resulted in the recognition of $423.8 million in operating lease liabilities and $423.0 million in operating lease right-of-use assets on the balance sheet. The adoption did not materially impact the statements of operations or cash flows. The company is currently evaluating the impact of other recently issued standards, including those on credit losses and cloud computing arrangements - Effective June 30, 2019, the company adopted the new lease standard (ASC 842) using the modified retrospective approach[35](index=35&type=chunk) - The adoption resulted in the recognition of operating lease liabilities of **$423.8 million** and operating lease right-of-use assets of **$423.0 million**[36](index=36&type=chunk) [Note 5: Business Combinations](index=12&type=section&id=Note%205.%20Business%20Combinations) On July 1, 2019, the company entered into an agreement to acquire Reinhart Foodservice, L.L.C. for $2.0 billion. The transaction is expected to be financed through a combination of debt and equity. In preparation, the company issued $1.06 billion of senior notes in September 2019. Additionally, contingent consideration for the prior acquisition of Eby-Brown stood at $86.4 million as of September 28, 2019 - The company entered into an agreement to acquire Reinhart Foodservice, L.L.C. for **$2.0 billion**, with the closing subject to regulatory approvals[43](index=43&type=chunk) - To finance the Reinhart transaction, the company issued **$1,060.0 million** of Notes due 2027 on September 27, 2019[44](index=44&type=chunk) - Contingent consideration outstanding for the Eby-Brown acquisition was **$86.4 million** as of September 28, 2019[42](index=42&type=chunk) [Note 6: Debt](index=13&type=section&id=Note%206.%20Debt) Total long-term debt increased to $2.21 billion from $1.20 billion at the end of the prior fiscal year. This increase was primarily due to the issuance of $1.06 billion in 5.500% Senior Notes due 2027 to finance the pending Reinhart acquisition. The company also has an ABL Facility with $810.0 million in borrowings and $1.25 billion in excess availability as of September 28, 2019 Debt Composition (in millions) | Debt Instrument | As of Sep 28, 2019 | As of Jun 29, 2019 | | :--- | :--- | :--- | | ABL Facility | $810.0 | $859.0 | | 5.500% Notes due 2024 | $350.0 | $350.0 | | 5.500% Notes due 2027 | $1,060.0 | - | | **Total Long-term debt** | **$2,212.1** | **$1,202.9** | - On September 27, 2019, the company issued **$1,060.0 million** of 5.500% Senior Notes due 2027 to finance part of the Reinhart Transaction[50](index=50&type=chunk) [Note 13: Segment Information](index=21&type=section&id=Note%2013.%20Segment%20Information) The company operates through two reportable segments: Foodservice and Vistar. For the three months ended September 28, 2019, Foodservice generated $3.93 billion in total sales and $104.0 million in EBITDA. Vistar generated $2.31 billion in total sales and $51.5 million in EBITDA. The significant increase in Vistar's sales is primarily due to the acquisition of Eby-Brown Segment Net External Sales (Three Months Ended Sep 28, 2019) | (In millions) | Foodservice | Vistar | Corporate & All Other | Consolidated | | :--- | :--- | :--- | :--- | :--- | | **Net external sales** | $3,927.0 | $2,310.5 | $5.5 | $6,243.0 | Segment EBITDA (Three Months Ended) | (In millions) | Sep 28, 2019 | Sep 29, 2018 | | :--- | :--- | :--- | | Foodservice EBITDA | $104.0 | $92.0 | | Vistar EBITDA | $51.5 | $31.6 | | Corporate & All Other EBITDA | ($49.3) | ($37.3) | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for the first quarter of fiscal 2020, highlighting a 37.5% increase in net sales to $6.2 billion and a 28.0% increase in net income to $36.1 million compared to the prior year. The growth was driven by the Eby-Brown acquisition and organic case growth. The discussion details the performance of the Foodservice and Vistar segments, liquidity position, capital resources, and financing activities, including the debt issuance for the pending Reinhart acquisition - Net sales increased **37.5%** YoY, primarily due to recent acquisitions, with the Eby-Brown acquisition contributing **$1,374.0 million** to net sales in the quarter[110](index=110&type=chunk) - Net income increased **28.0%** YoY to **$36.1 million**, driven by a **$12.9 million** increase in operating profit[114](index=114&type=chunk) - Adjusted EBITDA increased **33.7%** YoY to **$127.7 million**, driven by case growth and improved profit per case[93](index=93&type=chunk)[106](index=106&type=chunk) [Consolidated Results of Operations](index=26&type=section&id=Consolidated%20Results%20of%20Operations) For Q1 FY2020, net sales rose 37.5% to $6.24 billion, driven by the Eby-Brown acquisition ($1.37 billion contribution) and organic case growth of 10.7%. Gross profit increased 19.8% to $711.4 million due to higher case volume and an improved product/channel mix. Operating expenses grew 19.3%, in line with increased volume and acquisitions. Net income rose 28.0% to $36.1 million Reconciliation of Net Income to Adjusted EBITDA | (In millions) | Three months ended Sep 28, 2019 | Three months ended Sep 29, 2018 | | :--- | :--- | :--- | | **Net income** | **$36.1** | **$28.2** | | Interest expense | 17.3 | 15.6 | | Income tax expense | 10.1 | 7.0 | | Depreciation & Amortization | 42.7 | 35.5 | | **EBITDA** | **$106.2** | **$86.3** | | Adjustments | 21.5 | 9.2 | | **Adjusted EBITDA** | **$127.7** | **$95.5** | - The acquisition of Eby-Brown in Q4 2019 contributed **$1,374.0 million** to net sales for Q1 FY2020[110](index=110&type=chunk) - Gross profit as a percentage of net sales decreased from **13.1%** to **11.4%**, reflecting the impact of Eby-Brown's lower margin business[111](index=111&type=chunk) [Segment Results](index=27&type=section&id=Segment%20Results) In Q1 FY2020, the Foodservice segment's net sales grew 7.8% to $3.9 billion, driven by a 5.6% increase in cases sold to independent customers. Foodservice EBITDA increased 13.0% to $104.0 million. The Vistar segment's net sales surged 158.9% to $2.3 billion, primarily due to the Eby-Brown acquisition, which contributed $1.37 billion. Vistar's EBITDA grew 63.0% to $51.5 million - Foodservice net sales increased **7.8%** YoY, driven by a **5.6%** growth in cases sold to independent customers[121](index=121&type=chunk) - Foodservice EBITDA increased **13.0%** YoY to **$104.0 million**, benefiting from a favorable shift in sales mix towards higher-margin Performance Brands products sold to independent customers[122](index=122&type=chunk)[123](index=123&type=chunk) - Vistar net sales increased **158.9%** YoY, almost entirely due to the Eby-Brown acquisition. Vistar's EBITDA grew **63.0%** to **$51.5 million**[126](index=126&type=chunk)[127](index=127&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and restricted cash balance increased to $1.09 billion from $25.4 million, mainly due to receiving $1.06 billion in proceeds from the issuance of Notes due 2027. These funds are held in escrow to finance the Reinhart acquisition. Cash from operations was $84.2 million. The company maintains an ABL facility with $1.25 billion in excess availability - Cash and restricted cash increased to **$1,087.4 million**, primarily due to the **$1,060.0 million** proceeds from the Notes due 2027 issuance, which are held in escrow for the Reinhart Transaction[135](index=135&type=chunk)[136](index=136&type=chunk) - Net cash provided by operating activities was **$84.2 million** for the quarter, an increase from **$32.3 million** in the prior year, driven by higher operating income and working capital improvements[139](index=139&type=chunk) ABL Facility Availability (in millions) | | As of Sep 28, 2019 | As of Jun 29, 2019 | | :--- | :--- | :--- | | Aggregate borrowings | $810.0 | $859.0 | | Letters of credit | $94.7 | $89.9 | | **Excess availability** | **$1,248.3** | **$1,182.7** | [Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the company's market risks, which consist of interest rate risk and fuel price risk, since the end of the last fiscal year on June 29, 2019 - There have been no material changes to the company's market risks (interest rate and fuel price risk) since June 29, 2019[169](index=169&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 28, 2019. During the quarter, the company implemented a new lease accounting system and related controls for the adoption of the new lease standard. No other material changes to internal control over financial reporting were identified - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[171](index=171&type=chunk) - A new lease accounting system and related controls were implemented during the quarter to facilitate the adoption of the new lease accounting standard[172](index=172&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is subject to various legal actions in the ordinary course of business but reports no material changes to these proceedings from those disclosed in its Annual Report on Form 10-K - There have been no material changes to legal proceedings from those discussed in the Form 10-K for the fiscal year ended June 29, 2019[176](index=176&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to its principal risk factors from those previously disclosed in its Annual Report on Form 10-K - There have been no material changes to the company's principal risk factors from those disclosed in the Form 10-K[177](index=177&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of fiscal 2020, the company repurchased 139,205 shares of its common stock at an average price of $44.54 per share. These repurchases were made via share withholding to cover employee payroll tax obligations related to stock-based compensation. As of September 28, 2019, approximately $240.7 million remained available under the company's $250 million share repurchase program Share Repurchases in Q1 FY2020 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jun 30 - Jul 27, 2019 | — | - | | Jul 28 - Aug 24, 2019 | 79,266 | $43.61 | | Aug 25 - Sep 28, 2019 | 59,939 | $45.76 | | **Total** | **139,205** | **$44.54** | - The Board of Directors authorized a share repurchase program for up to **$250 million** in November 2018. As of September 28, 2019, approximately **$240.7 million** remained available for repurchases[180](index=180&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) None reported [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include the indenture for the 5.500% Senior Notes due 2027, forms of restricted stock agreements, and CEO/CFO certifications as required by the Sarbanes-Oxley Act - Key exhibits filed include the Indenture for the new 5.500% Senior Notes due 2027 and Sarbanes-Oxley Act certifications by the CEO and CFO[181](index=181&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) PFG is a major U.S. food and food-related product distributor operating through Foodservice and Vistar segments - PFG markets and distributes over **160,000** food and food-related products to more than **170,000** customer locations across the U.S. from **83** distribution centers[16](index=16&type=chunk) - The company operates through two reportable segments as of fiscal 2019: Foodservice and Vistar[17](index=17&type=chunk) - On June 30, 2019, PFG entered into an agreement to acquire Reinhart Foodservice, L.L.C. for **$2.0 billion**, a transaction expected to be financed through a mix of debt and equity[18](index=18&type=chunk) - The Foodservice segment serves over **100,000** customer locations, including independent restaurants and multi-unit chains like Cracker Barrel, Red Lobster, and TGI Friday's[56](index=56&type=chunk)[59](index=59&type=chunk) - The Vistar segment is a leading national distributor to vending, office coffee service, theater, and retail channels, serving over **70,000** customer locations[61](index=61&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from intense competition, low margins, cost inflation, acquisition integration, and substantial indebtedness - The foodservice distribution industry is highly competitive with two larger national distributors (Sysco and US Foods) and numerous regional and local players, which may result in price reductions and loss of market share[69](index=69&type=chunk) - The business operates in a low-margin industry, making profitability sensitive to cost inflation/deflation, changes in consumer eating habits, and fluctuations in fuel costs[70](index=70&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk) - The pending **$2.0 billion** acquisition of Reinhart Foodservice faces risks including failure to obtain regulatory approval, difficulties in integration, and the possibility that expected synergies may not be realized[92](index=92&type=chunk)[116](index=116&type=chunk)[123](index=123&type=chunk) - As of June 29, 2019, the company had **$1,350.1 million** of indebtedness, which could require a substantial portion of cash flow for debt service, increasing vulnerability to economic downturns and limiting strategic flexibility[127](index=127&type=chunk) - Following the acquisition of Eby-Brown, a significant portion of sales will depend on cigarettes and tobacco products, a market that is in gradual decline due to health concerns, regulation, and taxes[98](index=98&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[136](index=136&type=chunk) [Properties](index=22&type=section&id=Item%202.%20Properties) PFG operates 83 distribution centers across the U.S., 35 owned and 48 leased, strategically located for customer service Distribution Center Count by Segment (as of June 29, 2019) | Segment | Owned Facilities | Leased Facilities | Total Facilities | | :--- | :--- | :--- | :--- | | **Total** | **35** | **48** | **83** | | Foodservice | - | - | 48 | | Vistar | - | - | 35 | - The Foodservice segment operates **48** distribution centers, averaging **200,000** square feet per facility. The Vistar segment operates **35** distribution centers, averaging **150,000** square feet per facility[137](index=137&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, most notably an EEOC lawsuit alleging gender discrimination in hiring and promotion - In June 2013, the EEOC filed a lawsuit against the company alleging a pattern of gender discrimination in hiring and promotion for operational positions within its broadline division[141](index=141&type=chunk) - The litigation is bifurcated into two phases. The company cannot estimate the potential loss or range of loss from this lawsuit[141](index=141&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[143](index=143&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) PFG common stock trades on NYSE, with no current dividend plans due to debt covenants, and a **$250 million** share repurchase program - The company's common stock is listed on the New York Stock Exchange under the symbol "PFGC"[145](index=145&type=chunk) - The company has no current plans to pay dividends on its common stock, and its ability to do so is limited by covenants in its debt agreements[146](index=146&type=chunk) - A share repurchase program for up to **$250 million** was authorized in November 2018. As of June 29, 2019, **$240.7 million** remained available for repurchases[150](index=150&type=chunk) [Selected Financial Data](index=26&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of key financial data, showing consistent net sales growth and fluctuating net income Selected Financial Data (in millions, except per share data) | Fiscal Year Ended | Net Sales | Gross Profit | Operating Profit | Net Income | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | :--- | | **June 29, 2019** | $19,743.5 | $2,513.0 | $283.3 | $166.8 | $1.59 | | **June 30, 2018** | $17,619.9 | $2,292.8 | $253.5 | $198.7 | $1.90 | | **July 1, 2017** | $16,761.8 | $2,124.8 | $211.0 | $96.3 | $0.93 | | **July 2, 2016** | $16,104.8 | $2,010.0 | $202.2 | $68.3 | $0.70 | | **June 27, 2015** | $15,270.0 | $1,848.3 | $160.1 | $56.5 | $0.64 | - Total debt stood at **$1,350.1 million** at the end of fiscal 2019, up from **$1,184.2 million** in fiscal 2018[155](index=155&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2019 net sales grew due to volume and acquisition, but net income decreased from higher tax expense, while liquidity remained strong Consolidated Results of Operations (Fiscal 2019 vs. 2018) | Metric | Fiscal 2019 | Fiscal 2018 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $19,743.5 M | $17,619.9 M | +12.1% | | **Gross Profit** | $2,513.0 M | $2,292.8 M | +9.6% | | **Operating Profit** | $283.3 M | $253.5 M | +11.8% | | **Net Income** | $166.8 M | $198.7 M | -16.1% | | **Adjusted EBITDA** | $475.5 M | $426.7 M | +11.4% | - The decrease in net income for fiscal 2019 was primarily due to a **$56.6 million** increase in income tax expense, as fiscal 2018 benefited from the Tax Cuts and Jobs Act[184](index=184&type=chunk)[186](index=186&type=chunk) - The acquisition of Eby-Brown in Q4 fiscal 2019 contributed **$949.7 million** to net sales[180](index=180&type=chunk) [Segment Results](index=32&type=section&id=Segment%20Results) In FY2019, Foodservice net sales and EBITDA grew, while Vistar saw substantial growth driven by the Eby-Brown acquisition Net Sales by Segment (Fiscal 2019 vs. 2018, in millions) | Segment | FY 2019 Net Sales | FY 2018 Net Sales | Change (%) | | :--- | :--- | :--- | :--- | | **Foodservice** | $15,095.1 | $14,273.1 | +5.8% | | **Vistar** | $4,641.8 | $3,341.0 | +38.9% | EBITDA by Segment (Fiscal 2019 vs. 2018, in millions) | Segment | FY 2019 EBITDA | FY 2018 EBITDA | Change (%) | | :--- | :--- | :--- | :--- | | **Foodservice** | $428.0 | $411.4 | +4.0% | | **Vistar** | $165.6 | $133.1 | +24.4% | | **Corporate & All Other** | ($154.9) | ($160.4) | +3.4% | - Foodservice segment growth was driven by a **4.9%** increase in case volume to independent customers, who represent a higher-margin channel[200](index=200&type=chunk) - Vistar's substantial sales growth was primarily due to the acquisition of Eby-Brown, which contributed **$949.7 million** in net sales in Q4 2019[208](index=208&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity stems from operations and credit facility, with FY2019 cash from operations at **$317.4 million** and a **$2.4 billion** ABL facility Cash Flow Summary (Fiscal 2019, in millions) | Cash Flow Category | Amount | | :--- | :--- | | **Net Cash from Operating Activities** | $317.4 | | **Net Cash used in Investing Activities** | ($349.4) | | **Net Cash from Financing Activities** | $39.6 | - Investing activities included **$211.6 million** for business acquisitions and **$139.1 million** for capital expenditures on property, plant, and equipment[234](index=234&type=chunk) - In May 2019, the company entered into the Third Amended and Restated Credit Agreement, increasing its ABL facility from **$1.95 billion** to **$2.4 billion** and extending the maturity to May 2024[231](index=231&type=chunk)[240](index=240&type=chunk) - As of June 29, 2019, the company had **$1,182.7 million** of excess availability under its Amended Credit Agreement[244](index=244&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in areas like doubtful accounts, inventory, self-insurance, income taxes, vendor rebates, and goodwill - Key critical accounting policies include allowance for doubtful accounts, inventory valuation, insurance programs, income taxes, vendor rebates, and goodwill/intangible assets[263](index=263&type=chunk) - The company uses a qualitative assessment ("step zero") for its annual goodwill impairment test and determined no further quantitative analysis was necessary in fiscal 2019 or 2018[273](index=273&type=chunk)[274](index=274&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk with swaps and fuel price risk with surcharges and collars, mitigating market fluctuations - The company's primary market risks are interest rate risk on its variable-rate debt and fuel price risk for its delivery fleet[277](index=277&type=chunk)[282](index=282&type=chunk) - As of June 29, 2019, the company had eight interest rate swaps with a combined notional amount of **$550.0 million** to hedge interest rate risk[278](index=278&type=chunk)[406](index=406&type=chunk) - Fuel price risk is mitigated through customer surcharges and the use of costless collars, which covered approximately **18%** of expected fuel consumption for the next 12 months[283](index=283&type=chunk) [Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements, including balance sheets, income statements, and cash flow statements Key Balance Sheet Items (in millions) | Account | As of June 29, 2019 | As of June 30, 2018 | | :--- | :--- | :--- | | **Total Current Assets** | $2,670.6 | $2,203.5 | | **Total Assets** | $4,653.5 | $4,000.9 | | **Total Current Liabilities** | $1,699.3 | $1,470.0 | | **Total Liabilities** | $3,355.3 | $2,865.6 | | **Total Shareholders' Equity** | $1,298.2 | $1,135.3 | Key Statement of Operations Items (in millions) | Account | FY 2019 | FY 2018 | FY 2017 | | :--- | :--- | :--- | :--- | | **Net Sales** | $19,743.5 | $17,619.9 | $16,761.8 | | **Gross Profit** | $2,513.0 | $2,292.8 | $2,124.8 | | **Operating Profit** | $283.3 | $253.5 | $211.0 | | **Net Income** | $166.8 | $198.7 | $96.3 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[481](index=481&type=chunk) [Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 29, 2019 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (June 29, 2019)[482](index=482&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of June 29, 2019, based on the COSO framework[485](index=485&type=chunk) [Other Information](index=83&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[487](index=487&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=84&type=section&id=Items%2010-14) Information for Items 10-14, covering governance, compensation, and related matters, is incorporated by reference from the proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Registrant's definitive proxy statement to be filed within 120 days of the fiscal year-end[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including key agreements - This section contains the index of all financial statements, schedules, and exhibits filed with the Form 10-K[498](index=498&type=chunk) [Form 10-K Summary](index=85&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no information for the Form 10-K Summary - None[497](index=497&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37578 Performance Food Group Company (Exact name of registrant as specified in its charter) Washington, D.C. 20549 Form 10-Q (Mark One) (Registrant's Telephone Number, Includi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 29, 2018 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37578 Performance Food Group Company (Exact name of registrant as specified in its charter) Delaware 43-1983182 (State or other ...